{"doc_id": "c404d6c451441edbc78c8cae0cca4895", "text": "QPM forecast summary table July 2022 MPC Press report\nSummary tables of quarterly projection model projections\nSummary of selected forecast results\n* Figures below the forecast in parentheses represents the previous MPC forecast\n1. Selected forecast results (quarterly)\nPercentage change\n(year-on-year)\nActual\nForecast\n1\n2\n3\n4\n2021\n1\n2\n3\n4\n2022\n1\n2\n3\n4\n2023\n1\n2\n3\n4\n2024\n1.\nHeadline CPI\n3.1\n4.9\n4.9\n5.5\n4.5\n5.7\n6.5\n7.0\n7.0\n6.5\n6.8\n5.9\n5.2\n5.0\n5.7\n4.8\n4.8\n4.7\n4.5\n4.7\n(3.1)\n(4.9)\n(4.9)\n(5.5)\n(4.5)\n(5.7)\n(6.3)\n(6.0)\n(5.8)\n(5.9)\n(5.3)\n(4.8)\n(4.8)\n(4.9)\n(5.0)\n(4.8)\n(4.7)\n(4.6)\n(4.5)\n(4.7)\n2.\nCore CPI\n2.8\n3.1\n3.1\n3.3\n3.1\n3.6\n4.1\n4.4\n5.0\n4.3\n5.5\n5.7\n5.6\n5.4\n5.6\n5.2\n5.0\n4.8\n4.6\n4.9\n(2.8)\n(3.1)\n(3.1)\n(3.3)\n(3.1)\n(3.6)\n(3.8)\n(4.0)\n(4.4)\n(3.9)\n(4.8)\n(5.1)\n(5.2)\n(5.2)\n(5.1)\n(5.0)\n(4.9)\n(4.7)\n(4.6)\n(4.8)\n2. Selected forecast results (annual)\nPercentage changes\n(unless otherwise indicated)\nActual\nForecast\n2019\n2020\n2021\n2022\n2023\n2024\n1.\nGDP growth\n0.3%\n-6.3%\n4.9%\n2.0%\n1.3%\n1.5%\n(0.1%)\n(-6.4%)\n(4.9%)\n(1.7%)\n(1.9%)\n(1.9%)\n2.\nOutput gap\n0.0\n-3.5\n-2.0\n-0.5\n0.0\n0.4\n(-0.3)\n(-3.9)\n(-2.3)\n(-1.3)\n(-0.3)\n(0.5)\n3.\nNominal effective exchange rate\n-7.0%\n-12.8%\n9.9%\n-2.0%\n-4.0%\n-1.7%\n(-7.0%)\n(-12.8%)\n(9.9%)\n(-1.8%)\n(-2.9%)\n(-1.4%)\n4.\nReal effective exchange rate\n-4.5%\n-10.6%\n11.1%\n-2.4%\n-1.5%\n0.9%\n(-4.5%)\n(-10.6%)\n(11.1%)\n(-2.3%)\n(-0.8%)\n(1.2%)\n5.\nReal exchange rate gap\n-1.3\n-10.9\n0.0\n-2.2\n-3.7\n-2.8\n(-1.3)\n(-10.8)\n(0.0)\n(-2.1)\n(-2.9)\n(-1.7)\n6.\nRepurchase rate (end of period)\n6.50\n3.50\n3.61\n5.61\n6.45\n6.78\n(6.50)\n(3.50)\n(3.61)\n(5.30)\n(6.21)\n(6.74)\n7.\nCurrent account balance\n-2.6\n2.0\n3.7\n2.0\n0.4\n-0.4\n(ratio to GDP) **\n(-2.6)\n(2.0)\n(3.7)\n(2.1)\n(0.8)\n(-0.1)\nNotes\n1. Nominal effective exchange rate: is based on the bilateral exchange rates of our three largest trading partners (euro area, United States and Japan). The bilateral exchange rates are weighted by export trade weights.\n2. Real effective exchange rate: is the nominal effective exchange rate deflated by the consumer price differential (between South Africa and the trade weighted CPI of euro area, United States and Japan).\n3. Real exchange rate gap: The gap signifies the extent to which the real exchange rate deviates from its estimated equilibrium level. A positive gap shows an overvaluation of the currency, and vice versa.\n4. ** Current account balance as a percentage of GDP: forecast obtained from the SARB's Core macroeconometric model.\n5. Repurchase rate : End of period refers to the average repo rate for the last quater of the year.", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Forecast/Forecasts July 2022.pdf"}
{"doc_id": "06164f85281588bacb43a828e4ae125f", "text": "QUARTERLY \nECONOMIC \nREVIEW \n \n \n \nMARCH 2025 \n \nCONTENTS \n1. OVERVIEW ....................................................................................................... 1 \n2. INTERNATIONAL DEVELOPMENTS ........................................................ 2 \n3. DOMESTIC ECONOMIC DEVELOPMENTS ...........................................10 \n4. MONETARY DEVELOPMENTS .................................................................18 \n5. STOCK MARKET DEVELOPMENTS ........................................................20 \n6. PAYMENT, CLEARING AND SETTLEMENT ACTIVITIES ................23 \n7. FISCAL DEVELOPMENTS ..........................................................................25 \n \n \n \n \n \n \n \n \n \n \n \n \nii \n \nList of Figures \n \nFigure 1: Precious Minerals Prices (US$/ounce): March 2022 – March 2025 ............................... 4 \nFigure 2: Base Metal Prices (US$/tonne): March 2022 – March 2025 .......................................... 5 \nFigure 3: Lithium Prices (US$/tonne): March 2023 – March 2025................................................ 6 \nFigure 4: Brent Crude Oil Prices (US$/barrel): March 2022 – March 2025 .................................. 6 \nFigure 5: Official and Parallel Market Exchange Rates April 2024 – March 2025 ....................... 7 \nFigure 6: Quarterly Merchandise Total Trade (US$m) .................................................................. 7 \nFigure 7: Quarterly Merchandise Exports (US$m) ......................................................................... 8 \nFigure 8: Major Merchandise Export Destination .......................................................................... 9 \nFigure 9: Quarterly Merchandise Imports (US$m) ......................................................................... 9 \nFigure 10: Major Merchandise Import Source.............................................................................. 10 \nFigure 11: Merchandise Trade Balance (US$m) .......................................................................... 10 \nFigure 12: Quarterly Trends in Platinum and Palladium Output (kg) .......................................... 14 \nFigure 13: Quarterly Trends in Rhodium Output (kg) .................................................................. 14 \nFigure 14: Quarterly Trends in Nickel Output (mt) ...................................................................... 14 \nFigure 15: Quarterly Trends in Diamond Output (carats) ............................................................ 15 \nFigure 16: Quarterly Trends in Chrome Ore Output (Tonnes) ..................................................... 15 \nFigure 17: Quarterly trends in coal output .................................................................................... 16 \nFigure 18: Lithium production 2024 and 2024 ............................................................................. 16 \nFigure 19: Quarterly Power Output by IPPs ................................................................................. 17 \nFigure 20: Monthly US$ Inflation Profile (%) ............................................................................. 18 \nFigure 21: Annual US$ Inflation Profile (%) ............................................................................... 18 \nFigure 22: Broad Money Developments (ZiG billion) ................................................................. 19 \nFigure 23: Distribution of Private Sector Credit ........................................................................... 19 \nFigure 24: Interest Rates Developments (%) ................................................................................ 20 \nFigure 25: ZSE All Share, Top 10 and Mining Indices ................................................................ 21 \nFigure 26: ZSE Market Turnover ................................................................................................. 21 \nFigure 27: ZSE Market Capitalisation (ZiG millions) .................................................................. 22 \nFigure 28: Victoria Falls Stock Exchange All Share Index .......................................................... 22 \nFigure 29 VFEX Market Capitalization in billions of US$ .......................................................... 22 \nFigure 30: Values (ZiG) and Volumes of RTGS Transactions from Q2 2024 to Q1 2025 .......... 23 \nFigure 31: Retail Transaction Values (ZiG) from Q2 2024 to Q1 2025 ....................................... 24 \nFigure 32: Retail Transaction Volumes from Q2 2024 to Q1 2025 ............................................. 24 \nFigure 33: Collateral Amounts (ZiG) from Q2 2024 to Q1 2025 ................................................. 24 \nFigure 34: Government Revenue Structure: First quarter 2025.................................................... 26 \nFigure 35: Government Expenditure, First Quarter 2025 ............................................................. 26 \nFigure 36: Budget balance (ZWG billion) .................................................................................... 27 \n \n \n \niii \n \nList of Tables \n \nTable 1: Global and Regional Economic Growth & Outlook (%).................................................. 2 \nTable 2: International Commodity Prices: January – March 2025 ................................................. 4 \nTable 3: Quarterly Merchandise Exports (US$m) .......................................................................... 8 \nTable 4: Quarterly Merchandise Imports (US$m) ........................................................................ 9 \nTable 5: Area under selected key crops (ha) ................................................................................. 11 \nTable 6: Quarterly Cattle Slaughters ............................................................................................. 12 \nTable 7: Quarterly Pig Slaughters ................................................................................................. 12 \nTable 8: First Quarter Milk Output (million litres) in 2024 and 2025 .......................................... 12 \nTable 9: Quarterly Mineral Output Statistics ................................................................................ 13 \nTable 10: Quarterly Gold Deliveries to FGR for 2024 and 2025 (kg).......................................... 13 \nTable 11: Quarterly Power Output. ............................................................................................... 16 \nTable 12: Monthly Inflation Profiles (%) ..................................................................................... 17 \nTable 13: Key Stock Market Indicators ........................................................................................ 20 \nTable 14: Consolidated Transactional Activities for the First Quarter 2025 ................................ 23 \nTable 15: Payment Systems Access Points and Devices for the First Quarter of 2025................ 25 \nTable 16: Summary of first Quarter 2025 Fiscal Position ............................................................ 25 \nTable 17: Summarised Government Spending (ZiG milions) ..................................................... 26 \n \n \n \n \n \n \n1 \n \n1. \nOVERVIEW \nThe global economy is facing weakened \neconomic prospects due to escalating trade \ntensions and policy uncertainty. The IMF projects \nglobal growth to decline from an estimated 3.3% \nin 2024 to 2.8% in 2025 before a slight rebound \nin 2026. Global headline inflation is expected to \ndecrease, but at a slower pace than previously \nanticipated, averaging 4.3% in 2025 and 3.6% in \n2026. \n \nThe tight monetary policy stance that continued in \nthe first quarter of 2025 has resulted in a stable \nmacroeconomic environment, characterised by a \nmarked \ndeceleration \nin \nprices. \nThis \nis \nnotwithstanding a once-off shock in January \n2025. Monthly ZiG inflation decelerated by 3.7 \npercentage points from 3.7% in December 2024 to \n-0.1% in March 2025, driven by both food and \nnon-food inflation. \n \nThe US$ month-on-month inflation rate also \nreceded from 0.6% recorded in December 2024 to \n0.1% in March 2025. The end period willing-\nbuyer willing-seller (WBWS) interbank exchange \nrate depreciated by 3.77%, from US$1: ZiG25.80 \nrecorded in the previous quarter to US$1: \nZiG26.77 during the first quarter of 2025. \n \nThe country’s exports in the first quarter of 2025, \namounted to US$1.75 billion against an import \nbill US$2.29 billion. The country’s trade deficit \nwidened from US$381.8 million in the fourth \nquarter of 2024 to US$543.0 million during the \nfirst quarter of 2025. \n \nBroad money stock (M3) stood at ZiG91.53 \nbillion in March 2025, reflecting a quarter-on-\nquarter growth of 4.67% from ZiG87.45 billion \nrecorded in December 2024.This emanated from \ngrowth in both foreign currency and local \ncurrency components of broad money. The \ngrowth of 4.67% was 11.92 percentage points \nlower than the 16.62% recorded in the fourth \nquarter of 2024. Foreign currency deposits \naccounted for 82.41% of broad money, followed \nby local currency deposits constituting 17.48%, \nand currency in circulation constituting a balance \nof 0.12%. \n \nOn the capital markets, the ZSE traded in a \nnegative trajectory, resulting in major indices \nregistering losses during the first quarter of 2025. \nConsequently, the All-Share index declined by \n5.67% to close at 205.25. In contrast, the VFEX \nexhibited bullish sentiments, with the VFEX All \nShare index gaining 4.12% to close at 110.32 \npoints. \n \nThe value of electronic transactions processed \nthrough the National Payment Systems (NPS) \ninfrastructure decreased from ZiG583.14 billion \nin the fourth quarter of 2024 to ZiG532.61 billion \nduring the first quarter of 2025. Similarly, NPS \ntransaction volumes also decreased from 188.64 \nmillion to 174.41 million during the same period. \n \n \n \n2 \n \n \n \n \n2. \nINTERNATIONAL DEVELOPMENTS \nGlobal growth is projected to decline from an \nestimated 3.3% in 2024 to 2.8% in 2025, before \nrebounding to 3% in 2026. The figures represent \ndownward revision from the January 2025 World \nEconomic Outlook (WEO) Update, with 0.5 and \n0.3 percentage point reductions for 2025 and \n2026, respectively, driven by weaker forecasts for \nmost countries. The downgrades are a result of the \nimpact of newly imposed trade measures, \ncompounded by their spillover through global \nsupply chains, increasing policy uncertainty, and \ndeclining business and consumer sentiment. \n \nTable 1: Global and Regional Economic \nGrowth & Outlook (%) \nRegion/Country \n2024 \nEst. \n2025 \nProj. \n2026 \nProj. \nWorld Output \n3.3 \n2.8 \n3.0 \nAdvanced Economies \n1.8 \n1.4 \n1.5 \n USA \n2.8 \n1.8 \n1.7 \n Euro-Area \n0.9 \n0.8 \n1.2 \n United Kingdom \n1.1 \n1.1 \n1.4 \nEmerging Markets & \nDeveloping Economies \n4.3 \n3.7 \n3.9 \n Emerging and \nDeveloping Asia \n5.3 \n4.5 \n4.6 \n China \n5.0 \n4.0 \n4.0 \n India \n6.5 \n6.2 \n6.3 \n Emerging and \nDeveloping Europe \n3.4 \n2.1 \n2.1 \n Russia \n4.1 \n1.5 \n0.9 \nSub Saharan Africa \n4.0 \n3.8 \n4.2 \n Nigeria \n3.4 \n3.0 \n2.7 \n South Africa \n0.6 \n1.0 \n1.3 \n Zimbabwe \n2.0 \n6.0 \n5.0 \nSource: IMF WEO: April 2025 Update \nGrowth in advanced economies is expected to \ndecline from an estimated 1.8% in 2024 to 1.4% \nin 2025, followed by a slight increase to 1.5% in \n2026. Real growth for the US economy is \nforecasted to slow to 1.8% in 2025. In 2026, \ngrowth is projected to moderate further to 1.7%, \nsupported by moderate private consumption \ndespite continued tariff pressures. \n \nGrowth in the euro area is anticipated to decrease \nslightly to 0.8% in 2025, before modestly \nrebounding to 1.2% in 2026. Factors supporting \nthe modest recovery in 2026 include stronger \nconsumption, fuelled by rising real wages and a \nprojected fiscal easing in Germany after \nsignificant revisions to its fiscal rule. \n \nGrowth is expected to decline in emerging market \nand developing economies to 3.7% in 2025 and \n3.9% in 2026, following an estimated 4.3% in \n2024. After a significant slowdown in 2024, \ngrowth in emerging and developing Asia is \nprojected to decline further to 4.5% in 2025 and \n4.6% in 2026. \n \nChina’s GDP growth for 2025 has been revised \ndownward to 4.0% from 4.6% in the January 2025 \nWEO Update. This adjustment reflects the effects \nof recently imposed tariffs, which have countered \nthe stronger carryover from 2024. Growth for \n2026 has also been adjusted downward to 4.0%, \nfrom 4.5% in the January 2025 WEO Update, \nprimarily due to the ongoing trade policy \nuncertainty and the existing tariffs. \n \nIn emerging and developing Europe, growth is \nexpected to slow significantly, declining from \n3.4% in 2024 to 2.1% in both 2025 and 2026. This \nslowdown is largely driven by a sharp decrease in \n3 \n \n \n \n \ngrowth in Russia, which is projected to fall from \n4.1% in 2024 to 1.5% in 2025 and 0.9% in 2026. \n \nIn sub-Saharan Africa, growth is projected to \ndecline slightly from 4% in 2024 to 3.8% in 2025, \nwith a modest recovery to 4.2% in 2026. Nigeria's \ngrowth forecast has been revised downward by \n0.2 percentage points for 2025 and 0.3 percentage \npoints for 2026, primarily due to lower oil prices. \nSimilarly, South Africa's growth forecast has \nbeen adjusted downward by 0.5 percentage points \nfor 2025 and 0.3 percentage points for 2026. This \nreflects slowing momentum from a weaker-than-\nexpected 2024 outturn, deteriorating sentiment \ndue to heightened uncertainty, the intensification \nof protectionist policies, and a deeper slowdown \nin major economies. \n \nGlobal Inflation \nGlobal headline inflation is projected to decrease \nat a slightly slower pace than previously \nanticipated, averaging 4.3% in 2025 and 3.6% in \n2026. The inflation forecasts for advanced \neconomies have been revised and are notably \nhigher, while those for emerging market and \ndeveloping economies have been trimmed down \nfor 2025. \n \nRisks \nIntensifying downside risks dominate the global \neconomic landscape. Escalating trade tensions \nand heightened trade disputes coupled with \nelevated policy uncertainty threaten to reduce \ngrowth further, while weakened fiscal and \nmonetary buffers leave the countries more \nvulnerable to shocks. This may cause major \nfluctuations in exchange rates and capital flows, \nparticularly for debt-stressed economies which \nmay result in broader financial instability, \npotentially \nundermining \nthe \ninternational \nmonetary system. \n \nIn addition, escalating geopolitical tensions could \nexacerbate risks, leading to increased commodity \nprices. The ongoing conflicts in the Middle East \nand Ukraine may directly affect food and energy \nprices, as well as disrupt trade routes. \n \nOpportunities \nOn the upside, a de-escalation in the current \ntit-for-tat tariff hikes and new trade agreements \ncould lift global growth. \n \nINTERNATIONAL COMMODITY PRICE \nDEVELOPMENTS \nInternational \ncommodity \nprices \nfor \ngold, \nplatinum, copper, lithium and crude oil increased \nduring the first quarter of 2025, while palladium \nand nickel prices declined during the same period. \nTable 2 shows the evolution of selected \ncommodity prices during the quarter under \nreview. \n \n \n \n \n \n4 \n \n \n \n \nTable 2: International Commodity Prices: \nJanuary – March 2025 \n \n2024 Q4 \nAverage \nJan-25 \nFeb-25 \nMar-25 \n2025 Q1 \nAverage \nChanges \n(Q4 - \nQ1) (%) \nGold \n(US$/oz) \n2,663.21 \n2,707.74 \n2,896.38 \n2,983.42 \n2,862.51 \n7.48 \nPlatinum\n(US$/oz) \n967.91 \n948.45 \n975.53 \n980.45 \n968.14 \n0.02 \nPalladiu\nm(US$/o\nz) \n1,010.63 \n952.01 \n975.08 \n957.58 \n961.56 \n-4.86 \nCopper \n(US$/ton\nne) \n9,300.33 \n9,108.02 \n9,406.75 \n9,764.52 \n9,426.43 \n1.36 \nNickel \n(US$/ton\nne) \n16,213.37 \n15,610.91 \n15,497.65 \n16,259.24 \n15,789.27 \n-2.62 \nLithium \n(US$/ton\nne) \n9,393.30 \n10,025.00 \n10,350.00 \n9,534.47 \n9,969.82 \n6.14 \nCrude \nOil \n(US$/bar\nrel) \n73.87 \n77.79 \n74.57 \n71.02 \n74.46 \n0.8 \nSource: World Bank and Bloomberg, 2025 \n \nCommodity price developments were mainly \ninfluenced by escalating global trade wars during \nthe review period. \n \nGold \nGold prices increased by 7.48% to US$2,862.51 \nper ounce in the first quarter of 2025, from an \naverage of US$2,663.21 per ounce reported in the \nfourth quarter of 2024. The surge in price was \nfuelled by rising global tensions, trade policy \nuncertainties due to U.S tariff threats, higher U.S \ninflation, declining U.S treasury yields, and \nanticipated economic policy changes, which \nultimately boosted gold's safe-haven appeal. \n \nPlatinum \nPlatinum prices were relatively steady during the \nfirst quarter of 2025, recording marginal increase \nof 0.02% to US$968.14 per from an average of \nUS$967.91 per ounce recorded in the previous \nquarter. The marginal gain in quarterly average \nprice was supported by a weaker U.S dollar, \nboosting dollar-denominated commodities, and \nhigher industrial demand. \n \nPalladium \nPalladium \nprices \nfell \nby \n4.86%, \nfrom \nUS$1,010.63 per ounce in the fourth quarter of \n2024, to US$961.56 per ounce during the first \nquarter of 2025. Palladium prices developments \nduring the quarter under review were influenced \nby ongoing geopolitical tensions, amid United \nStates of America imposed sanctions on Russia a \nkey producer of palladium. \n \nDevelopments in precious metal prices for the \nperiod March 2022 to March 2025 are shown in \nFigure 1. \n \nFigure \n1: \nPrecious \nMinerals \nPrices \n(US$/ounce): March 2022 – March 2025 \n \nSource: Bloomberg, 2025 \n800\n850\n900\n950\n1,000\n1,050\n500\n800\n1,100\n1,400\n1,700\n2,000\n2,300\n2,600\n2,900\n3,200\nMar-22\nJun-22\nSep-22\nDec-22\nMar-23\nJun-23\nSep-23\nDec-23\nMar-24\nJun-24\nSep-24\nDec-24\nMar-25\nGold\nPalladium\nPlatinum (RHS)\n5 \n \n \n \n \nCopper \nCopper prices increased by 1.36%, from \nUS$9,300.33 per tonne in the previous quarter to \nUS$9,426.43 per tonne during the first quarter of \n2025. Copper prices benefitted from tighter \nsupply conditions on the back of disruptions in \nChile, the world’s top producer. In addition, \nincreased demand, tighter supply and economic \nuncertainty also buoyed copper prices during the \nperiod under review. \n \nNickel \nNickel prices registered a 2.62% decline to \nUS$15,789.27 per tonne during the first quarter of \n2025, from a quarterly average of US$16,213.37 \nper tonne in the prior quarter. Nickel prices fell \ndue to stricter mining quotas in Indonesia which \naffected supply. In addition, reduced demand \nfrom \nChinese battery \nmanufacturers, \nwho \nincreasingly \nshifted \ntoward \nlow-nickel \ntechnologies. \n \nFigure 2 depicts developments in base metal \nprices from March 2022 to March 2025. \n \n \n \n \n \n \n \n \n \n \n \nFigure 2: Base Metal Prices (US$/tonne): \nMarch 2022 – March 2025 \n \nSource: Bloomberg, 2025 \n \nLithium \nLithium prices surged by 6.14%, from an average \nof US$9,393.30 per ounce in the previous quarter \nto US$9,969.82 per ounce during the reporting \nperiod. The price increase was driven by \nanticipated supply cuts and strong demand, \nespecially from electric vehicle (EV) batteries and \nenergy storage systems. Figure 3 shows \ndevelopments in lithium prices from March 2023 \nto March 2025. \n \n \n \n \n \n \n \n0\n5,000\n10,000\n15,000\n20,000\n25,000\n30,000\n35,000\n0\n2,000\n4,000\n6,000\n8,000\n10,000\n12,000\nMar-22\nJun-22\nSep-22\nDec-22\nMar-23\nJun-23\nSep-23\nDec-23\nMar-24\nJun-24\nSep-24\nDec-24\nMar-25\nCopper\nNickel (RHS)\n6 \n \n \n \n \nFigure 3: Lithium Prices (US$/tonne): March \n2023 – March 2025 \nSource: Bloomberg, 2025 \nBrent Crude Oil \nBrent crude oil prices registered a marginal \nincrease of 0.8%, from US$73.87 per barrel in the \nprevious quarter to US$74.46 per barrel in the \nquarter under review. The increase in prices was \nattributed to U.S. sanctions on Russia's energy \nsector that raised concerns of potential supply \nshortages, as well as trade policy disruptions \naffecting China, the top crude oil importer, and \nother key importing countries. Figure 4 illustrates \ndevelopments in crude oil prices for the period \nfrom March 2022 to March 2025. \n \n \n \n \n \n \n \n \nFigure 4: Brent Crude Oil Prices (US$/barrel): \nMarch 2022 – March 2025 \nSource: Bloomberg, 2025 \n \nEXCHANGE RATE DEVELOPMENTS \nThe end period willing-buyer willing-seller \n(WBWS) interbank exchange rate depreciated by \n3.77%, from US$1: ZiG25.80 recorded in the \nprevious quarter to US$1: ZiG26.77 during the \nfirst quarter of 2025. The exchange rate premium \nsignificantly narrowed from 42% at the close of \nthe fourth quarter of 2024, to 23% for the quarter \nunder review. \n \nFigure 5 shows developments in exchange rates \nfrom April 2024 to March 2025. \n \n \n \n -\n 10,000\n 20,000\n 30,000\n 40,000\n 50,000\n 60,000\n 70,000\n 80,000\nMar-23\nJun-23\nSep-23\nDec-23\nMar-24\nJun-24\nSep-24\nDec-24\nMar-25\n20\n30\n40\n50\n60\n70\n80\n90\n100\n110\n120\nMar-22\nJun-22\nSep-22\nDec-22\nMar-23\nJun-23\nSep-23\nDec-23\nMar-24\nJun-24\nSep-24\nDec-24\nMar-25\n7 \n \n \n \n \nFigure 5: Official and Parallel Market \nExchange Rates April 2024 – March 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nMERCHANDISE TRADE DEVELOPMENTS \nDuring the first quarter of 2025, the country’s \ntotal merchandise trade amounted to US$4.04 \nbillion, representing an 18.8% decrease from \nUS$4.97 billion recorded in the fourth quarter of \n2024. The decline in total merchandise trade was \nprimarily on account of a significant dip in both \nmerchandise exports and imports during the \nquarter under analysis. \n \nFigure \n6 \nshows \ntotal \nmerchandise \ntrade \ndevelopments during the fourth quarter of 2024 \nand the first quarters of 2024 and 2025, \nrespectively. \n \n \n \nFigure 6: Quarterly Merchandise Total Trade \n(US$m) \nSource: ZIMSTAT,2025 \n \nOn an annual basis, total merchandise trade \nimproved by 4.4%, from US$3.87 billion in the \nfirst quarter of 2024, to US$4.04 billion in the first \nquarter \nof \n2025. \nThe \nimprovement \nwas \nunderpinned by an increase in both imports and \nexports during the reporting quarter. \n \nMerchandise Export Developments \nThe country’s exports for the first quarter of 2025 \ntotalled US$1.75 billion, representing a 23.9% \ndecline from US$2.30 billion recorded in the \nfourth quarter of 2024. On the other hand, the \noutturn was 1.5% greater than the US$1.72 billion \nrealized in the comparable quarter in 2024, as \nshown in Figure 7. \n \n \n \n \n0%\n10%\n20%\n30%\n40%\n50%\n60%\n70%\n0.0\n5.0\n10.0\n15.0\n20.0\n25.0\n30.0\n35.0\n40.0\n30-Apr-24\n31-May-24\n30-Jun-24\n31-Jul-24\n31-Aug-24\n30-Sep-24\n31-Oct-24\n30-Nov-24\n31-Dec-24\n31-Jan-25\n28-Feb-25\n31-Mar-25\nPREMIUM (RHS)\nOFFICIAL RATES\nPARALLEL RATES (Transfer)\n3,865.0 \n4,973.3 \n4,036.0 \n -\n 1,000.0\n 2,000.0\n 3,000.0\n 4,000.0\n 5,000.0\n 6,000.0\n2024Q1\n2024Q4\n2025Q1\n8 \n \n \n \n \nFigure 7: Quarterly Merchandise Exports \n(US$m) \nSource: ZIMSTAT, 2025 \n \nThe increase in merchandise exports in the first \nquarter of 2025, from the corresponding quarter of \n2024 was largely driven by increased exports of \ngold and coal. \n \nTable 3 shows developments in the country’s \nexports for the first quarter of 2024 and first \nquarter of 2025. \n \n \n \n \n \n \nTable 3: Quarterly Merchandise Exports \n(US$m) \n2024Q1 \n(USm) \n2025Q1 \n(USm) \n2024Q1 \nto \n2025Q1 \nChanges \n(%) \nTotal \n1,720.60 \n1,746.50 \n1.5 \n Gold \n385.1 \n755.2 \n96.1 \nTobacco (inc \ncigarettes) \n427.3 \n321.8 \n-24.7 \nPGMs \n413.8 \n276.4 \n-33.2 \nFerrochrome \n75.4 \n64.6 \n-14.3 \nCoal \n31.6 \n52.8 \n67.1 \nDiamonds \n95.4 \n29.8 \n-68.8 \nChrome \n31.2 \n28.7 \n-8.0 \nElectricity \n6.8 \n7.8 \n14.7 \nOthers \n218.2 \n99.6 \n-54.4 \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \nMajor Merchandise Export Destinations \nDuring the period under analysis, the country’s \nexports were mainly destined for the United Arab \nEmirates, South Africa and China which \naccounted for 42.9%, 23.2% and 18.1% of the \ncountry’s exports, respectively. Other notable \nexport \ndestinations \nincluded \nMozambique, \nZambia and various other countries, collectively \ncontributing approximately 10.3% of total \nexports. Figure 8 depicts the country’s top export \ndestinations for the first quarter of 2025. \n \n \n \n \n1,720.6 \n2,295.8 \n1,746.5 \n0\n500\n1,000\n1,500\n2,000\n2,500\n2024Q1\n2024Q4\n2025Q1\n9 \n \n \n \n \nFigure \n8: \nMajor \nMerchandise \nExport \nDestination \n \n Source: ZIMSTAT & RBZ Computation, 2025 \n \nMerchandise Import Developments \nDuring the first quarter of 2025, the country’s \nimport bill totalled US$2.29 billion, down by \n14.5% from US$2.68 billion recorded in the prior \nquarter. \n \nYear-on-year, merchandise imports for the period \nunder review were 6.8% higher than the US$2.14 \nbillion in the comparable quarter in 2024. The \nincrease was driven by higher volumes of food, \nfuel, raw materials, and vehicle imports. The \nincrease in food imports was largely due to \nincreased maize imports, following a sub-optimal \n2023/24 agricultural production season, following \nthe El Niño-induced drought \n \nFigure \n9 \nshows \nthe \nmerchandise \nimport \ndevelopments for the first and fourth quarters of \n2024, and the first quarter of 2025. \nFigure 9: Quarterly Merchandise Imports \n(US$m) \n \nSource: ZIMSTAT, 2025 \nIn the first quarter of 2025, Zimbabwe’s imports \nwere mainly driven by industrial supplies, which \nare essential for manufacturing processes as they \ninclude \nraw \nmaterials, \ncomponents, \nand \nmachinery needed for production. Other major \nimport categories included fuel and lubricants, as \nwell as capital goods, as shown in Table 4. \n \nTable 4: Quarterly Merchandise Imports \n(US$m) \n \n2024Q1 \n(USM) \n2025Q1 \n(USM) \n24Q1/25Q1 \nChanges (%) \nTotal \n2,144.40 \n2,289.50 \n6.8 \n Industrial \nSupplies \n767.7 \n816.6 \n6.4 \n Fuels and \nLubricants \n420.9 \n437.8 \n4.0 \n Capital Goods \n419.3 \n417 \n-0.5 \nFood and \nBeverages \n179.4 \n242.9 \n35.4 \nTransport \nEquipment, Parts \nand Accessories \n213 \n223.9 \n5.1 \nConsumer \nGoods \n120.7 \n130.3 \n8.0 \nOther \n23.3 \n21 \n-9.9 \nSource: ZIMSTAT & RBZ Computations, 2025 \n42.9\n23.2\n18.1\n3.1\n1.6\n1.6\n1.3\n1.1\n0.9\n0.8\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\nUnited Arab Emirates\nSouth Africa\nChina\nMozambique\nBelgium\nZambia\nNetherlands\nIndia\nIndonesia\nItaly\n2,144.4\n2,677.5\n2,289.5\n2 0 2 4 Q1\n2 0 2 4 Q4\n2 0 2 5 Q1\n10 \n \n \n \n \nMajor Import Sources \nThe country’s imports for the first quarter of 2025 \nwere mainly sourced from South Africa (38.1%), \nChina (16.2%), Bahamas (11.0%), and other \nmarkets, as shown in Figure 10. \nFigure 10: Major Merchandise Import Source \nSource: ZIMSTAT & RBZ Computations, 2025 \nTrade Balance \nThe country’s trade deficit widened from \nUS$381.8 million in the fourth quarter of 2024 to \nUS$543.0 million during the first quarter of 2025. \nCompared to the corresponding quarter in 2024, \nthe country’s trade balance also worsened from a \ndeficit of US$423.8 million. \n \nFigure 11 depicts the country’s trade balance for \nthe first and fourth quarters of 2024 as well as the \nfirst quarter in 2025. \n \n \n \n \nFigure 11: Merchandise Trade Balance \n(US$m) \nSource: ZIMSTAT & RBZ Computations, 2025 \n \n3. \nDOMESTIC ECONOMIC \nDEVELOPMENTS \nREAL SECTOR DEVELOPMENTS \nAgriculture \nThe \nFirst \nCrop, \nLivestock \nand \nfisheries \nAssessment report (CLAFA-1) published during \nthe first quarter of 2025 indicated that the overall \narea under staple cereals increased by 8.1% to \n2,540,385 hectares, from 2,349,921 hectares \nachieved in the previous season. \nTable 5 shows the planted area of selected key \ncrops during the 2024/25 compared to the 2023/24 \nseason. \n \n \n38.1\n16.2\n11.0\n4.1\n2.9\n2.9\n2.4\n2.3\n2.1\n2.1\n0.0\n10.0\n20.0\n30.0\n40.0\nSouth Africa\nChina\nBahamas\nMozambique\nHong Kong\nZambia\nSingapore\nIndia\nUnited Arab Emirates\nBahrain\n1,720.6\n2,295.8\n1,746.5\n2,144.4\n2,677.5\n2,289.5\n-423.8\n-381.8\n-543.0\n (1,000.00)\n (500.00)\n -\n 500.00\n 1,000.00\n 1,500.00\n 2,000.00\n 2,500.00\n 3,000.00\n2024Q1\n2024Q4\n2025Q1\nExports\nImports\nTrade Balance\n11 \n \n \n \n \nTable 5: Area under selected key crops (ha) \nCrop \n2024/25 \n2023/24 \n% Change \nMaize \n1 822 904 \n1 728 873 \n5.4 \nSorghum \n434 374 \n405 116 \n7.2 \nPearl Millet \n251 265 \n194 232 \n29.4 \nFinger Millet \n31 842 \n21 700 \n46.7 \nSoya bean \n40111 \n37 658 \n6.5 \nGroundnuts \n223 729 \n369 772 \n-39.5 \nSugar Beans \n31 577 \n34 488 \n-8.4 \nRound nuts \n73 820 \n121 211 \n-39.1 \nAfrican pea \n92 009 \n93 732 \n-1.8 \nSunflower \n90 220 \n87 295 \n3.4 \nCotton \n122 493 \n145 256 \n-15.7 \nSesame \n39 295 \n71 990 \n-45.4 \nTobacco \n143 058 \n136 126 \n5.1 \nSource: Ministry of Lands, Agriculture, Fisheries, \nWater and Rural Development, 2025 \nThe late onset of rains, however, affected the \nplanting of crops such as groundnuts, round nuts, \ncotton and sesame whose area planted fell by \nabout 40%. \nMaize \nTotal area under maize increased by 5.4% from \n1,728,873 ha in the 2023/24 season, to 1,822,904 \nha in the current season. About 74,000 hectares of \nthe area were, however, written off due to the \nimpact of the dry spell on the early planted crop. \nCommunal areas and A1 resettlement farmers \naccounted for about 1,325,473 ha or 73% of the \ntotal maize cropping area. The crop benefited \nfrom \nthe \nGovernment \nfunded \nPfumvudza \nprogramme which supported about 504,136 ha, in \nthe current season. \nTraditional Grains \nThe total area under traditional grains comprising \nsorghum, pearl millet, and finger millet, increased \nby 15.5% in the 2024/25 season. Natural regions \n3 to 5 in Masvingo, Matabeleland South and \nMidlands provinces recorded the largest increases \nin area planted. \nCotton \nThe area put under cotton declined by 15.7%, \nfrom 145,256 hectares in the 2023/24 season to \n122,493 hectares in the current season. The \ncontraction is partially attributed to delayed \nplanting occasioned by a dry spell which occurred \nfrom mid-November to Mid-December 2024. \nLivestock \nThe CLAFA-1 2025 reported fair to good \nlivestock condition for most of the country, with \npoor cattle condition in some parts of the lowveld. \nGrazing and water availability also followed the \nsame trend, largely due to poor rainfall \ndistribution in the first half of the season. \n \nCattle \nFormal abattoir cattle slaughters increased by \n3.03% to 96,909 head in the first quarter of 2025 \nfrom 94,062 head in the comparable period in \n12 \n \n \n \n \n2024, albeit declining from 99,475 head in the \nfourth quarter of 2024. The decline in cattle \nslaughters over the quarter is partially attributable \nto retention of stock for draft power purposes, as \nwell as, rebuilding of herds following drought \nconditions in the previous year. \nTable 6 shows the total number of cattle \nslaughters at formal abattoirs in the first and \nfourth quarters of 2024 and the first quarter of \n2025. \n \nTable 6: Quarterly Cattle Slaughters \nQuarter \nSlaughters \nQ1:2024 \n94 062 \nQ4:2024 \n99 475 \nQ1:2025 \n96 909 \nSource: Ministry of Lands, Agriculture, Fisheries, \nWater, and Rural Development, 2025 \nPigs \nPig slaughters in the first quarter of 2025 \nincreased by a marginal 0.34% on the \nperformance of the same period in 2024. \nConsistent with past trends, this was 3.48% below \nthe slaughters in the fourth quarter of 2024, \nattributed to lower market demand. The industry \ncontinues to grapple with the high costs of \nproduction, chiefly on stock feeds. \nTable 7 shows the total number of pig slaughters \nat formal abattoirs in the first and fourth quarters \nof 2024 and the first quarter of 2025. \n \nTable 7: Quarterly Pig Slaughters \nQuarter \nSlaughters \nQ1:2024 \n59 026 \nQ4:2024 \n61 283 \nQ1:2025 \n59 224 \nSource: Ministry of Lands, Agriculture, Fisheries, Water, \nand Rural Development, 2025 \nMilk Production \nTotal fresh milk output increased by 2.67% to \n28.03 megalitres in the first quarter of 2025, up \nfrom the 27.30 megalitres produced in the same \nperiod in 2024. Growth in dairy output continues \nto accrue from investments aimed at increasing \nthe herd size and cow productivity by the industry \nplayers. \nTable 8 shows the fresh milk production statistics \nin 2024 and 2025. \n \nTable 8: First Quarter Milk Output (million \nlitres) in 2024 and 2025 \n \n2024 \n2025 \nVariance% \nJan \n9.53 \n9.77 \n2.52 \nFeb \n8.81 \n8.69 \n-1.32 \nMar \n8.96 \n9.57 \n6.76 \nQ1 \n27.30 \n28.03 \n 2.67 \nSource: Ministry of Lands, Agriculture, Fisheries, \nWater, and Rural Development, 2025 \n \n \n13 \n \n \n \n \nMINING \nThe first quarter 2025 mining output showed \nmixed performance when compared to similar \nquarter in 2024. Gold, iridium and coal showed \nstrong performance. \nTable 9 shows quarterly mineral performances in \n2024 and 2025. \n \nTable 9: Quarterly Mineral Output Statistics \nQ1 2024 \nQ4 20 24 \nQ1 2025 \nGold (kg) \n6,638.0 \n12,696.7 \n8,979.89 \nPlatinum (kg) \n4,987.5 \n4,515.7 \n4,177.25 \nPalladium (kg) \n4,136.1 \n3,640.9 \n3,413.81 \nRhodium (kg) \n436.6 \n424.3 \n394.15 \nIridium (kg) \n218.8 \n225.4 \n308.10 \nRuthenium (kg) \n367.6 \n460.3 \n405.12 \nDiamonds (cts) \n1,417,150 \n1,422,858 \n782,648.49 \nChrome (MT) \n495,097.8 \n512,410.2 \n468.795.0 \nNickel (MT) \n4,046.1 \n3,447.5 \n3,097.46 \nCopper (MT) \n3,689.8 \n2,751.6 \n2,561.78 \nCobalt (MT) \n85.3 \n91.1 \n77.74 \nCoal (MT) \n1,047,279 \n1,731,331 \n1,688,429.00 \nHCFC (MT) \n90,998 \n1,464,496 \n98,196.67 \nLithium (MT) \n902,898.6 \n338,038 \n358,468.02 \nGranite (MT) \n446,217.6 \n37,381.7 \n23,848.01 \nVermiculite \n(MT) \n4,222.3 \n36,837.2 \n3,028.10 \nSource: Ministry of Mines and Mining Development & \nChamber of Mines Zimbabwe, 2025 \n \nGold \nGold output stood at 8,979.89 kg in the first \nquarter of 2025, about 29% lower than 12,696.70 \nkg produced in the last quarter of 2024. The first \nquarter of 2025 output was, however 35% better \nthan 6,638.0 kg produced in the comparable \nperiod in 2024. \n \nThe first quarter 2025 gold deliveries to Fidelity \nGold Refiners (FGR), amounted to 8,496.4 \nkilograms, down from 12,214.0 kilograms \ndelivered in the fourth quarter of 2024. Deliveries \nin the first quarter of 2025 to FGR recorded a \nsignificant increase of 41% when compared to \ndeliveries \nof \n6,044.87 \nkilograms \nin \nthe \ncomparable quarter in 2024. \n \nTable 10 below shows deliveries to FGR in 2024 \nand 2025. \n \nTable 10: Quarterly Gold Deliveries to FGR \nfor 2024 and 2025 (kg) \n \nQ1 24 \nQ4 24 \nQ1 25 \nPrimary \nproducers/kg \n3,143.07 \n3,185.5 \n2,725.6 \nSmall \nScale \nproducers/kg \n2,901.80 \n9,028.5 \n5,770.9 \nTotal \n6,044.87 \n12,214.0 \n8,496.4 \nSource: FGR, 2025 \nIn terms of shares of deliveries, small scale \nproducers accounted for 68% whilst primary \nproducers accounted for 32% during the quarter \nunder review. \n14 \n \n \n \n \nPlatinum Group of Metals (PGMs) \nThe softening of PGMs commodity prices, which \npersisted through all the quarters of 2024 and in \nthe first quarter of 2025, platinum and palladium \noutput retreated by 7% and 6%, respectively in the \nfirst quarter of 2025 when compared to fourth \nquarter of 2024. Similarly, output in first quarter \n2025 was 16% and 17%, down, respectively, \nwhen compared to similar output in the first \nquarter of 2024. \n \nFigure 12: Quarterly Trends in Platinum and \nPalladium Output (kg) \n \n \nSource: Ministry of Mines and Mining Development, \n2025 \nRhodium output amounted to 394.15 kg in the \nfirst quarter of 2025 compared to 424.3 kg in \nfourth quarter of 2024, reflecting the softening of \ninternational commodity prices. This output is \nalso 10% lower than output in the comparable \nperiod in 2024. \n \n \nFigure 13: Quarterly Trends in Rhodium \nOutput (kg) \nSource: Ministry of Mines and Mining Development, \n2025 \n \nNickel \nNickel output at 3,097.46 tonnes in the first \nquarter of 2025, is 10% lower than 3,447.5.1 \ntonnes registered in the last quarter of 2024. The \nNickel output for the first quarter is also 23% \nlower than comparable period of 2024, as shown \nin Figure 14. \n \nFigure 14: Quarterly Trends in Nickel Output \n(mt) \n \nSource: Ministry of Mines and Mining Development, \n2025 \n0\n1000\n2000\n3000\n4000\n5000\n6000\nQ4\n21\nQ1\n22\nQ2\n22\nQ3\n22\nQ4\n22\nQ1\n23\nQ2\n23\nQ3\n23\nQ4\n23\nQ1\n24\nQ2\n24\nQ3\n24\nQ4\n24\nQ1\n25\nPlatinum\nPalladium\n0\n100\n200\n300\n400\n500\nQ1\n22\nQ2\n22\nQ3\n22\nQ4\n22\nQ1\n23\nQ2\n23\nQ3\n23\nQ4\n23\nQ1\n24\nQ2\n24\nQ3\n24\nQ4\n24\nQ1\n25\n0\n1000\n2000\n3000\n4000\n5000\n6000\nQ4\n21\nQ1\n22\nQ2\n22\nQ3\n22\nQ4\n22\nQ1\n23\nQ2\n23\nQ3\n23\nQ4\n23\nQ1\n24\nQ2\n24\nQ3\n24\nQ4\n24\nQ1\n25\n15 \n \n \n \n \nThe bulk of the nickel produced in the quarter \nunder review was from PGMs production \nreflecting the closure of the country’s largest \nnickel producer Bindura Nickel Corporation. \nDiamond \nDiamond output stood at 0.783 million carats in \nq1 2025, about 45% down from 1.422 million \ncarats produced in the fourth quarter of 2024. \nOutput in the first quarter of 2025 was also 45% \nlower than 1.417 million carats produced in the \ncorresponding quarter in 2024, as shown in Figure \n15. \n \nFigure 15: Quarterly Trends in Diamond \nOutput (carats) \n \nSource: Ministry of Mines and Mining Development, \n2025 \n \nDiamond benefitted from increased investments \nin mining and processing capacity. Diamond \npotential, however, continues to be adversely \naffected by frequent power outages leading to loss \nof production time at some of the mining houses. \n \n \nChrome \nChrome ore output in the first quarter of 2025 \namounted to 495,097.80 tonnes, which is 3.5% \nlower than 512,410.21 tonnes produced in the last \nquarter of 2024. The first quarter output of 2025 \nsurpassed output produced in the comparable \nperiod in 2024. The surge in production of chrome \nore was largely driven by increase in demand of \nthe mineral in China, the largest consumer. \nFigure 16 shows quarterly trends in chrome ore \nOutput. \n \nFigure 16: Quarterly Trends in Chrome Ore \nOutput (Tonnes) \nSource: Ministry of Mines and Mining Development, \nMMCZ, 2025 \nCoal \nCoal output recorded a marginal decline of 2% \nfrom 1,731,331 tonnes produced in the last quarter \nof 2024 to 1,688,429 tonnes produced in the first \nquarter of 2025. There was, however, 61% \nincrease in coal output during the first quarter of \n2025 when compared to first quarter of 2024. \n0\n200\n400\n600\n800\n1000\n1200\n1400\n1600\n1800\nQ4\n21\nQ1\n22\nQ2\n22\nQ3\n24\nQ4\n22\nQ1\n23\nQ2\n23\nQ3\n23\nQ4\n23\nQ1\n24\nQ2\n24\nQ3\n24\nQ4\n24\nQ1\n25\nThousands\n -\n 100\n 200\n 300\n 400\n 500\n 600\n 700\nQ1\n22\nQ2\n22\nQ3\n22\nQ4\n22\nQ1\n23\nQ2\n23\nQ3\n23\nQ4\n23\nQ1\n24\nQ2\n24\nQ3\n24\nQ4\n24\nQ1\n25\nThousands\n16 \n \n \n \n \nQuarterly coal output from 2021 to 2025 is shown \nin Figure 17. \n \nFigure 17: Quarterly trends in coal output \n \n \nSource: Ministry of Mines and Mining Development, \n2025 \nLithium \nLithium output stood at about 358,468.01 tonnes \nin the first quarter of 2025, compared to 338,038 \ntonnes produced in the fourth quarter of 2024. The \nfirst quarter 2025 output was, however, 60% \nlower than 902,898.60 tonnes produced in similar \nquarter in 2024 largely driven by softer prices. \n \nFigure 18: Lithium production 2024 and 2024 \n \nSource: Ministry of Mines and Mining Development, \n2025 \nELECTRICITY \nTotal electricity generated by major power \nstations and independent power producers (IPPs) \nduring the first quarter of 2025 amounted to \n2,314.41 GWh, up by 5.56%, from the fourth \nquarter output of 2,314.41 GWh. This was also \n8.19% higher than the 2,258.10 GWh produced \nduring the first quarter of 2024. \n \nHwange, inclusive of units 7 and 8 contributed \n69.77% of total production during the first quarter \nof 2025, covering up for the low output from \nKariba. Kariba Hydro Power Station produced \n587.29 GWh, slightly higher than 516.6 GWh \nproduced in the fourth quarter of 2024. In total, \nKariba contributed about 24.04% of total \nelectricity generation in the first quarter of 2025, \nup from the 20.06% in the fourth quarter of 2024. \n \nTable 11 shows power output statistics from the \nmajor power stations and independent power \nproducers in 2025. \n \nTable 11: Quarterly Power Output. \nQ1: \n2024 \nQ4: \n2024 \nQ1: \n2025 \nKariba \n446.3 \n516.6 \n587.29 \nHwange \n402.9 \n694.0 \n676.94 \nHesco (Hwange \n7&8) \n1,300.4 \n986.9 \n1 027.68 \nIPPs \n108.6 \n116.9 \n151.24 \nTotal (GWh) \n2,258.1 \n2,314.4 \n2 443.14 \nSource: ZERA and ZPC, 2025 \n \n \n0\n200000\n400000\n600000\n800000\n1000000\n1200000\n1400000\n1600000\n1800000\n2000000\nQ1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25\n -\n 200,000\n 400,000\n 600,000\n 800,000\n 1,000,000\nQ1 24\nQ2 24\nQ3 24\nQ4 24\nQ1 25\n17 \n \n \n \n \nThe improved performance by IPPs in the first \nquarter of 2025 is attributed to the additional \n10.49 GWh produced by Great Zimbabwe hydro \npower station, which benefited from improved \ninflows in the first quarter. \nFigure 19 shows the trend of quarterly electricity \nproduction by IPPs since the first quarter of 2024. \n \nFigure 19: Quarterly Power Output by IPPs \n \nSource: ZERA, 2025 \n \nINFLATION DEVELOPMENTS \nDuring the first quarter of 2025, there was general \nstability in inflation largely on account of \nmonetary \nand \nfinancial \nconditions, \nnotwithstanding a transient shock in January \n2025. \nZiG Month on Month Inflation \nMonthly ZiG inflation decelerated by 3.7 \npercentage points from 3.7% in December 2024 \nto -0.1% in March 2025, driven by both food and \nnon-food inflation. \n \nFood inflation retreated by 5.0 percentage points \nfrom 4.6% in fourth quarter of 2024, to -0.5% in \nfirst quarter of 2025. Food inflation contributed \n-0.2 percentage points to the March 2025 \ninflation rate. \nNon-food inflation also slowed down from 3.2% \nin December 2024, to 0.2% in March 2025. \nHousing, alcoholic beverages and tobacco and \neducation largely drove non-food inflation during \nthe quarter. \n \nTable 12: Monthly Inflation Profiles (%) \n \nZiG \nUS$ \nWeighted \nJan - 2025 \n10.5 \n0.6 \n1.1 \nFeb – 2025 \n0.5 \n0.2 \n0.3 \nMar- 2025 \n-0.1 \n0.1 \n0.0 \nSource: ZIMSTAT, 2025 \nUS$ Month on Month Inflation \nThe US$ month-on-month inflation rate receded \nfrom the 0.6% recorded in December 2024 to \n0.1% in March 2025. The decrease in inflation is \npartially attributed to the subdued aggregate \ndemand which dampened inflationary pressures \nduring the quarter. \nMonthly food inflation decreased from 1.9% in \nthe previous quarter to 0.2% during the first \nquarter of 2025. Non-food inflation marginally \nincreased by 0.02 percentage points from 0.05% \nin the fourth quarter of 2024 to 0.07% in the same \nquarter under review. \nFigure 20 shows the US$ monthly inflation \nprofile. \n0\n20\n40\n60\n80\n100\n120\n140\n160\n2023\nQ1\n2023\nQ2\n2023\nQ3\n2023\nQ4\n2024\nQ1\n2024\nQ2\n2024\nQ3\n2024\nQ4\n2025\nQ1\nGWhs\n18 \n \n \n \n \nFigure 20: Monthly US$ Inflation Profile (%) \nSource: ZIMSTAT, 2025 \nAnnual US$ Inflation \nAnnual US$ inflation surged by 12.53 percentage \npoints, from 2.48% in December 2024 to 15.01% \nat the end of the first quarter of 2025 on account \nof both non-food and food inflation. \nAnnual food inflation accelerated from 5.2% in \nthe fourth quarter of 2024, to 22.4% in the first \nquarter of 2025, while non-food inflation edged \nup from 1.3% to 11.7% during the same period. \nFigure 21 shows annual US$ inflation profile. \n \n \n \n \n \n \nFigure 21: Annual US$ Inflation Profile (%) \n \nSource: ZIMSTAT, 2025 \n \n4. \nMONETARY DEVELOPMENTS \nBroad money stock (M3) stood at ZiG91.53 \nbillion in March 2025, reflecting a quarter-on-\nquarter growth of 4.67% from ZiG87.45 billion \nrecorded in December 2024. Growth in broad \nmoney reflected expansions of ZiG2.62 billion \n(3.60%) and ZiG1.46 billion (9.97%) in foreign \ncurrency and local currency components of broad \nmoney, respectively. The growth of 4.67% was \n11.92 percentage points lower than the 16.62% \nrecorded in the fourth quarter of 2024. \n \nThe broad money stock was largely made up of \nforeign currency deposits, which accounted for \n82.40%; \nlocal \ncurrency \ndeposits, \nwhich \naccounted for 17.48%; and currency in \ncirculation, which constituted a balance of \n0.12%. \n \nFigure 22 shows the components of broad money \nfor the period March 2024 to March 2025. \n \n \n \n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n20\nDec-23\nMar-24\nJun-24\nSep-24\nDec-24\nMar-25\nFood\nNon food\nAll Items\n-10\n-5\n0\n5\n10\n15\n20\n25\nDec-23\nMar-24\nJun-24\nSep-24\nDec-24\nMar-25\nFood\nNon food\nAll Items\n19 \n \n \n \n \nFigure 22: Broad Money Developments (ZiG \nbillion) \nSource: Reserve Bank of Zimbabwe, 2025 \n \nDomestic Credit \nDomestic credit increased by 8.95%, from \nZiG108.92 billion in December 2024, to \nZiG118.66 billion in March 2025. The growth \nwas largely driven by expansions in credit to the \nprivate sector, and net claims on the Government \nof ZiG3.79 billion and ZiG569.53 million, \nrespectively. \n \nOutstanding credit to the private sector was \nmainly channelled to households, agriculture, \nmanufacturing, services and mining, which \nreceived 28.44%, 17.15%, 13.47%, 10.84% and \n9.01% of the total credit, respectively. Private \nsector credit shares for the rest of the economic \nsectors are shown in Figure 23. \n \n \n \n \n \nFigure 23: Distribution of Private Sector \nCredit \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nCredit to the private sector was largely utilized for \nrecurrent expenditures, 39.70%; inventory build-\nup, 22.79%; and fixed capital investments, \n13.35%. \n \nInterest Rates \nDuring March 2025, nominal lending rates quoted \nby banks on local currency-denominated loans \nranged between 20% and 58%. Time deposit rates \nfor 90-day, 360-day, and over a year tenure ranged \nbetween 5% and 25%. The savings rates were \nquoted between 2% and 9%, during the period \nunder review. \n \nFigure 24 shows the profile of the benchmark \ninterest rate and market rates. \n \n0\n20\n40\n60\n80\n100\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nBillion\nCurrency in Circulation\nForeign Currency Deposits\nLocal Currency Deposits\nHouseholds\n28.44%\nAgriculture\n17.15%\nMining\n9.01%\nManufacturing\n13.47%\nDistribution\n10.38%\nTransport and \nCommunication\n2.36%\nServices\n10.84%\nFinancial Organisations \nand Investiments\n5.13%\nConstruction\n2.56% Other…\n20 \n \n \n \n \nFigure 24: Interest Rates Developments (%) \nSource: Reserve Bank of Zimbabwe, 2025 \nLending rates for foreign currency-denominated \nloans advanced to individuals ranged between \n7.00% and 27.00% per annum, as of the end of \nMarch 2025. Foreign currency lending interest \nrates for corporate clients ranged from a minimum \nof 5.00% to a maximum of 21.00%. \n \n \n5. \nSTOCK MARKET DEVELOPMENTS \n \nZIMBABWE STOCK EXCHANGE (ZSE) \nDEVELOPMENTS \n \nDuring the first quarter of 2025, trading on the \nZSE followed a negative trajectory, resulting in \nmajor indices registering losses. As such, the All \nShare, Top 10, and Top 15 indices declined by \n5.67%, 7.30% and 3.70% to close at 205.25 \npoints, 199.52 points and 204.67 points, \nrespectively. \n \n \nTable 13: Key Stock Market Indicators \n \nZSE Indicators \n31 \nDecember\n-24 \n31 March-\n25 \n \nChange \n(%) \nAll Share Index (points) \n217.58 \n205.25 \n-5.67 \nTop 10 Index (points) \n215.24 \n199.52 \n-7.30 \nTop 15 Index (points) \n212.54 \n204.67 \n-3.70 \nMedium Cap Index (points) \n227.60 \n250.55 \n10.09 \nSmall Cap Index (points) \n100.11 \n100.11 \n0.00 \nMining Index (points) \n235.38 \n180.43 \n-23.35 \nThe volume of shares traded \n(mn) \n333.48 \n477.87 \n43.30 \nMarket Turnover (ZiG mn) \n1 018.09 \n933.04 \n-8.35 \nZSE Capitalization (ZiG mn) \n66 241.20 \n62 916.75 \n-5.02 \nNet Foreign Position (ZiG mn) \n-144.99 \n-13.97 \n-90.36 \n \nVFEX Indicators \n \n \n \nAll Share Index (points) \n105.95 \n110.32 \n4.12 \nThe volume of shares traded \n(mn) \n97.55 \n1 207.03 \n1 137.29 \nMarket Turnover (US mn) \n26.91 \n58.91 \n117.45 \nVFEX Capitalization (US$m) \n1 279.62 \n1 287.08 \n0.58 \nSource: Zimbabwe Stock Exchange, 2025; and \nVictoria Falls Stock Exchange, 2025 \n \nThe resource index lost 23.35% to close at 180.43 \npoints during the same period. \n \nFigure 25 shows the developments of the ZSE All \nShare, Top 10 and Mining indices for the period 5 \nApril 2024 through to 31 March 2025. \n \n \n \n \n \n0\n20\n40\n60\n80\n100\n120\n140\n160\n180\nPolicy rate\nMax Weighted Lending Rates Individuals\nMax Weighted Lending Rates Corporates\n21 \n \n \n \n \nFigure 25: ZSE All Share, Top 10 and Mining \nIndices \n \n \nSource: Zimbabwe Stock Exchange, 2025 \nMarket Turnover \nDuring the first quarter of 2025, cumulative \nvolumes of shares traded increased by 43.30% to \n477.87 million, while the value of shares declined \nby 8.35% to ZiG933.04 million. This compares to \n333.48 million shares and ZiG1 018.09 million \nrecorded in the fourth quarter of 2024, \nrespectively. \n \n \n \n \n \n \n \n \nFigure 26: ZSE Market Turnover \n \nSource: Zimbabwe Stock Exchange, 2025 \nForeign investor participation, as measured by the \ncontribution to the value of shares traded, declined \nto 15.30%, compared to 8.83% recorded in the \nfourth quarter of 2024. Concomitantly, net foreign \nposition improved to negative ZiG13.97 million, \nfrom negative ZiG144.99 million registered \nduring the quarter ending December 2024. \n \nMarket Capitalisation \nSubdued trading activity on the ZSE during the \nfirst quarter of 2025, resulted in the local bourse \nshedding 5.02%, or ZiG3 324.45 billion worth of \ncapitalisation to close at ZiG62.92 billion, \ncompared to ZiG66.24 billion recorded in the \nprevious quarter. \nFigure 27 shows the evolution of market \ncapitalization for the period December 2023 to \nMarch 2025. \n \n50\n100\n150\n200\n250\n300\n350\n50\n100\n150\n200\n250\n300\n350\nTop 10 Index\nMining Index (Points)\nZSE ALL SHARE INDEX\n0\n50\n100\n150\n200\n250\n300\n350\n400\n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\n550\nVolumes Traded (millions)\nValues Traded (millions)\n22 \n \n \n \n \nFigure 27: ZSE Market Capitalisation (ZiG \nmillions) \n \nSource: Zimbabwe Stock Exchange, 2025 \nVICTORIA FALLS STOCK EXCHANGE \n(VFEX) DEVELOPMENTS \nThe VFEX exhibited bullish sentiments during \nthe first quarter of 2025. As a result, the VFEX All \nShare index added 4.12% to close at 110.32 \npoints, from 105.95 points recorded in the quarter \nending December 2024. \nOn an annual basis, the VFEX All Share index \nadded 9.16%, from 101.06 points recorded in \nMarch 2024. \n \n \n \n \n \n \n \n \n \n \n \n \nFigure 28: Victoria Falls Stock Exchange All \nShare Index \nSource: Victoria Falls Stock Exchange, 2025 \nVFEX Market Capitalization (US$ billions) \nDuring the first quarter of 2025, VFEX market \ncapitalisation gained 0.58%, or US$7.46 million, \nto close at US$1.29 billion, compared to US$1.28 \nbillion recorded in the last quarter of 2024. On an \nannual \nbasis, VFEX market \ncapitalisation \nincreased by 5%, from US$1.22 billion recorded \nin the comparable period in 2024. \n \nFigure 29 VFEX Market Capitalization in \nbillions of US$ \n \nSource: Victoria Falls Stock Exchange, 2025 \n0.00\n0.01\n0.02\n0.03\n0.04\n0.05\n0.06\n0.07\n0.08\n0.09\n0.10\nMILLIONS\n0.00\n20.00\n40.00\n60.00\n80.00\n100.00\n120.00\n140.00\n160.00\n31-Mar-24\n30-Apr-24\n31-May-24\n30-Jun-24\n31-Jul-24\n31-Aug-24\n30-Sep-24\n31-Oct-24\n30-Nov-24\n31-Dec-24\n31-Jan-25\n28-Feb-25\n31-Mar-25\n0.00\n0.20\n0.40\n0.60\n0.80\n1.00\n1.20\n1.40\n1.60\n1.80\n31-Mar-24\n30-Apr-24\n31-May-24\n30-Jun-24\n31-Jul-24\n31-Aug-24\n30-Sep-24\n31-Oct-24\n30-Nov-24\n31-Dec-24\n31-Jan-25\n28-Feb-25\n31-Mar-25\n23 \n \n \n \n \n6. \nPAYMENT, \nCLEARING \nAND \nSETTLEMENT ACTIVITIES \nThe value of electronic transactions processed \nthrough \nthe \nnational \npayment \nsystems \ninfrastructure \ndecreased \nby \n8.66% \nfrom \nZiG583.14 billion in the fourth quarter of 2024 to \nZiG532.61 billion during the first quarter of 2025. \nTransactions volumes also decreased by 7.54% to \n174.41 million from 188.64 million, during the \nsame period. \n \nTable \n14: \nConsolidated \nTransactional \nActivities for the First Quarter 20251 \nPAYMENT \nSTREAM \nFOURTH \nQUARTER \nENDING 31 \nDECEMBER \n2024 \nFIRST \nQUARTER \nENDING 31 \nMARCH \n2025 \nCHANGE \nFROM \nLAST \nQUARTER \nPROPORTION \n \nVALUES IN ZIG (BILLIONS) \n \nRTGS \n340.49 \n310.19 \n-8.90% \n58.24% \nPOS \n21.93 \n20.00 \n-8.80% \n3.75% \nATMS \n22.44 \n20.56 \n-8.37% \n3.86% \nMOBILE \n48.80 \n45.94 \n-5.84% \n8.63% \nINTERNET \n149.47 \n135.91 \n-9.07% \n25.52% \nTOTAL \n583.14 \n532.61 \n-8.66% \n100.00% \n \nVOLUMES (MILLIONS) \n \nRTGS \n2.82 \n2.57 \n-8.64% \n1.47% \nPOS \n23.37 \n20.39 \n-12.78% \n11.69% \nATMs \n2.80 \n2.70 \n-3.58% \n1.55% \nMOBILE \n155.30 \n144.79 \n-6.77% \n83.02% \nINTERNET \n4.35 \n3.96 \n-8.92% \n2.27% \nTOTAL \n188.64 \n174.41 \n-7.54% \n100.00% \nSource: Reserve Bank of Zimbabwe, 2025 \nThe aggregate value of US$ transactions \nprocessed through the RTGS system recorded a \ndecline of 9.80% to $7.74 billion while volumes \n \n1 Figures are inclusive of USD Transactions converted at \nprevailing interbank exchange rates to ZiG at the \ntransaction date. \ndeclined by 2.31 % to 1.46 million during quarter \nending 31 March 2025. \n \nLARGE VALUE PAYMENTS \nDuring the first quarter of 2025, the value of \ntransactions processed through the RTGS system \ndecreased by 8.9% from ZiG340.50 billion in the \nfourth quarter 2024 to ZiG310.19 billion. The \nvolume of transactions decreased by 8.64% to \n2.57 million over the same period. \n \nFigure 30: Values (ZiG) and Volumes of \nRTGS2 Transactions from Q2 2024 to Q1 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n2 Real Time Gross Settlement System (RTGS) is the \nZimbabwe Electronic Transfer and Settlement System \n(ZETSS) \n \n2\n3\n4\n0\n50\n100\n150\n200\n250\n300\n350\n400\n2024 Q2 2024 Q3 2024 Q4 2025 Q1\nBillions\nMillions\nValues\nVolumes [RHS]\n24 \n \n \n \n \nRETAIL PAYMENTS \nThe aggregate values for retail transactions \ndecreased by 8.33% from ZiG242.64 billion \nrecorded in fourth quarter 2024 to ZiG222.42 \nbillion in first quarter of 2025. \n \nFigure 31: Retail Transaction Values (ZiG) \nfrom Q2 2024 to Q1 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \nThe aggregate retail volume also decreased by \n7.53% to 171.84 million during the same period. \n \nFigure 32: Retail Transaction Volumes from \nQ2 2024 to Q1 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \nCOLLATERAL \nThe value of collateral for Zimswitch, Central \nSecurities Depository (CSD) and Zimbabwe \nStock Exchange (ZSE) settlement systems \nincreased to ZiG571.83 million in the first quarter \nof 2025, up from ZiG562.03 million recorded in \nthe previous quarter. \nThis largely reflects an increase in the value of \ntransactions processed through the Zimswitch \nplatform resulting in the Zimswitch Collateral \nbalances rising by 2%. \n \nFigure 33: Collateral Amounts (ZiG) from Q2 \n2024 to Q1 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nThe Victoria Falls Stock Exchange Limited \n(VFEX) foreign currency collateral for the quarter \nending 31 March 2025 was US$47, 766.28 and is \nconsidered adequate to cover the risk levels. \n \n \n0\n10\n20\n30\n40\n50\n60\n0\n50\n100\n150\n200\n2024 Q2 2024 Q3 2024 Q4 2025 Q1\nMobile in Billions\nOther Retail Values in Billions\nPOS\nATMS\nINTERNET\nMOBILE\n0\n20\n40\n60\n80\n100\n120\n140\n160\n180\n0\n5\n10\n15\n20\n25\n30\n2024 Q2\n2024Q3\n2024Q4\n2025Q1\nMobile Volumes in Millions\nOther Retai Volumes in \nMillions\nPOS\nATMs\nINTERNET\nMOBILE\n0\n100\n200\n300\n400\n500\n600\nQuarter\nEnding 30\nJune 2024\nQuarter\nEnding 30\nSeptember\n2024\nQuarter\nEnding 31\nDecember\n2024\nQuarter\nEnding 31\nMarch 2025\nMILLIONS\nZSE\nZimswitch\nCDC\n25 \n \n \n \n \nACCESS POINTS AND DEVICES \nThe POS population which stood at 135,520 at the \nend of the fourth quarter 2024 decreased to \n129,081 during the first quarter of 2025. \n \nTable 15: Payment Systems Access Points and \nDevices for the First Quarter of 2025 \nPAYMENT SYSTEMS ACCESS POINTS \n \nQ2 2024 \nQ3 2024 \nQ4 2024 \nQ1 2025 \nMobile \nBanking \nMerchants \n55,139 \n55,415 \n55,692 \n55,971 \nATMs \n401 \n402 \n409 \n432 \nPOS \n133,961 \n135,614 \n135,520 \n129,081 \nPAYMENTS SYSTEMS ACCESS DEVICES \nDebit Cards \n5,766,583 \n5,872,074 \n5,862,696 \n5,622,600 \nCredit Cards \n18,927 \n19,540 \n20,054 \n19,925 \nPrepaid Cards \n140,228 \n143,598 \n142,398 \n151,140 \nMobile \nBanking \nSubscribers \n9,530,064 \n9,955,399 \n10,004,588 \n10,099,040 \nInternet \nBanking \nSubscribers \n538,113 \n554,563 \n549,802 \n551,716 \nSource: Reserve Bank of Zimbabwe, 2025 \nAs of 31 March 2025, active mobile financial \nservices subscribers slightly rose to 10.1 million \nfrom 10 million recorded in the quarter ending 31 \nDecember 2024. \n \n7. \nFISCAL DEVELOPMENTS \nCumulative revenues in the first quarter of 2025 \nstood at ZiG46.72 billion, against expenditures of \nZiG45.16 billion, resulting in a fiscal surplus of \nZiG1.56 billion. \nTable 16 shows the summary of fiscal \ndevelopments during the first quarter of 2025. \nTable 16: Summary of first Quarter 2025 \nFiscal Position \n \nZiG millions \nRevenue \n46 719.50 \nTax revenue \n44 785.70 \nNon-Tax Revenue \n1 933.80 \nExpenditure \n45 155.95 \nCurrent expenditure \n34 039.07 \n o/w employment costs \n14 719.20 \nCapital Expenditure \n11 116.88 \nOverall Balance \n1 563.55 \nSource: Ministry of Finance, Economic Development, and \nInvestment Promotion, 2025 \nGovernment Revenue \nDuring the first quarter of 2025, Government \nrevenue stood at ZiG46.72 billion. Taxes on \nincome and profits contributed (31.2%), value \nadded tax (27.9%), excise duties (10.1%) the \nlargest portion of government revenue, as shown \nin Figure 34. \n \n \n \n \n \n \n26 \n \n \n \n \nFigure 34: Government Revenue Structure: \nFirst quarter 2025 \nSource: Ministry of Finance, Economic Development \nand Investment Promotion, 2025 \nGovernment Expenditure \nCumulative government spending in the first \nquarter of 2025 amounted to ZWG45.16 billion, \ncomprising of current expenditure ZWG34.04 \nbillion and \nZWG11.12 \nbillion \ncapital \nexpenditures. Table 17 shows a summary of \nGovernment expenditure in the fourth quarter of \n2024 and the first quarter of 2025. \n \n \n \n \n \nTable 17: Summarised Government Spending \n(ZiG milions) \n \nQ4 2024 \nQ1 2025 \nTotal Expenditure \n47 314.85 \n45 155.95 \nCurrent Expenditure \n36 333.08 \n34 039.07 \nOf which Employment \nCosts \n19 669.19 \n14 791.20 \nCapital Expenditure \n10 981.77 \n11 116.88 \nSource: Ministry of Finance, Economic Development, \nand Investment Promotion. 2025 \nGovernment \ncapital \nexpenditure \nstood \nat \nZiG11.12 billion, accounting for 24.62% of total \nspending during the quarter under review. Capital \nexpenditure was largely driven by significant \nincreases in building and structures, machinery \nand equipment and capital grants. \nFigure 35: Government Expenditure, First \nQuarter 2025 \n \n \n \n \n0\n2,000\n4,000\n6,000\n8,000\n10,000\n12,000\n14,000\n16,000\nOperations and \nMaintenance\n39.0%\nTransfers to \nProvincial \nCouncils and \nLocal \nAuthorities\n0.3%\nEmployment \nCosts\n32.8%\nInterest on debt\n3.4%\nCapital \nExpenditure\n24.6%\n27 \n \n \n \n \nOverall Budget Balance \nThe fiscal developments in the first quarter of \n2025 resulted in government revenue of \nZiG46.72 billion, against total expenditure of \nZiG45.16 billion, which culminated into a budget \nsurplus of ZiG1.56 billion. Figure 36 shows the \nquarterly developments in overall budget balance \nin 2024 and 2025. \nFigure 36: Budget balance (ZWG billion) \n \n \n \n \nRESERVE BANK OF ZIMBABWE \nJUNE 2025 \n \n (2,000)\n 8,000\n 18,000\n 28,000\n 38,000\n 48,000\n 58,000\nRevenue\nExpenditure\nOverall\nBalance\nZWG BILLIONS\nQ4 2024\nQ1 2025\n \n \n28 \n \nSTATISTICAL TABLES \n1. Depository Corporation Survey 29 \n2. Central Bank Survey 30 \n3. Other Depository Corporation Survey 31 \n \n4. Liabilities and Assets of the Central Bank \n4.1.Reserve Bank: Assets \n \n \n \n 32 \n \n4.2.Reserve Bank: liabilities 33 \n \n \n \n \n \n \n \n \n \n5. Other Depository Corporation \n5.1.Other Depository Asset 34 \n5.2.Other Depository Liabilities 35 \n \n6. Commercial Banks \n6.1.Commercial Banks: Assets \n \n 36 \n6.2.Commercial Banks: Liabilities \n 37 \n7. Building Societies \n \n \n \n \n \n \n7.1.Building Societies: Assets \n \n 38 \n \n7.2.Building Societies: Liabilities 39 \n \n \n8. Sectoral Analysis of Commercial Banks \n8.1.Sectoral Analysis of Commercial Banks’ Loans and Advances 40 \n8.2.Sectoral Analysis of Commercial Bank’s Deposits \n \n 41 \n \n \n \n \n \n \n \n \n9. National Payment Systems \n \n \n9.1.Values of Transactions \n \n \n \n \n \n \n \n42 \n9.2.Volumes of Transactions \n \n \n \n \n \n \n42 \n \n10. Interest Rates, Security Yields and Prices \n10.1. Lending Rates \n \n \n \n \n \n \n \n43 \n10.2. Deposit Rates 43 \n \n \n \n \n \n \n \n \n11. Stock Exchange Indices \n \n \n \n \n \n \n \n44 \n \n12. Inflation \n \n \n \n \n \n \n12.1. Monthly Inflation \n \n \n \n \n \n \n \n45 \n12.2. Quarterly Inflation \n \n \n \n \n \n \n \n46 \n12.3. Annual Inflation \n \n \n \n \n \n \n \n47 \n \n13. Balance of Payments \n13.1. Cross Border Payments \n \n \n \n \n \n \n48 \n13.2. Cross Border Receipts \n \n \n \n \n \n \n49\n29 \n \n \nMar-24\n*Apr-24\n*May-24\n*Jun-24\n*Jul-24\n*Aug-24\n*Sep-24\n*Oct-24\n*Nov-24\n*Dec-24\n*Jan-25\n*Feb-25\n*Mar-25\nNet Foreign Assets\n-66,258,169,977.30\n-28,856,803.24\n-27,777,119.25\n-27,862,614.43\n-27,003,213.00\n-27,816,061.99\n-51,275,161.53\n-54,528,328.78\n-48,383,455.25\n-47,290,393.03\n-49,520,833.39\n-50,100,966.34\n-46,693,765.90\nCentral Bank(net)\n-77,865,030,279.36\n-35,698,765.79 -34,641,175.73 -34,723,910.35\n-34,509,441.34\n-34,520,053.81\n-62,586,924.75\n-66,392,291.76\n-57,686,803.02\n-56,911,905.66\n-58,197,285.15\n-60,030,706.89\n-55,922,579.95\nForeign Assets\n12,179,330,672.54\n9,276,276.05\n9,502,376.00\n10,293,011.52\n10,301,545.49\n10,342,781.57\n17,610,056.98\n24,512,816.63\n22,229,005.79\n23,239,748.84\n23,967,010.24\n23,087,880.76\n28,287,077.32\nForeign Liabilities\n90,044,360,951.90\n44,975,041.84\n44,143,551.73\n45,016,921.88\n44,810,986.83\n44,862,835.37\n80,196,981.74\n90,905,108.39\n79,915,808.81\n80,151,654.50\n82,164,295.39\n83,118,587.65\n84,209,657.27\nOther Depository Corporations(net)\n11,606,860,302.06\n6,841,962.55\n6,864,056.48\n6,861,295.92\n7,506,228.34\n6,703,991.82\n11,311,763.23\n11,863,962.98\n9,303,347.77\n9,621,512.62\n8,676,451.76\n9,929,740.55\n9,228,814.05\nForeign Assets\n18,155,224,099.23\n10,973,836.76\n11,293,656.76\n11,679,328.24\n12,352,811.95\n11,598,442.41\n20,019,415.47\n21,861,671.92\n17,752,438.09\n19,141,214.17\n19,229,144.68\n20,477,933.09\n22,371,396.07\nForeign Liabilities\n6,548,363,797.17\n4,131,874.21\n4,429,600.28\n4,818,032.32\n4,846,583.61\n4,894,450.59\n8,707,652.25\n9,997,708.95\n8,449,090.32\n9,519,701.55\n10,552,692.92\n10,548,192.54\n13,142,582.02\n0.00\n0.00\nNet Domestic Assets (NDA)\n125,429,655,454.08\n67,611,589.07\n68,804,734.10\n70,589,087.12\n72,978,846.45\n74,289,272.26\n126,283,122.13\n141,729,288.02\n131,610,282.91\n134,739,349.70\n136,641,585.11\n135,736,114.14\n138,224,651.73\nDomestic Claims\n58,052,804,317.53\n35,515,681.43\n37,674,708.61\n38,036,916.97\n42,001,791.24\n42,153,476.29\n70,625,380.29\n81,454,801.51\n71,829,332.29\n74,542,582.32\n111,239,077.46\n113,660,925.87\n118,662,382.74\nClaims on Central Government(net)\n16,182,769,560.45\n10,221,096.31\n11,278,377.99\n9,913,456.25\n11,854,120.02\n11,078,263.39\n17,989,094.06\n20,769,283.76\n16,133,123.06\n17,318,818.37\n52,732,571.12\n53,954,319.00\n56,814,233.72\nClaims on Central Government\n22,087,558,829.62\n12,982,655.95\n13,103,692.41\n13,760,570.59\n15,106,767.97\n14,775,338.23\n24,507,323.63\n29,236,123.02\n26,140,999.60\n27,626,806.80\n62,771,671.49\n59,447,930.28\n62,569,559.77\nCentral Bank\n13,434,742,848.85\n7,155,621.00\n7,206,353.91\n7,425,969.04\n7,375,080.86\n7,694,199.15\n13,333,000.40\n16,905,321.56\n15,342,327.17\n15,948,975.81\n51,342,654.13\n48,573,045.84\n50,689,516.96\nODCs\n8,652,815,980.77\n5,827,034.95\n5,897,338.50\n6,334,601.55\n7,731,687.11\n7,081,139.08\n11,174,323.23\n12,330,801.46\n10,798,672.42\n11,677,830.99\n11,429,017.37\n10,874,884.43\n11,880,042.80\nLess Liabilities to Central Government\n5,904,789,269.17\n2,761,559.64\n1,825,314.42\n3,847,114.34\n3,252,647.95\n3,697,074.84\n6,518,229.58\n8,466,839.25\n10,007,876.54\n10,307,988.43\n10,039,100.37\n5,493,611.27\n5,755,326.05\nCentral Bank\n5,389,222,254.62\n2,518,704.99\n1,475,345.63\n3,257,853.82\n2,814,036.97\n3,164,138.12\n5,934,952.70\n7,839,372.76\n9,330,641.14\n9,591,566.38\n9,335,097.88\n4,557,218.50\n4,850,146.25\nODCs\n515,567,014.55\n242,854.65\n349,968.79\n589,260.52\n438,610.98\n532,936.72\n583,276.88\n627,466.49\n677,235.40\n716,422.05\n704,002.49\n936,392.77\n905,179.80\nClaims on Other Sectors\n41,870,034,757.08\n25,294,585.12\n26,396,330.62\n28,123,460.72\n30,147,671.23\n31,075,212.90\n52,636,286.23\n60,685,517.75\n55,696,209.23\n57,223,763.95\n58,506,506.34\n59,706,606.86\n61,848,149.02\nOther Financial Corporations\n803,485,078.36\n327,451.01\n405,012.85\n484,721.72\n451,511.50\n481,730.31\n837,142.95\n903,005.44\n801,444.65\n829,886.26\n809,796.33\n1,025,413.81\n1,122,933.49\nState and Local Government\n143,347.81\n1,803.44\n1,371.69\n1,489.84\n162.58\n189.44\n334.82\n83.40\n98.73\n574.72\n10,044.30\n18,890.21\n21,808.52\nPublic Non Financial Corporations\n1,615,646,416.58\n983,290.25\n966,293.32\n926,934.51\n906,717.79\n827,622.11\n1,344,304.21\n1,532,030.41\n1,264,192.72\n914,333.23\n944,926.32\n1,468,586.67\n1,432,982.20\nPrivate Sector\n39,450,759,914.33\n23,982,040.42\n25,023,652.76\n26,710,314.65\n28,789,279.36\n29,765,671.04\n50,454,504.24\n58,250,398.50\n53,630,473.13\n55,478,969.74\n56,741,739.38\n57,193,716.18\n59,270,424.82\nCentral Bank\n325,816,652.62\n148,908.53\n153,636.33\n237,798.15\n234,893.40\n231,229.46\n354,102.93\n437,245.57\n402,425.98\n403,340.54\n519,441.90\n538,877.81\n545,436.23\nODCs\n39,124,943,261.71\n23,833,131.89\n24,870,016.43\n26,472,516.50\n28,554,385.96\n29,534,441.57\n50,100,401.31\n57,813,152.92\n53,228,047.15\n55,075,629.21\n56,222,297.48\n56,654,838.36\n58,724,988.59\n0.00\n0.00\nOther Items(Net)\n-67,376,851,136.55\n-32,095,907.64 -48,116,393.84 -32,552,170.16\n-30,977,055.21\n-32,135,795.97\n-55,657,741.84\n-60,656,446.41\n-59,780,950.61\n-60,196,767.38\n-25,402,507.66\n-22,075,188.27\n-19,562,268.99\nShares and Other Equity\n-60,601,283,933.04\n-30,585,321.84\n-170,501.60 -26,189,804.03\n-24,667,528.43\n-22,936,612.12\n-40,127,307.25\n-45,626,610.38\n-43,527,595.47\n-41,180,164.06\n-6,956,765.33\n-3,405,923.44\n-1,135,806.95\nLiabilities to Other Financial Corporations\n361,061,719.66\n222,678.57\n150.24\n13,223.72\n12,000.37\n12,502.97\n51,080.87\n16,114.32\n42,655.67\n112,460.71\n26,627.71\n17,389.20\n16,407.70\nRestricted Deposits\n1,707,978,424.98\n1,197,298.85\n1,441.12\n1,719,547.05\n1,550,879.71\n2,087,873.41\n3,658,367.58\n3,837,899.15\n3,788,058.77\n4,320,759.37\n4,381,221.41\n6,468,476.55\n6,947,336.89\nDeposits and Securities Excluded from Base Money\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-8,844,607,348.16\n-2,930,563.22 -47,947,483.60\n-8,095,136.89\n-7,872,406.86\n-11,299,560.23\n-19,239,883.04\n-18,883,849.50\n-20,084,069.58\n-23,449,823.40\n-22,853,591.44\n-25,155,130.58\n-25,390,206.62\n0.87\n0.00\n0.00\nBroad Money-M3\n59,171,485,476.79\n38,754,785.83\n41,027,614.86\n42,726,472.69\n45,975,633.45\n46,473,210.27\n75,007,960.60\n87,582,919.14\n83,226,827.66\n87,448,956.66\n87,120,751.72\n85,635,147.80\n91,530,885.83\nSecurities Other than Shares Included in Broad Money\n6,990,856.69\n2,795.45\n4,372.61\n3,991.57\n19,182.77\n26,605.39\n23,833.50\n42,725.53\n0.00\n0.00\n0.00\n0.00\n0.00\nBroad Money-M2\n59,164,494,620.10\n38,751,990.38\n41,023,242.25\n42,722,481.12\n45,956,450.68\n46,446,604.88\n74,984,127.10\n87,540,193.61\n83,226,827.66\n87,448,956.66\n87,120,751.72\n85,635,147.80\n91,530,885.83\nOther Deposits\n4,455,813,258.33\n2,705,479.15\n3,276,458.32\n3,820,450.80\n3,890,292.40\n3,878,305.91\n5,866,414.39\n7,892,499.20\n7,727,403.75\n8,189,143.57\n8,859,837.75\n9,071,113.84\n8,510,387.50\nof which Foreign Currency Accounts\n3,750,078,066.25\n2,426,638.27\n2,953,225.13\n3,343,135.17\n3,425,730.40\n3,030,905.19\n4,839,186.89\n6,654,693.18\n5,209,298.79\n5,598,125.36\n6,742,783.93\n6,673,160.63\n6,169,444.57\nNarrow Money-M1\n54,708,681,361.76\n36,046,511.23\n37,746,783.93\n38,902,030.31\n42,066,158.28\n42,568,298.97\n69,117,712.70\n79,647,694.41\n75,499,423.91\n79,259,813.10\n78,260,913.98\n76,564,033.96\n83,020,498.33\nTransferable Deposits\n54,692,210,233.09\n36,036,209.11\n37,708,555.23\n38,850,801.81\n42,007,923.88\n42,499,225.86\n69,037,218.46\n79,550,713.83\n75,399,727.29\n79,160,579.60\n78,157,438.79\n76,460,871.33\n82,914,660.23\n Of which Foreign Currency Accounts\n47,611,823,202.81\n29,423,827.38\n30,036,317.64\n30,193,905.30\n31,635,023.78\n31,676,246.48\n57,112,771.32\n69,086,187.32\n64,595,580.16\n67,208,792.78\n66,512,430.68\n64,297,902.32\n69,259,210.27\nCurrency Outside Depository Corporations\n16,471,128.68\n10,302.12\n38,228.70\n51,228.50\n58,234.40\n69,073.11\n80,494.25\n96,980.58\n99,696.61\n99,233.50\n103,475.18\n103,162.63\n105,838.10\nMemorandum Items\nReserve Money\n6,141,481,651.19\n4,892,122.31\n6,639,450.71\n7,238,618.14\n7,282.11\n7,708.04\n13,606.58\n20,428,825.74\n20,028,010.53\n20,395,116.65\n21,688,509.63\n21,184,516.26\n22,726,335.23\nFCAs as a Percentage of Deposits in M3\n86.8%\n82.2%\n80.5%\n78.6%\n76.4%\n74.8%\n82.7%\n86.6%\n84.0%\n83.4%\n84.2%\n82.9%\n82.5%\nEnd Period Exchange Rate\n22,055.47\n13.43\n13.32\n13.70\n13.79\n13.85\n24.88\n28.68\n25.45\n25.80\n26.37\n26.56\n26.77\nSource: Reserve Bank of Zimbabwe, 2025\nNotes:\n(i) Depository corporations survey - formerly Monetary Survey.\n(ii) Broad money redefined using IMF's Monetary and Financial Statistics Manual of 2000. Major changes include exclusion of Government deposits held by banks from broad money.\n(iii) Transferable deposits made up of demand and savings deposits.\n(iv) NCDs are also referred to as securities included in broad money.\n(v) All classes of time deposits, short and long term are classified as time deposits, which are also termed other deposits.\n(vi) Credit to the private sector now excludes claims on other financial corporations, as well as claims on state and local government (local authorities)\n(vii) Depository corporations made up of the Central Bank and other depository corporations\n(viii) Other depository corporations (ODCs) - Commercial banks, merchant banks, building societies and POSB.\n(ix) In December 2017, the statistics were adjusted in restrospect by reclassifying Securities issued under Aftrades from claims on government to claims on central bank\n(x) In December 2017, the statistics were adjusted in restrospect by reclassifying amounts accessed by banks under the Aftrades from liabilities to Other Depository corporations and Other Financial Corporations to liabilities to Central Bank \n(xi) In December 2018, statistics were revised from November 2017 due to reclassification of lines of credit (foreign liabilities) that were initially classified as deposits included in broad money\n(xii) All monetary and financial statistics are valued in $ since the introduction of the interbank foreign exchange market in February 2019\n(xii) All monetary and financial statistics are valued in ZWL$ since the introduction of the interbank foreign exchange market in February 2019\n*Statistics are denominated in ZiG\n TABLE 1: DEPOSITORY CORPORATIONS SURVEY (ZWG '000)\n30 \n \n \n \n \n \nMar-24\n*Apr-24\n*May-24\n*Jun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nNet Foreign Assets\n-77,865,030,279.36\n-35,698,765.79\n-34,641,175.73\n-34,723,910.35\n-34,509,441.34\n-34,520,053.81\n-62,586,924.75\n-66,392,291.76\n-57,686,803.02\n-56,911,905.66\n-58,197,285.15\n-60,030,706.89\n-55,922,579.95\nClaims on Non Residents\n12,179,330,672.54\n9,276,276.05\n9,502,376.00\n10,293,011.52\n10,301,545.49\n10,342,781.57\n17,610,056.98\n24,512,816.63\n22,229,005.79\n23,239,748.84\n23,967,010.24\n23,087,880.76\n28,287,077.32\nOfficial Reserves Assets\n2,707,777,264.85\n3,630,141.09\n4,432,806.91\n4,886,166.52\n4,653,584.80\n4,669,127.60\n7,448,226.11\n12,833,764.95\n12,029,876.12\n12,507,847.00\n13,012,028.64\n12,782,102.88\n16,201,301.25\nOther Foreign Assets\n9,471,553,407.69\n5,646,134.96\n5,069,569.09\n5,406,845.01\n5,647,960.69\n5,673,653.97\n10,161,830.87\n11,679,051.69\n10,199,129.67\n10,731,901.84\n10,954,981.61\n10,305,777.88\n12,085,776.07\nLess Liabilities to Non Residents\n90,044,360,951.90\n44,975,041.84\n44,143,551.73\n45,016,921.88\n44,810,986.83\n44,862,835.37\n80,196,981.74\n90,905,108.39\n79,915,808.81\n80,151,654.50\n82,164,295.39\n83,118,587.65\n84,209,657.27\nShort Term Liabilities\n890,130,623.01\n181,911.80\n69,004.62\n68,518.82\n67,276.01\n43,925.27\n121,431.23\n139,956.61\n124,234.37\n127,599.01\n130,779.08\n132,089.98\n95,836.21\nOther Foreign Liabilities*\n89,154,230,328.89\n44,793,130.04\n44,074,547.11\n44,948,403.06\n44,743,710.82\n44,818,910.10\n80,075,550.51\n90,765,151.78\n79,791,574.44\n80,024,055.49\n82,033,516.31\n82,986,497.67\n84,113,821.06\n of which blocked funds\n17,401,899,562.68\n10,572,458.80\n10,463,756.31\n10,741,167.48\n10,788,191.71\n10,803,573.95\n19,394,800.27\n22,213,360.59\n19,667,091.04\n17,365,023.44\n17,716,697.60\n17,848,335.07\n17,984,719.26\nNet Domestic Assets (NDA)\n84,006,511,930.55\n40,590,888.10\n41,280,626.44\n41,962,528.50\n41,791,554.54\n42,228,093.95\n76,193,502.44\n86,821,117.50\n77,714,813.55\n77,307,022.31\n79,885,794.78\n81,215,223.15\n78,648,915.18\nDomestic Claims\n8,857,704,487.83\n5,031,817.01\n6,130,750.57\n4,656,410.16\n5,047,780.51\n5,013,687.28\n8,125,977.73\n9,923,292.64\n6,798,072.76\n6,804,389.32\n42,570,173.06\n45,225,552.88\n47,071,770.46\nNet Claims on Central Government\n8,045,520,594.23\n4,636,916.01\n5,731,008.28\n4,168,115.22\n4,561,043.88\n4,530,061.03\n7,398,047.70\n9,065,948.80\n6,011,686.04\n6,357,409.42\n42,007,556.24\n44,015,827.34\n45,839,370.71\nClaims on Central Government\n13,434,742,848.85\n7,155,621.00\n7,206,353.91\n7,425,969.04\n7,375,080.86\n7,694,199.15\n13,333,000.40\n16,905,321.56\n15,342,327.17\n15,948,975.81\n51,342,654.13\n48,573,045.84\n50,689,516.96\nOf which: Securities Other than Shares\n11,307,721,896.70\n6,909,934.78\n6,872,112.81\n7,091,361.49\n7,151,406.10\n7,200,851.85\n12,949,528.58\n15,003,331.18\n13,352,395.70\n13,877,094.68\n14,218,896.68\n14,323,594.21\n14,476,546.84\nLoans\n2,127,020,952.15\n18,987,003.94\n19,240,024.68\n19,894,608.43\n20,306,841.23\n20,857,284.75\n36,207,404.66\n41,005,471.86\n36,061,335.49\n36,445,102.15\n37,123,757.45\n34,249,451.63\n36,212,970.13\n Loans and Advances\n1,560,372,567.07\n791,535.04\n1,044,827.19\n1,287,212.83\n1,588,971.09\n1,589,532.00\n1,656,113.81\n1,575,286.73\n1,576,279.86\n1,579,038.55\n1,582,383.97\n8,684.84\n8,274.06\nAmounts Due from Gvt including SDR Drawdowns\n18,195,468.90\n18,195,197.49\n18,607,395.60\n18,717,870.13\n19,267,752.75\n34,551,290.84\n39,430,185.13\n34,485,055.62\n34,866,063.60\n35,541,373.47\n34,240,766.79\n36,204,696.07\n of which USD Securities revaluations (Exchange rate movements)\n17,984,314.62\n17,896,022.73\n18,308,220.85\n18,563,850.74\n18,972,797.61\n34,256,335.70\n39,103,481.48\n34,071,404.01\n34,373,221.03\n35,256,525.16\n35,520,014.26\n36,233,075.89\n Export Incentives\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLess Liabilities to Central Government\n5,389,222,254.62\n3,275,708.09\n3,252,306.99\n4,509,829.40\n4,333,364.64\n4,555,305.67\n7,502,600.61\n7,839,372.76\n9,330,641.14\n9,591,566.38\n9,335,097.88\n4,557,218.50\n4,850,146.25\nOf which: Deposits\n5,389,222,254.62\n3,275,708.09\n3,252,306.99\n4,509,829.40\n4,333,364.64\n4,555,305.67\n7,502,600.61\n7,839,372.76\n9,330,641.14\n9,591,566.38\n9,335,097.88\n4,557,218.50\n4,850,146.25\nof which Foreign Currency\n2,744,563.43\n2,472,546.52\n3,275,403.93\n3,115,314.66\n3,469,715.70\n6,332,620.41\n7,620,209.73\n9,113,050.30\n9,291,474.24\n8,231,669.88\n3,875,544.34\n4,410,312.03\nLocal Currency Deposits\n0.00\n779,760.48\n1,234,425.47\n1,218,049.98\n1,085,589.96\n1,169,980.20\n219,163.03\n217,590.84\n300,092.14\n1,103,428.01\n681,674.17\n439,834.22\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n812,183,893.60\n399,742.29\n488,294.95\n486,736.63\n483,626.25\n727,930.03\n857,343.85\n797,259.39\n446,979.90\n562,616.82\n1,209,725.54\n1,232,399.74\n4,410,312.03\nOther Financial Corporations\n153,883,742.34\n63,265.43\n62,779.58\n63,295.04\n64,046.07\n64,253.89\n68,325.03\n80,132.55\n31,350.72\n31,714.65\n245,531.91\n256,427.81\n439,834.22\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n332,483,498.63\n182,840.53\n187,717.21\n188,548.19\n188,350.72\n309,573.20\n351,773.24\n314,700.86\n12,288.64\n11,460.27\n425,315.82\n430,535.71\n1,232,399.74\nPrivate Sector\n325,816,652.62\n153,636.33\n237,798.15\n234,893.40\n231,229.46\n354,102.93\n437,245.57\n402,425.98\n403,340.54\n519,441.90\n538,877.81\n545,436.23\n256,427.81\nClaims on Other Depository Corporations\n684,600,925.61\n364,055.43\n361,687.12\n362,068.58\n322,950.33\n315,110.77\n546,767.88\n591,244.82\n1,571,336.21\n907,944.93\n794,549.14\n948,290.62\n1,059,387.09\nOf which: Loans\n684,600,925.61\n364,055.43\n361,687.12\n362,068.58\n322,950.33\n315,110.77\n546,767.88\n591,244.82\n1,571,336.21\n907,944.93\n794,549.14\n948,290.62\n1,059,387.09\nOther Liabilities to ODCs\n10,984,562,862.67\n5,672,540.16\n6,381,133.30\n5,909,428.26\n5,505,978.19\n5,409,080.16\n4,538,818.97\n6,707,055.64\n8,873,541.61\n8,273,621.31\n7,914,935.58\n8,889,894.56\n9,408,949.80\nOf which: Aftrades Balances\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Securities\n3,557,870,717.73\n2,260,627.63\n2,214,947.71\n2,314,576.53\n2,802,338.07\n2,870,625.13\n1,385,743.24\n1,724,801.18\n2,144,377.64\n2,002,013.98\n1,650,524.42\n2,378,356.92\n2,749,153.11\n0.00\n0.00\n0.00\nOther Items(Net)\n-85,448,769,379.78\n-24,446,212.35\n-24,040,309.79\n-24,497,077.93\n-23,362,963.07\n-23,335,606.17\n-37,803,290.88\n-43,528,194.29\n-44,136,669.51\n-43,495,088.34\n-44,436,008.16\n-43,931,274.21\n-39,926,707.42\nShares and Other Equity\n-84,000,619,819.97\n-24,240,753.70\n-23,915,831.50\n-24,236,240.32\n-23,332,831.27\n-23,091,435.83\n-37,896,149.54\n-43,845,102.64\n-41,767,525.41\n-39,722,515.26\n-40,716,687.65\n-38,350,823.50\n-37,337,007.50\nOther Items(Net)\n-3,189,753,793.28\n-1,523,004.67\n-2,100,723.61\n-2,120,667.23\n-1,846,508.62\n-2,396,362.99\n-3,908,731.83\n-4,040,258.56\n-6,511,308.80\n-8,239,991.34\n-8,373,471.14\n-12,139,470.53\n-10,080,715.57\nLiabilities to Other Resident Sectors\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nDeposits and Securities Excluded from Base Money\n1,741,604,233.46\n1,317,546.03\n1,976,245.32\n1,859,829.62\n1,816,376.82\n2,152,192.65\n4,001,590.49\n4,357,166.91\n4,142,164.71\n4,467,418.26\n4,654,150.62\n6,559,019.82\n7,491,015.65\nMonetary Base \n6,141,481,651.19\n6,455,093.44\n6,639,450.71\n7,238,618.14\n7,282,113.20\n7,708,040.15\n13,606,577.69\n20,428,825.74\n20,028,010.53\n20,395,116.65\n21,688,509.63\n21,184,516.26\n22,726,335.23\nZWL Coins\n51,536.90\n20.39\n16.95\n15.26\n14.33\n14.27\n14.27\n14.27\n14.27\n14.27\n14.27\n14.27\n14.27\nZWL Notes\n19,250,549.61\n7,646.53\n7,646.25\n7,641.71\n6,018.48\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\nZig Notes\n1,240.55\n12,162.56\n16,066.84\n20,175.22\n26,774.05\n33,546.57\n35,318.43\n35,320.20\n35,320.10\n35,322.26\n35,322.72\n35,323.23\nZiG Coins\n8,848.60\n33,390.00\n36,721.62\n39,548.30\n43,392.05\n49,516.41\n113,067.78\n131,664.45\n141,250.42\n149,157.47\n155,377.61\n163,557.87\nLiabilities to ODCs\n6,122,179,564.68\n6,437,337.37\n6,586,234.95\n7,178,172.71\n7,216,356.87\n7,632,571.13\n13,518,211.78\n20,275,136.61\n19,855,722.95\n20,213,243.21\n21,498,726.98\n20,988,513.01\n22,522,151.21\nReserve Deposits\n4,760,466.26\n5,381,967.87\n5,674,932.79\n6,001,808.11\n6,198,549.50\n11,991,225.66\n17,272,213.17\n16,096,475.01\n16,691,280.01\n17,918,322.64\n17,853,262.69\n17,411,472.42\n Local Currency Reserve Deposits\n782,882,894.59\n588,261.85\n852,988.66\n1,019,521.43\n1,293,912.63\n1,392,957.07\n1,999,399.49\n2,851,765.21\n2,965,905.06\n2,935,341.50\n2,981,537.53\n3,152,253.26\n3,222,430.88\n Foreign Currency Reserve Deposits\n5,293,831,558.25\n4,172,204.40\n4,528,979.21\n4,655,411.36\n4,707,895.48\n4,805,592.43\n9,991,826.17\n14,420,447.97\n13,130,569.95\n13,755,938.51\n14,936,785.11\n14,701,009.42\n14,189,041.54\n Exess reserves \n45,465,111.84\n1,676,871.11\n1,204,267.07\n1,503,239.92\n1,214,548.76\n1,434,021.62\n1,526,986.12\n3,002,923.43\n3,759,247.94\n3,521,963.20\n3,580,404.34\n3,135,250.32\n5,110,678.79\n of which Excess reserves - ZiG\n113,899.99\n124,143.39\n145,185.75\n87,381.11\n143,711.96\n165,752.71\n338,542.12\n406,286.37\n398,701.95\n275,478.64\n440,419.67\n363,524.21\n Excess reserves - FCA\n1,562,971.12\n1,080,123.68\n1,358,054.17\n1,127,167.65\n1,290,309.66\n1,361,233.41\n2,664,381.31\n3,352,961.57\n3,123,261.25\n3,304,925.70\n2,694,830.66\n4,747,154.58\nPrivate Deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nSource: Reserve Bank of Zimbabwe 2025\n*Statistics are denominated in ZiG\n TABLE 2: CENTRAL BANK SURVEY (ZWG'000) \n31 \n \n \n \n \nMar-24\n*Apr-24\n*May-24\n*Jun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nNet Foreign Assets\n11,606,860,302.06\n6,841,962.55\n6,864,056.48\n6,861,295.92\n7,506,228.34\n6,703,991.82\n11,311,763.23\n11,863,962.98\n9,303,347.77\n9,621,512.62\n8,676,451.76\n9,929,740.55\n9,228,814.05\nClaims on Non Residents\n18,155,224,099.23\n10,973,836.76\n11,293,656.76 11,679,328.24\n12,352,811.95\n11,598,442.41\n20,019,415.47\n21,861,671.92\n17,752,438.09\n19,141,214.17\n19,229,144.68\n20,477,933.09\n22,371,396.07\nOf Which: Foreign Currency\n9,785,505,639.81\n4,794,837.35\n4,337,566.82\n4,753,113.49\n5,739,936.96\n6,444,888.52\n10,895,905.76\n13,662,079.40\n11,233,737.69\n10,274,553.25\n12,729,369.89\n11,621,925.79\n9,274,836.62\nDeposits\n8,323,896,983.03\n6,152,462.49\n6,929,621.83\n6,902,261.76\n6,586,859.83\n5,128,037.09\n9,069,019.76\n8,153,531.84\n6,482,287.97\n8,827,755.41\n6,459,994.39\n8,811,625.28\n13,051,049.62\nOther\n45,821,476.40\n26,536.92\n26,468.12\n23,952.99\n26,015.17\n25,516.80\n54,489.96\n46,060.69\n36,412.43\n38,905.51\n39,780.40\n44,382.02\n45,509.84\nLess Liabilities to Non Residents\n6,548,363,797.17\n4,131,874.21\n4,429,600.28\n4,818,032.32\n4,846,583.61\n4,894,450.59\n8,707,652.25\n9,997,708.95\n8,449,090.32\n9,519,701.55\n10,552,692.92\n10,548,192.54\n13,142,582.02\nOf Which: Deposits\n2,837,026,028.04\n1,874,340.18\n1,941,676.30\n2,023,747.02\n1,715,870.69\n1,688,391.39\n2,976,714.87\n3,361,036.04\n2,691,546.72\n3,251,085.67\n3,669,921.39\n3,691,797.46\n4,928,822.48\nLoans\n3,711,337,769.13\n2,257,534.02\n2,487,923.98\n2,794,285.29\n3,130,712.92\n3,206,059.20\n5,730,937.38\n6,636,672.91\n5,757,543.59\n6,268,615.88\n6,882,771.53\n6,856,395.09\n8,213,759.54\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nNet Domestic Assets (NDA)\n47,514,528,237.56\n31,782,273.98\n33,785,421.43 35,673,665.70\n38,145,673.59\n39,635,826.10\n63,272,480.21\n75,102,707.82\n73,469,677.34\n77,581,551.65\n78,067,895.57\n75,511,701.35\n81,652,554.92\nDomestic Claims\n49,195,099,829.70\n30,483,864.43\n31,543,958.04 33,380,506.81\n36,954,010.73\n37,139,789.00\n62,499,402.56\n71,531,508.87\n65,031,259.53\n67,738,193.00\n68,668,904.40\n68,435,372.99\n71,590,612.29\nNet Claims on Central Government\n8,137,248,966.22\n5,584,180.30\n5,547,369.71\n5,745,341.04\n7,293,076.13\n6,548,202.35\n10,591,046.35\n11,703,334.97\n10,121,437.02\n10,961,408.94\n10,725,014.88\n9,938,491.66\n10,974,863.01\nClaims on Central Government\n8,652,815,980.77\n5,827,034.95\n5,897,338.50\n6,334,601.55\n7,731,687.11\n7,081,139.08\n11,174,323.23\n12,330,801.46\n10,798,672.42\n11,677,830.99\n11,429,017.37\n10,874,884.43\n11,880,042.80\nSecurities\n8,605,206,635.58\n5,583,192.64\n5,867,704.45\n6,309,901.96\n7,706,557.44\n6,955,089.37\n10,929,386.91\n12,091,791.23\n10,509,483.63\n11,621,387.80\n11,371,369.87\n10,816,740.04\n11,771,258.78\nLoans\n47,609,345.19\n243,842.32\n29,634.05\n24,699.60\n25,129.68\n126,049.71\n244,936.32\n239,010.23\n289,188.79\n56,443.19\n57,647.49\n58,144.40\n108,784.02\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLess Liabilities to Central Government\n515,567,014.55\n242,854.65\n349,968.79\n589,260.52\n438,610.98\n532,936.72\n583,276.88\n627,466.49\n677,235.40\n716,422.05\n704,002.49\n936,392.77\n905,179.80\nOf which: Deposits\n515,567,014.55\n242,854.65\n349,968.79\n589,260.52\n438,610.98\n532,936.72\n583,276.88\n627,466.49\n677,235.40\n716,422.05\n704,002.49\n936,392.77\n905,179.80\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n41,057,850,863.48\n24,899,684.12\n25,996,588.33 27,635,165.77\n29,660,934.60\n30,591,586.65\n51,908,356.20\n59,828,173.90\n54,909,822.51\n56,776,784.05\n57,943,889.52\n58,496,881.33\n60,615,749.28\nOther Financial Corporations\n649,601,336.03\n295,553.50\n371,891.66\n452,086.38\n418,360.70\n447,828.48\n803,033.30\n864,824.64\n762,328.72\n811,209.93\n778,081.69\n779,881.90\n866,505.68\nState and Local Government\n143,347.81\n1,803.44\n1,371.69\n1,489.84\n162.58\n189.44\n334.82\n83.40\n98.73\n574.72\n10,044.30\n18,890.21\n21,808.52\nPublic Non Financial Corporations\n1,283,162,917.94\n769,195.30\n753,308.55\n709,073.06\n688,025.36\n609,127.16\n1,004,586.77\n1,150,112.93\n919,347.91\n889,370.20\n933,466.05\n1,043,270.85\n1,002,446.49\nPrivate Sector\n39,124,943,261.71\n23,833,131.89\n24,870,016.43\n26,472,516.50\n28,554,385.96\n29,534,441.57\n50,100,401.31\n57,813,152.92\n53,228,047.15\n55,075,629.21\n56,222,297.48\n56,654,838.36\n58,724,988.59\n0.00\n0.00\nClaims on the Central Bank\n16,737,574,909.26\n11,097,658.79\n12,455,525.64 12,775,616.04\n11,481,325.31\n13,543,158.02\n22,444,626.84\n30,514,072.84\n32,279,220.71\n32,226,426.11\n32,420,854.58\n31,974,529.83\n33,565,803.01\nCurrency\n2,830,957.84\n7,453.94\n14,987.06\n9,216.94\n7,521.93\n6,395.91\n7,871.66\n56,708.55\n72,590.97\n82,639.94\n86,307.47\n92,840.62\n98,345.92\nReserves\n16,734,743,951.43\n11,090,204.85\n12,420,731.87\n12,746,019.20\n11,453,300.33\n13,516,156.89\n22,399,747.84\n30,414,709.72\n29,835,562.13\n32,109,976.20\n32,300,632.15\n31,847,522.25\n33,387,025.38\nSecurities\n0.00\n0.00\n19,806.72\n20,379.90\n20,503.05\n20,605.22\n37,007.33\n42,654.56\n2,371,067.62\n33,809.97\n33,914.96\n34,166.96\n80,431.70\nOther Claims\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLiabilities to the Central Bank\n95,704,985.13\n67,448.03\n50,898.37\n99,769.05\n99,872.51\n109,931.02\n491,438.62\n429,739.68\n409,274.64\n233,008.13\n368,655.55\n536,903.93\n546,505.15\nOther Items(Net)\n18,322,441,516.27\n9,731,801.21\n10,163,163.89 10,382,688.10\n10,189,789.94\n10,937,189.89\n21,180,110.57\n26,513,134.21\n23,431,528.27\n22,150,059.32\n22,653,207.86\n24,361,297.54\n22,957,355.23\nShares and Other Equity\n23,399,335,886.93\n11,639,746.46\n13,617,857.06\n16,354,657.14\n17,229,141.66\n19,127,593.60\n32,025,127.21\n37,321,973.73\n32,311,333.95\n32,915,572.23\n33,759,922.32\n34,944,900.06\n36,201,200.55\nLiabilities to other ressident sectors\n361,061,719.66\n222,678.57\n4,558.25\n13,223.72\n12,000.37\n12,502.97\n51,080.87\n16,114.32\n42,655.67\n112,460.71\n26,627.71\n17,389.20\n16,407.70\nOther Items(Net)\n-5,437,956,090.32\n-2,130,623.82\n-3,459,251.43\n-5,985,192.76\n-7,051,352.09\n-8,202,906.68\n-10,896,097.52\n-10,824,953.85\n-8,922,461.35\n-10,877,973.62\n-11,133,342.17\n-10,600,991.71\n-13,260,253.02\nDeposits and Securities Included in Broad Money\n59,121,388,539.63\n38,624,236.53\n40,649,477.91 42,534,961.62\n45,651,901.94\n46,339,817.92\n74,584,243.43\n86,966,670.79\n82,773,025.11\n87,203,064.28\n86,744,347.32\n85,441,441.90\n90,881,368.97\nDeposits Included in Broad Money\n59,114,397,682.94\n38,621,441.08\n40,645,105.30\n42,530,970.04\n45,632,719.17\n46,313,212.53\n74,560,409.93\n86,923,945.26\n82,773,025.11\n87,203,064.28\n86,744,347.32\n85,441,441.90\n90,881,368.97\nTransferable Deposits\n54,658,584,424.60\n35,915,961.93\n37,368,646.98\n38,710,519.24\n41,742,426.77\n42,434,906.62\n68,693,995.54\n79,031,446.06\n75,045,621.35\n79,013,920.71\n77,884,509.57\n76,370,328.06\n82,370,981.47\n of which FCAs\n47,588,241,673.51\n29,421,560.87\n29,788,818.17\n30,114,642.50\n31,415,685.01\n31,648,530.18\n56,811,012.62\n68,608,644.80\n64,281,472.90\n67,075,955.67\n66,339,658.20\n64,290,589.64\n68,788,012.75\nOther Deposits\n4,455,813,258.33\n2,705,479.15\n3,276,458.32\n3,820,450.80\n3,890,292.40\n3,878,305.91\n5,866,414.39\n7,892,499.20\n7,727,403.75\n8,189,143.57\n8,859,837.75\n9,071,113.84\n8,510,387.50\n of which FCAs\n3,750,078,066.25\n2,426,638.27\n2,953,225.13\n3,343,135.17\n3,425,730.40\n3,030,905.19\n4,839,186.89\n6,654,693.18\n5,209,298.79\n5,598,125.36\n6,742,783.93\n6,673,160.63\n6,169,444.57\nMoney Market Instruments\n6,990,856.69\n2,795.45\n4,372.61\n3,991.57\n19,182.77\n26,605.39\n23,833.50\n42,725.53\n0.00\n0.00\n0.00\n0.00\n0.00\n Source: Reserve Bankof Zimbabwe, 2025\n*Statistics are denominated in ZiG\nTABLE 3: OTHER DEPOSITORY CORPORATIONS SURVEY (ZWG'000)\n32 \n \n \nZWG Thousands\nEnd of\nGold\nOther\nTotal\nTreasury Bills\nCentral\nBanks\nOther\nGovt.\nOther\nOther Assets\nTOTAL\nGovernment\nStock\n2021\nJan\n172,422.4\n18,514,683.1\n18,687,105.4\n6,165,262.6\n18,437,148.8\n2,564,013.7\n7,845,851.8\n0.0\n205,904.7\n6,726,004.2\n60,631,291.2\nFeb\n164,474.3\n17,693,200.2\n17,857,674.5\n6,095,109.2\n18,695,624.2\n2,678,324.8\n8,110,252.7\n0.0\n704,855.5\n6,818,055.7\n60,959,896.5\nMar\n159,880.8\n23,080,223.7\n23,240,104.6\n5,962,815.3\n19,714,713.8\n2,055,511.3\n7,418,491.6\n0.0\n704,855.5\n7,993,138.8\n67,089,630.8\nApr\n167,570.1\n17,947,444.3\n18,115,014.4\n5,871,229.6\n22,005,617.7\n2,433,322.8\n8,948,936.8\n0.0\n1,536,872.8\n13,430,548.5\n72,341,542.6\nMay\n171,432.2\n20,162,745.0\n20,334,177.2\n5,850,605.1\n22,465,781.8\n3,018,822.7\n9,030,329.0\n0.0\n1,606,872.8\n15,447,639.2\n77,754,227.8\nJun\n168,571.5\n32,968,499.7\n33,137,071.2\n5,809,922.7\n18,675,222.7\n3,426,911.2\n12,018,425.8\n0.0\n1,606,872.8\n13,139,983.0\n87,814,409.3\nJul\n178,555.8\n21,647,885.2\n21,826,441.0\n5,803,706.3\n16,952,495.3\n3,478,459.4\n10,464,191.0\n0.0\n1,606,872.8\n14,712,334.1\n74,844,499.9\nAug\n177,982.1\n106,069,437.7\n106,247,419.8\n5,778,201.7\n17,005,332.9\n3,525,244.7\n13,574,836.0\n0.0\n1,606,872.8\n15,941,939.8\n163,679,847.8\nSep\n173,237.9\n103,520,069.9\n103,693,307.8\n5,767,697.2\n17,833,656.5\n3,296,141.9\n17,005,018.5\n0.0\n2,243,680.6\n15,544,611.3\n165,384,113.7\nOct\n199,208.6\n112,129,177.5\n112,328,386.1\n5,748,064.6\n25,695,250.0\n3,969,163.2\n20,206,279.4\n0.0\n2,243,680.6\n14,447,196.8\n184,638,020.7\nNov\n215,992.0\n121,327,907.8\n121,543,899.8\n5,737,560.0\n27,349,310.6\n4,856,091.3\n21,759,542.1\n0.0\n2,463,488.2\n15,868,332.7\n199,578,224.8\nDec\n225,772.8\n134,237,129.6\n134,462,902.4\n5,725,696.7\n51,228,986.8\n4,919,969.8\n22,342,311.1\n0.0\n2,463,488.2\n-8,097,011.0\n213,046,344.1\n2022\nJan\n235,763.3\n109,708,346.2\n109,944,109.5\n5,709,408.9\n52,667,064.3\n5,611,159.5\n19,041,740.9\n0.0\n2,963,488.2\n15,554,203.8\n211,491,175.1\nFeb\n270,813.7\n121,963,827.5\n122,234,641.2\n5,698,904.3\n53,343,629.6\n5,710,038.8\n25,077,085.8\n0.0\n2,963,488.2\n16,236,739.6\n231,264,527.6\nMar\n312,775.9\n141,125,554.6\n141,438,330.5\n5,628,648.4\n55,987,602.8\n10,763,971.7\n22,095,456.7\n0.0\n3,341,227.6\n40,479,788.1\n279,735,025.8\nApr\n347,339.4\n158,165,751.2\n158,513,090.6\n5,618,143.8\n58,769,044.7\n11,883,261.4\n24,571,816.9\n0.0\n3,341,227.6\n44,921,831.2\n307,618,416.2\nMay\n656,689.2\n294,886,459.6\n295,543,148.8\n5,618,143.8\n78,389,443.4\n7,158,720.8\n43,404,732.4\n0.0\n3,341,227.6\n54,019,333.5\n487,474,750.3\nJun\n790,541.7\n377,477,927.8\n378,268,469.5\n5,618,143.8\n88,353,569.1\n9,947,986.8\n54,976,995.8\n0.0\n3,341,227.6\n73,353,516.5\n613,859,909.2\nJul\n1,622,450.3\n457,498,669.8\n459,121,120.0\n11,099,253.3\n89,490,529.9\n11,136,478.9\n69,403,348.4\n0.0\n3,441,227.6\n75,423,298.3\n719,115,256.5\nAug\n3,853,408.2\n460,570,799.4\n464,424,207.6\n16,894,372.0\n233,300,046.1\n26,441,912.9\n85,506,977.0\n0.0\n3,441,227.6\n95,708,175.1\n925,716,918.4\nSep\n1,213,569.6\n422,128,573.4\n423,342,143.1\n24,148,817.3\n240,464,254.5\n40,716,900.0\n102,506,548.5\n0.0\n3,441,227.6\n159,983,505.1\n994,603,396.2\nOct\n1,217,226.0\n419,396,410.3\n420,613,636.3\n32,085,268.1\n242,513,386.2\n42,205,302.9\n114,090,154.4\n0.0\n3,441,227.6\n198,788,800.6\n1,053,737,776.0\nNov\n1,344,517.8\n460,251,610.0\n461,596,127.8\n58,861,123.7\n274,274,026.6\n34,171,755.6\n120,322,393.5\n0.0\n3,441,227.6\n229,604,841.4\n1,182,271,496.3\nDec\n1,451,897.4\n573,962,353.3\n575,414,250.7\n95,209,423.9\n229,348,483.4\n25,067,909.5\n124,017,370.0\n0.0\n3,441,227.6\n233,388,357.9\n1,285,887,023.1\n2023\nJan\n1,778,548.0\n455,268,241.4\n457,046,789.5\n115,768,163.2\n324,717,988.5\n41,863,876.4\n143,911,209.1\n0.0\n3,944,009.9\n351,469,241.5\n1,438,721,278.1\nFeb\n1,881,079.8\n472,186,097.3\n474,067,177.1\n141,133,866.7\n466,154,107.2\n43,495,912.8\n165,282,524.5\n0.0\n4,316,109.0\n380,513,866.7\n1,674,963,564.1\nMar\n8,361,808.8\n450,986,992.2\n459,348,801.0\n163,408,985.7\n506,114,174.5\n45,842,895.3\n190,259,970.2\n0.0\n10,278,082.7\n357,149,334.0\n1,732,402,243.4\nApr\n17,580,512.7\n469,533,009.1\n487,113,521.8\n197,483,744.4\n520,092,134.9\n47,004,500.3\n221,942,980.5\n0.0\n10,278,082.7\n411,625,402.0\n1,895,540,366.6\nMay\n41,967,560.6\n1,200,210,636.8\n1,242,178,197.3\n491,408,539.8\n704,673,598.8\n116,825,246.2\n515,608,147.9\n0.0\n10,278,082.7\n500,574,960.0\n3,581,546,772.7\nJun\n117,762,034.7\n4,820,546,063.8\n4,938,308,098.5\n1,282,058,425.6\n963,954,456.3\n267,624,056.0\n989,542,782.6\n0.0\n10,812,510.0\n625,369,215.7\n9,077,669,544.7\nJul\n107,872,764.7\n2,141,339,177.5\n2,249,211,942.3\n1,041,256,825.4\n847,281,667.2\n261,303,321.9\n823,892,701.2\n0.0\n10,812,510.0\n1,041,463,067.2\n6,275,222,035.1\nAug\n121,776,377.3\n2,235,636,955.5\n2,357,413,332.7\n1,354,647,836.1\n918,405,362.6\n238,753,031.6\n644,160,006.2\n0.0\n10,812,510.0\n974,795,606.4\n6,498,987,685.5\nSep\n157,867,702.0\n2,711,272,137.9\n2,869,139,839.9\n1,738,161,413.3\n882,144,726.3\n207,009,026.9\n721,642,582.7\n0.0\n10,812,510.0\n929,692,865.6\n7,358,602,964.7\nOct\n175,059,711.3\n2,755,428,180.5\n2,930,487,891.8\n1,883,996,199.0\n854,777,605.9\n229,347,409.3\n852,138,523.0\n0.0\n10,812,510.0\n908,359,306.7\n7,669,919,445.6\nNov\n193,813,079.6\n2,528,939,841.3\n2,722,752,920.9\n1,984,147,610.1\n994,122,689.6\n246,227,512.2\n436,176,620.3\n0.0\n28,568,218.1\n1,757,844,685.6\n8,169,840,256.7\nDec\n219,636,038.4\n2,530,506,238.1\n2,750,142,276.6\n2,219,186,779.0\n967,084,343.4\n266,265,290.7\n461,260,994.9\n0.0\n28,568,218.1\n1,510,393,923.6\n8,202,901,826.2\n2024\nJan\n381,595,326.5\n4,408,375,943.7\n4,789,971,270.2\n4,440,121,511.3\n1,158,085,023.8\n392,377,252.8\n268,151,409.9\n0.0\n33,459,027.8\n2,756,550,895.7\n13,838,716,391.5\nFeb\n593,120,433.2\n6,572,785,801.0\n7,165,906,234.2\n6,608,105,197.5\n1,690,780,188.6\n503,151,449.6\n390,545,755.0\n0.0\n137,100,371.8\n3,366,873,733.6\n19,862,462,930.3\nMar\n994,244,463.0\n11,185,086,209.6\n12,179,330,672.5\n11,307,721,896.7\n2,127,020,952.2\n684,600,925.6\n593,023,317.9\n0.0\n219,160,575.7\n3,957,976,900.7\n31,068,835,241.3\n*Apr\n662,415.9\n8,613,860.1\n9,276,276.0\n4,746.5\n245,686.2\n364,055.4\n162,577.6\n0.0\n5,132,876.5\n45,863,577.2\n61,049,795.5\n*May\n694,772.6\n8,807,603.4\n9,502,376.0\n4,694.3\n334,241.1\n361,687.1\n168,629.3\n0.0\n5,090,709.7\n45,850,721.8\n61,313,059.2\n*Jun\n1,259,743.2\n9,598,238.9\n10,857,982.2\n1,788.9\n334,607.5\n362,068.6\n253,031.9\n0.0\n5,235,426.7\n46,037,156.7\n63,082,062.5\n*Jul\n1,762,817.5\n9,041,802.2\n10,804,619.8\n7,151,406.1\n223,674.8\n322,950.3\n250,582.0\n0.0\n5,475,669.9\n37,822,603.9\n62,051,506.7\n*Aug\n2,021,930.5\n8,579,964.1\n10,601,894.6\n7,200,851.8\n493,347.3\n315,110.8\n246,731.9\n0.0\n5,502,626.5\n38,241,301.8\n62,601,864.7\n*Sep\n3,961,304.4\n15,588,126.4\n19,549,430.8\n12,949,528.6\n383,471.8\n546,767.9\n371,896.5\n0.0\n9,813,063.3\n63,800,833.0\n107,414,992.0\n*Oct\n5,167,557.7\n20,933,472.1\n26,101,029.8\n15,003,331.2\n1,901,990.4\n591,244.8\n460,364.7\n0.0\n11,296,853.4\n74,144,709.0\n129,499,523.3\n*Nov\n5,401,309.0\n17,061,448.1\n22,462,757.1\n13,352,395.7\n1,989,931.5\n1,582,208.9\n424,226.1\n0.0\n10,034,679.7\n71,315,611.3\n121,161,810.3\n*Dec\n5,764,371.0\n17,838,439.8\n23,602,810.8\n13,877,094.7\n2,071,881.1\n907,944.9\n421,573.0\n0.0\n10,108,237.2\n70,417,050.3\n121,406,592.0\n2025\n*Jan\n6,371,853.9\n17,595,156.4\n23,967,010.2\n14,218,896.7\n37,123,757.4\n794,549.1\n537,209.9\n0.0\n10,329,860.4\n37,012,523.4\n123,983,807.2\n*Feb\n6,665,066.4\n16,422,814.4\n23,087,880.8\n14,323,594.2\n34,249,451.6\n948,290.6\n971,459.8\n0.0\n10,272,973.7\n42,625,602.6\n126,479,253.3\n*Mar\n7,427,485.0\n20,859,592.3\n28,287,077.3\n14,476,546.8\n36,212,970.1\n1,059,387.1\n984,087.0\n0.0\n10,259,096.1\n39,122,007.7\n130,401,172.2\nSource: Reserve Bank of Zimbabwe, 2024\n*Statistics are denominated in ZiG\nTABLE 4.1: RESERVE BANK - ASSETS\n Foreign Assets\nLoans and advances\nInvestments\n33 \n \n \n \n TABLE 4.2 RESERVE BANK: LIABILITIES\nCapital\nand\nForeign\ngeneral\nBond Notes in \nCirculation\nBond Coins in \nCirculation\nBond Notes and\nBankers Deposits \nOther Deposits\nGovt. Deposits\nTotal Deposits\nLiabilities\nreserve\nOther Liabilities\nTOTAL\ncoins* issued\n2021\nJan\n2,603,694.0\n99,709.7\n2,703,403.6\n20,920,048.1\n21,688,620.0\n10,307,762.6\n52,916,430.7\n425,318,694.3\n-459,147,547.1\n38,840,309.7\n60,631,291.2\nFeb\n2,847,426.2\n99,709.7\n2,947,136.0\n22,660,783.0\n24,907,445.2\n9,862,815.0\n57,431,043.2\n428,867,855.1\n-467,159,156.0\n38,873,018.4\n60,959,896.5\nMar\n3,050,378.4\n99,709.9\n3,150,088.2\n20,092,956.4\n30,447,666.0\n15,728,217.8\n66,268,840.2\n427,903,556.2\n-471,095,071.7\n40,862,217.8\n67,089,630.8\nApr\n3,152,287.9\n99,710.0\n3,251,997.9\n22,781,563.8\n31,557,045.4\n10,326,569.7\n64,665,179.0\n420,425,213.3\n-458,343,431.2\n42,342,583.6\n72,341,542.6\nMay\n3,550,401.6\n99,710.1\n3,650,111.7\n25,208,126.4\n29,954,715.7\n7,106,858.3\n62,269,700.5\n438,867,998.8\n-477,762,942.2\n50,729,358.9\n77,754,227.8\nJun\n3,797,075.3\n99,710.1\n3,896,785.4\n31,010,207.0\n35,366,426.1\n12,123,477.0\n78,500,110.2\n441,336,133.8\n-486,305,203.5\n50,386,583.4\n87,814,409.3\nJul\n4,413,772.0\n99,710.2\n4,513,482.2\n25,268,616.0\n39,365,261.3\n9,556,162.6\n74,190,039.9\n433,994,649.5\n-488,981,304.2\n51,127,632.5\n74,844,499.9\nAug\n4,650,585.0\n99,710.2\n4,750,295.2\n27,516,749.2\n19,263,821.8\n10,650,081.3\n57,430,652.3\n518,211,536.1\n-491,527,426.7\n74,814,790.9\n163,679,847.8\nSep\n4,671,398.4\n99,710.1\n4,771,108.5\n26,137,503.7\n18,736,378.0\n13,828,878.2\n58,702,759.9\n525,400,897.5\n-501,914,984.0\n78,424,331.9\n165,384,113.7\nOct\n4,714,194.4\n99,710.1\n4,813,904.5\n23,893,054.5\n25,896,593.1\n13,263,310.5\n63,052,958.1\n582,444,248.0\n-555,638,121.1\n89,965,031.3\n184,638,020.7\nNov\n4,805,542.4\n99,710.1\n4,905,252.6\n30,737,671.8\n27,610,522.4\n15,013,224.4\n73,361,418.5\n629,845,408.6\n-604,000,281.4\n95,466,426.5\n199,578,224.8\nDec\n5,052,397.2\n99,710.2\n5,152,107.4\n30,869,294.1\n32,084,904.4\n8,908,029.2\n71,862,227.7\n647,475,472.6\n-620,887,582.2\n109,444,118.6\n213,046,344.1\n2022\nJan\n4,993,493.5\n99,710.2\n5,093,203.7\n28,440,230.1\n32,419,816.6\n32,678,210.2\n93,538,256.8\n679,232,958.6\n-657,568,133.3\n91,194,889.3\n211,491,175.1\nFeb\n5,093,893.8\n99,710.3\n5,193,604.1\n30,520,031.8\n31,781,304.4\n28,848,204.3\n91,149,540.6\n731,023,608.5\n-700,269,273.0\n104,167,047.3\n231,264,527.6\nMar\n5,240,635.1\n99,710.3\n5,340,345.4\n35,666,987.9\n32,359,947.9\n25,890,825.5\n93,917,761.3\n859,032,643.6\n-804,754,190.0\n126,198,465.5\n279,735,025.8\nApr\n6,014,484.4\n99,710.4\n6,114,194.8\n35,882,452.7\n39,908,611.5\n16,181,306.8\n91,972,371.0\n952,918,373.1\n-896,652,942.7\n153,266,420.0\n307,618,416.2\nMay\n6,165,661.9\n99,710.4\n6,265,372.3\n41,961,381.1\n73,732,194.5\n27,396,848.5\n143,090,424.1\n1,773,918,543.0\n-1,694,545,332.4\n258,745,743.3\n487,474,750.3\nJun\n6,165,333.2\n99,710.5\n6,265,043.7\n57,428,589.8\n134,105,399.5\n61,011,771.2\n252,545,760.5\n2,181,260,572.4\n-2,081,541,626.9\n255,330,159.5\n613,859,909.2\nJul\n6,412,784.0\n99,710.5\n6,512,494.6\n67,625,923.7\n183,776,332.7\n49,354,263.3\n300,756,519.7\n2,593,125,027.8\n-2,495,937,680.3\n314,658,894.7\n719,115,256.5\nAug\n6,554,970.1\n99,710.6\n6,654,680.7\n149,247,595.6\n237,114,720.8\n102,864,089.4\n489,226,405.8\n2,746,097,750.7\n-2,662,572,351.1\n346,310,432.3\n925,716,918.4\nSep\n6,740,568.3\n99,710.6\n6,840,278.9\n153,102,864.5\n227,519,780.3\n126,701,556.5\n507,324,201.3\n2,963,877,357.0\n-2,881,231,066.4\n397,792,625.5\n994,603,396.2\nOct\n7,012,718.2\n99,711.4\n7,112,429.6\n137,954,649.6\n268,519,180.0\n155,362,810.4\n561,836,640.0\n3,015,067,480.6\n-2,968,624,968.2\n438,346,194.0\n1,053,737,776.0\nNov\n7,260,471.7\n99,645.4\n7,360,117.1\n186,186,956.7\n291,675,261.3\n170,976,902.2\n648,839,120.2\n3,055,352,040.0\n-3,039,020,578.8\n509,740,797.8\n1,182,271,496.3\nDec\n7,472,198.3\n99,645.4\n7,571,843.6\n195,123,616.4\n253,599,254.6\n149,594,117.8\n598,316,988.8\n3,404,361,362.7\n-3,212,151,922.9\n487,788,750.9\n1,285,887,023.1\n2023\nJan\n7,439,947.9\n99,645.4\n7,539,593.3\n247,424,079.2\n285,657,858.2\n268,971,176.7\n802,053,114.1\n3,909,323,684.4\n-3,698,960,271.1\n418,765,157.5\n1,438,721,278.1\nFeb\n7,927,761.5\n99,645.4\n8,027,406.9\n287,100,815.9\n340,045,101.8\n463,639,123.2\n1,090,785,040.9\n4,319,873,162.9\n-4,110,955,220.5\n367,233,173.9\n1,674,963,564.1\nMar\n8,414,729.9\n97,745.3\n8,512,475.2\n338,302,189.2\n320,869,801.8\n390,588,987.9\n1,049,760,978.9\n4,338,956,741.5\n-4,073,115,059.5\n408,287,107.4\n1,732,402,243.4\nApr\n8,902,316.4\n90,572.7\n8,992,889.1\n431,816,781.5\n395,683,390.3\n289,513,510.4\n1,117,013,682.2\n4,878,143,248.9\n-4,620,636,211.0\n512,026,757.4\n1,895,540,366.6\nMay\n8,960,488.7\n83,649.7\n9,044,138.4\n924,669,866.4\n933,136,031.1\n343,384,233.5\n2,201,190,131.1\n11,794,706,191.5\n-11,291,316,467.1\n867,922,778.7\n3,581,546,772.7\nJun\n10,258,707.6\n80,542.9\n10,339,250.5\n1,898,448,010.5\n1,936,954,212.6\n3,084,044,706.3\n6,919,446,929.3\n25,912,990,743.8\n-25,202,259,045.1\n1,437,151,666.3\n9,077,669,544.7\nJul\n11,193,057.5\n79,344.9\n11,272,402.4\n1,712,097,331.8\n1,708,254,713.8\n694,031,697.7\n4,114,383,743.2\n20,213,823,230.0\n-19,805,080,179.5\n1,740,822,838.9\n6,275,222,035.1\nAug\n11,885,047.4\n79,163.8\n11,964,211.3\n1,805,843,342.5\n1,379,918,329.2\n681,062,414.7\n3,866,824,086.4\n20,157,032,712.0\n-19,579,648,458.4\n2,042,815,134.2\n6,498,987,685.5\nSep\n12,736,767.9\n79,154.4\n12,815,922.3\n2,101,508,662.6\n1,700,112,135.5\n838,191,207.3\n4,639,812,005.4\n23,268,748,342.3\n-22,753,122,010.8\n2,190,348,705.6\n7,358,602,964.7\nOct\n13,560,105.5\n79,154.8\n13,639,260.3\n2,520,855,764.3\n1,815,663,949.6\n683,697,143.8\n5,020,216,857.7\n24,188,648,282.0\n-23,550,146,670.9\n1,997,561,716.6\n7,669,919,445.6\nNov\n14,430,019.8\n78,794.3\n14,508,814.1\n2,585,142,139.3\n2,026,591,134.4\n404,623,821.1\n5,016,357,094.7\n24,718,852,675.1\n-23,892,801,193.0\n2,312,922,865.8\n8,169,840,256.7\nDec\n15,672,830.1\n76,968.8\n15,749,798.9\n2,963,059,206.4\n1,782,552,260.1\n389,960,317.1\n5,135,571,783.6\n25,627,658,812.8\n-25,053,448,230.9\n2,477,369,661.7\n8,202,901,826.2\n2024\nJan \n16,920,535.8\n66,290.7\n16,986,826.5\n4,819,548,961.5\n3,005,320,583.2\n686,714,079.5\n8,511,583,624.2\n41,994,286,364.2\n-40,143,169,460.3\n3,459,029,036.9\n13,838,716,391.5\nFeb\n18,138,392.9\n59,094.2\n18,197,487.2\n6,336,860,127.1\n4,722,463,681.6\n770,728,882.4\n11,830,052,691.1\n61,196,966,639.6\n-58,155,147,571.3\n4,972,393,683.8\n19,862,462,930.3\nMar\n19,250,549.6\n51,536.9\n19,302,086.5\n9,195,358,421.1\n4,533,773,830.7\n1,526,717,809.9\n15,255,850,061.7\n90,044,360,951.9\n-84,000,619,820.0\n9,749,941,961.2\n31,068,835,241.3\n*Apr\n8,887.1\n8,869.0\n17,756.1\n120,247.2\n115,530.6\n453,456.0\n689,233.9\n44,975,041.8\n-42,225,068.3\n57,592,832.1\n61,049,795.5\n*May\n19,808.8\n33,407.0\n53,215.8\n339,908.2\n335,165.2\n545,425.1\n1,220,498.6\n44,143,551.7\n-41,811,854.2\n57,707,647.4\n61,313,059.2\n*Jun\n23,708.6\n36,736.9\n60,445.4\n140,282.6\n143,630.0\n489,533.5\n773,446.0\n45,016,921.9\n-42,544,461.2\n59,775,710.3\n63,082,062.5\n*Jul\n45,566.8\n20,189.6\n65,756.3\n265,497.1\n268,905.2\n302,389.6\n836,791.9\n44,810,986.8\n-41,896,670.1\n58,234,641.8\n62,051,506.7\n*Aug\n48,680.7\n26,788.3\n75,469.0\n64,319.2\n67,746.5\n306,819.8\n438,885.6\n44,862,835.4\n-42,064,205.7\n59,288,880.5\n62,601,864.7\n*Sep\n54,805.1\n33,560.8\n88,365.9\n343,222.9\n349,384.1\n399,996.5\n1,092,603.5\n80,196,981.7\n-72,152,434.5\n98,189,475.3\n107,414,992.0\n*Oct\n118,356.4\n35,332.7\n153,689.1\n519,267.8\n526,449.1\n453,606.9\n1,499,323.8\n90,905,108.4\n-82,948,584.1\n119,889,986.1\n129,499,523.3\n*Nov\n136,953.1\n35,334.5\n172,287.6\n354,105.9\n360,474.4\n1,838,430.3\n2,553,010.7\n79,915,808.8\n-75,838,929.4\n114,359,632.6\n121,161,810.3\n*Dec\n146,539.1\n35,334.4\n181,873.4\n146,658.9\n153,183.4\n2,042,710.7\n2,342,553.0\n80,151,654.5\n-74,095,736.3\n112,826,247.4\n121,406,592.0\n2025\n*Jan\n154,446.1\n35,336.5\n189,782.7\n272,929.2\n279,596.8\n319,224.8\n871,750.8\n82,164,295.4\n-40,716,687.7\n81,474,666.0\n123,983,807.2\n*Feb\n160,666.3\n35,337.0\n196,003.2\n90,543.3\n97,260.5\n547,224.8\n735,028.6\n83,118,587.6\n-38,350,823.5\n80,780,457.4\n126,479,253.3\n*Mar\n168,846.5\n35,337.5\n204,184.0\n543,678.8\n550,528.1\n606,054.1\n1,700,260.9\n84,209,657.3\n-37,337,007.5\n81,624,077.5\n130,401,172.2\nSource: Reserve Bank of Zimbabwe, 2025\n*Bond coins first issued in December 2014\n* Bond Notes issued on 28 November 2016\n*Statistics are denominated in ZiG\nZWG Thousands\nDeposits\n34 \n \n \nForeign\nTOTAL\nEnd of\nNotes\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nOther \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nGovernemt\nOther2\nGovernment\nLocal \nPublic \n Institutional \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nGovernment\nEnterprises\nUnits\nAssets\n2021\nJan\n1,483.3\n \n42,733.9\n \n77,994.4\n \n13,109.2\n \n40,071.8\n \n10,922.0\n10,322.7\n10.2\n0.0\n212.4\n16.7\n18.0\n1,264.3\n77,984.0\n5,315.2\n25,036.2\n15,951.2\n41,028.5\n363,474.0\nFeb\n1,735.4\n \n41,180.7\n \n76,140.3\n \n17,748.1\n \n39,141.4\n \n6,341.4\n15,612.1\n9.2\n0.0\n238.0\n24.1\n22.7\n1,493.7\n84,845.3\n5,413.6\n28,339.2\n19,441.2\n42,761.3\n380,487.7\nMar\n1,457.1\n \n40,953.3\n \n83,032.1\n \n6,945.5\n \n42,516.8\n \n8,733.6\n17,602.7\n8.4\n19.2\n449.7\n15.2\n21.7\n1,400.3\n90,291.7\n4,912.2\n32,908.1\n22,849.5\n40,104.9\n394,221.9\nApr\n1,699.7\n \n40,964.4\n \n85,330.2\n \n6,844.8\n \n49,733.4\n \n7,679.0\n19,384.3\n7.7\n19.2\n571.8\n19.9\n12.7\n1,336.7\n104,118.1\n5,432.6\n34,537.9\n25,207.8\n41,034.6\n423,934.8\nMay\n1,906.1\n \n30,579.1\n \n94,330.9\n \n7,907.2\n \n63,644.8\n \n11,582.4\n19,197.1\n7.0\n152.7\n611.0\n21.8\n16.6\n1,263.7\n111,185.7\n5,063.0\n35,592.3\n24,975.4\n40,256.6\n448,293.6\nJun\n1,702.8\n \n30,255.6\n \n75,795.2\n \n25,605.9\n \n72,780.6\n \n17,601.3\n17,610.8\n6.5\n19.5\n1,385.2\n17.9\n77.8\n1,511.9\n125,592.3\n5,203.8\n26,856.5\n29,616.4\n42,418.7\n474,058.5\nJul\n2,139.9\n \n30,509.1\n \n104,983.5\n \n17,817.9\n \n82,032.9\n \n25,314.3\n23,160.6\n6.0\n290.8\n1,264.1\n17.3\n67.8\n1,351.1\n135,107.8\n5,762.2\n26,869.2\n33,897.2\n42,726.7\n533,318.3\nAug\n2,551.1\n \n33,323.4\n \n93,806.9\n \n11,919.2\n \n72,753.9\n \n25,194.9\n35,371.1\n5.4\n339.7\n1,111.2\n22.5\n63.9\n1,583.3\n150,558.7\n7,014.2\n32,281.1\n34,820.2\n46,819.4\n549,540.1\nSep\n2,853.7\n \n38,500.1\n \n100,996.0\n \n8,626.8\n \n68,707.9\n \n25,023.4\n36,196.3\n5.1\n366.9\n948.5\n21.1\n62.5\n1,531.1\n154,818.9\n6,587.8\n31,981.0\n35,461.8\n45,544.7\n558,233.5\nOct\n2,611.1\n \n50,074.7\n \n108,009.2\n \n9,575.8\n \n89,822.4\n \n26,924.2\n43,786.5\n4.3\n188.1\n1,054.2\n21.2\n75.4\n1,683.9\n172,358.5\n6,987.7\n49,581.0\n47,370.6\n47,611.9\n657,740.6\nNov\n2,721.5\n \n53,424.3\n \n107,781.7\n \n15,560.6\n \n74,072.3\n \n29,748.5\n47,418.1\n3.7\n187.0\n2,678.7\n21.2\n74.8\n1,882.5\n195,765.6\n7,682.2\n52,327.7\n45,567.2\n54,967.5\n691,885.0\nDec\n2,838.3\n \n50,031.0\n \n118,451.3\n \n13,654.0\n \n91,352.6\n \n33,690.9\n41,452.1\n3.0\n186.0\n6,192.4\n21.1\n167.5\n2,998.6\n212,438.0\n14,917.3\n60,917.0\n48,759.9\n71,817.7\n769,888.8\n2022\nJan\n2,891.2\n \n53,378.3\n \n116,654.8\n \n13,232.3\n \n69,668.2\n \n30,774.3\n40,241.6\n2.4\n186.8\n2,906.7\n20.3\n163.0\n4,023.2\n228,616.6\n16,284.0\n53,627.8\n55,303.6\n85,737.0\n773,712.0\nFeb\n2,577.7\n \n62,064.5\n \n122,479.8\n \n17,480.5\n \n76,802.2\n \n28,703.5\n49,241.8\n1.6\n0.0\n3,242.5\n20.3\n158.1\n5,761.9\n249,205.9\n16,681.8\n55,099.6\n59,171.4\n86,732.0\n835,425.0\nMar\n2,111.5\n \n76,544.2\n \n142,962.5\n \n19,239.6\n \n87,884.5\n \n43,284.1\n50,566.9\n0.9\n0.0\n2,970.2\n19.4\n253.4\n6,635.8\n296,282.4\n16,435.1\n65,660.6\n69,287.0\n94,293.1\n974,431.2\nApr\n2,624.9\n \n74,716.9\n \n160,466.5\n \n28,352.1\n \n123,190.3\n \n26,628.8\n63,944.8\n0.2\n0.0\n2,583.9\n37.5\n252.4\n7,258.1\n338,207.2\n30,154.8\n53,372.3\n73,993.0\n90,352.8\n1,076,136.5\nMay\n3,155.9\n \n142,118.9\n \n236,166.0\n \n35,928.9\n \n207,812.8\n \n61,757.6\n70,936.8\n0.0\n155.0\n3,762.8\n41.3\n289.0\n16,588.0\n455,287.9\n36,125.5\n134,993.5\n111,577.7\n130,617.1\n1,647,314.7\nJun\n2,801.2\n \n138,347.1\n \n266,691.8\n \n45,952.0\n \n241,920.1\n \n63,631.8\n86,890.0\n0.0\n654.0\n5,297.4\n61.2\n226.3\n14,282.6\n549,799.2\n38,578.3\n169,511.8\n130,604.3\n205,601.3\n1,960,850.3\nJul\n2,427.6\n \n159,024.6\n \n315,832.5\n \n39,388.2\n \n230,432.5\n \n41,246.8\n91,509.2\n0.0\n394.3\n4,940.5\n100.7\n349.7\n22,911.0\n638,556.7\n45,361.4\n144,090.2\n143,606.3\n242,024.6\n2,122,196.7\nAug\n2,640.6\n \n263,637.4\n \n411,439.9\n \n69,203.5\n \n311,107.0\n \n29,186.6\n100,187.1\n0.0\n330.1\n6,912.2\n113.5\n287.1\n46,504.1\n764,466.3\n46,788.2\n167,029.4\n251,442.9\n244,934.2\n2,716,210.1\nSep\n3,030.7\n \n289,230.8\n \n504,071.1\n \n75,446.7\n \n417,007.1\n \n18,185.0\n143,464.9\n0.0\n267.4\n8,265.9\n115.1\n306.3\n41,560.9\n902,078.3\n51,664.5\n146,133.1\n231,760.0\n285,781.8\n3,118,369.8\nOct\n3,022.6\n \n300,240.3\n \n525,870.3\n \n104,483.2\n \n389,979.7\n \n22,895.3\n151,757.7\n0.0\n204.7\n4,590.6\n116.5\n342.0\n43,335.5\n936,397.1\n58,632.8\n165,306.9\n267,183.8\n298,996.3\n3,273,355.4\nNov\n3,251.4\n \n286,365.2\n \n575,885.7\n \n111,716.1\n \n342,790.1\n \n17,089.0\n198,814.4\n0.0\n142.0\n6,078.2\n119.5\n303.6\n43,195.4\n1,042,144.5\n73,069.8\n170,944.8\n232,107.1\n302,373.7\n3,406,390.5\nDec\n3,361.7\n \n295,435.1\n \n652,284.4\n \n119,932.8\n \n351,906.8\n \n7,965.4\n288,844.0\n0.0\n20,072.7\n8,831.7\n114.4\n282.6\n30,272.3\n1,143,910.8\n84,048.5\n159,126.2\n234,748.7\n418,944.7\n3,820,082.5\n2023\nJan\n4,923.3\n \n379,841.7\n \n704,168.6\n \n151,980.1\n \n389,342.8\n \n-1,443.6\n319,807.4\n0.0\n23,774.5\n8,624.7\n228.5\n251.2\n44,113.2\n1,348,919.7\n137,477.6\n227,545.4\n251,246.0\n451,149.8\n4,441,950.8\nFeb\n1,880.1\n \n436,062.8\n \n743,888.5\n \n81,067.5\n \n518,081.0\n \n21,964.4\n332,626.9\n0.0\n26,717.2\n6,974.7\n319.0\n197.4\n44,691.5\n1,538,078.6\n142,383.8\n226,933.0\n281,339.4\n490,831.3\n4,894,037.1\nMar\n2,031.6\n \n425,326.5\n \n817,631.1\n \n112,374.3\n \n531,935.4\n \n41,928.7\n360,626.2\n0.0\n24,689.0\n10,382.7\n432.2\n149.8\n48,725.4\n1,745,783.1\n166,893.5\n554,840.9\n315,882.3\n532,130.1\n5,691,762.4\nApr\n1,844.7\n \n462,081.4\n \n972,122.7\n \n161,740.7\n \n620,095.0\n \n32,207.0\n391,587.8\n0.0\n28,119.0\n19,573.0\n559.8\n99.3\n54,058.4\n1,822,350.9\n178,895.0\n214,270.9\n411,870.0\n572,012.3\n5,943,487.7\nMay\n1,107.2\n \n1,048,116.4\n \n2,049,066.1\n \n309,234.1\n \n1,554,969.0\n \n84,147.3\n653,025.9\n0.0\n76,351.5\n16,564.4\n4,599.1\n80.3\n112,188.1\n4,068,894.1\n366,505.1\n607,438.1\n788,546.8\n884,349.9\n12,625,183.4\nJun\n1,984.5\n \n2,249,201.6\n \n4,424,350.0\n \n471,360.3\n \n3,050,984.1\n \n390,369.2\n981,773.8\n0.0\n212,126.8\n8,070.8\n18,582.4\n83.0\n260,946.3\n8,977,244.2\n669,100.1\n1,390,786.2\n1,582,985.5\n2,782,639.3\n27,472,588.1\nJul\n1,489.0\n \n1,584,403.3\n \n4,137,377.2\n \n380,493.0\n \n3,132,849.9\n \n369,552.6\n1,242,045.2\n0.0\n165,764.7\n17,713.9\n7,368.1\n68.1\n208,253.7\n7,144,225.5\n821,517.0\n829,382.3\n1,411,037.1\n3,124,457.4\n24,577,997.9\nAug\n2,292.1\n \n1,505,916.2\n \n4,651,358.8\n \n448,025.8\n \n3,179,274.3\n \n245,546.0\n1,190,599.0\n0.0\n165,103.2\n7,939.8\n7,469.9\n75.8\n205,341.5\n7,142,066.9\n817,682.7\n701,626.2\n1,348,230.8\n3,086,091.3\n24,704,640.2\nSep\n2,465.6\n \n2,015,621.6\n \n5,263,338.5\n \n560,033.8\n \n3,210,332.7\n \n305,649.1\n1,318,582.7\n0.0\n175,013.5\n10,773.5\n9,935.8\n92.0\n219,878.9\n8,628,418.0\n892,737.1\n776,997.6\n1,646,406.8\n3,310,710.4\n28,346,987.7\nOct\n2,425.4\n \n2,312,575.1\n \n5,910,277.9\n \n751,077.6\n \n2,663,186.5\n \n240,258.0\n1,272,839.7\n0.0\n190,359.3\n21,408.8\n10,816.8\n98.1\n237,525.7\n9,281,352.1\n844,462.4\n958,746.4\n1,741,207.9\n3,433,150.2\n29,871,767.9\nNov\n2,705.3\n \n2,558,589.3\n \n6,324,144.1\n \n730,377.0\n \n2,788,783.6\n \n230,917.5\n1,517,348.4\n0.0\n188,949.4\n34,470.7\n10,921.4\n59.8\n238,702.3\n9,523,818.5\n907,759.0\n1,046,257.0\n2,150,227.0\n3,544,388.6\n31,798,418.9\nDec\n3,398.4\n \n2,868,505.6\n \n5,973,706.9\n \n918,524.5\n \n2,631,445.7\n \n212,294.5\n2,627,512.6\n0.0\n182,480.9\n38,249.3\n12,325.3\n73.5\n248,699.8\n10,110,961.4\n984,502.1\n1,184,706.9\n2,319,603.9\n4,087,896.6\n34,404,887.7\n2024\nJan\n2,947.9\n \n5,196,670.6\n \n9,096,074.6\n \n1,414,527.9\n \n3,957,664.6\n \n326,220.5\n4,283,761.8\n0.0\n306,771.2\n57,595.6\n17,912.4\n198.8\n374,088.3\n16,298,021.8\n1,109,251.7\n1,949,662.4\n3,467,246.2\n5,133,753.8\n52,992,370.2\nFeb\n3,143.6\n \n7,309,077.0\n \n12,595,037.9\n \n2,395,225.7\n \n5,340,576.7\n \n178,130.4\n6,381,641.8\n0.0\n437,989.9\n78,292.7\n26,073.1\n232.0\n488,602.8\n24,095,690.3\n1,538,423.6\n2,608,075.1\n4,122,833.9\n6,863,317.4\n74,462,363.7\nMar\n2,831.0\n \n9,785,505.6\n \n16,734,744.0\n \n3,185,636.7\n \n7,548,560.1\n \n775,336.9\n8,605,206.6\n0.0\n585,769.6\n126,026.3\n47,609.3\n143.3\n729,484.9\n37,149,745.6\n2,535,252.5\n2,860,196.6\n5,844,376.9\n10,808,889.0\n107,325,315.0\n*Apr\n7.5\n \n4,794.8\n \n11,004.0\n \n2,108.7\n \n5,798.1\n \n354.3\n5,583.2\n0.0\n348.4\n37.2\n330.0\n1.8\n440.5\n22,799.4\n1,336.2\n2,510.2\n6,102.7\n5,490.3\n69,047.3\n*May\n15.0\n \n4,337.6\n \n12,420.7\n \n2,281.4\n \n6,437.2\n \n492.4\n5,867.7\n0.0\n339.6\n23.7\n49.4\n1.4\n433.4\n23,728.2\n1,520.6\n2,114.7\n7,240.8\n5,731.5\n73,035.2\n*Jun\n9.2\n \n4,753.1\n \n12,746.0\n \n2,349.5\n \n6,493.3\n \n409.0\n6,309.9\n0.0\n282.9\n32.6\n45.1\n1.5\n446.4\n25,292.4\n1,628.6\n2,541.3\n7,612.6\n6,871.1\n77,824.6\n*Jul\n7.5\n \n5,739.9\n \n11,453.3\n \n1,987.0\n \n6,135.6\n \n451.2\n7,706.6\n0.0\n276.2\n128.4\n45.6\n0.2\n432.4\n26,513.1\n2,454.9\n2,342.9\n8,065.1\n7,708.4\n81,448.2\n*Aug\n6.4\n \n6,444.9\n \n13,516.2\n \n2,310.5\n \n4,922.1\n \n205.9\n6,955.1\n0.0\n246.2\n100.5\n146.7\n0.2\n388.0\n27,463.6\n2,511.4\n2,767.9\n9,021.7\n8,363.7\n85,371.0\n*Sep\n7.9\n \n10,895.9\n \n22,399.7\n \n3,870.6\n \n8,728.6\n \n340.5\n10,929.4\n0.0\n431.0\n34.5\n281.9\n0.3\n610.8\n46,961.9\n3,924.3\n4,853.4\n13,635.1\n12,318.0\n140,223.9\n*Oct\n56.7\n \n13,662.1\n \n30,414.7\n \n5,068.5\n \n8,024.4\n \n129.1\n12,091.8\n0.0\n502.2\n53.5\n281.7\n0.1\n689.5\n54,229.9\n4,447.2\n6,380.1\n13,935.9\n13,802.2\n163,769.6\n*Nov\n72.6\n \n11,233.7\n \n29,835.6\n \n4,498.6\n \n6,365.0\n \n117.3\n10,509.5\n0.0\n367.6\n185.0\n2,660.3\n0.1\n582.5\n49,728.9\n4,261.8\n6,685.9\n14,193.4\n13,503.2\n154,800.9\n*Dec\n82.6\n \n10,274.6\n \n32,110.0\n \n5,538.7\n \n8,540.2\n \n287.6\n11,621.4\n0.0\n361.0\n79.0\n90.3\n0.6\n559.5\n51,561.9\n4,324.4\n6,555.3\n16,212.6\n14,183.7\n162,383.2\n2025\nJan\n86.3\n \n12,729.4\n \n32,300.6\n \n5,224.8\n \n6,088.6\n \n371.4\n11,371.4\n0.0\n352.9\n56.4\n91.6\n10.0\n612.5\n53,737.7\n3,262.0\n6,541.2\n14,514.4\n15,912.7\n163,264.0\nFeb\n92.8\n \n11,621.9\n \n31,847.5\n \n4,434.0\n \n8,274.5\n \n537.1\n10,816.7\n0.0\n292.4\n67.3\n92.3\n18.9\n782.9\n53,441.0\n3,997.8\n6,813.5\n12,600.8\n15,813.2\n161,544.6\nMar\n98.3\n \n9,274.8\n \n33,387.0\n \n3,734.6\n \n12,264.7\n \n786.3\n11,771.3\n0.0\n284.5\n83.9\n189.2\n21.8\n750.6\n55,066.8\n4,537.6\n7,656.7\n11,501.0\n16,477.1\n167,886.3\nSource:Reserve Bank of Zimbabwe, 2025\nNotes\n1.Government securities includes treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households and other financial corporations.\n*Statistics are denominated in ZiG\nDebt Securities\nLoans and Advances\nPublic \nEnterprises\nTABLE 5.1: OTHER DEPOSITORY CORPORATIONS -ASSETS\nZWG millions\n35 \n \n \nForeign Liabilities\nCapital\nContigent\nOther\nTOTAL\nand\nLiablities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository Government \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2021\nJan\n188,337.3\n17,667.3\n11,376.7\n217,381.3\n2,730.8\n5,453.7\n225,565.8\n1,422.4\n15,750.7\n391.1\n600.9\n376.7\n58,123.9\n25,036.2\n36,206.3\n363,474.0\nFeb\n189,154.3\n18,991.1\n14,072.8\n222,218.2\n2,959.1\n4,788.2\n229,965.5\n1,457.4\n15,908.6\n409.2\n581.4\n609.9\n63,583.8\n28,339.2\n39,632.7\n380,487.7\nMar\n193,674.2\n21,569.9\n14,209.4\n229,453.4\n4,691.2\n4,875.8\n239,020.5\n1,641.2\n14,997.2\n75.4\n1,378.2\n408.9\n67,061.8\n32,908.1\n36,730.7\n394,221.9\nApr\n219,936.5\n23,818.3\n13,746.7\n257,501.5\n2,725.1\n5,382.5\n265,609.2\n1,503.8\n15,748.4\n176.5\n939.0\n409.9\n68,812.8\n34,537.9\n36,197.4\n423,934.8\nMay\n232,585.8\n26,296.1\n18,415.5\n277,297.4\n2,205.9\n6,832.6\n286,335.9\n1,525.8\n16,063.1\n654.2\n540.1\n429.0\n69,567.0\n35,592.3\n37,586.2\n448,293.6\nJun\n249,167.5\n27,977.7\n21,449.6\n298,594.8\n2,906.1\n6,295.3\n307,796.2\n1,559.7\n15,430.6\n662.3\n939.0\n462.6\n72,403.8\n26,856.5\n47,947.9\n474,058.5\nJul\n271,359.4\n31,671.3\n23,074.4\n326,105.1\n3,016.7\n5,050.7\n334,172.4\n1,523.2\n16,041.4\n706.9\n750.8\n552.8\n76,406.3\n26,869.2\n76,295.4\n533,318.3\nAug\n275,007.8\n29,893.2\n29,352.2\n334,253.2\n3,661.5\n5,912.2\n343,826.8\n1,873.1\n18,699.5\n1,444.4\n2,300.1\n478.6\n82,627.2\n32,281.1\n66,009.2\n549,540.1\nSep\n301,829.4\n30,564.7\n26,426.5\n358,820.7\n3,719.1\n3,512.9\n366,052.6\n3,191.9\n16,236.1\n1,453.1\n71.3\n375.4\n84,564.6\n31,981.0\n54,307.5\n558,233.5\nOct\n350,366.7\n33,145.0\n27,967.9\n411,479.6\n2,824.1\n3,162.8\n417,466.5\n3,729.7\n21,509.9\n1,095.3\n1,109.9\n503.1\n92,871.8\n49,581.0\n69,873.5\n657,740.6\nNov\n363,455.0\n33,905.6\n33,256.8\n430,617.4\n3,325.7\n2,899.2\n436,842.3\n4,007.8\n19,465.9\n2,726.5\n1,556.1\n347.1\n104,310.9\n52,327.7\n70,300.6\n691,885.0\nDec\n396,412.5\n33,935.5\n37,464.8\n467,812.7\n3,922.1\n4,020.7\n475,755.5\n3,696.3\n23,643.2\n2,808.1\n2,405.3\n139.8\n128,421.4\n60,917.0\n72,102.3\n769,888.8\n2022\nJan\n392,702.2\n32,298.0\n39,346.3\n464,346.5\n2,962.5\n4,027.0\n471,336.0\n3,685.3\n25,398.5\n2,688.6\n1,416.9\n230.5\n144,852.4\n53,627.8\n70,476.0\n773,712.0\nFeb\n413,978.3\n37,494.3\n47,592.5\n499,065.1\n3,229.3\n4,407.7\n506,702.1\n4,456.2\n30,483.6\n2,120.4\n1,769.7\n226.8\n153,788.5\n55,099.6\n80,778.2\n835,425.0\nMar\n488,137.1\n37,893.9\n54,213.9\n580,244.9\n3,062.2\n5,330.5\n588,637.7\n4,510.9\n33,995.7\n2,137.9\n3,281.0\n810.6\n175,156.3\n65,660.6\n100,240.6\n974,431.2\nApr\n562,613.7\n46,129.7\n52,760.1\n661,503.5\n6,377.5\n7,656.8\n675,537.9\n4,246.9\n38,472.7\n2,173.0\n3,877.2\n486.8\n178,614.3\n53,372.3\n119,355.4\n1,076,136.5\nMay\n830,166.0\n61,112.6\n70,113.9\n961,392.5\n7,310.9\n7,417.6\n976,120.9\n6,165.3\n73,411.8\n2,383.3\n3,241.0\n321.8\n243,544.4\n134,993.5\n207,132.5\n1,647,314.7\nJun\n961,316.9\n66,716.9\n81,118.5\n1,109,152.4\n5,627.3\n10,226.2\n1,125,005.9\n7,157.9\n83,048.1\n2,898.5\n4,589.8\n345.2\n355,060.9\n169,511.8\n213,232.2\n1,960,850.3\nJul\n1,016,820.2\n79,550.5\n94,495.2\n1,190,865.8\n1,789.6\n9,363.5\n1,202,018.9\n8,137.9\n100,313.8\n2,814.9\n5,020.5\n1,339.1\n419,883.3\n144,090.2\n238,578.1\n2,122,196.7\nAug\n1,367,431.3\n85,931.5\n134,512.9\n1,587,875.7\n2,415.4\n7,892.4\n1,598,183.5\n12,785.6\n119,851.6\n3,230.7\n5,771.2\n555.2\n491,336.5\n167,029.4\n317,466.4\n2,716,210.1\nSep\n1,648,027.7\n92,678.5\n157,504.6\n1,898,210.8\n1,482.9\n8,707.2\n1,908,401.0\n14,047.5\n143,842.3\n3,720.2\n9,246.7\n587.2\n553,942.2\n146,133.1\n338,449.6\n3,118,369.8\nOct\n1,615,381.5\n76,774.2\n166,880.7\n1,859,036.4\n2,028.0\n6,673.7\n1,867,738.0\n15,558.9\n153,649.9\n28,072.2\n8,610.3\n762.5\n581,740.3\n165,306.9\n451,916.4\n3,273,355.4\nNov\n1,771,644.8\n81,518.1\n189,465.9\n2,042,628.9\n1,547.6\n6,731.4\n2,050,907.9\n13,438.5\n139,370.8\n19,973.5\n10,489.1\n339.6\n612,977.2\n170,944.8\n387,949.1\n3,406,390.5\nDec\n1,990,867.6\n90,317.0\n234,004.4\n2,315,189.0\n2,754.1\n7,866.7\n2,325,809.8\n14,149.0\n177,214.1\n10,597.8\n15,234.4\n752.5\n750,161.5\n159,126.2\n367,037.4\n3,820,082.5\n2023\nJan\n2,270,946.6\n100,094.1\n275,805.1\n2,646,845.8\n1,676.5\n41,821.3\n2,690,343.7\n15,056.5\n196,129.5\n4,974.3\n12,291.7\n675.5\n881,874.7\n227,545.4\n413,059.5\n4,441,950.8\nFeb\n2,496,192.1\n98,177.2\n294,332.5\n2,888,701.8\n1,956.9\n11,040.2\n2,901,698.9\n15,711.7\n225,209.4\n8,092.9\n20,822.5\n3,109.0\n951,831.6\n226,933.0\n540,628.1\n4,894,037.1\nMar\n2,710,394.6\n121,937.7\n333,589.3\n3,165,921.6\n1,430.8\n6,188.7\n3,173,541.1\n16,082.6\n256,206.0\n9,639.9\n22,996.8\n3,714.6\n1,036,325.4\n554,840.9\n618,415.2\n5,691,762.4\nApr\n3,144,048.4\n159,872.5\n269,932.0\n3,573,852.9\n573.4\n9,702.2\n3,584,128.5\n1,843.4\n318,092.2\n13,321.9\n29,787.9\n6,418.8\n1,137,637.3\n214,270.9\n637,986.8\n5,943,487.7\nMay\n6,481,742.5\n169,496.7\n556,927.2\n7,208,166.4\n1,068.6\n50,511.7\n7,259,746.7\n4,659.4\n783,531.0\n78,332.6\n74,083.0\n30,583.3\n2,224,856.6\n607,438.1\n1,561,952.6\n12,625,183.4\nJun\n12,937,869.2\n240,252.2\n1,073,317.8\n14,251,439.2\n4,578.8\n432,610.2\n14,688,628.1\n4,243.6\n1,833,341.2\n39,166.6\n112,338.9\n64,321.9\n6,245,056.0\n1,390,786.2\n3,094,705.7\n27,472,588.1\nJul\n11,864,787.9\n285,723.5\n828,095.7\n12,978,607.1\n30,380.7\n380,435.8\n13,389,423.7\n2,137.4\n1,458,906.6\n87,827.2\n160,696.4\n58,256.2\n5,865,068.7\n829,382.3\n2,726,299.5\n24,577,997.9\nAug\n12,168,928.8\n353,674.2\n862,852.8\n13,385,455.8\n23,457.8\n381,525.5\n13,790,439.1\n3,182.7\n1,483,108.2\n84,841.4\n154,160.3\n56,751.6\n5,646,934.2\n701,626.2\n2,783,596.5\n24,704,640.2\nSep\n14,342,241.3\n404,040.4\n947,184.1\n15,693,465.8\n11,309.1\n114,502.6\n15,819,277.6\n2,685.5\n1,688,992.2\n82,493.4\n168,880.8\n90,032.4\n6,410,594.6\n776,997.6\n3,307,033.6\n28,346,987.7\nOct\n15,103,817.1\n439,336.7\n1,190,702.7\n16,733,856.4\n8,575.8\n147,053.3\n16,889,485.5\n3,497.2\n1,573,857.1\n84,628.9\n176,455.5\n83,441.8\n6,756,087.7\n958,746.4\n3,345,567.7\n29,871,767.9\nNov\n15,816,643.6\n534,621.6\n1,241,055.7\n17,592,320.9\n92,509.4\n133,475.4\n17,818,305.6\n4,173.2\n1,784,153.1\n92,939.9\n244,115.1\n89,997.7\n7,059,070.8\n1,046,257.0\n3,659,406.4\n31,798,418.9\nDec\n16,937,697.1\n613,283.2\n1,290,630.5\n18,841,610.7\n94,004.9\n201,484.9\n19,137,100.5\n42,811.4\n1,831,385.7\n55,157.4\n162,437.9\n138,722.6\n7,736,287.7\n1,184,706.9\n4,116,277.7\n34,404,887.7\n2024\nJan\n26,686,959.6\n746,212.0\n1,754,255.7\n29,187,427.3\n113,265.9\n169,629.6\n29,470,322.8\n7,317.9\n3,007,687.4\n114,298.0\n290,202.8\n182,727.0\n11,623,761.9\n1,949,662.4\n6,346,389.9\n52,992,370.2\nFeb\n36,944,811.1\n818,341.2\n2,810,669.8\n40,573,822.1\n177,789.1\n340,577.8\n41,092,189.0\n9,458.4\n4,421,333.7\n105,237.1\n454,842.1\n279,727.9\n16,146,119.3\n2,608,075.1\n9,345,381.2\n74,462,363.7\nMar\n53,801,105.7\n857,520.8\n4,468,346.0\n59,126,972.5\n275,444.0\n515,567.0\n59,917,983.5\n6,990.9\n6,535,789.0\n95,705.0\n506,746.6\n361,061.7\n24,968,710.0\n2,860,196.6\n12,072,131.8\n107,325,315.0\n*Apr\n35,042.5\n873.5\n2,711.3\n38,627.3\n161.4\n242.9\n39,031.6\n2.8\n4,126.0\n67.4\n358.1\n222.7\n12,859.8\n2,510.2\n9,868.8\n69,047.3\n*May\n36,571.3\n797.4\n3,283.3\n40,652.0\n82.8\n350.0\n41,084.8\n4.4\n4,422.7\n50.9\n436.0\n4.6\n15,110.7\n2,114.7\n9,806.4\n73,035.2\n*Jun\n37,665.2\n1,045.3\n3,824.5\n42,535.1\n2.1\n589.3\n43,126.4\n4.0\n4,813.9\n99.8\n450.6\n13.2\n17,940.3\n2,541.3\n8,835.0\n77,824.6\n*Jul\n40,332.2\n1,410.3\n3,894.3\n45,636.8\n68.7\n438.6\n46,144.1\n19.2\n4,842.5\n99.9\n483.0\n12.0\n18,795.9\n2,342.9\n8,708.8\n81,448.2\n*Aug\n40,849.7\n1,585.3\n3,882.8\n46,317.8\n65.6\n532.9\n46,916.3\n26.6\n4,889.9\n109.9\n602.1\n12.5\n20,035.9\n2,767.9\n10,009.9\n85,371.0\n*Sep\n66,835.5\n1,858.6\n5,872.5\n74,566.6\n99.2\n583.3\n75,249.0\n23.8\n8,701.5\n491.4\n860.8\n51.1\n34,201.4\n4,853.4\n15,791.4\n140,223.9\n*Oct\n76,868.7\n2,162.8\n7,903.0\n86,934.5\n257.1\n627.5\n87,819.1\n42.7\n9,987.1\n429.7\n1,310.2\n16.1\n39,650.6\n6,380.1\n18,134.0\n163,769.6\n*Nov\n72,575.6\n2,470.1\n7,734.9\n82,780.6\n202.6\n677.2\n83,660.4\n0.0\n8,441.5\n409.3\n568.8\n42.7\n38,968.8\n6,685.9\n16,023.6\n154,800.9\n*Dec\n76,723.8\n2,290.2\n8,197.9\n87,211.9\n205.6\n716.4\n88,133.9\n0.0\n9,510.9\n233.0\n856.2\n112.5\n39,782.4\n6,555.3\n17,199.0\n162,383.2\n2025\nJan\n75,644.1\n2,240.4\n8,868.0\n86,752.5\n212.0\n704.0\n87,668.5\n0.0\n10,544.5\n368.7\n848.5\n26.6\n38,868.3\n6,541.2\n18,397.6\n163,264.0\nFeb\n73,858.1\n2,512.3\n9,076.6\n85,447.0\n510.9\n936.4\n86,894.2\n0.0\n10,542.7\n536.9\n932.0\n17.4\n39,671.7\n6,813.5\n16,136.3\n161,544.6\nMar\n79,462.8\n2,908.2\n8,518.2\n90,889.2\n163.9\n905.2\n91,958.3\n0.0\n13,134.7\n546.5\n861.4\n16.4\n41,585.4\n7,656.7\n12,126.8\n167,886.3\nSource:Reserve Bank of Zimbabwe,2025\n*Statistics are denominated in ZiG\nTABLE 5.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nZWG millions\nDeposits\nAmounts Owing to\nDebt Securities\n36 \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nOther \nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment1 Local GovernemtPublic Enterprises\nOther2\nGovernment\nGovernment\nEnterprises\n Institutional Units3\nOther claims\nAssets\nOther Assets\nAssets\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks Non-residents\nSecurities\nsecurities\n2021\nJan\n1,237.43\n \n39,565.64\n \n71,463.64\n \n12,288.89\n \n39,092.85\n \n10,921.99\n \n8,281.80\n \n-\n \n-\n \n1.18\n \n16.67\n \n18.01\n \n1,264.28\n \n71,090.96\n \n718.83\n \n25,036.22\n \n12,333.21\n \n32,123.11\n \n325,454.7\n \nFeb\n1,320.27\n \n38,100.03\n \n69,341.48\n \n16,867.76\n \n38,108.83\n \n6,341.39\n \n12,518.15\n \n-\n \n-\n \n1.26\n \n24.15\n \n22.69\n \n1,493.66\n \n77,324.34\n \n774.89\n \n28,339.17\n \n15,953.14\n \n33,612.14\n \n340,143.4\n \nMar\n1,244.16\n \n38,369.53\n \n76,479.44\n \n5,317.61\n \n41,401.24\n \n8,733.65\n \n15,889.61\n \n-\n \n19.21\n \n34.56\n \n15.17\n \n21.67\n \n1,309.75\n \n80,607.03\n \n878.97\n \n32,908.13\n \n19,302.34\n \n30,861.86\n \n353,393.9\n \nApr\n1,430.83\n \n38,008.89\n \n79,592.64\n \n5,639.40\n \n48,564.03\n \n7,679.05\n \n18,267.01\n \n-\n \n19.23\n \n62.89\n \n19.86\n \n12.71\n \n1,336.70\n \n91,062.16\n \n956.75\n \n34,537.88\n \n21,214.88\n \n32,383.77\n \n380,788.7\n \nMay\n1,648.09\n \n28,677.21\n \n87,611.51\n \n6,479.66\n \n59,745.10\n \n11,582.44\n \n18,846.75\n \n-\n \n152.75\n \n93.37\n \n21.77\n \n16.58\n \n1,263.75\n \n94,790.46\n \n990.41\n \n35,592.28\n \n21,398.95\n \n31,307.45\n \n400,218.5\n \nJun\n1,419.27\n \n28,452.53\n \n69,413.26\n \n24,215.35\n \n70,835.98\n \n17,601.31\n \n17,152.75\n \n-\n \n19.46\n \n92.91\n \n17.91\n \n77.79\n \n1,511.86\n \n106,954.15\n \n1,247.08\n \n26,856.45\n \n26,444.57\n \n33,288.94\n \n425,601.6\n \nJul\n1,794.72\n \n29,100.73\n \n97,429.50\n \n15,901.02\n \n79,937.02\n \n25,314.30\n \n21,665.10\n \n-\n \n290.76\n \n47.39\n \n17.32\n \n67.80\n \n1,351.13\n \n117,348.16\n \n1,301.18\n \n26,869.18\n \n29,079.64\n \n33,587.68\n \n481,102.6\n \nAug\n2,137.72\n \n31,734.84\n \n85,441.98\n \n9,099.10\n \n70,391.64\n \n25,194.95\n \n31,434.20\n \n-\n \n339.72\n \n51.28\n \n22.49\n \n63.94\n \n1,583.28\n \n132,522.63\n \n1,337.19\n \n32,281.12\n \n30,022.43\n \n37,697.05\n \n491,355.6\n \nSep\n2,417.81\n \n36,259.54\n \n93,032.71\n \n6,164.78\n \n66,640.78\n \n25,023.38\n \n31,460.81\n \n-\n \n366.88\n \n57.60\n \n21.07\n \n62.45\n \n1,531.08\n \n134,780.92\n \n1,342.62\n \n31,980.97\n \n30,439.34\n \n34,630.85\n \n496,213.6\n \nOct\n1,993.06\n \n47,379.62\n \n99,470.02\n \n7,339.71\n \n86,302.62\n \n26,924.18\n \n37,639.16\n \n-\n \n188.07\n \n121.59\n \n21.20\n \n75.41\n \n1,683.89\n \n149,477.36\n \n1,523.34\n \n49,580.96\n \n40,853.06\n \n36,664.31\n \n587,237.6\n \nNov\n2,168.80\n \n49,327.15\n \n100,125.90\n \n12,723.73\n \n71,667.33\n \n29,748.47\n \n41,015.56\n \n-\n \n187.03\n \n999.12\n \n21.24\n \n74.76\n \n1,882.53\n \n168,661.25\n \n1,484.24\n \n52,327.68\n \n40,073.22\n \n43,878.52\n \n616,366.5\n \nDec\n2,315.32\n \n46,412.99\n \n109,803.84\n \n10,942.92\n \n87,347.07\n \n33,690.93\n \n38,610.29\n \n-\n \n185.99\n \n4,146.13\n \n21.09\n \n167.53\n \n2,798.61\n \n184,836.87\n \n3,368.75\n \n60,916.98\n \n41,811.67\n \n59,011.63\n \n686,388.6\n \n2022\nJan\n2,359.27\n \n49,206.02\n \n108,119.97\n \n10,419.90\n \n66,808.45\n \n30,774.31\n \n38,636.84\n \n-\n \n186.80\n \n801.50\n \n20.33\n \n163.02\n \n3,628.73\n \n199,495.34\n \n2,997.94\n \n53,627.76\n \n47,405.91\n \n69,989.80\n \n684,641.89\n \nFeb\n1,971.78\n \n57,553.54\n \n112,522.99\n \n14,300.66\n \n70,750.63\n \n28,703.53\n \n44,705.21\n \n-\n \n-\n \n976.55\n \n20.34\n \n158.06\n \n5,367.16\n \n215,520.37\n \n3,055.50\n \n55,099.61\n \n53,459.12\n \n70,832.47\n \n734,997.53\n \nMar\n1,541.49\n \n70,856.33\n \n130,423.48\n \n15,503.46\n \n82,662.70\n \n43,284.13\n \n44,874.23\n \n-\n \n-\n \n1,380.20\n \n19.40\n \n253.42\n \n6,240.94\n \n258,715.05\n \n3,092.69\n \n65,660.61\n \n58,874.69\n \n76,938.87\n \n860,321.67\n \nApr\n1,939.64\n \n70,204.43\n \n144,168.02\n \n23,452.88\n \n117,033.42\n \n26,628.79\n \n57,772.47\n \n-\n \n-\n \n722.54\n \n37.54\n \n252.44\n \n6,858.06\n \n305,476.79\n \n4,348.46\n \n53,372.28\n \n62,788.55\n \n71,414.75\n \n946,471.05\n \nMay\n2,397.94\n \n131,996.38\n \n211,837.59\n \n31,586.61\n \n190,366.81\n \n61,757.62\n \n64,373.91\n \n-\n \n154.99\n \n1,559.14\n \n41.28\n \n289.00\n \n16,193.81\n \n398,048.90\n \n4,712.74\n \n134,993.54\n \n94,851.60\n \n111,543.84\n \n1,456,705.70\n \nJun\n2,263.18\n \n127,839.16\n \n234,109.43\n \n40,937.28\n \n219,607.39\n \n63,631.76\n \n83,690.44\n \n-\n \n653.97\n \n2,159.12\n \n61.20\n \n226.29\n \n13,888.60\n \n478,163.38\n \n8,954.46\n \n169,511.81\n \n110,528.09\n \n168,440.54\n \n1,724,666.09\n \nJul\n1,578.47\n \n147,217.74\n \n284,912.89\n \n34,334.13\n \n202,815.28\n \n41,246.78\n \n86,971.63\n \n-\n \n394.34\n \n1,852.14\n \n100.65\n \n349.68\n \n22,516.21\n \n556,692.12\n \n9,737.92\n \n144,090.18\n \n129,869.55\n \n192,524.32\n \n1,857,204.02\n \nAug\n1,630.70\n \n247,190.46\n \n377,078.80\n \n64,650.96\n \n273,181.97\n \n29,186.59\n \n95,346.12\n \n-\n \n330.12\n \n3,556.96\n \n113.50\n \n287.14\n \n26,564.57\n \n681,253.30\n \n11,493.92\n \n167,029.36\n \n238,442.98\n \n194,745.11\n \n2,412,082.57\n \nSep\n1,791.71\n \n270,594.59\n \n465,301.31\n \n68,020.95\n \n370,323.69\n \n18,184.96\n \n134,414.53\n \n-\n \n267.40\n \n4,916.56\n \n115.11\n \n306.33\n \n21,773.50\n \n806,774.24\n \n12,680.89\n \n146,133.14\n \n215,417.68\n \n219,933.24\n \n2,756,949.83\n \nOct\n1,704.79\n \n281,204.64\n \n480,106.49\n \n94,573.08\n \n343,440.15\n \n22,895.35\n \n136,939.74\n \n - \n204.69\n \n2,201.55\n \n116.48\n \n341.96\n \n22,935.50\n \n852,069.39\n \n15,525.65\n \n165,306.91\n \n232,188.99\n \n245,924.22\n \n2,897,679.60\n \nNov\n1,644.95\n \n259,109.18\n \n533,438.97\n \n101,870.32\n \n299,715.01\n \n17,089.04\n \n180,534.44\n \n - \n141.97\n \n2,292.28\n \n119.53\n \n303.55\n \n22,178.73\n \n960,814.77\n \n15,450.39\n \n170,944.78\n \n196,338.19\n \n250,551.19\n \n3,012,537.30\n \nDec\n1,778.71\n \n263,863.65\n \n603,136.26\n \n110,935.77\n \n299,087.30\n \n7,965.37\n \n266,725.41\n \n - \n79.26\n \n3,887.78\n \n114.42\n \n282.61\n \n30,272.25\n \n1,066,654.12\n \n16,130.63\n \n159,126.16\n \n189,560.01\n \n344,235.10\n \n3,363,834.80\n \n2023\nJan\n2,391.61\n \n340,953.56\n \n654,740.29\n \n143,455.70\n \n335,380.17\n \n(1,443.59)\n \n301,026.07\n \n-\n \n105.97\n \n4,873.87\n \n228.45\n \n251.24\n \n44,113.17\n \n1,307,512.98\n \n17,767.70\n \n227,545.42\n \n204,830.78\n \n374,080.77\n \n3,957,814.16\n \nFeb\n1,470.56\n \n366,544.71\n \n691,937.49\n \n71,097.36\n \n452,795.43\n \n21,074.53\n \n306,913.92\n \n-\n \n50.02\n \n1,524.98\n \n318.96\n \n197.44\n \n44,691.50\n \n1,481,851.05\n \n18,037.18\n \n226,932.96\n \n224,983.29\n \n411,002.80\n \n4,321,424.21\n \nMar\n1,771.98\n \n344,570.46\n \n755,463.34\n \n103,284.07\n \n478,333.21\n \n41,928.66\n \n330,669.68\n \n-\n \n-\n \n3,884.11\n \n432.22\n \n149.78\n \n48,725.38\n \n1,679,284.89\n \n28,439.56\n \n554,840.85\n \n254,605.57\n \n438,790.17\n \n5,065,173.94\n \nApr\n1,631.24\n \n388,822.83\n \n903,029.49\n \n144,252.31\n \n555,886.92\n \n32,206.95\n \n361,846.09\n \n-\n \n-\n \n8,716.45\n \n559.82\n \n99.28\n \n54,058.39\n \n1,722,384.40\n \n28,899.91\n \n214,270.92\n \n321,765.39\n \n476,263.19\n \n5,214,693.59\n \nMay\n1,010.26\n \n907,818.70\n \n1,932,225.57\n \n281,052.93\n \n1,351,116.97\n \n84,147.32\n \n570,367.60\n \n-\n \n-\n \n8,974.78\n \n4,599.15\n \n80.34\n \n112,188.06\n \n3,844,133.80\n \n65,696.39\n \n607,438.10\n \n669,908.72\n \n758,154.17\n \n11,198,912.85\n \nJun\n1,762.11\n \n1,979,000.71\n \n4,218,755.04\n \n444,538.09\n \n2,584,596.63\n \n350,042.51\n \n865,465.55\n \n-\n \n-\n \n221.09\n \n10,133.46\n \n8,052.34\n \n260,946.26\n \n8,487,837.63\n \n92,224.26\n \n1,390,786.24\n \n1,304,228.92\n \n2,222,499.38\n \n24,221,090.21\n \nJul\n1,305.13\n \n1,428,604.02\n \n3,898,282.53\n \n359,151.15\n \n2,646,743.26\n \n337,541.82\n \n1,133,463.14\n \n-\n \n-\n \n153.30\n \n7,368.09\n \n68.07\n \n208,253.70\n \n6,917,007.30\n \n129,308.58\n \n829,382.28\n \n1,155,945.57\n \n2,438,538.20\n \n21,491,116.14\n \nAug\n1,664.09\n \n1,370,651.81\n \n4,309,693.74\n \n391,792.23\n \n2,693,989.06\n \n208,098.88\n \n1,084,784.90\n \n-\n \n-\n \n138.30\n \n7,469.95\n \n75.80\n \n205,341.47\n \n6,863,348.14\n \n127,816.16\n \n701,626.16\n \n1,081,800.09\n \n2,446,465.02\n \n21,494,755.81\n \nSep\n1,503.56\n \n1,763,364.33\n \n4,914,305.55\n \n517,813.92\n \n2,760,807.78\n \n247,094.60\n \n1,204,684.14\n \n-\n \n-\n \n9.75\n \n9,935.82\n \n92.05\n \n219,878.94\n \n8,245,053.80\n \n151,685.43\n \n776,997.57\n \n1,312,147.78\n \n2,668,520.81\n \n24,793,895.84\n \nOct\n1,977.18\n \n2,059,471.85\n \n5,625,069.70\n \n562,790.91\n \n2,202,475.21\n \n175,235.94\n \n1,172,130.22\n \n-\n \n-\n \n0.03\n \n10,816.83\n \n98.06\n \n237,525.73\n \n8,864,363.09\n \n153,534.70\n \n958,746.42\n \n1,351,846.54\n \n2,767,099.33\n \n26,143,181.72\n \nNov\n2,295.18\n \n2,278,921.91\n \n5,913,094.15\n \n568,556.41\n \n2,451,981.00\n \n180,229.25\n \n1,337,040.40\n \n-\n \n-\n \n0.03\n \n10,921.42\n \n59.77\n \n238,702.30\n \n9,040,518.08\n \n158,702.11\n \n1,046,256.98\n \n1,702,370.26\n \n2,868,031.98\n \n27,797,681.23\n \nDec\n2,947.49\n \n2,536,437.97\n \n5,489,443.24\n \n657,432.63\n \n2,268,702.96\n \n155,742.88\n \n2,420,663.39\n \n-\n \n-\n \n0.03\n \n12,324.59\n \n73.45\n \n248,699.79\n \n9,507,281.46\n \n255,007.08\n \n1,184,706.91\n \n1,748,495.98\n \n3,349,062.31\n \n29,837,022.16\n \n2024\nJan\n2,536.36\n \n4,749,173.95\n \n8,535,153.83\n \n940,210.80\n \n3,564,879.01\n \n285,807.60\n \n3,972,600.87\n \n-\n \n-\n \n0.03\n \n17,912.41\n \n198.80\n \n374,088.29\n \n14,957,169.30\n \n312,516.30\n \n1,949,662.45\n \n2,737,500.88\n \n4,289,981.53\n \n46,689,392.37\n \nFeb\n2,519.25\n \n6,564,463.71\n \n11,709,703.62\n \n1,772,649.65\n \n4,708,270.62\n \n153,450.01\n \n5,911,393.45\n \n-\n \n-\n \n0.03\n \n26,073.06\n \n232.00\n \n488,602.76\n \n22,234,523.09\n \n378,975.16\n \n2,608,075.14\n \n3,125,793.33\n \n5,812,047.28\n \n65,496,772.18\n \nMar\n2,435.72\n \n8,601,285.46\n \n15,501,059.95\n \n2,213,233.27\n \n6,701,169.42\n \n775,336.87\n \n8,098,495.31\n \n-\n \n-\n \n0.03\n \n47,609.35\n \n143.35\n \n729,484.92\n \n34,077,197.02\n \n597,886.20\n \n2,860,196.61\n \n4,317,386.46\n \n8,974,860.63\n \n93,497,780.56\n \n*Apr\n5.89\n \n4,141.51\n \n9,980.68\n \n1,414.28\n \n5,461.70\n \n287.09\n \n5,206.08\n \n-\n \n-\n \n0.00\n \n31.18\n \n88.00\n \n440.49\n \n20,170.86\n \n246.21\n \n2,510.15\n \n5,472.97\n \n4,360.99\n \n59,818.08\n \n*May\n10.60\n \n3,583.02\n \n11,575.45\n \n1,506.01\n \n6,092.37\n \n382.87\n \n5,420.56\n \n-\n \n-\n \n0.00\n \n29.63\n \n1.37\n \n433.36\n \n21,315.87\n \n348.50\n \n2,114.73\n \n6,339.55\n \n4,613.87\n \n63,767.76\n \n*Jun\n8.01\n \n4,111.49\n \n11,498.97\n \n1,627.32\n \n5,775.34\n \n298.05\n \n6,080.69\n \n-\n \n-\n \n7.23\n \n24.70\n \n1.49\n \n446.45\n \n22,801.09\n \n345.72\n \n2,541.32\n \n6,558.03\n \n5,419.46\n \n67,545.34\n \n*Jul\n5.05\n \n4,943.82\n \n10,426.18\n \n1,342.47\n \n5,743.94\n \n351.44\n \n6,988.99\n \n-\n \n-\n \n5.21\n \n25.13\n \n0.16\n \n432.35\n \n24,895.03\n \n348.09\n \n2,342.85\n \n6,539.59\n \n6,244.23\n \n70,634.52\n \n*Aug\n5.26\n \n5,703.86\n \n12,540.81\n \n1,453.04\n \n4,411.38\n \n205.93\n \n6,149.38\n \n-\n \n-\n \n2.43\n \n126.05\n \n0.19\n \n378.05\n \n25,591.15\n \n542.15\n \n2,767.89\n \n7,004.36\n \n6,832.60\n \n73,714.52\n \n*Sep\n6.82\n \n9,465.31\n \n20,161.22\n \n2,742.22\n \n7,903.81\n \n340.45\n \n10,295.58\n \n-\n \n-\n \n0.00\n \n244.94\n \n0.33\n \n600.93\n \n43,094.11\n \n979.13\n \n4,853.44\n \n11,326.85\n \n9,785.35\n \n121,800.51\n \n*Oct\n39.65\n \n12,315.40\n \n27,597.64\n \n3,670.13\n \n7,120.62\n \n129.14\n \n11,256.45\n \n-\n \n-\n \n0.00\n \n239.01\n \n0.08\n \n679.62\n \n49,545.16\n \n1,042.81\n \n6,380.10\n \n11,454.83\n \n11,116.57\n \n142,587.19\n \n*Nov\n58.26\n \n10,111.62\n \n27,498.54\n \n3,102.17\n \n5,626.08\n \n117.33\n \n9,757.48\n \n-\n \n-\n \n0.00\n \n287.55\n \n2,326.36\n \n572.57\n \n45,782.99\n \n1,064.73\n \n6,685.94\n \n11,362.33\n \n10,783.91\n \n135,137.84\n \n*Dec\n64.89\n \n8,774.50\n \n29,312.78\n \n3,217.87\n \n7,673.17\n \n287.57\n \n10,942.77\n \n-\n \n-\n \n8.29\n \n54.88\n \n0.57\n \n549.66\n \n46,926.14\n \n1,073.63\n \n6,555.30\n \n13,399.70\n \n11,326.46\n \n140,168.19\n \n2025\nJan\n69.16\n \n11,456.41\n \n29,733.87\n \n3,619.46\n \n5,360.40\n \n371.37\n \n10,307.60\n \n-\n \n-\n \n8.47\n \n56.00\n \n10.04\n \n602.54\n \n47,707.68\n \n1,083.88\n \n6,541.21\n \n10,321.33\n \n12,929.18\n \n140,178.60\n \nFeb\n74.54\n \n10,379.65\n \n28,980.85\n \n2,887.47\n \n7,444.59\n \n537.09\n \n9,957.34\n \n-\n \n-\n \n8.33\n \n56.51\n \n18.89\n \n773.23\n \n47,741.48\n \n1,091.66\n \n6,813.47\n \n9,654.17\n \n12,804.87\n \n139,224.14\n \nMar\n79.63\n \n7,925.12\n \n30,608.58\n \n2,161.71\n \n11,619.28\n \n786.30\n \n10,693.31\n \n-\n \n-\n \n0.00\n \n65.05\n \n59.30\n \n740.61\n \n49,559.08\n \n1,085.54\n \n7,656.70\n \n8,750.57\n \n13,326.61\n \n145,117.41\n \nSource:Reserve Bank of Zimbabwe,2025\nStatistics are denominated in ZiG\nTABLE 6.1: COMMERCIAL BANKS -ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\n37 \n \n \nZWG millions\nEnd of\nDemand\nSavings\nTime Deposits Total Deposits Other Depository Government \nTotal\nDebt Securities Foreign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2021\nJan\n158,888.8\n28,456.6\n10,150.2\n197,495.5\n2,580.8\n5,423.4\n205,499.8\n1,142.5\n12,732.6\n391.1\n519.6\n376.7\n50,147.7\n25,036.2\n29,608.5\n325,454.7\nFeb\n162,092.2\n26,146.3\n12,239.7\n200,478.2\n2,809.1\n4,762.5\n208,049.7\n1,150.4\n12,833.2\n409.2\n540.7\n609.9\n54,930.3\n28,339.2\n33,280.7\n340,143.4\nMar\n165,101.1\n30,313.5\n12,276.4\n207,691.0\n4,541.2\n4,845.3\n217,077.6\n1,331.7\n11,620.2\n75.4\n1,136.7\n408.9\n58,208.9\n32,908.1\n30,626.5\n353,393.9\nApr\n191,923.5\n31,441.3\n11,549.5\n234,914.3\n2,195.0\n5,346.7\n242,455.9\n1,190.1\n11,503.5\n176.5\n757.1\n409.9\n60,361.3\n34,537.9\n29,396.5\n380,788.7\nMay\n194,108.9\n40,921.9\n15,896.4\n250,927.2\n1,705.9\n6,802.1\n259,435.2\n1,186.9\n11,783.3\n654.2\n145.2\n429.0\n61,202.0\n35,592.3\n29,790.4\n400,218.5\nJun\n211,950.0\n40,878.5\n18,536.0\n271,364.4\n2,696.6\n6,202.3\n280,263.2\n1,211.8\n11,575.5\n662.3\n368.5\n462.6\n63,417.5\n26,856.5\n40,783.7\n425,601.6\nJul\n226,860.1\n48,928.9\n19,775.4\n295,564.4\n2,991.7\n5,012.2\n303,568.3\n1,169.2\n12,552.8\n706.9\n476.2\n552.8\n66,514.1\n26,869.2\n68,693.1\n481,102.6\nAug\n237,167.0\n38,425.4\n25,114.2\n300,706.5\n3,601.5\n5,873.7\n310,181.7\n1,216.2\n13,354.7\n1,444.4\n1,678.3\n478.6\n72,123.3\n32,281.1\n58,597.3\n491,355.6\nSep\n263,598.2\n37,954.3\n21,954.4\n323,506.9\n3,643.0\n3,469.0\n330,618.9\n2,141.0\n11,770.4\n1,453.1\n-110.6\n375.4\n71,255.0\n31,981.0\n46,729.4\n496,213.6\nOct\n299,038.0\n50,766.0\n22,882.7\n372,686.7\n2,824.1\n3,023.7\n378,534.5\n2,411.8\n14,077.4\n1,095.3\n1,109.9\n503.1\n78,644.6\n49,581.0\n61,280.0\n587,237.6\nNov\n307,063.4\n52,309.9\n27,875.3\n387,248.6\n3,325.7\n2,764.9\n393,339.3\n2,869.4\n12,437.2\n2,726.5\n1,352.5\n347.1\n89,288.6\n52,327.7\n61,678.3\n616,366.5\nDec\n334,599.0\n58,318.5\n30,455.6\n423,373.1\n3,842.1\n3,855.7\n431,070.9\n3,027.0\n13,896.4\n2,808.1\n1,693.3\n139.8\n109,665.4\n60,917.0\n63,170.8\n686,388.6\n2022\nJan\n346,619.5\n43,438.8\n31,158.1\n421,216.4\n2,962.5\n3,864.8\n428,043.7\n2,995.6\n14,406.9\n2,688.6\n1,043.2\n230.5\n122,752.1\n53,627.8\n58,853.6\n684,641.9\nFeb\n358,979.4\n51,510.7\n38,313.7\n448,803.8\n3,229.3\n4,248.7\n456,281.8\n3,834.1\n16,267.7\n2,120.4\n1,338.1\n226.8\n130,981.3\n55,099.6\n68,847.8\n734,997.5\nMar\n422,934.6\n58,283.5\n42,258.5\n523,476.6\n3,062.2\n5,171.3\n531,710.2\n3,850.2\n18,374.8\n2,137.9\n2,779.1\n810.6\n149,781.8\n65,660.6\n85,216.5\n860,321.7\nApr\n479,558.7\n74,880.3\n40,491.0\n594,930.0\n6,377.5\n7,486.7\n608,794.2\n3,792.3\n21,445.6\n2,173.0\n3,173.0\n486.8\n149,610.1\n53,372.3\n103,623.7\n946,471.1\nMay\n666,937.8\n137,419.9\n55,389.8\n859,747.5\n7,310.9\n7,249.8\n874,308.3\n5,769.3\n39,105.1\n2,383.3\n2,207.5\n321.8\n214,978.6\n134,993.5\n182,638.3\n1,456,705.7\nJun\n773,692.7\n154,956.9\n63,511.7\n992,161.3\n4,597.1\n10,018.0\n1,006,776.4\n6,743.2\n42,701.8\n2,898.5\n3,389.3\n345.2\n307,341.8\n169,511.8\n184,958.1\n1,724,666.1\nJul\n810,906.6\n173,134.0\n74,324.5\n1,058,365.1\n717.0\n9,153.8\n1,068,235.9\n7,994.5\n54,168.7\n2,814.9\n2,948.9\n1,339.1\n355,597.9\n144,090.2\n220,013.9\n1,857,204.0\nAug\n1,100,922.1\n219,798.6\n110,595.1\n1,431,315.7\n790.2\n7,675.2\n1,439,781.1\n12,484.6\n64,160.3\n3,230.7\n2,791.8\n555.2\n421,880.4\n167,029.4\n300,169.0\n2,412,082.6\nSep\n1,328,584.6\n256,980.2\n127,051.1\n1,712,616.0\n1,482.9\n8,473.0\n1,722,571.9\n13,789.2\n81,182.4\n3,720.2\n5,632.9\n587.2\n465,063.9\n146,133.1\n318,269.0\n2,756,949.8\nOct\n1,365,908.5\n205,688.8\n128,186.9\n1,699,784.2\n813.8\n6,314.3\n1,706,912.3\n14,933.2\n83,998.0\n28,072.2\n4,282.4\n762.5\n486,396.6\n165,306.9\n407,015.5\n2,897,679.6\nNov\n1,481,503.5\n243,239.9\n146,530.0\n1,871,273.4\n291.3\n6,366.6\n1,877,931.3\n12,665.1\n67,318.9\n19,973.5\n5,349.1\n339.6\n514,200.0\n170,944.8\n343,815.1\n3,012,537.3\nDec\n1,697,008.7\n235,271.2\n181,090.6\n2,113,370.5\n1,514.4\n7,399.5\n2,122,284.4\n13,296.8\n106,071.5\n10,597.8\n9,610.4\n752.5\n621,113.3\n159,126.2\n320,981.8\n3,363,834.8\n2023\nJan\n2,139,458.0\n78,197.7\n215,537.0\n2,433,192.7\n214.3\n41,333.8\n2,474,740.8\n12,923.7\n123,605.0\n4,974.3\n5,669.1\n675.5\n723,452.2\n227,545.4\n384,228.1\n3,957,814.2\nFeb\n1,997,073.4\n398,595.8\n230,549.9\n2,626,219.1\n303.5\n10,655.7\n2,637,178.4\n14,443.3\n140,484.9\n8,092.9\n13,273.6\n3,109.0\n780,290.7\n226,933.0\n497,618.5\n4,321,424.2\nMar\n2,218,678.7\n384,245.5\n262,119.8\n2,865,044.1\n1,272.8\n5,953.0\n2,872,269.9\n15,181.9\n166,322.5\n9,639.9\n15,494.1\n3,714.6\n846,479.9\n554,840.9\n581,230.2\n5,065,173.9\nApr\n2,646,522.9\n382,678.9\n197,662.2\n3,226,864.0\n173.4\n9,463.7\n3,236,501.1\n1,115.5\n201,674.1\n13,321.9\n21,331.0\n6,418.8\n935,402.2\n214,270.9\n584,658.1\n5,214,693.6\nMay\n5,196,712.7\n969,812.4\n435,965.9\n6,602,490.9\n514.9\n50,270.4\n6,653,276.3\n1,287.6\n493,894.8\n78,332.6\n65,967.5\n30,583.3\n1,815,309.9\n607,438.1\n1,452,822.8\n11,198,912.9\nJun\n10,038,744.6\n2,287,818.9\n789,112.9\n13,115,676.4\n1,468.6\n432,367.0\n13,549,512.0\n1,177.5\n1,201,797.0\n39,166.6\n101,465.7\n64,321.9\n5,042,026.4\n1,390,786.2\n2,830,837.1\n24,221,090.2\nJul\n9,592,825.0\n1,787,488.9\n592,115.4\n11,972,429.2\n9,138.5\n380,190.7\n12,361,758.4\n512.4\n847,658.7\n87,827.2\n146,299.0\n58,256.2\n4,649,856.9\n829,382.3\n2,509,565.1\n21,491,116.1\nAug\n9,698,801.3\n1,920,804.2\n622,360.9\n12,241,966.5\n1,479.8\n381,277.2\n12,624,723.5\n863.9\n865,945.4\n84,841.4\n141,305.4\n56,751.6\n4,465,099.7\n701,626.2\n2,553,598.8\n21,494,755.8\nSep\n13,388,822.1\n319,686.0\n695,555.0\n14,404,063.1\n4,754.8\n114,251.5\n14,523,069.4\n504.3\n1,036,635.6\n82,493.4\n152,779.3\n90,032.4\n5,159,376.7\n776,997.6\n2,972,007.2\n24,793,895.8\nOct\n14,087,303.5\n312,655.9\n827,902.5\n15,227,861.9\n1,692.7\n146,801.2\n15,376,355.8\n522.9\n1,106,440.5\n84,628.9\n159,670.3\n83,441.8\n5,427,255.6\n958,746.4\n2,946,119.7\n26,143,181.7\nNov\n14,816,672.7\n306,014.4\n882,972.1\n16,005,659.2\n5,789.4\n133,219.7\n16,144,668.4\n432.3\n1,259,039.0\n92,939.9\n227,935.0\n89,997.7\n5,701,702.0\n1,046,257.0\n3,234,709.9\n27,797,681.2\nDec\n15,726,758.6\n369,405.4\n808,422.2\n16,904,586.1\n6,923.3\n201,225.8\n17,112,735.3\n36,808.0\n1,314,667.6\n55,157.4\n153,701.6\n138,722.6\n6,264,918.7\n1,184,706.9\n3,575,604.1\n29,837,022.2\n2024\nJan\n24,824,665.8\n662,989.2\n1,191,915.8\n26,679,570.7\n25,881.9\n169,368.5\n26,874,821.1\n168.2\n2,102,990.2\n114,298.0\n279,174.1\n182,727.0\n9,532,603.9\n1,949,662.4\n5,652,947.5\n46,689,392.4\nFeb\n34,081,030.9\n911,544.4\n1,983,870.0\n36,976,445.3\n7,146.9\n340,314.0\n37,323,906.2\n151.1\n3,106,432.1\n105,237.1\n449,118.3\n279,727.9\n13,237,287.6\n2,608,075.1\n8,386,836.6\n65,496,772.2\nMar\n48,600,783.9\n1,434,256.6\n3,333,658.9\n53,368,699.4\n104,688.2\n515,299.7\n53,988,687.3\n0.0\n4,654,985.7\n95,705.0\n500,611.7\n361,061.7\n20,221,996.6\n2,860,196.6\n10,814,535.9\n93,497,780.6\n*Apr\n31,998.9\n843.3\n1,944.9\n34,787.2\n92.9\n242.8\n35,122.9\n0.0\n2,867.4\n67.4\n358.1\n222.7\n10,281.8\n2,510.2\n8,387.7\n59,818.1\n*May\n33,721.9\n910.6\n2,242.3\n36,874.7\n79.3\n349.9\n37,303.9\n0.0\n3,056.1\n50.9\n436.0\n4.6\n12,101.9\n2,114.7\n8,699.7\n63,767.8\n*Jun\n34,597.9\n958.5\n2,874.9\n38,431.3\n2.1\n589.2\n39,022.6\n0.0\n3,399.1\n99.8\n442.6\n13.2\n14,415.1\n2,541.3\n7,611.6\n67,545.3\n*Jul\n36,817.5\n1,137.8\n2,766.8\n40,722.1\n68.7\n438.6\n41,229.4\n0.0\n3,923.2\n99.9\n469.8\n12.0\n15,126.4\n2,342.9\n7,430.9\n70,634.5\n*Aug\n37,597.8\n872.1\n2,514.1\n40,984.0\n65.6\n532.9\n41,582.4\n0.0\n4,039.1\n109.9\n586.0\n12.5\n16,106.1\n2,767.9\n8,510.5\n73,714.5\n*Sep\n59,919.0\n2,378.4\n3,920.7\n66,218.0\n76.5\n579.2\n66,873.8\n0.0\n7,142.2\n491.4\n844.5\n51.1\n27,911.3\n4,853.4\n13,632.7\n121,800.5\n*Oct\n70,016.8\n1,657.3\n5,193.9\n76,867.9\n170.2\n621.4\n77,659.6\n0.0\n8,524.2\n429.7\n1,248.8\n16.1\n32,737.1\n6,380.1\n15,591.5\n142,587.2\n*Nov\n66,321.7\n1,869.1\n5,320.9\n73,511.7\n156.7\n677.1\n74,345.6\n0.0\n7,213.9\n409.3\n558.7\n42.7\n32,040.3\n6,685.9\n13,841.4\n135,137.8\n*Dec\n69,146.0\n1,993.7\n5,095.0\n76,234.8\n134.4\n716.3\n77,085.5\n0.0\n8,204.4\n233.0\n588.3\n112.5\n32,891.4\n6,555.3\n14,497.8\n140,168.2\n2025\nJan\n67,471.6\n3,347.4\n5,479.5\n76,298.4\n113.0\n703.9\n77,115.3\n0.0\n8,899.1\n368.7\n583.1\n13.4\n31,606.5\n6,541.2\n15,051.3\n140,178.6\nFeb\n66,010.2\n2,819.1\n5,647.8\n74,477.1\n395.7\n912.6\n75,785.4\n0.0\n8,885.5\n536.9\n840.5\n17.4\n32,130.5\n6,813.5\n14,214.5\n139,224.1\nMar\n70,901.6\n3,277.8\n5,300.5\n79,479.9\n134.2\n880.5\n80,494.6\n0.0\n11,670.0\n546.5\n778.5\n16.4\n33,940.6\n7,656.7\n10,014.1\n145,117.4\n \nSource: Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\nTABLE 6.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\n38 \n \nForeign\nOther Assets\nNon Financial \nTOTAL\nEnd of\nNotes\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1 Local Governemt Public Enterprises\nOther2\nMortgages\nGovernment\nOther\nCoins\nRBZ\nCorporations\nForeign Banks Non-residents\nSecurities\nsecurities\n2021\nJan\n188.7\n \n2943.3\n5,986.5\n \n793.8\n843.5\n \n-\n \n1,783.8\n \n10.2\n-\n \n211.3\n \n1,091.3\n \n0.0\n \n9,329.1\n \n2980.3\n7,685.1\n \n33,846.9\n \nFeb\n345.7\n \n2762.9\n6,004.8\n \n811.1\n984.2\n \n-\n \n2,731.0\n \n9.2\n-\n \n236.8\n \n2,089.3\n \n-\n \n8,950.2\n \n2949.2\n7,790.6\n \n35,665.0\n \nMar\n168.3\n \n2278.9\n6,313.1\n \n1594.4\n1,028.2\n \n-\n \n1,341.7\n \n8.4\n-\n \n415.1\n \n1,242.4\n \n-\n \n10,867.7\n \n3027.5\n7,841.0\n \n36,126.8\n \nApr\n206.9\n \n2702.1\n5,302.6\n \n1156.7\n1,085.4\n \n-\n \n871.7\n \n7.7\n-\n \n508.9\n \n1,581.5\n \n-\n \n14,233.6\n \n3431.1\n7,237.9\n \n38,326.2\n \nMay\n210.3\n \n1687.6\n5,962.2\n \n1250.9\n3,847.1\n \n-\n \n116.9\n \n7.0\n-\n \n517.7\n \n1,568.8\n \n-\n \n17,154.9\n \n2927.9\n7,532.9\n \n42,784.2\n \nJun\n249.6\n \n1649.7\n6,202.6\n \n1163.8\n1,866.7\n \n-\n \n204.6\n \n6.5\n-\n \n588.0\n \n1,851.9\n \n-\n \n18,795.4\n \n2580.9\n7,701.1\n \n42,860.7\n \nJul\n283.7\n \n1212.2\n7,193.4\n \n1892.7\n1,875.4\n \n-\n \n1,143.4\n \n6.0\n-\n \n447.3\n \n1,963.2\n \n-\n \n18,280.3\n \n3923.5\n7,695.6\n \n45,916.5\n \nAug\n352.8\n \n1408.8\n7,869.3\n \n2537.6\n2,316.2\n \n-\n \n3,535.6\n \n5.4\n-\n \n399.5\n \n2,101.3\n \n-\n \n19,422.2\n \n3837.6\n7,666.6\n \n51,453.0\n \nSep\n349.8\n \n1926.6\n7,608.5\n \n2430.2\n1,941.4\n \n-\n \n4,314.6\n \n5.1\n-\n \n205.2\n \n2,231.7\n \n-\n \n20,461.1\n \n4013.2\n9,460.7\n \n54,948.1\n \nOct\n411.5\n \n2396.2\n8,221.0\n \n2162.4\n3,421.5\n \n-\n \n5,627.7\n \n4.3\n-\n \n271.1\n \n2,539.5\n \n-\n \n22,881.3\n \n5432.3\n9,501.3\n \n62,870.1\n \nNov\n339.8\n \n3578.4\n7,561.6\n \n2568.8\n2,299.5\n \n-\n \n5,882.7\n \n3.7\n-\n \n566.4\n \n2,788.5\n \n-\n \n27,326.1\n \n4400.3\n9,614.3\n \n66,930.0\n \nDec\n351.1\n \n3217.3\n8,557.8\n \n2619.2\n3,620.2\n \n-\n \n2,353.6\n \n3.0\n-\n \n1,189.0\n \n2,786.9\n \n-\n \n33,115.3\n \n5610.8\n11,334.1\n \n74,758.3\n \n2022\nJan\n324.6\n \n3504.3\n8,506.5\n \n2680.3\n2,631.0\n \n-\n \n1,110.8\n \n2.4\n-\n \n1,487.3\n \n2,967.6\n \n-\n \n35,913.5\n \n6693.8\n14,008.7\n \n79,830.9\n \nFeb\n411.5\n \n4021.5\n9,763.6\n \n3069.7\n5,678.0\n \n-\n \n4,048.9\n \n1.6\n-\n \n1,465.4\n \n3,241.1\n \n-\n \n39,977.5\n \n4511.5\n13,964.4\n \n90,154.6\n \nMar\n354.3\n \n4413.6\n11,882.6\n \n3691.3\n4,932.3\n \n-\n \n5,235.0\n \n0.9\n-\n \n1,590.0\n \n3,888.3\n \n-\n \n42,741.3\n \n9086.6\n15,421.2\n \n103,237.4\n \nApr\n546.4\n \n3054.1\n15,585.8\n \n4857.7\n5,768.6\n \n-\n \n5,714.4\n \n0.2\n-\n \n1,861.4\n \n4,143.7\n \n-\n \n48,582.4\n \n9654.2\n16,999.2\n \n116,768.1\n \nMay\n639.5\n \n8326.7\n23,817.6\n \n4251.9\n16,001.6\n \n-\n \n6,150.9\n \n0.0\n-\n \n1,486.3\n \n8,474.8\n \n-\n \n74,864.0\n \n14793.9\n17,091.2\n \n175,898.5\n \nJun\n418.5\n \n8464.3\n32,497.6\n \n3807.5\n21,184.8\n \n-\n \n2,639.3\n \n0.0\n-\n \n1,340.0\n \n10,851.1\n \n-\n \n85,145.9\n \n18155.8\n35,128.1\n \n219,633.0\n \nJul\n700.4\n \n9914.6\n30,660.3\n \n4983.4\n24,902.9\n \n-\n \n4,077.6\n \n0.0\n-\n \n1,411.5\n \n13,722.1\n \n-\n \n98,066.0\n \n9998.6\n45,127.9\n \n243,565.1\n \nAug\n863.8\n \n14422.1\n33,703.2\n \n4483.0\n34,971.8\n \n-\n \n4,379.8\n \n0.0\n-\n \n2,106.6\n \n16,515.4\n \n-\n \n115,491.9\n \n8745.3\n45,694.0\n \n281,377.1\n \nSep\n1,086.8\n \n14998.2\n37,911.3\n \n7470.1\n45,094.8\n \n-\n \n8,440.8\n \n0.0\n-\n \n1,302.8\n \n17,996.8\n \n-\n \n129,242.7\n \n11630.7\n60,830.4\n \n336,005.2\n \nOct\n1,158.3\n \n14768.7\n44,296.5\n \n10013.7\n44,664.1\n \n-\n \n14,109.9\n \n0.0\n-\n \n1,142.4\n \n16,817.7\n \n-\n \n123,793.8\n \n30036.4\n47,678.2\n \n348,479.7\n \nNov\n1,449.3\n \n22456.9\n41,398.0\n \n9771.8\n41,317.6\n \n-\n \n17,572.6\n \n0.0\n-\n \n2,085.3\n \n16,785.8\n \n-\n \n136,029.9\n \n30694.0\n46,275.8\n \n365,836.9\n \nDec\n1,470.7\n \n23012.7\n48,533.8\n \n8913.7\n50,229.0\n \n-\n \n21,411.1\n \n0.0\n19993.4\n2,176.2\n \n17,693.7\n \n-\n \n119,322.3\n \n39279.1\n69,102.5\n \n421,138.1\n \n2023\nJan\n2,402.7\n \n32405.1\n47,062.6\n \n8410.8\n50,364.6\n \n-\n \n17,976.2\n \n0.0\n23,668.5\n \n2,406.3\n \n18,311.0\n \n-\n \n132,757.4\n \n41367.4\n69,570.1\n \n446,702.8\n \nFeb\n234.9\n \n59685.4\n50,103.0\n \n9568.6\n62,701.4\n \n889.9\n \n24,809.7\n \n0.0\n26,667.1\n \n4,451.9\n \n21,629.1\n \n-\n \n146,798.4\n \n50093.6\n70,987.9\n \n528,620.9\n \nMar\n214.6\n \n72311.9\n57,399.6\n \n9196.8\n51,300.9\n \n-\n \n28,841.5\n \n0.0\n24,689.0\n \n5,503.9\n \n19,118.6\n \n-\n \n170,376.6\n \n54524.7\n84,489.1\n \n577,967.3\n \nApr\n184.1\n \n61341.6\n63,129.5\n \n16343.2\n61,444.0\n \n-\n \n28,727.0\n \n0.0\n28,119.0\n \n5,989.2\n \n27,619.9\n \n-\n \n205,412.2\n \n81442.9\n86,571.2\n \n666,323.9\n \nMay\n78.1\n \n125685.1\n100,808.7\n \n22707.0\n195,646.6\n \n-\n \n81,344.3\n \n0.0\n69,908.9\n \n6,246.8\n \n53,180.7\n \n-\n \n440,462.4\n \n103176.1\n116,103.7\n \n1,315,348.2\n \nJun\n176.6\n \n227001.8\n172,666.5\n \n25998.2\n452,772.6\n \n40,326.7\n \n115,193.3\n \n0.0\n196,310.3\n \n4,209.5\n \n121,677.5\n \n-\n \n870,075.1\n \n230604.4\n544,587.8\n \n3,001,600.3\n \nJul\n162.7\n \n132017.2\n220,995.0\n \n20797.2\n459,668.2\n \n32,010.8\n \n105,308.6\n \n0.0\n154,472.7\n \n13,777.8\n \n153,638.5\n \n-\n \n697,177.8\n \n209734.6\n612,937.8\n \n2,812,698.9\n \nAug\n611.0\n \n105296.6\n309,821.7\n \n55744.7\n475,838.3\n \n37,447.1\n \n102,495.2\n \n0.0\n153,578.2\n \n6,767.5\n \n135,193.3\n \n-\n \n758,439.2\n \n223114.4\n564,622.1\n \n2,928,969.2\n \nSep\n949.3\n \n193065.6\n339,269.2\n \n41680.1\n437,996.0\n \n58,554.5\n \n110,351.3\n \n0.0\n161,346.6\n \n4,522.1\n \n153,113.7\n \n-\n \n880,148.8\n \n290026.7\n565,616.4\n \n3,236,640.3\n \nOct\n403.8\n \n204713.4\n254,684.1\n \n187632.1\n440,150.3\n \n65,022.1\n \n97,046.1\n \n0.0\n176,111.9\n \n13,771.8\n \n173,523.5\n \n-\n \n829,479.5\n \n345029.3\n586,015.6\n \n3,373,583.5\n \nNov\n370.5\n \n222344.7\n387,213.2\n \n160896.0\n326,510.1\n \n50,688.3\n \n159,225.4\n \n0.0\n173,990.9\n \n28,127.2\n \n187,363.3\n \n-\n \n926,663.7\n \n395549.5\n595,811.6\n \n3,614,754.5\n \nDec\n403.7\n \n251968.8\n457,034.9\n \n261067.9\n345,348.0\n \n56,551.7\n \n185,131.1\n \n0.0\n166902.0\n27,875.9\n \n222,503.1\n \n0.7\n \n973,788.6\n \n507890.9\n658,045.7\n \n4,114,512.9\n \n2024\nJan\n367.9\n \n368046.7\n524,020.9\n \n471915.0\n363,325.6\n \n40,412.9\n \n280,803.2\n \n0.0\n280441.0\n45,935.9\n \n339,610.7\n \n-\n \n1,563,405.5\n \n649087.4\n742,734.0\n \n5,670,106.8\n \nFeb\n578.8\n \n637645.2\n797,581.2\n \n618074.6\n613,309.7\n \n24,680.4\n \n425,783.2\n \n0.0\n399313.5\n67,900.2\n \n519,513.4\n \n-\n \n2,188,186.8\n \n904519.6\n937,957.6\n \n8,135,044.1\n \nMar\n356.6\n \n1026840.5\n1,171,941.4\n \n888362.3\n829,470.4\n \n-\n \n440,943.8\n \n0.0\n528820.5\n103,276.3\n \n787,872.2\n \n-\n \n3,761,909.8\n \n1403556.4\n1,697,667.5\n \n12,641,017.5\n \n*Apr\n1.0\n \n564.4\n864.1\n \n693.0\n326.5\n \n67.2\n \n337.2\n \n0.0\n313.5\n-\n \n593.2\n \n212.7\n \n2,856.8\n \n420.1\n824.2\n \n8,074.0\n \n*May\n4.0\n \n639.2\n783.2\n \n772.6\n296.2\n \n109.6\n \n407.6\n \n0.0\n303.7\n-\n \n309.2\n \n19.8\n \n2,946.5\n \n712.1\n903.7\n \n8,207.5\n \n*Jun\n1.1\n \n520.3\n1,122.4\n \n718.7\n678.1\n \n110.9\n \n188.6\n \n0.0\n282.9\n-\n \n424.7\n \n20.4\n \n2,998.6\n \n858.8\n1,229.8\n \n9,155.3\n \n*Jul\n2.4\n \n681.0\n918.2\n \n640.3\n336.2\n \n99.8\n \n676.7\n \n0.0\n276.2\n5.0\n \n333.9\n \n20.5\n \n3,022.2\n \n1332.3\n1,250.3\n \n9,595.1\n \n*Aug\n1.1\n \n642.2\n853.3\n \n852.1\n428.1\n \n-\n \n764.6\n \n0.0\n246.2\n5.1\n \n373.1\n \n20.6\n \n3,042.5\n \n1811.8\n1,318.9\n \n10,359.6\n \n*Sep\n1.0\n \n1230.9\n1,985.1\n \n1121.2\n705.4\n \n-\n \n555.5\n \n0.0\n431.0\n34.5\n \n1,130.0\n \n37.0\n \n4,878.1\n \n2054.8\n2,298.6\n \n16,463.3\n \n*Oct\n13.1\n \n1166.2\n2,512.0\n \n1391.6\n769.7\n \n-\n \n745.1\n \n0.0\n502.2\n5.3\n \n1,380.9\n \n42.7\n \n5,751.9\n \n2214.8\n2,435.0\n \n18,930.4\n \n*Nov\n14.0\n \n918.9\n2,141.3\n \n1383.8\n649.7\n \n-\n \n602.6\n \n0.0\n367.6\n5.4\n \n1,293.8\n \n39.5\n \n4,997.5\n \n2566.9\n2,458.3\n \n17,439.1\n \n*Dec\n17.1\n \n1089.4\n2,633.9\n \n2306.6\n754.5\n \n-\n \n675.7\n \n0.0\n361.0\n-\n \n1,424.9\n \n35.4\n \n5,500.8\n \n2343.9\n2,593.3\n \n19,736.5\n \n2025\n*Jan\n16.4\n \n936.1\n2,314.6\n \n1595.3\n637.3\n \n-\n \n1,060.8\n \n0.0\n352.9\n-\n1,532.1\n \n35.6\n \n5,695.2\n \n3701.1\n2,505.2\n \n20,382.5\n \n*Feb\n17.2\n \n977.3\n2,481.1\n \n1537.6\n695.1\n \n-\n \n856.4\n \n0.0\n292.4\n-\n \n1,628.3\n \n35.8\n \n5,937.3\n \n2478.3\n2,513.8\n \n19,450.5\n \n*Mar\n17.4\n \n1018.9\n2,314.6\n \n1592.7\n529.8\n \n-\n \n1,073.9\n \n0.0\n284.5\n-\n \n2,195.8\n \n78.2\n \n5,596.1\n \n2357.9\n2,677.9\n \n19,737.7\n \nSource:Reserve Bank of Zimbabwe,2025\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households and other financial corporations, \n* Statistics are denominated in ZiG\nTABLE 7.1: BUILDING SOCIETIES -ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\n39 \n \n \nDebt Securities\nForeign Liabilities\nCapital\nOther\nTOTAL\nand\nLiablities\nEnd of\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ Other Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2021\nJan\n17,060.5\n985.1\n18,045.7\n150.0\n15.0\n18,210.7\n291.2\n3,018.1\n0.0\n81.3\n0.0\n6,054.0\n6,191.6\n33,846.9\nFeb\n18,610.7\n1,047.5\n19,658.2\n150.0\n15.0\n19,823.2\n318.2\n3,075.5\n0.0\n40.7\n0.0\n6,533.5\n5,874.0\n35,665.0\nMar\n18,562.7\n1,070.5\n19,633.2\n150.0\n15.0\n19,798.2\n320.8\n3,377.0\n0.0\n241.5\n0.0\n6,727.5\n5,661.8\n36,126.8\nApr\n19,021.2\n1,353.2\n20,374.5\n500.0\n15.0\n20,889.5\n325.0\n4,244.8\n0.0\n181.9\n0.0\n6,267.0\n6,418.0\n38,326.2\nMay\n22,332.1\n1,453.5\n23,785.6\n500.0\n15.0\n24,300.6\n350.2\n4,279.9\n0.0\n394.8\n0.0\n6,067.1\n7,391.6\n42,784.2\nJun\n22,784.4\n1,675.4\n24,459.8\n209.5\n70.5\n24,739.8\n359.1\n3,855.1\n0.0\n570.4\n0.0\n6,623.0\n6,713.2\n42,860.7\nJul\n25,425.9\n1,997.8\n27,423.7\n25.0\n15.0\n27,463.7\n365.2\n3,488.6\n0.0\n274.6\n0.0\n7,194.2\n7,130.1\n45,916.5\nAug\n27,475.7\n2,728.9\n30,204.6\n60.0\n15.0\n30,279.6\n668.2\n5,344.8\n0.0\n621.9\n0.0\n7,683.7\n6,854.8\n51,453.0\nSep\n29,023.8\n2,834.6\n31,858.5\n76.0\n15.2\n31,949.7\n1,062.2\n4,465.7\n0.0\n181.9\n0.0\n10,227.1\n7,061.5\n54,948.1\nOct\n30,925.8\n4,239.0\n35,164.7\n0.0\n30.0\n35,194.8\n1,329.1\n7,432.5\n0.0\n0.0\n0.0\n10,906.3\n8,007.4\n62,870.1\nNov\n34,486.8\n4,344.1\n38,830.8\n0.0\n15.0\n38,845.9\n1,149.7\n7,028.7\n0.0\n203.6\n0.0\n11,575.7\n8,126.5\n66,930.0\nDec\n33,974.4\n4,856.8\n38,831.3\n80.0\n15.0\n38,926.3\n1,750.9\n9,746.8\n0.0\n712.0\n0.0\n15,101.8\n8,520.4\n74,758.3\n2022\nJan\n31,695.1\n5,983.6\n37,678.7\n0.0\n15.0\n37,693.7\n1,771.4\n10,991.6\n0.0\n373.7\n0.0\n18,063.5\n10,937.0\n79,830.9\nFeb\n37,132.1\n7,089.1\n44,221.1\n0.0\n15.0\n44,236.1\n1,703.8\n14,215.9\n0.0\n431.6\n0.0\n18,241.5\n11,325.7\n90,154.6\nMar\n44,187.4\n6,190.7\n50,378.1\n0.0\n15.0\n50,393.1\n1,742.3\n15,620.9\n0.0\n501.9\n0.0\n20,548.8\n14,430.4\n103,237.4\nApr\n52,979.2\n6,553.0\n59,532.2\n0.0\n15.0\n59,547.2\n1,536.3\n17,027.1\n0.0\n704.1\n0.0\n23,099.0\n14,854.4\n116,768.1\nMay\n86,411.7\n6,683.0\n93,094.7\n0.0\n15.0\n93,109.8\n1,477.7\n34,306.7\n0.0\n1,033.4\n0.0\n22,645.2\n23,325.7\n175,898.5\nJun\n98,008.7\n8,427.1\n106,435.9\n1,030.1\n15.0\n107,481.1\n1,496.4\n40,346.3\n0.0\n1,200.6\n0.0\n42,213.2\n26,895.5\n219,633.0\nJul\n111,583.1\n9,489.2\n121,072.3\n1,072.6\n15.0\n122,159.9\n1,225.0\n46,145.1\n0.0\n2,071.5\n0.0\n55,131.6\n16,832.0\n243,565.1\nAug\n133,071.2\n11,398.3\n144,469.5\n1,625.2\n15.0\n146,109.7\n1,382.6\n55,691.4\n0.0\n2,979.3\n0.0\n60,157.4\n15,056.7\n281,377.1\nSep\n143,338.6\n28,284.7\n171,623.3\n0.0\n15.0\n171,638.3\n1,339.9\n62,659.9\n0.0\n3,613.8\n0.0\n79,343.1\n17,410.1\n336,005.2\nOct\n122,775.3\n20,897.6\n143,672.9\n1,214.2\n15.0\n144,902.1\n1,707.3\n69,651.9\n0.0\n4,327.9\n0.0\n86,799.2\n41,091.4\n348,479.7\nNov\n130,892.9\n23,401.5\n154,294.3\n1,256.4\n13.0\n155,563.7\n1,855.1\n72,052.0\n0.0\n5,140.0\n0.0\n89,895.0\n41,331.2\n365,836.9\nDec\n149,207.3\n30,517.1\n179,724.4\n1,239.7\n103.8\n181,068.0\n1,933.7\n71,142.6\n0.0\n5,623.9\n0.0\n118,486.1\n42,883.8\n421,138.1\n2023\nJan\n161,506.8\n31,099.4\n192,606.2\n1,462.2\n121.0\n194,189.4\n3,214.4\n72,524.5\n0.0\n6,622.6\n0.0\n144,335.3\n25,816.5\n446,702.8\nFeb\n210,739.4\n27,500.2\n238,239.5\n1,153.4\n15.0\n239,407.9\n2,349.9\n84,724.5\n0.0\n7,548.9\n0.0\n155,007.6\n39,582.0\n528,620.9\nMar\n234,480.2\n38,088.7\n272,568.9\n158.0\n14.4\n272,741.2\n1,982.4\n89,883.4\n0.0\n7,502.7\n0.0\n172,499.0\n33,358.6\n577,967.3\nApr\n272,738.9\n35,889.2\n308,628.0\n400.0\n15.0\n309,043.1\n1,809.5\n116,418.1\n0.0\n8,456.9\n0.0\n183,262.3\n47,334.0\n666,323.9\nMay\n502,897.5\n36,680.3\n539,577.9\n553.7\n15.0\n540,146.6\n4,453.5\n289,636.2\n0.0\n8,115.4\n0.0\n372,206.8\n100,789.6\n1,315,348.2\nJun\n927,980.2\n66,404.1\n994,384.3\n0.0\n15.0\n994,399.3\n4,147.7\n631,544.2\n0.0\n10,873.2\n0.0\n1,117,122.1\n243,513.7\n3,001,600.3\nJul\n804,547.2\n73,047.1\n877,594.3\n15,753.2\n15.0\n893,362.6\n2,706.7\n611,248.0\n0.0\n14,397.5\n0.0\n1,093,858.2\n197,126.1\n2,812,698.9\nAug\n920,687.4\n90,856.7\n1,011,544.1\n15,752.3\n15.0\n1,027,311.4\n3,400.5\n617,162.9\n0.0\n12,854.9\n0.0\n1,064,286.3\n203,953.2\n2,928,969.2\nSep\n1,062,730.1\n75,413.9\n1,138,143.9\n0.0\n15.1\n1,138,159.0\n3,262.9\n652,356.6\n0.0\n16,101.5\n0.0\n1,117,548.2\n309,212.1\n3,236,640.3\nOct\n1,261,965.8\n64,282.0\n1,326,247.8\n0.0\n15.1\n1,326,262.9\n4,056.0\n467,416.6\n0.0\n16,785.2\n0.0\n1,188,499.5\n370,563.3\n3,373,583.5\nNov\n1,301,463.8\n82,076.9\n1,383,540.7\n79,497.1\n15.1\n1,463,052.8\n4,822.5\n525,114.1\n0.0\n16,180.1\n0.0\n1,209,652.3\n395,932.7\n3,614,754.5\nDec\n1,541,238.9\n142,705.5\n1,683,944.4\n79,497.1\n15.8\n1,763,457.2\n7,085.0\n516,718.0\n0.0\n8,736.3\n0.0\n1,308,419.6\n510,096.7\n4,114,512.9\n2024\nJan\n2,094,039.4\n96,896.2\n2,190,935.6\n79,481.7\n15.1\n2,270,432.3\n8,231.4\n904,697.2\n0.0\n11,028.7\n0.0\n1,826,995.6\n648,721.6\n5,670,106.8\nFeb\n2,991,430.0\n192,203.3\n3,183,633.2\n162,422.1\n15.1\n3,346,070.4\n10,388.9\n1,314,901.6\n0.0\n5,723.7\n0.0\n2,630,626.9\n827,332.6\n8,135,044.1\nMar\n4,958,662.0\n186,068.5\n5,144,730.5\n162,239.8\n15.7\n5,306,986.0\n8,072.5\n1,880,803.3\n0.0\n6,134.8\n0.0\n4,286,906.8\n1,152,114.2\n12,641,017.5\n*Apr\n3,369.4\n36.3\n3,405.6\n65.0\n0.0\n3,470.7\n3.2\n1,258.6\n0.0\n0.0\n0.0\n1,955.9\n1,385.6\n8,074.0\n*May\n3,228.4\n75.2\n3,303.7\n0.0\n0.0\n3,303.7\n4.8\n1,366.6\n0.0\n0.0\n0.0\n2,496.7\n1,035.8\n8,207.5\n*Jun\n3,502.4\n97.1\n3,599.5\n0.0\n0.0\n3,599.5\n4.4\n1,414.8\n0.0\n8.0\n0.0\n2,990.2\n1,138.3\n9,155.3\n*Jul\n4,199.9\n128.4\n4,328.3\n0.0\n0.0\n4,328.3\n19.6\n919.3\n0.0\n13.2\n0.0\n3,111.6\n1,203.0\n9,595.1\n*Aug\n4,433.7\n172.4\n4,606.1\n0.0\n0.0\n4,606.1\n103.0\n850.7\n0.0\n16.1\n0.0\n3,370.3\n1,413.3\n10,359.6\n*Sep\n6,773.8\n475.3\n7,249.1\n22.6\n0.0\n7,271.7\n103.8\n1,559.3\n0.0\n16.3\n0.0\n5,486.0\n2,026.3\n16,463.3\n*Oct\n8,011.9\n795.7\n8,807.6\n86.9\n0.0\n8,894.5\n122.7\n1,462.9\n0.0\n61.4\n0.0\n6,003.1\n2,385.9\n18,930.4\n*Nov\n7,145.7\n872.8\n8,018.6\n45.8\n0.0\n8,064.4\n79.9\n1,227.6\n0.0\n10.0\n0.0\n6,043.8\n2,013.3\n17,439.1\n*Dec\n8,227.9\n1,293.1\n9,521.0\n71.2\n0.0\n9,592.2\n79.9\n1,306.5\n0.0\n267.8\n0.0\n5,923.9\n2,566.2\n19,736.5\n2025\n*Jan\n7,694.3\n1,357.3\n9,051.7\n99.0\n0.0\n9,150.7\n79.9\n1,645.4\n0.0\n265.4\n13.2\n6,057.2\n3,170.6\n20,382.5\n*Feb\n7,981.1\n1,558.4\n9,539.5\n115.2\n0.0\n9,654.7\n3.9\n1,657.2\n0.0\n91.4\n0.0\n6,289.8\n1,753.5\n19,450.5\n*Mar\n8,530.5\n1,423.2\n9,953.7\n27.3\n0.0\n9,981.0\n0.4\n1,464.7\n0.0\n83.0\n0.0\n6,363.7\n1,844.9\n19,737.7\n Source:Reserve Bank of Zimbabwe, 2025\n* Statistics are denominated in ZiG\nAmounts Owing to\nTABLE 7.2: BUILDING SOCIETIES -LIABILITIES\nZWG millions\n40 \n \n \n TABLE 8.1: SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES\nZWG ('000)\n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISATIONS\n \n \n \n \n2021\nJan\n23,978,167.4\n610,696.1\n267,400.2\n9,997,383.0\n66,046.9\n9,811,097.6\n7,641,910.4\n7,176,323.0\n4,807,054.2\n1,685,871.1\n10,092,630.5\n47,525.6\n76,182,105.9\nFeb\n24,581,772.2\n653,205.5\n285,830.7\n10,330,772.0\n65,231.4\n10,024,935.1\n7,949,013.1\n6,754,180.2\n5,018,015.8\n1,766,077.9\n10,905,948.4\n47,678.1\n78,382,660.3\nMar\n28,741,816.7\n737,140.5\n320,102.5\n10,604,119.6\n76,828.9\n10,517,753.1\n9,428,559.8\n8,179,722.0\n5,701,289.5\n1,822,020.0\n12,528,176.5\n33,915.5\n88,691,444.6\nApr\n31,859,146.3\n675,080.9\n347,881.04\n12,101,683.3\n205,760.2\n12,046,268.5\n10,788,214.4\n8,802,924.2\n6,559,969.1\n1,831,534.4\n14,724,055.2\n36,984.3\n99,979,502.0\nMay\n34,645,328.6\n713,518.5\n292,339.8\n13,012,546.0\n70,347.7\n10,160,360.7\n11,287,317.4\n8,318,871.5\n7,438,997.6\n1,831,015.1\n17,169,532.7\n10,879.2\n104,951,054.8\nJune\n36,527,537.2\n993,308.6\n357,200.7\n14,622,859.3\n69,173.2\n12,832,747.3\n12,635,012.9\n7,938,660.3\n9,226,503.3\n1,903,845.8\n19,986,300.5\n40,765.7\n117,133,914.9\nJul\n39,160,305.6\n1,280,558.7\n411,253.9\n16,562,010.5\n62,624.8\n13,792,648.8\n12,583,048.9\n8,567,557.8\n10,717,151.0\n1,820,088.9\n22,581,130.3\n13,756.8\n127,552,136.1\nAug\n41,218,056.3\n1,372,177.0\n431,669.1\n15,667,033.1\n66,504.4\n14,701,546.3\n13,446,660.9\n8,828,791.2\n11,500,069.8\n1,942,139.4\n27,299,685.3\n15,470.3\n136,489,803.2\nSep\n41,133,553.7\n1,649,182.2\n433,781.1\n16,702,896.3\n321,991.2\n15,183,417.2\n15,271,161.9\n9,065,558.1\n11,973,442.3\n2,145,369.5\n30,851,901.8\n19,863.2\n144,752,118.4\nOct\n48,491,758.7\n1,644,045.1\n477,340.8\n20,072,721.7\n337,273.5\n16,644,705.0\n17,906,042.4\n10,150,149.7\n8,544,940.3\n2,418,354.8\n35,641,091.1\n17,894.6\n162,346,317.7\nNov\n48,945,526.6\n1,598,923.1\n394,575.8\n20,998,777.0\n434,931.6\n16,621,266.4\n19,372,274.1\n10,802,887.6\n8,904,904.9\n2,882,220.1\n40,009,482.2\n18,275.2\n170,984,044.5\nDec\n54,028,791.8\n1,778,880.5\n556,046.6\n24,450,917.2\n570,685.1\n10,955,470.2\n22,025,406.6\n10,538,491.2\n14,437,886.1\n2,996,425.0\n43,047,088.4\n29,601.2\n185,415,689.9\n2022\nJan\n58,163,723.8\n2,180,551.5\n576,438.1\n26,576,317.7\n366,231.4\n8,887,534.5\n23,074,734.8\n11,840,524.9\n15,743,736.5\n3,516,259.7\n47,325,078.3\n29,564.7\n198,280,695.9\nFeb\n59,500,669.7\n2,289,260.8\n618,640.1\n27,925,301.7\n641,435.0\n9,370,886.7\n27,976,121.6\n13,027,815.1\n20,505,827.5\n3,747,288.3\n51,007,737.3\n19,692.3\n216,630,676.1\nMar\n66,551,117.8\n2,538,377.1\n656,335.5\n29,688,979.7\n660,584.5\n10,903,917.1\n32,629,411.6\n15,688,496.1\n38,075,386.7\n4,471,441.5\n58,500,950.7\n802,168.3\n261,167,166.6\nApr\n74,441,781.1\n4,219,500.3\n1,441,218.1\n33,136,441.4\n673,885.9\n13,157,284.3\n34,426,878.3\n18,261,710.3\n39,043,359.8\n5,001,307.2\n63,176,517.9\n40,089.6\n287,019,974.2\nMay\n101,753,100.1\n5,120,524.8\n3,358,419.2\n50,514,059.3\n760,401.2\n12,433,390.5\n42,057,624.5\n28,724,818.4\n48,088,662.7\n6,286,840.2\n76,655,600.2\n34,456.8\n375,787,897.7\nJun\n118,753,589.0\n6,209,658.5\n2,293,665.5\n64,942,950.0\n869,273.2\n23,897,585.0\n58,442,367.2\n37,195,284.1\n62,467,707.8\n9,414,912.5\n96,536,183.0\n43,204.2\n481,066,380.0\nJul\n133,779,414.0\n7,610,614.1\n3,684,426.1\n77,836,080.2\n938,368.0\n30,537,998.0\n69,408,788.7\n46,181,587.4\n72,642,938.5\n10,449,582.5\n111,094,524.5\n46,145.7\n564,210,467.8\nAug\n165,210,571.4\n10,163,176.7\n2,624,492.88\n93,899,073.6\n1,266,729.8\n39,544,245.3\n87,691,102.8\n58,330,938.2\n97,552,420.8\n10,450,507.1\n131,625,765.3\n154,457.6\n698,513,481.5\nSep\n201,167,878.5\n11,330,918.8\n5,038,300.4\n110,956,484.0\n1,297,748.5\n44,492,682.7\n101,816,518.3\n92,708,096.4\n88,483,494.4\n11,685,667.9\n152,934,863.3\n276,752.3\n822,189,405.6\nOct\n223,506,677.7\n12,026,669.5\n4,229,873.3\n113,451,159.2\n1,302,041.3\n46,399,745.2\n110,333,025.8\n79,715,558.1\n89,501,330.5\n9,611,322.3\n175,816,703.6\n178,607.8\n866,072,714.2\nNov\n232,953,535.1\n16,431,625.9\n11,131,139.8\n118,284,970.8\n1,687,527.0\n42,192,397.3\n124,017,335.4\n75,874,234.7\n94,636,395.6\n12,440,947.3\n207,085,835.5\n197,473.3\n936,933,417.8\nDec\n253,185,165.2\n19,199,455.9\n10,466,455.0\n135,037,685.1\n1,551,994.2\n70,805,600.3\n136,576,579.6\n94,115,141.7\n123,404,532.1\n12,079,018.7\n235,371,108.1\n173,717.1\n1,091,966,452.8\n2023\nJan\n299,237,745.1\n22,096,826.9\n11,001,194.94\n154,399,125.0\n2,073,794.8\n72,677,263.1\n165,905,496.5\n124,259,994.3\n140,303,195.4\n16,560,714.3\n290,446,774.7\n286,968.1\n1,299,249,093.1\nFeb\n333,081,520.8\n26,349,752.5\n12,607,980.8\n168,969,321.4\n3,232,834.7\n79,874,665.8\n198,087,465.1\n146,996,948.4\n150,078,778.0\n18,960,512.9\n335,439,856.5\n415,659.5\n1,474,095,296.5\nMar\n411,138,419.1\n28,795,432.6\n14,081,946.7\n184,250,094.2\n3,256,927.2\n101,507,881.5\n232,125,042.8\n168,374,643.7\n159,301,093.2\n20,786,447.1\n364,183,808.4\n229,595.5\n1,688,031,331.8\nApr\n411,638,425.6\n28,865,765.5\n14,081,964.7\n184,833,219.7\n3,256,927.2\n101,507,881.5\n235,076,590.9\n168,374,757.6\n159,310,920.5\n20,785,827.2\n365,366,760.5\n229,595.5\n1,693,328,636.3\nMay\n726,348,772.4\n78,828,771.5\n44,800,380.0\n409,618,602.9\n6,584,930.1\n226,467,642.5\n583,387,051.3\n480,909,418.5\n381,628,891.5\n62,593,512.5\n757,858,742.6\n267,815.4\n3,759,294,531.0\nJun\n1,385,380,571.7\n173,918,051.5\n114,682,839.69\n1,119,448,698.2\n23,922,347.4\n571,712,604.7\n1,309,324,347.9\n1,111,326,640.1\n808,734,970.2\n129,722,475.7\n1,754,989,459.0\n444,788.0\n8,503,607,794.2\nJul\n1,088,372,491.6\n132,529,236.3\n101,023,084.2\n843,805,813.7\n21,291,030.4\n370,922,779.8\n1,037,949,287.4\n824,419,062.0\n646,244,001.7\n87,491,103.6\n1,451,125,105.6\n356,098.9\n6,605,529,095.1\nAug\n1,104,126,310.1\n133,512,317.7\n105,426,999.2\n683,402,044.9\n21,345,225.8\n393,145,008.1\n1,077,529,295.3\n824,970,068.6\n716,638,286.7\n85,309,683.4\n1,543,461,599.3\n382,505.3\n6,689,249,344.4\nSep\n1,336,413,273.4\n158,136,405.6\n121,080,865.9\n752,199,791.2\n28,592,532.7\n465,470,715.5\n1,334,020,478.9\n1,012,670,250.7\n799,826,458.0\n102,238,002.6\n1,857,297,850.0\n586,991.0\n7,968,533,615.5\nOct\n1,461,090,986.5\n163,948,853.9\n120,153,516.7\n935,064,277.1\n24,681,683.2\n520,361,009.0\n1,381,206,351.2\n1,092,469,043.7\n859,550,943.1\n118,799,556.9\n2,126,512,435.0\n627,911.8\n8,804,466,568.2\nNov\n1,397,804,072.5\n171,337,302.5\n117,526,650.42\n1,017,731,862.9\n26,161,720.1\n535,490,381.0\n1,401,587,612.9\n992,371,783.2\n885,248,702.8\n129,500,343.7\n2,255,158,373.7\n621,795.6\n8,930,540,600.9\nDec\n1,360,816,417.4\n179,675,138.5\n121,167,248.1\n1,077,783,652.1\n46,946,926.9\n551,786,675.3\n1,483,619,833.9\n1,207,471,368.5\n863,309,236.7\n136,388,007.8\n2,458,239,172.8\n644,093.7\n9,487,847,771.7\n2024\nJan\n2,212,746,050.3\n265,031,131.4\n214,923,355.9\n1,663,240,228.2\n110,086,710.6\n875,780,504.1\n2,505,473,968.4\n1,910,394,449.6\n1,256,413,922.9\n237,647,459.8\n3,945,256,597.2\n1,037,343.5\n15,198,031,722.0\nFeb\n3,435,102,730.5\n426,536,836.7\n249,129,096.2\n2,383,796,904.4\n171,219,221.6\n1,264,658,167.3\n3,631,856,467.6\n2,844,642,895.8\n2,043,483,472.0\n352,320,643.5\n5,491,307,643.3\n1,518,795.1\n22,295,572,874.1\nMar\n4,949,814,064.7\n642,860,845.9\n452,924,544.6\n3,642,287,181.9\n251,866,635.2\n1,943,457,910.8\n5,387,453,048.3\n3,991,233,867.5\n3,178,219,935.6\n543,942,248.6\n8,278,044,179.1\n2,267,159.0\n33,264,371,621.3\n*Apr\n2,882,347.0\n371,595.0\n188,567.1\n3,081,028.9\n188,277.0\n1,174,215.3\n3,077,908.8\n2,281,800.0\n1,782,566.6\n399,652.2\n4,922,516.8\n1,655.4\n20,352,130.1\n*May\n3,549,471.2\n448,072.0\n196,408.6\n3,013,508.3\n181,989.4\n1,239,894.9\n3,619,936.0\n2,302,326.8\n1,793,582.3\n494,669.1\n5,661,322.4\n5,002.2\n22,513,367.9\n*Jun\n3,286,172.5\n496,282.6\n213,057.3\n3,210,670.4\n230,521.5\n1,418,401.0\n3,457,122.9\n1,954,112.0\n1,946,800.0\n567,017.7\n6,019,427.0\n1,771.4\n22,801,356.4\n*Jul\n3,487,382.6\n511,490.7\n202,186.1\n3,350,580.0\n163,104.4\n1,304,409.1\n3,570,513.3\n2,117,767.2\n2,347,954.2\n568,049.1\n6,348,713.3\n2,029.5\n23,985,090.6\n*Aug\n3,858,128.5\n496,920.1\n197,595.1\n3,160,166.1\n163,179.6\n1,353,221.2\n3,891,826.5\n2,259,346.5\n2,064,398.1\n355,517.6\n7,019,997.3\n1,626.5\n24,821,923.1\n*Sep\n6,672,075.1\n1,240,260.2\n365,299.0\n5,024,077.0\n274,548.6\n2,326,667.5\n6,387,958.1\n4,331,429.1\n3,418,807.3\n640,082.1\n11,884,283.8\n2,603.2\n42,568,091.0\n*Oct\n7,858,559.5\n1,469,928.3\n481,828.8\n5,465,309.0\n320,115.1\n2,603,522.8\n7,340,600.9\n5,249,584.6\n3,667,687.2\n726,009.2\n13,568,052.5\n3,070.1\n48,754,267.9\n*Nov\n7,180,366.7\n1,328,085.6\n428,978.8\n5,025,733.7\n284,239.9\n2,457,448.5\n6,759,835.7\n4,209,879.6\n3,928,182.1\n680,905.2\n13,074,981.8\n2,309.4\n45,360,946.8\n*Dec\n7,297,552.8\n1,289,292.1\n385,875.0\n4,973,856.6\n262,219.7\n2,513,526.6\n6,746,914.0\n4,827,984.5\n3,694,327.9\n706,439.7\n13,280,443.5\n2,262.8\n45,980,695.3\n2025\n*Jan\n7,678,298.7\n1,196,038.2\n409,696.0\n5,047,238.2\n306,809.7\n2,664,917.4\n6,434,242.4\n4,757,437.7\n4,086,971.0\n769,886.0\n13,569,651.2\n1,922.0\n46,923,108.5\n*Feb\n8,299,274.7\n1,201,875.8\n399,492.6\n4,830,538.6\n300,587.1\n2,770,286.7\n6,503,215.4\n4,803,609.8\n4,292,425.8\n746,491.4\n13,140,132.5\n1,960.5\n47,289,890.9\n*Mar\n8,326,930.9\n1,244,718.8\n402,708.0\n5,041,144.6\n317,777.5\n2,491,912.4\n6,543,198.9\n4,375,136.1\n5,262,596.6\n744,228.0\n13,809,533.3\n1,950.1\n48,561,835.1\nSource:Reserve Bank of Zimbabwe,2025\n*Statistics are denominated in ZiG\n41 \n \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL&INV\nESTMENT\nFINANCIAL ORG\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\n2021\nMar\n12,086,596.9\n5,009,117.9\n15,457,881.6\n33,668,114.2\n7,879,623.6\n17,019,379.3\n29,927,193.1\n12,664,366.4\n68,761,992.2\n4,513,060.2\n25,352,486.1\n371,874.6\n232,711,686.2\nApr\n14,293,712.8\n6,264,137.3\n17,624,611.6\n35,860,252.5\n7,955,587.7\n18,411,151.8\n32,890,743.1\n11,445,151.9\n81,410,668.9\n4,248,558.7\n27,176,673.5\n411,001.0\n257,992,250.8\nMay\n14,731,869.5\n5,542,211.6\n19,231,383.7\n37,283,237.7\n7,903,622.6\n19,756,317.3\n33,027,214.9\n22,796,168.0\n84,596,653.5\n4,504,355.7\n28,445,264.8\n378,185.1\n278,196,484.5\nJun\n15,628,935.5\n6,154,316.5\n20,722,752.3\n39,604,431.5\n7,861,552.7\n21,455,061.8\n36,502,664.4\n23,449,074.9\n92,196,178.9\n4,756,434.9\n29,731,644.5\n415,508.6\n298,478,556.4\nJul\n14,899,561.1\n6,742,913.7\n25,082,739.8\n39,720,936.0\n9,580,503.8\n24,570,676.0\n38,875,306.1\n31,312,003.2\n94,151,108.5\n5,021,547.7\n32,324,374.5\n568,402.6\n322,850,073.2\nAug\n14,056,945.2\n6,611,127.0\n26,897,316.6\n39,624,666.3\n9,778,338.9\n27,046,621.0\n40,693,944.2\n26,504,554.0\n84,766,848.1\n4,915,399.2\n33,960,935.1\n645,902.4\n315,502,598.2\nSep\n14,777,285.5\n6,264,492.1\n27,413,062.1\n45,375,795.4\n10,337,697.2\n25,786,388.3\n43,113,093.0\n30,700,846.4\n95,985,614.8\n5,605,871.7\n37,606,703.5\n687,817.2\n343,654,667.4\nOct\n14,923,669.7\n8,437,829.5\n26,583,413.6\n47,841,912.8\n11,477,927.2\n29,796,762.9\n51,676,553.8\n49,115,499.0\n111,611,484.2\n5,940,819.2\n35,043,857.0\n618,831.0\n393,068,560.0\nNov\n14,147,912.2\n7,546,852.9\n27,174,334.3\n44,238,573.4\n11,949,923.7\n27,199,271.6\n52,401,389.3\n49,817,772.3\n115,576,831.0\n5,911,967.6\n37,770,843.3\n751,068.7\n394,486,740.3\nDec\n16,522,401.6\n9,204,283.5\n26,835,545.0\n47,381,404.7\n15,303,976.8\n43,092,763.3\n57,822,911.0\n61,555,101.2\n122,091,550.6\n6,093,367.4\n40,046,246.7\n1,319,573.7\n447,269,125.4\n2022\nJan\n17,399,268.4\n9,928,816.1\n28,146,847.2\n46,285,881.1\n15,060,177.5\n34,087,881.4\n60,888,346.7\n38,232,883.7\n135,579,116.5\n6,454,492.6\n32,504,960.5\n745,336.0\n425,314,007.6\nFeb\n20,260,983.5\n9,641,974.7\n32,159,803.2\n50,825,844.5\n15,235,028.5\n35,068,548.5\n49,157,612.2\n43,769,515.0\n146,423,512.2\n7,768,846.5\n36,257,364.0\n724,522.4\n447,293,555.2\nMar\n22,638,817.9\n11,683,937.4\n34,271,841.3\n61,002,811.6\n20,352,647.3\n34,501,628.6\n57,839,997.3\n60,678,395.3\n173,444,002.6\n9,467,563.9\n43,160,654.7\n970,393.8\n530,012,691.6\nApr\n26,926,844.7\n12,304,918.4\n34,924,202.5\n67,201,357.8\n21,444,798.1\n38,606,872.2\n61,303,321.1\n64,980,792.3\n216,612,532.7\n10,455,473.9\n45,951,692.0\n939,217.9\n601,652,023.6\nMay\n39,564,579.0\n21,954,770.2\n42,666,739.4\n108,620,498.7\n28,757,840.8\n54,108,110.4\n88,717,845.2\n107,568,244.7\n291,739,801.6\n14,310,137.6\n65,853,453.1\n1,190,747.9\n865,052,768.6\nJun\n45,956,287.6\n26,686,177.1\n47,155,850.8\n128,881,143.6\n23,783,755.2\n60,238,450.0\n105,247,922.5\n120,389,796.0\n326,034,986.6\n17,068,663.5\n108,828,797.1\n1,325,268.7\n1,011,597,098.7\nJul\n40,699,352.1\n28,329,526.0\n45,417,841.1\n128,847,329.1\n21,958,796.0\n62,326,844.4\n103,536,398.9\n112,642,685.5\n401,574,353.3\n17,902,000.2\n112,555,899.5\n1,117,408.2\n1,076,908,434.3\nAug\n68,438,409.6\n39,107,020.5\n53,616,955.7\n171,501,037.8\n25,370,674.6\n68,913,237.2\n162,326,617.3\n137,243,494.6\n538,409,018.4\n23,523,309.1\n146,121,882.2\n1,197,164.4\n1,435,768,821.4\nSep\n81,174,128.7\n51,501,554.8\n58,104,791.5\n204,056,688.7\n63,246,197.1\n174,562,749.5\n172,521,502.9\n138,936,277.9\n626,755,883.0\n25,607,188.8\n182,077,675.0\n11,177,650.8\n1,789,722,288.7\nOct\n83,201,043.6\n63,984,990.3\n67,031,137.9\n207,367,773.6\n40,617,325.3\n155,873,800.6\n179,051,392.6\n157,121,308.5\n575,293,016.5\n27,092,268.9\n201,852,712.9\n3,193,614.1\n1,761,680,384.8\nNov\n88,153,064.5\n61,978,896.6\n78,744,677.0\n236,152,455.1\n39,915,042.9\n100,872,718.3\n214,281,243.0\n200,240,592.5\n606,580,960.9\n32,903,876.7\n233,604,874.7\n119,223.2\n1,893,547,625.4\nDec\n106,799,918.4\n60,886,327.3\n73,518,960.3\n260,923,049.6\n48,959,835.1\n122,528,998.7\n242,741,914.1\n171,982,170.1\n747,151,447.2\n37,453,518.8\n270,164,633.8\n10,753,958.6\n2,153,864,731.9\n2023\nJan\n114,820,700.8\n79,460,381.9\n82,589,902.3\n305,204,829.9\n45,118,619.6\n135,072,311.1\n263,222,364.1\n223,632,204.7\n896,980,184.3\n37,534,722.0\n288,326,194.2\n7,916,696.9\n2,479,879,111.8\nFeb\n118,375,609.7\n85,995,682.6\n93,761,236.2\n312,626,341.5\n56,688,432.6\n147,245,179.4\n266,610,300.9\n273,709,371.2\n938,437,753.7\n39,909,193.6\n292,841,727.2\n6,842,518.8\n2,633,043,347.3\nMar\n119,963,933.2\n85,731,698.4\n100,697,025.6\n322,453,843.0\n45,619,349.1\n148,455,496.2\n286,712,763.6\n273,572,570.9\n1,064,798,433.6\n44,685,590.6\n330,031,150.7\n14,190,575.5\n2,836,912,430.3\nApr\n131,146,380.3\n89,322,733.6\n99,723,066.8\n324,249,300.1\n45,619,349.1\n149,245,957.9\n289,670,780.4\n273,578,020.7\n1,072,456,655.2\n44,926,335.6\n331,068,417.4\n14,190,575.5\n2,865,197,572.7\nMay\n269,460,363.1\n210,867,012.3\n216,906,304.0\n631,589,937.9\n113,357,505.7\n362,294,051.4\n581,761,350.4\n545,536,680.6\n2,504,454,969.8\n102,648,366.2\n702,960,786.4\n28,985,518.4\n6,270,822,846.4\nJun\n581,642,309.8\n428,772,683.4\n410,699,487.7\n1,366,510,052.6\n227,784,986.6\n700,617,673.8\n1,094,382,949.6\n1,185,026,806.7\n5,283,380,622.2\n199,474,750.2\n1,564,762,675.1\n40,673,167.4\n13,083,728,165.1\nJul\n535,377,934.4\n436,808,429.5\n413,150,824.0\n1,394,747,348.2\n206,866,966.8\n711,462,740.8\n1,157,802,106.8\n982,808,623.8\n4,533,520,705.6\n184,470,180.5\n1,464,856,207.2\n37,277,944.9\n12,059,150,012.5\nAug\n537,439,303.1\n422,479,784.1\n413,226,172.3\n1,343,458,227.8\n285,743,813.6\n662,607,567.9\n1,197,898,912.2\n1,004,826,660.3\n4,639,684,933.9\n209,521,849.6\n1,553,047,811.0\n38,718,344.9\n12,308,653,380.6\nSep\n632,283,427.7\n491,562,911.4\n426,060,663.5\n1,510,241,869.9\n296,604,785.0\n789,587,698.1\n1,300,914,518.5\n1,250,791,974.4\n5,214,851,978.1\n217,382,274.5\n1,781,106,637.9\n43,583,660.4\n13,954,972,399.2\nOct\n721,203,425.9\n541,011,315.6\n554,440,420.1\n1,657,817,920.3\n309,251,239.3\n841,367,968.7\n1,438,592,170.7\n1,187,082,973.9\n5,659,995,585.3\n260,248,908.5\n1,906,411,104.9\n49,647,602.0\n15,127,070,635.2\nNov\n703,080,882.8\n566,993,243.1\n532,803,998.3\n1,698,467,822.7\n346,291,934.3\n269,835,136.3\n1,554,832,195.3\n1,195,274,632.9\n6,063,945,343.0\n293,942,495.1\n2,031,657,547.5\n46,866,707.1\n15,885,967,935.9\nDec\n605,605,541.7\n423,493,370.4\n730,799,100.8\n1,549,938,533.1\n553,801,063.2\n767,650,016.2\n1,254,233,648.4\n1,348,969,145.1\n6,689,372,974.4\n247,647,472.3\n2,091,666,965.1\n53,713,528.9\n16,882,080,093.7\n2024\nJan\n833,932,128.8\n694,796,940.8\n1,029,474,123.2\n2,082,328,111.9\n884,819,488.9\n2,004,818,592.2\n1,699,026,894.5\n1,837,959,924.5\n12,124,252,579.3\n323,794,777.4\n3,044,604,553.8\n71,184,543.7\n26,630,992,659.0\nFeb\n1,156,065,718.2\n1,037,783,187.5\n1,369,731,749.1\n3,170,746,459.4\n114,038,016.4\n3,174,169,477.5\n2,227,190,946.8\n2,855,301,054.3\n15,834,462,125.0\n552,622,448.4\n4,294,792,965.3\n89,063,348.6\n36,904,967,496.7\nMar\n1,783,340,807.0\n1,442,504,457.6\n2,116,410,516.4\n4,588,105,383.9\n1,753,052,451.7\n4,712,657,212.6\n3,465,873,456.3\n3,573,833,122.5\n20,373,593,827.7\n1,006,777,059.1\n8,454,899,690.3\n100,278,506.8\n53,371,326,491.9\n*Apr\n1,476,289.1\n893,193.9\n1,388,298.4\n4,283,881.3\n1,092,218.9\n2,578,995.2\n2,513,192.9\n2,626,884.4\n11,782,151.6\n511,608.9\n5,775,025.0\n62,998.90\n34,984,738.5\n*May \n1,608,650.7\n1,037,123.0\n986,367.1\n3,197,388.6\n1,234,670.1\n3,669,306.6\n2,777,961.0\n2,424,631.2\n13,413,072.9\n726,100.9\n5,909,740.4\n55,506.53\n37,040,519.1\n*Jun\n1,578,119.3\n1,011,831.1\n1,759,648.1\n3,190,728.1\n1,134,620.4\n3,473,307.1\n2,999,644.4\n3,196,350.7\n15,181,074.6\n630,237.4\n5,302,910.1\n65,954.20\n39,524,425.4\n*Jul\n1,709,191.7\n1,060,814.6\n1,786,754.8\n4,244,435.1\n1,695,144.9\n3,842,095.5\n2,685,658.4\n3,860,698.0\n15,154,833.8\n494,408.1\n5,163,064.3\n152,575.18\n41,849,674.3\n*Aug\n1,881,831.5\n1,096,949.9\n1,756,800.1\n4,115,344.7\n1,560,883.8\n5,160,947.6\n3,104,912.0\n2,628,465.5\n14,680,525.5\n510,741.8\n4,692,301.9\n147,285.45\n41,336,989.7\n*Sept\n2,676,045.3\n2,231,428.0\n3,076,033.4\n6,657,466.1\n2,618,571.1\n6,677,406.6\n4,328,506.2\n3,749,838.4\n26,389,976.5\n867,911.2\n8,373,719.2\n219,988.31\n67,866,890.4\n*Oct\n3,485,504.6\n2,567,255.6\n3,535,607.0\n7,474,589.9\n3,299,698.5\n7,968,221.0\n5,044,419.4\n5,097,867.0\n29,458,757.4\n1,018,065.8\n9,462,752.7\n220,427.14\n78,633,166.0\n*Nov\n3,092,857.2\n2,583,575.6\n3,658,337.2\n6,311,484.9\n3,319,494.6\n7,425,250.6\n6,381,558.4\n4,761,639.8\n27,173,979.3\n1,133,673.7\n8,782,149.6\n200,228.74\n74,824,229.7\n*Dec\n3,246,075.7\n3,000,089.4\n3,491,754.7\n6,900,913.5\n3,547,897.3\n7,345,227.1\n6,716,997.9\n4,549,008.0\n27,260,521.5\n1,099,879.7\n10,022,447.2\n355,894.47\n77,536,706.5\n2025\n*Jan\n2,906,778.3\n3,263,210.2\n3,335,010.3\n6,226,024.9\n3,652,381.3\n8,401,231.9\n6,022,841.9\n4,820,773.5\n27,794,296.0\n1,020,418.1\n9,522,378.0\n214,322.39\n77,179,666.7\n*Feb\n3,148,260.0\n2,765,476.2\n2,386,768.4\n6,142,552.8\n3,733,009.0\n8,301,324.6\n5,391,986.9\n4,799,925.6\n27,396,588.3\n1,120,196.8\n10,349,018.6\n257,727.50\n75,792,834.8\n*Mar\n2,931,379.2\n2,536,384.4\n2,998,500.2\n7,205,270.8\n4,098,816.7\n9,412,388.2\n5,090,011.1\n5,298,903.8\n30,409,375.8\n1,367,930.9\n10,495,733.3\n291,454.26\n82,136,148.6\nSource:Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\n TABLE 8.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \nZWG('000)\n42 \n \n \n End of \n ZETSS \n POS \n ATM \n MOBILE \n INTERNET \n End of \n ZETSS \n POS \n ATM \n MOBILE \n INTERNET \n2021\n2021\n Jan \n 255,551.32 21,042.23 2,300.31 35,349.13 66,624.38 \n Jan \n 720.03 9,849.33 228.95 94,691.39 872.24 \n Feb \n 226,335.83 22,882.64 2,288.90 36,434.44 63,598.24 \n Feb \n 805.99 12,309.28 527.83 90,078.04 754.86 \n Mar \n 320,422.14 28,569.92 3,316.59 44,523.99 86,463.87 \n Mar \n 1,112.80 15,178.81 751.04 105,271.97 1,003.73 \n Apr \n 288,958.76 30,071.50 2,807.02 44,131.56 90,580.45 \n Apr \n 951.67 15,184.98 605.53 97,253.26 1,040.08 \n May \n 361,427.10 36,765.06 3,193.67 49,745.80 89,471.34 \n May \n 1,029.79 16,511.28 664.43 103,708.73 994.81 \n Jun \n 388,757.52 38,540.10 3,200.04 51,437.41 115,145.66 \n Jun \n 1,076.92 14,797.88 581.86 99,349.63 982.07 \n Jul \n 379,659.93 45,808.07 2,489.07 57,565.84 145,026.95 \n Jul \n 1,028.17 15,217.56 550.97 102,587.60 980.77 \n Aug \n 397,539.02 52,853.87 4,086.04 60,908.40 159,206.60 \n Aug \n 1,045.02 14,624.45 475.41 105,269.73 955.77 \n Sep \n 477,933.57 52,262.68 4,179.52 64,139.24 181,194.82 \n Sep \n 1,193.13 15,397.64 492.21 104,141.94 2,092.60 \n Oct \n 481,180.88 53,165.93 3,839.95 65,329.02 197,972.49 \n Oct \n 1,114.18 18,207.42 434.49 107,294.58 2,342.61 \n Nov \n 621,896.69 56,025.31 4,877.03 63,017.52 252,407.92 \n Nov \n 1,144.91 17,435.88 477.03 98,386.51 2,322.92 \n Dec \n 747,035.61 67,903.92 4,705.45 76,511.57 264,749.24 \n Dec \n 1,220.28 20,029.57 519.50 106,428.62 2,580.64 \n2022\n2022\n Jan \n 802,677.72 55,961.62 5,074.74 53,456.29 218,545.32 \n Jan \n 957.90 15,480.23 439.87 83,661.76 1,902.89 \n Feb \n 672,722.97 59,581.58 5,607.02 66,811.97 238,910.83 \n Feb \n 981.01 15,190.39 433.68 78,916.08 1,895.33 \n Mar \n 961,452.00 75,050.75 7,882.23 82,886.94 342,168.72 \n Mar \n 1,242.33 16,967.63 519.12 87,501.09 2,128.58 \n Apr \n 976,617.19 89,192.57 8,391.54 89,671.98 293,204.61 \n Apr \n 1,073.00 15,906.24 457.99 82,673.39 1,937.64 \n May \n 1,205,990.00 110,807.30 13,712.78 106,881.76 469,185.15 \n May \n 1,213.50 16,069.94 477.80 78,385.20 2,001.20 \n Jun \n 1,601,225.31 134,550.97 18,810.59 123,721.28 618,347.53 \n Jun \n 1,190.30 15,304.67 474.16 75,631.66 1,705.09 \n Jul \n 1,754,111.97 170,480.64 20,413.15 172,562.48 713,401.10 \n Jul \n 1,115.80 16,063.84 517.03 88,030.56 1,866.70 \n Aug \n 2,334,295.00 152,343.37 31,418.59 178,188.87 826,377.12 \n Aug \n 1,028.04 13,686.77 489.08 76,957.81 1,623.75 \n Sep \n 2,793,056.56 177,701.71 35,144.35 202,368.06 872,807.43 \n Sep \n 1,084.61 13,818.44 455.52 71,362.13 2,225.19 \n Oct \n 2,728,731.30 186,478.90 50,202.30 209,758.00 622,412.80 \n Oct \n 969.30 12,986.80 510.90 67,641.70 1,825.40 \n Nov \n 3,370,779.90 202,876.20 61,086.70 213,295.30 734,610.60 \n Nov \n 1,001.40 12,324.10 499.90 59,151.50 2,430.20 \n Dec \n 3,310,814.90 246,783.60 76,872.00 249,516.40 1,106,346.50 \n Dec \n 1,013.60 14,316.90 616.70 60,584.50 2,469.80 \n2023\n2023\n Jan \n 3,289,379.32 240,010.34 68,386.68 238,455.31 1,107,756.41 \n Jan \n 918.88 11,733.99 444.00 48,617.07 1,692.96 \n Feb \n 3,050,933.28 219,437.84 73,672.28 245,282.55 1,202,998.52 \n Feb \n 886.75 10,301.47 479.91 43,326.51 1,895.81 \n Mar \n 5,068,223.68 308,609.08 85,343.38 328,822.35 1,517,972.57 \n Mar \n 1,092.60 13,216.99 593.97 50,037.43 1,927.14 \n Apr \n 5,294,044.55 341,571.29 79,754.60 355,007.31 1,517,972.57 \n Apr \n 907.55 14,375.14 526.73 47,171.67 1,982.93 \n May \n 6,275,310.72 518,333.86 173,170.74 532,078.61 3,274,968.53 \n May \n 1,119.24 12,808.69 576.68 49,143.18 2,233.62 \n Jun \n 17,059,664.04 882,362.57 615,190.92 1,210,486.16 6,640,627.10 \n Jun \n 1,050.21 10,190.63 606.04 45,488.80 1,212.97 \n Jul \n 17,859,586.39 1,033,836.89 541,445.55 1,620,242.78 6,077,538.29 \n Jul \n 942.67 8,226.82 1,777.10 42,648.82 993.68 \n Aug \n 17,955,865.49 1,017,990.47 649,827.89 1,440,537.41 6,244,772.44 \n Aug \n 888.00 8,434.65 653.58 42,648.82 977.54 \n Sep \n 18,690,087.00 1,221,725.29 773,363.92 1,672,654.21 7,746,084.35 \n Sep \n 964.06 9,658.95 703.55 45,148.73 1,061.36 \n Oct \n 19,808,639.10 1,264,577.16 826,681.17 5,116,902.86 8,661,662.90 \n Oct \n 949.14 9,449.30 618.97 50,640.61 904.41 \n Nov \n 23,685,304.81 1,429,269.50 901,515.57 1,999,069.40 9,557,300.70 \n Nov \n 924.50 9,525.69 623.29 52,332.44 1,048.50 \n Dec \n 26,396,219.43 1,805,050.47 1,092,682.60 2,604,059.19 10,150,615.33 \n Dec \n 924.47 11,845.97 776.49 56,450.97 1,026.21 \n2024\n2024\n Jan \n 28,285,124.94 1,907,120.03 1,843,871.04 4,295,911.58 22,017,137.88 \n Jan \n 914.90 10,017.90 708.10 52,445.00 882.80 \n Feb \n 38,298,901.05 2,856,866.96 2,676,718.17 5,734,025.51 29,563,851.53 \n Feb \n 889.70 7,868.70 737.50 51,545.90 904.20 \n Mar \n 60,432,584.71 3,937,099.72 4,464,712.77 8,691,084.21 37,343,406.06 \n Mar \n 941.14 7,569.28 728.43 58,151.43 921.38 \n *Apr \n 41,317.54 2,063.05 2,797.06 4,754.91 15,996.48 \n *Apr \n 791.83 5,729.47 744.79 30,450.44 938.01 \n *May \n 53,741.28 3,335.65 3,355.39 7,058.05 22,545.40 \n *May \n 1,046.65 7,950.08 899.38 42,290.80 1,690.28 \n *Jun \n 51,046.38 3,281.73 3,230.95 6,470.44 22,040.12 \n *Jun \n 927.30 7,224.24 849.61 41,224.15 1,155.79 \n *Jul \n 63,526.12 3,956.03 3,646.28 7,361.68 27,328.40 \n *Jul \n 1,059.13 8,228.22 920.88 44,159.41 1,318.93 \n *Aug \n 54,975.89 3,973.70 3,937.26 7,555.92 25,760.62 \n *Aug \n 974.38 8,669.34 965.97 47,536.92 1,233.10 \n *Sep \n 6,504.55 4,685.21 5,331.36 1,194.06 38,798.22 \n *Sep \n 1,009.71 8,369.30 860.54 49,927.24 1,408.88 \n *Oct \n 109,554.74 6,900.07 6,836.32 16,082.35 50,983.09 \n *Oct \n 1,015.68 8,101.53 866.85 52,795.20 1,447.54 \n *Nov \n 107,345.13 7,074.56 6,940.40 15,645.29 47,876.36 \n *Nov \n 868.41 7,253.15 864.37 50,820.53 1,359.22 \n *Dec \n 123,594.82 7,954.46 8,665.18 17,068.54 50,613.24 \n *Dec \n 931.58 8,017.72 1,071.61 50,767.85 1,541.29 \n2025\n2025\n *Jan \n 105,337.90 7,252.43 6,858.89 14,579.45 44,760.80 \n *Jan \n 839.48 7,381.34 911.06 46,337.89 1,363.63 \n *Feb \n 92,208.69 5,961.25 6,364.85 14,208.89 43,833.14 \n *Feb \n 815.47 6,229.85 838.08 44,460.79 1,346.33 \n *Mar \n 112,646.31 6,785.32 7,339.83 17,156.03 47,320.62 \n *Mar \n 917.44 6,777.01 953.30 53,987.01 1,250.12 \nSource:Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\nTABLE 9.1 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY\nValues of Transactions (ZWG in millions)\nBLE 9.2 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIV\nVolumes of Transactions (in thousands)\n43 \n \n \n \nEnd of\nNominal Lending \nRates2\nIndividuals \nCorporate\nSavings\n3 Months2\n2021\n2021\nJan\n6.00-65.00\n32.65\n24.77\nJan\n0.22-12.00\n2.00-21.50\nFeb\n6.00-85.00\n36.67\n21.36\nFeb\n0.22-12.00\n2.00-21.50\nMar\n6.00-85.00\n35.83\n22.61\nMar\n0.22-12.00\n2.00-21.50\nApr\n6.00-85.00\n35.22\n22.59\nApr\n0.22-12.00\n2.00-21.50\nMay\n6.00-85.00\n34.84\n21.76\nMay\n0.22-12.00\n2.00-21.50\nJun\n6.00-85.00\n36.25\n22.46\nJun\n0.25-12.00\n2.00-26.00\nJul\n6.00-85.00\n36.56\n21.66\nJul\n0.50-12.00\n2.00-26.00\nAug\n6.00-85.00\n41.06\n39.65\nAug\n0.50-12.00\n2.00-26.00\nSep\n6.00-85.00\n40.61\n39.50\nSep\n0.50-12.00\n2.00-26.00\nOct\n6.00-85.00\n41.86\n45.81\nOct\n0.50-12.00\n2.00-26.00\nNov\n6.00-8500\n39.13\n38.10\nNov\n0.50-12.00\n2.00-26.00\nDec\n6.00-8500\n39.34\n37.94\nDec\n0.50-12.00\n2.00-26.00\n2022\n2022\nJan\n15.00-8500\n39.32\n39.62\nJan\n0.50-12.00\n2.00-26.00\nFeb\n15.00-8500\n40.55\n64.02\nFeb\n0.50-12.00\n2.00-26.00\nMar\n15.00-8500\n40.74\n43.88\nMar\n0.50-12.00\n2.00-26.00\nApr\n15.00-8500\n38.15\n45.56\nApr\n0.50-12.50\n2.00-30.00\nMay\n15.00-8500\n38.01\n47.25\nMay\n0.50-12.50\n2.00-32.00\nJun\n15.00-8500\n38.45\n48.25\nJun\n0.50-12.50\n2.00-32.00\nJul\n80.00-240.00\n82.75\n165.45\nJul\n40.00\n80.00-92.00\nAug\n80.00-230.00\n88.46\n155.96\nAug\n40.00\n80.00-92.00\nSep\n100.00-230.00\n98.07\n158.46\nSep\n40.00\n80.00-92.00\nOct\n100.00-290.00\n99.37\n115.26\nOct\n40.00\n80.00-92.00\nNov\n100.00-290.00\n99.03\n110.97\nNov\n40.00\n80.00-92.00\nDec\n100.00-290.00\n99.02\n110.83\nDec\n40.00\n80.00-95.00\n2023\n2023\nJan\n100.00-240.00\n90.05\n116.03\nJan\n40.00\n80.00-110.00\nFeb\n65.00-230.00\n60.12\n80.88\nFeb\n30.00\n50.00-110.00\nMar\n65.00-230.00\n74.35\n81.46\nMar\n30.00\n50.00-110.00\nApr\n70.00-230.00\n74.48\n86.96\nApr\n30.00\n50.00-110.00\nMay\n70.00-230.00\n77.86\n83.61\nMay\n30.00\n50.00-110.00\nJun\n70.00-155.00\n76.33\n92.64\nJun\n30.00\n50.00-110.00\nJul\n64.00-155.00\n77.82\n94.80\nJul\n30.00\n50.00-110.00\nAug\n64.00-155.00\n77.63\n93.18\nAug\n30.00\n50.00-110.00\nSep\n64.00-160.00\n76.49\n92.69\nSep\n30.00\n50.00-110.00\nOct\n64.00-160.00\n71.72\n92.43\nOct\n30.00\n50.00-110.00\nNov\n64.00-160.00\n70.15\n93.15\nNov\n30.00\n50.00-110.00\nDec\n64.00-155.00\n69.02\n93.77\nDec\n30.00\n50.00-110.00\n2024\n2024\nJan\n70.00-230.00\n70.18\n95.24\nJan\n33.75\n50.00-110.00\nFeb\n70.00-230.00\n76.05\n93.76\nFeb\n33.75\n50.00-110.00\nMar\n70.00-230.00\n73.43\n91.40\nMar\n33.75\n50.00-110.00\n*Apr\n20.00-60.00\n25.91\n24.29\n*Apr\n5.22\n5.00-10.00\n*May\n10.00-60.00\n25.17\n24.52\n*May\n3.75\n5.00-10.00\n*Jun\n10.00-40.00\n24.89\n24.46\n*Jun\n3.75\n5.00-10.00\n*Jul\n20.00-40.00\n24.69\n24.44\n*Jul\n3.75\n5.00-10.00\n*Aug\n20.00-40.00\n24.42\n24.15\n*Aug\n3.75\n5.00-10.00\n*Sep\n20.00-40.00\n24.27\n23.92\n*Sep\n3.75\n5.00-10.00\n*Oct\n25.00-58.00\n38.49\n36.80\n*Oct\n3.75\n5.00-10.00\n*Nov\n25.00-58.00\n39.25\n34.29\n*Nov\n3.75\n5.00-10.00\n*Dec\n25.00-58.00\n41.03\n39.91\n*Dec\n3.54\n5.00-10.00\n2025\n2025\n*Jan\n25.00-58.00\n41.82\n40.13\n*Jan\n3.54\n5.00-25.00\n*Feb\n25.00-58.00\n43.00\n40.45\n*Feb\n3.81\n5.00-25.00\n*Mar\n20.00-58.00\n42.33\n40.42\n*Mar\n3.81\n5.00-25.00\n Source:Reserve Bank of Zimbabwe, 2025\nNotes\n*Statistics are denominated in ZiG\n3. Lending rates exclude rates on staff loans. \n TABLE 10.2 : BANKS DEPOSIT RATES (percent per annum)1\n1. The range of rates qouted by banks during the period.\n2. Three (3) months deposit rates revised to exclude rates on \ninactive or dormant accounts.\nTABLE 10.1: LENDING RATES (percent per annum)1\n1. Table revised, to separate weighted lending rates for individuals and \ncorporate bodies. \n2. Nominal Lending Rates depict the range of rates quoted by banks.\nWeighted Average Lending Rates3 \nCommercial Banks\nCommercial Banks\nEnd of \n44 \n \n \nEnd of\nAll Share\nMining\n Market Turnover ZWG \nmillion \nVolume of Shares\nMarket Capitalisation\n2021\nJan\n3,600.82\n4,356.74\n3,513.59\n2,477,166,688.00\n434,856.23\nFeb\n4,154.37\n6,683.44\n1,529.25\n149,031,800.00\n501,184.95\nMar\n4,489.47\n5,315.39\n4,517.14\n203,633,747.00\n531,742.64\nApr\n4,641.11\n5,061.28\n3,075.98\n223,494,202.00\n540,745.24\nMay\n5,428.28\n6,820.54\n3,917.41\n188,748,200.00\n634,011.15\nJun\n6,194.88\n6,211.49\n4,458.87\n248,500,624.00\n745,175.95\nJul\n6,818.29\n6,621.17\n2,921.32\n181,010,800.00\n803,900.15\nAug\n6,652.31\n6,115.85\n3,456.94\n147,232,800.00\n792,291.48\nSep\n8,580.16\n6,014.53\n4,730.25\n2,909,442,557.00\n1,032,472.92\nOct\n11,329.48\n6,652.04\n5,661.76\n108,843,000.00\n1,378,227.92\nNov\n 10,695.57\n7,193.11\n9,883.24\n791,653,520.00\n1,290,069.75\nDec\n12,079.74\n7,815.37\n17,577.25\n228,225,060.00\n1,317,205.11\n2022\nJan\n12,079.74\n8,196.79\n3,704.23\n82,402,101.00\n1,475,217.45\nFeb\n14,990.42\n9,300.03\n7,979.35\n156,327,700.00\n1,863,028.60\nMar\n15,858.92\n11,289.34\n8,186.00\n117,815,800.00\n1,964,738.42\nApr\n28,391.75\n30,527.28\n11,366.89\n193,411,483.00\n3,547,347.52\nMay\n23,072.46\n20,021.24\n8,211.45\n195,475,400.00\n2,893,011.70\nJun\n19,791.94\n20,021.24\n14,570.16\n271,227,100.00\n2,439,165.45\nJul\n16,594.91\n20,021.24\n23,673.34\n239,937,180.00\n2,068,222.01\nAug\n13,705.12\n15,473.37\n8,674.85\n139,225,500.00\n1,685,592.28\nSep\n14,771.65\n18,929.75\n5,128.54\n137,092,750.00\n1,819,157.07\nOct\n15,072.14\n23,659.53\n8,657.90\n201,566,548.00\n1,826,101.68\nNov\n14,577.46\n25,478.67\n7,680.78\n90,311,600.00\n1,610,203.36\nDec\n19,493.85\n25,487.77\n27,753.79\n472,922,400.00\n2,044,869.14\n2023\nJan\n22,813.24\n25,496.86\n11,638.16\n102,792,200.00\n2,460,037.66\nFeb\n28,548.02\n29,207.92\n24,410.54\n164,006,458.00\n2,576,324.76\nMar\n38,568.48\n37,359.78\n14,262.67\n97,920,600.00\n3,381,456.06\nApr\n41,391.62\n36,393.55\n16,756.85\n74,505,000.00\n3,482,408.54\nMay\n108,195.29\n52,765.85\n34,867.41\n206,593,600.00\n8,939,058.47\nJun\n171,408.90\n76,960.49\n85,279.40\n192,473,571.00\n13,987,476.83\nJul\n114,746.13\n89,512.59\n40,846.72\n176,547,600.00\n9,171,346.28\nAug\n125,134.79\n109,159.36\n39,214.53\n103,854,600.00\n9,723,577.74\nSep\n126,642.42\n125,531.67\n91,310.72\n343,359,119.00\n9,873,493.87\nOct\n157,083.06\n125,531.67\n31,773.08\n64,000,500.00\n12,576,665.45\nNov\n191,271.68\n148,883.44\n54,864.31\n162,675,500.00\n15,311,628.01\nDec\n210,833.92\n145,542.27\n109,727.94\n254,991,213.00\n16,812,914.36\n2024\nJan\n542,743.66\n163,733.73\n112,532.73\n79,766,490.00\n43,459,150.79\nFeb\n525,570.76\n216,534.42\n103,474.44\n73,940,200.00\n41,499,016.93\nMar\n873,263.38\n218,308.09\n123,025.50\n54,297,600.00\n49,235,325.40\n2024\n*Apr\n98.82\n114.07\n22,304,968.92\n21,943,400.00\n28,571.12\n*May\n101.07\n114.07\n75,913,056.04\n58,831,200.00\n29,394.99\n*Jun\n128.64\n114.16\n99,811,029.44\n182,514,300.00\n38,710.43\n*Jul\n198.14\n253.49\n260,505,803.21\n93,603,100.00\n60,570.91\n*Aug\n200.49\n253.42\n164,625,190.80\n118,159,000.00\n61,448.73\n*Sep \n243.41\n251.68\n273,853,848.36\n257,091,400.00\n74,489.51\n*Oct\n289.12\n251.68\n502,844,477.92\n107,115,500.00\n89,605.28\n*Nov\n265.10\n235.38\n285,159,921.69\n72,864,500.00\n82,184.61\n*Dec\n217.58\n235.38\n225,234,021.52\n152,111,200.00\n66,241.20\n2025\n*Jan\n195.57\n229.61\n196,982,719.03\n187,781,200.00\n58,794.86\n*Feb\n204.06\n193.56\n506,135,991.02\n197,200,800.00\n62,060.95\n*Mar\n205.25\n143.95\n229,916,316.75\n92,886,500.00\n62,916.75\nSource:Zimbabwe Stock Exchange, 2025\n*Statistics are denominated in ZiG\n**As at 30 September 2020\nZWG\nTABLE 11: ZIMBABWE STOCK MARKET STATISTICS\nIndices\n*All Share index was \n45 \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHOUSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNICATION\nRECREATION &\nEDUCATION\nRESTAURANTS \n&\nMISC.\nTOTAL \nNON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.9\n4.3\n27.6\n5.3\n1.4\n8.4\n2.7\n2.3\n4.3\n1.1\n6.5\n68.7\n31.3\n100\n2021\nJan\n2.84\n1.59\n1.52\n4.26\n2.44\n2.57\n1.33\n-0.72\n1.69\n-0.48\n3.81\n2.14\n2.87\n2.33\nFeb\n1.27\n-0.30\n-1.71\n-0.49\n1.59\n1.07\n-1.60\n10.67\n-2.10\n-0.94\n0.55\n-0.16\n2.03\n0.41\nMar\n0.15\n-0.08\n1.24\n4.37\n-2.37\n0.65\n4.58\n-0.29\n0.02\n0.74\n-0.18\n0.99\n0.52\n0.87\nApr\n0.12\n-0.57\n0.45\n-0.05\n0.24\n0.70\n0.58\n-0.99\n17.14\n1.41\n-3.37\n0.87\n0.25\n0.71\nMay\n0.62\n2.41\n1.41\n0.84\n-0.02\n0.80\n0.07\n42.32\n1.32\n2.36\n0.65\n2.15\n0.28\n1.66\nJun\n1.64\n3.87\n9.35\n6.99\n1.48\n0.57\n0.97\n1.28\n4.88\n2.93\n1.92\n5.07\n2.37\n4.38\nJul\n1.29\n1.73\n0.51\n-0.08\n-0.69\n0.33\n0.10\n0.58\n-0.05\n-0.01\n1.15\n0.51\n0.06\n0.40\nAug\n1.73\n0.72\n1.03\n0.99\n1.14\n1.06\n3.56\n0.29\n-0.05\n2.11\n1.60\n1.10\n0.74\n1.01\nSep\n1.76\n0.08\n1.58\n1.43\n0.64\n0.01\n3.95\n0.87\n-0.78\n1.33\n1.53\n1.27\n2.30\n1.53\nOct\n1.51\n0.77\n0.84\n1.78\n0.72\n1.47\n7.45\n0.36\n2.11\n1.62\n0.91\n1.53\n3.51\n2.03\nNov\n0.85\n0.34\n1.47\n1.12\n0.68\n1.22\n4.43\n0.37\n-6.92\n1.67\n1.11\n0.96\n3.19\n1.53\nDec\n2.41\n0.98\n1.50\n1.30\n0.64\n-0.77\n0.26\n1.01\n0.03\n1.14\n2.05\n1.17\n1.99\n1.38\n2022\nJan\n1.08\n0.64\n2.14\n0.42\n0.71\n0.43\n1.51\n12.08\n0.94\n1.90\n0.11\n1.68\n2.53\n1.90\nFeb\n1.82\n3.39\n1.89\n1.79\n0.68\n1.08\n0.60\n0.92\n0.35\n1.39\n1.69\n1.76\n3.43\n2.20\nMar\n2.59\n2.24\n0.77\n1.22\n0.96\n5.86\n2.27\n0.82\n0.15\n1.02\n-0.06\n1.67\n3.05\n2.04\nApr\n3.38\n1.68\n14.21\n5.59\n1.77\n1.93\n1.73\n1.76\n2.91\n6.05\n1.87\n7.17\n6.94\n7.11\nMay\n3.70\n8.73\n2.02\n1.21\n2.46\n3.36\n2.47\n2.06\n0.48\n3.33\n3.78\n3.12\n9.56\n4.85\nJun\n8.20\n7.94\n12.49\n10.84\n13.72\n5.65\n4.95\n6.63\n4.63\n5.35\n9.86\n9.85\n17.32\n11.95\nJul\n4.57\n1.91\n8.66\n5.87\n3.74\n2.16\n1.21\n2.64\n11.86\n2.00\n2.15\n5.88\n12.09\n7.71\nAug\n3.71\n2.47\n2.01\n1.44\n1.98\n1.59\n1.91\n1.12\n0.41\n1.21\n2.93\n2.02\n4.94\n2.91\nSep\n-2.39\n-1.80\n5.21\n-3.33\n-0.66\n-1.20\n10.12\n0.36\n8.21\n-1.80\n-1.68\n1.99\n-3.23\n0.36\nOct\n0.81\n1.31\n6.74\n1.83\n0.72\n0.88\n2.83\n1.21\n0.10\n0.72\n0.68\n3.29\n2.10\n2.93\nNov\n-0.23\n0.35\n0.34\n0.60\n0.85\n0.25\n4.30\n0.48\n16.78\n19.32\n0.85\n1.71\n0.23\n1.27\nDec\n0.39\n0.76\n0.20\n-0.24\n0.03\n-0.15\n3.91\n-0.10\n0.00\n0.73\n-0.23\n0.28\n1.55\n0.66\n2023\nJan\n0.17\n-0.62\n0.81\n0.34\n0.26\n0.45\n-2.36\n0.45\n0.06\n-0.58\n0.54\n0.33\n-0.77\n0.00\nFeb\n-3.59\n-1.56\n-3.56\n-1.27\n-1.02\n-4.40\n-1.81\n-2.19\n0.06\n-3.63\n-7.55\n-3.40\n-4.54\n-3.73\nMar\n-0.57\n-0.46\n-0.01\n-0.71\n-0.10\n-0.13\n0.44\n-0.24\n0.16\n-0.16\n-0.42\n-0.18\n-0.66\n-0.32\nApr\n1.05\n0.05\n2.79\n-0.18\n0.92\n0.18\n0.59\n0.43\n0.53\n0.35\n0.55\n1.36\n1.96\n1.54\nMay\n3.05\n0.34\n3.03\n-0.08\n2.87\n1.74\n6.10\n1.65\n1.19\n0.99\n2.35\n2.34\n3.37\n2.64\nJun\n11.74\n0.93\n14.88\n-0.85\n9.19\n5.27\n23.88\n5.15\n3.07\n3.15\n6.58\n9.53\n18.23\n12.10\nJul\n1.68\n0.51\n0.36\n0.56\n-0.34\n0.69\n0.68\n-0.11\n1.04\n2.82\n1.11\n0.65\n1.85\n1.03\nAug\n-1.11\n-0.11\n-2.00\n-0.19\n-0.02\n-0.02\n-0.61\n-0.53\n-0.45\n-0.40\n-1.37\n-1.12\n-1.83\n-1.34\nSep\n0.32\n0.04\n0.34\n0.30\n-0.38\n0.63\n5.77\n-0.21\n5.97\n-0.10\n0.91\n0.91\n1.05\n0.95\nOct\n1.91\n1.10\n4.96\n0.54\n1.89\n2.81\n-2.69\n0.43\n-4.21\n0.53\n2.43\n2.48\n2.42\n2.46\nNov\n1.94\n0.60\n8.93\n-0.36\n2.45\n1.30\n3.24\n0.79\n4.28\n-0.67\n1.07\n4.39\n4.89\n4.54\nDec\n3.49\n1.41\n5.40\n0.63\n0.55\n0.86\n0.71\n1.92\n0.22\n1.07\n1.95\n2.90\n8.64\n4.70\n2024\nJan\n2.65\n-2.53\n5.48\n-1.30\n-3.17\n11.61\n-8.22\n-3.90\n5.52\n0.78\n-3.36\n2.50\n15.01\n6.58\nFeb\n3.31\n0.26\n4.84\n0.64\n2.77\n2.47\n8.40\n2.25\n1.67\n1.15\n3.35\n2.98\n9.83\n5.39\nMar\n2.48\n0.76\n4.89\n0.62\n2.44\n2.39\n10.08\n2.14\n2.02\n1.75\n2.85\n2.48\n8.13\n4.89\nApr\n1.35\n0.66\n3.69\n0.28\n0.77\n1.01\n2.60\n0.18\n6.85\n-0.26\n0.87\n4.19\n4.19\n2.94\n*May\n-6.05\n-1.36\n0.54\n-3.09\n-1.14\n-0.73\n0.65\n-2.60\n0.00\n-0.90\n-2.82\n-0.99\n-5.55\n-2.42\n*Jun\n-0.48\n0.82\n0.08\n0.21\n0.44\n0.84\n0.33\n-0.03\n0.17\n0.04\n0.21\n0.22\n-0.38\n0.04\n*Jul\n0.57\n0.89\n0.38\n-0.11\n0.45\n-0.45\n-2.41\n0.06\n0.37\n0.22\n0.09\n0.14\n-0.73\n-0.13\n*Aug\n2.31\n1.57\n0.20\n2.07\n1.19\n2.72\n-0.06\n1.41\n0.49\n1.24\n2.11\n1.14\n2.15\n1.44\n*Sep\n11.10\n3.65\n1.14\n6.71\n4.01\n5.70\n2.87\n6.26\n0.86\n4.45\n7.46\n3.89\n10.15\n5.78\n*Oct\n55.63\n44.94\n16.79\n39.81\n50.55\n38.72\n42.19\n49.16\n3.69\n30.79\n54.02\n31.75\n49.25\n37.25\n*Nov\n15.83\n15.10\n2.30\n15.16\n15.13\n13.80\n6.82\n17.47\n4.67\n10.69\n14.76\n9.67\n15.66\n11.72\n*Dec\n4.07\n6.71\n1.49\n3.19\n3.69\n3.57\n3.29\n2.46\n6.03\n3.61\n3.52\n3.19\n4.56\n3.67\n2025\n*Jan\n6.85\n4.51\n2.80\n30.66\n7.15\n3.96\n1.81\n7.91\n1.54\n0.00\n2.41\n5.75\n6.85\n10.50\n*Feb\n-0.32\n0.58\n0.22\n0.81\n0.93\n0.46\n0.57\n0.42\n1.25\n0.80\n-0.63\n0.27\n0.81\n0.46\n*Mar\n0.83\n0.15\n0.00\n-0.13\n0.93\n0.34\n-0.25\n-1.08\n2.43\n-0.53\n-0.22\n0.16\n-0.46\n-0.06\n Source:Zimstat, 2025\n*Statistics are in ZiG\nNON-FOOD INFLATION\nTABLE 12.1 : MONTHLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX\n( April 2024 = 100)\n46 \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHOUSING, WATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNICATION\nRECREATION &\nEDUCATION\nRESTAURANT\nS &\nMISC.\nTOTAL NON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, GAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100.00\n2021\nJan\n6.5\n7.1\n5.2\n5.6\n4.8\n6.3\n1.1\n0.0\n12.6\n7.4\n5.3\n-\n10.8\n7.3\nFeb\n6.1\n4.5\n2.6\n5.3\n4.7\n6.3\n-0.5\n10.0\n-1.6\n2.5\n5.7\n-\n9.1\n5.4\nMar\n4.3\n1.2\n1.0\n8.3\n1.6\n4.3\n4.3\n9.6\n-0.4\n-0.7\n4.2\n-\n5.5\n3.6\nApr\n1.5\n-1.0\n0.0\n3.8\n-0.6\n2.4\n3.5\n9.3\n14.7\n1.2\n-3.0\n-\n2.8\n2.0\nMay\n0.9\n1.7\n3.1\n5.2\n-2.1\n2.2\n5.3\n40.5\n18.7\n4.6\n-2.9\n-\n1.1\n3.3\nJun\n2.4\n5.8\n11.4\n7.8\n1.7\n2.1\n1.6\n42.7\n24.5\n6.8\n-0.9\n-\n2.9\n6.9\nJul\n3.6\n8.2\n11.5\n7.8\n0.8\n1.7\n1.1\n45.0\n6.2\n5.3\n3.8\n-\n2.7\n6.5\nAug\n4.7\n6.4\n11.0\n8.0\n1.9\n2.0\n4.7\n2.2\n4.8\n5.1\n4.7\n-\n3.2\n5.9\nSep\n4.8\n2.5\n3.1\n2.4\n1.1\n1.4\n7.8\n1.7\n-0.9\n3.5\n4.3\n-\n3.1\n3.0\nOct\n5.1\n1.6\n3.5\n4.3\n2.5\n2.6\n15.7\n1.5\n1.3\n5.2\n4.1\n-\n6.7\n4.6\nNov\n4.2\n1.2\n3.9\n4.4\n2.1\n2.7\n16.6\n1.6\n-5.7\n4.7\n3.6\n-\n9.3\n5.2\nDec\n4.8\n2.1\n3.9\n4.3\n2.1\n1.9\n12.5\n1.7\n-4.9\n4.5\n4.1\n-\n8.9\n5.0\n2022\nJan\n4.4\n2.0\n5.2\n2.9\n2.0\n0.9\n6.3\n13.6\n-6.0\n4.8\n3.3\n-\n7.9\n4.9\nFeb\n5.4\n5.1\n5.6\n3.5\n2.0\n0.7\n2.4\n14.2\n1.3\n4.5\n3.9\n-\n8.2\n5.6\nMar\n5.6\n6.4\n4.9\n3.5\n2.4\n7.5\n4.4\n14.0\n1.4\n4.4\n1.7\n-\n9.3\n6.3\nApr\n8.0\n7.5\n17.3\n8.8\n3.4\n9.1\n4.7\n3.5\n3.4\n8.6\n3.5\n-\n14.0\n11.7\nMay\n10.0\n13.0\n17.4\n8.2\n5.3\n11.5\n6.6\n4.7\n3.6\n10.7\n5.7\n-\n20.7\n14.6\nJun\n16.0\n19.3\n31.1\n18.4\n18.6\n11.3\n9.4\n10.7\n8.2\n15.4\n16.1\n-\n37.5\n25.7\nJul\n17.3\n19.6\n24.7\n18.8\n20.9\n11.6\n8.8\n11.7\n17.6\n11.0\n16.5\n-\n44.1\n26.4\nAug\n17.3\n12.7\n24.7\n19.0\n20.3\n9.7\n8.2\n10.7\n17.5\n8.8\n15.5\n-\n38.0\n24.1\nSep\n5.9\n2.6\n16.6\n3.8\n5.1\n2.5\n13.6\n4.2\n21.5\n1.4\n3.4\n-\n13.8\n11.2\nOct\n2.1\n1.9\n14.6\n-0.1\n2.0\n1.3\n15.4\n2.7\n8.8\n0.1\n1.9\n-\n3.7\n6.3\nNov\n-1.8\n-0.2\n12.7\n-1.0\n0.9\n-0.1\n18.1\n2.1\n26.5\n18.0\n-0.2\n7.1\n-1.0\n4.6\nDec\n1.0\n2.4\n7.3\n2.2\n1.6\n1.0\n11.4\n1.6\n16.9\n21.1\n1.3\n5.4\n3.9\n4.9\n2023\nJan\n0.3\n0.5\n1.4\n0.7\n1.1\n0.6\n5.8\n0.8\n16.8\n19.5\n1.2\n2.3\n1.0\n1.9\nFeb\n-3.0\n-1.4\n-2.6\n-1.2\n-0.7\n-4.1\n-0.4\n-1.8\n0.1\n-3.5\n-7.3\n-2.8\n-3.8\n-3.1\nMar\n-4.0\n-2.6\n-2.8\n-1.6\n-0.9\n-4.1\n-3.7\n-2.0\n0.3\n-4.3\n-7.4\n-3.3\n-5.9\n-4.0\nApr\n-3.1\n-2.0\n-0.9\n-2.1\n-0.2\n-4.4\n-0.8\n-2.0\n0.7\n-3.4\n-7.4\n-2.3\n-3.3\n-2.6\nMay\n3.5\n-0.1\n5.9\n-1.0\n3.7\n1.8\n7.2\n1.8\n1.9\n1.2\n2.5\n3.5\n4.7\n3.9\nJun\n16.4\n1.3\n21.7\n-1.1\n13.4\n7.3\n32.2\n7.3\n4.8\n4.5\n9.7\n13.6\n24.6\n16.8\nJul\n17.1\n1.8\n18.8\n-0.4\n11.9\n7.8\n32.3\n6.8\n5.4\n7.1\n10.3\n12.8\n24.5\n16.2\nAug\n12.4\n1.3\n13.0\n-0.5\n8.8\n6.0\n24.0\n4.5\n3.7\n5.6\n6.3\n9.0\n18.2\n11.7\nSep\n0.9\n0.4\n-1.3\n0.7\n-0.7\n1.3\n5.8\n-0.8\n6.6\n2.3\n0.6\n0.4\n1.0\n0.6\nOct\n1.1\n1.0\n3.2\n0.6\n1.5\n3.4\n2.3\n-0.3\n1.0\n0.0\n1.9\n2.3\n1.6\n2.0\nNov\n4.2\n1.8\n14.7\n0.5\n4.0\n4.8\n6.3\n1.0\n5.9\n-0.2\n4.5\n7.9\n8.6\n8.1\nDec\n7.5\n3.1\n20.5\n0.8\n5.0\n5.0\n1.2\n3.2\n0.1\n0.9\n5.5\n10.1\n16.7\n12.1\n2024\nJan\n8.3\n-0.6\n21.1\n-1.0\n-0.3\n14.0\n-4.6\n-1.3\n10.3\n1.2\n-0.4\n10.1\n31.0\n16.7\nFeb\n9.7\n-0.9\n16.6\n0.0\n0.1\n15.3\n0.2\n0.1\n7.5\n3.0\n1.8\n8.6\n37.2\n17.6\nMar\n8.7\n-1.5\n16.0\n0.0\n1.9\n17.1\n9.5\n0.4\n9.4\n3.7\n2.7\n8.7\n36.6\n17.8\n*Jul\n-6.0\n0.3\n1.0\n-3.0\n-0.3\n-0.4\n-1.5\n-2.6\n0.5\n-0.6\n-2.5\n-0.6\n-6.6\n-2.5\n*Aug\n2.4\n3.3\n0.7\n2.2\n2.1\n3.1\n-2.1\n1.4\n1.0\n1.5\n2.4\n1.5\n1.0\n1.4\n*Sep\n14.3\n6.2\n1.7\n8.8\n5.7\n8.1\n0.3\n7.8\n1.7\n6.0\n9.8\n5.2\n11.7\n7.2\n*Oct\n76.9\n52.6\n18.4\n52.3\n58.4\n50.6\n46.2\n60.7\n5.1\n38.3\n69.0\n38.4\n67.9\n47.3\n*Nov\n100.3\n72.9\n20.8\n71.8\n80.3\n66.9\n56.3\n86.2\n9.5\n51.2\n89.9\n50.1\n90.1\n62.2\n*Dec\n87.6\n78.0\n21.3\n66.1\n79.7\n63.5\n56.9\n79.5\n15.1\n50.0\n83.0\n49.1\n80.5\n59.0\n2025\n*Jan\n8.8\n9.7\n32.6\n10.6\n7.8\n5.4\n11.5\n4.0\n6.0\n6.1\n9.5\n16.1\n11.7\n14.6\n*Feb\n4.2\n3.4\n30.9\n8.0\n4.9\n2.3\n8.5\n2.0\n1.3\n3.2\n5.1\n12.8\n7.7\n11.0\n*Mar\n0.5\n0.7\n0.2\n0.7\n1.9\n0.8\n0.3\n-0.7\n3.7\n0.3\n-0.9\n0.4\n0.4\n0.4\nSource: ZIMSTAT, 2025\n* Statistics are for ZiG Inflation\nTABLE 12.2 : QUARTERLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \n(April 2024 = 100)\nNON-FOOD INFLATION\n47 \n \n \nFOOD \nINFLATION\nALCO HO LIC \nCLO T HING\nHO US ING , \nW AT E R,\nFURNIT URE\nMIS C.\nFO O D & \nB E VE RAG E S \n& \nE LE CT RICT Y, \nG AS\nAND\nRE CRE AT IO N &\nRE S T AURANT S \n&\nG O O DS &\nT O T AL NO N\nNO N \nALCO HO LIC \nALL\n& T O B ACCO\nFO O T W E AR\n& O T HE R\nE Q UIP ME NT\nCULT URE\nHO T E LS\nS E RVICE S\nFO O D\nB E VE RAG E S\nIT E MS\nFUE LS\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2021\nJan\n20.60\n-2.07\n36.36\n-1.28\n10.32\n-3.60\n128.10\n-5.01\n-21.25\n-30.63\n-23.35\n12.89\n17.44\n14.03\nFeb\n39.34\n9.50\n38.02\n12.01\n25.35\n8.60\n82.62\n14.90\n-32.54\n-21.66\n-17.59\n18.72\n29.84\n21.45\nMar\n14.17\n6.58\n29.52\n3.24\n5.87\n19.12\n92.07\n6.36\n6.81\n-2.73\n-7.44\n18.40\n22.51\n19.45\nApr\n14.30\n5.98\n30.11\n3.19\n6.13\n19.96\n93.18\n5.32\n25.12\n-1.35\n-10.56\n19.42\n22.82\n20.29\nMay\n15.83\n14.44\n20.88\n4.68\n16.10\n25.82\n102.08\n55.83\n36.63\n-3.32\n-9.20\n20.10\n22.47\n20.70\nJun\n12.75\n14.64\n22.39\n15.03\n9.18\n12.04\n70.11\n42.04\n30.41\n4.24\n-7.69\n19.04\n28.60\n21.31\nJul\n6.39\n11.64\n23.80\n10.15\n3.85\n6.95\n52.67\n52.59\n39.02\n13.15\n8.80\n18.71\n15.01\n17.76\nAug\n13.21\n12.09\n24.34\n11.12\n5.35\n6.76\n15.74\n59.33\n35.23\n16.34\n4.54\n18.18\n18.05\n18.15\nSep\n14.96\n12.70\n25.60\n16.41\n6.74\n12.34\n14.92\n60.58\n36.28\n21.35\n9.67\n20.76\n21.15\n20.86\nOct\n17.72\n16.64\n21.34\n23.27\n7.60\n13.62\n22.43\n60.80\n38.87\n20.39\n10.27\n21.05\n24.80\n21.99\nNov\n16.80\n14.54\n22.11\n24.82\n6.57\n13.72\n27.83\n60.49\n15.38\n17.92\n11.34\n20.15\n24.28\n21.19\nDec\n17.38\n12.07\n20.56\n24.61\n6.62\n10.09\n28.48\n61.86\n16.79\n14.71\n12.21\n19.00\n21.96\n19.76\n2022\nJan\n15.38\n11.03\n21.29\n20.02\n4.81\n7.80\n28.71\n82.72\n15.93\n17.46\n8.22\n18.46\n21.56\n19.26\nFeb\n16.00\n15.14\n25.74\n22.76\n3.87\n7.80\n31.58\n66.63\n18.83\n20.23\n9.44\n20.73\n23.23\n21.38\nMar\n18.84\n17.81\n25.15\n19.07\n7.41\n13.39\n28.67\n68.48\n18.98\n20.57\n9.57\n21.54\n26.32\n22.80\nApr\n22.71\n20.48\n42.29\n25.78\n9.04\n14.77\n30.15\n73.15\n4.52\n26.09\n15.50\n29.14\n34.75\n30.60\nMay\n26.46\n27.91\n43.15\n26.23\n11.74\n17.68\n33.27\n24.17\n3.66\n27.29\n19.09\n30.37\n47.22\n34.70\nJun\n34.62\n32.92\n47.25\n30.78\n25.21\n23.62\n38.51\n30.74\n3.41\n30.29\n28.37\n36.30\n68.72\n44.47\nJul\n38.99\n33.16\n59.19\n38.55\n30.80\n25.88\n40.04\n33.42\n15.74\n32.91\n29.63\n43.58\n89.00\n54.99\nAug\n41.70\n35.49\n60.73\n39.17\n31.89\n26.54\n37.81\n34.54\n16.27\n31.74\n31.34\n44.88\n96.89\n57.92\nSep\n35.93\n32.94\n66.48\n32.64\n30.19\n25.02\n45.99\n33.85\n26.81\n27.66\n27.17\n45.91\n86.25\n56.09\nOct\n35.00\n33.64\n76.23\n32.71\n30.19\n24.29\n39.72\n34.98\n24.31\n26.52\n26.89\n48.43\n83.72\n57.47\nNov\n33.55\n33.65\n74.26\n32.03\n30.42\n23.10\n39.54\n35.12\n55.96\n48.48\n26.56\n49.54\n78.43\n57.06\nDec\n30.92\n33.36\n72.02\n30.01\n29.63\n23.87\n44.62\n33.64\n55.91\n47.88\n23.73\n48.22\n77.66\n55.93\n2023\nJan\n29.74\n31.69\n69.78\n29.91\n29.05\n23.89\n39.11\n19.78\n54.56\n44.29\n24.25\n46.26\n71.94\n53.03\nFeb\n22.86\n25.38\n60.69\n26.01\n26.87\n23.89\n35.79\n16.09\n54.11\n37.14\n12.96\n38.85\n58.69\n44.14\nMar\n19.07\n22.07\n59.46\n23.60\n25.55\n23.89\n33.36\n14.86\n54.13\n35.54\n12.56\n36.31\n52.99\n40.80\nApr\n16.38\n20.11\n43.52\n16.85\n24.51\n23.89\n31.87\n13.36\n50.56\n28.25\n11.10\n28.93\n45.87\n33.48\nMay\n15.66\n10.84\n44.93\n15.37\n25.01\n23.89\n36.54\n12.90\n51.63\n25.34\n9.57\n27.96\n37.63\n30.68\nJun\n19.45\n3.65\n48.01\n3.20\n20.03\n23.89\n61.17\n11.33\n49.36\n22.73\n6.31\n27.58\n38.70\n30.85\nJul\n16.14\n2.22\n36.71\n-1.98\n15.30\n23.89\n60.33\n8.34\n34.91\n23.72\n5.22\n21.28\n26.03\n22.74\nAug\n10.74\n-0.36\n31.33\n-3.54\n13.04\n23.89\n56.36\n6.57\n33.75\n21.75\n0.82\n17.55\n17.90\n17.66\nSep\n13.82\n1.52\n25.26\n0.08\n13.36\n23.89\n50.18\n5.97\n30.99\n23.86\n3.48\n16.31\n23.12\n18.36\nOct\n15.06\n1.31\n23.16\n-1.20\n14.66\n7.28\n42.11\n5.15\n25.35\n23.64\n5.28\n15.40\n23.50\n17.82\nNov\n17.55\n1.56\n33.71\n-2.14\n16.48\n8.40\n40.66\n5.48\n11.94\n2.93\n5.52\n18.43\n29.24\n21.63\nDec\n21.19\n2.22\n40.65\n-1.28\n17.09\n9.49\n36.33\n7.61\n12.19\n3.27\n7.82\n21.52\n38.26\n26.52\n2024\nJan\n24.18\n0.25\n47.17\n-2.90\n13.08\n21.65\n28.14\n2.95\n18.31\n4.68\n3.64\n24.16\n60.25\n34.84\nFeb\n33.06\n2.10\n59.99\n-1.02\n17.41\n30.39\n41.46\n7.62\n20.22\n9.87\n15.86\n32.35\n84.37\n47.62\nMar\n37.15\n3.35\n67.82\n0.31\n20.39\n33.68\n55.04\n10.19\n22.44\n11.97\n19.67\n36.58\n100.68\n55.34\nApr\n37.55\n3.98\n69.28\n0.77\n20.20\n34.79\n58.13\n9.93\n30.14\n11.30\n20.06\n42.42\n105.07\n57.48\nSource: ZIMSTAT, 2024\nTABLE 12.3 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n(February 2019 = 100)\nCO MMUNICAT IO N\nT RANS P O RT\nHE ALT H\nE DUCAT IO N\nNON-FOOD INFLATION\n48 \n \n \n \n \n \n \n \n \nEnd of\nMar-24 Apr-24 May-24 Jun-24\nJul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24\nJan-25\nFeb-25 Mar-25\nMerchandise Imports (excl. energy)\n346.3\n \n353.8\n \n447.0\n \n373.4\n \n492.8\n \n408.6\n \n461.0\n \n503.2\n \n430.2\n \n420.1\n \n470.0\n \n363.2\n \n437.3\n \n- Consumption Goods\n100.6\n \n144.2\n \n163.2\n \n143.2\n \n154.3\n \n118.1\n \n166.3\n \n173.5\n \n160.7\n \n156.8\n \n143.9\n \n108.0\n \n119.5\n \n- Capital Goods\n135.2\n \n126.5\n \n165.2\n \n123.4\n \n174.3\n \n139.7\n \n144.1\n \n178.5\n \n143.3\n \n132.7\n \n142.2\n \n109.8\n \n143.8\n \n- Intermediate Goods\n110.4\n \n83.1\n \n118.6\n \n106.8\n \n154.3\n \n118.1\n \n166.3\n \n151.2\n \n126.2\n \n130.6\n \n184.0\n \n145.4\n \n174.1\n \nEnergy (Fuel & Electricity)\n131.4\n \n142.0\n \n155.1\n \n127.1\n \n159.2\n \n149.1\n \n143.7\n \n173.9\n \n148.4\n \n140.1\n \n185.4\n \n132.8\n \n146.7\n \nService Payments\n77.5\n \n71.7\n \n81.1\n \n79.6\n \n845.1\n \n102.1\n \n915.1\n \n100.9\n \n86.1\n \n87.3\n \n81.8\n \n85.1\n \n73.2\n \n- Technical, Professional & consult\n34.1\n \n26.9\n \n32.9\n \n25.2\n \n378.2\n \n512.8\n \n379.9\n \n32.7\n \n29.5\n \n42.4\n \n36.7\n \n33.7\n \n26.6\n \n- Software\n12.9\n \n8.9\n \n13.0\n \n12.7\n \n145.6\n \n134.5\n \n110.8\n \n20.8\n \n21.8\n \n17.3\n \n15.3\n \n15.8\n \n13.1\n \n- Other (tourism, edu, freight etc)\n30.5\n \n35.9\n \n35.2\n \n41.7\n \n321.3\n \n373.4\n \n424.5\n \n47.4\n \n34.8\n \n27.6\n \n29.8\n \n35.6\n \n33.5\n \nIncome Payments (Profits, Dividends)\n30.6\n \n28.3\n \n13.1\n \n23.7\n \n38.1\n \n858.6\n \n417.1\n \n20.4\n \n20.8\n \n58.5\n \n50.5\n \n32.6\n \n39.5\n \nCapital Remittances (outward)\n55.4\n \n49.0\n \n83.3\n \n48.8\n \n111.1\n \n735.7\n \n763.5\n \n59.8\n \n80.8\n \n102.8\n \n87.9\n \n53.9\n \n58.6\n \n- External Loan Repayments \n40.3\n \n31.6\n \n59.0\n \n41.8\n \n95.1\n \n60.3\n \n64.0\n \n46.3\n \n45.5\n \n76.9\n \n63.4\n \n38.4\n \n41.8\n \n- Disinvestments\n75.8\n \n6.4\n \n17.2\n \n2.6\n \n80.4\n \n10.8\n \n38.5\n \n5.9\n \n14.4\n \n17.6\n \n10.9\n \n11.8\n \n10.3\n \n- Cross Border Investment\n74.9\n \n11.0\n \n7.1\n \n4.4\n \n79.6\n \n24.9\n \n84.8\n \n7.6\n \n20.9\n \n8.3\n \n13.6\n \n3.8\n \n6.5\n \nOther Payments\n23.6\n \n7.9\n \n31.0\n \n22.3\n \n28.9\n \n20.3\n \n21.7\n \n21.3\n \n22.7\n \n22.7\n \n26.0\n \n32.1\n \n31.6\n \nTOTAL\n664.8\n \n652.8\n \n810.7\n \n675.0\n \n914.7\n \n839.5\n \n836.0\n \n879.5\n \n788.9\n \n831.5\n \n901.6\n \n699.6\n \n786.9\n \nSource:Reserve Bank of Zimbabwe, 2025\nTable 13.1: Monthly Cross Border Payments (US$ Millions)\n49 \n \n \nAgriculture\nHorticulture\nManufacturing\nMining\nTobacco\nTourism\n Transport & \nOther Services\nTotal\nEnd of \nTelecom\n2021\nJan\n24.0\n3.4\n8.5\n496.8\n25.0\n0.6\n6.5\n1.9\n566.6\nFeb\n11.4\n2.0\n14.3\n384.3\n24.9\n0.5\n6.8\n1.0\n445.2\nMar\n17.7\n2.2\n12.1\n221.7\n28.3\n1.3\n23.8\n0.8\n307.8\nApr\n5.5\n1.6\n12.3\n290.2\n19.0\n0.5\n10.9\n0.5\n340.3\nMay\n11.4\n2.1\n10.9\n261.1\n20.7\n2.0\n13.3\n0.9\n322.2\nJun\n6.0\n3.2\n14.0\n249.0\n20.0\n0.6\n21.6\n0.6\n314.8\nJul\n13.2\n4.4\n16.1\n679.0\n45.9\n2.0\n12.8\n0.4\n773.7\nAug\n13.4\n2.9\n16.1\n327.7\n25.7\n1.9\n16.9\n0.2\n404.7\nSep\n10.3\n6.4\n14.1\n499.0\n33.7\n0.7\n13.0\n0.4\n577.5\nOct\n17.2\n3.5\n17.6\n520.8\n81.2\n0.5\n16.9\n0.1\n657.8\nNov\n18.9\n4.6\n19.5\n280.7\n188.8\n0.8\n15.1\n0.3\n528.6\nDec\n20.3\n4.0\n20.4\n801.4\n62.3\n1.3\n21.3\n0.1\n931.1\n2022\nJan\n34.4\n6.4\n15.7\n222.2\n54.3\n6.5\n15.6\n0.2\n355.1\nFeb\n13.7\n2.9\n10.5\n364.1\n85.4\n14.2\n18.0\n0.0\n508.8\nMar\n13.2\n3.2\n13.2\n548.9\n91.2\n26.1\n12.8\n0.1\n708.4\nApr\n10.0\n1.7\n16.0\n525.9\n58.9\n30.9\n9.0\n0.1\n652.4\nMay\n10.4\n2.1\n13.0\n533.3\n75.6\n82.7\n16.2\n0.1\n733.4\nJun\n5.5\n2.4\n16.3\n468.2\n79.0\n9.7\n12.5\n0.0\n593.6\nJul\n10.9\n2.6\n17.0\n665.4\n128.1\n44.2\n15.3\n0.2\n883.8\nAug\n5.4\n3.9\n14.7\n481.2\n59.9\n15.2\n13.6\n0.1\n593.9\nSep\n7.2\n4.5\n17.3\n272.2\n67.4\n12.0\n12.9\n1.3\n394.8\nOct\n8.1\n2.5\n41.7\n450.9\n71.8\n11.5\n15.0\n0.1\n601.7\nNov\n9.1\n3.4\n15.8\n713.1\n64.9\n10.0\n15.3\n0.1\n831.8\nDec\n16.8\n6.5\n11.9\n382.2\n131.7\n0.8\n11.8\n0.0\n561.8\n2023\nJan\n16.0\n3.7\n16.4\n402.4\n129.3\n9.1\n18.3\n0.2\n595.4\nFeb\n13.1\n1.3\n13.3\n240.1\n103.9\n7.6\n11.1\n0.1\n390.3\nMar\n5.0\n2.7\n11.4\n498.7\n118.9\n5.3\n17.8\n2.5\n662.3\nApr\n3.7\n2.2\n11.3\n246.9\n55.1\n9.7\n14.0\n0.2\n343.0\nMay\n4.9\n3.5\n16.3\n363.8\n87.3\n11.2\n24.1\n0.2\n511.2\nJun\n13.6\n2.3\n12.6\n452.6\n52.3\n17.7\n18.5\n0.3\n569.9\nJul\n8.4\n3.9\n18.8\n270.7\n92.0\n14.5\n14.8\n0.4\n423.6\nAug\n8.8\n3.2\n18.0\n374.0\n145.9\n12.1\n21.6\n0.4\n583.9\nSep\n10.1\n5.6\n33.8\n502.8\n96.2\n24.9\n14.9\n0.4\n688.7\nOct\n6.4\n5.3\n46.0\n414.4\n47.3\n18.3\n22.9\n0.4\n560.8\nNov\n17.0\n4.5\n17.0\n257.9\n91.3\n14.7\n21.0\n0.3\n423.7\nDec\n13.7\n6.5\n13.5\n117.7\n120.9\n10.1\n19.6\n0.4\n302.4\n2024\nJan\n18.4\n2.3\n13.8\n542.9\n96.1\n9.9\n17.9\n0.4\n702.7\nFeb\n9.6\n3.2\n17.2\n428.2\n237.9\n9.3\n12.2\n2.7\n720.3\nMar\n8.6\n1.7\n13.6\n117.5\n173.6\n17.1\n13.4\n1.6\n347.1\nApr\n13.0\n1.5\n51.0\n363.7\n136.7\n12.7\n15.4\n1.7\n595.7\nMay\n11.4\n1.5\n20.4\n338.2\n142.1\n18.1\n13.3\n1.7\n546.7\nJun\n11.8\n2.7\n14.1\n436.0\n53.6\n2.4\n16.6\n1.2\n538.5\nJul\n5.1\n3.7\n23.8\n573.2\n146.9\n23.1\n23.1\n4.9\n803.9\nAug\n6.4\n5.1\n17.7\n397.7\n46.5\n24.6\n18.2\n2.2\n518.3\nSep\n6.4\n4.6\n13.2\n839.2\n217.1\n22.5\n19.9\n1.7\n1124.5\nOct\n7.2\n7.5\n16.1\n634.5\n120.7\n24.0\n15.9\n2.7\n828.6\nNov\n14.9\n11.8\n17.3\n372.2\n112.6\n13.5\n22.2\n3.0\n567.6\nDec\n7.3\n11.9\n16.8\n390.4\n105.3\n2.5\n16.8\n1.7\n552.7\n2025\nJan\n10.0\n4.5\n13.1\n431.1\n75.3\n15.1\n22.1\n2.4\n573.6\nFeb\n3.9\n4.1\n25.5\n298.2\n128.1\n14.7\n13.4\n2.4\n490.2\nMar\n7.1\n2.5\n11.9\n563.6\n85.5\n3.8\n18.8\n2.9\n696.0\n Source:Reserve Bank of Zimbabwe, 2025\nTable 13.2: Monthly Cross Border Receipts (US$Millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Quarterly_Economic_Reviews/QUARTERLY_ECONOMIC_REVIEW_Q1_2025_.pdf"}
{"doc_id": "4a224d2e55f21629bf4e617e6b96d126", "text": "MPC Statement 25 January 2024 \nPage 1 \n \n \n \n \nPRESS STATEMENT \n25 January 2024 \n \n \nSTATEMENT OF THE MONETARY POLICY COMMITTEE \n \nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank \nAs the new year begins, global economic conditions remain mixed and the outlook \nuncertain. While headline inflation continues to ease in much of the world, core \ninflation remains sticky and high. Both advanced and emerging economies are likely \nto see modest economic growth this year, despite better than expected outcomes in \n2023.1 In most countries, reaching inflation targets, reducing fiscal deficits and \ncontaining or lowering debt levels will stay as key policy priorities. Financing conditions \nare expected to remain tight. \nThe longer-term economic outlook is also uncertain, as geo-political tensions and \nclimate change threaten supply chains, output and prices. This uncertainty, alongside \n \n1 South Africa’s commodity export index is forecast to decline by 27.3% this year, a further 11.9% in 2024, and \nan additional 4.9% in 2025. The index is forecast to fall by 1.6% in 2026. \nMPC Statement 25 January 2024 \nPage 2 \n \nhigh interest rates and debt, will dampen investor appetite and capital flows, resulting \nin volatile financial markets and asset prices. \nTaking these and other factors into account, the SARB’s forecast expects relatively \nweak global growth of 2.6% in 2024.2 \nThe domestic GDP outcome for the third quarter of 2023 was weaker than expected, \nat a negative 0.2%. We expect the fourth quarter to show some improvement, with \noutput expanding by 0.4%. The weaker performance of the economy in the latter half \nof 2023 is in line with the Bank’s forecast. \nThe operation of ports and rail has become a serious constraint, and, alongside \nelectricity shortages, contributed to weak output growth and higher costs last year.3 \nThese constraints are expected to persist, severely limiting potential growth of the \neconomy. While we expect electricity supply to increase gradually over the longer-\nterm, its contribution to short and medium-term growth has not been revised after the \nupward adjustment made at the time of the November meeting. \nOn the demand side, household consumption and investment have eased \nsignificantly, while government spending has been sustained. As we highlighted \nthroughout last year, commodity export prices have receded sharply from the highs \nreached in 2022, reducing the contribution of foreign demand to growth. \n \n2 Global growth in the QPM model is a trade-weighted average of South Africa’s trading partners. \n3 The number of days of load-shedding was 287 in 2023, and is still expected to decrease to 150 days and 100 \ndays, respectively in 2024, and 2025. Estimates of the average stages of load-shedding is multiplied by the \nnumber of days and then multiplied by the cost to GDP per stage-day. The cost per stage was revised lower in \nthe March 2023 MPC meeting. In nominal terms, these costs vary between R0-R1.2 million for stages 1 and 2 \nand up to R204-R899 million for stages 3 to 6, when continued on a 24 hour basis on weekdays. This will be \nassessed further as new data and information is received. \nMPC Statement 25 January 2024 \nPage 3 \n \nFor 2023 as a whole, GDP growth is revised down slightly to 0.6% from the November \nfigure of 0.8%. Our GDP growth forecast for 2024 and 2025 is unchanged from the \nprevious meeting, at 1.2% and 1.3%, respectively.4 \nAt present, we assess the risks to the medium-term domestic growth outlook to be \nbalanced. With the weaker GDP outcome in 2023, our current growth forecast leaves \nthe output gap marginally negative and at zero in the outer years of the forecast.5 \nCompared to many other emerging and advanced economies, the rise in South \nAfrica’s headline inflation rate was more gradual and peaked lower. However the \nreturn to target has been slow. The inflation rate remains sensitive to changes to both \nglobal and domestic supply and demand. \nDue to global factors, oil prices remain generally high at around US$82 per barrel. We \nexpect them, however, to be somewhat lower this year and next compared to the \nNovember forecast. Commodity export prices fell sharply last year, by about 27%, and \nare expected to fall by a further 12% this year. As a result, and despite modest \neconomic growth, South Africa’s external financing needs will increase as the current \naccount deficit expands. We expect a deficit of 1.4% of GDP in 2023 (from 1.3%), \nrising to 2.8% of GDP in 2024 and 3.6% of GDP in 2025.6 \n \n \n4 The growth forecast includes expected changes in the policy rate as given by the QPM. \n5 The potential growth forecast is unchanged from November, at 0.1% in 2023 and rising to 1.0% for 2024, \n1.2% for 2025, and 1.6% in 2026. \n6 The current account deficit in 2026 is forecast to be 4.0% of GDP. Exports are forecast to grow in real terms \nby 4.3% this year (from 4.8%) and 3.9% in 2024. Our oil price forecast is higher than in November, averaging \nUS$82.6 per barrel in 2023, US$82 in 2024, US$81 in 2025 and US$80 for 2026. \nMPC Statement 25 January 2024 \nPage 4 \n \nThe uncertainties of the global environment, and various South Africa-specific factors, \nincluding sluggish growth and dependence on commodity export prices continue to \nweigh on the value of the currency. The rand depreciated over the past year by about \n11% against the US dollar, making it one of the worst performing emerging market \ncurrencies. The implied starting point for the rand forecast is R18.65 to the US dollar, \ncompared to R18.69 at the time of the previous meeting. \nFuel price inflation is expected to be low, averaging below 1% in 2024. Food price \ninflation is revised slightly higher for 2024, to 5.7%, but remains broadly unchanged \nover the forecast period. \nCore inflation was 4.9% in 2023. The core inflation forecast for 2024 and 2025 is little \nchanged at 4.6%, and 4.5% in 2026. \nServices inflation in 2023 was 4.2%. The forecast for 2024 services price inflation \nremains unchanged at 4.8%. \nCore goods inflation was 6.1% in 2023, and is forecast to ease to 4.5% this year.7 \nWhile average salaries grew less than expected in the latter half of 2023, they are \nforecast to hit long-term averages for the rest of the forecast period.8 \nHeadline inflation was 6.0% in 2023. With few significant changes to the forecasts for \nunderlying components, headline inflation for 2024 is expected to ease to 5.0%, to \n4.6% in 2025, and to 4.5% in 2026. \n \n7 Core goods refers to total CPI goods excluding food and NAB, fuel and electricity, whereas services include all \nsurveyed services within the CPI basket. Core goods inflation is expected to be 4.5% in 2025, and 4.4% in 2026. \n8 Average salaries are expected to rise by 3.9% in 2023 (down from 4.6), 6.1% in 2024, and by 5.5% in 2025 and \nin 5.4% in 2026. Unit labour costs are forecast to have risen by an estimated 4.7% in 2023 and to rise by 4.4% \nin 2024 and 2025. In 2026, unit labour costs are forecast to increase by 4.3%. \nMPC Statement 25 January 2024 \nPage 5 \n \nWhile our baseline inflation forecast is of continued gradual moderation in global and \ndomestic inflation, the risks to the outlook are still assessed to the upside. \nBetter than expected global growth last year and ongoing geo-political tensions this \nyear serve to keep global oil markets tight. Despite some improvements, advanced \neconomies continue to experience strong wage growth and elevated core inflation. \nSouth Africa’s imported goods inflation increased strongly last year, and despite some \nbetter recent outcomes, remains sensitive to currency weakness. Recent increases in \negg and potato prices remind us that domestic food price inflation remains \nunpredictable and high. Electricity prices and logistics constraints continue to present \nclear inflation risks. With fuel and food price inflation remaining volatile, risk still \nattaches to the forecast for average salaries. Housing and services prices more \nbroadly, and in contrast, may continue to provide some downside relief to the inflation \nrisk profile. \nSticky inflation in G3 economies implies that their average policy rates will remain \nelevated, at about 4.3% in 2024 compared to the 1.1% average rate seen in 2022.9 \nThese tighter global financial conditions raise the risk profile of economies needing \nforeign capital. South Africa’s long-term cost of borrowing is expected to remain high. \nDespite moderating inflation, long-term bond yields currently trade around 12%. \nThe rise in inflation in 2022 generally resulted in higher inflation expectations across \nmarkets, businesses and households in 2023. Medium and longer-term market \nexpectations for inflation remain elevated.10 The December survey of the Bureau for \n \n9 The G3 is the United States, Japan and the Euro Area. G3 interest rates averaged 3.9% in 2023, and are \nexpected to be 4.3% in 2024, 3.4% in 2025, and 2.2% in 2026. \n10 At the median, market analysts (Reuters Econometer) in January 2024 expect inflation to average 5.0% in \n2024 and 4.5% in 2025. Market-based rates are calculated from the break-even inflation rate, which is the \nMPC Statement 25 January 2024 \nPage 6 \n \nEconomic Research shows average inflation expectations increased to 5.7% for 2024. \nAchieving permanently lower inflation and interest rates requires inflation expectations \nto be closely anchored to the mid-point of the target band.11 \nAgainst this backdrop, the MPC decided to keep the repurchase rate at its current level \nof 8.25% per year. The decision was unanimous. \nAt the current repurchase rate level, policy is restrictive, consistent with the inflation \noutlook and the need to address rising inflation expectations.12 Serious upside risks to \nthe inflation trajectory from global and domestic sources are evident and, as noted \nearlier, the economic outlook is highly uncertain. \nThe inflation and repo rate projections from the updated QPM remain a broad policy \nguide, changing from meeting to meeting in response to new data. Future committee \ndecisions will be data dependent and sensitive to the balance of risks to the outlook. \nGuiding inflation expectations back towards the mid-point of the target band will \nimprove the economic outlook and reduce borrowing costs. Since early 2020, the \nCommittee has recommended additional means of strengthening economic \nconditions, including achieving a prudent public debt level, increasing the supply of \nenergy, keeping administered price inflation low and real wage growth in line with \nproductivity gains. Such steps would also strengthen monetary policy effectiveness \nand its transmission to the broader economy. \n \nyield differential between conventional and inflation-linked bonds. The 5-year breakeven now sits at about \n5.1%. \n11 The BER Q4 2023 survey of inflation expectations indicated inflation at 5.7% in 2024 (from 5.5%) and 5.6% \nfor 2025 (up from 5.3%). \n12 The forecasted trajectory for the repurchase rate implies an inflation-adjusted repo rate of 2.6% in 2023 and \n3.1% in 2024. The real repo level for 2025 is expected to be 2.8% and 2.7% in 2026. The real repurchase rates \ncalculated here are based on the 3-quarter ahead inflation forecast and are annual average rates. \nMPC Statement 25 January 2024 \nPage 7 \n \n \nLesetja Kganyago \nGOVERNOR \nThe next statement of the Monetary Policy Committee will be released on 27 March \n2024. \n \nContact person: \nThoraya Pandy \n0824168416 \nmedia@resbank.co.za", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/MPC_Statements/Statement of the Monetary Policy Committee January 2024.pdf"}
{"doc_id": "defaa1c48acc7d7f6c2c316859c7875e", "text": "Vol. 25 No. 51 \n \n \nWeek Ending \n21st December 2023 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 1 \n3. \nCLEARING AND SETTLEMENT ACTIVITY .................. 3 \n4. \nINTERNATIONAL COMMODITY PRICE \nDEVELOPMENTS ................................................................. 5 \n5. \nEQUITY MARKETS .............................................................. 9 \n \n \n \n \n 1 \n1. OVERVIEW \n \nThis report provides an analysis of the developments in money market interest rates and National \nPayment Systems transactions during the week ending 21st December 2023. The report also \ncovers developments in international mineral commodity prices and stock markets during the \nsame week. \n \n \nMinimum and maximum savings deposit rates for both local and foreign currency deposits \nremained unchanged during the week under review. Deposit rates for 3-month, 6-month and 12-\nmonth tenors remained at the previous week’s levels. The deposit rates for 1-month maximum \ntenor, however, marginally declined in both local and foreign currency during the period under \nreview. \n \nInternational commodity prices for gold, platinum, copper, nickel and crude oil firmed while \npalladium and lithium prices declined during the week ending 21st December 2023. \n \nThe aggregate value of transactions processed through the National Payment Systems platforms \namounted to ZW$8.29 trillion, a decrease of 0.26% from the previous week. The Real Time \nGross Settlement (RTGS) system constituted 83.91% of the total NPS values. The Zimbabwe \nStock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) were bullish during the \nweek under analysis. \n2. INTEREST RATES \n \nLocal Currency (ZW$) Deposit Rates. \n \nDuring the week ending 21st December 2023, deposit rates for all tenors remained largely \nunchanged, save for the maximum deposit rates for deposits of 1-month tenor which registered \na decline during the same week. Commercial banks continued to offer higher deposit rates for \nlong term deposits as banks sought to encourage longer-term deposits. Average commercial bank \ndeposit rates are shown in Table 1. \n \n \n \n \n \n \n 2 \n \nTable 1: Average Deposit Rates (per annum) \nDate \nSavings deposits \n1- Month deposit rates \n \n3- Month deposit rates \n \n6- Month deposit rates \n \n12- Month deposit rates \n \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \n24-Nov-23 \n35.00 \n38.27 \n57.72 \n67.00 \n60.81 \n69.76 \n58.70 \n71.14 \n58.87 \n71.29 \n1-Dec-23 \n34.38 \n37.13 \n56.06 \n65.06 \n58.31 \n65.65 \n56.03 \n65.43 \n56.20 \n65.57 \n8-Dec-23 \n34.38 \n37.13 \n55.67 \n64.78 \n58.00 \n65.47 \n55.70 \n65.07 \n55.87 \n65.21 \n15-Dec-23 \n34.38 \n37.13 \n55.94 \n65.06 \n57.94 \n65.65 \n56.03 \n65.43 \n56.20 \n65.57 \n21-Dec-23 \n34.38 \n37.13 \n55.94 \n64.50 \n57.94 \n65.65 \n56.03 \n65.43 \n56.20 \n65.57 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nLocal Currency (ZW$) Lending Rates \nCommercial bank minimum lending rates for individual clients increased while those for \ncorporate clients softened during the week of analysis. On the contrary, maximum lending rates \nfor individuals declined during the week ending 21st December 2023, while maximum lending \nrates for corporate clients, increased during the same period, as shown in Table 2. \n \nTable 2: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n24-Nov-23 \n70.15 \n101.53 \n93.15 \n166.18 \n1-Dec-23 \n70.64 \n102.21 \n91.91 \n167.90 \n8-Dec-23 \n69.07 \n101.85 \n93.58 \n164.80 \n15-Dec-23 \n62.39 \n105.16 \n93.45 \n155.05 \n21-Dec-23 \n69.18 \n101.67 \n91.06 \n165.11 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nForeign Currency (USD) Deposit Rates \nAverage minimum and maximum savings deposit rates quoted by commercial banks were \nunchanged during the week ending 21st December 2023. Maximum deposit rates for deposits of \n1-month, 3-month, 6-month and 12-month tenors registered declines, while minimum deposit \nrates for the same deposits increased during the week under review as shown in Table 3. \n \n \n \n \n 3 \n \n \nTable 3: Average Foreign Currency Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit rates \n \n3- Month deposit rates \n \n6-Month deposit rates \n \n12- Month deposit rates \n \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \n24-Nov-23 \n1.36 \n1.86 \n2.97 \n4.94 \n3.43 \n5.53 \n3.56 \n5.86 \n3.70 \n6.21 \n1-Dec-23 \n1.32 \n1.82 \n3.00 \n4.74 \n3.34 \n5.17 \n4.46 \n5.46 \n3.60 \n5.82 \n8-Dec-23 \n1.32 \n1.82 \n3.00 \n4.74 \n3.34 \n5.17 \n3.46 \n5.46 \n3.60 \n5.82 \n15-Dec-23 \n1.32 \n1.82 \n3.00 \n4.74 \n3.34 \n5.17 \n3.46 \n5.46 \n3.60 \n5.82 \n21-Dec-23 \n1.32 \n1.82 \n3.06 \n4.56 \n3.42 \n5.10 \n3.53 \n5.39 \n3.73 \n5.68 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nForeign Currency (USD) Lending Rates \nDuring the week under analysis, minimum foreign currency lending rates for individual clients \nsoftened, while maximum lending rates for individuals marginally increased. Minimum foreign \ncurrency lending rates for corporate clients registered marginal increases, while maximum \nlending rates for the same category registered declines during the week under review. \n \nTable 4: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \n Individual Clients \n Corporate Clients \n \n17-Nov-23 \n11.07 \n13.42 \n8.30 \n14.17 \n24-Nov-23 \n11.47 \n13.69 \n7.53 \n14.26 \n1-Dec-23 \n10.96 \n13.41 \n8.26 \n14.35 \n8-Dec-23 \n11.00 \n13.47 \n8.29 \n14.26 \n15-Dec-23 \n10.88 \n13.53 \n8.21 \n14.31 \n21-Dec-23 \n10.85 \n13.54 \n8.27 \n14.22 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n3. CLEARING AND SETTLEMENT ACTIVITY \n \nThe aggregate value of transactions processed through the National Payment Systems platforms \namounted to ZW$8.29 trillion, a decrease of 0.26%, from the previous week’s level of ZW$8.32 \ntrillion. \n \n \n 4 \nIn value terms, the distribution of NPS transactions were as follows: Real Time Gross Settlement \n(RTGS) system constituted 83.91%, Mobile, 4.87%, Point of Sale (POS), 6.10% and Automated \nTeller Machines (ATM), 5.13%. \n \n Figure 1: Composition of NPS Transactions in Value Terms\n \n Source: Reserve Bank of Zimbabwe, 2023 \n \nThe volume of transactions processed through the NPS increased by 17.22% to close at 13.69 \nmillion. This was, underpinned by an increase in POS, ATM and Mobile transaction volumes. \nNPS transaction volumes were distributed as follows: Mobile,77.44%; POS, 18.47%; RTGS, \n2.35% and ATM, 1.74%, as shown in Figure 2. \n \nFigure 2: Composition of NPS Transactions in Volume Terms \n \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \n \nRTGS\n83.91%\nPOS\n6.10%\nATM\n5.13%\nMOBILE\n4.87%\nRTGS\nPOS\nATM\nMOBILE\nRTGS, 2.35%\nPOS, 18.47%\nATM, 1.74%\nMOBILE, 77.44%\nRTGS\nPOS\nATM\nMOBILE\n \n 5 \nTable 5: National Payment Systems Activity \nPAYMENT \nSTREAM \nWEEK ENDING \n15 DECEMBER \n2023 \nWEEK ENDING \n21 DECEMBER \n2023 \n% CHANGE \nFROM LAST \nWEEK \nPROPORTION \n \nVALUES IN ZW$ Millions \n \nRTGS \n7,471,210.87 \n6,959,622.48 \n-6.85% \n83.91% \nPOS \n328,083.17 \n505,595.26 \n54.11% \n6.10% \nATM \n217,884.99 \n425,183.83 \n95.14% \n5.13% \nMOBILE \n299,026.06 \n404,070.43 \n35.13% \n4.87% \nTOTAL \n8,316,205.11 \n8,294,472.00 \n-0.26% \n100% \nVOLUMES \nRTGS \n216,942 \n321,359 \n48.13% \n2.35% \nPOS \n1,739,471 \n2,529,516 \n45.42% \n18.47% \nATM \n133,933 \n238,052 \n77.74% \n1.74% \nMOBILE \n9,590,179 \n10,603,414 \n10.57% \n77.44% \nTOTAL \n11,680,525 \n13,692,341 \n17.22% \n100% \nSource: Reserve Bank of Zimbabwe, 2023 \n \n4. INTERNATIONAL COMMODITY PRICE DEVELOPMENTS \n \nInternational commodity prices for gold, platinum, copper, nickel and crude oil firmed during \nthe week ending 21st December 2023. Palladium and lithium prices, however, declined during \nthe same week. Table 6 shows commodity price developments during the week under analysis. \n \nTable 6: Metal and Crude Oil Prices for the week ending 21st December 2023 \n \nGold \nPlatinum \nPalladium \nCopper \nNickel \nCrude Oil \nLithium \n2023 \nUS$/ounce \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nUS$/barrel \nUS$/tonne \n \nWeekly Average \n(11-15 Dec) \n1,999.46 \n929.50 \n984.57 \n8,418.40 \n16,702.40 \n76.05 \n17,022.00 \n18-Dec \n2,024.27 \n941.67 \n977.50 \n8,482.50 \n16,502.00 \n78.01 \n16,600.00 \n19-Dec \n2,027.99 \n944.47 \n977.50 \n8,593.50 \n16,747.00 \n79.28 \n16,400.00 \n20-Dec \n2,035.76 \n969.82 \n977.50 \n8,582.50 \n16,854.00 \n79.65 \n16,200.00 \n21-Dec \n2,024.45 \n970.85 \n977.50 \n8,582.50 \n16,945.00 \n80.25 \n16,000.00 \nWeekly Average \n(18 - 21 Dec) \n2,028.12 \n956.70 \n977.50 \n8,560.25 \n16,762.00 \n79.30 \n16,300.00 \nWeekly Change \n(%) \n1.43 \n2.93 \n-0.72 \n1.68 \n0.36 \n4.27 \n-4.24 \nSource: BBC, KITCO and Bloomberg 2023 \n \nPrecious Metals \n \nIn the week under review, average prices for platinum and gold rose by 2.93% and 1.43%, \nrespectively, while those for lithium and palladium fell by 4.24% and 0.72%, in that order, as \nshown in Table 6. The increase in gold and platinum prices was underpinned by a softening US \ndollar amid rising expectations that the Federal Reserve would begin lowering interest rates in \n \n 6 \nearly 2024. The average price for palladium, however, declined, in part, following continued \npressure on cutting down on carbon emissions from cars with internal combustion engines. \nFigure 3 shows the trend in precious metal prices for the period from 18th December 2023 to 21st \nDecember 2023. \n \nFigure 3: Weekly Precious Metals Price Developments (18th – 21st December 2023) \n \n \nSource: Kitco,2023 \n \nSource: Kitco,2023 \n \nSource: Kitco,2023 \n \nSource: London Metal Exchange,2023 \n \n \n \n \n \n2000.00\n2010.00\n2020.00\n2030.00\n2040.00\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nGold\n895\n910\n925\n940\n955\n970\n985\n1,000\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nUS$/ounce\nPlatinum\nPlatinum\nLinear (Platinum)\n850.00\n900.00\n950.00\n1000.00\n1050.00\n1100.00\n18-Dec 19-Dec 20-Dec 21-Dec\nUS$/ ounce\nPalladium\nPalladium\nLinear (Palladium)\n15,000\n15,500\n16,000\n16,500\n17,000\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nUS$/tonne\nLithium Hydroxide\nLithium Hydroxide\nLinear (Lithium Hydroxide)\n \n 7 \nBase Metals and Brent Crude Oil \nCopper prices increased by 1.68% during the reporting week, underpinned by the U.S. Federal \nReserve's recent dovish monetary policy tilt, coupled with the softening of the US dollar. \nSimilarly, nickel prices marginally increased by 0.36%, amid market caution ahead of the release \nof key US inflation data. Crude oil prices increased by 4.27%, on the back of continued tensions \nin the Middle East following attacks on ships in the Red Sea by Houthi rebels and the decision \nby Angola to leave the OPEC group. The price trends for base metals and Brent crude oil for the \nperiod from 18th December 2023 to 21st December 2023, are shown in Figure 4. \n \nFigure 4: Daily commodity price developments for copper, nickel, and Brent crude oil \n(18th – 21st December 2023) \n \nSource: London Metal Exchange,2023 \n \nSource: London Metal Exchange,2023 \n8,000\n8,100\n8,200\n8,300\n8,400\n8,500\n8,600\n8,700\n17-Dec\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nUS$/tonne\n15-Dec\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nCopper\n8549.00\n8482.50\n8593.50\n8582.50\n8582.50\nCopper\n16,000\n16,200\n16,400\n16,600\n16,800\n17,000\n17,200\n17-Dec\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nUS$/tonne\n15-Dec\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nNickel\n17150.00\n16502.00\n16747.00\n16854.00\n16945.00\nNickel\n \n 8 \n \nSource: BBC,2023 \n \n \nExchange Rate Developments \n \nInterbank Market \n \nDuring the week under analysis, the Zimbabwe dollar (ZW$) depreciated by 0.7% against the \nUS dollar on the interbank market. The average exchange rate moved from ZW$5,881.11 per \nUS$1 during the week ending 15 December 2023 to ZW$5,924.96 per US$1, during the \nreporting week, as shown in Table 7. \n \nTable 7: Selected Exchange Rates (ZW$ per unit of foreign currency) \n \n2023 \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(11– 15 Dec) \n5,881.1082 \n317.5899 \n7,419.8778 \n432.9305 \n6,377.7613 \n 18-Dec \n5,917.1743 \n327.8689 \n7,511.3240 \n442.6991 \n6,456.2918 \n19-Dec \n5,919.5531 \n322.5806 \n7,494.8713 \n442.8764 \n6,468.3582 \n20-Dec \n5,927.6389 \n327.8689 \n7,540.6134 \n441.7050 \n6,500.2808 \n21-Dec \n5,935.4572 \n327.8689 \n7,506.8851 \n444.4101 \n6,501.1690 \nWeekly Average \n(18 – 21 Dec) \n5,924.9559 \n326.5468 \n7,513.4234 \n442.9226 \n6,481.5249 \nAppr (-)/Depr (+) \n(%) of the ZWL \n0.7 \n2.8 \n1.3 \n2.3 \n1.6 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \n \n75.0\n76.0\n77.0\n78.0\n79.0\n80.0\n81.0\n17-Dec\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nUS$/barrel\n15-Dec\n18-Dec\n19-Dec\n20-Dec\n21-Dec\nBrent crude oil\n77.01\n78.01\n79.28\n79.65\n80.25\nBrent crude oil\n \n 9 \n5. EQUITY MARKETS \n \n \nThe Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) were \nbullish during the week under analysis. Consequently, the ZSE and VFEX All Share indices \ngained 3.09% and 1.64% to close the week under review at 198 791.48 points and 70.36 points, \nrespectively. \n \nTable 8: Zimbabwe Stock Exchange Statistics1 \n \nAll Share \nIndex \n(points) \n \n \nTop 10 \nindex \n(points) \nTop 15 \nIndex \n(points) \nMedium \nCap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket \nCapitalization \n(ZWL \nbillion) \nMarket \nTurnover \n(ZWL \nmillion) \nVolume \nof Shares \n(million) \n01-Dec-23 \n192 223.42 \n82 335.38 \n111 745.50 \n834,813.78 5,316,567.85 \n145 542.27 \n15 311.63 \n 11 013.11 \n16.89 \n08-Dec-23 \n197,660.65 \n84,065.54 \n114,225.56 \n870,872.87 \n5,344,423.84 \n145,542.27 \n15,370.10 \n9,562.00 \n8.80 \n15-Dec-23 \n192,837.21 \n80,050.80 \n109,363.56 \n889,925.15 \n5,344,423.84 \n145,542.27 \n15,315.34 \n11,343.88 \n15.00 \n21-Dec-23 \n198,791.48 \n83,719.76 \n114,013.74 \n892,907.22 \n5,344,423.84 \n145,542.27 \n15,764.91 \n12,776.36 \n10.37 \n% Change \n3.09 \n4.58 \n4.25 \n0.34 \n0.00 \n0.00 \n2.94 \n12.63 \n-30.85 \n \nSource, Zimbabwe Stock Exchange, 2023 \n \n \nTable 9: Victoria Falls Stock Exchange \nDate \nAll Share Index \nPoints \nGrand Market \nCapitalization (US$ \nbillion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n24-Nov-23 \n69.66 \n1.19 \n0.79 \n6.08 \n1-Dec-23 \n70.55 \n1.21 \n0.61 \n1.47 \n8-Dec-23 \n71.12 \n1.22 \n1.03 \n4.47 \n15-Dec-23 \n69.22 \n1.18 \n0.91 \n2.70 \n21-Dec-23 \n70.36 \n1.20 \n1.15 \n3.06 \n% Change \n1.64 \n1.64 \n25.85 \n13.10 \nSource, Zimbabwe Stock Exchange, 2023 \n \n \n \n \n1 The Zimbabwe Stock Exchange (ZSE) adopted the Global Industry Classification Standards, effective from 1 January 2020. ZSE major indices comprise of the following \ncategories: All Share Index Top 10 Index; Top 15; Top 25; Medium cap and Small cap Indices. \n \n \n10 \n \nZimbabwe Stock Exchange (ZSE) Developments \n \nThe Top 10, Top 15 and Medium Cap gained 4.58%, 4.25% and 0.34% to close at 83 719.76, \n114 013.74 and 892 907.22 points respectively, while the Small Cap counter remained \nunchanged at 5 344 423.84. \n \nThe resource index was unchanged at 145 542.27 points during the week under review. \n \nFigure 5 shows developments on the ZSE’s All Share, Top 10 and Mining indices from 22nd \nDecember 2022 to 21st December 2023. \n \nFigure 5: ZSE All Share, Top 10 and Mining Indices \n \nSource: Zimbabwe Stock Exchange, 2023 \n \nShare price gains in Ecocash Holdings Zimbabwe Limited (29.84%), CBZ Holdings Limited \n(15.00%), CFI Holdings Limited (15.00%), Cafca Limited (14.97%) and Ariston Holdings \nLimited (12.50%) supported the increase in the mainstream index. \n \nLosses were registered in share prices of Meikles Limited (6.92%), Willdale Limited (5.56%), \nFirst Mutual Holdings Limited (4.76), Dairiboard Holdings Limited (2.76%) and FBC Holdings \nLimited (2.14%%). \n20,000\n40,000\n60,000\n80,000\n100,000\n120,000\n140,000\n160,000\n180,000\n200,000\n220,000\n240,000\n0\n25,000\n50,000\n75,000\n100,000\n125,000\n150,000\n175,000\n200,000\n225,000\n250,000\n22-Dec-22\n05-Jan-23\n19-Jan-23\n02-Feb-23\n16-Feb-23\n02-Mar-23\n16-Mar-23\n30-Mar-23\n13-Apr-23\n27-Apr-23\n11-May-23\n25-May-23\n08-Jun-23\n22-Jun-23\n06-Jul-23\n20-Jul-23\n03-Aug-23\n17-Aug-23\n31-Aug-23\n14-Sep-23\n28-Sep-23\n12-Oct-23\n26-Oct-23\n09-Nov-23\n23-Nov-23\n07-Dec-23\n21-Dec-23\nMining Index\nAll Share and Top 10 Indices\nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n \n \n11 \n \nMarket Turnover \nDuring the week ending 21st December 2023, the cumulative volume of shares traded declined \nby 30.85% to close at 10 million shares, from 15 million shares registered in the previous week. \nThe value of shares traded, however, increased by 12.63% to close at ZW$12.78 billion. \n \nFigure 6 shows the trend in daily market turnover for the period 22nd December 2022 to \n21st December 2023. \n \nFigure 6: Market Turnover \nSource: Zimbabwe Stock Exchange, 2023 \n \n \nMarket Capitalization \n \nThe ZSE market capitalisation increased by 2.94% to close at ZW$15 764.91 billion during the \nperiod of analysis reflecting the increase in the stock market price index. \n \nFigure 7 shows the evolution of market capitalization for the period 23rd December 2022 to 21st \nDecember 2023. \n \n \n \n \n \n0\n5,000\n10,000\n15,000\n20,000\n25,000\n30,000\n35,000\n40,000\n45,000\n50,000\n22-Dec-22\n05-Jan-23\n19-Jan-23\n02-Feb-23\n16-Feb-23\n02-Mar-23\n16-Mar-23\n30-Mar-23\n13-Apr-23\n27-Apr-23\n11-May-23\n25-May-23\n08-Jun-23\n22-Jun-23\n06-Jul-23\n20-Jul-23\n03-Aug-23\n17-Aug-23\n31-Aug-23\n14-Sep-23\n28-Sep-23\n12-Oct-23\n26-Oct-23\n09-Nov-23\n23-Nov-23\n07-Dec-23\n21-Dec-23\nZW$ (Million)\nNegotiated Deal: 241 million \nFirst Mutual Holdings \nLimited shares exchanged \n \n \n12 \nFigure 7: Market Capitalization \n \nSource: Zimbabwe Stock Exchange, 2023 \n \nVictoria Falls Stock Exchange (VFEX) Developments \n \nThe VFEX mainstream index added 1.64% during the week under review in part on account of \nshare price increases in Padenga Holdings Limited (4.96%), Innscor Africa Limited (4.51%), \nSimbisa Brands Limited (4.29%) and African Sun Limited (1.20%). \n \nPartially offsetting these gains were losses in the share prices of First Capital Bank Limited \n(5.00%), Seed Co International Vx (3.28%) and Axia Corporation Limited (0.14)%. \n \nVFEX Market Turnover \n \nThe VFEX volume and value of shares increased by 13.10% and 25.85% to close at 3.06 million \nshares and US$1.15 million, respectively. This compares to 2.70 million shares and US$0.91 \nmillion registered in the previous week. \n \n \n \n \n \n0\n1,800\n3,600\n5,400\n7,200\n9,000\n10,800\n12,600\n14,400\n16,200\n22-Dec-22\n05-Jan-23\n19-Jan-23\n02-Feb-23\n16-Feb-23\n02-Mar-23\n16-Mar-23\n30-Mar-23\n13-Apr-23\n27-Apr-23\n11-May-23\n25-May-23\n08-Jun-23\n22-Jun-23\n06-Jul-23\n20-Jul-23\n03-Aug-23\n17-Aug-23\n31-Aug-23\n14-Sep-23\n28-Sep-23\n12-Oct-23\n26-Oct-23\n09-Nov-23\n23-Nov-23\n07-Dec-23\n21-Dec-23\n$ Billions\n \n \n13 \nVFEX Market Capitalization \nReflecting positive trading activity on the VFEX, the bourse improved by 1.64% worth of \ncapitalization to close at US$1.20 billion compared to US$1.18 billion, recorded in the prior \nweek. \n \nFigure 8 shows the trend in the VFEX All Share Index (ASI) for the period from 22nd December \n2022 to 21st December 2023. \n \nFigure 8: VFEX All Share Index \n \n Source: Victoria Falls Stock Exchange (VFEX), 2023 \n \n \nRESERVE BANK OF ZIMBABWE \n \n40\n50\n60\n70\n80\n90\n100\n110\n120\n130\n140\n150\n22-Dec-22\n05-Jan-23\n19-Jan-23\n02-Feb-23\n16-Feb-23\n02-Mar-23\n16-Mar-23\n30-Mar-23\n13-Apr-23\n27-Apr-23\n11-May-23\n25-May-23\n08-Jun-23\n22-Jun-23\n06-Jul-23\n20-Jul-23\n03-Aug-23\n17-Aug-23\n31-Aug-23\n14-Sep-23\n28-Sep-23\n12-Oct-23\n26-Oct-23\n09-Nov-23\n23-Nov-23\n07-Dec-23\n21-Dec-23\n \n \nAPPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR WHOLESALEFX2 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \n*The last Foreign Exchange Auction for 2023 was conducted on 12 December 2023. \n \n \n \n \n \n2 Wholesale Foreign Currency Auction (Wholesale FX) is normally conducted on Tuesday every week. The RBZ MPC resolutions dated 6 June 2023 resolved that with effect \nfrom 7 June 2023, the Bank shall sell foreign currency at the market-determined exchange rate through banks to support and strengthen the foreign exchange interbank \nmarket, and banks shall in turn sell the foreign currency to their customers. \n \n \n \nWHOLESALE FX \n \n \n \n21-Nov-23 \n28-Nov-23 \n05-Dec-23 \n12-Dec-23 \nTotal \nBids (US$ dollars) \n17,309,350.08 \n16,695,652.00 \n15,760,508.00 \n17,787,837.86 \nAmount Allotted (US$ \ndollars) \n17,309,350.08 \n14,533,152.00 \n14,260,508.00 \n17,787,837.86 \nHighest Rate \n5,792.0000 \n5,820.6746 \n5,910.5157 \n6225.0000 \nLowest Bid Rate Allotted \n5,760.0000 \n5,785.0000 \n5,800.0000 \n5850.0000 \nWeighted Average Rate \n5,774.2758 \n5,790.0545 \n5,827.7972 \n5,903.3898 \nNumber of Bids Received \n18 \n18 \n19 \n20 \nNumber of Bids Rejected \n0 \n0 \n0 \n0 \n \n \nAPPENDIX 2: SUMMARY OF FOREIGN CURRENCY AUCTION ALLOTMENTS BY PURPOSE \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n21-Nov-23 \n \n28-Nov-23 \n \n05-Dec-23 \n \n12-Dec-23 \nRaw Materials \n866,444.48 \n780,641.97 \n919,863.74 \n569,417.23 \nMachinery and Equipment \n586,565.83 \n650,261.27 \n361,166.34 \n402,144.32 \nConsumables \n(Incl. Spares, Tyres, \nPackaging) \n113,022,49 \n244,314.16 \n306,216.66 \n250,058.99 \nPharmaceuticals and \nChemicals \n28,937,82 \n71,124.40 \n77,799.20 \n51,871.95 \nServices (Loans, Dividends and \nDisinvestments) \n298,514.91 \n212,328.45 \n276,912.54 \n122,696.30 \nRetail and Distribution \n200,761.39 \n218,499.07 \n333,353.73 \n141,160.54 \nFuel, Electricity and Gas \n- \n- \n- \n- \nPaper and Packaging \n20,011.84 \n- \n65,383.88 \n31,203.28 \nTOTAL \n2,114,258.76 \n2,177,119.32 \n2,340,696.09 \n1,568,498.61", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_21_December_2023_Volume_25_Number_51.pdf"}
{"doc_id": "8aaf0e3d6dbb1e8c1cb49618ce5b6052", "text": "Monetary Policy Review \nOctober 2017\nSouth African Reserve Bank\nMonetary Policy Review\nOctober 2017\nMonetary Policy Review October 2017\n© South African Reserve Bank\nAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photo­\ncopying, recording or otherwise, without fully acknowledging the Monetary Policy Review of the South African Reserve Bank as the source. The contents of this publication \nare intended for general information only and are not intended to serve as financial or other advice. While every precaution is taken to ensure the accuracy of information, \nthe South African Reserve Bank shall not be liable to any person for inaccurate information or opinions contained in this publication.\nEnquiries relating to this Monetary Policy Review should be addressed to:\n\t\nHead: Economic Research and Statistics Department\n\t\nSouth African Reserve Bank\n\t\nP O Box 427\n\t\nPretoria 0001\n\t\nTel. +27 12 313 3668\nwww.resbank.co.za\t\n\t\n\t\n\t\n\t\n\t\n ISSN: 1609-3194\nMonetary Policy Review October 2017\nPreface\nThe primary mandate of the South African Reserve Bank (SARB) is to achieve and maintain price stability in the interest of \nbalanced and sustainable economic growth. In addition, the SARB has a complementary mandate to oversee and maintain \nfinancial stability. \nPrice stability helps to protect the purchasing power and living standards of all South Africans. It provides a favourable \nenvironment for investment and job creation, and also helps to maintain and improve international competitiveness. The goal \nof price stability is quantified by the setting of an inflation target after consultation with the government. The SARB has full \noperational independence. Monetary policy decisions are made by the SARB’s Monetary Policy Committee (MPC), which is \nchaired by the Governor and includes the deputy governors as well as other senior officials of the SARB. \nThe MPC conducts monetary policy to keep inflation within a target range of 3–6%. This inflation targeting-framework is \nflexible, meaning that inflation may be temporarily outside the target range, under certain circumstances. The MPC takes \ninto account the time lags between policy adjustments and economic effects. This provides for interest rate smoothing over \nthe cycle, and contributes towards more stable economic growth. The decision of the MPC, together with a comprehensive \nstatement, is communicated at a media conference at the end of each meeting. \nThe Monetary Policy Review (MPR) is published twice a year and is aimed at broadening public understanding of the \nobjectives and conduct of monetary policy. The MPR covers domestic and international developments that impact on \nthe monetary policy stance. It is fundamentally a forward-looking document which focuses on the outlook for the South \nAfrican economy, in contrast to the Quarterly Bulletin which records and explains recent economic developments. \nThe MPR is presented by senior officials of the SARB at monetary policy forums in various centres across South Africa in an \neffort to develop a better understanding of monetary policy through direct interactions with stakeholders.\nMonetary Policy Review October 2017\nContents\nIntroduction......................................................................................................................................................\t\n1\nA global economic upswing.............................................................................................................................\t\n7\nFavourable global financial conditions..............................................................................................................\t\n12\nReal economy: a low growth trend...................................................................................................................\t\n15\nInflation developments: below 6% but above 4.5%..........................................................................................\t\n25\nSummary.........................................................................................................................................................\t\n34\nBoxes\nBox 1\tIntroducing the Quarterly Projection Model...........................................................................................\t\n4\nBox 2\tInterpreting estimates of the South African neutral real interest rate......................................................\t\n5\nBox 3\tThe Taylor rule: ‘look what you made me do’........................................................................................\t\n6\nBox 4\tWhy is South Africa missing out on the global recovery?......................................................................\t\n16\nBox 5\tHousehold deleveraging by income groups...........................................................................................\t\n20\nBox 6\tThe output gap, potential growth and supply shocks............................................................................\t\n23\nBox 7 Comparing the SARB’s forecasts with those of other central banks......................................................\t\n32\nStatements issued by Lesetja Kganyago, Governor of the South African Reserve Bank\nStatement of the Monetary Policy Committee\n25 May 2017....................................................................................................................................................\t\n36\nStatement of the Monetary Policy Committee\n20 July 2017....................................................................................................................................................\t\n41\nStatement of the Monetary Policy Committee\n21 September 2017.........................................................................................................................................\t\n46\nGlossary..........................................................................................................................................................\t\n53\nAbbreviations..................................................................................................................................................\t\n55\n1\nMonetary Policy Review October 2017\nIntroduction\nInflation fell back to within the 3–6% target range in April and \nis expected to remain within the target range over the medium \nterm. Inflation forecasts have improved during the year; headline \ninflation is now projected to average 5.3% in 2017, 5.0% in 2018 \nand 5.3% in 2019, while core inflation should be close to 5% for \nall three years. By contrast, the domestic growth outlook has \ndeteriorated, despite a sustained acceleration in global growth. \nLower inflation has created some space for monetary easing, \npermitting a reduction in the repurchase (repo) rate to 6.75% in \nJuly. Over the longer run, lower interest rates will require more \nsustained improvements in the inflation forecast.\nThe world economy has strengthened over the past year. The \nmajor advanced economies are experiencing synchronised \nrecoveries: growth is running above potential in the euro area, \nJapan and the United States (US), and labour markets have \ntightened. Despite this reduced slack, inflation rates in these \neconomies remain below targets. Monetary policy settings \nare therefore expected to remain broadly expansionary. \nNonetheless, the degree of stimulus is likely to be reduced, \nwith higher interest rates and balance sheet tapering in the \nUS as well as a reduced pace of quantitative easing in the \neuro area.\nEmerging market growth has also improved. In particular, \ngrowth in China beat expectations in the first half of the \nyear, interrupting a five-year deceleration trend. Other large \nemerging markets are also doing better, with Brazil and \nRussia out of recession and India rebounding from recent \nshocks (mainly demonetisation and uncertainty over a new tax \nsystem). Inflation rates have moderated significantly in most \nlarge emerging markets economies, permitting central banks \nto lower interest rates.\nThis environment has stoked a risk-on mood in global financial \nmarkets. Volatility has fallen to unusually low levels and the \nsearch for yield has intensified: equity valuations are high, bond \nyields remain low and capital flows to emerging markets have \nbeen robust. Exchange rates have also shifted. With the US \nno longer the sole major economy in recovery, the US Federal \nReserve (Fed) is shedding its status as the only big central bank \nwhich is tightening policy. This change has already contributed \nto a less appreciated US dollar, with the Fed’s broad dollar \nindex down around 10% so far this year.\nDespite this favourable combination of strong global growth \nand easy financing conditions, South Africa’s economy remains \nstagnant. Output has been nearly unchanged over the past \ntwo years, and in per capita terms South Africans are poorer \n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\n10\n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\n10\nInflation target range\nPercentage change on a year earlier (both scales)\nTargeted inflation* forecast\n2009\n2011\n2013\n2015\n2017\n2019\n* CPI for all urban areas\nSources: SARB and Stats SA\nCredibility and countercyclicality: monetary policy \nresponses to lower inflation and low growth\nIndex\nAsian crisis\nGlobal financial\ncrisis\nEuropean\ndebt crisis\n1990\n1995\n2000\n2005\n2010\n2015\nVIX\nSource: Bloomberg\n0\n10\n20\n30\n40\n50\n60\n70\nMonetary Policy Review October 2017\n2\nthan they were in 2014. The current account has narrowed \nsharply, mainly due to import compression. This has restored \na degree of external balance to the economy, moderating \nSouth Africa’s external vulnerability and contributing to a less \nvolatile exchange rate. Yet reduced investment weakens the \neconomy’s growth potential: estimates now indicate trend \ngrowth has fallen below 1.5%, down from 3–4% in the 2000s. \nFurthermore, low growth has undermined National Treasury’s \nfiscal consolidation plans. With public debt rising faster than \nplanned, macroeconomic balance remains elusive.\nDomestic growth has stalled because of political and policy \nuncertainty, which has depressed household and business \nconfidence. Confidence indicators have been below longer-\nterm averages since late-2015, when the serving finance \nminister was unexpectedly dismissed, and are currently about \nas low as they were during the global financial crisis. In these \ncircumstances, investment has contracted and household \nconsumption growth has slowed to a crawl. The forecast \nindicates a feeble recovery over the next two years, but even in \n2019 expected growth barely exceeds 1.5%. \nWhile the growth forecast has deteriorated over the course of \nthe year, the outlook for consumer prices has improved. Inflation \nreturned to within the target range in the second quarter of \n2017, as forecast, and the extent of the deceleration has been \nsomewhat better than first expected. The previous Monetary \nPolicy Review (MPR), published in April 2017, anticipated \ninflation at 5.8% for the second quarter; in fact, inflation \naveraged 5.3%. The surprise was mainly due to exchange rate \neffects, with import prices falling abruptly. Inflation has also \nbenefitted from reduced food price inflation and a temporary \nslowdown in electricity price increases.\nThe latest forecast suggests inflation will moderate to a low of \n4.6% in the first quarter of 2018, before trending somewhat \nhigher to average 5.3% in 2019. The uptick in inflation in the \nouter part of the forecast is explained by several factors. \nFirst, the electricity and oil price assumptions are higher for \nthis period. Second, food and import prices are expected to \nnormalise during 2018, following rapid increases in 2016 that \nhave been largely reversed in 2017. Third, the forecast includes \nslightly stronger growth in 2018 and 2019, which narrows the \noutput gap. Finally, persistently positive real wage gains put \na floor under inflation, causing it to stabilise above 5% after \nthe disinflationary shocks abate. Lower inflation over the next \nfew quarters may help moderate inflation expectations, but \nthe forecast already entails an historically low growth rate for \nunit labour costs (remuneration adjusted for productivity), and \nevidence for a stronger decline is still scarce.\n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n* At seasonally adjusted and annualised rates\nSources: SARB and Stats SA\nPercentage change* from quarter to quarter (both scales)\nReal GDP growth\n2009\n2011\n2013\n2015\n2017\n2019\nIndex: 2015 = 100\n1985\n1990\n1995\n2000\n2005\n2010\n2015\nBusiness confidence\nSource: SACCI\n70\n80\n90\n100\n110\n120\n130\n140\n150\nPercentage change\nMar May\nSep\nJul\nJan\nMar\nSep\nMay\nJul\nNov\n2016\n2017\nEvolution of inflation forecasts\nMPC meeting\n4.5\n5.0\n5.5\n6.0\n6.5\n7.0\nSource: SARB\n \n2017\n \n2018\n \n2019\n6.4\n6.2\n6.0\n5.5\n5.4\n5.5\n5.8\n5.5\n5.5\n5.3\n5.2\n4.9\n5.3\n5.0\n5.5\n5.4\n5.8\n5.5\n6.2\n5.5\n5.9\n5.7\n5.3\n5.3\n3\nMonetary Policy Review October 2017\nOverview of the monetary \npolicy stance\nIn recent years, monetary policy has confronted rising inflation \nalongside slowing growth. This dilemma has eased somewhat \nin 2017 because of lower inflation. However, the improvement \nin inflation has been repeatedly jeopardised by negative \ndomestic shocks, such as downgrades by the ratings agencies \nas well as the Public Protector’s proposed amendment to the \nSouth African Reserve Bank’s (SARB) constitutional mandate. \nFurthermore, both inflation and inflation expectations have \nstayed well above the midpoint of the target range – even as \nglobal inflation rates have settled at historically low levels.\nIn these circumstances, successive Monetary Policy \nCommittee (MPC) statements signalled first a pause, and then \nan end, to the policy tightening cycle. By July 2017, inflation \nhad slowed enough to permit a quarter-point reduction in the \nrepo rate – the first decrease since 2012. At this juncture, \nthe four-quarter-ahead inflation forecast was down to 4.6%, \nclose to the midpoint of the target range and below the \naverage forecast at MPC meetings where rates have been \ncut historically. Additionally, because inflation rates had \ndecelerated more rapidly than expected, real ex ante interest \nrates – defined as the nominal repo less projected inflation \n– had shifted abruptly higher. The July rate cut helped to \nmoderate the real rate trajectory. \nInflation risks also looked more balanced in July, bolstering \nthe case for lower rates. This judgement mainly reflected \nslower advanced economy inflation, implying major central \nbanks could normalise policy more gradually than previously \nexpected. Unfortunately, this favourable shift in the external \nenvironment was not matched by receding domestic risks. \nBy the September MPC meeting, these risks had come more \nclearly into view. Forecast scenarios showed electricity price \nincreases could add 0.2–0.3 percentage points to headline \ninflation, potentially prompting second-round effects. The \nexchange rate outlook also worsened, not least because \ndisappointing fiscal revenues increased the probability of \nadditional credit ratings downgrades. As a result, the overall \ninflation risk assessment skewed back towards higher inflation, \ncurtailing space for another cut. \nThe medium-term challenge for monetary policy is to anchor \ninflation and inflation expectations more firmly within the \ninflation target. There are a range of costs to having inflation \nfluctuating at around 6%. One is that relatively high and volatile \ninflation keeps borrowing costs high; most other countries, \nincluding many of South Africa’s peer emerging markets, \nenjoy lower interest rates as a result of having lower inflation. \nA related consideration is that South Africa’s competitiveness \nsuffers from relatively high inflation because local prices rise \nsignificantly faster than foreign prices. Advanced economies \nmostly target inflation of 2%, and emerging market targets \nare converging on targets in a range between 3–4%. This \nhas made an implicit inflation target close to 6% increasingly \nuncompetitive. Finally, tolerating inflation around the upper \nPer cent \nFour-quarter-ahead inflation forecasts for\nhistorical rate cuts\nSource: SARB\nDates of rate cuts\n3.5\n4.0\n4.5\n5.0\n5.5\n6.0\n6.5\n7.0\nSep 01\nJun 01\nAug 03\nJun 03\nOct 03\nSep 03\nAug 04\nDec 03\nDec 08\nApr 05\nMar 09\nFeb 09\nAug 09\nMay 09\nSep 10\nMar 10\nJul 17\nJul 12\nNov 10\nAverage 5.2\nPer cent\n2000 2002 2004 2006 2008 2010 2012 2014 2016\nSouth African repo and prime rate\nSource: SARB\n \nPrime rate\n \nRepo rate\n \n4\n6\n8\n10\n12\n14\n16\n18\nPercentage change over four quarters\n2015\n2016\n2017\n2018\n2019\nChanges to the SARB’s inflation forecast*\nSources: SARB and Stats SA\n \nMar 2016\n \nSep 2016\n \nMar 2017\n \nMay 2017\n \nJul 2017\n \nSep 2017\n \nActual\n* Dotted lines indicate forecasts\n4.0\n4.5\n5.0\n5.5\n6.0\n6.5\n7.0\n7.5\nMonetary Policy Review October 2017\n4\nend of the target range raises the probability of target misses, \neven though the target is already comparatively wide. These \nchallenges can be overcome by lowering inflation towards the \nmidpoint of the inflation target over time.\nIn the shorter term, monetary policy also has a countercyclical \nrole to play. As the SARB has been communicating for some \ntime, South Africa’s economic stagnation over the past few \nyears is largely due to a weak export response, high household \ndebt stocks and falling investment caused by uncertainty. \nThese problems have not been responsive to demand-side \npolicies, including relatively low short-term interest rates. Yet \nsome portion of the current slowdown is attributable to cyclical \nweakness, reflected in a negative output gap. The July interest \nrate cut is helping offset this demand shortfall, providing a \nmeasure of support to the economy at a difficult time.\nThe current monetary policy settings reflect these two \nobjectives: lowering inflation so that it is securely anchored \nnearer the midpoint of the inflation target range, while \nexploiting available policy space to offset cyclical weakness \nin the economy. Together, these objectives serve the SARB’s \nmandate to protect the value of the currency in the interest of \nbalanced and sustainable growth.\nBox 1\t Introducing the Quarterly Projection Model \nInflation targeting is fundamentally forward-looking, and therefore requires forecasts. These forecasts are produced with the help of a suite of \nmodels. Since 2000, the Core Model1 has served as the frontline model responsible for the headline growth and inflation forecasts. However, \nthe Monetary Policy Committee (MPC) will soon be promoting the Quarterly Projection Model (QPM) to this position, while retaining the Core \nModel in a supporting role. This box provides an introduction to the QPM.2 \nAt the heart of the QPM are four main ‘gaps’: output, inflation, the real exchange rate and the real interest rate. A shock to the economy will \ncreate gaps between the equilibrium and actual values of these variables.3 In response, the model will produce a path that closes these gaps \nand brings the economy back into equilibrium. For example, if inflation rises above the target, the real interest rate will rise relative to its neutral \nlevel (following a Taylor rule – see Box 3). This appreciates the exchange rate and dampens domestic demand, widening the output gap. Inflation \nthen falls back to the target, and the interest rate ultimately returns to its neutral value.\nOne virtue of the QPM is its simplicity. It is a popular misconception that econometric models are black boxes, with economists inputting data \nand relying on the models for the results. However, models are merely inputs into the forecasting process. They assist economists by ensuring \nconsistency between various assumptions and interactions. Because judgement is also a significant input in forecasting, model simplicity \nsupports clarity of thought and transparency.\nAnother advantage is that in the QPM, the exchange rate and the repurchase (repo) rate adjust endogenously to economic events. By contrast, \nthe convention with the Core Model has been to keep the repo rate fixed at the level decided at the previous MPC meeting. Similarly, the real \neffective exchange rate is assumed to remain stable across the forecast. Because these variables do not respond to changes in the economic \nenvironment, forecasts from the Core Model do not always reflect the most likely outcomes. Rather, they provide an indication of economic \ndevelopments in the absence of monetary policy changes. By contrast, the QPM has the repo rate follow a Taylor rule, while the exchange rate \nresponds to an uncovered interest parity condition. This means the QPM should produce more accurate forecasts.\nThe QPM does, however, pose some communication challenges. In particular, the projected path for the repo rate should not be seen as a policy \ncommitment, and at times the MPC may set rates differently (for instance, if the MPC believes there are skewed risks to the forecast). Exchange \nrate forecasts will also typically be wrong in the shorter term, simply because of market volatility. However, these challenges have been \nsurmounted by the many other central banks that use QPM-style models, and should prove as manageable in South Africa.\n1\t D Smal, C Pretorius and N Ehlers, ‘The core forecasting model of the South African Reserve Bank’, South African Reserve Bank Working Paper Series No. \nWP/07/02, June 2007.\n2\t B Botha, S de Jager, F Ruch and R Steinbach, ‘The quarterly projection model of the SARB, South African Reserve Bank Working Paper Series No. WP/17/01, \nSeptember 2017.\n3\t Generally speaking, the economy is in equilibrium when supply equals demand. Equilibrium in the QPM is when output is at potential and inflation \nis on target.\nFive-year-ahead inflation forecast (per cent)\nFive-year yield (per cent)\nInflation expectations and borrowing costs\nSources: Bloomberg and IMF\nTurkey\nBrazil\nRussia\nSouth Africa\nMexico\nPeru\nPoland\nThailand\nHungary\nChile\nPhillippines\n1\n2\n3\n4\n5\n6\n7\n8\n0\n2\n4\n6\n8\n10\n12\n5\nMonetary Policy Review October 2017\nBox 2\t Interpreting estimates of the South African neutral \nreal interest rate \nThe neutral real interest rate (NRIR) is a central concept in monetary \neconomics. It is defined as the interest rate consistent with stable \ninflation and an economy operating at full potential. If policy is above \nthe neutral rate, everything else being equal, inflation falls and growth \nslows, while a policy rate below neutral has the opposite effect. For \nthis reason, the NRIR is the basis for characterising a given policy \nstance as expansionary, contractionary or neutral.\nUnfortunately, the neutral rate is difficult to specify with much \ncertainty. Unlike other indicators of economic activity, such as gross \ndomestic product, unemployment or inflation, it is unobservable and \ntherefore has to be estimated. There are various methods for doing \nthis, ranging from simple historical averages or a Hodrick-Prescott \nfilter to more complex econometric techniques. These methodologies \nyield a broad range of estimates; for instance, internal research has \ngenerated point estimates for 2015 that range from -1.5% to 2%. \nThe South African Reserve Bank’s Quarterly Projection Model (QPM) \n(described in Box 1) uses an estimate constructed from the global real \nneutral rate, a country risk premium and changes in the equilibrium \nreal exchange rate. This approach suggests the NRIR is currently \naround 1.5%. More recent research applying the methods pioneered \nby Laubach and Williams yields similar conclusions.1 \nThe imprecision of NRIR estimates means policymakers have to use \nthem cautiously. However, the available research supports several \nsubstantive conclusions. First, over the course of inflation targeting, \nmonetary policy has mostly been either neutral or expansionary. \nDifferent estimates generally concur that episodes of tight monetary \npolicy have been few and short-lived (see figure). Second, the neutral \nrate in South Africa has fallen significantly in the post-crisis period, \nwhich is consistent with the experience of other countries. Third, as \nthe inflation rate slowed in mid-2017, the real interest rate moved \nbriefly above neutral. This helped motivate the Monetary Policy \nCommittee’s July rate cut.\n1\t L Kuhn, F Ruch and R Steinbach, ‘Reaching for the (r)-stars: estimating \nSouth Africa’s neutral real interest rate’, paper presented at the biennial \nconference of the Economic Society of South Africa, 30 August–\n1 September 2017.\nContractionary\nPer cent\n2008\n2010\n2012\n2014\n2016\n2018\nReal interest rate gap\nSource: SARB\nReal interest rate gap\n(Sep 2017)\nReal interest\nrate gap\n(Jul 2017)\nExpansionary\n-3\n-2\n-1\n0\n1\n2\n3\n4\nPer cent\n2000 2002 2004 2006 2008 2010 2012\n2014 2016\nNRIR and its uncertainty\n \n90%\n \n30%\n \n60%\n \nReal interest rate (ex ante)\n-1\n0\n1\n2\n3\n4\n5\n6\n7\nSource: SARB\nMonetary Policy Review October 2017\n6\nBox 3\t The Taylor rule: ‘look what you made me do’1\nTaylor rules offer simple guidelines for monetary policy decisions. They \nare named after the economist John Taylor, who showed that interest \nrate decisions by the United States Federal Reserve usually followed \na straightforward rule-of-thumb based on inflation and growth.2 \nTaylor-type rules have since been developed for many countries, and \nare widely consulted by central banks, academic economists and \nanalysts.\nThe South African Reserve Bank’s Quarterly Projection Model (QPM \n– see Box 1) allows the policy rate to adjust to changing conditions \nfollowing a Taylor-type rule.3 This rule starts with a neutral rate of \ninterest (described in Box 2). Policy then moves from the neutral rate \nbased on how far expected inflation is from the target (inflation gap) \nand how far growth is from potential (the output gap).4 The QPM \nTaylor rule also has a large smoothing parameter, which means \nprevious interest rate decisions influence the future rate path. This \nreduces the volatility of the rate forecast, keeping it in line with actual \npolicy behaviour.\nThe QPM Taylor equation is not necessarily the best guide to South \nAfrican monetary policy. The weights assigned to the different \nvariables in the rule may be contested. The equation also does not \nexplicitly distinguish between supply- and demand-side shocks. \nFinally, estimates of the true neutral rate or the actual potential growth \nrate are uncertain. For these reasons, the Taylor rule is just one of \nmany inputs into policy decisions.\nThose caveats aside, assessing policy against the Taylor rule yields \nseveral points. One is that policy decisions do not focus exclusively on \ninflation; a Taylor rule with a zero weight for growth does not fit the \ndata. Rather, monetary policy plays a countercyclical growth role, and \nit does this more firmly when inflation is well behaved. Second, if the \nsmoothing parameter is relaxed, the Taylor rule indicates the actual \nrepo rate was below the Taylor rule level through much of the post-\ncrisis period. This may reflect overestimation of the output gap at the \ntime. It also suggests monetary policy was making an unusually large \neffort to raise growth – albeit without much success. Finally, the Taylor \nrule predicted a decrease in the repo rate in the third quarter (although \nit smoothed the adjustment over the entire quarter, not being obliged \nto wait for MPC meetings or to move in discrete 25 or 50 basis point \nincrements). Once this adjustment was achieved, the model saw no \nneed for an additional cut. Indeed, over the forecast period, it shows \nrates rising again in 2019, which is due to the combination of a less \nnegative output gap, a higher neutral rate (mainly given higher interest \nrates in advanced economies) and a persistent overshoot of the \nmodel’s longer-run 4.5% target.\n1\t Actually, we are responsible for our own actions. This is not a Taylor \nSwift rule.\n2\t J B Taylor, ‘Discretion versus policy rules in practice’, 1993, available at \nhttp://web.stanford.edu/~johntayl/Papers/Discretion.PDF.\n3\t The precise QPM Taylor rule is as follows:\n\t\nwhere the nominal repurchase rate (it ) is modelled as the sum of the past \nnominal repurchase rate, lagged by one quarter (it–1); the neutral nominal \nrepurchase rate (i t); the forward-looking CPI inflation gap \n(Eπt+3 + Eπt+4 +Eπt+5) – π*; and the output gap (yt – y t ).\n4\t In the QPM rule, the target is set at 4.5%, the midpoint of the 3–6% range. \nThe model requires a point target because it cannot solve for an entire \ntarget range. For forecasting purposes, the MPC has chosen to use the \nmiddle of the target range as that point.\nPer cent\n-3\n0\n3\n6\n9\nDecomposition of the Taylor rule repo rate\n \nNeutral repo rate \n \nOutput gap\n \nInflation gap\n \nRepo rate\n2012\n2014\n2015\n2016\n2017\n2018\n2019\n2013\nSource: SARB\nPer cent\n2008\n2006\n2004\n2002\n2000\n2010 2012 2014 2016 2018\nActual repo rate compared to Taylor rule guideline\nSource: SARB\nSARB's Taylor rule\nrepo rate\nActual repo rate\n4\n6\n8\n10\n12\n14\n \n* 1 \n*\nit = 0.79it–1+ (1 – 0.79){i t +1.57 [3 (Eπt+3 + Eπt+4 +Eπt+5 ) – π*] + 0.54(yt – yt )} + εt\n7\nMonetary Policy Review October 2017\nA global economic upswing\nGlobal growth has accelerated since the previous MPR, \nmaking the current upswing the most sustained of the post-\ncrisis period. Previously identified risks to the world economy \nhave also receded: China, in particular, appears to have averted \nan abrupt slowdown. Yet the recovery is still missing two \nimportant pieces. First, inflation rates in advanced economies \nremain stubbornly below targets, delaying the process of \nmonetary policy normalisation. Second, productivity growth \ncontinues to be very subdued, with long-run implications for \nliving standards.\nAdvanced economies: more \ngrowth than inflation\nAt the beginning of 2017, advanced economy growth and \ninflation forecasts were more or less equally promising. \nGrowth was running above potential and output gaps were \nnearly closed, while labour markets appeared to be near full \nemployment. With little or no spare capacity remaining in these \neconomies, inflation rates seemed likely to stabilise at targeted \nlevels. This left the way open for central banks to normalise \npolicy to prevent inflation from overshooting.\nIn recent months, growth projections have improved further, \nparticularly in Japan, the euro area and Canada – but inflation \nforecasts have shifted down again. Lower inflation has been \npartly due to lower energy prices, yet inflation and wages are \nalso not reacting as expected to full employment and higher \ngrowth. The historical relationships between these variables \nmay yet re-emerge, producing upside inflation surprises. At \nthis moment, however, advanced economy central bankers \nface the possibility that the normal transmission mechanism of \nmonetary policy has weakened.\nIn the US, growth should exceed 2% annually for the 2017–\n2019 period, although substantial fiscal stimulus now appears \nunlikely. Unemployment remains very low, having fallen as low \nas 4.3% in July 2017 – below most estimates of the ‘natural’ \nrate of unemployment. Broader measures of labour market \nhealth are similarly encouraging: for instance, quit rates and \njob opening rates are back at pre-crisis levels. The US recovery \nsince the global financial crisis has not been the fastest on \nrecord but it has been one of the longest, having so far lasted \nmore than nine years. Although this suggests a recession is \noverdue, over the post-war period the duration of recoveries \nhas not been an effective predictor of their remaining lifespan: \nexpansion phases have not died of old age.1 \n1\t\nG D Rudebusch, ‘Will the economic recovery die of old age?’, \nFRBSF Economic Letter No. 2016-03, 8 February 2016.\nPercentage change\n2016\n2017\nEvolution of forecasts for 2017 growth and inflation\nfor G3 economies*\n* Weighted using 2016 PPP GDP weights\nSources: Consensus Economics, IMF and SARB\n \nReal GDP\n \nConsumer inflation\n1.5\n1.6\n1.7\n1.8\n1.9\n2.0\n2.1\nJan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov\nPercentage of potential GDP\n2010\n2012\n2014\n2016\n2018\n2010\n2012\n2014\n2016\n2018\n2010\n2012\n2014\n2016\n2018\nOutput gap\nSource: SARB \nUnited States\nEuro area\nJapan\n-4.0\n-3.5\n-3.0\n-2.5\n-2.0\n-1.5\n-1.0\n-0.5\n0.0\n0.5\n1.0\nMonetary Policy Review October 2017\n8\nWhile the US has been the best-performing major advanced \neconomy through much of the post-crisis period, Japan and \nthe euro area have recently matched its performance. In both \nthese cases, growth is now expected to peak this year at levels \nclose to 2%, before reverting to trend levels in 2018 and 2019 \n(the International Monetary Fund (IMF) expects 1.6% for the \neuro area in both these years, and 0.6% and 0.9% for Japan). \nThe Japanese economy is enjoying its longest expansion \nphase in more than a decade (and the third-longest in its post-\nwar history), and unemployment has fallen to just 2.8% of the \nworkforce, with the number of jobs available now exceeding \napplicants by 50%. Euro area growth has been stronger than \nJapan’s, and the region has also outpaced the US over the \npast two years (with output up 4.1% since the middle of 2015, \nversus 3.5% in the US). Euro area unemployment, however, \nremains elevated at nearly 9%, although it has fallen from crisis-\nera peaks and is now back at 2005 levels (if not the 2007/08 \ntrough of almost 7%).\nDespite stronger growth, inflation rates in all these economies \nhave slowed. In the US, personal consumption expenditure \n(PCE) inflation overshot the Fed’s target in February, reaching \n2.2%, but it has since shifted lower, to 1.4% in July. Similarly, \ncore inflation peaked at 1.9% in January 2017, but has now \nslumped back to 1.5%; it has been more than five years since \ncore inflation was above 2%. Inflation rates in the euro area \nhave been lower still. Headline inflation also peaked in the first \nhalf of the year, reaching 1.9% in April (and 2.3% in Germany), \nbut subsided to 1.4% in May. Japanese inflation remains close \nto zero, as it has for three decades.\nReflecting on these trends, it is clear a surge in oil prices was \nresponsible for higher inflation in the first few months of the \nyear. More broadly, supply shocks of one type or another \nexplain most of the increases in advanced economy inflation \nover the post-crisis period. Japan’s year of above-target \ninflation was caused by a value-added tax (VAT) increase; \nless idiosyncratically, super-loose monetary policies have \ntransmitted to inflation mainly through exchange rates. This \nis an unreliable basis for achieving inflation targets. Not all \ncountries can depreciate at the same time. Furthermore, \nsupply shocks are necessarily temporary and will drop out \nof inflation measures after 12 months – unless they change \nbroader wage and price-setting behaviour.\nTo achieve inflation targets more consistently, advanced \neconomy central banks need wage growth and aggregate \ndemand to generate stronger price pressures. There are \nseveral reasons why this may not be happening. As the \nJapanese example demonstrates, labour markets can \nbecome extremely tight without sparking inflation. This may be \nbecause additional labour demand is met with higher labour \nforce participation, meaning the labour supply adjusts instead \nof the price. Alternatively, conditions of employment may \nimprove instead of wages, for example, through a part-time \npost becoming permanent. More broadly, labour shares of \nPer cent\n2017\n2018\n2019\n2016\n2017\nEvolution of US real GDP forecasts\nSources: IMF and SARB\n2.0\n2.1\n2.2\n2.3\n2.4\n2.5\n2.6\n2.7\n2.8\n2.9\n3.0\nJan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov\nPercentage change over 12 months (both scales)\n2011\n2012\n2013\n2014\n2015\n2016\n2017\nG3 inflation* and energy prices\n* Weighted by purchasing power parity\nSources: Bloomberg and SARB\n \nBrent crude oil (right-hand scale)\n \nHeadline inflation\n \nCore inflation\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n-60\n-40\n-20\n0\n20\n40\n60\n80\nPercentage change over 12 months\n-0.5\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n3.5\nTargeted inflation\n \n2017 average\n \nInflation target\n \nFive-year average\n \nTarget range\nCanada\nEuro area\nJapan\nSouth Korea\nSweden\nSwitzerland\nUnited Kingdom\nUnited States\nNorway\nAustralia\nSources: Haver and respective central banks\n9\nMonetary Policy Review October 2017\noutput have fallen in many economies, so labour markets have \nless influence on economy-wide prices than they used to.2 \nFurthermore, globalisation and other supply-side advances \nmay be exerting enough disinflationary force to overwhelm \ndemand-side factors.3 \nAlthough longer-term inflation expectations appear to be on \nor close to target in most advanced economies, central banks \ntend to be more pessimistic. The European Central Bank (ECB) \nstaff forecast indicates inflation will be at 1.6% in 2019, while \nthe Bank of Japan projects inflation at 1.5% by March 2019 \n(compared with targets of 2% in both cases). The Fed’s ‘dot \nplot’ is an exception, with the median inflation projection at \n2% for 2018 and 2019. Market participants, however, expect \na markedly lower path for inflation and the federal funds rate.\nEmerging market growth accelerating\nEmerging market economic growth accelerated in the first half \nof 2017. The IMF’s World Economic Outlook forecasts indicate \nfurther improvements in emerging market performance, with \noverall growth rising to 4.6% in 2018 and 4.8% in 2019, from \n4.3% in 2016. India’s economy appears to be returning to growth \nrates over 7%, following the demonetisation shock of late-2016 \n– in which almost 90% of the cash in circulation was declared \ninvalid – as well as uncertainties over the new General Sales \nTax system. China’s economy has beaten expectations over \nthe first two quarters of the year, with growth averaging 6.9%. \nShort-term indicators point to a slowdown in Chinese growth in \nthe second half of 2017, explained by fading fiscal stimulus and \nnew policy measures to slow debt accumulation and contain \nproperty prices. Over the medium term, growth is likely to be \nclose to the government’s 6.5% goal, although the sustainability \nof this growth depends crucially on debt stabilising.\nThere are relatively few exceptions to the emerging market \nacceleration trend. One is Brazil: first-quarter data suggested \nthe economy was finally recovering, but growth slowed again in \nthe second quarter amid a resurgence of political uncertainty. \nGross domestic product (GDP) is still about 8% below the \n2014 peak. Another is Venezuela, which is experiencing the \nworst economic crisis in its history, with output down around \n35% since 2013. Growth in sub-Saharan Africa appears to be \npicking up from 2016’s long-term low (of 1.3%), but projections \nare still well below the longer-term trend (at 2.7% for 2017 and \n3.5% for 2018, according to the IMF, versus a 2000–2015 \naverage of 5.5%).\nInflation in major emerging markets has slowed this year, \nconcluding a period in which many economies grappled with \nabove-target inflation. For instance, inflation in Brazil decelerated \nfrom 6.3% in 2016 to just 2.7% as of July 2017. Indian inflation \nreached 2.4% in July, from 4.5% in 2016; and Russian inflation \nfell to 4.4% in June, from a 2016 average of 5.4%. With inflation \nrates now generally below targets, emerging market central \n2\t\nInternational Monetary Fund, World Economic Outlook, Chapter 3, \nApril 2017.\n3\t\nBank for International Settlements, Annual Report 2016/17, 2017.\nIndex\n2001 2003 2005 2007 2009 2011 2013 2015 2017\nDiffusion index of GDP growth in emerging \nmarket countries\nSources: IMF and SARB\nForecast\nMore economies accelerating\nMore economies decelerating\n30\n40\n50\n60\n70\n80\n90\nMonetary Policy Review October 2017\n10\nbanks have had room to cut rates. Analysts’ forecasts suggest \nrates will, on balance, decline further until mid-2018, although \nthe trend reverses course in the second half of that year with a \nplurality of central banks expected to raise rates again.\nThe productivity problem\nFor all the optimism engendered by the global upswing, there \nis still little evidence of rising productivity growth. Productivity \nrepresents how efficiently the factors of production are used. It \nis usually measured as the portion of growth left unexplained \nafter accounting for changes in capital or labour, although \nit is also often discussed in terms of output per worker (i.e. \nlabour productivity). Productivity growth matters because it is \nthe most important determinant of long-run living standards. \nFurthermore, as demographic factors start to constrain \nlabour force growth in most parts of the world, it will become \nincreasingly difficult to achieve robust economic growth \nwithout a productivity recovery.\nIn advanced economies, productivity growth has slowed \nfrom about 1% annually in the pre-crisis era to just 0.2% \nsince then. In emerging markets, productivity growth has also \ndecelerated, from 2.8% between 2000 and 2007 to 1.1% post-\ncrisis. It remains above advanced economy levels, however, \ndue to emerging markets’ distance from the productivity \nfrontier. Chinese labour productivity, to take one example, \nis still less than a quarter of US labour productivity, despite \nseveral decades of rapid growth.\nThere are various explanations for lower productivity growth. \nOne school of thought emphasises the lingering effects of the \nglobal financial crisis (so-called productivity hysteresis). For \ninstance, the crisis may have left corporate balance sheets \ntoo weak to fund adequate research and development. \nAlternatively, capital may have been misallocated from its \nbest uses, perhaps into unwanted houses, with lasting \nconsequences. It is also possible that demand has been too \nfeeble to elicit productivity-enhancing investments. A different \nclass of explanations relies on longer-term trends, such as \naging workforces, slowing international trade integration or a \nfading information technology boom.4 One notable version of \nthis argument holds that the productivity-enhancing inventions \nwhich transformed living standards between about 1870 \nand 1970 were simply superior to more recent technological \ngains: electricity and indoor plumbing helped more than \nTwitter and Siri.5 The opposing view is that a fourth industrial \nrevolution, based on robots and biotechnology, will still deliver \ntransformative productivity gains.6\n4\t\nFor details on slowing productivity see G Adler, R A Duval, D Furceri, \nS Kiliç Çelik, K Koloskova and M Poplawski-Ribeiro, ‘Gone with \nthe headwinds: global productivity’, International Monetary \nFund Staff Discussion Note No. SDN/17/01, April 2017.\n5\t\nR J Gordon, ‘The rise and fall of American growth: the US standard of\nliving since the civil war’, 2016.\n6\t\nK Schwab, ‘The fourth industrial revolution: what it means, how to \nrespond’, January 2016, available at https://www.weforum.org/\nagenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-\nhow-to-respond/.\nPer cent\n2000\n2006\n2003\n2009\n2012\n2015\nTotal factor productivity\n \nAdvanced economies\n \nEmerging market and developing economies\n \nSouth Africa\nSources: IMF and SARB\n-3\n-2\n-1\n0\n1\n2\n3\n4\n5\nNumber of countries\nConsensus forecasts for changes in emerging \nmarket policy rates\nSource: Bloomberg\n0\n5\n10\n15\n20\n25\nEnd-2018\nMid-2018\nEnd-2017\n \nHigher\n \nUnchanged\n \nLower\n11\nMonetary Policy Review October 2017\nGlobal risks\nThere are a range of risks to the current global outlook. One \nof the most important is advanced economy inflation. Upside \ninflation surprises could shift policy expectations abruptly, \naffecting capital flows worldwide – a scenario discussed in \nmore detail in the financial markets chapter of this MPR. A \nsecond major risk is China’s growth trajectory. Better growth \noutcomes in the first half of the year were paid for with more \ndebt and larger financial sector imbalances. The political cycle \nnow favours stabilising the financial system, even at the price \nof somewhat lower short-term growth. This adjustment is \nlikely to be carefully controlled, but long-standing fears of a \n‘hard-landing’ remain valid. A third risk, which has intensified \nlately, is the possibility of conflict on the Korean peninsula, \nwhich would massively disrupt the fastest-growing part of the \nworld economy.\nConclusion\nThe SARB’s forecasts anticipate global growth will peak this \nyear, at 3.4%, before slowing marginally to 3.3% for 2018 and \n2019. Inflation is projected to pick up in advanced economies, \non average getting close to, but not above, targets. \nShort-term interest rates will therefore rise moderately, but \nremain below longer-term averages. This suggests global \nconditions will remain favourable, sustaining what has been \nthe best and broadest world recovery since the global \nfinancial crisis.\nMonetary Policy Review October 2017\n12\nFavourable global financial\nconditions \nThe global financial backdrop remains favourable. Riskier \nassets – including emerging market assets – are benefitting \nfrom stronger global growth, muted volatility and very low \nadvanced economy interest rates. These conditions have \nsupported South African financial assets. Nonetheless, South \nAfrica has not performed as well as its emerging market peers, \nreflecting adverse domestic factors. \nLow volatility and low interest rates\nGlobal economic growth has picked up, but inflation in \nadvanced economies is still very low. Investors expect major \ncentral banks to keep policy expansionary for an extended \nperiod, which is fostering a mix of buoyant financial asset \nperformance and unusually low levels of volatility (only briefly \ninterrupted by shocks such as weapons tests by North Korea). \nThese conditions may foment complacency; historically, \nperiods of ultra-low volatility have preceded crises.7 For the \ntime being, however, the world financial environment is good for \ngrowth and uncommonly forgiving of domestic weaknesses.\nIn contrast to the ‘taper tantrum’ period of mid-2013, financial \nmarkets have confronted the prospect of advanced economy \nmonetary policy normalisation with a degree of equanimity. \nIn the US, market participants judge it unlikely that the Fed will \nhike interest rates more than twice by the end of 2018 – whereas \nthe Fed’s own median projections (the ‘dots’) still imply four \nmore increases over this period. Similarly, interest rate futures \nindicate only even chances of a higher ECB deposit rate \nnext year.\nAs a result, interest rates in advanced economies remain very \nlow. Long-term US yields have declined again and the yield \ncurve has flattened, helped by market expectations that the \nTrump administration is unlikely to deliver meaningful fiscal \nstimulus. Core eurozone bond yields are lower still, while \nperipheral spreads have narrowed. Other asset prices are also \nelevated. The US Standard & Poor’s 500 (S&P 500) Index, \nfor instance, reached an all-time high in September, with its \ncyclically-adjusted price earnings ratio above 2008 levels. \nGlobal house prices are also back at around 2008 levels – \nalthough evidence of excessive leverage is restricted to a few \nsmaller economies.\nEmerging market assets have outperformed their advanced \neconomy counterparts this year. Local currency debt markets \nhave mostly benefitted from lower inflation and corresponding \nmonetary easing, while equities have narrowed their valuation \ngap (relative to expected earnings) with advanced markets. \nEmerging markets may yet prove vulnerable to a faster-than-\nexpected pace of policy normalisation by major central banks. \n7\t\nJ Danielsson, M Valenzuela and I Zer, ‘Learning from history: \nvolatility and financial crises’, Federal Reserve Board Finance and \nEconomics Discussion Series No. 2016-093, October 2016.\nRatio\n2010\n2011\n2012\n2013\n2014\n2015\n2017\n2016\nForward-looking price earnings ratio of the S&P 500\nSource: Bloomberg\n10\n12\n14\n16\n18\n20\nPer cent\n2017\n2018\n2019\nFOMC median forecast and implied market\nprojections for the federal funds rate\nSource: Bloomberg\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n3.5\n \nFederal funds futures (before June 2017 hike)\n \nFederal funds futures (latest)\n \n‘Dots’ median\nIndex\n2000 2002 2004 2006 2008 2010\n2016\nGlobal house prices\nSource: IMF\n2012 2014\n90\n100\n110\n120\n130\n140\n150\n160\n170\n13\nMonetary Policy Review October 2017\nHowever, their fundamentals have improved markedly in recent \nyears and asset valuations appear much less stretched than \nthey were, for example, in 2013.\nThe euro has continued to strengthen in recent months, \nbuoyed by a sustained economic recovery and market-\nfriendly election outcomes. Meanwhile, stronger prices of raw \nmaterials have resulted in an outperformance of commodity \ncurrencies, while emerging market currencies have generally \nsustained early 2017 gains. Of course, for one currency to \nappreciate another must weaken. In recent months, much of \nthe depreciation pressure has been absorbed by the US dollar, \nwhich has weakened by about 9% so far this year (measured \nagainst a broad basket of currencies).\nGlobal factors supporting \ndomestic markets\nFavourable global conditions have helped limit the impact of \ndomestic problems on South African financial markets. Despite \na series of shocks over the past six months, the rand has \nfollowed a relatively stable trend, the sovereign yield curve has \nshifted lower and the JSE All-Share Index has gained around \n6%. Nonetheless, South African assets have not performed as \nwell as their emerging market counterparts.\nIn March 2017 the rand reached R12.30 to the US dollar, a \nsubstantial recovery from the January 2016 low-point of almost \nR17 to the dollar. It depreciated abruptly again following the \ncabinet reshuffle and subsequent credit ratings downgrade, \nfalling close to R14 to the dollar in early April, but has since \nrecovered some of these losses. However, the rand’s gain of \nnearly 2% versus the US dollar since the start of the year has \nfallen short of a 6% rally in the JPMorgan Emerging Markets \nCurrency Index over the same period.\nOver this same six-month span, the South African sovereign \nyield curve has shifted lower. The curve has also steepened, \nwith yields declining by around 80 basis points at the short end \nof the curve, but only about 40 basis points at the long end. \nThese changes are partly explained by lower inflation, with \nmore movement at the short end because near-term inflation \nprojections have fallen more than longer-term expectations. \nYet global influences have also been important. South Africa’s \nlong-term yields have been strongly correlated with their \nUS counterparts this year, with South African fixed income \nsecurities attracting positive net portfolio inflows totalling \nUS$3.96 billion in the first eight months of 2017 (according to \nthe Institute of International Finance).\nThe JSE All-Share Index has rallied in the third quarter of 2017, \nhelped in part by the more favourable interest rate environment. \nThe index nonetheless continues to underperform emerging \nmarket peers (in US dollar terms). Furthermore, much of its \ngains are explained by a few large firms with significant foreign \nexposure; an adjusted version of the index which excludes \nthese firms is more consistent with South Africa’s weak \ngrowth outlook.\nRatio\nIndices: 2 January 2017 = 100\nJan\n2017\nFeb\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nEmerging market equities versus global counterparts\nSource: Bloomberg\n \nMSCI Emerging Markets Index\n \nMSCI World Index\n \nEmerging Markets/World (right-hand scale)\n0.95\n1.00\n1.05\n1.10\n1.15\n100\n105\n110\n115\n120\n125\n130\nIndices: 2 January 2017 = 100\nJan\n2017\nFeb\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nCurrencies\nSource: Bloomberg\n \nJPMorgan Emerging Markets Currency Index\n \nUS$/ZAR\n95\n97\n99\n101\n103\n105\n107\n109\n111\n113\nPer cent\nPercentage points\nYears\n-0.8\n-0.6\n-0.4\n-0.2\n0.0\nYield curve\n \n12 April 2017\n \n26 September 2017\n \nChanges (right-hand scale) \n1\n2\n3\n5\n7\n10\n15\n20\n25\n30\n6\n7\n8\n9\n10\nSource: Bloomberg\nMonetary Policy Review October 2017\n14\nMarket expectations for \nmonetary policy\nMarket expectations for near-term interest rates have fallen \nsteadily over the past six months. In April, following the \ndowngrades, investors anticipated further rate increases over \nthe next two years; three months later, they were pricing in \ncuts. This downward shift followed the data, with both inflation \nand growth surprising on the downside. The July repo rate \ncut prompted short-rate expectations to decline further, with \nforward rate agreements (FRAs) fully pricing in a 50 basis \npoint reduction in the repo rate over the following 12 months \n– although about a quarter of this fell away following the \nSeptember meeting. The FRA curve also angles back up for \nthe period 12–24 months ahead, suggesting that investors do \nnot see scope for a more extended cutting cycle.\nRisks\nGlobal asset prices remain vulnerable to the repricing of a variety \nof risks. On the global front, a reassessment of the prospective \npace of monetary policy normalisation could easily steepen \nyield curves and raise risk premiums on a variety of assets. In \naddition, central banks’ balance sheets are likely to shrink over \nthe coming years, with the Fed leading the process. While the \nFed has signalled its intent to proceed gradually and in a policy-\nneutral way, a process it hopes will be ‘like watching paint \ndry’, the consequences of balance sheet reduction for bond \nyields remain unknown.8 Finally, while private sector leverage \nin advanced economies appears to be under control (with the \nexception of a few small economies), equities and corporate \ndebt look expensive relative to fundamentals – especially in the \nUS – and could sell off in response to disappointing growth or \ncorporate profit developments.\nSimilarly, on the domestic front, asset prices appear vulnerable \nto both a repricing of global risk and a deterioration in \nSouth Africa’s credit standing. The exchange rate has been \nrelatively stable at levels markedly stronger than at the start \nof 2016. Local-currency bond yields – especially their inflation \nexpectation component – do not appear to offer much of a \nbuffer against potential upside inflation surprises. Furthermore, \nthe forward-looking price-earnings ratio of the JSE All-Share \nIndex remains well above long-run norms. The present stability, \ntherefore, may prove brittle.\n8\t\n‘Transcript of Chair Yellen’s Press Conference’, 14 June 2017, p17, \navailable at https://www.federalreserve.gov/mediacenter/\nfiles/ FOMCpresconf20170614.pdf.\nIndices: 2 January 2017 = 100\nJan\n2017\nFeb\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nBond prices\nSource: Bloomberg\n \nJPMorgan Emerging Markets Bond Index\n \nSA 10-year government bond\n99\n100\n101\n102\n103\n104\n105\n106\n107\nIndices: 2 January 2017 = 100\nJan\n2017\nFeb\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nEquity prices\nSource: Bloomberg\n \nMSCI Emerging Markets Index\n \nJSE All-Share Index\n95\n100\n105\n110\n115\n120\n125\n130\n135\nPer cent\nMaturities\n1x4\n2x5\n3x6\n4x7\nForward rate agreements\nSource: Bloomberg\n \n1 April 2017\n \n1 July 2017\n \n31 July 2017\n \n31 August 2017\n \n26 September 2017\n5x8\n6x9\n7x10\n8x11\n9x12\n12x15\n15x18\n18x21\n21x24\n6.4\n6.8\n7.2\n7.6\n8.0\n15\nMonetary Policy Review October 2017\nReal economy: a low \ngrowth trend\nOver the past three years, the economy has adjusted away from \nunsustainable levels of foreign borrowing towards lower domestic \nexpenditure and lower imports. However, this rebalancing has \nbeen achieved mainly through slower growth, with adverse \nconsequences for living standards and fiscal consolidation. \nDespite volatility in the quarterly numbers, South Africa’s \nunderlying growth trend is likely to remain low over the forecast \nhorizon. Moreover, potential growth has fallen further – a direct \nconsequence of weak investment. Escaping these circumstances \nwill require restoring business and household confidence and \nimplementing reforms that raise potential growth.\nPost-crisis shifts in the composition \nof GDP\nSouth Africa’s post-crisis economic history divides neatly into \ntwo periods. Between 2010 and 2013, stimulatory fiscal and \nmonetary policies bolstered demand. This absorbed all the \nlocally available savings as well as large quantities of foreign \ncapital. Both consumption and investment expanded as a \nshare of total output, while net exports contracted as imports \nboomed. The growth response proved weak, however, with \nthe current account and fiscal deficits becoming unsustainably \nlarge relative to output.\nIn the second period, which should probably be dated from the \nMay 2013 ‘taper tantrum’, it became clear that foreigners would \nnot support this scale of borrowing indefinitely. Weakening \ncapital inflows and currency depreciation prompted policy \ncourse corrections through fiscal consolidation and some \nmonetary tightening. Shocks (such as the drought and \nleadership changes at the Ministry of Finance) also intensified \nduring this second period, severely depressing confidence \nlevels. In response, the composition of output shifted \nback towards lower shares for domestic consumption and \ninvestment, as well as higher net exports.\nThe burden of the adjustment was borne more by lower imports, \nnot higher exports, and more by investment than consumption. \nThe result was a low-quality, incomplete adjustment: the \neconomy has not so much changed course as stalled. Given \nthe current forecasts, the composition of output is likely to shift \nfurther away from investment and imports. This may keep the \ncurrent account deficit under control, but a growing share for \ninvestment and exports would be altogether preferable.\nPercentage points\nConsumption\nInvestment\nNet exports\nChanges* in the composition of total output\n-4\n-3\n-2\n-1\n0\n1\n2\n3\n2013–16\n2010–13\n2013–16\n2010–13\n2013–16\n2010–13\n1.9\n-1.2\n1.7\n-1.9\n2.5\n-3.6\n* These figures are calculated as follows: in 2010 consumption\nconstituted 79.2% of total output, and by 2013 it was 81.1%,\na 1.9 percentage point increase.\nSources: SARB and Stats SA\nPercentage points\nConsumption\nInvestment\nNet exports\nBreakdown of the compositional change in output\n-7\n-6\n-5\n-4\n-3\n-2\n-1\n0\n1\n2\n3\n4\n2013–16\n2010–13\n2013–16\n2010–13\n2013–16\n2010–13\n1.9\n-1.2\n1.7\n-1.9\n2.5\n-3.6\n \nHouseholds\n \nGFCF\n \nExports\n \nGovernment\n \nInventories\n \nImports\nSources: SARB and Stats SA\nMonetary Policy Review October 2017\n16\nBox 4\t Why is South Africa missing out on the global recovery?\nSouth African output growth usually follows world growth, but the two have diverged in the post-crisis period. This box quantifies the drivers \nof South Africa’s underperformance.1 The most important factors have been subdued confidence and lower real commodity prices; had these \nvariables instead followed their longer-run averages, 2016 domestic growth would have been about 2%. By contrast, fiscal and monetary \npolicy settings do little to explain the slowdown.\nHistorically, there has been a relatively strong relationship between global and domestic growth: between 1996 and 2016, a 1% increase in \nglobal growth increased the level of South African output by 0.94%. Of course, various other factors affect local growth. This exercise \nconsiders five such variables: the real effective exchange rate (as a measure of competitiveness), commodity prices, fiscal and monetary policy \nsettings and consumer confidence (as a proxy for confidence more generally).\nIt is possible to quantify the discrete impacts using a counterfactual scenario in which these variables are at their longer-run (1996–2013) \naverages. In this scenario, global growth is closer to 4%, commodity prices are higher in 2015 and 2016, the rand is stronger and confidence \nlevels are neutral. Growth is therefore 2.1% in 2016 – as opposed to an actual outcome of 0.3%. Much of the gap is due to declining \nconfidence: had this variable alone been at average levels, growth would have been 1.4% instead.\nThis exercise demonstrates the costs of policy uncertainty and the importance of restoring confidence. It also raises another problem. The \nmodel results suggest that ‘normal’ growth is around 2%, which is below the longer-run 3% trend and less than half the National Development \nPlan aspiration of 5% or more. Evidently, normalising confidence would not be enough to achieve healthy growth rates. Rather, this would \nrequire a structural reform agenda, including lowering prices in network industries and raising investment towards 25% of GDP.2\n1\t Based on a forthcoming Economic Note in the South African Reserve Bank Occasional Bulletin of Economic Notes by T Janse van Rensburg and E Visser \ntitled ‘Decoupling from global growth: is confidence becoming a scarce commodity?’.\n2\t See for instance D Faulkner, C Loewald and K Makrelov, ‘Achieving higher growth and employment’, South African Reserve Bank Working Paper Series No. \n13/03, 2013, available at http://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/5806/WP1303.pdf; and F Groepe, ‘Structural reform \nto promote economic growth’, 2013, available at: https://www.resbank.co.za/Lists/Speeches/Attachments/380/Address%20by%20Deputy%20Governor%20\n%20Francois%20Groepe%20at%20the%20UNISA%20Economics%20Seminar.pdf.\nImpact on domestic growth over 2014–2016, \nwith drivers at historical averages\nPercentage change\n2014\n2015\n2016\nGDP at market prices..........................\n1.70\n1.30\n0.28\nGrowth additions with the following \nvariables at 1996–2013 averages:\n\tGlobal growth.......................................\n0.14\n0.15\n0.37\n\tReal commodity prices.........................\n-0.43\n0.11\n0.55\n\tReal effective exchange rate.................\n-0.05\n0.13\n-0.37\n\tConfidence...........................................\n0.43\n0.99\n1.15\n\tReal interest rates.................................\n0.00\n-0.04\n-0.04\n\tFiscal balance.......................................\n-0.02\n-0.29\n0.13\nWhat total growth could have been....\n1.77\n2.35\n2.06\nForecast\nPercentage change\nWorld growth versus South African growth\nSources: IMF, SARB and Stats SA\nSouth Africa\nPPP-weighted\nMedian\n-2\n-1\n0\n1\n2\n3\n4\n5\n6\n7\n2019\n2017\n2015\n2013\n2011\n2009\n2007\n2005\n17\nMonetary Policy Review October 2017\nSouth Africa’s growth outlook\nThe previous edition of the MPR looked forward to a mild \ngrowth rebound over the 2017–2019 period. However, much of \nthis recovery has been revised away. The original projections \ncorrectly anticipated a recovery in the primary sector, based on \nhigher commodity prices and the end of the drought. However, \nthey did not incorporate either the technical recession at the \nbeginning of the year or the credit ratings downgrades that \nfollowed the March cabinet reshuffle. Given weaker confidence \nand a lower starting point, the latest growth forecast is lower \nby 0.6 percentage points for 2017 and 0.5 percentage points \nfor both 2018 and 2019, relative to the March forecasts.\nAccording to the Bureau for Economic Research (BER), \nconfidence readings for businesses have reached their lowest \nlevels since the global financial crisis. In the most recent \nsurveys, 65–70% of respondents expressed dissatisfaction \nwith business conditions, with more than 50% of respondents \nexpressing pessimism in every sector surveyed. The South \nAfrican Chamber of Commerce and Industry (SACCI) Business \nConfidence Index provides starker results still, with confidence \nnow at its lowest point since 1985. Consumer confidence is \nalso subdued: the First National Bank/Bureau for Economic \nResearch (FNB/BER) index is below global financial crisis \nlevels, and has been since 2015.\nThe ongoing weak confidence episode is mainly attributable to \npolitical uncertainty. The BER’s manufacturing survey confirms \nthis point: the share of respondents identifying the ‘general \npolitical climate’ as the biggest constraint to their business has \nbeen rising for several years. The proportion now stands at \n87%, making political conditions the single greatest problem \nidentified in the survey, above both weak demand and skills \nconstraints. This is also the highest level of concern about the \npolitical environment in the survey’s history.\nExpenditure components* of real GDP\nAnnual percentage change\nComponents\nActual\nSARB forecast\n2015\n2016\n2017\n2018\n2019\nHousehold consumption.......\n1.7\n0.8\n1.0\n1.1\n1.4\n1.4\n1.3\n1.8\nGovernment consumption.....\n0.5\n2.0\n0.5\n1.0\n1.0\n1.0\n1.0\n1.0\nInvestment............................\n2.3\n-3.9\n-0.4\n0.6\n1.1\n0.2\n1.6\n2.0\nExports.................................\n3.9\n-0.1\n2.2\n4.0\n4.1\n0.2\n3.8\n3.8\nImports.................................\n5.4\n-3.7\n3.8\n3.2\n3.1\n1.6\n2.7\n2.8\nGDP......................................\n1.3\n0.3\n0.6\n1.2\n1.5\n1.2\n1.7\n2.0\n*\t Note: Previous estimates are in italics \nSources: SARB and Stats SA\nPercentage change over four quarters\nIndex\n2001 2003 2005 2007 2009 2011 2013 2015 2017 2019\nBusiness confidence and investment\nRMB/BER Business\nConfidence Index\n \nForecast\nSources: RMB/BER, SARB and Stats SA \n10\n20\n30\n40\n50\n60\n70\n80\n90\n-25\n-20\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\nReal fixed investment\nby private business\n(right-hand scale)\nPercentage change over four quarters\nIndex\n1994\n1997\n2000\n2003\n2006\n2009\n2012\n2015\nConsumer confidence and private consumption\nSources: FNB/BER and Stats SA\n-4\n-2\n0\n2\n4\n6\n8\n10\n12\n-20\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\nPrivate consumption\nConsumer \nconfidence \n(right-hand scale)\nIndex\nMajor constraints to the manufacturing sector in \nthe third quarter of 2017\nSource: BER\nShortage of\nunskilled labour\nShortage of\nsemi-skilled labour\nShortage of\nraw materials\nShort-term\ninterest rates\nShortage of\nskilled labour\nInsufficient\ndemand\nCurrent political\nclimate\n0\n20\n40\n60\n80\n100\nMonetary Policy Review October 2017\n18\nInvestment\nThe historical evidence is clear that investment in South Africa \nis highly responsive to uncertainty.9 Accordingly, total real fixed \ninvestment is expected to contract by 0.4% in 2017. Despite \nthis low base, the recovery further out in the forecast is slight, \nwith investment expanding by 0.6% in 2018 and 1.1% in 2019 \n– below the rate of GDP growth. If realised, this would be the \nmost feeble investment recovery of the past two decades.\nThe private sector provides the largest portion of total \ninvestment, accounting for around two-thirds of the investment \nstock. It is also expected to remain the weakest component of \ninvestment growth over the forecast horizon, contracting for a \nthird year in 2017 before returning to marginally positive growth \nin 2018 and 2019.\nInvestment by state-owned enterprises (SOEs) is also \ndepressed. In recent years, SOEs have struggled to spend \ntheir investment budgets, leaving investment forecasts for \nthis subsector too high. SOEs are now also encountering \nfinancing constraints; for example, Transnet experienced \nan undersubscribed bond auction this year. Finally, major \ninvestment projects (such as Eskom’s new power stations) \nare nearing completion, and there are no new projects of \ncomparable size to replace them. Given these considerations, \nSOE investment is projected to contract again in 2017, before \nexpanding slightly in 2018 and 2019 (with 0.5% and 1% growth \nin those years respectively).\nGeneral government is expected to provide the one \nsource of positive investment growth for 2017. National \nand provincial investment budgets have been protected \nfrom fiscal consolidation measures, leaving scope for \nadditional investment.\nGross fixed capital formation\nAnnual percentage change\nActual\nSARB forecast\n2015\n2016\n2017\n2018\n2019\nGeneral government................\n13.4\n1.1\n6.0\n2.0\n2.0\nPublic corporations.................\n6.0\n0.7\n-2.0\n0.5\n1.0\nPrivate business enterprises....\n-1.4\n-6.8\n-1.7\n0.1\n0.8\nTotal........................................\n2.3\n-3.9\n-0.4\n0.6\n1.1\n Sources: SARB and Stats SA\n9\t\nSee T Ajam and J Aron, ‘Fiscal renaissance in a democratic South \nAfrica’, Centre for the Study of African Economies Working Paper \nSeries No. 10, 2007, available at http://EconPapers. repec.org/\nRePEc:csa:wpaper:2007-10; and J W Fedderke, ‘Sustainable \ngrowth in South Africa’, Economic Research Southern Africa \nPolicy Paper No. 20, November 2010, available at https://econrsa.\norg/system/files/publications/ policy_papers/pp20.pdf.\nIndex\n1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017\nEvolution of major constraints to the\nmanufacturing sector\nInsufficient\ndemand\nSource: BER\nCurrent\npolitical\nenvironment\n10\n20\n30\n40\n50\n60\n70\n80\n90\nPercentage change over four quarters\nHistorical downturns in private investment\nSources: SARB and Stats SA \nPeriod\n \n1996Q3–2000Q3\n \n2000Q4–2004Q4\n \n2007Q2–2011Q1\n \n2011Q2–2013Q4\n \n2014Q1–2019Q1\n \nt+10\nt+8\nt+6\nt+4\nt+2\nt\nt-2\nt-4\nt-6\nt-8\nt-10\n-20\n-15\n-10\n-5\n0\n5\n10\n15\n20\n19\nMonetary Policy Review October 2017\nThe 2016 starting point is also unusually low.10 This should \npermit general government investment to expand by 6.0% in \n2017 – and the year did in fact begin strongly, with this category \ngrowing 6.3% in the first half of the year compared with the \nsame period in 2016.\nHousehold consumption\nHousehold consumption growth dipped to 0.8% in 2016, but is \nexpected to average 1% this year, followed by 1.1% growth in \n2018 and 1.4% in 2019. The improvement from 2016 is mainly \ndue to lower inflation as well as some real wealth gains. The \nmain story, however, is that consumption growth is likely to \nbe very weak across the forecast horizon – well below the \npost-1994 average of 3.4%. There are several reasons for this \ndisappointing outlook.\nDisposable incomes are being squeezed by tax increases \n– both from a higher top tax rate and from bracket creep. \nFurthermore, unemployment is likely to increase. The recent \nrise in unemployment recorded by Statistics South Africa (Stats \nSA) is due to rising labour force participation and not net job \nlosses; employment has actually risen over the same period. \nYet the private sector typically only employs more people when \nGDP growth is roughly 2% or more, while government hiring \nremains frozen. The outlook for employment therefore remains \nbleak. Finally, household consumption remains constrained by \nhigh debt levels. Lending growth is also suffering from weak \nconsumer confidence as households defer borrowing for \nlarger purchases (such as cars and houses).\n10\t It is not completely clear why government investment slowed \nabruptly in 2016, but the single biggest contribution seems to have \ncome from a contraction in general government grants made to \nprovinces for building social infrastructure (such as schools).\nPercentage change* in employment\nPrivate sector employment and real GDP\nIntercept is -1.1 which suggests that if real GDP growth is zero, annual\nprivate sector employment could decline by 1.1%. This suggests annual\nreal GDP growth must grow by more than 1.8% to generate positive\nprivate sector employment growth.\nSources: SARB and Stats SA\n* Year on year\n2016 2017\n2018\n2019\n ∆ Employment = -1.13 + 0.63 x (∆ real GDP)\nPercentage change* in GDP\n-6\n-4\n-2\n0\n2\n4\n6\n-2.2\n-1.2\n-0.2\n0.8\n1.8\n2.8\n3.8\n4.8\n5.8\nMonetary Policy Review October 2017\n20\nBox 5\t Household deleveraging by income groups\nHousehold debt grew rapidly before the global financial crisis, \npeaking in 2008 at around 90% of disposable incomes. Since then, \nhouseholds have been deleveraging. As a result, debt ratios are now \nback at 2006 levels of around 70% of incomes – although they \nremain well above longer-run averages.\nThe debt hangover from the boom has been an important contributing \nfactor to the post-crisis slowdown. Although it is unlikely that \nborrowing will resume in the present low-confidence environment, at \nsome point the credit cycle will turn – with significant consequences \nfor growth, inflation and the monetary policy transmission mechanism. \nYet our understanding of debt dynamics is based on high-level data, \nwhich provide only a superficial account of deleveraging behaviour. \nNew research gives us a better sense of which income quintiles are \nreducing debts and also improves our understanding of policy \nimpacts.1 \nData from the National Income Dynamics Study (NIDS),2 a survey \nthat follows individuals over time, show the top two income quintiles \nhave deleveraged the most, relative to 2008. From 2010/11, some \ndeleveraging becomes visible among all income groups. Debt \noutstanding is, predictably, very different across the income quintiles. \nConditional on having formal debt, the average (median) outstanding \nloan for the richest 20% was R118 293 (R32 115) in 2014/15, while \nthat of the poorest 20% was R7 426 (R2 000) in 2014/15. The debt \nratios of the top and bottom quintiles are nonetheless the highest: \nthe ratio for the richest 20% was 45% in 2014/15, against 38% for \nthe poorest. (These levels are not comparable with those described \nat the start of this box given the usual problem of surveys not \nreaching a representative sample of wealthier people. The trends are \nnonetheless similar.)\nAccording to the NIDS data, the share of households with debt has \nincreased during the post-crisis period. Nonetheless, for indebted \nhouseholds the average outstanding formal debt has fallen from \nR80  460 in 2008 to R54 719 in 2014/15 (in nominal rands). This \nimplies that more households are borrowing, but they are borrowing \nsmaller amounts. The mix of more loans but smaller overall debts \nmeans the overall deleveraging trend is not broad-based, but rather \na consequence of reduced big-ticket loans.\nThis pattern is explained by the disproportionately slow growth of \nmortgages in the post-crisis period.3 Because new mortgages have \nbeen relatively scarce, the stock of mortgage debt is still dominated \nby pre-crisis loans. Given that the value of these debts is fixed in \nnominal terms, whereas incomes have roughly matched inflation, \ndeleveraging has occurred almost automatically over the ensuing \n1\t\nBased on a forthcoming paper by A Bosch and M Günther \ntitled ‘Debt deleveraging in post-crisis South Africa’.\n2\t\nSouthern Africa Labour and Development Research Unit \n(SALDRU), ‘National Income Dynamics Study 2014–2015’, 2017, \navailable at http://www.nids.uct.ac.za/ (accessed 9 June 2017).\n3\t\nThis also fits the fact that richer households have deleveraged \nmost: just 5.5% of all households in the NIDS data hold a \nmortgage loan, compared to nearly 25% in the top quintile.\nPer cent\nPer cent\n2006\n2008\n2010\n2012\n2014\n2016\nHousehold debt and debt service costs\nSource: SARB\n7\n8\n9\n10\n11\n12\n13\n14\n15\n70\n72\n74\n76\n78\n80\n82\n84\n86\n88\n90\nDebt-service cost to disposable income \n(right-hand scale)\nHousehold debt to \ndisposable income \nPer cent\nAverage formal debt to income ratios\nSources: SALDRU and SARB\n \nPoorest 20%\n \nSecond 20%\n \nMiddle 20%\n \nFourth 20%\n \nRichest 20%\n0\n10\n20\n30\n40\n50\n60\n2014/15\n2012\n2010/11\n2008\n21\nMonetary Policy Review October 2017\ndecade.4 As a result, the ratio of mortgage debt to incomes has fallen from \nnearly 70% in 2008 to under 50% in 2014/15. This suggests a new \nupswing of the credit cycle could be led by mortgage lending.\nThe data also offer insight into the contribution of monetary policy to \ndeleveraging. In theory, the link is ambiguous. Lower interest rates could \nfacilitate deleveraging by lowering interest burdens. However, cheap \nmoney should also incentivise demand for credit. By this logic, higher rates \nwould encourage deleveraging. The data indicate that a higher repurchase \n(repo) rate has indeed promoted deleveraging, but only for the upper \nincome quintiles. This may be because poorer households have less scope \nto reallocate income to debt repayment. Alternatively, poorer households \nlikely borrow at larger spreads over the repo rate, so the incentive effect \ncould be diluted. These findings are consistent with other studies, which \nhave found that monetary policy pass-through differs between income \ngroups.5 The effect on deleveraging is nonetheless small, and much less \nsignificant than the decline in real mortgage debt stocks since the crisis.\n4\t\nThe NIDS data show that average incomes have increased \nfrom R104 228 to R120 461 between 2008 and 2014/15.\n5\t\nSee, for example, R Ramcharan, A Kermani and M Di Maggio, \n‘Monetary policy pass-through: household consumption \nand voluntary deleveraging’, Meeting Papers No. 256: \nSociety for Economic Dynamics, 2015.\nGovernment and fiscal consolidation\nNational treasury has committed to a fiscal consolidation \nprogramme to stabilise debt levels, which have already doubled \nfrom their pre-crisis starting point. Consolidation has slowed \nthe growth rate of government spending: having expanded by \nan annual average real rate of 4.5% between 2000 and 2007, \nand 3.1% between 2010 and 2013, government consumption \nhas grown by just 1.0% annually since 2014. The SARB’s \nforecast indicates narrowly positive growth this year (0.5%) \nfollowed by 1.0% growth in 2018 and 2019.\nAlthough spending has remained on target, revenue collection \nhas been undermined by low economic growth and weakening \ntax compliance, causing repeated misses of deficit targets. \nShould revenue continue to grow as it has in the first four months \nof the fiscal year, it would be about 4% (more than R40 billion) \nlower than Budget 2017 estimates. The fiscal deficit would \ntherefore likely widen by over 1% of GDP (to around 4.5%, from \na Budget 2017 goal of 3.5% of GDP in 2017/18). This presents \na range of unappealing choices. Larger spending cuts may \nfurther weaken growth, yet the scope for increased taxation \nis limited. Furthermore, additional borrowing would take debt \nratios closer to unsustainable levels and divert even more \nexpenditure into interest payments. The 2017 Medium Term \nBudget Policy Statement (MTBPS), which will be presented \nby the finance minister on 25 October 2017, will provide more \nclarity on the fiscal path in these difficult conditions.\nR billions\nGovernment revenue and expenditure (2017/18)\nSources: National Treasury and SARB\nExpenditure\nGross revenue\n1 100\n1 150\n1 200\n1 250\n1 300\n1 350\n1 400\n1 450\n \nBudget review estimate\n \nEstimate using year-to-date\n \ngrowth rates\n-3.5%\n0.3%\nMonetary Policy Review October 2017\n22\nThe external sector and the \ncurrent account\nAlthough net exports are detracting slightly from growth this \nyear – owing to a high 2016 base – their contribution to growth \nwill be positive again in 2018 and 2019. This is due to exports \ngrowing faster than imports, reflecting a gap between low local \ngrowth and stronger world growth which constrains imports \nand favours exports.\nThe current account deficit has narrowed sharply over the past \nfew years, from almost 6% of GDP in 2013 to 3.3% in 2016 (and \n2.4% in the most recent quarter). Over the forecast period it is \nexpected to widen somewhat, reaching nearly 4% of GDP by \n2019. These trends are mostly explained by the trade balance \nof the current account. In recent years, South Africa’s terms \nof trade have benefitted from lower oil prices and a rebound \nin export commodity prices. Furthermore, weak domestic \ninvestment has curtailed demand for capital imports. Both \nthese factors reverse course in the forecast: South Africa’s \nterms of trade are expected to decline moderately, and positive \ninvestment growth should increase imports of capital goods. \nThe projected deterioration of the current account deficit is \nnonetheless less marked than in previous forecasts, which \nonce envisioned the deficit reaching 5% again. The change \nis chiefly because of a lower oil price trajectory and slower \ninvestment growth over the next two years.\nAlthough the trade balance explains much of the change in the \ndeficit, the scale of the deficit – at between 3% and 4% of GDP \n– continues to be explained by the large services, incomes and \ntransfers (SIT) deficit. Although this deficit has been fairly stable \nfor an extended period, its composition has changed over \ntime. In particular, dividend payments abroad have contracted, \nwhich is probably explained by weaker profitability of locally \nlisted firms.11 The narrower dividends deficit, however, has \nbeen offset by higher interest payments to foreigners, mainly \nbecause non-residents have purchased large quantities of \ngovernment debt. Net foreign interest payments are now at their \nhighest levels since 1999 – a year of emerging market crises \nin which the repo rate averaged almost 15%. As government \ncontinues to run deficits, and capital continues to flow in from \nabroad to finance them, interest payments to foreigners are \nexpected to rise further – contributing to a widening current \naccount deficit.\nLower potential, larger output gap\nSince the release of the previous MPR, potential growth – the \nrate of growth possible without accelerating inflation – has \nbeen revised down by an average of 0.3 percentage points for \n2017, 2018 and 2019, to just above 1%. This leaves potential \n11\t South African Reserve Bank, Quarterly Bulletin, ‘Box 3: Dividend \npayments to non-residents and real economic growth’, March 2017, \np 42, available at https://www.resbank.co.za/Lists/News %20and%20\nPublications/Attachments/7745/20160331Dividend%20payments%20\nto%20non-residents%20and%20real% 20economic %20growth.pdf.\nIndices: 2010 = 100\n2010\n2012\n2014\n2016\n2018\nCommodity prices\nSources: SARB and World Bank\nIron ore\n \n20\n40\n60\n80\n100\n120\n140\n160\nGold\nForecast\nCoal\nPlatinum\nPercentage of GDP\n-9\n-6\n-3\n0\n3\nCurrent account\n \nIncome account\n \nTrade in goods and services\n \n \nTransfers\n \nCurrent account balance\nForecast\n2012\n2010\n2014\n2016\n2018\nSource: SARB\nPercentage of GDP\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\nInterest payments\n \nGovernment\n \nOther\n \nTotal\n2011\n2010\n2012\n2013\n2014\n2015\n2016\nSource: SARB\n23\nMonetary Policy Review October 2017\ngrowth below population growth across the forecast horizon. \nDisaggregating the potential growth estimate shows the decline \nis due to lower capital formation and weaker productivity \ngrowth – two related factors, because new investments would \nhelp narrow the gap with the global productivity frontier. By \ncontrast, labour force growth has remained relatively constant.\nDespite lower potential growth, the output gap has widened \n– meaning actual output has been below the economy’s \ncapacity, even though that capacity is lower. Most of the \noutput gap comes from 2016 and 2017, with the gap reaching \na trough of nearly -2% of potential GDP this year. It is projected \nto narrow gradually over 2018 and 2019, although it remains \nnegative at the end of the forecast period. As usual, output \ngap quantifications must be treated with caution: this is an \nunobserved variable and historical estimates of its value have \nbeen revised substantially.\nBox 6\t The output gap, potential growth and supply \nshocks\nOutput gaps are used to gauge whether or not an economy is \noverheating. A positive gap means demand is too strong, causing \ninflation to accelerate. By contrast, a negative gap means demand is \ntoo weak, implying a role for stimulus. This makes the output gap a \nuseful input into forecasting models. Unfortunately, output gap \nestimates are notoriously unreliable. This box describes a method for \nimproving these estimates through a more sensitive treatment of \nsupply-side shocks.1 \nAn output gap is calculated as the difference between an economy’s \npotential level of output and actual production. The South African \nReserve Bank’s published output gap estimates are derived from a \nmodel that does not account for short-term fluctuations in growth \ncaused by supply shocks.2 This yields a very smooth, slow-moving \nmeasure of potential. As a side effect, this method misdiagnoses \nshort-term supply shocks as demand phenomena. \n1\t\nSee B Botha, F Ruch and R Steinbach, ‘Updating the SARB’s \npotential growth model’, SARB Working Paper Series, forthcoming.\n2\t\nSee V Anvari, N Ehlers and R Steinbach, ‘A semi-structural approach \nto estimate South Africa’s potential output’, South African Reserve \nBank Working Paper Series No. WP/14/08, November 2014.\nPer cent\nPercentage points\n-1\n0\n1\n2\n3\n4\nPotential growth and productivity\n \nCapital\n \nTotal factor productivity\n \nLabour\n \nTotal (right-hand scale)\n2003\n2000\n2006\n2012\n2009\n2015\n2018\n-1\n0\n1\n2\n3\n4\nSources: SARB and Stats SA\nForecast\nPercentage of potential GDP\n2008\n2010\n2012\n2014\n2016\n2018\nOutput gap with confidence bands\n \n75%\n \n25%\n \n50%\n \nOutput gap\n-6\n-4\n-2\n0\n2\n4\n6\nSource: SARB\nTerms of\ntrade\ndecline\nElectricity\ncrisis\nDrought\nPer cent\n2008\n2006\n2004\n2002\n2000\n2010 2012 2014 2016\nPotential growth\nSource: SARB\nAugmented potential\ngrowth (new)\nSmooth\npotential\ngrowth (old)\n0\n1\n2\n3\n4\n5\nMonetary Policy Review October 2017\n24\nThe recent drought is a good example. A drought tends to depress \nproduction temporarily. The necessary labour and capital for \nproductive activity is on hand, but without rainfall, these resources \nare unproductive – and there is nothing extra demand can do to \nmake them productive until water becomes available. However, if the \npotential growth measure treats the problem as a demand shortfall it \nwill encourage two further mistakes. First, it will generate a more \nnegative output gap that will incorrectly predict lower inflation. \nSupply shocks have some disinflationary effects by squeezing \nincomes, but these tend to be dominated by scarcity effects that \nraise prices. Second, a more negative output gap will in turn justify a \nmore expansionary policy stance, everything else being equal. Yet \nmacroeconomic stimulus can only compensate for demand \nshortages, not supply-side constraints. Lower interest rates cannot \nbring rain. \nThese problems can be overcome by augmenting the model so that \ntransitory supply shocks affect potential growth for the duration of \nthe shock.3 The results show the same declining potential growth \ntrend following the financial crisis, but there are now shorter-run \nvariations that align with supply-side disruptions. The new method \ncaptures, for example, the effects of platinum sector strikes, \nelectricity shortages and the 2015–16 drought. It also narrows \noutput gaps, both now and historically, including when the economy \nwas overheating: a more volatile potential growth measure yields a \nless volatile output gap. The result is a more accurate input into \npolicy debates.\n3\t\nFor earlier examples of such adjustments, see for instance \nP K Clark, ‘The cyclical component of US economic activity’, \nQuarterly Journal of Economics 102 (4), 1987, pp 797–814; and \nA Alichi, ‘A new methodology for estimating the output gap in the \nUnited States’, IMF Working Paper Series No. WP/15/144, July 2015.\nConclusion\nUltimately, the South African economy has a small demand-\nside problem and a large supply-side problem. With near-zero \ngrowth and a negative output gap, there is some limited scope \nfor lower interest rates to have positive countercyclical effects \nin the short term. In an environment of low confidence and \nweak investment, however, there is relatively little that monetary \npolicy can do to restore growth to historical trends (around \n3%) – let alone the National Development Plan goal of 5% or \nmore. Rather, monetary policy’s chief contribution to growth \nis long term and centres on containing borrowing costs by \nmaintaining credibility. This means inflation expectations and \nrisk assessments stay low, permitting long-term borrowing at \nviable rates. Although this is clearly not a sufficient condition \nfor sustainable growth, it is necessary.\nPercentage of potential GDP\n2008\n2006\n2004\n2002\n2000\n2010 2012 2014 2016\nOutput gap\nSource: SARB\nOld method (latest data)\nNew\nmethod\n-3\n-2\n-1\n0\n1\n2\n3\n4\n5\n25\nMonetary Policy Review October 2017\nInflation developments: \nbelow 6% but above 4.5%\nHeadline inflation moved back within the 3–6% target range in \nApril 2017, and it is expected to stay within the target for the \nrest of the forecast period. Inflation is currently close to the \ntarget midpoint and is projected to remain there into early 2018, \nmainly due to positive shocks affecting import prices, electricity \nand food. As the effects of these shocks fade, inflation is likely \nto accelerate somewhat, reaching 5.3% in 2019.\nLower core inflation\nIn recent years, there have been substantial gaps between \nheadline and core inflation. In 2015 the difference was mostly \ndue to a favourable oil price shock. In 2016 it was a drought-\ninduced food price shock. This year, however, the gap between \nthe two has narrowed sharply. Although the SARB targets \nheadline inflation, in these circumstances the most interesting \ninformation affects core inflation. This section therefore starts \nwith a discussion of core inflation and concludes with the extra \ncategories that are added in to headline inflation (food, petrol \nand electricity).\nCore inflation has been trending down since the beginning \nof the year, falling from a peak of 5.9% in December 2016 to \n4.6% in August 2017. Core is expected to reach its lowest point \nin the final quarter of 2017, at 4.5%, before edging up again in \nearly 2018 and ultimately stabilising at around 5% in 2019.\nThe decline in core inflation is overwhelmingly due to goods, \nnot services, even though services make up two-thirds of the \ncore category. Services inflation has slowed marginally but \nremains well within the upper half of the target range at 5.6% in \nAugust 2017 (against 5.7% in January and a five-year average \nof 5.9%). By contrast, core goods inflation has dropped from \n5.3% in January 2017 to 2.6% in August.\nThe deceleration in core goods is closely linked to the \nexchange rate, with major contributions from the rand- \nsensitive categories of household contents (such as fridges \nor televisions) and vehicles. Household contents inflation is \nexpected to average -0.4% in 2017, down from 1.8% in 2016. \nSimilarly, vehicles inflation is projected to average 4.7% in \n2017, from 7.6% in 2016. It is not surprising that the core goods \ncategory has responded to rand appreciation: these prices \nhave long tracked the exchange rate. Yet the SARB forecasts \nfrom earlier in the year did not fully anticipate the extent of the \ninflation slowdown in these categories. One reason for this is \nthat the exchange rate assumption was too weak (as discussed \nbelow). There were also some changes in pricing behaviour. \nAn analysis of the core goods micro-price data from Stats SA \n– the individual price details that go into the consumer price \nindex (CPI) – show slowdowns in both the frequency and scale \nof price changes. The most important effect was the scale of \nchanges, with smaller price increases and larger price cuts than \npreviously. This was complemented by a reduced frequency of \nPercentage points\nPer cent\n-4\n-2\n0\n2\n4\n6\n8\n10\nDecomposing core goods inflation into price\nincreases and decreases\n \nCore goods inflation\n \nPrice decreases (right-hand scale)\n \nPrice increases (right-hand scale)\n2014\n2015\n2016\n2017\n2010\n2011\n2012\n2013\n-4\n-2\n0\n2\n4\n6\n8\n10\nSources: SARB and Stats SA\nPer cent\n2010\n2011\n2012\n2013\n2014\n2016\n2015\n2017\nProportion of core goods prices changing\n \nProportion of prices\n \nchanging\n \n12-month moving\n \naverage\nSources: SARB and Stats SA\n10\n15\n20\n25\n30\n35\nPercentage change over four quarters\n2009\n2011\n2013\n2015\n2017\nCore inflation and its components\nSources: SARB and Stats SA\n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\nForecast\n \nCore goods (March 2017)\n \nServices (March 2017)\n \nCore inflation (March 2017)\n \nCore goods (September 2017)\n \nServices (September 2017)\n \nCore inflation (September 2017)\n \n3–6% inflation target range\nMonetary Policy Review October 2017\n26\nchanges, meaning more prices were left unchanged. Simply \nput, firms eased up on the price accelerator as the exchange \nrate appreciated, causing core goods inflation to slow.\nFor services prices, the forecast surprise is that inflation for this \ncategory has not been higher. Forecasts from earlier in 2017 \nprojected an acceleration in services price inflation, which was \nbased largely on higher housing costs (combining rentals and \nowners’ equivalent rent) as well as insurance – categories with \nlarge weights in the CPI. Housing costs have instead edged down \nslightly. This reflects divergence between the provinces. While \nhousing inflation has accelerated in Gauteng and the Western \nCape, which account for roughly two-thirds of expenditure, this \nhas been offset by a sharp slowdown in the other provinces, \nleaving the aggregate quite stable. As for insurance, warnings \nfrom medical insurance companies of larger cost increases \nhave not materialised this year, leaving insurance inflation very \nclose to its longer-run average (around 8%).\nA stable exchange rate trend\nThe exchange rate has followed a relatively flat trend thus far in \n2017. There have been episodes of volatility following shocks, \nsuch as the credit ratings downgrades earlier in the year. Yet \nthese effects have been cushioned by other factors, including \na significantly smaller current account deficit and a weaker US \ndollar. Accordingly, the overall trade-weighted exchange rate is \ndown just 2% for the year to date, and up almost 9% from the \nsame period a year ago. Given South Africa’s positive inflation \ndifferential with most of its trading partners, the real effective \nexchange rate has therefore appreciated by about 4% in 2017 \nand 13% year on year. Relative to estimates of the equilibrium \nreal exchange rate, it has been close to fair value through most \nof the year, following a period of extreme undervaluation during \nlate 2015 and much of 2016.\nFor much of the past two years, the SARB’s assumptions for the \nexchange rate have been too depreciated. This chiefly reflects \na methodological problem. The exchange rate assumption \nusually starts with the average value prevailing in the quarter \nbefore the MPC meeting. For the rest of the forecast, the \nexchange rate adjusts following inflation differentials. South \nAfrica has higher inflation than most of its peers, so in the \nforecast the nominal exchange rate is always depreciating. \nThis becomes a problem when the rand stabilises and the \nreal exchange rate begins to appreciate, as it has since early \n2016. The problem is exacerbated by volatility, meaning the \nforecast assumption can be quite different to the market value \nat the time of the meeting. For this reason, MPC statements \nhave repeatedly warned that the exchange rate implicit in the \nforecast is out of line with the current exchange rate. This has \nalso required a series of upward adjustments to the assumed \nreal exchange rate path. Although exchange rate forecasts are \ninvariably inaccurate, the SARB’s forecast are likely to become \nless so with the adoption of a different methodology as part of \nthe Quarterly Projection Model (see Box 1).\nPercentage change over four quarters\n2009\n2011\n2013\n2015\n2017\nOwners’ equivalent rent inflation \nSources: SARB and Stats SA\n1\n2\n3\n4\n5\n6\n7\n8\n \nGauteng and Western Cape\n \nOther provinces\n \nAll provinces\nPercentage change over four quarters\n2009\n2011\n2013\n2015\n2017\nActual rental inflation\n \nGauteng and Western Cape \n \nOther provinces\n \nAll provinces\nSources: SARB and Stats SA\n2\n3\n4\n5\n6\n7\n8\nIndices: 2010 = 100\n2016\n2015\n2017\n2018\n2019\nEvolution of real effective exchange rate\nassumptions\nSource: SARB\n70\n75\n80\n85\n90\n \nJan 2016\n \nJan 2017\n \nMay 2017\n \nSep 2017\n \nStronger rand = higher\n \nSep 2016\n \nMar 2017\n \nJul 2017\n \nActual\n \n27\nMonetary Policy Review October 2017\nOffsetting influences on \nunit labour costs\nMuch as exchange rate effects explain recent developments in \ncore goods prices, so labour costs mostly explain the relative \nstability of services inflation. Unlike goods, services are generally \nnot traded across borders. This means domestic labour costs \nare more important for these prices than the exchange rate. To \ngauge labour cost pressures, wage gains alone are inadequate \nbecause they do not capture improvements in productivity. \n(Higher pay for higher output does not raise costs.) For this \nreason, the MPC pays close attention to unit labour costs \n(ULC), meaning the overall labour cost per unit of economic \noutput in the economy. These costs grew 7.8% last year, well \nabove the upper limit of the inflation target range.12 However, \nULC growth has moderated this year, to 6.1%, and is expected \nto fall below 6% for 2018 and 2019 (at 5.6% and 5.8% for these \nyears respectively).\n12\t These figures reflect slightly different data to those published in \nthe Quarterly Bulletin. The salary measure used for forecasting \npurposes includes agricultural workers. Normally the two measures \ngive similar results, although they diverged during 2015 and 2016.\nTargeted inflation (September 2017 forecasts)\nPercentage change over 12 months, March 2017 forecasts in italics \nWeight\nActual\n Forecast\nActual\nForecast\n2009–16\n2016\n2017\n2018\n2017Q1\n2017Q2\n2017Q3\n2017Q4\n2018Q1\n2018Q2\n2018Q3\n2018Q4\nTargeted inflation.............................................. 100.00\n5.6\n6.3\n5.3\n5.0\n6.4\n5.3\n4.8\n4.8\n4.6\n4.8\n5.3\n5.2\nCore inflation*...................................................\n74.43\n5.2\n5.6\n4.8\n4.9\n5.2\n4.8\n4.6\n4.5\n4.7\n4.9\n4.9\n5.0\n5.4\n5.2\n5.4\n5.5\n5.4\n5.3\n5.1\n5.1\n5.2\n5.3\nRentals**..........................................................\n16.84\n4.7\n5.1\n4.9\n4.8\n5.0\n4.8\n5.0\n5.0\n4.8\n4.9\n4.8\n4.8\n5.2\n4.9\n5.1\n5.1\n5.3\n5.3\n5.0\n4.9\n4.9\n4.8\nInsurance.........................................................\n10.06\n7.7\n7.6\n8.0\n8.0\n8.0\n8.0\n8.0\n7.9\n8.0\n8.1\n8.1\n8.1\n8.4\n8.4\n8.1\n8.4\n8.5\n8.5\n8.7\n8.3\n8.3\n8.3\nEducation.........................................................\n2.53\n8.7\n5.3\n6.6\n7.8\n5.4\n7.0\n7.0\n7.0\n7.4\n8.0\n8.0\n8.0\n7.2\n8.0\n5.7\n7.7\n7.7\n7.7\n7.8\n8.0\n8.0\n8.0\nVehicles............................................................\n6.12\n2.7\n7.6\n4.7\n3.7\n7.5\n5.2\n3.3\n2.7\n3.1\n3.8\n3.8\n4.1\n5.2\n3.8\n7.7\n5.8\n3.8\n3.4\n3.5\n3.7\n3.9\n4.1\nFuel..................................................................\n4.58\n5.0\n1.6\n6.9\n6.4\n10.3\n5.2\n4.8\n7.6\n3.9\n6.3\n9.4\n5.9\nPreviously petrol...............................................\n7.8\n6.9\n10.4\n4.6\n8.3\n8.0\n4.6\n8.0\n7.6\n7.6\nElectricity.........................................................\n3.75\n15.0\n9.2\n4.7\n5.1\n7.5\n7.5\n2.1\n2.1\n2.1\n2.1\n8.0\n8.0\n7.7\n8.0\n7.4\n7.4\n8.0\n8.0\n8.0\n8.0\n8.0\n8.0\n* CPI excluding food, non-alcoholic beverages, fuel and energy\n** Combines actual rentals and owners’ equivalent rent, from 2009\nSources: SARB and Stats SA\nPer cent\n2016\n2017\n2018\n2019\nEvolution of unit labour cost forecasts\nSource: SARB\n0\n1\n2\n3\n4\n5\n6\n7\n8\n \nMar 2017\n \nJul 2017\n \nMay 2017\n \nSep 2017\nMonetary Policy Review October 2017\n28\nThe forecast trajectory for ULCs is shaped by opposing \ndevelopments. In the near term, ULCs are decelerating \nbecause wage growth has come down from a spike last \nyear – even though productivity growth is near zero in the \ncontext of a stagnant economy. Further out in the forecast, \nproductivity picks up slightly as growth starts moving again \n– yet wages recover from their current trough, offsetting \nsome of the disinflationary effects of productivity gains. \nIt is, of course, possible to imagine different ULC outcomes. \nHistorically, wage settlements have not been very sensitive to \nunemployment rates or productivity changes. However, wage \nmoderation may finally take hold with unemployment close to \n28% and no productivity growth. It is also possible that inflation \nexpectations could moderate, reducing wage demands. \nThe current ULC forecast is nonetheless already low in an \nhistorical perspective.\nInflation expectations\nInflation expectations are crucial drivers of longer-run inflation. \nAlthough popular discussions of inflation are usually about \nsupply shocks (such as petrol prices or food), these cannot \ntell us where inflation will be in the medium term, or why \ncomparable countries can have markedly different inflation \nrates. (For instance, Argentina has inflation of over 20% while \nits neighbour, Chile, has inflation of under 3%.) Rather, these \nphenomena reflect expectations of inflation, which become \nself-fulfilling prophecies when they feed into wage deals and \nprice setting.13 \nDuring the SARB’s 2014–2016 tightening cycle, monetary \npolicymakers paid close attention to inflation expectations to \nhelp ascertain whether temporary shocks to specific prices \n(such as food) would have long-lasting effects on prices \nin general. Were expectations coming unmoored? During \nthe subsequent disinflation phase, the focus has shifted to \nlowering expectations.\nThe first-resort measure of inflation expectations used by the \nMPC is the BER’s survey, which incorporates the views of union \nleaders, business people and financial analysts. According to \nthe two most recent surveys, average expectations have fallen \nfor one, two and five years ahead across all survey groups. \nNonetheless, longer-term expectations remain fairly close to \n6%. As is usual for this survey, most of the volatility comes \nfrom analysts, with the average inflation expectation for this \ncategory now down to 5.0% for 2018 and 5.3% for 2019. \nBy contrast, expectations of trade unionists and business \npeople in the BER survey are higher – at or just above 6% for \nboth 2018 and 2019.\nBreak-even inflation rates provide an alternative, market-based \nmeasure of inflation expectations, based on the gap between \nyields for nominal bonds and inflation-protected securities. \n13\t To reprise the Argentinean example, public school teachers in Buenos \nAires won a 24% pay increase in 2017. See Reuters business news, \n‘Argentina 2017 inflation seen at 21.6 percent, above central bank target’, \n5 July 2017, available at https://www.reuters.com/article/us-argentina-\ninflation/argentina-2017-inflation-seen-at-21-6-percent-above-central-\nbank-target-idUSKBN19P2K9?il=0  (accesed  on 22 August 2017).\nPercentage change over four quarters (both scales)\n-6\n-3\n0\n3\n6\n9\n12\n15\n18\n-6\n-3\n0\n3\n6\n9\n12\n15\n18\nUnit labour cost and its components\n \nAverage salaries (left-hand scale) \n \nProductivity (left-hand scale) \n \nAndrew Levy average salaries\n \nReal wages\n \nUnit labour cost\nForecast\n2004 2006\n2008\n2012\n2014\n2016\n2018\n2010\nSources: Andrew Levy Employment Publications, SARB and Stats SA \nPer cent\nSurvey-based inflation expectations*\n \nTwo years ahead\n \nFive years ahead\n \nInflation target range\n2000\n2003\n2006\n2015 2017\n2009\n2012\n3\n4\n5\n6\n7\n8\n9\n* Total, combining expectations of labour, business and analysts\nSource: BER\nPer cent\n2009\n2011\n2013\n2015\n2017\nInflation expectations*\n \nTwo years ahead\n \nCurrent year\n* Total, combining expectations of labour, business and analysts\nSource: BER\n5.0\n5.5\n6.0\n6.5\n7.0\n7.5\n8.0\n8.5\n9.0\n29\nMonetary Policy Review October 2017\nThey show that expectations have adjusted lower at both \nthe five- and ten-year horizons: ten-year-ahead expectations \nhave moved from almost 8% at the start of 2016 towards \n6%, while five-year-ahead expectations have fallen below \n5.5%, from about 7.5% in 2016. As usual, break-even inflation \nrates provide some interpretative challenges. They are not \nstrictly comparable to expectations surveys, because they \nincorporate both a projection for inflation and a risk premium \n(if investors believe inflation risks are skewed one way or the \nother). Furthermore, they are sensitive to market idiosyncrasies \naffecting the underlying instruments from which they are \ncalculated (mainly because inflation-protected securities \nare less frequently traded than ordinary government bonds). \nDespite these challenges, these measures do at least show a \nclear disinflation trend, consistent with other inflation forecasts \nand with inflation outcomes. They do not, however, show \ninflation expectations moving much below 6%.\nInflation expectations have not always been at 6%. There \nwas a period, between 2005 and 2006, when expectations \nwere concentrated close to the midpoint of the target range.14 \nHowever, expectations drifted upwards as the global boom \nintensified and commodity prices skyrocketed, peaking well \noutside the target range. The global financial crisis brought \nexpectations down again, but only as far as the top of the \ntarget range, and they have been in that vicinity ever since. This \nis undesirable. Lower expectations would help reduce inflation \nand interest rates. Furthermore, having expectations close to \n6% leaves little room for absorbing shocks. Accordingly, the \nMPC’s stated preference is for expectations to be anchored \ncloser to the midpoint of the 3–6% target range.\nThe available data support two conclusions relevant to the \nproblem of lowering expectations. First, inflation expectations \nare largely backward-looking: many respondents will need \nto see lower inflation before changing their views. As such, \nwe should expect lower inflation to moderate expectations. \nSecond, longer-term expectations have been nearly immune to \nshort-lived disinflations. For instance, inflation was close to the \nmidpoint of the target range in 2015 because of the collapse \nin world oil prices. Inflation was similarly subdued through \nmuch of 2010/11, with oil prices again low and the exchange \nrate near R7 to the US dollar. Although surveyed expectations \nfor the current year fell during these episodes, longer-term \nexpectations remained stable near 6%. This suggests it will \ntake both careful communication, and a longer period of lower \ninflation, to moderate longer-term inflation expectations.\nSlowing food price inflation\nLast year’s drought pushed food and non-alcoholic beverages \n(NAB) inflation sharply higher, to 10.6% in 2016 from 5.1% the \nyear before. Food and NAB inflation is forecast to average 7.3% \nin 2017 and 5.2% in 2018 as the drought effects dissipate, \n14\t See S Hassan and S Redford, ‘Dispersion of inflation expectations’, \nSouth African Reserve Bank Occasional Bulletin of Economic Notes, \nJune 2017, available at https://www.resbank.co.za/Lists/News%20\nand%20Publications/Attachments/7851/OBEN%201702.pdf.\nPer cent\n2014\n2015\n2016\n2017\nBreak-even inflation rates\n \nFive year\n \nTen year\nSource: Bloomberg\n4.5\n5.0\n5.5\n6.0\n6.5\n7.0\n7.5\n8.0\nPer cent\nOils and\nfats\nVegetables\nMeat\nFruit\nBread and\ncereals\n-5\n0\n5\n10\n15\n20\nMain food drivers\n \n2009–2016 average\n \n2016 \n \n2017\n \n2018\nSources: SARB and Stats SA\nMonetary Policy Review October 2017\n30\ncontributing 1.3 and 0.9 percentage points respectively to \nheadline inflation compared with 1.6% in 2016. By 2019, \nconditions are expected to normalise, leaving food and NAB \ninflation at 5.6%, in line with long-term averages.\nThe food price forecast has fluctuated over the course of the \nyear. Higher poultry prices prompted an upward revision of \nthe food price trajectory between the March and May MPC \nmeetings – but food prices were marked back down again for \nthe July meeting due to downward movements in other food \ncategories (mainly dairy, vegetables, and bread and cereals). \nIn September the forecast was adjusted slightly higher again, \nonce again due to higher meat inflation. Despite this volatility, \nthe underlying food price dynamic remains about the same. \nThe categories where harvests were affected by drought \nin 2016 are now disinflating, led by maize with a record \n16.7 million tonne commercial harvest expected in 2016/17 \n(according to the Crop Estimates Committee). Yet meat prices \nare partly offsetting this effect.\nMeat prices rose more rapidly than anticipated in the second \nhalf of 2016 and the first half of 2017, owing mainly to surging \npoultry and beef prices. Meat price inflation is now forecast to \naverage 12.9% this year, well above the longer-term average. \nPoultry prices have been affected by avian influenza (bird flu) \noutbreaks, both abroad and locally. Meanwhile, domestic \nbrining regulations have also lifted chicken prices. The other \nimportant driver of higher meat prices is herd-rebuilding \neffects, reflected in lower cattle slaughter figures. As these \nshocks abate, poultry inflation is forecast to ease from 14.9% in \n2017 to 7.6% in 2018, while beef prices moderate from 13.8% \nto 7.7%.\nConsumer food price inflation (September 2017 forecasts)\nPercentage change over 12 months, March 2017 forecasts in italics \nActual\nForecast\nActual\nSARB forecast\nWeight\n2009–16\n2016\n2017\n2018\n2017Q1\n2017Q2\n2017Q3\n2017Q4\n2018Q1\n2018Q2\n2018Q3\n2018Q4\nFood and non-alcoholic beverages.................\n17.24\n6.8\n10.6\n7.3\n5.2\n10.0\n6.9\n6.5\n6.0\n4.8\n5.0\n5.3\n5.5\n7.4\n5.2\n9.7\n7.0\n6.9\n6.0\n5.1\n5.2\n5.3\n5.3\n Bread and cereals......................................\n3.21\n6.8\n14.6\n3.9\n3.5\n12.7\n4.0\n-0.4\n-0.7\n0.2\n3.7\n5.1\n5.1\n5.5\n4.8\n12.6\n5.8\n2.6\n1.1\n1.9\n4.7\n6.2\n6.3\n Meat...........................................................\n5.46\n6.0\n5.8\n12.9\n7.7\n9.6\n12.0\n15.2\n14.8\n10.1\n7.4\n7.0\n6.4\n10.1\n4.7\n9.2\n9.8\n11.4\n10.0\n5.0\n4.2\n4.6\n5.1\n Beef.......................................................\n1.44\n6.6\n8.3\n13.8\n7.7\n8.1\n12.7\n16.9\n17.5\n12.8\n6.4\n6.0\n5.6\n \n9.4\n4.9\n7.6\n7.7\n11.1\n11.3\n6.4\n4.6\n4.1\n4.6\n Poultry....................................................\n2.12\n4.9\n3.1\n14.9\n7.6\n12.3\n14.0\n17.8\n15.4\n8.1\n7.7\n7.4\n7.0\n12.7\n4.5\n12.1\n12.7\n14.5\n11.4\n4.0\n4.0\n4.7\n5.4\n Vegetables..................................................\n1.30\n7.8\n16.5\n-0.7\n4.3\n1.3\n-3.1\n-1.2\n0.0\n1.4\n3.5\n7.2\n5.0\n2.3\n6.9\n1.1\n-1.1\n4.1\n5.2\n6.8\n7.0\n7.9\n6.0\nSources: SARB and Stats SA\nPercentage points\nPercentage change over four quarters\n-2\n0\n2\n4\n6\n8\n10\n12\nFood inflation contributions\n \nBread and cereals\n \nMilk and cheese\n \nVegetables\n \nFood (right-hand scale)\nSources: SARB and Stats SA\n \nMeat\n \nNAB\n \nOther foods\nForecast\n2015\n2016\n2017\n2018\n-2\n0\n2\n4\n6\n8\n10\n12\n31\nMonetary Policy Review October 2017\nFuel price developments\nThe Brent crude oil benchmark has been stuck below US$60 \nper barrel for most of the past three years, and has been \ncloser to US$50 for much of 2017. Production cuts by the \nOrganization of the Petroleum Exporting Countries (OPEC) and \nRussia helped lift prices back towards US$60 in the early parts \nof this year. Yet these cuts were ultimately too small to maintain \nprices at those levels, in part because they did not constrain \nOPEC members that had previously suffered production \ndisruptions (Nigeria and Libya), and in part because OPEC’s \nmonopoly power has been weakened by new North American \nproducers. The long-term outlook for oil demand is also \nunfavourable, given improvements in electric car technology \nand regulatory shifts in favour of cleaner technologies. (Both \nFrance and the UK, for example, have banned the sale of new \npetrol and diesel cars from 2040 onwards.) For these reasons, \nit is very unlikely that oil prices will rise to the triple-digit levels \nlast seen in 2014. They are nonetheless likely to remain volatile \nwithin a range of roughly US$50–US$60. Indeed, at the time of \nthe September MPC meeting they were back close to US$60, \napparently due to evidence of stronger global demand as well \nas potential supply disruptions related to an independence \nreferendum in Iraqi Kurdistan. \nThe oil price assumptions used in the forecast tend to follow \npricing in futures markets as well as private sector forecasts. \nThe latest oil price assumption is US$52 per barrel for 2017, \nUS$55 for 2018 and US$56 for 2019. This is somewhat below \nthe March 2017 assumptions, which were US$57 per barrel for \n2017, US$60 for 2018 and US$62 for 2019.\nLower oil prices have, in turn, fed into domestic fuel price \nforecasts. Rand-denominated Brent crude oil prices are \nnow expected to increase by 7.3% in 2017 and 2018, \nbefore moderating to 5.2% in 2019 – well below the March \n2017 forecasts of 20.7%, 9.2% and 7.0% for these years \nrespectively. Accordingly, fuel price inflation is now forecast \nto average 6.9% in 2017, 6.4% in 2018 and 5.6% in 2019. As \nbefore, the full benefits of lower international oil prices are not \nreaching consumers because of domestic taxes and margins, \nwhich have risen by around 10% annually since 2003 and are \nexpected to maintain roughly these growth rates.\nElectricity inflation: less now and \nmore later\nElectricity inflation has fallen to 2.1% – the lowest rate of \nelectricity prices inflation since 2006. However, the slowdown \nwill almost certainly be short-lived. Electricity prices have \ndecelerated because of a decision by the National Energy \nRegulator of South Africa (NERSA) affecting the Regulatory \nClearing Account (an account used to align electricity prices \nwith production costs). NERSA’s decision was set aside by the \nHigh Court, but it has since been upheld by the Appeals Court, \nclearing the way for a much larger electricity price increase in \nRand per litre\n2016\n2017\n2018\n2019\nFuel price and its components*\n* Petrol price prior to January 2017, combined petrol and diesel price\nthereafter\n** Movements of the Brent crude oil price (in rand) in August 2017 contributed\nto the fuel price rise in September 2017\nSources: Department of Energy and SARB\n0\n2\n4\n6\n8\n10\n12\n14\n16\nFuel\nDomestic taxes and margins\nForecast\nBrent crude oil (lagged)**\nRefinery margin and other costs\nMonetary Policy Review October 2017\n32\n2018/19. The current SARB assumption is for an 8% increase, \nbut Eskom has requested a double-digit adjustment, and there \nare risks the 8% number may prove to be too low.\nFor this reason, the SARB has also modelled a scenario in \nwhich electricity prices rise 20% for one year, starting in July \n2018. The result is an extra 0.2 percentage points on inflation \nfor 2018 and 0.3 percentage points for 2019, counting both \nthe direct and indirect effects of costlier electricity. In terms of \nthe Taylor rule in the Quarterly Projection Model (described in \nBox 3), this would prompt an interest rate response, reversing \nthe July MPC rate cut.\nConclusion\nThe outlook for inflation has improved steadily over the course \nof 2017. Headline inflation has fallen back below 6% and is \ncurrently close to the midpoint of the 3–6% target range. The \ndrop in inflation reflects declines across the major inflation \ncategories: food, petrol, electricity and core. Yet the drivers of \nlower inflation – especially the exchange rate and the end of \nthe drought – are likely to be temporary. Furthermore, services \ninflation has been quite stable and inflation expectations \nremain close to the top of the target range, especially for the \nlonger-term outlook. Accordingly, inflation is projected to pick \nup again next year, ultimately stabilising at around 5.3% for the \nremainder of the forecast period.\nBox 7\t Comparing the SARB’s forecasts with those of other central banks\nThe South African Reserve Bank (SARB) regularly evaluates the accuracy of its forecasts and reports the results in the Monetary Policy Review \n(MPR). For instance, the April 2017 MPR compared the SARB’s inflation forecasts with those of private sector analysts. The October 2016 MPR \nassessed the reliability of the core inflation forecasts. This box takes a different approach. How good are the SARB’s forecasts of South African \ninflation compared with other central banks’ forecasts of their own national inflation rates?\nWe test the forecasts for both overall accuracy and bias. The data are inflation forecasts1 for 2011 to 2016, from 12 emerging market inflation-\ntargeting central banks.2 We use January forecasts for the current-year, one-year-ahead and two year-ahead forecasts.3 \nTo measure accuracy, we use root mean square errors (RMSE), with a low (high) score indicating a small (large) average error over the sample \nperiod. South Africa ranks second for the current-year forecast and first for the other forecast horizons. Although this result is encouraging, \nSouth African inflation has also been less volatile than that of most other countries, with a standard deviation under 1 percentage point versus, \nfor example, 1.5 percentage points in Brazil and more than 3 percentage points in Russia. It is, of course, easier to forecast a more stable \nvariable.\nTo evaluate the bias of forecasts, we use two measures: an average forecast error and a tracking signal. The first measure is the standard test of \nbias. However, it can be misleading when used to compare forecast performance across countries with very different inflation rates. It also allows \na few large errors to cancel out many smaller ones. The tracking signal remedies these shortcomings by counting the direction of misses. For \ninstance, if a central bank forecast is too high four times, and too low twice, it will get a score of two. Zero – the best score – indicates either that \nthe forecasts were perfect or that misses were evenly scattered above and below the actual outcomes.\nIn terms of average errors, the SARB’s scores are the best over all three time horizons. The tracking signal results are not quite as good: the \nSARB ranks near the middle of our sample. However, the bias changes over the different forecast horizons, which suggests the forecasts do not \nsystematically lean one way or the other. Furthermore, in comparative perspective, the scale of the SARB’s biases is small for both measures. \nOur sample indicates other emerging markets where biases have been much more marked, which is consistent with large inflation overshoots \nin these specific cases.\n1\t\nInflation forecasts are for calendar years, except for Russia and Turkey. Both central banks set their inflation targets as a year-end target \nand forecast year-end inflation.\n2\t\nMexico, Colombia and Indonesia are obvious omissions; they were excluded because they do not publish model-based inflation forecasts. \nIndia was also excluded as the central bank only adopted inflation targeting in February 2015.\n3\t\nWhere two-year-ahead forecasts were not available in January, we used the earliest available published forecast.\nPercentage change over 12 months\n2003\n2005\n2007\n2009\n2011\n2013\n2015\n2017\nElectricity inflation\nSource: Stats SA\n-5\n0\n5\n10\n15\n20\n25\n30\n35\n33\nMonetary Policy Review October 2017\nCurrent year\nRMSE rankings\nForecast accuracy and bias measures\nRussia\nTurkey\nBrazil\nPeru\nSouth Korea\nMedian\nPoland\nChile\nThailand\nHungary\nSouth Africa\nCzech Republic\n0\n1\n2\n3\nOne year ahead\nRussia\nTurkey\nBrazil\nHungary\nPoland\nMedian\nThailand\nSouth Korea\nPeru\nCzech Republic\nChile\nSouth Africa\n0\n1\n2\n3\n4\n5\nTwo years ahead\nCurrent year\nOne year ahead\nTwo years ahead\nCurrent year\nOne year ahead\n* Two-years-ahead forecasts are not available for the Czech Republic, Peru, South Korea and Thailand\nSources: Bloomberg, SARB and other central banks\nTwo years ahead\n0\n1\n2\n3\n4\n5\n Thailand* \n South Korea* \n Peru* \n Czech Republic* \n Russia \n Turkey \n Hungary \n Median \n Brazil \n Poland \n Chile \n South Africa \nTracking signal \nAverage error\nTurkey\nRussia\nBrazil\nPeru\nSouth Korea\nThailand\nHungary\nPoland\nCzech Republic\nMedian\nChile\nSouth Africa\n-3\n-2\n-1\n0\n1\nRussia\nTurkey\nBrazil\nPeru\nSouth Korea\nThailand\nHungary\nPoland\nCzech Republic\nChile\nMedian\nSouth Africa\n-3\n-2\n-1\n0\n1\n2\n-4\n-3\n-2\n-1\n0\n1\n2\n Thailand* \n South Korea* \n Peru* \n Czech Republic* \n Turkey \n Russia \n Brazil \n Poland \n Hungary \n Median \n Chile \n South Africa \nPeru\nBrazil\nTurkey\nThailand\nSouth Korea\nPoland\nHungary\nChile\nMedian\nSouth Africa\nCzech Republic\nRussia\n-6\n-4\n-2\n0\n2\n4\n6\n8\nTurkey\nPeru\nBrazil\nSouth Korea\nThailand\nMedian\nSouth Africa\nRussia\nPoland\nHungary\nCzech Republic\nChile\n-6\n-4\n-2\n0\n2\n4\n6\n8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n Thailand* \n South Korea* \n Peru* \n Czech Republic* \n Turkey \n Russia \n Brazil \n Median \n Chile \n South Africa \n Poland \n Hungary \nUnder-forecast\nUnder-forecast\nUnder-forecast\nUnder-forecast\nUnder-forecast\nUnder-forecast\nOver-forecast\nOver-forecast\nOver-forecast\nOver-forecast\nOver-forecast\nOver-forecast\nMonetary Policy Review October 2017\n34\nSummary\nThe hiking cycle of 2014–2016 achieved its desired effects, \nhelping guide inflation back within the target range and \nkeeping it there. With hindsight, it is clear the main transmission \nmechanism was the exchange rate, aided by more marginal \ncontributions from the negative output gap and inflation \nexpectations. By raising the repo rate from 5% to 7%, the MPC \nconcluded an extended period of unusually low, often negative, \nreal rates. This reinstated a clear positive gap with interest rates \nin the major advanced economies, reviving capital inflows and \nappreciating the exchange rate.\nOf course, monetary policy was not solely responsible for \nthese developments. The global context was important. \nIn particular, stimulus in China eased fears of a rapid and \npotentially uncontrolled slowdown in that economy, which \ncalmed financial markets while boosting global growth and \ncommodity prices. Furthermore, advanced economy monetary \npolicies proved looser than previously anticipated, chiefly due \nto downside inflation surprises, which supported capital flows \nto emerging markets. Falling oil prices also helped narrow \nSouth Africa’s current account, reducing external borrowing \nrequirements. Combined, these circumstances have helped \nlower inflation to below 5% in the third quarter of 2017 – a faster \nand more complete return to target than initially anticipated.\nSouth Africa’s recent experience of policy tightening and \ndisinflation echoes that of peer emerging markets, including \nmajor players such as Brazil, Russia and India. Furthermore, in \nthe counterfactual cases where real rates did not get to positive \nlevels, exchange rates have weakened further and inflation has \naccelerated. A prominent example is Turkey, where inflation is \nnow over 10%, versus a target of 5%. These emerging market \nexperiences testify to the power of central banks to lower \ninflation if they so choose, and the costs of neglecting this role.\nBy contrast, the growth implications of monetary tightening \nduring this period have almost certainly been small. South \nAfrica’s interest rate adjustment was relatively limited, and the \nrelationship between interest rates and credit extension has \nin any case been unusually weak in the post-crisis period. \nFurthermore, the rand has not appreciated beyond estimates \nof fair value. \nNonetheless, domestic growth has slowed almost to a \nstandstill over the past two years and is unlikely to recover \nsignificantly over the two years of the forecast, making this one \nof the worst growth periods in South Africa’s history. (If the \nforecasts prove correct, the 2010s will be the second-worst \ngrowth decade in South Africa’s post-war economic history.) \nThe outstanding problem at present is depressed confidence. \nAs a result, investment is contracting and potential growth is \ntherefore very low.\nStimulus only works if it elicits a positive response from the rest \nof the economy, creating a virtuous circle of stronger investment \nand stronger demand. With confidence held down by factors \nPercentage points\nPer cent\n2001 2003\n2005 2007 2009\n2011\n2013\n2015\n2017\nReal interest rate differential \nSources: IMF and SARB\n \nSouth Africa\n \nG3\n \nDifferential (right-hand scale)\n-2\n0\n2\n4\n6\n8\n10\n-2\n0\n2\n4\n6\n8\n10\nNEER (percentage change)* \nEmerging market policy rates and exchange rates\n \n* Average 2017 year-to-date change from 2016 average \n** Average 2016 nominal policy rate less CPI 2017 year-to-date\nSources: BIS and Bloomberg \nReal policy rate (per cent)**\nTurkey\nMalaysia\nMexico\nHungary\nCzech Republic\nThailand\nPeru\nPoland\nChile Indonesia\nColombia\nSouth Africa\nIndia\nRussia\nBrazil\nChina\n-6\n-3\n0\n3\n6\n9\n12\n-18\n-12\n-6\n0\n6\n12\n18\nPercentage change\n0\n1\n2\n3\n4\n5\n6\nSouth African real GDP growth rates\n1946–49\n1950–59\n1960–69\n1970–79\n1980–89\n1990–99\n2000–09\n2010–19\nSources: SARB and Stats SA\n35\nMonetary Policy Review October 2017\nother than demand, investment is unlikely to follow. This means \nthe benefits of stimulus would be largely temporary, while the \ncosts would be more permanent.\nNonetheless, growth outcomes have been very low over the \npast two years or so, below even revised estimates of potential \ngrowth. This leaves some scope for countercyclical policy in \nthe short term. Monetary policy’s chief contribution to growth, \nhowever, is keeping inflation low and stable, which facilitates \nlong-term planning and moderates borrowing costs. For this \nreason, near-term demand support must be balanced by \npolicies to reduce long-term inflation expectations, thereby \nlowering borrowing costs. Inflation targeting provides an \neffective framework for reconciling these short- and long-term \ngoals, ultimately delivering growth in line with potential as well \nas price stability.\nMonetary Policy Review October 2017\n36\nStatement of the Monetary Policy Committee\n25 May 2017\nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank, \nat a meeting of the Monetary Policy Committee in Pretoria\nHeadline inflation has now returned to within the target range \nas expected, with outcomes in March and April surprising \non the downside. While the inflation outlook has improved \nover the near term, the longer-term forecast trajectory is \nunchanged and uncomfortably close to the upper end of \nthe target range. The rand exchange rate and domestic \nbond yields benefitted from increased global capital inflows \nto emerging markets which largely offset the impact of the \nsovereign credit ratings downgrade. With further ratings \ndecisions imminent, risks remain for a further depreciation \nagainst the backdrop of continued global and domestic \npolitical uncertainty.\nDomestic economic growth prospects have deteriorated, \nas the impact of the ratings downgrade is expected to \nweigh on domestic investment and consumer sentiment \nover the forecast period. The output gap is estimated to \nhave widened and consumer demand has weakened. \nHowever, the trajectory of the growth forecast is still positive \nand the growth rate for this year is expected to exceed that \nrecorded in 2016.\nThe year-on-year inflation rate as measured by the consumer \nprice index (CPI) for all urban areas moderated to 6.1% and \n5.3% in March and April respectively. Food price inflation \nwas the main contributor to the downside surprise in April \nwhen it measured 6.6%. The contribution of the category \nof food and non-alcoholic beverages to the overall inflation \noutcome declined from 1.5 percentage points in March to \n1.1 percentage points in April. The South African Reserve \nBank’s (SARB) measure of core inflation, which excludes \nfood, fuel and electricity, measured 4.8% in April, down from \n4.9% in March.\nProducer price inflation for final manufactured goods also \nsurprised on the downside at 4.6% in April compared with \n5.2% in March. The further moderation in food prices was \nalso reflected in the producer price index with the category \nof food products, beverages and tobacco products \ndecelerating for the sixth consecutive month to 6.4%.\nThe inflation forecast of the SARB has improved over the \nnear term, but is unchanged in the outer quarters. In line \nwith the previous forecast, headline consumer price inflation \nis expected to remain within the range for the rest of the \nforecast period. Inflation is expected to average 5.7% this \nyear compared with 5.9% previously, while the forecast for \n2018 has moderated by 0.1 percentage point to 5.3%. The \nforecast average for 2019 is unchanged at 5.5%.\nThe improvement is driven by downward revisions to \ninternational oil price and domestic electricity tariff \nassumptions. In the latter case, a tariff increase of 4.0% \nwith effect from July 2017 is assumed – down from 8.0%. \nThese revisions have been offset to some extent by a \nless appreciated exchange rate assumption and a slower \ndecline in food price inflation. A continued moderation of \nfood prices is expected over the medium term given the \nfavourable agricultural outlook and significant upward \nrevisions to the maize crop estimates. Food price inflation \nis expected to average 7.7% and 5.4% in 2017 and 2018 \nrespectively, compared with 7.4% and 5.2% previously, and \nto remain unchanged at 5.5% in 2019.\nThe forecast for core inflation in 2017 is 0.4 percentage \npoints lower at 5.0%, partly due to the lower starting point \nof 0.2 percentage points following the sizeable downside \nsurprise in March. The forecast for 2018 declined by \n0.1 percentage points to 5.1%, and is unchanged at \n5.3% in 2019.\nMarket-based inflation expectations have remained largely \nunchanged since the previous meeting of the MPC, with the \nmedian forecasts in the latest Reuters Econometer survey \nsimilar to those of the SARB. The median expectation for \n2017 declined marginally to 5.7%, and is unchanged at 5.5% \nand 5.4% for the next two years respectively. Expectations \nimplicit in the break-even inflation rates in the bond market \nhave also moderated since the previous meeting. Break-\neven inflation rates for shorter-dated maturities are below \n6% but higher than this level for longer-dated maturities.\nThe global growth outlook continues to show signs of \nsustained recovery amid rising world trade volumes. \nNevertheless, the trend growth rate is expected to be \nlower than that experienced before the global financial \ncrisis. The current recovery is characterised by downward \nrevisions to potential output growth in numerous countries, \nand generally low levels of productivity and wage growth. \nDespite a weak first quarter, growth in the United States \n(US) is expected to average above 2.0% this year, although \nfurther policy uncertainty could undermine investor and \nconsumer confidence. Growth rates in the euro area and \nJapan are expected to be sustained at around 2016 levels, \nsupported by accommodative monetary policies.\nThe outlook for emerging markets is also generally positive. \nConcerns about Chinese growth have dissipated somewhat \nfollowing policy intervention, but high leverage in the financial \nsector remains a risk. While Russia has emerged from \nrecession, the expected recovery in Brazil may be undermined \nby current political uncertainty. The outlook for commodity \nproducers may be tempered by recent weaker commodity \nprice trends, particularly those of iron ore and coal.\n37\nMonetary Policy Review October 2017\nGlobal inflation remains relatively benign, although country \nexperiences differ. Inflation is below target in most of the \nadvanced economies, apart from the United Kingdom, \nand the risk of deflation is low, except in Japan. Where \nhigh inflation rates are being experienced in a number of \nemerging markets, these are generally driven by exchange \nrate shocks rather than underlying global price pressures.\nMonetary policies are also likely to remain divergent. The US \nFederal Reserve (Fed) is expected to maintain its moderate \npace of tightening, dependent to some degree on the \nsize and nature of possible fiscal reforms. Policy rates are \nexpected to remain low in most other advanced economies, \nbut a reduction in quantitative easing is possible in the \nnear future in the euro area. In general, emerging market \neconomies have displayed a loosening bias, particularly \nin those countries where previous policy tightening had \nresulted in improved inflation prospects. The high yield \ndifferentials of emerging markets have persisted, sustaining \ncapital flows to these economies.\nAt the time of the previous meeting of the MPC, the rand \nwas trading at around R13.00 against the US dollar. It \nthen depreciated following the domestic cabinet reshuffle \nand the consequent sovereign credit ratings downgrades \nby two ratings agencies. Having reached a weak point \nof almost R14.00 against the US dollar in April, the rand \nsubsequently recovered some of these losses in line with \nimproved sentiment towards emerging markets in general. \nSome of these gains were reversed by spillover effects of \nrecent political uncertainty in Brazil. Since the previous MPC \nmeeting, the rand has appreciated by 0.4% against the US \ndollar and depreciated by 1.6% on a trade-weighted basis. \nAt current levels, the rand is still more appreciated relative to \nrates prevailing at this time last year.\nDespite the recent weakening, the rand has been supported \nby a more favourable current account outlook following a \nsignificant narrowing of the deficit in the final quarter of last \nyear. A further positive trade balance was recorded in the \nfirst quarter of this year, but a moderately wider current \naccount deficit is expected over the forecast period, due in \npart to a recent deterioration in the terms of trade.\nNon-residents remained net buyers of domestic government \nbonds in April and May to date, to the value of R23.2 billion, \ndespite the recent ratings downgrades. This may change \nshould further downgrades occur, particularly with respect \nto domestic currency ratings. The rand therefore remains \nvulnerable to this prospect as well as to changes in global \nrisk sentiment towards emerging markets.\nThe domestic growth outlook has deteriorated amid weak \nbusiness and consumer confidence. The SARB’s forecast \nfor GDP growth has been revised down for the entire \nforecast period, by 0.2 percentage points for 2017 and \n2018, and by 0.3 percentage points for 2019. Annual growth \nrates of 1.0%, 1.5% and 1.7% for the forecast years are \nnow expected. This downward revision is due in part to the \nexpected impact of the sovereign credit ratings downgrade \non domestic private sector gross fixed capital formation in \nparticular. The downgrade is also likely to weigh on public \nsector investment through higher funding costs and more \ndifficult access to funding.\nAt the sectoral level, a strong near-term improvement is \nexpected in the agricultural sector, and mining output has \nalso rebounded. By contrast, the manufacturing sector \noutlook remains constrained, with a third consecutive \nquarterly contraction expected in the first quarter of this \nyear. In line with this, the latest Absa Purchasing Managers’ \nIndex showed a sharp decline. Growth in the trade sector \nalso appears to have moderated somewhat.\nA slower but positive pace of household consumption \nexpenditure growth is forecast for this year. Real retail and \nwholesale trade sales contracted in the first quarter of this \nyear. While domestic sales of passenger motor vehicles \nimproved, the outlook for the sector remains subdued. \nFactors such as low consumer confidence, higher tax \nburdens, the absence of significant wealth effects and \nstagnant employment growth have contributed to these \nweaker consumption trends.\nIn addition to these factors, credit extension to the household \nsector in particular remains weak, and is reflected in further \nhousehold deleveraging. Although credit extension to the \ncorporate sector is still relatively robust, the downward \ngrowth trend has persisted. There may, however, be \nsome relief to consumers from moderating inflation, while \nincreases in real disposable income over the forecast period \nare also expected to provide some support to consumption, \nbut to a lesser extent than previously.\nNominal salary and wage increases have continued to show \nsigns of moderation but are still at levels that contribute to \nthe persistence of inflation at higher levels. While continued \nmoderation of nominal unit labour costs are expected over \nmost of the forecast period, the trajectory has been revised \nslightly upwards, largely due to the weaker economic growth \nprojections.\nInternational oil prices have firmed since the previous MPC \nmeeting, having declined to levels below US$50 per barrel \nat one stage. The recovery was a response to indications \nthat the Organization of the Petroleum Exporting Countries \n(OPEC) agreement to curtail output would be extended for \na further six months. However, the fragility of this agreement \nand the increase in shale production in the US is expected \nto cap increases going forward. The international oil price \nassumption has been revised down by US$2 per barrel \nfor each forecast year, but the moderate upward trend \nhas been maintained. Domestic petrol prices increased by \naround 50 cents per litre in May due to the weaker exchange \nMonetary Policy Review October 2017\n38\nrate and higher international product prices. The current \nover-recovery on the petrol price indicates that a reduction \nof around 20 cents per litre is likely in June, mainly due to \ninternational price movements.\nThe short-term inflation outlook has improved further since \nthe previous meeting of the MPC. Headline inflation in April \nwas lower than expected, largely related to the pace of food \ndisinflation. The MPC notes, however, that there have been \nbroad-based downside surprises in core inflation as well. \nThe current forecast does not incorporate the most recent \noutcomes, and further downside surprises in the coming \nmonths could have an impact on the starting point of the \nforecast and lower the entire trajectory. However, in the \nabsence of such revisions, the MPC remains concerned \nabout the persistence of the longer-term forecast trend at \nelevated levels within the target range. This gives very little \nscope to absorb the impact of possible adverse shocks.\nThe rand remains a key upside risk to the forecast. The rand \nhas, however, been surprisingly resilient in the face of recent \ndomestic developments. This is partly due to offsetting \nfactors, particularly positive sentiment towards emerging \nmarkets and the improved current account balance. The \ncurrent level of the exchange rate, at below R13.00 against \nthe US dollar, is slightly stronger than at the time of the \nprevious MPC meeting and stronger than that implicit in the \nstarting point for the real exchange rate assumption.\nThe outlook for the rand, and therefore the risks to the \ninflation outlook, will be highly sensitive to unfolding \ndomestic political uncertainty as well as decisions by the \ncredit ratings agencies. The rand could weaken significantly \nin the event of a worst-case ratings downgrade scenario \nthat could result in South African government bonds falling \nout of the global bond indices.\nA downside risk may come from electricity tariffs. The \nincreases from July may be lower than the 4.0% now \nassumed, given the 1.8% guideline for municipalities \npublished by the National Energy Regulator of South Africa \n(NERSA). However, there is a great deal of uncertainty \nwith regard to this assumption for next year, when a new \napplication from Eskom is likely. Currently, an 8.0% increase \nis assumed from July next year.\nThe MPC assesses the risks to the inflation outlook to be \nmore or less balanced. Domestic demand pressures remain \nsubdued and, given the continued negative consumer and \nbusiness sentiment, the risks to the growth outlook are \nassessed to be on the downside.\nIn light of these developments, the MPC has decided to keep \nthe repurchase (repo) rate unchanged at 7.0% per annum. \nFive members preferred an unchanged stance while one \nmember preferred a 25 basis point reduction.\nThe MPC remains of the view that the current level of the \nrepo rate is appropriate for now and that we are likely at \nthe end of the tightening cycle. A reduction in rates would \nbe possible should inflation continue to surprise on the \ndownside and should the forecast over the policy horizon \nbe sustainably within the target range. However, in the \ncurrent environment of high levels of uncertainty, the risks \nto the outlook could easily deteriorate and derail the current \nfavourable assessment.\n39\nMonetary Policy Review October 2017\nSummary of assumptions: Monetary Policy Committee \nmeeting on 25 May 2017*\n1.\t Foreign sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1.\t Real GDP growth in South Africa’s major trading-partner countries...\n3.3% \n3.2% \n2.9% \n3.2% \n3.4% \n3.3% \n(3.1%) \n(3.3%)\n2.\t International commodity prices in US$ (excluding oil)..........................\n-10.5% \n-18.7% \n-3.6% \n15.5% \n-5.0% \n2.5% \n(-4.0%)\n3.\t Brent crude (US$/barrel)........................................................................\n99.2 \n52.5 \n43.6 \n54.0 \n58.0 \n60.0 \n(56.0) \n(60.0) \n(62.0)\n4.\t World food prices (US$).........................................................................\n-3.8% \n-18.7% \n-1.5% \n7.0% \n2.7% \n3.4% \n5.\t International wholesale prices................................................................\n-0.1% \n-3.5% \n-0.8% \n4.0% \n2.0% \n2.0% \n(3.0%) \n \n6.\t Real effective exchange rate of the rand (index 2010 = 100)................\n79.17 \n80.08 \n77.08 \n85.50 \n85.00 \n85.00 \n(87.25) \n(87.00) \n(87.00) \n7.\t Real effective exchange rate of the rand...............................................\n-3.3% \n1.1% \n-3.7% \n10.9% \n-0.6% \n0.0% \n(13.2%) \n(-0.3%) \n \n2.\t Domestic sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1.\t Real government consumption expenditure.....................................\n1.1% \n0.5% \n2.0% \n1.0% \n1.0% \n1.0% \n2. \t Administered prices...........................................................................\n6.7% \n1.7% \n5.3% \n6.3%\n6.4%\n6.5%\n(6.7%)\n(6.7%)\n(6.4%) \n\t\n– Petrol price.....................................................................................\n7.2% \n-10.7% \n1.6% \n8.6% \n7.7% \n6.3% \n(7.8%) \n(6.9%)\n(6.0%) \n\t\n– Electricity price..............................................................................\n7.2% \n9.4% \n9.3% \n5.7% \n6.0% \n8.0% \n(7.7%) \n(8.0%)\n \n3.\t Potential growth..................................................................................\n1.7% \n1.5% \n1.3% \n1.4% \n1.5% \n1.6% \n4.\t Repurchase rate (per cent)................................................................\n5.57 \n5.89 \n6.91 \n7.00 \n7.00 \n7.00 \nThe figures in brackets represent the previous assumptions of the Monetary Policy Committee.\n*\t For an explanation of foreign sector assumptions and domestic sector assumptions, see pages 51 and 52.\nMonetary Policy Review October 2017\n40\n* Figures below the forecast in parentheses represents the previous MPC forecast\nPer cent\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1. Real gross domestic product (GDP) growth.............................\n1.7% \n1.3% \n0.3% \n1.0% \n1.5% \n1.7% \n(1.2%) \n(1.7%) \n(2.0%) \n2. Current account as a ratio to nominal GDP..............................\n-5.3 \n-4.4 \n-3.3 \n-3.1 \n-4.1 \n-4.4 \n \n(-3.2) \n(-3.9) \n(-4.0) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\n* Figures below the forecast in parentheses represents the previous MPC forecast\nYear-on-year percentage change\nActual\nForecast\n1\n2\n3\n4\n2016\n1\n2\n3\n4\n2017\n1\n2\n3\n4\n2018\n1\n2\n3\n4\n2019\n1. Headline inflation.............................\n6.5\n6.2\n6.1\n6.6\n6.3\n6.4\n5.5 \n5.5 \n5.4\n5.7 \n5.1 \n5.2 \n5.4 \n5.5 \n5.3\n5.5 \n5.5 \n5.5 \n5.5 \n5.5 \n(6.4)\n(5.8)\n(5.8) \n(5.6) \n(5.9) \n(5.2) \n(5.4) \n(5.5) \n(5.5) \n(5.4) \n(5.5) \n(5.5) \n(5.5) \n(5.5) \n(5.5) \n2. Core inflation...................................\n5.5\n5.5\n5.7\n5.7\n5.6\n5.2 \n5.0 \n5.0 \n4.9 \n5.0 \n5.0 \n5.0\n5.1 \n5.2 \n5.1 \n5.3 \n5.3 \n5.3 \n5.3 \n5.3 \n(5.4) \n(5.5) \n(5.4) \n(5.3) \n(5.4) \n(5.1)\n(5.1) \n(5.2 )\n(5.3) \n(5.2)\n(5.3) \n(5.3) \n(5.3) \n(5.3) \n(5.3) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nSelected forecast results: Monetary Policy Committee meeting on 25 May 2017\n41\nMonetary Policy Review October 2017\nStatement of the Monetary Policy Committee\n20 July 2017 \nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank, \nat a meeting of the Monetary Policy Committee in Pretoria\nSince the previous meeting of the Monetary Policy \nCommittee (MPC), the inflation outlook has improved. \nFood price inflation has moderated faster than expected, \ndomestic demand pressures remain subdued, and \ninternational oil prices have declined. Despite a degree of \nvolatility, the rand exchange rate has been relatively resilient \nin the face of expected monetary policy tightening in some \nadvanced economies as well as domestic political risks and \nuncertainties. Risks to the inflation outlook still remain.\nAt the same time, domestic growth prospects have \ndeteriorated further following the surprise contraction of \ngross domestic product (GDP) in the first quarter of 2017. \nThe economy has now recorded two successive quarters \nof negative growth, and although a near-term improvement \nis expected, the outlook remains challenging. A number of \nsentiment indicators and data points have reached levels \nlast seen during the 2009 recession, at the height of the \nglobal financial crisis.\nThe year-on-year inflation rate as measured by the \nconsumer price index (CPI) for all urban areas measured \n5.4% and 5.1% in May and June respectively, in line with the \nSouth African Reserve Bank’s (SARB) short-term forecast. \nFood and non-alcoholic beverage inflation measured 6.9% \nin both months, with the contribution to the overall inflation \noutcome unchanged at 1.2 percentage points. Meat prices \ncontinued to accelerate, and at 13.0% contributed to the \ndownside stickiness of food price inflation. The SARB’s \nmeasure of core inflation, which excludes food, fuel and \nelectricity, measured 4.8% in both months.\nProducer price inflation for final manufactured goods \nmeasured 4.6% in April and 4.8% in May. The further \nmoderation in food prices was reflected in the producer \nprice index with the category of food products, beverages \nand tobacco products decelerating for the seventh \nconsecutive month to 5.8%. The divergent trends between \nthe subcategories of ‘products of crops and horticulture’ \nand ‘live animals’ persisted, with year-on-year changes of \n-24.4% and 21.4% respectively.\nThe SARB’s forecast for headline CPI inflation has shown \na marked improvement since the previous MPC meeting. \nThe annual average forecast has been revised down by \n0.4 percentage points for both 2017 and 2018, and by \n0.3 percentage points for 2019 to 5.3%, 4.9% and 5.2% \nrespectively. A lower turning point of 4.6% is expected in \nthe first quarter of 2018 (previously 5.1%) and an average of \n5.2% is forecast for the final quarter of 2019.\nThe main drivers of the improved forecast were the lower \nstarting point; revised assumptions regarding international \noil prices, domestic electricity tariffs and the real effective \nexchange rate; and a wider output gap. These assumptions \nare set out in the annexure to this statement. Food price \ninflation is also expected to be more subdued due to a lower \nstarting point and more favourable domestic crop estimates. \nDespite a persistent upward trend in meat price inflation, the \nforecast for food price inflation has been revised down from \n7.7% to 7.3% for this year, and from 5.4% to 5.1% in 2018. \nThe forecast for 2019 is unchanged at 5.5%.\nThe improvement is also evident in the core inflation \noutlook, with average forecasts of 4.8% for 2017 and 2018, \nand 4.9% for 2019. This compares with previous forecasts \nof 5.0%, 5.1% and 5.3% for these years. This improvement \nis driven in part by lower unit labour costs, in addition to the \nexchange rate and output gap developments.\nInflation expectations as reflected in the survey conducted \nby the Bureau for Economic Research show a marginal \nimprovement, with average expectations slightly below 6% \nin all three years. The decline was most marked among \nanalysts, particularly over the first two survey years, and \nto a lesser extent among labour unionists. Both these \ncategories of respondents expect inflation to be within the \ntarget range over the forecast period. The expectations of \nbusiness respondents are largely unchanged and remain \nabove 6% for all three years. By contrast, average five-year \nexpectations of all groups edged up from 5.7% to 5.9%, and \nranged between 5.5% for analysts and 6.3% for business \nrespondents.\nMedian inflation expectations of market analysts improved \nover the near term. According to the Reuters Econometer \nsurvey conducted in July, expected inflation declined by \n0.2 percentage points to 5.5% in 2017 and to 5.3% in 2018 \ncompared with the May survey. However, the longer-term \ntrend is reversed with an expectation of 5.5% in 2019. \nExpectations implicit in the difference between nominal \nbonds and inflation-linked bonds have also declined slightly \nsince the previous MPC meeting, with the five-year break-\neven rate at 5.3%.\nThe global growth backdrop remains positive, with sustained \nupswings evident in most regions. This is despite continued \nuncertainty regarding economic policy reforms in the United \nStates (US). Nevertheless, growth rates and potential output \nestimates are still generally lower than those in the pre-crisis \nperiod. While there are lingering concerns about financial \nMonetary Policy Review October 2017\n42\nstability risks from the shadow banking sector in China, the \nrecent strong performance of the economy has contributed \nto the favourable environment for emerging markets.\nUnderlying global inflation trends remain benign, with \ninflation below target in most of the advanced economies, \nnotwithstanding the positive growth prognosis and tightening \nlabour markets. An exception is the United Kingdom (UK) \nwhere inflation has accelerated in the wake of the Brexit-\ninduced depreciation of the pound sterling. The subdued \nglobal inflation outlook is reinforced by generally slow wage \nand productivity growth in developed economies.\nDespite the absence of inflationary pressures, central banks \nin a number of advanced economies have signalled their \nintentions to move from highly accommodative monetary \npolicy stances. These countries include the US, the UK, \nthe euro area and Canada. This process is unlikely to be \nsmooth or perfectly synchronised and could generate bouts \nof uncertainty. In the US, expectations of further near-term \nrate increases by the US Federal Reserve (Fed) have been \nscaled down following a succession of downside inflation \nsurprises. The gradual nature of the planned balance sheet \ncontraction by the Fed has also been well communicated \nand appears to have been largely priced in by the markets.\nWhile changing expectations regarding European Central \nBank and US monetary policy in particular have impacted \non a number of emerging market currencies and bond \nyields, the reaction has been relatively muted, and a repeat \nof the 2013 so-called taper tantrum episode is not expected. \nThose economies that were most sensitive to that episode \nhave much improved macroeconomic balances, and \ntheir currencies are less vulnerable to possible spillover \neffects from gradual monetary tightening in the advanced \neconomies.\nThe rand has also been affected by these changing \nexpectations as well as by domestic political developments, \nincluding concerns about a proposal to change the SARB’s \nmonetary policy mandate. While the rand has remained \nmore or less unchanged since the previous meeting of the \nMPC, it has been relatively volatile, having fluctuated in a \nrange between R12.60 and R13.60 against the US dollar.\nThe rand’s relative resilience had been underpinned by the \ngenerally positive sentiment towards emerging markets as \nwell as by sustained trade surpluses. The current account \ndeficit is still expected to widen over the forecast period, \nbut the degree of widening has been revised down. The \nrand remains vulnerable to increased global risk aversion, \ndomestic political shocks, and to the possibility of further \nratings downgrades.\nThe domestic growth outlook remains a concern following \nthe surprise broad-based GDP growth contraction in the \nfirst quarter of this year. With the exception of the primary \nsector, all sectors recorded negative growth. While positive \ngrowth is expected in the second quarter, the SARB’s \nannual growth forecasts have been revised down further. \nThe forecast for 2017 has been adjusted down from 1.0% to \n0.5%, and the forecast for 2018 is down from 1.5% to 1.2%. \nGrowth of 1.5% is expected in 2019, compared with 1.7% \npreviously.\nAs a result of these trends, the output gap has widened \nsomewhat despite a further downward revision to potential \noutput growth by 0.3 percentage points for each year, to \n1.1% in 2017 and to 1.3% in 2019. The weak outlook is \nconsistent with the decline in the Rand Merchant Bank/\nBureau for Economic Research (RMB/BER) Business \nConfidence Index to levels last seen during the recession \nfollowing the global financial crisis. The SARB’s composite \nleading business cycle indicator has also moderated \nsomewhat since January.\nMonthly data for both the mining and manufacturing sectors \nin April and May suggest that, in the absence of a sharp \ncontraction in June, these sectors are likely to contribute \npositively to growth in the second quarter, along with the \ncontinued rebound in the agricultural sector. The recovery is \nnevertheless expected to be modest, particularly in the light \nof a sharp fall in the Absa Purchasing Managers’ Index in \nJune, which returned to below the neutral level of 50 index \npoints. The construction sector also remains under pressure \nfollowing the marked fall in building plans passed in the first \nquarter of this year, with the negative trend continuing into \nApril.\nThe continued poor performance of gross fixed capital \nformation contributes to the weak state of the economy. \nAlthough private sector investment recorded positive growth \nafter five consecutive quarters of contraction, at a growth \nrate of 1.2% it remains very subdued. Given the extremely \nlow level of business confidence, a near-term improvement \nis unlikely. Policy uncertainty, a recent example being in the \nmining sector, is likely to constrain investment.\nAs a consequence, employment growth has been minimal \nand the prospects are unfavourable. Given the need for \nfiscal consolidation, a continued decline in government’s \ncontribution to employment creation is expected. The \nofficial unemployment rate increased to 27.7% in the first \nquarter of this year.\nConsumption expenditure by households contracted in \nthe first quarter of this year amid a further deterioration in \nconsumer confidence. Although the monthly retail sales \ndata suggest a more positive outcome for the second \nquarter, this improvement is likely to be offset in part by a \ndecrease in new vehicle sales in the quarter. The outlook for \nconsumption expenditure is expected to remain weak amid \nemployment uncertainty and higher tax burdens.\nThese consumption trends are mirrored in the continued \nmoderation in credit extension to households. Growth in \n43\nMonetary Policy Review October 2017\nmortgage advances and instalment sales credit finance \nremained subdued, reflective of the difficult conditions in the \nhousing and vehicle markets. General loans to households \nincreased moderately in May, but off a low base. By contrast, \ncredit extension to the corporate sector remains relatively \nbuoyant, if on a downward trend.\nWage trends have been an important contributor to the \npersistence of inflation at higher levels. There are, however, \nindications of some moderation in average salaries and \nrelated unit labour costs which are expected to remain \nbelow the 6% level over the forecast period. The outcome \nof a number of multi-year wage agreements that are due for \nrenewal in 2017 will be closely watched as they could pose \na risk to the inflation trajectory.\nThe persistent global oil supply glut, along with increased \nshale gas production in the US, has undermined efforts \nby the Organization of the Petroleum Exporting Countries \n(OPEC) and other producers to support prices through \noutput restrictions. Since the beginning of June, Brent crude \noil prices have traded at levels below US$50 per barrel, and \nthe SARB’s oil price assumptions have been revised down \nover the forecast period. These recent oil price trends, \nalong with the stronger exchange rate, contributed to a \n69 cents per litre reduction in the petrol price in July. \nFollowing a weakening of the rand and a partial recovery \nin crude oil prices, a moderate petrol price increase is \nexpected in August.\nThe inflation outlook has improved significantly since the \nprevious meeting of the MPC and has been fairly broad-\nbased. The lower core inflation outlook is indicative of \nweaker underlying inflation pressures at a time when the \nimpact of exogenous shocks on headline inflation has been \ndissipating. These shocks include drought-induced food \nprice inflation and, to a lesser extent, international oil price \nincreases earlier this year that have since been reversed.\nA number of risks to the inflation outlook persist and the \nMPC assesses the risks to the inflation outlook to be broadly \nbalanced. Although the rand has been relatively resilient, it \nremains vulnerable to heightened political uncertainty, global \nmonetary policy developments and possible further credit \nratings downgrades. On the positive side, it is supported \nby a sustained narrowing of the current account deficit and \npositive investor sentiment towards emerging markets.\nA further upside risk relates to the possible supply side \nshock of a large electricity tariff increase from July next \nyear. Eskom has approached the National Energy Regulator \nof South Africa (NERSA) for an increase of around 20%, \nbut the current forecast assumes an increase of 8%. \nThis assumption will be adjusted in line with any new \ndeterminations made by NERSA.\nThe MPC also remains concerned that inflation expectations \nremain sticky at the upper end of the target range. To the \nextent that these expectations are formed adaptively, they \nshould adjust downwards if the lower inflation trajectory \nis sustained. The MPC would prefer expectations to be \nanchored closer to the midpoint of the target range.\nThe underlying demand in the economy is extremely weak \nand the MPC is concerned about the deterioration in the \ngrowth outlook over the forecast period. This decline is \nbroad-based. It is unclear where the drivers of accelerated \ngrowth will come from in the absence of credible structural \npolicy initiatives that will reduce uncertainty and increase \nbusiness and consumer confidence. The MPC assesses \nthe risks to the revised growth forecast to be slightly on the \ndownside.\nGiven the improved inflation outlook and the deteriorated \ngrowth outlook, the MPC has decided to reduce the \nrepurchase rate by 25 basis points with effect from \n21 July 2017, to 6.75% per annum. Four members preferred \na reduction, while two members preferred an unchanged \nstance.\nAs has been emphasised on numerous occasions, the \nMPC does not view monetary policy as the solution to the \nstructural growth constraints in the economy, nor does \nit believe that a reduction in interest rates will provide a \nsignificant stimulus to growth in the current environment \nof low confidence and political uncertainty. It will, however, \nprovide some relief at the margin.\nIn this highly uncertain environment, future policy decisions \nwill be dependent on data outcomes and our assessment \nof the balance of risks. We remain vigilant and would not \nhesitate to reverse this decision should the inflation outlook \nand risks deteriorate.\n \nMonetary Policy Review October 2017\n44\nSummary of assumptions: Monetary Policy Committee \nmeeting on 20 July 2017*\n1.\t Foreign sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1.\t Real GDP growth in South Africa’s major trading-partner countries...\n3.3% \n3.3% \n2.9% \n3.3% \n3.4% \n3.3% \n(3.2%)\n(3.2%)\n2.\t International commodity prices in US$ (excluding oil)..........................\n-10.5% \n-18.7% \n-3.6% \n14.0% \n-5.0% \n2.5% \n(15.5%)\n3.\t Brent crude (US$/barrel)........................................................................\n99.2 \n52.5 \n43.6 \n52.0 \n55.0 \n56.0 \n(54.0)\n(58.0) \n(60.0) \n4.\t World food prices (US$).........................................................................\n-3.8% \n-18.7% \n-1.5% \n7.0% \n2.7% \n3.4% \n \n5.\t International wholesale prices................................................................\n-0.1% \n-3.5% \n-0.8% \n4.0% \n2.0% \n2.0% \n \n \n6.\t Real effective exchange rate of the rand (index 2010 = 100)................\n79.17 \n80.08 \n77.08 \n87.01 \n87.00 \n87.00 \n(85.50) \n(85.00) \n(85.00) \n7.\t Real effective exchange rate of the rand...............................................\n-3.3% \n1.1% \n-3.7% \n12.9% \n0.0% \n0.0% \n(10.9%) \n(-0.6%) \n \n2.\t Domestic sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1.\t Real government consumption expenditure.....................................\n1.1% \n0.5% \n2.0% \n0.5% \n1.0% \n1.0% \n(1.0%)\n2. \t Administered prices...........................................................................\n6.7% \n1.7% \n5.3% \n5.5%\n5.7%\n6.2%\n(6.3%)\n(6.4%)\n(6.5%)\n\t\n– Petrol price.....................................................................................\n7.2% \n-10.7% \n1.6% \n6.6% \n6.2% \n5.5% \n(8.6%) \n(7.7%)\n(6.3%)\n\t\n– Electricity price..............................................................................\n7.2% \n9.4%\n9.3% \n4.6% \n5.0% \n8.0% \n(5.7%) \n(6.0%)\n3.\t Potential growth..................................................................................\n1.7% \n1.3% \n1.1% \n1.1% \n1.2% \n1.3% \n(1.5%)\n(1.3%)\n(1.4%)\n(1.5%)\n(1.6%)\n4.\t Repurchase rate (per cent)................................................................\n5.57 \n5.89 \n6.91\n7.00 \n7.00 \n7.00 \nThe figures in brackets represent the previous assumptions of the Monetary Policy Committee.\n*\t For an explanation of foreign sector assumptions and domestic sector assumptions, see pages 51 and 52.\n45\nMonetary Policy Review October 2017\nForecast results (annual)\nPercentage changes\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1. Real gross domestic product (GDP)...........................................\n1.7% \n1.3% \n0.3% \n0.5% \n1.2% \n1.5% \n(1.0%)\n(1.5%)\n(1.7%)\n2. GDP output gap..........................................................................\n-0.4\n-0.5\n-1.3\n-1.9\n-1.9\n-1.7\n(-0.1)\n(-0.3)\n(-1.6)\n(-1.6)\n(-1.4)\n3. Current account as a ratio to nominal GDP...............................\n-5.3 \n-4.4 \n-3.3\n-2.7\n-3.4\n-3.8\n \n(-3.1) \n(-4.1) \n(-4.4) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nForecast results (quarterly)\nYear-on-year percentage change\nActual\nForecast\n1\n2\n3\n4\n2016\n1\n2\n3\n4\n2017\n1\n2\n3\n4\n2018\n1\n2\n3\n4\n2019\n1. Headline inflation..............................\n6.5\n6.2\n6.1\n6.6\n6.3\n6.4\n5.3\n4.8\n4.7\n5.3\n4.6\n4.8\n5.2\n5.2\n4.9\n5.1\n5.2\n5.2\n5.2\n5.2\n(5.5)\n(5.5)\n(5.4)\n(5.7)\n(5.1)\n(5.2) \n(5.4) \n(5.5) \n(5.3) \n(5.5) \n(5.5) \n(5.5) \n(5.5)\n(5.5)\n2. Core inflation....................................\n5.5\n5.5\n5.7\n5.7\n5.6 \n5.2 \n4.8 \n4.6 \n4.5\n4.8\n4.7\n4.8\n4.8\n4.9\n4.8\n4.9\n4.9\n4.9\n4.9\n4.9\n(5.0)\n(5.0)\n(4.9) \n(5.0) \n(5.0)\n(5.0) \n(5.1 )\n(5.2) \n(5.1)\n(5.3) \n(5.3) \n(5.3) \n(5.3) \n(5.3) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nSelected forecast results: Monetary Policy Committee meeting on 20 July 2017\nMonetary Policy Review October 2017\n46\nStatement of the Monetary Policy Committee\n21 September 2017 \nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank, \nat a meeting of the Monetary Policy Committee in Pretoria\nThe South African economy recorded positive growth \nduring the second quarter of 2017 following two consecutive \nquarters of contraction. Growth prospects, however, remain \nsubdued as domestic fixed investment contracted further \namid low business confidence. The inflation forecast \nhas increased marginally since the previous meeting of \nthe Monetary Policy Committee (MPC), with increased \nuncertainty regarding a number of the main drivers.\nThe global economy is on a recovery path. Inflation has \nmoderated in the emerging economies and remains benign \nin most advanced economies. The statement released by \nthe Federal Open Market Committee (FOMC) yesterday \nconfirmed the gradual pace of reduction of its balance sheet \nand normalisation of its policy rate. Along with continued \naccommodative policies by the European Central Bank \n(ECB), this is expected to contribute to the continuation \nof favourable prospects for capital flows to emerging \neconomies.\nThe year-on-year inflation rate as measured by the consumer \nprice index (CPI) for all urban areas increased to 4.8% in \nAugust, up from 4.6% previously, marginally below the \nSouth African Reserve Bank’s (SARB) short-term forecast. \nFood and non-alcoholic beverage inflation surprised on \nthe downside, moderating from 6.8% to 5.7%. Meat prices \ncontinued to accelerate in August, having measured \n15.0%, but the lower cereal prices contributed to the slowing \nmomentum. The SARB’s measure of core inflation, which \nexcludes food, fuel and electricity, measured 4.7% in July \nand 4.6% in August, in line with the short-term forecast.\nYear-on-year producer price inflation for final manufactured \ngoods declined from 4.0% in June to 3.6% in July. Food \nproducts price inflation moderated further to 3.3% in July, \nbut the divergent trend of manufactured meat prices \ncontinued with an increase of 17.8%. This trend was also \nevident in agricultural prices, where the subcategory of ‘live \nanimals’ increased by 31.7%, while ‘products of crops and \nhorticulture’ declined by 26.9%.\nThe SARB’s forecast for headline CPI inflation is unchanged \nat an annual average of 5.3% for 2017, and revised up by \n0.1 percentage point to 5.0% and 5.3% for 2018 and 2019 \nrespectively. A lower turning point of 4.6% is still expected \nin the first quarter of 2018. The same pattern is observed \nin the forecast for core inflation which is unchanged at \n4.8% for 2017, but adjusted up to 4.9% and 5.0% for the \nnext two years. These forecasts do not incorporate the \nmost recent inflation outcome.\nThe main drivers of these changes are a lower repurchase \nrate, a less appreciated exchange rate assumption, a slightly \nnarrower output gap and a marginal adjustment to the food \nprice forecast as meat prices continue to surprise on the \nupside. Food price inflation is forecast to reach a low turning \npoint of 4.8% in the first quarter of 2018 and to average \n7.3% in 2017, and 5.2% and 5.6% in 2018 and 2019 \nrespectively. There may be some downside risk to this \nforecast in light of the August food inflation outcomes. \nThe electricity tariff assumption remains unchanged at \n8% from July next year, but there may be some upside risk \nto this assumption, given Eskom’s recent application to the \nNational Energy Regulator of South Africa.\nInflation expectations as reflected in the survey conducted \nby the Bureau for Economic Research at Stellenbosch \nUniversity in the third quarter of 2017 continue to be relatively \nanchored at the upper end of the target range. Despite a \ndecline of 0.2 percentage points in the average expected \ninflation for 2017 to 5.7%, expectations remain unchanged \nat 5.8% and 5.9% for the next two years. Expectations of \nanalysts and business people moderated – although the \nlatter remains above the target range – while those of trade \nunionists increased marginally. A welcome development is \nthat average five-year inflation expectations declined from \n5.9% to 5.6%. This is the lowest level recorded since long-\nterm expectations were first surveyed in 2011. Expectations \nimplicit in the difference between nominal bonds and \ninflation-linked bonds are more or less unchanged since \nthe previous meeting, with the five-year break-even rate \nat 5.2%.\nGlobal conditions remain generally favourable despite some \ngeopolitical risks. The upswing appears to be synchronised \nwith increased world trade volumes. Growth in the Unites \nStates (US) is forecast to remain above potential in the short \nto medium term, with the devastation caused by the recent \nhurricanes expected to have only a limited and short-lived \nimpact on growth. The improved growth performance in the \neuro area also appears to be sustained and region-wide, \nwhile the Japanese economy has experienced moderate \ngrowth in the past few quarters. By contrast, growth in the \nUnited Kingdom has slowed following weak investment in \nthe face of the Brexit headwinds. The outlook for emerging \nmarkets is also relatively positive amid generally improving \nfundamentals.\nDespite the improved growth outlook, global inflation \npressures remain benign, particularly in the advanced \n47\nMonetary Policy Review October 2017\neconomies. These trends are likely to contribute to the \npersistence of accommodative monetary policy stances \nin Japan and the euro area, where the recent appreciation \nof the euro is likely to dampen inflation pressures further. \nAs expected, the US Federal Reserve (Fed) yesterday \nannounced a gradual reduction of its balance sheet. The \nprocess had been communicated previously and was \nlargely priced in by the financial markets. The pace of policy \nrate normalisation is also expected to remain measured as \ninflation continues to surprise on the downside, despite \ntightening labour market conditions. The stance of US fiscal \npolicy is a source of uncertainty. Although tax reductions \ncould lead to a faster pace of monetary tightening, the \nprospect of significant tax reforms has receded over time.\nThe rand exchange rate has traded in a range of between \nR13.54 and R12.74 since the previous meeting of the MPC, \ndriven in part by movements in the major currencies. Over \nthis period, the rand depreciated by 2.8% against the US \ndollar, by 6.2% against the euro, and by 4.5% on a trade-\nweighted basis. The rand remains sensitive to political \ndevelopments, weak economic growth prospects and the \nrisk of further sovereign ratings downgrades. However, it \nhas been supported by persistent trade account surpluses \nand associated narrowing of the current account deficit.\nThe rand has also been supported by the relatively \naccommodative global monetary policy settings. These \nhave contributed to sustained demand for high-yielding \nemerging market bonds. Net purchases by non-residents \nof South African government bonds have amounted to \nR63 billion in the year to date. The domestic yield curve \nrelative to other peer emerging market economies remains \nattractive to non-residents despite a decline in the curve \nacross all maturities. However, longer-term bond yields and \nthe rand remain vulnerable to a large non-resident sell-off in \nthe event of further credit ratings downgrades, which would \nresult in South Africa falling out of the global bond indices.\nThe \ndomestic \neconomic \ngrowth \noutlook \nremains \nconstrained despite the higher-than-expected growth \noutcome of 2.5% in the second quarter of this year. This \nbroad-based improvement, while welcome, is not expected \nto have a significant impact on the annual growth outcome. \nThe SARB’s forecast for growth in the gross domestic \nproduct for 2017 has been revised up marginally from \n0.5% to 0.6%, while the forecasts for 2018 and 2019 have \nremained unchanged at 1.2% and 1.5% respectively. This \noutlook is consistent with the SARB’s leading business cycle \nindicator which has been weakening since the beginning of \nthe year, indicative of muted growth prospects. Business \nconfidence also remains at very low levels, despite the \nslight improvement in the Rand Merchant Bank/Bureau \nfor Economic Research (RMB/BER) Business Confidence \nIndex during the third quarter.\nAll the major sectors, apart from construction, recorded \npositive growth in the second quarter of 2017, with a \nparticularly strong performance in the agricultural sector. \nThe recovery in the manufacturing sector followed three \nsuccessive quarterly contractions, while the tertiary sector \nreversed its one-quarter contraction. The limited monthly \ndata for the third quarter present a mixed picture at this stage. \nMining sector output contracted in July while manufacturing \nrecorded positive growth. However, the Absa Purchasing \nManagers’ Index averaged 43.5 index points in the first two \nmonths of the quarter, suggesting continued headwinds for \nthe sector.\nThe underlying weakness in the economy is evident in the \n2.6% contraction in gross fixed capital formation during the \nsecond quarter. Of particular concern is the 6.9% decline in \nprivate sector fixed investment, reflecting the low levels of \nbusiness confidence. This subdued outlook is expected to \npersist against a backdrop of continued political and policy \nuncertainty.\nThese investment trends do not bode well for employment \ncreation in the economy. Total employment declined in \nthe second quarter of 2017 and the unemployment rate \nremained unchanged at 27.7%. The public sector, previously \nthe main source of employment growth in the economy, is \nlikely to continue to shed jobs as fiscal constraints intensify.\nConsumption expenditure by households rebounded \nstrongly in the second quarter following the sizeable \ncontraction in the previous quarter. Spending on all three \nmajor goods components recovered, but expenditure \non services contracted. Despite the improved outcome, \nthe outlook for consumption expenditure growth remains \nsubdued, although positive, amid very low levels of \nconsumer confidence. Month-on-month retail trade sales \ndecreased in July, but motor vehicle sales remained relatively \nstrong in July and August. The SARB expects household \nconsumption growth to be in the region of 1% for this year.\nThe \nunderlying \ndrivers \nof \nhousehold \nconsumption \nexpenditure remain unchanged. Lower inflation, lower \ninterest rates and higher real income growth are expected \nto provide some support for consumption. Offsetting \neffects include depressed consumer confidence, weak \nemployment growth, the absence of significant wealth \neffects and the prospect of further tax increases in the wake \nof fiscal revenue shortfalls.\nIn addition, growth in credit extension to the private \nsector has declined steadily over the past few months, \nas corporate demand for mortgage finance and general \nloans in particular moderated. Growth in credit extension \nto households remains weak and negative in real terms. \nThese trends are also reflected in continued household \ndeleveraging, with household debt to disposable income \nMonetary Policy Review October 2017\n48\ndeclining further to 72.6% in the second quarter – its lowest \nlevel since the beginning of 2006.\nInternational oil prices have increased by about US$5 per \nbarrel since the previous meeting, with Brent crude oil \ncurrently trading at around US$55 per barrel. Nevertheless, \nthe MPC does not expect a further sustained acceleration \nin prices as the flexibility of US shale oil production is \nexpected to provide a ceiling to prices. The previous oil price \nassumptions therefore remain unchanged. The domestic \nprice of 95 octane petrol has increased by a cumulative \n86 cents per litre since August, mainly due to higher \ninternational product prices. A further moderate increase is \nexpected in October.\nThe MPC expects inflation to remain within the target range \nover the forecast period, closer to the midpoint than was the \ncase early in the year. Core inflation has remained relatively \nstable, indicative of the absence of significant demand \npressures. However, a number of risks to the inflation \noutlook have increased and the MPC assesses the risks to \nthe inflation outlook to be somewhat on the upside.\nThe rand remains a key upside risk to the inflation outlook. \nFurthermore, some of the event risks, particularly those of a \npolitical nature, are now more imminent but with no greater \ndegree of clarity regarding the outcome. The prospect of \na further ratings downgrade persists, particularly given the \nincreased fiscal challenges and political uncertainty. The \nnarrower current account deficit and the global environment \nremain supportive of the rand. However, should inflation \nand/or growth surprise on the upside in Europe and in the \nUS in particular, we could see a faster pace of monetary \ntightening, which could impact on capital flows and the rand \nexchange rate. At this stage, markets appear to be pricing \na high probability of an increase in the Federal funds rate in \nDecember, and three further increases next year.\nA further upside risk relates to the possibility of a large \nelectricity tariff increase than is currently assumed in our \nforecast from July next year. A tariff increase of 20% could \nraise the headline inflation forecast by between 0.2 and \n0.3 percentage points, and the MPC will continue to assess \nthe possible second round effects of these increases.\nThe MPC remains concerned that inflation expectations of \nbusiness people and trade unions remains above or close \nto 6% for the next two years, even though our own forecast \nand those of most analysts expect inflation to be much \ncloser to 5%. Lower inflation expectations among key price \nsetters are an important element in reducing inflation in the \nfuture, thus enabling lower nominal interest rates.\nUntil August, food price inflation had been moderating at \na slower pace than expected, mainly due to the continued \nacceleration in meat prices. However, the August year- \non-year outcome surprised significantly on the downside. \nShould this lower trajectory continue there could be \na downside risk to the food price forecast and to the overall \ninflation outlook, particularly in the short term.\nAlthough household consumption expenditure rebounded \nstrongly in the second quarter, the MPC does not view \nthis as indicative of the longer-term trend of expenditure, \nwhich is expected to remain constrained. The second-\nquarter growth outcome, while positive, does not change \nour growth forecast significantly, and the outlook remains \nweak. The MPC assesses the risks to the revised growth \nforecast to be slightly on the downside.\nIn light of these developments and the deteriorating \nassessment of the balance of the risks, the MPC has \ndecided to keep the repurchase rate unchanged at \n6.75% per annum. Three members preferred an unchanged \nstance and three members preferred a 25 basis point \nreduction. Ultimately, the Committee decided to keep the \nrate unchanged.\nGiven the heightened uncertainties in the economy, the \nMPC felt it would be appropriate to maintain the current \nmonetary policy stance at this stage, and reassess the data \nand the balance of risks at the next meeting.\n49\nMonetary Policy Review October 2017\nSummary of assumptions: Monetary Policy Committee \nmeeting on 21 September 2017*\n1.\t Foreign sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1.\t Real GDP growth in South Africa’s major trading-partner countries...\n3.3% \n3.2% \n2.9% \n3.4% \n3.3% \n3.3% \n(3.3%)\n(3.3%)\n3.4%\n2.\t International commodity prices in US$ (excluding oil)..........................\n-10.2%\n-22.7% \n4.1%\n14.0% \n-2.5% \n2.5% \n(-10.5%)\n(-18.7%)\n(-3.6%)\n(-5.0%)\n3.\t Brent crude (US$/barrel)........................................................................\n99.2 \n52.5 \n43.6 \n52.0 \n55.0 \n56.0 \n4.\t World food prices (US$).........................................................................\n-3.8% \n-18.7% \n-1.5% \n7.0% \n2.7% \n3.4% \n \n5.\t International wholesale prices................................................................\n-0.1% \n-3.5% \n-0.8% \n3.5% \n1.8% \n2.0% \n(4.0%)\n(2.0%) \n \n6.\t Real effective exchange rate of the rand (index 2010 = 100)................\n79.17 \n80.08 \n77.08 \n86.40 \n86.00 \n86.00 \n(87.01) \n(87.00) \n(87.00) \n7.\t Real effective exchange rate of the rand...............................................\n-3.3% \n1.1% \n-3.7% \n12.1% \n-0.5%\n0.0% \n(12.9%) \n(0.0%) \n \n2.\t Domestic sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1.\t Real government consumption expenditure.....................................\n1.1% \n0.5% \n2.0% \n0.5% \n1.0% \n1.0% \n2. \t Administered prices...........................................................................\n6.7% \n1.7% \n5.3% \n5.5%\n5.7%\n6.2%\n\t\n– Petrol price.....................................................................................\n7.2% \n-10.7% \n1.6% \n6.9% \n6.4% \n5.6%\n(6.6%) \n(6.2%)\n(5.5%)\n\t\n– Electricity price..............................................................................\n7.2% \n9.4%\n9.3% \n4.7% \n5.1% \n8.0% \n(4.6%) \n(5.0%)\n3.\t Potential growth..................................................................................\n1.7% \n1.3% \n1.1% \n1.1% \n1.2% \n1.3% \n4.\t Repurchase rate (per cent)................................................................\n5.57 \n5.89 \n6.91\n6.89\n6.75 \n6.75 \n(7.00)\n(7.00)\n(7.00)\nThe figures in brackets represent the previous assumptions of the Monetary Policy Committee.\n*\t For an explanation of foreign sector assumptions and domestic sector assumptions, see pages 51 and 52.\nMonetary Policy Review October 2017\n50\nForecast results (annual)\nPer cent\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1. Real gross domestic product (GDP) growth..............................\n1.7% \n1.3% \n0.3% \n0.6% \n1.2% \n1.5% \n(0.5%)\n2. GDP output gap..........................................................................\n-0.4\n-0.5\n-1.3\n-1.7\n-1.7%\n-1.5\n(-1.9)\n(-1.9)\n(-1.7)\n3. Current account as a ratio to nominal GDP...............................\n-5.3 \n-4.4\n-3.3 \n-2.6 \n-3.4 \n-3.8\n \n(-2.7) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nForecast results (quarterly)\nYear-on-year percentage change\nActual\nForecast\n1\n2\n3\n4\n2016\n1\n2\n3\n4\n2017\n1\n2\n3\n4\n2018\n1\n2\n3\n4\n2019\n1. Headline inflation.............................\n6.5\n6.2\n6.1\n6.6\n6.3\n6.4\n5.3\n4.8\n4.8\n5.3\n4.6\n4.8 \n5.3\n5.2\n5.0\n5.2\n5.3\n5.3\n5.3\n5.3\n(4.8)\n(4.7) \n(5.3) \n(4.6)\n(4.8) \n(5.2)\n(5.2) \n(4.9) \n(5.1)\n(5.2)\n(5.2)\n(5.2)\n(5.2)\n2. Core inflation...................................\n5.5\n5.5\n5.7\n5.7\n5.6 \n5.2\n4.8 \n4.6 \n4.5 \n4.8 \n4.7\n4.9\n4.9 \n5.0\n4.9 \n5.0 \n5.0 \n5.0 \n5.1 \n5.0 \n(4.6)\n(4.5) \n(4.8) \n(4.7)\n(4.8)\n(4.8)\n(4.9) \n(4.8)\n(4.9)\n(4.9)\n(4.9)\n(4.9)\n(4.9)\nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nSelected forecast results: Monetary Policy Committee meeting on 21 September 2017\n51\nMonetary Policy Review October 2017\nForeign sector assumptions\n1.\t Trading-partner gross domestic product (GDP) growth \nis determined broadly via the International Monetary \nFund’s (IMF) Global Projection Model (GPM), which is \nthen adjusted to aggregate the GDP growth rates of \nSouth Africa’s major trading partners on a trade-weighted \nbasis. Individual projections are done for the four largest \ntrading partners (euro area, China, the United States \n(US) and Japan), while the remaining trading partners \nare grouped into three regions: emerging Asia (excluding \nChina), Latin America and the Rest of Countries bloc. \nThe assumption takes account of country-specific \n‘consensus’ forecasts as well as IMF regional growth \nprospects.\n2.\t The commodity price index is a weighted aggregate \nprice index of the major South African export com-\nmodities based on 2010 prices. The composite index \nrepresents the total of the individual commodity prices \nmultiplied by their smoothed export weights. Commodity \nprice prospects generally remain commensurate with \nglobal liquidity as well as commodity demand/supply \npressures as reflected by the pace of growth in the \ntrading-partner countries.\n3.\t The Brent crude oil price is expressed in US dollars \nper barrel. The assumption incorporates the analysis \nof factors of supply, demand (using global growth \nexpectations) and inventories of oil (of all grades) as \nwell as the expectations of the US Energy Information \nAdministration (EIA), the Organization of the Petroleum \nExporting Countries (OPEC) and Reuters.\n4.\t World food prices are the composite food price index \nof the United Nations Food and Agriculture Organization \n(FAO) in US dollars. The index is weighted using average \nexport shares and represents the monthly change in the \ninternational prices of a basket of five food commodity \nprice indices (cereals, vegetable oil, dairy, meat and \nsugar). World food price prospects incorporate selected \nglobal institution forecasts for food prices as well as \nimbalances from the anticipated trend in international \nfood supplies relative to expected food demand \npressures.\n5.\t International wholesale prices refers to a weighted \naggregate of the producer price indices of South \nAfrica’s major trading partners, as per the South African \nReserve Bank’s (SARB) official real effective exchange \nrate calculation. Although individual country consumer \nprice index (CPI) inflation forecasts provide a good \nindication for international wholesale price pressures, \nthe key drivers for the assumed trend in global wholesale \ninflation are oil and food prices as well as expected \ndemand pressures emanating from the trends in the \noutput gaps of the major trading-partner countries. \nOther institutional forecasts for international wholesale \nprices are also considered.\n6.\t The real effective exchange rate is the nominal effective \nexchange rate of the rand deflated by the producer price \ndifferential between South Africa and an aggregate of \nits trading-partner counties (as reflected in the Quarterly \nBulletin published by the SARB). Although the nominal \nrate is a weighted average of South Africa’s 20 largest \ntrading partners, particular focus is placed on the rand \noutlook against the US dollar, euro, Chinese yuan, British \npound and the Japanese yen. The assumed trend in the \nreal effective exchange rate remains constant from the \nlatest available quarterly average over the projection \nperiod. However, due to the time delay in the calculation \nof the real effective exchange rate, the most recent trend \nin the nominal effective exchange rate is adjusted with \nthe assumed trend for the domestic and foreign price \ndifferential for the current quarter. This may result in a \ntechnical annual adjustment over the current and next \nforecast year that differs from zero.\nMonetary Policy Review October 2017\n52\nDomestic sector assumptions\n1.\t Government consumption expenditure (real) is broadly \nbased on the most recent National Treasury budget \nprojections. However, since these projections take place \ntwice a year, the most recent actual data points also play \na significant role in the assumptions process.\n2.\t Administered prices represent the total of regulated \nand non-regulated administered prices as reflected by \nStatistics South Africa (Stats SA). Their weight in the \nCPI basket is 16.17% and the assumed trend over the \nforecast period is largely determined by the expected \npace of growth in petrol prices, electricity tariffs, school \nfees, and water and other municipal assessment rates.\n\t\nThe petrol price is an administered price and comprises \n4.58% of the CPI basket. The basic fuel price (which \ncurrently accounts for roughly half of the petrol price), \nis determined by the exchange rate and the price of \npetrol quoted in US dollars at refined petroleum centres \nin the Mediterranean, the Arab Gulf and Singapore. \nThe remainder of the petrol price is made up of \nwholesale and retail margins as well as the fuel levy and \ncontributions to the Road Accident Fund (RAF). Since \nmost taxes and retail margins are changed once a year, \nthe assumed trajectory of the petrol price largely reflects \nthe anticipated trend in oil prices and the exchange rate.\n\t\nThe electricity price is an administered price measured \nat the municipal level with a weight of 3.75% in the \nheadline CPI basket. Electricity price adjustments \ngenerally take place in July and August of each year, \nand the assumed pace of increase over the forecast \nperiod reflects the multi-year price determination \n(MYPD) agreement between Eskom and the National \nEnergy Regulator of South Africa (NERSA), with a slight \nadjustment for measurement at municipal level.\n3.\t The pace of potential growth is derived from the \nSARB’s semi-structural potential output model. The \nmeasurement accounts for the impact of the financial \ncycle on real economic activity and introduces economic \nstructure via the relationship between potential output \nand capacity utilisation in the manufacturing sector \n(South African Reserve Bank Working Paper Series \nNo. WP/14/08).\n4.\t The repurchase rate (repo rate) is the official monetary \npolicy instrument and represents the interest rate at \nwhich banks borrow money from the SARB. Although \nthe rate is held constant over the forecast period, this \nassumption is relaxed in alternative scenarios where, for \ninstance, the policy rate responds to deviations of output \nfrom its potential and the gap between future inflation \nand the inflation target, that is, via a stylised ‘Taylor rule’; \none that is based on market expectations of the future \npath of the policy rate, and other paths as requested.\n53\nMonetary Policy Review October 2017\nGlossary\nAdvanced economies: Advanced economies are countries \nwith high levels of gross domestic product per capita. These \ncountries are sometimes described as industrialised. With \nfurther growth, however, they have tended to diversify, with \nparticular emphasis on services sectors.\nBalance of payments: This is a record of transactions \nbetween the home country and the rest of the world over a \nspecific period of time. It includes the current and financial \naccounts. See also ‘current account’ below.\nBudget deficit: A budget deficit indicates the extent to which \ngovernment expenditure exceeds government revenue (a \nbudget surplus occurs when revenue exceeds expenditure).\nBusiness and consumer confidence: These are economic \nindicators that measure the state of optimism about the \neconomy and its prospects among business managers and \nconsumers.\nCommodity prices: Commodities can refer to energy, \nagriculture, metals and minerals. Major South African-\nproduced commodities include platinum and gold.\nConsumer price index (CPI): The CPI provides an indication \nof aggregate price changes in the domestic economy. The \nindex is calculated using a number of categories forming \na representative set of goods and services bought by \nconsumers.\nCore inflation: Core generally refers to underlying inflation, \nexcluding volatile elements (e.g. food and energy prices). \nThe SARB’s forecasts and discussions refer to headline CPI \nexcluding food, non-alcoholic beverages, fuel and electricity \nprices.\nCrude oil price: This is the US dollar price per barrel of \nunrefined oil (Brent crude refers to unrefined North Sea oil).\nCurrent account: The current account of the balance of \npayments consists of net exports (exports less imports) \nin the trade account, as well as the services, income and \ncurrent transfer account.\nEmerging markets: Emerging markets are countries with \nlow to middle income per capita. They are advancing rapidly \nand are integrating with global (product and capital) markets.\nExchange rate depreciation (appreciation): Exchange rate \ndepreciation (appreciation) refers to a decrease (increase) in \nthe value of a currency relative to another currency.\nExchange rate pass-through: This is the effect of exchange \nrate changes on domestic inflation (i.e. the percentage \nchange in domestic CPI due to a change in the exchange \nrate). Changes in the exchange rate affect import prices, \nwhich in turn affect domestic consumer prices and inflation.\nFlexible inflation targeting: This refers to inflation-targeting \nregimes that consider changes in inflation and other variables \naffecting the real economy in the short term. Under strict \ninflation targeting only inflation matters, but flexible inflation-\ntargeting takes into account other variables, such as output.\nForecast horizon: This is the future period over which the \nSARB generates its forecasts, typically between two and \nthree years.\nGross domestic product (GDP): GDP is the total market \nvalue of all goods and services produced in a country. It \nincludes total consumption expenditure, capital formation, \ngovernment consumption expenditure and the value of \nexports less the value of imports.\nGross fixed capital formation (investment): The value of \nacquisitions of capital goods (e.g. machinery, equipment \nand buildings) by firms, adjusted for disposals, constitutes \ngross fixed capital formation.\nHeadline consumer price index (CPI): Headline CPI refers \nto CPI for all urban areas that is released monthly by \nStatistics South Africa. Headline CPI is a measure of price \nlevels in all urban areas. The 12-month percentage change \nin headline CPI is referred to as ‘headline CPI inflation’ and \nreflects changes in the cost of living. This is the official \ninflation measure for South Africa.\nHousehold consumption: This is the amount of money \nspent by households on consumer goods and services.\nInflation (growth) outlook: This outlook refers to the evolution \nof future inflation (growth) over the forecast horizon.\nInflation targeting: This is a monetary policy framework \nused by central banks to steer actual inflation towards an \ninflation target level or range.\nMedian: This is a statistical term used to describe the \nobserved number that separates ordered observations in half.\nMonetary policy normalisation: This refers to the unwinding \nof unusually accommodative monetary policies. It could \nalso mean adjusting the economy’s policy rate towards its \nreal neutral policy rate.\nNominal effective exchange rate (NEER): A NEER is an \nindex that expresses the value of a country’s currency \nrelative to a basket of other (trading partner) currencies. An \nincrease (decrease) in the effective exchange rate indicates \na strengthening (weakening) of the domestic currency with \nrespect to the selected basket of currencies. The weighted \naverage exchange rate of the rand is calculated against \n20 currencies. The weights of the five major currencies \nare as follows: euro (29.26%), Chinese yuan (20.54%), \nUS dollar (13.72%), Japanese yen (6.03%) and the British \npound (5.82%). Index: 2010 = 100. See ‘Real effective \nexchange rate’.\nMonetary Policy Review October 2017\n54\nOutput gap/potential growth: Potential growth is the \nrate of GDP growth that could theoretically be achieved \nif all productive assets in the economy were employed \nin a stable inflation environment. The output gap is the \ndifference between actual growth and potential growth, \nwhich accumulates over time. If this is negative, then the \neconomy is viewed to be underperforming and demand \npressures on inflation are low. If the output gap is positive, \nthe economy is viewed to be overheating and demand \npressures are inflationary.\nProducer price index (PPI): This index measures changes \nin the prices of goods at the factory gate. Stats SA currently \nproduces five different indices that measure price changes \nat different stages of production. Headline PPI is the index \nfor final manufactured goods. PPI measures indicate \npotential pressure on consumer prices.\nProductivity: Productivity indicates the amount of goods \nand services produced in relation to the resources utilised \nin the form of labour and capital.\nPurchasing power parity (PPP): PPP is based on the law \nof one price, assuming that in the long run, exchange rates \nwill adjust so that purchasing power across countries is \napproximately the same. It is often used to make cross-\ncountry comparisons without the distortionary impact of \nvolatile spot exchange rates.\nReal effective exchange rate (REER): The REER is the \nNEER adjusted for inflation differentials between South \nAfrica and its main trading partners. See ‘Nominal effective \nexchange rate’.\nRepurchase (repo) rate: This is the policy rate that is set \nby the Monetary Policy Committee (MPC). It is the rate that \ncommercial banks pay to borrow money from the SARB.\nReal repo rate: This is the nominal repo rate, as set by the \nMPC, adjusted for expected inflation.\nTaper tantrum: The term ‘taper tantrum’ is widely used \nto describe the strong reaction of global financial markets \nto comments by the US Federal Reserve (Fed) chairman \nin May 2013 that the Fed would likely start to reduce (or \n‘taper’) the pace of its asset purchases later that year.\nTerms of trade: This refers to the ratio of export prices to \nimport prices.\nUnit labour costs: A unit labour cost is the labour cost to \nproduce one ‘unit’ of output. This is calculated as the total \nwages and salaries in the non-agricultural sector divided by \nthe real value added at basic prices in the non-agricultural \nsector of the economy.\n55\nMonetary Policy Review October 2017\nAbbreviations\nBER \t\n\t\nBureau for Economic Research \nBIS \t\n\t\nBank for International Settlements \nCPI \t\n\t\nconsumer price index \nECB \t\n\t\nEuropean Central Bank \nFed \t\n\t\nUnited States Federal Reserve \nFNB \t\n\t\nFirst National Bank \nFOMC\t\n \t\nFederal Open Market Committee \nFRA\t\n\t\nforward rate agreement\nG3 \t\n\t\nGroup of Three \nGDP \t\n\t\ngross domestic product \nGFCG\t\n\t\ngross fixed capital formation\nIMF \t\n\t\nInternational Monetary Fund \nMPC \t\n\t\nMonetary Policy Committee \nMPR \t\n\t\nMonetary Policy Review \nMTBPS \t\n\t\nMedium Term Budget Policy Statement \nNAB \t\n\t\nnon-alcoholic beverage\nNERSA \t\n\t\nNational Energy Regulator of South Africa \nNIDS\t\n\t\nNational Income Dynamics Study\nNRIR\t\n\t\nneutral real interest rate\nOPEC \t\n\t\nOrganization of the Petroleum \nExporting Countries \nPCE \t\n\t\npersonal consumption expenditure \nPPP\t\n\t\npurchasing power parity \nQPM\t\n\t\nQuarterly Projection Model\nrepo (rate) \t\t\nrepurchase (rate) \nRMB \t\n\t\nRand Merchant Bank \nRMSE \t\n\t\nroot mean square error \nS&P \t\n\t\nStandard & Poor’s \nSACCI\t\n\t\nSouth African Chamber of Commerce \nand Industry\nSALDRU\t\n\t\nSouth African Labour and \nDevelopment Research Unit\nSARB \t\n\t\nSouth African Reserve Bank \nSOE\t\n\t\nstate-owned enterprise\nStats SA \t \t\nStatistics South Africa \nUK \t\n\t\nUnited Kingdom \nULC \t\n\t\nunit labour cost \nUS\t\n\t\nUnited States\nVAT\t\n\t\nvalue-added tax\nVIX\t\n\t\nChicago Board Options \nExchange Volatility Index\nZAR\t\n\t\nSouth African rand", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monetary_Policy_Reports/MPROctober2017.pdf"}
{"doc_id": "27f37fe550bbc9d565ee97fdced25932", "text": "Vol. 27 No. 34 \n \nWeek Ending \n22nd August 2025 \n \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n8. \nTOBACCO SALES ................................................................. 8 \n \n \n \n \n1 \n1. OVERVIEW \nThis report provides an overview of monetary and financial developments for the week ending 22nd August \n2025, focusing on domestic money and capital markets, national payment systems, exchange rates and \ninternational commodity prices. \nLocal currency savings and deposit rates increased for all tenors during the week ending 22 August 2025, \nexcept for maximum rates on savings, which declined. Foreign currency savings and deposit rates also \nincreased for all tenors. During the same week, individual lending rates in local currency increased, while \nmaximum corporate rates declined. Foreign currency lending rates increased for all clients, save for maximum \nindividual rates which declined, and minimum corporate rates which remained unchanged. \nThe Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) experienced bullish \nsentiments. Resultantly, the ZSE and VFEX All share Indices added 2.15% and 0.11% to close at 205.16 \npoints and 122.90 points, respectively. \nThe total value of transactions processed through the National Payment Systems platforms decreased by \n10.25%, from ZiG33.46 billion reported in the previous week to ZiG30.03 billion. This was attributable to the \ndecline in values of transactions processed through RTGS, POS, ATM Mobile banking, Mobile money and \nZIPIT mobile systems. In tandem, the volume of transactions processed decreased by 7.68%, from 14.99 \nmillion in the previous week to 13.83 million during the week under review. \nOn the interbank market, the average ZiG/US$ exchange rate appreciated by 0.05%, from ZiG26.77/US$1 in \nthe prior week to ZiG26.76/US$1, during the week ending 22nd of August 2025. \nThe week under analysis saw the average prices for gold, platinum and palladium decline, while prices for \nnickel and lithium firmed. Gold and platinum prices fell amid a strengthening US dollar. The decline in \npalladium prices was influenced by the weakening industrial demand, especially from the automotive sector, \ncoupled with the potential easing of supply constraints. \nThe surge in the price of lithium was on account of supply disruptions in China, the top producer of the energy \ntransition metal. Nickel prices rose owing to stabilisation or minor reductions in the London Metal Exchange \n(LME) warehouse inventories. \nAs of the 117th day of the 2025 tobacco selling season, total sales stood at 354.52 million kilograms, up from \n231.65 million kilograms sold during the same period in 2024. Sales revenue rose by 48.39% to US$1.18 \nbillion during the period under analysis, from US$0.79 billion recorded for the corresponding period in 2024. \nThe average price of the golden leaf stood at US$3.32 per kg in the reporting period, down from US$3.43 per \nkg recorded in the same period in 2024. \n \n \n \n \n \n \n2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n01 August 2025 \n08 August 2025 \n15 August 2025 \n22 August 2025 \nSavings \n \n \n \n \nMinimum \n3.94 \n3.75 \n3.75 \n3.91 \nMaximum \n4.28 \n4.08 \n4.08 \n4.03 \n1-month deposit \n \n \n \n \nMinimum \n5.79 \n6.63 \n6.63 \n7.46 \nMaximum \n9.24 \n10.49 \n10.49 \n11.52 \n3-months deposit \n \n \n \n \nMinimum \n6.07 \n6.90 \n6.90 \n7.73 \nMaximum \n9.43 \n10.68 \n10.68 \n11.65 \n6-months deposit \n \n \n \n \nMinimum \n5.67 \n6.51 \n6.51 \n7.34 \nMaximum \n9.03 \n10.28 \n10.28 \n11.26 \n12-months deposit \n \n \n \n \nMinimum \n5.68 \n6.52 \n6.52 \n7.35 \nMaximum \n9.04 \n10.99 \n10.99 \n12.66 \nOver 1 year \n \n \n \n \nMinimum \n5.69 \n6.53 \n6.53 \n7.36 \nMaximum \n9.06 \n11.00 \n11.00 \n12.67 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n01 August 2025 \n08 August 2025 \n15 August 2025 \n22 August 2025 \nSavings \n \n \n \n \nMinimum \n1.67 \n1.61 \n1.61 \n1.75 \nMaximum \n1.86 \n1.81 \n1.81 \n1.84 \n1-month deposit \n \n \n \n \nMinimum \n3.78 \n3.92 \n3.92 \n4.08 \nMaximum \n6.18 \n6.59 \n6.59 \n6.93 \n3-month deposit \n \n \n \n \nMinimum \n4.32 \n4.46 \n4.46 \n4.52 \nMaximum \n6.92 \n7.45 \n7.45 \n7.78 \n6-month deposit \n \n \n \n \nMinimum \n4.12 \n4.26 \n4.26 \n4.83 \nMaximum \n7.04 \n7.57 \n7.57 \n7.75 \n12-Month deposit \n \n \n \n \nMinimum \n4.19 \n4.56 \n4.56 \n4.83 \nMaximum \n6.78 \n7.47 \n7.47 \n7.75 \nOver 1 year \n \n \n \n \nMinimum \n4.31 \n4.67 \n4.67 \n4.89 \nMaximum \n6.94 \n7.64 \n7.64 \n7.92 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n \n3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n01 August 2025 \n08 August 2025 \n15 August 2025 \n22 August 2025 \nIndividuals \n \n \n \n \nMinimum \n42.50 \n43.05 \n43.05 \n43.22 \nMaximum \n48.23 \n48.84 \n48.84 \n48.90 \nCorporates \n \n \n \n \nMinimum \n40.46 \n40.36 \n40.36 \n40.36 \nMaximum \n46.43 \n46.23 \n46.23 \n46.20 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n01 August 2025 \n08 August 2025 \n15 August 2025 \n22 August 2025 \nIndividuals \n \n \n \n \nMinimum \n13.45 \n13.49 \n13.49 \n13.52 \nMaximum \n17.65 \n17.58 \n17.58 \n17.55 \nCorporates \n \n \n \n \nMinimum \n10.27 \n10.36 \n10.36 \n10.36 \nMaximum \n15.80 \n15.81 \n15.81 \n15.83 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending \nrates \n01 August 2025 \n08 August 2025 \n15 August 2025 \n22 August 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n3. EQUITY MARKETS \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG billion) \nMarket \nTurnover \n(ZiG million) \nVolume of \nShares \n(million) \n01-Aug-25 \n208.42 \n203.47 \n209.32 \n248.00 \n100.11 \n144.85 \n64.88 \n69.66 \n503.32 \n08-Aug-25 \n203.32 \n199.20 \n203.84 \n238.62 \n100.12 \n145.31 \n63.70 \n60.76 \n236.80 \n15-Aug-25 \n200.84 \n196.22 \n200.89 \n238.18 \n100.12 \n145.31 \n62.94 \n58.84 \n10.624 \n22-Aug-25 \n205.16 \n201.33 \n205.06 \n239.29 \n100.12 \n145.31 \n64.29 \n161.76 \n39.28 \nWeekly \nChange (%) \n2.15 \n2.60 \n2.08 \n0.47 \n0.00 \n0.00 \n2.14 \n174.92 \n269.73 \nSource: Zimbabwe Stock Exchange, 2025 \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n01-Aug-25 \n121.25 \n1.41 \n1.03 \n0.73 \n08-Aug-25 \n122.87 \n1.43 \n0.65 \n2.21 \n15-Aug-25 \n122.76 \n1.43 \n0.37 \n1.90 \n22-Aug-25 \n122.90 \n1.43 \n1.32 \n5.01 \nWeekly Change (%) \n0.11 \n0.00 \n256.76 \n163.68 \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n \n \n \n \n4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n \n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n40\n45\n50\n55\n60\n65\n70\n75\n80\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\nZiG Billion\nZSE Market Capitalisation \n100\n105\n110\n115\n120\n125\n130\n135\n140\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\nIndex\nVFEX All Share Index \n0\n200\n400\n600\n800\n1000\n1200\n1400\n1600\n1800\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\nUS$ Thousand\nVFEX Market Turnover \n1,15\n1,2\n1,25\n1,3\n1,35\n1,4\n1,45\n1,5\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\nUS$ Billion\nVFEX Market Capitalisation \n0\n50 000\n100 000\n150 000\n200 000\n250 000\n300 000\n23-Jun-25\n30-Jun-25\n07-Jul-25\n14-Jul-25\n21-Jul-25\n28-Jul-25\n04-Aug-25\n11-Aug-25\n18-Aug-25\nZiG Thousands\nZSE Market Turnover \n \n \n5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n01 Aug 2025 \n08-Aug 2025 \n15-Aug 2025 \n22-Aug 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.55 \n1.55 \n1.55 \n1.55 \nPetrol Blend E5/ litre \n1.56 \n1.56 \n1.55 \n1.55 \nLP Gas / kg \n1.57 \n1.57 \n1.51 \n1.51 \n \n \n \n \n \nInternational Energy \nPrices (Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n70.86 \n67.34 \n66.01 \n66.56 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n18-Aug-25 \n3,335.50 \n2.73 \n3.01 \n0.1019 \n0.1126 \n19-Aug-25 \n3,332.40 \n2.72 \n3.01 \n0.1018 \n0.1125 \n20-Aug-25 \n3,334.45 \n2.73 \n3.01 \n0.1018 \n0.1126 \n21-Aug-25 \n3,344.65 \n2.73 \n3.02 \n0.1022 \n0.1129 \n22-Aug-25 \n3,338.30 \n2.73 \n3.01 \n0.1020 \n0.1127 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n15 Aug 2025 \nWEEK ENDING \n22 August 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n25,981,996,779.80 \n23,709,639,049.56 \n(8.75) \nOf which ZiG \n8,266,525,822.69 \n6,607,334,531.76 \n(20.07) \nOf which US$ transactions \n(ZiG Equivalent) \n17,715,470,957.11 \n \n17,102,304,517.80 \n \n(3.46) \nPOS \n1,886,769,692.86 \n1,648,908,901.44 \n(12.61) \nATM \n1,426,010,324.96 \n1,238,041,639.10 \n(13.18) \nMOBILE BANKING \n294,161,456.02 \n235,204,263.00 \n(20.02) \nMOBILE MONEY \n3,664,032,223.31 \n3,002,452,015.64 \n(18.06) \nZIPIT MOBILE \n209,262,520.13 \n198,359,004.52 \n(5.21) \nTOTAL \n33,462,232,997.09 \n30,032,604,873.25 \n(10.25) \n \nVOLUMES \n \nRTGS \n107,585 \n171,657 \n59.55 \nOf which ZiG \n36,265 \n62,258 \n71.68 \nOf which US$ \n71,320 \n109,399 \n53.39 \nPOS \n1,618,504 \n1,436,909 \n(11.22) \nATM \n170,905 \n162,202 \n(5.09) \nMOBILE BANKING \n356,835 \n277,805 \n(22.15) \nMOBILE MONEY \n12,518,248 \n11,591,825 \n(7.40) \nZIPIT MOBILE \n213,280 \n193,719 \n(9.17) \nTOTAL \n14,985,357 \n13,834,117 \n(7.68) \n \n \n6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n18-Aug-25 \n19-Aug-25 \n20-Aug-25 \n21-Aug-25 \n22-Aug-25 \n1.00Oz \n \n \n \n \n \nUS$ \n3,502.28 \n3,499.02 \n3,501.17 \n3,511.88 \n3,505.22 \nZiG \n93,749.95 \n93,636.22 \n93,684.72 \n93,990.27 \n93,766.60 \n0.50Oz \n \n \n \n \n \nUS$ \n1,751.14 \n1,749.51 \n1,750.59 \n1,755.94 \n1,752.61 \nZiG \n46,874.97 \n46,818.11 \n \n46,842.36 \n46,995.13 \n46,883.30 \n0.25Oz \n \n \n \n \n \nUS$ \n875.57 \n874.76 \n875.29 \n877.97 \n876.30 \nZiG \n23,437.49 \n23,409.06 \n23,421.18 \n23,497.57 \n23,441.65 \n0.10Oz \n \n \n \n \n \nUS$ \n350.23 \n349.90 \n350.12 \n351.19 \n350.52 \nZiG \n9,374.99 \n9,363.62 \n9,368.47 \n9,399.03 \n9,376.66 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(13 Aug – 15 Aug) \n \n26.7734 \n \n1.5208 \n \n36.2352 \n \n1.8829 \n \n31.2539 \n18-Aug \n26.7683 \n1.5232 \n36.3006 \n1.8837 \n31.3323 \n19-Aug \n26.7607 \n1.5152 \n36.1486 \n1.8805 \n31.2150 \n20-Aug \n26.7581 \n1.5101 \n36.0700 \n1.8804 \n31.1370 \n21-Aug \n26.7635 \n1.5101 \n36.0037 \n1.8755 \n31.1715 \n22-Aug \n26.7506 \n1.5072 \n35.8366 \n1.8772 \n30.9999 \nWeekly Average \n(18 Aug – 22 Aug) \n26.7602 \n1.5132 \n36.0719 \n1.8795 \n31.1711 \nAppr (-)/Depr (+) (%) of the \nZWG \n(0.05) \n(0.50) \n(0.45) \n(0.18) \n(0.26) \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(11 Aug – 15 Aug) \n3,352.53 \n1,343.74 \n1,146.30 \n14,466.60 \n8,172.60 \n18-Aug \n3,335.10 \n1,333.00 \n1,125.00 \n15,151.00 \n8,500.00 \n19-Aug \n3,324.30 \n1,320.00 \n1,118.00 \n15,006.00 \n8,560.00 \n20-Aug \n3,337.60 \n1,337.00 \n1,123.00 \n15,008.00 \n8,620.00 \n21-Aug \n3,329.50 \n1,350.00 \n1,128.00 \n14,929.00 \n8,680.00 \n22-Aug \n3,367.00 \n1,363.00 \n1,132.00 \n15,100.00 \n8,740.00 \nWeekly Average \n(18 Aug – 22 Aug) \n3,338.70 \n \n1,340.60 \n1,125.20 \n15,038.80 \n8,620.00 \nWeekly change (%) \n(0.41) \n(0.23) \n(1.84) \n3.96 \n5.47 \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n7 \nFigure 3: Weekly International Commodity Price Developments (13th June 2025– 22nd August 2025) \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n400,00\n600,00\n800,00\n1000,00\n1200,00\n1400,00\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\nUS$/oz\nPalladium\n980\n1 080\n1 180\n1 280\n1 380\n1 480\n1 580\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\nUS$/tonne\nPlatinum\n7 500\n7 800\n8 100\n8 400\n8 700\n9 000\n9 300\n9 600\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\nUS$/tonne\nLithium \n14 400\n14 600\n14 800\n15 000\n15 200\n15 400\n15 600\n15 800\n16 000\n16 200\n16 400\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\nUS$/tonne\nNickel\n50\n55\n60\n65\n70\n75\n80\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\nUS$/barrel\nCrude oil \n2 900\n3 150\n3 400\n3 650\n3 900\n13-Jun\n20-Jun\n27-Jun\n04-Jul\n11-Jul\n18-Jul\n25-Jul\n01-Aug\n08-Aug\n15-Aug\n22-Aug\nUS$/oz\nGold\n \n \n8 \n8. TOBACCO SALES \n \nWeekly Cumulative Tobacco Sales: Day 117 (22nd August 2025) \n \n2025 \n2024 \nVariance (%) \nCumulative Quantity Sold (Kgs) \n 354,520,303 \n231,654,087 \n53.04 \nAverage Price (US$/kg) \n 3.32 \n 3.43 \n(3.21) \nCumulative value (US$) \n1,177,538,793 \n793,547,959 \n48.39 \nSource: Tobacco Industry and Marketing Board (TIMB), 2025 \n \n \n \nRESERVE BANK OF ZIMBABWE \nAUGUST 2025", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_22_August_2025_Volume_27_Number_34.pdf"}
{"doc_id": "49a43b4fa4d6a079cba1cc34a23fdbf6", "text": "MPC Statement 25 May 2023 \nPage 1 \n \n \n \n \nPRESS STATEMENT \n25 May 2023 \n \n \nSTATEMENT OF THE MONETARY POLICY COMMITTEE \n \nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank \nAs we approach the mid-point of the year, persistent inflation and elevated financial \nstability risks continue to mark a somewhat improved global growth outlook. South \nAfrica’s economic conditions, however, remain poor. \nGrowth prospects in Asia and Europe, while improved, remain negatively affected by \nRussia’s war in the Ukraine and heightened geo-political tensions. The United States \ncontinues to exhibit economic resilience but also specific financial fragilities. More \nrecent data suggests China’s growth performance will remain relatively modest, with \nlittle benefit to commodity prices.1 In the developing world, many economies face high \ndebt levels, weaker economic growth and prolonged adverse financing conditions. \n \n1 Commodity export prices in USD terms fell by 0.9% in 2022. South Africa’s commodity export index is forecast \nto decline by 23.7% this year, a further 10.5% in 2024, and an additional 5.4% in 2025. \nMPC Statement 25 May 2023 \nPage 2 \n \nWhile goods price inflation has eased in much of the world, core inflation continues to \nrise, keeping consumer price inflation from falling more sharply. We expect global \nfinancial markets to remain volatile and policy rates elevated. \nTaking these and other factors into account, the SARB’s forecast for global growth in \n2023 and 2024 is revised higher to 2.4% (from 2.0%), and to 2.7% (from 2.5%), \nrespectively.2 The April World Economic Outlook of the International Monetary Fund \n(IMF) forecasts global growth at 2.8% and 3.0% for 2023 and 2024. \nFor 2023, the Bank’s forecast for GDP growth is slightly higher than in March, at 0.3%. \nEnergy and logistical constraints remain binding on South Africa’s growth outlook, \nlimiting economic activity and increase costs. We estimate loadshedding alone to \ndeduct 2 percentage points from growth this year. \nHousehold spending is expected to grow very modestly in real terms, in line with a \npositive but weak rise in real disposable income. Investment by the private sector \nremains positive, in part reflecting efforts to overcome constraints in energy and \ntransport supply.3 \nOur GDP growth forecast for 2024 and 2025 is unchanged from the previous meeting, \nat 1.0% and 1.1%, respectively.4 \nEconomic growth has been volatile for some time and prospects for growth remain \nuncertain. An improvement in logistics and a sustained reduction in load-shedding, or \n \n2 Global growth in the QPM model is a trade-weighted average of South Africa’s trading partners. \n3 The number of days of expected load-shedding in 2023 is higher at 280 days, 150 days and 100 days, \nrespectively in 2023, 2024, and 2025. Estimates of the average stages of load-shedding is multiplied by the \nnumber of days and then multiplied by the cost to GDP per stage-day. The cost per stage has been revised \nlower for stages 1 and 2. In nominal terms, these costs vary between R0-R1.2 million for stages 1 and 2 and up \nto R204-R899 million for stages 3 to 6, when continued on a 24 hour basis on weekdays. \n4 The growth forecast includes expected changes in the policy rate as given by the QPM. \nMPC Statement 25 May 2023 \nPage 3 \n \nincreased energy supply from alternative sources, would significantly raise growth. \nThe rand’s weakness provides some short-term benefit to the tradable sector. \nConversely, alongside more modest global growth rates and a lower terms of trade, \nhigher import prices and headline inflation create downside risks to growth. Overall, \ndomestic and global prospects appear to be highly sensitive to new shocks. \nAt present, we assess the risks to the medium-term domestic growth outlook to be \nbalanced. \nTurning to inflation prospects, our current growth forecast leaves the output gap \naround zero over the next three years. This implies very modest positive pressures on \ninflation from the forecast growth rate.5 \nSouth Africa’s external financing needs however are expected to rise. Despite broadly \nstable oil prices, import price inflation is higher. Falling export commodity prices and \nweaker growth in export volumes are expected to increase the current account deficit \nto 2.5% of GDP this year, before expanding it further to 3.1% and 3.6% of GDP, \nrespectively, in 2024 and 2025.6 \nWith reduced tax revenue, higher public sector compensation and state-owned \nenterprise financial needs, will put additional pressure on financing conditions for rand-\ndenominated bonds. The risk premium charged on rand-denominated borrowing has \nincreased sharply. Ten-year bond yields reached a high of 12.38% on the 23rd May, \n \n5 Potential growth is unchanged at -0.2%, 0.8% for 2024 and 1.0% for 2025. \n6 In March, a current account balance of about -2.7% of GDP was expected for the forecast period. Exports are \nforecast to grow in real terms by only 1.8% this year and 2.4% in 2024. Our oil price forecast is also slightly \nlower than in March, averaging US$85 per barrel in 2023, and unchanged at US$85 for 2024 and US$80 for \n2025. \nMPC Statement 25 May 2023 \nPage 4 \n \nand currently trade at about 12.3%, despite the expected moderation of inflation over \nthe forecast period. \nThe rand has weakened over the past year, with further sharp depreciation in recent \nweeks. The implied starting point for the rand forecast is R18.68 (23q2) to the US \ndollar, compared with R17.80 at the time of the previous meeting. Currency markets \nare expected to remain volatile and sensitive to idiosyncratic shocks. \nAt the global level, consumer price inflation in 2023 is forecast to be 7.0%, compared \nto 8.7% in 2022.7 In the G3 economies, despite an easing in headline inflation, price \npressures remain clearly evident in measures of core inflation, services and wages.8 \nOur estimate for inflation in the G3 in 2023 is higher at 4.3% (up from 4.2%) and is \nunchanged at 2.1% in 2024 and 2025.9 \nThe rise in South Africa’s headline inflation rate has been shaped primarily by fuel, \nelectricity and food price inflation. Compared to the previous meeting, fuel and \nelectricity price inflation is somewhat lower and food price inflation higher. \nFuel price inflation is expected to be -2.0% in 2023 (down from -0.6%). The electricity \nprice forecast is also lower at 11.6% this year, 13.4% in 2024, and unchanged at \n10.9% in 2025. \nLocal food price inflation is revised up again, in part due to the lagged impact of the \nweaker exchange rate and despite global food prices falling in dollar terms.10 Food \n \n7 IMF, World Economic Outlook, April 2023. \n8 In the G3 economies, consumer prices rose by 7.4% in 2022. \n9 The G3 comprises the United States, the Eurozone, and Japan. The latest CPI inflation in the G3 sits at 4.9%, \n7.0% and 3.5%. \n10 This year, global food inflation is expected to be in deflation of -9.9% (down from -8.7% in March) and after \nregistering 14.3% inflation in 2022. \nMPC Statement 25 May 2023 \nPage 5 \n \nprice inflation is now expected to be 10.8% in 2023 (up from 9.9%) and 5.0% in 2024 \n(up from 4.5%). \nOur forecast for core inflation is revised up to 5.3% in 2023 (previously 5.1%), 5.0% \n(from 4.8%) and 4.6% (from 4.5%) in 2024 and 2025, respectively. Services price \ninflation in 2023 is expected to come in at 4.9%, unchanged from the previous meeting. \nCore goods inflation, however, is higher for this year at 6.3% (up from 5.9%).11 Growth \nin average salaries and unit labour costs is higher in 2023 and 2024 and slightly lower \nin 2025.12 \nWith core goods and food higher in the near term, headline inflation for 2023 is revised \nup to 6.2% (from 6.0%). Headline inflation for 2024 also increases to 5.1%, before \nmoderating to 4.5% in 2025 on the back of easing food and fuel inflation. \nRisks to the inflation outlook are assessed to the upside. Despite easing of producer \nprice and food inflation, global price inflation remains high. Global oil markets are \nexpected to remain tight, with upside risk to prices. Electricity prices and other \nadministered prices continue to present clear short and medium-term risks. Domestic \nfood price inflation continues to be elevated, and the risk of drier weather conditions \nin coming months has increased. Load-shedding may additionally have broader price \neffects on the cost of doing business and the cost of living, in particular as diesel \nconsumption increases. Given sticky petrol and food price inflation, considerable risk \nstill attaches to the forecast for average salaries. \n \n11 Core goods refers to total CPI goods excluding food and NAB, fuel and electricity, whereas services include \nall surveyed services within the CPI basket. Core goods inflation is expected to be 5.2% in 2024 and 4.5% in \n2025. \n12 Average salaries are expected to rise by 6.8% in 2023, 6.5% in 2024, and by 4.9% in 2025, compared to 6.4%, \n6.2%, and 5.0%, at the time of the March meeting, respectively. Unit labour costs are forecast to rise by 6.9%, \n6.1% and 4.3%, respectively, in 2023, 2024, and 2025. \nMPC Statement 25 May 2023 \nPage 6 \n \nAverage interest rate levels in major economies are higher than were projected in \nMarch.13 Tighter global financial conditions raise the risk profiles of economies \nneeding foreign capital, leading generally to weaker currencies. Given upside inflation \nrisks, larger domestic and external financing needs, and load-shedding, further \ncurrency weakness appears likely. \nHigher inflation outcomes have resulted in elevated inflation expectations.14 \nExpectations for inflation in 2023 based on market surveys are 5.9%.15 Long-term \ninflation expectations derived from the 5-year break-even rates in the bond market \nhave sharply increased to about 6.5% (up from 5.3%).16 \nHeadline inflation is forecast to remain above the upper end of the inflation target range \nuntil the third quarter of this year, and will only sustainably revert to the mid-point of \nthe target range by the second quarter of 2025. The forecast takes into account the \npolicy rate trajectory indicated by the Bank’s Quarterly Projection Model (QPM). \nAgainst this backdrop, the MPC decided to increase the repurchase rate by 50 basis \npoints to 8.25% per year, with effect from the 26th of May 2023. The decision was \nunanimous. \nAt the current repurchase rate level, policy is restrictive, consistent with elevated \ninflation and risks. The policy stance aims to anchor inflation expectations more firmly \n \n13 G3 interest rates average 3.8% in 2023, 3.6% in 2024, and 2.5% in 2025. \n14 The Q2 survey is released in July. The BER Q1 2023 survey of inflation expectations indicated inflation at \n6.3% in 2023 (up from 6.1% in Q4) and 5.8% for 2024 (up from 5.6% in Q4) and 5.5% in 2025. \n15 At the median, market analysts (Reuters Econometer) in May expect inflation to be higher at 5.9% (from \n5.8% in March) in 2023, 4.9% in 2024 (up from 4.7%) and 4.6% in 2025 (down from 4.7%). \n16 Market-based rates are calculated from the break-even inflation rate, which is the yield differential between \nconventional and inflation-linked bonds. These now sit at about 6.24% for the 5-year and 7.0% on the 10-year \nbreakeven. 15-year break-even inflation sits at 7.76%. \nMPC Statement 25 May 2023 \nPage 7 \n \naround the mid-point of the target band and to increase confidence of attaining the \ninflation target sustainably over time.17 \nGuiding inflation back towards the mid-point of the target band can reduce the \neconomic costs of high inflation and achieve lower interest rates in the future. \nReaching a prudent public debt level, increasing the supply of energy, moderating \nadministered price inflation and keeping wage growth in line with productivity gains \nwould enhance the effectiveness of monetary policy and its transmission to the \nbroader economy. \nAs usual, the repo rate projection from the QPM remains a broad policy guide, \nchanging from meeting to meeting in response to new data and risks. Economic and \nfinancial conditions are expected to remain more volatile for the foreseeable future. In \nthis uncertain environment, monetary policy decisions will continue to be data \ndependent and sensitive to the balance of risks to the outlook. The MPC will seek to \nlook through temporary price shocks and focus on potential second round effects and \nthe risks of de-anchoring inflation expectations. The Bank will continue to closely \nmonitor funding markets for stress. \n \nLesetja Kganyago \nGOVERNOR \nThe next statement of the Monetary Policy Committee will be released on 20 July \n2023. \n \n17 The forecasted trajectory for the repurchase rate implies a rise in the inflation-adjusted repo rate from -2.1% \nin 2022, to 1.8% in 2023, and 2.4% in 2024. The real repo level for 2025 is expected to be 2.5%. The real \nrepurchase rates calculated here are based on the 1-quarter ahead inflation forecast and are annual average \nrates. \nMPC Statement 25 May 2023 \nPage 8 \n \n \nContact person: \nThoraya Pandy \n0824168416 \nmedia@resbank.co.za", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/MPC_Statements/Statement of the Monetary Policy Committee May 2023 .pdf"}
{"doc_id": "ebc193fffdc6a5a16328261ce43b47e0", "text": "Vol. 27 No. 51 \n \nWeek Ending \n19th December 2025 \n \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n \n1 \n1. OVERVIEW \n \nThis bulletin highlights key developments in the monetary and financial sectors for the week ending 19 \nDecember 2025. It covers developments on domestic money and capital markets, national payment systems, \nexchange rates and global commodity prices. \nLocal currency deposit interest rates remained unchanged across all tenors. The foreign currency deposit \ninterest rates also remained constant, except for maximum deposits rates for 1-month and 12-month maturities \nwhich moved up. The local currency lending rates declined except for individual client maximum lending \nrates which increased. The foreign currency minimum interest rates for both individual and corporate clients \ndeclined, while maximum lending rates increased. \nTrading activity on both exchange markets was subdued during the week ending 19th December 2025, ahead \nof the festive holidays. Consequently, both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock \nExchange (VFEX) traded negatively, losing 0.20% and 0.14%, respectively, to close the week under review \nat 249.10 points and 169.17 points. \nThe total value of transactions processed through the National Payment Systems platforms increased by \n14.54% from ZiG48.10 billion reported in the previous week to ZiG55.09 billion. The volume of transactions \nprocessed decreased by 4.52% from 17.66 million to 16.86 million during the same week. The largest share \nof transactional values was processed through the Real-Time Gross Settlement (RTGS) system, accounting \nfor 84.54%, while mobile money accounted for 84.25% of the transaction volume. \nThe Zimbabwe Gold Currency (ZiG) appreciated by 0.02% against the US dollar on the interbank market to \nZiG26.11 per US$1 from an average of ZiG26.12 per US$1 recorded in the previous week. \nWeekly average international commodity prices for gold, platinum, palladium and lithium firmed, while prices \nfor nickel and brent crude oil retreated during the week ending 19th December 2025. Nickel prices declined on \naccount of reduced demand resulting from slowing Chinese industrial activity. Brent crude oil prices decline \nis attributable to the anticipated impact of US led diplomatic efforts for a ceasefire between Russia and Ukraine \nboosting investor expectations of future oil supply increases. \nThe increase in gold prices was underpinned by the safe-haven demand appeal status for the yellow metal that \nis expected to remain strong amid geopolitical tensions, most recently between the US and Venezuela. \nPlatinum prices rose on account of persistent supply deficits and increased demand from Chinese investors. \nPalladium prices rose supported by a general surge in the prices of PGMs which has been driven by \nmacroeconomic sentiments. Lithium prices rose underpinned by China’s energy storage boom, which \nincreased demand expectations. \n \n \n \n \n2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \n19 Dec 2025 \nSavings \n \n \n \n \nMinimum \n3.75 \n3.75 \n3.75 \n3.75 \nMaximum \n4.08 \n4.08 \n4.08 \n4.08 \n1-month deposit \n \n \n \n \nMinimum \n6.63 \n6.63 \n6.63 \n6.63 \nMaximum \n11.10 \n11.16 \n11.16 \n11.16 \n3-months deposit \n \n \n \n \nMinimum \n6.90 \n6.90 \n6.90 \n6.90 \nMaximum \n10.79 \n10.79 \n10.79 \n10.79 \n6-months deposit \n \n \n \n \nMinimum \n6.51 \n6.51 \n6.51 \n6.51 \nMaximum \n10.39 \n10.39 \n10.39 \n10.39 \n12-months deposit \n \n \n \n \nMinimum \n6.52 \n6.52 \n6.52 \n6.52 \nMaximum \n11.10 \n11.10 \n11.10 \n11.10 \nOver 1 year \n \n \n \n \nMinimum \n6.53 \n6.53 \n6.53 \n6.53 \nMaximum \n11.11 \n11.11 \n11.11 \n11.11 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \n19 Dec 2025 \nSavings \n \n \n \n \nMinimum \n1.61 \n1.61 \n1.61 \n1.61 \nMaximum \n1.94 \n1.94 \n1.94 \n1.94 \n1-month deposit \n \n \n \n \nMinimum \n3.92 \n3.92 \n3.92 \n3.92 \nMaximum \n6.78 \n6.67 \n6.67 \n6.78 \n3-month deposit \n \n \n \n \nMinimum \n4.46 \n4.46 \n4.46 \n4.46 \nMaximum \n7.59 \n7.70 \n7.70 \n7.70 \n6-month deposit \n \n \n \n \nMinimum \n4.26 \n4.26 \n4.26 \n4.26 \nMaximum \n7.76 \n7.65 \n7.65 \n7.65 \n12-Month deposit \n \n \n \n \nMinimum \n4.56 \n4.56 \n4.56 \n4.56 \nMaximum \n8.00 \n8.00 \n8.00 \n8.11 \nOver 1 year \n \n \n \n \nMinimum \n4.67 \n4.67 \n4.67 \n4.67 \nMaximum \n7.72 \n7.72 \n7.72 \n7.72 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n \n3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \n19 Dec 2025 \nIndividuals \n \n \n \n \nMinimum \n43.62 \n43.64 \n43.54 \n42.88 \nMaximum \n49.30 \n49.33 \n49.30 \n49.50 \nCorporates \n \n \n \n \nMinimum \n40.49 \n40.55 \n40.39 \n40.28 \nMaximum \n46.75 \n46.66 \n46.63 \n45.62 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \n19 Dec 2025 \nIndividuals \n \n \n \n \nMinimum \n13.60 \n13.61 \n13.70 \n12.37 \nMaximum \n17.84 \n17.81 \n18.21 \n18.76 \nCorporates \n \n \n \n \nMinimum \n10.21 \n10.24 \n10.40 \n10.06 \nMaximum \n15.96 \n15.91 \n16.00 \n17.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending \nrates \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \n19 Dec 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nEQUITY MARKETS \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG billion) \nMarket \nTurnover \n(ZiG million) \nVolume of \nShares \n(million) \n28-Nov-25 \n234.97 \n235.67 \n237.56 \n253.23 \n100.11 \n109.09 \n74.76 \n52.55 \n7.31 \n05-Dec 25 \n245.63 \n249.35 \n250.42 \n252.60 \n100.11 \n117.69 \n79.32 \n87.37 \n11.80 \n12-Dec 25 \n249.59 \n256.00 \n255.39 \n245.94 \n100.11 \n117.69 \n80.17 \n74.13 \n6.84 \n19-Dec 25 \n249.10 \n257.03 \n256.28 \n245.25 \n99.99 \n117.69 \n80.21 \n98.20 \n16.83 \nWeekly \nChange (%) \n(0.20) \n0.40 \n0.35 \n(0.28) \n(0.12) \n0.00 \n0.05 \n32.47 \n146.05 \nSource: Zimbabwe Stock Exchange, 2025 \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n28-Nov-25 \n174.68 \n2.09 \n2.70 \n16.58 \n05-Dec 25 \n167.60 \n2.00 \n1.30 \n6.19 \n12-Dec 25 \n169.41 \n2.02 \n1.01 \n9.11 \n19-Dec 25 \n169.17 \n2.00 \n1.06 \n2.46 \nWeekly Change (%) \n(0.14) \n(0.99) \n4.95 \n(73.00) \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n \n \n \n \n \n4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\n90,000\n100,000\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\nZiG Thousands\nZSE Market Turnover \n50\n55\n60\n65\n70\n75\n80\n85\n90\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\nZiG Billion\nZSE Market Capitalisation \n1.4\n1.5\n1.6\n1.7\n1.8\n1.9\n2\n2.1\n2.2\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\nUS$ Billion\nVFEX Market Capitalisation \n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n115\n120\n125\n130\n135\n140\n145\n150\n155\n160\n165\n170\n175\n180\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\nIndex\nVFEX All Share Index \n0\n500\n1000\n1500\n2000\n2500\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\nUS$ Thousand\nVFEX Market Turnover \n \n \n5 \n3. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n4. ENERGY PRICES \n \nEnergy Prices \n \n28-Nov 2025 \n05-Dec 2025 \n12-Dec 2025 \n19-Dec 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.57 \n1.59 \n1.59 \n1.59 \nPetrol Blend E5/ litre \n1.54 \n1.56 \n1.56 \n1.56 \nLP Gas / kg \n1.43 \n1.47 \n1.47 \n1.47 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n62.54 \n63.04 \n61.95 \n60.26 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n5. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n15-Dec-25 \n4,346.95 \n3.47 \n3.83 \n0.1328 \n0.1467 \n16-Dec-25 \n4,315.85 \n3.44 \n3.80 \n0.1318 \n0.1457 \n17-Dec-25 \n4,324.20 \n3.45 \n3.82 \n0.1321 \n0.1460 \n18-Dec-25 \n4,342.10 \n3.46 \n3.83 \n0.1326 \n0.1466 \n19-Dec-25 \n4,333.35 \n3.45 \n3.82 \n0.1324 \n0.1463 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n12 December 2025 \nWEEK ENDING \n19 December 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n38,672,714,755.70 \n46,571,626,755.49 \n20.43 \nOf which ZiG \n13,246,633,719.48 \n15,407,606,146.25 \n16.31 \nOf which US$ transactions \n(ZiG Equivalent) \n25,426,081,036.22 \n \n31,164,020,609.24 \n \n22.57 \nPOS \n2,225,643,561.40 \n1,869,505,007.85 \n(16.00) \nATM \n2,009,185,863.11 \n1,833,615,198.97 \n(8.74) \nMOBILE BANKING \n309,548,905.27 \n340,930,044.74 \n10.14 \nMOBILE MONEY \n4,573,278,401.05 \n4,195,611,848.81 \n(8.26) \nZIPIT MOBILE \n305,250,573.70 \n275,173,449.94 \n(9.85) \nTOTAL \n48,095,622,060.23 \n55,086,462,305.81 \n14.54 \n \nVOLUMES \n \nRTGS \n191,047 \n320,480 \n67.75 \nOf which ZiG \n64,090 \n 104,393 \n62.89 \nOf which US$ \n126,957 \n 216,087 \n70.20 \nPOS \n1,854,710 \n1,554,101 \n(16.21) \nATM \n220,372 \n204,193 \n(7.34) \nMOBILE BANKING \n312,808 \n332,226 \n6.21 \nMOBILE MONEY \n14,775,800 \n14,202,948 \n(3.88) \nZIPIT MOBILE \n301,023 \n244,308 \n(18.84) \nTOTAL \n17,655,760 \n16,858,256 \n(4.52) \n \n \n6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n15-Dec-25 \n16-Dec-25 \n17-Dec-25 \n18-Dec-25 \n19-Dec-25 \n1.00Oz \n \n \n \n \n \nUS$ \n4,564.30 \n4,531.64 \n4,540.41 \n4,559.21 \n4,550.02 \nZiG \n119,172.89 \n118,282.67 \n118,691.31 \n119,023.97 \n118,748.63 \n0.50Oz \n \n \n \n \n \nUS$ \n2,282.15 \n2,265.82 \n2,270.21 \n2,279.60 \n2,275.01 \nZiG \n59,586.45 \n59,141.33 \n59,345.66 \n59,511.99 \n59,374.32 \n0.25Oz \n \n \n \n \n \nUS$ \n1,141.07 \n1,132.91 \n1,135.10 \n1,139.80 \n1,137.50 \nZiG \n29,793.22 \n29,570.67 \n29,672.83 \n29,755.99 \n29,687.16 \n0.10Oz \n \n \n \n \n \nUS$ \n456.43 \n453.16 \n454.04 \n455.92 \n455.00 \nZiG \n11,917.29 \n11,828.27 \n11,869.13 \n11,902.40 \n11,874.86 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n6. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of Foreign Currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(08 Dec – 12 Dec) \n26.1174 \n1.5384 \n34.86074 \n1.84906 \n31.48848 \n15-Dec \n26.1098 \n1.5487 \n34.8868 \n1.8507 \n30.6399 \n16-Dec \n26.1015 \n1.5521 \n34.8900 \n1.8484 \n30.6745 \n17-Dec \n26.1411 \n1.5584 \n35.0109 \n1.8529 \n30.6583 \n18-Dec \n26.1063 \n1.5559 \n34.9070 \n1.8512 \n30.6579 \n19-Dec \n26.0985 \n1.5574 \n34.9070 \n1.8428 \n30.5875 \nWeekly Average \n(15 Dec – 19 Dec) \n26.1114 \n1.5545 \n34.9203 \n1.8492 \n30.6436 \nAppr (-)/Depr (+) (%) of the \nZiG \n-0.02 \n+1.05 \n+0.17 \n+0.01 \n-2.68 \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(08 Dec – 12 Dec) \n4,239.37 \n1,693.20 \n1,493.60 \n14,687.80 \n10,306.00 \n15-Dec \n4,279.60 \n1,803.50 \n1,568.00 \n14,346.00 \n10,350.00 \n16-Dec \n4,336.80 \n1,920.00 \n1,621.00 \n14,263.00 \n10,370.00 \n17-Dec \n4,336.70 \n1,958.00 \n1,676.00 \n14,392.00 \n10,410.00 \n18-Dec \n4,319.60 \n1,925.00 \n1,690.00 \n14,641.00 \n10,540.00 \n19-Dec \n4,397.50 \n2,062.00 \n1,792.00 \n14,803.00 \n10,750.00 \nWeekly Average \n(15 Dec – 19 Dec) \n4,334.04 \n1,933.70 \n1,669.40 \n14,489.00 \n10,484.00 \nWeekly change (%) \n2.23 \n14.20 \n11.77 \n(1.35) \n1.73 \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n \n \n7 \nFigure 3: Average Weekly International Commodity Price Developments (12th September 2025– 19th December 2025) \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \nRESERVE BANK OF ZIMBABWE \nDECEMBER 2025 \n3,000\n3,200\n3,400\n3,600\n3,800\n4,000\n4,200\n4,400\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\nUS$/oz\nGold\n60\n61\n62\n63\n64\n65\n66\n67\n68\n69\n70\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\nUS$/oz\nCrude Oil \n1300\n1500\n1700\n1900\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\nUS$/oz\nPlatinum\n900\n1100\n1300\n1500\n1700\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\nUS$/oz\nPalladium\n14,300\n14,500\n14,700\n14,900\n15,100\n15,300\n15,500\n15,700\n15,900\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\nUS$/oz\nNickel \n7,900\n8,400\n8,900\n9,400\n9,900\n10,400\n10,900\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\nUS$/oz\nLithium", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_19_DECEMBER_2025_VOLUME_27_Number_51_4.pdf"}
{"doc_id": "95121fb575fc23101158fc2e5cb92659", "text": "Vol. 28 No. 12 \n \nWeek Ending \n20th March 2026 \n \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n \n1 \n1. OVERVIEW \nThis report provides a snapshot of major developments in the monetary and financial sectors of the economy \nduring the week ending 20th March 2026. It covers trends in domestic money and capital markets, national \npayment systems, exchange rates and global commodity prices. \nThe movement in local and foreign currency deposit rates exhibited mixed maturities. The local currency \ndeposit rates declined across most tenors, save for the minimum savings rate which declined, except for the \nmaximum which remained unchanged. Similarly, the foreign currency deposits rates also fell for most \nmaturities, whilst the savings rates stayed constant at both the minimum and maximum. On the lending side, \nrates for individual clients rose in both local and foreign currency. Regarding corporate clients, minimum \nlending rates increased in both currencies, whereas maximum rates declined. \nCapital markets showed positive momentum during the week ending 20 March 2026. The Zimbabwe Stock \nExchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) both recorded modest index gains of 0,63% \nand 0,57% closing the week at 353,00 points and 239,32 points, respectively. \nThe total value of transactions processed through the National Payment Systems platforms increased by 8.14% \nfrom ZiG40.70 billion reported in the previous week to ZiG44.02 billion. The volume of transactions \nprocessed decreased by 18.72% from 21.01 million to 17.07 million during the same period under review. The \nlargest share of transactional values was processed through the Real-Time Gross Settlement (RTGS) system, \naccounting for 83.18%, while mobile money accounted for 88.30% of the transaction volumes \nOn the global front, international weekly average prices for major metals such as gold, platinum, palladium, \ncopper, nickel and lithium declined. This downward trend was largely driven by the appreciation of the US \ndollar and rising Treasury yields which increased the holding cost of non-yielding, leading to a downward \npressure on prices across global markets. \nIn contrast, Brent crude oil prices maintained an upward trend, largely driven by supply-side constraints. \nDisruptions in production and distribution across major oil-producing countries tightened global supply, \ncreating upward pressure on prices. As supply levels declined amid steady demand, market conditions \nsupported a continued increase in oil prices. \n \n \n \n \n \n \n \n \n \n \n \n2 \n2. \nINTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \n Deposit rates \n27-Feb-2026 \n06-Mar-2026 \n13-Mar-2026 \n20-Mar-2026 \nSavings \n \n \n \n \nMinimum \n3.81 \n3.81 \n3.83 \n3.81 \nMaximum \n4.14 \n4.14 \n4.17 \n4.17 \n1-month deposit \n \n \n \n \nMinimum \n6.69 \n6.87 \n6.69 \n6.66 \nMaximum \n11.22 \n10.76 \n11.22 \n10.41 \n3-months deposit \n \n \n \n \nMinimum \n6.87 \n6.93 \n6.87 \n6.73 \nMaximum \n10.76 \n10.82 \n10.76 \n9.95 \n6-months deposit \n \n \n \n \nMinimum \n6.93 \n6.99 \n6.93 \n6.79 \nMaximum \n10.82 \n11.58 \n10.82 \n10.02 \n12-months deposit \n \n \n \n \nMinimum \n6.99 \n6.99 \n6.99 \n6.86 \nMaximum \n11.58 \n11.58 \n11.58 \n10.77 \nOver 1 year \n \n \n \n \nMinimum \n7.00 \n7.00 \n7.00 \n6.86 \nMaximum \n11.58 \n11.58 \n11.58 \n10.78 \nSource: Reserve Bank of Zimbabwe, 2026 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n27-Feb-2026 \n06-Mar-2026 \n 13-Mar-2026 \n 20-Mar-2026 \nSavings \n \n \n \n \nMinimum \n1.75 \n1.75 \n1.89 \n1.89 \nMaximum \n2.08 \n2.08 \n2.22 \n2.22 \n1-month deposit \n \n \n \n \nMinimum \n3.92 \n3.92 \n3.92 \n3.69 \nMaximum \n6.76 \n6.76 \n6.76 \n6.32 \n3-month deposit \n \n \n \n \nMinimum \n4.40 \n4.40 \n4.40 \n4.09 \nMaximum \n7.66 \n7.66 \n7.66 \n7.15 \n6-month deposit \n \n \n \n \nMinimum \n4.54 \n4.54 \n4.54 \n4.24 \nMaximum \n7.96 \n7.96 \n7.96 \n7.47 \n12-Month deposit \n \n \n \n \nMinimum \n4.83 \n4.83 \n4.83 \n4.56 \nMaximum \n8.36 \n8.36 \n8.36 \n7.89 \nOver 1 year \n \n \n \n \nMinimum \n4.92 \n4.92 \n4.92 \n4.64 \nMaximum \n8.50 \n8.50 \n8.50 \n8.03 \nSource: Reserve Bank of Zimbabwe, 2026 \n \n \n \n \n \n \n \n \n \n3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n27-Feb-2026 \n06-Mar-2026 \n13-Mar-2026 \n20-Mar-2026 \nIndividuals \n \n \n \n \nMinimum \n43.62 \n43.67 \n43.67 \n44.65 \nMaximum \n49.56 \n49.59 \n49.59 \n50.69 \nCorporates \n \n \n \n \nMinimum \n40.35 \n40.36 \n40.35 \n40.45 \nMaximum \n46.58 \n46.56 \n46.23 \n44.27 \nSource: Reserve Bank of Zimbabwe, 2026 \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n27-Feb-2026 \n06-Mar-2026 \n13-Mar-2026 \n20-Mar-2026 \nIndividuals \n \n \n \n \nMinimum \n13.49 \n13.52 \n14.34 \n14.37 \nMaximum \n18.58 \n18.59 \n16.64 \n18.83 \nCorporates \n \n \n \n \nMinimum \n10.34 \n10.32 \n9.96 \n10.56 \nMaximum \n15.77 \n15.81 \n16.43 \n15.10 \nSource: Reserve Bank of Zimbabwe, 2026 \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending \nrates \n27-Feb-2026 \n06-Mar-2026 \n13-Mar-2026 \n20-Mar-2026 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2026 \n \n \nEQUITY MARKETS \n \nZSE Indicators \n \n \nAll \nShare \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium \nCap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket \nCap (ZiG \nbillion) \nMarket \nTurnover \n(ZiG \nmillion) \nVolume \nof Shares \n(million) \n27-Feb 26 \n359.11 \n367.23 \n381.71 \n350.51 \n100.11 \n122.53 \n111.90 \n123.98 \n9.63 \n06-Mar 26 \n361.36 \n369.29 \n384.20 \n354.00 \n100.11 \n122.53 \n113.41 \n165.88 \n14.65 \n13-Mar 26 \n351.69 \n359.79 \n371.40 \n342.49 \n100.11 \n129.43 \n109.97 \n190.79 \n146.41 \n20-Mar 26 \n353.90 \n361.19 \n373.60 \n349.23 \n100.11 \n129.42 \n110.71 \n625.13 \n95.00 \nWeekly \nChange \n(%) \n0.63 \n0.39 \n0.59 \n1.97 \n0.00 \n(0.01) \n0.67 \n227.65 \n(35.11) \nSource: Zimbabwe Stock Exchange, 2026 \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market \nCapitalisation \nMarket Turnover \n(US$ million) \nVolume of Shares \n(million) \n27-Feb 26 \n224.06 \n2.66 \n5.58 \n9.61 \n06- Mar 26 \n228.22 \n2.72 \n3.89 \n4.43 \n13-Mar 26 \n237.96 \n2.84 \n4.91 \n6.52 \n20-Mar 26 \n239.32 \n2.85 \n4.07 \n4.42 \nWeekly Change (%) \n0.57 \n0.35 \n(17.11) \n(32.21) \nSource: Victoria Falls Stock Exchange, 2026 \n \n \n \n \n4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2026 \n \n1,8\n2\n2,2\n2,4\n2,6\n2,8\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\n26-Dec-25\n02-Jan-26\n09-Jan-26\n16-Jan-26\n23-Jan-26\n30-Jan-26\n06-Feb-26\n13-Feb-26\n20-Feb-26\n27-Feb-26\n06-Mar-26\n13-Mar-26\n20-Mar-26\nUS$ Billion\nVFEX Market Capitalisation \n150\n155\n160\n165\n170\n175\n180\n185\n190\n195\n200\n205\n210\n215\n220\n225\n230\n235\n240\n245\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\n26-Dec-25\n02-Jan-26\n09-Jan-26\n16-Jan-26\n23-Jan-26\n30-Jan-26\n06-Feb-26\n13-Feb-26\n20-Feb-26\n27-Feb-26\n06-Mar-26\n13-Mar-26\n20-Mar-26\nIndex\nVFEX All Share Index \n55\n60\n65\n70\n75\n80\n85\n90\n95\n100\n105\n110\n115\n120\n125\n17-Oct-25\n31-Oct-25\n14-Nov-25\n28-Nov-25\n12-Dec-25\n26-Dec-25\n09-Jan-26\n23-Jan-26\n06-Feb-26\n20-Feb-26\n06-Mar-26\n20-Mar-26\nZiG Billion\nZSE Market Capitalisation \n90\n140\n190\n240\n290\n340\n390\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\n26-Dec-25\n02-Jan-26\n09-Jan-26\n16-Jan-26\n23-Jan-26\n30-Jan-26\n06-Feb-26\n13-Feb-26\n20-Feb-26\n27-Feb-26\n06-Mar-26\n13-Mar-26\n20-Mar-26\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n0\n100 000\n200 000\n300 000\n400 000\n500 000\n600 000\n700 000\n800 000\n900 000\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\n26-Dec-25\n02-Jan-26\n09-Jan-26\n16-Jan-26\n23-Jan-26\n30-Jan-26\n06-Feb-26\n13-Feb-26\n20-Feb-26\n27-Feb-26\n06-Mar-26\n13-Mar-26\n20-Mar-26\nZiG Thousands\nZSE Market Turnover \nNotable trade deals: A combined total\nof\n60.54\nmillion\nEconet\nWireless\nZimbabwe Limited shares at an average\nprice ZiG903.63 cents/share.\nNotable\ntrade\ndeals:\nA\ncombined\n53.03\nmillion Econet Wireless Zimbabwe Limited\nshares at\nan average price\nof ZiG908.67\ncents/share and 2.51 million NMBZ Holdings\nLimited shares at ZiG500.05 cents/share.\n0\n1000\n2000\n3000\n4000\n5000\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\n19-Dec-25\n26-Dec-25\n02-Jan-26\n09-Jan-26\n16-Jan-26\n23-Jan-26\n30-Jan-26\n06-Feb-26\n13-Feb-26\n20-Feb-26\n27-Feb-26\n06-Mar-26\n13-Mar-26\n20-Mar-26\nUS$ Thousand\nVFEX Market Turnover \nNotable trade deals: Padenga Holdings\nLimited,\nwhere\n6.03\nmillion\nshares\nexchanged hands at US$0.72 per share\n \n \n5 \n3. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2026 \n \n4. ENERGY PRICES \n \nEnergy Prices \n \n27-Feb-2026 \n06-Mar-2026 \n13-Mar-2026 \n20-Mar-2026 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.52 \n1.77 \n1.77 \n2.05 \nPetrol Blend E5/ litre \n1.56 \n1.71 \n1.71 \n2.17 \nLP Gas / kg \n1.55 \n1.55 \n1.56 \n1.56 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n(US$/barrel) \n72.30 \n 86.65 \n94.38 \n101.74 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2026 \n \n5. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL \nTOKENS (GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n16-Mar-26 \n5,044.60 \n3.92 \n4.33 \n0.1541 \n0.1703 \n17-Mar-26 \n4,994.85 \n3.86 \n4.26 \n0.1526 \n0.1686 \n18-Mar-26 \n5,016.80 \n3.87 \n4.28 \n0.1532 \n0.1694 \n19-Mar-26 \n4,869.95 \n3.76 \n4.16 \n0.1487 \n0.1644 \n20-Mar-26 \n4,600.35 \n3.56 \n3.93 \n0.1405 \n0.1553 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2026 \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n13 March 2026 \nWEEK ENDING \n20 March 2026 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n29,749,384,611.93 \n36,609,719,328.55 \n23.06 \nOf which ZiG \n9,838,779,791.50 \n12,982,285,734.62 \n31.95 \nOf which US$ transactions \n(ZiG Equivalent) \n19,910,604,820.43 \n23,627,433,593.93 \n18.67 \nPOS \n2,152,627,465.19 \n1,370,891,552.93 \n(36.32) \nATM \n1,900,926,554.53 \n1,172,408,796.43 \n(38.32) \nMOBILE BANKING \n306,645,697.01 \n193,151,539.00 \n(37.01) \nMOBILE MONEY \n6,288,005,326.93 \n4,472,447,047.79 \n(28.87) \nZIPIT MOBILE \n303,807,410.44 \n196,597,609.95 \n(35.29) \nTOTAL \n40,701,397,066.04 \n44,015,215,874.65 \n8.14 \n \nVOLUMES \n \nRTGS \n178,027 \n185,138 \n3.99 \nOf which ZiG \n68,627 \n69,417 \n1.15 \nOf which US$ \n109,400 \n115,721 \n5.78 \nPOS \n1,697,884 \n1,227,680 \n(27.69) \nATM \n219,340 \n147,551 \n(32.73) \nMOBILE BANKING \n311,408 \n227,695 \n(26.88) \nMOBILE MONEY \n18,326,321 \n15,076,952 \n(17.73) \nZIPIT MOBILE \n273,955 \n209,130 \n(23.66) \nTOTAL \n21,006,935 \n17,074,146 \n(18.72) \n \n \n6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n16-Mar-2026 \n17-Mar-2026 \n18-Mar-2026 \n19-Mar-2026 \n20-Mar-2026 \n1.00Oz \n \n \n \n \n \nUS$ \n5,296.83 \n 5,244.59 \n5,267.64 \n5,113.45 \n4,830.37 \nZiG \n134,721.69 \n 132,653.05 \n133,087.29 \n129,391.19 \n122,269.16 \n0.50Oz \n \n \n \n \n \nUS$ \n2,648.42 \n2,622.30 \n2,633.82 \n2,556.72 \n2,415.18 \nZiG \n67,360.85 \n66,326.53 \n66,543.64 \n64,695.59 \n61,134.58 \n0.25Oz \n \n \n \n \n \nUS$ \n1,324.21 \n1,311.15 \n1,316.91 \n1,278.36 \n1,207.59 \nZiG \n33,680.42 \n33,163.26 \n33,271.82 \n32,347.80 \n30,567.29 \n0.10Oz \n \n \n \n \n \nUS$ \n529.68 \n524.46 \n526.76 \n511.34 \n483.04 \nZiG \n13,472.17 \n13,265.31 \n13,308.73 \n12,939.12 \n12,226.92 \nSource: Reserve Bank of Zimbabwe, 2026 \n \n \n6. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of Foreign Currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(09 Mar – 13 Mar) \n25.5341 \n1.5412 \n34.1660 \n1.8215 \n29.5378 \n16-Mar-26 \n25.4344 \n1.5078 \n33.6995 \n1.8817 \n29.0894 \n17-Mar-26 \n25.2933 \n1.5168 \n33.6667 \n1.7914 \n29.0747 \n18-Mar-26 \n25.2651 \n1.5172 \n33.7770 \n1.7815 \n29.1648 \n19-Mar-26 \n25.3041 \n1.4899 \n33.5799 \n1.7881 \n29.0213 \n20-Mar-26 \n25.3126 \n1.5085 \n33.9367 \n1.7875 \n29.2588 \nWeekly Average \n(16 Mar – 20 Mar) \n25.3219 \n1.5080 \n33.7320 \n1.8060 \n29.1218 \nAppr (-)/Depr (+) (%) of the \nZiG \n-0.83 \n-2.15 \n-1.27 \n-0.85 \n-1.41 \nSource: Reserve Bank of Zimbabwe, 2026 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(09 Mar – 13 Mar) \n \n5,128.95 \n2,168.40 \n1,642.40 \n17,531.60 \n20,040.00 \n16-Mar-26 \n5,042.10 \n2,171.00 \n1,626.00 \n17,465.00 \n19,850.00 \n17-Mar-26 \n4,991.40 \n2,111.00 \n1,585.00 \n17,195.00 \n19,800.00 \n18-Mar-26 \n4,849.70 \n2,035.00 \n1,498.00 \n17,150.00 \n19,850.00 \n19-Mar-26 \n4,707.40 \n2,005.00 \n1,472.00 \n16,984.00 \n19,900.00 \n20-Mar-26 \n4,368.90 \n1,869.00 \n1,410.00 \n17,019.00 \n19,650.00 \nWeekly Average \n(16 Mar –20 Mar) \n4,791.90 \n2,038.20 \n1,518.20 \n17,162.60 \n19,810.00 \nWeekly change (%) \n(6.57) \n(6.00) \n(7.56) \n(2.10) \n(1.15) \nSource: BBC, KITCO and Bloomberg, 2026 \n \n \n \n \n7 \nFigure 3: Average Weekly International Commodity Price Developments (31st October 2025– 20th March 2026) \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2026 \n \nRESERVE BANK OF ZIMBABWE \nMARCH 2026 \n3 700\n3 900\n4 100\n4 300\n4 500\n4 700\n4 900\n5 100\n5 300\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\n26-Dec\n2-Jan\n9-Jan\n16-Jan\n23-Jan\n30-Jan\n6-Feb\n13-Feb\n20-Feb\n27-Feb\n6-Mar\n13-Mar\n20-Mar\nUS$/oz\nGold\n60\n65\n70\n75\n80\n85\n90\n95\n100\n105\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\n26-Dec\n2-Jan\n9-Jan\n16-Jan\n23-Jan\n30-Jan\n6-Feb\n13-Feb\n20-Feb\n27-Feb\n6-Mar\n13-Mar\n20-Mar\nUS$/oz\nCrude Oil \n1300\n1500\n1700\n1900\n2100\n2300\n2500\n2700\n2900\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\n26-Dec\n2-Jan\n9-Jan\n16-Jan\n23-Jan\n30-Jan\n6-Feb\n13-Feb\n20-Feb\n27-Feb\n6-Mar\n13-Mar\n20-Mar\nUS$/oz\nPlatinum\n1100\n1300\n1500\n1700\n1900\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\n26-Dec\n2-Jan\n9-Jan\n16-Jan\n23-Jan\n30-Jan\n6-Feb\n13-Feb\n20-Feb\n27-Feb\n6-Mar\n13-Mar\n20-Mar\nUS$/oz\nPalladium\n14 300\n14 800\n15 300\n15 800\n16 300\n16 800\n17 300\n17 800\n18 300\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\n26-Dec\n2-Jan\n9-Jan\n16-Jan\n23-Jan\n30-Jan\n6-Feb\n13-Feb\n20-Feb\n27-Feb\n6-Mar\n13-Mar\n20-Mar\nUS$/oz\nNickel \n9 000\n11 000\n13 000\n15 000\n17 000\n19 000\n21 000\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\n19-Dec\n26-Dec\n2-Jan\n9-Jan\n16-Jan\n23-Jan\n30-Jan\n6-Feb\n13-Feb\n20-Feb\n27-Feb\n6-Mar\n13-Mar\n20-Mar\nUS$/oz\nLithium", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_20_MARCH_2026_VOLUME_28_NUMBER_12.pdf"}
{"doc_id": "8c3fcdbb9b033dd00a20e31d93974c05", "text": "Vol. 26 No. 23 \n \n \nWeek Ending \n7th June 2024 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nPRICES .................................................................................... 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n8. \nTOBACCO SALES ................................................................. 7 \n \n \n \n 1 \n1. OVERVIEW \n \n \nThis report provides an overview of weekly monetary and financial data from domestic and international markets \nincluding money markets, capital markets, payment systems, commodity prices and exchange rates for the week \nending 7th June 2024. \nDuring the week under review, the local currency minimum and maximum deposit rates for savings deposits and \ndeposits of all tenors remained unchanged at previous week’s levels. Maximum deposit rates for deposits of 1 \nmonth and 12-month tenor, however, registered an increase while those for 3-month tenor registered a decline \nduring the same week. \nMinimum and maximum deposit rates for foreign currency savings deposits and for deposits for all tenors \nregistered increases except for maximum deposit rates of 1-month, 3-month and 6-month tenors which remained \nunchanged at the previous week’s levels. \nLocal currency maximum and minimum lending rates for individuals and corporates at commercial banks \nregistered increases during the week under review save for maximum lending rates for individuals which remained \nunchanged at levels registered in the previous week. \nDomestic capital markets continued on a positive trajectory during the week under review. The Zimbabwe Stock \nExchange (ZSE) All Share Index registered a week-on-week increase to close at 106.10 points, from 101.07 points \nin the preceding week. Similarly, the Victoria Falls Stock Exchange (VFEX) All share Index also increased by \n0.03%, from 98.26 points recorded during in the week ending 31st May 2024, to close at 101.60 points in the week \nunder analysis. \nThe National Payment System processed transactions worth ZiG15.11 billion during the week ending 7th of June \n2024, representing a 4.59% increase, from ZiG14.45 billion recorded in the previous week. This was largely \nattributable to increases in transaction values processed through all national payment system platforms. \nOn the local foreign exchange market, the ZiG/US$ exchange rate registered a marginal depreciation of 0.01% \nfrom a weekly average of ZiG13.2922 per US$ registered in the prior week, to ZiG13.3644 per US$ during the \nreporting week. \nInternational weekly average commodity prices for gold, platinum, palladium, nickel, and crude oil declined during \nthe week under review. Gold prices weakened on the back of a stronger US dollar. Platinum and palladium prices \nwere both weighed down by lower demand concerns amid the ongoing gradual transition from Internal Combustion \nEngine (ICE) vehicles to Battery Electric Vehicles (BEVs). \nThe decline in crude oil prices was occasioned by an increase in the global accumulation of oil reserves which \nexerted downward pressures on prices. \nA cumulative total of 182 million kilograms of tobacco was sold as at 7 June 2024, representing a 26.85% decrease \nfrom 248 million kilograms sold during the same period in 2023. The golden leaf was, however, sold at a higher \nprice of US$3.49 per kilogram during the period under analysis, up from US$3.02 per kilogram realised in the \nsame period last year. \n \n \n \n 2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG)) \nZiG Deposit rates \n17 May 2024 \n24 May 2024 \n31 May 2024 \n7 June 2024 \nSavings \n \n \n \n \nMinimum \n3.72 \n3.75 \n3.75 \n3.75 \nMaximum \n4.09 \n3.88 \n3.88 \n4.13 \n1-month deposit \n \n \n \n \nMinimum \n5.19 \n5.19 \n5.19 \n5.19 \nMaximum \n5.68 \n5.64 \n5.64 \n5.68 \n3-month deposit \n \n \n \n \nMinimum \n5.24 \n5.24 \n5.26 \n5.26 \nMaximum \n5.82 \n5.77 \n5.78 \n5.50 \n6-month deposit \n \n \n \n \nMinimum \n5.31 \n5.31 \n5.33 \n5.33 \nMaximum \n5.93 \n5.93 \n5.94 \n5.94 \n12-Month deposit \n \n \n \n \nMinimum \n5.33 \n5.33 \n5.36 \n5.36 \nMaximum \n6.01 \n6.01 \n6.02 \n6.03 \nOver 1 year \n \n \n \n \nMinimum \n5.34 \n5.34 \n5.37 \n5.37 \nMaximum \n6.06 \n6.06 \n6.10 \n6.10 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) \nUS$ Deposit rates \n17 May 2024 \n24 May 2024 \n31 May 2024 \n7 June 2024 \nSavings \n \n \n \n \nMinimum \n1.40 \n1.40 \n1.40 \n1.53 \nMaximum \n1.73 \n1.73 \n1.73 \n1.86 \n1-month deposit \n \n \n \n \nMinimum \n3.28 \n3.19 \n3.28 \n3.36 \nMaximum \n4.99 \n4.99 \n5.01 \n5.01 \n3-month deposit \n \n \n \n \nMinimum \n3.63 \n3.77 \n3.88 \n3.96 \nMaximum \n5.28 \n5.28 \n5.36 \n5.36 \n6-month deposit \n \n \n \n \nMinimum \n3.73 \n3.88 \n4.03 \n4.13 \nMaximum \n5.73 \n5.73 \n5.86 \n5.86 \n12-Month deposit \n \n \n \n \nMinimum \n3.88 \n4.03 \n4.20 \n4.30 \nMaximum \n6.38 \n6.38 \n6.53 \n6.55 \nOver 1 year \n \n \n \n \nMinimum \n4.23 \n4.08 \n4.23 \n4.53 \nMaximum \n6.35 \n6.35 \n6.35 \n6.55 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n \n \n \n \n \n 3 \nCommercial bank weighted lending rates (Local Currency (ZiG) \nZiG Lending rates \n17 May 2024 \n24 May 2024 \n31 May 2024 \n7 June 2024 \nIndividuals \n \n \n \n \nMinimum \n26.35 \n25.32 \n25.17 \n24.86 \nMaximum \n31.96 \n31.86 \n31.72 \n31.53 \nCorporates \n \n \n \n \nMinimum \n24.39 \n34.55 \n24.52 \n24.53 \nMaximum \n32.40 \n32.88 \n32.65 \n32.85 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) \nUS$ Lending rates \n17 May 2024 \n24 May 2024 \n31 May 2024 \n7 June 2024 \nIndividuals \n \n \n \n \nMinimum \n10.41 \n10.37 \n10.41 \n10.48 \nMaximum \n15.05 \n15.08 \n15.11 \n15.11 \nCorporates \n \n \n \n \nMinimum \n8.79 \n8.79 \n8.83 \n8.95 \nMaximum \n15.13 \n15.07 \n14.94 \n14.98 \nSource: Reserve Bank of Zimbabwe, 2024 \n \nCommercial banks and building societies mortgage lending rates \nMortgage Lending rates \n17 May 2024 \n24 May 2024 \n31 May 2024 \n7 June 2024 \nZiG Lending rates \n \n \n \n \nMinimum \n20.00 \n20.00 \n20.00 \n20.00 \nMaximum \n30.00 \n30.00 \n30.00 \n30.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n3. EQUITY MARKETS \n \n \nZSE Indicators \n \n \nAll \nShare \nIndex \n(points) \n \nTop 10 \nindex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket \nCap (ZiG \nbillion) \nMarket \nTurnover \n(ZiG \nmillion) \nVolume of \nShares \n(million) \n17-May-24 \n94.65 \n92.76 \n93.58 \n97.63 \n100.00 \n114.07 \n27.05 \n32.63 \n31.23 \n24-May-24 \n99.47 \n95.98 \n96.60 \n100.26 \n100.00 \n114.07 \n29.05 \n7.90 \n4.09 \n31-May-24 \n101.07 \n102.39 \n102.17 \n100.18 \n100.00 \n114.07 \n29.23 \n6.85 \n3.73 \n7-June-24 \n106.10 \n108.94 \n108.19 \n105.28 \n100.00 \n114.07 \n31.08 \n12.49 \n7.59 \nWeekly \nChange (%) \n4.98 \n6.40 \n5.89 \n5.09 \n0.00 \n0.00 \n6.33 \n82.34 \n103.49 \nSource: Zimbabwe Stock Exchange, 2024 \n \n \nVFEX Indicators \nDate \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover \n(US$ million) \nVolume of Shares \n(million) \n17-May-24 \n100.12 \n1.21 \n0.82 \n3.53 \n24-May-24 \n96.68 \n1.17 \n1.16 \n4.62 \n31-May-24 \n98.26 \n1.19 \n1.18 \n4.20 \n7-June-24 \n101.60 \n1.22 \n1.59 \n10.24 \nWeekly Change (%) \n3.40 \n2.52 \n34.75 \n143.81 \nSource: Victoria Falls Stock Exchange, 2024 \n \n \n \n \n 4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2024 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n90\n95\n100\n105\n110\n115\n120\n10-May-24\n12-May-24\n14-May-24\n16-May-24\n18-May-24\n20-May-24\n22-May-24\n24-May-24\n26-May-24\n28-May-24\n30-May-24\n01-Jun-24\n03-Jun-24\n05-Jun-24\n07-Jun-24\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n0\n2,000\n4,000\n6,000\n8,000\n10,000\n12,000\n10-May-24\n12-May-24\n14-May-24\n16-May-24\n18-May-24\n20-May-24\n22-May-24\n24-May-24\n26-May-24\n28-May-24\n30-May-24\n01-Jun-24\n03-Jun-24\n05-Jun-24\n07-Jun-24\nZiG Thousands\nZSE Market Turnover \n25\n30\n35\n11-May-24\n14-May-24\n17-May-24\n20-May-24\n23-May-24\n26-May-24\n29-May-24\n01-Jun-24\n04-Jun-24\n07-Jun-24\nZiG Billion\nZSE Market Capitalisation \n0\n20\n40\n60\n80\n100\n120\n01-Mar-24\n08-Mar-24\n15-Mar-24\n22-Mar-24\n29-Mar-24\n05-Apr-24\n12-Apr-24\n19-Apr-24\n26-Apr-24\n03-May-24\n10-May-24\n17-May-24\n24-May-24\n31-May-24\n07-Jun-24\nUS$ Bililon\nVFEX All Share Index \n0.8\n0.9\n1\n1.1\n1.2\n1.3\n1.4\n1.5\n1.6\n08-Mar-24\n15-Mar-24\n22-Mar-24\n29-Mar-24\n05-Apr-24\n12-Apr-24\n19-Apr-24\n26-Apr-24\n03-May-24\n10-May-24\n17-May-24\n24-May-24\n31-May-24\n07-Jun-24\nUS$ Billion\nVFEX Market Capitalisation \n0\n200\n400\n600\n800\n08-Mar-24\n15-Mar-24\n22-Mar-24\n29-Mar-24\n05-Apr-24\n12-Apr-24\n19-Apr-24\n26-Apr-24\n03-May-24\n10-May-24\n17-May-24\n24-May-24\n31-May-24\n07-Jun-24\nUS$ Thousand\nVFEX Market Turnover \n \n 5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2024 \n5. PRICES \n \nEnergy Prices \n \n17 May 2024 \n24 May 2024 \n31 May 2024 \n 7 June 2024 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.66 \n1.66 \n1.66 \n1.61 \nPetrol Blend E20/ litre \n1.58 \n1.58 \n1.58 \n1.59 \nLP Gas / kg \n1.86 \n1.86 \n1.86 \n1.78 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n83.49 \n82.11 \n82.75 \n79.82 \nSource: Zimbabwe Energy Regulatory Authority and BBC 2024 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \n \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n3-June-24 \n 2,337.70 \n0.95 \n1.06 \n0.0717 \n0.0793 \n4-June-24 \n 2,326.00 \n0.95 \n1.05 \n0.0714 \n0.0789 \n5-June-24 \n 2,340.05 \n0.95 \n1.05 \n0.0710 \n0.0785 \n6-June-24 \n 2,360.60 \n0.96 \n1.06 \n0.0715 \n0.0790 \n7-June-24 \n 2,310.80 \n0.97 \n1.07 \n0.0721 \n0.0797 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2024 \n \n \n \n \n \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n31 May 2024 \nWEEK ENDING \n7 June 2024 \nWEEKLY \nCHANGE (%) \n \nVALUES IN ZiG \n \nRTGS \n11,518,355,613.73 \n11,548,277,278.11 \n0.26% \nOf which ZiG \n3,972,811,800.92 \n5,119,850,751.02 \n \nOf which US$ \n567,826,133.87 \n481,265,964.55 \n \nPOS \n887,337,685.08 \n1,087,746,988.25 \n22.59% \nATM \n898,131,552.57 \n1,137,936,950.50 \n26.70% \nMOBILE BANKING \n58,896,477.76 \n77,225,737.16 \n31.12% \nMOBILE MONEY \n1,015,723,273.54 \n1,154,815,229.63 \n13.69% \nZIPIT MOBILE \n67,843,283.74 \n102,834,548.22 \n51.58% \nTOTAL \n14,446,287,886.42 \n15,108,836,731.87 \n4.59% \n \nVOLUMES \n \nRTGS \n298,453 \n198,934 \n-33.34% \nOf which ZiG \n149.961 \n 86,779 \n \nOf which US$ \n148.492 \n 112,155 \n \nPOS \n1,885,780 \n2,232,687 \n18.396% \nATM \n228,122 \n278,555 \n22.11% \nMOBILE BANKING \n358,849 \n397,618 \n10.80% \nMOBILE MONEY \n7,698,181 \n8,123,590 \n5.53% \nZIPIT MOBILE \n187,718 \n259,411 \n38.19% \nTOTAL \n10,657,103 \n11,490,795 \n7.82% \n \n 6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin Price \n3 June 2024 \n4 June 2024 \n5 June 2024 \n6 June 2024 \n7 June 2024 \n1.00Oz \n \n \n \n \n \nUS$ \n2,465.66 \n2,454.59 \n2,442.30 \n2,426.34 \n2,478.63 \nZiG \n32,820.19 \n32,685.74 \n32,552.20 \n32,495.00 \n33,290.23 \n0.50Oz \n \n \n \n \n \nUS$ \n1,232.83 \n1,227.29 \n1,221.15 \n1,213.17 \n1,239.32 \nZiG \n16,410.09 \n16,342.87 \n16,276.10 \n16,247.50 \n16,288.76 \n0.25Oz \n \n \n \n \n \nUS$ \n616.42 \n613.65 \n610.58 \n606.59 \n619.66 \nZiG \n8,205.05 \n8,171.44 \n8,138.05 \n8,123.75 \n8,144.38 \n0.10Oz \n \n \n \n \n \nUS$ \n246.57 \n245.46 \n244.23 \n242.63 \n247.86 \nZiG \n3,282.02 \n3,268.57 \n3,255.22 \n3,249.50 \n3,257.75 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(27-31 May) \n13.29 \n0.72 \n16.93 \n0.98 \n14.37 \n3-June \n13.3109 \n0.7094 \n16.9587 \n0.9743 \n14.4450 \n4-June \n13.3162 \n0.7173 \n17.0581 \n0.9754 \n14.5253 \n5-June \n13.3285 \n0.7121 \n17.0199 \n0.9763 \n14.4980 \n6-June \n13.4356 \n0.7102 \n17.1889 \n0.9821 \n14.6247 \n7-June \n13.4309 \n0.7090 \n17.1782 \n0.9785 \n14.6309 \nWeekly Average \n(3– 7June) \n13.36 \n0.71 \n17.10 \n0.98 \n14.54 \nAppr (-)/Depr (+) (%) \n0.01 \n-0.01 \n0.1 \n0.0 \n0.01 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \nInternational Commodity Price Developments \n \nPlatinum \nPalladium \nNickel \nLithium \n2024 \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n (27-31 May) \n1,038.00 \n961.50 \n20,196.00 \n13,960.00 \n3-June \n1029.50 \n912.00 \n19422.00 \n13,890.00 \n4-June \n1008.00 \n919.50 \n19068.00 \n13,860.00 \n5-June \n994.50 \n926.50 \n18288.00 \n13,830.00 \n6-June \n994.50 \n933.00 \n18531.00 \n13,760.00 \n7-June \n981.00 \n917.00 \n18031.00 \n13,720.00 \nWeekly Average \n (3-7 June) \n1,001.50 \n921.60 \n18,668.00 \n13,812.00 \nSource: BBC, KITCO and Bloomberg, 2024 \n \n \n \n \n \n \n \n \n \n \n \n \n 7 \nFigure 3: Weekly Precious Metals Price Developments (3rd – 7th June 2024) \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2024 \n \n8. TOBACCO SALES \n \nWeekly Cumulative Tobacco Sales (7th June 2024) \n \n2023 \n2024 \nVariance (%) \nCumulative Quantity Sold (million kgs) \n248,177,307 \n \n181,535,957 \n-26.85 \nAverage Price (US$/kg) \n3.02 \n3.49 \n15.56 \nCumulative value (US$ million) \n748,505,281 \n632,699,362 \n-15.47 \nSource: Tobacco Industry and Marketing Board, 2024 \n960\n980\n1,000\n1,020\n1,040\n3-Jun\n4-Jun\n5-Jun\n6-Jun\n7-Jun\nUS$/tonne\nPlatinum\n905\n910\n915\n920\n925\n930\n935\n940\n3-Jun\n4-Jun\n5-Jun\n6-Jun\n7-Jun\nUS$/tonne\nPalladium\n17,500\n18,000\n18,500\n19,000\n19,500\n20,000\n3-Jun\n4-Jun\n5-Jun\n6-Jun\n7-Jun\nUS$/tonne\nNickel\n13,600\n13,700\n13,800\n13,900\n14,000\n3-Jun\n4-Jun\n5-Jun\n6-Jun\n7-Jun\nUS$/tonne\nLithium", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_7_JUNE_2024_Volume_26_Number_23.pdf"}
{"doc_id": "e2c1b8aba2ab4c0a7c4fa3a2e08347f3", "text": "Vol. 27 No. 47 \n \nWeek Ending \n21st November 2025 \n \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n \n1 \n1. OVERVIEW \nThis report provides key developments in the monetary and financial sectors of the economy during the week \nending 21 November 2025. It covers updates on domestic money and capital markets, national payment \nsystems, exchange rates and global commodity prices. \nDuring the week ending 21 November 2025, both the local and foreign currency deposit rates remained \nunchanged across all tenors. Meanwhile, local currency lending rates for all clients increased during the same \nweek. Foreign currency lending rates for both individual and corporate clients, however decreased during the \nweek under review. \nThe Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) exhibited bullish \nsentiments, adding 2.39% and 5.90% to close at 220.53 points and 166.32 points, respectively during the week \nunder review. \nThe total value of transactions processed through the National Payment Systems platforms increased by \n37.87% from ZiG30.45 billion reported in the previous week to ZiG41.98 billion. However, the volume of \ntransactions processed decreased by 1.93% from 15.96 million to 15.66 million during the same period. The \nlargest share of transactional values was processed through the Real-Time Gross Settlement (RTGS) system, \naccounting for 81.00%, while mobile money accounted for 83.52% of the transaction volume. \nOn the interbank market, the Zimbabwe Gold Currency (ZiG) continued to strengthen against the U.S. dollar, \nappreciating by 0.13%, from an average of ZiG26.37 per US$1 in the previous week to ZiG26.33 per US$1 \nduring the week under analysis. \nDuring the week ending 21st November 2025, average prices for gold, platinum, palladium, nickel, and crude \noil softened. Lithium prices, however, increased during the week under analysis. Lithium prices surged as \nsupply constraints intensified in China, coupled with demand growth for electric vehicles and energy storage \nsystems. \nDuring the week under review, gold prices declined due to US dollar appreciation and uncertainty over the \nFederal Reserve's next policy move. Similarly, palladium prices fell due to growing uncertainty surrounding \nthe global demand following economic slowdowns in the automotive sector. Nickel prices continued on a \nnegative trajectory, decreasing by 2.92% on account of rising global supplies following Indonesia’s extensive \nrefinery expansion. Brent crude oil prices retreated amid fears of an oversupply in crude oil and fuel \ninventories. \n \n \n \n \n \n \n \n \n2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n31 Oct 2025 \n07 Nov 2025 \n14 Nov 2025 \n21 Nov 2025 \nSavings \n \n \n \n \nMinimum \n3.75 \n3.97 \n3.75 \n3.75 \nMaximum \n4.08 \n4.32 \n4.08 \n4.08 \n1-month deposit \n \n \n \n \nMinimum \n6.63 \n6.63 \n6.63 \n6.63 \nMaximum \n11.10 \n11.10 \n11.10 \n11.10 \n3-months deposit \n \n \n \n \nMinimum \n6.90 \n6.90 \n6.90 \n6.90 \nMaximum \n10.79 \n10.79 \n10.79 \n10.79 \n6-months deposit \n \n \n \n \nMinimum \n6.51 \n6.51 \n6.51 \n6.51 \nMaximum \n10.39 \n10.39 \n10.39 \n10.39 \n12-months deposit \n \n \n \n \nMinimum \n6.52 \n6.52 \n6.52 \n6.52 \nMaximum \n11.10 \n11.10 \n11.10 \n11.10 \nOver 1 year \n \n \n \n \nMinimum \n6.53 \n6.53 \n6.53 \n6.53 \nMaximum \n11.11 \n11.11 \n11.11 \n11.11 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n31 Oct 2025 \n07 Nov 2025 \n14 Nov 2025 \n21 Nov 2025 \nSavings \n \n \n \n \nMinimum \n1.61 \n1.48 \n1.61 \n1.61 \nMaximum \n1.94 \n1.93 \n1.94 \n1.94 \n1-month deposit \n \n \n \n \nMinimum \n3.92 \n3.97 \n3.92 \n3.92 \nMaximum \n6.78 \n6.78 \n6.78 \n6.78 \n3-month deposit \n \n \n \n \nMinimum \n4.46 \n4.46 \n4.46 \n4.46 \nMaximum \n7.59 \n7.59 \n7.59 \n7.59 \n6-month deposit \n \n \n \n \nMinimum \n4.26 \n4.26 \n4.26 \n4.26 \nMaximum \n7.76 \n7.76 \n7.76 \n7.76 \n12-Month deposit \n \n \n \n \nMinimum \n4.56 \n4.56 \n4.56 \n4.56 \nMaximum \n8.00 \n8.00 \n8.00 \n8.00 \nOver 1 year \n \n \n \n \nMinimum \n4.67 \n4.67 \n4.67 \n4.67 \nMaximum \n7.72 \n7.72 \n7.72 \n7.72 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n \n3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n31 Oct 2025 \n07 Nov 2025 \n14 Nov 2025 \n21 Nov 2025 \nIndividuals \n \n \n \n \nMinimum \n43.54 \n43.50 \n43.49 \n43.53 \nMaximum \n49.18 \n49.19 \n49.19 \n49.23 \nCorporates \n \n \n \n \nMinimum \n40.46 \n40.44 \n40.42 \n40.47 \nMaximum \n46.40 \n46.30 \n46.38 \n46.57 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n31 Oct 2025 \n07 Nov 2025 \n14 Nov 2025 \n21 Nov 2025 \nIndividuals \n \n \n \n \nMinimum \n13.68 \n13.61 \n13.62 \n13.61 \nMaximum \n17.86 \n17.84 \n17.83 \n17.82 \nCorporates \n \n \n \n \nMinimum \n10.22 \n10.23 \n10.23 \n10.19 \nMaximum \n16.04 \n15.97 \n15.97 \n15.94 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending \nrates \n31 Oct 2025 \n07 Nov 2025 \n14 Nov 2025 \n21 Nov 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n3. EQUITY MARKETS \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG billion) \nMarket \nTurnover \n(ZiG million) \nVolume of \nShares \n(million) \n31-Oct-25 \n213.68 \n211.34 \n216.72 \n242.38 \n100.11 \n115.11 \n67.71 \n24.11 \n12.08 \n07-Nov-25 \n211.65 \n208.74 \n214.51 \n242.68 \n100.11 \n115.43 \n66.64 \n87.54 \n9.4 \n14-Nov-25 \n215.39 \n212.04 \n217.54 \n248.36 \n100.11 \n109.09 \n67.74 \n167.62 \n47.57 \n21-Nov-25 \n220.53 \n216.15 \n222.09 \n258.13 \n100.11 \n109.09 \n69.42 \n67.31 \n18.89 \nWeekly \nChange (%) \n2.39 \n1.94 \n2.09 \n3.93 \n0.00 \n0.00 \n2.48 \n(59.84) \n(60.29) \nSource: Zimbabwe Stock Exchange, 2025 \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n31-Oct-25 \n159.91 \n1.91 \n0.69 \n2.93 \n07-Nov-25 \n163.17 \n1.95 \n1.66 \n4.24 \n14-Nov-25 \n157.06 \n1.87 \n2.32 \n23.62 \n21-Nov-25 \n166.32 \n1.98 \n2.38 \n19.84 \nWeekly Change (%) \n5.90 \n5.88 \n2.59 \n(16.00) \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n \n \n \n \n \n4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n0\n50,000\n100,000\n150,000\n200,000\n250,000\n300,000\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\nZiG Thousands\nZSE Market Turnover \n40\n45\n50\n55\n60\n65\n70\n75\n80\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\nZiG Billion\nZSE Market Capitalisation \n1.3\n1.4\n1.5\n1.6\n1.7\n1.8\n1.9\n2\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\nUS$ Billion\nVFEX Market Capitalisation \n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n110\n115\n120\n125\n130\n135\n140\n145\n150\n155\n160\n165\n170\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\nIndex\nVFEX All Share Index \n0\n500\n1000\n1500\n2000\n2500\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\nUS$ Thousand\nVFEX Market Turnover \n \n \n5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n31-Oct 2025 \n07-Nov 2025 \n14-Nov 2025 \n21-Nov 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.57 \n1.57 \n1.57 \n1.57 \nPetrol Blend E5/ litre \n1.57 \n1.54 \n1.54 \n1.54 \nLP Gas / kg \n1.48 \n1.43 \n1.43 \n1.43 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n64.41 \n63.87 \n63.57 \n63.14 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n17-Nov-25 \n4,071.10 \n3.28 \n3.62 \n0.1243 \n0.1374 \n18-Nov-25 \n4,072.50 \n3.27 \n3.62 \n0.1244 \n0.1375 \n19-Nov-25 \n4,060.85 \n3.26 \n3.60 \n0.1240 \n0.1371 \n20-Nov-25 \n4,126.95 \n3.33 \n3.68 \n0.1261 \n0.1393 \n21-Nov-25 \n4,090.60 \n3.29 \n3.63 \n0.1249 \n0.1381 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n14 November 2025 \nWEEK ENDING \n21 November 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n22,996,771,366.32 \n34,001,561,122.58 \n47.85 \nOf which ZiG \n13,219,719,993.79 \n11,182,780,076.42 \n(15.41) \nOf which US$ transactions \n(ZiG Equivalent) \n9,777,051,372.53 \n22,818,781,046.16 \n133.39 \nPOS \n1,580,944,782.35 \n1,901,814,111.49 \n20.30 \nATM \n1,174,309,238.69 \n1,726,594,930.25 \n47.03 \nMOBILE BANKING \n372,370,582.58 \n348,718,303.00 \n(6.35) \nMOBILE MONEY \n4,089,494,947.02 \n3,755,551,599.75 \n(8.17) \nZIPIT MOBILE \n232,313,322.99 \n241,925,151.02 \n4.14 \nTOTAL \n30,446,204,239.95 \n41,976,165,218.08 \n37.87 \n \nVOLUMES \n \nRTGS \n120,181 \n164,777 \n37.11 \nOf which ZiG \n45,015 \n 55,624 \n23.57 \nOf which US$ \n75,166 \n 109,153 \n45.22 \nPOS \n1,347,563 \n1,600,869 \n18.80 \nATM \n134,065 \n192,787 \n43.80 \nMOBILE BANKING \n426,701 \n335,311 \n(21.42) \nMOBILE MONEY \n13,686,886 \n13,076,911 \n(4.46) \nZIPIT MOBILE \n249,578 \n286,802 \n14.91 \nTOTAL \n15,964,974 \n15,657,457 \n(1.93) \n \n \n6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n17-Nov-25 \n18-Nov-25 \n19-Nov-25 \n20-Nov-25 \n21-Nov-25 \n1.00Oz \n \n \n \n \n \nUS$ \n4,274.66 \n4,276.13 \n4,263.89 \n4,333.30 \n4,295.13 \nZiG \n112,624.76 \n112,495.44 \n112,078.97 \n114,377.82 \n113,055.55 \n0.50Oz \n \n \n \n \n \nUS$ \n2,137.33 \n2,138.06 \n2,131.95 \n2,166.65 \n2,147.57 \nZiG \n56,312.38 \n56,247.72 \n56,039.49 \n57,188.91 \n56,527.78 \n0.25Oz \n \n \n \n \n \nUS$ \n1,068.66 \n1,069.03 \n1,065.97 \n1,083.32 \n1,073.78 \nZiG \n28,156.19 \n28,123.86 \n28,019.74 \n28,594.46 \n28,263.89 \n0.10Oz \n \n \n \n \n \nUS$ \n427.47 \n427.61 \n426.39 \n433.33 \n429.51 \nZiG \n11,262.48 \n11,249.54 \n11,207.90 \n11,437.78 \n11,305.56 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of Foreign Currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(10 Nov – 14 Nov) \n \n26.3663 \n \n1.5374 \n \n34.6652 \n \n1.8623 \n \n30.5523 \n17-Nov \n26.3471 \n1.5392 \n34.6479 \n1.866 \n30.5680 \n18-Nov \n26.3078 \n1.5288 \n34.6276 \n1.8621 \n30.5105 \n19-Nov \n26.2856 \n1.5295 \n34.5421 \n1.8551 \n30.4519 \n20-Nov \n26.3951 \n1.5337 \n34.4575 \n1.8628 \n30.3966 \n21-Nov \n26.3218 \n1.5258 \n34.4606 \n1.8577 \n30.3727 \nWeekly Average \n(17 Nov – 21 Nov) \n26.3315 \n \n1.5314 \n34.5471 \n \n1.8607 \n \n30.4599 \n \nAppr (-)/Depr (+) (%) of the \nZiG \n(0.13) \n(0.39) \n(0.34) \n(0.09) \n(0.30) \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(10 Nov – 14 Nov) \n4,140.66 \n1,584.80 \n1,436.40 \n15,017.20 \n9,988.00 \n17-Nov \n4,021.80 \n1,525.00 \n1,382.00 \n14,650.00 \n10,150.00 \n18-Nov \n4,092.00 \n1,546.00 \n1,418.00 \n14,638.00 \n10,240.00 \n19-Nov \n4,069.80 \n1,563.00 \n1,400.00 \n14,650.00 \n10,290.00 \n20-Nov \n4,048.30 \n1,507.00 \n1,368.00 \n14,501.00 \n10,330.00 \n21-Nov \n4,054.70 \n1,533.00 \n1,396.00 \n14,455.00 \n10,390.00 \nWeekly Average \n(17 Nov – 21 Nov) \n4,057.32 \n1,534.80 \n1,392.80 \n14,578.80 \n10,280.00 \nWeekly change (%) \n(2.01) \n(3.15) \n(3.04) \n(2.92) \n2.92 \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n \n7 \nFigure 3: Average Weekly International Commodity Price Developments (15th August 2025– 21st November 2025) \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \nRESERVE BANK OF ZIMBABWE \nNOVEMBER 2025 \n3,000\n3,200\n3,400\n3,600\n3,800\n4,000\n4,200\n4,400\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\nUS$/oz\nGold\n60\n61\n62\n63\n64\n65\n66\n67\n68\n69\n70\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\nUS$/oz\nCrude Oil \n700\n900\n1100\n1300\n1500\n1700\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\nUS$/oz\nPlatinum\n700\n900\n1100\n1300\n1500\n1700\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\nUS$/oz\nPalladium\n14,300\n14,500\n14,700\n14,900\n15,100\n15,300\n15,500\n15,700\n15,900\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\nUS$/oz\nNickel \n7,900\n8,400\n8,900\n9,400\n9,900\n10,400\n10,900\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\nUS$/oz\nLithium", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_21_NOVEMBER_2025_VOLUME_27_Number_47.pdf"}
{"doc_id": "f00cfa8bbcf10c08f8d4b6c093335052", "text": "Vol. 25 No. 10 \n \n \nWeek Ending \n10th March 2023 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nINTEREST RATES .................................................................................... 1 \n2. \nCLEARING AND SETTLEMENT ACTIVITY ...................................... 3 \n3. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ......... 4 \n4. \nEXCHANGE RATE DEVELOPMENTS ................................................. 6 \n5. \nEQUITY MARKETS.................................................................................. 6 \n \n \n \n \n \n1 \n1. \nINTEREST RATES \n \nLocal Currency (ZWL) Deposit Rates \n \nDuring the week ending 10th March 2023, minimum and maximum deposit rates for savings \ndeposits remained at previous week levels. The same week saw both minimum and maximum \ndeposits rates for deposits of 1-month and 3-months tenor register declines, as shown in Table 1. \n \n \nTable 1: Average Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit’s rates (%) \n \n3- Month deposit rates (%) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n10-Feb-23 \n31.18 \n34.00 \n71.29 \n82.17 \n70.03 \n82.44 \n17-Feb-23 \n35.00 \n38.38 \n64.06 \n75.00 \n63.14 \n75.92 \n24-Feb-23 \n36.43 \n37.75 \n62.28 \n79.11 \n64.50 \n77.06 \n3-Mar-23 \n36.67 \n37.75 \n63.94 \n78.83 \n66.17 \n77.00 \n10-Mar-23 \n36.67 \n37.75 \n62.33 \n76,94 \n64,39 \n74,50 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nLocal Currency (ZWL) Lending Rates \n \nMinimum commercial bank lending rates for both individual and corporate clients increased, \nduring the week ending 10th March 2023. However, maximum lending rates for both individual \nand corporate clients declined in the same week, as shown in Table 2. \n \nTable 2: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n10-Feb-23 \n74.14 \n115.32 \n106.68 \n184.89 \n17-Feb-23 \n72.55 \n114.77 \n102.88 \n178.55 \n24-Feb-23 \n68.85 \n108.73 \n86.23 \n169.40 \n3-Mar-23 \n60.21 \n112.78 \n80.88 \n166.90 \n10-Mar-23 \n72.27 \n111.92 \n81.69 \n166.12 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \n \n2 \nForeign Currency (USD) Deposit Rates \n \nDuring the week under review, average minimum deposit rates for savings deposits softened, \nwhile those for deposits of 1-month and 3-month tenor increased. Maximum deposit rates for \nsavings deposits remained at previous week levels, while those for deposits of 1-month and 3-\nmonth tenor declined during the same week, as shown in Table 3. \n \n \nTable 3: Average Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit’s rates (%) \n \n3- Month deposit rates (%) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n10-Feb-23 \n0.91 \n1.22 \n2.94 \n4.28 \n2.90 \n4.22 \n17-Feb-23 \n1.27 \n1.69 \n3.00 \n4.53 \n3.38 \n5.07 \n24-Feb-23 \n1.27 \n1.69 \n2.94 \n4.69 \n3.30 \n5.03 \n3-Mar-23 \n1.29 \n1.69 \n2.97 \n4.58 \n3.40 \n5.03 \n10-Mar-23 \n1.27 \n1.69 \n3.00 \n4.29 \n3.55 \n4.94 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nForeign Currency (USD) Lending Rates \n \nThe week under review saw commercial bank minimum lending rates for both individual and \ncorporate clients register marginal increases. Maximum lending rates for individual clients \nincreased, while those for corporate clients declined during the same week, as shown in Table 4. \n \nTable 4: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n10-Feb-23 \n10.98 \n13.16 \n7.31 \n14.58 \n17-Feb-23 \n11.04 \n13.18 \n7.60 \n14.62 \n24-Feb-23 \n10.62 \n12.88 \n7.52 \n14.41 \n3-Mar-23 \n10.93 \n13.37 \n7.70 \n14.66 \n10-Mar-23 \n11.07 \n13.40 \n7.73 \n14.61 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n3 \n2. \nCLEARING AND SETTLEMENT ACTIVITY \n \nThe total value of transactions processed through the National Payment Systems (NPS) \namounted to ZW$555.24 billion, during the week ending 10th March 2023. This represented a \ndecrease of 20.07%, compared to ZW$694.61 billion worth of transactions processed in the \nprevious week. Real Time Gross Settlement (RTGS) transactions fell by 27.42% to ZW$405.94 \nbillion in the reporting week, from ZW$559.30 billion recorded in the previous week. In \nproportions, the NPS transaction values were distributed as follows: RTGS, 73,11%, POS, \n13.04%; Mobile, 8,48%; and ATM, 5.36%. \n \n \nFigure 1: Composition of NPS Transactions in Value Terms \n \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n \nThe volume of NPS transactions decreased by 0,07% to 12.495 million, during the week under \nreview, from 12.503 million recorded in the previous week. In terms of volume, the NPS \ntransactions were distributed as follows: Mobile, 73.40%; POS, 23,77%; RTGS, 1,79%; and \nATM, 1.04%, as shown in Figure 2. \n \n \n Figure 2: Composition of NPS Transactions in Volume Terms \n \nSource: Reserve Bank of Zimbabwe, 2023 \nRTGS\n73.11%\nPOS\n13.04%\nATM\n5.36%\nMOBILE\n8.48%\nRTGS\nPOS\nATM\nMOBILE\nRTGS, 1.79%\nPOS, 23.77%\nATM, 1.04%\nMOBILE, 73.40%\nRTGS\nPOS\nATM\nMOBILE\n \n \n4 \nTable 5: National Payment Systems Activity \nPAYMENT \nSTREAM \nWEEK ENDING \n3rd March 2023 \n \nWEEK ENDING \n10th March 2023 \n% CHANGE FROM \nLAST WEEK \nPROPORTION \n% \n \nValues in ZW$ Millions \n \n \nRTGS \n559,301.12 \n405,942.40 \n-27.42% \n73.11% \nPOS \n64,874.14 \n72,430.58 \n11.65% \n13.04% \nATM \n27,133.80 \n29,767.30 \n9.71% \n5.36% \nMOBILE \n43,305.28 \n47,098.25 \n8.76% \n8.48% \nTOTAL \n694,614.34 \n555,238.53 \n-20.07% \n100% \nVolumes \n \n \nRTGS \n327,007 \n223,068 \n-31.78% \n1.79% \nPOS \n2,886,885 \n2,970,076 \n2.88% \n23.77% \nATM \n127,268 \n129,912 \n2.08% \n1.04% \nMOBILE \n9,162,088 \n9,171,984 \n0.11% \n73.40% \nTOTAL \n12,503,248 \n12,495,040 \n-0.07% \n100% \nSource: Reserve Bank of Zimbabwe, 2023 \n \n3. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS \n \nDuring the week ending 10th March 2023, international commodity prices for platinum, \npalladium, copper, nickel, and crude oil declined. However, gold prices marginally increased. \nThe commodity price developments are shown in Table 6. \n \nTable 6: Metal and Crude Oil Prices for the week ending 10th March 2023 \n \nGold \nPlatinum \nPalladium \nCopper \nNickel \nCrude Oil \n2023 \nUS$/ounce US$/ounce US$/ounce US$/tonne US$/tonne US$/barrel \nWeekly Average (27 Feb-3 Mar 23) \n1,829.19 \n954.30 \n1,430.60 \n8,959.00 \n24,851.00 \n84.03 \n6-Mar-23 \n1,850.38 \n967.50 \n1,425.00 \n8,936.00 \n24,445.00 \n86.41 \n7-Mar-23 \n1,834.80 \n965.50 \n1,434.00 \n8,771.00 \n24,125.00 \n83.54 \n8-Mar-23 \n1,814.83 \n943.00 \n1,401.00 \n8,834.00 \n23,925.00 \n82.65 \n9-Mar-23 \n1,824.45 \n947.00 \n1,364.00 \n8,910.00 \n23,974.00 \n81.16 \n10-Mar-23 \n1,848.10 \n939.00 \n1,378.50 \n8,909.00 \n22,680.00 \n83.06 \nWeekly Average (6-10 Mar 23) \n1,834.51 \n952.40 \n1,400.50 \n8,872.00 \n23,829.80 \n83.36 \nWeekly Change (%) \n0.29 \n-0.20 \n-2.10 \n-0.97 \n-4.11 \n-0.79 \nSource: BBC, KITCO and Bloomberg, 2023 \nGold \n \nGold prices increased by 0.29%, from US$1,829.19 per ounce in the prior week to US$1,834.51 \nper ounce, during the week ending 10th March 2023. The marginal increase was, in large part, \nunderpinned by weak U.S. economic data as investors awaited U.S. jobs data. \n \n \n \n \n \n5 \nPlatinum \nDuring the week under review, platinum prices declined by 0.20% to US$952.40 per ounce, from \nUS$954.30 per ounce recorded in the previous week. The marginal decline was reflective of a \nstronger US dollar against major currencies, a development that dampened prospects for \ninvestment demand for the metal. \n \nPalladium \nPalladium prices declined by 2.10%, from US$1,430.60 per ounce in the week ending 3rd March \n2023 to US$1,400.50 per ounce, during the reporting week. The sustained decline in the price of \nthe metal continued to be underpinned by weak global industrial demand. \n \nCopper \nCopper prices declined by 0.97%, from US$8,959.00 per tonne in the previous week to \nUS$8,872.00 per tonne, during the week ending 10th March 2023. Prices eased as a stronger US \ndollar dented buying appetite from holders of other currencies. The decline was, however, \npartially offset by expectations of an improvement in demand in China, the world’s largest metal \nconsumer. \n \nNickel \nDuring the week ending 10th March 2023, nickel prices declined by 4.11%, from US$24,851.00 \nper tonne in the preceding week to US$23,829.80 per tonne. In line with developments in the \nother metal prices, nickel prices eased on account of a stronger US dollar which made dollar \ndenominated metals less appealing to holders of other currencies. \n \nBrent Crude Oil \n \nBrent crude oil prices fell from US$84.03 per barrel in the previous week to US$83.36 per barrel, \nduring the week under review. This was due to indications of ample supplies from the U.S. \nEnergy Information Administration’s reports of inventory build-ups during the period under \nreview. \n \n \n \n \n \n \n \n \n \n6 \n4. EXCHANGE RATE DEVELOPMENTS \n \n \nInterbank Market \nThe Zimbabwe dollar (ZW$) appreciated by 1.6%, from an average of ZW$892.8117 per US$1 \nin the previous week to ZW$907.0376 per US$1, during the week ending 10th March 2023, as \nshown in Table 7. \n \nTable 7: Interbank Market Exchange Rates1 \n \nUSD \nZAR \nGBP \nBWP \nEURO \n2023 \n \n \n \n \n \nWeekly Average (27 Feb-3 Mar 23) \n892.8117 \n48.6915 \n1,071.2001 \n67.1738 \n945.9362 \n06-Mar-23 \n903.5621 \n49.7512 \n1087.1223 \n68.0941 \n961.6673 \n07-Mar-23 \n904.7156 \n49.7512 \n1089.3244 \n68.1343 \n966.8757 \n08-Mar-23 \n907.9236 \n48.7805 \n1073.0811 \n68.1881 \n956.3221 \n09-Mar-23 \n908.6308 \n49.0196 \n1077.2350 \n67.8339 \n958.7026 \n10-Mar-23 \n910.3559 \n49.1400 \n1085.3766 \n67.8376 \n963.9823 \nWeekly Average (3 Mar-10 Mar 23) \n907.0376 \n49.2885 \n1082.4279 \n68.0176 \n961.5100 \nAppr(-)/Depr(+) (%) of the ZWL \n1.6 \n1.2 \n1.0 \n1.3 \n1.6 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n5. EQUITY MARKETS \n \n \nZimbabwe Stock Exchange \nThe Zimbabwe Stock Exchange (ZSE) continued trading on a positive trajectory for the third \nconsecutive week. As a result, the ZSE All Share index gained 2.92% to close at 30 049.98 \npoints. All the major indices registered gains with the Top 10, Top 15, Medium and Small Cap \nindices adding 1.98%, 2.50%, 2.73% and 5.84% to close the week at 17 359.67 points, 20 600.50 \npoints, 65 938.99 points and 678 863.75 points, respectively. \n \nThe increase in the mainstream index was a result of share price gains for Ariston Holdings \nLimited (34.79%), Mashonaland Holdings Limited (23.37%), Nampak Zimbabwe Limited \n(23.01%), Tanganda Tea Company Limited (19.92%) and TSL Limited (17.45%). Partially \noffsetting the gains were losses in share prices for CFI Holdings Limited (14.99%), Africa Sun \nLimited (7.20%), CBZ Holdings Limited (6.63%), Ecocash Holdings Zimbabwe Limited \n(5.72%) and First Capital Bank Limited (5.63%). The resources index2 remained unchanged at \n33 482.91 points during the week under review. \n \n1 Direct quote – the amount of domestic currency needed to exchange for 1 unit of foreign currency \n2 Resource Index – Comprise RioZim Limited Share Price \n \n \n7 \nTable 8: Zimbabwe Stock Exchange Statistics3 \n \nAll Share \nIndex \nPoints \nTop 10 \nindex3 \n(points) \n \n \n \nMining \nIndex \n(points) \nGrand \nMarket \nCapitaliz\nation \n(ZWL \nbillion) \nMarket \nTurnover \n(ZWL \nmillion) \nVolume \nof Shares \n(million) \nTop 15 \nIndex3 \npoints \nMedium \nCap3 \n(points) \nSmall Cap3 \n(points) \n \n \n \n3-Feb-23 \n24,782.89 \n15,222.34 \n17,012.45 \n50,707.50 \n504,953.31 \n25,505.95 \n2,673.14 \n5,166.00 \n69.29 \n10-Feb-23 \n29,944.34 \n19,085.82 \n21,136.88 \n55,596.86 \n518,724.23 \n29,116.96 \n3,226.91 \n9,865.72 \n56.27 \n17-Feb-23 \n27,301.03 \n16,645.38 \n18,920.78 \n56,883.05 \n566,763.43 \n29,116.96 \n2,916.51 \n8,164.24 \n28.70 \n24-Feb-23 \n28,033.96 \n16,757.59 \n19,350.07 \n60,929.82 \n626,212.55 \n29,207.92 \n2,519.09 \n1,405.69 \n14.91 \n03-Mar-23 \n29,196.89 \n17,022.75 \n20,097.27 \n64,184.73 \n641428.45 \n33,482.91 \n2,522.77 \n3,794.12 \n30.08 \n10-Mar-23 \n30,049.98 \n17,359.67 \n20,600.50 \n65,938.99 \n678,863.75 \n33,482.91 \n2,602.37 \n2,664.27 \n29,14 \n% Change \n2.92 \n1.98 \n2.50 \n2.73 \n5.84 \n 0.00 \n3.16 \n-29.78 \n-3.12 \nSource: Zimbabwe Stock Exchange (ZSE), 2023 \n \nFigure 3 shows the trend in daily market turnover for the period from 6th May 2022 to 10th March \n2023. \n \nFigure 3: Zimbabwe Stock Exchange All Share and Top 10 Indices \nSource: Zimbabwe Stock Exchange, 2023 \n \n \n \n \n \n \n \n \n \n \n \n3 The Zimbabwe Stock Exchange (ZSE) adopted the Global Industry Classification Standards, effective from 1 January 2020.The ZSE indices \nconstitute the following categories; Top 10 Index; Top 15; Top 25; Medium cap and Small cap Indices. \n \n \n0\n4,000\n8,000\n12,000\n16,000\n20,000\n24,000\n28,000\n6-May-22\n20-May-22\n3-Jun-22\n17-Jun-22\n1-Jul-22\n15-Jul-22\n29-Jul-22\n12-Aug-22\n26-Aug-22\n9-Sep-22\n23-Sep-22\n7-Oct-22\n21-Oct-22\n4-Nov-22\n18-Nov-22\n2-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\nAll Share Index\nTop 10 Index\n \n \n8 \nMarket Turnover and Volume \n \nTrading activity on the ZSE was concentrated in some selected wealth preserving counters. As \nsuch, the cumulative volumes of shares traded declined by 3.12% to 29.14 million, compared to \n30.08 million recorded in the preceding week. The turnover value of shares traded also decreased \nby 29.78% to ZW$2.66 billion, from ZW$3.79 billion recorded in the previous week. Figure 4 \nshows the trend in daily market turnover for the period from 11th March 2022 to 10th March 2023. \n \n Figure 4: Daily Market Turnover \nSource: Zimbabwe Stock Exchange, 2023 \nMarket Capitalization \n \nZSE market capitalization stood at ZW$2.60 trillion during the reporting week, up by 3.16% \nfrom ZW$2.52 trillion recorded in the preceding week. Figure 5 shows the evolution of ZSE \nmarket capitalization for the period from 11th March 2022 to 10th March 2023. \n \nFigure 5: Daily Market Capitalization in ZW$ billions \nSource: Zimbabwe Stock Exchange, 2023 \n \n0\n2,000\n4,000\n6,000\n8,000\n10,000\n12,000\n14,000\n16,000\n18,000\n20,000\n11-Mar-22\n25-Mar-22\n08-Apr-22\n22-Apr-22\n06-May-22\n20-May-22\n03-Jun-22\n17-Jun-22\n01-Jul-22\n15-Jul-22\n29-Jul-22\n12-Aug-22\n26-Aug-22\n09-Sep-22\n23-Sep-22\n07-Oct-22\n21-Oct-22\n04-Nov-22\n18-Nov-22\n02-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\nZW$ millions\nNegotiated deal: 61.16 million Larfage\nCement\nZimbabwe\nLimited\nshares\nexchanged hands at ZW$312.65\n0\n400\n800\n1,200\n1,600\n2,000\n2,400\n2,800\n3,200\n3,600\n4,000\n11-Mar-22\n25-Mar-22\n08-Apr-22\n22-Apr-22\n06-May-22\n20-May-22\n03-Jun-22\n17-Jun-22\n01-Jul-22\n15-Jul-22\n29-Jul-22\n12-Aug-22\n26-Aug-22\n09-Sep-22\n23-Sep-22\n07-Oct-22\n21-Oct-22\n04-Nov-22\n18-Nov-22\n02-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\nBillions\n \n \n9 \nVictoria Falls Stock Exchange \n \nThe Victoria Falls Stock Exchange (VFEX) remained on a negative trajectory for the second \nconsecutive week. Resultantly, the VFEX All Share index lost 7.33% to close at 98.07 points. \nCumulatively, the volume of shares traded on the VFEX declined by 49.58% to 0.47 million, \nduring the week under analysis. In concomitance, the value of shares traded also declined by \n37.29% to US$0.20 million, during the same week. VFEX market capitalization decreased by \n7.32% to US$0.98 billion, from US$1.06 billion recorded in the previous week. Figure 6 shows \nthe trend in the VFEX All Share Index (ASI) for the period from 11th March 2022 to 10th March \n2023. \n \nFigure 6: Victoria Falls Stock Exchange All Share Index \n \nSource: Victoria Falls Stock Exchange, 2023 \n \n \nJohannesburg Stock Exchange (JSE) Developments \n \nThe Johannesburg Stock Exchange (JSE) All Share Index declined from 78,293.01 points in the \nprevious week to close at 76,454.36 points, during the week ending 10th March 2023. JSE market \ncapitalization also declined by 1.21% to ZAR21.98 trillion, during the same week. \n \n \n \n \n \n \n \n \n \n \n \n90.00\n100.00\n110.00\n120.00\n130.00\n140.00\n150.00\n11-Mar-22\n25-Mar-22\n08-Apr-22\n22-Apr-22\n06-May-22\n20-May-22\n03-Jun-22\n17-Jun-22\n01-Jul-22\n15-Jul-22\n29-Jul-22\n12-Aug-22\n26-Aug-22\n09-Sep-22\n23-Sep-22\n07-Oct-22\n21-Oct-22\n04-Nov-22\n18-Nov-22\n02-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\n \n \n10 \nTable 9: Johannesburg Stock Exchange (JSE) Statistics \nPeriod \nAll Share Index \nMarket Capitalization \n(points) \n(ZAR trillions) \n3-Feb-23 \n80,240.92 \n23.08 \n10-Feb-23 \n78,985.35 \n22.87 \n17-Feb-23 \n79,271.78 \n22.93 \n24-Feb-23 \n76,937.77 \n22.23 \n03-Mar-23 \n78,293.01 \n22.25 \n10-Mar-23 \n76,454.36 \n21.98 \n% Change \n-2.34 \n \n -1.21 \nSource:https://www.jse.co.za/services/market-data/market-statistics, 2023 \n \n \nFigure 7: Johannesburg Stock Exchange (JSE) All Share Index \nSource:https://www.jse.co.za/services/market-data/market-statistics,2023 \n \n \n \n \n \n \n \n \nRESERVE BANK OF ZIMBABWE \n 60.00\n 65.00\n 70.00\n 75.00\n 80.00\n 85.00\n11-Mar-22\n25-Mar-22\n8-Apr-22\n22-Apr-22\n6-May-22\n20-May-22\n3-Jun-22\n17-Jun-22\n1-Jul-22\n15-Jul-22\n29-Jul-22\n12-Aug-22\n26-Aug-22\n9-Sep-22\n23-Sep-22\n7-Oct-22\n21-Oct-22\n4-Nov-22\n18-Nov-22\n2-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\n \n \n11 \n APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR MAINFX4 AND SMEFX5 \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n4 Main Foreign Currency Auction \n5 Small and Medium Enterprises Foreign Currency Auction \n \nMAINFX \n 17-Feb-23 24-Feb-23 03-Mar-23 10-Mar-23 \n \n SMEFX \n 17-Feb-23 24-Feb-23 03-Mar-23 10-Mar-23 \nTotal \nBids (US$ dollars) \n19,718,948,31 \n18,253,090.41 \n15,396,789.23 \n15,934,169.51 \n1,962,394.00 \n1,869,245.41 \n2,195,734.20 \n2,172,305.53 \nAmount Allotted \n(US$ dollars) \n18,443,098.62 \n17,818,400.18 \n15,396,789.23 \n15,934,169.51 \n1,811,479.70 \n1,814,191.43 \n2,165,675.36 \n2,144,924.87 \nHighest Rate \n935 \n950 \n990 \n996 \n930 \n980 \n990 \n995 \nLowest Bid \nRate \n85 \n875 \n885 \n900 \n855 \n875 \n885 \n900 \nLowest Bid Rate \nAllotted \n855 \n875 \n885 \n900 \n855 \n875 \n885 \n900 \nWeighted Average \nRate \n856.8403 \n881.7513 \n892.6349 \n907.9236 \n856.8403 \n881.7513 \n892.6349 \n907.9236 \nNumber of Bids \nReceived \n225 \n252 \n182 \n202 \n271 \n262 \n216 \n201 \nNumber of Bids \nRejected \n9 \n10 \n8 \n12 \n5 \n6 \n7 \n7 \n \n \n12 \n APPENDIX 2: SUMMARY OF FOREIGN CURRENCY AUCTION ALLOTMENTS BY PURPOSE \nSource: Reserve Bank of Zimbabwe, 2023 \nPurpose \nMAINFX \n 17-Feb-23 24-Feb-23 03-Mar-23 10-Mar-23 \nSMEFX \n 17-Feb-23 24-Feb-23 03-Mar-23 10-Mar-23 \nRaw Materials \n \n10,000,202.79 \n9,494,073.30 \n7,856,434.10 \n7,959,704.89 \n627,827.09 \n461,549.44 \n652,589.50 \n630,795.73 \nMachinery and \nEquipment \n2,649,877.10 \n2,286,372.19 \n2,891,433.86 \n3,262,466.97 \n497,787.04 \n573,835.73 \n525,704.45 \n630,601.33 \nConsumables \n(Incl. Spares, \nTyres, \nPackaging) \n1,096,000.56 \n1,263,725.85 \n1,264,055.69 \n966,846.51 \n145,787.04 \n271,121.06 \n339,961.23 \n230,563.99 \nPharmaceuticals \nand Chemicals \n476,325.00 \n638,772.41 \n353,928.77 \n410,374.94 \n95,150.16 \n66,306.19 \n85,531.27 \n84,198.09 \nServices \n(Loans, \nDividends and \nDisinvestments) \n1,611,306.39 \n1,689,705.06 \n1,333,618.55 \n1,306,547.18 \n209,979.44 \n232,887.33 \n \n197,421.92 \n208,993.30 \nRetail and \nDistribution \n2,124,303.39 \n1,885,312.83 \n991,023.07 \n1,182,639.25 \n170,889.75 \n138,759.60 \n251,868.14 \n347,457.00 \nFuel, Electricity \nand Gas \n- \n- \n- \n- \n9,331.86 \n- \n9,860.16 \n3,409.13 \nPaper and \nPackaging \n485,083.39 \n560,438.54 \n706,295.19 \n845,589.77 \n55,465.81 \n69,732.08 \n102,738.69 \n35,906.30 \nTOTAL \n18,443,08.62 \n17,818,400.18 15,396,789.23 15,934,169.51 \n1,811,479.70 \n1,814,191.43 \n2,165,675.36 \n2,144,924.87", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_10_March_2023_Volume_25_Number_10_Final.pdf"}
{"doc_id": "a76569b09ec2992844660725a7e72909", "text": "Monetary Policy\nReview\nMay 2011\nMonetary Policy\nReview\nMay 2011\nMonetary Policy Review May 2011\n© South African Reserve Bank\nAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by \nany means, electronic, mechanical, photocopying, recording or otherwise, without fully acknowledging the Monetary Policy \nReview of the South African Reserve Bank as the source. The contents of this publication are intended for general information \nonly and are not intended to serve as financial or other advice. While every precaution is taken to ensure the accuracy of \ninformation, the South African Reserve Bank shall not be liable to any person for inaccurate information or opinions contained \nin this publication.\nEnquiries relating to this Review should be addressed to:\n\t\nAdviser to the Governor and Chief Economist\n\t\nResearch Department\n\t\nSouth African Reserve Bank\n\t\nP O Box 427\n\t\nPretoria 0001\n\t\nTel. 27 12 313-3668\nhttp://www.reservebank.co.za\t\n\t\n\t\n\t\n\t\n\t\n ISSN: 1609-3194\nMonetary Policy Review May 2011\nContents\nMonetary Policy Review\nIntroduction....................................................................................................................... \t\n1\nRecent developments in inflation...................................................................................... \t\n2\n\t\nThe evolution of inflation indicators............................................................................. \t\n2\n\t\nFactors affecting inflation............................................................................................ \t\n9\nMonetary policy................................................................................................................ \t\n23\nThe outlook for inflation..................................................................................................... \t\n27\n\t\nInternational outlook................................................................................................... \t\n27\n\t\nOutlook for domestic demand and supply.................................................................. \t\n32\n\t\nIndicators of inflation expectations.............................................................................. \t\n34\n\t\nThe South African Reserve Bank inflation forecast...................................................... \t\n35\nAssessment and conclusion............................................................................................. \t\n36\nStatements issued by Gill Marcus, Governor of the South African Reserve Bank\nStatement of the Monetary Policy Committee\n18 November 2010........................................................................................................... \t\n38\nStatement of the Monetary Policy Committee\n20 January 2011............................................................................................................... \t\n42\nStatement of the Monetary Policy Committee\n24 March 2011.................................................................................................................. \t\n46\nStatement of the Monetary Policy Committee\n12 May 2011..................................................................................................................... \t\n50\nAbbreviations................................................................................................................... \t\n53\nBoxes \n1\t\nWhat price-level data can tell us about pricing conduct.......................................... \t\n8\n2 \t\nThe rand as a carry trade target............................................................................\t\n15\n3 \t\nSovereign debt in the peripheral euro area.............................................................\t\n29\nFigures \n1\t\nConsumer price inflation: Targeted inflation ........................................................... \t\n2\n2\t\nTargeted inflation and food inflation........................................................................ \t\n3\n3\t\nYellow maize prices................................................................................................ \t\n4\n4\t\nSouth African petrol price....................................................................................... \t\n4\n5\t\nPPI for domestic output and imported commodities............................................... \t\n7\n6\t\nFood prices in the PPI and CPI............................................................................... \t\n7\n7\t\nPrice of Brent crude oil........................................................................................... \t\n11\n8\t\nExchange rates of the rand..................................................................................... \t\n14\n9\t\nReal effective exchange rates................................................................................. \t\n15\nB2.1\t Rand carry returns and exchange rate volatility....................................................... \t\n16\n10\t\nRemuneration per worker, labour productivity and unit labour cost in the \n\t\nformal non-agricultural sector................................................................................. \t\n17\n11\t\nAverage annual inflation and wage settlements...................................................... \t\n17\n12\t\nShare price indices................................................................................................. \t\n20\n13\t\nHouse prices.......................................................................................................... \t\n21\n14\t\nGrowth in monetary aggregates............................................................................. \t\n23\n15\t\nBanks’ loans and advances by type....................................................................... \t\n23\n16\t\nThe repurchase rate and other short-term interest rates......................................... \t\n24\nMonetary Policy Review May 2011\nB3.1\t Gross government debt to GDP and net government debt to \n\t\ngovernment revenues, 2011.................................................................................... \t\n30\nB3.2\t Sovereign 5-year CDS spreads............................................................................... \t\n31\n17\t\nSelected indicators of global economic activity....................................................... \t\n32\n18\t\nReal GDP growth forecast...................................................................................... \t\n32\n19\t\nComposite leading business cycle indicator........................................................... \t\n33\n20\t\nBER surveys of headline CPI inflation expectations................................................. \t\n34\n21\t\nBreak-even inflation rates........................................................................................ \t\n35\n22\t\nTargeted inflation forecast....................................................................................... \t\n36\nTables \n1\t\nContributions to CPI inflation.................................................................................. \t\n2\n2\t\nCPI: Goods and services inflation........................................................................... \t\n5\n3\t\nThe effect of food, petrol and electricity prices on headline inflation....................... \t\n5\n4\t\nContributions to administered prices...................................................................... \t\n6\nB1.1\t Comparison of findings of CPI microdata analyses................................................. \t\n9\n5\t\nAnnual percentage change in real GDP and consumer prices................................ \t\n10\n6\t\nSelected central bank interest rates........................................................................ \t\n12\nB2.1\t Returns to the carry trade (weekly trading) ............................................................. \t\n16\n7\t\nAverage percentages of wage settlement by major sector in 2010......................... \t\n18\n8\t\nEmployment in formal non-agricultural industries.................................................... \t\n18\n9\t\nGrowth in real GDP and expenditure components.................................................. \t\n19\n10\t\nReal value of building plans passed and buildings completed in \nlarger municipalities................................................................................................ \t\n21\n11\t\nPublic finance data................................................................................................. \t\n22\n12\t\nIMF projections of world growth and inflation for 2011 and 2012*........................... \t\n27\n13\t\nReuters survey of CPI inflation forecasts: April 2011*.............................................. \t\n35\n1\nMonetary Policy Review May 2011\nMonetary Policy Review\nIntroduction\nThe global recovery has remained on track in the period since the previous Monetary Policy \nReview was published in October 2010, but a number of vulnerabilities continue to characterise \nthe global economy. The unresolved European sovereign debt crisis, rising international \ncommodity prices and the tragic events in Japan may moderate the pace of recovery in the near \nterm. Global inflation risks have also increased, particularly in emerging-market economies, a \nnumber of which have tightened their monetary policy stance in recent months. Pressures from \ndevelopments in international commodity markets are likely to pose an increasing risk to both \nthe global and domestic inflation outlook. The acceleration in international oil prices that was \nevident in the latter part of 2010 in response to strong global demand has been reinforced by \nthe geo-political events in the Middle East and North Africa (MENA), which have raised concerns \nabout the security of oil supplies. In a number of mature economies the process of withdrawing \nfiscal stimulus continued, and the first step in raising interest rates from exceptional lows was \ntaken when the European Central Bank (ECB) increased its key policy rate in April 2011. \nThe domestic growth prognosis has improved, although growth remains below potential. \nThe recovery in household consumption expenditure has been sustained and has been the \nmain driver of growth, but growth in fixed capital formation has remained weak. At this stage \nthere are no discernible inflationary pressures coming from the demand side of the economy, \nalthough the high, but moderating, level of real wage settlements and developments in food and \ncommodity prices have been significant upside risks to the domestic inflation outlook. The main \nrisks to the inflation outlook in this regard remain food and administered prices, and oil prices in \nparticular. In addition, the potential exists for there to be adjustments in the exchange rate that \nwould impact on the inflation outlook. \nThis Monetary Policy Review analyses the latest developments in inflation and the factors that \nimpact on it. It reviews recent monetary policy developments, and presents the outlook for \ninflation and the South African Reserve Bank’s (the Bank) inflation and growth forecasts. In \naddition, a number of topical issues are addressed in boxes. The first box considers what micro \nprice data say about pricing conduct and how findings on pricing conduct from South Africa’s \nconsumer price microdata compare to international stylised facts. The second box reports \non research undertaken on the rand as a carry trade target, and the third on sovereign debt \ndevelopments in the peripheral euro area. \nMonetary Policy Review May 2011\n2\nRecent developments in inflation\nThis section reviews recent trends in the main inflation indices and analyses developments in \nthe main factors impacting on inflation in South Africa.\nThe evolution of inflation indicators\nThe year-on-year percentage change in the headline consumer price index for all urban areas \n(CPI), the measure of inflation targeted by the Bank, increased from a low of 3,2 per cent in \nSeptember 2010 to 4,2 per cent in April 2011 (Figure 1). Headline inflation has remained within \nthe inflation target range of 3 to 6 per cent for 15 months since moving back to within the range \nin February 2010. \nThe main drivers of the trend in headline inflation since September 2010 were the food and non-\nalcoholic beverages, and transport categories (Table 1). The contribution from the food and non-\nalcoholic beverages category increased from 0,2 percentage points between September and \nDecember 2010 to 0,7 percentage points in April 2011. \nTable 1\t\nContributions to CPI inflation\nPercentage change over 12 months* and percentage points\n2010\n2011\nAug\nSep\nOct\nNov\nDec\nJan\nFeb\nMar\nApr\nTotal*......................................................\n3,5\n3,2\n3,4\n3,6\n3,5\n3,7\n3,7\n4,1\n4,2\nOf which:\nFood and non-alcoholic beverages.........\n0,3\n0,2\n0,2\n0,2\n0,2\n0,5\n0,6\n0,8\n0,7\nAlcoholic beverages and tobacco...........\n0,4\n0,4\n0,4\n0,4\n0,4\n0,4\n0,4\n0,3\n0,3\nHousing and utilities................................ \n1,4\n1,5\n1,5\n1,5\n1,5\n1,4\n1,5\n1,5\n1,5\nHealth.....................................................\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\nTransport.................................................\n0,2\n0,0\n0,3\n0,4\n0,3\n0,4\n0,4\n0,6\n0,6\nEducation................................................\n0,2\n0,2\n0,2\n0,2\n0,2\n0,2\n0,2\n0,2\n0,2\nMiscellaneous goods and services..........\n0,8\n0,7\n0,7\n0,7\n0,7\n0,5\n0,5\n0,5\n0,5\nOther......................................................\n0,1\n0,1\n0,0\n0,1\n0,1\n0,2\n0,0\n0,1\n0,3\nSource:\t Statistics South Africa\nPercentage change over 12 months\n0\n2\n4\n6\n8\n10\n12\n14\nFigure 1 \nConsumer price inflation: Targeted inflation*\n* CPIX for metropolitan and other urban areas until the end of 2008; CPI for all urban \n areas thereafter\nSource: Statistics South Africa\n2003\n2006\n2004\n2005\n2007\n2008\n2009\n2010\n2011\n3\nMonetary Policy Review May 2011\nThe contribution from the transport category increased from 0 percentage points in September \n2010 to 0,6 percentage points in April 2011, largely as a result of higher petrol prices. The \ncontributions from the housing and utilities, alcoholic beverages and tobacco, health and \neducation categories remained broadly unchanged during the review period, although the \nhousing and utilities category remained the single largest contributor to overall headline \ninflation. The contribution of the miscellaneous category declined from 0,7 percentage points \nduring September–December 2010 to 0,5 percentage points in January–April 2011. \nInflationary pressure from food items has increased in the period under review (Figure 2). \nThe year-on-year inflation rate for all food items rose from 1,2 per cent in September 2010 to \n5,1 per cent in March 2011, before declining slightly to 4,8 per cent in April. Most categories \nincluded in the CPI food basket recorded positive year-on-year inflation rates in April, with \nthe most notable increases in this month being for oils and fats (22,7 per cent), and meat \n(8,3 per cent).\nMaize prices in South Africa have increased markedly since they bottomed out in June 2010 \n(Figure 3). Although domestic maize harvests have been good in recent years, international \nmaize prices have risen due to increased demand globally for meat and dairy products, \nand more recently in line with increasing oil and commodity prices. The spot price of yellow \nmaize averaged R1 361 per ton in October 2010 and had increased by approximately \n23 per cent to average R1 676 so far in May 2011. Futures prices have also increased, with the \nfutures price for July 2011 delivery rising from an average of R1 438 per ton in October 2010 to \nR1 702 in May 2011. Similarly, the July 2011 delivery price of wheat increased from an average \nof R2 791 per ton in November 2010 to an average of R3 129 per ton in May 2011. \nPercentage change over 12 months\nFigure 2 \nTargeted inflation* and food inflation\nAll food items\nOils and fats\nBread and cereals\nTargeted inflation measure\nMeat\nSugar, sweets and\ndesserts\n-20\n-10\n0\n10\n20\n30\n40\n50\n60\n70\n* CPIX for metropolitan and other urban areas until the end of 2008; CPI for all urban \n areas thereafter\nSource: Statistics South Africa\n2003\n2006\n2004\n2005\n2007\n2008\n2009\n2010\n2011\nMonetary Policy Review May 2011\n4\nTransport prices in the CPI have been impacted by rising petrol prices since the beginning \nof the fourth quarter of 2010. The price for 95 octane unleaded petrol in Gauteng Province \nincreased from 807 cents per litre in September 2010 to 1 025 cents per litre in May 2011 \n(Figure 4). Increasing international oil prices have been the main driver of petrol price increases \nsince September 2010. These increases more than offset the impact of appreciations in \nthe rand exchange rate, which occurred for six of the eight months since September 2010. \nRegulatory changes also impacted adversely on domestic petrol prices. In October 2010 the \nretail margin included in the petrol price increased by 8,5 cents per litre. In April 2011 the fuel \ntax increased by 10 cents per litre and the Road Accident Fund levy increased by 8 cents per \nlitre as announced in the National Budget speech on 23 February 2011.\n \nFigure 3 \nYellow maize prices \n2006\n2007\n2008\n2009\n2010\n2011\n2012\nRand per ton\n \nYellow maize spot price\n \nYellow maize futures prices (13 May 2011)\nSources: Grain South Africa and SAFEX\n500\n1 000\n1 500\n2 000\n2 500\nCents per litre\n2006\n2007\n2009\n2010\n2011\n2008\nFigure 4 \nSouth African petrol price\n \nPetrol price (Gauteng 95 octane)\n \nMargin\n \n \nSource: Department of Energy\n0\n200\n400\n600\n800\n1 000\n1 200\n \nFuel tax\n \nBasic fuel price\n \nRoad Accident Fund\n \nOther levies\n5\nMonetary Policy Review May 2011\nTable 2 shows the inflation rates for goods and services prices in the CPI. Goods inflation \nremained below the lower bound of the inflation target range for most of the period under \nreview, before rising to 3,0 per cent in February 2011 and further to 3,7 per cent in April. Durable \ngoods prices declined throughout the period, recording a year-on-year rate of change of \n-2,3 per cent in April 2011. Inflation rates for the non-durable goods and services categories \nhave remained positive, with non-durable goods inflation increasing from 3,7 per cent in \nSeptember 2010 to 6,8 per cent in April 2011 and services inflation declining from 5,2 per \ncent to 4,7 per cent over the same period. \nTable 2\t\nCPI: Goods and services inflation\nPercentage change over 12 months\n2010\n2011\nAug\nSep\nOct\nNov\nDec\nJan\nFeb\nMar\nApr\nHeadline CPI.........................................\n3,5\n3,2\n3,4\n3,6\n3,5\n3,7\n3,7\n4,1\n4,2\nGoods inflation.......................................\n1,9\n1,5\n1,9\n2,2\n2,0\n2,8\n3,0\n3,6\n3,7\nDurable goods...................................\n-3,1\n-3,0\n-2,0\n-2,2\n-2,3\n-2,1\n-2,6\n-2,5\n-2,3\nSemi-durable goods...........................\n-0,3\n-0,4\n0,0\n0,0\n-0,2\n-0,3\n0,7\n0,4\n1,0\nNon-durable goods............................\n4,3\n3,7\n4,0\n4,3\n4,4\n5,4\n5,8\n6,7\n6,8\nServices inflation....................................\n5,4\n5,2\n5,2\n5,3\n5,1\n4,7\n4,5\n4,6\n4,7\nSource:\t Statistics South Africa\nTable 3 considers developments in a number of measures of core inflation, calculated by excluding \nfood, petrol and electricity prices from headline inflation. If petrol prices alone were excluded, \ninflation for the remaining items in the CPI changed moderately over the period, rising from 3,4 per \ncent in September 2010 to 3,8 per cent in April 2011. The inflation rate for the CPI excluding petrol \nprices has been less than, or equal to, that of the headline CPI since October 2010, indicating the \nupward pressure that petrol prices have exerted on inflation. \nTable 3\t\nThe effect of food, petrol and energy prices on headline inflation\nPercentage change over 12 months\n2010\n2011\nAug\nSep\nOct\nNov\nDec\nJan\nFeb\nMar\nApr\nHeadline CPI........................................\n3,5\n3,2\n3,4\n3,6\n3,5\n3,7\n3,7\n4,1\n4,2\nCPI excluding petrol prices...................\n3,4\n3,4\n3,4\n3,4\n3,5\n3,4\n3,5\n3,7\n3,8\nCPI excluding food and NAB*...............\n3,9\n3,5\n4,0\n4,1\n3,9\n3,8\n3,7\n3,9\n4,0\nCPI excluding food, NAB and petrol \nprices....................................................\n3,7\n3,6\n3,8\n3,8\n3,8\n3,5\n3,4\n3,4\n3,6\nCPI excluding food, NAB, petrol and \nenergy prices........................................\n3,2\n3,2\n3,4\n3,4\n3,3\n3,0\n3,0\n3,0\n3,1\n*\t NAB: Non-alcoholic beverages\nSource:\t Statistics South Africa\nFood prices continued to put downward pressure on CPI inflation for the first part of the period, \nresulting in the inflation rate for the CPI excluding food and non-alcoholic beverage prices being \nhigher than the headline CPI rate until January 2011. This situation has reversed since March \n2011. If both petrol prices, and food and non-alcoholic beverage prices are excluded, inflation \nfor the remaining items in the CPI was higher than headline inflation until December 2010 and \nlower thereafter, reflecting the upward pressure that petrol and food prices have exerted on \ninflation in recent months. Finally, if the prices of petrol, food and non-alcoholic beverages, and \nenergy (predominantly electricity) are excluded from headline CPI, the resulting inflation rate was \nlower throughout the period under review than the rate for CPI excluding petrol, and food and \nnon-alcoholic beverage prices, reflecting the upward pressure energy prices placed on inflation.\nMonetary Policy Review May 2011\n6\nThe year-on-year inflation rate for the administered price index (API) has risen since September \n2010, mainly due to the increased contribution from petrol prices, which rose from 0,1 percentage \npoints in September 2010 to 3,7 percentage points in March and April 2011 (Table 4). The API \ninflation rate for April 2011 was 10,7 per cent, marking the seventeenth consecutive month that \nthe inflation rate for administered prices has been above the upper level of the inflation target \nrange. There has been little change in the contributions made by the items in the unregulated \ncomponent of the API since September 2010, and the contributions of most items in the regulated \ncomponent besides petrol have also remained constant. Over half of the API inflation rate in \nApril 2011 is accounted for by contributions from electricity and petrol, although these items \naccount for only a little over a third of the weight of the API.\nTable 4\t\n Contributions to administered prices\nPercentage change over 12 months* and percentage points\nWeights\n2010\n2011\nCPI\nAPI\nAug\nSep\nOct\nNov\nDec\nJan\nFeb\nMar\nApr\nRegulated component\nWater.....................................\n1,10\n7,50\n0,9\n0,9\n0,9\n0,9\n0,9\n0,9\n0,9\n0,9\n0,9\nElectricity...............................\n1,68 11,46\n3,0\n3,0\n3,0\n3,0\n3,0\n3,0\n3,0\n3,0\n2,9\nParaffin...................................\n0,16\n1,09\n0,0\n0,0\n0,0\n0,0\n0,0\n0,1\n0,1\n0,1\n0,1\nPetrol.....................................\n3,93 26,81\n1,4\n0,1\n1,3\n1,9\n1,5\n2,5\n2,7\n3,7\n3,7\nTelephone fees.......................\n1,26\n8,59\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,1\n0,1\nPostage.................................\n0,02\n0,14\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\nCellular telephone calls...........\n1,47 10,03\n-0,1\n-0,1\n-0,1\n-0,1\n-0,1\n-0,1\n-0,1\n-0,1\n-0,1\nUnregulated component\nAssessment rates..................\n2,07 14,12\n1,2\n1,2\n1,2\n1,2\n1,2\n1,2\n1,2\n1,1\n1,1\nSewage collection..................\n0,06\n0,41\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\nRefuse collection....................\n0,09\n0,61\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\nTrain fees...............................\n0,04\n0,27\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,0\nMotor vehicle licences............\n0,09\n0,61\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\nMotor vehicle registration fees.\n0,10\n0,68\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\n0,1\nTelevision licences..................\n0,13\n0,89\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\n0,0\nPrimary and secondary \nschool fees.............................\n1,28\n8,73\n0,9\n0,9\n0,9\n0,9\n0,9\n0,9\n0,9\n0,9\n0,8\nUniversity fees........................\n0,90\n6,14\n0,5\n0,5\n0,5\n0,5\n0,5\n0,5\n0,5\n0,6\n0,6\nUniversity boarding fees.........\n0,28\n1,91\n0,2\n0,2\n0,2\n0,2\n0,2\n0,2\n0,2\n0,2\n0,2\nCPI for administered prices*........ 14,66 100,00\n8,3\n7,1\n8,4\n8,9\n8,5\n9,6\n9,9\n10,9\n10,7\nDue to rounding, individual contributions may not add up to totals \nSource:\t Statistics South Africa\nThe year-on-year inflation rate measured in terms of the producer price index (PPI) for domestic \noutput has remained fairly stable since September 2010 (Figure 5). Over the year to March 2011 \nthe PPI for domestic output increased by 7,3 per cent, with the highest rates recorded for \nproducts of petroleum and coal (17,1 per cent), mining and quarrying (8,1 per cent), basic metals \n(10,2 per cent), and electricity (21,2 per cent). The inflation rate for imported commodities \nincreased from 0,7 per cent in September 2010 to 7,5 per cent in March 2011, boosted by the \nrising prices of crude oil. \n7\nMonetary Policy Review May 2011\nFigure 6 plots the year-on-year percentage changes in food prices in the domestic output PPI \nand the CPI. Food price pressures in the PPI for domestic output remain contained with the \n12-month change in the downstream prices of food at the agricultural level at -0,9 per cent in \nMarch 2011. This is the twenty-fifth consecutive month that this change has been negative. \nThe price of food at the manufacturing level has been accelerating since November 2010, but \nremained low at 2,9 per cent in March 2011.\nPercentage change over 12 months\n2007\n2008\n2009\n2010\n2011\nDetails regarding changes to the PPI in this period are documented in statistical release \nP0142.1, February 2008, issued by Statistics South Africa\nSource: Statistics South Africa\nFigure 5 \nPPI for domestic output and imported commodities\n-30\n-20\n-10\n0\n10\n20\n30\n40\n50\nDomestic output\nDomestic output: Electricity\nDomestic output: Manufacturing\nImported commodities \nPercentage change over 12 months\nFigure 6 \nFood prices in the PPI and CPI\n-20\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\n30\nPPI: Food at agricultural level\nCPI: Food\nPPI: Food at manufacturing level\n2007\n2008\n2009\n2010\n2011\nMonetary Policy Review May 2011\n8\nBox 1\t\nWhat price-level data can tell us about pricing conduct\nThe study of pricing microdata is emerging in the literature as an important method for understanding \nactual pricing conduct, and refining the modelling of pricing behaviour in macroeconomic models. \nStudies of the large price datasets used to compile consumer price index (CPI) and producer price index \n(PPI) measures have been undertaken in a number of countries. Klenow and Malin (2009, 2011) provide \na recent synopsis of a wide range of international results on micro price data research in which they \nreviewed ten stylised facts on price-setting conduct. This box discusses how findings on pricing conduct \nfrom South Africa’s pricing microdata, summarised in Creamer et al. (2011),1 compare to Klenow and \nMalin’s stylised facts. \nKlenow and Malin (2009) suggest the following “ten facts modellers may want to know about pricing”:2\n1.\t\nPrices change at least once a year (p. 45)\n2.\t\n[There is] substantial heterogeneity in the frequency of price changes across goods (p. 49)\n3.\t\nOn average, price changes are big (p. 50)\n4.\t\nMany small price changes occur (p. 51)\n5.\t\nPrice changes are typically not synchronised over the business cycle (p. 52)\n6.\t\nNeither frequency nor size is increasing in the age of the price (p. 53)\n7.\t\nSales and product turnover are often important for micro price flexibility (p. 46)\n8.\t\nReference prices are [often] stickier and more persistent than regular prices (p. 48)\n9.\t\nMore cyclical goods change prices more frequently (p. 50)\n10.\t Relative price changes are transitory (p. 51).\nCreamer et al. (2011, 6) report that individual South African prices change, on average, more frequently \nthan once per annum (Fact 1). For the CPI microdata, the average price duration is 5,0 months \n(median 3,7 months).3 The CPI data set offers evidence of a varying frequency of price changes and \nrelated price durations, over time, with a weighted average monthly price change frequency of \n17,1 per cent over the period. The CPI data also offer evidence of asymmetry in pricing as price \nincreases (11,1 per cent) occur more frequently than price decreases (6 per cent). \nA summary of selected comparative findings for CPI data is presented in Table B1.1.4 With regard \nto the frequency of price changes at the aggregate level, the finding for South Africa (17,1 per cent) \nusing CPI-weighted data would appear to be broadly similar to findings for Spain (15 per cent), the \neuro area (15,1 per cent) and France (18,9 per cent). The United States (US) economy would appear \nto have a significantly greater frequency of price changes (24,8 per cent), including higher \nfrequencies both of price increases and price decreases.5 Similarly, Brazil has experienced a \nsignificantly higher frequency of price changes (37 per cent) than South Africa, and a higher \nfrequency of both price increases and price decreases.\nThere is evidence for South Africa of substantial heterogeneity in pricing conduct across types of \ngoods and industries (Fact 2). Services prices in the CPI data change less frequently (14,9 per cent \nof the time) than goods prices (17,0 per cent). Services prices increase more frequently than goods \nprices, but decrease less frequently than goods prices. The findings on the frequency of price \nchanges by product category show that there is also considerable heterogeneity in pricing conduct \nfor different product categories.\nSouth Africa’s pricing microdata reveal relatively large price changes (Fact 3). For the CPI, the weighted \naverage magnitude of price increases is 10,7 per cent, compared to an average monthly CPI inflation \nrate of 5,4 per cent over the period. Table B1.1 shows that the average magnitude of price increases \nin South Africa is larger than for the euro area (8,2 per cent) and Spain (8,2 per cent), but smaller than \n1\t For the South African CPI microdata set used in Creamer et al. (2011), a total of around 5 million individual price \nrecords were available over the period from December 2001 to December 2007. Based on the criteria that only data \ncollected at a monthly frequency and only data with an acceptable capture status were to be included in the study, the \ndataset ultimately used comprised 3 930 977 price records. Each individual price record corresponds to a precisely \ndefined item sold in a particular outlet at a given point in time.\n2\t The list of ten facts has been drawn from Klenow and Malin (2009), but the order in which the ten facts are presented \nhas been altered to facilitate their comparison to the findings on the South African pricing microdata. More recently, in \ntheir chapter 6 in the Handbook of Monetary Economics, Klenow and Malin (2011) adjust their ten stylised facts by \ncombining facts 3 and 4 into a single statement that “price changes are big on average, but many small changes occur”. \nThis enables the authors to introduce a new tenth stylised fact, which is that “price changes are linked to wage changes”.\n3\t Such price durations are based on the direct measurement of the duration of uncensored spells during which prices are \nunchanged.\n4\t Sources for the country studies are provided in Creamer et al. (2011). Owing to the adoption of differing methodologies \nin the various studies, not all results are strictly equivalent, yet the results allow for general comparisons of pricing conduct \nin a number of economies.\n5\t An important technical reason for higher price change frequencies in the US data, as compared to the euro area and \nSouth Africa, is that the US data include a relatively large proportion of temporary sales prices, compared to other \njurisdictions. In the period under study, in South Africa, the statistical authorities initially gave no indication in the data as \nto whether or not prices were related to temporary sales, but from March 2006 it is recorded for the CPI data whether \nor not a particular price record constitutes a sales price.\n9\nMonetary Policy Review May 2011\nFactors affecting inflation\nMonetary policy decisions are made on the basis of current and expected developments in the \nwider macroeconomy. Recent developments in some of the main variables influencing inflation \nin South Africa are reviewed in this section, while the outlook for these variables and their likely \nimpact on inflation are discussed in a later section.\nthose of Brazil (16 per cent), the US (12,7 per cent) and France (12,5 per cent). The average size of price \ndecreases in South Africa (-12,3 per cent) is similar to the average size of price decreases in Brazil \n(-12,6 per cent), is larger than for the euro area (-10 per cent), France (-10 per cent) and Spain \n(-10,3 per cent), but smaller than for the US (-14,1 per cent).\nTable B1.1:\t Comparison of findings of CPI microdata analyses\nPer cent\nFrequency \nof price \nchanges\nFrequency \nof price \nincreases\nFrequency \nof price \ndecreases\nAverage \nsize of price \nincreases\nAverage size \nof price \ndecreases\nSouth Africa (2001–2007)............\n17,1\n11,1\n6,0\n10,7\n-12,3\nEuro area (1996–2001).................\n15,1\n8,3\n5,9\n8,2\n-10,0\nUnited States (1998–2003)..........\n24,8\n16,1\n13,2\n12,7\n-14,1\nSpain (1993–2001).......................\n15,0\n9,0\n6,0\n8,2\n-10,3\nFrance (1994–2003).....................\n18,9\n9,7\n6,5\n12,5\n-10,0\nBrazil (1996–2006).......................\n37,0\n22,2\n19,0\n16,0\n-12,6\nSierra Leone (1998–2003)............\n51,0\n20,1\n21,4\n \n \nSource:\t Creamer, et al. (2011)\nCreamer et al. (2011, 13) report evidence in the South African data of many small price changes (Fact 4). \nThey find that 10,56 per cent of all price changes in the CPI microdata can be described as inflation-\nindexed price changes, which they define as having a magnitude of less than, or equal to, 25 per cent of \nthe prevailing CPI inflation rate.\nThe stylised facts that price changes are not synchronised over the business cycle and that neither \nfrequency nor size is increasing in the age of the price (Facts 5 and 6) may be contradicted by evidence \nfrom the South African price microdata. Regression analysis in Creamer (2010) reveals some evidence that \nthe frequency of price increases rises with the prevailing rate of inflation. The finding for the South African \nmicrodata is that at the level of specific products in specific stores, hazard functions tend to be upward \nsloping, indicating an increasing likelihood of price changes as time passes. With regard to the relationship \nbetween the magnitude of price changes and the age of the price, the South African microdata reveal that \nthe magnitude of CPI price changes is increasing in the age of the price. This suggests time-dependence \nin pricing conduct in the South African context, as opposed to state-dependent pricing, where price \nduration is endogenous to the accumulation of shocks, rather than dependent on the passing of time. \nIn summary, there is clear confirmation that pricing conduct in South Africa is consistent with the first \nfour stylised facts (1–4) of Klenow and Malin (2009), but there is some evidence from the South African \ndata that appears to contradict stylised facts 5 and 6. The questions raised by stylised facts 7 to 10 \nhave not as yet been addressed in the South African literature. Answers to these questions would \nundoubtedly contribute further to the understanding of pricing conduct in the South African economy \nand, armed with such knowledge, further refinements could be made in the areas of macroeconomic \nmodelling and policy implementation.\nReferences\nCreamer, K. 2010. “Price Setting Conduct in South Africa 2002–2007: Implications of Microdata for \nMonetary Policy”. PhD dissertation, Faculty of Commerce, Law and Management, University of the \nWitwatersrand.\nCreamer, K, G N Farrell and N Rankin. 2011. “What Price-Level Data Can Tell Us About Pricing Conduct \nin South Africa”. Discussion Paper DP/11/04, April. Pretoria: South African Reserve Bank. \nKlenow, P and B Malin. 2009. “Microeconomic Evidence on Price-Setting”. Manuscript prepared for the \nHandbook of Monetary Economics, last modified September. Microsoft Word file.\n____. “Microeconomic Evidence on Price-Setting”. 2011. In Handbook of Monetary Economics, edited by \nB Friedman and M Woodford. Vol. 3A, Chapter 6, 231–283. Amsterdam: North-Holland.\nMonetary Policy Review May 2011\n10\nInternational economic developments\nThe global growth outcome for 2010 reflected the strong recovery in emerging and developing \ncountries, and a less impressive but improved growth performance by the advanced countries. \nThe possibility of a double-dip recession has not materialised, but the global recovery remains \nunbalanced. Advanced economies are still recovering too slowly, with output below potential \nand employment remaining weak. Housing markets continue to be depressed and banks are \nstill struggling with non-performing loans. Emerging-market and developing countries have \nexperienced better underlying growth and sounder fiscal positions, but rapid growth and strong \ncapital inflows pose inflation and overheating risks to a number of these countries. \nIn the advanced economies the recovery has become more self-sustained but growth has remained \ntoo low to close output gaps and reduce unemployment much. The International Monetary Fund \n(IMF) in its April 2011 World Economic Outlook (WEO) estimates real gross domestic product \n(GDP) growth in the United States (US) of 2,8 per cent in 2010, compared with a contraction of \n2,6 per cent in 2009 (Table 5). The recovery was supported by an easing in financial conditions, \nstrengthening in private demand and an increased contribution from net exports. In Japan, although \nthe recovery lost momentum in the second half of the year, positive economic growth of 3,9 per \ncent was recorded in 2010 compared to a contraction of 6,3 per cent in 2009. In the euro area \neconomic growth strengthened to 1,7 per cent in 2010 and became increasingly driven by private \ndemand and net exports. Growth in key economies such as Germany was robust compared to the \nstagnation experienced in the periphery. In the United Kingdom (UK) economic growth of 1,3 per \ncent was recorded in 2010, compared with a contraction of 4,9 per cent in 2009. Front-loaded fiscal \nconsolidation in the UK has dampened domestic demand and muted the recovery.\nTable 5\t\nAnnual percentage change in real GDP and consumer prices\nShare of \nglobal \nGDP*\nReal \nGDP\nConsumer \nprices\n2010\n2009\n2010\n2009\n2010\nWorld..................................................................\n100,00\n-0,5\n5,0\n2,5\n3,7\nAdvanced economies........................................\n52,3\n-3,4\n3,0\n0,1\n1,6\nUnited States..................................................\n19,7\n-2,6\n2,8\n-0,3\n1,6\nJapan..............................................................\n5,8\n-6,3\n3,9\n-1,4\n-0,7\nEuro area........................................................\n14,6\n-4,1\n1,7\n0,3\n1,6\nUnited Kingdom..............................................\n2,9\n-4,9\n1,3\n2,1\n3,3\nCanada...........................................................\n1,8\n-2,5\n3,1\n0,3\n1,8\nOther advanced economies............................\n7,5\n-1,2\n5,7\n1,5\n2,3\nEmerging-market and developing economies...\n47,7\n2,7\n7,3\n5,2\n6,2\nSub-Saharan Africa.........................................\n2,4\n2,8\n5,0\n10,5\n7,5\nCentral and eastern Europe............................\n3,4\n-3,6\n4,2\n4,7\n5,3\nCommonwealth of Independent States...........\n4,2\n-6,4\n4,6\n11,2\n7,2\nDeveloping Asia..............................................\n24,0\n7,2\n9,5\n3,1\n6,0\nChina .........................................................\n13,6\n9,2\n10,3\n-0,7\n3,3\nIndia............................................................\n5,4\n6,8\n10,4\n10,9\n13,2\nMiddle East and North Africa..........................\n5,0\n1,8\n3,8\n6,5\n6,9\nLatin America and the Carribean.....................\n8,6\n-1,7\n6,1\n6,0\n6,0\n*\t GDP shares based on the IMF's purchasing power parity valuation of country GDPs for 2010\nSource:\t IMF World Economic Outlook, April 2011\nAverage growth in emerging and developing economies rose sharply from 2,7 per cent in 2009 \nto 7,3 per cent in 2010 as a result of stronger external demand, higher commodity prices and \nthe relatively limited damage suffered from the financial crisis. This broad-based recovery has \ncontinued in emerging Asian economies, with the IMF reporting growth of 9,5 per cent in 2010. \n11\nMonetary Policy Review May 2011\nMany emerging and developing economies have also had to cope with the policy challenge of \nmanaging high commodity prices. Headline inflation in emerging and developing economies \nrose from 5,2 per cent in 2009 to 6,2 per cent in 2010, and in a number of the larger economies \nis close to or above central bank targets. Core inflation also rose significantly over the period, \nsuggesting the inflation pressures are broad and indicative of tightening capacity constraints. \nEconomies in sub-Saharan Africa resumed faster growth in 2010, recording real growth of \n5 per cent compared with 2,8 per cent in 2009. The region’s inflation rate slowed notably from \n10,5 per cent in 2009 to 7,5 per cent in 2010. \nOil prices\nInternational oil prices have displayed considerable volatility in the period under review (Figure 7). \nThe price of Brent crude oil remained relatively stable within a band of between US$80 and \nUS$89 per barrel in October and November 2010, but rose to US$94 per barrel by the end of \nDecember and to US$100 per barrel by the end of January 2011 in response to higher-than-\nexpected demand arising from relatively severe northern hemisphere weather conditions. Oil \nprices then levelled off slightly in the early part of February after reports that crude oil supplies \nin the US and production in the Organization of the Petroleum Exporting Countries (OPEC) had \nincreased significantly. OPEC crude oil production in January had averaged 29,6 million barrels \nper day; the highest level in two years. According to data released by the International Energy \nAgency (IEA), oil stocks in the advanced countries had also increased sufficiently to cover \nabout 61 days of demand, which was near the highest level in ten years and well above the \nless than 52 days’ cover in early 2008. Oil traders nevertheless started becoming concerned \nabout potential oil supply disruptions because of rising tensions in Egypt and other Middle East \ncountries towards the end of January and the first weeks of February. \nAfter six weeks of region-wide protests ignited by the ouster of Tunisia’s president in January and \nthe fall of Egypt’s president in February, the turmoil in the Middle East then spread to Libya, a \nmajor oil producer, causing the price of Brent crude oil to reach US$112 per barrel in late February \n2011; a level not seen since August 2008. Demonstrations and violent protests later also spread \nto other parts of the MENA region. There was also growing concern that continued unrest in \nEgypt could halt crude oil shipments through the Suez Canal waterway. Major oil producers, \nincluding Saudi Arabia, increased production to make up for lost Libyan oil production. Spare \nproduction capacity, which was thought to be around 5 million barrels per day earlier in 2011, has \nsince dropped to about 3 million barrels per day. The Brent crude oil price rose further to above \nUS$126 per barrel at the end of April (its highest level since the onset of the financial crisis), before \nFigure 7 \nPrice of Brent crude oil \n2005\n2004\n2006\n2007\n2008\n2009\n2010\n2011 2012\nUS dollar per barrel\n \nBrent crude spot price\n \nFutures prices (22 March 2011)\n \nFutures prices (10 May 2011)\n \nFutures prices (Latest: 13 May 2011)\nSource: Bloomberg\n20\n40\n60\n80\n100\n120\n140\n160\nMonetary Policy Review May 2011\n12\nexperiencing a sharp correction in the first week of May, when it dropped by almost US$17 per \nbarrel, as profit-taking triggered a technical sell-off. Since then, prices have rebounded, with the \nprice per barrel standing at US$113,80 on 13 May. \nInternational monetary policy developments\nMonetary policies have remained accommodative in most of the advanced economies since \nthe previous Monetary Policy Review was published in October 2010 (Table 6). Official interest \nrates were left unchanged in the US and the UK. The Bank of England (BoE) has held off raising \nborrowing costs even after inflation had risen to more than twice its target, maintaining that \nprice increases would moderate as government budget cuts restrained the recovery. The BoE’s \nMonetary Policy Committee voted in April and May to maintain the official Bank Rate paid on \ncommercial bank reserves at 0,5 per cent. The committee also voted to maintain the stock of \nasset purchases financed by the issuance of central bank reserves at £200 billion. Minutes \nof the BoE’s Monetary Policy Committee’s May 2011 meeting showed the majority of the \ncommittee members favoured keeping the policy rate and asset purchase programme stable \ndue to concerns about protracted weakness in consumer demand and how tightening at this \npoint could negatively affect consumer confidence. The committee was mindful of the potential \neffect of high inflation on inflation expectations, but felt that this effect was not materialising in \nthe economy as shown by the low growth in wages.\nTable 6\t\nSelected central bank interest rates\nPer cent\nCountries\n6 Oct 2010\n17 May 2011\nLatest decision \n(Change in percentage points)\nUnited States.....................................................\n\t\n0,00–0,25\n0,00–0,25\n27 Apr 2011\n(0,00)\nJapan\t................................................................\n\t\n0,00–0,10\n0,00–0,10\n28 Apr 2011\n(0,00)\nEuro area...........................................................\n\t\n1,00\n1,25\n5 May 2011\n(0,00)\nUnited Kingdom.................................................\n\t\n0,50\n0,50\n5 May 2011\n(0,00)\nCanada..............................................................\n\t\n1,00\n1,00\n12 Apr 2011\n(0,00)\nDenmark............................................................\n\t\n1,05\n1,30\n7 Apr 2011\n(0,25)\nSweden.............................................................\n\t\n0,75\n1,75\n20 Apr 2011\n(0,25)\nNorway..............................................................\n\t\n2,00\n2,25\n12 May 2011\n(0,25)\nSwitzerland........................................................\n\t\n0,00–0,75\n0,00–0,75\n17 Mar 2011\n(0,00)\nAustralia.............................................................\n\t\n4,50\n4,75\n3 May 2011\n(0,00)\nNew Zealand......................................................\n\t\n3,00\n2,50\n28 Apr 2011\n(0,00)\nIsrael.................................................................. \t\n\t\n2,00\n3,00\n24 Apr 2011\n(0,00)\nChina................................................................. \t\n\t\n5,31\n6,31\n5 Apr 2011\n(0,25)\nIndonesia...........................................................\n\t\n6,50\n6,75\n12 May 2011\n(0,00)\nMalaysia.............................................................\n\t\n2,75\n3,00\n5 May 2011\n(0,25)\nSouth Korea.......................................................\n\t\n2,25\n3,00\n13 May 2011\n(0,00)\nTaiwan................................................................\n\t\n1,50\n1,75\n31 Mar 2011\n(0,125)\nThailand.............................................................\n\t\n1,75\n2,75\n20 Apr 2011\n(0,25)\nIndia...................................................................\n\t\n6,00\n7,25\n3 May 2011\n(0,50)\nBrazil..................................................................\n\t\n10,75\n12,00\n20 Apr 2011\n(0,25)\nChile..................................................................\n\t\n2,50\n5,00\n12 May 2011\n(0,50)\nMexico...............................................................\n\t\n4,50\n4,50\n15 Apr 2011\n(0,00)\nCzech Republic..................................................\n\t\n0,75\n0,75\n5 May 2011\n(0,00)\nHungary.............................................................\n\t\n5,25\n6,00\n16 May 2011\n(0,00)\nPoland...............................................................\n\t\n3,50\n4,25\n11 May 2011\n(0,25)\nRussia................................................................\n\t\n7,75\n8,25\n3 May 2011\n(0,25)\nTurkey................................................................\n\t\n7,00\n6,25\n21 Apr 2011\n(0,00)\nIceland...............................................................\n\t\n6,25\n4,25\n20 Apr 2011\n(0,00)\nSource:\t National central banks\n13\nMonetary Policy Review May 2011\nThe United States Federal Reserve System (the Fed) announced a renewed commitment to \nquantitative easing in November 2010 and has continued to state that it expected interest \nrates to remain low over an extended period. During December the Fed announced that it had \nauthorised an extension of dollar liquidity swap agreements with the central banks of Canada, \nEngland, the euro area, Japan and Switzerland to 1 August 2011. This facility was previously \nscheduled to end in January 2011. At the end of April 2011 the Chairman of the Fed, Ben \nBernanke, held the first of four press conferences to be held after selected Federal Open Market \nCommittee (FOMC) meetings in 2011. It was announced during this conference that the FOMC \naimed to complete the purchase of longer-term assets by the end of the second quarter of \n2011, as announced in November 2010. The FOMC does not expect to conduct a third round \nof quantitative easing, given the current economic conditions in the US. \nAlthough the ECB continued with its Security Market Programme, it raised its main policy rate \nby 0,25 percentage points on 7 April 2011 due to concerns about broad-based inflationary \npressures. However, the stance of monetary policy in the euro area remains accommodative at \n1,25 per cent per annum. On 5 May 2011 the ECB kept interest rates stable at 1,25 per cent and \nmentioned that the HICP inflation rate was expected to stay above 2 per cent for an extended \nperiod due to commodity and energy prices.\nSweden’s central bank raised its benchmark repurchase (repo) rate in April 2011 for the sixth \ntime since July 2010. The Riksbank increased its benchmark interest rate in order to stabilise \ninflation close to the target of 2 per cent as economic activity strengthens and has indicated that \nit expects the repo rate to increase more rapidly than had been assessed at the end of 2010.\nThe Bank of Japan (BoJ) doubled its asset-purchase programme to ¥10 000 billion on 14 March \n2011 and widened the range of collateral that is accepted to ensure that there was sufficient \nliquidity in the financial system in the aftermath of the March earthquake and tsunami. On \n28 April the BoJ announced that it would offer temporary loans to financial institutions and central \norganisations of financial co-operatives with branches in the disaster areas totalling no more \nthan ¥1 000 billion to encourage lending to companies with cash-flow shortages in the wake of \nthe earthquake.\nAustralia’s central bank left its benchmark interest rate unchanged, albeit at the highest level \namong the advanced economies, as floods disrupted coal mining in the nation’s northeast and an \nappreciating currency tempered inflation. The Reserve Bank of Australia held the overnight cash rate \ntarget at 4,75 per cent for a fifth consecutive meeting, after having raised rates seven times between \nOctober 2009 and November 2010. The Reserve Bank of New Zealand reduced the official cash rate \nby half a percentage point to 2,5 per cent in March after the earthquake that struck Christchurch on \n22 February had killed at least 172 people and impacted negatively on growth.\nThe Bank of Israel raised its policy interest rate by 50 basis points to 3 per cent in March \n2011 as part of a move towards returning the policy rate to more normal levels. Effective \n27 January, Bank of Israel Governor, Stanley Fischer, ordered Israeli banks to meet a 10 per cent \nreserve requirement for foreign-exchange derivative transactions by non-residents. Residents \nand non-residents are required to report foreign-exchange swaps and forwards of more than \nUS$10 million a day. Non-residents trading beyond certain daily amounts in so-called Makam \nbills and other short-term government bonds are also required to report their transactions.\nIn Asia policy rates were raised in March–May 2011 by India, China, Vietnam, Taiwan, the \nPhilippines, South Korea and Thailand. The Reserve Bank of India increased its key repo \nrate in May 2011 for the ninth time since March 2010, boosting the measure by a half of \na percentage point to 7,25 per cent to rein in inflation. The People’s Bank of China raised \nbenchmark lending and deposit rates by one-quarter of a percentage point with effect from \n6 April and on 12 May announced a 50 basis point increase in the reserve requirements ratio \nfor banks for the fifth time in 2011, in its latest tightening move to limit inflationary pressures. \nChina has implemented a variety of policies to curb inflation, including successive increases in \nbanks’ reserve requirement ratios and multiple increases in interest rates since October. The \ncentral bank boosted its benchmark one-year lending rate by a quarter point to 6,31 per cent \nfrom 6,06 per cent, while the one-year deposit rate will rise to 3,25 per cent from 3 per cent. \nThis was the fourth interest rate increase in less than six months, signalling the government’s \ndetermination to defuse overheating risks. \nMonetary Policy Review May 2011\n14\nThe Philippine central bank raised its benchmark interest rate in March 2011, for the first time \nsince August 2008, and again in May, signalling that it was ready to raise policy rates further \nif required. Thailand’s central bank increased interest rates by 25 basis points in March and \nApril 2011, following the Thai MPC’s assessment that the economic recovery, both locally and \nglobally, was improving and that there was a need to return to more normal levels of the policy \nrate, in part to help anchor inflation expectations.\nAlthough Turkey’s economy grew by 8,9 per cent in 2010, with year-on-year credit growth \nsurging to 35 per cent, the central bank has kept interest rates at historic lows in an attempt \nto curb capital inflows. It has in the meantime also almost trebled banks’ required reserves \nratios to 16 per cent since November 2010 in an effort to slow loan growth and stop the \neconomy from overheating. Turkey’s MPC again increased reserve requirements in April 2011 \nfor macroprudential purposes. \nThe Monetary Policy Committee (Copom) in Brazil has continued to tighten interest rates, most \nrecently raising the target for the Selic rate by 25 basis points in April 2011 to 12,00 per cent due \nto inflationary pressures and uncertainty stemming from commodity prices. Similar concerns \nabout inflationary pressures have led the Central Bank of Chile to increase rates from 2,5 per \ncent in October 2010 to 5,0 per cent in May 2011. \nExchange rate developments\nThe nominal effective exchange rate (NEER) of the South African rand, which measures the value of \nthe rand against a basket of 15 currencies, appreciated to above 81 index points at the end of 2010 \ndespite portfolio capital outflows in the final quarter of the year, before declining to 73 index points \nin early February 2011 (Figure 8). More recently, it has averaged around 76 index points since March \n2011. Measured on a bilateral basis, the rand has fluctuated between R8,76 and R9,93 against the \neuro since October 2010, and between R6,60 and R7,31 against the US dollar.\nIndex: 2000 = 100 (foreign currency per rand)\nRand per dollar\nRand per euro\nFigure 8 \nExchange rates of the rand\n45\n50\n55\n60\n65\n70\n75\n80\n85\n90\n7\n9\n11\n13\n15\n6\n8\n10\n12\nNominal effective exchange rate of the rand\n(NEER)\n2007\n2008\n2009\n2010\n2011\n2007\n2008\n2009\n2010\n2011\nRand per US dollar\nRand per euro (right-hand scale)\n15\nMonetary Policy Review May 2011\nDuring the period October 2010—May 2011 foreign investors disposed of their South African bond \nholdings as a high degree of uncertainty prevailed in the global financial markets. Cumulative non-\nresident net sales in the bond market amounted to R11,1 billion by the week ending 13 May 2011, \ncompared with the total 2010 net purchases of R52,0 billion. Concerns of global investors included, \namong other factors, the potential impact of rising oil and other commodity prices on the inflation \noutcomes of emerging markets and the likelihood of subsequent monetary tightening by central \nbanks. However, foreign investor net sales of domestically issued bonds were countered by net \npurchases in the share market. Between October 2010 and May 2011 cumulative non-resident share \npurchases amounted to R21,5 billion, compared with 2010 net purchases totalling R36,4 billion.\nSouth Africa’s real effective exchange rate, measured by the Bank for International Settlements \n(BIS), appreciated from October 2010, increasing from around 98,7 index points to 102 index \npoints in December 2010, before declining to 98,7 index points in March (Figure 9). Compared on \na consistent basis from the beginning of 2009, there has been generalised appreciation among \ncommodity-exporting countries such as Australia, Canada, Brazil and South Africa.\nIndices: 2005 = 100\n2005\n2006\n2007\n2008\n2009\n2010\n2011\nFigure 9 \nReal effective exchange rates\n40\n60\n80\n100\n120\n140\n160\n \nAustralia \n \nCanada\n \n \nSource: Bank for International Settlements\n \nBrazil\n \nSouth Africa\nBox 2\t\nThe rand as a carry trade target\nThe ‘carry trade’ refers to currency speculation strategies designed to profit from a favourable interest \nrate differential, when the high-interest currency does not depreciate substantially relative to the low-\ninterest currency – and the evidence is that in the short term and on average it does not. The simplest \nway to implement the trade unhedged is to borrow in the low-interest currency (the ‘funding currency’), \nbuy the high-interest currency (the ‘target currency’) in the spot market, deposit the proceeds or buy \nfixed-income securities denominated in the target currency and, finally, convert the terminal payoff back \ninto the funding currency, facing the exchange rate risk. Alternatively, the speculator can use the low-\ninterest currency to buy the target currency forward when the latter is trading at a discount in the \nforward market, that is, the forward value of the target currency is lower than its value in the spot market \nand, conversely, to sell the target currency forward when it is trading at a forward premium. Other \nvariations can be designed and implemented through the derivatives markets.\nCurrency speculators targeting the rand through the carry trade were exposed to periodic, very large \nlosses between 2007 and 2008. The appeal of the rand as a carry target, as well as that of other \nemerging-market currencies, was firmly restored from 2009.6 Current research at the South African \nReserve Bank (Hassan and Smith, 2011) shows that the rand is historically and on average an \n6\t The annualised average return from targeting the rand through Japanese yen-funded speculation, using the forward \ncurrency market and trading at the weekly frequency, between January and December 2010, was approximately 32 per \ncent, with a ratio of mean return to volatility of 1,89. This large return-to-volatility figure is close to the historic average \nperformance of the rand as a (yen-funded) carry trade target over the past decade; and it is evidenced in the data despite \nthe Bank decreasing its policy rate to a 30-year low, as speculators gained from appreciation in the rand, and a relative \nreduction in short-term volatility.\nMonetary Policy Review May 2011\n16\nattractive carry target, despite its high volatility, producing a return-to-volatility ratio substantially \nabove the Australian and New Zealand dollars, which are the two most common carry trade targets. \nTable B2.1 compares the historic average weekly return and volatility of the three widely traded \ncommodity currencies, used as yen-funded carry trade targets, where the trade is implemented with \nforward contracts.\nTable B2.1\t Returns to the carry trade (weekly trading) \nTarget\nBefore transaction costs\nAfter transaction costs\nMean \n(per cent)\nSD*\n(per cent)\nSR**\nMean\n(per cent)\nSD*\n(per cent)\nSR**\nAustralia..................................................\n0,43\n2,45\n0,177\n0,40\n2,44\n0,164\nNew Zealand...........................................\n0,48\n2,51\n0,190\n0,41\n2,51\n0,164\nSouth Africa............................................\n1,77\n4,04\n0,437\n1,18\n3,72\n0,316\n*\t SD is the standard deviation of weekly returns \n**\t SR is the return-to-volatility ratio \nSample period: 3 November 1997 – 21 February 2011\nSource: Hassan and Smith (2011)\nHassan and Smith (2011) indicate that the most profitable periods to carry trade speculators are \naccompanied by a gradually appreciating rand and low exchange rate volatility. Conversely, rand-\ntargeting carry traders typically incur the largest losses in periods of very high volatility in the currency \nmarket. Lower rand volatility reduces the size of exchange rate losses in unhedged carry positions, and \nreduces the cost of using options to hedge against the same losses. Figure B2.1 plots the weekly returns \nfrom a yen-funded rand-targeting strategy (Carry) against a measure of the conditional volatility of the \nrand–yen exchange rate (Vol).\nThe carry trade affects foreign exchange market turnover and portfolio debt capital flows. It leads to \nportfolio flows when funded conventionally through borrowing, and/or when the speculator’s counterparty \nhedges its exposure through the spot market. But the trade can also be implemented through the \nderivatives market, with no speculator-initiated flows at inception. The relationship between capital flows \nand rand-targeting carry positions is therefore only partial.\nThe sudden reversal of rand carry positions, usually built up gradually, can cause abrupt and potentially \ndestabilisingly large depreciations. The rand’s allure as a carry target depends on a host of factors, \nincluding changes in global risk appetite and volatility; monetary conditions in the eurozone, United \nStates, Switzerland and Japan (the issuers of the main carry funding currencies); the growth and inflation \noutlooks, domestically and abroad; rand volatility; and the interest differential offered by South Africa.\nReference\nHassan, S and S Smith. 2011. “The Rand as a Carry Trade Target”. Discussion Paper DP/11/03, April. \nPretoria: South African Reserve Bank.\nRate\nFigure B2.1 Rand carry returns and exchange rate volatility\n0,0000\n0,0005\n0,0010\n0,0015\n0,0020\n0,0025\n0,0030\n-0,15\n-0,10\n-0,05\n0,00\n0,05\n0,10\n0,15\n0,20\nCarry: rand target\nVol: rand–yen rate volatility\n(right-hand scale)\n1997\n1999\n2001\n2003\n2005\n2007\n2009\n2011\nSource: Hassan and Smith (2011)\n17\nMonetary Policy Review May 2011\nLabour markets\nFigure 10 shows that the year-on-year change in nominal unit labour cost declined from 11,5 per \ncent in the fourth quarter of 2009 to 7,7 per cent in the fourth quarter of 2010. Higher employment \nlevels in successive quarters of 2010 were accompanied by a decline in the rate of increase in \nmeasured labour productivity from 5 per cent in the first quarter to 2,2 per cent in the fourth \nquarter. This was more than offset by the change in remuneration per worker, which declined \nfrom 15,9 per cent in the first quarter to 10,1 per cent in the fourth quarter of 2010. \nAccording to the outcome of the Andrew Levy Wage Settlement Survey, the average level of \nwage settlements declined to 8,2 per cent in 2010 from 9,3 per cent in 2009, influenced in part \nby the decline in the CPI inflation rate in 2010 (Figure 11). The average level of wage settlements \nin the first quarter of 2011 remained at 8,2 per cent. \nPercentage change over four quarters\n2004\n2003\n2005\n2007\n2008\n2009\n2010\n2006\nFigure 10 \nRemuneration per worker, labour productivity and \n \nunit labour cost in the formal non-agricultural sector\n \nNominal unit labour cost\n \nRemuneration per worker\n \nLabour productivity\n \n \nSources: Statistics South Africa and South African Reserve Bank calculations\n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nPer cent\n1994\n1996\n1998\n2000\n2002\n2004\n2006\n2008\n2011*\nFigure 11 \nAverage annual inflation and wage settlements\n \nCPI\n \nAverage wage settlements\n* Data for 2011 are for the first three months of the year \nSources: Andrew Levy Employment Publications and Statistics South Africa\n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\nMonetary Policy Review May 2011\n18\nTable 7 shows the average wage settlements in major sectors in 2010 reported by Andrew \nLevy Employment Publications. The highest average settlement was 9,3 per cent, reached in \nthe transport and freight sector, and the lowest was 7,3 per cent in the communication sector. \nSettlements reached at the centralised level tend to act as benchmarks for the sectoral settlements, \nand these moderated in 2010. In 2010 the settlement for the public sector was 7,5 per cent, below \nthe double-digit increases received by parastatals in the latter part of 2009.\nTable 7\t\nAverage percentages of wage settlement by major sector in 2010\nSector\nPer cent\nTransport/Freight..................................................................................................................\n\t\n9,3\nFinance................................................................................................................................\n9,1\nRetail/Catering.....................................................................................................................\n9,0\nBuilding/Construction...........................................................................................................\n9,0\nMunicipal/Utility....................................................................................................................\n8,8\nHealth/Education.................................................................................................................\n8,4\nMetal/Engineering................................................................................................................\n8,3\nMining..................................................................................................................................\n8,3\nFood/Manufacturing.............................................................................................................\n7,9\nFood/Agriculture..................................................................................................................\n7,8\nChemical..............................................................................................................................\n7,7\nPaper/Printing......................................................................................................................\n7,7\nCommunication....................................................................................................................\n7,3\nSource:\t Andrew Levy Employment Publications\nTotal employment in the formal non-agricultural sector increased marginally from 8,2 million \nin the fourth quarter of 2009 to 8,3 million in the final quarter of 2010 but was still below the \n8,5 million recorded in the corresponding quarter of 2008 (Table 8). In 2010 employment levels \nincreased in mining and quarrying; wholesale and retail trade; electricity, gas and water supply; \nand finance, insurance, real-estate and business services. Only in the community, social and \npersonal services sector was employment created over both periods. By contrast, sectors such \nas the manufacturing; construction; transport, storage and communication sectors all shed \njobs in each of the periods.\nTable 8\t\nEmployment in formal non-agricultural industries\nThousands\nTotal employment\n2008\n2009\n2010\n4th qr\n4th qr\n4th qr\nMining and quarrying................................................................................. \n518\n488\n503\nManufacturing............................................................................................\n1 275\n1 185\n1 166\nElectricity, gas and water supply................................................................\n59\n56\n58\nConstruction..............................................................................................\n474\n415\n400\nWholesale trade and retail trade.................................................................\n1 747\n1 665\n1 683\nTransport, storage and communication......................................................\n366\n359\n357\nFinancial intermediation, insurance, real-estate and business services.......\n1 914\n1 796\n1 822\nCommunity, social and personal services...................................................\n2 159\n2 199\n2 267\nTotal...........................................................................................................\n8 512\n8 163\n8 256\nSource:\t Statistics South Africa Quarterly Employment Survey\n19\nMonetary Policy Review May 2011\nDemand and output\nReal GDP increased by 4,4 per cent on a quarter-on-quarter annualised basis in the final \nquarter of 2010, following increases of 2,8 per cent in the second quarter and 2,7 per cent \nin the third quarter of the year (Table 9). The improved performance in the fourth quarter \nmainly reflected stronger growth in the real value added by the secondary and tertiary sectors, \nwhich was partly offset by slower growth in the real value added by the primary sector. The \nreal value added by the manufacturing sector recovered in the fourth quarter of 2010, with \nmanufacturing output increasing at an annualised rate of 4,1 per cent following a decline of \n4,9 per cent in the third quarter of the year. For 2010 as a whole, real GDP grew by 2,8 per cent, \nfollowing a contraction of 1,7 per cent in 2009.\nTable 9\t\nGrowth in real GDP and expenditure components\nPer cent*\n2009\n2010\nYear\n1st qr\n2nd qr\n3rd qr\n4th qr\nYear\nFinal consumption expenditure: \nHouseholds...................................................\n -2,0\n 5,5\n 4,4\n 5,7\n 5,1\n 4,4\nGeneral government......................................\n 4,8\n 7,1\n 7,1\n -0,6\n 3,9\n 4,6\nGross fixed capital formation.............................\n -2,2\n -2,8\n 1,2\n 1,0\n 1,5\n-3,7\nChanges in inventories (R billions)**...................\n-34,5\n -7,9\n -7,6\n-0,9\n 1,1\n-3,8\nGross domestic expenditure............................\n -1,7\n 11,5\n 2,9\n 6,2\n 1,2\n 4,2\nExports of goods and services.......................... \n-19,5\n-17,0\n18,1\n14,0\n 8,2\n 4,7\nImports of goods and services.......................... \n-17,4\n 9,7\n15,3\n26,3\n-4,1\n 9,6\nGross domestic product.................................. \n-1,7\n 4,8\n 2,8\n 2,7\n 4,4\n 2,8\n*\t Quarterly data refer to quarter-on-quarter growth at annual rates of seasonally adjusted data \n**\t Constant 2005 prices\nAggregate real gross domestic expenditure decelerated from 6,2 per cent in the third quarter of \n2010 to 1,2 per cent in the fourth quarter, although growth of 4,2 per cent for the 2010 calendar \nyear outstripped the contraction of 1,7 per cent recorded in 2009. \nGrowth in real final consumption expenditure by households slowed to 5,1 per cent in the fourth \nquarter of 2010 from 5,7 per cent in the third quarter, following slower increases in expenditure \non durable and non-durable goods. By contrast, growth in real final consumption expenditure \nby general government was 3,9 per cent in the fourth quarter of 2010, following a contraction of \n0,6 per cent in the third quarter. This was largely the result of increased spending on compensation \nof employees, the biggest subcomponent of general government expenditure. \nReal gross fixed capital formation grew by 1,0 per cent in the third quarter of 2010 and 1,5 per \ncent in the fourth quarter. Real capital spending by public corporations increased further over the \nperiod, but there were lower capital outlays by private business enterprises and a continuation of \nthe contraction in investment by general government. After having declined for ten consecutive \nquarters, the aggregate level of real inventory holdings increased by R1,1 billion in the fourth quarter \nof 2010, mainly from an accumulation of inventories in the mining and construction sectors. As a \npercentage of annualised non-agricultural GDP, industrial and commercial inventories declined to \n11,3 per cent in the fourth quarter of 2010; its lowest quarterly level ever registered. \nReal exports of goods and services grew by 14,0 per cent in the third quarter of 2010 and by 8,2 per \ncent in the fourth quarter, despite a strengthening in the exchange rate of the rand. It was aided by \nfirm international commodity prices and an improvement in the country’s terms of trade. By contrast, \nthe volume of imports of goods and services declined by 4,1 per cent in the fourth quarter. The \ndeficit on the current account of the balance of payments narrowed to 0,6 per cent of GDP in the \nfourth quarter of 2010; the smallest ratio since the third quarter of 2003. \nMonetary Policy Review May 2011\n20\nSouth Africa’s gross international reserve position strengthened from US$44,1 billion at the \nend of September 2010 to US$50,6 billion at the end of April 2011. Over the same period \nthe international liquidity position improved from US$40,1 billion to US$46,0 billion, and the \noverbought forward position expanded from US$1,1billion to US$3,9 billion. \nReal-estate and equity prices \nPrices of shares on the JSE Limited (JSE) continued the upward trend established early in 2009. \nAfter recording a low for 2010 of 25 793 index points on 5 February, the FTSE/JSE All-Share \nIndex (Alsi) improved to 31 951 index points on 16 May 2011. The Alsi has increased less than \nthe Kuala Lumpur Composite, Bovespa, and Bombay Sensitive indices, but performed better \nthan the Dow Jones Euro Stoxx 50, Standard & Poor’s (S&P) 500, Nikkei 225 and Shanghai A \nshare indices (Figure 12).\nHouse price inflation has generally trended downwards since the middle of 2010 (Figure 13), \nreflecting the base effects of the turning point in house price inflation in mid-2009, higher \nhousehold debt ratios and the absence of further stimulus from interest rate cuts. The year-on-\nyear percentage change in the Standard Bank median house price index slowed from 8,3 per \ncent in September 2010 to 3,4 per cent in April 2011, while that of the First National Bank (FNB) \nnational average house price index declined from a peak of 10,9 per cent in May 2010 to 2,2 per \ncent in April 2011. The rate of change in the Absa House Price Index declined from 13,4 per cent \nin April 2010 to a negative 1,5 per cent in April 2011, and that of the extended repeat sales house \nprice index of Lightstone slowed from a peak of 6,8 per cent in June 2010 to 1,0 per cent in \nApril 2011.7 According to the FNB home-buying estate agent survey, the time taken for a house \nto be sold rose to 19 weeks and one day in the first quarter of 2011, up from 15 weeks and \n6 days in the previous quarter. Moreover, 85 per cent of sellers dropped their asking price in the \nfirst quarter of 2011 compared to 80 per cent in the previous quarter and asking prices declined \nby 12 per cent compared with 11 per cent in the previous quarter. \nIndices: 1 January 2007 = 100\n2007\n2008\n2009\n2010\n2011\nFTSE/JSE All-Share Index\nEuro area (Dow Jones Euro Stoxx 50)\nMalaysia (Kuala Lumpur Composite)\nBrazil (Bovespa)\nFigure 12 \nShare price indices\n0\n50\n100\n150\n200\n250\nUnited States (S&P 500)\nJapan (Nikkei 225)\nIndia (Bombay Sensitive)\nChina (Shanghai A Share)\nSources: JSE Limited and I-Net Bridge\n7\t\nThe First National Bank \n(FNB) House Price Index is \nconstructed using the \naverage value of housing \ntransactions financed by FNB. \nIn order to eliminate outliers \nfrom the data sample, \ntransaction values must be \nabove 70 per cent of the FNB \nValuations Division’s valuation \nof the property but below 130 \nper cent, while the purchase \nprices recorded as above \nR10 million are excluded. A \nstatistical smoothing function \nis then applied to the data.\nThe Absa House Price indices \nare based on the total \npurchase price of houses in \nthe 80 m2–400 m2 size \ncategory, priced at \nR3,5 million or less in 2011 \n(including improvements) in \nrespect of which the mortgage \nloan applications were \napproved by Absa. Prices are \nsmoothed in an attempt to \nexclude the distorting effect of \nseasonal factors and outliers \nin the data.\nStandard Bank’s House Price \nIndex is based on the median \nhouse price of the full \nspectrum of houses where \nmortgage finance was \nprovided by Standard Bank. \nThe Lightstone Repeat Sales \nHouse Price Index provides a \nmeasure of the actual price \ninflation of houses that have \nbeen transacted twice within \na particular period of time, in \norder to reduce the influence \nof the mix of properties \ntransacting during the period. \nData are obtained from the \nDeeds Office, the Surveyor \nGeneral and other sources.\n21\nMonetary Policy Review May 2011\nTable 10 shows the real value of building plans passed and buildings completed in larger \nmunicipalities as published by Statistics South Africa. So far in 2011, the total real values of \nbuildings completed and the residential and non-residential subcomponents of buildings \ncompleted have contracted at a slower pace than in the preceding year. The real value of the \nnon-residential component of building plans passed has improved in 2011 when compared with \nthe corresponding period in 2010.\nTable 10\t\nReal value of building plans passed and buildings completed in \nlarger municipalities\nAnnual percentage change\n2008\n2009\n2010\n2011*\nBuilding plans passed\nTotal........................................................................................\n-17,2\n-23,2\n-8,1\n1,5\nResidential.............................................................................. \n-26,1\n-37,8\n1,2\n3,1\nNon-residential........................................................................ \n0,6\n-11,0\n-36,0\n5,8\nAdditions and alterations......................................................... \n-12,0\n-8,2\n5,2\n-3,3\nBuildings completed\nTotal........................................................................................\n-0,4\n-13,0\n-23,7\n-4,0\nResidential.............................................................................. \n-9,5\n-26,2\n-22,1\n-3,7\nNon-residential........................................................................ \n13,6\n3,4\n-34,1\n-22,6\nAdditions and alterations.........................................................\n14,9\n 3,5\n-13,2\n14,8\n*\t Data for 2011 are for the first three months of 2011 compared with the same period of the previous year\nSource:\t Statistics South Africa\nFiscal policy \nThe 2011 National Budget was tabled before Parliament by the Minister of Finance on 23 February. \nGovernment indicated that job creation would be a key focus area over the medium term and \nallocated funds required for the implementation of the New Growth Path Strategy for economic \ndevelopment. The fiscal stance remains countercyclical while being mindful of the need to pursue \nfiscal consolidation and debt sustainability within a long-term framework. Government spending \nPercentage change over 12 months\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n-10\n-5\n0\n5\n10\n15\n20\n25\n30\n35\n40\n \nAbsa House Price Index\n \nFirst National Bank House Price Index\nSources: Absa, Standard Bank, First National Bank and Lightstone\nFigure 13 \nHouse prices \n \nStandard Bank House Price Index\n \nLightstone House Price Index\nMonetary Policy Review May 2011\n22\nis projected to rise over the forecast period at a slightly lower rate than in recent years and as \neconomic growth strengthens and tax revenue recovers, the deficit is expected to narrow to a level of \n3,8 per cent of estimated GDP by the fiscal year 2013/14 (Table 11). This represents a slightly slower \npace of deficit narrowing and a somewhat higher government debt trajectory than earlier official \nprojections. However, the Budget also indicates that the economy is recovering at a faster-than-\nexpected pace. Personal income tax collections climbed 11 per cent to R228 billion in the 2010/11 \nfiscal year while value-added taxes surged 24 per cent to R184 billion and customs duties rose \n36 per cent to R27 billion. Company tax collections have been much slower to recover following \nthe 2009 recession, and dropped 0,5 per cent to R152 billion. Government expects revenue \ngrowth to pick up as economic growth accelerates and forecasts that the South African economy \nwill expand by 3,4 per cent in 2011. \nTable 11\t\nPublic finance data\n2009/10\n2010/11\n2011/12 2012/13 2013/14\nOutcome Budget\nRevised\nestimates\nMedium-term estimates\nConsolidated government* (R billions)\nRevenue..........................................................\n664,8\n738,4\n755,0\n824,5\n908,7\n1 017,2\nExpenditure.....................................................\n825,9\n907,0\n897,4\n979,3\n1 061,6\n1 151,8\nBudget balance...............................................\n-161,1\n-168,6\n-142,4\n-154,8\n-152,9\n-134,6\nAs a percentage of GDP\n \n \n \n \n \n \nBudget balance...............................................\n-6,6\n-6,2\n-5,3\n-5,3\n-4,8\n-3,8\nTotal net loan debt..........................................\n27,6\n33,2\n30,8\n34,3\n37,5\n39,3\nPSBR**...........................................................\n8,9\n11,1\n10,5\n9,5\n8,1\n6,3\n*\t Includes national government, provinces, social security funds and selected public entities \n**\t PSBR: Public-sector borrowing requirement\nSource:\t National Treasury Budget Review 2011\nThe revised consolidated budget balance for 2010/11 is a deficit of R142,4 billion. Government \ncollected more tax revenue than expected in the 2010/11 fiscal year, while consolidated \ngovernment capital expenditure continued to underperform budgeted amounts, resulting in an \nexpected budget deficit of 5,3 per cent of GDP. Consolidated government revenue was expected \nto amount to R755,0 billion in 2010/11, significantly higher than the estimate of R738,4 billion \nmade in February 2010. Consolidated government expenditure in 2010/11 was slightly lower than \nwas projected in February 2010, falling marginally from R907,0 billion to R897,4 billion. \nGovernment plans to narrow the deficit more slowly than originally planned over the next \nthree years because of subdued growth in revenue and as it intends maintaining significant \nspending on roads, schools and hospitals. The deficit is projected to be 5,3 per cent of GDP \nin the fiscal year through March 2012, 4,8 per cent in fiscal 2012/13 and 3,8 per cent in the \nyear thereafter. \nThe estimated public-sector borrowing requirement (PSBR), reflecting the higher financing \nrequirements of government and the non-financial public enterprises, is expected to have \nwidened to 10,5 per cent of GDP in 2010/11 but is projected to decline to 9,5 per cent of GDP in \n2011/12, to 8,1 per cent of GDP in 2012/13 and to 6,3 per cent of GDP in 2013/14. Net loan debt \nas a share of GDP in 2010/11 has been revised to 30,8 per cent and is projected to increase to \n39,3 per cent of GDP by 2013/14. \nMonetary conditions\nOn a year-on-year basis the narrow M1 monetary aggregate grew at a faster pace from early \n2009, while the wider M2 and M3 aggregates took longer to recover due to a strong preference \namong investors to hold their deposits at the short end of the maturity spectrum (Figure 14). \nGrowth in broad money (M3) declined from 6,9 per cent in December 2010 to 6,5 per cent in \n23\nMonetary Policy Review May 2011\nMarch 2011. The growth rate of M2 has been uneven and amounted to 4,6 per cent in March \n2011. The growth rate of M1 has continued to rise since December 2010, increasing modestly \nfrom 6,9 per cent in December 2010 to 8,3 per cent in March 2011. \nFigure 15 shows that as 2010 progressed total loans and advances to the private sector recovered \nfrom negative growth rates, driven by the rebound in the growth rates in instalment sale and leasing \nfinance, and other loans and advances (in particular, general advances and credit card advances). \nOverdrafts have rebounded from the low levels recorded in 2009, although growth remains in negative \nterritory. Growth in mortgage advances has fluctuated around 4 per cent. On a sectoral basis, the \nrebound in total loans and advances was underpinned by the household sector. \nMonetary policy\nThe monetary policy environment has changed somewhat since the publication of the previous \nMonetary Policy Review in October 2010. At that stage, inflation was still on its downward \ntrajectory and the domestic economic recovery appeared to be fragile. The exchange rate of \nthe rand was also appreciating despite portfolio capital outflows in the final quarter of 2010. \nPercentage change over 12 months\n2006\n2004\n2003\n2005\n2007\n2008\n2009\n2010\n2011\nFigure 14 \nGrowth in monetary aggregates\n-10\n-5\n0\n5\n10\n15\n20\n25\n30\n35\nM3\nM1\nM2\nPercentage change over 12 months\n-20\n-10\n0\n10\n20\n30\n40\n50\n60\nFigure 15 \nBanks' loans and advances by type\n \nMortgages\n \nInstalment sale and leasing finance\n \nCredit card advances\n \nGeneral advances\n \nOverdrafts\n \nTotal loans and advances\n2003\n2006\n2004\n2005\n2007\n2008\n2009\n2010\n2011\nMonetary Policy Review May 2011\n24\nGiven this scenario, the MPC reduced the repo rate by a further 50 basis points to 5,5 per cent \nin November (Figure 16). This kept nominal and real policy rates at their lowest levels in over \n30 years, and should be seen in the context of the weak economic conditions and low real \ninterest rates in advanced economies. However, in the following months, the inflation outlook \ndeteriorated significantly and although the monetary policy stance was left unchanged, the risks \nto the outlook moved to the upside.\nAt the time of the MPC’s November meeting, the latest CPI inflation reading (for September) \nhad declined to 3,2 per cent, which turned out to be the low point of the current inflation cycle. \nAt that stage, the Bank’s forecast was adjusted down further, and the expectation was that \ninflation would average 4,3 per cent in 2011 and 4,8 per cent in 2012. Inflation expectations \nhad also declined further, although they were, on average, still outside the target range. The \nglobal recovery was regarded as fragile and the further quantitative easing in the US was \nexpected to sustain or increase capital flows to emerging markets, including South Africa. \nThese developments were expected to underpin the strength of the rand exchange rate with a \nfavourable impact on the inflation outcomes.\nAt the same time, the domestic economic outlook remained subdued: growth in gross fixed capital \nformation was minimal and the weak performance of the manufacturing sector was a source \nof concern. Overall business confidence remained low, although it had improved somewhat. \nConsumer confidence, however, was relatively high, and there were indications that consumption \nexpenditure was recovering, and would be supported by positive wealth effects from higher asset \nprices and lower interest rates, but constrained by high unemployment and high household debt \nlevels. Credit extension remained relatively subdued, but there were tentative signs of recovery.\nAt that time, the main risks to the inflation outlook were from cost–push factors, mainly \nadministered prices and wage trends, which were, however, showing some tentative signs of \nmoderation. Food and petrol prices were not viewed as immediate problems, but were identified \nas potential longer-term risks. Although international oil prices had risen to above US$80 per \nbarrel, there was an expectation that the fragile state of the global economy would constrain \nfurther price increases. The domestic bumper maize crop and the strong exchange rate were \nexpected to moderate pressures on domestic food prices.\nAgainst this backdrop, the MPC expected the risks to the outlook to remain fairly evenly balanced. \nGiven the fragile nature of the domestic recovery, the MPC decided that there was room for \nfurther stimulus, which would be consistent with the continued attainment of the inflation target. \nPer cent\n2004\n2003\n2005\n2006\n2007\n2008\n2009\n2010\n2011\nPrime overdraft rate\nRepurchase rate\nThree-month negotiable certificates of deposit rate\nFigure 16 \nThe repurchase rate and other short-term interest rates\n4\n6\n8\n10\n12\n14\n16\n18\n25\nMonetary Policy Review May 2011\nThe MPC noted, however, that the scope for further downward movement was limited, given the \nsigns of recovery in household consumption expenditure and credit extension. The MPC also \nemphasised the limited nature of the impact of such actions on output: while monetary policy \ncould impact on cyclical deviations of output from potential output, it could not determine the \nlong-run growth path of the economy.\nAt the following three MPC meetings (in January, March and May 2011) a progressive deterioration \nin the inflation outlook was evident, mainly as a result of continued price pressures coming from \ninternational oil and food prices. By the time of the January meeting, inflation was already on an \nupward path, when the most recent measure (for December 2010) was 3,5 per cent. By the May \nmeeting it had increased to 4,1 per cent (for March). Of greater significance was the sustained \ndeterioration of the inflation forecast. In January the inflation forecast for 2011 was 4,6 per cent \nand for 2012, 5,3 per cent. By March the forecast was revised upwards to 4,7 per cent for 2011 \nand 5,7 per cent for 2012, still within the target range for the entire forecast period. \nIn May there was a further upward revision of the forecast, which was now expected to reach the \nupper end of the target in the fourth quarter of 2011 and to breach the upper end of the target \nrange in the first quarter of 2012, when it was expected to average 6,3 per cent. Inflation was then \nexpected to return to within the target range and to remain close to the upper end until the end \nof 2012. Inflation was expected to average 5,1 per cent in 2011 and 6,0 per cent in 2012. At both \nthe March and the May meetings the risks to the outlook were also assessed to be on the upside.\nThe forecasts of private-sector analysts were also revised upwards over this period, and the \nconsensus forecasts of analysts in the Reuters survey were similar to those of the Bank. The \nresults of the survey conducted by the Bureau for Economic Research (BER) at Stellenbosch \nUniversity continued to reflect a moderation in inflation expectations, particularly among business \nand trade union respondents. In the first quarter of 2011 the expectations of all categories of \nrespondents for 2011 and 2012 had declined to within the target range.\nIn each instance, the upward revision of the Bank’s expected inflation path was mainly as a \nresult of changes in the assumptions regarding administered prices, particularly oil prices. As \ndiscussed earlier in this review, the international oil price has been impacted by shocks on \nboth the supply and demand side, and has been relatively volatile on an upward trend. Over \nthis period, there was a progressive upward revision of the oil price assumption which, in turn, \nraised the inflation forecast. In formulating its assumptions about international oil prices, the \nMPC relies on internal Bank analysis of the oil market, but also looks at other indicators such \nas oil futures prices, and the forecasts of a number of international agencies and analysts. \nNevertheless, the volatile nature of this market meant that during the past few months, most \nforecasts have generally underestimated the actual outcomes.\nThe MPC consistently viewed the risks to the inflation outlook to have emanated mainly from cost–\npush factors. Apart from the oil price, these factors included food prices and wage costs. Food \nprices had been increasing significantly in international markets for some time, but it took a while \nfor these developments to start impacting on domestic prices. In May the MPC noted that there \nwere signs that food prices may have peaked in international markets. Nevertheless, there was an \nexpectation that domestic food prices were likely to increase further in the short to medium term.\nWage cost developments have been identified as a persistent risk to the inflation outlook. For \nsome time, nominal wage increases have been significantly above inflation and productivity \nincreases. However, in March the MPC noted that there was evidence that the risk to inflation \nfrom wage increases was moderating. This was a result of the observed decline in nominal \nwage and unit labour cost growth. The MPC also expressed its concern that high nominal wage \nincreases would also constrain employment growth in the economy.\nWhile there were definite and rising pressures on inflation coming from the cost–push side, the \nMPC assessed the pressures coming from the demand side as being benign. Growth in GDP was \nregarded as still being below potential, with a persistent negative output gap. The MPC viewed \nthe growth recovery to be sustained but fragile, and insufficient to make a significant impact on \nthe unemployment rate, which decreased marginally to 25,0 per cent between the first quarter of \n2010 and the first quarter of 2011. In January the Bank’s forecast of GDP growth was 3,4 per cent \nfor 2011 and 3,6 per cent for 2012. This forecast was revised marginally upwards in subsequent \nmeetings, and in May the respective forecasts were 3,6 per cent and 3,9 per cent.\nMonetary Policy Review May 2011\n26\nThe fragile nature of the recovery was, in part, a result of the low growth in gross fixed capital \nformation, having increased by 1,0 per cent in the third quarter of 2010 and by 1,5 per cent in \nthe subsequent quarter. The manufacturing sector showed some improvement over the period, \nbut the sector continued to be characterised by underutilised capacity and output levels well \nbelow those achieved prior to the financial crisis. The MPC also expressed concern about the \ncontinued weak state of the construction sector. However, the composite leading business \ncycle indicator of the Bank suggested that the recovery was expected to be sustained, and \nbusiness confidence surveys suggested that sentiment was improving. \nThe main impetus to growth in 2010 came from consumption expenditure. The MPC highlighted \nthe recovery in household consumption expenditure in particular, which grew at an annualised \nrate of 5,1 per cent in the final quarter of 2010, and by 4,4 per cent for the year as a whole. At \nthe May 2011 meeting, however, the MPC noted that growth in retail sales and in new vehicle \nsales was showing signs of moderation. During the review period, the committee’s view was \nthat while the growth in household consumption expenditure was likely to be sustained, it \nwas unlikely to accelerate to excessive levels. The MPC pointed to a number of factors that \nwere likely to constrain consumption growth going forward despite relatively high real wage \nsettlements and low levels of interest rates. These constraining factors included continued high \nlevels of unemployment and high levels of consumer debt. \nThe ratio of household debt to disposable income declined only marginally to 77,6 per cent in the \nfourth quarter of 2010, and there had been a persistent increase in the number of consumers \nwith impaired credit records since the implementation of the National Credit Act. In May the \ncommittee also expressed concern about the fact that commercial banks’ ratio of impaired \nadvances to gross loans and advances had remained more or less unchanged at around \n5,8 per cent for some time. This high level of impairments was mainly attributable to retail loans.\nThese developments were reflected in banks’ credit extension to the private sector, which \ncontinued to grow at very subdued rates. While this slow growth was seen to reflect both \nsupply and demand weakness, in the May 2011 statement the committee suggested that there \nwere some tentative signs that banks may have relaxed their lending criteria somewhat. Over \nthe period there was a moderation in the growth in mortgage advances from a recent high of \n4,8 per cent in November 2010 to 2,9 per cent in March 2011, consistent with the weak state \nof the housing market. The resulting negative wealth effects from the real-estate market were \nviewed as a further constraint on consumption expenditure growth.\nThe hesitant nature of the domestic recovery was also regarded as being a function of continued \nuncertainties in the global economy. During the period under review, the MPC noted the uneven \nglobal recovery, but in the most recent statement it observed that the recovery had become \nmore hesitant in recent weeks in the wake of renewed concerns about peripheral Europe, \nthe aftermath of the disaster in Japan and higher commodity prices. Global developments \nare not only important because of their impact on commodity prices, but also because of \ntheir possible impact on domestic growth and the exchange rate through demands for South \nAfrican exports and the impact on capital flows. Although the rand was volatile during the \nperiod, having fluctuated against the US dollar in a range of R6,55 and R7,33, the MPC’s view \nthroughout this period was that the rand was unlikely to pose a significant upside risk to the \ninflation outlook. Interest rates in advanced economies, particularly the US, the euro area \nand Japan, are expected to remain low for an extended period. In the absence of significant \nglobal financial market risk aversion the rand exchange rate was, therefore, expected to remain \nrelatively strong, despite the Bank’s continued purchases of foreign exchange.\nAgainst the backdrop of rising inflation, the repo rate has remained unchanged since November \n2010. However, as outlined above, the MPC’s view was that the observed pressures and risks \nto the inflation outlook emanated from supply-side shocks rather than from excess demand \npressures. The MPC accepts that there is little it can do to prevent these price increases \nfrom impacting on headline inflation. The challenge facing policy-makers is that it is difficult \nto determine whether these shocks are of a temporary or permanent nature. The appropriate \nresponse under such circumstances is to remain vigilant to the emergence of possible \ngeneralised price increases, or so-called second-round effects. The MPC cannot ignore these \nupside risks and pressures because they have the potential to impact negatively on inflationary \n27\nMonetary Policy Review May 2011\nexpectations and, in so doing, affect general wage and price-setting behaviour. At the end of \nits most recent meeting, the MPC warned that it would not hesitate to respond to signs that \nthreatened to move inflation out of the target on a sustained basis.\nThe outlook for inflation\nThe prospects, risk and uncertainties relating to some of the factors that determine the outlook \nfor inflation are presented in this section. \nInternational outlook\nThe global economic recovery has been gaining strength since the previous Monetary Policy \nReview was published in October 2010. Although broader prospects for the global growth outlook \nin 2011 and 2012 have continued to improve, the outlook for global growth is clouded by a number \nof developments that have occurred during this period. In Japan, a severe earthquake (Japan’s \nstrongest on record) and tsunami have devastated parts of northeastern Japan and crippled one of \nthe country’s major nuclear power plants, thereby threatening many global manufacturers’ supply \nchains. Queensland in Australia suffered an enormous flood and an earlier powerful earthquake \nhad crippled large parts of Christchurch in New Zealand. Political turmoil in the MENA region has \nresulted in higher world oil prices that, together with a broader upturn in most commodity prices, \nhave contributed to surging inflationary pressures that present new policy challenges. \nThese developments will undoubtedly slow the pace of the global economic recovery somewhat \nduring the first half of 2011 and have also increased somewhat the downside risks to growth \nin the medium term. In its April 2011 WEO, the IMF’s forecasts are therefore slightly lower than \nearlier forecasts for certain developed countries but, on balance, it projects that global output \nwill expand by a robust 4,4 per cent in 2011 and 4,5 per cent in 2012 (Table 12). The IMF deems \nrisks to its growth projections to be mainly to the downside given disruptions brought about by \nthe natural disasters in some of the advanced countries and continued concerns about sovereign \ndebt in the euro area (Box 3 discusses sovereign debt developments in the peripheral euro area).\nTable 12\t\nIMF projections of world growth and inflation for 2011 and 2012*\nPer cent\nReal GDP\nConsumer prices\n2011\n2012\n2011\n2012\nWorld..................................................................\n(4,2)\n4,4\n4,5\n(3,1)\n4,5\n3,4\nAdvanced economies..........................................\n(2,2)\n2,4\n2,6\n(1,3)\n2,2\n1,7\nUnited States...................................................\n(2,3)\n2,8\n2,9\n(1,0)\n2,2\n1,6\nJapan...............................................................\n(1,5)\n1,4\n2,1\n(-0,3)\n0,2\n0,2\nEuro area.........................................................\n(1,5)\n1,6\n1,8\n(1,5)\n2,3\n1,7\nUnited Kingdom...............................................\n(2,0)\n1,7\n2,3\n(2,5)\n4,2\n2,0\nCanada............................................................\n(2,7)\n2,8\n2,6\n(2,0)\n2,2\n1,9\nOther advanced economies.............................\n(3,7)\n3,9\n3,8\n(2,5)\n3,1\n2,6\nEmerging-market and developing economies...\n(6,4)\n6,5\n6,5\n(5,2)\n6,9\n5,3\nSub-Saharan Africa..........................................\n(5,5)\n5,5\n5,9\n(7,0)\n7,8\n7,3\nCentral and eastern Europe.............................\n(3,1)\n3,7\n4,0\n(4,1)\n5,1\n4,2\nCommonwealth of Independent States............\n(4,6)\n5,0\n4,7\n(7,9)\n9,6\n8,1\nDeveloping Asia...............................................\n(8,4)\n8,4\n8,4\n(4,2)\n6,0\n4,2\nChina ..........................................................\n(9,6)\n9,6\n9,5\n(2,7)\n5,0\n2,5\nIndia.............................................................\n(8,4)\n8,2\n7,8\n(6,7)\n7,5\n6,9\nMiddle East and North Africa...........................\n(5,1)\n4,1\n4,2\n(6,2)\n10,0\n7,3\nLatin America and the Carribean......................\n(4,0)\n4,7\n4,2\n(5,8)\n6,7\n6,0\n*\t IMF projections for 2011 as at October 2010 in parenthesis\nSource:\t IMF World Economic Outlook, April 2011\nMonetary Policy Review May 2011\n28\nReal GDP in advanced economies is projected to expand by 2,4 per cent in 2011 and \n2,6 per cent in 2012, and although financial conditions continue to improve, they remain fragile. \nThe recovery in the US economy began gaining momentum in the fourth quarter of 2010 and \nhigh-frequency economic indicators show more consistent improvement in the early months of \n2011. The IMF projects GDP growth in the US to increase slightly from 2,8 per cent in 2011 to \n2,9 per cent in 2012 but with risks to the outlook remaining elevated. In April 2011 S&P \nannounced that it was altering its outlook on the long-term rating for the US from stable to \nnegative. This was due to the large budget deficits and increasing government debt in the US, \nrelative to other AAA-rated countries. S&P also emphasised that it was its view that the lack of \na clear US government plan for addressing these two issues, and the risk that such a plan may \nnot be formulated and implemented by 2013, would put the US in a weaker fiscal position than \nother AAA-rated countries.\nThe recovery in Japan has been hampered by the recent tragic earthquake and it is very \ndifficult to determine the full economic impact at this stage. The devastating earthquake \non 11 March 2011 has tilted the balance of risks to growth in the country firmly to the \ndownside in the short run and there are concerns about spillovers through Japan’s role in \nthe global supply chain. The Organisation for Economic Co-operation and Development \n(OECD) estimated in April that Japan’s GDP growth may be reduced by as much as \n0,6 percentage points in the first quarter of 2011 and up to 1,4 percentage points in the second \nin the aftermath of the quake. The IMF estimates damage from the earthquake and tsunami \nto amount to between 3 per cent and 5 per cent of the country’s GDP but that the global \nmacroeconomic impact would be limited. Data reflecting the state of the economy since the \nearthquake point to a significant impact on production as manufacturing shrank at the fastest \npace in nine years, according to the purchasing managers’ index. The IMF projects GDP growth \nin Japan to increase from 1,4 per cent in 2011 to 2,1 per cent in 2012.\nIn the euro area the underlying momentum of economic activity continues to be positive but \nuncertainty regarding the growth outlook remains elevated. Following the 1,2 per cent increase \nin euro area real GDP in the fourth quarter of 2010, recent statistical releases and high-frequency \nindicators point towards a continued positive underlying momentum of economic activity in early \n2011. Euro area exports are expected to be supported by the ongoing recovery in the world \neconomy and, given an accommodative monetary policy stance and the relatively high level of \nbusiness confidence, private-sector domestic demand is projected to contribute increasingly to \neconomic growth. However, balance-sheet adjustment in various sectors is expected to dampen \nthe recovery somewhat and downside risks to the growth outlook therefore continue to prevail. \nMore specifically, threats to financial stability and growth are derived from continued strains in the \nmost vulnerable euro area sovereigns and banks. The IMF projects that the euro area’s GDP will \ngrow by 1,6 per cent in 2011 and by 1,8 per cent in 2012. Risks to the medium-term outlook for \nprice developments also remain elevated and on the upside, and relate to possible higher-than-\nassumed increases in energy prices. Risks also relate to the possibility of stronger-than-expected \ndomestic price pressures in the context of a stronger-than-expected recovery in activity.\nUK output growth was weaker than expected in the final quarter of 2010 but rebalancing of the \neconomy is underway and demand has begun to shift from consumption to exports. Domestic \nconsumption is being restrained by the effects of both fiscal consolidation and slow real income \ngrowth, while exports are beginning to show the effects of a more competitive exchange rate \nand improved growth in world demand. Following the 2,3 per cent decrease in UK real GDP \nin the fourth quarter of 2010, recent statistical releases and high-frequency indicators provide \nevidence of a significant margin of spare capacity in the economy but point towards a sustained \nimprovement in the underlying momentum of economic activity. The IMF projects that GDP \ngrowth in the UK would increase to 1,7 per cent in 2011 and to 2,3 per cent in 2012. The Office \nfor Budget Responsibility, formed by the UK government in May 2010 to make an independent \nassessment of public finances and the economy, in March cut its forecast for 2011 economic \ngrowth to 1,7 per cent from 2,1 per cent.\nGrowth in emerging-market and developing countries is projected to amount to 6,5 per cent in \nboth 2011 and 2012. The IMF revised its 2011 and 2012 economic growth forecasts slightly for \nsome emerging and developing countries, and now expects developing Asia to grow by 8,4 per \ncent in both 2011 and 2012. Rising food and oil prices, and Japan’s earthquake disaster present \n29\nMonetary Policy Review May 2011\na risk to sustained growth but the impact of the latter on the broader Asian region is expected \nto be temporary and limited. \nGrowth in Brazil, Russia, India, China and South Africa (the BRICS countries) is projected to \noutpace growth in the developed world. The IMF expects China’s economy to expand by 9,6 per \ncent in 2011 and by 9,5 per cent in 2012, but the People’s Bank of China has been increasing \ninterest rates and raising bank capital requirements to keep inflation in check, which may serve \nto slow down China’s economy somewhat. India’s projected growth was lowered slightly to \n8,2 per cent in 2011 and 7,8 per cent in 2012. Russia’s growth forecast was boosted to 4,8 per \ncent in 2011 and 4,5 per cent in 2012, while Brazil’s projected growth remained unchanged at \n4,5 per cent in 2011 and 4,1 per cent in 2012. The IMF revised its MENA region growth forecasts \nfor 2011 and 2012 downwards by almost 1 percentage point due to widespread political tensions \nin the region. A noticeable impact on GDP in the MENA region is likely to be felt over the next \nseveral months, and the IMF now expects the region’s economy to expand by 4,1 per cent in 2011 \nand by 4,2 per cent in 2012. Faster and more sustainable growth has resumed in sub-Saharan \nAfrica and the IMF projects growth of 5,5 per cent in 2011 and 5,9 per cent in 2012.\nCommodity prices have increased more than had been expected following a number of supply \nshocks and strong economic growth in emerging markets, although currency appreciation in \nemerging and developing countries has helped fend off inflation pressures by keeping the local \ncurrency price of these goods down. The IMF projects that consumer-price growth in emerging \nand developing countries will increase to 6,9 per cent in 2011, before slowing somewhat to \n5,3 per cent in 2012. The IMF cautions that boom-like conditions in some emerging and \ndeveloping countries could develop into overheating as inflation pressure could build up \nsignificantly once production begins to face capacity constraints, and large food and energy \nprice increases unleash demands for higher wages. Macroeconomic prospects for commodity \nprices are expected to remain supportive as growth projections suggest that emerging-market \neconomies will continue leading the expansion. \nBox 3\t\nSovereign debt in the peripheral euro area\nIntroduction\nVarious political groupings in the euro area have been calling for an end to the sovereign bailouts provided to \nperipheral euro area countries and for more rapid debt restructuring to be pursued. The main concern is that \nGreece, Ireland and Portugal in particular are facing crises of solvency rather than liquidity, and that the only way \nthese countries can solve their current cash-flow problems is by writing off some of their debt. The groups suggest \nthat the sooner these countries’ fiscal positions are put on a sustainable footing, the sooner households and \ncompanies can start spending and investing again, thereby enabling sustainable economic growth. There is also \nconcern that the longer this decision is delayed, the more the peripheral country debt burden is shifted onto wider \neurozone taxpayers, either directly via bailout packages or indirectly via liquidity programmes.\nIn recent months policy-makers in the euro area have taken further steps to strengthen crisis management, \npolicies and governance. The effective lending capacity of the European Financial Stability Facility (EFSF) \nhas been increased to €440 billion and the European Stability Mechanism (ESM) to €500 billion. This has \nbeen accomplished through a range of funding mechanisms that include IMF pricing principles for ESM \nloans. Despite these developments and an improved euro area economic outlook, sovereign credit rating \ndowngrades have been issued for Greece, Ireland and Portugal in recent weeks and market concerns have \ncontinued focusing on political developments that could get in the way of a smooth resolution of the euro \narea’s sovereign debt difficulties. Bank lending conditions in the periphery economies have at the same \ntime remained tight amid tighter supervision and regulation and capital rebuilding. Many banks that hold \nperiphery sovereign debt are still rebuilding their balance sheets and are facing significant challenges in \nimplementing new capital requirements.\nKey fiscal ratios in the peripheral euro area\nThe euro periphery sovereign crisis countries’ incurred budget deficits of between 8 and 12 per cent of gross \ndomestic product (GDP) in 2010 compared with the euro area average of about 6,5 per cent. Their gross \npublic debt to GDP is projected to reach between 64 and 152 per cent of GDP in 2011 and only Spain and \nPortugal will be below 100 per cent. One of the most relevant measures to determine the sustainability of \nstate leverage is the net sovereign debt to government revenue ratio. For some of the countries of peripheral \nEurope this specific measure has been raising concerns in markets. The ratio for these countries (Figure \nB3.1) implies that taxes will have to rise significantly and therefore that the higher taxes could constrain \nMonetary Policy Review May 2011\n30\nthe economic growth that is being assumed will raise tax revenue sufficiently in the years ahead to service \nsovereign debt.\nThe process of normalising fiscal policy in the post-financial crisis period has been difficult for most euro \nperipheral countries as they have crossed the 90 per cent debt-to-income threshold which, according \nto Reinhart and Rogoff 2010, historically begins to be associated with lower growth on average (see Box \n1: “Risks for the global growth outlook on the road to fiscal consolidation in advanced countries” in the \nOctober 2010 Monetary Policy Review). Substantial interest expenditure makes public finances more \nvulnerable to rising interest rates and in effect ensures further borrowing or fiscal tightening. Although a \nrecord-low interest rate environment has kept the carrying cost of debt relatively modest thus far, markets \nhave expressed concern that a higher interest rate environment for an extended period would place an \noverly severe strain on national budgets of the euro peripheral countries. \nFigure B3.2 shows that sovereign peripheral and bank credit-default swap (CDS) spreads remained wide in \nearly 2011 and in some cases widened further in recent weeks, thereby signalling a 64,5 per cent chance of \ndefault in the case of Greece within five years. Market expectations regarding debt restructuring in the euro \nperiphery drove yield spreads of Greek government bonds over German Bunds to record highs. The cost \nof protecting against a default for five years on Greek government debt also increased sharply after media \nspeculation on 14 April of plans by the Greek government to introduce new and deeper austerity measures \nas it enacts budget cuts demanded as a condition for the €110 billion lifeline from the European Union (EU) \nand the IMF. Over the past weeks, spreads have not only widened for Greece (spread over Germany up to \n1 656 basis points) but also for Portugal (spread over Germany up to 759 basis points); and, significantly, \nfor Spain (spread over Germany up to 166 basis points). By contrast, Irish spreads are slightly lower, albeit \nstill very high (spread over Germany down 27 basis points, to 700 basis points). \nThe international financial institutions, the European Central Bank (ECB) and other sovereign peripheral \ncountry policy-makers’ concerns about debt restructuring revolve around the following: \n1.\t Restructuring any eurozone member’s debts while the country is still running a primary deficit, excluding \ndebt interest, would effectively defeat the purpose of the restructuring.\n2.\t Given their substantial holdings of peripheral euro area sovereign debt, some European banks are not \nyet strong enough to absorb the losses from a haircut on government bonds, and the turmoil in bond \nmarkets associated with haircuts could lead to another financial crisis. \n3.\t The outstanding stock of debt would not be reduced significantly with a voluntary restructuring via \nextending maturities or cutting interest payments and premature debt restructuring would ease the \npressure on peripheral countries to push ahead with required structural reforms. \nAny country that defaults would be shut out of debt markets and the government concerned would still \nrequire continued support to meet its commitments (the country would either need to restructure its debt with \nbondholders or ask European counterparts for further financial assistance either directly or through the EFSF).\nSpain\nPortugal\nIreland\nItaly\nGreece\n0\n0,5\n1,0\n1,5\n2,0\n2,5\n3,0\n3,5\n4,0\nGovernment net debt to government revenue\nSource: IMF World Economic Outlook, April 2011 database\nRatio\nGovernment gross debt to GDP\nFigure B3.1 \nGross government debt to GDP and net government debt\n \nto government revenues, 2011\n31\nMonetary Policy Review May 2011\nRisks for the global growth outlook\nAlthough financial conditions eased in most parts of the euro area during late 2010 and into early 2011, the \nprogress in financial system repair has lagged behind the economic recovery and total leverage (public plus \nprivate) has continued to rise in euro area periphery countries. Banks in Europe hold a large percentage of \neuro peripheral sovereign debt (according to the Bank for International Settlements, French and German \nbanks accounted for almost two-thirds of lending to both public and private debtors in Greece as at end \nSeptember 2010 with French banks accounting for US$59,4 billion and German banks US$40,3 billion, \nfollowed by UK and Portuguese lenders to Greece). If sovereign entities were to default on their loans or \ncome close, this could have disruptive implications for the euro area given that balance-sheet repair is \nstill a work in progress for many banks. A credit crunch could ensue if banks have to take a haircut, suffer \nreserves depletion and are unable to raise new capital. \nThe euro crisis revolves around how best to deal with deleveraging that will have to take place in the years \nahead. Sovereign and bank risks in the euro area are intertwined, and this has heightened concern regarding \nthe systemic consequences of any debt restructurings and the inevitable impact this would have on the \neuro area growth performance. Contagion risks are therefore significant in the euro area and the current \ncrisis of peripheral Europe could quickly evolve into a problem of systemic proportions. However, media \nconcerns about a Greek sovereign debt default in the very near term still appear somewhat premature, \ngiven that Greece is currently adequately funded by the EU and the IMF, and that there is little incentive to \nrestructure while still working through an adjustment programme.\nRisks to the euro area growth outlook are elevated as countries such as Germany have very strong \nprospects but peripheral Europe is clearly quite weak. Default by a euro area member would also, at best, \nonly provide a temporary solution before problems re-emerged relating to productivity and even-weaker \ngrowth outcomes. Periphery countries need more time than certain political groups appear willing to allow \nfor them to turn around their fiscal positions and politics may yet force policy-makers’ hands, particularly if \neconomically stronger countries refuse to keep supporting bailouts. However, there appears to be no better \nalternative than the measured approach that policy-makers in Europe have thus far been pursuing in the \nconcerted hope of paving the way for orderly economic recovery. \nReferences:\nReinhart, C M and K S Rogoff. 2010. “Growth in a Time of Debt”. NBER Working Paper No. 15639, January.\nBank for International Settlements. 2011. “What the BIS Banking Statistics Say (and what they do not) about \nBanking Systems’ Exposures to Particular Countries and Sectors”. BIS Quarterly Review, pp. 15–17, March. \nBasel: Bank for International Settlements.\n0\n300\n600\n900\n1 200\n1 500\nGreece\nPortugal\nSource: Bloomberg\nItaly\nSpain\n2009\nBasis points\nIreland\nFigure B3.2 \nSovereign 5-year CDS spreads\n2010\n2011\nMonetary Policy Review May 2011\n32\nThe composite leading indicator compiled by the OECD projects continued economic \nexpansion in OECD economies. It increased by 1,5 per cent in March 2011, compared with the \ncorresponding month of the previous year (Figure 17). The JPMorgan global manufacturing PMI \nhas remained comfortably above the neutral level of 50 for more than a year, and increased to a \nlevel of 57,4 in February 2011 before declining to 55,0 in April. The year-on-year rate of change \nin the OECD industrial production index slowed down slightly from 7,2 per cent in December \n2010 to 6,0 per cent in February 2011. \nOutlook for domestic demand and supply\nAccording to the Bank’s latest quarterly projection, annual average growth in real output is \nexpected to be 3,6 in 2011 and 3,9 per cent in 2012 (Figure 18). Annualised real GDP growth is \nexpected to exceed 3,5 per cent in all four quarters of 2011. \nPercentage change over 12 months \nIndex points\n30\n35\n40\n45\n50\n55\n60\n65\n \nOECD composite leading indicator\n \nOECD industrial production index\n \nJPMorgan global manufacturing PMI (right-hand scale) \nSources: OECD and JPMorgan\nFigure 17 \nSelected indicators of global economic activity\n-20\n-15\n-10\n-5\n0\n5\n10\n15\n1999\n2001\n2003\n2005\n2007\n2009\n2011\nPercentage change at seasonally adjusted annualised rates\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\nFigure 18 \nReal GDP growth forecast\n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n33\nMonetary Policy Review May 2011\nNational Treasury’s February 2011 Budget Review projects growth in year-on-year real GDP of \n3,4 per cent in 2011, followed by 4,1 per cent in 2012 and 4,4 per cent in 2013. By comparison, \nthe April 2011 Reuters survey of long-term forecasts for the South African economy reveals \nthat analysts expect year-on-year GDP growth to register 3,6 per cent in 2011, followed by \n3,9 per cent in 2012 and 4,1 per cent in 2013. On the demand side, the main influences on \ngrowth during this forecast period are expected to be net exports and gross fixed capital \nformation, the latter projected to rise by 3,9 per cent in 2011, 5,5 per cent in 2012 and 6,8 per \nin 2013. On the supply side, the secondary and tertiary sectors are expected to be the main \ncontributors to domestic growth.\nThe Bank’s composite leading business cycle indicator increased by 1,0 per cent in February 2011 \ncompared with the preceding month (Figure 19). Nine of the eleven component time series that \nwere assessed for February 2011 increased, while two decreased. The largest positive contribution \nto the leading indicator came from the BER Business Confidence Index, followed by the BER \naverage hours worked per factory worker in manufacturing. The two negative contributors in \nFebruary were the number of building plans passed for flats, townhouses and houses larger than \n80 m², as well as the six-month smoothed growth rate in the real M1 money supply.\nThe seasonally adjusted Kagiso PMI stabilised at a level of 56,4 index points in April 2011, \nafter having increased from 51,6 index points in February to 59,7 index points in March. While \nthe business activity and new sales indices showed small declines, the forward-looking index \nmeasuring expected business conditions in six months’ time remained unchanged at a level of \n58,1 index points. \nFor the first time in three years, the Rand Merchant Bank (RMB)/Bureau for Economic Research \nat Stellenbosch University (BER) Business Confidence Index (BCI) broke the neutral level of \n50 index points by rising from 44 points in the fourth quarter of 2010 to 55 in the first quarter \nof 2011. This indicates that there are more firms that are optimistic than pessimistic about \nprevailing business conditions. With the exception of the building sector, there has been a \ngeneralised improvement in business confidence in most sectors surveyed. The motor trade \nsector rose sharply to 84 index points in the first quarter of 2011; the highest level in five years. \nWholesale sector confidence rose to 65 index points in the first quarter. \nAccording to the first quarter 2011 BER Manufacturing Survey, manufacturing business \nconfidence has improved by 10 points to reach 51 index points in the first quarter of 2011. \nOwing to improving business conditions, rising domestic sales volumes and capacity utilisation, \nmanufacturers are planning to increase fixed investment in the second quarter of 2011. The \noutlook for fixed investment has improved as the net majority expecting total fixed investment to \nrise in 12 months’ time increased from 11 to 19 per cent.\nIndex: 2000 = 100\n1994\n1996\n1998\n2000\n2002\n2004\n2006\n2008\n2010\nFigure 19 \nComposite leading business cycle indicator\n80\n90\n100\n110\n120\n130\n140\nMonetary Policy Review May 2011\n34\nAccording to the BER’s Retail Survey, a net majority of retailers and wholesalers reported \nan improvement in business conditions in the first quarter of 2011. Retailers in non-durable \ngoods reported that their first quarter 2011 sales growth exceeded their earlier expectations. \nNew vehicle dealers and retailers in durable goods reported that sales growth strengthened \nin the first quarter of 2011. Wholesalers in both consumer goods and non-consumer goods \nalso reported a substantial improvement in sales volumes, suggesting that the trade sector \nrecovery is on track. In general, both the retailers and wholesalers are optimistic about their \nsales prospects during the second quarter of 2011.\nIndicators of inflation expectations\nInflation expectations surveyed by the BER in the first quarter of 2011 continued to trend \ndownwards (Figure 20). Average expectations for 2011 declined from 5,5 per cent in the \nsurvey undertaken in the fourth quarter of 2010 to 5,3 per cent in the first quarter of 2011 \nsurvey. Inflation is expected to be 5,7 per cent in 2012 and 6,0 per cent in 2013.\n \nFinancial analysts surveyed by the BER expect inflation to reach 4,7 per cent in 2011, 5,5 per \ncent in 2012, and 5,6 per cent in 2013. For 2011, business people revised their fourth quarter \n2010 expectations from 6,0 to 5,6 per cent in the first quarter of 2011. For 2011 and 2012 \ntrade unions have revised their inflation expectations to 5,6 and 5,8 per cent respectively. Trade \nunions and business expect inflation to breach the target band in 2013.\nThe latest estimates of inflation expectations for the period from 2011 to 2013 obtained from \nthe Reuters survey conducted in April 2011 show that average annual CPI inflation is expected \nto remain below the upper level of 6 per cent of the CPI inflation target range, although \nestimates have been revised upwards since March. As depicted in Table 13, average CPI \ninflation expectations for 2011 are 5,0 per cent, followed by 5,8 per cent for 2012 and 5,7 per \ncent for 2013.\nAnnual averages, per cent\n5,0\n5,5\n6,0\n6,5\n2011\n2012\n2013\nFigure 20 \nBER surveys of headline CPI inflation expectations\n6,1\n5,5\n5,3\n6,4\n6,2\n6,0\n5,7\nSurvey conducted during:\n \n3rd qr 2010\nSource: Bureau for Economic Research, Stellenbosch University \n \n4th qr 2010\n \n1st qr 2011\n35\nMonetary Policy Review May 2011\nTable 13\t\nReuters survey of CPI inflation forecasts: April 2011*\n2011\n2012\n2013\n1. Mean.........................................................\n(4,8)\n5,0\n (5,7)\n5,8\n(5,7)\n5,7\n2. Median.......................................................\n(4,8)\n5,0\n (5,6)\n5,7\n (5,8)\n5,8\n3. Highest......................................................\n(7,3)\n5,5\n(7,9)\n7,0\n (6,5)\n6,5\n4. Lowest.......................................................\n (4,1)\n4,6\n(5,3)\n5,4\n (5,0)\n5,0\nNumber of forecasters...................................\n(19)\n19\n (19)\n19\n (13)\n16\n* \t March 2011 survey results in parentheses\nSource: \tReuters\nInflation expectations derived from break-even inflation rates, measured as the difference \nbetween the the yields on conventional South African nominal government bonds and CPI \ninflation-linked government bonds of similar maturity, have been trending higher from October \n2010 (Figure 21). In May 2011 the 12- to 15-year maturity break-even rates were higher than the \n2- to 3-year maturity break-even rates, suggesting that investors expect long-term inflation to be \nhigher, although both long- and short-maturity break-even rates were within the inflation target \nrange. On 13 May 2011 break-even inflation in the 2- to 3-year maturity range stood at 5,6 per \ncent, while that over 12 to 15 years was at 5,8 per cent. \nThe South African Reserve Bank inflation forecast\nThe most recent projections of the Bank’s quarterly inflation forecasting model, presented to the \nMPC meeting on 10–12 May 2011, are reproduced in the form of a fan chart in Figure 22. These \nprojections show that there has been a further upward revision to the CPI inflation forecast of \nthe Bank since the previous meeting of the MPC in March 2011, mainly as a result of revised \nassumptions regarding administered price increases over the forecast period. \nThe central projection, conditional on an unchanged repurchase rate, is for the average quarterly \nCPI inflation rate to reach the upper limit of the inflation target range at 6,0 per cent during the \nfinal quarter of 2011, and to peak at 6,3 per cent in the first quarter of 2012. Inflation is then \nprojected to return to within the target range by the second quarter of 2012 and remain close to \nthe upper limit of the range for the rest of the year. Inflation is expected to average 5,1 per cent \nin 2011 and 6,0 per cent in 2012, compared with the averages of 4,7 per cent and 5,7 per cent \nthat were forecast at the time of the previous meeting. \nPercentage points\n2006\n2007\nFigure 21 \nBreak-even inflation rates\n3\n4\n5\n6\n7\n8\n9\n10\n \nSpread between R189 and R206 bonds (2- to 3-year maturity)\n \nSpread between R197 and R186 bonds (12- to 15-year maturity)\n2008\n2009\n2010\n2011\nMonetary Policy Review May 2011\n36\nThe main risks to the inflation outlook continue to emanate from cost–push pressures, including \nadministered prices. The acceleration in food prices is expected to persist for some time, \ndespite indications that global food price inflation may have peaked, and international oil prices \nhave displayed considerable volatility recently. Underlying demand conditions in the economy \nremain relatively restrained and are not seen to pose a significant risk to the inflation outlook \nat this stage, although a depreciation of the exchange rate of the rand would generate a more \npessimistic outcome for targeted inflation. On balance, there is deemed to be a slight upside \nrisk to the forecast of targeted inflation displayed in the fan chart in Figure 22.\nAssessment and conclusion\nThe global economic recovery has continued to be uneven, characterised by generally high growth \nin emerging economies and low growth in many of the advanced economies. While there is a \ngeneral view that the recovery is sustainable, there are a number of risks to the growth outlook. \nThese include the impact of rising commodity prices, the sovereign debt crisis in peripheral \nEurope and the implications of the disaster in Japan. There are also still some concerns about the \nrelatively weak private-sector expenditure in some of the advanced economies, and their ability to \nweather any withdrawal of government fiscal and monetary policy stimuli. As debt sustainability \nand the need for fiscal consolidation are receiving more focused attention in many countries, the \nburden of supporting growth has fallen increasingly on monetary policy. This implies that interest \nrates in a number of the advanced economies, particularly the US and Japan, are likely to remain \nlow for a protracted period. This would seem to imply continued capital flows to emerging-market \neconomies with implications for their exchange rates. \nEmerging markets in general have been experiencing strong growth, and there has been a \ngeneral trend of monetary policy tightening in response to emerging inflationary pressures. \nMore recently, attempts made by some emerging-market economies, particularly China, to \nmoderate the growth in their economies have also had an impact on the pattern of capital flows \nand commodity prices. \nPer cent\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\nFigure 22 \nTargeted inflation* forecast\n0\n2\n4\n6\n8\n10\n12\n14\n* CPIX for metropolitan and other urban areas until the end of 2008; CPI for all urban areas thereafter\nNote:\t\nThe fan chart uses confidence bands to depict varying degrees of certainty. The darkest \nband of the fan chart covers the most likely 10 per cent of probable outcomes foreseen \nfor inflation, including the central projection. Each successive band, shaded slightly \nlighter and added on either side of the central band, adds a further 10 per cent to the \nprobability, until the whole shaded area depicts a 90 per cent confidence interval (see \nBox 4 “Understanding the fan chart” on p. 27 of the March 2001 Monetary Policy Review).\n37\nMonetary Policy Review May 2011\nSouth Africa remains an outlier compared with its emerging-market peers. Domestic growth \nremains below potential, and although growth is expected to be sustained, it is expected to be \nbelow that of emerging-market economies in general. This is due, in part, to the persistently \nlow growth in fixed capital formation, the uncertain growth prospects in some of South Africa’s \ntraditional trading partners and to possible constraints on consumption expenditure growth.\nSince the publication of the October 2010 Monetary Policy Review, the global and domestic \ninflation environment has deteriorated markedly, mainly as a result of oil and food price increases. \nThe challenge facing monetary policy-makers is to determine whether these developments are \nof a temporary or permanent nature. This is not always easy. The appropriate monetary policy \nresponse will differ, depending on the nature and persistence of the shock and the extent to \nwhich inflation expectations are well entrenched. If expectations are not well anchored, even \ntemporary shocks could cause the first-round effects to translate into more generalised inflation. \nFor this reason, it is important that monetary policy is seen to be focused on its inflation objective \nover the appropriate time horizon. This then becomes a fine balancing act for the MPC, as a \nflexible inflation-targeting framework requires that monetary policy actions be mindful of the \nimpact on the real economy as well. This is particularly the case when the domestic economy \nis relatively fragile and there is underutilised capacity.\nAt its most recent meeting (May 2011), the MPC noted the adverse inflation outlook and the fact \nthat inflation was expected to exceed the upper limit of the target range temporarily during the first \nquarter of 2012. At the same time, the MPC noted that the factors behind this deterioration were \nmainly of a cost–push nature, and not a result of excess demand conditions, given the continued \nexistence of a negative output gap. This does not mean that these inflation developments can \nbe ignored. While it is clear that the first-round effects cannot be avoided, the MPC will remain \nvigilant with respect to indications of second-round effects or generalised inflation, and will not \nhesitate to take timeous appropriate action, particularly if inflation is expected to move out of the \ntarget range on a sustained basis. The Bank will continue to give primacy to its objective of price \nstability, and implement monetary policy within a flexible inflation-targeting framework.\nMonetary Policy Review May 2011\n38\nStatement of the Monetary Policy Committee\n18 November 2010\nIssued by Gill Marcus, Governor of the South African Reserve Bank, at a meeting of the \nMonetary Policy Committee (MPC) in Pretoria\nSince the previous meeting of the MPC, the outlook for domestic inflation has improved further \nagainst the backdrop of a continued negative domestic output gap and sustained strength in \nthe exchange rate of the rand. Persistently low growth in the United States (US) and renewed \nquantitative easing, combined with renewed concerns about the solvency of some euro area \ncountries, are expected to prolong the current environment of low global interest rates and \ncontinued capital flows to emerging market economies. While a number of cost–push factors \nare beginning to pose some upside risk to domestic inflation, the overall risks to the inflation \noutlook are assessed to be fairly evenly balanced.\nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all urban \nareas declined to 3,2 per cent in September 2010, compared with 3,5 per cent in August. \nGoods price inflation measured 1,5 per cent in September, while services inflation amounted to \n5,2 per cent. The categories of housing and utilities (mainly electricity) and miscellaneous goods \nand services (predominantly insurance costs) together contributed 2,2 percentage points of the \n3,2 per cent inflation outcome. CPI excluding administered prices measured 2,6 per cent, while \nadministered prices excluding petrol measured 9 per cent.\nOf the twelve broad CPI categories, only one category had an inflation rate that was within the \ntarget range of 3 to 6 per cent, while the inflation rates of six categories were below the lower \nend of the target range. Five categories, with a combined weighting of 34,6 per cent, had \ninflation rates above the 6 per cent level.\nHaving peaked at 9,4 per cent in June 2010, producer price inflation has since moderated \nsomewhat and measured 6,8 per cent in September. Despite higher global food price trends, \nagricultural prices and manufactured food prices continued to decline on a year-on-year basis. \nThis indicates subdued pressure on food prices in the coming months at the consumer level, \nwhere food prices increased at a year-on-year rate of 1,2 per cent.\nThe lower-than-expected inflation outcomes contributed to a further downward adjustment in \nthe inflation forecast of the Bank throughout the forecast period to the end of 2012. Targeted \nCPI inflation averaged 3,5 per cent in the third quarter of 2010. A similar average outcome is \nexpected during the fourth quarter, resulting in an expected average inflation rate of 4,3 per \ncent for 2010. Inflation is then expected to remain at an average of 4,3 per cent in 2011 and \nto increase to 4,8 per cent in 2012. In the final quarter of 2012 inflation is expected to average \n4,8 per cent, compared with the previous forecast of 5,1 per cent.\nThe more favourable forecast is a result of an expected moderation in administered price \ninflation, a more appreciated nominal effective exchange rate of the rand, as well as lower-than-\nexpected actual inflation outcomes, which lowered the starting point of the forecast.\nInflation expectations as reflected in the survey conducted by the Bureau for Economic Research \n(BER) at Stellenbosch University during the third quarter have been revised downwards for all \ncategories of respondents. Expectations have been on a consistent downward trend since \nreaching a peak in the second quarter of 2009. Nevertheless, in contrast to expectations of \nthe financial analysts, who expect inflation to remain within the target range over the forecast \nperiod, the expectations of trade unions and business executives remain outside the target \nrange. According to this survey, inflation is expected to average 5,7 per cent in 2010, and \n6,1 per cent and 6,4 per cent in 2011 and 2012 respectively.\nThe Reuters consensus survey of financial analysts, conducted in October, also shows a more \nfavourable outlook with inflation expected to average 5,5 per cent in 2012. Break-even inflation \nrates as derived from the inflation-linked bonds have also declined significantly across all \nmaturities, to levels of around 5 per cent.\n39\nMonetary Policy Review May 2011\nThe global economic recovery has continued in an uneven manner, with downside risks to \nthe growth outlook in a number of the advanced economies including the US, Japan and \nthe euro area. Further fiscal stimulus in the United States (US) appears unlikely, suggesting \nthat the burden of supporting the flagging growth and persistent unemployment will fall \ndisproportionately on monetary policy. The recent resumption of quantitative easing, against \na backdrop of deflation fears, indicates that monetary policy in the US is likely to remain \nhighly expansionary for some time. There is heightened uncertainty in the euro area with the \nfocus, once again, shifting to the peripheral countries, as concerns relating to the solvency \nof the Irish banking system and the sustainability of Irish public-sector deficits have raised \nfears of possible contagion within Europe and possibly to the global financial sector. Spreads \non sovereign debt have widened again in some of the Southern European countries after a \nrelatively steady period, and in some instances have exceeded the levels reached in April \n2010, when sovereign debt concerns reached their peak.\nApart from the risks to the fragile global recovery, there are also significant risks to financial \nstability emanating from these developments in the advanced economies. Should the problems \nin the euro area not be resolved in an orderly manner, there are risks of a sudden reversal of \ncapital flows to emerging markets.\nBy contrast, growth in the emerging markets has remained buoyant and in some instances \nmonetary policy has been tightened in response to increased demand pressures. Furthermore, \nthe strong growth in Asia, and China in particular, has underpinned commodity prices, which \nhave contributed to the stronger trend in inflation in these countries. It the extent to which growth \nin the emerging markets can be sustained independently of a recovery in the industrialised \neconomies is still unclear. Despite the higher commodity prices, global inflationary pressures \nremain relatively benign.\nThe quantitative easing has continued to have spillover effects on emerging-market economies. \nThe search for yield resulting from this increase in liquidity has implications for the exchange rates \nof the recipient countries. South Africa has been no exception in this respect and appreciation \npressures are expected to persist for some time, in the absence of renewed bouts of global risk \naversion. The exchange rate therefore remains a downside risk to the inflation outlook.\nSince the previous meeting of the MPC, the rand has appreciated by over 3 per cent against \nthe US dollar and is more or less unchanged on a trade-weighted basis. This has been despite \nlower domestic interest rates and the higher pace of reserve accumulation in the past two \nmonths. In October the Bank acquired the proceeds of the foreign purchase of Didata, which \nwere in excess of US$2 billion. The recent observed volatility in the bilateral rand exchange \nrates has been mainly as a result of the volatility in the euro/dollar exchange rate. From a policy \nperspective, focus is maintained on the trade-weighted exchange rate.\nThe domestic growth outlook remains subdued and below-trend growth is expected to persist. \nThe forecast of the Bank is relatively unchanged since the previous meeting of the MPC, with \nGDP growth remaining at 2,8 per cent for 2010 and expected to average 3,3 per cent and \n3,6 per cent in 2011 and 2012 respectively. The composite leading business cycle indicator of \nthe Bank has been trending sideways since April, suggesting a possible moderation in the pace \nof recovery in the months ahead. Private sector gross fixed capital formation is expected to have \nremained weak in the third quarter of 2010.\nThe manufacturing sector, in particular the motor vehicle and components sector, was hit \nparticularly hard by industrial action, which contributed to the contraction of manufacturing \noutput in the sector in the third quarter. Year-on-year growth in manufacturing sector output \nin September measured 1,4 per cent, much lower than market expectations, while output \ncontracted by 1,5 per cent on a quarter-on-quarter basis in the third quarter. This was \nconsistent with the declining manufacturing capacity utilisation in the third quarter, as well as \nthe weakening Kagiso Purchasing Managers Index, which has returned to below the neutral \nlevel of 50. The construction and civil engineering sectors are also facing a challenging outlook. \nBy contrast, output growth in the mining sector improved markedly in the third quarter and \ncontributed positively to third-quarter GDP growth. The Rand Merchant Bank (RMB)/BER \nMonetary Policy Review May 2011\n40\nbusiness confidence index has been increasing, but still reflects negative sentiment overall. As \na result of these trends, unemployment in the economy has shown little sign of reversing.\nThere are indications of recovery in household consumption expenditure in the economy. Retail \ntrade sales decreased by 1,4 per cent on a month-on-month basis in August, but increased by \n0,4 per cent in September. On a year-on-year basis, the increase was 6,1 per cent. Although \nvehicle sales have grown significantly on a year-on-year basis, the short-term trends have \nmoderated somewhat but were likely to have been impacted by the industrial action in this sector. \nConsumer confidence, as reflected in the FNB/BER consumer confidence index remains relatively \nhigh, but was largely unchanged during 2010. Household consumption expenditure is expected \nto be supported by positive wealth effects as is reflected in higher asset prices and lower interest \nrates, but constrained by high unemployment and significant household debt levels.\nGrowth in total loans and advances to the private sector by banks has continued to an increase \nat a moderate pace, having increased by 4,1 per cent in September. This figure was somewhat \ninflated by technical factors such as the acquisition of mortgage loan books and a general \nloan book by banks from non-banks in the past three months. Mortgage advances were again \nthe main contributors to the positive trend, increasing by 4,8 per cent on a year-on-year basis \nin both August and September. Growth in instalment sale credit and leasing finance turned \nmarginally positive after 17 consecutive months of contraction, while other loans and advances \naccelerated to a year-on-year growth of 4,5 per cent in September, from 0,4 per cent in August. \nCredit card advances and bank overdrafts, however, continued to contract. \nIn the banking sector, impaired advances to gross loans and advances declined marginally to \n5,7 per cent in September 2010, having reached a peak of slightly over 6 per cent in November \n2009. There is, however, some evidence that the banks are still charging higher spreads above \nthe repurchase rate than was the case before the crisis, which indicates that the recent monetary \npolicy easing has not been fully passed through to new borrowers. \nThe fiscal policy stance has tightened moderately with the narrowing of the expected deficit \nbefore borrowing from the original estimate of 6,5 per cent to a revised estimate of 5,3 per \ncent for the current fiscal year, representing an estimated structural deficit of 4,1 per cent. The \ndeficits for the coming fiscal years have also been adjusted downwards, and a 3,2 per cent \ndeficit is expected in 2013/14. Most of the adjustment has been due to higher-than-expected \nrevenue collections. \nThe main risks to the inflation outlook continue to emanate from cost–push factors. These \ninclude wage trends and administered prices. Food and petrol prices are also identified as \npotential longer-term risks. \nThere are some tentative indications of moderation in wage growth. According to Andrew \nLevy Employment Publications, the average wage settlement rate amounted to 8,3 per cent \nin the first nine months of 2010, compared with 9,3 per cent in 2009 as a whole. However the \nQuarterly Employment Survey of Statistics South Africa indicates that in the second quarter of \n2010 the year-on-year average nominal remuneration per worker increased by 15,8 per cent. \nThe unit labour cost increase, which adjusts for productivity increases, amounted to 10,8 per \ncent, up from 10,3 per cent in the previous quarter.\nGlobal food prices have been affected by adverse weather conditions in a number of regions, \nbut the impact on domestic prices has been counteracted in part by the rand exchange rate \ntrends and the bumper maize crop. The exchange rate has also moderated domestic petrol \nprice increases. Having remained relatively stable in a narrow range for the past few months, the \nprice of Brent crude oil has increased over the past weeks to above the US$80 per barrel level, \nresulting in a cumulative increase in domestic petrol prices of 25 cents per litre in October and \nNovember, and a further increase is likely in December. Global oil prices are, however, expected \nto be constrained somewhat by slow growth in the advanced economies.\nIn considering the prevailing conditions and data, it is important to emphasise that the focus, \nnotwithstanding any immediate impact or influence, is on the situation that might exist 12 to 18 \n41\nMonetary Policy Review May 2011\nmonths hence. There are significant voices and varied opinions aired in the public domain, all \nexpressing a view on what needs to be done. While it is important to listen and hear what is \nbeing said, it is the responsibility of the MPC to determine the path of interest rates without fear \nor favour. And this is what we will continue to do.\nThe MPC has taken cognisance of the improved longer-term inflation outlook and assesses \nthe risks to this outlook to be fairly evenly balanced. The domestic economic recovery remains \nfragile and the adverse global developments make the growth outlook more uncertain. The MPC \nbelieves that while monetary policy cannot determine the long-term growth path of the economy, \nit can impact on cyclical deviations of output from potential output. The view of the MPC is that \nthere is room for further stimulus, given the weakness in the supply side of the economy. \nThe MPC has accordingly decided to reduce the repurchase rate by 50 basis points to 5,5 per \ncent per annum with effect from 19 November 2010. This action is viewed to be consistent with \nthe continued attainment of the inflation target. The scope for further downward movement, \nhowever, is seen to be limited, given the signs of recovery in household consumption expenditure \nand credit extension. This will be assessed on an ongoing basis. \nMonetary Policy Review May 2011\n42\nStatement of the Monetary Policy Committee\n20 January 2011\nIssued by Gill Marcus, Governor of the South African Reserve Bank, at a meeting of the \nMonetary Policy Committee (MPC) in Pretoria\nSince the previous meeting of the MPC, there have been more convincing signs that the \nrecovery in the global economy will be sustained. However, growth in the advanced economies \nis expected to be slow and is subject to a number of downside risks, including the sovereign \ndebt crisis that continues to beset the eurozone. The more promising global growth outlook, as \nwell as the unfavourable weather conditions, has implications for commodity prices, particularly \nthose of food and energy. These pressures are likely to pose an increasing risk to both the \nglobal and domestic inflation outlook. Nevertheless, domestic inflation is expected to remain \nwithin the target range for the forecast period.\nDomestically, the output gap remains negative and gross domestic product (GDP) growth is \nexpected to remain below potential over the next two years. However, there are indications \nthat the outlook for output growth, while hesitant, is somewhat more positive. The recovery in \nhousehold consumption expenditure appears to be sustained. \nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all urban \nareas moderated to 3,5 per cent in December from 3,6 per cent in November 2010. The \naverage inflation rate for 2010 was 4,3 per cent compared with 7,1 per cent in 2009. Food price \ninflation in December measured 1,4 per cent, unchanged on a month-on-month basis. The \nmain contributor to the inflation outcome remained housing and utilities, primarily electricity, \nwhich contributed 1,5 percentage points to the 3,5 per cent outcome. Administered prices \nexcluding petrol increased at a rate of 9,1 per cent in both November and December. \nYear-on-year producer price inflation reached a recent peak of 9,4 per cent in June 2010, and \nhas declined moderately since then. In November, the producer price index (PPI) increased by \n6,2 per cent, compared with 6,4 per cent the previous month. The impact of the exchange rate \non producer prices is still clearly evident, with the prices of imported commodities increasing at \na year-on-year rate of 0,5 per cent. Manufactured food prices increased by 0,6 per cent, while \nagricultural prices declined by 0,3 per cent.\nThe CPI forecast of the Bank has been revised upwards since the MPC’s previous meeting. \nNevertheless, the domestic inflation trajectory is still expected to remain within the target \nrange over the entire forecast period to the end of 2012. Inflation is now expected to average \n4,6 per cent in 2011 and 5,3 per cent in 2012. The upward adjustment is mainly due to revised \nassumptions of the international oil price over the forecast period, and we will continue to \nmonitor global inflation trends closely.\nThe Bank’s forecast is similar to the Reuters consensus forecast. In the December survey, the \nmean forecast of CPI inflation was 4,5 per cent for 2011, 5,4 per cent for 2012 and 5,6 per cent \nfor 2013. These forecasts were slightly higher than those in the November survey. The break-\neven inflation rates across all maturities also continue to reflect inflation expectations within the \ntarget range.\nInflation expectations as reflected in the survey conducted by the Bureau for Economic Research \n(BER) at Stellenbosch University in the fourth quarter of 2010 continued to trend downwards. \nFor the first time, average expectations for 2011 are within the inflation target band at 5,5 per \ncent. The expectations of all categories of respondents declined, with both business executives \nand trade union officials expecting inflation to average 6,0 per cent, while those of the financial \nanalysts declined to 4,5 per cent. \nAll categories of respondents expect inflation to increase again in 2012 when it is expected to \naverage 6,2 per cent.\n43\nMonetary Policy Review May 2011\nThe global economic outlook remains uncertain but there appears to be increasing optimism \nthat the recovery, albeit relatively weak, will be sustained. Most forecasts have been revised \nupwards in recent months but indicate that global growth is expected to be slower in 2011 than \nin 2010. However, the prospects remain uneven across countries and regions, and a number \nof risks remain.\nGrowth in the United States (US) continues to be supported by strong monetary and fiscal \nintervention, while growth in Japan remains subdued. In the euro area, the recovery is being \ndriven by strong growth in Germany but this is expected to moderate in 2011. In the rest of the \neuro area, confidence has declined in the wake of the worsening sovereign debt crisis, which \nremains a major risk to the outlook. Recent co-ordinated measures appear to have stabilised \nthe sovereign debt markets for now, but significant risks remain and a further escalation of the \ncrisis could impact negatively on global growth prospects.\nThe emerging markets continue to outperform the advanced economies, with strong recoveries \nin consumption and investment in the major emerging-market economies.\nInflation developments and prospects also appear to reflect the divergent growth trends. \nPersistent large negative output gaps in the advanced economies have helped to contain \ninflation pressures, despite rising international oil and food prices. There is still some risk of \ndeflation in the US, although this risk is declining. By contrast, inflation in emerging markets \nhas been increasing, partly as a result of stronger demand pressures but also as a result of the \nhigher weights of energy and food in the consumer price baskets. These trends have resulted \nin generally tighter monetary policies in emerging markets, but monetary accommodation is \nexpected to persist in most of the major industrialised countries for some time.\nThe exchange rate of the rand has been relatively volatile since the previous meeting of the MPC, \nwhen it was around R7,00 against the US dollar. By early January the rand had appreciated to \nR6,55, but has since retraced to levels prevailing at the time of the previous meeting. During this \nperiod, non-residents became net sellers of rand-denominated bonds as expectations that there \nwould be further interest rate reductions were reversed, but were net buyers of domestic equities. \nFactors influencing the exchange rate during this period included developments in the euro/\ndollar exchange rate, further acceleration in commodity prices and persistent capital flows to \nemerging markets. \nIn the absence of general risk aversion, or a tightening of the monetary policy stances in the \nadvanced economies, the rand exchange rate is expected to remain relatively strong. Since the \nprevious meeting of the MPC, the nominal effective exchange rate of the rand depreciated by \n0,4 per cent.\nDuring 2010 total direct foreign-exchange reserve accumulation by the Bank and National \nTreasury amounted to US$7,4 billion, or a spend of just over R53 billion. Despite this, the rand \ncontinued to appreciate – 12 per cent against the US dollar during 2010 – and remained strong. \nPortfolio and foreign direct investment inflows continued, and the net purchases of bonds \nand equities by non-residents amounted to R89,5 billion in 2010. The Bank will continue to \naccumulate foreign-exchange reserves as and when possible.\nDomestic GDP growth remains subdued, with growth of 2,6 per cent in the third quarter of \n2010. Although there are mixed signals about the sustainability of the output recovery, high-\nfrequency data indicate a stronger fourth quarter performance, and forecasts for 2011 have \ngenerally been subject to moderate upward revision. The Bank’s forecast was also adjusted \nmarginally and growth is now expected to average 3,4 per cent in 2011. The forecast for 2012 \nis unchanged at 3,6 per cent. The composite leading business cycle indicator of the Bank has \nbeen relatively flat in the past few months and declined moderately in October, reflecting the \nuneven growth prospects. \nGross domestic fixed capital formation is still subdued, having increased by 0,9 per cent in the \nthird quarter of 2010. This rate of investment growth remains too low to impact meaningfully \non output growth, and is currently primarily dependent on state-owned enterprises’ pipeline \nMonetary Policy Review May 2011\n44\ncommitment to infrastructure, while investment in the manufacturing sector is being constrained \nby low levels of capacity utilisation. The labour market appears to have stabilised in the third \nquarter when employment levels were more or less unchanged, although unemployment \nremains stubbornly high at 25,3 per cent.\nThe recovery in the manufacturing sector remains hesitant. Manufacturing output increased \nby 4,6 per cent on a year-on-year basis in November, compared with 2,3 per cent in October. \nProduction of motor vehicles, parts and accessories, in particular, including vehicle exports \nwhich increased by 52,8 per cent quarter-on-quarter in the final quarter of 2010, have exhibited \nrobust growth.\nThe Kagiso Purchasing Managers Index (PMI) confirms the uncertain outlook. Following a strong \nimprovement in the index in November to a level in excess of the neutral level of 50, it declined \nagain in December, although still indicating an expansion of the sector. The mining sector has \nalso been improving and grew at a year-on-year rate of 9,6 per cent in November. The Rand \nMerchant Bank (RMB)/BER Business Confidence Indicator remained relatively unchanged \nthroughout 2010, but with a negative outlook.\nThe recovery in domestic consumption expenditure appears to be sustained. Real final \nconsumption expenditure by households increased at an annualised rate of 5,9 per cent \nin the third quarter of 2010. Strong expenditure growth was observed in all components of \nconsumption. Real retail trade sales increased at a year-on-year rate of 7,8 per cent in November \n2010. New vehicle sales also continued their strong performance, having increased by almost \n30 per cent in December. Consumer confidence as reflected in the First National Bank \n(FNB)/BER Consumer Confidence Index has been at a relatively high level during the past year.\nCredit extension maintained its moderate upward trend during 2010. Total loans and advances \nto the private sector increased by 4,4 per cent in November. Growth over 12 months in mortgage \nadvances has fluctuated around 4,8 per cent since August 2010, reflecting a loss of momentum \nin the real-estate market. House prices increased somewhat in the first half of 2010, but since \nthen the rate of increase has declined, with some house price indexes indicating that prices \nhave been falling.\nGrowth in instalment sale and leasing finance, and other loans and advances maintained a positive \ntrend. Within the latter category, growth in credit card advances was positive for the first time \nsince the end of 2008. Bank overdrafts were the only major category that continued to contract, \nalthough at a slower rate. Household debt remains high at 78,5 per cent of disposable income. \nHowever, lower interest rates have reduced the ratio of debt-service costs to disposable income \nto 7,8 per cent, compared with 12,6 per cent in the third quarter of 2008.\nExpenditure has been positively affected by growth in real disposable income, lower interest \nrates and some favourable wealth effects. Share prices on the JSE Limited have reached levels \nin line with the peaks reached before the onset of the global financial crisis. In 2010 the all-share \nindex increased by 16,1 per cent. \nRisks to the inflation outlook emanating from global commodity price increases have become \nmore evident. These risks relate mainly to oil and food price developments. Having fluctuated in the \nrange of US$70–US$80 per barrel for much of 2010, the price of Brent crude oil began to increase \nin late November and is currently at around US$98 per barrel. The surge in oil prices is due in \npart to stronger global oil demand and the exceptionally cold weather in the northern hemisphere. \nThese price trends were also affected by US dollar developments, particularly following the \nannouncement of additional quantitative easing by the US Federal Reserve in November. \nThe domestic petrol price, which has been cushioned, to some extent, by exchange rate \ndevelopments, has increased by 66 cents per litre since September 2010, and by 11 per cent \nover the past year. \n45\nMonetary Policy Review May 2011\nSince September, the rand exchange rate has offset the petrol price increase by a cumulative \n45 cents per litre. \nGlobal food prices have also continued to increase, driven by tight food supplies, changing \nweather patterns and rising demand in emerging-market economies. To date South Africa has \nbeen shielded, to some degree, from these increases by the exchange rate and the bumper \nmaize crop. Domestic maize prices have been increasing since the middle of 2010, but in \nJanuary 2011 were still about 11 per cent lower than a year ago. By contrast, South Africa is a \nnet importer of wheat, which has increased in price by almost 40 per cent over the past year. \nAlthough producer price developments suggest that domestic food price inflation will remain \nlow in the short term, these global developments, unless reversed, will inevitably impact on \nconsumer food price inflation. \nAdministered prices and wage settlements remain upside risks to the inflation outlook. Although \nwage increases have moderated slightly over the past months, they are still significantly in \nexcess of the current and expected inflation outcomes. According to Statistics South Africa, \nthe year-on-year rate of increase in average nominal remuneration per worker in the formal \nnon-agricultural sector declined from 15,8 per cent in the second quarter of 2010 to 12,6 per \ncent in the third quarter. Once labour productivity developments are accounted for, unit labour \ncost increases amounted to 10,9 per cent and 9,3 per cent in these two quarters respectively. \nAccording to Andrew Levy Employment Publications, the average wage settlement in the first \nnine months of 2010 amounted to 8,3 per cent compared with 9,3 per cent in 2009.\nThe current level of the repurchase rate is at its lowest level in nominal terms in over 30 years, \nwhile the real interest rate is at a level below 1 per cent. This has helped with the recovery \nin consumption expenditure and should also stimulate domestic investment and growth \nby reducing the cost of borrowing. However, low interest rates on their own cannot ensure \nsustainably higher long-run trend growth and employment creation. \nThe MPC has taken note of the improving growth outlook for the economy, and is of the view \nthat the recovery in domestic consumption expenditure will be sustained. While there are \nincreasing risks to the inflation outlook, they emanate primarily from external cost–push factors, \nand inflation is expected to remain within the target range until the end of the forecast period. \nThe MPC has therefore decided to keep the repurchase rate unchanged at 5,5 per cent per \nannum. At this stage there are no signs of incipient excess demand in the economy, and unless \nthere are significant unexpected changes in the global or domestic outlook, the monetary policy \nstance is expected to remain relatively stable for some time. The MPC will continue to monitor \ndevelopments closely and stands ready to act should the need arise.\nMonetary Policy Review May 2011\n46\nStatement of the Monetary Policy Committee\n24 March 2011\nIssued by Gill Marcus, Governor of the South African Reserve Bank, at a meeting of the \nMonetary Policy Committee (MPC) in Pretoria\nThe domestic growth prognosis has improved, and the recovery is expected to be sustained, \nalthough not at rates sufficient to make appreciable inroads into the unemployment situation in \nSouth Africa. Household consumption expenditure has been the main driver of growth, whereas \ngrowth in fixed capital formation has remained weak. At this stage, there are no discernible \ninflationary pressures coming from the demand side of the economy.\nThe global recovery appears to have remained on track, but the unresolved European sovereign \ndebt crisis, rising international oil prices, partly a result of geo-political events, and the tragic \nevents in Japan may moderate the pace of recovery in the near term. Global inflation risks have \nalso increased, particularly in emerging-market economies, a number of which have tightened \ntheir monetary policy stances in recent months. \nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all urban \nareas measured 3,7 per cent in January and February. Food price inflation, while still low, has \nbeen increasing. In February it measured 3,5 per cent and contributed 0,6 percentage points to \nthe overall inflation outcome. On a month-on-month basis, food prices declined by 0,1 per cent. \nHousing and utilities, primarily electricity, contributed 1,5 percentage points to the outcome. \nPetrol prices increased at a year-on-year rate of 12,3 per cent, while administered prices \nexcluding petrol increased by 9,1 per cent. CPI inflation excluding administered prices was \nunchanged at 2,7 per cent, while CPI inflation excluding food and petrol measured 3,4 per cent.\nYear-on-year producer price inflation continued its recent downward trend in January \nwhen it measured 5,5 per cent, compared with 5,8 per cent in December 2010. Food price \npressures remained relatively subdued in January despite marked increases in global food \nprices. Manufactured food and agricultural prices increased by 1,5 per cent and 0,5 per cent \nrespectively. This suggests that food price increases at the consumer price level may be \nmoderated in the near term.\nThe trajectory of the Bank’s CPI forecast has changed somewhat since the MPC’s previous \nmeeting. Nevertheless, inflation is still expected to remain within the target range over the entire \nforecast period. Inflation is now expected to average 4,7 per cent in 2011 and 5,7 per cent in \n2012. This represents an upward adjustment of approximately half a percentage point in 2012. \nInflation is expected to peak at 5,8 per cent in the first quarter of 2012 before declining to \n5,6 per cent in the fourth quarter. The upward adjustment is mainly due to revised assumptions \nregarding the international oil price over the forecast period.\nThe survey conducted by Reuters also reflects a moderate upward adjustment in the inflation \nforecasts. In the February survey the mean forecast of CPI inflation increased by 0,2 percentage \npoints to 4,7 for 2011, and by 0,4 percentage points to 6,0 per cent for 2012. Inflation expectations \nfor 2013 remained more or less unchanged at around 5,7 per cent. Break-even inflation rates \nhave increased to above the 6 per cent level over the longer-term maturities. \nInflation expectations as reflected in the survey conducted by the Bureau for Economic Research \n(BER) at Stellenbosch University in the first quarter of 2011 also indicate a slight deterioration \nin financial analysts’ expectations. However, there was some improvement in the expectations \nof business executives and trade unionists. Inflation is now expected to average 5,3 per cent \nin 2011 and 5,7 per cent in 2012, compared with 5,5 per cent and 6,2 per cent in the previous \nsurvey. Inflation is expected to average 6,0 per cent in 2013. While all categories of respondents \nexpect inflation to remain within the target range in 2011 and 2012, business and trade union \nexpectations average 6,2 per cent in 2013, compared with 5,6 per cent for financial analysts.\nThe global economic recovery, although uneven, is expected to continue, led by a strong \nperformance in global manufacturing. However, significant downside risks remain, due to the \n47\nMonetary Policy Review May 2011\nconfluence of shocks that have the potential to stall the nascent recovery. These shocks include \nhigher international oil prices, driven in part by events in the Middle East and North Africa, and \nthe recent disasters in Japan, which could have a negative impact on the global manufacturing \nsupply chain. The sovereign debt crisis in the euro area remains a concern, with credit default \nswap (CDS) spreads signalling increased risks of sovereign debt defaults. The United States’ \n(US) outlook appears favourable, but the weak housing market and the ability of the economy to \nsustain growth once the fiscal stimuli dissipate during the year are some of the risks that persist. \nGrowth in emerging markets remains robust, but Asian economies in particular may be negatively \nimpacted by the recent developments in Japan. The global growth outlook may also be dependent \non the extent to which the authorities in China manage to slow their economy down.\nThe global inflation outlook has also deteriorated somewhat in the face of higher oil and food \nprices, although in some of the advanced economies there is a marked divergence between \ncore and headline inflation. This reflects the relatively weak underlying demand conditions, \nand the generally accommodative monetary policies in these countries. In the faster-growing \nemerging markets, inflation pressures are more pronounced and monetary policy tightening has \nbecome more widespread.\nThe strong capital inflows to emerging markets that were a feature of most of 2010 have slowed \ndown and in some instances reversed. South Africa has also experienced net sales of bonds \nsince November, and in the year to date, net sales of bonds and equities by non-residents \nhave amounted to R19,2 billion. Despite these net sales and the continued purchase of foreign \nexchange by the Bank, the rand exchange rate has remained firm but volatile. \nThe rand exchange rate has remained relatively unchanged since the previous meeting of the \nMPC, but has fluctuated between R6,80 and R7,33 per US dollar during this period. Part of \nthe recent strength of the rand can be ascribed to US dollar weakness. During this period, the \nUS dollar depreciated by almost 5 per cent against the euro, despite rating downgrades in a \nnumber of euro area countries. Since the previous meeting, the rand has depreciated by over \n3,0 per cent against the euro and by about 1,0 per cent on a trade-weighted basis. \nDomestic growth prospects appear to have improved moderately. Real gross domestic product \n(GDP) grew by 2,8 per cent in 2010, and at an annualised rate of 4,4 per cent in the fourth quarter. \nThe Bank’s forecast has increased somewhat since the previous MPC meeting, with GDP \ngrowth now expected to average 3,7 per cent and 3,9 per cent in 2011 and 2012 respectively. \nThese growth rates, while an improvement, are still too low to have a significant impact on the \nunemployment rate, which measured 24,0 per cent in the fourth quarter of 2010. According to \nStatistics South Africa, formal non-agricultural employment increased by approximately 65 000 \njobs in that quarter. The more favourable growth performance was driven mainly by the mining \nand manufacturing sectors. \nA number of high-frequency indicators suggest that the growth momentum will be sustained. \nThe composite leading business cycle indicator has maintained its positive trend, and the \nKagiso/BER Purchasing Managers Index has remained above the neutral level since November \n2010, suggesting a favourable outlook for the manufacturing sector. The physical volume \nof manufacturing production increased at a moderate year-on-year rate of 1,3 per cent in \nJanuary, but the three-month-on-three-month rate increased by 2,8 per cent. However, output \nlevels are still below those achieved before the crisis and the sector remains characterised \nby underutilised capacity. The utilisation of production capacity increased from 79,2 per cent \nin the third quarter of 2010 to 80,7 per cent in the fourth quarter compared with a pre-crisis \naverage of around 85 per cent. \nOutput in the mining sector has maintained its general upward trend, notwithstanding the 1,9 per \ncent month-on-month decline in January. Reflecting these developments, the Rand Merchant \nBank/BER business confidence index increased significantly in the first quarter of 2011 to reach \na level above neutral for the first time in three years. The building sector was the only sector in \nwhich negative sentiment was recorded. This is consistent with the quarter-on-quarter decline \nin the real value of new building plans passed in the fourth quarter of 2010, and the persistently \nlow level of the First National Bank (FNB) civil construction index.\nMonetary Policy Review May 2011\n48\nDomestic growth prospects will also be dependent on developments in gross fixed capital \nformation, which declined by 3,7 per cent in 2010 and made a negative contribution to GDP in \nthat year. In the fourth quarter of 2010 an annualised increase of 1,5 per cent was recorded. \nCapital expenditure by public corporations increased by 3,3 per cent in the fourth quarter of \n2010, while private-sector investment, which declined by 4,4 per cent over the year, grew at an \nannualised rate of 1,6 per cent in the same quarter. \nThe relatively weak capital expenditure growth contributed to the decline in imports which, \nalong with improved commodity prices, allowed for a marked decline in the deficit on the \ncurrent account of the balance of payments to 0,6 per cent of GDP in the fourth quarter of \n2010. However, should capital expenditure pick up, as envisaged by the public corporations, \nthe current-account deficit is likely to widen. \nReal final consumption expenditure by households increased by 5,1 per cent in the final quarter \nof 2010, indicative of continued positive consumer sentiment and positive disposable income \ngrowth. This category of expenditure made the largest contribution – 2,8 percentage points – to \ngrowth in GDP during the year. There are indications that although consumption expenditure \ngrowth will remain relatively robust, it is unlikely to accelerate to excessive levels in the short term. \nThe FNB/BER consumer confidence index declined in the first quarter of 2011, but still remains \nat a relatively high level. This was consistent with the decline in confidence, albeit from high \nlevels, evident among retailers in the business confidence index, and the retail trade sales \ngrowth in January, which was below market expectations. Expenditure on durable goods, in \nparticular new motor vehicles, has been strong.\nConsumption expenditure is expected to be constrained to some extent by the continued high \nlevels of household indebtedness, which declined marginally to 77,6 per cent of disposable \nincome in the fourth quarter, and the further increase in the number of consumers with impaired \ncredit records since the implementation of the National Credit Act. Banks’ ratio of impaired \nadvances to gross loans and advances has remained relatively unchanged at around 5,8 per \ncent for some time.\nBank credit extension to the private sector has remained subdued. Total loans and advances \nby banks to the private sector have been growing at an annual rate of around 4 per cent since \nSeptember 2010, driven largely by mortgage loans and general loans, mainly to the household \nsector. Growth in mortgage advances, however, declined from 4,8 per cent in November 2010, \nto 3,8 per cent in January 2011, reflecting the subdued state of the property market. \nThe various house price indices all indicate that house prices are either falling or increasing at \nvery low nominal rates. This, combined with the recent decline in equity prices, may contribute \nto a moderation of the impact of wealth effects on consumption.\nThe recent national government budget tabled before parliament indicates a moderately looser \nfiscal policy stance through a slower pace of fiscal deficit reduction compared with that in \nthe October 2010 Medium Term Budget Policy Statement (MTBPS). The fiscal deficit is now \nestimated to decline to 3,8 per cent of GDP by the 2013/14 fiscal year compared with 3,2 per \ncent in the MTBPS. The government debt-to-GDP ratio is expected to peak at 43,1 per cent in \n2013/14, which is much lower than the internationally acceptable norm of around 60 per cent. \nHigh real wage settlements have been a significant upside risk to the inflation outlook. However, \nthere are indications that nominal wage settlement rates may be moderating. According to \nAndrew Levy Employment Publications, the overall average wage settlement rate in collective \nbargaining agreements amounted to 8,2 per cent in 2010, compared with a rate of 9,3 per cent \nin 2009. Similarly, the downward trend in year-on-year growth in unit labour costs continued \ninto the fourth quarter of 2010 when it measured 7,7 per cent, compared with 9,3 per cent in the \nprevious quarter. This positive trend, if continued, may contribute meaningfully to attaining an \nenvironment of low inflation and employment creation.\n49\nMonetary Policy Review May 2011\nThe biggest risks to the inflation outlook remain food and administered prices, in particular oil \nprices. International oil prices had already accelerated in the latter part of 2010 in response to \nstrong global demand and this upward trend has been reinforced by the geopolitical events in \nthe Middle East and North Africa, which have raised concerns about the security of oil supplies. \nShould these political issues be resolved soon, the underlying demand pressures are likely to \nstill keep oil prices at relatively elevated levels. Since the previous MPC meeting, Brent crude oil \nprices have increased by almost US$20 per barrel. Domestic petrol prices have increased by \njust under R1 per litre since January 2011, and a further upward adjustment is expected in April, \nin addition to the increased fuel levy.\nThe MPC is of the view that the risks to the inflation outlook are on the upside. However, these \nrisks and underlying pressures are mainly of a cost–push nature. In the light of the above, the \nMPC has decided to keep the repurchase rate unchanged at 5,5 per cent per annum for the time \nbeing. Given the significant upside risks to the inflation outlook, the MPC will closely monitor any \nindications of second-round effects on inflation emanating from these cost pressures.\nMonetary Policy Review May 2011\n50\nStatement of the Monetary Policy Committee\n12 May 2011\nIssued by Gill Marcus, Governor of the South African Reserve Bank, at a meeting of the \nMonetary Policy Committee (MPC) in Pretoria\nSince the previous meeting of the MPC, the inflation outlook has deteriorated further, mainly \nas a result of external cost–push factors. Underlying demand conditions remain relatively \nrestrained, and are not seen to pose a significant risk to the inflation outlook at this stage. \nHowever, there are elevated risks that these external price shocks could ultimately feed through \nto more generalised inflation.\nThe domestic economic recovery has been sustained, although still at relatively moderate rates, \nand there are no signs of a significant increase in employment. Moreover, the international outlook \nremains uncertain, and the economic recovery has become more hesitant in the past weeks, \nin the wake of renewed concerns about peripheral Europe, the earthquake in Japan and higher \ncommodity prices. \nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all urban areas \nincreased to a higher-than-expected level of 4,1 per cent in March 2011, from 3,7 per cent in \nFebruary. The main contributions to the inflation outcome came from food, housing and utilities, \nand transport which, together, accounted for 2,9 percentage points. Food price inflation increased \nmarkedly to a year-on-year rate of 5,1 per cent from 3,5 per cent in February, while petrol and \nelectricity prices increased at rates of 16,9 per cent and 19,3 per cent respectively. Administered \nprice inflation excluding petrol remained unchanged at 9,1 per cent. Underlying inflation pressures \nremained relatively stable, and in February and March CPI inflation excluding food and petrol \nmeasured 3,4 per cent; the lowest rate since September 2006. \nYear-on-year producer price inflation reversed its recent downward trend and measured 6,7 per \ncent and 7,3 per cent in February and March respectively. Electricity, mining and quarrying, and \nproducts of petroleum and coal were the main contributors to this upward trend. In contrast to \ndevelopments at the CPI level, food price pressures remained relatively subdued in February and \nMarch. Agricultural and manufactured food prices increased by 2,7 per cent and 2,9 per cent \nrespectively in March. \nSince the previous meeting of the MPC, there has been a further upward revision to the Bank’s \nCPI forecast. Inflation is now expected to reach the upper limit of the inflation target range during \nthe final quarter of 2011 and to peak at 6,3 per cent in the first quarter of 2012, before returning \nto within the target range by the second quarter of 2012 and remaining close to the upper limit \nof the range for the rest of that year. Inflation is expected to average 5,1 per cent in 2011 and \n6,0 per cent in 2012, compared with averages of 4,7 per cent and 5,7 per cent forecast at the time \nof the previous meeting. The upward adjustment is mainly due to revised assumptions regarding \nadministered price increases over the forecast period.\nThe survey of market analysts conducted by Reuters also reflects a further upward adjustment \nin the inflation forecasts. In the April survey the mean forecast of CPI inflation measured 5,0 per \ncent for 2011, and 5,8 per cent for 2012; up from 4,8 per cent and 5,7 per cent respectively in the \nMarch survey. Expectations for 2013 were unchanged at 5,7 per cent. The break-even inflation \nrates, as reflected in the yield differential between conventional government bonds and inflation-\nlinked bonds have also exhibited an upward trend. \nThe global economic environment continues to be characterised by uneven recoveries within \nand across regions. Growth prospects in a number of the advanced economies, including the \nUnited States (US), the United Kingdom and some European economies remain uncertain in the \nface of the need for fiscal consolidation and risks posed by higher commodity prices, which have \nthe potential to destabilise inflation and growth. Unemployment has also remained persistently \nhigh in a number of industrialised countries, notably in the US and Spain. Spending in Europe, \nin particular, has been constrained in part by the undercapitalisation of a significant portion of \n51\nMonetary Policy Review May 2011\nthe banking sector. There are heightened concerns about the ability of some of the peripheral \nEuropean countries, particularly Greece, Ireland and Portugal, to meet their debt obligations and \nthis poses a systemic risk to the region. Lower growth in Japan and the disruption to the global \nsupply chain caused by the earthquake and its aftermath are also likely to impact negatively on \nnear-term global growth prospects. \nBy contrast, growth in emerging markets has generally remained strong, with evidence of \noverheating in some countries, particularly in Asia and Latin America.\nGlobal headline inflation has increased, driven primarily by higher food and other commodity prices, \nparticularly oil. In advanced economies core inflation appears to be generally subdued against \nthe backdrop of persistent output gaps. However, in a number of emerging market economies, \nsupply-side pressures have been accompanied by strong aggregate demand pressures and \nabove-trend growth, resulting in a generally tighter monetary policy environment. \nSince the MPC’s previous meeting, the exchange rate of the rand against the US dollar has \nbeen relatively volatile. During this period, the rand fluctuated in a range of R6,95 and \nR6,54 against the US dollar, and on a trade-weighted basis the rand depreciated by 0,9 per \ncent. These developments were affected to a significant extent by the depreciation of the US \ndollar against other currencies, driven in part by the expected continuation of the accommodative \nstance of monetary policy in the US. The relatively strong rand exchange rate persisted despite \ncontinued purchases of foreign exchange by the Bank.\nOther factors underpinning rand strength during this period included strong commodity prices, \nthe narrower current-account deficit and a resumption of portfolio flows to South Africa. Since the \nbeginning of April, non-residents have purchased around R27,1 billion worth of domestic bonds \nand equities, and net purchases year to date stand at R14,5 billion. This marked a reversal of the \nnegative trend in portfolio capital flows experienced by South Africa and some other emerging \nmarkets since the final quarter of 2010.\nDomestic economic growth is lower than that of our emerging-market peers. The Bank’s forecast \nfor economic growth is 3,6 per cent (previously 3,7 per cent) and 3,9 per cent for 2011 and 2012 \nrespectively. The composite leading business cycle indicator of the Bank is suggestive of the \ncontinued recovery in the economy. Manufacturing sector output growth has improved somewhat \nagainst the backdrop of positive business confidence. In March the year-on-year increase in the \nphysical volume of manufacturing output measured 4,6 per cent, compared with 5,7 per cent in \nFebruary. On a three-month on three-month basis, the increase was 4,0 per cent. \nConsistent with this recovery, the Kagiso Purchasing Managers Index has remained above the \nneutral level since November 2010, although the positive trajectory seen in the past few months \nwas reversed marginally in April. Despite these positive developments, the level of output remains \nbelow that attained before the global crisis and the sector remains characterised by underutilised \ncapacity. The utilisation of production capacity measured 79,4 per cent in February 2011, \ncompared with 81,6 per cent in November 2010 and 78,4 per cent in February 2010.\nMining output has been more subdued in the past months. Mining production declined by \n1,4 per cent on a year-on-year basis in March, but when comparing the three months to March \nwith the preceding three months, an increase of 0,4 per cent was recorded. The construction \nsector also remains under pressure, with the real value of building plans passed declining by \n18,2 per cent on a month-to-month basis in February, and by 13,1 per cent on a year-on-year \nbasis. The First National Bank (FNB) Civil Construction Index continued the downward trend that \nhas been evident since 2008.\nThe positive momentum observed in the past few quarters in the growth in household consumption \nexpenditure appears to have been sustained. However, these levels are not giving rise to any \nobvious inflationary pressures and there are tentative signs that this momentum may be levelling \noff. Year-on-year real retail sales growth moderated from 6,3 per cent in January to 5,6 per cent in \nFebruary. On a month-on-month basis, real retail sales declined by 1,0 per cent in February, but \nincreased by 2,2 per cent when comparing the three months to February 2011 with the previous \nthree months. Year-on-year growth in new vehicle sales declined to 8,0 per cent in April, from \nMonetary Policy Review May 2011\n52\n22,8 per cent in March. This slowdown has been ascribed to the high number of public holidays \nin that month and to the impact of the disaster in Japan on the sector. \nGrowth in credit extension to the private sector remains relatively subdued. The twelve-month \ngrowth rate of total loans and advances to the private sector measured 5,3 per cent in March, \nbut annualised growth in the first quarter of 2011 declined to 4,5 per cent, from 5,4 per cent in \nthe previous quarter. Growth was driven mainly by other loans and advances, particularly general \nloans, and by a recovery in instalment sale and leasing finance, reflecting strong motor vehicle \nsales. Twelve-month growth in mortgage advances declined from a recent high of 4,8 per cent \nin November 2010 to 2,9 per cent in March 2011, consistent with the continued weakness in the \nhousing market. \nCredit extended to the corporate sector increased at a year-on-year rate of 2,3 per in March 2011, \ncompared with 1,3 per cent in January, amid tentative indications that banks may have relaxed \ntheir risk premiums somewhat. Demand for credit by the household sector remains constrained \nby high debt levels and the high number of consumers with impaired debt records. The ratio \nof impaired advances to gross loans and advances has remained at around 5,8 per cent since \nDecember 2010, mainly attributable to retail debt. The fact that this ratio has not declined further \nover the past six months is cause for concern.\nAccording to the Quarterly Labour Force Survey published by Statistics South Africa, the \nunemployment rate in the first quarter of 2011 stood at 25,0 per cent, marginally lower than the \n25,2 per cent measured in the first quarter of 2010. Despite the unfavourable employment \nenvironment, wage settlements and unit labour cost increases remain at levels in excess of inflation. \nAccording to Andrew Levy Employment Publications, the overall average wage settlement rate in \ncollective bargaining agreements amounted to 8,2 per cent in the first quarter of 2011. Unit labour \ncosts increased by 7,7 per cent in the fourth quarter of 2010, with labour productivity growth \ndeclining from 3,1 per cent in the third quarter to 2,2 per cent in the fourth quarter.\nThe main risks to the inflation outlook continue to emanate from cost–push pressures, including \nadministered prices. The acceleration in food price inflation is expected to persist for some time, \ndespite indications that global food price inflation may have peaked. \nThe international oil price has also displayed a marked degree of volatility in the past week, when \nprices fell by as much as US$13 in one day. Having risen sharply over recent weeks, the price of oil \nreached a peak of around US$126 per barrel. The price of Brent crude oil today, 12 May, has fallen \nand is about US$3 per barrel lower than that prevailing at the time of the previous MPC meeting. \nWhile international oil prices are not expected to decline further in the near term, it is unclear if \nprices will consolidate at current levels, or if they will continue on their upward path. In the past \ntwo months the domestic petrol price has increased by 8,8 per cent, and by 17,4 per cent since \nthe beginning of the year.\nThe MPC continues to be of the view that the underlying inflation pressures are mainly of a cost–\npush nature. These developments are expected to result in a temporary breach of the upper limit \nof the target band during the first quarter of 2012. It is recognised that these pressures have the \nreal potential to generate second-round effects, which can result in more generalised inflation. \nIn the light of the above, the MPC has decided to keep the repurchase rate unchanged at 5,5 per \ncent per annum, for the time being. Given the upside risks to the inflation outlook, the MPC will \nmonitor closely any indications of second-round effects on inflation emanating from these cost \npressures. The MPC will not hesitate to respond in a timely manner to signs that threaten to move \ninflation out of the target range on a sustained basis. In addition, the MPC will remain vigilant with \nrespect to any inflation risks that could emanate from domestic demand developments. \n53\nMonetary Policy Review May 2011\nAbbreviations\nAlsi\t\nAll-Share Index\nAPI\t\nadministered price index\nBCI\t\nBusiness Confidence Index\nBER\t\nBureau for Economic Research [of Stellenbosch University]\nBIS\t\nBank for International Settlements\nBoE\t\nBank of England\nBoJ\t\nBank of Japan\nBRICS\t Brazil, Russia, India, China and South Africa\nCDS\t\ncredit-default swap\nCopom\t Monetary Policy Committee [Brazil]\nCPI\t\nconsumer price index for all urban areas\nECB\t\nEuropean Central Bank\nEFSF\t\nEuropean Financial Stability Facility\nESM\t\nEuropean Stability Mechanism\nEU\t\t\nEuropean Union\nFNB\t\nFirst National Bank\nFOMC\t\nFederal Open Market Committee\nGDP\t\ngross domestic product\nHICP\t\nharmonised index of consumer prices\nIEA\t\nInternational Energy Agency\nIMF\t\nInternational Monetary Fund\nJSE\t\nJSE Limited\nMENA\t\nMiddle East and North Africa\nMPC\t\nMonetary Policy Committee\nNAB\t\nnon-alcoholic beverage\nNEER\t\nnominal effective exchange rate\nOECD\t\nOrganisation for Economic Co-operation and Development\nOPEC\t\nOrganization of the Petroleum Exporting Countries\nPMI\t\nPurchasing Managers’ Index\nPPI\t\t\nproducer price index\nPSBR\t\npublic-sector borrowing requirement\nREER\t\nreal effective exchange rate\nRMB\t\nRand Merchant Bank\nS&P\t\nStandard & Poor’s\nUK\t\t\nUnited Kingdom\nUS\t\t\nUnited States\nWEO\t\nWorld Economic Outlook\nGlossary\nthe Bank\t South African Reserve Bank\nthe Fed\t\nUnited States Federal Reserve\nrepo\t\nrepurchase\nMonetary Policy Review May 2011\n54", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monetary_Policy_Reports/MPR-May-2011.pdf"}
{"doc_id": "b682605a970c998d3cd1b59c17464765", "text": "i \n \nx \n \nFEBRUARY 2026 \n \ni \nTABLE OF CONTENTS \n \nOVERVIEW .................................................................................................................................. 1 \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ........................................... 1 \nMONETARY DEVELOPMENTS .............................................................................................. 6 \nSTOCK MARKET DEVELOPMENTS ..................................................................................... 7 \nZimbabwe Stock Exchange (ZSE) ........................................................................................... 7 \nVictoria Falls Stock Exchange (VFEX) ................................................................................... 8 \nNATIONAL PAYMENTS SYSTEM .......................................................................................... 9 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ............................................... 9 \nMobile and Internet-Based Transactions .............................................................................. 10 \nCash Transactions ................................................................................................................... 10 \nCard-Based Transactions ....................................................................................................... 10 \nINFLATION OUTTURN ........................................................................................................... 10 \nMonthly Inflation Developments ............................................................................................... 10 \nZiG Monthly Inflation ............................................................................................................ 10 \nUS$ Monthly Inflation ............................................................................................................ 10 \nAnnual Inflation Developments ............................................................................................. 10 \nZiG Annual Inflation Developments ..................................................................................... 10 \nUS$ Annual Inflation Developments ..................................................................................... 11 \nWeighted Annual Inflation ..................................................................................................... 11 \n \n \n \n \n \n \n \n \n \n1 \n \n \nOVERVIEW \nThe ZWG monthly inflation increased to 0.1% \nwhereas \nthe \nyear-on-year \ninflation \nrate \ndeclined to 3.8%, reflecting continued price \nstability. \nBroad money (M3) stock, which consists of \nboth local and foreign currency components, \nstood at ZiG112,264.22 million in February \n2026, because of an increase of 3.07% \n(ZiG3,349.10 million) from ZiG108,915.12 \nmillion recorded in January 2026. \nCapital markets continued a positive trajectory, \nbolstered by improved investor sentiments \npartly due to a stable macroeconomic \nenvironment. \nThe National payment systems transaction \nvalues for February 2026 decreased by 14% \nfrom ZiG206.98 billion in January 2026 to \nZiG178.68 billion. Transactional volumes also \ndecreased by 3% from 75.78 million to 73.78 \nmillion recorded during the same period. \nWhile average prices for most selected \ncommodities declined in February 2026, gold \nand Brent crude oil rose due to stronger \ninvestment demand, heightened geopolitical \ntensions, and supply constraints. \nDuring the month of February 2026, total \nmerchandise trade increased by 7.9% to \nUS$1,972.7 million, from US$1,829.1 million \nrecorded in the previous month, owing to \nhigher exports and imports. \nINTERNATIONAL COMMODITY \nPRICE DEVELOPMENTS \nInternational average prices for some of the \nselected commodities declined in February \n2026, except for gold and Brent crude oil, \nwhich increased amid stronger investment \ndemand, heightened geopolitical tensions, and \nsupply constraints. \nThe developments in prices of selected \ncommodities for the month under review are \nshown in Table 1. \n \nTable 1: Average International Commodity \nPrices for January 2026 and Feb 2026 \nCommodity \n \nJan-26 \n \n \nFeb-26 \nMonthly \nchanges \n(%) \nGold \nUS$/oz \n4,763.07 \n5,045.82 \n5.94 \nPlatinum \nUS$/oz \n2,421.00 \n2,146.08 \n-11.36 \nPalladium \nUS$/oz \n1,844.33 \n1,736.45 \n-5.85 \nCopper \nUS$/t \n13,061.29 \n13,033.45 \n-0.21 \nNickel \nUS$/t \n18,019.10 \n17,375.90 \n-3.57 \nBrent Crude \noil \nUS$/bl \n64.04 \n69.42 \n8.40 \nLithium \nUS$/t \n17,641.90 17,362.00 -1.59 \nSource: Bloomberg, 2026 \n \nGold \nGold prices averaged US$5,045.82 per ounce \nin February 2026, an uptick of 5.94% from \nUS$4,763.07 per ounce recorded in the \nprevious month. The escalation of conflict in \nthe Middle East, particularly tensions involving \nthe U.S./Israel and Iran, heightened uncertainty \nacross global markets. Growing fears of \nbroader regional instability increased the \ndemand for safe-haven assets like gold, thereby \nlifting prices higher. \n \nPlatinum \nPlatinum prices fell by 11.36%, from \nUS$2,421.00 per ounce recorded in January \n2026 to US$2,146.08 per ounce in February \n2026. Concerns about slower industrial activity \n \n \n2 \n \n \nand subdued manufacturing activity signalled \nreduced short-term demand, contributing to \nprice declines. Additionally, ample stocks and \nsteady recycling eased supply tightness, while \nslow vehicle production and the shift to electric \nvehicles (EVs) reduced the demand for the \nmetal. \n \nPalladium \nIn February 2026, palladium prices declined by \n5.85% to US$1,736.45 per ounce, from \nUS$1,844.33 per ounce recorded in the prior \nmonth. Prices were adversely affected by \nprospects of a strengthening U.S. dollar and \ntighter monetary conditions, which dampened \ninvestor appetite for the metal and increased the \nopportunity cost of holding it. Markets also \nreassessed demand prospects, particularly from \nthe automotive sector, where palladium is \nmainly \nused \nin \ncatalytic \nconverters. \nExpectations for lower industrial consumption \nreduced demand and weighed on prices. \n \nThe price movements for selected precious \nmetals for the period from February 2025 to \nFebruary 2026 are shown in Figure 1. \n \nFigure 1: Monthly Precious Metal Prices \n(US$ per Ounce): February 2025 – February \n2026 \n \nSource: Bloomberg, 2026 \n \nBrent Crude Oil \nBrent crude oil prices rose by 8.40%, to an \naverage of US$69.42 per barrel in February \n2026, from US$64.04 per barrel recorded in the \npreceding month. The increase was driven by \nmounting concerns over potential U.S. military \naction against Iran, which heightened fears of \nsupply disruptions in the Middle East and \nadded a geopolitical risk premium to oil prices. \nFurthermore, signs of resilient global economic \nactivity and expectations of steady fuel \ndemand, particularly from major consuming \neconomies, supported optimism about oil \nconsumption, driving prices higher \n \nFigure \n2: \nBrent \nCrude \nOil \nPrices \n(US$/Barrel) February 2025 –February \n2026 \n \nSource: Bloomberg, 2026 \n \nCopper \nCopper prices averaged US$13,033.45 per \ntonne in February 2026, a 0.21% decrease from \nthe US$13,061.29 per tonne recorded in \nJanuary 2026. Prices were weighed down by a \nweak demand outlook in China, the world’s top \nmetal consumer, amid uncertainty over \nindustrial activity and property sector recovery. \n2,000\n2,500\n3,000\n3,500\n4,000\n4,500\n5,000\n5,500\n800\n1,000\n1,200\n1,400\n1,600\n1,800\n2,000\n2,200\n2,400\n2,600\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nFeb-26\nUS$/ounce\nUS$/ounce\nPlatinum\nPalladium\nGold (RHS)\n55\n60\n65\n70\n75\n80\n85\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nFeb-26\n \n \n3 \n \n \nNickel \nDuring the month under review, nickel prices \nretreated by 3.57%, from US$18,019.10 per \ntonne recorded in the prior month to \nUS$17,362.00 per tonne. Concerns that \nIndonesia, the world’s largest nickel producer, \nmight not tighten or clearly define its 2026 \noutput quotas increased expectations of \ncontinued strong supply, which encouraged \nselling pressure and lowered prices. Figure 3 \nshows the base metal price movements for the \nperiod from February 2025 to February 2026. \n \nThe base metal price movements from \nFebruary 2025 to February 2026 are shown in \nFigure 3. \n \nFigure 2: Base Metal Prices (US$/tonne): \nJanuary 2025 to February 2026 \n \nSource: Bloomberg 2026 \n \nLithium \nLithium \nprices \nfell \nby \n1.59%, \nfrom \nUS$17,641.90 per tonne recorded in January \n2026 to US$17,362.00 per tonne in February \n2026. The decrease stemmed from cautious \nmarket expectations surrounding the growth in \ndemand for electric vehicles and batteries, \nincluding early year consumption slowdowns \nand reduced buyer interest. Rapid capacity \nexpansion by lithium producers and battery \nmanufacturers contributed to a supply–demand \nimbalance, \nwhile \nlarge \ninventories \nand \nincreased competition among suppliers exerted \ndownward pressure on prices. The changes in \nlithium prices for the period from February \n2025 to February 2026 are depicted in Figure 4. \n \nFigure 3: Lithium Prices (US$/tonne) \nFebruary 2025 to February 2026 \n \nSource: London Metal Exchange, 2026 \n \nMerchandise Trade Developments \nDuring the month of February 2026, total \nmerchandise trade increased by 7.9% to \nUS$1,972.7 million, from US$1,829.1 million \nrecorded in the previous month, owing to \nhigher exports and imports. On a year-on-year \nbasis, total merchandise trade significantly rose \nby 60.8%, from US$1,227.1 million recorded \nin February 2025. \n \nMerchandise Exports \nThe country’s merchandise exports stood at \nUS$1,009.6 million in February 2026, a 4.1% \nincrease from US$969.5 million recorded in \nJanuary 2026. The month-on-month growth \n8,000\n13,000\n18,000\n23,000\n28,000\n33,000\n38,000\n4,500\n5,500\n6,500\n7,500\n8,500\n9,500\n10,500\n11,500\n12,500\n13,500\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nFeb-26\nUS$/tonne\nUS$/tonne\nCopper\nNickel (RHS)\n7,000\n8,500\n10,000\n11,500\n13,000\n14,500\n16,000\n17,500\n19,000\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nFeb-26\n \n \n4 \n \n \nwas largely driven by higher earnings from \ntobacco and other minerals. In contrast, PGMs \nand gold exports declined by 32.7% and 6.4%, \nrespectively. On an annual basis, exports \nincreased by 96.5%, from US$513.7 million \nrecorded in the corresponding month of 2025. \nFigure 5 \nillustrates \ndevelopments \nin \nmerchandise exports for the period 2025–2026. \n \nFigure 4: Monthly Merchandise Exports \n(US$ millions): 2025 and 2026 \n \nSource: ZIMSTAT, 2026 \n \nExports by Commodity \nThe \ncountry’s \nexport \nbasket \nremained \ndominated by primary commodities, with gold \ncontributing 45.7%, followed by tobacco at \n28.4%, other minerals at 9.0%, and PGMs at \n7.0%. Table 2 provides export developments \nfor January and February 2026. \n \n \n \n \n \n \n \n \n \n \n \n \nTable 2: Major Exports (US$ millions) \n \nJan -25 \n(US$m) \nFeb -26 \n(US$m) \nJan 25 - Feb 26 \nChanges (%) \nShare \nof Feb \nExports \n(%) \nTotal \n969.5 \n 1,009.6 \n4.1 \n100.0 \nOf Which: \n \n \n \n \nGold \n493.0 \n461.4 \n-6.4 \n45.7 \nTobacco \n(Including \ncigarettes) \n245.1 \n291.4 \n18.9 \n28.4 \nPGMs \n104.4 \n70.2 \n-32.7 \n7.0 \nOther mineral \nsubstances \n26.9 \n90.7 \n236.8 \n9.0 \nCoal \n18.5 \n17.2 \n-6.8 \n1.7 \nSteel \n14.3 \n15.7 \n9.8 \n1.5 \nFerrochromium \n13.3 \n21.3 \n60.9 \n2.1 \nOther ores and \nconcentrates \n13.9 \n15.5 \n12.1 \n1.5 \nChromium ores \nand \nconcentrates \n7.0 \n6.2 \n-11.8 \n0.6 \nElectrical \nenergy \n2.6 \n2.4 \n-6.6 \n0.2 \nOthers \n30.6 \n17.4 \n-23.5 \n2.3 \nSource: ZIMSTAT & RBZ Calculations, 2026 \n \nExport Market \nIn February 2026, exports were primarily \ndestined for the United Arab Emirates (46.4%), \nChina (34.3%), and South Africa (9.7%), with \nthe remaining share distributed across other \ninternational markets. Figure 6 shows the \ncountry’s major export destinations for the \nmonth under review. \n0\n200\n400\n600\n800\n1000\n1200\nJan\nFeb\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nOct\nNov\nDec\n2025\n2026\n \n \n5 \n \n \nFigure 5: Top Ten Merchandise Exports \nDestinations (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2026 \n \nMerchandise Imports \nMerchandise imports increased by 12.0% to \nUS$963.1 million in February 2026, from \nUS$859.6 million recorded in January 2026. \nOn an annual basis, imports increased by \n35.0%, from US$713.4 million recorded in \nFebruary 2025. Monthly import developments \nfor 2025 and 2026 are as shown in Figure 7. \n \nFigure \n7 \nshows \nthe \nmonthly \nimport \ndevelopments for 2025 and 2026. \n \nFigure 6: Monthly Merchandise Imports \n(US$ millions): 2025 and 2026 \n \nSource: ZIMSTAT & RBZ Computations, 2026 \n \nImports by Commodity \nIndustrial supplies continued to dominate the \ncountry’s import bill, accounting for 35.6% of \ntotal imports. This was followed by capital \ngoods at 23.9%, and fuel and lubricants at \n18.3%. Table 3 presents import developments \nby Broad Economic Category (BEC) for \nJanuary and February 2026. \n \nThe imports of major commodities by Broad \nEconomic Category (BEC) for January and \nFebruary 2026 are shown in Table 3. \n \nTable 3: Major Imports (US$ millions) \n \nJan –25 \n (US$m) \nFeb - \n26 \n(US$\nm) \nJan 25 – \nJan 26 \nChanges \n(%) \nShare of \nTotal \nImports (%) \nFeb-26 \nTotal \n859.6 \n963.1 \n12.0 \n100.0 \nOf Which: \n \n \n \n \nIndustrial \nsupplies \n295.3 \n342.9 \n16.1 \n35.6 \nFuels and \nlubricants \n198.5 \n230.7 \n16.2 \n23.9 \nCapital \ngoods \n188.5 \n176.2 \n-6.5 \n18.3 \nFood and \nbeverages \n55.3 \n82.2 \n48.8 \n8.5 \nTransport \nequipment \nand parts \n74.5 \n80.8 \n8.5 \n8.4 \nConsumer \ngoods \n47.4 \n50.3 \n6.1 \n5.3 \nOthers \n0.1 \n0.0 \n-92.1 \n0.0 \nSource: ZIMSTAT & RBZ Calculations, 2026 \n \nImport Markets \nDuring the month under analysis, the country’s \nimports were mainly sourced from South \nAfrica (35.2%), China (22.4%), Bahrain \n(8.7%), and the Bahamas (3.8%), with the \n46.4\n34.3\n9.7\n1.7\n1.4\n1.0\n0.7\n0.5\n0.3\n0.3\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\nUnited Arab Emirates\nChina\nSouth Africa\nIndonesia\nZambia\nMozambique\nBelgium\nBotswana\nIndia\nVietnam\n0.0\n200.0\n400.0\n600.0\n800.0\n1000.0\n1200.0\n2025\n2026\n \n \n6 \n \n \nremainder originating from diverse global \nmarkets, as shown in Figure 8. \n \nFigure 7: Top Ten Merchandise Imports \nDestinations (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2026 \n \nMerchandise Trade Balance \nDuring the month under review, the country’s \ntrade surplus narrowed to US$46.4 million, \nfrom US$109.9 million recorded in January \n2026. The merchandise trade balance improved \nmarkedly on an annual basis, moving from a \ndeficit of US$199.7 million in February 2025 \nto a surplus of US$46.4 million in February \n2026. \nFigure 9 \nillustrates \nthe \ntrade \nbalance \ndevelopments for the period from December \n2025 to February 2026. \n \n1 Monetary data was revised from September 2024 \nfollowing the adoption of new reporting return submitted \nby banks. The notable revision is on broad money stock \nFigure 8: Merchandise Trade Balance (US$ \nmillions) \n \nSource: ZIMSTAT & RBZ Computations, 2026 \nMONETARY DEVELOPMENTS1 \nBroad money (M3) stock, which consists of \nboth local and foreign currency components, \nstood at ZiG112,264.22 million in February \n2026, an increase of 3.07% (ZiG3,349.10 \nmillion) from ZiG108,915.12 million recorded \nin January 2026. \nThe increase in broad money largely reflected \na month-on-month growth of ZiG2,438.46 \nmillion (2.74%) in the foreign currency \ncomponent \nfrom \nZiG89,060.04 \nmillion \nrecorded in December 2025 to ZiG91,498.50 \nmillion. Over the same period, the local \ncurrency \ncomponent \nalso \nincreased \nby \nZiG910.65 \nmillion \n(4.59%), \nfrom \nZiG19,855.08 million to ZiG20,765.72 million. \nThe M3 stock was largely dominated by foreign \ncurrency deposits, which accounted for 81.50% \nof the total money supply, followed by local \n(M3) \nwhich \nwas \nrevised \ndownwards \ndue \nto \nreclassification of Government foreign currency deposits \nheld by banks from deposits included in broad money. \n35.2\n22.4\n8.7\n3.8\n3.5\n3.4\n3.0\n2.9\n2.2\n1.9\nSouth Africa\nChina\nBahrain\nBahamas\nHong Kong\nUnited…\nMozambique\nZambia\nUnited States\nMauritius\n1,141.73 \n969.47 \n1,009.57 \n901.50 \n859.60 \n963.13 \n240.2\n109.9\n46.4\n0\n200\n400\n600\n800\n1,000\n1,200\nDec-25\nJan-26\nFeb-26\nExports\nImports\nTrade Balance\n \n \n7 \n \n \ncurrency deposits, at 17.56%, and local \ncurrency in circulation, 0.13%. \nFigure 10 shows the composition of the money \nsupply. \nFigure 9: Composition of Money Supply\nSource: Reserve Bank of Zimbabwe, 2026 \nDuring the month under analysis, the banking \nsector's net credit to the Government decreased \nby 3.36% to ZiG64,620.63 million. Credit to \nthe Government is largely in the form of long-\nterm treasury bills held by banks. Credit to the \nprivate sector increased from ZiG68,321.79 \nmillion to ZiG70,294.59 million. \nOutstanding credit to the private sector was \nmainly channeled to households, agriculture, \nmanufacturing \nand \ndistribution, \nwhich \ncollectively received about 26.91%, 17.34%, \n13.68%, and 12.52% of the total credit, \nrespectively. The mining sector received about \n7.04% of the total outstanding credit. \n \nFigure 11 shows the distribution of credit by \nsector. \n \n \n \nFigure 10: Distribution of Private Sector \nCredit \n \nSource: Reserve Bank of Zimbabwe, 2026 \n \nCredit to the private sector was largely utilized \nfor recurrent expenditure (35.55%), inventory \nbuild-up \n(20.94%), \nand \nfixed \ncapital \ninvestments (18.39%). \n \nSTOCK MARKET DEVELOPMENTS \nZimbabwe Stock Exchange (ZSE) \nDuring the month of February 2026, trading \ncontinued a positive trajectory, bolstered by \nimproved investor sentiments, partly due to a \nstable macroeconomic environment. As a \nresult, the Zimbabwe Stock Exchange (ZSE) \nAll Share, Top 10, Top 15 and Medium Cap \nindices registered growths of 0.86%, 0.15%, \n0.54% and 7.59% to close February 2026 at \n359.11 points, 367.23 points, 381.71 points and \n350.51 points respectively. The Small Cap \nindex, however, remained unchanged at \nJanuary 2026 level. \n \nIn line with the developments on the local \nbourse during the period under analysis, the \nmarket gained 1.13%, or ZiG1 248.86 million \nworth of capitalisation to ZiG111 894.24 \nNCDs; \n0.81%\nLocal Currency Time \nDeposits; 1.96%\nFX Time Deposits; \n12.64%\nLocal Currency \nTransferable ; \n15.60%\nFX Transferable \nDeposits; 68.86%\nCurrency in \nCirculation; \n0.13%\nHouseholds\n26.91%\nAgriculture\n17.34%\nMining\n7.04%\nManufacturing\n13.68%\nDistribution\n12.52%\nTransport and \nCommunication\n4.09%\nServices\n10.41%\nFinancial Organisations \nand Investments\n4.83%\nConstruction\n3.17%\nOther\n0.01%\n \n \n8 \n \n \nmillion compared to ZiG110 645.38 million \nrecorded in the previous month. Similarly, on \nan annual basis, market capitalisation gained \n80.30%, compared to ZiG62 060.95 million \nrecorded in the same month in 2025. \n \nThe resource index remained gained 4.11% to \nclose at 122.53 points. Annually, however, the \nmining index lost 36.70%, from 193.56 points \nrecorded in the comparable period last year. \n \nFigure 11: ZSE All Share, Top 10 and \nMining Indices \n \n Source: Zimbabwe Stock Exchange, 2026 \n \nDuring the month under analysis, trading \nactivity was concentrated on some wealth-\npreserving counters albeit on lower volumes. \nConsequently, the cumulative value of shares \nincreased by 111.36% to ZiG1 932.17 million \nwhile the volume of shares traded declined by \n81.14% to 185.28 million shares. This is \ncompared to ZiG914.18 million and 982.36 \nmillion shares recorded in the previous month, \nrespectively. \n \nIn addition, the increase in turnover value of \nshares traded was largely informed by notable \ntrade deals where combined total of 113.57 \nmillion shares in Econet Wireless Zimbabwe \nLimited exchanged hands at average price of \nZiG906.15 cents per share and an additional \ntrade \ndeal \nwhere \n10.95 \nmillion \nDelta \nCorporation Limited shares exchanged hands at \nZiG2 949.95 cents per share. \n \nThe proportion of foreign purchases to the \nvalue of shares traded declined significantly in \nFebruary \n2026, \nwith \nforeign \npurchases \naccounting for none of the total value of shares \ntraded. On the other hand, the cumulative net \nforeign position, remained unchanged in \nFebruary 2026. \n \nVictoria Falls Stock Exchange (VFEX) \nThe Victoria Falls Stock Exchange (VFEX) \ntraded positively for the second consecutive \nmonth, adding 6.01% to close at 224.06 points. \nThis is compared to 211.36 points recorded in \nprevious month, as shown in Figure 13. \n \nFigure 12: Victoria Falls Stock Exchange \n(VFEX) All Share Index (ASI): February \n2025- February 2026 \n \nSource: Victoria Falls Stock Exchange, 2026 \n \n \n100\n150\n200\n250\n300\n350\n90\n140\n190\n240\n290\n340\n390\n28-Feb-25\n31-Mar-25\n30-Apr-25\n31-May-25\n30-Jun-25\n31-Jul-25\n31-Aug-25\n30-Sep-25\n31-Oct-25\n30-Nov-25\n31-Dec-25\n31-Jan-26\n28-Feb-26\nALL SHARE AND TOP 10 INDICES\nZSE ALL SHARE INDEX\nTop 10 Index\nMining Index (Points)\n90\n110\n130\n150\n170\n190\n210\n230\n28-Feb-25\n31-Mar-25\n30-Apr-25\n31-May-25\n30-Jun-25\n31-Jul-25\n31-Aug-25\n30-Sep-25\n31-Oct-25\n30-Nov-25\n31-Dec-25\n31-Jan-26\n28-Feb-26\n \n \n9 \n \n \nVFEX Market Capitalization \nOwing to the positive developments on the \nVFEX market in February 2026, the market \ngained 6.61%, or US$164.78 million worth of \ncapitalisation to close at US$2 657.12 million. \nThis is in comparison to US$2 492.34 million \nrecorded in the previous month. Annually, the \nVFEX capitalisation gained 123.21%, from \nUS$1 \n190.43 \nmillion \nrecorded \nin \nthe \ncomparable period in 2025. \n \nFigure 13: Victoria Falls Stock Exchange \n(VFEX) \nMarket \nCapitalisation \n(US$ \nbillions) \nSource: Zimbabwe Stock Exchange, 2026 \nNATIONAL PAYMENTS SYSTEM \nThe total digital payment systems transaction \nvalues for February 2026 decreased by 14% \nfrom ZiG206.98 billion in January 2026 to \nZiG178.68 billion. Transactional volumes also \ndecreased by 3% from 75.78 million to 73.78 \nmillion recorded during the same period, \nas shown in Figure 15. \n \n \n \n \n \nFigure 14: Payment Systems Monthly \nTransactional Values and Volumes from \nMarch 2025 – February2026 \n \nSource: Reserve Bank of Zimbabwe, 2026 \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \nThe combined value of ZiG and USD \ntransactions processed through the RTGS \nsystem in February 2026 decreased by 18% \nfrom ZiG140.13 billion recorded in January \n2025 \nto \nZiG114.52 \nbillion. \nHowever, \ntransactional volumes increased by 4% from \n0.81 million to 0.85 million during the same \nperiod under review. \n \nFigure 15: RTGS System Trend for Values \nand Volumes from March 2025 – February \n2026 \n \nSource: Reserve Bank of Zimbabwe, 2026 \n0\n0.5\n1\n1.5\n2\n2.5\n3\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nFeb-26\nUS$ BILLIONS\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n0\n50\n100\n150\n200\n250\n300\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nFeb-26\nVolumes (Millions)\nValues (Billions)\nValues\nVolumes\n 0.7\n 0.8\n 0.8\n 0.9\n 0.9\n 1.0\n 1.0\n 1.1\n0\n20\n40\n60\n80\n100\n120\n140\n160\n180\nMar-\n25\nApr-\n25\nMay-\n25\nJun-\n25\nJul-\n25\nAug-\n25\nSep-\n25\nOct-\n25\nNov-\n25\nDec-\n25\nJan-\n26\nFeb-\n26\nVolumes in Millions\nValues in $ Billions\nValues\nVolume\n \n \n10 \n \n \nMobile and Internet-Based Transactions \nMobile \nand \ninternet-based \ntransactions \ndecreased by 0.2% from ZiG50.36 billion in \nJanuary 2026 to ZiG50.26 billion in February \n2026. \n \nCash Transactions \nCash-based transactions decreased by 11.8% \nfrom ZiG14.74 billion in January 2026 to \nZiG13 billion in February 2026. \n \nCard-Based Transactions \nCard-based transactions decreased by 14.84% \nfrom ZiG16.33 billion in January 2026 to \nZiG13.90 billion in February 2026. \nINFLATION OUTTURN \nMonthly Inflation Developments \nZiG Monthly Inflation \nThe ZWG monthly inflation rate for February \n2026 increased to 0.1% from 0.0% recorded in \nJanuary 2026. Food inflation contributed -0.04 \npercentage points to the February 2026 \ninflation rate, while the non-food component \naccounted for 0.18 percentage points. The year-\non-year ZWG inflation rate decreased to 3.8% \nin February 2026 shedding 0.3 percentage \npoints from 4.1% in January 2026. \n \nFigure 17 shows developments in monthly ZiG \ninflation from August 2024 to February 2026. \n \nFigure 16: ZiG Month-on-Month Inflation \n \nSource: ZIMSTAT, 2026 \n \nUS$ Monthly Inflation \nThe monthly USD inflation rate slowed down \nby 0.13 percentage points from 0.24% in \nJanuary 2026 to 0.11% in February 2026, \ndriven by both food and non-food inflation. \nFood inflation declined to -0.04%, contributing \n-0.01 percentage points, largely driven by \nfruits, sugar, bread and cereals categories. \nNon-food inflation also eased to 0.18% from \n0.22% in January 2026, contributing 0.12%, \npartially attributable to declines in beer, \nequipment sport and clothing materials \n \nAnnual Inflation Developments \nZiG Annual Inflation Developments \nThe year-on-year ZWG inflation rate decreased \nfrom 4.11% in January 2026 to 3.78% in \nFebruary 2026. The decline in annual inflation \nwas driven by food inflation which contributed \n1.08 percentage points to the February 2026 \ninflation rate. Housing, water and energy; \ntransport; and education had the largest \ncontributions to the overall inflation. ZWG \nannual non-food inflation accounted for 2.89 \npercentage points to annual ZWG inflation, \n-5\n0\n5\n10\n15\n20\n25\n30\n35\n40\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nJun-25\nAug-25\nOct-25\nDec-25\nFeb-26\n \n \n11 \n \n \ndriven by university fees, water supply, \ngarments and beer \n \nUS$ Annual Inflation Developments \nThe annual USD inflation rate moderated to \n0.90% in February 2026 from 1.04% in January \n2026. USD year-on-year inflation was driven \nby food inflation, which stood at -1.10% from -\n0.82% in January 2026 and accounted for -0.36 \npercentage points to the monthly inflation rate. \nNon-food inflation also declined to 1.89% in \nFebruary 2026 from 1.96% in the previous \nmonth, partially driven by housing, water and \nenergy; education and alcoholic beverages \ncategories contributing 1.02 percentage points. \n \nFigure \n17: \nUS$ \nAnnual \nInflation \nDevelopments (%) \n \nSource: ZIMSTAT, 2026 \n \nWeighted Annual Inflation \nThe weighted annual inflation rate decreased \nfrom 1.8% in January 2026, to 1.6% in \nFebruary 2026, driven by the disinflationary \ntrend exhibited by both the ZWG and USD \ncomponents \n \nAPRIL 2026 \n \nRESERVE BANK OF ZIMBABWE \n-4\n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\n \n \n12 \n \nTABLE 1: DEPOSITORY CORPORATIONS SURVEY ($ 'Million)\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nFeb-26\nNet Foreign Assets\n-47 798,94\n-50 807,43\n-51 172,57\n-46 837,66\n-45 196,99\n-41 019,76\n-38 625,91\n-33 611,01\n-30 064,40\n-22 049,75\n-18 406,06\n-17 586,58\n-14 548,26\n-6 933,82\n-3 374,22\nCentral Bank(net)\n-56 911,91\n-58 197,29\n-60 030,71\n-55 922,58\n-54 500,64\n-52 202,84\n-49 684,95\n-42 774,35\n-40 706,85\n-34 704,28\n-32 323,30\n-28 816,68\n-24 439,67\n-22 133,69\n-19 208,50\nForeign Assets\n23 239,75\n23 967,01\n23 087,88\n28 287,08\n26 132,24\n27 358,92\n29 447,51\n29 654,21\n31 965,94\n33 301,02\n34 640,02\n37 553,95\n40 898,97\n42 141,52\n45 567,91\nForeign Liabilities\n80 151,65\n82 164,30\n83 118,59\n84 209,66\n80 632,89\n79 561,77\n79 132,46\n72 428,56\n72 672,79\n68 005,30\n66 963,32\n66 370,63\n65 338,63\n64 275,20\n64 776,41\nOther Depository Corporations(net)\n9 112,97\n7 389,86\n8 858,14\n9 084,92\n9 303,65\n11 183,09\n11 059,03\n9 163,35\n10 642,45\n12 654,54\n13 917,24\n11 230,10\n9 891,40\n15 199,87\n15 834,28\nForeign Assets\n20 113,36\n20 280,52\n21 464,25\n22 405,99\n22 719,00\n26 321,77\n25 204,45\n24 310,89\n25 812,72\n29 009,96\n27 770,37\n27 309,59\n27 538,14\n31 883,45\n30 487,17\nForeign Liabilities\n11 000,39\n12 890,67\n12 606,10\n13 321,07\n13 415,35\n15 138,68\n14 145,42\n15 147,54\n15 170,26\n16 355,43\n13 853,12\n16 079,48\n17 646,74\n16 683,59\n14 652,89\nNet Domestic Assets (NDA)\n126 708,20\n129 264,59\n129 550,42\n130 649,37\n132 200,16\n134 193,72\n135 962,44\n129 795,73\n129 266,66\n121 573,48\n123 859,89\n123 149,23\n122 636,97\n115 848,94\n115 638,44\nDomestic Claims\n102 289,84\n105 286,02\n108 409,03\n111 778,89\n112 052,78\n113 871,47\n138 731,90\n141 931,97\n142 929,76\n141 471,80\n147 793,66\n149 262,14\n149 563,05 142 628,23 142 982,50\nClaims on Central Government(net)\n46 205,77\n47 595,38\n49 726,71\n51 733,21\n47 997,90\n46 958,43\n69 884,83\n72 147,58\n72 348,97\n68 978,08\n72 926,01\n72 812,05\n73 211,34\n66 867,66\n64 620,63\nClaims on Central Government\n64 251,23\n65 079,23\n61 840,40\n64 347,80\n65 169,78\n65 057,66\n91 587,16\n90 919,46\n91 187,71\n91 019,04\n90 224,26\n90 273,39\n90 173,72\n90 744,08\n90 349,68\nCentral Bank*\n50 322,20\n51 342,65\n48 573,05\n50 689,52\n51 472,22\n51 174,38\n76 067,26\n74 803,65\n75 383,07\n76 062,37\n74 705,69\n74 601,71\n73 132,44\n74 184,82\n74 334,25\nODCs\n13 929,03\n13 736,58\n13 267,36\n13 658,28\n13 697,56\n13 883,28\n15 519,89\n16 115,81\n15 804,64\n14 956,67\n15 518,58\n15 671,68\n17 041,29\n16 559,26\n16 015,43\nLess Liabilities to Central Government\n18 045,45\n17 483,86\n12 113,70\n12 614,59\n17 171,88\n18 099,24\n21 702,33\n18 771,88\n18 838,73\n22 040,97\n17 298,25\n17 461,34\n16 962,39\n23 876,42\n25 729,05\nCentral Bank\n9 591,57\n9 335,10\n4 557,22\n4 850,15\n6 177,70\n6 126,98\n7 614,72\n6 463,06\n6 466,66\n6 740,49\n2 537,97\n3 967,12\n3 526,59\n9 671,83\n11 372,02\nOf which foreign Currency\n9 291,47\n8 231,67\n3 875,54\n4 410,31\n5 787,19\n5 549,44\n6 666,06\n5 497,47\n6 010,56\n5 667,77\n1 932,08\n2 952,36\n2 416,03\n7 773,12\n8 568,67\nODCs\n8 453,89\n8 148,76\n7 556,48\n7 764,44\n10 994,18\n11 972,25\n14 087,61\n12 308,82\n12 372,07\n15 300,48\n14 760,29\n13 494,22\n13 435,79\n14 204,59\n14 357,03\nOf which foreign currency\n7 777,48\n7 621,82\n6 689,63\n6 183,93\n9 392,25\n10 536,89\n12 630,29\n10 600,01\n10 915,21\n13 550,72\n12 693,10\n12 308,34\n11 917,20\n12 439,53\n13 229,38\nClaims on Other Sectors\n56 084,07\n57 690,64\n58 682,32\n60 045,68\n64 054,88\n66 913,05\n68 847,07\n69 784,39\n70 580,79\n72 493,73\n74 867,65\n76 450,10\n76 351,72\n75 760,57\n78 361,88\nOther Financial Corporations\n3 822,61\n3 517,16\n3 631,08\n3 864,50\n4 731,25\n4 292,05\n4 221,20\n4 445,02\n4 526,08\n5 392,29\n5 193,56\n5 688,93\n5 259,08\n5 393,96\n5 903,52\nState and Local Government\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n22,04\n21,46\n18,84\n23,48\n23,74\n20,77\n23,29\n23,76\nPublic Non Financial Corporations\n563,61\n569,85\n971,29\n911,74\n898,25\n797,32\n785,71\n781,57\n686,95\n659,67\n949,80\n1 011,05\n1 106,64\n2 021,53\n2 140,01\nPrivate Sector\n51 697,85\n53 603,63\n54 079,94\n55 269,44\n58 425,38\n61 823,68\n63 840,16\n64 535,76\n65 346,30\n66 422,93\n68 700,81\n69 726,38\n69 965,23\n68 321,79\n70 294,59\nCentral Bank\n403,34\n519,44\n538,88\n545,44\n577,07\n599,76\n629,79\n639,95\n641,30\n684,19\n693,21\n682,98\n694,60\n704,02\n705,15\nODCs\n51 294,51\n53 084,19\n53 541,07\n54 724,00\n57 848,31\n61 223,93\n63 210,38\n63 895,82\n64 705,01\n65 738,73\n68 007,60\n69 043,39\n69 270,63\n67 617,77\n69 589,44\nOf which Foreigm currency\n42 937,33\n46 086,81\n46 197,56\n47 961,06\n50 400,88\n52 686,20\n54 648,96\n54 746,71\n54 919,36\n56 222,03\n58 272,26\n59 687,69\n59 670,51\n58 499,01\n60 315,26\nOther Items(Net)\n-24 418,36\n-23 978,57\n-21 141,39\n-18 870,48\n-20 147,38\n-20 322,25\n2 769,46\n12 136,24\n13 663,10\n19 898,32\n23 933,76\n26 112,91\n26 926,09\n26 779,28\n27 344,06\nShares and Other Equity\n-1 120,14\n-2 759,36\n659,23\n2 615,68\n7 692,89\n9 526,48\n36 601,05\n44 078,48\n45 051,26\n49 520,79\n52 157,88\n51 997,94\n55 092,57\n54 056,45\n56 083,22\nLiabilities to Other Financial Corporations\n386,06\n75,39\n267,30\n87,13\n63,50\n136,38\n194,89\n205,30\n261,51\n72,01\n202,85\n313,89\n340,43\n350,42\n388,67\nRestricted Deposits\n4 320,76\n4 381,22\n6 468,48\n6 947,34\n7 610,34\n7 729,11\n8 006,08\n8 840,96\n9 172,63\n9 184,86\n4 200,25\n4 202,91\n2 207,01\n2 151,26\n2 165,17\nDeposits and Securities Excluded from Base Money\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\nOther Items(net)\n-28 005,04\n-25 675,83\n-28 536,40\n-28 520,63\n-35 514,12\n-37 714,21\n-42 032,57\n-40 988,50\n-40 822,30\n-38 879,35\n-32 627,21\n-30 401,83\n-30 713,92\n-29 778,84\n-31 292,99\nBroad Money-M3\n78 909,26\n78 457,16\n78 377,85\n83 811,71\n87 003,17\n93 173,97\n97 336,53\n96 184,73\n99 202,27\n99 523,73\n105 453,84\n105 562,65\n108 088,71 108 915,12 112 264,22\nSecurities Other than Shares Included in Broad Money\n995,70\n1 110,84\n1 043,01\n1 258,29\n1 113,65\n1 031,34\n1 500,40\n1 525,56\n1 714,71\n1 562,95\n1 671,42\n1 533,06\n403,79\n1 075,41\n905,50\nBroad Money-M2\n77 913,56\n77 346,32\n77 334,84\n82 553,42\n85 889,52\n92 142,63\n95 836,13\n94 659,17\n97 487,56\n97 960,78\n103 782,42\n104 029,60\n107 684,91 107 839,71 111 358,72\nOther Deposits (Time Deposits)\n6 116,83\n6 724,49\n7 797,23\n7 273,44\n8 906,02\n10 202,83\n11 180,20\n10 986,71\n12 651,43\n13 338,89\n14 616,09\n14 059,93\n15 769,31\n15 992,22\n16 398,26\nof which Foreign Currency Accounts\n5 140,66\n5 707,45\n6 566,88\n6 058,37\n7 683,25\n8 760,66\n9 667,62\n9 240,63\n10 635,97\n11 472,65\n12 501,15\n11 969,63\n13 434,26\n13 594,66\n14 194,09\nNarrow Money-M1\n71 796,73\n70 621,83\n69 537,61\n75 279,99\n76 983,50\n81 939,80\n84 655,93\n83 672,46\n84 836,14\n84 621,89\n89 166,33\n89 969,67\n91 915,60\n91 847,49\n94 960,46\nTransferable Deposits\n71 683,53\n70 501,36\n69 416,64\n75 177,13\n76 875,02\n81 872,63\n84 533,18\n83 548,51\n84 714,95\n84 498,45\n89 038,34\n89 839,29\n91 776,66\n91 706,09\n94 816,21\n Of which Foreign Currency Accounts\n59 290,71\n58 700,73\n57 277,64\n62 889,89\n63 794,81\n67 072,42\n70 468,20\n69 972,03\n71 327,50\n71 043,42\n74 564,14\n74 440,20\n74 487,00\n75 465,39\n77 304,41\nCurrency Outside Depository Corporations\n113,20\n120,46\n120,97\n102,86\n108,48\n67,17\n122,74\n123,94\n121,19\n123,44\n127,98\n130,38\n138,94\n141,41\n144,26\nMemorandum Items\nReserve Money\n20 395,12\n21 688,51\n21 184,52\n22 726,34\n22 614,61\n23 287,44\n24 896,15\n25 488,47\n26 525,61\n26 223,52\n26 850,36\n27 935,96\n29 418,57\n27 339,59\n29 807,18\nFCAs as a Percentage of Deposits in M3\n83,4%\n82,2%\n81,6%\n82,4%\n82,3%\n81,4%\n82,4%\n82,5%\n82,7%\n83,0%\n82,7%\n82,0%\n81,4%\n81,9%\n81,6%\nEnd Period Exchange Rate\n25,79850\n26,36560\n26,56150\n26,76540\n26,81580\n26,91020\n26,94570\n26,78630\n26,75480\n26,64390\n26,38650\n26,19010\n25,98070\n25,58060\n25,77330\nSource: Reserve Bank of Zimbabwe,2026\nNotes:\n(i) Depository corporations survey - formerly Monetary Survey.\n(ii) Broad money redefined using IMF's Monetary and Financial Statistics Manual of 2000. Major changes include exclusion of Government deposits held by banks from broad money.\n(iii) Transferable deposits made up of demand and savings deposits.\n(iv) NCDs are also referred to as securities included in broad money.\n(v) All classes of time deposits, short and long term are classified as time deposits, which are also termed other deposits.\n(vi) Credit to the private sector now excludes claims on other financial corporations, as well as claims on state and local government (local authorities)\n(vii) Depository corporations made up of the Central Bank and other depository corporations\n(viii) Other depository corporations (ODCs) - Commercial banks, merchant banks, building societies and POSB.\n(ix) In December 2017, the statistics were adjusted in restrospect by reclassifying Securities issued under Aftrades from claims on government to claims on central bank\n(x) In December 2017, the statistics were adjusted in restrospect by reclassifying amounts accessed by banks under the Aftrades from liabilities to Other Depository corporations and Other Financial Corporations to liabilities to Central Bank \n(xi) In December 2018, statistics were revised from November 2017 due to reclassification of lines of credit (foreign liabilities) that were initially classified as deposits included in broad money\n(xii) All monetary and financial statistics are valued in ZWL$ since the introduction of the interbank foreign exchange market in February 2019\n(xiii). Monetary data was revised from September 2024 following the adoption of new reporting return submitted by banks. The notable revision is on broad money stock (M3) which was revised downwards due to reclassification of Government foreign currency deposits held by banks from deposits include\n (xiv) From April 2024, amounts include Unrealised Exchange Losses pertaining to IMF SDR Drawdowns which have been reclassified from Other Assets (OIN).\n(xv). The June 2025 figure includes exchange losses related to external loans transferred to the Government, which were reclassified from Unrealised Exchange Losses in Other Items Net (OIN). The adjustment does not indicate a flow of new money.\n(xvi). Loans and Advances to Gvt were revised from April 2024 to incorporate exchange losses relating to IMF SDR Drawdowns\n \n \n13 \n \n \n \nDec-18\nDec-19\nDec-20\nDec-21\nDec-22\nDec-23\nJul-24\nDec-24\nDec-25\nJan-26\nNet Foreign Assets\n-1 758 219,23\n-50 285,84\n-392 036,91\n-513 012,57\n-2 780 839,76\n-22 724 299,91\n-34 509,44\n-56 911,91\n-24 439,67\n-22 133,69\nClaims on Non Residents\n295 965,66\n5 504,94\n14 624,50\n134 462,90\n653 511,53\n2 750 142,28\n10 301,55\n23 239,75\n40 898,97\n42 141,52\nOfficial Reserves Assets\n86 950,64\n2 537,10\n2 786,28\n113 865,50\n408 577,46\n670 897,61\n4 653,58\n12 507,85\n30 679,48\n32 095,26\nOther Foreign Assets\n209 015,01\n2 967,84\n11 838,22\n20 597,41\n244 934,07\n2 079 244,67\n5 647,96\n10 731,90\n10 219,49\n10 046,26\nLess Liabilities to Non Residents\n2 054 184,89\n55 790,78\n406 661,40\n647 475,47\n3 434 351,30\n25 474 442,19\n44 810,99\n80 151,65\n65 338,63\n64 275,20\nShort Term Liabilities\n1 563 599,81\n35 686,12\n187 885,61\n276 458,35\n1 701 709,04\n253 445,37\n67,28\n127,60\n52,55\n51,75\nOther Foreign Liabilities*\n490 585,08\n20 104,66\n218 775,79\n371 017,12\n1 732 642,26\n25 220 996,82\n44 743,71\n80 024,06\n65 286,08\n64 223,46\n of which blocked funds\n11 993,44\n177 624,19\n215 193,86\n800 314,02\n4 848 587,01\n10 788,19\n17 365,02\n3 045,55\n2 998,65\nNet Domestic Assets (NDA)\n5 016 440,09\n60 613,66\n410 799,30\n538 956,83\n2 884 883,96\n24 745 515,21\n41 791,55\n77 307,02\n53 858,23\n49 473,28\nDomestic Claims\n7 598 696,62\n12 259,70\n17 721,76\n70 963,42\n327 159,83\n2 685 240,42\n23 611,62\n41 177,61\n68 072,79\n66 022,59\nNet Claims on Central Government\n6 983 331,70\n9 939,42\n15 520,80\n46 157,62\n193 502,85\n2 195 411,21\n23 124,88\n40 730,63\n66 630,08\n64 513,00\nClaims on Central Government\n7 024 820,99\n11 338,53\n25 693,68\n56 954,68\n344 351,64\n3 186 271,12\n27 458,25\n50 322,20\n73 132,44\n74 184,82\nOf which: Securities Other than Shares\n2 062 178,19\n6 828,36\n6 035,22\n5 725,70\n93 911,68\n2 219 186,78\n7 151,41\n13 877,09\n15 417,46\n15 240,42\n of which USD Securities \n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n7 146,85\n13 877,09\n15 417,46\n15 240,42\nof which Interest on Foreign Currency TBs\n574,54\n599,69\nLoans and Advances\n4 962 642,81\n4 510,17\n19 658,46\n51 228,99\n250 439,96\n967 084,34\n20 306,84\n36 445,10\n57 714,98\n58 944,40\nOf which Loans (inc interest capitalisation on Loans transfared to Gvt)\n3 618 382,32\n1 199,03\n15 645,17\n17 897,37\n83 409,68\n423 620,50\n1 588,97\n1 579,04\n164,74\n150,00\nRevaluations on External Loans Transfared to Government\n22 170,46\n21 829,04\nAmounts Due from Gvt including SDR Drawdowns\n271 144,05\n376,26\n401,72\n29 720,05\n167 030,28\n543 463,85\n18 717,87\n34 866,06\n35 379,78\n34 867,75\n Export Incentives\n1 073 116,43\n2 934,88\n3 611,57\n3 611,57\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\nLess Liabilities to Central Government\n41 489,30\n1 399,11\n10 172,88\n10 797,06\n150 848,79\n990 859,91\n4 333,36\n9 591,57\n6 502,36\n9 671,83\nOf which: Deposits\n41 489,30\n1 399,11\n10 172,88\n10 797,06\n150 848,79\n990 859,91\n4 333,36\n9 591,57\n6 502,36\n9 671,83\nof which Foreign Currency\n3 115,31\n9 291,47\n5 391,79\n7 773,12\nLocal Currency Deposits\n1 218,05\n300,09\n1 110,57\n1 898,70\nOther \n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\nClaims on Other Sectors\n615 364,93\n2 320,28\n2 200,96\n24 805,80\n133 656,99\n489 829,21\n486,74\n446,98\n1 442,71\n1 509,59\nOther Financial Corporations\n104 283,41\n114,22\n188,35\n1 940,32\n8 835,80\n28 216,64\n63,30\n31,35\n293,65\n294,52\nState and Local Government\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\nPublic Non Financial Corporations\n489 746,16\n2 130,15\n1 309,27\n20 881,24\n111 380,89\n359 338,87\n188,55\n12,29\n454,46\n511,05\nPrivate Sector\n21 335,35\n75,91\n703,34\n1 984,24\n13 440,29\n102 273,70\n234,89\n403,34\n694,60\n704,02\nClaims on Other Depository Corporations\n393 735,95\n1 247,76\n3 684,02\n4 919,97\n24 419,54\n266 265,29\n322,95\n907,94\n331,31\n303,64\nOf which: Loans\n393 735,95\n1 247,76\n3 684,02\n4 919,97\n24 419,54\n266 265,29\n322,95\n907,94\n331,31\n303,64\nOther Liabilities to ODCs\n2 739 770,63\n7 563,51\n53 880,04\n108 150,00\n685 265,98\n3 854 578,28\n5 505,98\n8 273,62\n7 826,23\n6 748,45\nOf which: Aftrades Balances\n388 000,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n Securities\n2 135 541,16\n4 579,22\n22 262,48\n72 821,16\n373 427,75\n1 519 969,71\n2 802,34\n2 002,01\n3 525,69\n2 928,73\nOther Items(Net)\n236 221,85\n-54 669,72\n-443 273,56\n-571 223,44\n-3 218 570,56\n-25 648 587,78\n-23 362,96\n-43 495,09\n6 719,64\n10 104,50\nShares and Other Equity\n475 653,19\n-54 656,74\n-442 191,36\n-620 887,58\n-3 148 249,30\n-25 053 448,27\n-23 332,83\n-39 722,52\n9 669,02\n12 364,88\nOther Items(Net)\n-260 446,06\n-1 160,95\n-3 242,65\n41 146,12\n-118 055,94\n-1 251 036,31\n-1 846,51\n-8 239,99\n-5 820,55\n-4 956,92\nLiabilities to Other Resident Sectors\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\nDeposits and Securities Excluded from Base Money\n21 014,72\n1 147,97\n2 160,46\n8 518,03\n47 734,68\n655 896,80\n1 816,38\n4 467,42\n2 871,16\n2 696,54\nMonetary Base \n3 258 220,86\n10 327 816,88\n18 762,40\n25 944,26\n104 044,19\n2 021 215,30\n7 282,11\n20 395,12\n29 418,57\n27 339,59\nCurrency Issued\n65,76\n181,87\n508,78\n521,59\nZWL Coins\n86 558,34\n99 010,30\n2 375,93\n99,71\n99,65\n76,97\n0,01\n0,01\n0,00\n0,00\nZWL Notes\n435 985,12\n978 393,54\n99,71\n5 052,40\n7 472,20\n15 672,83\n6,02\n5,29\n0,00\n0,00\nZiG Coins\n0,00\n0,00\n0,00\n0,00\n20,18\n35,32\n35,31\n35,32\nZiG Notes\n0,00\n0,00\n0,00\n0,00\n39,55\n141,25\n473,47\n486,27\nLiabilities to ODCs\n2 718 472,21\n8 352 572,72\n16 386,47\n20 792,15\n96 472,35\n1 975 463,24\n7 216,36\n20 213,24\n28 909,78\n26 818,01\nReserve Deposits\n393 439,26\n918 034,34\n2 199,09\n19 781,79\n51 076,73\n533 568,04\n6 001,81\n16 691,28\n23 480,57\n23 178,94\n Local Currency Reserve Deposits\n0,00\n0,00\n45 295,25\n1 441 895,20\n1 293,91\n2 935,34\n4 499,77\n4 362,02\n Foreign Currency Reserve Deposits\n2 325 032,95\n7 434 538,38\n14 187,38\n1 010,36\n100,36\n30 002,26\n4 707,90\n13 755,94\n18 980,80\n18 816,92\n Exess reserves \n1 214,55\n3 521,96\n5 429,21\n3 639,07\n of which Excess reserves - ZiG\n87,38\n398,70\n298,74\n466,37\n Excess reserves - FCA\n1 127,17\n3 123,26\n5 130,47\n3 172,70\nPrivate Deposits\n17 205,18\n897 840,31\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\nSource: Reserve Bank of Zimbabwe,2026\nNotes\ni. Other Foreign Liabilities include blocked funds amounting to USD2.2 billion assumed by the Central Bank on behalf of Government.\nii. From April 2024, claims on Government amounts include Unrealised Exchange Losses pertaining to IMF SDR Drawdowns which have been reclassified from Other Assets (OIN).\niii. The June 2025 figure includes exchange losses related to external loans transferred to the Government, which were reclassified from Unrealised Exchange Losses in Other Items Net (OIN). The adjustment does not indicate a flow of new money.\niv. Loans and Advances to Gvt were revised from April 2024 to incorporate exchange losses relating to IMF SDR Drawdowns\nvi. Loans and Advances to Gvt were further adjusted in June 2025 to include exchange rate related revaluations on external loans transferred to Gvt.\nTABLE 2: CENTRAL BANK SURVEY ($'Million)\n \n \n14 \n \n \n \nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nFeb-26\nNet Foreign Assets\n9 765 464,22\n9 112 969,32\n7 389,86\n8 858,14\n9 084,92\n9 303,65\n11 183,09\n11 059,03\n9 163,35\n10 642,45\n12 654,54\n13 917,24\n11 230,10\n9 891,40\n15 199,87\n15 834,28\nClaims on Non Residents\n19 162 644,38\n20 113 361,10\n20 280,52\n21 464,25\n22 405,99\n22 719,00\n26 321,77\n25 204,45\n24 310,89\n25 812,72\n29 009,96\n27 770,37\n27 309,59\n27 538,14\n31 883,45\n30 487,17\nOf Which: Foreign Currency\n11 234 930,19\n10 288 521,82\n12 746,36\n11 639,76\n9 242,68\n9 519,90\n8 665,77\n9 520,98\n10 812,40\n14 822,22\n15 521,30\n14 189,74\n14 165,53\n15 140,90\n20 317,62\n18 311,84\nDeposits\n7 530 468,74\n9 296 529,40\n6 917,90\n9 040,66\n12 961,80\n12 996,49\n17 466,41\n15 492,78\n13 309,36\n10 831,44\n13 370,17\n13 463,63\n13 027,90\n12 281,70\n11 431,38\n12 041,32\nOther\n397 245,45\n528 309,88\n616,26\n783,83\n201,51\n202,60\n189,59\n190,69\n189,13\n159,06\n118,49\n117,00\n116,16\n115,54\n134,45\n134,01\nLess Liabilities to Non Residents\n9 397 180,16\n11 000 391,78\n12 890,67\n12 606,10\n13 321,07\n13 415,35\n15 138,68\n14 145,42\n15 147,54\n15 170,26\n16 355,43\n13 853,12\n16 079,48\n17 646,74\n16 683,59\n14 652,89\nOf Which: Deposits\n953 309,19\n1 408 378,26\n2 457,30\n2 140,51\n1 714,07\n2 351,48\n3 165,21\n1 703,40\n2 629,70\n2 685,47\n3 404,41\n1 670,94\n3 097,42\n5 028,24\n5 623,35\n4 835,87\nLoans\n8 443 870,97\n9 592 013,52\n10 433,37\n10 465,60\n11 607,00\n11 063,87\n11 973,47\n12 442,02\n12 517,84\n12 484,79\n12 951,02\n12 182,18\n12 855,93\n12 498,18\n10 941,68\n9 707,38\nOther\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n126,14\n120,31\n118,55\n109,64\nNet Domestic Assets (NDA)\n62 564,10\n69 536,43\n70 673,91\n69 308,20\n74 080,26\n77 384,56\n81 367,58\n85 837,60\n86 676,41\n87 770,24\n86 219,17\n91 077,56\n93 867,17\n97 394,20\n93 028,57\n96 237,06\nDomestic Claims\n56 082,21\n61 112,23\n62 715,84\n63 183,47\n64 707,12\n65 487,40\n67 523,42\n68 938,49\n72 237,69\n72 658,42\n70 752,97\n74 144,41\n77 164,83\n78 514,51\n76 605,64\n78 479,30\nNet Claims on Central Government\n2 579,12\n5 475,14\n5 587,82\n5 710,88\n5 893,84\n2 703,38\n1 911,03\n1 432,28\n3 806,99\n3 432,57\n-343,81\n758,29\n2 177,45\n3 605,50\n2 354,67\n1 658,39\nClaims on Central Government\n12 992,03\n13 929,03\n13 736,58\n13 267,36\n13 658,28\n13 697,56\n13 883,28\n15 519,89\n16 115,81\n15 804,64\n14 956,67\n15 518,58\n15 671,68\n17 041,29\n16 559,26\n16 015,43\nSecurities\n12 733,08\n13 680,09\n13 393,71\n12 742,17\n13 149,28\n13 219,57\n13 413,78\n15 011,08\n15 661,68\n15 264,20\n14 394,72\n14 979,39\n15 156,37\n16 587,35\n16 129,47\n16 002,76\n of which foreign currency denominated securities\n11 066,91\n12 179,89\n11 952,49\n11 317,47\n11 610,83\n12 803,60\n11 975,41\n12 612,98\n12 740,28\n12 330,04\n11 616,75\n11 903,45\n12 178,11\n12 782,98\n12 510,80\n12 469,87\nLoans\n258,95\n248,94\n342,87\n525,19\n509,01\n478,00\n469,51\n508,81\n454,13\n540,44\n561,95\n539,19\n515,30\n453,93\n429,79\n12,67\n of which foreign currency\n256,79\n248,35\n335,73\n515,89\n500,08\n474,00\n460,64\n505,05\n445,28\n530,49\n550,56\n533,21\n509,52\n448,58\n424,57\n12,54\nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nLess Liabilities to Central Government\n10 412,91\n8 453,89\n8 148,76\n7 556,48\n7 764,44\n10 994,18\n11 972,25\n14 087,61\n12 308,82\n12 372,07\n15 300,48\n14 760,29\n13 494,22\n13 435,79\n14 204,59\n14 357,03\nOf which: Deposits\n10 406,49\n8 453,88\n8 148,76\n7 486,50\n7 714,70\n10 839,61\n11 890,29\n13 980,02\n12 190,98\n12 265,21\n15 171,44\n14 628,22\n13 299,60\n13 268,09\n13 998,64\n14 068,75\nof which foreign currency deposits\n9 591,43\n7 777,48\n7 621,82\n6 689,63\n6 183,93\n9 392,25\n10 536,89\n12 630,29\n10 600,01\n10 915,21\n13 550,72\n12 693,10\n12 308,34\n11 917,20\n12 439,53\n13 229,38\nOther \n6,42\n0,01\n0,00\n69,98\n49,75\n154,57\n81,96\n107,59\n117,83\n106,86\n129,04\n132,07\n194,62\n167,71\n205,95\n288,28\nClaims on Other Sectors\n53 503,09\n55 637,09\n57 128,02\n57 472,59\n58 813,28\n62 784,02\n65 612,38\n67 506,21\n68 430,69\n69 225,85\n71 096,78\n73 386,13\n74 987,38\n74 909,01\n74 250,98\n76 820,91\nOther Financial Corporations\n2 660,02\n3 791,26\n3 485,44\n3 385,55\n3 608,07\n4 473,46\n4 032,45\n3 957,16\n4 175,70\n4 256,35\n5 121,64\n4 895,91\n5 396,25\n4 965,42\n5 099,44\n5 643,81\nState and Local Government\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n22,04\n21,46\n18,84\n23,48\n23,74\n20,77\n23,29\n23,76\nPublic Non Financial Corporations\n803,29\n551,32\n558,39\n545,98\n481,20\n462,25\n356,01\n338,67\n337,14\n243,04\n217,57\n459,14\n524,00\n652,18\n1 510,48\n1 563,90\nPrivate Sector\n50 039,78\n51 294,51\n53 084,19\n53 541,07\n54 724,00\n57 848,31\n61 223,93\n63 210,38\n63 895,82\n64 705,01\n65 738,73\n68 007,60\n69 043,39\n69 270,63\n67 617,77\n69 589,44\nof which foreign currency denominated loans\n42 518,38\n42 937,33\n46 086,81\n46 197,56\n47 961,06\n50 400,88\n52 686,20\n54 648,96\n54 746,71\n54 919,36\n56 222,03\n58 272,26\n59 687,69\n59 670,51\n58 499,01\n60 315,26\nClaims on the Central Bank\n29 978,18\n29 908,44\n30 373,55\n29 202,08\n30 532,02\n33 836,49\n34 730,71\n36 281,29\n36 593,85\n37 610,46\n36 713,15\n37 496,18\n38 667,92\n40 660,31\n37 292,73\n39 322,17\nCurrency\n71,40\n68,67\n69,32\n75,03\n101,33\n107,36\n161,37\n212,52\n217,74\n226,17\n239,92\n251,32\n326,31\n369,84\n380,18\n380,27\nReserves\n29 665,56\n29 561,47\n30 142,63\n28 957,94\n30 153,54\n33 294,89\n34 245,99\n35 723,28\n36 068,33\n36 921,10\n35 998,29\n36 686,58\n37 765,06\n39 802,57\n36 391,29\n38 323,45\nSecurities\n241,22\n278,30\n161,60\n169,10\n277,15\n434,25\n323,36\n345,49\n307,78\n463,19\n474,94\n558,28\n576,55\n487,89\n521,26\n618,45\nOther Claims\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\n0,00\nLiabilities to the Central Bank\n282,26\n233,01\n488,20\n536,90\n541,72\n544,15\n160,12\n149,02\n194,20\n156,52\n143,37\n184,11\n107,06\n62,58\n60,40\n31,43\n0,00\n0,00\nOther Items(Net)\n23 214,03\n21 251,23\n21 927,28\n22 540,45\n20 617,17\n21 395,18\n20 726,43\n19 233,16\n21 960,93\n22 342,11\n21 103,59\n20 378,92\n21 858,52\n21 718,04\n20 809,40\n21 532,98\nShares and Other Equity\n37 782,51\n38 602,37\n37 957,33\n39 010,06\n39 952,69\n40 420,68\n40 672,56\n41 715,34\n43 880,98\n44 654,49\n44 379,40\n45 067,33\n43 901,66\n42 447,79\n41 691,57\n43 427,50\nLiabilities to other ressident sectors\n338,84\n351,53\n40,86\n232,77\n52,60\n57,57\n129,76\n154,53\n160,13\n219,06\n72,01\n186,56\n291,68\n319,39\n332,40\n321,53\nOther Items(Net)\n-14 907,33\n-17 702,67\n-16 070,91\n-16 702,38\n-19 388,12\n-19 083,07\n-20 075,89\n-22 636,71\n-22 080,18\n-22 531,45\n-23 347,82\n-24 874,98\n-22 334,83\n-21 049,14\n-21 214,57\n-22 216,06\nDeposits and Securities Included in Broad Money\n72 329,56\n78 649,40\n78 063,76\n78 166,34\n83 165,18\n86 688,21\n92 550,67\n96 896,64\n95 839,75\n98 412,69\n98 873,70\n104 994,81\n105 097,27\n107 285,61\n108 228,44\n112 976,85\nDeposits Included in Broad Money\n71 557,89\n \n77 653,70\n \n76 952,92\n \n77 123,33\n \n81 906,89\n \n85 574,56\n \n91 519,33\n \n95 396,24\n \n94 314,20\n \n96 697,98\n \n97 310,75\n \n103 323,38\n \n103 564,22\n \n106 881,82\n \n107 153,03\n \n112 071,35\n \nTransferable Deposits\n65 726,26\n \n71 536,87\n \n70 228,43\n \n69 326,09\n \n74 633,46\n \n76 668,54\n \n81 316,50\n \n84 216,03\n \n83 327,48\n \n84 046,56\n \n83 971,86\n \n88 707,29\n \n89 504,29\n \n91 112,50\n \n91 160,81\n \n94 767,58\n \n of which FCAs\n54 884,34\n \n59 157,87\n \n58 527,96\n \n57 270,33\n \n62 418,69\n \n63 622,76\n \n66 516,87\n \n70 151,60\n \n69 751,55\n \n70 659,66\n \n70 517,62\n \n74 233,88\n \n74 105,68\n \n73 823,32\n \n75 465,39\n \n77 304,41\n \nOther Deposits (Time Deposits)\n5 831,62\n6 116,83\n6 724,49\n7 797,23\n7 273,44\n8 906,02\n10 202,83\n11 180,20\n10 986,71\n12 651,43\n13 338,89\n14 616,09\n14 059,93\n15 769,31\n15 992,22\n16 398,26\n \n of which FCAs\n4 568,46\n5 140,66\n5 707,45\n6 566,88\n6 058,37\n7 683,25\n8 760,66\n9 667,62\n9 240,63\n10 635,97\n11 472,65\n12 501,15\n11 969,63\n13 434,26\n13 594,66\n14 194,09\nMoney Market Instruments\n771,68\n \n995,70\n \n1 110,84\n \n1 043,01\n \n1 258,29\n \n1 113,65\n \n1 031,34\n \n1 500,40\n \n1 525,56\n \n1 714,71\n \n1 562,95\n \n1 671,42\n \n1 533,06\n \n403,79\n \n1 075,41\n \n905,50\nSource:Reserve Bank of Zimbabwe,2026\nNotes\n i. Monetary data was revised from September 2024 following the adoption of new reporting return submitted by banks. \n ii. The notable revision is on broad money stock (M3) which was revised downwards due to reclassification of Government foreign currency deposits held by banks from deposits included in broad money. \nTABLE 3 : OTHER DEPOSITORY CORPORATIONS SURVEY ( $ 'Million)\n \n \n15 \n \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\n Notes &\n&\nwith\nOther Depository \nwith\non\nLocal Governemt\nOther2\nGovernment\nLocal \nPublic \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nsecurities\nGovernment\nEnterprises\nTotal\nAssets\n2022\nJan\n2 891,2\n \n53 378,3\n \n116 654,8\n \n13 232,3\n \n69 668,2\n \n30 774,3\n40 241,6\n2,4\n186,8\n2 906,7\n20,3\n163,0\n4 023,2\n228 616,6\n16 284,0\n53 627,8\n55 303,6\n85 737,0\n773 712,0\nFeb\n2 577,7\n \n62 064,5\n \n122 479,8\n \n17 480,5\n \n76 802,2\n \n28 703,5\n49 241,8\n1,6\n0,0\n3 242,5\n20,3\n158,1\n5 761,9\n249 205,9\n16 681,8\n55 099,6\n59 171,4\n86 732,0\n835 425,0\nMar\n2 111,5\n \n76 544,2\n \n142 962,5\n \n19 239,6\n \n87 884,5\n \n43 284,1\n50 566,9\n0,9\n0,0\n2 970,2\n19,4\n253,4\n6 635,8\n296 282,4\n16 435,1\n65 660,6\n69 287,0\n94 293,1\n974 431,2\nApr\n2 624,9\n \n74 716,9\n \n160 466,5\n \n28 352,1\n \n123 190,3\n \n26 628,8\n63 944,8\n0,2\n0,0\n2 583,9\n37,5\n252,4\n7 258,1\n338 207,2\n30 154,8\n53 372,3\n73 993,0\n90 352,8\n1 076 136,5\nMay\n3 155,9\n \n142 118,9\n \n236 166,0\n \n35 928,9\n \n207 812,8\n \n61 757,6\n70 936,8\n0,0\n155,0\n3 762,8\n41,3\n289,0\n16 588,0\n455 287,9\n36 125,5\n134 993,5\n111 577,7\n130 617,1\n1 647 314,7\nJun\n2 801,2\n \n138 347,1\n \n266 691,8\n \n45 952,0\n \n241 920,1\n \n63 631,8\n86 890,0\n0,0\n654,0\n5 297,4\n61,2\n226,3\n14 282,6\n549 799,2\n38 578,3\n169 511,8\n130 604,3\n205 601,3\n1 960 850,3\nJul\n2 427,6\n \n159 024,6\n \n315 832,5\n \n39 388,2\n \n230 432,5\n \n41 246,8\n91 509,2\n0,0\n394,3\n4 940,5\n100,7\n349,7\n22 911,0\n638 556,7\n45 361,4\n144 090,2\n143 606,3\n242 024,6\n2 122 196,7\nAug\n2 640,6\n \n263 637,4\n \n411 439,9\n \n69 203,5\n \n311 107,0\n \n29 186,6\n100 187,1\n0,0\n330,1\n6 912,2\n113,5\n287,1\n46 504,1\n764 466,3\n46 788,2\n167 029,4\n251 442,9\n244 934,2\n2 716 210,1\nSep\n3 030,7\n \n289 230,8\n \n504 071,1\n \n75 446,7\n \n417 007,1\n \n18 185,0\n143 464,9\n0,0\n267,4\n8 265,9\n115,1\n306,3\n41 560,9\n902 078,3\n51 664,5\n146 133,1\n231 760,0\n285 781,8\n3 118 369,8\nOct\n3 022,6\n \n300 240,3\n \n525 870,3\n \n104 483,2\n \n389 979,7\n \n22 895,3\n151 757,7\n0,0\n204,7\n4 590,6\n116,5\n342,0\n43 335,5\n936 397,1\n58 632,8\n165 306,9\n267 183,8\n298 996,3\n3 273 355,4\nNov\n3 251,4\n \n286 365,2\n \n575 885,7\n \n111 716,1\n \n342 790,1\n \n17 089,0\n198 814,4\n0,0\n142,0\n6 078,2\n119,5\n303,6\n43 195,4\n1 042 144,5\n73 069,8\n170 944,8\n232 107,1\n302 373,7\n3 406 390,5\nDec\n3 361,7\n \n295 435,1\n \n652 284,4\n \n119 932,8\n \n351 906,8\n \n7 965,4\n288 844,0\n0,0\n20 072,7\n8 831,7\n114,4\n282,6\n30 272,3\n1 143 910,8\n84 048,5\n159 126,2\n234 748,7\n418 944,7\n3 820 082,5\n2023\nJan\n4 923,3\n \n379 841,7\n \n704 168,6\n \n151 980,1\n \n389 342,8\n \n-1 443,6\n319 807,4\n0,0\n23 774,5\n8 624,7\n228,5\n251,2\n44 113,2\n1 348 919,7\n137 477,6\n227 545,4\n251 246,0\n451 149,8\n4 441 950,8\nFeb\n1 880,1\n \n436 062,8\n \n743 888,5\n \n81 067,5\n \n518 081,0\n \n21 964,4\n332 626,9\n0,0\n26 717,2\n6 974,7\n319,0\n197,4\n44 691,5\n1 538 078,6\n142 383,8\n226 933,0\n281 339,4\n490 831,3\n4 894 037,1\nMar\n2 031,6\n \n425 326,5\n \n817 631,1\n \n112 374,3\n \n531 935,4\n \n41 928,7\n360 626,2\n0,0\n24 689,0\n10 382,7\n432,2\n149,8\n48 725,4\n1 745 783,1\n166 893,5\n554 840,9\n315 882,3\n532 130,1\n5 691 762,4\nApr\n1 844,7\n \n462 081,4\n \n972 122,7\n \n161 740,7\n \n620 095,0\n \n32 207,0\n391 587,8\n0,0\n28 119,0\n19 573,0\n559,8\n99,3\n54 058,4\n1 822 350,9\n178 895,0\n214 270,9\n411 870,0\n572 012,3\n5 943 487,7\nMay\n1 107,2\n \n1 048 116,4\n \n2 049 066,1\n \n309 234,1\n \n1 554 969,0\n \n84 147,3\n653 025,9\n0,0\n76 351,5\n16 564,4\n4 599,1\n80,3\n112 188,1\n4 068 894,1\n366 505,1\n607 438,1\n788 546,8\n884 349,9\n12 625 183,4\nJun\n1 984,5\n \n2 249 201,6\n \n4 424 350,0\n \n471 360,3\n \n3 050 984,1\n \n390 369,2\n981 773,8\n0,0\n212 126,8\n8 070,8\n18 582,4\n83,0\n260 946,3\n8 977 244,2\n669 100,1\n1 390 786,2\n1 582 985,5\n2 782 639,3\n27 472 588,1\nJul\n1 489,0\n \n1 584 403,3\n \n4 137 377,2\n \n380 493,0\n \n3 132 849,9\n \n369 552,6\n1 242 045,2\n0,0\n165 764,7\n17 713,9\n7 368,1\n68,1\n208 253,7\n7 144 225,5\n821 517,0\n829 382,3\n1 411 037,1\n3 124 457,4\n24 577 997,9\nAug\n2 292,1\n \n1 505 916,2\n \n4 651 358,8\n \n448 025,8\n \n3 179 274,3\n \n245 546,0\n1 190 599,0\n0,0\n165 103,2\n7 939,8\n7 469,9\n75,8\n205 341,5\n7 142 066,9\n817 682,7\n701 626,2\n1 348 230,8\n3 086 091,3\n24 704 640,2\nSep\n2 465,6\n \n2 015 621,6\n \n5 263 338,5\n \n560 033,8\n \n3 210 332,7\n \n305 649,1\n1 318 582,7\n0,0\n175 013,5\n10 773,5\n9 935,8\n92,0\n219 878,9\n8 628 418,0\n892 737,1\n776 997,6\n1 646 406,8\n3 310 710,4\n28 346 987,7\nOct\n2 425,4\n \n2 312 575,1\n \n5 910 277,9\n \n751 077,6\n \n2 663 186,5\n \n240 258,0\n1 272 839,7\n0,0\n190 359,3\n21 408,8\n10 816,8\n98,1\n237 525,7\n9 281 352,1\n844 462,4\n958 746,4\n1 741 207,9\n3 433 150,2\n29 871 767,9\nNov\n2 705,3\n \n2 558 589,3\n \n6 324 144,1\n \n730 377,0\n \n2 788 783,6\n \n230 917,5\n1 517 348,4\n0,0\n188 949,4\n34 470,7\n10 921,4\n59,8\n238 702,3\n9 523 818,5\n907 759,0\n1 046 257,0\n2 150 227,0\n3 544 388,6\n31 798 418,9\nDec\n3 398,4\n \n2 868 505,6\n \n5 973 706,9\n \n918 524,5\n \n2 631 445,7\n \n212 294,5\n2 627 512,6\n0,0\n182 480,9\n38 249,3\n12 325,3\n73,5\n248 699,8\n10 110 961,4\n984 502,1\n1 184 706,9\n2 319 603,9\n4 087 896,6\n34 404 887,7\n2024\nJan\n2 947,9\n \n5 196 670,6\n \n9 096 074,6\n \n1 414 527,9\n \n3 957 664,6\n \n326 220,5\n4 283 761,8\n0,0\n306 771,2\n57 595,6\n17 912,4\n198,8\n374 088,3\n16 298 021,8\n1 109 251,7\n1 949 662,4\n3 467 246,2\n5 133 753,8\n52 992 370,2\nFeb\n3 143,6\n \n7 309 077,0\n \n12 595 037,9\n \n2 395 225,7\n \n5 340 576,7\n \n178 130,4\n6 381 641,8\n0,0\n437 989,9\n78 292,7\n26 073,1\n232,0\n488 602,8\n24 095 690,3\n1 538 423,6\n2 608 075,1\n4 122 833,9\n6 863 317,4\n74 462 363,7\nMar\n2 831,0\n \n9 785 505,6\n \n16 734 744,0\n \n3 185 636,7\n \n7 548 560,1\n \n775 336,9\n8 605 206,6\n0,0\n585 769,6\n126 026,3\n47 609,3\n143,3\n729 484,9\n37 149 745,6\n2 535 252,5\n2 860 196,6\n5 844 376,9\n10 808 889,0\n107 325 315,0\nApr\n7,5\n \n4 794,8\n \n11 004,0\n \n2 108,7\n \n5 798,1\n \n354,3\n5 583,2\n0,0\n348,4\n37,2\n330,0\n1,8\n440,5\n22 799,4\n1 336,2\n2 510,2\n6 102,7\n5 490,3\n69 047,3\nMay\n15,0\n \n4 337,6\n \n12 420,7\n \n2 281,4\n \n6 437,2\n \n492,4\n5 867,7\n0,0\n339,6\n23,7\n49,4\n1,4\n433,4\n23 728,2\n1 520,6\n2 114,7\n7 240,8\n5 731,5\n73 035,2\nJun\n9,2\n \n4 753,1\n \n12 746,0\n \n2 349,5\n \n6 493,3\n \n409,0\n6 309,9\n0,0\n282,9\n32,6\n45,1\n1,5\n446,4\n25 292,4\n1 628,6\n2 541,3\n7 612,6\n6 871,1\n77 824,6\nJul\n7,5\n \n5 739,9\n \n11 453,3\n \n1 987,0\n \n6 135,6\n \n451,2\n7 706,6\n0,0\n276,2\n128,4\n45,6\n0,2\n432,4\n26 513,1\n2 454,9\n2 342,9\n8 065,1\n7 708,4\n81 448,2\nAug\n6,4\n \n6 444,9\n \n13 516,2\n \n2 310,5\n \n4 922,1\n \n205,9\n6 955,1\n0,0\n246,2\n100,5\n146,7\n0,2\n388,0\n27 463,6\n2 511,4\n2 767,9\n9 021,7\n8 363,7\n85 371,0\nSep\n7,9\n \n10 895,9\n \n22 399,7\n \n3 870,6\n \n8 728,6\n \n340,5\n10 929,4\n0,0\n431,0\n34,5\n281,9\n0,3\n610,8\n46 961,9\n3 924,3\n4 853,4\n13 635,1\n12 318,0\n140 223,9\nOct\n56,7\n \n13 662,1\n \n30 414,7\n \n5 068,5\n \n8 024,4\n \n129,1\n12 091,8\n0,0\n502,2\n53,5\n281,7\n0,1\n689,5\n54 229,9\n4 447,2\n6 380,1\n13 935,9\n13 802,2\n163 769,6\nNov\n72,6\n \n11 233,7\n \n29 835,6\n \n4 498,6\n \n6 365,0\n \n117,3\n10 509,5\n0,0\n367,6\n185,0\n2 660,3\n0,1\n582,5\n49 728,9\n4 261,8\n6 685,9\n14 193,4\n13 503,2\n154 800,9\nDec\n82,6\n \n10 274,6\n \n32 110,0\n \n5 538,7\n \n8 540,2\n \n287,6\n11 621,4\n0,0\n361,0\n79,0\n90,3\n0,6\n559,5\n51 561,9\n4 324,4\n6 555,3\n16 212,6\n14 183,7\n162 383,2\n2025\nJan\n69,3\n \n12 746,4\n \n30 180,7\n \n3 532,9\n \n6 021,2\n \n896,7\n13 393,7\n0,0\n0,0\n2 006,3\n342,9\n0,0\n558,4\n6 598,6\n45 645,3\n52 243,9\n4 743,0\n6 786,8\n10 675,6\n18 575,8\n162 773,4\nFeb\n75,0\n \n11 639,8\n \n28 998,1\n \n3 283,1\n \n8 161,6\n \n879,1\n12 742,2\n0,0\n0,0\n2 420,6\n525,2\n0,0\n546,0\n6 009,1\n46 847,7\n52 856,7\n4 830,3\n7 060,8\n8 636,7\n18 506,8\n161 162,0\nMar\n101,3\n \n9 242,7\n \n30 230,5\n \n3 610,1\n \n12 141,7\n \n820,1\n13 149,3\n0,0\n0,0\n2 701,4\n509,0\n0,0\n481,2\n5 364,5\n48 748,3\n54 112,8\n4 536,1\n7 859,2\n8 503,0\n19 297,8\n167 296,2\nApr\n107,4\n \n9 519,9\n \n33 479,3\n \n3 591,2\n \n12 582,7\n \n413,8\n13 219,6\n0,0\n0,0\n2 516,2\n478,0\n0,0\n462,3\n5 605,4\n52 416,4\n58 021,8\n4 214,0\n6 452,9\n11 508,1\n19 362,3\n175 929,4\nMay\n161,4\n \n8 665,8\n \n34 327,1\n \n3 618,3\n \n17 046,8\n \n419,6\n13 413,8\n0,0\n0,0\n2 354,6\n469,5\n0,0\n356,0\n6 417,7\n54 552,9\n60 970,5\n4 191,2\n7 163,7\n11 589,0\n19 259,1\n184 006,3\nJun\n212,5\n \n9 521,0\n \n35 799,3\n \n6 230,7\n \n15 373,4\n \n119,4\n15 011,1\n0,0\n0,0\n2 344,4\n508,8\n0,0\n338,7\n6 306,6\n56 337,6\n62 644,2\n6 770,3\n7 532,5\n10 182,1\n19 289,0\n191 877,5\nJul\n213,8\n \n9 541,1\n \n35 802,0\n \n6 242,3\n \n15 357,8\n \n119,4\n15 009,2\n0,0\n0,0\n2 344,4\n508,8\n0,0\n338,7\n6 306,6\n56 419,5\n62 726,1\n6 735,6\n7 493,6\n10 258,8\n19 318,5\n192 010,2\nAug\n226,2\n \n14 822,2\n \n36 977,1\n \n5 875,5\n \n10 221,8\n \n609,6\n15 264,2\n0,0\n0,0\n2 284,7\n540,4\n21,5\n243,0\n7 482,0\n56 642,4\n64 124,4\n8 139,8\n8 543,3\n11 926,7\n19 642,7\n199 463,2\nSep\n239,9\n \n15 521,3\n \n36 090,8\n \n4 591,7\n \n12 448,2\n \n921,9\n14 394,7\n0,0\n0,0\n2 385,7\n562,0\n18,8\n217,6\n7 300,0\n58 466,7\n65 766,7\n6 252,1\n8 537,4\n12 793,5\n20 013,7\n200 756,0\nOct\n251,3\n \n14 189,7\n \n36 754,9\n \n5 802,9\n \n12 553,0\n \n910,6\n14 979,4\n0,0\n0,0\n2 544,0\n539,2\n23,5\n459,1\n7 479,3\n60 433,5\n67 912,7\n5 513,5\n7 774,8\n12 321,7\n19 927,9\n202 458,5\nNov\n326,3\n \n14 165,5\n \n37 874,5\n \n6 578,1\n \n12 199,9\n \n828,0\n15 156,4\n0,0\n0,0\n2 490,1\n515,3\n23,7\n524,0\n7 149,7\n62 122,0\n69 271,7\n6 271,4\n9 054,8\n12 324,8\n19 793,3\n207 398,0\nDec\n369,8\n \n15 140,9\n \n39 886,1\n \n4 131,9\n \n11 461,7\n \n820,0\n16 587,4\n0,0\n0,0\n3 130,2\n453,9\n20,8\n652,2\n7 188,3\n61 788,6\n68 976,9\n5 263,1\n8 262,1\n11 058,7\n20 241,9\n206 457,4\n2026\nJan\n380,2\n \n20 317,6\n \n36 537,8\n \n5 100,6\n \n10 727,9\n \n703,5\n16 129,5\n0,0\n0,0\n3 048,8\n429,8\n23,3\n1 510,5\n6 790,3\n60 731,1\n67 521,4\n5 351,0\n8 573,5\n11 450,3\n20 022,9\n207 828,5\nFeb\n380,3\n \n18 311,8\n \n38 550,6\n \n5 693,1\n \n11 255,4\n \n785,9\n16 002,8\n0,0\n0,0\n2 582,2\n12,7\n23,8\n1 993,6\n6 871,4\n62 522,7\n69 394,1\n4 997,7\n8 179,6\n11 851,8\n20 551,6\n210 566,8\nSource:Reserve Bank of Zimbabwe, 2026\nNotes\ni.Government securities includes treasuary bills and bonds\nii.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\nii.Includes households, other financial corporations.\n*Statistics are denominated in ZiG\nPublic Enterprises\nDebt Securities\nLoans and Advances\nGovernment1 \nSecurities\nOther Institutional Units\nForeign \nCurrency \nDenominated\n ZiG \nDenominated\nTABLE 4.1 : OTHER DEPOSITORY CORPORATIONS - ASSETS\nMillions\n \n \n16 \n \n \n \nEnd of\nTotal Deposits\nof which FCA\n2022\nJan\n392 702,2\n32 298,0\n39 346,3\n464 346,5\n2 962,5\n4 027,0\n471 336,0\n3 685,3\n25 398,5\n2 688,6\n1 416,9\n230,5\n144 852,4\n53 627,8\n70 476,0\n773 712,0\nFeb\n413 978,3\n37 494,3\n47 592,5\n499 065,1\n3 229,3\n4 407,7\n506 702,1\n4 456,2\n30 483,6\n2 120,4\n1 769,7\n226,8\n153 788,5\n55 099,6\n80 778,2\n835 425,0\nMar\n488 137,1\n37 893,9\n54 213,9\n580 244,9\n3 062,2\n5 330,5\n588 637,7\n4 510,9\n33 995,7\n2 137,9\n3 281,0\n810,6\n175 156,3\n65 660,6\n100 240,6\n974 431,2\nApr\n562 613,7\n46 129,7\n52 760,1\n661 503,5\n6 377,5\n7 656,8\n675 537,9\n4 246,9\n38 472,7\n2 173,0\n3 877,2\n486,8\n178 614,3\n53 372,3\n119 355,4\n1 076 136,5\nMay\n830 166,0\n61 112,6\n70 113,9\n961 392,5\n7 310,9\n7 417,6\n976 120,9\n6 165,3\n73 411,8\n2 383,3\n3 241,0\n321,8\n243 544,4\n134 993,5\n207 132,5\n1 647 314,7\nJun\n961 316,9\n66 716,9\n81 118,5\n1 109 152,4\n5 627,3\n10 226,2\n1 125 005,9\n7 157,9\n83 048,1\n2 898,5\n4 589,8\n345,2\n355 060,9\n169 511,8\n213 232,2\n1 960 850,3\nJul\n1 016 820,2\n79 550,5\n94 495,2\n1 190 865,8\n1 789,6\n9 363,5\n1 202 018,9\n8 137,9\n100 313,8\n2 814,9\n5 020,5\n1 339,1\n419 883,3\n144 090,2\n238 578,1\n2 122 196,7\nAug\n1 367 431,3\n85 931,5\n134 512,9\n1 587 875,7\n2 415,4\n7 892,4\n1 598 183,5\n12 785,6\n119 851,6\n3 230,7\n5 771,2\n555,2\n491 336,5\n167 029,4\n317 466,4\n2 716 210,1\nSep\n1 648 027,7\n92 678,5\n157 504,6\n1 898 210,8\n1 482,9\n8 707,2\n1 908 401,0\n14 047,5\n143 842,3\n3 720,2\n9 246,7\n587,2\n553 942,2\n146 133,1\n338 449,6\n3 118 369,8\nOct\n1 615 381,5\n76 774,2\n166 880,7\n1 859 036,4\n2 028,0\n6 673,7\n1 867 738,0\n15 558,9\n153 649,9\n28 072,2\n8 610,3\n762,5\n581 740,3\n165 306,9\n451 916,4\n3 273 355,4\nNov\n1 771 644,8\n81 518,1\n189 465,9\n2 042 628,9\n1 547,6\n6 731,4\n2 050 907,9\n13 438,5\n139 370,8\n19 973,5\n10 489,1\n339,6\n612 977,2\n170 944,8\n387 949,1\n3 406 390,5\nDec\n1 990 867,6\n90 317,0\n234 004,4\n2 315 189,0\n2 754,1\n7 866,7\n2 325 809,8\n14 149,0\n177 214,1\n10 597,8\n15 234,4\n752,5\n750 161,5\n159 126,2\n367 037,4\n3 820 082,5\n2023\nJan\n2 270 946,6\n100 094,1\n275 805,1\n2 646 845,8\n1 676,5\n41 821,3\n2 690 343,7\n15 056,5\n196 129,5\n4 974,3\n12 291,7\n675,5\n881 874,7\n227 545,4\n413 059,5\n4 441 950,8\nFeb\n2 496 192,1\n98 177,2\n294 332,5\n2 888 701,8\n1 956,9\n11 040,2\n2 901 698,9\n15 711,7\n225 209,4\n8 092,9\n20 822,5\n3 109,0\n951 831,6\n226 933,0\n540 628,1\n4 894 037,1\nMar\n2 710 394,6\n121 937,7\n333 589,3\n3 165 921,6\n1 430,8\n6 188,7\n3 173 541,1\n16 082,6\n256 206,0\n9 639,9\n22 996,8\n3 714,6\n1 036 325,4\n554 840,9\n618 415,2\n5 691 762,4\nApr\n3 144 048,4\n159 872,5\n269 932,0\n3 573 852,9\n573,4\n9 702,2\n3 584 128,5\n1 843,4\n318 092,2\n13 321,9\n29 787,9\n6 418,8\n1 137 637,3\n214 270,9\n637 986,8\n5 943 487,7\nMay\n6 481 742,5\n169 496,7\n556 927,2\n7 208 166,4\n1 068,6\n50 511,7\n7 259 746,7\n4 659,4\n783 531,0\n78 332,6\n74 083,0\n30 583,3\n2 224 856,6\n607 438,1\n1 561 952,6\n12 625 183,4\nJun\n12 937 869,2\n240 252,2\n1 073 317,8\n14 251 439,2\n4 578,8\n432 610,2\n14 688 628,1\n4 243,6\n1 833 341,2\n39 166,6\n112 338,9\n64 321,9\n6 245 056,0\n1 390 786,2\n3 094 705,7\n27 472 588,1\nJul\n11 864 787,9\n285 723,5\n828 095,7\n12 978 607,1\n30 380,7\n380 435,8\n13 389 423,7\n2 137,4\n1 458 906,6\n87 827,2\n160 696,4\n58 256,2\n5 865 068,7\n829 382,3\n2 726 299,5\n24 577 997,9\nAug\n12 168 928,8\n353 674,2\n862 852,8\n13 385 455,8\n23 457,8\n381 525,5\n13 790 439,1\n3 182,7\n1 483 108,2\n84 841,4\n154 160,3\n56 751,6\n5 646 934,2\n701 626,2\n2 783 596,5\n24 704 640,2\nSep\n14 342 241,3\n404 040,4\n947 184,1\n15 693 465,8\n11 309,1\n114 502,6\n15 819 277,6\n2 685,5\n1 688 992,2\n82 493,4\n168 880,8\n90 032,4\n6 410 594,6\n776 997,6\n3 307 033,6\n28 346 987,7\nOct\n15 103 817,1\n439 336,7\n1 190 702,7\n16 733 856,4\n8 575,8\n147 053,3\n16 889 485,5\n3 497,2\n1 573 857,1\n84 628,9\n176 455,5\n83 441,8\n6 756 087,7\n958 746,4\n3 345 567,7\n29 871 767,9\nNov\n15 816 643,6\n534 621,6\n1 241 055,7\n17 592 320,9\n92 509,4\n133 475,4\n17 818 305,6\n4 173,2\n1 784 153,1\n92 939,9\n244 115,1\n89 997,7\n7 059 070,8\n1 046 257,0\n3 659 406,4\n31 798 418,9\nDec\n16 937 697,1\n613 283,2\n1 290 630,5\n18 841 610,7\n94 004,9\n201 484,9\n19 137 100,5\n42 811,4\n1 831 385,7\n55 157,4\n162 437,9\n138 722,6\n7 736 287,7\n1 184 706,9\n4 116 277,7\n34 404 887,7\n2024\nJan\n26 686 959,6\n746 212,0\n1 754 255,7\n29 187 427,3\n113 265,9\n169 629,6\n29 470 322,8\n7 317,9\n3 007 687,4\n114 298,0\n290 202,8\n182 727,0\n11 623 761,9\n1 949 662,4\n6 346 389,9\n52 992 370,2\nFeb\n36 944 811,1\n818 341,2\n2 810 669,8\n40 573 822,1\n177 789,1\n340 577,8\n41 092 189,0\n9 458,4\n4 421 333,7\n105 237,1\n454 842,1\n279 727,9\n16 146 119,3\n2 608 075,1\n9 345 381,2\n74 462 363,7\nMar\n53 801 105,7\n857 520,8\n4 468 346,0\n59 126 972,5\n275 444,0\n515 567,0\n59 917 983,5\n6 990,9\n6 535 789,0\n95 705,0\n506 746,6\n361 061,7\n24 968 710,0\n2 860 196,6\n12 072 131,8\n107 325 315,0\n*Apr\n35 042,5\n873,5\n2 711,3\n38 627,3\n161,4\n242,9\n39 031,6\n2,8\n4 126,0\n67,4\n358,1\n222,7\n12 859,8\n2 510,2\n9 868,8\n69 047,3\n*May\n36 571,3\n797,4\n3 283,3\n40 652,0\n82,8\n350,0\n41 084,8\n4,4\n4 422,7\n50,9\n436,0\n4,6\n15 110,7\n2 114,7\n9 806,4\n73 035,2\n*Jun\n37 665,2\n1 045,3\n3 824,5\n42 535,1\n2,1\n589,3\n43 126,4\n4,0\n4 813,9\n99,8\n450,6\n13,2\n17 940,3\n2 541,3\n8 835,0\n77 824,6\n*Jul\n40 332,2\n1 410,3\n3 894,3\n45 636,8\n68,7\n438,6\n46 144,1\n19,2\n4 842,5\n99,9\n483,0\n12,0\n18 795,9\n2 342,9\n8 708,8\n81 448,2\n*Aug\n40 849,7\n1 585,3\n3 882,8\n46 317,8\n65,6\n532,9\n46 916,3\n26,6\n4 889,9\n109,9\n602,1\n12,5\n20 035,9\n2 767,9\n10 009,9\n85 371,0\n*Sep\n66 835,5\n1 858,6\n5 872,5\n74 566,6\n99,2\n583,3\n75 249,0\n23,8\n8 701,5\n491,4\n860,8\n51,1\n34 201,4\n4 853,4\n15 791,4\n140 223,9\n*Oct\n76 868,7\n2 162,8\n7 903,0\n86 934,5\n257,1\n627,5\n87 819,1\n42,7\n9 987,1\n429,7\n1 310,2\n16,1\n39 650,6\n6 380,1\n18 134,0\n163 769,6\n*Nov\n72 575,6\n2 470,1\n7 734,9\n82 780,6\n202,6\n677,2\n83 660,4\n0,0\n8 441,5\n409,3\n568,8\n42,7\n38 968,8\n6 685,9\n16 023,6\n154 800,9\n*Dec\n76 723,8\n2 290,2\n8 197,9\n87 211,9\n205,6\n716,4\n88 133,9\n0,0\n9 510,9\n233,0\n856,2\n112,5\n39 782,4\n6 555,3\n17 199,0\n162 383,2\n2025\n*Jan\n68 409,5\n1 912,4\n7 835,3\n78 157,2\n1 164,8\n8 148,8\n87 470,8\n64 365,7\n0,0\n12 797,2\n488,2\n969,1\n40,9\n38 608,5\n6 786,8\n15 612,0\n162 773,4\n*Feb\n67 429,9\n1 989,7\n8 910,2\n78 329,8\n759,7\n7 486,5\n86 576,0\n63 840,6\n0,0\n12 512,6\n536,9\n1 154,7\n232,8\n39 664,8\n7 060,8\n13 423,4\n161 162,0\n*Mar\n72 624,4\n2 009,1\n8 581,5\n83 215,0\n248,3\n7 714,7\n91 178,1\n68 486,6\n0,0\n13 321,0\n541,7\n801,1\n52,6\n40 610,2\n7 859,2\n12 932,3\n167 296,2\n*Apr\n74 443,6\n2 224,9\n10 174,2\n86 842,8\n255,1\n10 839,6\n97 937,5\n70 754,4\n0,0\n13 415,3\n544,2\n970,0\n57,6\n41 163,7\n6 452,9\n15 388,2\n175 929,4\n*May\n78 625,7\n2 690,8\n11 316,1\n92 632,6\n709,1\n11 890,3\n105 232,0\n75 289,9\n0,0\n15 138,7\n160,1\n720,7\n129,8\n41 478,2\n7 163,7\n13 983,1\n184 006,3\n*Jun\n81 706,3\n2 509,7\n12 788,2\n97 004,2\n820,4\n13 980,0\n111 804,6\n79 877,5\n0,0\n14 145,4\n149,0\n1 209,8\n154,5\n42 450,7\n7 532,5\n14 430,8\n191 877,5\n*Jul\n81 849,8\n2 526,2\n12 815,1\n97 191,1\n820,4\n13 980,0\n111 991,4\n79 949,5\n0,0\n14 120,4\n149,0\n1 173,2\n154,5\n42 508,9\n7 493,6\n14 419,0\n192 010,2\n*Aug\n81 741,3\n2 305,2\n14 473,0\n98 519,6\n1 264,7\n12 265,2\n112 049,5\n81 435,7\n0,0\n15 170,3\n156,5\n1 358,8\n219,1\n45 558,0\n8 543,3\n16 407,7\n199 463,2\n*Sept\n81 151,4\n2 820,5\n15 030,9\n99 002,7\n1 065,9\n15 171,4\n115 240,0\n82 111,5\n0,0\n16 355,4\n143,4\n1 444,0\n72,0\n45 390,8\n8 537,4\n13 573,1\n200 756,0\n*Oct\n85 790,6\n2 916,7\n16 419,6\n105 126,9\n701,9\n14 628,2\n120 457,0\n86 902,7\n0,0\n13 853,1\n184,1\n1 666,8\n186,6\n46 041,1\n7 774,8\n12 295,0\n202 458,5\n*Nov\n86 759,2\n2 745,1\n15 787,6\n105 291,9\n502,9\n13 299,6\n119 094,4\n86 221,7\n126,1\n15 953,3\n107,1\n1 655,6\n291,7\n44 855,4\n9 054,8\n16 259,5\n207 398,0\n*Dec\n86 907,8\n4 204,8\n16 340,8\n107 453,3\n432,0\n13 268,1\n121 153,4\n87 388,9\n120,3\n17 526,4\n62,6\n1 329,8\n319,4\n43 314,2\n8 262,1\n14 369,4\n206 457,4\n2026\n*Jan\n86 844,3\n4 316,5\n17 273,6\n108 434,4\n434,9\n13 998,6\n122 867,9\n89 192,4\n118,6\n16 565,0\n60,4\n1 099,3\n332,4\n42 559,9\n8 573,5\n15 651,6\n207 828,5\n*Feb\n91 043,6\n3 724,0\n17 592,0\n112 359,6\n456,0\n14 068,8\n126 884,4\n91 587,5\n109,6\n14 543,3\n31,4\n1 674,6\n321,5\n44 196,3\n8 179,6\n14 626,2\n210 566,8\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\nZWG millions\nTOTAL\nTime Deposits\nSavings\nDemand\nGovernment \nOther Finacial \nCorporations\nCapital and \nReserves\nContigent \nLiabilities\nOther \nLiabilities\nOther \nDepository \nTotal Deposits from \nthe Public \nOther Depository \nCorporations\nDebt Securities\nForeign \nLiabilities\nRBZ\n \n \n17 \n \n \n \n \nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nGovernment\nGovernment\nEnterprises\nLoans in ZiG\nLoans in Foreign Currency\nTotal\nOther claims\nAssets\nOther Assets\nAssets\nTOTAL\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2022\nJan\n2 359,27\n \n49 206,02\n \n108 119,97\n \n10 419,90\n \n66 808,45\n \n30 774,31\n \n38 636,84\n \n-\n \n186,80\n \n801,50\n \n20,33\n \n163,02\n \n3 628,73\n \n199 495,34\n \n2 997,94\n \n53 627,76\n \n47 405,91\n \n69 989,80\n \n684 641,9\n \nFeb\n1 971,78\n \n57 553,54\n \n112 522,99\n \n14 300,66\n \n70 750,63\n \n28 703,53\n \n44 705,21\n \n-\n \n-\n \n976,55\n \n20,34\n \n158,06\n \n5 367,16\n \n215 520,37\n \n3 055,50\n \n55 099,61\n \n53 459,12\n \n70 832,47\n \n734 997,5\n \nMar\n1 541,49\n \n70 856,33\n \n130 423,48\n \n15 503,46\n \n82 662,70\n \n43 284,13\n \n44 874,23\n \n-\n \n-\n \n1 380,20\n \n19,40\n \n253,42\n \n6 240,94\n \n258 715,05\n \n3 092,69\n \n65 660,61\n \n58 874,69\n \n76 938,87\n \n860 321,7\n \nApr\n1 939,64\n \n70 204,43\n \n144 168,02\n \n23 452,88\n \n117 033,42\n \n26 628,79\n \n57 772,47\n \n-\n \n-\n \n722,54\n \n37,54\n \n252,44\n \n6 858,06\n \n305 476,79\n \n4 348,46\n \n53 372,28\n \n62 788,55\n \n71 414,75\n \n946 471,1\n \nMay\n2 397,94\n \n131 996,38\n \n211 837,59\n \n31 586,61\n \n190 366,81\n \n61 757,62\n \n64 373,91\n \n-\n \n154,99\n \n1 559,14\n \n41,28\n \n289,00\n \n16 193,81\n \n398 048,90\n \n4 712,74\n \n134 993,54\n \n94 851,60\n \n111 543,84\n \n1 456 705,7\n \nJun\n2 263,18\n \n127 839,16\n \n234 109,43\n \n40 937,28\n \n219 607,39\n \n63 631,76\n \n83 690,44\n \n-\n \n653,97\n \n2 159,12\n \n61,20\n \n226,29\n \n13 888,60\n \n478 163,38\n \n8 954,46\n \n169 511,81\n \n110 528,09\n \n168 440,54\n \n1 724 666,1\n \nJul\n1 578,47\n \n147 217,74\n \n284 912,89\n \n34 334,13\n \n202 815,28\n \n41 246,78\n \n86 971,63\n \n-\n \n394,34\n \n1 852,14\n \n100,65\n \n349,68\n \n22 516,21\n \n556 692,12\n \n9 737,92\n \n144 090,18\n \n129 869,55\n \n192 524,32\n \n1 857 204,0\n \nAug\n1 630,70\n \n247 190,46\n \n377 078,80\n \n64 650,96\n \n273 181,97\n \n29 186,59\n \n95 346,12\n \n-\n \n330,12\n \n3 556,96\n \n113,50\n \n287,14\n \n26 564,57\n \n681 253,30\n \n11 493,92\n \n167 029,36\n \n238 442,98\n \n194 745,11\n \n2 412 082,6\n \nSep\n1 791,71\n \n270 594,59\n \n465 301,31\n \n68 020,95\n \n370 323,69\n \n18 184,96\n \n134 414,53\n \n-\n \n267,40\n \n4 916,56\n \n115,11\n \n306,33\n \n21 773,50\n \n806 774,24\n \n12 680,89\n \n146 133,14\n \n215 417,68\n \n219 933,24\n \n2 756 949,8\n \nOct\n1 704,79\n \n281 204,64\n \n480 106,49\n \n94 573,08\n \n343 440,15\n \n22 895,35\n \n136 939,74\n \n-\n \n204,69\n \n2 201,55\n \n116,48\n \n341,96\n \n22 935,50\n \n852 069,39\n \n15 525,65\n \n165 306,91\n \n232 188,99\n \n245 924,22\n \n2 897 679,6\n \nNov\n1 644,95\n \n259 109,18\n \n533 438,97\n \n101 870,32\n \n299 715,01\n \n17 089,04\n \n180 534,44\n \n-\n \n141,97\n \n2 292,28\n \n119,53\n \n303,55\n \n22 178,73\n \n960 814,77\n \n15 450,39\n \n170 944,78\n \n196 338,19\n \n250 551,19\n \n3 012 537,3\n \nDec\n1 778,71\n \n263 863,65\n \n603 136,26\n \n110 935,77\n \n299 087,30\n \n7 965,37\n \n266 725,41\n \n-\n \n79,26\n \n3 887,78\n \n114,42\n \n282,61\n \n30 272,25\n \n1 066 654,12\n \n16 130,63\n \n159 126,16\n \n189 560,01\n \n344 235,10\n \n3 363 834,8\n \n2023\nJan\n2 391,61\n \n340 953,56\n \n654 740,29\n \n143 455,70\n \n335 380,17\n \n(1 443,59)\n \n301 026,07\n \n-\n \n105,97\n \n4 873,87\n \n228,45\n \n251,24\n \n44 113,17\n \n1 307 512,98\n \n17 767,70\n \n227 545,42\n \n204 830,78\n \n374 080,77\n \n3 957 814,2\n \nFeb\n1 470,56\n \n366 544,71\n \n691 937,49\n \n71 097,36\n \n452 795,43\n \n21 074,53\n \n306 913,92\n \n-\n \n50,02\n \n1 524,98\n \n318,96\n \n197,44\n \n44 691,50\n \n1 481 851,05\n \n18 037,18\n \n226 932,96\n \n224 983,29\n \n411 002,80\n \n4 321 424,2\n \nMar\n1 771,98\n \n344 570,46\n \n755 463,34\n \n103 284,07\n \n478 333,21\n \n41 928,66\n \n330 669,68\n \n-\n \n-\n \n3 884,11\n \n432,22\n \n149,78\n \n48 725,38\n \n1 679 284,89\n \n28 439,56\n \n554 840,85\n \n254 605,57\n \n438 790,17\n \n5 065 173,9\n \nApr\n1 631,24\n \n388 822,83\n \n903 029,49\n \n144 252,31\n \n555 886,92\n \n32 206,95\n \n361 846,09\n \n-\n \n-\n \n8 716,45\n \n559,82\n \n99,28\n \n54 058,39\n \n1 722 384,40\n \n28 899,91\n \n214 270,92\n \n321 765,39\n \n476 263,19\n \n5 214 693,6\n \nMay\n1 010,26\n \n907 818,70\n \n1 932 225,57\n \n281 052,93\n \n1 351 116,97\n \n84 147,32\n \n570 367,60\n \n-\n \n-\n \n8 974,78\n \n4 599,15\n \n80,34\n \n112 188,06\n \n3 844 133,80\n \n65 696,39\n \n607 438,10\n \n669 908,72\n \n758 154,17\n \n11 198 912,9\n \nJun\n1 762,11\n \n1 979 000,71\n \n4 218 755,04\n \n444 538,09\n \n2 584 596,63\n \n350 042,51\n \n865 465,55\n \n-\n \n-\n \n221,09\n \n10 133,46\n \n8 052,34\n \n260 946,26\n \n8 487 837,63\n \n92 224,26\n \n1 390 786,24\n \n1 304 228,92\n \n2 222 499,38\n \n24 221 090,2\n \nJul\n1 305,13\n \n1 428 604,02\n \n3 898 282,53\n \n359 151,15\n \n2 646 743,26\n \n337 541,82\n \n1 133 463,14\n \n-\n \n-\n \n153,30\n \n7 368,09\n \n68,07\n \n208 253,70\n \n6 917 007,30\n \n129 308,58\n \n829 382,28\n \n1 155 945,57\n \n2 438 538,20\n \n21 491 116,1\n \nAug\n1 664,09\n \n1 370 651,81\n \n4 309 693,74\n \n391 792,23\n \n2 693 989,06\n \n208 098,88\n \n1 084 784,90\n \n-\n \n-\n \n138,30\n \n7 469,95\n \n75,80\n \n205 341,47\n \n6 863 348,14\n \n127 816,16\n \n701 626,16\n \n1 081 800,09\n \n2 446 465,02\n \n21 494 755,8\n \nSep\n1 503,56\n \n1 763 364,33\n \n4 914 305,55\n \n517 813,92\n \n2 760 807,78\n \n247 094,60\n \n1 204 684,14\n \n-\n \n-\n \n9,75\n \n9 935,82\n \n92,05\n \n219 878,94\n \n8 245 053,80\n \n151 685,43\n \n776 997,57\n \n1 312 147,78\n \n2 668 520,81\n \n24 793 895,8\n \nOct\n1 977,18\n \n2 059 471,85\n \n5 625 069,70\n \n562 790,91\n \n2 202 475,21\n \n175 235,94\n \n1 172 130,22\n \n-\n \n-\n \n0,03\n \n10 816,83\n \n98,06\n \n237 525,73\n \n8 864 363,09\n \n153 534,70\n \n958 746,42\n \n1 351 846,54\n \n2 767 099,33\n \n26 143 181,7\n \nNov\n2 295,18\n \n2 278 921,91\n \n5 913 094,15\n \n568 556,41\n \n2 451 981,00\n \n180 229,25\n \n1 337 040,40\n \n-\n \n-\n \n0,03\n \n10 921,42\n \n59,77\n \n238 702,30\n \n9 040 518,08\n \n158 702,11\n \n1 046 256,98\n \n1 702 370,26\n \n2 868 031,98\n \n27 797 681,2\n \nDec\n2 947,49\n \n2 536 437,97\n \n5 489 443,24\n \n657 432,63\n \n2 268 702,96\n \n155 742,88\n \n2 420 663,39\n \n-\n \n-\n \n0,03\n \n12 324,59\n \n73,45\n \n248 699,79\n \n9 507 281,46\n \n255 007,08\n \n1 184 706,91\n \n1 748 495,98\n \n3 349 062,31\n \n29 837 022,2\n \n2024\nJan\n2 536,36\n \n4 749 173,95\n \n8 535 153,83\n \n940 210,80\n \n3 564 879,01\n \n285 807,60\n \n3 972 600,87\n \n-\n \n-\n \n0,03\n \n17 912,41\n \n198,80\n \n374 088,29\n \n14 957 169,30\n \n312 516,30\n \n1 949 662,45\n \n2 737 500,88\n \n4 289 981,53\n \n46 689 392,4\n \nFeb\n2 519,25\n \n6 564 463,71\n \n11 709 703,62\n \n1 772 649,65\n \n4 708 270,62\n \n153 450,01\n \n5 911 393,45\n \n-\n \n-\n \n0,03\n \n26 073,06\n \n232,00\n \n488 602,76\n \n22 234 523,09\n \n378 975,16\n \n2 608 075,14\n \n3 125 793,33\n \n5 812 047,28\n \n65 496 772,2\n \nMar\n2 435,72\n \n8 601 285,46\n \n15 501 059,95\n \n2 213 233,27\n \n6 701 169,42\n \n775 336,87\n \n8 098 495,31\n \n-\n \n-\n \n0,03\n \n47 609,35\n \n143,35\n \n729 484,92\n \n34 077 197,02\n \n597 886,20\n \n2 860 196,61\n \n4 317 386,46\n \n8 974 860,63\n \n93 497 780,6\n \nApr\n5,89\n \n4 141,51\n \n9 980,68\n \n1 414,28\n \n5 461,70\n \n287,09\n \n5 206,08\n \n-\n \n-\n \n0,00\n \n31,18\n \n88,00\n \n440,49\n \n20 170,86\n \n246,21\n \n2 510,15\n \n5 472,97\n \n4 360,99\n \n59 818,1\n \nMay\n10,60\n \n3 583,02\n \n11 575,45\n \n1 506,01\n \n6 092,37\n \n382,87\n \n5 420,56\n \n-\n \n-\n \n0,00\n \n29,63\n \n1,37\n \n433,36\n \n21 315,87\n \n348,50\n \n2 114,73\n \n6 339,55\n \n4 613,87\n \n63 767,8\n \nJun\n8,01\n \n4 111,49\n \n11 498,97\n \n1 627,32\n \n5 775,34\n \n298,05\n \n6 080,69\n \n-\n \n-\n \n7,23\n \n24,70\n \n1,49\n \n446,45\n \n22 801,09\n \n345,72\n \n2 541,32\n \n6 558,03\n \n5 419,46\n \n67 545,3\n \nJul\n5,05\n \n4 943,82\n \n10 426,18\n \n1 342,47\n \n5 743,94\n \n351,44\n \n6 988,99\n \n-\n \n0,00\n \n5,21\n \n25,13\n \n0,16\n \n432,35\n \n24 895,03\n \n348,09\n \n2 342,85\n \n6 539,59\n \n6 244,23\n \n70 634,5\n \nAug\n5,26\n \n5 703,86\n \n12 540,81\n \n1 453,04\n \n4 411,38\n \n205,93\n \n6 149,38\n \n-\n \n-\n \n2,43\n \n126,05\n \n0,19\n \n378,05\n \n25 591,15\n \n542,15\n \n2 767,89\n \n7 004,36\n \n6 832,60\n \n73 714,5\n \nSep\n6,82\n \n9 465,31\n \n20 161,22\n \n2 742,22\n \n7 903,81\n \n340,45\n \n10 295,58\n \n-\n \n-\n \n0,00\n \n244,94\n \n0,33\n \n600,93\n \n43 094,11\n \n979,13\n \n4 853,44\n \n11 326,85\n \n9 785,35\n \n121 800,5\n \nOct\n39,65\n \n12 315,40\n \n27 597,64\n \n3 670,13\n \n7 120,62\n \n129,14\n \n11 256,45\n \n-\n \n-\n \n0,00\n \n239,01\n \n0,08\n \n679,62\n \n49 545,16\n \n1 042,81\n \n6 380,10\n \n11 454,83\n \n11 116,57\n \n142 587,2\n \nNov\n58,26\n \n10 111,62\n \n27 498,54\n \n3 102,17\n \n5 626,08\n \n117,33\n \n9 757,48\n \n-\n \n0,00\n \n0,00\n \n287,55\n \n2 326,36\n \n572,57\n \n45 782,99\n \n1 064,73\n \n6 685,94\n \n11 362,33\n \n10 783,91\n \n135 137,8\n \nDec\n64,89\n \n8 774,50\n \n29 312,78\n \n3 217,87\n \n7 673,17\n \n287,57\n \n10 942,77\n \n-\n \n0,00\n \n8,29\n \n54,88\n \n0,57\n \n549,66\n \n46 926,14\n \n1 073,63\n \n6 555,30\n \n13 399,70\n \n11 326,46\n \n140 168,2\n \n2025\nJan\n55,47\n \n11 470,10\n \n27 587,58\n \n2 805,14\n \n5 383,93\n \n896,67\n \n12 362,23\n \n-\n \n-\n \n807,94\n \n342,87\n \n-\n \n201,82\n \n6 018,68\n \n38 456,08\n \n44 474,76\n \n4 490,04\n \n6 786,76\n \n7 296,77\n \n14 700,77\n \n139 662,8\n \nFeb\n60,09\n \n10 394,10\n \n26 074,71\n \n2 500,83\n \n7 466,49\n \n879,05\n \n11 985,91\n \n-\n \n-\n \n1 227,40\n \n525,19\n \n-\n \n210,91\n \n5 135,14\n \n39 602,20\n \n44 737,33\n \n4 572,78\n \n7 060,84\n \n6 529,15\n \n14 603,01\n \n138 827,8\n \nMar\n79,63\n \n7 880,54\n \n27 417,58\n \n2 717,51\n \n11 623,76\n \n820,11\n \n12 300,30\n \n-\n \n-\n \n1 342,02\n \n509,01\n \n-\n \n196,72\n \n4 699,08\n \n40 942,54\n \n45 641,63\n \n4 354,50\n \n7 859,25\n \n6 540,97\n \n15 243,80\n \n144 527,3\n \nApr\n87,99\n \n8 108,02\n \n30 664,80\n \n2 649,20\n \n12 068,34\n \n413,80\n \n12 241,98\n \n-\n \n-\n \n1 095,15\n \n478,00\n \n-\n \n177,77\n \n4 854,99\n \n44 593,50\n \n49 448,49\n \n4 042,90\n \n6 452,91\n \n9 497,37\n \n15 304,56\n \n152 731,3\n \nMay\n133,33\n \n7 539,98\n \n31 081,99\n \n2 649,42\n \n16 140,56\n \n419,60\n \n12 259,88\n \n-\n \n-\n \n953,79\n \n469,51\n \n-\n \n151,74\n \n5 278,01\n \n46 383,60\n \n51 661,61\n \n3 991,35\n \n7 163,66\n \n9 319,35\n \n15 249,33\n \n159 185,1\n \nJun\n181,74\n \n8 374,10\n \n32 527,57\n \n5 410,98\n \n14 549,70\n \n119,42\n \n13 604,07\n \n-\n \n-\n \n992,17\n \n508,81\n \n-\n \n141,15\n \n5 228,09\n \n47 537,52\n \n52 765,60\n \n6 477,32\n \n7 532,53\n \n8 140,55\n \n15 060,65\n \n166 386,4\n \nJul\n183,05\n \n8 394,26\n \n32 530,27\n \n5 422,55\n \n14 534,13\n \n119,42\n \n13 602,14\n \n-\n \n-\n \n992,17\n \n508,81\n \n-\n \n141,15\n \n5 228,09\n \n47 619,44\n \n52 847,52\n \n6 442,57\n \n7 493,64\n \n8 217,25\n \n15 090,15\n \n166 519,1\n \nAug\n193,19\n \n13 295,37\n \n33 500,18\n \n4 346,93\n \n8 753,41\n \n609,59\n \n14 232,02\n \n-\n \n-\n \n583,16\n \n540,44\n \n21,46\n \n129,27\n \n6 419,77\n \n47 719,81\n \n54 139,58\n \n7 481,64\n \n8 543,31\n \n9 652,13\n \n15 411,88\n \n171 433,6\n \nSep\n201,68\n \n13 950,40\n \n32 362,47\n \n3 553,93\n \n11 188,77\n \n921,94\n \n13 421,60\n \n-\n \n-\n \n757,44\n \n561,95\n \n18,84\n \n110,22\n \n6 020,45\n \n49 450,81\n \n55 471,26\n \n5 730,80\n \n8 537,36\n \n10 340,98\n \n15 804,22\n \n172 933,8\n \nOct\n204,51\n \n12 507,21\n \n32 947,48\n \n4 526,89\n \n11 385,81\n \n910,64\n \n14 013,13\n \n-\n \n-\n \n655,59\n \n539,19\n \n23,48\n \n267,06\n \n6 236,10\n \n51 566,50\n \n57 802,60\n \n4 997,85\n \n7 774,84\n \n9 423,21\n \n16 097,87\n \n174 077,4\n \nNov\n263,56\n \n12 673,29\n \n33 851,53\n \n5 484,35\n \n10 816,26\n \n828,03\n \n14 055,20\n \n-\n \n-\n \n649,51\n \n515,30\n \n23,74\n \n327,36\n \n5 880,27\n \n53 183,11\n \n59 063,39\n \n5 737,74\n \n9 054,80\n \n9 275,53\n \n15 949,32\n \n178 568,9\n \nDec\n309,46\n \n13 291,25\n \n36 167,66\n \n3 188,93\n \n10 104,59\n \n820,00\n \n15 607,97\n \n-\n \n-\n \n1 469,05\n \n453,93\n \n20,77\n \n412,11\n \n5 956,99\n \n53 287,33\n \n59 244,32\n \n4 666,34\n \n8 262,05\n \n8 562,83\n \n17 160,25\n \n179 741,5\n \n2026\nJan\n311,75\n \n18 070,79\n \n33 083,61\n \n4 251,68\n \n9 737,03\n \n703,48\n \n15 231,53\n \n-\n \n-\n \n1 542,21\n \n429,79\n \n23,29\n \n428,07\n \n5 548,70\n \n53 453,83\n \n59 002,53\n \n4 727,54\n \n8 573,50\n \n9 234,32\n \n17 001,46\n \n182 352,6\n \nFeb\n317,74\n \n16 635,45\n \n34 876,58\n \n4 744,68\n \n10 065,84\n \n785,88\n \n15 098,19\n \n-\n \n-\n \n907,93\n \n12,67\n \n23,76\n \n901,37\n \n5 626,16\n \n54 912,59\n \n60 538,75\n \n4 371,98\n \n8 179,56\n \n9 180,95\n \n17 530,07\n \n184 171,4\n \nSource: Reserve Bank of Zimbabwe, 2026\nNotes\ni.Government securities include treasuary bills and bonds\nii.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\niii.Includes households, other financial corporations. \nStatistics are denominated in ZiG\nTABLE 5.1: COMMERCIAL BANKS -ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\nOther Institutional Units\n \n \n18 \n \n \n \nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nOf wich FCA\nDebt Securities Foreign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2022\nJan\n346 619,5\n43 438,8\n31 158,1\n421 216,4\n2 962,5\n3 864,8\n428 043,7\n2 995,6\n14 406,9\n2 688,6\n1 043,2\n230,5\n122 752,1\n53 627,8\n58 853,6\n684 641,9\nFeb\n358 979,4\n51 510,7\n38 313,7\n448 803,8\n3 229,3\n4 248,7\n456 281,8\n3 834,1\n16 267,7\n2 120,4\n1 338,1\n226,8\n130 981,3\n55 099,6\n68 847,8\n734 997,5\nMar\n422 934,6\n58 283,5\n42 258,5\n523 476,6\n3 062,2\n5 171,3\n531 710,2\n3 850,2\n18 374,8\n2 137,9\n2 779,1\n810,6\n149 781,8\n65 660,6\n85 216,5\n860 321,7\nApr\n479 558,7\n74 880,3\n40 491,0\n594 930,0\n6 377,5\n7 486,7\n608 794,2\n3 792,3\n21 445,6\n2 173,0\n3 173,0\n486,8\n149 610,1\n53 372,3\n103 623,7\n946 471,1\nMay\n666 937,8\n137 419,9\n55 389,8\n859 747,5\n7 310,9\n7 249,8\n874 308,3\n5 769,3\n39 105,1\n2 383,3\n2 207,5\n321,8\n214 978,6\n134 993,5\n182 638,3\n1 456 705,7\nJun\n773 692,7\n154 956,9\n63 511,7\n992 161,3\n4 597,1\n10 018,0\n1 006 776,4\n6 743,2\n42 701,8\n2 898,5\n3 389,3\n345,2\n307 341,8\n169 511,8\n184 958,1\n1 724 666,1\nJul\n810 906,6\n173 134,0\n74 324,5\n1 058 365,1\n717,0\n9 153,8\n1 068 235,9\n7 994,5\n54 168,7\n2 814,9\n2 948,9\n1 339,1\n355 597,9\n144 090,2\n220 013,9\n1 857 204,0\nAug\n1 100 922,1\n219 798,6\n110 595,1\n1 431 315,7\n790,2\n7 675,2\n1 439 781,1\n12 484,6\n64 160,3\n3 230,7\n2 791,8\n555,2\n421 880,4\n167 029,4\n300 169,0\n2 412 082,6\nSep\n1 328 584,6\n256 980,2\n127 051,1\n1 712 616,0\n1 482,9\n8 473,0\n1 722 571,9\n13 789,2\n81 182,4\n3 720,2\n5 632,9\n587,2\n465 063,9\n146 133,1\n318 269,0\n2 756 949,8\nOct\n1 365 908,5\n205 688,8\n128 186,9\n1 699 784,2\n813,8\n6 314,3\n1 706 912,3\n14 933,2\n83 998,0\n28 072,2\n4 282,4\n762,5\n486 396,6\n165 306,9\n407 015,5\n2 897 679,6\nNov\n1 481 503,5\n243 239,9\n146 530,0\n1 871 273,4\n291,3\n6 366,6\n1 877 931,3\n12 665,1\n67 318,9\n19 973,5\n5 349,1\n339,6\n514 200,0\n170 944,8\n343 815,1\n3 012 537,3\nDec\n1 697 008,7\n235 271,2\n181 090,6\n2 113 370,5\n1 514,4\n7 399,5\n2 122 284,4\n13 296,8\n106 071,5\n10 597,8\n9 610,4\n752,5\n621 113,3\n159 126,2\n320 981,8\n3 363 834,8\n2023\nJan\n2 139 458,0\n78 197,7\n215 537,0\n2 433 192,7\n214,3\n41 333,8\n2 474 740,8\n12 923,7\n123 605,0\n4 974,3\n5 669,1\n675,5\n723 452,2\n227 545,4\n384 228,1\n3 957 814,2\nFeb\n1 997 073,4\n398 595,8\n230 549,9\n2 626 219,1\n303,5\n10 655,7\n2 637 178,4\n14 443,3\n140 484,9\n8 092,9\n13 273,6\n3 109,0\n780 290,7\n226 933,0\n497 618,5\n4 321 424,2\nMar\n2 218 678,7\n384 245,5\n262 119,8\n2 865 044,1\n1 272,8\n5 953,0\n2 872 269,9\n15 181,9\n166 322,5\n9 639,9\n15 494,1\n3 714,6\n846 479,9\n554 840,9\n581 230,2\n5 065 173,9\nApr\n2 646 522,9\n382 678,9\n197 662,2\n3 226 864,0\n173,4\n9 463,7\n3 236 501,1\n1 115,5\n201 674,1\n13 321,9\n21 331,0\n6 418,8\n935 402,2\n214 270,9\n584 658,1\n5 214 693,6\nMay\n5 196 712,7\n969 812,4\n435 965,9\n6 602 490,9\n514,9\n50 270,4\n6 653 276,3\n1 287,6\n493 894,8\n78 332,6\n65 967,5\n30 583,3\n1 815 309,9\n607 438,1\n1 452 822,8\n11 198 912,9\nJun\n10 038 744,6\n2 287 818,9\n789 112,9\n13 115 676,4\n1 468,6\n432 367,0\n13 549 512,0\n1 177,5\n1 201 797,0\n39 166,6\n101 465,7\n64 321,9\n5 042 026,4\n1 390 786,2\n2 830 837,1\n24 221 090,2\nJul\n9 592 825,0\n1 787 488,9\n592 115,4\n11 972 429,2\n9 138,5\n380 190,7\n12 361 758,4\n512,4\n847 658,7\n87 827,2\n146 299,0\n58 256,2\n4 649 856,9\n829 382,3\n2 509 565,1\n21 491 116,1\nAug\n9 698 801,3\n1 920 804,2\n622 360,9\n12 241 966,5\n1 479,8\n381 277,2\n12 624 723,5\n863,9\n865 945,4\n84 841,4\n141 305,4\n56 751,6\n4 465 099,7\n701 626,2\n2 553 598,8\n21 494 755,8\nSep\n13 388 822,1\n319 686,0\n695 555,0\n14 404 063,1\n4 754,8\n114 251,5\n14 523 069,4\n504,3\n1 036 635,6\n82 493,4\n152 779,3\n90 032,4\n5 159 376,7\n776 997,6\n2 972 007,2\n24 793 895,8\nOct\n14 087 303,5\n312 655,9\n827 902,5\n15 227 861,9\n1 692,7\n146 801,2\n15 376 355,8\n522,9\n1 106 440,5\n84 628,9\n159 670,3\n83 441,8\n5 427 255,6\n958 746,4\n2 946 119,7\n26 143 181,7\nNov\n14 816 672,7\n306 014,4\n882 972,1\n16 005 659,2\n5 789,4\n133 219,7\n16 144 668,4\n432,3\n1 259 039,0\n92 939,9\n227 935,0\n89 997,7\n5 701 702,0\n1 046 257,0\n3 234 709,9\n27 797 681,2\nDec\n15 726 758,6\n369 405,4\n808 422,2\n16 904 586,1\n6 923,3\n201 225,8\n17 112 735,3\n36 808,0\n1 314 667,6\n55 157,4\n153 701,6\n138 722,6\n6 264 918,7\n1 184 706,9\n3 575 604,1\n29 837 022,2\n2024\nJan\n24 824 665,8\n662 989,2\n1 191 915,8\n26 679 570,7\n25 881,9\n169 368,5\n26 874 821,1\n168,2\n2 102 990,2\n114 298,0\n279 174,1\n182 727,0\n9 532 603,9\n1 949 662,4\n5 652 947,5\n46 689 392,4\nFeb\n34 081 030,9\n911 544,4\n1 983 870,0\n36 976 445,3\n7 146,9\n340 314,0\n37 323 906,2\n151,1\n3 106 432,1\n105 237,1\n449 118,3\n279 727,9\n13 237 287,6\n2 608 075,1\n8 386 836,6\n65 496 772,2\nMar\n48 600 783,9\n1 434 256,6\n3 333 658,9\n53 368 699,4\n104 688,2\n515 299,7\n53 988 687,3\n0,0\n4 654 985,7\n95 705,0\n500 611,7\n361 061,7\n20 221 996,6\n2 860 196,6\n10 814 535,9\n93 497 780,6\nApr\n31 998,9\n843,3\n1 944,9\n34 787,2\n92,9\n242,8\n35 122,9\n0,0\n2 867,4\n67,4\n358,1\n222,7\n10 281,8\n2 510,2\n8 387,7\n59 818,1\nMay\n33 721,9\n910,6\n2 242,3\n36 874,7\n79,3\n349,9\n37 303,9\n0,0\n3 056,1\n50,9\n436,0\n4,6\n12 101,9\n2 114,7\n8 699,7\n63 767,8\nJun\n34 597,9\n958,5\n2 874,9\n38 431,3\n2,1\n589,2\n39 022,6\n0,0\n3 399,1\n99,8\n442,6\n13,2\n14 415,1\n2 541,3\n7 611,6\n67 545,3\nJul\n36 817,5\n1 137,8\n2 766,8\n40 722,1\n68,7\n438,6\n41 229,4\n0,0\n3 923,2\n99,9\n469,8\n12,0\n15 126,4\n2 342,9\n7 430,9\n70 634,5\nAug\n37 597,8\n872,1\n2 514,1\n40 984,0\n65,6\n532,9\n41 582,4\n0,0\n4 039,1\n109,9\n586,0\n12,5\n16 106,1\n2 767,9\n8 510,5\n73 714,5\nSep\n59 919,0\n2 378,4\n3 920,7\n66 218,0\n76,5\n579,2\n66 873,8\n0,0\n7 142,2\n491,4\n844,5\n51,1\n27 911,3\n4 853,4\n13 632,7\n121 800,5\nOct\n70 016,8\n1 657,3\n5 193,9\n76 867,9\n170,2\n621,4\n77 659,6\n0,0\n8 524,2\n429,7\n1 248,8\n16,1\n32 737,1\n6 380,1\n15 591,5\n142 587,2\nNov\n66 321,7\n1 869,1\n5 320,9\n73 511,7\n156,7\n677,1\n74 345,6\n0,0\n7 213,9\n409,3\n558,7\n42,7\n32 040,3\n6 685,9\n13 841,4\n135 137,8\nDec\n69 146,0\n1 993,7\n5 095,0\n76 234,8\n134,4\n716,3\n77 085,5\n0,0\n8 204,4\n233,0\n588,3\n112,5\n32 891,4\n6 555,3\n14 497,8\n140 168,2\n2025\nJan\n61 330,5\n1 857,1\n5 138,7\n68 326,3\n1 164,8\n7 498,8\n76 990,0\n57 444,7\n0,0\n11 140,1\n488,2\n591,7\n40,9\n31 241,2\n6 786,8\n12 384,1\n139 662,8\nFeb\n60 122,2\n1 926,9\n5 792,8\n67 841,9\n759,7\n6 860,8\n75 462,5\n56 543,4\n0,0\n10 832,8\n536,9\n948,1\n232,8\n32 118,9\n7 060,8\n11 635,0\n138 827,8\nMar\n64 498,3\n1 941,3\n5 810,8\n72 250,4\n248,3\n7 126,4\n79 625,1\n60 576,1\n0,0\n11 822,7\n539,3\n718,1\n52,6\n32 964,9\n7 859,2\n10 945,4\n144 527,3\nApr\n66 264,7\n2 136,9\n7 267,2\n75 668,8\n255,1\n10 251,2\n86 175,2\n62 807,1\n0,0\n11 917,1\n541,8\n870,9\n57,6\n33 473,5\n6 452,9\n13 242,4\n152 731,3\nMay\n69 556,9\n2 593,4\n8 067,9\n80 218,2\n709,1\n11 890,0\n92 817,3\n66 697,2\n0,0\n13 030,8\n157,7\n620,4\n129,8\n33 467,9\n7 163,7\n11 797,5\n159 185,1\nJun\n73 254,5\n2 441,0\n8 265,2\n83 960,7\n820,4\n13 331,3\n98 112,3\n70 999,0\n0,0\n12 314,0\n107,9\n1 123,5\n154,5\n34 375,8\n7 532,5\n12 665,7\n166 386,4\nJul\n73 398,0\n2 457,5\n8 292,0\n84 147,5\n820,4\n13 331,3\n98 299,2\n71 071,0\n0,0\n12 289,1\n107,9\n1 086,9\n154,5\n34 434,0\n7 493,6\n12 653,9\n166 519,1\nAug\n72 524,1\n2 227,6\n9 705,6\n84 457,3\n1 264,7\n11 513,5\n97 235,5\n71 384,1\n0,0\n13 105,1\n108,5\n1 251,0\n219,1\n36 895,5\n8 543,3\n14 075,6\n171 433,6\nSep\n71 148,7\n2 740,7\n10 453,3\n84 342,7\n1 065,9\n14 970,8\n100 379,3\n71 378,4\n0,0\n14 495,5\n101,1\n1 355,9\n72,0\n36 869,5\n8 537,4\n11 123,3\n172 933,8\nOct\n75 414,2\n2 831,2\n11 381,7\n89 627,2\n701,9\n14 396,3\n104 725,3\n76 497,1\n0,0\n12 553,1\n101,4\n1 578,5\n186,6\n37 599,3\n7 774,8\n9 558,4\n174 077,4\nNov\n76 316,0\n2 650,2\n10 700,9\n89 667,1\n502,9\n12 992,3\n103 162,3\n75 901,7\n0,0\n14 547,7\n48,4\n1 567,1\n291,7\n36 436,9\n9 054,8\n13 460,1\n178 568,9\nDec\n76 295,4\n4 109,6\n12 169,3\n92 574,3\n432,0\n12 915,7\n105 922,0\n76 732,0\n0,0\n16 131,9\n48,4\n1 329,8\n319,4\n35 604,1\n8 262,1\n12 123,9\n179 741,5\n2026\nJan\n76 268,1\n4 217,1\n12 985,5\n93 470,6\n434,9\n13 715,9\n107 621,4\n78 516,3\n0,0\n15 817,4\n48,4\n1 099,3\n332,4\n35 106,5\n8 573,5\n13 753,8\n182 352,6\nFeb\n80 405,9\n3 625,7\n13 091,1\n97 122,7\n456,0\n13 785,2\n111 363,8\n80 856,8\n0,0\n13 428,3\n19,5\n1 674,6\n321,5\n36 590,0\n8 179,6\n12 594,1\n184 171,4\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\nZWG millions\n \n \n19 \n \n \n \nForeign\nOther \nContigent\nEnd of\nNotes\nClaims\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nNon Financial \nTOTAL\n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nMortgages\nGovernment\nPublic Enterprise\nOther Assets\nAssets\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nLoans in ZiG\nLoans in Foreign Currency \nTotal\n2022\nJan\n324,6\n \n3504,3\n8 506,5\n \n2680,3\n2 631,0\n \n-\n \n1 110,8\n \n2,4\n-\n \n1 487,3\n \n2 967,6\n \n-\n \n35 913,5\n \n6693,8\n14 008,7\n \n79 830,9\n \nFeb\n411,5\n \n4021,5\n9 763,6\n \n3069,7\n5 678,0\n \n-\n \n4 048,9\n \n1,6\n-\n \n1 465,4\n \n3 241,1\n \n-\n \n39 977,5\n \n4511,5\n13 964,4\n \n90 154,6\n \nMar\n354,3\n \n4413,6\n11 882,6\n \n3691,3\n4 932,3\n \n-\n \n5 235,0\n \n0,9\n-\n \n1 590,0\n \n3 888,3\n \n-\n \n42 741,3\n \n9086,6\n15 421,2\n \n103 237,4\n \nApr\n546,4\n \n3054,1\n15 585,8\n \n4857,7\n5 768,6\n \n-\n \n5 714,4\n \n0,2\n-\n \n1 861,4\n \n4 143,7\n \n-\n \n48 582,4\n \n9654,2\n16 999,2\n \n116 768,1\n \nMay\n639,5\n \n8326,7\n23 817,6\n \n4251,9\n16 001,6\n \n-\n \n6 150,9\n \n0,0\n-\n \n1 486,3\n \n8 474,8\n \n-\n \n74 864,0\n \n14793,9\n17 091,2\n \n175 898,5\n \nJun\n418,5\n \n8464,3\n32 497,6\n \n3807,5\n21 184,8\n \n-\n \n2 639,3\n \n0,0\n-\n \n1 340,0\n \n10 851,1\n \n-\n \n85 145,9\n \n18155,8\n35 128,1\n \n219 633,0\n \nJul\n700,4\n \n9914,6\n30 660,3\n \n4983,4\n24 902,9\n \n-\n \n4 077,6\n \n0,0\n-\n \n1 411,5\n \n13 722,1\n \n-\n \n98 066,0\n \n9998,6\n45 127,9\n \n243 565,1\n \nAug\n863,8\n \n14422,1\n33 703,2\n \n4483,0\n34 971,8\n \n-\n \n4 379,8\n \n0,0\n-\n \n2 106,6\n \n16 515,4\n \n-\n \n115 491,9\n \n8745,3\n45 694,0\n \n281 377,1\n \nSep\n1 086,8\n \n14998,2\n37 911,3\n \n7470,1\n45 094,8\n \n-\n \n8 440,8\n \n0,0\n-\n \n1 302,8\n \n17 996,8\n \n-\n \n129 242,7\n \n11630,7\n60 830,4\n \n336 005,2\n \nOct\n1 158,3\n \n14768,7\n44 296,5\n \n10013,7\n44 664,1\n \n-\n \n14 109,9\n \n0,0\n-\n \n1 142,4\n \n16 817,7\n \n-\n \n123 793,8\n \n30036,4\n47 678,2\n \n348 479,7\n \nNov\n1 449,3\n \n22456,9\n41 398,0\n \n9771,8\n41 317,6\n \n-\n \n17 572,6\n \n0,0\n-\n \n2 085,3\n \n16 785,8\n \n-\n \n136 029,9\n \n30694,0\n46 275,8\n \n365 836,9\n \nDec\n1 470,7\n \n23012,7\n48 533,8\n \n8913,7\n50 229,0\n \n-\n \n21 411,1\n \n0,0\n19 993,4\n \n2 176,2\n \n17 693,7\n \n-\n \n119 322,3\n \n39279,1\n69 102,5\n \n421 138,1\n \n2023\nJan\n2 402,7\n \n32405,1\n47 062,6\n \n8410,8\n50 364,6\n \n-\n \n17 976,2\n \n0,0\n23 668,5\n \n2 406,3\n \n18 311,0\n \n-\n \n132 757,4\n \n41367,4\n69 570,1\n \n446 702,8\n \nFeb\n234,9\n \n59685,4\n50 103,0\n \n9568,6\n62 701,4\n \n889,9\n \n24 809,7\n \n0,0\n26 667,1\n \n4 451,9\n \n21 629,1\n \n-\n \n146 798,4\n \n50093,6\n70 987,9\n \n528 620,9\n \nMar\n214,6\n \n72311,9\n57 399,6\n \n9196,8\n51 300,9\n \n-\n \n28 841,5\n \n0,0\n24 689,0\n \n5 503,9\n \n19 118,6\n \n-\n \n170 376,6\n \n54524,7\n84 489,1\n \n577 967,3\n \nApr\n184,1\n \n61341,6\n63 129,5\n \n16343,2\n61 444,0\n \n-\n \n28 727,0\n \n0,0\n28 119,0\n \n5 989,2\n \n27 619,9\n \n-\n \n205 412,2\n \n81442,9\n86 571,2\n \n666 323,9\n \nMay\n78,1\n \n125685,1\n100 808,7\n \n22707,0\n195 646,6\n \n-\n \n81 344,3\n \n0,0\n69 908,9\n \n6 246,8\n \n53 180,7\n \n-\n \n440 462,4\n \n103176,1\n116 103,7\n \n1 315 348,2\n \nJun\n176,6\n \n227001,8\n172 666,5\n \n25998,2\n452 772,6\n \n40 326,7\n \n115 193,3\n \n0,0\n196 310,3\n \n4 209,5\n \n121 677,5\n \n-\n \n870 075,1\n \n230604,4\n544 587,8\n \n3 001 600,3\n \nJul\n162,7\n \n132017,2\n220 995,0\n \n20797,2\n459 668,2\n \n32 010,8\n \n105 308,6\n \n0,0\n154 472,7\n \n13 777,8\n \n153 638,5\n \n-\n \n697 177,8\n \n209734,6\n612 937,8\n \n2 812 698,9\n \nAug\n611,0\n \n105296,6\n309 821,7\n \n55744,7\n475 838,3\n \n37 447,1\n \n102 495,2\n \n0,0\n153 578,2\n \n6 767,5\n \n135 193,3\n \n-\n \n758 439,2\n \n223114,4\n564 622,1\n \n2 928 969,2\n \nSep\n949,3\n \n193065,6\n339 269,2\n \n41680,1\n437 996,0\n \n58 554,5\n \n110 351,3\n \n0,0\n161 346,6\n \n4 522,1\n \n153 113,7\n \n-\n \n880 148,8\n \n290026,7\n565 616,4\n \n3 236 640,3\n \nOct\n403,8\n \n204713,4\n254 684,1\n \n187632,1\n440 150,3\n \n65 022,1\n \n97 046,1\n \n0,0\n176 111,9\n \n13 771,8\n \n173 523,5\n \n-\n \n829 479,5\n \n345029,3\n586 015,6\n \n3 373 583,5\n \nNov\n370,5\n \n222344,7\n387 213,2\n \n160896,0\n326 510,1\n \n50 688,3\n \n159 225,4\n \n0,0\n173 990,9\n \n28 127,2\n \n187 363,3\n \n-\n \n926 663,7\n \n395549,5\n595 811,6\n \n3 614 754,5\n \nDec\n403,7\n \n251968,8\n457 034,9\n \n261067,9\n345 348,0\n \n56 551,7\n \n185 131,1\n \n0,0\n166 902,0\n \n27 875,9\n \n222 503,1\n \n0,7\n \n973 788,6\n \n507890,9\n658 045,7\n \n4 114 512,9\n \n2024\nJan\n367,9\n \n368046,7\n524 020,9\n \n471915,0\n363 325,6\n \n40 412,9\n \n280 803,2\n \n0,0\n280 441,0\n \n45 935,9\n \n339 610,7\n \n-\n \n1 563 405,5\n \n649087,4\n742 734,0\n \n5 670 106,8\n \nFeb\n578,8\n \n637645,2\n797 581,2\n \n618074,6\n613 309,7\n \n24 680,4\n \n425 783,2\n \n0,0\n399 313,5\n \n67 900,2\n \n519 513,4\n \n-\n \n2 188 186,8\n \n904519,6\n937 957,6\n \n8 135 044,1\n \nMar\n356,6\n \n1026840,5\n1 171 941,4\n \n888362,3\n829 470,4\n \n-\n \n440 943,8\n \n0,0\n528 820,5\n \n103 276,3\n \n787 872,2\n \n-\n \n3 761 909,8\n \n1403556,4\n1 697 667,5\n \n12 641 017,5\n \nApr\n1,0\n \n564,4\n864,1\n \n693,0\n326,5\n \n67,2\n \n337,2\n \n0,0\n313,5\n \n-\n \n593,2\n \n212,7\n \n2 856,8\n \n420,1\n824,2\n \n8 074,0\n \nMay\n4,0\n \n639,2\n783,2\n \n772,6\n296,2\n \n109,6\n \n407,6\n \n0,0\n303,7\n \n-\n \n309,2\n \n19,8\n \n2 946,5\n \n712,1\n903,7\n \n8 207,5\n \nJun\n1,1\n \n520,3\n1 122,4\n \n718,7\n678,1\n \n110,9\n \n188,6\n \n0,0\n282,9\n \n-\n \n424,7\n \n20,4\n \n2 998,6\n \n858,8\n1 229,8\n \n9 155,3\n \nJul\n2,4\n \n681,0\n918,2\n \n640,3\n336,2\n \n99,8\n \n676,7\n \n0,0\n276,2\n \n5,0\n \n333,9\n \n20,5\n \n3 022,2\n \n1332,3\n1 250,3\n \n9 595,1\n \nAug\n1,1\n \n642,2\n853,3\n \n852,1\n428,1\n \n-\n \n764,6\n \n0,0\n246,2\n \n5,1\n \n373,1\n \n20,6\n \n3 042,5\n \n1811,8\n1 318,9\n \n10 359,6\n \nSep\n1,0\n \n1230,9\n1 985,1\n \n1121,2\n705,4\n \n-\n \n555,5\n \n0,0\n431,0\n \n34,5\n \n1 130,0\n \n37,0\n \n4 878,1\n \n2054,8\n2 298,6\n \n16 463,3\n \nOct\n13,1\n \n1166,2\n2 512,0\n \n1391,6\n769,7\n \n-\n \n745,1\n \n0,0\n502,2\n \n5,3\n \n1 380,9\n \n42,7\n \n5 751,9\n \n2214,8\n2 435,0\n \n18 930,4\n \nNov\n14,0\n \n918,9\n2 141,3\n \n1383,8\n649,7\n \n-\n \n602,6\n \n0,0\n367,6\n \n5,4\n \n1 293,8\n \n39,5\n \n4 997,5\n \n2566,9\n2 458,3\n \n17 439,1\n \nDec\n17,1\n \n1089,4\n2 633,9\n \n2306,6\n754,5\n \n-\n \n675,7\n \n0,0\n361,0\n \n-\n \n1 424,9\n \n35,4\n \n5 500,8\n \n2343,9\n2 593,3\n \n19 736,5\n \n2025\nJan\n13,1\n \n939,4\n2 348,5\n \n616,8\n637,3\n \n-\n \n1 028,5\n \n0,0\n-\n \n1 019,2\n \n1 294,7\n \n-\n \n356,6\n \n317,5\n \n5 353,2\n \n5 670,7\n \n199,4\n \n-\n \n3001,4\n3 282,1\n \n20 407,7\n \nFeb\n13,9\n \n980,7\n2 545,5\n \n628,6\n695,1\n \n-\n \n753,2\n \n0,0\n-\n \n997,8\n \n1 428,4\n \n-\n \n335,1\n \n535,1\n \n5 302,8\n \n5 837,9\n \n199,4\n \n-\n \n1754,4\n3 294,2\n \n19 464,2\n \nMar\n20,4\n \n1031,3\n2 349,0\n \n786,9\n517,9\n \n-\n \n844,9\n \n0,0\n-\n \n1 066,7\n \n1 604,4\n \n-\n \n284,5\n \n358,4\n \n5 601,2\n \n5 959,7\n \n121,0\n \n-\n \n1684,9\n3 466,0\n \n19 737,7\n \nApr\n17,8\n \n1038,4\n2 522,2\n \n766,4\n514,4\n \n-\n \n900,0\n \n0,0\n-\n \n1 084,2\n \n1 815,7\n \n-\n \n284,5\n \n322,9\n \n5 519,7\n \n5 842,6\n \n111,4\n \n-\n \n1736,6\n3 476,9\n \n20 111,3\n \nMay\n26,4\n \n855,4\n2 940,4\n \n801,9\n906,2\n \n-\n \n1 009,6\n \n0,0\n-\n \n1 098,4\n \n1 814,5\n \n-\n \n204,3\n \n695,6\n \n5 865,6\n \n6 561,2\n \n139,8\n \n-\n \n2062,4\n3 495,2\n \n21 915,6\n \nJun\n29,0\n \n803,0\n2 966,8\n \n631,1\n823,7\n \n-\n \n1 262,5\n \n0,0\n-\n \n1 046,3\n \n1 892,2\n \n-\n \n197,5\n \n635,7\n \n6 405,1\n \n7 040,8\n \n232,2\n \n-\n \n1786,7\n3 716,9\n \n22 428,7\n \nJul\n29,0\n \n803,0\n2 966,8\n \n631,1\n823,7\n \n-\n \n1 262,5\n \n0,0\n-\n \n1 046,3\n \n1 892,2\n \n-\n \n197,5\n \n635,7\n \n6 405,1\n \n7 040,8\n \n232,2\n \n-\n \n1786,7\n3 716,9\n \n22 428,7\n \nAug\n32,3\n \n1148,2\n3 101,3\n \n1361,4\n1 468,4\n \n-\n \n892,1\n \n0,0\n-\n \n1 235,6\n \n1 836,0\n \n-\n \n113,8\n \n639,9\n \n6 476,6\n \n7 116,6\n \n593,1\n \n-\n \n2036,4\n3 683,5\n \n24 618,5\n \nSep\n34,4\n \n1218,5\n3 281,0\n \n813,1\n1 259,5\n \n-\n \n830,3\n \n0,0\n-\n \n1 226,4\n \n2 125,7\n \n-\n \n107,4\n \n842,6\n \n6 263,1\n \n7 105,7\n \n451,2\n \n-\n \n2125,9\n3 664,0\n \n24 242,9\n \nOct\n43,3\n \n1267,3\n3 558,0\n \n979,8\n1 167,2\n \n-\n \n825,7\n \n0,0\n-\n \n1 303,7\n \n2 339,1\n \n-\n \n192,1\n \n741,0\n \n5 924,4\n \n6 665,4\n \n439,4\n \n-\n \n2552,1\n3 279,3\n \n24 612,4\n \nNov\n52,6\n \n1073,9\n3 497,0\n \n941,9\n1 383,6\n \n-\n \n934,1\n \n0,0\n-\n \n1 285,1\n \n2 404,5\n \n-\n \n196,6\n \n747,1\n \n5 896,2\n \n6 643,3\n \n445,0\n \n-\n \n2697,9\n3 293,4\n \n24 849,0\n \nDec\n56,6\n \n1353,3\n3 358,3\n \n770,7\n1 357,1\n \n-\n \n813,7\n \n0,0\n-\n \n1 218,2\n \n2 301,7\n \n-\n \n240,1\n \n688,4\n \n5 536,9\n \n6 225,3\n \n499,2\n \n-\n \n2126,3\n2 525,0\n \n22 845,2\n \n2026\nJan\n57,5\n \n1497,5\n3 278,9\n \n620,0\n990,9\n \n-\n \n734,8\n \n0,0\n-\n \n1 079,0\n \n2 294,1\n \n-\n \n1 082,4\n \n689,9\n \n4 363,9\n \n5 053,8\n \n499,5\n \n-\n \n1861,4\n2 511,3\n \n21 561,0\n \nFeb\n56,4\n \n1102,7\n3 290,8\n \n680,1\n1 189,6\n \n-\n \n740,2\n \n0,0\n-\n \n1 256,6\n \n2 314,0\n \n-\n \n1 092,2\n \n688,3\n \n4 655,2\n \n5 343,6\n \n495,5\n \n-\n \n2314,5\n2 514,8\n \n22 391,0\n \nSource:Reserve Bank of Zimbabwe, 2026\nNotes\ni.Government securities include treasuary bills and bonds\nii.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\nii.Includes households, other financial corporations, \n* Statistics are denominated in ZiG\nOther Institutional Units\nTABLE 6.1: BUILDING SOCIETIES ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\n \n \n20 \n \n \n \nDebt Securities\nForeign Liabilities\nCapital\nContigent \nOther\nTOTAL\nand\nLiabilities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nOf wich FCA\nRBZ\nOther Depository \nOther Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2022\nJan\n31 695,1\n5 983,6\n37 678,7\n0,0\n15,0\n37 693,7\n1 771,4\n10 991,6\n0,0\n373,7\n0,0\n18 063,5\n10 937,0\n79 830,9\nFeb\n37 132,1\n7 089,1\n44 221,1\n0,0\n15,0\n44 236,1\n1 703,8\n14 215,9\n0,0\n431,6\n0,0\n18 241,5\n11 325,7\n90 154,6\nMar\n44 187,4\n6 190,7\n50 378,1\n0,0\n15,0\n50 393,1\n1 742,3\n15 620,9\n0,0\n501,9\n0,0\n20 548,8\n14 430,4\n103 237,4\nApr\n52 979,2\n6 553,0\n59 532,2\n0,0\n15,0\n59 547,2\n1 536,3\n17 027,1\n0,0\n704,1\n0,0\n23 099,0\n14 854,4\n116 768,1\nMay\n86 411,7\n6 683,0\n93 094,7\n0,0\n15,0\n93 109,8\n1 477,7\n34 306,7\n0,0\n1 033,4\n0,0\n22 645,2\n23 325,7\n175 898,5\nJun\n98 008,7\n8 427,1\n106 435,9\n1 030,1\n15,0\n107 481,1\n1 496,4\n40 346,3\n0,0\n1 200,6\n0,0\n42 213,2\n26 895,5\n219 633,0\nJul\n111 583,1\n9 489,2\n121 072,3\n1 072,6\n15,0\n122 159,9\n1 225,0\n46 145,1\n0,0\n2 071,5\n0,0\n55 131,6\n16 832,0\n243 565,1\nAug\n133 071,2\n11 398,3\n144 469,5\n1 625,2\n15,0\n146 109,7\n1 382,6\n55 691,4\n0,0\n2 979,3\n0,0\n60 157,4\n15 056,7\n281 377,1\nSep\n143 338,6\n28 284,7\n171 623,3\n0,0\n15,0\n171 638,3\n1 339,9\n62 659,9\n0,0\n3 613,8\n0,0\n79 343,1\n17 410,1\n336 005,2\nOct\n122 775,3\n20 897,6\n143 672,9\n1 214,2\n15,0\n144 902,1\n1 707,3\n69 651,9\n0,0\n4 327,9\n0,0\n86 799,2\n41 091,4\n348 479,7\nNov\n130 892,9\n23 401,5\n154 294,3\n1 256,4\n13,0\n155 563,7\n1 855,1\n72 052,0\n0,0\n5 140,0\n0,0\n89 895,0\n41 331,2\n365 836,9\nDec\n149 207,3\n30 517,1\n179 724,4\n1 239,7\n103,8\n181 068,0\n1 933,7\n71 142,6\n0,0\n5 623,9\n0,0\n118 486,1\n42 883,8\n421 138,1\n2023\nJan\n161 506,8\n31 099,4\n192 606,2\n1 462,2\n121,0\n194 189,4\n3 214,4\n72 524,5\n0,0\n6 622,6\n0,0\n144 335,3\n25 816,5\n446 702,8\nFeb\n210 739,4\n27 500,2\n238 239,5\n1 153,4\n15,0\n239 407,9\n2 349,9\n84 724,5\n0,0\n7 548,9\n0,0\n155 007,6\n39 582,0\n528 620,9\nMar\n234 480,2\n38 088,7\n272 568,9\n158,0\n14,4\n272 741,2\n1 982,4\n89 883,4\n0,0\n7 502,7\n0,0\n172 499,0\n33 358,6\n577 967,3\nApr\n272 738,9\n35 889,2\n308 628,0\n400,0\n15,0\n309 043,1\n1 809,5\n116 418,1\n0,0\n8 456,9\n0,0\n183 262,3\n47 334,0\n666 323,9\nMay\n502 897,5\n36 680,3\n539 577,9\n553,7\n15,0\n540 146,6\n4 453,5\n289 636,2\n0,0\n8 115,4\n0,0\n372 206,8\n100 789,6\n1 315 348,2\nJun\n927 980,2\n66 404,1\n994 384,3\n0,0\n15,0\n994 399,3\n4 147,7\n631 544,2\n0,0\n10 873,2\n0,0\n1 117 122,1\n243 513,7\n3 001 600,3\nJul\n804 547,2\n73 047,1\n877 594,3\n15 753,2\n15,0\n893 362,6\n2 706,7\n611 248,0\n0,0\n14 397,5\n0,0\n1 093 858,2\n197 126,1\n2 812 698,9\nAug\n920 687,4\n90 856,7\n1 011 544,1\n15 752,3\n15,0\n1 027 311,4\n3 400,5\n617 162,9\n0,0\n12 854,9\n0,0\n1 064 286,3\n203 953,2\n2 928 969,2\nSep\n1 062 730,1\n75 413,9\n1 138 143,9\n0,0\n15,1\n1 138 159,0\n3 262,9\n652 356,6\n0,0\n16 101,5\n0,0\n1 117 548,2\n309 212,1\n3 236 640,3\nOct\n1 261 965,8\n64 282,0\n1 326 247,8\n0,0\n15,1\n1 326 262,9\n4 056,0\n467 416,6\n0,0\n16 785,2\n0,0\n1 188 499,5\n370 563,3\n3 373 583,5\nNov\n1 301 463,8\n82 076,9\n1 383 540,7\n79 497,1\n15,1\n1 463 052,8\n4 822,5\n525 114,1\n0,0\n16 180,1\n0,0\n1 209 652,3\n395 932,7\n3 614 754,5\nDec\n1 541 238,9\n142 705,5\n1 683 944,4\n79 497,1\n15,8\n1 763 457,2\n7 085,0\n516 718,0\n0,0\n8 736,3\n0,0\n1 308 419,6\n510 096,7\n4 114 512,9\n2024\nJan\n2 094 039,4\n96 896,2\n2 190 935,6\n79 481,7\n15,1\n2 270 432,3\n8 231,4\n904 697,2\n0,0\n11 028,7\n0,0\n1 826 995,6\n648 721,6\n5 670 106,8\nFeb\n2 991 430,0\n192 203,3\n3 183 633,2\n162 422,1\n15,1\n3 346 070,4\n10 388,9\n1 314 901,6\n0,0\n5 723,7\n0,0\n2 630 626,9\n827 332,6\n8 135 044,1\nMar\n4 958 662,0\n186 068,5\n5 144 730,5\n162 239,8\n15,7\n5 306 986,0\n8 072,5\n1 880 803,3\n0,0\n6 134,8\n0,0\n4 286 906,8\n1 152 114,2\n12 641 017,5\nApr\n3 369,4\n36,3\n3 405,6\n65,0\n0,0\n3 470,7\n3,2\n1 258,6\n0,0\n0,0\n0,0\n1 955,9\n1 385,6\n8 074,0\nMay\n3 228,4\n75,2\n3 303,7\n0,0\n0,0\n3 303,7\n4,8\n1 366,6\n0,0\n0,0\n0,0\n2 496,7\n1 035,8\n8 207,5\nJun\n3 502,4\n97,1\n3 599,5\n0,0\n0,0\n3 599,5\n4,4\n1 414,8\n0,0\n8,0\n0,0\n2 990,2\n1 138,3\n9 155,3\nJul\n4 199,9\n128,4\n4 328,3\n0,0\n0,0\n4 328,3\n19,6\n919,3\n0,0\n13,2\n0,0\n3 111,6\n1 203,0\n9 595,1\nAug\n4 433,7\n172,4\n4 606,1\n0,0\n0,0\n4 606,1\n103,0\n850,7\n0,0\n16,1\n0,0\n3 370,3\n1 413,3\n10 359,6\nSep\n6 773,8\n475,3\n7 249,1\n22,6\n0,0\n7 271,7\n103,8\n1 559,3\n0,0\n16,3\n0,0\n5 486,0\n2 026,3\n16 463,3\nOct\n8 011,9\n795,7\n8 807,6\n86,9\n0,0\n8 894,5\n122,7\n1 462,9\n0,0\n61,4\n0,0\n6 003,1\n2 385,9\n18 930,4\nNov\n7 145,7\n872,8\n8 018,6\n45,8\n0,0\n8 064,4\n79,9\n1 227,6\n0,0\n10,0\n0,0\n6 043,8\n2 013,3\n17 439,1\nDec\n8 227,9\n1 293,1\n9 521,0\n71,2\n0,0\n9 592,2\n79,9\n1 306,5\n0,0\n267,8\n0,0\n5 923,9\n2 566,2\n19 736,5\n2025\nJan\n6114\n44,7\n2 350,2\n8 508,5\n0,0\n649,8\n9 158,3\n6 215,9\n0,0\n1 657,1\n0,0\n377,4\n0,0\n6 162,6\n0,0\n3 052,3\n20 407,7\nFeb\n6227\n51,3\n2 759,3\n9 037,6\n0,0\n625,5\n9 663,1\n6 512,8\n0,0\n1 679,8\n0,0\n206,6\n0,0\n6 294,5\n0,0\n1 620,1\n19 464,2\nMar\n7027\n54,9\n2 402,5\n9 484,9\n0,0\n588,2\n10 073,1\n7 085,6\n0,0\n1 498,3\n0,0\n83,0\n0,0\n6 364,1\n0,0\n1 719,2\n19 737,7\nApr\n7101\n74,1\n2 488,0\n9 663,4\n0,0\n588,3\n10 251,7\n7 186,8\n0,0\n1 498,3\n0,0\n99,1\n0,0\n6 375,2\n0,0\n1 887,1\n20 111,3\nMay\n8052\n83,0\n2 896,7\n11 031,5\n0,0\n0,0\n11 031,5\n7 864,0\n0,0\n2 107,9\n0,0\n100,3\n0,0\n6 789,0\n0,0\n1 886,9\n21 915,6\nJun\n7361\n52,4\n4 101,0\n11 513,9\n0,0\n648,2\n12 162,1\n8 109,7\n0,0\n1 831,4\n33,8\n86,3\n0,0\n6 827,3\n0,0\n1 487,8\n22 428,7\nJul\n7361\n52,4\n4 101,0\n11 513,9\n0,0\n648,2\n12 162,1\n8 109,7\n0,0\n1 831,4\n33,8\n86,3\n0,0\n6 827,3\n0,0\n1 487,8\n22 428,7\nAug\n7971\n57,3\n4 213,4\n12 241,4\n0,0\n751,2\n12 992,5\n9 046,5\n0,0\n2 065,1\n36,9\n107,8\n0,0\n7 361,5\n0,0\n2 054,6\n24 618,5\nSep\n8740\n54,3\n3 967,0\n12 761,5\n0,0\n200,1\n12 961,6\n9 714,8\n0,0\n1 860,0\n30,3\n88,1\n0,0\n7 193,5\n0,0\n2 109,3\n24 242,9\nOct\n9077\n56,8\n4 294,6\n13 428,1\n0,0\n229,7\n13 657,8\n9 386,0\n0,0\n1 300,0\n30,7\n88,3\n0,0\n7 089,1\n0,0\n2 446,5\n24 612,4\nNov\n9080\n61,7\n4 431,4\n13 573,5\n0,0\n303,8\n13 877,4\n9 286,0\n0,0\n1 405,7\n16,7\n88,5\n0,0\n7 016,5\n0,0\n2 444,2\n24 849,0\nDec\n9321\n58,8\n3 562,5\n12 942,0\n0,0\n348,9\n13 290,9\n9 699,6\n0,0\n1 394,5\n4,6\n0,0\n0,0\n6 336,7\n0,0\n1 818,5\n22 845,2\n2026\nJan\n9334\n60,1\n3 509,6\n12 903,4\n0,0\n279,1\n13 182,5\n9 687,0\n0,0\n747,7\n0,0\n0,0\n0,0\n6 110,4\n0,0\n1 520,5\n21 561,0\nFeb\n9329\n53,1\n3 766,6\n13 148,6\n0,0\n279,9\n13 428,5\n9 790,7\n0,0\n1 115,0\n0,0\n0,0\n0,0\n6 225,8\n0,0\n1 621,8\n22 391,0\nSource: Reserve Bank of Zimbabwe, 2026\n* Statistics are denominated in ZiG\nZWG millions\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\nAmounts Owing to\n \n \n21 \n \n \nEND OF\n2022\nJan\n58 163 723,79\n2 180 551,47\n576 438,12\n26 576 317,70\n366 231,45\n8 887 534,55\n23 074 734,84\n11 840 524,88\n15 743 736,46\n3 516 259,69\n47 325 078,28\n29 564,68\n198 280 695,90\nFeb\n59 500 669,71\n2 289 260,81\n618 640,14\n27 925 301,74\n641 435,03\n9 370 886,67\n27 976 121,59\n13 027 815,12\n20 505 827,49\n3 747 288,27\n51 007 737,28\n19 692,27\n216 630 676,11\nMar\n66 551 117,83\n2 538 377,08\n656 335,46\n29 688 979,74\n660 584,49\n10 903 917,10\n32 629 411,62\n15 688 496,07\n38 075 386,72\n4 471 441,45\n58 500 950,68\n802 168,34\n261 167 166,58\nApr\n74 441 781,12\n4 219 500,30\n1 441 218,07\n33 136 441,44\n673 885,92\n13 157 284,33\n34 426 878,27\n18 261 710,29\n39 043 359,76\n5 001 307,17\n63 176 517,86\n40 089,64\n287 019 974,16\nMay\n101 753 100,08\n5 120 524,84\n3 358 419,20\n50 514 059,33\n760 401,23\n12 433 390,50\n42 057 624,50\n28 724 818,35\n48 088 662,73\n6 286 840,17\n76 655 600,16\n34 456,76\n375 787 897,73\nJune\n118 753 588,99\n6 209 658,53\n2 293 665,50\n64 942 949,99\n869 273,19\n23 897 585,00\n58 442 367,18\n37 195 284,13\n62 467 707,84\n9 414 912,48\n96 536 183,00\n43 204,15\n481 066 380,00\nJuly\n133 779 414,05\n7 610 614,14\n3 684 426,07\n77 836 080,20\n938 367,98\n30 537 997,95\n69 408 788,72\n46 181 587,44\n72 642 938,51\n10 449 582,51\n111 094 524,49\n46 145,73\n564 210 467,80\nAug\n165 210 571,41\n10 163 176,69\n2 624 492,88\n93 899 073,61\n1 266 729,80\n39 544 245,28\n87 691 102,84\n58 330 938,20\n97 552 420,83\n10 450 507,09\n131 625 765,29\n154 457,59\n698 513 481,52\nSept\n201 167 878,53\n11 330 918,80\n5 038 300,39\n110 956 484,03\n1 297 748,50\n44 492 682,69\n101 816 518,33\n92 708 096,37\n88 483 494,42\n11 685 667,87\n152 934 863,30\n276 752,34\n822 189 405,58\nOct\n223 506 677,74\n12 026 669,50\n4 229 873,27\n113 451 159,15\n1 302 041,27\n46 399 745,17\n110 333 025,84\n79 715 558,05\n89 501 330,53\n9 611 322,30\n175 816 703,56\n178 607,79\n866 072 714,17\nNov\n232 953 535,08\n16 431 625,92\n11 131 139,79\n118 284 970,84\n1 687 527,03\n42 192 397,26\n124 017 335,43\n75 874 234,73\n94 636 395,62\n12 440 947,33\n207 085 835,54\n197 473,26\n936 933 417,83\nDec\n253 185 165,18\n19 199 455,89\n10 466 455,02\n135 037 685,07\n1 551 994,21\n70 805 600,30\n136 576 579,60\n94 115 141,69\n123 404 532,09\n12 079 018,68\n235 371 108,06\n173 717,07\n1 091 966 452,83\n2023\nJan\n299 237 745,06\n22 096 826,86\n11 001 194,94\n154 399 125,00\n2 073 794,79\n72 677 263,10\n165 905 496,48\n124 259 994,28\n140 303 195,37\n16 560 714,33\n290 446 774,71\n286 968,13\n1 299 249 093,07\nFeb\n333 081 520,85\n26 349 752,54\n12 607 980,80\n168 969 321,35\n3 232 834,66\n79 874 665,83\n198 087 465,13\n146 996 948,44\n150 078 778,01\n18 960 512,94\n335 439 856,49\n415 659,47\n1 474 095 296,50\nMar\n411 138 419,07\n28 795 432,59\n14 081 946,71\n184 250 094,21\n3 256 927,22\n101 507 881,47\n232 125 042,77\n168 374 643,67\n159 301 093,17\n20 786 447,06\n364 183 808,40\n229 595,47\n1 688 031 331,80\nApr\n411 638 425,58\n28 865 765,48\n14 081 964,65\n184 833 219,66\n3 256 927,22\n101 507 881,47\n235 076 590,94\n168 374 757,64\n159 310 920,52\n20 785 827,18\n365 366 760,50\n229 595,47\n1 693 328 636,32\nMay\n726 348 772,35\n78 828 771,47\n44 800 380,00\n409 618 602,87\n6 584 930,07\n226 467 642,46\n583 387 051,30\n480 909 418,46\n381 628 891,53\n62 593 512,49\n757 858 742,61\n267 815,39\n3 759 294 531,01\nJun\n1 385 380 571,66\n173 918 051,54\n114 682 839,69\n1 119 448 698,19\n23 922 347,39\n571 712 604,71\n1 309 324 347,94\n1 111 326 640,14\n808 734 970,18\n129 722 475,73\n1 754 989 459,01\n444 788,00\n8 503 607 794,19\nJul\n1 088 372 491,59\n132 529 236,30\n101 023 084,21\n843 805 813,72\n21 291 030,44\n370 922 779,80\n1 037 949 287,43\n824 419 061,99\n646 244 001,65\n87 491 103,55\n1 451 125 105,58\n356 098,86\n6 605 529 095,13\nAug\n1 104 126 310,09\n133 512 317,72\n105 426 999,17\n683 402 044,93\n21 345 225,83\n393 145 008,06\n1 077 529 295,35\n824 970 068,56\n716 638 286,73\n85 309 683,35\n1 543 461 599,29\n382 505,35\n6 689 249 344,42\nSep\n1 336 413 273,40\n158 136 405,58\n121 080 865,90\n752 199 791,20\n28 592 532,70\n465 470 715,50\n1 334 020 478,90\n1 012 670 250,70\n799 826 458,00\n102 238 002,60\n1 857 297 850,00\n586 991,00\n7 968 533 615,50\nOct\n1 461 090 986,48\n163 948 853,90\n120 153 516,74\n935 064 277,07\n24 681 683,18\n520 361 008,99\n1 381 206 351,23\n1 092 469 043,71\n859 550 943,15\n118 799 556,91\n2 126 512 435,00\n627 911,82\n8 804 466 568,16\nNov\n1 397 804 072,50\n171 337 302,47\n117 526 650,42\n1 017 731 862,93\n26 161 720,05\n535 490 380,99\n1 401 587 612,93\n992 371 783,17\n885 248 702,84\n129 500 343,70\n2 255 158 373,70\n621 795,60\n8 930 540 600,93\nDec\n1 360 816 417,35\n179 675 138,50\n121 167 248,12\n1 077 783 652,10\n46 946 926,90\n551 786 675,29\n1 483 619 833,87\n1 207 471 368,52\n863 309 236,72\n136 388 007,82\n2 458 239 172,85\n644 093,68\n9 487 847 771,72\n2024\nJan\n2 212 746 050,25\n265 031 131,44\n214 923 355,91\n1 663 240 228,23\n110 086 710,61\n875 780 504,12\n2 505 473 968,40\n1 910 394 449,61\n1 256 413 922,88\n237 647 459,79\n3 945 256 597,25\n1 037 343,55\n15 198 031 722,04\nFeb\n3 435 102 730,48\n426 536 836,74\n249 129 096,22\n2 383 796 904,38\n171 219 221,62\n1 264 658 167,28\n3 631 856 467,58\n2 844 642 895,76\n2 043 483 472,01\n352 320 643,54\n5 491 307 643,33\n1 518 795,13\n22 295 572 874,08\nMar\n4 949 814 064,70\n642 860 845,90\n452 924 544,60\n3 642 287 181,90\n251 866 635,20\n1 943 457 910,80\n5 387 453 048,30\n3 991 233 867,50\n3 178 219 935,60\n543 942 248,60\n8 278 044 179,10\n2 267 159,00\n33 264 371 621,30\n*Apr\n2 882 347,04\n371 595,02\n188 567,12\n3 081 028,88\n188 277,01\n1 174 215,26\n3 077 908,79\n2 281 799,96\n1 782 566,59\n399 652,20\n4 922 516,84\n1 655,37\n20 352 130,08\n*May\n3 549 471,22\n448 072,03\n196 408,62\n3 013 508,26\n181 989,39\n1 239 894,94\n3 619 936,03\n2 302 326,81\n1 793 582,31\n494 669,10\n5 661 322,35\n5 002,25\n22 513 367,89\n*Jun\n3 286 172,53\n496 282,55\n213 057,33\n3 210 670,42\n230 521,55\n1 418 401,02\n3 457 122,91\n1 954 111,98\n1 946 800,04\n567 017,72\n6 019 426,96\n1 771,40\n22 801 356,42\n*Jul\n3 487 382,60\n511 490,74\n202 186,14\n3 350 580,05\n163 104,44\n1 304 409,07\n3 570 513,33\n2 117 767,16\n2 347 954,24\n568 049,13\n6 348 713,28\n2 029,48\n23 985 090,63\n*Aug\n3 858 128,45\n496 920,13\n197 595,11\n3 160 166,09\n163 179,56\n1 353 221,18\n3 891 826,53\n2 259 346,53\n2 064 398,05\n355 517,61\n7 019 997,29\n1 626,53\n24 821 923,05\n*Sep\n6 672 075,13\n1 240 260,16\n365 299,01\n5 024 076,96\n274 548,64\n2 326 667,49\n6 387 958,08\n4 331 429,08\n3 418 807,30\n640 082,06\n11 884 283,83\n2 603,24\n42 568 090,98\n*Oct\n7 858 559,49\n1 469 928,32\n481 828,82\n5 465 308,96\n320 115,06\n2 603 522,82\n7 340 600,92\n5 249 584,59\n3 667 687,19\n726 009,18\n13 568 052,49\n3 070,10\n48 754 267,95\n*Nov\n7 180 366,66\n1 328 085,57\n428 978,78\n5 025 733,67\n284 239,89\n2 457 448,49\n6 759 835,67\n4 209 879,63\n3 928 182,05\n680 905,22\n13 074 981,78\n2 309,39\n45 360 946,80\n*Dec\n7 297 552,82\n1 289 292,14\n385 874,99\n4 973 856,63\n262 219,72\n2 513 526,60\n6 746 914,01\n4 827 984,53\n3 694 327,88\n706 439,67\n13 280 443,54\n2 262,81\n45 980 695,34\n2025\n*Jan\n7 678 298,65\n1 196 038,23\n409 696,02\n5 047 238,20\n306 809,73\n2 664 917,36\n6 434 242,43\n4 757 437,66\n4 086 970,99\n769 886,02\n13 569 651,19\n1 922,01\n46 923 108,48\n*Feb\n8 299 274,74\n1 201 875,78\n399 492,64\n4 830 538,61\n300 587,07\n2 770 286,66\n6 503 215,41\n4 803 609,78\n4 292 425,79\n746 491,37\n13 140 132,51\n1 960,50\n47 289 890,85\n*Mar\n8 326 930,91\n1 244 718,81\n402 707,95\n5 041 144,58\n317 777,54\n2 491 912,41\n6 543 198,90\n4 375 136,07\n5 262 596,60\n744 227,95\n13 809 533,31\n1 950,08\n48 561 835,10\n*Apr\n8 907 112,83\n1 321 160,24\n510 175,35\n5 587 682,42\n301 612,10\n2 488 206,19\n7 065 026,69\n5 118 059,86\n5 500 479,51\n721 927,40\n14 585 410,50\n2 121,10\n52 108 974,19\n*May\n9 447 878,28\n1 662 965,62\n432 262,51\n6 247 342,77\n303 671,59\n2 560 619,89\n7 447 120,21\n5 231 385,19\n5 706 622,10\n757 449,00\n14 848 295,45\n2 090,86\n54 647 703,48\n*Jun\n9 323 262,25\n1 857 036,70\n452 476,01\n6 911 438,62\n316 057,26\n2 597 384,44\n7 363 354,86\n5 189 397,21\n5 586 435,53\n1 025 486,27\n14 948 428,25\n2 340,92\n55 573 098,32\n*Jul\n9 586 121,76\n1 821 068,99\n495 126,38\n7 039 554,33\n178 544,10\n2 593 734,88\n7 795 887,20\n5 506 356,66\n4 812 815,12\n1 047 916,99\n15 398 848,28\n3 074,97\n56 279 049,66\n*Aug\n9 148 112,87\n1 704 046,91\n442 559,05\n8 621 271,81\n178 023,75\n2 711 257,51\n7 806 713,08\n4 494 735,86\n5 678 257,82\n1 660 555,70\n14 593 469,93\n3 267,57\n57 042 271,87\n*Sep\n9 939 018,22\n1 705 339,14\n447 683,58\n8 018 110,39\n298 207,44\n2 736 927,32\n8 222 972,36\n5 267 250,21\n5 356 204,76\n1 618 665,56\n15 143 546,81\n3 161,64\n58 757 087,43\n*Oct\n10 156 394,52\n1 857 937,44\n894 870,28\n7 960 894,20\n327 830,18\n2 793 906,88\n8 390 997,31\n5 441 104,32\n5 826 908,27\n1 725 282,36\n16 026 574,02\n3 520,96\n61 406 220,75\n*Nov\n10 329 897,54\n2 127 564,82\n789 426,81\n8 168 504,38\n264 314,27\n2 738 893,05\n8 808 301,87\n5 467 229,39\n5 795 538,81\n1 651 606,66\n16 521 676,98\n3 535,22\n62 666 489,80\n*Dec\n9 986 988,75\n2 139 883,88\n812 138,77\n8 008 605,45\n342 519,81\n2 563 547,94\n8 175 566,68\n5 199 008,24\n6 004 733,95\n1 727 062,36\n15 937 838,06\n3 502,96\n60 901 396,85\n2026\n*Jan\n10 746 125,01\n1 977 346,44\n878 347,57\n7 795 142,24\n281 548,39\n2 727 070,62\n8 442 329,32\n4 376 788,36\n6 482 662,97\n1 668 089,81\n16 642 946,70\n3 411,68\n62 021 809,10\nFeb\n10 792 514,86\n1 975 992,93\n878 347,57\n7 794 841,28\n281 548,39\n2 727 230,51\n8 514 000,75\n4 383 403,09\n6 483 541,44\n1 668 089,81\n16 749 749,17\n3 755,44\n62 253 015,24\nSource: Reserve Bank of Zimbabwe, 2026\nNotes\n0,10\ni.Including the only merchant bank still in operation.\n*Statistics are denominated in ZiG\n TABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES\nZWG ('000)\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL & \nINVESTMENTS\nFINANCIAL \nORGANISATIONS\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\n \n \n22 \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS\nORGANISATIONS\n2021\nJan\n12 195 945,09\n4 725 946,72\n13 067 828,56\n32 314 625,60\n6 804 952,50\n19 638 789,03\n27 577 248,19\n13 566 042,79\n60 234 250,60\n3 993 814,34\n22 146 327,53\n314 523,37\n216 580 294,30\nFeb\n12 215 925,38\n4 335 293,23\n13 268 343,18\n31 820 079,48\n6 327 338,72\n19 480 197,75\n27 088 789,92\n11 873 767,24\n62 647 881,89\n3 583 509,91\n23 594 651,47\n323 276,77\n216 559 054,94\nMar\n12 086 596,94\n5 009 117,91\n15 457 881,64\n33 668 114,17\n7 879 623,60\n17 019 379,33\n29 927 193,06\n12 664 366,44\n68 761 992,24\n4 513 060,17\n25 352 486,13\n371 874,60\n232 711 686,23\nApr\n14 293 712,79\n6 264 137,34\n17 624 611,65\n35 860 252,53\n7 955 587,69\n18 411 151,82\n32 890 743,11\n11 445 151,89\n81 410 668,87\n4 248 558,67\n27 176 673,47\n411 001,01\n257 992 250,84\nMay\n14 731 869,47\n5 542 211,64\n19 231 383,69\n37 283 237,74\n7 903 622,65\n19 756 317,30\n33 027 214,88\n22 796 168,05\n84 596 653,48\n4 504 355,67\n28 445 264,85\n378 185,06\n278 196 484,46\nJun\n15 628 935,51\n6 154 316,52\n20 722 752,27\n39 604 431,48\n7 861 552,67\n21 455 061,82\n36 502 664,43\n23 449 074,86\n92 196 178,85\n4 756 434,86\n29 731 644,54\n415 508,64\n298 478 556,45\nJul\n14 899 561,10\n6 742 913,66\n25 082 739,85\n39 720 936,02\n9 580 503,84\n24 570 675,98\n38 875 306,10\n31 312 003,24\n94 151 108,53\n5 021 547,73\n32 324 374,53\n568 402,62\n322 850 073,17\nAug\n14 056 945,25\n6 611 127,05\n26 897 316,63\n39 624 666,33\n9 778 338,93\n27 046 620,96\n40 693 944,15\n26 504 554,01\n84 766 848,12\n4 915 399,24\n33 960 935,12\n645 902,41\n315 502 598,18\nSep\n14 777 285,47\n6 264 492,08\n27 413 062,10\n45 375 795,43\n10 337 697,22\n25 786 388,31\n43 113 093,01\n30 700 846,40\n95 985 614,84\n5 605 871,74\n37 606 703,52\n687 817,24\n343 654 667,37\nOct\n14 923 669,66\n8 437 829,51\n26 583 413,65\n47 841 912,79\n11 477 927,22\n29 796 762,93\n51 676 553,79\n49 115 499,00\n111 611 484,23\n5 940 819,15\n35 043 857,03\n618 831,05\n393 068 559,99\nNov\n14 147 912,21\n7 546 852,86\n27 174 334,28\n44 238 573,41\n11 949 923,74\n27 199 271,57\n52 401 389,32\n49 817 772,34\n115 576 831,01\n5 911 967,57\n37 770 843,26\n751 068,72\n394 486 740,29\nDec\n16 522 401,63\n9 204 283,51\n26 835 545,00\n47 381 404,66\n15 303 976,78\n43 092 763,28\n57 822 911,04\n61 555 101,22\n122 091 550,61\n6 093 367,35\n40 046 246,70\n1 319 573,65\n447 269 125,42\n2022\nJan\n17 399 268,45\n9 928 816,10\n28 146 847,17\n46 285 881,10\n15 060 177,49\n34 087 881,41\n60 888 346,70\n38 232 883,69\n135 579 116,46\n6 454 492,58\n32 504 960,47\n745 336,00\n425 314 007,61\nFeb\n20 260 983,50\n9 641 974,72\n32 159 803,23\n50 825 844,50\n15 235 028,54\n35 068 548,54\n49 157 612,17\n43 769 514,96\n146 423 512,16\n7 768 846,48\n36 257 363,98\n724 522,36\n447 293 555,15\nMar\n22 638 817,86\n11 683 937,35\n34 271 841,32\n61 002 811,60\n20 352 647,27\n34 501 628,57\n57 839 997,29\n60 678 395,30\n173 444 002,60\n9 467 563,85\n43 160 654,72\n970 393,82\n530 012 691,56\nApr\n26 926 844,72\n12 304 918,39\n34 924 202,54\n67 201 357,79\n21 444 798,07\n38 606 872,21\n61 303 321,13\n64 980 792,31\n216 612 532,66\n10 455 473,89\n45 951 692,03\n939 217,87\n601 652 023,61\nMay\n39 564 579,03\n21 954 770,23\n42 666 739,38\n108 620 498,72\n28 757 840,78\n54 108 110,44\n88 717 845,18\n107 568 244,73\n291 739 801,56\n14 310 137,61\n65 853 453,06\n1 190 747,91\n865 052 768,60\nJun\n45 956 287,64\n26 686 177,09\n47 155 850,80\n128 881 143,56\n23 783 755,16\n60 238 449,95\n105 247 922,50\n120 389 795,99\n326 034 986,61\n17 068 663,50\n108 828 797,15\n1 325 268,69\n1 011 597 098,65\nJul\n40 699 352,12\n28 329 526,03\n45 417 841,09\n128 847 329,07\n21 958 796,02\n62 326 844,37\n103 536 398,88\n112 642 685,48\n401 574 353,33\n17 902 000,20\n112 555 899,49\n1 117 408,25\n1 076 908 434,33\nAug\n68 438 409,63\n39 107 020,53\n53 616 955,67\n171 501 037,83\n25 370 674,58\n68 913 237,19\n162 326 617,25\n137 243 494,58\n538 409 018,36\n23 523 309,06\n146 121 882,24\n1 197 164,45\n1 435 768 821,37\nSep\n81 174 128,75\n51 501 554,76\n58 104 791,47\n204 056 688,73\n63 246 197,07\n174 562 749,46\n172 521 502,90\n138 936 277,91\n626 755 883,05\n25 607 188,82\n182 077 675,02\n11 177 650,78\n1 789 722 288,71\nOct\n83 201 043,64\n63 984 990,31\n67 031 137,91\n207 367 773,63\n40 617 325,27\n155 873 800,58\n179 051 392,63\n157 121 308,46\n575 293 016,53\n27 092 268,91\n201 852 712,89\n3 193 614,07\n1 761 680 384,82\nNov\n88 153 064,47\n61 978 896,61\n78 744 676,95\n236 152 455,10\n39 915 042,93\n100 872 718,26\n214 281 243,03\n200 240 592,45\n606 580 960,90\n32 903 876,70\n233 604 874,73\n119 223,24\n1 893 547 625,35\nDec\n106 799 918,36\n60 886 327,29\n73 518 960,29\n260 923 049,61\n48 959 835,11\n122 528 998,69\n242 741 914,11\n171 982 170,05\n747 151 447,16\n37 453 518,81\n270 164 633,75\n10 753 958,63\n2 153 864 731,86\n2023\nJan\n114 820 700,76\n79 460 381,87\n82 589 902,30\n305 204 829,91\n45 118 619,63\n135 072 311,14\n263 222 364,10\n223 632 204,71\n896 980 184,31\n37 534 721,96\n288 326 194,21\n7 916 696,92\n2 479 879 111,81\nFeb\n118 375 609,69\n85 995 682,64\n93 761 236,16\n312 626 341,50\n56 688 432,58\n147 245 179,36\n266 610 300,93\n273 709 371,16\n938 437 753,70\n39 909 193,60\n292 841 727,23\n6 842 518,78\n2 633 043 347,35\nMar\n119 963 933,20\n85 731 698,36\n100 697 025,58\n322 453 842,97\n45 619 349,07\n148 455 496,20\n286 712 763,58\n273 572 570,94\n1 064 798 433,60\n44 685 590,57\n330 031 150,72\n14 190 575,51\n2 836 912 430,30\nApr\n131 146 380,30\n89 322 733,64\n99 723 066,84\n324 249 300,08\n45 619 349,07\n149 245 957,86\n289 670 780,41\n273 578 020,75\n1 072 456 655,25\n44 926 335,64\n331 068 417,40\n14 190 575,51\n2 865 197 572,73\nMay\n269 460 363,15\n210 867 012,29\n216 906 304,04\n631 589 937,93\n113 357 505,65\n362 294 051,43\n581 761 350,37\n545 536 680,63\n2 504 454 969,80\n102 648 366,24\n702 960 786,40\n28 985 518,44\n6 270 822 846,38\nJun\n581 642 309,76\n428 772 683,41\n410 699 487,74\n1 366 510 052,55\n227 784 986,62\n700 617 673,80\n1 094 382 949,63\n1 185 026 806,70\n5 283 380 622,25\n199 474 750,17\n1 564 762 675,09\n40 673 167,41\n13 083 728 165,12\nJul\n535 377 934,43\n436 808 429,52\n413 150 823,99\n1 394 747 348,19\n206 866 966,84\n711 462 740,79\n1 157 802 106,76\n982 808 623,76\n4 533 520 705,60\n184 470 180,50\n1 464 856 207,23\n37 277 944,87\n12 059 150 012,48\nAug\n537 439 303,14\n422 479 784,07\n413 226 172,28\n1 343 458 227,81\n285 743 813,63\n662 607 567,90\n1 197 898 912,17\n1 004 826 660,33\n4 639 684 933,86\n209 521 849,57\n1 553 047 811,00\n38 718 344,86\n12 308 653 380,62\nSep\n632 283 427,70\n491 562 911,40\n426 060 663,50\n1 510 241 869,90\n296 604 785,00\n789 587 698,10\n1 300 914 518,50\n1 250 791 974,40\n5 214 851 978,10\n217 382 274,50\n1 781 106 637,90\n43 583 660,40\n13 954 972 399,20\nOct\n721 203 425,90\n541 011 315,61\n554 440 420,11\n1 657 817 920,26\n309 251 239,26\n841 367 968,72\n1 438 592 170,70\n1 187 082 973,91\n5 659 995 585,31\n260 248 908,48\n1 906 411 104,87\n49 647 602,04\n15 127 070 635,17\nNov\n703 080 882,81\n566 993 243,11\n532 803 998,34\n1 698 467 822,71\n346 291 934,28\n269 835 136,30\n1 554 832 195,31\n1 195 274 632,93\n6 063 945 342,98\n293 942 495,06\n2 031 657 547,49\n46 866 707,11\n15 885 967 935,90\nDec\n605 605 541,75\n423 493 370,41\n730 799 100,82\n1 549 938 533,11\n553 801 063,21\n767 650 016,19\n1 254 233 648,36\n1 348 969 145,10\n6 689 372 974,36\n247 647 472,27\n2 091 666 965,12\n53 713 528,87\n16 882 080 093,66\n2024\nJan\n833 932 128,83\n694 796 940,75\n1 029 474 123,23\n2 082 328 111,88\n884 819 488,86\n2 004 818 592,25\n1 699 026 894,47\n1 837 959 924,52\n12 124 252 579,26\n323 794 777,38\n3 044 604 553,80\n71 184 543,75\n26 630 992 658,97\nFeb\n1 156 065 718,20\n1 037 783 187,53\n1 369 731 749,12\n3 170 746 459,37\n114 038 016,39\n3 174 169 477,50\n2 227 190 946,76\n2 855 301 054,35\n15 834 462 125,05\n552 622 448,45\n4 294 792 965,31\n89 063 348,63\n36 904 967 496,65\nMar\n1 783 340 807,00\n1 442 504 457,60\n2 116 410 516,40\n4 588 105 383,90\n1 753 052 451,70\n4 712 657 212,60\n3 465 873 456,30\n3 573 833 122,50\n20 373 593 827,70\n1 006 777 059,10\n8 454 899 690,30\n100 278 506,80\n53 371 326 491,90\n*Apr\n1 476 289,07\n893 193,94\n1 388 298,43\n4 283 881,29\n1 092 218,87\n2 578 995,23\n2 513 192,87\n2 626 884,44\n11 782 151,57\n511 608,90\n5 775 024,95\n62 998,90\n34 984 738,48\n*May \n1 608 650,70\n1 037 123,00\n986 367,13\n3 197 388,56\n1 234 670,10\n3 669 306,62\n2 777 961,02\n2 424 631,17\n13 413 072,92\n726 100,95\n5 909 740,37\n55 506,53\n37 040 519,06\n*Jun\n1 578 119,27\n1 011 831,06\n1 759 648,05\n3 190 728,10\n1 134 620,40\n3 473 307,05\n2 999 644,43\n3 196 350,73\n15 181 074,61\n630 237,37\n5 302 910,12\n65 954,20\n39 524 425,40\n*Jul\n1 709 191,73\n1 060 814,63\n1 786 754,78\n4 244 435,10\n1 695 144,92\n3 842 095,49\n2 685 658,39\n3 860 697,95\n15 154 833,77\n494 408,07\n5 163 064,26\n152 575,18\n41 849 674,27\n*Aug\n1 881 831,48\n1 096 949,95\n1 756 800,10\n4 115 344,75\n1 560 883,79\n5 160 947,59\n3 104 912,00\n2 628 465,51\n14 680 525,46\n510 741,77\n4 692 301,87\n147 285,45\n41 336 989,72\n*Sep\n2 676 045,30\n2 231 428,03\n3 076 033,40\n6 657 466,11\n2 618 571,09\n6 677 406,59\n4 328 506,20\n3 749 838,40\n26 389 976,50\n867 911,20\n8 373 719,22\n219 988,31\n67 866 890,36\n*Oct\n3 485 504,59\n2 567 255,56\n3 535 607,03\n7 474 589,94\n3 299 698,46\n7 968 221,02\n5 044 419,36\n5 097 867,03\n29 458 757,35\n1 018 065,78\n9 462 752,69\n220 427,14\n78 633 165,96\n*Nov\n3 092 857,19\n2 583 575,64\n3 658 337,22\n6 311 484,89\n3 319 494,63\n7 425 250,57\n6 381 558,42\n4 761 639,77\n27 173 979,25\n1 133 673,74\n8 782 149,64\n200 228,74\n74 824 229,70\n*Dec\n3 246 075,75\n3 000 089,39\n3 491 754,69\n6 900 913,48\n3 547 897,26\n7 345 227,12\n6 716 997,93\n4 549 007,97\n27 260 521,53\n1 099 879,74\n10 022 447,18\n355 894,47\n77 536 706,51\n2025\n*Jan\n2 906 778,30\n3 263 210,15\n3 335 010,28\n6 226 024,85\n3 652 381,28\n8 401 231,92\n6 022 841,93\n4 820 773,49\n27 794 296,00\n1 020 418,08\n9 522 377,98\n214 322,39\n77 179 666,65\n*Feb\n3 148 260,00\n2 765 476,21\n2 386 768,37\n6 142 552,78\n3 733 009,01\n8 301 324,64\n5 391 986,88\n4 799 925,63\n27 396 588,33\n1 120 196,78\n10 349 018,64\n257 727,50\n75 792 834,75\n*Mar\n2 931 379,17\n2 536 384,45\n2 998 500,17\n7 205 270,81\n4 098 816,70\n9 412 388,16\n5 090 011,12\n5 298 903,78\n30 409 375,81\n1 367 930,91\n10 495 733,30\n291 454,26\n82 136 148,64\n*Apr\n3 386 026,90\n2 914 075,14\n3 289 407,24\n8 086 383,88\n4 171 684,56\n10 519 094,01\n5 681 605,01\n5 683 058,56\n29 468 736,33\n1 483 286,46\n12 710 551,63\n251 262,54\n87 645 172,24\n*May\n3 791 778,73\n3 137 191,75\n4 015 525,94\n8 522 205,13\n4 083 039,56\n10 506 322,87\n6 181 631,24\n5 246 061,22\n33 512 835,39\n1 339 582,73\n13 286 284,33\n245 907,53\n93 868 366,41\n*Jun\n4 014 093,60\n3 535 586,92\n4 498 509,41\n8 172 595,07\n4 663 956,29\n11 061 597,23\n7 103 169,60\n7 369 633,91\n33 675 926,44\n1 350 750,73\n14 041 884,59\n249 641,43\n99 737 345,22\n*Jul\n3 720 611,16\n3 264 199,67\n4 187 885,93\n7 663 562,57\n4 338 130,51\n11 059 181,15\n6 952 371,00\n6 841 436,42\n31 002 206,47\n1 401 103,60\n13 912 098,40\n249 684,34\n94 592 471,21\n*Aug\n4 067 028,19\n3 593 726,17\n4 621 438,31\n7 757 110,09\n4 870 995,71\n10 663 643,86\n7 009 097,60\n6 845 630,99\n33 663 827,18\n1 515 405,31\n13 535 691,17\n392 861,63\n98 536 456,22\n*Sep\n3 578 478,45\n3 656 834,56\n4 589 839,49\n7 619 973,61\n4 876 364,92\n11 278 677,66\n6 905 187,76\n7 218 138,56\n35 474 081,78\n1 766 880,44\n13 855 223,42\n328 883,65\n101 148 564,30\n*Oct\n3 719 594,69\n4 039 445,93\n3 059 923,54\n7 920 315,73\n3 219 088,24\n6 097 592,23\n7 593 611,16\n7 664 249,48\n36 145 416,07\n1 736 355,29\n13 980 066,86\n27 216 071,31\n122 391 730,52\n*Nov\n3 420 665,56\n3 832 735,79\n3 152 068,13\n8 015 114,34\n2 388 782,34\n6 007 260,87\n6 908 304,95\n7 326 359,41\n32 629 297,31\n1 500 594,37\n14 012 001,61\n25 980 428,94\n115 173 613,61\n*Dec\n3 689 171,21\n3 769 507,03\n3 288 425,32\n8 404 247,29\n2 749 942,28\n7 777 801,42\n7 186 265,58\n7 262 212,22\n34 556 263,14\n1 794 763,76\n14 716 166,65\n27 344 296,57\n122 539 062,46\n2026\n*Jan\n3 682 192,47\n4 088 010,74\n3 612 481,48\n8 604 322,16\n3 171 682,92\n9 122 783,99\n7 142 539,29\n7 306 748,38\n36 129 035,74\n1 688 289,91\n14 014 354,01\n28 464 239,66\n127 026 680,76\n*Feb\n3 669 786,27\n4 078 474,38\n3 515 030,32\n8 638 174,86\n3 171 706,10\n9 122 788,25\n7 097 559,85\n7 307 146,41\n36 213 343,10\n1 685 454,66\n14 070 398,49\n28 464 239,66\n127 034 102,35\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \nZWG ('000)\n \n \n23 \n \n \n \nMinimum\nMaximum\nMinimum\nMaximum\n2022\nJan\n39,32\n57,26\n39,62\n39,62\nFeb\n40,55\n57,28\n64,02\n64,02\nMar\n40,74\n57,83\n43,88\n43,88\nApr\n38,15\n59,59\n45,56\n45,56\nMay\n38,01\n59,70\n47,25\n47,25\nJun\n38,45\n60,09\n48,25\n48,25\nJul\n82,75\n123,71\n165,45\n165,45\nAug\n88,46\n123,46\n155,96\n155,96\nSep\n98,07\n123,64\n158,46\n158,46\nOct\n99,37\n127,72\n115,26\n115,26\nNov\n99,03\n127,58\n110,97\n110,97\nDec\n99,02\n125,64\n110,83\n110,83\n2023\nJan\n90,05\n125,64\n116,03\n116,03\nFeb\n60,12\n125,64\n80,88\n80,88\nMar\n74,35\n110,30\n81,46\n81,46\nApr\n74,48\n105,75\n86,96\n86,96\nMay\n77,86\n107,41\n83,61\n83,61\nJun\n76,33\n103,85\n92,64\n92,64\nJul\n77,82\n103,56\n94,80\n94,80\nAug\n77,63\n102,79\n93,18\n93,18\nSep\n76,49\n100,20\n92,69\n92,69\nOct\n71,72\n102,10\n92,43\n92,43\nNov\n70,15\n101,53\n93,15\n93,15\nDec\n69,02\n101,71\n93,77\n93,77\n2024\nJan\n70,18\n100,81\n95,24\n95,24\nFeb\n76,06\n99,20\n93,76\n166,71\nMar\n73,43\n98,46\n91,40\n165,42\n*Apr\n25,91\n32,10\n24,29\n32,52\n*May\n25,17\n31,72\n24,52\n32,65\n*Jun\n24,89\n31,19\n24,46\n33,04\n*Jul\n24,69\n30,62\n24,44\n32,21\n*Aug\n24,42\n30,51\n24,15\n32,43\n*Sep\n24,27\n30,31\n23,92\n32,76\n*Oct\n38,49\n45,17\n36,80\n45,43\n*Nov\n39,25\n45,63\n34,29\n43,88\n*Dec\n41,03\n46,47\n39,91\n45,64\n2025\n*Jan\n41,82\n47,35\n40,13\n46,08\n*Feb\n43,00\n48,60\n40,45\n45,68\n*Mar\n42,33\n47,97\n40,42\n46,11\n*Apr\n42,16\n47,82\n40,43\n46,21\n*May\n43,66\n48,93\n40,27\n46,51\n*Jun\n42,34\n48,06\n40,51\n46,77\n*Jul\n42,50\n48,23\n40,46\n46,43\n*Aug\n43,33\n48,96\n40,39\n46,34\n*Sep\n43,45\n49,06\n40,45\n46,22\n*Oct\n43,54\n49,18\n40,46\n46,40\n*Nov\n43,62\n49,30\n40,49\n46,75\n*Dec\n43,50\n49,23\n40,40\n46,86\n2026\n*Jan\n43,57\n49,46\n40,43\n47,43\n*Feb\n43.62\n49.56\n40.35\n46.58\nSource: Reserve Bank of Zimbabwe, 2026\n*Lending rates are for ZiG loans\nIndividuals \nCorporates\nEnd of\nWeighted Lending Rates\n \n \n24 \n \n \n \nMinimum\nMaximum\nMinimum\nMaximum\n2022\nJan\n3,66\n5,76\n13,16\n16,95\nFeb\n3,72\n6,29\n16,68\n16,84\nMar\n3,83\n5,94\n14,83\n16,95\nApr\n4,22\n6,35\n16,78\n18,53\nMay\n4,21\n6,35\n16,44\n18,42\nJun\n4,21\n6,35\n16,61\n19,05\nJul\n21,06\n23,44\n50,14\n54,58\nAug\n20,09\n20,25\n52,97\n57,29\nSep\n20,09\n20,25\n57,25\n61,08\nOct\n20,09\n20,25\n54,06\n60,55\nNov\n20,38\n20,53\n56,69\n60,87\nDec\n18,03\n18,03\n55,32\n60,08\n2023\nJan\n18,03\n18,03\n55,32\n60,08\nFeb\n18,03\n18,03\n55,32\n60,08\nMar\n34,01\n35,26\n68,06\n73,39\nApr\n36,00\n36,50\n63,06\n71,72\nMay\n35,33\n35,88\n61,31\n69,61\nJun\n35,33\n33,60\n59,18\n65,00\nJul\n34,29\n35,29\n61,67\n69,44\nAug\n34,29\n35,60\n57,67\n70,35\nSep\n34,29\n35,60\n61,67\n69,33\nOct\n34,29\n35,60\n61,67\n70,35\nNov\n35,00\n38,27\n60,81\n69,76\nDec\n34,38\n37,13\n57,94\n65,65\n2024\nJan\n33,75\n37,13\n56,06\n65,65\nFeb\n33,75\n37,13\n56,06\n65,65\nMar\n33,75\n37,13\n56,28\n64,78\n*Apr\n5,22\n5,34\n5,51\n6,04\n*May\n3,75\n3,88\n5,26\n5,78\n*Jun\n3,75\n3,88\n5,27\n5,94\n*Jul\n3,75\n3,88\n5,26\n5,83\n*Aug\n3,75\n3,88\n5,27\n5,89\n*Sep\n3,75\n3,88\n5,27\n5,94\n*Oct\n3,75\n3,88\n5,41\n7,19\n*Nov\n3,75\n3,88\n4,82\n6,19\n*Dec\n3,54\n3,38\n5,67\n8,15\n2025\n*Jan\n3,54\n3,38\n5,67\n8,15\n*Feb\n3,81\n4,14\n5,95\n8,87\n*Mar\n3,81\n4,14\n5,95\n8,87\n*Apr\n3,81\n4,14\n5,95\n8,93\n*May\n3,81\n4,14\n6,09\n9,62\n*Jun\n3,81\n4,14\n5,95\n9,21\n*Jul\n3,67\n3,78\n6,21\n9,37\n*Aug\n3,75\n3,86\n6,90\n10,48\n*Sep\n3,75\n4,08\n6,90\n10,79\n*Oct\n3,75\n4,08\n6,63\n11,10\n*Nov\n3,75\n4,08\n6,90\n10,79\n*Dec\n3,75\n4,08\n6,90\n10,79\n2026\n*Jan\n3,81\n4,14\n6,62\n10,51\n*Feb\n3.81\n4.14\n6.87\n10.76\nSource: Reserve Bank of Zimbabwe, 2026\n* Deposit rates depict the range of rates qouted by banks. \n*Deposit rates are for ZiG deposits\nSAVINGS\n3 MONTHS\nTABLE 8.2 : COMMERCIAL BANKS DEPOSIT RATES (percent per annum)\n \n \n25 \n \n \n \nWEIGHTS\n4,90\n4,35\n27,62\n5,29\n1,42\n8,39\n2,65\n2,27\n4,25\n1,08\n6,46\n68,70\n31,30\n100\n2022\nJan\n1,08\n0,64\n2,14\n0,42\n0,71\n0,43\n1,51\n12,08\n0,94\n1,90\n0,11\n1,68\n2,53\n1,90\nFeb\n1,82\n3,39\n1,89\n1,79\n0,68\n1,08\n0,60\n0,92\n0,35\n1,39\n1,69\n1,76\n3,43\n2,20\nMar\n2,59\n2,24\n0,77\n1,22\n0,96\n5,86\n2,27\n0,82\n0,15\n1,02\n-0,06\n1,67\n3,05\n2,04\nApr\n3,38\n1,68\n14,21\n5,59\n1,77\n1,93\n1,73\n1,76\n2,91\n6,05\n1,87\n7,17\n6,94\n7,11\nMay\n3,70\n8,73\n2,02\n1,21\n2,46\n3,36\n2,47\n2,06\n0,48\n3,33\n3,78\n3,12\n9,56\n4,85\nJun\n8,20\n7,94\n12,49\n10,84\n13,72\n5,65\n4,95\n6,63\n4,63\n5,35\n9,86\n9,85\n17,32\n11,95\nJul\n4,57\n1,91\n8,66\n5,87\n3,74\n2,16\n1,21\n2,64\n11,86\n2,00\n2,15\n5,88\n12,09\n7,71\nAug\n3,71\n2,47\n2,01\n1,44\n1,98\n1,59\n1,91\n1,12\n0,41\n1,21\n2,93\n2,02\n4,94\n2,91\nSep\n-2,39\n-1,80\n5,21\n-3,33\n-0,66\n-1,20\n10,12\n0,36\n8,21\n-1,80\n-1,68\n1,99\n-3,23\n0,36\nOct\n0,81\n1,31\n6,74\n1,83\n0,72\n0,88\n2,83\n1,21\n0,10\n0,72\n0,68\n3,29\n2,10\n2,93\nNov\n-0,23\n0,35\n0,34\n0,60\n0,85\n0,25\n4,30\n0,48\n16,78\n19,32\n0,85\n1,71\n0,23\n1,27\nDec\n0,39\n0,76\n0,20\n-0,24\n0,03\n-0,15\n3,91\n-0,10\n0,00\n0,73\n-0,23\n0,28\n1,55\n0,66\n2023\nJan\n0,17\n-0,62\n0,81\n0,34\n0,26\n0,45\n-2,36\n0,45\n0,06\n-0,58\n0,54\n0,33\n-0,77\n0,00\nFeb\n-3,59\n-1,56\n-3,56\n-1,27\n-1,02\n-4,40\n-1,81\n-2,19\n0,06\n-3,63\n-7,55\n-3,40\n-4,54\n-3,73\nMar\n-0,57\n-0,46\n-0,01\n-0,71\n-0,10\n-0,13\n0,44\n-0,24\n0,16\n-0,16\n-0,42\n-0,18\n-0,66\n-0,32\nApr\n1,05\n0,05\n2,79\n-0,18\n0,92\n0,18\n0,59\n0,43\n0,53\n0,35\n0,55\n1,36\n1,96\n1,54\nMay\n3,05\n0,34\n3,03\n-0,08\n2,87\n1,74\n6,10\n1,65\n1,19\n0,99\n2,35\n2,34\n3,37\n2,64\nJun\n11,74\n0,93\n14,88\n-0,85\n9,19\n5,27\n23,88\n5,15\n3,07\n3,15\n6,58\n9,53\n18,23\n12,10\nJul\n1,68\n0,51\n0,36\n0,56\n-0,34\n0,69\n0,68\n-0,11\n1,04\n2,82\n1,11\n0,65\n1,85\n1,03\nAug\n-1,11\n-0,11\n-2,00\n-0,19\n-0,02\n-0,02\n-0,61\n-0,53\n-0,45\n-0,40\n-1,37\n-1,12\n-1,83\n-1,34\nSep\n0,32\n0,04\n0,34\n0,30\n-0,38\n0,63\n5,77\n-0,21\n5,97\n-0,10\n0,91\n0,91\n1,05\n0,95\nOct\n1,91\n1,10\n4,96\n0,54\n1,89\n2,81\n-2,69\n0,43\n-4,21\n0,53\n2,43\n2,48\n2,42\n2,46\nNov\n1,94\n0,60\n8,93\n-0,36\n2,45\n1,30\n3,24\n0,79\n4,28\n-0,67\n1,07\n4,39\n4,89\n4,54\nDec\n3,49\n1,41\n5,40\n0,63\n0,55\n0,86\n0,71\n1,92\n0,22\n1,07\n1,95\n2,90\n8,64\n4,70\n2024\nJan\n2,65\n-2,53\n5,48\n-1,30\n-3,17\n11,61\n-8,22\n-3,90\n5,52\n0,78\n-3,36\n2,50\n15,01\n6,58\nFeb\n3,31\n0,26\n4,84\n0,64\n2,77\n2,47\n8,40\n2,25\n1,67\n1,15\n3,35\n2,98\n9,83\n5,39\nMar\n2,48\n0,76\n4,89\n0,62\n2,44\n2,39\n10,08\n2,14\n2,02\n1,75\n2,85\n2,48\n8,13\n4,89\nApr\n1,35\n0,66\n3,69\n0,28\n0,77\n1,01\n2,60\n0,18\n6,85\n-0,26\n0,87\n4,19\n4,19\n2,94\n*May\n-6,05\n-1,36\n0,54\n-3,09\n-1,14\n-0,73\n0,65\n-2,60\n0,00\n-0,90\n-2,82\n-0,99\n-5,55\n-2,42\n*Jun\n-0,48\n0,82\n0,08\n0,21\n0,44\n0,84\n0,33\n-0,03\n0,17\n0,04\n0,21\n0,22\n-0,38\n0,04\n*Jul\n0,57\n0,89\n0,38\n-0,11\n0,45\n-0,45\n-2,41\n0,06\n0,37\n0,22\n0,09\n0,14\n-0,73\n-0,13\n*Aug\n2,31\n1,57\n0,20\n2,07\n1,19\n2,72\n-0,06\n1,41\n0,49\n1,24\n2,11\n1,14\n2,15\n1,44\n*Sep\n11,10\n3,65\n1,14\n6,71\n4,01\n5,70\n2,87\n6,26\n0,86\n4,45\n7,46\n3,89\n10,15\n5,78\n*Oct\n55,63\n44,94\n16,79\n39,81\n50,55\n38,72\n42,19\n49,16\n3,69\n30,79\n54,02\n31,75\n49,25\n37,25\n*Nov\n15,83\n15,10\n2,30\n15,16\n15,13\n13,80\n6,82\n17,47\n4,67\n10,69\n14,76\n9,67\n15,66\n11,72\n*Dec\n4,07\n6,71\n1,49\n3,19\n3,69\n3,57\n3,29\n2,46\n6,03\n3,61\n3,52\n3,19\n4,56\n3,67\n2025\n*Jan\n6,85\n4,51\n2,80\n30,66\n7,15\n3,96\n1,81\n7,91\n1,54\n0,00\n2,41\n5,75\n6,85\n10,50\n*Feb\n-0,32\n0,58\n0,22\n0,81\n0,93\n0,46\n0,57\n0,42\n1,25\n0,80\n-0,63\n0,27\n0,81\n0,46\n*Mar\n0,83\n0,15\n0,00\n-0,13\n0,93\n0,34\n-0,25\n-1,08\n2,43\n-0,53\n-0,22\n0,16\n-0,46\n-0,06\n*Apr\n1,31\n0,88\n1,67\n0,26\n1,17\n0,66\n-0,80\n1,05\n0,87\n2,92\n0,85\n1,11\n-0,25\n0,64\n*May\n1,14\n0,88\n0,20\n0,61\n1,58\n0,25\n-0,52\n0,35\n0,82\n0,04\n0,41\n0,58\n1,62\n0,93\n*Jun\n0,09\n0,77\n0,29\n0,70\n0,91\n0,75\n2,66\n0,45\n0,78\n0,19\n0,35\n0,53\n-0,21\n0,28\n*Jul\n0,36\n1,21\n5,44\n0,11\n0,68\n1,58\n-0,75\n0,60\n-0,46\n0,40\n-0,46\n2,29\n0,18\n1,57\n*Aug\n0,07\n1,17\n-0,01\n0,33\n1,54\n1,47\n3,11\n-0,06\n4,03\n2,78\n-0,07\n0,64\n-0,07\n0,40\n*Sep\n-0,07\n-0,26\n-0,66\n-0,69\n-0,39\n-1,32\n-0,06\n0,47\n0,28\n-0,53\n0,05\n-0,48\n0,21\n-0,25\n*Oct\n-0,51\n-0,67\n-2,51\n-0,17\n-0,24\n0,98\n1,74\n-0,18\n0,00\n0,09\n-0,22\n-0,90\n0,71\n-0,36\n*Nov\n-0,23\n-0,30\n0,08\n0,00\n0,97\n0,45\n-0,03\n-0,59\n-0,72\n-0,65\n-0,36\n-0,03\n0,65\n0,20\n*Dec\n-0,63\n-0,18\n0,20\n0,15\n-0,48\n0,14\n-0,01\n0,13\n-0,04\n0,79\n0,03\n0,04\n0,57\n0,23\n2026\n*Jan\n2,45\n0,92\n-0,12\n-0,58\n-1,22\n-0,29\n-0,73\n-1,42\n1,29\n-0,06\n-1,30\n-0,05\n0,11\n0,01\n*Feb\n-0,28\n0,00\n-0,02\n0,42\n0,13\n0,57\n0,48\n1,02\n0,60\n1,01\n1,01\n0,28\n-0,13\n0,14\nSource: Zimstat, 2026\n*Statistics are in ZiG\nTOTAL NON \nFOOD\nALCOHOLIC \nBEVERAGES & \nTOBACCO\nFURNITURE AND \nEQUIPMENT\nHEALTH\nTRANSPORT\nCOMMUNICATION\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nFOOD & NON \nALCOHOLIC \nBEVERAGES\nALL \nITEMS\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & OTHER \nFUELS\nCLOTHING & \nFOOTWEAR\nRECREATION & \nCULTURE\nRESTAURANTS & \nHOTELS\nEDUCATION\nMISC. GOODS & \nSERVICES\n \n \n26 \n \n \n \nFOOD \nINFLATION\nWEIGHTS\n4,90\n4,35\n27,62\n5,29\n1,42\n8,39\n2,65\n2,27\n4,25\n1,08\n6,46\n68,70\n31,30\n100\n2021\nJan\n20,60\n-2,07\n36,36\n-1,28\n10,32\n-3,60\n128,10\n-5,01\n-21,25\n-30,63\n-23,35\n12,89\n17,44\n14,03\nFeb\n39,34\n9,50\n38,02\n12,01\n25,35\n8,60\n82,62\n14,90\n-32,54\n-21,66\n-17,59\n18,72\n29,84\n21,45\nMar\n14,17\n6,58\n29,52\n3,24\n5,87\n19,12\n92,07\n6,36\n6,81\n-2,73\n-7,44\n18,40\n22,51\n19,45\nApr\n14,30\n5,98\n30,11\n3,19\n6,13\n19,96\n93,18\n5,32\n25,12\n-1,35\n-10,56\n19,42\n22,82\n20,29\nMay\n15,83\n14,44\n20,88\n4,68\n16,10\n25,82\n102,08\n55,83\n36,63\n-3,32\n-9,20\n20,10\n22,47\n20,70\nJun\n12,75\n14,64\n22,39\n15,03\n9,18\n12,04\n70,11\n42,04\n30,41\n4,24\n-7,69\n19,04\n28,60\n21,31\nJul\n6,39\n11,64\n23,80\n10,15\n3,85\n6,95\n52,67\n52,59\n39,02\n13,15\n8,80\n18,71\n15,01\n17,76\nAug\n13,21\n12,09\n24,34\n11,12\n5,35\n6,76\n15,74\n59,33\n35,23\n16,34\n4,54\n18,18\n18,05\n18,15\nSep\n14,96\n12,70\n25,60\n16,41\n6,74\n12,34\n14,92\n60,58\n36,28\n21,35\n9,67\n20,76\n21,15\n20,86\nOct\n17,72\n16,64\n21,34\n23,27\n7,60\n13,62\n22,43\n60,80\n38,87\n20,39\n10,27\n21,05\n24,80\n21,99\nNov\n16,80\n14,54\n22,11\n24,82\n6,57\n13,72\n27,83\n60,49\n15,38\n17,92\n11,34\n20,15\n24,28\n21,19\nDec\n17,38\n12,07\n20,56\n24,61\n6,62\n10,09\n28,48\n61,86\n16,79\n14,71\n12,21\n19,00\n21,96\n19,76\n2022\nJan\n15,38\n11,03\n21,29\n20,02\n4,81\n7,80\n28,71\n82,72\n15,93\n17,46\n8,22\n18,46\n21,56\n19,26\nFeb\n16,00\n15,14\n25,74\n22,76\n3,87\n7,80\n31,58\n66,63\n18,83\n20,23\n9,44\n20,73\n23,23\n21,38\nMar\n18,84\n17,81\n25,15\n19,07\n7,41\n13,39\n28,67\n68,48\n18,98\n20,57\n9,57\n21,54\n26,32\n22,80\nApr\n22,71\n20,48\n42,29\n25,78\n9,04\n14,77\n30,15\n73,15\n4,52\n26,09\n15,50\n29,14\n34,75\n30,60\nMay\n26,46\n27,91\n43,15\n26,23\n11,74\n17,68\n33,27\n24,17\n3,66\n27,29\n19,09\n30,37\n47,22\n34,70\nJun\n34,62\n32,92\n47,25\n30,78\n25,21\n23,62\n38,51\n30,74\n3,41\n30,29\n28,37\n36,30\n68,72\n44,47\nJul\n38,99\n33,16\n59,19\n38,55\n30,80\n25,88\n40,04\n33,42\n15,74\n32,91\n29,63\n43,58\n89,00\n54,99\nAug\n41,70\n35,49\n60,73\n39,17\n31,89\n26,54\n37,81\n34,54\n16,27\n31,74\n31,34\n44,88\n96,89\n57,92\nSep\n35,93\n32,94\n66,48\n32,64\n30,19\n25,02\n45,99\n33,85\n26,81\n27,66\n27,17\n45,91\n86,25\n56,09\nOct\n35,00\n33,64\n76,23\n32,71\n30,19\n24,29\n39,72\n34,98\n24,31\n26,52\n26,89\n48,43\n83,72\n57,47\nNov\n33,55\n33,65\n74,26\n32,03\n30,42\n23,10\n39,54\n35,12\n55,96\n48,48\n26,56\n49,54\n78,43\n57,06\nDec\n30,92\n33,36\n72,02\n30,01\n29,63\n23,87\n44,62\n33,64\n55,91\n47,88\n23,73\n48,22\n77,66\n55,93\n2023\nJan\n29,74\n31,69\n69,78\n29,91\n29,05\n23,89\n39,11\n19,78\n54,56\n44,29\n24,25\n46,26\n71,94\n53,03\nFeb\n22,86\n25,38\n60,69\n26,01\n26,87\n23,89\n35,79\n16,09\n54,11\n37,14\n12,96\n38,85\n58,69\n44,14\nMar\n19,07\n22,07\n59,46\n23,60\n25,55\n23,89\n33,36\n14,86\n54,13\n35,54\n12,56\n36,31\n52,99\n40,80\nApr\n16,38\n20,11\n43,52\n16,85\n24,51\n23,89\n31,87\n13,36\n50,56\n28,25\n11,10\n28,93\n45,87\n33,48\nMay\n15,66\n10,84\n44,93\n15,37\n25,01\n23,89\n36,54\n12,90\n51,63\n25,34\n9,57\n27,96\n37,63\n30,68\nJun\n19,45\n3,65\n48,01\n3,20\n20,03\n23,89\n61,17\n11,33\n49,36\n22,73\n6,31\n27,58\n38,70\n30,85\nJul\n16,14\n2,22\n36,71\n-1,98\n15,30\n23,89\n60,33\n8,34\n34,91\n23,72\n5,22\n21,28\n26,03\n22,74\nAug\n10,74\n-0,36\n31,33\n-3,54\n13,04\n23,89\n56,36\n6,57\n33,75\n21,75\n0,82\n17,55\n17,90\n17,66\nSep\n13,82\n1,52\n25,26\n0,08\n13,36\n23,89\n50,18\n5,97\n30,99\n23,86\n3,48\n16,31\n23,12\n18,36\nOct\n15,06\n1,31\n23,16\n-1,20\n14,66\n7,28\n42,11\n5,15\n25,35\n23,64\n5,28\n15,40\n23,50\n17,82\nNov\n17,55\n1,56\n33,71\n-2,14\n16,48\n8,40\n40,66\n5,48\n11,94\n2,93\n5,52\n18,43\n29,24\n21,63\nDec\n21,19\n2,22\n40,65\n-1,28\n17,09\n9,49\n36,33\n7,61\n12,19\n3,27\n7,82\n21,52\n38,26\n26,52\n2024\nJan\n24,18\n0,25\n47,17\n-2,90\n13,08\n21,65\n28,14\n2,95\n18,31\n4,68\n3,64\n24,16\n60,25\n34,84\nFeb\n33,06\n2,10\n59,99\n-1,02\n17,41\n30,39\n41,46\n7,62\n20,22\n9,87\n15,86\n32,35\n84,37\n47,62\nMar\n37,15\n3,35\n67,82\n0,31\n20,39\n33,68\n55,04\n10,19\n22,44\n11,97\n19,67\n36,58\n100,68\n55,34\nApr\n37,55\n3,98\n69,28\n0,77\n20,20\n34,79\n58,13\n9,93\n30,14\n11,30\n20,06\n42,42\n105,07\n57,48\n2025\n*Apr\n113,35\n96,45\n65,25\n89,90\n102,12\n82,73\n70,72\n92,09\n22,68\n66,55\n106,90\n77,85\n102,86\n85,68\n*May\n129,68\n100,90\n64,69\n97,15\n107,69\n86,74\n68,74\n97,91\n23,68\n68,14\n113,77\n80,67\n118,27\n92,06\n*Jun\n130,99\n100,81\n65,04\n98,10\n108,68\n86,58\n72,66\n98,85\n24,44\n68,39\n114,06\n81,23\n118,65\n92,52\n*Jul\n130,50\n101,45\n73,37\n98,55\n109,16\n90,38\n75,58\n99,93\n23,42\n68,69\n112,89\n95,79\n120,66\n95,79\n*Aug\n125,47\n100,66\n73,00\n95,15\n109,89\n88,08\n81,14\n97,03\n27,76\n71,25\n108,36\n84,22\n115,87\n93,78\n*Sep\n102,80\n93,09\n69,93\n81,62\n101,02\n75,60\n75,97\n86,29\n27,03\n63,08\n94,00\n76,64\n96,40\n82,74\n*Oct\n29,65\n32,33\n41,84\n29,69\n33,20\n27,83\n25,91\n24,67\n22,50\n24,80\n25,68\n32,74\n32,53\n32,67\n*Nov\n11,68\n14,61\n38,76\n12,62\n16,82\n12,82\n17,83\n5,51\n16,20\n12,01\n9,12\n21,00\n15,34\n18,99\n*Dec\n6,64\n7,22\n36,99\n9,30\n12,12\n9,10\n14,07\n3,10\n9,54\n8,97\n5,43\n17,31\n10,94\n15,04\n2026\n*Jan\n4,54\n5,25\n4,73\n1,42\n6,54\n6,84\n4,93\n0,10\n10,95\n6,35\n-1,60\n4,20\n3,95\n4,11\n*Feb\n4,59\n4,65\n4,48\n1,03\n5,70\n6,96\n4,83\n-2,32\n10,23\n6,57\n0,02\n4,21\n2,98\n3,78\nSource: Zimstat, 2026\n*Statistics are in ZiG\nALL ITEMS\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nNON-FOOD INFLATION\nHEALTH\nTRANSPORT\nCOMMUNICATION\nEDUCATION\nALCOHOLIC \nBEVERAGES \n& TOBACCO \nCLOTHING \n& \nFOOTWEAR\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & \nOTHER FUELS\nFURNITURE \nAND \nEQUIPMENT\nRECREATION \n& CULTURE\nRESTAURANTS \n& HOTELS\nMISC. \nGOODS & \nSERVICES\nTOTAL NON \nFOOD\nFOOD & NON \nALCOHOLIC \nCEVERAGES \n \n \n27 \n \n \n \n2022\nJan\n115,422\n7,4069\n9,8109\n0,9995\n128,8401\n154,8332\nFeb\n124,019\n8,0738\n10,7214\n1,0732\n138,2625\n165,6148\nMar\n142,424\n9,8091\n12,4763\n1,1665\n159,0161\n186,8670\nApr\n159,348\n10,0334\n13,1064\n1,2217\n167,9530\n199,4880\nMay\n290,888\n18,7787\n24,3182\n2,2757\n312,8351\n367,1438\nJun\n366,269\n22,5194\n29,7593\n2,6861\n382,8607\n444,3572\nJul\n416,289\n25,2673\n33,2407\n3,1299\n425,1560\n507,7061\nAug\n546,825\n32,3336\n42,8164\n3,9498\n548,9033\n638,9381\nSep\n621,532\n34,5376\n46,4284\n4,2999\n609,9716\n691,9517\nOct\n632,137\n34,7014\n47,2839\n4,2742\n628,8500\n732,8998\nNov\n654,865\n38,5947\n51,0140\n4,7279\n677,5889\n784,3319\nDec\n671,447\n39,5836\n52,6414\n5,0669\n715,4935\n809,2610\n2023\nJan\n796,522\n45,7487\n61,8897\n6,1132\n863,6683\n983,1863\nFeb\n889,133\n48,1898\n66,7294\n6,5202\n941,1468\n1070,6489\nMar\n929,862\n52,0727\n71,3204\n6,9912\n1013,3634\n1151,6803\nApr\n1047,445\n57,1437\n79,4723\n7,7646\n1151,0384\n1309,3061\nMay\n2577,056\n130,3252\n186,5789\n18,4901\n2755,1310\n3192,3286\nJun\n5739,000\n306,2597\n425,5469\n39,6710\n6240,5886\n7250,9396\nJul\n4516,803\n255,8972\n346,4388\n31,8342\n4971,8704\n5801,8328\nAug\n4608,107\n246,2293\n343,3039\n31,5721\n5031,5916\n5860,1292\nSep\n5466,747\n288,5390\n396,3391\n36,6073\n5782,7246\n6680,6377\nOct\n5698,961\n301,1746\n417,7338\n37,9539\n6039,7584\n6920,5328\nNov\n5791,080\n309,3526\n429,6053\n39,3710\n6363,8242\n7330,4810\nDec\n6104,723\n329,1177\n455,4123\n43,1811\n6753,9598\n7783,5213\n2024\nJan\n10152,393\n555,5556\n745,3522\n65,3595\n10985,0050\n12870,8909\nFeb\n14912,829\n769,2308\n1082,9160\n99,0099\n16156,7220\n18886,3930\nMar\n22055,474\n1165,3008\n1610,0496\n145,7394\n23872,8448\n27868,1939\n*Apr\n13,4301\n0,7185\n0,9542\n0,0857\n14,3722\n16,8366\n*May\n13,3177\n0,7089\n0,9762\n0,0850\n14,4098\n16,9421\n*Jun\n13,7031\n0,7414\n1,0065\n0,0851\n14,6500\n17,3056\n*Jul\n13,7446\n0,7532\n1,0141\n0,0870\n14,9010\n17,6623\n*Aug\n13,7998\n0,7653\n1,0283\n0,0944\n15,2106\n17,8698\n*Sep\n14,9588\n0,8491\n1,1308\n0,1046\n16,6101\n19,7600\n*Oct\n26,7752\n1,5243\n2,0166\n0,1790\n29,1961\n34,9654\n*Nov\n25,7613\n1,4365\n1,9056\n0,1676\n27,3826\n32,8510\n*Dec\n25,6843\n1,4166\n1,8831\n0,1678\n26,9255\n32,5120\n2025\n*Jan\n26,1493\n1,3956\n1,8772\n0,1670\n27,0736\n32,3011\n*Feb\n26,7654\n0,6835\n1,9622\n0,1795\n29,0177\n34,6893\n*Mar\n26,6787\n1,4588\n1,9508\n0,1788\n28,5428\n34,4141\n*Apr\n26,8023\n1,4182\n1,9371\n0,1855\n30,0241\n33,8697\n*May\n26,8657\n1,4817\n1,9826\n0,1854\n30,2848\n35,8782\n*Jun\n26,9125\n1,4958\n1,9959\n0,1861\n30,6525\n36,2024\n*Jul\n26,8367\n1,5123\n1,9559\n0,1828\n31,3728\n36,2626\n*Aug\n26,7665\n1,5098\n1,8838\n0,1813\n31,1270\n35,9603\n*Sep\n26,6638\n1,5274\n1,8858\n0,1804\n31,2864\n36,0137\n*Oct\n26,5958\n1,5434\n1,8750\n0,1762\n31,0557\n35,6428\n*Nov\n26,3274\n1,5269\n1,8654\n0,1696\n29,2852\n34,5812\n*Dec\n26,1008\n1,5470\n1,8503\n0,1676\n30,5428\n34,9002\n2026\n*Jan\n25,5806\n1,6145\n1,8806\n0,1660\n30,4883\n35,1709\n*Feb\n25,5836\n1,5992\n1,8813\n0,1653\n30,4389\n34,7385\nSource: Reserve Bank of Zimbabwe, 2026\n TABLE 10 : SELECTED INTERNATIONAL EXCHANGE RATES\n*The Reserve Bank introduced a new currency ZiG on 5 April \n& recalibrated exchange rates to ZiG\nEND OF\nUSA DOLLAR\nSOUTH ARFICAN \nRAND\nBOTSWANA PULA\nJAPANESE YEN\nEURO\nPOUND \nSTERLING\n \n \n28 \n \n \n \nMarket Capitalisation\nAll Share Index*\nZWG millions\n2022\nJan\n12079,74\n8196,79\n3704,23\n82 402 101\n1 475 217,45\nFeb\n14990,42\n9300,03\n7979,35\n156 327 700\n1 863 028,60\nMar\n15858,92\n11289,34\n8186,00\n117 815 800\n1 964 738,42\nApr\n28391,75\n30527,28\n11366,89\n193 411 483\n3 547 347,52\nMay\n23072,46\n20021,24\n8211,45\n195 475 400\n2 893 011,70\nJune\n19791,94\n20021,24\n14570,16\n271 227 100\n2 439 165,45\nJuly\n16594,91\n20021,24\n23673,34\n239 937 180\n2 068 222,01\nAug\n13705,12\n15473,37\n8674,85\n139 225 500\n1 685 592,28\nSept\n14771,65\n18929,75\n5128,54\n137 092 750\n1 819 157,07\nOct\n15072,14\n23659,53\n8657,90\n201 566 548\n1 826 101,68\nNov\n14577,46\n25478,67\n7680,78\n90 311 600\n1 610 203,36\nDec\n19493,85\n25487,77\n27753,79\n472 926 200\n2 044 869,14\n2023\nJan\n22813,24\n25496,86\n11638,16\n102 792 200\n2 460 037,66\nFeb\n28548,02\n29207,92\n24410,54\n164 006 458\n2 576 324,76\nMar\n38568,48\n37359,78\n14262,67\n97 920 600\n3 381 456,06\nApr\n41391,62\n36393,55\n16756,85\n74 505 000\n3 482 408,54\nMay\n108195,29\n52765,85\n34867,41\n206 593 600\n8 939 058,47\nJun\n171408,90\n76960,49\n85279,40\n192 473 571\n13 987 476,83\nJul\n114746,13\n89512,59\n40846,72\n176 547 600\n9 171 346,28\nAug\n125134,79\n109159,36\n39214,53\n103 854 600\n9 723 577,74\nSep\n126642,42\n125531,67\n91310,72\n343 359 119\n9 873 493,87\nOct\n157083,06\n125531,67\n31773,08\n64 000 500\n12 576 665,45\nNov\n191271,68\n148883,44\n54864,31\n162 675 500\n15 311 628,01\nDec\n210833,92\n145542,27\n109727,94\n254 991 213\n16 812 914,36\n2024\nJan\n542743,66\n163733,73\n112532,73\n79 766 490\n43 459 150,79\nFeb\n525570,76\n216534,42\n103474,44\n73 940 200\n41 499 016,93\nMar\n873263,38\n218308,09\n123025,50\n54 297 600\n49 235 325,40\n*Apr\n98,82\n114,07\n22 304 969\n21 943 400\n28 571,12\n*May\n101,07\n114,07\n75 913 056\n58 831 200\n29 394,99\n*Jun\n128,64\n114,16\n99 811 029\n182 514 300\n38 710,43\n*Jul\n198,14\n253,49\n260 505 803\n93 603 100\n60 570,91\n*Aug\n200,49\n253,42\n164 625 191\n118 159 000\n61 448,73\n*Sep \n243,41\n251,68\n273 853 848\n257 091 400\n74 489,51\n*Oct\n289,12\n251,68\n502 844 478\n107 115 500\n89 605,28\n*Nov\n265,10\n235,38\n285 159 922\n72 864 500\n82 184,61\n*Dec\n217,58\n235,38\n225 234 022\n152 111 200\n66 241,20\n2025\n*Jan\n195,57\n229,61\n196 982 719\n187 781 200\n58 794,86\n*Feb\n204,06\n193,56\n506 135 991\n197 200 800\n62 060,95\n*Mar\n205,25\n180,43\n229 916 317\n92 886 500\n62 916,75\n*Apr\n191,95\n143,95\n268 269 085\n150 502 500\n58 411,66\n*May\n196,85\n145,40\n600 720 736\n269 991 681\n59 973,06\n*Jun\n197,23\n145,40\n532 262 807\n393 325 459\n60 971,48\n*Jul\n205,71\n144,85\n765 887 092\n429 345 471\n64 302,76\n*Aug\n208,72\n145,31\n689 801 108\n428 725 700\n65 354,76\n*Sep\n210,63\n123,58\n451 998 794\n95 397 473\n65 675,91\n*Oct\n213,68\n115,11\n390 818 131\n120 365 000\n67 708,46\n*Nov\n234,97\n109,09\n375 030 961\n83 164 380\n74 763,01\n*Dec\n277,86\n117,69\n358 174 079\n98 696 587\n87 257,33\n2026\n*Jan\n356,04\n117,69\n914 177 266\n982 355 100\n110 645,38\n*Feb\n359.11\n122.53\n24524867,10\n1482400,00\n111894,24\nSource: Zimbabwe Stock Exchange, 2026\n**As at 26 June 2020\n***The ZSE rebased indices to 100 in April 2024 following the introduction of the ZiG\n*Statistics are denominated in ZiG\n*All Share index was introduced in January, 2018\nTABLE 11: ZIMBABWE STOCK MARKET STATISTICS\nMining Index\n Market Turnover \nZWG \nVolume of Shares\nEND OF\n \n \n29 \n \n \n \nEND OF\nZETSS \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n255551,3\n21042,2\n2300,3\n35349,1\n66624,4\nFeb\n226335,8\n22882,6\n2288,9\n36434,4\n63598,2\nMar\n320422,1\n28569,9\n3316,6\n44524,0\n86463,9\nApr\n288958,8\n30071,5\n2807,0\n44131,6\n90580,4\nMay\n361427,1\n36765,1\n3193,7\n49745,8\n89471,3\nJun\n388757,5\n38540,1\n3200,0\n51437,4\n115145,7\nJul\n379659,9\n45808,1\n2489,1\n57565,8\n145027,0\nAug\n397539,0\n52853,9\n4086,0\n60908,4\n159206,6\nSep\n477933,6\n52262,7\n4179,5\n64139,2\n181194,8\nOct\n481180,9\n53165,9\n3839,9\n65329,0\n197972,5\nNov\n621896,7\n56025,3\n4877,0\n63017,5\n252407,9\nDec\n747035,6\n67903,9\n4705,5\n76511,6\n264749,2\n2022\nJan\n802677,7\n55961,6\n5074,7\n53456,3\n218545,3\nFeb\n672723,0\n59581,6\n5607,0\n66812,0\n238910,8\nMar\n961452,0\n75050,7\n7882,2\n82886,9\n342168,7\nApr\n976617,2\n89192,6\n8391,5\n89672,0\n293204,6\nMay\n1205990,0\n110807,3\n13712,8\n106881,8\n469185,2\nJune\n1601225,3\n134551,0\n18810,6\n123721,3\n618347,5\nJuly\n1754112,0\n170480,6\n20413,1\n172562,5\n713401,1\nAug\n2334295,0\n152343,4\n31418,6\n178188,9\n826377,1\nSep\n2793056,6\n177701,7\n35144,4\n202368,1\n872807,4\nOct\n2728731,3\n186478,9\n50202,3\n209758,0\n622412,8\nNov\n3370779,9\n202876,2\n61086,7\n213295,3\n734610,6\nDec\n3310814,9\n246783,6\n76872,0\n249516,4\n1106346,5\n2023\nJan\n3289379,3\n240010,3\n68386,7\n238455,3\n1107756,4\nFeb\n3050933,3\n219437,8\n73672,3\n245282,5\n1202998,5\nMar\n5068223,7\n308609,1\n85343,4\n328822,3\n1517972,6\nApr\n1594,5\n136,7\n31,9\n142,1\n602,9\nMay\n2511,4\n207,4\n69,3\n212,9\n1310,7\nJun\n6827,3\n353,1\n246,2\n484,4\n2657,6\nJul\n7147,5\n413,7\n216,7\n648,4\n2432,3\nAug\n7186,0\n407,4\n260,1\n576,5\n2499,2\nSep\n7479,9\n488,9\n309,5\n669,4\n3100,0\nOct\n7927,5\n506,1\n330,8\n786,1\n3466,4\nNov\n9479,0\n572,0\n360,8\n800,0\n3824,9\nDec\n10563,9\n722,4\n437,3\n1042,2\n4062,3\n2024\nJan\n11319,8\n763,3\n740,8\n1638,0\n8812,4\nFeb\n15327,4\n1143,5\n1072,2\n2212,8\n11833,0\nMar\n24185,4\n1575,6\n1786,8\n2219,1\n14945,0\n*Apr\n41317,5\n2063,0\n2797,1\n4754,9\n15996,5\n*May\n53741,3\n3335,6\n3355,4\n7058,0\n22545,4\n*Jun\n51046,4\n3281,7\n3230,9\n6470,4\n22040,1\n*Jul\n63526,1\n3956,0\n3646,3\n7361,7\n27328,4\n*Aug\n54975,9\n3973,7\n3937,3\n7555,9\n25760,6\n*Sep\n65045,5\n4685,2\n5331,4\n1194,1\n38798,2\n*Oct\n109554,7\n6900,1\n6836,3\n16082,3\n50983,1\n*Nov\n107345,1\n7074,6\n6940,4\n15645,3\n47876,4\n*Dec\n123594,8\n7954,5\n8665,2\n17068,5\n50613,2\n2025\n*Jan\n105337,9\n7252,4\n6858,9\n14579,5\n44760,8\n*Feb\n92208,7\n5961,2\n6364,9\n14208,9\n43833,1\n*Mar\n112646,3\n6785,3\n7339,8\n17156,0\n47320,6\n*Apr\n116945,5\n7294,4\n7046,2\n19678,2\n49770,4\n*May\n128946,5\n9194,3\n8439,4\n23187,8\n53674,7\n*Jun\n138127,3\n8384,0\n9486,4\n21162,1\n54257,1\n*Jul\n138187,6\n9025,2\n9523,3\n21930,1\n58804,4\n*Aug\n109473,9\n7154,9\n8818,4\n21485,6\n58556,4\n*Sep\n132722,3\n7080,7\n9387,7\n23110,2\n67610,3\n*Oct\n134725,7\n7722,3\n9876,5\n24887,4\n59362,4\n*Nov\n129416,8\n7942,7\n10352,2\n24452,5\n51850,3\n*Dec\n164856,4\n8708,9\n11967,8\n27927,4\n61921,6\n2026\n*Jan\n140128,22\n7433,76\n8891,72\n24584,75\n25482,10\n*Feb\n114518,15\n6211,23\n7690,21\n23345,43\n26914,83\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\nTABLE 12.1 : ZETSS AND RETAIL PAYMENTS \n Values of Transactions (ZWG Millions)\n \n \n30 \n \n \n \nEND OF\nZETSS \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n720,0\n9849,3\n229,0\n94691,4\n872,2\nFeb\n806,0\n12309,3\n527,8\n90078,0\n754,9\nMar\n1112,8\n15178,8\n751,0\n105272,0\n1003,7\nApr\n951,7\n15185,0\n605,5\n97253,3\n1040,1\nMay\n1029,8\n16511,3\n664,4\n103708,7\n994,8\nJun\n1076,9\n14797,9\n581,9\n99349,6\n982,1\nJul\n1028,2\n15217,6\n551,0\n102587,6\n980,8\nAug\n1045,0\n14624,5\n475,4\n105269,7\n955,8\nSep\n1193,1\n15397,6\n492,2\n104141,9\n2092,6\nOct\n1114,2\n18207,4\n434,5\n107294,6\n2342,6\nNov\n1144,9\n17435,9\n477,0\n98386,5\n2322,9\nDec\n1220,3\n20029,6\n519,5\n106428,6\n2580,6\n2022\nJan\n957,9\n15480,2\n439,9\n83661,8\n1902,9\nFeb\n981,0\n15190,4\n433,7\n78916,1\n1895,3\nMar\n1242,3\n16967,6\n519,1\n87501,1\n2128,6\nApr\n1073,0\n15906,2\n458,0\n82673,4\n1937,6\nMay\n1213,5\n16069,9\n477,8\n78385,2\n2001,2\nJune\n1190,3\n15304,7\n474,2\n75631,7\n1705,1\nJuly\n1115,8\n16063,8\n517,0\n88030,6\n1866,7\nAug\n1028,0\n13686,8\n489,1\n76957,8\n1623,7\nSep\n1084,6\n13084,7\n455,5\n71362,1\n2225,2\nOct\n969,3\n12986,8\n510,9\n67641,7\n1825,4\nNov\n1001,4\n12324,1\n499,9\n59151,5\n2430,2\nDec\n1013,6\n14316,9\n616,7\n60584,5\n2469,8\n2023\nJan\n918,9\n11734,0\n444,0\n48617,1\n1693,0\nFeb\n886,7\n10301,5\n479,9\n43326,5\n1895,8\nMar\n1092,6\n13217,0\n594,0\n50037,4\n1927,1\nApr\n907,6\n14375,1\n526,7\n47171,7\n1982,9\nMay\n1119,2\n12808,7\n576,7\n49143,2\n2233,6\nJun\n1050,2\n10190,6\n606,0\n45488,8\n1213,0\nJul\n942,7\n8226,8\n1777,1\n42648,8\n993,7\nAug\n888,0\n8434,6\n653,6\n42648,8\n977,5\nSep\n964,1\n9659,0\n703,6\n45148,7\n1061,4\nOct\n949,1\n9449,3\n619,0\n50640,6\n904,4\nNov\n924,5\n9525,7\n623,3\n52332,4\n1048,5\nDec\n924,5\n11846,0\n776,5\n56451,0\n1026,2\n2024\nJan\n914,9\n10017,9\n708,1\n52445,0\n882,8\nFeb\n889,7\n7868,7\n737,5\n51545,9\n904,2\nMar\n941,1\n7569,3\n728,4\n58151,4\n921,4\n*Apr\n791,8\n5729,5\n744,8\n30450,4\n938,0\n*May\n1046,6\n7950,1\n899,4\n42290,8\n1690,3\n*Jun\n927,3\n7224,2\n849,6\n41224,2\n1155,8\n*Jul\n1059,1\n8228,2\n920,9\n44159,4\n1318,9\n*Aug\n974,4\n8669,3\n966,0\n47536,9\n1233,1\n*Sep\n1009,7\n8369,3\n860,5\n49927,2\n1408,9\n*Oct\n1015,7\n8101,5\n866,9\n52795,2\n1447,5\n*Nov\n868,4\n7253,1\n864,4\n50820,5\n1359,2\n*Dec\n931,6\n8017,7\n1071,6\n50767,8\n1541,3\n2025\n*Jan\n839,5\n7381,3\n911,1\n46337,9\n1363,6\n*Feb\n815,5\n6229,8\n838,1\n44460,8\n1346,3\n*Mar\n917,4\n6777,0\n953,3\n53987,0\n1250,1\n*Apr\n872,0\n6052,9\n888,6\n54493,5\n1222,6\n*May\n959,3\n7667,0\n1027,7\n59206,5\n1531,9\n*Jun\n922,0\n7179,3\n1119,4\n56595,1\n1165,4\n*Jul\n983,4\n8005,7\n1110,5\n58630,8\n1172,7\n*Aug\n818,4\n6941,9\n1038,6\n61492,9\n1127,4\n*Sep\n987,3\n6560,0\n1057,7\n62386,1\n1200,5\n*Oct\n997,6\n7197,8\n1133,6\n67263,2\n1231,1\n*Nov\n827,6\n6598,3\n1093,5\n66386,8\n1311,2\n*Dec\n1025,3\n7520,5\n1300,3\n72925,5\n1457,4\n2026\n*Jan\n813,0\n6243,6\n1091,6\n67200,1\n441,1\n*Feb\n847,7\n5472,0\n989,6\n65127,5\n1342,4\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\n10,00\nTABLE 12.2 : ZETSS AND RETAIL PAYMENTS \n Volumes of Transactions (000's)\n \n \n31 \n \n \n \nEND OF\nEXPORTS\nIMPORTS\nTOTAL TRADE\nTRADE BALANCE\n2022\nJan\n543,9\n633,2\n-88,1\n-89,3\nFeb\n438,0\n630,1\n1068,1\n-192,2\nMar\n557,6\n713,8\n1271,4\n-156,2\nApr\n587,3\n637,2\n1224,5\n-49,9\nMay\n513,1\n714,4\n1227,6\n-201,3\nJun\n541,0\n751,4\n1292,3\n-210,4\nJul\n548,4\n728,2\n1276,6\n-179,9\nAug\n493,6\n759,9\n1253,4\n-266,3\nSep\n552,3\n765,3\n1317,6\n-213,1\nOct\n502,3\n770,5\n1272,8\n-268,2\nNov\n674,6\n802,2\n1476,8\n-127,5\nDec\n633,5\n772,6\n1406,1\n-139,1\n2023\nJan\n427,8\n633,8\n1061,6\n-206,0\nFeb\n435,9\n623,5\n1059,3\n-187,6\nMar\n515,3\n746,4\n1261,7\n-231,1\nApr\n555,5\n708,6\n1264,1\n-153,0\nMay\n654,2\n850,3\n1504,6\n-196,1\nJun\n641,5\n727,4\n1368,9\n-85,9\nJul\n603,2\n782,9\n1386,2\n-179,7\nAug\n649,8\n820,2\n1470,1\n-170,4\nSep\n678,1\n772,7\n1450,8\n-94,6\nOct\n831,9\n901,5\n1733,4\n-69,6\nNov\n681,4\n827,3\n1508,7\n-145,9\nDec\n550,6\n819,4\n1370,0\n-268,7\n2024\nJan\n539,9\n694,2\n1234,1\n-154,3\nFeb\n644,0\n729,8\n1369,4\n-81,4\nMar\n534,7\n721,2\n1255,9\n-186,5\nApr\n513,5\n710,5\n1223,9\n-197,0\nMay\n583,0\n741,0\n1324,0\n-157,9\nJun\n524,0\n746,7\n1270,7\n-222,7\nJul\n548,3\n823,1\n1371,4\n-274,8\nAug\n674,0\n872,8\n1546,8\n-198,7\nSep\n575,0\n782,6\n1357,5\n-207,6\nOct\n698,1\n835,8\n1533,9\n-137,7\nNov\n905,2\n952,1\n1857,4\n-46,9\nDec\n692,4\n889,3\n1581,7\n-196,9\n2025\n*Jan\n652,6\n728,8\n1381,5\n-76,2\n*Feb\n513,7\n713,4\n1227,1\n-199,7\n*Mar\n583,6\n793,5\n1377,1\n-209,9\n*Apr\n663,9\n760,4\n1424,3\n-96,5\n*May\n728,9\n847,6\n1576,5\n-118,7\n*Jun\n725,5\n848,7\n1574,2\n-123,3\n*Jul\n877,8\n853,4\n1731,2\n24,5\n*Aug\n879,2\n837,7\n1716,9\n41,5\n*Sep\n851,9\n857,8\n1709,7\n-5,9\n*Oct\n1041,7\n1013,0\n2054,8\n28,7\n*Nov\n1046,3\n955,8\n2002,1\n90,5\n*Dec\n1141,7\n901,5\n2043,2\n240,2\n2026\n*Jan\n969,4\n855,7\n1825,1\n113,7\n*Feb\n1009,6\n9631,3\n10640,9\n-8621,8\nSource: ZIMSTAT, 2026\nTABLE 13 : MERCHANDISE TRADE STATISTICS\n (US$ millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monthly_Economic_Reviews/Monthly_Economic_Review_February_2026_2.pdf"}
{"doc_id": "0dce03dee7a9d47d6752e499afe716d9", "text": "MPC Statement November 22nd, 2018 \nPage 1 \n \n \nSouth African Reserve Bank \n \nPRESS STATEMENT \nEMBARGO DELIVERY \n22 November 2018 \n \n \nSTATEMENT OF THE MONETARY POLICY COMMITTEE \n \nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank \nSince the previous meeting of the Monetary Policy Committee (MPC), the near-term \ninflation outlook has improved, however, the longer term risks to the inflation outlook \nremain elevated. The weaker exchange rate and the impact of higher oil prices have \ncontributed to increasing inflation since March 2018. At the same time, domestic \ngrowth remains weak. \nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all \nurban areas was 5.1% in October (up from 4.9% in September). Goods price inflation \nwas 5.1% (up from 4.8% in September), while services price inflation decreased \nslightly from 5.2% in September to 5.1% in October. The Bank’s measure of core \ninflation, which excludes food, fuel and electricity was 4.2% in October. Producer price \ninflation for final manufactured goods slowed to 6.2% in September from 6.3% in \nAugust. \nMPC Statement November 22nd, 2018 \nPage 2 \n \nThe inflation forecast has improved marginally since the previous MPC. While \nremaining within the inflation target range throughout the forecast period, the SARB’s \nmodel projects an increase in headline inflation, albeit slightly lower than the \nSeptember projection. Headline inflation is now expected to average 4.7% in 2018 \n(down from 4.8%), before increasing to 5.5% in 2019 (down from 5.7%) and \nmoderating to an unchanged 5.4% in 2020. Headline CPI inflation is now expected to \npeak at around 5.6%, in the third quarter of 2019. The forecast for core inflation is \n4.3% in 2018 (down from 4.4%), 5.3% in 2019 (down from 5.6%) and 5.5% in 2020. \nThese inflation projections are based on an interest rate path generated by the SARB’s \nQuarterly Projection Model (QPM). \nFollowing persistent increases in oil prices since February, the assumptions for Brent \ncrude oil in the QPM were revised upwards by US$3 per barrel to US$73 for 2019 and \n2020. Administered prices, including fuel, electricity and water tariffs, are expected to \nincrease at rates above the upper end of the inflation target range. \nThe inflation expectations of market analysts in the November Reuters Econometer \nsurvey are lower at 4.7% in 2018 (down from 4.8%), rising to 5.5% in 2019 (up from \n5.3%) and remaining unchanged at 5.3% in 2020. Expectations implicit in the break-\neven inflation rates (i.e. the yield differential between conventional and inflation-linked \ngovernment bonds) remain sensitive to exchange rate movements. While five-year \nbreak-even rates remains within the inflation target range, the longer-term break-even \nrates remain above 6%. \nThe global economic outlook is expected to remain broadly favourable over the short \nterm. However, medium term risks are tilted to the downside due to less synchronised \nglobal growth. This is amplified by elevated policy uncertainty emanating from \nMPC Statement November 22nd, 2018 \nPage 3 \n \nescalating trade tensions, tightening global financial conditions and rising geo-political \nrisks. The global inflation trajectory remains on a moderate upward path as key \nadvanced economies continue to grow above their potential. \nSince the September MPC, the rand has appreciated by 3.8% against the US dollar, \nby 6.6% against the euro, and by 5.2% on a trade-weighted basis. The implied starting \npoint for the rand is R14.50 against the US dollar, compared with R14.20 at the time \nof the previous meeting. At these levels, the QPM assesses the rand to still be \nundervalued. \nTighter global financial conditions, financial market volatility and the change in investor \nsentiment towards emerging markets remain key external risks to the rand. Over the \nmedium term, it is likely that the rand, along with other emerging market currencies, \nwill remain volatile. However, the pace of monetary policy normalisation in the \nadvanced economies continues to be gradual. Policy tightening by the US Fed is \nexpected to follow a measured path in the absence of significant inflation or growth \nsurprises, while the European Central Bank (ECB) is expected to start a rate hiking \ncycle in late-2019. This means that monetary policies in some advanced economies \nwill likely be tightening throughout the forecast period. \nThe domestic growth outlook remains challenging. Recent monthly data on economic \nperformance in key sectors suggests a more moderate recovery in growth in the third \nquarter than expected in September. The SARB now forecasts growth in 2018 to \naverage 0.6% (down from 0.7% in September). The forecast for 2019 and 2020 is \nunchanged at 1.9% and 2.0% respectively. At these growth rates, the negative output \ngap is wider than at the time of the previous MPC meeting. The output gap will narrow \nbut will not close by the end of 2020, as previously expected. \nMPC Statement November 22nd, 2018 \nPage 4 \n \nThe SARB’s composite leading business cycle indicator has been trending lower since \nFebruary, reflecting the extent of weakness in the economy. The year-on-year \ndecrease in September was the largest since July 2016 and mainly reflected a \nsignificant decline in the number of building plans approved and a reduction in job \nadvertisement space. The RMB/BER Business Confidence Index remains significantly \nbelow the neutral level of 50 index points, broadly aligned with weakness in gross fixed \ncapital formation. Efforts by the government to encourage private sector investment \ncould support longer term growth. \nWhile the FNB/BER Consumer Confidence Index remains high, household \nconsumption expenditure has been constrained by recent tax changes, weak \nemployment growth as well as low growth in credit extension to households. Over the \nforecast period, consumption expenditure growth is expected to remain below 2% in \n2018 and 2019, and to reach 2.3% in 2020, on the back of increases in real wages \nand household disposable income. \nThe MPC assesses the risks to the growth forecast to be moderately on the downside. \nAs previously highlighted the Committee remains of the view that current challenges \nfacing the economy are primarily structural in nature and cannot be solved by \nmonetary policy alone. Prudent macroeconomic policies are essential to ensuring that \ngrowth is sustainable and that the economy is more resilient to shocks. These should \nbe complemented by implementation of credible structural policy initiatives that make \na marked impact on the cost structure of the economy, potential output and \nemployment. \nThe MPC noted the rising inflation trajectory which, while remaining within the target \nrange, continues to deviate from the mid-point of the target range. \nMPC Statement November 22nd, 2018 \nPage 5 \n \nThe MPC continues to assess the risks to the longer-term inflation outlook to be on \nthe upside. These risks include tighter global financial conditions, a weaker exchange \nrate, higher wage growth, international oil prices and rising electricity and water tariffs. \nHowever, demand pressures are still not assessed to pose a significant risk to the \ninflation outlook. \nThe approach of the MPC is to look through the first-round effects and focus on the \npossible second-round effects of supply side shocks. However, shocks of a persistent \nnature such as extended periods of currency depreciation, elevated oil prices and \nmulti-year electricity price increases make it difficult to disentangle these first and \nsecond round effects. \nThe MPC had to decide whether to act now or later. Given the relative stability in the \nunderlying core inflation measure, delaying the adjustment could give the MPC room \nto re-assess these unfolding developments in subsequent meetings. However, \ndelaying the adjustment could cause inflation expectations to become entrenched at \nhigher levels and thus contribute to second round effects, which would require an even \nstronger monetary policy response in the future. \nAgainst this backdrop, the MPC has decided to increase the repurchase rate by \n25 basis points to 6,75% per year, effective from 23 November 2018. Three members \npreferred an increase and three members preferred an unchanged stance. \nThe Committee continues to assess the stance of monetary policy to be \naccommodative. Monetary policy actions will continue to focus on anchoring inflation \nexpectations near the mid-point of the inflation target range in the interest of balanced \nand sustainable growth. As previously indicated, any future policy adjustments will be \ndata dependent. \nMPC Statement November 22nd, 2018 \nPage 6 \n \nThe implied path of policy rates generated by the Quarterly Projection Model is for four \nrate hikes of 25 basis points, reaching 7.5% by the end of 2020. The forecasted \nendogenous interest rate path is built into our growth and inflation outlook. As \nemphasised previously, the implied path remains a broad policy guide which can and \ndoes change in either direction between meetings in response to new developments \nand changing risks. \nLesetja Kganyago \nGOVERNOR \nThe next statement of the Monetary Policy Committee will be released on 17 January \n2019. \n \nContact person: \nZamaNdlovu Ndlovu \n012 399 7118 \nmedia@resbank.co.za", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/MPC_Statements/MPC-Statement_22-November-2018-Final.pdf"}
{"doc_id": "5ccd993abd82d2a5c506514fd1565507", "text": "QUARTERLY \nECONOMIC \nREVIEW \n \n \n \nJUNE 2016 \n \nRESERVE BANK OF ZIMBABWE \n \n2 \nCONTENTS \n \n1. OVERVIEW ........................................................................................................ 5 \n2. INTERNATIONAL ECONOMIC DEVELOPMENTS ..................................... 6 \nAdvanced Economies ................................................................................................. 6 \nEmerging Market and Developing Economies .......................................................... 7 \nSub-Saharan Africa .................................................................................................... 7 \nCommodity Price Developments ............................................................................... 8 \nMerchandise Trade Developments ..........................................................................10 \nTrade Balance ..........................................................................................................13 \n3. DOMESTIC ECONOMIC DEVELOPMENTS................................................14 \nREAL SECTOR DEVELOPMENTS ......................................................................14 \nReal GDP .................................................................................................................14 \nAgriculture ...............................................................................................................14 \nMining ......................................................................................................................17 \nManufacturing ..........................................................................................................20 \nElectricity .................................................................................................................22 \nINFLATION DEVELOPMENTS ...........................................................................23 \nFISCAL PERFORMANCE .....................................................................................24 \n4. MONETARY DEVELOPMENTS, INTEREST RATES AND FINANCIAL \nMARKETS ........................................................................................................27 \n5. PAYMENT, CLEARING AND SETTLEMENT ACTIVITIES ......................30 \nSTATISTICAL TABLES ........................................................................................34 \n \n3 \nList of Figures \nFigure 1: Brent Crude Oil Prices (US$/Barrel) ............................................................................................. 8 \nFigure 2: Base Metal Prices (US$/tonne) ..................................................................................................... 9 \nFigure 3: Precious Minerals Prices ............................................................................................................... 9 \nFigure 4: Food Price Index ......................................................................................................................... 10 \nFigure 5: Merchandise Trade ...................................................................................................................... 10 \nFigure 6: Merchandise Exports -April - Jun 2016 (US$ millions) .............................................................. 11 \nFigure 7: Major Merchandise Export Destinations (% Share) .................................................................... 12 \nFigure 8: Merchandise Imports (US$ m) .................................................................................................... 12 \nFigure 9: Major Merchandise Import Sources (% Share) ........................................................................... 13 \nFigure 10: Trade Balance (US$ m) ............................................................................................................. 13 \nFigure 11: Formal Sector Quarterly Cattle Slaughters ................................................................................ 16 \nFigure 12: Quarterly Pigs Slaughterings ..................................................................................................... 17 \nFigure 13: Quarterly Gold Deliveries (kg) .................................................................................................. 18 \nFigure 14: Quarterly platinum output (kg) .................................................................................................. 19 \nFigure 15: Quarterly diamond production (carats)...................................................................................... 19 \nFigure 16: Quarterly nickel output (tonnes) ................................................................................................ 20 \nFigure 17: Quarterly Retrenchments Statistics ........................................................................................... 21 \nFigure 18: Electricity sent out (GWh): 2015 - 2016 .................................................................................. 22 \nFigure 19: Annual Inflation Profile (%) ...................................................................................................... 23 \nFigure 20 : Quarterly Annualized Inflation Profile (%) .............................................................................. 24 \nFigure 21: Revenue Performance: 1st Half 2016 ........................................................................................ 25 \nFigure 22: Total Revenue Collected: 1st Half 2015 and 2016 .................................................................... 25 \nFigure 23: Revenue Structure ..................................................................................................................... 26 \nFigure 24: Structure of Government Expenditure ....................................................................................... 26 \nFigure 25: Annual Broad Money Supply Growth Rates and Levels .......................................................... 27 \nFigure 26: Zimbabwe Stock Exchange Indices ........................................................................................... 28 \nFigure 27: Market Capitalisation ................................................................................................................ 29 \nFigure 28: Market Turnover Value ............................................................................................................. 29 \nFigure 29: RTGS Values and Volumes....................................................................................................... 31 \nFigure 30: SWIFT Cross Border Transactions ........................................................................................... 31 \nFigure 31: Over the Counter Cash Withdrawals. ........................................................................................ 32 \nFigure 32: Values of Retail Transactions .................................................................................................... 32 \nFigure 33: Volumes of Retail Transactions ................................................................................................ 32 \nFigure 34: Total Collateral .......................................................................................................................... 33 \n \n \n \n \n \n \n4 \n \nList of Tables \nTable 1: Global Economic Growth & Outlook (%) ........................................................................ 6 \nTable 2: International Commodity Prices ....................................................................................... 8 \nTable 3: Exports Classified by HS Code ...................................................................................... 11 \nTable 4 : Tobacco Sales in 2015 and 2016 ................................................................................... 15 \nTable 5 : Mineral Production: 2015 and 2016 .............................................................................. 17 \nTable 6: Companies under Judicial Management & Liquidation ................................................. 21 \nTable 7: Electricity Generation ..................................................................................................... 22 \nTable 8 : Annual Inflation rates (%) for Selected SADC Countries ............................................. 24 \nTable 9: Consolidated Transactional Activities ............................................................................ 30 \nTable 10: Payment Systems Access Points and Devices .............................................................. 33 \n \n1. OVERVIEW \n \nThe world economy, which showed signs of \nrecovery during the first quarter of 2016, faces \ndownside risks in the aftermath of the \noutcome of the 23rd June 2016 Brexit vote, \nwhich was in favour of Britain’s exit from the \nEuropean Union (EU). As a result of the \noutcome, the International Monetary Fund \n(IMF) in its July 2016 World Economic \nOutlook (WEO) report, revised its global \ngrowth forecasts downwards for 2016 and \n2017 to 3.1% and 3.4%, respectively. These \ngrowth forecasts are both 1 percentage point \nlower than the April 2016 WEO forecasts. \n \nThe projected slowdown in global economic \nperformance has an adverse bearing on \ndeveloping countries’ economies, through the \nfall in the global demand for their export \ncommodities. \n \nDespite \nthe \nfirming \nof \n \ninternational \ncommodity prices, Zimbabwe’s trade balance \nworsened by 3.0%, from a deficit of \nUS$675.8 million during the first quarter of \n2016, to a deficit of US$695.8 million in the \nsecond quarter of 2016. \n \nPartly reflecting the impact of firming \ninternational prices, gold output stood at \n10 360 kg during the first half of 2016, \ncompared to 8 869 kg produced during the \nsame period in 2015. \n \nThe country’s manufacturing sector activities \nremained subdued, with capacity utilisation \nestimated at around 30% during the second \nquarter of 2016. This, notwithstanding, the \nmanufacturing sector is expected to benefit \nfrom interim policy measures introduced by \nGovernment to promote the consumption of \nlocally produced goods under Statutory \nInstrument (SI) 64. This policy measure is \nexpected to enhance domestic industrial \nproduction as well as curtail the influx of non-\nessential imports. \n \nThe \nZimbabwe \nStock \nExchange \n(ZSE) \nrecovered from losses realised during the first \nquarter of 2016, with both the industrial and \nmining indices recording marginal increases \nduring the second quarter of 2016. This was \non the back of better than expected results for \nthe first half of the financial year. The ZSE \ngained \nUS$135.9 \nmillion \nworth \nof \ncapitalisation during the quarter under review. \n \nAnnual broad money1 grew by 4.55%, from \nUS$4 916.8 million in the first quarter of \n2016, to US$5 140.7 million in the second \nquarter. The growth in money supply partly \nreflected tobacco selling season related \ninflows. As at 30th June, tobacco worth \nUS$467.2 million had been sold. Credit \nextension to the private sector, however, \nremained largely subdued due to cautionary \nlending by banks. \n \nThe recent policy measures put in place by the \nBank, to promote the use of plastic money, \nresulted in an increase in the total value of \ntransactions processed through the National \nPayment \nSystem \n(NPS), \nfrom \nUS$13.47 billion for the quarter ending March \n2016, to US$15.08 billion during the quarter \nending 30 June 2016. \n \n1 Under the multiple currency system, broad money is \ndefined as total bank deposits less interbank deposits. \nPlease note that the current definition of broad money \nunder the multicurrency system excludes currency in \ncirculation. \n \n \n6 \n2. \nINTERNATIONAL ECONOMIC \nDEVELOPMENTS \nThe uncertainly surrounding the medium to \nlong term economic implications of the U.K.’s \nexit from the E.U, is expected to negatively \nimpact on global growth prospects. In \nparticular, advanced European economies will \nsuffer through loss of consumer and business \nconfidence, \nlower \nequity \nprices \nand \nsuppressed yields on safe haven assets and a \nshrinking market. \n \nThe IMF, World Economic Outlook (WEO) \nreport of July 2016 has revised its global \ngrowth forecasts downwards for 2016 and \n2017. The global economy is now projected to \ngrow by 3.1% in 2016 and 3.4% in 2017. \nTable \n1 \nshows \neconomic \ngrowth \ndevelopments and the revised projections for \nselected regions and countries for 2016 and \n2017. \n \nAdvanced Economies \nIn view of the likely effect of increased \nuncertainty \non \nconsumer \nand \nbusiness \nconfidence brought about by Brexit, advanced \neconomies are now projected to grow by 1.8% \nin both 2016 and 2017. These growth rates are \n1 percentage point and 0.2 percentage points \nlower compared to the April 2016 WEO \nforecasts, respectively. \n \n \n \n \n \n \n \n \nTable 1: Global Economic Growth & Outlook \n(%) \n \nActuals \nProjections \n \n2014 \n2015 \n2016 2017 \nWorld Output \n3.4 \n3.1 \n3.1 \n3.4 \nAdvanced Economies \n1.9 \n1.9 \n1.8 \n1.8 \n US \n2.4 \n2.4 \n2.2 \n2.5 \n Eurozone \n0.9 \n1.7 \n1.6 \n1.4 \n Japan \n0.0 \n0.5 \n0.3 \n0.1 \nEmerging \nMarket & Developing \nEconomies \n4.6 \n4.0 \n4.1 \n4.6 \n China \n7.3 \n6.9 \n6.6 \n6.2 \n India \n7.2 \n7.6 \n7.4 \n7.4 \nSub-Saharan Africa \n5.1 \n3.3 \n1.6 \n3.3 \n Zimbabwe \n3.8 \n1.1 \n1.4 \n5.6 \nLatin America \n& the Caribbean \n1.3 \n0.0 \n-0.4 \n1.6 \nSource: IMF World Economic Outlook Update (19 July \n2016), Ministry of Finance and Economic Development \nand RBZ projections \n \nUnited States \nThe weaker than expected 2016 first quarter \neconomic performance in the United States of \nAmerica (USA) prompted a downward \nrevision of the 2016 growth forecast from \n2.4% to 2.2%. High frequency economic \nindicators point to a nascent pick up in the \nsecond half of the year, while the impact of \nBrexit will largely be muted. \n \n \n \n7 \nIn the medium term, the lower interest rates in \nthe USA, combined with a slow path of \nmonetary policy normalisation are expected to \noffset the negative impact of a stronger \nU.S dollar and waning consumer and business \nconfidence. \n \nEuro Zone \nThe Eurozone’s growth in the first quarter of \n2016, at 2.2%, was higher than expected. \nGrowth continued to be largely supported by \ndomestic private consumption anchored on \nrising income, lower oil prices and less \ninhibited household balance sheets, as well as \na rebound in investment. \n \nCompared with the April 2016 WEO \nforecasts, the outlook for real GDP growth in \nthe Eurozone for 2016 was revised from 1.5% \nto 1.6%, largely in line with the region’s \nperformance during the first quarter of 2016. \nGrowth is projected to moderate to 1.4% in \n2017, taking into consideration the potential \nnegative impact of Brexit. \n \nJapan \nEconomic growth for Japan is projected at \n0.3% in 2016, down from 0.5% in 2015, \nreflecting weak domestic demand. As a result, \nJapanese inflation has been falling in recent \nmonths. \n \nWhile the delayed implementation of a \nconsumption tax from April 2017 to October \n2019 would have, to some extent, spurred \ngrowth in 2017, the strengthening of the yen \nin recent months is expected to curtail growth \nin 2016 and 2017. \n \nEmerging Market and Developing \nEconomies \n \nThe July 2016 WEO projections for growth in \nemerging \nmarket \neconomies \nremains \nunchanged from the April 2016 WEO levels \nof 4.1% in 2016 and 4.6% in 2017. In \nparticular, the medium-term outlook in China \nis positive in the wake of various policy \nmeasures implemented by the country’s \nauthorities. These included lowering the \nbenchmark interest rate, expansionary fiscal \npolicy, increased infrastructure spending and \ngrowth in private credit. \nRussia is benefitting from the rebound in \ncrude oil prices, while in India economic \nactivity remains buoyant, notwithstanding a \nsluggish recovery in private investment. In \nmany emerging market economies, currency \ndepreciation has led to the acceleration in food \nprices and general inflation. \nSub-Saharan Africa \nOn the back of challenging macroeconomic \nconditions, notably in Nigeria and South \nAfrica, Sub-Saharan Africa (SSA)’s two \nbiggest economies, the region’s growth \nprospects are gloomy. The two countries are \ngrappling with lower commodity export \nrevenues, weaker investor confidence and \nconstrained power generation. Economic \nactivity in other SSA countries will also be \nnegatively affected by depressed international \ncommodity prices in 2016. In addition, a \nnumber of countries in SSA experienced a \nsevere El Nino induced drought which further \nreduced economic growth prospects. \n \n \n8 \nAs a consequence, growth projections for the \nregion were revised downwards from 3% to \n1.6% in 2016 and from 4.0% to 3.3% in 2017. \nCommodity Price Developments \nMost commodity prices generally firmed \nduring the second quarter of 2016. Crude oil \nprices, which led the recovery in commodity \nprices, were supported by declines in global \nsupply, while other commodities benefited \nfrom the depreciation of the US dollar against \nmajor currencies. International copper prices, \nhowever, retreated during the period March to \nJune 2016, as shown in Table 2. \nTable 2: International Commodity Prices \n \nMarch \nJune \n% Change\nGold (US$/oz) \n1,246.30 \n1,274.99 \n2% \nPlatinum (US$/oz) \n964.31 \n984.45 \n2% \nCopper (US$/ton) \n4,932.71 \n4,634.34 \n-6% \nNickel (US$/ton) \n8,691.43 \n8,882.27 \n2% \nCrude Oil (US$/ \nbarrel) \n39.68 \n49.83 \n26% \nSource: Bloomberg, 2016 \nBrent Crude Oil \nBrent crude oil prices continued on a recovery \npath in the second quarter of 2016, gaining by \n26% to average US$49.83/barrel in June 2016. \nThe increase was driven by seasonal increase \nin demand, particularly in the U.S.A, the \nworld’s largest consumer of crude oil. In \naddition, the increase reflected a decrease in \nproduction in the non-Organization of the \nPetroleum Exporting Countries (OPEC) and \nvarious supply outages in Canada, Nigeria and \nKuwait. \nFigure 1 shows the monthly evolution of \ncrude oil prices for the period January 2009 to \nJune 2016. \nFigure 1: Brent Crude Oil Prices \n(US$/Barrel) \n \nSource: Bloomberg, 2016 \nThe rebound in oil prices from the January \n2016 lows, is likely to be weaker than \nprevious recoveries on account of higher-than-\nexpected output from OPEC producers and \nweaker global growth. \nBase Metals \nCopper prices remained subdued on the back \nof slackening demand in China, the world’s \nbiggest consumer of the metal, coupled with \ngenerally sufficient supply conditions in \nglobal markets. Against this backdrop, copper \nprices \ndeclined \nby \n6%, \nfrom \nUS$4,932.71/tonne \nin \nMarch \n2016 \nto \nUS$4, 634.34/tonne in June 2016. \n0\n20\n40\n60\n80\n100\n120\n140\nJun-09\nJan-10\nAug-10\nMar-11\nOct-11\nMay-12\nDec-12\nJul-13\nFeb-14\nSep-14\nApr-15\nNov-15\nJun-16\n \n \n9 \nNickel prices gained by 2% during the second \nquarter of 2016, from a monthly average of \nUS$8,691.43/tonne \nin \nMarch \n2016 \nto \nUS$8,882.27/tonne in June 2016. The prices \nwere boosted by mining sector reforms in the \nPhilippines, one of the top global producers of \nthe base metal. In June 2016, the Philippine \ngovernment indicated that it prefers its local \npeople to own mining assets. \n \nFigure 2: Base Metal Prices (US$/tonne) \n \nSource: Bloomberg, 2016 \n \nIn the medium-term, base metal prices are \nprojected to weaken on account of strong \nsupply against weak demand, especially in \nChina. \n \nGold and Platinum \nGold prices gained 2% to US$1,274.99/oz in \nJune 2016 partly aided by the depreciation of \nthe U.S. dollar; declining real interest rates; \nand a more cautious position taken by the U.S. \nFederal Reserve on future interest rates. In \naddition, the outcome of the Brexit vote is \nfueling speculation that central banks in major \neconomies such as China, UK and Japan could \nopt for stimulus measures to boost economic \ngrowth and counter the negative implications \nof Brexit on global financial markets. This \nwould heighten the demand for precious \nmetals. \nPlatinum prices gained by the end of the \nsecond quarter of 2016, due to the weakening \nof the US dollar. Prices rose by 2%, from a \nmonthly average of US$964.31/oz in March \n2016, to US$984.45/oz in June 2016. \nFigure 3 shows trends in precious metal prices \nsince 2010. \nFigure 3: Precious Minerals Prices \n \nSource: Bloomberg, 2016 \n \n \n \n0\n5000\n10000\n15000\n20000\n25000\n30000\nJun-09\nOct-09\nFeb-10\nJun-10\nOct-10\nFeb-11\nJun-11\nOct-11\nFeb-12\nJun-12\nOct-12\nFeb-13\nJun-13\nOct-13\nFeb-14\nJun-14\nOct-14\nFeb-15\nJun-15\nOct-15\nFeb-16\nJun-16\nNICKEL US$/TONNE\nCOPPER US$/TONNE (RHS)\n0\n200\n400\n600\n800\n1000\n1200\n1400\n1600\n1800\n2000\nJun-09\nDec-09\nJun-10\nDec-10\nJun-11\nDec-11\nJun-12\nDec-12\nJun-13\nDec-13\nJun-14\nDec-14\nJun-15\nDec-15\nJun-16\nGOLD US$/OZ\nPLATINUM US$/OZ\n \n \n10 \nFood Prices \nThe international prices of most food items \nwere generally stable during the period under \nreview. This was due to ample global supplies \nfrom \nprevious \nseasons \nand \nimproved \nprospects for 2016 global production. The \nslight increase in the index was largely caused \nby surging sugar prices and moderate \nincreases in cereals, dairy and meat. \nFigure 4: Food Price Index \n \nSource: Bloomberg, 2016 \nMerchandise Trade Developments \nZimbabwe’s total merchandise trade declined \nby 12%, from US$1,926.5 million recorded in \nthe first quarter of 2016 to US$1,694.1 million \nin the second quarter of 2016 (see Figure 5). \nThe decline reflected the continued slowdown \nin economic activity. The total merchandise \ntrade during the second quarter of 2016 also \ncompares unfavorably with the US$1,939.8 \nmillion realised during the second quarter of 2015. \nFigure 5: Total Merchandise Trade – \nQ1 and Q2 2016 (US$ million) \n \nSource: Zimstat, 2016 \nMerchandise Export Developments \nTotal merchandise exports declined by 20%, \nfrom US$625.3 million in the first quarter of \n2016 to US$499.6 million during the quarter \nending June 2016 (see Figure 6). Similarly, a \ncomparison of total merchandise exports for \nthe quarter under review, with the same period \nin 2015 shows a 3.2 % decline. \n \n \n \n \n \n \n \n \n0\n50\n100\n150\n200\n250\n300\n350\nJan-09\nJul-09\nJan-10\nJul-10\nJan-11\nJul-11\nJan-12\nJul-12\nJan-13\nJul-13\nJan-14\nJul-14\nJan-15\nJul-15\nJan-16\nJul-16\nFood Index\nMaize\nWheat\n1,927\n1,694\n0\n200\n400\n600\n800\n1,000\n1,200\n1,400\n1,600\n1,800\n2,000\nQuarter 1\nQuarter 2\n \n \n11 \n \nFigure 6: Merchandise Exports – Q2 2015 \nand Q2 2016 (US$ millions) \nSource: Zimstat, 2016 \n \nFlue-cured tobacco, gold, nickel, diamonds, \nferrochrome \nand \ngranite \ncontinued \nto \ndominate the country’s exports, contributing \nabout 35.1% of export earnings for the period \nsecond quarter of 2016 (See Table 3). \n \n \n \n \n \n \n \n \n \n \n \nTable 3: Exports Classified by lHS Code \nProduct \n1st \nQuarter \n2016 \n(US$m) \n2nd Quarter \n2016 \n(US$m) \n2nd \nQuarter \n2016 \nShare of \nTotal (%) \nFlue-Cured \nTobacco \n219.8 \n35.2 \n7.1 \nGold \n176.9 \n182.0 \n36.4 \nNickel ores & \nConcentrates \n55.4 \n73.0 \n14.6 \nIndustrial \ndiamonds \n27.7 \n38.3 \n7.7 \nFerro-chrome \n15.0 \n24.8 \n5.0 \nGranite \n11.2 \n8.4 \n1.7 \nOther \n119.3 \n137.8 \n27.6 \nTotal \n625.4 \n499.6 \n100.0 \nSource: Zimstat, 2016 & RBZ Calculations, 2016 \nMajor Merchandise Export Destinations \nThe country’s major export markets consisted \nof South Africa, Mozambique, the United \nArab \nEmirates, \nZambia, \nBelgium \nand \nBotswana. These countries together absorbed \nabout \n98.5% \nof \nthe \ncountry’s \ntotal \nmerchandise exports during the second quarter \nof 2016. South Africa absorbed 75.2% of the \ncountry’s total merchandise exports during the \nsecond \nquarter \nof \n2016, \nfollowed \nby \nMozambique (11.6%); United Arabs Emirates \n(5.0%); Zambia (3.5%); Belgium (2.5%); and \nBotswana (0.8%), as shown in Figure 7. \n \n516.1\n499.6\n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\n550\nQ2 2015\nQ2 2016\n \n \n12 \nFigure 7: Major Merchandise Export \nDestinations (% Share) \nSource: Zimstat, 2016 & RBZ Calculations, 2016 \nExports to other destinations in the world \nconstituted 1.5% of total exports in the second \nquarter of 2016. \nMerchandise Import Developments \nTotal merchandise imports amounted to \nUS$1,195.4 million for the second quarter of \n2016, representing an 8.1% decline, compared \nto the first quarter of 2016. During the \ncomparable period in 2015, the country’s total \nmerchandise imports, at US$1 423, 7 million, \nwere 16% higher than the total imports \nrecorded during the quarter under review, as \nshown in Figure 8. \n \n \n \n \n \nFigure 8: Merchandise Imports - Q2 2015 \nand Q2 2016 (US$ million) \n Source: Zimstat, 2016 \nThe country’s major imports during the \nsecond quarter of 2016 mainly comprised of \nfuels (diesel and petrol), cereals (maize, rice, \nand wheat), soya beans and medicines. \n \nMajor Import Sources \nDuring the second quarter of 2016, the \ncountry sourced its imports mainly from South \nAfrica, 42.9%; Singapore, 21.1%; China, \n5.4%; Mozambique, 3.3%; India, 3.0% and \nZambia, 2.5%, as shown in Figure 9. \n \n \n \n \n \n \n \n \n \n \n \nSouth Africa, \n75.2 \nMozambique\n, 11.6 \nU.A.E, 5.0 \nZambia, 3.5 \nBelgium, 2.5 \nBotswana, \n0.8 \nOther, 1.5 \n1423.7\n1195.4\n0\n200\n400\n600\n800\n1000\n1200\n1400\n1600\nQ2 2015\nQ2 2016\n \n \n13 \nFigure 9: Major Merchandise Import \nSources (% Share) \nSource: Zimstat, 2016 & RBZ Calculations, 2016 \nThe country’s merchandise imports from \nSouth Africa mainly constituted capital, \nintermediate and consumer goods, while \nimports from Singapore were dominated by \npetroleum products, including diesel and \npetrol. \n \nTrade Balance \nThe merchandise trade developments for the \nsecond quarter of 2016, resulted in the \nworsening of the trade balance by 3.0%, from \na deficit of US$675.8 million registered \nduring the first quarter of 2016, to a deficit of \nUS$695.8 million, as shown in Figure 10. \n \n \n \n \nFigure 10: Trade Balance (US$ million) \nSource: Zimstat, 2016 & RBZ Computations, 2016 \n \nThe sustained trade deficits are reflective of \nthe disproportionate absorption of imports of \nfinished goods, on the back of domestic \nsupply-side constraints. In addition, the \ncountry’s export volumes and revenues were \nsubdued on the back of low production, lack \nof competitiveness and the general downturn \nin international commodity prices. \n \n \n \n \n \n \n \n \n \n \n \n2.5 \n3.0 \n3.3 \n5.4 \n21.1 \n21.9 \n42.9 \nZambia\nIndia\nMozambique\nChina\nSingapore\nOther\nSouth Africa\n625.4\n499.6\n1,301.2 \n1,195.4 \n-675.8\n-695.8\n-1000\n-500\n0\n500\n1000\n1500\n2016 Q1\n2016 Q2\nExports\nImports\nTrade Balance\n \n \n14 \n3. DOMESTIC ECONOMIC \nDEVELOPMENTS \n \nThe growth in the economy continues to be \nconstrained by a myriad of challenges, which \ninclude weak local aggregate demand; low \ninternational commodity prices; lack of fiscal \nspace; and infrastructural bottlenecks. \n \nREAL SECTOR DEVELOPMENTS \n \nReal GDP \nRevised projections indicate that the economy \nwill grow by 1.2% in 2016, up from the 1.1% \nrecorded in 2015. Growth will be largely \ndriven by mining; construction; and finance \nand insurance. The deceleration in agriculture \nactivities due to drought, and its pervasive \nimpact on other sectors including power \ngeneration, largely explains the lower than \ninitially expected real GDP growth rate of \n2.7%. \n \nAgriculture \nGrowth in the agriculture sector is expected to \ndecline by 4.2%, from an initial projection of \n-9.3% owing to the El-Nino induced drought, \nwhich resulted in below normal rainfall during \nthe 2015-2016 cropping season across all \nprovinces. The drought has caused a drastic \nreduction in output of key crops such as \nmaize, cotton and groundnuts. Livestock \nproduction has also been negatively affected. \nThe improved rains during the second half of \nthe season, however, salvaged some late \nplanted or replanted crops, including tobacco, \nmaize and sugar beans. \n \n \nThe increase in output in the livestock sub-\nsector observed during the first half of the \nyear was largely due to drought induced \ndestocking and is expected to partially offset \nthe overall decline in the agriculture sector in \n2016. \n \nThe improvement in the rainfall pattern, \ntowards the end of the season provided the \nnecessary relief to most livestock classes, \nthrough \nimproved \npastures \nand \nwater \navailability. This averted further drought \ninduced \nlivestock \ndeaths, \nwhich \nhad \ncharacterised the first half of the season, \nparticularly in the southern parts of the \ncountry. \n \nMaize \nAccording to the Second Round Crop \nAssessment Report, maize output for the \n2015/16 agriculture season is estimated at \n512 000 tonnes, against last year’s output of \n742 000 tonnes. The low maize output for \n2015-2016 resulted in a 1.3 million tonnes \ndeficit on the estimated national requirement \nof about 1.8 million tonnes. The deficit is \nalready being partially covered through \nimports of grain, until the 2017 harvest. \n \nDrought Relief Programme \nGovernment has targeted the procurement of \nan estimated 641 000 tonnes of grain, with \nabout \n384 \n000 \ntonnes \nearmarked \nfor \nvulnerable households. Part of the grain is \nbeing sourced from the local market, of which \nabout 68 000 tonnes of maize had been \ndelivered to the GMB centres by 30th June \n2016. The rest of the grain will be procured \nthrough imports, as and when funds become \navailable. \n \n \n15 \nThe Government’s grain import programme is \nalso being complemented by private sector \nplayers, who are importing grain for human \nand animal consumption. The donor fraternity \nalso supports with grain procurement, mostly \ndirected at the requirements of the most \nvulnerable communities. By the end of June \n2016, about 120 569 tonnes of maize had \nbeen \nimported \nthrough \nprivate \nsector \nchannels. \n \nTobacco \nAccording to the Tobacco Industry and \nMarketing Board, cumulative sales of the \ngolden leaf were 199.2 million kilogrammes \nin the 2015/2016 season, from an initial \nestimate of 170 million kilogrammes. The \nbetter than anticipated performance was \nattributed to late rains that boosted the late \nplanted crop after replanting by some farmers, \nwhose earlier crops had been adversely \naffected by dry conditions during the first half \nof the season. The golden leaf was sold at an \naverage price of US$2.94 per kg, and realized \ncumulative receipts of US$586 million, as \nshown in Table 4. \n \n \n \n \n \n \n \n \n \n \n \n \n \nTable 4 : Tobacco Sales in 2015 and 2016 \nSEASONAL \nTOTAL \n2016 \nTOTAL \n2015 \n% CHANGE \nMass sold (kg) \n199 131 315 \n198 954 849 \n(0.09) \nValue (US$ \nmillion) \n586.2 \n586.4 \n(0.03) \nAverage price \nUS$/kg \n2.94 \n2.95 \n(0.5) \nSource: Tobacco Industry and Marketing Board \n \nWheat \nThe area under winter wheat production \ndeclined from 14 789 hectares in 2015 to \n14 065 hectares in 2016. Despite the decline \nin the area under cultivation, output for the \n2016 wheat season is expected to match the \nprevious season, due to the stable power \nsupply expected during the growing season. \nThere is also an anticipated increase in water \nusage resulting from the reduction of the tariff \non raw water for agricultural purposes. \n \nWheat production, however, continues to face \nfunding constraints, with most of the crop \nbeing funded from farmers’ own resources, in \nan \nenvironment \nhugely \nconstrained \nby \nliquidity challenges. \n \nSugar Cane \nSugar cane output for 2016 is expected at 4.4 \nmillion tonnes as previously projected, despite \nthe occurrence of drought. This is because \nboth the large scale estates and satellite \ngrowers had adequate water to irrigate the \ncrop throughout the season. The low rainfall \nreceived in the 2015-16 season could, \nhowever, have a negative impact on the output \n \n \n16 \nfor the impending 2016-17 season given the \ndeclining dam levels. \n \nLIVESTOCK \n \nBeef \n \nCattle slaughters from the formal market stood \nat 138 849 head during the first half of 2016, \nwhich was 11.9% higher than slaughters in the \nsame period in 2015. Cattle slaughters grew \nfrom 67 331 during the first quarter of 2016 to \n71 518 during the second quarter of 2016, as \nshown in the Figure 11. \n \nFigure 11: Formal Sector Quarterly Cattle \nSlaughters \n \nSource: Ministry of Agriculture, Mechanisation and \nIrrigation Development \n \nThe industry anticipates total cattle slaughters \nto be 270 000 by end 2016, as farmers de-\nstock due to depletion of pastures and water \nsources. \nBeef output, however, continues to be \nnegatively affected by the prevalence of foot \nand mouth Disease (FMD) particularly in the \nLowveld, resulting in limited access to \nmarkets. In addition, the 10.5% levy charged \nby Rural District Councils on the sale of live \nanimals, discourages farmers from selling \ntheir cattle, thus negatively affecting beef \noutput. \n \nThe destocking of cattle will adversely impact \non the national herd and could result in low \nbeef output in the short term, as farmers retain \nstock to build up their herds. \n \nMilk Production \nMilk production from the formal sector stood \nat 31.8 million litres during the first half of \n2016, compared to 27.6 million litres \nproduced in the same period last year. The \nincrease in the national dairy herd through the \nDairy Revitalization Strategy; training and \ncapacitation of farmers by the Zimbabwe \nAssociation of Dairy Farmers (ZADF); as well \nas the sharing and fusion of knowledge and \nexpertise among farmers, improved milk \nproduction. \n \nInvestment in the dairy industry is on-going, \nwith the sector intending to import about 4000 \nheifers during the year. The industry has \nundertaken to increase annual milk output to \nabout 100 million litres, from the current \nlevels of below 65 million litres. \n \nPork \nPig slaughters stood at 83 011 over the period \nJanuary-June 2016, compared to 61 673 \n2015\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2016\nQ1\n201\nQ2\nCattle Slaughtered 60716 63365 67170 64667 67331 7151\nCATTLE SLAUGHTERED (000)\n \n \n17 \nduring the same period in 2015. Slaughters \nduring the second quarter of 2016 were \n41 874, compared to 41 137 during the \nprevious quarter, as shown in Figure 12. \n \nFigure 12: Quarterly Pigs Slaughterings \n \nSource: Ministry of Agriculture, Mechanisation and \nIrrigation Development \n \nThe increase in pig slaughters is attributed to \nthe drought induced stock-feed shortages that \nsaw farmers embarking on a destocking \nexercise. The trend is expected to continue \nduring the rest of 2016, with the industry \nanticipating pig slaughters to increase by 21%, \nfrom the 2015 levels to 170 000. \n \nPork output continues to face competition \nfrom other protein substitutes such as beef and \nchicken, against a background of high \nproduction costs and low demand. \nMining \nMining output improved in the second quarter \nof 2016, aided by improved international \ncommodity prices. Overall, output levels for \nkey minerals surpassed the levels registered \nduring the comparable period in 2015, with \nthe exception of diamonds, coal and chrome. \nTable 5 shows production developments for \nselected minerals during second quarters of \n2015 and 2016. \n \nTable 5 : Mineral Production: 2015 and 2016 \n \nQ2 2015 \n \n \nQ2 2016 \n \nCumulative \nJanuary to \nJune 2016 \nGold\\ kg \n4 689 \n5 255 \n10 360 \nChrome \\t \n68 056 \n \n45 353 \n69 287 \nCoal \\t \n585 229 \n529 809 \n1 284 128 \nNickel \\t \n3 477 \n4 227 \n9 101 \nPlatinum\\kg \n2 541 \n3 647 \n7 968 \nPalladium\\kg \n2 023 \n2 940 \n6 402 \nDiamonds \n(Carats) \n735 876 \n481 008.7 \n1 137 569 \nSource: \nMOFED, RBZ, Ministry Of Mines, Chamber of \nMines, 2016 \n \nThe mining sector as a whole, however, \ncontinues to be adversely affected by low \ninternational commodity prices, resulting from \ndeclining demand, amid global economic \nslowdown. Mining production is being further \nhampered by the liquidity crunch, with a \nnegative impact on the procurement of key \nraw materials. \n \nGold \nGold output stood at 5 255 kg during the \nsecond quarter of 2016, compared to 4 689 kg \nproduced during the same period in 2015. This \nwas, in large part, driven by increased \ndeliveries by primary producers. \n2015\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2016\nQ1\n2016\nQ2\nPigs Slaughtered 28973 32700 36632 40878 41137 41874\n25\n30\n35\n40\n45\nPIGS SLAUGHTERED (000)\n \n \n18 \nThe gold mobilisation initiatives spearheaded \nby the Reserve Bank of Zimbabwe, in \nconjunction with the Ministry of Mines and \nMining Development have managed to plug \nleakages and resulted in improved deliveries \nto Fidelity Printers and Refiners (FPR). Gold \nproduction is also benefitting from the \nreduction in royalties, from 5% to 3% on \nincremental output, for large scale primary \nproducers and from 3% to 1% for small scale \nand artisanal miners. \n \nIn addition, the firming of international gold \nprices, from an average of US$1 181.21 per \nounce in the first quarter of 2016 to about \nUS$1 259.35 per ounce during the second \nquarter of 2016 is also expected to have a \npositive impact on output. \n \nSmall scale gold producers delivered a total of \n1 949 kg during the second quarter of 2016, \nup from 1 924 kg produced in the first quarter \nof 2016. Output from large producers also \nincreased from 2 606 kg during first quarter of \n2015 to 2 968 kg in the second quarter of \n2016, as shown in Figure 13. \n \nFigure 13: Quarterly Gold Deliveries (kg) \n \nSource: Fidelity Printers and Refineries, Chamber of \nMines, 2016 \n \nCumulative gold output for the first half of \n2016 stood at 10 360 kg, an increase of 16% \non the output produced during the same period \nin 2015. \n \nThe lack of significant investment in mining \nexploration has had a negative bearing on ore \ngrades and this remains a major setback on \npotential gold output. \n \nPlatinum \nPlatinum output stood at 3 647 kg, during the \nsecond quarter of 2016, up from the 2 541 kg \nproduced in the second quarter of 2015. The \nincrease was attributable to the ramp- up in \nproduction levels across all the producers. \n \nCumulative output for the first half of the year \nincreased to 7 968 kg, from the 5 531 kg \nproduced during the same period in 2015. \n2529.7 2605.8\n2892.0 2935.2\n2677.7\n2968.2\n1281.8\n1763.9\n2066.32230.3\n1923.91948.8\n368.5 319.3 378.6\n828.5\n458.4 337.7\n1000.00\n1050.00\n1100.00\n1150.00\n1200.00\n1250.00\n1300.00\n0.0\n500.0\n1000.0\n1500.0\n2000.0\n2500.0\n3000.0\n3500.0\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2015\nQ1\n2016\nQ2\n2016\nPrimary Producers\nSmall Scale Produders\nPGMs Gold\nAv price(USD/ounce)\n \n \n19 \nFigure 14 shows the quarterly platinum output \nand average international prices for 2015 and \n2016. \n \nFigure 14: Quarterly platinum output (kg) \n \nSource: Chamber of Mines, 2016 \n \nPlatinum production also responded positively \nto the increase in average international prices \nfrom US$913 per ounce in the first quarter of \n2016 to US$1 004 per ounce in the second \nquarter. \n \nDiamond \nThere has been persistent decline in diamond \nproduction since the last quarter of 2015. \nOutput stood at 481 008.7 carats in the second \nquarter \nof \n2016, \ncompared \nto \n735 876 carats produced during the same \nperiod in 2015, representing a 53% decline. \nSimilarly, production during the first half of \n2016, at 1 137 570 carats, was also \nsignificantly lower than the 1 375 253 carats \nproduced during the first half of 2015. Figure \n15 shows quarterly diamond production \nstatistics for 2015 and 2016. \nFigure 15: Quarterly diamond production \n(carats) \n \nSource: Ministry of Mines and Mining Development, \n2016 \n \nThe poor performance in diamond mining \nduring the first half of 2016 was attributable to \ntransitional losses in production, following the \nconsolidation of mining activities at Marange \ninto the State-owned Zimbabwe Consolidated \nDiamond Company (ZCDC). The subsequent \nlegal wrangles pertaining to the consolidation, \ncoupled with undercapitalisation of the \nZCDC, further delayed resuscitation of full \nscale operations. \n \nNickel \nNickel output stood at 4 227 tonnes during the \nsecond quarter of 2,016, compared to \n3 477 tonnes produced during the same period \nin 2015. Cumulative nickel output, however, \nrose to 9 101 tonnes during the first half of \n3020\n2541\n3479\n3524\n4321\n3647\n0\n200\n400\n600\n800\n1000\n1200\n1400\n0\n1000\n2000\n3000\n4000\n5000\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2015\nQ1\n2016\nQ2\n2016\nPlatinum\nAverage Price (US$/ounce)\n639377\n735876\n797979\n1041279\n656561\n481008.7\n0\n200000\n400000\n600000\n800000\n1000000\n1200000\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2015\nQ1\n2016\nQ2\n2016\n \n \n20 \n2016, compared to 7 917 tonnes produced in \nthe comparable period in 2015. \n \nThe increase in nickel output was on the back \nof increased production by both primary and \nsecondary \nproducers, \ncoupled \nwith \nthe \nincrease in the international price of the metal. \nThe price of the metal increased to an average \nof US$8 815 per tonne during the second \nquarter of 2016, from an average of US$8 484 \nper tonne in the first quarter. Figure 16 shows \ntrends in nickel output and prices in 2015 and \n2016. \n \n \nFigure 16: Quarterly nickel output (tonnes) \n \nSource: Chamber of Mines, 2016 \n \nCoal \nCoal output was 529 809 tonnes during the \nsecond quarter of 2016, down from the \n585 229 tonnes produced in the second quarter \nof 2015. Cumulatively, coal output, at \n1 284 128 tonnes in the first half of 2016, was \n34.7% lower than the 1 965 871 tonnes \nproduced during the same period in 2015. \n \nThe production of coal was adversely affected \nby weak demand in the domestic economy, \nlargely due to the sustained decline in capacity \nutilisation and company closures, mainly in \nthe \nmanufacturing \nsector. \nIn \naddition, \nchallenges \nrelating \nto \nnon-payment \nfor \ndeliveries by key consumers also negatively \nimpacted on production. \n \nManufacturing \n \nCapacity utilisation in the manufacturing \nsector has been on a downward trend, \ndeclining from a peak of 57% in 2011, to \n34.3% in 2015, owing to the difficult \noperating environment. Developments in the \nmanufacturing sector point to current capacity \nutilisation level of around 30%, reflecting \nsignificant idle capacity. As a survival \nstrategy, most companies are accumulating \nwage arrears, while others have put their \nworkers on a shorter working week. \n \nThe manufacturing sector is also likely to \nhave been negatively affected by consumers’ \nlimited access to cash, during the second half \nof 2016, given that the majority of the \nconsumers do not use Point of Sale Machines. \nIn addition, the depressed disposable incomes \ncontinued \nto \ndrive \nconsumers \ntowards \nmaximising value for money, through increase \nin the consumption of low cost products. This \nwas evident in the beverages industry where \nsorghum beer volumes increased faster than \nclear beer volumes. \n \n4440\n3477\n4056\n4135\n4874\n4227\n0\n2000\n4000\n6000\n8000\n10000\n12000\n14000\n16000\n0\n1000\n2000\n3000\n4000\n5000\n6000\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2015\nQ1\n2016\nQ2\n2016\nNickel \\t\nAverage Price (US$/t)\n \n \n21 \nManagement of Imports \nWhile industry continues to face a myriad of \nchallenges, there is hope for revival in light of \npolicy measures introduced by Government to \npromote consumption of locally produced \ngoods and services. In an effort to enhance \nindustry productivity and curtail the influx of \nnon-essential imports, Government has put in \nplace measures to restrict certain imported \nproducts, thereby, allowing companies to start \nutilising idle capacity. \nThe import restrictions were put in place as an \ninterim measure to give local manufacturing \ncompanies some respite and allow them to \nretool and improve production efficiency. The \nshort term measures are targeted at products \nthat can be manufactured locally, with \nminimum turnaround periods. \nRecent Investments in the Manufacturing \nSector \nThere was some remarkable progress in new \ninvestments by some companies across all \nsub-sectors despite challenges faced by the \nsector. Notable investments were made in the \noil processors, dairy industry, and the \nbeverages sub-sector. \nAccording to data from the Ministry of \nIndustry \nand \nCommerce, \nGovernment \napproved 23 investment projects worth \nUS$27.1 million during the second quarter of \nthe year. The projects are expected to create \nabout 828 jobs in the economy. \nCompany Closures \nAccording to data obtained from the Master of \nthe High Court, a total of 5 companies were \nplaced under judicial management, while 21 \nwere liquidated during the second quarter of \n2016 (see Table 6). Most liquidations were in \nthe retail sector. \nTable \n6: \nCompanies \nunder \nJudicial \nManagement & Liquidation \nYear \n2015 \n(Q4) \n2016 \n(Q1) \n2016 \n(Q2) \nCompanies Under \nJudicial Management \n4 \n6 \n5 \nLiquidation \n16 \n13 \n21 \nSource: Master of High Court, 2016 \nThe Retrenchment Board indicated that a total \nof 876 retrenchments were witnessed, during \nthe second quarter of 2016, compared to 794 \nin the comparative period in 2015. Figure 17 \nshows quarterly retrenchment figures from the \nfirst quarter of 2013 to the second quarter of \n2016. \nFigure \n17: \nQuarterly \nRetrenchments \nStatistics \n \nSource: Master of High Court, 2016 \n0\n500\n1000\n1500\n2000\n2500\n3000\n2013:Q1\n2013:Q2\n2013:Q3\n2013:Q4\n2014:Q1\n2014:Q2\n2014:Q3\n2014:Q4\n2015:Q1\n2015:Q2\n2015:Q3\n2015:Q4\n2016:Q1\n2016:Q2\n \n \n22 \nElectricity \n \nElectricity generated by major power stations \nsteadily increased since February 2016, \npeaking at 724.8GWh in June 2016, as shown \nin Table 7. \nTable 7: Electricity Generation \nPower Station \nMar \nJune \nKariba \n211.7 \n242.0 \nHwange \n313.1 \n434.2 \nBulawayo \n9.6 \n17.8 \nMunyati \n6.7 \n15.8 \nHarare \n19.2 \n14.9 \nTotal \n560.3 \n724.8 \nSource: Zimbabwe Power Company, 2016 \nDespite the increase in output since the \nbeginning of the year and the stabilisation of \nelectricity supply during the second quarter, \nthe 2016 power generation fell by about \n21.8%, compared to the 2015 levels. The fall \nin \nelectricity \ngeneration \nwas \npartially \nattributable to low water levels at Lake \nKariba, a development that greatly reduced \nthe amount of water allocated for power \ngeneration. Figure 18 compares the electricity \ngeneration by month in 2015 and 2016. \n \n \n \n \n \n \n \n \n \n \n \n \nFigure 18: Electricity sent out (GWh): \n2015 - 2016 \n Source: Zimbabwe Power Company, 2016 \nIndependent Power Producers contributed \nabout 51.6 GWh to the national grid during \nthe first half of the year, with Pungwe B hydro \npower station accounting for about 54% of the \noutput. \nElectricity supply in the country is expected to \nstabilise with the completion of various power \nstation refurbishment and expansion projects, \nincluding the expansion of the Kariba South \nStation, which is now more than 50% \ncomplete. The first unit of the installation is \ndue for commissioning in 2018. Upon \ncompletion, the Kariba South expansion \nproject is expected to add about 300MW into \nthe national grid. \n \n \n \n \n \n400\n500\n600\n700\n800\n900\n1000\n1100\nJan\nFeb\nMar\nApr\nMay\nJun\nElectricity Generated (GWh)\n2015\n2016\n \n \n23 \nINFLATION DEVELOPMENTS \n \nHeadline inflation rose during the second \nquarter of 2016, accelerating from -2.31% in \nMarch 2016 to -1.37% in June 2016. The \nincrease was largely driven by non-food \ninflation. Figure 19 shows the annual headline \ninflation profile from January 2014 to June \n2016. \n \nFigure 19: Annual Inflation Profile (%) \n \nSource: ZIMSTAT, July 2016 \n \nAnnual Food Inflation \n \nAnnual food inflation registered a marginal \ngain of 0.1 percentage points, from -4.1% \nrecorded in March 2016 to -4.0% in June \n2016. Increases in prices of fish and sea foods; \noils and fats; and some non-alcoholic \nbeverages, contributed to the rise in food \ninflation. The declines in prices of meat; bread \nand cereals; milk, cheese and eggs; fruit; and \nvegetables kept food inflation in negative \nterritory during the second quarter of 2016. \n \nAnnual Non Food Inflation \nYear-on-year non-food inflation accelerated \nfrom -1.4% in March 2016 to -0.1% in June \n2016. This was largely on account of increases \nin housing, water, electricity, gas and other \nfuels; and education. The other categories \nwhich contributed to the increase included \nclothing and footwear; transport and health. \nDeclines in alcoholic beverages and tobacco; \ncommunication and miscellaneous goods and \nservices, \nhowever, \npartially \noffset \nthe \nincreases. \n \nRegional Inflation \nZimbabwe’s inflation remained the lowest and \nthe only one in negative territory in the SADC \nregion, as shown in Table 8. South Africa, \nTanzania and Botswana inflation rates were \nwithin \nthe \nSADC \nMacroeconomic \nconvergence (MEC) target of between 3% and \n7%, during the first half of 2016. Inflation in \nZambia, Malawi and Mozambique, however, \nwas outside the MEC target. \n \nInflationary pressures in Zambia, Malawi and \nMozambique mainly emanated from exchange \nrate depreciations and drought induced food \nprice increases. \n \n \n \n \n \n \n \n-4\n-3.5\n-3\n-2.5\n-2\n-1.5\n-1\n-0.5\n0\n0.5\n1\nFeb-14\nApr-14\nJun-14\nAug-14\nOct-14\nDec-14\nFeb-15\nApr-15\nJun-15\nAug-15\nOct-15\nDec-15\nFeb-16\nApr-16\nJun-16\n(%)\n \n \n24 \nTable 8 : Annual Inflation rates (%) for \nSelected SADC Countries \n \nJun \n2015 \nDec \n2015 \nMar \n2016 \nJun \n2016 \nZimbabwe \n-2.8 \n-2.5 \n-2.3 \n-1.4 \nSouth Africa \n4.7 \n5.2 \n6.3 \n6.3 \nBotswana \n3.1 \n3.1 \n3 \n2.7 \nMozambique \n1.4 \n10.6 \n13.6 \n19.7 \nTanzania \n6.1 \n6.8 \n5.4 \n5.5 \nZambia \n7.1 \n21.1 \n22.2 \n21.0 \nMalawi \n21.3 \n24.9 \n22.1 \n22.6 \n Source: Country Central Bank Websites, 2016 \n \nQuarterly Annualised Inflation \nQuarterly annualized inflation has been in \nnegative territory since 2014, indicating the \npersistence of deflationary pressures in the \neconomy. \n \nFigure 20 : Quarterly Annualized Inflation \nProfile (%) \n \n \nSource: RBZ, July 2016 \n \nInflation Outlook \nWhile inflation is expected to remain largely \nsubdued in 2016, the anticipated upward \nmovement in food prices emanating from \ndrought induced food shortfalls is expected to \nexert upward pressure on inflation. In \naddition, the implementation of regulations \nunder Statutory Instrument 64 of 2016, which \nrestricts imports of certain consumer goods \ninto \nthe country, may \ncause transient \nshortages of basic commodities, which could \nresult in elevated prices in the short term. \n \nThe fluctuations in the US$/South African \nrand exchange rate and trends in crude oil \nprices will continue to influence the direction \nof inflation in Zimbabwe, in the outlook \nperiod. \nFISCAL PERFORMANCE \nDuring the first half of 2016, cumulative \nrevenue \ncollections \nstood \nat \nUS$1 692.40 million, against expenditures of \nUS$ 2 315.60 million, resulting in a deficit of \nUS$ 623.20 million. The deficit was largely \nfinanced through domestic bank sources. \n \nRevenue performance has generally remained \nbelow target, characterised by lower than \nanticipated income and consumption taxes, as \nshown in Figure 21. \n \n \n \n \n-6.0%\n-5.0%\n-4.0%\n-3.0%\n-2.0%\n-1.0%\n0.0%\n1.0%\n2.0%\nMar-14\nJun-14\nSep-14\nDec-14\nMar-15\nJun-15\nSep-15\nDec-15\nMar-16\nJun-16\n \n \n25 \nFigure 21: Revenue Performance (Actual vs \nTarget - Jan-June 2016) \n \nSource: \nMinistry \nof \nFinance \nand \nEconomic \nDevelopment. \nTotal revenue collections during the half year \nto June 2016 also fell short of the collections \nduring the same period in 2015 (see \nFigure 22). \n \n \n \n \n \n \n \n \nFigure 22: Total Revenue Collected (Jan - \nJune 2015 and Jan-June 2016) \n \nSource: \nMinistry \nof \nFinance \nand \nEconomic \nDevelopment, 2016 \n \n \nRevenue Structure \nThe major sources of Government revenue \nduring the first half of 2016 were taxes on \nincome and profits, value added tax and excise \nduties. Taxes from incomes and profits \namounted to $595.63 million (35%); VAT \n$454.09 million (27%); while excise duties \ntotaled $315.26 million (19%). The heavy \nreliance on individual and corporate taxes, as \nwell as VAT exposes the fiscus to revenue \nshocks, mainly as a result of the general \nslowdown in economic activity, job losses and \nthe resultant reduced disposable incomes. \nFigure 23 shows the structure of Government \nrevenue for the first half of 2016. \n0\n100\n200\n300\n400\n500\n600\n700\nMillions\nActual\nTarget\n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\nMillions\n2015\n2016\n \n \n26 \nFigure 23: Revenue Structure \n \nSource: Ministry of Finance and Economic Development \nGovernment Expenditure \nGovernment expenditures for the first half of \nthe year amounted to $2 315.6 million, \ndominated by recurrent spending, which \namounted to $1 888.39 million or 86% of total \nexpenditures. \nEmployment costs amounted to $1 638 \nmillion, representing 96.8% of total revenue \nfor the period January to June 2016. Capital \nexpenditure amounted to $407 million as \nshown in Figure 24. \n \n \n \n \n \nFigure \n24: \nStructure \nof \nGovernment \nExpenditure \n \nSource: Ministry of Finance and Economic Development \nOther recurrent expenditures, on the other \nhand, amounted to $216.00 million, or 9% of \ntotal expenditures. \n \nBudget Financing \nGovernment’s overall net financing amounted \nto $623.2 million and this was financed \nprimarily through the issuance of Treasury \nbills. \n \n \n \n \n \n \n \nIndividuals\n21%\nCompanies\n8%\nOther \ndirect \ntaxes\n6%\nCustoms \nduties\n10%\nExcise \nduties\n18%\nValue Added \nTax\n26%\nOther \nindirect \ntaxes\n3%\nNon-Tax \nRevenue\n8%\nEmployment \nCosts\n72%\nOperations & \nMaintainance\n9%\nInterest \nRepayments\n2%\nCapital \nexpenditure\n17%\n \n \n27 \n4. MONETARY DEVELOPMENTS, \nINTEREST RATES AND FINANCIAL \nMARKETS \n \nMonetary Developments \nBroad \nmoney \nincreased \nby \n4.55% \nto \nUS$5 140.7 million in the second quarter of \n2016, from US$4 916.8 million in the first \nquarter of 2016. On a year on year basis, \nmoney \nsupply \nrose \nby \n13.13%, \nfrom \nUS$4 544.01 million in June 2015. \nThe quarterly growth in money supply was \nbroadly driven by increases under 30-days \ndeposits, 10.7%; and demand deposits, 9.1%. \nPartially offsetting these increases were \ndeclines of 6.1% and 1.9% in over 30-days \nand savings deposits, respectively. \nThe increase in money supply also partly \nreflected tobacco selling season related \ninflows. Tobacco worth US$467.2 million had \nbeen sold as at 30th June 2016, during the \n2016 tobacco selling season. \nFigure 25 shows annual broad money supply \nin nominal terms as well as growth rates. \n \n \n \n \n \n \n \nFigure 25: Annual Broad Money Supply \nGrowth Rates and Levels \n \nSource: RBZ, 2016 \nDomestic Credit \nCredit extended to the private sector decreased \nby 2.74%, from US$3 672.2 million in the \nfirst quarter of 2016 to US$3 571.6 million in \nthe second quarter. Since the last quarter of \n2015, private sector credit growth has \ngenerally weakened, due to cautionary lending \nby banks. \n \nOutstanding credit to the private sector was \ndistributed as follows: households (23.3%); \nagriculture \n(18.3%); \nservices \n(17.1%); \nmanufacturing (15.6%); distribution (13.0%); \nmining (5.2%); financial organisations and \ninvestments, \n(3.0%); \ntransport \nand \ncommunications (2.8%); and construction \n(1.4%). \n \n0%\n2%\n4%\n6%\n8%\n10%\n12%\n14%\n0.00\n1.00\n2.00\n3.00\n4.00\n5.00\n6.00\nMoney Supply Growth\nUS$ Billion\nDemand Deposits\n Savings\n Short Term Deposits\n Long Term Deposits\n Bond Coins\nAnnual Growth\n \n \n28 \nInterest Rates \nDuring the period under review, nominal \nlending rates quoted by banks ranged between \n6% and 18%. The range was in accordance \nwith the guidelines prescribed by the Central \nBank in the second half of 2015. Going \nforward, banks are expected to lower their \nlending rates to range between 5% and 15%, \nas per the new guidelines set by the Central \nBank in the Monetary Policy measures \nannounced in April 2016. \n \nDuring the quarter under review, the average \n90-days \ndeposit \nrate \ndeclined \nby \n0.86 percentage points, from 7.00% to 6.14%. \nThe decline partially reflected banks’ low \nappetite for costly deposits in a difficult \neconomic, as well as their drive to manage the \ncost of funds. \n \n \nSTOCK MARKET DEVELOPMENTS \n \nDespite the slowdown in economic growth, \nwhich has resulted in a challenging operating \nenvironment, with many corporates resorting \nto \ndownsizing \nand \nrestructuring, \nthe \nZimbabwe Stock Exchange (ZSE) recovered \nfrom losses of the first quarter of 2016. The \nindustrial \nand \nmining \nindices \nrecorded \nmarginal increases during the second quarter \nof 2016, on the back of better than expected \nfinancial results for the first half of the \nfinancial year. \n \nIndustrial Index \nThe industrial index increased by 3.43 points, \nfrom 97.61 points as at 31st March 2016 to \n101.04 points as at end of the second quarter \nof 2016. On a year-on-year basis, however, \nthe industrial index declined by 47.39 points, \nfrom 148.40 points as at end June 2015, as \nshown in Figure 26. \n \nFigure 26: Zimbabwe Stock Exchange \nIndices \n \n \nSource: Zimbabwe Stock Exchange, 2016 \n \nMining Index \n \nIn the resources subsector, activity remained \nconstrained, as investors’ interest in some \nmining counters, such as Falgold and Hwange \nColliery Company was weak, largely due to \ndifficulties in accessing low cost funding for \nrecapitalisation and retooling. \n \nThe resources index increased by 5.35 points, \nfrom 19.35 points as at end March 2016, to \nclose the second quarter of 2016 at 24.70 \npoints. On a year-on-year basis, however, the \nmining index declined from 44.30 points as at \nend June 2015, to 24.70 points as at end June \n2016. \n \nThe marginal increase in the mining index, \nduring the second quarter of 2016, largely \n0\n20\n40\n60\n80\n100\n120\n70\n90\n110\n130\n150\n170\n190\n210\n230\nJun-15\nJul-15\nAug-15\nSep-15\nOct-15\nNov-15\nDec-15\nJan-16\nFeb-16\nMar-16\nApr-16\nMay-16\nJun-16\nMining\nIndustrial\nIndustrial Index\nMining Index\n \n \n29 \nreflected renewed investor interest in RioZim \nand Bindura Nickel Corporation (BNC), \nunderpinned by positive growth prospects of \nthe mining companies. \n \n \nMarket Capitalisation \n \nIn line with developments on various \ncounters, the ZSE gained US$135.9 million \nworth of market capitalisation during the \nquarter under review, reflecting a 5.14% \nincrease from US$2.65 billion as at end March \n2016, to US$2.78 billion as at end June 2016. \nOver the year to June 2016, however, the ZSE \nlost US$1.1 billion worth of value. Figure 27 \ndepicts \nthe \nmovements \nin \nmarket \ncapitalisation between June 2015 and June \n2016. \n \nFigure 27: Market Capitalisation \n \n \nSource: Zimbabwe Stock Exchange, 2016 \n \nMarket Turnover \nThe viability of most entities remained a \nchallenge, on the back of low aggregate \ndemand. Investments on the local bourse \nwere, however, skewed towards wealth \npreserving blue chip counters in which \nsignificant block trades were registered during \nthe quarter ending June 2016. Resultantly, \nmarket turnover increased by 8.43%, to \nUS$45.96 million from US$42.39 million \nrealised as at end March 2016 (see Figure 28). \n \nThe volume of shares traded increased by \n47.51%, to 375 429 648 shares in the second \nquarter of 2016 from 254 505 420 shares in \nthe first quarter. \n \nFigure 28: Market Turnover Value \n \nSource: Zimbabwe Stock Exchange, 2016 \n \n \n \n \n2,000\n2,500\n3,000\n3,500\n4,000\n4,500\n5,000\n5,500\n6,000\n30-Jun-15\n31-Jul-15\n31-Aug-15\n30-Sep-15\n31-Oct-15\n30-Nov-15\n31-Dec-15\n31-Jan-16\n29-Feb-16\n31-Mar-16\n30-Apr-16\n31-May-16\n30-Jun-16\nUS$ Millions\n0\n2\n4\n6\n8\n10\n12\n30-Jun-15\n31-Jul-15\n31-Aug-15\n30-Sep-15\n31-Oct-15\n30-Nov-15\n31-Dec-15\n31-Jan-16\n29-Feb-16\n31-Mar-16\n30-Apr-16\n31-May-16\n30-Jun-16\nUS$ Millions\n \n \n30 \nOther Stock Market Developments \nDuring the quarter under review, a retail \nspecialty \ninstitution, \nAxia \nCorporation \nLimited (Axia), was listed on the Zimbabwe \nStock Exchange (ZSE) on 17th May 2016. \nAxia emerged from the unbundling of Innscor \nAfrica \nLimited’s retail and distribution \nbusiness through a dividend in specie with the \naim to further unlock shareholder value in the \ngroup. \n \n5. PAYMENT, CLEARING AND \nSETTLEMENT ACTIVITIES \n \nThe value of transactions processed through \nthe \nNational \nPayment \nSystems \n(NPS) \nincreased by 12% to US$15.08 billion in the \nsecond quarter ending 30 June 2016, from \nUS$13.47 billion recorded in the quarter \nending 31 March 2016. Volumes also \nincreased by 14% to 78.85 million, from \n69.37 million during the same period. The \nincrease was in response to the policies put in \nplace by the central bank in May 2016. \n \nIn value terms, the increase in NPS \ntransactions was largely driven by Point of \nSale (POS), Real Time Gross Settlement \n(RTGS), and Mobile. Cheque transactions, \nAutomated Teller Machines (ATMs). Internet \npayment \nstreams, \nhowever, \nrecorded \ndecreases in value for the quarter ending June \n2016. \n \nTable 9 provides the statistical information on \nvarious payment streams for the first and \nsecond quarters of 2016. \n \n \nTable 9: Consolidated Transactional Activities \nPaymen\nt stream \nFirst \nquarter \nending \n31 March \n2016 \nSecond \nquarter \nending \n30 June \n2016 \nChange \nfrom \nlast \nquarter \nProportion \n \nUS$ Millions \n \n \nRTGS \n10,294.24 \n11,955.75 \n16.0% \n79.3% \nCHEQUE \n34.22 \n30.75 \n-10.0% \n0.2% \nPOS \n418.22 \n598.85 \n43.0% \n4.0% \nATMS \n932.46 \n582.29 \n-38.0% \n3.9% \nMOBILE \n1,195.27 \n1,372.35 \n15.0% \n9.1% \nINTERNET \n591.54 \n536.73 \n-9.0% \n3.6% \nTOTAL \n13,465.95 \n15,076.72 \n12% \n100% \nVOLUMES \nRTGS \n433,141 \n629,173 \n45.0% \n0.8% \nCHEQUE \n84,522 \n87,620 \n4.0% \n0.1% \nPOS \n4,074,087 \n7,946,373 \n95.0% \n10.1% \nATMs \n3,134,486 \n2,259,121 \n-28.0% \n2.9% \nMOBILE \n61,481,299 \n67,700,733 \n10.0% \n85.9% \nINTERNET \n166,320 \n229,331 \n38.0% \n0.3% \nTOTAL \n69,373,855 \n78,852,351 \n14% \n100% \nSource: RBZ, 2016 \n \nLarge Value Payments \nZimbabwe \nElectronic \nTransfer \nand \nSettlement System \nThe value of transactions processed through \nthe RTGS system increased by 16% for the \nsecond quarter ending 30 June 2016, to \nUS$11.96 billion from US$10.29 billion in \nquarter ending 31 March 2016. Transaction \nvolumes registered an increase of 45% to \n629,173, from 433,141, as shown in Figure \n29. \n \n \n \n \n \n \n31 \nFigure 29: RTGS Values and Volumes \n \nSource: RBZ, 2016 \n \nSWIFT Foreign Currency Transactions \nSWIFT foreign currency payments decreased \nby 11% to US$1.19 billion for the quarter \nending 30 June 2016, from US$1.33 billion in \nthe quarter ending 31 March 2016. During the \nsame period, SWIFT foreign currency receipts \nalso increased by 17% to US$1.33 billion, \nfrom US$1.14 billion. Net foreign currency \ninflows amounted to US$137.7 million during \nthe quarter under review. Trends in the \nquarterly transactions are shown in Figure 30. \n \n \nFigure \n30: \nSWIFT \nCross \nBorder \nTransactions \n \nSource: RBZ, 2016 \n \nOver the Counter Cash Withdrawals \nThe value of cash withdrawals decreased by \n20%, from US$2.46 billion during the quarter \nending 31 March 2016, to US$1.98 billion \nrecorded in quarter ending 31 June 2016. \nCorresponding volumes, however, increased \nby 51% from 2.81 million to 4.24 million as \nshown in Figure 31. \n \n \n \n \n0\n100\n200\n300\n400\n500\n600\n700\n9.00\n9.50\n10.00\n10.50\n11.00\n11.50\n12.00\n12.50\n2015\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2016\nQ1\n2016\nQ2\nRTGS Values in Billions\nRTGS Volumes in Thousamds\nRTGS VALUES AND VOLUMES \nValues\nVolumes\n30\n35\n40\n45\n50\n55\n1.00\n1.05\n1.10\n1.15\n1.20\n1.25\n1.30\n1.35\n1.40\n1.45\n1.50\n2015Q12015Q22015Q32015Q42016Q12016Q2\nVolumes in Thousands\nValue in US$B\nValue of Receipts\nValue of Payments\n Volumes of Payments\n Volumes of Receipts\n \n \n32 \nFigure \n31: \nOver \nthe \nCounter \nCash \nWithdrawals. \n \nSource: RBZ, 2016 \n \nRetail Payments \nTotal retail transactions increased from \nUS$13 466.0 million in the first quarter of \n2016, to US$15 076 million in the second \nquarter of 2016. In volume terms, total retail \ntransactions amounted to 78.8 million in the \nsecond quarter of 2016, up from 69.4 million \nin the first quarter of 2016. This was mainly \ndue to the increase in the usage of plastic \nmoney. \n \nFigures 32 and 33 depicts the trend in the \nvalues and volumes of retail transactions from \nthe quarter ended 31 March 2015, to the \nquarter ended 30 June 2016. \n \n \n \nFigure 32: Values of Retail Transactions \n \n Source: RBZ, 2016 \n \n \nFigure 33: Volumes of Retail Transactions \n \nSource: RBZ, 2016 \n0.00\n0.50\n1.00\n1.50\n2.00\n2.50\n3.00\n3.50\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n3.5\n4.0\n4.5\nUS$ BILLIONS\nMILLIONS\nVolumes\nValues\n0\n200\n400\n600\n800\n1,000\n1,200\n1,400\n1,600\nQ1 2015\nQ2 2015\nQ3 2015\nQ4 2015\nQ1 2016\nQ2 2016\nUS$ Millions\nCHEQUE\nPOS\nATMS\nMOBILE\nINTERNET\n0\n10\n20\n30\n40\n50\n60\n70\n80\n0.0\n1.0\n2.0\n3.0\n4.0\n5.0\n6.0\n7.0\n8.0\n9.0\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2015\nQ1\n2016\nQ2\n2016\nMobile Volumes in Millions\nOther Retai Volumes in Millions\nCHEQUE\nPOS\nATMs\n \n \n33 \nCollateral2 \nThe \nvalue \nof \ncollateral \nincreased \nto \nUS$13.15 million in the quarter ended June \n2016, from US$11.08 million recorded in the \nquarter ended March 2016, as shown in \nFigure 34. \n \nFigure 34: Total Collateral \n \nSource: RBZ, 2016 \nAccess Points and Device \nMobile payment agents declined from 35 022 \nin the first quarter of 2016, to 34 351 in the \nsecond quarter of 2016. The POS population \nrose to 19 280 in the second quarter of 2016, \nfrom 17 069 in the first quarter. \n \nThe number of active subscribers for mobile \nfinancial services stood at 3.2 million during \nthe second quarter of 2016, down from 3.6 \n \n2The collateral figure comprises of cheque and card \npayment stream amounts. \nmillion subscribers during the first quarter of \n2016. \n \n Table 10 shows statistics for access points \nand devices for the second quarter of 2015 and \nthe first two quarters of 2016. \n \n \nTable 10: Payment Systems Access Points and \nDevices \nPAYMENT SYSTEMS \nACCESS POINTS \n \n \n \nQ2 2015 \nQ1 2016 \nQ2 2016 \nMobile \nBanking \nAgents \n30,274 \n35,022 \n34,351 \nATMs \n536 \n541 \n548 \nPOS \n15,908 \n17,069 \n19,280 \nPAYMENT SYSTEMS \nACCESS DEVICES \n \nDebit Cards \n2,309,402 \n2,472,656 \n2,724,317 \nCredit Cards \n10,531 \n13,036 \n14,299 \nPrepaid Cards \n25,763 \n29,466 \n30,339 \nActive Mobile \nBanking \nSubscribers \n4,012,335 \n3,576,540 \n3,212,561 \nInternet \nBanking \nSubscribers \n89,018 \n109,669 \n115,478 \nSource: RBZ, 2016 \n \n \nRESERVE BANK OF ZIMBABWE \nSEPTEMBER 2016 \n \n0\n2\n4\n6\n8\n10\n12\n14\nQ4\n2014\nQ1\n2015\nQ2\n2015\nQ3\n2015\nQ4\n2015\nQ1\n2016\nQ2\n2016\nUS$ MILLIONS\nSTATISTICAL TABLES \n \n1. \nLiabilities and Assets of the Central Bank \n1.1. Reserve Bank: Liabilities \n \n \n \n \n \n \n \nS3 \n1.2. Reserve Bank: Assets \n \n \n \n \n \n \n \nS4 \n \n2. \nLiabilities and Assets of Other Depository Corporations \n2.1. Commercial Banks: Assets \n \n \n \n \n \n \nS5 \n2.2. Commercial Banks: Liabilities \n \n \n \n \n \n \nS6 \n2.3. Accepting Houses: Assets \n \n \n \n \n \n \n \nS7 \n2.4. Accepting Houses: Liabilities \n \n \n \n \n \n \nS8 \n2.5. Building Societies: Assets \n \n \n \n \n \n \n \nS9 \n2.6. Building Societies: Liabilities \n \n \n \n \n \n \nS10 \n \n3. \nMoney Supply and Bank Liquidity \n3.1. Monetary Aggregates \n \n \n \n \n \n \n \nS11 \n3.2. Broad Money Survey \n \n \n \n \n \n \n \nS12 \n3.3. Analysis of Monthly Changes in Money Supply \n \n \n \n \nS13 \n3.4. Analysis of Yearly Changes in Money Supply \n \n \n \n \nS14 \n3.5. Sectoral Analysis of Commercial Banks’ Loans and Advances \n \n \nS15 \n3.6. Sectoral Analysis of Commercial Bank’s Deposits \n \n \n \nS16 \n \n4. \nNational Payment Systems \n \n \n4.1. Values of Transactions \n \n \n \n \n \n \n \nS17 \n4.2. Volumes of Transactions \n \n \n \n \n \n \n \nS17 \n \n5. \nInterest Rates, Security Yields and Prices \n5.1. Lending Rates \n \n \n \n \n \n \n \n \nS18 \n5.2. Deposit Rates \n \n \n \n \n \n \n \n \nS18 \n5.3. Stock Exchange Indices \n \n \n \n \n \n \n \nS19 \n5.4. Monthly Inflation \n \n \n \n \n \n \n \n \nS20 \n5.5. Quarterly Inflation \n \n \n \n \n \n \n \n \nS21 \n5.6. Annual Inflation \n \n \n \n \n \n \n \n \nS22 \n \n \n \n \n \n \n \n \n35 \n6. \nBalance of Payments \n6.1. Cross Border Payments \n \n \n \n \n \n \n \nS23 \n6.2. Cross Border Receipts \n \n \n \n \n \n \n \nS24 \n6.3. External Debt Outstanding By Debtor \n \n \n \n \n \nS25 \n6.4. External Debt Outstanding by Source \n \n \n \n \n \nS26 \n6.5. External Debt Service and Debt Service Ratios \n \n \n \n \nS27 \n \n7. \nNational Accounts \n7.1. Real Gross Domestic and National Product per Capita at Market Prices \n \nS28 \n7.2. Gross Domestic Product at Factor Cost by Industry \n \n \n \nS29 \n7.3. Expenditure on Gross Domestic Product \n \n \n \n \n \nS20 \n7.4. Mineral Production \n \n \n \n \n \n \n \nS21 \n7.5. Electricity Produced and Distributed \nS32 \n7.6. Volume of Manufacturing Index \n \n \n \n \n \n \nS33 \n \n \n \n \n \n \nTABLE 1.1: RESERVE BANK - LIABILITIES\nCapital\nand\nForeign\ngeneral\nEnd of\nNotes and\nBankers Deposits \nOther Deposits\nGovt. Deposits\nTotal Deposits\nLiabilities\nreserve\nOther Liabilities\nTOTAL\ncoins* in\ncirculation\n2009\n0.0\n125,081.2\n0.0\n0.0\n125,081.2\n0.0\n-1,131,128.2\n0.0\n-1,006,047.0\n2010\n0.0\n255,984.5\n0.0\n0.0\n255,984.5\n0.0\n-1,146,095.7\n0.0\n-890,111.2\n2011\n0.0\n185,871.1\n0.0\n0.0\n185,871.1\n0.0\n-1,056,254.3\n0.0\n-870,383.1\n2012\n0.0\n272,600.8\n0.0\n0.0\n272,600.8\n0.0\n-1,089,458.2\n0.0\n-816,857.3\n2013\n0.0\n271,521.6\n0.0\n0.0\n271,521.6\n0.0\n-1,206,013.8\n0.0\n-934,492.2\n2014\n780.6\n463,303.1\n144.5\n25,063.7\n488,511.2\n1,020,936.5\n-1,154,483.9\n514,373.6\n870,118.0\n2015\nJan\n1,256.3\n546,579.0\n714.7\n12,594.0\n559,887.7\n1,007,096.0\n-1,234,015.1\n523,627.1\n857,852.0\nFeb\n1,609.4\n553,281.5\n898.5\n12,908.0\n567,088.1\n1,009,161.8\n-1,205,744.6\n521,890.3\n894,004.9\nMar\n1,977.5\n477,018.7\n545.0\n22,274.1\n499,837.7\n858,095.4\n-1,276,355.3\n588,328.8\n671,884.1\nApr\n2,597.6\n536,954.50\n491.6\n20,372.3\n557,818.4\n894,207.5\n-1,296,216.5\n527,921.7\n686,328.6\nMay\n3,194.1\n530,935.78\n340.2\n21,462.1\n552,738.1\n868,931.4\n-1,237,240.7\n517,976.8\n705,599.7\nJun\n3,687.7\n590,212.15\n4,035.0\n28,221.8\n622,468.9\n1,093,306.3\n-1,204,438.8\n522,439.0\n1,037,463.2\nJul\n3,831.8\n569,265.20\n3,889.6\n38,524.6\n611,679.4\n1,039,959.7\n-1,180,737.7\n522,899.7\n997,632.8\nAug\n4,169.8\n516,622.42\n3,480.3\n37,156.9\n557,259.6\n1,056,817.9\n-1,139,506.4\n514,099.9\n992,840.7\nSep\n4,570.9\n569,998.59\n3,478.9\n54,700.0\n628,177.6\n1,057,080.8\n-1,198,410.5\n515,732.0\n1,007,150.8\nOct\n5,474.5\n571,870.59\n3,485.7\n37,000.6\n612,356.9\n1,069,972.4\n-1,224,135.7\n526,985.7\n990,653.7\nNov\n7,099.3\n570,235.83\n2,470.9\n33,271.0\n605,977.8\n1,048,664.8\n-1,209,170.9\n533,237.9\n985,808.8\nDec\n7,960.8\n555,252.37\n726.0\n41,051.4\n597,029.7\n1,096,800.8\n-1,086,695.2\n462,647.2\n1,077,743.3\n2016\nJan\n8,573.9\n678,906.55\n1,832.8\n48,555.7\n729,295.0\n1,090,485.7\n-1,183,887.9\n458,727.3\n1,103,194.1\nFeb\n8,895.6\n713,682.30\n2,086.4\n51,278.7\n767,047.4\n1,117,823.6\n-1,248,400.6\n452,807.6\n1,098,173.6\nMar\n9,138.3\n784,713.35\n1,423.3\n52,453.3\n838,589.9\n1,075,644.5\n-1,320,215.0\n453,150.7\n1,056,308.3\nApr\n9,308.7\n830,998.39\n5,061.6\n59,783.6\n895,843.6\n1,117,787.5\n-1,378,072.5\n473,499.1\n1,118,366.5\nMay\n9,502.1\n945,135.87\n3,602.5\n59,269.1\n1,008,007.4\n1,184,783.0\n-1,466,087.9\n465,321.4\n1,201,525.9\nJun\n9,719.3\n996,320.43\n3,701.2\n48,186.9\n1,048,208.5\n1,042,014.2\n-1,375,368.2\n496,057.6\n1,220,631.3\n*Bond coins first issued in December 2014\nSource: Reserve Bank of Zimbabwe, 2016\nDeposits\nUS$ Thousands\n \n \n \nS2 \n \n \nUS$ Thousands\nEnd of\nGold\nOther\nTotal\nTreasury Bills\nCentral\nBanks\nOther\nGovt.\nOther\nOther Assets\nTOTAL\nGovernment\nStock\n2009\n0.0\n467,033.2\n467,033.2\n0.0\n-1,857.6\n0.0\n318.1\n0.0\n15,937.1\n202,242.7\n684,290.0\n2010\n0.0\n484,200.1\n484,200.1\n0.0\n-4,729.2\n0.0\n547.5\n0.0\n12,242.7\n300,344.1\n793,276.8\n2011\n1,053.6\n413,085.3\n414,138.9\n0.0\n-1,834.8\n0.0\n0.0\n0.0\n43,849.4\n459,279.7\n916,123.1\n2012\n1,140.6\n446,848.2\n447,988.8\n0.0\n-11,097.8\n0.0\n0.0\n0.0\n37,106.2\n570,985.5\n1,048,512.8\n2013\n486.1\n338,001.8\n338,487.8\n0.0\n-1,182.3\n0.0\n0.0\n0.0\n31,621.4\n495,455.6\n867,877.2\n2014\n485.7\n356,094.1\n356,579.8\n0.0\n0.0\n0.0\n3,538.7\n0.0\n31,250.4\n478,749.2\n870,118.0\n2015\nJan\n511.0\n345,932.3\n346,443.2\n15.3\n0.0\n0.0\n3,542.8\n0.0\n31,250.4\n476,600.2\n857,852.0\nFeb\n486.6\n280,403.4\n280,889.9\n100,015.2\n0.0\n0.0\n3,584.5\n0.0\n31,250.4\n478,264.8\n894,004.9\nMar\n477.4\n281,692.7\n282,170.1\n118,205.2\n0.0\n0.0\n2,960.6\n0.0\n28,623.2\n239,925.1\n671,884.1\nApr\n486.9\n282,413.8\n282,900.6\n118,749.9\n0.0\n0.0\n17,646.4\n0.0\n28,773.2\n238,258.5\n686,328.6\nMay\n479.8\n302,738.8\n303,218.6\n119,309.9\n0.0\n0.0\n20,219.4\n0.0\n28,929.7\n233,922.1\n705,599.7\nJun\n473.5\n453,512.5\n453,986.1\n120,029.3\n161,578.2\n4,821.5\n35,961.1\n0.0\n29,147.6\n231,939.5\n1,037,463.2\nJul\n437.8\n395,333.2\n395,771.0\n120,029.3\n161,578.2\n4,821.5\n54,293.1\n0.0\n29,147.6\n231,992.1\n997,632.8\nAug\n457.0\n360,248.6\n360,705.6\n120,096.3\n187,350.1\n4,821.5\n58,797.7\n0.0\n29,147.6\n231,921.9\n992,840.7\nSep\n455.8\n359,800.0\n360,255.9\n120,093.6\n188,904.2\n4,821.5\n69,165.1\n0.0\n29,330.1\n234,580.4\n1,007,150.8\nOct\n462.5\n334,859.2\n335,321.7\n120,093.6\n188,904.2\n4,863.0\n79,380.5\n0.0\n29,330.1\n232,760.7\n990,653.7\nNov\n425.7\n299,754.8\n300,180.5\n158,463.3\n188,904.2\n4,863.0\n81,260.1\n0.0\n29,330.1\n222,807.8\n985,808.8\nDec\n15,643.5\n417,809.4\n433,452.9\n213,918.6\n158,684.9\n19,985.9\n128,307.0\n0.0\n29,863.5\n93,530.5\n1,077,743.3\n2016\nJan\n15,448.5\n408,820.6\n424,269.1\n212,269.6\n191,516.5\n19,985.9\n125,595.0\n0.0\n32,363.5\n97,194.4\n1,103,194.1\nFeb\n15,493.9\n375,316.3\n390,810.3\n253,708.5\n215,576.7\n19,985.9\n84,651.5\n0.0\n32,363.5\n101,077.2\n1,098,173.6\nMar\n15,497.9\n319,054.8\n334,552.7\n289,991.3\n208,465.9\n15,000.0\n86,029.9\n0.0\n33,758.9\n88,509.7\n1,056,308.3\nApr\n15,505.8\n339,102.6\n354,608.4\n295,759.5\n220,311.2\n15,000.0\n94,145.2\n0.0\n35,798.9\n102,743.4\n1,118,366.5\nMay\n15,489.8\n391,892.0\n407,381.8\n275,759.5\n251,942.7\n15,000.0\n107,168.1\n0.0\n35,798.9\n108,474.9\n1,201,525.9\nJun\n15,532.3\n373,471.8\n389,004.0\n283,077.8\n273,946.1\n1,016.0\n120,524.9\n0.0\n35,798.9\n117,263.6\n1,220,631.3\nSource: Reserve Bank of Zimbabwe, 2016 \nLoans and advances\nInvestments\n Foreign Assets\nTABLE 1.2: RESERVE BANK - ASSETS\n \n \n \nS3 \n \n \nLoans & \nContingent\nOther\nNon \nFinancial \nTotal\nEnd of\nBond \nCoins\nForeign \nNotes\nTotal\nOther \nBalances\nAdvances\nAssets\nAssets\nAssets\nAssets \n&\nBalances\nBalances \nBalances\n Liquid\nwith RBZ\nCoin\nwith\nwith Other \nat\nTrade\nTreasury\nAgric PEs\n Assets\nat Banks\nRBZ\nBanks\nForeign \nBills\nBills\n2009\n158.3\n106.3\n7.3\n423.6\n36.2\n0.0\n0.0\n731.8\n91.1\n523.5\n192.3\n47.3\n217.8\n1,803.8\n2010\n206.3\n136.2\n12.0\n420.5\n88.8\n0.0\n0.0\n863.7\n115.2\n1,080.0\n303.5\n125.1\n222.0\n2,709.4\n2011\n256.0\n225.3\n92.0\n361.7\n140.6\n0.0\n0.0\n1,075.7\n119.8\n1,952.0\n244.2\n127.6\n310.5\n3,829.8\n2012\n375.9\n374.7\n131.1\n219.7\n190.8\n8.2\n0.0\n1,300.4\n27.7\n2,631.8\n375.3\n250.7\n389.0\n4,975.0\n2013\n354.8\n367.8\n135.5\n287.3\n199.9\n118.0\n6.6\n1,469.9\n28.4\n2,799.5\n490.8\n259.5\n347.6\n5,395.7\n2014\n310.2\n466.1\n168.0\n152.4\n188.8\n285.4\n0.0\n1,571.0\n7.3\n2,961.2\n633.2\n377.7\n389.2\n5,939.5\n2015\nJan\n0.6\n222.5\n527.9\n159.0\n182.6\n163.6\n301.9\n0.0\n1,581.9\n21.4\n2,796.8\n557.7\n606.5\n366.1\n5,684.2\n Feb\n0.4\n216.7\n501.2\n149.6\n183.2\n128.6\n344.6\n0.0\n1,524.2\n17.9\n2,792.5\n564.8\n542.1\n356.8\n5,581.5\n Mar\n0.6\n246.9\n461.4\n147.8\n222.2\n121.6\n338.0\n5.4\n1,543.8\n15.5\n2,925.5\n527.3\n599.4\n362.0\n5,726.6\n Apr\n0.7\n205.5\n492.8\n158.6\n218.5\n112.0\n335.1\n5.4\n1,528.6\n18.2\n2,967.1\n527.1\n364.2\n385.4\n5,790.7\n May\n0.7\n237.3\n495.6\n135.1\n181.0\n101.4\n622.7\n5.5\n1,779.2\n18.2\n2,922.7\n525.7\n434.2\n384.3\n6,064.3\n Jun\n0.8\n245.7\n570.9\n155.1\n144.7\n90.8\n750.1\n4.4\n1,962.4\n28.8\n2,872.6\n498.4\n351.0\n386.2\n6,099.4\n Jul\n0.9\n226.0\n544.9\n137.3\n135.3\n86.3\n770.0\n0.0\n1,900.7\n28.8\n2,815.0\n504.1\n361.1\n388.8\n5,998.5\n Aug\n1.0\n234.0\n523.7\n104.3\n194.7\n76.1\n786.5\n5.1\n1,925.3\n28.8\n2,810.1\n535.2\n339.9\n390.5\n6,029.6\n Sep\n1.0\n255.2\n551.8\n114.8\n192.9\n63.7\n764.9\n5.1\n1,949.4\n28.0\n2,844.1\n599.2\n404.6\n392.3\n6,217.7\n Oct\n0.9\n215.7\n536.1\n143.7\n171.5\n83.5\n808.3\n5.2\n1,964.9\n26.7\n2,884.2\n599.3\n350.6\n391.5\n6,217.0\n Nov\n1.2\n186.9\n526.1\n135.9\n123.5\n74.3\n871.8\n5.2\n1,924.9\n26.6\n2,931.5\n603.6\n355.3\n393.6\n6,235.5\n Dec\n0.7\n181.6\n542.9\n127.5\n118.6\n79.7\n1,031.3\n5.2\n2,087.6\n20.8\n2,820.5\n582.0\n352.8\n396.7\n6,260.4\n2016\n Jan\n1.0\n172.0\n646.9\n119.2\n130.7\n76.6\n981.9\n5.2\n2,133.5\n20.6\n2,763.7\n582.8\n387.3\n396.6\n6,284.4\n Feb\n1.2\n140.7\n682.1\n96.3\n118.1\n21.5\n1,125.6\n5.2\n2,190.7\n20.1\n2,680.9\n477.1\n390.1\n399.3\n6,158.2\n Mar\n1.3\n161.9\n714.2\n96.3\n156.8\n19.2\n1,140.5\n5.1\n2,295.4\n20.3\n2,690.6\n430.6\n428.7\n405.1\n6,270.8\n Apr\n1.3\n135.5\n757.8\n135.5\n133.3\n18.7\n1,198.1\n5.1\n2,385.4\n20.4\n2,653.4\n413.7\n441.1\n404.7\n6,318.6\n May\n1.4\n89.6\n871.6\n130.5\n110.4\n19.3\n1,215.9\n5.0\n2,443.6\n19.8\n2,681.8\n397.0\n358.0\n412.6\n6,312.8\n June\n1.4\n108.5\n914.7\n84.6\n148.3\n19.2\n1,274.4\n1.8\n2,553.0\n19.7\n2,669.3\n407.7\n358.0\n431.6\n6,439.3\nSource: Reserve Bank of Zimbabwe, 2016 \nTABLE 2.1: COMMERCIAL BANKS - ASSETS\nUS$ Millions\nLiquid Assets\nSecurities\n \n \n \nS4 \n \n \nDeposits\nAmounts \nOwing to\nCapital\nContingent\nOther\nTotal\nOf which\nand\nLiabilities\nLiabilities\nLiabilities \nLiabilities to \nthe \nEnd of\nDemand\nSavings and \nShort-term\nLong-term\nTotal\nForeign \nLiabilities\nRBZ\nOther Banks\nReserves\nPublic\n Deposits\n2009\n996.3\n140.3\n54.4\n1,191.0\n54.3\n0.0\n6.4\n230.3\n192.3\n129.4\n1,803.8\n1,191.0\n2010\n1,321.3\n424.5\n111.1\n1,856.9\n116.9\n0.0\n19.4\n275.3\n303.5\n137.4\n2,709.4\n1,856.9\n2011\n1,800.2\n673.4\n213.9\n2,687.5\n127.8\n0.0\n53.6\n411.6\n244.2\n304.9\n3,829.7\n2,687.5\n2012\n2,090.5\n922.3\n507.5\n3,520.4\n212.5\n0.0\n30.8\n618.5\n375.3\n222.5\n4,980.0\n3,520.4\n2013\n1,980.4\n813.6\n517.1\n3,311.1\n614.0\n0.0\n65.0\n730.9\n490.8\n184.0\n5,395.7\n3,311.1\n2014\n2,219.8\n1,015.2\n457.9\n3,692.9\n537.6\n0.0\n85.1\n560.7\n633.2\n430.0\n5,939.5\n3,692.9\n2015\nJan\n2,056.2\n996.2\n561.7\n3,614.0\n470.1\n0.0\n79.5\n728.5\n557.7\n234.3\n5,684.2\n3,614.0\nFeb\n2,079.6\n876.1\n611.6\n3,567.3\n426.6\n0.0\n75.6\n720.3\n564.8\n227.0\n5,581.5\n3,567.3\nMar\n2,139.3\n940.4\n513.3\n3,593.0\n461.1\n0.0\n101.9\n749.7\n527.3\n293.6\n5,726.6\n3,593.0\nApr\n2,098.7\n943.5\n629.8\n3,672.0\n448.9\n0.0\n103.4\n747.4\n527.1\n291.8\n5,790.7\n3,672.0\nMay\n2,131.8\n1,015.3\n615.3\n3,762.4\n574.7\n0.0\n82.4\n814.7\n525.7\n304.4\n6,064.3\n3,762.4\nJun\n2,213.2\n1,021.9\n593.5\n3,828.7\n560.2\n0.8\n103.1\n814.9\n498.4\n293.2\n6,099.4\n3,828.7\nJul\n2,166.4\n889.7\n732.5\n3,788.6\n478.9\n0.8\n88.2\n813.0\n504.1\n325.0\n5,998.5\n3,788.6\nAug\n2,266.7\n790.9\n723.1\n3,780.7\n490.7\n0.0\n83.4\n825.7\n535.2\n313.9\n6,029.6\n3,780.7\nSep\n2,276.7\n967.6\n648.7\n3,892.9\n504.0\n0.0\n72.0\n828.1\n599.2\n321.5\n6,217.7\n3,892.9\nOct\n2,259.9\n909.3\n667.8\n3,837.0\n494.3\n0.0\n122.2\n841.2\n599.3\n322.9\n6,217.0\n3,837.0\nNov\n2,475.9\n919.4\n580.1\n3,975.4\n347.6\n0.0\n126.0\n845.3\n603.6\n337.5\n6,235.5\n3,975.4\nDec\n2,512.2\n999.0\n543.0\n4,054.2\n320.4\n0.0\n140.4\n866.9\n582.0\n296.5\n6,260.4\n4,054.2\n2016\nJan\n2,562.6\n952.2\n558.7\n4,073.5\n313.2\n0.0\n135.6\n871.3\n582.8\n308.0\n6,284.4\n4,073.5\nFeb\n2,545.7\n959.3\n572.0\n4,077.1\n298.9\n0.0\n126.0\n878.1\n477.1\n301.0\n6,158.2\n4,077.1\nMar\n2,653.7\n893.4\n680.0\n4,227.1\n303.1\n0.0\n135.2\n886.6\n430.6\n288.2\n6,270.8\n4,227.1\nApr\n2,675.3\n1,008.1\n591.9\n4,275.3\n285.7\n0.0\n154.4\n893.9\n413.7\n295.5\n6,318.6\n4,275.3\nMay\n2,764.6\n1,100.0\n449.7\n4,314.3\n300.0\n0.0\n101.3\n908.9\n397.0\n291.2\n6,312.8\n4,314.3\nJune\n2,865.3\n907.1\n673.1\n4,445.5\n272.3\n0.0\n118.6\n915.7\n407.7\n279.5\n6,439.3\n4,445.5\nSource: Reserve Bank of Zimbabwe, 2016 \nTABLE 2.2: COMMERCIAL BANKS - LIABILITIES\nUS$ Millions\n \n \n \nS5 \n \n \nLiquid Assets\nLoans & \nContingent\nOther\nNon Financial \nTotal\nEnd of\nNotes\nTotal\nOther \nBalances\nAdvances\nAssets\nAssets\nAssets\nAssets \nBond \nCoins\n&\nBalances\nBalances \nBalances\nLiquid \nwith RBZ\nCoin\nwith\nwith Other \nat\nTrade\nTreasury\n Assets\nat Banks\nRBZ\nBanks\nForeign \nBanks\nBills\nBills\n2009\n0.0\n7.1\n5.9\n17.7\n9.9\n37.3\n0.0\n78.0\n5.6\n51.3\n17.0\n23.6\n46.0\n221.5\n2010\n0.0\n15.5\n10.4\n69.3\n31.7\n121.5\n0.0\n248.3\n17.3\n211.7\n62.3\n69.1\n42.1\n650.9\n2011\n0.0\n3.6\n8.3\n2.4\n0.7\n57.0\n0.0\n72.1\n5.0\n216.5\n83.1\n58.5\n28.9\n464.1\n2012\n0.0\n2.2\n1.0\n26.1\n1.4\n3.3\n0.4\n34.4\n0.0\n239.2\n37.2\n69.1\n22.3\n402.3\n2013\n0.0\n1.1\n0.5\n0.1\n0.4\n2.5\n0.0\n4.6\n0.0\n232.7\n35.5\n29.2\n40.5\n342.5\n2014\n0.0\n0.9\n0.4\n0.0\n0.1\n0.3\n0.0\n1.7\n0.0\n63.6\n0.1\n10.0\n24.6\n100.0\n2015\n Jan\n0.0\n0.6\n0.3\n0.0\n0.1\n1.6\n0.0\n2.0\n0.0\n70.2\n8.3\n19.0\n23.7\n123.8\n Feb\n0.0\n0.4\n0.2\n0.1\n0.1\n1.6\n0.0\n2.5\n0.0\n72.0\n8.3\n19.3\n23.6\n125.7\n Mar\n0.0\n0.4\n0.1\n0.0\n0.1\n1.5\n0.0\n2.1\n0.0\n73.3\n8.2\n18.5\n23.4\n125.5\n Apr\n0.0\n0.3\n0.1\n0.0\n0.1\n0.2\n0.0\n0.6\n0.0\n66.7\n0.0\n10.3\n21.3\n98.9\n May\n0.0\n0.4\n0.0\n0.0\n0.0\n0.2\n0.0\n0.6\n0.0\n67.9\n0.0\n9.6\n21.2\n99.3\n Jun\n0.0\n0.3\n0.0\n0.0\n0.0\n0.4\n0.0\n0.7\n0.0\n68.1\n0.0\n9.7\n21.1\n99.6\n Jul\n0.0\n0.2\n1.6\n0.0\n0.0\n0.2\n0.0\n2.0\n0.0\n67.8\n0.0\n9.2\n21.0\n100.0\n Aug\n0.0\n0.1\n1.8\n0.0\n0.0\n0.2\n0.0\n2.0\n0.0\n60.0\n0.0\n9.3\n28.1\n99.4\n Sep\n0.0\n0.1\n2.2\n0.0\n0.0\n0.2\n0.0\n2.5\n0.0\n59.2\n0.0\n9.2\n28.0\n98.9\n Oct\n0.0\n0.1\n2.1\n0.0\n0.0\n0.2\n0.0\n2.4\n0.0\n59.4\n0.0\n9.1\n27.8\n98.8\n Nov\n0.0\n0.1\n2.0\n0.0\n0.0\n0.2\n0.0\n2.4\n0.0\n58.5\n0.0\n9.5\n20.6\n91.0\n Dec\n0.0\n0.1\n1.6\n0.0\n0.0\n0.2\n0.0\n1.9\n0.0\n59.8\n0.0\n9.4\n20.5\n91.6\n2016\n Jan\n0.0\n0.1\n1.9\n0.0\n0.0\n0.2\n0.0\n2.2\n0.0\n60.7\n0.0\n9.3\n20.3\n92.5\n Feb\n0.0\n0.1\n0.9\n1.1\n0.0\n0.2\n0.0\n2.3\n0.0\n61.6\n0.0\n9.2\n20.2\n93.2\n Mar\n0.0\n0.1\n1.9\n0.0\n0.0\n0.2\n0.0\n2.3\n0.0\n62.0\n0.0\n9.3\n20.1\n93.6\n Apr\n0.0\n0.2\n0.7\n1.1\n0.0\n0.2\n0.0\n2.2\n0.0\n62.3\n0.0\n9.4\n19.9\n93.8\n May\n0.0\n0.1\n0.9\n1.2\n0.0\n0.2\n0.0\n2.4\n0.0\n62.7\n0.0\n9.3\n19.8\n94.2\n June\n0.0\n0.1\n0.9\n1.2\n0.0\n0.4\n0.0\n2.6\n0.0\n62.7\n0.0\n9.3\n19.8\n94.4\nSource:Reserve Bank of Zimbabwe, 2016 \nTABLE 2.3 : ACCEPTING HOUSES - ASSETS\nUS$ Millions\n \n \n \nS6 \n \nOf which\nDeposits\nAmounts \nOwing to\nCapital\nContingent\nOther\nTotal\nLiabilities to the \nand\nLiabilities\nLiabilities\nLiabilities \nPublic\nEnd of\nDemand\nSavings and \nShort-term\nLong-term\nTotal\nForeign \nLiabilities\nRBZ\nOther Banks\nReserves\n Deposits\n2009\n36.2\n75.4\n9.3\n120.9\n0.0\n0.0\n12.3\n58.8\n17.0\n12.4\n221.5\n120.9\n2010\n141.0\n257.4\n59.3\n457.8\n25.1\n0.0\n0.0\n79.6\n62.3\n26.1\n650.9\n457.8\n2011\n109.1\n75.4\n60.5\n245.0\n44.9\n0.0\n0.0\n22.5\n83.1\n68.6\n464.1\n245.0\n2012\n108.1\n67.9\n44.2\n220.2\n44.5\n0.0\n2.7\n-60.9\n37.2\n158.5\n402.3\n220.2\n2013\n134.5\n56.4\n6.9\n197.8\n48.9\n0.0\n1.2\n-127.6\n35.5\n186.7\n342.5\n197.8\n2014\n36.9\n31.2\n0\n68.1\n0\n0\n0\n-17.9\n0.1\n49.7\n100\n68.1\n2015\n Jan\n39.0\n40.9\n0.0\n80.0\n11.7\n0.0\n0.0\n-47.0\n8.3\n70.7\n123.8\n80.0\n Feb\n38.4\n40.4\n0.0\n78.7\n11.7\n0.0\n0.0\n-48.7\n8.3\n75.6\n125.7\n78.7\n Mar\n68.6\n12.1\n0.0\n80.7\n12.0\n0.0\n0.0\n-50.7\n8.2\n75.2\n125.5\n80.7\n Apr\n63.9\n0.0\n0.0\n63.9\n0.0\n0.0\n0.0\n-27.5\n0.0\n62.4\n98.9\n63.9\n May\n63.9\n0.0\n0.0\n63.9\n0.0\n0.0\n0.0\n-28.8\n0.0\n64.2\n99.3\n63.9\n Jun\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-28.9\n0.0\n65.6\n99.6\n62.9\n Jul\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-27.8\n0.0\n64.8\n100.0\n62.9\n Aug\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-14.9\n0.0\n51.3\n99.4\n62.9\n Sep\n62.2\n0.0\n0.0\n62.2\n0.0\n0.0\n0.0\n-15.3\n0.0\n52.0\n98.9\n62.2\n Oct\n61.9\n0.0\n0.0\n61.9\n0.0\n0.0\n0.0\n-16.4\n0.0\n53.2\n98.8\n61.9\n Nov\n58.8\n0.0\n0.0\n58.8\n0.0\n0.0\n0.0\n-20.2\n0.0\n52.5\n91.0\n58.8\n Dec\n58.5\n0.0\n0.0\n58.5\n0.0\n0.0\n0.0\n-20.1\n0.0\n53.2\n91.6\n58.5\n2016\n Jan\n58.5\n0.0\n0.0\n58.5\n0.0\n0.0\n0.0\n-18.8\n0.0\n52.9\n92.5\n58.5\n Feb\n58.3\n0.0\n0.0\n58.3\n0.0\n0.0\n0.0\n-19.4\n0.0\n54.3\n93.2\n58.3\n Mar\n58.3\n0.0\n0.0\n58.3\n0.0\n0.0\n0.0\n-20.1\n0.0\n55.3\n93.6\n58.3\n Apr\n58.3\n0.0\n0.0\n58.3\n0.0\n0.0\n0.0\n-19.5\n0.0\n55.0\n93.8\n58.3\n May\n58.4\n0.0\n0.0\n58.4\n0.0\n0.0\n0.0\n-20.2\n0.0\n56.0\n94.2\n58.4\n June\n58.4\n0.0\n0.0\n58.4\n0.0\n0.0\n0.0\n-20.2\n0.0\n56.0\n94.2\n58.4\nSource:Reserve Bank of Zimbabwe, 2016 \nTABLE 2.4: ACCEPTING HOUSES - LIABILITIES\nUS$ Millions\n \n \n \nLiquid \nAssets\nNotes \nBalances \nTrade\nTreasury\nTotal\nMortgage\nOther\nOther\nNon Financial \nTotal\nEnd of\nBond Coins\n&\nwith Other \nBills\nBills\nLiquid \nAdvances\nAdvances\nAssets\nAssets\n Assets\nCoin\nBanks\n Assets\nat Banks\n2010\n0.0\n11.8\n0.0\n73.3\n0.0\n85.1\n65.0\n24.0\n8.7\n97.3\n 280.11 \n2011\n0.0\n17.1\n0.0\n76.7\n0.0\n93.8\n199.5\n83.4\n19.0\n109.4\n 505.10 \n2012\n0.0\n29.2\n0.0\n133.2\n163.4\n0.0\n278.1\n118.3\n30.2\n126.9\n 716.91 \n2013\n0.0\n34.8\n158.8\n0.0\n40.0\n233.6\n381.5\n127.7\n55.2\n123.0\n 920.90 \n2014\n0.1\n47.1\n211.2\n0.0\n52.6\n310.9\n512.9\n169.0\n102.9\n125.3\n 1,221.00 \n2015\nJan\n0.1\n37.3\n196.0\n0.1\n51.8\n269.8\n511.6\n172.1\n143.2\n126.1\n 1,222.64 \nFeb\n0.1\n32.1\n244.4\n0.1\n51.9\n296.5\n522.9\n176.2\n138.9\n125.8\n 1,260.24 \nMar\n0.1\n52.4\n214.4\n0.1\n52.0\n266.6\n508.7\n180.0\n174.8\n125.5\n 1,255.51 \nApr\n0.1\n32.5\n243.2\n0.0\n60.4\n336.3\n520.2\n182.5\n118.3\n124.8\n 1,282.04 \nMay\n0.1\n33.6\n257.7\n0.0\n60.1\n351.5\n448.7\n235.1\n137.5\n125.2\n 1,297.97 \nJun\n0.2\n59.6\n204.9\n0.0\n60.1\n324.8\n464.9\n231.9\n139.4\n122.0\n 1,283.00 \nJul\n0.2\n51.6\n205.5\n0.1\n62.9\n320.2\n461.5\n230.6\n133.9\n121.9\n 1,268.20 \nAug\n0.1\n53.0\n158.9\n0.1\n76.2\n288.4\n482.9\n228.4\n136.0\n122.2\n 1,257.94 \nSep\n0.1\n55.4\n161.7\n0.1\n76.0\n293.3\n480.4\n235.9\n124.6\n122.1\n 1,256.35 \nOct\n0.1\n45.2\n229.1\n0.1\n76.0\n350.5\n494.0\n265.1\n126.0\n122.8\n 1,358.35 \nNov\n0.1\n43.6\n256.8\n0.1\n76.1\n376.7\n292.0\n479.3\n131.8\n121.1\n 1,400.90 \nDec\n0.1\n27.3\n284.0\n0.0\n76.6\n387.9\n317.4\n470.4\n114.7\n118.4\n 1,408.85 \n2016\nJan\n0.1\n17.4\n227.8\n0.0\n76.6\n331.9\n326.9\n415.3\n145.6\n119.7\n 1,339.40 \nFeb\n0.2\n13.9\n253.5\n0.0\n65.6\n333.2\n324.4\n420.2\n148.4\n119.6\n 1,345.82 \nMar\n0.2\n20.8\n266.6\n0.0\n48.3\n335.9\n339.6\n399.4\n142.9\n119.4\n 1,337.22 \nApr\n0.2\n9.5\n213.7\n0.0\n90.9\n314.2\n332.5\n402.2\n143.6\n119.2\n 1,311.79 \nMay\n0.1\n7.1\n220.3\n0.0\n93.3\n320.8\n404.6\n341.0\n149.9\n122.9\n 1,339.24 \nJun\n0.2\n8.0\n278.0\n0.0\n104.0\n390.0\n348.0\n389.4\n146.0\n119.3\n 1,392.30 \nSource:Reserve Bank of Zimbabwe, 2016 \nTABLE 2.5: BUILDING SOCIETIES- ASSETS\nUS$ Millions\nOf which\nDeposits\nCapital\nOther\nTotal\nLiabilities to \nthe \nand\nLiabilities\n Liabilities\nPublic\nEnd of\nSavings and \nShort-term\nLong-term\nTotal\nReserves\n Deposits\n2010\n92.3\n52.5\n144.9\n101.9\n33.4\n 280.1 \n144.9\n2011\n186.4\n100.7\n287.1\n121.3\n96.7\n 505.1 \n287.0\n2012\n255.8\n184.6\n440.3\n177.8\n28.1\n 716.9 \n440.3\n2013\n370.3\n197.3\n567.6\n219.6\n133.9\n 921.0 \n567.6\n2014\n400.9\n387.5\n788.4\n262.7\n27.6\n 1,234.9 \n788.4\n2015\nJan\n373.0\n397.1\n770.2\n267.8\n31.0\n 1,222.6 \n770.2\nFeb\n405.8\n400.3\n806.2\n272.9\n29.2\n 1,260.2 \n806.2\nMar\n408.1\n386.3\n794.4\n275.8\n25.8\n 1,255.5 \n794.4\nApr\n464.1\n364.8\n828.9\n276.8\n28.7\n 1,282.0 \n828.9\nMay\n472.0\n391.6\n863.6\n270.7\n27.8\n 1,298.0 \n863.6\nJun\n492.9\n343.9\n836.8\n272.9\n31.1\n 1,283.0 \n836.8\nJul\n458.3\n370.6\n828.9\n277.4\n27.5\n 1,268.2 \n828.9\nAug\n438.4\n386.1\n824.5\n282.7\n29.9\n 1,257.9 \n824.5\nSep\n498.9\n334.3\n833.2\n288.4\n35.0\n 1,285.0 \n833.2\nOct\n465.3\n428.4\n893.7\n293.6\n29.7\n 1,358.4 \n893.7\nNov\n446.1\n474.4\n920.4\n297.7\n36.0\n 1,400.9 \n920.4\nDec\n480.5\n463.9\n944.4\n293.3\n28.8\n 1,408.8 \n944.4\n2016\nJan\n447.7\n443.1\n890.7\n298.3\n32.3\n 1,339.4 \n890.7\nFeb\n446.8\n441.8\n888.6\n301.9\n31.5\n 1,345.8 \n888.6\nMar\n433.3\n449.5\n882.8\n289.7\n46.0\n 1,337.2 \n882.8\nApr\n455.3\n403.8\n859.2\n320.7\n45.5\n 1,339.2 \n859.2\nMay\n455.3\n403.8\n859.2\n320.7\n45.5\n 1,339.2 \n859.2\nJun\n463.4\n443.7\n907.0\n319.0\n46.3\n 1,392.3 \n907.0\nSource:Reserve Bank of Zimbabwe, 2016 \nTABLE 2.6 : BUILDING SOCIETIES - LIABILITIES\nUS$ Millions \n \n \n \nS9 \n \n \nEnd of\nBond \nCoins\nRBZ \nDemand \nDeposits\nComm. \nBanks Dem. \nDeposits\nMerchant \nBanks \nDem. \nDeposits\nM1\nComm. \nBanks \nSavings \nDeposits\nBuilding \nSoc. \nSavings \nDeposits\nP O S B \nSavings \nDeposits\nComm. \nBanks U-30 \nDay \nDeposits\nMerchant \nBanks U-30 \nDay Deposits\nBuilding \nSoc. U- 30 \nDay \nDeposits\nM2\nComm. \nBanks O-30 \nDay \nDeposits\nMerchant \nBanks O-\n30 Day \nDeposits\nBuilding \nSoc. O- 30 \nDay \nDeposits\nBuilding \nSoc. Class \nC \nDeposits\nBuilding \nSoc. \nOther \nShare \nDeposits\nP O S B \nTime \nDeposits\nM3\n2009\n0.0\n185.2\n996,286.9\n36,033.8 1,032,505.9\n94,905.0\n32,364.7\n13,702.2\n45,361.6\n73,354.2\n2,894.1\n1,295,087.7\n54,412.4\n9,250.1\n9,776.3\n1,500.0\n6,332.8\n4,887.9\n1,381,247.2\n2010\n0.0\n186.8\n1,230,648.3\n141,200.0 1,372,035.1\n194,400.4\n65,394.5\n28,600.5\n197,255.1\n241,039.3\n26,946.3\n2,125,671.0\n77,607.4\n53,073.5\n52,544.3\n0.0\n10,141.6\n8,570.5\n2,327,608.3\n2011\n0.0\n80.5\n1,738,095.6\n106,850.7 1,845,026.8\n150,648.2\n123,501.5\n44,220.9\n505,981.7\n65,287.0\n62,893.7\n2,797,559.8\n131,736.8\n52,440.1\n100,654.2\n0.0\n10,141.6\n7,869.0\n3,100,401.5\n2012\n0.0\n80.8\n1,981,218.7\n108,094.7 2,089,394.2\n253,471.9\n180,152.6\n54,893.7\n613,008.0\n67,930.5\n65,572.4\n3,324,423.3\n314,380.7\n44,191.4\n184,561.2\n0.0\n10,141.6\n8,973.9\n3,886,672.1\n2013\n0.0\n71.9\n1,825,413.5\n134,494.8 1,959,980.2\n281,785.8\n204,200.7\n62,044.0\n489,493.1\n56,379.8\n155,932.2\n3,209,815.8\n496,391.7\n6,900.3\n197,343.9\n0.0\n11,266.6\n10,606.9 3,932,325.2\n2014\n0.0\n144.5\n2,121,401.6\n36,942.7 2,158,488.8\n267,179.5\n236,423.8\n69,601.1\n654,559.9\n31,176.0\n144,211.5\n3,561,640.5\n449,703.8\n0.0\n365,334.8\n0.0\n11,266.6\n15,174.4 4,403,120.1\n2015\n Jan\n567.1\n714.7\n1,967,789.9\n39,049.7\n2,008,121.3\n282,832.4\n233,498.2\n70,144.8\n638,395.6\n40,928.2\n127,399.4\n3,401,319.9\n544,421.5\n0.0\n366,978.6\n0.0\n11,266.6\n16,138.8 4,340,125.3\nFeb\n1096.7\n898.5\n1,978,595.1\n38,382.5\n2,018,972.8\n240,444.7\n238,848.9\n72,839.1\n574,946.1\n40,362.2\n149,834.6\n3,336,248.4\n597,685.2\n0.0\n375,166.9\n0.0\n11,266.6\n17,519.8 4,337,886.9\nMar\n1294.0\n545.0\n2,051,081.7\n68,611.1\n2,121,531.8\n230,198.0\n244,746.0\n75,993.4\n645,401.5\n12,132.4\n152,280.6\n3,482,283.7\n503,769.1\n0.0\n355,362.1\n0.0\n11,266.6\n17,638.5 4,370,320.0\nApr\n1749.3\n491.6\n1,990,235.2\n63,935.0\n2,056,411.0\n267,921.4\n256,526.3\n74,678.1\n607,334.3\n0.0\n189,428.7\n3,452,299.9\n618,804.9\n0.0\n340,739.4\n0.0\n11,266.6\n15,733.8 4,438,844.6\nMay\n2316.7\n340.2\n2,017,918.3\n63,899.2\n2,084,474.4\n275,167.8\n280,947.9\n71,195.6\n670,242.5\n0.0\n175,953.7\n3,557,981.9\n536,216.7\n0.0\n364,490.5\n0.0\n11,266.6\n18,011.8 4,487,967.5\nJun\n2684.1\n4,035.0\n2,112,470.2\n62,949.9\n2,182,139.2\n248,074.6\n279,625.3\n73,397.6\n707,686.1\n0.0\n188,805.2\n3,679,728.0\n509,642.0\n0.0\n326,111.5\n0.0\n11,266.6\n17,261.6 4,544,009.7\nJul\n2719.3\n3,889.6\n2,023,527.6\n62,949.9\n2,093,086.3\n239,113.1\n275,914.5\n68,785.7\n587,421.2\n0.0\n171,250.8\n3,435,571.5\n651,895.8\n0.0\n351,579.9\n0.0\n11,266.6\n23,646.5 4,473,960.3\nAug\n3016.3\n3,480.3\n2,168,409.0\n62,949.9\n2,237,855.5\n227,534.6\n277,271.4\n71,554.2\n505,981.9\n0.0\n156,077.5\n3,476,274.9\n622,991.6\n0.0\n340,974.7\n0.0\n11,266.6\n21,540.3 4,473,048.2\nSep\n3425.5\n3,478.9\n2,166,471.3\n62,157.8\n2,235,533.5\n230,176.6\n230,176.6\n77,161.5\n613,287.8\n0.0\n190,548.2\n3,635,952.6\n611,608.0\n0.0\n303,177.5\n0.0\n11,266.6\n24,019.0 4,586,023.7\nOct\n4,445.3\n3,485.7\n2,149,026.8\n61,925.6\n2,218,883.4\n231,465.3\n294,208.3\n73,380.5\n565,136.6\n0.0\n144,911.8\n3,527,985.9\n628,213.7\n0.0\n409,350.0\n0.0\n11,266.6\n24,010.2 4,600,826.4\nNov\n5,789.3\n2,470.9\n2,358,226.5\n58,750.3\n2,425,237.0\n259,856.4\n308,439.9\n76,307.7\n565,317.5\n0.0\n127,578.2\n3,762,736.7\n503,244.7\n0.0\n444,267.1\n0.0\n11,266.6\n23,668.6 4,745,183.7\nDec\n7,127.0\n726.0\n2,362,538.7\n58,524.4\n2,428,916.0\n266,166.6\n296,041.8\n72,505.8\n650,234.3\n0.0\n165,352.5\n3,879,217.1\n420,265.1\n0.0\n432,822.3\n0.0\n11,266.6\n21,851.3 4,765,422.3\n2016\nJan\n7355.5\n1,832.8\n2,430,098.0\n58,511.7\n2,497,798.0\n280,598.5\n297,854.8\n73,735.7\n597,527.6\n0.0\n131,683.2\n3,879,197.9\n424,676.9\n0.0\n413,975.8\n0.0\n11,266.6\n25,326.6 4,754,443.8\nFeb\n7457.3\n2,086.4\n2,409,398.2\n58,304.5\n2,477,246.4\n291,567.7\n305,980.4\n73,847.9\n588,796.4\n0.0\n123,683.2\n3,861,122.0\n449,879.1\n0.0\n421,729.2\n11,266.6\n11,266.6\n24,881.2 4,768,878.1\nMar\n7612.1\n1,423.3\n2,510,951.1\n58,315.0\n2,578,301.4\n290,006.1\n311,092.0\n74,405.9\n506,719.1\n0.0\n108,106.2\n3,868,630.7\n573,809.8\n0.0\n438,461.8\n11,266.6\n11,266.6\n24,640.9 4,916,809.8\nApr\n7758.5\n5,061.6\n2,575,573.8\n58,346.2\n2,646,740.1\n299,136.9\n317,629.3\n80,067.6\n574,185.2\n0.0\n171,635.9\n4,089,395.1\n519,330.5\n0.0\n361,565.5\n0.0\n11,266.6\n23,321.3 5,004,879.1\nMay\n8005.8\n3,602.5\n2,644,003.9\n58,364.1\n2,713,976.2\n282,597.7\n332,211.2\n79,203.4\n674,068.8\n0.0\n118,100.1\n4,200,157.3\n438,306.5\n0.0\n374,720.6\n0.0\n11,266.6\n26,430.9 5,050,881.9\nJun\n8106.8\n3,701.2\n2,743,164.8\n58,364.1\n2,813,336.8\n270,213.2\n313,154.7\n79,502.7\n546,356.7\n0.0\n134,140.9\n4,156,705.0\n554,032.6\n0.0\n390,530.0\n0.0\n11,266.6\n28,174.9 5,140,709.1\nSource:Reserve Bank of Zimbabwe, 2016 \nNote:\nRBZ - Reserve Bank of Zimbabwe\nDMBs - Deposit Money Banks (Commercial Banks and Merchant Banks)\nOBIs - Other Banking institutions (Building Sicieties)\nTABLE 3.1: MONETARY AGGREGATES\nUS$ Thousands\n \n \n \nS10 \n \n \n \n \nUS$ Thousands\nEnd of\nNET FOREIGN \nASSETS \nTotal Foreign \nAssets\nLiabilities \\2\nNET \nDOMESTIC \nASSETS \nDOMESTIC \nCREDIT\nClaims on \nGovernment \n(net) \nRBZ\nDMBs\nOBIs\nClaims on \nPublic \nEnterprises \nClaims on \nPrivate \nSector\nRBZ\nDMBs\nOBIs\nOTHER \nITEMS \n(NET) \nBROAD \nMONEY \n(M3) \n2009\n-278,784.49\n1,072,911.46\n \n-1,351,696.0\n1,660,033.9\n723,950.3\n-1,857.6\n-1,857.6\n0.0\n0.0\n25,498.0\n700,309.9\n16,553.5\n636,385.6\n47,370.8\n936,083.6\n1,381,249.4\n2010\n-140,293.98\n1,174,644.56\n \n-1,314,938.5\n2,467,902.3\n1,694,451.8\n-5,656.9\n-4,729.2\n0.2\n-927.9\n22,907.5\n1,677,201.2\n12,925.5\n1,539,154.5\n125,121.2\n773,450.5\n2,327,608.3\n2011\n-296,486.94\n1,055,987.41\n \n-1,352,474.4\n3,396,888.3\n2,798,126.8\n-1,834.8\n-1,834.8\n0.0\n0.0\n44,924.5\n2,755,037.2\n44,539.3\n2,377,457.1\n333,040.7\n598,761.5\n3,100,401.4\n2012\n-435,528.84\n1,089,808.49\n \n-1,525,337.3\n4,322,201.0\n3,788,468.5\n176,058.4\n-11,097.8\n185,922.5\n1,233.6\n51,716.9\n3,560,693.2\n40,636.3\n3,065,153.8\n454,903.2\n533,732.4\n3,886,672.1\n2013\n-810,172.35\n1,042,165.96\n \n-1,852,338.3\n4,742,497.4\n4,068,697.5\n357,997.4\n-1,182.3\n319,016.2\n40,163.5\n60,645.0\n3,650,055.2\n35,116.1\n3,053,645.3\n561,293.9\n673,799.9\n3,932,325.1\n2014\n-1,750,112.68\n(132,686.92)\n \n-1,617,425.8\n5,130,451.6\n4,378,654.6\n515,636.4\n-25,063.7\n487,962.9\n52,737.2\n66,750.2\n3,796,268.1\n34,726.3\n3,010,101.6\n751,440.3\n751,796.9\n4,403,120.1\n2015\nJan\n-714,190.62\n830,959.41\n \n-1,545,150.0\n5,054,316.0\n4,231,495.4\n544,026.1\n-12,594.0\n504,696.7\n51,923.4\n64,967.7\n3,622,501.6\n34,725.3\n2,835,002.6\n752,773.8\n822,820.5\n4,340,125.3\nFeb\n-763,306.53\n737,833.47\n \n-1,501,140.0\n5,101,193.5\n4,249,052.3\n549,179.2\n-12,908.0\n510,080.3\n52,007.0\n68,944.3\n3,630,928.8\n34,725.3\n2,824,415.9\n771,787.7\n852,141.2\n4,337,887.0\nMar\n-565,959.32\n816,079.57\n \n-1,382,038.9\n4,936,279.4\n4,371,027.6\n537,675.3\n-22,274.1\n500,344.5\n59,604.9\n71,543.2\n3,761,809.1\n31,409.0\n2,960,892.4\n769,507.7\n565,251.8\n4,370,320.1\nApr\n-636,028.06\n755,493.40\n \n-1,391,521.5\n5,074,872.7\n4,529,777.2\n665,258.8\n98,377.6\n498,836.6\n68,044.6\n102,474.3\n3,762,044.1\n31,558.0\n2,948,993.7\n781,492.4\n545,095.4\n4,438,844.6\nMay\n-681,066.49\n811,200.44\n \n-1,492,266.9\n5,169,034.0\n4,817,875.2\n950,594.0\n97,847.8\n784,428.5\n68,317.8\n104,306.3\n3,762,974.9\n31,155.6\n2,960,917.8\n770,901.6\n351,158.7\n4,487,967.5\nJun\n-775,512.62\n926,353.71\n \n-1,701,866.3\n5,319,522.4\n4,869,072.4\n1,074,237.6\n91,807.5\n904,112.3\n78,317.8\n53,148.2\n3,741,686.6\n51,689.8\n2,900,630.1\n789,366.8\n450,450.0\n4,544,009.7\nJul\n-723,772.77\n843,689.23\n \n-1,567,462.0\n5,197,733.1\n4,981,511.5\n1,160,044.8\n243,082.9\n845,865.3\n71,096.6\n48,641.8\n3,772,824.9\n66,722.4\n2,910,157.5\n795,945.0\n216,221.6\n4,473,960.3\nAug\n-727,785.66\n867,447.06\n \n-1,595,232.7\n5,200,833.8\n5,029,107.1\n1,192,006.7\n244,517.6\n860,228.9\n87,260.2\n56,508.0\n3,780,592.5\n92,768.9\n2,875,477.3\n812,346.3\n171,726.7\n4,473,048.2\nSep\n-715,689.39\n889,018.56\n \n-1,604,707.9\n5,301,713.1\n5,079,842.4\n1,182,354.0\n254,297.8\n838,982.9\n89,073.3\n54,523.7\n3,842,964.7\n67,359.3\n2,956,930.6\n818,674.8\n221,870.7\n4,586,023.7\nOct\n-822,417.21\n784,372.60\n \n-1,606,789.8\n5,423,243.6\n5,196,662.7\n1,253,218.7\n271,997.2\n890,154.0\n91,067.5\n84,877.1\n3,858,567.0\n75,959.6\n2,950,844.9\n831,762.5\n226,580.9\n4,600,826.4\nNov\n-771,547.97\n667,350.67\n \n-1,438,898.6\n5,516,731.6\n5,345,272.0\n1,359,827.4\n314,096.4\n954,556.6\n91,174.4\n83,806.0\n3,901,638.6\n77,442.5\n2,981,759.1\n842,437.0\n171,459.6\n4,745,183.7\nDec\n-683,664.57\n796,212.39\n \n-1,479,877.0\n5,449,086.9\n5,560,695.5\n1,590,109.9\n357,307.3\n1,119,720.1\n113,082.5\n134,914.6\n3,835,671.0\n96,088.9\n2,874,287.6\n865,294.5\n-111,608.6\n4,765,422.3\n2016\nJan\n-688,591.44\n758,634.57\n \n-1,447,226.0\n5,443,035.2\n5,476,442.4\n1,530,792.2\n355,230.5\n1,068,095.4\n107,466.4\n145,507.6\n3,800,142.6\n93,049.5\n2,860,825.0\n846,268.2\n-33,407.2\n4,754,443.8\nFeb\n-780,139.70\n679,001.86\n \n-1,459,141.6\n5,549,017.8\n5,489,962.3\n1,671,934.4\n418,006.5\n1,153,295.1\n100,632.7\n120,445.0\n3,697,582.8\n74,614.5\n2,773,512.1\n849,456.3\n59,055.5\n4,768,878.1\nMar\n-728,823.68\n687,149.82\n \n-1,415,973.5\n5,645,633.4\n5,542,678.3\n1,691,128.7\n446,003.9\n1,166,120.4\n79,004.4\n179,370.7\n3,672,178.9\n56,342.7\n2,774,147.9\n841,688.3\n102,955.1\n4,916,809.8\nApr\n-803,151.98\n637,447.51\n \n-1,440,599.5\n5,808,031.0\n5,623,621.7\n1,804,057.3\n456,287.0\n1,226,195.8\n121,574.4\n185,698.9\n3,633,865.5\n58,614.2\n2,736,322.0\n838,929.3\n184,409.4\n5,004,879.1\nMay\n-897,595.53\n623,538.08\n \n-1,521,133.6\n5,948,477.4\n5,627,841.4\n1,834,775.4\n468,433.1\n1,241,961.8\n124,380.4\n197,207.6\n3,595,858.4\n58,864.7\n2,691,318.7\n845,675.0\n320,636.1\n5,050,881.9\nJun\n-682,717.98\n667,173.21\n \n-1,349,891.2\n5,823,427.1\n5,719,589.2\n1,948,003.0\n508,837.0\n1,305,509.6\n133,656.4\n199,989.6\n3,571,596.6\n49,967.1\n2,681,469.9\n840,159.6\n103,837.9\n5,140,709.1\nSource:Reserve Bank of Zimbabwe, 2016 \nNote:\nRBZ - Reserve Bank of Zimbabwe\nDMBs - Deposit Money Banks (Commercial Banks and Merchant Banks)\nOBIs - Other Banking institutions (Building Sicieties)\nTABLE 3.2: BROAD MONEY SURVEY\n \n \n \nS11 \n \n \n \n \nTABLE 3.3: ANALYSIS OF MONTHLY CHANGES IN MONEY SUPPLY\nUS$ Thousands\nEnd of \nNET \nFOREIGN \nASSETS \n Total \nForeign \nAssets\n Liabilities \nNET \nDOMESTIC \nASSETS \nDOMESTIC \nCREDIT\n Claims on \nGovernment \n(net) \nRBZ\nDMBs\n \nOBIs\n Claims on \nPublic \nEnterprises \n Claims on \nPrivate \nSector\nRBZ\nDMBs\nOBIs\nOTHER \nITEMS \n(NET) \nBROAD \nMONEY \n(M3) \n \nBroad \nMoney \n(M3) \n \nDomestic \nCredit \n \nClaims \non \nPrivate \nSector\n2009\n26,314.88\n-517.75\n26,832.6\n144,736.2\n96,198.3\n-435.2\n-435.2\n0.0\n0.0\n2,769.7\n93,863.8\n-7,572.3\n88,829.1\n12,607.0\n48,537.8\n171,051.0\n14.1%\n15.3%\n15.5%\n2010\n116,717.58\n179,819.36\n-63,101.8\n-85,407.8\n130,555.6\n-523.1\n-815.6\n300.1\n-7.6\n1,201.0\n129,877.7\n-945.2\n119,963.6\n10,859.3\n-215,963.3\n31,309.8\n1.4%\n8.3%\n8.4%\n2011\n24,582.01\n29,394.75\n-4,812.7\n-12,756.7\n50,334.2\n-207.2\n-207.2\n0.0\n0.0\n2,887.1\n47,654.3\n-957.7\n35,712.8\n12,899.2\n-63,090.9\n11,825.3\n0.4%\n1.8%\n1.8%\n2012\n-94,629.12\n26,397.46\n-121,026.6\n156,644.5\n167,516.4\n95,348.0\n-63.0\n95,410.9\n0.0\n252.4\n71,916.0\n-885.3\n68,894.3\n3,906.9\n-10,871.9\n62,015.4\n1.6%\n4.6%\n2.1%\n2013\n191,626.53\n185,511.04\n6,115.5\n-66,411.8\n-22,612.8\n26,199.6\n5.8\n26,263.8\n-70.1\n-199.9\n-48,612.5\n0.0\n-52,550.5\n3,938.0\n-43,799.0\n125,214.7\n3.3%\n-0.6%\n-1.3%\n2014\n40,492.90\n62,580.06\n \n-22,087.1\n-52,838.5\n25,722.4\n53,210.7\n-11,032.2\n44,484.8\n19,758.1\n89.2\n-27,577.5\n1.0\n-26,693.6\n-884.9\n-78,560.9\n-12,345.5\n-0.3%\n0.6%\n-0.7%\n2015\nJan\n5,210.76\n-65,220.31\n70,431.1\n-68,504.1\n-147,158.2\n28,389.7\n12,469.7\n16,733.8\n-813.8\n-1,782.4\n-173,765.5\n0.0\n-175,099.0\n1,333.5\n78,654.1\n-63,293.4\n-1.4%\n-3.4%\n-4.6%\nFeb\n-49,115.91\n-93,125.93\n44,010.0\n46,877.5\n17,556.9\n5,153.1\n-314.0\n5,383.6\n83.5\n3,976.6\n8,427.2\n0.0\n-10,586.7\n19,013.9\n29,320.6\n-2,238.4\n-0.1%\n0.4%\n0.2%\nMar\n197,347.21\n78,246.10\n \n119,101.1\n-164,914.1\n121,975.3\n-11,503.9\n-9,366.0\n-9,735.8\n7,597.9\n2,598.9\n130,880.3\n-3,316.3\n136,476.5\n-2,280.0\n-286,889.4\n32,433.1\n0.7%\n2.9%\n3.6%\nApr\n-70,068.75\n-60,586.18\n-9,482.6\n138,593.3\n158,749.6\n127,583.5\n120,651.7\n-1,507.9\n8,439.7\n30,931.2\n234.9\n149.0\n-11,898.7\n11,984.7\n-20,156.4\n68,524.5\n1.6%\n3.6%\n0.0%\nMay\n-45,038.42\n55,707.04\n \n-100,745.5\n94,161.3\n288,098.0\n285,335.2\n-529.8\n285,591.8\n273.1\n1,832.0\n930.9\n-402.4\n11,924.1\n-10,590.8\n-193,936.7\n49,122.9\n1.1%\n6.4%\n0.0%\nJun\n-94,446.14\n115,153.27\n \n-209,599.4\n150,488.4\n51,197.2\n123,643.6\n-6,040.3\n119,683.9\n10,000.0\n-51,158.1\n-21,288.3\n20,534.2\n-60,287.7\n18,465.2\n99,291.2\n56,042.3\n1.2%\n1.1%\n-0.6%\nJul\n51,739.85\n-82,664.47\n134,404.3\n-121,789.3\n112,439.1\n85,807.2\n151,275.4\n-58,247.0\n-7,221.2\n-4,506.4\n31,138.3\n15,032.7\n9,527.4\n6,578.2\n-234,228.4\n-70,049.4\n-1.5%\n2.3%\n0.8%\nAug\n-4,012.89\n23,757.82\n \n-27,770.7\n3,100.7\n47,595.6\n31,961.9\n1,434.7\n14,363.6\n16,163.6\n7,866.2\n7,767.5\n26,046.5\n-34,680.2\n16,401.3\n-44,494.9\n-912.2\n0.0%\n1.0%\n0.2%\nSep\n12,096.27\n21,571.50\n \n-9,475.2\n100,879.2\n50,735.3\n-9,652.6\n9,780.2\n-21,245.9\n1,813.1\n-1,984.3\n62,372.2\n-25,409.6\n81,453.3\n6,328.5\n50,144.0\n112,975.5\n2.5%\n1.0%\n1.6%\nOct\n-106,727.83\n-104,645.96\n-2,081.9\n121,530.5\n116,820.4\n70,864.7\n17,699.4\n51,171.1\n1,994.2\n30,353.4\n15,602.3\n8,600.4\n-6,085.7\n13,087.7\n4,710.2\n14,802.7\n0.3%\n2.3%\n0.4%\nNov\n50,869.25\n-117,021.94\n167,891.2\n93,488.0\n148,609.3\n106,608.7\n42,099.2\n64,402.6\n106.9\n-1,071.0\n43,071.6\n1,482.9\n30,914.2\n10,674.5\n-55,121.3\n144,357.2\n3.1%\n2.9%\n1.1%\nDec\n87,883.40\n128,861.72\n \n-40,978.3\n-67,644.7\n215,423.5\n230,282.5\n43,210.9\n165,163.5\n21,908.1\n51,108.6\n-65,967.5\n18,646.4\n-107,471.5\n22,857.6\n-283,068.2\n20,238.7\n0.4%\n4.0%\n-1.7%\n2016\nJan\n-20,906.51\n(34,042.69)\n \n13,136.2\n9,928.0\n-58,954.0\n-33,562.5\n23,678.3\n-51,624.8\n-5,616.0\n4,597.4\n-29,989.0\n2,500.0\n-13,462.6\n-19,026.4\n68,882.0\n-10,978.5\n-0.2%\n-1.1%\n-0.8%\nFeb\n-91,548.26\n(79,632.71)\n \n-11,915.5\n105,982.5\n13,519.9\n141,142.2\n62,776.1\n85,199.8\n-6,833.7\n-25,062.5\n-102,559.8\n-18,435.0\n-87,312.9\n3,188.1\n92,462.7\n14,434.3\n0.3%\n0.2%\n-2.7%\nMar\n51,316.02\n8,147.96\n \n43,168.1\n96,615.7\n52,716.0\n19,194.3\n27,997.4\n12,825.3\n-21,628.3\n58,925.6\n-25,403.9\n-18,271.7\n635.8\n-7,768.0\n43,899.6\n147,931.7\n3.1%\n1.0%\n-0.7%\nApr\n-74,328.30\n(49,702.30)\n \n-24,626.0\n162,397.6\n80,943.4\n112,928.5\n10,283.1\n60,075.4\n42,570.0\n6,328.3\n-38,313.4\n2,271.5\n-37,825.9\n-2,759.0\n81,454.2\n88,069.3\n1.8%\n1.5%\n-1.0%\nMay\n67,954.04\n(13,909.43)\n \n-80,534.1\n140,446.4\n4,219.7\n30,718.1\n12,146.1\n15,766.0\n2,806.0\n11,508.7\n-38,007.1\n250.4\n-45,003.2\n6,745.7\n136,226.7\n46,002.9\n0.9%\n0.1%\n-1.0%\nJun\n214,877.55\n43,635.12\n \n171,242.4\n-125,050.3\n91,747.9\n113,227.7\n40,403.9\n63,547.8\n9,276.0\n2,782.0\n-24,261.7\n-8,897.6\n-9,848.8\n-5,515.3\n-216,798.2\n89,827.2\n1.8%\n1.6%\n-0.7%\nSource:Reserve Bank of Zimbabwe, 2016 \nNote:\nRBZ - Reserve Bank of Zimbabwe\nDMBs - Deposit Money Banks (Commercial Banks and Merchant Banks)\nOBIs - Other Banking institutions (Building Sicieties)\n \n \n \nS12 \n \n \n \n \n \n \nEnd of \nNET \nFOREIGN \nASSETS \n Total \nForeign \nAssets\nLiabilities \nRBZ\n \nDMBs\n \nOBIs\nNET \nDOMESTIC \nASSETS \nDOMESTIC \nCREDIT\n Claims on \nGovernment \n(net) \nRBZ\nDMBs\n \nOBIs\n Claims on \nPublic \nEnterprises \n Claims on \nPrivate \nSector\n \nRBZ\n \nDMBs\n \nOBIs\nOTHER \nITEMS \n(NET) \nBROAD \nMONEY (M3) \n \nBroad \nMoney \n(M3) \n \nDomestic \nCredit \n \nClaims \non \nPrivate \nSector\n2010\n138,490.5\n101,733.1\n36,757.4\n-141,632.9\n104,900.3\n-24.8\n807,868.4\n970,501.5\n-3,799.3\n-2,871.6\n0.2\n-927.9\n-2,590.5\n976,891.3\n-3,628.0\n902,768.9\n77,750.4\n-162,633.2\n946,358.9\n68.5%\n134.1%\n139.5%\n2011\n-156,193.0\n-118,657.1\n-37,535.8\n-1,363.1\n13,206.8\n25,692.2\n928,986.1\n1,103,675.0\n3,822.1\n2,894.4\n-0.2\n927.9\n22,016.9\n1,077,836.0\n31,613.8\n838,302.6\n207,919.6\n-174,689.0\n772,793.1\n33.2%\n65.1%\n64.3%\n2012\n-139,041.9\n33,821.1\n-172,863.0\n-2,908.6\n177,406.0\n-1,634.4\n925,312.7\n990,341.7\n177,893.2\n-9,262.9\n185,922.5\n1,233.6\n6,792.4\n805,656.0\n-3,903.1\n687,696.6\n121,862.5\n-65,029.0\n786,270.8\n25.4%\n35.4%\n29.2%\n2013\n-374,643.5\n-47,642.5\n-327,001.0\n989.6\n319,316.8\n6,694.5\n420,296.5\n280,229.0\n181,938.9\n9,915.4\n133,093.6\n38,929.9\n8,928.1\n89,362.0\n-5,520.2\n-11,508.5\n106,390.7\n140,067.4\n45,653.0\n1.2%\n7.4%\n2.5%\n2014\n82,840.8\n-152,071.7\n234,912.5\n-127,369.6\n-131,012.2\n23,469.3\n387,954.1\n309,957.1\n157,639.0\n-23,881.4\n168,946.7\n12,573.7\n6,105.2\n146,212.9\n-389.8\n-43,543.7\n190,146.4\n77,997.0\n470,795.0\n12.0%\n7.6%\n4.0%\n2015\nJan\n132,431.5\n-178,961.3\n311,392.8\n-141,597.9\n-198,281.1\n28,486.1\n319,048.5\n245,588.9\n185,227.8\n-11,412.3\n184,880.3\n11,759.9\n4,414.7\n55,946.4\n-390.8\n-120,031.2 176,368.4\n73,459.6\n451,480.0\n11.6%\n6.2%\n1.6%\nFeb\n36,127.1\n-294,685.4\n330,812.5\n-142,138.7\n-217,181.2\n28,507.4\n279,980.3\n134,866.3\n122,671.7\n-11,726.2\n122,554.5\n11,843.4\n8,255.0\n3,939.6\n-390.8\n-192,169.1 196,499.5\n145,114.0\n316,107.4\n7.9%\n3.3%\n0.1%\nMar\n250,879.1\n-205,308.8\n456,187.9\n-294,509.5\n-187,715.9\n26,037.5\n25,501.8\n190,918.6\n47,442.1\n-21,094.5\n49,095.3\n19,441.3\n-7,984.8\n151,461.2\n-3,336.1\n-33,095.8\n187,893.1\n-165,416.8\n276,380.8\n6.8%\n4.6%\n4.2%\nApr\n59,815.5\n-308,111.1\n367,926.6\n-261,255.8\n-130,095.6\n23,424.8\n148,570.5\n379,639.8\n188,341.5\n99,556.4\n60,904.0\n27,881.1\n24,181.6\n167,116.7\n-3,187.1\n-19,566.9\n189,870.6\n-231,069.3\n208,386.1\n4.9%\n9.1%\n4.6%\nMay\n-95,449.8\n-379,009.3\n283,559.6\n-283,804.9\n-23,610.5\n23,855.8\n257,686.8\n679,564.0\n482,132.6\n99,026.6\n354,951.8\n28,154.2\n25,922.7\n171,508.7\n-3,589.5\n4,881.3\n170,216.9\n-421,877.2\n162,237.0\n3.8%\n16.4%\n4.8%\nJun\n-180,094.9\n-200,283.4\n20,188.5\n-48,600.0\n14,958.5\n13,453.0\n400,538.7\n695,004.5\n575,620.5\n92,986.5\n444,479.8\n38,154.2\n-20,025.0\n139,409.0\n16,964.5\n-55,223.4\n177,667.9\n-294,465.8\n220,443.8\n5.1%\n16.7%\n3.9%\nJul\n-22,698.6\n-183,460.8\n160,762.2\n-96,131.8\n-83,111.7\n18,481.3\n272,589.1\n776,284.9\n736,056.5\n289,241.2\n415,882.2\n30,933.0\n-28,752.0\n68,980.4\n31,997.2\n-103,031.0 140,014.2\n-503,695.8\n249,890.4\n5.9%\n18.5%\n1.9%\nAug\n-100,052.1\n-212,180.1\n112,128.0\n-60,845.6\n-63,177.9\n11,895.4\n251,024.5\n794,638.6\n754,533.2\n270,492.4\n448,362.7\n35,678.2\n-13,816.8\n53,922.1\n58,043.6\n-141,232.5 137,110.9\n-543,614.1\n150,972.4\n3.5%\n18.8%\n1.4%\nSep\n-179,455.4\n-216,884.3\n37,428.9\n19,340.3\n-46,073.7\n-10,695.4\n376,976.5\n812,660.2\n739,918.1\n290,213.2\n412,213.7\n37,491.3\n-17,867.0\n90,609.0\n32,634.0\n-64,459.1\n122,434.1\n-435,683.7\n197,521.1\n4.5%\n19.0%\n2.4%\nOct\n-223,571.1\n-214,670.1\n-8,901.0\n34,361.2\n-13,602.2\n-11,858.0\n367,137.9\n865,327.7\n782,714.1\n286,430.3\n457,069.2\n39,214.6\n12,502.1\n70,111.5\n41,234.4\n-65,906.0\n94,783.1\n-498,189.8\n143,566.8\n3.2%\n20.0%\n1.9%\nNov\n-3,723.5\n-160,163.5\n156,440.0\n18,611.0\n-162,923.9\n-12,127.1\n333,441.6\n992,339.8\n897,401.8\n328,127.9\n511,078.6\n58,195.3\n17,145.1\n77,793.0\n42,717.2\n-55,036.1\n90,111.8\n-658,898.2\n329,718.1\n7.5%\n22.8%\n2.0%\nDec\n35,736.8\n-99,967.3\n135,704.1\n95,379.1\n-219,844.2\n-11,239.0\n326,266.8\n1,182,041.9\n1,074,473.5\n382,371.0\n631,757.3\n60,345.2\n68,164.4\n39,403.9\n61,363.6\n-135,814.0 113,854.3\n-855,775.0\n362,003.6\n8.2%\n27.0%\n1.0%\n2016\nJan\n25,599.2\n-72,324.8\n97,924.0\n83,389.7\n-170,029.2\n-11,284.5\n388,719.3\n1,244,947.0\n986,766.1\n367,824.5\n563,398.7\n55,543.0\n80,539.8\n177,641.0\n58,324.2\n25,822.4\n93,494.4\n-856,227.7\n414,318.5\n9.5%\n29.4%\n4.9%\nFeb\n-16,833.2\n-58,831.6\n41,998.4\n108,661.8\n-139,327.3\n-11,332.9\n447,824.3\n1,240,909.9\n1,122,755.2\n430,914.6\n643,214.9\n48,625.8\n51,500.7\n66,654.0\n39,889.2\n-50,903.8\n77,668.6\n-793,085.7\n430,991.1\n9.9%\n29.2%\n1.8%\nMar\n-162,864.4\n-128,929.8\n-33,934.6\n217,549.1\n-169,893.9\n-13,720.6\n709,354.1\n1,171,650.7\n1,153,453.4\n468,278.0\n665,775.9\n19,399.5\n107,827.5\n-89,630.2\n24,933.7\n-186,744.5\n72,180.6\n-462,296.6\n546,489.7\n12.5%\n26.8%\n-2.4%\nApr\n-167,123.9\n-118,045.9\n-49,078.0\n223,580.0\n-163,052.9\n-11,449.1\n733,158.4\n1,093,844.4\n1,138,798.4\n357,909.4\n727,359.2\n53,529.8\n83,224.6\n-128,178.6\n27,056.2\n-212,671.7\n57,436.9\n-360,686.0\n566,034.5\n12.8%\n24.1%\n-3.4%\nMay\n-216,529.0\n-187,662.4\n-28,866.7\n315,851.6\n-274,592.8\n-12,392.1\n779,443.5\n809,966.1\n884,181.4\n370,585.4\n457,533.3\n56,062.7\n92,901.3\n-167,116.6\n27,709.1\n-269,599.0\n74,773.4\n-30,522.6\n562,914.4\n12.5%\n16.8%\n-4.4%\nJun\n92,794.6\n-259,180.5\n351,975.1\n-51,292.1\n-287,828.7\n-12,854.3\n503,904.7\n850,516.8\n873,765.5\n417,029.5\n401,397.3\n55,338.7\n146,841.4\n-170,090.0\n-1,722.7\n-219,160.2\n50,792.9\n-346,612.1\n596,699.4\n13.1%\n17.5%\n-4.5%\nSource:Reserve Bank of Zimbabwe, 2016 \nNote:\nRBZ - Reserve Bank of Zimbabwe\nDMBs - Deposit Money Banks (Commercial Banks and Merchant Banks)\nOBIs - Other Banking institutions (Building Sicieties)\nTABLE 3.4: ANALYSIS OF YEARLY CHANGES IN MONEY SUPPLY\nUS$ Thousands\n \n \n \nS13 \n \n \n \nA GR IC U LTU R E\nC ON S TR U C TION\nC OM M U N IC A TION\nD IS TR IB U TION\nFIN A N C IA L \nFIN A N C IA L\nM A N U FA C TU R IN G\nM IN IN G\nS ER V IC ES\nTR A N S POR T\nIN D IV ID U A LS\nC ON GLOM ER A TES\nTOTA L\nEN D OF \n \nIN V ES TM EN T\nOR GA N IS A TION S\n \n \n \n \n \n2009\n110,230.4\n12,406.6\n10,948.3\n151,169.9\n345.0\n32,093.2\n116,375.5\n36,259.7\n35,593.3\n12,726.1\n23,212.5\n1,016.1\n542,376.7\n2010\n238,969.8\n24,075.5\n15,855.7\n225,277.0\n384.6\n72,693.1\n218,621.4\n71,729.9\n112,325.2\n22,015.6\n86,980.6\n1,122.1\n1,090,050.4\n2011\n366,827.1\n36,043.9\n24,836.9\n323,322,2\n3,720.8\n87,963.3\n310,488.5\n75,310.4\n191,534.5\n55,295.7\n180,205.0\n4,726.2\n1,660,274.6\n2012\n444,341.0\n32,622.8\n37,353.2\n428,782.2\n8,513.2\n31,513.9\n414,044.9\n148,927.9\n233,864.4\n33,116.1\n288,628.5\n9,370.9\n2,111,078.9\n2013\n533,165.2\n42,285.1\n17,617.9\n435,613.1\n5,047.0\n62,165.8\n389,181.2\n115,404.6\n379,809.3\n37,409.1\n369,838.8\n18,252.9\n2,405,790.0\n2014\n565,840.1\n46,298.5\n42,604.8\n437,975.3\n47,805.8\n88,485.5\n478,895.5\n220,501.3\n481,497.5\n43,449.8\n543,038.5\n5,957.7\n3,002,529.6\n2015\nJan\n541,656.5\n46,681.6\n39,906.8\n445,656.6\n21,454.5\n131,350.1\n466,896.6\n207,686.6\n452,817.5\n47,945.7\n557,066.9\n1,401.2\n2,960,820.4\nFeb\n538,722.0\n42,062.8\n47,395.1\n446,647.8\n21,790.0\n117,681.6\n461,237.6\n214,420.4\n463,884.6\n48,357.0\n544,838.5\n1,416.2\n2,948,453.6\nMar\n549,118.0\n42,010.1\n44,087.2\n448,278.7\n76,302.3\n110,180.3\n473,978.1\n203,327.9\n466,104.7\n48,938.0\n550,140.6\n1,339.6\n3,013,805.6\nApr\n556,457.4\n30,687.3\n44,546.9\n451,852.9\n65,696.1\n72,653.7\n457,797.1\n202,418.2\n518,353.6\n47,653.8\n551,662.8\n990.1\n3,000,770.0\nMay\n577,258.6\n31,400.7\n44,839.1\n456,652.1\n64,792.3\n75,682.2\n460,700.3\n192,377.2\n545,363.4\n50,061.9\n561,058.3\n1,034.4\n3,061,220.5\nJun\n576,485.1\n29,649.0\n56,936.5\n463,750.7\n20,117.9\n91,678.4\n407,949.0\n181,512.7\n512,108.4\n40,839.7\n590,917.1\n965.9\n2,972,910.2\nJul\n589,866.7\n27,447.9\n56,456.1\n474,568.7\n21,025.9\n92,335.6\n418,612.0\n186,238.8\n416,928.9\n41,201.6\n579,629.0\n941.4\n2,905,252.7\nAug\n580,775.3\n28,148.8\n58,618.6\n460,451.4\n22,509.2\n105,466.9\n411,831.6\n176,732.7\n440,470.4\n41,154.5\n571,926.0\n886.9\n2,898,972.1\nSep\n598,429.9\n28,307.9\n59,213.0\n443,604.1\n22,711.9\n102,015.0\n421,228.0\n174,144.2\n467,804.5\n43,051.0\n569,250.1\n929.5\n2,930,689.0\nOct\n609,537.2\n33,868.4\n53,813.7\n466,727.6\n21,566.0\n104,959.3\n447,136.6\n141,401.6\n484,254.8\n40,156.6\n573,330.4\n907.7\n2,977,660.0\nNov\n650,547.2\n28,696.7\n49,784.9\n440,864.2\n12,868.9\n104,288.1\n428,393.1\n152,136.9\n444,207.8\n40,760.5\n543,920.4\n696.2\n2,897,164.8\nDec\n590,610.6\n30,958.8\n44,706.5\n366,799.2\n13,354.6\n87,897.5\n450,208.5\n163,452.9\n475,424.5\n40,154.3\n518,998.3\n527.5\n2,783,093.0\n2016\nJan\n577,684.4\n35,033.6\n35,535.9\n379,618.2\n13,329.2\n68,325.8\n476,677.0\n158,150.5\n410,992.6\n40,295.6\n535,379.3\n380.2\n2,731,402.2\nFeb\n539,562.8\n35,885.1\n37,857.4\n374,835.1\n13,285.9\n63,301.8\n473,970.3\n155,889.4\n415,520.6\n40,862.5\n531,789.5\n365.3\n2,683,125.7\nMar\n586,349.7\n39,180.5\n41,037.5\n371,809.6\n13,397.9\n63,061.4\n444,769.1\n156,209.2\n402,900.5\n44,606.7\n588,882.7\n410.7\n2,752,615.5\nApr\n527,545.8\n46,612.5\n40,624.2\n379,572.0\n13,428.1\n69,469.7\n437,795.4\n142,682.1\n421,335.6\n43,921.4\n645,037.3\n9,410.0\n2,777,434.0\nMay\n522,239.8\n40,194.4\n38,496.8\n358,042.5\n13,280.8\n65,381.2\n439,295.5\n145,180.0\n401,304.1\n41,908.5\n651,719.3\n9,579.0\n2,726,621.9\nJun\n510,016.8\n39,316.9\n36,866.1\n361,138.1\n12,764.5\n68,850.3\n433,145.3\n143,595.6\n476,484.5\n42,179.6\n650,071.4\n9,739.2\n2,784,168.3\nSource:Reserve Bank of Zimbabwe,2016 \nTABLE 3.5: Sectoral Analysis of Commerical Banks' Loans and Advances\nUS$ Thousands\n \n \n \nS14 \n \n \n \n \n \n \n \nAGRICULTURE CONSTRUCTION COMMUNICATION\nDISTRIBUTION\nFINANCIAL \nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT INDIVIDUALS CONGLOMERATES\nTOTAL\nEND OF \n \nINVESTMENT\nORGANISATIONS\n \n \n \n \n \n2009\n61,792.7\n \n6,467.2\n \n35,365.8\n \n81,470.7\n \n45,127.5\n \n68,001.8\n \n111,397.9\n \n30,218.3\n \n480,954.6\n \n14,728.8\n \n180,117.5\n \n3,415.5\n \n1,119,058.5\n \n2010\n113,727.1\n \n13,189.9\n \n52,087.1\n \n195,080.2\n \n84,886.8\n \n146,548.7\n \n144,660.9\n \n67,916.4\n \n504,291.2\n \n17,349.7\n \n300,489.1\n \n5,962.4\n \n1,646,189.5\n \n2011\n120,665.7\n \n35,860.2\n \n107,439.2\n \n295,439.3\n \n94,854.2\n \n277,933.7\n \n267,305.3\n \n69,436.0\n \n518,311.2\n \n24,462.2\n \n444,051.7\n \n15,849.9\n \n2,271,608.5\n \n2012\n96,098.4\n \n50,492.7\n \n126,343.5\n \n379,068.0\n \n198,323.3\n \n509,241.6\n \n280,975.4\n \n95,457.1\n \n582,286.2\n \n41,852.2\n \n538,135.2\n \n26,491.3\n \n2,924,764.8\n \n2013\n94,346.3\n \n52,722.4\n \n141,401.4\n \n338,625.9\n \n223,223.8\n \n754,145.4\n \n339,305.6\n \n99,583.3\n \n754,116.1\n \n41,527.2\n \n440,197.9\n \n97,771.1\n \n3,376,966.4\n \n2014\n147,242.4\n \n60,358.1\n \n118,725.7\n \n328,729.5\n \n325,746.6\n \n950,304.9\n \n290,329.3\n \n118,977.8\n \n964,815.0\n \n47,574.3\n \n638,061.1\n \n92,040.8\n \n4,082,906.3\n \n2015\nJan\n155,304.2\n63,950.4\n136,066.9\n349,099.7\n294,145.5\n809,684.0\n314,319.6\n113,452.0\n1,034,514.7\n48,876.5\n606,370.3\n78,746.0\n4,004,529.8\nFeb\n151,740.1\n63,112.6\n109,807.6\n370,581.8\n314,944.7\n784,737.6\n309,307.9\n120,255.1\n1,028,160.1\n43,112.0\n606,650.6\n78,891.2\n3,981,301.2\nMar\n199,484.8\n63,709.2\n116,397.4\n378,460.0\n351,448.0\n762,380.7\n373,911.9\n99,744.6\n912,654.4\n42,478.9\n644,951.3\n72,605.2\n4,018,226.6\nApr\n186,896.3\n65,974.0\n130,284.9\n380,884.8\n330,001.9\n799,952.4\n373,648.3\n109,735.0\n944,772.9\n44,964.9\n653,801.0\n75,850.9\n4,096,767.2\nMay\n185,803.2\n73,167.5\n111,512.1\n523,774.7\n299,659.2\n801,335.5\n419,453.7\n113,355.0\n1,041,392.8\n50,057.9\n619,767.9\n71,388.8\n4,310,668.3\nJun\n187,657.0\n76,777.8\n109,336.0\n498,031.3\n304,087.2\n877,042.8\n338,069.8\n67,556.6\n1,131,497.1\n43,949.0\n651,072.8\n72,166.9\n4,357,244.2\nJul\n180,261.3\n80,536.4\n106,645.3\n452,744.1\n295,611.1\n911,363.8\n360,746.5\n88,518.4\n971,759.9\n53,101.6\n647,215.1\n70,618.8\n4,219,122.4\nAug\n168,075.2\n86,038.9\n108,477.7\n472,875.1\n335,158.3\n784,616.6\n401,830.1\n76,647.0\n1,042,260.4\n55,455.9\n657,177.1\n51,922.5\n4,240,535.0\nSep\n197,641.5\n85,842.6\n112,415.3\n462,925.6\n349,564.2\n831,813.0\n379,121.4\n71,090.0\n1,033,106.7\n53,348.1\n676,308.0\n55,759.2\n4,308,935.5\nOct\n219,922.3\n85,382.0\n116,874.4\n447,200.7\n331,543.6\n821,640.8\n378,568.5\n68,298.7\n1,100,719.7\n55,846.7\n648,757.5\n67,353.2\n4,342,108.3\nNov\n212,806.1\n85,815.7\n98,468.4\n465,089.7\n334,835.6\n846,959.0\n363,754.4\n71,866.2\n1,074,141.8\n56,110.3\n665,421.1\n64,630.3\n4,339,898.7\nDec\n196,092.9\n88,273.0\n102,636.9\n518,411.4\n336,909.2\n864,491.7\n307,845.0\n63,337.5\n1,163,771.1\n57,410.5\n639,985.6\n66,435.7\n4,405,600.5\n2016\nJan\n231,827.3\n101,724.1\n93,544.2\n517,089.2\n325,203.1\n977,272.1\n345,812.2\n62,026.3\n1,083,702.7\n61,755.6\n618,080.1\n58,808.7\n4,476,845.6\nFeb\n226,568.3\n105,747.9\n97,684.4\n525,070.9\n339,839.0\n896,869.2\n326,026.0\n59,381.3\n1,047,904.6\n63,248.3\n634,478.3\n63,017.8\n4,385,835.9\nMar\n243,546.9\n102,238.4\n116,471.1\n582,943.5\n362,058.8\n879,340.8\n368,689.6\n60,514.0\n402,900.5\n62,839.4\n642,779.4\n61,037.6\n4,556,027.1\nApr\n243,151.6\n102,234.0\n112,219.5\n569,660.7\n360,299.5\n907,855.6\n335,068.6\n71,721.0\n1,156,122.6\n63,858.0\n628,901.1\n61,087.0\n4,612,179.4\nMay\n236,180.5\n97,008.6\n120,726.3\n593,284.9\n371,034.5\n923,580.9\n356,500.9\n99,176.4\n1,107,956.8\n61,396.5\n607,501.4\n64,066.3\n4,638,413.9\nJun\n218,386.8\n103,914.2\n134,181.8\n596,904.8\n362,400.2\n973,333.3\n316,490.8\n58,856.9\n1,128,688.7\n72,063.3\n601,813.8\n61,833.2\n4,628,867.8\nSource:Reserve Bank of Zimbabwe,2016 \nTABLE 3.6: Sectoral Analysis of Commercial Banks' Deposits\nUS$ Thousands\n \n \n \nS15 \n \nEnd of\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\nEnd of\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2015\n2015\nJan\n3,659.00\n11.81\n154.43\n311.94\n352.18\n113.46\nJan\n170.77\n29.55\n1,174.09\n1124.49\n16,903.26\n37.6\nFeb\n3,221.13\n13.69\n141.79\n275.8\n334.62\n104.62\nFeb\n172.25\n32.23\n1,140.94\n1027.88\n16,160.42\n39.94\nMar\n3,801.96\n11.11\n131.97\n298.30\n364.69\n111.70\nMar\n191.64\n30.33\n1183.64\n1110.17\n18211.89\n44.48\nApr\n3,919.47\n10.81\n133.99\n299.67\n341.22\n112.38\nApr\n180.34\n26.98\n1151.25\n1107.52\n17269.69\n43.55\nMay\n3,467.10\n13.08\n128.76\n316.66\n389.97\n124.50\nMay\n179.76\n27.38\n1052.50\n1123.77\n18684.62\n43.22\nJun\n3,014.73\n15.35\n123.53\n333.65\n438.72\n136.62\nJun\n196.41\n31.85\n1121.24\n1038.18\n17478.24\n47.17\nJul\n4,010.26\n12.64\n154.61\n332.37\n391.04\n128.61\nJul\n199.10\n34.00\n1288.23\n1167.43\n18670.44\n49.36\nAug\n3,299.06\n11.39\n193.36\n313.18\n391.19\n133.55\nAug\n153.13\n28.05\n1373.48\n1122.22\n19750.59\n46.52\nSep\n3,762.74\n12.925798\n131.89048\n318.75\n396.28\n396.28\nSep\n164.31\n31.15\n1196.87\n1103.91\n19133.21\n50.40\nOct\n3,964.53\n11.84\n149.41\n334.93\n434.71\n151.02\nOct\n156.43\n30.775\n1295.03\n1152.83\n22166.45\n54.05\nNov\n3,551.40\n12.02\n130.2\n347.68\n416.95\n154.38\nNov\n143.44\n32.19\n1206.16\n1151.34\n21390.18\n51.34\nDec\n4,167.88\n10.95\n146.6\n411.34\n477.51\n213.28\nDec\n155.04\n27.246\n1359.876\n1183.57\n22904.33\n52.59\nAnnual \nTotal\n43,839.25\n147.62\n1,720.54\n3,894.27\n4,729.07\n1,880.40\nAnnual \nTotal\n2,062.62\n361.73\n14,543.30\n13,413.30\n228,723.31\n560.22\n2016\n2016\nJan\n3,385.87\n11.099\n137.393\n331.52\n388.89\n167.68\nJan\n132.26\n24.62\n1328.93\n1104.45\n19956.07\n49.89\nFeb\n3,448.15\n11.86\n138.75\n312.12\n389.26\n167.93\nFeb\n148.42\n30.26\n1289.46\n1067.13\n19793.73\n54.57\nMar\n3,460.22\n11.25555\n142.0782\n288.82\n417.13\n255.93\nMar\n152.47\n29.65\n1455.70\n962.91\n21731.49\n61.86\nApr\n3,564.32\n9.6547368\n180.12078\n247.60\n427.29\n168.31\nApr\n161.73\n24.97\n1962.64\n841.34\n21086.57\n59.85\nMay\n3,869.19\n10.825818\n214.79106\n203.25\n479.93\n217.91\nMay\n199.26\n29.11\n2779.90\n675.85\n23292.99\n83.15\nJun\n3,870.19\n10.27\n203.9\n131.40\n465.10\n174.10\nJun\n268.19\n33.50\n3203.80\n741.94\n23321.17\n87.96\nSource:Reserve Bank of Zimbabwe,2016 \nTABLE 4.1 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY\nValues of Transactions (US$ in millions)\nTABLE 4.2 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY\nVolumes of Transactions (in thousands)\n \n \n \n \n \n \n \n \n \n \nEnd of\nNominal Lending \nRates2\nIndividuals \nCorporate\nSavings\n3 Months\n2015\n2015\nJan\n6.00-35.00\n14.16\n9.66\nJan\n0.15-8.00\n3.00-17.00\nFeb \n4.30-33.50\n14\n9.73\nFeb \n0.50-12.00\n1.00-17.00\nMar\n4.30-33.50\n13.24\n8.75\nMar\n0.50-12.00\n1.00-17.00\nApr\n4.30-31.00\n12.71\n8.84\nApr\n0.30-8.00\n1.00-17.00\nMay\n5.00-31.00\n12.74\n8.79\nMay\n0.30-8.00\n1.00-17.00\nJun\n5.00-31.00\n11.94\n8.42\nJun\n0.30-8.00\n1.00-17.00\nJul\n5.00-31.00\n11.86\n8.56\nJul\n0.30-8.00\n1.00-15.00\nAug\n4.30-26.00\n11.96\n8.51\nAug\n0.30-8.00\n1.00-15.00\nSep\n4.30-25.00\n11.81\n8.47\nSep\n0.30-8.00\n1.00-16.00\nOct\n4.00-18.00\n10.98\n7.28\nOct\n0.50-8.00\n1.00-17.00\nNov\n4.00-16.25\n12.2\n7.67\nNov\n0.75-8.00\n1.00-17.00\nDec\n6.00-16.00\n11.99\n7.57\nDec\n0.50-8.00\n0.75-17.00\n2016\n2016\nJan\n6.00-22.00\n12.08\n7.38\nJan\n0.50-8.00\n0.75-17.00\nFeb\n4.00-22.00\n11.48\n7.29\nFeb\n0.50-8.00\n0.75-17.00\nMar\n4.00-22.00\n11.44\n7.16\nMar\n0.50-8.00\n0.75-17.00\nApr\n4.00-22.00\n11.5\n7.2\nApr\n0.50-8.00\n0.75-17.00\nMay\n4.00-18.00\n11.43\n7.35\nMay\n0.50-8.00\n0.75-17.00\nJun\n4.00-18.00\n11.4\n7.48\nJun\n0.50-6.00\n0.75-17.00\nSource:Reserve Bank of Zimbabwe,2016\nNotes\nTABLE 5.2 : BANKS DEPOSIT RATES (percent per annum)1\n1. The range of rates qouted by banks during the \nperiod.\n2. Three (3) months deposit rates revised to exclude \nrates on inactive or dormant accounts.\nTABLE 5.1: LENDING RATES (percent per annum)1\n3. Lending rates exclude rates on staff loans. \n1. Table revised, to separate weighted lending rates for \nindividuals and corporate bodies. \n2. Nominal Lending Rates depict the range of rates quoted by \nbanks.\nWeighted Average Lending Rates3 \nCommercial Banks\nCommercial Banks\nEnd of \n \n \n \n \nUS$ Millions\nEnd of\nIndustrial\nMining\nMarket Capitalisation\n2015\nJan\n164.90\n58.13\n4,365.14\nFeb\n167.16\n55.38\n4,353.38\nMar\n158.22\n43.92\n4,117.08\nApr\n156.23\n42.93\n4,066.07\nMay\n152.96\n44.45\n3,978.06\nJun\n148.4\n44.3\n3,803.80\nJul\n145.35\n39.36\n3,812.65\nAug\n135.43\n35.34\n3,552.02\nSep\n131.93\n24.36\n3,444.50\nOct\n130.83\n23.57\n3,416.11\nNov\n117.55\n22.33\n3,141.68\nDec\n114.85\n23.72\n3,073.41\n2016\nJan\n103.04\n19.53\n2,790.40\nFeb\n99.40\n19.14\n2,692.30\nMar\n97.17\n19.53\n2,645.06\nApr\n105.79\n20.16\n2,862.61\nMay\n104.70\n25.54\n2,881.34\nJun\n101.04\n24.70\n2,780.90\nTABLE: 5.3: ZIMBABWE STOCK MARKET STATISTICS\nSource: Zimbabwe Stock Exchange (ZSE),2016\nIndices\n \n \n \nS18 \n \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNICATION\nRECREATION &\nEDUCATION\nRESTAURANTS \n&\nMISC.\nTOTAL \nNON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.38\n6.05\n17.74\n9.91\n2.16\n9.76\n3.41\n2.1\n5.67\n1.38\n3.91\n66.47\n33.53\n100\n2010\n-0.2\n-0.2\n0.2\n0.0\n0.1\n-0.2\n-0.3\n-0.2\n0.0\n0.5\n0.1\n0.1\n0.6\n0.3\n2011\n0.1\n0.2\n0.6\n0.3\n0.0\n0.5\n0.9\n0.2\n0.5\n0.7\n0.5\n0.4\n0.5\n0.4\n2012\n0.0\n0.0\n0.9\n0.1\n0.2\n0.6\n0.0\n0.0\n1.1\n0.3\n0.2\n0.2\n0.3\n0.3\n2013\n0.4\n0.0\n0.3\n-0.1\n0.2\n0.1\n-1.2\n-0.1\n0.9\n0.2\n-0.1\n0.1\n-0.2\n0.0\n2014\n0.1\n0.0\n0.0\n-0.2\n0.1\n0.1\n0.0\n0.0\n0.4\n-0.1\n-0.2\n-0.2\n-0.2\n-0.1\n2015\nJan\n-0.04\n-0.01\n0.08\n0.07\n0.06\n-0.97\n-13.41\n0.02\n-0.08\n-0.48\n0.30\n-0.69\n0.40\n-0.34\nFeb\n0.25\n-0.35\n-0.09\n-0.11\n-0.02\n-0.41\n-0.10\n-0.17\n0.00\n-0.28\n0.10\n-0.13\n0.05\n-0.07\nMar\n0.12\n-0.27\n-0.06\n-0.02\n-0.05\n0.02\n0.00\n0.03\n0.00\n0.12\n0.10\n-0.03\n-0.03\n-0.03\nApr\n-0.01\n-0.71\n-3.35\n-0.46\n-0.05\n-0.15\n-0.13\n-0.07\n0.59\n0.41\n-0.04\n-1.01\n-0.63\n-0.89\nMay\n-0.17\n-0.41\n0.18\n-0.25\n0.10\n-0.25\n-0.02\n-0.11\n0.00\n-0.08\n-0.44\n-0.10\n-0.37\n-0.19\nJun\n0.36\n-0.06\n-0.02\n-0.07\n-0.17\n0.06\n0.01\n-0.09\n0.00\n-0.07\n0.11\n0.01\n-0.45\n-0.14\nJul\n-0.08\n0.05\n-0.56\n-0.82\n0.15\n-0.09\n-0.02\n-0.14\n7.48\n-0.02\n0.03\n0.47\n-0.81\n0.06\nAug\n-0.27\n-0.01\n0.02\n-0.14\n-0.04\n-0.29\n-0.06\n-0.26\n0.00\n-0.14\n-0.09\n-0.10\n-0.75\n-0.31\nSep\n-0.05\n0.00\n-0.62\n-0.52\n0.04\n-0.42\n-0.38\n-0.01\n0.00\n1.28\n-0.30\n-0.31\n-0.47\n-0.36\nOct\n-0.43\n-0.31\n-0.08\n-0.32\n0.61\n-0.47\n0.02\n-0.14\n0.00\n-0.18\n0.12\n-0.17\n-0.53\n-0.29\nNov\n-0.15\n-0.19\n-0.01\n-0.24\n0.00\n-0.08\n-0.23\n-0.02\n2.83\n-0.03\n-0.02\n0.22\n0.04\n0.16\nDec\n-0.41\n-0.15\n0.18\n-0.07\n-0.06\n-0.25\n-0.03\n0.09\n0.00\n-0.07\n-0.30\n-0.06\n-0.21\n-0.11\n2016\nJan\n0.05\n-0.02\n-0.04\n-0.30\n-0.15\n-0.37\n0.00\n-0.18\n0.00\n-0.16\n-0.29\n-0.13\n0.13\n-0.05\nFeb\n-0.14\n0.00\n-0.12\n-0.19\n-0.17\n-0.37\n-0.13\n-0.01\n0.00\n-0.17\n0.06\n-0.14\n-0.03\n-0.10\nMar\n-0.15\n-0.17\n-1.03\n-0.73\n-0.13\n-0.30\n0.42\n-0.04\n3.36\n-0.62\n-0.60\n-0.11\n-0.13\n-0.12\nApr\n0.03\n-0.14\n-0.02\n-0.32\n0.00\n0.07\n-0.08\n-0.02\n-0.01\n-0.09\n-0.35\n-0.08\n-0.51\n-0.21\nMay\n-0.29\n-0.22\n0.12\n-0.11\n-0.18\n-0.11\n-1.61\n0.06\n0.00\n0.02\n-0.33\n-0.12\n-0.49\n-0.24\nJun\n0.07\n-0.21\n0.58\n0.03\n0.15\n-0.08\n-0.01\n-0.23\n2.65\n0.31\n0.09\n0.44\n-0.35\n0.19\nSource :ZIMSTATS, 2016\nNON-FOOD INFLATION\nTABLE 5.4 : MONTHLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \\1\n( DECEMBER 2012 = 100)\n \n \n \nS19 \n \n \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNICATI\nON\nRECREATION &\nEDUCATION\nRESTAURANT\nS &\nMISC.\nTOTAL NON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.38\n6.05\n17.74\n9.91\n2.16\n9.76\n3.41\n2.10\n5.67\n1.38\n3.91\n66.47\n33.53\n100.00\n2010\n-0.5\n-0.5\n0.4\n-0.1\n0.3\n-0.3\n-0.6\n-0.5\n0.3\n1.2\n0.3\n0.3\n1.4\n0.6\n2011\n0.3\n0.5\n1.1\n0.7\n0.0\n1.1\n1.8\n0.3\n0.9\n1.2\n0.9\n0.7\n0.8\n0.7\n2012\n-0.1\n-0.1\n1.7\n0.2\n0.3\n1.1\n0.0\n0.0\n2.2\n0.6\n0.4\n0.4\n0.6\n0.5\n2013\n0.8\n0.0\n0.6\n-0.2\n0.4\n0.2\n-2.3\n-0.2\n1.8\n0.3\n-0.1\n0.3\n-0.3\n0.1\n2014\n0.2\n0.0\n-0.1\n-0.5\n0.2\n0.3\n-0.1\n-0.1\n2.2\n-0.3\n-0.6\n0.1\n-0.6\n-0.1\n2015\nJan\n0.2\n0.0\n0.2\n-0.1\n0.3\n-0.7\n-13.4\n-0.1\n-9.2\n-1.3\n0.2\n-1.6\n-0.1\n-1.1\nFeb\n0.2\n-0.5\n0.1\n-0.1\n0.2\n-1.2\n-13.5\n-0.3\n-0.1\n-1.0\n0.2\n-0.8\n0.1\n-0.5\nMAr\n0.3\n-0.6\n-0.1\n-0.1\n0.0\n-1.4\n-13.5\n-0.1\n-0.1\n-0.6\n0.5\n-0.8\n0.4\n-0.4\nApr\n0.4\n-1.3\n-3.5\n-0.6\n-0.1\n-0.5\n-0.2\n-0.2\n0.6\n0.2\n0.2\n-1.2\n-0.6\n-1.0\nMay\n-0.1\n-1.4\n-3.2\n-0.7\n0.0\n-0.4\n-0.1\n-0.2\n0.6\n0.4\n-0.4\n-1.1\n-1.0\n-1.1\nJun\n0.2\n-1.2\n-3.2\n-0.8\n-0.1\n-0.3\n-0.1\n-0.3\n0.6\n0.3\n-0.4\n-1.1\n-1.4\n-1.2\nJul\n0.1\n-0.4\n-0.4\n-1.1\n0.1\n-0.3\n0.0\n-0.3\n7.5\n-0.2\n-0.3\n0.4\n0.1\n-0.3\nAug\n0.0\n0.0\n-0.6\n-1.0\n-0.1\n-0.3\n-0.1\n-0.5\n7.5\n-0.2\n0.1\n0.4\n0.0\n-0.4\nSep\n-0.4\n0.0\n-1.1\n-1.5\n0.2\n-0.8\n-0.5\n-0.4\n7.5\n1.1\n-0.4\n0.1\n-0.4\n-0.6\nOct\n-0.7\n-0.3\n-0.7\n-1.0\n0.6\n-1.2\n-0.4\n-0.4\n0.0\n1.0\n-0.3\n-0.6\n-1.7\n-1.0\nNov\n-0.6\n-0.5\n-0.7\n-1.1\n0.6\n-1.0\n-0.6\n-0.2\n2.8\n1.1\n-0.2\n-0.3\n-1.0\n-0.5\nDec\n-1.0\n-0.6\n0.1\n-0.6\n0.5\n-0.8\n-0.2\n-0.1\n2.8\n-0.3\n-0.2\n0.0\n-0.7\n-0.2\n2016\nJan\n-0.5\n-0.4\n0.1\n-0.6\n-0.2\n-0.7\n-0.3\n-0.1\n2.8\n-0.3\n-0.6\n0.0\n0.0\n0.0\nFeb\n-0.5\n-0.2\n0.0\n-0.6\n-0.4\n-1.0\n-0.2\n-0.1\n0.0\n-0.3\n-0.6\n-0.3\n-0.1\n-0.3\nMar\n-0.2\n-0.2\n-1.2\n-1.2\n-0.4\n-1.0\n0.3\n-0.2\n3.4\n-0.9\n-0.9\n-0.4\n0.0\n-0.3\nApr\n-0.3\n-0.3\n-1.2\n-1.2\n-0.3\n-0.6\n0.2\n-0.1\n3.3\n-0.8\n-1.0\n-0.3\n-0.7\n-0.4\nMay\n-0.4\n-0.5\n-0.9\n-1.2\n-0.3\n-0.3\n-1.3\n0.0\n3.4\n-0.7\n-1.3\n-0.3\n-1.1\n-0.6\nJun\n-0.2\n-0.6\n0.7\n-0.4\n0.0\n-0.1\n-1.7\n-0.2\n2.6\n0.2\n-0.6\n0.2\n-1.3\n-0.3\nSource :ZIMSTATS, 2016\nTABLE 5.5 : QUARTERLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \\1\n( DECEMBER 2012 = 100)\nNON-FOOD INFLATION\n \n \n \nS20 \n \n \n \n \n \n \nFOOD INFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHSING, WATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNIC\nATION\nRECREATION &\nEDUCATION\nRESTAURAN\nTS &\nMISC.\nTOTAL \nNON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON ALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.38\n6.05\n17.74\n9.91\n2.16\n9.76\n3.41\n2.1\n5.67\n1.38\n3.91\n66.47\n33.53\n100\n2010\n-2.0\n-6.1\n8.2\n-1.4\n0.6\n5.3\n-4.1\n-2.0\n3.4\n9.6\n-0.8\n2.7\n4.2\n3.1\n2011\n0.1\n1.5\n4.2\n3.1\n-0.3\n7.6\n0.9\n0.1\n3.9\n4.6\n4.3\n3.0\n3.8\n3.3\n2012\n-0.8\n0.8\n11.9\n2.3\n1.6\n2.0\n8.1\n0.8\n8.9\n6.2\n2.8\n3.5\n4.6\n3.7\n2013\n4.1\n-0.2\n4.5\n0.0\n2.9\n5.3\n-10.2\n-0.7\n10.7\n1.6\n0.8\n1.6\n1.7\n1.6\n2014\n1.9\n-0.4\n0.9\n-2.2\n0.7\n0.7\n-3.7\n-0.8\n16.0\n0.8\n-2.0\n1.2\n-3.1\n-0.2\n2015\n Jan\n0.5\n0.0\n-0.2\n-1.9\n1.2\n0.2\n-13.7\n-0.4\n4.3\n-2.2\n-1.8\n-0.6\n-2.7\n-1.3\nFeb\n0.7\n-0.3\n-0.1\n-1.9\n1.1\n-0.3\n-13.8\n-0.6\n4.1\n-2.4\n-1.8\n-0.7\n-2.9\n-1.4\nMar\n0.9\n-0.5\n0.6\n-1.8\n1.0\n-0.3\n-13.8\n-0.5\n4.3\n-2.3\n-1.4\n-0.4\n-2.8\n-1.2\nApr\n0.6\n-1.1\n-2.6\n-1.5\n0.8\n-0.8\n-13.9\n-0.9\n-7.0\n-0.8\n-1.4\n-2.5\n-2.9\n-2.6\nMay\n0.3\n-1.4\n-2.4\n-1.5\n0.9\n-1.2\n-13.9\n-0.9\n-7.1\n-0.8\n-1.4\n-2.6\n-3.0\n-2.7\nJun\n0.7\n-1.5\n-2.4\n-1.6\n0.5\n-1.1\n-13.9\n-0.9\n-7.1\n-0.8\n-1.4\n-2.6\n-3.3\n-2.8\nJul\n0.8\n-1.6\n-3.2\n-2.4\n0.5\n-1.1\n-13.8\n-0.9\n-1.9\n-1.6\n-1.0\n-2.4\n-3.6\n-2.8\nAug\n0.6\n-1.5\n-3.2\n-2.4\n0.4\n-1.7\n-13.8\n-1.1\n-1.9\n-1.8\n0.1\n-2.4\n-3.6\n-2.8\nSep\n0.5\n-1.7\n-4.2\n-2.6\n0.2\n-2.5\n-14.0\n-1.0\n-1.9\n-0.1\n-0.3\n-2.8\n-3.7\n-3.1\nOct\n-0.1\n-2.0\n-4.3\n-2.8\n0.9\n-2.6\n-14.0\n-1.1\n-1.9\n-0.3\n-0.2\n-3.0\n-4.0\n-3.3\nNov\n-0.5\n-2.3\n-4.3\n-2.9\n0.8\n-2.8\n-14.2\n-1.1\n11.1\n0.3\n-0.3\n-1.8\n-3.9\n-2.5\nDec\n-0.9\n-2.4\n-4.3\n-2.9\n0.6\n-3.2\n-14.2\n-0.9\n11.1\n0.4\n-0.4\n-1.9\n-3.7\n-2.5\n2016\nJan\n-0.8\n-2.4\n-4.4\n-3.3\n0.4\n-2.7\n-0.9\n-1.1\n11.2\n0.8\n-1.0\n-1.3\n-4.0\n-2.2\nFeb\n-1.2\n-2.1\n-4.4\n-3.4\n0.2\n-2.6\n-1.0\n0.2\n11.2\n1.0\n-1.2\n-1.4\n-4.0\n-2.2\nMar\n-1.4\n-2.0\n-5.4\n-4.0\n0.1\n-2.9\n-0.6\n-1.0\n14.9\n0.2\n-1.9\n-1.4\n-4.1\n-2.3\nApr\n-1.4\n-1.4\n-2.1\n-3.9\n0.2\n-2.7\n-0.5\n-0.9\n14.2\n-0.3\n-2.2\n-0.5\n-4.0\n-1.6\nMay\n-1.5\n-1.2\n-2.2\n-3.8\n-0.1\n-2.6\n-2.1\n-0.8\n14.2\n-0.2\n-2.1\n-0.5\n-4.1\n-1.7\nJun\n-1.8\n-1.4\n-1.6\n-3.7\n0.2\n-2.7\n-2.1\n-0.9\n17.2\n0.2\n-2.1\n-0.1\n-4.0\n-1.4\nSource :ZIMSTATS,2016\nTABLE 5.6 : ANNUAL INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \\1\n( DECEMBER 2012 = 100)\nNON-FOOD INFLATION\n \n \n \nS21 \n \n \n \n \n \n \n \n \n \nEnd of\nJun-15\nJul-15\nAug-15\nSep-15 Oct-15\nNov-15\nDec-15\nJan-16\nFeb-16\nMar-16\nApr-16\nMay-16\nJun-16\nMerchandise Imports (excl. energy)\n304.8\n \n294.0\n \n221.7\n \n339.1\n \n302.0\n \n272.3\n \n264.4\n \n240.3\n \n225.0\n \n212.1\n \n232.4\n \n172.9\n \n247.2\n \n- Consumption Goods\n162.8\n \n158.0\n \n138.1\n \n184.1\n \n153.2\n \n141.6\n \n141.9\n \n128.3\n \n119.4\n \n113.5\n \n109.4\n \n86.8\n \n115.5\n \n- Capital Goods\n90.4\n \n85.8\n \n38.8\n \n109.6\n \n102.6\n \n93.6\n \n73.2\n \n68.0\n \n67.0\n \n65.6\n \n62.6\n \n44.8\n \n66.7\n \n- Intermediate Goods\n51.6\n \n50.2\n \n44.8\n \n45.4\n \n46.2\n \n37.1\n \n49.3\n \n44.0\n \n38.7\n \n33.0\n \n60.4\n \n41.3\n \n65.1\n \nEnergy (Fuel & Electricity)\n85.0\n \n89.1\n \n65.4\n \n127.0\n \n70.6\n \n71.2\n \n76.1\n \n62.9\n \n62.7\n \n56.2\n \n59.1\n \n42.6\n \n76.3\n \nService Payments\n116.1\n \n126.7\n \n140.6\n \n127.3\n \n129.9\n \n109.6\n \n133.4\n \n111.1\n \n89.5\n \n91.5\n \n102.5\n \n104.0\n \n85.2\n \n- Technical, Professional & consult\n65.1\n \n61.4\n \n48.3\n \n63.6\n \n76.0\n \n56.6\n \n76.6\n \n46.7\n \n38.1\n \n42.3\n \n59.7\n \n64.1\n \n39.8\n \n- Software\n5.2\n \n6.3\n \n4.4\n \n4.7\n \n5.2\n \n5.6\n \n5.7\n \n7.2\n \n6.8\n \n5.4\n \n5.0\n \n5.5\n \n10.1\n \n- Other (tourism, edu, freight etc)\n45.8\n \n59.0\n \n87.8\n \n59.0\n \n48.8\n \n47.4\n \n51.1\n \n57.2\n \n44.6\n \n43.8\n \n37.8\n \n34.4\n \n35.3\n \nIncome Payments (Profits, Dividends\n47.4\n \n63.6\n \n46.5\n \n38.2\n \n26.0\n \n24.7\n \n29.0\n \n22.4\n \n17.6\n \n12.7\n \n18.4\n \n6.4\n \n25.9\n \nCapital Remittances (outward)\n113.5\n \n84.1\n \n54.2\n \n88.2\n \n72.0\n \n85.1\n \n78.4\n \n71.4\n \n61.6\n \n65.9\n \n55.6\n \n45.6\n \n37.8\n \n- External Loan Repayments \n91.6\n \n68.8\n \n44.9\n \n60.8\n \n55.1\n \n54.9\n \n59.9\n \n48.1\n \n43.0\n \n55.0\n \n45.2\n \n35.5\n \n21.4\n \n- Foreign Investment\n21.9\n \n15.2\n \n9.3\n \n27.4\n \n16.9\n \n30.1\n \n18.5\n \n23.3\n \n18.6\n \n10.9\n \n10.4\n \n10.1\n \n16.4\n \nOther Payments\n0.3\n \n1.0\n \n0.9\n \n0.6\n \n1.6\n \n0.7\n \n0.7\n \n0.5\n \n1.0\n \n0.8\n \n1.0\n \n0.2\n \n0.5\n \nTOTAL\n667.1\n \n658.4\n \n529.3\n \n720.5\n \n602.2\n \n563.5\n \n582.0\n \n508.5\n \n457.4\n \n439.2\n \n469.2\n \n371.7\n \n472.8\n \nSource: Reserve Bank of Zimbabwe, 2016\nTable 6.1: Monthly Cross Border Payments (US$ Millions)\n \n \n \nS22 \n \n \n \n \n \n \nAgriculture\nHorticulture Manufacturing\nMining\nTobacco\nTourism\n Transport & \nOther Services\nTotal\nEnd of \nTelecom\nJan-15\n14.6\n \n2.2\n \n31.4\n \n214.0\n \n108.3\n \n7.3\n \n39.8\n \n0.7\n \n418.1\n \nFeb-15\n14.4\n \n1.0\n \n27.4\n \n142.2\n \n55.8\n \n7.6\n \n44.6\n \n0.1\n \n293.1\n \nMar-15\n18.4\n \n3.3\n \n25.2\n \n161.9\n \n27.9\n \n10.1\n \n31.3\n \n0.4\n \n278.4\n \nApr-15\n8.9\n \n1.9\n \n17.4\n \n166.0\n \n63.1\n \n10.6\n \n38.0\n \n2.0\n \n307.8\n \nMay-15\n10.3\n \n1.8\n \n22.8\n \n154.0\n \n25.4\n \n12.5\n \n16.4\n \n0.1\n \n243.2\n \nJun-15\n10.6\n \n1.3\n \n21.9\n \n195.9\n \n14.1\n \n12.6\n \n27.7\n \n2.7\n \n286.8\n \nJul-15\n12.6\n \n2.3\n \n30.3\n \n100.1\n \n16.1\n \n16.7\n \n26.0\n \n0.5\n \n204.5\n \nAug-15\n11.7\n \n1.5\n \n14.1\n \n148.4\n \n17.8\n \n16.1\n \n17.0\n \n0.3\n \n226.9\n \nSep-15\n18.1\n \n2.9\n \n28.0\n \n150.1\n \n66.2\n \n15.7\n \n22.8\n \n0.5\n \n304.2\n \nOct-15\n10.2\n \n2.1\n \n23.8\n \n56.6\n \n21.9\n \n14.0\n \n39.2\n \n9.3\n \n177.1\n \nNov-15\n8.5\n \n2.8\n \n19.2\n \n68.2\n \n36.0\n \n11.0\n \n144.1\n \n0.4\n \n290.1\n \nDec-15\n19.3\n \n1.7\n \n23.8\n \n231.4\n \n32.3\n \n10.0\n \n21.4\n \n0.2\n \n339.9\n \nJan-16\n10.4\n \n1.9\n \n12.0\n \n149.9\n \n121.6\n \n0.00\n15.3\n \n3.4\n \n296.7\n \nFeb-16\n15.4\n \n2.2\n \n11.3\n \n64.6\n \n42.5\n \n4.9\n \n20.6\n \n1.9\n \n136.6\n \nMar-16\n15.5\n \n2.2\n \n10.5\n \n202.9\n \n29.9\n \n4.7\n \n23.0\n \n7.9\n \n262.1\n \nApr-16\n7.9\n \n2.9\n \n7.2\n \n69.2\n \n84.3\n \n9.9\n \n12.3\n \n0.2\n \n193.9\n \nMay-16\n9.2\n \n2.3\n \n13.0\n \n206.9\n \n21.9\n \n14.5\n \n20.2\n \n0.2\n \n288.2\n \nJun-16\n6.9\n \n1.7\n \n9.2\n \n101.4\n \n18.4\n \n13.2\n \n18.4\n \n4.0\n \n173.2\n \nSource: Reserve Bank of Zimbabwe, 2016\nTable 6.2: Monthly Cross Border Receipts (Millions)\n \n \n \nS23 \n \n \n \n \n \n \nEnd of\n2001\n2002\n2003\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\nLong-Term External Debt\n3,255\n3,327\n3,644\n3,927\n3,805\n3,965\n4,032\n4,464\n4,951\n5,175\n6,096\n6,607\n7,370\n8,444\n8,426\nGovernment\n2,328\n2,376\n2,617\n2,844\n2,895\n3,024\n3,054\n3,464\n4,037\n4,095\n4,638\n4,929\n5,012\n4,522\n5,293\nBilateral Creditors\n1,115\n1,107\n1,255\n1,455\n1,438\n1,520\n1,520\n1,863\n2,308\n2,325\n2,597\n2,694\n2,928\n2,445\n3,310\nMultilateral Creditors\n1,213\n1,269\n1,362\n1,389\n1,457\n1,504\n1,524\n1,592\n1,729\n1,770\n2,041\n2,235\n2,084\n2,078\n1,982\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n10\n10\n0\n0\n0\n0\n0\n0\n0\nPublic Enterprises\n568\n616\n698\n714\n709\n766\n790\n825\n857\n938\n1,092\n1,198\n1,356\n1,661\n1,220\nBilateral Creditors\n315\n351\n403\n442\n439\n464\n474\n497\n453\n238\n711\n703\n858\n1,155\n760\nMultilateral Creditors\n253\n265\n295\n272\n270\n302\n316\n327\n403\n700\n382\n495\n498\n506\n460\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\nMonetary Authorities\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\n120\n110\nMultilateral Creditors - IMF\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\n120\n110\nPrivate\n67\n56\n41\n78\n57\n45\n51\n35\n57\n142\n366\n480\n1,002\n2,261\n1,913\nShort-Term External Debt\n167\n183\n169\n144\n173\n281\n387\n226\n1,198\n1,382\n1,286\n891\n1,564\n2,394\n2,258\nSupplier's Credits\n13\n26\n51\n69\n107\n122\n178\n41\n193\n286\n134\n30\n0\n0\n0\nReserve Bank\n642\n642\n615\n615\n614\n587\n587\nPrivate\n154\n157\n118\n75\n66\n159\n209\n185\n363\n454\n537\n246\n950\n1,807\n1,671\nTotal External Debt\n3,422\n3,510\n3,812\n4,071\n3,978\n4,246\n4,607\n4,690\n6,289\n6,695\n7,382\n7,498\n8,934\n10,838\n10,684\nSource: Ministry of Finance & Economic Development, 2016 ; Reserve Bank of Zimbabwe, 2016\nTABLE 6.3: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR \n(US$ millions)\n \n \n \nS24 \n \n \n \n \n \nEnd of\n2001\n2002\n2003\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n(US$ millions)\nTotal Medium to Long-Term External Debt\n3,255\n3,327\n3,644\n3,927\n3,805\n3,965\n4,032\n4,464\n5,091\n5,313\n6,096\n6,607\n7,370\n8,444\n8,426\nPublic and Publicly Guaranteed Debt \n3,188\n3,271\n3,603\n3,849\n3,748\n3,920\n3,981\n4,429\n5,676\n5,813\n6,345\n6,742\n6,982\n6,768\n7,100\nBilateral Creditors\n1,430\n1,458\n1,658\n1,897\n1,877\n1,984\n1,994\n2,360\n2,761\n2,563\n3,307\n3,397\n3,786\n3,479\n3,960\nMultilateral Creditors\n1,758\n1,813\n1,945\n1,952\n1,871\n1,936\n1,976\n2,059\n2,272\n2,608\n2,423\n2,730\n2,582\n2,704\n2,553\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n10\n10\n0\n0\n0\n0\n0\n0\n0\nPrivate Non-Guaranteed Long term\n67\n56\n41\n78\n57\n45\n51\n35\n57\n142\n366\n480\n1,002\n2,261\n1,913\nShort-Term External Debt\n167\n183\n169\n144\n173\n281\n387\n226\n1198\n1382\n1,286\n891\n1,564\n2,394\n2,258\n Public and Publicly Guaranteed Debt\n13\n26\n51\n69\n107\n122\n178\n41\n193\n286\n134\n30\n0\n0\n0\n Reserve Bank\n642\n642\n615\n615\n614\n587\n587\n Private\n154\n157\n118\n75\n66\n159\n209\n185\n363\n454\n537\n246\n950\n1,807\n1,671\nTotal External Debt\n3,422\n3,510\n3,812\n4,071\n3,978\n4,246\n4,419\n4,690\n6,289\n6,695\n7,382\n7,498\n8,934\n10,838\n10,684\nGross Domestic Product\n10,887\n6,715\n5,037\n4,299\n2,918\n6,645\n4,000\n3,175\n8157\n9457\n10,956\n12,472\n12,973\n14,068\n13,891\nExternal Debt / GDP\n31.4%\n52.3%\n75.7%\n94.7%\n136.3%\n63.9%\n110.5%\n147.7%\n77.1%\n70.8%\n67.4%\n60.1%\n68.9%\n77.0%\n76.9%\nSource: Ministry of Finance & Economic Development, 2016 ; Reserve Bank of Zimbabwe, 2016\nTABLE 6.4: External Debt Outstanding by Source\n(US$ millions)\n \n \n \n \n \nTABLE 6.5 EXTERNAL DEBT SERVICE AND DEBT SERVICE RATIOS\n (US$ MILLIONS)\nEnd of\n2009\n2010\n2011\n2012\n2013\n2014\n2015\nGovernment\n170\n188\n170\n172\n240\n240\n173.3\nCapital\n131\n154\n142\n136\n156\n156\n130.4\nInterest\n39\n34\n28\n36\n84\n84\n43\nParastatals\n43\n36\n30\n0\n0\n0\n0\nCapital\n34\n29\n25\n0\n0\n0\n0\nInterest\n8\n7\n5\n0\n0\n0\n0\nPrivate\n51\n50\n239\n359\n360\n315\n418.1\nCapital\n45\n43\n178\n281\n315\n270\n255\nInterest\n6\n8\n60\n78\n45\n45\n163.1\nTotal\n264\n274\n438\n530\n600\n555\n591.4\nCapital\n211\n226\n345\n417\n471\n426\n385.4\nInterest\n53\n48\n94\n114\n129\n129\n206\nExports of Goods\nand Services\n1591\n3541\n4771\n4076\n3849\n4480\n3841.9\nDebt Service ratio\n16.6%\n7.7%\n9.2%\n13.0%\n15.6%\n12.4%\n15%\nCapital Service Ratio\n13%\n6%\n7%\n10%\n12%\n10%\n10%\nInterest Service ratio\n3%\n1%\n2%\n3%\n3%\n3%\n5%\nNote: Figures reflect scheduled debt service.\n \nSource: Ministry of Finance & Economic Development, 2016 ; Reserve Bank of Zimbabwe, 2016\n \n \n \nS26 \n \n \n \n \n \n \n \n \n TABLE 7.1: REAL GROSS DOMESTIC AND NATIONAL PRODUCT PER CAPITA AT MARKET PRICES\n US$ Millions\n Gross\nNet Investment Gross\n Gross\n Gross\n Domestic\nIncome Paid\n National\n Domestic National\nGross Domestic\nGross national\nEnd of\n Product\nto Other\n Product\n Product Product\nProduct\nProduct\nPeriod\nCountries\n \n2009\n8,157.1\n-83.6\n8,073.5\n8,157.1\n8,073.5\n667.0\n660.1\n2010\n9,456.8\n-84.8\n9,372.0\n9,085.0\n9,042.7\n736.2\n732.8\n2011\n10,956.2\n-210.4\n10,745.8\n10,166.6\n10,066.7\n815.9\n807.9\n2012\n12,472.4\n-217.9\n12,174.8\n11,240.8\n11,120.6\n860.7\n851.5\n2013\n13,490.2\n-225.7\n13,264.6\n11,744.8\n11,602.1\n874.5\n863.9\n2014\n14,197.0\n-1,116.4\n13,483.2\n12,197.0\n11,172.9\n885.1\n810.8\n \n \n Source : Zimstat, 2016\nCurrent Prices\nConstant Prices\n Constant Prices\nPer Capita\n \n \n \nS27 \n \n \n \n \n \n \n \n \n \nAgriculture\n Mining \nElectricity\nFinance\nDistribution\n Transport\n Public\nHunting and\n and\nManufacturing and\nConstruction\n and\n Real\nHotels and\nand\nAdministration\n Other\nEnd of\n Fishing\n Quarrying\n Water\nInsurance Estate Restaurants Communication\nEducation\nHealth\n Services\nTotal\n \n2009\n1038\n802\n1066\n279\n137\n572\n110\n1207\n1080\n186\n210\n35\n342\n7065\n2010\n1157\n802\n1109\n359\n182\n638\n126\n1376\n1137\n292\n304\n102\n390\n7974\n2011\n1222\n1006\n1293\n436\n289\n704\n193\n1397\n1320\n321\n518\n109\n453\n9261\n2012\n1377\n1064\n1420\n448\n376\n943\n303\n1601\n1334\n383\n710\n119\n416\n10494\n2013\n1364\n1187\n1457\n492\n399\n1073\n341\n1909\n1374\n402\n879\n123\n400\n11400\n \n \n2014\n1704\n1157\n1450\n546\n426\n1154\n385\n1927\n1478\n436\n1021\n125\n404\n12213\n Source : Zimstat, 2016\n2 . Includes domestic services and allowance for imputed banking service charges .\nTABLE 7.2 : GROSS DOMESTIC PRODUCT AT FACTOR COST BY INDUSTRY\n US$ Millions\n (at current prices )\n \n \n \nS28 \n \n \n \n \n Net\n Private\n Gross\n Net\nExpenditure\n Private\n Gvt\n non-profit\n fixed\n Increase\n Total\n export of\n on gross\n consumption current\n making\n captital\n in\n Statistical\n domestic\n goods and\n domestic\nEnd of\nexpenditure bodies\n formation\n stocks\ndiscrepancy\n expenditure\n services\n product\n2009\n9,797.5\n672.4\n412.7\n959.7\n272.3\n0.0\n12,114.7\n-3,957.6\n8,157.1\n2010\n8,150.0\n1,078.6\n543.5\n2,048.5\n210.9\n0.0\n12,064.5\n-2,619.2\n9,445.3\n2011\n11,182.1\n1,804.8\n555.0\n2,063.8\n389.6\n0.0\n15,995.3\n-5,039.0\n10,956.2\n2012\n11,761.0\n1,978.6\n566.5\n2,079.2\n-392.2\n0.0\n15,993.1\n-3,600.3\n12,392.8\n2013\n13,027.2\n2,113.2\n788.6\n1,752.8\n5.4\n0.0\n17,687.1\n-4,196.9\n13,490.2\n2014\n11,521.7\n3,415.2\n992.3\n1,873.4\n5.8\n0.0\n18,211.0\n-3,611.4\n14,196.9\n Source : Zimstat, 2016\n(at current prices)\nUS$ Millions\nTABLE 7.3: EXPENDITURE ON GROSS DOMESTIC PRODUCT/1\n \n \n \n \n \n \n \n \nEnd of\n Gold\nPlatinum\nPalladium\nNickel\nCopper\nCoal\nChrome\nRhodium Other/1\nTotal\n2009\n157.2\n239.1\n0.0\n62.2\n15.4\n58.0\n18.4\n24.1\n47.0\n621.3\n2010\n380.4\n409.1\n100.7\n111.2\n28.5\n97.0\n56.9\n50.3\n12.9\n1246.9\n2011\n655.7\n538.3\n178.3\n175.5\n50.9\n103.9\n73.1\n52.4\n25.8\n1853.9\n2012\n782.8\n464.5\n148.6\n112.4\n39.2\n75.8\n49.0\n31.2\n22.2\n1723.9\n2013\n622.0\n554.0\n205.8\n158.1\n44.2\n90.8\n35.9\n32.9\n17.9\n1761.1\n2014\n615.8\n495.3\n212.5\n202.4\n39.9\n88.3\n40.3\n35.6\n149.1\n1850.7\n2014\nJan\n44.0\n42.4\n16.7\n15.2\n3.6\n7.7\n3.2\n2.4\n12.7\n137.0\nFeb\n42.7\n41.4\n17.1\n15.4\n3.3\n7.4\n3.6\n2.6\n14.0\n134.6\nMar\n48.9\n39.9\n16.6\n11.2\n3.0\n8.1\n3.9\n2.6\n5.7\n135.3\nApr\n47.5\n39.8\n1.7\n14.7\n3.1\n0.0\n4.2\n2.7\n1.3\n115.0\nMay\n47.9\n47.6\n21.5\n20.9\n3.8\n9.5\n3.1\n3.0\n14.7\n172.1\nJun\n46.5\n52.4\n24.7\n22.5\n3.8\n6.3\n3.4\n4.3\n14.9\n178.7\nJul\n56.2\n40.5\n19.1\n18.7\n3.2\n7.3\n3.0\n2.7\n16.0\n166.5\nAug\n54.2\n44.6\n21.5\n19.8\n3.5\n7.8\n3.0\n3.2\n16.2\n173.8\nSep\n60.7\n39.8\n19.5\n19.7\n2.4\n8.4\n2.7\n3.1\n15.9\n172.3\nOct\n53.0\n33.1\n16.1\n13.5\n3.1\n8.8\n3.2\n2.7\n13.6\n147.1\nNov\n49.2\n38.6\n19.6\n16.0\n3.5\n8.7\n3.4\n3.3\n12.2\n154.5\nDec\n64.9\n35.4\n18.3\n14.8\n3.5\n8.2\n3.6\n3.0\n12.0\n163.7\n2015\nJan\n48.6\n35.4\n17.8\n13.6\n3.1\n9.6\n2.0\n3.0\n8.0\n141.0\nFeb \n50.7\n35.8\n18.3\n16.0\n2.9\n8.4\n2.1\n3.0\n9.1\n146.4\nMar\n62.4\n31.5\n17.0\n15.1\n2.9\n6.1\n1.6\n2.7\n8.2\n147.5\nApr\n56.5\n33.8\n17.9\n13.2\n3.0\n4.3\n1.1\n2.8\n7.8\n140.4\nMay\n56.0\n28.1\n15.2\n12.2\n2.8\n5.1\n1.3\n2.3\n8.1\n131.1\nJun\n66.0\n20.5\n10.7\n8.8\n2.4\n5.6\n1.5\n1.6\n8.8\n125.9\nSource: Zimstat, 2016\n1. Other minerals include Ferrosilicon, Iron ore, Iron pyrites and magnesite\nTable 7.4: MINERAL PRODUCTION\nUS$ Millions\n \n \n \nEnd of\nBy Hwange \nPower station\nBy Kariba \nPower \nStation\nBy Other \nPower Station\nIPPs\nTotal from \nZimbabwe\n2010\n2,635.6\n \n5,762.8\n \n74.5\n \n-\n8,472.9\n \n2011\n3,420.0\n \n5,201.8\n \n397.4\n \n-\n9,019.2\n \n2012\n3,133.2\n \n5,387.3\n \n442.1\n \n-\n8,962.7\n \n2013\n3,826.9\n \n4,981.8\n \n506.1\n \n-\n9,314.8\n \n2014\n3,460.2\n \n5,402.4\n \n559.3\n28.9\n \n9,814.9\n \n2015\n3,945.9\n \n4,939.2\n \n583.1\n \n43.0\n \n9,511.2\n \n2015\nJan\n322.2\n418.5\n49.7\n2.6\n792.9\nFeb\n202.0\n376.2\n44.2\n2.6\n625.0\nMar\n228.6\n463.8\n50.5\n2.6\n745.5\nApr\n254.7\n446.6\n42.3\n10.8\n754.4\nMay\n262.3\n492.8\n51.3\n6.3\n812.7\nJun\n395.1\n465.0\n47.5\n3.9\n911.5\nJul\n470.1\n470.0\n58.4\n3.3\n1001.8\nAug\n369.4\n491.7\n50.0\n2.4\n913.5\nSep\n357.2\n341.0\n51.5\n2.4\n752.1\nOct\n339.9\n360.1\n45.2\n1.9\n747.1\nNov\n382.5\n303.6\n45.4\n2.4\n733.9\nDec\n361.9\n309.9\n47.2\n1.8\n720.8\n2016\nJan\n367.3\n281.5\n38.5\n3.8\n691.1\nSource:Zimstat ,2016\nTable 7.5: Electricity Energy Produced and Distributed\nInterconnected System\nGeneration Sent Out\n \n \n \nS31 \n \n(2009=100)\nFood-stuffs \n(including \nstockfeeds)\nDrink and \nTobacco\nTextiles \nincluding \nginning\nClothing \nand \nFootwear\nWood and \nFurniture\nPaper, \nPrinting and \nPublishing\nChemical and \nPetroleum \nProducts\nNon-metalic \nMineral Products\nMetals and \nMetal Products\nTransport and \nTransport \nEquipment\nOther \nManufacturing \nGroups\nAll \nManufacturing \nGroups\nWeight\n252\n118\n28\n79\n24\n68\n172\n46\n103\n20\n89\n1000\n2011\n100.7\n112.5\n107.4\n88.3\n97.0\n116.5\n101.3\n111.5\n102.5\n97.8\n103.2\n103.2\n2012\n101.4\n108.1\n117.5\n95.2\n90.7\n106.8\n96.1\n106.9\n82.4\n101.1\n97.1\n99.3\n2013\n98.7\n88.8\n86.1\n94.3\n104.8\n104.0\n98.8\n121.6\n76.3\n100.7\n82.5\n94.7\n2014\n98.3\n97.2\n80.4\n82.1\n104.4\n101.3\n90.4\n131.1\n69.8\n61.8\n68.5\n91.4\n2014:Jan\n86.0\n65.7\n47.6\n82.7\n89.2\n99.9\n90.4\n110.7\n63.9\n60.9\n43.6\n78.6\nFeb\n92.8\n88.8\n64.7\n87.1\n94.4\n115.0\n98.7\n122.3\n76.6\n67.5\n56.8\n89.6\nMar\n87.6\n83.2\n61.3\n93.6\n86.0\n104.2\n92.0\n108.8\n69.7\n60.9\n48.5\n83.8\nApr\n93.6\n92.7\n53.5\n92.7\n98.6\n100.0\n92.9\n108.5\n73.7\n65.0\n47.3\n86.6\nMay\n94.5\n87.6\n66.8\n82.4\n83.8\n95.0\n82.6\n114.4\n65.3\n56.5\n56.8\n83.5\nJun\n98.9\n97.9\n93.6\n88.0\n89.7\n108.3\n94.0\n138.5\n68.0\n58.1\n63.3\n92.0\nJul\n103.9\n115.8\n124.7\n61.0\n103.2\n92.9\n90.4\n147.6\n69.5\n59.2\n66.7\n93.7\nAug\n95.6\n113.6\n116.1\n64.4\n101.6\n92.0\n88.8\n142.3\n70.1\n58.0\n65.6\n90.7\nSep\n117.4\n124.7\n114.8\n85.2\n102.6\n97.2\n88.0\n154.0\n69.4\n60.5\n72.4\n100.5\nOct\n119.5\n95.5\n99.2\n89.9\n143.0\n79.3\n89.3\n142.3\n74.8\n65.0\n59.5\n96.4\nNov\n98.1\n109.4\n84.4\n96.5\n163.7\n101.1\n87.2\n153.6\n78.3\n67.7\n97.2\n98.6\nDec\n105.7\n107.9\n72.4\n81.7\n92.5\n97.6\n89.3\n132.0\n65.9\n58.2\n63.1\n91.8\n2015:Jan\n97.3\n109.0\n67.1\n79.1\n84.3\n97.4\n89.7\n135.0\n66.1\n58.6\n64.8\n89.6\nFeb\n121.3\n121.7\n75.3\n97.9\n179.0\n107.3\n97.5\n153.2\n73.5\n65.6\n74.0\n105.7\nMar \n105.4\n110.3\n67.8\n91.0\n145.7\n96.3\n85.6\n141.0\n67.0\n59.6\n68.0\n94.1\nApr\n101.4\n114.7\n69.2\n88.4\n152.4\n99.5\n84.9\n146.5\n70.1\n61.5\n69.2\n94.5\nMay\n104.4\n110.9\n67.2\n85.6\n160.2\n95.7\n82.9\n141.1\n68.2\n59.9\n67.0\n93.4\nJun\n102.4\n113.7\n67.7\n91.2\n171.3\n97.3\n84.1\n145.7\n70.7\n62.5\n69.8\n95.1\nSource:Zimstat ,2016\nTABLE 7.6: VOLUME OF MANUFACTURING INDEX (VMI)\n \n \n \nS32 \n \n \n \n \n(2009=100)\nFood-stuffs \n(including \nstockfeeds)\nDrink and \nTobacco\nTextiles \nincluding \nginning\nClothing \nand \nFootwear\nWood and \nFurniture\nPaper, \nPrinting and \nPublishing\nChemical and \nPetroleum \nProducts\nNon-metalic \nMineral Products\nMetals and \nMetal Products\nTransport and \nTransport \nEquipment\nOther \nManufacturing \nGroups\nAll \nManufacturing \nGroups\nWeight\n252\n118\n28\n79\n24\n68\n172\n46\n103\n20\n89\n1000\n2011\nMean\n100.7\n112.5\n107.4\n88.3\n97.0\n116.5\n101.3\n111.5\n102.5\n97.8\n103.2\n103.2\n2012\nMean\n101.4\n108.1\n117.5\n95.2\n90.7\n106.8\n96.1\n106.9\n82.4\n101.1\n97.1\n99.3\n2013\nMean\n98.7\n88.8\n86.1\n94.3\n104.8\n104.0\n98.8\n121.6\n76.3\n100.7\n82.5\n94.7\n2014\nMean\n98.3\n97.2\n80.4\n82.1\n104.4\n101.3\n90.4\n131.1\n69.8\n61.8\n68.5\n91.4\n2014:Jan\n86.0\n65.7\n47.6\n82.7\n89.2\n99.9\n90.4\n110.7\n63.9\n60.9\n43.6\n78.6\nFeb\n92.8\n88.8\n64.7\n87.1\n94.4\n115.0\n98.7\n122.3\n76.6\n67.5\n56.8\n89.6\nMar\n87.6\n83.2\n61.3\n93.6\n86.0\n104.2\n92.0\n108.8\n69.7\n60.9\n48.5\n83.8\nApr\n93.6\n92.7\n53.5\n92.7\n98.6\n100.0\n92.9\n108.5\n73.7\n65.0\n47.3\n86.6\nMay\n94.5\n87.6\n66.8\n82.4\n83.8\n95.0\n82.6\n114.4\n65.3\n56.5\n56.8\n83.5\nJun\n98.9\n97.9\n93.6\n88.0\n89.7\n108.3\n94.0\n138.5\n68.0\n58.1\n63.3\n92.0\nJul\n103.9\n115.8\n124.7\n61.0\n103.2\n92.9\n90.4\n147.6\n69.5\n59.2\n66.7\n93.7\nAug\n95.6\n113.6\n116.1\n64.4\n101.6\n92.0\n88.8\n142.3\n70.1\n58.0\n65.6\n90.7\nSep\n117.4\n124.7\n114.8\n85.2\n102.6\n97.2\n88.0\n154.0\n69.4\n60.5\n72.4\n100.5\nOct\n119.5\n95.5\n99.2\n89.9\n143.0\n79.3\n89.3\n142.3\n74.8\n65.0\n59.5\n96.4\nNov\n98.1\n109.4\n84.4\n96.5\n163.7\n101.1\n87.2\n153.6\n78.3\n67.7\n97.2\n98.6\nDec\n105.7\n107.9\n72.4\n81.7\n92.5\n97.6\n89.3\n132.0\n65.9\n58.2\n63.1\n91.8\n2015:Jan\n97.3\n109.0\n67.1\n79.1\n84.3\n97.4\n89.7\n135.0\n66.1\n58.6\n64.8\n89.6\nFeb\n121.3\n121.7\n75.3\n97.9\n179.0\n107.3\n97.5\n153.2\n73.5\n65.6\n74.0\n105.7\nMar \n105.4\n110.3\n67.8\n91.0\n145.7\n96.3\n85.6\n141.0\n67.0\n59.6\n68.0\n94.1\nApr\n101.4\n114.7\n69.2\n88.4\n152.4\n99.5\n84.9\n146.5\n70.1\n61.5\n69.2\n94.5\nMay\n104.4\n110.9\n67.2\n85.6\n160.2\n95.7\n82.9\n141.1\n68.2\n59.9\n67.0\n93.4\nJun\n102.4\n113.7\n67.7\n91.2\n171.3\n97.3\n84.1\n145.7\n70.7\n62.5\n69.8\n95.1\nSource:Zimstat ,2016\nTABLE 7.6: VOLUME OF MANUFACTURING INDEX (VMI)\n \n \n \nS33", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Quarterly_Economic_Reviews/qerjune2016.pdf"}
{"doc_id": "67a6925b59694eafa250caa56fe43f12", "text": "i \n \n \n \nNovember 2023 \n \n2 \nTABLE OF CONTENTS \n \nOVERVIEW .................................................................................................................................. 3 \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ........................................... 3 \nPrecious Metals .......................................................................................................................... 3 \nBase Metals ................................................................................................................................ 4 \nMERCHANDISE TRADE DEVELOPMENTS......................................................................... 5 \nSTOCK MARKET DEVELOPMENTS ................................................................................... 10 \nZimbabwe Stock Exchange (ZSE) ......................................................................................... 10 \nVictoria Falls Stock Exchange (VFEX) ................................................................................. 11 \nNATIONAL PAYMENTS SYSTEM ........................................................................................ 12 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ............................................. 12 \nMobile and Internet Based Transactions .............................................................................. 12 \nINFLATION OUTTURN ........................................................................................................... 12 \nMonthly Inflation .................................................................................................................... 13 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3 \n \nOVERVIEW \n \nThe annual headline inflation increased to \n21.6% in November 2023 reflecting a 3.8 \npercentage point gain from the 17.8% recorded \nin October 2023. The increase was attributed to \nboth food and non-food inflation. \n \nOn a month-on-month basis, broad money rose \nby 4.99% in November 2023, compared to \n6.85% in October 2023. The monthly increase \nin money supply is largely attributed to the \nexpansion of 15.80% in the local currency \ncomponent thereby reflecting credit creation by \nthe banking sector. \nThe average international prices for palladium, \nnickel, Brent crude oil and lithium declined, \nwhile gold, platinum, and copper prices \nincreased. Prices were weighed down by a \nstronger U.S. dollar. \nThe country exported merchandise worth \nUS$681.4 million in November 2023, whilst \nmerchandise imports amounted to US$827.3 \nmillion. This culminated in a trade deficit of \nminus US$145.9 million. \nDuring the month of November 2023, the \nZimbabwe Stock Exchange (ZSE) exhibited \nbullish sentiments. As such, All Share, Top 10, \nTop 15, Small Cap and Medium Cap indices \ngained 21.76%, 16.90%, 18.24%, 4.98% and \n32.62% respectively. \nThe Victoria Falls Stock Exchange (VFEX) \ntraded in a positive trajectory during the month \nof November 2023. As such, the All-Share \nindex gained 1.85% to close at 69.07 points, \nfrom 67.81 points recorded in October 2023. \n \nThe value of transactions processed through the \nNational Payment Systems (NPS) increased to \nZW$37.57 trillion in November 2023, from \nZW$32.53 trillion in the previous month. \nThe volumes of NPS transactions registered an \nincrease of 3% from 62.69 million in the \nprevious month to 64.45 million during the \nmonth under review. \n \nINTERNATIONAL \nCOMMODITY \nPRICE \nDEVELOPMENTS \n \nThe average international prices for palladium, \nnickel, Brent crude oil and lithium decreased, \nwhilst gold, platinum, and copper prices \nincreased. A relatively stronger U.S. dollar \nlargely weighed down commodity prices. \n \nPrecious Metals \n \n Gold \nGold prices increased by 3.71%, from \nUS$1,912.98 per ounce reported in October \n2023 to US$1,983.95 per ounce in November \n2023. The increase in gold prices was primarily \ndriven by the weakening of the U.S. dollar, \nwhich made precious metals more attractive to \ninvestors seeking a secure store of value and \ninvestment options. Investors turned to gold as \na haven and a reliable store of value. \n \n \n \n \n \n \n \n \n4 \n \n \nPlatinum \nPlatinum prices registered a 1.84% increase \nfrom US$891.91 per ounce in October 2023 to \nUS$908.30 per ounce in November 2023. The \nupward movement in prices was primarily \ndriven by market speculation, suggesting that \nthe Federal Reserve was approaching the \nconclusion of its cycle of raising interest rates. \n \nPalladium \nPalladium prices significantly declined due to \nthe initial market shock caused by widespread \nexpectations of an oversupply as electric \nvehicle adoption increases and automakers opt \nfor platinum over palladium for their catalytic \nconverters. \nPrices \nfell \nby \n8.59% \nto \nUS$1,045.73 per ounce during the reporting \nmonth, compared to US$1,144.02 per ounce \nrecorded in October 2023. \n \n \nFigure 1: Precious Metal Prices (US$/oz.) \nSource: Bloomberg, 2023 \n \n \n \n \n \n \nBase Metals \n \n \nCopper \nDuring the month under analysis, copper prices \ngained by 3.18%, from US$8,017.45 per tonne \nrecorded in the previous month to US$8,272.39 \nper tonne. Strong demand in China, the largest \nmetals consumer and decreased inventories \nsupported the prices of the red metal. \n \nNickel \nNickel \nprices \nfell \nby \n6.96%, \nfrom \nUS$18,492.27 per tonne recorded in the \nprevious month to US$17,204.77 per tonne, \nduring the month under analysis. Prices \nretreated due to waning demand, coupled with \nloss-making conditions from the stainless-steel \nsector, the main consumer of nickel, which led \nto wider production cuts, weighing down \nprices. Figure 2 shows base metals price \ndevelopments \nfrom \nNovember \n2020 \nto \nNovember 2023. \n \nFigure 2: Base Metal Prices (US$/ton) \nSource: Bloomberg, 2023 \n \n \n \n \n0.00\n200.00\n400.00\n600.00\n800.00\n1000.00\n1200.00\n1400.00\n1,100\n1,600\n2,100\n2,600\nNov-20\nMar-21\nJul-21\nNov-21\nMar-22\nJul-22\nNov-22\nMar-23\nJul-23\nNov-23\nGold\n8,000\n13,000\n18,000\n23,000\n28,000\n33,000\n38,000\n4,500\n6,500\n8,500\n10,500\n12,500\nNov-20\nJan-21\nMar-21\nMay-21\nJul-21\nSep-21\nNov-21\nJan-22\nMar-22\nMay-22\nJul-22\nSep-22\nNov-22\nJan-23\nMar-23\nMay-23\nJul-23\nSep-23\nNov-23\nCopper\n \n \n \n5 \n \nBrent Crude Oil \n \nBrent crude oil prices experienced a decline of \n7.45%, from a monthly average of US$88.67 \nper barrel in October 2023 to US$82.06 per \nbarrel in November 2023. This was, in large \npart, due to increasing oil supply and demand \nconcerns. \nFigure 3 shows Brent crude oil price \ndevelopments for the period from November \n2020 to November 2023 \n \nFigure 3: Crude Oil Prices (US$/barrel) \n \nSource: Bloomberg, 2023 \n \nLithium \nIn the month of November 2023, average \ninternational prices for lithium experienced a \nsignificant \ndecline \nof \n11.87%, \nfrom \nUS$23,870.45 per tonne in October 2023 to \nUS$21,036.36 per tonne. The decrease was \nprimarily attributed to two factors: a slowdown \nin electric vehicle sales in China and an \nincrease in the overall supply of lithium in the \nmarket. \nFurthermore, the deceleration in lithium prices \nwas also attributed to weak demand for battery \ncells from East Asia and Europe. The price \ndevelopments for lithium for the period from \nMarch 2023 to November 2023 are illustrated \nin Figure 4. \n \nFigure 4: Lithium Prices (US$/tonne) March \n– November 2023 \n \nLondon Metal Exchange, 2023 \n \nMERCHANDISE TRADE DEVELOPMENTS \n \nThe country’s total merchandise trade for \nNovember 2023 stood at US$1,508.7 million, \n13.0% lower than the US$1,734.2 million \nrecorded in the previous month. A decline in \nexports and imports underpinned the decrease \nin total trade. On a yearly basis, total \nmerchandise trade rose by 2.2%, from \nUS$1,476.4 \nmillion \nrecorded \nin \nthe \ncorresponding month in 2022. \n \nMerchandise Exports \nThe country exported merchandise worth \nUS$681.4 \nmillion \nin \nNovember \n2023, \ncompared to US$831.9 million recorded in the \nprevious month. The decline was mainly due to \ndecreases in gold and tobacco exports. The \nmonthly exports for November 2023 were 10% \nhigher than the US$674.6 million recorded in \n0\n20\n40\n60\n80\n100\n120\n140\nNov-20\nFeb-21\nMay-21\nAug-21\nNov-21\nFeb-22\nMay-22\nAug-22\nNov-22\nFeb-23\nMay-23\nAug-23\nNov-23\nUS$/barrel\n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nUS$/tonne\n \n \n \n6 \n \nthe corresponding month in 2022. Figure 5 \nshows \ndevelopments \nin \nthe \ncountry’s \nmerchandise exports from January 2022 to \nNovember 2023. \n \nFigure 5 shows the developments on the \ncountry's merchandise exports for the period \nfrom January 2022 to November 2023. \n[Figure 5: Merchandise Exports (US$ m) \n \nSource: ZIMSTAT, 2023 \n \nTobacco, PGMs, gold and ferrochromium \nremained the leading export commodities, \naccounting for 33.5%, 17.2%, 17.1%, and 5.4% \nof the export basket, respectively. Table 2 \nshows developments in the country’s exports \nfor the months of October and November 2023. \n \nTable 1 shows developments in the country’s \nexports for September and October 2023. \n \n \n \n \nTable 1: Exports Classified by Category \n \n \nOct-23 \n \n(US$m) \nNov-23 \n \n(US$m) \nOct-\nNov \nChanges \n(%) \nShare of \nExports \n(%) \nNov-23 \nTotal \n831.9 \n681.4 \n-18.1 \n100.0 \nOf Which: \n \n \n \n \nTobacco \n(Incl. \ncigarettes) \n234.9 \n228.1 \n-2.9 \n33.5 \nPGMs* \n99.1 \n117.1 \n18.2 \n17.2 \nGold \n181.8 \n116.3 \n-36.0 \n17.1 \nFerro-\nchromium \n41.0 \n36.9 \n-10.1 \n5.4 \nCoal \n5.0 \n8.3 \n66.7 \n1.2 \nCotton \n7.9 \n8.0 \n0.6 \n1.2 \nIndustrial \ndiamonds \n1.3 \n7.6 \n481.2 \n1.1 \nChromium \nores and \nconcentrate\ns \n9.3 \n6.2 \n-33.3 \n0.9 \nCane sugar \n3.9 \n5.2 \n32.6 \n0.8 \nCrocodiles \n0.2 \n4.3 \n2,259.6 \n0.6 \nSource: ZIMSTAT & RBZ Calculations, 2023 \n *PGMs Include Nickel mattes, nickel ores & \nconcentrates and platinum \n \nDuring the month under analysis, the country’s \nexports were absorbed mainly by China \n(32.3%), South Africa (22.5%), the United \nArab Emirates (19.6%) and other jurisdictions. \nFigure 6 shows the country’s major export \nmarkets during the reporting month. \n \n \n \n \n \n543.9\n438.0\n557.6\n587.3\n513.1\n541.0\n548.4\n493.6\n552.3\n502.3\n674.6\n427.7\n435.9\n515.3\n555.5\n654.2\n641.5\n603.2\n649.8\n678.1\n831.9\n681.4\n0.0\n100.0\n200.0\n300.0\n400.0\n500.0\n600.0\n700.0\n800.0\n900.0\n2022\n2023\n \n \n \n7 \n \nFigure 6: Top Ten Merchandise Export \nDestinations (% Share) \n \n \nSource: ZIMSTAT & RBZ Calculations, 2023 \n \nMerchandise Imports \n \nThe country’s merchandise imports bill for \nNovember 2023 amounted to US$827.3 \nmillion, reflecting an 8.3% decrease from \nUS$902.3 million recorded in the previous \nmonth, as shown in Figure 7. \nFigure 7: Merchandise Imports classified by \nHS Codes (US$ m) \n \n \nSource: ZIMSTAT & RBZ Computations, 2023 \n \nThe major import drivers during the month \nunder review were diesel, petrol (leaded), and \nfertilisers, accounting for 11.0%, 5.1%, and \n3.9% of total imports, respectively. Table 2 \nshows imports of major commodities for \nOctober and November 2023. \nTable 2: Imports Classified by Category \n \nOct-23 \n \n(US$m) \nNov-23 \n(US$m) \nOct-Nov \nChanges \n(%) \nShare \nof Total \nImports \n(%) \nNov 23 \nTotal \n902.3 \n827.3 \n-8.3 \n100.0 \nOf Which: \n \n \n \n \nDiesel \n82.5 \n91.0 \n10.4 \n11.0 \nLeaded \npetrol \n34.2 \n42.5 \n24.2 \n5.1 \nFertilisers \n33.7 \n32.1 \n-4.8 \n3.9 \nRice \n5.3 \n20.8 \n295.6 \n2.5 \nMaize \n19.0 \n20.6 \n8.3 \n2.5 \nMedicaments \n8.1 \n19.4 \n137.9 \n2.3 \nCrude soya \nbean oil \n19.0 \n16.0 \n-15.7 \n1.9 \nElectricity \n11.2 \n10.5 \n-6.2 \n1.3 \nWheat \n7.7 \n10.0 \n30.3 \n1.2 \nBase stations \n5.3 \n9.9 \n87.6 \n1.2 \nSource: ZIMSTAT & RBZ Calculations, 2023 \nThe country’s imports for November 2023 \nwere mainly obtained from South Africa \n(39.3%), China (11.3%), Bahrain (8.4%), \nBahamas (5.1%) and other markets, as shown \nin Figure 8. \n \n \n \n \n \n \n \n32.3\n22.5\n19.6\n4.4\n2.9\n2.4\n2.3\n2.0\n1.8\n1.7\n0.0\n10.0\n20.0\n30.0\n40.0\nChina\nSouth Africa\nUnited Arab Emirates\nBelgium\nMozambique\nZambia\nKorea\nIndia\nHong Kong\nIndonesia\n0\n200\n400\n600\n800\n1000\n2022\n2023\n \n \n \n8 \n \nFigure 8: Top Ten Merchandise Import \nSources (% Share) \n \n \nSource: ZIMSTAT & RBZ Calculations, 2023 \n \nMerchandise Trade Balance \nIn November 2023, the country's net external \ntrade position remained in negative territory, \nwith a trade deficit of US$146.0 million, higher \nthan the previous month's deficit of US$70.5 \nmillion. On a year-on-year basis, the country's \ntrade deficit also widened, increasing from \nUS$127.2 million in November 2022 to \nUS$146.0 million in November 2023. \n \nFigure 9 shows the country’s trade balance for \nthe period from March to November 2023. \n \n \n1All monetary numbers valued in ZW$ since the \nadoption of an interbank market determined exchange \nrate in February 2019. \nFigure 9: Merchandise Trade Balance \n(US$ m) \n \nSource: ZIMSTAT & RBZ Computations, 2023 \n \nMONETARY DEVELOPMENTS1 \n \nBroad \nmoney \n(M3) \nstock \nstood \nat \nZW$17,628.18 billion in November 2023, \ncompared to ZW$16,790.29 billion recorded in \nOctober 2023. \nThe money stock was composed of foreign \ncurrency deposits, 77.04% local currency \ndeposits, 22.89% and local currency in \ncirculation, 0.07%. \n \n \n \n \n39.3\n11.3\n8.4\n5.1\n3.8\n3.5\n3.3\n3.2\n2.7\n1.8\nSouth Africa\nChina\nBahrain\nBahamas\nIndia\nUnited Arab Emirates\nMozambique\nMauritius\nZambia\nHong Kong\n-231.1\n-153.0-196.1-85.9-179.7-175.1-98.1 -70.5-146.0\n-400.0\n-200.0\n0.0\n200.0\n400.0\n600.0\n800.0\n1000.0\nMar-23 May-23\nJul-23\nSep-23\nNov-23\nExports\nImports\nTrade Balance\n \n \n \n9 \n \nFigure 10: Composition of Money Supply \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \nOn a month-on-month basis, the broad money \naggregate increased by 4.99% in November \n2023, compared to 6.85% in October 2023. \nThe monthly increase in money supply largely \nreflected an expansion of 15.80% in the local \ncurrency component largely reflecting credit \ncreation by the banking sector. \nForeign currency component of broad money \nrecorded a monthly increase of 2.15%. \nDuring the month under review, credit to the \nprivate sector, increased by ZW$325.82 billion, \npartly reflecting valuation changes owing to \nexchange rate depreciation. Over the same \nperiod, net claims on Government increased by \nZW$743.81 billion. \nOn an annual basis, broad money registered an \nincrease of 751.06% compared to 792.71% \nregistered in October 2023. The annual growth \nin money supply largely reflected exchange \nrate depreciation, from ZW$654.93/USD in \nNovember 2022 to ZW$5,791.08/USD by end-\nNovember 2023. Expansion in foreign currency \ndeposits, accounted for 591.59 percentage \npoints of the 751.06% annual growth in broad \nmoney. The local currency component of \nmoney supply contributed 159.47 percentage \npoints. \n \nOn the asset side, annual increase in broad \nmoney largely reflected nominal changes in \ncredit to the private sector and net claims on \nGovernment \nof \nZW$9,222.67 \nbillion \n(931.72%) \nand \nZW$3,221.62 \nbillion \n(920.29%), respectively. \n \nOutstanding credit to the private sector was \nmainly \nchannelled \nto \nhouseholds, \nmanufacturing, and agriculture which received \n25.25%, 15.69% and 15.65% of the total credit, \nrespectively. The distribution and mining \nsectors received 11.40% and 11.11% of the \ntotal outstanding credit, respectively. \n \nPrivate sector credit shares for the rest of the \neconomic sectors are shown in Figure 11. \nFigure 11: Distribution of Private Sector \nCredit \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \nNCDs, \n0.02%\nLocal Currency \nTime , 2.36%\nFX Time \nDeposits, 4.67%\nLocal Currency \nTransferable , \n20.51%\nFX \nTransferabl\ne Deposits, \n72.37%\nCurrency in \nCirculation, \n0.07%\nHouseholds\n25.25%\nAgriculture\n15.65%\nMining\n11.11%\nManufactur\ning\n15.69%\nDistribution\n11.40%\nTransport and \nCommunication\n2.77%\nServices\n9.91%\nFinancial Organisations and \nInvestiments\n6.29%\nConstruction\n1.92%\nOther\n0.01%\n \n \n \n10 \n \nCredit to the private sector was largely utilized \nfor recurrent expenditures, 32.44%; inventory \nbuild-up, \n23.02%; \nand \nfixed \ncapital \ninvestments, 16.79% \nSTOCK MARKET DEVELOPMENTS \n \nZimbabwe Stock Exchange (ZSE) \n \nDuring the month of November 2023, the \nZimbabwe Stock Exchange (ZSE) exhibited \nbullish sentiments. As such, All Share, Top 10, \nTop 15, Small Cap and Medium Cap indices \ngained 21.76%, 16.90%, 18.24%, 4.98% and \n32.62% to close at 191 271.68 points, 82 \n144.36 points, 111 457.38 points, 5 316 567.85 \npoints and 826 194.75 points, respectively. \n \nThe mining index added 18.60% to close at 148 \n883.44 points compared to 125 531.67 points, \nrecorded in the previous month. \n \nOn a year-on-year basis, the All Share, Top 10, \nTop 15, Small and Medium Cap indices added \n1 212.11%, 866.89%, 1 080.48%, 1 025.36% \nand 2 412.08%. This compares to 14 577.46 \npoints, 8 495.75 points, 9 441.71 points, 472 \n431.36 points and 32 888.85 points recorded in \nthe comparable period last year, respectively. \n \nThe mining index also added 484.35% from 25 \n478.67 points recorded in November 2022. \n \nFigure 12: ZSE All Share, Top 10 and \nMining Indices \n \nSource: Zimbabwe Stock Exchange, 2023 \n \nThe cumulative volume and value of shares \ntraded added 154.18% and 72.68% to 162.68 \nmillion shares and ZW$54.86 billion. This \ncompares to 64.00 million shares and \nZW$31.77 billion realized in the prior month \nrespectively. The surge in turnover volumes \nwas largely informed by block trades, \ndominated mostly by OK Zimbabwe Limited \nwhere 61 million shares exchanged hands at an \naverage share price of ZW$180.60/share. \n \nThe proportion of foreign purchases to the \nvalue of shares traded, however, declined to \n2.35% from 2.46% registered in October 2023. \nNet foreign position improved to negative \nZW$673.43 million, from negative ZW$1.40 \nbillion recorded in October 2023. \n \n4,000\n34,000\n64,000\n94,000\n124,000\n154,000\n184,000\n214,000\n5000\n30000\n55000\n80000\n105000\n130000\n155000\n180000\n30-Nov-22\n31-Dec-22\n31-Jan-23\n28-Feb-23\n31-Mar-23\n30-Apr-23\n31-May-23\n30-Jun-23\n31-Jul-23\n31-Aug-23\n30-Sep-23\n31-Oct-23\n30-Nov-23\nAll Share Index\nTop 10 Index\nMining Index\n \n \n \n11 \n \nFigure 13: ZSE Monthly Volume and Value \nTraded \n \nSource: Zimbabwe Stock Exchange, 2023 \nReflecting the positive developments on the \nZSE, market capitalization increased by \nZW$2 734.96 billion to close at ZW$15 311.63 \nbillion, in November 2023. \n \nThe, ZSE capitalization added 850.91% to \n$ZW15 311.63 billion from ZW$1 610.20 \nbillion recorded in November 2022 on year-on-\nyear basis comparison. \n \nVictoria Falls Stock Exchange (VFEX) \n \nThe Victoria Falls Stock Exchange (VFEX) \ntraded in a positive trajectory in November \n2023. As such, the All-Share index gained \n1.85% to close at 69.07 points, from 67.81 \npoints recorded in October 2023. \n \nOn an annual basis, however, the VFEX All \nShare index lost 33.81%, from 104.34 points \nrecorded in November 2022. \n \nFigure 14: Victoria Falls Stock Exchange \n(VFEX) All Share Index (ASI) \n \nSource: Victoria Falls Stock Exchange, 2023 \n \nVFEX Market Capitalization \n \nDuring the month of November 2023 VFEX \nmarket capitalization increased by 1.85% to \nUS$1.18 billion, compared to US$1.16 billion \nrecorded in the previous month. \n \n \n \n \n \n \n \n \n \n \n \n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\n90,000\n100,000\n110,000\n0\n100\n200\n300\n400\n500\n600\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nVALUE TRADED ($ MILLIONS)\nVOLUME TRADED (MILIONS)\nVolume\nValue\n60\n70\n80\n90\n100\n110\n120\n130\n140\n150\n30-Nov-22\n31-Dec-22\n31-Jan-23\n28-Feb-23\n31-Mar-23\n30-Apr-23\n31-May-23\n30-Jun-23\n31-Jul-23\n31-Aug-23\n30-Sep-23\n31-Oct-23\n30-Nov-23\n \n \n \n12 \n \nFigure 15: Victoria Falls Stock Exchange \n(VFEX) Market Capitalization (US$ Billion) \n \nSource: Victoria Falls Stock Exchange (VFEX), 2023 \nNATIONAL PAYMENTS SYSTEM \n \nThe value of transactions processed through the \nNational Payment Systems (NPS) increased to \nZW$37.57 trillion in November 2023, from \nZW$32.53 trillion in the previous month. \nThe volumes of NPS transactions rose to 64.45 \nmillion from 62.69 million during the month \nunder review, registering a 3% increase. \n \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe value of transactions processed through the \nReal Time Gross Settlement (RTGS) system \namounted to ZW$23.69 trillion in November \n2023, reflecting an increase of 19.6% from \nZW$19.81 trillion in October 2023. \nThe volume of RTGS transactions, however, \ndecreased by 2.6%, from 949,138 in October \n2023 to 924,474 in November 2023. \nFigure 16: ZETSS Volumes and Values \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \nMobile and Internet Based Transactions \n \nMobile \nand \ninternet-based \ntransactions \nincreased by 8.75% to close at ZW$11.56 \ntrillion during the month under review. \nCash Transactions \nCash based transactions decreased from \nZW$1.93 trillion in October 2023 to ZW$1.70 \ntrillion in November 2023. \nCard Transactions \nCard \nbased \ntransactions \nstood \nat \nZW$2,33 trillion in November 2023, reflecting \na 0.11% increase from ZW$2.09 trillion in \nOctober 2023. \nINFLATION OUTTURN \n \nAnnual Inflation \n \nAnnual headline inflation increased to 21.6% in \nNovember 2023 reflecting a 3.8 percentage \npoint gain from the 17.8% in recorded in \n0.00\n0.20\n0.40\n0.60\n0.80\n1.00\n1.20\n1.40\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nUS$ Billion\n -\n 2,000.0\n 4,000.0\n 6,000.0\n 8,000.0\n 10,000.0\n 12,000.0\n 14,000.0\n 16,000.0\n 18,000.0\n 20,000.0\n 22,000.0\n 24,000.0\n 26,000.0\n0\n200\n400\n600\n800\n1000\n1200\n1400\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nValue in ZW$ Billions\nVolume in Thousands\nVolume\nValue\n \n \n \n13 \n \nOctober 2023. This was attributed to increases \nin both food and non-food inflation. \n \nMonthly Inflation \nThe monthly inflation, rose to 4.5% in \nNovember 2023 from 2.46% in October 2023. \nReflective of these developments, food \ninflation rose to 4.9% in November 2023, from \n2.4% in October 2023. \nMonthly non-food inflation was higher at 4.4% \nin November 2023 from 2.5% registered in the \nprevious month, in part, driven by energy \nprices. \n \nFigure 17: Month-on-Month Inflation (%) \n \n \nSource: ZIMSTAT, 2023 \n \n \nJANUARY 2024 \nRESERVE BANK OF ZIMBABWE \n \n \n \n \n-5.00\n-2.00\n1.00\n4.00\n7.00\n10.00\n13.00\n16.00\n19.00\nSep-21\nNov-21\nJan-22\nMar-22\nMay-22\nJul-22\nSep-22\nNov-22\nJan-23\nMar-23\nMay-23\nJul-23\nSep-23\nNov-23\nFood and non alcoholic beverages\nNon food\nAll Items\n \n14 \n \nStatistical Tables \n \nMonetary Statistics \n 1. Depository Corporations Survey \n \n \n \n \n16 \n 2. Central Bank Survey \n \n \n \n \n \n \n17 \n \n3. Other Depository Corporations Survey \n \n \n \n \n18 \n Other Depository Corporations \n \n4.1 Assets \n \n \n \n \n \n \n \n19 \n 4.2 Liabilities \n \n \n \n \n \n \n \n \n20 \n Commercial Banks \n 5.1 Assets \n \n \n \n \n \n21 \n 5.2 Liabilities \n \n \n \n \n22 \n Building Societies \n 6.1 Assets \n \n \n \n \n \n \n \n23 \n 6.2 Liabilities \n \n \n \n \n \n \n24 \n Sectoral Analysis of Bank Loans and Advances and Deposits \n \n7.1 Sectoral Analysis of Commercial Banks Loans and Advances \n \n25 \n \n7.2 Sectoral Analysis of Commercial Banks Deposits \n \n \n \n26 \n Interest Rates \n \n8.1 Lending Rates \n \n \n \n \n \n \n \n27 \n \n8.2 Banks Deposit Rates \n \n \n \n \n \n \n28 \n \n Inflation \n \n9.1 Monthly Inflation \n \n \n \n \n \n \n \n29 \n \n9.2 Yearly Inflation \n \n \n \n \n \n \n \n30 \n \n External Statistics \n 10. Exchange Rates \n \n \n \n \n \n \n \n31 \n \n \n \n \n \n \n \n15 \n \nZimbabwe Stock Exchange \n 11. Zimbabwe Stock Market Statistics \n \n \n \n \n \n32 \n \n National Payments System Statistics \n \n \n \n12.1 Values of Transactions \n \n \n \n \n \n \n33 \n \n12.2 Volumes of Transactions \n \n \n \n \n \n34 \n \nTrade Statistics \n \n \n \n \n \n \n \n \n 13. Merchandise Trade Statistics \n \n \n \n \n \n35 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 16 \n \n \n \n TABLE 1: DEPOSITORY CORPORATIONS SURVEY ($'000)\nNov-22\nDec-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nNet Foreign Assets\n-2,085,714,926.41\n-2,301,765,618.46\n-2,085,714,926.41\n-2,301,765,618.46 -2,768,770,567.35 -2,973,301,439.14 -3,029,571,037.94 -3,592,508,488.23 -8,614,351,669.20 -17,037,826,284.18 -14,270,652,392.93 -14,337,307,783.85 -16,543,175,351.51 -17,602,887,571.92 -18,190,158,535.84\nCentral Bank(net)\n-2,593,755,912.16\n-2,780,839,763.05\n-2,593,755,912.16\n-2,780,839,763.05 -3,343,568,149.26 -3,725,651,869.12 -3,773,983,623.21 -4,391,029,727.11 -10,520,227,418.97 -20,905,102,725.43 -17,908,236,910.38 -17,794,218,195.35 -20,399,608,502.41 -21,258,160,390.19 -21,996,099,754.12\nForeign Assets\n461,596,127.82\n653,511,533.22\n461,596,127.82\n653,511,533.22\n586,967,884.70\n615,433,643.39\n564,973,118.29\n487,113,521.79\n1,269,998,206.12\n5,000,570,393.09\n2,298,540,635.06\n2,357,413,332.73\n2,869,139,839.85\n2,930,487,891.77\n2,722,752,920.94\nForeign Liabilities\n3,055,352,039.98\n3,434,351,296.28\n3,055,352,039.98\n3,434,351,296.28\n3,930,536,033.96\n4,341,085,512.51\n4,338,956,741.51\n4,878,143,248.90 11,790,225,625.10 25,905,673,118.52 20,206,777,545.43 20,151,631,528.08 23,268,748,342.26 24,188,648,281.96\n24,718,852,675.06\nOther Depository Corporations(net)\n508,040,985.75\n479,074,144.60\n508,040,985.75\n479,074,144.60\n574,797,581.91\n752,350,429.98\n744,412,585.27\n798,521,238.87\n1,905,875,749.78\n3,867,276,441.25\n3,637,584,517.45\n3,456,910,411.50\n3,856,433,150.89\n3,655,272,818.27\n3,805,941,218.28\nForeign Assets\n647,684,732.33\n656,889,016.74\n647,684,732.33\n656,889,016.74\n771,701,557.95\n978,124,840.54\n1,001,481,472.45\n1,117,664,547.79\n2,691,035,602.70\n5,707,374,025.18\n5,099,940,234.73\n4,942,678,600.40\n5,547,113,224.93\n5,232,466,845.31\n5,592,082,221.64\nForeign Liabilities\n139,643,746.58\n177,814,872.15\n139,643,746.58\n177,814,872.15\n196,903,976.04\n225,774,410.56\n257,068,887.17\n319,143,308.91\n785,159,852.92\n1,840,097,583.93\n1,462,355,717.28\n1,485,768,188.90\n1,690,680,074.03\n1,577,194,027.04\n1,786,141,003.36\nNet Domestic Assets (NDA)\n4,157,026,534.98\n4,639,992,601.29\n4,157,026,534.98\n4,639,992,601.29 5,466,131,034.04 5,901,544,727.24 6,224,896,705.38\n7,191,111,363.85 15,853,317,101.49 31,313,301,345.50 27,274,104,611.26 27,749,089,859.15 32,257,244,143.95 34,393,176,141.37 35,818,339,505.91\nDomestic Claims\n1,634,150,767.46\n1,887,872,636.21\n1,634,150,767.46\n1,887,872,636.21 2,178,096,571.94 2,412,375,453.77 2,817,271,797.47 3,128,143,876.12\n6,606,083,920.89 10,786,056,145.65 11,207,654,299.27 11,130,787,030.69 13,243,831,437.83 14,241,944,406.81\n14,910,051,909.59\nClaims on Central Government(net\n350,064,095.72\n474,594,482.66\n350,064,095.72\n474,594,482.66\n468,584,636.74\n482,484,485.80\n627,021,736.70\n809,483,964.69\n1,453,508,596.11\n-321,410,956.46\n2,032,323,436.46\n2,150,580,804.93\n2,606,214,821.09\n2,827,871,126.74\n3,571,682,582.50\nClaims on Central Government\n532,069,052.32\n633,310,020.08\n532,069,052.32\n633,310,020.08\n781,764,304.23\n961,476,154.82\n1,030,581,569.13\n1,109,723,491.62\n1,853,707,138.97\n3,237,920,191.20\n3,137,951,747.03\n3,471,122,173.32\n3,948,824,640.88\n4,022,430,300.76\n4,506,540,165.69\nCentral Bank\n333,135,150.34\n344,351,637.74\n333,135,150.34\n344,351,637.74\n461,728,501.30\n628,530,323.58\n669,523,170.19\n717,575,879.35\n1,196,082,138.57\n2,246,012,881.84\n1,888,538,492.52\n2,273,053,198.66\n2,620,306,139.59\n2,738,773,804.86\n2,978,270,299.68\nODCs\n198,933,901.98\n288,958,382.34\n198,933,901.98\n288,958,382.34\n320,035,802.93\n332,945,831.24\n361,058,398.93\n392,147,612.28\n657,625,000.40\n991,907,309.36\n1,249,413,254.51\n1,198,068,974.66\n1,328,518,501.28\n1,283,656,495.90\n1,528,269,866.01\nLess Liabilities to Central Governm\n182,004,956.59\n158,715,537.42\n182,004,956.59\n158,715,537.42\n313,179,667.49\n478,991,669.02\n403,559,832.42\n300,239,526.93\n400,198,542.86\n3,559,331,147.66\n1,105,628,310.57\n1,320,541,368.39\n1,342,609,819.78\n1,194,559,174.02\n934,857,583.19\nCentral Bank\n175,273,582.39\n150,848,789.30\n175,273,582.39\n150,848,789.30\n271,358,342.10\n467,951,478.68\n397,371,107.14\n290,537,325.34\n349,686,815.54\n3,126,720,981.59\n725,192,498.74\n939,015,866.34\n1,228,107,213.32\n1,047,505,869.78\n801,382,215.73\nODCs\n6,731,374.21\n7,866,748.12\n6,731,374.21\n7,866,748.12\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\n381,525,502.04\n114,502,606.47\n147,053,304.24\n133,475,367.46\nClaims on Other Sectors\n1,284,086,671.74\n1,413,278,153.55\n1,284,086,671.74\n1,413,278,153.55\n1,709,511,935.20\n1,929,890,967.97\n2,190,250,060.77\n2,318,659,911.43\n5,152,575,324.78 11,107,467,102.11\n9,175,330,862.81\n8,980,206,225.76 10,637,616,616.74 11,414,073,280.07\n11,338,369,327.09\nOther Financial Corporations\n143,554,205.91\n162,860,664.99\n143,554,205.91\n162,860,664.99\n176,029,053.38\n189,742,321.73\n202,939,856.36\n127,476,071.53\n204,879,115.02\n372,829,596.47\n286,485,380.68\n286,556,911.67\n345,395,684.06\n402,497,102.41\n366,785,937.06\nState and Local Government\n303,552.08\n282,613.13\n303,552.08\n282,613.13\n251,239.62\n197,442.25\n149,777.75\n99,276.39\n80,342.62\n83,001.69\n68,073.17\n75,802.84\n92,048.54\n98,056.56\n59,769.23\nPublic Non Financial Corporations\n150,370,660.24\n161,725,797.02\n150,370,660.24\n161,725,797.02\n198,192,725.01\n221,082,772.48\n244,918,005.85\n282,369,808.93\n680,427,260.99\n1,426,648,513.58\n1,144,767,740.03\n942,115,955.79\n1,023,405,149.25\n1,124,773,262.90\n758,994,509.56\nPrivate Sector\n989,858,253.51\n1,088,409,078.41\n989,858,253.51\n1,088,409,078.41\n1,335,038,917.19\n1,518,868,431.51\n1,742,242,420.81\n1,908,714,754.59\n4,267,188,606.15\n9,307,905,990.36\n7,744,009,668.94\n7,751,457,555.47\n9,268,723,734.89\n9,886,704,858.20\n10,212,529,111.24\nCentral Bank\n13,419,306.74\n13,440,290.49\n13,419,306.74\n13,440,290.49\n14,320,237.34\n15,366,452.38\n18,410,955.96\n21,144,958.50\n23,007,099.44\n23,430,389.25\n42,772,151.02\n61,406,600.26\n79,455,077.51\n92,261,985.53\n97,474,935.67\nODCs\n976,438,946.77\n1,074,968,787.92\n976,438,946.77\n1,074,968,787.92\n1,320,718,679.85\n1,503,501,979.13\n1,723,831,464.85\n1,887,569,796.09\n4,244,181,506.71\n9,284,475,601.11\n7,701,237,517.92\n7,690,050,955.21\n9,189,268,657.38\n9,794,442,872.67\n10,115,054,175.57\nOther Items(Net)\n-2,522,875,767.52 -2,752,119,965.08\n-2,522,875,767.52\n-2,752,119,965.08 -3,288,034,462.10 -3,489,169,273.48 -3,407,624,907.90 -4,062,967,487.72 -9,247,233,180.60 -20,527,245,199.85 -16,066,450,311.99 -16,618,302,828.46 -19,013,412,706.11 -20,151,231,734.56 -20,908,287,596.32\nShares and Other Equity\n-2,460,253,452.61\n-2,434,507,949.48\n-2,460,253,452.61\n-2,434,507,949.48 -2,961,726,923.10 -3,217,266,965.75 -3,126,405,163.73 -3,579,533,655.47 -9,203,936,084.43 -19,402,711,215.33 -14,321,122,638.86 -14,203,729,090.13 -16,555,368,520.87 -17,032,283,456.63 -17,122,059,892.58\nLiabilities to Other Financial Corporations\n339,615.56\n752,479.25\n339,615.56\n752,479.25\n675,534.11\n3,108,981.29\n3,714,628.40\n6,418,803.44\n30,583,343.97\n64,321,874.21\n58,256,168.71\n56,751,608.46\n90,032,397.59\n83,441,760.88\n89,997,662.25\nRestricted Deposits\n59,785,332.00\n42,455,011.89\n59,785,332.00\n42,455,011.89\n52,836,636.96\n95,262,450.25\n116,383,765.15\n168,057,733.95\n452,445,666.52\n929,649,277.24\n832,146,281.94\n481,313,635.70\n652,311,438.83\n616,319,027.72\n598,451,618.98\nDeposits and Securities Excluded from Base\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-122,747,262.48\n-360,819,506.73\n-122,747,262.48\n-360,819,506.73\n-379,819,710.07\n-370,273,739.26\n-401,318,137.73\n-657,910,369.64\n-526,326,106.66\n-2,118,505,135.97\n-2,635,730,123.79\n-2,952,638,982.49 -3,200,388,021.66\n-3,818,709,066.54\n-4,474,676,984.97\nBroad Money-M3\n2,071,311,608.56\n2,338,226,982.83\n2,071,311,608.56\n2,338,226,982.83 2,697,360,466.69 2,928,243,288.10 3,195,325,667.44 3,598,602,875.61\n7,238,965,432.29 14,275,475,061.32 13,003,452,218.33 13,411,782,075.30 15,714,068,792.44 16,790,288,569.45 17,628,180,970.07\nSecurities Other than Shares Included in \nBroad Money\n13,438,521.87\n14,148,964.76\n13,438,521.87\n14,148,964.76\n15,056,472.03\n15,711,655.30\n16,082,619.50\n1,843,391.22\n4,659,433.86\n4,243,581.90\n2,137,443.55\n3,182,683.74\n2,685,488.92\n3,497,226.23\n4,173,191.32\nBroad Money-M2\n2,057,873,086.69\n2,324,078,018.07\n2,057,873,086.69\n2,324,078,018.07 2,682,303,994.66 2,912,531,632.80 3,179,243,047.93 3,596,759,484.40\n7,234,305,998.43 14,271,231,479.42 13,001,314,774.78 13,408,599,391.56 15,711,383,303.52 16,786,791,343.22 17,624,007,778.75\nOther Deposits\n189,198,137.65\n233,411,780.44\n189,198,137.65\n233,411,780.44\n275,038,711.32\n293,774,251.17\n332,735,496.03\n268,888,357.23\n555,305,758.75\n1,066,573,312.15\n824,657,970.63\n860,202,048.80\n945,509,710.97\n1,187,384,045.43\n1,239,087,789.32\nof which Foreign Currency Accounts\n115,079,593.63\n121,810,432.21\n115,079,593.63\n121,810,432.21\n159,977,076.22\n193,826,996.54\n204,002,079.62\n140,843,185.69\n366,430,904.52\n852,167,654.54\n616,409,108.42\n586,082,872.02\n715,202,149.51\n865,876,028.52\n823,225,160.91\nNarrow Money-M1\n1,868,674,949.05\n2,090,666,237.62\n1,868,674,949.05\n2,090,666,237.62 2,407,265,283.35 2,618,757,381.64 2,846,507,551.90 3,327,871,127.16\n6,679,000,239.69 13,204,658,167.27 12,176,656,804.16 12,548,397,342.75 14,765,873,592.55 15,599,407,297.79 16,384,919,989.43\nTransferable Deposits\n1,864,566,202.51\n2,086,456,095.48\n1,864,566,202.51\n2,086,456,095.48\n2,402,524,498.19\n2,612,610,043.68\n2,840,026,628.31\n3,320,722,893.78\n6,671,063,283.95 13,196,303,401.12 12,166,873,421.72 12,538,725,239.63 14,755,523,314.82 15,588,193,442.31\n16,373,116,452.32\n Of which Foreign Currency Accounts\n1,211,793,829.42\n1,327,590,772.37\n1,211,793,829.42\n1,327,590,772.37\n1,626,587,667.25\n1,754,513,308.92\n1,869,072,784.19\n2,148,792,572.06\n5,274,426,984.71 11,635,488,089.25 10,099,330,132.00 10,173,498,286.11 12,310,342,777.52 12,429,076,347.34\n12,757,305,066.07\nCurrency Outside Depository Corporation\n4,108,746.53\n4,210,142.14\n4,108,746.53\n4,210,142.14\n4,740,785.16\n6,147,337.96\n6,480,923.60\n7,148,233.38\n7,936,955.74\n8,354,766.15\n9,783,382.43\n9,672,103.13\n10,350,277.73\n11,213,855.47\n11,803,537.12\nMemorandum Items\nReserve Money\n98,860,662.38\n104,044,194.67\n98,860,662.38\n104,044,194.67\n122,997,662.08\n204,036,133.91\n232,896,654.62\n276,496,079.11\n520,611,909.67\n1,064,898,441.01\n1,003,043,754.90\n1,062,092,590.09\n1,312,407,291.74\n1,787,437,296.87\n1,817,508,312.01\nFCAs as a Percentage of Deposits in M\n58.6%\n56.9%\n58.6%\n56.9%\n60.4%\n60.0%\n58.6%\n59.8%\n72.9%\n87.5%\n77.7%\n75.9%\n78.4%\n74.1%\n72.4%\nEnd Period Exchange Rate\n654.93\n684.33\n654.93\n684.33\n796.52\n889.13\n929.86\n1,047.44\n2,577.06\n5,739.80\n4,516.80\n4,608.11\n5,466.75\n5,698.96\n5,791.08\nSource: Reserve Bank of Zimbabwe, 2023\n \n \n \n17 \n \n \nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nNet Foreign Assets\n-2,593,755,912.16 -2,780,839,763.05 -3,343,568,149.26 -3,725,651,869.12 -3,773,983,623.21 -4,391,029,727.11 -10,520,227,418.97 -20,905,102,725.43\n-17,908,236,910.38\n-17,794,218,195.35\n-20,399,608,502.41\n-21,258,160,390.19 -21,996,099,754.12\nClaims on Non Residents\n461,596,127.82\n653,511,533.22\n586,967,884.70\n615,433,643.39\n564,973,118.29\n487,113,521.79\n1,269,998,206.12\n5,000,570,393.09\n2,298,540,635.06\n2,357,413,332.73\n2,869,139,839.85\n2,930,487,891.77\n2,722,752,920.94\nOfficial Reserves Assets\n301,307,551.70\n408,577,461.48\n261,809,981.40\n249,068,733.08\n171,692,411.97\n146,106,760.95\n332,915,935.99\n2,747,791,086.61\n550,426,343.44\n609,700,872.98\n873,028,937.84\n901,998,462.96\n664,790,048.98\nOther Foreign Assets\n160,288,576.12\n244,934,071.75\n325,157,903.30\n366,364,910.31\n393,280,706.32\n341,006,760.85\n937,082,270.13\n2,252,779,306.49\n1,748,114,291.61\n1,747,712,459.75\n1,996,110,902.01\n2,028,489,428.81\n2,057,962,871.96\nLess Liabilities to Non Residents\n3,055,352,039.98\n3,434,351,296.28\n3,930,536,033.96\n4,341,085,512.51\n4,338,956,741.51\n4,878,143,248.90\n11,790,225,625.10\n25,905,673,118.52\n20,206,777,545.43\n20,151,631,528.08\n23,268,748,342.26\n24,188,648,281.96\n24,718,852,675.06\nShort Term Liabilities\n1,431,029,164.32 1,701,709,036.15 1,909,558,866.94 2,114,914,934.40 2,213,818,403.03 2,487,318,302.19\n6,071,100,761.93 13,223,388,517.77\n10,191,496,163.68\n10,241,615,661.93\n508,139,221.79\n641,056,314.20\n562,466,631.94\nOther Foreign Liabilities*\n1,624,322,875.66 1,732,642,260.13 2,020,977,167.02 2,226,170,578.11 2,125,138,338.48 2,390,824,946.71\n5,719,124,863.17 12,682,284,600.75\n10,015,281,381.75\n9,910,015,866.15\n22,760,609,120.47\n23,547,591,967.77 24,156,386,043.12\n of which blocked funds\n742,874,154.66\n800,314,020.03\n918,840,100.80 1,016,910,134.72\n844,460,244.12\n946,785,361.64\n2,218,121,428.14\n4,846,720,895.68\n3,809,201,616.00\n3,638,215,070.80\n4,306,782,215.73\n4,458,649,260.58\n4,527,891,788.72\nNet Domestic Assets (NDA)\n2,692,616,574.53\n2,884,883,957.73\n3,466,565,811.34\n3,929,688,003.03\n4,006,880,277.83\n4,667,525,806.22\n11,040,839,328.64\n21,970,001,166.44\n18,911,280,665.28\n18,856,310,785.44\n21,712,015,794.14\n23,045,597,687.06\n23,813,608,066.13\nDomestic Claims\n281,625,189.08\n327,159,834.74\n344,411,001.58\n335,732,732.21\n472,690,115.90\n659,259,617.17\n1,372,281,553.64\n119,647,192.81\n1,998,051,204.96\n1,989,009,848.49\n2,124,654,018.98\n2,554,218,968.05\n2,641,632,922.32\nNet Claims on Central Government\n157,861,567.95\n193,502,848.44\n190,370,159.19\n160,578,844.90\n272,152,063.05\n427,038,554.01\n846,395,323.03\n-880,708,099.75\n1,163,345,993.77\n1,334,037,332.32\n1,392,198,926.28\n1,691,267,935.09\n2,176,888,083.95\nClaims on Central Government\n333,135,150.34\n344,351,637.74\n461,728,501.30\n628,530,323.58\n669,523,170.19\n717,575,879.35\n1,196,082,138.57\n2,246,012,881.84\n1,888,538,492.52\n2,273,053,198.66\n2,620,306,139.59\n2,738,773,804.86\n2,978,270,299.68\nOf which: Securities Other than Shares\n58,861,123.74\n93,911,678.51\n115,798,163.17\n141,163,866.74\n163,408,985.73\n197,483,744.44\n491,408,539.76\n1,282,058,425.55\n1,041,256,825.36\n1,354,647,836.07\n1,738,161,413.25\n1,883,996,199.01\n1,984,147,610.08\nLoans\n274,274,026.60\n250,439,959.22\n345,930,338.13\n487,366,456.84\n506,114,184.46\n520,092,134.91\n704,673,598.81\n963,954,456.29\n847,281,667.16\n918,405,362.59\n882,144,726.34\n854,777,605.86\n994,122,689.61\n Loans and Advances\n103,632,177.79\n83,409,676.25\n92,638,154.51\n100,736,810.22\n112,483,069.83\n126,461,020.28\n298,686,901.35\n557,967,758.83\n441,294,969.70\n453,167,575.54\n416,906,939.29\n389,539,818.81\n450,658,841.88\nAmounts Due from Gvt including SDR Draw\n167,030,282.97\n167,030,282.97\n253,292,183.61\n386,629,646.61\n393,631,114.63\n393,631,114.63\n405,986,697.46\n405,986,697.46\n405,986,697.46\n465,237,787.05\n465,237,787.05\n465,237,787.05\n543,463,847.72\n Export Incentives\n3,611,565.85\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLess Liabilities to Central Government\n175,273,582.39\n150,848,789.30\n271,358,342.10\n467,951,478.68\n397,371,107.14\n290,537,325.34\n349,686,815.54\n3,126,720,981.59\n725,192,498.74\n939,015,866.34\n1,228,107,213.32\n1,047,505,869.78\n801,382,215.73\nOf which: Deposits\n175,273,582.39\n150,848,789.30\n271,358,342.10\n467,951,478.68\n397,371,107.14\n290,537,325.34\n349,686,815.54\n3,126,720,981.59\n725,192,498.74\n939,015,866.34\n1,228,107,213.32\n1,047,505,869.78\n801,382,215.73\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n123,763,621.12\n133,656,986.31\n154,040,842.39\n175,153,887.31\n200,538,052.85\n232,221,063.16\n525,886,230.61\n1,000,355,292.57\n834,705,211.19\n654,972,516.17\n732,455,092.70\n862,951,032.96\n464,744,838.37\nOther Financial Corporations\n3,213,198.55\n8,835,802.24\n9,415,510.50\n10,113,325.42\n10,623,469.30\n10,883,730.62\n10,991,470.34\n12,986,635.27\n12,976,151.03\n13,602,645.94\n14,588,403.94\n63,414,783.51\n25,307,666.81\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n107,131,115.83\n111,380,893.58\n130,305,094.55\n149,674,109.51\n171,503,627.58\n200,192,374.04\n491,887,660.82\n963,938,268.05\n778,956,909.14\n579,963,269.97\n638,411,611.26\n707,274,263.92\n341,962,235.89\nPrivate Sector\n13,419,306.74\n13,440,290.49\n14,320,237.34\n15,366,452.38\n18,410,955.96\n21,144,958.50\n23,007,099.44\n23,430,389.25\n42,772,151.02\n61,406,600.26\n79,455,077.51\n92,261,985.53\n97,474,935.67\nClaims on Other Depository Corporations\n34,171,755.59\n24,419,539.95\n41,233,534.83\n43,495,940.76\n45,842,895.27\n47,004,500.30\n116,825,246.16\n267,624,056.04\n261,303,321.91\n238,753,031.59\n207,009,026.95\n229,347,409.30\n246,227,512.18\nOf which: Loans\n34,171,755.59\n24,419,539.95\n41,233,534.83\n43,495,940.76\n45,842,895.27\n47,004,500.30\n116,825,246.16\n267,624,056.04\n261,303,321.91\n238,753,031.59\n207,009,026.95\n229,347,409.30\n246,227,512.18\nOther Liabilities to ODCs\n681,837,090.96\n685,265,981.82\n730,178,263.75\n655,353,298.81\n642,344,547.18\n750,760,102.33\n1,433,201,083.09\n2,673,344,290.58\n2,908,051,423.81\n3,106,048,719.94\n3,107,865,677.76\n3,216,633,940.85\n3,876,066,859.55\nOf which: Aftrades Balances\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Securities\n355,098,840.61\n373,427,746.87\n355,071,440.18\n307,661,257.90\n318,264,602.32\n358,416,719.69\n479,833,629.00\n683,711,355.79\n1,196,912,067.35\n1,309,913,863.13\n1,094,629,530.65\n1,078,752,001.46\n1,460,737,223.38\nOther Items(Net)\n-3,058,656,720.83\n-3,218,570,564.85\n-3,811,099,538.68\n-4,205,812,628.87\n-4,130,691,813.85\n-4,712,021,791.09\n-10,984,933,611.94\n-24,256,074,208.16\n-19,559,977,562.21\n-19,734,596,625.30\n-22,488,218,425.97\n-23,478,665,250.56\n-24,801,814,491.19\nShares and Other Equity\n-3,039,020,578.83\n-3,148,249,301.82\n-3,673,971,825.27\n-4,085,919,716.08\n-4,078,823,961.23\n-4,620,636,211.04\n-11,291,316,467.09\n-25,202,259,045.14\n-19,805,080,179.46\n-19,579,648,458.36\n-22,753,122,010.85\n-23,550,146,670.91\n-23,892,801,192.96\nOther Items(Net)\n-90,829,827.08\n-118,055,939.45\n-221,456,181.24\n-233,402,893.37\n-175,955,067.06\n-276,252,783.87\n-165,894,326.27\n-1,658,390.99\n-603,417,014.29\n-652,393,199.08\n-396,662,893.13\n-589,895,589.07\n-1,529,336,116.22\nLiabilities to Other Resident Sectors\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nDeposits and Securities Excluded from Base Mon\n71,193,685.08\n47,734,676.42\n84,328,467.83\n113,509,980.58\n124,087,214.44\n184,867,203.81\n472,277,181.43\n947,843,227.98\n848,519,631.54\n497,445,032.14\n661,566,478.01\n661,377,009.41\n620,322,818.00\nMonetary Base \n98,860,662.38\n104,044,194.67\n122,997,662.08\n204,036,133.91\n232,896,654.62\n276,496,079.11\n520,611,909.67\n1,064,898,441.01\n1,003,043,754.90\n1,062,092,590.09\n1,312,407,291.74\n1,787,437,296.87\n1,817,508,312.01\nBond Coins\n99,645.37\n99,645.38\n99,645.41\n99,645.43\n97,745.29\n90,572.71\n83,649.70\n80,542.92\n79,344.94\n79,163.84\n79,154.38\n79,154.84\n78,794.30\nBond Notes\n7,260,471.73\n7,472,198.27\n7,439,947.85\n7,927,761.49\n8,414,729.87\n8,902,316.39\n8,960,488.74\n10,258,707.59\n11,193,057.46\n11,885,047.43\n12,736,767.90\n13,560,105.45\n14,430,019.79\nLiabilities to ODCs\n91,500,545.27\n96,472,351.03\n115,458,068.82\n196,008,726.99\n224,384,179.46\n267,503,190.02\n511,567,771.23\n1,054,559,190.50\n991,771,352.50\n1,050,128,378.82\n1,299,591,369.47\n1,773,798,036.58\n1,802,999,497.91\n Local Currency Reserve Deposits\n45,031,513.47\n51,076,733.16\n56,112,655.93\n63,026,207.68\n72,736,726.53\n86,910,489.22\n105,795,700.01\n182,612,061.98\n243,159,063.25\n295,859,644.01\n344,623,158.66\n400,041,844.52\n449,770,161.09\n Foreign Currency Reserve Deposits\n46,368,666.81\n45,295,252.88\n59,244,974.53\n132,882,154.31\n151,547,087.93\n180,492,335.81\n405,671,706.23\n871,846,763.53\n718,611,889.52\n724,265,967.76\n924,967,845.81\n1,343,755,827.07\n1,323,159,638.08\n Exess reserves \n100,364.99\n100,364.99\n100,438.36\n100,364.99\n100,364.99\n100,364.99\n100,364.99\n100,364.99\n30,000,399.73\n30,002,767.04\n30,000,364.99\n30,000,364.99\n30,069,698.74\nPrivate Deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nSource: Reserve Bank of Zimbabwe,2023\nTABLE 2: CENTRAL BANK SURVEY ($'000)\n \n \n \n18 \n \nTABLE 3 : OTHER DEPOSITORY CORPORATIONS SURVEY ( $ '000)\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nNet Foreign Assets\n508,040,985.75\n479,074,144.60\n574,797,581.91\n752,350,429.98\n744,412,585.27\n798,521,238.87\n1,905,875,749.78\n3,867,276,441.25\n3,637,584,517.45\n3,456,910,411.50\n3,856,433,150.89\n3,655,272,818.27\n3,805,941,218.28\nClaims on Non Residents\n647,684,732.33\n656,889,016.74\n771,701,557.95\n978,124,840.54\n1,001,481,472.45\n1,117,664,547.79\n2,691,035,602.70\n5,707,374,025.18\n5,099,940,234.73\n4,942,678,600.40\n5,547,113,224.93\n5,232,466,845.31\n5,592,082,221.64\nOf Which: Foreign Currency\n286,365,213.60\n295,435,074.49\n381,966,212.75\n436,062,788.15\n425,326,479.00\n462,081,408.59\n1,048,116,376.82\n2,249,201,574.76\n1,584,403,308.04\n1,505,916,176.81\n2,015,621,585.66\n2,312,575,134.73\n2,558,589,332.45\nDeposits\n359,879,184.65\n359,872,194.36\n387,899,225.52\n540,045,460.79\n573,864,075.80\n652,301,901.26\n1,639,116,293.75\n3,441,353,382.68\n3,502,402,457.26\n3,423,237,567.41\n3,515,981,784.12\n2,903,444,523.75\n3,019,701,118.75\nOther\n1,440,334.07\n1,581,747.89\n1,836,119.68\n2,016,591.60\n2,290,917.65\n3,281,237.94\n3,802,932.12\n16,819,067.74\n13,134,469.43\n13,524,856.19\n15,509,855.15\n16,447,186.84\n13,791,770.44\nLess Liabilities to Non Residents\n139,643,746.58\n177,814,872.15\n196,903,976.04\n225,774,410.56\n257,068,887.17\n319,143,308.91\n785,159,852.92\n1,840,097,583.93\n1,462,355,717.28\n1,485,768,188.90\n1,690,680,074.03\n1,577,194,027.04\n1,786,141,003.36\nOf Which: Deposits\n92,797,127.97\n89,384,232.63\n93,815,500.56\n109,244,589.40\n121,808,803.93\n153,776,940.69\n378,197,467.04\n820,337,332.33\n764,960,085.21\n772,511,911.80\n827,268,243.95\n655,899,412.79\n782,004,591.95\nLoans\n46,846,618.61\n88,430,639.51\n103,088,475.48\n116,529,821.16\n135,260,083.25\n165,366,368.23\n406,962,385.88\n1,019,760,251.61\n697,395,632.08\n713,256,277.09\n863,411,830.08\n921,294,614.24\n1,004,136,411.41\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nNet Domestic Assets (NDA)\n1,547,753,523.21\n1,849,663,031.57\n2,086,330,268.75\n2,151,497,989.83\n2,436,728,709.28\n2,776,123,933.49\n5,305,321,211.88\n10,381,649,903.19\n9,339,710,968.86\n9,929,068,164.23\n11,838,030,324.64\n13,078,743,914.01\n13,788,565,015.66\nDomestic Claims\n1,352,525,578.38\n1,560,712,801.46\n1,833,685,570.36\n2,076,642,721.56\n2,344,581,681.58\n2,468,884,258.96\n5,233,802,367.26\n10,666,408,952.84\n9,209,603,094.31\n9,141,777,182.20\n11,119,177,418.85\n11,687,725,438.76\n12,268,418,987.27\nNet Claims on Central Government\n192,202,527.77\n281,091,634.22\n278,214,477.55\n321,905,640.90\n354,869,673.65\n382,445,410.68\n607,113,273.08\n559,297,143.29\n868,977,442.69\n816,543,472.61\n1,214,015,894.82\n1,136,603,191.66\n1,394,794,498.55\nClaims on Central Government\n198,933,901.98\n288,958,382.34\n320,035,802.93\n332,945,831.24\n361,058,398.93\n392,147,612.28\n657,625,000.40\n991,907,309.36\n1,249,413,254.51\n1,198,068,974.66\n1,328,518,501.28\n1,283,656,495.90\n1,528,269,866.01\nSecurities\n198,814,372.89\n288,843,960.96\n319,807,352.36\n332,626,867.19\n360,626,182.29\n391,587,790.26\n653,025,854.60\n981,773,844.67\n1,242,045,163.04\n1,190,599,025.63\n1,318,582,684.20\n1,272,839,666.04\n1,517,348,442.88\nLoans\n119,529.09\n114,421.39\n228,450.57\n318,964.05\n432,216.64\n559,822.02\n4,599,145.80\n10,133,464.70\n7,368,091.47\n7,469,949.03\n9,935,817.09\n10,816,829.86\n10,921,423.13\nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n0.00\nLess Liabilities to Central Government\n6,731,374.21\n7,866,748.12\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\n381,525,502.04\n114,502,606.47\n147,053,304.24\n133,475,367.46\nOf which: Deposits\n6,731,374.21\n7,866,748.12\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\n381,525,502.04\n114,502,606.47\n147,053,304.24\n133,475,367.46\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n1,160,323,050.62\n1,279,621,167.24\n1,555,471,092.81\n1,754,737,080.66\n1,989,712,007.92\n2,086,438,848.27\n4,626,689,094.18\n10,107,111,809.54\n8,340,625,651.62\n8,325,233,709.58\n9,905,161,524.04\n10,551,122,247.10\n10,873,624,488.72\nOther Financial Corporations\n140,341,007.36\n154,024,862.75\n166,613,542.88\n179,628,996.31\n192,316,387.05\n116,592,340.90\n193,887,644.68\n359,842,961.20\n273,509,229.65\n272,954,265.73\n330,807,280.13\n339,082,318.90\n341,478,270.25\nState and Local Government\n303,552.08\n282,613.13\n251,239.62\n197,442.25\n149,777.75\n99,276.39\n80,342.62\n83,001.69\n68,073.17\n75,802.84\n92,048.54\n98,056.56\n59,769.23\nPublic Non Financial Corporations\n43,239,544.41\n50,344,903.44\n67,887,630.46\n71,408,662.97\n73,414,378.27\n82,177,434.89\n188,539,600.17\n462,710,245.53\n365,810,830.89\n362,152,685.81\n384,993,537.99\n417,498,998.98\n417,032,273.67\nPrivate Sector\n976,438,946.77\n1,074,968,787.92\n1,320,718,679.85\n1,503,501,979.13\n1,723,831,464.85\n1,887,569,796.09\n4,244,181,506.71\n9,284,475,601.11\n7,701,237,517.92\n7,690,050,955.21\n9,189,268,657.38\n9,794,442,872.67\n10,115,054,175.57\nClaims on the Central Bank\n579,137,110.76\n655,646,094.75\n706,967,379.44\n745,768,616.10\n819,662,608.72\n973,967,364.65\n2,050,173,260.89\n4,434,783,343.65\n4,138,866,267.43\n4,653,650,898.99\n5,265,804,171.22\n5,912,703,283.03\n6,326,849,329.56\nCurrency\n3,251,370.57\n3,361,701.51\n2,798,808.10\n1,880,068.97\n2,031,551.56\n1,844,655.72\n1,107,182.70\n1,984,484.37\n1,489,019.97\n2,292,108.14\n2,465,644.54\n2,425,404.82\n2,705,276.98\nReserves\n575,885,740.19\n652,284,393.24\n704,168,571.34\n743,888,547.13\n817,631,057.16\n972,122,708.94\n2,049,066,078.19\n4,424,349,970.82\n4,137,377,247.46\n4,651,358,790.85\n5,263,338,526.67\n5,910,277,878.21\n6,324,144,052.58\nSecurities\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n8,448,888.46\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Claims\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLiabilities to the Central Bank\n19,973,470.74\n10,597,782.72\n4,974,293.62\n8,092,936.71\n9,639,861.61\n13,321,881.07\n78,332,582.02\n39,166,568.11\n87,827,165.17\n84,841,425.78\n82,493,417.82\n84,628,889.30\n92,939,919.06\nOther Items(Net)\n363,935,695.20\n356,098,081.93\n449,348,387.42\n662,820,411.12\n717,875,719.41\n653,405,809.04\n1,900,321,834.26\n4,680,375,825.19\n3,920,931,227.71\n3,781,518,491.17\n4,464,457,847.61\n4,437,055,918.48\n4,713,763,382.12\nShares and Other Equity\n578,767,126.22\n713,741,352.34\n712,244,902.17\n868,652,750.33\n952,418,797.50\n1,041,102,555.56\n2,087,380,382.66\n5,799,547,829.81\n5,483,957,540.60\n5,375,919,368.23\n6,197,753,489.98\n6,517,863,214.28\n6,770,741,300.38\nLiabilities to other ressident sectors\n339,615.56\n752,479.25\n675,534.11\n3,108,981.29\n3,714,628.40\n6,418,803.44\n30,583,343.97\n64,321,874.21\n58,256,168.71\n56,751,608.46\n90,032,397.59\n83,441,760.88\n89,997,662.25\nOther Items(Net)\n-215,171,046.59\n-358,395,749.66\n-263,572,048.85\n-208,941,320.50\n-238,257,706.49\n-394,115,549.96\n-217,641,892.37\n-1,183,493,878.83\n-1,621,282,481.61\n-1,651,152,485.52\n-1,823,328,039.96\n-2,164,249,056.68\n-2,146,975,580.51\nDeposits and Securities Included in Broad Money\n2,055,794,508.96\n2,328,737,176.16\n2,661,127,850.66\n2,903,848,419.81\n3,181,141,294.55\n3,574,645,172.37\n7,211,196,961.65\n14,248,926,344.43\n12,977,295,486.31\n13,385,978,575.73\n15,694,463,475.53\n16,734,016,732.29\n17,594,506,233.94\nDeposits Included in Broad Money\n2,042,355,987.09\n \n2,314,588,211.40\n \n2,646,071,378.63\n \n2,888,136,764.51\n \n3,165,058,675.05\n \n3,572,801,781.15\n \n7,206,537,527.79\n \n14,244,682,762.54\n \n12,975,158,042.76\n \n13,382,795,891.99\n \n15,691,777,986.61\n \n16,730,519,506.06\n \n17,590,333,042.62\nTransferable Deposits\n1,853,157,849.44\n \n2,081,176,430.96\n \n2,371,032,667.32\n \n2,594,362,513.35\n \n2,832,323,179.02\n \n3,303,913,423.92\n \n6,651,231,769.05\n \n13,178,109,450.38\n \n12,150,500,072.13\n \n12,522,593,843.18\n \n14,746,268,275.64\n \n15,543,135,460.62\n \n16,351,245,253.30\n of which FCAs\n1,211,583,916.42\n \n1,325,367,130.51\n \n1,623,313,580.02\n \n1,750,982,009.54\n \n1,865,387,117.78\n \n2,144,912,895.57\n \n5,273,965,984.48\n \n11,634,530,484.57\n \n10,099,327,960.39\n \n10,172,409,984.27\n \n12,309,119,479.36\n \n12,388,978,422.26\n \n12,751,597,340.40\nOther Deposits\n189,198,137.65\n233,411,780.44\n275,038,711.32\n293,774,251.17\n332,735,496.03\n268,888,357.23\n555,305,758.75\n1,066,573,312.15\n824,657,970.63\n860,202,048.80\n945,509,710.97\n1,187,384,045.43\n1,239,087,789.32\n of which FCAs\n115,079,593.63\n121,810,432.21\n159,977,076.22\n193,826,996.54\n204,002,079.62\n140,843,185.69\n366,430,904.52\n852,167,654.54\n616,409,108.42\n586,082,872.02\n715,202,149.51\n865,876,028.52\n823,225,160.91\nMoney Market Instruments\n13,438,521.87\n \n14,148,964.76\n \n15,056,472.03\n \n15,711,655.30\n \n16,082,619.50\n \n1,843,391.22\n \n4,659,433.86\n \n4,243,581.90\n \n2,137,443.55\n \n3,182,683.74\n \n2,685,488.92\n \n3,497,226.23\n \n4,173,191.32\nSource:Reserve Bank of Zimbabwe,2023\n \n \n \n \n19 \n \nForeign\nTOTAL\nEnd of\nNotes\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nOther \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\noca\nGovernemt\nOther2\nGovernment\nLocal \nPublic \n Institutional \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nGovernment\nEnterprises\nUnits\nAssets\n2020\nJan\n183.4\n \n3,176.6\n \n13,217.3\n \n1,073.2\n \n8,142.0\n \n1,811.4\n4,372.4\n20.1\n125.5\n15.0\n5.1\n12.2\n326.1\n12,115.8\n946.9\n2,965.9\n4,191.6\n9,691.7\n62,392.3\nFeb\n267.1\n \n3,136.4\n \n13,817.0\n \n1,504.5\n \n8,642.5\n \n1,532.9\n4,293.1\n20.1\n117.4\n15.5\n5.1\n11.6\n329.5\n13,632.6\n973.7\n5,441.7\n12,758.8\n10,338.7\n76,838.2\nMar\n263.6\n \n3,607.6\n \n16,167.1\n \n2,214.4\n \n12,681.9\n \n2,497.5\n4,775.6\n19.2\n0.1\n20.8\n4.4\n11.4\n765.8\n16,323.6\n1,103.1\n7,917.3\n7,042.4\n11,309.5\n86,725.4\nApr\n298.5\n \n3,642.9\n \n17,926.4\n \n1,523.3\n \n13,697.1\n \n3,056.3\n4,716.9\n18.1\n0.1\n18.4\n4.5\n9.7\n834.7\n17,280.6\n1,104.9\n7,642.8\n8,200.2\n11,988.1\n91,963.5\nMay\n330.0\n \n3,581.8\n \n21,376.4\n \n1,749.6\n \n15,757.4\n \n3,130.4\n4,579.1\n17.0\n0.1\n45.8\n4.5\n9.6\n768.0\n20,291.6\n1,280.4\n7,042.0\n8,823.5\n12,139.9\n100,927.2\nJun\n606.6\n \n9,584.7\n \n29,457.9\n \n3,974.7\n \n35,786.5\n \n7,527.5\n6,264.7\n13.8\n0.1\n90.1\n4.3\n9.4\n2,010.8\n30,567.5\n2,011.1\n24,299.3\n17,433.0\n23,843.0\n193,485.0\nJul\n690.8\n \n18,357.0\n \n54,139.7\n \n5,578.7\n \n42,159.7\n \n11,399.9\n6,760.1\n13.4\n0.0\n74.6\n4.3\n12.6\n1,025.8\n36,840.5\n3,070.4\n28,551.1\n14,418.6\n24,902.0\n247,999.1\nAug\n975.1\n \n28,776.0\n \n54,868.5\n \n4,623.1\n \n41,100.2\n \n14,219.2\n6,883.5\n13.1\n0.0\n39.1\n14.0\n14.7\n1,046.3\n43,502.9\n3,130.9\n25,354.6\n14,240.7\n26,391.3\n265,193.4\nSep\n1,084.2\n \n30,217.6\n \n56,679.6\n \n4,426.6\n \n39,530.8\n \n14,126.8\n6,676.2\n12.9\n0.0\n107.8\n9.6\n22.3\n1,050.4\n45,297.5\n3,822.4\n28,289.4\n20,662.0\n27,055.5\n279,071.4\nOct\n1,064.2\n \n32,235.0\n \n66,948.5\n \n4,457.3\n \n40,092.7\n \n13,530.7\n8,068.2\n12.3\n20.1\n222.0\n17.6\n22.2\n1,019.0\n53,116.5\n3,869.6\n29,764.7\n19,044.4\n27,327.7\n300,832.8\nNov\n1,063.6\n \n34,673.9\n \n73,237.2\n \n4,211.3\n \n41,173.6\n \n14,134.7\n8,961.5\n11.6\n0.0\n268.2\n20.0\n16.8\n1,269.9\n60,179.7\n3,678.7\n29,821.2\n19,694.9\n27,426.0\n319,842.9\nDec\n1,177.8\n \n39,886.8\n \n76,076.5\n \n5,771.7\n \n38,623.2\n \n10,803.6\n12,072.8\n11.2\n0.0\n252.2\n23.3\n26.8\n1,269.0\n69,691.0\n4,566.9\n29,608.0\n15,822.0\n36,808.1\n342,490.8\n2021\nJan\n1,483.3\n \n42,733.9\n \n77,994.4\n \n13,109.2\n \n40,071.8\n \n10,922.0\n10,322.7\n10.2\n0.0\n212.4\n16.7\n18.0\n1,264.3\n77,984.0\n5,315.2\n25,036.2\n15,951.2\n41,028.5\n363,474.0\nFeb\n1,735.4\n \n41,180.7\n \n76,140.3\n \n17,748.1\n \n39,141.4\n \n6,341.4\n15,612.1\n9.2\n0.0\n238.0\n24.1\n22.7\n1,493.7\n84,845.3\n5,413.6\n28,339.2\n19,441.2\n42,761.3\n380,487.7\nMar\n1,457.1\n \n40,953.3\n \n83,032.1\n \n6,945.5\n \n42,516.8\n \n8,733.6\n17,602.7\n8.4\n19.2\n449.7\n15.2\n21.7\n1,400.3\n90,291.7\n4,912.2\n32,908.1\n22,849.5\n40,104.9\n394,221.9\nApr\n1,699.7\n \n40,964.4\n \n85,330.2\n \n6,844.8\n \n49,733.4\n \n7,679.0\n19,384.3\n7.7\n19.2\n571.8\n19.9\n12.7\n1,336.7\n104,118.1\n5,432.6\n34,537.9\n25,207.8\n41,034.6\n423,934.8\nMay\n1,906.1\n \n30,579.1\n \n94,330.9\n \n7,907.2\n \n63,644.8\n \n11,582.4\n19,197.1\n7.0\n152.7\n611.0\n21.8\n16.6\n1,263.7\n111,185.7\n5,063.0\n35,592.3\n24,975.4\n40,256.6\n448,293.6\nJun\n1,702.8\n \n30,255.6\n \n75,795.2\n \n25,605.9\n \n72,780.6\n \n17,601.3\n17,610.8\n6.5\n19.5\n1,385.2\n17.9\n77.8\n1,511.9\n125,592.3\n5,203.8\n26,856.5\n29,616.4\n42,418.7\n474,058.5\nJul\n2,139.9\n \n30,509.1\n \n104,983.5\n \n17,817.9\n \n82,032.9\n \n25,314.3\n23,160.6\n6.0\n290.8\n1,264.1\n17.3\n67.8\n1,351.1\n135,107.8\n5,762.2\n26,869.2\n33,897.2\n42,726.7\n533,318.3\nAug\n2,551.1\n \n33,323.4\n \n93,806.9\n \n11,919.2\n \n72,753.9\n \n25,194.9\n35,371.1\n5.4\n339.7\n1,111.2\n22.5\n63.9\n1,583.3\n150,558.7\n7,014.2\n32,281.1\n34,820.2\n46,819.4\n549,540.1\nSep\n2,853.7\n \n38,500.1\n \n100,996.0\n \n8,626.8\n \n68,707.9\n \n25,023.4\n36,196.3\n5.1\n366.9\n948.5\n21.1\n62.5\n1,531.1\n154,818.9\n6,587.8\n31,981.0\n35,461.8\n45,544.7\n558,233.5\nOct\n2,611.1\n \n50,074.7\n \n108,009.2\n \n9,575.8\n \n89,822.4\n \n26,924.2\n43,786.5\n4.3\n188.1\n1,054.2\n21.2\n75.4\n1,683.9\n172,358.5\n6,987.7\n49,581.0\n47,370.6\n47,611.9\n657,740.6\nNov\n2,721.5\n \n53,424.3\n \n107,781.7\n \n15,560.6\n \n74,072.3\n \n29,748.5\n47,418.1\n3.7\n187.0\n2,678.7\n21.2\n74.8\n1,882.5\n195,765.6\n7,682.2\n52,327.7\n45,567.2\n54,967.5\n691,885.0\nDec\n2,838.3\n \n50,031.0\n \n118,451.3\n \n13,654.0\n \n91,352.6\n \n33,690.9\n41,452.1\n3.0\n186.0\n6,192.4\n21.1\n167.5\n2,998.6\n212,438.0\n14,917.3\n60,917.0\n48,759.9\n71,817.7\n769,888.8\n2022\nJan\n2,891.2\n \n53,378.3\n \n116,654.8\n \n13,232.3\n \n69,668.2\n \n30,774.3\n40,241.6\n2.4\n186.8\n2,906.7\n20.3\n163.0\n4,023.2\n228,616.6\n16,284.0\n53,627.8\n55,303.6\n85,737.0\n773,712.0\nFeb\n2,577.7\n \n62,064.5\n \n122,479.8\n \n17,480.5\n \n76,802.2\n \n28,703.5\n49,241.8\n1.6\n0.0\n3,242.5\n20.3\n158.1\n5,761.9\n249,205.9\n16,681.8\n55,099.6\n59,171.4\n86,732.0\n835,425.0\nMar\n2,111.5\n \n76,544.2\n \n142,962.5\n \n19,239.6\n \n87,884.5\n \n43,284.1\n50,566.9\n0.9\n0.0\n2,970.2\n19.4\n253.4\n6,635.8\n296,282.4\n16,435.1\n65,660.6\n69,287.0\n94,293.1\n974,431.2\nApr\n2,624.9\n \n74,716.9\n \n160,466.5\n \n28,352.1\n \n123,190.3\n \n26,628.8\n63,944.8\n0.2\n0.0\n2,583.9\n37.5\n252.4\n7,258.1\n338,207.2\n30,154.8\n53,372.3\n73,993.0\n90,352.8\n1,076,136.5\nMay\n3,155.9\n \n142,118.9\n \n236,166.0\n \n35,928.9\n \n207,812.8\n \n61,757.6\n70,936.8\n0.0\n155.0\n3,762.8\n41.3\n289.0\n16,588.0\n455,287.9\n36,125.5\n134,993.5\n111,577.7\n130,617.1\n1,647,314.7\nJun\n2,801.2\n \n138,347.1\n \n266,691.8\n \n45,952.0\n \n241,920.1\n \n63,631.8\n86,890.0\n0.0\n654.0\n5,297.4\n61.2\n226.3\n14,282.6\n549,799.2\n38,578.3\n169,511.8\n130,604.3\n205,601.3\n1,960,850.3\nJul\n2,427.6\n \n159,024.6\n \n315,832.5\n \n39,388.2\n \n230,432.5\n \n41,246.8\n91,509.2\n0.0\n394.3\n4,940.5\n100.7\n349.7\n22,911.0\n638,556.7\n45,361.4\n144,090.2\n143,606.3\n242,024.6\n2,122,196.7\nAug\n2,640.6\n \n263,637.4\n \n411,439.9\n \n69,203.5\n \n311,107.0\n \n29,186.6\n100,187.1\n0.0\n330.1\n6,912.2\n113.5\n287.1\n46,504.1\n764,466.3\n46,788.2\n167,029.4\n251,442.9\n244,934.2\n2,716,210.1\nSep\n3,030.7\n \n289,230.8\n \n504,071.1\n \n75,446.7\n \n417,007.1\n \n18,185.0\n143,464.9\n0.0\n267.4\n8,265.9\n115.1\n306.3\n41,560.9\n902,078.3\n51,664.5\n146,133.1\n231,760.0\n285,781.8\n3,118,369.8\nOct\n3,022.6\n \n300,240.3\n \n525,870.3\n \n104,483.2\n \n389,979.7\n \n22,895.3\n151,757.7\n0.0\n204.7\n4,590.6\n116.5\n342.0\n43,335.5\n936,397.1\n58,632.8\n165,306.9\n267,183.8\n298,996.3\n3,273,355.4\nNov\n3,251.4\n \n286,365.2\n \n575,885.7\n \n111,716.1\n \n342,790.1\n \n17,089.0\n198,814.4\n0.0\n142.0\n6,078.2\n119.5\n303.6\n43,195.4\n1,042,144.5\n73,069.8\n170,944.8\n232,107.1\n302,373.7\n3,406,390.5\nDec\n3,361.7\n \n295,435.1\n \n652,284.4\n \n119,932.8\n \n351,906.8\n \n7,965.4\n288,844.0\n0.0\n20,072.7\n8,831.7\n114.4\n282.6\n30,272.3\n1,143,910.8\n84,048.5\n159,126.2\n234,748.7\n418,944.7\n3,820,082.5\n2023\nJan\n4,923.3\n \n379,841.7\n \n704,168.6\n \n151,980.1\n \n389,342.8\n \n-1,443.6\n319,807.4\n0.0\n23,774.5\n8,624.7\n228.5\n251.2\n44,113.2\n1,348,919.7\n137,477.6\n227,545.4\n251,246.0\n451,149.8\n4,441,950.8\nFeb\n1,880.1\n \n436,062.8\n \n743,888.5\n \n81,067.5\n \n518,081.0\n \n21,964.4\n332,626.9\n0.0\n26,717.2\n6,974.7\n319.0\n197.4\n44,691.5\n1,538,078.6\n142,383.8\n226,933.0\n281,339.4\n490,831.3\n4,894,037.1\nMar\n2,031.6\n \n425,326.5\n \n817,631.1\n \n112,374.3\n \n531,935.4\n \n41,928.7\n360,626.2\n0.0\n24,689.0\n10,382.7\n432.2\n149.8\n48,725.4\n1,745,783.1\n166,893.5\n554,840.9\n315,882.3\n532,130.1\n5,691,762.4\nApr\n1,844.7\n \n462,081.4\n \n972,122.7\n \n161,740.7\n \n620,095.0\n \n32,207.0\n391,587.8\n0.0\n28,119.0\n19,573.0\n559.8\n99.3\n54,058.4\n1,822,350.9\n178,895.0\n214,270.9\n411,870.0\n572,012.3\n5,943,487.7\nMay\n1,107.2\n \n1,048,116.4\n \n2,049,066.1\n \n309,234.1\n \n1,554,969.0\n \n84,147.3\n653,025.9\n0.0\n76,351.5\n16,564.4\n4,599.1\n80.3\n112,188.1\n4,068,894.1\n366,505.1\n607,438.1\n788,546.8\n884,349.9\n12,625,183.4\nJun\n1,984.5\n \n2,249,201.6\n \n4,424,350.0\n \n471,360.3\n \n3,050,984.1\n \n390,369.2\n981,773.8\n0.0\n212,126.8\n8,070.8\n18,582.4\n83.0\n260,946.3\n8,977,244.2\n669,100.1\n1,390,786.2\n1,582,985.5\n2,782,639.3\n27,472,588.1\nJul\n1,489.0\n \n1,584,403.3\n \n4,137,377.2\n \n380,493.0\n \n3,132,849.9\n \n369,552.6\n1,242,045.2\n0.0\n165,764.7\n17,713.9\n7,368.1\n68.1\n208,253.7\n7,144,225.5\n821,517.0\n829,382.3\n1,411,037.1\n3,124,457.4\n24,577,997.9\nAug\n2,292.1\n \n1,505,916.2\n \n4,651,358.8\n \n448,025.8\n \n3,179,274.3\n \n245,546.0\n1,190,599.0\n0.0\n165,103.2\n7,939.8\n7,469.9\n75.8\n205,341.5\n7,142,066.9\n817,682.7\n701,626.2\n1,348,230.8\n3,086,091.3\n24,704,640.2\nSep\n2,465.6\n \n2,015,621.6\n \n5,263,338.5\n \n560,033.8\n \n3,210,332.7\n \n305,649.1\n1,318,582.7\n0.0\n175,013.5\n10,773.5\n9,935.8\n92.0\n219,878.9\n8,628,418.0\n892,737.1\n776,997.6\n1,646,406.8\n3,310,710.4\n28,346,987.7\nOct\n2,425.4\n \n2,312,575.1\n \n5,910,277.9\n \n751,077.6\n \n2,663,186.5\n \n240,258.0\n1,272,839.7\n0.0\n190,359.3\n21,408.8\n10,816.8\n98.1\n237,525.7\n9,281,352.1\n844,462.4\n958,746.4\n1,741,207.9\n3,433,150.2\n29,871,767.9\nNov\n2,705.3\n \n2,558,589.3\n \n6,324,144.1\n \n730,377.0\n \n2,788,783.6\n \n230,917.5\n1,517,348.4\n0.0\n188,949.4\n34,470.7\n10,921.4\n59.8\n238,702.3\n9,523,818.5\n907,759.0\n1,046,257.0\n2,150,227.0\n3,544,388.6\n31,798,418.9\nSource:Reserve Bank of Zimbabwe,2023\nNotes\n1.Government securities includes treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households and other financial corporations.\nPublic \nEnterprises\nTABLE 4.1: OTHER DEPOSITORY CORPORATIONS -ASSETS\n$ millions\nDebt Securities\nLoans and Advances\n \n \n \n20 \n \n \nDebt Securities\nForeign Liabilities\nCapital\nContigent\nOther\nTOTAL\nand\nLiablities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2020\nJan\n28,570.4\n3,605.9\n2,358.3\n34,534.5\n1,299.1\n92.6\n35,926.3\n255.6\n3,114.7\n185.8\n336.1\n140.1\n12,285.7\n2,965.9\n7,182.1\n62,392.3\nFeb\n37,082.9\n3,939.6\n2,215.0\n43,237.5\n1,674.9\n78.2\n44,990.7\n260.1\n3,357.7\n189.6\n767.7\n154.9\n12,930.2\n5,441.7\n8,745.6\n76,838.2\nMar\n37,923.6\n4,998.7\n2,361.6\n45,283.9\n1,721.0\n409.0\n47,413.9\n476.8\n4,874.8\n258.4\n314.6\n339.9\n15,172.3\n7,917.3\n9,957.3\n86,725.4\nApr\n42,102.4\n5,060.0\n2,530.7\n49,693.1\n1,805.2\n516.3\n52,014.6\n337.6\n4,931.9\n346.4\n312.9\n233.2\n16,105.4\n7,642.8\n10,038.7\n91,963.5\nMay\n48,595.9\n6,274.7\n2,847.3\n57,717.9\n1,840.2\n630.7\n60,188.8\n359.2\n5,129.7\n536.7\n469.1\n365.4\n16,562.4\n7,042.0\n10,273.9\n100,927.2\nJun\n86,454.7\n6,715.3\n4,040.8\n97,210.8\n2,277.4\n1,479.4\n100,967.5\n863.2\n11,761.8\n887.6\n959.9\n348.2\n32,058.2\n24,299.3\n21,339.3\n193,485.0\nJul\n113,233.5\n7,957.5\n6,089.8\n127,280.8\n2,997.8\n1,731.9\n132,010.5\n1,024.3\n14,962.8\n1,387.9\n2,114.7\n348.7\n37,319.8\n28,551.1\n30,279.2\n247,999.1\nAug\n126,039.2\n8,814.1\n5,476.0\n140,329.3\n2,942.4\n850.8\n144,122.5\n1,111.7\n16,780.7\n1,837.1\n3,844.1\n422.5\n40,894.6\n25,354.6\n30,825.6\n265,193.4\nSep\n130,929.6\n9,728.6\n6,981.5\n147,639.7\n2,655.6\n1,531.5\n151,826.9\n1,083.9\n15,206.4\n1,863.1\n2,956.8\n372.2\n42,400.0\n28,289.4\n35,072.8\n279,071.4\nOct\n141,293.3\n12,094.6\n8,429.2\n161,817.1\n2,769.1\n1,799.7\n166,385.9\n1,231.9\n14,868.4\n1,812.7\n4,513.6\n441.7\n43,466.4\n29,764.7\n38,347.5\n300,832.8\nNov\n156,892.5\n13,732.4\n9,029.7\n179,654.6\n2,622.0\n1,569.9\n183,846.6\n1,237.3\n14,800.8\n1,489.5\n5,726.8\n423.6\n46,209.7\n29,821.2\n36,287.5\n319,842.9\nDec\n174,270.2\n16,788.9\n9,949.2\n201,008.3\n2,806.1\n4,340.0\n208,154.4\n1,436.2\n14,145.4\n1,318.6\n757.0\n292.0\n54,752.7\n29,608.0\n32,026.4\n342,490.8\n2021\nJan\n188,337.3\n17,667.3\n11,376.7\n217,381.3\n2,730.8\n5,453.7\n225,565.8\n1,422.4\n15,750.7\n391.1\n600.9\n376.7\n58,123.9\n25,036.2\n36,206.3\n363,474.0\nFeb\n189,154.3\n18,991.1\n14,072.8\n222,218.2\n2,959.1\n4,788.2\n229,965.5\n1,457.4\n15,908.6\n409.2\n581.4\n609.9\n63,583.8\n28,339.2\n39,632.7\n380,487.7\nMar\n193,674.2\n21,569.9\n14,209.4\n229,453.4\n4,691.2\n4,875.8\n239,020.5\n1,641.2\n14,997.2\n75.4\n1,378.2\n408.9\n67,061.8\n32,908.1\n36,730.7\n394,221.9\nApr\n219,936.5\n23,818.3\n13,746.7\n257,501.5\n2,725.1\n5,382.5\n265,609.2\n1,503.8\n15,748.4\n176.5\n939.0\n409.9\n68,812.8\n34,537.9\n36,197.4\n423,934.8\nMay\n232,585.8\n26,296.1\n18,415.5\n277,297.4\n2,205.9\n6,832.6\n286,335.9\n1,525.8\n16,063.1\n654.2\n540.1\n429.0\n69,567.0\n35,592.3\n37,586.2\n448,293.6\nJun\n249,167.5\n27,977.7\n21,449.6\n298,594.8\n2,906.1\n6,295.3\n307,796.2\n1,559.7\n15,430.6\n662.3\n939.0\n462.6\n72,403.8\n26,856.5\n47,947.9\n474,058.5\nJul\n271,359.4\n31,671.3\n23,074.4\n326,105.1\n3,016.7\n5,050.7\n334,172.4\n1,523.2\n16,041.4\n706.9\n750.8\n552.8\n76,406.3\n26,869.2\n76,295.4\n533,318.3\nAug\n275,007.8\n29,893.2\n29,352.2\n334,253.2\n3,661.5\n5,912.2\n343,826.8\n1,873.1\n18,699.5\n1,444.4\n2,300.1\n478.6\n82,627.2\n32,281.1\n66,009.2\n549,540.1\nSep\n301,829.4\n30,564.7\n26,426.5\n358,820.7\n3,719.1\n3,512.9\n366,052.6\n3,191.9\n16,236.1\n1,453.1\n71.3\n375.4\n84,564.6\n31,981.0\n54,307.5\n558,233.5\nOct\n350,366.7\n33,145.0\n27,967.9\n411,479.6\n2,824.1\n3,162.8\n417,466.5\n3,729.7\n21,509.9\n1,095.3\n1,109.9\n503.1\n92,871.8\n49,581.0\n69,873.5\n657,740.6\nNov\n363,455.0\n33,905.6\n33,256.8\n430,617.4\n3,325.7\n2,899.2\n436,842.3\n4,007.8\n19,465.9\n2,726.5\n1,556.1\n347.1\n104,310.9\n52,327.7\n70,300.6\n691,885.0\nDec\n396,412.5\n33,935.5\n37,464.8\n467,812.7\n3,922.1\n4,020.7\n475,755.5\n3,696.3\n23,643.2\n2,808.1\n2,405.3\n139.8\n128,421.4\n60,917.0\n72,102.3\n769,888.8\n2022\nJan\n392,702.2\n32,298.0\n39,346.3\n464,346.5\n2,962.5\n4,027.0\n471,336.0\n3,685.3\n25,398.5\n2,688.6\n1,416.9\n230.5\n144,852.4\n53,627.8\n70,476.0\n773,712.0\nFeb\n413,978.3\n37,494.3\n47,592.5\n499,065.1\n3,229.3\n4,407.7\n506,702.1\n4,456.2\n30,483.6\n2,120.4\n1,769.7\n226.8\n153,788.5\n55,099.6\n80,778.2\n835,425.0\nMar\n488,137.1\n37,893.9\n54,213.9\n580,244.9\n3,062.2\n5,330.5\n588,637.7\n4,510.9\n33,995.7\n2,137.9\n3,281.0\n810.6\n175,156.3\n65,660.6\n100,240.6\n974,431.2\nApr\n562,613.7\n46,129.7\n52,760.1\n661,503.5\n6,377.5\n7,656.8\n675,537.9\n4,246.9\n38,472.7\n2,173.0\n3,877.2\n486.8\n178,614.3\n53,372.3\n119,355.4\n1,076,136.5\nMay\n830,166.0\n61,112.6\n70,113.9\n961,392.5\n7,310.9\n7,417.6\n976,120.9\n6,165.3\n73,411.8\n2,383.3\n3,241.0\n321.8\n243,544.4\n134,993.5\n207,132.5\n1,647,314.7\nJun\n961,316.9\n66,716.9\n81,118.5\n1,109,152.4\n5,627.3\n10,226.2\n1,125,005.9\n7,157.9\n83,048.1\n2,898.5\n4,589.8\n345.2\n355,060.9\n169,511.8\n213,232.2\n1,960,850.3\nJul\n1,016,820.2\n79,550.5\n94,495.2\n1,190,865.8\n1,789.6\n9,363.5\n1,202,018.9\n8,137.9\n100,313.8\n2,814.9\n5,020.5\n1,339.1\n419,883.3\n144,090.2\n238,578.1\n2,122,196.7\nAug\n1,367,431.3\n85,931.5\n134,512.9\n1,587,875.7\n2,415.4\n7,892.4\n1,598,183.5\n12,785.6\n119,851.6\n3,230.7\n5,771.2\n555.2\n491,336.5\n167,029.4\n317,466.4\n2,716,210.1\nSep\n1,648,027.7\n92,678.5\n157,504.6\n1,898,210.8\n1,482.9\n8,707.2\n1,908,401.0\n14,047.5\n143,842.3\n3,720.2\n9,246.7\n587.2\n553,942.2\n146,133.1\n338,449.6\n3,118,369.8\nOct\n1,615,381.5\n76,774.2\n166,880.7\n1,859,036.4\n2,028.0\n6,673.7\n1,867,738.0\n15,558.9\n153,649.9\n28,072.2\n8,610.3\n762.5\n581,740.3\n165,306.9\n451,916.4\n3,273,355.4\nNov\n1,771,644.8\n81,518.1\n189,465.9\n2,042,628.9\n1,547.6\n6,731.4\n2,050,907.9\n13,438.5\n139,370.8\n19,973.5\n10,489.1\n339.6\n612,977.2\n170,944.8\n387,949.1\n3,406,390.5\nDec\n1,990,867.6\n90,317.0\n234,004.4\n2,315,189.0\n2,754.1\n7,866.7\n2,325,809.8\n14,149.0\n177,214.1\n10,597.8\n15,234.4\n752.5\n750,161.5\n159,126.2\n367,037.4\n3,820,082.5\n2023\nJan\n2,270,946.6\n100,094.1\n275,805.1\n2,646,845.8\n1,676.5\n41,821.3\n2,690,343.7\n15,056.5\n196,129.5\n4,974.3\n12,291.7\n675.5\n881,874.7\n227,545.4\n413,059.5\n4,441,950.8\nFeb\n2,496,192.1\n98,177.2\n294,332.5\n2,888,701.8\n1,956.9\n11,040.2\n2,901,698.9\n15,711.7\n225,209.4\n8,092.9\n20,822.5\n3,109.0\n951,831.6\n226,933.0\n540,628.1\n4,894,037.1\nMar\n2,710,394.6\n121,937.7\n333,589.3\n3,165,921.6\n1,430.8\n6,188.7\n3,173,541.1\n16,082.6\n256,206.0\n9,639.9\n22,996.8\n3,714.6\n1,036,325.4\n554,840.9\n618,415.2\n5,691,762.4\nApr\n3,144,048.4\n159,872.5\n269,932.0\n3,573,852.9\n573.4\n9,702.2\n3,584,128.5\n1,843.4\n318,092.2\n13,321.9\n29,787.9\n6,418.8\n1,137,637.3\n214,270.9\n637,986.8\n5,943,487.7\nMay\n6,481,742.5\n169,496.7\n556,927.2\n7,208,166.4\n1,068.6\n50,511.7\n7,259,746.7\n4,659.4\n783,531.0\n78,332.6\n74,083.0\n30,583.3\n2,224,856.6\n607,438.1\n1,561,952.6\n12,625,183.4\nJun\n12,937,869.2\n240,252.2\n1,073,317.8\n14,251,439.2\n4,578.8\n432,610.2\n14,688,628.1\n4,243.6\n1,833,341.2\n39,166.6\n112,338.9\n64,321.9\n6,245,056.0 1,390,786.2 3,094,705.7\n27,472,588.1\nJul\n11,864,787.9\n285,723.5\n828,095.7\n12,978,607.1\n30,380.7\n380,435.8\n13,389,423.7\n2,137.4\n1,458,906.6\n87,827.2\n160,696.4\n58,256.2\n5,865,068.7\n829,382.3\n2,726,299.5\n24,577,997.9\nAug\n12,168,928.8\n353,674.2\n862,852.8\n13,385,455.8\n23,457.8\n381,525.5\n13,790,439.1\n3,182.7\n1,483,108.2\n84,841.4\n154,160.3\n56,751.6\n5,646,934.2\n701,626.2\n2,783,596.5\n24,704,640.2\nSep\n14,342,241.3\n404,040.4\n947,184.1\n15,693,465.8\n11,309.1\n114,502.6\n15,819,277.6\n2,685.5\n1,688,992.2\n82,493.4\n168,880.8\n90,032.4\n6,410,594.6\n776,997.6\n3,307,033.6\n28,346,987.7\nOct\n15,103,817.1\n439,336.7\n1,190,702.7\n16,733,856.4\n8,575.8\n147,053.3\n16,889,485.5\n3,497.2\n1,573,857.1\n84,628.9\n176,455.5\n83,441.8\n6,756,087.7\n958,746.4\n3,345,567.7\n29,871,767.9\nNov\n15,816,643.6\n534,621.6\n1,241,055.7\n17,592,320.9\n92,509.4\n133,475.4\n17,818,305.6\n4,173.2\n1,784,153.1\n92,939.9\n244,115.1\n89,997.7\n7,059,070.8 1,046,257.0 3,659,406.4\n31,798,418.9\nSource:Reserve Bank of Zimbabwe,2023\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\n$ millions\n \n \n \n21 \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nOther \nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nGovernment\nGovernment\nEnterprises\n Institutional Units3\nOther claims\nAssets\nOther Assets\nAssets\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2020\nJan\n165.80\n \n2,845.62\n \n12,018.43\n \n708.00\n \n7,706.57\n \n1,811.38\n \n4,029.43\n \n-\n \n125.52\n \n14.97\n \n5.11\n \n12.17\n \n326.11\n \n10,766.91\n \n77.59\n \n2,965.93\n \n3,395.90\n \n8,058.15\n \n55,033.6\n \nFeb\n251.70\n \n2,756.57\n \n12,731.97\n \n889.16\n \n8,264.76\n \n1,532.87\n \n3,877.19\n \n-\n \n117.45\n \n13.99\n \n5.15\n \n11.56\n \n329.47\n \n11,656.91\n \n88.37\n \n5,441.70\n \n11,907.90\n \n8,653.69\n \n68,530.4\n \nMar\n242.41\n \n3,063.92\n \n14,545.58\n \n1,948.14\n \n12,381.17\n \n2,497.47\n \n4,373.76\n \n-\n \n0.08\n \n20.23\n \n4.39\n \n11.39\n \n765.82\n \n14,041.67\n \n127.46\n \n7,917.31\n \n5,718.53\n \n9,244.62\n \n76,904.0\n \nApr\n263.29\n \n3,147.75\n \n16,673.44\n \n1,287.51\n \n13,285.14\n \n3,056.32\n \n4,235.96\n \n-\n \n0.08\n \n18.39\n \n4.47\n \n9.75\n \n834.72\n \n14,864.30\n \n129.90\n \n7,642.80\n \n6,534.14\n \n9,703.93\n \n81,691.9\n \nMay\n284.33\n \n3,144.57\n \n19,827.46\n \n1,553.68\n \n15,003.29\n \n3,130.38\n \n4,160.50\n \n-\n \n0.12\n \n45.79\n \n4.53\n \n9.61\n \n768.01\n \n17,762.27\n \n143.44\n \n7,042.04\n \n6,012.40\n \n9,845.09\n \n88,737.5\n \nJun\n515.11\n \n8,372.39\n \n26,368.55\n \n3,570.85\n \n34,550.44\n \n7,527.46\n \n5,841.98\n \n-\n \n0.12\n \n90.14\n \n4.29\n \n9.41\n \n2,010.79\n \n26,638.87\n \n215.56\n \n24,299.33\n \n14,590.26\n \n18,983.05\n \n173,588.6\n \nJul\n577.99\n \n16,536.53\n \n49,470.13\n \n4,219.81\n \n40,259.84\n \n11,399.93\n \n6,357.84\n \n-\n \n-\n \n74.57\n \n4.33\n \n12.61\n \n1,025.78\n \n33,054.99\n \n229.06\n \n28,551.07\n \n10,247.64\n \n19,646.49\n \n221,668.6\n \nAug\n821.16\n \n26,519.73\n \n49,165.59\n \n4,265.44\n \n38,763.72\n \n14,219.24\n \n6,484.68\n \n-\n \n-\n \n39.07\n \n14.05\n \n14.74\n \n1,046.29\n \n38,741.31\n \n231.00\n \n25,354.64\n \n9,460.49\n \n19,961.16\n \n235,102.3\n \nSep\n891.26\n \n27,646.41\n \n51,169.67\n \n3,898.65\n \n38,420.20\n \n14,126.83\n \n6,354.19\n \n-\n \n-\n \n107.40\n \n9.61\n \n22.30\n \n1,050.38\n \n41,088.91\n \n228.95\n \n28,289.36\n \n17,608.70\n \n19,375.08\n \n250,287.9\n \nOct\n896.48\n \n29,309.79\n \n60,589.19\n \n3,602.58\n \n38,877.31\n \n13,530.74\n \n7,763.97\n \n-\n \n20.06\n \n109.83\n \n17.57\n \n22.18\n \n1,019.00\n \n48,440.92\n \n268.07\n \n29,764.70\n \n15,978.22\n \n19,616.63\n \n269,827.2\n \nNov\n919.42\n \n31,596.89\n \n67,899.10\n \n3,494.87\n \n39,693.38\n \n14,134.74\n \n7,098.29\n \n-\n \n0.02\n \n110.37\n \n20.00\n \n16.81\n \n1,269.94\n \n54,496.74\n \n259.90\n \n29,821.16\n \n16,683.48\n \n19,526.70\n \n287,041.8\n \nDec\n1,019.76\n \n36,507.59\n \n70,392.07\n \n4,949.48\n \n37,346.17\n \n10,803.58\n \n9,985.57\n \n-\n \n-\n \n1.18\n \n23.30\n \n26.76\n \n1,269.01\n \n62,953.03\n \n718.16\n \n29,608.01\n \n12,793.91\n \n28,230.82\n \n306,628.4\n \n2021\nJan\n1,237.43\n \n39,565.64\n \n71,463.64\n \n12,288.89\n \n39,092.85\n \n10,921.99\n \n8,281.80\n \n-\n \n-\n \n1.18\n \n16.67\n \n18.01\n \n1,264.28\n \n71,090.96\n \n718.83\n \n25,036.22\n \n12,333.21\n \n32,123.11\n \n325,454.7\n \nFeb\n1,320.27\n \n38,100.03\n \n69,341.48\n \n16,867.76\n \n38,108.83\n \n6,341.39\n \n12,518.15\n \n-\n \n-\n \n1.26\n \n24.15\n \n22.69\n \n1,493.66\n \n77,324.34\n \n774.89\n \n28,339.17\n \n15,953.14\n \n33,612.14\n \n340,143.4\n \nMar\n1,244.16\n \n38,369.53\n \n76,479.44\n \n5,317.61\n \n41,401.24\n \n8,733.65\n \n15,889.61\n \n-\n \n19.21\n \n34.56\n \n15.17\n \n21.67\n \n1,309.75\n \n80,607.03\n \n878.97\n \n32,908.13\n \n19,302.34\n \n30,861.86\n \n353,393.9\n \nApr\n1,430.83\n \n38,008.89\n \n79,592.64\n \n5,639.40\n \n48,564.03\n \n7,679.05\n \n18,267.01\n \n-\n \n19.23\n \n62.89\n \n19.86\n \n12.71\n \n1,336.70\n \n91,062.16\n \n956.75\n \n34,537.88\n \n21,214.88\n \n32,383.77\n \n380,788.7\n \nMay\n1,648.09\n \n28,677.21\n \n87,611.51\n \n6,479.66\n \n59,745.10\n \n11,582.44\n \n18,846.75\n \n-\n \n152.75\n \n93.37\n \n21.77\n \n16.58\n \n1,263.75\n \n94,790.46\n \n990.41\n \n35,592.28\n \n21,398.95\n \n31,307.45\n \n400,218.5\n \nJun\n1,419.27\n \n28,452.53\n \n69,413.26\n \n24,215.35\n \n70,835.98\n \n17,601.31\n \n17,152.75\n \n-\n \n19.46\n \n92.91\n \n17.91\n \n77.79\n \n1,511.86\n \n106,954.15\n \n1,247.08\n \n26,856.45\n \n26,444.57\n \n33,288.94\n \n425,601.6\n \nJul\n1,794.72\n \n29,100.73\n \n97,429.50\n \n15,901.02\n \n79,937.02\n \n25,314.30\n \n21,665.10\n \n-\n \n290.76\n \n47.39\n \n17.32\n \n67.80\n \n1,351.13\n \n117,348.16\n \n1,301.18\n \n26,869.18\n \n29,079.64\n \n33,587.68\n \n481,102.6\n \nAug\n2,137.72\n \n31,734.84\n \n85,441.98\n \n9,099.10\n \n70,391.64\n \n25,194.95\n \n31,434.20\n \n-\n \n339.72\n \n51.28\n \n22.49\n \n63.94\n \n1,583.28\n \n132,522.63\n \n1,337.19\n \n32,281.12\n \n30,022.43\n \n37,697.05\n \n491,355.6\n \nSep\n2,417.81\n \n36,259.54\n \n93,032.71\n \n6,164.78\n \n66,640.78\n \n25,023.38\n \n31,460.81\n \n-\n \n366.88\n \n57.60\n \n21.07\n \n62.45\n \n1,531.08\n \n134,780.92\n \n1,342.62\n \n31,980.97\n \n30,439.34\n \n34,630.85\n \n496,213.6\n \nOct\n1,993.06\n \n47,379.62\n \n99,470.02\n \n7,339.71\n \n86,302.62\n \n26,924.18\n \n37,639.16\n \n-\n \n188.07\n \n121.59\n \n21.20\n \n75.41\n \n1,683.89\n \n149,477.36\n \n1,523.34\n \n49,580.96\n \n40,853.06\n \n36,664.31\n \n587,237.6\n \nNov\n2,168.80\n \n49,327.15\n \n100,125.90\n \n12,723.73\n \n71,667.33\n \n29,748.47\n \n41,015.56\n \n-\n \n187.03\n \n999.12\n \n21.24\n \n74.76\n \n1,882.53\n \n168,661.25\n \n1,484.24\n \n52,327.68\n \n40,073.22\n \n43,878.52\n \n616,366.5\n \nDec\n2,315.32\n \n46,412.99\n \n109,803.84\n \n10,942.92\n \n87,347.07\n \n33,690.93\n \n38,610.29\n \n-\n \n185.99\n \n4,146.13\n \n21.09\n \n167.53\n \n2,798.61\n \n184,836.87\n \n3,368.75\n \n60,916.98\n \n41,811.67\n \n59,011.63\n \n686,388.6\n \n2022\nJan\n2,359.27\n \n49,206.02\n \n108,119.97\n \n10,419.90\n \n66,808.45\n \n30,774.31\n \n38,636.84\n \n-\n \n186.80\n \n801.50\n \n20.33\n \n163.02\n \n3,628.73\n \n199,495.34\n \n2,997.94\n \n53,627.76\n \n47,405.91\n \n69,989.80\n \n684,641.9\n \nFeb\n1,971.78\n \n57,553.54\n \n112,522.99\n \n14,300.66\n \n70,750.63\n \n28,703.53\n \n44,705.21\n \n-\n \n-\n \n976.55\n \n20.34\n \n158.06\n \n5,367.16\n \n215,520.37\n \n3,055.50\n \n55,099.61\n \n53,459.12\n \n70,832.47\n \n734,997.5\n \nMar\n1,541.49\n \n70,856.33\n \n130,423.48\n \n15,503.46\n \n82,662.70\n \n43,284.13\n \n44,874.23\n \n-\n \n-\n \n1,380.20\n \n19.40\n \n253.42\n \n6,240.94\n \n258,715.05\n \n3,092.69\n \n65,660.61\n \n58,874.69\n \n76,938.87\n \n860,321.7\n \nApr\n1,939.64\n \n70,204.43\n \n144,168.02\n \n23,452.88\n \n117,033.42\n \n26,628.79\n \n57,772.47\n \n-\n \n-\n \n722.54\n \n37.54\n \n252.44\n \n6,858.06\n \n305,476.79\n \n4,348.46\n \n53,372.28\n \n62,788.55\n \n71,414.75\n \n946,471.1\n \nMay\n2,397.94\n \n131,996.38\n \n211,837.59\n \n31,586.61\n \n190,366.81\n \n61,757.62\n \n64,373.91\n \n-\n \n154.99\n \n1,559.14\n \n41.28\n \n289.00\n \n16,193.81\n \n398,048.90\n \n4,712.74\n \n134,993.54\n \n94,851.60\n \n111,543.84\n \n1,456,705.7\n \nJun\n2,263.18\n \n127,839.16\n \n234,109.43\n \n40,937.28\n \n219,607.39\n \n63,631.76\n \n83,690.44\n \n-\n \n653.97\n \n2,159.12\n \n61.20\n \n226.29\n \n13,888.60\n \n478,163.38\n \n8,954.46\n \n169,511.81\n \n110,528.09\n \n168,440.54\n \n1,724,666.1\n \nJul\n1,578.47\n \n147,217.74\n \n284,912.89\n \n34,334.13\n \n202,815.28\n \n41,246.78\n \n86,971.63\n \n-\n \n394.34\n \n1,852.14\n \n100.65\n \n349.68\n \n22,516.21\n \n556,692.12\n \n9,737.92\n \n144,090.18\n \n129,869.55\n \n192,524.32\n \n1,857,204.0\n \nAug\n1,630.70\n \n247,190.46\n \n377,078.80\n \n64,650.96\n \n273,181.97\n \n29,186.59\n \n95,346.12\n \n-\n \n330.12\n \n3,556.96\n \n113.50\n \n287.14\n \n26,564.57\n \n681,253.30\n \n11,493.92\n \n167,029.36\n \n238,442.98\n \n194,745.11\n \n2,412,082.6\n \nSep\n1,791.71\n \n270,594.59\n \n465,301.31\n \n68,020.95\n \n370,323.69\n \n18,184.96\n \n134,414.53\n \n-\n \n267.40\n \n4,916.56\n \n115.11\n \n306.33\n \n21,773.50\n \n806,774.24\n \n12,680.89\n \n146,133.14\n \n215,417.68\n \n219,933.24\n \n2,756,949.8\n \nOct\n1,704.79\n \n281,204.64\n \n480,106.49\n \n94,573.08\n \n343,440.15\n \n22,895.35\n \n136,939.74\n \n-\n \n204.69\n \n2,201.55\n \n116.48\n \n341.96\n \n22,935.50\n \n852,069.39\n \n15,525.65\n \n165,306.91\n \n232,188.99\n \n245,924.22\n \n2,897,679.6\n \nNov\n1,644.95\n \n259,109.18\n \n533,438.97\n \n101,870.32\n \n299,715.01\n \n17,089.04\n \n180,534.44\n \n-\n \n141.97\n \n2,292.28\n \n119.53\n \n303.55\n \n22,178.73\n \n960,814.77\n \n15,450.39\n \n170,944.78\n \n196,338.19\n \n250,551.19\n \n3,012,537.3\n \nDec\n1,778.71\n \n263,863.65\n \n603,136.26\n \n110,935.77\n \n299,087.30\n \n7,965.37\n \n266,725.41\n \n-\n \n79.26\n \n3,887.78\n \n114.42\n \n282.61\n \n30,272.25\n \n1,066,654.12\n \n16,130.63\n \n159,126.16\n \n189,560.01\n \n344,235.10\n \n3,363,834.8\n \n2023\nJan\n2,391.61\n \n340,953.56\n \n654,740.29\n \n143,455.70\n \n335,380.17\n \n(1,443.59)\n \n301,026.07\n \n-\n \n105.97\n \n4,873.87\n \n228.45\n \n251.24\n \n44,113.17\n \n1,307,512.98\n \n17,767.70\n \n227,545.42\n \n204,830.78\n \n374,080.77\n \n3,957,814.2\n \nFeb\n1,470.56\n \n366,544.71\n \n691,937.49\n \n71,097.36\n \n452,795.43\n \n21,074.53\n \n306,913.92\n \n-\n \n50.02\n \n1,524.98\n \n318.96\n \n197.44\n \n44,691.50\n \n1,481,851.05\n \n18,037.18\n \n226,932.96\n \n224,983.29\n \n411,002.80\n \n4,321,424.2\n \nMar\n1,771.98\n \n344,570.46\n \n755,463.34\n \n103,284.07\n \n478,333.21\n \n41,928.66\n \n330,669.68\n \n-\n \n-\n \n3,884.11\n \n432.22\n \n149.78\n \n48,725.38\n \n1,679,284.89\n \n28,439.56\n \n554,840.85\n \n254,605.57\n \n438,790.17\n \n5,065,173.9\n \nApr\n1,631.24\n \n388,822.83\n \n903,029.49\n \n144,252.31\n \n555,886.92\n \n32,206.95\n \n361,846.09\n \n-\n \n-\n \n8,716.45\n \n559.82\n \n99.28\n \n54,058.39\n \n1,722,384.40\n \n28,899.91\n \n214,270.92\n \n321,765.39\n \n476,263.19\n \n5,214,693.6\n \nMay\n1,010.26\n \n907,818.70\n \n1,932,225.57\n \n281,052.93\n \n1,351,116.97\n \n84,147.32\n \n570,367.60\n \n-\n \n-\n \n8,974.78\n \n4,599.15\n \n80.34\n \n112,188.06\n \n3,844,133.80\n \n65,696.39\n \n607,438.10\n \n669,908.72\n \n758,154.17\n \n11,198,912.9\n \nJun\n1,762.11\n \n1,979,000.71\n \n4,218,755.04\n \n444,538.09\n \n2,584,596.63\n \n350,042.51\n \n865,465.55\n \n-\n \n-\n \n221.09\n \n10,133.46\n \n8,052.34\n \n260,946.26\n \n8,487,837.63\n \n92,224.26\n \n1,390,786.24\n \n1,304,228.92\n \n2,222,499.38\n \n24,221,090.2\n \nJul\n1,305.13\n \n1,428,604.02\n \n3,898,282.53\n \n359,151.15\n \n2,646,743.26\n \n337,541.82\n \n1,133,463.14\n \n-\n \n-\n \n153.30\n \n7,368.09\n \n68.07\n \n208,253.70\n \n6,917,007.30\n \n129,308.58\n \n829,382.28\n \n1,155,945.57\n \n2,438,538.20\n \n21,491,116.1\n \nAug\n1,664.09\n \n1,370,651.81\n \n4,309,693.74\n \n391,792.23\n \n2,693,989.06\n \n208,098.88\n \n1,084,784.90\n \n-\n \n-\n \n138.30\n \n7,469.95\n \n75.80\n \n205,341.47\n \n6,863,348.14\n \n127,816.16\n \n701,626.16\n \n1,081,800.09\n \n2,446,465.02\n \n21,494,755.8\n \nSep\n1,503.56\n \n1,763,364.33\n \n4,914,305.55\n \n517,813.92\n \n2,760,807.78\n \n247,094.60\n \n1,204,684.14\n \n-\n \n-\n \n9.75\n \n9,935.82\n \n92.05\n \n219,878.94\n \n8,245,053.80\n \n151,685.43\n \n776,997.57\n \n1,312,147.78\n \n2,668,520.81\n \n24,793,895.8\n \nOct\n1,977.18\n \n2,059,471.85\n \n5,625,069.70\n \n562,790.91\n \n2,202,475.21\n \n175,235.94\n \n1,172,130.22\n \n-\n \n-\n \n0.03\n \n10,816.83\n \n98.06\n \n237,525.73\n \n8,864,363.09\n \n153,534.70\n \n958,746.42\n \n1,351,846.54\n \n2,767,099.33\n \n26,143,181.7\n \nNov\n2,295.18\n \n2,278,921.91\n \n5,913,094.15\n \n568,556.41\n \n2,451,981.00\n \n180,229.25\n \n1,337,040.40\n \n-\n \n-\n \n0.03\n \n10,921.42\n \n59.77\n \n238,702.30\n \n9,040,518.08\n \n158,702.11\n \n1,046,256.98\n \n1,702,370.26\n \n2,868,031.98\n \n27,797,681.2\n \nSource:Reserve Bank of Zimbabwe,2023\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households and other financial corporations, \nTABLE 5.1: COMMERCIAL BANKS -ASSETS\n$ millions\nDebt Securities\nLoans and Advances\n \n \n \n22 \n \n \nZWL$ millions\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nDebt Securities\nForeign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2020\nJan\n27,276.4\n1,787.3\n1,876.0\n30,939.8\n1,026.0\n76.3\n32,042.1\n232.1\n2,170.0\n185.8\n236.2\n140.1\n10,357.6\n2,965.9\n6,703.8\n55,033.6\nFeb\n35,796.5\n1,869.8\n1,712.8\n39,379.1\n1,404.1\n62.2\n40,845.3\n238.9\n2,391.2\n189.6\n209.2\n154.9\n10,877.8\n5,441.7\n8,181.8\n68,530.4\nMar\n36,078.2\n2,458.2\n1,884.9\n40,421.2\n1,430.6\n393.1\n42,245.0\n468.8\n3,731.4\n258.4\n181.2\n339.9\n12,487.9\n7,917.3\n9,274.0\n76,904.0\nApr\n40,156.4\n2,457.6\n2,078.8\n44,692.9\n1,514.8\n496.9\n46,704.6\n333.2\n3,779.7\n346.4\n172.1\n233.2\n13,105.1\n7,642.8\n9,374.8\n81,691.9\nMay\n46,306.1\n2,502.0\n2,405.7\n51,213.8\n1,399.0\n611.4\n53,224.1\n324.9\n3,968.6\n536.7\n319.4\n365.4\n13,454.1\n7,042.0\n9,502.3\n88,737.5\nJun\n67,548.1\n17,859.0\n3,562.0\n88,969.1\n1,931.1\n1,453.1\n92,353.3\n856.9\n9,116.9\n887.6\n681.7\n348.2\n24,773.8\n24,299.3\n20,270.9\n173,588.6\nJul\n89,092.1\n20,865.7\n5,595.6\n115,553.4\n2,671.5\n1,702.4\n119,927.3\n1,014.3\n11,100.4\n1,387.9\n1,907.7\n348.7\n28,563.5\n28,551.1\n28,867.6\n221,668.6\nAug\n102,750.2\n20,005.2\n4,891.9\n127,647.3\n2,577.9\n824.8\n131,049.9\n1,101.5\n12,302.3\n1,837.1\n3,658.1\n412.5\n30,713.4\n25,354.6\n28,672.9\n235,102.3\nSep\n104,770.7\n24,130.0\n6,488.3\n135,389.0\n2,548.1\n1,496.4\n139,433.5\n1,063.5\n11,363.7\n1,863.1\n2,831.0\n372.2\n32,694.4\n28,289.4\n32,377.1\n250,287.9\nOct\n114,057.9\n26,079.1\n7,702.2\n147,839.2\n2,666.6\n1,767.2\n152,273.0\n1,089.2\n11,137.3\n1,812.7\n4,232.9\n441.7\n33,811.1\n29,764.7\n35,264.5\n269,827.2\nNov\n129,129.6\n26,871.0\n8,262.1\n164,262.8\n2,369.5\n1,538.3\n168,170.5\n1,100.4\n11,019.9\n1,489.5\n5,403.8\n423.6\n36,278.2\n29,821.2\n33,334.7\n287,041.8\nDec\n146,151.8\n27,804.4\n8,926.9\n182,883.1\n2,547.6\n4,309.9\n189,740.6\n1,239.9\n10,924.0\n1,318.6\n316.6\n292.0\n43,984.3\n29,608.0\n29,204.3\n306,628.4\n2021\nJan\n158,888.8\n28,456.6\n10,150.2\n197,495.5\n2,580.8\n5,423.4\n205,499.8\n1,142.5\n12,732.6\n391.1\n519.6\n376.7\n50,147.7\n25,036.2\n29,608.5\n325,454.7\nFeb\n162,092.2\n26,146.3\n12,239.7\n200,478.2\n2,809.1\n4,762.5\n208,049.7\n1,150.4\n12,833.2\n409.2\n540.7\n609.9\n54,930.3\n28,339.2\n33,280.7\n340,143.4\nMar\n165,101.1\n30,313.5\n12,276.4\n207,691.0\n4,541.2\n4,845.3\n217,077.6\n1,331.7\n11,620.2\n75.4\n1,136.7\n408.9\n58,208.9\n32,908.1\n30,626.5\n353,393.9\nApr\n191,923.5\n31,441.3\n11,549.5\n234,914.3\n2,195.0\n5,346.7\n242,455.9\n1,190.1\n11,503.5\n176.5\n757.1\n409.9\n60,361.3\n34,537.9\n29,396.5\n380,788.7\nMay\n194,108.9\n40,921.9\n15,896.4\n250,927.2\n1,705.9\n6,802.1\n259,435.2\n1,186.9\n11,783.3\n654.2\n145.2\n429.0\n61,202.0\n35,592.3\n29,790.4\n400,218.5\nJun\n211,950.0\n40,878.5\n18,536.0\n271,364.4\n2,696.6\n6,202.3\n280,263.2\n1,211.8\n11,575.5\n662.3\n368.5\n462.6\n63,417.5\n26,856.5\n40,783.7\n425,601.6\nJul\n226,860.1\n48,928.9\n19,775.4\n295,564.4\n2,991.7\n5,012.2\n303,568.3\n1,169.2\n12,552.8\n706.9\n476.2\n552.8\n66,514.1\n26,869.2\n68,693.1\n481,102.6\nAug\n237,167.0\n38,425.4\n25,114.2\n300,706.5\n3,601.5\n5,873.7\n310,181.7\n1,216.2\n13,354.7\n1,444.4\n1,678.3\n478.6\n72,123.3\n32,281.1\n58,597.3\n491,355.6\nSep\n263,598.2\n37,954.3\n21,954.4\n323,506.9\n3,643.0\n3,469.0\n330,618.9\n2,141.0\n11,770.4\n1,453.1\n-110.6\n375.4\n71,255.0\n31,981.0\n46,729.4\n496,213.6\nOct\n299,038.0\n50,766.0\n22,882.7\n372,686.7\n2,824.1\n3,023.7\n378,534.5\n2,411.8\n14,077.4\n1,095.3\n1,109.9\n503.1\n78,644.6\n49,581.0\n61,280.0\n587,237.6\nNov\n307,063.4\n52,309.9\n27,875.3\n387,248.6\n3,325.7\n2,764.9\n393,339.3\n2,869.4\n12,437.2\n2,726.5\n1,352.5\n347.1\n89,288.6\n52,327.7\n61,678.3\n616,366.5\nDec\n334,599.0\n58,318.5\n30,455.6\n423,373.1\n3,842.1\n3,855.7\n431,070.9\n3,027.0\n13,896.4\n2,808.1\n1,693.3\n139.8\n109,665.4\n60,917.0\n63,170.8\n686,388.6\n2022\nJan\n346,619.5\n43,438.8\n31,158.1\n421,216.4\n2,962.5\n3,864.8\n428,043.7\n2,995.6\n14,406.9\n2,688.6\n1,043.2\n230.5\n122,752.1\n53,627.8\n58,853.6\n684,641.9\nFeb\n358,979.4\n51,510.7\n38,313.7\n448,803.8\n3,229.3\n4,248.7\n456,281.8\n3,834.1\n16,267.7\n2,120.4\n1,338.1\n226.8\n130,981.3\n55,099.6\n68,847.8\n734,997.5\nMar\n422,934.6\n58,283.5\n42,258.5\n523,476.6\n3,062.2\n5,171.3\n531,710.2\n3,850.2\n18,374.8\n2,137.9\n2,779.1\n810.6\n149,781.8\n65,660.6\n85,216.5\n860,321.7\nApr\n479,558.7\n74,880.3\n40,491.0\n594,930.0\n6,377.5\n7,486.7\n608,794.2\n3,792.3\n21,445.6\n2,173.0\n3,173.0\n486.8\n149,610.1\n53,372.3\n103,623.7\n946,471.1\nMay\n666,937.8\n137,419.9\n55,389.8\n859,747.5\n7,310.9\n7,249.8\n874,308.3\n5,769.3\n39,105.1\n2,383.3\n2,207.5\n321.8\n214,978.6\n134,993.5\n182,638.3\n1,456,705.7\nJun\n773,692.7\n154,956.9\n63,511.7\n992,161.3\n4,597.1\n10,018.0\n1,006,776.4\n6,743.2\n42,701.8\n2,898.5\n3,389.3\n345.2\n307,341.8\n169,511.8\n184,958.1\n1,724,666.1\nJul\n810,906.6\n173,134.0\n74,324.5\n1,058,365.1\n717.0\n9,153.8\n1,068,235.9\n7,994.5\n54,168.7\n2,814.9\n2,948.9\n1,339.1\n355,597.9\n144,090.2\n220,013.9\n1,857,204.0\nAug\n1,100,922.1\n219,798.6\n110,595.1\n1,431,315.7\n790.2\n7,675.2\n1,439,781.1\n12,484.6\n64,160.3\n3,230.7\n2,791.8\n555.2\n421,880.4\n167,029.4\n300,169.0\n2,412,082.6\nSep\n1,328,584.6\n256,980.2\n127,051.1\n1,712,616.0\n1,482.9\n8,473.0\n1,722,571.9\n13,789.2\n81,182.4\n3,720.2\n5,632.9\n587.2\n465,063.9\n146,133.1\n318,269.0\n2,756,949.8\nOct\n1,365,908.5\n205,688.8\n128,186.9\n1,699,784.2\n813.8\n6,314.3\n1,706,912.3\n14,933.2\n83,998.0\n28,072.2\n4,282.4\n762.5\n486,396.6\n165,306.9\n407,015.5\n2,897,679.6\nNov\n1,481,503.5\n243,239.9\n146,530.0\n1,871,273.4\n291.3\n6,366.6\n1,877,931.3\n12,665.1\n67,318.9\n19,973.5\n5,349.1\n339.6\n514,200.0\n170,944.8\n343,815.1\n3,012,537.3\nDec\n1,697,008.7\n235,271.2\n181,090.6\n2,113,370.5\n1,514.4\n7,399.5\n2,122,284.4\n13,296.8\n106,071.5\n10,597.8\n9,610.4\n752.5\n621,113.3\n159,126.2\n320,981.8\n3,363,834.8\n2023\nJan\n2,139,458.0\n78,197.7\n215,537.0\n2,433,192.7\n214.3\n41,333.8\n2,474,740.8\n12,923.7\n123,605.0\n4,974.3\n5,669.1\n675.5\n723,452.2\n227,545.4\n384,228.1\n3,957,814.2\nFeb\n1,997,073.4\n398,595.8\n230,549.9\n2,626,219.1\n303.5\n10,655.7\n2,637,178.4\n14,443.3\n140,484.9\n8,092.9\n13,273.6\n3,109.0\n780,290.7\n226,933.0\n497,618.5\n4,321,424.2\nMar\n2,218,678.7\n384,245.5\n262,119.8\n2,865,044.1\n1,272.8\n5,953.0\n2,872,269.9\n15,181.9\n166,322.5\n9,639.9\n15,494.1\n3,714.6\n846,479.9\n554,840.9\n581,230.2\n5,065,173.9\nApr\n2,646,522.9\n382,678.9\n197,662.2\n3,226,864.0\n173.4\n9,463.7\n3,236,501.1\n1,115.5\n201,674.1\n13,321.9\n21,331.0\n6,418.8\n935,402.2\n214,270.9\n584,658.1\n5,214,693.6\nMay\n5,196,712.7\n969,812.4\n435,965.9\n6,602,490.9\n514.9\n50,270.4\n6,653,276.3\n1,287.6\n493,894.8\n78,332.6\n65,967.5\n30,583.3\n1,815,309.9\n607,438.1\n1,452,822.8\n11,198,912.9\nJun\n10,038,744.6\n2,287,818.9\n789,112.9\n13,115,676.4\n1,468.6\n432,367.0\n13,549,512.0\n1,177.5\n1,201,797.0\n39,166.6\n101,465.7\n64,321.9\n5,042,026.4\n1,390,786.2\n2,830,837.1\n24,221,090.2\nJul\n9,592,825.0\n1,787,488.9\n592,115.4\n11,972,429.2\n9,138.5\n380,190.7\n12,361,758.4\n512.4\n847,658.7\n87,827.2\n146,299.0\n58,256.2\n4,649,856.9\n829,382.3\n2,509,565.1\n21,491,116.1\nAug\n9,698,801.3\n1,920,804.2\n622,360.9\n12,241,966.5\n1,479.8\n381,277.2\n12,624,723.5\n863.9\n865,945.4\n84,841.4\n141,305.4\n56,751.6\n4,465,099.7\n701,626.2\n2,553,598.8\n21,494,755.8\nSep\n13,388,822.1\n319,686.0\n695,555.0\n14,404,063.1\n4,754.8\n114,251.5\n14,523,069.4\n504.3\n1,036,635.6\n82,493.4\n152,779.3\n90,032.4\n5,159,376.7\n776,997.6\n2,972,007.2\n24,793,895.8\nOct\n14,087,303.5\n312,655.9\n827,902.5\n15,227,861.9\n1,692.7\n146,801.2\n15,376,355.8\n522.9\n1,106,440.5\n84,628.9\n159,670.3\n83,441.8\n5,427,255.6\n958,746.4\n2,946,119.7\n26,143,181.7\nNov\n14,816,672.7\n306,014.4\n882,972.1\n16,005,659.2\n5,789.4\n133,219.7\n16,144,668.4\n432.3\n1,259,039.0\n92,939.9\n227,935.0\n89,997.7\n5,701,702.0\n1,046,257.0\n3,234,709.9\n27,797,681.2\nSource:Reserve Bank of Zimbabwe,2023\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\n \n \n \n23 \n \n \nForeign\nOther Assets\nNon Financial \nTOTAL\nEnd of\nNotes\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nMortgages\nGovernment\nOther\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2020\nJan\n16.3\n \n322.3\n1,106.8\n \n361.8\n421.8\n \n-\n \n283.0\n \n20.1\n-\n \n-\n \n478.2\n \n-\n \n1,498.8\n \n717.5\n1,552.8\n \n6,779.5\n \nFeb\n14.5\n \n368.2\n977.2\n \n612.5\n370.5\n \n-\n \n357.1\n \n20.1\n-\n \n1.5\n \n503.6\n \n-\n \n2,097.7\n \n735.9\n1,538.8\n \n7,597.4\n \nMar\n20.1\n \n529.4\n1,423.7\n \n261.8\n282.6\n \n-\n \n341.6\n \n19.2\n-\n \n0.6\n \n526.4\n \n-\n \n2,406.4\n \n1165.6\n1,914.1\n \n8,891.5\n \nApr\n33.1\n \n493.1\n914.2\n \n232.1\n384.9\n \n-\n \n424.3\n \n18.1\n-\n \n-\n \n525.9\n \n-\n \n2,568.2\n \n1528.5\n2,134.4\n \n9,256.8\n \nMay\n39.7\n \n434.7\n1,248.4\n \n192.3\n725.0\n \n-\n \n382.4\n \n17.0\n-\n \n-\n \n517.6\n \n-\n \n2,793.4\n \n2669.6\n2,146.1\n \n11,166.3\n \nJun\n88.7\n \n1167.9\n2,857.8\n \n395.9\n1,222.0\n \n-\n \n385.4\n \n13.8\n-\n \n-\n \n653.4\n \n-\n \n4,663.9\n \n2688.0\n4,712.1\n \n18,848.8\n \nJul\n109.1\n \n1780.7\n3,878.9\n \n1342.9\n1,879.4\n \n-\n \n346.6\n \n13.4\n-\n \n-\n \n585.7\n \n-\n \n5,648.0\n \n3879.5\n4,927.7\n \n24,391.8\n \nAug\n142.9\n \n2175.5\n4,799.3\n \n341.7\n2,310.6\n \n-\n \n294.6\n \n13.1\n-\n \n-\n \n688.7\n \n-\n \n6,552.1\n \n4480.3\n6,104.6\n \n27,903.4\n \nSep\n179.8\n \n2469.9\n4,547.1\n \n504.6\n1,027.7\n \n-\n \n218.3\n \n12.9\n-\n \n0.4\n \n741.5\n \n-\n \n6,518.3\n \n2774.9\n6,503.8\n \n25,499.1\n \nOct\n149.1\n \n2787.0\n5,056.1\n \n778.9\n1,182.4\n \n-\n \n206.5\n \n12.3\n-\n \n112.2\n \n772.3\n \n-\n \n6,874.4\n \n2795.4\n6,537.1\n \n27,263.4\n \nNov\n104.3\n \n2935.7\n4,448.9\n \n691.0\n1,412.8\n \n-\n \n1,666.7\n \n11.6\n-\n \n157.8\n \n930.4\n \n-\n \n7,498.6\n \n2571.1\n6,712.9\n \n29,141.9\n \nDec\n116.2\n \n3210.3\n5,085.9\n \n802.0\n1,183.4\n \n-\n \n1,830.2\n \n11.2\n-\n \n251.1\n \n1,008.4\n \n-\n \n8,562.3\n \n2559.4\n7,352.9\n \n31,973.2\n \n2021\nJan\n188.7\n \n2943.3\n5,986.5\n \n793.8\n843.5\n \n-\n \n1,783.8\n \n10.2\n-\n \n211.3\n \n1,091.3\n \n0.0\n \n9,329.1\n \n2980.3\n7,685.1\n \n33,846.9\n \nFeb\n345.7\n \n2762.9\n6,004.8\n \n811.1\n984.2\n \n-\n \n2,731.0\n \n9.2\n-\n \n236.8\n \n2,089.3\n \n-\n \n8,950.2\n \n2949.2\n7,790.6\n \n35,665.0\n \nMar\n168.3\n \n2278.9\n6,313.1\n \n1594.4\n1,028.2\n \n-\n \n1,341.7\n \n8.4\n-\n \n415.1\n \n1,242.4\n \n-\n \n10,867.7\n \n3027.5\n7,841.0\n \n36,126.8\n \nApr\n206.9\n \n2702.1\n5,302.6\n \n1156.7\n1,085.4\n \n-\n \n871.7\n \n7.7\n-\n \n508.9\n \n1,581.5\n \n-\n \n14,233.6\n \n3431.1\n7,237.9\n \n38,326.2\n \nMay\n210.3\n \n1687.6\n5,962.2\n \n1250.9\n3,847.1\n \n-\n \n116.9\n \n7.0\n-\n \n517.7\n \n1,568.8\n \n-\n \n17,154.9\n \n2927.9\n7,532.9\n \n42,784.2\n \nJun\n249.6\n \n1649.7\n6,202.6\n \n1163.8\n1,866.7\n \n-\n \n204.6\n \n6.5\n-\n \n588.0\n \n1,851.9\n \n-\n \n18,795.4\n \n2580.9\n7,701.1\n \n42,860.7\n \nJul\n283.7\n \n1212.2\n7,193.4\n \n1892.7\n1,875.4\n \n-\n \n1,143.4\n \n6.0\n-\n \n447.3\n \n1,963.2\n \n-\n \n18,280.3\n \n3923.5\n7,695.6\n \n45,916.5\n \nAug\n352.8\n \n1408.8\n7,869.3\n \n2537.6\n2,316.2\n \n-\n \n3,535.6\n \n5.4\n-\n \n399.5\n \n2,101.3\n \n-\n \n19,422.2\n \n3837.6\n7,666.6\n \n51,453.0\n \nSep\n349.8\n \n1926.6\n7,608.5\n \n2430.2\n1,941.4\n \n-\n \n4,314.6\n \n5.1\n-\n \n205.2\n \n2,231.7\n \n-\n \n20,461.1\n \n4013.2\n9,460.7\n \n54,948.1\n \nOct\n411.5\n \n2396.2\n8,221.0\n \n2162.4\n3,421.5\n \n-\n \n5,627.7\n \n4.3\n-\n \n271.1\n \n2,539.5\n \n-\n \n22,881.3\n \n5432.3\n9,501.3\n \n62,870.1\n \nNov\n339.8\n \n3578.4\n7,561.6\n \n2568.8\n2,299.5\n \n-\n \n5,882.7\n \n3.7\n-\n \n566.4\n \n2,788.5\n \n-\n \n27,326.1\n \n4400.3\n9,614.3\n \n66,930.0\n \nDec\n351.1\n \n3217.3\n8,557.8\n \n2619.2\n3,620.2\n \n-\n \n2,353.6\n \n3.0\n-\n \n1,189.0\n \n2,786.9\n \n-\n \n33,115.3\n \n5610.8\n11,334.1\n \n74,758.3\n \n2022\nJan\n324.6\n \n3504.3\n8,506.5\n \n2680.3\n2,631.0\n \n-\n \n1,110.8\n \n2.4\n-\n \n1,487.3\n \n2,967.6\n \n-\n \n35,913.5\n \n6693.8\n14,008.7\n \n79,830.9\n \nFeb\n411.5\n \n4021.5\n9,763.6\n \n3069.7\n5,678.0\n \n-\n \n4,048.9\n \n1.6\n-\n \n1,465.4\n \n3,241.1\n \n-\n \n39,977.5\n \n4511.5\n13,964.4\n \n90,154.6\n \nMar\n354.3\n \n4413.6\n11,882.6\n \n3691.3\n4,932.3\n \n-\n \n5,235.0\n \n0.9\n-\n \n1,590.0\n \n3,888.3\n \n-\n \n42,741.3\n \n9086.6\n15,421.2\n \n103,237.4\n \nApr\n546.4\n \n3054.1\n15,585.8\n \n4857.7\n5,768.6\n \n-\n \n5,714.4\n \n0.2\n-\n \n1,861.4\n \n4,143.7\n \n-\n \n48,582.4\n \n9654.2\n16,999.2\n \n116,768.1\n \nMay\n639.5\n \n8326.7\n23,817.6\n \n4251.9\n16,001.6\n \n-\n \n6,150.9\n \n0.0\n-\n \n1,486.3\n \n8,474.8\n \n-\n \n74,864.0\n \n14793.9\n17,091.2\n \n175,898.5\n \nJun\n418.5\n \n8464.3\n32,497.6\n \n3807.5\n21,184.8\n \n-\n \n2,639.3\n \n0.0\n-\n \n1,340.0\n \n10,851.1\n \n-\n \n85,145.9\n \n18155.8\n35,128.1\n \n219,633.0\n \nJul\n700.4\n \n9914.6\n30,660.3\n \n4983.4\n24,902.9\n \n-\n \n4,077.6\n \n0.0\n-\n \n1,411.5\n \n13,722.1\n \n-\n \n98,066.0\n \n9998.6\n45,127.9\n \n243,565.1\n \nAug\n863.8\n \n14422.1\n33,703.2\n \n4483.0\n34,971.8\n \n-\n \n4,379.8\n \n0.0\n-\n \n2,106.6\n \n16,515.4\n \n-\n \n115,491.9\n \n8745.3\n45,694.0\n \n281,377.1\n \nSep\n1,086.8\n \n14998.2\n37,911.3\n \n7470.1\n45,094.8\n \n-\n \n8,440.8\n \n0.0\n-\n \n1,302.8\n \n17,996.8\n \n-\n \n129,242.7\n \n11630.7\n60,830.4\n \n336,005.2\n \nOct\n1,158.3\n \n14768.7\n44,296.5\n \n10013.7\n44,664.1\n \n-\n \n14,109.9\n \n0.0\n-\n \n1,142.4\n \n16,817.7\n \n-\n \n123,793.8\n \n30036.4\n47,678.2\n \n348,479.7\n \nNov\n1,449.3\n \n22456.9\n41,398.0\n \n9771.8\n41,317.6\n \n-\n \n17,572.6\n \n0.0\n-\n \n2,085.3\n \n16,785.8\n \n-\n \n136,029.9\n \n30694.0\n46,275.8\n \n365,836.9\n \nDec\n1,470.7\n \n23012.7\n48,533.8\n \n8913.7\n50,229.0\n \n-\n \n21,411.1\n \n0.0\n19,993.4\n \n2,176.2\n \n17,693.7\n \n-\n \n119,322.3\n \n39279.1\n69,102.5\n \n421,138.1\n \n2023\nJan\n2,402.7\n \n32405.1\n47,062.6\n \n8410.8\n50,364.6\n \n-\n \n17,976.2\n \n0.0\n23,668.5\n \n2,406.3\n \n18,311.0\n \n-\n \n132,757.4\n \n41367.4\n69,570.1\n \n446,702.8\n \nFeb\n234.9\n \n59685.4\n50,103.0\n \n9568.6\n62,701.4\n \n889.9\n \n24,809.7\n \n0.0\n26,667.1\n \n4,451.9\n \n21,629.1\n \n-\n \n146,798.4\n \n50093.6\n70,987.9\n \n528,620.9\n \nMar\n214.6\n \n72311.9\n57,399.6\n \n9196.8\n51,300.9\n \n-\n \n28,841.5\n \n0.0\n24,689.0\n \n5,503.9\n \n19,118.6\n \n-\n \n170,376.6\n \n54524.7\n84,489.1\n \n577,967.3\n \nApr\n184.1\n \n61341.6\n63,129.5\n \n16343.2\n61,444.0\n \n-\n \n28,727.0\n \n0.0\n28,119.0\n \n5,989.2\n \n27,619.9\n \n-\n \n205,412.2\n \n81442.9\n86,571.2\n \n666,323.9\n \nMay\n78.1\n \n125685.1\n100,808.7\n \n22707.0\n195,646.6\n \n-\n \n81,344.3\n \n0.0\n69,908.9\n \n6,246.8\n \n53,180.7\n \n-\n \n440,462.4\n \n103176.1\n116,103.7\n \n1,315,348.2\n \nJun\n176.6\n \n227001.8\n172,666.5\n \n25998.2\n452,772.6\n \n40,326.7\n \n115,193.3\n \n0.0\n196,310.3\n \n4,209.5\n \n121,677.5\n \n-\n \n870,075.1\n \n230604.4\n544,587.8\n \n3,001,600.3\n \nJul\n162.7\n \n132017.2\n220,995.0\n \n20797.2\n459,668.2\n \n32,010.8\n \n105,308.6\n \n0.0\n154,472.7\n \n13,777.8\n \n153,638.5\n \n-\n \n697,177.8\n \n209734.6\n612,937.8\n \n2,812,698.9\n \nAug\n611.0\n \n105296.6\n309,821.7\n \n55744.7\n475,838.3\n \n37,447.1\n \n102,495.2\n \n0.0\n153,578.2\n \n6,767.5\n \n135,193.3\n \n-\n \n758,439.2\n \n223114.4\n564,622.1\n \n2,928,969.2\n \nSep\n949.3\n \n193065.6\n339,269.2\n \n41680.1\n437,996.0\n \n58,554.5\n \n110,351.3\n \n0.0\n161,346.6\n \n4,522.1\n \n153,113.7\n \n-\n \n880,148.8\n \n290026.7\n565,616.4\n \n3,236,640.3\n \nOct\n403.8\n \n204713.4\n254,684.1\n \n187632.1\n440,150.3\n \n65,022.1\n \n97,046.1\n \n0.0\n176,111.9\n \n13,771.8\n \n173,523.5\n \n-\n \n829,479.5\n \n345029.3\n586,015.6\n \n3,373,583.5\n \nNov\n370.5\n \n222344.7\n387,213.2\n \n160896.0\n326,510.1\n \n50,688.3\n \n159,225.4\n \n0.0\n173,990.9\n \n28,127.2\n \n187,363.3\n \n-\n \n926,663.7\n \n395549.5\n595,811.6\n \n3,614,754.5\n \nSource:Reserve Bank of Zimbabwe,2023\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households and other financial corporations, \nTABLE 6.1: BUILDING SOCIETIES -ASSETS\n$ millions\nDebt Securities\nLoans and Advances\n \n \n \n24 \n \n \nDebt Securities\nForeign Liabilities\nCapital\nOther\nTOTAL\nand\nLiablities\nEnd of\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2020\nJan\n2,894.8\n398.4\n3,293.3\n273.1\n15.0\n3,581.4\n34.7\n944.7\n0.0\n100.0\n0.0\n1,699.9\n418.8\n6,779.5\nFeb\n3,118.5\n419.8\n3,538.4\n270.9\n15.0\n3,824.3\n32.5\n966.5\n0.0\n558.5\n0.0\n1,714.1\n501.5\n7,597.4\nMar\n3,978.7\n384.4\n4,363.1\n290.4\n15.0\n4,668.5\n19.3\n1,143.4\n0.0\n133.4\n0.0\n2,335.6\n591.3\n8,891.5\nApr\n4,097.6\n354.9\n4,452.5\n290.4\n15.0\n4,757.9\n15.6\n1,152.3\n0.0\n140.8\n0.0\n2,628.1\n562.1\n9,256.8\nMay\n5,615.0\n370.0\n5,985.0\n441.2\n15.0\n6,441.2\n45.6\n1,161.2\n0.0\n149.8\n0.0\n2,708.1\n660.4\n11,166.3\nJun\n7,327.5\n405.9\n7,733.4\n346.2\n15.0\n8,094.6\n17.6\n2,644.8\n0.0\n278.2\n0.0\n6,867.2\n946.4\n18,848.8\nJul\n10,284.7\n427.7\n10,712.4\n326.2\n15.0\n11,053.7\n21.3\n3,862.4\n0.0\n207.1\n0.0\n8,010.7\n1,236.7\n24,391.8\nAug\n10,984.4\n502.7\n11,487.1\n364.5\n15.0\n11,866.6\n21.4\n4,478.3\n0.0\n186.1\n10.0\n9,438.3\n1,902.7\n27,903.4\nSep\n10,408.2\n403.5\n10,811.8\n107.5\n15.0\n10,934.3\n31.7\n3,842.7\n0.0\n125.8\n0.0\n8,069.6\n2,495.1\n25,499.1\nOct\n11,881.7\n628.7\n12,510.4\n102.5\n15.0\n12,627.9\n154.0\n3,731.0\n0.0\n280.6\n0.0\n7,991.8\n2,478.1\n27,263.4\nNov\n13,173.5\n668.5\n13,842.1\n252.5\n15.0\n14,109.6\n148.2\n3,781.0\n0.0\n323.0\n0.0\n8,200.8\n2,579.4\n29,141.9\nDec\n15,585.8\n797.7\n16,383.5\n258.5\n15.0\n16,657.0\n207.5\n3,221.3\n0.0\n440.4\n0.0\n9,002.7\n2,444.3\n31,973.2\n2021\nJan\n17,060.5\n985.1\n18,045.7\n150.0\n15.0\n18,210.7\n291.2\n3,018.1\n0.0\n81.3\n0.0\n6,054.0\n6,191.6\n33,846.9\nFeb\n18,610.7\n1,047.5\n19,658.2\n150.0\n15.0\n19,823.2\n318.2\n3,075.5\n0.0\n40.7\n0.0\n6,533.5\n5,874.0\n35,665.0\nMar\n18,562.7\n1,070.5\n19,633.2\n150.0\n15.0\n19,798.2\n320.8\n3,377.0\n0.0\n241.5\n0.0\n6,727.5\n5,661.8\n36,126.8\nApr\n19,021.2\n1,353.2\n20,374.5\n500.0\n15.0\n20,889.5\n325.0\n4,244.8\n0.0\n181.9\n0.0\n6,267.0\n6,418.0\n38,326.2\nMay\n22,332.1\n1,453.5\n23,785.6\n500.0\n15.0\n24,300.6\n350.2\n4,279.9\n0.0\n394.8\n0.0\n6,067.1\n7,391.6\n42,784.2\nJun\n22,784.4\n1,675.4\n24,459.8\n209.5\n70.5\n24,739.8\n359.1\n3,855.1\n0.0\n570.4\n0.0\n6,623.0\n6,713.2\n42,860.7\nJul\n25,425.9\n1,997.8\n27,423.7\n25.0\n15.0\n27,463.7\n365.2\n3,488.6\n0.0\n274.6\n0.0\n7,194.2\n7,130.1\n45,916.5\nAug\n27,475.7\n2,728.9\n30,204.6\n60.0\n15.0\n30,279.6\n668.2\n5,344.8\n0.0\n621.9\n0.0\n7,683.7\n6,854.8\n51,453.0\nSep\n29,023.8\n2,834.6\n31,858.5\n76.0\n15.2\n31,949.7\n1,062.2\n4,465.7\n0.0\n181.9\n0.0\n10,227.1\n7,061.5\n54,948.1\nOct\n30,925.8\n4,239.0\n35,164.7\n0.0\n30.0\n35,194.8\n1,329.1\n7,432.5\n0.0\n0.0\n0.0\n10,906.3\n8,007.4\n62,870.1\nNov\n34,486.8\n4,344.1\n38,830.8\n0.0\n15.0\n38,845.9\n1,149.7\n7,028.7\n0.0\n203.6\n0.0\n11,575.7\n8,126.5\n66,930.0\nDec\n33,974.4\n4,856.8\n38,831.3\n80.0\n15.0\n38,926.3\n1,750.9\n9,746.8\n0.0\n712.0\n0.0\n15,101.8\n8,520.4\n74,758.3\n2022\nJan\n31,695.1\n5,983.6\n37,678.7\n0.0\n15.0\n37,693.7\n1,771.4\n10,991.6\n0.0\n373.7\n0.0\n18,063.5\n10,937.0\n79,830.9\nFeb\n37,132.1\n7,089.1\n44,221.1\n0.0\n15.0\n44,236.1\n1,703.8\n14,215.9\n0.0\n431.6\n0.0\n18,241.5\n11,325.7\n90,154.6\nMar\n44,187.4\n6,190.7\n50,378.1\n0.0\n15.0\n50,393.1\n1,742.3\n15,620.9\n0.0\n501.9\n0.0\n20,548.8\n14,430.4\n103,237.4\nApr\n52,979.2\n6,553.0\n59,532.2\n0.0\n15.0\n59,547.2\n1,536.3\n17,027.1\n0.0\n704.1\n0.0\n23,099.0\n14,854.4\n116,768.1\nMay\n86,411.7\n6,683.0\n93,094.7\n0.0\n15.0\n93,109.8\n1,477.7\n34,306.7\n0.0\n1,033.4\n0.0\n22,645.2\n23,325.7\n175,898.5\nJun\n98,008.7\n8,427.1\n106,435.9\n1,030.1\n15.0\n107,481.1\n1,496.4\n40,346.3\n0.0\n1,200.6\n0.0\n42,213.2\n26,895.5\n219,633.0\nJul\n111,583.1\n9,489.2\n121,072.3\n1,072.6\n15.0\n122,159.9\n1,225.0\n46,145.1\n0.0\n2,071.5\n0.0\n55,131.6\n16,832.0\n243,565.1\nAug\n133,071.2\n11,398.3\n144,469.5\n1,625.2\n15.0\n146,109.7\n1,382.6\n55,691.4\n0.0\n2,979.3\n0.0\n60,157.4\n15,056.7\n281,377.1\nSep\n143,338.6\n28,284.7\n171,623.3\n0.0\n15.0\n171,638.3\n1,339.9\n62,659.9\n0.0\n3,613.8\n0.0\n79,343.1\n17,410.1\n336,005.2\nOct\n122,775.3\n20,897.6\n143,672.9\n1,214.2\n15.0\n144,902.1\n1,707.3\n69,651.9\n0.0\n4,327.9\n0.0\n86,799.2\n41,091.4\n348,479.7\nNov\n130,892.9\n23,401.5\n154,294.3\n1,256.4\n13.0\n155,563.7\n1,855.1\n72,052.0\n0.0\n5,140.0\n0.0\n89,895.0\n41,331.2\n365,836.9\nDec\n149,207.3\n30,517.1\n179,724.4\n1,239.7\n103.8\n181,068.0\n1,933.7\n71,142.6\n0.0\n5,623.9\n0.0\n118,486.1\n42,883.8\n421,138.1\n2023\nJan\n161,506.8\n31,099.4\n192,606.2\n1,462.2\n121.0\n194,189.4\n3,214.4\n72,524.5\n0.0\n6,622.6\n0.0\n144,335.3\n25,816.5\n446,702.8\nFeb\n210,739.4\n27,500.2\n238,239.5\n1,153.4\n15.0\n239,407.9\n2,349.9\n84,724.5\n0.0\n7,548.9\n0.0\n155,007.6\n39,582.0\n528,620.9\nMar\n234,480.2\n38,088.7\n272,568.9\n158.0\n14.4\n272,741.2\n1,982.4\n89,883.4\n0.0\n7,502.7\n0.0\n172,499.0\n33,358.6\n577,967.3\nApr\n272,738.9\n35,889.2\n308,628.0\n400.0\n15.0\n309,043.1\n1,809.5\n116,418.1\n0.0\n8,456.9\n0.0\n183,262.3\n47,334.0\n666,323.9\nMay\n502,897.5\n36,680.3\n539,577.9\n553.7\n15.0\n540,146.6\n4,453.5\n289,636.2\n0.0\n8,115.4\n0.0\n372,206.8\n100,789.6\n1,315,348.2\nJun\n927,980.2\n66,404.1\n994,384.3\n0.0\n15.0\n994,399.3\n4,147.7\n631,544.2\n0.0\n10,873.2\n0.0\n1,117,122.1\n243,513.7\n3,001,600.3\nJul\n804,547.2\n73,047.1\n877,594.3\n15,753.2\n15.0\n893,362.6\n2,706.7\n611,248.0\n0.0\n14,397.5\n0.0\n1,093,858.2\n197,126.1\n2,812,698.9\nAug\n920,687.4\n90,856.7\n1,011,544.1\n15,752.3\n15.0\n1,027,311.4\n3,400.5\n617,162.9\n0.0\n12,854.9\n0.0\n1,064,286.3\n203,953.2\n2,928,969.2\nSep\n1,062,730.1\n75,413.9\n1,138,143.9\n0.0\n15.1\n1,138,159.0\n3,262.9\n652,356.6\n0.0\n16,101.5\n0.0\n1,117,548.2\n309,212.1\n3,236,640.3\nOct\n1,261,965.8\n64,282.0\n1,326,247.8\n0.0\n15.1\n1,326,262.9\n4,056.0\n467,416.6\n0.0\n16,785.2\n0.0\n1,188,499.5\n370,563.3\n3,373,583.5\nNov\n1,301,463.8\n82,076.9\n1,383,540.7\n79,497.1\n15.1\n1,463,052.8\n4,822.5\n525,114.1\n0.0\n16,180.1\n0.0\n1,209,652.3\n395,932.7\n3,614,754.5\nSource:Reserve Bank of Zimbabwe,2023\nAmounts Owing to\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\n$ millions\n \n \n \n25 \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISATIONS\n \n \n \n \n2020\nJan\n4,084,551.94\n155,581.93\n40,879.89\n1,241,096.72\n54,212.81\n1,614,135.86\n1,136,124.87\n905,568.16\n799,835.71\n83,887.62\n1,594,904.42\n3,435.36\n11,714,215.29\nFeb\n4,492,412.28\n157,892.05\n54,850.75\n1,305,056.27\n51,575.18\n1,667,015.97\n1,328,895.13\n875,096.28\n827,340.38\n103,240.64\n1,837,059.21\n1,195.35\n12,701,629.50\nMar\n5,400,573.75\n137,553.14\n109,432.30\n1,355,737.76\n60,656.39\n2,181,804.45\n1,514,365.26\n1,743,391.37\n911,567.97\n129,647.77\n2,083,395.02\n30,866.95\n15,658,992.12\nApr\n5,497,243.24\n144,302.16\n94,782.20\n1,298,701.43\n50,563.13\n2,200,545.77\n1,762,996.43\n1,756,962.25\n1,057,031.75\n149,805.94\n2,211,133.89\n33,524.86\n16,257,593.05\nMay\n6,753,987.64\n152,161.11\n176,776.32\n1,688,453.47\n61,403.01\n2,272,323.33\n2,155,232.06\n2,018,291.52\n1,335,664.72\n161,892.59\n2,646,269.59\n56,873.34\n19,479,328.70\nJun\n8,233,748.36\n178,010.08\n127,961.90\n3,248,219.37\n64,989.86\n5,469,986.07\n3,799,659.67\n4,379,017.69\n1,983,339.32\n277,602.32\n3,665,408.84\n46,384.96\n31,474,328.45\nJul\n8,927,920.73\n256,440.30\n209,123.91\n4,249,101.81\n34,055.90\n7,106,442.23\n5,125,740.57\n5,385,837.14\n2,413,677.93\n418,160.11\n4,321,918.71\n46,630.64\n38,495,049.96\nAug\n9,773,178.50\n269,675.36\n194,537.60\n5,470,092.50\n33,043.10\n7,946,261.68\n6,723,930.20\n5,651,838.11\n3,103,883.15\n446,084.37\n5,291,100.20\n48,922.44\n44,952,547.19\nSep\n10,508,860.18\n202,928.95\n203,610.78\n4,810,727.31\n29,975.80\n1,041,079.17\n7,136,261.66\n4,099,760.81\n3,255,496.85\n517,871.73\n6,526,576.15\n48,754.08\n38,381,903.47\nOct\n12,296,430.45\n302,589.49\n251,238.66\n9,053,118.05\n28,434.20\n8,136,185.80\n6,305,609.42\n6,351,785.61\n3,855,757.60\n649,444.55\n7,243,034.96\n49,339.03\n54,522,967.83\nNov\n14,705,718.28\n553,426.67\n299,226.19\n10,178,453.66\n26,676.82\n9,457,279.18\n7,442,871.42\n6,834,160.25\n4,193,059.76\n959,134.44\n7,919,442.36\n50,802.65\n62,620,251.69\nDec\n19,070,900.24\n557,071.84\n265,529.08\n10,043,351.16\n24,925.66\n9,451,197.42\n8,214,424.44\n7,599,398.94\n4,750,996.82\n1,556,410.92\n9,213,845.68\n46,489.85\n70,794,542.04\n1,000.00\n2021\nJan\n23,978,167.35\n610,696.11\n267,400.20\n9,997,383.02\n66,046.86\n9,811,097.63\n7,641,910.42\n7,176,322.97\n4,807,054.16\n1,685,871.14\n10,092,630.46\n47,525.58\n76,182,105.93\nFeb\n24,581,772.22\n653,205.48\n285,830.69\n10,330,772.00\n65,231.37\n10,024,935.09\n7,949,013.06\n6,754,180.16\n5,018,015.84\n1,766,077.92\n10,905,948.39\n47,678.08\n78,382,660.29\nMar\n28,741,816.74\n737,140.48\n320,102.45\n10,604,119.56\n76,828.95\n10,517,753.11\n9,428,559.85\n8,179,722.05\n5,701,289.52\n1,822,019.95\n12,528,176.45\n33,915.52\n88,691,444.62\nApr\n31,859,146.34\n675,080.87\n347,881.04\n12,101,683.31\n205,760.21\n12,046,268.54\n10,788,214.39\n8,802,924.25\n6,559,969.13\n1,831,534.43\n14,724,055.16\n36,984.33\n99,979,501.99\nMay\n34,645,328.64\n713,518.48\n292,339.75\n13,012,546.01\n70,347.70\n10,160,360.67\n11,287,317.39\n8,318,871.52\n7,438,997.57\n1,831,015.12\n17,169,532.74\n10,879.19\n104,951,054.78\nJune\n36,527,537.18\n993,308.60\n357,200.72\n14,622,859.32\n69,173.21\n12,832,747.32\n12,635,012.94\n7,938,660.25\n9,226,503.32\n1,903,845.82\n19,986,300.49\n40,765.72\n117,133,914.90\nJul\n39,160,305.59\n1,280,558.68\n411,253.92\n16,562,010.52\n62,624.82\n13,792,648.82\n12,583,048.87\n8,567,557.82\n10,717,151.04\n1,820,088.91\n22,581,130.29\n13,756.78\n127,552,136.06\nAug\n41,218,056.27\n1,372,177.00\n431,669.10\n15,667,033.13\n66,504.42\n14,701,546.35\n13,446,660.94\n8,828,791.19\n11,500,069.82\n1,942,139.38\n27,299,685.30\n15,470.31\n136,489,803.20\nSep\n41,133,553.69\n1,649,182.17\n433,781.15\n16,702,896.26\n321,991.18\n15,183,417.18\n15,271,161.92\n9,065,558.07\n11,973,442.27\n2,145,369.49\n30,851,901.80\n19,863.23\n144,752,118.41\nOct\n48,491,758.71\n1,644,045.10\n477,340.76\n20,072,721.66\n337,273.51\n16,644,705.00\n17,906,042.38\n10,150,149.70\n8,544,940.34\n2,418,354.85\n35,641,091.07\n17,894.63\n162,346,317.71\nNov\n48,945,526.55\n1,598,923.06\n394,575.79\n20,998,777.03\n434,931.56\n16,621,266.44\n19,372,274.14\n10,802,887.56\n8,904,904.88\n2,882,220.06\n40,009,482.19\n18,275.25\n170,984,044.50\nDec\n54,028,791.83\n1,778,880.47\n556,046.62\n24,450,917.17\n570,685.08\n10,955,470.21\n22,025,406.62\n10,538,491.23\n14,437,886.10\n2,996,425.00\n43,047,088.39\n29,601.16\n185,415,689.87\n2022\nJan\n58,163,723.79\n2,180,551.47\n576,438.12\n26,576,317.70\n366,231.45\n8,887,534.55\n23,074,734.84\n11,840,524.88\n15,743,736.46\n3,516,259.69\n47,325,078.28\n29,564.68\n198,280,695.90\nFeb\n59,500,669.71\n2,289,260.81\n618,640.14\n27,925,301.74\n641,435.03\n9,370,886.67\n27,976,121.59\n13,027,815.12\n20,505,827.49\n3,747,288.27\n51,007,737.28\n19,692.27\n216,630,676.11\nMar\n66,551,117.83\n2,538,377.08\n656,335.46\n29,688,979.74\n660,584.49\n10,903,917.10\n32,629,411.62\n15,688,496.07\n38,075,386.72\n4,471,441.45\n58,500,950.68\n802,168.34\n261,167,166.58\nApr\n74,441,781.12\n4,219,500.30\n1,441,218.07\n33,136,441.44\n673,885.92\n13,157,284.33\n34,426,878.27\n18,261,710.29\n39,043,359.76\n5,001,307.17\n63,176,517.86\n40,089.64\n287,019,974.16\nMay\n101,753,100.08\n5,120,524.84\n3,358,419.20\n50,514,059.33\n760,401.23\n12,433,390.50\n42,057,624.50\n28,724,818.35\n48,088,662.73\n6,286,840.17\n76,655,600.16\n34,456.76\n375,787,897.73\nJune\n118,753,588.99\n6,209,658.53\n2,293,665.50\n64,942,949.99\n869,273.19\n23,897,585.00\n58,442,367.18\n37,195,284.13\n62,467,707.84\n9,414,912.48\n96,536,183.00\n43,204.15\n481,066,380.00\nJuly\n133,779,414.05\n7,610,614.14\n3,684,426.07\n77,836,080.20\n938,367.98\n30,537,997.95\n69,408,788.72\n46,181,587.44\n72,642,938.51\n10,449,582.51\n111,094,524.49\n46,145.73\n564,210,467.80\nAug\n165,210,571.41\n10,163,176.69\n2,624,492.88\n93,899,073.61\n1,266,729.80\n39,544,245.28\n87,691,102.84\n58,330,938.20\n97,552,420.83\n10,450,507.09\n131,625,765.29\n154,457.59\n698,513,481.52\nSept\n201,167,878.53\n11,330,918.80\n5,038,300.39\n110,956,484.03\n1,297,748.50\n44,492,682.69\n101,816,518.33\n92,708,096.37\n88,483,494.42\n11,685,667.87\n152,934,863.30\n276,752.34\n822,189,405.58\nOct\n223,506,677.74\n12,026,669.50\n4,229,873.27\n113,451,159.15\n1,302,041.27\n46,399,745.17\n110,333,025.84\n79,715,558.05\n89,501,330.53\n9,611,322.30\n175,816,703.56\n178,607.79\n866,072,714.17\nNov\n232,953,535.08\n16,431,625.92\n11,131,139.79\n118,284,970.84\n1,687,527.03\n42,192,397.26\n124,017,335.43\n75,874,234.73\n94,636,395.62\n12,440,947.33\n207,085,835.54\n197,473.26\n936,933,417.83\nDec\n253,185,165.18\n19,199,455.89\n10,466,455.02\n135,037,685.07\n1,551,994.21\n70,805,600.30\n136,576,579.60\n94,115,141.69\n123,404,532.09\n12,079,018.68\n235,371,108.06\n173,717.07\n1,091,966,452.83\n2023\nJan\n299,237,745.06\n22,096,826.86\n11,001,194.94\n154,399,125.00\n2,073,794.79\n72,677,263.10\n165,905,496.48\n124,259,994.28\n140,303,195.37\n16,560,714.33\n290,446,774.71\n286,968.13\n1,299,249,093.07\nFeb\n333,081,520.85\n26,349,752.54\n12,607,980.80\n168,969,321.35\n3,232,834.66\n79,874,665.83\n198,087,465.13\n146,996,948.44\n150,078,778.01\n18,960,512.94\n335,439,856.49\n415,659.47\n1,474,095,296.50\nMar\n411,138,419.07\n28,795,432.59\n14,081,946.71\n184,250,094.21\n3,256,927.22\n101,507,881.47\n232,125,042.77\n168,374,643.67\n159,301,093.17\n20,786,447.06\n364,183,808.40\n229,595.47\n1,688,031,331.80\nApr\n411,638,425.58\n28,865,765.48\n14,081,964.65\n184,833,219.66\n3,256,927.22\n101,507,881.47\n235,076,590.94\n168,374,757.64\n159,310,920.52\n20,785,827.18\n365,366,760.50\n229,595.47\n1,693,328,636.32\nMay\n726,348,772.35\n78,828,771.47\n44,800,380.00\n409,618,602.87\n6,584,930.07\n226,467,642.46\n583,387,051.30\n480,909,418.46\n381,628,891.53\n62,593,512.49\n757,858,742.61\n267,815.39\n3,759,294,531.01\nJun\n1,385,380,571.66\n173,918,051.54\n114,682,839.69\n1,119,448,698.19\n23,922,347.39\n571,712,604.71\n1,309,324,347.94\n1,111,326,640.14\n808,734,970.18\n129,722,475.73\n1,754,989,459.01\n444,788.00\n8,503,607,794.19\nJul\n1,088,372,491.59\n132,529,236.30\n101,023,084.21\n843,805,813.72\n21,291,030.44\n370,922,779.80\n1,037,949,287.43\n824,419,061.99\n646,244,001.65\n87,491,103.55\n1,451,125,105.58\n356,098.86\n6,605,529,095.13\nAug\n1,104,126,310.09\n133,512,317.72\n105,426,999.17\n683,402,044.93\n21,345,225.83\n393,145,008.06\n1,077,529,295.35\n824,970,068.56\n716,638,286.73\n85,309,683.35\n1,543,461,599.29\n382,505.35\n6,689,249,344.42\nSep\n1,336,413,273.40\n158,136,405.58\n121,080,865.90\n752,199,791.20\n28,592,532.70\n465,470,715.50\n1,334,020,478.90\n1,012,670,250.70\n799,826,458.00\n102,238,002.60\n1,857,297,850.00\n586,991.00\n7,968,533,615.50\nOct\n1,461,090,986.48\n163,948,853.90\n120,153,516.74\n935,064,277.07\n24,681,683.18\n520,361,008.99\n1,381,206,351.23\n1,092,469,043.71\n859,550,943.15\n118,799,556.91\n2,126,512,435.00\n627,911.82\n8,804,466,568.16\nNov\n1,397,804,072.50\n171,337,302.47\n117,526,650.42\n1,017,731,862.93\n26,161,720.05\n535,490,380.99\n1,401,587,612.93\n992,371,783.17\n885,248,702.84\n129,500,343.70\n2,255,158,373.70\n621,795.60\n8,930,540,600.93\nSource:Reserve Bank of Zimbabwe,2023\n/1 Including the only merchant bank still in operation.\n TABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES\n$ ('000)\n \n \n \n26 \n \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS\nORGANISATIONS\n1,000.00\n2020\nJan\n2,173,633.03\n972,609.19\n3,182,087.13\n4,279,565.75\n1,757,297.12\n4,791,990.63\n2,791,625.15\n2,223,774.14\n9,875,803.48\n609,781.65\n2,838,775.94\n81,735.21\n35,578,678.43\nFeb\n2,492,591.77\n1,191,731.68\n3,340,863.80\n8,721,475.95\n1,919,428.47\n5,869,104.19\n3,481,495.51\n2,729,161.98\n10,202,203.60\n760,155.34\n3,574,134.47\n82,845.83\n44,365,192.59\nMar\n2,678,262.66\n1,449,645.90\n3,231,058.97\n11,715,273.88\n2,114,093.03\n6,507,000.01\n4,576,971.82\n3,048,053.49\n11,490,205.21\n947,918.17\n4,257,117.74\n72,082.86\n52,087,683.73\nApr\n2,854,374.82\n1,118,295.51\n3,492,330.52\n5,271,473.36\n1,999,901.13\n6,191,170.71\n4,276,817.19\n3,727,579.43\n14,060,717.80\n713,406.98\n4,444,924.89\n83,109.30\n48,234,101.64\nMay\n3,866,781.11\n1,163,944.89\n4,713,727.59\n7,932,403.43\n1,991,042.58\n7,151,451.48\n5,858,495.15\n5,031,912.53\n13,907,794.76\n944,318.05\n5,060,401.34\n88,613.61\n57,710,886.51\nJun\n7,228,784.40\n1,963,030.85\n5,393,404.53\n14,526,855.63\n3,997,135.72\n12,452,202.49\n11,386,156.55\n9,507,719.09\n22,807,615.50\n1,630,544.88\n9,798,261.20\n121,561.20\n100,813,272.04\nJul\n9,091,726.77\n2,629,847.13\n6,043,418.97\n19,096,889.49\n4,988,887.74\n15,446,649.70\n15,274,687.36\n7,918,819.51\n31,916,392.56\n2,035,354.71\n15,762,315.16\n147,865.97\n130,352,855.06\nAug\n9,462,082.74\n2,865,950.88\n6,582,519.60\n19,234,703.99\n5,333,846.88\n16,821,248.59\n17,017,042.14\n7,304,595.82\n35,312,317.72\n2,217,425.46\n16,548,990.51\n134,271.10\n138,834,995.43\nSep\n9,832,514.38\n3,139,646.07\n7,166,350.39\n20,531,087.56\n5,145,328.35\n9,505,277.06\n17,311,149.20\n10,234,597.66\n39,731,086.51\n2,011,372.45\n16,155,747.87\n148,612.60\n140,912,770.08\nOct\n9,923,335.07\n3,346,982.41\n9,919,999.10\n22,567,492.87\n6,180,403.26\n21,021,376.92\n20,667,754.18\n10,950,177.78\n41,131,626.19\n2,597,408.09\n18,072,164.45\n176,961.04\n166,555,681.37\nNov\n10,683,513.83\n3,732,868.95\n9,809,491.39\n28,228,980.99\n6,029,490.43\n17,343,347.49\n23,027,365.97\n14,471,556.33\n47,870,360.42\n2,986,050.60\n19,045,412.04\n209,168.81\n183,437,607.25\nDec\n10,252,495.91\n4,965,472.75\n12,171,250.70\n30,987,168.50\n5,959,867.34\n19,653,397.02\n25,666,591.10\n13,188,851.04\n55,454,341.21\n3,901,504.33\n22,313,591.00\n519,773.38\n205,034,304.27\n1,000.00\n2021\nJan\n12,195,945.09\n4,725,946.72\n13,067,828.56\n32,314,625.60\n6,804,952.50\n19,638,789.03\n27,577,248.19\n13,566,042.79\n60,234,250.60\n3,993,814.34\n22,146,327.53\n314,523.37\n216,580,294.30\nFeb\n12,215,925.38\n4,335,293.23\n13,268,343.18\n31,820,079.48\n6,327,338.72\n19,480,197.75\n27,088,789.92\n11,873,767.24\n62,647,881.89\n3,583,509.91\n23,594,651.47\n323,276.77\n216,559,054.94\nMar\n12,086,596.94\n5,009,117.91\n15,457,881.64\n33,668,114.17\n7,879,623.60\n17,019,379.33\n29,927,193.06\n12,664,366.44\n68,761,992.24\n4,513,060.17\n25,352,486.13\n371,874.60\n232,711,686.23\nApr\n14,293,712.79\n6,264,137.34\n17,624,611.65\n35,860,252.53\n7,955,587.69\n18,411,151.82\n32,890,743.11\n11,445,151.89\n81,410,668.87\n4,248,558.67\n27,176,673.47\n411,001.01\n257,992,250.84\nMay\n14,731,869.47\n5,542,211.64\n19,231,383.69\n37,283,237.74\n7,903,622.65\n19,756,317.30\n33,027,214.88\n22,796,168.05\n84,596,653.48\n4,504,355.67\n28,445,264.85\n378,185.06\n278,196,484.46\nJun\n15,628,935.51\n6,154,316.52\n20,722,752.27\n39,604,431.48\n7,861,552.67\n21,455,061.82\n36,502,664.43\n23,449,074.86\n92,196,178.85\n4,756,434.86\n29,731,644.54\n415,508.64\n298,478,556.45\nJul\n14,899,561.10\n6,742,913.66\n25,082,739.85\n39,720,936.02\n9,580,503.84\n24,570,675.98\n38,875,306.10\n31,312,003.24\n94,151,108.53\n5,021,547.73\n32,324,374.53\n568,402.62\n322,850,073.17\nAug\n14,056,945.25\n6,611,127.05\n26,897,316.63\n39,624,666.33\n9,778,338.93\n27,046,620.96\n40,693,944.15\n26,504,554.01\n84,766,848.12\n4,915,399.24\n33,960,935.12\n645,902.41\n315,502,598.18\nSep\n14,777,285.47\n6,264,492.08\n27,413,062.10\n45,375,795.43\n10,337,697.22\n25,786,388.31\n43,113,093.01\n30,700,846.40\n95,985,614.84\n5,605,871.74\n37,606,703.52\n687,817.24\n343,654,667.37\nOct\n14,923,669.66\n8,437,829.51\n26,583,413.65\n47,841,912.79\n11,477,927.22\n29,796,762.93\n51,676,553.79\n49,115,499.00\n111,611,484.23\n5,940,819.15\n35,043,857.03\n618,831.05\n393,068,559.99\nNov\n14,147,912.21\n7,546,852.86\n27,174,334.28\n44,238,573.41\n11,949,923.74\n27,199,271.57\n52,401,389.32\n49,817,772.34\n115,576,831.01\n5,911,967.57\n37,770,843.26\n751,068.72\n394,486,740.29\nDec\n16,522,401.63\n9,204,283.51\n26,835,545.00\n47,381,404.66\n15,303,976.78\n43,092,763.28\n57,822,911.04\n61,555,101.22\n122,091,550.61\n6,093,367.35\n40,046,246.70\n1,319,573.65\n447,269,125.42\n2022\nJan\n17,399,268.45\n9,928,816.10\n28,146,847.17\n46,285,881.10\n15,060,177.49\n34,087,881.41\n60,888,346.70\n38,232,883.69\n135,579,116.46\n6,454,492.58\n32,504,960.47\n745,336.00\n425,314,007.61\nFeb\n20,260,983.50\n9,641,974.72\n32,159,803.23\n50,825,844.50\n15,235,028.54\n35,068,548.54\n49,157,612.17\n43,769,514.96\n146,423,512.16\n7,768,846.48\n36,257,363.98\n724,522.36\n447,293,555.15\nMar\n22,638,817.86\n11,683,937.35\n34,271,841.32\n61,002,811.60\n20,352,647.27\n34,501,628.57\n57,839,997.29\n60,678,395.30\n173,444,002.60\n9,467,563.85\n43,160,654.72\n970,393.82\n530,012,691.56\nApr\n26,926,844.72\n12,304,918.39\n34,924,202.54\n67,201,357.79\n21,444,798.07\n38,606,872.21\n61,303,321.13\n64,980,792.31\n216,612,532.66\n10,455,473.89\n45,951,692.03\n939,217.87\n601,652,023.61\nMay\n39,564,579.03\n21,954,770.23\n42,666,739.38\n108,620,498.72\n28,757,840.78\n54,108,110.44\n88,717,845.18\n107,568,244.73\n291,739,801.56\n14,310,137.61\n65,853,453.06\n1,190,747.91\n865,052,768.60\nJun\n45,956,287.64\n26,686,177.09\n47,155,850.80\n128,881,143.56\n23,783,755.16\n60,238,449.95\n105,247,922.50\n120,389,795.99\n326,034,986.61\n17,068,663.50\n108,828,797.15\n1,325,268.69\n1,011,597,098.65\nJul\n40,699,352.12\n28,329,526.03\n45,417,841.09\n128,847,329.07\n21,958,796.02\n62,326,844.37\n103,536,398.88\n112,642,685.48\n401,574,353.33\n17,902,000.20\n112,555,899.49\n1,117,408.25\n1,076,908,434.33\nAug\n68,438,409.63\n39,107,020.53\n53,616,955.67\n171,501,037.83\n25,370,674.58\n68,913,237.19\n162,326,617.25\n137,243,494.58\n538,409,018.36\n23,523,309.06\n146,121,882.24\n1,197,164.45\n1,435,768,821.37\nSep\n81,174,128.75\n51,501,554.76\n58,104,791.47\n204,056,688.73\n63,246,197.07\n174,562,749.46\n172,521,502.90\n138,936,277.91\n626,755,883.05\n25,607,188.82\n182,077,675.02\n11,177,650.78\n1,789,722,288.71\nOct\n83,201,043.64\n63,984,990.31\n67,031,137.91\n207,367,773.63\n40,617,325.27\n155,873,800.58\n179,051,392.63\n157,121,308.46\n575,293,016.53\n27,092,268.91\n201,852,712.89\n3,193,614.07\n1,761,680,384.82\nNov\n88,153,064.47\n61,978,896.61\n78,744,676.95\n236,152,455.10\n39,915,042.93\n100,872,718.26\n214,281,243.03\n200,240,592.45\n606,580,960.90\n32,903,876.70\n233,604,874.73\n119,223.24\n1,893,547,625.35\nDec\n106,799,918.36\n60,886,327.29\n73,518,960.29\n260,923,049.61\n48,959,835.11\n122,528,998.69\n242,741,914.11\n171,982,170.05\n747,151,447.16\n37,453,518.81\n270,164,633.75\n10,753,958.63\n2,153,864,731.86\n2023\nJan\n114,820,700.76\n79,460,381.87\n82,589,902.30\n305,204,829.91\n45,118,619.63\n135,072,311.14\n263,222,364.10\n223,632,204.71\n896,980,184.31\n37,534,721.96\n288,326,194.21\n7,916,696.92\n2,479,879,111.81\nFeb\n118,375,609.69\n85,995,682.64\n93,761,236.16\n312,626,341.50\n56,688,432.58\n147,245,179.36\n266,610,300.93\n273,709,371.16\n938,437,753.70\n39,909,193.60\n292,841,727.23\n6,842,518.78\n2,633,043,347.35\nMar\n119,963,933.20\n85,731,698.36\n100,697,025.58\n322,453,842.97\n45,619,349.07\n148,455,496.20\n286,712,763.58\n273,572,570.94\n1,064,798,433.60\n44,685,590.57\n330,031,150.72\n14,190,575.51\n2,836,912,430.30\nApr\n131,146,380.30\n89,322,733.64\n99,723,066.84\n324,249,300.08\n45,619,349.07\n149,245,957.86\n289,670,780.41\n273,578,020.75\n1,072,456,655.25\n44,926,335.64\n331,068,417.40\n14,190,575.51\n2,865,197,572.73\nMay\n269,460,363.15\n210,867,012.29\n216,906,304.04\n631,589,937.93\n113,357,505.65\n362,294,051.43\n581,761,350.37\n545,536,680.63\n2,504,454,969.80\n102,648,366.24\n702,960,786.40\n28,985,518.44\n6,270,822,846.38\nJun\n581,642,309.76\n428,772,683.41\n410,699,487.74\n1,366,510,052.55\n227,784,986.62\n700,617,673.80\n1,094,382,949.63\n1,185,026,806.70\n5,283,380,622.25\n199,474,750.17\n1,564,762,675.09\n40,673,167.41\n13,083,728,165.12\nJul\n535,377,934.43\n436,808,429.52\n413,150,823.99\n1,394,747,348.19\n206,866,966.84\n711,462,740.79\n1,157,802,106.76\n982,808,623.76\n4,533,520,705.60\n184,470,180.50\n1,464,856,207.23\n37,277,944.87\n12,059,150,012.48\nAug\n537,439,303.14\n422,479,784.07\n413,226,172.28\n1,343,458,227.81\n285,743,813.63\n662,607,567.90\n1,197,898,912.17\n1,004,826,660.33\n4,639,684,933.86\n209,521,849.57\n1,553,047,811.00\n38,718,344.86\n12,308,653,380.62\nSep\n632,283,427.70\n491,562,911.40\n426,060,663.50\n1,510,241,869.90\n296,604,785.00\n789,587,698.10\n1,300,914,518.50\n1,250,791,974.40\n5,214,851,978.10\n217,382,274.50\n1,781,106,637.90\n43,583,660.40\n13,954,972,399.20\nOct\n721,203,425.90\n541,011,315.61\n554,440,420.11\n1,657,817,920.26\n309,251,239.26\n841,367,968.72\n1,438,592,170.70\n1,187,082,973.91\n5,659,995,585.31\n260,248,908.48\n1,906,411,104.87\n49,647,602.04\n15,127,070,635.17\nNov\n703,080,882.81\n566,993,243.11\n532,803,998.34\n1,698,467,822.71\n346,291,934.28\n269,835,136.30\n1,554,832,195.31\n1,195,274,632.93\n6,063,945,342.98\n293,942,495.06\n2,031,657,547.49\n46,866,707.11\n15,885,967,935.90\nSource: Reserve Bank of Zimbabwe,2023\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \n$ ('000)\n \n \n \n27 \n \n \nEnd of\nNominal \nLending Rates 1\nIndividuals \nCorporate\n2021\nJan\n6.00-65.00\n32.65\n24.77\nFeb\n6.00-85.00\n36.67\n21.36\nMar\n6.00-85.00\n35.83\n22.61\nApr\n6.00-85.00\n35.22\n22.59\nMay\n6.00-85.00\n34.84\n21.76\nJun\n6.00-85.00\n36.25\n22.46\nJul\n6.00-85.00\n36.56\n21.66\nAug\n6.00-85.00\n41.06\n39.65\nSep\n6.00-85.00\n40.61\n39.50\nOct\n6.00-85.00\n41.86\n45.81\nNov\n6.00-8500\n39.13\n38.10\nDec\n6.00-8500\n39.34\n37.94\n2022\nJan\n15.00-85.00\n39.32\n39.62\nFeb\n15.00-85.00\n40.55\n64.02\nMar\n15.00-85.00\n40.74\n43.88\nApr\n15.00-85.00\n38.15\n45.56\nMay\n15.00-85.00\n38.01\n47.25\nJun\n15.00-85.00\n38.45\n48.25\nJul\n80.00-240.00\n82.75\n165.45\nAug\n80.00-230.00\n88.46\n155.96\nSep\n100.00-230.00\n98.07\n158.46\nOct\n100.00-290.00\n99.37\n115.26\nNov\n100.00-290.00\n99.03\n110.97\nDec\n100.00-290.00\n99.02\n110.83\n2023\nJan\n100.00-240.00\n90.05\n116.03\nFeb\n65.00-230.00\n60.12\n80.88\nMar\n65.00-230.00\n74.35\n81.46\nApr\n70.00-230.00\n74.48\n86.96\nMay\n70.00-230.00\n77.86\n83.61\nJun\n70.00-155.00\n76.33\n92.64\nJul\n64.00-155.00\n77.82\n94.80\nAug\n64.00-155.00\n77.63\n93.18\nSep\n64.00-160.00\n76.49\n92.69\nOct\n64.00-160.00\n71.72\n92.43\nNov\n64.00-160.00\n70.15\n93.15\nSource:Reserve Bank of Zimbabwe, 2023\nNotes\nTABLE 8.1: LENDING RATES (percent per annum)\n1. Nominal lending rates depict the range of rates quoted by banks.\n Commercial Banks\nWeighted Lending Rates\n \n \n \n28 \n \n \nTABLE 8.2 : BANK DEPOSIT RATES (percent per annum)\nEND OF\nSAVINGS\n3 MONTHS\n2021\nJan\n0.22-12.00\n2.00-21.50\nFeb\n0.22-12.00\n2.00-21.50\nMar\n0.22-12.00\n2.00-21.50\nApr\n0.22-12.00\n2.00-21.50\nMay\n0.22-12.00\n2.00-21.50\nJun\n0.25-12.00\n2.00-26.00\nJul\n0.50-12.00\n2.00-26.00\nAug\n0.50-12.00\n2.00-26.00\nSep\n0.50-12.00\n2.00-26.00\nOct\n0.50-12.00\n2.00-26.00\nNov\n0.50-12.00\n2.00-26.00\nDec\n0.50-12.00\n2.00-26.00\n2022\nJan\n0.50-12.00\n2.00-26.00\nFeb\n0.50-12.00\n2.00-26.00\nMar\n0.50-12.00\n2.00-26.00\nApr\n0.50-12.50\n2.00-30.00\nMay\n0.50-12.50\n2.00-32.00\nJun\n0.50-12.50\n2.00-32.00\nJul\n40.00\n80.00-92.00\nAug\n40.00\n80.00-92.00\nSep\n40.00\n80.00-92.00\nOct\n40.00\n80.00-92.00\nNov\n40.00\n80.00-92.00\nDec\n40.00\n80.00-95.00\n2023\nJan\n40.00\n80.00-110.00\nFeb\n30.00\n50.00-110.00\nMar\n30.00\n50.00-110.00\nApr\n30.00\n50.00-110.00\nMay\n30.00\n50.00-110.00\nJun\n30.00\n50.00-110.00\nJul\n30.00\n50.00-110.00\nAug\n30.00\n50.00-110.00\nSep\n30.00\n50.00-110.00\nOct\n30.00\n50.00-110.00\nNov\n30.00\n50.00-110.00\n Source:Reserve Bank of Zimbabwe, 2023\n* Deposit rates depict the range of rates qouted by banks. \nCOMMERCIAL BANKS\n \n \n \n29 \n \n \nALCOHOLIC \nBEVERAGES \nCLOTHING \n&\nHOUSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNIC\nATION\nRECREATION &\nEDUCATION\nRESTAUR\nANTS &\nMISC.\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2020\nJan\n-3.00\n-2.06\n-0.28\n-2.74\n-1.04\n-0.84\n-1.06\n-4.48\n11.15\n4.75\n-4.37\n-0.58\n0.53\n-0.31\nFeb\n-12.36\n-10.83\n-2.89\n-12.30\n-10.59\n-10.28\n22.91\n-8.51\n14.28\n-12.28\n-6.48\n-5.06\n-7.72\n-5.72\nMar\n9.23\n9.65\n16.27\n2.69\n16.74\n0.11\n17.92\n22.40\n-27.82\n-11.98\n-11.43\n4.92\n-3.80\n2.78\nApr\n11.89\n-6.38\n-7.22\n10.27\n-0.98\n-8.34\n-15.68\n-12.00\n-12.48\n-7.83\n0.34\n-3.49\n10.74\n-0.21\nMay\n-0.71\n-5.16\n9.16\n-0.59\n-8.60\n-3.90\n-4.34\n-3.82\n-7.21\n4.44\n-0.85\n1.57\n0.57\n1.32\nJun\n4.42\n3.69\n8.01\n-2.64\n7.91\n12.94\n19.95\n11.11\n9.88\n-4.54\n0.25\n6.01\n-2.51\n3.85\nJul\n7.34\n4.46\n-0.64\n4.36\n4.41\n5.10\n11.54\n-6.38\n-6.24\n-7.89\n-14.18\n0.79\n11.88\n3.43\nAug\n-4.40\n0.30\n0.59\n0.10\n-0.31\n1.24\n36.61\n-3.95\n2.75\n-0.69\n5.74\n1.56\n-1.86\n0.68\nSep\n0.21\n-0.46\n0.55\n-3.17\n-0.67\n-4.96\n4.69\n0.09\n-1.55\n-2.85\n-3.21\n-0.89\n-0.32\n-0.75\nOct\n-0.88\n-2.63\n4.38\n-3.89\n-0.08\n0.32\n0.85\n0.23\n0.20\n2.44\n0.36\n1.29\n0.48\n1.08\nNov\n1.65\n2.18\n0.83\n-0.14\n1.65\n1.13\n0.02\n0.57\n12.03\n3.79\n0.14\n1.72\n3.63\n2.20\nDec\n1.90\n3.21\n2.81\n1.47\n0.60\n2.51\n-0.25\n0.15\n-1.18\n3.98\n1.26\n2.14\n3.92\n2.60\n2021\nJan\n2.84\n1.59\n1.52\n4.26\n2.44\n2.57\n1.33\n-0.72\n1.69\n-0.48\n3.81\n2.14\n2.87\n2.33\nFeb\n1.27\n-0.30\n-1.71\n-0.49\n1.59\n1.07\n-1.60\n10.67\n-2.10\n-0.94\n0.55\n-0.16\n2.03\n0.41\nMar\n0.15\n-0.08\n1.24\n4.37\n-2.37\n0.65\n4.58\n-0.29\n0.02\n0.74\n-0.18\n0.99\n0.52\n0.87\nApr\n0.12\n-0.57\n0.45\n-0.05\n0.24\n0.70\n0.58\n-0.99\n17.14\n1.41\n-3.37\n0.87\n0.25\n0.71\nMay\n0.62\n2.41\n1.41\n0.84\n-0.02\n0.80\n0.07\n42.32\n1.32\n2.36\n0.65\n2.15\n0.28\n1.66\nJun\n1.64\n3.87\n9.35\n6.99\n1.48\n0.57\n0.97\n1.28\n4.88\n2.93\n1.92\n5.07\n2.37\n4.38\nJul\n1.29\n1.73\n0.51\n-0.08\n-0.69\n0.33\n0.10\n0.58\n-0.05\n-0.01\n1.15\n0.51\n0.06\n0.40\nAug\n1.73\n0.72\n1.03\n0.99\n1.14\n1.06\n3.56\n0.29\n-0.05\n2.11\n1.60\n1.10\n0.74\n1.01\nSep\n1.76\n0.08\n1.58\n1.43\n0.64\n0.01\n3.95\n0.87\n-0.78\n1.33\n1.53\n1.27\n2.30\n1.53\nOct\n1.51\n0.77\n0.84\n1.78\n0.72\n1.47\n7.45\n0.36\n2.11\n1.62\n0.91\n1.53\n3.51\n2.03\nNov\n0.85\n0.34\n1.47\n1.12\n0.68\n1.22\n4.43\n0.37\n-6.92\n1.67\n1.11\n0.96\n3.19\n1.53\nDec\n2.41\n0.98\n1.50\n1.30\n0.64\n-0.77\n0.26\n1.01\n0.03\n1.14\n2.05\n1.17\n1.99\n1.38\n2022\nJan\n1.08\n0.64\n2.14\n0.42\n0.71\n0.43\n1.51\n12.08\n0.94\n1.90\n0.11\n1.68\n2.53\n1.90\nFeb\n1.82\n3.39\n1.89\n1.79\n0.68\n1.08\n0.60\n0.92\n0.35\n1.39\n1.69\n1.76\n3.43\n2.20\nMar\n2.59\n2.24\n0.77\n1.22\n0.96\n5.86\n2.27\n0.82\n0.15\n1.02\n-0.06\n1.67\n3.05\n2.04\nApr\n3.38\n1.68\n14.21\n5.59\n1.77\n1.93\n1.73\n1.76\n2.91\n6.05\n1.87\n7.17\n6.94\n7.11\nMay\n3.70\n8.73\n2.02\n1.21\n2.46\n3.36\n2.47\n2.06\n0.48\n3.33\n3.78\n3.12\n9.56\n4.85\nJun\n8.20\n7.94\n12.49\n10.84\n13.72\n5.65\n4.95\n6.63\n4.63\n5.35\n9.86\n9.85\n17.32\n11.95\nJul\n4.57\n1.91\n8.66\n5.87\n3.74\n2.16\n1.21\n2.64\n11.86\n2.00\n2.15\n5.88\n12.09\n7.71\nAug\n3.71\n2.47\n2.01\n1.44\n1.98\n1.59\n1.91\n1.12\n0.41\n1.21\n2.93\n2.02\n4.94\n2.91\nSep\n-2.39\n-1.80\n5.21\n-3.33\n-0.66\n-1.20\n10.12\n0.36\n8.21\n-1.80\n-1.68\n1.99\n-3.23\n0.36\nOct\n0.81\n1.31\n6.74\n1.83\n0.72\n0.88\n2.83\n1.21\n0.10\n0.72\n0.68\n3.29\n2.10\n2.93\nNov\n-0.23\n0.35\n0.34\n0.60\n0.85\n0.25\n4.30\n0.48\n16.78\n19.32\n0.85\n1.71\n0.23\n1.27\nDec\n0.39\n0.76\n0.20\n-0.24\n0.03\n-0.15\n3.91\n-0.10\n0.00\n0.73\n-0.23\n0.28\n1.55\n0.66\n2023\nJan\n0.17\n-0.62\n0.81\n0.34\n0.26\n0.45\n-2.36\n0.45\n0.06\n-0.58\n0.54\n0.33\n-0.77\n0.00\nFeb\n-3.59\n-1.56\n-3.56\n-1.27\n-1.02\n-4.40\n-1.81\n-2.19\n0.06\n-3.63\n-7.55\n-3.40\n-4.54\n-3.73\nMar\n-0.57\n-0.46\n-0.01\n-0.71\n-0.10\n-0.13\n0.44\n-0.24\n0.16\n-0.16\n-0.42\n-0.18\n-0.66\n-0.32\nApr\n1.05\n0.05\n2.79\n-0.18\n0.92\n0.18\n0.59\n0.43\n0.53\n0.35\n0.55\n1.36\n1.96\n1.54\nMay\n3.05\n0.34\n3.03\n-0.08\n2.87\n1.74\n6.10\n1.65\n1.19\n0.99\n2.35\n2.34\n3.37\n2.64\nJun\n11.74\n0.93\n14.88\n-0.85\n9.19\n5.27\n23.88\n5.15\n3.07\n3.15\n6.58\n9.53\n18.23\n12.10\nJul\n1.68\n0.51\n0.36\n0.56\n-0.34\n0.69\n0.68\n-0.11\n1.04\n2.82\n1.11\n0.65\n1.85\n1.03\nAug\n-1.11\n-0.11\n-2.00\n-0.19\n-0.02\n-0.02\n-0.61\n-0.53\n-0.45\n-0.40\n-1.37\n-1.12\n-1.83\n-1.34\nSep\n0.32\n0.04\n0.34\n0.30\n-0.38\n0.63\n5.77\n-0.21\n5.97\n-0.10\n0.91\n0.91\n1.05\n0.95\nOct\n1.91\n1.10\n4.96\n0.54\n1.89\n2.81\n-2.69\n0.43\n-4.21\n0.53\n2.43\n2.48\n2.42\n2.46\nNov\n1.94\n0.60\n8.93\n-0.36\n2.45\n1.30\n3.24\n0.79\n4.28\n-0.67\n1.07\n4.39\n4.89\n4.54\nSource:Zimstat, 2023\nFOOD & NON \nALCOHOLIC \nBEVERAGES\nALL \nITEMS\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nTOTAL NON\n \n \n \n30 \n \n \nFOOD \nINFLATION\nALCO HO LIC \nCLO T HING\nHO US ING , \nW AT E R,\nFURNIT URE\nMIS C.\nFO O D & \nB E VE RAG E S \n& \nE LE CT RICT Y, \nG AS\nAND\nRE CRE AT IO N &\nRE S T AURANT S \n&\nG O O DS &\nT O T AL NO N\nNO N \nALCO HO LIC \nALL\n& T O B ACCO\nFO O T W E AR\n& O T HE R\nE Q UIP ME NT\nCULT URE\nHO T E LS\nS E RVICE S\nFO O D\nB E VE RAG E S\nIT E MS\nFUE LS\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2020\nJun\n49.10\n-10.07\n29.30\n-16.31\n1.57\n-10.74\n24.86\n25.51\n-53.67\n-27.59\n-13.54\n9.22\n44.68\n15.98\nJul\n51.72\n-10.57\n31.42\n-14.75\n0.95\n-2.95\n46.48\n8.81\n-54.66\n-35.14\n-34.68\n8.73\n54.96\n17.77\nAug\n41.24\n-5.57\n34.15\n-8.90\n11.10\n-6.93\n98.46\n4.21\n-53.15\n-34.91\n-29.70\n10.35\n42.88\n17.03\nSep\n54.50\n5.38\n41.86\n4.35\n14.13\n-7.18\n106.87\n-1.44\n-33.62\n-14.65\n-13.91\n21.81\n65.73\n30.52\nOct\n19.20\n-16.47\n38.22\n-16.86\n1.99\n-16.89\n109.61\n-14.02\n-26.79\n-24.38\n-27.05\n7.83\n18.98\n10.42\nNov\n16.40\n-8.49\n38.98\n-10.94\n5.74\n-10.42\n118.10\n-9.99\n-17.04\n-26.54\n-26.56\n10.98\n18.95\n12.90\nDec\n13.75\n-5.58\n33.93\n-7.91\n6.56\n-6.80\n122.72\n-8.61\n-13.92\n-26.98\n-29.39\n9.88\n14.77\n11.10\n2021\nJan\n20.60\n-2.07\n36.36\n-1.28\n10.32\n-3.60\n128.10\n-5.01\n-21.25\n-30.63\n-23.35\n12.89\n17.44\n14.03\nFeb\n39.34\n9.50\n38.02\n12.01\n25.35\n8.60\n82.62\n14.90\n-32.54\n-21.66\n-17.59\n18.72\n29.84\n21.45\nMar\n14.17\n6.58\n29.52\n3.24\n5.87\n19.12\n92.07\n6.36\n6.81\n-2.73\n-7.44\n18.40\n22.51\n19.45\nApr\n14.30\n5.98\n30.11\n3.19\n6.13\n19.96\n93.18\n5.32\n25.12\n-1.35\n-10.56\n19.42\n22.82\n20.29\nMay\n15.83\n14.44\n20.88\n4.68\n16.10\n25.82\n102.08\n55.83\n36.63\n-3.32\n-9.20\n20.10\n22.47\n20.70\nJun\n12.75\n14.64\n22.39\n15.03\n9.18\n12.04\n70.11\n42.04\n30.41\n4.24\n-7.69\n19.04\n28.60\n21.31\nJul\n6.39\n11.64\n23.80\n10.15\n3.85\n6.95\n52.67\n52.59\n39.02\n13.15\n8.80\n18.71\n15.01\n17.76\nAug\n13.21\n12.09\n24.34\n11.12\n5.35\n6.76\n15.74\n59.33\n35.23\n16.34\n4.54\n18.18\n18.05\n18.15\nSep\n14.96\n12.70\n25.60\n16.41\n6.74\n12.34\n14.92\n60.58\n36.28\n21.35\n9.67\n20.76\n21.15\n20.86\nOct\n17.72\n16.64\n21.34\n23.27\n7.60\n13.62\n22.43\n60.80\n38.87\n20.39\n10.27\n21.05\n24.80\n21.99\nNov\n16.80\n14.54\n22.11\n24.82\n6.57\n13.72\n27.83\n60.49\n15.38\n17.92\n11.34\n20.15\n24.28\n21.19\nDec\n17.38\n12.07\n20.56\n24.61\n6.62\n10.09\n28.48\n61.86\n16.79\n14.71\n12.21\n19.00\n21.96\n19.76\n2022\nJan\n15.38\n11.03\n21.29\n20.02\n4.81\n7.80\n28.71\n82.72\n15.93\n17.46\n8.22\n18.46\n21.56\n19.26\nFeb\n16.00\n15.14\n25.74\n22.76\n3.87\n7.80\n31.58\n66.63\n18.83\n20.23\n9.44\n20.73\n23.23\n21.38\nMar\n18.84\n17.81\n25.15\n19.07\n7.41\n13.39\n28.67\n68.48\n18.98\n20.57\n9.57\n21.54\n26.32\n22.80\nApr\n22.71\n20.48\n42.29\n25.78\n9.04\n14.77\n30.15\n73.15\n4.52\n26.09\n15.50\n29.14\n34.75\n30.60\nMay\n26.46\n27.91\n43.15\n26.23\n11.74\n17.68\n33.27\n24.17\n3.66\n27.29\n19.09\n30.37\n47.22\n34.70\nJun\n34.62\n32.92\n47.25\n30.78\n25.21\n23.62\n38.51\n30.74\n3.41\n30.29\n28.37\n36.30\n68.72\n44.47\nJul\n38.99\n33.16\n59.19\n38.55\n30.80\n25.88\n40.04\n33.42\n15.74\n32.91\n29.63\n43.58\n89.00\n54.99\nAug\n41.70\n35.49\n60.73\n39.17\n31.89\n26.54\n37.81\n34.54\n16.27\n31.74\n31.34\n44.88\n96.89\n57.92\nSep\n35.93\n32.94\n66.48\n32.64\n30.19\n25.02\n45.99\n33.85\n26.81\n27.66\n27.17\n45.91\n86.25\n56.09\nOct\n35.00\n33.64\n76.23\n32.71\n30.19\n24.29\n39.72\n34.98\n24.31\n26.52\n26.89\n48.43\n83.72\n57.47\nNov\n33.55\n33.65\n74.26\n32.03\n30.42\n23.10\n39.54\n35.12\n55.96\n48.48\n26.56\n49.54\n78.43\n57.06\nDec\n30.92\n33.36\n72.02\n30.01\n29.63\n23.87\n44.62\n33.64\n55.91\n47.88\n23.73\n48.22\n77.66\n55.93\n2023\nJan\n29.74\n31.69\n69.78\n29.91\n29.05\n23.89\n39.11\n19.78\n54.56\n44.29\n24.25\n46.26\n71.94\n53.03\nFeb\n22.86\n25.38\n60.69\n26.01\n26.87\n23.89\n35.79\n16.09\n54.11\n37.14\n12.96\n38.85\n58.69\n44.14\nMar\n19.07\n22.07\n59.46\n23.60\n25.55\n23.89\n33.36\n14.86\n54.13\n35.54\n12.56\n36.31\n52.99\n40.80\nApr\n16.38\n20.11\n43.52\n16.85\n24.51\n23.89\n31.87\n13.36\n50.56\n28.25\n11.10\n28.93\n45.87\n33.48\nMay\n15.66\n10.84\n44.93\n15.37\n25.01\n23.89\n36.54\n12.90\n51.63\n25.34\n9.57\n27.96\n37.63\n30.68\nJun\n19.45\n3.65\n48.01\n3.20\n20.03\n23.89\n61.17\n11.33\n49.36\n22.73\n6.31\n27.58\n38.70\n30.85\nJul\n16.14\n2.22\n36.71\n-1.98\n15.30\n23.89\n60.33\n8.34\n34.91\n23.72\n5.22\n21.28\n26.03\n22.74\nAug\n10.74\n-0.36\n31.33\n-3.54\n13.04\n23.89\n56.36\n6.57\n33.75\n21.75\n0.82\n17.55\n17.90\n17.66\nSep\n13.82\n1.52\n25.26\n0.08\n13.36\n23.89\n50.18\n5.97\n30.99\n23.86\n3.48\n16.31\n23.12\n18.36\nOct\n15.06\n1.31\n23.16\n-1.20\n14.66\n7.28\n42.11\n5.15\n25.35\n23.64\n5.28\n15.40\n23.50\n17.82\nNov\n17.55\n1.56\n33.71\n-2.14\n16.48\n8.40\n40.66\n5.48\n11.94\n2.93\n5.52\n18.43\n29.24\n21.63\nSource:Zimstat, 2023\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nNON-FOOD INFLATION\nHE ALT H\nT RANS P O RT\nCO MMUNICAT IO N\nE DUCAT IO N\n \n \n \n31 \n \n \nUSA\nSOUTH ARFICAN\nBOTSWANA\nJAPANESE\nEURO\nPOUND\nEND OF\nDollar\nRAND\nPULA\nYEN\nSTERLING\n2022\nJan\n115.422\n7.4069\n9.8109\n0.9995\n128.8401\n154.8332\nFeb\n124.019\n8.0738\n10.7214\n1.0732\n138.2625\n165.6148\nMar\n142.424\n9.8091\n12.4763\n1.1665\n159.0161\n186.8670\nApr\n159.348\n10.0334\n13.1064\n1.2217\n167.9530\n199.4880\nMay\n290.888\n18.7787\n24.3182\n2.2757\n312.8351\n367.1438\nJun\n366.269\n22.5194\n29.7593\n2.6861\n382.8607\n444.3572\nJul\n416.289\n25.2673\n33.2407\n3.1299\n425.1560\n507.7061\nAug\n546.825\n32.3336\n42.8164\n3.9498\n548.9033\n638.9381\nSep\n621.532\n34.5376\n46.4284\n4.2999\n609.9716\n691.9517\nOct\n632.137\n34.7014\n47.2839\n4.2742\n628.8500\n732.8998\nNov\n654.865\n38.5947\n51.0140\n4.7279\n677.5889\n784.3319\nDec\n671.447\n39.5836\n52.6414\n5.0669\n715.4935\n809.2610\n2023\nJan\n796.522\n45.7487\n61.8897\n6.1132\n863.6683\n983.1863\nFeb\n889.133\n48.1898\n66.7294\n6.5202\n941.1468\n1070.6489\nMar\n929.862\n52.0727\n71.3204\n6.9912\n1013.3634\n1151.6803\nApr\n1047.445\n57.1437\n79.4723\n7.7646\n1151.0384\n1309.3061\nMay\n2577.056\n130.3252\n186.5789\n18.4901\n2755.1310\n3192.3286\nJun\n5739.000\n306.2597\n425.5469\n39.6710\n6240.5886\n7250.9396\nJul\n4516.803\n255.8972\n346.4388\n31.8342\n4971.8704\n5801.8328\nAug\n4608.107\n246.2293\n343.3039\n31.5721\n5031.5916\n5860.1292\nSep\n5466.747\n288.5390\n396.3391\n36.6073\n5782.7246\n6680.6377\nOct\n5698.961\n301.1746\n417.7338\n37.9539\n6039.7584\n6920.5328\nNov\n5791.080\n309.3526\n429.6053\n39.3710\n6363.8242\n7330.4810\nSource: Reserve Bank of Zimbabwe, 2023\n TABLE 10 : SELECTED INTERNATIONAL EXCHANGE RATES\n1. ZWL$ dollar per unit of foreign currency\n \n \n \n32 \n \n \nEND OF\nMarket Capitalisation\nAll Share*\nZWL$ millions\n2020\nJan\n332.9\n344.9\n304.86\n179,559,446\n43,426.5\nFeb\n473.13\n826.73\n360.13\n172,678,984\n60,987.5\nMar\n456.21\n720.47\n425.24\n237,667,043\n58,612.1\nApr\n488.60\n826.64\n269.66\n107,308,931\n63,387.9\nMay\n1180.14\n1582.86\n568.96\n218,832,930\n152,719.7\nJune*\n1788.75\n3995.48\n379.93\n519,901,300\n228,577.1\nAug\n1389.23\n3709.15\n1,026.76\n164,501,200\n175,678.4\nSep\n1638.17\n4128.52\n4,640.88\n1,093,040,821\n206,502.5\nOct\n1476.87\n3792.35\n986.70\n397,006,127\n179,690.0\nNov\n1595.59\n3322.22\n4,103.78\n470,899,659\n193,270.8\nDec\n2636.34\n4134.09\n2,734.50\n316,737,200\n317,879.3\n2021\nJan\n3600.82\n4356.74\n3,513.59\n2,477,166,688\n434,856.23\nFeb\n4154.37\n6683.44\n1,529.25\n149,031,800\n501,184.95\nMar\n4489.47\n5315.39\n4,517.14\n203,633,747\n531,742.64\nApr\n4641.11\n5061.28\n3,075.98\n223,494,202\n540,745.24\nMay\n5428.28\n6820.54\n3,917.41\n188,748,200\n634,011.15\nJun\n6194.88\n6211.49\n4458.87\n248,500,624\n745,175.95\nJul\n6818.29\n6621.17\n2921.32\n181,010,800\n803,900.15\nAug\n6652.31\n6115.85\n3456.94\n147,232,800\n792,291.48\nSep\n8580.16\n6014.53\n4730.25\n2,909,442,557\n1,032,472.92\nOct\n11329.48\n6652.04\n5661.76\n108,843,000\n1,378,227.92\nNov\n 10695.57\n7193.11\n9883.24\n791,653,520\n1,290,069.75\nDec\n12079.74\n7815.37\n17577.25\n228,225,060\n1,317,205.11\n2022\nJan\n12079.74\n8196.79\n3704.23\n82,402,101\n1,475,217.45\nFeb\n14990.42\n9300.03\n7979.35\n156,327,700\n1,863,028.60\nMar\n15858.92\n11289.34\n8186.00\n117,815,800\n1,964,738.42\nApr\n28391.75\n30527.28\n11366.89\n193,411,483\n3,547,347.52\nMay\n23072.46\n20021.24\n8211.45\n195,475,400\n2,893,011.70\nJune\n19791.94\n20021.24\n14570.16\n271,227,100\n2,439,165.45\nJuly\n16594.91\n20021.24\n23673.34\n239,937,180\n2,068,222.01\nAug\n13705.12\n15473.37\n8674.85\n139,225,500\n1,685,592.28\nSept\n14771.65\n18929.75\n5128.54\n137,092,750\n1,819,157.07\nOct\n15072.14\n23659.53\n8657.90\n201,566,548\n1,826,101.68\nNov\n14577.46\n25478.67\n7680.78\n90,311,600\n1,610,203.36\nDec\n19493.85\n25487.77\n27753.79\n472,926,200\n2,044,869.14\n2023\nJan\n22813.24\n25496.86\n11638.16\n102,792,200\n2,460,037.66\nFeb\n28548.02\n29207.92\n24410.54\n164,006,458\n2,576,324.76\nMar\n38568.48\n37359.78\n14262.67\n97,920,600\n3,381,456.06\nApr\n41391.62\n36393.55\n16756.85\n74,505,000\n3,482,408.54\nMay\n108195.29\n52765.85\n34867.41\n206,593,600\n8,939,058.47\nJun\n171408.90\n76960.49\n85279.40\n192,473,571\n13,987,476.83\nJul\n114746.13\n89512.59\n40846.72\n176,547,600\n9,171,346.28\nAug\n125134.79\n109159.36\n39214.53\n103,854,600\n9,723,577.74\nSep\n126642.42\n125531.67\n91310.72\n343,359,119\n9,873,493.87\nOct\n157083.06\n125531.67\n31773.08\n64,000,500\n12,576,665.45\nNov\n191271.68\n148883.44\n54864.31\n162,675,500\n15,311,628.01\nSource:Zimbabwe Stock Exchange, 2023\n*All Share index was introduced in January, 2018\n**As at 26 June 2020\nTABLE 11: ZIMBABWE STOCK MARKET STATISTICS\n Market Turnover \nZWL$ million \nVolume of Shares\nMining\nIndices\n \n \n \n33 \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n255551.3\n-\n21042.2\n2300.3\n35349.1\n66624.4\nFeb\n226335.8\n-\n22882.6\n2288.9\n36434.4\n63598.2\nMar\n320422.1\n-\n28569.9\n3316.6\n44524.0\n86463.9\nApr\n288958.8\n-\n30071.5\n2807.0\n44131.6\n90580.4\nMay\n361427.1\n-\n36765.1\n3193.7\n49745.8\n89471.3\nJun\n388757.5\n-\n38540.1\n3200.0\n51437.4\n115145.7\nJul\n379659.9\n-\n45808.1\n2489.1\n57565.8\n145027.0\nAug\n397539.0\n-\n52853.9\n4086.0\n60908.4\n159206.6\nSep\n477933.6\n-\n52262.7\n4179.5\n64139.2\n181194.8\nOct\n481180.9\n-\n53165.9\n3839.9\n65329.0\n197972.5\nNov\n621896.7\n-\n56025.3\n4877.0\n63017.5\n252407.9\nDec\n747035.6\n-\n67903.9\n4705.5\n76511.6\n264749.2\n2022\nJan\n802677.7\n-\n55961.6\n5074.7\n53456.3\n218545.3\nFeb\n672723.0\n-\n59581.6\n5607.0\n66812.0\n238910.8\nMar\n961452.0\n-\n75050.7\n7882.2\n82886.9\n342168.7\nApr\n976617.2\n-\n89192.6\n8391.5\n89672.0\n293204.6\nMay\n1205990.0\n-\n110807.3\n13712.8\n106881.8\n469185.2\nJune\n1601225.3\n-\n134551.0\n18810.6\n123721.3\n618347.5\nJuly\n1754112.0\n-\n170480.6\n20413.1\n172562.5\n713401.1\nAug\n2334295.0\n-\n152343.4\n31418.6\n178188.9\n826377.1\nSep\n2793056.6\n-\n177701.7\n35144.4\n202368.1\n872807.4\nOct\n2728731.3\n-\n186478.9\n50202.3\n209758.0\n622412.8\nNov\n3370779.9\n-\n202876.2\n61086.7\n213295.3\n734610.6\nDec\n3310814.9\n-\n246783.6\n76872.0\n249516.4\n1106346.5\n2023\nJan\n3289379.3\n-\n240010.3\n68386.7\n238455.3\n1107756.4\nFeb\n3050933.3\n-\n219437.8\n73672.3\n245282.5\n1202998.5\nMar\n5068223.7\n-\n308609.1\n85343.4\n328822.3\n1517972.6\nApr\n5294044.5\n-\n341571.3\n79754.6\n355007.3\n1517972.6\nMay\n6275310.7\n-\n518333.9\n173170.7\n532078.6\n3274968.5\nJun\n17059664.0\n-\n882362.6\n615190.9\n1210486.2\n6640627.1\nJul\n17859586.4\n-\n1033836.9\n541445.6\n1620242.8\n6077538.3\nAug\n17955865.5\n-\n1017990.5\n649827.9\n1440537.4\n6244772.4\nSep\n18690087.0\n-\n1221725.3\n773363.9\n1672654.2\n7746084.3\nOct\n19808639.1\n-\n1264577.2\n826681.2\n5116902.9\n8661662.9\nNov\n23685304.8\n-\n1429269.5\n901515.6\n1999069.4\n9557300.7\nSource:Reserve Bank of Zimbabwe, 2023\nTABLE 12.1 : ZETSS AND RETAIL PAYMENTS \n Values of Transactions (ZWL$ millions)\n \n \n \n34 \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n720.0\n-\n9849.3\n229.0\n94691.4\n872.2\nFeb\n806.0\n-\n12309.3\n527.8\n90078.0\n754.9\nMar\n1112.8\n-\n15178.8\n751.0\n105272.0\n1003.7\nApr\n951.7\n-\n15185.0\n605.5\n97253.3\n1040.1\nMay\n1029.8\n-\n16511.3\n664.4\n103708.7\n994.8\nJun\n1076.9\n-\n14797.9\n581.9\n99349.6\n982.1\nJul\n1028.2\n-\n15217.6\n551.0\n102587.6\n980.8\nAug\n1045.0\n-\n14624.5\n475.4\n105269.7\n955.8\nSep\n1193.1\n-\n15397.6\n492.2\n104141.9\n2092.6\nOct\n1114.2\n-\n18207.4\n434.5\n107294.6\n2342.6\nNov\n1144.9\n-\n17435.9\n477.0\n98386.5\n2322.9\nDec\n1220.3\n-\n20029.6\n519.5\n106428.6\n2580.6\n2022\nJan\n957.9\n-\n15480.2\n439.9\n83661.8\n1902.9\nFeb\n981.0\n-\n15190.4\n433.7\n78916.1\n1895.3\nMar\n1242.3\n-\n16967.6\n519.1\n87501.1\n2128.6\nApr\n1073.0\n-\n15906.2\n458.0\n82673.4\n1937.6\nMay\n1213.5\n-\n16069.9\n477.8\n78385.2\n2001.2\nJune\n1190.3\n-\n15304.7\n474.2\n75631.7\n1705.1\nJuly\n1115.8\n-\n16063.8\n517.0\n88030.6\n1866.7\nAug\n1028.0\n-\n13686.8\n489.1\n76957.8\n1623.7\nSep\n1084.6\n-\n13084.7\n455.5\n71362.1\n2225.2\nOct\n969.3\n-\n12986.8\n510.9\n67641.7\n1825.4\nNov\n1001.4\n-\n12324.1\n499.9\n59151.5\n2430.2\nDec\n1013.6\n-\n14316.9\n616.7\n60584.5\n2469.8\n2023\nJan\n918.9\n-\n11734.0\n444.0\n48617.1\n1693.0\nFeb\n886.7\n-\n10301.5\n479.9\n43326.5\n1895.8\nMar\n1092.6\n-\n13217.0\n594.0\n50037.4\n1927.1\nApr\n907.6\n-\n14375.1\n526.7\n47171.7\n1982.9\nMay\n1119.2\n-\n12808.7\n576.7\n49143.2\n2233.6\nJun\n1050.2\n-\n10190.6\n606.0\n45488.8\n1213.0\nJul\n942.7\n-\n8226.8\n1777.1\n42648.8\n993.7\nAug\n888.0\n-\n8434.6\n653.6\n42648.8\n977.5\nSep\n964.1\n-\n9659.0\n703.6\n45148.7\n1061.4\nOct\n949.1\n-\n9449.3\n619.0\n50640.6\n904.4\nNov\n924.5\n-\n9525.7\n623.3\n52332.4\n1048.5\nSource:Reserve Bank of Zimbabwe, 2023\nTABLE 12.2 : ZETSS AND RETAIL PAYMENTS \n Volumes of Transactions (000's)\n \n \n \n35 \n \n \nEND OF\nEXPORTS\nIMPORTS\nTOTAL TRADE TRADE BALANCE\n2021\nJan\n282.9\n460.3\n743.20\n-177.4\nFeb\n340.8\n451.9\n792.70\n-111.1\nMar\n461.8\n527.2\n989.00\n-65.4\nApr\n444.7\n489.9\n934.60\n-45.2\nMay\n486.8\n503.1\n989.91\n-16.2\nJun\n502.5\n622.2\n-119.7\n-55.6\nJul\n629.9\n667.6\n-37.7\n-37.7\nAug\n597.3\n630.2\n-32.9\n-32.9\nSep\n514.4\n666.7\n-152.2\n-152.3\nOct\n535.5\n713.6\n-178.1\n-178.1\nNov\n647.6\n684.3\n-36.7\n-36.7\nDec\n591.2\n771.2\n-179.9\n-180.0\n2022\nJan\n543.9\n633.2\n-88.1\n-89.3\nFeb\n438.0\n630.1\n1068.1\n-192.2\nMar\n557.6\n713.8\n1271.4\n-156.2\nApr\n587.3\n637.2\n1224.5\n-49.9\nMay\n513.1\n714.4\n1227.6\n-201.3\nJun\n541.0\n751.4\n1292.3\n-210.4\nJul\n548.4\n728.2\n1276.6\n-179.9\nAug\n493.6\n759.9\n1253.4\n-266.3\nSep\n552.3\n765.3\n1317.6\n-213.1\nOct\n502.3\n770.5\n1272.8\n-268.2\nNov\n674.6\n802.2\n1476.8\n-127.5\nDec\n633.5\n772.6\n1406.1\n-139.1\n2023\nJan\n427.8\n633.8\n1061.6\n-206.0\nFeb\n435.9\n623.5\n1059.3\n-187.6\nMar\n515.3\n746.4\n1261.7\n-231.1\nApr\n555.5\n708.6\n1264.1\n-153.0\nMay\n654.2\n850.3\n1504.6\n-196.1\nJun\n641.5\n727.4\n1368.9\n-85.9\nJul\n603.2\n782.9\n1386.2\n-179.7\nAug\n649.8\n820.2\n1470.1\n-170.4\nSep\n678.1\n772.7\n1450.8\n-94.6\nOct\n831.9\n901.5\n1733.4\n-69.6\nNov\n681.4\n827.3\n1508.7\n-145.9\nSource: ZIMSTAT, 2023\nTABLE 13 : MERCHANDISE TRADE STATISTICS\n (US$ millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monthly_Economic_Reviews/Monthly_Economic_Review_November_2023.pdf"}
{"doc_id": "1b00c0e579bf25b11b166e16bf35cdcb", "text": "Monetary Policy Review \nApril 2017\nSouth African Reserve Bank\nMonetary Policy Review\nApril 2017\nMonetary Policy Review April 2017\n© South African Reserve Bank\nAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photo-\ncopying, recording or otherwise, without fully acknowledging the Monetary Policy Review of the South African Reserve Bank as the source. The contents of this publication \nare intended for general information only and are not intended to serve as financial or other advice. While every precaution is taken to ensure the accuracy of information, \nthe South African Reserve Bank shall not be liable to any person for inaccurate information or opinions contained in this publication.\nEnquiries relating to this Monetary Policy Review should be addressed to:\n\t\nHead: Economic Research and Statistics Department\n\t\nSouth African Reserve Bank\n\t\nP O Box 427\n\t\nPretoria 0001\n\t\nTel. +27 12 313 3668\nwww.resbank.co.za\t\n\t\n\t\n\t\n\t\n\t\n ISSN: 1609-3194\nMonetary Policy Review April 2017\nPreface\nThe primary mandate of the South African Reserve Bank (SARB) is to achieve and maintain price stability in the interest of \nbalanced and sustainable economic growth. In addition, the SARB has a complementary mandate to oversee and maintain \nfinancial stability. \nPrice stability helps to protect the purchasing power and living standards of all South Africans. It provides a favourable \nenvironment for investment and job creation, and also helps to maintain and improve international competitiveness. The goal \nof price stability is quantified by the setting of an inflation target by government after consultation with the SARB. The SARB \nhas operational independence. Monetary policy decisions are made by the SARB’s Monetary Policy Committee (MPC), which \nis chaired by the Governor and includes the deputy governors as well as other senior officials of the SARB. \nThe MPC conducts monetary policy to keep inflation within a target range of 3–6%. This inflation targeting framework is \nflexible, meaning that inflation may be temporarily outside the target range, under certain circumstances. The MPC takes \ninto account the time lags between policy adjustments and economic effects. This provides for interest rate smoothing over \nthe cycle, and contributes towards more stable economic growth. The decision of the MPC, together with a comprehensive \nstatement, is communicated at a media conference at the end of each meeting. \nThe Monetary Policy Review (MPR) is published twice a year and is aimed at broadening public understanding of the objectives \nand conduct of monetary policy. The MPR covers domestic and international developments that affect inflation and that \nimpact on the monetary policy stance. It is fundamentally a forward looking document which focuses on the outlook for the \nSouth African economy, in contrast to the Quarterly Bulletin which records and explains recent economic developments. \nThe MPR is presented by senior officials of the SARB at monetary policy forums in various centres across South Africa in an \neffort to develop a better understanding of monetary policy through direct interaction with stakeholders.\nMonetary Policy Review April 2017\nContents\nExecutive summary..........................................................................................................................................\t\n1\nOverview of the world economy.......................................................................................................................\t\n5\nOverview of financial markets...........................................................................................................................\t\n10\nOverview of the real economy..........................................................................................................................\t\n13\nInflation developments and outlook..................................................................................................................\t\n21 \nSummary.........................................................................................................................................................\t\n31\nBoxes\nBox 1\tAn asymmetric Phillips Curve?..............................................................................................................\t\n19\nBox 2\tReweighting and rebasing the consumer price index – implications for the forecast.............................\t\n23\nBox 3\tComparing the accuracy of CPI forecasts.............................................................................................\t\n29\nStatements issued by Lesetja Kganyago, Governor of the South African Reserve Bank\nStatement of the Monetary Policy Committee \n24 November 2016..........................................................................................................................................\t\n33\nStatement of the Monetary Policy Committee \n24 January 2017..............................................................................................................................................\t\n38\nStatement of the Monetary Policy Committee \n30 March 2017.................................................................................................................................................\t\n43\nGlossary..........................................................................................................................................................\t\n50\nAbbreviations..................................................................................................................................................\t\n52\n1\nMonetary Policy Review April 2017\nExecutive summary\nSouth Africa’s macroeconomic imbalances have eased \nsomewhat, with household balance sheets as well as fiscal \nand current account deficits all moving towards more \nsustainable levels. Inflation is falling back within the target \nrange, and is expected to average 5.4% in 2018 and 5.5% in \n2019. Meanwhile, gross domestic product (GDP) growth is \nprojected to pick up from 2016’s post-crisis low. The short-\nterm growth improvement largely reflects a recovery in the \nprimary sector (agriculture and mining). Over the medium \nterm, output is expected to benefit from renewed investment, \nstronger household consumption and improved global growth. \nGrowth prospects, however, remain subdued, while inflation is \nstaying relatively high despite receding shocks.\nThe previous Monetary Policy Review (MPR), published in \nOctober 2016, welcomed an improvement in global conditions. \nThis progress has mostly been sustained. Pessimism about \nworld growth has faded somewhat, with themes of secular \nstagnation and ultra-low long term interest rates retreating in \nfavour of reflation and a degree of optimism. In the United States \n(US), measures of policy uncertainty are elevated, yet volatility \nis unusually low while equity markets are close to record highs. \nInflation is reverting to target levels following half a decade of \noutcomes below 2%, and employment gains remain robust. \nIn this context, the US Federal Reserve (Fed) is moving with \na new resolve towards policy normalisation. Yet the prospect \nof higher interest rates, which previously sent shockwaves \nthrough financial markets, now seems to be inspiring more \nconfidence than fear. Meanwhile, policy stimulus in China \nappears to have stabilised growth at relatively high levels. This \nhas allayed fears of a sharper slowdown and has breathed new \nlife into industrial commodities. \nIn this environment, South Africa’s terms of trade have \nrebounded to a five-year high. The exchange rate has recovered \nsome ground: 2016 was the first year this decade in which the \nrand was stronger in December than it had been in January. \nThese experiences have parallels across the emerging market \nspace, with peer countries including Brazil, Chile, Colombia \nand Russia all experiencing stronger capital inflows and \ncurrency appreciation. However, the rising tide is not lifting all \nboats. In particular, Turkey (where macroeconomic imbalances \nremain acute) and Mexico (which is especially vulnerable to US \npolicy risk) stand out as exceptions to the emerging market \ntrend.\nAs in 2013, investors appear to be differentiating between \nemerging markets based on country specific characteristics. \nSouth Africa has benefited from its improved economic \nfundamentals. The current account deficit is likely to reach \n3.2% of GDP this year, from 5.9% in 2013, reflecting a lower \nexternal financing requirement. Fiscal consolidation has so far \nreduced the fiscal deficit to 3.9% of GDP in 2016/17, from 4.4% \nin 2013/14, and the debt to GDP ratio is expected to stabilise \n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\n10\n* CPI for all urban areas\nSources: SARB and Stats SA\nPercentage change on a year earlier\nTargeted inflation* forecast\n2009\n2011\n2013\n2015\n2017\n2019\nInflation target range\n* At seasonally adjusted annualised rates\nSources: SARB and Stats SA\nPercentage change*\nReal GDP\n2009\n2011\n2013\n2015\n2017\n2019 -8\n-6\n-4\n-2\n0\n2\n4\n6\n8\nIndices: 1 January 2016 = 100\nJan\nMar\nMay\nJul\nSep\nNov\nJan\nMar\n2017\n2016\nEmerging market currencies\n \nJPM EM Currency Index\n \nTurkish lira\n \nIndonesian rupiah\n \nRussian ruble\n \nMexican peso\n \nColombian peso\nSources: Bloomberg and SARB\n \nSouth African rand\n \nIndian rupee\n \nBrazilian real\n \nChinese yuan\n \nHungarian forint\n70\n80\n90\n100\n110\n120\n130\nMonetary Policy Review April 2017\n2\nby 2018/19. Household debt stocks – which peaked at nearly \n90% of disposable incomes in 2008 – are now back to 2006 \nlevels, slightly above 70%. This suggests the hangover from \nthe pre-crisis debt boom may at last be fading. Inflation is \nslowing and should be back within the target range during the \nsecond quarter of 2017. These macroeconomic improvements \nare complemented by other positive outcomes, ranging from \nnormalising rainfall patterns to a sharp reduction in the number \nof work days lost to strikes. The combined effect is somewhat \nbetter economic prospects over the medium term, potentially \nreversing the trend of slower growth and rising inflation which \nhas dogged South Africa through the post-crisis period and \n2016 in particular. \nOverview of the policy stance\nThe repurchase (repo) rate has been stable at 7.0% for a year. \nDuring this period, the medium-term inflation forecast, which is \nthe relevant time frame for monetary policy, has been similarly \nstable. Indeed, the forecast for 2018 has stayed within a narrow \nrange of 5.4–5.5% at every Monetary Policy Committee (MPC) \nmeeting to date. The 2019 forecast, which became available \nonly for the March 2017 meeting, also shows inflation within the \ntarget range, at 5.5%. The existing monetary policy settings are \ntherefore proving adequate to return inflation within the target \nrange over the policy horizon, of around 12–24 months.\nThis outlook is quite favourable compared to a year ago. It \nnonetheless poses two sorts of policy problems. There are \nrisks to this forecast which, on balance, incline towards higher \ninflation. Furthermore, projected inflation remains relatively \nhigh, close to the top end of the 3–6% target range throughout \n2018 and 2019.\nThe exchange rate is the biggest risk to the forecast trajectory. \nThe past year has seen sustained rand appreciation, breaking \na five-year depreciation trend. The currency has weakened \nsharply on occasions during this period – for instance, following \nthe US election result – but it has made up its losses relatively \nquickly. Furthermore, it has recently shrugged off US monetary \ntightening, despite previous sensitivity to Fed moves. In late \nMarch, however, it weakened abruptly following the Cabinet \nreshuffle. In time this may be identified as a new turning point \nfor the currency, but at present the outlook is uncertain. The \nlatest forecast starts with the implied dollar/rand exchange rate \nat about R13.40. That level is close to the actual rates prevailing \nat the start of the second quarter, and well above the first \nquarter strong point of about R12.30. The risk is that the rand \ncould follow a more depreciated path than expected, which \nwould, other things being equal, raise inflation.\nThe second problem is that, given the assumptions, forecast \ninflation is still relatively high. Although headline is decelerating as \ndrought effects fade, underlying inflation remains elevated. Core \ninflation reached a post-crisis high of 5.9% in December 2016, \nand is likely to trend only moderately lower over the medium \nPercentage change over four quarters\n2015\n2016\n2017\n2018\n2019\nChanges to SARB CPI forecast*\n \nMarch 2016 \n \nJuly 2016 \n \nNovember 2016 \n \nMarch 2017 \n* Dotted lines indicate forecasts\nSources: SARB and Stats SA\n \nMay 2016 \n \nSeptember 2016 \n \nJanuary 2017\n \nActual \n4.0\n4.5\n5.0\n5.5\n6.0\n6.5\n7.0\n7.5\nPercentage change over four quarters\n2000 2002 2004 2006 2008\n2010 2012 2014 2016\nBER average inflation expectations since 2000*\n \nTwo years ahead\n* CPIX for metropolitan and other urban areas until the end of 2008;\nCPI for all urban areas thereafter\nSource: BER\n \nFive years ahead\n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\n3\nMonetary Policy Review April 2017\nterm, at no point falling below 5.0%. Furthermore, disinflation in \ncore is driven almost exclusively by goods prices responding to \nexchange rate effects. Core goods inflation is projected at close \nto 4% through 2018 and 2019. By contrast, services inflation is \nmuch closer to 6% across the medium term.\nAn important aspect of the problem is the relatively high level of \ninflation expectations. Surveyed expectations for 2018 have not \nyet declined in line with the South African Reserve Bank’s (SARB) \nforecast, remaining close to 6.0%. Furthermore, expectations \nfor the period five to ten years ahead, as derived from surveys, \nmarket indicators or independent forecasts, all appear similarly \nhigh, at or above the top end of the inflation target range.\nWhile stable expectations were welcome so long as they were \nresistant to higher inflation, their persistence becomes more \nproblematic as inflation falls. The fact that expectations seem \nto be stuck close to 6.0% helps explain why inflation does \nnot slow more rapidly over the forecast period. The relevant \nhorizon for monetary policy now falls across 2018 and 2019. \nWhen these years arrive, shocks to food and petrol prices are \nexpected to have dissipated. The exchange rate forecast for \nthis period is stable in real terms.1 Economic growth, while \nslightly improved, will likely remain low, and employment is \nanticipated to have declined. Yet inflation is still projected well \nabove the midpoint of the target range. Unfortunately, with \nunderlying inflation as well as inflation expectations pinned to \nthe upper-end of the target range, even small negative shocks \nare likely to cause target breaches.\nIn recent years, policymakers have confronted the challenge \nof rising inflation alongside slowing growth. The forecast now \nshows some signs of improvement on both counts. Inflation \nappears to be returning to target, while ‘green shoots’ of growth \nhave been visible following the disappointments of 2016. \nFurthermore, smaller current account deficits are reducing \nexternal financing requirements, while debt trajectories in \nboth the household and public sectors appear more clearly \nsustainable. These developments have permitted a clearer \nsense over the past three MPC meetings that additional policy \ntightening may not be necessary.\nNonetheless, this fledgling recovery is vulnerable to shocks. \nThe expected degree of improvement for both growth and \ninflation is modest at best. Forecast inflation and inflation \nexpectations remain relatively high, constraining prospects for \nrate cuts. The economy is on a path back to full production, \nbut progress is expected to be gradual, with the output gap \neffectively closed only by the end of 2019 despite sustained \nmonetary and fiscal support to growth. Furthermore, even at full \ncapacity the economy’s growth rate will remain unsatisfactory, \nbelow historical averages and only slightly above the growth \nrate of the population. Improving the long run potential of the \neconomy to grow requires reforms to boost investment and \nimprove the functioning of key markets, but such initiatives are \nmostly outside the responsibilities of the central bank.\n1\t\nIn fact, in the forecasting model the longer-run exchange rate does \nnot cause inflation but responds to it, with the nominal exchange rate \ndepreciating from its current starting point in line with inflation differentials.\nPer cent\n2009 2010\n2011\n2012\nDate of forecast\n4.5\n5.0\n5.5\n2013\n2014\n2015\n2016\nSouth Africa’s five year ahead inflation forecast\n \n \nSource: IMF\n4.0\n4.5\n5.0\n5.5\n6.0\nPercentage of potential GDP\n2008\n2010\n2012\n2014\n2016\n2018\nOutput gap with confidence bands\n \n75%\n \n25%\nSource: SARB\n \n50%\n \nOutput gap\n-6\n-4\n-2\n0\n2\n4\n6\nPer cent\n2000 2002 2004 2006 2008 2010 2012 2014 2016\nSouth Africa repurchase and prime rate\n \nRepurchase rate\nSource: SARB\n \nPrime rate\n4\n6\n8\n10\n12\n14\n16\n18\nMonetary Policy Review April 2017\n4\nMonetary policy continues to be supportive of the recovery. \nReal interest rates remain low in historical perspective, thereby \ncontributing to demand and helping to close the output gap. \nSouth Africa has been buffeted by severe inflation shocks since \nthe global financial crisis, including currency depreciation and \ndrought. To prevent a deterioration in inflation expectations, \npolicy accommodation has been somewhat reduced since \n2014. With the appreciation of the exchange rate, weaker \ngrowth last year and expected moderation in food prices, that \npolicy adjustment has appeared sufficient to return inflation to \nwithin the upper part of the target range and to keep it there \nacross the forecast period. The outlook, however, is unusually \nuncertain.\n5\nMonetary Policy Review April 2017\nOverview of the world economy\nGlobal growth is expected to improve from 2016’s post-crisis \nlow. A number of major emerging markets (Russia, Brazil, \nNigeria) are exiting recessions, while the largest (China and \nIndia) appear capable of maintaining growth near current levels. \nMajor advanced economies are in a cylical upturn, with the US, \neuro area and Japan all expected to close their output gaps \nover the next few years. Meanwhile, inflation rates are generally \nmoving back towards targets, from being too high in some \nemerging markets or too low in many advanced economies. \nDespite these positive trends, the shape of the global recovery \nremains unclear, due in particular to policy uncertainty in the \nUS, debt overhangs in China and persistent risks in Europe.\nAdvanced economies \nAdvanced economies are starting 2017 on a much stronger \nfooting than 2016, and arguably any period since the global \nfinancial crisis. Industrial production is accelerating, drag from \ninventories is receding, asset price growth has been vigorous \nand household balance sheets are supporting stronger \ndomestic demand. The Purchasing Managers’ Index (PMI) \nfor the Group of Three (G3) economies has improved from \nan average of just under 51 for the first half of 2016 to over \n56 in February 2017, its highest level since 2011.2 Accordingly, \nadvanced economy growth is expected to reach 1.9% in 2017 \nand 2.0% in 2018, up from 1.6% in 2016.\nThe US economy should contribute significantly to this \nacceleration, with growth in excess of 2.0% over the next \nthree years. The starting point is a good one. Employment \ngains have been healthy, averaging 190 000 jobs per month \nduring 2016, and unemployment has fallen somewhat below \n5.0% – reaching levels consistent with Fed estimates of the \nlong-run natural rate of unemployment. The new administration \nhas brought with it a sharp increase in policy uncertainty. \nNonetheless, financial markets have welcomed the prospect \nof tax cuts, infrastructure expenditure and lighter financial \nregulation. The Standard & Poor’s (S&P) 500 index and Dow \nJones industrial average have gained over 10% since the US \nelections, achieving new highs in early March. Consumer and \nsmall business confidence indicators have also picked up, \nwith various measures reaching their strongest levels in over a \ndecade. Growth forecasts have improved slightly: consensus \nforecasts for 2017 and 2018 growth were revised up by 0.1 \nand 0.2 percentage points respectively in February 2017 \ncompared with three months ago. Accordingly, the output \ngap – which the Congressional Budget Office puts at around \n-0.5% of potential GDP for 2016 – is likely to turn positive by \n2018 as robust demand pushes growth above potential. These \ndevelopments indicate that the Fed will be able to proceed \n2\t\nThe G3 PMI includes the US, euro area and Japan. It is weighted using an \naverage of 2014–2016 real GDP adjusted for purchasing power parity.\nForecast\nAnnual percentage change\n2008\n2010\n2012\n2014\n2016\n2018\nWorld real GDP growth*\n \nWorld real GDP\n* Trade weighted based on South African exports. Projections are\nbased on the Global Projection Model\nSources: IMF and SARB\n \nWorld output gap\n-3\n-2\n-1\n0\n1\n2\n3\n4\n5\n6\nPercentage change over 12 months\n2012\n2013\n2014\n2015\n2017\n2016\nUS inflation\n \nPCE price index\nSource: US Bureau of Economic Analysis\n \nInflation target\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\nPer cent\nJ M M J S N J M M J S N J M M J S N J M M J S N\n2016\n2017\n2018\n2019\nFederal funds rate \n \nEffective federal funds rate\n \n17 November 2016\nSources: CME Group, Fed and SARB\n \n1 November 2016\n \n3 April 2017\n0.2\n0.4\n0.6\n0.8\n1.0\n1.2\n1.4\n1.6\n1.8\n2.0\n2.2\nMonetary Policy Review April 2017\n6\nwith monetary policy normalisation, in line with its projections. \nBoth the Fed dot plots and market expectations indicate \nthree hikes in 2017, lifting the Fed funds rate to between \n1.25 and 1.5%.\nOther major advanced economies are also expected to close \noutput gaps over the next few years. Despite lower potential \ngrowth, the degree of slack in the euro area and Japan is \napproximately twice that in the US, reflecting a longer period of \nunderperformance.3 In the euro area, significant progress has \nbeen made in lowering the unemployment rate, with the region \nas a whole having added 4.6 million jobs since the first half of \n2013. Yet wage growth remains muted, registering a nominal \nincrease of 1.3% in the third quarter of 2016 versus almost 3.0% \npre-crisis. The number of hours worked has also not recovered \nto pre-crisis levels. Forecasts indicate growth of 1.6% in both \n2017 and 2018, which should aid the labour market recovery. \nIn Japan, economic growth surprised on the upside in 2016, \nsupported by fiscal stimulus and stronger exports. Over the \nnext two years, Japan is expected to benefit from stronger \nglobal demand and a relatively depreciated currency, as well \nas continued fiscal stimulus. These should permit growth rates \nof around 1%, slightly above that economy’s potential.\nEmerging market economies\nEmerging markets faced difficult conditions during 2016. Over \nthe first half of the year, the BRICS4 weighted PMI averaged \n49.1, with only India’s manufacturing sector still expanding. \nProspects have since improved, with the PMI moving into \npositive territory, reaching 51.1 in February 2017. In line with this \nupward trend, the International Monetary Fund (IMF) expects \ngrowth in emerging markets to reach 4.8% by 2018, from \n4.1% in 2016.\nRecessions in several major regional players are expected \nto end soon. Brazilian output is projected to start growing \nagain towards the end of 2017, having contracted throughout \n2015 and 2016. Russia’s economy is likely to return to growth \nsooner, possibly from the beginning of 2017, having also shrunk \nover the past two years. Nigeria slipped into recession at the \nstart of 2016 and should similarly be growing again sometime \nthis year. Better performance in these economies will be \nreplicated in their respective regions. Both Latin America and \nthe Commonwealth of Independent States are forecast to see \na return to growth in 2017, with the pace of expansion rising \nover 2.0% by 2019. Sub-Saharan Africa is also expected to \naccelerate from current lows, with growth picking up from \n1.6% in 2016 to slightly over 4.0% by 2019.\nThe direction of growth in emerging Asia depends chiefly on \nprospects for the two regional giants, China and India. \n3\t\nThere is disagreement on the size of the Japanese output gap. The \nInternational Monetary Fund estimate the output gap at -1.7% of potential \nGDP in 2016, while the Bank of Japan and the Cabinet Office predict an \noutput gap of -0.3% and -0.5% respectively in 2016Q3. In contrast, the \nOrganisation for Economic Co-operation and Development estimates the \noutput gap at 0.5% in 2016. On balance, estimates suggest the output \ngap is negative.\t\n4\t\nBRICS refers to Brazil, Russia, India, China and South Africa.\t\nIndices\n2008\n2010\n2012\n2014\n2016\nManufacturing purchasing managers’ indices\n \nG3 (GDP PPP weighted)\n \nJPMorgan global manufacturing PMI\nSources: IMF, JPMorgan and SARB\n \nBRICS (GDP PPP weighted)\n30\n35\n40\n45\n50\n55\n60\n7\nMonetary Policy Review April 2017\nRebalancing in China should cause growth to slow towards \n6.0% from 6.7% in 2016. India, by contrast, is expected to retain \nits title as the fastest growing major economy, achieving growth \nrates closer to 8.0% over the next two years. The net effect of \nthese trends is that emerging Asian growth decelerates slightly \nfrom 6.5% in 2016 to approximately 6.3% over the next two \nyears, a rate sufficient for emerging Asia to remain the world’s \nfastest growing region.\nImproved inflation dynamics\nInflation dynamics are improving across most of the world’s \neconomies. In many cases, chiefly advanced economies, \nthis entails reflation following an extended period of price \nstagnation. For a range of emerging markets, by contrast, \ninflation is subsiding towards more desirable levels.\nThe reflation trend reflects higher energy and food costs \nalongside improving growth. Producer prices for final demand \ngoods in the US moved from deflation for the better part of \n2015 to growth of 2.2% in February 2017. In China and the \neuro area, where producer price deflation dates back to \n2012 and 2013 respectively, price changes have also turned \npositive. Rising producer prices have already translated into \nhigher consumer prices in most advanced economies, moving \ninflation closer to central bank targets. Advanced economy \nconsumer prices have risen from an average of 0.3% in 2015 \nto 1.5% in December 2016. The IMF projects that inflation in \nadvanced economies will reach 1.9% by 2018.\nIn some major economies, particularly the euro area and \nJapan, stronger headline inflation has not been accompanied \nby a rise in underlying inflation. In the euro area, core inflation \n(which excludes food and energy) was 0.9% in February 2017, \nretreating from a peak of 1.1% in October 2015. There is, \nhowever, a wide dispersion in inflation rates, with Austria and \nBelgium at 1.6%, the Netherlands and Germany at 1.3%, France \nand Ireland at 0.2% and Greece at -0.4%. In Japan, consumer \ninflation less fresh food remains in deflation, contracting by \n0.2% on an annual basis in December 2016. Market indicators, \nhowever, have started to show rising inflation expectations in \nthese economies, a necessary condition for a pick-up in core \ninflation. The five-year, five-year forward inflation expectations \nin the euro area and Japan have both risen by over 30 basis \npoints since September 2016. Signs of inflation in the euro \narea, particularly in Germany, suggest that the onset of policy \nnormalisation may come sooner than currently anticipated.\nIn other major economies such as the US and China, by contrast, \ncore and headline are more closely connected. Core Personal \nConsumption Expenditure (PCE) inflation in the US rose to \n1.9% in February 2017 from a low of 1.4% in July 2015. Rising \ncore inflation is underpinned by accelerating average hourly \nearnings. Inflation expectations – again as measured by five-\nyear, five-year forward expectations – have made comparable \ngains, rising to 2.4%. Survey-based measures of expectations \nPer cent\n2010\n2012\n2014\n2016\nProducer price inflation\n \nUS\n \nChina\nSource: Haver Analytics\n \nJapan\n \nUK\n-6\n-4\n-2\n0\n2\n4\n6\n8\n \nEuro area\nPer cent\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\nFive-year, five-year forward inflation swap rate\n \nEuro area\nSource: Bloomberg\n \nJapan\n \nUS\n-1.0\n-0.5\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n3.5\n4.0\nMonetary Policy Review April 2017\n8\nhave not followed this upward trend, but nonetheless remain \nabove 2%. In China, core inflation registered 1.8% in February \n2017 from a low of 1.3% in February 2016. Higher inflation \nrepresents rising producer prices and improving near-term \neconomic conditions due to policy stimulus.\nEmerging markets as a whole are achieving disinflation despite \nrising commodity prices. Average inflation has fallen from a \nrecent peak of 6.8% in January 2016 to 4.2% in December, \nand IMF forecasts suggest it will stabilise close to these levels \n(4.5% in 2017 and 4.4% in 2018). Disinflation has been driven \npredominantly by policy adjustments and currency rebounds, as \nwell as fading supply shocks. Russia and Brazil are prominent \nexamples of these phenomena. In Brazil, headline inflation has \nfallen from a peak of 10.7% in January 2016 to 4.8% in February \n2017. In Russia, inflation has slowed from 16.9% in March 2015 \nto 4.6% in February 2017. Following substantial tightening during \nthe inflation upsurge (with the policy rate up by 700 basis points \nin Brazil, and 1 150 in Russia) both these countries now have \nspace to ease, leading to rate cuts totalling 200 basis points in \nBrazil and 725 basis points in Russia to date.\nHeightened policy uncertainty\nThis relatively optimistic assessment of the global economic \noutlook offered in this section confronts risks on at least three \nfronts. First, the election of Donald Trump in the US has opened \nspace for abrupt and wide-ranging policy changes. In its first \nmonths in office, the new administration has attempted travel \nbans, withdrawn from the Trans-Pacific Partnership (TPP)5 and \nchallenged the fairness of exchange rate policies in Japan, the \neuro area and China. These moves signal a more protectionist \napproach to trade, potentially weakening an important driver \nof global growth.\nThe new leadership in Washington has also proposed \nsubstantial investments in infrastructure as well as tax cuts \nfor individuals and companies. The initial market responses \nwere positive, although implementation risks have recently \ndiluted this enthusiasm. Unlike trade restrictions, infrastructure \ninvestment and tax cuts should improve potential growth in the \nUS and boost consumer expenditure, provided these policies \ndo not seriously compromise debt sustainability. President \nTrump has also ordered a review of the Dodd-Frank Act, \nthe centrepiece of post-crisis financial reform, arguing that it \nimposes excessive burdens on companies and stifles lending. \nLooser financial regulation may well yield short term benefits, \nbut these gains should be set against the risks of large and \npersistent costs from financial crises.\n5\t\nTPP is a multilateral trade deal between 12 countries including the US, \nCanada, Mexico, Chile, Peru, Malaysia, Japan, Vietnam, Singapore, \nAustralia, New Zealand and Brunei. It was aimed at lowering tariffs and \nimproving economic relationships between member nations.\nIndex\n2008\n2010\n2012\n2014\n2016\nGlobal economic policy uncertainty\nSource: Baker, Bloom and Davis (2016)\n50\n100\n150\n200\n250\n300\n9\nMonetary Policy Review April 2017\nThe second front is the debt overhang in China. Policymakers \nhave chosen to maintain economic stability and higher growth \nat the cost of worsening imbalances. Total social financing, a \nbroad measure of credit in the economy, has risen to 213% \nof GDP in 2016 from close to 100% in 2010. Policymakers \nhave also used close to US$1 trillion of foreign reserves \nsince mid-2014 to stabilise the exchange rate. The near-term \nconsequences of policy stimulus are rising commodity prices \nto the benefit of the relevant exporting countries. However, the \nlonger-term risks to growth are rising.\nThe third front is in Europe, where the ‘European project’ of \ncloser political and economic union remains in crisis. The \nUnited Kingdom (UK) is in the process of negotiating the terms \nof its exit from the European Union (EU) (so called Brexit). \nThe short term consequences have been relatively benign \nto date, with consumer confidence and a more competitive \nexchange rate sustaining demand in Britain, although sterling \ndepreciation is expected to produce a period of above-\ntarget inflation. The longer term consequences are likely to \nbe less favourable, particularly if investment suffers as firms \nrelocate to more attractive jurisdictions. For the remaining \nparts of the EU, the economic spillovers from Brexit have \nbeen minimal. The more serious implications may take the \nform of demonstration effects, bolstering nationalist, populist \nfigures in other European countries. In this vein, the upcoming \nFrench presidential elections might conceivably install an anti-\neuro, anti-Brussels leader in Paris. Italy is another prominent \ncandidate for disruption, given the prospect of early elections \nin the context of continued economic underperformance and \na troubled banking sector. Finally, Greece’s ongoing recession \nand large debt burden is a persistent source of crisis summits \nand policy dissension.\nConclusion\nThe global economy started 2017 on a stronger footing. \nGrowth prospects in several major economies are improving \nand inflation is generally moving back towards target levels. \nAnimal spirits, which have been dormant since the global \nfinancial crisis, appear to have revived. It is difficult to judge \nwhether the new optimism is justified by fundamentals and \nrisks. The policy direction in the US is uncertain but outcomes \nacross issues such as trade and financial regulation may well \nprove negative for the global economy over the longer term. \nPolicy stimulus in China has stabilised growth and benefitted \ncommodity exporting economies, but at the cost of rapid \nand potentially unproductive debt growth. There are multiple \nflashpoints in Europe, including Brexit, French elections, the \nItalian banking system and Greek debt. The forecast anticipates \na steady improvement in global growth over the medium term, \neliminating negative output gaps, but the risks to this forecast \nare skewed to the downside.\nIndex\nIndices: January 2012 = 100\n2012\n2014\n2013\n2015\n2016\n2017\nChinese economy and commodity prices\n \nIron ore (left-hand scale)\n \nCoal (left-hand scale)\n \nChinese purchasing managers index\nSource: Bloomberg\n48\n49\n50\n51\n52\n53\n54\n0\n20\n40\n60\n80\n100\n120\nMonetary Policy Review April 2017\n10\nOverview of financial markets\nGlobal financial conditions have been exceptionally calm lately. \nDespite an unusually high degree of policy uncertainty, financial \nmarkets have benefitted from expectations of more corporate \nfriendly US policies and economic stabilisation in China. \nThese global conditions, combined with signs of domestic \nstabilisation, have supported prices of South African assets.\nThe changing relationship between \nFed tightening and risk assets\nAs highlighted in the world economy section of this MPR, \nUS economic conditions have made the Fed more confident of \nreaching its dual goals of full employment and price stability. \nConsequently, the Fed has raised rates twice in four months, \nwith both markets and the Fed’s own projections indicating two \nmore increases this year. Coupled with proposals by the newly \nelected US administration for sizable tax cuts and a boost \nto infrastructure spending, this has led to an upward shift of \nthe US yield curve. From around 1.6% in early October 2016, \nthe US 10-year yield rose to a high of 2.6% on 15 December, \nbefore easing back in recent months.\nIn contrast with what happened during the ‘taper tantrum’ of \n2013, the prospect of an upward adjustment in what is \nessentially the world’s risk free rate is not proving detrimental \nfor riskier assets. For example, since the beginning of October \n2016, the S&P 500 index of US equities has risen by close to \n10%, while spreads of BBB and A-rated corporate debt over \nUS Treasuries have narrowed by 10–15 basis points.\nThe pattern has been the same outside the US. Global equities \nhave rallied, with the MSCI World Index gaining 7% and the \nMSCI Emerging Market Index up 3%. Long-term bond yields \nin Germany, Japan and the UK have risen by only 10–40 basis \npoints (although German yields benefitted from a perceived \nrise in political risk within the single-currency bloc). Meanwhile, \nemerging market debt has remained attractive to investors: \nJP Morgan’s Emerging Markets Bond Index Plus (EMBI+) spread \nhas narrowed by about 70 basis points from early November \nhighs, reversing an earlier sell-off; its emerging local currency \nmarket index (ELMI) has mirrored these developments.6\nIn foreign exchange markets, the dollar has appreciated \nfurther. However, the additional gains in recent months have \nbeen relatively limited. Whereas the Fed’s broad dollar index is \nnow 22% higher than it was at the start of 2014, it is only 1.1% \nhigher than it was at the start of November 2016. In turn, the \nrelatively moderate appreciation of the US dollar has enabled \nemerging market currencies to recoup, on average, all of their \nlosses incurred in the immediate aftermath of the US election.\nAs of late March, the JPMorgan Emerging Market Currency \nIndex was slightly (0.5%) above its 1 November 2016 level.\n6\t\nThe JPMorgan EMBI+ includes US dollar denominated debt (bonds or \nloans), issued by emerging market sovereigns and tracks total returns for \nactively traded external debt instruments in these markets.\nIndex\n2010\n2012\n2014\n2016\nUS volatility and policy uncertainty (news based)\n \nVIX volatility index (left-hand scale)\n \nPolicy uncertainty index (news based) \nSources: Bloomberg and Economic Policy Uncertainty\n50\n100\n150\n200\n250\n300\n10\n15\n20\n25\n30\n35\n40\n45\nIndex\nIndex\nIndex\nOct\nNov\n2016\n2017\nDec\nJan\nFeb\nMar\nMSCI emerging market and world equity indices\n \nMSCI EM Index (left-hand scale)\n \nMSCI World Index\nSource: Bloomberg\n1 650\n1 675\n1 700\n1 725\n1 750\n1 775\n1 800\n1 825\n1 850\n1 875\n1 900\n825\n840\n855\n870\n885\n900\n915\n930\n945\n960\n975\nYield to maturity (per cent)\nYears to maturity\nTreasury nominal coupon yield curves\n \nOctober 2016\nSource: Bloomberg\n \nDecember 2016\n \nMarch 2017\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n3.5\n30\n10\n5\n3\n2\n1\n11\nMonetary Policy Review April 2017\nEconomic fundamentals help explain this decoupling of rate \nexpectations and risk assets. Whereas in 2013 Fed tightening \ncould have been interpreted as premature, it is now more clearly \njustified by an improved outlook for growth and inflation – with \na range of commentators even suggesting the Fed has fallen \nbehind the curve. Furthermore, the macroeconomic imbalances \nwhich distinguished vulnerable emerging markets during the \n‘taper tantrum’ have in most cases moderated. Finally, the \nadverse scenarios which preoccupied financial markets earlier \nin 2016 have not materialised. In particular, there has been no \naggressive devaluation of the Chinese renminbi. Furthermore, the \nUK decision to leave the EU has not yet produced the negative \nmacroeconomic consequences which many observers feared, \nalthough the terms of Brexit remain unknown. The conclusion \nis that normalisation of US monetary policy is a more benign \nprospect now than it was four years ago.\nMixed fortunes for South African assets\nLocal financial market developments have not followed a \nconsistent trend. Much of the past year was characterised \nby more positive perceptions of South African assets in the \ncontext of a favourable global environment. By contrast, the \ntrend has recently reversed following the cabinet reshuffle and \nthe subsequent credit ratings downgrade by S&P.\nThe South African rand initially out-performed most of its \nemerging market peers. From January 2016 to mid-March \n2017, it appreciated by 21.7% against the US dollar and 22.4% \non a trade-weighted basis. However, the currency resumed \nits depreciating trend late in March as speculation mounted \nthat the Finance Minister would be replaced. The rand has \nsince become the worst performing currency compared to its \nemerging market peers.\nSouth African bonds have echoed the rand’s fortunes, starting \nwith a comparatively strong performance but finishing relatively \nweakly. The yield on the benchmark R186 bond, maturing in \n2026, stood at 8.5% at the start of March. By early April it \nhad breached the 9.0% level, while the spread over its US \nequivalent had widened by 67 basis points.\nThe initial gains for South African assets reflected a more \npositive turn in the South Africa investment narrative. This \nwas based on a range of factors, including a narrower current \naccount deficit, evidence of an upward turn in the economic \ncycle and moderating inflation which supported real yields. \nFurthermore, the 2017 Budget confirmed that consolidation \nplans were ongoing despite the challenges of disappointing \nrevenue growth. However, some of the positive impact \nfrom these earlier developments was eroded by the policy \nuncertainty introduced by the reshuffle.\nIn contrast to both local bonds and the rand, South African \nequities have tended to stagnate throughout the past year, \nunder-performing both global and emerging-market equity \nindices. As of 3 April, the JSE Limited (JSE) All-Share Index \n(Alsi) was 1.2% lower than on 1 October 2016, with a brief New \nYear rally having proved short-lived. In part, the appreciation \nof the rand has weighed on the equity market, in particular \nBasis points\nSouth Africa five-year CDS\nJ\nM\nM\nJ\nS\nN\nJ\nM\nM\nJ\nS\nN\nJ\nM\n2015\n2016\n2017\nSouth Africa credit default swap\nSource: Bloomberg\n150\n200\n250\n300\n350\n400\nIndices: 22 May 2013 = 100\nEMBI+ spread and US corporate 10-year spread\n \nUS corporate 10-year spread\n \nEMBI+ sovereign spread\nSource: Bloomberg\n60\n80\n100\n120\n140\n160\n180\n200\n2013\n2014\n2015\n2016\n2017\nMonetary Policy Review April 2017\n12\nshares of companies such as mining firms which generate \na large portion of profits overseas and which investors treat \nas rand hedges. At the same time, investigations into alleged \ncolluding practices of banks in their foreign exchange trading \nbusinesses have slightly depressed banking stocks.\nShort term interest rates\nExchange rate developments have helped shape expectations \nof future domestic policy rate movements. As of mid-March, \nBloomberg surveys of private sector economists indicated \ninterest rate cuts, with the average expectation for the repo \nrate down by 25 basis points to 6.75% for the first quarter of \n2018. Similarly, market indicators have until recently pointed to \nlower rates. By mid-March forward rate agreements were fully \npricing in at least one repo rate reduction in 2018. Towards the \nend of March, however, these measures moved back towards \nno rate changes, in line with renewed rand depreciation, and \nby early April had shifted to indicating approximately one more \nrepo rate increase within the next 12 months.\nSignificant risks threaten financial \nmarket improvement\nBoth domestic and external risk factors could prompt a \ncorrection in financial markets in coming quarters. In the US, \nupside inflation surprises could force a faster pace of interest \nrate hikes – especially if the new administration’s proposed \ntax cuts provide a sizable boost to demand in an environment \nof reduced slack. This could restore the link between Fed \ntightening and weakness of riskier assets.\nAt the same time, overheating in segments of China’s economy \n– especially the property market – may force authorities to \ntighten policy more aggressively, with potentially negative \nconsequences for global market sentiment and commodity \nprices. Finally, within European markets, elections in France and \nGermany in 2017 may show a further rise in anti-EU sentiment. \nWhile opinion polls currently do not point to the formation of \ngovernments that support abandoning the euro, this risk could \nat some point prove highly disruptive to the orderly functioning \nof global financial markets.\nOn the domestic front, the biggest risk now stems from additional \nrating downgrades, especially as S&P kept a negative outlook \non its sovereign ratings. While local currency ratings remain \ninvestment grade at present, further downgrades (by one notch \nfrom S&P and two notches from Moody’s) would see South \nAfrica excluded from the Citigroup World Government Bond \nIndex (WGBI).7 This would require some foreign investors to \nsell their domestic bonds. Rising uncertainty about the future \ndirection of economic policy could prompt capital outflows in \nanticipation of such downgrades. These outflows would, in \nturn, raise borrowing costs and place the rand under renewed \ndownward pressure, potentially accelerating inflation.\n7\t\nFitch ratings are not used for WGBI inclusion.\nIndices: 1 September 2016 = 100\nSep\nOct\n2016\nNov\nDec\n2017\nJan\nFeb\nMar\nJSE All-Share, mining and banking indices\n \nJSE Alsi\n \nJSE Alsi (Banking)\nSources: Bloomberg and SARB\n \nJSE Alsi (Mining)\n90\n95\n100\n105\n110\n115\n120\n125\nPer cent\n2014\n2015\n2016\n2017\n2018\nRepo rate expectations\n \nRepo rate\nSources: Bloomberg and SARB\n \nBloomberg consensus forecast\n5.0\n5.5\n6.0\n6.5\n7.0\n7.5\nForward rate spread\nRand per US$\nForward rate spread and exchange rate of the rand\n \nRand against the US dollar (left-hand scale)\n \nFRA spread (12*15 and 3*6)\nSource: Bloomberg\n-0.6\n-0.3\n0.0\n0.3\n0.6\n0.9\n1.2\n1.5\n1.8\n4\n6\n8\n10\n12\n14\n16\n18\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n13\nMonetary Policy Review April 2017\nOverview of the real economy\nSouth African GDP growth has eased steadily over the past \nfive years. It is likely 2016 was the low point, with output \nexpanding just 0.3%, compared to 1.3% in 2015 and forecasts \nof 1.2% in 2017, 1.7% in 2018 and 2.0% in 2019. The projected \nimprovement in growth over the medium term stems from a \nmild recovery in investment as well as improved household \nconsumption, supported by smaller contributions from net \nexports. Potential growth, the rate of expansion possible \nwithout accelerating inflation, remains below 2.0% over the \nmedium term, well below historical averages.\nExpenditure components* of real gross domestic product\nAnnual percentage change\nActual\nForecast\nComponents\n2015\n2016\n2017\n2018\n2019\nHousehold consumption.....\n1.7\n0.8\n1.4\n1.3\n1.8\n1.0\n0.5\n0.9\n0.8\n1.1\nGovernment consumption...\n0.5\n2.0\n1.0\n1.0\n1.0\n0.1\n0.4\n0.2\n0.2\n0.2\nInvestment..........................\n2.3\n-3.9\n0.2\n1.6\n2.0\n0.5\n-0.8\n0.0\n0.3\n0.4\nOther..................................\n0.2\n-1.0\n0.5\n0.0\n0.0\nExports...............................\n3.9\n-0.1\n0.2\n3.8\n3.8\nImports...............................\n5.4\n-3.7\n1.6\n2.7\n2.8\nNet exports.........................\n-0.5\n1.1\n-0.4\n0.3\n0.3\nGDP....................................\n1.3\n0.3\n1.2\n1.7\n2.0\n*\n\tPercentage points contributions of expenditure components to growth in real\nGDP are in italics\nSources: SARB and Stats SA\nLow growth in context\nAlthough recent fluctuations in South Africa’s growth rate have \nstemmed from exogenous shocks, including drought, the \nunderlying trend remains very subdued. As noted in previous \nMPRs, growth close to 1% compares unfavourably with longer \nterm South African growth averages of around 3%. It is also \ndistant from the National Development Plan aspiration of over 5%.\nInternational comparisons provide another perspective on \nSouth Africa’s weak growth. Although the pace of world \neconomic expansion slowed in the aftermath of the global \nfinancial crisis, South Africa has decelerated more abruptly. \nIn the years preceding the crisis, South Africa ranked slightly \nabove the global median for growth. In both 2004 and 2005, for \ninstance, it was growing more rapidly than 54% of countries. \nThis ranking has slipped steadily after the crisis, with South \nAfrica falling into the bottom third of countries by 2014; in \n2016 South Africa is projected to have outgrown just 15% of \ncountries. Global growth is anticipated to accelerate in 2017, \nso South Africa’s own growth acceleration does not improve \nits ranking.8 \n8\t\n2016 and 2017 rankings are based on the SARB growth forecasts. The \nIMF’s forecasts for South Africa are slightly lower.\nPercentage points\nAnnual percentage change \n2011 2012 2013 2014 2015 2016 2017 2018 2019\nGDP and its expenditure contributors\nGovernment consumption\nOther\nHousehold consumption\nSources: SARB and Stats SA\nNet exports\nInvestment\nGDP (left-hand scale)\nForecast\n-3\n-2\n-1\n0\n1\n2\n3\n4\n5\n6\n-3\n-2\n-1\n0\n1\n2\n3\n4\n5\n6\nPercentage\nSouth Africa percentage ranking and share of\ncountries growing faster/slower than SA \nShare of countries growing faster than South Africa \nShare of countries growing slower than South Africa \nSouth Africa (percentage rank)\nSources: IMF, SARB and Stats SA\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\n2017\n2015\n2012\n2011\n2009\n2007\n2005\n15\n53\nForecast\nPercentage change\nReal GDP\nCommodity countries\nWorld\nSources: IMF, SARB and Stats SA\n2017\n2015\n2013\n2011\n2009\n2007\n2005\n-2\n0\n2\n4\n6\n8\n10\nSouth Africa\nMonetary Policy Review April 2017\n14\nThere are a range of factors underpinning South Africa’s post-\ncrisis growth slowdown. Some are relatively deep-rooted, \nsuch as household debt overhangs and declining commodity \nprices. Others have intervened more unexpectedly, including \ndrought and shocks to confidence. The scale of South \nAfrica’s slowdown, both in absolute terms and relative to \nother economies, demonstrates that these challenges have \nbeen both severe and concentrated. It is also becoming \nclearer, however, that the slowdown has helped effect a partial \nrebalancing of the economy. In particular, fiscal consolidation, \nhousehold deleveraging and smaller current account deficits \nprovide a sounder foundation for future growth. Furthermore, \nlower inflation will boost spending power and help moderate \nlong term borrowing costs.\nThe role of the primary sector\nExtremely low growth in 2016 largely reflects underperformance \nin the primary sector, with both agriculture and mining \ncontracting. Absent these shocks, growth in 2016 would \nprobably have been over 1%. In turn, a rebound in the primary \nsector helps explain the growth acceleration anticipated for \n2017. For agriculture, this is a result of rainfall normalising \nfollowing two years of drought across much of the country. The \nagricultural sector (including forestry and fishing) is relatively \nsmall – around 2% of the total economy – but it contracted \nsharply in 2016, falling by 7.8%. Its recovery in 2017 is likely \nto add around 0.3 percentage points directly to total growth \nfor the year. The mining sector is larger than the agricultural \nsector, at around 7.0% of GDP. It shrank by 4.7% in 2016, but is \nexpected to rebound in 2017, growing more than 2%, supported \nby inventory restocking and the uptick in commodity prices. \nIts recovery should directly contribute about 0.2 percentage \npoints to annual growth.\nHousehold consumption\nReal household consumption growth has been mediocre \nin historical perspective, averaging just over 1.0% for the \npast three years, versus 3.4% on average since 1994. It has \nnonetheless outpaced overall GDP growth in recent quarters \nand is expected to do so again in 2017. This is mainly due \nto ongoing real wage gains which are boosting disposable \nincome. Households will also benefit from declining inflation, \nparticularly for food and fuels. Furthermore, wealth effects \nshould become supportive later in the forecast period as asset \nprices recover from a period of stagnation. By contrast, other \nfactors are constraining households. Tax increases announced \nin the 2017 Budget will cut into disposable incomes. \nEmployment is projected to decline until the middle of 2019, \ndue to a difficult environment for job creation without sufficient \noffsetting wage moderation. Finally, debt levels remain quite \nhigh and households are expected to continue deleveraging.\nThe latest data indicate a slight downturn in debt service \ncosts, as a proportion of disposable income, reflecting stable \ninterest rates alongside declining debt burdens. Indeed, debt \nRatio\nRatio\n2006\n2008\n2010\n2012\n2014\n2016\nHousehold debt and debt service costs\n \nHousehold debt to disposable income (left-hand scale)\n \nDebt service cost to disposable income\nSource: SARB\n7\n8\n9\n10\n11\n12\n13\n14\n15\n70\n72\n74\n76\n78\n80\n82\n84\n86\n88\n90\n15\nMonetary Policy Review April 2017\nstocks relative to incomes have now fallen to levels last seen \nin early 2006. This development favours the long term financial \nsecurity of households and should, with time, support stronger \ncredit growth. Over the medium term, however, households \nare unlikely to achieve debt or income levels adequate to drive \nmore rapid economic growth.\nHousehold income levels\nAnnual percentage change\nActual\n SARB forecast\n2015\n2016\n2017\n2018\n2019\nReal disposable income..............\n2.5\n1.2\n1.4\n1.2\n1.8\nReal wealth.................................\n1.6\n-0.4\n0.7\n1.7\n1.8\nEmployment................................\n0.0\n-0.2 \n-0.8\n-0.4\n0.1\nReal household consumption......\n1.7\n0.8\n1.4\n1.3\n1.8\n Source: SARB\nInvestment\nInvestment was the worst performing component of GDP in \n2016 – contracting by 3.9% over the year – and is forecast to lag \nagain in 2017, growing by just 0.2%. It is expected to rebound \nin 2018 and 2019, becoming the fastest growing portion of \nthe economy.\nThe ongoing investment slump has two components. The first \nis weak private sector investment. This is broadly explained \nby a collapse in business confidence, which has been \nsubdued throughout the post crisis period but deteriorated \nespecially markedly in recent years. During this period, the \nelectricity constraint became binding with the advent of load \nshedding. Business sentiment was further undermined by the \npersistent threat of a sovereign credit ratings downgrade to \nbelow investment grade, threatening both higher long term \nborrowing costs and the reputational burden of ‘junk status’. \nFinally, confidence suffered from acute political shocks, also \nvisible in indicators such as credit default swaps and survey-\nbased indicators of policy uncertainty. The forecast implies a \nrecovery in confidence which strengthens private investment, \ngenerating growth of 1.1% in 2018 and 1.4% in 2019. But that \nrecovery is far from assured.\nThe second component of the recent investment slump is an \nunexpected contraction in public-sector investment. This was \nmainly driven by state-owned companies (SOCs) (of which \nEskom and Transnet account for about 80%) which continue \nto underspend and delay investment plans. For instance, in \n2015/16 SOCs spent R20.9 billion less than what was expected \nat the time of the 2015 Budget. However, the most recent \nestimates indicate that there will be a return to growth in SOC \ninvestment spending in nominal terms. Unfortunately, a portion \nof higher spending will not translate into real gains given cost \noverruns in a variety of projects. SOC spending is expected to \nbe slower over the forecast period, relative to recent years, as \ncorporations are at or near the end of major projects (such as \nthe Medupi and Kusile power plants).\nPercentage change over four quarters\nIndex\nForecast\n2001 2003 2005 2007 2009 2011 2013 2015 2017 2019\nBusiness confidence and real fixed investment\n(private business)\n \nRMB/BER Business Confidence Index (left-hand scale)\n \nReal fixed investment by private business\nSources: RMB/BER and SARB \n-30\n-25\n-20\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\nPercentage of GDP\n2000\n2004\n2002\n2006\n2008\n2010\n2012 2014\n2016\nFixed investment\n \nGeneral government\n \nPrivate business\nSource: SARB\n \nPublic corporations\n \nTotal \n0\n5\n10\n15\n20\n25\nPercentage change \n2000\n2004\n2002\n2006\n2008\n2010\n2012 2014\n2016\nFixed investment growth\n \nGeneral government\n \nPrivate business\nSource: SARB\n \nPublic corporations\n \nTotal \n-25\n-15\n-5\n5\n15\n25\n35\n45\nMonetary Policy Review April 2017\n16\nGeneral government also contributed to the weakness of \npublic investment, registering slightly positive growth in 2016, \nwell below previous levels. This appears to reflect one-off \nfactors, including a base effect from 2015. It is not simply \nexplained by fiscal consolidation because investment budgets \nhave been protected (although at lower levels of government, \nfunds may nonetheless have been diverted into consumption). \nGeneral government investment is expected to pick up in 2017 \nand 2018, leading the overall recovery in public investment.\nInvestment (March 2017 forecast)\nPercentage of GDP\nActual\nSARB forecast\n2014\n2015\n2016\n2017\n2018\n2019\nGeneral government................\n8.7\n13.4\n1.1\n4.0\n3.0\n4.0\nPublic corporations.................\n-0.6\n2.8\n-1.6\n-0.5\n1.5\n2.0\nPrivate business enterprises....\n0.8\n-0.5\n-6.0\n-0.7\n1.1\n1.4\nTotal........................................\n1.7\n2.3\n-3.9\n0.2\n1.6\n2.0\n Source: SARB\nGovernment consumption and \nfiscal dynamics\nPerhaps unexpectedly, government consumption expenditure \nwas the fastest growing component of GDP in 2016, expanding \nby 2.0%, up from just 0.5% in 2015. However, this uptick is \nmostly explained by hiring for the 2016 local government \nelections, and will therefore not be sustained. Accordingly, \ngovernment consumption is projected to moderate over \nthe forecast period, growing at a stable 1.0% between 2017 \nand 2019.\nThese growth rates are lower than they were in the early post-\ncrisis years, owing to the fiscal consolidation programme \nrequired to rein in public debt growth. They nonetheless entail \nsmall positive contributions to overall GDP growth across the \nforecast horizon, given that government spending continues to \nrise in real terms. The implication is that fiscal policy remains \nrelatively supportive of demand. As a result, the main budget \ndeficit is expected to narrow slightly over the medium term \nand a primary surplus is now only expected in 2018/19, one \nyear later than planned in the 2016 Budget. The debt peak is \nnow anticipated at nearly 53% of GDP in 2018/19 – versus, \nfor instance, the 2016 Budget forecast of 51% in 2017/18. \nEstimates of the structural budget balance, which excludes \ncyclical fluctuations in tax revenue and expenditure, suggest \nthe structural deficit is around 3% of GDP.\nPercentage of GDP\n2014/15 2015/16 2016/17 2017/18 2018/19 2019/20\nGross debt \n \nMTBPS 2015\n \nMTBPS 2016 \n \nSource: National Treasury\n \nBudget 2016\n \nBudget 2017\n46\n47\n48\n49\n50\n51\n52\n53\n54\nForecast\nIndices: 2010 = 100\n2008\n2010\n2012\n2014\n2016\n2018\nSouth African terms of trade\n \nNovember 2016 MPC\nSource: SARB \n \nMarch 2017 MPC\n85\n90\n95\n100\n105\n110\nPercentage of GDP\nGovernment balances\n \nMain primary balance – 2017 Budget\n \nMain primary balance – 2016 Budget\n \nMain budget balance – 2017 Budget\n \nMain budget balance – 2016 Budget\nSource: National Treasury\n-5\n-4\n-3\n-2\n-1\n0\n1\n2019/20\n2017/18\n2015/16\n2013/14\n17\nMonetary Policy Review April 2017\nNet exports and the balance \nof payments\nNet exports are expected to subtract from growth in 2017, \nfollowing a relatively strong 2016 performance. They recover \nin 2018 and 2019, contributing approximately 0.3 percentage \npoints to growth in each year. Exports are likely to benefit \nfrom stronger world growth as well as favourable commodity \nprices. However, these factors are offset in the forecast by a \nless depreciated outlook for the exchange rate, which limits \ncompetitiveness, as well as higher imports from increased \ninvestment (a category which tends to be import-intensive).\nCurrent account* (March 2017 forecast)\nPercentage of GDP\nActual\nSARB forecast\n2015\n2016\n2017\n2018\n2019\nCurrent account.............\n-4.4\n-3.3\n-3.2\n-3.9\n-4.0\n-4.3\n-4.0\n-4.2\n-4.4\nTrade and services.........\n-1.1\n0.1\n0.3\n-0.7\n-0.5\n-1.0\n-0.3\n-1.1\n-1.4\nIncome and transfers \naccount..........................\n-3.3\n-3.4\n-3.4\n-3.2\n-3.5\n-3.3\n-3.6\n-3.1\n-2.9\n*\t September 2016 MPC forecasts in italics \nSource: SARB\nThe balance on the current account was previously anticipated \nto reach its narrowest point in the cycle during 2016. However, \ncurrent account narrowing is now projected to continue \ninto 2017, with the deficit reaching -3.2% of GDP this year. \nThereafter the deficit widens somewhat to -3.9% in 2018 and \n-4.0% in 2019.\nThe improvement in the current account outlook is premised on \nmore favourable terms of trade, with the peak occurring in the \nfirst quarter of this year. Prices for base metals and coal have \nbeen very buoyant lately, but these gains are not expected to \npersist over the forecast period as longer term fundamentals \nstart to outweigh the short term momentum in prices. By \ncontrast, precious metals are expected to trend modestly higher \nas investors seek safe haven assets to hedge against policy \nuncertainty and rising global inflation. Meanwhile, oil prices are \nlikely to be roughly stable at current levels. As a result, South \nAfrica’s terms of trade are expected to reach their highest level \nin six years – and their second highest level on record – early in \n2017, before trending moderately lower in 2018 and 2019.\nIn comparative perspective, it is unusual for a country to be \nrunning a current account deficit of 3–4% of GDP with growth \nunder 1%. In South Africa, this is not simply a problem of \nimports staying too high and exports too low. Rather, the \ntrade balance of the current account has adjusted significantly, \nfrom around -2% of GDP in 2013 to 0.1% in 2016. Instead, \nthe persistent deficit on the current account is a consequence \nUS$ per ounce\n2005\n2007\n2009\n2011\n2013\n2015\n2017\n2019\nPrecious metals prices\n \nPlatinum\nSources: Bloomberg and SARB\n \nGold\n400\n600\n800\n1 000\n1 200\n1 400\n1 600\n1 800\n2 000\n2 200\nForecast\nUS$ per metric tonne\n2005\n2007\n2009\n2011\n2013\n2015\n2017\n2019\nIndustrial commodity prices\n \nCoal\nSources: Bloomberg and SARB\n \nIron ore\n20\n40\n60\n80\n100\n120\n140\n160\n180\n200\nForecast\nPercentage points\nPercentage of GDP\n2000\n2004\n2002\n2006\n2008\n2010\n2012\n2014\nForeign debt of South Africa\n \nRand denominated debt\n \nTotal foreign debt (left-hand scale)\nSource: SARB\n \nForeign-currency denominated debt \n0\n5\n10\n15\n20\n25\n30\n35\n40\n45\n50\n0\n5\n10\n15\n20\n25\n30\n35\n40\n45\n50\nMonetary Policy Review April 2017\n18\nof the service, income and current transfers account, which \ntypically registers deficits in excess of 3% of GDP. (The average \nsince 2011 is -3.7% of GDP, with a standard deviation of \n0.4 percentage points.) Although the services component of this \naccount has come into balance – roughly in line with the trade \naccount – current transfers have remained between -0.5% and \n-1.0% of GDP, mostly due to Southern African Customs Union \n(SACU) transfers. Furthermore, net interest payments under \nthe income account have been rising, reflecting the growth in \nSouth Africa’s total foreign debt to around 40% of GDP, and \nnow stand at around 1.4% of GDP. The forecast anticipates \nthat the income and transfer payments deficit will persist \nacross the medium term at a little more than 3% of GDP. As \nusual, the scale of the current account deficit therefore chiefly \nreflects this component, even as swings in the trade account \nexplain most of the variations in the overall current account.\nPotential growth and the output gap\nSince the previous MPR, published in October 2016, potential \ngrowth and the output gap appear to have been broadly \nstable. There have been minor downward revisions of short \nterm potential, to a low of 1.3% for 2016, but the estimate for \n2018 remains 1.5%. The output gap continues to be negative, \nwith most of the accumulated shortfall between potential and \nactual output coming from late 2015 and 2016. The gap is \nexpected to widen slightly in 2017, given growth of 1.2% versus \npotential of 1.4%. It then begins to narrow gradually over the \nfollowing two years, and is almost closed by the end of 2019.\nOutput gaps are unobservable. This makes them difficult \nto quantify, and their interpretation is a perennial source of \ncontroversy. At present, there is little or no evidence that the \neconomy is overheating. Manufacturing capacity utilisation is \nclose to historical averages. Credit growth is subdued, with \nlending to households declining in real terms. Furthermore, \nit is unlikely that potential growth will be revised much lower, \nbelow even the growth rate of the population. Nonetheless, \nthe output gap may be overstated. To the extent that it reflects \nprimary sector weakness – recall that the current output gap \nis almost entirely a legacy of the past year and a half, in which \nthe primary sector underperformed – it may be a poor guide \nfor monetary policy. (Because output in the primary sector is \nstrongly affected by sector specific factors, such as rainfall, \nsome central banks exclude it from their output gap estimates.9) \nFurthermore, the output gap has been consistently wrong in \nreal time, with estimates changing after the fact by as much \nas 4% of potential GDP. In recognition of this problem, the \nSARB’s output gap estimates are reported with error bands \nto convey uncertainty. Research to refine these estimates is \nalso ongoing.\n9\t\nSee for instance Central Bank of Chile, 2015. ‘Potential GDP, the output \ngap and inflation’, Monetary Policy Report p. 35.\nPercentage of GDP\nPercentage points\n2000\n2002\n2004\n2006 2008\n2010\n2012\n2014\n2016\nServices, income and transfer account components\n \nTransfers\n \nOther income\n \nDividends\nSource: SARB\n \nServices\n \nInterest\n \nSIT account (left-hand scale)\n-7\n-6\n-5\n-4\n-3\n-2\n-1\n0\n1\n7\n6\n5\n4\n3\n2\n1\n0\n1\nPercentage of production capacity\n1994\n98 2000\n96\n02\n04\n06\n08 2010 12\n14\n16\nManufacturing production capacity utilisation\n \nDownward phase of the business\nSources: SARB and Stats SA\n \nUtilisation of production capacity of total goods\n \nLong-term average (1971-2016)\n76\n78\n80\n82\n84\n86\n88\nPercentage change\n2003\n2005\n2007\n2009 2011\n2013\n2015\n2017\n2019\nReal GDP, potential GDP and population growth\n \nPopulation\n \nPotential GDP\nSources: SARB and Stats SA\nForecast\n-2\n-1\n0\n1\n2\n3\n4\n5\n6\n \nReal GDP\n19\nMonetary Policy Review April 2017\nConclusion\nOver the forecast period, which stretches to 2019, growth \nis expected to improve slightly from 2016 lows. The largest \nportion of this growth comes from household consumption, \nwith investment and net exports making positive contributions \nin 2018 and 2019. Government consumption is projected to \ngrow marginally in all three forecast years, fiscal consolidation \nnotwithstanding. The economy’s fundamentals are becoming \nless unstable, which helps explain why growth is accelerating \nagain. Growth is nonetheless weak by almost any standard.\nHeadline CPI inflation (per cent)\nThe output gap and inflation\n \nSources: SARB and Stats SA \n-3\n-2\n-1\n0\n1\n2\n3\n4\n5 3\n4\n5\n6\n7\n8\n9\n10\n11\n12\n13\nOutput gap (percentage of potential GDP)\nTrendline\nPass-through to inflation\nThe output gap and pass-through to inflation\n \nNon-linear\nSource: SARB\n \nLinear\n-4\n-2\n0\n2\n4\n6\n-1.0\n-0.5\n0.0\n0.5\n1.0\n1.5\n2.0\nBox 1\t An asymmetric Phillips Curve?\n1\t\nFedderke, J and Liu, Y. 2016. ‘Inflation in South Africa: an assessment of \nalternative inflation models’. SARB Working Paper 16(5).\n2\t\nKabundi, A, Schaling, E and Some, M. 2016. ‘Estimating a time-varying \nPhillips Curve for South Africa’. SARB Working Paper 16(5).\nThe Phillips Curve describes the relationship between inflation and \nsome measure of economic slack (originally unemployment, but often \nthe output gap). It is both one of the most foundational and most \ncontentious concepts in modern economics. In its Keynesian heyday, \nit was interpreted as a trade-off. Policymakers were advised to \nchoose their preferred mix of the two variables, with more inflation \nproviding less unemployment and vice versa. The stagflationary \nexperiences of the 1970s, however, showed that rising inflation and \nrising unemployment could go together. Meanwhile, the theoretical \nunderpinnings of the Phillips Curve were weakened by new arguments \nthat the trade-off should be temporary and unstable. Over time, price \nand wage setters would incorporate expectations of rising inflation in \ntheir demands. Prices would then rise with no change in output.\nThe literature on the South African Phillips Curve is simultaneously \nextensive and inconclusive. Fedderke and Liu (2016) point out that for \nall the interest in the subject, the relationship is hard to identify \nempirically.1 There are also better predictors of inflation than the \noutput gap, especially wages. However, the relationship must exist in \nsome form if interest rate changes are to raise or lower demand and \ntherefore affect inflation. The problem is describing the relationship \naccurately. Kabundi, Schaling and Some (2016) have provided one \nimportant contribution by showing that the Phillips Curve in South \nAfrica is time-varying.2 The relationship was quite weak in the 1990s, \nstronger in the 2000s, and weaker again after the global financial \ncrisis. More recent work provides a complementary insight: \nthe Phillips Curve in South Africa may be non-linear, with a much \nstronger relationship when the economy is overheating than when it is \nunderperforming.\nThis asymmetric Philips Curve emerges from inflation data which have \nbeen econometrically corrected for supply shocks (which would affect \nprices independent of demand). Inflation responds strongly when the \noutput gap is positive, but less so when demand is weak and the \noutput gap is negative.\nMonetary Policy Review April 2017\n20\nPercentage points\nPer cent\n2000 2002 2004 2006 2008 2010 2012 2014 2016 2018\nDirect impact of output gap on inflation based on\nPhillips Curve specification\n \nNon-linear\nSources: SARB and Stats SA\n \nLinear\n \nHeadline CPI inflation\n-1.0\n-0.5\n0.0\n0.5\n1.0\n1.5\n2.0\n0\n2\n4\n6\n8\n10\n12\n14\nBy ignoring this distinction, forecasts will tend to under-predict \ninflation when the economy is operating above potential. Where \ndemand is already weak, forecasts will also underestimate the \npolicy adjustments required to reduce inflation. This last point \npresents a difficult policy problem, because it implies a worse \ndisinflation/output trade-off. In such circumstances, policymakers \nmay prefer to rely more heavily on other transmission mechanisms, \nespecially communication, to achieve their inflation targets. \nThis does, however, require that policymakers have credibility, \nmeaning they should be seen as willing and able to meet their \ntargets over time.\n21\nMonetary Policy Review April 2017\nInflation developments \nand outlook\nHeadline inflation is currently outside the 3-6% target range, \nbut is expected to moderate to 5.4% in 2018 and 5.5% in 2019. \nFood and oil price shocks provided the nudge to inflation \nwhich pushed it over 6%. Underlying inflation, however, has \nbeen elevated, meaning even relatively small shocks would \nhave been sufficient to push inflation above the target range. \nCore inflation is expected to decline from its peak in December \n2016, benefitting from the more appreciated level of the \nexchange rate. Services inflation nonetheless remains sticky \naround 6%, in line with inflation expectations, which prevents \ncore from falling more markedly and keeps headline inflation in \nthe upper portion of the target range.\nFood prices\nFood and non-alcoholic beverages (NAB) inflation averaged \n10.6% in 2016, versus a post-crisis average of 6.8%, contributing \n1.6 percentage points to headline inflation. The peak came in \nthe final quarter of 2016, with prices rising 11.7% (slightly below \nthe 12.3% forecast published in the October 2016 MPR). Food \nand NAB inflation is expected to average 7.4% this year, adding \n1.3 percentage points to headline inflation (although this would \nhave been 1.1 percentage points with the previous consumer \nprice index weights), followed by 5.2% in 2018 and 5.5% \nin 2019.\nWeather conditions have improved across much of the \ncountry. February was an exceptional rainfall month, with \nSouth African dams regaining two years of losses in just a few \nweeks. Early indications from government’s Crop Estimates \nCommittee suggests that the maize harvest will be 14.3 million \ntons in 2017, back near the record levels achieved in 2014 \nand about double the 2016 harvest. The significant gap that \nopened up between white and yellow maize prices from early \n2015 has disappeared. Maize spot and futures prices have \nboth declined, with futures prices below current spot prices \nand only rising again from later in the year. Wheat production \nis also responding positively, rising to a five-year high. Lower \ngrain prices will benefit the bread and cereals component of \nfood and NAB inflation. Combined with the high base created \nin 2016, inflation in this category will likely moderate to 1.1% \nby the final quarter of 2017, before picking up to 4.8% in 2018.\nWhile the large contributors to 2016 food inflation (fruit and \nvegetables, and bread and cereals) moderate throughout 2017, \nthese disinflationary effects will be partially offset by a continued \nrise in meat price inflation. Forecasts for this category have \nshifted higher and later. The peak is now expected at 11.4%, \nversus 9.1% in the October MPR, and is likely to be reached in \nthe third quarter rather than at the start of 2017.\nPercentage change over 12 months (both scales)\n2015\n2016\n2017\n2018\nSelected agricultural and producer prices\n-10\n0\n10\n20\n30\n-70\n0\n70\n140\n210\n \nWhite maize\n \nYellow maize\n \nWheat\n \nAgricultural producer prices (left-hand scale)\nSources: SAFEX, SARB and Stats SA\n \nWhite maize futures\n \nYellow maize futures\n \nWheat futures\n \nForecast\nPercentage points\nPercentage change over 12 months\n2010\n2012\n2014\n2016\n2018\nMeat inflation and its drivers\n \nDried, salted or smoked\n \nBeef\n \nMeat (left-hand scale)\nSources: SARB and Stats SA \n \nPork\n \nLamb\n \nPoultry\n-5\n0\n5\n10\n15\n20\n-5\n0\n5\n10\n15\n20\nMonetary Policy Review April 2017\n22\nConsumer food price inflation\nPercentage change over 12 months, previous weights and September 2016 forecast in italics\nActual\nForecast\nActual\nSARB forecast\nWeight\n2003-16\n2016\n2017\n2018\n2016Q3\n2016Q4\n2017Q1\n2017Q2\n2017Q3\n2017Q4\n2018Q1\n2018Q2\n2018Q3\n2018Q4\nFood and non-alcoholic \nbeverages................................. 17.24\n6.9\n10.6\n7.4\n5.2\n11.3\n11.7\n9.7\n7.0\n6.9\n6.0\n5.1\n5.2\n5.3\n5.3\n15.41\n10.8\n6.0\n11.8\n12.3\n8.2\n6.4\n5.5\n4.0\n Bread and cereals................\n3.21\n7.5\n14.6\n5.5\n4.8\n15.9\n16.9\n12.6\n5.8\n2.6\n1.1\n1.9\n4.7\n6.2\n6.3\n3.56\n14.6\n8.5\n15.9\n16.7\n12.7\n8.8\n7.3\n5.7\n Meat.....................................\n5.46\n6.7\n5.8\n10.1\n4.7\n5.6\n6.4\n9.2\n9.8\n11.4\n10.0\n5.0\n4.2\n4.6\n5.1\n4.56\n6.4\n8.5\n6.1\n8.1\n9.2\n9.1\n8.3\n7.6\n Beef.................................\n1.44\n7.6\n8.3\n9.4\n4.9\n8.4\n7.1\n7.6\n7.7\n11.1\n11.3\n6.4\n4.6\n4.1\n4.6\n Poultry..............................\n2.12\n5.9\n3.1\n12.7\n4.5\n1.9\n5.0\n12.1\n12.7\n14.5\n11.4\n4.0\n4.0\n4.7\n5.4\n Vegetables............................\n1.30\n7.1\n16.5\n2.3\n6.9\n15.0\n11.9\n1.1\n-1.1\n4.1\n5.2\n6.8\n7.0\n7.9\n6.0\n1.61\n16.3\n2.7\n15.1\n11.1\n1.5\n-0.4\n5.9\n3.9\nSources: SARB and Stats SA\nHerd rebuilding has been singled out as a key driver of rising \nmeat prices, and beef inflation is indeed likely to sustain \nmeat price inflation over the forecast period. In the near term, \nhowever, poultry sector dynamics have also become important. \nPoultry inflation was unusually low for most of 2016, chiefly \ndue to competition from imports. Yet it began to accelerate \nlate in the year, reaching 12.4% in February 2017, from 1.7% in \nSeptember 2016. There are two factors underlying this shift. The \nfirst is an outbreak of avian influenza in Europe, which has cut \noff supply from seven of the 10 countries which export poultry \nproducts to South Africa. The second and more significant is \nchanges to brining regulations imposed by the Department of \nAgriculture, Forestry and Fisheries in October 2016. The new \nrules reduce the amount of salt water that may be injected into \nfrozen chicken. Although this could be interpreted as a quality \nimprovement rather than a price increase, it is nonetheless \nmeasured as inflation in the CPI.10\nWorld food prices, denominated in US dollars, have begun to \nrise again following an extended period of deflation. The change \nin trend is broad-based, with positive price changes in all five \nof the broad food categories. In part, this reversal is explained \nby higher oil prices which have raised producer input costs. \nSector-specific conditions are also contributing; for instance, the \nworld’s largest exporter of sugar, Brazil, has experienced poor \ncrops. Although world food price projections have been marked \nup in the latest forecast, price pressures are expected to remain \nquite weak given substantial inventories of staple commodities, \nincluding many grains, as well as relatively low input costs.\n10\t Under the new regulations, a given portion of chicken will contain less \nsaltwater but may also cost more per gram. The change in the price of the \nportion is treated as inflation, although strictly speaking the consumer is \ngetting more chicken.\nUS$ per barrel\n2015\n2016\n2017\n2018\n2019\nEvolution of Brent crude oil price forecasts\n \nActual\n \nMarch 2016\n \nMarch 2017\nSources: Bloomberg and SARB\n \nMay 2015\n \nSeptember 2016\n30\n35\n40\n45\n50\n55\n60\n65\n70\n75\n23\nMonetary Policy Review April 2017\nBox 2\t Reweighting and rebasing the consumer price \nindex – implications for the forecast\n1\t\nThe intuition here is that when an item with an index value of 200 \nincreases by 5%, that lifts the index 10 points to 210. The same \n5% increase for an item with an index value of 100 adds just 5 points. \nAssuming both items have an equal weight in the CPI, the first item \nwill have twice the impact on headline, compared to the second, in \ncalculating the final inflation outcome. Yet both inflated by the same \n5%. Periodic rebasing keeps such distortions small.\nStatistics South Africa (Stats SA) has recently completed a routine \nreweighting and rebasing of the consumer price index (CPI). This box \ndescribes how these adjustments are likely to affect headline inflation. \nTo quantify the direction and magnitude of the changes, the revised \nweights and bases were applied to an earlier forecast. The results \nsuggest that there is a small net downward shift in overall CPI of \nroughly 0.1 percentage points for both 2017 and 2018. The 2017 \nchanges are mostly explained by reweighting (particularly the lower \nweights of electricity and petrol). By contrast, the 2018 effects are \nalmost entirely due to rebasing.\nReweighting means aligning the CPI basket with the latest consumer \nexpenditure patterns (in this case, based on data from the 2014/15 \nLiving Conditions Survey). This entails adjusting the shares of existing \nitems as well as updating product coverage. For instance, in this latest \nupdate, stamps and DVDs were removed from the index, while instant \nnoodles were added.\nRebasing means adjusting all the indices in the CPI basket to a new \nbase period, in this case making December 2016 equal to 100. This \nis required because different sub-indices increase at a faster (or \nslower) pace than the overall index. As a result, some sub-indices \nmight end up contributing more to headline inflation than would be \njustified by their respective weights.1 These distortions can be \ncontrolled by periodic rebasing to a single starting point.\nAdministered price inflation is lower given changes to electricity and \nfuel. Electricity inflation continues to be relatively high, but whereas \nbetween 2008 and 2012 this increased the share of electricity in \nhousehold expenditure, consumers have now cut back. As a result, \nelectricity’s share has fallen to 3.75%, versus 4.13% in 2012 and \n1.68% in 2008. The forecast is also slightly lowered by a smaller \nweight for fuel, which has fallen from 5.68% in 2012 to 4.58% in 2016.\nFood inflation is raising the forecast, given a larger weight for food as a \nwhole (from 15.4% of the basket to 17.2%) as well as changing weights \nwithin the food category. Meat, which was already experiencing \nrelatively high inflation, now has a larger weight (up by 0.9 percentage \npoints, from 4.6% of the total 2012 basket to 5.5% of the 2016 basket). \nBy contrast, bread and cereals, which have been disinflating, now have \na smaller weight (falling from 3.6% to 3.2% of the total).\nThe weight of services in the basket is 1.2 percentage points higher. \nBoth housing services and recreation and culture have been revised \nup, by 0.66 and 1.07 percentage points respectively. By contrast, \nweights have been reduced for major services categories like medical \nhealth insurance (-0.38%), education (-0.42%), and restaurants and \nhotels (-0.41%). The reweighting effects on the inflation trajectory are \nslightly positive, but these are overwhelmed by rebasing effects. \nThe net result is that underlying inflation is lower by 0.13 and \n0.15 percentage points in 2017 and 2018 respectively.\nPercentage points\nPercentage change over 12 months\n2015\n2016\n2017\n2018\nFood inflation\n \nNew base\n \nFood (December 2012 = 100) (left-hand scale)\n \nFood (new weights, December 2016 = 100) (left-hand scale)\nSources: SARB and Stats SA \n \nNew weights\n-0.1\n0.0\n0.1\n0.2\n0.3\n0.4\n0.5\n0.6\n0.7\n0.8\n0.9\n0\n2\n4\n6\n8\n10\n12\nPercentage points\nPercentage change over 12 months\n2015\n2016\n2017\n2018\nHeadline consumer inflation\n \nNew base\n \nHeadline (December 2012 = 100) (left-hand scale)\n \nHeadline (new weights, December 2016 = 100) (left-hand scale)\nSources: SARB and Stats SA\n \nNew weights\n-0.2\n-0.1\n0.0\n0.1\n0.2\n3.0\n3.5\n4.0\n4.5\n5.0\n5.5\n6.0\n6.5\n7.0\nPercentage points\nPercentage change over 12 months\n2015\n2016\n2017\n2018\nCore inflation inflation\n \nNew base\n \nUnderlying (December 2012 = 100) (left-hand scale)\n \nUnderlying (new weights, December 2016 = 100) (left-hand scale)\nSources: SARB and Stats SA\n \nNew weights\n-0.3\n-0.2\n-0.1\n0.0\n0.1\n0.2\n0.3\n0.4\n4.0\n4.5\n5.0\n5.5\n6.0\nMonetary Policy Review April 2017\n24\nFuel prices\nBrent crude oil climbed to US$57 per barrel in January, \nescaping the US$30 to US$50 range in which it had \ntraded since August 2015. This shift was triggered by the \nannouncement of production cuts by the Organization of the \nPetroleum Exporting Countries (OPEC) as well as some non-\nOPEC countries, including Russia. The decision to reduce \noutput marked a change of strategy by traditional producers, \nwhich had previously sought to defend market share by \nmaintaining supply and using low prices to squeeze out \nmarginal producers. Yet new rivals, chiefly shale producers \nin North America, proved unexpectedly resilient, prompting \nOPEC countries to re-assess.\nAlthough production cuts were effective in pushing prices \nclose to US$60 per barrel, they have since subsided to nearer \nUS$50. There is a plausible case they will stay quite low. OPEC \nproduction cuts have typically not been implemented in full \nover time, as there are strong incentives to free-ride on others’ \nefforts and enforcement mechanisms are relatively weak. \nFurthermore, North American producers have increased \nproduction in response to higher prices, limiting the overall \nreduction in supply. The oil price assumption used in the \nforecast is US$60 for 2017 and US$62 for 2018, but the lower \nlevel of prevailing prices suggests a risk this may be too high.\nThe change in local petrol prices has been greater than the gains \nin world oil prices, owing to increases in the various domestic \ncost factors that make up slightly more than half of the final \npetrol price, as well as international refinery margins and other \ncosts such as freight and insurance. The total fuel price change \nin the forecast is 127 cents per litre between September 2016 \nand April 2017. Of this, just 27 cents reflects the international \noil price portion of the local price. The balance is split roughly \n60:40 between domestic taxes and margins (mainly for higher \nfuel and road accident fund levies) and international refinery \nmargins and other costs. Over the forecast period, fuel price \ninflation is projected at 7.8%, 6.9% and 6.0% in 2017, 2018 and \n2019 respectively.\nElectricity prices\nAlthough the multi-year pricing agreements are intended to \nmake electricity prices more predictable, they remain complex \nand difficult to forecast. The National Energy Regulator of \nSouth Africa has approved Eskom tariff increases of 2.2% \nfor the financial year 2017/18. This number is unusually low \ngiven the Regulatory Clearing Account (RCA) adjustment, \nwhich compensates for excess payments to Eskom in \n2016/17; without this RCA adjustment, tariff increases would \nbe 8%. The regulator has given Eskom permission to apply \nfor a higher increase should the approved 2.2% threaten its \nfinancial sustainability, and it is possible that a higher figure will \nbe granted, especially given that the Year 2 and Year 3 RCA \napplications by Eskom have not yet been processed. Given \nthe uncertainties around Eskom’s tariff increase, the SARB still \nMillion barrels per day\n2012\n2013\n2015\n2014\n2016\n2017\n2018\nUS and world oil production changes from 2012 to 2018* \n \nWorld \n* Includes crude oil, shale oil, oil sands and natural gas liquids, but \nexcludes biofuels and ethanol\nSources: BP, Energy Information Administration and SARB\n \nUnited States\n-0.5\n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\nForecast\nRand per litre\n1998 2000 2002 2004 2006 2008 2010 2012 2014 2016\nFuel price inflation \n \nPetrol price\nSources: Department of Energy\n \nDiesel price\n0\n2\n4\n6\n8\n10\n12\n14\n16\nCent per kilowatt-hour\nGigawatt hours\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\nElectricity consumption and prices\n \nElectricity consumption (left-hand scale)\n \nElectricity price\nSources: Eskom and Stats SA\n98\n100\n102\n104\n106\n108\n110\n112\n0\n50\n100\n150\n200\n250\n300\n25\nMonetary Policy Review April 2017\nassumes CPI electricity inflation of 7.7% for 2017 and 8% for \nboth 2018 and 2019. Even if the 2.2% increase goes ahead, \nhowever, final prices faced by consumers are likely to rise by \na larger magnitude – perhaps closer to 5% – due to municipal \npricing decisions.\nCore inflation\nCore inflation is anticipated to trend downwards from its \nDecember 2016 high of 5.9%, averaging 5.4% in 2017, 5.2% \nin 2018 and 5.3% in 2019. This slight moderation in core is \ndue to lower inflation in the core goods component, which is \nprojected to benefit from rand appreciation. Vehicle inflation, \nfor instance, is expected to fall from 7.6% in 2016 to just 3.8% in \n2018, with its overall contribution to headline inflation forecast \nto drop from 0.5 percentage points in 2016 to 0.2 percentage \npoints in 2018. Core nonetheless remains relatively elevated \ndue to sticky services inflation, which is unlikely to depart from \nthe upper end of the inflation target range.\nThe outlook for core inflation is broadly unchanged from \nthe October 2016 MPR, recording an improvement of just \n0.1 percentage points for each of the first two forecast years. \nThe stability of the core forecast, despite continued exchange \nrate appreciation, is explained by offsetting increases in other \nfactors, particularly medical insurance and rentals and owners’ \nequivalent rent.\nTargeted inflation (March 2017 forecast)\nPercentage change over 12 months, previous weights and September 2016 forecasts in italics \nActual\n Forecast\nActual\nSARB forecast\nWeight\n2003-16\n2016\n2017\n2018\n2016Q3\n2016Q4\n2017Q1\n2017Q2\n2017Q3\n2017Q4\n2018Q1\n2018Q2\n2018Q3\n2018Q4\nTargeted inflation....................... 100.00\n5.9\n6.3\n5.9\n5.4\n6.1\n6.6\n6.4\n5.8\n5.8\n5.6\n5.2\n5.4\n5.5\n5.5\nCore inflation*............................ 74.43\n5.0\n5.6\n5.4\n5.2\n5.7\n5.7\n5.4\n5.5\n5.4\n5.3\n5.1\n5.1\n5.2\n5.3\n74.78\n5.7\n5.6\n5.7\n5.9\n5.8\n5.7\n5.5\n5.4\n Insurance................................. 10.06\n7.0\n7.6\n8.4\n8.4\n7.4\n7.7\n8.1\n8.4\n8.5\n8.5\n8.7\n8.3\n8.3\n8.3\n9.92\n7.5\n8.5\n7.3\n7.5\n8.1\n8.6\n8.7\n8.7\nEducation..................................\n2.53\n8.4\n5.3\n7.2\n8.0\n4.6\n4.6\n5.7\n7.7\n7.7\n7.7\n7.8\n8.0\n8.0\n8.0\n2.95\n5.4\n7.2\n4.6\n4.7\n5.7\n7.7\n7.7\n7.7\nVehicles.....................................\n6.12\n1.7\n7.6\n5.2\n3.8\n9.1\n8.8\n7.7\n5.8\n3.8\n3.4\n3.5\n3.7\n3.9\n4.1\n5.98\n7.6\n5.3\n9.0\n8.8\n7.5\n5.6\n4.2\n3.9\nFuel...........................................\n4.58\n8.6\n1.6\n7.8\n6.9\n-4.7\n3.1\n10.4\n4.6\n8.3\n8.0\n4.6\n8.0\n7.6\n7.6\nPreviously petrol........................\n5.68\n1.0\n7.0\n-4.6\n0.8\n6.2\n4.0\n7.9\n10.2\nElectricity..................................\n3.75\n11.8\n9.2\n7.7\n8.0\n7.4\n7.4\n7.4\n7.4\n8.0\n8.0\n8.0\n8.0\n8.0\n8.0\n4.13\n9.2\n7.7\n7.4\n7.4\n7.4\n7.4\n7.9\n8.0\n* CPI excluding food, non-alcoholic beverages, fuel and electricity\nSources: SARB and Stats SA\nForecast\nPercentage change over 12 months\n2009\n2011\n2013\n2015\n2017\nCore inflation and its components\n \nServices\nSources: SARB and Stats SA \n \nTotal core\n \nCore goods\n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\nMonetary Policy Review April 2017\n26\nAlthough service price inflation has been stable close to 6%, in \nline with inflation expectations and the upper end of the target \nrange, key service sub-categories have experienced inflation \nwell above this level for an extended period of time. In particular, \ninflation in the insurance and education categories has \naveraged 7% and 8.4% respectively between 2003 and 2016, \ncompared to average headline inflation of 5.9%. Education \ninflation was briefly lower in 2016 following the decision to \ntemporarily freeze tertiary tuition fees, but renewed increases \nwill shift it back towards 8% by March 2017 and it is likely to \nstay close to these levels over the rest of the forecast period. \nInsurance inflation is expected to remain similarly elevated.\nEmployment, remuneration \nand unit labour costs\nWages and salaries are a continued source of inflationary \npressure in South Africa. Increases in remuneration tend to \nbe generous, at least for the upper deciles of income earners \nwhose compensation accounts for the major portion of the total \nSouth African wage bill. This is due to the structure of labour \nmarket institutions as well as skills shortages, both of which \nbolster the negotiating power of this segment of the workforce. \nTo some extent, the resulting price pressure is contained by \noff-setting factors: productivity growth, labour shedding and \nprofit compression. Yet some portion also feeds into inflation.\nIn the context of weakening growth and rising unemployment, \nreal wage growth might have been expected to stagnate. \nNonetheless, the available data show continued real gains \nfrom 2011 onwards. The Andrew Levy wage settlement rate \nand the mean growth rate of wages and salaries in South \nAfrica, derived from the Quarterly Employment Survey, have \nboth remained elevated, averaging close to 8% over this \nperiod. After deducting average labour productivity growth of \n1.2%, unit labour cost (ULC) growth has been 6.8%, above the \nupper bound of the inflation target.\nULC growth likely reached its post-crisis peak in 2016 at 7.5%, \nmainly due to the productivity loss implicit in very weak output \ngrowth. Over the forecast period, ULC growth is projected to \nmoderate to 5.7% by 2018, its lowest level in over a decade, \nwith average salaries growing at 8.1% and productivity growth \nat 2.1%. The deceleration in ULCs is premised on improved \nGDP outcomes and – much less desirably – job losses. \nWithout these developments, ULC growth could surprise on \nthe upside, lifting core inflation.11\nExchange rates\nIn a small open economy like South Africa, import prices are \nanother key driver of inflation. One aspect of these prices is \ninternational wholesale prices; the other crucial determinant is \nthe exchange rate. Over the past year, the rand has benefitted \nthe inflation forecast. It has recovered from a weak position in \nin January 2016, and by March 2017 was back at mid-2013 \n11\t This discussion refers to the ULC measure used in the forecast, which \ndiffers from that published in the Quarterly Bulletin. The forecast uses \neconomy-wide remuneration, whereas the Quarterly Bulletin measure \ncovers only the formal, non-agricultural sector.\nPercentage change over 12 months\n2009\n2011\n2013\n2015\n2017\nVehicle prices at producer and consumer level\n \nVehicle PPI inflation\nSources: SARB and Stats SA\n-5\n0\n5\n10\n15\n20\n \nVehicle CPI inflation\nForecast\nAnnual percentage change\nPercentage points\nUnit labour cost and its components\n \nProductivity (left-hand scale)\n \nAverage salaries (left-hand scale)\n \nAndrew Levy average salaries\nSources: Andrew Levy Employment Publications and SARB\n \nUnit labour cost\n \nReal wages\nForecast\n-5\n0\n5\n10\n15\n-5\n0\n5\n10\n15\n2019\n2017\n2015\n2013\n2011\n2009\n2007\n27\nMonetary Policy Review April 2017\nlevels against the euro and sterling, and at mid-2015 levels \nagainst the US dollar. This rand recovery reflected several \ncomplementary factors, including improved macroeconomic \nfundamentals in South Africa, diminished political uncertainty \nand reduced global risk aversion. The appreciation trend \nhas at times been interrupted by shocks, including the Brexit \nreferendum and the US elections. In each of these episodes, \nhowever, the rand has subsequently rebounded, returning to \nits appreciation trend.\nThe outlook for the exchange rate remains uncertain. The rand \ncould appreciate further, supported perhaps by commodity \nprices and better domestic growth and confidence. Yet it \nmight well weaken again, given several domestic or foreign \nfactors. On balance, the risk to the exchange rate is that it will \ndepreciate in the near term in response to increased political \nuncertainty, potentially accelerating inflation.\nThe exchange rate assumption used in the forecast is \npredicated on a simple convention: the real exchange rate is \nheld constant at around the starting point shortly preceding \nthe MPC meeting – allowing sufficient time for the modelling \nteam to prepare the forecast – with the nominal exchange rate \nthen adjusting across the forecast horizon in line with inflation \ndifferentials. This practice has in recent meetings tended to \nmake the exchange rate used in the forecast somewhat weaker \nthan the one prevailing at the time of the policy decision. It \nhas also left the exchange rate in each subsequent meeting \nsomewhat more favourable than the one used before. The \nfact that this has not produced larger variations between the \ndifferent forecasts points to offsetting factors, but also the \nfact that pass-through to inflation remains quite low. Applying \nan exchange rate shock to the latest version of the core \neconometric model yields a response of only about 0.15 in the \npeak quarter. Furthermore, historically, pass-through has been \nweaker in appreciation phases than during depreciations.12\nInflation expectations\nIn a flexible inflation targeting framework, inflation is permitted \nto depart temporarily from target in the event of shocks. \nInflation expectations help policymakers judge whether such \nshocks will in fact prove temporary. If inflation expectations are \nwell anchored in the right place, shocks should pass out of \nthe year-on-year comparisons after 12 months and inflation \nwill revert to target. However, if medium term expectations \nchange in line with current inflation, or if they are anchored \nat an inappropriate level, then wages and prices are likley to \nrespond and inflation will not return to its desired rate without \nsome form of monetary policy response.\nThere are several available measures of inflation expectations \nin South Africa. One of the most frequently consulted is the \nBureau for Economic Research’s (BER) survey, which collects \nthe views of union leaders, business people and financial \n12\t Karoro, T D, Aziakpono, M J and Cattaneo, N. 2009. ‘Exchange rate \npass-through to import prices in South Africa: Is there asymmetry?’ South \nAfrican Journal of Economics, 77(3): 380-398.\nForecast\nPercentage points\nPercentage change over four quarters\n2011 2012 2013 2014\n2016\n2015\n2017 2018 2019\nContribution to headline inflation\n \nImport price contribution\n \nOutput gap contribution\n \nUnit labour cost contribution\n \nHeadline CPI (left-hand scale)\n-2\n-1\n0\n1\n2\n3\n4\n5\n6\n7\n-2\n-1\n0\n1\n2\n3\n4\n5\n6\n7\nSources: SARB and Stats SA\nIndices: 2010 = 100\n2015\n2016\n2017\n2018\n2019\nEvolution of the real effective exchange rate assumptions\n \nJuly 2016\n \nNovember 2016\n \nMarch 2017\nSource: SARB\n \nSeptember 2016\n \nJanuary 2017\n \nActual\nStronger rand = higher\n70\n75\n80\n85\n90\nPer cent\n2011\n2012\n2013\n2014\n2015\n2016 2017\nSurvey-based inflation expectations*\n \nCurrent year\n \nTwo years ahead\n \nInflation target range\n* Total, combining expectations of labour, business and analysts\nSource: BER\n \nOne year ahead\n \nFive years ahead\n3.0\n3.5\n4.0\n4.5\n5.0\n5.5\n6.0\n6.5\nMonetary Policy Review April 2017\n28\nanalysts. According to this survey, aggregate expectations for \none, two and five years ahead are clustered around the top of \nthe target range, varying between 5.7% and 6.2%. The analyst \ncomponent of the survey shows expectations somewhat lower \nin the medium term, at 5.4% and 5.5% in 2018 and 2019, which \nis in line with the SARB forecast. (These expectations are also \nechoed in the Reuter’s survey of analysts, for which many of \nthe contributors are the same.) Arguably, the expectations of \nbusiness people in the BER survey are the best available guide \nto price-setting behaviour. These expectations are higher and \nhave also been more stable than those of analysts; they are \ncurrently at 6.4% and 6.3% for 2018 and 2019.\nBreak-even inflation rates, a market based measure of inflation \nexpectations, have improved from levels approaching 8% in \nearly January 2016, trending back towards 6%. Break-even \nrates cannot be strictly compared to inflation surveys as \nthey also price in risks of inflation surprises (an inflation risk \npremium). Furthermore, they are also sensitive to market \nidiosyncrasies affecting the underlying instruments from which \nbreak-even rates are calculated. Nonetheless, they reflect \ninflation expectations for long time periods, five to ten years, \nover which shocks should be expected to even out. The fact \nthat break-evens remain close to or above the target therefore \nsuggests the same interpretation attached to the BER survey: \nthat expectations are sticky close to, or above, the top end of \nthe 3–6% target range.\nConclusion\nHeadline inflation is falling back below 6% following an \nextended breach of the inflation target. The forecast indicates \nit will remain within the upper portion of the target range across \nthe medium term. The decline in inflation reflects stabilising \nfood and petrol prices as well as currency appreciation. \nYet the persistence of inflation above global and emerging \nmarket averages speaks to wage and price rigidities, which \nare fed by elevated inflation expectations. While the stability \nof expectations has been reassuring in the context of above-\ntarget inflation, it would be preferable for expectations to be \nanchored more centrally within the inflation target range.\nPer cent\n2011\n2012\n2013\n2014\n2015\n2016 2017\nSurvey-based inflation expectations of business\n \nCurrent year\n \nTwo years ahead\n \nInflation target range\nSource: BER\n \nOne year ahead\n \nFive years ahead\n3.0\n3.5\n4.0\n4.5\n5.0\n5.5\n6.0\n6.5\n7.0\nPer cent\n2014\n2015\n2016\n2017\nBreak-even inflation rates\n \nFive year\nSource: Bloomberg\n \nTen year\n4.5\n5.0\n5.5\n6.0\n6.5\n7.0\n7.5\n8.0\n29\nMonetary Policy Review April 2017\nBox 3\t Comparing the accuracy of CPI forecasts\n1\t\nCurrently between 12 and 14 institutions and economists participate on a regular basis in supplying Reuters with quarterly economic \nforecasts of consumer price inflation. Reuters forecast contributors change over time in terms of who participates and how often they do \nso. It is important therefore to discard those forecasters that do not have a significant track record (taken as less than 30 forecasts over the \nperiods chosen) or contribute sporadically.\n2\t\nThe average forecast error (AFE) and the root mean square error (RMSE) are used to evaluate the forecasts. The AFE measures projection \nbias in terms of systematic over- or underestimation. The RMSE is a measure of the standard deviation or magnitude of the errors.\n3\t\nThe average value of the RMSEs has decreased by a significant factor – from 3.2% points during the first period to 0.7% points during \nthe second period.\nEconomic forecasts are critical inputs into the monetary policymaking process. To test the quality of forecasts and to build credibility, the \nbest practice among central banks is to conduct routine accuracy assessments and publish the results. Accordingly, previous Monetary \nPolicy Reviews have contained boxes on the growth and headline inflation forecasts (e.g. in April 2016) the core forecast (October 2016) \nas well as the fan charts (June 2015).\nThe usual standard for evaluating the forecasts is to compare them with observed outcomes. An alternative would be to contrast performance \nwith that of other institutions. This is helpful as a yardstick for success: even forecasts which proved close to outcomes and were not biased \nin a particular direction would need improving if rival forecasts performed better. Furthermore, a large forecasting error is less embarrassing if \nit is shared by other forecasters. For instance, it was wrong but not unreasonable for 2013 forecasts to miss the collapse in the world oil price \nand therefore overstate headline inflation.\nIn this box, the South African Reserve Bank (SARB) forecasts are compared with those provided by other organisations to Reuters.1 These \nforecasts are divided into two periods, one up to and including the crisis (2003Q3 to 2009Q4) and the other post-crisis (2010Q1 to \n2016Q4). The accuracy tests consider both the size and bias of projection errors.2 \nThe error statistics reveal that the SARB is most accurate over all forecast horizons for the pre-crisis period, but all forecasters are less \naccurate in this period compared to the next because of the large shock to inflation during 2007 and 2008. In period 2, although all the \nforecasts improve, the SARB’s ranking worsens somewhat.3 In particular, the SARB’s forecast six quarters ahead slips to 10th place out \nof 14, whereas in all other cases the SARB forecast ranks either first or second. The size of the error remains quite small, however.\nRMSE 1 quarter ahead\nSize of forecast errors\n* Size of worst RMSE 6 quarters ahead in Period 1 = 5.7\nSources: Reuters and SARB\n0\n1\n2\n3\n4\nSARB core model\n1\n2\n3\n4\n5\nReuters mean\n6\n7\n8\n9\n10\n11\n12\n13\n14\nRMSE 4 quarters ahead\nPeriod 1\nSARB core model\n4\n1\n6\nReuters mean\n2\n9\n13\n8\n10\n7\n3\n5\n11\n14\n12\n0\n1\n2\n3\n4\nRMSE 6 quarters ahead\nSARB core model\n10\n4\nReuters mean\n7\n2\n6\n9\n1\n13\n3\n14\n8\n5\n12\n11*\n0\n1\n2\n3\n4\nRMSE 1 quarter ahead\n0\n1\n2\n3\n4\nSARB core model\n2\n7\n15\n4\nReuters mean\n9\n6\n16\n1\n17\n10\n11\n13\nRMSE 4 quarters ahead\nPeriod 2\n0\n1\n2\n3\n4\n13\nSARB core model\n17\nReuters mean\n9\n2\n7\n15\n4\n6\n16\n10\n1\n11\nRMSE 6 quarters ahead\n0\n1\n2\n3\n4\n7\n17\n9\n4\n13\nReuters mean\n10\n6\n1\nSARB core model\n11\n15\n2\n16\n*\nMonetary Policy Review April 2017\n30\nAFE 1 quarter ahead\nForecast error bias\n* Size of worst AFEs 6 quarters ahead in Period 1 = -2.1 and -4.0\nSources: Reuters and SARB\n-2\n-1\n0\n1\n2\n14\n13\n10\n12\n5\n4\n2\n11\n1\n3\n6\nSARB core model\n8\n9\nReuters mean\n7\nAFE 4 quarters ahead\nPeriod 1\n-2\n-1\n0\n1\n2\n12\n5\n14\n10\n13\n11\n8\n1\n2\n3\n9\n4\n6\nSARB core model\nReuters mean\n7\nAFE 6 quarters ahead\n-2\n-1\n0\n1\n2\n11*\n12*\n8\n5\n14\n1\n13\n3\n2\n4\n9\n10\n6\nSARB core model\nReuters mean\n7\nAFE 1 quarter ahead\n-2\n-1\n0\n1\n2\nSARB core model\n2\n16\n15\n1\n7\n6\n4\n11\n10\nReuters mean\n9\n17\n13\nAFE 4 quarters ahead\nPeriod 2\n-2\n-1\n0\n1\n2\n2\n16\n4\n15\n13\nReuters mean\n17\nSARB core model\n7\n9\n10\n6\n1\n11\nAFE 6 quarters ahead\n-2\n-1\n0\n1\n2\n2\n16\n4\nSARB core model\nReuters mean\n15\n11\n9\n17\n13\n10\n7\n6\n1\n*\n*\nAverage forecast errors then show that both the SARB core model and the Reuters’ average are relatively unbiased across the two time periods \nand also for forecasts of different durations. A number of private sector forecasters recorded fairly large negative errors both four and six quarters \nahead in period 1, but this mainly indicates significant underestimation of the inflation spike during 2007 and 2008.\nOne interpretation of these findings is that economists have improved their forecasting ability. Another is that inflation has become more \nstable and therefore simpler to predict. More inflation stability, in turn, may be a better indicator of luck and the achievements of monetary \npolicy than of forecasting quality. \n31\nMonetary Policy Review April 2017\nSummary\nThe assessment of South Africa’s economic outlook depends, \nto some extent, on the perspective adopted. From an earlier \nstarting position, perhaps 2011, the combination of growth \nunder 2% for the foreseeable future and inflation either at or \nabove the top of the target range looks very disappointing. \nFrom a more recent vantage point, accelerating growth, with \ninflation falling back into the target range, marks a welcome \nimprovement. This comparison highlights the extent of \nthe economic deterioration experienced in recent years, \nculminating in 2016’s stagflation.\nReaching this low point required a variety of adverse \ndevelopments. Global growth slowed steadily from 2011 \nonwards, reaching a new post-crisis low in 2016. Furthermore, \nSouth Africa suffered from greater exposure to the parts of \nthe global economy that slowed most markedly (the euro \narea, China) than those that recovered more rapidly (the US). \nCommodity prices weakened, prompting a steady decline in \nSouth Africa’s terms of trade between 2011 and 2016. World \ncapital flows also became somewhat more discriminating as \nthe US Fed moved away from quantitative easing towards policy \nnormalisation, increasing pressure on borrower countries.\nThese problems were compounded by a series of domestic \nshocks. Labour disputes disrupted production in several key \nsectors. Electricity shortages became acute in 2014 and \n2015, and although load shedding has since been avoided, \nelectricity production remains below early 2015 levels. The \ndrought in 2016 was one of the worst in South African history. \nPolicy uncertainty also intensified, with various proxies for this \nvariable peaking late in 2015 and early 2016. In this context, \nconsumer and business confidence weakened to levels last \nseen during the global financial crisis.\nThis combination of shocks posed difficult policy challenges. \nOne was developing a realistic assessment of the economy’s \npotential. In the immediate post-crisis years, expectations were \nthat GDP growth would soon revert to levels of 3% or higher. \nThis outlook motivated large budget deficits and provided \nassurance that higher debt levels would be manageable \nwhen growth rebounded. Instead, growth failed to recover \nand estimates of potential slipped to around 1.5%, putting \ngovernment debt dynamics on a less sound trajectory.\nFor monetary policy, lower estimates of potential growth largely \nclosed output gaps, implying reduced scope for demand \nstimulus. Meanwhile, inflation dynamics were deteriorating, \ngiven repeated supply shocks on top of stubbornly high \nservices inflation. Furthermore, persistent exchange rate \ndepreciation fuelled a steady rise in underlying inflation, helping \ndrive core from the bottom to the top of the 3–6% target range. \nAs a question of policy, rand depreciation has improved the \neconomy’s competitiveness and helped to absorb shocks, \nespecially the decline in commodity prices. Yet the depreciation \ntrend was also a symptom of deeper problems, including an \nPercentage of GDP\nForecast\nMain budget balance\nSource: National Treasury\n-5\n-4\n-3\n-2\n-1\n0\n2017/18\n2016/17\n2015/16\n2014/15\n2013/14\nPercentage of GDP\nForecast\nCurrent account balance\nSource: SARB\n-5.9\n-6\n-5\n-4\n-3\n-2\n-1\n0\n2017\n2016\n2015\n2014\n2013\nMonetary Policy Review April 2017\n32\nunsustainably large current account deficit. In this context, the \ninflation forecasts began pointing to sustained target breaches. \nFurthermore, with inflation expectations already precariously \npositioned close to or above 6%, the risks to the medium term \ninflation forecast were becoming excessive.\nMacroeconomic policy reached a turning point in early 2014. \nMonetary policy embarked on a tightening cycle, and at \naround the same time fiscal policymakers began setting out a \nconsolidation agenda to stabilise debt relative to GDP. These \npolicy adjustments reduced the degree of stimulus provided \nto the economy, contributing to macroeconomic rebalancing. \nSince then, global conditions have improved and some \ndomestic shocks, like drought, have abated. These factors \nunderpin some economic recovery over the forecast period. \nGrowth is expected to rise towards 2% by 2019, closing the \noutput gap. Inflation should be back within the target range \nby the second quarter of 2017 and is projected to remain \nthere until the end of the forecast period. As such, the policy \nrate trajectory may now have stabilised. However, forecast \ninflation is still relatively elevated, remaining above 5% for 2018 \nand 2019, and inflation expectations are uncomfortably close \nto 6%. This limits the scope for rate cuts. Furthermore, the \nrisks are that inflation will be higher, and growth will be worse, \nthan currently projected, owing in part to a recent spike in \nuncertainty. The much-needed improvement envisioned by \nthe forecast may therefore not materialise.\nForecast\nIndices: 2015 Q1 = 100\n2005\n2007\n2009\n2011\n2013\n2015\n2017\n2019\nReal and potential GDP\n \nReal GDP\n \nReal potential GDP (old 2013 method)\nSource: SARB\n \nReal potential GDP\n \n95\n100\n105\n110\n115\n120\n125\n130\n135\n140\n145\n33\nMonetary Policy Review April 2017\nStatement of the Monetary Policy Committee\n24 November 2016\nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank, \nat a meeting of the Monetary Policy Committee in Pretoria\nHeadline consumer price inflation declined to within the \ntarget range of 3–6% in August, in line with the expectations \nof the South African Reserve Bank (SARB). Nevertheless, \nhigher inflation outcomes are forecast in the near term \nbefore a sustained return to within the target range during \n2017. While domestic economic growth prospects appear \nmore favourable following the positive surprise in the second \nquarter of this year, the outlook remains constrained against \na backdrop of weak domestic fixed investment and low \nlevels of business and consumer confidence.\nSince the previous meeting of the Monetary Policy \nCommittee (MPC), the global economic and political \nlandscape \nhas \nchanged \nsignificantly \nfollowing \nthe \npresidential election in the United States (US). The high \ndegree of uncertainty surrounding the economic policies of \nthe new administration is expected to persist for some time, \ncreating a more challenging and volatile environment for \nemerging markets in particular. Higher US long bond yields, \nalong with expectations of a tighter stance of monetary \npolicy by the US Federal Reserve (Fed) than previously \nexpected, have contributed to the reversal of the recent \npositive sentiment towards emerging markets. The prospect \nof rising protectionism and its implications for world trade \nare also a concern.\nThese developments have also affected capital flows to \nSouth Africa, with implications for the rand and bond yields. \nDomestic growth and inflation dynamics have remained \nmore or less in line with expectations, but risks to the \ninflation outlook have increased moderately.\nThe year-on-year inflation rate, as measured by the consumer \nprice index (CPI) for all urban areas, measured 6.1% and \n6.4% in September and October respectively, compared \nwith 5.9% in August. The October outcome was marginally \nabove the forecast of the SARB. Food price inflation \naccelerated further to a recent high of 12.0%, with the \ncategory of food and non-alcoholic beverages contributing \n1.8 percentage points to the overall inflation outcome. Goods \nprice inflation measured 7.1% in October, up from 6.6% in \nSeptember, with non-durable goods inflation increasing to \n7.6%. Services price inflation increased from 5.6% to 5.8%. \nThe SARB’s measure of core inflation – which excludes \nfood, fuel and electricity – measured 5.7%, up from 5.6%.\nProducer price inflation for final manufactured goods \nmeasured 6.6% in September and October, down \nfrom 7.2% in August. The main contributor to the \nOctober outcome was the category of food products, \nbeverages and tobacco products, which contributed \n4.0 percentage points and reflects the continued impact of \nthe drought on food prices.\nThe latest inflation forecast of the SARB is broadly \nunchanged over the forecast period, despite a moderate \nupward adjustment to the food price forecast in the later \nquarters. The annual averages are unchanged at 6.4% for \n2016 and 5.8% and 5.5% respectively in the coming two \nyears. Inflation is expected to peak at 6.6% in the fourth \nquarter of this year, marginally lower than in the previous \nforecast, with a sustained return to within the target range \nstill expected to occur during the second quarter of 2017. \nThe higher food price assumption is offset by a slightly more \nappreciated exchange rate assumption.\nCore inflation is expected to average 0.1 percentage points \nless in each year of the forecast period compared with the \nprevious forecast, at 5.6% this year and 5.5% and 5.2% in \n2017 and 2018 respectively. Core inflation is expected to \nremain within the target range over the forecast period, with \na peak of 5.8% in the final quarter of this year.\nThe annual inflation expectations of economic analysts, as \nreflected in the Reuters Econometer survey conducted in \nNovember, are broadly unchanged since September and \nare similar to those of the SARB. The median forecast for \nthe current and next two years are 6.3%, 5.8% and 5.6% \nrespectively. Bond market expectations implicit in the \nbreak-even inflation rates, i.e. the yield differential between \nconventional government bonds and inflation-linked bonds, \nincreased in the wake of the recent depreciation of the \nrand. They remain above the upper end of the inflation \ntarget range.\nThe global outlook became increasingly uncertain during \nthe year following the decision of the United Kingdom \n(UK) to leave the European Union and the outcome of the \nUS presidential election. While the new policy direction \nin the US is still unclear, the markets have interpreted the \noutcome as being positive for US growth in the short run, \nwith commitments to tax cuts and higher fiscal spending on \ninfrastructure. These policies are expected to result in higher \ngrowth and inflation, particularly against the backdrop of an \nincreasingly tight labour market. Nevertheless, the timing \nand extent of the expenditure boost is highly uncertain at \nthis stage.\nWhile an increase in infrastructure expenditure could be \npositive for commodity prices, other aspects of the possible \nnew policy direction are likely to have an adverse effect \non emerging markets. These include a possibly more \nMonetary Policy Review April 2017\n34\naggressive tightening of US monetary policy in response \nto higher inflation and growth, which could also reduce the \nmultiplier effect of the fiscal expansion. Together with the \nrecent sharp increase in US long bond yields, the possibility \nof such actions has led to a reversal of capital flows to \nemerging markets, reminiscent of the market reaction to \nthe so-called US taper tantrum in 2013. The impact on \nemerging market currencies and bond markets, including \nin South Africa, is already evident. Given the high degree \nof uncertainty, the financial markets may have overreacted.\nA further concern for emerging markets is the potential \nchange of trade policies that may impact on existing trade \ntreaties, as well as unilateral increases in tariff protection \nin the US. The outlook for emerging markets has therefore \nbecome more uncertain. The lingering concerns about the \nsustainability of the recovery in the Chinese economy have \nbeen revived by the possibility of tariff increases on Chinese \nexports. Countries with strong direct trade links with the US, \nin particular Mexico, are most vulnerable to increased trade \nbarriers. A more protectionist US stance could reinforce the \nalready slow growth of global trade.\nThe short-term fallout of the Brexit vote on the UK economy \nhas been limited to date, in part due to the accommodative \nmonetary policy response. The longer-term impact remains \nunclear as the terms of withdrawal are still to be negotiated \nand there are concerns that a delay in clarity could undermine \ninvestment. The eurozone is expected to continue with \nits slow but steady recovery, and the Japanese economy \ncontinues to battle with deflation.\nGlobal inflation remains generally benign. Since the previous \nmeeting of the MPC, a number of countries have loosened \nmonetary policy. Expansionary policies are expected to \npersist in the eurozone, Japan and the UK, despite emerging \ninflation pressures in the latter. By contrast, a persistence of \nsignificant outflows from emerging markets in response to \nthe possibility of a tighter US monetary policy stance could \npose challenges for monetary policies in a number of these \neconomies.\nThese new global developments have impacted on the \ndomestic bond and foreign exchange markets. The rand \nappreciated steadily from the middle of October in response \nto some positive domestic developments as well as inflows \nfrom a large mergers and acquisitions transaction. The \ncurrency was trading at around R13.20 against the US dollar \njust before the elections. It then reached its weakest point \nof R14.60 against the US dollar in the wake of the surprise \noutcome, before recovering somewhat. Domestic long \nbond yields (R186) initially spiked by about 60 basis points, \nbut the increase has since moderated to about 25 basis \npoints. Since the previous meeting of the MPC, the rand \nhas depreciated by about 5.7% against the US dollar and \nby about 1.1% on a trade-weighted basis.\nThe rand is expected to remain sensitive to changes in the \nstance of US monetary policy. A US rate increase is generally \nexpected in December and probably largely priced in, but \nof greater significance for the rand will be the signals from \nthe Federal Open Market Committee (FOMC) regarding \nthe trajectory of future increases. The rand will also remain \nsensitive to the sovereign ratings announcements due later \nthis month and early in December.\nOn the positive side, the rand has been given support by \nthe generally improved trade account in recent months. \nHowever, the deficit on the current account of the balance of \npayments is expected to have widened in the third quarter \nof this year.\nThe financing of the deficit may become more challenging \nshould the recent significant non-resident sales of bonds \nand equities persist. During October and on a month-to-\ndate basis, non-residents have been net sellers of domestic \nbonds and equities to the value of R42.7 billion and \nR19.7 billion respectively.\nThe domestic economic growth outlook remains subdued, \nalthough the low point of the cycle appears to be behind \nus. The SARB’s forecast remains unchanged at 0.4% for \n2016 and 1.2% and 1.6% respectively for the next two \nyears. While the estimate for potential real gross domestic \nproduct (GDP) growth was revised down marginally to \n1.3%, rising to 1.5% by 2018, the output gap is expected \nto remain negative over the forecast period. The SARB’s \ncomposite leading business cycle indicator improved in \nAugust and September, continuing a recent generally \npositive albeit gradual upward trend.\nAvailable monthly data suggest that growth in the third \nquarter is likely to be positive but well below the rate \nrecorded in the second quarter. The mining sector \ncontributed positively to GDP growth in the quarter. The \nphysical volume of manufacturing output declined despite \na positive month-to-month outcome in September. The \nBarclays Purchasing Managers’ Index (PMI), which declined \nfurther in October, has remained below the neutral 50 index \npoint level for three consecutive months. The weak trends in \nmanufacturing are consistent with the continued low levels \nof business confidence despite a moderate improvement \nin the third quarter. More positively, the services sector is \nexpected to sustain its positive growth rate, with the tourism \nsector being particularly buoyant.\nConsumption expenditure by households remains subdued, \nwith declining retail trade sales and static wholesale trade \nsales in the third quarter of this year. Although new motor \nvehicle sales increased sharply on a month-to-month basis \nin October, a sizeable proportion of this is attributed to car \nrental companies; challenging conditions in the new vehicle \nsector persist.\n35\nMonetary Policy Review April 2017\nConsumers continue to face a number of constraints. \nEmployment growth is particularly weak. Household debt \nlevels, while moderating, are still elevated. And wealth \neffects are muted amid stagnant equity and residential \nproperty markets. Furthermore, growth in credit extension \nto households remains subdued.\nThe slow growth in household disposable incomes is also \nreflected in a gradual decline in wage growth, with growth \nin nominal remuneration per worker declining to 5.8% in \nthe second quarter. When an adjustment is made for the \nincrease in labour productivity, growth over four quarters \nin nominal unit labour costs measured 5.1% in the second \nquarter. The Andrew Levy Employment Publications survey \nreports an average wage settlement rate in collective \nbargaining agreements of 7.5% in the first three quarters of \nthe year and 7.1% in the third quarter. This may be indicative \nof wage settlements becoming more sensitive to the \npersistently high unemployment rates.\nAccording to the Medium Term Budget Policy Statement \n(MTBPS) released in October, fiscal consolidation is set \nto continue at a measured pace. A moderate degree of \nslippage is expected in the near term, as tax receipts are \nnegatively affected by the economic slowdown. In order \nto prevent an excessive widening of the fiscal deficit, the \nMTBPS proposes a reduction in the expenditure ceiling \nand tax increases, to be announced in February. A revised \ndeficit of 3.4% of GDP is expected in the current fiscal year, \nsteadily narrowing to 2.5% of GDP in the 2019/20 fiscal year.\nFood price inflation remains a significant driver of inflation. \nIt remains sensitive to the continuing drought. While food \nprice inflation is still expected to moderate from early 2017, \nthe pace of decline is expected to be slower than previously \nforecast. This has led to an upward revision to the food \nprice assumption in the forecast during the outer quarters in \nparticular. The change is mainly due to the delayed impact \nof meat prices, which are now expected to peak only in \nearly 2018 as farmers rebuild their herds during 2017.\nBrent crude oil prices reached a year-high of US$52 per barrel \nin early October following the decision of the Organization \nof the Oil Exporting Countries (OPEC) to curtail production. \nSince then, prices have declined following doubts about the \nprospects for an agreement on the distribution of production \ncuts across the cartel. Some price volatility is expected in the \nshort run as negotiations on production cuts continue. The \nSARB’s forecast maintains the assumption of a moderate \nupward trajectory of international oil prices over the forecast \nperiod. The domestic price of 93 octane petrol increased by \na cumulative 88 cents per litre in October and November, \nwith almost all of the increase due to higher international \nproduct prices. The current over-recovery indicates that, \nshould current trends persist, about half of that increase \ncould be reversed in December.\nThe MPC is of the view that a high degree of uncertainty \nsurrounds the nature and timing of possible policy changes \nemanating from significant developments in the global \neconomic environment. This elevated uncertainty creates \na more challenging environment especially for emerging \nmarkets, as evidenced in the recent changed pattern of \ncapital flows. Financial markets are thus likely to remain \nvolatile for some time.\nSince the previous meeting of the MPC, the inflation forecast \nhas remained largely unchanged. Whereas the risks to the \ninflation forecast were previously assessed to be more or less \nbalanced, the MPC now assesses the risks to be moderately \nto the upside. This is mainly due to the possible impact of \nadverse global developments on the exchange rate. The risk \nof domestically generated shocks to the exchange rate also \nremains. Nevertheless, despite its high degree of volatility, the \nrand has displayed relative resilience in the face of numerous \nshocks over the past year.\nThe domestic growth outlook is unchanged and remains \nconstrained against the backdrop of weak business and \nconsumer confidence. The risks to the growth forecast \nare assessed to be broadly balanced. Domestic demand \npressures remain weak, and consumers are expected to \nremain under pressure for some time.\nThe MPC has accordingly decided to keep the repurchase \nrate unchanged at 7.0% per annum. The decision was \nunanimous.\nThe MPC remains concerned that the inflation trajectory \nis uncomfortably close to the upper end of the target \nrange. Furthermore, the uncertain environment and \nmoderately higher risks to the inflation outlook require \ncontinued vigilance. While the MPC retains the view that we \nmay be close to the end of the hiking cycle, this position \nmay be reassessed should the upside risks transpire.\nMonetary Policy Review April 2017\n36\nSummary of assumptions: Monetary Policy Committee \nmeeting on 24 November 2016*\n1.\t Foreign-sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2013\n2014\n2015\n2016\n2017\n2018\n1.\t Real GDP growth in South Africa’s major trading-partner countries...\n3.0% \n3.1% \n3.0% \n2.8% \n2.9% \n3.1% \n(2.8%)\n(2.7%) \n2.\t International commodity prices in US$ (excluding oil)..........................\n-6.4% \n-9.8% \n-19.3% \n-4.5% \n5.5% \n1.0% \n3.\t Brent crude (US$/barrel)........................................................................\n108.8 \n99.2 \n52.5 \n44.0 \n53.5 \n57.5 \n(44.3) \n \n4.\t World food prices (US$).........................................................................\n-1.6% \n-3.8% \n-18.7% \n-1.6% \n5.5% \n2.5% \n(-4.9%) \n(3.0%) \n(3.0%)\n5.\t International wholesale prices................................................................\n0.3% \n-0.1% \n-3.5% \n-1.2% \n1.1% \n1.2% \n(-1.1%) \n \n6.\t Real effective exchange rate of the rand (index 2010 = 100)................\n81.91 \n79.17 \n80.08 \n76.67 \n81.00 \n81.00 \n(75.67) \n(78.00) \n(78.00) \n7.\t Real effective exchange rate of the rand...............................................\n-10.1% \n-3.3% \n1.1% \n-4.3% \n5.7% \n0.0% \n(-5.5%) \n(3.1%) \n \n2.\t Domestic-sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2013\n2014\n2015\n2016\n2017\n2018\n1.\t Real government consumption expenditure.....................................\n3.8% \n1.8% \n0.2% \n1.5% \n1.0% \n1.0% \n2. \t Administered prices...........................................................................\n8.7% \n6.7% \n1.7% \n5.2%\n6.4%\n7.6%\n(5.1%) \n(6.7%)\n(7.3%) \n\t\n– Petrol price.....................................................................................\n11.8% \n7.2% \n-10.7% \n1.4% \n5.7% \n8.9% \n(1.0%) \n(7.0%)\n(7.9%) \n\t\n– Electricity price..............................................................................\n8.7% \n7.2% \n9.4% \n9.3% \n7.7% \n8.0% \n3.\t Potential growth..................................................................................\n2.0% \n1.7% \n1.5% \n1.3% \n1.4% \n1.5% \n(1.4%) \n(1.5%) \n(1.7%) \n4.\t Repurchase rate (per cent)................................................................\n5.00 \n5.57 \n5.89 \n6.91 \n7.00 \n7.00 \nThe figures in brackets represent the previous assumptions of the Monetary Policy Committee.\n*\t For an explanation of foreign-sector assumptions and domestic-sector assumptions, see pages 48 and 49.\n37\nMonetary Policy Review April 2017\nForecast results (annual)\nPer cent\nActual\nForecast\n2013\n2014\n2015\n2016\n2017\n2018\n1. Real gross domestic product (GDP) growth.............................\n2.3% \n1.6% \n1.3% \n0.4% \n1.2% \n1.6% \n2. Current account as a ratio to nominal GDP..............................\n-5.9 \n-5.3 \n-4.3 \n-3.8 \n-4.3 \n-4.4 \n \n(-4.0) \n(-4.2) \n \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nForecast results (quarterly)\nYear-on-year percentage change\nActual\nForecast\n1\n2\n3\n4\n2015\n1\n2\n3\n4\n2016\n1\n2\n3\n4\n2017\n1\n2\n3\n4\n2018\n1. Headline inflation.............................\n4.2\n4.6\n4.7\n4.9\n4.6\n6.5\n6.2 \n6.1 \n6.6\n6.4 \n6.1 \n5.7 \n5.8 \n5.5 \n5.8\n5.5 \n5.5 \n5.5 \n5.6 \n5.5 \n(6.2) \n(6.7) \n(6.4) \n(6.2) \n(5.8) \n(5.8) \n(5.5) \n(5.8) \n(5.4) \n(5.4) \n(5.5) \n(5.6) \n(5.5) \n2. Core inflation...................................\n5.7\n5.6\n5.3\n5.2\n5.5 \n5.5 \n5.5 \n5.7 \n5.8 \n5.6 \n5.6 \n5.6\n5.5 \n5.4 \n5.5 \n5.2 \n5.2 \n5.2 \n5.3 \n5.2 \n(5.7) \n(5.9) \n(5.7) \n(5.8)\n(5.7) \n(5.5 )\n(5.4) \n(5.6)\n(5.3) \n(5.3) \n(5.3) \n(5.4) \n(5.3) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nSelected forecast results: Monetary Policy Meeting on 24 November 2016\nMonetary Policy Review April 2017\n38\nStatement of the Monetary Policy Committee\n24 January 2017 \nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank, \nat a meeting of the Monetary Policy Committee in Pretoria\nSince the previous meeting of the Monetary Policy Committee \n(MPC), the near-term inflation outlook has deteriorated, but \nthe longer-term outlook is more or less unchanged. The \nexpected inflation profile has been negatively affected by \nhigher international oil prices and a persistence in elevated \nfood price inflation despite improved rainfall in many of the \ndrought-stricken regions. At the same time, the rand has \ndisplayed some resilience. While some of the key risks to \nthe rand appear to have subsided for now, they could re-\nemerge at any stage. \nGlobal growth prospects are mixed amid policy uncertainty, \nprimarily in the United States (US) and the United Kingdom \n(UK). The domestic growth outlook remains challenging, \nalthough a modest improvement is expected over the \nforecast period.\nThe year-on-year inflation rate as measured by the consumer \nprice index (CPI) for all urban areas measured 6.8% in \nDecember, up from 6.6% in November. The December \noutcome surprised on the upside relative to the South \nAfrican Reserve Bank’s (SARB) forecast and the market \nconsensus expectation of 6.5%. The main sources of this \nsurprise included food prices, housing rentals, recreation \nand culture, and restaurants and hotels. Food price inflation \nremained elevated at 12.0% in December, matching the \nrecent high recorded in October 2016. The contribution \nof the category of food and non-alcoholic beverages to \nthe overall inflation outcome has remained unchanged at \n1.8 percentage points for the past three months. Goods \nprice inflation measured 7.8% in December, up from \n7.7% in November, while services price inflation increased \nfrom 5.6% to 5.9%. The SARB’s measure of core inflation, \nwhich excludes food, fuel and electricity measured \n5.9%, up from 5.7%. \nProducer price inflation for final manufactured goods \nmeasured 6.9% in November, compared with 6.6% in \nOctober. The main contributor to the November outcome \nwas the category of food products, beverages and tobacco \nproducts which contributed 3.9 percentage points.\nThe inflation forecast of the SARB has deteriorated since \nthe previous meeting of the MPC. Headline inflation is \nnow expected to only return to within the target range \nduring the final quarter of 2017, and to average 6.2% for \nthe year, compared with 5.8% in the previous forecast. \nThe forecast for 2018 is more or less unchanged at an \naverage of 5.5%. The peak of the forecast remains at 6.6%, \nwhich was recorded in the final quarter of 2016, and this \nlevel is now expected to persist in the first quarter of 2017. \nThis deterioration is mainly due to changed assumptions \nregarding international oil prices, the domestic fuel prices \nand the outlook for food prices, which more than offset the \nmore favourable exchange rate assumption.\nBy contrast, the forecast for core inflation is unchanged, \naveraging 5.5% and 5.2% in 2017 and 2018 respectively. \nInflation expectations as reflected in the survey conducted \nby the Bureau for Economic Research (BER) during the \nfourth quarter of 2016 showed average inflation expectations \nfor 2017, declining from 6.0% in the third quarter to 5.8%. \nThe same outcome is expected for 2018 as well as for five-\nyear inflation expectations. Despite the slight moderation, \nexpectations remain more or less anchored at the upper \nend of the target range, but with a narrower divergence \nbetween the different groups of respondents than is usually \nthe case. The expectations of these groups ranged from \n5.6% to 6.0% for 2017, and from 5.4% to 6.0% for 2018. The \noutcome may have been distorted by the marked decline of \n0.6 percentage points for the trade union respondents.\nThe median annual inflation expectations of market analysts \nas reflected in the Reuters Econometer survey are relatively \nunchanged at 5.8% and 5.5% for 2017 and 2018. Bond \nmarket expectations implicit in the break-even inflation \nrates have declined across all maturities since the previous \nmeeting, though they remain above the target range.\nThe global economic outlook remains uncertain, despite \nincreased optimism regarding US growth following the \nUS presidential elections. There is still a great deal of \nuncertainty regarding the policies of the new administration, \nparticularly with respect to the size of the promised fiscal \nstimulus. While some of the initial optimism has since been \ntempered somewhat, US growth is expected to be relatively \nstrong, but with some downside risks posed by a stronger \ndollar. Uncertainty also persists regarding the prospects \nfor the UK economy, as the terms of the disengagement \nfrom the European Union (EU) are unlikely to be resolved \nfor some time. The steady but slow growth recovery in the \neurozone is expected to continue, but upcoming elections \nin a number of countries could pose risks to the outlook, \nalongside ongoing concerns about the prospects for the \nItalian economy.\nThe outlook for emerging markets is also unclear, given \nconflicting developments. Commodity prices, especially \nindustrial commodities, have risen in recent months, but \nprotectionist threats from the US, if carried through, could \nundermine world trade and have an adverse effect on \n39\nMonetary Policy Review April 2017\nemerging markets in particular. These countries are also \nhighly dependent on Chinese growth, which is expected \nto remain above the 6% level. However, given the credit-\ndriven nature of recent Chinese growth, there are fears of an \nunsustainable credit bubble which could expose financial \nsector vulnerabilities and undermine the growth outlook. \nThere are tentative signs of global inflation edging up as fears \nof deflation recede amid higher energy and food prices. \nAs expected, the US Federal Reserve tightened monetary \npolicy in December and signalled further increases to \ncome. However, the pace of increase is still expected to be \nrelatively moderate amid a highly uncertain economic policy \nenvironment. Both the European Central Bank (ECB) and the \nBank of Japan have maintained their highly accommodative \npolicy stances. This divergence between the advanced \neconomies is likely to persist for some time. \nThe rand has displayed a degree of resilience since the \nprevious meeting of the MPC, having traded in a relatively \nnarrow range of between R14.22 and R13.46 against \nthe US dollar. Since the previous meeting, the rand has \nappreciated by 5.6% against the US dollar and by 4.2% on \na trade-weighted basis. The rand was positively impacted \nby the decisions of the ratings agencies not to downgrade \nthe sovereign foreign credit rating to sub-investment grade, \nalthough this remains a risk in the coming months. The \nlimited response of the rand exchange rate to the increase in \nthe US policy rate in mid-December suggests that the move \nhad been largely priced in. A gradual pace of tightening is \nexpected in the US, with the rand vulnerable to any upside \nsurprises in this respect.\nThe rand has been positively affected by the improvement \nin the terms of trade, following the recent modest increase \nin commodity prices. Although the overall current account \ndeficit is expected to narrow over the forecast period, it \nremains relatively wide. In line with the recent improved \ncapital flows to emerging economy bond markets, non-\nresidents have been net buyers of South African bonds \nsince the beginning of the year, while equity net sales have \ncontinued. This follows persistent net sales of both bonds \nand equities during the last three months of 2016.\nThe domestic growth outlook remains weak and more or \nless unchanged since the previous meeting of the MPC. \nThe SARB expects growth to have averaged 0.4% in \n2016, although recent monthly data for the fourth quarter \nsuggest that there may be a downside risk to this forecast. \nThe forecast for 2017 has been revised down marginally to \n1.1% (from 1.2%), and remains unchanged at 1.6% for 2018. \nThis improved outlook relative to 2016 is consistent with the \nrecent upward trend in the composite leading indicator of \nthe SARB. By contrast, the Rand Merchant Bank (RMB)/\nBER Business Confidence Index declined again in the fourth \nquarter, following a recovery in the previous quarter. Much \nof this decline was driven by the new vehicle sector.\nThe recent monthly data paint a bleak picture for the fourth \nquarter of 2016. Mining production, which had improved in \nthe second and third quarters, contracted in both October \nand November. However, improved commodity prices are \nexpected to help the sector in the coming months. The \nmanufacturing sector recorded low but positive growth in \nNovember, following a month-to-month decline in October. \nThe Barclays Purchasing Managers’ Index (PMI) declined \nfurther in December and recorded its fifth consecutive \nmonth below the neutral 50 level. \nThe low level of business confidence is reflected in the \ncontinued, but slower, contraction in real gross fixed capital \nformation. Gross fixed investment has contracted for four \nconsecutive quarters, particularly in the private sector. This \nhas contributed to the persistent labour market weakness, \nwith \nformal \nnon-agricultural \nemployment \n(excluding \ntemporary \nelection-related \nemployment) \nremaining \nunchanged in the year to the third quarter of 2016. The \nofficial unemployment rate increased to 27.1%, its highest \nlevel since the inception of the Quarterly Labour Force \nSurvey in 2008.\nWage growth appears to be responding to the weak labour \nmarket environment. Year-on-year nominal wage growth per \nworker moderated for a fifth consecutive quarter in the third \nquarter of 2016, down to 5.8%. Following a small decline \nin labour productivity growth, nominal unit labour costs in \nthe formal non-agricultural sector increased to 5.7%. The \nslower nominal wage growth per worker is consistent with \nthe lower wage settlement rates reported by Andrew Levy \nEmployment Publications.\nHousehold consumption expenditure data paint a mixed \npicture. Growth in household consumption expenditure \naccelerated to 2.6% in the third quarter despite a further \ncontraction in durable goods consumption. Real retail \ntrade sales declined in October, but increased markedly \nin November on a month-to-month basis. By contrast, \nwholesale trade sales contracted in both months. Domestic \nnew vehicle sales remained subdued following further \ndeclines in the final quarter of last year. \nNotwithstanding some improvement, consumers remain \nunder pressure and consumer confidence remains low, \nas indicated in the sharp contraction in the First National \nBank (FNB)/BER Consumer Confidence Index in the fourth \nquarter. Households remain highly indebted despite a further \nmoderation in the debt ratio and the subdued housing and \nequity markets have contributed to an absence of strong \nwealth effects. Slower wage growth along with stagnant \nemployment growth and expected tax increases in the \nforthcoming budget are also likely to dampen consumption \nexpenditure.\nA further constraint to consumption expenditure growth \nhas been the weak credit extension to the private sector, \nwhich, at 4.5% in November, was the lowest year-on-year \nMonetary Policy Review April 2017\n40\ngrowth since late 2010. While growth in credit extension \nto the household sector was particularly subdued, that to \nthe corporate sector also moderated in the second half of \n2016. The strongest decline was seen in mortgage credit \nextension for commercial property. \nFood price inflation is expected to decline following good \nrainfall in parts of the country. Spot prices for both maize \nand wheat have declined significantly, and a markedly higher \nmaize crop is expected this year. However, the impact on \nprices at the consumer level are yet to be felt, with meat prices \nlikely to lag other food price categories as farmers restock \ntheir herds. Although the SARB’s inflation forecast assumes \nthat food price inflation has more or less peaked, the pace \nof moderation is expected to be slower than in the previous \nforecast. Food price inflation is now expected to average \n7.0% during 2017, compared with 6.5% previously. Food \nprice disinflation is expected to be constrained or delayed by \nhigher fuel costs and a rising trend in global food prices.\nBrent crude oil prices increased by over 20% to almost \nUS$60 per barrel, in response to the Organization of the \nPetroleum Exporting Countries (OPEC)-brokered agreement \nto restrict production. Prices have since moderated to current \nlevels of around US$55 per barrel. The sustainability of this \nagreement and its longer-term impact on prices is uncertain, \ngiven the possibility of offsetting developments. A number \nof oil producers were exempt from the agreement; there are \nincentives and scope for cartel members to exceed their \nquotas; and US shale producers have already increased \nproduction in response to higher prices. These factors are \nlikely to constrain oil price increases. While the SARB’s oil \nprice assumption has been revised up, the trajectory is \nrelatively flat. Despite the stronger rand exchange rate, the \ndomestic price of 93 octane petrol increased by 50 cents \nper litre in January and a further increase can be expected \nin February. \nThe MPC has noted the marked deterioration in the inflation \nforecast since the previous meeting, as well as the extension \nof the expected breach of the upper level of the target \nrange by a further two quarters. Inflation is now expected \nto return to within the target range in the final quarter of \n2017. While this is a cause for concern, the main drivers \nof this deterioration are supply side shocks, in particular oil \nand food prices. The increase in the international oil price is \nnot expected to be a start of a new oil price spiral. Various \nsupply side factors are expected to constrain oil prices \ngoing forward in the absence of any major global political \nrisks that would threaten production. While the food price \nforecast has been adversely affected by higher input costs, \na steady decline in food price inflation is still expected. \nThe more favourable rand exchange rate has been an \nimportant factor in offsetting some of the negative impacts \nof these developments. Despite a turbulent second half of \n2016, both domestically and globally, the rand has been \nrelatively resilient. Furthermore, the current level of the rand is \nstronger than that implicit in the forecast, and pass-through \nto inflation continues to be relatively muted. Nevertheless it \nremains vulnerable to both domestic and external shocks. \nAs always, the approach of the MPC is to look through \nthe first-round effects of exogenous shocks, but remain \nfocused on the possible emergence of second-round \neffects, which could require a policy response. At this stage, \nthe longer-term trajectory over the relevant policy horizon is \nunchanged, as is the forecast for core inflation. In particular, \nthe MPC will take note of possible changes in the longer-\nterm inflation expectations, which had shown tentative \nsigns of moderation in the fourth quarter of 2016. The MPC \nassesses the risks to the inflation outlook to be moderately \non the upside. \nThe domestic growth outlook has remained largely \nunchanged despite a possible weaker outcome in the fourth \nquarter of 2016. While some improvement is anticipated over \nthe forecast period, growth is expected to remain below \npotential. The risks to the growth forecast are assessed to \nbe broadly balanced. Growth prospects remain dependent \non uncertain but tentatively improving global conditions \nand their impact on commodity prices. Domestically, some \nimprovement in agricultural production can be expected. \nHowever, a significant improvement in growth prospects \nrequires the implementation of structural reforms which \ncould contribute to increased business and consumer \nconfidence. \nIn light of these developments and the assessment of the \nbalance of risks, the MPC has unanimously decided to keep \nthe repurchase rate unchanged at 7.0% per annum. \nThe MPC remains focused on the medium- to longer-term \ninflation outlook, but the deterioration of the shorter-term \noutlook requires increased vigilance. Furthermore, the MPC \nremains concerned that the longer-term inflation trajectory \ncontinues to be uncomfortably close to the upper end of the \ntarget range. The MPC retains the view that we may be near \nthe end of the hiking cycle. However, should second-round \neffects emerge that undermine the longer-term inflation \noutlook, there may be a reassessment of this view. \n \n41\nMonetary Policy Review April 2017\nSummary of assumptions: Monetary Policy Committee \nmeeting on 24 January 2017*\n1.\t Foreign-sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2013\n2014\n2015\n2016\n2017\n2018\n1.\t Real GDP growth in South Africa’s major trading-partner countries...\n3.0% \n3.2% \n3.0% \n2.8% \n2.9% \n3.1% \n(3.1%)\n \n2.\t International commodity prices in US$ (excluding oil)..........................\n-6.2% \n-10.5% \n-18.7% \n-3.6% \n9.9% \n-4.2% \n(-6.4%)\n(-9.8%)\n(-19.3%)\n(-4.5%) \n(5.5%) \n(1.0%) \n3.\t Brent crude (US$/barrel)........................................................................\n108.8 \n99.2 \n52.5 \n43.6 \n56.0 \n60.0 \n(44.0 )\n(53.5) \n(57.5) \n4.\t World food prices (US$).........................................................................\n-1.6% \n-3.8% \n-18.7% \n-1.6% \n6.0% \n2.5% \n(5.5%)\n \n5.\t International wholesale prices................................................................\n0.3% \n-0.1% \n-3.5% \n-1.2% \n1.5% \n1.2% \n(1.1%) \n \n6.\t Real effective exchange rate of the rand (index 2010 = 100)................\n81.91 \n79.17 \n80.08 \n77.28 \n84.00 \n84.00 \n(76.67) \n(81.00) \n(81.00) \n7.\t Real effective exchange rate of the rand...............................................\n-10.1% \n-3.3% \n1.1% \n-3.5% \n8.7% \n0.0% \n(-4.3%) \n(5.7%) \n \n2.\t Domestic-sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2013\n2014\n2015\n2016\n2017\n2018\n1.\t Real government consumption expenditure.....................................\n3.8% \n1.8% \n0.2% \n1.6% \n1.0% \n1.0% \n(1.5%)\n2. \t Administered prices...........................................................................\n8.7% \n6.7% \n1.7% \n5.3%\n8.3%\n7.6%\n(5.2%)\n(6.4%\n\t\n– Petrol price.....................................................................................\n11.8% \n7.2% \n-10.7% \n1.6% \n12.8% \n8.9% \n(1.4%) \n(5.7%)\n\t\n– Electricity price..............................................................................\n8.7% \n7.2% \n9.4% \n9.3% \n7.7% \n8.0% \n3.\t Potential growth..................................................................................\n2.0% \n1.7% \n1.5% \n1.3% \n1.4% \n1.5% \n4.\t Repurchase rate (per cent)................................................................\n5.00 \n5.57 \n5.89 \n6.91 \n7.00 \n7.00 \nThe figures in brackets represent the previous assumptions of the Monetary Policy Committee.\n*\t For an explanation of foreign-sector assumptions and domestic-sector assumptions, see pages 48 and 49.\nMonetary Policy Review April 2017\n42\nForecast results (annual)\nPer cent\nActual\nForecast\n2013\n2014\n2015\n2016\n2017\n2018\n1. Real gross domestic product (GDP) growth.............................\n2.3% \n1.6% \n1.3% \n0.4% \n1.1% \n1.6% \n(1.2%)\n2. Current account as a ratio to nominal GDP..............................\n-5.9 \n-5.3 \n-4.3 \n-4.1 \n-3.5 \n-4.1 \n \n(-3.8) \n(-4.3) \n(-4.4) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nForecast results (quarterly)\nYear-on-year percentage change\nActual\nForecast\n1\n2\n3\n4\n2015\n1\n2\n3\n4\n2016\n1\n2\n3\n4\n2017\n1\n2\n3\n4\n2018\n1. Headline inflation.............................\n4.1\n4.6\n4.7\n4.9\n4.6\n6.5\n6.2 \n6.0 \n6.6\n6.4 \n6.6 \n6.2 \n6.2 \n5.9 \n6.2\n5.4\n5.4\n5.5 \n5.6 \n5.5 \n(6.6) \n(6.4) \n(6.1) \n(5.7) \n(5.8) \n(5.5) \n(5.8) \n(5.5) \n(5.5) \n(5.5) \n(5.6) \n(5.5) \n2. Core inflation...................................\n5.7\n5.6\n5.3\n5.2\n5.5 \n5.5 \n5.5 \n5.7 \n5.7 \n5.6 \n5.7 \n5.7\n5.5 \n5.3 \n5.5 \n5.1 \n5.2 \n5.2 \n5.3 \n5.2 \n(5.8) \n(5.6) \n(5.6)\n(5.6) \n(5.5 )\n(5.4) \n(5.5)\n(5.2) \n(5.2) \n(5.2) \n(5.3) \n(5.2) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nSelected forecast results: Monetary Policy Meeting on 24 January 2017\n43\nMonetary Policy Review April 2017\nStatement of the Monetary Policy Committee\n30 March 2017 \nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank, \nat a meeting of the Monetary Policy Committee in Pretoria\nSince the previous meeting of the Monetary Policy Committee \n(MPC) the inflation outlook has improved. This was mainly \ndue to the further appreciation of the rand exchange rate \nfollowing the benign market reaction to the United States \nFederal Reserve (US Fed) monetary policy tightening as well \nas the significant narrowing of the domestic current account \ndeficit. A more positive growth outlook in the advanced \neconomies has also contributed to a more favourable \nenvironment for emerging markets generally. However, \nthe recent heightened domestic political uncertainty has \nreversed some of these exchange rate gains, and the risk of \nfurther rand weakening overshadows the inflation outlook.\nDomestic growth prospects remain constrained, although \nthe low point of the cycle is probably behind us. Demand \npressures are expected to remain weak amid low business \nand consumer confidence\nThe year-on-year inflation rate as measured by the \nconsumer price index (CPI) for all urban areas moderated \nto 6.3% in February, from 6.6% in January, in line with the \nmarket consensus expectation. Food price inflation, which \nmeasured 10.0%, moderated for the second consecutive \nmonth following its recent peak of 12.0% in December. \nThe contribution of the category of food and non-alcoholic \nbeverages to the overall inflation outcome declined from \n1.9 percentage points in January to 1.7 percentage points \nin February. The South African Reserve Bank’s (SARB) \nmeasure of core inflation, which excludes food, fuel and \nelectricity, measured 5.2%, down from 5.5%. This follows a \nrecent peak of 5.9% in December 2016.\nProducer price inflation for final manufactured goods \nmeasured 5.6% in February, compared with 5.9% in January. \nThe category of food products, beverages and tobacco \nproducts decelerated for the sixth consecutive month to \n8.4%, following its recent peak of 13.4% in August last year. \nThe inflation forecast of the SARB has improved, reversing \nmost of the deterioration seen at the previous meeting of \nthe MPC. Headline inflation is now expected to return to \nwithin the target range during the second quarter of 2017, \ncompared with the fourth quarter previously, and to remain \nwithin the range for the rest of the forecast period. CPI \ninflation is expected to average 5.9% for the year, compared \nwith 6.2% in the previous forecast, while the forecast for \n2018 has moderated from an average of 5.5% to 5.4%. \nThe forecast period has been extended to 2019, with an \nexpected average of 5.5% for the year.\nThis improvement is mainly due to a more appreciated \nexchange rate assumption. Despite the recent depreciation, \nthe current level of the rand is still consistent with the exchange \nrate assumption in the forecast. Although the international \noil price assumption remains unchanged, the exchange \nrate is expected to lead to lower petrol price inflation and \nis reflected in a downward revision to the assumption for \nadministered prices. This favourable trend is partially offset \nby a slower pace of disinflation in food and non-alcoholic \nbeverages, driven by an expected acceleration in poultry \nprices in particular. Food price inflation is now expected to \naverage 7.4% and 5.2% in 2017 and 2018, compared with \n7.0% and 5.0% previously.\nThe forecast for core inflation is marginally lower than before, \nat an average of 5.4% in 2017, and unchanged at 5.2% in \n2018. An average core inflation of 5.3% is expected in 2019.\nInflation expectations as measured by the Bureau for \nEconomic Research (BER) show a deterioration over the \nnear-term in particular. The average expectation for 2017 \nhas increased from 5.8% to 6.2%, with the largest upward \nrevisions coming from businesses and labour respondents. \nThe average expectation for 2018 increased marginally from \n5.8% to 5.9%, while the expected inflation for 2019 is 6.0%. \nBy contrast, average inflation expectations over five years \ndeclined by 0.1 percentage point to 5.7%.\nMedian inflation expectations of economic analysts, as \nreflected in the Reuters Econometer survey conducted in \nMarch, are more or less unchanged since January. Inflation \nis expected to average 5.8% in 2017 and 5.5% and 5.4% \nin the coming two years, roughly in line with the SARB’s \nforecast. Inflation expectations implicit in the break-even \ninflation rates (the yield differential between conventional \nbonds and inflation linked bonds) had declined since the \nprevious meeting, but have since spiked following the recent \ndepreciation of the rand, and remain above the 6.0% level \nfor longer-dated maturities.\nThe global economy shows continued signs of a broad-\nbased improvement. The growth outlook in the US remains \nfavourable with business confidence indices at high levels. \nHowever, there is growing uncertainty about the timing and \nsize of the expected fiscal stimulus. Tax reform may take \nlonger than anticipated following the recent failure to repeal \nthe Affordable Care Act.\nMonetary Policy Review April 2017\n44\nGrowth prospects in Japan and Europe are also more \npromising, with the Purchasing Manager’s Index (PMI) \nreaching a six-year high in the euro area, led by the services \nsectors in France and Germany. The extent to which the \nsustainability of this improvement is dependent on the highly \naccommodative monetary policy stance is still unclear.\nThe outlook for emerging markets is also more positive, in \npart driven by the recovery in the advanced economies and \nstronger demand in China. Firmer commodity prices have \nalso helped, but an oversupply of some commodities could \nlimit these gains.\nGlobal inflation provides a mixed picture with the recent \ndecline in international oil prices threatening to reverse the \nbroad-based increases in headline inflation in the advanced \neconomies. Some inflation normalisation is evident in the US \nand the euro area, but Japan is showing less momentum \nin price and wage growth. Inflation in the United Kingdom \nis expected to overshoot the target for some time, as the \neconomy adjusts to a weaker currency. Similarly, inflation \nexperiences in a number of emerging economies have \nreflected divergent currency movements. \nThe US Fed raised its policy rate in March in response to the \nstronger inflation trend and improved growth outlook. While \nthis action was widely expected, the gradual nature of the \nexpected interest rate cycle implicit in the forward guidance \nsurprised the markets. Policy rates are expected to remain at \nlow levels for some time in most of the advanced economies \nuntil more favourable inflation and growth dynamics are \nmore firmly entrenched.\nFor the past few months the rand exchange rate has been \nrelatively resilient, along with a number of other emerging \nmarket currencies. While most measures of emerging \nmarket risk have narrowed over recent months, those for \nSouth Africa have widened again over the past few days. The \nrand has depreciated significantly in response to increased \ndomestic political uncertainty and the exchange rate has \nre-emerged as an upside risk to the inflation outlook. Since \nthe previous meeting of the MPC, the rand has appreciated \nby 3.9% against the US dollar, by 4.0% against the euro and \nby 3.4% on a trade-weighted basis. \nThe prospect of US monetary policy tightening has been \nseen as a risk to the exchange rate. However, the rand and \nother peer currencies strengthened in response to the Fed \nactions in March, indicative of revised market expectations \nof a more moderate tightening cycle than that priced in. \nThe rand has also been underpinned by favourable terms of \ntrade trends. Furthermore, the improving trend of the deficit \non the current account of the balance of payments has \nreduced the perceived vulnerability of the rand to possible \ncapital flow reversals. However, while significant adjustment \nof the current account has occurred, the deficit is not \nexpected to remain at the level seen in the fourth quarter \nof last year. \nThe domestic growth outlook remains weak following the \nnegative growth recorded in the fourth quarter of 2016. The \n2016 annual gross domestic product (GDP) growth of 0.3% \nis likely to have been the low point of the growth cycle, and \na mild recovery is expected over the forecast period. The \nSARB’s forecast for GDP growth has been revised up by \n0.1 percentage points in both 2017 and 2018, to 1.2% and \n1.7%, with growth of 2.0% forecast for 2019. While growth is \nstill expected to be below estimated potential output growth \nof around 1.4% in the near term, the output gap is expected \nto narrow to some extent in the later part of the forecast \nperiod. The more favourable growth outlook is consistent \nwith the SARB’s leading indicator of economic activity, \nwhich has increased for six consecutive months.\nThe main drivers of growth are expected to be net exports \nand positive, albeit weak, household consumption \nexpenditure growth. Some impetus is expected to come \nfrom fixed capital formation in the outer period of the \nforecast. At a sectoral level, the agricultural sector is \nexpected to return to positive growth following good rains \nin a number of regions and improved maize crop estimates. \nA modest recovery in the manufacturing sector is expected \nfollowing two consecutive months of the Absa PMI being \nabove the neutral 50 point level, while the mining sector is \nforecast to respond to more favourable commodity prices. \nLow growth in gross fixed capital formation remains a \ndownside risk to growth in the short term. In 2016 gross \nfixed capital formation contracted for the first time since \n2010, with the ratio of fixed capital formation to GDP \ndeclining from 20.4% in 2015 to 19.6% in 2016. Private \nsector investment remains particularly weak, having \ncontracted for five successive quarters. This is reflected in \nthe Rand Merchant Bank (RMB)/BER Business Confidence \nIndex which increased marginally in the first quarter of 2017, \nbut at 40 index points remains well below the neutral level of \n50. The BER Manufacturing survey shows a sharp decline in \nexpected capital investment over the next 12 months, with \nthe political climate cited as the main reason.\nThe constrained growth outlook does not bode well for \nemployment creation in the economy. According to the \nQuarterly Labour Force Survey, employment increased by \n0.3% while the number of unemployed grew by 11.3% in the \nfourth quarter of 2016, compared to the fourth quarter of \n2015. This resulted in an increase in the unemployment rate \nby 2.0 percentage points to 26.5%. \nConsumption expenditure by households, which grew \nby 0.8% in 2016, remains subdued amid low consumer \nconfidence. While growth of 2.2% was recorded in both of \nthe final two quarters of 2016, negative retail and wholesale \ntrade sales growth in December and January underscore \nthe likely persistence of this weakness. New vehicle sales \ncontinued to decline in February, although exports increased \nsignificantly. \n45\nMonetary Policy Review April 2017\nThese trends are expected to persist as the impact of a \nhigher tax burden, low employment growth and weak \nwealth effects take their toll on consumption expenditure. \nIn addition, credit extension by banks to the private sector \ncontinues to grow at low rates, particularly to households, \namid a further decline in the household debt to disposable \nincome ratio. Expenditure will be supported to some extent \nby positive but moderate real income growth.\nFiscal policy as outlined in the recent budget remains \ncommitted to a steady pace of deficit reduction over the next \nthree years. Lower tax revenues relative to budget – partly a \nconsequence of slower economic growth – have resulted in \na shortfall to be filled by a combination of lower expenditure \ngrowth, increased fuel levies and other excise duties, and a \nnumber of tax changes. These include limited compensation \nfor fiscal drag and a higher marginal tax bracket for high-\nincome earners. The tax increases are expected to act as \na drag on household consumption expenditure, particularly \nfor middle and upper income earners.\nInternational oil prices have declined following increased oil \ninventories and weak compliance with the Organization of \nthe Petroleum Exporting Countries (OPEC)-brokered deal \nto restrict output, and an increase in shale gas production \nin the US. Although Brent crude oil prices increased by \nabout 10% in the wake of this agreement, these gains have \nbeen largely reversed, with oil prices back in the region of \nUS$50 per barrel for the past three weeks. The impact on \nthe domestic petrol price will be evident in April, when a \nreduction is expected, despite the 39 cent increase in the \nRoad Accident Fund and fuel levies provided for in the \nFebruary budget. \nSince the previous MPC meeting the inflation outlook has \nimproved. However, the risk to the inflation forecast has \nbeen affected by the reaction of the exchange rate to the \ncurrent elevated levels of political uncertainty. At current \nlevels of around R13.00 against the US dollar, the exchange \nrate is still moderately stronger than the level implied in the \nexchange rate assumption in the forecast. However, the \nrand is likely to react further to unfolding developments until \na greater degree of certainty and confidence is restored. \nThe possibility of significant overshooting of the exchange \nrate in the short run also cannot be ruled out. As always, the \nMPC will attempt to ‘look through’ short term fluctuations \nand focus on longer term trends in its policy settings.\nThe MPC remains concerned about the elevated level of \ninflation expectations. While the near-term reversal was \nnot unexpected, given the deterioration of the short-term \ninflation outlook in January, the longer term expectations \nremain anchored uncomfortably at the upper end of the \ntarget range.\nNot all the inflation risk factors are on the upside. The \ndeterioration in the forecast at the previous meeting was \npartly due to a higher international oil price assumption. \nThis assumption has not been adjusted to reflect the recent \nmarket developments. There is a downside risk to this \nassumption, given the possibility of these more moderate \ntrends persisting. \nA further downside risk comes from electricity price \nincreases, which could turn out to be lower than the \n8.0% currently in the forecast from mid-2017. The final \nprice determination by the energy regulator is yet to be \nannounced. \nOverall, the MPC assesses the risk to the inflation outlook to \nbe moderately on the upside, mainly due to the high degree \nof exchange rate uncertainty.\nThe MPC sees no evidence of significant demand \npressures impacting on inflation. The growth outlook \nremains disappointing, and the MPC is concerned that \nincreased political uncertainty could impact negatively on \nprivate sector investment and household consumption \nexpenditure, and further undermine employment growth. \nThe risks to the growth outlook are therefore assessed to \nbe on the downside.\nIn light of these developments, the MPC has decided to \nkeep the repurchase rate unchanged at 7.0% per annum. \nFive members preferred an unchanged stance and one \nmember preferred a 25 basis point reduction.\nThe MPC is of the view that we may have reached the end \nof the tightening cycle. However, the Committee would like \nto see a more sustained improvement in the inflation outlook \nbefore reducing rates. This assessment may, however, \nchange if the inflation outlook and the risks to the outlook \ndeteriorate. \nMonetary Policy Review April 2017\n46\nSummary of assumptions: Monetary Policy Committee \nmeeting on 30 March 2017*\n1.\t Foreign-sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1.\t Real GDP growth in South Africa’s major trading-partner countries...\n3.3% \n3.2% \n2.9% \n3.1% \n3.3% \n3.3% \n(3.2%)\n(3.0%)\n(2.8%)\n(2.9%) \n(3.1%)\n2.\t International commodity prices in US$ (excluding oil)..........................\n-10.5% \n-18.7% \n-3.6% \n15.5% \n-4.0% \n2.5% \n(9.9%) \n(-4.2%) \n3.\t Brent crude (US$/barrel)........................................................................\n99.2\n52.5 \n43.6\n56.0\n60.0 \n62.0 \n4.\t World food prices (US$).........................................................................\n-3.8% \n-18.7% \n-1.5% \n7.0% \n2.7% \n3.4% \n(-1.6%)\n(6.0%)\n(2.5%)\n \n5.\t International wholesale prices................................................................\n-0.1% \n-3.5% \n-0.8% \n3.0% \n2.0% \n2.0% \n(-1.2%)\n(1.5%)\n(1.2%) \n \n6.\t Real effective exchange rate of the rand (index 2010 = 100)................\n79.17 \n80.08 \n77.08 \n87.25 \n87.00 \n87.00 \n(77.28)\n(84.00) \n(84.00) \n7.\t Real effective exchange rate of the rand...............................................\n-3.3%\n1.1%\n-3.7%\n13.2% \n-0.3% \n0.0% \n(-3.5%)\n(8.7%) \n(0.0%) \n \n2.\t Domestic-sector assumptions\nPercentage changes (unless otherwise indicated)\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1.\t Real government consumption expenditure.....................................\n1.1% \n0.5% \n2.0% \n1.0% \n1.0% \n1.0% \n(1.8%)\n(0.2%)\n(1.6%)\n2. \t Administered prices...........................................................................\n6.7% \n1.7% \n5.3% \n6.7%\n6.7%\n6.4%\n(8.3%)\n(7.6%)\n\t\n– Petrol price.....................................................................................\n7.2% \n-10.7% \n1.6% \n7.8% \n6.9% \n6.0% \n(12.8%) \n(8.9%)\n\t\n– Electricity price..............................................................................\n7.2% \n9.4% \n9.3% \n7.7% \n8.0% \n8.0% \n3.\t Potential growth..................................................................................\n1.7%\n1.5%\n1.3%\n1.4%\n1.5%\n1.6%\n4.\t Repurchase rate (per cent)................................................................\n5.57 \n5.89 \n6.91 \n7.00 \n7.00 \n7.00\nThe figures in brackets represent the previous assumptions of the Monetary Policy Committee.\n*\t For an explanation of foreign-sector assumptions and domestic-sector assumptions, see pages 48 and 49.\n47\nMonetary Policy Review April 2017\nForecast results (annual)\nPer cent\nActual\nForecast\n2014\n2015\n2016\n2017\n2018\n2019\n1. Real gross domestic product (GDP) growth.............................\n1.7% \n1.3% \n0.3% \n1.2% \n1.7% \n2.0% \n(1.6)\n(0.4%)\n(1.1%)\n(1.6%)\n2. Current account as a ratio to nominal GDP..............................\n-5.3 \n-4.4\n-3.3 \n-3.2 \n-3.9 \n-4.0 \n \n(-4.3)\n(-4.1) \n(-3.5) \n(-4.1) \nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nForecast results (quarterly)\nYear-on-year percentage change\nActual\nForecast\n1\n2\n3\n4\n2016\n1\n2\n3\n4\n2017\n1\n2\n3\n4\n2018\n1\n2\n3\n4\n2019\n1. Headline inflation.............................\n6.5\n6.2\n6.0\n6.6\n6.3\n6.4\n5.8 \n5.8\n5.6\n5.9 \n5.2 \n5.4 \n5.5 \n5.5 \n5.4\n5.5\n5.5\n5.5 \n5.5\n5.5 \n(6.6)\n(6.2)\n(6.2)\n(5.9) \n(6.2) \n(5.4) \n(5.4) \n(5.5) \n(5.6) \n(5.5) \n2. Core inflation...................................\n5.5\n5.5\n5.7\n5.7\n5.6 \n5.4 \n5.5 \n5.4 \n5.3 \n5.4 \n5.1 \n5.1\n5.2 \n5.3 \n5.2 \n5.3 \n5.3\n5.3\n5.3 \n5.3 \n(5.7)\n(5.7)\n(5.5)\n(5.3) \n(5.5) \n(5.1)\n(5.2) \n(5.2 )\n(5.3) \n(5.2)\nThe figures in brackets represent the previous forecasts of the Monetary Policy Committee.\nSelected forecast results: Monetary Policy Meeting on 30 March 2017\nMonetary Policy Review April 2017\n48\nForeign-sector assumptions\n1.\t  Trading partner gross domestic product (GDP) growth \nis determined broadly via the International Monetary \nFund’s (IMF) Global Projection Model (GPM), which is \nthen adjusted to aggregate the GDP growth rates of \nSouth Africa’s major trading partners on a trade-weighted \nbasis. Individual projections are done for the four largest \ntrading partners (euro area, China, the United States \n(US) and Japan), while the remaining trading partners \nare grouped into three regions: Emerging Asia (excluding \nChina), Latin America and the Rest of Countries bloc. \nThe assumption takes account of country specific \n‘consensus’ forecasts as well as IMF regional growth \nprospects.\n2.\t The commodity price index is a weighted aggregate \nprice index of the major South African export commodities \nbased on 2010 prices. The composite index represents \nthe total of the individual commodity prices multiplied \nby their smoothed export weights. Commodity price \nprospects generally remain commensurate with global \nliquidity as well as commodity demand/supply pressures \nas reflected by the pace of growth in the trading partner \ncountries.\n3.\t The Brent crude oil price is expressed in US dollars \nper barrel. The assumption incorporates the analysis \nof factors of supply, demand (using global growth \nexpectations) and inventories of oil (of all grades) as \nwell as the expectations of the US Energy Information \nAdministration (EIA), the Organization of the Petroleum \nExporting Countries (OPEC) and Reuters.\n4.\t World food prices are the composite food price index \nof the United Nations Food and Agriculture Organization \n(FAO) in US dollars. It is weighted via average export \nshares and represents the monthly change in the \ninternational prices of a basket of five food commodity \nprice indices (cereals, vegetable oil, dairy, meat and \nsugar). World food price prospects incorporate selected \nglobal institution forecasts for food prices as well as \nimbalances from the anticipated trend in international \nfood supplies relative to expected food demand \npressures.\n5.\t International wholesale prices refers to a weighted \naggregate of the producer price indices of South \nAfrica’s major trading partners, as per the South African \nReserve Bank’s (SARB) official real effective exchange \nrate calculation. Although individual country consumer \nprice index (CPI) forecasts provide a good indication for \ninternational wholesale price pressures, the key drivers \nfor the assumed trend in global wholesale inflation are oil \nand food prices as well as expected demand pressures \nemanating from the trends in the output gaps of the major \ntrading partner countries. Other institutional forecasts \nfor international wholesale prices are also considered.\n6.\t Real effective exchange rate is the nominal effective \nexchange rate of the rand deflated by the producer price \ndifferential between South Africa and an aggregate of \nits trading partner counties (as reflected in the SARB \nQuarterly Bulletin). Although the nominal rate is a \nweighted average of South Africa’s 20 largest trading \npartners, particular focus is placed on the rand outlook \nagainst the US dollar, euro, Chinese yuan, UK pound \nand the Japanese yen. The assumed trend in the real \neffective exchange rate remains constant from the latest \navailable quarterly average over the projection period. \nHowever, due to the time delay for the calculation of \nthe real effective exchange rate, the most recent trend \nin the nominal effective exchange rate is adjusted with \nthe assumed trend for the domestic and foreign price \ndifferential for the current quarter. This may result in a \ntechnical annual adjustment over the current and next \nforecast year that differs from zero.\n49\nMonetary Policy Review April 2017\nDomestic-sector assumptions\n1.\t Government consumption expenditure (real) is broadly \nbased on the most recent National Treasury budget \nprojections. However, since these projections take place \ntwice yearly, the most recent actual data points also play \na significant role in the assumptions process.\n2.\t Administered prices represent the total of the regulated \nand non-regulated administered prices as reflected by \nStatistics South Africa (Stats SA). Their weight in the \nCPI basket is 18.48% (16.17% from January 2017) and \nthe assumed trend over the forecast period is largely \ndetermined by the expected pace of growth in petrol \nprices, electricity tariffs, school fees, water and other \nmunicipal assessment rates.\n\t\nPetrol price is an administered price and comprises \n5.68% (4.58% from January 2017) of the CPI basket. The \nbasic fuel price (which currently accounts for roughly \nhalf the petrol price), is determined by the exchange rate \nand the price of petrol quoted in US dollars at refined \npetroleum centres in the Mediterranean area, the Arab \nGulf and Singapore. The remainder of the petrol price \nis made up of wholesale and retail margins as well as \nthe fuel levy and contributions to the road accident fund \n(RAF). Since most taxes and retail margins are changed \nonce a year, the assumed trajectory of the petrol price \nlargely reflects the anticipated trend in oil prices and the \nexchange rate.\n\t\nElectricity price is an administered price measured at \nthe municipal level with a weight of 4.13% (3.75% from \nJanuary 2017) in the headline CPI basket. Electricity \nprice adjustments generally take place in the months of \nJuly and August of each year, and the assumed pace of \nincrease over the forecast period reflects the multi-year \nprice determination (MYPD) agreement between Eskom \nand the National Energy Regulator of South Africa \n(NERSA) with a slight adjustment for measurement at \nmunicipal level.\n3.\t The pace of potential growth is derived from the \nSARB’s semi-structural potential output model. The \nmeasurement accounts for the impact of the financial \ncycle on real economic activity and introduces economic \nstructure via the relationship between potential output \nand capacity utilisation in the manufacturing sector \n(SARB, Working Paper Series, WP/14/08).\n4.\t The repurchase rate (repo rate) is the official monetary \npolicy instrument and represents the interest rate at \nwhich banks borrow money from the SARB. Although \nthe rate is held constant over the forecast period, this \nassumption is relaxed in alternative scenarios where for \ninstance the policy rate responds to deviations of output \nfrom its potential and the gap between future inflation \nand the inflation target, that is, via a stylised ‘Taylor rule’; \none that is based on market expectations of the future \npath of the policy rate; and other paths as requested.\nMonetary Policy Review April 2017\n50\nGlossary\nAdvanced economies: Advanced economies are countries \nwith high levels of gross domestic product per capita. These \ncountries are sometimes described as industrialised. With \nfurther growth, however, they have tended to diversify, with \nparticular emphasis on services sectors.\nBalance of payments: This is a record of transactions \nbetween the home country and the rest of the world over a \nspecific period of time. It includes the current and financial \naccounts. See also ‘current account’ below.\nBudget deficit: A budget deficit indicates the extent to which \ngovernment expenditure exceeds government revenue (a \nbudget surplus occurs when revenue exceeds expenditure).\nBusiness and consumer confidence: These are economic \nindicators that measure the state of optimism about the \neconomy and its prospects among business managers and \nconsumers.\nCommodity prices: Commodities can refer to energy, \nagriculture, metals and minerals. Major South African-\nproduced commodities include platinum and gold.\nConsumer price index (CPI): The CPI provides an indication \nof aggregate price changes in the domestic economy. The \nindex is calculated using a number of categories forming \na representative set of goods and services bought by \nconsumers.\nCore inflation: Core generally refers to underlying inflation, \nexcluding volatile elements (e.g. food and energy prices). \nThe SARB’s forecasts and discussions refer to headline CPI \nexcluding food, non-alcoholic beverages, fuel and electricity \nprices.\nCrude oil price: This is the US dollar price per barrel of \nunrefined oil (Brent crude refers to unrefined North Sea oil).\nCurrent account: The current account of the balance of \npayments consists of net exports (exports less imports) \nin the trade account, as well as the services, income and \ncurrent transfer account.\nEmerging markets: Emerging markets are countries with \nlow to middle income per capita. They are advancing rapidly \nand are integrating with global (product and capital) markets.\nExchange rate depreciation (appreciation): Exchange rate \ndepreciation (appreciation) refers to a decrease (increase) in \nthe value of a currency relative to another currency.\nExchange rate pass-through: This is the effect of exchange \nrate changes on domestic inflation (i.e. the percentage \nchange in domestic CPI due to a change in the exchange \nrate). Changes in the exchange rate affect import prices, \nwhich in turn affect domestic consumer prices and inflation.\nFlexible inflation targeting: This refers to inflation-targeting \nregimes that consider changes in inflation and other variables \naffecting the real economy in the short term. Under strict \ninflation targeting only inflation matters, but flexible inflation-\ntargeting takes into account other variables, such as output.\nForecast horizon: This is the future period over which the \nSARB generates its forecasts, typically between two and \nthree years.\nGross domestic product (GDP): GDP is the total market \nvalue of all goods and services produced in a country. It \nincludes total consumption expenditure, capital formation, \ngovernment consumption expenditure and the value of \nexports less the value of imports.\nGross fixed capital formation (investment): The value of \nacquisitions of capital goods (e.g. machinery, equipment \nand buildings) by firms, adjusted for disposals, constitutes \ngross fixed capital formation.\nHeadline consumer price index (CPI): Headline CPI refers \nto CPI for all urban areas that is released monthly by \nStatistics South Africa. Headline CPI is a measure of price \nlevels in all urban areas. The 12-month percentage change \nin headline CPI is referred to as ‘headline CPI inflation’ and \nreflects changes in the cost of living. This is the official \ninflation measure for South Africa.\nHousehold consumption: This is the amount of money \nspent by households on consumer goods and services.\nInflation (growth) outlook: This outlook refers to the evolution \nof future inflation (growth) over the forecast horizon.\nInflation targeting: This is a monetary policy framework \nused by central banks to steer actual inflation towards an \ninflation target level or range.\nMedian: This is a statistical term used to describe the \nobserved number that separates ordered observations in half.\nMonetary policy normalisation: This refers to the unwinding \nof unusually accommodative monetary policies. It could \nalso mean adjusting the economy’s policy rate towards its \nreal neutral policy rate.\nNominal effective exchange rate (NEER): A NEER is an \nindex that expresses the value of a country’s currency \nrelative to a basket of other (trading partner) currencies. An \nincrease (decrease) in the effective exchange rate indicates \na strengthening (weakening) of the domestic currency with \nrespect to the selected basket of currencies. The weighted \naverage exchange rate of the rand is calculated against \n20 currencies. The weights of the five major currencies \nare as follows: euro (29.26%), Chinese yuan (20.54%), \nUS dollar (13.72%), Japanese yen (6.03%) and the British \npound (5.82%). Index: 2010 = 100. See ‘Real effective \nexchange rate’.\n51\nMonetary Policy Review April 2017\nOutput gap/potential growth: Potential growth is the \nrate of GDP growth that could theoretically be achieved \nif all productive assets in the economy were employed \nin a stable inflation environment. The output gap is the \ndifference between actual growth and potential growth, \nwhich accumulates over time. If this is negative, then the \neconomy is viewed to be underperforming and demand \npressures on inflation are low. If the output gap is positive, \nthe economy is viewed to be overheating and demand \npressures are inflationary.\nProducer price index (PPI): This index measures changes \nin the prices of goods at the factory gate. Stats SA currently \nproduces five different indices that measure price changes \nat different stages of production. Headline PPI is the index \nfor final manufactured goods. PPI measures indicate \npotential pressure on consumer prices.\nProductivity: Productivity indicates the amount of goods \nand services produced in relation to the resources utilised \nin the form of labour and capital.\nPurchasing power parity (PPP): PPP is based on the law \nof one price, assuming that in the long run, exchange rates \nwill adjust so that purchasing power across countries is \napproximately the same. It is often used to make cross-\ncountry comparisons without the distortionary impact of \nvolatile spot exchange rates.\nReal effective exchange rate (REER): The REER is the \nNEER adjusted for inflation differentials between South \nAfrica and its main trading partners. See ‘Nominal effective \nexchange rate’.\nRepurchase (repo) rate: This is the policy rate that is set \nby the Monetary Policy Committee (MPC). It is the rate that \ncommercial banks pay to borrow money from the SARB.\nReal repo rate: This is the nominal repo rate, as set by the \nMPC, adjusted for expected inflation.\nTaper tantrum: The term ‘taper tantrum’ is widely used \nto describe the strong reaction of global financial markets \nto comments by the US Federal Reserve (Fed) chairman \nin May 2013 that the Fed would likely start to reduce (or \n‘taper’) the pace of its asset purchases later that year.\nTerms of trade: This refers to the ratio of export prices to \nimport prices.\nUnit labour costs: A unit labour cost is the labour cost to \nproduce one ‘unit’ of output. This is calculated as the total \nwages and salaries in the non-agricultural sector divided by \nthe real value added at basic prices in the non-agricultural \nsector of the economy.\nMonetary Policy Review April 2017\n52\nAbbreviations\nAFE\t\naverage forecast error\nAlsi\t\nAll-Share Index\nBER\t\nBureau for Economic Research\nBIS\t\nBank for International Settlements\nBRICS\t\nBrazil, Russia, India, China and South Africa\nCAD\t\ncurrent account deficit\nCDS\t\ncredit default swap\nCPI\t\nconsumer price index\nCPIX\t\nconsumer price index for metropolitan \nand other urban areas, excluding the \ninterest cost on mortgage bonds\nECB\t\nEuropean Central Bank\nEIA\t\nEnergy Information Administration\nELMI\t\nEmerging Local Markets Index\nEMBI+\t\nJPMorgan Emerging Market Bond Index Plus\nEU\t\nEuropean Union\nFAO\t\nFood and Agriculture Organization\nFNB\t\nFirst National Bank\nFed\t\nUnited States Federal Reserve\nFOMC\t\nFederal Open Market Committee\nG3\t\nGroup of Three\nGDP\t\ngross domestic product\nIMF\t\nInternational Monetary Fund\nMPC\t\nMonetary Policy Committee\nMPR\t\nMonetary Policy Review\nMTBPS\t\nMedium Term Budget Policy Statement\nMYPD\t\nmulti-year price determination\nNAB\t\nnon-alcoholic beverages\nNERSA\t\nNational Energy Regulator of South Africa\nOPEC\t\nOrganization of the Petroleum \nExporting Countries\nPCE\t\nPersonal Consumption Expenditure\nPMI\t\nPurchasing Managers’ Index\nPPI\t\nproducer price index\nRCA\t\nRegulatory Clearing Account\nREER\t\nreal effective exchange rate \nrepo (rate)\t repurchase (rate)\nRMB\t\nRand Merchant Bank\nRMSE\t\nroot mean square error\nS&P\t\nStandard and Poor’s\nSACU\t\nSouthern African Customs Union\nSARB\t\nSouth African Reserve Bank\nSOCs\t\nstate-owned companies\nStats SA\t\nStatistics South Africa\nTPP\t\nTrans-Pacific Partnership\nUK\t\nUnited Kingdom\nULC\t\nunit labour cost\nUS\t\nUnited States\nWGBI\t\nWorld Government Bond Index", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monetary_Policy_Reports/MPRAPR2017.pdf"}
{"doc_id": "5871d02aa7e73b831c400b7e0cdefedc", "text": "About us\nWhat we do\nPublications\nNewsroom\nContact us\nSARB POLICY RATE 6.75% \n\n24 Apr 2026\n\nCPI 3.1% \n\nMar 2026\n\nPPI 1.8% \n\nFeb 2026\n\nPRIME 10.25% \n\n24 Apr 2026\n\nR2030\n\t\n\nR209\n\t\n\nSABOR\n\t\n\nZARONIA\n\t\nZAR/USD\n\t\n16.6276\n\nZAR/GBP\n\t\n22.4116\n\nZAR/EUR\n\t\n19.4385\n\nZAR/JPY\n\t\n0.1041\nHome Publications\n \n\nPUBLICATION DETAILS\n\nTitle :\nLesetja Kganyago | Advancing Cross-Border Payments\nPublished Date:\n2025-10-23\nLast Modified Date:\n2025-10-23, 12:28\nCategory:\nWhat's New | Speeches > Speeches by Governors | Media > Media Releases\n\nKeynote address by Lesetja Kganyago, Governor of the South African Reserve Bank, at the Advancing Cross-Border Payments Conference, Pretoria.\n\nAttachments:\nLesetja Kganyago | Advancing Cross-Border Payments\nBack\nQuick links\nFrequently asked questions\nGold Coins Purchased from the Public\nCareers\nInternet banking\nForms\nExtranets\nWhistleblowing\nPromotion of Access to Information Manual\nSARB Group Privacy Notice\nProcurement\nFraud and scams\nRSS feed subscription\nDisclaimer\nSitemap\nCookie policy\nContact\n\nTo contact us, click here\n\nTelephone: 0861 127 272 \n\n370 Helen Joseph Street,\n\nPretoria, 0002\n\nP O Box 427,\n\nPretoria, 0001\n\nDownload app\nQuarterly Bulletin\nSocial Media\n \nSupported Browsers\n \nThe South African Reserve Bank © Copyright 2020.", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-04-27", "url": "https://www.resbank.co.za/en/home/publications/publication-detail-pages/speeches/speeches-by-governors/2025/kganyago-cross-border-payments"}
{"doc_id": "75dbce3f30d21bdf233833fcb95ab75e", "text": "1 \n \n \nSouth African Reserve Bank \n \nPRESS STATEMENT \nEMBARGO DELIVERY \n23 September 2015 \n \n \n \nSTATEMENT OF THE MONETARY POLICY COMMITTEE \n \nIssued by Lesetja Kganyago, Governor of the South African Reserve Bank \n \nSince the previous meeting of the Monetary Policy Committee, risks to the global \neconomic outlook have increased against the backdrop of a slowing Chinese \neconomy. These risks, in conjunction with continued capital outflows from emerging \nmarkets, have resulted in heightened global financial market volatility and \ncontributed to the decision by the US Fed to maintain its current monetary policy \nstance. This delay has added uncertainty to an already volatile global setting. \n \nThe domestic economic outlook has deteriorated following the surprise contraction in \nthe second quarter of the year. At the same time, the rand experienced a further \nsignificant depreciation in response to domestic and global developments, \nintensifying the upside risks to the inflation outlook. The combination of sharply \nslowing growth and rising inflation compounds the dilemma facing monetary policy. \n \nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all \nurban areas measured 5,0 per cent and 4,6 per cent in July and August respectively. \n2 \n \nThe decrease in the inflation in August was mainly the result of changes in the \nhousing and utilities and transport indices. Having reached a recent high of 5,8 per \ncent in January and February, the Bank’s measure of core inflation, which excludes \nfood, fuel and electricity, measured 5,3 per cent, down from 5,4 per cent in July. \n \nProducer price inflation for final manufactured goods increased from 3,3 per cent in \nJuly to 3,4 per cent in August, down from 3,7 per cent in June. The upward trend is \nexpected to continue in the coming months as the impact of higher agricultural crop \nand food prices becomes more apparent. \nThe inflation forecast of the Bank has changed marginally, with a near term \nimprovement and a slight medium term deterioration. Inflation is now expected to \naverage 4,7 per cent in 2015, from 5,0 per cent previously, and then to breach the \nupper end of the target range in the first quarter of 2016, with a peak of 6,7 per cent \n(previously 6,9 per cent). Inflation is then expected to be around the top end of the \ntarget range with a further temporary breach of 6,2 per cent in the final quarter. This \nbreach is mainly due to base effects from the lower starting point for the petrol price \nin the fourth quarter of this year. The forecast for 2017 follows a slow downward \ntrend, with inflation measuring 5,7 per cent in the final quarter. The changes in this \ntrajectory are mainly due to the more depreciated starting point for the real effective \nexchange rate, which is offset to some extent by a lower international oil price \nassumption. \nThe forecast for core inflation is marginally higher in the later quarters, but with an \nunchanged expected average of 5,4 per cent in 2016, and slightly higher at 5,3 per \ncent in 2017, up from 5,2 per cent. \n3 \n \nInflation expectations as measured by the survey conducted in the third quarter by \nthe Bureau for Economic Research are more or less unchanged and remain at the \nupper end of the target range. Average inflation expectations for 2016 are \nunchanged at 6,1 per cent, and reverted to 5,9 per cent for 2017, following the \ndecline to 5,8 per cent in the previous quarter. As before, there were marked \ndifferences between the different categories of respondents, with the 2017 \nexpectations averaging 5,4 per cent for financial analysts, 6,5 per cent for business \npeople and 5,9 per cent for trade unionists. Average 5-year inflation expectations \ndeclined from 6,0 per cent to 5,9 per cent, but those of business people reverted \nback to their 2014 level of 6,5 per cent, from 6,3 per cent previously. \nMedian annual inflation expectations of market analysts as reflected in the Reuters \nEconometer survey are almost identical to those of the Bank’s forecast and more or \nless unchanged since the previous survey. The breakeven inflation rates derived \nfrom the inflation-linked bonds have increased moderately since the previous \nmeeting, and have remained above the upper end of the target range across all \nmaturities. \nThe global economic outlook has become more uncertain since the previous meeting \nof the MPC driven in part by the strong financial market reactions to the deteriorating \noutlook for the Chinese economy. Although the growth prospects in the US remain \npositive, they have been clouded by the growing concerns about possible spillbacks \nfrom a slowdown in emerging markets, particularly in China, as well as from the \nimpact of the strong dollar. Euro area growth moderated in the second quarter and \nremains relatively subdued, while real output in Japan declined. \n4 \n \nGrowing concerns of the risk of an abrupt slowdown in the Chinese economy have \nbeen fuelled by excess capacity in the real estate market and in the industrial sectors \nof the economy. The recent equity market correction, the surprise devaluation of the \nrenminbi, and the uncertain policy responses have added to these concerns. While \nto date the actual slowdown has been relatively moderate, a hard landing could have \na severe impact on global markets, and on commodity prices in particular. \nThese developments have had an adverse effect on the outlook for commodity \nproducers, particularly emerging market economies, but Asian economies with close \ntrade links with China have also been affected. The deteriorating terms of trade have \ncompounded the impact of continued capital flows from emerging markets in \nanticipation of US monetary policy normalisation. Consensus growth forecasts for \nmost Latin American and Asian economies have accordingly been revised \ndownwards. \nLower commodity prices have contributed to a more benign global inflation \nenvironment, although some emerging markets are experiencing inflationary \npressures through depreciating currencies. In the United States, concerns about the \npossible restraining effect of the appreciating dollar on domestic economic activity \nand inflation, coupled with global financial market volatility and the risks of a sharp \nslowdown in emerging markets were key factors in the decision to delay the \ncommencement of monetary policy normalisation. The ECB has indicated that \nfurther monetary easing is being contemplated while developments in Japan suggest \nthat monetary policies will remain highly accommodative for some time. \nDomestic financial markets, including bond and equity markets, have not been \nimmune to the turmoil in global markets. Although the rand has been one of the more \n5 \n \nvolatile currencies, having fluctuated in a range of between around R12,60 and just \nover R14,00 against the US dollar since the previous MPC meeting, its trend \ndepreciation over the year has not been significantly different to those of other \ncommodity currencies and a number of other peer emerging economies. Since the \nprevious meeting of the MPC, the rand has depreciated by about 9 per cent against \nthe US dollar, by about 10 per cent against the euro and by about 8 per cent on a \ntrade-weighted basis. \nThe rand was negatively impacted by developments in China, continued speculation \nregarding the timing of US policy “take-off”, and the weaker-than-expected GDP \ngrowth outcome. The rand reacted positively to the US decision to maintain its policy \nstance, as well as to the narrowing deficit on the current account of the balance of \npayments. \nThe rand exchange rate remains an upside risk to the inflation outlook. As noted in \nprevious statements, a key uncertainty for the MPC is the extent to which the US \npolicy normalisation is already priced into the currency. The fact that the rand \nappreciated in response to the Fed decision suggests that some depreciation is likely \nwhen US rates are increased. However, the extent is uncertain, with the possibility of \na temporary overshoot in a highly volatile environment. \nA further uncertainty relates to the sustainability of the contraction in the current \naccount of the balance of payments in the second quarter when a deficit of 3,1 per \ncent of GDP was recorded. While this narrowing is attributed in part to temporary \nfactors, there appears to be some evidence that both export and import volumes are \nresponding to the depreciation of the rand and the weaker economy. However, the \nBank expects this process of adjustment to remain slow, with the export response \n6 \n \ninhibited by a number of factors including headwinds from the slowing global \neconomy, electricity supply constraints and declining tourism receipts. \nThe domestic economic growth outlook deteriorated compared with the previous \nforecast. This follows the surprise annualised contraction of 1,3 per cent in the \nsecond quarter of this year. While the MPC is of the view that a further contraction is \nunlikely in the third quarter, the outlook remains relatively weak amid declining \nbusiness and consumer confidence. The Bank’s forecast for growth has been \nrevised down by half a percentage point in each year of the forecast period, to 1,5 \nper cent in 2015, and to 1,6 per cent and 2,1 per cent in the subsequent two years. \nThe Bank’s estimate of potential output for 2015 has also been revised down to 1,8 \nper cent. The risks to the growth outlook are now seen to be more or less balanced. \nThis weak outlook is consistent with the Bank’s leading indicator of economic activity \nwhich has exhibited a more pronounced downward trend in recent months. \nThe growth disappointment was particularly evident in the goods-producing sectors \nof the economy, with contractions in agriculture, mining and manufacturing, although \ngrowth in the services sectors also moderated. The agricultural sector remains \nconstrained by the continuing drought, and although mining output increased in July, \nprospects are being negatively affected by weak commodity prices, lower global \ndemand and the risk of industrial action in parts of the sector. Manufacturing output \nalso increased marginally in July but the decline in the Barclays PMI to below the \nneutral 50 level in August, and a further decline in capacity utilisation suggest a \nchallenging outlook. \nGrowth in gross fixed capital formation moderated to 1,0 per cent in the second \nquarter, with general government providing the only notable increase. The weak \n7 \n \ncontribution from the private sector is reflected in the further sharp decline in the \nRMB/BER Business Confidence Index to its lowest level since 2011. The only area \nwhere private sector investment increased markedly was with respect to energy-\ngeneration projects. This disappointing scenario does not bode well for employment \ngrowth, despite the decline in the official unemployment rate to 25,0 per cent in the \nsecond quarter, mainly due to growth in informal sector employment. \nGrowth in consumption expenditure by households also reflects the subdued \ndemand conditions in the economy, with a moderation in growth to 1,2 per cent in \nthe second quarter, with some resilience only evident in semi-durable goods \nconsumption. Retail sales grew only marginally in July, amid a sharp decline in the \nbusiness confidence of retailers. The weakness in durable goods sales is evident in \nthe lower new vehicles sales in August, particularly commercial vehicles. \nConsumers are expected to remain constrained against the backdrop of slow \nemployment growth, declining disposable income growth, and rising inflation. \nFurthermore, the pace of credit extension to households, which remains negative in \nreal terms, is expected to be impacted further by the tighter affordability criteria \nfollowing the implementation of amendments to the National Credit Regulations. At \nthe same time, household deleveraging has continued with the debt to disposable \nincome ratio moderating further to 77,8 per cent in the second quarter of 2015, its \nlowest level since 2006. Credit extension to the corporate sector, by contrast has \nbeen buoyant, particularly with respect to general loans and mortgage advances. \nNo new data concerning wage and unit labour cost developments have become \navailable since the previous meeting of the MPC, but trends are expected to be \n8 \n \nrelatively unchanged, with average nominal wage growth in excess of inflation \ncontributing to the persistence of inflation at higher levels. \nAlthough food price developments have been relatively benign, they remain a \nconcern to the MPC with the expectation of an acceleration in the coming months as \nthe impact of the drought feeds through to consumer prices. This is despite the \nfavourable impact of falling prices at the global level. Domestic food price inflation at \nthe consumer level appears to have reached a low point of 4,3 per cent in June, \nincreasing marginally to 4,4 per cent in July and August. The pressures are expected \nto come from the drought-induced increases in agricultural price inflation for cereals \nand crops which increased at a year-on-year rate of 38,7 per cent in July. \nThe recent decline in international oil prices has provided some respite to inflation \npressures, with the price of Brent crude oil currently trading at around US$10 per \nbarrel lower than at the time of the previous MPC meeting. The current global \noversupply of crude oil coupled with the slowdown in China is expected to keep oil \nprices contained in the short to medium term. The MPC revised down its oil price \nassumption by between US$3 and US$4 per barrel in each of the coming years. \nHowever, the Committee assesses the risk to the oil price assumption to be on the \ndownside, particularly in the short term. The domestic petrol price declined by a \ncumulative R1,20 per litre in August and September, and current trends suggest that \nno significant change is likely in October, with the weaker rand offsetting the impact \nof the falling dollar price of oil. \nThe inflation outlook remains a concern for the Monetary Policy Committee, with the \nrisks to the forecast assessed to be on the upside. Although two breaches of the \ntarget are now expected - in the first and fourth quarters of next year - they are \n9 \n \nexpected to be temporary and primarily the result of base effects from lower petrol \nprices four quarters previously. \nNevertheless, the Monetary Policy Committee is concerned that the longer-term \ninflation trajectory remains uncomfortably close to the upper end of the target range, \nand given the upside risks to inflation, the probability of a more extended breach \nthan currently forecast is relatively high. A sustained breach of the target range has \nthe danger that it could impact negatively on inflation expectations which are \ncurrently sticky at the upper end of the target range. \nThe MPC is also concerned about domestic growth prospects, with the economy \ncontracting in the second quarter. Growth is expected to remain constrained by \nglobal developments and associated uncertainty and volatility, low business and \nconsumer confidence and electricity supply shortages. Domestic inflation is not \ndriven by demand factors, and the outlook for household consumption expenditure \nhas deteriorated. However, we have to be mindful of the second-round effects of \nsupply-side shocks on inflation. \nThere are a number of upside risks to the inflation outlook, the primary one being the \nexchange rate which has already depreciated significantly against the advanced \neconomy currencies in response to global developments, and is still likely to react \nfurther to the commencement of US monetary policy tightening. A further risk \nemanates from possible higher multi-year increases in electricity tariffs from the \nmiddle of next year. \nDownside risks to the inflation outlook include international oil prices should they be \nsustained at current levels. In addition, weak domestic demand may continue to \n10 \n \nconstrain pricing power in the economy. The Committee nevertheless assesses the \noverall risks to the inflation outlook to be on the upside. \nAs noted in previous statements, the MPC has to achieve a fine balance between \nrealising its core mandate and not undermining short term growth unduly. The MPC \nhas unanimously decided to keep the repurchase rate unchanged for now at 6,0 per \ncent per annum. \nThe MPC remains on a gradual policy normalisation path. The Committee will \ncontinue to monitor developments closely, and will not hesitate to act appropriately \nshould the risks to the inflation outlook deteriorate materially. As before, any future \nmoves remain highly data dependent. \n \nLesetja Kganyago \n \nGOVERNOR \n \nContact person: \nCandice Jeffreys \n+27 12 313 4209 \nCandice.Jeffreys@resbank.co.za", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/MPC_Statements/MPC-Statement-23-September-2015-.pdf"}
{"doc_id": "36eb1f62f608166799a03258b31ed9e4", "text": "i \n \nx \n \nJANUARY 2026 \n \ni \nTABLE OF CONTENTS \n \nOVERVIEW. ................................................................................................................................. 1 \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ........................................... 1 \nMONETARY DEVELOPMENTS .............................................................................................. 6 \nSTOCK MARKET DEVELOPMENTS ..................................................................................... 7 \nZimbabwe Stock Exchange (ZSE) ........................................................................................... 7 \nVictoria Falls Stock Exchange (VFEX) ................................................................................... 8 \nNATIONAL PAYMENTS SYSTEM .......................................................................................... 8 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ............................................... 9 \nMobile and Internet-Based Transactions ................................................................................ 9 \nCash Transactions ..................................................................................................................... 9 \nCard-Based Transactions ......................................................................................................... 9 \nINFLATION OUTTURN ............................................................................................................. 9 \nMonthly Inflation ...................................................................................................................... 9 \nUS$ Annual Inflation Developments ..................................................................................... 10 \nZiG Annual Inflation Developments ..................................................................................... 10 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1 \n \n \nOVERVIEW \nThe ZWG monthly and year on year inflation \nrate declined to 0.0% and 4.1% respectively, \nreflecting continued price stability. \nBroad \nmoney \n(M3) \nstock \nstood \nat \nZiG108,915.12 million during the month under \nreview. \nCapital markets began the year on a positive \nnote, with both the Zimbabwe Stock Exchange \n(ZSE) and the Victoria Falls Stock Exchange \nrecording a bullish trajectory. \nNational payment systems moderated, as \ntransactional values and volumes declined by \n25% to ZiG206.98 billion and 10% 75.85 \nmillion, respectively. \nInternational average commodity prices for all \nthe selected commodities firmed during the \nmonth under analysis. \nMerchandise exports and imports declined to \nUS$969.4 million and US$855.7 million, \nrespectively, resulting a trade surplus of \nUS$113.7 million in January 2026. \n \nINTERNATIONAL COMMODITY \nPRICE DEVELOPMENTS \nDuring \nthe \nmonth \nof \nJanuary \n2026, \ninternational average prices for all the selected \ncommodities firmed amid stronger investment \ndemand, heightened geopolitical tensions and \nsupply constraints. \n \nTable 1 shows the developments in prices of \nselected commodities for the month under \nreview. \n \nTable 1: Average International Commodity \nPrices for December 2025 and January 2026 \nCommodity \n \n \n \nDec-25 \nJan-26 \nMonthly \nchanges \n(%) \nGold \nUS$/oz \n4,308.96 \n4,763.07 \n10.54 \nPlatinum \nUS$/oz \n1,887.12 \n2,421.00 \n28.29 \nPalladium \nUS$/oz \n1,590.24 \n1,844.33 \n15.98 \nCopper \nUS$/t \n11,762.67 13,061.29 11.04 \nNickel \nUS$/t \n15,067.19 18,019.10 19.59 \nBrent \nCrude \noil \nUS$/bl \n61.66 \n64.04 \n3.85 \nLithium \nUS$/t \n10,905.71 17,641.90 61.77 \nSource: Bloomberg, 2026 \n \nGold \nGold prices rose by 10.54% to US$4,763.07 per \nounce in January 2026, up from an average of \nUS$4,308.96 per ounce recorded in December \n2025. Escalating geopolitical uncertainties, \nincluding U.S. military strikes on Venezuela \nand broader global tensions, boosted demand \nfor gold as a safe-haven asset. Additionally, \ntrade tensions between the United States and \nEurope escalated, pushing prices higher. \n \nPlatinum \nIn the reporting month, platinum prices \naveraged US$2,421.00 per ounce, an increase \nof 28.29%, from US$1,887.12 per ounce \nrecorded in the prior month. The safe-haven \ndemand pushed platinum prices to new highs. \nThe price rally mirrored platinum’s upward \ntrajectory as investors increasingly sought \nprecious \nmetals, \namid \nbroader \nmarket \nuncertainty. \n \nPalladium \nPalladium prices firmed by 15.98% to \nUS$1,844.33 per ounce in the month under \nreview, from US$1,590.24 per ounce recorded \nin December 2025. Rising global automotive \n \n \n2 \n \n \nactivity and regulatory drivers supporting \ninternal combustion engines, sustained demand \namong carmakers, pushing prices higher. \nStronger expectations of robust industrial \ndemand, against a background of tighter supply \nconditions, supported the uptick in prices. \n \nFigure 1 shows the price movements from \nJanuary 2025 to January 2026. \n \nFigure 1: Monthly Precious Metal Prices \n(US$ per Ounce): January 2025 – January \n2026 \n \nSource: Bloomberg, 2026 \n \nBrent Crude Oil \nIn January 2026, Brent crude oil prices \naveraged US$64.04 per barrel, an increase of \n3.85% from US$61.66 per barrel recorded in \nthe preceding month. Prices rose amid \nheightened geopolitical tensions in the Middle \nEast. \nRenewed \nwarnings \nand \nmilitary \nmovements involving the U.S. and Iran raised \nconcerns among traders that oil exports from \nthe key producer could be disrupted. \n \nFigure 2 depicts the Brent Crude Oil price \nmovements from January 2025 to January \n2026. \n \nFigure \n2: \nBrent \nCrude \nOil \nPrices \n(US$/Barrel) January 2025 to January 2026 \nSource: Bloomberg, 2026 \n \nCopper \nDuring the month under review, copper prices \nincreased by 11.04%, to US$13,061.29 per \ntonne, from US$11,762.67 per tonne recorded \nin December 2025. Production outages at key \nmines in Chile and Peru, and the continued loss \nof output from Cobre Panamá, combined with \nlow exchange inventories, tightened the \nphysical market supply, lifting copper prices as \nbuyers competed for scarce metal. Speculators \nextended their buying spree amid expectations \nof strong future demand, thereby supporting an \nuptick in copper prices. \n \nNickel \nNickel prices strengthened by 19.59% to \nUS$18,019.10 per tonne in January 2026, from \nUS$15,067.19 per tonne recorded in the \nprevious month. Prices rose amid growing \nmarket speculation that Indonesia, the world’s \nlargest nickel producer, would reduce nickel \nore output in 2026. Announcements and policy \nsignals about tighter production quotas led \ntraders to anticipate a future supply squeeze, \nboosting prices. \n2,000\n2,500\n3,000\n3,500\n4,000\n4,500\n5,000\n800\n1,000\n1,200\n1,400\n1,600\n1,800\n2,000\n2,200\n2,400\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nUS$/ounce\nUS$/ounce\nPlatinum\nPalladium\nGold (RHS)\n55\n60\n65\n70\n75\n80\n85\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\n \n \n3 \n \n \n \nThe base metal price movements from January \n2025 to January 2026 are shown in Figure 3. \n \nFigure 3: Base Metal Prices (US$/tonne): \nJanuary 2025 to January 2026 \n \nSource: Bloomberg 2026 \n \nLithium \nLithium prices substantially increased by \n61.77% to US$17,641.90 per tonne during the \nmonth under review, from US$10,905.71 per \ntonne recorded in December 2025. Supply \ntightening \nconcerns, \nunderpinned \nby \nproduction halts at key mines and regulatory \nactions aimed at curbing overcapacity in \nChina’s lithium sector, helped reduce available \nsupply relative to demand. These disruptions \nsupported price increases as traders and buyers \nadjusted to tighter near-term availability. In \naddition, Chinese regulators’ announcement to \nphase out the value-added tax (VAT), export \nrebates on batteries and related products \nspurred manufacturers and traders to accelerate \nlithium purchases ahead of time, sharply \nboosting short-term demand and pushing \nlithium prices higher. \n \nThe changes in lithium prices for the period \nfrom January 2025 to January 2026 are \nillustrated in Figure 4. \n \nFigure 4: Lithium Prices (US$/tonne) \nJanuary 2025 to January 2026 \n \nSource: London Metal Exchange, 2026 \n \nMerchandise Trade Developments \nZimbabwe’s total merchandise trade decreased \nby 10.7% to US$1,825.1 million in January \n2026, from US$2,043.2 million recorded in \nDecember 2025. A decline in both exports and \nimports fuelled the decrease in merchandise \ntrade during the month under review. Total \nmerchandise trade increased by 32.1% on an \nannual basis, from US$1.38 billion recorded in \nJanuary 2025. \n \nMerchandise Exports \nThe country’s merchandise exports amounted \nto US$969.4 million in the month under \nanalysis, a 15.1% decrease from US$1,141.7 \nmillion recorded in December 2025. The \ndecline was due to falling exports of gold, \nPlatinum Group Metals (PGMs), and other \nmineral products. Gold exports retreated by \n8.6% to US$493.0 million in the reporting \nmonth, from US$539.6 million in the previous \nmonth, in line with the decline in gold \n8,000\n13,000\n18,000\n23,000\n28,000\n33,000\n38,000\n4,500\n5,500\n6,500\n7,500\n8,500\n9,500\n10,500\n11,500\n12,500\n13,500\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nUS$/tonne\nUS$/tonne\nCopper\nNickel (RHS)\n7,000\n8,500\n10,000\n11,500\n13,000\n14,500\n16,000\n17,500\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\n \n \n4 \n \n \nproduction in January 2026. Similarly, PGMs \nexports fell by 50.1% to US$104.4 million, \nfrom US$209.2 million recorded in the \nprevious month. \n \nOn a year-on-year basis, exports in January \n2026 were 48.5% higher than the US$652.6 \nmillion recorded in the corresponding month in \n2025. Figure 5 illustrates the developments in \nthe country’s merchandise exports for the \nperiod from 2025 to 2026. \n \nFigure 5: Monthly Merchandise Exports \n(US$ millions): 2025 and 2026 \n \nSource: ZIMSTAT, 2026 \n \nExports by Commodity \nThe country’s export structure remains highly \nconcentrated in primary commodities, with \ngold contributing 50.9% of total export \nearnings, followed by tobacco at 25.2% and \nPlatinum Group Metals (PGMs) at 10.8%. The \ncountry’s exports classified by the Harmonized \nCommodity Description and Coding System \nfor the months of December 2025 and January \n2026 are shown in Table 2. \n \n \n \nTable 2: Major Exports (US$ millions) \n \nDec -25 \n(US$m) \nJan -26 \n(US$m) \nDec 25 - Jan 26 \nChanges (%) \nShare of Jan \nExports (%) \nTotal \n1,141.7 \n969.4 \n-15.1 \n100.0 \nOf Which: \n \n \n \n \nGold \n539.6 \n493.0 \n-8.6 \n50.9 \nTobacco (Including cigarettes) \n216.6 \n244.5 \n12.9 \n25.2 \nPGMs \n209.2 \n104.4 \n-50.1 \n10.8 \nOther mineral substances \n38.4 \n26.9 \n-29.8 \n2.8 \nCoal \n13.3 \n16.5 \n23.9 \n1.7 \nSteel \n5.4 \n15.1 \n178.8 \n1.6 \nFerrochromium \n33.9 \n14.5 \n-57.3 \n1.5 \nOther ores and concentrates \n26.7 \n13.9 \n-48.1 \n1.4 \nChromium ores and concentrates \n11.1 \n7.0 \n-36.5 \n0.7 \nElectrical energy \n2.6 \n2.6 \n-0.3 \n0.3 \nOthers \n44.9 \n31.1 \n-30.7 \n3.2 \nSource: ZIMSTAT & RBZ Calculations, 2026 \n \nExport Market \nThe bulk of the country’s exports were destined \nfor the United Arab Emirates (51.6%), \nfollowed by China (22.1%) and South Africa \n(13.4%), while the remaining share was \ndistributed among other markets. The country’s \nmajor export markets during the month under \nanalysis are depicted in Figure 6. \n \nFigure 6: Top Ten Merchandise Exports \nDestinations (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2026 \n653\n514\n584\n664\n729\n725\n878\n879\n852\n1,042\n1,045\n1,142\n969\n0\n200\n400\n600\n800\n1000\n1200\nJan\nFeb\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nOct\nNov\nDec\n2025\n2026\n51.6\n22.1\n13.4\n1.6\n1.2\n1.2\n1.1\n0.9\n0.5\n0.5\n0.0\n10.0 20.0 30.0 40.0 50.0 60.0\nUnited Arab Emirates\nChina\nSouth Africa\nRussian Federation\nIndonesia\nZambia\nUnited States\nMozambique\nAlgeria\nBelgium\n \n \n5 \n \n \nMerchandise Imports \nMerchandise imports decreased by 5.1% to \nUS$855.7 million in January 2026, from \nUS$901.5 million recorded in December 2025. \nOn a year-on-year basis, however, imports \nincreased by 17.4%, from US$728.8 million \nrecorded in January 2025. \n \nFigure \n7 \nshows \nthe \nmonthly \nimport \ndevelopments for 2025 and 2026. \n \nFigure 7: Monthly Merchandise Imports \n(US$ millions): 2025 and 2026 \n \nSource: ZIMSTAT & RBZ Computations, 2026 \n \nImports by Commodity \nIndustrial supplies continued to constitute the \nlargest share of the country’s import bill, at \n34.1% of total imports. This was followed by \nfuel and lubricants at 23.2%, while capital \ngoods represented 22.0%. Food and beverages \naccounted for 8.7% of overall imports. \n \nThe imports of major commodities by Broad \nEconomic Category (BEC) for December 2025 \nand January 2026 are shown in Table 3. \n \n \nTable 3: Major Imports (US$ millions) \n \nDec –25 \n (US$m) \nJan - 26 \n(US$m) \nDec 25 – \nJan 26 \nChanges \n(%) \nShare of \nTotal \nImports \n(%) \nJan-26 \nTotal \n901.7 \n855.7 \n-5.1 \n100.0 \nOf Which: \n \n \n \n \nIndustrial supplies \n316.6 \n291.7 \n-7.9 \n34.1 \nFuels and lubricants \n166.1 \n198.4 \n19.5 \n23.2 \nCapital goods \n200.2 \n188.5 \n-5.9 \n22.0 \nFood and beverages \n102.9 \n74.3 \n-27.8 \n8.7 \nTransport equipment \nand parts \n63.7 \n55.2 \n-13.3 \n6.5 \nConsumer goods \n52.0 \n47.4 \n-8.8 \n5.5 \nOthers \n0.1 \n0.1 \n-24.8 \n0.0 \nSource: ZIMSTAT & RBZ Calculations, 2026 \n \nImport Markets \nDuring the month under review, the country’s \nimports originated from South Africa (30.5%), \nfollowed by China (22.1%), Bahrain (10.3%), \nthe Bahamas (4.9%), and Mozambique (3.9%), \nwhile the remaining share came from various \nother markets, as shown in Figure 8. \nFigure 8: Top Ten Merchandise Imports \nDestinations (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2026 \n728.8\n713.4\n793.5\n760.4\n847.6\n848.8\n853.4\n837.7\n857.8\n1012.9\n964.5\n901.7\n855.7\n0.0\n200.0\n400.0\n600.0\n800.0\n1000.0\n1200.0\n2025\n2026\n30.5\n22.1\n10.3\n4.9\n3.9\n3.7\n3.3\n2.9\n2.4\n2.2\nSouth Africa\nChina\nBahrain\nBahamas\nMozambi…\nHong Kong\nUnited…\nZambia\nMauritius\nIndia\n \n \n6 \n \n \nMerchandise Trade Balance \nThe country recorded a trade surplus of \nUS$113.7 million in January 2026, compared \nto a surplus of US$240.2 million recorded in \nDecember 2025. In comparison with January \n2025, the trade balance improved from \nUS$76.2 million deficit to US$113.7 million \nsurplus in the reporting month. The significant \nimprovement in the trade balance was driven by \nstronger export performance relative to import \ngrowth during the period under review. \n \nFigure 9 depicts the country’s trade balance for \nJanuary 2026. \n \nFigure 9: Merchandise Trade Balance (US$ \nmillions) \nSource: ZIMSTAT & RBZ Computations, 2026 \nMONETARY DEVELOPMENTS1 \nBroad money (M3) stock, which consists of \nboth local and foreign currency components, \nstood at ZiG108,915.12 million in January \n2026, an increase of 0.76% (ZiG826.42 \n \n1 Monetary data was revised from September 2024 \nfollowing the adoption of new reporting return submitted \nby banks. The notable revision is on broad money stock \n(M3) \nwhich \nwas \nrevised \ndownwards \ndue \nto \nreclassification of Government foreign currency deposits \nheld by banks from deposits included in broad money. \n2 Claims in Government was adjusted to include \nexchange losses related to SDR drawdowns. The \nmillion) from ZiG108,088.71 million recorded \nin December 2025. \nThe increase in broad money largely reflected \na month-on-month growth of ZiG1,138.79 \nmillion (1.30%) in the foreign currency \ncomponent \nfrom \nZiG87,921.26 \nmillion \nrecorded in December 2025 to ZiG89,060.04 \nmillion. Over the same period, the local \ncurrency component declined by ZiG312.37 \nmillion (1.55%), from ZiG20,167.45 million to \nZiG19,855.08 million. \nThe M3 stock was largely dominated by foreign \ncurrency deposits, which accounted for 81.77% \nof the total money supply, followed by local \ncurrency deposits, at 17.11%, and local \ncurrency in circulation, 0.13%. \nFigure 10 shows the composition of the money \nsupply. \nFigure 10: Composition of Money Supply \n \nSource: Reserve Bank of Zimbabwe, 2026 \n \nDuring the month under analysis, the banking \nsector's net credit to the Government2 \ndecreased by 8.66% to ZiG66,867.66 million. \nadjustment, however, does not imply actual lending to \nGovernment, but is merely an accounting treatment. The \nadjustments from June 2025 also include exchange \nlosses related to external loans transferred to \nGovernment, which were previously classified under \nUnrealized Exchange Losses in Other Items Net (OIN). \n1,141.73 \n969.4\n901.5\n855.7\n240.2\n113.7\n0\n200\n400\n600\n800\n1,000\n1,200\nDec-25\nJan-26\nExports\nImports\nTrade Balance\nNCDs; \n0.99%\nLocal Currency Time \nDeposits; 2.20%\nFX Time Deposits; \n12.48%\nLocal Currency \nTransferable ; \n14.91%\nFX Transferable \nDeposits; 69.29%\nCurrency in \nCirculation; \n0.13%\n \n \n7 \n \n \nCredit to the Government is largely in the form \nof long-term treasury bills held by banks. \nCredit to the private sector declined from \nZiG69,965.23 million to ZiG68,321.79 million. \nOutstanding credit to the private sector was \nmainly channelled to households, agriculture, \nmanufacturing \nand \ndistribution, \nwhich \ncollectively received about 26.83%, 17.33%, \n13.61%, and 12.57% of the total credit, \nrespectively. The mining sector received about \n7.06% of the total outstanding credit. \nFigure 11 shows the distribution of credit by \nsector. \n \nFigure 11: Distribution of Private Sector \nCredit \n \nSource: Reserve Bank of Zimbabwe, 2026 \n \nCredit to the private sector was largely utilized \nfor recurrent expenditure (35.40%), inventory \nbuild-up \n(20.93%), \nand \nfixed \ncapital \ninvestments (18.48%). \nSTOCK MARKET DEVELOPMENTS \nZimbabwe Stock Exchange (ZSE) \nDuring the month of January 2026, trading was \non a positive trajectory, buoyed by improved \ninvestor sentiments, partly due to a stable \nmacroeconomic environment. As a result, the \nZimbabwe Stock Exchange (ZSE) All Share, \nTop 10, Top 15, Medium and Small Cap indices \nregistered growths of 28.14%, 30.13%, \n32.85%, 17.12% and 0.42% to close the first \nmonth of 2026 at 356.04 points, 366.68 points, \n379.65 points, 325.78 points and 100.11 points, \nrespectively. \n \nIn line with the developments on the local \nbourse during the period under analysis, the \nmarket gained 26.80%, or ZiG23,388.05 \nmillion \nworth \nof \ncapitalisation \nto \nZiG110,645.38 \nmillion \ncompared \nto \nZiG87,257.33 million recorded in the previous \nmonth. Similarly, on an annual basis, market \ncapitalisation \ngained \n88.19%, \nfrom \nZiG58,794.86 million recorded in the same \nmonth in 2025. \n \nThe resource index remained unchanged at the \nprevious month’s level. However, on an annual \nbasis, the mining index lost 48.74%, from \n229.61 points recorded in January 2025. \n \nFigure 12: ZSE All Share, Top 10 and \nMining Indices \n \nSource: Zimbabwe Stock Exchange, 2026 \nHouseholds\n26.83%\nAgriculture\n17.33%\nMining\n7.06%\nManufacturing\n13.61%\nDistribution\n12.57%\nTransport and \nCommunication\n4.11%\nServices\n10.45%\nFinancial Organisations \nand Investments\n4.85%\nConstruction\n3.19%\nOther\n0.01%\n100\n150\n200\n250\n300\n350\n90\n140\n190\n240\n290\n340\n390\n31-Jan-25\n28-Feb-25\n31-Mar-25\n30-Apr-25\n31-May-25\n30-Jun-25\n31-Jul-25\n31-Aug-25\n30-Sep-25\n31-Oct-25\n30-Nov-25\n31-Dec-25\n31-Jan-26\nALL SHARE AND TOP 10 INDICES\nZSE ALL SHARE INDEX\nTop 10 Index\nMining Index (Points)\n \n \n8 \n \n \nDuring the month under review, the cumulative \nvalue and volume of shares traded increased by \n895.33% \nand \n155.23%, \namounting \nto \nZiG914.18 million and 982.36 million shares \ncompared to ZiG358.17 million and 98.70 \nmillion shares recorded in the previous month, \nrespectively. \nThe increase in turnover value and volume of \nshares was largely informed by notable trade \ndeals, where a combined total of 745.60 million \nshares and 37.43 million shares in TN \nCybertech Investments Holdings and Econet \nWireless Zimbabwe Limited exchanged hands \nat average prices of ZiG15.00 cents per share \nand ZiG975.32 cents per share, respectively. \nIn addition, selected trade deals of 19.37 \nmillion Ariston Holdings Limited shares and \n5.19 million National Tyre Services Limited \nshares, exchanged hands at ZiG3.09 cents per \nshare and ZiG57 cents per share, partly \ncontributed to the growth. \nThe proportion of foreign purchases to the \nvalue of shares traded weakened significantly \nin January 2026, with foreign purchases \naccounting for none of the total value of shares \ntraded. On the other hand, the cumulative net \nforeign position was neutral in January 2026. \n \nVictoria Falls Stock Exchange (VFEX) \nTrading on the Victoria Falls Stock Exchange \n(VFEX) also began the year 2026 on a bullish \ntrajectory. Consequently, the VFEX All Share \nindex added 19.33% to close at 211.36 points, \ncompared to 177.12 points recorded in the \nprevious month, as shown in Figure 13. \n \nFigure 13: Victoria Falls Stock Exchange \n(VFEX) All Share Index (ASI): January \n2025- January 2026 \n \nSource: Victoria Falls Stock Exchange, 2026 \n \nVFEX Market Capitalization \nOwing to the positive developments on the \nVFEX market in January 2026, the market \nadded 18.84%, or US$395.18 million worth of \ncapitalisation to US$2,492.34 million. This is \nin \ncomparison \nto \nUS$2,097.16 \nmillion \nrecorded in the previous month. Annually, the \nVFEX capitalisation gained 95.39%, from \nUS$1,275.57 \nmillion \nrecorded \nin \nthe \ncomparable period in 2025. \n \nFigure 14: Victoria Falls Stock Exchange \n(VFEX) \nMarket \nCapitalisation \n(US$ \nbillions) \nSource: Zimbabwe Stock Exchange, 2026 \n90\n110\n130\n150\n170\n190\n210\n230\n31-Jan-25\n28-Feb-25\n31-Mar-25\n30-Apr-25\n31-May-25\n30-Jun-25\n31-Jul-25\n31-Aug-25\n30-Sep-25\n31-Oct-25\n30-Nov-25\n31-Dec-25\n31-Jan-26\n0\n0.5\n1\n1.5\n2\n2.5\n3\nUS$ BILLIONS\n \n \n9 \n \n \nNATIONAL PAYMENTS SYSTEM \nThe total digital payment systems transaction \nvalues for January 2026 decreased by 25% \nfrom ZiG275.38 billion in December 2025 to \nZiG206.98 billion. Transactional volumes also \ndecreased by 10% from 84.23 million to 75.85 \nmillion recorded during the same period, \nas shown in Figure 15. \n \nFigure 15: Payment Systems Monthly \nTransactional Values and Volumes from \nFebruary 2025 – January 2026 \n \nSource: Reserve Bank of Zimbabwe, 2026 \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe combined value of ZiG and USD \ntransactions processed through the RTGS \nsystem in January 2026 decreased by 15% from \nZiG164.86 billion recorded in December 2025 \nto ZiG140.13 billion. Similarly, transactional \nvolumes also decreased by 20.70% from 1.03 \nmillion to 0.81 million during the same period \nunder review. \n \n \n \n \n \nFigure 16: RTGS System Trend for Values \nand Volumes from January 2025 – January \n2026\n \nSource: Reserve Bank of Zimbabwe, 2026 \n \nMobile and Internet-Based Transactions \nMobile \nand \ninternet-based \ntransactions \ndecreased by 43.94% from ZiG89.85 billion in \nDecember 2025 to ZiG50.36 billion in January \n2026. \n \nCash Transactions \nCash-based transactions decreased by 16.39% \nfrom ZiG17.63 billion in December 2025to \nZiG14.74 billion in January 2026. \n \nCard-Based Transactions \nCard-based transactions decreased by 20.21% \nfrom ZiG20.68 billion in December 2025 to \nZiG16.50 billion in January 2026. \nINFLATION OUTTURN \nMonthly Inflation Developments \nZiG Monthly Inflation \nMonthly ZWG inflation rate decelerated by \n0.23 percentage points, from 0.23% in \nDecember 2025 to 0.0 % in January 2026, \n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n0\n50\n100\n150\n200\n250\n300\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nVolumes (Millions)\nValues (Billions)\nValues\nVolumes\n 0.7\n 0.8\n 0.8\n 0.9\n 0.9\n 1.0\n 1.0\n 1.1\n0\n20\n40\n60\n80\n100\n120\n140\n160\n180\nJan-25 Mar-25May-25 Jul-25 Sep-25 Nov-25 Jan-26\nVolumes in Millions\nValues in $ Billions\nValues\nVolume\n \n \n10 \n \n \npartially driven by decreases in both food and \nnon-food inflation. \n \nThe ZWG monthly food inflation decreased \nfrom 0.57% in December 2025, to 0.11% in \nJanuary 2026, largely driven by declines in \nbread and cereals, milk and sugar. Non-food \ninflation also declined from 0.04% in \nDecember 2025 to -0.05% in January 2026. \n \nFigure 17 shows developments in monthly ZiG \ninflation from July 2024 to January 2026. \n \nFigure 17: ZiG Month-on-Month Inflation \n \nSource: ZIMSTAT, 2026 \n \nUS$ Monthly Inflation \nThe monthly USD inflation rate increased by \n0.2 percentage points from 0.0% in December \n2025 to 0.2% in January 2026, driven by non-\nfood inflation. Alcoholic beverages, housing, \nwater and energy and clothing subcategories \naccounted for the largest contribution to the \nmonthly inflation rate. \n \nFood inflation rose to 0.29%, contributing 0.09 \npercentage points, largely driven by fruits; \nvegetables, fish and sea food categories. \n \nAnnual Inflation Developments \nZiG Annual Inflation Developments \nThe \nyear-on-year \nZWG \ninflation \nrate \ndecelerated from 15.0% in December 2025 to \n4.1% in January 2026. The decrease in annual \ninflation was driven by non-food inflation \nwhich contributed 2.89 percentage points to the \nJanuary 2026 inflation rate. Housing, water and \nenergy; transport; and education had the largest \ncontributions to the overall inflation. ZWG \nannual food inflation accounted for 1.43 \npercentage points to annual ZWG inflation, \ndriven by bread and edible oils. \n \nUS$ Annual Inflation Developments \nThe annual USD inflation rate decelerated to \n1.0% in January 2026 from 12.4% in December \n2025. USD year-on-year inflation was driven \nby food inflation, which stood at -0.82% from \n15.5% in December 2025 and accounted for -\n0.27 percentage points to the monthly inflation \nrate. Non-food inflation declined to 1.96% in \nJanuary 2026 from 11% in the previous month, \npartly driven by housing, water and energy; \neducation and alcoholic beverages categories \ncontributing 1.31 percentage points. \nFigure \n18: \nUS$ \nAnnual \nInflation \nDevelopments (%) \n \nSource: ZIMSTAT, 2026 \n-5\n0\n5\n10\n15\n20\n25\n30\n35\n40\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nJul-25\nSep-25\nNov-25\nJan-26\nZWG Monthly Inflation\n-5\n0\n5\n10\n15\n20\nY-O-Y Inflation Rate (%)\n \n \n11 \n \n \n \nWeighted Annual Inflation \nThe weighted annual inflation rate decreased \nfrom 13.3% in December 2025, to 1.8% in \nJanuary 2026, driven by the disinflationary \ntrend exhibited by both the ZWG and USD \ncomponents. \n \nMARCH 2026 \nRESERVE BANK OF ZIMBABWE \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12 \n \n \nTABLE 1: DEPOSITORY CORPORATIONS SURVEY ($ 'Million)\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nNet Foreign Assets\n-47,798.94\n-50,807.43\n-51,172.57\n-46,837.66\n-45,196.99\n-41,019.76\n-38,625.91\n-33,611.01\n-30,064.40\n-22,049.75\n-18,406.06\n-17,586.58\n-14,548.26\n-6,933.82\nCentral Bank(net)\n-56,911.91\n-58,197.29\n-60,030.71\n-55,922.58\n-54,500.64\n-52,202.84\n-49,684.95\n-42,774.35\n-40,706.85\n-34,704.28\n-32,323.30\n-28,816.68\n-24,439.67\n-22,133.69\nForeign Assets\n23,239.75\n23,967.01\n23,087.88\n28,287.08\n26,132.24\n27,358.92\n29,447.51\n29,654.21\n31,965.94\n33,301.02\n34,640.02\n37,553.95\n40,898.97\n42,141.52\nForeign Liabilities\n80,151.65\n82,164.30\n83,118.59\n84,209.66\n80,632.89\n79,561.77\n79,132.46\n72,428.56\n72,672.79\n68,005.30\n66,963.32\n66,370.63\n65,338.63\n64,275.20\nOther Depository Corporations(net)\n9,112.97\n7,389.86\n8,858.14\n9,084.92\n9,303.65\n11,183.09\n11,059.03\n9,163.35\n10,642.45\n12,654.54\n13,917.24\n11,230.10\n9,891.40\n15,199.87\nForeign Assets\n20,113.36\n20,280.52\n21,464.25\n22,405.99\n22,719.00\n26,321.77\n25,204.45\n24,310.89\n25,812.72\n29,009.96\n27,770.37\n27,309.59\n27,538.14\n31,883.45\nForeign Liabilities\n11,000.39\n12,890.67\n12,606.10\n13,321.07\n13,415.35\n15,138.68\n14,145.42\n15,147.54\n15,170.26\n16,355.43\n13,853.12\n16,079.48\n17,646.74\n16,683.59\nNet Domestic Assets (NDA)\n126,708.20\n129,264.59\n129,550.42\n130,649.37\n132,200.16\n134,193.72\n135,962.44\n129,795.73\n129,266.66\n121,573.48\n123,859.89\n123,149.23\n122,636.97\n115,848.94\nDomestic Claims\n102,289.84\n105,286.02\n108,409.03\n111,778.89\n112,052.78\n113,871.47\n138,731.90\n141,931.97\n142,929.76\n141,471.80\n147,793.66\n149,262.14\n149,563.05 142,628.23\nClaims on Central Government(net)\n46,205.77\n47,595.38\n49,726.71\n51,733.21\n47,997.90\n46,958.43\n69,884.83\n72,147.58\n72,348.97\n68,978.08\n72,926.01\n72,812.05\n73,211.34\n66,867.66\nClaims on Central Government\n64,251.23\n65,079.23\n61,840.40\n64,347.80\n65,169.78\n65,057.66\n91,587.16\n90,919.46\n91,187.71\n91,019.04\n90,224.26\n90,273.39\n90,173.72\n90,744.08\nCentral Bank*\n50,322.20\n51,342.65\n48,573.05\n50,689.52\n51,472.22\n51,174.38\n76,067.26\n74,803.65\n75,383.07\n76,062.37\n74,705.69\n74,601.71\n73,132.44\n74,184.82\nODCs\n13,929.03\n13,736.58\n13,267.36\n13,658.28\n13,697.56\n13,883.28\n15,519.89\n16,115.81\n15,804.64\n14,956.67\n15,518.58\n15,671.68\n17,041.29\n16,559.26\nLess Liabilities to Central Government\n18,045.45\n17,483.86\n12,113.70\n12,614.59\n17,171.88\n18,099.24\n21,702.33\n18,771.88\n18,838.73\n22,040.97\n17,298.25\n17,461.34\n16,962.39\n23,876.42\nCentral Bank\n9,591.57\n9,335.10\n4,557.22\n4,850.15\n6,177.70\n6,126.98\n7,614.72\n6,463.06\n6,466.66\n6,740.49\n2,537.97\n3,967.12\n3,526.59\n9,671.83\nOf which foreign Currency\n9,291.47\n8,231.67\n3,875.54\n4,410.31\n5,787.19\n5,549.44\n6,666.06\n5,497.47\n6,010.56\n5,667.77\n1,932.08\n2,952.36\n2,416.03\n7,773.12\nODCs\n8,453.89\n8,148.76\n7,556.48\n7,764.44\n10,994.18\n11,972.25\n14,087.61\n12,308.82\n12,372.07\n15,300.48\n14,760.29\n13,494.22\n13,435.79\n14,204.59\nOf which foreign currency\n7,777.48\n7,621.82\n6,689.63\n6,183.93\n9,392.25\n10,536.89\n12,630.29\n10,600.01\n10,915.21\n13,550.72\n12,693.10\n12,308.34\n11,917.20\n12,439.53\nClaims on Other Sectors\n56,084.07\n57,690.64\n58,682.32\n60,045.68\n64,054.88\n66,913.05\n68,847.07\n69,784.39\n70,580.79\n72,493.73\n74,867.65\n76,450.10\n76,351.72\n75,760.57\nOther Financial Corporations\n3,822.61\n3,517.16\n3,631.08\n3,864.50\n4,731.25\n4,292.05\n4,221.20\n4,445.02\n4,526.08\n5,392.29\n5,193.56\n5,688.93\n5,259.08\n5,393.96\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n22.04\n21.46\n18.84\n23.48\n23.74\n20.77\n23.29\nPublic Non Financial Corporations\n563.61\n569.85\n971.29\n911.74\n898.25\n797.32\n785.71\n781.57\n686.95\n659.67\n949.80\n1,011.05\n1,106.64\n2,021.53\nPrivate Sector\n51,697.85\n53,603.63\n54,079.94\n55,269.44\n58,425.38\n61,823.68\n63,840.16\n64,535.76\n65,346.30\n66,422.93\n68,700.81\n69,726.38\n69,965.23\n68,321.79\nCentral Bank\n403.34\n519.44\n538.88\n545.44\n577.07\n599.76\n629.79\n639.95\n641.30\n684.19\n693.21\n682.98\n694.60\n704.02\nODCs\n51,294.51\n53,084.19\n53,541.07\n54,724.00\n57,848.31\n61,223.93\n63,210.38\n63,895.82\n64,705.01\n65,738.73\n68,007.60\n69,043.39\n69,270.63\n67,617.77\nOf which Foreigm currency\n42,937.33\n46,086.81\n46,197.56\n47,961.06\n50,400.88\n52,686.20\n54,648.96\n54,746.71\n54,919.36\n56,222.03\n58,272.26\n59,687.69\n59,670.51\n58,499.01\nOther Items(Net)\n-24,418.36\n-23,978.57\n-21,141.39\n-18,870.48\n-20,147.38\n-20,322.25\n2,769.46\n12,136.24\n13,663.10\n19,898.32\n23,933.76\n26,112.91\n26,926.09\n26,779.28\nShares and Other Equity\n-1,120.14\n-2,759.36\n659.23\n2,615.68\n7,692.89\n9,526.48\n36,601.05\n44,078.48\n45,051.26\n49,520.79\n52,157.88\n51,997.94\n55,092.57\n54,056.45\nLiabilities to Other Financial Corporations\n386.06\n75.39\n267.30\n87.13\n63.50\n136.38\n194.89\n205.30\n261.51\n72.01\n202.85\n313.89\n340.43\n350.42\nRestricted Deposits\n4,320.76\n4,381.22\n6,468.48\n6,947.34\n7,610.34\n7,729.11\n8,006.08\n8,840.96\n9,172.63\n9,184.86\n4,200.25\n4,202.91\n2,207.01\n2,151.26\nDeposits and Securities Excluded from Base Money\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-28,005.04\n-25,675.83\n-28,536.40\n-28,520.63\n-35,514.12\n-37,714.21\n-42,032.57\n-40,988.50\n-40,822.30\n-38,879.35\n-32,627.21\n-30,401.83\n-30,713.92\n-29,778.84\nBroad Money-M3\n78,909.26\n78,457.16\n78,377.85\n83,811.71\n87,003.17\n93,173.97\n97,336.53\n96,184.73\n99,202.27\n99,523.73\n105,453.84\n105,562.65\n108,088.71 108,915.12\nSecurities Other than Shares Included in Broad Money\n995.70\n1,110.84\n1,043.01\n1,258.29\n1,113.65\n1,031.34\n1,500.40\n1,525.56\n1,714.71\n1,562.95\n1,671.42\n1,533.06\n403.79\n1,075.41\nBroad Money-M2\n77,913.56\n77,346.32\n77,334.84\n82,553.42\n85,889.52\n92,142.63\n95,836.13\n94,659.17\n97,487.56\n97,960.78\n103,782.42\n104,029.60\n107,684.91 107,839.71\nOther Deposits (Time Deposits)\n6,116.83\n6,724.49\n7,797.23\n7,273.44\n8,906.02\n10,202.83\n11,180.20\n10,986.71\n12,651.43\n13,338.89\n14,616.09\n14,059.93\n15,769.31\n15,992.22\nof which Foreign Currency Accounts\n5,140.66\n5,707.45\n6,566.88\n6,058.37\n7,683.25\n8,760.66\n9,667.62\n9,240.63\n10,635.97\n11,472.65\n12,501.15\n11,969.63\n13,434.26\n13,594.66\nNarrow Money-M1\n71,796.73\n70,621.83\n69,537.61\n75,279.99\n76,983.50\n81,939.80\n84,655.93\n83,672.46\n84,836.14\n84,621.89\n89,166.33\n89,969.67\n91,915.60\n91,847.49\nTransferable Deposits\n71,683.53\n70,501.36\n69,416.64\n75,177.13\n76,875.02\n81,872.63\n84,533.18\n83,548.51\n84,714.95\n84,498.45\n89,038.34\n89,839.29\n91,776.66\n91,706.09\n Of which Foreign Currency Accounts\n59,290.71\n58,700.73\n57,277.64\n62,889.89\n63,794.81\n67,072.42\n70,468.20\n69,972.03\n71,327.50\n71,043.42\n74,564.14\n74,440.20\n74,487.00\n75,465.39\nCurrency Outside Depository Corporations\n113.20\n120.46\n120.97\n102.86\n108.48\n67.17\n122.74\n123.94\n121.19\n123.44\n127.98\n130.38\n138.94\n141.41\nMemorandum Items\nReserve Money\n20,395.12\n21,688.51\n21,184.52\n22,726.34\n22,614.61\n23,287.44\n24,896.15\n25,488.47\n26,525.61\n26,223.52\n26,850.36\n27,935.96\n29,418.57\n27,339.59\nFCAs as a Percentage of Deposits in M3\n83.4%\n82.2%\n81.6%\n82.4%\n82.3%\n81.4%\n82.4%\n82.5%\n82.7%\n83.0%\n82.7%\n82.0%\n81.4%\n81.9%\nEnd Period Exchange Rate\n25.79850\n26.36560\n26.56150\n26.76540\n26.81580\n26.91020\n26.94570\n26.78630\n26.75480\n26.64390\n26.38650\n26.19010\n25.98070\n25.58060\nSource: Reserve Bank of Zimbabwe,2026\nNotes:\n(i) Depository corporations survey - formerly Monetary Survey.\n(ii) Broad money redefined using IMF's Monetary and Financial Statistics Manual of 2000. Major changes include exclusion of Government deposits held by banks from broad money.\n(iii) Transferable deposits made up of demand and savings deposits.\n(iv) NCDs are also referred to as securities included in broad money.\n(v) All classes of time deposits, short and long term are classified as time deposits, which are also termed other deposits.\n(vi) Credit to the private sector now excludes claims on other financial corporations, as well as claims on state and local government (local authorities)\n(vii) Depository corporations made up of the Central Bank and other depository corporations\n(viii) Other depository corporations (ODCs) - Commercial banks, merchant banks, building societies and POSB.\n(ix) In December 2017, the statistics were adjusted in restrospect by reclassifying Securities issued under Aftrades from claims on government to claims on central bank\n(x) In December 2017, the statistics were adjusted in restrospect by reclassifying amounts accessed by banks under the Aftrades from liabilities to Other Depository corporations and Other Financial Corporations to liabilities to Central Bank \n(xi) In December 2018, statistics were revised from November 2017 due to reclassification of lines of credit (foreign liabilities) that were initially classified as deposits included in broad money\n(xii) All monetary and financial statistics are valued in ZWL$ since the introduction of the interbank foreign exchange market in February 2019\n(xiii). Monetary data was revised from September 2024 following the adoption of new reporting return submitted by banks. The notable revision is on broad money stock (M3) which was revised downwards due to reclassification of Government foreign currency deposits held by banks from dep\n (xiv) From April 2024, amounts include Unrealised Exchange Losses pertaining to IMF SDR Drawdowns which have been reclassified from Other Assets (OIN).\n(xv). The June 2025 figure includes exchange losses related to external loans transferred to the Government, which were reclassified from Unrealised Exchange Losses in Other Items Net (OIN). The adjustment does not indicate a flow of new money.\n(xvi). Loans and Advances to Gvt were revised from April 2024 to incorporate exchange losses relating to IMF SDR Drawdowns\n(xvii). Loans and Advances to Gvt were further adjusted in June 2025 to include exchange rate related revaluations on external loans transferred to Gvt.\n \n \n13 \n \n \n \nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nNet Foreign Assets\n-56,911.91\n-58,197.29\n-59,529.21\n-57,060.03\n-53,091.39\n-52,203.44\n-49,715.91\n-42,774.35\n-40,706.85\n-34,704.28\n-32,323.30\n-28,816.68\n-24,439.67\n-22,133.69\nClaims on Non Residents\n23,239.75\n23,967.01\n23,378.61\n26,597.86\n26,132.37\n27,358.33\n29,416.55\n29,654.21\n31,965.94\n33,301.02\n34,640.02\n37,553.95\n40,898.97\n42,141.52\nOfficial Reserves Assets\n12,507.85\n13,012.03\n13,072.83\n16,493.63\n16,015.60\n17,206.67\n18,802.98\n19,107.44\n21,433.04\n22,811.66\n24,262.46\n27,255.32\n30,679.48\n32,095.26\nOther Foreign Assets\n10,731.90\n10,954.98\n10,305.78\n10,104.23\n10,116.77\n10,151.66\n10,613.56\n10,546.77\n10,532.90\n10,489.35\n10,377.56\n10,298.62\n10,219.49\n10,046.26\nLess Liabilities to Non Residents\n80,151.65\n82,164.30\n82,907.82\n83,657.89\n79,223.76\n79,561.77\n79,132.46\n72,428.56\n72,672.79\n68,005.30\n66,963.32\n66,370.63\n65,338.63\n64,275.20\nShort Term Liabilities\n127.60\n130.78\n132.09\n95.84\n92.55\n73.66\n102.73\n102.12\n82.89\n82.55\n209.80\n52.98\n52.55\n51.75\nOther Foreign Liabilities*\n80,024.06\n82,033.52\n82,775.73\n83,562.05\n79,131.21\n79,488.11\n79,029.72\n72,326.44\n72,589.90\n67,922.75\n66,753.51\n66,317.65\n65,286.08\n64,223.46\n of which blocked funds\n17,365.02\n17,716.70\n17,848.34\n17,984.72\n13,730.60\n13,778.64\n13,146.16\n7,417.72\n7,368.19\n3,423.51\n3,390.43\n3,096.72\n3,045.55\n2,998.65\nNet Domestic Assets (NDA)\n77,307.02\n79,885.79\n80,713.73\n79,786.36\n75,706.00\n75,490.88\n74,612.06\n68,262.82\n67,232.46\n60,927.80\n59,173.66\n56,752.64\n53,858.23\n49,473.28\nDomestic Claims\n41,177.61\n42,570.17\n45,225.55\n47,071.77\n46,565.66\n46,348.66\n69,824.36\n69,694.29\n70,271.35\n70,718.83\n73,649.24\n72,097.31\n68,072.79\n66,022.59\nNet Claims on Central Government\n40,730.63\n42,007.56\n44,015.83\n45,839.37\n45,294.80\n45,047.99\n68,483.50\n68,340.59\n68,916.41\n69,321.88\n72,167.72\n70,634.59\n66,630.08\n64,513.00\nClaims on Central Government\n50,322.20\n51,342.65\n48,573.05\n50,689.52\n51,472.50\n51,174.98\n76,098.22\n74,803.65\n75,383.07\n76,062.37\n74,705.69\n74,601.71\n73,132.44\n74,184.82\nOf which: Securities Other than Shares\n13,877.09\n14,233.29\n14,332.28\n14,484.82\n14,560.12\n14,917.96\n15,006.38\n14,949.38\n14,955.16\n16,320.71\n16,071.97\n15,994.24\n15,417.46\n15,240.42\n of which USD Securities \n13,877.09\n14,233.29\n14,332.28\n14,484.82\n14,560.12\n14,917.96\n15,006.38\n14,949.38\n14,955.16\n16,320.71\n16,071.97\n15,994.24\n15,417.46\n15,240.42\nof which Interest on Foreign Currency TBs\n14,218.90\n8.68\n8.27\n9.38\n12.71\n14.31\n19.20\n15.78\n693.80\n563.03\n574.54\n574.54\n599.69\nLoans and Advances\n36,445.10\n37,109.37\n34,240.77\n36,204.70\n36,912.38\n36,257.02\n61,091.85\n59,854.28\n60,427.91\n59,741.67\n58,633.72\n58,607.47\n57,714.98\n58,944.40\nOf which Loans (inc interest capitalisation on Loans transfared to Gvt)\n1,579.04\n1,567.99\n0.00\n0.00\n0.28\n1.84\n32.11\n245.32\n449.29\n19.12\n363.20\n555.36\n164.74\n150.00\nRevaluations on External Loans Transfared to Government\n0.00\n0.00\n0.00\n0.00\n0.00\n24,245.67\n23,627.56\n23,542.15\n23,441.00\n22,874.01\n22,703.75\n22,170.46\n21,829.04\nAmounts Due from Gvt including SDR Drawdowns\n34,866.06\n35,541.37\n34,240.77\n36,204.70\n36,912.10\n36,255.18\n36,814.07\n35,981.39\n36,436.47\n36,281.54\n35,396.51\n35,348.36\n35,379.78\n34,867.75\n Export Incentives\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLess Liabilities to Central Government\n9,591.57\n9,335.10\n4,557.22\n4,850.15\n6,177.70\n6,126.98\n7,614.72\n6,463.06\n6,466.66\n6,740.49\n2,537.97\n3,967.12\n6,502.36\n9,671.83\nOf which: Deposits\n9,591.57\n9,335.10\n4,557.22\n4,850.15\n6,177.70\n6,126.98\n7,614.72\n6,463.06\n6,466.66\n6,740.49\n2,537.97\n3,967.12\n6,502.36\n9,671.83\nof which Foreign Currency\n9,291.47\n8,231.67\n3,875.54\n4,410.31\n5,787.19\n5,549.44\n6,666.06\n5,497.47\n6,010.56\n5,667.77\n1,932.08\n2,952.36\n5,391.79\n7,773.12\nLocal Currency Deposits\n300.09\n1,103.43\n681.67\n439.83\n390.52\n577.55\n948.66\n965.60\n456.10\n1,072.72\n605.89\n1,014.76\n1,110.57\n1,898.70\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n446.98\n562.62\n1,209.73\n1,232.40\n1,270.86\n1,300.66\n1,340.86\n1,353.70\n1,354.94\n1,396.95\n1,481.52\n1,462.72\n1,442.71\n1,509.59\nOther Financial Corporations\n31.35\n31.71\n245.53\n256.43\n257.79\n259.60\n264.04\n269.32\n269.73\n270.65\n297.65\n292.68\n293.65\n294.52\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n12.29\n11.46\n425.32\n430.54\n436.00\n441.30\n447.03\n444.43\n443.91\n442.10\n490.66\n487.06\n454.46\n511.05\nPrivate Sector\n403.34\n519.44\n538.88\n545.44\n577.07\n599.76\n629.79\n639.95\n641.30\n684.19\n693.21\n682.98\n694.60\n704.02\nClaims on Other Depository Corporations\n907.94\n794.55\n948.29\n1,059.39\n1,097.27\n920.73\n549.47\n579.25\n568.39\n561.73\n563.62\n384.82\n331.31\n303.64\nOf which: Loans\n907.94\n794.55\n948.29\n1,059.39\n1,097.27\n920.73\n549.47\n579.25\n568.39\n561.73\n563.62\n384.82\n331.31\n303.64\nOther Liabilities to ODCs\n8,273.62\n7,914.94\n8,889.89\n9,408.95\n11,959.26\n12,483.06\n11,164.03\n10,787.43\n11,792.51\n11,018.31\n9,270.40\n8,867.15\n7,826.23\n6,748.45\nOf which: Aftrades Balances\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Securities\n2,002.01\n1,650.52\n2,378.36\n2,749.15\n2,521.50\n1,829.70\n1,536.48\n645.61\n1,609.78\n1,282.72\n2,023.43\n1,863.27\n3,525.69\n2,928.73\nOther Items(Net)\n-43,495.09\n-44,436.01\n-43,429.78\n-41,064.16\n-40,002.32\n-40,704.55\n-15,402.25\n-8,776.71\n-8,185.24\n-665.56\n5,768.80\n6,862.34\n6,719.64\n10,104.50\nShares and Other Equity\n-39,722.52\n-40,716.69\n-38,350.82\n-37,337.01\n-32,727.79\n-31,146.08\n-5,114.28\n197.50\n396.76\n5,141.39\n7,090.55\n8,096.28\n9,669.02\n12,364.88\nOther Items(Net)\n-8,239.99\n-8,373.47\n-11,637.97\n-11,218.16\n-15,091.36\n-17,843.71\n-18,611.20\n-18,036.21\n-18,423.02\n-15,960.65\n-5,853.04\n-5,771.85\n-5,820.55\n-4,956.92\nLiabilities to Other Resident Sectors\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nDeposits and Securities Excluded from Base Money\n4,467.42\n4,654.15\n6,559.02\n7,491.02\n7,816.83\n8,285.23\n8,323.23\n9,062.00\n9,841.02\n10,153.71\n4,531.30\n4,537.91\n2,871.16\n2,696.54\nMonetary Base \n20,395.12\n21,688.51\n21,184.52\n22,726.34\n22,614.61\n23,287.44\n24,896.15\n25,488.47\n26,525.61\n26,223.52\n26,850.36\n27,935.96\n29,418.57\n27,339.59\nCurrency Issued\n181.87\n189.78\n196.00\n204.18\n215.83\n228.54\n335.26\n341.69\n347.36\n363.37\n379.30\n456.69\n508.78\n521.59\nZWL Coins\n0.01\n0.01\n0.01\n0.01\n0.01\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nZWL Notes\n5.29\n5.29\n5.29\n5.29\n5.29\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nZiG Coins\n35.32\n35.32\n35.32\n35.32\n35.32\n35.32\n35.33\n35.33\n35.31\n35.31\n35.31\n35.31\n35.31\n35.32\nZiG Notes\n141.25\n149.16\n155.38\n163.56\n175.21\n193.21\n299.93\n306.36\n312.05\n328.05\n343.99\n421.38\n473.47\n486.27\nLiabilities to ODCs\n20,213.24\n21,498.73\n20,988.51\n22,522.15\n22,398.78\n23,058.90\n24,560.89\n25,146.79\n26,178.25\n25,860.15\n26,471.06\n27,479.27\n28,909.78\n26,818.01\nReserve Deposits\n16,691.28\n17,918.32\n17,853.26\n17,411.47\n18,965.46\n20,093.64\n20,129.99\n21,506.90\n21,523.59\n21,678.40\n22,706.68\n23,497.70\n23,480.57\n23,178.94\n Local Currency Reserve Deposits\n2,935.34\n2,981.54\n3,152.25\n3,222.43\n3,688.04\n4,107.16\n3,976.26\n3,943.55\n3,810.48\n3,899.00\n4,176.14\n4,404.77\n4,499.77\n4,362.02\n Foreign Currency Reserve Deposits\n13,755.94\n14,936.79\n14,701.01\n14,189.04\n15,277.42\n15,986.48\n16,153.73\n17,563.35\n17,713.10\n17,779.39\n18,530.54\n19,092.93\n18,980.80\n18,816.92\n Exess reserves \n3,521.96\n3,580.40\n3,135.25\n5,110.68\n3,433.31\n2,965.26\n4,430.90\n3,639.89\n4,654.66\n4,181.76\n3,764.38\n3,981.57\n5,429.21\n3,639.07\n of which Excess reserves - ZiG\n398.70\n275.48\n440.42\n363.52\n412.33\n376.01\n340.93\n278.40\n432.24\n437.86\n375.58\n357.00\n298.74\n466.37\n Excess reserves - FCA\n3,123.26\n3,304.93\n2,694.83\n4,747.15\n3,020.98\n2,589.25\n4,089.98\n3,361.48\n4,222.42\n3,743.89\n3,388.80\n3,624.57\n5,130.47\n3,172.70\nPrivate Deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nSource: Reserve Bank of Zimbabwe,2026\nNotes\ni. Other Foreign Liabilities include blocked funds amounting to USD2.2 billion assumed by the Central Bank on behalf of Government.\nii. From April 2024, claims on Government amounts include Unrealised Exchange Losses pertaining to IMF SDR Drawdowns which have been reclassified from Other Assets (OIN).\niii. The June 2025 figure includes exchange losses related to external loans transferred to the Government, which were reclassified from Unrealised Exchange Losses in Other Items Net (OIN). The adjustment does not indicate a flow of new money.\niv. Loans and Advances to Gvt were revised from April 2024 to incorporate exchange losses relating to IMF SDR Drawdowns\nvi. Loans and Advances to Gvt were further adjusted in June 2025 to include exchange rate related revaluations on external loans transferred to Gvt.\nTABLE 2: CENTRAL BANK SURVEY ($'Million)\n \n \n14 \n \n \n \nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nJul-25\nAug-25\nSep-25\nOct-25\nNov-25\nDec-25\nJan-26\nNet Foreign Assets\n9,765,464.22\n9,112,969.32\n7,389.86\n8,858.14\n9,084.92\n9,303.65\n11,183.09\n11,059.03\n9,163.35\n10,642.45\n12,654.54\n13,917.24\n11,230.10\n9,891.40\n15,199.87\nClaims on Non Residents\n19,162,644.38\n20,113,361.10\n20,280.52\n21,464.25\n22,405.99\n22,719.00\n26,321.77\n25,204.45\n24,310.89\n25,812.72\n29,009.96\n27,770.37\n27,309.59\n27,538.14\n31,883.45\nOf Which: Foreign Currency\n11,234,930.19\n10,288,521.82\n12,746.36\n11,639.76\n9,242.68\n9,519.90\n8,665.77\n9,520.98\n10,812.40\n14,822.22\n15,521.30\n14,189.74\n14,165.53\n15,140.90\n20,317.62\nDeposits\n7,530,468.74\n9,296,529.40\n6,917.90\n9,040.66\n12,961.80\n12,996.49\n17,466.41\n15,492.78\n13,309.36\n10,831.44\n13,370.17\n13,463.63\n13,027.90\n12,281.70\n11,431.38\nOther\n397,245.45\n528,309.88\n616.26\n783.83\n201.51\n202.60\n189.59\n190.69\n189.13\n159.06\n118.49\n117.00\n116.16\n115.54\n134.45\nLess Liabilities to Non Residents\n9,397,180.16\n11,000,391.78\n12,890.67\n12,606.10\n13,321.07\n13,415.35\n15,138.68\n14,145.42\n15,147.54\n15,170.26\n16,355.43\n13,853.12\n16,079.48\n17,646.74\n16,683.59\nOf Which: Deposits\n953,309.19\n1,408,378.26\n2,457.30\n2,140.51\n1,714.07\n2,351.48\n3,165.21\n1,703.40\n2,629.70\n2,685.47\n3,404.41\n1,670.94\n3,097.42\n5,028.24\n5,623.35\nLoans\n8,443,870.97\n9,592,013.52\n10,433.37\n10,465.60\n11,607.00\n11,063.87\n11,973.47\n12,442.02\n12,517.84\n12,484.79\n12,951.02\n12,182.18\n12,855.93\n12,498.18\n10,941.68\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n126.14\n120.31\n118.55\nNet Domestic Assets (NDA)\n62,564.10\n69,536.43\n70,673.91\n69,308.20\n74,080.26\n77,384.56\n81,367.58\n85,837.60\n86,676.41\n87,770.24\n86,219.17\n91,077.56\n93,867.17\n97,394.20\n93,028.57\nDomestic Claims\n56,082.21\n61,112.23\n62,715.84\n63,183.47\n64,707.12\n65,487.40\n67,523.42\n68,938.49\n72,237.69\n72,658.42\n70,752.97\n74,144.41\n77,164.83\n78,514.51\n76,605.64\nNet Claims on Central Government\n2,579.12\n5,475.14\n5,587.82\n5,710.88\n5,893.84\n2,703.38\n1,911.03\n1,432.28\n3,806.99\n3,432.57\n-343.81\n758.29\n2,177.45\n3,605.50\n2,354.67\nClaims on Central Government\n12,992.03\n13,929.03\n13,736.58\n13,267.36\n13,658.28\n13,697.56\n13,883.28\n15,519.89\n16,115.81\n15,804.64\n14,956.67\n15,518.58\n15,671.68\n17,041.29\n16,559.26\nSecurities\n12,733.08\n13,680.09\n13,393.71\n12,742.17\n13,149.28\n13,219.57\n13,413.78\n15,011.08\n15,661.68\n15,264.20\n14,394.72\n14,979.39\n15,156.37\n16,587.35\n16,129.47\n of which foreign currency denominated securities\n11,066.91\n12,179.89\n11,952.49\n11,317.47\n11,610.83\n12,803.60\n11,975.41\n12,612.98\n12,740.28\n12,330.04\n11,616.75\n11,903.45\n12,178.11\n12,782.98\n12,510.80\nLoans\n258.95\n248.94\n342.87\n525.19\n509.01\n478.00\n469.51\n508.81\n454.13\n540.44\n561.95\n539.19\n515.30\n453.93\n429.79\n of which foreign currency\n256.79\n248.35\n335.73\n515.89\n500.08\n474.00\n460.64\n505.05\n445.28\n530.49\n550.56\n533.21\n509.52\n448.58\n424.57\nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nLess Liabilities to Central Government\n10,412.91\n8,453.89\n8,148.76\n7,556.48\n7,764.44\n10,994.18\n11,972.25\n14,087.61\n12,308.82\n12,372.07\n15,300.48\n14,760.29\n13,494.22\n13,435.79\n14,204.59\nOf which: Deposits\n10,406.49\n8,453.88\n8,148.76\n7,486.50\n7,714.70\n10,839.61\n11,890.29\n13,980.02\n12,190.98\n12,265.21\n15,171.44\n14,628.22\n13,299.60\n13,268.09\n13,998.64\nof which foreign currency deposits\n9,591.43\n7,777.48\n7,621.82\n6,689.63\n6,183.93\n9,392.25\n10,536.89\n12,630.29\n10,600.01\n10,915.21\n13,550.72\n12,693.10\n12,308.34\n11,917.20\n12,439.53\nOther \n6.42\n0.01\n0.00\n69.98\n49.75\n154.57\n81.96\n107.59\n117.83\n106.86\n129.04\n132.07\n194.62\n167.71\n205.95\nClaims on Other Sectors\n53,503.09\n55,637.09\n57,128.02\n57,472.59\n58,813.28\n62,784.02\n65,612.38\n67,506.21\n68,430.69\n69,225.85\n71,096.78\n73,386.13\n74,987.38\n74,909.01\n74,250.98\nOther Financial Corporations\n2,660.02\n3,791.26\n3,485.44\n3,385.55\n3,608.07\n4,473.46\n4,032.45\n3,957.16\n4,175.70\n4,256.35\n5,121.64\n4,895.91\n5,396.25\n4,965.42\n5,099.44\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n22.04\n21.46\n18.84\n23.48\n23.74\n20.77\n23.29\nPublic Non Financial Corporations\n803.29\n551.32\n558.39\n545.98\n481.20\n462.25\n356.01\n338.67\n337.14\n243.04\n217.57\n459.14\n524.00\n652.18\n1,510.48\nPrivate Sector\n50,039.78\n51,294.51\n53,084.19\n53,541.07\n54,724.00\n57,848.31\n61,223.93\n63,210.38\n63,895.82\n64,705.01\n65,738.73\n68,007.60\n69,043.39\n69,270.63\n67,617.77\nof which foreign currency denominated loans\n42,518.38\n42,937.33\n46,086.81\n46,197.56\n47,961.06\n50,400.88\n52,686.20\n54,648.96\n54,746.71\n54,919.36\n56,222.03\n58,272.26\n59,687.69\n59,670.51\n58,499.01\nClaims on the Central Bank\n29,978.18\n29,908.44\n30,373.55\n29,202.08\n30,532.02\n33,836.49\n34,730.71\n36,281.29\n36,593.85\n37,610.46\n36,713.15\n37,496.18\n38,667.92\n40,660.31\n37,292.73\nCurrency\n71.40\n68.67\n69.32\n75.03\n101.33\n107.36\n161.37\n212.52\n217.74\n226.17\n239.92\n251.32\n326.31\n369.84\n380.18\nReserves\n29,665.56\n29,561.47\n30,142.63\n28,957.94\n30,153.54\n33,294.89\n34,245.99\n35,723.28\n36,068.33\n36,921.10\n35,998.29\n36,686.58\n37,765.06\n39,802.57\n36,391.29\nSecurities\n241.22\n278.30\n161.60\n169.10\n277.15\n434.25\n323.36\n345.49\n307.78\n463.19\n474.94\n558.28\n576.55\n487.89\n521.26\nOther Claims\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLiabilities to the Central Bank\n282.26\n233.01\n488.20\n536.90\n541.72\n544.15\n160.12\n149.02\n194.20\n156.52\n143.37\n184.11\n107.06\n62.58\n60.40\n0.00\n0.00\nOther Items(Net)\n23,214.03\n21,251.23\n21,927.28\n22,540.45\n20,617.17\n21,395.18\n20,726.43\n19,233.16\n21,960.93\n22,342.11\n21,103.59\n20,378.92\n21,858.52\n21,718.04\n20,809.40\nShares and Other Equity\n37,782.51\n38,602.37\n37,957.33\n39,010.06\n39,952.69\n40,420.68\n40,672.56\n41,715.34\n43,880.98\n44,654.49\n44,379.40\n45,067.33\n43,901.66\n42,447.79\n41,691.57\nLiabilities to other ressident sectors\n338.84\n351.53\n40.86\n232.77\n52.60\n57.57\n129.76\n154.53\n160.13\n219.06\n72.01\n186.56\n291.68\n319.39\n332.40\nOther Items(Net)\n-14,907.33\n-17,702.67\n-16,070.91\n-16,702.38\n-19,388.12\n-19,083.07\n-20,075.89\n-22,636.71\n-22,080.18\n-22,531.45\n-23,347.82\n-24,874.98\n-22,334.83\n-21,049.14\n-21,214.57\nDeposits and Securities Included in Broad Money\n72,329.56\n78,649.40\n78,063.76\n78,166.34\n83,165.18\n86,688.21\n92,550.67\n96,896.64\n95,839.75\n98,412.69\n98,873.70\n104,994.81\n105,097.27\n107,285.61\n108,228.44\nDeposits Included in Broad Money\n71,557.89\n \n77,653.70\n \n76,952.92\n \n77,123.33\n \n81,906.89\n \n85,574.56\n \n91,519.33\n \n95,396.24\n \n94,314.20\n \n96,697.98\n \n97,310.75\n \n103,323.38\n \n103,564.22\n \n106,881.82\n \n107,153.03\n \nTransferable Deposits\n65,726.26\n \n71,536.87\n \n70,228.43\n \n69,326.09\n \n74,633.46\n \n76,668.54\n \n81,316.50\n \n84,216.03\n \n83,327.48\n \n84,046.56\n \n83,971.86\n \n88,707.29\n \n89,504.29\n \n91,112.50\n \n91,160.81\n \n of which FCAs\n54,884.34\n \n59,157.87\n \n58,527.96\n \n57,270.33\n \n62,418.69\n \n63,622.76\n \n66,516.87\n \n70,151.60\n \n69,751.55\n \n70,659.66\n \n70,517.62\n \n74,233.88\n \n74,105.68\n \n73,823.32\n \n75,465.39\n \nOther Deposits (Time Deposits)\n5,831.62\n6,116.83\n6,724.49\n7,797.23\n7,273.44\n8,906.02\n10,202.83\n11,180.20\n10,986.71\n12,651.43\n13,338.89\n14,616.09\n14,059.93\n15,769.31\n15,992.22\n of which FCAs\n4,568.46\n5,140.66\n5,707.45\n6,566.88\n6,058.37\n7,683.25\n8,760.66\n9,667.62\n9,240.63\n10,635.97\n11,472.65\n12,501.15\n11,969.63\n13,434.26\n13,594.66\nMoney Market Instruments\n771.68\n \n995.70\n \n1,110.84\n \n1,043.01\n \n1,258.29\n \n1,113.65\n \n1,031.34\n \n1,500.40\n \n1,525.56\n \n1,714.71\n \n1,562.95\n \n1,671.42\n \n1,533.06\n \n403.79\n \n1,075.41\n \nSource:Reserve Bank of Zimbabwe,2026\nNotes\n i. Monetary data was revised from September 2024 following the adoption of new reporting return submitted by banks. \n ii. The notable revision is on broad money stock (M3) which was revised downwards due to reclassification of Government foreign currency deposits held by banks from deposits included in broad money. \nTABLE 3 : OTHER DEPOSITORY CORPORATIONS SURVEY ( $ 'Million)\n \n \n15 \n \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\n Notes &\n&\nwith\nOther Depository \nwith\non\nLocal Governemt\nOther2\nGovernment\nLocal \nPublic \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nsecurities\nGovernment\nEnterprises\nTotal\nAssets\n2022\nJan\n2,891.2\n \n53,378.3\n \n116,654.8\n \n13,232.3\n \n69,668.2\n \n30,774.3\n40,241.6\n2.4\n186.8\n2,906.7\n20.3\n163.0\n4,023.2\n228,616.6\n16,284.0\n53,627.8\n55,303.6\n85,737.0\n773,712.0\nFeb\n2,577.7\n \n62,064.5\n \n122,479.8\n \n17,480.5\n \n76,802.2\n \n28,703.5\n49,241.8\n1.6\n0.0\n3,242.5\n20.3\n158.1\n5,761.9\n249,205.9\n16,681.8\n55,099.6\n59,171.4\n86,732.0\n835,425.0\nMar\n2,111.5\n \n76,544.2\n \n142,962.5\n \n19,239.6\n \n87,884.5\n \n43,284.1\n50,566.9\n0.9\n0.0\n2,970.2\n19.4\n253.4\n6,635.8\n296,282.4\n16,435.1\n65,660.6\n69,287.0\n94,293.1\n974,431.2\nApr\n2,624.9\n \n74,716.9\n \n160,466.5\n \n28,352.1\n \n123,190.3\n \n26,628.8\n63,944.8\n0.2\n0.0\n2,583.9\n37.5\n252.4\n7,258.1\n338,207.2\n30,154.8\n53,372.3\n73,993.0\n90,352.8\n1,076,136.5\nMay\n3,155.9\n \n142,118.9\n \n236,166.0\n \n35,928.9\n \n207,812.8\n \n61,757.6\n70,936.8\n0.0\n155.0\n3,762.8\n41.3\n289.0\n16,588.0\n455,287.9\n36,125.5\n134,993.5\n111,577.7\n130,617.1\n1,647,314.7\nJun\n2,801.2\n \n138,347.1\n \n266,691.8\n \n45,952.0\n \n241,920.1\n \n63,631.8\n86,890.0\n0.0\n654.0\n5,297.4\n61.2\n226.3\n14,282.6\n549,799.2\n38,578.3\n169,511.8\n130,604.3\n205,601.3\n1,960,850.3\nJul\n2,427.6\n \n159,024.6\n \n315,832.5\n \n39,388.2\n \n230,432.5\n \n41,246.8\n91,509.2\n0.0\n394.3\n4,940.5\n100.7\n349.7\n22,911.0\n638,556.7\n45,361.4\n144,090.2\n143,606.3\n242,024.6\n2,122,196.7\nAug\n2,640.6\n \n263,637.4\n \n411,439.9\n \n69,203.5\n \n311,107.0\n \n29,186.6\n100,187.1\n0.0\n330.1\n6,912.2\n113.5\n287.1\n46,504.1\n764,466.3\n46,788.2\n167,029.4\n251,442.9\n244,934.2\n2,716,210.1\nSep\n3,030.7\n \n289,230.8\n \n504,071.1\n \n75,446.7\n \n417,007.1\n \n18,185.0\n143,464.9\n0.0\n267.4\n8,265.9\n115.1\n306.3\n41,560.9\n902,078.3\n51,664.5\n146,133.1\n231,760.0\n285,781.8\n3,118,369.8\nOct\n3,022.6\n \n300,240.3\n \n525,870.3\n \n104,483.2\n \n389,979.7\n \n22,895.3\n151,757.7\n0.0\n204.7\n4,590.6\n116.5\n342.0\n43,335.5\n936,397.1\n58,632.8\n165,306.9\n267,183.8\n298,996.3\n3,273,355.4\nNov\n3,251.4\n \n286,365.2\n \n575,885.7\n \n111,716.1\n \n342,790.1\n \n17,089.0\n198,814.4\n0.0\n142.0\n6,078.2\n119.5\n303.6\n43,195.4\n1,042,144.5\n73,069.8\n170,944.8\n232,107.1\n302,373.7\n3,406,390.5\nDec\n3,361.7\n \n295,435.1\n \n652,284.4\n \n119,932.8\n \n351,906.8\n \n7,965.4\n288,844.0\n0.0\n20,072.7\n8,831.7\n114.4\n282.6\n30,272.3\n1,143,910.8\n84,048.5\n159,126.2\n234,748.7\n418,944.7\n3,820,082.5\n2023\nJan\n4,923.3\n \n379,841.7\n \n704,168.6\n \n151,980.1\n \n389,342.8\n \n-1,443.6\n319,807.4\n0.0\n23,774.5\n8,624.7\n228.5\n251.2\n44,113.2\n1,348,919.7\n137,477.6\n227,545.4\n251,246.0\n451,149.8\n4,441,950.8\nFeb\n1,880.1\n \n436,062.8\n \n743,888.5\n \n81,067.5\n \n518,081.0\n \n21,964.4\n332,626.9\n0.0\n26,717.2\n6,974.7\n319.0\n197.4\n44,691.5\n1,538,078.6\n142,383.8\n226,933.0\n281,339.4\n490,831.3\n4,894,037.1\nMar\n2,031.6\n \n425,326.5\n \n817,631.1\n \n112,374.3\n \n531,935.4\n \n41,928.7\n360,626.2\n0.0\n24,689.0\n10,382.7\n432.2\n149.8\n48,725.4\n1,745,783.1\n166,893.5\n554,840.9\n315,882.3\n532,130.1\n5,691,762.4\nApr\n1,844.7\n \n462,081.4\n \n972,122.7\n \n161,740.7\n \n620,095.0\n \n32,207.0\n391,587.8\n0.0\n28,119.0\n19,573.0\n559.8\n99.3\n54,058.4\n1,822,350.9\n178,895.0\n214,270.9\n411,870.0\n572,012.3\n5,943,487.7\nMay\n1,107.2\n \n1,048,116.4\n \n2,049,066.1\n \n309,234.1\n \n1,554,969.0\n \n84,147.3\n653,025.9\n0.0\n76,351.5\n16,564.4\n4,599.1\n80.3\n112,188.1\n4,068,894.1\n366,505.1\n607,438.1\n788,546.8\n884,349.9\n12,625,183.4\nJun\n1,984.5\n \n2,249,201.6\n \n4,424,350.0\n \n471,360.3\n \n3,050,984.1\n \n390,369.2\n981,773.8\n0.0\n212,126.8\n8,070.8\n18,582.4\n83.0\n260,946.3\n8,977,244.2\n669,100.1\n1,390,786.2\n1,582,985.5\n2,782,639.3\n27,472,588.1\nJul\n1,489.0\n \n1,584,403.3\n \n4,137,377.2\n \n380,493.0\n \n3,132,849.9\n \n369,552.6\n1,242,045.2\n0.0\n165,764.7\n17,713.9\n7,368.1\n68.1\n208,253.7\n7,144,225.5\n821,517.0\n829,382.3\n1,411,037.1\n3,124,457.4\n24,577,997.9\nAug\n2,292.1\n \n1,505,916.2\n \n4,651,358.8\n \n448,025.8\n \n3,179,274.3\n \n245,546.0\n1,190,599.0\n0.0\n165,103.2\n7,939.8\n7,469.9\n75.8\n205,341.5\n7,142,066.9\n817,682.7\n701,626.2\n1,348,230.8\n3,086,091.3\n24,704,640.2\nSep\n2,465.6\n \n2,015,621.6\n \n5,263,338.5\n \n560,033.8\n \n3,210,332.7\n \n305,649.1\n1,318,582.7\n0.0\n175,013.5\n10,773.5\n9,935.8\n92.0\n219,878.9\n8,628,418.0\n892,737.1\n776,997.6\n1,646,406.8\n3,310,710.4\n28,346,987.7\nOct\n2,425.4\n \n2,312,575.1\n \n5,910,277.9\n \n751,077.6\n \n2,663,186.5\n \n240,258.0\n1,272,839.7\n0.0\n190,359.3\n21,408.8\n10,816.8\n98.1\n237,525.7\n9,281,352.1\n844,462.4\n958,746.4\n1,741,207.9\n3,433,150.2\n29,871,767.9\nNov\n2,705.3\n \n2,558,589.3\n \n6,324,144.1\n \n730,377.0\n \n2,788,783.6\n \n230,917.5\n1,517,348.4\n0.0\n188,949.4\n34,470.7\n10,921.4\n59.8\n238,702.3\n9,523,818.5\n907,759.0\n1,046,257.0\n2,150,227.0\n3,544,388.6\n31,798,418.9\nDec\n3,398.4\n \n2,868,505.6\n \n5,973,706.9\n \n918,524.5\n \n2,631,445.7\n \n212,294.5\n2,627,512.6\n0.0\n182,480.9\n38,249.3\n12,325.3\n73.5\n248,699.8\n10,110,961.4\n984,502.1\n1,184,706.9\n2,319,603.9\n4,087,896.6\n34,404,887.7\n2024\nJan\n2,947.9\n \n5,196,670.6\n \n9,096,074.6\n \n1,414,527.9\n \n3,957,664.6\n \n326,220.5\n4,283,761.8\n0.0\n306,771.2\n57,595.6\n17,912.4\n198.8\n374,088.3\n16,298,021.8\n1,109,251.7\n1,949,662.4\n3,467,246.2\n5,133,753.8\n52,992,370.2\nFeb\n3,143.6\n \n7,309,077.0\n \n12,595,037.9\n \n2,395,225.7\n \n5,340,576.7\n \n178,130.4\n6,381,641.8\n0.0\n437,989.9\n78,292.7\n26,073.1\n232.0\n488,602.8\n24,095,690.3\n1,538,423.6\n2,608,075.1\n4,122,833.9\n6,863,317.4\n74,462,363.7\nMar\n2,831.0\n \n9,785,505.6\n \n16,734,744.0\n \n3,185,636.7\n \n7,548,560.1\n \n775,336.9\n8,605,206.6\n0.0\n585,769.6\n126,026.3\n47,609.3\n143.3\n729,484.9\n37,149,745.6\n2,535,252.5\n2,860,196.6\n5,844,376.9\n10,808,889.0\n107,325,315.0\nApr\n7.5\n \n4,794.8\n \n11,004.0\n \n2,108.7\n \n5,798.1\n \n354.3\n5,583.2\n0.0\n348.4\n37.2\n330.0\n1.8\n440.5\n22,799.4\n1,336.2\n2,510.2\n6,102.7\n5,490.3\n69,047.3\nMay\n15.0\n \n4,337.6\n \n12,420.7\n \n2,281.4\n \n6,437.2\n \n492.4\n5,867.7\n0.0\n339.6\n23.7\n49.4\n1.4\n433.4\n23,728.2\n1,520.6\n2,114.7\n7,240.8\n5,731.5\n73,035.2\nJun\n9.2\n \n4,753.1\n \n12,746.0\n \n2,349.5\n \n6,493.3\n \n409.0\n6,309.9\n0.0\n282.9\n32.6\n45.1\n1.5\n446.4\n25,292.4\n1,628.6\n2,541.3\n7,612.6\n6,871.1\n77,824.6\nJul\n7.5\n \n5,739.9\n \n11,453.3\n \n1,987.0\n \n6,135.6\n \n451.2\n7,706.6\n0.0\n276.2\n128.4\n45.6\n0.2\n432.4\n26,513.1\n2,454.9\n2,342.9\n8,065.1\n7,708.4\n81,448.2\nAug\n6.4\n \n6,444.9\n \n13,516.2\n \n2,310.5\n \n4,922.1\n \n205.9\n6,955.1\n0.0\n246.2\n100.5\n146.7\n0.2\n388.0\n27,463.6\n2,511.4\n2,767.9\n9,021.7\n8,363.7\n85,371.0\nSep\n7.9\n \n10,895.9\n \n22,399.7\n \n3,870.6\n \n8,728.6\n \n340.5\n10,929.4\n0.0\n431.0\n34.5\n281.9\n0.3\n610.8\n46,961.9\n3,924.3\n4,853.4\n13,635.1\n12,318.0\n140,223.9\nOct\n56.7\n \n13,662.1\n \n30,414.7\n \n5,068.5\n \n8,024.4\n \n129.1\n12,091.8\n0.0\n502.2\n53.5\n281.7\n0.1\n689.5\n54,229.9\n4,447.2\n6,380.1\n13,935.9\n13,802.2\n163,769.6\nNov\n72.6\n \n11,233.7\n \n29,835.6\n \n4,498.6\n \n6,365.0\n \n117.3\n10,509.5\n0.0\n367.6\n185.0\n2,660.3\n0.1\n582.5\n49,728.9\n4,261.8\n6,685.9\n14,193.4\n13,503.2\n154,800.9\nDec\n82.6\n \n10,274.6\n \n32,110.0\n \n5,538.7\n \n8,540.2\n \n287.6\n11,621.4\n0.0\n361.0\n79.0\n90.3\n0.6\n559.5\n51,561.9\n4,324.4\n6,555.3\n16,212.6\n14,183.7\n162,383.2\n2025\nJan\n69.3\n \n12,746.4\n \n30,180.7\n \n3,532.9\n \n6,021.2\n \n896.7\n13,393.7\n0.0\n0.0\n2,006.3\n342.9\n0.0\n558.4\n6,598.6\n45,645.3\n52,243.9\n4,743.0\n6,786.8\n10,675.6\n18,575.8\n162,773.4\nFeb\n75.0\n \n11,639.8\n \n28,998.1\n \n3,283.1\n \n8,161.6\n \n879.1\n12,742.2\n0.0\n0.0\n2,420.6\n525.2\n0.0\n546.0\n6,009.1\n46,847.7\n52,856.7\n4,830.3\n7,060.8\n8,636.7\n18,506.8\n161,162.0\nMar\n101.3\n \n9,242.7\n \n30,230.5\n \n3,610.1\n \n12,141.7\n \n820.1\n13,149.3\n0.0\n0.0\n2,701.4\n509.0\n0.0\n481.2\n5,364.5\n48,748.3\n54,112.8\n4,536.1\n7,859.2\n8,503.0\n19,297.8\n167,296.2\nApr\n107.4\n \n9,519.9\n \n33,479.3\n \n3,591.2\n \n12,582.7\n \n413.8\n13,219.6\n0.0\n0.0\n2,516.2\n478.0\n0.0\n462.3\n5,605.4\n52,416.4\n58,021.8\n4,214.0\n6,452.9\n11,508.1\n19,362.3\n175,929.4\nMay\n161.4\n \n8,665.8\n \n34,327.1\n \n3,618.3\n \n17,046.8\n \n419.6\n13,413.8\n0.0\n0.0\n2,354.6\n469.5\n0.0\n356.0\n6,417.7\n54,552.9\n60,970.5\n4,191.2\n7,163.7\n11,589.0\n19,259.1\n184,006.3\nJun\n212.5\n \n9,521.0\n \n35,799.3\n \n6,230.7\n \n15,373.4\n \n119.4\n15,011.1\n0.0\n0.0\n2,344.4\n508.8\n0.0\n338.7\n6,306.6\n56,337.6\n62,644.2\n6,770.3\n7,532.5\n10,182.1\n19,289.0\n191,877.5\nJul\n213.8\n \n9,541.1\n \n35,802.0\n \n6,242.3\n \n15,357.8\n \n119.4\n15,009.2\n0.0\n0.0\n2,344.4\n508.8\n0.0\n338.7\n6,306.6\n56,419.5\n62,726.1\n6,735.6\n7,493.6\n10,258.8\n19,318.5\n192,010.2\nAug\n226.2\n \n14,822.2\n \n36,977.1\n \n5,875.5\n \n10,221.8\n \n609.6\n15,264.2\n0.0\n0.0\n2,284.7\n540.4\n21.5\n243.0\n7,482.0\n56,642.4\n64,124.4\n8,139.8\n8,543.3\n11,926.7\n19,642.7\n199,463.2\nSep\n239.9\n \n15,521.3\n \n36,090.8\n \n4,591.7\n \n12,448.2\n \n921.9\n14,394.7\n0.0\n0.0\n2,385.7\n562.0\n18.8\n217.6\n7,300.0\n58,466.7\n65,766.7\n6,252.1\n8,537.4\n12,793.5\n20,013.7\n200,756.0\nOct\n251.3\n \n14,189.7\n \n36,754.9\n \n5,802.9\n \n12,553.0\n \n910.6\n14,979.4\n0.0\n0.0\n2,544.0\n539.2\n23.5\n459.1\n7,479.3\n60,433.5\n67,912.7\n5,513.5\n7,774.8\n12,321.7\n19,927.9\n202,458.5\nNov\n326.3\n \n14,165.5\n \n37,874.5\n \n6,578.1\n \n12,199.9\n \n828.0\n15,156.4\n0.0\n0.0\n2,490.1\n515.3\n23.7\n524.0\n7,149.7\n62,122.0\n69,271.7\n6,271.4\n9,054.8\n12,324.8\n19,793.3\n207,398.0\nDec\n369.8\n \n15,140.9\n \n39,886.1\n \n4,131.9\n \n11,461.7\n \n820.0\n16,587.4\n0.0\n0.0\n3,130.2\n453.9\n20.8\n652.2\n7,188.3\n61,788.6\n68,976.9\n5,263.1\n8,262.1\n11,058.7\n20,241.9\n206,457.4\n2026\nJan\n380.2\n \n20,317.6\n \n36,537.8\n \n5,100.6\n \n10,727.9\n \n703.5\n16,129.5\n0.0\n0.0\n3,048.8\n429.8\n23.3\n1,510.5\n6,790.3\n60,731.1\n67,521.4\n5,351.0\n8,573.5\n11,450.3\n20,022.9\n207,828.5\nSource:Reserve Bank of Zimbabwe, 2026\nNotes\ni.Government securities includes treasuary bills and bonds\nii.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\nii.Includes households, other financial corporations.\n*Statistics are denominated in ZiG\nPublic Enterprises\nDebt Securities\nLoans and Advances\nGovernment1 \nSecurities\nOther Institutional Units\nForeign \nCurrency \nDenominated\n ZiG \nDenominated\nTABLE 4.1 : OTHER DEPOSITORY CORPORATIONS - ASSETS\nMillions\n \n \n16 \n \n \n \nEnd of\nTotal Deposits\nof which FCA\n2022\nJan\n392,702.2\n32,298.0\n39,346.3\n464,346.5\n2,962.5\n4,027.0\n471,336.0\n3,685.3\n25,398.5\n2,688.6\n1,416.9\n230.5\n144,852.4\n53,627.8\n70,476.0\n773,712.0\nFeb\n413,978.3\n37,494.3\n47,592.5\n499,065.1\n3,229.3\n4,407.7\n506,702.1\n4,456.2\n30,483.6\n2,120.4\n1,769.7\n226.8\n153,788.5\n55,099.6\n80,778.2\n835,425.0\nMar\n488,137.1\n37,893.9\n54,213.9\n580,244.9\n3,062.2\n5,330.5\n588,637.7\n4,510.9\n33,995.7\n2,137.9\n3,281.0\n810.6\n175,156.3\n65,660.6\n100,240.6\n974,431.2\nApr\n562,613.7\n46,129.7\n52,760.1\n661,503.5\n6,377.5\n7,656.8\n675,537.9\n4,246.9\n38,472.7\n2,173.0\n3,877.2\n486.8\n178,614.3\n53,372.3\n119,355.4\n1,076,136.5\nMay\n830,166.0\n61,112.6\n70,113.9\n961,392.5\n7,310.9\n7,417.6\n976,120.9\n6,165.3\n73,411.8\n2,383.3\n3,241.0\n321.8\n243,544.4\n134,993.5\n207,132.5\n1,647,314.7\nJun\n961,316.9\n66,716.9\n81,118.5\n1,109,152.4\n5,627.3\n10,226.2\n1,125,005.9\n7,157.9\n83,048.1\n2,898.5\n4,589.8\n345.2\n355,060.9\n169,511.8\n213,232.2\n1,960,850.3\nJul\n1,016,820.2\n79,550.5\n94,495.2\n1,190,865.8\n1,789.6\n9,363.5\n1,202,018.9\n8,137.9\n100,313.8\n2,814.9\n5,020.5\n1,339.1\n419,883.3\n144,090.2\n238,578.1\n2,122,196.7\nAug\n1,367,431.3\n85,931.5\n134,512.9\n1,587,875.7\n2,415.4\n7,892.4\n1,598,183.5\n12,785.6\n119,851.6\n3,230.7\n5,771.2\n555.2\n491,336.5\n167,029.4\n317,466.4\n2,716,210.1\nSep\n1,648,027.7\n92,678.5\n157,504.6\n1,898,210.8\n1,482.9\n8,707.2\n1,908,401.0\n14,047.5\n143,842.3\n3,720.2\n9,246.7\n587.2\n553,942.2\n146,133.1\n338,449.6\n3,118,369.8\nOct\n1,615,381.5\n76,774.2\n166,880.7\n1,859,036.4\n2,028.0\n6,673.7\n1,867,738.0\n15,558.9\n153,649.9\n28,072.2\n8,610.3\n762.5\n581,740.3\n165,306.9\n451,916.4\n3,273,355.4\nNov\n1,771,644.8\n81,518.1\n189,465.9\n2,042,628.9\n1,547.6\n6,731.4\n2,050,907.9\n13,438.5\n139,370.8\n19,973.5\n10,489.1\n339.6\n612,977.2\n170,944.8\n387,949.1\n3,406,390.5\nDec\n1,990,867.6\n90,317.0\n234,004.4\n2,315,189.0\n2,754.1\n7,866.7\n2,325,809.8\n14,149.0\n177,214.1\n10,597.8\n15,234.4\n752.5\n750,161.5\n159,126.2\n367,037.4\n3,820,082.5\n2023\nJan\n2,270,946.6\n100,094.1\n275,805.1\n2,646,845.8\n1,676.5\n41,821.3\n2,690,343.7\n15,056.5\n196,129.5\n4,974.3\n12,291.7\n675.5\n881,874.7\n227,545.4\n413,059.5\n4,441,950.8\nFeb\n2,496,192.1\n98,177.2\n294,332.5\n2,888,701.8\n1,956.9\n11,040.2\n2,901,698.9\n15,711.7\n225,209.4\n8,092.9\n20,822.5\n3,109.0\n951,831.6\n226,933.0\n540,628.1\n4,894,037.1\nMar\n2,710,394.6\n121,937.7\n333,589.3\n3,165,921.6\n1,430.8\n6,188.7\n3,173,541.1\n16,082.6\n256,206.0\n9,639.9\n22,996.8\n3,714.6\n1,036,325.4\n554,840.9\n618,415.2\n5,691,762.4\nApr\n3,144,048.4\n159,872.5\n269,932.0\n3,573,852.9\n573.4\n9,702.2\n3,584,128.5\n1,843.4\n318,092.2\n13,321.9\n29,787.9\n6,418.8\n1,137,637.3\n214,270.9\n637,986.8\n5,943,487.7\nMay\n6,481,742.5\n169,496.7\n556,927.2\n7,208,166.4\n1,068.6\n50,511.7\n7,259,746.7\n4,659.4\n783,531.0\n78,332.6\n74,083.0\n30,583.3\n2,224,856.6\n607,438.1\n1,561,952.6\n12,625,183.4\nJun\n12,937,869.2\n240,252.2\n1,073,317.8\n14,251,439.2\n4,578.8\n432,610.2\n14,688,628.1\n4,243.6\n1,833,341.2\n39,166.6\n112,338.9\n64,321.9\n6,245,056.0\n1,390,786.2\n3,094,705.7\n27,472,588.1\nJul\n11,864,787.9\n285,723.5\n828,095.7\n12,978,607.1\n30,380.7\n380,435.8\n13,389,423.7\n2,137.4\n1,458,906.6\n87,827.2\n160,696.4\n58,256.2\n5,865,068.7\n829,382.3\n2,726,299.5\n24,577,997.9\nAug\n12,168,928.8\n353,674.2\n862,852.8\n13,385,455.8\n23,457.8\n381,525.5\n13,790,439.1\n3,182.7\n1,483,108.2\n84,841.4\n154,160.3\n56,751.6\n5,646,934.2\n701,626.2\n2,783,596.5\n24,704,640.2\nSep\n14,342,241.3\n404,040.4\n947,184.1\n15,693,465.8\n11,309.1\n114,502.6\n15,819,277.6\n2,685.5\n1,688,992.2\n82,493.4\n168,880.8\n90,032.4\n6,410,594.6\n776,997.6\n3,307,033.6\n28,346,987.7\nOct\n15,103,817.1\n439,336.7\n1,190,702.7\n16,733,856.4\n8,575.8\n147,053.3\n16,889,485.5\n3,497.2\n1,573,857.1\n84,628.9\n176,455.5\n83,441.8\n6,756,087.7\n958,746.4\n3,345,567.7\n29,871,767.9\nNov\n15,816,643.6\n534,621.6\n1,241,055.7\n17,592,320.9\n92,509.4\n133,475.4\n17,818,305.6\n4,173.2\n1,784,153.1\n92,939.9\n244,115.1\n89,997.7\n7,059,070.8\n1,046,257.0\n3,659,406.4\n31,798,418.9\nDec\n16,937,697.1\n613,283.2\n1,290,630.5\n18,841,610.7\n94,004.9\n201,484.9\n19,137,100.5\n42,811.4\n1,831,385.7\n55,157.4\n162,437.9\n138,722.6\n7,736,287.7\n1,184,706.9\n4,116,277.7\n34,404,887.7\n2024\nJan\n26,686,959.6\n746,212.0\n1,754,255.7\n29,187,427.3\n113,265.9\n169,629.6\n29,470,322.8\n7,317.9\n3,007,687.4\n114,298.0\n290,202.8\n182,727.0\n11,623,761.9\n1,949,662.4\n6,346,389.9\n52,992,370.2\nFeb\n36,944,811.1\n818,341.2\n2,810,669.8\n40,573,822.1\n177,789.1\n340,577.8\n41,092,189.0\n9,458.4\n4,421,333.7\n105,237.1\n454,842.1\n279,727.9\n16,146,119.3\n2,608,075.1\n9,345,381.2\n74,462,363.7\nMar\n53,801,105.7\n857,520.8\n4,468,346.0\n59,126,972.5\n275,444.0\n515,567.0\n59,917,983.5\n6,990.9\n6,535,789.0\n95,705.0\n506,746.6\n361,061.7\n24,968,710.0\n2,860,196.6\n12,072,131.8\n107,325,315.0\n*Apr\n35,042.5\n873.5\n2,711.3\n38,627.3\n161.4\n242.9\n39,031.6\n2.8\n4,126.0\n67.4\n358.1\n222.7\n12,859.8\n2,510.2\n9,868.8\n69,047.3\n*May\n36,571.3\n797.4\n3,283.3\n40,652.0\n82.8\n350.0\n41,084.8\n4.4\n4,422.7\n50.9\n436.0\n4.6\n15,110.7\n2,114.7\n9,806.4\n73,035.2\n*Jun\n37,665.2\n1,045.3\n3,824.5\n42,535.1\n2.1\n589.3\n43,126.4\n4.0\n4,813.9\n99.8\n450.6\n13.2\n17,940.3\n2,541.3\n8,835.0\n77,824.6\n*Jul\n40,332.2\n1,410.3\n3,894.3\n45,636.8\n68.7\n438.6\n46,144.1\n19.2\n4,842.5\n99.9\n483.0\n12.0\n18,795.9\n2,342.9\n8,708.8\n81,448.2\n*Aug\n40,849.7\n1,585.3\n3,882.8\n46,317.8\n65.6\n532.9\n46,916.3\n26.6\n4,889.9\n109.9\n602.1\n12.5\n20,035.9\n2,767.9\n10,009.9\n85,371.0\n*Sep\n66,835.5\n1,858.6\n5,872.5\n74,566.6\n99.2\n583.3\n75,249.0\n23.8\n8,701.5\n491.4\n860.8\n51.1\n34,201.4\n4,853.4\n15,791.4\n140,223.9\n*Oct\n76,868.7\n2,162.8\n7,903.0\n86,934.5\n257.1\n627.5\n87,819.1\n42.7\n9,987.1\n429.7\n1,310.2\n16.1\n39,650.6\n6,380.1\n18,134.0\n163,769.6\n*Nov\n72,575.6\n2,470.1\n7,734.9\n82,780.6\n202.6\n677.2\n83,660.4\n0.0\n8,441.5\n409.3\n568.8\n42.7\n38,968.8\n6,685.9\n16,023.6\n154,800.9\n*Dec\n76,723.8\n2,290.2\n8,197.9\n87,211.9\n205.6\n716.4\n88,133.9\n0.0\n9,510.9\n233.0\n856.2\n112.5\n39,782.4\n6,555.3\n17,199.0\n162,383.2\n2025\n*Jan\n68,409.5\n1,912.4\n7,835.3\n78,157.2\n1,164.8\n8,148.8\n87,470.8\n64365.68\n0.0\n12,797.2\n488.2\n969.1\n40.9\n38,608.5\n6,786.8\n15,612.0\n162,773.4\n*Feb\n67,429.9\n1,989.7\n8,910.2\n78,329.8\n759.7\n7,486.5\n86,576.0\n63840.63\n0.0\n12,512.6\n536.9\n1,154.7\n232.8\n39,664.8\n7,060.8\n13,423.4\n161,162.0\n*Mar\n72,624.4\n2,009.1\n8,581.5\n83,215.0\n248.3\n7,714.7\n91,178.1\n68486.59\n0.0\n13,321.0\n541.7\n801.1\n52.6\n40,610.2\n7,859.2\n12,932.3\n167,296.2\n*Apr\n74,443.6\n2,224.9\n10,174.2\n86,842.8\n255.1\n10,839.6\n97,937.5\n70754.40\n0.0\n13,415.3\n544.2\n970.0\n57.6\n41,163.7\n6,452.9\n15,388.2\n175,929.4\n*May\n78,625.7\n2,690.8\n11,316.1\n92,632.6\n709.1\n11,890.3\n105,232.0\n75289.91\n0.0\n15,138.7\n160.1\n720.7\n129.8\n41,478.2\n7,163.7\n13,983.1\n184,006.3\n*Jun\n81,706.3\n2,509.7\n12,788.2\n97,004.2\n820.4\n13,980.0\n111,804.6\n79877.48\n0.0\n14,145.4\n149.0\n1,209.8\n154.5\n42,450.7\n7,532.5\n14,430.8\n191,877.5\n*Jul\n81,849.8\n2,526.2\n12,815.1\n97,191.1\n820.4\n13,980.0\n111,991.4\n79949.49\n0.0\n14,120.4\n149.0\n1,173.2\n154.5\n42,508.9\n7,493.6\n14,419.0\n192,010.2\n*Aug\n81,741.3\n2,305.2\n14,473.0\n98,519.6\n1,264.7\n12,265.2\n112,049.5\n81435.72\n0.0\n15,170.3\n156.5\n1,358.8\n219.1\n45,558.0\n8,543.3\n16,407.7\n199,463.2\n*Sept\n81,151.4\n2,820.5\n15,030.9\n99,002.7\n1,065.9\n15,171.4\n115,240.0\n82111.54\n0.0\n16,355.4\n143.4\n1,444.0\n72.0\n45,390.8\n8,537.4\n13,573.1\n200,756.0\n*Oct\n85,790.6\n2,916.7\n16,419.6\n105,126.9\n701.9\n14,628.2\n120,457.0\n86902.70\n0.0\n13,853.1\n184.1\n1,666.8\n186.6\n46,041.1\n7,774.8\n12,295.0\n202,458.5\n*Nov\n86,759.2\n2,745.1\n15,787.6\n105,291.9\n502.9\n13,299.6\n119,094.4\n86221.66\n126.1\n15,953.3\n107.1\n1,655.6\n291.7\n44,855.4\n9,054.8\n16,259.5\n207,398.0\n*Dec\n86,907.8\n4,204.8\n16,340.8\n107,453.3\n432.0\n13,268.1\n121,153.4\n87388.85\n120.3\n17,526.4\n62.6\n1,329.8\n319.4\n43,314.2\n8,262.1\n14,369.4\n206,457.4\n2026\n*Jan\n86,844.3\n4,316.5\n17,273.6\n108,434.4\n434.9\n13,998.6\n122,867.9\n89192.45\n118.6\n16,565.0\n60.4\n1,099.3\n332.4\n42,559.9\n8,573.5\n15,651.6\n207,828.5\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\nTOTAL\nTime Deposits\nSavings\nDemand\nGovernment \nOther Finacial \nCorporations\nCapital and \nReserves\nContigent \nLiabilities\nOther \nLiabilities\nOther \nDepository \nTotal Deposits from \nthe Public \nOther Depository \nCorporations\nDebt Securities\nForeign \nLiabilities\nRBZ\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\nZWG millions\n \n \n17 \n \n \n \nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nGovernment\nGovernment\nEnterprises\nLoans in ZiG\nLoans in Foreign Currency\nTotal\nOther claims\nAssets\nOther Assets\nAssets\nTOTAL\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2022\nJan\n2,359.27\n \n49,206.02\n \n108,119.97\n \n10,419.90\n \n66,808.45\n \n30,774.31\n \n38,636.84\n \n-\n \n186.80\n \n801.50\n \n20.33\n \n163.02\n \n3,628.73\n \n199,495.34\n \n2,997.94\n \n53,627.76\n \n47,405.91\n \n69,989.80\n \n684,641.9\n \nFeb\n1,971.78\n \n57,553.54\n \n112,522.99\n \n14,300.66\n \n70,750.63\n \n28,703.53\n \n44,705.21\n \n-\n \n-\n \n976.55\n \n20.34\n \n158.06\n \n5,367.16\n \n215,520.37\n \n3,055.50\n \n55,099.61\n \n53,459.12\n \n70,832.47\n \n734,997.5\n \nMar\n1,541.49\n \n70,856.33\n \n130,423.48\n \n15,503.46\n \n82,662.70\n \n43,284.13\n \n44,874.23\n \n-\n \n-\n \n1,380.20\n \n19.40\n \n253.42\n \n6,240.94\n \n258,715.05\n \n3,092.69\n \n65,660.61\n \n58,874.69\n \n76,938.87\n \n860,321.7\n \nApr\n1,939.64\n \n70,204.43\n \n144,168.02\n \n23,452.88\n \n117,033.42\n \n26,628.79\n \n57,772.47\n \n-\n \n-\n \n722.54\n \n37.54\n \n252.44\n \n6,858.06\n \n305,476.79\n \n4,348.46\n \n53,372.28\n \n62,788.55\n \n71,414.75\n \n946,471.1\n \nMay\n2,397.94\n \n131,996.38\n \n211,837.59\n \n31,586.61\n \n190,366.81\n \n61,757.62\n \n64,373.91\n \n-\n \n154.99\n \n1,559.14\n \n41.28\n \n289.00\n \n16,193.81\n \n398,048.90\n \n4,712.74\n \n134,993.54\n \n94,851.60\n \n111,543.84\n \n1,456,705.7\n \nJun\n2,263.18\n \n127,839.16\n \n234,109.43\n \n40,937.28\n \n219,607.39\n \n63,631.76\n \n83,690.44\n \n-\n \n653.97\n \n2,159.12\n \n61.20\n \n226.29\n \n13,888.60\n \n478,163.38\n \n8,954.46\n \n169,511.81\n \n110,528.09\n \n168,440.54\n \n1,724,666.1\n \nJul\n1,578.47\n \n147,217.74\n \n284,912.89\n \n34,334.13\n \n202,815.28\n \n41,246.78\n \n86,971.63\n \n-\n \n394.34\n \n1,852.14\n \n100.65\n \n349.68\n \n22,516.21\n \n556,692.12\n \n9,737.92\n \n144,090.18\n \n129,869.55\n \n192,524.32\n \n1,857,204.0\n \nAug\n1,630.70\n \n247,190.46\n \n377,078.80\n \n64,650.96\n \n273,181.97\n \n29,186.59\n \n95,346.12\n \n-\n \n330.12\n \n3,556.96\n \n113.50\n \n287.14\n \n26,564.57\n \n681,253.30\n \n11,493.92\n \n167,029.36\n \n238,442.98\n \n194,745.11\n \n2,412,082.6\n \nSep\n1,791.71\n \n270,594.59\n \n465,301.31\n \n68,020.95\n \n370,323.69\n \n18,184.96\n \n134,414.53\n \n-\n \n267.40\n \n4,916.56\n \n115.11\n \n306.33\n \n21,773.50\n \n806,774.24\n \n12,680.89\n \n146,133.14\n \n215,417.68\n \n219,933.24\n \n2,756,949.8\n \nOct\n1,704.79\n \n281,204.64\n \n480,106.49\n \n94,573.08\n \n343,440.15\n \n22,895.35\n \n136,939.74\n \n-\n \n204.69\n \n2,201.55\n \n116.48\n \n341.96\n \n22,935.50\n \n852,069.39\n \n15,525.65\n \n165,306.91\n \n232,188.99\n \n245,924.22\n \n2,897,679.6\n \nNov\n1,644.95\n \n259,109.18\n \n533,438.97\n \n101,870.32\n \n299,715.01\n \n17,089.04\n \n180,534.44\n \n-\n \n141.97\n \n2,292.28\n \n119.53\n \n303.55\n \n22,178.73\n \n960,814.77\n \n15,450.39\n \n170,944.78\n \n196,338.19\n \n250,551.19\n \n3,012,537.3\n \nDec\n1,778.71\n \n263,863.65\n \n603,136.26\n \n110,935.77\n \n299,087.30\n \n7,965.37\n \n266,725.41\n \n-\n \n79.26\n \n3,887.78\n \n114.42\n \n282.61\n \n30,272.25\n \n1,066,654.12\n \n16,130.63\n \n159,126.16\n \n189,560.01\n \n344,235.10\n \n3,363,834.8\n \n2023\nJan\n2,391.61\n \n340,953.56\n \n654,740.29\n \n143,455.70\n \n335,380.17\n \n(1,443.59)\n \n301,026.07\n \n-\n \n105.97\n \n4,873.87\n \n228.45\n \n251.24\n \n44,113.17\n \n1,307,512.98\n \n17,767.70\n \n227,545.42\n \n204,830.78\n \n374,080.77\n \n3,957,814.2\n \nFeb\n1,470.56\n \n366,544.71\n \n691,937.49\n \n71,097.36\n \n452,795.43\n \n21,074.53\n \n306,913.92\n \n-\n \n50.02\n \n1,524.98\n \n318.96\n \n197.44\n \n44,691.50\n \n1,481,851.05\n \n18,037.18\n \n226,932.96\n \n224,983.29\n \n411,002.80\n \n4,321,424.2\n \nMar\n1,771.98\n \n344,570.46\n \n755,463.34\n \n103,284.07\n \n478,333.21\n \n41,928.66\n \n330,669.68\n \n-\n \n-\n \n3,884.11\n \n432.22\n \n149.78\n \n48,725.38\n \n1,679,284.89\n \n28,439.56\n \n554,840.85\n \n254,605.57\n \n438,790.17\n \n5,065,173.9\n \nApr\n1,631.24\n \n388,822.83\n \n903,029.49\n \n144,252.31\n \n555,886.92\n \n32,206.95\n \n361,846.09\n \n-\n \n-\n \n8,716.45\n \n559.82\n \n99.28\n \n54,058.39\n \n1,722,384.40\n \n28,899.91\n \n214,270.92\n \n321,765.39\n \n476,263.19\n \n5,214,693.6\n \nMay\n1,010.26\n \n907,818.70\n \n1,932,225.57\n \n281,052.93\n \n1,351,116.97\n \n84,147.32\n \n570,367.60\n \n-\n \n-\n \n8,974.78\n \n4,599.15\n \n80.34\n \n112,188.06\n \n3,844,133.80\n \n65,696.39\n \n607,438.10\n \n669,908.72\n \n758,154.17\n \n11,198,912.9\n \nJun\n1,762.11\n \n1,979,000.71\n \n4,218,755.04\n \n444,538.09\n \n2,584,596.63\n \n350,042.51\n \n865,465.55\n \n-\n \n-\n \n221.09\n \n10,133.46\n \n8,052.34\n \n260,946.26\n \n8,487,837.63\n \n92,224.26\n \n1,390,786.24\n \n1,304,228.92\n \n2,222,499.38\n \n24,221,090.2\n \nJul\n1,305.13\n \n1,428,604.02\n \n3,898,282.53\n \n359,151.15\n \n2,646,743.26\n \n337,541.82\n \n1,133,463.14\n \n-\n \n-\n \n153.30\n \n7,368.09\n \n68.07\n \n208,253.70\n \n6,917,007.30\n \n129,308.58\n \n829,382.28\n \n1,155,945.57\n \n2,438,538.20\n \n21,491,116.1\n \nAug\n1,664.09\n \n1,370,651.81\n \n4,309,693.74\n \n391,792.23\n \n2,693,989.06\n \n208,098.88\n \n1,084,784.90\n \n-\n \n-\n \n138.30\n \n7,469.95\n \n75.80\n \n205,341.47\n \n6,863,348.14\n \n127,816.16\n \n701,626.16\n \n1,081,800.09\n \n2,446,465.02\n \n21,494,755.8\n \nSep\n1,503.56\n \n1,763,364.33\n \n4,914,305.55\n \n517,813.92\n \n2,760,807.78\n \n247,094.60\n \n1,204,684.14\n \n-\n \n-\n \n9.75\n \n9,935.82\n \n92.05\n \n219,878.94\n \n8,245,053.80\n \n151,685.43\n \n776,997.57\n \n1,312,147.78\n \n2,668,520.81\n \n24,793,895.8\n \nOct\n1,977.18\n \n2,059,471.85\n \n5,625,069.70\n \n562,790.91\n \n2,202,475.21\n \n175,235.94\n \n1,172,130.22\n \n-\n \n-\n \n0.03\n \n10,816.83\n \n98.06\n \n237,525.73\n \n8,864,363.09\n \n153,534.70\n \n958,746.42\n \n1,351,846.54\n \n2,767,099.33\n \n26,143,181.7\n \nNov\n2,295.18\n \n2,278,921.91\n \n5,913,094.15\n \n568,556.41\n \n2,451,981.00\n \n180,229.25\n \n1,337,040.40\n \n-\n \n-\n \n0.03\n \n10,921.42\n \n59.77\n \n238,702.30\n \n9,040,518.08\n \n158,702.11\n \n1,046,256.98\n \n1,702,370.26\n \n2,868,031.98\n \n27,797,681.2\n \nDec\n2,947.49\n \n2,536,437.97\n \n5,489,443.24\n \n657,432.63\n \n2,268,702.96\n \n155,742.88\n \n2,420,663.39\n \n-\n \n-\n \n0.03\n \n12,324.59\n \n73.45\n \n248,699.79\n \n9,507,281.46\n \n255,007.08\n \n1,184,706.91\n \n1,748,495.98\n \n3,349,062.31\n \n29,837,022.2\n \n2024\nJan\n2,536.36\n \n4,749,173.95\n \n8,535,153.83\n \n940,210.80\n \n3,564,879.01\n \n285,807.60\n \n3,972,600.87\n \n-\n \n-\n \n0.03\n \n17,912.41\n \n198.80\n \n374,088.29\n \n14,957,169.30\n \n312,516.30\n \n1,949,662.45\n \n2,737,500.88\n \n4,289,981.53\n \n46,689,392.4\n \nFeb\n2,519.25\n \n6,564,463.71\n \n11,709,703.62\n \n1,772,649.65\n \n4,708,270.62\n \n153,450.01\n \n5,911,393.45\n \n-\n \n-\n \n0.03\n \n26,073.06\n \n232.00\n \n488,602.76\n \n22,234,523.09\n \n378,975.16\n \n2,608,075.14\n \n3,125,793.33\n \n5,812,047.28\n \n65,496,772.2\n \nMar\n2,435.72\n \n8,601,285.46\n \n15,501,059.95\n \n2,213,233.27\n \n6,701,169.42\n \n775,336.87\n \n8,098,495.31\n \n-\n \n-\n \n0.03\n \n47,609.35\n \n143.35\n \n729,484.92\n \n34,077,197.02\n \n597,886.20\n \n2,860,196.61\n \n4,317,386.46\n \n8,974,860.63\n \n93,497,780.6\n \nApr\n5.89\n \n4,141.51\n \n9,980.68\n \n1,414.28\n \n5,461.70\n \n287.09\n \n5,206.08\n \n-\n \n-\n \n0.00\n \n31.18\n \n88.00\n \n440.49\n \n20,170.86\n \n246.21\n \n2,510.15\n \n5,472.97\n \n4,360.99\n \n59,818.1\n \nMay\n10.60\n \n3,583.02\n \n11,575.45\n \n1,506.01\n \n6,092.37\n \n382.87\n \n5,420.56\n \n-\n \n-\n \n0.00\n \n29.63\n \n1.37\n \n433.36\n \n21,315.87\n \n348.50\n \n2,114.73\n \n6,339.55\n \n4,613.87\n \n63,767.8\n \nJun\n8.01\n \n4,111.49\n \n11,498.97\n \n1,627.32\n \n5,775.34\n \n298.05\n \n6,080.69\n \n-\n \n-\n \n7.23\n \n24.70\n \n1.49\n \n446.45\n \n22,801.09\n \n345.72\n \n2,541.32\n \n6,558.03\n \n5,419.46\n \n67,545.3\n \nJul\n5.05\n \n4,943.82\n \n10,426.18\n \n1,342.47\n \n5,743.94\n \n351.44\n \n6,988.99\n \n-\n \n0.00\n \n5.21\n \n25.13\n \n0.16\n \n432.35\n \n24,895.03\n \n348.09\n \n2,342.85\n \n6,539.59\n \n6,244.23\n \n70,634.5\n \nAug\n5.26\n \n5,703.86\n \n12,540.81\n \n1,453.04\n \n4,411.38\n \n205.93\n \n6,149.38\n \n-\n \n-\n \n2.43\n \n126.05\n \n0.19\n \n378.05\n \n25,591.15\n \n542.15\n \n2,767.89\n \n7,004.36\n \n6,832.60\n \n73,714.5\n \nSep\n6.82\n \n9,465.31\n \n20,161.22\n \n2,742.22\n \n7,903.81\n \n340.45\n \n10,295.58\n \n-\n \n-\n \n0.00\n \n244.94\n \n0.33\n \n600.93\n \n43,094.11\n \n979.13\n \n4,853.44\n \n11,326.85\n \n9,785.35\n \n121,800.5\n \nOct\n39.65\n \n12,315.40\n \n27,597.64\n \n3,670.13\n \n7,120.62\n \n129.14\n \n11,256.45\n \n-\n \n-\n \n0.00\n \n239.01\n \n0.08\n \n679.62\n \n49,545.16\n \n1,042.81\n \n6,380.10\n \n11,454.83\n \n11,116.57\n \n142,587.2\n \nNov\n58.26\n \n10,111.62\n \n27,498.54\n \n3,102.17\n \n5,626.08\n \n117.33\n \n9,757.48\n \n-\n \n0.00\n \n0.00\n \n287.55\n \n2,326.36\n \n572.57\n \n45,782.99\n \n1,064.73\n \n6,685.94\n \n11,362.33\n \n10,783.91\n \n135,137.8\n \nDec\n64.89\n \n8,774.50\n \n29,312.78\n \n3,217.87\n \n7,673.17\n \n287.57\n \n10,942.77\n \n-\n \n0.00\n \n8.29\n \n54.88\n \n0.57\n \n549.66\n \n46,926.14\n \n1,073.63\n \n6,555.30\n \n13,399.70\n \n11,326.46\n \n140,168.2\n \n2025\nJan\n55.47\n \n11,470.10\n \n27,587.58\n \n2,805.14\n \n5,383.93\n \n896.67\n \n12,362.23\n \n-\n \n-\n \n807.94\n \n342.87\n \n-\n \n201.82\n \n6,018.68\n \n38,456.08\n \n44,474.76\n \n4,490.04\n \n6,786.76\n \n7,296.77\n \n14,700.77\n \n139,662.8\n \nFeb\n60.09\n \n10,394.10\n \n26,074.71\n \n2,500.83\n \n7,466.49\n \n879.05\n \n11,985.91\n \n-\n \n-\n \n1,227.40\n \n525.19\n \n-\n \n210.91\n \n5,135.14\n \n39,602.20\n \n44,737.33\n \n4,572.78\n \n7,060.84\n \n6,529.15\n \n14,603.01\n \n138,827.8\n \nMar\n79.63\n \n7,880.54\n \n27,417.58\n \n2,717.51\n \n11,623.76\n \n820.11\n \n12,300.30\n \n-\n \n-\n \n1,342.02\n \n509.01\n \n-\n \n196.72\n \n4,699.08\n \n40,942.54\n \n45,641.63\n \n4,354.50\n \n7,859.25\n \n6,540.97\n \n15,243.80\n \n144,527.3\n \nApr\n87.99\n \n8,108.02\n \n30,664.80\n \n2,649.20\n \n12,068.34\n \n413.80\n \n12,241.98\n \n-\n \n-\n \n1,095.15\n \n478.00\n \n-\n \n177.77\n \n4,854.99\n \n44,593.50\n \n49,448.49\n \n4,042.90\n \n6,452.91\n \n9,497.37\n \n15,304.56\n \n152,731.3\n \nMay\n133.33\n \n7,539.98\n \n31,081.99\n \n2,649.42\n \n16,140.56\n \n419.60\n \n12,259.88\n \n-\n \n-\n \n953.79\n \n469.51\n \n-\n \n151.74\n \n5,278.01\n \n46,383.60\n \n51,661.61\n \n3,991.35\n \n7,163.66\n \n9,319.35\n \n15,249.33\n \n159,185.1\n \nJun\n181.74\n \n8,374.10\n \n32,527.57\n \n5,410.98\n \n14,549.70\n \n119.42\n \n13,604.07\n \n-\n \n-\n \n992.17\n \n508.81\n \n-\n \n141.15\n \n5,228.09\n \n47,537.52\n \n52,765.60\n \n6,477.32\n \n7,532.53\n \n8,140.55\n \n15,060.65\n \n166,386.4\n \nJul\n183.05\n \n8,394.26\n \n32,530.27\n \n5,422.55\n \n14,534.13\n \n119.42\n \n13,602.14\n \n-\n \n-\n \n992.17\n \n508.81\n \n-\n \n141.15\n \n5,228.09\n \n47,619.44\n \n52,847.52\n \n6,442.57\n \n7,493.64\n \n8,217.25\n \n15,090.15\n \n166,519.1\n \nAug\n193.19\n \n13,295.37\n \n33,500.18\n \n4,346.93\n \n8,753.41\n \n609.59\n \n14,232.02\n \n-\n \n-\n \n583.16\n \n540.44\n \n21.46\n \n129.27\n \n6,419.77\n \n47,719.81\n \n54,139.58\n \n7,481.64\n \n8,543.31\n \n9,652.13\n \n15,411.88\n \n171,433.6\n \nSep\n201.68\n \n13,950.40\n \n32,362.47\n \n3,553.93\n \n11,188.77\n \n921.94\n \n13,421.60\n \n-\n \n-\n \n757.44\n \n561.95\n \n18.84\n \n110.22\n \n6,020.45\n \n49,450.81\n \n55,471.26\n \n5,730.80\n \n8,537.36\n \n10,340.98\n \n15,804.22\n \n172,933.8\n \nOct\n204.51\n \n12,507.21\n \n32,947.48\n \n4,526.89\n \n11,385.81\n \n910.64\n \n14,013.13\n \n-\n \n-\n \n655.59\n \n539.19\n \n23.48\n \n267.06\n \n6,236.10\n \n51,566.50\n \n57,802.60\n \n4,997.85\n \n7,774.84\n \n9,423.21\n \n16,097.87\n \n174,077.4\n \nNov\n263.56\n \n12,673.29\n \n33,851.53\n \n5,484.35\n \n10,816.26\n \n828.03\n \n14,055.20\n \n-\n \n-\n \n649.51\n \n515.30\n \n23.74\n \n327.36\n \n5,880.27\n \n53,183.11\n \n59,063.39\n \n5,737.74\n \n9,054.80\n \n9,275.53\n \n15,949.32\n \n178,568.9\n \nDec\n309.46\n \n13,291.25\n \n36,167.66\n \n3,188.93\n \n10,104.59\n \n820.00\n \n15,607.97\n \n-\n \n-\n \n1,469.05\n \n453.93\n \n20.77\n \n412.11\n \n5,956.99\n \n53,287.33\n \n59,244.32\n \n4,666.34\n \n8,262.05\n \n8,562.83\n \n17,160.25\n \n179,741.5\n \n2026\nJan\n311.75\n \n18,070.79\n \n33,083.61\n \n4,251.68\n \n9,737.03\n \n703.48\n \n15,231.53\n \n-\n \n-\n \n1,542.21\n \n429.79\n \n23.29\n \n428.07\n \n5,548.70\n \n53,453.83\n \n59,002.53\n \n4,727.54\n \n8,573.50\n \n9,234.32\n \n17,001.46\n \n182,352.6\n \nFeb\nSource: Reserve Bank of Zimbabwe, 2026\nNotes\ni.Government securities include treasuary bills and bonds\nii.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\niii.Includes households, other financial corporations. \nStatistics are denominated in ZiG\nTABLE 5.1: COMMERCIAL BANKS -ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\nOther Institutional Units\n \n \n18 \n \n \n \nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nOf wich FCA\nDebt Securities Foreign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2022\nJan\n346,619.5\n43,438.8\n31,158.1\n421,216.4\n2,962.5\n3,864.8\n428,043.7\n2,995.6\n14,406.9\n2,688.6\n1,043.2\n230.5\n122,752.1\n53,627.8\n58,853.6\n684,641.9\nFeb\n358,979.4\n51,510.7\n38,313.7\n448,803.8\n3,229.3\n4,248.7\n456,281.8\n3,834.1\n16,267.7\n2,120.4\n1,338.1\n226.8\n130,981.3\n55,099.6\n68,847.8\n734,997.5\nMar\n422,934.6\n58,283.5\n42,258.5\n523,476.6\n3,062.2\n5,171.3\n531,710.2\n3,850.2\n18,374.8\n2,137.9\n2,779.1\n810.6\n149,781.8\n65,660.6\n85,216.5\n860,321.7\nApr\n479,558.7\n74,880.3\n40,491.0\n594,930.0\n6,377.5\n7,486.7\n608,794.2\n3,792.3\n21,445.6\n2,173.0\n3,173.0\n486.8\n149,610.1\n53,372.3\n103,623.7\n946,471.1\nMay\n666,937.8\n137,419.9\n55,389.8\n859,747.5\n7,310.9\n7,249.8\n874,308.3\n5,769.3\n39,105.1\n2,383.3\n2,207.5\n321.8\n214,978.6\n134,993.5\n182,638.3\n1,456,705.7\nJun\n773,692.7\n154,956.9\n63,511.7\n992,161.3\n4,597.1\n10,018.0\n1,006,776.4\n6,743.2\n42,701.8\n2,898.5\n3,389.3\n345.2\n307,341.8\n169,511.8\n184,958.1\n1,724,666.1\nJul\n810,906.6\n173,134.0\n74,324.5\n1,058,365.1\n717.0\n9,153.8\n1,068,235.9\n7,994.5\n54,168.7\n2,814.9\n2,948.9\n1,339.1\n355,597.9\n144,090.2\n220,013.9\n1,857,204.0\nAug\n1,100,922.1\n219,798.6\n110,595.1\n1,431,315.7\n790.2\n7,675.2\n1,439,781.1\n12,484.6\n64,160.3\n3,230.7\n2,791.8\n555.2\n421,880.4\n167,029.4\n300,169.0\n2,412,082.6\nSep\n1,328,584.6\n256,980.2\n127,051.1\n1,712,616.0\n1,482.9\n8,473.0\n1,722,571.9\n13,789.2\n81,182.4\n3,720.2\n5,632.9\n587.2\n465,063.9\n146,133.1\n318,269.0\n2,756,949.8\nOct\n1,365,908.5\n205,688.8\n128,186.9\n1,699,784.2\n813.8\n6,314.3\n1,706,912.3\n14,933.2\n83,998.0\n28,072.2\n4,282.4\n762.5\n486,396.6\n165,306.9\n407,015.5\n2,897,679.6\nNov\n1,481,503.5\n243,239.9\n146,530.0\n1,871,273.4\n291.3\n6,366.6\n1,877,931.3\n12,665.1\n67,318.9\n19,973.5\n5,349.1\n339.6\n514,200.0\n170,944.8\n343,815.1\n3,012,537.3\nDec\n1,697,008.7\n235,271.2\n181,090.6\n2,113,370.5\n1,514.4\n7,399.5\n2,122,284.4\n13,296.8\n106,071.5\n10,597.8\n9,610.4\n752.5\n621,113.3\n159,126.2\n320,981.8\n3,363,834.8\n2023\nJan\n2,139,458.0\n78,197.7\n215,537.0\n2,433,192.7\n214.3\n41,333.8\n2,474,740.8\n12,923.7\n123,605.0\n4,974.3\n5,669.1\n675.5\n723,452.2\n227,545.4\n384,228.1\n3,957,814.2\nFeb\n1,997,073.4\n398,595.8\n230,549.9\n2,626,219.1\n303.5\n10,655.7\n2,637,178.4\n14,443.3\n140,484.9\n8,092.9\n13,273.6\n3,109.0\n780,290.7\n226,933.0\n497,618.5\n4,321,424.2\nMar\n2,218,678.7\n384,245.5\n262,119.8\n2,865,044.1\n1,272.8\n5,953.0\n2,872,269.9\n15,181.9\n166,322.5\n9,639.9\n15,494.1\n3,714.6\n846,479.9\n554,840.9\n581,230.2\n5,065,173.9\nApr\n2,646,522.9\n382,678.9\n197,662.2\n3,226,864.0\n173.4\n9,463.7\n3,236,501.1\n1,115.5\n201,674.1\n13,321.9\n21,331.0\n6,418.8\n935,402.2\n214,270.9\n584,658.1\n5,214,693.6\nMay\n5,196,712.7\n969,812.4\n435,965.9\n6,602,490.9\n514.9\n50,270.4\n6,653,276.3\n1,287.6\n493,894.8\n78,332.6\n65,967.5\n30,583.3\n1,815,309.9\n607,438.1\n1,452,822.8\n11,198,912.9\nJun\n10,038,744.6\n2,287,818.9\n789,112.9\n13,115,676.4\n1,468.6\n432,367.0\n13,549,512.0\n1,177.5\n1,201,797.0\n39,166.6\n101,465.7\n64,321.9\n5,042,026.4\n1,390,786.2\n2,830,837.1\n24,221,090.2\nJul\n9,592,825.0\n1,787,488.9\n592,115.4\n11,972,429.2\n9,138.5\n380,190.7\n12,361,758.4\n512.4\n847,658.7\n87,827.2\n146,299.0\n58,256.2\n4,649,856.9\n829,382.3\n2,509,565.1\n21,491,116.1\nAug\n9,698,801.3\n1,920,804.2\n622,360.9\n12,241,966.5\n1,479.8\n381,277.2\n12,624,723.5\n863.9\n865,945.4\n84,841.4\n141,305.4\n56,751.6\n4,465,099.7\n701,626.2\n2,553,598.8\n21,494,755.8\nSep\n13,388,822.1\n319,686.0\n695,555.0\n14,404,063.1\n4,754.8\n114,251.5\n14,523,069.4\n504.3\n1,036,635.6\n82,493.4\n152,779.3\n90,032.4\n5,159,376.7\n776,997.6\n2,972,007.2\n24,793,895.8\nOct\n14,087,303.5\n312,655.9\n827,902.5\n15,227,861.9\n1,692.7\n146,801.2\n15,376,355.8\n522.9\n1,106,440.5\n84,628.9\n159,670.3\n83,441.8\n5,427,255.6\n958,746.4\n2,946,119.7\n26,143,181.7\nNov\n14,816,672.7\n306,014.4\n882,972.1\n16,005,659.2\n5,789.4\n133,219.7\n16,144,668.4\n432.3\n1,259,039.0\n92,939.9\n227,935.0\n89,997.7\n5,701,702.0\n1,046,257.0\n3,234,709.9\n27,797,681.2\nDec\n15,726,758.6\n369,405.4\n808,422.2\n16,904,586.1\n6,923.3\n201,225.8\n17,112,735.3\n36,808.0\n1,314,667.6\n55,157.4\n153,701.6\n138,722.6\n6,264,918.7\n1,184,706.9\n3,575,604.1\n29,837,022.2\n2024\nJan\n24,824,665.8\n662,989.2\n1,191,915.8\n26,679,570.7\n25,881.9\n169,368.5\n26,874,821.1\n168.2\n2,102,990.2\n114,298.0\n279,174.1\n182,727.0\n9,532,603.9\n1,949,662.4\n5,652,947.5\n46,689,392.4\nFeb\n34,081,030.9\n911,544.4\n1,983,870.0\n36,976,445.3\n7,146.9\n340,314.0\n37,323,906.2\n151.1\n3,106,432.1\n105,237.1\n449,118.3\n279,727.9\n13,237,287.6\n2,608,075.1\n8,386,836.6\n65,496,772.2\nMar\n48,600,783.9\n1,434,256.6\n3,333,658.9\n53,368,699.4\n104,688.2\n515,299.7\n53,988,687.3\n0.0\n4,654,985.7\n95,705.0\n500,611.7\n361,061.7\n20,221,996.6\n2,860,196.6\n10,814,535.9\n93,497,780.6\nApr\n31,998.9\n843.3\n1,944.9\n34,787.2\n92.9\n242.8\n35,122.9\n0.0\n2,867.4\n67.4\n358.1\n222.7\n10,281.8\n2,510.2\n8,387.7\n59,818.1\nMay\n33,721.9\n910.6\n2,242.3\n36,874.7\n79.3\n349.9\n37,303.9\n0.0\n3,056.1\n50.9\n436.0\n4.6\n12,101.9\n2,114.7\n8,699.7\n63,767.8\nJun\n34,597.9\n958.5\n2,874.9\n38,431.3\n2.1\n589.2\n39,022.6\n0.0\n3,399.1\n99.8\n442.6\n13.2\n14,415.1\n2,541.3\n7,611.6\n67,545.3\nJul\n36,817.5\n1,137.8\n2,766.8\n40,722.1\n68.7\n438.6\n41,229.4\n0.0\n3,923.2\n99.9\n469.8\n12.0\n15,126.4\n2,342.9\n7,430.9\n70,634.5\nAug\n37,597.8\n872.1\n2,514.1\n40,984.0\n65.6\n532.9\n41,582.4\n0.0\n4,039.1\n109.9\n586.0\n12.5\n16,106.1\n2,767.9\n8,510.5\n73,714.5\nSep\n59,919.0\n2,378.4\n3,920.7\n66,218.0\n76.5\n579.2\n66,873.8\n0.0\n7,142.2\n491.4\n844.5\n51.1\n27,911.3\n4,853.4\n13,632.7\n121,800.5\nOct\n70,016.8\n1,657.3\n5,193.9\n76,867.9\n170.2\n621.4\n77,659.6\n0.0\n8,524.2\n429.7\n1,248.8\n16.1\n32,737.1\n6,380.1\n15,591.5\n142,587.2\nNov\n66,321.7\n1,869.1\n5,320.9\n73,511.7\n156.7\n677.1\n74,345.6\n0.0\n7,213.9\n409.3\n558.7\n42.7\n32,040.3\n6,685.9\n13,841.4\n135,137.8\nDec\n69,146.0\n1,993.7\n5,095.0\n76,234.8\n134.4\n716.3\n77,085.5\n0.0\n8,204.4\n233.0\n588.3\n112.5\n32,891.4\n6,555.3\n14,497.8\n140,168.2\n2025\nJan\n61,330.5\n1,857.1\n5,138.7\n68,326.3\n1,164.8\n7,498.8\n76,990.0\n57444.68\n0.0\n11,140.1\n488.2\n591.7\n40.9\n31,241.2\n6,786.8\n12,384.1\n139,662.8\nFeb\n60,122.2\n1,926.9\n5,792.8\n67,841.9\n759.7\n6,860.8\n75,462.5\n56543.39\n0.0\n10,832.8\n536.9\n948.1\n232.8\n32,118.9\n7,060.8\n11,635.0\n138,827.8\nMar\n64,498.3\n1,941.3\n5,810.8\n72,250.4\n248.3\n7,126.4\n79,625.1\n60576.11\n0.0\n11,822.7\n539.3\n718.1\n52.6\n32,964.9\n7,859.2\n10,945.4\n144,527.3\nApr\n66,264.7\n2,136.9\n7,267.2\n75,668.8\n255.1\n10,251.2\n86,175.2\n62807.07\n0.0\n11,917.1\n541.8\n870.9\n57.6\n33,473.5\n6,452.9\n13,242.4\n152,731.3\nMay\n69,556.9\n2,593.4\n8,067.9\n80,218.2\n709.1\n11,890.0\n92,817.3\n66697.22\n0.0\n13,030.8\n157.7\n620.4\n129.8\n33,467.9\n7,163.7\n11,797.5\n159,185.1\nJun\n73,254.5\n2,441.0\n8,265.2\n83,960.7\n820.4\n13,331.3\n98,112.3\n70999.01\n0.0\n12,314.0\n107.9\n1,123.5\n154.5\n34,375.8\n7,532.5\n12,665.7\n166,386.4\nJul\n73,398.0\n2,457.5\n8,292.0\n84,147.5\n820.4\n13,331.3\n98,299.2\n71071.02\n0.0\n12,289.1\n107.9\n1,086.9\n154.5\n34,434.0\n7,493.6\n12,653.9\n166,519.1\nAug\n72,524.1\n2,227.6\n9,705.6\n84,457.3\n1,264.7\n11,513.5\n97,235.5\n71384.09\n0.0\n13,105.1\n108.5\n1,251.0\n219.1\n36,895.5\n8,543.3\n14,075.6\n171,433.6\nSep\n71,148.7\n2,740.7\n10,453.3\n84,342.7\n1,065.9\n14,970.8\n100,379.3\n71378.38\n0.0\n14,495.5\n101.1\n1,355.9\n72.0\n36,869.5\n8,537.4\n11,123.3\n172,933.8\nOct\n75,414.2\n2,831.2\n11,381.7\n89,627.2\n701.9\n14,396.3\n104,725.3\n76497.14\n0.0\n12,553.1\n101.4\n1,578.5\n186.6\n37,599.3\n7,774.8\n9,558.4\n174,077.4\nNov\n76,316.0\n2,650.2\n10,700.9\n89,667.1\n502.9\n12,992.3\n103,162.3\n75901.72\n0.0\n14,547.7\n48.4\n1,567.1\n291.7\n36,436.9\n9,054.8\n13,460.1\n178,568.9\nDec\n76,295.4\n4,109.6\n12,169.3\n92,574.3\n432.0\n12,915.7\n105,922.0\n76732.01\n0.0\n16,131.9\n48.4\n1,329.8\n319.4\n35,604.1\n8,262.1\n12,123.9\n179,741.5\n2026\nJan\n76,268.1\n4,217.1\n12,985.5\n93,470.6\n434.9\n13,715.9\n107,621.4\n78516.31\n0.0\n15,817.4\n48.4\n1,099.3\n332.4\n35,106.5\n8,573.5\n13,753.8\n182,352.6\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\nZWG millions\n \n \n19 \n \n \n \nForeign\nOther \nContigent\nEnd of\nNotes\nClaims\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nNon Financial \nTOTAL\n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nMortgages\nGovernment\nPublic Enterprise\nOther Assets\nAssets\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nLoans in ZiG\nLoans in Foreign Currency \nTotal\n2022\nJan\n324.6\n \n3504.3\n8,506.5\n \n2680.3\n2,631.0\n \n-\n \n1,110.8\n \n2.4\n-\n \n1,487.3\n \n2,967.6\n \n-\n \n35,913.5\n \n6693.8\n14,008.7\n \n79,830.9\n \nFeb\n411.5\n \n4021.5\n9,763.6\n \n3069.7\n5,678.0\n \n-\n \n4,048.9\n \n1.6\n-\n \n1,465.4\n \n3,241.1\n \n-\n \n39,977.5\n \n4511.5\n13,964.4\n \n90,154.6\n \nMar\n354.3\n \n4413.6\n11,882.6\n \n3691.3\n4,932.3\n \n-\n \n5,235.0\n \n0.9\n-\n \n1,590.0\n \n3,888.3\n \n-\n \n42,741.3\n \n9086.6\n15,421.2\n \n103,237.4\n \nApr\n546.4\n \n3054.1\n15,585.8\n \n4857.7\n5,768.6\n \n-\n \n5,714.4\n \n0.2\n-\n \n1,861.4\n \n4,143.7\n \n-\n \n48,582.4\n \n9654.2\n16,999.2\n \n116,768.1\n \nMay\n639.5\n \n8326.7\n23,817.6\n \n4251.9\n16,001.6\n \n-\n \n6,150.9\n \n0.0\n-\n \n1,486.3\n \n8,474.8\n \n-\n \n74,864.0\n \n14793.9\n17,091.2\n \n175,898.5\n \nJun\n418.5\n \n8464.3\n32,497.6\n \n3807.5\n21,184.8\n \n-\n \n2,639.3\n \n0.0\n-\n \n1,340.0\n \n10,851.1\n \n-\n \n85,145.9\n \n18155.8\n35,128.1\n \n219,633.0\n \nJul\n700.4\n \n9914.6\n30,660.3\n \n4983.4\n24,902.9\n \n-\n \n4,077.6\n \n0.0\n-\n \n1,411.5\n \n13,722.1\n \n-\n \n98,066.0\n \n9998.6\n45,127.9\n \n243,565.1\n \nAug\n863.8\n \n14422.1\n33,703.2\n \n4483.0\n34,971.8\n \n-\n \n4,379.8\n \n0.0\n-\n \n2,106.6\n \n16,515.4\n \n-\n \n115,491.9\n \n8745.3\n45,694.0\n \n281,377.1\n \nSep\n1,086.8\n \n14998.2\n37,911.3\n \n7470.1\n45,094.8\n \n-\n \n8,440.8\n \n0.0\n-\n \n1,302.8\n \n17,996.8\n \n-\n \n129,242.7\n \n11630.7\n60,830.4\n \n336,005.2\n \nOct\n1,158.3\n \n14768.7\n44,296.5\n \n10013.7\n44,664.1\n \n-\n \n14,109.9\n \n0.0\n-\n \n1,142.4\n \n16,817.7\n \n-\n \n123,793.8\n \n30036.4\n47,678.2\n \n348,479.7\n \nNov\n1,449.3\n \n22456.9\n41,398.0\n \n9771.8\n41,317.6\n \n-\n \n17,572.6\n \n0.0\n-\n \n2,085.3\n \n16,785.8\n \n-\n \n136,029.9\n \n30694.0\n46,275.8\n \n365,836.9\n \nDec\n1,470.7\n \n23012.7\n48,533.8\n \n8913.7\n50,229.0\n \n-\n \n21,411.1\n \n0.0\n19,993.4\n \n2,176.2\n \n17,693.7\n \n-\n \n119,322.3\n \n39279.1\n69,102.5\n \n421,138.1\n \n2023\nJan\n2,402.7\n \n32405.1\n47,062.6\n \n8410.8\n50,364.6\n \n-\n \n17,976.2\n \n0.0\n23,668.5\n \n2,406.3\n \n18,311.0\n \n-\n \n132,757.4\n \n41367.4\n69,570.1\n \n446,702.8\n \nFeb\n234.9\n \n59685.4\n50,103.0\n \n9568.6\n62,701.4\n \n889.9\n \n24,809.7\n \n0.0\n26,667.1\n \n4,451.9\n \n21,629.1\n \n-\n \n146,798.4\n \n50093.6\n70,987.9\n \n528,620.9\n \nMar\n214.6\n \n72311.9\n57,399.6\n \n9196.8\n51,300.9\n \n-\n \n28,841.5\n \n0.0\n24,689.0\n \n5,503.9\n \n19,118.6\n \n-\n \n170,376.6\n \n54524.7\n84,489.1\n \n577,967.3\n \nApr\n184.1\n \n61341.6\n63,129.5\n \n16343.2\n61,444.0\n \n-\n \n28,727.0\n \n0.0\n28,119.0\n \n5,989.2\n \n27,619.9\n \n-\n \n205,412.2\n \n81442.9\n86,571.2\n \n666,323.9\n \nMay\n78.1\n \n125685.1\n100,808.7\n \n22707.0\n195,646.6\n \n-\n \n81,344.3\n \n0.0\n69,908.9\n \n6,246.8\n \n53,180.7\n \n-\n \n440,462.4\n \n103176.1\n116,103.7\n \n1,315,348.2\n \nJun\n176.6\n \n227001.8\n172,666.5\n \n25998.2\n452,772.6\n \n40,326.7\n \n115,193.3\n \n0.0\n196,310.3\n \n4,209.5\n \n121,677.5\n \n-\n \n870,075.1\n \n230604.4\n544,587.8\n \n3,001,600.3\n \nJul\n162.7\n \n132017.2\n220,995.0\n \n20797.2\n459,668.2\n \n32,010.8\n \n105,308.6\n \n0.0\n154,472.7\n \n13,777.8\n \n153,638.5\n \n-\n \n697,177.8\n \n209734.6\n612,937.8\n \n2,812,698.9\n \nAug\n611.0\n \n105296.6\n309,821.7\n \n55744.7\n475,838.3\n \n37,447.1\n \n102,495.2\n \n0.0\n153,578.2\n \n6,767.5\n \n135,193.3\n \n-\n \n758,439.2\n \n223114.4\n564,622.1\n \n2,928,969.2\n \nSep\n949.3\n \n193065.6\n339,269.2\n \n41680.1\n437,996.0\n \n58,554.5\n \n110,351.3\n \n0.0\n161,346.6\n \n4,522.1\n \n153,113.7\n \n-\n \n880,148.8\n \n290026.7\n565,616.4\n \n3,236,640.3\n \nOct\n403.8\n \n204713.4\n254,684.1\n \n187632.1\n440,150.3\n \n65,022.1\n \n97,046.1\n \n0.0\n176,111.9\n \n13,771.8\n \n173,523.5\n \n-\n \n829,479.5\n \n345029.3\n586,015.6\n \n3,373,583.5\n \nNov\n370.5\n \n222344.7\n387,213.2\n \n160896.0\n326,510.1\n \n50,688.3\n \n159,225.4\n \n0.0\n173,990.9\n \n28,127.2\n \n187,363.3\n \n-\n \n926,663.7\n \n395549.5\n595,811.6\n \n3,614,754.5\n \nDec\n403.7\n \n251968.8\n457,034.9\n \n261067.9\n345,348.0\n \n56,551.7\n \n185,131.1\n \n0.0\n166,902.0\n \n27,875.9\n \n222,503.1\n \n0.7\n \n973,788.6\n \n507890.9\n658,045.7\n \n4,114,512.9\n \n2024\nJan\n367.9\n \n368046.7\n524,020.9\n \n471915.0\n363,325.6\n \n40,412.9\n \n280,803.2\n \n0.0\n280,441.0\n \n45,935.9\n \n339,610.7\n \n-\n \n1,563,405.5\n \n649087.4\n742,734.0\n \n5,670,106.8\n \nFeb\n578.8\n \n637645.2\n797,581.2\n \n618074.6\n613,309.7\n \n24,680.4\n \n425,783.2\n \n0.0\n399,313.5\n \n67,900.2\n \n519,513.4\n \n-\n \n2,188,186.8\n \n904519.6\n937,957.6\n \n8,135,044.1\n \nMar\n356.6\n \n1026840.5\n1,171,941.4\n \n888362.3\n829,470.4\n \n-\n \n440,943.8\n \n0.0\n528,820.5\n \n103,276.3\n \n787,872.2\n \n-\n \n3,761,909.8\n \n1403556.4\n1,697,667.5\n \n12,641,017.5\n \nApr\n1.0\n \n564.4\n864.1\n \n693.0\n326.5\n \n67.2\n \n337.2\n \n0.0\n313.5\n \n-\n \n593.2\n \n212.7\n \n2,856.8\n \n420.1\n824.2\n \n8,074.0\n \nMay\n4.0\n \n639.2\n783.2\n \n772.6\n296.2\n \n109.6\n \n407.6\n \n0.0\n303.7\n \n-\n \n309.2\n \n19.8\n \n2,946.5\n \n712.1\n903.7\n \n8,207.5\n \nJun\n1.1\n \n520.3\n1,122.4\n \n718.7\n678.1\n \n110.9\n \n188.6\n \n0.0\n282.9\n \n-\n \n424.7\n \n20.4\n \n2,998.6\n \n858.8\n1,229.8\n \n9,155.3\n \nJul\n2.4\n \n681.0\n918.2\n \n640.3\n336.2\n \n99.8\n \n676.7\n \n0.0\n276.2\n \n5.0\n \n333.9\n \n20.5\n \n3,022.2\n \n1332.3\n1,250.3\n \n9,595.1\n \nAug\n1.1\n \n642.2\n853.3\n \n852.1\n428.1\n \n-\n \n764.6\n \n0.0\n246.2\n \n5.1\n \n373.1\n \n20.6\n \n3,042.5\n \n1811.8\n1,318.9\n \n10,359.6\n \nSep\n1.0\n \n1230.9\n1,985.1\n \n1121.2\n705.4\n \n-\n \n555.5\n \n0.0\n431.0\n \n34.5\n \n1,130.0\n \n37.0\n \n4,878.1\n \n2054.8\n2,298.6\n \n16,463.3\n \nOct\n13.1\n \n1166.2\n2,512.0\n \n1391.6\n769.7\n \n-\n \n745.1\n \n0.0\n502.2\n \n5.3\n \n1,380.9\n \n42.7\n \n5,751.9\n \n2214.8\n2,435.0\n \n18,930.4\n \nNov\n14.0\n \n918.9\n2,141.3\n \n1383.8\n649.7\n \n-\n \n602.6\n \n0.0\n367.6\n \n5.4\n \n1,293.8\n \n39.5\n \n4,997.5\n \n2566.9\n2,458.3\n \n17,439.1\n \nDec\n17.1\n \n1089.4\n2,633.9\n \n2306.6\n754.5\n \n-\n \n675.7\n \n0.0\n361.0\n \n-\n \n1,424.9\n \n35.4\n \n5,500.8\n \n2343.9\n2,593.3\n \n19,736.5\n \n2025\nJan\n13.1\n \n939.4\n2,348.5\n \n616.8\n637.3\n \n-\n \n1,028.5\n \n0.0\n-\n \n1,019.2\n \n1,294.7\n \n-\n \n356.6\n \n317.5\n \n5,353.2\n \n5,670.7\n \n199.4\n \n-\n \n3001.4\n3,282.1\n \n20,407.7\n \nFeb\n13.9\n \n980.7\n2,545.5\n \n628.6\n695.1\n \n-\n \n753.2\n \n0.0\n-\n \n997.8\n \n1,428.4\n \n-\n \n335.1\n \n535.1\n \n5,302.8\n \n5,837.9\n \n199.4\n \n-\n \n1754.4\n3,294.2\n \n19,464.2\n \nMar\n20.4\n \n1031.3\n2,349.0\n \n786.9\n517.9\n \n-\n \n844.9\n \n0.0\n-\n \n1,066.7\n \n1,604.4\n \n-\n \n284.5\n \n358.4\n \n5,601.2\n \n5,959.7\n \n121.0\n \n-\n \n1684.9\n3,466.0\n \n19,737.7\n \nApr\n17.8\n \n1038.4\n2,522.2\n \n766.4\n514.4\n \n-\n \n900.0\n \n0.0\n-\n \n1,084.2\n \n1,815.7\n \n-\n \n284.5\n \n322.9\n \n5,519.7\n \n5,842.6\n \n111.4\n \n-\n \n1736.6\n3,476.9\n \n20,111.3\n \nMay\n26.4\n \n855.4\n2,940.4\n \n801.9\n906.2\n \n-\n \n1,009.6\n \n0.0\n-\n \n1,098.4\n \n1,814.5\n \n-\n \n204.3\n \n695.6\n \n5,865.6\n \n6,561.2\n \n139.8\n \n-\n \n2062.4\n3,495.2\n \n21,915.6\n \nJun\n29.0\n \n803.0\n2,966.8\n \n631.1\n823.7\n \n-\n \n1,262.5\n \n0.0\n-\n \n1,046.3\n \n1,892.2\n \n-\n \n197.5\n \n635.7\n \n6,405.1\n \n7,040.8\n \n232.2\n \n-\n \n1786.7\n3,716.9\n \n22,428.7\n \nJul\n29.0\n \n803.0\n2,966.8\n \n631.1\n823.7\n \n-\n \n1,262.5\n \n0.0\n-\n \n1,046.3\n \n1,892.2\n \n-\n \n197.5\n \n635.7\n \n6,405.1\n \n7,040.8\n \n232.2\n \n-\n \n1786.7\n3,716.9\n \n22,428.7\n \nAug\n32.3\n \n1148.2\n3,101.3\n \n1361.4\n1,468.4\n \n-\n \n892.1\n \n0.0\n-\n \n1,235.6\n \n1,836.0\n \n-\n \n113.8\n \n639.9\n \n6,476.6\n \n7,116.6\n \n593.1\n \n-\n \n2036.4\n3,683.5\n \n24,618.5\n \nSep\n34.4\n \n1218.5\n3,281.0\n \n813.1\n1,259.5\n \n-\n \n830.3\n \n0.0\n-\n \n1,226.4\n \n2,125.7\n \n-\n \n107.4\n \n842.6\n \n6,263.1\n \n7,105.7\n \n451.2\n \n-\n \n2125.9\n3,664.0\n \n24,242.9\n \nOct\n43.3\n \n1267.3\n3,558.0\n \n979.8\n1,167.2\n \n-\n \n825.7\n \n0.0\n-\n \n1,303.7\n \n2,339.1\n \n-\n \n192.1\n \n741.0\n \n5,924.4\n \n6,665.4\n \n439.4\n \n-\n \n2552.1\n3,279.3\n \n24,612.4\n \nNov\n52.6\n \n1073.9\n3,497.0\n \n941.9\n1,383.6\n \n-\n \n934.1\n \n0.0\n-\n \n1,285.1\n \n2,404.5\n \n-\n \n196.6\n \n747.1\n \n5,896.2\n \n6,643.3\n \n445.0\n \n-\n \n2697.9\n3,293.4\n \n24,849.0\n \nDec\n56.6\n \n1353.3\n3,358.3\n \n770.7\n1,357.1\n \n-\n \n813.7\n \n0.0\n-\n \n1,218.2\n \n2,301.7\n \n-\n \n240.1\n \n688.4\n \n5,536.9\n \n6,225.3\n \n499.2\n \n-\n \n2126.3\n2,525.0\n \n22,845.2\n \n2026\nJan\n57.5\n \n1497.5\n3,278.9\n \n620.0\n990.9\n \n-\n \n734.8\n \n0.0\n-\n \n1,079.0\n \n2,294.1\n \n-\n \n1,082.4\n \n689.9\n \n4,363.9\n \n5,053.8\n \n499.5\n \n-\n \n1861.4\n2,511.3\n \n21,561.0\n \nSource:Reserve Bank of Zimbabwe, 2026\nNotes\ni.Government securities include treasuary bills and bonds\nii.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\nii.Includes households, other financial corporations, \n* Statistics are denominated in ZiG\nOther Institutional Units\nTABLE 6.1: BUILDING SOCIETIES ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\n \n \n20 \n \n \n \nDebt Securities\nForeign Liabilities\nCapital\nContigent \nOther\nTOTAL\nand\nLiabilities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nOf wich FCA\nRBZ\nOther Depository \nOther Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2022\nJan\n31,695.1\n5,983.6\n37,678.7\n0.0\n15.0\n37,693.7\n1,771.4\n10,991.6\n0.0\n373.7\n0.0\n18,063.5\n10,937.0\n79,830.9\nFeb\n37,132.1\n7,089.1\n44,221.1\n0.0\n15.0\n44,236.1\n1,703.8\n14,215.9\n0.0\n431.6\n0.0\n18,241.5\n11,325.7\n90,154.6\nMar\n44,187.4\n6,190.7\n50,378.1\n0.0\n15.0\n50,393.1\n1,742.3\n15,620.9\n0.0\n501.9\n0.0\n20,548.8\n14,430.4\n103,237.4\nApr\n52,979.2\n6,553.0\n59,532.2\n0.0\n15.0\n59,547.2\n1,536.3\n17,027.1\n0.0\n704.1\n0.0\n23,099.0\n14,854.4\n116,768.1\nMay\n86,411.7\n6,683.0\n93,094.7\n0.0\n15.0\n93,109.8\n1,477.7\n34,306.7\n0.0\n1,033.4\n0.0\n22,645.2\n23,325.7\n175,898.5\nJun\n98,008.7\n8,427.1\n106,435.9\n1,030.1\n15.0\n107,481.1\n1,496.4\n40,346.3\n0.0\n1,200.6\n0.0\n42,213.2\n26,895.5\n219,633.0\nJul\n111,583.1\n9,489.2\n121,072.3\n1,072.6\n15.0\n122,159.9\n1,225.0\n46,145.1\n0.0\n2,071.5\n0.0\n55,131.6\n16,832.0\n243,565.1\nAug\n133,071.2\n11,398.3\n144,469.5\n1,625.2\n15.0\n146,109.7\n1,382.6\n55,691.4\n0.0\n2,979.3\n0.0\n60,157.4\n15,056.7\n281,377.1\nSep\n143,338.6\n28,284.7\n171,623.3\n0.0\n15.0\n171,638.3\n1,339.9\n62,659.9\n0.0\n3,613.8\n0.0\n79,343.1\n17,410.1\n336,005.2\nOct\n122,775.3\n20,897.6\n143,672.9\n1,214.2\n15.0\n144,902.1\n1,707.3\n69,651.9\n0.0\n4,327.9\n0.0\n86,799.2\n41,091.4\n348,479.7\nNov\n130,892.9\n23,401.5\n154,294.3\n1,256.4\n13.0\n155,563.7\n1,855.1\n72,052.0\n0.0\n5,140.0\n0.0\n89,895.0\n41,331.2\n365,836.9\nDec\n149,207.3\n30,517.1\n179,724.4\n1,239.7\n103.8\n181,068.0\n1,933.7\n71,142.6\n0.0\n5,623.9\n0.0\n118,486.1\n42,883.8\n421,138.1\n2023\nJan\n161,506.8\n31,099.4\n192,606.2\n1,462.2\n121.0\n194,189.4\n3,214.4\n72,524.5\n0.0\n6,622.6\n0.0\n144,335.3\n25,816.5\n446,702.8\nFeb\n210,739.4\n27,500.2\n238,239.5\n1,153.4\n15.0\n239,407.9\n2,349.9\n84,724.5\n0.0\n7,548.9\n0.0\n155,007.6\n39,582.0\n528,620.9\nMar\n234,480.2\n38,088.7\n272,568.9\n158.0\n14.4\n272,741.2\n1,982.4\n89,883.4\n0.0\n7,502.7\n0.0\n172,499.0\n33,358.6\n577,967.3\nApr\n272,738.9\n35,889.2\n308,628.0\n400.0\n15.0\n309,043.1\n1,809.5\n116,418.1\n0.0\n8,456.9\n0.0\n183,262.3\n47,334.0\n666,323.9\nMay\n502,897.5\n36,680.3\n539,577.9\n553.7\n15.0\n540,146.6\n4,453.5\n289,636.2\n0.0\n8,115.4\n0.0\n372,206.8\n100,789.6\n1,315,348.2\nJun\n927,980.2\n66,404.1\n994,384.3\n0.0\n15.0\n994,399.3\n4,147.7\n631,544.2\n0.0\n10,873.2\n0.0\n1,117,122.1\n243,513.7\n3,001,600.3\nJul\n804,547.2\n73,047.1\n877,594.3\n15,753.2\n15.0\n893,362.6\n2,706.7\n611,248.0\n0.0\n14,397.5\n0.0\n1,093,858.2\n197,126.1\n2,812,698.9\nAug\n920,687.4\n90,856.7\n1,011,544.1\n15,752.3\n15.0\n1,027,311.4\n3,400.5\n617,162.9\n0.0\n12,854.9\n0.0\n1,064,286.3\n203,953.2\n2,928,969.2\nSep\n1,062,730.1\n75,413.9\n1,138,143.9\n0.0\n15.1\n1,138,159.0\n3,262.9\n652,356.6\n0.0\n16,101.5\n0.0\n1,117,548.2\n309,212.1\n3,236,640.3\nOct\n1,261,965.8\n64,282.0\n1,326,247.8\n0.0\n15.1\n1,326,262.9\n4,056.0\n467,416.6\n0.0\n16,785.2\n0.0\n1,188,499.5\n370,563.3\n3,373,583.5\nNov\n1,301,463.8\n82,076.9\n1,383,540.7\n79,497.1\n15.1\n1,463,052.8\n4,822.5\n525,114.1\n0.0\n16,180.1\n0.0\n1,209,652.3\n395,932.7\n3,614,754.5\nDec\n1,541,238.9\n142,705.5\n1,683,944.4\n79,497.1\n15.8\n1,763,457.2\n7,085.0\n516,718.0\n0.0\n8,736.3\n0.0\n1,308,419.6\n510,096.7\n4,114,512.9\n2024\nJan\n2,094,039.4\n96,896.2\n2,190,935.6\n79,481.7\n15.1\n2,270,432.3\n8,231.4\n904,697.2\n0.0\n11,028.7\n0.0\n1,826,995.6\n648,721.6\n5,670,106.8\nFeb\n2,991,430.0\n192,203.3\n3,183,633.2\n162,422.1\n15.1\n3,346,070.4\n10,388.9\n1,314,901.6\n0.0\n5,723.7\n0.0\n2,630,626.9\n827,332.6\n8,135,044.1\nMar\n4,958,662.0\n186,068.5\n5,144,730.5\n162,239.8\n15.7\n5,306,986.0\n8,072.5\n1,880,803.3\n0.0\n6,134.8\n0.0\n4,286,906.8\n1,152,114.2\n12,641,017.5\nApr\n3,369.4\n36.3\n3,405.6\n65.0\n0.0\n3,470.7\n3.2\n1,258.6\n0.0\n0.0\n0.0\n1,955.9\n1,385.6\n8,074.0\nMay\n3,228.4\n75.2\n3,303.7\n0.0\n0.0\n3,303.7\n4.8\n1,366.6\n0.0\n0.0\n0.0\n2,496.7\n1,035.8\n8,207.5\nJun\n3,502.4\n97.1\n3,599.5\n0.0\n0.0\n3,599.5\n4.4\n1,414.8\n0.0\n8.0\n0.0\n2,990.2\n1,138.3\n9,155.3\nJul\n4,199.9\n128.4\n4,328.3\n0.0\n0.0\n4,328.3\n19.6\n919.3\n0.0\n13.2\n0.0\n3,111.6\n1,203.0\n9,595.1\nAug\n4,433.7\n172.4\n4,606.1\n0.0\n0.0\n4,606.1\n103.0\n850.7\n0.0\n16.1\n0.0\n3,370.3\n1,413.3\n10,359.6\nSep\n6,773.8\n475.3\n7,249.1\n22.6\n0.0\n7,271.7\n103.8\n1,559.3\n0.0\n16.3\n0.0\n5,486.0\n2,026.3\n16,463.3\nOct\n8,011.9\n795.7\n8,807.6\n86.9\n0.0\n8,894.5\n122.7\n1,462.9\n0.0\n61.4\n0.0\n6,003.1\n2,385.9\n18,930.4\nNov\n7,145.7\n872.8\n8,018.6\n45.8\n0.0\n8,064.4\n79.9\n1,227.6\n0.0\n10.0\n0.0\n6,043.8\n2,013.3\n17,439.1\nDec\n8,227.9\n1,293.1\n9,521.0\n71.2\n0.0\n9,592.2\n79.9\n1,306.5\n0.0\n267.8\n0.0\n5,923.9\n2,566.2\n19,736.5\n2025\nJan\n6114\n44.7\n2,350.2\n8,508.5\n0.0\n649.8\n9,158.3\n6,215.9\n0.0\n1,657.1\n0.0\n377.4\n0.0\n6,162.6\n0.0\n3,052.3\n20,407.7\nFeb\n6227\n51.3\n2,759.3\n9,037.6\n0.0\n625.5\n9,663.1\n6,512.8\n0.0\n1,679.8\n0.0\n206.6\n0.0\n6,294.5\n0.0\n1,620.1\n19,464.2\nMar\n7027\n54.9\n2,402.5\n9,484.9\n0.0\n588.2\n10,073.1\n7,085.6\n0.0\n1,498.3\n0.0\n83.0\n0.0\n6,364.1\n0.0\n1,719.2\n19,737.7\nApr\n7101\n74.1\n2,488.0\n9,663.4\n0.0\n588.3\n10,251.7\n7,186.8\n0.0\n1,498.3\n0.0\n99.1\n0.0\n6,375.2\n0.0\n1,887.1\n20,111.3\nMay\n8052\n83.0\n2,896.7\n11,031.5\n0.0\n0.0\n11,031.5\n7,864.0\n0.0\n2,107.9\n0.0\n100.3\n0.0\n6,789.0\n0.0\n1,886.9\n21,915.6\nJun\n7361\n52.4\n4,101.0\n11,513.9\n0.0\n648.2\n12,162.1\n8,109.7\n0.0\n1,831.4\n33.8\n86.3\n0.0\n6,827.3\n0.0\n1,487.8\n22,428.7\nJul\n7361\n52.4\n4,101.0\n11,513.9\n0.0\n648.2\n12,162.1\n8,109.7\n0.0\n1,831.4\n33.8\n86.3\n0.0\n6,827.3\n0.0\n1,487.8\n22,428.7\nAug\n7971\n57.3\n4,213.4\n12,241.4\n0.0\n751.2\n12,992.5\n9,046.5\n0.0\n2,065.1\n36.9\n107.8\n0.0\n7,361.5\n0.0\n2,054.6\n24,618.5\nSep\n8740\n54.3\n3,967.0\n12,761.5\n0.0\n200.1\n12,961.6\n9,714.8\n0.0\n1,860.0\n30.3\n88.1\n0.0\n7,193.5\n0.0\n2,109.3\n24,242.9\nOct\n9077\n56.8\n4,294.6\n13,428.1\n0.0\n229.7\n13,657.8\n9,386.0\n0.0\n1,300.0\n30.7\n88.3\n0.0\n7,089.1\n0.0\n2,446.5\n24,612.4\nNov\n9080\n61.7\n4,431.4\n13,573.5\n0.0\n303.8\n13,877.4\n9,286.0\n0.0\n1,405.7\n16.7\n88.5\n0.0\n7,016.5\n0.0\n2,444.2\n24,849.0\nDec\n9321\n58.8\n3,562.5\n12,942.0\n0.0\n348.9\n13,290.9\n9,699.6\n0.0\n1,394.5\n4.6\n0.0\n0.0\n6,336.7\n0.0\n1,818.5\n22,845.2\n2026\nJan\n9334\n60.1\n3,509.6\n12,903.4\n0.0\n279.1\n13,182.5\n9,687.0\n0.0\n747.7\n0.0\n0.0\n0.0\n6,110.4\n0.0\n1,520.5\n21,561.0\nSource: Reserve Bank of Zimbabwe, 2026\n* Statistics are denominated in ZiG\nZWG millions\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\nAmounts Owing to\n \n \n21 \n \n \n \nEND OF\n2022\nJan\n58,163,723.79\n2,180,551.47\n576,438.12\n26,576,317.70\n366,231.45\n8,887,534.55\n23,074,734.84\n11,840,524.88\n15,743,736.46\n3,516,259.69\n47,325,078.28\n29,564.68\n198,280,695.90\nFeb\n59,500,669.71\n2,289,260.81\n618,640.14\n27,925,301.74\n641,435.03\n9,370,886.67\n27,976,121.59\n13,027,815.12\n20,505,827.49\n3,747,288.27\n51,007,737.28\n19,692.27\n216,630,676.11\nMar\n66,551,117.83\n2,538,377.08\n656,335.46\n29,688,979.74\n660,584.49\n10,903,917.10\n32,629,411.62\n15,688,496.07\n38,075,386.72\n4,471,441.45\n58,500,950.68\n802,168.34\n261,167,166.58\nApr\n74,441,781.12\n4,219,500.30\n1,441,218.07\n33,136,441.44\n673,885.92\n13,157,284.33\n34,426,878.27\n18,261,710.29\n39,043,359.76\n5,001,307.17\n63,176,517.86\n40,089.64\n287,019,974.16\nMay\n101,753,100.08\n5,120,524.84\n3,358,419.20\n50,514,059.33\n760,401.23\n12,433,390.50\n42,057,624.50\n28,724,818.35\n48,088,662.73\n6,286,840.17\n76,655,600.16\n34,456.76\n375,787,897.73\nJune\n118,753,588.99\n6,209,658.53\n2,293,665.50\n64,942,949.99\n869,273.19\n23,897,585.00\n58,442,367.18\n37,195,284.13\n62,467,707.84\n9,414,912.48\n96,536,183.00\n43,204.15\n481,066,380.00\nJuly\n133,779,414.05\n7,610,614.14\n3,684,426.07\n77,836,080.20\n938,367.98\n30,537,997.95\n69,408,788.72\n46,181,587.44\n72,642,938.51\n10,449,582.51\n111,094,524.49\n46,145.73\n564,210,467.80\nAug\n165,210,571.41\n10,163,176.69\n2,624,492.88\n93,899,073.61\n1,266,729.80\n39,544,245.28\n87,691,102.84\n58,330,938.20\n97,552,420.83\n10,450,507.09\n131,625,765.29\n154,457.59\n698,513,481.52\nSept\n201,167,878.53\n11,330,918.80\n5,038,300.39\n110,956,484.03\n1,297,748.50\n44,492,682.69\n101,816,518.33\n92,708,096.37\n88,483,494.42\n11,685,667.87\n152,934,863.30\n276,752.34\n822,189,405.58\nOct\n223,506,677.74\n12,026,669.50\n4,229,873.27\n113,451,159.15\n1,302,041.27\n46,399,745.17\n110,333,025.84\n79,715,558.05\n89,501,330.53\n9,611,322.30\n175,816,703.56\n178,607.79\n866,072,714.17\nNov\n232,953,535.08\n16,431,625.92\n11,131,139.79\n118,284,970.84\n1,687,527.03\n42,192,397.26\n124,017,335.43\n75,874,234.73\n94,636,395.62\n12,440,947.33\n207,085,835.54\n197,473.26\n936,933,417.83\nDec\n253,185,165.18\n19,199,455.89\n10,466,455.02\n135,037,685.07\n1,551,994.21\n70,805,600.30\n136,576,579.60\n94,115,141.69\n123,404,532.09\n12,079,018.68\n235,371,108.06\n173,717.07\n1,091,966,452.83\n2023\nJan\n299,237,745.06\n22,096,826.86\n11,001,194.94\n154,399,125.00\n2,073,794.79\n72,677,263.10\n165,905,496.48\n124,259,994.28\n140,303,195.37\n16,560,714.33\n290,446,774.71\n286,968.13\n1,299,249,093.07\nFeb\n333,081,520.85\n26,349,752.54\n12,607,980.80\n168,969,321.35\n3,232,834.66\n79,874,665.83\n198,087,465.13\n146,996,948.44\n150,078,778.01\n18,960,512.94\n335,439,856.49\n415,659.47\n1,474,095,296.50\nMar\n411,138,419.07\n28,795,432.59\n14,081,946.71\n184,250,094.21\n3,256,927.22\n101,507,881.47\n232,125,042.77\n168,374,643.67\n159,301,093.17\n20,786,447.06\n364,183,808.40\n229,595.47\n1,688,031,331.80\nApr\n411,638,425.58\n28,865,765.48\n14,081,964.65\n184,833,219.66\n3,256,927.22\n101,507,881.47\n235,076,590.94\n168,374,757.64\n159,310,920.52\n20,785,827.18\n365,366,760.50\n229,595.47\n1,693,328,636.32\nMay\n726,348,772.35\n78,828,771.47\n44,800,380.00\n409,618,602.87\n6,584,930.07\n226,467,642.46\n583,387,051.30\n480,909,418.46\n381,628,891.53\n62,593,512.49\n757,858,742.61\n267,815.39\n3,759,294,531.01\nJun\n1,385,380,571.66\n173,918,051.54\n114,682,839.69\n1,119,448,698.19\n23,922,347.39\n571,712,604.71\n1,309,324,347.94\n1,111,326,640.14\n808,734,970.18\n129,722,475.73\n1,754,989,459.01\n444,788.00\n8,503,607,794.19\nJul\n1,088,372,491.59\n132,529,236.30\n101,023,084.21\n843,805,813.72\n21,291,030.44\n370,922,779.80\n1,037,949,287.43\n824,419,061.99\n646,244,001.65\n87,491,103.55\n1,451,125,105.58\n356,098.86\n6,605,529,095.13\nAug\n1,104,126,310.09\n133,512,317.72\n105,426,999.17\n683,402,044.93\n21,345,225.83\n393,145,008.06\n1,077,529,295.35\n824,970,068.56\n716,638,286.73\n85,309,683.35\n1,543,461,599.29\n382,505.35\n6,689,249,344.42\nSep\n1,336,413,273.40\n158,136,405.58\n121,080,865.90\n752,199,791.20\n28,592,532.70\n465,470,715.50\n1,334,020,478.90\n1,012,670,250.70\n799,826,458.00\n102,238,002.60\n1,857,297,850.00\n586,991.00\n7,968,533,615.50\nOct\n1,461,090,986.48\n163,948,853.90\n120,153,516.74\n935,064,277.07\n24,681,683.18\n520,361,008.99\n1,381,206,351.23\n1,092,469,043.71\n859,550,943.15\n118,799,556.91\n2,126,512,435.00\n627,911.82\n8,804,466,568.16\nNov\n1,397,804,072.50\n171,337,302.47\n117,526,650.42\n1,017,731,862.93\n26,161,720.05\n535,490,380.99\n1,401,587,612.93\n992,371,783.17\n885,248,702.84\n129,500,343.70\n2,255,158,373.70\n621,795.60\n8,930,540,600.93\nDec\n1,360,816,417.35\n179,675,138.50\n121,167,248.12\n1,077,783,652.10\n46,946,926.90\n551,786,675.29\n1,483,619,833.87\n1,207,471,368.52\n863,309,236.72\n136,388,007.82\n2,458,239,172.85\n644,093.68\n9,487,847,771.72\n2024\nJan\n2,212,746,050.25\n265,031,131.44\n214,923,355.91\n1,663,240,228.23\n110,086,710.61\n875,780,504.12\n2,505,473,968.40\n1,910,394,449.61\n1,256,413,922.88\n237,647,459.79\n3,945,256,597.25\n1,037,343.55\n15,198,031,722.04\nFeb\n3,435,102,730.48\n426,536,836.74\n249,129,096.22\n2,383,796,904.38\n171,219,221.62\n1,264,658,167.28\n3,631,856,467.58\n2,844,642,895.76\n2,043,483,472.01\n352,320,643.54\n5,491,307,643.33\n1,518,795.13\n22,295,572,874.08\nMar\n4,949,814,064.70\n642,860,845.90\n452,924,544.60\n3,642,287,181.90\n251,866,635.20\n1,943,457,910.80\n5,387,453,048.30\n3,991,233,867.50\n3,178,219,935.60\n543,942,248.60\n8,278,044,179.10\n2,267,159.00\n33,264,371,621.30\n*Apr\n2,882,347.04\n371,595.02\n188,567.12\n3,081,028.88\n188,277.01\n1,174,215.26\n3,077,908.79\n2,281,799.96\n1,782,566.59\n399,652.20\n4,922,516.84\n1,655.37\n20,352,130.08\n*May\n3,549,471.22\n448,072.03\n196,408.62\n3,013,508.26\n181,989.39\n1,239,894.94\n3,619,936.03\n2,302,326.81\n1,793,582.31\n494,669.10\n5,661,322.35\n5,002.25\n22,513,367.89\n*Jun\n3,286,172.53\n496,282.55\n213,057.33\n3,210,670.42\n230,521.55\n1,418,401.02\n3,457,122.91\n1,954,111.98\n1,946,800.04\n567,017.72\n6,019,426.96\n1,771.40\n22,801,356.42\n*Jul\n3,487,382.60\n511,490.74\n202,186.14\n3,350,580.05\n163,104.44\n1,304,409.07\n3,570,513.33\n2,117,767.16\n2,347,954.24\n568,049.13\n6,348,713.28\n2,029.48\n23,985,090.63\n*Aug\n3,858,128.45\n496,920.13\n197,595.11\n3,160,166.09\n163,179.56\n1,353,221.18\n3,891,826.53\n2,259,346.53\n2,064,398.05\n355,517.61\n7,019,997.29\n1,626.53\n24,821,923.05\n*Sep\n6,672,075.13\n1,240,260.16\n365,299.01\n5,024,076.96\n274,548.64\n2,326,667.49\n6,387,958.08\n4,331,429.08\n3,418,807.30\n640,082.06\n11,884,283.83\n2,603.24\n42,568,090.98\n*Oct\n7,858,559.49\n1,469,928.32\n481,828.82\n5,465,308.96\n320,115.06\n2,603,522.82\n7,340,600.92\n5,249,584.59\n3,667,687.19\n726,009.18\n13,568,052.49\n3,070.10\n48,754,267.95\n*Nov\n7,180,366.66\n1,328,085.57\n428,978.78\n5,025,733.67\n284,239.89\n2,457,448.49\n6,759,835.67\n4,209,879.63\n3,928,182.05\n680,905.22\n13,074,981.78\n2,309.39\n45,360,946.80\n*Dec\n7,297,552.82\n1,289,292.14\n385,874.99\n4,973,856.63\n262,219.72\n2,513,526.60\n6,746,914.01\n4,827,984.53\n3,694,327.88\n706,439.67\n13,280,443.54\n2,262.81\n45,980,695.34\n2025\n*Jan\n7,678,298.65\n1,196,038.23\n409,696.02\n5,047,238.20\n306,809.73\n2,664,917.36\n6,434,242.43\n4,757,437.66\n4,086,970.99\n769,886.02\n13,569,651.19\n1,922.01\n46,923,108.48\n*Feb\n8,299,274.74\n1,201,875.78\n399,492.64\n4,830,538.61\n300,587.07\n2,770,286.66\n6,503,215.41\n4,803,609.78\n4,292,425.79\n746,491.37\n13,140,132.51\n1,960.50\n47,289,890.85\n*Mar\n8,326,930.91\n1,244,718.81\n402,707.95\n5,041,144.58\n317,777.54\n2,491,912.41\n6,543,198.90\n4,375,136.07\n5,262,596.60\n744,227.95\n13,809,533.31\n1,950.08\n48,561,835.10\n*Apr\n8,907,112.83\n1,321,160.24\n510,175.35\n5,587,682.42\n301,612.10\n2,488,206.19\n7,065,026.69\n5,118,059.86\n5,500,479.51\n721,927.40\n14,585,410.50\n2,121.10\n52,108,974.19\n*May\n9,447,878.28\n1,662,965.62\n432,262.51\n6,247,342.77\n303,671.59\n2,560,619.89\n7,447,120.21\n5,231,385.19\n5,706,622.10\n757,449.00\n14,848,295.45\n2,090.86\n54,647,703.48\n*Jun\n9,323,262.25\n1,857,036.70\n452,476.01\n6,911,438.62\n316,057.26\n2,597,384.44\n7,363,354.86\n5,189,397.21\n5,586,435.53\n1,025,486.27\n14,948,428.25\n2,340.92\n55,573,098.32\n*Jul\n9,586,121.76\n1,821,068.99\n495,126.38\n7,039,554.33\n178,544.10\n2,593,734.88\n7,795,887.20\n5,506,356.66\n4,812,815.12\n1,047,916.99\n15,398,848.28\n3,074.97\n56,279,049.66\n*Aug\n9,148,112.87\n1,704,046.91\n442,559.05\n8,621,271.81\n178,023.75\n2,711,257.51\n7,806,713.08\n4,494,735.86\n5,678,257.82\n1,660,555.70\n14,593,469.93\n3,267.57\n57,042,271.87\n*Sep\n9,939,018.22\n1,705,339.14\n447,683.58\n8,018,110.39\n298,207.44\n2,736,927.32\n8,222,972.36\n5,267,250.21\n5,356,204.76\n1,618,665.56\n15,143,546.81\n3,161.64\n58,757,087.43\n*Oct\n10,156,394.52\n1,857,937.44\n894,870.28\n7,960,894.20\n327,830.18\n2,793,906.88\n8,390,997.31\n5,441,104.32\n5,826,908.27\n1,725,282.36\n16,026,574.02\n3,520.96\n61,406,220.75\n*Nov\n10,329,897.54\n2,127,564.82\n789,426.81\n8,168,504.38\n264,314.27\n2,738,893.05\n8,808,301.87\n5,467,229.39\n5,795,538.81\n1,651,606.66\n16,521,676.98\n3,535.22\n62,666,489.80\n*Dec\n9,986,988.75\n2,139,883.88\n812,138.77\n8,008,605.45\n342,519.81\n2,563,547.94\n8,175,566.68\n5,199,008.24\n6,004,733.95\n1,727,062.36\n15,937,838.06\n3,502.96\n60,901,396.85\n2026\n*Jan\n10,746,125.01\n1,977,346.44\n878,347.57\n7,795,142.24\n281,548.39\n2,727,070.62\n8,442,329.32\n4,376,788.36\n6,482,662.97\n1,668,089.81\n16,642,946.70\n3,411.68\n62,021,809.10\nSource: Reserve Bank of Zimbabwe, 2026\nNotes\ni.Including the only merchant bank still in operation.\n*Statistics are denominated in ZiG\n TABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES\nZWG ('000)\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL & \nINVESTMENTS\nFINANCIAL \nORGANISATIONS\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\n \n \n22 \n \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS\nORGANISATIONS\n2021\nJan\n12,195,945.09\n4,725,946.72\n13,067,828.56\n32,314,625.60\n6,804,952.50\n19,638,789.03\n27,577,248.19\n13,566,042.79\n60,234,250.60\n3,993,814.34\n22,146,327.53\n314,523.37\n216,580,294.30\nFeb\n12,215,925.38\n4,335,293.23\n13,268,343.18\n31,820,079.48\n6,327,338.72\n19,480,197.75\n27,088,789.92\n11,873,767.24\n62,647,881.89\n3,583,509.91\n23,594,651.47\n323,276.77\n216,559,054.94\nMar\n12,086,596.94\n5,009,117.91\n15,457,881.64\n33,668,114.17\n7,879,623.60\n17,019,379.33\n29,927,193.06\n12,664,366.44\n68,761,992.24\n4,513,060.17\n25,352,486.13\n371,874.60\n232,711,686.23\nApr\n14,293,712.79\n6,264,137.34\n17,624,611.65\n35,860,252.53\n7,955,587.69\n18,411,151.82\n32,890,743.11\n11,445,151.89\n81,410,668.87\n4,248,558.67\n27,176,673.47\n411,001.01\n257,992,250.84\nMay\n14,731,869.47\n5,542,211.64\n19,231,383.69\n37,283,237.74\n7,903,622.65\n19,756,317.30\n33,027,214.88\n22,796,168.05\n84,596,653.48\n4,504,355.67\n28,445,264.85\n378,185.06\n278,196,484.46\nJun\n15,628,935.51\n6,154,316.52\n20,722,752.27\n39,604,431.48\n7,861,552.67\n21,455,061.82\n36,502,664.43\n23,449,074.86\n92,196,178.85\n4,756,434.86\n29,731,644.54\n415,508.64\n298,478,556.45\nJul\n14,899,561.10\n6,742,913.66\n25,082,739.85\n39,720,936.02\n9,580,503.84\n24,570,675.98\n38,875,306.10\n31,312,003.24\n94,151,108.53\n5,021,547.73\n32,324,374.53\n568,402.62\n322,850,073.17\nAug\n14,056,945.25\n6,611,127.05\n26,897,316.63\n39,624,666.33\n9,778,338.93\n27,046,620.96\n40,693,944.15\n26,504,554.01\n84,766,848.12\n4,915,399.24\n33,960,935.12\n645,902.41\n315,502,598.18\nSep\n14,777,285.47\n6,264,492.08\n27,413,062.10\n45,375,795.43\n10,337,697.22\n25,786,388.31\n43,113,093.01\n30,700,846.40\n95,985,614.84\n5,605,871.74\n37,606,703.52\n687,817.24\n343,654,667.37\nOct\n14,923,669.66\n8,437,829.51\n26,583,413.65\n47,841,912.79\n11,477,927.22\n29,796,762.93\n51,676,553.79\n49,115,499.00\n111,611,484.23\n5,940,819.15\n35,043,857.03\n618,831.05\n393,068,559.99\nNov\n14,147,912.21\n7,546,852.86\n27,174,334.28\n44,238,573.41\n11,949,923.74\n27,199,271.57\n52,401,389.32\n49,817,772.34\n115,576,831.01\n5,911,967.57\n37,770,843.26\n751,068.72\n394,486,740.29\nDec\n16,522,401.63\n9,204,283.51\n26,835,545.00\n47,381,404.66\n15,303,976.78\n43,092,763.28\n57,822,911.04\n61,555,101.22\n122,091,550.61\n6,093,367.35\n40,046,246.70\n1,319,573.65\n447,269,125.42\n2022\nJan\n17,399,268.45\n9,928,816.10\n28,146,847.17\n46,285,881.10\n15,060,177.49\n34,087,881.41\n60,888,346.70\n38,232,883.69\n135,579,116.46\n6,454,492.58\n32,504,960.47\n745,336.00\n425,314,007.61\nFeb\n20,260,983.50\n9,641,974.72\n32,159,803.23\n50,825,844.50\n15,235,028.54\n35,068,548.54\n49,157,612.17\n43,769,514.96\n146,423,512.16\n7,768,846.48\n36,257,363.98\n724,522.36\n447,293,555.15\nMar\n22,638,817.86\n11,683,937.35\n34,271,841.32\n61,002,811.60\n20,352,647.27\n34,501,628.57\n57,839,997.29\n60,678,395.30\n173,444,002.60\n9,467,563.85\n43,160,654.72\n970,393.82\n530,012,691.56\nApr\n26,926,844.72\n12,304,918.39\n34,924,202.54\n67,201,357.79\n21,444,798.07\n38,606,872.21\n61,303,321.13\n64,980,792.31\n216,612,532.66\n10,455,473.89\n45,951,692.03\n939,217.87\n601,652,023.61\nMay\n39,564,579.03\n21,954,770.23\n42,666,739.38\n108,620,498.72\n28,757,840.78\n54,108,110.44\n88,717,845.18\n107,568,244.73\n291,739,801.56\n14,310,137.61\n65,853,453.06\n1,190,747.91\n865,052,768.60\nJun\n45,956,287.64\n26,686,177.09\n47,155,850.80\n128,881,143.56\n23,783,755.16\n60,238,449.95\n105,247,922.50\n120,389,795.99\n326,034,986.61\n17,068,663.50\n108,828,797.15\n1,325,268.69\n1,011,597,098.65\nJul\n40,699,352.12\n28,329,526.03\n45,417,841.09\n128,847,329.07\n21,958,796.02\n62,326,844.37\n103,536,398.88\n112,642,685.48\n401,574,353.33\n17,902,000.20\n112,555,899.49\n1,117,408.25\n1,076,908,434.33\nAug\n68,438,409.63\n39,107,020.53\n53,616,955.67\n171,501,037.83\n25,370,674.58\n68,913,237.19\n162,326,617.25\n137,243,494.58\n538,409,018.36\n23,523,309.06\n146,121,882.24\n1,197,164.45\n1,435,768,821.37\nSep\n81,174,128.75\n51,501,554.76\n58,104,791.47\n204,056,688.73\n63,246,197.07\n174,562,749.46\n172,521,502.90\n138,936,277.91\n626,755,883.05\n25,607,188.82\n182,077,675.02\n11,177,650.78\n1,789,722,288.71\nOct\n83,201,043.64\n63,984,990.31\n67,031,137.91\n207,367,773.63\n40,617,325.27\n155,873,800.58\n179,051,392.63\n157,121,308.46\n575,293,016.53\n27,092,268.91\n201,852,712.89\n3,193,614.07\n1,761,680,384.82\nNov\n88,153,064.47\n61,978,896.61\n78,744,676.95\n236,152,455.10\n39,915,042.93\n100,872,718.26\n214,281,243.03\n200,240,592.45\n606,580,960.90\n32,903,876.70\n233,604,874.73\n119,223.24\n1,893,547,625.35\nDec\n106,799,918.36\n60,886,327.29\n73,518,960.29\n260,923,049.61\n48,959,835.11\n122,528,998.69\n242,741,914.11\n171,982,170.05\n747,151,447.16\n37,453,518.81\n270,164,633.75\n10,753,958.63\n2,153,864,731.86\n2023\nJan\n114,820,700.76\n79,460,381.87\n82,589,902.30\n305,204,829.91\n45,118,619.63\n135,072,311.14\n263,222,364.10\n223,632,204.71\n896,980,184.31\n37,534,721.96\n288,326,194.21\n7,916,696.92\n2,479,879,111.81\nFeb\n118,375,609.69\n85,995,682.64\n93,761,236.16\n312,626,341.50\n56,688,432.58\n147,245,179.36\n266,610,300.93\n273,709,371.16\n938,437,753.70\n39,909,193.60\n292,841,727.23\n6,842,518.78\n2,633,043,347.35\nMar\n119,963,933.20\n85,731,698.36\n100,697,025.58\n322,453,842.97\n45,619,349.07\n148,455,496.20\n286,712,763.58\n273,572,570.94\n1,064,798,433.60\n44,685,590.57\n330,031,150.72\n14,190,575.51\n2,836,912,430.30\nApr\n131,146,380.30\n89,322,733.64\n99,723,066.84\n324,249,300.08\n45,619,349.07\n149,245,957.86\n289,670,780.41\n273,578,020.75\n1,072,456,655.25\n44,926,335.64\n331,068,417.40\n14,190,575.51\n2,865,197,572.73\nMay\n269,460,363.15\n210,867,012.29\n216,906,304.04\n631,589,937.93\n113,357,505.65\n362,294,051.43\n581,761,350.37\n545,536,680.63\n2,504,454,969.80\n102,648,366.24\n702,960,786.40\n28,985,518.44\n6,270,822,846.38\nJun\n581,642,309.76\n428,772,683.41\n410,699,487.74\n1,366,510,052.55\n227,784,986.62\n700,617,673.80\n1,094,382,949.63\n1,185,026,806.70\n5,283,380,622.25\n199,474,750.17\n1,564,762,675.09\n40,673,167.41\n13,083,728,165.12\nJul\n535,377,934.43\n436,808,429.52\n413,150,823.99\n1,394,747,348.19\n206,866,966.84\n711,462,740.79\n1,157,802,106.76\n982,808,623.76\n4,533,520,705.60\n184,470,180.50\n1,464,856,207.23\n37,277,944.87\n12,059,150,012.48\nAug\n537,439,303.14\n422,479,784.07\n413,226,172.28\n1,343,458,227.81\n285,743,813.63\n662,607,567.90\n1,197,898,912.17\n1,004,826,660.33\n4,639,684,933.86\n209,521,849.57\n1,553,047,811.00\n38,718,344.86\n12,308,653,380.62\nSep\n632,283,427.70\n491,562,911.40\n426,060,663.50\n1,510,241,869.90\n296,604,785.00\n789,587,698.10\n1,300,914,518.50\n1,250,791,974.40\n5,214,851,978.10\n217,382,274.50\n1,781,106,637.90\n43,583,660.40\n13,954,972,399.20\nOct\n721,203,425.90\n541,011,315.61\n554,440,420.11\n1,657,817,920.26\n309,251,239.26\n841,367,968.72\n1,438,592,170.70\n1,187,082,973.91\n5,659,995,585.31\n260,248,908.48\n1,906,411,104.87\n49,647,602.04\n15,127,070,635.17\nNov\n703,080,882.81\n566,993,243.11\n532,803,998.34\n1,698,467,822.71\n346,291,934.28\n269,835,136.30\n1,554,832,195.31\n1,195,274,632.93\n6,063,945,342.98\n293,942,495.06\n2,031,657,547.49\n46,866,707.11\n15,885,967,935.90\nDec\n605,605,541.75\n423,493,370.41\n730,799,100.82\n1,549,938,533.11\n553,801,063.21\n767,650,016.19\n1,254,233,648.36\n1,348,969,145.10\n6,689,372,974.36\n247,647,472.27\n2,091,666,965.12\n53,713,528.87\n16,882,080,093.66\n2024\nJan\n833,932,128.83\n694,796,940.75\n1,029,474,123.23\n2,082,328,111.88\n884,819,488.86\n2,004,818,592.25\n1,699,026,894.47\n1,837,959,924.52\n12,124,252,579.26\n323,794,777.38\n3,044,604,553.80\n71,184,543.75\n26,630,992,658.97\nFeb\n1,156,065,718.20\n1,037,783,187.53\n1,369,731,749.12\n3,170,746,459.37\n114,038,016.39\n3,174,169,477.50\n2,227,190,946.76\n2,855,301,054.35\n15,834,462,125.05\n552,622,448.45\n4,294,792,965.31\n89,063,348.63\n36,904,967,496.65\nMar\n1,783,340,807.00\n1,442,504,457.60\n2,116,410,516.40\n4,588,105,383.90\n1,753,052,451.70\n4,712,657,212.60\n3,465,873,456.30\n3,573,833,122.50\n20,373,593,827.70\n1,006,777,059.10\n8,454,899,690.30\n100,278,506.80\n53,371,326,491.90\n*Apr\n1,476,289.07\n893,193.94\n1,388,298.43\n4,283,881.29\n1,092,218.87\n2,578,995.23\n2,513,192.87\n2,626,884.44\n11,782,151.57\n511,608.90\n5,775,024.95\n62,998.90\n34,984,738.48\n*May \n1,608,650.70\n1,037,123.00\n986,367.13\n3,197,388.56\n1,234,670.10\n3,669,306.62\n2,777,961.02\n2,424,631.17\n13,413,072.92\n726,100.95\n5,909,740.37\n55,506.53\n37,040,519.06\n*Jun\n1,578,119.27\n1,011,831.06\n1,759,648.05\n3,190,728.10\n1,134,620.40\n3,473,307.05\n2,999,644.43\n3,196,350.73\n15,181,074.61\n630,237.37\n5,302,910.12\n65,954.20\n39,524,425.40\n*Jul\n1,709,191.73\n1,060,814.63\n1,786,754.78\n4,244,435.10\n1,695,144.92\n3,842,095.49\n2,685,658.39\n3,860,697.95\n15,154,833.77\n494,408.07\n5,163,064.26\n152,575.18\n41,849,674.27\n*Aug\n1,881,831.48\n1,096,949.95\n1,756,800.10\n4,115,344.75\n1,560,883.79\n5,160,947.59\n3,104,912.00\n2,628,465.51\n14,680,525.46\n510,741.77\n4,692,301.87\n147,285.45\n41,336,989.72\n*Sep\n2,676,045.30\n2,231,428.03\n3,076,033.40\n6,657,466.11\n2,618,571.09\n6,677,406.59\n4,328,506.20\n3,749,838.40\n26,389,976.50\n867,911.20\n8,373,719.22\n219,988.31\n67,866,890.36\n*Oct\n3,485,504.59\n2,567,255.56\n3,535,607.03\n7,474,589.94\n3,299,698.46\n7,968,221.02\n5,044,419.36\n5,097,867.03\n29,458,757.35\n1,018,065.78\n9,462,752.69\n220,427.14\n78,633,165.96\n*Nov\n3,092,857.19\n2,583,575.64\n3,658,337.22\n6,311,484.89\n3,319,494.63\n7,425,250.57\n6,381,558.42\n4,761,639.77\n27,173,979.25\n1,133,673.74\n8,782,149.64\n200,228.74\n74,824,229.70\n*Dec\n3,246,075.75\n3,000,089.39\n3,491,754.69\n6,900,913.48\n3,547,897.26\n7,345,227.12\n6,716,997.93\n4,549,007.97\n27,260,521.53\n1,099,879.74\n10,022,447.18\n355,894.47\n77,536,706.51\n2025\n*Jan\n2,906,778.30\n3,263,210.15\n3,335,010.28\n6,226,024.85\n3,652,381.28\n8,401,231.92\n6,022,841.93\n4,820,773.49\n27,794,296.00\n1,020,418.08\n9,522,377.98\n214,322.39\n77,179,666.65\n*Feb\n3,148,260.00\n2,765,476.21\n2,386,768.37\n6,142,552.78\n3,733,009.01\n8,301,324.64\n5,391,986.88\n4,799,925.63\n27,396,588.33\n1,120,196.78\n10,349,018.64\n257,727.50\n75,792,834.75\n*Mar\n2,931,379.17\n2,536,384.45\n2,998,500.17\n7,205,270.81\n4,098,816.70\n9,412,388.16\n5,090,011.12\n5,298,903.78\n30,409,375.81\n1,367,930.91\n10,495,733.30\n291,454.26\n82,136,148.64\n*Apr\n3,386,026.90\n2,914,075.14\n3,289,407.24\n8,086,383.88\n4,171,684.56\n10,519,094.01\n5,681,605.01\n5,683,058.56\n29,468,736.33\n1,483,286.46\n12,710,551.63\n251,262.54\n87,645,172.24\n*May\n3,791,778.73\n3,137,191.75\n4,015,525.94\n8,522,205.13\n4,083,039.56\n10,506,322.87\n6,181,631.24\n5,246,061.22\n33,512,835.39\n1,339,582.73\n13,286,284.33\n245,907.53\n93,868,366.41\n*Jun\n4,014,093.60\n3,535,586.92\n4,498,509.41\n8,172,595.07\n4,663,956.29\n11,061,597.23\n7,103,169.60\n7,369,633.91\n33,675,926.44\n1,350,750.73\n14,041,884.59\n249,641.43\n99,737,345.22\n*Jul\n3,720,611.16\n3,264,199.67\n4,187,885.93\n7,663,562.57\n4,338,130.51\n11,059,181.15\n6,952,371.00\n6,841,436.42\n31,002,206.47\n1,401,103.60\n13,912,098.40\n249,684.34\n94,592,471.21\n*Aug\n4,067,028.19\n3,593,726.17\n4,621,438.31\n7,757,110.09\n4,870,995.71\n10,663,643.86\n7,009,097.60\n6,845,630.99\n33,663,827.18\n1,515,405.31\n13,535,691.17\n392,861.63\n98,536,456.22\n*Sep\n3,578,478.45\n3,656,834.56\n4,589,839.49\n7,619,973.61\n4,876,364.92\n11,278,677.66\n6,905,187.76\n7,218,138.56\n35,474,081.78\n1,766,880.44\n13,855,223.42\n328,883.65\n101,148,564.30\n*Oct\n3,719,594.69\n4,039,445.93\n3,059,923.54\n7,920,315.73\n3,219,088.24\n6,097,592.23\n7,593,611.16\n7,664,249.48\n36,145,416.07\n1,736,355.29\n13,980,066.86\n27,216,071.31\n122,391,730.52\n*Nov\n3,420,665.56\n3,832,735.79\n3,152,068.13\n8,015,114.34\n2,388,782.34\n6,007,260.87\n6,908,304.95\n7,326,359.41\n32,629,297.31\n1,500,594.37\n14,012,001.61\n25,980,428.94\n115,173,613.61\n*Dec\n3,689,171.21\n3,769,507.03\n3,288,425.32\n8,404,247.29\n2,749,942.28\n7,777,801.42\n7,186,265.58\n7,262,212.22\n34,556,263.14\n1,794,763.76\n14,716,166.65\n27,344,296.57\n122,539,062.46\n2026\n*Jan\n3,682,192.47\n4,088,010.74\n3,612,481.48\n8,604,322.16\n3,171,682.92\n9,122,783.99\n7,142,539.29\n7,306,748.38\n36,129,035.74\n1,688,289.91\n14,014,354.01\n28,464,239.66\n127,026,680.76\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \nZWG ('000)\n \n \n23 \n \nMinimum\nMaximum\nMinimum\nMaximum\n2022\nJan\n39.32\n57.26\n39.62\n39.62\nFeb\n40.55\n57.28\n64.02\n64.02\nMar\n40.74\n57.83\n43.88\n43.88\nApr\n38.15\n59.59\n45.56\n45.56\nMay\n38.01\n59.70\n47.25\n47.25\nJun\n38.45\n60.09\n48.25\n48.25\nJul\n82.75\n123.71\n165.45\n165.45\nAug\n88.46\n123.46\n155.96\n155.96\nSep\n98.07\n123.64\n158.46\n158.46\nOct\n99.37\n127.72\n115.26\n115.26\nNov\n99.03\n127.58\n110.97\n110.97\nDec\n99.02\n125.64\n110.83\n110.83\n2023\nJan\n90.05\n125.64\n116.03\n116.03\nFeb\n60.12\n125.64\n80.88\n80.88\nMar\n74.35\n110.30\n81.46\n81.46\nApr\n74.48\n105.75\n86.96\n86.96\nMay\n77.86\n107.41\n83.61\n83.61\nJun\n76.33\n103.85\n92.64\n92.64\nJul\n77.82\n103.56\n94.80\n94.80\nAug\n77.63\n102.79\n93.18\n93.18\nSep\n76.49\n100.20\n92.69\n92.69\nOct\n71.72\n102.10\n92.43\n92.43\nNov\n70.15\n101.53\n93.15\n93.15\nDec\n69.02\n101.71\n93.77\n93.77\n2024\nJan\n70.18\n100.81\n95.24\n95.24\nFeb\n76.06\n99.20\n93.76\n166.71\nMar\n73.43\n98.46\n91.40\n165.42\n*Apr\n25.91\n32.10\n24.29\n32.52\n*May\n25.17\n31.72\n24.52\n32.65\n*Jun\n24.89\n31.19\n24.46\n33.04\n*Jul\n24.69\n30.62\n24.44\n32.21\n*Aug\n24.42\n30.51\n24.15\n32.43\n*Sep\n24.27\n30.31\n23.92\n32.76\n*Oct\n38.49\n45.17\n36.80\n45.43\n*Nov\n39.25\n45.63\n34.29\n43.88\n*Dec\n41.03\n46.47\n39.91\n45.64\n2025\n*Jan\n41.82\n47.35\n40.13\n46.08\n*Feb\n43.00\n48.60\n40.45\n45.68\n*Mar\n42.33\n47.97\n40.42\n46.11\n*Apr\n42.16\n47.82\n40.43\n46.21\n*May\n43.66\n48.93\n40.27\n46.51\n*Jun\n42.34\n48.06\n40.51\n46.77\n*Jul\n42.50\n48.23\n40.46\n46.43\n*Aug\n43.33\n48.96\n40.39\n46.34\n*Sep\n43.45\n49.06\n40.45\n46.22\n*Oct\n43.54\n49.18\n40.46\n46.40\n*Nov\n43.62\n49.30\n40.49\n46.75\n*Dec\n43.50\n49.23\n40.40\n46.86\n2026\n*Jan\n43.57\n49.46\n40.43\n47.43\nSource: Reserve Bank of Zimbabwe, 2026\n*Lending rates are for ZiG loans\nTABLE 8.1: COMMERCIAL BANKS LENDING RATES (percent per annum)\nIndividuals \nCorporates\nEnd of\nWeighted Lending Rates\n \n \n24 \n \n \nMinimum\nMaximum\nMinimum\nMaximum\n2022\nJan\n3.66\n5.76\n13.16\n16.95\nFeb\n3.72\n6.29\n16.68\n16.84\nMar\n3.83\n5.94\n14.83\n16.95\nApr\n4.22\n6.35\n16.78\n18.53\nMay\n4.21\n6.35\n16.44\n18.42\nJun\n4.21\n6.35\n16.61\n19.05\nJul\n21.06\n23.44\n50.14\n54.58\nAug\n20.09\n20.25\n52.97\n57.29\nSep\n20.09\n20.25\n57.25\n61.08\nOct\n20.09\n20.25\n54.06\n60.55\nNov\n20.38\n20.53\n56.69\n60.87\nDec\n18.03\n18.03\n55.32\n60.08\n2023\nJan\n18.03\n18.03\n55.32\n60.08\nFeb\n18.03\n18.03\n55.32\n60.08\nMar\n34.01\n35.26\n68.06\n73.39\nApr\n36.00\n36.50\n63.06\n71.72\nMay\n35.33\n35.88\n61.31\n69.61\nJun\n35.33\n33.60\n59.18\n65.00\nJul\n34.29\n35.29\n61.67\n69.44\nAug\n34.29\n35.60\n57.67\n70.35\nSep\n34.29\n35.60\n61.67\n69.33\nOct\n34.29\n35.60\n61.67\n70.35\nNov\n35.00\n38.27\n60.81\n69.76\nDec\n34.38\n37.13\n57.94\n65.65\n2024\nJan\n33.75\n37.13\n56.06\n65.65\nFeb\n33.75\n37.13\n56.06\n65.65\nMar\n33.75\n37.13\n56.28\n64.78\n*Apr\n5.22\n5.34\n5.51\n6.04\n*May\n3.75\n3.88\n5.26\n5.78\n*Jun\n3.75\n3.88\n5.27\n5.94\n*Jul\n3.75\n3.88\n5.26\n5.83\n*Aug\n3.75\n3.88\n5.27\n5.89\n*Sep\n3.75\n3.88\n5.27\n5.94\n*Oct\n3.75\n3.88\n5.41\n7.19\n*Nov\n3.75\n3.88\n4.82\n6.19\n*Dec\n3.54\n3.38\n5.67\n8.15\n2025\n*Jan\n3.54\n3.38\n5.67\n8.15\n*Feb\n3.81\n4.14\n5.95\n8.87\n*Mar\n3.81\n4.14\n5.95\n8.87\n*Apr\n3.81\n4.14\n5.95\n8.93\n*May\n3.81\n4.14\n6.09\n9.62\n*Jun\n3.81\n4.14\n5.95\n9.21\n*Jul\n3.67\n3.78\n6.21\n9.37\n*Aug\n3.75\n3.86\n6.90\n10.48\n*Sep\n3.75\n4.08\n6.90\n10.79\n*Oct\n3.75\n4.08\n6.63\n11.10\n*Nov\n3.75\n4.08\n6.90\n10.79\n*Dec\n3.75\n4.08\n6.90\n10.79\n2026\n*Jan\n3.81\n4.14\n6.62\n10.51\nSource: Reserve Bank of Zimbabwe, 2026\n* Deposit rates depict the range of rates qouted by banks. \n*Deposit rates are for ZiG deposits\nSAVINGS\n3 MONTHS\nTABLE 8.2 : COMMERCIAL BANKS DEPOSIT RATES (percent per annum)\n \n \n25 \n \n \nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2022\nJan\n1.08\n0.64\n2.14\n0.42\n0.71\n0.43\n1.51\n12.08\n0.94\n1.90\n0.11\n1.68\n2.53\n1.90\nFeb\n1.82\n3.39\n1.89\n1.79\n0.68\n1.08\n0.60\n0.92\n0.35\n1.39\n1.69\n1.76\n3.43\n2.20\nMar\n2.59\n2.24\n0.77\n1.22\n0.96\n5.86\n2.27\n0.82\n0.15\n1.02\n-0.06\n1.67\n3.05\n2.04\nApr\n3.38\n1.68\n14.21\n5.59\n1.77\n1.93\n1.73\n1.76\n2.91\n6.05\n1.87\n7.17\n6.94\n7.11\nMay\n3.70\n8.73\n2.02\n1.21\n2.46\n3.36\n2.47\n2.06\n0.48\n3.33\n3.78\n3.12\n9.56\n4.85\nJun\n8.20\n7.94\n12.49\n10.84\n13.72\n5.65\n4.95\n6.63\n4.63\n5.35\n9.86\n9.85\n17.32\n11.95\nJul\n4.57\n1.91\n8.66\n5.87\n3.74\n2.16\n1.21\n2.64\n11.86\n2.00\n2.15\n5.88\n12.09\n7.71\nAug\n3.71\n2.47\n2.01\n1.44\n1.98\n1.59\n1.91\n1.12\n0.41\n1.21\n2.93\n2.02\n4.94\n2.91\nSep\n-2.39\n-1.80\n5.21\n-3.33\n-0.66\n-1.20\n10.12\n0.36\n8.21\n-1.80\n-1.68\n1.99\n-3.23\n0.36\nOct\n0.81\n1.31\n6.74\n1.83\n0.72\n0.88\n2.83\n1.21\n0.10\n0.72\n0.68\n3.29\n2.10\n2.93\nNov\n-0.23\n0.35\n0.34\n0.60\n0.85\n0.25\n4.30\n0.48\n16.78\n19.32\n0.85\n1.71\n0.23\n1.27\nDec\n0.39\n0.76\n0.20\n-0.24\n0.03\n-0.15\n3.91\n-0.10\n0.00\n0.73\n-0.23\n0.28\n1.55\n0.66\n2023\nJan\n0.17\n-0.62\n0.81\n0.34\n0.26\n0.45\n-2.36\n0.45\n0.06\n-0.58\n0.54\n0.33\n-0.77\n0.00\nFeb\n-3.59\n-1.56\n-3.56\n-1.27\n-1.02\n-4.40\n-1.81\n-2.19\n0.06\n-3.63\n-7.55\n-3.40\n-4.54\n-3.73\nMar\n-0.57\n-0.46\n-0.01\n-0.71\n-0.10\n-0.13\n0.44\n-0.24\n0.16\n-0.16\n-0.42\n-0.18\n-0.66\n-0.32\nApr\n1.05\n0.05\n2.79\n-0.18\n0.92\n0.18\n0.59\n0.43\n0.53\n0.35\n0.55\n1.36\n1.96\n1.54\nMay\n3.05\n0.34\n3.03\n-0.08\n2.87\n1.74\n6.10\n1.65\n1.19\n0.99\n2.35\n2.34\n3.37\n2.64\nJun\n11.74\n0.93\n14.88\n-0.85\n9.19\n5.27\n23.88\n5.15\n3.07\n3.15\n6.58\n9.53\n18.23\n12.10\nJul\n1.68\n0.51\n0.36\n0.56\n-0.34\n0.69\n0.68\n-0.11\n1.04\n2.82\n1.11\n0.65\n1.85\n1.03\nAug\n-1.11\n-0.11\n-2.00\n-0.19\n-0.02\n-0.02\n-0.61\n-0.53\n-0.45\n-0.40\n-1.37\n-1.12\n-1.83\n-1.34\nSep\n0.32\n0.04\n0.34\n0.30\n-0.38\n0.63\n5.77\n-0.21\n5.97\n-0.10\n0.91\n0.91\n1.05\n0.95\nOct\n1.91\n1.10\n4.96\n0.54\n1.89\n2.81\n-2.69\n0.43\n-4.21\n0.53\n2.43\n2.48\n2.42\n2.46\nNov\n1.94\n0.60\n8.93\n-0.36\n2.45\n1.30\n3.24\n0.79\n4.28\n-0.67\n1.07\n4.39\n4.89\n4.54\nDec\n3.49\n1.41\n5.40\n0.63\n0.55\n0.86\n0.71\n1.92\n0.22\n1.07\n1.95\n2.90\n8.64\n4.70\n2024\nJan\n2.65\n-2.53\n5.48\n-1.30\n-3.17\n11.61\n-8.22\n-3.90\n5.52\n0.78\n-3.36\n2.50\n15.01\n6.58\nFeb\n3.31\n0.26\n4.84\n0.64\n2.77\n2.47\n8.40\n2.25\n1.67\n1.15\n3.35\n2.98\n9.83\n5.39\nMar\n2.48\n0.76\n4.89\n0.62\n2.44\n2.39\n10.08\n2.14\n2.02\n1.75\n2.85\n2.48\n8.13\n4.89\nApr\n1.35\n0.66\n3.69\n0.28\n0.77\n1.01\n2.60\n0.18\n6.85\n-0.26\n0.87\n4.19\n4.19\n2.94\n*May\n-6.05\n-1.36\n0.54\n-3.09\n-1.14\n-0.73\n0.65\n-2.60\n0.00\n-0.90\n-2.82\n-0.99\n-5.55\n-2.42\n*Jun\n-0.48\n0.82\n0.08\n0.21\n0.44\n0.84\n0.33\n-0.03\n0.17\n0.04\n0.21\n0.22\n-0.38\n0.04\n*Jul\n0.57\n0.89\n0.38\n-0.11\n0.45\n-0.45\n-2.41\n0.06\n0.37\n0.22\n0.09\n0.14\n-0.73\n-0.13\n*Aug\n2.31\n1.57\n0.20\n2.07\n1.19\n2.72\n-0.06\n1.41\n0.49\n1.24\n2.11\n1.14\n2.15\n1.44\n*Sep\n11.10\n3.65\n1.14\n6.71\n4.01\n5.70\n2.87\n6.26\n0.86\n4.45\n7.46\n3.89\n10.15\n5.78\n*Oct\n55.63\n44.94\n16.79\n39.81\n50.55\n38.72\n42.19\n49.16\n3.69\n30.79\n54.02\n31.75\n49.25\n37.25\n*Nov\n15.83\n15.10\n2.30\n15.16\n15.13\n13.80\n6.82\n17.47\n4.67\n10.69\n14.76\n9.67\n15.66\n11.72\n*Dec\n4.07\n6.71\n1.49\n3.19\n3.69\n3.57\n3.29\n2.46\n6.03\n3.61\n3.52\n3.19\n4.56\n3.67\n2025\n*Jan\n6.85\n4.51\n2.80\n30.66\n7.15\n3.96\n1.81\n7.91\n1.54\n0.00\n2.41\n5.75\n6.85\n10.50\n*Feb\n-0.32\n0.58\n0.22\n0.81\n0.93\n0.46\n0.57\n0.42\n1.25\n0.80\n-0.63\n0.27\n0.81\n0.46\n*Mar\n0.83\n0.15\n0.00\n-0.13\n0.93\n0.34\n-0.25\n-1.08\n2.43\n-0.53\n-0.22\n0.16\n-0.46\n-0.06\n*Apr\n1.31\n0.88\n1.67\n0.26\n1.17\n0.66\n-0.80\n1.05\n0.87\n2.92\n0.85\n1.11\n-0.25\n0.64\n*May\n1.14\n0.88\n0.20\n0.61\n1.58\n0.25\n-0.52\n0.35\n0.82\n0.04\n0.41\n0.58\n1.62\n0.93\n*Jun\n0.09\n0.77\n0.29\n0.70\n0.91\n0.75\n2.66\n0.45\n0.78\n0.19\n0.35\n0.53\n-0.21\n0.28\n*Jul\n0.36\n1.21\n5.44\n0.11\n0.68\n1.58\n-0.75\n0.60\n-0.46\n0.40\n-0.46\n2.29\n0.18\n1.57\n*Aug\n0.07\n1.17\n-0.01\n0.33\n1.54\n1.47\n3.11\n-0.06\n4.03\n2.78\n-0.07\n0.64\n-0.07\n0.40\n*Sep\n-0.07\n-0.26\n-0.66\n-0.69\n-0.39\n-1.32\n-0.06\n0.47\n0.28\n-0.53\n0.05\n-0.48\n0.21\n-0.25\n*Oct\n-0.51\n-0.67\n-2.51\n-0.17\n-0.24\n0.98\n1.74\n-0.18\n0.00\n0.09\n-0.22\n-0.90\n0.71\n-0.36\n*Nov\n-0.23\n-0.30\n0.08\n0.00\n0.97\n0.45\n-0.03\n-0.59\n-0.72\n-0.65\n-0.36\n-0.03\n0.65\n0.20\n*Dec\n-0.63\n-0.18\n0.20\n0.15\n-0.48\n0.14\n-0.01\n0.13\n-0.04\n0.79\n0.03\n0.04\n0.57\n0.23\n2026\n*Jan\n2.45\n0.92\n-0.12\n-0.58\n-1.22\n-0.29\n-0.73\n-1.42\n1.29\n-0.06\n-1.30\n-0.05\n0.11\n0.01\nSource: Zimstat, 2026\n*Statistics are in ZiG\nFURNITURE AND \nEQUIPMENT\nHEALTH\nTRANSPORT\nCOMMUNICATION\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nFOOD & NON \nALCOHOLIC \nBEVERAGES\nALL \nITEMS\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & OTHER \nFUELS\nCLOTHING & \nFOOTWEAR\nRECREATION & \nCULTURE\nRESTAURANTS & \nHOTELS\nEDUCATION\nMISC. GOODS & \nSERVICES\nTOTAL NON \nFOOD\nALCOHOLIC \nBEVERAGES & \nTOBACCO\n \n \n26 \n \n \n \nFOOD \nINFLATION\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2021\nJan\n20.60\n-2.07\n36.36\n-1.28\n10.32\n-3.60\n128.10\n-5.01\n-21.25\n-30.63\n-23.35\n12.89\n17.44\n14.03\nFeb\n39.34\n9.50\n38.02\n12.01\n25.35\n8.60\n82.62\n14.90\n-32.54\n-21.66\n-17.59\n18.72\n29.84\n21.45\nMar\n14.17\n6.58\n29.52\n3.24\n5.87\n19.12\n92.07\n6.36\n6.81\n-2.73\n-7.44\n18.40\n22.51\n19.45\nApr\n14.30\n5.98\n30.11\n3.19\n6.13\n19.96\n93.18\n5.32\n25.12\n-1.35\n-10.56\n19.42\n22.82\n20.29\nMay\n15.83\n14.44\n20.88\n4.68\n16.10\n25.82\n102.08\n55.83\n36.63\n-3.32\n-9.20\n20.10\n22.47\n20.70\nJun\n12.75\n14.64\n22.39\n15.03\n9.18\n12.04\n70.11\n42.04\n30.41\n4.24\n-7.69\n19.04\n28.60\n21.31\nJul\n6.39\n11.64\n23.80\n10.15\n3.85\n6.95\n52.67\n52.59\n39.02\n13.15\n8.80\n18.71\n15.01\n17.76\nAug\n13.21\n12.09\n24.34\n11.12\n5.35\n6.76\n15.74\n59.33\n35.23\n16.34\n4.54\n18.18\n18.05\n18.15\nSep\n14.96\n12.70\n25.60\n16.41\n6.74\n12.34\n14.92\n60.58\n36.28\n21.35\n9.67\n20.76\n21.15\n20.86\nOct\n17.72\n16.64\n21.34\n23.27\n7.60\n13.62\n22.43\n60.80\n38.87\n20.39\n10.27\n21.05\n24.80\n21.99\nNov\n16.80\n14.54\n22.11\n24.82\n6.57\n13.72\n27.83\n60.49\n15.38\n17.92\n11.34\n20.15\n24.28\n21.19\nDec\n17.38\n12.07\n20.56\n24.61\n6.62\n10.09\n28.48\n61.86\n16.79\n14.71\n12.21\n19.00\n21.96\n19.76\n2022\nJan\n15.38\n11.03\n21.29\n20.02\n4.81\n7.80\n28.71\n82.72\n15.93\n17.46\n8.22\n18.46\n21.56\n19.26\nFeb\n16.00\n15.14\n25.74\n22.76\n3.87\n7.80\n31.58\n66.63\n18.83\n20.23\n9.44\n20.73\n23.23\n21.38\nMar\n18.84\n17.81\n25.15\n19.07\n7.41\n13.39\n28.67\n68.48\n18.98\n20.57\n9.57\n21.54\n26.32\n22.80\nApr\n22.71\n20.48\n42.29\n25.78\n9.04\n14.77\n30.15\n73.15\n4.52\n26.09\n15.50\n29.14\n34.75\n30.60\nMay\n26.46\n27.91\n43.15\n26.23\n11.74\n17.68\n33.27\n24.17\n3.66\n27.29\n19.09\n30.37\n47.22\n34.70\nJun\n34.62\n32.92\n47.25\n30.78\n25.21\n23.62\n38.51\n30.74\n3.41\n30.29\n28.37\n36.30\n68.72\n44.47\nJul\n38.99\n33.16\n59.19\n38.55\n30.80\n25.88\n40.04\n33.42\n15.74\n32.91\n29.63\n43.58\n89.00\n54.99\nAug\n41.70\n35.49\n60.73\n39.17\n31.89\n26.54\n37.81\n34.54\n16.27\n31.74\n31.34\n44.88\n96.89\n57.92\nSep\n35.93\n32.94\n66.48\n32.64\n30.19\n25.02\n45.99\n33.85\n26.81\n27.66\n27.17\n45.91\n86.25\n56.09\nOct\n35.00\n33.64\n76.23\n32.71\n30.19\n24.29\n39.72\n34.98\n24.31\n26.52\n26.89\n48.43\n83.72\n57.47\nNov\n33.55\n33.65\n74.26\n32.03\n30.42\n23.10\n39.54\n35.12\n55.96\n48.48\n26.56\n49.54\n78.43\n57.06\nDec\n30.92\n33.36\n72.02\n30.01\n29.63\n23.87\n44.62\n33.64\n55.91\n47.88\n23.73\n48.22\n77.66\n55.93\n2023\nJan\n29.74\n31.69\n69.78\n29.91\n29.05\n23.89\n39.11\n19.78\n54.56\n44.29\n24.25\n46.26\n71.94\n53.03\nFeb\n22.86\n25.38\n60.69\n26.01\n26.87\n23.89\n35.79\n16.09\n54.11\n37.14\n12.96\n38.85\n58.69\n44.14\nMar\n19.07\n22.07\n59.46\n23.60\n25.55\n23.89\n33.36\n14.86\n54.13\n35.54\n12.56\n36.31\n52.99\n40.80\nApr\n16.38\n20.11\n43.52\n16.85\n24.51\n23.89\n31.87\n13.36\n50.56\n28.25\n11.10\n28.93\n45.87\n33.48\nMay\n15.66\n10.84\n44.93\n15.37\n25.01\n23.89\n36.54\n12.90\n51.63\n25.34\n9.57\n27.96\n37.63\n30.68\nJun\n19.45\n3.65\n48.01\n3.20\n20.03\n23.89\n61.17\n11.33\n49.36\n22.73\n6.31\n27.58\n38.70\n30.85\nJul\n16.14\n2.22\n36.71\n-1.98\n15.30\n23.89\n60.33\n8.34\n34.91\n23.72\n5.22\n21.28\n26.03\n22.74\nAug\n10.74\n-0.36\n31.33\n-3.54\n13.04\n23.89\n56.36\n6.57\n33.75\n21.75\n0.82\n17.55\n17.90\n17.66\nSep\n13.82\n1.52\n25.26\n0.08\n13.36\n23.89\n50.18\n5.97\n30.99\n23.86\n3.48\n16.31\n23.12\n18.36\nOct\n15.06\n1.31\n23.16\n-1.20\n14.66\n7.28\n42.11\n5.15\n25.35\n23.64\n5.28\n15.40\n23.50\n17.82\nNov\n17.55\n1.56\n33.71\n-2.14\n16.48\n8.40\n40.66\n5.48\n11.94\n2.93\n5.52\n18.43\n29.24\n21.63\nDec\n21.19\n2.22\n40.65\n-1.28\n17.09\n9.49\n36.33\n7.61\n12.19\n3.27\n7.82\n21.52\n38.26\n26.52\n2024\nJan\n24.18\n0.25\n47.17\n-2.90\n13.08\n21.65\n28.14\n2.95\n18.31\n4.68\n3.64\n24.16\n60.25\n34.84\nFeb\n33.06\n2.10\n59.99\n-1.02\n17.41\n30.39\n41.46\n7.62\n20.22\n9.87\n15.86\n32.35\n84.37\n47.62\nMar\n37.15\n3.35\n67.82\n0.31\n20.39\n33.68\n55.04\n10.19\n22.44\n11.97\n19.67\n36.58\n100.68\n55.34\nApr\n37.55\n3.98\n69.28\n0.77\n20.20\n34.79\n58.13\n9.93\n30.14\n11.30\n20.06\n42.42\n105.07\n57.48\n2025\n*Apr\n113.35\n96.45\n65.25\n89.90\n102.12\n82.73\n70.72\n92.09\n22.68\n66.55\n106.90\n77.85\n102.86\n85.68\n*May\n129.68\n100.90\n64.69\n97.15\n107.69\n86.74\n68.74\n97.91\n23.68\n68.14\n113.77\n80.67\n118.27\n92.06\n*Jun\n130.99\n100.81\n65.04\n98.10\n108.68\n86.58\n72.66\n98.85\n24.44\n68.39\n114.06\n81.23\n118.65\n92.52\n*Jul\n130.50\n101.45\n73.37\n98.55\n109.16\n90.38\n75.58\n99.93\n23.42\n68.69\n112.89\n95.79\n120.66\n95.79\n*Aug\n125.47\n100.66\n73.00\n95.15\n109.89\n88.08\n81.14\n97.03\n27.76\n71.25\n108.36\n84.22\n115.87\n93.78\n*Sep\n102.80\n93.09\n69.93\n81.62\n101.02\n75.60\n75.97\n86.29\n27.03\n63.08\n94.00\n76.64\n96.40\n82.74\n*Oct\n29.65\n32.33\n41.84\n29.69\n33.20\n27.83\n25.91\n24.67\n22.50\n24.80\n25.68\n32.74\n32.53\n32.67\n*Nov\n11.68\n14.61\n38.76\n12.62\n16.82\n12.82\n17.83\n5.51\n16.20\n12.01\n9.12\n21.00\n15.34\n18.99\n*Dec\n6.64\n7.22\n36.99\n9.30\n12.12\n9.10\n14.07\n3.10\n9.54\n8.97\n5.43\n17.31\n10.94\n15.04\n2026\n*Jan\n4.54\n5.25\n4.73\n1.42\n6.54\n6.84\n4.93\n0.10\n10.95\n6.35\n-1.60\n4.20\n3.95\n4.11\nSource: Zimstat, 2026\n*Statistics are in ZiG\nFOOD & NON \nALCOHOLIC \nCEVERAGES \nALL ITEMS\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nNON-FOOD INFLATION\nHEALTH\nTRANSPORT\nCOMMUNICATION\nEDUCATION\nALCOHOLIC \nBEVERAGES \n& TOBACCO \nCLOTHING \n& \nFOOTWEAR\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & \nOTHER FUELS\nFURNITURE \nAND \nEQUIPMENT\nRECREATION \n& CULTURE\nRESTAURANTS \n& HOTELS\nMISC. \nGOODS & \nSERVICES\nTOTAL NON \nFOOD\n \n \n27 \n \n \n \n2022\nJan\n115.422\n7.4069\n9.8109\n0.9995\n128.8401\n154.8332\nFeb\n124.019\n8.0738\n10.7214\n1.0732\n138.2625\n165.6148\nMar\n142.424\n9.8091\n12.4763\n1.1665\n159.0161\n186.8670\nApr\n159.348\n10.0334\n13.1064\n1.2217\n167.9530\n199.4880\nMay\n290.888\n18.7787\n24.3182\n2.2757\n312.8351\n367.1438\nJun\n366.269\n22.5194\n29.7593\n2.6861\n382.8607\n444.3572\nJul\n416.289\n25.2673\n33.2407\n3.1299\n425.1560\n507.7061\nAug\n546.825\n32.3336\n42.8164\n3.9498\n548.9033\n638.9381\nSep\n621.532\n34.5376\n46.4284\n4.2999\n609.9716\n691.9517\nOct\n632.137\n34.7014\n47.2839\n4.2742\n628.8500\n732.8998\nNov\n654.865\n38.5947\n51.0140\n4.7279\n677.5889\n784.3319\nDec\n671.447\n39.5836\n52.6414\n5.0669\n715.4935\n809.2610\n2023\nJan\n796.522\n45.7487\n61.8897\n6.1132\n863.6683\n983.1863\nFeb\n889.133\n48.1898\n66.7294\n6.5202\n941.1468\n1070.6489\nMar\n929.862\n52.0727\n71.3204\n6.9912\n1013.3634\n1151.6803\nApr\n1047.445\n57.1437\n79.4723\n7.7646\n1151.0384\n1309.3061\nMay\n2577.056\n130.3252\n186.5789\n18.4901\n2755.1310\n3192.3286\nJun\n5739.000\n306.2597\n425.5469\n39.6710\n6240.5886\n7250.9396\nJul\n4516.803\n255.8972\n346.4388\n31.8342\n4971.8704\n5801.8328\nAug\n4608.107\n246.2293\n343.3039\n31.5721\n5031.5916\n5860.1292\nSep\n5466.747\n288.5390\n396.3391\n36.6073\n5782.7246\n6680.6377\nOct\n5698.961\n301.1746\n417.7338\n37.9539\n6039.7584\n6920.5328\nNov\n5791.080\n309.3526\n429.6053\n39.3710\n6363.8242\n7330.4810\nDec\n6104.723\n329.1177\n455.4123\n43.1811\n6753.9598\n7783.5213\n2024\nJan\n10152.393\n555.5556\n745.3522\n65.3595\n10985.0050\n12870.8909\nFeb\n14912.829\n769.2308\n1082.9160\n99.0099\n16156.7220\n18886.3930\nMar\n22055.474\n1165.3008\n1610.0496\n145.7394\n23872.8448\n27868.1939\n*Apr\n13.4301\n0.7185\n0.9542\n0.0857\n14.3722\n16.8366\n*May\n13.3177\n0.7089\n0.9762\n0.0850\n14.4098\n16.9421\n*Jun\n13.7031\n0.7414\n1.0065\n0.0851\n14.6500\n17.3056\n*Jul\n13.7446\n0.7532\n1.0141\n0.0870\n14.9010\n17.6623\n*Aug\n13.7998\n0.7653\n1.0283\n0.0944\n15.2106\n17.8698\n*Sep\n14.9588\n0.8491\n1.1308\n0.1046\n16.6101\n19.7600\n*Oct\n26.7752\n1.5243\n2.0166\n0.1790\n29.1961\n34.9654\n*Nov\n25.7613\n1.4365\n1.9056\n0.1676\n27.3826\n32.8510\n*Dec\n25.6843\n1.4166\n1.8831\n0.1678\n26.9255\n32.5120\n2025\n*Jan\n26.1493\n1.3956\n1.8772\n0.1670\n27.0736\n32.3011\n*Feb\n26.7654\n0.6835\n1.9622\n0.1795\n29.0177\n34.6893\n*Mar\n26.6787\n1.4588\n1.9508\n0.1788\n28.5428\n34.4141\n*Apr\n26.8023\n1.4182\n1.9371\n0.1855\n30.0241\n33.8697\n*May\n26.8657\n1.4817\n1.9826\n0.1854\n30.2848\n35.8782\n*Jun\n26.9125\n1.4958\n1.9959\n0.1861\n30.6525\n36.2024\n*Jul\n26.8367\n1.5123\n1.9559\n0.1828\n31.3728\n36.2626\n*Aug\n26.7665\n1.5098\n1.8838\n0.1813\n31.1270\n35.9603\n*Sep\n26.6638\n1.5274\n1.8858\n0.1804\n31.2864\n36.0137\n*Oct\n26.5958\n1.5434\n1.8750\n0.1762\n31.0557\n35.6428\n*Nov\n26.3274\n1.5269\n1.8654\n0.1696\n29.2852\n34.5812\n*Dec\n26.1008\n1.5470\n1.8503\n0.1676\n30.5428\n34.9002\n2026\n*Jan\n25.5806\n1.6145\n1.8806\n0.1660\n30.4883\n35.1709\nSource: Reserve Bank of Zimbabwe, 2026\n TABLE 10 : SELECTED INTERNATIONAL EXCHANGE RATES\n*The Reserve Bank introduced a new currency ZiG on 5 April \n& recalibrated exchange rates to ZiG\nEND O F\nUSA DO LLAR\nSO UTH ARFICAN \nRAND\nBO TSWANA PULA\nJAPANESE YEN\nEURO\nPO UND \nSTERLING\n \n \n28 \n \n \n \nMarket Capitalisation\nAll Share Index*\nZWG millions\n2022\nJan\n12079.74\n8196.79\n3704.23\n82,402,101\n1,475,217.45\nFeb\n14990.42\n9300.03\n7979.35\n156,327,700\n1,863,028.60\nMar\n15858.92\n11289.34\n8186.00\n117,815,800\n1,964,738.42\nApr\n28391.75\n30527.28\n11366.89\n193,411,483\n3,547,347.52\nMay\n23072.46\n20021.24\n8211.45\n195,475,400\n2,893,011.70\nJune\n19791.94\n20021.24\n14570.16\n271,227,100\n2,439,165.45\nJuly\n16594.91\n20021.24\n23673.34\n239,937,180\n2,068,222.01\nAug\n13705.12\n15473.37\n8674.85\n139,225,500\n1,685,592.28\nSept\n14771.65\n18929.75\n5128.54\n137,092,750\n1,819,157.07\nOct\n15072.14\n23659.53\n8657.90\n201,566,548\n1,826,101.68\nNov\n14577.46\n25478.67\n7680.78\n90,311,600\n1,610,203.36\nDec\n19493.85\n25487.77\n27753.79\n472,926,200\n2,044,869.14\n2023\nJan\n22813.24\n25496.86\n11638.16\n102,792,200\n2,460,037.66\nFeb\n28548.02\n29207.92\n24410.54\n164,006,458\n2,576,324.76\nMar\n38568.48\n37359.78\n14262.67\n97,920,600\n3,381,456.06\nApr\n41391.62\n36393.55\n16756.85\n74,505,000\n3,482,408.54\nMay\n108195.29\n52765.85\n34867.41\n206,593,600\n8,939,058.47\nJun\n171408.90\n76960.49\n85279.40\n192,473,571\n13,987,476.83\nJul\n114746.13\n89512.59\n40846.72\n176,547,600\n9,171,346.28\nAug\n125134.79\n109159.36\n39214.53\n103,854,600\n9,723,577.74\nSep\n126642.42\n125531.67\n91310.72\n343,359,119\n9,873,493.87\nOct\n157083.06\n125531.67\n31773.08\n64,000,500\n12,576,665.45\nNov\n191271.68\n148883.44\n54864.31\n162,675,500\n15,311,628.01\nDec\n210833.92\n145542.27\n109727.94\n254,991,213\n16,812,914.36\n2024\nJan\n542743.66\n163733.73\n112532.73\n79,766,490\n43,459,150.79\nFeb\n525570.76\n216534.42\n103474.44\n73,940,200\n41,499,016.93\nMar\n873263.38\n218308.09\n123025.50\n54,297,600\n49,235,325.40\n*Apr\n98.82\n114.07\n22,304,969\n21,943,400\n28,571.12\n*May\n101.07\n114.07\n75,913,056\n58,831,200\n29,394.99\n*Jun\n128.64\n114.16\n99,811,029\n182,514,300\n38,710.43\n*Jul\n198.14\n253.49\n260,505,803\n93,603,100\n60,570.91\n*Aug\n200.49\n253.42\n164,625,191\n118,159,000\n61,448.73\n*Sep \n243.41\n251.68\n273,853,848\n257,091,400\n74,489.51\n*Oct\n289.12\n251.68\n502,844,478\n107,115,500\n89,605.28\n*Nov\n265.10\n235.38\n285,159,922\n72,864,500\n82,184.61\n*Dec\n217.58\n235.38\n225,234,022\n152,111,200\n66,241.20\n2025\n*Jan\n195.57\n229.61\n196,982,719\n187,781,200\n58,794.86\n*Feb\n204.06\n193.56\n506,135,991\n197,200,800\n62,060.95\n*Mar\n205.25\n180.43\n229,916,317\n92,886,500\n62,916.75\n*Apr\n191.95\n143.95\n268,269,085\n150,502,500\n58,411.66\n*May\n196.85\n145.40\n600,720,736\n269,991,681\n59,973.06\n*Jun\n197.23\n145.40\n532,262,807\n393,325,459\n60,971.48\n*Jul\n205.71\n144.85\n765,887,092\n429,345,471\n64,302.76\n*Aug\n208.72\n145.31\n689,801,108\n428,725,700\n65,354.76\n*Sep\n210.63\n123.58\n451,998,794\n95,397,473\n65,675.91\n*Oct\n213.68\n115.11\n390,818,131\n120,365,000\n67,708.46\n*Nov\n234.97\n109.09\n375,030,961\n83,164,380\n74,763.01\n*Dec\n277.86\n117.69\n358,174,079\n98,696,587\n87,257.33\n2026\n*Jan\n356.04\n117.69\n914,177,266\n982,355,100\n110,645.38\nSource: Zimbabwe Stock Exchange, 2026\n**As at 26 June 2020\n***The ZSE rebased indices to 100 in April 2024 following the introduction of the ZiG\n*Statistics are denominated in ZiG\nTABLE 11: ZIMBABWE STOCK MARKET STATISTICS\nMining Index\n Market Turnover \nZWG \nVolume of Shares\nEND OF\n*All Share index was introduced in January, 2018\n \n \n29 \n \n \n \nEND OF\nZETSS \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n255551.3\n21042.2\n2300.3\n35349.1\n66624.4\nFeb\n226335.8\n22882.6\n2288.9\n36434.4\n63598.2\nMar\n320422.1\n28569.9\n3316.6\n44524.0\n86463.9\nApr\n288958.8\n30071.5\n2807.0\n44131.6\n90580.4\nMay\n361427.1\n36765.1\n3193.7\n49745.8\n89471.3\nJun\n388757.5\n38540.1\n3200.0\n51437.4\n115145.7\nJul\n379659.9\n45808.1\n2489.1\n57565.8\n145027.0\nAug\n397539.0\n52853.9\n4086.0\n60908.4\n159206.6\nSep\n477933.6\n52262.7\n4179.5\n64139.2\n181194.8\nOct\n481180.9\n53165.9\n3839.9\n65329.0\n197972.5\nNov\n621896.7\n56025.3\n4877.0\n63017.5\n252407.9\nDec\n747035.6\n67903.9\n4705.5\n76511.6\n264749.2\n2022\nJan\n802677.7\n55961.6\n5074.7\n53456.3\n218545.3\nFeb\n672723.0\n59581.6\n5607.0\n66812.0\n238910.8\nMar\n961452.0\n75050.7\n7882.2\n82886.9\n342168.7\nApr\n976617.2\n89192.6\n8391.5\n89672.0\n293204.6\nMay\n1205990.0\n110807.3\n13712.8\n106881.8\n469185.2\nJune\n1601225.3\n134551.0\n18810.6\n123721.3\n618347.5\nJuly\n1754112.0\n170480.6\n20413.1\n172562.5\n713401.1\nAug\n2334295.0\n152343.4\n31418.6\n178188.9\n826377.1\nSep\n2793056.6\n177701.7\n35144.4\n202368.1\n872807.4\nOct\n2728731.3\n186478.9\n50202.3\n209758.0\n622412.8\nNov\n3370779.9\n202876.2\n61086.7\n213295.3\n734610.6\nDec\n3310814.9\n246783.6\n76872.0\n249516.4\n1106346.5\n2023\nJan\n3289379.3\n240010.3\n68386.7\n238455.3\n1107756.4\nFeb\n3050933.3\n219437.8\n73672.3\n245282.5\n1202998.5\nMar\n5068223.7\n308609.1\n85343.4\n328822.3\n1517972.6\nApr\n1594.5\n136.7\n31.9\n142.1\n602.9\nMay\n2511.4\n207.4\n69.3\n212.9\n1310.7\nJun\n6827.3\n353.1\n246.2\n484.4\n2657.6\nJul\n7147.5\n413.7\n216.7\n648.4\n2432.3\nAug\n7186.0\n407.4\n260.1\n576.5\n2499.2\nSep\n7479.9\n488.9\n309.5\n669.4\n3100.0\nOct\n7927.5\n506.1\n330.8\n786.1\n3466.4\nNov\n9479.0\n572.0\n360.8\n800.0\n3824.9\nDec\n10563.9\n722.4\n437.3\n1042.2\n4062.3\n2024\nJan\n11319.8\n763.3\n740.8\n1638.0\n8812.4\nFeb\n15327.4\n1143.5\n1072.2\n2212.8\n11833.0\nMar\n24185.4\n1575.6\n1786.8\n2219.1\n14945.0\n*Apr\n41317.5\n2063.0\n2797.1\n4754.9\n15996.5\n*May\n53741.3\n3335.6\n3355.4\n7058.0\n22545.4\n*Jun\n51046.4\n3281.7\n3230.9\n6470.4\n22040.1\n*Jul\n63526.1\n3956.0\n3646.3\n7361.7\n27328.4\n*Aug\n54975.9\n3973.7\n3937.3\n7555.9\n25760.6\n*Sep\n65045.5\n4685.2\n5331.4\n1194.1\n38798.2\n*Oct\n109554.7\n6900.1\n6836.3\n16082.3\n50983.1\n*Nov\n107345.1\n7074.6\n6940.4\n15645.3\n47876.4\n*Dec\n123594.8\n7954.5\n8665.2\n17068.5\n50613.2\n2025\n*Jan\n105337.9\n7252.4\n6858.9\n14579.5\n44760.8\n*Feb\n92208.7\n5961.2\n6364.9\n14208.9\n43833.1\n*Mar\n112646.3\n6785.3\n7339.8\n17156.0\n47320.6\n*Apr\n116945.5\n7294.4\n7046.2\n19678.2\n49770.4\n*May\n128946.5\n9194.3\n8439.4\n23187.8\n53674.7\n*Jun\n138127.3\n8384.0\n9486.4\n21162.1\n54257.1\n*Jul\n138187.6\n9025.2\n9523.3\n21930.1\n58804.4\n*Aug\n109473.9\n7154.9\n8818.4\n21485.6\n58556.4\n*Sep\n132722.3\n7080.7\n9387.7\n23110.2\n67610.3\n*Oct\n134725.7\n7722.3\n9876.5\n24887.4\n59362.4\n*Nov\n129416.8\n7942.7\n10352.2\n24452.5\n51850.3\n*Dec\n164856.4\n8708.9\n11967.8\n27927.4\n61921.6\n2026\n*Jan\n140128.2\n7466.6\n9030.4\n24586.8\n25769.6\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\nTABLE 12.1 : ZETSS AND RETAIL PAYMENTS \n Values of Transactions (ZWG Millions)\n \n \n30 \n \n \n \nEND OF\nZETSS \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n720.0\n9849.3\n229.0\n94691.4\n872.2\nFeb\n806.0\n12309.3\n527.8\n90078.0\n754.9\nMar\n1112.8\n15178.8\n751.0\n105272.0\n1003.7\nApr\n951.7\n15185.0\n605.5\n97253.3\n1040.1\nMay\n1029.8\n16511.3\n664.4\n103708.7\n994.8\nJun\n1076.9\n14797.9\n581.9\n99349.6\n982.1\nJul\n1028.2\n15217.6\n551.0\n102587.6\n980.8\nAug\n1045.0\n14624.5\n475.4\n105269.7\n955.8\nSep\n1193.1\n15397.6\n492.2\n104141.9\n2092.6\nOct\n1114.2\n18207.4\n434.5\n107294.6\n2342.6\nNov\n1144.9\n17435.9\n477.0\n98386.5\n2322.9\nDec\n1220.3\n20029.6\n519.5\n106428.6\n2580.6\n2022\nJan\n957.9\n15480.2\n439.9\n83661.8\n1902.9\nFeb\n981.0\n15190.4\n433.7\n78916.1\n1895.3\nMar\n1242.3\n16967.6\n519.1\n87501.1\n2128.6\nApr\n1073.0\n15906.2\n458.0\n82673.4\n1937.6\nMay\n1213.5\n16069.9\n477.8\n78385.2\n2001.2\nJune\n1190.3\n15304.7\n474.2\n75631.7\n1705.1\nJuly\n1115.8\n16063.8\n517.0\n88030.6\n1866.7\nAug\n1028.0\n13686.8\n489.1\n76957.8\n1623.7\nSep\n1084.6\n13084.7\n455.5\n71362.1\n2225.2\nOct\n969.3\n12986.8\n510.9\n67641.7\n1825.4\nNov\n1001.4\n12324.1\n499.9\n59151.5\n2430.2\nDec\n1013.6\n14316.9\n616.7\n60584.5\n2469.8\n2023\nJan\n918.9\n11734.0\n444.0\n48617.1\n1693.0\nFeb\n886.7\n10301.5\n479.9\n43326.5\n1895.8\nMar\n1092.6\n13217.0\n594.0\n50037.4\n1927.1\nApr\n907.6\n14375.1\n526.7\n47171.7\n1982.9\nMay\n1119.2\n12808.7\n576.7\n49143.2\n2233.6\nJun\n1050.2\n10190.6\n606.0\n45488.8\n1213.0\nJul\n942.7\n8226.8\n1777.1\n42648.8\n993.7\nAug\n888.0\n8434.6\n653.6\n42648.8\n977.5\nSep\n964.1\n9659.0\n703.6\n45148.7\n1061.4\nOct\n949.1\n9449.3\n619.0\n50640.6\n904.4\nNov\n924.5\n9525.7\n623.3\n52332.4\n1048.5\nDec\n924.5\n11846.0\n776.5\n56451.0\n1026.2\n2024\nJan\n914.9\n10017.9\n708.1\n52445.0\n882.8\nFeb\n889.7\n7868.7\n737.5\n51545.9\n904.2\nMar\n941.1\n7569.3\n728.4\n58151.4\n921.4\n*Apr\n791.8\n5729.5\n744.8\n30450.4\n938.0\n*May\n1046.6\n7950.1\n899.4\n42290.8\n1690.3\n*Jun\n927.3\n7224.2\n849.6\n41224.2\n1155.8\n*Jul\n1059.1\n8228.2\n920.9\n44159.4\n1318.9\n*Aug\n974.4\n8669.3\n966.0\n47536.9\n1233.1\n*Sep\n1009.7\n8369.3\n860.5\n49927.2\n1408.9\n*Oct\n1015.7\n8101.5\n866.9\n52795.2\n1447.5\n*Nov\n868.4\n7253.1\n864.4\n50820.5\n1359.2\n*Dec\n931.6\n8017.7\n1071.6\n50767.8\n1541.3\n2025\n*Jan\n839.5\n7381.3\n911.1\n46337.9\n1363.6\n*Feb\n815.5\n6229.8\n838.1\n44460.8\n1346.3\n*Mar\n917.4\n6777.0\n953.3\n53987.0\n1250.1\n*Apr\n872.0\n6052.9\n888.6\n54493.5\n1222.6\n*May\n959.3\n7667.0\n1027.7\n59206.5\n1531.9\n*Jun\n922.0\n7179.3\n1119.4\n56595.1\n1165.4\n*Jul\n983.4\n8005.7\n1110.5\n58630.8\n1172.7\n*Aug\n818.4\n6941.9\n1038.6\n61492.9\n1127.4\n*Sep\n987.3\n6560.0\n1057.7\n62386.1\n1200.5\n*Oct\n997.6\n7197.8\n1133.6\n67263.2\n1231.1\n*Nov\n827.6\n6598.3\n1093.5\n66386.8\n1311.2\n*Dec\n1025.3\n7520.5\n1300.3\n72925.5\n1457.4\n2026\n*Jan\n813.0\n6271.1\n1102.8\n67209.7\n449.8\nSource: Reserve Bank of Zimbabwe, 2026\n*Statistics are denominated in ZiG\nTABLE 12.2 : ZETSS AND RETAIL PAYMENTS \n Volumes of Transactions (000's)\n \n \n31 \n \n \n \nEND OF\nEXPORTS\nIMPORTS\nTOTAL TRADE\nTRADE BALANCE\n2022\nJan\n543.9\n633.2\n-88.1\n-89.3\nFeb\n438.0\n630.1\n1068.1\n-192.2\nMar\n557.6\n713.8\n1271.4\n-156.2\nApr\n587.3\n637.2\n1224.5\n-49.9\nMay\n513.1\n714.4\n1227.6\n-201.3\nJun\n541.0\n751.4\n1292.3\n-210.4\nJul\n548.4\n728.2\n1276.6\n-179.9\nAug\n493.6\n759.9\n1253.4\n-266.3\nSep\n552.3\n765.3\n1317.6\n-213.1\nOct\n502.3\n770.5\n1272.8\n-268.2\nNov\n674.6\n802.2\n1476.8\n-127.5\nDec\n633.5\n772.6\n1406.1\n-139.1\n2023\nJan\n427.8\n633.8\n1061.6\n-206.0\nFeb\n435.9\n623.5\n1059.3\n-187.6\nMar\n515.3\n746.4\n1261.7\n-231.1\nApr\n555.5\n708.6\n1264.1\n-153.0\nMay\n654.2\n850.3\n1504.6\n-196.1\nJun\n641.5\n727.4\n1368.9\n-85.9\nJul\n603.2\n782.9\n1386.2\n-179.7\nAug\n649.8\n820.2\n1470.1\n-170.4\nSep\n678.1\n772.7\n1450.8\n-94.6\nOct\n831.9\n901.5\n1733.4\n-69.6\nNov\n681.4\n827.3\n1508.7\n-145.9\nDec\n550.6\n819.4\n1370.0\n-268.7\n2024\nJan\n539.9\n694.2\n1234.1\n-154.3\nFeb\n644.0\n729.8\n1369.4\n-81.4\nMar\n534.7\n721.2\n1255.9\n-186.5\nApr\n513.5\n710.5\n1223.9\n-197.0\nMay\n583.0\n741.0\n1324.0\n-157.9\nJun\n524.0\n746.7\n1270.7\n-222.7\nJul\n548.3\n823.1\n1371.4\n-274.8\nAug\n674.0\n872.8\n1546.8\n-198.7\nSep\n575.0\n782.6\n1357.5\n-207.6\nOct\n698.1\n835.8\n1533.9\n-137.7\nNov\n905.2\n952.1\n1857.4\n-46.9\nDec\n692.4\n889.3\n1581.7\n-196.9\n2025\n*Jan\n652.6\n728.8\n1381.5\n-76.2\n*Feb\n513.7\n713.4\n1227.1\n-199.7\n*Mar\n583.6\n793.5\n1377.1\n-209.9\n*Apr\n663.9\n760.4\n1424.3\n-96.5\n*May\n728.9\n847.6\n1576.5\n-118.7\n*Jun\n725.5\n848.7\n1574.2\n-123.3\n*Jul\n877.8\n853.4\n1731.2\n24.5\n*Aug\n879.2\n837.7\n1716.9\n41.5\n*Sep\n851.9\n857.8\n1709.7\n-5.9\n*Oct\n1041.7\n1013.0\n2054.8\n28.7\n*Nov\n1046.3\n955.8\n2002.1\n90.5\n*Dec\n1141.7\n901.5\n2043.2\n240.2\n2026\n*Jan\n969.4\n855.7\n1825.1\n113.7\nSource: ZIMSTAT, 2026\nTABLE 13 : MERCHANDISE TRADE STATISTICS\n (US$ millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monthly_Economic_Reviews/Monthly_Economic_Review_January_2026.pdf"}
{"doc_id": "c21e379ddc7e703dd0f282abfafdb30d", "text": "Vol. 26 No. 37 \n \n \nWeek Ending \n13th September 2024 \nWeekly Economic \nHighlights \nTable of Contents \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nPRICES .................................................................................... 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n 1 \n1. OVERVIEW \n \n \n \nThis report provides an overview of weekly monetary and financial developments from domestic and \ninternational markets including money markets, capital markets, payment systems, commodity prices and \nexchange rates for the week ending 13th September 2024. \nDuring the week under analysis, minimum local currency deposit rates for savings deposits, deposits of 12-\nmonths and over 1 year tenor remained unchanged, while minimum deposit rates for deposits of 1-month, 3-\nmonths and 6-months tenor increased. Maximum local currency deposits rates for deposits of 1-month tenor \ndecreased, while deposits rates for deposits of 3-months, 6-months, 12-months and over 1 year tenor increased \nduring the same week. Minimum and maximum foreign currency deposit rates for deposits of all tenors \nremained unchanged at the previous week level. \nMinimum and maximum local currency lending rates for individual and corporate clients increased save for \nminimum corporate lending rates which registered a decline during the period under analysis. Minimum \nforeign currency lending rates for both individual and corporate clients increased, while maximum lending \nrates for individuals and corporates clients registered a decline. \nOn the capital markets, the Zimbabwe Stock Exchange (ZSE) exhibited bullish sentiments. Resultantly, the \nZSE All Share Index added 28.13% to close at 256.96 points, during the week ending 13th September 2024. \nThe Victoria Falls Stock Exchange (VFEX) exhibited bearish sentiments during the same week. As such, the \nVFEX All share index lost 0.99% to close at 105.95 points. \nThe aggregate transactions processed through the National Payment Systems platforms increased by 13.33% \nto close at ZiG18.53 billion, during the week under review. This was, largely, due to an increase in the value \nof transactions registered through the RTGS payment system by 29.26% to close at ZiG15.00 billion. \nDuring the week ending 13th September 2024, the Zimbabwe Gold (ZiG) depreciated by 0.5%, from an \naverage of ZiG13.88 per US dollar in the previous week to ZiG13.94 per US dollar. \nInternational commodity prices for gold, platinum and palladium firmed, while nickel, crude oil and lithium \nprices were lower. Gold prices increased amid the release of US inflation and unemployment data which \nincreased expectations of interest rate cuts. Platinum prices also increased attributed to rising treasury yields \nand increasing demand for precious metals. On the other hand, lithium prices continued on a negative \ntrajectory driven by persistent oversupply concerns. The decline in nickel and brent crude oil prices was on \nthe back of weak demand from China. \n \n \n 2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG)) \nZiG Deposit rates \n23 August 2024 \n30 August 2024 \n6 September 2024 \n13 September 2024 \nSavings \n \n \n \n \nMinimum \n3.75 \n3.75 \n3.75 \n3.75 \nMaximum \n3.88 \n3.88 \n3.88 \n3.88 \n1-month deposit \n \n \n \n \nMinimum \n5.21 \n5.21 \n5.19 \n5.21 \nMaximum \n5.96 \n5.69 \n5.84 \n5.69 \n3-months deposit \n \n \n \n \nMinimum \n5.27 \n5.27 \n5.26 \n5.27 \nMaximum \n5.89 \n5.89 \n5.83 \n5.94 \n6-months deposit \n \n \n \n \nMinimum \n5.34 \n5.34 \n5.33 \n5.34 \nMaximum \n6.07 \n6.14 \n5.94 \n6.14 \n12-months deposit \n \n \n \n \nMinimum \n5.36 \n5.36 \n5.36 \n5.36 \nMaximum \n6.16 \n6.16 \n6.03 \n6.16 \nOver 1 year \n \n \n \n \nMinimum \n5.37 \n5.37 \n5.37 \n5.37 \nMaximum \n6.23 \n6.23 \n6.10 \n6.23 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) \nUS$ Deposit rates \n 23 August 2024 \n30 August 2024 \n6 September 2024 \n13 September 2024 \nSavings \n \n \n \n \nMinimum \n1.53 \n1.53 \n1.53 \n1.53 \nMaximum \n1.86 \n1.86 \n1.86 \n1.86 \n1-month deposit \n \n \n \n \nMinimum \n3.28 \n3.28 \n3.28 \n3.28 \nMaximum \n5.31 \n5.31 \n5.31 \n5.31 \n3-month deposit \n \n \n \n \nMinimum \n4.02 \n4.02 \n4.02 \n4.02 \nMaximum \n6.22 \n6.22 \n5.87 \n5.87 \n6-month deposit \n \n \n \n \nMinimum \n4.21 \n4.21 \n4.21 \n4.21 \nMaximum \n7.10 \n7.10 \n6.70 \n6.70 \n12-Month deposit \n \n \n \n \nMinimum \n4.38 \n4.38 \n4.38 \n4.38 \nMaximum \n7.40 \n7.40 \n7.00 \n7.00 \nOver 1 year \n \n \n \n \nMinimum \n4.56 \n4.56 \n4.56 \n4.56 \nMaximum \n7.37 \n7.37 \n6.97 \n6.97 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n \n \n \n \n \n 3 \n \nCommercial bank weighted lending rates (Local Currency (ZiG) \nZiG Lending rates \n23 August 2024 \n30 August 2024 \n6 September 2024 \n13 September 2024 \nIndividuals \n \n \n \n \nMinimum \n24.54 \n24.42 \n24.26 \n24.29 \nMaximum \n30.59 \n30.51 \n30.41 \n30.46 \nCorporates \n \n \n \n \nMinimum \n24.29 \n24.15 \n24.04 \n23.92 \nMaximum \n32.28 \n32.43 \n32.73 \n32.79 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) \nUS$ Lending rates \n23 August 2024 \n30 August 2024 \n6 September 2024 \n13 September 2024 \nIndividuals \n \n \n \n \nMinimum \n 10.89 \n10.82 \n10.83 \n10.86 \nMaximum \n 14.97 \n14.97 \n14.97 \n14.95 \nCorporates \n \n \n \n \nMinimum \n 9.63 \n9.56 \n9.48 \n9.61 \nMaximum \n 15.54 \n15.16 \n15.05 \n15.04 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n \nCommercial banks and building societies mortgage lending rates \nMortgage Lending rates \n23 August 2024 \n30 August 2024 \n6 September 2024 \n13 September 2024 \nZiG Lending rates \n \n \n \n \nMinimum \n 20.00 \n20.00 \n20.00 \n20.00 \nMaximum \n 30.00 \n30.00 \n30.00 \n30.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n 10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n 18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n \n3. EQUITY MARKETS \n \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \n \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket \nCap (ZiG \nbillion) \nMarket \nTurnover \n(ZiG \nmillion) \nVolume of \nShares \n(million) \n16-Aug-24 \n204.86 \n209.92 \n208.74 \n181.91 \n100.12 \n253.42 \n62.62 \n10.81 \n3.32 \n23-Aug-14 \n204.09 \n211.87 \n209.92 \n177.59 \n100.11 \n253.42 \n62.63 \n31.65 \n26.75 \n06-Sep-24 \n200.54 \n209.29 \n206.43 \n166.99 \n100.11 \n253.42 \n61.73 \n23.39 \n22.91 \n13-Sep-24 \n256.96 \n284.39 \n277.00 \n177.09 \n100.11 \n251.68 \n80.31 \n172.94 \n214.91 \nWeekly \nChange (%) \n28.13% \n35.88% \n34.19% \n6.05% \n0.00% \n-0.69% \n30.10% \n639.38% \n838.06% \nSource: Zimbabwe Stock Exchange, 2024 \n \n \n \n \n \n \n \n 4 \nVFEX Indicators \nDate \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover \n(US$ million) \nVolume of Shares \n(million) \n16-Aug-24 \n105.35 \n1.27 \n0.70 \n3.06 \n23-Aug-24 \n103.75 \n1.25 \n0.29 \n0.76 \n06-Sep-24 \n107.01 \n1.29 \n1.15 \n7.78 \n13-Sep-24 \n105.95 \n1.28 \n0.88 \n3.02 \nWeekly Change (%) \n-0.99% \n-0.78% \n-23.48% \n-61.18% \nSource: Victoria Falls Stock Exchange, 2024 \n \n \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2024 \n \n0.00\n10.00\n20.00\n30.00\n40.00\n50.00\n60.00\n70.00\n80.00\n90.00\n100.00\n110.00\n120.00\n21-Jun-24\n05-Jul-24\n19-Jul-24\n02-Aug-24\n16-Aug-24\n30-Aug-24\n13-Sep-24\nZiG Millions\nZSE Market Turnover\n100\n120\n140\n160\n180\n200\n220\n240\n260\n280\n300\n28-Jun-24\n05-Jul-24\n12-Jul-24\n19-Jul-24\n26-Jul-24\n02-Aug-24\n09-Aug-24\n16-Aug-24\n23-Aug-24\n30-Aug-24\n06-Sep-24\n13-Sep-24\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\nLump-sum \ndeals \nin \ncompanies \nlike \nEcocash \nHoldings, NMBZ Holdings \nLimited, Econet Wireless \nZimbabwe Limited. \n20\n30\n40\n50\n60\n70\n80\n90\n28-Jun-24\n05-Jul-24\n12-Jul-24\n19-Jul-24\n26-Jul-24\n02-Aug-24\n09-Aug-24\n16-Aug-24\n23-Aug-24\n30-Aug-24\n06-Sep-24\n13-Sep-24\nZiG Billion\nZSE Market Capitalisation \n95\n100\n105\n110\n115\n28-Jun-24\n05-Jul-24\n12-Jul-24\n19-Jul-24\n26-Jul-24\n02-Aug-24\n09-Aug-24\n16-Aug-24\n23-Aug-24\n30-Aug-24\n06-Sep-24\n13-Sep-24\nIndices\nVFEX All Share Index \n0\n200\n400\n600\n800\n1000\n24-May-24\n31-May-24\n07-Jun-24\n14-Jun-24\n21-Jun-24\n28-Jun-24\n05-Jul-24\n12-Jul-24\n19-Jul-24\n26-Jul-24\n02-Aug-24\n09-Aug-24\n16-Aug-24\n23-Aug-24\n30-Aug-24\n06-Sep-24\nUS$ Thousand\nVFEX Market Turnover \n1.1\n1.15\n1.2\n1.25\n1.3\n1.35\n1.4\n10-May-24\n17-May-24\n24-May-24\n31-May-24\n07-Jun-24\n14-Jun-24\n21-Jun-24\n28-Jun-24\n05-Jul-24\n12-Jul-24\n19-Jul-24\n26-Jul-24\n02-Aug-24\n09-Aug-24\n16-Aug-24\n23-Aug-24\n30-Aug-24\n06-Sep-24\n13-Sep-24\nUS$ Billion\nVFEX Market Capitalisation \n \n 5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2024 \n \n \n5. PRICES \n \nEnergy Prices \n \n 23 August 2024 \n 30 August 2024 \n6 September 2024 \n13 September 2024 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.63 \n1.63 \n1.63 \n1.60 \nPetrol Blend E20/ litre \n1.60 \n1.60 \n1.60 \n1.63 \nLP Gas / kg \n1.78 \n1.78 \n1.78 \n1.78 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n77.40 \n78.80 \n73.67 \n71.30 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2024 \n \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \n \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n9-September-24 \n2,506.15 \n1.07 \n1.18 \n0.0765 \n0.0846 \n10-September-24 \n2,499.70 \n1.06 \n1.18 \n0.0763 \n0.0844 \n11-September-24 \n2,506.30 \n1.07 \n1.18 \n0.766 \n0.0846 \n12-September-24 \n2,507.75 \n1.07 \n1.18 \n0.766 \n0.846 \n13-September-24 \n2,545.95 \n1.08 \n1.20 \n0.778 \n0.0859 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2024 \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n6 September 2024 \nWEEK ENDING \n13 September 2024 \nWEEKLY \nCHANGE (%) \n \nVALUES IN ZiG \n \nRTGS \n11,601,637,685.90 \n14,996,674,816.44 \n29.26% \nOf which ZiG \n5,471,760,211.06 \n6,564,598,782.65 \n \nOf which US$ \n441,877,116.00 \n604,656,666.39 \n \nPOS \n1,507,343,157.88 \n948,653,939.37 \n-37.06% \nATM \n1,233,554,895.46 \n877,165,540.52 \n-28.89% \nMOBILE BANKING \n101,774,325.94 \n92,882,597.48 \n-8.74% \nMOBILE MONEY \n1,757,794,784.43 \n1,486,106,141.16 \n-15.46% \nZIPIT MOBILE \n148,076,837.20 \n128,650,120.86 \n-13.12% \nTOTAL \n16,350,181,686.81 \n18,530,133,155.83 \n13.33% \n \nVOLUMES \n \nRTGS \n224,403 \n189,618 \n-15.50% \nOf which ZiG \n110,369 \n98,030 \n \nOf which US$ \n114,034 \n91,588 \n \nPOS \n2,992,497 \n2,441,053 \n-18.43% \nATM \n297,875 \n208,647 \n-29.95% \nMOBILE BANKING \n404,352 \n296,793 \n-26.60% \nMOBILE MONEY \n10,426,759 \n9,900,289 \n-5.05% \nZIPIT MOBILE \n327,570 \n247,206 \n-24.53% \nTOTAL \n14,673,456 \n13,283,606 \n-9.47% \n \n 6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n3 September 2024 \n4 September 2024 \n5 September 2024 \n6 September 2024 \n13 September 2024 \n1.00Oz \n \n \n \n \n \nUS$ \n2,623.53 \n2,603.79 \n2,612.35 \n2,635.03 \n2,673.25 \nZiG \n36,377.60 \n36,133.79 \n36,244.23 \n36,603.17 \n37,297.42 \n0.50Oz \n \n \n \n \n \nUS$ \n1,311.77 \n1,301.90 \n1,306.17 \n1,317.51 \n1,336.62 \nZiG \n18,188.80 \n18,056.89 \n18,122.12 \n18,301.58 \n18,648.71 \n0.25Oz \n \n \n \n \n \nUS$ \n655.88 \n650.95 \n653.09 \n658.76 \n668.31 \nZiG \n9,094.40 \n9,028.45 \n9,061.06 \n9,150.79 \n9,324.35 \n0.10Oz \n \n \n \n \n \nUS$ \n262.35 \n260.38 \n261.23 \n263.50 \n267.32 \nZiG \n3,637.76 \n3,611.38 \n3,624.42 \n3,660.32 \n3,729.74 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(2 – 6 September) \n13.8782 \n0.7762 \n18.2271 \n1.0421 \n15.3597 \n9-September \n13.9236 \n0.7795 \n18.2631 \n1.0499 \n15.4155 \n10-September \n13.9477 \n0.7805 \n18.2388 \n1.0469 \n15.3983 \n11-September \n13.9489 \n0.7786 \n18.2864 \n1.0469 \n15.4150 \n12-September \n13.9492 \n0.7794 \n18.2058 \n1.0434 \n15.3685 \n13-September \n13.9521 \n0.7863 \n18.3400 \n1.0492 \n15.4638 \nWeekly Average \n(9 – 13 September) \n13.9443 \n0.7809 \n18.2668 \n1.0473 \n15.4122 \nAppr (-)/Depr (+) (%) \n0.5 \n0.6 \n0.2 \n0.5 \n0.3 \nSource: Reserve Bank of Zimbabwe, 2024 \n \nInternational Commodity Price Developments \n \nPlatinum \nPalladium \nNickel \nLithium \nCrude oil \n2024 \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nUS$/tonne \nWeekly Average \n(2 - 6 September) \n922.70 \n952.40 \n16,227.60 \n10,508.00 \n73.67 \n9-September \n940.50 \n934.00 \n15,903.00 \n10,220.00 \n71.77 \n10-September \n945.50 \n960.50 \n15,741.00 \n10,130.00 \n69.57 \n11-September \n941.50 \n980.50 \n16,112.00 \n10,100.00 \n71.01 \n12-September \n961.00 \n1,019.00 \n16,136.00 \n10,056.00 \n72.45 \n13-September \n999.50 \n1,065.75 \n15,944.00 \n10,012.00 \n71.70 \nWeekly Average \n(9 - 13 September) \n957.60 \n991.95 \n15,967.20 \n10,103.60 \n71.30 \nSource: BBC, KITCO and Bloomberg, 2024 \n \n \n \n \n \n \n \n \n \n \n 7 \n Figure 3: Weekly Precious Metals Price Developments (9th September 2024 – 13th September 2024) \n \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2024 \n \n \n \n \n15,500\n15,600\n15,700\n15,800\n15,900\n16,000\n16,100\n16,200\n9-Sep\n10-Sep\n11-Sep\n12-Sep\n13-Sep\nUS$/tonne\nNickel\n9,900\n10,000\n10,100\n10,200\n10,300\n9-Sep\n10-Sep\n11-Sep\n12-Sep\n13-Sep\nUS$/tonne\nLithium \n900\n910\n920\n930\n940\n950\n960\n970\n980\n990\n1,000\n1,010\n9-Sep\n10-Sep\n11-Sep\n12-Sep\n13-Sep\nUS$/tonne\nPlatinum\n910\n930\n950\n970\n990\n1,010\n1,030\n1,050\n1,070\n1,090\n9-Sep\n10-Sep\n11-Sep\n12-Sep\n13-Sep\nUS$/tonne\nPalladium\n65\n67\n69\n71\n73\n75\n77\n79\n9-Sep\n10-Sep\n11-Sep\n12-Sep\n13-Sep\nUS$/barrel\nCrude oil \n2,360\n2,410\n2,460\n2,510\n2,560\n2,610\n9-Sep\n10-Sep\n11-Sep\n12-Sep\n13-Sep\nUS$/oz\nGold", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_13_SEPTEMBER_2024_Volume_26_Number_37.pdf"}
{"doc_id": "42d3a4e856bba06057d438e0ef708bbc", "text": "[Date] \n \n \n \n \nSEPTEMBER 2015 \n \n \ni \n \nMONTHLY ECONOMIC REVIEW \nTABLE OF CONTENTS \nSELECTED ECONOMIC INDICATORS ________________________________________ 1 \nSTOCK MARKET DEVELOPMENTS __________________________________________ 2 \nMONETARY DEVELOPMENTS ______________________________________________ 3 \nINFLATION OUTTURN ______________________________________________________ 4 \nAnnual Inflation __________________________________________________________________ 4 \nMonthly Inflation _________________________________________________________________ 5 \nNATIONAL PAYMENTS SYSTEM ____________________________________________ 5 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ______________________________ 5 \nCard Based Transactions ___________________________________________________________ 5 \nMobile and Internet Based Transactions ______________________________________________ 5 \nCheque Transactions ______________________________________________________________ 5 \n \n \n \n \n \n \n1 \n \nMONTHLY ECONOMIC REVIEW \n \n \n \n2015 \nAugust \n2015 \nSeptember \nMonth-on- \nMonth \nChange \nZ.S.E. Mining Index1 \n35.3 \n24.4 \n-31.1% \nZ.S.E. Industrial Index1 \n135.5 \n131.9 \n-2.6% \nMoney Supply (US$)2 \n4 473.0 million \n4 586.0 million \n2.5% \nMoney Supply (M3) Annual Growth2 \n3.5% \n4.5% \n \nYearly Inflation3 \n-2.8% \n-3.1% \n \nMonthly Inflation3 \n \n-0.31% \n \n-0.36% \n \nNominal Lending Rate \n5.0-25.0% \n5.0-25.0% \n \nSources: \n1 Zimbabwe Stock Exchange (ZSE) \n2 Reserve Bank of Zimbabwe (RBZ) \n3 Zimbabwe National Statistics Agency (ZIMSTAT) \nSELECTED ECONOMIC INDICATORS \n \n \nMONTHLY ECONOMIC REVIEW \n2 \n \nSTOCK MARKET DEVELOPMENTS \nGlobal stock markets recorded significant losses \nduring the month of September 2015, largely driven \nby weak global growth. The sustained decline in \ncommodity prices, coupled with currency devaluation \nby China and fears of a possible interest rate hike by \nthe US were some of the underlying factors that \nimpacted negatively on the performance of global \nstocks during the month under review. \nMain African stock markets, however, recorded \nincreases over the same period. Gains were recorded \nin Nigeria (5.2%), Kenya (2.9%) and South Africa \n(0.2%). \nThe Zimbabwe Stock Exchange (ZSE) recorded \nlosses during the month of September 2015, with the \nindustrial index declining by 2.6%, from 135.4 points \nin August 2015 to 131.9 points in September 2015. A \n11.0 points decline to 24.4 points in September 2015 \nwas recorded for the mining index. \n \n \nTrading volumes and values, however, increased \nduring the month under review. The volume of traded \nshares increased from 76.2 million in August 2015 to \n105.7 million in September 2015. Similarly, the value \nof shares traded rose from US$15.3 million in \nAugust 2015 to US$18.2 million in September 2015. \n \n \nSource: Zimbabwe Stock Exchange, 2015 \n0\n50\n100\n150\n200\n250\n30-Dec-12\n30-Mar-13\n30-Jun-13\n30-Sep-13\n31-Dec-13\n31-Mar-14\n30-Jun-14\n30-Sep-14\n31-Dec-14\n31-Mar-15\n30-Jun-15\n30-Sep-15\nFigure 1: ZSE Indices\nIndustrial\nMining\n0.00\n0.50\n1.00\n1.50\n2.00\n2.50\n3.00\n3.50\n4.00\n4.50\n0.00\n20.00\n40.00\n60.00\n80.00\n100.00\n120.00\n140.00\n01-May-15\n11-May-15\n21-May-15\n31-May-15\n10-Jun-15\n20-Jun-15\n30-Jun-15\n10-Jul-15\n20-Jul-15\n30-Jul-15\n09-Aug-15\n19-Aug-15\n29-Aug-15\n08-Sep-15\n18-Sep-15\n28-Sep-15\nVALUES TRADED (US$ MILLIONS)\nVOLUMES TRADED (MILLIONS)\nFigure 2: ZSE: Daily Volumes and \nFigure 2: ZSE: Daily Volumes and Values Traded\nValues Traded\nVolume\nTurnover\nSource: Zimbabwe Stock Exchange, 2015 \n \n \nMONTHLY ECONOMIC REVIEW \n3 \n \nIn line with the downward trend in industrial and \nmining indices, ZSE market capitalisation declined \nfrom US$3.6 billion in August 2015 to US$3.4 billion \nin September 2015. \nMONETARY DEVELOPMENTS \n \nThe annual broad money1 supply growth rate rose \nfrom 3.5% in August 2015 to 4.5% in September \n2015. On a monthly basis, broad money supply \nincreased from US$4 473.0 million in August 2015 to \nUS$4 586.0 million in September 2015. \n \nSource: Reserve Bank of Zimbabwe, 2015 \nAnnual growth in broad money was driven by \nincreases across all deposit classes, with the \n \n1 Broad money is made up of the consolidated deposits of the entire banking sector which amounted \nto US$4.47 billion in July 2015. The process of consolidation entails netting off of all interbank \ntransactions, including intra-sectoral deposits. Broad money computation, also nets out \ngovernment and non-resident deposits. \nexception of short term deposits. Long term deposits \nregistered the largest annual growth of 11.4%, \nfollowed by demand deposits, 4.8%; and savings \ndeposits, 4.5%. Short term deposits, however, \nregistered a decline of -3.7%. \n \n \nAnnual growth in total banking sector credit to the \ndomestic economy increased to 19.0% in September \n2015, from 18.8% in August 2015. On a monthly \nbasis, \nbanking \nsector \ncredit \nrose \nfrom \nUS$5 029.1 million in August 2015, to US$5 079.8 \nmillion in September 2015. \nOn an annual basis, growth in credit to the private \nsector which makes up the largest proportion of \nbanking sector credit increased by 2.4% in September \n2015, up from 1.4% in August 2015. Month-on-\nmonth, credit to the private sector also increased from \n \n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n -\n 0.5\n 1.0\n 1.5\n 2.0\n 2.5\n 3.0\n 3.5\n 4.0\n 4.5\n 5.0\nFeb\nApr\nJun\nAug\nOct\nDec\nFeb\nApr\nJun\nAug\nOct\nDec\nFeb\nApr\nJun\nAug\n%\nUS$ BILLIONS\nFigure 3: Money Supply\nFigure 3: Money Supply\nM3\nM3 Annual Growth (RHS)\nShort \nTerm\n17%\nLong Term \n21%\nDemand\n49%\nSavings\n13%Figure 4: Banking Sector Deposits\nFigure 4: Banking Sector DepositsSeptember 20\nSeptember 2015\nSource: Reserve Bank of Zimbabwe, 2015 \n \n \nMONTHLY ECONOMIC REVIEW \n4 \n \nUS$3 \n780.6 \nmillion \nin \nAugust \n2015, \nto \nUS$3 844.0 million in September 2015. \nIn terms of distribution, loans and advances \naccounted for 83.1% of the total credit to the private \nsector, mortgages advanced by building societies, \n12.5%; \nother \ninvestments, \n3.8%; \nbankers’ \nacceptances, 0.3%; and bills discounted, 0.2% in \nSeptember 2015. \n \nSource: Reserve Bank of Zimbabwe, 2015 \nOn a sectoral basis, credit was distributed as follows: \nagriculture (20.4%); distribution (15.1%); services \nincluding tourism (16%); manufacturing (14.4%); \nmining (5.9%); transport and communications \n(3.5%); and construction (1%). Credit to households \nconstituted 19.7% of total credit to the private sector \nduring the month under review. \nCredit to the private sector was mainly channelled \ntowards asset purchases, 43.6%; inventory build-up, \n33.5%; consumer durables, 13.4%; and vehicle \npurchases, 3.3%. Capital development accounted for \n4.6% of total loans and advances, broken down as \nfollows: \nplant \nand \nequipment, \n3.1%; \nland \ndevelopment and office equipment, 0.9% and 0.6%, \nrespectively. \nINFLATION OUTTURN \n \nAnnual Inflation \n \nThe annual headline inflation rate decelerated further \nto -3.11% in September 2015, from -2.77% recorded \nin August 2015, driven by declines in prices of both \nfood and non- food items. Annual inflation has \nremained in negative territory since November 2014, \ndue to the continued downward correction in the \ngeneral price level. \n \nSource: ZIMSTAT, 2015 \nLoans & Advances\n83.12%\nBills \nDiscounted\n0.23%\nBankers \nacceptances\n0.30%\nOther \ninvestments\n3.84%\nMortgages\n12.50%Figure 5: Credit to Private Sector\nFigure 5: Credit to Private SectorSeptember 2015\nSeptember 2015\n-4\n-3\n-2\n-1\n0\n1\n2\nAug-13\nSep-13\nOct-13\nNov-13\nDec-13\nJan-14\nFeb-14\nMar-14\nApr-14\nMay-14\nJun-14\nJul-14\nAug-14\nSep-14\nOct-14\nNov-14\nDec-14\nJan-15\nFeb-15\nMar-15\nApr-15\nMay-15\nJun-15\nJul-15\nAug-15\nSep-15\nFigure 6: Annual Inflation \n(%)\nHeadline Inflation\nFood\nNon Food\n \n \nMONTHLY ECONOMIC REVIEW \n5 \n \nThe year-on-year food inflation stood at -3.72% in \nSeptember 2015, shedding 0.13 percentage points \nfrom the -3.59% recorded in August 2015. All food \nsubcategories recorded declines in September 2015. \nThe largest declines were recorded for fruits, 5.7%; \nbread and cereals, 4.9%; meat, 3.8% and vegetables, \n3.4%. \n \nAnnual non-food inflation decelerated from -2.4% in \nAugust 2015 to -2.8% in September 2015. The fall in \nnon-food inflation was largely driven by declines in \nthe housing, water, electricity, gas and other fuels; \ncommunication; furniture, household equipment and \nmaintenance and transport sub-categories. \n \nMonthly Inflation \n \nThe month-on-month inflation rate for September \n2015 stood at -0.36%, down from -0.31% recorded in \nAugust 2015. The decline in monthly inflation was \nattributable to the fall in the prices of non-food items. \nThe slight increase in food inflation, however, partly \noffset the decline. \nMonthly non-food inflation decelerated from -0.10% \nin August 2015 to -0.31% in September 2015. This \nfollowed declines in housing, water, electricity, gas \nand other fuels; communication; furniture, household \nequipment and maintenance; and transport. \nMonthly food inflation, however, rose from -0.75% \nin August 2015 to -0.47% in September 2015, largely \ndriven by fruits, fish and seafood, meat; bread and \ncereals; oils and fats, and cheese and eggs sub-\ncategories, among others. \nNATIONAL PAYMENTS SYSTEM \n \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe value of transactions processed through the \nRTGS system increased from US$3.3 billion in \nAugust 2015 to US$3.8 billion in September 2015. \nIn tandem, the volume of transactions rose by 7.0% \nfrom 153 133 to 164 309 during the same period. \nSource: Reserve Bank of Zimbabwe, 2015 \nCard Based Transactions \nCard based transactions, fell from US$506.6 million \nin August 2015, to US$450.6 million in September \n2015. \n \nMobile and Internet Based Transactions \nThe total value of mobile and internet based \ntransactions increased from US$524.8 million in \nAugust 2015, to US$543.2 million in September \n2015. \n \nCheque Transactions \nThe value of cheque transactions rose from \nUS$11.4 million in August 2015 to US$12.9 million \nin September 2015. \n \nRESERVE BANK OF ZIMBABWE \nSEPTEMBER 2015\n -\n 0.5\n 1.0\n 1.5\n 2.0\n 2.5\n 3.0\n 3.5\n 4.0\n 4.5\n 5.0\nSep-12\nJan-13\nMay-13\nSep-13\nJan-14\nMay-14\nSep-14\nJan-15\nMay-15\nSep-15\n -\n 50\n 100\n 150\n 200\n 250\nVALUE IN US$ BILLIONS\nVOLUME IN THOUSANDS\nFigure 7: Z\nFigure 7: ZETSS Volumes and Values\nValues\nVolume\nValue\n \n \n6 \n \nMONTHLY ECONOMIC REVIEW \nStatistical Tables \n \n \n1. Monetary Statistics \n \n1.1 Monetary Aggregates \n \n \n \n \n \n 8 \n \n1.2 Broad Money Survey \n \n \n \n \n \n9 \n \n1.3 Analysis of Monthly Changes in Money Supply \n \n10 \n \n1.4 Analysis of Yearly Changes in Money Supply \n \n \n11 \n \n 2. Sectoral Analysis of Bank Loans and Advances and Deposits \n \n2.1 Sectoral Analysis of Commercial Banks Loans and Advances 12 \n \n2.2 Sectoral Analysis of Commercial Banks Deposits \n \n13 \n \n \n \n3. External Statistics \n \n3.1 Total External Debt Outstanding by Debtor \n \n \n14 \n \n4. Interest Rates \n \n4.1 Lending Rates \n \n \n \n \n \n \n15 \n \n4.2 Banks Deposit Rates \n \n \n \n \n \n16 \n \n5. Inflation \n \n5.1 Monthly Inflation \n \n \n \n \n \n17 \n \n5.2 Yearly Inflation \n \n \n \n \n \n \n18 \n \n6. Exchange Rates \n \n \n \n \n \n \n \n19 \n \n7. Commercial Banks \n \n7.1 Assets \n \n \n \n \n \n \n \n20 \n \n7.2 Liabilities \n \n \n \n \n \n \n21 \n \n \nMONTHLY ECONOMIC REVIEW \n7 \n \n \n8. Merchant Banks \n \n8.1 Assets \n \n \n \n \n \n \n \n22 \n \n8.2 Liabilities \n \n \n \n \n \n \n23 \n \n 9. Building Societies \n \n9.1 Assets \n \n \n \n \n \n \n \n24 \n \n9.2 Liabilities \n \n \n \n \n \n \n25 \n \n10. Zimbabwe Stock Exchange Statistics \n \n \n \n \n26 \n \n11. Savings with Financial Institutions \n \n \n \n \n27 \n \n12. Analysis of Liquid Assets of Monetary Banks \n \n \n \n28 \n \n13. ZETSS, Cheques and Cards Activity \n \n \n \n \n \n \n13.1 Values of Transactions \n \n \n \n \n29 \n \n13.2 Volumes of Transactions \n \n \n \n \n30 \n \n \n \n \n \n \n \n \n8 \n \nMONTHLY ECONOMIC REVIEW \n \n \n \n \n \n \n \n \n \n \n \n \nSeptember\nOctober\nNovember\nDecember\nJanuary\nFebruary\nMarch\nApril\nMay\nJune\nJuly\nAugust\nSeptember\nBond Coins\n0.0\n0.0\n0.0\n298.6\n567.1\n1,096.7\n1,294.0\n1,749.3\n2,316.7\n2,684.1\n2,719.3\n3,016.3\n3,425.5\nRBZ Demand Deposits\n93.7\n94.4\n94.0\n144.5\n714.7\n898.5\n545.0\n491.6\n340.2\n4,035.0\n3,889.6\n3,480.3\n3,478.9\nComm. Banks Dem. Deposits\n2,089,784.7\n2,162,566.6\n2,124,944.0\n2,121,401.6\n1,967,789.9\n1,978,595.1\n2,051,081.7\n1,990,235.2\n2,017,918.3\n2,112,470.2\n2,023,527.6\n2,168,409.0\n2,166,471.3\nMerchant Banks Dem. Deposits\n40,922.6\n39,909.5\n39,446.4\n36,942.7\n39,049.7\n38,382.5\n68,611.1\n63,935.0\n63,899.2\n62,949.9\n62,949.9\n62,949.9\n62,157.8\nM1\n2,130,801.0\n2,202,570.5\n2,164,484.4\n2,158,787.4\n2,008,121.3\n2,018,972.8\n2,121,531.8\n2,056,411.0\n2,084,474.4\n2,182,139.2\n2,093,086.3\n2,237,855.5\n2,235,533.5\nComm. Banks Savings Deposits\n272,392.1\n252,758.2\n250,745.7\n267,179.5\n282,832.4\n240,444.7\n230,198.0\n267,921.4\n275,167.8\n248,074.6\n239,113.1\n227,534.6\n230,176.6\nBuilding Soc. Savings Deposits\n230,155.7\n236,100.8\n253,699.7\n236,423.8\n233,498.2\n238,848.9\n244,746.0\n256,526.3\n280,947.9\n279,625.3\n275,914.5\n277,271.4\n230,176.6\nP O S B Savings Deposits\n68,147.5\n65,414.5\n70,142.9\n69,601.1\n70,144.8\n72,839.1\n75,993.4\n74,678.1\n71,195.6\n73,397.6\n68,785.7\n71,554.2\n77,161.5\nComm. Banks U-30 Day Deposits\n651,068.5\n686,998.0\n630,856.1\n654,559.9\n638,395.6\n574,946.1\n645,401.5\n607,334.3\n670,242.5\n707,686.1\n587,421.2\n505,981.9\n613,287.8\nMerchant Banks U-30 Day Deposits\n33,929.0\n33,679.6\n33,288.9\n31,176.0\n40,928.2\n40,362.2\n12,132.4\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\nBuilding Soc. U- 30 Day Deposits\n149,478.7\n116,270.3\n113,090.1\n144,211.5\n127,399.4\n149,834.6\n152,280.6\n189,428.7\n175,953.7\n188,805.2\n171,250.8\n156,077.5\n190,548.2\nM2\n3,535,972.5\n3,593,792.1\n3,516,307.8\n3,561,939.1\n3,401,319.9\n3,336,248.4\n3,482,283.7\n3,452,299.9\n3,557,981.9\n3,679,728.0\n3,435,571.5\n3,476,274.9\n3,635,952.6\nComm. Banks O-30 Day Deposits\n540,278.5\n492,200.3\n508,747.2\n449,703.8\n544,421.5\n597,685.2\n503,769.1\n618,804.9\n536,216.7\n509,642.0\n651,895.8\n622,991.6\n611,608.0\nMerchant Banks O-30 Day Deposits\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\nBuilding Soc. O- 30 Day Deposits\n280,499.3\n337,930.1\n359,491.3\n365,334.8\n366,978.6\n375,166.9\n355,362.1\n340,739.4\n364,490.5\n326,111.5\n351,579.9\n340,974.7\n303,177.5\nBuilding Soc. Other Share Deposits\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\nP O S B Time Deposits\n20,485.8\n22,070.6\n19,652.7\n15,174.4\n16,138.8\n17,519.8\n17,638.5\n15,733.8\n18,011.8\n17,261.6\n23,646.5\n21,540.3\n24,019.0\nM3\n4,388,502.7\n4,457,259.7\n4,415,465.6\n4,403,418.7\n4,340,125.3\n4,337,886.9\n4,370,320.0\n4,438,844.6\n4,487,967.5\n4,544,009.7\n4,473,960.3\n4,473,048.2\n4,586,023.7\n2014\n2015\nTABLE 1.1 : MONETARY AGGREGATES\n US$ Thousands\n \n \nMONTHLY ECONOMIC REVIEW \n9 \n \n \n \nSEPTEMBER\nOCTOBER\nNOVEMBER\nDECEMBER\nJANUARY\nFEBRUARY\nMARCH\nAPRIL\nMAY\nJUNE\nJULY\nAUGUST\nSEPTEMBER\nNET FOREIGN ASSETS \n-536,234.0\n-598,846.1\n-767,824.4\n-719,401.4\n-714,190.6\n-763,306.5\n-565,959.3\n-636,028.1\n-681,066.5\n-775,512.6\n-723,772.8\n-727,785.7\n-715,689.4\n Assets\n1,105,902.8\n999,042.7\n827,514.2\n896,179.7\n830,959.4\n737,833.5\n816,079.6\n755,493.4\n811,200.4\n926,353.7\n843,689.2\n867,447.1\n889,018.6\n Reserve Bank (RBZ)\n620,484.9\n508,155.9\n334,534.3\n363,181.1\n356,661.9\n280,889.9\n282,170.1\n282,900.6\n303,218.6\n453,986.1\n395,771.0\n360,705.6\n360,255.9\n Deposit Money Banks (DMBs) \n414,981.4\n432,341.0\n416,989.8\n463,112.7\n405,880.7\n400,473.5\n469,563.3\n424,368.1\n418,721.9\n390,608.3\n361,517.6\n428,702.8\n448,219.8\n Other Banking Institutions (OBIs) \\1\n70,436.5\n58,545.8\n75,990.2\n69,886.0\n68,416.9\n56,470.0\n64,346.2\n48,224.7\n89,260.0\n81,759.3\n86,400.6\n78,038.7\n80,542.9\n Liabilities \\2\n-1,642,136.8\n-1,597,888.8\n-1,595,338.6\n-1,615,581.1\n-1,545,150.0\n-1,501,140.0\n-1,382,038.9\n-1,391,521.5\n-1,492,266.9\n-1,701,866.3\n-1,567,462.0\n-1,595,232.7\n-1,604,707.9\n RBZ\n1,037,740.5\n1,035,611.2\n1,030,053.8\n1,020,936.5\n1,007,096.0\n1,009,161.8\n858,095.4\n894,207.5\n868,931.4\n1,093,306.3\n1,039,959.7\n1,056,817.9\n1,057,080.8\n DMBs\n550,158.8\n508,060.2\n510,711.1\n540,423.0\n483,463.5\n438,356.5\n473,182.2\n448,998.0\n574,792.7\n560,305.8\n478,956.0\n490,791.1\n504,085.0\n OBIs\n54,237.5\n54,217.5\n54,573.7\n54,221.6\n54,590.6\n53,621.8\n50,761.3\n48,315.9\n48,542.8\n48,254.1\n48,546.3\n47,623.8\n43,542.1\nNET DOMESTIC ASSETS \n4,924,736.6\n5,056,105.8\n5,183,290.0\n5,122,820.1\n5,054,316.0\n5,101,193.5\n4,936,279.4\n5,074,872.7\n5,169,034.0\n5,319,522.4\n5,197,733.1\n5,200,833.8\n5,301,713.1\nDOMESTIC CREDIT\n4,267,182.2\n4,331,335.1\n4,352,932.2\n4,378,653.6\n4,231,495.4\n4,249,052.3\n4,371,027.6\n4,529,777.2\n4,817,875.2\n4,869,072.4\n4,981,511.5\n5,029,107.1\n5,079,842.4\n Claims on Government (net) \n442,435.9\n470,504.6\n462,425.7\n515,636.4\n544,026.1\n549,179.2\n537,675.3\n665,258.8\n950,594.0\n1,074,237.6\n1,160,044.8\n1,192,006.7\n1,182,354.0\n RBZ\n-35,915.4\n-14,433.2\n-14,031.5\n-25,063.7\n-12,594.0\n-12,908.0\n-22,274.1\n98,377.6\n97,847.8\n91,807.5\n243,082.9\n244,517.6\n254,297.8\n DMBs\n426,769.3\n433,084.8\n443,478.0\n487,962.9\n504,696.7\n510,080.3\n500,344.5\n498,836.6\n784,428.5\n904,112.3\n845,865.3\n860,228.9\n838,982.9\n OBIs\n51,582.0\n51,852.9\n32,979.1\n52,737.2\n51,923.4\n52,007.0\n59,604.9\n68,044.6\n68,317.8\n78,317.8\n71,096.6\n87,260.2\n89,073.3\n Claims on Public Enterprises \n72,390.6\n72,375.0\n66,661.0\n66,750.2\n64,967.7\n68,944.3\n71,543.2\n102,474.3\n104,306.3\n53,148.2\n48,641.8\n56,508.0\n54,523.7\n RBZ\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n737.3\n1,087.1\n1,189.1\n1,931.5\n2,098.7\n2,423.7\n DMBs\n72,390.6\n72,375.0\n66,661.0\n66,750.2\n64,967.7\n68,944.3\n69,816.8\n100,742.9\n102,436.0\n51,254.0\n46,510.3\n53,130.2\n50,787.7\n Agri-PEs\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n Other\n72,390.6\n72,375.0\n66,661.0\n66,750.2\n64,967.7\n68,944.3\n69,816.8\n100,742.9\n102,436.0\n51,254.0\n46,510.3\n53,130.2\n50,787.7\n OBIs\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n1,726.4\n994.2\n783.2\n705.1\n200.0\n1,279.1\n1,312.2\n Claims on Private Sector\n3,752,355.7\n3,788,455.5\n3,823,845.6\n3,796,267.1\n3,622,501.6\n3,630,928.8\n3,761,809.1\n3,762,044.1\n3,762,974.9\n3,741,686.6\n3,772,824.9\n3,780,592.5\n3,842,964.7\n RBZ\n34,725.3\n34,725.3\n34,725.3\n34,725.3\n34,725.3\n34,725.3\n31,409.0\n31,558.0\n31,155.6\n51,689.8\n66,722.4\n92,768.9\n67,359.3\n DMBs\n3,021,389.7\n3,016,750.9\n3,036,795.2\n3,010,101.6\n2,835,002.6\n2,824,415.9\n2,960,892.4\n2,948,993.7\n2,960,917.8\n2,900,630.1\n2,910,157.5\n2,875,477.3\n2,956,930.6\n OBIs\n696,240.7\n736,979.3\n752,325.1\n751,440.3\n752,773.8\n771,787.7\n769,507.7\n781,492.4\n770,901.6\n789,366.8\n795,945.0\n812,346.3\n818,674.8\nOTHER ITEMS (NET) \n657,554.4\n724,770.7\n830,357.8\n744,166.4\n822,820.5\n852,141.2\n565,251.8\n545,095.4\n351,158.7\n450,450.0\n216,221.6\n171,726.7\n221,870.7\nBROAD MONEY (M3) \n4,388,502.6\n4,457,259.7\n4,415,465.6\n4,403,418.7\n4,340,125.3\n4,337,887.0\n4,370,320.1\n4,438,844.6\n4,487,967.5\n4,544,009.7\n4,473,960.3\n4,473,048.2\n4,586,023.7\n2014\nTABLE 1.2 : BROAD MONEY SURVEY\nUS$ Thousands\n2015\n \n \nMONTHLY ECONOMIC REVIEW \n10 \n \n \nJANUARY\nFEBRUARY\nMARCH\nAPRIL\nMAY\nJUNE\nJULY\nAUGUST\nSEPTEMBER\nNET FOREIGN ASSETS \n5,210.8\n-49,115.9\n197,347.2\n-70,068.7\n-45,038.4\n-94,446.1\n51,739.9\n-4,012.9\n12,096.3\n Assets\n-65,220.3\n-93,125.9\n78,246.1\n-60,586.2\n55,707.0\n115,153.3\n-82,664.5\n23,757.8\n21,571.5\n Reserve Bank (RBZ)\n-6,519.2\n-75,771.9\n1,280.1\n730.6\n20,317.9\n150,767.5\n-58,215.1\n-35,065.4\n-449.7\n Deposit Money Banks (DMBs)\n-57,232.0\n-5,407.1\n69,089.7\n-45,195.2\n-5,646.2\n-28,113.6\n-29,090.7\n67,185.1\n19,517.0\n Other Banking Institutions (OBIs) \\1\n-1,469.1\n-11,946.9\n7,876.2\n-16,121.6\n41,035.3\n-7,500.7\n4,641.3\n-8,361.9\n2,504.2\n Liabilities \\2\n70,431.1\n44,010.0\n119,101.1\n-9,482.6\n-100,745.5\n-209,599.4\n134,404.3\n-27,770.7\n-9,475.2\n RBZ\n-13,840.5\n2,065.8\n-151,066.4\n36,112.1\n-25,276.1\n224,375.0\n-53,346.7\n16,858.2\n262.9\n DMBs\n-56,959.6\n-45,107.0\n34,825.7\n-24,184.2\n125,794.7\n-14,486.9\n-81,349.8\n11,835.0\n13,293.9\n OBIs\n369.0\n-968.8\n-2,860.4\n-2,445.4\n226.9\n-288.7\n292.2\n-922.5\n-4,081.6\nNET DOMESTIC ASSETS \\3\n-68,504.1\n46,877.5\n-164,914.1\n138,593.3\n94,161.3\n150,488.4\n-121,789.3\n3,100.7\n100,879.2\nDOMESTIC CREDIT\n-147,158.2\n17,556.9\n121,975.3\n158,749.6\n288,098.0\n51,197.2\n112,439.1\n47,595.6\n50,735.3\n Claims on Government (net) \n28,389.7\n5,153.1\n-11,503.9\n127,583.5\n285,335.2\n123,643.6\n85,807.2\n31,961.9\n-9,652.6\n RBZ\n12,469.7\n-314.0\n-9,366.0\n120,651.7\n-529.8\n-6,040.3\n151,275.4\n1,434.7\n9,780.2\n DMBs\n16,733.8\n5,383.6\n-9,735.8\n-1,507.9\n285,591.8\n119,683.9\n-58,247.0\n14,363.6\n-21,245.9\n OBIs\n-813.8\n83.5\n7,597.9\n8,439.7\n273.1\n10,000.0\n-7,221.2\n16,163.6\n1,813.1\n Claims on Public Enterprises \n-1,782.4\n3,976.6\n2,598.9\n30,931.2\n1,832.0\n-51,158.1\n-4,506.4\n7,866.2\n-1,984.3\n RBZ\n0.0\n0.0\n0.0\n737.3\n349.8\n102.0\n742.4\n167.2\n325.0\n DMBs\n-1,782.4\n3,976.6\n872.5\n30,926.1\n1,693.1\n-51,182.0\n-4,743.6\n6,619.9\n-2,342.5\n Agri-PEs\n-1,517.5\n-1,518.5\n-1,519.5\n-1,520.5\n-1,521.5\n-1,522.5\n-1,523.5\n-1,524.5\n-1,525.5\n Other\n-264.9\n5,495.1\n2,392.0\n32,446.6\n3,214.7\n-49,659.5\n-3,220.1\n8,144.4\n-816.9\n OBIs\n0.0\n0.0\n1,726.4\n-732.2\n-211.0\n-78.1\n-505.2\n1,079.1\n33.1\n Claims on Private Sector\n-173,765.5\n8,427.2\n130,880.3\n234.9\n930.9\n-21,288.3\n31,138.3\n7,767.5\n62,372.2\n RBZ\n0.0\n0.0\n-3,316.3\n149.0\n-402.4\n20,534.2\n15,032.7\n26,046.5\n-25,409.6\n DMBs\n-175,099.0\n-10,586.7\n136,476.5\n-11,898.7\n11,924.1\n-60,287.7\n9,527.4\n-34,680.2\n81,453.3\n OBIs\n1,333.5\n19,013.9\n-2,280.0\n11,984.7\n-10,590.8\n18,465.2\n6,578.2\n16,401.3\n6,328.5\nOTHER ITEMS (NET) \n78,654.1\n29,320.6\n-286,889.4\n-20,156.4\n-193,936.7\n99,291.2\n-234,228.4\n-44,494.9\n50,144.0\nBROAD MONEY (M3) \n-63,293.4\n-2,238.4\n32,433.1\n68,524.5\n49,122.9\n56,042.3\n-70,049.4\n-912.2\n112,975.5\n Broad Money (M3) \n-1.4%\n-0.1%\n0.7%\n1.57%\n1.11%\n1.2%\n-1.54%\n-0.02%\n2.53%\n Domestic Credit \n-3.4%\n0.4%\n2.9%\n3.63%\n6.36%\n1.1%\n2.31%\n0.96%\n1.01%\n Claims on Private Sector\n-4.6%\n0.2%\n3.6%\n0.01%\n0.02%\n-0.6%\n0.83%\n0.21%\n1.65%\n2015\nTABLE 1.3 : ANALYSIS OF MONTHLY CHANGES IN MONEY SUPPLY (M3)\n US$ Thousands\n \n \nMONTHLY ECONOMIC REVIEW \n11 \n \n \nJANUARY\nFEBRUARY\nMARCH\nAPRIL\nMAY\nJUNE\nJULY\nAUGUST\nSEPTEMBER\nNET FOREIGN ASSETS \n132,431.5\n36,127.1\n250,879.1\n59,815.5\n-95,449.8\n-180,094.9\n-22,698.6\n-100,052.1\n-179,455.4\n Assets\n-178,961.3\n-294,685.4\n-205,308.8\n-308,111.1\n-379,009.3\n-200,283.4\n-183,460.8\n-212,180.1\n-216,884.3\n Reserve Bank (RBZ)\n1,841.7\n-84,185.9\n-74,987.2\n-76,958.8\n-107,685.7\n79,429.5\n68,475.7\n-50,976.1\n-260,229.1\n Deposit Money Banks (DMBs)\n-204,438.1\n-219,094.2\n-115,561.0\n-204,196.9\n-282,081.0\n-294,731.2\n-262,175.5\n-175,757.2\n33,238.4\n Other Banking Institutions (OBIs) \\1\n23,635.1\n8,594.7\n-14,760.6\n-26,955.3\n10,757.3\n15,018.3\n10,239.0\n14,553.2\n10,106.4\n Liabilities \\2\n311,392.8\n330,812.5\n456,187.9\n367,926.6\n283,559.6\n20,188.5\n160,762.2\n112,128.0\n37,428.9\n RBZ\n-141,597.9\n-142,138.7\n-294,509.5\n-261,255.8\n-283,804.9\n-48,600.0\n-96,131.8\n-60,845.6\n19,340.3\n DMBs\n-198,281.1\n-217,181.2\n-187,715.9\n-130,095.6\n-23,610.5\n14,958.5\n-83,111.7\n-63,177.9\n-46,073.7\n OBIs\n28,486.1\n28,507.4\n26,037.5\n23,424.8\n23,855.8\n13,453.0\n18,481.3\n11,895.4\n-10,695.4\nNET DOMESTIC ASSETS \\3\n319,048.5\n279,980.3\n25,501.8\n148,570.5\n257,686.8\n400,538.7\n272,589.1\n251,024.5\n376,976.5\nDOMESTIC CREDIT\n245,588.9\n134,866.3\n190,918.6\n379,639.8\n679,564.0\n695,004.5\n776,284.9\n794,638.6\n812,660.2\n Claims on Government (net) \n185,227.8\n122,671.7\n47,442.1\n188,341.5\n482,132.6\n575,620.5\n736,056.5\n754,533.2\n739,918.1\n RBZ\n-11,412.3\n-11,726.2\n-21,094.5\n99,556.4\n99,026.6\n92,986.5\n289,241.2\n270,492.4\n290,213.2\n DMBs\n184,880.3\n122,554.5\n49,095.3\n60,904.0\n354,951.8\n444,479.8\n415,882.2\n448,362.7\n412,213.7\n OBIs\n11,759.9\n11,843.4\n19,441.3\n27,881.1\n28,154.2\n38,154.2\n30,933.0\n35,678.2\n37,491.3\n Claims on Public Enterprises \n4,414.7\n8,255.0\n-7,984.8\n24,181.6\n25,922.7\n-20,025.0\n-28,752.0\n-13,816.8\n-17,867.0\n RBZ\n0.0\n0.0\n0.0\n737.3\n1,087.1\n1,189.1\n1,931.5\n2,098.7\n2,423.7\n DMBs\n4,414.7\n8,255.0\n-9,711.2\n22,450.1\n24,052.3\n-21,919.3\n-30,883.4\n-17,194.6\n-21,602.9\n Agri-PEs\n-7,246.8\n-7,246.8\n-6,896.5\n-6,898.8\n-6,908.9\n-1,516.3\n-1,511.0\n-1,514.5\n-1,515.5\n Other\n11,661.5\n15,501.8\n-2,814.7\n29,348.9\n30,961.2\n-20,403.0\n-29,372.5\n-15,680.0\n-20,087.4\n OBIs\n0.0\n0.0\n1,726.4\n994.2\n783.2\n705.1\n200.0\n1,279.1\n1,312.2\n Claims on Private Sector\n55,946.4\n3,939.6\n151,461.2\n167,116.7\n171,508.7\n139,409.0\n68,980.4\n53,922.1\n90,609.0\n RBZ\n-390.8\n-390.8\n-3,336.1\n-3,187.1\n-3,589.5\n16,964.5\n31,997.2\n58,043.6\n32,634.0\n DMBs\n-120,031.2\n-192,169.1\n-33,095.8\n-19,566.9\n4,881.3\n-55,223.4\n-103,031.0\n-141,232.5\n-64,459.1\n OBIs\n176,368.4\n196,499.5\n187,893.1\n189,870.6\n170,216.9\n177,667.9\n140,014.2\n137,110.9\n122,434.1\nOTHER ITEMS (NET) \n73,459.6\n145,114.0\n-165,416.8\n-231,069.3\n-421,877.2\n-294,465.8\n-503,695.8\n-543,614.1\n-435,683.7\nBROAD MONEY (M3) \n451,480.0\n316,107.4\n276,380.8\n208,386.1\n162,237.0\n220,443.8\n249,890.4\n150,972.4\n197,521.1\nGROWTH RATES\n Broad Money (M3) \n11.6%\n7.9%\n6.8%\n4.9%\n3.8%\n5.1%\n5.9%\n3.5%\n4.5%\n Domestic Credit \n6.2%\n3.3%\n4.6%\n9.1%\n16.4%\n16.7%\n18.5%\n18.8%\n19.0%\n Claims on Private Sector\n1.6%\n0.1%\n4.2%\n4.6%\n4.8%\n3.9%\n1.9%\n1.4%\n2.4%\nTABLE 1.4 : ANALYSIS OF YEARLY CHANGES IN MONEY SUPPLY (M3)\n$ Thousands\n2015\n \n \nMONTHLY ECONOMIC REVIEW \n12 \n \n \n \n \n \n \n \n \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATE\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISATIONS\n \n \n \n \n2014 \nJan\n489,585.3\n43,743.8\n18,574.7\n464,097.6\n5,467.4\n48,086.1\n362,554.0\n116,635.5\n412,901.1\n37,722.2\n367,126.2\n16,773.1\n2,383,267.1\nFeb \n519,154.6\n38,918.1\n24,765.4\n460,528.2\n10,397.3\n47,488.6\n385,038.1\n116,670.5\n401,619.6\n32,978.1\n396,800.8\n8,542.7\n2,442,902.1\nMar\n503,868.1\n42,707.9\n35,785.1\n494,663.8\n5,257.4\n52,722.0\n374,809.1\n116,653.0\n396,000.6\n38,089.3\n406,503.1\n15,833.1\n2,482,892.7\nApr\n540,156.2\n40,707.1\n18,138.9\n502,514.1\n9,898.6\n18,817.9\n407,595.0\n175,048.3\n447,549.2\n49,619.1\n511,048.2\n15,136.7\n2,736,229.2\nMay\n546,733.9\n41,594.2\n21,547.9\n488,389.7\n10,073.8\n23,049.1\n396,846.0\n184,730.9\n452.373.8\n51,891.8\n512,864.5\n17,718.8\n2,747,814.6\nJun\n536,188.9\n46,085.8\n28,201.0\n500,266.1\n10,656.3\n25,616.2\n417,002.7\n197,441.1\n432,692.4\n46,751.6\n499,191.5\n17,173.9\n2,757,267.4\nJul\n575,645.3\n43,055.0\n28,090.8\n480,483.6\n6,359.2\n27,284.9\n428,611.4\n206,052.3\n479,384.6\n49,260.4\n507,930.0\n46,148.1\n2,878,305.8\nAug\n548,866.7\n56,886.1\n38,891.3\n498,696.8\n54,387.2\n110,618.5\n422,942.5\n221,099.2\n430,156.3\n48,167.0\n474,060.2\n37,230.9\n2,942,002.7\nSep\n539,818.8\n51,349.1\n29,191.8\n493,610.7\n51,999.0\n109,975.0\n428,697.3\n201,791.6\n451,117.2\n45,100.0\n539,108.1\n36,708.6\n2,978,467.1\nOct\n530,544.7\n62,891.8\n55,922.5\n507,936.4\n50,701.1\n101,818.5\n436,519.1\n196,491.0\n413,443.5\n39,088.3\n520,437.0\n5,799.4\n2,921,593.2\nNov\n574,859.5\n58,780.5\n46,419.5\n460,989.3\n50,008.6\n120,510.4\n453,924.5\n208,418.3\n413,410.7\n45,289.6\n540,638.4\n5,976.9\n2,979,226.2\nDec\n565,840.1\n46,298.5\n42,604.8\n437,975.3\n47,805.8\n88,485.5\n478,895.5\n220,501.3\n481,497.5\n43,449.8\n543,038.5\n5,957.7\n3,002,529.6\n2015 \nJan\n541,656.5\n46,681.6\n39,906.8\n445,656.6\n21,454.5\n131,350.1\n466,896.6\n207,686.6\n452,817.5\n47,945.7\n557,066.9\n1,401.2\n2,960,820.4\nFeb\n538,722.0\n42,062.8\n47,395.1\n446,647.8\n21,790.0\n117,681.6\n461,237.6\n214,420.4\n463,884.6\n48,357.0\n544,838.5\n1,416.2\n2,948,453.6\nMar\n549,118.0\n42,010.1\n44,087.2\n448,278.7\n76,302.3\n110,180.3\n473,978.1\n203,327.9\n466,104.7\n48,938.0\n550,140.6\n1,339.6\n3,013,805.6\nApr\n556,457.4\n30,687.3\n44,546.9\n451,852.9\n65,696.1\n72,653.7\n457,797.1\n202,418.2\n518,353.6\n47,653.8\n551,662.8\n990.1\n3,000,770.0\nMay\n577,258.6\n31,400.7\n44,839.1\n456,652.1\n64,792.3\n75,682.2\n460,700.3\n192,377.2\n545,363.4\n50,061.9\n561,058.3\n1,034.4\n3,061,220.5\nJun\n576,485.1\n29,649.0\n56,936.5\n463,750.7\n20,117.9\n91,678.4\n407,949.0\n181,512.7\n512,108.4\n40,839.7\n590,917.1\n965.9\n2,972,910.2\nJul\n589,866.7\n27,447.9\n56,456.1\n474,568.7\n21,025.9\n92,335.6\n418,612.0\n186,238.8\n416,928.9\n41,201.6\n579,629.0\n941.4\n2,905,252.7\nAug\n580,775.3\n28,148.8\n58,618.6\n460,451.4\n22,509.2\n105,466.9\n411,831.6\n176,732.7\n440,470.4\n41,154.5\n571,926.0\n886.9\n2,898,972.1\nSep\n598,429.9\n28,307.9\n59,213.0\n443,604.1\n22,711.9\n102,015.0\n421,228.0\n174,144.2\n467,804.5\n43,051.0\n569,250.1\n929.5\n2,930,689.0\n/1 Including the only merchant bank still in operation.\nTABLE 2.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES/1\n$ Thousands\n \n \nMONTHLY ECONOMIC REVIEW \n13 \n \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS\nORGANISATIONS\n2013\nJANUARY\n91,648.8\n48,329.1\n128,426.0\n351,566.7\n212,401.7\n494,823.6\n252,389.7\n93,470.0\n658,260.1\n44,091.4\n512,289.8\n32,145.9\n2,919,842.6\nFEBRUARY\n96,796.5\n48,491.5\n147,571.5\n360,757.9\n147,995.9\n578,306.4\n284,603.8\n64,530.5\n679,554.8\n41,983.6\n516,431.2\n25,275.3\n2,991.999.1\nMARCH\n96,752.8\n44,883.3\n139,327.8\n354,627.8\n155,915.2\n610,758.4\n290,072.8\n87,143.0\n594,397.7\n38,345.5\n523,913.8\n141,404.6\n3,077,542.7\nAPRIL\n98,671.0\n49,093.8\n152,390.8\n350,269.2\n166,578.5\n545,118.2\n311,310.8\n105,766.9\n638,341.8\n39,837.1\n533,691.3\n99,053.9\n3,090,123.4\nMAY\n114,053.3\n55,427.4\n142,023.3\n389,384.7\n255,352.1\n484,429.7\n318,129.4\n92,777.2\n700,668.7\n46,593.8\n578,509.2\n32,297.7\n3,209,646.5\nJUNE\n116,635.2\n58,578.8\n147,313.8\n447,394.5\n183,146.3\n352,600.3\n366,824.2\n96,685.8\n701,195.7\n46,578.5\n597,373.1\n104,843.6\n3,219,169.8\nJULY\n108,086.6\n46,449.5\n120,982.3\n380,448.8\n178,341.4\n677,700.7\n301,575.9\n97,583.8\n710,856.1\n39,395.9\n487,954.4\n102,531.4\n3,251,906.9\nAUGUST\n137,107.1\n48,726.1\n135,788.5\n319,106.0\n174,593.9\n637,190.7\n333,255.3\n99,194.1\n639,401.6\n41,996.5\n417,762.6\n93,772.1\n3,077,894.4\nSEPTEMBER\n100,028.3\n57,039.8\n145,652.5\n380,781.4\n207,379.2\n612,131.5\n408,359.1\n103,872.8\n795,047.6\n46,982.9\n435,912.4\n90,265.8\n3,383,453.4\nOCTOBER\n94,346.3\n52,722.4\n141,401.4\n338,625.9\n223,223.8\n754,145.4\n339,305.6\n99,583.3\n754,116.1\n41,527.2\n440,197.9\n97,771.1\n3,376,966.4\nNOVEMBER\n114,178.7\n47,740.9\n128,399.3\n312,639.2\n241,628.8\n741,885.4\n283,426.0\n80,507.6\n727,492.5\n42,901.0\n458,479.9\n89,292.5\n3,268,571.8\nDECEMBER\n113,914.2\n51,981.7\n142,938.1\n342,785.1\n213,125.2\n755,299.4\n327,658.1\n83,103.1\n762,884.4\n41,827.9\n432,436.3\n61,038.7\n3,328,992.1\n2014\nJANUARY\n130,154.6\n53,292.9\n146,876.1\n353,793.8\n259,569.6\n731,703.3\n304,033.2\n93,776.7\n770,435.4\n40,085.9\n485,573.1\n60,897.7\n3,430,192.5\nFEBRUARY\n138,812.3\n55,092.2\n134,813.9\n420,181.0\n262,183.8\n786,295.6\n270,062.5\n131,134.8\n779,640.3\n39,169.2\n508,813.7\n61,822.3\n3,588,021.6\nMARCH\n118,239.1\n55,167.5\n135,807.9\n382,675.5\n216,025.3\n791,776.0\n275,549.1\n103,298.7\n806,185.9\n42,432.8\n521,381.5\n72,990.9\n3,521,530.3\nAPRIL\n164,347.5\n59,289.3\n102,323.7\n408,823.5\n325,559.7\n780,207.0\n325,659.8\n135,187.4\n888,876.2\n43,746.5\n582,848.8\n82,009.8\n3,898,879.1\nMAY\n149,474.1\n60,669.4\n108,977.6\n355,802.3\n332,850.8\n800,256.8\n303,599.4\n132,132.8\n1,027,552.7\n38,921.0\n581,930.2\n93,334.9\n3,985,501.8\nJUNE\n194,685.1\n64,188.9\n95,595.6\n470,267.7\n291,594.6\n812,999.7\n348,303.5\n130,453.4\n895,698.0\n44,735.5\n575,149.1\n91,392.4\n4,015,063.5\nJULY\n163,335.6\n56,812.0\n87,587.5\n370,121.7\n303,367.3\n830,988.6\n334,436.8\n112,985.0\n880,761.1\n44,675.4\n587,756.7\n94,841.5\n3,867,669.2\nAUGUST\n128,794.1\n38,934.1\n90,012.5\n271,204.3\n270,009.9\n755,141.6\n236,267.5\n130,548.6\n865,566.6\n31,180.4\n467,724.2\n89,582.4\n3,374,966.2\nSEPTEMBER\n177,932.5\n56,444.5\n82,756.7\n315,956.8\n309,508.3\n951,593.4\n278,461.5\n174,497.9\n978,044.0\n47,792.7\n571,629.9\n103,464.8\n4,048,083.1\nOCTOBER\n158,421.7\n57,091.4\n83,973.9\n407,934.0\n308,028.8\n917,450.3\n266,690.9\n178,771.0\n936,336.2\n44,950.2\n613,425.1\n91,764.1\n4,064,837.5\nNOVEMBER\n140,908.6\n61,494.3\n93,114.0\n350,153.8\n313,668.7\n881,007.4\n271,049.9\n137,867.8\n955,760.6\n48,177.7\n641,405.3\n90,462.2\n3,985,070.2\nDECEMBER\n147,242.4\n60,358.1\n118,725.7\n328,729.5\n325,746.6\n950,304.9\n290,329.3\n118,977.8\n964,815.0\n47,574.3\n638,061.1\n92,040.8\n4,082,906.3\n2015\nJANUARY\n155,304.2\n63,950.4\n136,066.9\n349,099.7\n294,145.5\n809,684.0\n314,319.6\n113,452.0\n1,034,514.7\n48,876.5\n606,370.3\n78,746.0\n4,004,529.8\nFEBRUARY\n151,740.1\n63,112.6\n109,807.6\n370,581.8\n314,944.7\n784,737.6\n309,307.9\n120,255.1\n1,028,160.1\n43,112.0\n606,650.6\n78,891.2\n3,981,301.2\nMARCH\n199,484.8\n63,709.2\n116,397.4\n378,460.0\n351,448.0\n762,380.7\n373,911.9\n99,744.6\n912,654.4\n42,478.9\n644,951.3\n72,605.2\n4,018,226.6\nAPRIL\n186,896.3\n65,974.0\n130,284.9\n380,884.8\n330,001.9\n799,952.4\n373,648.3\n109,735.0\n944,772.9\n44,964.9\n653,801.0\n75,850.9\n4,096,767.2\nMAY\n185,803.2\n73,167.5\n111,512.1\n523,774.7\n299,659.2\n801,335.5\n419,453.7\n113,355.0\n1,041,392.8\n50,057.9\n619,767.9\n71,388.8\n4,310,668.3\nJUNE\n187,657.0\n76,777.8\n109,336.0\n498,031.3\n304,087.2\n877,042.8\n338,069.8\n67,556.6\n1,131,497.1\n43,949.0\n651,072.8\n72,166.9\n4,357,244.2\nJULY\n180,261.3\n80,536.4\n106,645.3\n452,744.1\n295,611.1\n911,363.8\n360,746.5\n88,518.4\n971,759.9\n53,101.6\n647,215.1\n70,618.8\n4,219,122.4\nAUGUST\n168,075.2\n86,038.9\n108,477.7\n472,875.1\n335,158.3\n784,616.6\n401,830.1\n76,647.0\n1,042,260.4\n55,455.9\n657,177.1\n51,922.5\n4,240,535.0\nSEPTEMBER\n197,641.5\n85,842.6\n112,415.3\n462,925.6\n349,564.2\n831,813.0\n379,121.4\n71,090.0\n1,033,106.7\n53,348.1\n676,308.0\n55,759.2\n4,308,935.5\n/1 Including the only merchant bank still in operation.\n TABLE 2.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \nUS$ Thousands\n \n \nMONTHLY ECONOMIC REVIEW \n14 \n \n \n \n \n \n \n \n \n \n \nEnd Pe rio d\n19 9 9\n2 0 0 0\n2 0 0 1\n2 0 0 2\n2 0 0 3\n2 0 0 4\n2 0 0 5\n2 0 0 6\n2 0 0 7\n2 0 0 8\n2 0 0 9\n2 0 10\n2 0 11\n2 0 12\n2 0 13\n2 0 14\n( U S $ millio ns )\nLo ng - Te rm Ext e rnal D e b t\n3 ,53 0\n3 ,2 2 7\n3 ,2 55\n3 ,3 2 7\n3 ,6 4 4\n3 ,9 2 7\n3 ,8 0 5\n3 ,9 6 5\n4 ,0 3 2\n4 ,4 6 4\n4 ,9 51\n5,175\n6 ,0 9 6\n6 ,6 0 7\n7,3 70\n8 ,4 4 4\nGo ve rnme nt\n2 ,4 6 1\n2 ,2 4 9\n2 ,3 2 8\n2 ,3 76\n2 ,6 17\n2 ,8 4 4\n2 ,8 9 5\n3 ,0 2 4\n3 ,0 54\n3 ,4 6 4\n4 ,0 3 7\n4 ,0 9 5\n4 ,6 3 8\n4 ,9 2 9\n5,0 12\n4 ,52 2\nBilateral Creditors\n935\n1,050\n1,115\n1,107\n1,255\n1,455\n1,438\n1,520\n1,520\n1,863\n2,308\n2,325\n2,597\n2,694\n2,928\n2,445\nMultilateral Creditors\n1,235\n1,199\n1,213\n1,269\n1,362\n1,389\n1,457\n1,504\n1,524\n1,592\n1,729\n1,770\n2,041\n2,235\n2,084\n2,078\nPrivate Creditors\n291\n0\n0\n0\n0\n0\n0\n0\n10\n10\n0\n0\n0\n0\n0\n0\nPub lic Ent e rp ris e s\n54 3\n53 4\n56 8\n6 16\n6 9 8\n714\n70 9\n76 6\n79 0\n8 2 5\n8 57\n9 3 8\n1,0 9 2\n1,19 8\n1,3 56\n1,6 6 1\nBilateral Creditors\n316\n301\n315\n351\n403\n442\n439\n464\n474\n497\n453\n238\n711\n703\n858\n1,155\nMultilateral Creditors\n224\n233\n253\n265\n295\n272\n270\n302\n316\n327\n403\n700\n382\n495\n498\n506\nPrivate Creditors\n3\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\nM o ne t ary A ut ho rit ie s\n3 6 4\n2 9 2\n2 9 2\n2 79\n2 8 8\n2 9 1\n14 4\n13 0\n13 7\n14 0\n14 0\n13 8\n12 7\n12 5\n12 5\n12 0\nMultilateral Creditors - IMF\n364\n292\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\n120\nPrivat e\n16 2\n152\n6 7\n56\n4 1\n78\n57\n4 5\n51\n3 5\n57\n14 2\n3 6 6\n4 8 0\n1,0 0 2\n2 ,2 6 1\nS ho rt - Te rm Ext e rnal D e b t\n53 2\n2 9 8\n16 7\n18 3\n16 9\n14 4\n173\n2 8 1\n3 8 7\n2 2 6\n1,19 8\n1,3 8 2\n1,2 8 9\n8 9 0\n1,56 4\n2 ,3 9 4\nSupplier's Credits\n150\n42\n13\n26\n51\n69\n107\n122\n178\n41\n193\n286\n134\n30\n0\n0\nReserve Bank\n642\n642\n618\n614\n614\n587\nPrivate\n382\n256\n154\n157\n118\n75\n66\n159\n209\n185\n363\n454\n537\n246\n950\n1,807\nTo t al Ext e rnal D e b t\n4 ,0 6 2\n3 ,52 5\n3 ,4 2 2\n3 ,510\n3 ,8 12\n4 ,0 71\n3 ,9 78\n4 ,2 4 6\n4 ,4 19\n4 ,6 9 0\n6 ,14 9\n6 ,557\n7,3 8 5\n7,4 9 7\n8 ,9 3 4\n10 ,8 3 8\nGro s s D o me s t ic Pro d uc t\n5,990\n6,107\n10,887\n6,715\n5,037\n4,299\n2,918\n6,645\n4,000\n3,175\n8,157\n9,457\n10,956\n12,472\n13,490\n14,068\nExt e rnal D e b t / GD P\n6 8 %\n57.7%\n3 1.4 %\n52 .3 %\n75.7%\n9 4 .7%\n13 6 .3 %\n6 3 .9 %\n110 .5%\n14 7.7%\n75.4 %\n6 9 .3 %\n6 7.4 %\n6 0 .1%\n6 6 .2 %\n77.0 %\nTABLE 3.1: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR (INCLUDING ALL ARREARS)\n \n \nMONTHLY ECONOMIC REVIEW \n15 \n \n \nEnd Period\nNominal Lending Rates2\nIndividuals \nCorporate\n2014 \nJan\n6.00-35.00\n14.09 \n9.30 \nFeb \n6.00-35.00\n14.08 \n9.32 \nMar\n6.00-35.00\n14.24 \n9.27 \nApr\n6.00-35.00\n14.22 \n9.12 \nMay\n6.00-35.00\n14.39 \n9.25 \nJun\n6.00-35.00\n14.44 \n9.33 \nJul\n6.00-35.00\n14.33 \n9.45 \nAug\n6.00-35.00\n14.28 \n9.45 \nSep\n6.00-35.00\n14.45 \n9.57 \nOct\n6.00-35.00\n14.36 \n9.90 \nNov\n6.00-35.00\n14.26 \n9.97 \nDec\n6.00-35.00\n14.19 \n9.68 \n2015 \nJan\n6.00-35.00\n14.16 \n9.66 \nFeb\n4.30-33.50\n14.00 \n9.73 \nMar\n4.30-33.50\n13.24 \n8.75 \nApr\n4.30-31.00\n12.71 \n8.84 \nMay\n5.00-31.00\n12.74 \n8.79 \nJun\n5.00-31.00\n11.94 \n8.42 \nJul\n5.00-31.00\n11.86 \n8.56 \nAug\n4.30-26.00\n11.96 \n8.51 \nSep\n4.30-25.00\n11.81 \n8.47 \nTABLE 4.1 LENDING RATES (percent per annum)1\nCommercial Banks\nWeighted Average Lending Rates 3 \n \n \nMONTHLY ECONOMIC REVIEW \n16 \n \n \nEND OF\nSAVINGS\n3 MONTHS\n2014 \nJan\n0.15-8.00\n3.00-20.00\nFeb \n0.15-8.00\n3.00-20.00\nMar\n0.15-8.00\n3.00-20.00\nApr\n0.15-8.00\n3.00-20.00\nMay\n0.15-8.00\n3.00-20.00\nJun\n0.15-8.00\n3.00-20.00\nJul\n0.15-8.00\n3.00-20.00\nAug\n0.15-8.00\n4.00-20.00\nSep\n0.15-8.00\n4.00-20.00\nOct\n0.15-8.00\n4.00-20.00\nNov\n0.15-8.00\n4.00-20.00\nDec\n0.15-8.00\n3.00-20.00\n2015 \nJan\n0.15-8.00\n3.00-17.00\nFeb\n0.50-12.00\n1.00-17.00\nMar\n0.50-12.00\n1.00-17.00\nApr\n0.30-8.00\n1.00-17.00\nMay\n0.30-8.00\n1.00-17.00\nJun\n0.30-8.00\n1.00-17.00\nJul\n0.30-8.00\n1.00-15.00\nAug\n0.30-8.00\n1.00-15.00\nSep\n0.30-8.00\n1.00-16.00\n* The range of rates qouted by banks during the period.\nTABLE 4.2 : BANKS DEPOSIT RATES (percent per annum)*\nCOMMERCIAL BANKS\n \n \nMONTHLY ECONOMIC REVIEW \n17 \n \n \nFOOD IN FLA TION\nA LL\nA LC OHOLIC \nB EV ER A GES \nC LOTHIN G\nHS IN G, WA TER ,\nFU R N ITU R E\nHEA LTH\nTR A N S POR T\nC OM M U N IC A TION\nR EC R EA TION &\nED U C A TION\nR ES TA U R A N TS &\nM IS C .\nTOTA L N ON\nFOOD & \nITEM S\n& TOB A C C O\nFOOTWEA R\nELEC TR IC TY , \nGA S\nA N D\nC U LTU R E\nHOTELS\nGOOD S &\nFOOD\nN ON A LC OHOLIC \nB EV ER A GES\n& OTHER\nEQU IPM EN T\nS ER V IC ES\nFU ELS\nWEIGHTS\n4 .3 8\n6 .0 5\n17.74\n9 .9 1\n2 .16\n9 .76\n3 .4 1\n2 .1\n5.6 7\n1.3 8\n3 .9 1\n6 6 .4 7\n3 3 .53\n10 0\n2013\nOC TOB ER\n1.2 1\n0 .0 0\n- 0 .0 1\n- 0 .3 6\n0 .0 6\n- 0 .3 2\n- 0 .0 7\n- 0 .15\n0 .0 2\n- 0 .0 8\n- 0 .2 0\n- 0 .0 4\n0 .0 4\n- 0 .0 1\nN OV EM B ER\n0 .3 8\n- 0 .19\n- 0 .0 1\n- 0 .3 7\n0 .10\n- 0 .13\n- 0 .0 1\n- 0 .13\n5.57\n1.0 8\n- 0 .2 7\n0 .4 3\n- 0 .6 0\n0 .0 9\nD EC EM B ER\n0 .14\n- 0 .0 1\n0 .3 7\n- 0 .2 9\n0 .12\n0 .2 7\n0 .0 5\n- 0 .2 2\n0 .0 0\n0 .0 0\n- 0 .4 6\n0 .0 8\n- 0 .4 1\n- 0 .0 8\n2014\nJA N U A R Y\n0 .2 0\n- 0 .0 7\n0 .0 0\n0 .0 1\n- 0 .2 3\n0 .0 1\n0 .0 0\n- 0 .0 7\n0 .0 2\n0 .16\n- 0 .0 9\n0 .0 0\n0 .4 4\n0 .14\nFEB R U A R Y\n- 0 .0 1\n- 0 .0 9\n- 0 .11\n- 0 .0 8\n0 .0 9\n0 .0 8\n0 .0 0\n- 0 .0 4\n0 .2 3\n- 0 .0 8\n0 .0 7\n- 0 .0 1\n0 .18\n0 .0 5\nM A R C H\n- 0 .0 5\n- 0 .0 6\n- 0 .8 2\n- 0 .12\n0 .0 2\n0 .0 0\n0 .0 1\n0 .0 0\n0 .0 0\n0 .0 1\n- 0 .3 0\n- 0 .2 6\n- 0 .14\n- 0 .2 2\nA PR IL\n0 .3 0\n- 0 .10\n- 0 .13\n- 0 .75\n0 .16\n0 .3 3\n- 0 .0 2\n0 .3 4\n12 .6 4\n- 1.0 2\n- 0 .0 3\n1.0 9\n- 0 .4 6\n0 .58\nM A Y\n0 .11\n- 0 .11\n- 0 .0 6\n- 0 .2 9\n0 .0 0\n0 .2 3\n- 0 .0 3\n- 0 .2 0\n0 .0 7\n- 0 .13\n- 0 .4 3\n- 0 .0 5\n- 0 .3 0\n- 0 .13\nJU N E\n- 0 .0 5\n0 .12\n0 .0 0\n0 .0 6\n0 .3 0\n- 0 .0 3\n0 .0 0\n- 0 .0 9\n0 .0 0\n- 0 .11\n0 .15\n0 .0 2\n- 0 .12\n- 0 .0 3\nJU LY\n- 0 .4 7\n- 0 .2 1\n0 .12\n0 .3 0\n- 0 .0 1\n0 .11\n- 0 .12\n- 0 .13\n- 0 .0 8\n1.79\n0 .8 5\n- 0 .3 7\n0 .2 5\n0 .0 1\nA U GU S T\n- 0 .8 1\n- 0 .0 5\n- 0 .0 9\n0 .0 0\n- 0 .14\n0 .0 4\n0 .2 8\n- 0 .0 6\n- 0 .0 8\n- 0 .0 2\n0 .0 2\n- 1.2 1\n- 0 .0 7\n- 0 .3 1\nS EPTEM B ER\n0 .10\n0 .14\n0 .4 5\n- 0 .2 7\n0 .2 1\n0 .3 8\n- 0 .0 6\n- 0 .14\n0 .0 0\n- 0 .4 0\n0 .11\n0 .15\n- 0 .3 4\n- 0 .0 1\nOC TOB ER\n0 .16\n0 .0 7\n0 .0 0\n- 0 .14\n- 0 .0 1\n- 0 .2 7\n- 0 .0 6\n- 0 .0 4\n0 .0 1\n0 .0 2\n0 .0 3\n- 0 .0 4\n- 0 .2 4\n- 0 .11\nN OV EM B ER\n0 .19\n0 .12\n- 0 .0 3\n- 0 .0 9\n0 .0 9\n0 .10\n0 .0 2\n0 .0 2\n- 9 .18\n- 0 .6 2\n0 .0 6\n- 0 .9 6\n- 0 .11\n- 0 .6 9\nD EC EM B ER\n0 .0 1\n- 0 .10\n0 .16\n- 0 .10\n0 .13\n0 .19\n0 .0 0\n- 0 .16\n0 .0 0\n- 0 .2 3\n- 0 .15\n0 .0 4\n- 0 .3 6\n- 0 .0 9\n2015\nJA N U A R Y\n- 0 .0 4\n- 0 .0 1\n0 .0 8\n0 .0 7\n0 .0 6\n- 0 .9 7\n- 13 .4 1\n0 .0 2\n- 0 .0 8\n- 0 .4 8\n0 .3 0\n- 0 .6 9\n0 .4 0\n- 0 .3 4\nFEB R U A R Y\n0 .2 5\n- 0 .3 5\n- 0 .0 9\n- 0 .11\n- 0 .0 2\n- 0 .4 1\n- 0 .10\n- 0 .17\n0 .0 0\n- 0 .2 8\n0 .10\n- 0 .13\n0 .0 5\n- 0 .0 7\nM A R C H\n0 .12\n- 0 .2 7\n- 0 .0 6\n- 0 .0 2\n- 0 .0 5\n0 .0 2\n0 .0 0\n0 .0 3\n0 .0 0\n0 .12\n0 .10\n- 0 .0 3\n- 0 .0 3\n- 0 .0 3\nA PR IL\n- 0 .6 3\n- 0 .0 1\n- 0 .71\n- 3 .3 5\n- 0 .4 6\n- 0 .0 5\n- 0 .15\n- 0 .13\n- 0 .0 7\n0 .59\n0 .4 1\n- 0 .0 4\n- 1.0 1\n- 0 .8 9\nM A Y\n- 0 .17\n- 0 .4 1\n0 .18\n- 0 .2 5\n0 .10\n- 0 .2 5\n- 0 .0 2\n- 0 .11\n0 .0 0\n- 0 .0 8\n- 0 .4 4\n- 0 .10\n- 0 .3 7\n- 0 .19\nJU N E\n0 .3 6\n- 0 .0 6\n- 0 .0 2\n- 0 .0 7\n- 0 .17\n0 .0 6\n0 .0 1\n- 0 .0 9\n0 .0 0\n- 0 .0 7\n0 .11\n0 .0 1\n- 0 .4 5\n- 0 .14\nJU LY\n- 0 .0 8\n0 .0 5\n- 0 .56\n- 0 .8 2\n0 .15\n- 0 .0 9\n- 0 .0 2\n- 0 .14\n7.4 8\n- 0 .0 2\n0 .0 3\n0 .4 7\n- 0 .8 1\n0 .0 6\nA U GU S T\n- 0 .2 7\n- 0 .0 1\n0 .0 2\n- 0 .14\n- 0 .0 4\n- 0 .2 9\n- 0 .0 6\n- 0 .2 6\n0 .0 0\n- 0 .14\n- 0 .0 9\n- 0 .10\n- 0 .75\n- 0 .3 6\nS EPTEM B ER\n- 0 .0 5\n0 .0 0\n- 0 .6 2\n- 0 .52\n0 .0 4\n- 0 .4 2\n- 0 .3 8\n- 0 .0 1\n0 .0 0\n1.2 8\n- 0 .3 0\n- 0 .3 1\n- 0 .4 7\n- 0 .3 6\nN ON - FOOD IN FLA TION\nTABLE 5.1 : MONTHLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX\n( DECEMBER 2012 = 100)\n \n \nMONTHLY ECONOMIC REVIEW \n18 \n \n \nFOOD \nIN FLA TION\nA LL\nA LC OHOLIC \nB EV ER A GES \nC LOTHIN G\nHS IN G, \nWA TER ,\nFU R N ITU R E\nHEA LTH\nTR A N S POR T\nC OM M U N IC A\nTION\nR EC R EA TION \n&\nED U C A TION\nR ES TA U R A N\nTS &\nM IS C .\nTOTA L N ON\nFOOD & \nITEM S\n& TOB A C C O\nFOOTWEA R\nELEC TR IC TY , \nGA S\nA N D\nC U LTU R E\nHOTELS\nGOOD S &\nFOOD\nN ON \nA LC OHOLIC \nB EV ER A GES\n& OTHER\nEQU IPM EN T\nS ER V IC ES\nFU ELS\nWEIGHTS\n4 .3 8\n6 .0 5\n17.74\n9 .9 1\n2 .16\n9 .76\n3 .4 1\n2 .1\n5.6 7\n1.3 8\n3 .9 1\n6 6 .4 7\n3 3 .53\n10 0\n2 0 14\nJA N U A R Y\n5.0 3\n0 .0 3\n3 .6 3\n- 1.0 7\n1.8 7\n1.6 2\n- 14\n- 1.12\n11.3\n2 .18\n- 0 .4 3\n1.6 7\n- 2 .0 8\n0 .4 1\nFEB R U A R Y\n2 .2 1\n- 0 .4 3\n3 .0 9\n- 1.3 5\n0 .4 4\n0 .0 5\n- 13 .8 6\n- 1.0 8\n11.4 7\n1.3 2\n- 1.4 5\n0 .9 3\n- 3 .2 6\n- 0 .4 9\nM A R C H\n1.6 7\n- 0 .53\n2 .2 1\n- 1.8 2\n0 .4\n- 0 .4 4\n- 13 .6 8\n- 1.2 1\n11.4 7\n2 .4 7\n- 1.8 2\n0 .51\n- 3 .71\n- 0 .9 1\nA PR IL\n1.78\n- 0 .55\n0 .4 6\n- 2 .6\n0 .2 2\n- 0 .11\n- 0 .6 2\n- 0 .9 3\n2 0 .71\n1.13\n- 1.56\n1.5\n- 3 .73\n- 0 .2 6\nM A Y\n1.9 1\n- 0 .8 3\n0 .3 9\n- 2 .6 2\n0 .2 9\n0 .8 6\n- 0 .6\n- 0 .6 4\n2 0 .79\n0 .9 5\n- 1.6 9\n1.6 2\n- 3 .75\n- 0 .19\nJU N E\n1.6 8\n- 0 .8 1\n0 .4\n- 2 .54\n0 .6 4\n0 .9 7\n- 0 .2 7\n- 0 .8 4\n2 0 .79\n0 .9 9\n- 1.6 7\n1.6 7\n- 3 .54\n- 0 .0 8\nJU LY\n- 2 .8 8\n1.6 4\n- 0 .6 8\n0 .7\n- 2 .4\n0 .8\n0 .5\n- 0 .4\n- 0 .8\n2 3\n1.8\n- 2\n1.9\n0 .3\nA U GU S T\n- 2 .79\n2 .0 2\n- 0 .4 4\n- 0 .1\n- 2 .5\n0 .6\n0 .7\n- 0 .3\n- 0 .8\n2 1.4\n0 .9\n- 2 .8\n1.6\n0 .2\nS EPTEM B ER\n2 .10\n- 0 .3 4\n- 0 .0 3\n- 2 .6 0\n0 .9 8\n0 .9 9\n- 0 .3 2\n- 0 .8 5\n2 1.4 2\n0 .2 8\n- 3 .0 6\n1.59\n- 2 .9 5\n0 .0 9\nOC TOB ER\n1.0 4\n- 0 .2 7\n- 0 .0 1\n- 2 .3 8\n0 .9 1\n1.0 4\n- 0 .3 1\n- 0 .75\n2 1.4 1\n0 .3 8\n- 2 .8 3\n1.59\n- 3 .2 3\n0 .0 0\nN OV EM B ER\n0 .8 4\n0 .0 4\n- 0 .0 3\n- 2 .11\n0 .9 1\n1.2 6\n- 0 .2 8\n- 0 .59\n4 .4 4\n- 1.3 1\n- 2 .50\n0 .17\n- 2 .75\n- 0 .78\nD EC EM B ER\n0 .71\n- 0 .0 5\n- 0 .2 4\n- 1.9 2\n0 .9 2\n1.18\n- 0 .3 3\n- 0 .53\n4 .4 5\n- 1.54\n- 2 .2 1\n0 .13\n- 2 .7\n- 0 .8\n2 0 15\nJA N U A R Y\n0 .4 7\n0 .0 0\n- 0 .16\n- 1.8 6\n1.2 1\n0 .19\n- 13 .6 9\n- 0 .4 4\n4 .3 5\n- 2 .16\n- 1.8 2\n- 0 .57\n- 2 .74\n- 1.2 8\nFEB R U A R Y\n0 .73\n- 0 .2 5\n- 0 .14\n- 1.8 8\n1.10\n- 0 .3 0\n- 13 .78\n- 0 .57\n4 .11\n- 2 .3 6\n- 1.8 0\n- 0 .6 8\n- 2 .8 7\n- 1.4 0\nM A R C H\n0 .9 0\n- 0 .4 6\n0 .6 2\n- 1.78\n1.0 3\n- 0 .2 8\n- 13 .78\n- 0 .54\n4 .11\n- 2 .2 6\n- 1.4 1\n- 0 .4 4\n- 2 .77\n- 1.2 0\nA PR IL\n- 2 .9 3\n0 .59\n- 1.0 7\n- 2 .6 2\n- 1.50\n0 .8 1\n- 0 .76\n- 13 .8 8\n- 0 .9 5\n- 7.0 2\n- 0 .8 4\n- 1.4 1\n- 2 .51\n- 2 .6 5\nM A Y\n0 .3 1\n- 1.3 7\n- 2 .3 9\n- 1.4 5\n0 .9 2\n- 1.2 3\n- 13 .8 7\n- 0 .8 6\n- 7.0 9\n- 0 .79\n- 1.4 2\n- 2 .56\n- 3 .0 0\n- 2 .70\nJU N E\n0 .72\n- 1.54\n- 2 .4 1\n- 1.58\n0 .4 5\n- 1.14\n0 .0 0\n- 0 .8 7\n- 7.0 9\n- 0 .75\n- 1.3 8\n- 2 .57\n- 3 .3 2\n- 2 .8 1\nJU LY\n0 .74\n- 1.6 1\n- 3 .2 4\n- 2 .3 7\n0 .50\n- 1.12\n- 13 .77\n- 0 .9 3\n- 1.9 0\n- 1.6 1\n- 0 .9 9\n- 2 .3 5\n- 3 .6 5\n- 2 .77\nA U GU S T\n0 .6 1\n- 1.53\n- 3 .2 2\n- 2 .3 7\n0 .4 2\n- 1.6 7\n- 13 .77\n- 1.11\n- 1.8 8\n- 1.78\n0 .13\n- 2 .3 8\n- 3 .59\n- 2 .77\nS EPTEM B ER\n0 .4 7\n- 1.6 7\n- 4 .2 5\n- 2 .6 2\n0 .2 5\n- 2 .4 5\n- 14 .0 5\n- 0 .9 9\n- 1.8 8\n- 0 .12\n- 0 .2 8\n- 2 .8 3\n- 3 .72\n- 3 .11\nN ON - FOOD IN FLA TION\nTABLE 5.2 : YEARLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \\1\n(DECEMBER 2012 = 100)\n \n \nMONTHLY ECONOMIC REVIEW \n19 \n \n \n \nSA\nBW\nJAPANESE\nEUROPEAN\nPOUND\nEND OF\nRAND/1\nPULA/1\nYEN/1\nCURRENCY/2\nSTERLING/2\n2014\nJANUARY\n11.21\n9.09\n102.47\n1.35\n1.65\nFEBRUARY\n10.71\n8.85\n101.74\n1.37\n1.67\nMARCH\n10.56\n8.85\n102.38\n1.38\n1.68\nAPRIL\n10.57\n8.85\n102.38\n1.38\n1.68\nMAY\n10.44\n8.73\n101.61\n1.36\n1.67\nJUNE\n10.58\n8.67\n101.3\n1.36\n1.7\nJULY\n10.68\n8.85\n102.76\n1.36\n1.69\nAUGUST\n10.98\n9.07\n107.35\n1.29\n1.63\nSEPTEMBER\n11.26\n9.26\n109.39\n1.27\n1.63\nOCTOBER\n10.90\n9.11\n110.87\n1.26\n1.59\nNOVEMBER\n11.02\n9.22\n118.21\n1.38\n1.57\nDECEMBER\n11.56\n9.51\n119.65\n1.22\n1.56\n2015\nJANUARY\n11.55\n9.61\n117.85\n1.13\n1.51\nFEBRUARY\n11.55\n9.61\n119.17\n1.12\n1.54\nMARCH\n12.16\n9.96\n120.19\n1.08\n1.48\nAPRIL\n11.82\n9.74\n118.60\n1.11\n1.54\nMAY\n12.13\n9.76\n123.87\n1.09\n1.53\nJUNE\n12.26\n9.92\n122.31\n1.12\n1.57\nJULY\n12.71\n10.67\n124.03\n1.09\n1.56\nAUGUST\n13.31\n10.20\n121.11\n1.12\n1.54\nSEPTEMBER\n13.90\n10.55\n119.94\n1.12\n1.54\n TABLE 6 : SELECTED INTERNATIONAL EXCHANGE RATES\n \n \nMONTHLY ECONOMIC REVIEW \n20 \n \n \n \n \n \n \n \nForeign\nLoans & \nContigent\nOther\nNon Financial \nTOTAL\nEnd of\nNotes\nTotal\nOther Balances\nAdvnces\nAssets\nAssets\nAssets\n&\nBalances\nBalances \nBalances\nwith RBZ\nBond\nCoin\nwith\nwith Other \nat\nTrade\nTreasury\nAgric PEs\nCoins\nat Banks\nRBZ\nBanks\nForeign Banks\nBills\nBills\n2014\n Jan\n356.9\n395.3\n134.1\n253.1\n153.0\n119.2\n5.4\n1417.0\n27.9\n2866.4\n516.1\n362.2\n353.9\n5543.5\n Feb\n334.3\n387.0\n130.5\n285.0\n131.2\n193.2\n5.4\n1466.6\n32.8\n2718.1\n534.5\n502.9\n351.1\n5606.0\n Mar\n304.6\n354.1\n147.4\n280.3\n165.9\n255.2\n5.4\n1512.9\n28.7\n2737.9\n522.7\n538.8\n349.7\n5690.7\n Apr\n353.3\n367.8\n154.4\n274.9\n205.7\n247.0\n5.4\n1608.4\n32.5\n2844.6\n534.1\n345.3\n348.6\n5713.6\n May\n327.8\n421.1\n120.5\n372.8\n211.5\n241.7\n5.4\n1700.6\n27.5\n2836.8\n591.4\n366.2\n347.1\n5869.6\n Jun\n347.1\n404.7\n166.4\n338.1\n198.0\n261.9\n0.0\n1716.1\n16.2\n2863.2\n607.8\n362.9\n346.4\n5912.6\n Jul\n347.1\n321.3\n176.7\n276.3\n186.0\n246.2\n0.0\n1553.7\n15.4\n2940.4\n597.5\n347.4\n345.6\n5800.0\n Aug\n360.7\n424.5\n178.5\n243.5\n173.9\n237.5\n0.0\n1618.6\n15.5\n2949.1\n609.5\n353.9\n346.4\n5892.9\n Sep\n255.6\n636.8\n183.0\n158.8\n176.0\n253.9\n0.0\n1664.2\n4.1\n2949.4\n624.6\n371.5\n341.5\n5955.3\n Oct\n226.1\n597.7\n175.0\n205.5\n180.3\n260.1\n0.0\n1644.7\n15.6\n2938.4\n594.4\n369.0\n341.8\n5903.8\n Nov\n258.9\n556.7\n169.1\n157.5\n178.5\n281.6\n0.0\n1602.2\n4.2\n2951.6\n597.5\n369.4\n341.1\n5865.9\n Dec\n0.4\n309.5\n465.7\n167.6\n151.9\n184.3\n285.4\n0.0\n1564.7\n4.1\n2758.6\n606.2\n343.7\n356.0\n5633.3\n2015\n Jan\n0.6\n222.5\n527.9\n159.0\n182.6\n163.6\n325.7\n0.0\n1581.9\n21.4\n2796.8\n557.7\n360.2\n366.1\n5684.2\n Feb\n0.4\n216.7\n501.2\n149.6\n183.2\n128.6\n344.6\n0.0\n1524.2\n17.9\n2792.5\n564.8\n325.3\n356.8\n5581.5\n Mar\n0.6\n246.9\n461.4\n147.8\n222.2\n121.6\n338.0\n5.4\n1543.8\n15.5\n2925.5\n527.3\n352.5\n362.0\n5726.6\n Apr\n0.7\n205.5\n492.8\n158.6\n218.5\n112.0\n335.1\n5.4\n1528.6\n18.2\n2967.1\n527.1\n364.2\n385.4\n5790.7\n May\n0.7\n237.3\n495.6\n135.1\n181.0\n101.4\n622.7\n5.5\n1779.2\n18.2\n2922.7\n525.7\n434.2\n384.3\n6064.3\n Jun\n0.8\n245.7\n570.9\n155.1\n144.7\n90.8\n750.1\n4.4\n1962.4\n28.8\n2872.6\n498.4\n351.0\n386.2\n6099.4\n Jul\n0.9\n226.0\n544.9\n137.3\n135.3\n86.3\n770.0\n0.0\n1900.7\n28.8\n2815.0\n504.1\n361.1\n388.8\n5998.5\n Aug\n1.0\n234.0\n523.7\n104.3\n194.7\n76.1\n786.5\n5.1\n1925.3\n28.8\n2810.1\n535.2\n339.9\n390.5\n6029.6\n Sep\n1.0\n255.2\n551.8\n114.8\n192.9\n63.7\n764.9\n5.1\n1949.4\n28.0\n2844.1\n599.2\n404.6\n392.3\n6217.7\nLiquid Assets\nTABLE 7.1: COMMERCIAL BANKS - ASSETS\nSecurities\nUS$ Millions\n \n \nMONTHLY ECONOMIC REVIEW \n21 \n \n \n \n \n \n \n \n \n \nDeposits\nCapital\nContigent\nOther\nTotal\nOf which\nand\nLiablities\nLiablities\nLiabilities to the \nEnd of\nDemand\nSavings and Short-term\nLong-term\nTotal\nForeign Liabilities\nRBZ\nOther Banks\nReserves\nPublic\n2014\n Jan\n2153.6\n802.7\n403.5\n3359.8\n661.3\n0.0\n55.9\n592.9\n516.1\n357.5\n5543.5\n3359.8\n Feb\n2111.8\n878.8\n494.6\n3485.2\n630.0\n0.0\n51.1\n609.5\n534.5\n359.0\n5669.5\n3485.2\n Mar\n2156.8\n919.6\n454.2\n3530.6\n635.5\n0.0\n44.8\n596.4\n522.7\n360.7\n5690.7\n3530.6\n Apr\n2267.5\n958.3\n435.7\n3661.5\n553.5\n0.0\n17.0\n595.0\n534.1\n352.4\n5713.6\n3661.5\n May\n2294.9\n975.8\n451.7\n3722.4\n585.0\n0.0\n13.7\n591.1\n591.4\n366.1\n5869.6\n3722.4\n Jun\n2248.9\n989.8\n506.1\n3744.8\n543.8\n0.0\n48.3\n591.2\n607.8\n376.7\n5912.6\n3744.8\n Jul\n2130.4\n892.9\n606.6\n3629.9\n560.8\n0.0\n39.5\n571.5\n597.5\n400.6\n5800.0\n3629.9\n Aug\n2202.3\n963.1\n539.9\n3705.3\n552.7\n0.0\n43.5\n580.7\n609.5\n401.2\n5892.9\n3705.3\n Sep\n2191.0\n1011.1\n562.6\n3764.8\n548.9\n0.0\n59.5\n544.8\n624.6\n412.7\n5955.3\n3764.8\n Oct\n2260.8\n1015.1\n509.9\n3785.8\n506.8\n0.0\n47.4\n543.3\n594.4\n426.0\n5903.8\n3785.8\n Nov\n2231.8\n943.4\n526.5\n3701.6\n509.4\n0.0\n90.6\n541.8\n597.5\n425.0\n5865.9\n3701.6\n Dec\n2101.6\n975.8\n453.2\n3530.5\n484.0\n0.0\n81.4\n713.6\n606.2\n217.5\n5633.3\n3530.5\n2015\nJan\n2056.2\n996.2\n561.7\n3614.0\n470.1\n0.0\n79.5\n728.5\n557.7\n234.3\n5684.2\n3614.0\nFeb\n2079.6\n876.1\n611.6\n3567.3\n426.6\n0.0\n75.6\n720.3\n564.8\n227.0\n5581.5\n3567.3\nMar\n2139.3\n940.4\n513.3\n3593.0\n461.1\n0.0\n101.9\n749.7\n527.3\n293.6\n5726.6\n3593.0\nApr\n2098.7\n943.5\n629.8\n3672.0\n448.9\n0.0\n103.4\n747.4\n527.1\n291.8\n5790.7\n3672.0\nMay\n2131.8\n1015.3\n615.3\n3762.4\n574.7\n0.0\n82.4\n814.7\n525.7\n304.4\n6064.3\n3762.4\nJun\n2213.2\n1021.9\n593.5\n3828.7\n560.2\n0.8\n103.1\n814.9\n498.4\n293.2\n6099.4\n3828.7\nJul\n2166.4\n889.7\n732.5\n3788.6\n478.9\n0.8\n88.2\n813.0\n504.1\n325.0\n5998.5\n3788.6\nAug\n2266.7\n790.9\n723.1\n3780.7\n490.7\n0.0\n83.4\n825.7\n535.2\n313.9\n6029.6\n3780.7\nSep\n2276.7\n967.6\n648.7\n3892.9\n504.0\n0.0\n72.0\n828.1\n599.2\n321.5\n6217.7\n3892.9\nTABLE 7.2: COMMERCIAL BANKS - LIABILITIES\nUS$ Millions\nAmounts Owing to\n \n \nMONTHLY ECONOMIC REVIEW \n22 \n \n \n \n \n \n \nForeign\nLoans & \nContigent\nOther\nNon Financial \nTOTAL\nEnd of\nNotes\nTotal\nOther Balances\nAdvnces\nAssets\nAssets\nAssets\nBond\n&\nBalances\nBalances \nBalances\nLiquid\nwith RBZ\nCoins\nCoin\nwith\nwith Other \nat\nTrade\nTreasury\nAgris Pes\nAssets\nat Banks\nRBZ\nBanks\nForeign Banks\nBills\nBills\n2014\n Jan\n0.0\n0.1\n0.5\n0.0\n0.2\n1.8\n0.0\n0.0\n2.6\n0.0\n81.3\n10.0\n23.5\n34.7\n152.1\n Feb\n0.0\n0.2\n0.4\n0.1\n0.1\n1.8\n0.0\n0.0\n2.5\n0.0\n77.6\n9.0\n24.1\n34.6\n147.9\n Mar\n0.0\n0.1\n0.1\n0.1\n0.1\n1.6\n0.0\n0.0\n2.0\n0.0\n53.2\n8.7\n21.8\n32.5\n118.1\n Apr\n0.0\n0.1\n0.4\n0.2\n0.3\n1.6\n0.0\n2.6\n5.2\n75.2\n8.5\n22.2\n32.4\n140.9\n284.4\n May\n0.0\n0.2\n0.4\n0.0\n0.1\n0.3\n0.0\n0.9\n1.9\n68.7\n0.1\n14.6\n30.3\n114.6\n230.2\n Jun\n0.0\n0.2\n0.2\n0.1\n0.0\n0.6\n0.0\n0.0\n1.2\n0.0\n66.8\n0.1\n14.7\n29.6\n112.4\n Jul\n0.0\n0.2\n0.3\n0.0\n0.1\n0.3\n0.0\n0.0\n0.9\n0.0\n66.9\n0.1\n12.9\n28.7\n109.6\n Aug\n0.0\n0.2\n0.7\n0.0\n0.1\n0.3\n0.0\n0.0\n1.3\n0.0\n64.4\n0.0\n19.4\n23.9\n109.0\n Sep\n0.0\n0.4\n0.2\n0.0\n0.1\n0.3\n0.0\n0.0\n1.1\n0.0\n65.9\n0.1\n18.9\n19.7\n105.8\n Oct\n0.0\n0.7\n0.7\n0.0\n0.1\n0.3\n0.0\n0.0\n1.7\n0.0\n68.3\n0.1\n10.8\n25.9\n106.9\n Nov\n0.0\n0.6\n0.1\n0.0\n0.1\n0.3\n0.0\n0.0\n1.0\n0.0\n67.1\n0.1\n12.4\n25.8\n106.3\nDec\n0.0\n0.9\n0.4\n0.0\n0.1\n0.3\n0.0\n0.0\n1.7\n0.0\n63.6\n0.1\n10.0\n24.6\n100.0\n2015\n Jan\n0.0\n0.6\n0.3\n0.0\n0.1\n1.6\n0.0\n0.0\n2.0\n0.0\n70.2\n8.3\n19.0\n23.7\n123.8\n Feb\n0.0\n0.4\n0.2\n0.1\n0.1\n1.6\n0.0\n0.0\n2.5\n0.0\n72.0\n8.3\n19.3\n23.6\n125.7\n Mar\n0.0\n0.4\n0.1\n0.0\n0.1\n1.5\n0.0\n0.0\n2.1\n0.0\n73.3\n8.2\n18.5\n23.4\n125.5\n Apr\n0.0\n0.3\n0.1\n0.0\n0.1\n0.2\n0.0\n0.0\n0.6\n0.0\n66.7\n0.0\n10.3\n21.3\n98.9\n May\n0.0\n0.4\n0.0\n0.0\n0.0\n0.2\n0.0\n0.0\n0.6\n0.0\n67.9\n0.0\n9.6\n21.2\n99.3\n Jun\n0.0\n0.3\n0.0\n0.0\n0.0\n0.4\n0.0\n0.0\n0.7\n0.0\n68.1\n0.0\n9.7\n21.1\n99.6\n Jul\n0.0\n0.2\n1.6\n0.0\n0.0\n0.2\n0.0\n0.0\n2.0\n0.0\n67.8\n0.0\n9.2\n21.0\n100.0\n Aug\n0.0\n0.1\n1.8\n0.0\n0.0\n0.2\n0.0\n0.0\n2.0\n0.0\n60.0\n0.0\n9.3\n28.1\n99.4\n Sep\n0.0\n0.1\n2.2\n0.0\n0.0\n0.2\n0.0\n0.0\n2.5\n0.0\n59.2\n0.0\n9.2\n28.0\n98.9\nUS$ Millions\nTABLE 8.1 : ACCEPTING HOUSES - ASSETS\nLiquid Assets\nSecurities\n \n \nMONTHLY ECONOMIC REVIEW \n23 \n \n \n \n \n \n \nOf which\nDeposits\nCapital\nContigent\nOther\nTotal\nLiabilities to the \nand\nLiablities\nLiablities\nPublic\nEnd of\nDemand\nSavings and Short-term\nLong-term\nTotal\nForeign Liabilities\nRBZ\nOther Banks\nReserves\n2014\n Jan\n36.8\n57.7\n5.7\n100.1\n11.7\n0.0\n0.0\n0.7\n10.0\n29.5\n152.1\n100.1\n Feb\n47.6\n48.3\n0.0\n95.8\n11.7\n0.0\n0.0\n-10.9\n9.0\n42.3\n147.9\n95.8\n Mar\n41.0\n55.8\n0.0\n96.9\n12.0\n0.0\n0.0\n-17.7\n8.7\n18.4\n118.1\n96.9\n Apr\n57.4\n40.3\n0.0\n97.7\n12.2\n0.0\n0.0\n-19.8\n8.5\n42.4\n140.9\n97.7\n May\n42.8\n34.6\n0.0\n77.4\n0.0\n0.0\n0.0\n4.7\n0.1\n32.5\n114.6\n77.4\n Jun\n42.8\n33.2\n0.0\n76.0\n0.0\n0.0\n0.0\n2.3\n0.1\n33.7\n112.1\n76.0\n Jul\n42.6\n33.8\n0.0\n76.3\n0.0\n0.0\n0.0\n-8.7\n0.1\n41.8\n109.6\n76.3\n Aug\n36.4\n40.4\n0.0\n76.8\n0.0\n0.0\n0.0\n-7.8\n0.0\n40.0\n109.0\n76.8\n Sep\n40.9\n33.9\n0.0\n74.9\n0.0\n0.0\n0.0\n-7.6\n0.1\n38.4\n105.8\n74.9\n Oct\n39.9\n33.7\n0.0\n73.6\n0.0\n0.0\n0.0\n-9.6\n0.1\n42.8\n106.9\n73.6\n Nov\n39.4\n33.3\n0.0\n72.7\n0.0\n0.0\n0.0\n-10.9\n0.1\n44.4\n106.3\n72.7\nDec\n36.9\n31.2\n0.0\n68.1\n0.0\n0.0\n0.0\n-17.9\n0.1\n49.7\n100.0\n68.1\n2015\n Jan\n39.0\n40.9\n0.0\n80.0\n11.7\n0.0\n0.0\n-47.0\n8.3\n70.7\n123.8\n80.0\n Feb\n38.4\n40.4\n0.0\n78.7\n11.7\n0.0\n0.0\n-48.7\n8.3\n75.6\n125.7\n78.7\n Mar\n68.6\n12.1\n0.0\n80.7\n12.0\n0.0\n0.0\n-50.7\n8.2\n75.2\n125.5\n80.7\n Apr\n63.9\n0.0\n0.0\n63.9\n0.0\n0.0\n0.0\n-27.5\n0.0\n62.4\n98.9\n63.9\n May\n63.9\n0.0\n0.0\n63.9\n0.0\n0.0\n0.0\n-28.8\n0.0\n64.2\n99.3\n63.9\n Jun\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-28.9\n0.0\n65.6\n99.6\n62.9\n Jul\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-27.8\n0.0\n64.8\n100.0\n62.9\n Aug\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-14.9\n0.0\n51.3\n99.4\n62.9\n Sep\n62.2\n0.0\n0.0\n62.2\n0.0\n0.0\n0.0\n-15.3\n0.0\n52.0\n98.9\n62.2\nAmounts Owing to\nTABLE 8.2 : ACCEPTING HOUSES - LIABILITIES\nUS$ Millions\n \n \nMONTHLY ECONOMIC REVIEW \n24 \n \n \n \n \n \nForeign\nMortgage\nOther\nOther\nNon Financial \nTOTAL\nEnd of\nNotes\nTotal\nOther Balances\nAdvances\nAdvances\nAssets\nAssets\n&\nBalances \nNostro \nwith RBZ/1\nBond\nCoin\nwith Other \nBalances\nTrade\nTreasury\nAgris Pes\nCoins\nat Banks\nBanks\nBills\n2014\nJan\n0.0\n30.9\n147.5\n0.0\n0.2\n40.0\n0.0\n218.6\n0.0\n384.5\n136.4\n64.4\n125.3\n929.1\nFeb\n0.0\n30.2\n165.0\n0.0\n0.2\n40.0\n0.0\n235.3\n0.0\n385.8\n132.0\n65.4\n125.4\n943.9\nMar\n0.0\n47.5\n166.2\n0.0\n0.2\n40.0\n0.0\n253.8\n0.0\n390.4\n132.1\n68.8\n125.0\n970.1\nApr\n0.0\n45.2\n161.0\n0.0\n0.2\n40.0\n0.0\n246.5\n0.0\n401.8\n132.4\n76.6\n124.7\n981.9\nMay\n0.0\n47.7\n190.7\n0.0\n0.2\n40.0\n0.0\n278.6\n0.0\n394.0\n147.0\n82.7\n124.3\n1026.7\nJun\n0.0\n39.5\n187.9\n0.0\n0.0\n40.0\n0.0\n267.4\n0.0\n400.0\n150.4\n84.0\n124.4\n1026.1\nJul\n0.0\n40.6\n180.9\n0.0\n0.0\n40.0\n0.0\n261.5\n0.0\n431.8\n159.4\n84.1\n124.4\n1061.2\nAug\n0.0\n17.8\n219.8\n0.0\n0.0\n51.4\n0.0\n289.1\n0.0\n442.4\n166.5\n86.4\n124.2\n1108.6\nSep\n0.0\n51.2\n183.1\n0.0\n0.0\n51.4\n0.0\n285.7\n0.0\n452.1\n173.8\n95.6\n123.8\n1131.0\nOct\n0.0\n37.1\n199.8\n0.0\n0.0\n51.7\n0.0\n288.6\n0.0\n483.1\n179.7\n102.2\n124.0\n1177.6\nNov\n0.0\n53.2\n217.5\n0.0\n0.0\n32.8\n0.0\n303.5\n0.0\n512.4\n169.3\n109.0\n123.5\n1217.6\n Dec\n0.1\n47.0\n224.9\n0.0\n0.2\n52.6\n0.0\n324.8\n0.0\n512.9\n169.0\n102.9\n125.3\n1234.9\n2015\nJan\n0.1\n37.3\n196.0\n0.0\n0.1\n51.8\n0.0\n307.1\n0.0\n511.6\n172.1\n105.8\n126.1\n1222.6\nFeb\n0.1\n32.1\n244.4\n0.0\n0.1\n51.9\n0.0\n328.6\n0.0\n522.9\n176.2\n106.8\n125.8\n1260.2\nMar\n0.1\n52.4\n214.4\n0.0\n0.1\n52.0\n0.0\n319.0\n0.0\n508.7\n180.0\n122.5\n125.5\n1255.5\nApr\n0.1\n32.5\n243.2\n0.0\n0.1\n60.4\n0.0\n336.3\n0.0\n520.2\n182.5\n118.3\n124.8\n1282.0\nMay\n0.1\n33.6\n257.7\n0.0\n0.1\n60.1\n0.0\n351.5\n0.0\n448.7\n235.1\n137.5\n125.2\n1298.0\nJun\n0.2\n59.6\n204.9\n0.0\n0.1\n60.1\n0.0\n324.8\n0.0\n464.9\n231.9\n139.4\n122.0\n1283.0\nJul\n0.2\n51.6\n205.5\n0.0\n0.1\n62.9\n0.0\n320.2\n0.0\n461.5\n230.6\n133.9\n121.9\n1268.2\nAug\n0.1\n53.0\n158.9\n0.0\n0.1\n76.2\n0.0\n288.4\n0.0\n482.9\n228.4\n136.0\n122.2\n1257.9\nSep\n0.1\n55.4\n161.7\n0.0\n0.1\n76.0\n0.0\n293.3\n0.0\n480.4\n235.9\n124.6\n122.1\n1256.3\nLiquid Assets\nSecurities\nTABLE 9.1 : BUILDING SOCIETIES - ASSETS\nUS$ Millions\n \n \nMONTHLY ECONOMIC REVIEW \n25 \n \n \n \n \nOf which\nCapital\nOther\nTotal\nLiabilities to the \nand\nLiabilities\nPublic\nEnd of\nSavings and Short-term\nLong-term\nTotal\nForeign Liabilities\nOther Banks\nReserves\n2014\nJan\n313.9\n253.1\n567.0\n26.1\n80.6\n225.9\n29.5\n929.1\n567.0\nFeb\n318.7\n264.4\n583.1\n25.1\n81.3\n228.6\n25.8\n943.9\n583.1\nMar\n374.6\n234.6\n609.2\n24.7\n79.6\n231.4\n25.2\n970.1\n609.2\nApr\n358.4\n262.7\n621.1\n24.9\n76.5\n234.0\n25.4\n981.9\n621.1\nMay\n436.2\n233.2\n669.4\n24.7\n77.3\n238.0\n17.1\n1026.7\n669.4\nJun\n440.1\n212.2\n652.3\n34.8\n78.9\n243.1\n17.3\n1026.3\n652.3\nJul\n362.4\n302.9\n665.3\n30.1\n104.3\n244.2\n17.5\n1061.3\n665.3\nAug\n358.8\n336.8\n695.5\n35.7\n105.7\n250.6\n21.2\n1108.7\n695.5\nSep\n394.8\n297.6\n692.4\n54.2\n106.9\n253.5\n23.9\n1131.0\n692.4\nOct\n364.5\n368.0\n732.5\n54.2\n105.3\n258.5\n27.3\n1177.7\n732.5\nNov\n376.9\n392.0\n768.9\n54.6\n104.4\n262.9\n27.2\n1217.8\n768.9\nDec\n400.9\n387.5\n788.4\n54.2\n102.0\n262.7\n27.6\n1234.9\n788.4\n2015\nJan\n373.0\n397.1\n770.2\n54.6\n99.1\n267.8\n31.0\n1222.6\n770.2\nFeb\n405.8\n400.3\n806.2\n53.6\n98.3\n272.9\n29.2\n1260.2\n806.2\nMar\n408.1\n386.3\n794.4\n50.8\n108.8\n275.8\n25.8\n1255.5\n794.4\nApr\n464.1\n364.8\n828.9\n48.3\n99.4\n276.8\n28.7\n1282.0\n828.9\nMay\n472.0\n391.6\n863.6\n48.5\n87.4\n270.7\n27.8\n1298.0\n863.6\nJun\n492.9\n343.9\n836.8\n48.3\n94.0\n272.9\n31.1\n1283.0\n836.8\nJul\n458.3\n370.6\n828.9\n48.5\n85.8\n277.4\n27.5\n1268.2\n828.9\nAug\n438.4\n386.1\n824.5\n47.6\n73.2\n282.7\n29.9\n1257.9\n824.5\nSep\n498.9\n334.3\n833.2\n43.5\n84.9\n288.4\n35.0\n1285.0\n833.2\nDeposits\nTABLE 9.2 : BUILDING SOCIETIES - LIABILITIES\nUS$ Millions \nAmounts Owing to\n \n \nMONTHLY ECONOMIC REVIEW \n26 \n \n \n \n \nMarket Capitalisation\nIndustrial\nMining\nMarket Turnover(US$) Volume of Shares\nUS$ Millions\n2014\nJan\n189.25\n35.4\n63,972,387.0\n170,104,078\n4,882.1\nFeb\n189.45\n39.24\n25,811,746.9\n135,455,029\n4,906.9\nMar\n176.32\n29.51\n28,884,400.2\n381,649,234\n4,560.3\nApr\n172.91\n29.64\n51,346,054.5\n429,085,166\n4,473.5\nMay\n174.89\n35.45\n35,903,574.8\n235,704,129\n4,485.1\nJun\n186.57\n61.32\n28,544,304.7\n178,469,676\n4,873.4\nJuly\n188.07\n95.00\n25,224,550.4\n322,407,141\n4,959.2\nAug\n196.43\n104.8\n66,399,632.9\n328,161,452\n5,186.6\nSep\n195.25\n92.75\n34,056,010.7\n210,942,393\n5,140.2\nOct\n177.88\n70.38\n28,256,642.5\n156,444,539\n4,664.8\nNov\n171.45\n64.39\n34,765,242.8\n155,854,066\n4,517.9\nDec\n162.79\n71.71\n29,701,204.8\n475,024,051\n4,327.0\n2015\nJan\n164.9\n58.13\n16,062,740.8\n57,390,451\n4,365.1\nFeb\n167.16\n55.38\n34,775,616.2\n119,324,114\n4,353.4\nMar\n158.22\n43.92\n18,903,881.0\n405,884,918\n4,117.1\nApr\n156.23\n42.93\n29,188,562.0\n563,833,853\n4,066.1\nMay\n152.96\n44.45\n23,280,422.2\n290,320,685\n3,978.1\nJun\n148.40\n44.30\n14,514,679.0\n80,441,278\n3,803.8\nJul\n145.35\n39.36\n20,419,108.0\n157,184,218\n3,812.7\nAug\n135.43\n35.34\n15,344,249.0\n76,187,436\n3,552.0\nSep\n131.93\n24.36\n18,202,232.0\n105,678,504\n3,444.5\nIndices\nTable 10: ZIMBABWE STOCK MARKET STATISTICS\n \n \nMONTHLY ECONOMIC REVIEW \n27 \n \n \nCommercial\nBuilding \nEnd of\nBanks\nP.O.S.B.\nSocieties\nTOTAL\n2014\nMay\n1,427.5\n77.5\n669.4\n2,209.0\nJun\n1,495.8\n81.3\n652.3\n2,262.6\nJul\n1,499.5\n84.2\n665.3\n2,282.7\nAug\n1,502.9\n84.0\n695.5\n2,322.9\nSep\n1,573.8\n88.6\n692.4\n2,388.8\nOct\n1,525.0\n87.5\n732.5\n2,378.7\nNov\n1,469.9\n89.8\n768.9\n2,361.8\nDec\n1,473.1\n84.8\n788.4\n2,377.5\n2015\nJan\n1,557.9\n86.3\n770.2\n2,455.2\nFeb\n1,487.7\n90.4\n806.2\n2,384.2\nMar\n1,453.7\n93.6\n794.4\n2,353.9\nApr\n1,573.3\n90.4\n828.9\n2,492.6\nMay\n1,630.6\n89.2\n863.6\n2,583.4\nJun\n1,615.4\n95.1\n836.8\n2,547.3\nJul\n1,622.2\n92.4\n828.9\n2,543.5\nAug\n1,514.0\n93.1\n824.5\n2,431.5\nSep\n1,616.2\n93.1\n833.2\n2,542.5\n1/ Comprises all deposits other than demand deposits.\nTABLE 11 : SAVINGS /1 WITH FINANCIAL INSTITUTIONS\nUS$ Millions\n \n \nMONTHLY ECONOMIC REVIEW \n28 \n \n \n \n \n \n \n \n1/ With effect from 1 August 2011, the prescribed liquid asset ratio was reviewed to 25% of liabilities to the public, from 20%. \n \nLiquid\nPrescribed\nExcess\nLiquid\nPrescribed\nExcess\nassets\nliquid\nliquid\nassets\nliquid\nLiquid\nEnd of\nheld\nassets/1\nassets\nheld\nassets/1\nassets\n2014\nMay\n1,700.6\n1,116.7\n583.9\n1.9\n23.2\n-21.3\nJun\n1,716.1\n1,123.4\n592.7\n1.2\n22.8\n-21.6\nJul\n1,553.7\n1,089.0\n464.7\n0.9\n22.9\n-22.0\nAug\n1,618.6\n1,111.6\n507.0\n1.3\n23.0\n-21.7\nSep\n1,664.2\n1,129.4\n534.7\n1.1\n22.5\n-21.3\nOct\n1,644.7\n1,135.7\n508.9\n1.7\n22.1\n-20.3\nNov\n1,602.2\n1,110.5\n491.7\n1.0\n21.8\n-20.8\nDec\n1,571.0\n1,107.9\n463.1\n1.7\n20.4\n-18.7\n2015\nJan\n1,581.9\n1,084.2\n497.7\n2.0\n24.0\n-22.0\nFeb\n1,524.2\n1,070.2\n454.0\n2.5\n23.6\n-21.2\nMar\n1,543.8\n1,077.9\n465.9\n2.1\n24.2\n-22.1\nApr\n1,528.6\n1,101.6\n427.0\n0.6\n19.2\n-18.6\nMay\n1,779.2\n1,128.7\n650.4\n0.6\n19.2\n-18.5\nJun\n1,962.4\n1,148.6\n813.8\n0.7\n18.9\n-18.2\nJul\n1,900.7\n1,136.6\n764.1\n2.0\n18.9\n-16.9\nAug\n1,925.3\n1,134.2\n791.0\n2.0\n18.9\n-16.9\nSep\n1,949.4\n1,167.9\n781.6\n2.5\n18.6\n-16.1\nUS$ Millions\nTABLE 12 : ANALYSIS OF LIQUID ASSETS OF MONETARY BANKS \nCommercial Banks\n Accepting Houses\n \n \nMONTHLY ECONOMIC REVIEW \n29 \n \n \nMONTH \nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2014\nJan\n3093.01\n5.24\n102.26\n233.1\n228.25\n68.31\nFeb\n2954.93\n10.73\n96.27\n193.9\n217.14\n64.42\nMar\n3332.79\n10.4\n103.58\n232.94\n255.32\n87.94\nApr\n3439.33\n9.66\n126.26\n253.16\n264.38\n96.29\nMay\n3915.31\n13.65\n117.11\n181.35\n146.64\n121.98\nJun\n3657.44\n12.42\n110.38\n250.87\n284.18\n104.28\nJul\n3955.45\n11.72\n125.81\n267\n312.35\n101.75\nAug\n3467.34\n9.36\n135.9\n273.39\n320.36\n103.26\nSep\n4037.98\n11.16\n138.09\n280.8\n341.23\n115.94\nOct\n3843.84\n13.58\n150.09\n291.68\n362.30\n117.40\nNov\n4104.33\n9.33\n160.40\n299.94\n358.76\n103.76\nDec\n4615.04\n11.53\n148.5\n336.65\n395.93\n124.33\nAnnual Total\n44416.79\n128.78\n1514.646\n3094.779\n3486.839\n1209.657\n2015\nJan\n3659.00\n11.81\n154.43\n311.94\n352.18\n113.46\nFeb\n3221.13\n13.69\n141.79\n275.8\n334.62\n104.62\nMar\n3801.96\n11.11\n131.97\n298.30\n364.69\n111.70\nApr\n3919.47\n10.81\n133.99\n299.67\n341.22\n112.38\nMay\n3467.10\n13.08\n128.76\n316.66\n389.97\n124.5\nJun\n3014.73\n15.35\n123.53\n333.65\n438.72\n136.62\nJul\n4010.26\n12.64\n154.61\n332.37\n391.04\n128.61\nAug\n3299.06\n11.39\n193.36\n313.18\n391.19\n133.55\nSep\n3762.74\n12.93\n131.89\n318.75\n396.28\n396.28\nTABLE 13.1 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY\nValues of Transactions (US$ millions)\n \n \nMONTHLY ECONOMIC REVIEW \n30 \n \n \nMONTH \nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2014\nJan\n182.48\n29.41\n973.79\n815.89\n11141.19\n24.19\nFeb\n175.09\n32.95\n991.91\n799.12\n10631.6\n25.1\nMar\n192.02\n32.35\n1163.76\n947.64\n12859.5\n30.82\nApr\n183.63\n28.12\n1184.85\n974.37\n13298.04\n29.23\nMay\n215.2\n37.09\n954.18\n793.43\n12146.9\n38.68\nJun\n193.58\n32.98\n1164.73\n966.45\n14163.56\n34.25\nJul\n199.59\n34.34\n1272.91\n1038.44\n15370.63\n37.68\nAug\n170.86\n27.25\n1300.35\n1122.41\n16268.07\n33.84\nSep\n197.88\n30.39\n1158.84\n1057.48\n15991.79\n39.35\nOct\n200.32\n34.58\n1193.38\n1086.16\n17527.40\n40.96\nNov\n171.45\n27.66\n1143.69\n1077.30\n17876.31\n42.01\nDec\n189.83\n27.49\n1161.59\n1162.71\n19347.91\n40.49\nAnnual Total\n2271.926\n374.61\n13663.98\n11841.396\n176622.897\n416.599\n2015\nJan\n170.77\n29.55\n1174.09\n1124.49\n16903.26\n37.60\nFeb\n172.25\n32.23\n1140.94\n1027.88\n16160.42\n39.94\nMar\n191.64\n30.33\n1183.64\n1110.17\n18211.89\n44.48\nApr\n180.34\n26.98\n1151.25\n1107.52\n17269.69\n43.55\nMay\n179.76\n27.38\n1052.50\n1123.77\n18684.62\n43.22\nJun\n196.41\n31.85\n1121.24\n1038.18\n17478.24\n47.17\nJul\n199.10\n34.00\n1288.23\n1167.43\n18670.44\n49.36\nAug\n153.13\n28.05\n1373.48\n1122.22\n19750.59\n46.52\nSep\n164.31\n31.15\n1196.87\n1103.91\n19133.21\n50.40\nTABLE 13.2 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY\nVolumes of Transactions (in thousands)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/MPC_Statements/September2015.pdf"}
{"doc_id": "7fc663f9d10122b4719f5bc73ebc904c", "text": "Vol. 26 No. 5 \n \n \nWeek Ending \n2nd February 2024 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 3 \n3. \nEQUITY MARKETS .............................................................. 5 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 7 \n5. \nPRICES .................................................................................... 8 \n6. \nMOSI-OA-TUNYA GOLD COINS AND GOLD BACKED \nDIGITAL TOKENS ................................................................ 8 \n7. \nEXTERNAL SECTOR ......................................................... 10 \n8. \nFOREIGN EXCHANGE AUCTION .................................. 11 \n \n \n 1 \n1. OVERVIEW \n \n \nThe week ending 2nd February 2024 saw the reintroduction of duty on essential commodities \nsuch as mealie-meal, cooking oil, sugar, washing soap, and washing powder by Government. \nDuty on these commodities was previously repealed by the Government in May 2023 amid \nshortages in the shops which was fuelling inflation. Domestic industries are now producing these \nessential commodities at competitive prices, thus underlining the need for Government to re-\nintroduce the duty to promote the consumption of products by domestic industries. \n \nThe interbank market exchange rate depreciated marginally from ZW$9,811.17 per US$ at the \nbeginning of the week to ZW$10,501.47 per US$ at the end of the week, while the parallel market \nexchange rate remained unchanged leading to the narrowing of the exchange rate premium from \n50.1% in the previous week to 42.8% during the week under review. \n \nDeposit rates remained largely unchanged during the week under review for both local currency \nand foreign currency deposit rates, save for local currency minimum deposit rates for 1-month \ntenor which registered a marginal increase of 0.28 percentage points from 54.28% in the previous \nweek to 54.56% during the reporting week. \n \nLocal currency lending rates recorded a weekly marginal decline for both individuals and \ncorporates, from 70.18% and 95.24% to 69.23% and 93.67%, respectively. Notably, foreign \ncurrency lending rates for individuals marginally declined by 0.01 percentage points, from \n10.75% to 10.74%, while rates applicable to corporate clients increased marginally by 0.04 \npercentage points from 8.29%, in the previous week to 8.33%, during the reporting week. \n \nTrading on the Zimbabwe Stock Exchange (ZSE) was bullish as reflected by the increase in the \nvolume of shares. Concomitantly, the market gained 36.57%, or ZW$12,671.43 billion worth of \ncapitalization to end the week at ZW$47,316.74 billion. The increase was mainly observed across \nall counters. The cumulative value and volume of shares traded increased by 93.27% and 55.47% \nto ZW$68,964.42 million and 23.14 million shares, respectively. \n \nThe Victoria Falls Stock Exchange (VFEX) was also bullish reflecting an increase of 3.97% in \ncapitalisation to close at US$1.24 billion. The VFEX volume and value of shares traded declined \nby 58.75% and 10.87% to 2.15 million shares and US$0.52 million, respectively. \n \n 2 \n \nThe aggregate transactions processed in value terms through the National Payment Systems \n(NPS) platforms was ZW$8.78 trillion, representing an increase of 1.88% from the previous \nweek. The increase in NPS transactions was largely attributable to increased economic activity \nin the country. \n \nInternational commodity prices were quite mixed with gold, platinum, palladium, and copper \nrallying whilst nickel, lithium, and crude oil prices declined. Gold and platinum prices rose as \ninvestors-maintained optimism regarding the U.S. Federal Reserve's substantial reduction in \ninterest rates. Additionally, the demand for palladium improved, resulting in a price rise. Lithium \nprices declined due to lower-than-expected demand for electric vehicles. On the other hand, \ncopper prices rose by 0.85% on the anticipation that China, a leading consumer of metals, would \nimplement additional measures to stabilise its economy and stock markets. Energy prices \nretreated during the week under analysis underpinned by faltering growth in China and the \npossibility of some easing of tensions in the Middle East. \n \nThe key financial and monetary statistics including graphs are shown in the annex below. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 3 \n2. INTEREST RATES \n \nPolicy rates \nPolicy Rate \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \n \n \n \n \n \nRBZ Policy Rate \n130 \n130 \n130 \n130 \nMBA window \n75 \n75 \n75 \n75 \nSource: Reserve Bank of Zimbabwe \n \n \nAverage commercial bank deposit rates \nZWL Deposit rates \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \n \n \n \n \n \nSavings \n \n \n \n \nMinimum \n33.75 \n33.75 \n33.75 \n33.75 \nMaximum \n37.13 \n37.13 \n37.13 \n37.13 \n1-month deposit \n \n \n \n \nMinimum \n54.28 \n54.28 \n54.28 \n54.56 \nMaximum \n64.50 \n64.50 \n64.50 \n65.06 \n3-month deposit \n \n \n \n \nMinimum \n56.18 \n56.06 \n56.06 \n56.06 \nMaximum \n65.65 \n65.65 \n65.65 \n65.65 \n6-month deposit \n \n \n \n \nMinimum \n54.03 \n54.03 \n54.03 \n54.03 \nMaximum \n65.43 \n65.43 \n65.43 \n65.43 \n12-Month deposits \n \n \n \n \nMinimum \n54.20 \n54.20 \n54.20 \n54.20 \nMaximum \n65.57 \n65.57 \n65.57 \n65.57 \nOver 1 year \n \n \n \n \nMinimum \n54.47 \n54.47 \n54.47 \n54.47 \nMaximum \n66.07 \n66.07 \n66.07 \n66.07 \nSource: Reserve Bank of Zimbabwe \n \n \nUS$ Deposit rates \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \nSavings \n \n \n \n \nMinimum \n1.32 \n1.32 \n1.32 \n1.32 \nMaximum \n1.82 \n1.82 \n1.82 \n1.82 \n1-month deposits \n \n \n \n \nMinimum \n3.09 \n3.09 \n3.09 \n3.09 \nMaximum \n4.74 \n4.74 \n4.74 \n4.74 \n3-month deposits \n \n \n \n \nMinimum \n3.34 \n3.34 \n3.34 \n3.34 \nMaximum \n5.17 \n5.17 \n5.17 \n5.17 \n6-month deposits \n \n \n \n \nMinimum \n3.46 \n3.46 \n3.46 \n3.46 \nMaximum \n5.46 \n5.46 \n5.46 \n5.46 \n12-Month deposits \n \n \n \n \nMinimum \n3.67 \n3.67 \n3.67 \n3.67 \nMaximum \n5.75 \n5.75 \n5.75 \n5.75 \nOver 1 year \n \n \n \n \nMinimum \n3.80 \n3.80 \n3.80 \n3.80 \nMaximum \n5.75 \n5.75 \n5.75 \n5.75 \nSource: Reserve Bank of Zimbabwe \n \n \n 4 \n \nCommercial bank weighted lending rates (Local Currency (ZW$)) \nZWL Lending rates \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \nIndividuals \n \n \n \n \nMinimum \n69.89 \n70.14 \n70.18 \n69.23 \nMaximum \n101.34 \n100.51 \n100.81 \n98.36 \n \n \n \n \n \nCorporates \n \n \n \n \nMinimum \n95.43 \n95.14 \n95.24 \n93.67 \nMaximum \n165.38 \n165.37 \n164.86 \n164.31 \nSource: Reserve Bank of Zimbabwe \n \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) \nUS$ Lending rates \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \nIndividuals \n \n \n \n \nMinimum \n10.84 \n10.82 \n10.75 \n10.74 \nMaximum \n13.56 \n13.56 \n13.61 \n13.62 \n \n \n \n \n \nCorporates \n \n \n \n \nMinimum \n8.34 \n8.28 \n8.29 \n8.33 \nMaximum \n14.09 \n14.20 \n14.14 \n14.15 \nSource: Reserve Bank of Zimbabwe \n \n \n \nBuilding societies mortgage lending rates \nMortgage Lending \nrates \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \nZW$ Lending rates \n \n \n \n \nMinimum \n40.00 \n40.00 \n40.00 \n40.00 \nMaximum \n105.00 \n105.00 \n105.00 \n105.00 \n \n \n \n \n \nUS$ Lending rates \n \n \n \n \nMinimum \n8.00 \n8.00 \n8.00 \n8.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 5 \n3. EQUITY MARKETS \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \n \nTop 10 \nindex \n(points) \nTop 15 \nIndex \n(points) \nMedium \nCap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket \nCap (ZWL \nbillion) \nMarket \nTurnover \n(ZWL \nmillion) \nVolume \nof \nShares \n(million\n) \n12-Jan-24 \n266,752.43 \n \n119,063.8 \n159,390.34 \n1,013,481.28 \n5,482,815.60 \n163,733.73 \n21,461.11 \n17,534.81 \n21.32 \n19-Jan-24 \n330,362.83 \n150,496.3 \n200,543.55 \n1,142,891.53 \n5,622,095.52 \n163,733.73 \n26,873.26 \n23,291.38 \n23.27 \n26-Jan-24 \n429,924.86 \n193,020.96 \n261,129.96 \n1,506,962.42 \n9,939,773.26 \n187,716.59 \n34,645.31 \n35,682.43 \n14.89 \n02-Feb-24 \n584,266.23 \n261,619.92 \n351,519.56 \n2,043,762.44 \n9,947,030.87 \n163,733.73 \n47,316.74 \n68,964.42 \n23.14 \n% Change \n35.90 \n35.54 \n34.61 \n35.62 \n0.07 \n-12.78 \n36.57 \n93.27 \n55.41 \n \nSource: Zimbabwe Stock Exchange, (ZSE) \n \n \nVFEX Indicators \nDate \nAll Share Index Points \nGrand Market \nCapitalization \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares \n(million) \n12-Jan-24 \n96.00 \n1.16 \n1.38 \n3.98 \n19-Jan-24 \n95.81 \n1.16 \n1.48 \n4.92 \n26-Jan-24 \n98.68 \n1.19 \n0.58 \n5.21 \n02-Feb-24 \n102.59 \n1.24 \n0.52 \n2.15 \n% Change \n3.97 \n4.20 \n-10.34 \n-58.73 \n \nSource: Zimbabwe Stock Exchange, (ZSE) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 6 \nSource: Zimbabwe Stock Exchange \n \n \n \n \nSource: Zimbabwe Stock Exchange, (ZSE) \n \n \n0\n200000\n400000\n600000\n800000\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\n08-Dec-23\n22-Dec-23\n05-Jan-24\n19-Jan-24\n02-Feb-24\nIndices\nZSE Indices \nIndex All Share Index (ZSE) Top 10 Index\nAll Share Index (ZSE)\n0.00\n10,000.00\n20,000.00\n30,000.00\n40,000.00\n50,000.00\n60,000.00\n70,000.00\n80,000.00\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\n08-Dec-23\n22-Dec-23\n05-Jan-24\n19-Jan-24\n02-Feb-24\nZW$ Mililon\nZSE Market Turnover \n0\n5,000\n10,000\n15,000\n20,000\n25,000\n30,000\n35,000\n40,000\n45,000\n50,000\n10-Nov-23\n24-Nov-23\n08-Dec-23\n22-Dec-23\n05-Jan-24\n19-Jan-24\n02-Feb-24\nZW$ ililon\nZSE Market Capitalisation \n \n0\n20\n40\n60\n80\n100\n120\n140\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\n08-Dec-23\n22-Dec-23\n05-Jan-24\n19-Jan-24\n02-Feb-24\nZW$ Bililon\nVFEX All Share Index \n \n0\n200\n400\n600\n800\n1000\n1200\n1400\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\n08-Dec-23\n22-Dec-23\n05-Jan-24\n19-Jan-24\n02-Feb-24\nUS$ Thousand\nVFEX Market Turnover \n800\n1000\n1200\n1400\n1600\n1800\n2000\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\n08-Dec-23\n22-Dec-23\n05-Jan-24\n19-Jan-24\nUS$ Mililon\nVFEX Market Capitalisation \n \n 7 \n4. CLEARING AND SETTLEMENT ACTIVITY \n \n \n \n \n \n Source: Reserve Bank of Zimbabwe \n \nRTGS SYSTEM TRANSACTIONAL ACTIVITIES \n \nCurrency \n \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \nValues \nZW$ \n2,838,455,592,780.05 \n2,585,839,872,008.14 \n2,819,185,925,710.95 \n2,825,824,995,374.92 \nUSD \n455,040,125.62 \n463,595,625.58 \n469,427,445.30 \n410,420,705.48 \nVolumes \nZW$ \n107,920 \n86,305 \n141,513 \n131,446 \nUSD \n69,177 \n78,063 \n136,380 \n119,287 \nSource: Reserve Bank of Zimbabwe \n \n \n \n \n \n \n \n \nRTGS\n79.56%\nPOS\n6.31%\nATM\n6.75%\nMOBILE\n7.38%\nNPS Values (%)\nRTGS\nPOS\nATM\nMOBILE\nRTGS, \n1.92%\nPOS, \n14.48%\nATM, \n1.52%\nMOBILE,\n82.08%\nNPS Volumes (%)\nRTGS\nPOS\nATM\nMOBILE\nPAYMENT \nSTREAM \nWEEK \nENDING \n26 JANUARY 2024 \nWEEK \nENDING \n02 FEBRUARY \n 2024 \n% \nCHAN\nGE \nFROM \nLAST \nWEEK \n \n VALUES IN ZW$ \n \n \nRTGS \n7,214,303,879,661.74 \n6,985,259,525,287.49 \n-3.17% \n \nPOS \n508,365,467,266.37 \n553,786,476,606.63 \n8.93% \n \nATM \n405,275,073,228.61 \n592,894,409,824.54 \n46.29% \n \nMOBILE \n489,889,611,015.16 \n647,725,307,699.92 \n32.22% \n \nTOTAL \n8,617,834,031,171.87 \n8,779,665,719,418.58 \n1.88% \n \nVOLUMES \n \n \n \nRTGS \n277,893 \n250,733 \n-9.77% \n \nPOS \n1,769,214 \n1,890,462 \n6.85% \n \nATM \n225,965 \n198,313 \n-\n12.24% \n \nMOBILE \n10,149,545 \n10,714,386 \n5.57% \nTOTAL \n12,422,617 \n13,053,894 \n5.08% \n \n 8 \n5. PRICES \nDomestic Energy Prices \nEnergy prices \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \n \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.66 \n1.66 \n1.66 \n1.66 \nPetrol Blend E20/ \nlitre \n1.57 \n1.57 \n1.57 \n1.57 \nLP Gas / kg \n1.85 \n1.85 \n1.85 \n1.85 \nSource: ZERA \n \nInternational Energy Prices \n Energy prices \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \n \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n78.41 \n78.37 \n84.02 \n80.01 \nSource: KITCO \n \n6. MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \nPrevious day Gold PM Fix \nGold prices \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \n \nUS$ \nUS$ \nUS$ \nUS$ \nGold PM Fix \n2,029.15 \n2,013.20 \n2,023.75 \n2,045.85 \nSource: LBMA, (2023) \n \n \nGold Backed Digital Token Price Per Milligram \nZIG \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \nUS$ Price \n \n \n \n \nBuy \n0.0620 \n0.0615 \n0.0618 \n0.0625 \nSell \n0.0685 \n0.0680 \n0.0683 \n0.0691 \n \n \n \n \n \nZW$ Price \n \n \n \n \nBuy \n568.00 \n608.74 \n656.77 \n721.82 \nSell \n627.79 \n672.82 \n725.90 \n797.80 \n \n \n \n \n \nSource: Reserve Bank of Zimbabwe \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 9 \nRBZ Gold-Backed Digital Tokens Issuances (ZW$) \nIssuance \nDate \nNumber of Bids \nReceived \nValue of Bids \nReceived ZW$ \nAmount Allotted \nMilligrams of \nGold Purchased \nGBDT Issue No.2 2023 \n18 May 2023 \n104 \n8,063,137,030.20 \n8,063,137,030.20 \n71,608,677.00 \nGBDT Issue No.3 2023 \n26 May 2023 \n105 \n8,500,033,262.87 \n8,500,033,262.87 \n55,752,547.00 \nGBDT Issue No.4 2023 \n01 Jun 2023 \n59 \n4,516,617,361.08 \n4,516,617,361.08 \n21,736,452.00 \nGBDT Issue No.5 2023 \n08 Jun 2023 \n61 \n7,214,378,572.80 \n7,214,378,572.80 \n18,593,280.00 \nGBDT Issue No.6 2023 \n15 Jun 2023 \n33 \n3,089,515,827.98 \n3,089,515,827.98 \n6,519,754.00 \nGBDT Issue No.7 2023 \n22 Jun 2023 \n28 \n3,513,066,006.15 \n3,513,066,006.15 \n7,181,981.00 \nGBDT Issue No.8 2023 \n29 Jun 2023 \n26 \n246,566,974.53 \n246,566,974.53 \n552,333.00 \nGBDT Issue No.9 2023 \n06 Jul 2023 \n13 \n715,192,886.72 \n715,192,886.72 \n1,848,808.00 \nGBDT Issue No.10 2023 \n13 Jul 2023 \n7 \n480,100,767.10 \n480,100,767.10 \n1,326,903.00 \nGBDT Issue No.11 2023 \n20 Jul 2023 \n8 \n79,213,519.60 \n79,213,519.60 \n227,240.00 \nGBDT Issue No.12 2023 \n03 Aug 2023 \n13 \n1,324,391,563.88 \n1,324,391,563.88 \n4,045,426.00 \nGBDT Issue No.13 2023 \n17 Aug 2023 \n5 \n76,188,769.88 \n76,188,769.88 \n235,383.00 \nGBDT Issue No.14 2023 \n31 Aug 2023 \n9 \n236,096,047.44 \n236,096,047.44 \n708,444.00 \nGBDT Issue No.15 2023 \n14 Sep 2023 \n13 \n827,384,866.85 \n827,384,866.85 \n2,469,437.00 \nGBDT Issue No.16 2023 \n28 Sep 2023 \n15 \n6,994,496,978.64 \n6,994,496,978.64 \n17,524,797.00 \nGBDT Issue No.17 2023 \n12 Oct 2023 \n27 \n659,093,773.50 \n659,093,773.50 \n1,683,509.00 \nGBDT Issue No.18 2023 \n18 Oct 2023 \n21 \n9,183,393,634.78 \n9,183,393,634.78 \n21,891,805.00 \nGBDT Issue No.19 2023 \n09 Nov 2023 \n25 \n8,423,667,169.62 \n8,423,667,169.62 \n20,173,066.00 \nGBDT Issue No.20 2023 \n23 Nov 2023 \n9 \n1,176,397,735.70 \n1,176,397,735.70 \n2,745,706.00 \nGBDT Issue No.21 2023 \n07 Dec 2023 \n23 \n6,168,618,540.84 \n6,168,618,540.84 \n14,059,209.00 \nGBDT Issue No.22 2023 \n21 Dec 2023 \n19 \n16,539,795,407.70 \n16,539,795,407.70 \n36,865,698.00 \nGBDT Issue No.1 2024 \n11 Jan 2024 \n27 \n29,100,343,075.02 \n29,100,343,075.02 \n46,921,658.00 \nGBDT Issue No.2 2024 \n25 Jan 2024 \n45 \n52,175,517 ,472.20 \n52,175,517,472.20 \n70,054,491.00 \nGBDT Issue No.3 2024 \n30 Jan 2024 \n4 \n5,020,259,722.44 \n5,020,259,722.44 \n6,702,348.00 \nGBDT Issue No.4 2024 \n31 Jan 2024 \n7 \n2,139,997,019.01 \n2,139,997,019.01 \n2,778,387.00 \nGBDT Issue No.5 2024 \n1 Feb 2024 \n13 \n17,654,646,647.52 \n17,654,646,647.52 \n22,447,674.00 \nGBDT Issue No.6 2024 \n 2 Feb 2024 \n11 \n13,753,505,562.00 \n13,753,505,562.00 \n17,239,290.00 \nSource: Reserve Bank of Zimbabwe \n \nRBZ Gold-Backed Digital Tokens Issuances (US$) \nIssuance \nDate \nNumber of Bids \nReceived \nValue of Bids \nReceived US$ \nAmount Allotted \nMilligrams of \nGold Purchased \nGBDT Issue No.1 2023 \n12 May 2023 \n \n810 \n810 \n11,733.00 \nGBDT Issue No.2 2023 \n18 May 2023 \n2 \n2,099.98 \n2,099.98 \n31,484 \nGBDT Issue No.3 2023 \n26 May 2023 \n2 \n244.97 \n244.97 \n3,723 \nGBDT Issue No.4 2023 \n01 Jun 2023 \n0 \n0 \n0 \n0 \nGBDT Issue No.5 2023 \n08 Jun 2023 \n1 \n204.98 \n204.98 \n3,087.00 \nGBDT Issue No.6 2023 \n15 Jun 2023 \n2 \n4,199.98 \n4,199.98 \n63,636.00 \nGBDT Issue No.7 2023 \n22 Jun 2023 \n0 \n0 \n0 \n0 \nGBDT Issue No.8 2023 \n29 Jun 2023 \n2 \n155.01 \n155.01 \n2,407.00 \nGBDT Issue No.9 2023 \n06 Jul 2023 \n2 \n79.95 \n79.95 \n1,230.00 \nGBDT Issue No.10 2023 \n13 Jul 2023 \n0 \n0 \n0 \n0 \nGBDT Issue No.11 2023 \n20 Jul 2023 \n0 \n0 \n0 \n0 \nGBDT Issue No.12 2023 \n03 Aug 2023 \n2 \n3,200.00 \n3,200.00 \n299.9448,779.00 \nGBDT Issue No.13 2023 \n17 Aug 2023 \n0 \n0 \n0 \n0 \nGBDT Issue No.14 2023 \n31 Aug 2023 \n0 \n0 \n0 \n0 \nGBDT Issue No.15 2023 \n14 Sep 2023 \n1 \n299.94 \n299.94 \n4,643.00 \nGBDT Issue No.16 2023 \n28 Sep 2023 \n1 \n8,216.73 \n8,216.73 \n128,991.00 \nGBDT Issue No.17 2023 \n12 Oct 2023 \n0 \n0 \n0 \n0 \nGBDT Issue No.18 2023 \n18 Oct 2023 \n2 \n310 \n310 \n4,627 \nGBDT Issue No.19 2023 \n09 Nov 2023 \n1 \n201.94 \n201.94 \n3,055 \nGBDT Issue No.20 2023 \n23 Nov 2023 \n0 \n0 \n0 \n0 \nGBDT Issue No.21 2023 \n07 Dec 2023 \n1 \n499.94 \n499.94 \n7,309.00 \nGBDT Issue No.22 2023 \n21 Dec 2023 \n1 \n165.98 \n165.98 \n2,416 \nGBDT Issue No.3 2024 \n30 Jan 2024 \n1 \n19.94 \n19.94 \n292 \nSource: Reserve Bank of Zimbabwe \n \n \n10 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin Price \n12 Jan 2024 \n19 Jan 2024 \n26 Jan 2024 \n02 Feb 2024 \n1.00Oz \n \n \n \n \nUS$ \n2,130.61 \n2,113.86 \n2,124.94 \n2,148.14 \nZW$ \n19,526,554.67 \n20,927,050.54 \n22,578,108.38 \n24,814,522.97 \n0.50Oz \n \n \n \n \nUS$ \n1,065.30 \n1,056.93 \n1,062.47 \n1,074.07 \nZW$ \n9,763,277.34 \n10,463,525.27 \n11,289,054.19 \n12,407,261.48 \n0.25Oz \n \n \n \n \nUS$ \n532.65 \n528.47 \n531.23 \n537.04 \nZW$ \n4,881,638.67 \n5,231,762.63 \n5,644,527.10 \n6,203,630.74 \n0.10Oz \n \n \n \n \nUS$ \n213.06 \n211.39 \n212.49 \n214.81 \nZW$ \n1,952,655.47 \n2,092,705.05 \n2,257,810.84 \n2,481,452.30 \nSource: Reserve Bank of Zimbabwe \n \n7. EXTERNAL SECTOR \nInternational commodity price developments \n \nPlatinum \nPalladium \nNickel \nLithium \n2024 \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n (22-26 Jan) \n903.20 \n942.60 \n16,479.00 \n14,175.60 \n29-Jan \n917.50 \n962.00 \n16,285.00 \n13680.00 \n30-Jan \n927.50 \n985.00 \n16,508.00 \n13,500.00 \n31-Jan \n925.50 \n977.50 \n16,269.00 \n13,320.00 \n1-Feb \n911.50 \n963.00 \n16,230.00 \n13,230.00 \n2-Feb \n912.00 \n938.50 \n16,150.00 \n13,250.00 \nWeekly Average \n (29 Jan - 2 Feb) \n919.82 \n967.32 \n16,299.99 \n13,601.63 \nSource: KITCO \n \nExchange Rate Developments \n2024 \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(22 Jan– 26 Jan) \n9,385.3951 \n502.8241 \n11,931.7976 \n686.8388 \n10,208.1764 \n29-Jan \n9,811.1683 \n526.3158 \n12,460.7022 \n722.2699 \n10,635.4183 \n30-Jan \n9,973.2760 \n555.5556 \n12,675.5617 \n734.1923 \n10798.1721 \n31-Jan \n10,152.3933 \n555.5556 \n12,870.8909 \n745.3522 \n10,985.0005 \n1-Feb \n10,315.0938 \n555.5556 \n13,073.4610 \n761.4206 \n11,143.5070 \n2-Feb \n10,501.4715 \n588.2353 \n13,387.8296 \n775.1808 \n11,422.5654 \nWeekly Average \n(29 Jan – 2 Feb) \n10,150.6806 \n556.2434 \n12,893.6891 \n747.5167 \n10,996.8217 \nAppr (-)/Depr \n(+) (%) of the \nZWL \n8.2 \n10.6 \n8.1 \n8.8 \n7.7 \nSource: Reserve Bank of Zimbabwe \n \n \n11 \n8. FOREIGN EXCHANGE AUCTION \nForeign Exchange Auction Results for Wholesale FX1 \nSource: Reserve Bank of Zimbabwe \n \nSummary of Foreign Currency Auction Allotments by Purpose \nSource: Reserve Bank of Zimbabwe \n \n1 Wholesale Foreign Currency Auction (Wholesale FX) is normally conducted on Tuesday every week. The RBZ MPC resolutions dated 6 June \n2023 resolved that with effect from 7 June 2023, the Bank shall sell foreign currency at the market-determined exchange rate through banks to \nsupport and strengthen the foreign exchange interbank market, and banks shall in turn sell the foreign currency to their customers. \n \n21-Nov-23 \n28-Nov-23 \n05-Dec-23 \n12-Dec-23 \n% change \nfrom Last \nWeek \nTotal \nBids (US$ dollars) \n17,309,350.08 \n16,695,652.00 \n15,760,508.00 \n17,787,837.86 \n12.8 \nAmount Allotted (US$ \ndollars) \n17,309,350.08 \n14,533,152.00 \n14,260,508.00 \n17,787,837.86 \n24.73 \nHighest Rate \n5,792.00 \n5,820.67 \n5,910.55 \n6225.00 \n5.32 \nLowest Bid Rate Allotted \n5,760.00 \n5,785.00 \n5,800.00 \n5850.00 \n0.86 \nWeighted Average Rate \n5,774.28 \n5,790.05 \n5,827.80 \n5,903.39 \n1.30 \nNumber of Bids Received \n18 \n18 \n19 \n20 \n5.26 \nNumber of Bids Rejected \n0 \n0 \n0 \n0 \n- \n21-Nov-23 \n28-Nov-23 \n5-Dec-23 \n12-Dec-23 \n% change from \nLast Week \nRaw Materials \n866,444.48 \n780,641.97 \n919,863.74 \n569,417.23 \n-38.10 \nMachinery and \nEquipment \n586,565.83 \n650,261.27 \n361,166.34 \n402,144.32 \n11.35 \nConsumables \n(Incl. Spares, \nTyres, \nPackaging) \n113,022,49 \n244,314.16 \n306,216.66 \n250,058.99 \n-18.34 \nPharmaceuticals \nand Chemicals \n28,937,82 \n71,124.40 \n77,799.20 \n51,871.95 \n-33.33 \nServices (Loans, \nDividends and \nDisinvestments) \n298,514.91 \n212,328.45 \n276,912.54 \n122,696.30 \n-55.69 \nRetail and \nDistribution \n200,761.39 \n218,499.07 \n333,353.73 \n141,160.54 \n-57.65 \nFuel, Electricity \nand Gas \n- \n- \n- \n- \n- \nPaper and \nPackaging \n20,011.84 \n- \n65,383.88 \n31,203.28 \n-52.28 \nTOTAL \n2,114,258.76 \n2,177,119.32 \n2,340,696.09 \n1,568,498.61 \n-32.99", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_2_February_2024_Volume_26_Number_5.pdf"}
{"doc_id": "0dc7093af0a8afcec455147c0fa3bbfb", "text": "i \n \n \n \nJULY 2023 \n \n2 \nTABLE OF CONTENTS \n \nOVERVIEW .................................................................................................................................. 3 \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ........................................... 3 \nMERCHANDISE TRADE DEVELOPMENTS......................................................................... 5 \nSTOCK MARKET DEVELOPMENTS ..................................................................................... 9 \nZIMBABWE STOCK EXCHANGE (ZSE) ............................................................................... 9 \nNATIONAL PAYMENTS SYSTEM ........................................................................................ 11 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ............................................. 11 \nMobile and Internet Based Transactions .............................................................................. 11 \nINFLATION OUTTURN ........................................................................................................... 11 \nMonthly Inflation .................................................................................................................... 12 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3 \n \nOVERVIEW \n \nThe annual headline inflation rate decreased \nfrom 175.8% in June 2023 to 101.3% in July \n2023. Month-on-month inflation also declined \nfrom 74.5% to minus 15.3% during the same \nmonth. The decrease in inflation is largely \nattributable to the appreciation of the exchange \nrate during the month. \n \nOn a month-on-month basis, broad money \ndeclined by 8.91% in July 2023, compared to \nan increase of 7.20% in June 2023. The decline \nin money supply partly reflected a decrease of \nZW$10,099.33 billion in foreign currency \naccounts (FCAs) deposits largely on account of \nthe appreciation of the exchange rate from \nZW$5,740/USD in June to ZW$4,516/USD in \nJuly 2023. \n \nThe international prices for gold, copper, and \nBrent crude oil increased in July 2023, while \nthose for platinum, palladium and nickel \ndeclined during the same month. \n \nThe \ncountry’s \ntotal \nmerchandise \ntrade \namounted to US$1,386.1 million in July 2023, \nrepresenting a 1.3% increase from US$1,368.9 \nmillion recorded in the previous month. On a \nyearly basis, total merchandise trade rose by \n8.6%, from US$1,276.1 million in the \ncorresponding month in 2022 to US$1,386.1 \nmillion in the reporting month. \n \nThe \nZimbabwe \nStock \nExchange \n(ZSE) \nexhibited bearish sentiments. The All Share, \nTop 10 and Top 15 indices declined by 33.06%, \n44.27% and 39.16%, respectively during the \nmonth. \n \nThe value of transactions processed through the \nNational Payment Systems (NPS) increased by \n3% to close the month of July at ZWL$27.13 \ntrillion. In volume terms, NPS transactions, \nhowever, declined by 7% to close the month at \n54.59 million in July 2023. \n \nINTERNATIONAL COMMODITY PRICE \nDEVELOPMENTS \n \nThe monthly average prices for gold, copper, \nand Brent crude oil increased, while those for \nplatinum, palladium and nickel declined. \n \nPrecious Metals \n \n Gold \nGold prices averaged US$1,949.21 per ounce \nin July 2023, a marginal increase of 0.60% \nfrom a monthly average of US$1,937.51 per \nounce in the previous month. A weaker US \ndollar \nsupported \nprecious \nmetal \nprices, \nfollowing speculation that the US Federal \nReserve intended to end its tight monetary \npolicy stance. \n \n Platinum \nPlatinum prices fell by 2.60%, from an average \nof US$972.80 per ounce in the previous month, \n \n \n \n4 \n \nto close the month under review at US$947.48 \nper ounce. The price decline was underpinned \nby weaker-than-expected economic growth in \nChina, which affected the demand for the \nprecious metal. \n \n \nPalladium \nPalladium prices fell by 5.25%, from a monthly \naverage of US$1,330.98 per ounce in June 2023 \nto US$1,261.16 per ounce during the reporting \nmonth. This was mainly attributed to weak \nglobal industrial demand, particularly in the \nautomotive industry. Figure 1 shows the \nprecious metal price developments for the \nperiod from July 2020 to July 2023. \n \nFigure 1: Precious Metal Prices (US$/oz.) \nSource: Bloomberg, 2023 \n \nBase Metals \n \n \nCopper \nCopper prices continued to increase largely on \naccount of demand recovery in China following \nthe announcement of additional stimulus \nmeasures to boost the country’s economy. The \nprice of copper increased by 1.27%, from \nUS$8,393.20 per tonne in the previous month \nto US$8,499.90 per tonne in July 2023. \n \nNickel \nNickel prices continued on a negative trajectory \nduring the month, falling by 0.63% from an \naverage of US$21,449.27 per tonne recorded in \nthe prior month, to US$21,313.10 per tonne in \nJuly 2023. The decline was driven by weak \ndemand prospects in China, the world's largest \nproducer and consumer of stainless steel, and \nEurope. Figure 2 shows the base metals price \ndevelopments from July 2020 to July 2023. \n \nFigure 2: Base Metal Prices (US$/ton) \nSource: Bloomberg, 2023 \n \nBrent Crude Oil \n \nOil prices rebounded by 6.81%, from an \naverage of US$74.90 per barrel in June 2023 to \nUS$80.00 per barrel in July 2023. Prices rose \ndue to supply constraints following output cuts \nin key producing countries such as Russia and \n0.00\n200.00\n400.00\n600.00\n800.00\n1000.00\n1200.00\n1400.00\n1,200\n1,400\n1,600\n1,800\n2,000\n2,200\n2,400\n2,600\n2,800\nJul-20\nNov-20\nMar-21\nJul-21\nNov-21\nMar-22\nJul-22\nNov-22\nMar-23\nJul-23\nGold\nPalladium\nPlatinum (RHS)\n8,000\n13,000\n18,000\n23,000\n28,000\n33,000\n38,000\n4,500\n5,500\n6,500\n7,500\n8,500\n9,500\n10,500\n11,500\nJul-20\nSep-20\nNov-20\nJan-21\nMar-21\nMay-21\nJul-21\nSep-21\nNov-21\nJan-22\nMar-22\nMay-22\nJul-22\nSep-22\nNov-22\nJan-23\nMar-23\nMay-23\nJul-23\nCopper\nNickel (RHS)\n \n \n \n5 \n \nSaudi Arabia and the anticipated rebound in \ndemand in the US, the world's largest oil \nconsumer. \n \nFigure 3 shows developments in crude oil \nprices for the period July 2020 to July 2023. \n \nFigure 3: Crude Oil Prices (US$/barrel) \n \nSource: Bloomberg, 2023 \n \nMERCHANDISE TRADE DEVELOPMENTS \n \nThe \ncountry’s \ntotal \nmerchandise \ntrade \namounted to US$1,386.1 million in July 2023, \nrepresenting a 1.3% increase from US$1,368.9 \nmillion recorded in the previous month. On a \nyearly basis, total merchandise trade rose by \n8.6%, from US$1,276.1 million in the \ncorresponding month in 2022 to US$1,386.1 \nmillion in the reporting month. \n \nMerchandise Exports \n \nDuring the month of July 2023, the country \nexported goods worth US$603.2 million, 6.0% \ndown from US$641.5 million realised in the \npreceding \nmonth. \nCompared \nto \nthe \ncorresponding month in 2022, merchandise \nexports in the month under review were 10.0% \nhigher than the outturn of US$548.4 million \nrecorded in July 2022. \n \nFigure 4 shows developments in the country’s \nmerchandise exports for the period from \nJanuary 2022 to June 2023. \n \nFigure 4: Merchandise Trade (US$ m) \n \nSource: ZIMSTAT, 2023 \n \nThe major export drivers during the month \nunder review were gold, industrial diamonds, \nand PGMs, contributing 26.7%, 19.2%, and \n17.1%, respectively, of the country’s total \nexports. However, export earnings from gold \nand PGMs were lower than in the previous \nmonth, declining by 16.8% and 39.8%, \nrespectively. The decline was primarily \nattributable to depressed prices on the back of \nsluggish demand in China. \n \nTable 1 shows development in the country’s \nexports for the months of June and July 2023. \n0\n20\n40\n60\n80\n100\n120\n140\nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nUS$/barrel\n543.9\n438.0\n557.6\n587.3\n513.1\n541.0\n548.4\n427.7\n435.9\n515.3\n555.5\n654.2\n641.5\n603.2\n0.0\n200.0\n400.0\n600.0\n800.0\nJan\nFeb\nMar\nApr\nMay\nJun\nJul\nMerchandise Exports (US$m)\n2022\n2023\n \n \n \n6 \n \nTable 1: Exports Classified by Harmonized \nCommodity Description and Code System \n \nSource: ZIMSTAT & RBZ Calculations, 2023 \n*PGMs Include Nickel mattes, nickel ores & concentrates and \nplatinum \n \nZimbabwe’s exports were mainly destined for \nthe United Arab Emirates (27.6%), South \nAfrica (23.6%) and Mozambique (8.6%), \nduring the month ending 31 July 2023. \n \n \n \n \n \n \n \n \n \n \n \nFigure 5: Top Ten Merchandise Export \nDestinations (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2023 \n \nMerchandise Imports \n \nThe country’s import bill amounted to \nUS$782.9 million in July 2023,7.6% higher \nthan US$727.4 million recorded in the previous \nmonth. Compared to the corresponding month \nin 2022, the month’s export outturn was 7.6% \nhigher, as shown in Figure 6. \n \nFigure 6: Merchandise Imports classified by \nHS Codes (US$ m) \n \nSource: ZIMSTAT & RBZ Computations, 2023 \n \n27.6\n23.6\n8.6\n7.2\n2.4\n2.1\n1.6\n1.5\n1.0\n0.7\n0.0\n5.0 10.0 15.0 20.0 25.0 30.0\nUnited Arab Emirates\nSouth Africa\nMozambique\nHong Kong\nChina\nBelgium\nZambia\nNetherlands\nItaly\nKenya\n629.5\n624.7\n710.4\n636.2\n714.0\n751.0\n727.8\n633.8\n623.2\n746.4\n708.6\n850.3\n727.4\n782.9\n0\n200\n400\n600\n800\n1000\nJan\nFeb\nMar\nApr\nMay\nJun\nJul\n2022\n2023\n \nJune-23 \n(US m) \nJuly-23 \n(US$m) \nJune-\nJuly \nChanges \n(%) \nShare of \nExports \n(%) \nJuly-23 \nTotal \n641.5 \n603.2 \n-6.0 \n 100.0 \nOf Which \n \n \n \n \nGold \n193.9 \n161.3 \n-16.8 \n 26.7 \nIndustrial \ndiamonds \n30.1 \n115.9 \n284.8 \n 19.2 \nPGMs \n171.9 \n103.4 \n-39.8 \n 17.1 \nTobacco (Inc. \ncigarettes) \n61.8 \n55.1 \n-10.7 \n 9.1 \nFerro-\nchromium \n27.6 \n28.4 \n2.9 \n 4.7 \nCoal \n25.7 \n15.8 \n-38.6 \n 2.6 \nCane sugar \n4.6 \n8.3 \n78.7 \n 1.4 \nChromium \nores & \nconcentrates \n4.2 \n4.4 \n6.6 \n 0.7 \nGranite \n4.3 \n3.3 \n-23.9 \n 0.5 \nOranges \n2.1 \n3.1 \n47.3 \n 0.5 \n \n \n \n7 \n \nDuring the month under review, the country’s \nimports were mainly composed of diesel \n(9.7%), petrol (5.0%), crude soya bean oil \n(2.4%) and rice (2.4%). The growth in the \ncountry’s fuel import bill was primarily \nattributable to a global rise in oil prices owing \nto supply deficits. Table 2 shows imports of \nmajor commodities for the months of June and \nJuly 2023. \n \n \nTable 2: Imports Classified by Harmonised \nCommodity Description and Code System \n \nJune-23 \n(US$m) \nJuly-23 \n(US$m) \nJune-\nJuly \nChanges \n(%) \nShare \nof Total \nImports \n(%) \nJuly-23 \nTotal \n727.4 \n782.9 \n7.6 \n100.0 \nOf Which \n \n \n \n \nDiesel \n68.8 \n76.3 \n10.9 \n9.7 \nLeaded \npetrol \n35.1 \n39.0 \n11.2 \n5.0 \nCrude soya \nbean oil \n19.8 \n18.9 \n-4.8 \n2.4 \nRice \n8.5 \n18.6 \n118.7 \n2.4 \nStructures \n& parts of \nstructures \n4.6 \n11.9 \n159.3 \n1.5 \nElectricity \n9.9 \n10.4 \n5.4 \n1.3 \nAmmonium \nnitrate \n9.0 \n10.2 \n12.8 \n1.3 \nPublic \ntransport \ntype \nvehicles \n4.0 \n9.6 \n141.7 \n1.2 \nSelf-\npropelled \nbulldozers \n6.6 \n8.7 \n31.8 \n1.1 \nCane Sugar \n8.0 \n7.6 \n-5.4 \n1.0 \nSource: ZIMSTAT & RBZ Calculations, 2023 \nThe country’s imports for July 2023 were \nmainly sourced from South Africa (41.1%), \nChina (16.3%), Bahamas (11.6%), Hong Kong \n(3.0%) and other markets. Figure 7 shows the \ncountry’s top import sources in June 2023. \n \nFigure 7: Top Ten Merchandise Import \nSources (% Share) \nSource: ZIMSTAT & RBZ Calculations, 2023 \n \nMerchandise Trade Balance \nThe country’s trade developments culminated \nin the deterioration in the trade balance, from a \ndeficit of US$85.9 million in June 2023 to a \ndeficit of US$179.6 million during the month \nunder review. Similarly, the country’s trade \nbalance widened, year on year, from a deficit of \nUS$179.4 million in the comparable month in \n2022 to a deficit of US$179.6 million in July \n2023. \n \nFigure 8 shows merchandise trade balance from \nMarch 2023 to July 2023. \n \n \n \n \n \n \n41.1\n16.3\n11.6\n3.0\n2.8\n2.6\n2.4\n2.1\n2.0\n1.2\nSouth Africa\nChina\nBahamas\nHong Kong\nIndia\nUnited Arab Emirates\nZambia\nMauritius\nMozambique\nThailand\n \n \n \n8 \n \nFig 8: Merchandise Trade Balance (US$ m) \n \nSource: ZIMSTAT & RBZ Computations, 2023 \n \nMONETARY DEVELOPMENTS1 \n \nBroad money (M3) stock amounted to \nZW$13,003.45 billion in July 2023, compared \nto ZW$14,275.48 billion in June 2023. The \nmoney stock was comprised of foreign \ncurrency deposits, 82.41%; local currency \ndeposits, 17.52% and currency in circulation, \n0.02%. Figure 9 shows the money supply \ncomposition. \nFigure 9: Composition of Money Supply \nSource: Reserve Bank of Zimbabwe, 2023 \n \nOn a monthly basis, the broad money supply \ndeclined by 8.91% in July 2023, compared to a \n7.20% increase recorded in June 2023. The \n \n1All monetary numbers valued in ZW$ since the \nadoption of an interbank market determined exchange \nrate in February 2019. \ndecline in money supply reflected a decrease of \nZW$10,099.33 billion in foreign currency \naccounts (FCAs) deposits, resulting from the \nappreciation of the exchange rate from \nZW$5 740/USD in June to ZW$4 516/USD in \nJuly 2023. The local currency component of \ndeposits increased by ZW$506.73 billion, \nreflecting the cumulative impact of credit \ncreation by banks. \n \nDuring the month under review, the growth in \ndomestic claims by banks slowed down to \n3.91%, compared to 63.27% recorded in June \n2023. Credit to the private sector, decreased by \nZW$1,563.90 billion in July 2023, largely \nreflecting the impact of exchange rate \nappreciation. Over the same period, net claims \non Government by the banking sector increased \nby ZW$2,353.73 billion. \n \nOn an annual basis, broad money registered an \nincrease of 977.06% in July 2023 compared to \n1,174.94%, in June 2023. The annual growth in \nmoney supply largely reflected exchange rate \ndepreciation. Expansion in foreign currency \ndeposits, accounted for 826.22 percentage \npoints of the 977.06% annual growth in broad \nmoney. The local currency component of \nmoney supply also increased by 390.22%. \n \nThe annual increase in broad money largely \nreflected nominal changes in credit to the \nprivate \nsector \nand \npublic \nnon-financial \ncorporations, \nof \nZW$7,027.66 \nbillion \n515.3\n555.5\n654.2\n641.3\n603.2\n746.4\n708.5\n850.3\n726.4 782.9\n-231.1\n-153.0\n-196.0\n-85.1\n-179.6\n-500.0\n0.0\n500.0\n1000.0\nMar-23\nMay-23\nJul-23\nExports\nImports\nTrade Balance\nNCDs, \n0.02%\nLocal \nCurrency \nTime , 1.60%\nFX Time \nDeposits, 4.74%\nLocal Currency \nTransferable , \n15.90%\nFX Transferable \nDeposits, 77.67%\nCurrency in \nCirculation, \n0.08%\n \n \n \n9 \n \n(1,037.60%); \nand \nZW$1,059.22 \nbillion \n(1,238.18%), respectively. \n \nThe outstanding credit to the private sector was \nmainly in respect of credit to households and \nagriculture, which received 21.97% and \n16.48% of the total credit, respectively. The \nmanufacturing \nand \ndistribution \nsectors \naccounted for 15.71% and 12.77% of the credit, \nrespectively. Private sector credit shares for all \nthe sectors are shown in Figure 10. \n \nFigure 10: Distribution of Private Sector \nCredit \nSource: Reserve Bank of Zimbabwe, 2023 \n \nCredit to the private sector was largely utilized \nfor recurrent expenditures, 40.14%; inventory \nbuild-up, \n24.61%; \nand \nfixed \ncapital \ninvestments, 14.72%. \n \nSTOCK MARKET DEVELOPMENTS \nZIMBABWE STOCK EXCHANGE (ZSE) \n \nDuring the month of July 2023, the Zimbabwe \nStock Exchange (ZSE) exhibited bearish \nsentiments. Thus, the All Share, Top 10 and \nTop 15 indices declined by 33.06%, 44.27% \nand 39.16% to close the month at 114 746.13 \npoints, 51 844.10 points and 72 293.87 points, \nrespectively. \n \nThe resource index, however, added 16.31% to \nclose at 89 512.59 points, compared to \n76 960.49 points registered in the previous \nmonth. \n \nOn a yearly basis, the All Share, Top 10 and \nTop 15 indices increased by 591.45%, 405.02% \nand 539.31%, from 16 594.91 points, 10 265.73 \npoints and 11 308.19 points recorded in the \ncomparable period last year, respectively. \n \nThe mining index also went up by 347.09% \nfrom 20 021.24 points registered in July 2022. \n \nFigure 11: ZSE All Share, Top 10 and \nMining Indices \nSource: Zimbabwe Stock Exchange, 2023 \nHouseholds\n21.97%\nAgriculture\n16.48%\nMining\n12.48%\nManufacturing…\nDistribution\n12.77%\nConstruction\n2.01%\nTransport & \nCommunicati\nons…\nServices\n9.78%\nFinancial Org. \n& Investments\n5.94%\nOther\n0.01%\n15,000\n21,000\n27,000\n33,000\n39,000\n45,000\n51,000\n57,000\n63,000\n69,000\n75,000\n81,000\n87,000\n5000\n25000\n45000\n65000\n85000\n105000\n125000\n145000\n165000\n185000\n31-Jul-22\n31-Aug-22\n30-Sep-22\n31-Oct-22\n30-Nov-22\n31-Dec-22\n31-Jan-23\n28-Feb-23\n31-Mar-23\n30-Apr-23\n31-May-23\n30-Jun-23\n31-Jul-23\nAll Share Index\nTop 10 Index\nMining Index\n \n \n \n10 \n \nOwing to dampened trading activity during the \nmonth under analysis, the cumulative volume \nand value of shares traded declined by 8.27% \nand 52.10% to 176.55 million shares and \nZW$40.85 billion, respectively. \n \nThe proportion of foreign purchases to the \nvalue of shares traded declined to 2.40%, from \n2.77% in June 2023. \n \nConcomitantly, net foreign position worsened \nto negative ZW$10.21 billion, from positive \nZW$1.07 billion realized in June 2023. \n \nFigure 12: ZSE Monthly Volume and Value \nTraded \n \nSource: Zimbabwe Stock Exchange, 2023 \nMarket Capitalization closed the month at \nZW$9,171.35 billion. This represents a decline \nof 34.43%, compared to ZW$13,987.48 billion \nrecorded in June 2023. \n \nOn a year-on-year basis, ZSE capitalization \nrose by 343.44%, from ZW$2,068.22 billion \nrecorded in July 2022. \nVICTORIA FALLS STOCK EXCHANGE \n(VFEX) \n \nThe Victoria Falls Stock Exchange (VFEX) \nwas characterized by bearish sentiments during \nthe month of July 2023. Consequently, the \nVFEX All Share index lost 10.32% to close at \n68.31 points, from 76.17 points recorded in the \nprevious month. \n \nOn an annual basis, the VFEX All Share Index \ndeclined by 44.24%, from 122.50 points \nrecorded in July 2022. \n \nFigure 13: Victoria Falls Stock Exchange \n(VFEX) All Share Index (ASI) \n \nSource: Victoria Falls Stock Exchange, 2023 \n \nVFEX Market Capitalization \nDuring the month under analysis, the VFEX \nmarket capitalization lost 9.13% to US$1.17 \n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\n90,000\n0\n100\n200\n300\n400\n500\n600\nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nVALUE TRADED ($ MILLIONS)\nVOLUME TRADED (MILIONS)\nVolume\nValue\n60\n70\n80\n90\n100\n110\n120\n130\n140\n150\n31-Jul-22\n31-Aug-22\n30-Sep-22\n31-Oct-22\n30-Nov-22\n31-Dec-22\n31-Jan-23\n28-Feb-23\n31-Mar-23\n30-Apr-23\n31-May-23\n30-Jun-23\n31-Jul-23\n \n \n \n11 \n \nbillion, compared to US$1.29 billion recorded \nin June 2023. \n \nFigure 14: Victoria Falls Stock Exchange \n(VFEX) Market Capitalization (US$ b) \n \nSource: Victoria Falls Stock Exchange (VFEX), 2023 \nNATIONAL PAYMENTS SYSTEM \n \nThe value of transactions processed through the \nNational Payment Systems (NPS) increased by \n3% \nto \nZW$27.13 \ntrillion \nfrom \nZW$26.41trillion, recorded in June 2023. NPS \ntransactions volumes decreased by 7% from \n58.55 million to 54.59 million recorded in June \n2023. \n \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe value of transactions processed through the \nReal Time Gross Settlement (RTGS) system \nincreased by 5% to ZW$17.86 trillion from \nZW$17.06 trillion recorded in June 2023. The \nvolume of RTGS transactions decreased by \n10%, from 1.05 million in June 2023 to 0.94 \nmillion in July 2023. \n \nFigure 15: ZETSS Volumes and Values \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \nMobile and Internet Based Transactions \n \nMobile and internet-based transactions stood \nat ZW$7.70 trillion in July 2023, down from \nZW$7.85 trillion recorded in the preceding \nmonth. \nINFLATION OUTTURN \nAnnual Inflation \nHeadline inflation declined from 175.5% in \nJune 2023 to 101.3% in July 2023, attributable \nto significant appreciation of the local currency \nwhich resulted in positive pass-through effects \nto inflation. \n \n0.00\n0.20\n0.40\n0.60\n0.80\n1.00\n1.20\n1.40\nMar-22\nApr-22\nMay-22\nJun-22\nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nBillions\n -\n 2,000.0\n 4,000.0\n 6,000.0\n 8,000.0\n 10,000.0\n 12,000.0\n 14,000.0\n 16,000.0\n 18,000.0\n 20,000.0\n0\n200\n400\n600\n800\n1000\n1200\n1400\nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nValue in ZW$ Billions\nVolume in Thousands\nVolume\nValue\n \n \n \n12 \n \nThis followed the liberalisation of the exchange \nrate coupled by the increase in statutory \nreserves for local currency to 15%, lifting of \nimport restrictions on basic goods and \ncommodities, upward adjustments of the \ninterest rates and increased demand for local \ncurrency due to demand for specific taxes and \nduties in local currency. \nAnnual food inflation declined to 103.1% in \nJuly 2023, from 255.6% in June 2023. Year-on-\nyear, annual non-food inflation also decelerated \nto 99.3% in July 2023, contributing 56.7 \npercentage points to the July 2023 inflation rate \nof 101.3%. \n \nMonthly Inflation \n \nThe month-on-month inflation rate sharply \ndecelerated from 74.5% in June 2023 to minus \n15.3%, in July 2023, largely driven by the fall \nin food inflation. \n \nFood inflation tumbled from 104.2% in June \n2023 to minus 30.7% in July 2023. Monthly \nnon-food inflation also fell from 49.5% to 2.4% \nover the same period. \n \nFigure 16: Month-on-Month Inflation (%) \n \nSource: ZIMSTAT, 2023 \n \nSEPTEMBER 2023 \nRESERVE BANK OF ZIMBABWE \n \n-35.00\n-15.00\n5.00\n25.00\n45.00\n65.00\n85.00\n105.00\nNov-21\nJan-22\nMar-22\nMay-22\nJul-22\nSep-22\nNov-22\nJan-23\nMar-23\nMay-23\nJul-23\nFood and non alcoholic beverages\nNon food\nAll Items\n \n13 \n \n \nStatistical Tables \n \nMonetary Statistics \n 1. Depository Corporations Survey \n \n \n \n \n15 \n 2. Central Bank Survey \n \n \n \n \n \n \n16 \n \n3. Other Depository Corporations Survey \n \n \n \n \n17 \n Other Depository Corporations \n \n4.1 Assets \n \n \n \n \n \n \n \n18 \n 4.2 Liabilities \n \n \n \n \n \n \n \n \n19 \n Commercial Banks \n 5.1 Assets \n \n \n \n \n \n20 \n 5.2 Liabilities \n \n \n \n \n21 \n Building Societies \n 6.1 Assets \n \n \n \n \n \n \n \n22 \n 6.2 Liabilities \n \n \n \n \n \n \n23 \n Sectoral Analysis of Bank Loans and Advances and Deposits \n \n7.1 Sectoral Analysis of Commercial Banks Loans and Advances \n \n24 \n \n7.2 Sectoral Analysis of Commercial Banks Deposits \n \n \n \n25 \n Interest Rates \n \n8.1 Lending Rates \n \n \n \n \n \n \n \n26 \n \n8.2 Banks Deposit Rates \n \n \n \n \n \n \n27 \n \n Inflation \n \n9.1 Monthly Inflation \n \n \n \n \n \n \n \n28 \n \n9.2 Yearly Inflation \n \n \n \n \n \n \n \n29 \n \n External Statistics \n 10. Exchange Rates \n \n \n \n \n \n \n \n30 \n \n \n \n \n \n \n14 \n \n \nZimbabwe Stock Exchange \n 11. Zimbabwe Stock Market Statistics \n \n \n \n \n \n31 \n \n National Payments System Statistics \n \n \n \n12.1 Values of Transactions \n \n \n \n \n \n \n32 \n \n12.2 Volumes of Transactions \n \n \n \n \n \n33 \n \nTrade Statistics \n \n \n \n \n \n \n \n \n 13. Merchandise Trade Statistics \n \n \n \n \n \n34 \n \n \n \n \n \n \n \n \n \n 15 \n \n \n TABLE 1: DEPOSITORY CORPORATIONS SURVEY ($'000)\nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nNet Foreign Assets\n-1,799,900,028.55 -1,795,279,800.26\n-1,954,300,330.22\n-2,033,984,124.20\n-2,085,714,926.41\n-2,301,765,618.46\n-2,768,770,567.35\n-2,973,301,439.14\n-3,029,571,037.94\n-3,592,508,488.23\n-8,614,351,669.20 -17,037,826,284.18 -14,270,652,392.93\nCentral Bank(net)\n-2,132,218,475.50\n-2,281,673,543.14\n-2,540,535,213.92\n-2,594,453,844.31\n-2,593,755,912.16\n-2,780,839,763.05\n-3,343,568,149.26\n-3,725,651,869.12\n-3,773,983,623.21\n-4,391,029,727.11 -10,520,227,418.97 -20,905,102,725.43 -17,908,236,910.38\nForeign Assets\n460,906,552.27\n464,424,207.59\n423,342,143.07\n420,613,636.26\n461,596,127.82\n653,511,533.22\n586,967,884.70\n615,433,643.39\n564,973,118.29\n487,113,521.79\n1,269,998,206.12\n5,000,570,393.09\n2,298,540,635.06\nForeign Liabilities\n2,593,125,027.77\n2,746,097,750.73\n2,963,877,356.98\n3,015,067,480.57\n3,055,352,039.98\n3,434,351,296.28\n3,930,536,033.96\n4,341,085,512.51\n4,338,956,741.51\n4,878,143,248.90\n11,790,225,625.10\n25,905,673,118.52\n20,206,777,545.43\nOther Depository Corporations(net)\n332,318,446.95\n486,393,742.88\n586,234,883.70\n560,469,720.11\n508,040,985.75\n479,074,144.60\n574,797,581.91\n752,350,429.98\n744,412,585.27\n798,521,238.87\n1,905,875,749.78\n3,867,276,441.25\n3,637,584,517.45\nForeign Assets\n432,930,547.04\n606,589,993.46\n730,519,889.15\n714,553,928.34\n647,684,732.33\n656,889,016.74\n771,701,557.95\n978,124,840.54\n1,001,481,472.45\n1,117,664,547.79\n2,691,035,602.70\n5,707,374,025.18\n5,099,940,234.73\nForeign Liabilities\n100,612,100.09\n120,196,250.58\n144,285,005.45\n154,084,208.23\n139,643,746.58\n177,814,872.15\n196,903,976.04\n225,774,410.56\n257,068,887.17\n319,143,308.91\n785,159,852.92\n1,840,097,583.93\n1,462,355,717.28\nNet Domestic Assets (NDA)\n3,007,213,667.92\n3,404,193,526.10\n3,871,453,855.67\n3,914,796,933.13\n4,157,026,534.98\n4,639,992,601.29\n5,466,131,034.04\n5,901,544,727.24\n6,224,896,705.38\n7,191,111,363.85\n15,853,317,101.49\n31,313,301,345.50\n27,274,104,611.26\nDomestic Claims\n911,956,758.63\n1,183,994,022.32\n1,371,017,098.26\n1,420,546,462.01\n1,634,150,767.46\n1,887,872,636.21\n2,178,096,571.94\n2,412,375,453.77\n2,817,271,797.47\n3,128,143,876.12\n6,606,083,920.89\n10,786,056,145.65\n11,207,654,299.27\nClaims on Central Government(net)\n130,502,205.15\n236,159,688.17\n270,091,555.64\n263,657,275.07\n350,064,095.72\n474,594,482.66\n468,584,636.74\n482,484,485.80\n627,021,736.70\n809,483,964.69\n1,453,508,596.11\n-321,410,956.46\n2,032,323,436.46\nClaims on Central Government\n192,199,618.57\n350,494,976.12\n408,193,113.30\n426,472,842.49\n532,069,052.32\n633,310,020.08\n781,764,304.23\n961,476,154.82\n1,030,581,569.13\n1,109,723,491.62\n1,853,707,138.97\n3,237,920,191.20\n3,137,951,747.03\nCentral Bank\n100,589,783.20\n250,194,418.13\n264,613,071.80\n274,598,654.32\n333,135,150.34\n344,351,637.74\n461,728,501.30\n628,530,323.58\n669,523,170.19\n717,575,879.35\n1,196,082,138.57\n2,246,012,881.84\n1,888,538,492.52\nODCs\n91,609,835.37\n100,300,557.99\n143,580,041.50\n151,874,188.17\n198,933,901.98\n288,958,382.34\n320,035,802.93\n332,945,831.24\n361,058,398.93\n392,147,612.28\n657,625,000.40\n991,907,309.36\n1,249,413,254.51\nLess Liabilities to Central Government\n61,697,413.42\n114,335,287.95\n138,101,557.65\n162,815,567.42\n182,004,956.59\n158,715,537.42\n313,179,667.49\n478,991,669.02\n403,559,832.42\n300,239,526.93\n400,198,542.86\n3,559,331,147.66\n1,105,628,310.57\nCentral Bank\n52,333,907.68\n106,442,851.55\n129,394,309.01\n156,141,911.29\n175,273,582.39\n150,848,789.30\n271,358,342.10\n467,951,478.68\n397,371,107.14\n290,537,325.34\n349,686,815.54\n3,126,720,981.59\n725,192,498.74\nODCs\n9,363,505.74\n7,892,436.40\n8,707,248.64\n6,673,656.14\n6,731,374.21\n7,866,748.12\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\nClaims on Other Sectors\n781,454,553.48\n947,834,334.15\n1,100,925,542.62\n1,156,889,186.94\n1,284,086,671.74\n1,413,278,153.55\n1,709,511,935.20\n1,929,890,967.97\n2,190,250,060.77\n2,318,659,911.43\n5,152,575,324.78\n11,107,467,102.11\n9,175,330,862.81\nOther Financial Corporations\n14,828,545.88\n17,449,153.84\n18,825,212.19\n143,782,090.97\n143,554,205.91\n162,860,664.99\n176,029,053.38\n189,742,321.73\n202,939,856.36\n127,476,071.53\n204,879,115.02\n372,829,596.47\n286,485,380.68\nState and Local Government\n349,675.75\n287,141.09\n306,328.41\n341,962.52\n303,552.08\n282,613.13\n251,239.62\n197,442.25\n149,777.75\n99,276.39\n80,342.62\n83,001.69\n68,073.17\nPublic Non Financial Corporations\n85,546,713.45\n123,920,817.60\n133,928,821.97\n145,038,366.23\n150,370,660.24\n161,725,797.02\n198,192,725.01\n221,082,772.48\n244,918,005.85\n282,369,808.93\n680,427,260.99\n1,426,648,513.58\n1,144,767,740.03\nPrivate Sector\n680,729,618.39\n806,177,221.63\n947,865,180.05\n867,726,767.22\n989,858,253.51\n1,088,409,078.41\n1,335,038,917.19\n1,518,868,431.51\n1,742,242,420.81\n1,908,714,754.59\n4,267,188,606.15\n9,307,905,990.36\n7,744,009,668.94\nCentral Bank\n7,151,212.10\n8,394,127.31\n10,349,380.21\n12,722,796.25\n13,419,306.74\n13,440,290.49\n14,320,237.34\n15,366,452.38\n18,410,955.96\n21,144,958.50\n23,007,099.44\n23,430,389.25\n42,772,151.02\nODCs\n673,578,406.29\n797,783,094.32\n937,515,799.83\n855,003,970.96\n976,438,946.77\n1,074,968,787.92\n1,320,718,679.85\n1,503,501,979.13\n1,723,831,464.85\n1,887,569,796.09\n4,244,181,506.71\n9,284,475,601.11\n7,701,237,517.92\nOther Items(Net)\n-2,095,256,909.29 -2,220,199,503.78\n-2,500,436,757.40\n-2,494,250,471.13\n-2,522,875,767.52\n-2,752,119,965.08\n-3,288,034,462.10\n-3,489,169,273.48\n-3,407,624,907.90\n-4,062,967,487.72\n-9,247,233,180.60 -20,527,245,199.85 -16,066,450,311.99\nShares and Other Equity\n-2,109,505,152.97\n-2,196,010,760.22\n-2,353,032,948.01\n-2,415,295,348.56\n-2,460,253,452.61\n-2,434,507,949.48\n-2,961,726,923.10\n-3,217,266,965.75\n-3,126,405,163.73\n-3,579,533,655.47\n-9,203,936,084.43 -19,402,711,215.33 -14,321,122,638.86\nLiabilities to Other Financial Corporations\n1,339,092.93\n555,226.55\n587,178.66\n762,462.53\n339,615.56\n752,479.25\n675,534.11\n3,108,981.29\n3,714,628.40\n6,418,803.44\n30,583,343.97\n64,321,874.21\n58,256,168.71\nRestricted Deposits\n31,949,181.65\n37,970,261.21\n33,027,186.30\n47,084,275.28\n59,785,332.00\n42,455,011.89\n52,836,636.96\n95,262,450.25\n116,383,765.15\n168,057,733.95\n452,445,666.52\n929,649,277.24\n832,146,281.94\nDeposits and Securities Excluded from Base Money\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-19,040,030.90\n-62,714,231.31\n-181,018,174.35\n-126,801,860.37\n-122,747,262.48\n-360,819,506.73\n-379,819,710.07\n-370,273,739.26\n-401,318,137.73\n-657,910,369.64\n-526,326,106.66\n-2,118,505,135.97\n-2,635,730,123.79\nBroad Money-M3\n1,207,313,639.37\n1,608,913,725.83\n1,917,153,525.45\n1,880,812,808.93\n2,071,311,608.56\n2,338,226,982.83\n2,697,360,466.69\n2,928,243,288.10\n3,195,325,667.44\n3,598,602,875.61\n7,238,965,432.29\n14,275,475,061.32\n13,003,452,218.33\nSecurities Other than Shares Included in Broad \nMoney\n8,137,874.02\n12,785,574.75\n14,047,495.34\n15,558,863.88\n13,438,521.87\n14,148,964.76\n15,056,472.03\n15,711,655.30\n16,082,619.50\n1,843,391.22\n4,659,433.86\n4,243,581.90\n2,137,443.55\nBroad Money-M2\n1,199,175,765.34\n1,596,128,151.09\n1,903,106,030.11\n1,865,253,945.05\n2,057,873,086.69\n2,324,078,018.07\n2,682,303,994.66\n2,912,531,632.80\n3,179,243,047.93\n3,596,759,484.40\n7,234,305,998.43\n14,271,231,479.42\n13,001,314,774.78\nOther Deposits\n94,202,100.47\n134,172,529.07\n157,067,992.76\n166,451,245.87\n189,198,137.65\n233,411,780.44\n275,038,711.32\n293,774,251.17\n332,735,496.03\n268,888,357.23\n555,305,758.75\n1,066,573,312.15\n824,657,970.63\nof which Foreign Currency Accounts\n51,808,901.22\n79,027,794.71\n77,583,912.71\n97,520,415.67\n115,079,593.63\n121,810,432.21\n159,977,076.22\n193,826,996.54\n204,002,079.62\n140,843,185.69\n366,430,904.52\n852,167,654.54\n616,409,108.42\nNarrow Money-M1\n1,104,973,664.87\n1,461,955,622.01\n1,746,038,037.35\n1,698,802,699.18\n1,868,674,949.05\n2,090,666,237.62\n2,407,265,283.35\n2,618,757,381.64\n2,846,507,551.90\n3,327,871,127.16\n6,679,000,239.69\n13,204,658,167.27\n12,176,656,804.16\nTransferable Deposits\n1,100,888,777.34\n1,457,941,576.91\n1,742,120,578.98\n1,694,712,870.55\n1,864,566,202.51\n2,086,456,095.48\n2,402,524,498.19\n2,612,610,043.68\n2,840,026,628.31\n3,320,722,893.78\n6,671,063,283.95\n13,196,303,401.12\n12,166,873,421.72\n Of which Foreign Currency Accounts\n688,836,308.19\n991,098,612.31\n1,196,206,879.78\n1,131,298,129.20\n1,211,793,829.42\n1,327,590,772.37\n1,626,587,667.25\n1,754,513,308.92\n1,869,072,784.19\n2,148,792,572.06\n5,274,426,984.71\n11,635,488,089.25\n10,099,330,132.00\nCurrency Outside Depository Corporations\n4,084,887.53\n4,014,045.11\n3,917,458.37\n4,089,828.63\n4,108,746.53\n4,210,142.14\n4,740,785.16\n6,147,337.96\n6,480,923.60\n7,148,233.38\n7,936,955.74\n8,354,766.15\n9,783,382.43\nMemorandum Items\nReserve Money\n35,521,743.90\n37,466,335.66\n87,098,435.56\n92,268,161.94\n98,860,662.38\n104,044,194.67\n122,997,662.08\n204,036,133.91\n232,896,654.62\n276,496,079.11\n520,611,909.67\n1,064,898,441.01\n1,003,043,754.90\nFCAs as a Percentage of Deposits in M3\n57.2%\n61.8%\n62.5%\n60.3%\n58.6%\n56.9%\n60.4%\n60.0%\n58.6%\n59.8%\n72.9%\n87.5%\n77.7%\nEnd Period Exchange Rate\n443.88\n546.83\n621.89\n632.77\n654.93\n684.33\n796.52\n889.13\n929.86\n1,047.44\n2,577.06\n5,739.80\n4,516.80\nSource: Reserve Bank of Zimbabwe, 2023\n \n \n \n16 \n \n \nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nNet Foreign Assets\n-2,132,218,475.50\n-2,281,673,543.14 -2,540,535,213.92\n-2,594,453,844.31\n-2,593,755,912.16\n-2,780,839,763.05\n-3,343,568,149.26\n-3,725,651,869.12\n-3,773,983,623.21\n-4,391,029,727.11 -10,520,227,418.97 -20,905,102,725.43 -17,908,236,910.38\nClaims on Non Residents\n460,906,552.27\n464,424,207.59\n423,342,143.07\n420,613,636.26\n461,596,127.82\n653,511,533.22\n586,967,884.70\n615,433,643.39\n564,973,118.29\n487,113,521.79\n1,269,998,206.12\n5,000,570,393.09\n2,298,540,635.06\nOfficial Reserves Assets\n350,631,779.92\n329,592,679.60\n270,927,656.44\n265,887,215.65\n301,307,551.70\n408,577,461.48\n261,809,981.40\n249,068,733.08\n171,692,411.97\n146,106,760.95\n332,915,935.99\n2,747,791,086.61\n550,426,343.44\nOther Foreign Assets\n110,274,772.35\n134,831,527.99\n152,414,486.62\n154,726,420.61\n160,288,576.12\n244,934,071.75\n325,157,903.30\n366,364,910.31\n393,280,706.32\n341,006,760.85\n937,082,270.13\n2,252,779,306.49\n1,748,114,291.61\nLess Liabilities to Non Residents\n2,593,125,027.77\n2,746,097,750.73\n2,963,877,356.98\n3,015,067,480.57\n3,055,352,039.98\n3,434,351,296.28\n3,930,536,033.96\n4,341,085,512.51\n4,338,956,741.51\n4,878,143,248.90\n11,790,225,625.10\n25,905,673,118.52\n20,206,777,545.43\nShort Term Liabilities\n1,127,013,639.61\n1,336,300,564.04\n1,387,742,749.22\n1,398,159,992.55\n1,431,029,164.32\n1,701,709,036.15\n1,909,558,866.94\n2,114,914,934.40\n2,213,818,403.03\n2,487,318,302.19\n6,071,100,761.93\n13,223,388,517.77\n10,191,496,163.68\nOther Foreign Liabilities*\n1,466,111,388.17\n1,409,797,186.69\n1,576,134,607.76\n1,616,907,488.02\n1,624,322,875.66\n1,732,642,260.13\n2,020,977,167.02\n2,226,170,578.11\n2,125,138,338.48\n2,390,824,946.71\n5,719,124,863.17\n12,682,284,600.75\n10,015,281,381.75\n of which blocked funds\n852,249,186.55\n678,512,698.97\n762,984,490.22\n783,864,733.61\n742,874,154.66\n800,314,020.03\n918,840,100.80\n1,016,910,134.72\n844,460,244.12\n946,785,361.64\n2,218,121,428.14\n4,846,720,895.68\n3,809,201,616.00\nNet Domestic Assets (NDA)\n2,167,740,219.40\n2,319,139,878.80\n2,627,633,649.47\n2,686,722,006.25\n2,692,616,574.53\n2,884,883,957.73\n3,466,565,811.34\n3,929,688,003.03\n4,006,880,277.83\n4,667,525,806.22\n11,040,839,328.64\n21,970,001,166.44\n18,911,280,665.28\nDomestic Claims\n121,100,451.59\n232,699,771.22\n241,166,538.97\n235,988,125.06\n281,625,189.08\n327,159,834.74\n344,411,001.58\n335,732,732.21\n472,690,115.90\n659,259,617.17\n1,372,281,553.64\n119,647,192.81\n1,998,051,204.96\nNet Claims on Central Government\n48,255,875.52\n143,751,566.58\n135,218,762.79\n118,456,743.03\n157,861,567.95\n193,502,848.44\n190,370,159.19\n160,578,844.90\n272,152,063.05\n427,038,554.01\n846,395,323.03\n-880,708,099.75\n1,163,345,993.77\nClaims on Central Government\n100,589,783.20\n250,194,418.13\n264,613,071.80\n274,598,654.32\n333,135,150.34\n344,351,637.74\n461,728,501.30\n628,530,323.58\n669,523,170.19\n717,575,879.35\n1,196,082,138.57\n2,246,012,881.84\n1,888,538,492.52\nOf which: Securities Other than Shares\n11,099,253.33\n16,894,372.03\n24,148,817.33\n32,085,268.08\n58,861,123.74\n93,911,678.51\n115,798,163.17\n141,163,866.74\n163,408,985.73\n197,483,744.44\n491,408,539.76\n1,282,058,425.55\n1,041,256,825.36\nLoans\n89,490,529.87\n233,300,046.10\n240,464,254.47\n242,513,386.24\n274,274,026.60\n250,439,959.22\n345,930,338.13\n487,366,456.84\n506,114,184.46\n520,092,134.91\n704,673,598.81\n963,954,456.29\n847,281,667.16\n Loans and Advances\n56,145,143.34\n62,658,197.28\n69,822,405.65\n71,871,537.43\n103,632,177.79\n83,409,676.25\n92,638,154.51\n100,736,810.22\n112,483,069.83\n126,461,020.28\n298,686,901.35\n557,967,758.83\n441,294,969.70\nAmounts Due from Gvt including SDR Draw\n29,733,820.69\n167,030,282.97\n167,030,282.97\n167,030,282.97\n167,030,282.97\n167,030,282.97\n253,292,183.61\n386,629,646.61\n393,631,114.63\n393,631,114.63\n405,986,697.46\n405,986,697.46\n405,986,697.46\n Export Incentives\n3,611,565.85\n3,611,565.85\n3,611,565.85\n3,611,565.85\n3,611,565.85\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLess Liabilities to Central Government\n52,333,907.68\n106,442,851.55\n129,394,309.01\n156,141,911.29\n175,273,582.39\n150,848,789.30\n271,358,342.10\n467,951,478.68\n397,371,107.14\n290,537,325.34\n349,686,815.54\n3,126,720,981.59\n725,192,498.74\nOf which: Deposits\n52,333,907.68\n106,442,851.55\n129,394,309.01\n156,141,911.29\n175,273,582.39\n150,848,789.30\n271,358,342.10\n467,951,478.68\n397,371,107.14\n290,537,325.34\n349,686,815.54\n3,126,720,981.59\n725,192,498.74\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n72,844,576.07\n88,948,204.64\n105,947,776.18\n117,531,382.02\n123,763,621.12\n133,656,986.31\n154,040,842.39\n175,153,887.31\n200,538,052.85\n232,221,063.16\n525,886,230.61\n1,000,355,292.57\n834,705,211.19\nOther Financial Corporations\n3,057,198.60\n3,073,237.98\n3,202,283.90\n3,211,903.39\n3,213,198.55\n8,835,802.24\n9,415,510.50\n10,113,325.42\n10,623,469.30\n10,883,730.62\n10,991,470.34\n12,986,635.27\n12,976,151.03\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n62,636,165.37\n77,480,839.35\n92,396,112.07\n101,596,682.38\n107,131,115.83\n111,380,893.58\n130,305,094.55\n149,674,109.51\n171,503,627.58\n200,192,374.04\n491,887,660.82\n963,938,268.05\n778,956,909.14\nPrivate Sector\n7,151,212.10\n8,394,127.31\n10,349,380.21\n12,722,796.25\n13,419,306.74\n13,440,290.49\n14,320,237.34\n15,366,452.38\n18,410,955.96\n21,144,958.50\n23,007,099.44\n23,430,389.25\n42,772,151.02\nClaims on Other Depository Corporations\n11,136,478.88\n26,441,912.94\n40,716,900.04\n42,205,302.85\n34,171,755.59\n24,419,539.95\n41,233,534.83\n43,495,940.76\n45,842,895.27\n47,004,500.30\n116,825,246.16\n267,624,056.04\n261,303,321.91\nOf which: Loans\n11,136,478.88\n26,441,912.94\n40,716,900.04\n42,205,302.85\n34,171,755.59\n24,419,539.95\n41,233,534.83\n43,495,940.76\n45,842,895.27\n47,004,500.30\n116,825,246.16\n267,624,056.04\n261,303,321.91\nOther Liabilities to ODCs\n352,778,125.95\n516,479,509.63\n514,761,587.21\n554,976,245.35\n681,837,090.96\n685,265,981.82\n730,178,263.75\n655,353,298.81\n642,344,547.18\n750,760,102.33\n1,433,201,083.09\n2,673,344,290.58\n2,908,051,423.81\nOf which: Aftrades Balances\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Securities\n162,206,231.00\n198,762,582.78\n247,261,242.79\n280,589,071.79\n355,098,840.61\n373,427,746.87\n355,071,440.18\n307,661,257.90\n318,264,602.32\n358,416,719.69\n479,833,629.00\n683,711,355.79\n1,196,912,067.35\nOther Items(Net)\n-2,388,281,414.87\n-2,576,477,704.28 -2,860,511,797.67\n-2,963,504,823.70\n-3,058,656,720.83\n-3,218,570,564.85\n-3,811,099,538.68\n-4,205,812,628.87\n-4,130,691,813.85\n-4,712,021,791.09 -10,984,933,611.94 -24,256,074,208.16 -19,559,977,562.21\nShares and Other Equity\n-2,495,937,680.26\n-2,662,572,351.10 -2,881,231,066.44\n-2,968,624,968.16\n-3,039,020,578.83\n-3,148,249,301.82\n-3,673,971,825.27\n-4,085,919,716.08\n-4,078,823,961.23\n-4,620,636,211.04 -11,291,316,467.09 -25,202,259,045.14 -19,805,080,179.46\nOther Items(Net)\n71,183,746.71\n43,541,395.78\n-13,728,304.53\n-44,526,215.42\n-90,829,827.08\n-118,055,939.45\n-221,456,181.24\n-233,402,893.37\n-175,955,067.06\n-276,252,783.87\n-165,894,326.27\n-1,658,390.99\n-603,417,014.29\nLiabilities to Other Resident Sectors\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nDeposits and Securities Excluded from Base Mon\n36,472,518.68\n42,553,251.05\n34,447,573.30\n49,646,359.89\n71,193,685.08\n47,734,676.42\n84,328,467.83\n113,509,980.58\n124,087,214.44\n184,867,203.81\n472,277,181.43\n947,843,227.98\n848,519,631.54\nMonetary Base Incl. foreign currency clearing balances\nMonetary Base \n35,521,743.90\n37,466,335.66\n87,098,435.56\n92,268,161.94\n98,860,662.38\n104,044,194.67\n122,997,662.08\n204,036,133.91\n232,896,654.62\n276,496,079.11\n520,611,909.67\n1,064,898,441.01\n1,003,043,754.90\nBond Coins\n99,710.54\n99,710.59\n99,710.63\n99,711.37\n99,645.37\n99,645.38\n99,645.41\n99,645.43\n97,745.29\n90,572.71\n83,649.70\n80,542.92\n79,344.94\nBond Notes\n6,412,784.04\n6,554,970.13\n6,740,568.25\n7,012,718.25\n7,260,471.73\n7,472,198.27\n7,439,947.85\n7,927,761.49\n8,414,729.87\n8,902,316.39\n8,960,488.74\n10,258,707.59\n11,193,057.46\nLiabilities to ODCs\n29,009,249.32\n30,811,654.95\n80,258,156.68\n85,155,732.33\n91,500,545.27\n96,472,351.03\n115,458,068.82\n196,008,726.99\n224,384,179.46\n267,503,190.02\n511,567,771.23\n1,054,559,190.50\n991,771,352.50\n Local Currency Reserve Deposits\n28,909,888.55\n30,691,239.95\n36,208,286.92\n39,251,684.88\n45,031,513.47\n51,076,733.16\n56,112,655.93\n63,026,207.68\n72,736,726.53\n86,910,489.22\n105,795,700.01\n182,612,061.98\n243,159,063.25\n Foreign Currency Reserve Deposits\n0.00\n0.00\n43,949,504.76\n45,803,682.45\n46,368,666.81\n45,295,252.88\n59,244,974.53\n132,882,154.31\n151,547,087.93\n180,492,335.81\n405,671,706.23\n871,846,763.53\n718,611,889.52\n Exess reserves \n99,360.78\n120,414.99\n100,364.99\n100,364.99\n100,364.99\n100,364.99\n100,438.36\n100,364.99\n100,364.99\n100,364.99\n100,364.99\n100,364.99\n30,000,399.73\nPrivate Deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nSource: Reserve Bank of Zimbabwe,2023\n NB: * Other Foreign Liabilities include blocked funds amounting to USD2.2 billion assumed by the Central Bank on behalf of Government.\nTABLE 2: CENTRAL BANK SURVEY ($'000)\n \n \n \n17 \n \n \nTABLE 3 : OTHER DEPOSITORY CORPORATIONS SURVEY ( $ '000)\nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nNet Foreign Assets\n332,318,446.95\n486,393,742.88\n586,234,883.70\n560,469,720.11\n508,040,985.75\n479,074,144.60\n574,797,581.91\n752,350,429.98\n744,412,585.27\n798,521,238.87\n1,905,875,749.78\n3,867,276,441.25\n3,637,584,517.45\nClaims on Non Residents\n432,930,547.04\n606,589,993.46\n730,519,889.15\n714,553,928.34\n647,684,732.33\n656,889,016.74\n771,701,557.95\n978,124,840.54\n1,001,481,472.45\n1,117,664,547.79\n2,691,035,602.70\n5,707,374,025.18\n5,099,940,234.73\nOf Which: Foreign Currency\n159,024,593.55\n263,637,446.30\n292,402,245.17\n300,240,300.44\n286,365,213.60\n295,435,074.49\n381,966,212.75\n436,062,788.15\n425,326,479.00\n462,081,408.59\n1,048,116,376.82\n2,249,201,574.76\n1,584,403,308.04\nDeposits\n271,679,250.85\n340,293,581.80\n435,192,058.43\n412,875,019.01\n359,879,184.65\n359,872,194.36\n387,899,225.52\n540,045,460.79\n573,864,075.80\n652,301,901.26\n1,639,116,293.75\n3,441,353,382.68\n3,502,402,457.26\nOther\n2,226,702.64\n2,658,965.36\n2,925,585.55\n1,438,608.89\n1,440,334.07\n1,581,747.89\n1,836,119.68\n2,016,591.60\n2,290,917.65\n3,281,237.94\n3,802,932.12\n16,819,067.74\n13,134,469.43\nLess Liabilities to Non Residents\n100,612,100.09\n120,196,250.58\n144,285,005.45\n154,084,208.23\n139,643,746.58\n177,814,872.15\n196,903,976.04\n225,774,410.56\n257,068,887.17\n319,143,308.91\n785,159,852.92\n1,840,097,583.93\n1,462,355,717.28\nOf Which: Deposits\n58,733,325.78\n65,301,846.77\n82,156,742.51\n90,971,607.55\n92,797,127.97\n89,384,232.63\n93,815,500.56\n109,244,589.40\n121,808,803.93\n153,776,940.69\n378,197,467.04\n820,337,332.33\n764,960,085.21\nLoans\n41,878,774.31\n54,894,403.81\n62,128,262.94\n63,112,600.68\n46,846,618.61\n88,430,639.51\n103,088,475.48\n116,529,821.16\n135,260,083.25\n165,366,368.23\n406,962,385.88\n1,019,760,251.61\n697,395,632.08\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nNet Domestic Assets (NDA)\n866,386,967.85\n1,113,922,948.02\n1,325,580,796.37\n1,313,691,175.57\n1,547,753,523.21\n1,849,663,031.57\n2,086,330,268.75\n2,151,497,989.83\n2,436,728,709.28\n2,776,123,933.49\n5,305,321,211.88\n10,381,649,903.19\n9,339,710,968.86\nDomestic Claims\n790,856,307.03\n951,294,251.11\n1,129,850,559.29\n1,184,558,336.95\n1,352,525,578.38\n1,560,712,801.46\n1,833,685,570.36\n2,076,642,721.56\n2,344,581,681.58\n2,468,884,258.96\n5,233,802,367.26\n10,666,408,952.84\n9,209,603,094.31\nNet Claims on Central Government\n82,246,329.63\n92,408,121.59\n134,872,792.86\n145,200,532.03\n192,202,527.77\n281,091,634.22\n278,214,477.55\n321,905,640.90\n354,869,673.65\n382,445,410.68\n607,113,273.08\n559,297,143.29\n868,977,442.69\nClaims on Central Government\n91,609,835.37\n100,300,557.99\n143,580,041.50\n151,874,188.17\n198,933,901.98\n288,958,382.34\n320,035,802.93\n332,945,831.24\n361,058,398.93\n392,147,612.28\n657,625,000.40\n991,907,309.36\n1,249,413,254.51\nSecurities\n91,509,184.64\n100,187,059.48\n143,464,932.04\n151,757,709.91\n198,814,372.89\n288,843,960.96\n319,807,352.36\n332,626,867.19\n360,626,182.29\n391,587,790.26\n653,025,854.60\n981,773,844.67\n1,242,045,163.04\nLoans\n100,650.73\n113,498.51\n115,109.46\n116,478.26\n119,529.09\n114,421.39\n228,450.57\n318,964.05\n432,216.64\n559,822.02\n4,599,145.80\n10,133,464.70\n7,368,091.47\nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nLess Liabilities to Central Government\n9,363,505.74\n7,892,436.40\n8,707,248.64\n6,673,656.14\n6,731,374.21\n7,866,748.12\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\nOf which: Deposits\n9,363,505.74\n7,892,436.40\n8,707,248.64\n6,673,656.14\n6,731,374.21\n7,866,748.12\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n708,609,977.40\n858,886,129.52\n994,977,766.44\n1,039,357,804.92\n1,160,323,050.62\n1,279,621,167.24\n1,555,471,092.81\n1,754,737,080.66\n1,989,712,007.92\n2,086,438,848.27\n4,626,689,094.18\n10,107,111,809.54\n8,340,625,651.62\nOther Financial Corporations\n11,771,347.28\n14,375,915.86\n15,622,928.29\n140,570,187.59\n140,341,007.36\n154,024,862.75\n166,613,542.88\n179,628,996.31\n192,316,387.05\n116,592,340.90\n193,887,644.68\n359,842,961.20\n273,509,229.65\nState and Local Government\n349,675.75\n287,141.09\n306,328.41\n341,962.52\n303,552.08\n282,613.13\n251,239.62\n197,442.25\n149,777.75\n99,276.39\n80,342.62\n83,001.69\n68,073.17\nPublic Non Financial Corporations\n22,910,548.08\n46,439,978.25\n41,532,709.91\n43,441,683.85\n43,239,544.41\n50,344,903.44\n67,887,630.46\n71,408,662.97\n73,414,378.27\n82,177,434.89\n188,539,600.17\n462,710,245.53\n365,810,830.89\nPrivate Sector\n673,578,406.29\n797,783,094.32\n937,515,799.83\n855,003,970.96\n976,438,946.77\n1,074,968,787.92\n1,320,718,679.85\n1,503,501,979.13\n1,723,831,464.85\n1,887,569,796.09\n4,244,181,506.71\n9,284,475,601.11\n7,701,237,517.92\nClaims on the Central Bank\n318,260,082.09\n414,080,563.81\n503,930,421.77\n528,892,917.07\n579,137,110.76\n655,646,094.75\n706,967,379.44\n745,768,616.10\n819,662,608.72\n973,967,364.65\n2,050,173,260.89\n4,434,783,343.65\n4,138,866,267.43\nCurrency\n2,427,607.04\n2,640,635.61\n2,922,820.51\n3,022,600.98\n3,251,370.57\n3,361,701.51\n2,798,808.10\n1,880,068.97\n2,031,551.56\n1,844,655.72\n1,107,182.70\n1,984,484.37\n1,489,019.97\nReserves\n315,832,475.04\n411,439,928.20\n501,007,601.27\n525,870,316.09\n575,885,740.19\n652,284,393.24\n704,168,571.34\n743,888,547.13\n817,631,057.16\n972,122,708.94\n2,049,066,078.19\n4,424,349,970.82\n4,137,377,247.46\nSecurities\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n8,448,888.46\n0.00\nOther Claims\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLiabilities to the Central Bank\n2,814,941.97\n3,230,742.76\n3,720,151.81\n28,072,180.28\n19,973,470.74\n10,597,782.72\n4,974,293.62\n8,092,936.71\n9,639,861.61\n13,321,881.07\n78,332,582.02\n39,166,568.11\n87,827,165.17\nOther Items(Net)\n239,914,479.29\n248,221,124.14\n304,480,032.88\n371,687,898.16\n363,935,695.20\n356,098,081.93\n449,348,387.42\n662,820,411.12\n717,875,719.41\n653,405,809.04\n1,900,321,834.26\n4,680,375,825.19\n3,920,931,227.71\nShares and Other Equity\n386,432,527.29\n466,561,590.88\n528,198,118.44\n553,329,619.60\n578,767,126.22\n713,741,352.34\n712,244,902.17\n868,652,750.33\n952,418,797.50\n1,041,102,555.56\n2,087,380,382.66\n5,799,547,829.81\n5,483,957,540.60\nLiabilities to other ressident sectors\n1,339,092.93\n555,226.55\n587,178.66\n762,462.53\n339,615.56\n752,479.25\n675,534.11\n3,108,981.29\n3,714,628.40\n6,418,803.44\n30,583,343.97\n64,321,874.21\n58,256,168.71\nOther Items(Net)\n-147,857,140.93\n-218,895,693.28\n-224,305,264.21\n-182,404,183.97\n-215,171,046.59\n-358,395,749.66\n-263,572,048.85\n-208,941,320.50\n-238,257,706.49\n-394,115,549.96\n-217,641,892.37\n-1,183,493,878.83\n-1,621,282,481.61\nDeposits and Securities Included in Broad Money\n1,198,705,414.81\n1,600,316,690.89\n1,911,815,680.07\n1,874,160,895.68\n2,055,794,508.96\n2,328,737,176.16\n2,661,127,850.66\n2,903,848,419.81\n3,181,141,294.55\n3,574,645,172.37\n7,211,196,961.65\n14,248,926,344.43\n12,977,295,486.31\nDeposits Included in Broad Money\n1,190,567,540.78\n \n1,587,531,116.15\n \n1,897,768,184.73\n \n1,858,602,031.80\n \n2,042,355,987.09\n \n2,314,588,211.40\n \n2,646,071,378.63\n \n2,888,136,764.51\n \n3,165,058,675.05\n \n3,572,801,781.15\n \n7,206,537,527.79\n \n14,244,682,762.54\n \n12,975,158,042.76\n \nTransferable Deposits\n1,096,365,440.31\n \n1,453,358,587.07\n \n1,740,700,191.97\n \n1,692,150,785.93\n \n1,853,157,849.44\n \n2,081,176,430.96\n \n2,371,032,667.32\n \n2,594,362,513.35\n \n2,832,323,179.02\n \n3,303,913,423.92\n \n6,651,231,769.05\n \n13,178,109,450.38\n \n12,150,500,072.13\n \n of which FCAs\n688,801,163.42\n \n991,050,824.09\n \n1,196,071,655.58\n \n1,131,156,966.82\n \n1,211,583,916.42\n \n1,325,367,130.51\n \n1,623,313,580.02\n \n1,750,982,009.54\n \n1,865,387,117.78\n \n2,144,912,895.57\n \n5,273,965,984.48\n \n11,634,530,484.57\n \n10,099,327,960.39\n \nOther Deposits\n94,202,100.47\n134,172,529.07\n157,067,992.76\n166,451,245.87\n189,198,137.65\n233,411,780.44\n275,038,711.32\n293,774,251.17\n332,735,496.03\n268,888,357.23\n555,305,758.75\n1,066,573,312.15\n824,657,970.63\n of which FCAs\n51,808,901.22\n79,027,794.71\n77,583,912.71\n97,520,415.67\n115,079,593.63\n121,810,432.21\n159,977,076.22\n193,826,996.54\n204,002,079.62\n140,843,185.69\n366,430,904.52\n852,167,654.54\n616,409,108.42\nMoney Market Instruments\n8,137,874.02\n \n12,785,574.75\n \n14,047,495.34\n \n15,558,863.88\n \n13,438,521.87\n \n14,148,964.76\n \n15,056,472.03\n \n15,711,655.30\n \n16,082,619.50\n \n1,843,391.22\n \n4,659,433.86\n \n4,243,581.90\n \n2,137,443.55\n \nSource:Reserve Bank of Zimbabwe,2023\n \n \n \n \n18 \n \n \nForeign\nTOTAL\nEnd of\nNotes\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nOther \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\noca\nGovernemt\nOther2\nGovernment\nLocal \nPublic \n Institutional \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nGovernment\nEnterprises\nUnits\nAssets\n2020\nJan\n183.4\n \n3,176.6\n \n13,217.3\n \n1,073.2\n \n8,142.0\n \n1,811.4\n4,372.4\n20.1\n125.5\n15.0\n5.1\n12.2\n326.1\n12,115.8\n946.9\n2,965.9\n4,191.6\n9,691.7\n62,392.3\nFeb\n267.1\n \n3,136.4\n \n13,817.0\n \n1,504.5\n \n8,642.5\n \n1,532.9\n4,293.1\n20.1\n117.4\n15.5\n5.1\n11.6\n329.5\n13,632.6\n973.7\n5,441.7\n12,758.8\n10,338.7\n76,838.2\nMar\n263.6\n \n3,607.6\n \n16,167.1\n \n2,214.4\n \n12,681.9\n \n2,497.5\n4,775.6\n19.2\n0.1\n20.8\n4.4\n11.4\n765.8\n16,323.6\n1,103.1\n7,917.3\n7,042.4\n11,309.5\n86,725.4\nApr\n298.5\n \n3,642.9\n \n17,926.4\n \n1,523.3\n \n13,697.1\n \n3,056.3\n4,716.9\n18.1\n0.1\n18.4\n4.5\n9.7\n834.7\n17,280.6\n1,104.9\n7,642.8\n8,200.2\n11,988.1\n91,963.5\nMay\n330.0\n \n3,581.8\n \n21,376.4\n \n1,749.6\n \n15,757.4\n \n3,130.4\n4,579.1\n17.0\n0.1\n45.8\n4.5\n9.6\n768.0\n20,291.6\n1,280.4\n7,042.0\n8,823.5\n12,139.9\n100,927.2\nJun\n606.6\n \n9,584.7\n \n29,457.9\n \n3,974.7\n \n35,786.5\n \n7,527.5\n6,264.7\n13.8\n0.1\n90.1\n4.3\n9.4\n2,010.8\n30,567.5\n2,011.1\n24,299.3\n17,433.0\n23,843.0\n193,485.0\nJul\n690.8\n \n18,357.0\n \n54,139.7\n \n5,578.7\n \n42,159.7\n \n11,399.9\n6,760.1\n13.4\n0.0\n74.6\n4.3\n12.6\n1,025.8\n36,840.5\n3,070.4\n28,551.1\n14,418.6\n24,902.0\n247,999.1\nAug\n975.1\n \n28,776.0\n \n54,868.5\n \n4,623.1\n \n41,100.2\n \n14,219.2\n6,883.5\n13.1\n0.0\n39.1\n14.0\n14.7\n1,046.3\n43,502.9\n3,130.9\n25,354.6\n14,240.7\n26,391.3\n265,193.4\nSep\n1,084.2\n \n30,217.6\n \n56,679.6\n \n4,426.6\n \n39,530.8\n \n14,126.8\n6,676.2\n12.9\n0.0\n107.8\n9.6\n22.3\n1,050.4\n45,297.5\n3,822.4\n28,289.4\n20,662.0\n27,055.5\n279,071.4\nOct\n1,064.2\n \n32,235.0\n \n66,948.5\n \n4,457.3\n \n40,092.7\n \n13,530.7\n8,068.2\n12.3\n20.1\n222.0\n17.6\n22.2\n1,019.0\n53,116.5\n3,869.6\n29,764.7\n19,044.4\n27,327.7\n300,832.8\nNov\n1,063.6\n \n34,673.9\n \n73,237.2\n \n4,211.3\n \n41,173.6\n \n14,134.7\n8,961.5\n11.6\n0.0\n268.2\n20.0\n16.8\n1,269.9\n60,179.7\n3,678.7\n29,821.2\n19,694.9\n27,426.0\n319,842.9\nDec\n1,177.8\n \n39,886.8\n \n76,076.5\n \n5,771.7\n \n38,623.2\n \n10,803.6\n12,072.8\n11.2\n0.0\n252.2\n23.3\n26.8\n1,269.0\n69,691.0\n4,566.9\n29,608.0\n15,822.0\n36,808.1\n342,490.8\n2021\nJan\n1,483.3\n \n42,733.9\n \n77,994.4\n \n13,109.2\n \n40,071.8\n \n10,922.0\n10,322.7\n10.2\n0.0\n212.4\n16.7\n18.0\n1,264.3\n77,984.0\n5,315.2\n25,036.2\n15,951.2\n41,028.5\n363,474.0\nFeb\n1,735.4\n \n41,180.7\n \n76,140.3\n \n17,748.1\n \n39,141.4\n \n6,341.4\n15,612.1\n9.2\n0.0\n238.0\n24.1\n22.7\n1,493.7\n84,845.3\n5,413.6\n28,339.2\n19,441.2\n42,761.3\n380,487.7\nMar\n1,457.1\n \n40,953.3\n \n83,032.1\n \n6,945.5\n \n42,516.8\n \n8,733.6\n17,602.7\n8.4\n19.2\n449.7\n15.2\n21.7\n1,400.3\n90,291.7\n4,912.2\n32,908.1\n22,849.5\n40,104.9\n394,221.9\nApr\n1,699.7\n \n40,964.4\n \n85,330.2\n \n6,844.8\n \n49,733.4\n \n7,679.0\n19,384.3\n7.7\n19.2\n571.8\n19.9\n12.7\n1,336.7\n104,118.1\n5,432.6\n34,537.9\n25,207.8\n41,034.6\n423,934.8\nMay\n1,906.1\n \n30,579.1\n \n94,330.9\n \n7,907.2\n \n63,644.8\n \n11,582.4\n19,197.1\n7.0\n152.7\n611.0\n21.8\n16.6\n1,263.7\n111,185.7\n5,063.0\n35,592.3\n24,975.4\n40,256.6\n448,293.6\nJun\n1,702.8\n \n30,255.6\n \n75,795.2\n \n25,605.9\n \n72,780.6\n \n17,601.3\n17,610.8\n6.5\n19.5\n1,385.2\n17.9\n77.8\n1,511.9\n125,592.3\n5,203.8\n26,856.5\n29,616.4\n42,418.7\n474,058.5\nJul\n2,139.9\n \n30,509.1\n \n104,983.5\n \n17,817.9\n \n82,032.9\n \n25,314.3\n23,160.6\n6.0\n290.8\n1,264.1\n17.3\n67.8\n1,351.1\n135,107.8\n5,762.2\n26,869.2\n33,897.2\n42,726.7\n533,318.3\nAug\n2,551.1\n \n33,323.4\n \n93,806.9\n \n11,919.2\n \n72,753.9\n \n25,194.9\n35,371.1\n5.4\n339.7\n1,111.2\n22.5\n63.9\n1,583.3\n150,558.7\n7,014.2\n32,281.1\n34,820.2\n46,819.4\n549,540.1\nSep\n2,853.7\n \n38,500.1\n \n100,996.0\n \n8,626.8\n \n68,707.9\n \n25,023.4\n36,196.3\n5.1\n366.9\n948.5\n21.1\n62.5\n1,531.1\n154,818.9\n6,587.8\n31,981.0\n35,461.8\n45,544.7\n558,233.5\nOct\n2,611.1\n \n50,074.7\n \n108,009.2\n \n9,575.8\n \n89,822.4\n \n26,924.2\n43,786.5\n4.3\n188.1\n1,054.2\n21.2\n75.4\n1,683.9\n172,358.5\n6,987.7\n49,581.0\n47,370.6\n47,611.9\n657,740.6\nNov\n2,721.5\n \n53,424.3\n \n107,781.7\n \n15,560.6\n \n74,072.3\n \n29,748.5\n47,418.1\n3.7\n187.0\n2,678.7\n21.2\n74.8\n1,882.5\n195,765.6\n7,682.2\n52,327.7\n45,567.2\n54,967.5\n691,885.0\nDec\n2,838.3\n \n50,031.0\n \n118,451.3\n \n13,654.0\n \n91,352.6\n \n33,690.9\n41,452.1\n3.0\n186.0\n6,192.4\n21.1\n167.5\n2,998.6\n212,438.0\n14,917.3\n60,917.0\n48,759.9\n71,817.7\n769,888.8\n2022\nJan\n2,891.2\n \n53,378.3\n \n116,654.8\n \n13,232.3\n \n69,668.2\n \n30,774.3\n40,241.6\n2.4\n186.8\n2,906.7\n20.3\n163.0\n4,023.2\n228,616.6\n16,284.0\n53,627.8\n55,303.6\n85,737.0\n773,712.0\nFeb\n2,577.7\n \n62,064.5\n \n122,479.8\n \n17,480.5\n \n76,802.2\n \n28,703.5\n49,241.8\n1.6\n0.0\n3,242.5\n20.3\n158.1\n5,761.9\n249,205.9\n16,681.8\n55,099.6\n59,171.4\n86,732.0\n835,425.0\nMar\n2,111.5\n \n76,544.2\n \n142,962.5\n \n19,239.6\n \n87,884.5\n \n43,284.1\n50,566.9\n0.9\n0.0\n2,970.2\n19.4\n253.4\n6,635.8\n296,282.4\n16,435.1\n65,660.6\n69,287.0\n94,293.1\n974,431.2\nApr\n2,624.9\n \n74,716.9\n \n160,466.5\n \n28,352.1\n \n123,190.3\n \n26,628.8\n63,944.8\n0.2\n0.0\n2,583.9\n37.5\n252.4\n7,258.1\n338,207.2\n30,154.8\n53,372.3\n73,993.0\n90,352.8\n1,076,136.5\nMay\n3,155.9\n \n142,118.9\n \n236,166.0\n \n35,928.9\n \n207,812.8\n \n61,757.6\n70,936.8\n0.0\n155.0\n3,762.8\n41.3\n289.0\n16,588.0\n455,287.9\n36,125.5\n134,993.5\n111,577.7\n130,617.1\n1,647,314.7\nJun\n2,801.2\n \n138,347.1\n \n266,691.8\n \n45,952.0\n \n241,920.1\n \n63,631.8\n86,890.0\n0.0\n654.0\n5,297.4\n61.2\n226.3\n14,282.6\n549,799.2\n38,578.3\n169,511.8\n130,604.3\n205,601.3\n1,960,850.3\nJul\n2,427.6\n \n159,024.6\n \n315,832.5\n \n39,388.2\n \n230,432.5\n \n41,246.8\n91,509.2\n0.0\n394.3\n4,940.5\n100.7\n349.7\n22,911.0\n638,556.7\n45,361.4\n144,090.2\n143,606.3\n242,024.6\n2,122,196.7\nAug\n2,640.6\n \n263,637.4\n \n411,439.9\n \n69,203.5\n \n311,107.0\n \n29,186.6\n100,187.1\n0.0\n330.1\n6,912.2\n113.5\n287.1\n46,504.1\n764,466.3\n46,788.2\n167,029.4\n251,442.9\n244,934.2\n2,716,210.1\nSep\n3,030.7\n \n289,230.8\n \n504,071.1\n \n75,446.7\n \n417,007.1\n \n18,185.0\n143,464.9\n0.0\n267.4\n8,265.9\n115.1\n306.3\n41,560.9\n902,078.3\n51,664.5\n146,133.1\n231,760.0\n285,781.8\n3,118,369.8\nOct\n3,022.6\n \n300,240.3\n \n525,870.3\n \n104,483.2\n \n389,979.7\n \n22,895.3\n151,757.7\n0.0\n204.7\n4,590.6\n116.5\n342.0\n43,335.5\n936,397.1\n58,632.8\n165,306.9\n267,183.8\n298,996.3\n3,273,355.4\nNov\n3,251.4\n \n286,365.2\n \n575,885.7\n \n111,716.1\n \n342,790.1\n \n17,089.0\n198,814.4\n0.0\n142.0\n6,078.2\n119.5\n303.6\n43,195.4\n1,042,144.5\n73,069.8\n170,944.8\n232,107.1\n302,373.7\n3,406,390.5\nDec\n3,361.7\n \n295,435.1\n \n652,284.4\n \n119,932.8\n \n351,906.8\n \n7,965.4\n288,844.0\n0.0\n20,072.7\n8,831.7\n114.4\n282.6\n30,272.3\n1,143,910.8\n84,048.5\n159,126.2\n234,748.7\n418,944.7\n3,820,082.5\n2023\nJan\n4,923.3\n \n379,841.7\n \n704,168.6\n \n151,980.1\n \n389,342.8\n \n-1,443.6\n319,807.4\n0.0\n23,774.5\n8,624.7\n228.5\n251.2\n44,113.2\n1,348,919.7\n137,477.6\n227,545.4\n251,246.0\n451,149.8\n4,441,950.8\nFeb\n1,880.1\n \n436,062.8\n \n743,888.5\n \n81,067.5\n \n518,081.0\n \n21,964.4\n332,626.9\n0.0\n26,717.2\n6,974.7\n319.0\n197.4\n44,691.5\n1,538,078.6\n142,383.8\n226,933.0\n281,339.4\n490,831.3\n4,894,037.1\nMar\n2,031.6\n \n425,326.5\n \n817,631.1\n \n112,374.3\n \n531,935.4\n \n41,928.7\n360,626.2\n0.0\n24,689.0\n10,382.7\n432.2\n149.8\n48,725.4\n1,745,783.1\n166,893.5\n554,840.9\n315,882.3\n532,130.1\n5,691,762.4\nApr\n1,844.7\n \n462,081.4\n \n972,122.7\n \n161,740.7\n \n620,095.0\n \n32,207.0\n391,587.8\n0.0\n28,119.0\n19,573.0\n559.8\n99.3\n54,058.4\n1,822,350.9\n178,895.0\n214,270.9\n411,870.0\n572,012.3\n5,943,487.7\nMay\n1,107.2\n \n1,048,116.4\n \n2,049,066.1\n \n309,234.1\n \n1,554,969.0\n \n84,147.3\n653,025.9\n0.0\n76,351.5\n16,564.4\n4,599.1\n80.3\n112,188.1\n4,068,894.1\n366,505.1\n607,438.1\n788,546.8\n884,349.9\n12,625,183.4\nJun\n1,984.5\n \n2,249,201.6\n \n4,424,350.0\n \n471,360.3\n \n3,050,984.1\n \n390,369.2\n981,773.8\n0.0\n212,126.8\n8,070.8\n18,582.4\n83.0\n260,946.3\n8,977,244.2\n669,100.1\n1,390,786.2\n1,582,985.5\n2,782,639.3\n27,472,588.1\nJul\n1,489.0\n \n1,584,403.3\n \n4,137,377.2\n \n380,493.0\n \n3,132,849.9\n \n369,552.6\n1,242,045.2\n0.0\n165,764.7\n17,713.9\n7,368.1\n68.1\n208,253.7\n7,144,225.5\n821,517.0\n829,382.3\n1,411,037.1\n3,124,457.4\n24,577,997.9\nSource:Reserve Bank of Zimbabwe,2023\nNotes\n1.Government securities includes treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households and other financial corporations.\nPublic \nEnterprises\nTABLE 4.1: OTHER DEPOSITORY CORPORATIONS -ASSETS\n$ millions\nDebt Securities\nLoans and Advances\n \n \n \n19 \n \n \nDebt Securities\nForeign Liabilities\nCapital\nContigent\nOther\nTOTAL\nand\nLiablities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2020\nJan\n28,570.4\n3,605.9\n2,358.3\n34,534.5\n1,299.1\n92.6\n35,926.3\n255.6\n3,114.7\n185.8\n336.1\n140.1\n12,285.7\n2,965.9\n7,182.1\n62,392.3\nFeb\n37,082.9\n3,939.6\n2,215.0\n43,237.5\n1,674.9\n78.2\n44,990.7\n260.1\n3,357.7\n189.6\n767.7\n154.9\n12,930.2\n5,441.7\n8,745.6\n76,838.2\nMar\n37,923.6\n4,998.7\n2,361.6\n45,283.9\n1,721.0\n409.0\n47,413.9\n476.8\n4,874.8\n258.4\n314.6\n339.9\n15,172.3\n7,917.3\n9,957.3\n86,725.4\nApr\n42,102.4\n5,060.0\n2,530.7\n49,693.1\n1,805.2\n516.3\n52,014.6\n337.6\n4,931.9\n346.4\n312.9\n233.2\n16,105.4\n7,642.8\n10,038.7\n91,963.5\nMay\n48,595.9\n6,274.7\n2,847.3\n57,717.9\n1,840.2\n630.7\n60,188.8\n359.2\n5,129.7\n536.7\n469.1\n365.4\n16,562.4\n7,042.0\n10,273.9\n100,927.2\nJun\n86,454.7\n6,715.3\n4,040.8\n97,210.8\n2,277.4\n1,479.4\n100,967.5\n863.2\n11,761.8\n887.6\n959.9\n348.2\n32,058.2\n24,299.3\n21,339.3\n193,485.0\nJul\n113,233.5\n7,957.5\n6,089.8\n127,280.8\n2,997.8\n1,731.9\n132,010.5\n1,024.3\n14,962.8\n1,387.9\n2,114.7\n348.7\n37,319.8\n28,551.1\n30,279.2\n247,999.1\nAug\n126,039.2\n8,814.1\n5,476.0\n140,329.3\n2,942.4\n850.8\n144,122.5\n1,111.7\n16,780.7\n1,837.1\n3,844.1\n422.5\n40,894.6\n25,354.6\n30,825.6\n265,193.4\nSep\n130,929.6\n9,728.6\n6,981.5\n147,639.7\n2,655.6\n1,531.5\n151,826.9\n1,083.9\n15,206.4\n1,863.1\n2,956.8\n372.2\n42,400.0\n28,289.4\n35,072.8\n279,071.4\nOct\n141,293.3\n12,094.6\n8,429.2\n161,817.1\n2,769.1\n1,799.7\n166,385.9\n1,231.9\n14,868.4\n1,812.7\n4,513.6\n441.7\n43,466.4\n29,764.7\n38,347.5\n300,832.8\nNov\n156,892.5\n13,732.4\n9,029.7\n179,654.6\n2,622.0\n1,569.9\n183,846.6\n1,237.3\n14,800.8\n1,489.5\n5,726.8\n423.6\n46,209.7\n29,821.2\n36,287.5\n319,842.9\nDec\n174,270.2\n16,788.9\n9,949.2\n201,008.3\n2,806.1\n4,340.0\n208,154.4\n1,436.2\n14,145.4\n1,318.6\n757.0\n292.0\n54,752.7\n29,608.0\n32,026.4\n342,490.8\n2021\nJan\n188,337.3\n17,667.3\n11,376.7\n217,381.3\n2,730.8\n5,453.7\n225,565.8\n1,422.4\n15,750.7\n391.1\n600.9\n376.7\n58,123.9\n25,036.2\n36,206.3\n363,474.0\nFeb\n189,154.3\n18,991.1\n14,072.8\n222,218.2\n2,959.1\n4,788.2\n229,965.5\n1,457.4\n15,908.6\n409.2\n581.4\n609.9\n63,583.8\n28,339.2\n39,632.7\n380,487.7\nMar\n193,674.2\n21,569.9\n14,209.4\n229,453.4\n4,691.2\n4,875.8\n239,020.5\n1,641.2\n14,997.2\n75.4\n1,378.2\n408.9\n67,061.8\n32,908.1\n36,730.7\n394,221.9\nApr\n219,936.5\n23,818.3\n13,746.7\n257,501.5\n2,725.1\n5,382.5\n265,609.2\n1,503.8\n15,748.4\n176.5\n939.0\n409.9\n68,812.8\n34,537.9\n36,197.4\n423,934.8\nMay\n232,585.8\n26,296.1\n18,415.5\n277,297.4\n2,205.9\n6,832.6\n286,335.9\n1,525.8\n16,063.1\n654.2\n540.1\n429.0\n69,567.0\n35,592.3\n37,586.2\n448,293.6\nJun\n249,167.5\n27,977.7\n21,449.6\n298,594.8\n2,906.1\n6,295.3\n307,796.2\n1,559.7\n15,430.6\n662.3\n939.0\n462.6\n72,403.8\n26,856.5\n47,947.9\n474,058.5\nJul\n271,359.4\n31,671.3\n23,074.4\n326,105.1\n3,016.7\n5,050.7\n334,172.4\n1,523.2\n16,041.4\n706.9\n750.8\n552.8\n76,406.3\n26,869.2\n76,295.4\n533,318.3\nAug\n275,007.8\n29,893.2\n29,352.2\n334,253.2\n3,661.5\n5,912.2\n343,826.8\n1,873.1\n18,699.5\n1,444.4\n2,300.1\n478.6\n82,627.2\n32,281.1\n66,009.2\n549,540.1\nSep\n301,829.4\n30,564.7\n26,426.5\n358,820.7\n3,719.1\n3,512.9\n366,052.6\n3,191.9\n16,236.1\n1,453.1\n71.3\n375.4\n84,564.6\n31,981.0\n54,307.5\n558,233.5\nOct\n350,366.7\n33,145.0\n27,967.9\n411,479.6\n2,824.1\n3,162.8\n417,466.5\n3,729.7\n21,509.9\n1,095.3\n1,109.9\n503.1\n92,871.8\n49,581.0\n69,873.5\n657,740.6\nNov\n363,455.0\n33,905.6\n33,256.8\n430,617.4\n3,325.7\n2,899.2\n436,842.3\n4,007.8\n19,465.9\n2,726.5\n1,556.1\n347.1\n104,310.9\n52,327.7\n70,300.6\n691,885.0\nDec\n396,412.5\n33,935.5\n37,464.8\n467,812.7\n3,922.1\n4,020.7\n475,755.5\n3,696.3\n23,643.2\n2,808.1\n2,405.3\n139.8\n128,421.4\n60,917.0\n72,102.3\n769,888.8\n2022\nJan\n392,702.2\n32,298.0\n39,346.3\n464,346.5\n2,962.5\n4,027.0\n471,336.0\n3,685.3\n25,398.5\n2,688.6\n1,416.9\n230.5\n144,852.4\n53,627.8\n70,476.0\n773,712.0\nFeb\n413,978.3\n37,494.3\n47,592.5\n499,065.1\n3,229.3\n4,407.7\n506,702.1\n4,456.2\n30,483.6\n2,120.4\n1,769.7\n226.8\n153,788.5\n55,099.6\n80,778.2\n835,425.0\nMar\n488,137.1\n37,893.9\n54,213.9\n580,244.9\n3,062.2\n5,330.5\n588,637.7\n4,510.9\n33,995.7\n2,137.9\n3,281.0\n810.6\n175,156.3\n65,660.6\n100,240.6\n974,431.2\nApr\n562,613.7\n46,129.7\n52,760.1\n661,503.5\n6,377.5\n7,656.8\n675,537.9\n4,246.9\n38,472.7\n2,173.0\n3,877.2\n486.8\n178,614.3\n53,372.3\n119,355.4\n1,076,136.5\nMay\n830,166.0\n61,112.6\n70,113.9\n961,392.5\n7,310.9\n7,417.6\n976,120.9\n6,165.3\n73,411.8\n2,383.3\n3,241.0\n321.8\n243,544.4\n134,993.5\n207,132.5\n1,647,314.7\nJun\n961,316.9\n66,716.9\n81,118.5\n1,109,152.4\n5,627.3\n10,226.2\n1,125,005.9\n7,157.9\n83,048.1\n2,898.5\n4,589.8\n345.2\n355,060.9\n169,511.8\n213,232.2\n1,960,850.3\nJul\n1,016,820.2\n79,550.5\n94,495.2\n1,190,865.8\n1,789.6\n9,363.5\n1,202,018.9\n8,137.9\n100,313.8\n2,814.9\n5,020.5\n1,339.1\n419,883.3\n144,090.2\n238,578.1\n2,122,196.7\nAug\n1,367,431.3\n85,931.5\n134,512.9\n1,587,875.7\n2,415.4\n7,892.4\n1,598,183.5\n12,785.6\n119,851.6\n3,230.7\n5,771.2\n555.2\n491,336.5\n167,029.4\n317,466.4\n2,716,210.1\nSep\n1,648,027.7\n92,678.5\n157,504.6\n1,898,210.8\n1,482.9\n8,707.2\n1,908,401.0\n14,047.5\n143,842.3\n3,720.2\n9,246.7\n587.2\n553,942.2\n146,133.1\n338,449.6\n3,118,369.8\nOct\n1,615,381.5\n76,774.2\n166,880.7\n1,859,036.4\n2,028.0\n6,673.7\n1,867,738.0\n15,558.9\n153,649.9\n28,072.2\n8,610.3\n762.5\n581,740.3\n165,306.9\n451,916.4\n3,273,355.4\nNov\n1,771,644.8\n81,518.1\n189,465.9\n2,042,628.9\n1,547.6\n6,731.4\n2,050,907.9\n13,438.5\n139,370.8\n19,973.5\n10,489.1\n339.6\n612,977.2\n170,944.8\n387,949.1\n3,406,390.5\nDec\n1,990,867.6\n90,317.0\n234,004.4\n2,315,189.0\n2,754.1\n7,866.7\n2,325,809.8\n14,149.0\n177,214.1\n10,597.8\n15,234.4\n752.5\n750,161.5\n159,126.2\n367,037.4\n3,820,082.5\n2023\nJan\n2,270,946.6\n100,094.1\n275,805.1\n2,646,845.8\n1,676.5\n41,821.3\n2,690,343.7\n15,056.5\n196,129.5\n4,974.3\n12,291.7\n675.5\n881,874.7\n227,545.4\n413,059.5\n4,441,950.8\nFeb\n2,496,192.1\n98,177.2\n294,332.5\n2,888,701.8\n1,956.9\n11,040.2\n2,901,698.9\n15,711.7\n225,209.4\n8,092.9\n20,822.5\n3,109.0\n951,831.6\n226,933.0\n540,628.1\n4,894,037.1\nMar\n2,710,394.6\n121,937.7\n333,589.3\n3,165,921.6\n1,430.8\n6,188.7\n3,173,541.1\n16,082.6\n256,206.0\n9,639.9\n22,996.8\n3,714.6\n1,036,325.4\n554,840.9\n618,415.2\n5,691,762.4\nApr\n3,144,048.4\n159,872.5\n269,932.0\n3,573,852.9\n573.4\n9,702.2\n3,584,128.5\n1,843.4\n318,092.2\n13,321.9\n29,787.9\n6,418.8\n1,137,637.3\n214,270.9\n637,986.8\n5,943,487.7\nMay\n6,481,742.5\n169,496.7\n556,927.2\n7,208,166.4\n1,068.6\n50,511.7\n7,259,746.7\n4,659.4\n783,531.0\n78,332.6\n74,083.0\n30,583.3\n2,224,856.6\n607,438.1\n1,561,952.6\n12,625,183.4\nJun\n12,937,869.2\n240,252.2\n1,073,317.8\n14,251,439.2\n4,578.8\n432,610.2\n14,688,628.1\n4,243.6\n1,833,341.2\n39,166.6\n112,338.9\n64,321.9\n6,245,056.0 1,390,786.2 3,094,705.7\n27,472,588.1\nJul\n11,864,787.9\n285,723.5\n828,095.7\n12,978,607.1\n30,380.7\n380,435.8\n13,389,423.7\n2,137.4\n1,458,906.6\n87,827.2\n160,696.4\n58,256.2\n5,865,068.7\n829,382.3\n2,726,299.5\n24,577,997.9\nSource:Reserve Bank of Zimbabwe,2023\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\n$ millions\n \n \n \n20 \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nOther \nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nGovernment\nGovernment\nEnterprises\n Institutional Units3\nOther claims\nAssets\nOther Assets\nAssets\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2020\nJan\n165.80\n \n2,845.62\n \n12,018.43\n \n708.00\n \n7,706.57\n \n1,811.38\n \n4,029.43\n \n-\n \n125.52\n \n14.97\n \n5.11\n \n12.17\n \n326.11\n \n10,766.91\n \n77.59\n \n2,965.93\n \n3,395.90\n \n8,058.15\n \n55,033.6\n \nFeb\n251.70\n \n2,756.57\n \n12,731.97\n \n889.16\n \n8,264.76\n \n1,532.87\n \n3,877.19\n \n-\n \n117.45\n \n13.99\n \n5.15\n \n11.56\n \n329.47\n \n11,656.91\n \n88.37\n \n5,441.70\n \n11,907.90\n \n8,653.69\n \n68,530.4\n \nMar\n242.41\n \n3,063.92\n \n14,545.58\n \n1,948.14\n \n12,381.17\n \n2,497.47\n \n4,373.76\n \n-\n \n0.08\n \n20.23\n \n4.39\n \n11.39\n \n765.82\n \n14,041.67\n \n127.46\n \n7,917.31\n \n5,718.53\n \n9,244.62\n \n76,904.0\n \nApr\n263.29\n \n3,147.75\n \n16,673.44\n \n1,287.51\n \n13,285.14\n \n3,056.32\n \n4,235.96\n \n-\n \n0.08\n \n18.39\n \n4.47\n \n9.75\n \n834.72\n \n14,864.30\n \n129.90\n \n7,642.80\n \n6,534.14\n \n9,703.93\n \n81,691.9\n \nMay\n284.33\n \n3,144.57\n \n19,827.46\n \n1,553.68\n \n15,003.29\n \n3,130.38\n \n4,160.50\n \n-\n \n0.12\n \n45.79\n \n4.53\n \n9.61\n \n768.01\n \n17,762.27\n \n143.44\n \n7,042.04\n \n6,012.40\n \n9,845.09\n \n88,737.5\n \nJun\n515.11\n \n8,372.39\n \n26,368.55\n \n3,570.85\n \n34,550.44\n \n7,527.46\n \n5,841.98\n \n-\n \n0.12\n \n90.14\n \n4.29\n \n9.41\n \n2,010.79\n \n26,638.87\n \n215.56\n \n24,299.33\n \n14,590.26\n \n18,983.05\n \n173,588.6\n \nJul\n577.99\n \n16,536.53\n \n49,470.13\n \n4,219.81\n \n40,259.84\n \n11,399.93\n \n6,357.84\n \n-\n \n-\n \n74.57\n \n4.33\n \n12.61\n \n1,025.78\n \n33,054.99\n \n229.06\n \n28,551.07\n \n10,247.64\n \n19,646.49\n \n221,668.6\n \nAug\n821.16\n \n26,519.73\n \n49,165.59\n \n4,265.44\n \n38,763.72\n \n14,219.24\n \n6,484.68\n \n-\n \n-\n \n39.07\n \n14.05\n \n14.74\n \n1,046.29\n \n38,741.31\n \n231.00\n \n25,354.64\n \n9,460.49\n \n19,961.16\n \n235,102.3\n \nSep\n891.26\n \n27,646.41\n \n51,169.67\n \n3,898.65\n \n38,420.20\n \n14,126.83\n \n6,354.19\n \n-\n \n-\n \n107.40\n \n9.61\n \n22.30\n \n1,050.38\n \n41,088.91\n \n228.95\n \n28,289.36\n \n17,608.70\n \n19,375.08\n \n250,287.9\n \nOct\n896.48\n \n29,309.79\n \n60,589.19\n \n3,602.58\n \n38,877.31\n \n13,530.74\n \n7,763.97\n \n-\n \n20.06\n \n109.83\n \n17.57\n \n22.18\n \n1,019.00\n \n48,440.92\n \n268.07\n \n29,764.70\n \n15,978.22\n \n19,616.63\n \n269,827.2\n \nNov\n919.42\n \n31,596.89\n \n67,899.10\n \n3,494.87\n \n39,693.38\n \n14,134.74\n \n7,098.29\n \n-\n \n0.02\n \n110.37\n \n20.00\n \n16.81\n \n1,269.94\n \n54,496.74\n \n259.90\n \n29,821.16\n \n16,683.48\n \n19,526.70\n \n287,041.8\n \nDec\n1,019.76\n \n36,507.59\n \n70,392.07\n \n4,949.48\n \n37,346.17\n \n10,803.58\n \n9,985.57\n \n-\n \n-\n \n1.18\n \n23.30\n \n26.76\n \n1,269.01\n \n62,953.03\n \n718.16\n \n29,608.01\n \n12,793.91\n \n28,230.82\n \n306,628.4\n \n2021\nJan\n1,237.43\n \n39,565.64\n \n71,463.64\n \n12,288.89\n \n39,092.85\n \n10,921.99\n \n8,281.80\n \n-\n \n-\n \n1.18\n \n16.67\n \n18.01\n \n1,264.28\n \n71,090.96\n \n718.83\n \n25,036.22\n \n12,333.21\n \n32,123.11\n \n325,454.7\n \nFeb\n1,320.27\n \n38,100.03\n \n69,341.48\n \n16,867.76\n \n38,108.83\n \n6,341.39\n \n12,518.15\n \n-\n \n-\n \n1.26\n \n24.15\n \n22.69\n \n1,493.66\n \n77,324.34\n \n774.89\n \n28,339.17\n \n15,953.14\n \n33,612.14\n \n340,143.4\n \nMar\n1,244.16\n \n38,369.53\n \n76,479.44\n \n5,317.61\n \n41,401.24\n \n8,733.65\n \n15,889.61\n \n-\n \n19.21\n \n34.56\n \n15.17\n \n21.67\n \n1,309.75\n \n80,607.03\n \n878.97\n \n32,908.13\n \n19,302.34\n \n30,861.86\n \n353,393.9\n \nApr\n1,430.83\n \n38,008.89\n \n79,592.64\n \n5,639.40\n \n48,564.03\n \n7,679.05\n \n18,267.01\n \n-\n \n19.23\n \n62.89\n \n19.86\n \n12.71\n \n1,336.70\n \n91,062.16\n \n956.75\n \n34,537.88\n \n21,214.88\n \n32,383.77\n \n380,788.7\n \nMay\n1,648.09\n \n28,677.21\n \n87,611.51\n \n6,479.66\n \n59,745.10\n \n11,582.44\n \n18,846.75\n \n-\n \n152.75\n \n93.37\n \n21.77\n \n16.58\n \n1,263.75\n \n94,790.46\n \n990.41\n \n35,592.28\n \n21,398.95\n \n31,307.45\n \n400,218.5\n \nJun\n1,419.27\n \n28,452.53\n \n69,413.26\n \n24,215.35\n \n70,835.98\n \n17,601.31\n \n17,152.75\n \n-\n \n19.46\n \n92.91\n \n17.91\n \n77.79\n \n1,511.86\n \n106,954.15\n \n1,247.08\n \n26,856.45\n \n26,444.57\n \n33,288.94\n \n425,601.6\n \nJul\n1,794.72\n \n29,100.73\n \n97,429.50\n \n15,901.02\n \n79,937.02\n \n25,314.30\n \n21,665.10\n \n-\n \n290.76\n \n47.39\n \n17.32\n \n67.80\n \n1,351.13\n \n117,348.16\n \n1,301.18\n \n26,869.18\n \n29,079.64\n \n33,587.68\n \n481,102.6\n \nAug\n2,137.72\n \n31,734.84\n \n85,441.98\n \n9,099.10\n \n70,391.64\n \n25,194.95\n \n31,434.20\n \n-\n \n339.72\n \n51.28\n \n22.49\n \n63.94\n \n1,583.28\n \n132,522.63\n \n1,337.19\n \n32,281.12\n \n30,022.43\n \n37,697.05\n \n491,355.6\n \nSep\n2,417.81\n \n36,259.54\n \n93,032.71\n \n6,164.78\n \n66,640.78\n \n25,023.38\n \n31,460.81\n \n-\n \n366.88\n \n57.60\n \n21.07\n \n62.45\n \n1,531.08\n \n134,780.92\n \n1,342.62\n \n31,980.97\n \n30,439.34\n \n34,630.85\n \n496,213.6\n \nOct\n1,993.06\n \n47,379.62\n \n99,470.02\n \n7,339.71\n \n86,302.62\n \n26,924.18\n \n37,639.16\n \n-\n \n188.07\n \n121.59\n \n21.20\n \n75.41\n \n1,683.89\n \n149,477.36\n \n1,523.34\n \n49,580.96\n \n40,853.06\n \n36,664.31\n \n587,237.6\n \nNov\n2,168.80\n \n49,327.15\n \n100,125.90\n \n12,723.73\n \n71,667.33\n \n29,748.47\n \n41,015.56\n \n-\n \n187.03\n \n999.12\n \n21.24\n \n74.76\n \n1,882.53\n \n168,661.25\n \n1,484.24\n \n52,327.68\n \n40,073.22\n \n43,878.52\n \n616,366.5\n \nDec\n2,315.32\n \n46,412.99\n \n109,803.84\n \n10,942.92\n \n87,347.07\n \n33,690.93\n \n38,610.29\n \n-\n \n185.99\n \n4,146.13\n \n21.09\n \n167.53\n \n2,798.61\n \n184,836.87\n \n3,368.75\n \n60,916.98\n \n41,811.67\n \n59,011.63\n \n686,388.6\n \n2022\nJan\n2,359.27\n \n49,206.02\n \n108,119.97\n \n10,419.90\n \n66,808.45\n \n30,774.31\n \n38,636.84\n \n-\n \n186.80\n \n801.50\n \n20.33\n \n163.02\n \n3,628.73\n \n199,495.34\n \n2,997.94\n \n53,627.76\n \n47,405.91\n \n69,989.80\n \n684,641.9\n \nFeb\n1,971.78\n \n57,553.54\n \n112,522.99\n \n14,300.66\n \n70,750.63\n \n28,703.53\n \n44,705.21\n \n-\n \n-\n \n976.55\n \n20.34\n \n158.06\n \n5,367.16\n \n215,520.37\n \n3,055.50\n \n55,099.61\n \n53,459.12\n \n70,832.47\n \n734,997.5\n \nMar\n1,541.49\n \n70,856.33\n \n130,423.48\n \n15,503.46\n \n82,662.70\n \n43,284.13\n \n44,874.23\n \n-\n \n-\n \n1,380.20\n \n19.40\n \n253.42\n \n6,240.94\n \n258,715.05\n \n3,092.69\n \n65,660.61\n \n58,874.69\n \n76,938.87\n \n860,321.7\n \nApr\n1,939.64\n \n70,204.43\n \n144,168.02\n \n23,452.88\n \n117,033.42\n \n26,628.79\n \n57,772.47\n \n-\n \n-\n \n722.54\n \n37.54\n \n252.44\n \n6,858.06\n \n305,476.79\n \n4,348.46\n \n53,372.28\n \n62,788.55\n \n71,414.75\n \n946,471.1\n \nMay\n2,397.94\n \n131,996.38\n \n211,837.59\n \n31,586.61\n \n190,366.81\n \n61,757.62\n \n64,373.91\n \n-\n \n154.99\n \n1,559.14\n \n41.28\n \n289.00\n \n16,193.81\n \n398,048.90\n \n4,712.74\n \n134,993.54\n \n94,851.60\n \n111,543.84\n \n1,456,705.7\n \nJun\n2,263.18\n \n127,839.16\n \n234,109.43\n \n40,937.28\n \n219,607.39\n \n63,631.76\n \n83,690.44\n \n-\n \n653.97\n \n2,159.12\n \n61.20\n \n226.29\n \n13,888.60\n \n478,163.38\n \n8,954.46\n \n169,511.81\n \n110,528.09\n \n168,440.54\n \n1,724,666.1\n \nJul\n1,578.47\n \n147,217.74\n \n284,912.89\n \n34,334.13\n \n202,815.28\n \n41,246.78\n \n86,971.63\n \n-\n \n394.34\n \n1,852.14\n \n100.65\n \n349.68\n \n22,516.21\n \n556,692.12\n \n9,737.92\n \n144,090.18\n \n129,869.55\n \n192,524.32\n \n1,857,204.0\n \nAug\n1,630.70\n \n247,190.46\n \n377,078.80\n \n64,650.96\n \n273,181.97\n \n29,186.59\n \n95,346.12\n \n-\n \n330.12\n \n3,556.96\n \n113.50\n \n287.14\n \n26,564.57\n \n681,253.30\n \n11,493.92\n \n167,029.36\n \n238,442.98\n \n194,745.11\n \n2,412,082.6\n \nSep\n1,791.71\n \n270,594.59\n \n465,301.31\n \n68,020.95\n \n370,323.69\n \n18,184.96\n \n134,414.53\n \n-\n \n267.40\n \n4,916.56\n \n115.11\n \n306.33\n \n21,773.50\n \n806,774.24\n \n12,680.89\n \n146,133.14\n \n215,417.68\n \n219,933.24\n \n2,756,949.8\n \nOct\n1,704.79\n \n281,204.64\n \n480,106.49\n \n94,573.08\n \n343,440.15\n \n22,895.35\n \n136,939.74\n \n-\n \n204.69\n \n2,201.55\n \n116.48\n \n341.96\n \n22,935.50\n \n852,069.39\n \n15,525.65\n \n165,306.91\n \n232,188.99\n \n245,924.22\n \n2,897,679.6\n \nNov\n1,644.95\n \n259,109.18\n \n533,438.97\n \n101,870.32\n \n299,715.01\n \n17,089.04\n \n180,534.44\n \n-\n \n141.97\n \n2,292.28\n \n119.53\n \n303.55\n \n22,178.73\n \n960,814.77\n \n15,450.39\n \n170,944.78\n \n196,338.19\n \n250,551.19\n \n3,012,537.3\n \nDec\n1,778.71\n \n263,863.65\n \n603,136.26\n \n110,935.77\n \n299,087.30\n \n7,965.37\n \n266,725.41\n \n-\n \n79.26\n \n3,887.78\n \n114.42\n \n282.61\n \n30,272.25\n \n1,066,654.12\n \n16,130.63\n \n159,126.16\n \n189,560.01\n \n344,235.10\n \n3,363,834.8\n \n2023\nJan\n2,391.61\n \n340,953.56\n \n654,740.29\n \n143,455.70\n \n335,380.17\n \n(1,443.59)\n \n301,026.07\n \n-\n \n105.97\n \n4,873.87\n \n228.45\n \n251.24\n \n44,113.17\n \n1,307,512.98\n \n17,767.70\n \n227,545.42\n \n204,830.78\n \n374,080.77\n \n3,957,814.2\n \nFeb\n1,470.56\n \n366,544.71\n \n691,937.49\n \n71,097.36\n \n452,795.43\n \n21,074.53\n \n306,913.92\n \n-\n \n50.02\n \n1,524.98\n \n318.96\n \n197.44\n \n44,691.50\n \n1,481,851.05\n \n18,037.18\n \n226,932.96\n \n224,983.29\n \n411,002.80\n \n4,321,424.2\n \nMar\n1,771.98\n \n344,570.46\n \n755,463.34\n \n103,284.07\n \n478,333.21\n \n41,928.66\n \n330,669.68\n \n-\n \n-\n \n3,884.11\n \n432.22\n \n149.78\n \n48,725.38\n \n1,679,284.89\n \n28,439.56\n \n554,840.85\n \n254,605.57\n \n438,790.17\n \n5,065,173.9\n \nApr\n1,631.24\n \n388,822.83\n \n903,029.49\n \n144,252.31\n \n555,886.92\n \n32,206.95\n \n361,846.09\n \n-\n \n-\n \n8,716.45\n \n559.82\n \n99.28\n \n54,058.39\n \n1,722,384.40\n \n28,899.91\n \n214,270.92\n \n321,765.39\n \n476,263.19\n \n5,214,693.6\n \nMay\n1,010.26\n \n907,818.70\n \n1,932,225.57\n \n281,052.93\n \n1,351,116.97\n \n84,147.32\n \n570,367.60\n \n-\n \n-\n \n8,974.78\n \n4,599.15\n \n80.34\n \n112,188.06\n \n3,844,133.80\n \n65,696.39\n \n607,438.10\n \n669,908.72\n \n758,154.17\n \n11,198,912.9\n \nJun\n1,762.11\n \n1,979,000.71\n \n4,218,755.04\n \n444,538.09\n \n2,584,596.63\n \n350,042.51\n \n865,465.55\n \n-\n \n-\n \n221.09\n \n10,133.46\n \n8,052.34\n \n260,946.26\n \n8,487,837.63\n \n92,224.26\n \n1,390,786.24\n \n1,304,228.92\n \n2,222,499.38\n \n24,221,090.2\n \nJul\n1,305.13\n \n1,428,604.02\n \n3,898,282.53\n \n359,151.15\n \n2,646,743.26\n \n337,541.82\n \n1,133,463.14\n \n-\n \n-\n \n153.30\n \n7,368.09\n \n68.07\n \n208,253.70\n \n6,917,007.30\n \n129,308.58\n \n829,382.28\n \n1,155,945.57\n \n2,438,538.20\n \n21,491,116.1\n \nSource:Reserve Bank of Zimbabwe,2023\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households and other financial corporations, \nTABLE 5.1: COMMERCIAL BANKS -ASSETS\n$ millions\nDebt Securities\nLoans and Advances\n \n \n \n21 \n \n \nZWL$ millions\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nDebt Securities\nForeign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2020\nJan\n27,276.4\n1,787.3\n1,876.0\n30,939.8\n1,026.0\n76.3\n32,042.1\n232.1\n2,170.0\n185.8\n236.2\n140.1\n10,357.6\n2,965.9\n6,703.8\n55,033.6\nFeb\n35,796.5\n1,869.8\n1,712.8\n39,379.1\n1,404.1\n62.2\n40,845.3\n238.9\n2,391.2\n189.6\n209.2\n154.9\n10,877.8\n5,441.7\n8,181.8\n68,530.4\nMar\n36,078.2\n2,458.2\n1,884.9\n40,421.2\n1,430.6\n393.1\n42,245.0\n468.8\n3,731.4\n258.4\n181.2\n339.9\n12,487.9\n7,917.3\n9,274.0\n76,904.0\nApr\n40,156.4\n2,457.6\n2,078.8\n44,692.9\n1,514.8\n496.9\n46,704.6\n333.2\n3,779.7\n346.4\n172.1\n233.2\n13,105.1\n7,642.8\n9,374.8\n81,691.9\nMay\n46,306.1\n2,502.0\n2,405.7\n51,213.8\n1,399.0\n611.4\n53,224.1\n324.9\n3,968.6\n536.7\n319.4\n365.4\n13,454.1\n7,042.0\n9,502.3\n88,737.5\nJun\n67,548.1\n17,859.0\n3,562.0\n88,969.1\n1,931.1\n1,453.1\n92,353.3\n856.9\n9,116.9\n887.6\n681.7\n348.2\n24,773.8\n24,299.3\n20,270.9\n173,588.6\nJul\n89,092.1\n20,865.7\n5,595.6\n115,553.4\n2,671.5\n1,702.4\n119,927.3\n1,014.3\n11,100.4\n1,387.9\n1,907.7\n348.7\n28,563.5\n28,551.1\n28,867.6\n221,668.6\nAug\n102,750.2\n20,005.2\n4,891.9\n127,647.3\n2,577.9\n824.8\n131,049.9\n1,101.5\n12,302.3\n1,837.1\n3,658.1\n412.5\n30,713.4\n25,354.6\n28,672.9\n235,102.3\nSep\n104,770.7\n24,130.0\n6,488.3\n135,389.0\n2,548.1\n1,496.4\n139,433.5\n1,063.5\n11,363.7\n1,863.1\n2,831.0\n372.2\n32,694.4\n28,289.4\n32,377.1\n250,287.9\nOct\n114,057.9\n26,079.1\n7,702.2\n147,839.2\n2,666.6\n1,767.2\n152,273.0\n1,089.2\n11,137.3\n1,812.7\n4,232.9\n441.7\n33,811.1\n29,764.7\n35,264.5\n269,827.2\nNov\n129,129.6\n26,871.0\n8,262.1\n164,262.8\n2,369.5\n1,538.3\n168,170.5\n1,100.4\n11,019.9\n1,489.5\n5,403.8\n423.6\n36,278.2\n29,821.2\n33,334.7\n287,041.8\nDec\n146,151.8\n27,804.4\n8,926.9\n182,883.1\n2,547.6\n4,309.9\n189,740.6\n1,239.9\n10,924.0\n1,318.6\n316.6\n292.0\n43,984.3\n29,608.0\n29,204.3\n306,628.4\n2021\nJan\n158,888.8\n28,456.6\n10,150.2\n197,495.5\n2,580.8\n5,423.4\n205,499.8\n1,142.5\n12,732.6\n391.1\n519.6\n376.7\n50,147.7\n25,036.2\n29,608.5\n325,454.7\nFeb\n162,092.2\n26,146.3\n12,239.7\n200,478.2\n2,809.1\n4,762.5\n208,049.7\n1,150.4\n12,833.2\n409.2\n540.7\n609.9\n54,930.3\n28,339.2\n33,280.7\n340,143.4\nMar\n165,101.1\n30,313.5\n12,276.4\n207,691.0\n4,541.2\n4,845.3\n217,077.6\n1,331.7\n11,620.2\n75.4\n1,136.7\n408.9\n58,208.9\n32,908.1\n30,626.5\n353,393.9\nApr\n191,923.5\n31,441.3\n11,549.5\n234,914.3\n2,195.0\n5,346.7\n242,455.9\n1,190.1\n11,503.5\n176.5\n757.1\n409.9\n60,361.3\n34,537.9\n29,396.5\n380,788.7\nMay\n194,108.9\n40,921.9\n15,896.4\n250,927.2\n1,705.9\n6,802.1\n259,435.2\n1,186.9\n11,783.3\n654.2\n145.2\n429.0\n61,202.0\n35,592.3\n29,790.4\n400,218.5\nJun\n211,950.0\n40,878.5\n18,536.0\n271,364.4\n2,696.6\n6,202.3\n280,263.2\n1,211.8\n11,575.5\n662.3\n368.5\n462.6\n63,417.5\n26,856.5\n40,783.7\n425,601.6\nJul\n226,860.1\n48,928.9\n19,775.4\n295,564.4\n2,991.7\n5,012.2\n303,568.3\n1,169.2\n12,552.8\n706.9\n476.2\n552.8\n66,514.1\n26,869.2\n68,693.1\n481,102.6\nAug\n237,167.0\n38,425.4\n25,114.2\n300,706.5\n3,601.5\n5,873.7\n310,181.7\n1,216.2\n13,354.7\n1,444.4\n1,678.3\n478.6\n72,123.3\n32,281.1\n58,597.3\n491,355.6\nSep\n263,598.2\n37,954.3\n21,954.4\n323,506.9\n3,643.0\n3,469.0\n330,618.9\n2,141.0\n11,770.4\n1,453.1\n-110.6\n375.4\n71,255.0\n31,981.0\n46,729.4\n496,213.6\nOct\n299,038.0\n50,766.0\n22,882.7\n372,686.7\n2,824.1\n3,023.7\n378,534.5\n2,411.8\n14,077.4\n1,095.3\n1,109.9\n503.1\n78,644.6\n49,581.0\n61,280.0\n587,237.6\nNov\n307,063.4\n52,309.9\n27,875.3\n387,248.6\n3,325.7\n2,764.9\n393,339.3\n2,869.4\n12,437.2\n2,726.5\n1,352.5\n347.1\n89,288.6\n52,327.7\n61,678.3\n616,366.5\nDec\n334,599.0\n58,318.5\n30,455.6\n423,373.1\n3,842.1\n3,855.7\n431,070.9\n3,027.0\n13,896.4\n2,808.1\n1,693.3\n139.8\n109,665.4\n60,917.0\n63,170.8\n686,388.6\n2022\nJan\n346,619.5\n43,438.8\n31,158.1\n421,216.4\n2,962.5\n3,864.8\n428,043.7\n2,995.6\n14,406.9\n2,688.6\n1,043.2\n230.5\n122,752.1\n53,627.8\n58,853.6\n684,641.9\nFeb\n358,979.4\n51,510.7\n38,313.7\n448,803.8\n3,229.3\n4,248.7\n456,281.8\n3,834.1\n16,267.7\n2,120.4\n1,338.1\n226.8\n130,981.3\n55,099.6\n68,847.8\n734,997.5\nMar\n422,934.6\n58,283.5\n42,258.5\n523,476.6\n3,062.2\n5,171.3\n531,710.2\n3,850.2\n18,374.8\n2,137.9\n2,779.1\n810.6\n149,781.8\n65,660.6\n85,216.5\n860,321.7\nApr\n479,558.7\n74,880.3\n40,491.0\n594,930.0\n6,377.5\n7,486.7\n608,794.2\n3,792.3\n21,445.6\n2,173.0\n3,173.0\n486.8\n149,610.1\n53,372.3\n103,623.7\n946,471.1\nMay\n666,937.8\n137,419.9\n55,389.8\n859,747.5\n7,310.9\n7,249.8\n874,308.3\n5,769.3\n39,105.1\n2,383.3\n2,207.5\n321.8\n214,978.6\n134,993.5\n182,638.3\n1,456,705.7\nJun\n773,692.7\n154,956.9\n63,511.7\n992,161.3\n4,597.1\n10,018.0\n1,006,776.4\n6,743.2\n42,701.8\n2,898.5\n3,389.3\n345.2\n307,341.8\n169,511.8\n184,958.1\n1,724,666.1\nJul\n810,906.6\n173,134.0\n74,324.5\n1,058,365.1\n717.0\n9,153.8\n1,068,235.9\n7,994.5\n54,168.7\n2,814.9\n2,948.9\n1,339.1\n355,597.9\n144,090.2\n220,013.9\n1,857,204.0\nAug\n1,100,922.1\n219,798.6\n110,595.1\n1,431,315.7\n790.2\n7,675.2\n1,439,781.1\n12,484.6\n64,160.3\n3,230.7\n2,791.8\n555.2\n421,880.4\n167,029.4\n300,169.0\n2,412,082.6\nSep\n1,328,584.6\n256,980.2\n127,051.1\n1,712,616.0\n1,482.9\n8,473.0\n1,722,571.9\n13,789.2\n81,182.4\n3,720.2\n5,632.9\n587.2\n465,063.9\n146,133.1\n318,269.0\n2,756,949.8\nOct\n1,365,908.5\n205,688.8\n128,186.9\n1,699,784.2\n813.8\n6,314.3\n1,706,912.3\n14,933.2\n83,998.0\n28,072.2\n4,282.4\n762.5\n486,396.6\n165,306.9\n407,015.5\n2,897,679.6\nNov\n1,481,503.5\n243,239.9\n146,530.0\n1,871,273.4\n291.3\n6,366.6\n1,877,931.3\n12,665.1\n67,318.9\n19,973.5\n5,349.1\n339.6\n514,200.0\n170,944.8\n343,815.1\n3,012,537.3\nDec\n1,697,008.7\n235,271.2\n181,090.6\n2,113,370.5\n1,514.4\n7,399.5\n2,122,284.4\n13,296.8\n106,071.5\n10,597.8\n9,610.4\n752.5\n621,113.3\n159,126.2\n320,981.8\n3,363,834.8\n2023\nJan\n2,139,458.0\n78,197.7\n215,537.0\n2,433,192.7\n214.3\n41,333.8\n2,474,740.8\n12,923.7\n123,605.0\n4,974.3\n5,669.1\n675.5\n723,452.2\n227,545.4\n384,228.1\n3,957,814.2\nFeb\n1,997,073.4\n398,595.8\n230,549.9\n2,626,219.1\n303.5\n10,655.7\n2,637,178.4\n14,443.3\n140,484.9\n8,092.9\n13,273.6\n3,109.0\n780,290.7\n226,933.0\n497,618.5\n4,321,424.2\nMar\n2,218,678.7\n384,245.5\n262,119.8\n2,865,044.1\n1,272.8\n5,953.0\n2,872,269.9\n15,181.9\n166,322.5\n9,639.9\n15,494.1\n3,714.6\n846,479.9\n554,840.9\n581,230.2\n5,065,173.9\nApr\n2,646,522.9\n382,678.9\n197,662.2\n3,226,864.0\n173.4\n9,463.7\n3,236,501.1\n1,115.5\n201,674.1\n13,321.9\n21,331.0\n6,418.8\n935,402.2\n214,270.9\n584,658.1\n5,214,693.6\nMay\n5,196,712.7\n969,812.4\n435,965.9\n6,602,490.9\n514.9\n50,270.4\n6,653,276.3\n1,287.6\n493,894.8\n78,332.6\n65,967.5\n30,583.3\n1,815,309.9\n607,438.1\n1,452,822.8\n11,198,912.9\nJun\n10,038,744.6\n2,287,818.9\n789,112.9\n13,115,676.4\n1,468.6\n432,367.0\n13,549,512.0\n1,177.5\n1,201,797.0\n39,166.6\n101,465.7\n64,321.9\n5,042,026.4\n1,390,786.2\n2,830,837.1\n24,221,090.2\nJul\n9,592,825.0\n1,787,488.9\n592,115.4\n11,972,429.2\n9,138.5\n380,190.7\n12,361,758.4\n512.4\n847,658.7\n87,827.2\n146,299.0\n58,256.2\n4,649,856.9\n829,382.3\n2,509,565.1\n21,491,116.1\nSource:Reserve Bank of Zimbabwe,2023\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\n \n \n \n22 \n \n \nForeign\nOther Assets\nNon Financial \nTOTAL\nEnd of\nNotes\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nMortgages\nGovernment\nOther\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2020\nJan\n16.3\n \n322.3\n1,106.8\n \n361.8\n421.8\n \n-\n \n283.0\n \n20.1\n-\n \n-\n \n478.2\n \n-\n \n1,498.8\n \n717.5\n1,552.8\n \n6,779.5\n \nFeb\n14.5\n \n368.2\n977.2\n \n612.5\n370.5\n \n-\n \n357.1\n \n20.1\n-\n \n1.5\n \n503.6\n \n-\n \n2,097.7\n \n735.9\n1,538.8\n \n7,597.4\n \nMar\n20.1\n \n529.4\n1,423.7\n \n261.8\n282.6\n \n-\n \n341.6\n \n19.2\n-\n \n0.6\n \n526.4\n \n-\n \n2,406.4\n \n1165.6\n1,914.1\n \n8,891.5\n \nApr\n33.1\n \n493.1\n914.2\n \n232.1\n384.9\n \n-\n \n424.3\n \n18.1\n-\n \n-\n \n525.9\n \n-\n \n2,568.2\n \n1528.5\n2,134.4\n \n9,256.8\n \nMay\n39.7\n \n434.7\n1,248.4\n \n192.3\n725.0\n \n-\n \n382.4\n \n17.0\n-\n \n-\n \n517.6\n \n-\n \n2,793.4\n \n2669.6\n2,146.1\n \n11,166.3\n \nJun\n88.7\n \n1167.9\n2,857.8\n \n395.9\n1,222.0\n \n-\n \n385.4\n \n13.8\n-\n \n-\n \n653.4\n \n-\n \n4,663.9\n \n2688.0\n4,712.1\n \n18,848.8\n \nJul\n109.1\n \n1780.7\n3,878.9\n \n1342.9\n1,879.4\n \n-\n \n346.6\n \n13.4\n-\n \n-\n \n585.7\n \n-\n \n5,648.0\n \n3879.5\n4,927.7\n \n24,391.8\n \nAug\n142.9\n \n2175.5\n4,799.3\n \n341.7\n2,310.6\n \n-\n \n294.6\n \n13.1\n-\n \n-\n \n688.7\n \n-\n \n6,552.1\n \n4480.3\n6,104.6\n \n27,903.4\n \nSep\n179.8\n \n2469.9\n4,547.1\n \n504.6\n1,027.7\n \n-\n \n218.3\n \n12.9\n-\n \n0.4\n \n741.5\n \n-\n \n6,518.3\n \n2774.9\n6,503.8\n \n25,499.1\n \nOct\n149.1\n \n2787.0\n5,056.1\n \n778.9\n1,182.4\n \n-\n \n206.5\n \n12.3\n-\n \n112.2\n \n772.3\n \n-\n \n6,874.4\n \n2795.4\n6,537.1\n \n27,263.4\n \nNov\n104.3\n \n2935.7\n4,448.9\n \n691.0\n1,412.8\n \n-\n \n1,666.7\n \n11.6\n-\n \n157.8\n \n930.4\n \n-\n \n7,498.6\n \n2571.1\n6,712.9\n \n29,141.9\n \nDec\n116.2\n \n3210.3\n5,085.9\n \n802.0\n1,183.4\n \n-\n \n1,830.2\n \n11.2\n-\n \n251.1\n \n1,008.4\n \n-\n \n8,562.3\n \n2559.4\n7,352.9\n \n31,973.2\n \n2021\nJan\n188.7\n \n2943.3\n5,986.5\n \n793.8\n843.5\n \n-\n \n1,783.8\n \n10.2\n-\n \n211.3\n \n1,091.3\n \n0.0\n \n9,329.1\n \n2980.3\n7,685.1\n \n33,846.9\n \nFeb\n345.7\n \n2762.9\n6,004.8\n \n811.1\n984.2\n \n-\n \n2,731.0\n \n9.2\n-\n \n236.8\n \n2,089.3\n \n-\n \n8,950.2\n \n2949.2\n7,790.6\n \n35,665.0\n \nMar\n168.3\n \n2278.9\n6,313.1\n \n1594.4\n1,028.2\n \n-\n \n1,341.7\n \n8.4\n-\n \n415.1\n \n1,242.4\n \n-\n \n10,867.7\n \n3027.5\n7,841.0\n \n36,126.8\n \nApr\n206.9\n \n2702.1\n5,302.6\n \n1156.7\n1,085.4\n \n-\n \n871.7\n \n7.7\n-\n \n508.9\n \n1,581.5\n \n-\n \n14,233.6\n \n3431.1\n7,237.9\n \n38,326.2\n \nMay\n210.3\n \n1687.6\n5,962.2\n \n1250.9\n3,847.1\n \n-\n \n116.9\n \n7.0\n-\n \n517.7\n \n1,568.8\n \n-\n \n17,154.9\n \n2927.9\n7,532.9\n \n42,784.2\n \nJun\n249.6\n \n1649.7\n6,202.6\n \n1163.8\n1,866.7\n \n-\n \n204.6\n \n6.5\n-\n \n588.0\n \n1,851.9\n \n-\n \n18,795.4\n \n2580.9\n7,701.1\n \n42,860.7\n \nJul\n283.7\n \n1212.2\n7,193.4\n \n1892.7\n1,875.4\n \n-\n \n1,143.4\n \n6.0\n-\n \n447.3\n \n1,963.2\n \n-\n \n18,280.3\n \n3923.5\n7,695.6\n \n45,916.5\n \nAug\n352.8\n \n1408.8\n7,869.3\n \n2537.6\n2,316.2\n \n-\n \n3,535.6\n \n5.4\n-\n \n399.5\n \n2,101.3\n \n-\n \n19,422.2\n \n3837.6\n7,666.6\n \n51,453.0\n \nSep\n349.8\n \n1926.6\n7,608.5\n \n2430.2\n1,941.4\n \n-\n \n4,314.6\n \n5.1\n-\n \n205.2\n \n2,231.7\n \n-\n \n20,461.1\n \n4013.2\n9,460.7\n \n54,948.1\n \nOct\n411.5\n \n2396.2\n8,221.0\n \n2162.4\n3,421.5\n \n-\n \n5,627.7\n \n4.3\n-\n \n271.1\n \n2,539.5\n \n-\n \n22,881.3\n \n5432.3\n9,501.3\n \n62,870.1\n \nNov\n339.8\n \n3578.4\n7,561.6\n \n2568.8\n2,299.5\n \n-\n \n5,882.7\n \n3.7\n-\n \n566.4\n \n2,788.5\n \n-\n \n27,326.1\n \n4400.3\n9,614.3\n \n66,930.0\n \nDec\n351.1\n \n3217.3\n8,557.8\n \n2619.2\n3,620.2\n \n-\n \n2,353.6\n \n3.0\n-\n \n1,189.0\n \n2,786.9\n \n-\n \n33,115.3\n \n5610.8\n11,334.1\n \n74,758.3\n \n2022\nJan\n324.6\n \n3504.3\n8,506.5\n \n2680.3\n2,631.0\n \n-\n \n1,110.8\n \n2.4\n-\n \n1,487.3\n \n2,967.6\n \n-\n \n35,913.5\n \n6693.8\n14,008.7\n \n79,830.9\n \nFeb\n411.5\n \n4021.5\n9,763.6\n \n3069.7\n5,678.0\n \n-\n \n4,048.9\n \n1.6\n-\n \n1,465.4\n \n3,241.1\n \n-\n \n39,977.5\n \n4511.5\n13,964.4\n \n90,154.6\n \nMar\n354.3\n \n4413.6\n11,882.6\n \n3691.3\n4,932.3\n \n-\n \n5,235.0\n \n0.9\n-\n \n1,590.0\n \n3,888.3\n \n-\n \n42,741.3\n \n9086.6\n15,421.2\n \n103,237.4\n \nApr\n546.4\n \n3054.1\n15,585.8\n \n4857.7\n5,768.6\n \n-\n \n5,714.4\n \n0.2\n-\n \n1,861.4\n \n4,143.7\n \n-\n \n48,582.4\n \n9654.2\n16,999.2\n \n116,768.1\n \nMay\n639.5\n \n8326.7\n23,817.6\n \n4251.9\n16,001.6\n \n-\n \n6,150.9\n \n0.0\n-\n \n1,486.3\n \n8,474.8\n \n-\n \n74,864.0\n \n14793.9\n17,091.2\n \n175,898.5\n \nJun\n418.5\n \n8464.3\n32,497.6\n \n3807.5\n21,184.8\n \n-\n \n2,639.3\n \n0.0\n-\n \n1,340.0\n \n10,851.1\n \n-\n \n85,145.9\n \n18155.8\n35,128.1\n \n219,633.0\n \nJul\n700.4\n \n9914.6\n30,660.3\n \n4983.4\n24,902.9\n \n-\n \n4,077.6\n \n0.0\n-\n \n1,411.5\n \n13,722.1\n \n-\n \n98,066.0\n \n9998.6\n45,127.9\n \n243,565.1\n \nAug\n863.8\n \n14422.1\n33,703.2\n \n4483.0\n34,971.8\n \n-\n \n4,379.8\n \n0.0\n-\n \n2,106.6\n \n16,515.4\n \n-\n \n115,491.9\n \n8745.3\n45,694.0\n \n281,377.1\n \nSep\n1,086.8\n \n14998.2\n37,911.3\n \n7470.1\n45,094.8\n \n-\n \n8,440.8\n \n0.0\n-\n \n1,302.8\n \n17,996.8\n \n-\n \n129,242.7\n \n11630.7\n60,830.4\n \n336,005.2\n \nOct\n1,158.3\n \n14768.7\n44,296.5\n \n10013.7\n44,664.1\n \n-\n \n14,109.9\n \n0.0\n-\n \n1,142.4\n \n16,817.7\n \n-\n \n123,793.8\n \n30036.4\n47,678.2\n \n348,479.7\n \nNov\n1,449.3\n \n22456.9\n41,398.0\n \n9771.8\n41,317.6\n \n-\n \n17,572.6\n \n0.0\n-\n \n2,085.3\n \n16,785.8\n \n-\n \n136,029.9\n \n30694.0\n46,275.8\n \n365,836.9\n \nDec\n1,470.7\n \n23012.7\n48,533.8\n \n8913.7\n50,229.0\n \n-\n \n21,411.1\n \n0.0\n19,993.4\n \n2,176.2\n \n17,693.7\n \n-\n \n119,322.3\n \n39279.1\n69,102.5\n \n421,138.1\n \n2023\nJan\n2,402.7\n \n32405.1\n47,062.6\n \n8410.8\n50,364.6\n \n-\n \n17,976.2\n \n0.0\n23,668.5\n \n2,406.3\n \n18,311.0\n \n-\n \n132,757.4\n \n41367.4\n69,570.1\n \n446,702.8\n \nFeb\n234.9\n \n59685.4\n50,103.0\n \n9568.6\n62,701.4\n \n889.9\n \n24,809.7\n \n0.0\n26,667.1\n \n4,451.9\n \n21,629.1\n \n-\n \n146,798.4\n \n50093.6\n70,987.9\n \n528,620.9\n \nMar\n214.6\n \n72311.9\n57,399.6\n \n9196.8\n51,300.9\n \n-\n \n28,841.5\n \n0.0\n24,689.0\n \n5,503.9\n \n19,118.6\n \n-\n \n170,376.6\n \n54524.7\n84,489.1\n \n577,967.3\n \nApr\n184.1\n \n61341.6\n63,129.5\n \n16343.2\n61,444.0\n \n-\n \n28,727.0\n \n0.0\n28,119.0\n \n5,989.2\n \n27,619.9\n \n-\n \n205,412.2\n \n81442.9\n86,571.2\n \n666,323.9\n \nMay\n78.1\n \n125685.1\n100,808.7\n \n22707.0\n195,646.6\n \n-\n \n81,344.3\n \n0.0\n69,908.9\n \n6,246.8\n \n53,180.7\n \n-\n \n440,462.4\n \n103176.1\n116,103.7\n \n1,315,348.2\n \nJun\n176.6\n \n227001.8\n172,666.5\n \n25998.2\n452,772.6\n \n40,326.7\n \n115,193.3\n \n0.0\n196,310.3\n \n4,209.5\n \n121,677.5\n \n-\n \n870,075.1\n \n230604.4\n544,587.8\n \n3,001,600.3\n \nJul\n162.7\n \n132017.2\n220,995.0\n \n20797.2\n459,668.2\n \n32,010.8\n \n105,308.6\n \n0.0\n154,472.7\n \n13,777.8\n \n153,638.5\n \n-\n \n697,177.8\n \n209734.6\n612,937.8\n \n2,812,698.9\n \nSource:Reserve Bank of Zimbabwe,2023\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households and other financial corporations, \nTABLE 6.1: BUILDING SOCIETIES -ASSETS\n$ millions\nDebt Securities\nLoans and Advances\n \n \n \n23 \n \n \nDebt Securities\nForeign Liabilities\nCapital\nOther\nTOTAL\nand\nLiablities\nEnd of\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2020\nJan\n2,894.8\n398.4\n3,293.3\n273.1\n15.0\n3,581.4\n34.7\n944.7\n0.0\n100.0\n0.0\n1,699.9\n418.8\n6,779.5\nFeb\n3,118.5\n419.8\n3,538.4\n270.9\n15.0\n3,824.3\n32.5\n966.5\n0.0\n558.5\n0.0\n1,714.1\n501.5\n7,597.4\nMar\n3,978.7\n384.4\n4,363.1\n290.4\n15.0\n4,668.5\n19.3\n1,143.4\n0.0\n133.4\n0.0\n2,335.6\n591.3\n8,891.5\nApr\n4,097.6\n354.9\n4,452.5\n290.4\n15.0\n4,757.9\n15.6\n1,152.3\n0.0\n140.8\n0.0\n2,628.1\n562.1\n9,256.8\nMay\n5,615.0\n370.0\n5,985.0\n441.2\n15.0\n6,441.2\n45.6\n1,161.2\n0.0\n149.8\n0.0\n2,708.1\n660.4\n11,166.3\nJun\n7,327.5\n405.9\n7,733.4\n346.2\n15.0\n8,094.6\n17.6\n2,644.8\n0.0\n278.2\n0.0\n6,867.2\n946.4\n18,848.8\nJul\n10,284.7\n427.7\n10,712.4\n326.2\n15.0\n11,053.7\n21.3\n3,862.4\n0.0\n207.1\n0.0\n8,010.7\n1,236.7\n24,391.8\nAug\n10,984.4\n502.7\n11,487.1\n364.5\n15.0\n11,866.6\n21.4\n4,478.3\n0.0\n186.1\n10.0\n9,438.3\n1,902.7\n27,903.4\nSep\n10,408.2\n403.5\n10,811.8\n107.5\n15.0\n10,934.3\n31.7\n3,842.7\n0.0\n125.8\n0.0\n8,069.6\n2,495.1\n25,499.1\nOct\n11,881.7\n628.7\n12,510.4\n102.5\n15.0\n12,627.9\n154.0\n3,731.0\n0.0\n280.6\n0.0\n7,991.8\n2,478.1\n27,263.4\nNov\n13,173.5\n668.5\n13,842.1\n252.5\n15.0\n14,109.6\n148.2\n3,781.0\n0.0\n323.0\n0.0\n8,200.8\n2,579.4\n29,141.9\nDec\n15,585.8\n797.7\n16,383.5\n258.5\n15.0\n16,657.0\n207.5\n3,221.3\n0.0\n440.4\n0.0\n9,002.7\n2,444.3\n31,973.2\n2021\nJan\n17,060.5\n985.1\n18,045.7\n150.0\n15.0\n18,210.7\n291.2\n3,018.1\n0.0\n81.3\n0.0\n6,054.0\n6,191.6\n33,846.9\nFeb\n18,610.7\n1,047.5\n19,658.2\n150.0\n15.0\n19,823.2\n318.2\n3,075.5\n0.0\n40.7\n0.0\n6,533.5\n5,874.0\n35,665.0\nMar\n18,562.7\n1,070.5\n19,633.2\n150.0\n15.0\n19,798.2\n320.8\n3,377.0\n0.0\n241.5\n0.0\n6,727.5\n5,661.8\n36,126.8\nApr\n19,021.2\n1,353.2\n20,374.5\n500.0\n15.0\n20,889.5\n325.0\n4,244.8\n0.0\n181.9\n0.0\n6,267.0\n6,418.0\n38,326.2\nMay\n22,332.1\n1,453.5\n23,785.6\n500.0\n15.0\n24,300.6\n350.2\n4,279.9\n0.0\n394.8\n0.0\n6,067.1\n7,391.6\n42,784.2\nJun\n22,784.4\n1,675.4\n24,459.8\n209.5\n70.5\n24,739.8\n359.1\n3,855.1\n0.0\n570.4\n0.0\n6,623.0\n6,713.2\n42,860.7\nJul\n25,425.9\n1,997.8\n27,423.7\n25.0\n15.0\n27,463.7\n365.2\n3,488.6\n0.0\n274.6\n0.0\n7,194.2\n7,130.1\n45,916.5\nAug\n27,475.7\n2,728.9\n30,204.6\n60.0\n15.0\n30,279.6\n668.2\n5,344.8\n0.0\n621.9\n0.0\n7,683.7\n6,854.8\n51,453.0\nSep\n29,023.8\n2,834.6\n31,858.5\n76.0\n15.2\n31,949.7\n1,062.2\n4,465.7\n0.0\n181.9\n0.0\n10,227.1\n7,061.5\n54,948.1\nOct\n30,925.8\n4,239.0\n35,164.7\n0.0\n30.0\n35,194.8\n1,329.1\n7,432.5\n0.0\n0.0\n0.0\n10,906.3\n8,007.4\n62,870.1\nNov\n34,486.8\n4,344.1\n38,830.8\n0.0\n15.0\n38,845.9\n1,149.7\n7,028.7\n0.0\n203.6\n0.0\n11,575.7\n8,126.5\n66,930.0\nDec\n33,974.4\n4,856.8\n38,831.3\n80.0\n15.0\n38,926.3\n1,750.9\n9,746.8\n0.0\n712.0\n0.0\n15,101.8\n8,520.4\n74,758.3\n2022\nJan\n31,695.1\n5,983.6\n37,678.7\n0.0\n15.0\n37,693.7\n1,771.4\n10,991.6\n0.0\n373.7\n0.0\n18,063.5\n10,937.0\n79,830.9\nFeb\n37,132.1\n7,089.1\n44,221.1\n0.0\n15.0\n44,236.1\n1,703.8\n14,215.9\n0.0\n431.6\n0.0\n18,241.5\n11,325.7\n90,154.6\nMar\n44,187.4\n6,190.7\n50,378.1\n0.0\n15.0\n50,393.1\n1,742.3\n15,620.9\n0.0\n501.9\n0.0\n20,548.8\n14,430.4\n103,237.4\nApr\n52,979.2\n6,553.0\n59,532.2\n0.0\n15.0\n59,547.2\n1,536.3\n17,027.1\n0.0\n704.1\n0.0\n23,099.0\n14,854.4\n116,768.1\nMay\n86,411.7\n6,683.0\n93,094.7\n0.0\n15.0\n93,109.8\n1,477.7\n34,306.7\n0.0\n1,033.4\n0.0\n22,645.2\n23,325.7\n175,898.5\nJun\n98,008.7\n8,427.1\n106,435.9\n1,030.1\n15.0\n107,481.1\n1,496.4\n40,346.3\n0.0\n1,200.6\n0.0\n42,213.2\n26,895.5\n219,633.0\nJul\n111,583.1\n9,489.2\n121,072.3\n1,072.6\n15.0\n122,159.9\n1,225.0\n46,145.1\n0.0\n2,071.5\n0.0\n55,131.6\n16,832.0\n243,565.1\nAug\n133,071.2\n11,398.3\n144,469.5\n1,625.2\n15.0\n146,109.7\n1,382.6\n55,691.4\n0.0\n2,979.3\n0.0\n60,157.4\n15,056.7\n281,377.1\nSep\n143,338.6\n28,284.7\n171,623.3\n0.0\n15.0\n171,638.3\n1,339.9\n62,659.9\n0.0\n3,613.8\n0.0\n79,343.1\n17,410.1\n336,005.2\nOct\n122,775.3\n20,897.6\n143,672.9\n1,214.2\n15.0\n144,902.1\n1,707.3\n69,651.9\n0.0\n4,327.9\n0.0\n86,799.2\n41,091.4\n348,479.7\nNov\n130,892.9\n23,401.5\n154,294.3\n1,256.4\n13.0\n155,563.7\n1,855.1\n72,052.0\n0.0\n5,140.0\n0.0\n89,895.0\n41,331.2\n365,836.9\nDec\n149,207.3\n30,517.1\n179,724.4\n1,239.7\n103.8\n181,068.0\n1,933.7\n71,142.6\n0.0\n5,623.9\n0.0\n118,486.1\n42,883.8\n421,138.1\n2023\nJan\n161,506.8\n31,099.4\n192,606.2\n1,462.2\n121.0\n194,189.4\n3,214.4\n72,524.5\n0.0\n6,622.6\n0.0\n144,335.3\n25,816.5\n446,702.8\nFeb\n210,739.4\n27,500.2\n238,239.5\n1,153.4\n15.0\n239,407.9\n2,349.9\n84,724.5\n0.0\n7,548.9\n0.0\n155,007.6\n39,582.0\n528,620.9\nMar\n234,480.2\n38,088.7\n272,568.9\n158.0\n14.4\n272,741.2\n1,982.4\n89,883.4\n0.0\n7,502.7\n0.0\n172,499.0\n33,358.6\n577,967.3\nApr\n272,738.9\n35,889.2\n308,628.0\n400.0\n15.0\n309,043.1\n1,809.5\n116,418.1\n0.0\n8,456.9\n0.0\n183,262.3\n47,334.0\n666,323.9\nMay\n502,897.5\n36,680.3\n539,577.9\n553.7\n15.0\n540,146.6\n4,453.5\n289,636.2\n0.0\n8,115.4\n0.0\n372,206.8\n100,789.6\n1,315,348.2\nJun\n927,980.2\n66,404.1\n994,384.3\n0.0\n15.0\n994,399.3\n4,147.7\n631,544.2\n0.0\n10,873.2\n0.0\n1,117,122.1\n243,513.7\n3,001,600.3\nJul\n804,547.2\n73,047.1\n877,594.3\n15,753.2\n15.0\n893,362.6\n2,706.7\n611,248.0\n0.0\n14,397.5\n0.0\n1,093,858.2\n197,126.1\n2,812,698.9\nSource:Reserve Bank of Zimbabwe,2023\nAmounts Owing to\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\n$ millions\n \n \n \n24 \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISATIONS\n \n \n \n \n2020\nJan\n4,084,551.94\n155,581.93\n40,879.89\n1,241,096.72\n54,212.81\n1,614,135.86\n1,136,124.87\n905,568.16\n799,835.71\n83,887.62\n1,594,904.42\n3,435.36\n11,714,215.29\nFeb\n4,492,412.28\n157,892.05\n54,850.75\n1,305,056.27\n51,575.18\n1,667,015.97\n1,328,895.13\n875,096.28\n827,340.38\n103,240.64\n1,837,059.21\n1,195.35\n12,701,629.50\nMar\n5,400,573.75\n137,553.14\n109,432.30\n1,355,737.76\n60,656.39\n2,181,804.45\n1,514,365.26\n1,743,391.37\n911,567.97\n129,647.77\n2,083,395.02\n30,866.95\n15,658,992.12\nApr\n5,497,243.24\n144,302.16\n94,782.20\n1,298,701.43\n50,563.13\n2,200,545.77\n1,762,996.43\n1,756,962.25\n1,057,031.75\n149,805.94\n2,211,133.89\n33,524.86\n16,257,593.05\nMay\n6,753,987.64\n152,161.11\n176,776.32\n1,688,453.47\n61,403.01\n2,272,323.33\n2,155,232.06\n2,018,291.52\n1,335,664.72\n161,892.59\n2,646,269.59\n56,873.34\n19,479,328.70\nJun\n8,233,748.36\n178,010.08\n127,961.90\n3,248,219.37\n64,989.86\n5,469,986.07\n3,799,659.67\n4,379,017.69\n1,983,339.32\n277,602.32\n3,665,408.84\n46,384.96\n31,474,328.45\nJul\n8,927,920.73\n256,440.30\n209,123.91\n4,249,101.81\n34,055.90\n7,106,442.23\n5,125,740.57\n5,385,837.14\n2,413,677.93\n418,160.11\n4,321,918.71\n46,630.64\n38,495,049.96\nAug\n9,773,178.50\n269,675.36\n194,537.60\n5,470,092.50\n33,043.10\n7,946,261.68\n6,723,930.20\n5,651,838.11\n3,103,883.15\n446,084.37\n5,291,100.20\n48,922.44\n44,952,547.19\nSep\n10,508,860.18\n202,928.95\n203,610.78\n4,810,727.31\n29,975.80\n1,041,079.17\n7,136,261.66\n4,099,760.81\n3,255,496.85\n517,871.73\n6,526,576.15\n48,754.08\n38,381,903.47\nOct\n12,296,430.45\n302,589.49\n251,238.66\n9,053,118.05\n28,434.20\n8,136,185.80\n6,305,609.42\n6,351,785.61\n3,855,757.60\n649,444.55\n7,243,034.96\n49,339.03\n54,522,967.83\nNov\n14,705,718.28\n553,426.67\n299,226.19\n10,178,453.66\n26,676.82\n9,457,279.18\n7,442,871.42\n6,834,160.25\n4,193,059.76\n959,134.44\n7,919,442.36\n50,802.65\n62,620,251.69\nDec\n19,070,900.24\n557,071.84\n265,529.08\n10,043,351.16\n24,925.66\n9,451,197.42\n8,214,424.44\n7,599,398.94\n4,750,996.82\n1,556,410.92\n9,213,845.68\n46,489.85\n70,794,542.04\n1,000.00\n2021\nJan\n23,978,167.35\n610,696.11\n267,400.20\n9,997,383.02\n66,046.86\n9,811,097.63\n7,641,910.42\n7,176,322.97\n4,807,054.16\n1,685,871.14\n10,092,630.46\n47,525.58\n76,182,105.93\nFeb\n24,581,772.22\n653,205.48\n285,830.69\n10,330,772.00\n65,231.37\n10,024,935.09\n7,949,013.06\n6,754,180.16\n5,018,015.84\n1,766,077.92\n10,905,948.39\n47,678.08\n78,382,660.29\nMar\n28,741,816.74\n737,140.48\n320,102.45\n10,604,119.56\n76,828.95\n10,517,753.11\n9,428,559.85\n8,179,722.05\n5,701,289.52\n1,822,019.95\n12,528,176.45\n33,915.52\n88,691,444.62\nApr\n31,859,146.34\n675,080.87\n347,881.04\n12,101,683.31\n205,760.21\n12,046,268.54\n10,788,214.39\n8,802,924.25\n6,559,969.13\n1,831,534.43\n14,724,055.16\n36,984.33\n99,979,501.99\nMay\n34,645,328.64\n713,518.48\n292,339.75\n13,012,546.01\n70,347.70\n10,160,360.67\n11,287,317.39\n8,318,871.52\n7,438,997.57\n1,831,015.12\n17,169,532.74\n10,879.19\n104,951,054.78\nJune\n36,527,537.18\n993,308.60\n357,200.72\n14,622,859.32\n69,173.21\n12,832,747.32\n12,635,012.94\n7,938,660.25\n9,226,503.32\n1,903,845.82\n19,986,300.49\n40,765.72\n117,133,914.90\nJul\n39,160,305.59\n1,280,558.68\n411,253.92\n16,562,010.52\n62,624.82\n13,792,648.82\n12,583,048.87\n8,567,557.82\n10,717,151.04\n1,820,088.91\n22,581,130.29\n13,756.78\n127,552,136.06\nAug\n41,218,056.27\n1,372,177.00\n431,669.10\n15,667,033.13\n66,504.42\n14,701,546.35\n13,446,660.94\n8,828,791.19\n11,500,069.82\n1,942,139.38\n27,299,685.30\n15,470.31\n136,489,803.20\nSep\n41,133,553.69\n1,649,182.17\n433,781.15\n16,702,896.26\n321,991.18\n15,183,417.18\n15,271,161.92\n9,065,558.07\n11,973,442.27\n2,145,369.49\n30,851,901.80\n19,863.23\n144,752,118.41\nOct\n48,491,758.71\n1,644,045.10\n477,340.76\n20,072,721.66\n337,273.51\n16,644,705.00\n17,906,042.38\n10,150,149.70\n8,544,940.34\n2,418,354.85\n35,641,091.07\n17,894.63\n162,346,317.71\nNov\n48,945,526.55\n1,598,923.06\n394,575.79\n20,998,777.03\n434,931.56\n16,621,266.44\n19,372,274.14\n10,802,887.56\n8,904,904.88\n2,882,220.06\n40,009,482.19\n18,275.25\n170,984,044.50\nDec\n54,028,791.83\n1,778,880.47\n556,046.62\n24,450,917.17\n570,685.08\n10,955,470.21\n22,025,406.62\n10,538,491.23\n14,437,886.10\n2,996,425.00\n43,047,088.39\n29,601.16\n185,415,689.87\n2022\nJan\n58,163,723.79\n2,180,551.47\n576,438.12\n26,576,317.70\n366,231.45\n8,887,534.55\n23,074,734.84\n11,840,524.88\n15,743,736.46\n3,516,259.69\n47,325,078.28\n29,564.68\n198,280,695.90\nFeb\n59,500,669.71\n2,289,260.81\n618,640.14\n27,925,301.74\n641,435.03\n9,370,886.67\n27,976,121.59\n13,027,815.12\n20,505,827.49\n3,747,288.27\n51,007,737.28\n19,692.27\n216,630,676.11\nMar\n66,551,117.83\n2,538,377.08\n656,335.46\n29,688,979.74\n660,584.49\n10,903,917.10\n32,629,411.62\n15,688,496.07\n38,075,386.72\n4,471,441.45\n58,500,950.68\n802,168.34\n261,167,166.58\nApr\n74,441,781.12\n4,219,500.30\n1,441,218.07\n33,136,441.44\n673,885.92\n13,157,284.33\n34,426,878.27\n18,261,710.29\n39,043,359.76\n5,001,307.17\n63,176,517.86\n40,089.64\n287,019,974.16\nMay\n101,753,100.08\n5,120,524.84\n3,358,419.20\n50,514,059.33\n760,401.23\n12,433,390.50\n42,057,624.50\n28,724,818.35\n48,088,662.73\n6,286,840.17\n76,655,600.16\n34,456.76\n375,787,897.73\nJune\n118,753,588.99\n6,209,658.53\n2,293,665.50\n64,942,949.99\n869,273.19\n23,897,585.00\n58,442,367.18\n37,195,284.13\n62,467,707.84\n9,414,912.48\n96,536,183.00\n43,204.15\n481,066,380.00\nJuly\n133,779,414.05\n7,610,614.14\n3,684,426.07\n77,836,080.20\n938,367.98\n30,537,997.95\n69,408,788.72\n46,181,587.44\n72,642,938.51\n10,449,582.51\n111,094,524.49\n46,145.73\n564,210,467.80\nAug\n165,210,571.41\n10,163,176.69\n2,624,492.88\n93,899,073.61\n1,266,729.80\n39,544,245.28\n87,691,102.84\n58,330,938.20\n97,552,420.83\n10,450,507.09\n131,625,765.29\n154,457.59\n698,513,481.52\nSept\n201,167,878.53\n11,330,918.80\n5,038,300.39\n110,956,484.03\n1,297,748.50\n44,492,682.69\n101,816,518.33\n92,708,096.37\n88,483,494.42\n11,685,667.87\n152,934,863.30\n276,752.34\n822,189,405.58\nOct\n223,506,677.74\n12,026,669.50\n4,229,873.27\n113,451,159.15\n1,302,041.27\n46,399,745.17\n110,333,025.84\n79,715,558.05\n89,501,330.53\n9,611,322.30\n175,816,703.56\n178,607.79\n866,072,714.17\nNov\n232,953,535.08\n16,431,625.92\n11,131,139.79\n118,284,970.84\n1,687,527.03\n42,192,397.26\n124,017,335.43\n75,874,234.73\n94,636,395.62\n12,440,947.33\n207,085,835.54\n197,473.26\n936,933,417.83\nDec\n253,185,165.18\n19,199,455.89\n10,466,455.02\n135,037,685.07\n1,551,994.21\n70,805,600.30\n136,576,579.60\n94,115,141.69\n123,404,532.09\n12,079,018.68\n235,371,108.06\n173,717.07\n1,091,966,452.83\n2023\nJan\n299,237,745.06\n22,096,826.86\n11,001,194.94\n154,399,125.00\n2,073,794.79\n72,677,263.10\n165,905,496.48\n124,259,994.28\n140,303,195.37\n16,560,714.33\n290,446,774.71\n286,968.13\n1,299,249,093.07\nFeb\n333,081,520.85\n26,349,752.54\n12,607,980.80\n168,969,321.35\n3,232,834.66\n79,874,665.83\n198,087,465.13\n146,996,948.44\n150,078,778.01\n18,960,512.94\n335,439,856.49\n415,659.47\n1,474,095,296.50\nMar\n411,138,419.07\n28,795,432.59\n14,081,946.71\n184,250,094.21\n3,256,927.22\n101,507,881.47\n232,125,042.77\n168,374,643.67\n159,301,093.17\n20,786,447.06\n364,183,808.40\n229,595.47\n1,688,031,331.80\nApr\n411,638,425.58\n28,865,765.48\n14,081,964.65\n184,833,219.66\n3,256,927.22\n101,507,881.47\n235,076,590.94\n168,374,757.64\n159,310,920.52\n20,785,827.18\n365,366,760.50\n229,595.47\n1,693,328,636.32\nMay\n726,348,772.35\n78,828,771.47\n44,800,380.00\n409,618,602.87\n6,584,930.07\n226,467,642.46\n583,387,051.30\n480,909,418.46\n381,628,891.53\n62,593,512.49\n757,858,742.61\n267,815.39\n3,759,294,531.01\nJun\n1,385,380,571.66\n173,918,051.54\n114,682,839.69\n1,119,448,698.19\n23,922,347.39\n571,712,604.71\n1,309,324,347.94\n1,111,326,640.14\n808,734,970.18\n129,722,475.73\n1,754,989,459.01\n444,788.00\n8,503,607,794.19\nJul\n1,088,372,491.59\n132,529,236.30\n101,023,084.21\n843,805,813.72\n21,291,030.44\n370,922,779.80\n1,037,949,287.43\n824,419,061.99\n646,244,001.65\n87,491,103.55\n1,451,125,105.58\n356,098.86\n6,605,529,095.13\nSource:Reserve Bank of Zimbabwe,2023\n/1 Including the only merchant bank still in operation.\n TABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES\n$ ('000)\n \n \n \n25 \n \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS\nORGANISATIONS\n1,000.00\n2020\nJan\n2,173,633.03\n972,609.19\n3,182,087.13\n4,279,565.75\n1,757,297.12\n4,791,990.63\n2,791,625.15\n2,223,774.14\n9,875,803.48\n609,781.65\n2,838,775.94\n81,735.21\n35,578,678.43\nFeb\n2,492,591.77\n1,191,731.68\n3,340,863.80\n8,721,475.95\n1,919,428.47\n5,869,104.19\n3,481,495.51\n2,729,161.98\n10,202,203.60\n760,155.34\n3,574,134.47\n82,845.83\n44,365,192.59\nMar\n2,678,262.66\n1,449,645.90\n3,231,058.97\n11,715,273.88\n2,114,093.03\n6,507,000.01\n4,576,971.82\n3,048,053.49\n11,490,205.21\n947,918.17\n4,257,117.74\n72,082.86\n52,087,683.73\nApr\n2,854,374.82\n1,118,295.51\n3,492,330.52\n5,271,473.36\n1,999,901.13\n6,191,170.71\n4,276,817.19\n3,727,579.43\n14,060,717.80\n713,406.98\n4,444,924.89\n83,109.30\n48,234,101.64\nMay\n3,866,781.11\n1,163,944.89\n4,713,727.59\n7,932,403.43\n1,991,042.58\n7,151,451.48\n5,858,495.15\n5,031,912.53\n13,907,794.76\n944,318.05\n5,060,401.34\n88,613.61\n57,710,886.51\nJun\n7,228,784.40\n1,963,030.85\n5,393,404.53\n14,526,855.63\n3,997,135.72\n12,452,202.49\n11,386,156.55\n9,507,719.09\n22,807,615.50\n1,630,544.88\n9,798,261.20\n121,561.20\n100,813,272.04\nJul\n9,091,726.77\n2,629,847.13\n6,043,418.97\n19,096,889.49\n4,988,887.74\n15,446,649.70\n15,274,687.36\n7,918,819.51\n31,916,392.56\n2,035,354.71\n15,762,315.16\n147,865.97\n130,352,855.06\nAug\n9,462,082.74\n2,865,950.88\n6,582,519.60\n19,234,703.99\n5,333,846.88\n16,821,248.59\n17,017,042.14\n7,304,595.82\n35,312,317.72\n2,217,425.46\n16,548,990.51\n134,271.10\n138,834,995.43\nSep\n9,832,514.38\n3,139,646.07\n7,166,350.39\n20,531,087.56\n5,145,328.35\n9,505,277.06\n17,311,149.20\n10,234,597.66\n39,731,086.51\n2,011,372.45\n16,155,747.87\n148,612.60\n140,912,770.08\nOct\n9,923,335.07\n3,346,982.41\n9,919,999.10\n22,567,492.87\n6,180,403.26\n21,021,376.92\n20,667,754.18\n10,950,177.78\n41,131,626.19\n2,597,408.09\n18,072,164.45\n176,961.04\n166,555,681.37\nNov\n10,683,513.83\n3,732,868.95\n9,809,491.39\n28,228,980.99\n6,029,490.43\n17,343,347.49\n23,027,365.97\n14,471,556.33\n47,870,360.42\n2,986,050.60\n19,045,412.04\n209,168.81\n183,437,607.25\nDec\n10,252,495.91\n4,965,472.75\n12,171,250.70\n30,987,168.50\n5,959,867.34\n19,653,397.02\n25,666,591.10\n13,188,851.04\n55,454,341.21\n3,901,504.33\n22,313,591.00\n519,773.38\n205,034,304.27\n1,000.00\n2021\nJan\n12,195,945.09\n4,725,946.72\n13,067,828.56\n32,314,625.60\n6,804,952.50\n19,638,789.03\n27,577,248.19\n13,566,042.79\n60,234,250.60\n3,993,814.34\n22,146,327.53\n314,523.37\n216,580,294.30\nFeb\n12,215,925.38\n4,335,293.23\n13,268,343.18\n31,820,079.48\n6,327,338.72\n19,480,197.75\n27,088,789.92\n11,873,767.24\n62,647,881.89\n3,583,509.91\n23,594,651.47\n323,276.77\n216,559,054.94\nMar\n12,086,596.94\n5,009,117.91\n15,457,881.64\n33,668,114.17\n7,879,623.60\n17,019,379.33\n29,927,193.06\n12,664,366.44\n68,761,992.24\n4,513,060.17\n25,352,486.13\n371,874.60\n232,711,686.23\nApr\n14,293,712.79\n6,264,137.34\n17,624,611.65\n35,860,252.53\n7,955,587.69\n18,411,151.82\n32,890,743.11\n11,445,151.89\n81,410,668.87\n4,248,558.67\n27,176,673.47\n411,001.01\n257,992,250.84\nMay\n14,731,869.47\n5,542,211.64\n19,231,383.69\n37,283,237.74\n7,903,622.65\n19,756,317.30\n33,027,214.88\n22,796,168.05\n84,596,653.48\n4,504,355.67\n28,445,264.85\n378,185.06\n278,196,484.46\nJun\n15,628,935.51\n6,154,316.52\n20,722,752.27\n39,604,431.48\n7,861,552.67\n21,455,061.82\n36,502,664.43\n23,449,074.86\n92,196,178.85\n4,756,434.86\n29,731,644.54\n415,508.64\n298,478,556.45\nJul\n14,899,561.10\n6,742,913.66\n25,082,739.85\n39,720,936.02\n9,580,503.84\n24,570,675.98\n38,875,306.10\n31,312,003.24\n94,151,108.53\n5,021,547.73\n32,324,374.53\n568,402.62\n322,850,073.17\nAug\n14,056,945.25\n6,611,127.05\n26,897,316.63\n39,624,666.33\n9,778,338.93\n27,046,620.96\n40,693,944.15\n26,504,554.01\n84,766,848.12\n4,915,399.24\n33,960,935.12\n645,902.41\n315,502,598.18\nSep\n14,777,285.47\n6,264,492.08\n27,413,062.10\n45,375,795.43\n10,337,697.22\n25,786,388.31\n43,113,093.01\n30,700,846.40\n95,985,614.84\n5,605,871.74\n37,606,703.52\n687,817.24\n343,654,667.37\nOct\n14,923,669.66\n8,437,829.51\n26,583,413.65\n47,841,912.79\n11,477,927.22\n29,796,762.93\n51,676,553.79\n49,115,499.00\n111,611,484.23\n5,940,819.15\n35,043,857.03\n618,831.05\n393,068,559.99\nNov\n14,147,912.21\n7,546,852.86\n27,174,334.28\n44,238,573.41\n11,949,923.74\n27,199,271.57\n52,401,389.32\n49,817,772.34\n115,576,831.01\n5,911,967.57\n37,770,843.26\n751,068.72\n394,486,740.29\nDec\n16,522,401.63\n9,204,283.51\n26,835,545.00\n47,381,404.66\n15,303,976.78\n43,092,763.28\n57,822,911.04\n61,555,101.22\n122,091,550.61\n6,093,367.35\n40,046,246.70\n1,319,573.65\n447,269,125.42\n2022\nJan\n17,399,268.45\n9,928,816.10\n28,146,847.17\n46,285,881.10\n15,060,177.49\n34,087,881.41\n60,888,346.70\n38,232,883.69\n135,579,116.46\n6,454,492.58\n32,504,960.47\n745,336.00\n425,314,007.61\nFeb\n20,260,983.50\n9,641,974.72\n32,159,803.23\n50,825,844.50\n15,235,028.54\n35,068,548.54\n49,157,612.17\n43,769,514.96\n146,423,512.16\n7,768,846.48\n36,257,363.98\n724,522.36\n447,293,555.15\nMar\n22,638,817.86\n11,683,937.35\n34,271,841.32\n61,002,811.60\n20,352,647.27\n34,501,628.57\n57,839,997.29\n60,678,395.30\n173,444,002.60\n9,467,563.85\n43,160,654.72\n970,393.82\n530,012,691.56\nApr\n26,926,844.72\n12,304,918.39\n34,924,202.54\n67,201,357.79\n21,444,798.07\n38,606,872.21\n61,303,321.13\n64,980,792.31\n216,612,532.66\n10,455,473.89\n45,951,692.03\n939,217.87\n601,652,023.61\nMay\n39,564,579.03\n21,954,770.23\n42,666,739.38\n108,620,498.72\n28,757,840.78\n54,108,110.44\n88,717,845.18\n107,568,244.73\n291,739,801.56\n14,310,137.61\n65,853,453.06\n1,190,747.91\n865,052,768.60\nJun\n45,956,287.64\n26,686,177.09\n47,155,850.80\n128,881,143.56\n23,783,755.16\n60,238,449.95\n105,247,922.50\n120,389,795.99\n326,034,986.61\n17,068,663.50\n108,828,797.15\n1,325,268.69\n1,011,597,098.65\nJul\n40,699,352.12\n28,329,526.03\n45,417,841.09\n128,847,329.07\n21,958,796.02\n62,326,844.37\n103,536,398.88\n112,642,685.48\n401,574,353.33\n17,902,000.20\n112,555,899.49\n1,117,408.25\n1,076,908,434.33\nAug\n68,438,409.63\n39,107,020.53\n53,616,955.67\n171,501,037.83\n25,370,674.58\n68,913,237.19\n162,326,617.25\n137,243,494.58\n538,409,018.36\n23,523,309.06\n146,121,882.24\n1,197,164.45\n1,435,768,821.37\nSep\n81,174,128.75\n51,501,554.76\n58,104,791.47\n204,056,688.73\n63,246,197.07\n174,562,749.46\n172,521,502.90\n138,936,277.91\n626,755,883.05\n25,607,188.82\n182,077,675.02\n11,177,650.78\n1,789,722,288.71\nOct\n83,201,043.64\n63,984,990.31\n67,031,137.91\n207,367,773.63\n40,617,325.27\n155,873,800.58\n179,051,392.63\n157,121,308.46\n575,293,016.53\n27,092,268.91\n201,852,712.89\n3,193,614.07\n1,761,680,384.82\nNov\n88,153,064.47\n61,978,896.61\n78,744,676.95\n236,152,455.10\n39,915,042.93\n100,872,718.26\n214,281,243.03\n200,240,592.45\n606,580,960.90\n32,903,876.70\n233,604,874.73\n119,223.24\n1,893,547,625.35\nDec\n106,799,918.36\n60,886,327.29\n73,518,960.29\n260,923,049.61\n48,959,835.11\n122,528,998.69\n242,741,914.11\n171,982,170.05\n747,151,447.16\n37,453,518.81\n270,164,633.75\n10,753,958.63\n2,153,864,731.86\n2023\nJan\n114,820,700.76\n79,460,381.87\n82,589,902.30\n305,204,829.91\n45,118,619.63\n135,072,311.14\n263,222,364.10\n223,632,204.71\n896,980,184.31\n37,534,721.96\n288,326,194.21\n7,916,696.92\n2,479,879,111.81\nFeb\n118,375,609.69\n85,995,682.64\n93,761,236.16\n312,626,341.50\n56,688,432.58\n147,245,179.36\n266,610,300.93\n273,709,371.16\n938,437,753.70\n39,909,193.60\n292,841,727.23\n6,842,518.78\n2,633,043,347.35\nMar\n119,963,933.20\n85,731,698.36\n100,697,025.58\n322,453,842.97\n45,619,349.07\n148,455,496.20\n286,712,763.58\n273,572,570.94\n1,064,798,433.60\n44,685,590.57\n330,031,150.72\n14,190,575.51\n2,836,912,430.30\nApr\n131,146,380.30\n89,322,733.64\n99,723,066.84\n324,249,300.08\n45,619,349.07\n149,245,957.86\n289,670,780.41\n273,578,020.75\n1,072,456,655.25\n44,926,335.64\n331,068,417.40\n14,190,575.51\n2,865,197,572.73\nMay\n269,460,363.15\n210,867,012.29\n216,906,304.04\n631,589,937.93\n113,357,505.65\n362,294,051.43\n581,761,350.37\n545,536,680.63\n2,504,454,969.80\n102,648,366.24\n702,960,786.40\n28,985,518.44\n6,270,822,846.38\nJun\n581,642,309.76\n428,772,683.41\n410,699,487.74\n1,366,510,052.55\n227,784,986.62\n700,617,673.80\n1,094,382,949.63\n1,185,026,806.70\n5,283,380,622.25\n199,474,750.17\n1,564,762,675.09\n40,673,167.41\n13,083,728,165.12\nJul\n535,377,934.43\n436,808,429.52\n413,150,823.99\n1,394,747,348.19\n206,866,966.84\n711,462,740.79\n1,157,802,106.76\n982,808,623.76\n4,533,520,705.60\n184,470,180.50\n1,464,856,207.23\n37,277,944.87\n12,059,150,012.48\nSource: Reserve Bank of Zimbabwe,2023\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \n$ ('000)\n \n \n \n26 \n \n \nEnd of\nNominal \nLending Rates 1\nIndividuals \nCorporate\n2021\nJan\n6.00-65.00\n32.65\n24.77\nFeb\n6.00-85.00\n36.67\n21.36\nMar\n6.00-85.00\n35.83\n22.61\nApr\n6.00-85.00\n35.22\n22.59\nMay\n6.00-85.00\n34.84\n21.76\nJun\n6.00-85.00\n36.25\n22.46\nJul\n6.00-85.00\n36.56\n21.66\nAug\n6.00-85.00\n41.06\n39.65\nSep\n6.00-85.00\n40.61\n39.50\nOct\n6.00-85.00\n41.86\n45.81\nNov\n6.00-8500\n39.13\n38.10\nDec\n6.00-8500\n39.34\n37.94\n2022\nJan\n15.00-85.00\n39.32\n39.62\nFeb\n15.00-85.00\n40.55\n64.02\nMar\n15.00-85.00\n40.74\n43.88\nApr\n15.00-85.00\n38.15\n45.56\nMay\n15.00-85.00\n38.01\n47.25\nJun\n15.00-85.00\n38.45\n48.25\nJul\n80.00-240.00\n82.75\n165.45\nAug\n80.00-230.00\n88.46\n155.96\nSep\n100.00-230.00\n98.07\n158.46\nOct\n100.00-290.00\n99.37\n115.26\nNov\n100.00-290.00\n99.03\n110.97\nDec\n100.00-290.00\n99.02\n110.83\n2023\nJan\n100.00-240.00\n90.05\n116.03\nFeb\n65.00-230.00\n60.12\n80.88\nMar\n65.00-230.00\n74.35\n81.46\nApr\n70.00-230.00\n74.48\n86.96\nMay\n70.00-230.00\n77.86\n83.61\nJun\n70.00-155.00\n76.33\n92.64\nJul\n64.00-155.00\n77.82\n94.80\nSource:Reserve Bank of Zimbabwe, 2023\nNotes\nTABLE 8.1: LENDING RATES (percent per annum)\n1. Nominal lending rates depict the range of rates quoted by banks.\n Commercial Banks\nWeighted Lending Rates\n \n \n \n27 \n \n \nTABLE 8.2 : BANK DEPOSIT RATES (percent per annum)\nEND OF\nSAVINGS\n3 MONTHS\n2021\nJan\n0.22-12.00\n2.00-21.50\nFeb\n0.22-12.00\n2.00-21.50\nMar\n0.22-12.00\n2.00-21.50\nApr\n0.22-12.00\n2.00-21.50\nMay\n0.22-12.00\n2.00-21.50\nJun\n0.25-12.00\n2.00-26.00\nJul\n0.50-12.00\n2.00-26.00\nAug\n0.50-12.00\n2.00-26.00\nSep\n0.50-12.00\n2.00-26.00\nOct\n0.50-12.00\n2.00-26.00\nNov\n0.50-12.00\n2.00-26.00\nDec\n0.50-12.00\n2.00-26.00\n2022\nJan\n0.50-12.00\n2.00-26.00\nFeb\n0.50-12.00\n2.00-26.00\nMar\n0.50-12.00\n2.00-26.00\nApr\n0.50-12.50\n2.00-30.00\nMay\n0.50-12.50\n2.00-32.00\nJun\n0.50-12.50\n2.00-32.00\nJul\n40.00\n80.00-92.00\nAug\n40.00\n80.00-92.00\nSep\n40.00\n80.00-92.00\nOct\n40.00\n80.00-92.00\nNov\n40.00\n80.00-92.00\nDec\n40.00\n80.00-95.00\n2023\nJan\n40.00\n80.00-110.00\nFeb\n30.00\n50.00-110.00\nMar\n30.00\n50.00-110.00\nApr\n30.00\n50.00-110.00\nMay\n30.00\n50.00-110.00\nJun\n30.00\n50.00-110.00\nJul\n30.00\n50.00-110.00\n Source:Reserve Bank of Zimbabwe, 2023\n* Deposit rates depict the range of rates qouted by banks. \nCOMMERCIAL BANKS\n \n \n \n28 \n \n \nALCOHOLIC \nBEVERAGES \nCLOTHING \n&\nHOUSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNIC\nATION\nRECREATION &\nEDUCATION\nRESTAUR\nANTS &\nMISC.\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2020\nJan\n1.83\n3.84\n0.60\n1.50\n5.32\n2.24\n2.77\n2.01\n9.39\n2.72\n1.86\n1.99\n2.55\n2.23\nFeb\n8.48\n10.01\n2.27\n7.00\n21.56\n9.62\n220.04\n17.96\n94.95\n2.92\n30.86\n18.41\n6.81\n13.52\nMar\n28.76\n37.12\n57.14\n29.35\n27.28\n18.10\n4.26\n58.79\n0.66\n17.49\n22.67\n32.44\n17.69\n26.59\nApr\n26.21\n13.46\n3.05\n24.06\n25.07\n8.87\n3.05\n9.42\n1.13\n21.08\n15.12\n11.38\n28.37\n17.64\nMay\n28.90\n18.99\n3.42\n21.36\n18.30\n22.97\n4.22\n10.04\n0.02\n29.69\n23.31\n15.41\n14.72\n15.13\nJun\n35.25\n48.84\n7.52\n38.21\n43.77\n32.48\n23.24\n39.46\n0.87\n32.46\n29.51\n27.61\n37.73\n31.66\nJul\n33.30\n35.93\n12.07\n32.45\n27.35\n50.65\n118.89\n17.13\n1.14\n37.84\n34.77\n33.76\n37.99\n35.53\nAug\n9.71\n7.52\n2.82\n7.83\n7.02\n11.02\n19.57\n7.75\n79.86\n8.40\n11.19\n10.03\n6.30\n8.44\nSep\n2.53\n1.71\n3.01\n1.52\n2.59\n1.69\n19.84\n5.79\n23.42\n0.33\n7.26\n5.08\n2.08\n3.83\nOct\n5.68\n2.51\n15.42\n0.95\n1.12\n3.02\n3.78\n1.59\n4.91\n4.22\n4.46\n5.33\n3.00\n4.37\nNov\n3.70\n3.73\n3.35\n2.02\n0.66\n3.60\n0.39\n1.74\n0.71\n4.36\n2.09\n2.63\n3.39\n3.15\nDec\n4.58\n3.08\n0.52\n3.26\n1.73\n3.61\n1.17\n1.26\n0.18\n2.12\n3.82\n2.63\n6.54\n4.22\n2021\nJan\n4.43\n1.15\n4.84\n3.35\n8.08\n3.87\n0.71\n1.72\n0.06\n8.48\n4.67\n3.70\n7.84\n5.43\nFeb\n3.27\n0.94\n3.21\n1.77\n2.48\n4.22\n0.01\n-0.51\n0.13\n1.94\n4.81\n2.73\n4.42\n3.45\nMar\n1.45\n0.57\n1.61\n1.45\n3.68\n1.32\n5.08\n1.18\n0.54\n3.50\n3.14\n2.06\n2.52\n2.26\nApr\n3.38\n2.21\n2.01\n4.06\n4.60\n1.86\n0.07\n2.09\n0.59\n4.67\n3.52\n2.60\n2.51\n2.56\nMay\n2.01\n1.25\n0.97\n5.35\n2.91\n1.99\n0.35\n19.13\n0.00\n24.14\n6.26\n3.75\n0.95\n2.54\nJun\n2.76\n3.05\n9.71\n4.36\n3.19\n3.40\n1.57\n1.87\n5.60\n1.84\n4.09\n4.38\n3.21\n3.88\nJul\n3.38\n2.21\n2.01\n4.06\n4.60\n1.86\n0.07\n2.09\n0.59\n4.67\n3.52\n2.60\n2.51\n2.56\nAug\n5.59\n5.06\n2.54\n5.65\n6.39\n4.78\n7.61\n3.06\n0.36\n4.99\n6.34\n4.95\n3.14\n4.18\nSep\n6.54\n4.91\n4.61\n5.18\n6.28\n4.95\n3.56\n3.68\n0.74\n5.01\n3.75\n4.67\n4.82\n4.73\nOct\n5.31\n4.86\n1.77\n5.84\n6.88\n9.33\n7.92\n5.31\n2.58\n8.60\n5.55\n5.56\n7.56\n6.40\nNov\n4.58\n3.82\n4.44\n3.97\n5.53\n5.57\n9.37\n3.25\n1.28\n10.88\n5.70\n5.21\n6.51\n5.76\nDec\n6.95\n5.56\n3.59\n4.88\n5.33\n6.79\n0.31\n4.03\n0.57\n6.23\n8.38\n5.76\n6.22\n5.76\n2022\nJan\n3.61\n2.94\n5.30\n5.11\n4.86\n4.40\n0.81\n5.66\n3.15\n7.36\n4.55\n4.25\n6.79\n5.34\nFeb\n6.72\n8.06\n4.19\n5.64\n5.06\n7.09\n1.66\n4.73\n7.84\n5.44\n7.85\n6.03\n8.25\n6.99\nMar\n5.66\n7.74\n2.20\n4.67\n6.46\n12.17\n7.55\n3.74\n3.25\n4.62\n7.86\n6.54\n6.03\n6.31\nApr\n15.35\n11.00\n22.17\n11.99\n13.57\n12.88\n0.73\n11.93\n19.15\n25.76\n9.44\n13.27\n18.47\n15.55\nMay\n16.22\n24.96\n8.28\n15.58\n21.21\n22.21\n1.83\n13.45\n10.48\n15.30\n24.07\n16.91\n25.95\n20.97\nJun\n25.84\n26.87\n41.42\n31.94\n35.89\n36.98\n14.77\n23.74\n8.37\n22.62\n25.66\n29.83\n31.68\n30.70\nJul\n19.38\n13.04\n43.58\n22.31\n27.94\n21.44\n3.73\n11.61\n7.95\n15.76\n18.93\n22.42\n29.08\n25.56\nAug\n15.49\n15.58\n6.64\n10.54\n13.24\n7.39\n5.81\n8.81\n8.58\n12.92\n13.21\n10.62\n14.25\n12.38\nSep\n3.96\n4.87\n12.08\n1.02\n3.47\n2.16\n8.64\n4.45\n30.04\n2.62\n1.70\n5.15\n1.75\n3.47\nOct\n1.82\n2.58\n4.21\n2.06\n2.05\n2.09\n6.83\n4.45\n2.15\n3.29\n4.27\n3.24\n3.06\n3.15\nNov\n1.47\n1.98\n1.15\n1.73\n1.45\n1.95\n7.54\n2.94\n5.24\n6.76\n4.42\n2.62\n0.92\n1.80\nDec\n2.69\n2.82\n0.75\n2.33\n2.13\n3.04\n4.59\n2.47\n0.37\n1.85\n2.89\n2.36\n2.50\n2.42\n2023*\nJan\n0.42\n-0.56\n1.86\n0.34\n0.45\n0.67\n-1.80\n0.50\n0.17\n-0.38\n0.48\n1.01\n0.37\n0.73\nFeb\n-2.19\n-1.46\n-1.14\n-1.26\n-0.65\n-2.76\n-1.47\n-1.91\n0.22\n-2.95\n-5.08\n-1.63\n-1.58\n-1.61\nMar\n0.19\n-0.37\n0.04\n-0.71\n0.63\n0.15\n0.39\n-0.17\n0.64\n-0.01\n-0.66\n0.00\n0.29\n0.13\nApr\n4.00\n0.36\n7.86\n-0.16\n4.03\n2.28\n1.20\n1.34\n2.19\n1.93\n3.19\n5.09\n-1.19\n2.36\nMay\n12.65\n1.55\n8.75\n0.00\n14.76\n10.24\n10.29\n4.21\n5.86\n5.55\n11.97\n8.41\n25.88\n15.74\nJun\n72.72\n12.66\n58.09\n-0.23\n82.27\n43.82\n57.22\n22.87\n22.56\n29.75\n47.65\n49.52\n104.16\n74.46\nJul\n10.82\n0.60\n1.12\n0.55\n-2.63\n5.99\n1.63\n-0.33\n2.35\n8.02\n4.19\n2.42\n-30.67\n-15.25\nSource:Zimstat, 2023\n*July 2020=100\nFOOD & NON \nALCOHOLIC \nBEVERAGES\nALL \nITEMS\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n(February 2019 = 100)\nTOTAL NON\n \n \n \n29 \n \n \nFOOD \nINFLATION\nALCO HO LIC \nCLO T HING\nHO US ING , \nW AT E R,\nFURNIT URE\nMIS C.\nFO O D & \nB E VE RAG E S \n& \nE LE CT RICT Y, \nG AS\nAND\nRE CRE AT IO N &\nRE S T AURANT S \n&\nG O O DS &\nT O T AL NO N\nNO N \nALCO HO LIC \nALL\n& T O B ACCO\nFO O T W E AR\n& O T HE R\nE Q UIP ME NT\nCULT URE\nHO T E LS\nS E RVICE S\nFO O D\nB E VE RAG E S\nIT E MS\nFUE LS\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2020\nFeb\n710.29\n629.57\n603.89\n254.34\n523.95\n785.04\n498.64\n946.38\n604.12\n262.80\n507.72\n839.15\n462.64\n540.16\nMar\n807.36\n721.94\n814.31\n444.09\n667.21\n1001.14\n585.97\n989.48\n975.94\n252.31\n582.94\n995.50\n616.11\n676.39\nApr\n980.03\n825.86\n873.49\n456.99\n799.24\n1048.61\n622.22\n984.76\n1017.34\n233.23\n590.62\n1097.13\n663.66\n765.57\nMay\n953.34\n881.65\n935.22\n461.76\n878.64\n1062.84\n664.43\n761.68\n847.15\n223.43\n739.67\n1254.79\n700.38\n785.55\nJun\n842.04\n863.68\n411.42\n725.77\n1040.97\n613.71\n937.83\n875.68\n226.03\n764.10\n1184.15\n678.29\n835.56\n737.26\nJul\n914.97\n925.92\n424.89\n761.12\n913.86\n750.68\n2013.62\n739.27\n196.93\n812.65\n1138.04\n755.27\n976.73\n837.53\nAug\n842.90\n895.39\n374.89\n735.12\n909.62\n611.88\n1405.52\n702.75\n413.11\n810.44\n1058.99\n698.90\n865.48\n761.02\nSep\n770.81\n761.81\n323.45\n638.97\n772.72\n519.65\n1681.32\n619.53\n508.37\n742.51\n820.76\n619.77\n724.40\n659.40\nOct\n544.43\n544.11\n252.56\n452.09\n554.64\n404.46\n1593.73\n454.72\n505.13\n536.36\n639.65\n470.47\n472.40\n471.25\nNov\n473.41\n464.54\n244.29\n385.99\n456.13\n376.50\n1404.55\n368.00\n420.46\n386.63\n509.46\n413.85\n385.02\n401.66\nDec\n437.80\n412.80\n163.67\n350.75\n401.81\n341.52\n1400.70\n348.33\n420.53\n330.15\n434.93\n350.17\n346.40\n348.59\n2021\nJan\n451.53\n399.55\n174.78\n358.95\n414.96\n348.54\n1370.61\n347.06\n376.10\n354.29\n449.65\n357.69\n369.43\n362.63\nFeb\n425.04\n358.36\n177.30\n336.52\n334.15\n326.47\n359.53\n277.07\n144.52\n349.97\n340.25\n297.07\n358.96\n321.59\nMar\n313.69\n236.18\n79.30\n242.33\n253.65\n265.87\n363.15\n140.26\n144.23\n296.40\n270.14\n206.00\n299.81\n240.55\nApr\n231.12\n201.33\n76.01\n178.83\n185.47\n239.16\n349.55\n121.37\n180.66\n238.80\n226.98\n178.93\n216.60\n194.07\nMay\n162.05\n156.40\n71.83\n142.05\n148.33\n181.30\n332.85\n139.66\n180.59\n224.31\n181.76\n150.75\n178.60\n161.91\nJun\n99.10\n77.51\n75.32\n82.76\n78.24\n119.54\n256.74\n75.07\n193.77\n149.35\n126.46\n105.12\n108.76\n106.64\nJul\n54.42\n33.47\n59.60\n43.58\n46.40\n48.44\n63.09\n52.59\n192.16\n89.35\n73.95\n57.33\n55.09\n56.37\nAug\n48.62\n30.42\n59.15\n40.69\n45.54\n40.10\n46.78\n45.94\n63.03\n83.38\n66.37\n50.07\n50.47\n50.25\nSep\n54.44\n34.53\n61.63\n45.76\n50.77\n44.60\n26.84\n43.02\n33.07\n91.94\n60.93\n49.48\n54.52\n51.55\nOct\n53.91\n37.62\n42.51\n52.82\n59.36\n53.46\n31.90\n48.25\n30.12\n100.00\n62.62\n49.81\n61.35\n54.49\nNov\n55.23\n37.74\n44.01\n55.75\n67.07\n56.38\n43.70\n50.46\n30.85\n112.50\n68.38\n53.57\n65.39\n58.40\nDec\n58.74\n41.06\n48.41\n58.21\n72.99\n61.17\n42.48\n54.57\n31.36\n121.06\n75.77\n57.74\n64.91\n60.74\n2022\nJan\n57.49\n43.55\n49.06\n60.90\n67.83\n61.99\n42.62\n60.55\n35.42\n118.79\n75.57\n58.59\n63.31\n60.61\nFeb\n62.76\n53.68\n50.47\n67.02\n72.05\n66.45\n44.98\n69.00\n45.86\n126.30\n80.66\n63.69\n69.29\n66.11\nMar\n69.51\n64.64\n51.34\n72.32\n76.66\n84.28\n48.39\n73.28\n49.79\n128.76\n88.93\n70.87\n75.09\n72.70\nApr\n93.55\n79.70\n82.80\n90.98\n98.73\n106.12\n49.43\n92.38\n53.56\n177.97\n103.32\n90.62\n104.05\n96.43\nMay\n120.52\n121.78\n96.06\n109.52\n134.07\n147.00\n51.63\n83.21\n69.66\n158.16\n137.39\n114.79\n154.57\n131.74\nJun\n170.03\n173.04\n152.72\n164.89\n208.25\n227.24\n71.33\n122.53\n74.10\n210.83\n186.59\n167.17\n224.80\n191.56\nJul\n211.82\n201.99\n255.69\n211.35\n277.03\n290.11\n77.60\n143.28\n86.85\n243.77\n229.24\n218.79\n308.97\n256.94\nAug\n241.07\n232.24\n269.94\n225.77\n301.31\n299.82\n74.63\n156.86\n102.14\n269.73\n250.51\n236.02\n353.03\n285.01\nSep\n232.79\n232.09\n296.36\n212.89\n290.70\n289.18\n83.20\n158.77\n160.94\n261.32\n243.60\n237.59\n339.73\n280.40\nOct\n221.77\n224.88\n305.85\n201.70\n273.06\n263.38\n81.35\n156.66\n159.83\n243.66\n239.43\n230.17\n321.32\n268.79\nNov\n212.20\n219.12\n293.08\n195.20\n258.64\n250.91\n78.32\n155.88\n170.00\n230.89\n235.31\n222.02\n299.20\n254.96\nDec\n199.74\n210.82\n282.31\n188.01\n247.74\n238.60\n85.92\n152.06\n169.46\n217.25\n218.34\n212.68\n285.19\n243.76\n2023*\nJan\n54.50\n35.04\n114.69\n30.03\n53.43\n44.30\n43.93\n24.75\n62.86\n55.30\n48.80\n74.21\n153.31\n101.51\nFeb\n47.63\n28.63\n107.65\n26.14\n50.84\n38.22\n40.89\n21.20\n61.84\n48.31\n38.03\n68.11\n136.85\n92.34\nMar\n43.64\n25.26\n105.73\n23.73\n49.59\n30.14\n37.82\n19.95\n62.26\n46.46\n35.94\n65.13\n127.92\n87.60\nApr\n42.30\n23.45\n92.18\n16.99\n51.08\n29.34\n37.19\n19.19\n59.13\n38.98\n36.38\n59.97\n101.65\n75.17\nMay\n51.65\n14.96\n102.58\n15.58\n65.37\n35.27\n47.74\n21.22\n66.05\n40.54\n42.98\n66.88\n116.96\n86.54\nJun\n134.74\n19.44\n169.11\n4.02\n156.97\n76.76\n119.49\n38.55\n93.76\n70.26\n87.14\n119.29\n255.60\n175.75\nJul\n140.85\n17.47\n126.93\n-1.22\n130.31\n77.04\n119.77\n33.71\n77.97\n77.39\n84.24\n99.93\n103.10\n101.30\nSource:Zimstat, 2023\n*July 2020=100\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n(February 2019 = 100)\nNON-FOOD INFLATION\nHE ALT H\nT RANS P O RT\nCO MMUNICAT IO N\nE DUCAT IO N\n \n \n \n30 \n \n \nUSA\nSOUTH ARFICAN\nBOTSWANA\nJAPANESE\nEURO\nPOUND\nEND OF\nDollar\nRAND\nPULA\nYEN\nSTERLING\n2021\nJan\n82.070\n5.4208\n7.4794\n0.7914\n99.9148\n111.9300\nFeb\n83.461\n5.6470\n7.6491\n0.7927\n100.9497\n115.5931\nMar\n83.996\n5.5989\n7.6072\n0.7732\n100.0262\n116.3990\nApr\n84.503\n5.8973\n7.8165\n0.7766\n102.4094\n117.7721\nMay\n84.726\n6.1449\n7.9642\n0.7720\n103.3021\n120.1879\nJun\n85.423\n5.9577\n7.8205\n0.7730\n101.6496\n118.3071\nJul\n85.637\n5.8616\n7.7630\n0.7816\n101.7414\n119.4212\nAug\n85.908\n5.8726\n7.7403\n0.7818\n101.5523\n118.4462\nSep\n87.665\n5.7988\n7.7321\n0.7833\n101.7268\n117.8528\nOct\n97.136\n6.4164\n8.5674\n0.8544\n113.3967\n133.9944\nNov\n102.075\n6.5794\n8.8336\n0.9441\n123.0208\n146.6991\nDec\n108.666\n6.8292\n9.2257\n0.9441\n123.0208\n108.6660\n2022\nJan\n115.422\n7.4069\n9.8109\n0.9995\n128.8401\n154.8332\nFeb\n124.019\n8.0738\n10.7214\n1.0732\n138.2625\n165.6148\nMar\n142.424\n9.8091\n12.4763\n1.1665\n159.0161\n186.8670\nApr\n159.348\n10.0334\n13.1064\n1.2217\n167.9530\n199.4880\nMay\n290.888\n18.7787\n24.3182\n2.2757\n312.8351\n367.1438\nJun\n366.269\n22.5194\n29.7593\n2.6861\n382.8607\n444.3572\nJul\n416.289\n25.2673\n33.2407\n3.1299\n425.1560\n507.7061\nAug\n546.825\n32.3336\n42.8164\n3.9498\n548.9033\n638.9381\nSep\n621.532\n34.5376\n46.4284\n4.2999\n609.9716\n691.9517\nOct\n632.137\n34.7014\n47.2839\n4.2742\n628.8500\n732.8998\nNov\n654.865\n38.5947\n51.0140\n4.7279\n677.5889\n784.3319\nDec\n671.447\n39.5836\n52.6414\n5.0669\n715.4935\n809.2610\n2023\nJan\n796.522\n45.7487\n61.8897\n6.1132\n863.6683\n983.1863\nFeb\n889.133\n48.1898\n66.7294\n6.5202\n941.1468\n1070.6489\nMar\n929.862\n52.0727\n71.3204\n6.9912\n1013.3634\n1151.6803\nApr\n1047.445\n57.1437\n79.4723\n7.7646\n1151.0384\n1309.3061\nMay\n2577.056\n130.3252\n186.5789\n18.4901\n2755.1310\n3192.3286\nJun\n5739.000\n306.2597\n425.5469\n39.6710\n6240.5886\n7250.9396\nJul\n4516.803\n255.8972\n346.4388\n31.8342\n4971.8704\n5801.8328\nSource: Reserve Bank of Zimbabwe, 2023\n TABLE 10 : SELECTED INTERNATIONAL EXCHANGE RATES\n1. ZWL$ dollar per unit of foreign currency\n \n \n \n31 \n \n \nEND OF\nMarket Capitalisation\nAll Share*\nZWL$ millions\n2020\nJan\n332.9\n344.9\n304.86\n179,559,446\n43,426.5\nFeb\n473.13\n826.73\n360.13\n172,678,984\n60,987.5\nMar\n456.21\n720.47\n425.24\n237,667,043\n58,612.1\nApr\n488.60\n826.64\n269.66\n107,308,931\n63,387.9\nMay\n1180.14\n1582.86\n568.96\n218,832,930\n152,719.7\nJune*\n1788.75\n3995.48\n379.93\n519,901,300\n228,577.1\nAug\n1389.23\n3709.15\n1,026.76\n164,501,200\n175,678.4\nSep\n1638.17\n4128.52\n4,640.88\n1,093,040,821\n206,502.5\nOct\n1476.87\n3792.35\n986.70\n397,006,127\n179,690.0\nNov\n1595.59\n3322.22\n4,103.78\n470,899,659\n193,270.8\nDec\n2636.34\n4134.09\n2,734.50\n316,737,200\n317,879.3\n2021\nJan\n3600.82\n4356.74\n3,513.59\n2,477,166,688\n434,856.23\nFeb\n4154.37\n6683.44\n1,529.25\n149,031,800\n501,184.95\nMar\n4489.47\n5315.39\n4,517.14\n203,633,747\n531,742.64\nApr\n4641.11\n5061.28\n3,075.98\n223,494,202\n540,745.24\nMay\n5428.28\n6820.54\n3,917.41\n188,748,200\n634,011.15\nJun\n6194.88\n6211.49\n4458.87\n248,500,624\n745,175.95\nJul\n6818.29\n6621.17\n2921.32\n181,010,800\n803,900.15\nAug\n6652.31\n6115.85\n3456.94\n147,232,800\n792,291.48\nSep\n8580.16\n6014.53\n4730.25\n2,909,442,557\n1,032,472.92\nOct\n11329.48\n6652.04\n5661.76\n108,843,000\n1,378,227.92\nNov\n 10695.57\n7193.11\n9883.24\n791,653,520\n1,290,069.75\nDec\n12079.74\n7815.37\n17577.25\n228,225,060\n1,317,205.11\n2022\nJan\n12079.74\n8196.79\n3704.23\n82,402,101\n1,475,217.45\nFeb\n14990.42\n9300.03\n7979.35\n156,327,700\n1,863,028.60\nMar\n15858.92\n11289.34\n8186.00\n117,815,800\n1,964,738.42\nApr\n28391.75\n30527.28\n11366.89\n193,411,483\n3,547,347.52\nMay\n23072.46\n20021.24\n8211.45\n195,475,400\n2,893,011.70\nJune\n19791.94\n20021.24\n14570.16\n271,227,100\n2,439,165.45\nJuly\n16594.91\n20021.24\n23673.34\n239,937,180\n2,068,222.01\nAug\n13705.12\n15473.37\n8674.85\n139,225,500\n1,685,592.28\nSept\n14771.65\n18929.75\n5128.54\n137,092,750\n1,819,157.07\nOct\n15072.14\n23659.53\n8657.90\n201,566,548\n1,826,101.68\nNov\n14577.46\n25478.67\n7680.78\n90,311,600\n1,610,203.36\nDec\n19493.85\n25487.77\n27753.79\n472,926,200\n2,044,869.14\n2023\nJan\n22813.24\n25496.86\n11638.16\n102,792,200\n2,460,037.66\nFeb\n28548.02\n29207.92\n24410.54\n164,006,458\n2,576,324.76\nMar\n38568.48\n37359.78\n14262.67\n97,920,600\n3,381,456.06\nApr\n41391.62\n36393.55\n16756.85\n74,505,000\n3,482,408.54\nMay\n108195.29\n52765.85\n34867.41\n206,593,600\n8,939,058.47\nJun\n171408.90\n76960.49\n85279.40\n192,473,571\n13,987,476.83\nJul\n114746.13\n89512.59\n40846.72\n176,547,600\n9,171,346.28\nSource:Zimbabwe Stock Exchange, 2023\n*All Share index was introduced in January, 2018\n**As at 26 June 2020\nIndices\nTABLE 11: ZIMBABWE STOCK MARKET STATISTICS\n Market Turnover \nZWL$ million \nVolume of Shares\nMining\n \n \n \n32 \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n255551.3\n-\n21042.2\n2300.3\n35349.1\n66624.4\nFeb\n226335.8\n-\n22882.6\n2288.9\n36434.4\n63598.2\nMar\n320422.1\n-\n28569.9\n3316.6\n44524.0\n86463.9\nApr\n288958.8\n-\n30071.5\n2807.0\n44131.6\n90580.4\nMay\n361427.1\n-\n36765.1\n3193.7\n49745.8\n89471.3\nJun\n388757.5\n-\n38540.1\n3200.0\n51437.4\n115145.7\nJul\n379659.9\n-\n45808.1\n2489.1\n57565.8\n145027.0\nAug\n397539.0\n-\n52853.9\n4086.0\n60908.4\n159206.6\nSep\n477933.6\n-\n52262.7\n4179.5\n64139.2\n181194.8\nOct\n481180.9\n-\n53165.9\n3839.9\n65329.0\n197972.5\nNov\n621896.7\n-\n56025.3\n4877.0\n63017.5\n252407.9\nDec\n747035.6\n-\n67903.9\n4705.5\n76511.6\n264749.2\n2022\nJan\n802677.7\n-\n55961.6\n5074.7\n53456.3\n218545.3\nFeb\n672723.0\n-\n59581.6\n5607.0\n66812.0\n238910.8\nMar\n961452.0\n-\n75050.7\n7882.2\n82886.9\n342168.7\nApr\n976617.2\n-\n89192.6\n8391.5\n89672.0\n293204.6\nMay\n1205990.0\n-\n110807.3\n13712.8\n106881.8\n469185.2\nJune\n1601225.3\n-\n134551.0\n18810.6\n123721.3\n618347.5\nJuly\n1754112.0\n-\n170480.6\n20413.1\n172562.5\n713401.1\nAug\n2334295.0\n-\n152343.4\n31418.6\n178188.9\n826377.1\nSep\n2793056.6\n-\n177701.7\n35144.4\n202368.1\n872807.4\nOct\n2728731.3\n-\n186478.9\n50202.3\n209758.0\n622412.8\nNov\n3370779.9\n-\n202876.2\n61086.7\n213295.3\n734610.6\nDec\n3310814.9\n-\n246783.6\n76872.0\n249516.4\n1106346.5\n2023\nJan\n3289379.3\n-\n240010.3\n68386.7\n238455.3\n1107756.4\nFeb\n3050933.3\n-\n219437.8\n73672.3\n245282.5\n1202998.5\nMar\n5068223.7\n-\n308609.1\n85343.4\n328822.3\n1517972.6\nApr\n5294044.5\n-\n341571.3\n79754.6\n355007.3\n1517972.6\nMay\n6275310.7\n-\n518333.9\n173170.7\n532078.6\n3274968.5\nJun\n17059664.0\n882362.6\n615190.9\n1210486.2\n6640627.1\nJul\n17859586.4\n1033836.9\n541445.6\n1620242.8\n6077538.3\nSource:Reserve Bank of Zimbabwe, 2023\nTABLE 12.1 : ZETSS AND RETAIL PAYMENTS \n Values of Transactions (ZWL$ millions)\n \n \n \n33 \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n720.0\n-\n9849.3\n229.0\n94691.4\n872.2\nFeb\n806.0\n-\n12309.3\n527.8\n90078.0\n754.9\nMar\n1112.8\n-\n15178.8\n751.0\n105272.0\n1003.7\nApr\n951.7\n-\n15185.0\n605.5\n97253.3\n1040.1\nMay\n1029.8\n-\n16511.3\n664.4\n103708.7\n994.8\nJun\n1076.9\n-\n14797.9\n581.9\n99349.6\n982.1\nJul\n1028.2\n-\n15217.6\n551.0\n102587.6\n980.8\nAug\n1045.0\n-\n14624.5\n475.4\n105269.7\n955.8\nSep\n1193.1\n-\n15397.6\n492.2\n104141.9\n2092.6\nOct\n1114.2\n-\n18207.4\n434.5\n107294.6\n2342.6\nNov\n1144.9\n-\n17435.9\n477.0\n98386.5\n2322.9\nDec\n1220.3\n-\n20029.6\n519.5\n106428.6\n2580.6\n2022\nJan\n957.9\n-\n15480.2\n439.9\n83661.8\n1902.9\nFeb\n981.0\n-\n15190.4\n433.7\n78916.1\n1895.3\nMar\n1242.3\n-\n16967.6\n519.1\n87501.1\n2128.6\nApr\n1073.0\n-\n15906.2\n458.0\n82673.4\n1937.6\nMay\n1213.5\n-\n16069.9\n477.8\n78385.2\n2001.2\nJune\n1190.3\n-\n15304.7\n474.2\n75631.7\n1705.1\nJuly\n1115.8\n-\n16063.8\n517.0\n88030.6\n1866.7\nAug\n1028.0\n-\n13686.8\n489.1\n76957.8\n1623.7\nSep\n1084.6\n-\n13084.7\n455.5\n71362.1\n2225.2\nOct\n969.3\n-\n12986.8\n510.9\n67641.7\n1825.4\nNov\n1001.4\n-\n12324.1\n499.9\n59151.5\n2430.2\nDec\n1013.6\n-\n14316.9\n616.7\n60584.5\n2469.8\n2023\nJan\n918.9\n-\n11734.0\n444.0\n48617.1\n1693.0\nFeb\n886.7\n-\n10301.5\n479.9\n43326.5\n1895.8\nMar\n1092.6\n-\n13217.0\n594.0\n50037.4\n1927.1\nApr\n907.6\n-\n14375.1\n526.7\n47171.7\n1982.9\nMay\n1119.2\n-\n12808.7\n576.7\n49143.2\n2233.6\nJun\n1050.2\n-\n10190.6\n606.0\n45488.8\n1213.0\nJul\n942.7\n-\n8226.8\n1777.1\n42648.8\n993.7\nSource:Reserve Bank of Zimbabwe, 2023\nTABLE 12.2 : ZETSS AND RETAIL PAYMENTS \n Volumes of Transactions (000's)\n \n \n \n34 \n \n \nEND OF\nEXPORTS\nIMPORTS\nTOTAL TRADE TRADE BALANCE\n2021\nJan\n282.9\n460.3\n743.20\n-177.4\nFeb\n340.8\n451.9\n792.70\n-111.1\nMar\n461.8\n527.2\n989.00\n-65.4\nApr\n444.7\n489.9\n934.60\n-45.2\nMay\n486.8\n503.1\n989.91\n-16.2\nJun\n502.5\n622.2\n-119.7\n-55.6\nJul\n629.9\n667.6\n-37.7\n-37.7\nAug\n597.3\n630.2\n-32.9\n-32.9\nSep\n514.4\n666.7\n-152.2\n-152.3\nOct\n535.5\n713.6\n-178.1\n-178.1\nNov\n647.6\n684.3\n-36.7\n-36.7\nDec\n591.2\n771.2\n-179.9\n-180.0\n2022\nJan\n543.9\n633.2\n-88.1\n-89.3\nFeb\n438.0\n630.1\n1068.1\n-192.2\nMar\n557.6\n713.8\n1271.4\n-156.2\nApr\n587.3\n637.2\n1224.5\n-49.9\nMay\n513.1\n714.4\n1227.6\n-201.3\nJun\n541.0\n751.4\n1292.3\n-210.4\nJul\n548.4\n728.2\n1276.6\n-179.9\nAug\n493.6\n759.9\n1253.4\n-266.3\nSep\n552.3\n765.3\n1317.6\n-213.1\nOct\n502.3\n770.5\n1272.8\n-268.2\nNov\n674.6\n802.2\n1476.8\n-127.5\nDec\n633.5\n772.6\n1406.1\n-139.1\n2023\nJan\n427.8\n634.9\n1062.7\n-207.1\nFeb\n435.9\n623.4\n1059.3\n-187.5\nMar\n515.3\n746.3\n1261.6\n-231.0\nApr\n555.5\n708.1\n1263.7\n-152.6\nMay\n654.2\n851.0\n1505.2\n-196.8\nJun\n641.3\n726.4\n1367.7\n-85.1\nJul\n603.2\n782.9\n1386.1\n-179.6\nSource: ZIMSTAT, 2023\nTABLE 13 : MERCHANDISE TRADE STATISTICS\n (US$ millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monthly_Economic_Reviews/Monthly_Economic_Review_July_2023.pdf"}
{"doc_id": "be5f41c1eefd9c460ad8e75c5cdf1920", "text": "About us\nWhat we do\nPublications\nNewsroom\nContact us\nSARB POLICY RATE 6.75% \n\n24 Apr 2026\n\nCPI 3.1% \n\nMar 2026\n\nPPI 1.8% \n\nFeb 2026\n\nPRIME 10.25% \n\n24 Apr 2026\n\nR2030\n\t\n\nR209\n\t\n\nSABOR\n\t\n\nZARONIA\n\t\nZAR/USD\n\t\n16.6276\n\nZAR/GBP\n\t\n22.4116\n\nZAR/EUR\n\t\n19.4385\n\nZAR/JPY\n\t\n0.1041\nHome Publications Monetary Policy Review – April 2026\n \n\nMONETARY POLICY REVIEW – APRIL 2026\n\nJump to documentation\n\nFind more MPR publications\n\nThe conflict in the Middle East has interrupted global disinflation and shifted the inflation outlook higher.\n\n \n\nPrices for oil, gas, fertilisers and aluminium have risen sharply amid emerging supply shortages. Meanwhile, uncertainty remains high regarding the conflict’s duration and intensity; while infrastructure destruction may delay supply normalisation even after hostilities end. Inflation pressures may also arise from countries replicating supply chains to strengthen resilience.\n\nMajor central banks have paused rate cuts at recent meetings and are expected to remain cautious as they wait for new information. This posture is helped by policy settings that are generally moderately restrictive, affording authorities more room to look through first-round energy effects. Markets increasingly expect most major central banks to raise rates this year.\n\nWith uncertainty elevated, global financial markets are likely to remain volatile. South African assets have also sold off amid risk aversion but have so far been relatively resilient, supported by improved macroeconomic fundamentals.\n\nSpillovers from the shock are expected to affect but not derail South Africa’s transition to the 3% target. Inflation was at 3% in February 2026, aligning with the SARB’s target. Headline inflation is projected to rise this year but remain within the plus or minus 1 percentage point tolerance band and return to target by late 2027.\n\nUncertainty remains high and the scale of second-round effects is difficult to quantify. Alternative oil-price paths suggest materially different inflation trajectories, with potentially large non-linear pass-through effects. While the QPM-implied policy rate path suggests rate cuts will be delayed to the fourth quarter, scenarios show that it may be necessary to raise rates.\n\nDomestic growth strengthened to 1.1% last year, with momentum expected to continue pushing it close to 2% by 2028. However, risks to household consumption are skewed to the downside amid higher fuel prices and potential squeeze on household real income and wealth.\n\nIn a less supportive global environment, growth and resilience will depend more on domestic factors. Recent de-risking gains can be reinforced through speedier implementation of structural reforms, improved pricing efficiency for administered goods and services as well as achievement of a prudent public debt level.\n\n \n\nAttachments:\nMonetary Policy Review - April 2026\nMPR data\nMPF April 2026 Presentation\nWatch the release of the MPR below:\nQuick links\nFrequently asked questions\nGold Coins Purchased from the Public\nCareers\nInternet banking\nForms\nExtranets\nWhistleblowing\nPromotion of Access to Information Manual\nSARB Group Privacy Notice\nProcurement\nFraud and scams\nRSS feed subscription\nDisclaimer\nSitemap\nCookie policy\nContact\n\nTo contact us, click here\n\nTelephone: 0861 127 272 \n\n370 Helen Joseph Street,\n\nPretoria, 0002\n\nP O Box 427,\n\nPretoria, 0001\n\nDownload app\nQuarterly Bulletin\nSocial Media\n \nSupported Browsers\n \nThe South African Reserve Bank © Copyright 2020.", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-04-27", "url": "https://www.resbank.co.za/en/home/publications/publication-detail-pages/reviews/monetary-policy-review/2026/april"}
{"doc_id": "d23602a8d0a8ddd69451b3af495f5616", "text": "Vol. 25 No. 38 \n \n \nWeek Ending \n22nd September 2023 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ................................................................................................ 1 \n2. \nINTEREST RATES .................................................................................... 1 \n3. \nCLEARING AND SETTLEMENT ACTIVITY ...................................... 3 \n4. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ......... 5 \n5. \nEQUITY MARKETS.................................................................................. 7 \n6. \nMONETARY POLICY AND CLIMATE CHANGE RISKS ............... 11 \n \n \n \n \n 1 \n1. \nOVERVIEW \n \nThis report provides an analysis of the developments in the money and capital markets for the \nweek ending 22nd September 2023. The report also covers developments in mineral commodities \nand stock markets during the week. The last section of the report presents a brief on monetary \npolicy and climate change risks. \n \n \nSubsequently, the Zimbabwe Stock Exchange (ZSE) traded negatively while the Victoria Falls \nStock Exchange (VFEX) exhibited bullish sentiments. The value of transactions processed \nthrough the National Payment System (NPS) registered a decline during the week under analysis \ncompared to the previous week. \n \nThe minimum and maximum deposit rates for both the domestic currency deposits and foreign \ncurrency deposits remained largely unchanged during the week under review. Conclusively, on \nthe international front, commodity prices for gold, platinum, palladium, crude oil increased while \nprices for copper, nickel and lithium retreated. \n \n \n2. \nINTEREST RATES \n \nLocal Currency (ZWL) Deposit Rates \n \nDuring the week ending 22nd September 2023, minimum and maximum ZWL deposit rates for \nof 1-month, 6-month and 12-month tenors remained largely unchanged. Minimum deposit rates \nfor savings deposits and deposits of 3-month tenor registered an increase. Maximum deposit rates \nfor savings deposits were higher while those for deposits of 3-month tenor were lower during the \nweek under analysis. \nTable 1: Average Deposit Rates (per annum) \nDate \nSavings deposits (%) \n \n1- Month deposit \nrates (%) \n \n3- Month deposit \nrates (%) \n \n6- Month deposit \nrates (%) \n \n12- Month deposit \nrates (%) \n \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \n25-Aug-23 \n \n34.29 \n34.29 \n59.00 \n70.11 \n57.67 \n70.35 \n59.17 \n68.64 \n59.33 \n68.79 \n01-Sep-23 \n34.29 \n35.60 \n59.00 \n70.11 \n57.67 \n70.35 \n59.17 \n68.64 \n 59.33 \n68.79 \n08-Sep-23 \n34.29 \n35.60 \n59.00 \n70.11 \n61.67 \n69.22 \n59.17 \n67.40 \n 59.33 \n67.53 \n15-Sep-23 \n34.29 \n35.60 \n59.00 \n70.11 \n61.67 \n70.89 \n59.17 \n68.64 \n 59.33 \n68.79 \n22-Sep-23 \n38.14 \n38.80 \n59.00 \n70.11 \n65.59 \n61.67 \n59.17 \n68.64 \n59.33 \n68.79 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n 2 \nLocal Currency Lending Rates \n \nThe minimum ZWL lending rates for individual clients decreased while maximum ZWL lending \nrates for individual clients increased during the week under analysis. Minimum and maximum \nZWL lending rates for corporate clients registered increases during week under review. The \nZWL lending rates are shown in Table 2. \n \n \nTable 2: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n18-Aug-23 \n77.83 \n102.86 \n93.46 \n165.81 \n25-Aug-23 \n77.63 \n102.79 \n93.18 \n166.18 \n01-Sep-23 \n76.78 \n100.11 \n92.40 \n166.33 \n08-Sep-23 \n76.51 \n99.92 \n91.76 \n166.02 \n15-Sep-23 \n76.71 \n99.96 \n91.58 \n165.85 \n22-Sep-23 \n76.59 \n100.04 \n92.67 \n167.36 \nSource: Reserve Bank of Zimbabwe, 2023 \n \nForeign Currency (USD) Deposit Rates \n \nDuring the week under review, minimum and maximum FCA deposit rates for all classes of \ndeposits remained largely unchanged. Average foreign currency deposits rates are shown in \nTable 3. Banks continue to offer higher deposit rates for deposits of longer tenor in order to \nattract deposits of onward lending to the productive sectors. \n \nTable 3: Average Foreign Currency Deposit Rates (per annum) \n \nDate \nSavings deposits (%) \n1- Month deposit \nrates (%) \n \n3- Month deposit \nrates (%) \n \n6-Month deposit \nrates (%) \n \n12- Month deposit \nrates (%) \n \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \n25-Aug-23 \n1.27 \n1.81 \n3.15 \n4.62 \n3.33 \n5.00 \n3.35 \n5.27 \n3.43 \n5.50 \n01-Sep-23 \n1.27 \n1.81 \n3.15 \n4.62 \n3.33 \n5.00 \n3.35 \n5.27 \n3.43 \n5.50 \n08-Sep-23 \n1.27 \n1.81 \n3.15 \n4.62 \n3.33 \n5.00 \n3.35 \n5.27 \n3.43 \n5.50 \n15-Sep-23 \n1.27 \n1.81 \n3.15 \n4.62 \n3.33 \n5.00 \n3.35 \n5.27 \n3.43 \n5.50 \n22-Sep-23 \n1.27 \n1.81 \n3.15 \n4.62 \n3.33 \n5.00 \n3.35 \n5.27 \n3.43 \n5.50 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n 3 \nForeign Currency (USD) Lending Rates \n \n \nMinimum foreign currency lending rates for individuals decreased while the maximum lending \nrates increased during the week under analysis ending. Minimum and maximum foreign currency \nlending rates for corporate clients were higher during the week under analysis. \n \nTable 4: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \nCorporate Clients \n \n25-Aug-23 \n11.28 \n13.19 \n8.03 \n14.36 \n01-Sep-23 \n11.22 \n13.23 \n7.12 \n14.92 \n08-Sep-23 \n11.29 \n13.16 \n8.25 \n14.20 \n15-Sep-23 \n11.21 \n13.29 \n8.18 \n14.26 \n22-Sep-23 \n11.19 \n13.32 \n8.19 \n14.28 \nSource: Reserve Bank of Zimbabwe, 2023 \n3. \nCLEARING AND SETTLEMENT ACTIVITY \n \nThe total value of transactions processed through NPS platforms amounted to ZW$5.01 trillion, \nrepresenting a decrease of 1.94% from ZW$5.11 trillion in the previous week. Real Time Gross \nSettlement (RTGS) system transactions constituted 84.42% of the total value of transactions \nprocessed through the NPS. In value terms, NPS transactions were distributed as shown in \nFigure1. \n \nFigure 1: Composition of NPS Transactions in Value Terms \n \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \nRTGS\n84.42%\nPOS\n7.62%\nATM\n3.79%\nMOBILE\n4.17%\nRTGS\nPOS\nATM\nMOBILE\n \n 4 \nThe volume of transactions processed through the NPS increased by 5.13% to close at 10.55 \nmillion driven by increases in RTGS and POS transactions volumes. NPS transaction volumes \nwere distributed as follows: Mobile, 73.50%; POS, 23.11%; ATM, 1.46%; and RTGS, 1.93%, \nas shown in Figure 2. \n \n Figure 2: Composition of NPS Transactions in Volume Terms \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \nTable 5: National Payment Systems Activity \nPAYMENT \nSTREAM \nWEEK ENDING \n15 September 2023 \nWEEK ENDING \n22 September 2023 \n% CHANGE \nFROM LAST \nWEEK \nPROPORTION \n% \nValues in ZW$ Millions \nRTGS \n4,484,949.05 \n4,227,255.76 \n-5.75% \n84.42% \nPOS \n223,612.37 \n381,504.39 \n70.61% \n 7.62% \nATM \n162,870.54 \n189,755.49 \n16.51% \n3.79% \nMOBILE \n234,699.36 \n208,743.47 \n -11.06% \n4.17% \nTOTAL \n5,106,131.33 \n5,007,259.11 \n-1.94% \n100% \nVolumes \nRTGS \n187,357 \n203,787 \n8.77% \n1.93% \nPOS \n 1,713,368 \n2,438,936 \n42.35% \n23.11% \nATM \n163,104 \n153,600 \n-5.83% \n1.46% \nMOBILE \n7,975,639 \n7,757,701 \n-2.73% \n73.50% \nTOTAL \n10,039,468 \n10,554,024 \n5.13% \n100% \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \n \n \n \n \nRTGS, 1.93%\nPOS, 23.11%\nATM, 1.46%\nMOBILE, 73.50%\nRTGS\nPOS\nATM\nMOBILE\n \n 5 \n4. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS \n \n \nDuring the week of analysis, international commodity prices for gold, platinum, palladium and \ncrude oil increased, while prices for copper, nickel and lithium retreated. Table 7 shows \ncommodity price developments during the week under analysis. \n \nTable 7: Metal and Crude Oil Prices for the week ending 22nd September 2023 \n \nGold \nPlatinum \nPalladium \nCopper \nNickel \nCrude Oil \nLithium \n2023 \nUS$/ounce \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nUS$/barrel \nUS$/tonne \n \nWeekly Average \n (11 - 15 Sep) \n1,915.96 \n906.40 \n1,237.10 \n8,416.40 \n20,083.00 \n92.85 \n28,680.00 \n18-Sep \n1,924.95 \n934.00 \n1,250.00 \n8,327.00 \n19,775.00 \n94.95 \n28,100.00 \n19-Sep \n1,934.95 \n943.50 \n1,262.00 \n8,332.00 \n19,900.00 \n92.84 \n28,100.00 \n20-Sep \n1,936.75 \n944.00 \n1,284.50 \n8,280.50 \n19,460.00 \n92.84 \n27,900.00 \n21-Sep \n1,919.20 \n918.50 \n1,247.50 \n8,194.00 \n19,123.00 \n93.85 \n27,700.00 \n22-Sep \n1,926.78 \n937.00 \n1,272.50 \n8,184.50 \n19,325.00 \n93.79 \n27,500.00 \nWeekly Average \n(18 - 22 Sep) \n1,928.53 \n935.40 \n1,263.30 \n8,263.60 \n19,516.60 \n93.65 \n27,860.00 \nWeekly Change (%) \n0.66 \n3.20 \n2.12 \n-1.82 \n-2.82 \n0.87 \n-2.86 \nSource: BBC, KITCO and Bloomberg 2023 \n \nGold \n \nGold prices increased by 0.66%, from an average of US$1,915.96 per ounce reported in the \nprevious week to US$1,928.53 per ounce during the week under review. The metal price surged \nas markets continued experiencing uncertainty regarding the timing of the U.S. Federal Reserve’s \ndecision to hike rates. \n \nPlatinum \nThe week under review saw platinum prices increasing by 3.20%, from US$906.40 per ounce \nreported in the previous week to US$935.40 per ounce. The price rise was underpinned by \nincreased demand for the precious metal supported by stronger-than-expected economic growth \nfrom China. \n \nPalladium \nDuring the week ending 22nd September 2023, palladium prices rose by 2.12% to US$1,263.30 \nper ounce, from US$1,237.10 per ounce recorded in the previous week. The price rise was \nsupported by increased demand for the metal and the stronger-than-expected economic reports \nfrom China. \n \n 6 \n \nCopper \nDuring the week ending 22nd September 2023, copper prices decreased by 1.82% to US$8,263.60 \nper tonne from US$8,416.40 per tonne recorded in the prior week. The price of the red metal fell \namid the strong U.S. dollar, high inventories and reduced risk appetite after the U.S. Federal \nReserve signalled that the monetary policy would remain restrictive for longer. \n \n \nNickel \nNickel prices continued the negative momentum, decreasing by 2.82% to close at US$19,516.60 \nper tonne during the week under review, from US$20,083.00 per tonne reported in the previous \nweek. Weak demand prospects from China, the world’s largest metal consumer, pulled prices \nback. \n \nLithium \nLithium prices reduced by 2.86%, from US$28,680.00 per tonne reported in the previous week \nto US$27,860.00 per tonne during the under-analysis week. Price declined amid weakened \ndemand for battery electrolytes and battery cells. \n \nBrent Crude Oil \nCrude oil prices increased by 0.87%, from US$92.85 per barrel recorded in the previous week to \nUS$93.65 per barrel during the week ending 22nd September 2023. Tight global supplies from \nOPEC+ members largely influenced the increase in oil prices. \n \nExchange Rate Developments \nInterbank Market \nThe Zimbabwe dollar (ZW$) depreciated by 6.82% on the interbank market, from an average of \nZW$4,723.22 per US$1 in the prior week to ZW$5,045.50 per US$1, during the week under \nreview, as shown in Table 8. \n \n \n \n \n \n 7 \nTable 8: Selected Exchange Rates (ZW$ per unit of foreign currency) \n2023 \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average (11 - 15 Sep) \n4,723.2212 \n253.2139 \n5,898.6931 \n345.9524 \n5,002.1677 \n18-Sep \n4,924.6790 \n256.4103 \n6,106.1600 \n357.6832 \n5,254.8913 \n19-Sep \n4,996.9694 \n263.1579 \n6,183.9995 \n363.0298 \n5,336.2636 \n20-Sep \n5,015.4279 \n270.2703 \n6,215.8705 \n367.1293 \n5,358.2324 \n21-Sep \n5,119.5946 \n277.7778 \n6,307.3405 \n376.8021 \n5,445.2007 \n22-Sep \n5,170.8074 \n277.7778 \n6,350.2686 \n379.0202 \n5,507.9440 \nWeekly Average (18 - 22 Sep) \n5,045.4957 \n269.0788 \n6,232.7278 \n368.7329 \n5,380.5064 \nAppr (-)/Depr (+) (%) of the ZWL \n6.82 \n6.3 \n5.7 \n6.6 \n7.6 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \n5. EQUITY MARKETS \n \nDuring the week ending 22nd September 2023, the Zimbabwe Stock Exchange (ZSE) traded \nnegatively, and the Victoria Falls Stock Exchange (VFEX) exhibited bullish sentiments. \nResultantly, the ZSE All Share index lost 19,37% while the VFEX All Share index gained by \n2.31% to close at 115 490.04 points and 72.43 points, respectively. \n \nZimbabwe Stock Exchange (ZSE) Developments \n \nThe Top 10, Top 15 and Small Cap indices lost by 29.59%, 25.48% and 2.77% to close at 48 \n853.49 points, 69 366.31 points and 2 282 585.59 points, compared to previous week’s positions \nof 69 387.77 points, 93 084.44 points and 2 347 578.77 points, respectively. \n \nThe resource index remained unchanged at 125 531.67 points during the week under review. \nFigure 3 shows developments on the ZSE’s All Share, Top 10 and Mining indices from 7th \nOctober 2022 to 22nd September 2023. \n \n \n \n \n \n \n \n \n \n \n 8 \nFigure 3: ZSE All Share, Top 10 and Mining Indices \n \nSource: Zimbabwe Stock Exchange, 2023 \n \n \nThe decline in the mainstream index was a result of share price losses in Ecocash Holdings LAS \n(82.68%), SeedCo Limited (44.33%), Delta Corporation Limited (41.98%), CBZ Holdings \nLimited (33.77%) and Tanganda Tea Limited (25.43%). \n \nIncreases were registered in share prices for Turnall Holdings Limited (17.65%), NMBZ \nHoldings Limited (15.43%), Unifreight Africa Limited (15.00%), National Trye Service Limited \n(14.88%) and First Mutual Properties Limited (11.20%). \n \nMarket Turnover \n \nDuring the week under analysis, cumulative volume and value of shares traded declined by \n23.99% and 37.09% to 20.60 million shares and ZW$9,310.74 million, respectively. This \ncompares to 27.10 million shares and ZW$14,799.88 million recorded in the prior week, \nrespectively. \n \nFigure 4 shows the trend in daily market turnover for the period 16th September 2022 to 15th \nSeptember 2023. \n \n \n10,100\n20,100\n30,100\n40,100\n50,100\n60,100\n70,100\n80,100\n90,100\n100,100\n110,100\n120,100\n0\n20,000\n40,000\n60,000\n80,000\n100,000\n120,000\n140,000\n160,000\n180,000\n200,000\n07-Oct-22\n21-Oct-22\n04-Nov-22\n18-Nov-22\n02-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\n24-Mar-23\n07-Apr-23\n21-Apr-23\n05-May-23\n19-May-23\n02-Jun-23\n16-Jun-23\n30-Jun-23\n14-Jul-23\n28-Jul-23\n11-Aug-23\n25-Aug-23\n08-Sep-23\n22-Sep-23\nMining Index\nAll Share and Top 10 Indices\nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n \n 9 \nFigure 4: Market Turnover \nSource: Zimbabwe Stock Exchange, 2023 \n \nMarket Capitalization \n \nDue to the subdued trading activity on the ZSE during the week under review, the market lost \n20.92%, or ZW$2,387.01 billion worth of capitalization to close at ZW$9,022.01 billion, \ncompared to ZW$11,409.03 billion registered in the previous week. \n \n \nFigure 5 shows the evolution of market capitalization for the period 23rd September 2022 to 22nd \nSeptember 2023. \n \nFigure 5: Market Capitalization \nSource: Zimbabwe Stock Exchange, 2023 \n0\n5,000\n10,000\n15,000\n20,000\n25,000\n30,000\n35,000\n40,000\n45,000\n50,000\n23-Sep-22\n07-Oct-22\n21-Oct-22\n04-Nov-22\n18-Nov-22\n02-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\n24-Mar-23\n07-Apr-23\n21-Apr-23\n05-May-23\n19-May-23\n02-Jun-23\n16-Jun-23\n30-Jun-23\n14-Jul-23\n28-Jul-23\n11-Aug-23\n25-Aug-23\n08-Sep-23\n22-Sep-23\n(ZW$ (Million)\nNegotiated Deal: 241 million \nFirst Mutual Holdings \nLimited shares exchanged \n0\n1,500\n3,000\n4,500\n6,000\n7,500\n9,000\n10,500\n12,000\n13,500\n15,000\n16,500\n23-Sep-22\n07-Oct-22\n21-Oct-22\n04-Nov-22\n18-Nov-22\n02-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\n24-Mar-23\n07-Apr-23\n21-Apr-23\n05-May-23\n19-May-23\n02-Jun-23\n16-Jun-23\n30-Jun-23\n14-Jul-23\n28-Jul-23\n11-Aug-23\n25-Aug-23\n08-Sep-23\n22-Sep-23\n$ Billions\n \n \n10 \nVictoria Falls Stock Exchange (VFEX) Developments \n \nThe increase in the VFEX mainstream index was a result of share price gains in First Capital \nBank Limited (36.32%), Caledonia Mining Corporation (20.00%), African Sun Limited \n(14.00%), Innscor Africa Limited (5.38%), Simbisa Brands Limited (3.66%) and Axia \nCorporation Limited (0.50%). \n \nPartially offsetting the aforementioned gains were losses in the share prices of National Foods \nHoldings Limited (17.44%), Padenga Holdings Limited (0.28%) and Seed Co International \n(0.21%). \n \nVFEX Market Turnover \n \nThe VFEX cumulative volume and value of shares traded declined by 1.21% and 13.09% to 5.63 \nmillion shares and US$0.36 million compared to 5.70 million shares and US$0.42 million, \nrecorded in the previous week, respectively. \n \nVFEX Market Capitalization \n \nDue to increased investor appetite on the VFEX during the week under review, the market added \n2.32% worth of capitalization to close at US$1.24 billion compared to US$1.21 billion recorded \nin the prior week. \n \nFigure 6 shows the trend in the VFEX All Share Index (ASI) for the period 23rd September 2022 \nto 22nd September 2023. \n \n \n \n \n \n \n \n \n \n \n \n11 \nFigure 6: VFEX All Share Index \n \n Source: Victoria Falls Stock Exchange (VFEX), 2023 \n \n6. MONETARY POLICY AND CLIMATE CHANGE RISKS \n \nThere is wide consensus among policy makers and central banks the world over that natural \ndisasters such as adverse climate change and disease pandemics have far reaching negative \neffects on financial sector development and stability through their adverse impacts on economic \ngrowth, terms of trade, inflation, and production competitiveness. The catastrophes directly or \nindirectly interfere with the smooth transmission of monetary policy. During the covid-19 \npandemic, for example, it became harder to quantify the risk of going to work or conducting \nbusiness, let alone the treatment of the pandemic. Thus, the pandemic had lasting impact on \nbusiness and business methods, including banks’ risk perceptions, management, and balance \nsheets, with adverse effects on credit, economic performance, and policy transmission. Similar \ndisruptions on global capital flows and production supply chains are deducible from the effects \nof the current war in Ukraine and the risks around the devastating effects of climate change. \n \nZimbabwe, like many other countries in the developing world is susceptible to the effects of \nclimate change. The country has a long history of droughts which, when augmented and \ncompounded by other shocks lead to disturbances on macroeconomic stability, including price \nand exchange rate stability with potential spillover effects on the financial sector. As such there \n40\n50\n60\n70\n80\n90\n100\n110\n120\n130\n140\n150\n23-Sep-22\n07-Oct-22\n21-Oct-22\n04-Nov-22\n18-Nov-22\n02-Dec-22\n16-Dec-22\n30-Dec-22\n13-Jan-23\n27-Jan-23\n10-Feb-23\n24-Feb-23\n10-Mar-23\n24-Mar-23\n07-Apr-23\n21-Apr-23\n05-May-23\n19-May-23\n02-Jun-23\n16-Jun-23\n30-Jun-23\n14-Jul-23\n28-Jul-23\n11-Aug-23\n25-Aug-23\n08-Sep-23\n22-Sep-23\n \n \n12 \nis greater need to understand and monitor climate related risks that may negatively impact on \ninflation stability, soundness of the financial system and effectiveness of policy transmission. \n \n Figure 7: Climate Change Transmission Channels \nSource: International Monetary Fund, (2019) \n \nFigure 7 shows the climate change transmission channels, which occur through at least two \ntransmission ways which stem from the physical risks and transition risks. The physical risks \nincorporate infrastructural and property damages whilst transition risks are inclusive of climate \npolicy and changes to consumer preferences. This in turn results in economic disruptions which \nencompass asset losses, credit losses and reconstruction costs. \n \nZimbabwe recently experienced the negative effects of climate change when Cyclone Idai hit the \ncountry in March 2019. The cyclone was characterized by widespread floods and strong winds, \nwhich is evident of climate change. Cyclone Idai caused substantial damage to infrastructure and \nloss of livelihoods particularly in the Eastern parts of the country. This in turn had a detrimental \neffect on the economy as there were disruptions in economic activities. The agricultural sector \nwas affected through the destruction of livestock and crops leading to spillover effects on \nagricultural output and food security. Consequently, the slowdown in agricultural activities \nweighed down overall economic growth compounding with other factors leading to higher \ninflationary pressures in the economy in 2019. \n \n \n13 \nTurning to recent climate change events, the World Meteorological Organization (WMO) has \npredicted that the probability of the occurrence of El Nino phenomenon is high in the Southern \nparts of Africa including Zimbabwe. The El Nino is typically characterised by above normal \ntemperatures in the eastern and central Pacific Ocean tropical area. The consequences of El Nino \nparticularly in the southern parts of Zimbabwe are drought conditions that are likely to affect \nwater supply for human, livestock and industrial consumption. This can potentially dent the \ncountry’s economic growth prospects and lead to elevated prices particularly food prices. \n \nNotably, the Government has been proactive in dam construction and rehabilitation projects to \nwaterproof agriculture, as part of measures to mitigate against the negative effects of climate \nchange shocks emanating from droughts. The Bank on its part will continue to actively monitor \nclimate change risks with the view of implementing appropriate monetary policy measures that \ndampen the burden on economic agents during hard times induced by climate change. \n \n \nRESERVE BANK OF ZIMBABWE \n \n \n APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR MAINFX1 AND WHOLESALEFX 2 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n1 Main Foreign Currency Auction. The Auction is normally conducted every Tuesday every week. \n2 Wholesale Foreign Currency Auction (Wholesale FX). The RBZ MPC resolutions dated 6 June 2023 resolved that with effect from 7 June 2023, the Bank shall sell foreign currency at the market-determined exchange \nrate through banks to support and strengthen the foreign exchange interbank market, and banks shall in turn sell the foreign currency to their customers. \n \n \n \n 16-August-23 \nWHOLESALFX \n29- Aug-23 \n \n12-Sep-23 \n \n19-Sep-23 \nTotal \nBids (US$ dollars) \n18,854,776.00 \n 19,610,040.40 \n \n18,726,643.25 \n \n19,232,100.00 \nAmount Allotted (US$ dollars) \n18,854,776.00 \n19,610,040.40 \n \n19,610,040.40 \n \n \n18,250,000.00 \nHighest Rate \n4,600.00 \n4,650.00 \n4,800.00 \n5,200.0000 \nLowest Bid \nRate \n4,559.00 \n4,570.00 \n4,650.00 \n4,927.0000 \nLowest Bid Rate Allotted \n4,559.00 \n4,570.00 \n4,650.00 \n4,927.0000 \nWeighted Average Rate \n4,577.50 \n4,604.62 \n4,712.17 \n5,015.4279 \nNumber of Bids Received \n13 \n18 \n19 \n20 \nNumber of Bids Rejected \n0 \n0 \n0 \n0 \n \n \nAPPENDIX 2: SUMMARY OF FOREIGN CURRENCY AUCTION ALLOTMENTS BY PURPOSE \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n16-Aug-23 \n \n29-Aug-23 \n \n12-Sep-23 \n \n19-Sep-23 \nRaw Materials \n113,729.24 \n144,400.98 \n266,877.75 \n45,391.75 \nMachinery and Equipment \n345,440.82 \n123,873.61 \n303,210.76 \n275,395.54 \nConsumables \n(Incl. Spares, Tyres, \nPackaging) \n- \n47,224.00 \n136,003.85 \n121,390.64 \nPharmaceuticals and \nChemicals \n- \n- \n- \n47,661.75 \nServices (Loans, Dividends \nand Disinvestments) \n58,000.00 \n220,379.23 \n303,084.29 \n163,240.14 \nRetail and Distribution \n30,000.00 \n10,000.00 \n152,687.33 \n54,399.20 \nFuel, Electricity and Gas \n- \n- \n- \n- \nPaper and Packaging \n22,269.22 \n- \n- \n6471.32 \nTOTAL \n569,439.28 \n545,877.82 \n1,161,863.98 \n713,950.34", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_22_SEPTEMBER_2023_Volume_25_Number_38.pdf"}
{"doc_id": "d91399b211d0c95efa7d3f945667145e", "text": "Vol. 27 No. 37 \n \nWeek Ending \n12th September 2025 \n \nWeekly Economic \nHighlights \nVol. 27 No. 37 \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n \n1 \n1. OVERVIEW \nThis report provides a snapshot of key developments in the monetary and financial sectors of the economy for \nthe week ending 12th September 2025. It includes updates on domestic money and capital markets, national \npayment systems, exchange rates and international commodity prices. \nBoth foreign and local currency deposit rates remained unchanged during the week under review. Local \ncurrency lending rates increased for all clients save for maximum lending rates for corporate clients which \ndeclined. Minimum foreign currency lending rates for both individual and corporate clients increased. \nMaximum lending rates for individual clients, however, remained unchanged, while those for corporate clients \ndecreased during the same week. \nDuring the week under analysis, both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock \nExchange (VFEX) exhibited bearish sentiments. Accordingly, the ZSE and VFEX All share Indices lost 0.04% \nand 5.42% to close at 208.19 points and 120.77points, respectively. \nThe total value of transactions processed through the National Payment Systems platform decreased by 0.15% \nfrom ZiG37.73 billion reported in the previous week to ZiG37.67 billion, during the week under review. The \ndecline was due to the decline in values of transactions processed through POS, ATM, Mobile Banking and \nZIPIT. The volume of transactions processed decreased by 3.91% from 16.43 million in the previous week to \n15.79 million during the week ending 12 September 2025. \nThe average ZiG/US$ exchange rate appreciated by 0.03% on the interbank market, from ZiG26.73/US$1 \nrecorded in the previous week to ZiG26.72/US$1 during the week ending 12 September 2025. \nDuring the week under review, international average prices for gold, palladium, and lithium increased, while \nplatinum, crude oil and nickel prices declined. The increase in gold prices was primarily influenced by \nindications of a weakening U.S. labor market, which heightened expectations that the Federal Reserve might \nlower interest rates. Palladium prices strengthened amid growing concerns about restricted supply from \nRussia. Lithium prices increased following the suspension of the major lithium producer in China, which \nheightened fears of supply shortages. \nIn contrast, platinum prices fell due to weakened demand for the metal, amid the ongoing transition to electric \nvehicles (EVs) and hybrids. Nickel prices also dropped, mainly attributable to a surge in production from \nIndonesia, which resulted in higher inventories and downward pressure on prices. \n \n \n \n \n \n \n \n \n \n2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n22 August 2025 \n29 August \n05 Sept 2025 \n12 Sept 2025 \nSavings \n \n \n \n \nMinimum \n3.91 \n3.75 \n3.75 \n3.75 \nMaximum \n4.03 \n3.86 \n4.08 \n4.08 \n1-month deposit \n \n \n \n \nMinimum \n7.46 \n6.63 \n6.63 \n6.63 \nMaximum \n11.52 \n10.38 \n10.49 \n10.49 \n3-months deposit \n \n \n \n \nMinimum \n7.73 \n6.90 \n6.90 \n6.90 \nMaximum \n11.65 \n10.48 \n10.68 \n10.68 \n6-months deposit \n \n \n \n \nMinimum \n7.34 \n6.51 \n6.51 \n6.51 \nMaximum \n11.26 \n10.01 \n10.28 \n10.28 \n12-months deposit \n \n \n \n \nMinimum \n7.35 \n6.52 \n6.52 \n6.52 \nMaximum \n12.66 \n10.71 \n10.99 \n10.99 \nOver 1 year \n \n \n \n \nMinimum \n7.36 \n6.53 \n6.53 \n6.53 \nMaximum \n12.67 \n10.72 \n11.00 \n11.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n22 August 2025 \n29 August \n05 Sept 2025 \n12 Sept 2025 \nSavings \n \n \n \n \nMinimum \n1.75 \n1.61 \n1.61 \n1.61 \nMaximum \n1.84 \n1.69 \n1.81 \n1.81 \n1-month deposit \n \n \n \n \nMinimum \n4.08 \n3.92 \n3.92 \n3.92 \nMaximum \n6.93 \n6.51 \n6.59 \n6.59 \n3-month deposit \n \n \n \n \nMinimum \n4.52 \n4.46 \n4.46 \n4.46 \nMaximum \n7.78 \n7.35 \n7.45 \n7.45 \n6-month deposit \n \n \n \n \nMinimum \n4.83 \n4.26 \n4.26 \n4.26 \nMaximum \n7.75 \n7.35 \n7.57 \n7.57 \n12-Month deposit \n \n \n \n \nMinimum \n4.83 \n4.56 \n4.56 \n4.56 \nMaximum \n7.75 \n7.14 \n7.47 \n7.47 \nOver 1 year \n \n \n \n \nMinimum \n4.89 \n4.67 \n4.67 \n4.67 \nMaximum \n7.92 \n7.36 \n7.64 \n7.64 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n \n3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n22 August 2025 \n29 August \n05 Sept 2025 \n12 Sept 2025 \nIndividuals \n \n \n \n \nMinimum \n43.22 \n43.33 \n43.38 \n43.41 \nMaximum \n48.90 \n48.96 \n48.98 \n49.03 \nCorporates \n \n \n \n \nMinimum \n40.36 \n40.39 \n40.38 \n40.42 \nMaximum \n46.20 \n46.34 \n46.37 \n46.34 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n22 August 2025 \n29 August \n05 Sept 2025 \n12 Sept 2025 \nIndividuals \n \n \n \n \nMinimum \n13.52 \n13.54 \n13.59 \n13.61 \nMaximum \n17.55 \n17.58 \n17.56 \n17.56 \nCorporates \n \n \n \n \nMinimum \n10.36 \n10.47 \n10.46 \n10.53 \nMaximum \n15.83 \n15.88 \n16.17 \n15.89 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending \nrates \n22 August 2025 \n29 August \n05 Sept 2025 \n12 Sept 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n3. EQUITY MARKETS \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG billion) \nMarket \nTurnover \n(ZiG million) \nVolume of \nShares \n(million) \n22-Aug-25 \n205.16 \n201.33 \n205.06 \n239.29 \n100.12 \n145.31 \n64.29 \n161.76 \n39.28 \n29-Aug-25 \n208.72 \n205.89 \n209.73 \n238.92 \n100.11 \n145.31 \n65.35 \n371.96 \n78.10 \n05-Sept-25 \n208.27 \n206.49 \n209.17 \n233.50 \n100.11 \n145.31 \n65.29 \n202.23 \n48.45 \n12-Sept-25 \n208.19 \n206.05 \n209.02 \n235.34 \n100.11 \n123.67 \n65.32 \n85.34 \n15.55 \nWeekly \nChange (%) \n(0.04) \n(0.21) \n(0.07) \n0.79 \n0.00 \n(14.89) \n0.05 \n(57.80) \n(67.91) \nSource: Zimbabwe Stock Exchange, 2025 \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n22-Aug-25 \n122.90 \n1.43 \n1.32 \n5.01 \n29-Aug-25 \n126.77 \n1.48 \n1.24 \n3.56 \n05-Sept-25 \n127.69 \n1.49 \n0.16 \n0.48 \n12-Sept-25 \n120.77 \n1.43 \n0.66 \n5.75 \nWeekly Change (%) \n(5.42) \n(4.03) \n312.50 \n1097.92 \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n \n \n \n \n4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n \n40\n45\n50\n55\n60\n65\n70\n75\n80\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\nZiG Billion\nZSE Market Capitalisation \n100\n105\n110\n115\n120\n125\n130\n135\n140\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\nIndex\nVFEX All Share Index \n0\n200\n400\n600\n800\n1000\n1200\n1400\n1600\n1800\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\nUS$ Thousand\nVFEX Market Turnover \n1.2\n1.25\n1.3\n1.35\n1.4\n1.45\n1.5\n1.55\n1.6\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\nUS$ Billion\nVFEX Market Capitalisation \n0\n50,000\n100,000\n150,000\n200,000\n250,000\n300,000\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\nZiG Thousands\nZSE Market Turnover \n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\n05-Sep-25\n12-Sep-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n \n \n5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n22-Aug 2025 \n29-Aug 2025 \n05-Sept 2025 \n12-Sept 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.55 \n1.55 \n1.55 \n1.55 \nPetrol Blend E5/ litre \n1.55 \n1.55 \n1.55 \n1.55 \nLP Gas / kg \n1.51 \n1.51 \n1.45 \n1.45 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n66.56 \n67.21 \n67.35 \n66.56 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n8-Sept-25 \n3,594.55 \n2.93 \n3.24 \n0.1098 \n0.1213 \n9-Sept-25 \n3,632.65 \n2.96 \n3.28 \n0.1110 \n0.1226 \n10-Sept-25 \n3,649.55 \n2.98 \n3.29 \n0.1115 \n0.1232 \n11-Sept-25 \n3,650.75 \n2.98 \n3.29 \n0.1115 \n0.1232 \n12-Sept-25 \n3,629.55 \n2.96 \n3.27 \n0.1109 \n0.1225 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n5 September 2025 \nWEEK ENDING \n12 September 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n26,824,544,036.56 \n28,914,860,402.55 \n7.79 \nOf which ZiG \n8,239,031,988.87 \n9,222,648,011.95 \n11.94 \nOf which US$ transactions \n(ZiG Equivalent) \n18,585,512,047.69 \n19,692,212,390.60 \n5.95 \nPOS \n3,291,087,406.51 \n2,259,030,052.86 \n(31.36) \nATM \n2,815,124,559.54 \n1,815,964,093.79 \n(35.49) \nMOBILE BANKING \n372,371,767.97 \n272,194,568.61 \n(26.90) \nMOBILE MONEY \n4,080,761,728.18 \n4,126,206,796.07 \n1.11 \nZIPIT MOBILE \n343,189,416.08 \n282,474,856.18 \n(17.69) \nTOTAL \n37,727,078,914.84 \n37,670,730,770.07 \n(0.15) \n \nVOLUMES \n \nRTGS \n218,570 \n180,085 \n(17.61) \nOf which ZiG \n84,453 \n64,646 \n(23.45) \nOf which US$ \n134,117 \n115,439 \n(13.93) \nPOS \n2,360,640 \n1,759,279 \n(25.47) \nATM \n340,211 \n207,815 \n(38.92) \nMOBILE BANKING \n426,706 \n285,172 \n(33.17) \nMOBILE MONEY \n12,759,841 \n13,102,314 \n2.68 \nZIPIT MOBILE \n325,917 \n254,424 \n(21.94) \nTOTAL \n16,431,885 \n15,789,089 \n(3.91) \n \n \n6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n8-Sept-25 \n9-Sept-25 \n10-Sept-25 \n11-Sept-25 \n12-Sept-25 \n1.00Oz \n \n \n \n \n \nUS$ \n3,774.28 \n3,814.28 \n3,832.03 \n3,833.29 \n3,811.03 \nZiG \n100,882.83 \n101,880.63 \n102,330.46 \n102,468.37 \n101,862.29 \n0.50Oz \n \n \n \n \n \nUS$ \n1,887.14 \n1,907.14 \n1,916.01 \n1,916.64 \n1,905.51 \nZiG \n50,441.41 \n50,940.31 \n51,165.23 \n51,234.19 \n50,931.14 \n0.25Oz \n \n \n \n \n \nUS$ \n943.57 \n953.57 \n958.01 \n958.32 \n952.76 \nZiG \n25,220.71 \n25,470.16 \n25,582.62 \n25,617.09 \n25,465.57 \n0.10Oz \n \n \n \n \n \nUS$ \n377.43 \n381.43 \n383.20 \n383.33 \n381.10 \nZiG \n10,088.28 \n10,188.06 \n10,233.05 \n10,246.84 \n10,186.23 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(01 Sept – 05 Sept) \n26.7289 \n \n1.5100 \n35.9765 \n1.8612 \n31.1970 \n8-Sept-25 \n26.7290 \n1.5179 \n36.0924 \n1.8552 \n31.3251 \n9-Sept-25 \n26.7103 \n1.5272 \n36.2552 \n1.8660 \n31.4474 \n10-Sept-25 \n26.7040 \n1.5237 \n36.1587 \n1.8656 \n31.2851 \n11-Sept-25 \n26.7312 \n1.5267 \n36.1434 \n2.0140 \n31.2595 \n12-Sept-25 \n26.7283 \n1.5382 \n36.2370 \n2.0217 \n31.3509 \nWeekly Average \n(08 Sept – 12 Sept) \n26.7206 \n1.5267 \n36.1773 \n1.9245 \n31.3336 \nAppr (-)/Depr (+) (%) of the \nZWG \n(0.03) \n1.11 \n0.56 \n3.40 \n0.44 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(01 Sept – 05 Sept) \n3,538.05 \n1,399.90 \n1,139.20 \n15,289.20 \n9,353.20 \n8-Sep \n3,656.45 \n1,401.00 \n1,159.00 \n15,229.00 \n9,452.00 \n9-Sep \n3,641.30 \n1,387.50 \n1,155.00 \n15,105.00 \n9,476.00 \n10-Sep \n3,627.15 \n1,386.00 \n1,185.00 \n15,146.00 \n9,500.00 \n11-Sep \n3,653.60 \n1,401.00 \n1,207.00 \n15,150.00 \n9,500.00 \n12-Sep \n3,643.70 \n1,404.00 \n1,209.00 \n15,391.00 \n9,500.00 \nWeekly Average \n(08 Sept – 12 Sept) \n3,644.44 \n1,395.90 \n1,183.00 \n15,204.20 \n9,485,60 \nWeekly change (%) \n3.01 \n(0.29) \n3.84 \n(0.56) \n1.42 \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n7 \nFigure 3: Weekly International Commodity Price Developments (20th June 2025– 12th September 2025) \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \nRESERVE BANK OF ZIMBABWE \nSEPTEMBER 2025 \n400.00\n600.00\n800.00\n1000.00\n1200.00\n1400.00\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\nUS$/oz\nPalladium\n980\n1,080\n1,180\n1,280\n1,380\n1,480\n1,580\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\nUS$/tonne\nPlatinum\n7,500\n7,800\n8,100\n8,400\n8,700\n9,000\n9,300\n9,600\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\nUS$/tonne\nLithium \n14,400\n14,600\n14,800\n15,000\n15,200\n15,400\n15,600\n15,800\n16,000\n16,200\n16,400\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\nUS$/tonne\nNickel\n50\n55\n60\n65\n70\n75\n80\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\n5-Sep\n12-Sep\nUS$/barrel\nCrude oil \n2,900\n3,150\n3,400\n3,650\n3,900\n20-Jun\n27-Jun\n04-Jul\n11-Jul\n18-Jul\n25-Jul\n01-Aug\n08-Aug\n15-Aug\n22-Aug\n29-Aug\n05-Sep\n12-Sep\nUS$/oz\nGold", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_12_September_2025_Volume_27_Number_37.pdf"}
{"doc_id": "34101dde1e7e1d5dda3868ff72736e5d", "text": "i \n \n \n \n \n \n \nOCTOBER 2016 \n \n \n \n1 \n \n \nTable of Contents \n \nSELECTED ECONOMIC INDICATORS ..................................................................................... 2 \nSTOCK MARKET DEVELOPMENTS ..................................................................................... 3 \nMONETARY DEVELOPMENTS .............................................................................................. 4 \nINFLATION OUTTURN ............................................................................................................. 5 \nAnnual Inflation ........................................................................................................................ 5 \nMonthly Inflation ...................................................................................................................... 6 \nNATIONAL PAYMENTS SYSTEM .......................................................................................... 7 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ............................................... 7 \nCash transactions ...................................................................................................................... 7 \nCard Based Transactions ......................................................................................................... 7 \nCheque Transactions ............................................................................................................. 7 \n \n \n \n \n \n \n \n2 \n \n \n \n \n2016 \n \n September \n2016 \n \nOctober \nMonth-on- \nMonth \nChange \nZ.S.E. Mining Index1 \n26.6 \n33.8 \n22.1% \nZ.S.E. Industrial Index1 \n98.96 \n120.82 \n26.9% \nNational Payment System Transactions \n(US$ millions) \n6 798.49 \n6 467.52 \n-4.9% \nMoney Supply (US$ millions)2 \n5 320.9 \n5 356.0 \n0.66% \nMoney Supply (M3) Annual Growth2 (%) \n16.02 \n16.41 \n \nYearly Inflation3 (%) \n-1.3% \n-0.95% \n \nMonthly Inflation3 (%) \n-0.13 \n-0.26% \n \nNominal Lending Rate2 (% per annum) \n4.0-18.0 \n4.0-18.0 \n \nSources: \n1 Zimbabwe Stock Exchange (ZSE) \n2 Reserve Bank of Zimbabwe (RBZ) \n3 Zimbabwe National Statistics Agency (ZIMSTAT) \nSELECTED ECONOMIC INDICATORS \n \n \n \n3 \n \nSTOCK MARKET DEVELOPMENTS \nDuring the month of October 2016 the stock \nmarkets in the USA closed in the negative while \nin Europe were in the positive and Asian markets \nwere mixed. The DAX, FTSE100, CAC40 and \nShangai indices recorded gains, while the DJIA, \nS&P 500, NASDAQ, HangSeng, and Nikkei225 \nregistered losses. \n \nIn Africa, leading stock markets performance \nwere mixed during the month under review. \nLoses were registered in Nigeria, -3.9%; and \nSouth Africa, -2.2%. Stock markets in Tunisia, \nEgypt, Kenya and Morocco, however, registered \ngains. \n \nThe Zimbabwe Stock Exchange (ZSE) recovered \nfrom the previous month’s loss owing to renewed \ninvestor interest, during the month of October \n2016. Consequently, both the industrial and \nmining indices increased during the period under \nreview. The industrial index increased from \n98.96 points in September 2016 to 120.82 points \nin October 2016. Over the same period, the \nmining index increased by 26.87% to close at \n33.76 points from 26.61 points in September \n2016, sustained by gains in Bindura Nickel and \nRio Zim. \n \n \n \n \nTrading volumes rose from 68.3 million shares in \nSeptember 2016, to 177.4 million shares in \nOctober 2016. This was attributable to a number \nof block trades witnessed during the period of \nanalysis. Notable block trades for the month \nof \nOctober \n2016 \nincluded \nMashonaland \nHoldings, \n32 \n824 \n900 \nshares; \n Pearl properties, 24 822 440 shares; and \nAxia, 3 135 173 shares. \n \nIn tandem, market turnover also increased by \n73.56% from US$13.05 million in September \n2016, to US$22.6 million in October 2016. \n0\n20\n40\n60\n80\n100\n120\n140\n160\n30-Oct-15\n30-Nov-15\n31-Dec-15\n31-Jan-16\n29-Feb-16\n31-Mar-16\n30-Apr-16\n31-May-16\n30-Jun-16\n31-Jul-16\n31-Aug-16\n30-Sep-16\n31-Oct-16\nFigure 1: ZSE Indices\nIndustrial\nMining\nSource: Zimbabwe Stock Exchange, 2016 \n \n \n \n4 \n \n \nSource: Zimbabwe Stock Exchange, 2016 \nOn the back of positive trading on the ZSE during \nthe month under review, market capitalization \nincreased by 22.13% to close the month of \nOctober 2016 at US$3.33 billion. \n \n \nMONETARY DEVELOPMENTS \nAnnual money supply growth increased to \n16.41% in October 2016, from 16.02% in \nSeptember 2016. This was reflective of increases \nrecorded in the following classes of deposits: \ndemand, 41.17%; savings, 1.33%; and under 30-\nday, 0.51%. Partially offsetting these increases, \nwas a decline of 16.16% in over 30-day deposits. \n \nSource: Reserve Bank of Zimbabwe, 2016 \nOn a monthly basis, money supply stood at \nUS$5 356.0 million, up from US$5 320.9 million \nin September 2016. Broad money continues to be \ndominated by deposits that are short term in \nnature, which do not support long-term lending \ncrucial for economic growth. \n \nSource: Reserve Bank of Zimbabwe, 2016 \n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\n0.00\n50.00\n100.00\n150.00\n200.00\n250.00\n300.00\nOct-15\nNov-15\nDec-15\nJan-16\nFeb-16\nMar-16\nApr-16\nMay-16\nJun-16\nJul-16\nAug-16\nSep-16\nOct-16\nNov-16\nVALUES TRADED (US$ MILLIONS)\nVOLUMES TRADED (MILLIONS)\nFigure 2: ZSE: Monthly Volumes \nFigure 2: ZSE: Monthly Volumes and Values Traded\nand Values Traded\nVolume\nTurnover\n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n -\n 1.0\n 2.0\n 3.0\n 4.0\n 5.0\n 6.0\nJan-14\nApr-14\nJul-14\nOct-14\nJan-15\nApr-15\nJul-15\nOct-15\nJan-16\nApr-16\nJul-16\nOct-16\n%\nUS$ BILLIONS\nFigure 4: Money Supply\nFigure 4: Money Supply\nM3\nM3 Annual Growth rate\nUnder 30 \nDays\n13.35%\nOver 30 \nDays\n16.82%\nDemand\n58.47%\nsavings\n11.35%Figure 5: Bankin\nFigure 5: Banking Sector Deposits September 2\nDeposits September 2016\n \n \n \n5 \n \nThe composition of deposits as at October 2016 \nwas as follows: demand deposits, 58.47%; over \n30-days deposits, 16.82%; under 30-days \ndeposits, 13.35%; and savings deposits, 11.35%. \n \nBanking sector credit to domestic economic \nagents, recorded an annual increase of 15.04%, \nfrom US$5 196.66 million in October 2015 to \nUS$5 978.45 million in October 2016. This \nmainly reflected significant increases in credit to \ngovernment. On a month-on-month basis, \nbanking sector credit rose by 2.56%, from US$5 \n829.10 million recorded in September 2016. \n \nAnnual credit to the private sector declined by \n8.06% from US$3 858.57 million in October \n2015, to US$3 547.52 million in October 2016. \nOn a monthly basis, however, credit to the private \nsector \nincreased \nby \n0.77% \nfrom \nUS$3 520.28 million registered in September \n2016. Credit advanced to the private sector \ncomprised of; loans and advances, 86.21%; \nmortgages, 9.91%; other investments, 3.77%; \nand bills discounted, 0.11%. \n \nSource: Reserve Bank of Zimbabwe, 2016 \nThe sectoral distribution of private sector credit \nwas as follows: households, 23.44%; agriculture, \n18.00%; \nservices, \n16.42%; \nmanufacturing, \n15.07%; distribution, 11.88%; mining, 5.22%; \nfinancial organisations and investments, 3.05%; \ntransport \nand \ncommunications, \n2.79%; \nconstruction, 1.59%; and other, 0.41%. \n \nThe private sector credit was utilised as follows: \nother recurrent and working capital expenditures, \n34.01%; inventory build-up, 31.88%; consumer \ndurables, 16.30%; fixed capital investment, \n16.09%; and pre and post shipment financing, \n1.71%. \nINFLATION OUTTURN \n \nAnnual Inflation \n \nThe annual headline inflation stood at -1.0% in \nOctober 2016, a 0.3 percentage points increase \nfrom the September 2016 rate of -1.3%. The \nincrease was driven by both food and non-food \ninflation. \n \n \nSource: ZIMSTAT, 2016 \nLoans & \nAdvances\n86.21%\nMortgages\n9.91%\nBills Discounted\n0.11%\nOther investments\n3.77%Figure 6: Composition of Private \nFigure 6: Composition of Private Sector Credit\nSector Credit\n-5\n-4\n-3\n-2\n-1\n0\n1\n2\nFigure 7: Annual Inflation \n(%)\nHeadline Inflation\nFood\nNon Food\n \n \n \n6 \n \nThe year-on-year food inflation increased from \n-2.94% in September 2016, to -2.0% in October \n2016. This was in large part under pinned by \nincreases in prices of sugar, confectionaries as \nwell as fish and sea food. Declines in other food \nsub-categories such as meat and vegetables \npartially offset the increase in food inflation. \n \nAnnual non-food inflation, rose to -0.45% in \nOctober 2016, from -0.58% in September 2016. \nThe rise was attributable to increases in the \neducation category. Partially offsetting the \nincrease in annual non-food inflation were \ndeclines in housing, water, electricity, gas and \nother fuels, furniture, household equipment and \nmaintenance, and transport. \n \nMonthly Inflation \n \n \nMonth-on-month inflation was in the positive for \nthe first time since July 2016, accelerating from \n -0.26% in September 2016, to 0.09% in October \n2016. The increase in monthly inflation was \nlargely on account of increases in both food and \nnon-food inflation. \n \nSource: ZIMSTAT, 2016 \nNon-food inflation rose from -0.34% in \nSeptember 2016, to -0.05% in October 2016. The \nincrease was driven by the rise in prices of \nfurniture \nand \nhousehold \nequipment \nand \nmiscellaneous goods and services. The increases \nin these subcategories were, however, partially \noffset by declines in clothing and footwear and \nhousing and energy partially offset the increases. \nMonthly food inflation increased to 0.4% in the \nmonth under review, from -0.06% recorded in \nSeptember 2016. Contributing to the rise in food \ninflation were increases in meat, vegetables and \nmilk cheese and eggs. \n \n \n \n \n \n \n \n-1.0\n-0.8\n-0.6\n-0.4\n-0.2\n0.0\n0.2\n0.4\n0.6Figure 8: M\nFigure 8: M-\n-O\nO-\n-M Inflation\nM Inflation\n \n \n \n7 \n \nNATIONAL PAYMENTS SYSTEM \nThe value of transactions processed through the \nNational \nPayment \nSystem \nstood \nat \nUS$6 467.52 million in October 2016, a 5% \ndecline from US$6 798.49 million in September \n2016. \n \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nTransactions processed through the RTGS \nsystem declined by 5.8% to close the month \nunder analysis at US$4.12 billion. The volume of \ntransactions, however, increased by 3% from \n288 523 in September 2016 to 295 999 in \nOctober 2016. \n \nSource: Reserve Bank of Zimbabwe, 2016 \n \n \n \n \n \nCash transactions \n \nCash \ntransactions \ndecreased \nfrom \nUS$515.36 million in September 2016, to \nUS$492.30 million in October 2016. \n \n \nMobile and Internet Based Transactions \n \nThe total value of mobile and internet based \ntransactions declined by 1.24%, to close at \nUS$749.83 million in October 2016. This \ncompares to US$740.50 million worth of \ntransactions recorded in September 2016. \n \nCard Based Transactions \n \nCard \nbased \ntransactions \nstood \nat \nUS$435.28 million in October 2016, up from \nUS$404.91 million registered in September \n2016. \n \nCheque Transactions \nIn value terms, total cheque transactions fell from \nUS$10.48 million in September 2016, to \nUS$7.99 million in October 2016. \n \nRESERVE BANK OF ZIMBABWE \nDECEMBER 2016\n -\n 0.5\n 1.0\n 1.5\n 2.0\n 2.5\n 3.0\n 3.5\n 4.0\n 4.5\n 5.0\n -\n 50\n 100\n 150\n 200\n 250\n 300\n 350\nVALUE IN US$ BILLIONS\nVOLUME IN THOUSANDS\nFigure 9: ZETSS Volumes and \nFigure 9: ZETSS Volumes and Values\nValues\nVolume\nValue\n \n \n \n8 \n \n \nStatistical Tables \n \n1. Monetary Statistics \n \n1.1 Monetary Aggregates \n \n \n \n \n \n 9 \n \n1.2 Broad Money Survey \n \n \n \n \n \n10 \n \n1.3 Analysis of Monthly Changes in Money Supply \n \n11 \n \n1.4 Analysis of Yearly Changes in Money Supply \n \n \n12 \n \n 2. Sectoral Analysis of Bank Loans and Advances and Deposits \n \n2.1 Sectoral Analysis of Commercial Banks Loans and Advances 13 \n \n2.2 Sectoral Analysis of Commercial Banks Deposits \n \n14 \n \n \n3. External Statistics \n \n3.1 Total External Debt Outstanding by Debtor \n \n \n15 \n \n4. Interest Rates \n \n4.1 Lending Rates \n \n \n \n \n \n \n16 \n \n4.2 Banks Deposit Rates \n \n \n \n \n \n17 \n \n5. Inflation \n \n5.1 Monthly Inflation \n \n \n \n \n \n18 \n \n5.2 Yearly Inflation \n \n \n \n \n \n \n19 \n \n6. Exchange Rates \n \n \n \n \n \n \n \n20 \n \n7. Commercial Banks \n \n7.1 Assets \n \n \n \n \n \n \n \n21 \n \n7.2 Liabilities \n \n \n \n \n \n \n22 \n \n \n \n \n9 \n \n \n8. Merchant Banks \n \n8.1 Assets \n \n \n \n \n \n \n \n23 \n \n8.2 Liabilities \n \n \n \n \n \n \n24 \n \n 9. Building Societies \n \n9.1 Assets \n \n \n \n \n \n \n \n25 \n \n9.2 Liabilities \n \n \n \n \n \n \n26 \n \n10. Zimbabwe Stock Exchange Statistics \n \n \n \n \n27 \n \n11. Savings with Financial Institutions \n \n \n \n \n28 \n \n12. Analysis of Liquid Assets of Monetary Banks \n \n \n \n29 \n \n13. ZETSS, Cheques and Cards Activity \n \n \n \n \n \n \n13.1 Values of Transactions \n \n \n \n \n30 \n \n13.2 Volumes of Transactions \n \n \n \n \n31 \n \n \n \n \n \n \n \n \n \n \n10 \n \n \n \n \n \n \n \nOctober\nNovember\nDecember\nJanuary\nFebruary\nMarch\nApril\nMay\nJune\nJuly\nAugust\nSeptember\nOctober\nBond Coins\n4,445.3\n5,789.3\n7,127.0\n7,355.5\n7,457.3\n7,612.1\n7,758.5\n8,005.8\n8,106.8\n8,243.2\n8,854.6\n9,423.3\n9,681.9\nRBZ Demand Deposits\n3,485.7\n2,470.9\n726.0\n1,832.8\n2,086.4\n1,423.3\n5,061.6\n3,602.5\n3,701.2\n9,125.9\n4,363.6\n4,176.7\n802.3\nComm. Banks Dem. Deposits\n2,149,026.8\n2,358,226.5\n2,362,538.7\n2,430,098.0\n2,409,398.2\n2,510,951.1\n2,575,573.8\n2,644,003.9\n2,743,164.8\n2,690,977.0\n2,849,745.9\n2,926,587.6\n3,066,529.1\nMerchant Banks Dem. Deposits\n61,925.6\n58,750.3\n58,524.4\n58,511.7\n58,304.5\n58,315.0\n58,346.2\n58,364.1\n58,364.1\n58,350.7\n58,341.8\n58,880.3\n58,880.3\nM1\n2,218,883.4\n2,425,237.0\n2,428,916.0\n2,497,798.0\n2,477,246.4\n2,578,301.4\n2,646,740.1\n2,713,976.2\n2,813,336.8\n2,766,696.7\n2,921,305.9\n2,999,067.9\n3,135,893.6\nComm. Banks Savings Deposits\n231,465.3\n259,856.4\n266,166.6\n280,598.5\n291,567.7\n290,006.1\n299,136.9\n282,597.7\n270,213.2\n346,442.2\n289,814.6\n337,034.7\n268,949.6\nBuilding Soc. Savings Deposits\n294,208.3\n308,439.9\n296,041.8\n297,854.8\n305,980.4\n311,092.0\n317,629.3\n332,211.2\n313,154.7\n313,391.2\n278,711.3\n270,825.2\n267,268.9\nP O S B Savings Deposits\n73,380.5\n76,307.7\n72,505.8\n73,735.7\n73,847.9\n74,405.9\n80,067.6\n79,203.4\n79,502.7\n75,483.3\n74,820.4\n74,238.6\n70,818.1\nComm. Banks U-30 Day Deposits\n565,136.6\n565,317.5\n650,234.3\n597,527.6\n588,796.4\n506,719.1\n574,185.2\n674,068.8\n546,356.7\n552,519.8\n629,146.7\n522,187.7\n527,870.4\nMerchant Banks U-30 Day Deposits\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\nBuilding Soc. U- 30 Day Deposits\n144,911.8\n127,578.2\n165,352.5\n131,683.2\n123,683.2\n108,106.2\n171,635.9\n118,100.1\n134,140.9\n90,761.4\n45,096.0\n114,909.8\n185,803.2\nM2\n3,527,985.9\n3,762,736.7\n3,879,217.1\n3,879,197.9\n3,861,122.0\n3,868,630.7\n4,089,395.1\n4,200,157.3\n4,156,705.0\n4,145,294.6\n4,238,894.9\n4,318,263.9\n4,456,603.8\nComm. Banks O-30 Day Deposits\n628,213.7\n503,244.7\n420,265.1\n424,676.9\n449,879.1\n573,809.8\n519,330.5\n438,306.5\n554,032.6\n522,523.5\n458,749.8\n541,267.4\n485,830.4\nMerchant Banks O-30 Day Deposits\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\nBuilding Soc. O- 30 Day Deposits\n409,350.0\n444,267.1\n432,822.3\n413,975.8\n421,729.2\n438,461.8\n361,565.5\n374,720.6\n390,530.0\n429,065.6\n488,344.9\n419,987.3\n369,909.3\nBuilding Soc. Other Share Deposits\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\n11,266.6\nP O S B Time Deposits\n24,010.2\n23,668.6\n21,851.3\n25,326.6\n24,881.2\n24,640.9\n23,321.3\n26,430.9\n28,174.9\n29,891.3\n30,579.6\n30,126.8\n32,425.9\nM3\n4,600,826.4\n4,745,183.7\n4,765,422.3\n4,754,443.8\n4,768,878.1\n4,916,809.8\n5,004,879.1\n5,050,881.9\n5,140,709.1\n5,138,041.5\n5,227,835.9\n5,320,912.0\n5,356,035.9\nSource:Reserve Bank of Zimbabwe, 2016\n2015\n2016\nTABLE 1.1 : MONETARY AGGREGATES\n US$ thousands\n \n \n \n11 \n \n \nOCT\nNOV\nDEC\nJAN\nFEB\nMAR\nAPR\nMAY\nJUNE\nJULY\nAUGUST\nSEPTEMBER\nOCTOBER\nNET FOREIGN ASSETS \n-822,417.2\n-771,548.0\n-667,684.9\n-688,591.4\n-780,139.7\n-728,823.7\n-803,152.0\n-897,595.5\n-682,718.0\n-569,021.5\n-572,883.4\n-572,132.0\n-712,362.1\n Assets\n784,372.6\n667,350.7\n792,677.3\n758,634.6\n679,001.9\n687,149.8\n637,447.5\n623,538.1\n667,173.2\n663,489.3\n661,991.9\n636,418.9\n691,301.0\n Reserve Bank (RBZ)\n335,321.7\n300,180.5\n433,452.9\n424,269.1\n390,810.3\n334,552.7\n354,608.4\n407,381.8\n389,004.0\n380,890.0\n352,410.1\n341,528.2\n413,365.2\n Deposit Money Banks (DMBs) \n387,305.0\n310,522.6\n300,320.1\n302,773.5\n259,017.9\n318,832.0\n269,044.4\n200,060.3\n256,915.8\n267,266.8\n297,214.3\n286,317.1\n263,221.2\n Other Banking Institutions (OBIs) \n61,745.9\n56,647.6\n58,904.3\n31,592.0\n29,173.7\n33,765.2\n13,794.7\n16,096.0\n21,253.4\n15,332.5\n12,367.6\n8,573.7\n14,714.6\n Liabilities \\2\n-1,606,789.8\n-1,438,898.6\n-1,460,362.2\n-1,447,226.0\n-1,459,141.6\n-1,415,973.5\n-1,440,599.5\n-1,521,133.6\n-1,349,891.2\n-1,232,510.8\n-1,234,875.3\n-1,208,550.9\n-1,403,663.1\n RBZ\n1,069,972.4\n1,048,664.8\n1,096,800.8\n1,090,485.7\n1,117,823.6\n1,075,644.5\n1,117,787.5\n1,184,783.0\n1,042,014.2\n935,954.6\n944,035.4\n931,544.6\n1,106,477.2\n DMBs\n494,458.0\n347,787.2\n320,578.9\n313,434.2\n299,029.1\n303,288.3\n285,945.2\n300,200.0\n272,477.2\n260,900.2\n257,249.7\n246,495.2\n267,813.3\n OBIs\n42,359.5\n42,446.6\n42,982.5\n43,306.1\n42,288.9\n37,040.8\n36,866.8\n36,150.7\n35,399.8\n35,656.0\n33,590.3\n30,511.2\n29,372.7\nNET DOMESTIC ASSETS \n5,423,243.6\n5,516,731.6\n5,433,107.3\n5,443,035.2\n5,549,017.8\n5,645,633.4\n5,808,031.0\n5,948,477.4\n5,823,427.1\n5,707,063.0\n5,800,719.3\n5,893,044.0\n6,068,398.0\nDOMESTIC CREDIT\n5,196,662.7\n5,345,272.0\n5,535,396.4\n5,476,442.4\n5,489,962.3\n5,542,678.3\n5,623,621.7\n5,627,841.4\n5,719,589.2\n5,759,394.1\n5,753,421.7\n5,829,096.5\n5,978,450.5\n Claims on Government (net) \n1,253,218.7\n1,359,827.4\n1,564,354.7\n1,530,792.2\n1,671,934.4\n1,691,128.7\n1,804,057.3\n1,834,775.4\n1,948,003.0\n2,028,573.1\n2,026,952.7\n2,092,955.9\n2,200,966.6\n RBZ\n271,997.2\n314,096.4\n331,552.1\n355,230.5\n418,006.5\n446,003.9\n456,287.0\n468,433.1\n508,837.0\n552,972.5\n583,837.7\n602,271.5\n654,694.8\n DMBs\n890,154.0\n954,556.6\n1,119,720.1\n1,068,095.4\n1,153,295.1\n1,166,120.4\n1,226,195.8\n1,241,961.8\n1,305,509.6\n1,342,573.5\n1,320,529.8\n1,359,348.4\n1,405,130.2\n OBIs\n91,067.5\n91,174.4\n113,082.5\n107,466.4\n100,632.7\n79,004.4\n121,574.4\n124,380.4\n133,656.4\n133,027.1\n122,585.2\n131,336.0\n141,141.6\n Claims on Public Enterprises \n84,877.1\n83,806.0\n140,910.1\n145,507.6\n120,445.0\n179,370.7\n185,698.9\n197,207.6\n199,989.6\n242,550.6\n238,843.8\n215,863.7\n229,963.6\n RBZ\n30,362.6\n30,375.1\n79,569.5\n76,732.8\n54,168.2\n70,356.5\n78,226.4\n91,056.2\n99,304.3\n138,657.6\n138,175.0\n121,890.6\n126,318.5\n DMBs\n53,348.0\n52,504.5\n60,202.8\n67,848.4\n65,328.0\n108,062.4\n106,568.6\n105,088.3\n99,643.7\n102,872.2\n99,545.6\n92,700.0\n102,534.1\n Agri-PEs\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n Other\n53,348.0\n52,504.5\n60,202.8\n67,848.4\n65,328.0\n108,062.4\n106,568.6\n105,088.3\n99,643.7\n102,872.2\n99,545.6\n92,700.0\n102,534.1\n OBIs\n1,166.5\n926.4\n1,137.9\n926.4\n948.9\n951.8\n904.0\n1,063.1\n1,041.6\n1,020.8\n1,123.2\n1,273.1\n1,111.0\n Claims on Private Sector\n3,858,567.0\n3,901,638.6\n3,830,131.6\n3,800,142.6\n3,697,582.8\n3,672,178.9\n3,633,865.5\n3,595,858.4\n3,571,596.6\n3,488,270.3\n3,487,625.2\n3,520,276.9\n3,547,520.2\n RBZ\n75,959.6\n77,442.5\n90,549.5\n93,049.5\n74,614.5\n56,342.7\n58,614.2\n58,864.7\n49,967.1\n50,177.0\n52,542.1\n53,467.1\n59,163.7\n DMBs\n2,950,844.9\n2,981,759.1\n2,874,287.6\n2,860,825.0\n2,773,512.1\n2,774,147.9\n2,736,322.0\n2,691,318.7\n2,681,469.9\n2,571,743.7\n2,572,338.2\n2,605,032.7\n2,621,994.2\n OBIs\n831,762.5\n842,437.0\n865,294.5\n846,268.2\n849,456.3\n841,688.3\n838,929.3\n845,675.0\n840,159.6\n866,349.6\n862,744.9\n861,777.1\n866,362.3\nOTHER ITEMS (NET) \n226,580.9\n171,459.6\n-102,289.2\n-33,407.2\n59,055.5\n102,955.1\n184,409.4\n320,636.1\n103,837.9\n-52,331.0\n47,297.6\n63,947.5\n89,947.6\nBROAD MONEY (M3) \n4,600,826.4\n4,745,183.7\n4,765,422.3\n4,754,443.8\n4,768,878.1\n4,916,809.8\n5,004,879.1\n5,050,881.9\n5,140,709.1\n5,138,041.5\n5,227,835.9\n5,320,912.0\n5,356,035.9\nSource:Reserve Bank of Zimbabwe, 2016\n1. Building societies and P. O. S. B.\n2. Sign reversal.\nTABLE 1.2 : BROAD MONEY SURVEY\nUS$ thousands\n2015\n2016\n \n \n \n12 \n \n \nOCT\nNOV\nDEC\nJAN\nFEB\nMAR\nAPR\nMAY\nJUN\nJUL\nAUG\nSEP\nOCT\nNET FOREIGN ASSETS \n-106,727.8\n50,869.2\n103,863.0\n-20,906.5\n-91,548.3\n51,316.0\n-74,328.3\n-94,443.6\n214,877.6\n113,696.5\n-3,862.0\n751.4\n-140,230.1\n Assets\n-104,646.0\n-117,021.9\n125,326.6\n-34,042.7\n-79,632.7\n8,148.0\n-49,702.3\n-13,909.4\n43,635.1\n-3,683.9\n-1,497.4\n-25,573.0\n54,882.1\n Reserve Bank (RBZ)\n-24,934.2\n-35,141.2\n133,272.4\n-9,183.8\n-33,458.8\n-56,257.6\n20,055.8\n52,773.4\n-18,377.7\n-8,114.0\n-28,479.9\n-10,881.9\n71,837.1\n Deposit Money Banks (DMBs)\n-60,914.8\n-76,782.4\n-10,202.5\n2,453.4\n-43,755.6\n59,814.1\n-49,787.5\n-68,984.1\n56,855.5\n10,351.0\n29,947.5\n-10,897.2\n-23,095.9\n Other Banking Institutions (OBIs) -18,797.0\n-5,098.3\n2,256.7\n-27,312.3\n-2,418.3\n4,591.5\n-19,970.5\n2,301.3\n5,157.4\n-5,920.9\n-2,964.9\n-3,793.9\n6,140.8\n Liabilities \\2\n-2,081.9\n167,891.2\n-21,463.6\n13,136.2\n-11,915.5\n43,168.1\n-24,626.0\n-80,534.1\n171,242.4\n117,380.4\n-2,364.5\n26,324.4\n-195,112.2\n RBZ\n12,891.6\n-21,307.6\n48,136.0\n-6,315.1\n27,337.9\n-42,179.1\n42,143.1\n66,995.5\n-142,768.8\n-106,059.7\n8,080.8\n-12,490.8\n174,932.6\n DMBs\n-9,627.0\n-146,670.7\n-27,208.4\n-7,144.6\n-14,405.1\n4,259.2\n-17,343.1\n14,254.8\n-27,722.8\n-11,577.0\n-3,650.5\n-10,754.5\n21,318.1\n OBIs\n-1,182.7\n87.1\n535.9\n323.5\n-1,017.2\n-5,248.1\n-174.0\n-716.1\n-750.9\n256.2\n-2,065.7\n-3,079.1\n-1,138.5\nNET DOMESTIC ASSETS \\3\n121,530.5\n93,488.0\n-83,624.4\n9,928.0\n105,982.5\n96,615.7\n162,397.6\n140,446.4\n-125,050.3\n-116,364.1\n93,656.3\n92,324.7\n175,354.1\nDOMESTIC CREDIT\n116,820.4\n148,609.3\n190,124.4\n-58,954.0\n13,519.9\n52,716.0\n80,943.4\n4,219.7\n91,747.9\n39,804.8\n-5,972.4\n75,674.8\n149,354.0\n Claims on Government (net) \n70,864.7\n106,608.7\n204,527.3\n-33,562.5\n141,142.2\n19,194.3\n112,928.5\n30,718.1\n113,227.7\n80,570.1\n-1,620.4\n66,003.2\n108,010.7\n RBZ\n17,699.4\n42,099.2\n17,455.7\n23,678.3\n62,776.1\n27,997.4\n10,283.1\n12,146.1\n40,403.9\n44,135.6\n30,865.2\n18,433.8\n52,423.3\n DMBs\n51,171.1\n64,402.6\n165,163.5\n-51,624.8\n85,199.8\n12,825.3\n60,075.4\n15,766.0\n63,547.8\n37,063.9\n-22,043.8\n38,818.7\n45,781.8\n OBIs\n1,994.2\n106.9\n21,908.1\n-5,616.0\n-6,833.7\n-21,628.3\n42,570.0\n2,806.0\n9,276.0\n-629.3\n-10,441.9\n8,750.8\n9,805.7\n Claims on Public Enterprises \n30,353.4\n-1,071.0\n57,104.1\n4,597.4\n-25,062.5\n58,925.6\n6,328.3\n11,508.7\n2,782.0\n42,561.0\n-3,706.9\n-22,980.1\n14,100.0\n RBZ\n27,938.9\n12.5\n49,194.3\n-2,836.7\n-22,564.6\n16,188.3\n7,869.9\n12,829.8\n8,248.1\n39,353.3\n-482.6\n-16,284.4\n4,427.9\n DMBs\n2,560.3\n-843.4\n7,698.3\n7,645.6\n-2,520.4\n42,734.4\n-1,493.8\n-1,480.3\n-5,444.6\n3,228.5\n-3,326.6\n-6,845.6\n9,834.1\n Agri-PEs\n-1,526.5\n-1,527.5\n-1,528.5\n-9,457.5\n-7,505.4\n-6,965.8\n-6,966.8\n-6,967.8\n-6,968.8\n-6,969.8\n-6,970.8\n-6,971.8\n-6,972.8\n Other\n4,086.8\n684.1\n9,226.8\n17,103.1\n4,985.0\n49,700.2\n5,473.1\n5,487.6\n1,524.3\n10,198.3\n3,644.2\n126.2\n16,807.0\n OBIs\n-145.7\n-240.1\n211.5\n-211.5\n22.5\n3.0\n-47.9\n159.1\n-21.5\n-20.8\n102.4\n149.9\n-162.0\n Claims on Private Sector\n15,602.3\n43,071.6\n-71,507.0\n-29,989.0\n-102,559.8\n-25,403.9\n-38,313.4\n-38,007.1\n-24,261.7\n-83,326.3\n-645.1\n32,651.7\n27,243.3\n RBZ\n8,600.4\n1,482.9\n13,107.0\n2,500.0\n-18,435.0\n-18,271.7\n2,271.5\n250.4\n-8,897.6\n210.0\n2,365.0\n925.0\n5,696.6\n DMBs\n-6,085.7\n30,914.2\n-107,471.5\n-13,462.6\n-87,312.9\n635.8\n-37,825.9\n-45,003.2\n-9,848.8\n-109,726.3\n594.5\n32,694.5\n16,961.5\n OBIs\n13,087.7\n10,674.5\n22,857.6\n-19,026.4\n3,188.1\n-7,768.0\n-2,759.0\n6,745.7\n-5,515.3\n26,190.0\n-3,604.7\n-967.8\n4,585.2\nOTHER ITEMS (NET) \n4,710.2\n-55,121.3\n-273,748.8\n68,882.0\n92,462.7\n43,899.6\n81,454.2\n136,226.7\n-216,798.2\n-156,168.9\n99,628.7\n16,649.8\n26,000.1\nBROAD MONEY (M3) \n14,802.7\n144,357.2\n20,238.7\n-10,978.5\n14,434.3\n147,931.7\n88,069.3\n46,002.9\n89,827.2\n-2,667.6\n89,794.3\n93,076.1\n35,123.9\n Broad Money (M3) \n0.32%\n3.14%\n0.43%\n-0.23%\n0.30%\n3.10%\n1.79%\n0.92%\n1.78%\n-0.05%\n1.75%\n1.78%\n0.66%\n Domestic Credit \n2.30%\n2.86%\n3.56%\n-1.07%\n0.25%\n0.96%\n1.46%\n0.08%\n1.63%\n0.70%\n-0.10%\n1.32%\n2.56%\n Claims on Private Sector\n0.41%\n1.12%\n-1.83%\n-0.78%\n-2.70%\n-0.69%\n-1.04%\n-1.05%\n-0.67%\n-2.33%\n-0.02%\n0.94%\n0.77%\nSource:Reserve Bank of Zimbabwe, 2016\n1. Finance houses, building societies and P. O. S. B.\n2. Sign reversal.\n3. Net Domestic Assets consist of domestic credit and other items net.\n2015\n2016\n US$ thousands\nTABLE 1.3 : ANALYSIS OF MONTHLY CHANGES IN MONEY SUPPLY (M3)\n \n \n \n13 \n \n \nOCT\nNOV\nDEC\nJAN\nFEB\nMAR\nAPR\nMAY\nJUNE\nJULY\nAUGUST SEPTEMBER OCTOBER\nNET FOREIGN ASSETS \n-223,571.1\n-3,723.5\n51,716.5\n25,599.2\n-16,833.2\n-162,864.4\n-167,123.9\n-216,529.0\n92,794.6\n154,751.3\n154,902.2\n143,557.4\n110,055.1\n Assets\n-214,670.1\n-160,163.5\n-103,502.5\n-72,324.8\n-58,831.6\n-128,929.8\n-118,045.9\n-187,662.4\n-259,180.5\n-180,199.9\n-205,455.2\n-252,599.6\n-93,071.6\n Reserve Bank (RBZ)\n-172,834.3\n-34,353.8\n70,271.8\n67,607.2\n109,920.3\n52,382.6\n71,707.8\n104,163.2\n-64,982.0\n-14,881.0\n-8,295.5\n-18,727.7\n78,043.6\n Deposit Money Banks (DMBs)\n-45,036.0\n-106,467.2\n-162,792.6\n-103,107.2\n-141,455.7\n-150,731.3\n-155,323.7\n-218,661.6\n-133,692.5\n-94,250.8\n-131,488.5\n-161,902.7\n-124,083.8\n Other Banking Institutions (OBIs) \\1\n3,200.1\n-19,342.5\n-10,981.7\n-36,824.9\n-27,296.3\n-30,581.0\n-34,430.0\n-73,164.0\n-60,506.0\n-71,068.1\n-65,671.1\n-71,969.2\n-47,031.4\n Liabilities \\2\n-8,901.0\n156,440.0\n155,218.9\n97,924.0\n41,998.4\n-33,934.6\n-49,078.0\n-28,866.7\n351,975.1\n334,951.2\n360,357.4\n396,157.0\n203,126.7\n RBZ\n34,361.2\n18,611.0\n75,864.3\n83,389.7\n108,661.8\n217,549.1\n223,580.0\n315,851.6\n-51,292.1\n-104,005.1\n-112,782.5\n-125,536.2\n36,504.8\n DMBs\n-13,602.2\n-162,923.9\n-219,844.2\n-170,029.2\n-139,327.3\n-169,893.9\n-163,052.9\n-274,592.8\n-287,828.7\n-218,055.8\n-233,541.4\n-257,589.8\n-226,644.7\n OBIs\n-11,858.0\n-12,127.1\n-11,239.0\n-11,284.5\n-11,332.9\n-13,720.6\n-11,449.1\n-12,392.1\n-12,854.3\n-12,890.3\n-14,033.5\n-13,031.0\n-12,986.8\nNET DOMESTIC ASSETS \\3\n367,137.9\n333,441.6\n310,287.2\n388,719.3\n447,824.3\n709,354.1\n733,158.4\n779,443.5\n503,904.7\n509,329.9\n599,885.4\n591,330.9\n645,154.4\nDOMESTIC CREDIT\n865,327.7\n992,339.8\n1,156,742.8\n1,244,947.0\n1,240,909.9\n1,171,650.7\n1,093,844.4\n809,966.1\n850,516.8\n777,882.6\n724,314.5\n749,254.1\n781,787.7\n Claims on Government (net) \n782,714.1\n897,401.8\n1,048,718.3\n986,766.1\n1,122,755.2\n1,153,453.4\n1,138,798.4\n884,181.4\n873,765.5\n868,528.4\n834,946.0\n910,601.9\n947,747.9\n RBZ\n286,430.3\n328,127.9\n356,615.8\n367,824.5\n430,914.6\n468,278.0\n357,909.4\n370,585.4\n417,029.5\n309,889.6\n339,320.1\n347,973.7\n382,697.6\n DMBs\n457,069.2\n511,078.6\n631,757.3\n563,398.7\n643,214.9\n665,775.9\n727,359.2\n457,533.3\n401,397.3\n496,708.2\n460,300.9\n520,365.5\n514,976.2\n OBIs\n39,214.6\n58,195.3\n60,345.2\n55,543.0\n48,625.8\n19,399.5\n53,529.8\n56,062.7\n55,338.7\n61,930.5\n35,325.0\n42,262.7\n50,074.1\n Claims on Public Enterprises \n12,502.1\n17,145.1\n74,160.0\n80,539.8\n51,500.7\n107,827.5\n83,224.6\n92,901.3\n146,841.4\n193,908.8\n182,335.8\n161,340.0\n145,086.6\n RBZ\n30,362.6\n30,375.1\n79,569.5\n76,732.8\n54,168.2\n70,356.5\n77,489.1\n89,969.1\n98,115.2\n136,726.1\n136,076.3\n119,466.9\n95,955.9\n DMBs\n-19,027.0\n-14,156.5\n-6,547.4\n2,880.7\n-3,616.3\n38,245.6\n5,825.7\n2,652.3\n48,389.8\n56,361.9\n46,415.4\n41,912.3\n49,186.1\n Agri-PEs\n-1,515.5\n-1,516.5\n-1,517.5\n-1,518.5\n-1,519.5\n-1,520.5\n-1,521.5\n-1,522.5\n-1,523.5\n-1,524.5\n-1,525.5\n-1,526.5\n-1,527.5\n Other\n-17,511.5\n-12,639.9\n-5,029.8\n4,399.2\n-2,096.7\n39,766.1\n7,347.3\n4,174.9\n49,913.3\n57,886.4\n47,940.9\n43,438.8\n50,713.7\n OBIs\n1,166.5\n926.4\n1,137.9\n926.4\n948.9\n-774.5\n-90.2\n279.9\n336.4\n820.8\n-155.9\n-39.1\n-55.4\n Claims on Private Sector\n70,111.5\n77,793.0\n33,864.5\n177,641.0\n66,654.0\n-89,630.2\n-128,178.6\n-167,116.6\n-170,090.0\n-284,554.6\n-292,967.3\n-322,687.8\n-311,046.8\n RBZ\n41,234.4\n42,717.2\n55,824.2\n58,324.2\n39,889.2\n24,933.7\n27,056.2\n27,709.1\n-1,722.7\n-16,545.4\n-40,226.8\n-13,892.2\n-16,795.9\n DMBs\n-65,906.0\n-55,036.1\n-135,814.0\n25,822.4\n-50,903.8\n-186,744.5\n-212,671.7\n-269,599.0\n-219,160.2\n-338,413.9\n-303,139.1\n-351,897.9\n-328,850.7\n OBIs\n94,783.1\n90,111.8\n113,854.3\n93,494.4\n77,668.6\n72,180.6\n57,436.9\n74,773.4\n50,792.9\n70,404.6\n50,398.7\n43,102.3\n34,599.8\nOTHER ITEMS (NET) \n-498,189.8\n-658,898.2\n-846,455.6\n-856,227.7\n-793,085.7\n-462,296.6\n-360,686.0\n-30,522.6\n-346,612.1\n-268,552.7\n-124,429.1\n-157,923.2\n-136,633.3\nBROAD MONEY (M3) \n143,566.8\n329,718.1\n362,003.6\n414,318.5\n430,991.1\n546,489.7\n566,034.5\n562,914.4\n596,699.4\n664,081.2\n754,787.7\n734,888.3\n755,209.5\nGROWTH RATES\n Broad Money (M3) \n3.2%\n7.5%\n8.2%\n9.5%\n9.9%\n12.5%\n12.8%\n12.5%\n13.1%\n14.8%\n16.9%\n16.0%\n16.4%\n Domestic Credit \n20.0%\n22.8%\n26.4%\n29.4%\n29.2%\n26.8%\n24.1%\n16.8%\n17.5%\n15.6%\n14.4%\n14.7%\n15.0%\n Claims on Private Sector\n1.9%\n2.0%\n0.9%\n4.9%\n1.8%\n-2.4%\n-3.4%\n-4.4%\n-4.5%\n-7.5%\n-7.7%\n-8.4%\n-8.1%\nSource:Reserve Bank of Zimbabwe, 2016\n1. Finance houses, building societies and P. O. S. B.\n2. Sign reversal.\n3. Net Domestic Assets consist of domestic credit and other items net.\nUS$ thousands\n2015\nTABLE 1.4 : ANALYSIS OF YEARLY CHANGES IN MONEY SUPPLY (M3)\n2016\n \n \n \n14 \n \n \n \n \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATE\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISATIONS\n \n \n \n \n2015 \nJan\n541,656.5\n46,681.6\n39,906.8\n445,656.6\n21,454.5\n131,350.1\n466,896.6\n207,686.6\n452,817.5\n47,945.7\n557,066.9\n1,401.2\n2,960,820.4\nFeb\n538,722.0\n42,062.8\n47,395.1\n446,647.8\n21,790.0\n117,681.6\n461,237.6\n214,420.4\n463,884.6\n48,357.0\n544,838.5\n1,416.2\n2,948,453.6\nMar\n549,118.0\n42,010.1\n44,087.2\n448,278.7\n76,302.3\n110,180.3\n473,978.1\n203,327.9\n466,104.7\n48,938.0\n550,140.6\n1,339.6\n3,013,805.6\nApr\n556,457.4\n30,687.3\n44,546.9\n451,852.9\n65,696.1\n72,653.7\n457,797.1\n202,418.2\n518,353.6\n47,653.8\n551,662.8\n990.1\n3,000,770.0\nMay\n577,258.6\n31,400.7\n44,839.1\n456,652.1\n64,792.3\n75,682.2\n460,700.3\n192,377.2\n545,363.4\n50,061.9\n561,058.3\n1,034.4\n3,061,220.5\nJun\n576,485.1\n29,649.0\n56,936.5\n463,750.7\n20,117.9\n91,678.4\n407,949.0\n181,512.7\n512,108.4\n40,839.7\n590,917.1\n965.9\n2,972,910.2\nJul\n589,866.7\n27,447.9\n56,456.1\n474,568.7\n21,025.9\n92,335.6\n418,612.0\n186,238.8\n416,928.9\n41,201.6\n579,629.0\n941.4\n2,905,252.7\nAug\n580,775.3\n28,148.8\n58,618.6\n460,451.4\n22,509.2\n105,466.9\n411,831.6\n176,732.7\n440,470.4\n41,154.5\n571,926.0\n886.9\n2,898,972.1\nSep\n598,429.9\n28,307.9\n59,213.0\n443,604.1\n22,711.9\n102,015.0\n421,228.0\n174,144.2\n467,804.5\n43,051.0\n569,250.1\n929.5\n2,930,689.0\nOct\n609,537.2\n33,868.4\n53,813.7\n466,727.6\n21,566.0\n104,959.3\n447,136.6\n141,401.6\n484,254.8\n40,156.6\n573,330.4\n907.7\n2,977,660.0\nNov\n650,547.2\n28,696.7\n49,784.9\n440,864.2\n12,868.9\n104,288.1\n428,393.1\n152,136.9\n444,207.8\n40,760.5\n543,920.4\n696.2\n2,897,164.8\nDec\n590,610.6\n30,958.8\n44,706.5\n366,799.2\n13,354.6\n87,897.5\n450,208.5\n163,452.9\n475,424.5\n40,154.3\n518,998.3\n527.5\n2,783,093.0\n2016\nJan\n577,684.4\n35,033.6\n35,535.9\n379,618.2\n13,329.2\n68,325.8\n476,677.0\n158,150.5\n410,992.6\n40,295.6\n535,379.3\n380.2\n2,731,402.2\nFeb\n539,562.8\n35,885.1\n37,857.4\n374,835.1\n13,285.9\n63,301.8\n473,970.3\n155,889.4\n415,520.6\n40,862.5\n531,789.5\n365.3\n2,683,125.7\nMar\n586,349.7\n39,180.5\n41,037.5\n371,809.6\n13,397.9\n63,061.4\n444,769.1\n156,209.2\n402,900.5\n44,606.7\n588,882.7\n410.7\n2,752,615.5\nApr\n527,545.8\n46,612.5\n40,624.2\n379,572.0\n13,428.1\n69,469.7\n437,795.4\n142,682.1\n421,335.6\n43,921.4\n645,037.3\n9,410.0\n2,777,434.0\nMay\n522,239.8\n40,194.4\n38,496.8\n358,042.5\n13,280.8\n65,381.2\n439,295.5\n145,180.0\n401,304.1\n41,908.5\n651,719.3\n9,579.0\n2,726,621.9\nJun\n510,016.8\n39,316.9\n36,866.1\n361,138.1\n12,764.5\n68,850.3\n433,145.3\n143,595.6\n476,484.5\n42,179.6\n650,071.4\n9,739.2\n2,784,168.3\nJul\n501,744.6\n43,266.6\n12,746.6\n287,960.5\n11,403.0\n64,344.7\n423,354.4\n141,639.6\n489,050.6\n40,059.9\n652,366.8\n9,804.6\n2,677,741.9\nAug\n498,489.6\n43,265.5\n26,005.4\n295,108.0\n11,957.4\n69,959.8\n423,824.7\n139,556.7\n458,763.3\n44,237.3\n636,726.8\n10,497.1\n2,658,391.5\nSep\n487,504.2\n42,900.7\n20,644.2\n338,165.8\n11,960.4\n154,582.0\n409,891.0\n142,259.6\n400,059.8\n40,609.7\n636,000.8\n11,273.3\n2,695,851.5\nOct\n513,303.7\n44,348.8\n23,814.1\n333,709.5\n11,968.6\n70,984.3\n418,465.3\n152,571.6\n456,867.4\n45,511.4\n637,546.1\n11,122.2\n2,720,213.0\nSource:Reserve Bank of Zimbabwe,2016\nTABLE 2.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES/1\nUS$ thousands\n \n \n \n15 \n \n \n \n \n \n \nEND OF\nAGRICULTURE CONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS ORGANISATIONS\n2015\nJan\n155,304.2\n63,950.4\n136,066.9\n349,099.7\n294,145.5\n809,684.0\n314,319.6\n113,452.0\n1,034,514.7\n48,876.5\n606,370.3\n78,746.0\n4,004,529.8\nFeb\n151,740.1\n63,112.6\n109,807.6\n370,581.8\n314,944.7\n784,737.6\n309,307.9\n120,255.1\n1,028,160.1\n43,112.0\n606,650.6\n78,891.2\n3,981,301.2\nMar\n199,484.8\n63,709.2\n116,397.4\n378,460.0\n351,448.0\n762,380.7\n373,911.9\n99,744.6\n912,654.4\n42,478.9\n644,951.3\n72,605.2\n4,018,226.6\nApr\n186,896.3\n65,974.0\n130,284.9\n380,884.8\n330,001.9\n799,952.4\n373,648.3\n109,735.0\n944,772.9\n44,964.9\n653,801.0\n75,850.9\n4,096,767.2\nMay\n185,803.2\n73,167.5\n111,512.1\n523,774.7\n299,659.2\n801,335.5\n419,453.7\n113,355.0\n1,041,392.8\n50,057.9\n619,767.9\n71,388.8\n4,310,668.3\nJun\n187,657.0\n76,777.8\n109,336.0\n498,031.3\n304,087.2\n877,042.8\n338,069.8\n67,556.6\n1,131,497.1\n43,949.0\n651,072.8\n72,166.9\n4,357,244.2\nJul\n180,261.3\n80,536.4\n106,645.3\n452,744.1\n295,611.1\n911,363.8\n360,746.5\n88,518.4\n971,759.9\n53,101.6\n647,215.1\n70,618.8\n4,219,122.4\nAug\n168,075.2\n86,038.9\n108,477.7\n472,875.1\n335,158.3\n784,616.6\n401,830.1\n76,647.0\n1,042,260.4\n55,455.9\n657,177.1\n51,922.5\n4,240,535.0\nSep\n197,641.5\n85,842.6\n112,415.3\n462,925.6\n349,564.2\n831,813.0\n379,121.4\n71,090.0\n1,033,106.7\n53,348.1\n676,308.0\n55,759.2\n4,308,935.5\nOct\n219,922.3\n85,382.0\n116,874.4\n447,200.7\n331,543.6\n821,640.8\n378,568.5\n68,298.7\n1,100,719.7\n55,846.7\n648,757.5\n67,353.2\n4,342,108.3\nNov\n212,806.1\n85,815.7\n98,468.4\n465,089.7\n334,835.6\n846,959.0\n363,754.4\n71,866.2\n1,074,141.8\n56,110.3\n665,421.1\n64,630.3\n4,339,898.7\nDec\n196,092.9\n88,273.0\n102,636.9\n518,411.4\n336,909.2\n864,491.7\n307,845.0\n63,337.5\n1,163,771.1\n57,410.5\n639,985.6\n66,435.7\n4,405,600.5\n2016\nJan\n231,827.3\n101,724.1\n93,544.2\n517,089.2\n325,203.1\n977,272.1\n345,812.2\n62,026.3\n1,083,702.7\n61,755.6\n618,080.1\n58,808.7\n4,476,845.6\nFeb\n226,568.3\n105,747.9\n97,684.4\n525,070.9\n339,839.0\n896,869.2\n326,026.0\n59,381.3\n1,047,904.6\n63,248.3\n634,478.3\n63,017.8\n4,385,835.9\nMar\n243,546.9\n102,238.4\n116,471.1\n582,943.5\n362,058.8\n879,340.8\n368,689.6\n60,514.0\n402,900.5\n62,839.4\n642,779.4\n61,037.6\n4,556,027.1\nApr\n243,151.6\n102,234.0\n112,219.5\n569,660.7\n360,299.5\n907,855.6\n335,068.6\n71,721.0\n1,156,122.6\n63,858.0\n628,901.1\n61,087.0\n4,612,179.4\nMay\n236,180.5\n97,008.6\n120,726.3\n593,284.9\n371,034.5\n923,580.9\n356,500.9\n99,176.4\n1,107,956.8\n61,396.5\n607,501.4\n64,066.3\n4,638,413.9\nJun\n218,386.8\n103,914.2\n134,181.8\n596,904.8\n362,400.2\n973,333.3\n316,490.8\n58,856.9\n1,128,688.7\n72,063.3\n601,813.8\n61,833.2\n4,628,867.8\nJul\n207,280.2\n99,727.9\n138,781.2\n616,359.8\n348,779.7\n1,035,697.0\n370,456.9\n63,986.1\n1,114,413.7\n65,391.9\n622,329.2\n69,058.9\n4,752,262.6\nAug\n233,004.5\n97,248.8\n153,590.8\n578,487.3\n365,366.8\n997,123.0\n356,522.0\n64,413.7\n1,227,979.0\n67,005.8\n621,307.8\n73,076.2\n4,835,125.8\nSep\n236,724.3\n101,117.1\n155,483.5\n597,290.0\n346,375.9\n1,046,195.2\n366,312.8\n57,885.0\n1,365,673.5\n73,805.9\n595,219.8\n70,669.7\n5,012,752.7\nOct\n239,373.9\n107,235.7\n160,641.2\n593,362.2\n344,681.9\n988,274.7\n363,815.8\n63,998.0\n1,384,083.2\n76,834.0\n593,827.7\n73,608.8\n4,989,737.2\nSource: Reserve Bank of Zimbabwe,2016\n TABLE 2.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \nUS$ thousands\n \n \n \n16 \n \n \n \nEnd Period\n1999\n2000\n2001\n2002\n2003\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n(US$ millions)\nLong-Term External Debt\n3,530\n3,227\n3,255\n3,327\n3,644\n3,927\n3,805\n3,965\n4,032\n4,464\n4,951\n5,175\n6,096\n6,607\n7,370\n8,444\n8,426\nGovernment\n2,461\n2,249\n2,328\n2,376\n2,617\n2,844\n2,895\n3,024\n3,054\n3,464\n4,037\n4,095\n4,638\n4,929\n5,012\n4,522\n5,293\nBilateral Creditors\n935\n1,050\n1,115\n1,107\n1,255\n1,455\n1,438\n1,520\n1,520\n1,863\n2,308\n2,325\n2,597\n2,694\n2,928\n2,445\n3,310\nMultilateral Creditors\n1,235\n1,199\n1,213\n1,269\n1,362\n1,389\n1,457\n1,504\n1,524\n1,592\n1,729\n1,770\n2,041\n2,235\n2,084\n2,078\n1,982\nPrivate Creditors\n291\n0\n0\n0\n0\n0\n0\n0\n10\n10\n0\n0\n0\n0\n0\n0\n0\nPublic Enterprises\n543\n534\n568\n616\n698\n714\n709\n766\n790\n825\n857\n938\n1,092\n1,198\n1,356\n1,661\n1,220\nBilateral Creditors\n316\n301\n315\n351\n403\n442\n439\n464\n474\n497\n453\n238\n711\n703\n858\n1,155\n760\nMultilateral Creditors\n224\n233\n253\n265\n295\n272\n270\n302\n316\n327\n403\n700\n382\n495\n498\n506\n460\nPrivate Creditors\n3\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\nMonetary Authorities\n364\n292\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\n120\n110\nMultilateral Creditors - IMF\n364\n292\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\n120\n110\nPrivate\n162\n152\n67\n56\n41\n78\n57\n45\n51\n35\n57\n142\n366\n480\n1,002\n2,261\n1,913\nShort-Term External Debt\n532\n298\n167\n183\n169\n144\n173\n281\n387\n226\n1,198\n1,382\n1,289\n890\n1,564\n2,394\n2,258\nSupplier's Credits\n150\n42\n13\n26\n51\n69\n107\n122\n178\n41\n193\n286\n134\n30\n0\n0\n0\nReserve Bank\n642\n642\n618\n614\n614\n587\n587\nPrivate\n382\n256\n154\n157\n118\n75\n66\n159\n209\n185\n363\n454\n537\n246\n950\n1,807\n1,671\nTotal External Debt\n4,062\n3,525\n3,422\n3,510\n3,812\n4,071\n3,978\n4,246\n4,419\n4,690\n6,149\n6,557\n7,385\n7,497\n8,934\n10,838\n10,684\nSource: Ministry of Finance & Economic Development, 2016; & Reserve Bank of Zimbabwe, 2016\nTABLE 3.1: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR (INCLUDING ALL ARREARS)\n \n \n \n17 \n \n \n \n \n \nEnd Period\nNominal Lending Rates2\nIndividuals \nCorporate\n2015 \nJan\n6.00-35.00\n14.16 \n9.66 \nFeb\n4.30-33.50\n14.00 \n9.73 \nMar\n4.30-33.50\n13.24 \n8.75 \nApr\n4.30-31.00\n12.71 \n8.84 \nMay\n5.00-31.00\n12.74 \n8.79 \nJun\n5.00-31.00\n11.94 \n8.42 \nJul\n5.00-31.00\n11.86 \n8.56 \nAug\n4.30-26.00\n11.96 \n8.51 \nSep\n4.30-25.00\n11.81 \n8.47 \nOct\n4.00-18.00\n10.98 \n7.28 \nNov\n4.00-16.25\n12.20 \n7.67 \nDec\n6.00-16.00\n11.99 \n7.57 \n2016 \nJan\n6.00-22.00\n12.08 \n7.38 \nFeb\n4.00-22.00\n11.48 \n7.29 \nMar\n4.00-22.00\n11.44 \n7.16 \nApr\n4.00-22.00\n11.50 \n7.20 \nMay\n4.00-18.00\n11.43 \n7.35 \nJun\n4.00-18.00\n11.40 \n7.48 \nJul\n4.00-18.00\n10.69 \n6.79 \nAug\n4.00-18.00\n10.67 \n6.84 \nSep\n4.00-18.00\n10.66 \n6.95 \nOct\n4.00-18.00\n10.70 \n6.93 \nSource:Reserve Bank of Zimbabwe, 2016\nNotes\n3. Lending rates exclude rates on staff loans. \nTABLE 4.1 LENDING RATES (percent per annum)1\n2. Nominal Lending Rates depict the range of rates quoted by banks.\nCommercial Banks\nWeighted Average Lending Rates 3 \n1. Table revised, to separate weighted lending rates for individuals and corporate bodies. \n \n \n \n18 \n \n \n \nEND OF\nSAVINGS\n3 MONTHS\n2015 \nJan\n0.15-8.00\n3.00-17.00\nFeb\n0.50-12.00\n1.00-17.00\nMar\n0.50-12.00\n1.00-17.00\nApr\n0.30-8.00\n1.00-17.00\nMay\n0.30-8.00\n1.00-17.00\nJun\n0.30-8.00\n1.00-17.00\nJul\n0.30-8.00\n1.00-15.00\nAug\n0.30-8.00\n1.00-15.00\nSep\n0.30-8.00\n1.00-16.00\nOct\n0.50-8.00\n1.00-17.00\nNov\n0.75-8.00\n1.00-17.00\nDec\n0.50-8.00\n0.75-17.00\n2016 \nJan\n0.50-8.00\n0.75-17.00\nFeb\n0.50-8.00\n0.75-17.00\nMar\n0.50-8.00\n0.75-17.00\nApr\n0.50-8.00\n0.75-17.00\nMay\n0.50-8.00\n0.75-17.00\nJun\n0.50-6.00\n0.75-17.00\nJul\n0.50-6.00\n0.75-17.00\nAug\n0.50-6.00\n1.00-17.00\nSep\n0.50-6.00\n1.00-17.00\nOct\n0.50-6.00\n1.00-17.00\n Source:Reserve Bank of Zimbabwe, 2016\n* The range of rates qouted by banks during the period.\nTABLE 4.2 : BANKS DEPOSIT RATES (percent per annum)*\nCOMMERCIAL BANKS\n \n \n \n19 \n \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHOUSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNICATION\nRECREATION \n&\nEDUCATION\nRESTAURANTS \n&\nMISC.\nTOTAL NON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.38\n6.05\n17.74\n9.91\n2.16\n9.76\n3.41\n2.1\n5.67\n1.38\n3.91\n66.47\n33.53\n100\n2015 \nJan\n-0.04\n-0.01\n0.08\n0.07\n0.06\n-0.97\n-13.41\n0.02\n-0.08\n-0.48\n0.30\n-0.69\n0.40\n-0.34\nFeb\n0.25\n-0.35\n-0.09\n-0.11\n-0.02\n-0.41\n-0.10\n-0.17\n0.00\n-0.28\n0.10\n-0.13\n0.05\n-0.07\nMar\n0.12\n-0.27\n-0.06\n-0.02\n-0.05\n0.02\n0.00\n0.03\n0.00\n0.12\n0.10\n-0.03\n-0.03\n-0.03\nApr\n-0.63\n-0.01\n-0.71\n-3.35\n-0.46\n-0.05\n-0.15\n-0.13\n-0.07\n0.59\n0.41\n-0.04\n-1.01\n-0.89\nMay\n-0.17\n-0.41\n0.18\n-0.25\n0.10\n-0.25\n-0.02\n-0.11\n0.00\n-0.08\n-0.44\n-0.10\n-0.37\n-0.19\nJun\n0.36\n-0.06\n-0.02\n-0.07\n-0.17\n0.06\n0.01\n-0.09\n0.00\n-0.07\n0.11\n0.01\n-0.45\n-0.14\nJul\n-0.08\n0.05\n-0.56\n-0.82\n0.15\n-0.09\n-0.02\n-0.14\n7.48\n-0.02\n0.03\n0.47\n-0.81\n0.06\nAug\n-0.27\n-0.01\n0.02\n-0.14\n-0.04\n-0.29\n-0.06\n-0.26\n0.00\n-0.14\n-0.09\n-0.10\n-0.75\n-0.36\nSep\n-0.05\n0.00\n-0.62\n-0.52\n0.04\n-0.42\n-0.38\n-0.01\n0.00\n1.28\n-0.30\n-0.31\n-0.47\n-0.36\nOct\n-0.43\n-0.31\n-0.08\n-0.32\n0.61\n-0.47\n0.02\n-0.14\n0.00\n-0.18\n0.12\n-0.17\n-0.53\n-0.29\nNov\n-0.15\n-0.19\n-0.01\n-0.24\n0.00\n-0.08\n-0.23\n-0.02\n2.83\n-0.03\n-0.02\n0.22\n0.04\n0.16\nDec\n-0.41\n-0.15\n0.18\n-0.07\n-0.06\n-0.25\n-0.03\n0.09\n0.00\n-0.07\n-0.30\n-0.06\n-0.21\n-0.11\n2016 \nJan\n0.05\n-0.02\n-0.04\n-0.30\n-0.15\n-0.37\n0.00\n-0.18\n0.00\n-0.16\n-0.29\n-0.13\n0.13\n-0.05\nFeb\n-0.14\n0.00\n-0.12\n-0.19\n-0.17\n-0.37\n-0.13\n-0.01\n0.00\n-0.17\n0.06\n-0.14\n-0.03\n-0.10\nMar\n-0.15\n-0.17\n-1.03\n-0.73\n-0.13\n-0.30\n0.42\n-0.04\n3.36\n-0.62\n-0.60\n-0.11\n-0.13\n-0.12\nApr\n0.03\n-0.14\n-0.02\n-0.32\n0.00\n0.07\n-0.08\n-0.02\n-0.01\n-0.09\n-0.35\n-0.08\n-0.51\n-0.21\nMay\n-0.29\n-0.22\n0.12\n-0.11\n-0.18\n-0.11\n-1.61\n0.06\n0.00\n0.02\n-0.33\n-0.12\n-0.49\n-0.24\nJun\n0.07\n-0.21\n0.58\n0.03\n0.15\n-0.08\n-0.01\n-0.23\n2.65\n0.31\n0.09\n0.44\n-0.35\n0.19\nJul\n0.01\n-0.15\n0.04\n0.05\n-0.15\n-0.03\n-0.36\n0.09\n0.00\n0.04\n-0.30\n-0.03\n-0.52\n-0.19\nAug\n-0.06\n-0.22\n0.00\n-0.03\n-0.02\n-0.13\n-0.02\n-0.10\n0.00\n0.01\n0.13\n-0.04\n-0.31\n-0.13\nSep\n0.10\n-0.03\n-1.11\n-0.27\n-0.03\n-0.08\n-0.09\n-0.26\n0.00\n0.01\n0.10\n-0.34\n-0.06\n-0.26\nOct\n-0.05\n-0.24\n-0.13\n0.06\n-0.03\n-0.06\n0.00\n-0.01\n0.00\n-0.06\n0.17\n-0.05\n0.40\n0.09\nSource:Zimstat, 2016\nNON-FOOD INFLATION\nTABLE 5.1 : MONTHLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX\n( DECEMBER 2012 = 100)\n \n \n \n20 \n \nFOOD \nIN FLA TION\nA LL\nA LC OHOLIC \nB EV ER A GES \nC LOTHIN G\nHOU S IN G, \nWA TER ,\nFU R N ITU R E\nHEA LTH\nTR A N S POR T\nC OM M U N IC A TION\nR EC R EA TION \n&\nED U C A TION\nR ES TA U R A N TS \n&\nM IS C .\nTOTA L N ON\nFOOD & \nITEM S\n& TOB A C C O\n& FOOTWEA R\nELEC TR IC TY , \nGA S\nA N D\nC U LTU R E\nHOTELS\nGOOD S &\nFOOD\nN ON \nA LC OHOLIC \nB EV ER A GES\n& OTHER\nEQU IPM EN T\nS ER V IC ES\nFU ELS\n2015\nJan\n0.47\n0.00\n-0.16\n-1.86\n1.21\n0.19\n-13.69\n-0.44\n4.35\n-2.16\n-1.82\n-0.57\n-2.74\n-1.28\nFeb\n0.73\n-0.25\n-0.14\n-1.88\n1.10\n-0.30\n-13.78\n-0.57\n4.11\n-2.36\n-1.80\n-0.68\n-2.87\n-1.40\nMar\n0.90\n-0.46\n0.62\n-1.78\n1.03\n-0.28\n-13.78\n-0.54\n4.11\n-2.26\n-1.41\n-0.44\n-2.77\n-1.20\nApr\n-2.93\n0.59\n-1.07\n-2.62\n-1.50\n0.81\n-0.76\n-13.88\n-0.95\n-7.02\n-0.84\n-1.41\n-2.51\n-2.65\nMay\n0.31\n-1.37\n-2.39\n-1.45\n0.92\n-1.23\n-13.87\n-0.86\n-7.09\n-0.79\n-1.42\n-2.56\n-3.00\n-2.70\nJun\n0.72\n-1.54\n-2.41\n-1.58\n0.45\n-1.14\n0.00\n-0.87\n-7.09\n-0.75\n-1.38\n-2.57\n-3.32\n-2.81\nJul\n0.74\n-1.61\n-3.24\n-2.37\n0.50\n-1.12\n-13.77\n-0.93\n-1.90\n-1.61\n-0.99\n-2.35\n-3.65\n-2.77\nAug\n0.61\n-1.53\n-3.22\n-2.37\n0.42\n-1.67\n-13.77\n-1.11\n-1.88\n-1.78\n0.13\n-2.38\n-3.59\n-2.77\nSep\n0.47\n-1.67\n-4.25\n-2.62\n0.25\n-2.45\n-14.05\n-0.99\n-1.88\n-0.12\n-0.28\n-2.83\n-3.72\n-3.11\nOct\n-0.12\n-2.04\n-4.33\n-2.80\n0.86\n-2.64\n-13.98\n-1.09\n-1.89\n-0.32\n-0.20\n-2.95\n-4.00\n-3.29\nNov\n-0.45\n-2.35\n-4.32\n-2.94\n0.77\n-2.81\n-14.19\n-1.14\n11.08\n0.28\n-0.27\n-1.80\n-3.85\n-2.46\nDec\n-0.88\n-2.39\n-4.29\n-2.91\n0.57\n-3.24\n-14.22\n-0.89\n11.08\n0.43\n-0.42\n-1.89\n-3.71\n-2.47\n2016\nJan\n-0.79\n-2.41\n-4.40\n-3.27\n0.37\n-2.66\n-0.93\n-1.09\n11.17\n0.75\n-1.01\n-1.34\n-3.96\n-2.19\nFeb\n-1.16\n-2.06\n-4.43\n-3.35\n0.22\n-2.62\n-0.97\n0.21\n11.17\n0.96\n-1.17\n-1.35\n-4.04\n-2.22\nMar\n-1.43\n-1.97\n-5.36\n-4.04\n0.14\n-2.92\n-0.55\n-1.00\n14.91\n0.21\n-1.86\n-1.43\n-4.13\n-2.31\nApr\n-1.40\n-1.40\n-2.11\n-3.91\n0.19\n-2.71\n-0.50\n-0.95\n14.21\n-0.28\n-2.17\n-0.51\n-4.02\n-1.64\nMay\n-1.52\n-1.21\n-2.17\n-3.77\n-0.10\n-2.57\n-2.09\n-0.78\n14.21\n-0.18\n-2.07\n-0.53\n-4.13\n-1.69\nJun\n-1.80\n-1.36\n-1.58\n-3.67\n0.21\n-2.71\n-2.10\n-0.92\n17.24\n0.20\n-2.09\n-0.09\n-4.04\n-1.37\nJul\n-1.71\n-1.56\n-0.98\n-2.83\n-0.09\n-2.66\n-2.43\n-0.69\n9.09\n0.27\n-2.42\n-0.59\n-3.76\n-1.60\nAug\n-1.50\n-1.77\n-1.01\n-2.73\n-0.07\n-2.50\n-2.39\n-0.54\n9.09\n0.42\n-2.21\n-0.54\n-3.34\n-1.43\nSep\n-1.36\n-1.79\n-1.50\n-2.48\n-0.14\n-2.17\n-2.10\n-0.78\n9.09\n-0.84\n-1.82\n-0.58\n-2.94\n-1.33\nOct\n-0.97\n-1.73\n-1.54\n-2.10\n-0.76\n-1.77\n-2.13\n-0.65\n9.09\n-0.72\n-1.77\n-0.45\n-2.03\n-0.95\nSource: Zimstat, 2016\nN ON - FOOD IN FLA TION\nTABLE 5.2 : YEARLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \\1\n(DECEMBER 2012 = 100)\n \n \n \n21 \n \n \nSA\nBW\nJAPANESE\nEUROPEAN\nPOUND\nEND OF\nRAND/1\nPULA/1\nYEN/1\nCURRENCY/2\nSTERLING/2\n2015\nJAN\n11.5530\n9.6108\n117.8500\n1.1334\n1.5081\nFEB\n11.5530\n9.6108\n119.1700\n1.1200\n1.5400\nMAR\n12.1600\n9.9600\n120.1900\n1.0790\n1.4771\nAPR\n11.8200\n9.7400\n118.6000\n1.1100\n1.5400\nMAY\n12.1338\n9.7561\n123.8650\n1.0947\n1.5300\nJUNE\n12.2600\n9.9200\n122.3100\n1.1191\n1.5723\nJULY\n12.7100\n10.6700\n124.0300\n1.0941\n1.5601\nAUG\n13.3100\n10.2000\n121.1100\n1.1247\n1.5427\nSEPT\n13.9000\n10.5500\n119.9400\n1.1245\n1.5385\nOCT\n13.8500\n10.4700\n121.1500\n1.0981\n1.5400\nNOV\n14.3958\n10.6952\n122.7250\n1.0589\n1.5315\nDEC\n15.5600\n11.0990\n120.4200\n1.0929\n1.4925\n2016\nJAN\n16.0900\n11.4300\n120.5500\n1.0905\n1.4493\nFEB\n16.1100\n11.2700\n113.0300\n1.0990\n1.3880\nMAR\n15.4500\n11.1000\n112.9500\n1.1100\n1.4200\nAPR\n14.6200\n10.7575\n109.6825\n1.1340\n1.4306\nMAY\n15.3200\n10.9800\n108.9323\n1.1340\n1.4522\nJUN\n14.8834\n10.9349\n102.6700\n1.1095\n1.3397\nJUL\n14.4277\n10.7892\n103.9398\n1.1069\n1.3180\nAUG\n13.7656\n9.4521\n101.2190\n1.0960\n1.2280\nSEP\n13.9200\n10.5800\n101.6000\n1.1200\n1.3200\nOCT\n13.9400\n10.6500\n103.7600\n1.0989\n1.2346\nSource: Reserve Bank of Zimbabwe, 2016\n TABLE 6 : SELECTED INTERNATIONAL EXCHANGE RATES\n1. Foreign currency per US Dollar.\n2. US Dollar per unit of foreign currency.\n \n \n \n22 \n \n \n \n \nForeign\nLoans & \nContigent\nOther\nNon Financial \nTOTAL\nEnd of\nNotes\nTotal\nOther Balances\nAdvnces\nAssets\nAssets\nAssets\n&\nBalances\nBalances \nBalances\nwith RBZ\nBond\nCoin\nwith\nwith Other \nat\nTrade\nTreasury\nAgric PEs\nCoins\nat Banks\nRBZ\nBanks\nForeign Banks\nBills\nBills\n2015\n Jan\n0.6\n222.5\n527.9\n159.0\n182.6\n163.6\n325.7\n0.0\n1,581.9\n \n21.4\n2,796.76\n \n557.7\n360.2\n366.1\n5,684.2\n \n Feb\n0.4\n216.7\n501.2\n149.6\n183.2\n128.6\n344.6\n0.0\n1,524.2\n \n17.9\n2,792.50\n \n564.8\n325.3\n356.8\n5,581.5\n \n Mar\n0.6\n246.9\n461.4\n147.8\n222.2\n121.6\n338.0\n5.4\n1,543.8\n \n15.5\n2,925.46\n \n527.3\n352.5\n362.0\n5,726.6\n \n Apr\n0.7\n205.5\n492.8\n158.6\n218.5\n112.0\n335.1\n5.4\n1,528.6\n \n18.2\n2,967.13\n \n527.1\n364.2\n385.4\n5,790.7\n \n May\n0.7\n237.3\n495.6\n135.1\n181.0\n101.4\n622.7\n5.5\n1,779.2\n \n18.2\n2,922.70\n \n525.7\n434.2\n384.3\n6,064.3\n \n Jun\n0.8\n245.7\n570.9\n155.1\n144.7\n90.8\n750.1\n4.4\n1,962.4\n \n28.8\n2,872.55\n \n498.4\n351.0\n386.2\n6,099.4\n \n Jul\n0.9\n226.0\n544.9\n137.3\n135.3\n86.3\n770.0\n0.0\n1,900.7\n \n28.8\n2,815.04\n \n504.1\n361.1\n388.8\n5,998.5\n \n Aug\n1.0\n234.0\n523.7\n104.3\n194.7\n76.1\n786.5\n5.1\n1,925.3\n \n28.8\n2,810.06\n \n535.2\n339.9\n390.5\n6,029.6\n \n Sep\n1.0\n255.2\n551.8\n114.8\n192.9\n63.7\n764.9\n5.1\n1,949.4\n \n28.0\n2,844.13\n \n599.2\n404.6\n392.3\n6,217.7\n \n Oct\n0.9\n215.7\n536.1\n143.7\n171.5\n83.5\n808.3\n5.2\n1,964.9\n \n26.7\n2,884.16\n \n599.3\n350.6\n391.5\n6,217.0\n \n Nov\n1.2\n186.9\n526.1\n135.9\n123.5\n74.3\n871.8\n5.2\n1,924.9\n \n26.6\n2,931.49\n \n603.6\n355.3\n393.6\n6,235.5\n \n Dec\n0.7\n181.6\n542.9\n127.5\n118.6\n79.7\n1031.3\n5.2\n2,087.6\n \n20.8\n2,820.54\n \n582.0\n352.8\n396.7\n6,260.4\n \n2016\n Jan\n1.0\n172.0\n646.9\n119.2\n130.7\n76.6\n981.9\n5.2\n2,133.5\n \n20.6\n2,763.7\n \n582.8\n387.3\n396.6\n6,284.4\n \n Feb\n1.2\n140.7\n682.1\n96.3\n118.1\n21.5\n1125.6\n5.2\n2,190.7\n \n20.1\n2,680.9\n \n477.1\n390.1\n399.3\n6,158.2\n \n Mar\n1.3\n161.9\n714.2\n96.3\n156.8\n19.2\n1140.5\n5.1\n2,295.4\n \n20.3\n2,690.6\n \n430.6\n428.7\n405.1\n6,270.8\n \n Apr\n1.3\n135.5\n757.8\n135.5\n133.3\n18.7\n1198.1\n5.1\n2,385.4\n \n20.4\n2,653.4\n \n413.7\n441.1\n404.7\n6,318.6\n \n May\n1.4\n89.6\n871.6\n130.5\n110.4\n19.3\n1215.9\n5.0\n2,443.6\n \n19.8\n2,681.8\n \n397.0\n358.0\n412.6\n6,312.8\n \n Jun\n1.4\n108.5\n914.7\n84.6\n148.3\n19.2\n1274.4\n1.8\n2,553.0\n \n19.7\n2,669.3\n \n407.7\n358.0\n431.6\n6,439.3\n \n Jul\n1.4\n101.2\n972.6\n82.5\n166.0\n16.5\n1313.2\n0.0\n2,653.5\n \n20.5\n2,567.9\n \n393.2\n342.6\n440.3\n6,418.1\n \n Aug\n1.4\n140.2\n1054.0\n97.5\n156.9\n14.9\n1293.8\n0.0\n2,758.7\n \n20.5\n2,565.9\n \n390.2\n367.5\n447.3\n6,550.2\n \n Sep\n1.4\n91.6\n1104.1\n143.9\n194.6\n6.0\n1329.1\n5.4\n2,876.2\n \n18.5\n2,547.7\n \n382.3\n422.0\n455.9\n6,702.6\n \n Oct\n1.3\n81.0\n1069.6\n130.2\n182.1\n6.5\n1373.5\n5.4\n2,849.7\n \n20.8\n2,614.8\n \n397.2\n357.9\n458.2\n6,698.6\n \nSource:Reserve Bank of Zimbabwe, 2016\nLiquid Assets\nTABLE 7.1: COMMERCIAL BANKS - ASSETS\nSecurities\nUS$ millions\n \n \n \n23 \n \n \n \n \nDeposits\nCapital\nContigent\nOther\nTotal\nOf which\nand\nLiablities\nLiablities\nLiabilities to the \nEnd of\nDemand\nSavings and Short-term\nLong-term\nTotal\nForeign Liabilities\nRBZ\nOther Banks\nReserves\nPublic\n2015\nJan\n2,056.2\n \n996.2\n561.7\n3,614.0\n \n470.1\n0.0\n79.5\n728.5\n557.7\n234.3\n5,684.2\n \n3,614.0\n \nFeb\n2,079.6\n \n876.1\n611.6\n3,567.3\n \n426.6\n0.0\n75.6\n720.3\n564.8\n227.0\n5,581.5\n \n3,567.3\n \nMar\n2,139.3\n \n940.4\n513.3\n3,593.0\n \n461.1\n0.0\n101.9\n749.7\n527.3\n293.6\n5,726.6\n \n3,593.0\n \nApr\n2,098.7\n \n943.5\n629.8\n3,672.0\n \n448.9\n0.0\n103.4\n747.4\n527.1\n291.8\n5,790.7\n \n3,672.0\n \nMay\n2,131.8\n \n1015.3\n615.3\n3,762.4\n \n574.7\n0.0\n82.4\n814.7\n525.7\n304.4\n6,064.3\n \n3,762.4\n \nJun\n2,213.2\n \n1021.9\n593.5\n3,828.7\n \n560.2\n0.8\n103.1\n814.9\n498.4\n293.2\n6,099.4\n \n3,828.7\n \nJul\n2,166.4\n \n889.7\n732.5\n3,788.6\n \n478.9\n0.8\n88.2\n813.0\n504.1\n325.0\n5,998.5\n \n3,788.6\n \nAug\n2,266.7\n \n790.9\n723.1\n3,780.7\n \n490.7\n0.0\n83.4\n825.7\n535.2\n313.9\n6,029.6\n \n3,780.7\n \nSep\n2,276.7\n \n967.6\n648.7\n3,892.9\n \n504.0\n0.0\n72.0\n828.1\n599.2\n321.5\n6,217.7\n \n3,892.9\n \nOct\n2,259.9\n \n909.3\n667.8\n3,837.0\n \n494.3\n0.0\n122.2\n841.2\n599.3\n322.9\n6,217.0\n \n3,837.0\n \nNov\n2,475.9\n \n919.4\n580.1\n3,975.4\n \n347.6\n0.0\n126.0\n845.3\n603.6\n337.5\n6,235.5\n \n3,975.4\n \nDec\n2,512.2\n \n999.0\n543.0\n4,054.2\n \n320.4\n0.0\n140.4\n866.9\n582.0\n296.5\n6,260.4\n \n4,054.2\n \n2016\nJan\n2,562.6\n \n952.2\n558.7\n4,073.5\n \n313.2\n0.0\n135.6\n871.3\n582.8\n308.0\n6,284.4\n \n4,073.5\n \nFeb\n2,545.7\n \n959.3\n572.0\n4,077.1\n \n298.9\n0.0\n126.0\n878.1\n477.1\n301.0\n6,158.2\n \n4,077.1\n \nMar\n2,653.7\n \n893.4\n680.0\n4,227.1\n \n303.1\n0.0\n135.2\n886.6\n430.6\n288.2\n6,270.8\n \n4,227.1\n \nApr\n2,675.3\n \n1008.1\n591.9\n4,275.3\n \n285.7\n0.0\n154.4\n893.9\n413.7\n295.5\n6,318.6\n \n4,275.3\n \nMay\n2,764.6\n \n1100.0\n449.7\n4,314.3\n \n300.0\n0.0\n101.3\n908.9\n397.0\n291.2\n6,312.8\n \n4,314.3\n \nJun\n2,865.3\n \n907.1\n673.1\n4,445.5\n \n272.3\n0.0\n118.6\n915.7\n407.7\n279.5\n6,439.3\n \n4,445.5\n \nJul\n2,826.1\n \n993.3\n654.3\n4,473.7\n \n260.7\n0.0\n93.8\n922.3\n393.2\n274.4\n6,418.1\n \n4,473.7\n \nAug\n2,979.0\n \n1002.4\n587.6\n4,569.0\n \n257.0\n0.0\n87.1\n932.3\n390.2\n314.7\n6,550.2\n \n4,569.0\n \nSep\n3,093.4\n \n965.0\n662.8\n4,721.2\n \n246.3\n0.0\n100.2\n944.5\n382.3\n308.1\n6,702.6\n \n4,721.2\n \nOct\n3,207.8\n \n917.4\n568.7\n4,693.9\n \n267.7\n0.0\n97.5\n954.5\n397.2\n287.9\n6,698.6\n \n4,693.9\n \nSource:Reserve Bank of Zimbabwe, 2016\nTABLE 7.2: COMMERCIAL BANKS - LIABILITIES\nUS$ millions\nAmounts Owing to\n \n \n \n24 \n \n \n \n \n \nForeign\nLoans & \nContigent\nOther\nNon Financial \nTOTAL\nEnd of\nNotes\nTotal\nOther Balances\nAdvnces\nAssets\nAssets\nAssets\nBond\n&\nBalances\nBalances \nBalances\nLiquid\nwith RBZ\nCoins\nCoin\nwith\nwith Other \nat\nTrade\nTreasury\nAgris Pes\nAssets\nat Banks\nRBZ\nBanks\nForeign Banks\nBills\nBills\n2015\n Jan\n0.0\n0.6\n0.3\n0.0\n0.1\n1.6\n0.0\n0.0\n2.0\n0.0\n70.2\n8.3\n19.0\n23.7\n123.8\n Feb\n0.0\n0.4\n0.2\n0.1\n0.1\n1.6\n0.0\n0.0\n2.5\n0.0\n72.0\n8.3\n19.3\n23.6\n125.7\n Mar\n0.0\n0.4\n0.1\n0.0\n0.1\n1.5\n0.0\n0.0\n2.1\n0.0\n73.3\n8.2\n18.5\n23.4\n125.5\n Apr\n0.0\n0.3\n0.1\n0.0\n0.1\n0.2\n0.0\n0.0\n0.6\n0.0\n66.7\n0.0\n10.3\n21.3\n98.9\n May\n0.0\n0.4\n0.0\n0.0\n0.0\n0.2\n0.0\n0.0\n0.6\n0.0\n67.9\n0.0\n9.6\n21.2\n99.3\n Jun\n0.0\n0.3\n0.0\n0.0\n0.0\n0.4\n0.0\n0.0\n0.7\n0.0\n68.1\n0.0\n9.7\n21.1\n99.6\n Jul\n0.0\n0.2\n1.6\n0.0\n0.0\n0.2\n0.0\n0.0\n2.0\n0.0\n67.8\n0.0\n9.2\n21.0\n100.0\n Aug\n0.0\n0.1\n1.8\n0.0\n0.0\n0.2\n0.0\n0.0\n2.0\n0.0\n60.0\n0.0\n9.3\n28.1\n99.4\n Sep\n0.0\n0.1\n2.2\n0.0\n0.0\n0.2\n0.0\n0.0\n2.5\n0.0\n59.2\n0.0\n9.2\n28.0\n98.9\n Oct\n0.0\n0.1\n2.1\n0.0\n0.0\n0.2\n0.0\n0.0\n2.4\n0.0\n59.4\n0.0\n9.1\n27.8\n98.8\n Nov\n0.0\n0.1\n2.0\n0.0\n0.0\n0.2\n0.0\n0.0\n2.4\n0.0\n58.5\n0.0\n9.5\n20.6\n91.0\n Dec\n0.0\n0.1\n1.6\n0.0\n0.0\n0.2\n0.0\n0.0\n1.9\n0.0\n59.8\n0.0\n9.4\n20.5\n91.6\n2016\n Jan\n0.0\n0.1\n1.9\n0.0\n0.0\n0.2\n0.0\n0.0\n2.2\n0.0\n60.7\n0.0\n9.3\n20.3\n92.5\n Feb\n0.0\n0.1\n0.9\n1.1\n0.0\n0.2\n0.0\n0.0\n2.3\n0.0\n61.6\n0.0\n9.2\n20.2\n93.2\n Mar\n0.0\n0.1\n1.9\n0.0\n0.0\n0.2\n0.0\n0.0\n2.3\n0.0\n62.0\n0.0\n9.3\n20.1\n93.6\n Apr\n0.0\n0.2\n0.7\n1.1\n0.0\n0.2\n0.0\n0.0\n2.2\n0.0\n62.3\n0.0\n9.4\n19.9\n93.8\n May\n0.0\n0.1\n0.9\n1.2\n0.0\n0.2\n0.0\n0.0\n2.4\n0.0\n62.7\n0.0\n9.3\n19.8\n94.2\n Jun\n0.0\n0.1\n0.9\n1.2\n0.0\n0.4\n0.0\n0.0\n2.6\n0.0\n62.7\n0.0\n9.3\n19.8\n94.4\n Jul\n0.0\n0.1\n1.8\n0.6\n0.0\n0.2\n0.0\n0.0\n2.7\n0.0\n63.4\n0.0\n9.2\n19.8\n95.1\n Aug\n0.0\n0.1\n1.7\n0.6\n0.0\n0.2\n0.0\n0.0\n2.6\n0.0\n63.6\n0.0\n9.3\n19.7\n95.2\n Sep\n0.0\n0.1\n1.7\n0.6\n0.0\n0.2\n0.0\n0.0\n2.6\n0.0\n63.9\n0.0\n9.4\n19.6\n95.5\n Oct\n0.0\n0.1\n1.1\n0.6\n0.0\n0.2\n0.0\n0.0\n2.0\n0.0\n64.5\n0.0\n9.4\n19.6\n95.5\nSource:Reserve Bank of Zimbabwe, 2016\nUS$ millions\nTABLE 8.1 : ACCEPTING HOUSES - ASSETS\nLiquid Assets\nSecurities\n \n \n \n25 \n \n \nOf which\nDeposits\nCapital\nContigent\nOther\nTotal\nLiabilities to the \nand\nLiablities\nLiablities\nPublic\nEnd of\nDemand\nSavings and Short-term\nLong-term\nTotal\nForeign Liabilities\nRBZ\nOther Banks\nReserves\n2015\n Jan\n39.0\n40.9\n0.0\n80.0\n11.7\n0.0\n0.0\n-47.0\n8.3\n70.7\n123.8\n80.0\n Feb\n38.4\n40.4\n0.0\n78.7\n11.7\n0.0\n0.0\n-48.7\n8.3\n75.6\n125.7\n78.7\n Mar\n68.6\n12.1\n0.0\n80.7\n12.0\n0.0\n0.0\n-50.7\n8.2\n75.2\n125.5\n80.7\n Apr\n63.9\n0.0\n0.0\n63.9\n0.0\n0.0\n0.0\n-27.5\n0.0\n62.4\n98.9\n63.9\n May\n63.9\n0.0\n0.0\n63.9\n0.0\n0.0\n0.0\n-28.8\n0.0\n64.2\n99.3\n63.9\n Jun\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-28.9\n0.0\n65.6\n99.6\n62.9\n Jul\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-27.8\n0.0\n64.8\n100.0\n62.9\n Aug\n62.9\n0.0\n0.0\n62.9\n0.0\n0.0\n0.0\n-14.9\n0.0\n51.3\n99.4\n62.9\n Sep\n62.2\n0.0\n0.0\n62.2\n0.0\n0.0\n0.0\n-15.3\n0.0\n52.0\n98.9\n62.2\n Oct\n61.9\n0.0\n0.0\n61.9\n0.0\n0.0\n0.0\n-16.4\n0.0\n53.2\n98.8\n61.9\n Nov\n58.8\n0.0\n0.0\n58.8\n0.0\n0.0\n0.0\n-20.2\n0.0\n52.5\n91.0\n58.8\n Dec\n58.5\n0.0\n0.0\n58.5\n0.0\n0.0\n0.0\n-20.1\n0.0\n53.2\n91.6\n58.5\n2016\n Jan\n58.5\n0.0\n0.0\n58.5\n0.0\n0.0\n0.0\n-18.8\n0.0\n52.9\n92.5\n58.5\n Feb\n58.3\n0.0\n0.0\n58.3\n0.0\n0.0\n0.0\n-19.4\n0.0\n54.3\n93.2\n58.3\n Mar\n58.3\n0.0\n0.0\n58.3\n0.0\n0.0\n0.0\n-20.1\n0.0\n55.3\n93.6\n58.3\n Apr\n58.3\n0.0\n0.0\n58.3\n0.0\n0.0\n0.0\n-19.5\n0.0\n55.0\n93.8\n58.3\n May\n58.4\n0.0\n0.0\n58.4\n0.0\n0.0\n0.0\n-20.2\n0.0\n56.0\n94.2\n58.4\n Jun\n58.4\n0.0\n0.0\n58.4\n0.0\n0.0\n0.0\n-20.2\n0.0\n56.0\n94.2\n58.4\n Jul\n58.4\n0.0\n0.0\n58.4\n0.0\n0.0\n0.0\n-19.3\n0.0\n56.1\n95.1\n58.4\n Aug\n58.3\n0.0\n0.0\n58.3\n0.0\n0.0\n0.0\n-19.3\n0.0\n56.1\n95.2\n58.3\n Sep\n58.9\n0.0\n0.0\n58.9\n0.0\n0.0\n0.0\n-19.3\n0.0\n55.9\n95.5\n58.9\n Oct\n58.9\n0.0\n0.0\n58.9\n0.0\n0.0\n0.0\n-19.3\n0.0\n55.9\n95.5\n58.9\nSource:Reserve Bank of Zimbabwe, 2016\nAmounts Owing to\nTABLE 8.2 : ACCEPTING HOUSES - LIABILITIES\nUS$ millions\n \n \n \n26 \n \n \nForeign\nMortgage\nOther\nOther\nNon Financial \nTOTAL\nEnd of\nNotes\nTotal\nAdvances\nAdvances\nAssets\nAssets\n&\nBalances \nNostro \nBond\nCoin\nwith Other \nBalances\nTrade\nTreasury\nCoins\nat Banks\nBanks\nBills\n2015\nJan\n0.1\n37.3\n196.0\n0.0\n0.1\n51.8\n307.1\n511.6\n172.1\n105.8\n126.1\n1,222.6\n \nFeb\n0.1\n32.1\n244.4\n0.0\n0.1\n51.9\n328.6\n522.9\n176.2\n106.8\n125.8\n1,260.2\n \nMar\n0.1\n52.4\n214.4\n0.0\n0.1\n52.0\n319.0\n508.7\n180.0\n122.5\n125.5\n1,255.5\n \nApr\n0.1\n32.5\n243.2\n0.0\n0.1\n60.4\n336.3\n520.2\n182.5\n118.3\n124.8\n1,282.0\n \nMay\n0.1\n33.6\n257.7\n0.0\n0.1\n60.1\n351.5\n448.7\n235.1\n137.5\n125.2\n1,298.0\n \nJun\n0.2\n59.6\n204.9\n0.0\n0.1\n60.1\n324.8\n464.9\n231.9\n139.4\n122.0\n1,283.0\n \nJul\n0.2\n51.6\n205.5\n0.0\n0.1\n62.9\n320.2\n461.5\n230.6\n133.9\n121.9\n1,268.2\n \nAug\n0.1\n53.0\n158.9\n0.0\n0.1\n76.2\n288.4\n482.9\n228.4\n136.0\n122.2\n1,257.9\n \nSep\n0.1\n55.4\n161.7\n0.0\n0.1\n76.0\n293.3\n480.4\n263.4\n125.8\n122.1\n1,285.0\n \nOct\n0.1\n45.2\n229.1\n0.0\n0.1\n76.0\n350.5\n494.0\n265.1\n126.0\n122.8\n1,358.4\n \nNov\n0.1\n43.6\n256.8\n0.0\n0.1\n76.1\n376.7\n292.0\n479.3\n131.8\n121.1\n1,400.9\n \nDec\n0.1\n27.3\n284.0\n0.0\n0.0\n76.6\n387.9\n317.4\n470.4\n114.7\n118.4\n1,408.8\n \n2016\nJan\n0.1\n17.4\n227.8\n10.0\n0.0\n76.6\n331.9\n326.9\n415.3\n145.6\n119.7\n1,339.4\n \nFeb\n0.2\n13.9\n240.0\n13.5\n0.0\n65.6\n333.2\n324.4\n420.2\n148.4\n119.6\n1,345.8\n \nMar\n0.2\n20.8\n255.7\n10.9\n0.0\n48.3\n335.9\n339.6\n399.4\n142.9\n119.4\n1,337.2\n \nApr\n0.2\n9.5\n210.3\n3.4\n0.0\n90.9\n314.2\n332.5\n402.2\n143.6\n119.2\n1,311.8\n \nMay\n0.1\n7.1\n214.5\n5.8\n0.0\n93.3\n320.8\n404.6\n341.0\n149.9\n122.9\n1,339.2\n \nJun\n0.2\n7.9\n267.9\n10.2\n0.0\n103.7\n389.8\n347.9\n389.4\n145.9\n119.3\n1,392.3\n \nJul\n0.2\n8.2\n225.6\n5.9\n0.0\n101.6\n341.4\n341.5\n412.1\n154.8\n123.8\n1,373.5\n \nAug\n0.1\n7.4\n221.3\n4.3\n0.0\n95.1\n328.2\n348.0\n402.7\n152.0\n123.4\n1,354.3\n \nSep\n0.2\n4.1\n232.8\n3.9\n0.0\n95.5\n336.5\n349.1\n406.2\n145.3\n123.3\n1,360.4\n \nOct\n0.1\n8.4\n243.4\n5.7\n0.0\n100.9\n358.5\n351.7\n416.2\n145.8\n123.4\n1,395.6\n \nSource:Reserve Bank of Zimbabwe, 2016\nLiquid Assets\nSecurities\nTABLE 9.1 : BUILDING SOCIETIES - ASSETS\nUS$ millions\n \n \n \n27 \n \n \nOf which\nCapital\nOther\nTotal\nLiabilities to the \nand\nLiabilities\nPublic\nEnd of\nSavings and Short-term\nLong-term\nTotal\nForeign Liabilities\nOther Banks\nReserves\n2015\nJan\n373.0\n397.1\n770.2\n54.6\n99.1\n267.8\n31.0\n1,222.6\n \n770.2\nFeb\n405.8\n400.3\n806.2\n53.6\n98.3\n272.9\n29.2\n1,260.2\n \n806.2\nMar\n408.1\n386.3\n794.4\n50.8\n108.8\n275.8\n25.8\n1,255.5\n \n794.4\nApr\n464.1\n364.8\n828.9\n48.3\n99.4\n276.8\n28.7\n1,282.0\n \n828.9\nMay\n472.0\n391.6\n863.6\n48.5\n87.4\n270.7\n27.8\n1,298.0\n \n863.6\nJun\n492.9\n343.9\n836.8\n48.3\n94.0\n272.9\n31.1\n1,283.0\n \n836.8\nJul\n458.3\n370.6\n828.9\n48.5\n85.8\n277.4\n27.5\n1,268.2\n \n828.9\nAug\n438.4\n386.1\n824.5\n47.6\n73.2\n282.7\n29.9\n1,257.9\n \n824.5\nSep\n498.9\n334.3\n833.2\n43.5\n84.9\n288.4\n35.0\n1,285.0\n \n833.2\nOct\n465.3\n428.4\n893.7\n42.4\n99.0\n293.6\n29.7\n1,358.4\n \n893.7\nNov\n446.1\n474.4\n920.4\n42.4\n104.3\n297.7\n36.0\n1,400.9\n \n920.4\nDec\n480.5\n463.9\n944.4\n43.0\n99.4\n293.3\n28.8\n1,408.8\n \n944.4\n2016\nJan\n447.7\n443.1\n890.7\n43.3\n74.7\n298.3\n32.3\n1,339.4\n \n890.7\nFeb\n446.8\n441.8\n888.6\n42.3\n81.6\n301.9\n31.5\n1,345.8\n \n888.6\nMar\n433.3\n449.5\n882.8\n37.0\n81.7\n289.7\n46.0\n1,337.2\n \n882.8\nApr\n495.3\n380.6\n875.9\n36.9\n75.1\n290.1\n33.9\n1,311.8\n \n875.9\nMay\n455.3\n403.8\n859.2\n36.2\n77.7\n320.7\n45.5\n1,339.2\n \n859.2\nMay\n455.3\n403.8\n859.2\n36.2\n77.7\n320.7\n45.5\n1,339.2\n \n859.2\nJun\n463.4\n443.7\n907.0\n35.4\n84.6\n319.0\n46.3\n1,392.3\n \n907.0\nJul\n420.3\n486.9\n907.3\n35.7\n73.1\n324.1\n33.4\n1,373.5\n \n907.3\nAug\n359.8\n523.3\n883.2\n33.6\n76.9\n327.4\n33.3\n1,354.3\n \n883.2\nSep\n414.2\n477.3\n891.5\n30.5\n82.7\n320.2\n35.5\n1,360.4\n \n891.5\nOct\n471.1\n441.1\n912.2\n29.4\n88.2\n325.7\n40.1\n1,395.6\n \n912.2\nSource:Reserve Bank of Zimbabwe, 2016\nDeposits\nTABLE 9.2 : BUILDING SOCIETIES - LIABILITIES\nUS$ millions \nAmounts Owing to\n \n \n \n28 \n \n \n \n \n \n \n \n \n \n \nMarket Capitalisation\nIndustrial\nMining\nMarket Turnover(US$)\nVolume of Shares\nUS$ Millions\n2015\nJan\n164.9\n58.1\n16,062,740.8\n57,390,451\n4,365.1\nFeb\n167.2\n55.4\n34,775,616.2\n119,324,114\n4,353.4\nMar\n158.2\n43.9\n18,903,881.0\n405,884,918\n4,117.1\nApr\n156.2\n42.9\n29,188,562.0\n563,833,853\n4,066.1\nMay\n153.0\n44.5\n23,280,422.2\n290,320,685\n3,978.1\nJun\n148.4\n44.3\n14,514,679.0\n80,441,278\n3,803.8\nJul\n145.4\n39.4\n20,419,108.0\n157,184,218\n3,812.7\nAug\n135.4\n35.3\n15,344,249.0\n76,187,436\n3,552.0\nSep\n131.9\n24.4\n18,202,232.0\n105,678,504\n3,444.5\nOct\n130.8\n23.6\n12,864,086.0\n63,758,585\n3,416.1\nNov\n117.6\n22.3\n8,947,586.0\n90,417,554\n3,141.7\nDec\n114.9\n23.7\n16,360,451.6\n183,792,940\n3,073.4\n2016\nJan\n103.0\n19.5\n10,399,904.0\n61,882,757\n2,790.4\nFeb\n99.4\n19.1\n15,556,983.0\n95,020,938\n2,692.3\nMar\n97.6\n19.4\n16,428,571.0\n97,601,725\n2,645.1\nApr\n105.8\n20.2\n14,026,917.0\n187,848,946\n2,862.6\nMay\n104.7\n25.5\n13,868,486.0\n99,055,230\n2,881.3\nJun\n101.0\n24.7\n18,064,624.0\n88,525,472\n2,780.9\nJul\n98.8\n25.7\n11,838,626.0\n57,222,624\n2,772.0\nAug\n99.5\n26.3\n7,075,762.0\n41,264,438\n2,734.3\nSep\n98.9\n26.6\n13,049,388.8\n68,329,516\n2,725.1\nOct\n120.8\n33.8\n22,649,152.2\n177,384,684\n3,328.3\nSource:Zimbabwe Stock Exchange (ZSE),2016\nIndices\nTable 10: ZIMBABWE STOCK MARKET STATISTICS\n \n \n \n29 \n \n \nCommercial\nBuilding \nEnd of\nBanks\nP.O.S.B.\nSocieties\nTOTAL\n2015\nJan\n1,557.9\n86.3\n770.2\n2,455.2\nFeb\n1,487.7\n90.4\n806.2\n2,384.2\nMar\n1,453.7\n93.6\n794.4\n2,353.9\nApr\n1,573.3\n90.4\n828.9\n2,492.6\nMay\n1,630.6\n89.2\n863.6\n2,583.4\nJun\n1,615.4\n95.1\n836.8\n2,547.3\nJul\n1,622.2\n92.4\n828.9\n2,543.5\nAug\n1,514.0\n93.1\n824.5\n2,431.5\nSep\n1,616.2\n101.3\n833.2\n2,550.7\nOct\n1,577.1\n97.5\n893.7\n2,568.3\nNov\n1,499.5\n100.0\n920.4\n2,520.0\nDec\n1,542.0\n94.4\n944.4\n2,580.8\n2016\nJan\n1,511.0\n99.6\n890.7\n2,501.3\nFeb\n1,531.3\n99.2\n888.6\n2,519.2\nMar\n1,573.4\n99.6\n882.8\n2,555.8\nApr\n1,599.9\n103.9\n875.9\n2,579.7\nMay\n1,549.8\n106.1\n859.2\n2,515.1\nJun\n1,580.2\n108.3\n859.2\n2,547.7\nJul\n1,647.7\n105.4\n907.0\n2,660.0\nAug\n1,590.0\n105.4\n907.3\n2,602.7\nSep\n1,627.7\n104.4\n883.2\n2,615.3\nOct\n1,486.1\n103.2\n891.5\n2,480.8\nSource:Reserve Bank of Zimbabwe, 2016\n1/ Comprises all deposits other than demand deposits.\nTABLE 11 : SAVINGS /1 WITH FINANCIAL INSTITUTIONS\nUS$ millions\n \n \n \n30 \n \n \n \n \n \n \n \n \nLiquid\nPrescribed\nExcess\nLiquid\nPrescribed\nExcess\nassets\nliquid\nliquid\nassets\nliquid\nLiquid\nEnd of\nheld\nassets/1\nassets\nheld\nassets/1\nassets\n2015\nJan\n1,581.9\n1,084.2\n497.7\n2.0\n24.0\n-22.0\nFeb\n1,524.2\n1,070.2\n454.0\n2.5\n23.6\n-21.2\nMar\n1,543.8\n1,077.9\n465.9\n2.1\n24.2\n-22.1\nApr\n1,528.6\n1,101.6\n427.0\n0.6\n19.2\n-18.6\nMay\n1,779.2\n1,128.7\n650.4\n0.6\n19.2\n-18.5\nJun\n1,962.4\n1,148.6\n813.8\n0.7\n18.9\n-18.2\nJul\n1,900.7\n1,136.6\n764.1\n2.0\n18.9\n-16.9\nAug\n1,925.3\n1,134.2\n791.0\n2.0\n18.9\n-16.9\nSep\n1,949.4\n1,167.9\n781.6\n2.5\n18.6\n-16.1\nOct\n1,964.9\n1,151.1\n813.8\n2.4\n18.6\n-16.2\nNov\n1,924.9\n1,192.6\n732.2\n2.4\n17.6\n-15.3\nDec\n2,087.6\n1,216.3\n871.3\n1.9\n17.6\n-15.6\n2016\nJan\n2,133.5\n1,222.1\n911.4\n2.2\n17.6\n-15.4\nFeb\n2,190.7\n1,223.1\n967.6\n2.3\n17.5\n-15.2\nMar\n2,295.4\n1,268.1\n1,027.2\n2.3\n17.5\n-15.2\nApr\n2,385.4\n1,282.6\n1,102.8\n2.2\n17.5\n-15.3\nMay\n2,443.6\n1,294.3\n1,149.3\n2.4\n17.5\n-15.1\nJun\n2,553.0\n1,333.6\n1,219.4\n2.6\n17.5\n-14.9\nJul\n2,653.5\n1,342.1\n1,311.3\n2.7\n17.5\n-14.8\nAug\n2,758.7\n1,370.7\n1,388.0\n2.6\n17.5\n-14.9\nSep\n2,876.2\n1,416.4\n1,459.9\n2.6\n17.7\n-15.1\nOct\n2,849.7\n1,408.2\n1,441.6\n2.0\n17.7\n-15.7\nSource:Reserve Bank of Zimbabwe, 2016\n1/With effect from 1 August 2011, the prescribed liquid asset ratio was reviewed from 20% to 25% of liabilities to the public. \nUS$ millions\nTABLE 12 : ANALYSIS OF LIQUID ASSETS OF MONETARY BANKS \nCommercial Banks\n Accepting Houses\n \n \n \n31 \n \n \n \n \n \n \n \n \n \n \nMONTH \nZETSS \nCHEQUE \nPOS\nATM\nMOBILE INTERNET\n2015\nJan\n 3,659.0 \n11.8\n154.4\n311.9\n352.2\n113.5\nFeb\n 3,221.1 \n13.7\n141.8\n275.8\n334.6\n104.6\nMar\n 3,802.0 \n11.1\n132.0\n298.3\n364.7\n111.7\nApr\n 3,919.5 \n10.8\n134.0\n299.7\n341.2\n112.4\nMay\n 3,467.1 \n13.1\n128.8\n316.7\n390.0\n124.5\nJun\n 3,014.7 \n15.4\n123.5\n333.7\n438.7\n136.6\nJul\n 4,010.3 \n12.6\n154.6\n332.4\n391.0\n128.6\nAug\n 3,299.1 \n11.4\n193.4\n313.2\n391.2\n133.6\nSep\n3,762.7\n \n12.9\n131.9\n318.8\n396.3\n396.3\nOct\n 3,964.5 \n11.8\n149.4\n334.9\n434.7\n151.0\nNov\n 3,551.4 \n12.0\n130.2\n347.7\n417.0\n154.4\nDec\n 4,167.9 \n11.0\n146.6\n411.3\n477.5\n213.3\n2016\nJan\n 3,385.9 \n11.1\n137.4\n331.5\n388.9\n167.7\nFeb\n 3,448.2 \n11.9\n138.8\n312.1\n389.3\n167.9\nMar\n 3,460.2 \n11.3\n142.1\n288.8\n417.1\n255.9\nApr\n 3,564.3 \n9.7\n180.1\n247.6\n427.3\n168.3\nMay\n 3,869.2 \n10.8\n214.8\n203.3\n479.9\n217.9\nJun\n 4,522.2 \n10.3\n203.9\n131.4\n465.1\n174.1\nJul\n 3,911.8 \n9.2\n240.0\n166.3\n491.2\n218.0\nAug\n 3,928.7 \n7.9\n238.0\n165.9\n535.4\n230.6\nSep\n 4,382.9 \n10.5\n237.3\n167.7\n533.9\n215.9\nOct\n 4,127.6 \n8.0\n322.8\n112.5\n524.5\n216.0\nSource:Reserve Bank of Zimbabwe, 2016\nTABLE 13.1 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY\nValues of Transactions (US$ millions)\n \n \n \n32 \n \n \n \n \n \n \n \nMONTH \nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2015\nJan\n170.8\n29.6\n 1,174.1 1,124.5 16,903.3 \n37.6\nFeb\n172.3\n32.2\n 1,140.9 1,027.9 16,160.4 \n39.9\nMar\n191.6\n30.3\n 1,183.6 1,110.2 18,211.9 \n44.5\nApr\n180.3\n27.0\n 1,151.3 1,107.5 17,269.7 \n43.6\nMay\n179.8\n27.4\n 1,052.5 1,123.8 18,684.6 \n43.2\nJun\n196.4\n31.9\n 1,121.2 1,038.2 17,478.2 \n47.2\nJul\n199.1\n34.0\n 1,288.2 1,167.4 18,670.4 \n49.4\nAug\n153.1\n28.1\n 1,373.5 1,122.2 19,750.6 \n46.5\nSep\n164.3\n31.1\n 1,196.9 1,103.9 19,133.2 \n50.4\nOct\n156.4\n30.8\n 1,295.0 1,152.8 22,166.4 \n54.0\nNov\n143.4\n32.2\n 1,206.2 1,151.3 21,390.2 \n51.3\nDec\n155.0\n27.2\n 1,359.9 1,183.6 22,904.3 \n52.6\nAnnual Total 2,062.6 \n361.7\n 14,543.3 13,413.3 228,723.3 \n560.2\n2016\nJan\n132.3\n24.6\n1328.9\n1104.4\n 19,956.1 \n49.9\nFeb\n148.4\n30.3\n1289.5\n1067.1\n 19,793.7 \n54.6\nMar\n152.5\n29.6\n1455.7\n962.9\n 21,731.5 \n61.9\nApr\n161.7\n25.0\n1962.6\n841.3\n 21,086.6 \n59.9\nMay\n199.3\n29.1\n2779.9\n675.8\n 23,293.0 \n83.2\nJun\n268.2\n33.5\n3203.8\n741.9\n 23,321.2 \n88.0\nJul\n242.4\n31.1\n3946.3\n1052.8\n 24,538.8 \n102.7\nAug\n253.9\n27.8\n4038.1\n1156.4\n 26,009.6 \n109.5\nSep\n288.5\n32.5\n4421.9\n1188.5\n 27,300.0 \n100.0\nOct\n296.0\n29.2\n6247.4\n1106.4\n 29,801.7 \n117.9\nSource:Reserve Bank of Zimbabwe, 2016\nTABLE 13.2 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL \nVolumes of Transactions (in thousands)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/MPC_Statements/October2016.pdf"}
{"doc_id": "33cc0c53d7e4f7a0adee822d4cff1885", "text": "Vol. 27 No. 24 \n \n \nWeek Ending \n13th June 2025 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 1 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n 1 \n1. OVERVIEW \n \nThis report provides a snapshot of the developments in the domestic monetary and financial sectors during the \nweek ending 13 June 2025. It features updates on the money and capital markets, national payment systems, \nexchange rates and international commodity prices. \nBoth foreign and local currency deposits rates remained unchanged at previous week levels, except for \nmaximum deposit rates for 1-month and 3-months tenor which increased. Minimum and maximum local \ncurrency lending rates for individual clients increased during the week under analysis. Meanwhile, minimum \nlocal currency lending rates for individual clients remained unchanged, while maximum lending rates \ndecreased. Foreign currency lending rates for both individual and corporate clients increased during the same \nweek. \nDuring the week ending 13th June 2025, both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls \nStock Exchange (VFEX) exhibited bearish sentiments. Resultantly, the ZSE and the VFEX all share indices \nlost 1.31% and 0.20% to close at 194.97 points and 107.39 points, respectively. \nThe aggregate transactions processed, in value terms, through the National Payment Systems platforms \ndecreased by 7.98% from ZiG43.53 billion to ZiG40.06 billion. The decline in NPS transactions was \nunderpinned by decreases in values processed through RTGS, POS, ATM, mobile banking, and ZIPIT mobile \npayment platforms. \nThe local currency, Zimbabwe Gold (ZiG) depreciated by 0.13%, on the interbank market, from an average \nof ZiG26.93 per US$1 recorded in the previous week, to ZiG26.97 per US$1 during the week ending 13th June \n2025. \nInternational weekly average prices for platinum, palladium and brent crude oil increased, while prices for \ngold, nickel and lithium retreated, during the week ending 13th June 2025. Platinum prices surged driven by \npersistent supply shortages of the metal in the market. Palladium prices increased, reflecting strong industrial \ndemand, from the automotive sectors, compounded by ongoing supply challenges. Brent crude oil prices \nsurged by 7.86%, fuelled by escalating tensions between Israel and Iran which sparked fears of possible \ndisruptions to crude oil supplies from the Middle East, a region that accounts for about one-third of the world’s \noil production. \nGold prices however, retreated during the week under analysis, attributed to renewed optimism over a potential \ntrade deal between the U.S and China, which prompted shifts in investor sentiment and market dynamics. \nLithium prices continued on a negative trajectory weighed down by ongoing concerns about oversupply with \nelevated inventory levels, coupled with slower-than-expected demand growth from key sectors such as electric \nvehicles and energy storage. Nickel prices decreased driven by oversupply in the market, stemming from a \nsharp increase in production in Indonesia, which currently contributes approximately 63% of global output. \nA total of 292.50 million kilograms of tobacco had been sold as of the 69th day of the 2025 tobacco marketing \nseason, marking a 43.88% increase from the 203.29 million kilograms sold during the same period in 2024. \nSales values rose by 39.65% to US$982.45 million in the reporting period, from US$703.50 million reported \nin the same period in 2024. The average price of the golden leaf was US$3.36 per kg during the reporting \nperiod, compared to US$3.46 per kg recorded in the same period in the prior year. \n \n 2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n23 May 2025 \n30 May 2025 \n06 June 2025 \n13 June 2025 \nSavings \n \n \n \n \nMinimum \n3.81 \n3.81 \n3.81 \n3.81 \nMaximum \n4.14 \n4.14 \n4.14 \n4.14 \n1-month deposit \n \n \n \n \nMinimum \n5.66 \n5.68 \n5.66 \n5.66 \nMaximum \n8.61 \n9.30 \n8.61 \n8.77 \n3-months deposit \n \n \n \n \nMinimum \n5.95 \n6.09 \n5.95 \n5.95 \nMaximum \n8.93 \n9.62 \n8.93 \n9.21 \n6-months deposit \n \n \n \n \nMinimum \n5.56 \n5.59 \n5.56 \n5.56 \nMaximum \n8.23 \n8.92 \n8.23 \n8.23 \n12-months deposit \n \n \n \n \nMinimum \n5.57 \n5.71 \n5.57 \n5.57 \nMaximum \n8.24 \n8.93 \n8.24 \n8.24 \nOver 1 year \n \n \n \n \nMinimum \n5.58 \n5.72 \n5.58 \n5.58 \nMaximum \n8.25 \n8.94 \n8.25 \n8.25 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n23 May 2025 \n30 May 2025 \n06 June 2025 \n13 June 2025 \nSavings \n \n \n \n \nMinimum \n1.67 \n1.67 \n1.67 \n1.67 \nMaximum \n1.86 \n1.86 \n1.86 \n1.86 \n1-month deposit \n \n \n \n \nMinimum \n3.72 \n3.94 \n3.72 \n3.72 \nMaximum \n5.67 \n5.94 \n5.67 \n5.72 \n3-month deposit \n \n \n \n \nMinimum \n4.38 \n4.33 \n4.38 \n4.38 \nMaximum \n6.53 \n6.32 \n6.53 \n6.70 \n6-month deposit \n \n \n \n \nMinimum \n4.18 \n4.47 \n4.18 \n4.18 \nMaximum \n6.71 \n7.11 \n6.71 \n6.71 \n12-Month deposit \n \n \n \n \nMinimum \n4.25 \n4.53 \n4.25 \n4.25 \nMaximum \n6.44 \n6.83 \n6.44 \n6.44 \nOver 1 year \n \n \n \n \nMinimum \n4.36 \n4.64 \n4.36 \n4.36 \nMaximum \n6.61 \n7.00 \n6.61 \n6.61 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n 3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n23 May 2025 \n30 May 2025 \n06 June 2025 \n13 June 2025 \nIndividuals \n \n \n \n \nMinimum \n42.23 \n43.66 \n42.25 \n42.29 \nMaximum \n47.94 \n48.93 \n47.98 \n48.01 \nCorporates \n \n \n \n \nMinimum \n40.27 \n40.27 \n40.42 \n40.42 \nMaximum \n46.69 \n46.51 \n46.68 \n46.40 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n23 May 2025 \n30 May 2025 \n06 June 2025 \n13 June 2025 \nIndividuals \n \n \n \n \nMinimum \n13.33 \n12.91 \n13.28 \n13.31 \nMaximum \n17.43 \n17.32 \n17.47 \n17.49 \nCorporates \n \n \n \n \nMinimum \n10.33 \n10.32 \n10.32 \n10.34 \nMaximum \n15.82 \n15.79 \n15.82 \n15.87 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending rates \n23 May 2025 \n30 May 2025 \n06 June 2025 \n13 June 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n22.00 \n22.00 \n22.00 \n22.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n3. EQUITY MARKETS \n \n \nZSE Indicators \n \n \nAll \nShare \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG \nbillion) \nMarket \nTurnover \n(ZiG \nmillion) \nVolume of \nShares \n(million) \n23-May-25 \n194.56 \n186.78 \n191.77 \n246.38 \n100.11 \n145.31 \n59.17 \n124.22 \n54.94 \n30-May-25 \n196.85 \n189.81 \n194.22 \n246.15 \n100.11 \n145.40 \n60.00 \n286.33 \n112.80 \n06-Jun-25 \n197.56 \n193.50 \n196.91 \n235.68 \n100.11 \n145.40 \n60.91 \n163.57 \n231.38 \n13-June-25 \n194.97 \n192.75 \n195.58 \n225.84 \n100.11 \n145.40 \n60.43 \n105.66 \n18.94 \nWeekly \nChange (%) \n-1.31 \n-0.39 \n-0.68 \n-4.18 \n0.00 \n0.00 \n-0.79 \n-35.40 \n-91.81 \nSource: Zimbabwe Stock Exchange, 2025 \n \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n23-May-25 \n109.74 \n1.28 \n0.59 \n1.95 \n30-May-25 \n107.24 \n1.25 \n1.47 \n13.23 \n06-Jun-25 \n107.60 \n1.25 \n0.23 \n1.37 \n13-Jun-25 \n107.39 \n1.25 \n1.45 \n4.42 \nWeekly \nChange (%) \n-0.20 \n-0.21 \n530.43 \n222.63 \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n 4 \n \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n \n10\n5010\n10010\n15010\n20010\n25010\n30010\n35010\n40010\n45010\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\nUS$ Thousand\nVFEX Market Turnover \nTrade\ndeal:\nFirst\nCapital Bank Limited\n(1,134.27\nmillion\nshares\nsold\nat\n(US$0.04\ncents\nper\nshare)\n1.1\n1.15\n1.2\n1.25\n1.3\n1.35\n1.4\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\nUS$ Billion\nVFEX Market Capitalisation \n0\n20,000\n40,000\n60,000\n80,000\n100,000\n120,000\n140,000\n160,000\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\nZiG Thousands\nZSE Market Turnover \nNotable trade deals: 97.69 million\nEconet Wireless Zimbabwe Limited\nshares,3.11 million OK Zimbabwe\nLimited shares, 3.06 million shares\nexchanged\nhands\nat\nZiG297.45\ncents/share,ZiG35.90cents/share\nand\nZiG12.53\ncents/share,\nrespectively\n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n40\n50\n60\n70\n80\n90\n100\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\nZiG Billion\nZSE Market Capitalisation \n95\n100\n105\n110\n115\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\nIndex\nVFEX All Share Index \n \n 5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n23 May 2025 \n30 May 2025 \n06 June 2025 \n13 June 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.52 \n1.50 \n1.50 \n1.50 \nPetrol Blend E20/ litre \n1.53 \n1.54 \n1.54 \n1.54 \nLP Gas / kg \n1.60 \n1.60 \n1.59 \n1.59 \n \n \n \n \n \nInternational Energy \nPrices (Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n64.53 \n64.38 \n \n65.00 \n70.11 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n09-Jun-25 \n3,339.90 \n2.75 \n3.04 \n0.1020 \n0.1127 \n10-Jun-25 \n3,319.30 \n2.73 \n3.02 \n0.1014 \n0.1121 \n11-Jun-25 \n3,337.70 \n2.75 \n3.04 \n0.1019 \n0.1127 \n12-Jun-25 \n3,329.70 \n2.74 \n3.03 \n0.1017 \n0.1124 \n13-Jun-25 \n3,391.40 \n2.79 \n3.09 \n0.1036 \n0.1145 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n06 June 2025 \nWEEK ENDING \n13 June 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n33,315,836,532.78 \n31,434,420,687.07 \n-5.56 \nOf which ZiG \n13,571,095,496.40 \n12,508,251,447.79 \n \nOf which US$ transactions \n(ZiG Equivalent) \n19,744,741,036.38 \n18,926,169,239.28 \n \n \nPOS \n3,678,145,996.94 \n2,659,897,153.06 \n-27.68 \nATM \n2,262,243,973.25 \n1,618,931,434.10 \n-28.44 \nMOBILE BANKING \n124,240,481.87 \n97,728,706.99 \n-21.34 \nMOBILE MONEY \n3,800,221,298.60 \n4,002,056,196.74 \n5.31 \nZIPIT MOBILE \n348,889,216.03 \n242,579,990.55 \n-30.47 \nTOTAL \n43,529,577,499.47 \n40,055,614,168.51 \n-7.98 \n \nVOLUMES \n \nRTGS \n206,064 \n167,631 \n-18.65 \nOf which ZiG \n82,664 \n68,534 \n \nOf which US$ \n123,400 \n99,097 \n \nPOS \n2,271,393 \n1,624,166 \n-28.49 \nATM \n256,681 \n178,746 \n-30.36 \nMOBILE BANKING \n248,624 \n168,651 \n-32.17 \nMOBILE MONEY \n11,735,294 \n11,948,962 \n1.82 \nZIPIT MOBILE \n322,884 \n229,574 \n-28.90 \nTOTAL \n15,040,940 \n14,317,730 \n-4.81 \n \n 6 \n \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n09-June-25 \n10-June-25 \n11-June-25 \n12-June-25 \n13-June-25 \n1.00Oz \n \n \n \n \n \nUS$ \n3,506.90 \n3,485.27 \n3,504.59 \n3,496.19 \n3,560.97 \nZiG \n94,519.59 \n93,956.82 \n94,508.84 \n94,309.40 \n96,063.58 \n0.50Oz \n \n \n \n \n \nUS$ \n1,753.45 \n1,742.63 \n1,752.29 \n1,748.09 \n1,780.49 \nZiG \n47,259.79 \n46,978.41 \n47,254.42 \n47,154.70 \n48,031.79 \n0.25Oz \n \n \n \n \n \nUS$ \n876.72 \n871.32 \n876.15 \n874.05 \n890.24 \nZiG \n23,629.90 \n23,489.20 \n23,627.21 \n23,577.35 \n24,015.89 \n0.10Oz \n \n \n \n \n \nUS$ \n350.69 \n348.53 \n350.46 \n349.62 \n356.10 \nZiG \n9,451.96 \n9,395.68 \n9,450.88 \n9,430.94 \n9,606.36 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(2 June-6 June) \n26.9303 \n1.5073 \n36.4275 \n2.0068 \n30.6992 \n09-June \n26.9525 \n1.5161 \n36.5315 \n2.0163 \n30.7730 \n10-June \n26.9583 \n1.5181 \n36.5003 \n2.0154 \n30.7500 \n11-June \n26.9672 \n1.5218 \n36.3636 \n2.0161 \n36.6300 \n12-June \n26.9749 \n1.5237 \n36.6300 \n2.0153 \n31.0559 \n13-June \n26.9768 \n1.5006 \n36.4964 \n2.0206 \n31.0559 \nWeekly Average \n(09 – 13 June) \n26.9659 \n1.5161 \n36.5044 \n2.0168 \n32.0530 \nAppr (-)/Depr (+) (%) of the \nZWG \n0.13 \n0.58 \n0.21 \n0.49 \n4.41 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(26 – 30 May) \n3,364.14 \n1,084.20 \n1,000.30 \n15,436.00 \n8,318.00 \n09-June \n3318.55 \n1202.00 \n1074.00 \n15421.00 \n8270.00 \n10-June \n3332.68 \n1213.50 \n1060.50 \n15318.00 \n8260.00 \n11-June \n3333.90 \n1266.50 \n1077.50 \n15177.00 \n8250.00 \n12-June \n3375.93 \n1260.00 \n1058.00 \n15142.00 \n8250.00 \n13-June \n3427.78 \n1258.50 \n1057.50 \n15128.00 \n8250.00 \nWeekly Average \n(09 – 13 June) \n3,357.77 \n1,240.10 \n1,065.50 \n15,237.20 \n8,256.00 \nWeekly change (%) \n-0.19 \n14.38 \n6.52 \n-1.29 \n-0.75 \nSource: BBC, KITCO and Bloomberg, 2025 \n \n 7 \n \nFigure 3: Weekly International Commodity Price Developments (28th March 2025– 13th June 2025) \n \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n2,900\n2,950\n3,000\n3,050\n3,100\n3,150\n3,200\n3,250\n3,300\n3,350\n3,400\n3,450\n3,500\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\nUS$/oz\nGold\n50\n55\n60\n65\n70\n75\n80\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\nUS$/barrel\nCrude oil \n880\n920\n960\n1,000\n1,040\n1,080\n1,120\n1,160\n1,200\n1,240\n1,280\n1,320\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\nUS$/tonne\nPlatinum\n14,000\n14,200\n14,400\n14,600\n14,800\n15,000\n15,200\n15,400\n15,600\n15,800\n16,000\n16,200\n16,400\n16,600\n16,800\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\nUS$/tonne\nNickel\n8,000\n8,300\n8,600\n8,900\n9,200\n9,500\n9,800\n10,100\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\nUS$/tonne\nLithium \n910\n920\n930\n940\n950\n960\n970\n980\n990\n1,000\n1,010\n1,020\n1,030\n1,040\n1,050\n1,060\n1,070\n1,080\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\nUS$/tonne\nPalladium\n \n 8 \n8. TOBACCO SALES \n \nWeekly Cumulative Tobacco Sales: Day 69 (13th June 2025) \n \n2025 \n2024 \nVariance (%) \nCumulative Quantity Sold (Kgs) \n292,501,135 \n203,290,423 \n43.88 \nAverage Price (US$/kg) \n3.36 \n3.46 \n-2.89 \nCumulative value (US$) \n982,445,253 \n703,497,321 \n39.65 \nSource: Tobacco Industry and Marketing Board (TIMB), 2025 \n \n \n \nRESERVE BANK OF ZIMBABWE \nJUNE 2025", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_13June_2025_Volume_27_Number_24_.pdf"}
{"doc_id": "00370906c0d3cea814c6178eb9ce53ab", "text": "Vol. 25 No. 23 \n \n \nWeek Ending \n9th June 2023 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ................................................................................................ 1 \n2. \nINTEREST RATES .................................................................................... 1 \n3. \nCLEARING AND SETTLEMENT ACTIVITY ...................................... 3 \n4. \nTOBACCO SALES ..................................................................................... 5 \n5. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ......... 5 \n6. \nEXCHANGE RATE DEVELOPMENTS ................................................. 7 \n7. \nEQUITY MARKETS.................................................................................. 7 \n8. \nGOLD COINS ........................................................................................... 12 \n \n \n \n \n \n1 \n1. \nOVERVIEW \n \nThis report provides a comprehensive update on the latest developments in the money and capital \nmarkets for the week ending 9 June 2023. The report also covers developments in the tobacco, \nmineral commodities, gold coins and stock markets during the week. The last section of the \nreport presents an analysis of domestic inflation developments. \n \nThe minimum and maximum deposit rates for domestic currency deposits remained unchanged \nat their previous week’s levels during the week ending 9 June 2023. The banks also maintained \nthe structure of deposit rates, short- and long-term deposits, paying higher rates on long-term \ndeposits. The value and volume of ZWL transactions processed through the National Payment \nSystem (NPS) increased, reflecting higher economic activities. The equity markets continued to \ngrow during the week under consideration. \n \nThe volume of tobacco sales as at the end of the week was 55.17% higher than the volume sold \nduring the same period in 2022. The turnover realized from the tobacco sales was 54.9% higher \nthan the US$505.07 million realized during the same period in 2022. \n \n2. \nINTEREST RATES \n \nLocal Currency (ZWL) Deposit Rates \n \nMinimum and maximum deposit rates for domestic currency deposits of all classes remained \nunchanged at their previous week’s levels during the week ending 9th June 2023. Banks \nmaintained higher deposit rates for the longer-term deposits to attract long-term savings needed \nfor lending. \n \n \nTable 1: Average Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit rates (%) \n \n3- Month deposit rates (%) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n12-May-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n19-May-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n26-May-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n2-Jun-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n9-Jun-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n2 \n \nLocal Currency (ZWL) Lending Rates \n \nThe minimum ZWL lending rates for both individuals and corporate borrowers were adjusted \nupwards during the week reflecting higher credit demand for the banks’ low-risk rated clients. \nThe maximum ZWL lending rates were reduced for both individuals and corporate borrowers, \nwhich is positive for the low-end segments of the market. The lending rates were as in Table 2. \n \nTable 2: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n12-May-23 \n75.21 \n106.24 \n85.82 \n168.68 \n19-May-23 \n71.91 \n100.67 \n102.96 \n162.50 \n26-May-23 \n70.02 \n102.96 \n85.40 \n168.68 \n2-Jun-23 \n70.87 \n103.16 \n86.45 \n168.78 \n9-Jun-23 \n72.49 \n102.12 \n88.01 \n167.75 \nSource: Reserve Bank of Zimbabwe, 2023 \n \nForeign Currency (USD) Deposit Rates \n \n \nThe minimum and maximum deposits rates for all classes of FCA deposits remained unchanged \nduring the week ending 9th June 2023, as shown in Table 3. The banks continued to offer higher \ndeposit rates on longer-term FCA deposits to attract long-term foreign currency deposits needed \nto support longer-term lending. \n \n \n \nTable 3: Average Foreign Currency Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit rates (%) \n \n3- Month deposit rates (%) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n12-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n19-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n26-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n2-Jun-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n9-Jun-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n3 \n \n \n \n \nForeign Currency (USD) Lending Rates \n \n \nDuring the week ending 9 June 2023, the USD minimum lending rates increased by 0.02 and \n0.46 percentage points for individuals and corporate clients, respectively. The increases reflect \nhigher demand for loans by the low low-risk clients of the banks. The maximum USD lending \nrates for individual borrowers were reduced by 0.08 percentage points while the maximum \nlending rates for the orate borrowers were increased by 0.19 percentage points during the week \nunder review as shown in Table 4. \n \nTable 4: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n12-May-23 \n11.32 \n12.95 \n8.28 \n14.44 \n19-May-23 \n11.35 \n13.32 \n7.64 \n14.48 \n26-May-23 \n11.34 \n13.12 \n7.95 \n14.52 \n2-Jun-23 \n11.37 \n13.04 \n8.02 \n14.60 \n9-Jun-23 \n11.39 \n12.96 \n8.48 \n14.79 \nSource: Reserve Bank of Zimbabwe, 2023 \n3. \nCLEARING AND SETTLEMENT ACTIVITY \n \nThe value of transactions processed through the National Payment System (NPS) increased \nduring the week under review from ZW$1.74 trillion in the previous week to ZW$2.36 trillion. \nThe Real Time Gross Settlement (RTGS) increased by 39.97% to ZW$2 trillion, during the \nweek. The distribution of the NPS transaction in value terms during the week ending 9 June 2023 \nwas distributed as shown in Figure 1. \n \n \n \n \n \n \n \n \n \n4 \n \n \n Figure 1: Composition of NPS Transactions in Value Terms \n \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n \nThe volume of transactions that went through the NPS during the week under review decreased \nby 3.977% to 12.07 million, reflecting higher economic activity. The lower ATM transaction \nvolumes registered during the week under analysis were partly attributable to Adowntimesmes. \nIn volume terms, the NPS transactions were distributed as shown in Figure 2. \n \n \n Figure 2: Composition of NPS Transactions in Volume Terms \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \nRTGS\n85.16%\nPOS\n6.78%\nATM\n2.71%\nMOBILE\n5.35%\nRTGS\nPOS\nATM\nMOBILE\nRTGS, 2.17%\nPOS, 23.26%\nATM, 1.19%\nMOBILE, 73.38%\nRTGS\nPOS\nATM\nMOBILE\n \n \n5 \nTable 5: National Payment Systems Activity \nPAYMENT \nSTREAM \nWEEK ENDING \n26th May 2023 \n \nWEEK ENDING \n \n2nd May 2023 \n% CHANGE FROM \nLAST WEEK \nPROPORTION \n% \n \nValues in ZW$ Millions \n \n \nRTGS \n1,433,365.50 \n2,006,243.53 \n39.97% \n82.60% \nPOS \n135,753.24 \n159,746.66 \n17.67% \n7.82% \nATM \n63,796.23 \n63,751.71 \n-0.07% \n3.68% \nMOBILE \n102,443.80 \n126,086.93 \n23.08% \n5.90% \nTOTAL \n1,735,358.99 \n2,355,828.84 \n35.75% \n100% \nVolumes \n \n \nRTGS \n312,547 \n262,493 \n-16.01% \n2.17% \nPOS \n2,895,014 \n2,807,194 \n-3.03% \n23.26% \nATM \n169,604 \n143,170 \n-15.59% \n1.19% \nMOBILE \n9,192,031 \n8,857,304 \n-3.64% \n73.38% \nTOTAL \n12,569,196 \n12,070,161 \n-3.97% \n100% \nSource: Reserve Bank of Zimbabwe, 2023 \n \n4. \nTOBACCO SALES \nA cumulative total of 259.10 million kilograms of tobacco had been sold as at 9th June 2023, the \n58th day of the tobacco selling season. The volume of tobacco sales represented a 55.17% \nincrease, compared to the 166.97 million kilograms sold during the same period in 2022. The \nturnover realized from the sales amounted to US$782.33 million and was 54.90% higher than \nthe US$505.07 million realized during the same period in 2022, as shown in Table 6. \n \nTable 6: Weekly Cumulative Tobacco Sales: Day 58 (9th June 2023) \n \n2022 \n2023 \nVariance (%) \nCumulative Quantity Sold (million kgs) \n166,973,588 \n259,098,162 \n55.64 \nAverage Price (US$/kg) \n3.02 \n \n3.02 \n-0.18 \nCumulative value (US$ million) \n475,552,777 \n782,334,436 \n54,90 \n Source: Tobacco Industry and Marketing Board (TIMB), 2023 \n \nThe golden leaf was sold at an average price of US$3.02/kg, during the week under review, up \nfrom US$3.01/kg realized during the same period in 2022. \n5. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS \n \nDuring the week ending 9th June 2023, weekly average international prices for gold and \npalladium remained bearish and marginally eased, while platinum, copper, nickel, and crude oil \nrallied from their previous week’s levels. Table 7 shows developments in prices for selected \ncommodities during the week under review. \n \n \n \n6 \nTable 7: Metal and Crude Oil Prices for the week ending 2nd June 2023 \n \nGold \nPlatinum \nPalladium \nCopper \nNickel \nCrude Oil \n2023 \nUS$/ounce \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nUS$/barrel \nWeekly Average (29 May -02 \nJune) \n1,960.87 \n1,017.30 \n1,410.10 \n8,163.20 \n21,019.00 \n75.02 \n05-June \n1,950.75 \n1,011.50 \n1,417.50 \n8,361.00 \n21,020.00 \n76.54 \n06-June \n1,959.58 \n1,027.00 \n1,407.50 \n8,293.00 \n21,189.00 \n75.89 \n07-June \n1,965.20 \n1,038.50 \n1,414.00 \n8,270.00 \n21,155.00 \n76.25 \n08-June \n1,956.83 \n1,023.00 \n1,381.00 \n8,330.00 \n21,110.00 \n75.70 \n09-June \n1,961.93 \n1,007.00 \n1,337.50 \n8,323.00 \n21,155.00 \n73.73 \nWeekly Average (05- 09 June) \n1,958.86 \n1,021.40 \n1,391.50 \n8,315.40 \n21,125.80 \n75.60 \nWeekly Change (%) \n-0,10 \n0,40 \n-1,32 \n1,86 \n0,51 \n0,78 \nSource: BBC, KITCO and Bloomberg 2023 \n \nGold \n \nDuring the week ending 9th June 2023, gold prices declined by 0.10% to US$1,958.86 per ounce \nfrom US$1,960.87 per ounce in the previous week. Prices were weighed down by an uptick in \nU.S. bond yields as well as a strengthening US dollar. The decline was, however, marginal as \ninvestors awaited inflation data and the outcome of the upcoming Federal Reserve policy \nmeeting for more clarity on the U.S. interest rate path. \n \nPlatinum \nPlatinum prices rose by a marginal 0.40%, from an average of US$1,017.30 per ounce in the \nprevious week to US$1,021.40 per ounce during the week under review. Prices continued to get \nsupport supply shortages owing to power-related disruptions in top producer, South Africa \n \nPalladium \nMeanwhile, palladium prices slumped by 1.32% from a weekly average of US$1,410.10 per \nounce in the previous week to US$1,391.50 per ounce. Palladium prices remained bearish owing \nto weak global industrial demand particularly in the auto sector. \n \nCopper \nCopper prices continued on a positive trajectory following signs of dwindling inventories, \nparticularly in China, the world’s largest metals consumer. Resultantly, the red metal’s prices \nincreased by 1.86%, from an average of US$8,163.20 per tonne to US$8,315.40 per tonne during \nthe week ending 9th June 2023. Prices are, however, expected to remain rangebound before the \nannouncement of the Fed’s rate decision. \n \n \n \n7 \n \nNickel \nNickel prices marginally rose by 0.51% from US$21,019.00 per tonne to US$21,125.80 per \ntonne, supported by robust demand from China and supply disruptions in Indonesia, which have \nlimited global supply. \nBrent Crude Oil \nDuring the week ending 9th June 2023, crude oil average prices rebounded by 0.78% to \nUS$75.60 per barrel, from US$75.02 per barrel recorded in the previous week. Prices recovered \nfollowing an announcement by Saudi Arabia to cut production by one million barrels a day. This \ndevelopment more than offset demand woes stemming from recession fears. \n \n6. EXCHANGE RATE DEVELOPMENTS \n \n \nInterbank Market \nThe Zimbabwe dollar (ZW$) depreciated on the interbank market by 62%, from an average of \nZW$2,362.54 per US$1 in the previous week to ZW$3,825.12 per US$1, during the week under \nreview, as is shown in Table 8. \n \nTable 8: Selected Exchange Rates (ZW$ per unit of foreign currency) \n2023 \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average (29-02 June) \n 2,362.5449 \n 120.6822 \n2,933.2617 \n 171.1219 \n 2,531.1155 \n05-June \n 2,727.0405 \n 139.8601 \n 3,389.4512 \n 198.2010 \n 2,916.9851 \n06-June \n 2,769.9366 \n 144.9275 \n 3,446.7762 \n 201.3092 \n 2,970.7795 \n07-June \n 3,673.7718 \n 192.3077 \n 4,562.2861 \n 266.9540 \n 3,925.9804 \n08-June \n 4,868.5152 \n 259.7403 \n 6,065.9298 \n 357.3691 \n 5,216.8608 \n09-June \n 5,086.3307 \n 273.9726 \n 6,383.6114 \n 375.9524 \n 5,482.8222 \nWeekly Average (05-09 June) \n 3,825.1190 \n 202.1616 \n 4,769.6109 \n 279.9571 \n 4,102.6856 \nAppr (-)/Depr (+) (%) of the ZWL \n61,9 \n67,5 \n62,6 \n63,6 \n62,1 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n7. EQUITY MARKETS \n \n \nZimbabwe Stock Exchange \n \nDuring the week ending 9th June 2023, the Zimbabwe Stock Exchange (ZSE) maintained a \npositive momentum for the eighth consecutive week with the ZSE All Share index gaining \n56.06% to close the week at 175 785.58 points. \n \n \n8 \n \nThe Top 10, Top 15, and Medium Cap increased by 63.39%, 60.22%, 33.31% and 8.16% to \nclose the week at 110 293.27 points, 127 407.23 points, 293 876.79 points respectively. \n \nThe rise in the mainstream index was a result of share price gains in CBZ Holdings Limited \n(101.05%), British American Tobacco Zimbabwe Limited (BAT) (75.09%), ZB Financial \nHoldings Limited (74.05%), Meikles Limited (73.45%) and Delta Corporation Limited \n(71.90%). \n \nPartially offsetting the aforementioned increases were declines in share prices of Zimbabwe \nNewspapers (1980) Limited (26.80%) and Ariston Holdings Limited (5.06%).The increase in \nthe resource index emanated from a 14.28 % increase in RioZim Limited’s share price during \nthe week under review. \n \nTable 8: Zimbabwe Stock Exchange Statistics1 \n \nAll Share \nIndex \nPoints \nTop 10 \nindex3 \n(points) \n \n \n \nMining \nIndex \n(points) \nGrand \nMarket \nCapitalizat\nion (ZWL \nbillion) \nMarket \nTurnove\nr (ZWL \nmillion) \nThe \nvolume \nof \nShares \n(million) \nTop 15 \nIndex3 \npoints \nMedium \nCap3 \n(points) \nSmall Cap3 \n(points) \n \n \n \n29-May-23 \n99,900.00 \n60,847.16 \n28,301.73 \n179,839.67 \n1,026,751.26 \n46,035.02 \n8,275.92 \n2,015.86 \n33,85 \n30-May-23 \n104,183.78 \n63,745.45 \n34,558.62 \n190,360.21 \n1,023 904.93 \n52,765.85 \n8,745.92 \n2,830.79 \n9,60 \n31-May-23 \n108,195.28 \n65,893.9 \n44,713.63 \n200,948.99 \n1,024,954.59 \n52,765.85 \n8,939,06 \n2,989.59 \n20,05 \n1-Jun-23 \n111,427.57 \n67,489.32 \n59 422.95 \n211,205.84 \n1,061,229.76 \n51,236.83 \n9,426.65 \n1,922.75 \n3,11 \n2-June-23 \n112,615.44 \n67,504.61 \n59 422.95 \n220,449.67 \n1,061,229.76 \n50,946.71 \n9,426.65 \n6.682.22 \n80.84 \n9-June-23 \n175,785.58 \n110,293.2\n7 \n127,407.2\n3 \n293,876.79 \n1,001,260.16 \n58,223.29 \n14,618.47 \n41,049.5\n9 \n75,40 \n% Change \n56.09 \n63.39 \n60.22 \n33.31 \n-5.65 \n14.28 \n55.08 \n149.67 \n-6.73 \nSource: Zimbabwe Stock Exchange (ZSE), 2023 \n \n \n \n \n \n \n \n1 The Zimbabwe Stock Exchange (ZSE) adopted the Global Industry Classification Standards, effective from 1 January 2020.The ZSE indices \nconstitute the following categories; Top 10 Index; Top 15; Top 25; Medium cap and Small cap Indices. \n \n \n \n \n9 \nFigure 3 shows the trend in daily market turnover for the period from 27th April 2022 to 9th \nJune 2023. \n \n \nFigure 3: Zimbabwe Stock Exchange All Share and Top 10 Indices \nSource: Zimbabwe Stock Exchange, 2023 \n \n \n \nMarket Turnover and Volume \n \n \nThe cumulative value of shares traded increased by 149.67% to ZW$41.05 billion, despite a \ndecline of 6.73% in the volume of shares traded, amounting to 75.40 million shares. Figure 4 \nshows the trend in daily market turnover for the period from 21st May 2022 to 9th June 2023. \n \n Figure 4: Daily Market Turnover \n \nSource: Zimbabwe Stock Exchange, 2023 \n \n \n \n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\n90,000\n100,000\n27-Apr-22\n21-May-22\n14-Jun-22\n8-Jul-22\n1-Aug-22\n25-Aug-22\n18-Sep-22\n12-Oct-22\n5-Nov-22\n29-Nov-22\n23-Dec-22\n16-Jan-23\n9-Feb-23\n5-Mar-23\n29-Mar-23\n22-Apr-23\n16-May-23\n9-Jun-23\nAll Share Index\nTop 10 Index\n0\n2,000\n4,000\n6,000\n8,000\n10,000\n12,000\n14,000\n16,000\n18,000\n20,000\n21-May-22\n14-Jun-22\n08-Jul-22\n01-Aug-22\n25-Aug-22\n18-Sep-22\n12-Oct-22\n05-Nov-22\n29-Nov-22\n23-Dec-22\n16-Jan-23\n09-Feb-23\n05-Mar-23\n29-Mar-23\n22-Apr-23\n16-May-23\n09-Jun-23\nZW$ millions\nNegotiated deal: 61.16 million Larfage\nCement\nZimbabwe\nLimited\nshares\nexchanged hands at ZW$312.65\nBlock \nTrade: \n19.34 \nmillion \nHippo Valley Estates Limited \nshares \nexchanged \nhands \nat \nZW$247.85/share\nNotable Trades: 31.45 million Ariston \nHoldings Limited shares and 4.26 million \nDelta Holdings Limited shares exchanged \nhands \nat \nZW$15.02/share \nand \nZW$4077/share, respectively. \n \n \n10 \nMarket Capitalization \n \n \nReflecting improved trading activity on the ZSE, largely informed by heightened speculative \ntendencies, market capitalization increased by 55.08%, or ZW$5 191.83 billion worth of \ncapitalization to close at ZW$14 618.85 billion, compared to the previous week’s position of \nZW$9 426.65 billion. Figure 5 shows ZSE market capitalization developments for the period \nfrom 27th April 2022 to 9th June 2023. \n \nFigure 5: Daily Market Capitalization in ZW$ billions \nSource: Zimbabwe Stock Exchange, 2023 \n \n \nVictoria Falls Stock Exchange \n \n \nThe Victoria Falls Stock Exchange (VFEX) was characterised by bearish trading during the week \nending 9th June 2023. Resultantly, the VFEX All Share index lost 0.06% to close at 80.18 points, \ncompared to 80.22 points recorded in the previous week. \n \nThe decline in the VFEX mainstream index was a result of share price losses in First Capital \nBank Limited (23.53%), Africa Sun Limited (7.18%), Axia Corporation Limited (0.62%) and \nPadenga Holdings Limited (0.27%) \n \nPartially offsetting the abovementioned share price losses were gains in the share prices of \nInnscor Africa Limited (6.82%) and Simbisa Brands Limited (1.97%). \n \nThe VFEX cumulative volume and value of shares traded increased by 23.99% and 86.25% to \n2.28 million shares and US$1.09 million. This is in comparison to 1.83 million shares and US$ \n0\n1,000\n2,000\n3,000\n4,000\n5,000\n6,000\n7,000\n8,000\n9,000\n10,000\n27-Apr-22\n21-May-22\n14-Jun-22\n08-Jul-22\n01-Aug-22\n25-Aug-22\n18-Sep-22\n12-Oct-22\n05-Nov-22\n29-Nov-22\n23-Dec-22\n16-Jan-23\n09-Feb-23\n05-Mar-23\n29-Mar-23\n22-Apr-23\n16-May-23\n09-Jun-23\nBillions\n \n \n11 \n0.58 million registered in the previous week, respectively. Market capitalization, declined by \n0.06%, or US$0.75 million worth of capitalization to close at US$1.35 billion, from US$1.35 \nbillion registered in the previous week. Figure 6 shows the trend in the VFEX All Share Index \n(ASI) for the period from 27th April 2022 to 9th June 2023. \n \nFigure 6: Victoria Falls Stock Exchange All Share Index \nSource: Victoria Falls Stock Exchange, 2023 \n \n \n \nJohannesburg Stock Exchange (JSE) Developments \n \nThe Johannesburg Stock Exchange (JSE) All-share index was 0.25% lower to close at 76,936.11 \npoints during the week under analysis. JSE market capitalization also decreased by 1.46% to \nclose at ZAR21.82 trillion during the same period. \n \n \nTable 9: Johannesburg Stock Exchange (JSE) Statistics \nPeriod \nAll Share Index \nMarket Capitalization \n(points) \n(ZAR trillions) \n29-May-23 \n76,613.35 \n22.36 \n30-May-23 \n75,939.46 \n22.34 \n31-May-23 \n75067.47 \n22.35 \n1-June-23 \n75783.25 \n22.49 \n2-June-23 \n77,126.06 \n21.97 \n9-June-23 \n76,936.11 \n21.65 \n% Change \n-0.25 \n-1.46 \nSource:https://www.jse.co.za/services/market-data/market-statistics, 2023 \n \n \n \n \n \n70.00\n80.00\n90.00\n100.00\n110.00\n120.00\n130.00\n140.00\n150.00\n27-Apr-22\n21-May-22\n14-Jun-22\n08-Jul-22\n01-Aug-22\n25-Aug-22\n18-Sep-22\n12-Oct-22\n05-Nov-22\n29-Nov-22\n23-Dec-22\n16-Jan-23\n09-Feb-23\n05-Mar-23\n29-Mar-23\n22-Apr-23\n16-May-23\n09-Jun-23\n \n \n12 \nFigure 7: Johannesburg Stock Exchange (JSE) All Share Index \nSource:https://www.jse.co.za/services/market-data/market-statistics,2023 \n \n \n \n \n8. \nGOLD COINS \n \n A total amount of ZW$42.4 billion had been purchased in respect of the gold-backed digital \ncoins by the 9th of June 2023. \n \nTable 10: Digital Gold-Backed Coin Purchases (Volume and Value) As at 09 June 2023 \n \n \n \n \n \n \n \n 60.00\n 65.00\n 70.00\n 75.00\n 80.00\n 85.00\n14-May-22\n7-Jun-22\n1-Jul-22\n25-Jul-22\n18-Aug-22\n11-Sep-22\n5-Oct-22\n29-Oct-22\n22-Nov-22\n16-Dec-22\n9-Jan-23\n2-Feb-23\n26-Feb-23\n22-Mar-23\n15-Apr-23\n9-May-23\n2-Jun-23\n \nDate \nNumber \nof Bids \nReceived \nValue of Bids \nReceived \nAmount Allotted \nPrice per \nMilligram of \nGold \n \n \n \nZWL \n \n \nRBZ GOLD-BACKED DIGITAL \nTOKENS ISSUE NO. 2/2023 \n 18-May-23 \n104 \n8,063,137,030 \n8,063,137,030 \n112,6 \nRBZ GOLD-BACKED DIGITAL \nTOKENS ISSUE NO. 3/2023 \n 26-May-23 \n105 \n8,500,033,263 \n8,500,033,263 \n152,46 \nRBZ GOLD-BACKED DIGITAL \nTOKENS ISSUE NO. 4/2023 \n 01-Jun-23 \n59 \n4,516,617,361 \n4,516,617,361 \n207,79 \nRBZ GOLD-BACKED DIGITAL \nTOKENS ISSUE NO. 5/2023 \n 08-Jun-23 \n61 \n7,214,378,573 \n7,214,378,573 \n388,01 \nTotal ZWL \n \n461 \n42,371,503,648 \n42,371,503,648 \n \n \n \n13 \n9. \nRECENT EXCHANGE RATE AND INFLATION DYNAMICS \n \n \nThe economy continues to exhibit strong external sector fundamentals as evidenced by persistent \nbalance of payments current account surpluses being registered since 2019 and balanced fiscal \nperformance since 2020. Given the above, the significant depreciation of the local currency \nwitnessed since March 2023 is largely decoupled from conventional economic fundamentals as \nit was also influenced by other dual currency-related dynamics Zimbabwe. \n \nIn a normal mono-currency environment, currency instability usually emanates from structural \nweaknesses in the economy that include unsustainable fiscal and current accounts deficits. The \nresultant monetization of fiscal deficits through financing from the central bank would then \ndestabilize the exchange rate through excessive financial market liquidity. Similarly, \nunsustainable current account deficits may lead to foreign currency shortages that exert pressure \non the exchange rate to depreciate. In addition, high dependency by a country on primary \ncommodities without adequate foreign reserves exposes the exchange rate to adverse external \nshocks and to speculative attacks by rent-seeking. \n \nContrary to the afore-described conventional causes of currency instability, the country’s fiscal \nposition has been sustainably maintained at deficits of below 3% with no recourse to Central \nBank financing since 2020. Similarly, the country has been experiencing favourable external \nbalance as shown by current account surpluses registered since 2019 to date. Precisely, the \ncountry registered foreign currency inflows amounting to US$11.6 billion in 2022, which is the \nhighest in history. Economic growth prospects for the country are positive with growth estimated \nto surpass the initial growth projection underpinning the 2023 National budget of 3.8% in 2023. \nDiaspora remittances have been performing well and outweighing increases in imports to support \ngrowth in manufacturing capacity utilization estimated at 56% in 2022. \n \nThe country also continues to pursue a tight monetary policy stance since the last half of 2022, \nwith moderate increases in the local component of the money supply. Relatedly, the growth in \nlending in local currency has been low since January 2023 which shows that the monetary \nconditions remain tight. Traditionally, the movements in the exchange rate in Zimbabwe have \nbeen closely related to the movements in the local currency component of the money supply. \nThis, notwithstanding, the recent currency instability saw the exchange rate sharply depreciating \nin the face of a merely moderate and normal increase in the local currency component of the \n \n \n14 \nmoney supply. This, somewhat, suggests a possible decoupling of dual currency exchange \ndynamics from money supply growth as shown in Figure 8. \n \nFigure 8: Money Supply and Exchange Rate Developments \n \n \nThe historically observed money supply-exchange rate nexus, therefore, suggests that the \nexchange rate should be much lower at around half of what has been observed in the market. \nThus, the current official and parallel exchange rates have overshot their equilibrium levels and \nare expected to appreciate or at the very least remain stable in the foreseeable future. \n \nGiven the above, the considered view of the Bank is that the current volatility in the exchange \nrate reflects the inherent challenges associated with a dual currency system. In a dual currency \nsystem, economic agents trade in both the USD and the local currency. Foreign currency is \ndemanded for settling both external and domestic transactions and for store-of-value while under \na mono-currency system, foreign currency is mainly reserved for external transactions. Hence \nthe demand for foreign currency under a dual currency system is insatiably high. \n \nOn the supply side, the country experienced a decline in foreign currency receipts due to external \nshocks (declining commodity prices) of key minerals such as the Platinum Group of Metals \n(PGMs) during the period under review. Although the PGMs prices are yet to reverse, the net \neffect on trade flows has since been significantly moderated by the coming in of lithium exports \nand the softening of global petroleum, fertiliser, and other import prices. \n \n0\n100\n200\n300\n400\n500\n600\n700\nAnnual Growth of ZWL Component of M3\nAnnual Depreciation\n \n \n15 \nIt was also observed during the period under review that the quoting of abnormally depreciated \nexchange rates to discourage sales in local currency by some businesses also exerted pressure on \nthe local unit. This came in the form of a sudden decline in the demand for local currency due to \nthe implicit rejection and an equivalent increase in demand for foreign currency for settling \ndomestic transactions. Given, the hysteresis of yesteryear’s hyperinflation, this perpetuated the \nself-fulfilling negative inflation and exchange rate expectations. \n \nGiven that the current exchange rate volatility is not driven by structural factors and persistent \nmoney supply growth, the Bank is aptly confident that the worst patch is over. In addition, the \nrecent measures instituted by the Bank, which include the introduction of the wholesale foreign \nexchange market to address transitory foreign exchange liquidity in the market and the rolling \nout of the second phase of the gold-backed digital coins are expected to buttress exchange rate \nstability in the near to short term. Precisely, intervening in the foreign exchange market through \nthe wholesale auction system is already exerting a dual effect of mopping up excess liquidity and \nre-establishing the optimal mix of the dual currencies, thus ensuing exchange rate stability. Given \nthe above, the Bank encourages all stakeholders, notably retailers, service providers and \nGovernment in all its tiers to accept payments in local currency going forward to boost its \ndemand, critical for fostering exchange rate stability. \n \n \n \n \nRESERVE BANK OF ZIMBABWE \n \n \n16 \n APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR MAINFX2 AND SMEFX 3 \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n2 Main Foreign Currency Auction \n3 Small and Medium Enterprises Foreign Currency Auction \n \nMAINFX \n19-May-23 26-May-23 2-June-2 9-June-23 \n \n SMEFX \n19-May-23 26-May-23 2-June-23 9-June-23 \nTotal \nBids (US$ dollars) \n26,816,031.89 \n54,243,996.14 \n39, 022,401.47 \n22,581,743.16 \n3,558,737.72 \n6,110,283.97 \n4 862 990,77 \n2800317,72 \nAmount Allotted \n(US$ dollars) \n13,171,159.91 \n13,209,099.47 \n13,483,681.07 \n4,158,013,57 \n1,273,163.40 \n957,712.91 \n1 782 414,85 \n829 418,77 \nHighest Rate \n1,600 \n2,001 \n3000,00 \n4,100,00 \n1,525 \n2,100 \n3,100 \n4,100 \nLowest Bid \nRate \n1,351 \n1,801 \n2,500,00 \n3,555,00 \n1,351 \n1,801 \n2,500 \n3,500 \nLowest Bid Rate \nAllotted \n1,351 \n1,801 \n2500,00 \n3,555,00 \n1,351 \n1,801 \n2,500 \n3,500 \nWeighted Average \nRate \n1,404.8039 \n1,888.0119 \n2 577,06 \n3 673,77 \n1,404.8039 \n1,888.0119 \n2,577,06 \n3,673,77 \nNumber of Bids \nReceived \n490 \n469 \n344 \n210 \n569 \n674 \n503 \n298 \nNumber of Bids \nRejected \n7 \n2 \n6 \n5 \n15 \n29 \n2 \n6 \n \n \n17 \n APPENDIX 2: SUMMARY OF FOREIGN CURRENCY AUCTION ALLOTMENTS BY PURPOSE \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nPurpose \nMAINFX \n 19-May-23 26-May-23 2-June-23 9-June-23 \nSMEFX \n19-May-23 26-May-23 2-June-23 9-June-23 \nRaw Materials \n \n7,007,641.38 \n6,799,034.39 \n7,307,910,47 \n2,252,804.85 \n350,687.48 \n288,375.10 \n561,675.79 \n345,922.07 \nMachinery and \nEquipment \n1,926,117.50 \n2,184,686.84 \n1,943,805.17 \n254,261.37 \n415,614.30 \n318,256.50 \n592,242.46 \n260,143.22 \nConsumables \n(Incl. Spares, \nTyres, \nPackaging) \n1,001,696.74 \n778,350.98 \n1,031,283.36 \n105,661.54 \n202,560.71 \n109,719.60 \n180,940.94 \n73,965.28 \nPharmaceuticals \nand Chemicals \n341,262.52 \n401,843.00 \n722,581.17 \n149,967.54 \n62,647.17 \n19,949.30 \n60,805.16 \n38,892.52 \nServices \n(Loans, \nDividends and \nDisinvestments) \n983,240.01 \n552,310.76 \n693,493.70 \n812,609.16 \n100,494.32 \n98,780.03 \n172,061.28 \n84,175.30 \nRetail and \nDistribution \n1,514,194.61 \n \n1,532,656,21 \n200,497.47 \n125,715.23 \n95,177.70 \n151,223.78 \n20,946.22 \nFuel, Electricity \nand Gas \n- \n- \n- \n \n- \n- \n- \n- \nPaper and \nPackaging \n397,007.15 \n788,269.34 \n251,950.99 \n381,211.65 \n15,444.19 \n27,454.68 \n- \n- \nTOTAL \n13,171,159.91 13,209,099.47 13,483,681.07 \n4,158,013.57 \n2,280,785.72 \n1,576,700.13 \n1,273,163.40 \n957,712.91", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_09_June_2023_Volume_26.pdf"}
{"doc_id": "09234cd45b31c21ccbcbe8e8ab711d56", "text": "Monetary Policy Review\nJune 2013\nSouth African Reserve Bank\nMonetary Policy Review\nJune 2013\nMonetary Policy Review June 2013\n© South African Reserve Bank\nAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by \nany means, electronic, mechanical, photocopying, recording or otherwise, without fully acknowledging the Monetary Policy \nReview of the South African Reserve Bank as the source. The contents of this publication are intended for general information \nonly and are not intended to serve as financial or other advice. While every precaution is taken to ensure the accuracy of \ninformation, the South African Reserve Bank shall not be liable to any person for inaccurate information or opinions contained \nin this publication.\nEnquiries relating to this Review should be addressed to:\n\t\nHead: Research Department\n\t\nResearch Department\n\t\nSouth African Reserve Bank\n\t\nP O Box 427\n\t\nPretoria 0001\n\t\nTel. 27 12 313-3668\nhttp://www.reservebank.co.za\t\n\t\n\t\n\t\n\t\n\t\n ISSN: 1609-3194\nMonetary Policy Review June 2013\nPreface\nThe primary mandate of the South African Reserve Bank (the Bank) is to achieve and maintain \nprice stability in the interest of balanced and sustainable economic growth. Low inflation helps \nto protect the purchasing power and living standards of all South Africans, and provides a \nfavourable environment for growth and employment creation. In addition, the Bank has a \ncomplementary mandate to oversee and maintain financial stability.\nPrice stability is quantified by the setting of an inflation target range by government after \nconsultation with the Bank. The commitment is to pursue a continuous target of 3 to 6 per cent \nfor headline CPI inflation. The Bank conducts monetary policy within a flexible inflation-targeting \nframework that allows for inflation to be temporarily outside the target range as a result of supply \nshocks. The Bank’s Monetary Policy Committee (MPC) takes into account a viable medium-term \ntime horizon for inflation to return to within the target range, and considers the lags between \npolicy adjustments and economic effects. This provides for interest rate smoothing over the \ncycle, and makes economic growth more sustained and consistent.\nThe Monetary Policy Review (MPR) is published twice a year, and is aimed at broadening the \nunderstanding of the objectives and conduct of monetary policy. The MPR reviews domestic \nand international developments that have impacted on inflation, and that motivate the monetary \npolicy stance. The MPR also provides an assessment of the outlook for and the factors \ndetermining inflation, and the Bank’s forecast of the future path of inflation and economic \ngrowth. The MPR is presented by senior officials of the Bank at Monetary Policy Forums (MPFs) \nin various centres across South Africa to develop a better understanding of monetary policy \nthrough interaction with stakeholders.\nMonetary Policy Review June 2013\nContents\nMonetary Policy Review\nIntroduction .............................................................................................................................\t\n1\nRecent developments in inflation................................................................................................\t\n2\n\t\nThe evolution of inflation indicators .....................................................................................\t\n2\n\t\n\t\nTargeted inflation..........................................................................................................\t\n2\n\t\n\t\nFood prices..................................................................................................................\t\n4\n\t\n\t\nPetrol prices.................................................................................................................\t\n5\n\t\n\t\nCore inflation................................................................................................................\t\n6\n\t\n\t\nAdministered prices.....................................................................................................\t\n7\n\t\n\t\nProducer prices...........................................................................................................\t\n8\nInternational economic policy developments..............................................................................\t 14\n\t\nInternational economic developments.................................................................................\t 14\n\t\n\t\nMultispeed global growth.............................................................................................\t 14\n\t\n\t\nGrowth in advanced economies..................................................................................\t 15\n\t\n\t\nEmerging and developing economies..........................................................................\t 17\n\t\n\t\nCommodity prices and global inflation.........................................................................\t 17\n\t\n\t\nFiscal trends.................................................................................................................\t 18\n\t\nOil price developments........................................................................................................\t 18\n\t\nInternational monetary policy developments........................................................................\t 19\n\t\n\t\nPolicy in advanced economies.....................................................................................\t 20\n\t\n\t\nPolicy in emerging-market economies.........................................................................\t 22\nDomestic economic developments and growth outlook.............................................................\t 22\n\t\nExchange rate developments .............................................................................................\t 22\n\t\nLabour markets ..................................................................................................................\t 26\n\t\nReal-estate and equity prices..............................................................................................\t 29\n\t\nFiscal policy ........................................................................................................................\t 31\n\t\nMonetary conditions ...........................................................................................................\t 32\n\t\nDemand, output and expected growth................................................................................\t 33\nMonetary policy..........................................................................................................................\t 40\n\t\n\t\nGlobal factors...............................................................................................................\t 41\n\t\n\t\nDomestic factors..........................................................................................................\t 42\n\t\n\t\nInflation forecasts.........................................................................................................\t 43\n\t\n\t\nRisks to the outlook.....................................................................................................\t 44\nExpectations and the Bank’s inflation forecast............................................................................\t 48\n\t\nIndicators of inflation expectations.......................................................................................\t 48\n\t\nThe South African Reserve Bank inflation forecast..............................................................\t 50\nAssessment and conclusion.......................................................................................................\t 51\nStatements issued by Gill Marcus, Governor of the South African Reserve Bank\nStatement of the Monetary Policy Committee\n22 November 2012.....................................................................................................................\t 52\nStatement of the Monetary Policy Committee\n24 January 2013.........................................................................................................................\t 57\nStatement of the Monetary Policy Committee\n20 March 2013............................................................................................................................\t 61\nStatement of the Monetary Policy Committee\n23 May 2013...............................................................................................................................\t 65\nAbbreviations and glossary.......................................................................................................\t 69\nBoxes \n1\t\nChanges to the consumer price index ..........................................................................\t\n10\n2 \t\nMonetary policy and various measures of inflation.........................................................\t\n12\n3\t\nAn accuracy analysis of real gross domestic product growth forecasts.........................\t\n37\n4\t\nThe role of the repurchase rate and the prime rate in the transmission of \n\t\nmonetary policy................................................................................................................. \t\n45\nFigures \n1 \t\nConsumer price inflation: Targeted inflation .....................................................................\t\n3\n2 \t\nTargeted inflation and food inflation..................................................................................\t\n4\n3 \t\nSelected commodity prices..............................................................................................\t\n5\nMonetary Policy Review June 2013\n4 \t\nSouth African petrol price.................................................................................................\t\n6\n5 \t\nThe effect of food, petrol, energy and volatile prices on headline inflation ........................\t\n7\n6 \t\nFood prices in the PPI and CPI.........................................................................................\t\n9\nB1.1\t\nElectricity and petrol prices..............................................................................................\t 11\nB1.2\t\nInflation forecast with changes to CPI...............................................................................\t 11\nB2.1\t\nHeadline inflation and exclusion-based core measures....................................................\t 12\nB2.2\t\nComparison of main inflation measures............................................................................\t 13\nB2.3\t\nComparison of long-run measures of inflation..................................................................\t 13\nB2.4\t\nGap analysis.....................................................................................................................\t 14\n7 \t\nEvolution of real GDP forecasts for 2013 for the G-7 and euro area..................................\t 15\n8 \t\nSelected OECD indicators of global economic activity.....................................................\t 17\n9 \t\nPrice of Brent crude oil.....................................................................................................\t 19\n10 \t\nExchange rate performance against the US dollar............................................................\t 23\n11 \t\nBilateral exchange rates of the rand..................................................................................\t 23\n12 \t\nSovereign risk spreads.....................................................................................................\t 24\n13 \t\nNon-resident net purchases of domestic securities and risk aversion..............................\t 24\n14 \t\nExchange rate of the rand and commodity prices............................................................\t 25\n15 \t\nReal effective exchange rates...........................................................................................\t 26\n16 \t\nRemuneration per worker, labour productivity and unit labour cost in the \nformal non-agricultural sector...........................................................................................\t 27\n17 \t\nAverage annual inflation and wage settlements................................................................\t 27\n18 \t\nNon-agricultural economic activity and employment........................................................\t 29\n19 \t\nHouse prices....................................................................................................................\t 29\n20 \t\nInternational share price indices.......................................................................................\t 30\n21 \t\nDomestic share price indices...........................................................................................\t 30\n22 \t\nReal growth rates of selected aggregates........................................................................\t 32\n23 \t\nBanks’ loans and advances to the private sector by type.................................................\t 33\n24 \t\nReal GDP growth forecast................................................................................................\t 35\n25 \t\nComposite business cycle indicators................................................................................\t 35\nB3.1\t\nData revisions to gross domestic product........................................................................\t 37\nB3.2\t\nAverage forecast error of gross domestic product............................................................\t 38\nB3.3\t\nRoot mean square error of gross domestic product.........................................................\t 38\nB3.4\t\nProbabilities for gross domestic product forecasts...........................................................\t 39\n26 \t\nThe repurchase rate and other short-term interest rates...................................................\t 40\n27 \t\nPolicy analysis..................................................................................................................\t 41\nB4.1\t\nLending rates in the banking sector..................................................................................\t 45\nB4.2\t\nRelative margins to banks’ weighted average lending rate................................................\t 46\nB4.3\t\nThe level of weighted lending rates in the latest downward cycle in interest rates.............\t 47\nB4.4\t\nMargins of weighted bank lending rates relative to the repurchase rate............................\t 47\n28 \t\nBER surveys of headline CPI inflation expectations..........................................................\t 48\n29 \t\nBreak-even inflation rates.................................................................................................\t 49\n30 \t\nTargeted inflation forecast................................................................................................\t 50\nTables \nTable 1\t\nTargeted inflation: Goods and services inflation..........................................................\t\n3\nTable 2\t\nContributions to targeted inflation...............................................................................\t\n4\nTable 3\t\nContributions to administered prices..........................................................................\t\n7\nTable 4\t\nMeasures of producer price inflation...........................................................................\t\n8\nTable 5\t\nThe effect of food and petroleum product prices on headline \nproducer price inflation...............................................................................................\t\n9\nTable B1.1\tComparison of change in CPI weights........................................................................\t 10\nTable 6\t\nIMF projections of world growth and inflation for 2013 and 2014................................\t 16\nTable 7\t\nGlobal manufacturing PMI: Overall..............................................................................\t 16\nTable 8\t\nFiscal balances and government debt........................................................................\t 18\nTable 9\t\nCentral bank total assets............................................................................................\t 20\nTable 10\t\nSelected central bank interest rates............................................................................\t 21\nTable 11\t\nAverage percentages of wage settlement by major sector in 2012.............................\t 28\nTable 12\t\nEmployment in formal non-agricultural industries.......................................................\t 28\nTable 13\t\nPublic finance data.....................................................................................................\t 31\nTable 14\t\nGrowth in real GDP and expenditure components.....................................................\t 34\nTable 15\t\nDomestic economic sentiment indicators...................................................................\t 36\nTable B3.1\tForecasting error comparison.....................................................................................\t 39\nTable 16\t\nThe Bank’s real GDP growth and targeted inflation forecasts.....................................\t 43\nTable 17\t\nReuters survey of CPI inflation forecasts: April 2013...................................................\t 49\n1\nMonetary Policy Review June 2013\nIntroduction \nThe previous MPR was published in October 2012 at a time of significant economic turmoil \nand heightened uncertainty about future economic developments. Given very low interest \nrates, the United States Federal Reserve (the Fed), the European Central Bank (ECB) and the \nBank of Japan (BOJ) stepped up their use of unconventional monetary policy measures to \naddress deteriorating conditions and financial market tensions. Growth in the fourth quarter of \n2012 was widely expected to disappoint in most advanced economies and did, with the euro \narea remaining in recession and momentum falling in systemically important emerging-market \neconomies. Consequences of this decelerating growth and recession have been a further \nmoderation in price pressures and a subdued outlook for global inflation.\nAn interim fiscal cliff arrangement in the United States (US) and subsiding sovereign debt risks \nin Europe contributed to some improvement in global financial market sentiment as 2012 ended \nand 2013 began. A sluggish start in 2013 gradually gained momentum, with some key economies \ngrowing faster than expected and financial markets strengthening. A nascent recovery in the \nUS solidified as private demand slowly strengthened, job creation picked up, and credit and \nhousing markets healed. Yet events in the euro area (particularly Cyprus) and the unresolved \nfiscal gridlock in the US continue to sap confidence and undermine growth prospects. \nThe June 2013 MPR marks a point of considerable improvement in financial conditions and \nsomewhat better economic outcomes in some countries, but in a global environment of \nsustained uncertainty and continued economic fragility. The better outcomes early in the year \nhad only marginal effects on global growth forecasts for 2013. The sizeable mismatch between \nfinancial market and real economy outcomes has raised new concerns about the efficacy of \nsupport to global liquidity.\nSome of the improvement in global conditions filtered through to South Africa early in the year \nbut export demand and commodity prices remained weak. In subsequent months a range \nof prominent domestic factors have deteriorated, negatively impacting on the local economic \nlandscape. Widespread labour market instability has undermined confidence, investment and \noutput. Weak export demand, lower terms of trade and sustained domestic spending have \nfurther led to a widening current-account deficit on the balance of payments, and contributed \nto credit ratings downgrades. These domestic economic developments became the dominant \ndrivers of the depreciating trend in the exchange value of the rand, in turn helping to support \ndomestic inflation running against the global trend. \nDespite a decent rebound in growth in the fourth quarter of 2012 from the poor outcome of the \nthird quarter, growth in the first quarter of 2013 has turned out worse than expected. Investment \nhad weakened by year-end and has slowed further in the new year. Constrained by slow growth \nin disposable income, rising inflation and subdued employment creation, household spending \nhas remained modest. \nDomestic short-term supply-side indicators suggest modest economic growth in 2013 remaining \nfragile and below potential. Real gross domestic product (GDP) growth amounted to 0,9 per cent \nin the first quarter of 2013. The Bank’s growth forecast for 2013, which was revised marginally \nupwards at the March 2013 MPC meeting, was again lowered in May. The Bank’s forecast for \ngrowth at the May meeting was 2,4 per cent with downside risks. With the latest data releases, \nthis may need to be revised down at the next meeting of the MPC.\nDespite stronger inflation momentum over the short term, inflation expectations remain anchored \naround the upper end of the inflation target range. Headline inflation levelled off at 5,9 per cent \nfrom February 2013 through to April, with core inflation also remaining below 6 per cent. The \nBank’s inflation outlook for 2013 has improved slightly since the March 2013 MPC meeting. \nThe monetary policy stance remains accommodative, taking into account a sustained negative \noutput gap and inflation driven primarily by global factors, especially exchange rate movements. \nMonetary Policy Review June 2013\n2\nA stronger global economic recovery is immensely desirable, despite its potential to push \nup global prices. Stronger global growth would assist in reducing South Africa’s external \nand domestic vulnerabilities – the current-account and fiscal deficits, and performance of \nexport sectors. A sustainable global recovery, however, requires currency realignments and \nstructural policy interventions in many economies, in addition to monetary accommodation in \nadvanced economies that is more effective in generating stronger real growth and job creation. \nContractionary fiscal policies will continue in debt-stressed economies, especially in peripheral \nEurope. Better fiscal outcomes and more aggressive currency rebalancing would provide \nmuch-needed signs of improved global prospects. \nThe MPR analyses the latest developments in and the factors affecting inflation. It reviews recent \nmonetary policy developments, discusses the outlook for inflation, and presents the growth and \ninflation forecasts of the Bank. In addition, topical issues are discussed in boxes. The first box \nreviews the changes to the consumer price index and its expected impact, while the second \nbox discusses the analytical value of various measures of inflation. The third box evaluates the \naccuracy of the Bank’s economic growth forecasts, while the fourth box clarifies the role of the \nrepurchase and the prime rates in the transmission of monetary policy. \nRecent developments in inflation\nThis section reviews recent trends in the main inflation indices and looks at the main factors \nimpacting on inflation in South Africa. \nThe evolution of inflation indicators \nThe upward trend in headline consumer price inflation – the targeted inflation rate – gained \nmomentum from 5,4 per cent in January 2013 and then levelled off at 5,9 per cent from \nFebruary through to April 2013. The moderation in food prices to March 2013 was more than \noffset by upward pressure on inflation emanating from, among other factors, the impact \nof higher petrol prices. Core inflation also trended upwards, though remaining contained \nbelow 6 per cent. Underlying inflationary pressures remained subdued in the absence of \ndemand pressures and given a significant output gap, but the depreciation of the rand has \nalready affected petrol prices and poses a risk in terms of second-round inflationary effects. \nTargeted inflation\nThe headline consumer price index (CPI) – the measure targeted by the Bank – accelerated \nfrom a low of 4,9 per cent in July 2012 to 5,7 per cent in December. In January 2013 inflation \nsurprised on the downside at 5,4 per cent with the release of a reweighted, rebased and revised \nbasket of goods and services. (See Box 1 for a review of the changes to the consumer price \nindex.) In subsequent months, and with ongoing rand weakness, the rate of inflation increased \nto 5,9 per cent in February and remained at this level through to April 2013 (Figure 1). April 2013 \nmarked 12 months of CPI inflation remaining within the target band.\n3\nMonetary Policy Review June 2013\nPercentage change over 12 months\n0\n2\n4\n6\n8\n10\n12\n14\nFigure 1 \nConsumer price inflation: Targeted inflation*\n* CPIX for metropolitan and other urban areas until the end of 2008; CPI for all urban \n areas thereafter\nSource: Statistics South Africa\n2003\n2006\n2004\n2005\n2007\n2008\n2009\n2010\n2011\n2012 2013\nA decrease in goods price inflation was the main driver of the 0,3 percentage point decline in \noverall inflation from December 2012 to January 2013 (Table 1). Goods price inflation declined to \n4,8 per cent in January 2013, driven by softer durable goods prices, a decrease in non-durable \ngoods price inflation and the change in the weights of CPI components. Goods price inflation \nthen accelerated to 5,1 per cent in April 2013, as non-durable goods price increases continued to \nexceed the upper band of the inflation target range. Services price inflation, which had remained \nstable and within the target range at, or just below, 6,0 per cent to January 2013, increased to \n6,7 per cent in February 2013, with a significant increase in medical insurance costs. Services \ninflation remained stable at a high 6,6 per cent in April 2013, and upward pressure from services \non overall inflation continues as it now commands a larger weight than goods inflation.\nTable 1\t\nTargeted inflation: Goods and services inflation\nPercentage change over 12 months and percentage points*\n2012\n2013\nWeights* Sep\nOct\nNov\nDec\nWeights* Jan\nFeb\nMar\nApr\nTargeted inflation...........................\n100,00\n5,5\n5,6\n5,6\n5,7\n100,00\n5,4\n5,9\n5,9\n5,9\nGoods inflation............................... \t\n54,20\n5,2\n5,3\n5,3\n5,2\n49,86\n4,8\n5,0\n5,2 \n5,1 \n\t Durable goods...........................\n14,79\n-0,1\n-0,2\n-0,2\n-0,2\n8,02\n-0,7\n-0,8\n-0,7\n-0,5\n\t Semi-durable goods ..................\n6,73\n2,1\n3,3\n2,7\n2,3\n6,32\n2,5\n2,6\n3,1\n3,2\n\t Non-durable goods....................\n32,68\n7,4\n7,6\n7,6\n7,6\n35,52\n7,3\n7,3\n7,5\n7,2\nServices inflation............................\n45,80\n5,9\n5,9\n5,9\n6,0\n50,14\n5,9\n6,7\n6,6\n6,6\nSource: Statistics South Africa\nThe dominant price categories contributing to targeted inflation are food and non-alcoholic \nbeverages (NAB), housing and utilities, and transport (Table 2). The contribution of miscellaneous \ngoods and services increased by 0,4 percentage points to become the second-largest \ncontributor to overall inflation for February 2013. This was driven by increased inflation in the \ninsurance category,1 which increased by 3,3 percentage points from January 2013 to 8,3 per \ncent in February. Rising and then slightly lower petrol prices caused the contribution of the \ntransport category to increase from 0,8 percentage points in January 2013 to 1,2 percentage \npoints in March and the subsequent decline to 1,0 percentage points in April.\n1.\t Medical insurance \ncosts are surveyed \nin February of each \nyear. These costs \naccelerated from a \n12-month rate of \n9,4 per cent in January \n2013 to 10,5 per cent \nin February.\nMonetary Policy Review June 2013\n4\nTable 2\t\nContributions to targeted inflation\nPercentage change over 12 months* and percentage points\n2012\n2013\nWeights Sep\nOct\nNov\nDec\nWeights Jan\nFeb\nMar\nApr\nTargeted inflation*............................\n100,00\n5,5\n5,6\n5,6\n5,7\n100,00\n5,4\n5,9\n5,9\n5,9\nOf which:\nFood and non-alcoholic beverages...\n15,68\n0,9\n1,0\n1,1\n1,1\n15,41\n1,0\n0,9\n0,9\n0,9\nFood.............................................\n14,27\n0,9\n1,0\n1,1\n1,0\n14,20\n0,9\n0,9\n0,9\n0,9\nHousing and utilities.......................... \n22,56\n1,4\n1,4\n1,4\n1,4\n24,52\n1,5\n1,4\n1,4\n1,4\nTransport...........................................\n18,80\n1,1\n1,1\n0,9\n1,0\n16,43\n0,8\n0,9\n1,2\n1,0\nMiscellaneous goods and services....\n13,56\n0,7\n0,7\n0,8\n0,8\n14,72\n0,7\n1,1\n1,1\n1,1\nOther................................................\n29,40\n1,4\n1,4\n1,4\n1,4\n28,92\n1,4\n1,6\n1,3\n1,5\nSources:\tStatistics South Africa and own calculations\nFood prices\nAs shown in Table 2, food price inflation has moderated in recent months, declining by \n1,6 percentage points from a peak of 7,5 per cent in November 2012 to 5,9 per cent in \nMarch 2013. It then increased to 6,3 in April and remains a key contributor to the CPI. A \nsignificant slowdown in meat price inflation to February 2013, and a moderation in bread and \ncereals price inflation to March weighed against accelerations in vegetable price inflation and \nhigh milk, cheese and eggs price inflation (Figure 2). The negative year-on-year rates of \ninternational food price inflation until March 2013 have eased pressures on domestic food \nprices. The Food and Agriculture Organization (FAO) Food Price Index2 of international food \ncommodities remained at an elevated level, recording a year-on-year increase of 1,1 per cent \nin April 2013.\nPercentage change over 12 months\nFigure 2 \nTargeted inflation* and food inflation\nAll food items\nVegetables\nBread and cereals\nMilk, cheese and eggs\nMeat\nTargeted inflation measure\n-10\n0\n10\n20\n30\n40\n* CPIX for metropolitan and other urban areas until the end of 2008; CPI for all urban \n areas thereafter\nSource: Statistics South Africa\n2003\n2004\n2005\n2012 2013\n2006\n2007\n2008\n2009\n2010\n2011\n2.\t The FAO Food \nPrice Index is a \nmeasure of the \ninternational prices \nof a basket of food \ncommodities. \n5\nMonetary Policy Review June 2013\nDomestic prices of maize and wheat tracked global grain prices lower, though still at elevated \nlevels as shown in Figure 3. The spot price of white maize followed US export parity prices lower \nas it declined by 18,9 per cent from a recent high of R2  509 in November 2012 to early \nFebruary 2013. It then increased to R2 401 in March before again declining to R2 183 on 23 May. \nWheat prices levelled off at a high level from July 2012, before declining by 6,4 per cent from \n28 November 2012 to R3 515 per ton on 23 May 2013.3 Going forward, the more favourable \nglobal food price developments could be offset in part by the depreciation of the currency.\nRand per ton\nRand per ton\nFigure 3 \nSelected commodity prices\n0\n1 000\n2 000\n3 000\n4 000\n5 000\n0\n1 000\n2 000\n3 000\n4 000\n5 000\n6 000\nWhite maize SAFEX spot price\nWheat SAFEX spot price\n2008\n2009\n2010\n2011\n2012\n2013\n2008\n2009\n2010\n2011\n2012\n2013\nNote: The top grey line is the import parity price and the bottom grey line is the export parity \n price. These prices are the theoretical upper and lower bound prices for commodities.\nSource: Grain South Africa\nPetrol prices\nPetrol price inflation moderated from 17,6 per cent in September 2012 to a low of 11,6 per cent in \nJanuary 2013. The subsequent increase to 16,4 per cent in March was followed by a moderation \nto 10,4 per cent in April. This volatility was largely driven by movements in international product \nprices through their effect on the basic fuel price as shown in Figure 4. The basic fuel price \nper litre has fluctuated between R6,65 and R7,85 since October 2012. The price of 95 octane \nunleaded petrol per litre in Gauteng Province decreased from R12,20 in October 2012 to \nR11,86 in January 2013 before increasing to R13,08 in March. \n3.\t On 2 May 2013 the \ngovernment approved \nan increase in the wheat \ntariff protection level to \nUS$294 per ton free on \nboard. This is effectively \nan increase in the price \nfloor for wheat in South \nAfrica, which guarantees \nlocal producers a \nminimum price of \napproximately R3 300 \nper ton compared to \nthe long-term average \nof R2 951 per ton. \nShould the three-week \nmoving average of the \ninternational reference \nprice fall below this \nlevel, a duty would be \nimposed on imported \nwheat. \nMonetary Policy Review June 2013\n6\n-200\n-160\n-120\n-80\n-40\n0\n40\n80\n120\nCents per litre\nCents per litre\nFigure 4 \nSouth African petrol price\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2007\n2008\n2009\n2010\n2011\n2012\n2013\nExchange rate\nOver (-)/Under (+) recovery\nMovement in international product prices\nPrice change\nBasic fuel price\nOther levies\nFuel levy\nMargin\nRoad Accident Fund\nGauteng price of 95 octane unleaded petrol\n0\n200\n400\n600\n800\n1 000\n1 200\n1 400\nSource: Department of Energy \nContributions to the \nchange in the petrol price\nLevel\nThe lower, though still elevated, international oil price led to a decline in the basic fuel price \nin April 2013. However, this was more than offset by the impact of the rand depreciation, the \n15 cents per litre increase in the fuel levy to 212,5 cents per litre, the 8 cents per litre increase \nin the Road Accident Fund levy to 96 cents per litre, and the 13,16 cents per litre increase \nin other levies, inclusive of the pipeline levy set by the National Energy Regulator of South \nAfrica (NERSA). Consequently, in April 2013, the price of 95 octane unleaded petrol in Gauteng \nProvince reached an all-time high of R13,20 per litre. This was followed by a 73 cent reduction \nin May, on account of the lower price of crude oil and a somewhat stronger exchange rate. At \nR12,47 per litre, the price of 95 octane unleaded petrol was 2 per cent higher than a year ago. \nCore inflation\nUnderlying inflation as measured by CPI excluding food, NAB, petrol and energy prices \naccelerated gradually from 4,5 per cent in July 2012 to 5,3 per cent in February 2013 and \n5,2 per cent in April (Figure 5). \nSince the previous MPR, the tight dispersion between the exclusion-based measures widened \nsomewhat before narrowing again. The upward effect of petrol prices is evident from the \ndifferences between the measure excluding food and NAB and measures excluding petrol. \nIn addition, medical insurance costs contributed to the uptick in February 2013. Core inflation \nremained relatively well contained, reflecting moderate demand pressures. (See Box 2 for a \ndiscussion of various measures of inflation.)\n7\nMonetary Policy Review June 2013\nPercentage change over 12 months\n2009\n2010\n2011\n2012\n2013\n* NAB: Non-alcoholic beverages\nSources: Statistics South Africa and own calculations\nFigure 5 \nThe effect of food, petrol, energy and volatile prices on \n \nheadline inflation\nCPI excluding food and NAB* prices\nCPI excluding food, NAB and petrol prices\nHeadline CPI\nCPI excluding petrol prices\nCPI excluding food, NAB, petrol and energy prices\nTrimmed mean\n0\n2\n4\n6\n8\n10\nAdministered prices\nAdministered prices (with an increased weight in the CPI of 18,48 percentage points), and \nregulated prices in particular (with a weight of 13,70 percentage points), are major drivers of the \nupward trend in core inflation measures. The administered price index (API) has remained high \nand above the upper limit of the inflation target range since the previous MPR. The 12-month \nchange in API moderated from 9,8 per cent in September 2012 to 8,5 per cent in January 2013, \nbefore increasing to 8,9 per cent in April. The effect of the revised CPI weights can be seen in \nTable 3 as the contributions of both electricity and petrol increased by 0,4 percentage points \nfrom December 2012 to January 2013, despite a decline in the year-on-year rate of change in \nthe petrol price and no change in the inflation rate of electricity over the period. \nTable 3\t\n Contributions to administered prices\nPercentage change over 12 months* and percentage points\nWeights\n2012\nWeights\n2013\nCPI\nSep\nOct\nNov\nDec\nCPI\nJan\nFeb\nMar\nApr\nCPI for administered prices*.......\n14,66\n9,8\n9,5\n8,7\n8,8\n18,48\n8,5\n8,9\n10,6\n8,9\nRegulated component\nWater.......................................\n1,10\n1,0\n1,0\n1,0\n1,0\n1,55\n1,0\n1,0\n1,0\n0,9\nElectricity.................................\n1,68\n1,8\n1,8\n1,8\n1,8\n4,13\n2,2\n2,2\n2,2\n2,1\nPetrol.......................................\n3,93\n4,1\n3,7\n3,0\n3,0\n5,68\n3,4\n3,6\n5,0\n3,3\nOther regulated \nadministered prices..................\n2,91\n0,1\n0,1\n0,2\n0,3\n2,34\n0,0\n0,0\n0,2\n0,2\nUnregulated component\nAssessment rates....................\n2,07\n1,0\n1,0\n1,0\n1,0\n1,30\n0,5\n0,5\n0,5\n0,5\nPrimary and secondary \nschool fees...............................\n1,28\n0,8\n0,8\n0,8\n0,8\n1,72\n0,8\n0,8\n0,9\n0,9\nUniversity fees..........................\n0,90\n0,6\n0,6\n0,6\n0,6\n1,23\n0,6\n0,6\n0,6\n0,6\nOther unregulated \nadministered prices..................\n0,79\n0,6\n0,6\n0,6\n0,6\n0,53\n0,2\n0,2\n0,2\n0,1\nSource:  Statistics South Africa\nMonetary Policy Review June 2013\n8\nProducer prices\nAlthough differently constituted and not comparable to the previous data, the new producer \nprice index (PPI) continues to measure the price changes of goods in South Africa at the factory \ngate. The first data, compiled in terms of Statistics South Africa’s (Stats SA) newly introduced \nPPIs (at 2012 prices), were released in February 2013 for prices in the month of January 2013. In \nthe new release designated headline PPI is now the PPI for final manufactured goods, whereas \npreviously it was the PPI for domestic output.\nThe five new producer price indices and their year-on-year percentage changes are presented \nin Table 4. With the exception of agriculture, forestry and fishing, the price inflation of products \nproduced in other sectors were either close to, or above, 6 per cent. However, headline PPI \ninflation (PPI for final manufactured goods) has remained contained since January 2013, \naccelerating from 5,4 per cent in February to 5,7 per cent in March. Food products, beverages \nand tobacco products price inflation of 5,9 per cent in March (with a weight of 33,47 per cent), \nand coke, petroleum, chemical, rubber and plastic products price inflation of 9,2 per cent (with \na weight of 17,22 per cent) respectively contributed 2,0 and 1,6 percentage points to the annual \npercentage change in headline PPI inflation in March.\nTable 4\t\nMeasures of producer price inflation\nPercentage change over 12 months\n2013\nJanuary\nFebruary\nMarch\nFinal manufactured goods.............................................................\n5,8\n5,4\n5,7\nIntermediate manufactured goods...................................................\n5,8\n6,0\n7,7\nElectricity and water........................................................................\n12,3\n13,0\n11,4\nMining.............................................................................................\n7,2\n6,6\n8,6\nAgriculture, forestry and fishing.......................................................\n3,0\n1,2\n0,4\nSource: Statistics South Africa\nIntermediate manufactured goods price inflation accelerated to 7,7 per cent in March 2013. \nThe already high annual electricity and water price inflation moderated to 11,4 per cent in \nMarch, mainly driven by electricity price inflation of 12,0 per cent. Annual mining price inflation \ndecelerated from January to February 2013 before accelerating to 8,6 per cent in March. In \nagriculture, forestry and fishing the deceleration was largely on account of easing pressures on \nfruit and vegetable prices, and a notable decline in live animal prices.\nStats SA also introduced analytical PPI series, which are exclusion-based core measures. Two \nof these measures, PPI for final manufactured goods excluding petroleum products and the \nPPI for final manufactured goods excluding food, are shown in Table 5. The significant gap of \n0,5 percentage points in March 2013 between headline PPI and that excluding petroleum \nproducts suggests that petroleum product prices are exerting upward pressure on producer \nprices. The narrow gap between headline PPI and that excluding food suggests little upward \npressure from food prices.\n9\nMonetary Policy Review June 2013\nTable 5\t\nThe effect of food and petroleum product prices on headline \nproducer price inflation\nPercentage change over 12 months\n2013\nJanuary\nFebruary\nMarch\nFinal manufactured goods...............................................................\n5,8\n5,4\n5,7\nExcluding:\n\t Petroleum products.......................................................................\n5,3\n5,0\n5,2\n\t Food.............................................................................................\n5,8\n5,3\n5,7\nSource: Statistics South Africa\nFood price inflation in headline PPI moderated from a peak of 11,1 per cent in November 2012 \nto 6,3 per cent in March 2013 as shown in Figure 6. This was due to a deceleration in price \nincreases in almost all the product categories surveyed. Annual price changes of food products \nas measured in headline PPI continued to move in tandem with that of food as measured in \nheadline CPI.\nPercentage change over 12 months\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n* PPI for final manufactured goods: Food products consist of the food at manufacturing component of \n the PPI for domestic output until December 2012 and the PPI for final manufactured goods, food \n products category, from January 2013.\nSource: Statistics South Africa\nFigure 6 \nFood prices in the PPI* and CPI\nPPI for final manufactured goods: Food products\nCPI: Food\n \n-10\n0\n10\n20\n30\nMonetary Policy Review June 2013\n10\nBox 1\t\nChanges to the consumer price index1 \nIn line with international best practice,2 Statistics South Africa (Stats SA) recently revised the \nweights and made minor changes to the constituent goods and services in the consumer \nprice index (CPI) basket.3 Stats SA then chain-linked the CPI indices at the new price and \nweight reference period, namely December 2012.4\nThe revisions are based on the survey of household expenditure, the Income and \nExpenditure Survey (IES) 2010/2011,5 supplemented by additional data sources where \nnecessary. The IES 2010/11 weights are price-updated to reflect 2012 prices. The CPI \nindices are rebased to December 2012 (December 2012 index values equal 100), with the \nold and new indices linked in December 2012 to ensure continuity and comparability of the \nnew basket of items and weights.\nTable B1.1 compares weights across expenditure categories, including certain within-category \ngroups that have incurred significant changes. With the increase in consumer spending on \nservices relative to goods, expenditure on services now commands a weight of 50,14 per \ncent. Medical insurance costs are a major driver in the miscellaneous goods and services \ncategory, contrasting with the lower weight of the health category which excludes health \ninsurance and medical aid subscriptions.\nTable B1.1\t Comparison of change in CPI weights*\nCOICOP categories\n2008\n2012\nDifference**\nChange\nPer cent\nPercentage \npoints\nPer cent\nGoods......................................................................\n54,20\n49,86\n-4,34\n-8,01\nServices...................................................................\n45,80\n50,14\n4,34\n9,48\nAdministered prices.................................................\n14,66\n18,48\n3,82\n26,06\nFood and non-alcoholic beverages..........................\n15,68\n15,41\n-0,27\n-1,72\nAlcoholic beverages and tobacco............................\n5,58\n5,43\n-0,15\n-2,69\nClothing and footwear..............................................\n4,11\n4,07\n-0,04\n-0,97\nHousing and utilities.................................................\n22,56\n24,52\n1,96\n8,69\n Electricity.............................................................. \n1,68\n4,13\n2,45\n145,83\nHousehold contents, equipment and maintenance..\n5,86\n4,79\n-1,07\n-18,26\nHealth......................................................................\n1,47\n1,46\n-0,01\n-0,68\nTransport..................................................................\n18,80\n16,43\n-2,37\n-12,61\n Petrol....................................................................\n3,93\n5,68\n1,75\n44,53\nCommunication........................................................\n3,22\n2,63\n-0,59\n-18,32\nRecreation and culture.............................................\n4,19\n4,09\n-0,10\n-2,39\nEducation.................................................................\n2,19\n2,95\n0,76\n34,70\nRestaurants and hotels............................................\n2,78\n3,50\n0,72\n25,90\nMiscellaneous goods and services...........................\n13,56\n14,72\n1,16\n8,56\n Insurance..............................................................\n7,71\n9,92\n2,21\n28,66\n Medical insurance..............................................\n3,68\n7,90\n4,22\n114,67\n*\t The weights of CPI represent the proportions of consumption expenditure by households in a specific period.\n**\t Increased/Decreased compared to 2008\nSource: Statistics South Africa\n1\t\nStatistics South Africa, “Consumer Price Index”, The South African CPI Sources and Methods Manual, \nRelease v.2 (Pretoria: Stats SA, 20 February 2013).\n2\t\nThe International Labour Organisation (ILO) recommends that CPI reweighting occurs at least every five \nyears. Stats SA last reweighted CPI in 2008.\n3\t\nStats SA classifies all measured items according to Classification of Individual Consumption by Purpose \n(COICOP) standards.\n4\t\nSee also Box 1 in the March 2013 Quarterly Bulletin of the South African Reserve Bank for details on the \nreweighted and rebased consumer price index.\n5\t\nStatistics South Africa, “Income and Expenditure of Households 2010/2011”, Statistical release P0100 \n(Pretoria: Stats SA, November 2012).\n11\nMonetary Policy Review June 2013\nIn total, the weight for administered prices has increased from 14,66 per cent to 18,48 per \ncent, driven by significant electricity and petrol price increases (see Figure B1.1). The new \nweights reflect the substantial increase in these prices, with that of electricity increasing by \n146 per cent (or 2,45 percentage points) to 4,13 per cent, and that of petrol by 45 per cent \n(or 1,75 percentage points) to 5,68 per cent. \nAverage electricity price\n95 unleaded petrol price in Gauteng\nFigure B1.1 Electricity and petrol prices\nCents per Kwh\n0\n20\n40\n60\n2012\n2011\n2010\n2009\n2008\n2007\n2006\n2005\n300\n600\n900\n1 200\n1 500\nCents\nSources: Eskom, South African Reserve Bank and Department of Energy \n2013\n2011\n2010\n2009\n2008\n2007\n2006\n2005\nThe 2012 reweighting entailed several changes to the composition of CPI, with multiple \nproducts added, including a newly designed seasonal fruit basket, and others excluded to \nreflect current consumer behaviour. Package holidays is a new group that has been added to \nthe CPI, with a weight of 0,21 per cent. \nOn a broader level, the measurement of rural CPI has been revised to reflect prices experienced \nby consumers in rural areas themselves rather than merely reflecting secondary area prices. \nPrices will therefore be measured according to the place of purchase rather than the residential \narea. This change should increase the accuracy of data on rural areas and the understanding \nof the differential impact, if any, of inflation by geographical area. \nFigure B1.2 illustrates the Bank’s baseline inflation forecast and the estimated change to the \nforecast as a result of the new weights and base year through to 2014. These changes caused \nforecasted inflation to increase, on average, by approximately 0,2 percentage points over \n2013. Nonetheless, it is clear that the overall inflation trajectory has not been altered by these \nchanges. It should be noted that in Figure B1.2 both the baseline and the estimated change \nare forecasts, which may be modified due to revisions of assumptions. \nPercentage points\nPer cent\n2010\n2011\n2012\n2013\n2014\nFigure B1.2 Inflation forecast with changes to CPI\n \nHeadline CPI (2008 = 100)\n \nDifference in percentage points (right-hand scale)\n \nSources: Statistics South Africa and South African Reserve Bank\n-0,05\n0,05\n0,15\n0,25\n0,35\n0,45\n0,55\n2,0\n2,5\n3,0\n3,5\n4,0\n4,5\n5,0\n5,5\n6,0\n6,5\nHeadline CPI (new weights, Dec 2012 = 100)\nMonetary Policy Review June 2013\n12\nBox 2\t\nMonetary policy and various measures of inflation\nIn pursuing the Bank’s primary objective, the Monetary Policy Committee (MPC) focuses \non an inflation target over the medium term in the interest of balanced and sustainable \ngrowth. The interpretation of inflation outcomes is at times complicated by temporary or \nidiosyncratic shocks. In such conditions, policy-makers can look through temporary \nvolatility by referencing various core measures of inflation that focus on underlying \ninflationary pressures.\nCore measures can be derived by means of exclusion-based and statistical trimmed mean \napproaches, with the purpose of extracting the persistent component of inflation. Statistics \nSouth Africa (Stats SA) publishes various exclusion-based measures that remove certain \nitems from the headline CPI. In terms of exclusions, the Bank in its analyses focuses mostly \non CPI measures that exclude administered prices and CPI measures that exclude food, \npetrol and energy prices (see Figure B2.1). \nFigure B2.1 Headline inflation and exclusion-based core measures\nPercentage change over 12 months\n-6\n-3\n0\n3\n6\n9\n12\n15\n-6\n-3\n0\n3\n6\n9\n12\n15\nPercentage change over 12 months\nSource: Statistics South Africa\n2003\n2005\n2007\n2009\n2011\n2013\n2003\n2005\n2007\n2009\n2011\n2013\nHeadline CPI \nCPI excluding food and non-alcoholic beverages (NAB)\nCPI excluding petrol\nCPI excluding food and NAB, and petrol\nCPI excluding food and NAB, petrol and energy\nHeadline CPI \nCPI excluding administered prices\nAnother inflation measure is Stats SA’s newly introduced trimmed mean inflation. \nConceptually, this measure excludes items falling in the last 5 per cent of the tail \n(extremity) of the distribution of price-change observations for products and services, \nthus limiting the influence of these extreme changes on the calculation of the weighted \naverage inflation number.1 See Figure B2.2 for a comparison of the key measures \nof inflation.\n1\t\nElementary indices are sorted by the size of their price change, with the cut at the 5 per cent and the \n95 per cent cumulative weight points. Changes in the price of products and services surveyed less \nfrequently (on a quarterly, semi-annual and annual basis) will be considered in terms of a rolling average \nbetween surveys.\n13\nMonetary Policy Review June 2013\nFigure B2.2 Comparison of main inflation measures\nPercentage change over 12 months\n \nTrimmed mean\n \nTargeted inflation \nSources: Statistics South Africa and own calculations\nCPI excluding food and NAB, petrol and energy\nJan\nMar\n2012\n2013\nMay\nJan\nMar\nMay\nJul\nSep\nNov\n3,5\n4,5\n5,5\n6,5\nFigure B2.3 indicates that average long-run inflation measures of the various exclusion-\nbased core measures are not significantly different from that of headline CPI over the period \nfrom January 2003 to April 2013. This is indicative of core measures capturing the \nunderlying trend component of inflation, with the price shocks dissipating over a horizon of \n18 to 24 months. Furthermore, the volatility of core measures over the review period, \nmeasured as the standard deviation2 as shown in Figure B2.3, is close to or less than the \nvolatility of headline CPI inflation. This indicates that the volatility of non-core items \ncontributes most to volatility in headline CPI.\n \nStandard deviation and per cent\nFigure B2.3 Comparison of long-run measures of inflation \nVolatility\nAverage inflation, Jan 2003 to Apr 2013\n* NAB: Non-alcoholic beverages\nSources: Statistics South Africa and own calculations\nCPI excluding\nadministered prices\nCPI excluding food and\nNAB, petrol and energy\nCPI excluding food\nand NAB, and petrol\nCPI excluding petrol\nCPI excluding food\n and NAB*\nHeadline CPI\n0\n1\n2\n3\n4\n5\n2\t\nThe standard deviation is a measure of the dispersion of individual observations from the mean.\nMonetary Policy Review June 2013\n14\nInternational economic policy developments\nMonetary policy decisions are made taking into account current and expected developments in \nthe global economy. This section reviews medium-term developments, and assesses the near-\nterm outlook in terms of prospects, risks and uncertainties for inflation.\nInternational economic developments\nAlthough the trajectory for global economic growth in 2013 has not changed much since \nOctober 2012, economic outcomes in key areas have started to diverge, giving rise to the \ncharacterisation of a ‘multispeed’ recovery in global economic activity. More rapid growth \nin emerging-market and developing economies (developing Asia in particular) is set against \ncontinued, very weak outcomes in Europe and a stronger-than-expected recovery in the \nUS. In the absence of demand pressures, and with an expected softening of food and oil \nprices, inflationary pressures are likely to remain subdued in most advanced and emerging- \nmarket economies. \nMultispeed global growth\nDespite very poor economic outcomes in the fourth quarter of 2012, a trough in global growth \nof 2,25 per cent was actually experienced in the second quarter of 2012. The global economy \ngrew by 3,2 per cent in 2012. This global growth rate masked considerable diversity in national \noutcomes, underscoring the key role of a few major world economies in global outcomes and \npresaging the current ‘multispeed’ trajectory. As of April 2013, the International Monetary Fund \n(IMF) projects global real GDP to increase by 3,3 per cent in 2013; revised down from 3,5 per \ncent in January 2013 and 3,6 per cent in October 2012. Global economic growth is expected to \nbe significantly higher in 2014 at 4,0 per cent.\nThe gap analysis (Figure B2.4) shows that the gap between headline CPI and core measures \nhas further analytical value as it distinguishes between transitory and more permanent \nchanges affecting inflation. Large gaps are indicative of short-term (transitory) price shocks.\nFigure B2.4 Gap analysis \nPercentage change over 12 months\nGap in percentage points\n \nHeadline CPI\n \nDifference between headline CPI and CPI excluding food and NAB, petrol and energy (right-hand scale)\n \nDifference between headline CPI and CPI excluding administered prices (right-hand scale)\nSources: Statistics South Africa and own calculations\n2003\n2004\n2005\n2006\n2007\n2008\n2010\n2009\n2012 2013\n2011\n-2\n0\n2\n4\n6\n-5\n0\n5\n10\n15\n15\nMonetary Policy Review June 2013\nAnnual percentage change\n-3\n-2\n-1\n0\n1\n2\n3\nMay\nMar\nJan\nNov\nSep\nJul\nMay\nMar\nJan\nFigure 7 \nEvolution of real GDP forecasts for 2013 for the G-7 and \n \neuro area\n \nUnited States\n \nEuro area\n \nItaly\nSource: Consensus Economics Consensus Forecasts\n \nJapan\n \nGermany\n \nCanada\n \nUnited Kingdom\n \nFrance \n2012\n2013\nGrowth in advanced economies\nEconomic conditions in major advanced economies deteriorated in the fourth quarter of 2012, \nwith real GDP growth contracting by 2,3 per cent in the euro area and by 1,2 per cent in the United \nKingdom (UK). During the same quarter, Japan’s real GDP expanded marginally by 0,2 per cent \nas it recovered from a mild recession, and the US economy grew by a slow 0,4 per cent.\nThe variable economic growth performances of advanced economies in the latter part of 2012 \nhave continued in 2013. The US leads the recovery, supported by positive trends in the labour \nand housing markets and household consumption expenditure – though somewhat countered by \nan expected drag on growth from fiscal consolidation. Real GDP growth in the US is expected to \naccelerate from 1,9 per cent in 2013 to 3,0 per cent in 2014.\nThe outlook for some of South Africa’s other major advanced-economy trading partners is less \npositive. The IMF’s forecast for the euro area has been revised in January 2013 to a contraction \nof 0,2 per cent and further to 0,3 per cent in April, with a gradual strengthening in the quarterly \noutcome to 1,0 per cent by the fourth quarter of 2013. ECB estimates for the euro area are \nsimilar, with growth of 1,4 per cent expected in 2014. The pace of the recovery is expected to \nbe considerably slower in the periphery. In April 2013 the euro area manufacturing Purchasing \nManagers’ Index (PMI) remained below 50 at 46,7, while the contraction in Europe’s car market \naccelerated to a 10,2 per cent year-on-year decline in March 2013.\nIn 2012 the German economy slowed to 0,7 per cent, with its GDP contracting by 2,7 per \ncent in the fourth quarter. This was followed by weak positive growth in the first quarter of \n2013, with the manufacturing PMI temporarily breaching 50 in February 2013. The ECB and the \nBundesbank project 0,4 per cent growth in real GDP for Germany in 2013 and 1,8 to 1,9 per cent \nin 2014. The European Commission’s GDP growth estimate for France is a small contraction of \n0,1 per cent in 2013 before improving to growth of 1,1 per cent in 2014. The recovery in the UK \nis progressing slowly in the context of ongoing fiscal consolidation, with the IMF projecting the \neconomy to expand by 0,7 per cent in 2013 and 1,5 per cent in 2014.\nMonetary Policy Review June 2013\n16\nTable 6\t\nIMF projections of world growth and inflation for 2013 and 2014*\nPer cent\nShare of \nglobal \nGDP**\nReal GDP growth\nConsumer\nprice \ninflation\n2012\n2013\n2014\n2013 2014\nWorld............................................................\n100,0\n(3,6)\n[3,5]\n3,3\n(4,1)\n[4,1]\n4,0\n3,8\n3,8\nAdvanced economies..................................\n50,1\n(1,5)\n[1,4]\n1,2\n(2,3)\n[2,2]\n2,2\n1,7\n2,0\nUnited States............................................\n18,9\n(2,1)\n[2,0]\n1,9\n(2,9)\n[3,0]\n3,0\n1,8\n1,7\nJapan........................................................\n5,6\n(1,2)\n[1,2]\n1,6\n(1,1)\n[0,7]\n1,4\n0,1\n3,0\nEuro area..................................................\n13,7\n(0,2) [-0,2] -0,3\n(1,2)\n[1,0]\n1,1\n1,7\n1,5\nUnited Kingdom........................................\n2,8\n(1,1)\n[1,0]\n0,7\n(2,2)\n[1,9]\n1,5\n2,7\n2,5\nCanada.....................................................\n1,8\n(2,0)\n[1,8]\n1,5\n(2,4)\n[2,3]\n2,4\n1,5\n1,8\nOther advanced economies......................\n7,3\n(3,0)\n[2,7]\n2,5\n(3,5)\n[3,3]\n3,4\n2,1\n2,4\nEmerging-market and developing countries.\n49,9\n(5,6)\n[5,5]\n5,3\n(5,9)\n[5,9]\n5,7\n5,9\n5,6\nSub-Saharan Africa...................................\n2,5\n(5,7)\n[5,8]\n5,6\n(5,5)\n[5,7]\n6,1\n7,2\n6,3\n South Africa...........................................\n0,7\n(3,0)\n[2,8]\n2,8\n(3,9)\n[4,1]\n3,3\n5,8\n5,5\nCentral and eastern Europe......................\n3,4\n(2,6)\n[2,4]\n2,2\n(3,2)\n[3,1]\n2,8\n4,4\n3,6\nCommonwealth of Independent States.....\n4,3\n(4,1)\n[3,8]\n3,4\n(4,2)\n[4,1]\n4,0\n6,8\n6,6\nDeveloping Asia........................................\n25,1\n(7,2)\n[7,1]\n7,1\n(7,5)\n[7,5]\n7,3\n5,0\n5,0\nChina ...................................................\n14,9\n(8,2)\n[8,2]\n8,0\n(8,5)\n[8,5]\n8,2\n3,0\n3,0\nIndia......................................................\n5,6\n(6,0)\n[5,9]\n5,7\n(6,4)\n[6,4]\n6,2\n10,8\n10,7\nMiddle East and North Africa....................\n5,8\n(3,6)\n[3,4]\n3,1\n(3,8)\n[3,8]\n3,7\n9,6\n9,0\nLatin America and the Caribbean..............\n8,7\n(3,9)\n[3,6]\n3,4\n(4,1)\n[3,9]\n3,9\n6,1\n5,7\n*\t IMF projections as at October 2012 ( ) and January 2013 [ ] in parenthesis\n** GDP shares based on the IMF’s purchasing power parity valuation of country GDPs for 2012\nSource:\t IMF, World Economic Outlook, various issues\nTable 7\t\nGlobal manufacturing PMI: Overall\nIndex points\n2012\n2013\nCountry\nSep\nOct\nNov\nDec\nJan\nFeb\nMar\nApr\nUnited States.............\n51,6\n51,7\n49,9\n50,2\n53,1\n54,2\n51,3\n50,7\nEuro area...................\n46,1\n45,4\n46,2\n46,1\n47,9\n47,9\n46,8\n46,7\n Germany.................\n47,4\n46,0\n46,8\n46,0\n49,8\n50,3\n49,0\n48,1\n France....................\n42,7\n43,7\n44,5\n44,6\n42,9\n43,9\n44,0\n44,4\nUnited Kingdom.........\n49,0\n47,8\n49,0\n51,0\n50,8\n48,2\n48,6\n49,8\nJapan.........................\n48,0\n46,9\n46,5\n45,0\n47,7\n48,5\n50,4\n51,1\nChina.........................\n47,9\n49,5\n50,5\n51,5\n52,3\n50,4\n51,6\n50,4\nIndia...........................\n52,8\n52,9\n53,7\n54,7\n53,2\n54,2\n52,0\n51,0\nGlobal........................\n48,8\n48,8\n49,6\n50,0\n51,5\n50,9\n51,2\n50,5\n*\t Italics indicate outcomes below the 50 index points neutral level, non-italics outcomes above the 50 index points neutral \nlevel, green an increase in the level in the latest survey, red a decrease and black no change. \nSource: JPMorgan\nIn Japan policy stimulus is expected to be significant, delivering a real GDP boost from fiscal \npolicy alone of about 0,6 per cent in 2013. A weaker currency and external demand-driven \nrebound are expected to help the economy expand by 1,6 per cent in 2013, followed by softer \ngrowth of 1,4 per cent in 2014.\n17\nMonetary Policy Review June 2013\nFor the advanced economies, a slow start in 2013 is projected to be followed by a gradual \nacceleration in the second half of the year, with real GDP growing by around 2 per cent on \naverage. For 2013 as a whole, growth in advanced economies will be broadly the same as \nin 2012 at about 1,2 per cent before increasing to 2,2 per cent in 2014. The Organisation \nfor Economic Co-operation and Development (OECD) composite leading indicator projects a \nmoderate expansion in member economies (Figure 8).\nPercentage change over 12 months\n-20\n-15\n-10\n-5\n0\n5\n10\n15\nFigure 8 \nSelected OECD indicators of global economic activity\n \nComposite leading indicator\nSource: OECD\n \n Industrial production index\n1999\n2001\n2003\n2005\n2013\n2007\n2009\n2011\nEmerging and developing economies\nDecelerating demand from advanced economies helped to slow real GDP growth in emerging-\nmarket and developing economies from 6,4 per cent in 2011 to 5,1 per cent in 2012. These \neconomies have subsequently gathered momentum on the back of policy adjustments, resilient \ndomestic consumption and investment, and improving global demand. Nonetheless, insufficient \nexternal demand and structural constraints will weigh against more robust outcomes in the \nmedium term. The IMF projects that economic growth will increase to 5,3 per cent in 2013 and \n5,7 per cent in 2014.\nGrowth in China and India slowed sharply in 2012, but these economies are expected to grow \nin 2013 by 8,0 per cent and 5,7 per cent respectively. Brazil’s GDP growth rate is expected to \nstrengthen from 0,9 per cent in 2012 to 3,0 per cent in 2013. Russia’s real GDP is forecast to \nexpand in 2013 by 3,4 per cent, as in 2012.\nAccording to the IMF, seven of the world’s ten fastest-growing economies between 2011 and \n2015 will be located in sub-Saharan Africa (SSA), with economic growth in the region projected \nto accelerate from 4,8 per cent in 2012 to an average of about 5,9 per cent in 2013–14. \nEconomic activity in both resource-rich and lower-income economies in SSA is expected to be \nincreasingly broad-based.\nCommodity prices and global inflation\nWeak demand and downwardly revised projected emerging-market growth contributed to a \ngeneral decrease in commodity prices from a recent high in September 2012. The near-term \noutlook for commodity prices reflects a slight softening of oil prices on the back of improved \nsupply prospects. \nMonetary Policy Review June 2013\n18\nSofter commodity prices and the absence of excess demand pressures in the major advanced \neconomies suggest that global inflationary pressures are likely to remain subdued. Global \ninflation fell to about 3,6 per cent in February 2013 from 3,9 per cent in February 2012, and \nis expected to remain close to this level through to 2014. In the US and euro area inflation is \nexpected to ease to below the 2 per cent level, while that of Japan is projected to become \nslightly positive in 2013 before increasing to 3,0 per cent in 2014. \nInflation is expected to remain contained in emerging-market and developing economies, with a \nslight deceleration in consumer price inflation from 5,9 per cent in 2013 to 5,6 per cent in 2014. \nHowever, inflationary pressures are high in some emerging-market and developing countries where \noutput gaps are closing faster. In developing Asia inflation is expected to increase from 4,5 per cent \nin 2012 to 5,0 per cent in 2013 and 2014. China’s inflation is expected to increase modestly to \n3,0 per cent in 2013. In contrast, inflation in SSA is expected to decrease from 9,1 per cent in 2012 \nto 6,3 per cent in 2014.\nFiscal trends\nWith a relatively subdued economic recovery in many parts of the world, gradual fiscal consolidation \nhas remained a challenge due to slower economic growth and the impact of lower spending \non growth. The impact of fiscal consolidation on growth in advanced economies is expected \nto rise somewhat in 2013. In the advanced economies general government deficit ratios have \ndeclined but debt ratios continued to increase, although at a slower pace than in previous years. In \nemerging-market economies debt ratios fell, while deficit ratios increased modestly, but stronger \neconomic growth is expected to improve these ratios going forward (Table 8). \nTable 8\t\nFiscal balances and government debt\t \t\nPer cent of GDP\nProjections\n2010\n2011\n2012\n2013\n2014\nFiscal balances\nWorld........................................................................................\n-6,0\n-4,5\n-4,3\n-3,5\n-3,0\nAdvanced economies................................................................\n-7,8\n-6,6\n-5,9\n-4,7\n-3,8\nEmerging markets.....................................................................\n-3,1\n-1,7\n-2,1\n-2,2\n-2,2\n South Africa...........................................................................\n-5,1\n-4,0\n-4,8\n-4,8\n-4,2\nGeneral government gross debt\nWorld........................................................................................\n79,5\n79,7\n81,1\n79,3\n78,6\nAdvanced economies................................................................\n101,5\n105,5\n110,2\n109,3\n109,5\nEmerging markets.....................................................................\n40,3\n36,7\n35,2\n34,3\n33,6\n South Africa...........................................................................\n35,8\n39,6\n42,3\n42,7\n43,7\nSource: IMF, Fiscal Monitor, April 2013\nOil price developments\nCrude oil prices moderated from October to November 2012, before rising to a recent high \nin February 2013, primarily in response to improved confidence in the global economic \nrecovery. The subsequent marked decline in crude oil prices reflected worse-than-expected \nshort-term economic outcomes and the Organization of the Petroleum Exporting Countries’ \n(OPEC’s) expectations that oil supply would continue to exceed demand for oil by about \n1 million barrels per day.\nBetween November 2012 and February 2013, the international price of crude oil has fluctuated \nbetween a low of US$105,82 per barrel and a high of US$119,34 per barrel. As economic \ngrowth rates stalled and expected growth rates were marked down, the price of Brent crude \n19\nMonetary Policy Review June 2013\ndeclined markedly to US$96,79 per barrel on 17 April 2013 – its lowest level since July 2012. \nSubsequently, the price of Brent crude increased slightly to US$102,21 per barrel on 23 May \n2013 (Figure 9). \nFigure 9 \nPrice of Brent crude oil \n2005\n2004\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\nUS dollar per barrel\n \nBrent crude spot price\n \nFutures prices (24 January 2013)\n \nFutures prices (20 March 2013)\n \nFutures prices (latest: 23 May 2013)\nSource: Bloomberg\n20\n40\n60\n80\n100\n120\n140\n160\nFutures contracts dated 23 May 2013 for delivery in the third and fourth quarters of 2013 traded \nat around US$102,41 and US$101,57 per barrel respectively, as near-term futures prices for \noil caught up with concerns about slowing global economic growth. The International Energy \nAgency (IEA) and OPEC have both lowered their short- and medium-term forecasts of global oil \ndemand for 2013. Over the longer term, supply will be shaped by more rapid economic growth \nin the emerging and developing world, as well as US shale gas production, with the latter \nexpected to expand significantly over the next five years. \nThe persistently high level of the price of Brent crude oil, combined with the weaker exchange \nrate of the rand, imparted both a negative income and a negative price shock to the domestic \neconomy. In addition to increasing inflation, these shocks have diverted households’ and firms’ \nspending power, and pushed up the deficit on the trade account of the balance of payments. \nMore recent weakness in oil prices, if maintained, could support an easing of domestic \ninflationary pressures in coming months.\nInternational monetary policy developments\nSince the previous MPR, the global trend of monetary easing has continued with greater \nuse of quantitative easing (QE) and increased forward guidance. After a range of interest \nrate reductions in 2012, most economies maintained existing monetary policy settings \nin order for the full policy impact to become visible. Some emerging-market economies \ncontinued to ease policy gradually in 2013. On balance, policies have been set to support \neconomic growth, which has consistently underperformed in most countries. Price \noutcomes remain a key concern for all central banks, with considerable variation in \nemphasis on deflation and inflation across advanced and emerging economies. Recent \nweakness in global growth has again, on balance and with variation across countries, \nmoderated global inflation pressures. \nMonetary Policy Review June 2013\n20\nPolicy in advanced economies\nSubdued inflationary pressures and poor growth facilitated a continuation of accommodative \nmonetary policy in advanced economies. This led to improved global financial market conditions \nand risk appetite, along with signs of resilience in real economic activity in 2013. Policy in the US \ncontinues to set the tone across advanced economies. The Fed has maintained the federal \nfunds rate at zero to 0,25 per cent since December 2008. This rate was recently linked explicitly \nto unemployment remaining above 6,5 per cent, and inflation (between one and two years \nahead) no more than 0,5 percentage points above the 2 per cent longer-run goal, and with \ninflation expectations remaining well anchored.4 \nUnsterilised purchases of securities, or QE, have also continued, with the asset purchase \nprogramme accumulating US$40 billion of mortgage-backed securities per month. After the \ncompletion of the maturity extension programme at the end of 2012, the Fed commenced with \nthe purchases of longer-term Treasury securities at an initial pace of US$45 billion per month. \nThese measures supported the mortgage market, exerted downward pressure on longer-\nterm interest rates and eased financial conditions. The Fed’s balance sheet contracted by \nUS$20 billion in 2012 to US$2,9 trillion but is projected to expand by US$1,0 trillion in 2013.\nTable 9\t\nCentral bank total assets\nUS$ billions\n2011\n2012\n2013*\nBank of England..............................................................\n452,8\n662,4\n616,3\nEuropean Central Bank....................................................\n3 605,8\n3 957,5\n3 324,9\nThe United States Federal Reserve..................................\n2 928,5\n2 908,9\n3 354,3\nBank of Japan.................................................................\n1 613,5\n1 661,7\n1 552,8\n*\t\nTotal assets to date: Bank of England (15 May 2013), European Central Bank (17 May 2013), the United States Federal \nReserve (15 May 2013) and Bank of Japan (30 April 2013).\nSources:\tNational central banks\nSince the previous MPR, the BOJ proceeded with aggressive monetary easing by steadily \nincreasing the outstanding amount of the Asset Purchase Program and also announcing the \nintroduction of the Open-Ended Asset Purchases Method (i.e., without a set termination date) from \nJanuary 2014 at ¥13 trillion per month. Its Loan Support Program was enhanced by establishing \nan unlimited Stimulating Bank Lending Facility to provide long-term funds. These measures are \nintended to make financial conditions more accommodative, encourage lower long-term interest \nrates and proactive credit demand, and to reduce risk premiums.\nIn January 2013 the BOJ changed from a medium-term inflation goal of 1 per cent to a long-\nterm price stability target of 2 per cent. This policy adjustment was followed in early April with \nthe introduction of further quantitative and qualitative monetary easing to achieve an inflation \ntarget of 2,0 per cent as soon as possible within two years. The BOJ changed the main \noperating target for money-market operations from the uncollateralised overnight call rate to \nthe monetary base, and intends to almost double the monetary base over the next two years \nby injecting about ¥60–70 trillion per year into the Japanese economy. In addition, to bring \nabout a further decline in interest rates across the yield curve, the BOJ will purchase Japanese \nGovernment Bonds (JGBs) of about ¥50 trillion per annum while extending their maturity from \nless than three years to about seven years. With the aim of lowering the risk premia of assets, \nthe BOJ will purchase exchange-traded funds and real-estate investment trusts. Collectively, \nthese measures are intended to overcome almost two decades of deflation, achieve sustainable \neconomic growth and ensure financial stability in Japan.\nIn response to lower inflation and rising unemployment in 2013, the ECB lowered its rate on main \nrefinancing operations in May to 0,50 per cent after keeping it at 0,75 per cent since July 2012. \nMonetary policy in the euro area has remained accommodative, supported by various refinancing \noperations, unconstrained liquidity for banks, and the Outright Monetary Transactions (OMTs) \n4.\t The focus on \nspecific, quantifiable \nthresholds for \nunemployment and \ninflation is referred to \nas the ‘Evans Rule’.\n21\nMonetary Policy Review June 2013\nbond-buying program. These measures are intended to repair the transmission of monetary \npolicy and to equalise sovereign borrowing costs across the euro area as reflected by significant \nnarrowing of peripheral country bond spreads. \nTable 10\t\nSelected central bank interest rates\nPer cent\nCountries\n25 Oct 2012 23 May 2013\nReal \ninterest rate*\nLatest decision\nCumulative\n2012\n2013\nSouth Africa..................\n5,00\n5,00\n-0,20\n23 May 2013\n(-0,50)\n(0,00)\nUnited States................ 0,00 – 0,25 0,00 – 0,25\n -1,80 – -1,55\n1 May 2013\n(0,00)\n(0,00)\nJapan**.........................\n0,30\n0,30\n-2,85\n22 May 2013\n(0,00)\n(0,00)\nEuro area......................\n0,75\n0,50\n-1,10\n2 May 2013\n(-0,25)\n(-0,25)\nUnited Kingdom............\n0,50\n0,50\n-1,96\n9 May 2013\n(0,00)\n(0,00)\nCanada.........................\n1,00\n1,00\n-0,78\n17 Apr 2013\n(0,00)\n(0,00)\nChina............................\n6,00\n6,00\n2,50\n8 Apr 2013\n(-0,56)\n(0,00)\nIndia..............................\n8,00\n7,25\n-0,55\n3 May 2013\n(-0,50)\n(-0,75)\nRussia...........................\n8,25\n8,25\n2,65\n15 May 2013\n(0,25)\n(0,00)\nBrazil.............................\n7,25\n7,50\n2,20\n17 Apr 2013\n(-3,75)\n(0,25)\nAustralia........................\n3,50\n2,75\n -0,25 – 0,75\n7 May 2013\n(-1,25)\n(-0,25)\nNew Zealand.................\n2,50\n2,50\n1,10\n24 Apr 2013\n(0,00)\n(0,00)\nSwitzerland................... 0,00 – 0,25 0,00 – 0,25\n -0,20 – 0,05\n14 Mar 2013\n(0,00)\n(0,00)\nIsrael.............................\n2,25\n1,50\n-0,30\n13 May 2013\n(-0,75)\n(-0,50)\nSouth Korea..................\n2,75\n2,50\n-0,30\n9 May 2013\n(-0,50)\n(-0,25)\nChile.............................\n5,00\n5,00\n2,00\n16 May 2013\n(-0,25)\n(0,00)\nPoland..........................\n4,75\n3,00\n1,40\n8 May 2013\n(-0,25)\n(-1,00)\nTurkey...........................\n5,75\n4,50\n-0,40\n16 May 2013\n(-0,25)\n(-1,00)\nNigeria..........................\n12,00\n12,00\n1,40\n21 May 2013\n(0,00)\n(0,00)\nGhana...........................\n15,00\n16,00\n6,70\n22 May 2013\n(2,50)\n(1,00)\nKenya...........................\n13,00\n8,50\n1,40\n7 May 2013\n(-7,00)\n(-2,25)\n*\t\nThe real interest rate is calculated as the difference between the central bank’s current nominal policy rate and one-year-\nahead projected inflation.\n**\t The Bank of Japan announced a change in its monetary target from the uncollateralised overnight call rate to the monetary \nbase (to increase by ¥60–¥70 trillion annually) on 4 April 2013, thus the basic loan rate is now used in the table.\nSources:\tNational central banks and Bloomberg\nIn the UK, the Bank of England (BoE) maintained the official bank rate paid on commercial \nbank reserves at 0,5 per cent. The stock of asset purchases financed by issuance of central \nbank reserves was also maintained at the £375 billion level set in July 2012 and has been \nrolled out at an average rate of £1,1 billion5 per month since then. Together with the Funding \nfor Lending Scheme,6 which was extended until January 2015, these asset purchases are \nintended to ease credit conditions in the UK. Small and medium-sized enterprises benefited \nfrom this source of credit extension, and money-market interest rates declined to below the \npolicy rate. \nFollowing the UK government review of the monetary policy framework, the Chancellor of the \nExchequer updated the remit of the BoE in March 2013. While a flexible inflation-targeting \nframework and a 2 per cent inflation target are retained, the new BoE remit requires clarification \nof policy trade-offs and recognises that inflation may temporarily deviate from the target to avoid \nundesirable output volatility. \nAfter leaving its cash rate unchanged at 3,0 per cent at successive policy meetings since the \nlast reduction in December 2012, the Reserve Bank of Australia (RBA) lowered the cash rate by \n5.\t The monthly \naverage is the \noutcome of both \nredemptions and \ninactivity over the \nperiod 5 July 2012 to \n2 May 2013.\n6.\t The Funding for \nLending Scheme \nallows banks to borrow \nat a ratio of 10 to 1 for \nevery pound lent out to \nsmall companies.\nMonetary Policy Review June 2013\n22\n25 basis points to 2,75 per cent in May. The RBA noted that the inflation outlook afforded scope \nto ease the policy rate further to encourage sustainable growth in the economy, consistent with \nachieving the inflation target.\nPolicy in emerging-market economies\nEmerging-market economies continued to deal with limited fiscal space, accelerating credit \ngrowth and divergent inflation outlooks. As shown in Table 10, real policy rates in most emerging \nmarkets remain positive, compared to the negative real rates in advanced economies. Within \nthe Brazil, Russia, India, China and South Africa group of countries (BRICS), South Africa had \nthe lowest nominal policy rate and the second-lowest real policy rate.\nDuring its first quarterly meeting of 2013, the Monetary Policy Committee of the People’s Bank \nof China (PBC) assessed China’s real economy as having maintained its growth momentum \nand the financial sector as operating smoothly, with prices stable but with the future trend of \ninflation uncertain. Despite policy rate stability, the PBC has drained liquidity of 638 billion yuan \n(US$102,7 billion) for the year to date through repurchase transactions.\nIn order to support economic growth, the Reserve Bank of India (RBI) reduced its policy repo \nrate by 25 basis points to 7,75 per cent in January 2013, followed by equivalent reductions in \nMarch and May. The RBI indicated limited room for further monetary easing. Brazil’s Monetary \nPolicy Committee (COPOM) increased the Selic rate by 0,25 basis points in April 2013 in \nresponse to higher inflation and a deteriorating forecast for inflation. The move comes in the \nwake of reductions in 2012 that were intended to support the rapidly slowing economy. Since \nDecember 2012, the Central Bank of the Republic of Turkey (CBRT) reduced policy rates twice, \nby 50 basis points on each occasion. The Banco de México also lowered its policy rate by \n50 basis points in March 2013 to 4,0 per cent, the first change in rates since July 2009.\nDomestic economic developments \nand growth outlook\nMonetary policy decisions are made on the basis of current and expected domestic \ndevelopments in the wider economy. This section reviews medium-term developments, and \nassesses the near-term outlook in terms of prospects, risks and uncertainties for inflation.\nExchange rate developments \nThe rand continues to be influenced by external developments and is highly sensitive to \nchanges in global risk perceptions as reflected by portfolio capital flows. Since the previous \nMPR, however, domestic economic and political developments have become considerably \nmore important factors in rand movements. Currency volatility creates uncertainty and \ncurrency weakness poses an increased upside risk to the inflation outlook, among other \neffects. On a bilateral basis, the trend of the rand diverged from that of emerging markets, \nweakening in steps since October 2012 to its lowest post-crisis level of R9,66 to the \nUS dollar in May 2013. On a nominal trade-weighted basis, the rand has depreciated by \n7,4 per cent since the end of October 2012, with the real effective exchange rate (REER) at \nits weakest level since early 2009.\nThe rand has exhibited a general trend depreciation since about May 2012, with both global and \ndomestic factors contributing to significant short-term volatility, as shown in Figures 10 and 11. \nDivergence from the trend in other emerging markets started in May 2012 and has escalated \nfrom October 2012. South Africa’s expected inclusion in the Citigroup World Government Bond \nIndex (WGBI) stabilised the rand somewhat in the period from June to September, before the \ninclusion actually started and before mining-sector events resulted in further weakness. \n23\nMonetary Policy Review June 2013\n \n90\n95\n100\n105\n110\n115\n120\nIndices: 3 September 2012 = 100\nDec\nJan\nFeb\n2012\n2013\nMar\nMay\nJun\nApr\nSep\nOct\nNov\nFigure 10 \nExchange rate performance against the US dollar\n \nSouth African rand\n \nBrazilian real\n \nMexican peso \n \n \nSources: Reuters and own calculations\n \nCanadian dollar\n \nAustralian dollar \nRand per dollar\nRand per euro\n2007\n2008\n2009\n2010\n2011\n2012\n2013\nFigure 11 \nBilateral exchange rates of the rand\n \nRand per US dollar\n \nRand per euro (right-hand scale)\nSource: Bloomberg \n6\n8\n10\n12\n6\n9\n12\n15\nFrom November 2012 to early January 2013, the rand appreciated by 5,5 per cent against the US \ndollar. With the dollar strengthening due to better economic news in late December 2012 and early \nJanuary 2013, the rand began to depreciate in a more sustained way. The crisis in Cyprus \ngenerated further impetus to the depreciation as investors sought out safe havens, thus the US \ndollar appreciated. This rise in risk aversion towards emerging markets can be seen in the \nJPMorgan Emerging Markets Bond Index Plus (EMBI+) spreads,7 which, as shown in Figure 12, \nreveal significant deterioration in sovereign risk in 2013 towards the end of March. The retracing of \nthe EMBI+ towards lower levels since March may have reflected expectations of sustained \nmonetary accommodation and liquidity in global markets, rather than a prelude to currency \nappreciation. Subsequently, risk aversion again increased markedly during May. \n7.\t The EMBI+ is a \nUS dollar emerging-\nmarkets debt \nbenchmark that tracks \nreturns for actively \ntraded external \nemerging-market debt.\nMonetary Policy Review June 2013\n24\nBasis points\n100\n150\n200\n250\n300\n350\nFigure 12 \nSovereign risk spreads\n \nEMBI+ spread\n \nEMBI Mexico\nSource: JPMorgan\n \nEMBI South Africa\n \nEMBI Brazil\nSep\nOct\n2012\n2013\nNov\nDec\nJan\nFeb\nMar\nApr\nMay\nJun\nCapital flows into rand-denominated assets shifted from bonds to equities, in particular from \nDecember 2012. This shift reflected a pause in non-resident purchases of bonds, and supported \na moderation in share market volatility (VIX®).8 As from March 2013 net purchases again favoured \nbonds. Cumulative net purchases of bonds amounted to R22,3 billion in 2013 up to 23 May \ncompared with R88,6 billion in the whole of 2012. Non-resident interest in shares changed from \nnet sales of R3,4 billion in 2012 to net purchases of R13,0 billion to 23 May 2013 (see Figure 13).\n-25\n-20\n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\n0\n10\n20\n30\n40\n50\nMay\nMar\nJan\nNov\nSep\nJul\nMay\nMar\nJan\nNov\nSep\nJul\nMay\nFigure 13 \nNon-resident net purchases of domestic securities and \n \nrisk aversion\nIndex\nR billions\n \nNet equity purchases\n* Data up to 23 May 2013\n*\nVIX® (right-hand scale)\nNet bond purchases\n2011\n2012\n2013\nSources: JSE Limited and I-Net Bridge\n8.\t The Chicago Board \nOptions Exchange \nMarket Volatility Index \n(VIX®) measures the \nimplied volatility of \nS&P 500 index options \nand serves as a \npopular indicator of \ninvestors’ perception \nof risk.\n25\nMonetary Policy Review June 2013\nProspects for capital inflows are less certain than they have been in recent years, as some of \nthe underlying drivers of flows – the carry trade9 and low returns in advanced economies – \ncontinue to evolve with global conditions. A reduction in the pace of capital inflows to South \nAfrica – either as part of the trend affecting the emerging-market economies or as an idiosyncratic \nshock to South Africa – will affect the value of the currency and sustainability of the current-\naccount deficit, with potentially serious policy implications.\nIn recent months domestic factors have played a critical role in driving down the currency. \nResurgent labour market instability, the effect of work stoppages on exports, the trade \ndeficit and a ratings downgrade by Fitch in January 2013 (following that of Moody’s in \nSeptember, and Standard & Poor’s (S&P) in October 2012) contributed strongly towards a \n14,3 per cent depreciation against the US dollar from 1 January to date. These factors and \nunderlying macroeconomic risks in the form of twin deficits continue to differentiate South \nAfrica from other emerging markets, many of which exhibit significantly better growth and \nmacroeconomic fundamentals. \nThe nominal effective exchange rate (NEER) post-crisis peak occurred in December 2010. Since \nthen the NEER has experienced persistent weakness, declining by 23,3 per cent as shown in \nFigure 14.10 The weighted average NEER is based on trade in, and consumption of, manufactured \ngoods between South Africa and its most important trading partners, and provides a nominal \nmeasure of competitiveness. \nIndex: 2000=100 (foreign currency per rand)\nIndex\n2007\n2008\n2009\n2010\n2011\n2012\n2013\nFigure 14 \nExchange rate of the rand and commodity prices\nNominal effective exchange rate of the rand (NEER)\nThompson Reuters/Jefferies CRB Total Return Index* (right-hand scale)\n40\n60\n80\n100\n100\n200\n300\n400\n500\n* The TRJ/CRB Total Return Index tracks international commodity prices\nSources: Bloomberg and South African Reserve Bank \nThe monthly average NEER depreciated to 61 index points in March and April 2013 – its most \ndepreciated level since early 2009. Some part of the currency weakness can be attributed to \nsofter commodity prices, as suggested by an index that tracks returns to commodities which \nmirror the rand quite closely (Figure 14).11\nThe REERs12 of developed commodity-exporting countries, such as Australia and Canada, have \nmoved sideways since mid-2011 despite the decline in commodity prices. REERs provide an \ninflation-adjusted measure of competitiveness. South Africa’s REER generally follows that of other \ncommodity exporters, but the pattern has broken down as from mid-2011 (Figure 15). South \nAfrica’s REER depreciated by 10,7 per cent from March 2012 to April 2013 – its weakest level since \nearly 2009, as with the NEER. This implies that South Africa’s exports have become less expensive \nrelative to its trading partners and competitors, and ought to support export volumes.\n9.\t For further details \non the carry trade and \nthe rand as a carry \ntrade target, see \nBox 2 in the May 2011 \nSouth African Reserve \nBank Monetary Policy \nReview (Pretoria: \nSouth African Reserve \nBank, May 2011) http://\nwww.resbank.co.za/\nPublications/Pages/\nPublications-Home.\naspx).\n10.\tThe methodology \napplied is described in \nan article in the South \nAfrican Reserve Bank \nQuarterly Bulletin \n(Pretoria: South \nAfrican Reserve Bank, \nDecember 2008) \nhttp://www.resbank.\nco.za/Publications/\nPages/Publications-\nHome.aspx. The \nweighted average \nexchange rate of the \nrand is calculated \nagainst 15 currencies. \nThe weights of the five \nmajor currencies are in \nbrackets: \neuro (34,82), \nUS dollar (14,88), \nChinese yuan (12,49), \nBritish pound (10,71) \nand Japanese \nyen (10,12). \nIndex 2000 = 100.\n11.\tThe TRJ/CRB Total \nReturn Index reflects \na long-only, broadly \ndiversified investment \nin commodities.\n12.\tThe Bank \nfor International \nSettlements (BIS) \nREER indices include \na total of 61 entities, \nincluding individual \neuro area countries \nand the euro area \nas a separate entity. \nThe base year for the \nindices is 2010 and the \nREERs are geometric-\nweighted averages \nof bilateral exchange \nrates adjusted by \nrelative consumer \nprices.\nMonetary Policy Review June 2013\n26\nIndices: 2010 = 100\n2007\n2008\n2009\n2010\n2011\n2012\n2013\nFigure 15 \nReal effective exchange rates\n70\n80\n90\n100\n110\n120\n \nSouth Africa \n \nCanada\n \n \nSource: Bank for International Settlements\n \nAustralia\n \nMexico\n \nBrazil\nLabour markets \nLabour markets in South Africa remained constrained by subdued economic growth and \nincreased instability as unrest and wage demands spread from mining to agriculture and \nbeyond. These developments pose substantial risks to the outlook for economic growth, \nemployment and inflation. Unit labour cost growth – a primary driver of the inflation \noutlook – accelerated in 2012 to an average rate slightly higher than the upper band of \nthe inflation target range, as increases in remuneration outpaced the marginal increases \nin productivity. Employment creation remained subdued, with the recovery in formal non-\nagricultural employment continuing to lag real economic activity since the economic \nrecovery commenced.\nThe cost of labour per unit of output in the economy, known as ‘unit labour costs’,13 grew by \nabout 10 per cent per year between 2008 and 2010, before slowing to growth of 5,9 per cent in \n2011 and 6,3 per cent in 2012. Over the course of 2012, unit labour costs accelerated from \nquarter to quarter (Figure 16), rising from 5,5 per cent in the final quarter of 2011 to 7,4 per cent \nin the third quarter of 2012, before decelerating to 5,7 per cent.\nAverage wage settlements in the collective bargaining system moderated slightly in 2012 from \n2011, growing by 7,6 per cent, according to the Andrew Levy Wage Settlement Survey of \n2012 (Figure 17). With inflation rising in 2012 compared to 2010 and 2011, the significant real \nwage gains of those years have moderated somewhat but remain positive. Outcomes in 2013 \nhave increased, suggesting considerable real wage rigidity in the economy despite sluggish \neconomic growth and weak job creation. \n13.\tUnit labour costs \nrepresent a link \nbetween productivity \nand the cost of labour \nin producing output. \nThe Bank calculates \nquarterly unit labour \ncosts as the ratio \nof total salaries and \nwages to gross value \nadded in the formal \nnon-agricultural sector.\n27\nMonetary Policy Review June 2013\nPercentage change over four quarters\n2004\n2005\n2007\n2008\n2009\n2010\n2011\n2012\n2006\nFigure 16 \nRemuneration per worker, labour productivity and \n \nunit labour cost in the formal non-agricultural sector\n \nNominal unit labour cost\n \nLabour productivity\n \n \nSources: Statistics South Africa and South African Reserve Bank calculations\n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nRemuneration per worker\nPer cent\n1994\n1996\n1998\n2000\n2002\n2004\n2006\n2008\n2010\n2013*\nFigure 17 \nAverage annual inflation and wage settlements\n \nCPI\n \n* Data for 2013 are for the first three months of the year \nSources: Andrew Levy Employment Publications and Statistics South Africa\n0\n2\n4\n6\n8\n10\n12\nAverage wage settlements\nTable 11 shows the average wage settlements in the major sectors in 2012 reported by Andrew \nLevy Employment Publications. In 2012 the highest and lowest average wage settlements \nwere, as in 2011, respectively in the mining- and in the municipal and utility sectors. The rate of \nincrease in settlements reached in the first quarter of 2013 ranged from 6,0 per cent in the retail \nand catering sector to 10,0 per cent in the transport and freight sector.\nMonetary Policy Review June 2013\n28\nTable 11\t\nAverage percentages of wage settlement by major sector in 2012\nSector\nPer cent\nBuilding and construction................................................................................................... \n7,8\nChemical............................................................................................................................\n7,8\nClothing and textile ...........................................................................................................\n7,5\nCommunication.................................................................................................................. \n7,5\nFinance..............................................................................................................................\n7,0\nFood and agriculture.......................................................................................................... \n7,1\nFood and manufacturing....................................................................................................\n7,3\nHealth and education.........................................................................................................\n7,5\nMetal and engineering........................................................................................................\n8,0\nMining................................................................................................................................\n8,6\nMunicipal and utility............................................................................................................\n6,8\nPaper and printing............................................................................................................. \n7,4\nRetail and catering.............................................................................................................\n7,7\nTransport and freight.......................................................................................................... \n8,0\nSource: Andrew Levy Employment Publications\nTotal employment creation in the formal non-agricultural sector as reported by Stats SA’s \nQuarterly Employment Statistics (QES) survey has remained positive but subdued since June \n2010. Total employment increased marginally from 8,379 million in the fourth quarter of 2011 to \n8,461 million in the final quarter of 2012 – remaining below the peak of 8,512 million recorded in \nthe corresponding quarter of 2008 (Table 12). \nTable 12\t\nEmployment in formal non-agricultural industries\nThousands\nTotal employment\nIndustry\n2008\n2010\n2011\n2012\n4th qr\n1st qr\n4th qr\n3rd qr\n4th qr\nMining and quarrying............................................................. \n518\n491\n518\n518\n519\nManufacturing........................................................................\n1 275\n1 187\n1 158\n1 150\n1 154\nElectricity, gas and water supply............................................\n59\n56\n59\n62\n62\nConstruction..........................................................................\n474\n418\n426\n434\n429\nWholesale trade and retail trade.............................................\n1 747\n1 630\n1 700\n1 690\n1 709\nTransport, storage and communication..................................\n366\n359\n369\n372\n383\nFinancial intermediation, insurance, real-estate and \nbusiness services...................................................................\n1 914\n1 742\n1 831\n1 835\n1 841\nCommunity, social and personal services...............................\n2 159\n2 203\n2 318\n2 378\n2 364\nTotal.......................................................................................\n8 512\n8 086\n8 379\n8 439\n8 461\nSource:\t Statistics South Africa Quarterly Employment Statistics\nThe more recent outcomes of the Quarterly Labour Force Survey (QLFS) show a deterioration \nin total employment in the first quarter of 2013, including a rise in the unemployment rate to \n25,2 per cent from 24,9 per cent in the fourth quarter of 2012, caused by a rise in labour force \nparticipation. The recovery in formal non-agricultural employment has continued to lag that of \nreal economic activity since the economic recovery commenced (Figure 18). \n29\nMonetary Policy Review June 2013\nIndices: First quarter 2008 = 100\n90\n95\n100\n105\n110\n115\nFigure 18 \nNon-agricultural economic activity and employment*\n \nReal GDP excluding agriculture\n* Data is seasonally adjusted\nSources: Statistics South Africa and South African Reserve Bank\n \nFormal non-agricultural employment\n2013\n2012\n2008\n2009\n2010\n2011\nReal-estate and equity prices\nThe real-estate market shows signs of a slight improvement in demand, along with a positive \nincrease in real house prices. Domestic share prices scaled new highs in line with improved \ninternational financial market conditions, but in some contrast to softer commodity prices \nand labour unrest in the resources sector.\nThe real-estate market continues to be constrained by the fragile domestic economic recovery, \nhigh household debt levels and limited supply of mortgage finance. These factors are mirrored \nin nominal house price growth which, since October 2009, has grown at a subdued 4,5 per cent \nper year as recorded by First National Bank (FNB) and Lightstone. Absa’s House Price Index, \nthough more volatile, recorded a positive rate of change from August 2012, and increased \nstrongly from February 2013, the highest growth rates in any of the indices since June 2010 \n(see Figure 19). Adjusted for inflation, real house prices increased by 5,0 per cent in April 2013.\nPercentage change over 12 months\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n-20\n-10\n0\n10\n20\n30\n40\n \nAbsa\n \nLightstone\nSources: Absa, First National Bank, Lightstone and own calculations\nFigure 19 \nHouse prices \n \nFirst National Bank\n \nAbsa: Real\nMonetary Policy Review June 2013\n30\nInternational financial market conditions continued to improve as accommodative monetary \npolicies (in the form of low interest rates and increased global liquidity) encouraged greater \nrisk-taking by investors. The FTSE/JSE All-Share Price Index (Alsi) moved higher in line with \ninternational markets and following the trend in emerging markets. A stronger recovery in the US \neconomy appears to be supporting a rise in share prices there, beyond the levels reached prior \nto the Lehman crisis in October 2007. Figure 20 indicates the disparity between equity markets \nas the euro area remains weighed down by the still-unresolved sovereign debt crisis. \nIndices: 2 January 2007 = 100\n2007\n2008\n2009\n2010\n2011\n2012\n2013\nFTSE/JSE All-Share Index\nEuro area (Dow Jones Euro Stoxx 50)\nBrazil (Bovespa)\nAustralia (ASX All Ordinaries)\nFigure 20 \nInternational share price indices*\n0\n50\n100\n150\n200\n250\nUnited States (S&P 500)\nTurkey (Istanbul)\nMexico (Mexico City IPC)\nCanada (Toronto 300 Composite)\n* Based on local currency share prices\nSources: JSE Limited and I-Net Bridge\nThe strong performance of domestic shares continued as the Alsi surpassed its previous record \nhigh of 22 May 2008 on 17 January 2012, and then scaled successive highs, breaching the \n40 000 index level in early 2013 to a new all-time high of 41 836 index points on 22 May 2013. \nIndices: 2 January 2007 = 100\n2007\n2008\n2009\n2010\n2011\n2012\n2013\nFTSE/JSE:\n \nAll-Share Index\n \nIndustrial Index\nSources: JSE Limited, I-Net Bridge and own calculations\nFigure 21 \nDomestic share price indices\n50\n100\n150\n200\n250\n300\nAll-Share Index: Real \nResources Index\nFinancial Index\n31\nMonetary Policy Review June 2013\nThese gains were supported by trends in global equities through dual-listed share prices and \nthe impact of the depreciation of the rand. Year to date the Alsi decreased in US dollar terms by \n7,6 per cent, while increasing by 4,1 per cent in rand terms. Since October 2012, the Alsi was \nsupported by the performance of the Industrial and Financial Indices, with sideways movement \nin the Resources Index reflecting softer commodity prices and domestic labour unrest. In real \nterms, the Alsi increased by 3,7 per cent from September 2012 to April 2013 but still yielded an \noverall loss compared to May 2008 (Figure 21).\nFiscal policy \nIn the context of subdued global and domestic economic growth, the 2013 Budget \nmaintained its countercyclical approach. The weaker growth outcome for 2012 and into \n2013 resulted in an increase in the budget deficit as revenue underperformed. Though fiscal \nconsolidation has been delayed, the focus of the budget remains on fiscal sustainability and \nnational development through investment and structural reforms.\nThe February 2013 Budget Review projected a small countercyclical rise in the consolidated \ndeficit for the fiscal year 2012/13 from 4,8 per cent of GDP in the 2012 Medium Term Budget \nPolicy Statement (MTBPS) to 5,2 per cent of GDP. With GDP growth slowing and revenue coming \nin weaker than expected, spending plans have been kept stable. Consolidated government \nrevenue for the fiscal year 2012/13 as shown in Table 13 amounted to R887,8 billion, which was \nlower than the estimated R900,6 billion in 2012.\nFor 2013/14, the projected GDP outcome is expected to help reduce the consolidated government \ndeficit to 4,6 per cent, somewhat lower than the 4,8 per cent projected for 2012/13 in the October \n2012 MTBPS. The projected consolidated budget deficit for 2015/16 is 3,1 per cent of GDP.\nTable 13\t\nPublic finance data\n2011/12\n2012/13\n2013/14 2014/15 2015/16\nOutcome\nMTBPS \nestimates\nBudget \nestimates\nMedium-term estimates\nConsolidated government* (R billions)\nRevenue..........................................................\n836,9\n900,6\n887,8\n985,7\n1 091,1\n1 199,8\nExpenditure.....................................................\n954,2\n1 057,1\n1 055,9\n1 149,4\n1 244,3\n1 334,1\nBudget balance...............................................\n-117,3\n-156,5\n-168,0\n-163,7\n-153,2\n-134,4\nTotal net loan debt**........................................\n989,7\n1 166,0\n1 165,1\n1 357,3\n1 544,5\n1 719,8\nAs a percentage of GDP\n \n \n \n \n \n \nBudget balance...............................................\n-3,9\n-4,8\n-5,2\n-4,6\n-3,9\n-3,1\nTotal net loan debt**........................................\n33,3\n35,7\n36,3\n38,6\n39,8\n40,3\nPublic-sector borrowing requirement...............\n5,5\n7,1\n 7,4\n 6,4\n 5,2\n 4,4\n*\t\nIncludes national government, provinces, social security funds and selected public entities \n**\t\nNational government\nSources: National Treasury Medium Term Budget Policy Statement (MTBPS), October 2012 and Budget Review 2013\nGovernment took steps to manage the expected widening of the budget deficit by spelling out \nadditional measures to control spending. Real expenditure growth is reduced to an average \nof 2,3 per cent per annum over the Medium Term Expenditure Framework (MTEF) period \ncompared to 2,9 per cent in the 2012 MTBPS.\nLargely as a result of the wider budget deficit, the 2013 Budget Review projects the public-\nsector borrowing requirement (PSBR) to increase from 7,1 per cent indicated in the 2012 Budget \nReview to 7,4 per cent of GDP in 2012/13, before declining to 4,4 per cent in 2015/16. The \ngrowth in the PSBR has also reflected the borrowing required by non-financial public-sector \nenterprises and corporations for capital expenditure, which has averaged 2,0 per cent of GDP \nMonetary Policy Review June 2013\n32\nsince 2007/08. Planned spending on public-sector infrastructure over the next three years of the \nMTEF period amounts to R827 billion, and the value of major public-sector projects in progress \nor under consideration until 2023 amounts to R3,6 trillion.\nSubstantial budget deficits and the slow economic recovery have worsened South Africa’s debt \nposition in recent years. With the projected decline in the budget deficit over the MTEF period, \ntotal net loan debt is expected to stabilise in 2015/16 at R1,7 trillion and as a ratio to GDP at \n40,3 per cent compared with a ratio of 39,2 per cent indicated in the 2012 MTBPS.\nThe real growth of the wage bill has moderated slightly since 2009/10 (Figure 22), but the \nconsolidated general government wage bill remains historically high at a ratio of 36,2 per cent \nof total expenditure in fiscal year 2011/12. Although real growth in capital expenditure has \ndecreased significantly since 2008/09, the 2013 budget projects that real capital expenditure will \ngrow at an annual rate of 3,4 per cent over the MTEF period. Despite extending the outstanding \nmaturity of government debt, growth in national government’s debt-service costs has recently \nincreased in real terms from -4,6 per cent in 2009/10 to 4,6 per cent in 2011/12. However, debt- \nservice costs as a ratio to GDP is expected to remain at 2,8 per cent over the medium term.\nPercentage change over 12 months\n-10\n-5\n0\n5\n10\n15\n20\n2010/11\n2008/09\n2006/07\n2004/05\n2002/03\nFigure 22 \nReal growth rates of selected aggregates*\n \nCurrent expenditure\n \nPublic-sector wage bill\n* 3-year moving average\nSources: National Treasury, South African Reserve Bank and own calculations\n \nCapital expenditure\n \nDebt-service costs\nThe 2013 Budget Review announced that tax policies would be reviewed to ensure that public \nspending is supported by an appropriate revenue base in a fair and equitable tax system. \nMonetary conditions \nOverall credit and money-supply growth remained inflation-neutral and broadly in line with \nnominal GDP growth. Modest single-digit growth in money supply peaked at 8,5 per cent in \nMarch 2013 in contrast to double-digit growth rates in total loans and advances excluding \nmortgage loans, which topped out at 18,6 per cent in December 2012. Other loans and \nadvances, in particular general loans, remained the main driver of the uneven recovery of \ncredit extension.\n33\nMonetary Policy Review June 2013\nThe low interest rate environment and vehicle sales supported credit extension, which was \notherwise constrained by the size of outstanding household debt. Banks’ total loans and \nadvances to the private sector firmed to a post-recession high of 10,0 per cent in December \n2012, before moderating somewhat to 8,1 per cent in March 2013 (Figure 23). In real terms, \ngrowth in total loans and advances increased modestly to 4,1 per cent in December 2012 – its \nfastest pace since October 2008. As of December 2012, growth in mortgage lending fell below \nits 2,1 per cent per year average growth rate in 2012 to a record low 1,6 per cent in March 2013. \nPercentage change over 12 months\n-10\n0\n10\n20\n30\n40\n50\nFigure 23 \nBanks’ loans and advances to the private sector by type\n \nTotal loans and advances\n \nGeneral loans\n \nTotal loans and advances excluding mortgages\n \nTotal loans and advances: Real\n \nOther loans and advances\n \nMortgages\n2007\n2008\n2009\n2010\n2011\n2012\n2013\nAs growth in household income slowed, private-sector credit growth (excluding mortgage loans) \npeaked at 18,6 per cent in December – its strongest rate of growth since September 2008. \nIt moderated to 14,5 per cent in March 2013, continuing its above 10 per cent growth rate for \n18 consecutive months. The increased momentum in credit extension was supported by growth \nin other loans and advances (consisting of general loans, credit card advances and overdrafts). \nGrowth in general loans, boosted by unsecured lending to households, peaked at 23,5 per cent \nin December 2012 before moderating somewhat. \nDemand, output and expected growth\nEconomic activity regained some lost momentum in the final quarter of 2012. This was \nfollowed by weaker-than-expected growth in the first quarter of 2013. On the supply side, \ndeclining output levels in the mining sector contrasted with reasonable growth rates in \nthe secondary and tertiary sectors in the fourth quarter of 2012. On the demand side, \nexpenditure growth contracted in the final quarter of 2012. South Africa’s terms of trade \ndeteriorated as commodity prices weakened. Consistent with the Bank’s composite leading \nindicator, South Africa’s economic growth outlook has remained fragile and below potential \nthus far in 2013. \nThe economy regained some lost momentum in the final quarter of 2012 as it rebounded from \nthe sharply lower growth of 1,2 per cent of the third quarter (Table 14). Excluding mining and \nagriculture, the economy grew by 2,7 per cent in the fourth quarter of 2012. The secondary \nsector rebounded from the earlier contraction to grow by 3,6 per cent, boosted by 5,0 per cent \ngrowth in manufacturing output. For the calendar year 2012 as a whole, real GDP increased by \n2,5 per cent compared to 3,5 per cent in 2011. Real gross domestic expenditure increased by \n4,1 per cent in 2012, slightly slower than the 4,6 per cent recorded in 2011.\nMonetary Policy Review June 2013\n34\nDespite the depreciation of the rand, real exports of goods and services contracted in all but \nthe third quarter of 2012 and increased by only 0,1 per cent in 2012 (compared to 5,9 per cent \nin 2011). This reflected subdued global growth, weak international demand, and the disruptive \neffect of domestic labour unrest on production and distribution. These effects were cushioned \nsomewhat by the depreciated exchange rate and higher international commodity prices. Real \nimports, in step with the moderation in domestic demand, contracted by 12,4 per cent in the \nfourth quarter of 2012, largely because of a decline in the volume of imported vehicles and \ntransport equipment. Overall growth in import volumes, however, still amounted to 6,3 per \ncent in 2012 compared to 9,7 per cent in 2011. With import prices increasing faster than export \nprices, South Africa’s terms of trade deteriorated in the fourth quarter of 2012 and also on an \nannual basis (to -3,0 per cent) compared to 2011.\nSouth Africa’s trade balance deteriorated steadily from a surplus of R16,4 billion in 2011 to a \ndeficit of R75,5 billion in 2012. The deficit on the services, income and current transfer account \nto GDP shrank slightly by 0,1 per cent from 2011 to 2012. Relative to GDP, the deficit on the \ncurrent account of the balance of payments increased to 6,3 per cent in 2012 from 3,4 per cent \nin 2011. During 2012 the current-account deficit peaked at 6,8 per cent in the third quarter, \nbefore narrowing slightly to 6,5 per cent in the fourth quarter. \nTable 14\t\nGrowth in real GDP and expenditure components\nPer cent*\n2011\n2012\nYear\n1st qr\n2nd qr\n3rd qr\n4th qr\nYear\nFinal consumption expenditure \nHouseholds...................................................\n4,8\n4,0\n3,2\n2,7\n2,4\n3,5\nGeneral government......................................\n4,6\n1,9\n3,7\n8,3\n-0,7\n4,2\nGross fixed capital formation.............................\n4,5\n4,6\n5,4\n5,6\n4,3\n5,7\nChanges in inventories (R billions)**...................\n5,1\n5,9\n6,3\n5,1\n-4,1\n3,3\nGross domestic expenditure............................\n4,6\n4,4\n4,4\n4,1\n-0,9\n4,1\nExports of goods and services.......................... \n5,9\n-3,0\n-6,1\n1,6\n-4,3\n0,1\nImports of goods and services.......................... \n9,7\n4,8\n-0,5\n12,0\n-12,4\n6,3\nGross domestic product.................................. \n3,5\n2,5\n3,4\n1,2\n2,1\n2,5\n*\t Quarterly data refer to quarter-on-quarter growth at annual rates of seasonally adjusted data \n**\t Constant 2005 prices\nHousehold consumption expenditure grew by 3,5 per cent in 2012 compared to 4,8 per cent in \n2011. Spending remained constrained by rising inflation and moderate growth of 3,8 per cent \nin real household disposable income, compared to 5,2 per cent in 2011. Despite an increase in \ncredit extension, the ratio of household debt to nominal disposable income receded slightly to \n75,8 per cent in the fourth quarter of 2012.\nConsumption expenditure by general government in 2012 remained strong at 4,2 per cent. \nExcluding expenditure on armaments, the fourth-quarter growth rate was 3,6 per cent.\nGrowth in real gross fixed capital formation slowed to 4,3 per cent in the final quarter of 2012, reflecting \nthe net effect of a moderation in capital outlays by public corporations and general government, and \ncontinued momentum of private business enterprises. For 2012 as a whole, real gross fixed capital \nformation increased by a fairly good 5,7 per cent compared to 4,5 per cent in 2011.\nReal inventory investment turned negative in the fourth quarter of 2012 as the mining and \nmanufacturing sectors depleted inventories to offset the effect of labour market instability \non production.\n35\nMonetary Policy Review June 2013\nGlobal economic conditions remain subdued and adversely affect South Africa’s economic \noutlook. South Africa’s growth prospects therefore remain fragile at a below-potential pace. \nGrowth in real GDP of 0,9 per cent was recorded in the first quarter of 2013. Projected growth \nhas been lowered since the October 2012 MPR, reflecting the weaker global outlook and \nthe negative impact of some domestic developments. The negative output gap of 2,0 per \ncent is expected to widen over the short term and reflects the continued subdued state of \nthe economy. The May 2013 MPC meeting projected annual average growth in real output \nof 2,4 per cent in 2013, somewhat slower than the March 2013 forecast of 2,7 per cent, and \n3,5 per cent in 2014 compared to 3,7 per cent in the previous forecast (Figure 24). This may have \nto be revised down at the next MPC meeting. (See Box 3 for an evaluation of the accuracy of the \nBank’s economic growth forecasts.)\nPercentage change at seasonally adjusted annualised rates\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\nFigure 24 \nReal GDP growth forecast\n-10\n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n10\nLooking forward, the relatively flat trajectory (with a slightly increasing trend since June 2012) of \nthe Bank’s composite leading business cycle indicator is consistent with the growth forecast \n(Figure 25). The Bank’s coincident business cycle indicator has continued to trend upwards. \nShort-term indicators show relatively positive sentiment on the supply side of the economy, but \nstill low consumer confidence on the demand side.\nIndices: 2010 = 100\n50\n70\n90\n110\n130\nFigure 25 \nComposite business cycle indicators\n \nLeading business cycle indicator \n \n Coincident business cycle indicator\n \nDownward phases of the business cycle \n1994\n1996\n1998\n2000\n2002\n2004\n2006\n2008\n2010\n2013\nMonetary Policy Review June 2013\n36\nThe Rand Merchant Bank (RMB)/Bureau for Economic Research (BER) Business Confidence \nIndex (BCI) increased by 6 index points from 46 index points in the fourth quarter of 2012 to \n52 index points in the first quarter of 2013 – to a level close to the post-recession peak of 55 in the \nfirst quarter of 2011. Sentiment improved in four of the five sectors, with confidence declining only \nin the retail sector. According to the first-quarter 2013 BER Manufacturing Survey, manufacturing \nbusiness confidence improved further by 4 index points to a still-low 42 index points.\nThe Ernst & Young/BER Retail Confidence Index fell by 4 index points to 50 index points in the \nfirst quarter of 2013, having been below the neutral level in the second and third quarters of 2012. \nThe FNB Building Confidence Index increased for the second consecutive quarter to 37 index \npoints in the first quarter of 2013 – its highest reading since 2010. The improvement was mainly \ndriven by retailers of building materials who saw significant growth in sales during the first \nquarter of 2013. Only subcontractors recorded a decline in confidence.\nTable 15\t\nDomestic economic sentiment indicators\nHistoric range\nMost recent\nAs at MPR:*\nLow\nHigh\nLow\nHigh\nOct 2012\nJun 2013\nRMB/BER Business Confidence Index.....................\n10\n91\n23\n55\n47\n52\nBER Manufacturing Confidence Index......................\n11\n93\n11\n51\n33\n42\nErnst & Young/BER Retail Confidence Index............\n0\n94\n35\n63\n46\n50\nFNB Building Confidence Index................................\n11\n89\n23\n38\n26\n37\nKagiso Purchasing Managers’ Index........................\n34,6\n63,4\n47,1\n55,4\n48,3\n50,5\nFNB/BER Consumer Confidence Index....................\n-33\n23\n-6\n15\n-1\n-7\n*\t Improved/Worsened since previous MPR\nSources: Kagiso Securities, Rand Merchant Bank, First National Bank, Ernst & Young and the Bureau for Economic Research, \nStellenbosch University\nThe Kagiso Purchasing Managers’ Index (PMI) has improved unevenly from a recent low of \n47,1 index points in October 2012, to above 50 index points in February 2013, before falling \nto 49,3 index points in March. This decline reflects weak economic conditions in the euro \narea – the largest market for exports of South African factory goods. In contrast to the trend \nin South Africa’s major trading partners, the PMI then moved back to just above the neutral \nlevel at 50,5 index points in April 2013, signalling a slight improvement. Two of the five sub-\nindices were below the 50 mark, and the changes have been greatly influenced by volatile \nmovements in the major contributors to the PMI, namely business activity at 52,2 index points \nand new sales orders at 53,7 index points.\nThe forward-looking indicators of the PMI suggest a marginal improvement in manufacturing \nconditions. In April 2013 expected business conditions increased to 51,3 index points from \n47,0 in March – still significantly lower than the recent high of 58,2 index points in January 2013. \nThe increase in the ratio of new sales orders to inventories to 1,1 in April 2013 suggests relatively \nlow inventory levels to demand. \nThe FNB/BER Consumer Confidence Index (CCI) recorded its fourth successive negative \nreading as it declined further to a nine-year low of -7 index points in the first quarter of 2013 – \neven lower than at the height of the financial crisis in 2008. This was reflected by a significant \ndeterioration in sentiment regarding the South African economic outlook, the financial situation \nof households and willingness to buy durable goods.\n37\nMonetary Policy Review June 2013\nBox 3\t\nAn accuracy analysis of real gross domestic product growth forecasts \nThe accuracy of seasonally adjusted real gross domestic product (GDP) growth forecasts \nis assessed using real-time data, which is economic data known to the forecaster at the \npoint of preparing the forecast.1 Real-time data is that set of data that formed the basis of \nthe forecaster’s view of the future.\nIn South Africa average revisions to the actual quarterly GDP growth figures have been \n1,1 percentage points between the first quarter of 1990 and the third quarter of 2012, with a \nmaximum revision change of 4,2 percentage points recorded in the second quarter of 1996 \n(Figure B3.1). Most revisions during this period are upwards.\nFigure B3.1 Data revisions to gross domestic product\nPer cent\n \nFirst release\n \nRevised data\n1990\n1992\n1994\n1996\n1998\n2000\n2002\n2004\n2008\n2006\n2012\n2010\n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n10\nForecast errors are calculated as the forecast values minus the actual values. Therefore, a \nnegative mean forecast error indicates that the model tends to under-predict the actual (first \nrelease) GDP outcomes. Overall forecast performance is assessed using a number of \ndescriptive statistics. The most frequently used measures are the average forecast error \n(measuring projection bias in terms of systematic over- or under-estimation) and the root \nmean square error (indicating the absolute size of the error and how it relates to the variability \nof the series).\nWhen the average forecast errors of the Bank’s core model and those of the Reuters \nConsensus Forecast for the period March 2001 to December 2012 are compared (Figure \nB3.2), it is clear that all the average forecast errors are positive and therefore biased. Both \nthe Bank and the Reuters participants, on average, overestimated the actual outcome of \nGDP over all forecast horizons, that is, one-quarter-ahead to seven-quarters-ahead \nforecasts.2 Note that both the respective sets of forecasts have errors increasing initially \nalong the early part of the forecast horizon but then declining along the remainder of the \nforecast horizon.3\n1\t\nForecasted GDP growth rates are quarter-on-quarter annualised numbers.\n2\t\nReuters only publishes forecasts that extend seven quarters into the future.\n3\t\nThe root mean square error increases over the first several quarters as short-term indicators become \nprogressively less useful. As the forecast horizon increases, accuracy gradually improves because of \nmean reversion in GDP growth rates. Forecast error bias is positive at all horizons in part because initial \ndata releases over a large portion of the sample were subsequently revised upwards.\nMonetary Policy Review June 2013\n38\nFigure B3.2 Average forecast error of gross domestic product\nPercentage points\n \nCore\n \nReuters\nQuarters ahead\n7\n6\n5\n4\n3\n2\n1\n0\n0,4\n0,8\n1,2\n1,6\n2,0\nFigure B3.3 shows that the Bank’s forecasts outperform those of the Reuters Consensus \nForecast over all seven forecast horizons when comparing the respective root mean \nsquare errors.4\nFigure B3.3 Root mean square error of gross domestic product\nPercentage points\n \nCore\n \nReuters\nQuarters ahead\n7\n6\n5\n4\n3\n2\n1\n0\n1\n2\n3\n4\nThe Bank communicates forecasts of GDP growth to the general public through the use of \nprobability distributions in the form of fan charts to indicate the balance of uncertainties \nsurrounding possible future outcomes. When comparing the first release GDP growth rates \n4\t\nThe root mean square error is calculated in three steps. Firstly, the forecast errors are calculated and then \nsquared. Secondly, the average of these numbers is calculated and, finally, the square root is taken to \nbring the answer back to the same unit measure as the original data.\n39\nMonetary Policy Review June 2013\nwith the probability distribution around the individual one-year-ahead forecasts (see \nFigure B3.4), the values fall within the 90 per cent probability range in all periods except from \nthe third quarter of 2008 to the second quarter of 2009.5 This reflects the extraordinary \nshocks and impact of the global financial crisis on the real economy, resulting in forecast \nerrors at levels significantly outside the historical probability ranges.\nFigure B3.4 Probabilities for gross domestic product forecasts*\nPer cent\n* For successive revised quarters, the change in confidence intervals reflects new information\n Actual GDP\n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n2008\n2009\n2010\n2011\n2012\nNote: The shaded area depicts a 90 per cent confidence interval\nThe Bank’s forecasting performance is also compared to the 16 individual forecasters or \ninstitutions and the average of the four best that participate in the Reuters survey. In \nTable B3.1 the root mean square errors of the various forecasts are compared over the one- \nto four-quarters-ahead horizons. \nTable B3.1 Forecasting error comparison\nRoot mean square error\t\n\t\n\t\n\t\nQuarters ahead\n1\n2\n3\n4\nCore model.......................................................\n1,2899\n2,3905\n2,7934\n3,3376\nAverage of top four forecasts from Reuters.......\n1,9664\n2,4333\n3,1673\n3,3952\nAverage of total Reuters consensus forecasts...\n2,1341\n2,7728\n3,2612\n3,5466\nSources: Reuters and own calculations\n5\t\nThe forecast probability distribution of GDP, namely the width of the forecast fan, is based on the historical \nshocks that have impacted on the real economy.\nMonetary Policy Review June 2013\n40\nMonetary policy\nSince the publication of the previous MPR in October 2012, below-trend growth and subdued \nglobal inflation continue to characterise global conditions, notwithstanding improvements in \nsome economies. Monetary policy in advanced economies remains highly accommodative. \nGlobal developments continued to affect South Africa’s economic growth and inflation \noutcomes, but a range of domestic factors have become relatively more prominent. The \ndomestic economic landscape worsened as a result of widespread labour market instability, \nwith a general rise in uncertainty and a decline in confidence. As a result, the outlook for \ndomestic economic growth has deteriorated with the balance of risks to the downside. The \nnegative output gap persists and remains significant. Weaker domestic and global output \nhas further contributed to a widening current-account deficit, ratings downgrades and a \ndepreciated currency. These factors have sustained upside risks to the inflation outlook, \ncontributing to successive decisions to keep the policy rate unchanged at 5,0 per cent per \nannum over the period (Figure 26). The outlook for inflation remains persistently skewed to \nthe upside.\nPer cent\n2004\n2003\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012 2013\nPrime overdraft rate\nRepurchase rate\nThree-month negotiable certificates of deposit rate\nFigure 26 \nThe repurchase rate and other short-term interest rates\n4\n6\n8\n10\n12\n14\n16\n18\nThe period since the previous MPR has seen both a general deterioration in global economic \nconditions and some sign of improvement. Neither development has been unalloyed, however. \nConsiderable strengthening in the US economy in 2013 is not evident in many others. \nFinancial market conditions have also improved quite robustly in various markets, but can be \nseen to be increasingly disjointed from real economic outcomes in many of these markets. \nSecular developments appear to explain these variations and have given rise to the notion \nof a ‘multispeed’ recovery. One common feature of 2013 has been a moderation in inflation \npressures in nearly all economies, barring a few. South Africa, India and Brazil fall outside the \nmain group by exhibiting stronger inflation pressures. \nThe building up of inflation remains a policy challenge. For South Africa, inflation pressures do \nnot derive from economic growth straining at available skills and resources. The output gap \nremains substantial and negative, suggesting considerable unused resources of capital and \nlabour. Demand in the economy has been, and remains, well supported by fiscal and monetary \npolicy settings, with a sustained and large fiscal deficit and real interest rates that have been \nnegative since November 2010. \n41\nMonetary Policy Review June 2013\nWhile the relative weights of the various factors propelling inflation have changed over the past \nyear, rand depreciation, oil prices and food prices have all increasingly played a key role in South \nAfrica’s inflation outcomes. \nFigure 27 Policy analysis\nPer cent\nPercentage of GDP\nPercentage of GDP\nPer cent\nChange in percentage points\n2015*\n2014*\n2013*\n2012\n2011\n2010\n2009\n2008\n2007\n2006\n2005\n2004\n2003\n-10\n-5\n0\n5\n10\n15\n-10\n-5\n0\n5\n10\n15\n-3\n0\n3\n6\n9\n12\n15\nEconomic activity and external balance\nMonetary policy\nFiscal policy\nReal GDP\nNominal GDP\nCurrent-account balance (right-hand scale)\nReal repurchase rate (nominal rate adjusted by Reuters one-year-ahead CPI forecast)\nConsumer price inflation: Targeted inflation\n-6\n-4\n-2\n0\n2\n-6\n-4\n-2\n0\n2\n2014/15*\n2012/13*\n2010/11\n2008/09\n2006/07\n2004/05\n2002/03\nBudget balance of national government\nChange (right-hand scale)\n2015*\n2014*\n2013*\n2012\n2011\n2010\n2009\n2008\n2007\n2006\n2005\n2004\n2003\n* Note: Data for 2013 to 2015 and fiscal years 2012/13 to 2014/15 are estimates from the \n Budget Review 2013\nSources: South African Reserve Bank, Statistics South Africa, Budget Review 2013, National Treasury\nand own calculations\nGlobal factors\nGlobal factors have continued to be critical to the considerations of monetary policy. In October \nand November 2012 the global environment was marked by the euro area returning to recession \nand heightened concern about whether and how the US ‘fiscal cliff’ would be resolved and \nabout its impact on the US economy. \nMonetary Policy Review June 2013\n42\nIn early 2013, however, improvements in global financial market sentiment were evident, with \nprogress made in respect of the US ‘fiscal cliff’ and more muted concerns about sovereign \ndebt in the euro area. Global economic growth prospects, however, remained constrained \nby downside risks due to persistent structural problems and the unresolved euro area crisis. \nMonetary policy in most countries was expected to remain accommodative and increasingly \nexpansionary, in particular in Japan.\nEvents in Cyprus in February unsettled global markets and reinvigorated pessimism about \nthe euro area’s prospects at the same time as real economic indicators suggested weaker \nmomentum. In successive months it became increasingly clear that global growth exhibited \nthree distinct trends: stronger growth in some advanced economies, sustained weakness in \nothers, and generally more rapid but also more variable growth in emerging markets. \nIn the US, the recovery continued to strengthen, with a rising consumer confidence index, \nstronger job creation and wealth effects from both a booming equity market and the \nrecovering housing market. However, the euro area remained in recession, contracting \nby 0,9 per cent in the first quarter of 2013, as deleveraging by households, banks and \ngovernments continued, and financial markets fragmented and restructured. Peripheral \nEurope has and will continue to experience negative or, at best, very low growth for some \ntime. In Japan economic growth accelerated sharply in the first quarter of 2013, although \nstructural factors may constrain the efficacy of the fiscal, monetary and structural policy \nstimulus packages that were announced recently. \nEmerging markets remain the main global source of growth, but there are signs of moderation \nin some of the systemically important countries, particularly China and India. The Brazilian \neconomy should recover modestly this year. The rebalancing of the Chinese economy away \nfrom fixed capital formation and production towards internal consumption has resulted in some \nslowdown, and has contributed to the declining trend of global commodity prices.\nGlobal inflation has moderated, reflecting persistently slow global growth and weaker commodity \nprices. This has prompted further monetary easing by the ECB and the BOJ. Alongside the \nFed’s QE programme, these accommodative policy stances continue to increase global liquidity \nand, under current conditions, can be expected to be maintained over the medium term. \nDomestic factors\nGlobal factors have contributed to weaker-than-expected South African growth, exogenous \nprice pressures and a depreciating exchange rate. However, domestic factors have become \nmore important in assessing the future trajectory of growth and inflation. While the rand has \ntrended lower in line with some of the other emerging markets, the depreciation has been \nconsiderably more pronounced as a result of South African-specific developments. Some of \nthese factors carry major risks to inflation in addition to economic growth. \nDomestic economic growth has remained fragile and below potential, with a low probability \nfor the closure of the negative output gap in the medium term. Forecasts for growth hovered \naround 2,6 per cent for 2013 throughout the period since October 2012. In the new year \ndomestic growth prospects remained subdued despite better-than-expected fourth-quarter \nGDP growth and positive developments in the mining and manufacturing sectors in January. \nThe mining sector was expected to remain under pressure, given the unsettled labour relations \nenvironment, while the outlook for manufacturing improved tentatively. \nThis relatively benign environment deteriorated in subsequent months as consumer confidence \nweakened and disruptions in the mining sector worsened. Electricity supply constraints became \nmore evident and global growth prospects failed to improve. The growth forecast of the Bank \nhas been revised down from 2,7 per cent to 2,4 per cent for 2013 and from 3,7 per cent to \n43\nMonetary Policy Review June 2013\n3,5 per cent in 2014. Growth is expected to accelerate to 3,8 per cent in 2015. The risks to \neconomic growth lie to the downside as a result of the potential for further job and output \nlosses, particularly in the mining sector. \nGovernment and household consumption is expected to be constrained by a range of factors, \nincluding relative price adjustments and high debt levels. Investment by public-sector corporations \nshould continue to provide some growth momentum, but private-sector investment remains \nsensitive to confidence and uncertainty. Slower expenditure growth is reflected in a moderation in \ngrowth in credit extended, especially from December 2012 through to March 2013. \nWidespread labour market instability and work stoppages reduced output and export volumes \nin the mining sector. These factors also raised the possibility of protracted wage negotiations, \nabove-inflation wage settlements and a sustained widening of the deficit on the current account \nof the balance of payments. These developments, along with fiscal considerations, contributed \nto the ratings downgrades by rating agencies.\nA key risk to the inflation and growth outlook has been and continues to be the prospect of \nsharply rising unit labour costs arising out of combinations of overly-high wage settlements \nand/or falling output and productivity. Protracted and disruptive strike action risks lowering \noutput and exports. Excessively high wage settlements will come at the expense of retention of \nemployees, employment creation and could result in higher inflation. A wage-price spiral would \nnegate the benefits of wage increases to workers and undermine the competitive gains of the \ncurrency depreciation. Wage, salary and price restraint at all levels, including executive pay, \ncould underpin confidence and provide stability to prices, including that of the currency, in ways \nthat boost economic growth.\nInflation forecasts\nThe inflation forecast deteriorated significantly between November 2012 and January 2013, with \nthe average of 5,5 per cent for 2013 shifting to 5,8 per cent. Inflation was expected to peak at \n6,1 per cent in the third quarter of 2013 and then to moderate gradually to 5,1 per cent in the \nfinal two quarters of 2014.\nThis near-term deterioration was mainly due to an expected increase in food price inflation and \nrand depreciation. The pattern of upside risk to the inflation forecast and downside risk to growth \ncontinued in the assessment, informed by sustained pressure of food prices, uncertainty about \nexchange rate movements, the overall impact of the new CPI and the possible impact of higher \nwage increases relative to benign demand pressures. Inflation expectations remained anchored \nat around the upper end of the inflation target range.\nTable 16\t\nThe Bank’s real GDP growth and targeted inflation forecasts \nPer cent\nMPC meetings\nReal GDP\nTargeted inflation\n2013\n2013\nExpected peak\nExpected to stabilise\nSeptember 2012..........\n3,4\n5,2\n4th quarter 2012 at \n5,4 per cent\nat 5,0 per cent level \nto the end of 2014\nNovember 2012...........\n2,9\n5,5\n1st quarter 2013 at \n5,7 per cent\nat 5,0 per cent level in \n2014\nJanuary 2013...............\n2,6\n5,8\n3rd quarter 2013 at \n6,1 per cent\nat 5,1 per cent level in the \nsecond half of 2014\nMarch 2013.................\n2,7\n5,9\n3rd quarter 2013 at \n6,3 per cent\nat 5,2 per cent level in the\nfinal quarter of 2014\nMay 2013.....................\n2,4\n5,8\n3rd quarter 2013 at \n6,1 per cent\nat 4,9 per cent level in the\nfinal quarter of 2015\nMonetary Policy Review June 2013\n44\nWhile the risks to the forecast from food prices moderated somewhat over the medium term, \nthe exchange rate, wage settlements and petrol prices remained important upside risk factors. \nAdministered prices, on average, also remained well in excess of the upper end of the target \nrange. The growth rate for electricity price inflation was adjusted from 16,0 per cent to 7,5 per \ncent with effect from July 2013. \nInflation increased to 5,9 per cent in February 2013, contributing alongside rising petrol prices and \ndepreciation, to a slight deterioration to the March inflation forecast. The March inflation forecast \nwas adjusted up to an average of 5,9 per cent in 2013 and 5,3 per cent in 2014. The temporary \nbreach in the upper end of the target range shifted out to the third quarter of 2013, at an average \n6,3 per cent for the quarter, before moderating gradually to 5,2 per cent in the final quarter of 2014. \nThe most recent inflation outcomes, for March and April, also came out at 5,9 per cent, but with \nvariation in the underlying drivers of the overall rate. Food price inflation measured 6,3 per cent \nin April, reversing the downward trend that had prevailed since November 2012. Core inflation, \nwhich excludes food, petrol and electricity, measured 5,2 per cent, marginally up from 5,1 per \ncent in March.\nThe May inflation forecasts for 2013 and 2014 have declined slightly, to 5,8 and 5,2 per cent \nrespectively due to changed assumptions about international commodity prices, including oil, and \nlower global inflation. A temporary breach of the upper end of the target range is still expected \nin the third quarter of 2013, but at a lower average level of 6,1 per cent (6,3 per cent previously), \nfollowed by a gradual moderation of inflation to 4,9 per cent in the final quarter of 2015. \nCore inflation has risen and is expected to be significantly higher, averaging 5,3 per cent for \n2013 compared to the previous forecast of 4,8 per cent. This follows the sharp increase in \nmedical insurance costs in the February CPI. Core inflation is also expected to be adversely \naffected over the coming months by increases in a number of administered prices, particularly \nwater and municipal rates and taxes. This measure is expected to peak at 5,4 per cent in \nboth the third and fourth quarter of 2013, and to average 5,0 per cent and 4,6 per cent in the \ncoming two years. Despite the higher near-term trend, this indicator is still assessed to reflect \nan absence of significant demand pressures. \nInflation expectations remain stable and anchored, as confirmed by both the Reuters survey \nof analysts and the survey conducted by the BER. For the latter, respondents expect inflation \nto average 6,0 per cent in both 2013 and 2014, and 6,1 per cent in 2015. \nRisks to the outlook\nWith strong and negative global headwinds, the South African economy has become especially \nvulnerable to declining domestic and foreign investor confidence. This has been reflected in the \ndepreciating and volatile exchange rate, which was already under pressure from the widening \ndeficit on the current account of the balance of payments. \nA backdrop of weakening commodity prices increases the risk that concerns over the financing \nof a large current-account deficit create further volatility and negative sentiment. Non-residents \nhave remained net buyers of bonds and equities in 2013, totalling about R35,3 billion, and it \nwill be important for these flows to be maintained. These developments have the potential to \naffect, directly and indirectly, South Africa’s credit ratings, and increase the cost of much-needed \nfinance. Although inflation is forecast to remain relatively contained, these factors have raised \nthe upside risks to the outlook at a time of worsening real growth prospects. \nThe impact of the weaker rand on inflation is dependent on the extent, speed and duration of \nthe depreciation, and on the phase of the business cycle. The current level of the exchange rate, \nif sustained, poses a significant upside risk to the inflation outlook. While some of the recent \ndecline reflects changes in the underlying fundamentals, the rand remains highly vulnerable to \nchanges in sentiment and overshooting. \nInternational oil prices are expected to remain constrained by the subdued global growth \nenvironment, but vulnerable to political developments in the Middle East in particular. Having \nreached a recent high of around US$119,34 per barrel in mid-February 2013, Brent crude oil \n45\nMonetary Policy Review June 2013\nprices have remained in a range of between US$96 and US$111 per barrel since the beginning \nof April. Recent exchange rate movements have raised the probability of further petrol price \nincreases in the near term and may reverse the recent moderation in food prices. The exchange \nrate poses an upside risk to food inflation as prices of agricultural commodities such as wheat \nand maize are based on international prices.\nThe deteriorating outlook for the South African economy remains a major concern for monetary \npolicy, even though many of the drivers of the outlook lie outside the ambit of the Bank. These \ndrivers include the financing of the deficit on the current account of the balance of payments; the \nfractious labour relations environment and the associated risks of protracted work stoppages \nand excessive wage increases; electricity supply constraints; upside risks to inflation; downside \nrisks to growth and employment creation in a context of high unemployment; and declining \ndomestic and foreign investor confidence which could impact directly on capital flows. These \ninterrelated developments are reflected in the volatility and weakness in the exchange rate. \nGlobal factors may have lessened somewhat in the balance of risks, but these nonetheless \nremain critically important and significant. Sentiment towards the South African economy is also \na function of developments originating in foreign capitals and their markets. In particular, risks \nto financial markets and global capital flows from excessive global liquidity pushing up asset \nprices have grown in recent months. An early reversal of the US monetary policy stance looks \nless proximate, and likely to be extremely cautious, but its timing is complicated by excessive \nasset price increases and exuberance in financial markets.\nBox 4\t\nThe role of the repurchase rate and the prime rate in the transmission of \nmonetary policy\nThis box describes the role of the repurchase (repo) rate and the prime overdraft rate in \nmonetary policy, and the difference between these two rates. The Bank, in the conduct of \nmonetary policy, sets the level of the fixed repo rate at which short-term loans are provided to \nbanks. This rate affects banks’ funding costs and lending rates via the money-market yield \ncurve and liquidity conditions. The level of banks’ lending rates is determined by three main \nfactors: operations, funding and capital costs; borrowers’ credit risk profiles; and lenders’ \nappetite for risk. Variations in these factors cause fluctuations in lending rates relative to the repo \nrate and the prime rate (Figure B4.1). This, in turn, influences other interest rates, the exchange \nrate of the rand, asset prices, the real economy and, ultimately, inflation.\nPer cent\n2000\n2002\n2004\n2006\n2008\n2010\n2012\nPrime rate\nWeighted average bank lending rate on rand-denominated loans and advances\nRepurchase rate\nSources: Banks’ BA returns (DI returns prior to January 2008) and own calculations\nFigure B4.1 Lending rates in the banking sector\n4\n6\n8\n10\n12\n14\n16\n18\nMonetary Policy Review June 2013\n46\nThis is known as the ‘monetary policy transmission mechanism’. Owing to changes in market \nconventions, the role of the prime ‘overdraft’ rate in the domestic banking system changed in \nthe 1980s from a ‘minimum overdraft rate’ (or ‘best’ lending rate) to a single reference \n(or benchmark) rate for different types of loans. These loans have since been priced relative or \nlinked to the prime rate, with this link facilitating the transmission of broadly equivalent changes \nin the repo rate to existing floating rate loans. However, new loans are priced relative to the \ncurrent repo and prime rates, and prevailing market conditions. As a result, banks can charge \nhigher risk premia on new loans if they perceive lending conditions as riskier even during periods \nwhen the repo rate is lowered and vice versa.1 This is illustrated by the shaded areas in \nFigure B4.2.\nBasis points\n2000\n2002\n2004\n2006\n2008\n2010\n2012\nMark-up to repurchase rate\nDiscount or premium to prime rate\nEasier monetary policy\nSource: Own calculations\nMargin to prime rate\nMargin to repurchase rate\nFigure B4.2 Relative margins to banks’ weighted average lending rate \n-300\n-200\n-100\n0\n100\n200\n300\n400\n500\nIn 2001 the spread between the repo rate and the prime rate widened to an appropriate, stable \nand constant 350 basis points, with the understanding that market interest rates would respond \nto changes in the repo rate. \nFigure B4.3 shows how the weighted average bank lending rate2 on rand-denominated loans and \nadvances responds to and closely follows the monetary policy response. From a lending rate \nadjustment perspective, prime-linked assets tend to re-price faster in a downward interest rate cycle. \nThis, together with banks’ procyclical increase of risk premia on new loans, explains the narrower \nmargin to prime and wider margin to repo in a downward interest rate cycle (Figure B4.2).\nFigure B4.3 clearly shows that the prime rate is only a reference rate, with lending priced \naccording to risk – on aggregate, at a discount to the prime rate. This refutes the general \nmisconceptions that loans are priced off prime and that the size of the spread affects lending \nrates. Lending rates are not influenced by the 350 basis point spread between the repo rate \nand the prime rate. However, changes in the repo rate translate into changes in the prime rate \nand because floating rate loans are linked to the prime rate, the repo rate indirectly affects \nfloating rates. Thus, the role of the spread is to facilitate the transmission of monetary policy to \nexisting floating rate loans that are linked to the prime rate. \nAkin to differentiating interest rates based on clients’ risk profiles, banks also differentiate \nbetween products based on risk, as shown in terms of the respective weighted average interest \nrate levels of the credit products.3 (Figure B4.4).\n1\t\nThe tendency of banks to include a higher (lower) risk premium in the price of credit when the repo rate is low \n(high) is referred to as ‘procyclical behaviour’.\n2\t\nThe annualised weighted lending rate of banks is calculated as the total rand-denominated interest income \nflow divided by the stock of loans and advances.\n3\t\nThe Bank calculates a weighted average rate per credit product by weighing the 5 major banks’ reported \nweighted average rates based on outstanding balances.\n47\nMonetary Policy Review June 2013\nFigure B4.3 The level of weighted lending rates in the latest downward\n \ncycle in interest rates\nPer cent\n \nRepurchase rate\n \nMortgage advances\nSources: Banks’ BA returns and own calculations\nPrime rate\nCredit card advances\nOverdrafts\n2008\n2009\n2012\n2010\n2013\n2011\n0\n5\n10\n15\n20\n25\nIt is evident that credit card advances are deemed more risky than overdrafts, whereas \ncollateralised mortgage advances are deemed less risky. \nFigure B4.3 shows how lending rates have declined, as expected, across all bank product \ncategories during the latest monetary policy easing cycle that started in December 2008. \nHowever, with the exception of overdrafts, margins on all credit product categories increased \nover this period, thus reaffirming the procyclical behaviour of banks (Figure B4.4).\nBasis points\nBasis points\nFigure B4.4 Margins of weighted bank lending rates relative to the \n \nrepurchase rate\n \nOverdrafts\n \nCredit card advances\n \nMortgage advances\n \nWeighted average bank lending rate \n \nOverdrafts\n \nCredit card advances\n \nMortgage advances\n \nWeighted average bank lending rate \n0\n200\n400\n600\n800\n1 000\n1 200\n-200\n-150\n-100\n-50\n0\n50\n100\n150\n200\n2013\n2012\n2011\n2010\n2009\n2008\nChange in margins from November 2008 to March 2013\nMonetary Policy Review June 2013\n48\nBibliography\nSouth African Reserve Bank, press release, “Monetary Policy and Reserve Bank \nAccommodation Procedures” (Pretoria: South African Reserve Bank, 7 March 1998)\nhttp://www.resbank.co.za/publications/detail-item-view/pages/publications.\naspx?sarbweb=3b6aa07d-92ab-441f-b7bf-bb7dfb1bedb4&sarblist=21b5222e-7125-4e55-\nbb65-56fd3333371e&sarbitem=4466. Accessed 21 January 2013. \nSouth African Reserve Bank and the Banking Association of South Africa, “The Role of the \nPrime Rate and the Prime-Repurchase Rate Spread in the South African Banking System” \n(8 April 2010) http://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/ \n4279/Summary%20of%20the%20main%20conclusion.pdf. Accessed 21 January 2013.\nExpectations and the Bank’s inflation forecast\nGiven prospects, risks and uncertainties, the outlook for inflation is presented in this section.\nIndicators of inflation expectations\nInflation expectations are an important factor in product price-setting and in wage \nnegotiations, and hence in determining future inflation outcomes. Inflation expectations \nremained well anchored with the Reuters survey showing average inflation well within the \ntarget range, the BER inflation expectations survey indicating inflation at, or just above, the \nupper band of the target range and break-even inflation rates suggesting inflation slightly \nabove 6 per cent.\nMeasured headline CPI inflation fluctuated in a narrow range of between 5,4 and 5,7 per cent from \nSeptember 2012 to January 2013 and then increased by 0,5 percentage points to 5,9 per cent \nfrom February through to April. The first-quarter 2013 BER survey of inflation expectations shows \naverage inflation expectations for 2013 slightly lower at 6,0 per cent compared to the 6,1 per cent \nsurveyed in the fourth quarter of 2012 (Figure 28). Inflation is expected to remain stable at 6,0 per \ncent in 2014 and then to increase moderately to 6,1 per cent in 2015. Lower expected inflation in \n2013 resulted from a decline in the expectations of business people and trade union officials, with \nthose of business above the inflation target and increasing from 2013 to 2014.\nAnnual averages, per cent\n5,0\n5,5\n6,0\n6,5\n2013\n2014\n2015\nFigure 28 \nBER surveys of headline CPI inflation expectations\n6,0\n6,2\n6,2\n6,1\n6,0\n6,1\n6,0\nSurvey conducted during:\n \n3rd qr 2012\nSource: Bureau for Economic Research, Stellenbosch University \n \n4th qr 2012\n \n1st qr 2013\n49\nMonetary Policy Review June 2013\nInflation expectations, as surveyed by Reuters (Table 17), continued to suggest that the average \nyear-on-year percentage change in CPI would be less than 6 per cent. The median forecast for \n2013 has increased slightly from 5,4 per cent in September 2012 to 5,8 per cent in April 2013 \nand has remained around 5,4 per cent for 2014.\nThe quarterly average year-on-year percentage change in CPI, according to the April 2013 survey, \nis expected to peak in the third quarter of 2013, while remaining within the inflation target range \nuntil the fourth quarter of 2014 (the final quarter of the survey). Forecasts of some respondents \nindicate a breach of the target to as high as 7,0 per cent in the third quarter of 2013.\nTable 17\t\nReuters survey of CPI inflation forecasts: April 2013*\n2013\n2014\n2015\nMean...............................................................\n[5,3]\n(5,8)\n5,8\n[5,4]\n(5,5)\n5,4\n(5,5)\n5,6\nMedian.............................................................\n[5,4]\n(5,8)\n5,8\n[5,4]\n(5,4)\n5,4\n(5,5)\n5,5\nHighest............................................................\n[6,2]\n(6,2)\n6,5\n[6,0]\n(6,4)\n6,1\n(6,0)\n6,2\nLowest.............................................................\n[4,6]\n(5,0)\n5,3\n[4,8]\n(5,0)\n5,0\n(4,8)\n4,8\nNumber of forecasters.....................................\n[20]\n(19)\n19\n[16]\n(19)\n19\n(13)\n16\n* \t September 2012 [ ] and March 2013 ( ) survey results in parenthesis\nSource: \tReuters\nFigure 29 shows inflation expectations associated with break-even inflation rates. The break-\neven inflation rate proxy for expected inflation is measured as the difference between the \nnominal yields on conventional South African government bonds and the real yields on CPI \ninflation-linked government bonds of similar maturity. The changes in the trend and level of \nbreak-even inflation rates since the October 2012 MPR reflected, among other things, changes \nin the exchange value of the rand and, more recently, net bond purchases by non-residents. \nShort-term break-even inflation rates have caught up with longer-term break-even inflation \nrates. The longer-term break-even inflation rates have consistently breached 6 per cent from late \nSeptember 2012, followed by the shorter-term rates for brief periods from November 2012 and \ncontinually from late February 2013. This reflected less favourable near- and long-term inflation, \nwith the short-term break-even inflation rates affected by increasingly negative real yields on \ninflation-linked bonds since November 2012.\nPercentage points\nFigure 29 \nBreak-even inflation rates\n5,0\n5,5\n6,0\n6,5\n7,0\n \nSpread between R203 and R211 bonds (4-year maturity)\n \nSpread between R186 and R197 bonds (10- to 13-year maturity)\nSources: JSE Limited and own calculations\n2011\n2012\n2013\nMonetary Policy Review June 2013\n50\nThe South African Reserve Bank inflation forecast\nSince the October 2012 MPR, the Bank’s forecast for annual 2013 targeted headline CPI \ninflation reflected a deterioration from 5,2 per cent at the September 2012 meeting of the \nMPC to 5,9 per cent in March 2013. Subsequently, the inflation outlook improved slightly. \nAlthough the projected peak receded slightly by 0,2 percentage points, the upper end of \nthe target range will still be breached marginally at 6,1 per cent in the third quarter of 2013. \nHeadline CPI is expected to gradually move back to within the target range to 4,9 per cent \nin the final quarter of 2015.\nThe most recent projections of the Bank’s core quarterly forecasting model, presented to the \nMPC meeting on 21–23 May 2013, are reproduced in the form of a fan chart in Figure 30. The CPI \ninflation forecast of the Bank has been revised marginally downwards since the MPC’s previous \nmeeting in March 2013, primarily as a result of lower global inflation and commodity prices.\nAccording to the central projection, which is conditional on an unchanged repurchase rate, \nheadline CPI inflation is now expected to average 5,8 per cent in 2013 and 5,2 per cent in \n2014, compared with the averages of 5,9 per cent and 5,3 per cent respectively projected \nat the time of the March 2013 meeting. At this meeting, the Bank’s assumption for electricity \ntariff increases in the CPI basket had already been lowered to 7,5 per cent from July 2013. The \naverage quarterly CPI inflation rate was expected at the May 2013 meeting to breach the upper \nend of the target range and peak at 6,1 per cent in the third quarter of 2013 before returning to \nwithin the target range, while moderating gradually to an average rate of 4,9 per cent in the final \nquarter of 2015.\nWhen the unchanged repo rate assumption is replaced with the Reuters average expected \npath for the repo rate, headline CPI inflation is expected to average 5,7 per cent in 2013 and \n5,1 per cent in 2014, with the average quarterly CPI inflation rate temporarily breaching the \n6 per cent level in the third quarter of 2013.\nPer cent\nFigure 30 \nTargeted inflation* forecast\n0\n2\n4\n6\n8\n10\n12\n14\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n*\t\nCPIX for metropolitan and other urban areas until the end of 2008; CPI for all urban \nareas thereafter\nNote:\t\nThe MPC uses the fan chart to assess the risks inherent in the forecast and also to \ncommunicate the uncertainties that lie ahead. If future economic developments are \ndeemed to be particularly volatile, the bands will be wider. If a fairly stable future is \nforeseen, the bands will, in turn, be narrower. The fan chart allows policy-makers to focus \ntheir discussion on the risks lying ahead and their effects on inflation. The fan chart uses \nconfidence bands to depict varying degrees of certainty. The darkest band of the fan \nchart covers the most likely 10 per cent of the probable outcomes foreseen for inflation, \nincluding the central projection. Each successive band, shaded slightly lighter and added \non either side of the central band, adds a further 10 per cent to the probability, until the \nwhole shaded area depicts a 90 per cent confidence interval.\n51\nMonetary Policy Review June 2013\nIn the absence of significant demand pressures, the Bank’s forecast of core inflation (i.e., \nheadline CPI excluding food, petrol and electricity prices) shows a rising trend within the inflation \ntarget range, mainly due to expected increases in administered prices. This measure of core \ninflation is now expected to average 5,3 per cent in 2013 compared to 4,8 per cent previously, \nand with a higher peak of 5,4 per cent in the third and fourth quarter of 2013.\nGiven that the central projection for targeted inflation is the most likely outcome, the balance of \nrisks to the inflation forecast in Figure 30 is viewed as being on the upside. These upside risks \nare mainly driven by the exchange rate and wage pressures but are mitigated somewhat by the \ndownward revision of the commodity price assumption. Headline CPI inflation is expected to \naverage 5,8 per cent in 2013 and 5,2 per cent in 2014.\nAssessment and conclusion\nIn 2012 global economic activity remained weak, although stabilising somewhat in the latter \npart of the year when financial market tensions moderated. Subsequently, a weak start in 2013 \ngradually gained growth momentum. Financial market tensions eased, and the deterioration in \nglobal economic conditions moderated and reversed due to persistent and significant monetary \npolicy easing. Global inflation remained benign. \nGlobal inflation is expected to remain broadly unchanged, while global real economic activity \nis expected to progress gradually, with the US leading the way among advanced economies. \nAlthough short-term risks have eased, global prospects remain uncertain, with global economic \nactivity likely to suffer periodic setbacks. \nDomestic activity rebounded somewhat with the lessening of mining-sector tensions, and with \nsome signs of improved global prospects and better financial conditions. This improvement \nproved short-lived, however, as ongoing prominent negative domestic factors undermined \nconfidence and demand slowed. Since May 2012, the rand has depreciated by almost \n25 per cent against the US dollar, reflecting primarily domestic uncertainty but also global \ndevelopments. These factors have shaped, and will continue to shape, inflation outcomes over \nthe medium term and at present create serious upside risk to the inflation forecast.\nSince July 2012, the Bank’s economic growth outlook has oscillated around 2,9 per cent. In \nMay it was again revised slightly lower to 2,4 per cent and downside risks were identified. The \noutput gap is expected to widen in 2013 before stabilising in 2014 and narrowing in 2015. The \ninflation forecast for the medium term has improved very slightly since the March 2013 MPC \nmeeting but the risks to the inflation outlook are to the upside.\nA more moderate inflation trajectory over the medium term would be brought about by greater \nstability of the exchange rate and commodity prices, more modest wage increases, and reduced \nadministered price pressures.\nMonetary policy has continued to provide stability through a period of both global and domestic \nuncertainty. The monetary policy stance has taken account of the expected temporary breach \nof the inflation target and the relatively weak economic recovery as reflected by a persistent \nnegative output gap. The unchanged repo rate at 5,0 per cent per annum, and the modest \nnegative real repo rate are expected to foster price stability and support the economic recovery. \nMonetary Policy Review June 2013\n52\nStatement of the Monetary Policy Committee\n22 November 2012\nIssued by Gill Marcus, Governor of the South African Reserve Bank, at a meeting of the \nMonetary Policy Committee (MPC) in Pretoria\nSince the previous meeting of the Monetary Policy Committee (MPC) the domestic growth \noutlook has deteriorated, while the upside risks to inflation have increased. Widespread labour \nmarket instability and work stoppages have reduced output and export volumes, with the \npotential for employment losses. Risks to the inflation outlook have been increased by a further \ndepreciation of the rand exchange rate, partly in response to these developments, as well as by \na possible higher trend in wage settlements and the impact of the reweighting and rebasing of \nthe CPI basket by Statistics South Africa (Stats SA). \nAt the same time the global environment remains challenging with slowing growth in a number \nof regions, declining global industrial output, the worsening Japanese outlook, continued \nuncertainty regarding United States (US) fiscal policy and a resurfacing of concerns relating to \nthe resolution of the crisis in the eurozone, which is now in recession. \nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all urban areas \nat 5,6 per cent in October 2012, and up from 5,5 per cent in September, was 0,2 percentage \npoints above the market consensus. The categories of food and non-alcoholic beverages, \nhousing and utilities, and transport together accounted for 3,5 percentage points of the inflation \noutcome. The upside surprise was mainly attributable to food prices which increased by 2,8 per \ncent month on month, and 6,7 per cent on a year-on-year basis. Core inflation, as measured \nby the exclusion of food, petrol and electricity from CPI, measured 4,7 per cent, unchanged \nfrom September. Administered prices excluding petrol increased at a year-on-year rate of \n7,5 per cent.\nYear-on-year producer price inflation moderated further to 4,2 per cent in September, having \nmeasured 5,1 per cent in August. This favourable trend was driven mainly by lower rates of \nincrease in the prices of mining products. A marked acceleration was seen in the food-related \ncategories, with agricultural prices increasing at a year-on-year rate of 5,2 per cent in September, \ncompared with 4,3 per cent in August and a recent low of 1,7 per cent in May. Manufactured \nfood prices increased by 9,0 per cent and 10,1 per cent in August and September respectively.\nThe inflation forecast of the Bank reflects a deterioration in the inflation outlook for 2013 \ncompared with the previous forecast. Inflation is now expected to average 5,6 per cent in the \nfinal quarter of 2012, and 5,6 per cent for the year. It is expected to average 5,5 per cent in \n2013 and 5,0 per cent in 2014, with a peak of 5,7 per cent expected in the first quarter of 2013. \nThis near-term deterioration is mainly due to higher expected food price inflation and the recent \ndepreciation of the rand. Core inflation remains contained, indicating the absence of significant \ndemand pressures. This measure is expected to peak at 5,0 per cent in the first quarter of 2013, \nand to average 4,8 per cent and 4,5 per cent in 2013 and 2014 respectively. \nThese forecasts do not incorporate the new CPI weights and rebasing recently announced by \nStats SA as the finer details of these revisions, including the introduction of new products, and \nthe method of linking the old and new baskets, have not yet been finalised. Preliminary evidence \nsuggests that a slight upward bias to the Bank’s central projection for headline CPI inflation \ncould occur in 2013. On the assumption that the rate of increase in price changes for most \ngoods and services, apart from food and electricity, is more or less unchanged, the combined \naverage upward bias would be relatively small, in the order of around 0,2 percentage points. \nThe new weights and the rebased index will be incorporated formally into the Bank’s forecast in \n2013 after the revisions have been finalised by Stats SA.\nInflation forecasts of financial analysts surveyed by Reuters have also been revised upwards. \nFinancial analysts now expect inflation to average 5,5 per cent in 2013, compared with \n5,3 per cent in the previous survey. The expectation for 2014 remains unchanged at 5,4 per \ncent. It is unclear if these forecasts already take account of the changes to the CPI weights. \n53\nMonetary Policy Review June 2013\nThe break-even inflation rates have also exhibited a moderate upward trend since the previous \nMPC meeting.\nThe global economic outlook has deteriorated somewhat with a return to recession in the \neurozone. The prospects for the region remain bleak amid procyclical fiscal austerity, continued \nhousehold- and banking-sector deleveraging in a tighter regulatory environment, and renewed \nconcerns relating to the unresolved sovereign debt crisis. The deepening recession has served to \nheighten the solvency risk of the peripheral countries. The recently announced Outright Monetary \nTransactions (OMT) programme by the European Central Bank remains yet to be activated. The \nJapanese economy contracted in the third quarter and leading indicators point to a possible \nrecession. Although the United Kingdom economy experienced positive growth in the third \nquarter, the outlook is negative as the favourable impact from the Olympic Games dissipates. \nThe prognosis for the US economy remains highly dependent on progress in resolving the so-\ncalled fiscal cliff. The related uncertainty has already adversely affected investment decisions, \nand while some last-minute political compromise is likely, the ultimate extent of the fiscal \ncontraction and its impact on growth are still unclear. Failure to resolve this issue could result in \na recession and derail the nascent recovery in the housing market. \nProspects for emerging markets, while still positive, have also deteriorated somewhat during the \npast months, contributing to the downside risk to the global recovery. Trend growth rates in Asia \nare declining, and both China and India are expected to experience weaker growth rates, with \npossible implications for commodity prices.\nFor some time the exchange rate of the rand has been determined primarily by external \ndevelopments, particularly changing global risk perceptions. More recently, domestic factors \nappear to have become dominant determinants of the exchange rate. These include the \nincreased risk posed to the economic outlook by labour market developments in the mining \nand agricultural sectors in particular; the widening deficit on the current account of the balance \nof payments, which is likely to have been exacerbated by the stoppages; and the ratings \ndowngrades by two rating agencies while also retaining a negative outlook. Since the previous \nmeeting of the MPC, the rand has depreciated by about 6,7 per cent against the US dollar, by \n5,8 per cent against the euro, and by 5,8 per cent on a trade-weighted basis. \nInflows into the domestic bond market associated with South Africa’s inclusion in the World \nGovernment Bond Index of Citibank probably helped to moderate the degree of depreciation \nover this period. Since the beginning of the year, net purchases of South African bonds by non-\nresidents have totalled R85,2 billion. By contrast, non-residents have been net sellers of South \nAfrican equities since the beginning of the year to the value of R6,8 billion. \nThe rand is expected to remain sensitive to both unfolding domestic economic and political \ndevelopments, in addition to global risk perceptions. The extent to which the weaker rand feeds into \ninflation will be dependent on the trading range of the rand going forward and the duration of these \nmoves. Most analysts do not expect further weakening of the rand from current levels, and a number \nof them expect some recovery. However, the rand is expected to remain volatile and subject to \novershooting, and its depreciation poses an increased upside risk to the inflation outlook.\nThe domestic economic growth outlook has deteriorated recently, largely as a result of the \ncontinued global slowdown and aggravated by domestic events. Mining output has declined \nsignificantly as a result of work stoppages and there are likely to be longer-term implications for \noutput, exports and employment as the mines adjust to higher labour costs. Labour unrest in \nparts of the agricultural sector is also expected to affect output and prices adversely. \nRecent high-frequency data indicate that third-quarter growth was well below the 3,2 per cent \nrecorded in the second quarter. Mining output contracted at a quarter-to-quarter rate of 3,2 per \ncent in the third quarter and further contractions are expected in the fourth quarter. The physical \nvolume of manufacturing production was adversely affected by the road freight transport sector \nstrike in September when a contraction of 2,3 per cent was recorded on a month-to-month \nbasis. For the quarter as a whole manufacturing output increased by 0,3 per cent. The outlook \nfor the sector remains negative, with the Kagiso Purchasing Managers Index declining to a level \nof 47,1 in October, reflecting an expectation of contraction in the coming months.\nMonetary Policy Review June 2013\n54\nThe Bank’s forecast of gross domestic product (GDP) growth has been revised downward from \n2,6 per cent to 2,5 per cent in 2012. Growth in 2013 is now expected to average 2,9 per cent, \ncompared with 3,4 per cent previously, while the growth forecast for 2014 has been revised \ndown from 3,8 per cent to 3,6 per cent. Moreover, the risks to this forecast remain on the \ndownside. The RMB/BER Business Confidence Index declined marginally in the fourth quarter \nand remains below the 50 index level. \nConsumption expenditure by households appears to have lost some momentum recently following \nthe 2,9 per cent annualised growth rate in the second quarter. Consumer confidence in the third \nquarter, as measured by the FNB/BER Consumer Confidence Index improved marginally, but was \nstill at low levels that were not consistent with robust consumer spending. Nevertheless, growth in \nretail trade sales, which account for about half of household consumption expenditure, has been \nrelatively resilient having grown at a quarter-to-quarter rate of 1,9 per cent in the third quarter. \nHowever, passenger vehicle sales and expenditure on services were subdued.\nThere is, however, still little evidence of demand pressures on inflation. The resilience of \nconsumer demand has been attributed to a number of factors, including low interest rates, \nrelatively low inflation, real income growth, high growth rates in unsecured lending, and until \nrecently a relatively strong exchange rate. Some of these factors may be a constraint on \nexpenditure going forward, especially when combined with higher administered price increases \nwhich constrain discretionary spending.\nThe MPC is concerned about the recent trend in wage settlements and the potential negative \nimpact on the economy, particularly on growth and investment. These developments could also \nresult in lower growth in employment creation or an absolute decline in employment. Although \nthe reported headline increases granted in some of the settlements are higher than the actual \naverage increases, there is no doubt that the increases granted are well above inflation. This \nhas the potential to increase aggregate demand and prices with a risk of a possible wage-price \nspiral, which could negate the real benefits of these wage increases to workers. However, \nthe impact will be moderated to some extent by the inevitable job losses that are likely to \naccompany such increases in the context of a slowing economy. The cost-push effect of these \nwage increases will therefore depend on the actual increase in the total wage bill and unit labour \ncost developments. \nThe most recent wage data, which do not yet incorporate these latest trends, show that in \nthe second quarter of 2012 growth in unit labour costs was 6,1 per cent, while Andrew Levy \nEmployment Publications reported average wage settlement rates in collective bargaining \nagreements of 7,4 per cent for the first nine months of 2012. Wage settlements at these levels \nwere not assessed to pose a major risk to inflation and these trends will be closely monitored \nas the collective bargaining landscape has become more fractious.\nIt is also too early to assess the impact of recent developments on employment. According \nto the Quarterly Labour Force survey, total employment increased by about 200 000 in \nthe third quarter of 2012, but the increased number of unemployed workers resulted in the \nunemployment rate increasing to 25,5 per cent in September. It is expected, however, that \nthe positive employment trend in the non-gold mining sector observed during the past year is \nlikely to have reversed or slowed down, while the negative employment trends in manufacturing \nand gold mining are likely to persist. The net effect of higher wages and lower employment on \naggregate expenditure is therefore still unclear at this stage.\nCredit extension to the private sector moderated on a quarter-to-quarter basis in the third quarter \nof 2012, when an annualised increase of 5,4 per cent was recorded. Twelve-month growth \nin total loans and advances to the private sector was 8,8 per cent in September. However, \nmortgage loan growth remained subdued. When this category is excluded, loans increased at a \nsignificant twelve-month rate of 16,6 per cent. The main impetus has come from the persistently \nstrong growth in unsecured lending to households, and this has been related to real income \ngrowth particularly in the public sector. Growth in unsecured lending to households remains in \nexcess of 30 per cent but there are some tentative signs that this growth may be moderating. \nAlthough to date this has not represented a systemic risk, as it is still a small part of total loans \n55\nMonetary Policy Review June 2013\nand advances, this is being carefully monitored by the Bank. Unsecured lending has probably \nhelped to underpin household consumption expenditure.\nThe fiscal policy stance, as reflected in the Medium Term Budget Policy Statement (MTBPS) \nremains supportive of the economy through its contra-cyclical stance. Although the goal of fiscal \nconsolidation is being maintained, the timing has been pushed out further, as lower expected \ngrowth is likely to result in lower revenues. Growth in expenditure is projected to remain the \nsame as that set out in the February budget, and no large boost to aggregate demand is \nexpected that could impact on the inflation outlook. \nFood prices remain a significant risk to the inflation outlook. Global food prices, while still high, \nhave declined from recent peaks. The impact of this shock is still to fully filter through to domestic \nprices. Although there is usually a lag between the impact of global food price developments on \ndomestic prices, the impact appears to have been felt more quickly than is generally the case. \nThe recent depreciation is also expected to exacerbate the upside risk to food prices. Futures \nprices, however, indicate that maize prices may be moderating following a better-than-expected \ndomestic harvest.\nInternational oil prices have remained relatively unchanged since the previous meeting of the \nMPC, although in the past few days have increased following ongoing hostilities in the Middle \nEast. Domestic petrol prices declined in November despite the depreciation of the rand and, \nshould the exchange rate and international product prices remain at current levels, a further \nmoderate decline can be expected in December. However, international prices remain highly \ndependent on the global growth outlook and political developments in the Middle East.\nSince the previous MPC meeting the domestic landscape has seen a marked change. While \nthe global crisis remains unresolved, South Africa has seen significant developments that \nhave impacted on the economic outlook and confidence. These domestic developments, if \nnot addressed in a comprehensive and constructive manner, have the potential to derail the \nprogress made to date whereby South Africa has been able to withstand the worst contagion \neffects of the ongoing global crisis.\nWhile recognising that there are real issues that underlie the recent wave of wildcat strikes, \nthe Bank is concerned about the conduct of some of the parties involved in the recent labour \nmarket instability and, in particular, the unacceptable levels of violence that have accompanied \nthe strikes. It is critical that both employers and employees take constructive steps to address \nthe fraught relations that appear to be prevalent in a number of areas. Employers need to better \nappreciate the contribution to stability that an informed, experienced, skilled and organised \nworkforce can make, and also need to be better informed about, and sensitive to, the conditions \nand circumstances of their employees. An important element of this is to take measures that \nenable employees to be better informed about the financial situation, strategy and future plans \nof the companies and sectors that they work in. \nAt the same time employees need to ensure an end to the use of violence in labour relations. In \ntheir quest for fair and decent employment conditions, employees need to recognise the potential \nnegative effects of unsustainable cost structures on employment levels and competitiveness in \nthe absence of improved productivity. In the prevailing conditions there is the danger of a wage-\nprice spiral and, inevitably, it will be the workers who bear the brunt of the fallout.\nThe costs are not only the direct costs in terms of lost production, but also the possible \nincreased costs of finance. In the context of a very weak global economy, where South Africa \nshould strive to be a destination of choice and thereby grow the economy and achieve the \npursued developmental and employment goals, the ability to attract investment and improve \nthe country’s ratings must be a clear objective. \nWhile many of the strikes appear to have been resolved, long-term resolution of the underlying \ncauses requires ongoing, concerted action on the part of all the parties involved. We need \ncohesion and certainty of policy, as well as unity of purpose to build an inclusive, longer-term \nvision. The National Development Plan is a broad unifying framework that has been adopted \nby both Cabinet and Parliament, and could form the base to take the country forward, enabling \nSouth Africa to play an effective role in the continent as a favoured trading and investment partner. \nMonetary Policy Review June 2013\n56\nThe MPC assesses the balance of risks to the inflation outlook to be on the upside, given \nthe continued pressure of food prices, uncertainty of the exchange rate movements and \nthe reweighting and rebasing of the CPI. Furthermore, the possible impact of higher wage \nincreases could exert further upward pressure on inflation notwithstanding the concerns that \nrecent developments in the labour market could impact negatively on employment. The MPC \nconsiders that the demand pressures on inflation at this stage remain relatively benign, as \nevidenced in the contained trend of underlying inflation. There are also signs of moderation of \nconsumption expenditure against the backdrop of a weak supply side of the economy. The \nnegative output gap is expected to persist for some time, and the balance of risks to the growth \noutlook remains on the downside.\nIn the light of these factors, the MPC is of the view that the current accommodative stance \nremains appropriate and has therefore decided to keep the repurchase rate unchanged at \n5,0 per cent per annum. As always, the MPC will monitor developments closely and will not \nhesitate to act in a manner consistent with its mandate.\n57\nMonetary Policy Review June 2013\nStatement of the Monetary Policy Committee\n24 January 2013\nIssued by Gill Marcus, Governor of the South African Reserve Bank, at a meeting of the \nMonetary Policy Committee (MPC) in Pretoria\nSince the previous meeting of the Monetary Policy Committee (MPC) there has been some \nimprovement in global financial market sentiment, but economic growth prospects in a number \nof the major advanced economies or regions remain constrained. Downside risks to the outlook \npersist as the structural problems in many countries, and in the eurozone, in particular, are still \nunresolved. Monetary policy in most countries is likely to remain accommodative in the absence \nof clear evidence of a sustained recovery, particularly against the backdrop of a relatively benign \nglobal inflation environment.\nDespite a generally positive reaction to the ANC elective conference, ongoing labour conflict, the \nproposed scaling down of mining operations and ratings agency downgrades are symptomatic \nof the challenging domestic outlook. In the absence of coherent and consistent structural \npolicy initiatives domestic economic growth is expected to continue to be well below both \nwhat is possible and required to make significant inroads into unemployment. In contrast to the \nsituation in most advanced economies, the risks to the inflation outlook remain on the upside, \ndue, in large part, to continued exchange rate and wage cost pressures. \nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all urban \nareas was 5,7 per cent in December 2012, up from 5,6 per cent in November. The categories of \nfood and non-alcoholic beverages, housing and utilities, and transport together accounted for \n3,5 percentage points of the inflation outcome. Food price inflation moderated from 7,5 per cent \nin November to 7,0 per cent, mainly as a result of lower meat and grain price increases. Core \ninflation, as measured by the exclusion of food, petrol and electricity from CPI, which had been \nunchanged at 4,7 per cent since September, increased to 4,9 per cent in December, mainly as \na result of increases in services price inflation and in line with the Bank’s forecast. Administered \nprices increased by 8,8 per cent, and by 7,6 per cent excluding petrol.\nHaving reached a recent low of 4,2 per cent in September 2012, year-on-year producer price \ninflation increased to 5,2 per cent in both October and November. This reversal of the previous \ndownward trend was mainly due to price increases in mining and quarrying, agricultural products \nand manufactured food. Agricultural prices increased at year-on-year rates of 6,3 per cent and \n5,9 per cent in October and November respectively, while manufactured food prices increased \nat rates of 10,9 per cent and 11,1 per cent in these months respectively.\nThe inflation forecast of the Bank reflects a further deterioration in the inflation outlook for \n2013 compared with the previous forecast. The forecasts do not yet incorporate the new CPI \nweights and rebasing recently announced by Statistics South Africa, but these changes will \nbe incorporated formally into the Bank’s next forecast. The impact on the inflation trajectory is \nlikely to be marginal. Having averaged 5,6 per cent in 2012, inflation is now expected to average \n5,8 per cent in 2013 and 5,2 per cent in 2014, compared with the previous forecasts of 5,5 per \ncent and 5,0 per cent for the respective years. Inflation is expected to peak at 6,1 per cent in the \nthird quarter of 2013 and then to moderate gradually to 5,1 per cent in the final two quarters of \n2014. This deterioration is largely due to higher expected food price inflation, the lagged effects \nof the depreciation of the rand and higher expected unit labour costs. \nThe forecast of core inflation is more or less unchanged, indicating the continued absence of \nsignificant demand pressures. This measure is expected to peak at 5,0 per cent in the first two \nquarters of 2013, and to average 4,9 per cent and 4,5 per cent in 2013 and 2014 respectively. \nInflation expectations remain anchored at around the upper end of the inflation target range. \nAccording to the Survey of Inflation Expectations conducted by the Bureau for Economic Research \n(BER) in the fourth quarter of 2012, inflation is expected to average 6,1 per cent in 2013 and \n6,2 per cent in 2014. This represents a marginal increase of 0,1 percentage point for 2013 compared \nwith the previous survey, while the forecast for 2014 is unchanged. Business executives are the \nMonetary Policy Review June 2013\n58\nmost pessimistic about inflation, having raised expected inflation rates to 6,6 per cent and 6,7 per \ncent in 2013 and 2014, while trade union respondents reduced their forecasts to 6,1 per cent and \n6,6 per cent respectively for these years. The forecasts of financial analysts increased marginally, \nbut remain within the target range for the forecast period. For the past four quarters expectations \nfor the next five years have remained unchanged at 6,2 per cent.\nThe global growth outlook remains challenging, notwithstanding improved sentiment in global \nfinancial markets following the interim deal related to the fiscal cliff in the US. The fiscal issues \nhave not been fully resolved, with decisions on expenditure cuts and the debt ceiling delayed \ntill later this year. While the worst-case fiscal scenario has been avoided, the uncertain fiscal \noutlook is likely to contribute to continued sub-trend US growth. On the positive side, there are \ncontinued signs of a recovery in the US housing market and improved corporate profitability. \nAlthough sovereign debt risks in the eurozone have subsided for now and bond spreads on \nperipheral European debt have narrowed significantly, the region is likely to remain in recession \nfor much of the year, as fiscal tightening and balance-sheet repair by banks and households \ncontinue. The unemployment rate has now reached 11,8 per cent, with youth unemployment at \n24 per cent. The outlook for Germany, the main growth driver in the region, has also deteriorated. \nGrowth prospects in the UK remain relatively weak, while the outlook for Japan is uncertain \ndespite the announcement of substantial fiscal and monetary policy stimuli.\nThe outlook for emerging markets, particularly those in Asia, is more positive. The Chinese \neconomy appears to have stabilised following concerns about a possible hard landing, and \nconsensus forecasts suggest some growth acceleration in 2013 in both China and India. Growth \nin Africa is expected to be sustained at rates in excess of 5 per cent, while Latin American \ngrowth is expected to be more restrained, but an improvement on 2012.\nThe rand exchange rate continues to pose an upside risk to the inflation outlook. The exchange \nrate has been impacted by the widening deficit on the current account of the balance of \npayments during 2012 and changing global and domestic risk perceptions, particularly relating \nto the adverse developments in the South African labour market, and the downgrades by the \nvarious ratings agencies. Since the previous meeting of the MPC, the rand has been fairly \nvolatile, having appreciated initially from R8,94 to the US dollar, to R8,45 at the end of the year, \nbut subsequently depreciated to current levels of around R9,00. Since the beginning of the year, \nthe rand has depreciated by 6,1 per cent on a trade-weighted basis and by about 6,6 per cent \nagainst the US dollar.\nWhile the rand is expected to remain sensitive to domestic and global developments and \ncontinued volatility can be expected, most analysts do not expect significant further sustained \ndepreciation in the coming months. The depreciation of the rand is expected to help moderate \nthe current-account imbalance, although platinum export growth may be undermined to some \nextent by possible shaft closures. However, financing of the deficit may be more challenging \ndespite relatively high domestic nominal bond yields, as sentiment towards South Africa \nhas deteriorated, and non-residents already hold over one-third of the stock of outstanding \ngovernment bonds. \nNon-resident net purchases of domestic bonds totalled R88,6 billion during 2012, due in part \nto South Africa’s inclusion in the Citibank World Government Bond Index. However, the pace \nof inflows declined substantially in the final quarter of the year, when net purchases amounted \nto R10,6 billion. Since the beginning of 2013, net purchases by non-residents have amounted \nto R4,3 billion. While non-residents were net sellers of equities during 2012 to the value of \nR3,4 billion, they were net buyers to the value of R7,3 billion in November and December. Year to \ndate, however, the negative trend regarding equities has continued with net sales of R2,3 billion \nas growth prospects remain weak.\nDomestic economic growth remains fragile and below potential following an annualised growth \nrate of 1,2 per cent in the third quarter of 2012, and an estimated growth rate of around 2,5 per \ncent for the year. A similar outcome is expected in 2013 with growth of 2,6 per cent forecast, \nrevised down from 2,9 per cent in the previous forecast. A more favourable outcome of \n3,8 per cent is forecast for 2014, compared with 3,6 per cent previously, driven in part by a \nmore favourable global outlook. However, the risks to these forecasts are assessed to be on \n59\nMonetary Policy Review June 2013\nthe downside, given uncertainties and instability in parts of the mining and agricultural sectors \nin particular. Constraints to growth are both external and internal. To achieve a higher internally-\ngenerated growth rate would require a serious commitment to implementing a range of structural \nreforms and making the necessary trade-offs as outlined in the National Development Plan.\nThe outlook for parts of the mining sector is bleak, following continued labour disputes and \nannouncements of possible closures of shafts and mines, a consequence of increased cost \npressures, weak global demand and prices. Although mining output increased on a month-\nto-month basis in November, on a three-month-to-three-month basis a contraction of 10,4 per \ncent was recorded. \nThere are mixed signals pertaining to the outlook for the manufacturing sector. The real volume \nof manufacturing production increased by 2,3 per cent in November, its highest month-on-\nmonth rate in 4 years, due in part to a rebound from widespread strike activity in previous \nmonths, and growth in the fourth quarter is estimated to have been relatively robust. Capacity \nutilisation has also increased. However, the Kagiso PMI declined to below the 50 index point \nlevel to 47,4 in December, indicating an expectation of some contraction in the sector.\nThe negative business sentiment evident in the confidence indicators is also reflected in the \ncontinued weakness in private-sector gross fixed capital formation. Recent developments in \nthe mining sector are likely to reinforce this weakness as plans are scaled back. Investment \nexpenditure is likely to remain underpinned by the government and state-owned enterprises. \nIn the third quarter of 2012, gross fixed capital formation grew at an annualised rate of 7,2 per \ncent, but private-sector capital formation, which accounts for just under two thirds of the total, \nonly grew at a rate of 2,8 per cent. \nGrowth in consumption expenditure by households moderated as expected in the third \nquarter of 2012 when it increased by 2,6 per cent. The main driver of the moderation was the \ndecline in expenditure growth on services and non-durable goods. However, there are also \nsigns of moderation in the growth of expenditure on durable and semi-durable goods, and \nthe depreciated exchange rate is likely to sustain this trend. Growth in motor vehicle sales has \nslowed in recent months, and there was a marked decline in the confidence of new vehicle \ntraders reported by the BER. Despite the higher-than-expected increase in retail trade sales in \nNovember, the quarterly rates suggest further moderation in growth. The FNB/BER Consumer \nConfidence Index declined by 2 index points to -3 index points in the final quarter of 2012.\nOn balance, the MPC does not assess growth in household consumption expenditure to be \nexcessive or to pose significant inflationary risks, and further moderation is possible. Factors \nthat affect the outlook for consumption expenditure, both positively and negatively, include \nconcerns regarding employment, wage settlements, credit extension particularly unsecured \nlending, and administered price increases which impact on discretionary spending. \nThe upward momentum of banks’ total loans and advances to the private sector has continued, \nwith twelve-month growth of 9,9 per cent recorded in November, the highest growth rate \nsince February 2009. Excluding mortgage advances, which remain subdued, the increase in \nNovember was 18,3 per cent. Bank credit extension to the household sector increased by \n10,4 per cent. General loans to households, which is mainly unsecured lending, while still \nexhibiting rates of growth in excess of 30 per cent, shows some signs of moderation amid \nreports that banks are becoming more cautious in extending new loans in this category. Access \nto new loans may also be constrained by the increased size of outstanding debt. However, \ndespite rising debt levels, household debt to disposable income appears to have stabilised at \naround 76 per cent.\nThe MPC remains concerned about the potential impact of the higher level of wage settlements \non employment and inflation. There are indications that wage increases are trending higher, \nwith growth in nominal remuneration per worker increasing from 7,2 per cent in the second \nquarter of 2012 to 8,1 per cent in the third quarter. Once productivity increases are accounted \nfor, this translates into unit labour cost increases of 6,1 per cent and 6,7 per cent in these \nrespective quarters. According to Andrew Levy Employment Publications, the overall average \nwage settlement rate in collective bargaining agreements amounted to 7,4 per cent in the first \nnine months of 2012. \nMonetary Policy Review June 2013\n60\nThe MPC is mindful of the danger of a possible wage-price spiral and further employment \nlosses should unaffordable real wage demands be granted while economic growth remains \nconstrained. The risks to inflation should this scenario play itself out are significant in the \nabsence of productivity gains. \nThe subdued pace of employment creation in the private sector has been further undermined \nby the fractious nature of recent wage negotiations and the announcement of further possible \nrestructuring in the mining sector, which would involve the closure or mothballing of mines or \nshafts. According to the Quarterly Employment Statistics survey of Statistics South Africa, non-\nagricultural formal sector employment grew by 1,0 per cent or 82 000 employees in the year \nto September 2012. Almost two-thirds of this increase was accounted for by the public sector, \nwhile net job losses over this period were experienced in the manufacturing and construction \nsectors, with employment in the mining sector unchanged. However, in the third quarter of 2012, \n15 000 jobs were shed in the mining sector and there are fears that this trend could continue. \nEmployment in the agricultural sector, which is not covered by the survey, is also at risk.\nFood prices continue to pose a significant near-term risk to the inflation outlook, although there \nare signs that these price pressures may moderate during the year as a result of favourable \nbase effects, as well as the recent moderation in global and domestic wheat and maize prices. \nThe price of these commodities will also be influenced by developments in the exchange rate of \nthe rand and unpredictable weather patterns.\nAdministered prices remain on average well in excess of the upper end of the target range, \nand there is as yet no clarity about the new Eskom tariffs to be implemented later this year. \nAt this stage a 16 per cent tariff increase is assumed in the forecast. International oil prices \nhave remained relatively stable for the past few months and are more or less unchanged from \nthe previous meeting of the MPC. Futures prices reflect an expectation of some moderation \nin coming months, but some volatility can be expected. The domestic price of petrol, which \nis also impacted by the exchange rate, declined by a cumulative 34 cents per litre since early \nNovember, but much of this decline is likely to be reversed in February.\nThe MPC continues to assess the balance of risks to the inflation outlook to be on the upside. \nWhile the risks to the forecast emanating from food prices may have diminished somewhat, \nparticularly over the medium term, the exchange rate and wage settlements remain the key \nupside risk factors. While the reweighting and rebasing of the CPI is still to be finalised, the \nimpact is likely to be marginal, but on the upside. Core inflation trends indicate that demand \npressures are relatively contained, and household consumption expenditure has continued \nto moderate.\nRisks to economic growth are assessed to be on the downside, particularly given the uncertain \noutlook for the mining industry and ongoing unsettled labour relations. The negative output gap \nis therefore expected to persist. The MPC remains concerned about the possibility of a wage-\nprice spiral and its potential to exacerbate the high level of unemployment in the economy. As \nwe noted in the previous MPC statement, concerted action is needed on the part of all the \nparties involved. We need cohesion of policy and decision-making to provide the necessary \ncertainty for sustainable economic growth and development. \nThe monetary policy stance remains accommodative and appropriate, with the real policy rate \nremaining slightly negative, notwithstanding the expected temporary breach of the inflation \ntarget. However, further accommodation at this stage is constrained by the upside risks to the \ninflation outlook. The MPC has therefore decided to keep the repurchase rate unchanged at \n5,0 per cent per annum. As always, the MPC will monitor developments closely and will not \nhesitate to act in a manner consistent with its mandate.\n61\nMonetary Policy Review June 2013\nStatement of the Monetary Policy Committee\n20 March 2013\nIssued by Gill Marcus, Governor of the South African Reserve Bank, at a meeting of the \nMonetary Policy Committee (MPC) in Pretoria\nThere are a number of key developments that this meeting of the Monetary Policy Committee \n(MPC) had to consider, not least among them on the domestic front the challenge of moderate \ngrowth, rising inflation, a depreciated currency, a wider current-account deficit and difficult \nlabour relations and unemployment that remains stubbornly high. \nSince the previous meeting of the MPC the domestic inflation outlook has deteriorated slightly. \nRisks posed by the depreciation of the rand exchange rate have overshadowed the more \nfavourable developments, including lower electricity price increases and some moderation in \nfood price inflation. Nevertheless, inflation is expected to remain contained within the target \nrange apart from a temporary breach in the third quarter of 2013. The domestic economic \ngrowth prospects remain fragile amid continued tensions in the labour market, particularly in \nthe mining sector. \nThe global economy is still characterised by a multispeed recovery. However, recent events in \nEurope, particularly as they affect Cyprus, have increased risk and uncertainty in the region, \nand have the potential to reignite the banking and sovereign debt crisis and undermine growth \nprospects further. The global outlook is also clouded by the fiscal gridlock in the United States \n(US) that remains unresolved.\nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all urban \nareas was 5,9 per cent in February 2013, up from 5,4 per cent in January. The upside surprise \nin February was mainly due to the increase in medical insurance costs, which resulted in the \ncontribution to CPI from miscellaneous goods and services increasing from 0,7 percentage \npoints to 1,1 percentage points. This category also impacted on core inflation, which increased \nmarkedly from 4,7 per cent in January to 5,3 per cent in February. Petrol prices also contributed \nto the upward trend, having increased by 11,9 per cent. Food price inflation measured 6,3 per \ncent, down from a recent high of 7,5 per cent in November 2012, and its contribution to overall \ninflation declined from 1,0 percentage points to 0,9 percentage points. Administered prices \nincreased by 8,9 per cent, and by 7,5 per cent, excluding petrol, year-on-year. The producer \nprice inflation for final manufactured goods measured 5,8 per cent in January.1\nThe inflation forecast of the Bank reflects a slight deterioration in the inflation outlook for 2013 \ncompared with the previous forecast. The forecasts incorporate the new CPI weights and \nrebasing announced by Statistics South Africa (Stats SA), as well as the lower electricity price \nincrease of 8 per cent granted to Eskom by NERSA. Inflation is now expected to average 5,9 per \ncent in 2013 and 5,3 per cent in 2014, compared with the previous forecasts of 5,8 per cent and \n5,2 per cent for these respective years. Inflation is expected to breach temporarily the upper \nend of the target range in the third quarter of 2013, when it is expected to average 6,3 per cent, \nand then to moderate gradually to 5,2 per cent in the final quarter of 2014. This deterioration is \nlargely due to the depreciation of the rand and higher petrol prices, which more than offset the \nimpact of the lower electricity price increases and a lower starting point.\nThe forecast of core inflation is more or less unchanged for 2013 but higher for 2014, yet still \nindicates the continued absence of significant demand pressures. This measure is expected \nto peak at 5,1 per cent in the second quarter of 2014, and to average 4,8 per cent and 4,9 per \ncent in 2013 and 2014 respectively. This forecast is likely to be adjusted upwards in the light of \nthe increase in medical insurance costs announced earlier today.\nInflation expectations as reflected in the Reuters survey of analysts conducted in February 2013 \nhave remained more or less unchanged since December. Expectations remained anchored \nwithin the target range. but close to the upper end, and, as with the Bank’s forecast, the peak \nis expected in the third quarter of 2013.\n1.\t\nStatistics South \nAfrica has adopted \na “stages-of-\nproduction” concept \nfor the producer price \nindex (PPI) and no \nlonger produces one \naggregated series. \nThe five producer \nprice series are (i) PPI \nfor final manufactured \ngoods; (ii) intermediate \nmanufactured goods; \n(iii) electricity and \nwater; (iv) mining; and \n(v) agriculture, forestry \nand fishing. The PPI \nfor final manufactured \ngoods is regarded \nas best representing \nthe effects of price \nchanges through \nthe five stages of \nproduction.\nMonetary Policy Review June 2013\n62\nThe global economic outlook presents a mixed picture following a disappointing fourth quarter \nin most of the advanced economies. Recent data from the US indicate positive trends in the \nlabour market and household consumption expenditure due in part to positive wealth effects \nfrom the housing and equity markets. However, uncertainty about the possible negative impulse \nfrom fiscal tightening continues amid political differences over fiscal policy. Economic growth is \nstill expected to remain below trend in 2013.\nThe outlook for some of South Africa’s other main advanced-economy trading partners is \nless positive. The eurozone remains in recession, and is not expected to recover before mid-\n2013 at the earliest. The tail risks from a sovereign debt crisis appeared to have subsided, but \nthe uncertainty created by the inconclusive Italian general election and the crisis in Cyprus \nhave renewed concerns about the stability of the region. The outlook for the United Kingdom \neconomy remains subdued against the backdrop of continued fiscal austerity.\nGrowth prospects in the Asian economies are more positive. The Japanese economy is expected \nto be bolstered by positive consumer sentiment in response to fiscal and monetary stimuli, but \nthe response on the capital expenditure side is still cautious. Nevertheless, an improved growth \nperformance is expected, particularly given the 18 per cent depreciation of the yen against the \nUS dollar since October 2012. Growth in China is expected to be sustained at relatively robust \nlevels as fixed investment expenditure remains strong despite a moderation in consumption \nexpenditure growth. Growth in other emerging markets remains positive.\nThese trends suggest that monetary policy in the advanced economies will remain \naccommodative for some time despite recent fears in the financial markets of an early reversal \nof quantitative easing in the US. The relatively weak growth outlook in the advanced economies \nhas contributed to the subdued global inflation environment.\nThe exchange rate of the rand continues to pose the main upside risk to the inflation outlook. \nSince the beginning of the year, the rand has depreciated by 8,4 per cent against the US dollar \nand fluctuated within a range of R8,45 and R9,26. However, given the significant realignment of \nglobal currencies, and particularly the depreciation of the Japanese yen and the pound sterling \nagainst the US dollar, the trade-weighted depreciation since the beginning of the year was more \nmoderate at 5,6 per cent.\nDomestic factors contributing to the recent rand depreciation include continued work stoppages \nin parts of the mining sector, which also have the potential to disrupt electricity supplies, and \nthe further widening of the deficit on the current account of the balance of payments, which \nmeasured 6,3 per cent in 2012. Some narrowing of the deficit is expected in the course of \nthe year in response to the depreciation, although the degree of response will be constrained \nby weak demand from advanced economies as well as strong infrastructure-related import \ndemands. Mining export growth will also be dependent on the resolution of labour market \nissues with a resumption of full production and on the extent of possible shaft closures. \nEquity and bond flows to emerging economies have generally moderated in the past few months, \nmaking for a more challenging global environment for financing the deficit. Inflows into South \nAfrican bond and equity markets have, however, been sustained, and year-to-date non-resident \nnet purchases of equities and government bonds have totalled R6,1 billion and R11,3 billion \nrespectively. These flows have, however, been volatile, and the growing proportion of bonds \nowned by non-residents, currently around 37 per cent of the total outstanding stock of debt, \ncould constrain the pace of inflows.\nThe rand is likely to remain sensitive to both domestic and global developments. The exchange \nrate is expected to remain volatile and subject to overshooting, and further sustained \ndepreciation would increase the upside risk to the inflation outlook. The Reuters Econometer \nsurvey conducted in February shows that most analysts still expect the rand to appreciate from \ncurrent levels during the year, although the degree of dispersion is indicative of the uncertainty \naround these forecasts. According to this survey, the consensus forecast for the rand/US$ \nexchange rate at the end of 2013 is R8,61, with a range of forecasts between R9,19 and R7,80.\nDomestic growth prospects remain relatively subdued, notwithstanding a better-than-\nexpected fourth quarter GDP growth outcome, and positive developments in the mining and \n63\nMonetary Policy Review June 2013\nmanufacturing sectors in January. The economy grew by 2,5 per cent in 2012, having recorded \nannualised growth of 2,1 per cent in the fourth quarter, despite a 9,3 per cent contraction in \nthe mining sector. The moderate pace of recovery is expected to continue in 2013. The Bank’s \nforecast is for growth of 2,7 per cent this year, marginally up from the previous forecast of \n2,6 per cent, and 3,7 per cent in 2014, compared with a previous forecast of 3,8 per cent. The \nrisks to these forecasts are assessed to be on the downside. \nThe flat trajectory of the Bank’s leading indicator of economic activity is consistent with this \nforecast. Growth this year is therefore expected to remain below potential output growth of \n3,5 per cent, and this is expected to result in a slight widening of the Bank’s revised estimate \nof the output gap which, at 2,0 per cent, reflects the continued subdued state of the economy.\nThe mining sector recorded year-on-year growth of 7,3 per cent in January, with three-month-on-\nthree-month growth of 5,4 per cent following four consecutive months of contraction. Nevertheless, \nthe sector is expected to remain under pressure, given the unsettled labour relations environment. \nThe outlook for manufacturing appears to have improved, but this recovery is still very tentative. \nThe sector grew at a year-on-year rate of 3,9 per cent in January, and by 1,8 per cent on a three-\nmonth-on-three-month basis. This was consistent with improvements in the Kagiso Purchasing \nManagers Index, which increased from 49,1 in January to 53,6 in February. \nGrowth in gross fixed capital formation, which measured 5,7 per cent in 2012, has been on a \nmoderate upward trend since 2009, driven mainly by investment growth of around 9 per cent \nby public corporations and general government. Private-sector investment growth moderated \nfrom 4,6 per cent in 2011 to 3,9 per cent in 2012 due in part to excess capacity in manufacturing \nand electricity supply constraints.\nWhile household consumption expenditure has been the main driver of growth since 2010, \nits contribution to growth has been diminishing. The general absence of demand pressures \nin the economy is reflected in the continued moderation in the growth in real consumption \nexpenditure by households, which grew by 3,5 per cent in 2012 compared with 4,8 per cent \nin 2011. Nevertheless, growth in the consumption of durable goods remained robust at 11 per \ncent, compared with demand for services, which grew at only 1,8 per cent in 2012. Sales of \nnew motor vehicles declined on both a month-on-month and on a three-month-on-three-month \nbasis in February. \nRetail trade sales in January appear to reflect this weakening trend, with a three-month-on-\nthree-month decline of 0,7 per cent, and a lower-than-expected year-on-year increase of 1,9 per \ncent. There are indications that consumption growth may moderate further in 2013 amid slower \nreal income growth, higher inflation, elevated household debt levels, and a possible slow-down \nin credit extension to consumers. \nTwelve-month growth in banks’ total loans and advances to the private sector measured \n8,9 per cent in January, following growth of 10,0 per cent in December. Loans and advances \nto the corporate sector grew by 7,5 per cent in January, and to the household sector by \n9,9 per cent. Growth in general loans to households – mainly unsecured lending – moderated to \n30,1 per cent, following a recent peak growth of 39,3 per cent in June. General loans to \nhouseholds amounted to 8,3 per cent of total loans and advances, and 14,6 per cent of loans \nand advances to household. Growth in this category of lending is likely to be constrained by \nlower income growth and high household debt levels. Household debt to disposable income \nmeasured 75,8 per cent in the final quarter of 2012. Non-mortgage debt as a percentage of \ntotal household debt increased from 37 per cent in the third quarter of 2009 to 46 per cent in \nthe final quarter of 2012.\nThe trend in wage settlements remains an upside risk to the inflation outlook, although recent \ndata is somewhat contradictory. The minimum wage in the agricultural sector has been increased \nby 52,2 per cent, and indications from the Andrew Levy Employment Publications are that wage \nsettlements in collective bargaining agreements picked up significantly from 6,8 per cent in \nthe third quarter of 2012 to 8,2 per cent in the fourth quarter. According to Stats SA, average \nsalaries and wages per worker in the non-agricultural sector increased over four quarters by \n7,0 per cent in the final quarter of 2012, down from 8,9 per cent in the previous quarter, while \nunit labour cost increases declined from 7,4 per cent to 5,7 per cent in the same period. \nMonetary Policy Review June 2013\n64\nThe MPC remains concerned about the possible impact of excessively high wage increases \non employment growth. Employment in the formal non-agricultural sector increased by \n1,0 per cent during 2012, compared with annual employment growth of 1,6 per cent in 2011. \nThis included employment growth of 0,2 per cent in the mining and quarrying industry, and a \n0,3 per cent contraction in the manufacturing sector. In the fourth quarter of 2012 mining-sector \nemployment increased by 1 000 employees, following a decline of 16 000 in the third quarter. \nOf concern is the seasonally adjusted annualised decline of 0,7 per cent in total non-agricultural \nemployment during the fourth quarter of 2012. \nThe recent national government budget tabled before parliament reflects a difficult balance \nbetween a commitment to medium-term fiscal consolidation and the need for counter-cyclical \npolicy. The projected deficit of 5,7 per cent for the past fiscal year was wider than initially \nbudgeted for – a result of lower revenue due to weaker economic growth. The fiscal deficit as \na percentage of GDP is budgeted to be 5,1 per cent in the 2013/14 fiscal year, and to decline \nto 3,6 per cent by 2015/16. The government net debt-to-GDP ratio is expected to stabilise at \naround 40 per cent in 2015/16, well below the international benchmark for debt sustainability of \naround 60 per cent. \nThere are indications that the pressures on inflation emanating from food prices may be \nmoderating. Food price inflation at the consumer price level declined from a recent high of \n7,5 per cent in November 2012 to 6,4 per cent in January and 6,3 per cent in February. A \nsimilar trend is evident at the producer price level where manufactured food inflation declined to \n5,9 per cent in January, compared with a recent peak of 11,1 per cent in November 2012. \nSimilarly, producer price inflation in agricultural products moderated from a recent high of \n6,3 per cent in October 2012 to 3,5 per cent in January. Global agricultural commodity prices \nhave declined, on average, by almost 20 per cent since their recent peak in August 2012, and \nexpectations are for further moderation in the absence of adverse weather shocks.\nAdministered prices continue to put upside pressure on inflation, although lower electricity price \nincreases from the third quarter will dampen some of these pressures. The petrol price, which has \nincreased by a cumulative R1,24 per litre since January 2013, remains an upside risk. Although \nglobal oil prices have declined over the past few weeks, resulting in an over-recovery of the petrol \nprice so far this month, it is unlikely to be sufficient to offset the adverse exchange rate impacts \nand the fuel levy increases – and a further increase in the petrol price is likely in April. \nThe MPC continues to assess the balance of risks to the inflation outlook to be on the upside, \nmainly due to the exchange rate and wage pressures. These upside risks are mitigated in part \nby lower risk from food price inflation. Underlying inflation appears to be relatively contained, \nconsistent with the moderating trend in consumption expenditure by households. \nThe economic growth outlook is more or less unchanged from the previous meeting of the MPC, \nand risks to the outlook remain on the downside. The unresolved labour disputes in the mining \nsector pose a significant risk to the exchange rate and to economic growth through their negative \nimpact on export revenues, employment growth and investor perceptions of South Africa.\nHowever, the depreciated exchange rate provides an opportunity for the manufacturing \nsector in particular to become more competitive despite the challenging export environment. \nEnsuring that this increase in competitiveness is sustained will require improved productivity, \nand the containment of wage and other cost pressures, which underline the need to keep \ninflation under control. \nThe MPC continues to assess the monetary policy stance to be appropriately accommodative, \ngiven the persistence of the negative output gap. At the same time, further accommodation \nremains constrained by the upside risks to the inflation outlook. The MPC has therefore decided \nto keep the repurchase rate unchanged at 5,0 per cent per annum. The committee will continue \nto apply monetary policy consistent with its mandate of price stability within a flexible inflation-\ntargeting framework. \n65\nMonetary Policy Review June 2013\nStatement of the Monetary Policy Committee\n23 May 2013\nIssued by Gill Marcus, Governor of the South African Reserve Bank, at a meeting of the \nMonetary Policy Committee (MPC) in Pretoria\nThe South African economy is facing a number of domestic challenges, while headwinds \nfrom the fragile and uneven global recovery remain a constraint to growth. The uncertain, \nand increasingly difficult, labour relations environment continues to dominate the economic \nlandscape, contributing to declining domestic and foreign investor confidence. The growing \nvulnerability of the economy to changes in sentiment has been reflected in the depreciating \nand volatile exchange rate, which was already under pressure from the widening deficit on the \ncurrent account of the balance of payments. Although inflation is forecast to remain relatively \ncontained, these factors have raised the upside risks to the outlook at a time of worsening real \ngrowth prospects.\nThe year-on-year inflation rate as measured by the consumer price index (CPI) for all urban areas \nwas 5,9 per cent in April 2013, unchanged from the previous two months. However, the drivers of \nthe overall rate changed somewhat. Food price inflation measured 6,3 per cent in April, reversing \nthe downward trend that had prevailed since November 2012. The contribution of food to overall \ninflation remained unchanged at 0,9 percentage points, while housing and utilities contributed \n1,4 percentage points. Administered prices increased by 8,9 per cent, and by 7,8 per cent \nexcluding petrol. Core inflation, which excludes food, petrol and electricity, measured 5,2 per \ncent – marginally up from 5,1 per cent in March. The headline producer price inflation for final \nmanufactured goods measured 5,7 per cent in March – up from 5,4 per cent in February.\nThe inflation forecast of the Bank has remained relatively unchanged since the previous meeting \nof the MPC. Inflation is now expected to average 0,1 percentage points lower in 2013 and 2014 \nat 5,8 per cent and 5,2 per cent respectively, and to average 5,0 per cent in 2015. A temporary \nbreach of the upper end of the target range is still expected in the third quarter of 2013, but at \na lower average level of 6,1 per cent (6,3 per cent previously), followed by a gradual moderation \nof inflation to 4,9 per cent in the final quarter of 2015. The slight improvement is due to changed \nassumptions about international commodity prices, including oil, and lower global inflation.\nThe forecast for core inflation for 2013, at an average of 5,3 per cent, is significantly higher than \nthe forecast of 4,8 per cent previously. This follows the sharp increase in medical insurance \ncosts in the February CPI. Core inflation is also expected to be adversely affected over the \ncoming months by increases in a number of other administered prices, particularly water and \nmunicipal rates and taxes. This measure is expected to peak at 5,4 per cent in both the third \nand fourth quarter of 2013, and to average 5,0 per cent and 4,6 per cent in the coming two \nyears. Despite the higher near-term trend, this indicator is still assessed to reflect an absence of \nsignificant demand pressures. \nInflation expectations, as reflected in the Reuters survey of analysts conducted in April, has \nremained relatively stable for some months. The forecast is the same as the Bank’s for 2013, \nalthough higher for the next two years but still within the target range. The relatively anchored \ninflation expectations at the upper end of the target range are also evident in the survey \nconducted by the Bureau for Economic Research (BER) at Stellenbosch University in the first \nquarter of 2013. Overall, respondents expect inflation to average 6,0 per cent in both 2013 and \n2014, and 6,1 per cent in 2015. \nThe global economic environment remains challenging, with different regions growing at varying \nrates. Within the advanced economies, the United States (US) appears to be showing a number \nof positive signs of recovery: the University of Michigan’s consumer confidence index is at \nits highest in almost six years; labour market developments have been more favourable; and \nthere are strong wealth effects from the booming equity market as well as from the recovering \nhousing market. However, headwinds can be expected from the fiscal contraction resulting \nfrom the fiscal cliff compromise and the spending cuts that were part of the recent sequester. \nThe impact of this contraction is expected to be as high as 2 percentage points of GDP. \nMonetary Policy Review June 2013\n66\nThe eurozone remains in recession, having contracted at an annualised rate of 0,9 per cent in \nthe first quarter of 2013, compared with a contraction of 2,7 per cent in the previous quarter. The \nFrench economy has recorded two consecutive quarters of negative growth, while Germany \nmanaged to avoid recession by recording annualised growth of 0,3 per cent in the first quarter \nof this year. The eurozone is constrained by continued deleveraging by households, banks \nand governments, and the region is also characterised by increasing financial fragmentation. \nAlthough a slower pace of fiscal consolidation in the periphery has been agreed to in terms \nof the bail-out agreements, negative or, at best, very low growth is expected to persist in the \nregion for some time.\nThe Japanese economy rebounded from its 2012 recession in the first quarter of 2013, but \nit is still too soon to assess the impact of the fiscal, monetary and structural policy stimulus \npackages that were announced recently. The yen exchange rate, which has depreciated by \naround 30 per cent against the US dollar since October 2012, is likely to contribute positively \nto growth. \nEmerging markets remain the main global source of growth, but there are signs of moderation in \nsome of the systemically important countries, particularly China, India and Brazil. The rebalancing \nof the Chinese economy away from fixed capital formation and production towards internal \nconsumption has resulted in some slowdown, which has contributed to the declining trend of \nglobal commodity prices.\nThe persistence of slow global growth and weaker commodity prices have resulted in a \nmoderation in global inflation. This is particularly the case with respect to energy prices in the \nadvanced economies. This combination of lower inflation and slow growth prompted further \nmonetary easing by the European Central Bank, and with Japan yet to begin with its quantitative \nmonetary easing, these accommodative policy stances are likely to persist for some time. While \nthere are concerns about the possible risks posed to financial markets and global capital flows \nby an early reversal of the US monetary policy stance, any such action is likely to be extremely \ncautious, and is only expected to begin once a sustained recovery is well entrenched. There \nare, however, growing concerns that the buoyant conditions in the financial markets in many \ncountries are indicative of bubbles caused by excessive global liquidity, rather than reflecting \nunderlying positive growth prospects.\nMovements in the exchange rate of the rand continue to be impacted by external developments, \nbut since mid-2012 they have been compounded by domestic factors, which have undermined \ninvestor sentiment. The increasingly fraught labour relations environment, and high wage \ndemands in the mining sector in particular, are likely to continue to impact adversely on the \nvolume of mining exports against a backdrop of falling international commodity prices and \nconcerns about the widening of the current-account deficit of the balance of payments. These \ndevelopments also have the potential to affect, directly and indirectly, South Africa’s credit \nratings, and increase the cost of much-needed finance. The rand has also been influenced \nin recent weeks by the hedging related to renewable energy projects and by a strengthening \ndollar. Since the previous meeting of the MPC, the rand has depreciated by around 4,6 per cent \nagainst the US dollar and by 3,7 per cent on a trade-weighted basis.\nDespite the current negative sentiment towards the rand, non-residents have remained net \nbuyers of bonds and equities this year. Since January, non-residents have been net buyers of \nequities to the value of R12,7 billion, and bonds to the value of R22,5 billion. However, these \npositive inflows can reverse very quickly in response to changing risk perceptions. Furthermore, \nany hedging of these exposures, as is sometimes the case during periods of rand weakness, \nputs pressure on the rand even though the underlying assets are still held by non-residents. \nAs we have noted previously, the impact of the weaker rand on inflation is dependent on the \nextent, speed and duration of the depreciation, as well as the phase of the business cycle. While \nsome of the recent decline reflects changes in the underlying fundamentals, the rand remains \nhighly vulnerable to changes in sentiment. The rand has a tendency to overshoot in either \ndirection and, at times, for extended but uncertain periods, which makes the impact on inflation \ndifficult to forecast. The current level of the exchange rate, if sustained, poses a significant \nupside risk to the inflation outlook. \n67\nMonetary Policy Review June 2013\nDomestic growth prospects remain fragile amid low consumer confidence, continued output \ndisruptions in the mining sector, electricity supply constraints and a weak global environment. \nThe growth forecast of the Bank has been revised down from 2,7 per cent to 2,4 per cent for \n2013 and from 3,7 per cent to 3,5 per cent in 2014. Growth is expected to accelerate to 3,8 per \ncent in 2015. At these growth rates, the negative output gap will widen further before stabilising \nnext year, and begin to close during 2015. This outlook is consistent with the flat trajectory of \nthe Bank’s leading indicator of economic activity. Notwithstanding the increase in the Rand \nMerchant Bank/BER Business Confidence Index in the first quarter of 2013, given the difficult \nlabour relations environment in the country and the risks to global growth, the downside risk to \ngrowth remains as does the possibility of increased job losses.\nAlthough the physical volume of mining production recorded a quarter-to-quarter increase of \n6,1 per cent in the first quarter of 2013 following the disruptions in the previous quarter, output \ncontracted on a month-to-month basis in both February and March. The outlook for the sector \nremains bleak, with threats of shaft closures and retrenchments, falling commodity prices, high \nwage demands, and a risk of protracted periods of industrial action and further supply disruptions. \nManufacturing production declined in the first quarter of 2013 compared with the previous \nquarter, although the extent of the decline is complicated by the seasonal adjustment for the \nEaster weekend, which fell over March and April. The Kagiso Purchasing Managers Index, \nwhich increased marginally above the neutral 50 level in April, reflects the uncertain outlook for \nthe sector. The depreciated value of the rand should improve the competitiveness of the sector, \nprovided that gains are not eroded by rising wages and prices. The weaker rand is expected to \nresult in some narrowing of the trade deficit. However, the subdued global demand, together \nwith robust import volume growth, driven to a large extent by infrastructure projects, suggests \nthat the net export position will remain negative over the forecast period and continue to be a \nconstraint on growth. Nevertheless, the BER Manufacturing Confidence Index, while still low, \nimproved somewhat in the first quarter.\nThe outlook for household consumption expenditure – in recent years the main driver of growth \n– appears to have weakened with the FNB/BER Consumer Confidence Index declining to a \nnine-year low in the first quarter of 2013. Retail sales grew at a modest quarter-to-quarter rate \nof 0,6 per cent in the first quarter of this year, while sales contracted on a month-to-month \nbasis in March. This was consistent with the decline in the BER Retail Confidence Index in the \nfirst quarter. New vehicle sales growth, while increasing significantly on a year-on-year basis, \nmoderated to 0,1 per cent on a three-month-to-three-month basis in April 2013.\nConsumption expenditure by households is expected to be constrained in part by lower real \nincome growth, significant increases in the price of electricity and petrol, and high debt levels. The \nslowdown in expenditure growth has also been related to the moderation in some categories of \ncredit extension by banks. Year-on-year growth in total loans and advances to the private sector \nmoderated steadily from a recent peak of 10 per cent in December, to 8,1 percent in March \n2013. Excluding the weak growth in mortgage advances, year-on-year growth in loans and \nadvances declined from 18,5 per cent in December 2012 to 14,5 per cent in March. Although \ngrowth in unsecured lending to households remains at high levels, it has declined continuously \nsince September 2012, to measure 27,9 per cent in March. This moderating trend is expected to \ncontinue, due in part to the increasing number of impaired advances in this category of lending \nat some of the banks. However, the ratio of total impaired advances to total loans and advances \nin the banking sector continues to decline and stands at just below 4 per cent. \nA number of sectors in the economy are entering into wage-bargaining rounds. The MPC is \nincreasingly concerned about the prospect of settlements well above inflation and productivity \ngrowth, and the risk of protracted and disruptive strike action, with negative implications for \ngrowth and exports. Furthermore, excessively high settlements will come at the expense of \nretention of employees, employment creation and could result in higher inflation. The risk of a \nwage-price spiral remains high. This would negate the benefits of wage increases to workers, \nand undermine the competitive gains of the currency depreciation. According to Andrew Levy \nEmployment Publications, the overall wage settlement rate in collective bargaining agreements \nincreased from 7,6 per cent in 2012 to 7,9 per cent in the first quarter of 2013. Should this \nupward momentum continue, it is likely to impart an upside risk to inflation. At a time of high and \nMonetary Policy Review June 2013\n68\nrising unemployment, and slowing growth, the imperative of an economy-wide commitment \nto wage and salary restraint at all levels, including executive pay, cannot be over-emphasised. \nInternational oil prices are expected to remain constrained by the subdued global growth \nenvironment, but vulnerable to political developments in the Middle East in particular. Having \nreached a recent high of around US$118 per barrel in mid-February of this year, Brent crude \noil prices have remained in a range of between US$97 and US$105 per barrel since April. The \ndomestic price of petrol increased by 12 cents in April, but declined by 73 cents in May, mainly \nas a result of lower international oil prices. Although there is currently a small average over-\nrecovery on the petrol price, recent exchange rate movements have raised the probability of \nfurther petrol price increases in the near term.\nThe higher CPI food price increases in April may have reversed the favourable food price \ndevelopments observed in recent months. Since the end of November 2012 to date, domestic \nmaize prices have declined by about 17 per cent and wheat prices by around 9 per cent. This \nis reflected in the producer price index for agriculture which increased at a year-on-year rate of \n1,4 per cent in February and declined by 0,2 per cent in March. Manufactured food prices, by \ncontrast, increased by 6,1 per cent and 6,3 per cent in the same months respectively, in line \nwith CPI food price increases. The exchange rate poses an upside risk to food inflation as the \nprices of agricultural commodities such as wheat and maize are based on international prices. \nThe MPC is increasingly concerned about the deteriorating outlook for the South African \neconomy. There are a number of critical domestic issues that are contributing to the vulnerability \nof the economy that need to be addressed. urgently These include the financing of the deficit on \nthe current account of the balance of payments; the fractious labour relations environment and \nthe associated risks of protracted work stoppages and excessive wage increases; electricity \nsupply constraints; upside risks to inflation; downside risks to growth and employment creation \nin a context of high unemployment; and declining domestic and foreign investor confidence \nwhich could impact directly on capital flows. These interrelated developments are reflected in \nthe volatility and weakness in the exchange rate. There is an urgent imperative for all parties \n– government, business, labour and civil society – to interact and address these issues and \nvulnerabilities at a national level. While the Bank is prepared to play its part, many of these \nchallenges are beyond the role, scope and effectiveness of monetary policy. \nWhile a depreciated exchange rate is part of the balance-of-payments adjustment mechanism, \nthe competitive advantages thereof need to be realised through price and wage restraint. In the \nabsence of such restraint, the outcome is simply higher inflation, with the risk of an exchange \nrate–inflation spiral. Given the current unsettled environment in the economy, the MPC assesses \nthe risks to inflation to be on the up side, while many of the above factors contribute to a \ndownside risk to growth.\nThe MPC assesses the current stance of monetary policy to be accommodative. Given the risks \noutlined above, the scope for further monetary easing is limited at this stage. The MPC has \ntherefore decided to leave the repurchase rate unchanged at 5 per cent per annum. The MPC \nis ready to act appropriately in either direction in the event of material changes in the outlook.\n69\nMonetary Policy Review June 2013\nAbbreviations\nAlsi\t\n \t\nAll-Share Price Index\nAPI \t\n\t\nadministered price index\nBCI \t\n\t\nBusiness Confidence Index\nBER \t\n\t\nBureau for Economic Research [Stellenbosch University]\nBIS \t\n\t\nBank for International Settlements\nBoE \t\n\t\nBank of England\nBOJ \t\n\t\nBank of Japan\nBRICS\t\n\t\nBrazil, Russia, India, China and South Africa\nCBRT\t\n\t\nCentral Bank of the Republic of Turkey \nCCI \t\n\t\nConsumer Confidence Index\nCOICOP\t\n\t\nClassification of Individual Consumption by Purpose \nCOPOM \t \t\nBrazil’s Monetary Policy Committee\nCPI \t\n\t\nconsumer price index\nCPIX\t\n\t\nconsumer price index excluding mortgage interest cost for metropolitan \nand other urban areas\nCRB\t\n\t\nCommodity Research Bureau\nECB \t\n\t\nEuropean Central Bank\nEMBI+\t\n\t\n[JPMorgan] Emerging Markets Bond Index Plus \nFAO \t\n\t\nFood and Agriculture Organization\nFNB \t\n\t\nFirst National Bank\nGDP \t\n\t\ngross domestic product\nIEA\t\n\t\nInternational Energy Agency\nIES\t\n\t\nIncome and Expenditure Survey\nILO\t\n\t\nInternational Labour Organization \nIMF \t\n\t\nInternational Monetary Fund\nJGB\t\n\t\nJapanese Government Bond\nMPC \t\n\t\nMonetary Policy Committee\nMPF \t\n\t\nMonetary Policy Forum\nMPR \t\n\t\nMonetary Policy Review\nMTBPS \t\n\t\nMedium Term Budget Policy Statement\nMTEF \t\n\t\nMedium Term Expenditure Framework\nNAB\t\n\t\nnon-alcoholic beverages\nNEER \t\n\t\nnominal effective exchange rate\nNERSA\t\n\t\nNational Energy Regulator of South Africa\nOECD \t\n\t\nOrganisation for Economic Co-operation and Development\nOMT \t\n\t\nOutright Monetary Transactions \nOPEC \t\n\t\nOrganization of the Petroleum Exporting Countries\nPBC\t\n\t\nPeople’s Bank of China\nPMI \t\n\t\nPurchasing Managers’ Index\nPPI \t\n\t\nproducer price index\nPSBR\t\n\t\npublic-sector borrowing requirement\nQE \t\n\t\nquantitative easing\nQES \t\n\t\nQuarterly Employment Statistics\nQLFS \t\n\t\nQuarterly Labour Force Survey\nRBA\t\n\t\nReserve Bank of Australia\nRBI\t\n\t\nReserve Bank of India \nREER \t\n\t\nreal effective exchange rate\nRMB \t\n\t\nRand Merchant Bank\nS&P\t\n\t\nStandard and Poor’s\nSSA\t\n\t\nsub-Saharan Africa\nTRJ\t\n\t\nThompson Reuters Jefferies\nUK \t\n\t\nUnited Kingdom\nUS \t\n\t\nUnited States\nVIX®\t\n\t\nChicago Board Options Exchange Market Volatility Index\nWGBI \t\n\t\nWorld Government Bond Index [Citi]\nMonetary Policy Review June 2013\n70\nGlossary\nrepo\t\n\t\nrepurchase [rate]\nStats SA\t\n\t\nStatistics South Africa\nthe Bank \t \t\nSouth African Reserve Bank\nthe Fed \t\n\t\nUnited States Federal Reserve", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monetary_Policy_Reports/MPR-June-2013 (1).pdf"}
{"doc_id": "626ea07751f559734939355a1ff1f387", "text": "i \n \n \n \nApril 2025 \n \ni \nTABLE OF CONTENTS \n \nOVERVIEW .................................................................................................................................. 1 \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ........................................... 1 \nMONETARY DEVELOPMENTS .............................................................................................. 5 \nSTOCK MARKET DEVELOPMENTS ..................................................................................... 6 \nZimbabwe Stock Exchange (ZSE) ........................................................................................... 6 \nVictoria Falls Stock Exchange (VFEX) ................................................................................... 7 \nNATIONAL PAYMENTS SYSTEM .......................................................................................... 8 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ............................................... 8 \nMobile and Internet-Based Transactions ................................................................................ 8 \nCash Transactions ..................................................................................................................... 8 \nCard-Based Transactions ......................................................................................................... 8 \nINFLATION OUTTURN ............................................................................................................. 8 \nMonthly Inflation ...................................................................................................................... 8 \nUS$ Annual Inflation Developments ....................................................................................... 9 \nZiG Annual Inflation Developments ....................................................................................... 9 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1 \n \nOVERVIEW \nThe month-on-month inflation rates for both \nthe ZiG and USD accelerated in April 2025, \nlargely driven by housing, water, electricity, \ngas and selected food items. \nBroad money (M3) stock increased by 3.81% \nin April 2025 from March 2025. \nOn the capital markets, the Zimbabwe Stock \nExchange (ZSE) reflected bearish sentiments, \nwhile the Victoria Falls Stock Exchange \n(VFEX) traded positively in April 2025. \n \nThe aggregate value of transactions processed \nthrough the National Payment Systems (NPS) \nincreased by 5% in April from March 2025, \nwhile volumes decreased by 1% during the \nsame period. \nIn the international commodity markets, \naverage prices for platinum, palladium, copper, \nnickel, Brent crude oil, and lithium declined, \nwhile gold prices increased. Commodity prices \nwere largely weighed down by uncertainty \nfollowing the tariff wars initiated by the United \nStates (US). \nThe country’s merchandise exports increased \nby 13.6% in April 2025 from the previous \nmonth’s figure. Meanwhile, merchandise \nimports registered a 4.5% decline from the \nprevious month. As a result, the country’s trade \ndeficit narrowed to US$118.7 million, down \nfrom US$235.2 million recorded in the \nprevious month. \nINTERNATIONAL COMMODITY \nPRICE DEVELOPMENTS \nThe international average prices for platinum, \npalladium, copper, nickel, Brent crude oil and \nlithium declined, while gold prices increased \ncompared to the previous month. Commodity \nprices were largely weighed down by \nuncertainty following the tariff wars initiated \nby the US. The developments in international \nprices for selected commodities during the \nmonth of April 2025 are shown in Table 1. \n \nTable 1: International Commodity Prices \nfor May 2025 and April 2025 \nCommodity \n \nMar-25 \nApr-25 \nMonthly \nchanges \n(%) \nGold \nUS$/oz \n2,983.42 \n3,206.9 \n7.49 \nPlatinum \nUS$/oz \n980.45 \n958.3 \n(2.26) \nPalladium \nUS$/oz \n957.58 \n941.29 \n(1.7) \nCopper \nUS$/t \n9,764.52 \n9,198.35 \n(5.8) \nNickel \nUS$/t \n16,259.24 \n15,317.15 \n(5.79) \nBrent Crude \noil \nUS$/bbl. \n71.02 \n65.82 \n(7.32) \nLithium \nUS$/t \n9,534.47 \n9,407.89 \n(1.33) \nSource: Bloomberg, 2025 \n \nGold \nGold prices rose by 7.49% to US$3,206.90 per \nounce in April 2025, from US$2,983.42 per \nounce in March 2025. The increase was largely \ndriven by strong safe-haven demand, amid \nelevated policy uncertainty and rising trade \ntensions. Continued central bank purchases, \nreflecting ongoing reserves accumulation \nstrategies, further supported gold prices. \n \nPlatinum \nPlatinum prices declined by 2.26%, from an \naverage of US$980.45 per ounce recorded in \nMarch 2025, to an average of US$958.30 per \nounce in the reporting month. Prices were \nweighed down by a slowdown in automotive \nproduction, particularly in Europe and parts of \nAsia, coupled with ongoing uncertainty over \nU.S. tariff policy. \n \n \n \n \n2 \n \nPalladium \nIn April 2025, palladium prices declined \ndespite tightening supply and growing demand. \nPrices \nretreated \nby \n1.70%, \nclosing \nat \nUS$941.29 per ounce, down from US$957.58 \nper ounce recorded in the previous month. \nPalladium prices fell amid concerns about \nautomotive demand due to tariff exchanges and \nthe increasing market share of electric vehicles. \n \nFigure 1 shows the trends of precious metal \nprices for the period from April 2023 to April \n2025. \n \nFigure 1: Monthly Precious Metal Prices (in \nUS$ per Ounce): April 2023 – April 2025 \n \nSource: Bloomberg, 2025 \n \nBrent Crude Oil \nBrent crude oil prices declined further by \n7.32% to US$65.82 per barrel in April 2025 \nfrom US$71.02 per barrel in the previous \nmonth. The decline was driven by escalating \nU.S.-China trade tensions, which heightened \nfears of a global recession and weakened \ndemand. \nAdditionally, \nOPEC+ \nincreased \nproduction, adding further downward pressure \non \nprices. \nFigure \n2 \nshows \nthe \nprice \ndevelopments for Brent crude oil from April \n2023 to April 2025. \n \nFigure \n2: \nBrent \nCrude \nOil \nPrices \n(US$/Barrel) April 2023 – April 2025 \n \nSource: Bloomberg, 2025 \n \nCopper \nCopper prices retreated by 5.80%, from \nUS$9,764.52 per tonne in March 2025 to \nUS$9,198.35 per tonne in April 2025, driven by \nescalating U.S. tariffs and intensifying global \ntrade tensions. These factors raised concerns \nabout a potential economic slowdown and \nweaker \ndemand \nfor \nindustrial \nmetal \ncommodities. \n \nNickel \nNickel \nprices \ndecreased \nby \n5.79% \nto \nUS$15,317.15 \nper \ntonne, \ndown \nfrom \nUS$16,259.24 per tonne in the previous month. \nThe decline was attributed to an oversupply of \nrefined nickel, driven by high output from \nIndonesia. Figure 3 shows base metals price \ndevelopments from April 2023 to April 2025. \n \n \n \n \n \n0\n200\n400\n600\n800\n1000\n1200\n800\n1,000\n1,200\n1,400\n1,600\n1,800\n2,000\n2,200\n2,400\n2,600\n2,800\n3,000\nApr-23\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nUS$/ounce\nUS$/ounce\nGold\nPalladium (RHS)\n60\n70\n80\n90\n100\n110\n120\nApr-23\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nUS$/BARREL\n \n \n \n3 \n \nFigure 3: Base Metal Prices (US$/tonne): \nApril 2023 – April 2025 \n \nSource: Bloomberg 2025 \n \nLithium \nLithium prices slumped by 1.33%, closing the \nmonth of April 2025 at US$9,407.89 per tonne, \nfrom US$9,534.47 recorded in March 2025. \nThe drop was mainly due to oversupply in the \nmarket, driven by increased production in \nChina, benefiting from Chinese government \nsupport in the form of subsidies to battery \nmanufacturers. Figure 4 illustrates lithium \nprice trends for the period April 2023 to April \n2025. \n \nFigure 4: Lithium Prices (US$/tonne) April \n2023 – April 2025 \n \nSource: London Metal Exchange, 2025 \n \nMerchandise Trade Developments \nTotal merchandise trade rose by 3% to US$1.44 \nbillion in April 2025, from US$1.40 billion in \nthe \nprevious \nmonth. \nThe \ngrowth \nin \nmerchandise trade was attributed to increases in \nexports during the month under review. \nCompared to the same month in 2024, \nmerchandise trade rose by 17.1%. \n \nMerchandise Exports \nThe country’s merchandise exports increased \nby 13.6% to US$662.6 million, from the \nprevious month’s outturn of US$583.1 million. \nThe increase was largely underpinned by \ngrowth in export earnings from gold, platinum \ngroup of metals (PGMs) and diamond. On a \nyear-on-year basis, exports were 29.0% higher \ncompared to US$513.5 million recorded in \nApril 2024. Figure 5 shows developments in \nthe country’s merchandise exports for the \nperiod January 2024 to April 2025. \n \nFigure 5: Monthly Merchandise Exports \n(US$ millions): 2024 and 2025 \n \nSource: ZIMSTAT, 2025 \n \n \nExports by Commodity \nThe country's export basket was predominantly \ncomposed of primary commodities, with gold \n8,000\n13,000\n18,000\n23,000\n28,000\n33,000\n38,000\n4,500\n5,500\n6,500\n7,500\n8,500\n9,500\n10,500\n11,500\nApr-23\nAug-23\nDec-23\nApr-24\nAug-24\nDec-24\nApr-25\nUS$/tonne\nUS$/tonne\nCopper\nNickel (RHS)\n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\nApr-23\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nUS$/tonne\n540.9\n645.0\n534.7\n513.5\n583.0\n524.0\n548.3\n674.0\n575.0\n698.1\n905.2\n692.4\n652.0\n512.6\n581.9\n662.6\n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1000\nJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec\n2024\n2025\n \n \n \n4 \n \nleading at 45.9%, followed by PGMs (14.8%), \ntobacco (12.3%), and industrial diamonds at \n5.1%. Table 2 shows developments in the \ncountry’s exports for the months of March and \nApril 2025, respectively. \n \nTable 2: Major Exports (US$ millions) \n \nMar-25 \n(US$m) \nApr-25 \n(US$m) \nMar-\nApr \n2025 \nChanges \n(%) \nShare of \nExports \n(%) \nTotal \n583.1 \n662.6 \n13.6 \n100.0 \nOf Which: \n \n \n \n \nGold \n246.9 \n304.0 \n23.1 \n45.9 \nPGMs \n96.1 \n98.7 \n2.7 \n14.8 \nTobacco \n(Including \ncigarettes) \n99.7 \n81.3 \n-18.5 \n12.3 \nIndustrial \ndiamonds \n3.7 \n33.5 \n814.1 \n5.1 \nOther mineral \nsubstances \n38.7 \n29.0 \n-25.0 \n4.4 \nFerro \nchromium \n27.8 \n20.8 \n-25.3 \n3.1 \nCoal \n15.4 \n16.2 \n5.2 \n2.5 \nOther ores and \nconcentrates \n6.8 \n14.6 \n114.8 \n2.2 \nChromium ores \nand \nconcentrates \n9.1 \n12.4 \n36.0 \n1.9 \nCrocodiles \n1.8 \n11.7 \n535.6 \n1.7 \nOthers \n37.1 \n40.5 \n9.0 \n6.1 \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \n \nExport Markets \nIn April 2025, the country’s exports were \nprimarily directed to the United Arab Emirates \n(49.8%), South Africa (24.0%), and China \n(15.9%). The remaining exports were spread \nacross various other international jurisdictions \nand markets. Figure 6 shows the country’s \nmajor export markets during the month under \nreview. \n \n \n \nFigure 6: Top Ten Merchandise Export \nDestinations (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \nMerchandise Imports \nMerchandise imports fell by 4.5% to US$781.3 \nmillion in April 2025, from US$818.3 million \nrecorded in the previous month. On a year-on-\nyear basis, imports increased by 8.6%. Figure 7 \nillustrates the developments in merchandise \nimports for the period from January 2024 to \nApril 2025. \n \nFigure 7: Monthly Merchandise Imports \n(US$ millions): 2024 and 2025 \n Source: ZIMSTAT & RBZ Computations, 2025 \n \nImports by Commodity \nIn April 2025, the import basket was largely \ncomprised of industrial supplies (31.1%), fuels \nand lubricants (22.3%), and capital goods \n(18.6%). \n49.8\n24.0\n15.9\n2.6\n1.7\n1.2\n0.8\n0.5\n0.4\nUnited Arab Emirates\nSouth Africa\nChina\nMozambique\nZambia\nNetherlands\nHong Kong\nGermany\nKenya\n694.2\n729.7\n720.5\n719.6\n746.1\n755.0\n828.3\n876.2\n784.2\n835.9\n952.1\n889.3\n750.8\n738.4\n818.3\n781.3\n0\n200\n400\n600\n800\n1000\nJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec\n2024\n2025\n \n \n \n5 \n \nTable 3: Major Imports (US$ millions) \n \nMar-25 \n(US$m) \nApr-25 \n \n(US$m) \nMar-\nApr 25 \nChanges \n(%) \nShare of \nTotal \nImports (%) \nApr-25 \nTotal \n818.3 \n781.3 \n10.9 \n100.0 \nOf Which: \n \n \n \n \nIndustrial \nSupplies \n311.1 \n242.9 \n-21.9 \n31.1 \nFuels and \nLubricants \n154.7 \n174.2 \n12.6 \n22.3 \nCapital \ngoods \n128.1 \n145.6 \n13.7 \n18.6 \nFood and \nBeverages \n98.3 \n87.6 \n-10.9 \n11.2 \nTransport \nEquipment \nand parts \n73.7 \n71.4 \n-3.2 \n9.1 \nConsumer \nGoods \n44.5 \n52.2 \n17.1 \n6.7 \nOthers \n7.8 \n7.5 \n-3.9 \n1.0 \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \nThe country’s imports were mainly sourced \nfrom South Africa (37.1%), China (14.5%), \nBahrain (10.4%), the Bahamas (7.4%), and \nMozambique (3.8%). The remainder of the \nimports came from various other markets, as \nshown in Figure 8. \nFigure 8: Top Ten Merchandise Import \nSources (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \n1 Monetary data was revised from September 2024 \nfollowing the adoption of new standardized reporting \nformats (SRFs) submitted by banks. The notable revision \nis on broad money stock (M3), which was revised \nMerchandise Trade Balance \nDuring April 2025, the country’s trade deficit \nnarrowed to US$118.7 million, from US$235.2 \nmillion recorded in the previous month. \nRelative to April 2024, the trade deficit \nnarrowed from US$206.1 million to US$118.7 \nmillion in the reporting month. Figure 9 shows \nthe country’s trade balance for the period from \nJanuary 2025 to April 2025. \n \nFigure 9: Merchandise Trade Balance (US$ \nmillions) \n \n Source: ZIMSTAT & RBZ Computations, 2025 \nMONETARY DEVELOPMENTS1 \nBroad \nmoney \n(M3) \nstock \nstood \nat \nZiG87,003.17 million in April 2025, an \nincrease of 3.81% from ZiG83,811.71 million \nrecorded in March 2025. \n \nThe month-on-month increase in M3 was \ndriven by growth of ZiG2,529.80 million \n(3.67%) in the foreign component and \ndownwards due to removal of Government foreign \ncurrency deposits held by banks from deposits included \nin broad money. Other monetary aggregates also \nchanged following the re-classification exercise. \n37.1\n14.5\n10.4\n7.4\n3.8\n3.4\n3.0\n2.7\n1.8\n1.5\nSouth Africa\nChina\nBahrain\nBahamas\nMozambique\nIndia\nZambia\nMauritius\nHong Kong\nUnited Arab Emirates\n652.0\n512.6\n583.1\n662.6\n749.1\n730.4\n818.3\n781.3\n-97.1\n-217.9\n-235.2\n-118.7\n-400.0\n-200.0\n0.0\n200.0\n400.0\n600.0\n800.0\n1000.0\nJan-25\nFeb-25\nMar-25\nApr-25\nExports\nImports\nTrade Balance\n \n \n \n6 \n \nZiG661.66 million (4.45%) in the local \ncurrency component, bringing the respective \ntotals \nto \nZiG71,478.06 \nmillion \nand \nZiG15,525.11 million. \n \nThe broad money stock consisted of 82.16% \nforeign currency deposits, 17.72% local \ncurrency deposits, and 0.12% local currency in \ncirculation. Figure 10 shows the composition \nof the money supply. \n \nFigure 10: Composition of Money Supply \nSource: Reserve Bank of Zimbabwe, 2025 \n \nDuring the month under analysis, credit to the \nprivate sector increased by 5.71%, from \nZiG55,269.44 million to ZiG58,425.38 million. \nNet claims on the central Government, \nhowever, declined by 7.22%. \n \nOutstanding credit to the private sector was \nmainly channelled to households, agriculture, \nmanufacturing, distribution and mining, which \nreceived 27.99%, 17.09%, 13.56%,10.72% and \n9.81% of the total credit, respectively. \n \nFigure 11 below shows the distribution of \ncredit by sector. \n \nFigure 11: Distribution of Private Sector \nCredit \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nCredit to the private sector was largely utilized \nfor recurrent expenditures, 42.29%; inventory \nbuild-up, \n22.29%; \nand \nfixed \ncapital \ninvestments, 12.71%. \n \nSTOCK MARKET DEVELOPMENTS \nZimbabwe Stock Exchange (ZSE) \nDuring April 2025, the Zimbabwe Stock \nExchange (ZSE) reflected bearish market \nsentiments. Consequently, the All Share, Top \n10, Top 15, and Medium Cap indices declined \nby 6.48%, 6.88%, 6.96%, and 5.27%, closing at \n191.95, 185.79, 190.43, and 237.50 points, \nrespectively. \n \nSimilarly, the Resource Index registered a \nsignificant decline of 20.22%, closing at 143.95 \npoints. \n \n \n \n \n \nNCDs, \n1.28%\nLocal Currency \nTime Deposits, \n1.41%\nFX Time \nDeposits, 8.83%\nLocal Currency \nTransferable , \n15.03%\nFX Transferable \nDeposits, 73.32%\nCurrency in \nCirculation, \n0.12%\nHouseholds\n27.99%\nAgriculture\n17.09%\nMining\n9.82%\nManufacturing\n13.56%\nDistribution\n10.72%\nTransport and \nCommunication\n2.36%\nServices\n10.56%\nFinancial \nOrganisations and \nInvestments\n5.35%\nConstruction\n2.54%\nOther\n0.00%\n \n \n \n7 \n \nFigure 12: ZSE All Share, Top 10 and \nMining Indices \n \nSource: Zimbabwe Stock Exchange, 2025 \n \nDuring the month under review, the cumulative \nvolume and value of shares traded increased by \n62.03% and 16.68% to close at 150.50 million \nshares and ZiG268.27 million, respectively. \n \nThe proportion of foreign purchases to the \nvalue of shares traded, however, declined to \n0.80%, from 4.33% recorded in the previous \nmonth. \nNet foreign position also worsened from \nnegative ZiG2.42 million to negative ZiG13.79 \nmillion during the month under analysis. \n \nFigure 13: ZSE Monthly Volume and Value \nTraded \n \nSource: Zimbabwe Stock Exchange, 2025 \nOwing to the bearish sentiments exhibited on \nthe ZSE during the period under review, the \nmarket lost 1.38%, or ZiG4 505.09 million \nworth of capitalization to close at ZiG58 411.66 \nmillion. This is comparable to ZiG62 916.75 \nmillion recorded in the previous month. \n \nVictoria Falls Stock Exchange (VFEX) \nThe Victoria Falls Stock Exchange (VFEX) \ntraded positively in April 2025. As a result, the \nVFEX All Share index gained 3.94% to close \nat 114.67 points, compared to 110.32 points \nrecorded in March 2025. \n \nOn an annual basis, the VFEX All Share index \ngained 13.96%, from 100.62 points recorded in \nApril 2025. \n \nFigure 14: Victoria Falls Stock Exchange \n(VFEX) All Share Index (ASI) \n \nSource: Victoria Falls Stock Exchange, 2025 \n \nVFEX Market Capitalization \nReflecting the bullish sentiments on the \nVictoria Falls Stock Exchange (VFEX), market \ncapitalization increased by 3.95%, rising to \nUS$1,337.88 \nmillion, \n(US$1.34 \nbillion) \ncompared to US$1,287.08 million (1.29 \nbillion) recorded in the previous month. \n100\n150\n200\n250\n300\n350\n160\n210\n260\n310\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nALL SHARE AND TOP 10 INDICES\nZSE ALL SHARE INDEX\nTop 10 Index\nMining Index (Points)\n0\n100\n200\n300\n400\n500\n600\n0\n100\n200\n300\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nVALUE TRADED ZIG \nMILLIONS\nVOLUME TRADED (MILIONS)\nVolume\nValue\n90\n95\n100\n105\n110\n115\nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\n \n \n \n8 \n \nNATIONAL PAYMENTS SYSTEM \nThe total digital payment systems transaction \nvalues increased by 5% to ZiG200.73 billion in \nApril 2025, from ZiG191.25 billion in March \n2025. Volumes decreased by 1% from 63.88 \nmillion to 63.53 million recorded during the \nsame period, as shown in Figure 15 below. \n \nFigure 15: Payment Systems Monthly \nTransactional Values and Volumes from \nMay 2024 - April 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe value of transactions processed through the \nRTGS system in April 2025 increased by 4% to \nZiG116.95 billion from ZiG112.65 billion \nreported in March 2025, whilst volumes \ndecreased by 5% from 0.92 million to 0.87 \nmillion during the same period. \n \n \n \n \n \n \n \n \nFigure 16: RTGS System Trend for Values \nand Volumes from May 2024 - April 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nMobile and Internet-Based Transactions \nMobile \nand \ninternet-based \ntransactions \nincreased by 7.77%, from ZiG64.48 billion in \nMarch 2025 to ZiG69.49 billion in April 2025. \n \nCash Transactions \nCash-based transactions decreased by 0.9% to \nZiG14.25 billion in April 2025, from ZiG14.38 \nbillion in March 2025. \n \nCard-Based Transactions \nCard-based transactions marginally increased \nby 1.49%, from ZiG14.13 billion in March \n2025 to ZiG14.34 billion recorded in April \n2025. \n \nINFLATION OUTTURN \nMonthly Inflation \nThe ZiG monthly inflation rate accelerated \nfrom -0.1% recorded in March 2025 to 0.6% in \nApril 2025. Figure 17 shows developments in \nmonthly ZiG inflation from June 2024 to April \n2025. \n0\n10\n20\n30\n40\n50\n60\n70\n0\n50\n100\n150\n200\n250\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nVolumes (Millions)\nValues (Billions)\nValues\nVolumes\n 0.7\n 0.8\n 0.8\n 0.9\n 0.9\n 1.0\n 1.0\n 1.1\n 1.1\n0\n20\n40\n60\n80\n100\n120\n140\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nVolumes in Millions\nValues in $ Billions\nValues\nVolume\n \n \n \n9 \n \nFigure 17: ZiG Month-on-Month Inflation \n(%) \n \nSource: ZIMSTAT, 2025 \n \nNon-food inflation rose from 0.2% in March \n2025 to 1.1% in April 2025 and contributed 0.7 \npercentage points to the monthly inflation rate. \nNon-food inflation was largely driven by \nhousing, water, electricity, gas and other fuels, \nparticularly rentals in low, medium and high-\ndensity areas, which slightly rose in April 2025. \nFood inflation also slightly increased by 0.2 \npercentage points, from -0.5% in March 2025 \nto -0.2% in April 2025. The food component \ncontributed -0.1 percentage points to the April \n2025 inflation rate. \n \nThe USD month-on-month inflation rate also \nmarginally increased from 0.1% in March 2025 \nto 0.2% in April 2025, on account of housing, \nwater, electricity, gas and other fuels. Food \ninflation, however, slowed down to 0.0% in \nApril 2025 from 0.2% in March 2025, while \nnon-food inflation accelerated to 0.3% in April \n2025 from 0.1% in March 2025. \n \nThe weighted monthly inflation rate increased \nfrom 0.0% in March 2025 to 0.3% in April \n2025, in line with the gain in both the ZiG and \nUSD inflation rates. \n \nUS$ Annual Inflation Developments \nThe year-on-year USD inflation rate, however, \neased from 15.0% in March 2025 to 14.4% in \nApril 2025. \n \nFigure \n18: \nUS$ \nAnnual \nInflation \nDevelopments (%) \n \nSource: ZIMSTAT, 2025 \n \nZiG Annual Inflation Developments \nThe initial year-on-year ZiG inflation came out \nat 87.1%, which is closer to the projected level \nof 86%. This reflects mainly the base effect, \nwhich is expected to dissipate beginning \nOctober 2025. \n \nJUNE 2025 \nRESERVE BANK OF ZIMBABWE \n-5\n0\n5\n10\n15\n20\n25\n30\n35\n40\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\n-6\n-4\n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\nJan-24\nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\n \n \n10 \nStatistical Tables \nMonetary Statistics \n 1. Depository Corporations Survey \n \n \n \n11 \n 2. Central Bank Survey \n \n \n \n \n \n \n12 \n \n3. Other Depository Corporations Survey \n \n \n \n \n13 \n Other Depository Corporations \n \n4.1 Assets \n \n \n \n \n \n \n \n14 \n 4.2 Liabilities \n \n \n \n \n \n \n \n15 \n Commercial Banks \n 5.1 Assets \n \n \n \n \n16 \n 5.2 Liabilities \n \n \n \n17 \n Building Societies \n 6.1 Assets \n \n \n \n \n \n \n18 \n 6.2 Liabilities \n \n \n \n \n \n19 \n Sectoral Analysis of Bank Loans and Advances and Deposits \n \n7.1 Sectoral Analysis of Commercial Banks' Loans and Advances \n20 \n \n7.2 Sectoral Analysis of Commercial Banks Deposits \n \n \n21 \n Interest Rates \n \n8.1 Lending Rates \n \n \n \n \n \n \n \n22 \n \n8.2 Banks Deposit Rates \n \n \n \n \n \n \n23 \nInflation \n \n9.1 Monthly Inflation \n \n \n \n \n \n \n24 \n \n9.2 Yearly Inflation \n \n \n \n \n \n \n \n25 \nExternal Statistics \n 10. Exchange Rates \n \n \n \n \n \n \n \n26 \nZimbabwe Stock Exchange \n 11. Zimbabwe Stock Market Statistics \n \n \n \n \n27 \nNational Payments System Statistics \n \n \n \n \n12.1 Values of Transactions \n \n \n \n \n \n28 \n \n12.2 Volumes of Transactions \n \n \n \n \n \n29 \nTrade Statistics \n \n \n \n \n \n \n \n 13. Merchandise Trade Statistics \n \n 30 \n \n \n \n \n11 \n \nTABLE 1: DEPOSITORY CORPORATIONS SURVEY (ZWG '000)\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nNet Foreign Assets\n-28,856,803.24\n-27,776,929.20\n-27,814,239.65 -27,003,213.00\n-27,816,061.99\n-51,275,161.53\n-54,146,368.88 -48,383,455.25 -47,290,393.03 -50,807,430.00\n-51,172,565.90\n-46,837,658.56\n-45,196,989.71\nCentral Bank(net)\n-35,698,765.79\n-34,640,985.68\n-34,675,535.57\n-34,509,441.34\n-34,520,053.81\n-62,586,924.75\n-66,010,331.85\n-57,686,803.02\n-56,911,905.66\n-58,197,285.15\n-60,030,706.89\n-55,922,579.95\n-54,500,643.35\nForeign Assets\n9,276,276.05\n9,502,376.00\n10,341,190.76\n10,301,545.49\n10,342,781.57\n17,610,056.98\n24,894,776.54\n22,229,005.79\n23,239,748.84\n23,967,010.24\n23,087,880.76\n28,287,077.32\n26,132,242.58\nForeign Liabilities\n44,975,041.84\n44,143,361.68\n45,016,726.33\n44,810,986.83\n44,862,835.37\n80,196,981.74\n90,905,108.39\n79,915,808.81\n80,151,654.50\n82,164,295.39\n83,118,587.65\n84,209,657.27\n80,632,885.93\nOther Depository Corporations(net)\n6,841,962.55\n6,864,056.48\n6,861,295.92\n7,506,228.34\n6,703,991.82\n11,311,763.23\n11,863,962.98\n9,303,347.77\n9,621,512.62\n7,389,855.15\n8,858,140.98\n9,084,921.39\n9,303,653.64\nForeign Assets\n10,973,836.76\n11,293,656.76\n11,679,328.24\n12,352,811.95\n11,598,442.41\n20,019,415.47\n21,861,671.92\n17,752,438.09\n19,141,214.17\n20,280,522.97\n21,464,245.49\n22,405,988.41\n22,719,000.08\nForeign Liabilities\n4,131,874.21\n4,429,600.28\n4,818,032.32\n4,846,583.61\n4,894,450.59\n8,707,652.25\n9,997,708.95\n8,449,090.32\n9,519,701.55\n12,890,667.83\n12,606,104.51\n13,321,067.02\n13,415,346.44\nNet Domestic Assets (NDA)\n67,611,589.07\n68,804,544.06\n70,540,712.34\n72,978,846.45\n74,289,272.26 126,283,122.13\n141,729,288.02 131,610,282.91 134,739,349.70 129,264,588.97\n129,550,418.66\n130,649,371.99\n132,200,160.49\nDomestic Claims\n53,499,996.04\n54,803,530.82\n56,344,942.28\n60,565,630.05\n61,126,246.18 104,881,665.21\n120,558,282.99 105,678,255.12 108,915,803.35 105,286,015.26\n108,409,025.61\n111,778,890.15\n112,052,777.07\nClaims on Central Government(net)\n28,205,410.93\n28,407,200.20\n28,221,481.56\n30,417,958.83\n30,051,033.28\n52,245,378.98\n59,872,765.24\n49,971,173.22\n51,692,039.40\n47,595,375.58\n49,726,708.09\n51,733,212.49\n47,997,895.52\nClaims on Central Government\n31,723,973.67\n32,009,475.99\n33,320,571.48\n35,189,934.44\n35,139,275.67\n60,331,256.46\n68,339,604.50\n59,979,049.76\n62,000,027.83\n65,079,234.40\n61,840,403.70\n64,347,800.81\n65,169,776.89\nCentral Bank\n25,896,938.71\n26,112,137.48\n26,985,969.93\n27,458,247.33\n28,058,136.59\n49,156,933.23\n56,008,803.04\n49,413,731.18\n50,322,196.84\n51,342,654.13\n48,573,045.84\n50,689,516.96\n51,472,216.36\nODCs\n5,827,034.95\n5,897,338.50\n6,334,601.55\n7,731,687.11\n7,081,139.08\n11,174,323.23\n12,330,801.46\n10,565,318.57\n11,677,830.99\n13,736,580.28\n13,267,357.86\n13,658,283.85\n13,697,560.53\nLess Liabilities to Central Government\n3,518,562.74\n3,602,275.78\n5,099,089.92\n4,771,975.61\n5,088,242.39\n8,085,877.49\n8,466,839.25\n10,007,876.54\n10,307,988.43\n17,483,858.82\n12,113,695.61\n12,614,588.32\n17,171,881.37\nCentral Bank\n3,275,708.09\n3,252,306.99\n4,509,829.40\n4,333,364.64\n4,555,305.67\n7,502,600.61\n7,839,372.76\n9,330,641.14\n9,591,566.38\n9,335,097.88\n4,557,218.50\n4,850,146.25\n6,177,702.34\nOf which foreign Currency\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n8,231,669.88\n3,875,544.34\n4,410,312.03\n5,787,185.63\nODCs\n242,854.65\n349,968.79\n589,260.52\n438,610.98\n532,936.72\n583,276.88\n627,466.49\n677,235.40\n716,422.05\n8,148,760.93\n7,556,477.10\n7,764,442.07\n10,994,179.03\nOf which foreign currency\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n7,621,815.11\n6,689,625.99\n6,183,927.26\n9,392,249.02\nClaims on Other Sectors\n25,294,585.11\n26,396,330.62\n28,123,460.72\n30,147,671.23\n31,075,212.90\n52,636,286.23\n60,685,517.75\n55,707,081.90\n57,223,763.95\n57,690,639.67\n58,682,317.52\n60,045,677.66\n64,054,881.55\nOther Financial Corporations\n357,595.24\n435,157.09\n514,865.96\n481,655.73\n511,874.54\n867,287.19\n933,149.68\n842,461.28\n842,560.65\n3,517,155.78\n3,631,080.80\n3,864,502.48\n4,731,253.10\nState and Local Government\n1,803.44\n1,371.69\n1,489.84\n162.58\n189.44\n334.82\n83.40\n98.73\n574.72\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n953,146.00\n936,149.08\n896,790.27\n876,573.55\n797,477.87\n1,314,159.98\n1,501,886.18\n1,234,048.77\n901,658.84\n569,849.74\n971,292.01\n911,736.73\n898,249.04\nPrivate Sector\n23,982,040.42\n25,023,652.76\n26,710,314.65\n28,789,279.36\n29,765,671.04\n50,454,504.24\n58,250,398.50\n53,630,473.13\n55,478,969.74\n53,603,634.16\n54,079,944.72\n55,269,438.44\n58,425,379.41\nCentral Bank\n148,908.53\n153,636.33\n237,798.15\n234,893.40\n231,229.46\n354,102.93\n437,245.57\n402,425.98\n403,340.54\n519,441.90\n538,877.81\n545,436.23\n577,074.39\nODCs\n23,833,131.89\n24,870,016.43\n26,472,516.50\n28,554,385.96\n29,534,441.57\n50,100,401.31\n57,813,152.92\n53,228,047.15\n55,075,629.21\n53,084,192.25\n53,541,066.90\n54,724,002.21\n57,848,305.02\nOf which Foreigm currency\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n46,086,808.21\n46,197,558.48\n47,961,063.26\n50,400,882.52\nOther Items(Net)\n-14,111,593.03\n-14,001,013.24\n-14,195,770.07\n-12,413,216.39\n-13,163,026.08\n-21,401,456.92\n-21,171,005.02 -25,932,027.78 -25,823,546.35 -23,978,573.71\n-21,141,393.04\n-18,870,481.85\n-20,147,383.42\nShares and Other Equity\n-12,601,007.23\n-10,297,974.44\n-7,881,583.18\n-6,103,689.62\n-3,963,842.23\n-5,871,022.33\n-6,523,128.90\n-9,456,191.46\n-6,806,943.03\n-2,759,355.75\n659,233.46\n2,615,680.90\n7,692,891.79\nLiabilities to Other Financial Corporations\n222,678.57\n4,558.25\n13,223.72\n12,000.37\n12,502.97\n51,080.87\n16,114.32\n42,655.67\n112,460.71\n75,390.33\n267,299.34\n87,132.51\n63,495.53\nRestricted Deposits\n1,197,298.85\n1,636,337.07\n1,719,547.05\n1,550,879.71\n2,087,873.41\n3,658,367.58\n3,837,899.15\n3,788,058.77\n4,320,759.37\n4,381,221.41\n6,468,476.55\n6,947,336.89\n7,610,344.85\nDeposits and Securities Excluded from Base Money\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-2,930,563.22\n-5,343,934.13\n-8,046,957.66\n-7,872,406.86\n-11,299,560.23\n-19,239,883.04\n-18,501,889.60\n-20,306,550.75\n-23,449,823.40\n-25,675,829.70\n-28,536,402.39\n-28,520,632.13\n-35,514,115.58\nBroad Money-M3\n38,754,785.83\n41,027,614.86\n42,726,472.69\n45,975,633.45\n46,473,210.27\n75,007,960.60\n87,582,919.14\n83,226,827.66\n87,448,956.66\n78,457,158.97\n78,377,852.75\n83,811,713.44\n87,003,170.78\nSecurities Other than Shares Included in Broad \nMoney\n2,795.45\n4,372.61\n3,991.57\n19,182.77\n26,605.39\n23,833.50\n42,725.53\n0.00\n0.00\n1,110,841.91\n1,043,012.21\n1,258,288.66\n1,113,653.48\nBroad Money-M2\n38,751,990.38\n41,023,242.25\n42,722,481.12\n45,956,450.68\n46,446,604.88\n74,984,127.10\n87,540,193.61\n83,226,827.66\n87,448,956.66\n77,346,317.06\n77,334,840.54\n82,553,424.78\n85,889,517.30\nOther Deposits (Time Deposits)\n2,705,479.15\n3,276,458.32\n3,820,450.80\n3,890,292.40\n3,878,305.91\n5,866,414.39\n7,892,499.20\n7,727,403.75\n8,189,143.57\n6,724,490.33\n7,797,233.99\n7,273,435.41\n8,906,017.36\nof which Foreign Currency Accounts\n2,426,638.27\n2,953,225.13\n3,343,135.17\n3,425,730.40\n3,030,905.19\n4,839,186.89\n6,654,693.18\n5,209,298.79\n5,598,125.36\n5,707,454.07\n6,566,882.32\n6,058,373.46\n7,683,253.11\nNarrow Money-M1\n36,046,511.23\n37,746,783.93\n38,902,030.31\n42,066,158.28\n42,568,298.97\n69,117,712.70\n79,647,694.41\n75,499,423.91\n79,259,813.10\n70,621,826.72\n69,537,606.55\n75,279,989.37\n76,983,499.94\nTransferable Deposits\n36,036,209.11\n37,708,555.23\n38,850,801.81\n42,007,923.88\n42,499,225.86\n69,037,218.46\n79,550,713.83\n75,399,727.29\n79,160,579.60\n70,501,361.89\n69,416,636.09\n75,177,133.83\n76,875,024.10\n Of which Foreign Currency Accounts\n29,423,827.38\n30,036,317.64\n30,193,905.30\n31,635,023.78\n31,676,246.48\n58,411,486.96\n69,086,187.32\n64,595,580.16\n67,208,792.78\n58,700,729.20\n57,277,639.07\n62,889,885.72\n63,794,805.40\nCurrency Outside Depository Corporations\n10,302.12\n38,228.70\n51,228.50\n58,234.40\n69,073.11\n80,494.25\n96,980.58\n99,696.61\n99,233.50\n120,464.84\n120,970.46\n102,855.54\n108,475.84\nMemorandum Items\nReserve Money\n4,892,122.31\n6,639,450.71\n7,238,618.14\n7,282,113.20\n7,708,040.15\n13,606,577.69\n20,428,825.74\n20,028,010.53\n20,395,116.65\n21,688,509.63\n21,184,516.26\n22,726,335.23\n22,614,609.49\nFCAs as a Percentage of Deposits in M3\n82.2%\n80.5%\n78.6%\n76.4%\n74.8%\n82.7%\n86.6%\n84.0%\n83.4%\n82.2%\n81.6%\n82.4%\n82.3%\nEnd Period Exchange Rate\n13.43\n13.32\n13.70\n13.79\n13.85\n24.88\n28.68\n25.45\n25.80\n26.37\n26.56\n26.77\n26.82\nSource: Reserve Bank of Zimbabwe, 2025\nNotes:\n(i) Depository corporations survey - formerly Monetary Survey.\n(ii) Broad money redefined using IMF's Monetary and Financial Statistics Manual of 2000. Major changes include exclusion of Government deposits held by banks from broad money.\n(iii) Transferable deposits made up of demand and savings deposits.\n(iv) NCDs are also referred to as securities included in broad money.\n(v) All classes of time deposits, short and long term are classified as time deposits, which are also termed other deposits.\n(vi) Credit to the private sector now excludes claims on other financial corporations, as well as claims on state and local government (local authorities)\n(vii) Depository corporations made up of the Central Bank and other depository corporations\n(viii) Other depository corporations (ODCs) - Commercial banks, merchant banks, building societies and POSB.\n(ix) In December 2017, the statistics were adjusted in restrospect by reclassifying Securities issued under Aftrades from claims on government to claims on central bank\n(x) In December 2017, the statistics were adjusted in restrospect by reclassifying amounts accessed by banks under the Aftrades from liabilities to Other Depository corporations and Other Financial Corporations to liabilities to Central Bank \n(xi) In December 2018, statistics were revised from November 2017 due to reclassification of lines of credit (foreign liabilities) that were initially classified as deposits included in broad money\n(xii) All monetary and financial statistics are valued in ZWL$ since the introduction of the interbank foreign exchange market in February 2019\n*Statistics are denominated in ZiG\n \n \n12 \n \n \n \n \nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nNet Foreign Assets\n-35,698,765.79\n-34,640,985.68\n-34,675,535.57\n-34,509,441.34\n-34,520,053.81\n-62,586,924.75\n-66,010,331.85\n-57,686,803.02\n-56,911,905.66\n-58,197,285.15\n-60,030,706.89\n-55,922,579.95\n-54,500,643.35\nClaims on Non Residents\n9,276,276.05\n9,502,376.00\n10,341,190.76\n10,301,545.49\n10,342,781.57\n17,610,056.98\n24,894,776.54\n22,229,005.79\n23,239,748.84\n23,967,010.24\n23,087,880.76\n28,287,077.32\n26,132,242.58\nOfficial Reserves Assets\n3,630,141.09\n4,432,806.91\n4,934,345.75\n4,653,584.80\n4,669,127.60\n7,448,226.11\n13,215,724.85\n12,029,876.12\n12,507,847.00\n13,012,028.64\n12,782,102.88\n16,201,301.25\n16,015,188.61\nOther Foreign Assets\n5,646,134.96\n5,069,569.09\n5,406,845.01\n5,647,960.69\n5,673,653.97\n10,161,830.87\n11,679,051.69\n10,199,129.67\n10,731,901.84\n10,954,981.61\n10,305,777.88\n12,085,776.07\n10,117,053.97\nLess Liabilities to Non Residents\n44,975,041.84\n44,143,361.68\n45,016,726.33\n44,810,986.83\n44,862,835.37\n80,196,981.74\n90,905,108.39\n79,915,808.81\n80,151,654.50\n82,164,295.39\n83,118,587.65\n84,209,657.27\n80,632,885.93\nShort Term Liabilities\n181,911.80\n68,814.57\n68,323.27\n67,276.01\n68,945.87\n121,431.23\n139,956.61\n124,234.37\n127,599.01\n130,779.08\n132,089.98\n95,836.21\n92,548.77\nOther Foreign Liabilities*\n44,793,130.04\n44,074,547.11\n44,948,403.06\n44,743,710.82\n44,793,889.51\n80,075,550.51\n90,765,151.78\n79,791,574.44\n80,024,055.49\n82,033,516.31\n82,986,497.67\n84,113,821.06\n80,540,337.16\n of which blocked funds\n10,572,458.80\n10,463,756.31\n10,741,167.48\n10,788,191.71\n10,803,573.95\n19,394,800.27\n22,213,360.59\n19,667,091.04\n17,365,023.44\n17,716,697.60\n17,848,335.07\n17,984,719.26\n13,730,603.29\nNet Domestic Assets (NDA)\n42,153,859.23\n41,280,436.39\n41,914,153.72\n41,791,554.54\n42,228,093.95\n76,193,502.44\n86,439,157.59\n77,714,813.55\n77,307,022.31\n79,885,794.78\n81,215,223.15\n78,648,915.18\n77,115,252.84\nDomestic Claims\n23,016,131.61\n23,259,572.78\n22,964,435.47\n23,611,619.32\n23,986,457.18\n42,382,262.65\n49,026,774.12\n40,880,349.44\n41,177,610.35\n42,570,173.06\n45,225,552.88\n47,071,770.46\n46,565,376.94\nNet Claims on Central Government\n22,621,230.63\n22,859,830.49\n22,476,140.52\n23,124,882.69\n23,502,830.93\n41,654,332.62\n48,169,430.28\n40,083,090.05\n40,730,630.45\n42,007,556.24\n44,015,827.34\n45,839,370.71\n45,294,514.02\nClaims on Central Government\n25,896,938.71\n26,112,137.48\n26,985,969.93\n27,458,247.33\n28,058,136.59\n49,156,933.23\n56,008,803.04\n49,413,731.18\n50,322,196.84\n51,342,654.13\n48,573,045.84\n50,689,516.96\n51,472,216.36\n of which: Securities Other than Shares\n6,909,934.78\n6,872,112.81\n7,091,361.49\n7,151,406.10\n7,200,851.85\n12,949,528.58\n15,003,331.18\n13,352,395.70\n13,877,094.68\n14,218,896.68\n14,323,594.21\n14,476,546.84\n14,550,745.09\n of which USD Securities \n6,905,188.25\n6,867,418.56\n7,086,795.02\n7,146,851.75\n7,196,324.20\n12,949,528.58\n15,003,331.18\n13,352,395.70\n13,877,094.68\n14,218,896.68\n14,323,594.21\n14,476,546.84\n14,550,745.09\nLoans\n18,987,003.94\n19,240,024.68\n19,894,608.43\n20,306,841.23\n20,857,284.75\n36,207,404.66\n41,005,471.86\n36,061,335.49\n36,445,102.15\n37,123,757.45\n34,249,451.63\n36,212,970.13\n36,921,471.26\n Loans and Advances\n791,535.04\n1,044,827.19\n1,287,212.83\n1,588,971.09\n1,589,532.00\n1,656,113.81\n1,575,286.73\n1,576,279.86\n1,579,038.55\n1,582,383.97\n8,684.84\n8,274.06\n9,367.91\nAmounts Due from Gvt including SDR Drawdowns\n18,195,468.90\n18,195,197.49\n18,607,395.60\n18,717,870.13\n19,267,752.75\n34,551,290.84\n39,430,185.13\n34,485,055.62\n34,866,063.60\n35,541,373.47\n34,240,766.79\n36,204,696.07\n36,912,103.35\n of which USD Securities revaluations (Exchange rate movements)\n17,984,314.62\n17,896,022.73\n18,308,220.85\n18,563,850.74\n18,972,797.61\n34,256,335.70\n39,103,481.48\n34,071,404.01\n34,373,221.03\n35,256,525.16\n35,520,014.26\n36,233,075.89\n37,260,300.45\n Export Incentives\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLess Liabilities to Central Government\n3,275,708.09\n3,252,306.99\n4,509,829.40\n4,333,364.64\n4,555,305.67\n7,502,600.61\n7,839,372.76\n9,330,641.14\n9,591,566.38\n9,335,097.88\n4,557,218.50\n4,850,146.25\n6,177,702.34\nOf which: Deposits\n3,275,708.09\n3,252,306.99\n4,509,829.40\n4,333,364.64\n4,555,305.67\n7,502,600.61\n7,839,372.76\n9,330,641.14\n9,591,566.38\n9,335,097.88\n4,557,218.50\n4,850,146.25\n6,177,702.34\nof which Foreign Currency\n2,744,563.43\n2,472,546.52\n3,275,403.93\n3,115,314.66\n3,469,715.70\n6,332,620.41\n7,620,209.73\n9,113,050.30\n9,291,474.24\n8,231,669.88\n3,875,544.34\n4,410,312.03\n5,787,185.63\nLocal Currency Deposits\n0.00\n779,760.48\n1,234,425.47\n1,218,049.98\n1,085,589.96\n1,169,980.20\n219,163.03\n217,590.84\n300,092.14\n1,103,428.01\n681,674.17\n439,834.22\n390,516.71\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n394,900.98\n399,742.29\n488,294.95\n486,736.63\n483,626.25\n727,930.03\n857,343.85\n797,259.39\n446,979.90\n562,616.82\n1,209,725.54\n1,232,399.74\n1,270,862.93\nOther Financial Corporations\n62,041.75\n63,265.43\n62,779.58\n63,295.04\n64,046.07\n64,253.89\n68,325.03\n80,132.55\n31,350.72\n31,714.65\n245,531.91\n256,427.81\n257,789.54\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n183,950.70\n182,840.53\n187,717.21\n188,548.19\n188,350.72\n309,573.20\n351,773.24\n314,700.86\n12,288.64\n11,460.27\n425,315.82\n430,535.71\n435,999.00\nPrivate Sector\n148,908.53\n153,636.33\n237,798.15\n234,893.40\n231,229.46\n354,102.93\n437,245.57\n402,425.98\n403,340.54\n519,441.90\n538,877.81\n545,436.23\n577,074.39\nClaims on Other Depository Corporations\n364,055.43\n361,687.12\n362,068.58\n322,950.33\n315,110.77\n546,767.88\n591,244.82\n1,571,336.21\n907,944.93\n794,549.14\n948,290.62\n1,059,387.09\n1,097,271.76\nOf which: Loans\n364,055.43\n361,687.12\n362,068.58\n322,950.33\n315,110.77\n546,767.88\n591,244.82\n1,571,336.21\n907,944.93\n794,549.14\n948,290.62\n1,059,387.09\n1,097,271.76\nOther Liabilities to ODCs\n5,672,540.16\n6,381,133.30\n5,909,428.26\n5,505,978.19\n5,409,080.16\n4,538,818.97\n6,707,055.64\n8,873,541.61\n8,273,621.31\n7,914,935.58\n8,889,894.56\n9,408,949.80\n11,959,255.26\nOf which: Aftrades Balances\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Securities\n2,260,627.63\n2,214,947.71\n2,314,576.53\n2,802,338.07\n2,870,625.13\n1,385,743.24\n1,724,801.18\n2,144,377.64\n2,002,013.98\n1,650,524.42\n2,378,356.92\n2,749,153.11\n2,521,500.05\nOther Items(Net)\n-24,446,212.35\n-24,040,309.79\n-24,497,077.93\n-23,362,963.07\n-23,335,606.17\n-37,803,290.88\n-43,528,194.29\n-44,136,669.51\n-43,495,088.34\n-44,436,008.16\n-43,931,274.21\n-39,926,707.42\n-41,411,859.40\nShares and Other Equity\n-24,240,753.70\n-23,915,831.50\n-24,236,240.32\n-23,332,831.27\n-23,091,435.83\n-37,896,149.54\n-43,845,102.64\n-41,767,525.41\n-39,722,515.26\n-40,716,687.65\n-38,350,823.50\n-37,337,007.50\n-32,727,792.93\nOther Items(Net)\n-1,523,004.67\n-2,100,723.61\n-2,120,667.23\n-1,846,508.62\n-2,396,362.99\n-3,908,731.83\n-4,040,258.56\n-6,511,308.80\n-8,239,991.34\n-8,373,471.14\n-12,139,470.53\n-10,080,715.57\n-16,500,895.60\nLiabilities to Other Resident Sectors\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nDeposits and Securities Excluded from Base Money\n1,317,546.03\n1,976,245.32\n1,859,829.62\n1,816,376.82\n2,152,192.65\n4,001,590.49\n4,357,166.91\n4,142,164.71\n4,467,418.26\n4,654,150.62\n6,559,019.82\n7,491,015.65\n7,816,829.13\nMonetary Base \n6,455,093.44\n6,639,450.71\n7,238,618.14\n7,282,113.20\n7,708,040.15\n13,606,577.69\n20,428,825.74\n20,028,010.53\n20,395,116.65\n21,688,509.63\n21,184,516.26\n22,726,335.23\n22,614,609.49\nCurrency Issued\n17,756.07\n53,215.76\n60,445.44\n65,756.33\n75,469.02\n88,365.90\n153,689.13\n172,287.58\n181,873.44\n189,782.65\n196,003.25\n204,184.02\n215,834.01\nZWL Coins\n20.39\n16.95\n15.26\n14.33\n14.27\n14.27\n14.27\n14.27\n14.27\n14.27\n14.27\n14.27\n14.27\nZWL Notes\n7,646.53\n7,646.25\n7,641.71\n6,018.48\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\n5,288.65\nZig Notes\n1,240.55\n12,162.56\n16,066.84\n20,175.22\n26,774.05\n33,546.57\n35,318.43\n35,320.20\n35,320.10\n35,322.26\n35,322.72\n35,323.23\n35,324.36\nZiG Coins\n8,848.60\n33,390.00\n36,721.62\n39,548.30\n43,392.05\n49,516.41\n113,067.78\n131,664.45\n141,250.42\n149,157.47\n155,377.61\n163,557.87\n175,206.72\nLiabilities to ODCs\n6,437,337.37\n6,586,234.95\n7,178,172.71\n7,216,356.87\n7,632,571.13\n13,518,211.78\n20,275,136.61\n19,855,722.95\n20,213,243.21\n21,498,726.98\n20,988,513.01\n22,522,151.21\n22,398,775.48\nReserve Deposits\n4,760,466.26\n5,381,967.87\n5,674,932.79\n6,001,808.11\n6,198,549.50\n11,991,225.66\n17,272,213.17\n16,096,475.01\n16,691,280.01\n17,918,322.64\n17,853,262.69\n17,411,472.42\n18,965,464.46\n Local Currency Reserve Deposits\n588,261.85\n852,988.66\n1,019,521.43\n1,293,912.63\n1,392,957.07\n1,999,399.49\n2,851,765.21\n2,965,905.06\n2,935,341.50\n2,981,537.53\n3,152,253.26\n3,222,430.88\n3,688,042.11\n Foreign Currency Reserve Deposits\n4,172,204.40\n4,528,979.21\n4,655,411.36\n4,707,895.48\n4,805,592.43\n9,991,826.17\n14,420,447.97\n13,130,569.95\n13,755,938.51\n14,936,785.11\n14,701,009.42\n14,189,041.54\n15,277,422.35\n Exess reserves \n1,676,871.11\n1,204,267.07\n1,503,239.92\n1,214,548.76\n1,434,021.62\n1,526,986.12\n3,002,923.43\n3,759,247.94\n3,521,963.20\n3,580,404.34\n3,135,250.32\n5,110,678.79\n3,433,311.02\n of which Excess reserves - ZiG\n113,899.99\n124,143.39\n145,185.75\n87,381.11\n143,711.96\n165,752.71\n338,542.12\n406,286.37\n398,701.95\n275,478.64\n440,419.67\n363,524.21\n412,329.00\n Excess reserves - FCA\n1,562,971.12\n1,080,123.68\n1,358,054.17\n1,127,167.65\n1,290,309.66\n1,361,233.41\n2,664,381.31\n3,352,961.57\n3,123,261.25\n3,304,925.70\n2,694,830.66\n4,747,154.58\n3,020,982.02\nPrivate Deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Of which Foreign Currency Accounts\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n172,772.48\n7,312.68\n471,197.53\n172,041.15\nSource: Reserve Bank of Zimbabwe, 2025\nNB: * Other Foreign Liabilities include blocked funds amounting to USD2.2 billion assumed by the Central Bank on behalf of Government.\n*Statistics are denominated in ZiG\nTABLE 2: CENTRAL BANK SURVEY (ZWG'000)\n \n \n13 \n \n \n \n \n \n TABLE 3 : OTHER DEPOSITORY CORPORATIONS SURVEY ( ZWG '000)\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nNet Foreign Assets\n6,841,962.55\n6,864,056.48\n6,861,295.92\n7,506,228.34\n6,703,991.82\n11,311,763.23\n11,863,962.98\n9,303,347.77\n9,621,512.62\n7,389,855.15\n8,858,140.98\n9,084,921.39\n9,303,653.64\nClaims on Non Residents\n10,973,836.76\n11,293,656.76\n11,679,328.24\n12,352,811.95\n11,598,442.41\n20,019,415.47\n21,861,671.92\n17,752,438.09\n19,141,214.17\n20,280,522.97\n21,464,245.49\n22,405,988.41\n22,719,000.08\nOf Which: Foreign Currency\n4,794,837.35\n4,337,566.82\n4,753,113.49\n5,739,936.96\n6,444,888.52\n10,895,905.76\n13,662,079.40\n11,233,737.69\n10,274,553.25\n12,746,359.54\n11,639,759.14\n9,242,682.83\n9,519,904.05\nDeposits\n6,152,462.49\n6,929,621.83\n6,902,261.76\n6,586,859.83\n5,128,037.09\n9,069,019.76\n8,153,531.84\n6,482,287.97\n8,827,755.41\n6,917,904.53\n9,040,658.99\n12,961,797.44\n12,996,492.34\nOther\n26,536.92\n26,468.12\n23,952.99\n26,015.17\n25,516.80\n54,489.96\n46,060.69\n36,412.43\n38,905.51\n616,258.91\n783,827.36\n201,508.15\n202,603.69\nLess Liabilities to Non Residents\n4,131,874.21\n4,429,600.28\n4,818,032.32\n4,846,583.61\n4,894,450.59\n8,707,652.25\n9,997,708.95\n8,449,090.32\n9,519,701.55\n12,890,667.83\n12,606,104.51\n13,321,067.02\n13,415,346.44\nOf Which: Deposits\n1,874,340.18\n1,941,676.30\n2,023,747.02\n1,715,870.69\n1,688,391.39\n2,976,714.87\n3,361,036.04\n2,691,546.72\n3,251,085.67\n2,457,297.24\n2,140,508.07\n1,714,067.13\n2,351,476.19\nLoans\n2,257,534.02\n2,487,923.98\n2,794,285.29\n3,130,712.92\n3,206,059.20\n5,730,937.38\n6,636,672.91\n5,757,543.59\n6,268,615.88\n10,433,370.59\n10,465,596.44\n11,606,999.89\n11,063,870.25\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nNet Domestic Assets (NDA)\n31,782,273.98\n33,785,421.43\n35,673,665.70\n38,145,673.59\n39,635,826.10\n63,272,480.21\n75,102,707.82\n73,469,677.34\n77,581,551.65\n70,673,909.77\n69,308,198.04\n74,080,257.75\n77,384,557.01\nDomestic Claims\n30,483,864.43\n31,543,958.04\n33,380,506.81\n36,954,010.73\n37,139,789.00\n62,499,402.56\n71,531,508.87\n65,031,259.53\n67,738,193.00\n62,715,842.20\n63,183,472.74\n64,707,119.69\n65,487,400.13\nNet Claims on Central Government\n5,584,180.30\n5,547,369.71\n5,745,341.04\n7,293,076.13\n6,548,202.35\n10,591,046.35\n11,703,334.97\n10,121,437.02\n10,961,408.94\n5,587,819.34\n5,710,880.75\n5,893,841.78\n2,703,381.51\nClaims on Central Government\n5,827,034.95\n5,897,338.50\n6,334,601.55\n7,731,687.11\n7,081,139.08\n11,174,323.23\n12,330,801.46\n10,798,672.42\n11,677,830.99\n13,736,580.28\n13,267,357.86\n13,658,283.85\n13,697,560.53\nSecurities\n5,583,192.64\n5,867,704.45\n6,309,901.96\n7,706,557.44\n6,955,089.37\n10,929,386.91\n12,091,791.23\n10,509,483.63\n11,621,387.80\n13,393,713.03\n12,742,171.99\n13,149,275.83\n13,219,565.52\n of which foreign currency denominated securities\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n11,952,492.94\n11,317,473.10\n11,610,829.00\n12,803,600.95\nLoans\n243,842.32\n29,634.05\n24,699.60\n25,129.68\n126,049.71\n244,936.32\n239,010.23\n289,188.79\n56,443.19\n342,867.25\n525,185.87\n509,008.02\n477,995.02\n of which foreign currency\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n335,726.69\n515,891.12\n500,077.20\n474,002.53\nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nLess Liabilities to Central Government\n242,854.65\n349,968.79\n589,260.52\n438,610.98\n532,936.72\n583,276.88\n627,466.49\n677,235.40\n716,422.05\n8,148,760.93\n7,556,477.10\n7,764,442.07\n10,994,179.03\nOf which: Deposits\n242,854.65\n349,968.79\n589,260.52\n438,610.98\n532,936.72\n583,276.88\n627,466.49\n677,235.40\n716,422.05\n8,148,760.28\n7,486,500.33\n7,714,695.67\n10,839,609.34\nof which foreign currency deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n7,621,815.11\n6,689,625.99\n6,183,927.26\n9,392,249.02\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.65\n69976.77\n49746.39\n154569.69\nClaims on Other Sectors\n24,899,684.12\n25,996,588.33\n27,635,165.77\n29,660,934.60\n30,591,586.65\n51,908,356.20\n59,828,173.90\n54,909,822.51\n56,776,784.05\n57,128,022.86\n57,472,591.98\n58,813,277.91\n62,784,018.62\nOther Financial Corporations\n295,553.50\n371,891.66\n452,086.38\n418,360.70\n447,828.48\n803,033.30\n864,824.64\n762,328.72\n811,209.93\n3,485,441.13\n3,385,548.89\n3,608,074.67\n4,473,463.56\nState and Local Government\n1,803.44\n1,371.69\n1,489.84\n162.58\n189.44\n334.82\n83.40\n98.73\n574.72\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n769,195.30\n753,308.55\n709,073.06\n688,025.36\n609,127.16\n1,004,586.77\n1,150,112.93\n919,347.91\n889,370.20\n558,389.47\n545,976.19\n481,201.02\n462,250.04\nPrivate Sector\n23,833,131.89\n24,870,016.43\n26,472,516.50\n28,554,385.96\n29,534,441.57\n50,100,401.31\n57,813,152.92\n53,228,047.15\n55,075,629.21\n53,084,192.25\n53,541,066.90\n54,724,002.21\n57,848,305.02\nof which foreign currency denominated loans\n46,086,808.21\n46,197,558.48\n47,961,063.26\n50,400,882.52\nClaims on the Central Bank\n11,097,658.79\n12,455,525.64\n12,775,616.04\n11,481,325.31\n13,543,158.02\n22,444,626.84\n30,514,072.84\n32,279,220.71\n32,226,426.11\n30,373,545.93\n29,202,075.39\n30,532,018.85\n33,836,493.47\nCurrency\n7,453.94\n14,987.06\n9,216.94\n7,521.93\n6,395.91\n7,871.66\n56,708.55\n72,590.97\n82,639.94\n69,317.82\n75,032.79\n101,328.49\n107,358.17\nReserves\n11,090,204.85\n12,420,731.87\n12,746,019.20\n11,453,300.33\n13,516,156.89\n22,399,747.84\n30,414,709.72\n29,835,562.13\n32,109,976.20\n30,142,631.46\n28,957,942.09\n30,153,538.87\n33,294,888.17\nSecurities\n0.00\n19,806.72\n20,379.90\n20,503.05\n20,605.22\n37,007.33\n42,654.56\n2,371,067.62\n33,809.97\n161,596.66\n169,100.51\n277,151.49\n434,247.13\nOther Claims\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLiabilities to the Central Bank\n67,448.03\n50,898.37\n99,769.05\n99,872.51\n109,931.02\n491,438.62\n429,739.68\n409,274.64\n233,008.13\n488,195.06\n536,903.93\n541,715.35\n544,153.36\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(Net)\n9,731,801.21\n10,163,163.89\n10,382,688.10\n10,189,789.94\n10,937,189.89\n21,180,110.57\n26,513,134.21\n23,431,528.27\n22,150,059.32\n21,927,283.31\n22,540,446.16\n20,617,165.44\n21,395,183.23\nShares and Other Equity\n11,639,746.46\n13,617,857.06\n16,354,657.14\n17,229,141.66\n19,127,593.60\n32,025,127.21\n37,321,973.73\n32,311,333.95\n32,915,572.23\n37,957,331.90\n39,010,056.96\n39,952,688.39\n40,420,684.72\nLiabilities to other ressident sectors\n222,678.57\n4,558.25\n13,223.72\n12,000.37\n12,502.97\n51,080.87\n16,114.32\n42,655.67\n112,460.71\n40,857.99\n232,767.00\n52,600.17\n57,571.63\nOther Items(Net)\n-2,130,623.82\n-3,459,251.43\n-5,985,192.76\n-7,051,352.09\n-8,202,906.68\n-10,896,097.52\n-10,824,953.85\n-8,922,461.35\n-10,877,973.62\n-16,070,906.59\n-16,702,377.80\n-19,388,123.12\n-19,083,073.13\nDeposits and Securities Included in Broad Money\n38,624,236.53\n40,649,477.91\n42,534,961.62\n45,651,901.94\n46,339,817.92\n74,584,243.43\n86,966,670.79\n82,773,025.11\n87,203,064.28\n78,063,764.92\n78,166,339.02\n83,165,179.14\n86,688,210.65\nDeposits Included in Broad Money\n38,621,441.08\n \n40,645,105.30\n \n42,530,970.04\n \n45,632,719.17\n \n46,313,212.53\n \n74,560,409.93\n \n86,923,945.26\n \n82,773,025.11\n \n87,203,064.28\n \n76,952,923.01\n \n77,123,326.81\n \n81,906,890.48\n \n85,574,557.18\n \nTransferable Deposits\n35,915,961.93\n \n37,368,646.98\n \n38,710,519.24\n \n41,742,426.77\n \n42,434,906.62\n \n68,693,995.54\n \n79,031,446.06\n \n75,045,621.35\n \n79,013,920.71\n \n70,228,432.67\n \n69,326,092.81\n \n74,633,455.07\n \n76,668,539.82\n \n of which FCAs\n29,421,560.87\n \n29,788,818.17\n \n30,114,642.50\n \n31,415,685.01\n \n31,648,530.18\n \n58,109,730.00\n \n68,608,644.80\n \n64,281,472.90\n \n67,075,955.67\n \n58,527,956.72\n \n57,270,326.39\n \n62,418,688.19\n \n63,622,764.25\n \nOther Deposits (Time Deposits)\n2,705,479.15\n3,276,458.32\n3,820,450.80\n3,890,292.40\n3,878,305.91\n5,866,414.39\n7,892,499.20\n7,727,403.75\n8,189,143.57\n6,724,490.33\n7,797,233.99\n7,273,435.41\n8,906,017.36\n of which FCAs\n2,426,638.27\n2,953,225.13\n3,343,135.17\n3,425,730.40\n3,030,905.19\n4,839,186.89\n6,654,693.18\n5,209,298.79\n5,598,125.36\n5,707,454.07\n6,566,882.32\n6,058,373.46\n7,683,253.11\nMoney Market Instruments\n2,795.45\n \n4,372.61\n \n3,991.57\n \n19,182.77\n \n26,605.39\n \n23,833.50\n \n42,725.53\n \n-\n \n-\n \n1,110,841.91\n \n1,043,012.21\n \n1,258,288.66\n \n1,113,653.48\n \nSource:Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\n \n \n14 \n \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernemt\nOther2\nGovernment\nLocal \nPublic \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nsecurities\nGovernment\nEnterprises\nTotal\nAssets\n2022\nJan\n2,891.2\n \n53,378.3\n \n116,654.8\n \n13,232.3\n \n69,668.2\n \n30,774.3\n40,241.6\n2.4\n186.8\n2,906.7\n20.3\n163.0\n4,023.2\n228,616.6\n16,284.0\n53,627.8\n55,303.6\n85,737.0\n773,712.0\nFeb\n2,577.7\n \n62,064.5\n \n122,479.8\n \n17,480.5\n \n76,802.2\n \n28,703.5\n49,241.8\n1.6\n0.0\n3,242.5\n20.3\n158.1\n5,761.9\n249,205.9\n16,681.8\n55,099.6\n59,171.4\n86,732.0\n835,425.0\nMar\n2,111.5\n \n76,544.2\n \n142,962.5\n \n19,239.6\n \n87,884.5\n \n43,284.1\n50,566.9\n0.9\n0.0\n2,970.2\n19.4\n253.4\n6,635.8\n296,282.4\n16,435.1\n65,660.6\n69,287.0\n94,293.1\n974,431.2\nApr\n2,624.9\n \n74,716.9\n \n160,466.5\n \n28,352.1\n \n123,190.3\n \n26,628.8\n63,944.8\n0.2\n0.0\n2,583.9\n37.5\n252.4\n7,258.1\n338,207.2\n30,154.8\n53,372.3\n73,993.0\n90,352.8\n1,076,136.5\nMay\n3,155.9\n \n142,118.9\n \n236,166.0\n \n35,928.9\n \n207,812.8\n \n61,757.6\n70,936.8\n0.0\n155.0\n3,762.8\n41.3\n289.0\n16,588.0\n455,287.9\n36,125.5\n134,993.5\n111,577.7\n130,617.1\n1,647,314.7\nJun\n2,801.2\n \n138,347.1\n \n266,691.8\n \n45,952.0\n \n241,920.1\n \n63,631.8\n86,890.0\n0.0\n654.0\n5,297.4\n61.2\n226.3\n14,282.6\n549,799.2\n38,578.3\n169,511.8\n130,604.3\n205,601.3\n1,960,850.3\nJul\n2,427.6\n \n159,024.6\n \n315,832.5\n \n39,388.2\n \n230,432.5\n \n41,246.8\n91,509.2\n0.0\n394.3\n4,940.5\n100.7\n349.7\n22,911.0\n638,556.7\n45,361.4\n144,090.2\n143,606.3\n242,024.6\n2,122,196.7\nAug\n2,640.6\n \n263,637.4\n \n411,439.9\n \n69,203.5\n \n311,107.0\n \n29,186.6\n100,187.1\n0.0\n330.1\n6,912.2\n113.5\n287.1\n46,504.1\n764,466.3\n46,788.2\n167,029.4\n251,442.9\n244,934.2\n2,716,210.1\nSep\n3,030.7\n \n289,230.8\n \n504,071.1\n \n75,446.7\n \n417,007.1\n \n18,185.0\n143,464.9\n0.0\n267.4\n8,265.9\n115.1\n306.3\n41,560.9\n902,078.3\n51,664.5\n146,133.1\n231,760.0\n285,781.8\n3,118,369.8\nOct\n3,022.6\n \n300,240.3\n \n525,870.3\n \n104,483.2\n \n389,979.7\n \n22,895.3\n151,757.7\n0.0\n204.7\n4,590.6\n116.5\n342.0\n43,335.5\n936,397.1\n58,632.8\n165,306.9\n267,183.8\n298,996.3\n3,273,355.4\nNov\n3,251.4\n \n286,365.2\n \n575,885.7\n \n111,716.1\n \n342,790.1\n \n17,089.0\n198,814.4\n0.0\n142.0\n6,078.2\n119.5\n303.6\n43,195.4\n1,042,144.5\n73,069.8\n170,944.8\n232,107.1\n302,373.7\n3,406,390.5\nDec\n3,361.7\n \n295,435.1\n \n652,284.4\n \n119,932.8\n \n351,906.8\n \n7,965.4\n288,844.0\n0.0\n20,072.7\n8,831.7\n114.4\n282.6\n30,272.3\n1,143,910.8\n84,048.5\n159,126.2\n234,748.7\n418,944.7\n3,820,082.5\n2023\nJan\n4,923.3\n \n379,841.7\n \n704,168.6\n \n151,980.1\n \n389,342.8\n \n-1,443.6\n319,807.4\n0.0\n23,774.5\n8,624.7\n228.5\n251.2\n44,113.2\n1,348,919.7\n137,477.6\n227,545.4\n251,246.0\n451,149.8\n4,441,950.8\nFeb\n1,880.1\n \n436,062.8\n \n743,888.5\n \n81,067.5\n \n518,081.0\n \n21,964.4\n332,626.9\n0.0\n26,717.2\n6,974.7\n319.0\n197.4\n44,691.5\n1,538,078.6\n142,383.8\n226,933.0\n281,339.4\n490,831.3\n4,894,037.1\nMar\n2,031.6\n \n425,326.5\n \n817,631.1\n \n112,374.3\n \n531,935.4\n \n41,928.7\n360,626.2\n0.0\n24,689.0\n10,382.7\n432.2\n149.8\n48,725.4\n1,745,783.1\n166,893.5\n554,840.9\n315,882.3\n532,130.1\n5,691,762.4\nApr\n1,844.7\n \n462,081.4\n \n972,122.7\n \n161,740.7\n \n620,095.0\n \n32,207.0\n391,587.8\n0.0\n28,119.0\n19,573.0\n559.8\n99.3\n54,058.4\n1,822,350.9\n178,895.0\n214,270.9\n411,870.0\n572,012.3\n5,943,487.7\nMay\n1,107.2\n \n1,048,116.4\n \n2,049,066.1\n \n309,234.1\n \n1,554,969.0\n \n84,147.3\n653,025.9\n0.0\n76,351.5\n16,564.4\n4,599.1\n80.3\n112,188.1\n4,068,894.1\n366,505.1\n607,438.1\n788,546.8\n884,349.9\n12,625,183.4\nJun\n1,984.5\n \n2,249,201.6\n \n4,424,350.0\n \n471,360.3\n \n3,050,984.1\n \n390,369.2\n981,773.8\n0.0\n212,126.8\n8,070.8\n18,582.4\n83.0\n260,946.3\n8,977,244.2\n669,100.1\n1,390,786.2\n1,582,985.5\n2,782,639.3\n27,472,588.1\nJul\n1,489.0\n \n1,584,403.3\n \n4,137,377.2\n \n380,493.0\n \n3,132,849.9\n \n369,552.6\n1,242,045.2\n0.0\n165,764.7\n17,713.9\n7,368.1\n68.1\n208,253.7\n7,144,225.5\n821,517.0\n829,382.3\n1,411,037.1\n3,124,457.4\n24,577,997.9\nAug\n2,292.1\n \n1,505,916.2\n \n4,651,358.8\n \n448,025.8\n \n3,179,274.3\n \n245,546.0\n1,190,599.0\n0.0\n165,103.2\n7,939.8\n7,469.9\n75.8\n205,341.5\n7,142,066.9\n817,682.7\n701,626.2\n1,348,230.8\n3,086,091.3\n24,704,640.2\nSep\n2,465.6\n \n2,015,621.6\n \n5,263,338.5\n \n560,033.8\n \n3,210,332.7\n \n305,649.1\n1,318,582.7\n0.0\n175,013.5\n10,773.5\n9,935.8\n92.0\n219,878.9\n8,628,418.0\n892,737.1\n776,997.6\n1,646,406.8\n3,310,710.4\n28,346,987.7\nOct\n2,425.4\n \n2,312,575.1\n \n5,910,277.9\n \n751,077.6\n \n2,663,186.5\n \n240,258.0\n1,272,839.7\n0.0\n190,359.3\n21,408.8\n10,816.8\n98.1\n237,525.7\n9,281,352.1\n844,462.4\n958,746.4\n1,741,207.9\n3,433,150.2\n29,871,767.9\nNov\n2,705.3\n \n2,558,589.3\n \n6,324,144.1\n \n730,377.0\n \n2,788,783.6\n \n230,917.5\n1,517,348.4\n0.0\n188,949.4\n34,470.7\n10,921.4\n59.8\n238,702.3\n9,523,818.5\n907,759.0\n1,046,257.0\n2,150,227.0\n3,544,388.6\n31,798,418.9\nDec\n3,398.4\n \n2,868,505.6\n \n5,973,706.9\n \n918,524.5\n \n2,631,445.7\n \n212,294.5\n2,627,512.6\n0.0\n182,480.9\n38,249.3\n12,325.3\n73.5\n248,699.8\n10,110,961.4\n984,502.1\n1,184,706.9\n2,319,603.9\n4,087,896.6\n34,404,887.7\n2024\nJan\n2,947.9\n \n5,196,670.6\n \n9,096,074.6\n \n1,414,527.9\n \n3,957,664.6\n \n326,220.5\n4,283,761.8\n0.0\n306,771.2\n57,595.6\n17,912.4\n198.8\n374,088.3\n16,298,021.8\n1,109,251.7\n1,949,662.4\n3,467,246.2\n5,133,753.8\n52,992,370.2\nFeb\n3,143.6\n \n7,309,077.0\n \n12,595,037.9\n \n2,395,225.7\n \n5,340,576.7\n \n178,130.4\n6,381,641.8\n0.0\n437,989.9\n78,292.7\n26,073.1\n232.0\n488,602.8\n24,095,690.3\n1,538,423.6\n2,608,075.1\n4,122,833.9\n6,863,317.4\n74,462,363.7\nMar\n2,831.0\n \n9,785,505.6\n \n16,734,744.0\n \n3,185,636.7\n \n7,548,560.1\n \n775,336.9\n8,605,206.6\n0.0\n585,769.6\n126,026.3\n47,609.3\n143.3\n729,484.9\n37,149,745.6\n2,535,252.5\n2,860,196.6\n5,844,376.9\n10,808,889.0\n107,325,315.0\nApr\n7.5\n \n4,794.8\n \n11,004.0\n \n2,108.7\n \n5,798.1\n \n354.3\n5,583.2\n0.0\n348.4\n37.2\n330.0\n1.8\n440.5\n22,799.4\n1,336.2\n2,510.2\n6,102.7\n5,490.3\n69,047.3\nMay\n15.0\n \n4,337.6\n \n12,420.7\n \n2,281.4\n \n6,437.2\n \n492.4\n5,867.7\n0.0\n339.6\n23.7\n49.4\n1.4\n433.4\n23,728.2\n1,520.6\n2,114.7\n7,240.8\n5,731.5\n73,035.2\nJun\n9.2\n \n4,753.1\n \n12,746.0\n \n2,349.5\n \n6,493.3\n \n409.0\n6,309.9\n0.0\n282.9\n32.6\n45.1\n1.5\n446.4\n25,292.4\n1,628.6\n2,541.3\n7,612.6\n6,871.1\n77,824.6\nJul\n7.5\n \n5,739.9\n \n11,453.3\n \n1,987.0\n \n6,135.6\n \n451.2\n7,706.6\n0.0\n276.2\n128.4\n45.6\n0.2\n432.4\n26,513.1\n2,454.9\n2,342.9\n8,065.1\n7,708.4\n81,448.2\nAug\n6.4\n \n6,444.9\n \n13,516.2\n \n2,310.5\n \n4,922.1\n \n205.9\n6,955.1\n0.0\n246.2\n100.5\n146.7\n0.2\n388.0\n27,463.6\n2,511.4\n2,767.9\n9,021.7\n8,363.7\n85,371.0\nSep\n7.9\n \n10,895.9\n \n22,399.7\n \n3,870.6\n \n8,728.6\n \n340.5\n10,929.4\n0.0\n431.0\n34.5\n281.9\n0.3\n610.8\n46,961.9\n3,924.3\n4,853.4\n13,635.1\n12,318.0\n140,223.9\nOct\n56.7\n \n13,662.1\n \n30,414.7\n \n5,068.5\n \n8,024.4\n \n129.1\n12,091.8\n0.0\n502.2\n53.5\n281.7\n0.1\n689.5\n54,229.9\n4,447.2\n6,380.1\n13,935.9\n13,802.2\n163,769.6\nNov\n72.6\n \n11,233.7\n \n29,835.6\n \n4,498.6\n \n6,365.0\n \n117.3\n10,509.5\n0.0\n367.6\n185.0\n2,660.3\n0.1\n582.5\n49,728.9\n4,261.8\n6,685.9\n14,193.4\n13,503.2\n154,800.9\nDec\n82.6\n \n10,274.6\n \n32,110.0\n \n5,538.7\n \n8,540.2\n \n287.6\n11,621.4\n0.0\n361.0\n79.0\n90.3\n0.6\n559.5\n51,561.9\n4,324.4\n6,555.3\n16,212.6\n14,183.7\n162,383.2\n2025\nJan\n69.3\n \n12,746.4\n \n30,180.7\n \n3,532.9\n \n6,021.2\n \n896.7\n13,393.7\n0.0\n0.0\n2,006.3\n342.9\n0.0\n558.4\n6,598.6\n45,645.3\n52,243.9\n4,743.0\n6,786.8\n10,675.6\n18,575.8\n162,773.4\nFeb\n75.0\n \n11,639.8\n \n28,998.1\n \n3,283.1\n \n8,161.6\n \n879.1\n12,742.2\n0.0\n0.0\n2,420.6\n525.2\n0.0\n546.0\n6,009.1\n46,847.7\n52,856.7\n4,830.3\n7,060.8\n8,636.7\n18,506.8\n161,162.0\nMar\n101.3\n \n9,242.7\n \n30,230.5\n \n3,610.1\n \n12,141.7\n \n820.1\n13,149.3\n0.0\n0.0\n2,701.4\n509.0\n0.0\n481.2\n5,364.5\n48,748.3\n54,112.8\n4,536.1\n7,859.2\n8,503.0\n19,297.8\n167,296.2\nApr\n107.4\n \n9,519.9\n \n33,479.3\n \n3,591.2\n \n12,582.7\n \n413.8\n13,219.6\n0.0\n0.0\n2,516.2\n478.0\n0.0\n462.3\n5,605.4\n52,416.4\n58,021.8\n4,214.0\n6,452.9\n11,508.1\n19,362.3\n175,929.4\nSource:Reserve Bank of Zimbabwe, 2025\nNotes\n1.Government securities includes treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations.\n*Statistics are denominated in ZiG\nPublic \nEnterprises\nTABLE 4.1: OTHER DEPOSITORY CORPORATIONS -ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\nGovernment1 \nSecurities\nOther Institutional Units\nForeign \nCurrency \nDenominated\n ZiG \nDenominated\n \n \n15 \n \n \n \n \n \nEnd of\nTotal Deposits\nof which FCA\n475,755.5\n2022\nJan\n392,702.2\n32,298.0\n39,346.3\n464,346.5\n2,962.5\n4,027.0\n471,336.0\n3,685.3\n25,398.5\n2,688.6\n1,416.9\n230.5\n144,852.4\n53,627.8\n70,476.0\n773,712.0\nFeb\n413,978.3\n37,494.3\n47,592.5\n499,065.1\n3,229.3\n4,407.7\n506,702.1\n4,456.2\n30,483.6\n2,120.4\n1,769.7\n226.8\n153,788.5\n55,099.6\n80,778.2\n835,425.0\nMar\n488,137.1\n37,893.9\n54,213.9\n580,244.9\n3,062.2\n5,330.5\n588,637.7\n4,510.9\n33,995.7\n2,137.9\n3,281.0\n810.6\n175,156.3\n65,660.6\n100,240.6\n974,431.2\nApr\n562,613.7\n46,129.7\n52,760.1\n661,503.5\n6,377.5\n7,656.8\n675,537.9\n4,246.9\n38,472.7\n2,173.0\n3,877.2\n486.8\n178,614.3\n53,372.3\n119,355.4\n1,076,136.5\nMay\n830,166.0\n61,112.6\n70,113.9\n961,392.5\n7,310.9\n7,417.6\n976,120.9\n6,165.3\n73,411.8\n2,383.3\n3,241.0\n321.8\n243,544.4\n134,993.5\n207,132.5\n1,647,314.7\nJun\n961,316.9\n66,716.9\n81,118.5\n1,109,152.4\n5,627.3\n10,226.2\n1,125,005.9\n7,157.9\n83,048.1\n2,898.5\n4,589.8\n345.2\n355,060.9\n169,511.8\n213,232.2\n1,960,850.3\nJul\n1,016,820.2\n79,550.5\n94,495.2\n1,190,865.8\n1,789.6\n9,363.5\n1,202,018.9\n8,137.9\n100,313.8\n2,814.9\n5,020.5\n1,339.1\n419,883.3\n144,090.2\n238,578.1\n2,122,196.7\nAug\n1,367,431.3\n85,931.5\n134,512.9\n1,587,875.7\n2,415.4\n7,892.4\n1,598,183.5\n12,785.6\n119,851.6\n3,230.7\n5,771.2\n555.2\n491,336.5\n167,029.4\n317,466.4\n2,716,210.1\nSep\n1,648,027.7\n92,678.5\n157,504.6\n1,898,210.8\n1,482.9\n8,707.2\n1,908,401.0\n14,047.5\n143,842.3\n3,720.2\n9,246.7\n587.2\n553,942.2\n146,133.1\n338,449.6\n3,118,369.8\nOct\n1,615,381.5\n76,774.2\n166,880.7\n1,859,036.4\n2,028.0\n6,673.7\n1,867,738.0\n15,558.9\n153,649.9\n28,072.2\n8,610.3\n762.5\n581,740.3\n165,306.9\n451,916.4\n3,273,355.4\nNov\n1,771,644.8\n81,518.1\n189,465.9\n2,042,628.9\n1,547.6\n6,731.4\n2,050,907.9\n13,438.5\n139,370.8\n19,973.5\n10,489.1\n339.6\n612,977.2\n170,944.8\n387,949.1\n3,406,390.5\nDec\n1,990,867.6\n90,317.0\n234,004.4\n2,315,189.0\n2,754.1\n7,866.7\n2,325,809.8\n14,149.0\n177,214.1\n10,597.8\n15,234.4\n752.5\n750,161.5\n159,126.2\n367,037.4\n3,820,082.5\n2023\nJan\n2,270,946.6\n100,094.1\n275,805.1\n2,646,845.8\n1,676.5\n41,821.3\n2,690,343.7\n15,056.5\n196,129.5\n4,974.3\n12,291.7\n675.5\n881,874.7\n227,545.4\n413,059.5\n4,441,950.8\nFeb\n2,496,192.1\n98,177.2\n294,332.5\n2,888,701.8\n1,956.9\n11,040.2\n2,901,698.9\n15,711.7\n225,209.4\n8,092.9\n20,822.5\n3,109.0\n951,831.6\n226,933.0\n540,628.1\n4,894,037.1\nMar\n2,710,394.6\n121,937.7\n333,589.3\n3,165,921.6\n1,430.8\n6,188.7\n3,173,541.1\n16,082.6\n256,206.0\n9,639.9\n22,996.8\n3,714.6\n1,036,325.4\n554,840.9\n618,415.2\n5,691,762.4\nApr\n3,144,048.4\n159,872.5\n269,932.0\n3,573,852.9\n573.4\n9,702.2\n3,584,128.5\n1,843.4\n318,092.2\n13,321.9\n29,787.9\n6,418.8\n1,137,637.3\n214,270.9\n637,986.8\n5,943,487.7\nMay\n6,481,742.5\n169,496.7\n556,927.2\n7,208,166.4\n1,068.6\n50,511.7\n7,259,746.7\n4,659.4\n783,531.0\n78,332.6\n74,083.0\n30,583.3\n2,224,856.6\n607,438.1\n1,561,952.6\n12,625,183.4\nJun\n12,937,869.2\n240,252.2\n1,073,317.8\n14,251,439.2\n4,578.8\n432,610.2\n14,688,628.1\n4,243.6\n1,833,341.2\n39,166.6\n112,338.9\n64,321.9\n6,245,056.0\n1,390,786.2\n3,094,705.7\n27,472,588.1\nJul\n11,864,787.9\n285,723.5\n828,095.7\n12,978,607.1\n30,380.7\n380,435.8\n13,389,423.7\n2,137.4\n1,458,906.6\n87,827.2\n160,696.4\n58,256.2\n5,865,068.7\n829,382.3\n2,726,299.5\n24,577,997.9\nAug\n12,168,928.8\n353,674.2\n862,852.8\n13,385,455.8\n23,457.8\n381,525.5\n13,790,439.1\n3,182.7\n1,483,108.2\n84,841.4\n154,160.3\n56,751.6\n5,646,934.2\n701,626.2\n2,783,596.5\n24,704,640.2\nSep\n14,342,241.3\n404,040.4\n947,184.1\n15,693,465.8\n11,309.1\n114,502.6\n15,819,277.6\n2,685.5\n1,688,992.2\n82,493.4\n168,880.8\n90,032.4\n6,410,594.6\n776,997.6\n3,307,033.6\n28,346,987.7\nOct\n15,103,817.1\n439,336.7\n1,190,702.7\n16,733,856.4\n8,575.8\n147,053.3\n16,889,485.5\n3,497.2\n1,573,857.1\n84,628.9\n176,455.5\n83,441.8\n6,756,087.7\n958,746.4\n3,345,567.7\n29,871,767.9\nNov\n15,816,643.6\n534,621.6\n1,241,055.7\n17,592,320.9\n92,509.4\n133,475.4\n17,818,305.6\n4,173.2\n1,784,153.1\n92,939.9\n244,115.1\n89,997.7\n7,059,070.8\n1,046,257.0\n3,659,406.4\n31,798,418.9\nDec\n16,937,697.1\n613,283.2\n1,290,630.5\n18,841,610.7\n94,004.9\n201,484.9\n19,137,100.5\n42,811.4\n1,831,385.7\n55,157.4\n162,437.9\n138,722.6\n7,736,287.7\n1,184,706.9\n4,116,277.7\n34,404,887.7\n2024\nJan\n26,686,959.6\n746,212.0\n1,754,255.7\n29,187,427.3\n113,265.9\n169,629.6\n29,470,322.8\n7,317.9\n3,007,687.4\n114,298.0\n290,202.8\n182,727.0\n11,623,761.9\n1,949,662.4\n6,346,389.9\n52,992,370.2\nFeb\n36,944,811.1\n818,341.2\n2,810,669.8\n40,573,822.1\n177,789.1\n340,577.8\n41,092,189.0\n9,458.4\n4,421,333.7\n105,237.1\n454,842.1\n279,727.9\n16,146,119.3\n2,608,075.1\n9,345,381.2\n74,462,363.7\nMar\n53,801,105.7\n857,520.8\n4,468,346.0\n59,126,972.5\n275,444.0\n515,567.0\n59,917,983.5\n6,990.9\n6,535,789.0\n95,705.0\n506,746.6\n361,061.7\n24,968,710.0\n2,860,196.6\n12,072,131.8\n107,325,315.0\n*Apr\n35,042.5\n873.5\n2,711.3\n38,627.3\n161.4\n242.9\n39,031.6\n2.8\n4,126.0\n67.4\n358.1\n222.7\n12,859.8\n2,510.2\n9,868.8\n69,047.3\n*May\n36,571.3\n797.4\n3,283.3\n40,652.0\n82.8\n350.0\n41,084.8\n4.4\n4,422.7\n50.9\n436.0\n4.6\n15,110.7\n2,114.7\n9,806.4\n73,035.2\n*Jun\n37,665.2\n1,045.3\n3,824.5\n42,535.1\n2.1\n589.3\n43,126.4\n4.0\n4,813.9\n99.8\n450.6\n13.2\n17,940.3\n2,541.3\n8,835.0\n77,824.6\n*Jul\n40,332.2\n1,410.3\n3,894.3\n45,636.8\n68.7\n438.6\n46,144.1\n19.2\n4,842.5\n99.9\n483.0\n12.0\n18,795.9\n2,342.9\n8,708.8\n81,448.2\n*Aug\n40,849.7\n1,585.3\n3,882.8\n46,317.8\n65.6\n532.9\n46,916.3\n26.6\n4,889.9\n109.9\n602.1\n12.5\n20,035.9\n2,767.9\n10,009.9\n85,371.0\n*Sep\n66,835.5\n1,858.6\n5,872.5\n74,566.6\n99.2\n583.3\n75,249.0\n23.8\n8,701.5\n491.4\n860.8\n51.1\n34,201.4\n4,853.4\n15,791.4\n140,223.9\n*Oct\n76,868.7\n2,162.8\n7,903.0\n86,934.5\n257.1\n627.5\n87,819.1\n42.7\n9,987.1\n429.7\n1,310.2\n16.1\n39,650.6\n6,380.1\n18,134.0\n163,769.6\n*Nov\n72,575.6\n2,470.1\n7,734.9\n82,780.6\n202.6\n677.2\n83,660.4\n0.0\n8,441.5\n409.3\n568.8\n42.7\n38,968.8\n6,685.9\n16,023.6\n154,800.9\n*Dec\n76,723.8\n2,290.2\n8,197.9\n87,211.9\n205.6\n716.4\n88,133.9\n0.0\n9,510.9\n233.0\n856.2\n112.5\n39,782.4\n6,555.3\n17,199.0\n162,383.2\n2025\n*Jan\n68,409.5\n1,912.4\n7,835.3\n78,157.2\n1,164.8\n8,148.8\n87,470.8\n64,365.7\n0.0\n12,797.2\n488.2\n969.1\n40.9\n38,608.5\n6,786.8\n15,612.0\n162,773.4\n*Feb\n67,429.9\n1,989.7\n8,910.2\n78,329.8\n759.7\n7,486.5\n86,576.0\n63,840.6\n0.0\n12,512.6\n536.9\n1,154.7\n232.8\n39,664.8\n7,060.8\n13,423.4\n161,162.0\n*Mar\n72,624.4\n2,009.1\n8,581.5\n83,215.0\n248.3\n7,714.7\n91,178.1\n68,486.6\n0.0\n13,321.0\n541.7\n801.1\n52.6\n40,610.2\n7,859.2\n12,932.3\n167,296.2\n*Apr\n74,443.6\n2,224.9\n10,174.2\n86,842.8\n255.1\n10,839.6\n97,937.5\n70,754.4\n0.0\n13,415.3\n544.2\n970.0\n57.6\n41,163.7\n6,452.9\n15,388.2\n175,929.4\nSource: Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\nTOTAL\nTime Deposits\nSavings\nDemand\nGovernment \nOther Finacial \nCorporations\nCapital and \nReserves\nContigent \nLiabilities\nOther \nLiabilities\nOther \nDepository \nTotal Deposits from \nthe Public \nOther Depository \nCorporations\nDebt Securities\nForeign \nLiabilities\nRBZ\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\nZWG millions\n \n \n16 \n \n \n \n \n \nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt Public Enterprises\nOther2\nGovernment\nGovernment\nEnterprises\nLoans in ZiG\nLoans in Foreign Currency\nTotal\nOther claims\nAssets\nOther Assets\nAssets\nTOTAL\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2022\nJan\n2,359.27\n \n49,206.02\n \n108,119.97\n \n10,419.90\n \n66,808.45\n \n30,774.31\n \n38,636.84\n \n-\n \n186.80\n \n801.50\n \n20.33\n \n163.02\n \n3,628.73\n \n199,495.34\n \n2,997.94\n \n53,627.76\n \n47,405.91\n \n69,989.80\n \n684,641.9\n \nFeb\n1,971.78\n \n57,553.54\n \n112,522.99\n \n14,300.66\n \n70,750.63\n \n28,703.53\n \n44,705.21\n \n-\n \n-\n \n976.55\n \n20.34\n \n158.06\n \n5,367.16\n \n215,520.37\n \n3,055.50\n \n55,099.61\n \n53,459.12\n \n70,832.47\n \n734,997.5\n \nMar\n1,541.49\n \n70,856.33\n \n130,423.48\n \n15,503.46\n \n82,662.70\n \n43,284.13\n \n44,874.23\n \n-\n \n-\n \n1,380.20\n \n19.40\n \n253.42\n \n6,240.94\n \n258,715.05\n \n3,092.69\n \n65,660.61\n \n58,874.69\n \n76,938.87\n \n860,321.7\n \nApr\n1,939.64\n \n70,204.43\n \n144,168.02\n \n23,452.88\n \n117,033.42\n \n26,628.79\n \n57,772.47\n \n-\n \n-\n \n722.54\n \n37.54\n \n252.44\n \n6,858.06\n \n305,476.79\n \n4,348.46\n \n53,372.28\n \n62,788.55\n \n71,414.75\n \n946,471.1\n \nMay\n2,397.94\n \n131,996.38\n \n211,837.59\n \n31,586.61\n \n190,366.81\n \n61,757.62\n \n64,373.91\n \n-\n \n154.99\n \n1,559.14\n \n41.28\n \n289.00\n \n16,193.81\n \n398,048.90\n \n4,712.74\n \n134,993.54\n \n94,851.60\n \n111,543.84\n \n1,456,705.7\n \nJun\n2,263.18\n \n127,839.16\n \n234,109.43\n \n40,937.28\n \n219,607.39\n \n63,631.76\n \n83,690.44\n \n-\n \n653.97\n \n2,159.12\n \n61.20\n \n226.29\n \n13,888.60\n \n478,163.38\n \n8,954.46\n \n169,511.81\n \n110,528.09\n \n168,440.54\n \n1,724,666.1\n \nJul\n1,578.47\n \n147,217.74\n \n284,912.89\n \n34,334.13\n \n202,815.28\n \n41,246.78\n \n86,971.63\n \n-\n \n394.34\n \n1,852.14\n \n100.65\n \n349.68\n \n22,516.21\n \n556,692.12\n \n9,737.92\n \n144,090.18\n \n129,869.55\n \n192,524.32\n \n1,857,204.0\n \nAug\n1,630.70\n \n247,190.46\n \n377,078.80\n \n64,650.96\n \n273,181.97\n \n29,186.59\n \n95,346.12\n \n-\n \n330.12\n \n3,556.96\n \n113.50\n \n287.14\n \n26,564.57\n \n681,253.30\n \n11,493.92\n \n167,029.36\n \n238,442.98\n \n194,745.11\n \n2,412,082.6\n \nSep\n1,791.71\n \n270,594.59\n \n465,301.31\n \n68,020.95\n \n370,323.69\n \n18,184.96\n \n134,414.53\n \n-\n \n267.40\n \n4,916.56\n \n115.11\n \n306.33\n \n21,773.50\n \n806,774.24\n \n12,680.89\n \n146,133.14\n \n215,417.68\n \n219,933.24\n \n2,756,949.8\n \nOct\n1,704.79\n \n281,204.64\n \n480,106.49\n \n94,573.08\n \n343,440.15\n \n22,895.35\n \n136,939.74\n \n-\n \n204.69\n \n2,201.55\n \n116.48\n \n341.96\n \n22,935.50\n \n852,069.39\n \n15,525.65\n \n165,306.91\n \n232,188.99\n \n245,924.22\n \n2,897,679.6\n \nNov\n1,644.95\n \n259,109.18\n \n533,438.97\n \n101,870.32\n \n299,715.01\n \n17,089.04\n \n180,534.44\n \n-\n \n141.97\n \n2,292.28\n \n119.53\n \n303.55\n \n22,178.73\n \n960,814.77\n \n15,450.39\n \n170,944.78\n \n196,338.19\n \n250,551.19\n \n3,012,537.3\n \nDec\n1,778.71\n \n263,863.65\n \n603,136.26\n \n110,935.77\n \n299,087.30\n \n7,965.37\n \n266,725.41\n \n-\n \n79.26\n \n3,887.78\n \n114.42\n \n282.61\n \n30,272.25\n \n1,066,654.12\n \n16,130.63\n \n159,126.16\n \n189,560.01\n \n344,235.10\n \n3,363,834.8\n \n2023\nJan\n2,391.61\n \n340,953.56\n \n654,740.29\n \n143,455.70\n \n335,380.17\n \n(1,443.59)\n \n301,026.07\n \n-\n \n105.97\n \n4,873.87\n \n228.45\n \n251.24\n \n44,113.17\n \n1,307,512.98\n \n17,767.70\n \n227,545.42\n \n204,830.78\n \n374,080.77\n \n3,957,814.2\n \nFeb\n1,470.56\n \n366,544.71\n \n691,937.49\n \n71,097.36\n \n452,795.43\n \n21,074.53\n \n306,913.92\n \n-\n \n50.02\n \n1,524.98\n \n318.96\n \n197.44\n \n44,691.50\n \n1,481,851.05\n \n18,037.18\n \n226,932.96\n \n224,983.29\n \n411,002.80\n \n4,321,424.2\n \nMar\n1,771.98\n \n344,570.46\n \n755,463.34\n \n103,284.07\n \n478,333.21\n \n41,928.66\n \n330,669.68\n \n-\n \n-\n \n3,884.11\n \n432.22\n \n149.78\n \n48,725.38\n \n1,679,284.89\n \n28,439.56\n \n554,840.85\n \n254,605.57\n \n438,790.17\n \n5,065,173.9\n \nApr\n1,631.24\n \n388,822.83\n \n903,029.49\n \n144,252.31\n \n555,886.92\n \n32,206.95\n \n361,846.09\n \n-\n \n-\n \n8,716.45\n \n559.82\n \n99.28\n \n54,058.39\n \n1,722,384.40\n \n28,899.91\n \n214,270.92\n \n321,765.39\n \n476,263.19\n \n5,214,693.6\n \nMay\n1,010.26\n \n907,818.70\n \n1,932,225.57\n \n281,052.93\n \n1,351,116.97\n \n84,147.32\n \n570,367.60\n \n-\n \n-\n \n8,974.78\n \n4,599.15\n \n80.34\n \n112,188.06\n \n3,844,133.80\n \n65,696.39\n \n607,438.10\n \n669,908.72\n \n758,154.17\n \n11,198,912.9\n \nJun\n1,762.11\n \n1,979,000.71\n \n4,218,755.04\n \n444,538.09\n \n2,584,596.63\n \n350,042.51\n \n865,465.55\n \n-\n \n-\n \n221.09\n \n10,133.46\n \n8,052.34\n \n260,946.26\n \n8,487,837.63\n \n92,224.26\n \n1,390,786.24\n \n1,304,228.92\n \n2,222,499.38\n \n24,221,090.2\n \nJul\n1,305.13\n \n1,428,604.02\n \n3,898,282.53\n \n359,151.15\n \n2,646,743.26\n \n337,541.82\n \n1,133,463.14\n \n-\n \n-\n \n153.30\n \n7,368.09\n \n68.07\n \n208,253.70\n \n6,917,007.30\n \n129,308.58\n \n829,382.28\n \n1,155,945.57\n \n2,438,538.20\n \n21,491,116.1\n \nAug\n1,664.09\n \n1,370,651.81\n \n4,309,693.74\n \n391,792.23\n \n2,693,989.06\n \n208,098.88\n \n1,084,784.90\n \n-\n \n-\n \n138.30\n \n7,469.95\n \n75.80\n \n205,341.47\n \n6,863,348.14\n \n127,816.16\n \n701,626.16\n \n1,081,800.09\n \n2,446,465.02\n \n21,494,755.8\n \nSep\n1,503.56\n \n1,763,364.33\n \n4,914,305.55\n \n517,813.92\n \n2,760,807.78\n \n247,094.60\n \n1,204,684.14\n \n-\n \n-\n \n9.75\n \n9,935.82\n \n92.05\n \n219,878.94\n \n8,245,053.80\n \n151,685.43\n \n776,997.57\n \n1,312,147.78\n \n2,668,520.81\n \n24,793,895.8\n \nOct\n1,977.18\n \n2,059,471.85\n \n5,625,069.70\n \n562,790.91\n \n2,202,475.21\n \n175,235.94\n \n1,172,130.22\n \n-\n \n-\n \n0.03\n \n10,816.83\n \n98.06\n \n237,525.73\n \n8,864,363.09\n \n153,534.70\n \n958,746.42\n \n1,351,846.54\n \n2,767,099.33\n \n26,143,181.7\n \nNov\n2,295.18\n \n2,278,921.91\n \n5,913,094.15\n \n568,556.41\n \n2,451,981.00\n \n180,229.25\n \n1,337,040.40\n \n-\n \n-\n \n0.03\n \n10,921.42\n \n59.77\n \n238,702.30\n \n9,040,518.08\n \n158,702.11\n \n1,046,256.98\n \n1,702,370.26\n \n2,868,031.98\n \n27,797,681.2\n \nDec\n2,947.49\n \n2,536,437.97\n \n5,489,443.24\n \n657,432.63\n \n2,268,702.96\n \n155,742.88\n \n2,420,663.39\n \n-\n \n-\n \n0.03\n \n12,324.59\n \n73.45\n \n248,699.79\n \n9,507,281.46\n \n255,007.08\n \n1,184,706.91\n \n1,748,495.98\n \n3,349,062.31\n \n29,837,022.2\n \n2024\nJan\n2,536.36\n \n4,749,173.95\n \n8,535,153.83\n \n940,210.80\n \n3,564,879.01\n \n285,807.60\n \n3,972,600.87\n \n-\n \n-\n \n0.03\n \n17,912.41\n \n198.80\n \n374,088.29\n \n14,957,169.30\n \n312,516.30\n \n1,949,662.45\n \n2,737,500.88\n \n4,289,981.53\n \n46,689,392.4\n \nFeb\n2,519.25\n \n6,564,463.71\n \n11,709,703.62\n \n1,772,649.65\n \n4,708,270.62\n \n153,450.01\n \n5,911,393.45\n \n-\n \n-\n \n0.03\n \n26,073.06\n \n232.00\n \n488,602.76\n \n22,234,523.09\n \n378,975.16\n \n2,608,075.14\n \n3,125,793.33\n \n5,812,047.28\n \n65,496,772.2\n \nMar\n2,435.72\n \n8,601,285.46\n \n15,501,059.95\n \n2,213,233.27\n \n6,701,169.42\n \n775,336.87\n \n8,098,495.31\n \n-\n \n-\n \n0.03\n \n47,609.35\n \n143.35\n \n729,484.92\n \n34,077,197.02\n \n597,886.20\n \n2,860,196.61\n \n4,317,386.46\n \n8,974,860.63\n \n93,497,780.6\n \nApr\n5.89\n \n4,141.51\n \n9,980.68\n \n1,414.28\n \n5,461.70\n \n287.09\n \n5,206.08\n \n-\n \n-\n \n0.00\n \n31.18\n \n88.00\n \n440.49\n \n20,170.86\n \n246.21\n \n2,510.15\n \n5,472.97\n \n4,360.99\n \n59,818.1\n \nMay\n10.60\n \n3,583.02\n \n11,575.45\n \n1,506.01\n \n6,092.37\n \n382.87\n \n5,420.56\n \n-\n \n-\n \n0.00\n \n29.63\n \n1.37\n \n433.36\n \n21,315.87\n \n348.50\n \n2,114.73\n \n6,339.55\n \n4,613.87\n \n63,767.8\n \nJun\n8.01\n \n4,111.49\n \n11,498.97\n \n1,627.32\n \n5,775.34\n \n298.05\n \n6,080.69\n \n-\n \n-\n \n7.23\n \n24.70\n \n1.49\n \n446.45\n \n22,801.09\n \n345.72\n \n2,541.32\n \n6,558.03\n \n5,419.46\n \n67,545.3\n \nJul\n5.05\n \n4,943.82\n \n10,426.18\n \n1,342.47\n \n5,743.94\n \n351.44\n \n6,988.99\n \n-\n \n0.00\n \n5.21\n \n25.13\n \n0.16\n \n432.35\n \n24,895.03\n \n348.09\n \n2,342.85\n \n6,539.59\n \n6,244.23\n \n70,634.5\n \nAug\n5.26\n \n5,703.86\n \n12,540.81\n \n1,453.04\n \n4,411.38\n \n205.93\n \n6,149.38\n \n-\n \n-\n \n2.43\n \n126.05\n \n0.19\n \n378.05\n \n25,591.15\n \n542.15\n \n2,767.89\n \n7,004.36\n \n6,832.60\n \n73,714.5\n \nSep\n6.82\n \n9,465.31\n \n20,161.22\n \n2,742.22\n \n7,903.81\n \n340.45\n \n10,295.58\n \n-\n \n-\n \n0.00\n \n244.94\n \n0.33\n \n600.93\n \n43,094.11\n \n979.13\n \n4,853.44\n \n11,326.85\n \n9,785.35\n \n121,800.5\n \nOct\n39.65\n \n12,315.40\n \n27,597.64\n \n3,670.13\n \n7,120.62\n \n129.14\n \n11,256.45\n \n-\n \n-\n \n0.00\n \n239.01\n \n0.08\n \n679.62\n \n49,545.16\n \n1,042.81\n \n6,380.10\n \n11,454.83\n \n11,116.57\n \n142,587.2\n \nNov\n58.26\n \n10,111.62\n \n27,498.54\n \n3,102.17\n \n5,626.08\n \n117.33\n \n9,757.48\n \n-\n \n0.00\n \n0.00\n \n287.55\n \n2,326.36\n \n572.57\n \n45,782.99\n \n1,064.73\n \n6,685.94\n \n11,362.33\n \n10,783.91\n \n135,137.8\n \nDec\n64.89\n \n8,774.50\n \n29,312.78\n \n3,217.87\n \n7,673.17\n \n287.57\n \n10,942.77\n \n-\n \n0.00\n \n8.29\n \n54.88\n \n0.57\n \n549.66\n \n46,926.14\n \n1,073.63\n \n6,555.30\n \n13,399.70\n \n11,326.46\n \n140,168.2\n \n2025\nJan\n55.47\n \n11,470.10\n \n27,587.58\n \n2,805.14\n \n5,383.93\n \n896.67\n \n12,362.23\n \n-\n \n-\n \n807.94\n \n342.87\n \n-\n \n201.82\n \n6,018.68\n \n38,456.08\n \n44,474.76\n \n4,490.04\n \n6,786.76\n \n7,296.77\n \n14,700.77\n \n139,662.8\n \nFeb\n60.09\n \n10,394.10\n \n26,074.71\n \n2,500.83\n \n7,466.49\n \n879.05\n \n11,985.91\n \n-\n \n-\n \n1,227.40\n \n525.19\n \n-\n \n210.91\n \n5,135.14\n \n39,602.20\n \n44,737.33\n \n4,572.78\n \n7,060.84\n \n6,529.15\n \n14,603.01\n \n138,827.8\n \nMar\n79.63\n \n7,880.54\n \n27,417.58\n \n2,717.51\n \n11,623.76\n \n820.11\n \n12,300.30\n \n-\n \n-\n \n1,342.02\n \n509.01\n \n-\n \n196.72\n \n4,699.08\n \n40,942.54\n \n45,641.63\n \n4,354.50\n \n7,859.25\n \n6,540.97\n \n15,243.80\n \n144,527.3\n \nApr\n87.99\n \n8,108.02\n \n30,664.80\n \n2,649.20\n \n12,068.34\n \n413.80\n \n12,241.98\n \n-\n \n-\n \n1,095.15\n \n478.00\n \n-\n \n177.77\n \n4,854.99\n \n44,593.50\n \n49,448.49\n \n4,042.90\n \n6,452.91\n \n9,497.37\n \n15,304.56\n \n152,731.3\n \nSource: Reserve Bank of Zimbabwe, 2025\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations. \nStatistics are denominated in ZiG\nTABLE 5.1: COMMERCIAL BANKS -ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\nOther Institutional Units\n \n \n17 \n \n \n \nZWG millions\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nOf wich FCA\nDebt Securities\nForeign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2022\nJan\n346,619.5\n43,438.8\n31,158.1\n421,216.4\n2,962.5\n3,864.8\n428,043.7\n2,995.6\n14,406.9\n2,688.6\n1,043.2\n230.5\n122,752.1\n53,627.8\n58,853.6\n684,641.9\nFeb\n358,979.4\n51,510.7\n38,313.7\n448,803.8\n3,229.3\n4,248.7\n456,281.8\n3,834.1\n16,267.7\n2,120.4\n1,338.1\n226.8\n130,981.3\n55,099.6\n68,847.8\n734,997.5\nMar\n422,934.6\n58,283.5\n42,258.5\n523,476.6\n3,062.2\n5,171.3\n531,710.2\n3,850.2\n18,374.8\n2,137.9\n2,779.1\n810.6\n149,781.8\n65,660.6\n85,216.5\n860,321.7\nApr\n479,558.7\n74,880.3\n40,491.0\n594,930.0\n6,377.5\n7,486.7\n608,794.2\n3,792.3\n21,445.6\n2,173.0\n3,173.0\n486.8\n149,610.1\n53,372.3\n103,623.7\n946,471.1\nMay\n666,937.8\n137,419.9\n55,389.8\n859,747.5\n7,310.9\n7,249.8\n874,308.3\n5,769.3\n39,105.1\n2,383.3\n2,207.5\n321.8\n214,978.6\n134,993.5\n182,638.3\n1,456,705.7\nJun\n773,692.7\n154,956.9\n63,511.7\n992,161.3\n4,597.1\n10,018.0\n1,006,776.4\n6,743.2\n42,701.8\n2,898.5\n3,389.3\n345.2\n307,341.8\n169,511.8\n184,958.1\n1,724,666.1\nJul\n810,906.6\n173,134.0\n74,324.5\n1,058,365.1\n717.0\n9,153.8\n1,068,235.9\n7,994.5\n54,168.7\n2,814.9\n2,948.9\n1,339.1\n355,597.9\n144,090.2\n220,013.9\n1,857,204.0\nAug\n1,100,922.1\n219,798.6\n110,595.1\n1,431,315.7\n790.2\n7,675.2\n1,439,781.1\n12,484.6\n64,160.3\n3,230.7\n2,791.8\n555.2\n421,880.4\n167,029.4\n300,169.0\n2,412,082.6\nSep\n1,328,584.6\n256,980.2\n127,051.1\n1,712,616.0\n1,482.9\n8,473.0\n1,722,571.9\n13,789.2\n81,182.4\n3,720.2\n5,632.9\n587.2\n465,063.9\n146,133.1\n318,269.0\n2,756,949.8\nOct\n1,365,908.5\n205,688.8\n128,186.9\n1,699,784.2\n813.8\n6,314.3\n1,706,912.3\n14,933.2\n83,998.0\n28,072.2\n4,282.4\n762.5\n486,396.6\n165,306.9\n407,015.5\n2,897,679.6\nNov\n1,481,503.5\n243,239.9\n146,530.0\n1,871,273.4\n291.3\n6,366.6\n1,877,931.3\n12,665.1\n67,318.9\n19,973.5\n5,349.1\n339.6\n514,200.0\n170,944.8\n343,815.1\n3,012,537.3\nDec\n1,697,008.7\n235,271.2\n181,090.6\n2,113,370.5\n1,514.4\n7,399.5\n2,122,284.4\n13,296.8\n106,071.5\n10,597.8\n9,610.4\n752.5\n621,113.3\n159,126.2\n320,981.8\n3,363,834.8\n2023\nJan\n2,139,458.0\n78,197.7\n215,537.0\n2,433,192.7\n214.3\n41,333.8\n2,474,740.8\n12,923.7\n123,605.0\n4,974.3\n5,669.1\n675.5\n723,452.2\n227,545.4\n384,228.1\n3,957,814.2\nFeb\n1,997,073.4\n398,595.8\n230,549.9\n2,626,219.1\n303.5\n10,655.7\n2,637,178.4\n14,443.3\n140,484.9\n8,092.9\n13,273.6\n3,109.0\n780,290.7\n226,933.0\n497,618.5\n4,321,424.2\nMar\n2,218,678.7\n384,245.5\n262,119.8\n2,865,044.1\n1,272.8\n5,953.0\n2,872,269.9\n15,181.9\n166,322.5\n9,639.9\n15,494.1\n3,714.6\n846,479.9\n554,840.9\n581,230.2\n5,065,173.9\nApr\n2,646,522.9\n382,678.9\n197,662.2\n3,226,864.0\n173.4\n9,463.7\n3,236,501.1\n1,115.5\n201,674.1\n13,321.9\n21,331.0\n6,418.8\n935,402.2\n214,270.9\n584,658.1\n5,214,693.6\nMay\n5,196,712.7\n969,812.4\n435,965.9\n6,602,490.9\n514.9\n50,270.4\n6,653,276.3\n1,287.6\n493,894.8\n78,332.6\n65,967.5\n30,583.3\n1,815,309.9\n607,438.1\n1,452,822.8\n11,198,912.9\nJun\n10,038,744.6\n2,287,818.9\n789,112.9\n13,115,676.4\n1,468.6\n432,367.0\n13,549,512.0\n1,177.5\n1,201,797.0\n39,166.6\n101,465.7\n64,321.9\n5,042,026.4\n1,390,786.2\n2,830,837.1\n24,221,090.2\nJul\n9,592,825.0\n1,787,488.9\n592,115.4\n11,972,429.2\n9,138.5\n380,190.7\n12,361,758.4\n512.4\n847,658.7\n87,827.2\n146,299.0\n58,256.2\n4,649,856.9\n829,382.3\n2,509,565.1\n21,491,116.1\nAug\n9,698,801.3\n1,920,804.2\n622,360.9\n12,241,966.5\n1,479.8\n381,277.2\n12,624,723.5\n863.9\n865,945.4\n84,841.4\n141,305.4\n56,751.6\n4,465,099.7\n701,626.2\n2,553,598.8\n21,494,755.8\nSep\n13,388,822.1\n319,686.0\n695,555.0\n14,404,063.1\n4,754.8\n114,251.5\n14,523,069.4\n504.3\n1,036,635.6\n82,493.4\n152,779.3\n90,032.4\n5,159,376.7\n776,997.6\n2,972,007.2\n24,793,895.8\nOct\n14,087,303.5\n312,655.9\n827,902.5\n15,227,861.9\n1,692.7\n146,801.2\n15,376,355.8\n522.9\n1,106,440.5\n84,628.9\n159,670.3\n83,441.8\n5,427,255.6\n958,746.4\n2,946,119.7\n26,143,181.7\nNov\n14,816,672.7\n306,014.4\n882,972.1\n16,005,659.2\n5,789.4\n133,219.7\n16,144,668.4\n432.3\n1,259,039.0\n92,939.9\n227,935.0\n89,997.7\n5,701,702.0\n1,046,257.0\n3,234,709.9\n27,797,681.2\nDec\n15,726,758.6\n369,405.4\n808,422.2\n16,904,586.1\n6,923.3\n201,225.8\n17,112,735.3\n36,808.0\n1,314,667.6\n55,157.4\n153,701.6\n138,722.6\n6,264,918.7\n1,184,706.9\n3,575,604.1\n29,837,022.2\n2024\nJan\n24,824,665.8\n662,989.2\n1,191,915.8\n26,679,570.7\n25,881.9\n169,368.5\n26,874,821.1\n168.2\n2,102,990.2\n114,298.0\n279,174.1\n182,727.0\n9,532,603.9\n1,949,662.4\n5,652,947.5\n46,689,392.4\nFeb\n34,081,030.9\n911,544.4\n1,983,870.0\n36,976,445.3\n7,146.9\n340,314.0\n37,323,906.2\n151.1\n3,106,432.1\n105,237.1\n449,118.3\n279,727.9\n13,237,287.6\n2,608,075.1\n8,386,836.6\n65,496,772.2\nMar\n48,600,783.9\n1,434,256.6\n3,333,658.9\n53,368,699.4\n104,688.2\n515,299.7\n53,988,687.3\n0.0\n4,654,985.7\n95,705.0\n500,611.7\n361,061.7\n20,221,996.6\n2,860,196.6\n10,814,535.9\n93,497,780.6\nApr\n31,998.9\n843.3\n1,944.9\n34,787.2\n92.9\n242.8\n35,122.9\n0.0\n2,867.4\n67.4\n358.1\n222.7\n10,281.8\n2,510.2\n8,387.7\n59,818.1\nMay\n33,721.9\n910.6\n2,242.3\n36,874.7\n79.3\n349.9\n37,303.9\n0.0\n3,056.1\n50.9\n436.0\n4.6\n12,101.9\n2,114.7\n8,699.7\n63,767.8\nJun\n34,597.9\n958.5\n2,874.9\n38,431.3\n2.1\n589.2\n39,022.6\n0.0\n3,399.1\n99.8\n442.6\n13.2\n14,415.1\n2,541.3\n7,611.6\n67,545.3\nJul\n36,817.5\n1,137.8\n2,766.8\n40,722.1\n68.7\n438.6\n41,229.4\n0.0\n3,923.2\n99.9\n469.8\n12.0\n15,126.4\n2,342.9\n7,430.9\n70,634.5\nAug\n37,597.8\n872.1\n2,514.1\n40,984.0\n65.6\n532.9\n41,582.4\n0.0\n4,039.1\n109.9\n586.0\n12.5\n16,106.1\n2,767.9\n8,510.5\n73,714.5\nSep\n59,919.0\n2,378.4\n3,920.7\n66,218.0\n76.5\n579.2\n66,873.8\n0.0\n7,142.2\n491.4\n844.5\n51.1\n27,911.3\n4,853.4\n13,632.7\n121,800.5\nOct\n70,016.8\n1,657.3\n5,193.9\n76,867.9\n170.2\n621.4\n77,659.6\n0.0\n8,524.2\n429.7\n1,248.8\n16.1\n32,737.1\n6,380.1\n15,591.5\n142,587.2\nNov\n66,321.7\n1,869.1\n5,320.9\n73,511.7\n156.7\n677.1\n74,345.6\n0.0\n7,213.9\n409.3\n558.7\n42.7\n32,040.3\n6,685.9\n13,841.4\n135,137.8\nDec\n69,146.0\n1,993.7\n5,095.0\n76,234.8\n134.4\n716.3\n77,085.5\n0.0\n8,204.4\n233.0\n588.3\n112.5\n32,891.4\n6,555.3\n14,497.8\n140,168.2\n2025\nJan\n61,330.5\n1,857.1\n5,138.7\n68,326.3\n1,164.8\n7,498.8\n76,990.0\n57,444.7\n0.0\n11,140.1\n488.2\n591.7\n40.9\n31,241.2\n6,786.8\n12,384.1\n139,662.8\nFeb\n60,122.2\n1,926.9\n5,792.8\n67,841.9\n759.7\n6,860.8\n75,462.5\n56,543.4\n0.0\n10,832.8\n536.9\n948.1\n232.8\n32,118.9\n7,060.8\n11,635.0\n138,827.8\nMar\n64,498.3\n1,941.3\n5,810.8\n72,250.4\n248.3\n7,126.4\n79,625.1\n60,576.1\n0.0\n11,822.7\n539.3\n718.1\n52.6\n32,964.9\n7,859.2\n10,945.4\n144,527.3\nApr\n66,264.7\n2,136.9\n7,267.2\n75,668.8\n255.1\n10,251.2\n86,175.2\n62,807.1\n0.0\n11,917.1\n541.8\n870.9\n57.6\n33,473.5\n6,452.9\n13,242.4\n152,731.3\nSource: Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\n \n \n18 \n \n \n \n \n \nForeign\nOther \nContigent\nEnd of\nNotes\nClaims\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nNon Financial \nTOTAL\n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt Public Enterprises\nOther2\nMortgages\nGovernment\nPublic Enterprise\nOther Assets\nAssets\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nLoans in ZiG\nLoans in Foreign Currency \nTotal\n2022\nJan\n324.6\n \n3504.3\n8,506.5\n \n2680.3\n2,631.0\n \n-\n \n1,110.8\n \n2.4\n-\n \n1,487.3\n \n2,967.6\n \n-\n \n35,913.5\n \n6693.8\n14,008.7\n \n79,830.9\n \nFeb\n411.5\n \n4021.5\n9,763.6\n \n3069.7\n5,678.0\n \n-\n \n4,048.9\n \n1.6\n-\n \n1,465.4\n \n3,241.1\n \n-\n \n39,977.5\n \n4511.5\n13,964.4\n \n90,154.6\n \nMar\n354.3\n \n4413.6\n11,882.6\n \n3691.3\n4,932.3\n \n-\n \n5,235.0\n \n0.9\n-\n \n1,590.0\n \n3,888.3\n \n-\n \n42,741.3\n \n9086.6\n15,421.2\n \n103,237.4\n \nApr\n546.4\n \n3054.1\n15,585.8\n \n4857.7\n5,768.6\n \n-\n \n5,714.4\n \n0.2\n-\n \n1,861.4\n \n4,143.7\n \n-\n \n48,582.4\n \n9654.2\n16,999.2\n \n116,768.1\n \nMay\n639.5\n \n8326.7\n23,817.6\n \n4251.9\n16,001.6\n \n-\n \n6,150.9\n \n0.0\n-\n \n1,486.3\n \n8,474.8\n \n-\n \n74,864.0\n \n14793.9\n17,091.2\n \n175,898.5\n \nJun\n418.5\n \n8464.3\n32,497.6\n \n3807.5\n21,184.8\n \n-\n \n2,639.3\n \n0.0\n-\n \n1,340.0\n \n10,851.1\n \n-\n \n85,145.9\n \n18155.8\n35,128.1\n \n219,633.0\n \nJul\n700.4\n \n9914.6\n30,660.3\n \n4983.4\n24,902.9\n \n-\n \n4,077.6\n \n0.0\n-\n \n1,411.5\n \n13,722.1\n \n-\n \n98,066.0\n \n9998.6\n45,127.9\n \n243,565.1\n \nAug\n863.8\n \n14422.1\n33,703.2\n \n4483.0\n34,971.8\n \n-\n \n4,379.8\n \n0.0\n-\n \n2,106.6\n \n16,515.4\n \n-\n \n115,491.9\n \n8745.3\n45,694.0\n \n281,377.1\n \nSep\n1,086.8\n \n14998.2\n37,911.3\n \n7470.1\n45,094.8\n \n-\n \n8,440.8\n \n0.0\n-\n \n1,302.8\n \n17,996.8\n \n-\n \n129,242.7\n \n11630.7\n60,830.4\n \n336,005.2\n \nOct\n1,158.3\n \n14768.7\n44,296.5\n \n10013.7\n44,664.1\n \n-\n \n14,109.9\n \n0.0\n-\n \n1,142.4\n \n16,817.7\n \n-\n \n123,793.8\n \n30036.4\n47,678.2\n \n348,479.7\n \nNov\n1,449.3\n \n22456.9\n41,398.0\n \n9771.8\n41,317.6\n \n-\n \n17,572.6\n \n0.0\n-\n \n2,085.3\n \n16,785.8\n \n-\n \n136,029.9\n \n30694.0\n46,275.8\n \n365,836.9\n \nDec\n1,470.7\n \n23012.7\n48,533.8\n \n8913.7\n50,229.0\n \n-\n \n21,411.1\n \n0.0\n19,993.4\n \n2,176.2\n \n17,693.7\n \n-\n \n119,322.3\n \n39279.1\n69,102.5\n \n421,138.1\n \n2023\nJan\n2,402.7\n \n32405.1\n47,062.6\n \n8410.8\n50,364.6\n \n-\n \n17,976.2\n \n0.0\n23,668.5\n \n2,406.3\n \n18,311.0\n \n-\n \n132,757.4\n \n41367.4\n69,570.1\n \n446,702.8\n \nFeb\n234.9\n \n59685.4\n50,103.0\n \n9568.6\n62,701.4\n \n889.9\n \n24,809.7\n \n0.0\n26,667.1\n \n4,451.9\n \n21,629.1\n \n-\n \n146,798.4\n \n50093.6\n70,987.9\n \n528,620.9\n \nMar\n214.6\n \n72311.9\n57,399.6\n \n9196.8\n51,300.9\n \n-\n \n28,841.5\n \n0.0\n24,689.0\n \n5,503.9\n \n19,118.6\n \n-\n \n170,376.6\n \n54524.7\n84,489.1\n \n577,967.3\n \nApr\n184.1\n \n61341.6\n63,129.5\n \n16343.2\n61,444.0\n \n-\n \n28,727.0\n \n0.0\n28,119.0\n \n5,989.2\n \n27,619.9\n \n-\n \n205,412.2\n \n81442.9\n86,571.2\n \n666,323.9\n \nMay\n78.1\n \n125685.1\n100,808.7\n \n22707.0\n195,646.6\n \n-\n \n81,344.3\n \n0.0\n69,908.9\n \n6,246.8\n \n53,180.7\n \n-\n \n440,462.4\n \n103176.1\n116,103.7\n \n1,315,348.2\n \nJun\n176.6\n \n227001.8\n172,666.5\n \n25998.2\n452,772.6\n \n40,326.7\n \n115,193.3\n \n0.0\n196,310.3\n \n4,209.5\n \n121,677.5\n \n-\n \n870,075.1\n \n230604.4\n544,587.8\n \n3,001,600.3\n \nJul\n162.7\n \n132017.2\n220,995.0\n \n20797.2\n459,668.2\n \n32,010.8\n \n105,308.6\n \n0.0\n154,472.7\n \n13,777.8\n \n153,638.5\n \n-\n \n697,177.8\n \n209734.6\n612,937.8\n \n2,812,698.9\n \nAug\n611.0\n \n105296.6\n309,821.7\n \n55744.7\n475,838.3\n \n37,447.1\n \n102,495.2\n \n0.0\n153,578.2\n \n6,767.5\n \n135,193.3\n \n-\n \n758,439.2\n \n223114.4\n564,622.1\n \n2,928,969.2\n \nSep\n949.3\n \n193065.6\n339,269.2\n \n41680.1\n437,996.0\n \n58,554.5\n \n110,351.3\n \n0.0\n161,346.6\n \n4,522.1\n \n153,113.7\n \n-\n \n880,148.8\n \n290026.7\n565,616.4\n \n3,236,640.3\n \nOct\n403.8\n \n204713.4\n254,684.1\n \n187632.1\n440,150.3\n \n65,022.1\n \n97,046.1\n \n0.0\n176,111.9\n \n13,771.8\n \n173,523.5\n \n-\n \n829,479.5\n \n345029.3\n586,015.6\n \n3,373,583.5\n \nNov\n370.5\n \n222344.7\n387,213.2\n \n160896.0\n326,510.1\n \n50,688.3\n \n159,225.4\n \n0.0\n173,990.9\n \n28,127.2\n \n187,363.3\n \n-\n \n926,663.7\n \n395549.5\n595,811.6\n \n3,614,754.5\n \nDec\n403.7\n \n251968.8\n457,034.9\n \n261067.9\n345,348.0\n \n56,551.7\n \n185,131.1\n \n0.0\n166,902.0\n \n27,875.9\n \n222,503.1\n \n0.7\n \n973,788.6\n \n507890.9\n658,045.7\n \n4,114,512.9\n \n2024\nJan\n367.9\n \n368046.7\n524,020.9\n \n471915.0\n363,325.6\n \n40,412.9\n \n280,803.2\n \n0.0\n280,441.0\n \n45,935.9\n \n339,610.7\n \n-\n \n1,563,405.5\n \n649087.4\n742,734.0\n \n5,670,106.8\n \nFeb\n578.8\n \n637645.2\n797,581.2\n \n618074.6\n613,309.7\n \n24,680.4\n \n425,783.2\n \n0.0\n399,313.5\n \n67,900.2\n \n519,513.4\n \n-\n \n2,188,186.8\n \n904519.6\n937,957.6\n \n8,135,044.1\n \nMar\n356.6\n \n1026840.5\n1,171,941.4\n \n888362.3\n829,470.4\n \n-\n \n440,943.8\n \n0.0\n528,820.5\n \n103,276.3\n \n787,872.2\n \n-\n \n3,761,909.8\n \n1403556.4\n1,697,667.5\n \n12,641,017.5\n \nApr\n1.0\n \n564.4\n864.1\n \n693.0\n326.5\n \n67.2\n \n337.2\n \n0.0\n313.5\n \n-\n \n593.2\n \n212.7\n \n2,856.8\n \n420.1\n824.2\n \n8,074.0\n \nMay\n4.0\n \n639.2\n783.2\n \n772.6\n296.2\n \n109.6\n \n407.6\n \n0.0\n303.7\n \n-\n \n309.2\n \n19.8\n \n2,946.5\n \n712.1\n903.7\n \n8,207.5\n \nJun\n1.1\n \n520.3\n1,122.4\n \n718.7\n678.1\n \n110.9\n \n188.6\n \n0.0\n282.9\n \n-\n \n424.7\n \n20.4\n \n2,998.6\n \n858.8\n1,229.8\n \n9,155.3\n \nJul\n2.4\n \n681.0\n918.2\n \n640.3\n336.2\n \n99.8\n \n676.7\n \n0.0\n276.2\n \n5.0\n \n333.9\n \n20.5\n \n3,022.2\n \n1332.3\n1,250.3\n \n9,595.1\n \nAug\n1.1\n \n642.2\n853.3\n \n852.1\n428.1\n \n-\n \n764.6\n \n0.0\n246.2\n \n5.1\n \n373.1\n \n20.6\n \n3,042.5\n \n1811.8\n1,318.9\n \n10,359.6\n \nSep\n1.0\n \n1230.9\n1,985.1\n \n1121.2\n705.4\n \n-\n \n555.5\n \n0.0\n431.0\n \n34.5\n \n1,130.0\n \n37.0\n \n4,878.1\n \n2054.8\n2,298.6\n \n16,463.3\n \nOct\n13.1\n \n1166.2\n2,512.0\n \n1391.6\n769.7\n \n-\n \n745.1\n \n0.0\n502.2\n \n5.3\n \n1,380.9\n \n42.7\n \n5,751.9\n \n2214.8\n2,435.0\n \n18,930.4\n \nNov\n14.0\n \n918.9\n2,141.3\n \n1383.8\n649.7\n \n-\n \n602.6\n \n0.0\n367.6\n \n5.4\n \n1,293.8\n \n39.5\n \n4,997.5\n \n2566.9\n2,458.3\n \n17,439.1\n \nDec\n17.1\n \n1089.4\n2,633.9\n \n2306.6\n754.5\n \n-\n \n675.7\n \n0.0\n361.0\n \n-\n \n1,424.9\n \n35.4\n \n5,500.8\n \n2343.9\n2,593.3\n \n19,736.5\n \n2025\nJan\n13.1\n \n939.4\n2,348.5\n \n616.8\n637.3\n \n-\n \n1,028.5\n \n0.0\n-\n \n1,019.2\n \n1,294.7\n \n-\n \n356.6\n \n317.5\n \n5,353.2\n \n5,670.7\n \n199.4\n \n-\n \n3001.4\n3,282.1\n \n20,407.7\n \nFeb\n13.9\n \n980.7\n2,545.5\n \n628.6\n695.1\n \n-\n \n753.2\n \n0.0\n-\n \n997.8\n \n1,428.4\n \n-\n \n335.1\n \n535.1\n \n5,302.8\n \n5,837.9\n \n199.4\n \n-\n \n1754.4\n3,294.2\n \n19,464.2\n \nMar\n20.4\n \n1031.3\n2,349.0\n \n786.9\n517.9\n \n-\n \n844.9\n \n0.0\n-\n \n1,066.7\n \n1,604.4\n \n-\n \n284.5\n \n358.4\n \n5,601.2\n \n5,959.7\n \n121.0\n \n-\n \n1684.9\n3,466.0\n \n19,737.7\n \nApr\n17.8\n \n1038.4\n2,522.2\n \n766.4\n514.4\n \n-\n \n900.0\n \n0.0\n-\n \n1,084.2\n \n1,815.7\n \n-\n \n284.5\n \n322.9\n \n5,519.7\n \n5,842.6\n \n111.4\n \n-\n \n1736.6\n3,476.9\n \n20,111.3\n \nSource:Reserve Bank of Zimbabwe, 2025\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations, \n* Statistics are denominated in ZiG\nOther Institutional Units\nTABLE 6.1: BUILDING SOCIETIES -ASSETS\nZWG millions\nDebt Securities\nLoans and Advances\n \n \n19 \n \n \n \n \n \n \nDebt Securities\nForeign Liabilities\nCapital\nContigent \nOther\nTOTAL\nand\nLiabilities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nOf wich FCA\nRBZ\nOther Depository \nOther Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2022\nJan\n31,695.1\n5,983.6\n37,678.7\n0.0\n15.0\n37,693.7\n1,771.4\n10,991.6\n0.0\n373.7\n0.0\n18,063.5\n10,937.0\n79,830.9\nFeb\n37,132.1\n7,089.1\n44,221.1\n0.0\n15.0\n44,236.1\n1,703.8\n14,215.9\n0.0\n431.6\n0.0\n18,241.5\n11,325.7\n90,154.6\nMar\n44,187.4\n6,190.7\n50,378.1\n0.0\n15.0\n50,393.1\n1,742.3\n15,620.9\n0.0\n501.9\n0.0\n20,548.8\n14,430.4\n103,237.4\nApr\n52,979.2\n6,553.0\n59,532.2\n0.0\n15.0\n59,547.2\n1,536.3\n17,027.1\n0.0\n704.1\n0.0\n23,099.0\n14,854.4\n116,768.1\nMay\n86,411.7\n6,683.0\n93,094.7\n0.0\n15.0\n93,109.8\n1,477.7\n34,306.7\n0.0\n1,033.4\n0.0\n22,645.2\n23,325.7\n175,898.5\nJun\n98,008.7\n8,427.1\n106,435.9\n1,030.1\n15.0\n107,481.1\n1,496.4\n40,346.3\n0.0\n1,200.6\n0.0\n42,213.2\n26,895.5\n219,633.0\nJul\n111,583.1\n9,489.2\n121,072.3\n1,072.6\n15.0\n122,159.9\n1,225.0\n46,145.1\n0.0\n2,071.5\n0.0\n55,131.6\n16,832.0\n243,565.1\nAug\n133,071.2\n11,398.3\n144,469.5\n1,625.2\n15.0\n146,109.7\n1,382.6\n55,691.4\n0.0\n2,979.3\n0.0\n60,157.4\n15,056.7\n281,377.1\nSep\n143,338.6\n28,284.7\n171,623.3\n0.0\n15.0\n171,638.3\n1,339.9\n62,659.9\n0.0\n3,613.8\n0.0\n79,343.1\n17,410.1\n336,005.2\nOct\n122,775.3\n20,897.6\n143,672.9\n1,214.2\n15.0\n144,902.1\n1,707.3\n69,651.9\n0.0\n4,327.9\n0.0\n86,799.2\n41,091.4\n348,479.7\nNov\n130,892.9\n23,401.5\n154,294.3\n1,256.4\n13.0\n155,563.7\n1,855.1\n72,052.0\n0.0\n5,140.0\n0.0\n89,895.0\n41,331.2\n365,836.9\nDec\n149,207.3\n30,517.1\n179,724.4\n1,239.7\n103.8\n181,068.0\n1,933.7\n71,142.6\n0.0\n5,623.9\n0.0\n118,486.1\n42,883.8\n421,138.1\n2023\nJan\n161,506.8\n31,099.4\n192,606.2\n1,462.2\n121.0\n194,189.4\n3,214.4\n72,524.5\n0.0\n6,622.6\n0.0\n144,335.3\n25,816.5\n446,702.8\nFeb\n210,739.4\n27,500.2\n238,239.5\n1,153.4\n15.0\n239,407.9\n2,349.9\n84,724.5\n0.0\n7,548.9\n0.0\n155,007.6\n39,582.0\n528,620.9\nMar\n234,480.2\n38,088.7\n272,568.9\n158.0\n14.4\n272,741.2\n1,982.4\n89,883.4\n0.0\n7,502.7\n0.0\n172,499.0\n33,358.6\n577,967.3\nApr\n272,738.9\n35,889.2\n308,628.0\n400.0\n15.0\n309,043.1\n1,809.5\n116,418.1\n0.0\n8,456.9\n0.0\n183,262.3\n47,334.0\n666,323.9\nMay\n502,897.5\n36,680.3\n539,577.9\n553.7\n15.0\n540,146.6\n4,453.5\n289,636.2\n0.0\n8,115.4\n0.0\n372,206.8\n100,789.6\n1,315,348.2\nJun\n927,980.2\n66,404.1\n994,384.3\n0.0\n15.0\n994,399.3\n4,147.7\n631,544.2\n0.0\n10,873.2\n0.0\n1,117,122.1\n243,513.7\n3,001,600.3\nJul\n804,547.2\n73,047.1\n877,594.3\n15,753.2\n15.0\n893,362.6\n2,706.7\n611,248.0\n0.0\n14,397.5\n0.0\n1,093,858.2\n197,126.1\n2,812,698.9\nAug\n920,687.4\n90,856.7\n1,011,544.1\n15,752.3\n15.0\n1,027,311.4\n3,400.5\n617,162.9\n0.0\n12,854.9\n0.0\n1,064,286.3\n203,953.2\n2,928,969.2\nSep\n1,062,730.1\n75,413.9\n1,138,143.9\n0.0\n15.1\n1,138,159.0\n3,262.9\n652,356.6\n0.0\n16,101.5\n0.0\n1,117,548.2\n309,212.1\n3,236,640.3\nOct\n1,261,965.8\n64,282.0\n1,326,247.8\n0.0\n15.1\n1,326,262.9\n4,056.0\n467,416.6\n0.0\n16,785.2\n0.0\n1,188,499.5\n370,563.3\n3,373,583.5\nNov\n1,301,463.8\n82,076.9\n1,383,540.7\n79,497.1\n15.1\n1,463,052.8\n4,822.5\n525,114.1\n0.0\n16,180.1\n0.0\n1,209,652.3\n395,932.7\n3,614,754.5\nDec\n1,541,238.9\n142,705.5\n1,683,944.4\n79,497.1\n15.8\n1,763,457.2\n7,085.0\n516,718.0\n0.0\n8,736.3\n0.0\n1,308,419.6\n510,096.7\n4,114,512.9\n2024\nJan\n2,094,039.4\n96,896.2\n2,190,935.6\n79,481.7\n15.1\n2,270,432.3\n8,231.4\n904,697.2\n0.0\n11,028.7\n0.0\n1,826,995.6\n648,721.6\n5,670,106.8\n- \nFeb\n2,991,430.0\n192,203.3\n3,183,633.2\n162,422.1\n15.1\n3,346,070.4\n10,388.9\n1,314,901.6\n0.0\n5,723.7\n0.0\n2,630,626.9\n827,332.6\n8,135,044.1\nMar\n4,958,662.0\n186,068.5\n5,144,730.5\n162,239.8\n15.7\n5,306,986.0\n8,072.5\n1,880,803.3\n0.0\n6,134.8\n0.0\n4,286,906.8\n1,152,114.2\n12,641,017.5\nApr\n3,369.4\n36.3\n3,405.6\n65.0\n0.0\n3,470.7\n3.2\n1,258.6\n0.0\n0.0\n0.0\n1,955.9\n1,385.6\n8,074.0\nMay\n3,228.4\n75.2\n3,303.7\n0.0\n0.0\n3,303.7\n4.8\n1,366.6\n0.0\n0.0\n0.0\n2,496.7\n1,035.8\n8,207.5\nJun\n3,502.4\n97.1\n3,599.5\n0.0\n0.0\n3,599.5\n4.4\n1,414.8\n0.0\n8.0\n0.0\n2,990.2\n1,138.3\n9,155.3\nJul\n4,199.9\n128.4\n4,328.3\n0.0\n0.0\n4,328.3\n19.6\n919.3\n0.0\n13.2\n0.0\n3,111.6\n1,203.0\n9,595.1\nAug\n4,433.7\n172.4\n4,606.1\n0.0\n0.0\n4,606.1\n103.0\n850.7\n0.0\n16.1\n0.0\n3,370.3\n1,413.3\n10,359.6\nSep\n6,773.8\n475.3\n7,249.1\n22.6\n0.0\n7,271.7\n103.8\n1,559.3\n0.0\n16.3\n0.0\n5,486.0\n2,026.3\n16,463.3\nOct\n8,011.9\n795.7\n8,807.6\n86.9\n0.0\n8,894.5\n122.7\n1,462.9\n0.0\n61.4\n0.0\n6,003.1\n2,385.9\n18,930.4\nNov\n7,145.7\n872.8\n8,018.6\n45.8\n0.0\n8,064.4\n79.9\n1,227.6\n0.0\n10.0\n0.0\n6,043.8\n2,013.3\n17,439.1\nDec\n8,227.9\n1,293.1\n9,521.0\n71.2\n0.0\n9,592.2\n79.9\n1,306.5\n0.0\n267.8\n0.0\n5,923.9\n2,566.2\n19,736.5\n2025\nJan\n6114\n44.7\n2,350.2\n8,508.5\n0.0\n649.8\n9,158.3\n6,215.9\n0.0\n1,657.1\n0.0\n377.4\n0.0\n6,162.6\n0.0\n3,052.3\n20,407.7\nFeb\n6227\n51.3\n2,759.3\n9,037.6\n0.0\n625.5\n9,663.1\n6,512.8\n0.0\n1,679.8\n0.0\n206.6\n0.0\n6,294.5\n0.0\n1,620.1\n19,464.2\nMar\n7027\n54.9\n2,402.5\n9,484.9\n0.0\n588.2\n10,073.1\n7,085.6\n0.0\n1,498.3\n0.0\n83.0\n0.0\n6,364.1\n0.0\n1,719.2\n19,737.7\nApr\n7101\n74.1\n2,488.0\n9,663.4\n0.0\n588.3\n10,251.7\n7,186.8\n0.0\n1,498.3\n0.0\n99.1\n0.0\n6,375.2\n0.0\n1,887.1\n20,111.3\n- \nSource: Reserve Bank of Zimbabwe, 2025\n* Statistics are denominated in ZiG\nZWG millions\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\nAmounts Owing to\n \n \n20 \n \n \n \nEND OF\n2021\nJan\n23,978,167.35\n610,696.11\n267,400.20\n9,997,383.02\n66,046.86\n9,811,097.63\n7,641,910.42\n7,176,322.97\n4,807,054.16\n1,685,871.14\n10,092,630.46\n47,525.58\n76,182,105.93\nFeb\n24,581,772.22\n653,205.48\n285,830.69\n10,330,772.00\n65,231.37\n10,024,935.09\n7,949,013.06\n6,754,180.16\n5,018,015.84\n1,766,077.92\n10,905,948.39\n47,678.08\n78,382,660.29\nMar\n28,741,816.74\n737,140.48\n320,102.45\n10,604,119.56\n76,828.95\n10,517,753.11\n9,428,559.85\n8,179,722.05\n5,701,289.52\n1,822,019.95\n12,528,176.45\n33,915.52\n88,691,444.62\nApr\n31,859,146.34\n675,080.87\n347,881.04\n12,101,683.31\n205,760.21\n12,046,268.54\n10,788,214.39\n8,802,924.25\n6,559,969.13\n1,831,534.43\n14,724,055.16\n36,984.33\n99,979,501.99\nMay\n34,645,328.64\n713,518.48\n292,339.75\n13,012,546.01\n70,347.70\n10,160,360.67\n11,287,317.39\n8,318,871.52\n7,438,997.57\n1,831,015.12\n17,169,532.74\n10,879.19\n104,951,054.78\nJune\n36,527,537.18\n993,308.60\n357,200.72\n14,622,859.32\n69,173.21\n12,832,747.32\n12,635,012.94\n7,938,660.25\n9,226,503.32\n1,903,845.82\n19,986,300.49\n40,765.72\n117,133,914.90\nJul\n39,160,305.59\n1,280,558.68\n411,253.92\n16,562,010.52\n62,624.82\n13,792,648.82\n12,583,048.87\n8,567,557.82\n10,717,151.04\n1,820,088.91\n22,581,130.29\n13,756.78\n127,552,136.06\nAug\n41,218,056.27\n1,372,177.00\n431,669.10\n15,667,033.13\n66,504.42\n14,701,546.35\n13,446,660.94\n8,828,791.19\n11,500,069.82\n1,942,139.38\n27,299,685.30\n15,470.31\n136,489,803.20\nSep\n41,133,553.69\n1,649,182.17\n433,781.15\n16,702,896.26\n321,991.18\n15,183,417.18\n15,271,161.92\n9,065,558.07\n11,973,442.27\n2,145,369.49\n30,851,901.80\n19,863.23\n144,752,118.41\nOct\n48,491,758.71\n1,644,045.10\n477,340.76\n20,072,721.66\n337,273.51\n16,644,705.00\n17,906,042.38\n10,150,149.70\n8,544,940.34\n2,418,354.85\n35,641,091.07\n17,894.63\n162,346,317.71\nNov\n48,945,526.55\n1,598,923.06\n394,575.79\n20,998,777.03\n434,931.56\n16,621,266.44\n19,372,274.14\n10,802,887.56\n8,904,904.88\n2,882,220.06\n40,009,482.19\n18,275.25\n170,984,044.50\nDec\n54,028,791.83\n1,778,880.47\n556,046.62\n24,450,917.17\n570,685.08\n10,955,470.21\n22,025,406.62\n10,538,491.23\n14,437,886.10\n2,996,425.00\n43,047,088.39\n29,601.16\n185,415,689.87\n2022\nJan\n58,163,723.79\n2,180,551.47\n576,438.12\n26,576,317.70\n366,231.45\n8,887,534.55\n23,074,734.84\n11,840,524.88\n15,743,736.46\n3,516,259.69\n47,325,078.28\n29,564.68\n198,280,695.90\nFeb\n59,500,669.71\n2,289,260.81\n618,640.14\n27,925,301.74\n641,435.03\n9,370,886.67\n27,976,121.59\n13,027,815.12\n20,505,827.49\n3,747,288.27\n51,007,737.28\n19,692.27\n216,630,676.11\nMar\n66,551,117.83\n2,538,377.08\n656,335.46\n29,688,979.74\n660,584.49\n10,903,917.10\n32,629,411.62\n15,688,496.07\n38,075,386.72\n4,471,441.45\n58,500,950.68\n802,168.34\n261,167,166.58\nApr\n74,441,781.12\n4,219,500.30\n1,441,218.07\n33,136,441.44\n673,885.92\n13,157,284.33\n34,426,878.27\n18,261,710.29\n39,043,359.76\n5,001,307.17\n63,176,517.86\n40,089.64\n287,019,974.16\nMay\n101,753,100.08\n5,120,524.84\n3,358,419.20\n50,514,059.33\n760,401.23\n12,433,390.50\n42,057,624.50\n28,724,818.35\n48,088,662.73\n6,286,840.17\n76,655,600.16\n34,456.76\n375,787,897.73\nJune\n118,753,588.99\n6,209,658.53\n2,293,665.50\n64,942,949.99\n869,273.19\n23,897,585.00\n58,442,367.18\n37,195,284.13\n62,467,707.84\n9,414,912.48\n96,536,183.00\n43,204.15\n481,066,380.00\nJuly\n133,779,414.05\n7,610,614.14\n3,684,426.07\n77,836,080.20\n938,367.98\n30,537,997.95\n69,408,788.72\n46,181,587.44\n72,642,938.51\n10,449,582.51\n111,094,524.49\n46,145.73\n564,210,467.80\nAug\n165,210,571.41\n10,163,176.69\n2,624,492.88\n93,899,073.61\n1,266,729.80\n39,544,245.28\n87,691,102.84\n58,330,938.20\n97,552,420.83\n10,450,507.09\n131,625,765.29\n154,457.59\n698,513,481.52\nSept\n201,167,878.53\n11,330,918.80\n5,038,300.39\n110,956,484.03\n1,297,748.50\n44,492,682.69\n101,816,518.33\n92,708,096.37\n88,483,494.42\n11,685,667.87\n152,934,863.30\n276,752.34\n822,189,405.58\nOct\n223,506,677.74\n12,026,669.50\n4,229,873.27\n113,451,159.15\n1,302,041.27\n46,399,745.17\n110,333,025.84\n79,715,558.05\n89,501,330.53\n9,611,322.30\n175,816,703.56\n178,607.79\n866,072,714.17\nNov\n232,953,535.08\n16,431,625.92\n11,131,139.79\n118,284,970.84\n1,687,527.03\n42,192,397.26\n124,017,335.43\n75,874,234.73\n94,636,395.62\n12,440,947.33\n207,085,835.54\n197,473.26\n936,933,417.83\nDec\n253,185,165.18\n19,199,455.89\n10,466,455.02\n135,037,685.07\n1,551,994.21\n70,805,600.30\n136,576,579.60\n94,115,141.69\n123,404,532.09\n12,079,018.68\n235,371,108.06\n173,717.07\n1,091,966,452.83\n2023\nJan\n299,237,745.06\n22,096,826.86\n11,001,194.94\n154,399,125.00\n2,073,794.79\n72,677,263.10\n165,905,496.48\n124,259,994.28\n140,303,195.37\n16,560,714.33\n290,446,774.71\n286,968.13\n1,299,249,093.07\nFeb\n333,081,520.85\n26,349,752.54\n12,607,980.80\n168,969,321.35\n3,232,834.66\n79,874,665.83\n198,087,465.13\n146,996,948.44\n150,078,778.01\n18,960,512.94\n335,439,856.49\n415,659.47\n1,474,095,296.50\nMar\n411,138,419.07\n28,795,432.59\n14,081,946.71\n184,250,094.21\n3,256,927.22\n101,507,881.47\n232,125,042.77\n168,374,643.67\n159,301,093.17\n20,786,447.06\n364,183,808.40\n229,595.47\n1,688,031,331.80\nApr\n411,638,425.58\n28,865,765.48\n14,081,964.65\n184,833,219.66\n3,256,927.22\n101,507,881.47\n235,076,590.94\n168,374,757.64\n159,310,920.52\n20,785,827.18\n365,366,760.50\n229,595.47\n1,693,328,636.32\nMay\n726,348,772.35\n78,828,771.47\n44,800,380.00\n409,618,602.87\n6,584,930.07\n226,467,642.46\n583,387,051.30\n480,909,418.46\n381,628,891.53\n62,593,512.49\n757,858,742.61\n267,815.39\n3,759,294,531.01\nJun\n1,385,380,571.66\n173,918,051.54\n114,682,839.69\n1,119,448,698.19\n23,922,347.39\n571,712,604.71\n1,309,324,347.94\n1,111,326,640.14\n808,734,970.18\n129,722,475.73\n1,754,989,459.01\n444,788.00\n8,503,607,794.19\nJul\n1,088,372,491.59\n132,529,236.30\n101,023,084.21\n843,805,813.72\n21,291,030.44\n370,922,779.80\n1,037,949,287.43\n824,419,061.99\n646,244,001.65\n87,491,103.55\n1,451,125,105.58\n356,098.86\n6,605,529,095.13\nAug\n1,104,126,310.09\n133,512,317.72\n105,426,999.17\n683,402,044.93\n21,345,225.83\n393,145,008.06\n1,077,529,295.35\n824,970,068.56\n716,638,286.73\n85,309,683.35\n1,543,461,599.29\n382,505.35\n6,689,249,344.42\nSep\n1,336,413,273.40\n158,136,405.58\n121,080,865.90\n752,199,791.20\n28,592,532.70\n465,470,715.50\n1,334,020,478.90\n1,012,670,250.70\n799,826,458.00\n102,238,002.60\n1,857,297,850.00\n586,991.00\n7,968,533,615.50\nOct\n1,461,090,986.48\n163,948,853.90\n120,153,516.74\n935,064,277.07\n24,681,683.18\n520,361,008.99\n1,381,206,351.23\n1,092,469,043.71\n859,550,943.15\n118,799,556.91\n2,126,512,435.00\n627,911.82\n8,804,466,568.16\nNov\n1,397,804,072.50\n171,337,302.47\n117,526,650.42\n1,017,731,862.93\n26,161,720.05\n535,490,380.99\n1,401,587,612.93\n992,371,783.17\n885,248,702.84\n129,500,343.70\n2,255,158,373.70\n621,795.60\n8,930,540,600.93\nDec\n1,360,816,417.35\n179,675,138.50\n121,167,248.12\n1,077,783,652.10\n46,946,926.90\n551,786,675.29\n1,483,619,833.87\n1,207,471,368.52\n863,309,236.72\n136,388,007.82\n2,458,239,172.85\n644,093.68\n9,487,847,771.72\n2024\nJan\n2,212,746,050.25\n265,031,131.44\n214,923,355.91\n1,663,240,228.23\n110,086,710.61\n875,780,504.12\n2,505,473,968.40\n1,910,394,449.61\n1,256,413,922.88\n237,647,459.79\n3,945,256,597.25\n1,037,343.55\n15,198,031,722.04\nFeb\n3,435,102,730.48\n426,536,836.74\n249,129,096.22\n2,383,796,904.38\n171,219,221.62\n1,264,658,167.28\n3,631,856,467.58\n2,844,642,895.76\n2,043,483,472.01\n352,320,643.54\n5,491,307,643.33\n1,518,795.13\n22,295,572,874.08\nMar\n4,949,814,064.70\n642,860,845.90\n452,924,544.60\n3,642,287,181.90\n251,866,635.20\n1,943,457,910.80\n5,387,453,048.30\n3,991,233,867.50\n3,178,219,935.60\n543,942,248.60\n8,278,044,179.10\n2,267,159.00\n33,264,371,621.30\n*Apr\n2,882,347.04\n371,595.02\n188,567.12\n3,081,028.88\n188,277.01\n1,174,215.26\n3,077,908.79\n2,281,799.96\n1,782,566.59\n399,652.20\n4,922,516.84\n1,655.37\n20,352,130.08\n*May\n3,549,471.22\n448,072.03\n196,408.62\n3,013,508.26\n181,989.39\n1,239,894.94\n3,619,936.03\n2,302,326.81\n1,793,582.31\n494,669.10\n5,661,322.35\n5,002.25\n22,513,367.89\n*Jun\n3,286,172.53\n496,282.55\n213,057.33\n3,210,670.42\n230,521.55\n1,418,401.02\n3,457,122.91\n1,954,111.98\n1,946,800.04\n567,017.72\n6,019,426.96\n1,771.40\n22,801,356.42\n*Jul\n3,487,382.60\n511,490.74\n202,186.14\n3,350,580.05\n163,104.44\n1,304,409.07\n3,570,513.33\n2,117,767.16\n2,347,954.24\n568,049.13\n6,348,713.28\n2,029.48\n23,985,090.63\n*Aug\n3,858,128.45\n496,920.13\n197,595.11\n3,160,166.09\n163,179.56\n1,353,221.18\n3,891,826.53\n2,259,346.53\n2,064,398.05\n355,517.61\n7,019,997.29\n1,626.53\n24,821,923.05\n*Sep\n6,672,075.13\n1,240,260.16\n365,299.01\n5,024,076.96\n274,548.64\n2,326,667.49\n6,387,958.08\n4,331,429.08\n3,418,807.30\n640,082.06\n11,884,283.83\n2,603.24\n42,568,090.98\n*Oct\n7,858,559.49\n1,469,928.32\n481,828.82\n5,465,308.96\n320,115.06\n2,603,522.82\n7,340,600.92\n5,249,584.59\n3,667,687.19\n726,009.18\n13,568,052.49\n3,070.10\n48,754,267.95\n*Nov\n7,180,366.66\n1,328,085.57\n428,978.78\n5,025,733.67\n284,239.89\n2,457,448.49\n6,759,835.67\n4,209,879.63\n3,928,182.05\n680,905.22\n13,074,981.78\n2,309.39\n45,360,946.80\n*Dec\n7,297,552.82\n1,289,292.14\n385,874.99\n4,973,856.63\n262,219.72\n2,513,526.60\n6,746,914.01\n4,827,984.53\n3,694,327.88\n706,439.67\n13,280,443.54\n2,262.81\n45,980,695.34\n2025\n*Jan\n7,678,298.65\n1,196,038.23\n409,696.02\n5,047,238.20\n306,809.73\n2,664,917.36\n6,434,242.43\n4,757,437.66\n4,086,970.99\n769,886.02\n13,569,651.19\n1,922.01\n46,923,108.48\n*Feb\n8,299,274.74\n1,201,875.78\n399,492.64\n4,830,538.61\n300,587.07\n2,770,286.66\n6,503,215.41\n4,803,609.78\n4,292,425.79\n746,491.37\n13,140,132.51\n1,960.50\n47,289,890.85\n*Mar\n8,326,930.91\n1,244,718.81\n402,707.95\n5,041,144.58\n317,777.54\n2,491,912.41\n6,543,198.90\n4,375,136.07\n5,262,596.60\n744,227.95\n13,809,533.31\n1,950.08\n48,561,835.10\n*Apr\n8,907,112.83\n1,321,160.24\n510,175.35\n5,587,682.42\n301,612.10\n2,488,206.19\n7,065,026.69\n5,118,059.86\n5,500,479.51\n721,927.40\n14,585,410.50\n2,121.10\n52,108,974.19\nSource: Reserve Bank of Zimbabwe, 2025\n1 Including the only merchant bank still in operation.\n*Statistics are denominated in ZiG\n TABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES\nZWG ('000)\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL & \nINVESTMENTS\nFINANCIAL \nORGANISATIONS\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\n \n \n21 \n \n \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS\nORGANISATIONS\n1,000.00\n2021\nJan\n12,195,945.09\n4,725,946.72\n13,067,828.56\n32,314,625.60\n6,804,952.50\n19,638,789.03\n27,577,248.19\n13,566,042.79\n60,234,250.60\n3,993,814.34\n22,146,327.53\n314,523.37\n216,580,294.30\nFeb\n12,215,925.38\n4,335,293.23\n13,268,343.18\n31,820,079.48\n6,327,338.72\n19,480,197.75\n27,088,789.92\n11,873,767.24\n62,647,881.89\n3,583,509.91\n23,594,651.47\n323,276.77\n216,559,054.94\nMar\n12,086,596.94\n5,009,117.91\n15,457,881.64\n33,668,114.17\n7,879,623.60\n17,019,379.33\n29,927,193.06\n12,664,366.44\n68,761,992.24\n4,513,060.17\n25,352,486.13\n371,874.60\n232,711,686.23\nApr\n14,293,712.79\n6,264,137.34\n17,624,611.65\n35,860,252.53\n7,955,587.69\n18,411,151.82\n32,890,743.11\n11,445,151.89\n81,410,668.87\n4,248,558.67\n27,176,673.47\n411,001.01\n257,992,250.84\nMay\n14,731,869.47\n5,542,211.64\n19,231,383.69\n37,283,237.74\n7,903,622.65\n19,756,317.30\n33,027,214.88\n22,796,168.05\n84,596,653.48\n4,504,355.67\n28,445,264.85\n378,185.06\n278,196,484.46\nJun\n15,628,935.51\n6,154,316.52\n20,722,752.27\n39,604,431.48\n7,861,552.67\n21,455,061.82\n36,502,664.43\n23,449,074.86\n92,196,178.85\n4,756,434.86\n29,731,644.54\n415,508.64\n298,478,556.45\nJul\n14,899,561.10\n6,742,913.66\n25,082,739.85\n39,720,936.02\n9,580,503.84\n24,570,675.98\n38,875,306.10\n31,312,003.24\n94,151,108.53\n5,021,547.73\n32,324,374.53\n568,402.62\n322,850,073.17\nAug\n14,056,945.25\n6,611,127.05\n26,897,316.63\n39,624,666.33\n9,778,338.93\n27,046,620.96\n40,693,944.15\n26,504,554.01\n84,766,848.12\n4,915,399.24\n33,960,935.12\n645,902.41\n315,502,598.18\nSep\n14,777,285.47\n6,264,492.08\n27,413,062.10\n45,375,795.43\n10,337,697.22\n25,786,388.31\n43,113,093.01\n30,700,846.40\n95,985,614.84\n5,605,871.74\n37,606,703.52\n687,817.24\n343,654,667.37\nOct\n14,923,669.66\n8,437,829.51\n26,583,413.65\n47,841,912.79\n11,477,927.22\n29,796,762.93\n51,676,553.79\n49,115,499.00\n111,611,484.23\n5,940,819.15\n35,043,857.03\n618,831.05\n393,068,559.99\nNov\n14,147,912.21\n7,546,852.86\n27,174,334.28\n44,238,573.41\n11,949,923.74\n27,199,271.57\n52,401,389.32\n49,817,772.34\n115,576,831.01\n5,911,967.57\n37,770,843.26\n751,068.72\n394,486,740.29\nDec\n16,522,401.63\n9,204,283.51\n26,835,545.00\n47,381,404.66\n15,303,976.78\n43,092,763.28\n57,822,911.04\n61,555,101.22\n122,091,550.61\n6,093,367.35\n40,046,246.70\n1,319,573.65\n447,269,125.42\n2022\nJan\n17,399,268.45\n9,928,816.10\n28,146,847.17\n46,285,881.10\n15,060,177.49\n34,087,881.41\n60,888,346.70\n38,232,883.69\n135,579,116.46\n6,454,492.58\n32,504,960.47\n745,336.00\n425,314,007.61\nFeb\n20,260,983.50\n9,641,974.72\n32,159,803.23\n50,825,844.50\n15,235,028.54\n35,068,548.54\n49,157,612.17\n43,769,514.96\n146,423,512.16\n7,768,846.48\n36,257,363.98\n724,522.36\n447,293,555.15\nMar\n22,638,817.86\n11,683,937.35\n34,271,841.32\n61,002,811.60\n20,352,647.27\n34,501,628.57\n57,839,997.29\n60,678,395.30\n173,444,002.60\n9,467,563.85\n43,160,654.72\n970,393.82\n530,012,691.56\nApr\n26,926,844.72\n12,304,918.39\n34,924,202.54\n67,201,357.79\n21,444,798.07\n38,606,872.21\n61,303,321.13\n64,980,792.31\n216,612,532.66\n10,455,473.89\n45,951,692.03\n939,217.87\n601,652,023.61\nMay\n39,564,579.03\n21,954,770.23\n42,666,739.38\n108,620,498.72\n28,757,840.78\n54,108,110.44\n88,717,845.18\n107,568,244.73\n291,739,801.56\n14,310,137.61\n65,853,453.06\n1,190,747.91\n865,052,768.60\nJun\n45,956,287.64\n26,686,177.09\n47,155,850.80\n128,881,143.56\n23,783,755.16\n60,238,449.95\n105,247,922.50\n120,389,795.99\n326,034,986.61\n17,068,663.50\n108,828,797.15\n1,325,268.69\n1,011,597,098.65\nJul\n40,699,352.12\n28,329,526.03\n45,417,841.09\n128,847,329.07\n21,958,796.02\n62,326,844.37\n103,536,398.88\n112,642,685.48\n401,574,353.33\n17,902,000.20\n112,555,899.49\n1,117,408.25\n1,076,908,434.33\nAug\n68,438,409.63\n39,107,020.53\n53,616,955.67\n171,501,037.83\n25,370,674.58\n68,913,237.19\n162,326,617.25\n137,243,494.58\n538,409,018.36\n23,523,309.06\n146,121,882.24\n1,197,164.45\n1,435,768,821.37\nSep\n81,174,128.75\n51,501,554.76\n58,104,791.47\n204,056,688.73\n63,246,197.07\n174,562,749.46\n172,521,502.90\n138,936,277.91\n626,755,883.05\n25,607,188.82\n182,077,675.02\n11,177,650.78\n1,789,722,288.71\nOct\n83,201,043.64\n63,984,990.31\n67,031,137.91\n207,367,773.63\n40,617,325.27\n155,873,800.58\n179,051,392.63\n157,121,308.46\n575,293,016.53\n27,092,268.91\n201,852,712.89\n3,193,614.07\n1,761,680,384.82\nNov\n88,153,064.47\n61,978,896.61\n78,744,676.95\n236,152,455.10\n39,915,042.93\n100,872,718.26\n214,281,243.03\n200,240,592.45\n606,580,960.90\n32,903,876.70\n233,604,874.73\n119,223.24\n1,893,547,625.35\nDec\n106,799,918.36\n60,886,327.29\n73,518,960.29\n260,923,049.61\n48,959,835.11\n122,528,998.69\n242,741,914.11\n171,982,170.05\n747,151,447.16\n37,453,518.81\n270,164,633.75\n10,753,958.63\n2,153,864,731.86\n2023\nJan\n114,820,700.76\n79,460,381.87\n82,589,902.30\n305,204,829.91\n45,118,619.63\n135,072,311.14\n263,222,364.10\n223,632,204.71\n896,980,184.31\n37,534,721.96\n288,326,194.21\n7,916,696.92\n2,479,879,111.81\nFeb\n118,375,609.69\n85,995,682.64\n93,761,236.16\n312,626,341.50\n56,688,432.58\n147,245,179.36\n266,610,300.93\n273,709,371.16\n938,437,753.70\n39,909,193.60\n292,841,727.23\n6,842,518.78\n2,633,043,347.35\nMar\n119,963,933.20\n85,731,698.36\n100,697,025.58\n322,453,842.97\n45,619,349.07\n148,455,496.20\n286,712,763.58\n273,572,570.94\n1,064,798,433.60\n44,685,590.57\n330,031,150.72\n14,190,575.51\n2,836,912,430.30\nApr\n131,146,380.30\n89,322,733.64\n99,723,066.84\n324,249,300.08\n45,619,349.07\n149,245,957.86\n289,670,780.41\n273,578,020.75\n1,072,456,655.25\n44,926,335.64\n331,068,417.40\n14,190,575.51\n2,865,197,572.73\nMay\n269,460,363.15\n210,867,012.29\n216,906,304.04\n631,589,937.93\n113,357,505.65\n362,294,051.43\n581,761,350.37\n545,536,680.63\n2,504,454,969.80\n102,648,366.24\n702,960,786.40\n28,985,518.44\n6,270,822,846.38\nJun\n581,642,309.76\n428,772,683.41\n410,699,487.74\n1,366,510,052.55\n227,784,986.62\n700,617,673.80\n1,094,382,949.63\n1,185,026,806.70\n5,283,380,622.25\n199,474,750.17\n1,564,762,675.09\n40,673,167.41\n13,083,728,165.12\nJul\n535,377,934.43\n436,808,429.52\n413,150,823.99\n1,394,747,348.19\n206,866,966.84\n711,462,740.79\n1,157,802,106.76\n982,808,623.76\n4,533,520,705.60\n184,470,180.50\n1,464,856,207.23\n37,277,944.87\n12,059,150,012.48\nAug\n537,439,303.14\n422,479,784.07\n413,226,172.28\n1,343,458,227.81\n285,743,813.63\n662,607,567.90\n1,197,898,912.17\n1,004,826,660.33\n4,639,684,933.86\n209,521,849.57\n1,553,047,811.00\n38,718,344.86\n12,308,653,380.62\nSep\n632,283,427.70\n491,562,911.40\n426,060,663.50\n1,510,241,869.90\n296,604,785.00\n789,587,698.10\n1,300,914,518.50\n1,250,791,974.40\n5,214,851,978.10\n217,382,274.50\n1,781,106,637.90\n43,583,660.40\n13,954,972,399.20\nOct\n721,203,425.90\n541,011,315.61\n554,440,420.11\n1,657,817,920.26\n309,251,239.26\n841,367,968.72\n1,438,592,170.70\n1,187,082,973.91\n5,659,995,585.31\n260,248,908.48\n1,906,411,104.87\n49,647,602.04\n15,127,070,635.17\nNov\n703,080,882.81\n566,993,243.11\n532,803,998.34\n1,698,467,822.71\n346,291,934.28\n269,835,136.30\n1,554,832,195.31\n1,195,274,632.93\n6,063,945,342.98\n293,942,495.06\n2,031,657,547.49\n46,866,707.11\n15,885,967,935.90\nDec\n605,605,541.75\n423,493,370.41\n730,799,100.82\n1,549,938,533.11\n553,801,063.21\n767,650,016.19\n1,254,233,648.36\n1,348,969,145.10\n6,689,372,974.36\n247,647,472.27\n2,091,666,965.12\n53,713,528.87\n16,882,080,093.66\n2024\nJan\n833,932,128.83\n694,796,940.75\n1,029,474,123.23\n2,082,328,111.88\n884,819,488.86\n2,004,818,592.25\n1,699,026,894.47\n1,837,959,924.52\n12,124,252,579.26\n323,794,777.38\n3,044,604,553.80\n71,184,543.75\n26,630,992,658.97\nFeb\n1,156,065,718.20\n1,037,783,187.53\n1,369,731,749.12\n3,170,746,459.37\n114,038,016.39\n3,174,169,477.50\n2,227,190,946.76\n2,855,301,054.35\n15,834,462,125.05\n552,622,448.45\n4,294,792,965.31\n89,063,348.63\n36,904,967,496.65\nMar\n1,783,340,807.00\n1,442,504,457.60\n2,116,410,516.40\n4,588,105,383.90\n1,753,052,451.70\n4,712,657,212.60\n3,465,873,456.30\n3,573,833,122.50\n20,373,593,827.70\n1,006,777,059.10\n8,454,899,690.30\n100,278,506.80\n53,371,326,491.90\n*Apr\n1,476,289.07\n893,193.94\n1,388,298.43\n4,283,881.29\n1,092,218.87\n2,578,995.23\n2,513,192.87\n2,626,884.44\n11,782,151.57\n511,608.90\n5,775,024.95\n62,998.90\n34,984,738.48\n*May \n1,608,650.70\n1,037,123.00\n986,367.13\n3,197,388.56\n1,234,670.10\n3,669,306.62\n2,777,961.02\n2,424,631.17\n13,413,072.92\n726,100.95\n5,909,740.37\n55,506.53\n37,040,519.06\n*Jun\n1,578,119.27\n1,011,831.06\n1,759,648.05\n3,190,728.10\n1,134,620.40\n3,473,307.05\n2,999,644.43\n3,196,350.73\n15,181,074.61\n630,237.37\n5,302,910.12\n65,954.20\n39,524,425.40\n*Jul\n1,709,191.73\n1,060,814.63\n1,786,754.78\n4,244,435.10\n1,695,144.92\n3,842,095.49\n2,685,658.39\n3,860,697.95\n15,154,833.77\n494,408.07\n5,163,064.26\n152,575.18\n41,849,674.27\n*Aug\n1,881,831.48\n1,096,949.95\n1,756,800.10\n4,115,344.75\n1,560,883.79\n5,160,947.59\n3,104,912.00\n2,628,465.51\n14,680,525.46\n510,741.77\n4,692,301.87\n147,285.45\n41,336,989.72\n*Sep\n2,676,045.30\n2,231,428.03\n3,076,033.40\n6,657,466.11\n2,618,571.09\n6,677,406.59\n4,328,506.20\n3,749,838.40\n26,389,976.50\n867,911.20\n8,373,719.22\n219,988.31\n67,866,890.36\n*Oct\n3,485,504.59\n2,567,255.56\n3,535,607.03\n7,474,589.94\n3,299,698.46\n7,968,221.02\n5,044,419.36\n5,097,867.03\n29,458,757.35\n1,018,065.78\n9,462,752.69\n220,427.14\n78,633,165.96\n*Nov\n3,092,857.19\n2,583,575.64\n3,658,337.22\n6,311,484.89\n3,319,494.63\n7,425,250.57\n6,381,558.42\n4,761,639.77\n27,173,979.25\n1,133,673.74\n8,782,149.64\n200,228.74\n74,824,229.70\n*Dec\n3,246,075.75\n3,000,089.39\n3,491,754.69\n6,900,913.48\n3,547,897.26\n7,345,227.12\n6,716,997.93\n4,549,007.97\n27,260,521.53\n1,099,879.74\n10,022,447.18\n355,894.47\n77,536,706.51\n2025\n*Jan\n2,906,778.30\n3,263,210.15\n3,335,010.28\n6,226,024.85\n3,652,381.28\n8,401,231.92\n6,022,841.93\n4,820,773.49\n27,794,296.00\n1,020,418.08\n9,522,377.98\n214,322.39\n77,179,666.65\n*Feb\n3,148,260.00\n2,765,476.21\n2,386,768.37\n6,142,552.78\n3,733,009.01\n8,301,324.64\n5,391,986.88\n4,799,925.63\n27,396,588.33\n1,120,196.78\n10,349,018.64\n257,727.50\n75,792,834.75\n*Mar\n2,931,379.17\n2,536,384.45\n2,998,500.17\n7,205,270.81\n4,098,816.70\n9,412,388.16\n5,090,011.12\n5,298,903.78\n30,409,375.81\n1,367,930.91\n10,495,733.30\n291,454.26\n82,136,148.64\n*Apr\n3,386,026.90\n2,914,075.14\n3,289,407.24\n8,086,383.88\n4,171,684.56\n10,519,094.01\n5,681,605.01\n5,683,058.56\n29,468,736.33\n1,483,286.46\n12,710,551.63\n251,262.54\n87,645,172.24\nSource: Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \nZWG ('000)\n \n \n \n22 \n \n \nMinimum\nMaximum\nMinimum\nMaximum\n2021\nJan\n32.65\n55.57\n24.77\n24.77\nFeb\n36.67\n52.01\n21.36\n21.36\nMar\n35.83\n55.77\n22.61\n22.61\nApr\n35.22\n57.08\n22.59\n22.59\nMay\n34.84\n56.21\n21.76\n21.76\nJun\n36.25\n57.04\n22.46\n22.46\nJul\n36.56\n57.00\n21.66\n21.66\nAug\n41.06\n57.39\n39.65\n39.65\nSep\n40.61\n58.44\n39.50\n39.50\nOct\n41.86\n58.68\n45.81\n45.81\nNov\n39.13\n58.74\n38.10\n38.10\nDec\n39.34\n58.65\n37.94\n37.94\n2022\nJan\n39.32\n57.26\n39.62\n39.62\nFeb\n40.55\n57.28\n64.02\n64.02\nMar\n40.74\n57.83\n43.88\n43.88\nApr\n38.15\n59.59\n45.56\n45.56\nMay\n38.01\n59.70\n47.25\n47.25\nJun\n38.45\n60.09\n48.25\n48.25\nJul\n82.75\n123.71\n165.45\n165.45\nAug\n88.46\n123.46\n155.96\n155.96\nSep\n98.07\n123.64\n158.46\n158.46\nOct\n99.37\n127.72\n115.26\n115.26\nNov\n99.03\n127.58\n110.97\n110.97\nDec\n99.02\n125.64\n110.83\n110.83\n2023\nJan\n90.05\n125.64\n116.03\n116.03\nFeb\n60.12\n125.64\n80.88\n80.88\nMar\n74.35\n110.30\n81.46\n81.46\nApr\n74.48\n105.75\n86.96\n86.96\nMay\n77.86\n107.41\n83.61\n83.61\nJun\n76.33\n103.85\n92.64\n92.64\nJul\n77.82\n103.56\n94.80\n94.80\nAug\n77.63\n102.79\n93.18\n93.18\nSep\n76.49\n100.20\n92.69\n92.69\nOct\n71.72\n102.10\n92.43\n92.43\nNov\n70.15\n101.53\n93.15\n93.15\nDec\n69.02\n101.71\n93.77\n93.77\n2024\nJan\n70.18\n100.81\n95.24\n95.24\nFeb\n76.06\n99.20\n93.76\n166.71\nMar\n73.43\n98.46\n91.40\n165.42\n*Apr\n25.91\n32.10\n24.29\n32.52\n*May\n25.17\n31.72\n24.52\n32.65\n*Jun\n24.89\n31.19\n24.46\n33.04\n*Jul\n24.69\n30.62\n24.44\n32.21\n*Aug\n24.42\n30.51\n24.15\n32.43\n*Sep\n24.27\n30.31\n23.92\n32.76\n*Oct\n38.49\n45.17\n36.80\n45.43\n*Nov\n39.25\n45.63\n34.29\n43.88\n*Dec\n41.03\n46.47\n39.91\n45.64\n2025\n*Jan\n41.82\n47.35\n40.13\n46.08\n*Feb\n43.00\n48.60\n40.45\n45.68\n*Mar\n42.33\n47.97\n40.42\n46.11\n*Apr\n42.16\n47.82\n40.43\n46.21\nSource: Reserve Bank of Zimbabwe, 2025\n*Lending rates are for ZiG loans\nTABLE 8.1: COMMECIAL BANKS LENDING RATES (percent per annum)\nIndividuals \nCorporates\nEnd of\nWeighted Lending Rates\n \n \n23 \n \n \n \nMinimum\nMaximum\nMinimum\nMaximum\n2022\nJan\n3.66\n5.76\n13.16\n16.95\nFeb\n3.72\n6.29\n16.68\n16.84\nMar\n3.83\n5.94\n14.83\n16.95\nApr\n4.22\n6.35\n16.78\n18.53\nMay\n4.21\n6.35\n16.44\n18.42\nJun\n4.21\n6.35\n16.61\n19.05\nJul\n21.06\n23.44\n50.14\n54.58\nAug\n20.09\n20.25\n52.97\n57.29\nSep\n20.09\n20.25\n57.25\n61.08\nOct\n20.09\n20.25\n54.06\n60.55\nNov\n20.38\n20.53\n56.69\n60.87\nDec\n18.03\n18.03\n55.32\n60.08\n2023\nJan\n18.03\n18.03\n55.32\n60.08\nFeb\n18.03\n18.03\n55.32\n60.08\nMar\n34.01\n35.26\n68.06\n73.39\nApr\n36.00\n36.50\n63.06\n71.72\nMay\n35.33\n35.88\n61.31\n69.61\nJun\n35.33\n33.60\n59.18\n65.00\nJul\n34.29\n35.29\n61.67\n69.44\nAug\n34.29\n35.60\n57.67\n70.35\nSep\n34.29\n35.60\n61.67\n69.33\nOct\n34.29\n35.60\n61.67\n70.35\nNov\n35.00\n38.27\n60.81\n69.76\nDec\n34.38\n37.13\n57.94\n65.65\n2024\nJan\n33.75\n37.13\n56.06\n65.65\nFeb\n33.75\n37.13\n56.06\n65.65\nMar\n33.75\n37.13\n56.28\n64.78\n*Apr\n5.22\n5.34\n5.51\n6.04\n*May\n3.75\n3.88\n5.26\n5.78\n*Jun\n3.75\n3.88\n5.27\n5.94\n*Jul\n3.75\n3.88\n5.26\n5.83\n*Aug\n3.75\n3.88\n5.27\n5.89\n*Sep\n3.75\n3.88\n5.27\n5.94\n*Oct\n3.75\n3.88\n5.41\n7.19\n*Nov\n3.75\n3.88\n4.82\n6.19\n*Dec\n3.54\n3.38\n5.67\n8.15\n2025\n*Jan\n3.54\n3.38\n5.67\n8.15\n*Feb\n3.81\n4.14\n5.95\n8.87\n*Mar\n3.81\n4.14\n5.95\n8.87\n*Apr\n3.81\n4.14\n5.95\n8.93\nSource: Reserve Bank of Zimbabwe, 2025\n* Deposit rates depict the range of rates qouted by banks. \n*Deposit rates are for ZiG deposits\nSAVINGS\n3 MONTHS\nTABLE 8.2 : COMMECIAL BANKS DEPOSIT RATES (percent per annum)\n \n \n24 \n \n \n \nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2021\nJan\n2.84\n1.59\n1.52\n4.26\n2.44\n2.57\n1.33\n-0.72\n1.69\n-0.48\n3.81\n2.14\n2.87\n2.33\nFeb\n1.27\n-0.30\n-1.71\n-0.49\n1.59\n1.07\n-1.60\n10.67\n-2.10\n-0.94\n0.55\n-0.16\n2.03\n0.41\nMar\n0.15\n-0.08\n1.24\n4.37\n-2.37\n0.65\n4.58\n-0.29\n0.02\n0.74\n-0.18\n0.99\n0.52\n0.87\nApr\n0.12\n-0.57\n0.45\n-0.05\n0.24\n0.70\n0.58\n-0.99\n17.14\n1.41\n-3.37\n0.87\n0.25\n0.71\nMay\n0.62\n2.41\n1.41\n0.84\n-0.02\n0.80\n0.07\n42.32\n1.32\n2.36\n0.65\n2.15\n0.28\n1.66\nJun\n1.64\n3.87\n9.35\n6.99\n1.48\n0.57\n0.97\n1.28\n4.88\n2.93\n1.92\n5.07\n2.37\n4.38\nJul\n1.29\n1.73\n0.51\n-0.08\n-0.69\n0.33\n0.10\n0.58\n-0.05\n-0.01\n1.15\n0.51\n0.06\n0.40\nAug\n1.73\n0.72\n1.03\n0.99\n1.14\n1.06\n3.56\n0.29\n-0.05\n2.11\n1.60\n1.10\n0.74\n1.01\nSep\n1.76\n0.08\n1.58\n1.43\n0.64\n0.01\n3.95\n0.87\n-0.78\n1.33\n1.53\n1.27\n2.30\n1.53\nOct\n1.51\n0.77\n0.84\n1.78\n0.72\n1.47\n7.45\n0.36\n2.11\n1.62\n0.91\n1.53\n3.51\n2.03\nNov\n0.85\n0.34\n1.47\n1.12\n0.68\n1.22\n4.43\n0.37\n-6.92\n1.67\n1.11\n0.96\n3.19\n1.53\nDec\n2.41\n0.98\n1.50\n1.30\n0.64\n-0.77\n0.26\n1.01\n0.03\n1.14\n2.05\n1.17\n1.99\n1.38\n2022\nJan\n1.08\n0.64\n2.14\n0.42\n0.71\n0.43\n1.51\n12.08\n0.94\n1.90\n0.11\n1.68\n2.53\n1.90\nFeb\n1.82\n3.39\n1.89\n1.79\n0.68\n1.08\n0.60\n0.92\n0.35\n1.39\n1.69\n1.76\n3.43\n2.20\nMar\n2.59\n2.24\n0.77\n1.22\n0.96\n5.86\n2.27\n0.82\n0.15\n1.02\n-0.06\n1.67\n3.05\n2.04\nApr\n3.38\n1.68\n14.21\n5.59\n1.77\n1.93\n1.73\n1.76\n2.91\n6.05\n1.87\n7.17\n6.94\n7.11\nMay\n3.70\n8.73\n2.02\n1.21\n2.46\n3.36\n2.47\n2.06\n0.48\n3.33\n3.78\n3.12\n9.56\n4.85\nJun\n8.20\n7.94\n12.49\n10.84\n13.72\n5.65\n4.95\n6.63\n4.63\n5.35\n9.86\n9.85\n17.32\n11.95\nJul\n4.57\n1.91\n8.66\n5.87\n3.74\n2.16\n1.21\n2.64\n11.86\n2.00\n2.15\n5.88\n12.09\n7.71\nAug\n3.71\n2.47\n2.01\n1.44\n1.98\n1.59\n1.91\n1.12\n0.41\n1.21\n2.93\n2.02\n4.94\n2.91\nSep\n-2.39\n-1.80\n5.21\n-3.33\n-0.66\n-1.20\n10.12\n0.36\n8.21\n-1.80\n-1.68\n1.99\n-3.23\n0.36\nOct\n0.81\n1.31\n6.74\n1.83\n0.72\n0.88\n2.83\n1.21\n0.10\n0.72\n0.68\n3.29\n2.10\n2.93\nNov\n-0.23\n0.35\n0.34\n0.60\n0.85\n0.25\n4.30\n0.48\n16.78\n19.32\n0.85\n1.71\n0.23\n1.27\nDec\n0.39\n0.76\n0.20\n-0.24\n0.03\n-0.15\n3.91\n-0.10\n0.00\n0.73\n-0.23\n0.28\n1.55\n0.66\n2023\nJan\n0.17\n-0.62\n0.81\n0.34\n0.26\n0.45\n-2.36\n0.45\n0.06\n-0.58\n0.54\n0.33\n-0.77\n0.00\nFeb\n-3.59\n-1.56\n-3.56\n-1.27\n-1.02\n-4.40\n-1.81\n-2.19\n0.06\n-3.63\n-7.55\n-3.40\n-4.54\n-3.73\nMar\n-0.57\n-0.46\n-0.01\n-0.71\n-0.10\n-0.13\n0.44\n-0.24\n0.16\n-0.16\n-0.42\n-0.18\n-0.66\n-0.32\nApr\n1.05\n0.05\n2.79\n-0.18\n0.92\n0.18\n0.59\n0.43\n0.53\n0.35\n0.55\n1.36\n1.96\n1.54\nMay\n3.05\n0.34\n3.03\n-0.08\n2.87\n1.74\n6.10\n1.65\n1.19\n0.99\n2.35\n2.34\n3.37\n2.64\nJun\n11.74\n0.93\n14.88\n-0.85\n9.19\n5.27\n23.88\n5.15\n3.07\n3.15\n6.58\n9.53\n18.23\n12.10\nJul\n1.68\n0.51\n0.36\n0.56\n-0.34\n0.69\n0.68\n-0.11\n1.04\n2.82\n1.11\n0.65\n1.85\n1.03\nAug\n-1.11\n-0.11\n-2.00\n-0.19\n-0.02\n-0.02\n-0.61\n-0.53\n-0.45\n-0.40\n-1.37\n-1.12\n-1.83\n-1.34\nSep\n0.32\n0.04\n0.34\n0.30\n-0.38\n0.63\n5.77\n-0.21\n5.97\n-0.10\n0.91\n0.91\n1.05\n0.95\nOct\n1.91\n1.10\n4.96\n0.54\n1.89\n2.81\n-2.69\n0.43\n-4.21\n0.53\n2.43\n2.48\n2.42\n2.46\nNov\n1.94\n0.60\n8.93\n-0.36\n2.45\n1.30\n3.24\n0.79\n4.28\n-0.67\n1.07\n4.39\n4.89\n4.54\nDec\n3.49\n1.41\n5.40\n0.63\n0.55\n0.86\n0.71\n1.92\n0.22\n1.07\n1.95\n2.90\n8.64\n4.70\n2024\nJan\n2.65\n-2.53\n5.48\n-1.30\n-3.17\n11.61\n-8.22\n-3.90\n5.52\n0.78\n-3.36\n2.50\n15.01\n6.58\nFeb\n3.31\n0.26\n4.84\n0.64\n2.77\n2.47\n8.40\n2.25\n1.67\n1.15\n3.35\n2.98\n9.83\n5.39\nMar\n2.48\n0.76\n4.89\n0.62\n2.44\n2.39\n10.08\n2.14\n2.02\n1.75\n2.85\n2.48\n8.13\n4.89\nApr\n1.35\n0.66\n3.69\n0.28\n0.77\n1.01\n2.60\n0.18\n6.85\n-0.26\n0.87\n4.19\n4.19\n2.94\n*May\n-6.05\n-1.36\n0.54\n-3.09\n-1.14\n-0.73\n0.65\n-2.60\n0.00\n-0.90\n-2.82\n-0.99\n-5.55\n-2.42\n*Jun\n-0.48\n0.82\n0.08\n0.21\n0.44\n0.84\n0.33\n-0.03\n0.17\n0.04\n0.21\n0.22\n-0.38\n0.04\n*Jul\n0.57\n0.89\n0.38\n-0.11\n0.45\n-0.45\n-2.41\n0.06\n0.37\n0.22\n0.09\n0.14\n-0.73\n-0.13\n*Aug\n2.31\n1.57\n0.20\n2.07\n1.19\n2.72\n-0.06\n1.41\n0.49\n1.24\n2.11\n1.14\n2.15\n1.44\n*Sep\n11.10\n3.65\n1.14\n6.71\n4.01\n5.70\n2.87\n6.26\n0.86\n4.45\n7.46\n3.89\n10.15\n5.78\n*Oct\n55.63\n44.94\n16.79\n39.81\n50.55\n38.72\n42.19\n49.16\n3.69\n30.79\n54.02\n31.75\n49.25\n37.25\n*Nov\n15.83\n15.10\n2.30\n15.16\n15.13\n13.80\n6.82\n17.47\n4.67\n10.69\n14.76\n9.67\n15.66\n11.72\n*Dec\n4.07\n6.71\n1.49\n3.19\n3.69\n3.57\n3.29\n2.46\n6.03\n3.61\n3.52\n3.19\n4.56\n3.67\n2025\n*Jan\n6.85\n4.51\n2.80\n30.66\n7.15\n3.96\n1.81\n7.91\n1.54\n0.00\n2.41\n5.75\n6.85\n10.50\n*Feb\n-0.32\n0.58\n0.22\n0.81\n0.93\n0.46\n0.57\n0.42\n1.25\n0.80\n-0.63\n0.27\n0.81\n0.46\n*Mar\n0.83\n0.15\n0.00\n-0.13\n0.93\n0.34\n-0.25\n-1.08\n2.43\n-0.53\n-0.22\n0.16\n-0.46\n-0.06\n*Apr\n1.31\n0.88\n1.67\n0.26\n1.17\n0.66\n-0.80\n1.05\n0.87\n2.92\n0.85\n1.11\n-0.25\n0.64\nSource: Zimstat, 2025\n*Statistics are in ZiG\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nFOOD & NON \nALCOHOLIC \nBEVERAGES\nALL \nITEMS\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & OTHER \nFUELS\nCLOTHING & \nFOOTWEAR\nRECREATION & \nCULTURE\nRESTAURANTS & \nHOTELS\nEDUCATION\nMISC. GOODS & \nSERVICES\nTOTAL NON \nFOOD\nALCOHOLIC \nBEVERAGES & \nTOBACCO\nFURNITURE AND \nEQUIPMENT\nHEALTH\nTRANSPORT\nCOMMUNICATION\n \n \n25 \n \n \n \nFOOD \nINFLATION\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2021\nJan\n20.60\n-2.07\n36.36\n-1.28\n10.32\n-3.60\n128.10\n-5.01\n-21.25\n-30.63\n-23.35\n12.89\n17.44\n14.03\nFeb\n39.34\n9.50\n38.02\n12.01\n25.35\n8.60\n82.62\n14.90\n-32.54\n-21.66\n-17.59\n18.72\n29.84\n21.45\nMar\n14.17\n6.58\n29.52\n3.24\n5.87\n19.12\n92.07\n6.36\n6.81\n-2.73\n-7.44\n18.40\n22.51\n19.45\nApr\n14.30\n5.98\n30.11\n3.19\n6.13\n19.96\n93.18\n5.32\n25.12\n-1.35\n-10.56\n19.42\n22.82\n20.29\nMay\n15.83\n14.44\n20.88\n4.68\n16.10\n25.82\n102.08\n55.83\n36.63\n-3.32\n-9.20\n20.10\n22.47\n20.70\nJun\n12.75\n14.64\n22.39\n15.03\n9.18\n12.04\n70.11\n42.04\n30.41\n4.24\n-7.69\n19.04\n28.60\n21.31\nJul\n6.39\n11.64\n23.80\n10.15\n3.85\n6.95\n52.67\n52.59\n39.02\n13.15\n8.80\n18.71\n15.01\n17.76\nAug\n13.21\n12.09\n24.34\n11.12\n5.35\n6.76\n15.74\n59.33\n35.23\n16.34\n4.54\n18.18\n18.05\n18.15\nSep\n14.96\n12.70\n25.60\n16.41\n6.74\n12.34\n14.92\n60.58\n36.28\n21.35\n9.67\n20.76\n21.15\n20.86\nOct\n17.72\n16.64\n21.34\n23.27\n7.60\n13.62\n22.43\n60.80\n38.87\n20.39\n10.27\n21.05\n24.80\n21.99\nNov\n16.80\n14.54\n22.11\n24.82\n6.57\n13.72\n27.83\n60.49\n15.38\n17.92\n11.34\n20.15\n24.28\n21.19\nDec\n17.38\n12.07\n20.56\n24.61\n6.62\n10.09\n28.48\n61.86\n16.79\n14.71\n12.21\n19.00\n21.96\n19.76\n2022\nJan\n15.38\n11.03\n21.29\n20.02\n4.81\n7.80\n28.71\n82.72\n15.93\n17.46\n8.22\n18.46\n21.56\n19.26\nFeb\n16.00\n15.14\n25.74\n22.76\n3.87\n7.80\n31.58\n66.63\n18.83\n20.23\n9.44\n20.73\n23.23\n21.38\nMar\n18.84\n17.81\n25.15\n19.07\n7.41\n13.39\n28.67\n68.48\n18.98\n20.57\n9.57\n21.54\n26.32\n22.80\nApr\n22.71\n20.48\n42.29\n25.78\n9.04\n14.77\n30.15\n73.15\n4.52\n26.09\n15.50\n29.14\n34.75\n30.60\nMay\n26.46\n27.91\n43.15\n26.23\n11.74\n17.68\n33.27\n24.17\n3.66\n27.29\n19.09\n30.37\n47.22\n34.70\nJun\n34.62\n32.92\n47.25\n30.78\n25.21\n23.62\n38.51\n30.74\n3.41\n30.29\n28.37\n36.30\n68.72\n44.47\nJul\n38.99\n33.16\n59.19\n38.55\n30.80\n25.88\n40.04\n33.42\n15.74\n32.91\n29.63\n43.58\n89.00\n54.99\nAug\n41.70\n35.49\n60.73\n39.17\n31.89\n26.54\n37.81\n34.54\n16.27\n31.74\n31.34\n44.88\n96.89\n57.92\nSep\n35.93\n32.94\n66.48\n32.64\n30.19\n25.02\n45.99\n33.85\n26.81\n27.66\n27.17\n45.91\n86.25\n56.09\nOct\n35.00\n33.64\n76.23\n32.71\n30.19\n24.29\n39.72\n34.98\n24.31\n26.52\n26.89\n48.43\n83.72\n57.47\nNov\n33.55\n33.65\n74.26\n32.03\n30.42\n23.10\n39.54\n35.12\n55.96\n48.48\n26.56\n49.54\n78.43\n57.06\nDec\n30.92\n33.36\n72.02\n30.01\n29.63\n23.87\n44.62\n33.64\n55.91\n47.88\n23.73\n48.22\n77.66\n55.93\n2023\nJan\n29.74\n31.69\n69.78\n29.91\n29.05\n23.89\n39.11\n19.78\n54.56\n44.29\n24.25\n46.26\n71.94\n53.03\nFeb\n22.86\n25.38\n60.69\n26.01\n26.87\n23.89\n35.79\n16.09\n54.11\n37.14\n12.96\n38.85\n58.69\n44.14\nMar\n19.07\n22.07\n59.46\n23.60\n25.55\n23.89\n33.36\n14.86\n54.13\n35.54\n12.56\n36.31\n52.99\n40.80\nApr\n16.38\n20.11\n43.52\n16.85\n24.51\n23.89\n31.87\n13.36\n50.56\n28.25\n11.10\n28.93\n45.87\n33.48\nMay\n15.66\n10.84\n44.93\n15.37\n25.01\n23.89\n36.54\n12.90\n51.63\n25.34\n9.57\n27.96\n37.63\n30.68\nJun\n19.45\n3.65\n48.01\n3.20\n20.03\n23.89\n61.17\n11.33\n49.36\n22.73\n6.31\n27.58\n38.70\n30.85\nJul\n16.14\n2.22\n36.71\n-1.98\n15.30\n23.89\n60.33\n8.34\n34.91\n23.72\n5.22\n21.28\n26.03\n22.74\nAug\n10.74\n-0.36\n31.33\n-3.54\n13.04\n23.89\n56.36\n6.57\n33.75\n21.75\n0.82\n17.55\n17.90\n17.66\nSep\n13.82\n1.52\n25.26\n0.08\n13.36\n23.89\n50.18\n5.97\n30.99\n23.86\n3.48\n16.31\n23.12\n18.36\nOct\n15.06\n1.31\n23.16\n-1.20\n14.66\n7.28\n42.11\n5.15\n25.35\n23.64\n5.28\n15.40\n23.50\n17.82\nNov\n17.55\n1.56\n33.71\n-2.14\n16.48\n8.40\n40.66\n5.48\n11.94\n2.93\n5.52\n18.43\n29.24\n21.63\nDec\n21.19\n2.22\n40.65\n-1.28\n17.09\n9.49\n36.33\n7.61\n12.19\n3.27\n7.82\n21.52\n38.26\n26.52\n2024\nJan\n24.18\n0.25\n47.17\n-2.90\n13.08\n21.65\n28.14\n2.95\n18.31\n4.68\n3.64\n24.16\n60.25\n34.84\nFeb\n33.06\n2.10\n59.99\n-1.02\n17.41\n30.39\n41.46\n7.62\n20.22\n9.87\n15.86\n32.35\n84.37\n47.62\nMar\n37.15\n3.35\n67.82\n0.31\n20.39\n33.68\n55.04\n10.19\n22.44\n11.97\n19.67\n36.58\n100.68\n55.34\nApr\n37.55\n3.98\n69.28\n0.77\n20.20\n34.79\n58.13\n9.93\n30.14\n11.30\n20.06\n42.42\n105.07\n57.48\n2025\n*Apr\n113.35\n96.45\n65.25\n89.90\n102.12\n82.73\n70.72\n92.09\n22.68\n66.55\n106.90\n77.85\n102.86\n85.68\nSource: Zimstat, 2024\n*Statistics are in ZiG\nRECREATIO\nN & \nCULTURE\nRESTAURANTS \n& HOTELS\nMISC. \nGOODS & \nSERVICES\nTOTAL NON \nFOOD\nFOOD & NON \nALCOHOLIC \nCEVERAGES \nALL ITEMS\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nNON-FOOD INFLATION\nHEALTH TRANSPORT COMMUNICATION\nEDUCATION\nALCOHOLIC \nBEVERAGES \n& TOBACCO \nCLOTHING \n& \nFOOTWEAR\nHOUSING, \nWATER, \nELECTRICTY\n, GAS & \nOTHER \nFUELS\nFURNITURE \nAND \nEQUIPMENT\n \n \n26 \n \n \n \n2022\nJan\n115.422\n7.4069\n9.8109\n0.9995\n128.8401\n154.8332\nFeb\n124.019\n8.0738\n10.7214\n1.0732\n138.2625\n165.6148\nMar\n142.424\n9.8091\n12.4763\n1.1665\n159.0161\n186.8670\nApr\n159.348\n10.0334\n13.1064\n1.2217\n167.9530\n199.4880\nMay\n290.888\n18.7787\n24.3182\n2.2757\n312.8351\n367.1438\nJun\n366.269\n22.5194\n29.7593\n2.6861\n382.8607\n444.3572\nJul\n416.289\n25.2673\n33.2407\n3.1299\n425.1560\n507.7061\nAug\n546.825\n32.3336\n42.8164\n3.9498\n548.9033\n638.9381\nSep\n621.532\n34.5376\n46.4284\n4.2999\n609.9716\n691.9517\nOct\n632.137\n34.7014\n47.2839\n4.2742\n628.8500\n732.8998\nNov\n654.865\n38.5947\n51.0140\n4.7279\n677.5889\n784.3319\nDec\n671.447\n39.5836\n52.6414\n5.0669\n715.4935\n809.2610\n2023\nJan\n796.522\n45.7487\n61.8897\n6.1132\n863.6683\n983.1863\nFeb\n889.133\n48.1898\n66.7294\n6.5202\n941.1468\n1070.6489\nMar\n929.862\n52.0727\n71.3204\n6.9912\n1013.3634\n1151.6803\nApr\n1047.445\n57.1437\n79.4723\n7.7646\n1151.0384\n1309.3061\nMay\n2577.056\n130.3252\n186.5789\n18.4901\n2755.1310\n3192.3286\nJun\n5739.000\n306.2597\n425.5469\n39.6710\n6240.5886\n7250.9396\nJul\n4516.803\n255.8972\n346.4388\n31.8342\n4971.8704\n5801.8328\nAug\n4608.107\n246.2293\n343.3039\n31.5721\n5031.5916\n5860.1292\nSep\n5466.747\n288.5390\n396.3391\n36.6073\n5782.7246\n6680.6377\nOct\n5698.961\n301.1746\n417.7338\n37.9539\n6039.7584\n6920.5328\nNov\n5791.080\n309.3526\n429.6053\n39.3710\n6363.8242\n7330.4810\nDec\n6104.723\n329.1177\n455.4123\n43.1811\n6753.9598\n7783.5213\n2024\nJan\n10152.393\n555.5556\n745.3522\n65.3595\n10985.0050\n12870.8909\nFeb\n14912.829\n769.2308\n1082.9160\n99.0099\n16156.7220\n18886.3930\nMar\n22055.474\n1165.3008\n1610.0496\n145.7394\n23872.8448\n27868.1939\n*Apr\n13.4301\n0.7185\n0.9542\n0.0857\n14.3722\n16.8366\n*May\n13.3177\n0.7089\n0.9762\n0.0850\n14.4098\n16.9421\n*Jun\n13.7031\n0.7414\n1.0065\n0.0851\n14.6500\n17.3056\n*Jul\n13.7446\n0.7532\n1.0141\n0.0870\n14.9010\n17.6623\n*Aug\n13.7998\n0.7653\n1.0283\n0.0944\n15.2106\n17.8698\n*Sep\n14.9588\n0.8491\n1.1308\n0.1046\n16.6101\n19.7600\n*Oct\n26.7752\n1.5243\n2.0166\n0.1790\n29.1961\n34.9654\n*Nov\n25.7613\n1.4365\n1.9056\n0.1676\n27.3826\n32.8510\n*Dec\n25.6843\n1.4166\n1.8831\n0.1678\n26.9255\n32.5120\n2025\n*Jan\n26.1493\n1.3956\n1.8772\n0.1670\n27.0736\n32.3011\n*Feb\n26.7654\n0.6835\n1.9622\n0.1795\n29.0177\n34.6893\n*Mar\n26.6787\n1.4588\n1.9508\n0.1788\n28.5428\n34.4141\n*Apr\n26.8023\n1.4182\n1.9371\n0.1855\n30.0241\n33.8697\nSource: Reserve Bank of Zimbabwe, 2025\n TABLE 10 : SELECTED INTERNATIONAL EXCHANGE RATES\n*The Reserve Bank introduced a new currency ZiG on 5 \n& recalibrated exchange rates to ZiG\nEND OF\nUSA DOLLAR\nSOUTH ARFICAN \nRAND\nBOTSWANA PULA\nJAPANESE YEN\nEURO\nPOUND STERLING\n \n \n27 \n \n \n \n \nMarket Capitalisation\nAll Share Index*\nZWG millions\n2022\nJan\n12079.74\n8196.79\n3704.23\n82,402,101\n1,475,217.45\nFeb\n14990.42\n9300.03\n7979.35\n156,327,700\n1,863,028.60\nMar\n15858.92\n11289.34\n8186.00\n117,815,800\n1,964,738.42\nApr\n28391.75\n30527.28\n11366.89\n193,411,483\n3,547,347.52\nMay\n23072.46\n20021.24\n8211.45\n195,475,400\n2,893,011.70\nJune\n19791.94\n20021.24\n14570.16\n271,227,100\n2,439,165.45\nJuly\n16594.91\n20021.24\n23673.34\n239,937,180\n2,068,222.01\nAug\n13705.12\n15473.37\n8674.85\n139,225,500\n1,685,592.28\nSept\n14771.65\n18929.75\n5128.54\n137,092,750\n1,819,157.07\nOct\n15072.14\n23659.53\n8657.90\n201,566,548\n1,826,101.68\nNov\n14577.46\n25478.67\n7680.78\n90,311,600\n1,610,203.36\nDec\n19493.85\n25487.77\n27753.79\n472,926,200\n2,044,869.14\n2023\nJan\n22813.24\n25496.86\n11638.16\n102,792,200\n2,460,037.66\nFeb\n28548.02\n29207.92\n24410.54\n164,006,458\n2,576,324.76\nMar\n38568.48\n37359.78\n14262.67\n97,920,600\n3,381,456.06\nApr\n41391.62\n36393.55\n16756.85\n74,505,000\n3,482,408.54\nMay\n108195.29\n52765.85\n34867.41\n206,593,600\n8,939,058.47\nJun\n171408.90\n76960.49\n85279.40\n192,473,571\n13,987,476.83\nJul\n114746.13\n89512.59\n40846.72\n176,547,600\n9,171,346.28\nAug\n125134.79\n109159.36\n39214.53\n103,854,600\n9,723,577.74\nSep\n126642.42\n125531.67\n91310.72\n343,359,119\n9,873,493.87\nOct\n157083.06\n125531.67\n31773.08\n64,000,500\n12,576,665.45\nNov\n191271.68\n148883.44\n54864.31\n162,675,500\n15,311,628.01\nDec\n210833.92\n145542.27\n109727.94\n254,991,213\n16,812,914.36\n2024\nJan\n542743.66\n163733.73\n112532.73\n79,766,490\n43,459,150.79\nFeb\n525570.76\n216534.42\n103474.44\n73,940,200\n41,499,016.93\nMar\n873263.38\n218308.09\n123025.50\n54,297,600\n49,235,325.40\n*Apr\n98.82\n114.07\n22,304,969\n21,943,400\n28,571.12\n*May\n101.07\n114.07\n75,913,056\n58,831,200\n29,394.99\n*Jun\n128.64\n114.16\n99,811,029\n182,514,300\n38,710.43\n*Jul\n198.14\n253.49\n260,505,803\n93,603,100\n60,570.91\n*Aug\n200.49\n253.42\n164,625,191\n118,159,000\n61,448.73\n*Sep \n243.41\n251.68\n273,853,848\n257,091,400\n74,489.51\n*Oct\n289.12\n251.68\n502,844,478\n107,115,500\n89,605.28\n*Nov\n265.10\n235.38\n285,159,922\n72,864,500\n82,184.61\n*Dec\n217.58\n235.38\n225,234,022\n152,111,200\n66,241.20\n2025\n*Jan\n195.57\n229.61\n196,982,719\n187,781,200\n58,794.86\n*Feb\n204.06\n193.56\n506,135,991\n197,200,800\n62,060.95\n*Mar\n205.25\n180.43\n229,916,317\n92,886,500\n62,916.75\n*Apr\n191.95\n143.95\n268,269,085\n150,502,500\n58,411.66\nSource: Zimbabwe Stock Exchange, 2025\n**As at 26 June 2020\n***The ZSE rebased indices to 100 in April 2024 following the introduction of the ZiG\n*Statistics are denominated in ZiG\nTABLE 11: ZIMBABWE STOCK MARKET STATISTICS\nMining Index\n Market Turnover \nZWG \nVolume of Shares\nEND OF\n*All Share index was introduced in January, 2018\n \n \n28 \n \n \n \nEND OF\nZETSS \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n255551.3\n21042.2\n2300.3\n35349.1\n66624.4\nFeb\n226335.8\n22882.6\n2288.9\n36434.4\n63598.2\nMar\n320422.1\n28569.9\n3316.6\n44524.0\n86463.9\nApr\n288958.8\n30071.5\n2807.0\n44131.6\n90580.4\nMay\n361427.1\n36765.1\n3193.7\n49745.8\n89471.3\nJun\n388757.5\n38540.1\n3200.0\n51437.4\n115145.7\nJul\n379659.9\n45808.1\n2489.1\n57565.8\n145027.0\nAug\n397539.0\n52853.9\n4086.0\n60908.4\n159206.6\nSep\n477933.6\n52262.7\n4179.5\n64139.2\n181194.8\nOct\n481180.9\n53165.9\n3839.9\n65329.0\n197972.5\nNov\n621896.7\n56025.3\n4877.0\n63017.5\n252407.9\nDec\n747035.6\n67903.9\n4705.5\n76511.6\n264749.2\n2022\nJan\n802677.7\n55961.6\n5074.7\n53456.3\n218545.3\nFeb\n672723.0\n59581.6\n5607.0\n66812.0\n238910.8\nMar\n961452.0\n75050.7\n7882.2\n82886.9\n342168.7\nApr\n976617.2\n89192.6\n8391.5\n89672.0\n293204.6\nMay\n1205990.0\n110807.3\n13712.8\n106881.8\n469185.2\nJune\n1601225.3\n134551.0\n18810.6\n123721.3\n618347.5\nJuly\n1754112.0\n170480.6\n20413.1\n172562.5\n713401.1\nAug\n2334295.0\n152343.4\n31418.6\n178188.9\n826377.1\nSep\n2793056.6\n177701.7\n35144.4\n202368.1\n872807.4\nOct\n2728731.3\n186478.9\n50202.3\n209758.0\n622412.8\nNov\n3370779.9\n202876.2\n61086.7\n213295.3\n734610.6\nDec\n3310814.9\n246783.6\n76872.0\n249516.4\n1106346.5\n2023\nJan\n3289379.3\n240010.3\n68386.7\n238455.3\n1107756.4\nFeb\n3050933.3\n219437.8\n73672.3\n245282.5\n1202998.5\nMar\n5068223.7\n308609.1\n85343.4\n328822.3\n1517972.6\nApr\n1594.5\n136.7\n31.9\n142.1\n602.9\nMay\n2511.4\n207.4\n69.3\n212.9\n1310.7\nJun\n6827.3\n353.1\n246.2\n484.4\n2657.6\nJul\n7147.5\n413.7\n216.7\n648.4\n2432.3\nAug\n7186.0\n407.4\n260.1\n576.5\n2499.2\nSep\n7479.9\n488.9\n309.5\n669.4\n3100.0\nOct\n7927.5\n506.1\n330.8\n786.1\n3466.4\nNov\n9479.0\n572.0\n360.8\n800.0\n3824.9\nDec\n10563.9\n722.4\n437.3\n1042.2\n4062.3\n2024\nJan\n11319.8\n763.3\n740.8\n1638.0\n8812.4\nFeb\n15327.4\n1143.5\n1072.2\n2212.8\n11833.0\nMar\n24185.4\n1575.6\n1786.8\n2219.1\n14945.0\n*Apr\n41317.5\n2063.0\n2797.1\n4754.9\n15996.5\n*May\n53741.3\n3335.6\n3355.4\n7058.0\n22545.4\n*Jun\n51046.4\n3281.7\n3230.9\n6470.4\n22040.1\n*Jul\n63526.1\n3956.0\n3646.3\n7361.7\n27328.4\n*Aug\n54975.9\n3973.7\n3937.3\n7555.9\n25760.6\n*Sep\n65045.5\n4685.2\n5331.4\n1194.1\n38798.2\n*Oct\n109554.7\n6900.1\n6836.3\n16082.3\n50983.1\n*Nov\n107345.1\n7074.6\n6940.4\n15645.3\n47876.4\n*Dec\n123594.8\n7954.5\n8665.2\n17068.5\n50613.2\n2025\n*Jan\n105337.9\n7252.4\n6858.9\n14579.5\n44760.8\n*Feb\n92208.7\n5961.2\n6364.9\n14208.9\n43833.1\n*Mar\n112646.3\n6785.3\n7339.8\n17156.0\n47320.6\n*Apr\n116945.5\n7294.4\n7046.2\n19678.2\n49770.4\nSource: Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\nTABLE 12.1 : ZETSS AND RETAIL PAYMENTS \n Values of Transactions (ZWG Millions)\n \n \n29 \n \n \n \n \nEND OF\nZETSS \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n720.0\n9849.3\n229.0\n94691.4\n872.2\nFeb\n806.0\n12309.3\n527.8\n90078.0\n754.9\nMar\n1112.8\n15178.8\n751.0\n105272.0\n1003.7\nApr\n951.7\n15185.0\n605.5\n97253.3\n1040.1\nMay\n1029.8\n16511.3\n664.4\n103708.7\n994.8\nJun\n1076.9\n14797.9\n581.9\n99349.6\n982.1\nJul\n1028.2\n15217.6\n551.0\n102587.6\n980.8\nAug\n1045.0\n14624.5\n475.4\n105269.7\n955.8\nSep\n1193.1\n15397.6\n492.2\n104141.9\n2092.6\nOct\n1114.2\n18207.4\n434.5\n107294.6\n2342.6\nNov\n1144.9\n17435.9\n477.0\n98386.5\n2322.9\nDec\n1220.3\n20029.6\n519.5\n106428.6\n2580.6\n2022\nJan\n957.9\n15480.2\n439.9\n83661.8\n1902.9\nFeb\n981.0\n15190.4\n433.7\n78916.1\n1895.3\nMar\n1242.3\n16967.6\n519.1\n87501.1\n2128.6\nApr\n1073.0\n15906.2\n458.0\n82673.4\n1937.6\nMay\n1213.5\n16069.9\n477.8\n78385.2\n2001.2\nJune\n1190.3\n15304.7\n474.2\n75631.7\n1705.1\nJuly\n1115.8\n16063.8\n517.0\n88030.6\n1866.7\nAug\n1028.0\n13686.8\n489.1\n76957.8\n1623.7\nSep\n1084.6\n13084.7\n455.5\n71362.1\n2225.2\nOct\n969.3\n12986.8\n510.9\n67641.7\n1825.4\nNov\n1001.4\n12324.1\n499.9\n59151.5\n2430.2\nDec\n1013.6\n14316.9\n616.7\n60584.5\n2469.8\n2023\nJan\n918.9\n11734.0\n444.0\n48617.1\n1693.0\nFeb\n886.7\n10301.5\n479.9\n43326.5\n1895.8\nMar\n1092.6\n13217.0\n594.0\n50037.4\n1927.1\nApr\n907.6\n14375.1\n526.7\n47171.7\n1982.9\nMay\n1119.2\n12808.7\n576.7\n49143.2\n2233.6\nJun\n1050.2\n10190.6\n606.0\n45488.8\n1213.0\nJul\n942.7\n8226.8\n1777.1\n42648.8\n993.7\nAug\n888.0\n8434.6\n653.6\n42648.8\n977.5\nSep\n964.1\n9659.0\n703.6\n45148.7\n1061.4\nOct\n949.1\n9449.3\n619.0\n50640.6\n904.4\nNov\n924.5\n9525.7\n623.3\n52332.4\n1048.5\nDec\n924.5\n11846.0\n776.5\n56451.0\n1026.2\n2024\nJan\n914.9\n10017.9\n708.1\n52445.0\n882.8\nFeb\n889.7\n7868.7\n737.5\n51545.9\n904.2\nMar\n941.1\n7569.3\n728.4\n58151.4\n921.4\n*Apr\n791.8\n5729.5\n744.8\n30450.4\n938.0\n*May\n1046.6\n7950.1\n899.4\n42290.8\n1690.3\n*Jun\n927.3\n7224.2\n849.6\n41224.2\n1155.8\n*Jul\n1059.1\n8228.2\n920.9\n44159.4\n1318.9\n*Aug\n974.4\n8669.3\n966.0\n47536.9\n1233.1\n*Sep\n1009.7\n8369.3\n860.5\n49927.2\n1408.9\n*Oct\n1015.7\n8101.5\n866.9\n52795.2\n1447.5\n*Nov\n868.4\n7253.1\n864.4\n50820.5\n1359.2\n*Dec\n931.6\n8017.7\n1071.6\n50767.8\n1541.3\n2025\n*Jan\n839.5\n7381.3\n911.1\n46337.9\n1363.6\n*Feb\n815.5\n6229.8\n838.1\n44460.8\n1346.3\n*Mar\n917.4\n6777.0\n953.3\n53987.0\n1250.1\n*Apr\n872.0\n6052.9\n888.6\n54493.5\n1222.6\nSource: Reserve Bank of Zimbabwe, 2025\n*Statistics are denominated in ZiG\nTABLE 12.2 : ZETSS AND RETAIL PAYMENTS \n Volumes of Transactions (000's)\n \n \n30 \n \n \n \nEND OF\nEXPORTS\nIMPORTS\nTOTAL TRADE TRADE BALANCE\n2022\nJan\n543.9\n633.2\n-88.1\n-89.3\nFeb\n438.0\n630.1\n1068.1\n-192.2\nMar\n557.6\n713.8\n1271.4\n-156.2\nApr\n587.3\n637.2\n1224.5\n-49.9\nMay\n513.1\n714.4\n1227.6\n-201.3\nJun\n541.0\n751.4\n1292.3\n-210.4\nJul\n548.4\n728.2\n1276.6\n-179.9\nAug\n493.6\n759.9\n1253.4\n-266.3\nSep\n552.3\n765.3\n1317.6\n-213.1\nOct\n502.3\n770.5\n1272.8\n-268.2\nNov\n674.6\n802.2\n1476.8\n-127.5\nDec\n633.5\n772.6\n1406.1\n-139.1\n2023\nJan\n427.8\n633.8\n1061.6\n-206.0\nFeb\n435.9\n623.5\n1059.3\n-187.6\nMar\n515.3\n746.4\n1261.7\n-231.1\nApr\n555.5\n708.6\n1264.1\n-153.0\nMay\n654.2\n850.3\n1504.6\n-196.1\nJun\n641.5\n727.4\n1368.9\n-85.9\nJul\n603.2\n782.9\n1386.2\n-179.7\nAug\n649.8\n820.2\n1470.1\n-170.4\nSep\n678.1\n772.7\n1450.8\n-94.6\nOct\n831.9\n901.5\n1733.4\n-69.6\nNov\n681.4\n827.3\n1508.7\n-145.9\nDec\n550.6\n819.4\n1370.0\n-268.7\n2024\nJan\n539.9\n694.2\n1234.1\n-154.3\nFeb\n644.0\n729.8\n1369.4\n-81.4\nMar\n534.7\n721.2\n1255.9\n-186.5\nApr\n513.5\n710.5\n1223.9\n-197.0\nMay\n583.0\n741.0\n1324.0\n-157.9\nJun\n524.0\n746.7\n1270.7\n-222.7\nJul\n548.3\n823.1\n1371.4\n-274.8\nAug\n674.0\n872.8\n1546.8\n-198.7\nSep\n575.0\n782.6\n1357.5\n-207.6\nOct\n698.1\n835.8\n1533.9\n-137.7\nNov\n905.2\n952.1\n1857.4\n-46.9\nDec\n692.4\n889.3\n1581.7\n-196.9\n2025\n*Jan\n652.0\n748.8\n1400.8\n-96.8\n*Feb\n512.6\n730.4\n1243.0\n-217.9\n*Mar\n581.9\n809.9\n1391.8\n-228.0\n*Apr\n662.6\n781.3\n1443.9\n-118.7\nSource: ZIMSTAT, 2025\nTABLE 13 : MERCHANDISE TRADE STATISTICS\n (US$ millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monthly_Economic_Reviews/Monthly_Economic_Review_April_2025_docx_.pdf"}
{"doc_id": "b0bf9979f06f25f0abcd1455894b36ba", "text": "Vol. 25 No. 20 \n \n \nWeek Ending \n19th May 2023 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nINTEREST RATES .................................................................................... 1 \n2. \nCLEARING AND SETTLEMENT ACTIVITY ...................................... 2 \n3. \nTOBACCO SALES ..................................................................................... 4 \n4. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ......... 4 \n5. \nEXCHANGE RATE DEVELOPMENTS ................................................. 6 \n6. \nEQUITY MARKETS.................................................................................. 7 \n \n \n \n \n \n1 \n1. \nINTEREST RATES \n \nLocal Currency (ZWL) Deposit Rates \n \nMinimum and maximum deposit rates for deposits of all classes remained at previous week’s \nlevels, during the week ending 19th May 2023, as shown in Table 1. \n \n \n \nTable 1: Average Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit rates (%) \n \n3- Month deposit rates (%) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n21-Apr-23 \n33.34 \n34.01 \n62.06 \n73.17 \n63.06 \n71.94 \n28-Apr-23 \n36.00 \n36.50 \n62.06 \n73.17 \n63.06 \n71.72 \n5-May-23 \n36.00 \n36.50 \n62.06 \n73.17 \n63.06 \n71.72 \n12-May-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \n19-May-23 \n35.33 \n35.88 \n60.39 \n71.50 \n63.33 \n70.33 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nLocal Currency (ZWL) Lending Rates \n \nThe week under review saw commercial bank minimum and maximum lending rates for both \nindividual and corporate clients remain unchanged, as shown in Table 2. \n \nTable 2: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n21-Apr-23 \n74.11 \n105.67 \n87.16 \n167.82 \n28-Apr-23 \n74.48 \n105.75 \n86.96 \n167.31 \n5-May-23 \n74.44 \n107.78 \n96.87 \n173.38 \n12-May-23 \n74.48 \n103.66 \n102.75 \n161.96 \n19-May-23 \n76.48 \n103.66 \n102.75 \n161.96 \nSource: Reserve Bank of Zimbabwe, 2023 \n \nForeign Currency (USD) Deposit Rates \n \nAverage minimum and maximum deposits rates for all classes of deposits quoted by commercial \nbanks were unchanged during the week ending 19th May 2023, as shown in Table 3. \n \n \n \n \n \n2 \nTable 3: Average Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit rates (%) \n \n3- Month deposit rates (%) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n21-Apr-23 \n1.27 \n1.69 \n3.12 \n4.32 \n3.45 \n4.77 \n28-Apr-23 \n1.27 \n1.69 \n3.12 \n4.32 \n3.45 \n4.77 \n5-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n12-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \n19-May-23 \n1.27 \n1.69 \n3.12 \n4.44 \n3.45 \n4.93 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nForeign Currency (USD) Lending Rates \n \nMinimum lending rates for individual clients registered a marginal increase, while those for \ncorporate clients were lower during the week under analysis. Maximum commercial bank \nlending rates for both individual and corporate clients increased during the week under review, \nas shown in Table 4. \n \nTable 4: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n21-Apr-23 \n11.33 \n13.25 \n7.75 \n14.76 \n28-Apr-23 \n11.37 \n13.24 \n7.96 \n14.50 \n5-May-23 \n11.91 \n12.95 \n8.28 \n14.44 \n12-May-23 \n11.32 \n12.95 \n8.28 \n14.44 \n19-May-23 \n11.35 \n13.32 \n7.64 \n14.48 \nSource: Reserve Bank of Zimbabwe, 2023 \n2. \nCLEARING AND SETTLEMENT ACTIVITY \n \nTransactions processed through the National Payment Systems (NPS) amounted to ZW$1.56 \ntrillion, reflecting a 7.24% decrease from ZW$1.69 trillion reported during the previous week. \nReal Time Gross Settlement (RTGS) transactions were 6.42% lower to close at ZW$1.37 trillion, \nduring the week under review. In proportions, NPS transaction values were distributed as \nfollows: RTGS, 87.89%, POS, 6.67%; Mobile, 4.55%; and ATM, 0.89%. \n \n \n \n \n \n \n3 \n Figure 1: Composition of NPS Transactions in Value Terms \n \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n \nThe NPS registered a 13.59% decline in volume of transactions to close at 11.27 million, during \nthe week under analysis. NPS transaction volumes were constituted as follows Mobile, 71.66%; \nPOS, 25.60%; ATM, 0.89%; and RTGS, 1.84%, as shown in Figure 2. \n \n \n Figure 2: Composition of NPS Transactions in Volume Terms \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \n \n \n \n \n \nRTGS\n87.89%\nPOS\n6.67%\nATM\n0.89%\nMOBILE\n4.55%\nRTGS\nPOS\nATM\nMOBILE\nRTGS, 1.84%\nPOS, 25.60%\nATM, 0.89%\nMOBILE, 71.66%\nRTGS\nPOS\nATM\nMOBILE\n \n \n4 \nTable 5: National Payment Systems Activity \nPAYMENT \nSTREAM \nWEEK ENDING \n12th May 2023 \n \nWEEK ENDING \n \n19th May 2023 \n% CHANGE FROM \nLAST WEEK \nPROPORTION \n% \n \nValues in ZW$ Millions \n \n \nRTGS \n1,468,142.563 \n1,373,866.78 \n-6.42% \n87.89% \nPOS \n120,918.10 \n104,296.24 \n-13.75% \n6.67% \nATM \n15,293.82 \n13,952.21 \n-8.77% \n0.89% \nMOBILE \n80,963.53 \n71,107.60 \n-12.17% \n4.55% \nTOTAL \n1,685,318.02 \n1,563,222.82 \n-7.24% \n100% \nVolumes \n \n \nRTGS \n238,243 \n207,578 \n-12.87% \n1.84% \nPOS \n3,412,017 \n2,886,199 \n-15.41% \n25.60% \nATM \n117,329 \n100,456 \n-14.38% \n0.89% \nMOBILE \n9,278,025 \n8,078,096 \n-12.93% \n71.66% \nTOTAL \n13,045,614 \n11,272,329 \n-13.59% \n100% \nSource: Reserve Bank of Zimbabwe, 2023 \n \n3. \nTOBACCO SALES \nAs at 19th May or day 49 of the 2023 tobacco selling season, a cumulative total of 209.33 million \nkilograms of tobacco had been sold. This reflected a 50.47% increase, compared to the 139.11 \nmillion kilograms sold during the same period in 2022. Cumulative tobacco sales amounted to \nUS$628.19 million, up from US$416.74 million realized during the corresponding period in 2022, \nas shown in Table 6. \n \nTable 6: Weekly Cumulative Tobacco Sales: Day 49 (19th May 2023) \n \n2022 \n2023 \nVariance (%) \nCumulative Quantity Sold (million kgs) \n139,114,643 \n209,329,005 \n50.47 \nAverage Price (US$/kg) \n3.00000 \n \n3.00097 \n0.03 \nCumulative value (US$ million) \n416,741,373 \n628,191,022 \n50.74 \n Source: Tobacco Industry and Marketing Board (TIMB), 2022 \n \nThe average price of the golden leaf increased by 0.03% from US$0.03 dollars per kilogram, \ncompared price level registered during the the same period in 2022. \n4. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS \n \nDuring week ending 19th May 2023, weekly average prices for all commodities retreated amid \nstronger U.S dollar. Table 7 shows commodity prices developments, as shown in Table 7. \n \n \n \n \n \n5 \nTable 7: Metal and Crude Oil Prices for the week ending 19th May 2023 \n \nGold \nPlatinum \nPalladium \nCopper \nNickel \nCrude Oil \n2023 \nUS$/ounce \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nUS$/barrel \nWeekly Average (8 - 12 May) \n2,025.02 \n1,090.80 \n1,550.00 \n8,417.60 \n22,789.00 \n75.76 \n15-May \n2,015.15 \n1,06200 \n1,533.00 \n8,195.50 \n21,705.00 \n75.55 \n16-May \n2,008.68 \n1,070.00 \n1,524.50 \n8,125.00 \n21,050.00 \n74.54 \n17-May \n1,980.08 \n1,071.50 \n1,490.00 \n8,285.00 \n21,235.00 \n76.51 \n18-May \n1,968.63 \n1,066.00 \n1,464.50 \n8,216.00 \n21,150.00 \n76.50 \n19-May \n1,963.58 \n1,064.50 \n1,495.50 \n8,175.00 \n21,095.00 \n75.02 \nWeekly Average (15 - 19May) \n1,987.22 \n1,066.80 \n1,501.50 \n8,199.30 \n21,247.00 \n75.62 \nWeekly Change (%) \n-1.87 \n-2.20 \n-3.13 \n-2.59 \n-6.77 \n-0.18 \nSource: BBC, KITCO and Bloomberg, 2023 \nGold \n \nDuring the reporting week, gold average prices declined by 1.87% to US$1,987.22 per ounce \nfrom a weekly average of US$2,025.02 per ounce. The yellow metal price declined after the \ndownbeat of Chinese economic data which increased fear of moderating consumer and industrial \ndemand for precious metals from China. In addition, the debt ceiling uncertainty in the U.S also \nweighed down the prices for gold. \n \nPlatinum \nIn the week under review, platinum prices dropped by 2.2% from an average of US$1,090.80 \nper ounce in the previous week to USD$1,066.80 during the week ending 19th May 2023. The \nglobal platinum market was in deficit largely driven by the rising demand from automotive and \njewellery sectors as well as well as supply disruptions in South Africa. \n \nPalladium \nPalladium prices decreased by 3.13% from US$1,550.00 per ounce in the previous week to \nUS$1,501.50 per ounce in the reporting week. The decrease in prices was on account of low \ndemand for palladium from automotive industry amid slowdown in economic growth and a shift \ntowards alternative technologies that do not rely on palladium such as cars. \n \nCopper \nCopper prices declined by 2.59%, from a weekly average of US$8,417.60 per tonne recorded in \nthe previous week, to US$8,119.30 per tonne. Copper prices subdued as production of copper \n \n \n6 \nfrom China continues to improve, consumption remains low, resulting in building inventories \nfor end-users of copper. \nNickel \nLikewise, nickel prices weakened by 6.77% from a weekly average of US$22,789.00 per tonne \nto US$ 21,247.00 per tonne during the week under review. Nickel prices receded as production \ngrowth outpaced demand in Indonesia, the top nickel producers. \nBrent Crude Oil \n \nDuring the week ending 19th May 2023, crude oil weekly average prices declined by 0.18% from \nUS$75.76 per barrel to US$75.62 per barrel during the week under analysis. Oil prices edged \nlower as the let-down of weaker-than-expected Chinese demand outweighed stronger U.S \nconsumer data and a more bullish outlook from the International Energy Agency (IEA). To add \nmore, crude oil prices retreated over fears of a U.S. recession and risks of a historic default on \ngovernment debt in early June. \n \n5. EXCHANGE RATE DEVELOPMENTS \n \n \nInterbank Market \nOn the interbank market, the Zimbabwe dollar (ZW$) depreciated by 14.5% from an average of \nZW$1,181.71 per US$1 in the previous week to ZW$1,352.88 per US$1, during the week ending \n19th May 2023, as shown in Table 8. \n \nTable 8: Interbank Market Exchange Rates1 \n2023 \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average (12 – 15 May) \n1,181.7121 \n63.2283 \n1,489.3914 \n 88.7380 \n1,297.4576 \n15-May \n1,253.6581 \n65.5738 \n1,563.1268 \n92.2417 \n1,362.2376 \n16-May \n1,265.6205 \n66.2252 \n1,584.4973 \n93.9165 \n1,376.7569 \n17-May \n1,404.8039 \n73.5294 \n1,751.7344 \n103.5251 \n1,525.7763 \n18-May \n1,407.8179 \n72.9927 \n1,755.7081 \n103.5956 \n1,524.9667 \n19-May \n1,432.5022 \n74.0741 \n1,775.9553 \n105.4002 \n1,541.8165 \nWeekly Average (15 – 19 May) \n1,352.8805 \n70.4790 \n1,686.2044 \n99.7358 \n1,466.3108 \nAppr (-)/Depr (+) (%) of the ZWL \n14.5 \n11.5 \n13.2 \n12.4 \n13.0 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n1 Direct quote – the amount of domestic currency needed to exchange for 1 unit of foreign currency \n \n \n7 \n \n \n \n6. EQUITY MARKETS \n \n \nZimbabwe Stock Exchange \nDuring the week ended 19th May 2023, the Zimbabwe Stock Exchange (ZSE) maintained \npositive momentum for the fifth consecutive week. As a result, the ZSE All Share index gained \n31.82% to close at 83 219.72 points. The Top 10, Top 15, Medium Cap and Small Cap indices \nincreased by 33.53%, 32.90%, 26.25% and 17.53% to close the week at 51 106.33 points, 59 \n422.95 points, 149 855.48 points and 956 865.31 points, respectively. \n \nThe increase in the mainstream index was a result of share price gains in SeedCo Limited \n(100.05%), Meikles Limited (69.47%), Tanganda Tea Company Limited (60.18%), OK \nZimbabwe Limited (55.86%) and Truworths Limited (45.00%). Partially offsetting the above-\nmentioned increases was a decline in the share price of British American Tobacco (BAT) \nZimbabwe Limited (13.87%). The resource index also added 10% to close the week at 46 035.02 \npoints, compared to 41 850.98 points recorded in the prior week. \n \nTable 9: Zimbabwe Stock Exchange Statistics2 \n \nAll Share \nIndex \nPoints \nTop 10 \nindex3 \n(points) \n \n \n \nMining \nIndex \n(points) \nGrand \nMarket \nCapitaliz\nation \n(ZWL \nbillion) \nMarket \nTurnover \n(ZWL \nmillion) \nVolume \nof Shares \n(million) \nTop 15 \nIndex3 \npoints \nMedium \nCap3 \n(points) \nSmall Cap3 \n(points) \n \n \n \n14-Apr-23 \n36,174.67 \n20,710.73 \n24,671.27 \n80,404.08 \n667,752.24 \n37,359.78 \n2,970.77 \n3,308.51 \n9.88 \n21-Apr-23 \n36,894.04 \n21,387.56 \n25,315.78 \n79,094.87 \n764,280.19 \n31,763.82 \n3,072.77 \n4,533.80 \n17.53 \n28-Apr-23 \n41,391.62 \n23,764.03 \n28,301.73 \n91,349.20 \n739,049.37 \n36,393.55 \n3,482.41 \n6,089.54 \n33.55 \n5-May-23 \n49,689.11 \n29,541.33 \n34,558.62 \n99,331.49 \n745,613.66 \n36,393.55 \n4,243.78 \n2,851.78 \n19.35 \n12-May-23 \n63,129.96 \n38,273.52 \n44,713.63 \n118,695.93 \n814,159.49 \n41,850.98 \n5,352.11 \n5,847.96 \n69.79 \n19-May-23 \n83 219.72 \n51 106.33 \n59 422.95 \n149,855.48 \n956,865.31 \n46 035.02 \n6,921.29 \n11,460.08 \n43.69 \n% Change \n 31.82 \n33.53 \n 32.90 \n26.25 \n \n17.53 \n10.00 \n 29.32 \n95.97 \n-37.40 \nSource: Zimbabwe Stock Exchange (ZSE), 2023 \n \nFigure 3 shows the trend in daily market turnover for the period from 14th April 2022 to 19th May \n2023. \n \n \n \n2 The Zimbabwe Stock Exchange (ZSE) adopted the Global Industry Classification Standards, effective from 1 January 2020.The ZSE indices \nconstitute the following categories; Top 10 Index; Top 15; Top 25; Medium cap and Small cap Indices. \n \n \n \n \n8 \nFigure 3: Zimbabwe Stock Exchange All Share and Top 10 Indices \nSource: Zimbabwe Stock Exchange, 2023 \n \n \n \nMarket Turnover and Volume \n \nThe cumulative volume of shares traded decreased by 37.40% to 43.69 million during the week \nending 19th May 2023, from 69.79 million recorded in the prior week. The turnover value of \nshares amounted to ZW$11.46 billion, representing an increase of 95.97% from ZW$5.85 billion \nrecorded in the previous week. Figure 4 shows the trend in daily market turnover for the period \nfrom 6th April 2022 to 19th May 2023. \n \n Figure 4: Daily Market Turnover \nSource: Zimbabwe Stock Exchange, 2023 \n \n \n \n \n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\n90,000\n100,000\n6-Apr-22\n30-Apr-22\n24-May-22\n17-Jun-22\n11-Jul-22\n4-Aug-22\n28-Aug-22\n21-Sep-22\n15-Oct-22\n8-Nov-22\n2-Dec-22\n26-Dec-22\n19-Jan-23\n12-Feb-23\n8-Mar-23\n1-Apr-23\n25-Apr-23\n19-May-23\nAll Share Index\nTop 10 Index\n0\n2,000\n4,000\n6,000\n8,000\n10,000\n12,000\n14,000\n16,000\n18,000\n20,000\n06-Apr-22\n30-Apr-22\n24-May-22\n17-Jun-22\n11-Jul-22\n04-Aug-22\n28-Aug-22\n21-Sep-22\n15-Oct-22\n08-Nov-22\n02-Dec-22\n26-Dec-22\n19-Jan-23\n12-Feb-23\n08-Mar-23\n01-Apr-23\n25-Apr-23\n19-May-23\nZW$ millions\nNegotiated deal: 61.16 million Larfage\nCement\nZimbabwe\nLimited\nshares\nexchanged hands at ZW$312.65\n \n \n9 \nMarket Capitalization \n \nIn line with developments on the ZSE during the week under review, the local bourse gained \nZW$1.57 trillion, or 29.32% worth of capitalization to close at ZW$6.92 trillion, compared to \nZW$5.35 trillion, recorded in the previous week. Figure 5 shows ZSE market capitalization \ndevelopments for the period from 6th April 2022 to 19th May 2023. \n \nFigure 5: Daily Market Capitalization in ZW$ billions \nSource: Zimbabwe Stock Exchange, 2023 \n \nVictoria Falls Stock Exchange \n \n \nThe Victoria Falls Stock Exchange (VFEX) was characterised by bearish trading during the week \nending 19th May 2023. Resultantly, the VFEX All Share index lost 5.16% to close at 84.18 points, \ncompared to 89.18 points recorded in the previous week. The decline in the VFEX mainstream \nindex emanated from share price declines in Innscor Africa Limited (14.45%), SeedCo \nInternational (3.71%), African Sun Limited (2.55%) and National Foods Holdings Limited \n(0.17%). Partially offsetting the share price losses were gains registered in share price of Padenga \nHoldings Limited (9.85%), Axia Corporations Limited (8.89%), Simbisa Brands Limited \n(6.48%) and Nedbank Group Zimbabwe (0.37%). \n \nThe VFEX cumulative volume and value of shares traded increased by 87.61% and 226.37% to \n0.86 million shares and US$0.39 million, respectively. Market capitalization, however, lost \n5.62%, or US$0.08 billion worth of capitalization to close at US$1.33 billion, compared to \nUS$1.41 billion recorded in the previous week. Figure 6 shows the trend in the VFEX All Share \nIndex (ASI) for the period from 6th April 2022 to 19th May 2023. \n \n0\n1,000\n2,000\n3,000\n4,000\n5,000\n6,000\n7,000\n8,000\n06-Apr-22\n30-Apr-22\n24-May-22\n17-Jun-22\n11-Jul-22\n04-Aug-22\n28-Aug-22\n21-Sep-22\n15-Oct-22\n08-Nov-22\n02-Dec-22\n26-Dec-22\n19-Jan-23\n12-Feb-23\n08-Mar-23\n01-Apr-23\n25-Apr-23\n19-May-23\nBillions\n \n \n10 \nFigure 6: Victoria Falls Stock Exchange All Share Index \nSource: Victoria Falls Stock Exchange, 2023 \n \n \nJohannesburg Stock Exchange (JSE) Developments \n \nDuring the week under ending 19th May 2023, the Johannesburg Stock Exchange (JSE) All Share \nIndex decreased by 0.20% to close at 78,175.82 points, from 78,330.20 points in the previous \nweek. JSE market capitalization, however, increased by 0.63% to close at ZAR22.49 trillion \nduring the same period. \n \nTable 10: Johannesburg Stock Exchange (JSE) Statistics \nPeriod \nAll Share Index \nMarket Capitalization \n(points) \n(ZAR trillions) \n14-Apr-23 \n78,870.36 \n22.56 \n21-Apr-23 \n77,910.96 \n22.35 \n28-Apr-23 \n78,021.87 \n22.36 \n5-May-23 \n78,132.77 \n22.34 \n12-May-23 \n78,330.20 \n22.35 \n19-May-23 \n78,175.82 \n22.49 \n% Change \n \n -0.20 \n \n \n0.63 \nSource:https://www.jse.co.za/services/market-data/market-statistics, 2023 \n \n \n \n \n \n \n \n \n \n \n \n80.00\n90.00\n100.00\n110.00\n120.00\n130.00\n140.00\n150.00\n06-Apr-22\n30-Apr-22\n24-May-22\n17-Jun-22\n11-Jul-22\n04-Aug-22\n28-Aug-22\n21-Sep-22\n15-Oct-22\n08-Nov-22\n02-Dec-22\n26-Dec-22\n19-Jan-23\n12-Feb-23\n08-Mar-23\n01-Apr-23\n25-Apr-23\n19-May-23\n \n \n11 \n \n \nFigure 7: Johannesburg Stock Exchange (JSE) All Share Index \nSource:https://www.jse.co.za/services/market-data/market-statistics,2023 \n \n \n \n \n \n \n \n \nRESERVE BANK OF ZIMBABWE \n 60.00\n 65.00\n 70.00\n 75.00\n 80.00\n 85.00\n6-Apr-22\n30-Apr-22\n24-May-22\n17-Jun-22\n11-Jul-22\n4-Aug-22\n28-Aug-22\n21-Sep-22\n15-Oct-22\n8-Nov-22\n2-Dec-22\n26-Dec-22\n19-Jan-23\n12-Feb-23\n8-Mar-23\n1-Apr-23\n25-Apr-23\n19-May-23\n \n \n12 \n APPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR MAINFX3 AND SMEFX4 \n Source: Reserve Bank of Zimbabwe, 2023 \n \n \n3 Main Foreign Currency Auction \n4 Small and Medium Enterprises Foreign Currency Auction \n \nMAINFX \n 28-Apr-23 5-May-23 12-May-23 19-May-23 \n \n SMEFX \n 28-Apr-23 5-May-23 12-May-23 19-May-23 \nTotal \nBids (US$ dollars) \n19,737,187.33 \n22,810,988.28 \n23,534,849.06 \n26,816,031.89 \n1,880,263.39 \n2,574,369.18 \n2,701,090.14 \n3,558,737.72 \nAmount Allotted \n(US$ dollars) \n19,034,711.96 \n16,772,580.66 \n14,773,230.18 \n13,171,159.91 \n1,707,854.70 \n2,280,785.72 \n1,576,700.13 \n1,273,163.40 \nHighest Rate \n1,200 \n1,300 \n1,400 \n1,600 \n1,200 \n1,300 \n1,400 \n1,525 \nLowest Bid \nRate \n1,000 \n1,055 \n1,151 \n1,351 \n1,000 \n1,055 \n1,155 \n1,351 \nLowest Bid Rate \nAllotted \n1,000 \n1,055 \n1,151 \n1,351 \n1,000 \n1,055 \n1,155 \n1,351 \nWeighted Average \nRate \n1,021.2072 \n1,070.4171 \n1,212.5448 \n1,404.8039 \n1,021.2072 \n1,070.4171 \n1,212.5448 \n1,404.8039 \nNumber of Bids \nReceived \n335 \n441 \n450 \n490 \n332 \n466 \n495 \n569 \nNumber of Bids \nRejected \n2 \n5 \n8 \n7 \n7 \n7 \n9 \n15 \n \n \n13 \n APPENDIX 2: SUMMARY OF FOREIGN CURRENCY AUCTION ALLOTMENTS BY PURPOSE \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \nPurpose \nMAINFX \n 28-Apr-23 5-May-23 12-May-23 19-May-23 \nSMEFX \n 28-Apr-23 5-May-23 12-May-23 19-May-23 \nRaw Materials \n \n9,575,766.95 \n7,504,908.11 \n7,017,237.67 \n7,007,641.38 \n552,438.20 \n607,706.75 \n392,511.03 \n350,687.48 \nMachinery and \nEquipment \n2,739,872.27 \n3,212,928.08 \n3,047,072.03 \n1,926,117.50 \n581,017.60 \n858,356.28 \n590,158.96 \n415,614.30 \nConsumables \n(Incl. Spares, \nTyres, \nPackaging) \n1,885,282.66 \n1,139,123.93 \n963,868.44 \n1,001,696.74 \n200,791.74 \n210,240.59 \n200,611.76 \n202,560.71 \nPharmaceuticals \nand Chemicals \n2,172,326.50 \n404,336.92 \n407,331.35 \n341,262.52 \n32,943.09 \n74,941.02 \n57,666.08 \n62,647.17 \nServices \n(Loans, \nDividends and \nDisinvestments) \n1,356,613.01 \n1,119,089.13 \n854,682.24 \n983,240.01 \n170,760.73 \n210,240.59 \n170,312.82 \n100,494.32 \nRetail and \nDistribution \n2,172,326.50 \n2,624,559.22 \n1,390,864.07 \n1,514,194.61 \n132,432.47 \n208,569.60 \n111,545.24 \n125,715.23 \nFuel, Electricity \nand Gas \n31,874.40 \n37,507.60 \n50,000.00 \n- \n- \n- \n- \n- \nPaper and \nPackaging \n655,463.70 \n730,127.67 \n1,042,174.38 \n397,007.15 \n37,470.87 \n48,753.05 \n53,894.24 \n15,444.19 \nTOTAL \n19,034,711.96 16,772,580.66 14,773,230.18 13,171,159.91 \n1,707,854.70 \n2,280,785.72 \n1,576,700.13 \n1,273,163.40", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_19_May_2023_Volume_25_Number_20.docx.pdf"}
{"doc_id": "7e73015685bf028fa97a1ed59aef8218", "text": "Vol. 27 No. 50 \n \nWeek Ending \n12th December 2025 \n \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n \n1 \n1. OVERVIEW \nThis report presents an overview of key developments in the monetary and financial sectors for the week \nending 12 December 2025. The report includes updates on domestic money and capital markets, national \npayment systems, exchange rates and global commodity prices. \nDuring the week under review, both the local and foreign currency deposit rates remained constant across all \ntenors. The foreign currency lending rates increased for all clients, while the local currency lending rates \ndeclined across all maturities during the review period. \nThe capital market exhibited positive sentiments, with the Zimbabwe Stock Exchange (ZSE) and the Victoria \nFalls Stock Exchange (VFEX), adding 1.61% and 1.08% to close at 249.59 points and 169.41 points, \nrespectively, during the week under review. \nThe total value of transactions processed through the National Payment Systems platforms increased by \n22.84% from ZiG39.15 billion reported in the previous week to ZiG48.10 billion. The volume of transactions \nprocessed decreased by 1.46% from 17.92 million to 17.66 million during the same period. The largest share \nof transactional values was processed through the Real-Time Gross Settlement (RTGS) system, accounting \nfor 80.41%, while mobile money accounted for 83.69% of the transaction volume. \nThe Zimbabwe Gold Currency (ZiG) appreciated by 0.18% against the US dollar in the interbank market, \nreaching ZiG26.12 per US$1 during the week, from an average of ZiG26.16 per US$1 in the previous week. \nAverage international commodity prices for gold, platinum and palladium increased during the week ending \n12 December 2025, whilst nickel, Brent crude oil, and lithium prices decreased during the same week. Gold \nprices benefitted from the U.S. Federal Reserve’s interest-rate cut and growing market expectations of further \nmonetary easing. Platinum and palladium prices rose amid a persistent supply deficit. \nLithium prices were adversely affected by excess supply in the market, despite long‑term demand growth from \nEVs and storage. Nickel prices were weighed down by a structural surplus, which outpaced demand. \n \n \n \n \n \n \n \n \n \n2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n21 Nov 2025 \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \nSavings \n \n \n \n \nMinimum \n3.75 \n3.75 \n3.75 \n3.75 \nMaximum \n4.08 \n4.08 \n4.08 \n4.08 \n1-month deposit \n \n \n \n \nMinimum \n6.63 \n6.63 \n6.63 \n6.63 \nMaximum \n11.10 \n11.10 \n11.16 \n11.16 \n3-months deposit \n \n \n \n \nMinimum \n6.90 \n6.90 \n6.90 \n6.90 \nMaximum \n10.79 \n10.79 \n10.79 \n10.79 \n6-months deposit \n \n \n \n \nMinimum \n6.51 \n6.51 \n6.51 \n6.51 \nMaximum \n10.39 \n10.39 \n10.39 \n10.39 \n12-months deposit \n \n \n \n \nMinimum \n6.52 \n6.52 \n6.52 \n6.52 \nMaximum \n11.10 \n11.10 \n11.10 \n11.10 \nOver 1 year \n \n \n \n \nMinimum \n6.53 \n6.53 \n6.53 \n6.53 \nMaximum \n11.11 \n11.11 \n11.11 \n11.11 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n21 Nov 2025 \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \nSavings \n \n \n \n \nMinimum \n1.61 \n1.61 \n1.61 \n1.61 \nMaximum \n1.94 \n1.94 \n1.94 \n1.94 \n1-month deposit \n \n \n \n \nMinimum \n3.92 \n3.92 \n3.92 \n3.92 \nMaximum \n6.78 \n6.78 \n6.67 \n6.67 \n3-month deposit \n \n \n \n \nMinimum \n4.46 \n4.46 \n4.46 \n4.46 \nMaximum \n7.59 \n7.59 \n7.70 \n7.70 \n6-month deposit \n \n \n \n \nMinimum \n4.26 \n4.26 \n4.26 \n4.26 \nMaximum \n7.76 \n7.76 \n7.65 \n7.65 \n12-Month deposit \n \n \n \n \nMinimum \n4.56 \n4.56 \n4.56 \n4.56 \nMaximum \n8.00 \n8.00 \n8.00 \n8.00 \nOver 1 year \n \n \n \n \nMinimum \n4.67 \n4.67 \n4.67 \n4.67 \nMaximum \n7.72 \n7.72 \n7.72 \n7.72 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n \n3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n21 Nov 2025 \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \nIndividuals \n \n \n \n \nMinimum \n43.53 \n43.62 \n43.64 \n43.54 \nMaximum \n49.23 \n49.30 \n49.33 \n49.30 \nCorporates \n \n \n \n \nMinimum \n40.47 \n40.49 \n40.55 \n40.39 \nMaximum \n46.57 \n46.75 \n46.66 \n46.63 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n21 Nov 2025 \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \nIndividuals \n \n \n \n \nMinimum \n13.61 \n13.60 \n13.61 \n13.70 \nMaximum \n17.82 \n17.84 \n17.81 \n18.21 \nCorporates \n \n \n \n \nMinimum \n10.19 \n10.21 \n10.24 \n10.40 \nMaximum \n15.94 \n15.96 \n15.91 \n16.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending \nrates \n21 Nov 2025 \n28 Nov 2025 \n05 Dec 2025 \n12 Dec 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nEQUITY MARKETS \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG billion) \nMarket \nTurnover \n(ZiG million) \nVolume of \nShares \n(million) \n21-Nov-25 \n220.53 \n216.15 \n222.09 \n258.13 \n100.11 \n109.09 \n69.42 \n67.31 \n18.89 \n28-Nov-25 \n234.97 \n235.67 \n237.56 \n253.23 \n100.11 \n109.09 \n74.76 \n52.55 \n7.31 \n05-Dec 25 \n245.63 \n249.35 \n250.42 \n252.60 \n100.11 \n117.69 \n79.32 \n87.37 \n11.80 \n12-Dec 25 \n249.59 \n256.00 \n255.39 \n245.94 \n100.11 \n117.69 \n80.17 \n74.13 \n6.84 \nWeekly \nChange (%) \n1.61 \n2.67 \n1.98 \n(2.64) \n0.00 \n0.00 \n1.07 \n(15.15) \n(42.03) \nSource: Zimbabwe Stock Exchange, 2025 \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market \nCapitalisation \nMarket Turnover \n(US$ million) \nVolume of Shares \n(million) \n21-Nov-25 \n166.32 \n1.98 \n2.38 \n19.84 \n28-Nov-25 \n174.68 \n2.09 \n2.70 \n16.58 \n05-Dec 25 \n167.60 \n2.00 \n1.30 \n6.19 \n12-Dec 25 \n169.41 \n2.02 \n1.01 \n9.11 \nWeekly Change (%) \n1.08 \n1.00 \n(22.31) \n47.17 \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n \n \n \n \n \n4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\n90,000\n100,000\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\nZiG Thousands\nZSE Market Turnover \n50\n55\n60\n65\n70\n75\n80\n85\n90\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\nZiG Billion\nZSE Market Capitalisation \n1.4\n1.5\n1.6\n1.7\n1.8\n1.9\n2\n2.1\n2.2\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\nUS$ Billion\nVFEX Market Capitalisation \n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n115\n120\n125\n130\n135\n140\n145\n150\n155\n160\n165\n170\n175\n180\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\nIndex\nVFEX All Share Index \n0\n500\n1000\n1500\n2000\n2500\n05-Sep-25\n12-Sep-25\n19-Sep-25\n26-Sep-25\n03-Oct-25\n10-Oct-25\n17-Oct-25\n24-Oct-25\n31-Oct-25\n07-Nov-25\n14-Nov-25\n21-Nov-25\n28-Nov-25\n05-Dec-25\n12-Dec-25\nUS$ Thousand\nVFEX Market Turnover \n \n \n5 \n3. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n4. ENERGY PRICES \n \nEnergy Prices \n \n21-Nov 2025 \n28-Nov 2025 \n05-Dec 2025 \n12-Dec 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.57 \n1.57 \n1.59 \n1.59 \nPetrol Blend E5/ litre \n1.54 \n1.54 \n1.56 \n1.56 \nLP Gas / kg \n1.43 \n1.43 \n1.47 \n1.47 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n63.14 \n62.54 \n63.04 \n61.95 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n5. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n08-Dec-25 \n4,243.00 \n3.38 \n3.74 \n0.1296 \n0.1432 \n09-Dec-25 \n4,188.25 \n3.34 \n3.69 \n0.1279 \n0.1414 \n10-Dec-25 \n4,198.00 \n3.35 \n3.70 \n0.1282 \n0.1417 \n11-Dec-25 \n4,200.15 \n3.35 \n3.70 \n0.1283 \n0.1418 \n12-Dec-25 \n4,230.35 \n3.37 \n3.73 \n0.1292 \n0.1428 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n05 December 2025 \nWEEK ENDING \n12 December 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n27,556,500,116.86 \n38,672,714,755.70 \n40.34 \nOf which ZiG \n8,587,302,077.64 \n13,246,633,719.48 \n54.26 \nOf which US$ transactions \n(ZiG Equivalent) \n18,969,198,039.22 \n25,426,081,036.22 \n \n34.04 \nPOS \n3,334,163,956.81 \n2,225,643,561.40 \n(33.25) \nATM \n3,134,083,793.18 \n2,009,185,863.11 \n(35.89) \nMOBILE BANKING \n379,821,421.83 \n309,548,905.27 \n(18.50) \nMOBILE MONEY \n4,405,911,521.60 \n4,573,278,401.05 \n3.80 \nZIPIT MOBILE \n343,335,603.54 \n305,250,573.70 \n(11.09) \nTOTAL \n39,153,816,413.82 \n48,095,622,060.23 \n22.84 \n \nVOLUMES \n \nRTGS \n205,941 \n191,047 \n(7.23) \nOf which ZiG \n80,330 \n64,090 \n(20.22) \nOf which US$ \n125,611 \n126,957 \n1.07 \nPOS \n2,207,273 \n1,854,710 \n(15.97) \nATM \n337,061 \n220,372 \n(34.62) \nMOBILE BANKING \n426,124 \n312,808 \n(26.59) \nMOBILE MONEY \n14,399,970 \n14,775,800 \n2.61 \nZIPIT MOBILE \n340,764 \n301,023 \n(11.66) \nTOTAL \n17,917,133 \n17,655,760 \n(1.46) \n \n \n6 \n \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n08-Dec-25 \n09-Dec-25 \n10-Dec-25 \n11-Dec-25 \n12-Dec-25 \n1.00Oz \n \n \n \n \n \nUS$ \n4,455.15 \n4,397.66 \n4,407.90 \n4,410.16 \n4,441.87 \nZiG \n116,333.77 \n114,894.21 \n115,195.18 \n115,150.54 \n115,951.84 \n0.50Oz \n \n \n \n \n \nUS$ \n2,227.58 \n2,198.83 \n2,203.95 \n2,205.08 \n2,220.93 \nZiG \n58,166.88 \n57,447.11 \n57,597.59 \n57,575.27 \n57,975.92 \n0.25Oz \n \n \n \n \n \nUS$ \n1,113.79 \n1,099.42 \n1,101.98 \n1,102.54 \n1,110.47 \nZiG \n29,083.44 \n28,723.55 \n28,798.79 \n28,787.63 \n28,987.96 \n0.10Oz \n \n \n \n \n \nUS$ \n445.52 \n439.77 \n440.79 \n441.02 \n444.19 \nZiG \n11,633.38 \n11,489.42 \n11,519.52 \n11,515.05 \n11,595.18 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n6. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of Foreign Currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(01 Dec – 05 Dec) \n26.1635 \n1.5318 \n34.7216 \n1.8534 \n30.4349 \n08-Dec \n26.1122 \n1.5415 \n34.8286 \n1.8495 \n30.4312 \n09-Dec \n26.1262 \n1.5326 \n34.8394 \n1.8492 \n30.4357 \n10-Dec \n26.1338 \n1.5321 \n34.7711 \n1.8497 \n30.3858 \n11-Dec \n26.1103 \n1.5378 \n34.9003 \n1.8480 \n30.5216 \n12-Dec \n26.1043 \n1.5480 \n34.9643 \n1.8489 \n35.6681 \nWeekly Average \n(08 Dec – 12 Dec) \n26.11736 \n1.5384 \n34.86074 \n1.84906 \n31.48848 \nAppr (-)/Depr (+) (%) of the \nZiG \n-0.18 \n+0.43 \n+0.40 \n-0.23 \n+3.46 \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(01 Dec – 05 Dec) \n4,211.42 \n1,652.20 \n1,452.60 \n14,887.60 \n10,384.00 \n08-Dec \n4,182.20 \n1,651.00 \n1,472.00 \n14,840.00 \n10,310.00 \n09-Dec \n4,203.60 \n1,670.00 \n1,498.00 \n14,734.00 \n10,290.00 \n10-Dec \n4,208.65 \n1,662.00 \n1,473.00 \n14,652.00 \n10,300.00 \n11-Dec \n4,272.50 \n1,710.00 \n1,512.00 \n14,626.00 \n10,300.00 \n12-Dec \n4,329.90 \n1,773.00 \n1,513.00 \n14,587.00 \n10,330.00 \nWeekly Average \n(08 Dec – 12 Dec) \n4,239.37 \n1,693.20 \n1,493.60 \n14,687.80 \n10,306.00 \nWeekly change (%) \n0.66 \n2.48 \n2.82 \n(1.34) \n(0.75) \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n \n7 \nFigure 3: Average Weekly International Commodity Price Developments (5th September 2025– 12th December 2025) \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \nRESERVE BANK OF ZIMBABWE \nDECEMBER 2025 \n3,000\n3,200\n3,400\n3,600\n3,800\n4,000\n4,200\n4,400\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\nUS$/oz\nGold\n60\n61\n62\n63\n64\n65\n66\n67\n68\n69\n70\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\nUS$/oz\nCrude Oil \n1100\n1300\n1500\n1700\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\nUS$/oz\nPlatinum\n700\n900\n1100\n1300\n1500\n1700\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\nUS$/oz\nPalladium\n14,300\n14,500\n14,700\n14,900\n15,100\n15,300\n15,500\n15,700\n15,900\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\nUS$/oz\nNickel \n7,900\n8,400\n8,900\n9,400\n9,900\n10,400\n10,900\n5-Sep\n12-Sep\n19-Sep\n26-Sep\n3-Oct\n10-Oct\n17-Oct\n24-Oct\n31-Oct\n7-Nov\n14-Nov\n21-Nov\n28-Nov\n5-Dec\n12-Dec\nUS$/oz\nLithium", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_12_DECEMBER_2025_VOLUME_27_Number_50.pdf"}
{"doc_id": "4e3de92933175dba14baceb926634b56", "text": "Monetary Policy\nReview\n \n \n November 2007\nMonetary Policy\nReview\n \n \n November 2007\nSouth African Reserve Bank\nMonetary Policy Review November 2007\n© South African Reserve Bank\nAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in\nany form or by any means, electronic, mechanical, photocopying, recording or otherwise, without fully\nacknowledging the Monetary Policy Review of the South African Reserve Bank as the source. The contents of\nthis publication are intended for general information only and are not intended to serve as financial or other\nadvice. While every precaution is taken to ensure the accuracy of information, the South African Reserve Bank\nshall not be liable to any person for inaccurate information or opinions contained in this publication.\nEnquiries relating to this Review should be addressed to:\nExecutive General Manager and Chief Economist\nResearch Department\nSouth African Reserve Bank\nP O Box 427\nPretoria 0001\nTel. 27-12-3133668\nhttp://www.reservebank.co.za/mpr\nISSN: 1609-3194\nProduced by Publishing Section\nSouth African Reserve Bank\nMonetary Policy Review November 2007\nContents\nMonetary Policy Review\nIntroduction...........................................................................................................................\n1\nRecent developments in inflation...........................................................................................\n1\nThe evolution of indicators of inflation..............................................................................\n1\nFactors affecting inflation.................................................................................................\n8\nMonetary policy.....................................................................................................................\n21\nThe outlook for inflation.........................................................................................................\n26\nInternational outlook........................................................................................................\n26\nOutlook for domestic demand and supply ......................................................................\n28\nIndicators of inflation expectations ..................................................................................\n30\nThe South African Reserve Bank inflation forecast ..........................................................\n32\nAssessment and conclusion..................................................................................................\n33\nSouth African Reserve Bank\n1\nMonetary Policy Review November 2007\nMonetary Policy Review\nIntroduction\nInflation breached the upper end of the inflation target range of 3 to 6 per cent for the first\ntime since August 2003 when a year-on-year increase of 6,3 per cent was recorded in\nApril 2007. The pressures which were primarily responsible for the breach in the inflation\ntarget range were largely exogenous, emanating from oil and food price shocks, and have\nposed a challenge to many central banks around the world. However, given the potential\nimpact on inflation expectations, more generalised price-setting behaviour and monetary\npolicy credibility, the breach of the inflation target is of significant concern to the Monetary\nPolicy Committee (MPC) of the South African Reserve Bank. The most important\nchallenge for monetary policy-makers is to ensure that inflation is brought back to within\nthe target range and that inflation expectations remain anchored within the range.\nThe deterioration in the perceived medium to long-term risks to the inflation outlook have\nbeen noted by the MPC since its June 2006 meeting, when it began raising the\nrepurchase (repo) rate in response to these risks. In the period since the previous\nMonetary Policy Review was published in May 2007, some of the key inflation risks have\nproved persistent, and there has been significant volatility and uncertainty in the\ninternational environment. However, there are some signs that the economy is responding\nto the changes which have been made to the monetary policy stance. As inflation reacts\nwith a lag to these changes, the task of the MPC is to assess whether the observed\ninflation response at a particular point in time is consistent with the desired return to within\nthe target range in future.\nThis Monetary Policy Review provides an analysis of recent price developments, the\nfactors that affect inflation and the outlook for inflation. In addition, three focus topics are\npresented in boxes. The first box sets out the key points contained in a recent discussion\ndocument published by Statistics South Africa on proposed changes to the South African\nconsumer price index. The second considers the implications for monetary policy of the\nturmoil in financial markets that has arisen from spill-over effects of the subprime lending\ncrisis in the United States (US), and the third box provides an international perspective on\nthe impact of biofuels production on food prices.\nRecent developments in inflation\nThis section analyses recent trends in the main inflation indices, and reviews\ndevelopments in the main determinants of inflation in the South African economy.\nThe evolution of indicators of inflation\nThe Bank’s targeted measure of inflation, the year-on-year increase in the consumer\nprice index excluding mortgage interest cost for metropolitan and other urban areas\n(CPIX), breached the upper limit of the 3 to 6-per-cent inflation target range in April 2007\n(Figure 1). After having measured 5,5 per cent in March 2007, the CPIX inflation rate was\n6,3 per cent in April. It then increased to 6,5 per cent in July before slowing to 6,3 per\ncent in August and then rose further to 6,7 per cent in September. The impact of\ndevelopments in food prices on the CPIX inflation rate has been particularly important in\nrecent months. \n2\nInflation measured in terms of the headline consumer price index for metropolitan areas\n(CPI) increased from 6,1 per cent in March 2007 to 7,0 per cent in April, declined\nmarginally to 6,9 per cent in May, and returned to 7,0 per cent for both June and July.\nIn August, CPI inflation slowed to 6,7 per cent, before increasing to 7,2 per cent in\nSeptember 2007. Proposed changes to the South African consumer price indices\ncontained in a recent discussion document published by Statistics South Africa are\ndiscussed in Box 1 on page 7.\nFood prices, which have a weight of 25,7 per cent in the CPIX index, continued to\nincrease strongly in the period under review. Food inflation increased from a rate of \n7,8 per cent in March to 12,0 per cent in September 2007, the highest rate of increase\nsince March 2003. Figure 2 shows that the prices of grain products, vegetables as well\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nPercentage change over twelve months\n0\n3\n6\n9\n12\n2003\n2004\n2005\n2006\n2007\n \nCPI\nCPIX\nFigure 1 \nConsumer price inflation: CPIX and CPI\nSource: Statistics South Africa\nPercentage change over twelve months\n-10\n-5\n0\n5\n10\n15\n20\n25\n2003\n2004\n2005\n2006\n2007\n \nAll food items\n \nMeat\n \nSource: Statistics South Africa\n \nVegetables\n \nGrain products\n \n \nCPIX\n \nMilk, milk products and eggs\nFigure 2 \nCPIX and food inflation\nas milk, milk products and eggs have all risen strongly in recent months. The inflation\nrate for milk, milk products and eggs increased from 4,6 per cent in March 2007 to \n19,5 per cent in September. Grain and vegetable prices also recorded notable rates of\nincrease from March to September 2007, accelerating from 9,6 to 17,0 per cent and\nfrom 4,1 to 21,5 per cent, respectively. Over the same period the rate of increase in meat\nprices declined from 11,7 to 7,5 per cent.\nIn recent months the spot prices of maize moved closer to import parity prices. Due to\ndomestic drought conditions, the final estimated size of the maize harvest was 11,0 per\ncent lower than initially estimated. Yellow maize prices declined from R1 810 per ton on\n30 March 2007 to R1 592 per ton on 23 April. After increasing to R1 975 per ton on \n24 September, yellow maize traded at R1 945 per ton on 25 October. The price of white\nmaize moved in a similar fashion, declining from R1 846 per ton on 30 March to \nR1 548 per ton on 23 April, then increasing to R1 924 per ton on 24 September before\ndeclining to R1 863 per ton on 25 October.\nTable 1 reports the weighted contributions of the main components of the CPIX to the\noverall year-on-year inflation rate. As the table shows, developments in the food\ncomponent continued to contribute significantly in this regard, with its contribution\nincreasing from 2,1 percentage points when the overall inflation rate was 5,5 per cent\nin March 2007 to 3,2 percentage points when the overall rate was 6,7 per cent in\nSeptember. The transport component, which reflects the impact of petrol price\nchanges, contributed 1,1 percentage points in both April and May 2007, before\ndeclining to 0,2 percentage points in August. In September, the contribution of\ntransport increased to 0,4 percentage points mainly as a result of year-on-year growth\nbeing measured from a lower base. The contribution of the housing component\nincreased from 0,7 percentage points between April and June 2007 to 0,9 percentage\npoints in July and recorded 0,8 percentage points in both August and September. The\ncontributions of the other components to CPIX inflation remained relatively stable, with\nhousehold operations and education contributing 0,4 percentage points and fuel and\npower 0,3 percentage points to CPIX inflation in September. \nTable 1\nContributions to CPIX inflation\nPercentage change over twelve months* and percentage points\n2007\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nTotal*.................................................\n5,5\n6,3\n6,4\n6,4\n6,5\n6,3\n6,7\nOf which:\nFood..................................................\n2,1\n2,3\n2,4\n2,5\n2,7\n3,0\n3,2\nHousing.............................................\n0,6\n0,7\n0,7\n0,7\n0,9\n0,8\n0,8\nMedical care and health expenses ....\n0,5\n0,5\n0,5\n0,5\n0,5\n0,5\n0,5\nHousehold operation .........................\n0,4\n0,5\n0,5\n0,4\n0,4\n0,4\n0,4\nTransport...........................................\n0,7\n1,1\n1,1\n1,0\n0,6\n0,2\n0,4\nEducation..........................................\n0,4\n0,4\n0,4\n0,4\n0,4\n0,4\n0,4\nClothing and footwear .......................\n-0,2\n-0,2\n-0,2\n-0,2\n-0,2\n-0,2\n-0,2\nFuel and power .................................\n0,3\n0,3\n0,3\n0,3\n0,4\n0,4\n0,3\nOther.................................................\n0,7 \n0,7\n0,7\n0,8\n0,8\n0,8\n0,9\nSource: Statistics South Africa\nThe effect of excluding food and energy prices from the year-on-year CPIX inflation\nmeasure is shown in Figure 3. As Table 1 suggests, excluding food from the CPIX has a\nsignificant impact. The inflation rate for the CPIX excluding food increased from 4,5 per\nSouth African Reserve Bank\n3\nMonetary Policy Review November 2007\n4\ncent in March 2007 to 5,5 per cent in April, declined to 4,5 per cent in August and rose\nto 4,8 per cent in September. Energy prices, after providing some upward pressure\nbetween April and June 2007, had a slight moderating effect on CPIX inflation in August\nand September. The inflation rate for the CPIX excluding energy prices increased from \n5,4 per cent in March 2007 to 6,1 per cent in June, before increasing further to 6,9 per\ncent in September. The inflation rate for the CPIX excluding both food and energy prices\ntrended upward in the period under review, increasing from 4,4 per cent in March 2007\nto 4,9 per cent in September.\nThe inflation rates for the goods and services categories of the CPIX are presented in\nFigure 4. Goods prices have continued to increase at a faster pace than those of\nservices in the period under review. The inflation rate for goods increased from 5,6 per\ncent in March 2007 to 6,7 per cent in April and May, and 6,8 per cent in June and\nJuly. In August 2007 the inflation rate for the goods category receded slightly to \n6,6 per cent, before increasing to 7,2 per cent in September. The acceleration in the\nyear-on-year rate of increase in food prices from 7,8 per cent to 12,0 per cent\nbetween March and September 2007 contributed to the movement in total goods\ninflation. Services inflation increased from 5,3 per cent in March to 5,8 per cent in\nboth August and September 2007, with notable contributions from the housing\nservices and communication services components.\nThe year-on-year inflation rate for the administered price index (API) increased from\n6,3 per cent in March 2007 to 8,3 per cent in April, then declined to 5,0 per cent in\nAugust before moving higher to 5,8 per cent in September (Figure 5). However,\nexcluding petrol prices, the API inflation rate decreased from 5,8 per cent in March\nto 5,5 per cent in May, rose to 7,4 per cent in August and then declined to 7,0 per\ncent in September.\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nPercentage change over twelve months\n2003\n2004\n2005\n2006\n2007\n \nCPIX\n \nCPIX excluding energy prices\n \nCPIX excluding food prices\n \nCPIX excluding food and energy prices\nSources: Statistics South Africa and SARB calculations\n \nFigure 3 \nThe effect of food and energy prices on CPIX inflation\n2\n4\n6\n8\n10\n12\nTable 2 on the following page shows that petrol prices contributed 3,9 percentage points\nto the April 2007 API inflation rate of 8,3 per cent. The contribution of the petrol\ncomponent then declined to 1,5 percentage points in July, before contracting sharply\nand subtracting 0,1 percentage points from the API inflation rate in August. In\nSeptember, the contribution of petrol prices rose once more to 0,8 percentage points.\nBy contrast, the contribution of the electricity component increased from 1,1 percentage\npoints between March and June 2007 to 1,5 percentage points in July and August,\nbefore declining to 1,3 percentage points in September. \nSouth African Reserve Bank\n5\nMonetary Policy Review November 2007\nPercentage change over twelve months\n2003\n2004\n2005\n2006\n2007\n0\n3\n6\n9\n12\n \nGoods\nServices\nCPIX\n \nFigure 4 \nCPIX: Goods and services inflation \nSource: Statistics South Africa\nPercentage change over twelve months\n2003\n2004\n2006\n2007\n2005\n0\n3\n6\n9\n12\n15\n \nAdministered price index (API)\n \nAPI excluding petrol\n \nCPIX\nSources: Statistics South Africa and SARB calculations\nFigure 5 \nCPIX and administered prices\n6\nTable 2\nContributions to administered price inflation\nPercentage change over twelve months* and percentage points\n2007\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nTotal*.................................................\n6,3\n8,3\n7,9\n7,2\n6,6\n5,0\n5,8\nOf which:\nPetrol.................................................\n2,0\n3,9\n3,5\n2,8\n1,5\n-0,1\n0,8\nElectricity...........................................\n1,1\n1,1\n1,1\n1,1\n1,5\n1,5\n1,3\nParaffin..............................................\n0,3\n0,3\n0,2\n0,2\n0,2\n0,3\n0,3\nWater ................................................\n0,6\n0,6\n0,6\n0,6\n0,8\n0,8\n0,8\nAssessment rates..............................\n0,5\n0,5\n0,5\n0,5\n0,8\n0,8\n0,8\nEducation services ............................\n1,2\n1,2\n1,2\n1,2\n1,2\n1,2\n1,2\nOther.................................................\n0,6\n0,7\n0,8\n0,8\n0,6\n0,5\n0,6\nSource: Statistics South Africa\nFigure 6 shows that inflation measured in terms of the year-on-year change in the\nproduction price index (PPI) has receded slightly in recent months. The overall PPI\ninflation rate increased from 10,3 per cent in March 2007 to 11,3 per cent in May, before\nslowing to 9,4 per cent in both August and September. The inflation rate for the domestic\ncomponent of the PPI rose from 10,5 per cent in March to 11,2 per cent in April, then\ndeclined to 9,3 per cent in August before rising once more to 9,7 per cent in September.\nMovements in domestic mining and manufacturing prices played an important role in this\nregard. Domestic mining prices increased from 19,3 per cent to 21,9 per cent between\nMarch and April and then slowed to 3,6 per cent in September. Manufacturing prices\nincreased from 8,8 per cent in March to 9,7 per cent in May, receded to 8,0 per cent in\nAugust and then increased to 8,2 per cent in September. The inflation rate for the\nimported component of the PPI rose from 9,9 per cent in March to 11,7 per cent in May,\nthen declined to 9,2 per cent in July before rising once more to 9,7 per cent in August.\nIn September this rate declined to 8,5 per cent.\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nPercentage change over twelve months\n2003\n2004\n2005\n2006\n2007\n \nProduction price index (PPI)\n \nImported component of PPI\n \nDomestically produced component of PPI\nSource: Statistics South Africa \nFigure 6 \nProduction price inflation\n-10\n-5\n0\n5\n10\n15\nThe weighted contribution of the domestic component to PPI inflation increased from \n7,9 percentage points in March to 8,4 percentage points in April and May 2007, declined\nto 7,0 percentage points in August and then increased to 7,2 percentage points in\nSeptember. The imported component’s contribution increased from 2,4 percentage\npoints in March to 2,9 percentage points in May, before contracting to 2,2 percentage\npoints in September. \nFood prices continued to place upward pressure on the PPI inflation rate. Between\nMarch and September 2007, inflation for domestic agricultural food prices in the PPI\nincreased from 19,2 to 23,2 per cent, while the inflation rate for imported agricultural\nfood increased from 19,8 to 43,6 per cent. Manufacturing food price inflation also\nincreased over the period, although to a lesser extent. Excluding the food component\nfrom the PPI, the inflation rate for the remaining items declined from 9,2 per cent in\nMarch to 6,6 per cent in September.\nSouth African Reserve Bank\n7\nMonetary Policy Review November 2007\nBox 1 Statistics South Africa’s proposed new consumer price index basket\nAs part of the ongoing review and improvement of official statistics in South Africa, Statistics South\nAfrica (Stats SA) published a discussion document titled “Unpacking the CPI basket: A proposed\nnew selection methodology and basket for the South African CPI” on 12 September 2007. The\ndiscussion document details the rationale and composition of the proposed new consumer price\nindex (CPI) basket. Specifically, the discussion document provides interested parties with a list of\nproducts and services that are proposed to comprise the CPI as from January 2009 and solicits\ncomments thereon. The purpose of this box is to communicate key information contained in the\ndiscussion document.\nAccording to the discussion document, the composition of the proposed new CPI basket is, in part,\ninformed by changes in the collection and calculation methodologies. Most notably, the use of\nfieldworkers since 2006 to collect prices enables a broader range of items to be covered.\nConsequently, items such as minibus taxi fares; funeral and funeral insurance costs; restaurant, take-\naway and hotel prices; internet service provider fees; and laptop prices will be included for the first\ntime. Technological changes also impact on the selection of the items for the basket, e.g. VHS and\naudio cassettes and players fall out of the basket and are replaced by DVD and CD disks and players.\nGiven this broader range of products, the document proposes that the inclusion of products into the\nbasket should meet at least two criteria, namely the estimated total expenditure on a product as well\nas the percentage of households purchasing the product. These are sometimes termed plutocratic\nand democratic criteria, respectively. All those goods and services for which expenditure exceeds a\ncertain percentage1 of the total amount spent by the average household are candidates for inclusion\nin the basket, provided the proportion of households purchasing it exceeds a certain percentage. The\ncombination of these two criteria prevents entry into the basket of items that account for large outlays,\nbut are bought by relatively few households. Air travel tickets, which are purchased by slightly more\nthan 1 per cent of households, are a case in point. The proposed approach also prevents entry into\nthe basket of items that might be bought by many households, but the cost of which is insignificant,\ne.g. matches. Furthermore, the new basket takes into account variation in expenditure patterns\namong provinces which is not adequately dealt with in the current CPI. In line with the guidelines from\nthe International Labour Organization (ILO), a basket has been selected for each province so that the\nnational basket contains all the items that entered any one of the provincial baskets. It is also\nproposed that the interest cost of mortgage bonds no longer be part of the CPI basket but that an\nimputed rent variable be included.\nThe proposed changes overall will result in the total number of products in the national CPI basket\ndropping from the current 1 124 to 386 (excluding health items, which will be added later). A total of\n389 products disappear because of methodological changes, while 349 have been eliminated from\nthe basket because they do not meet the inclusion criteria (Stats SA, 2007b). The total of 386 is well\nwithin the range of products appearing in the CPIs of other countries around the world. Although this\nnumber is significantly lower than the number of indicator products in the current basket, the rigorous\nselection criteria ensure that each product is represented sufficiently by indicator products. The\ncollection of prices for those products which are not part of the current basket will start in January\n2008. The CPI will continue to be published on the basis of the current basket and weights until the\nDecember 2008 release (in January 2009). The January 2009 CPI (published in February 2009) will\nbe the first to be published on the basis of the new basket and weights (Stats SA, 2007a).\n1\nStats SA is not yet in a\nposition to determine the\nprecise proportions of\nexpenditure to be allocated to\neach of the products chosen \nto represent consumer\nexpenditure patterns. This step\nwill occur after the results of the\n2005/6 IES are published (Stats\nSA, 2007b).\n8\nFactors affecting inflation\nRecent developments in some of the main drivers of inflation in South Africa, including\ndomestic and international factors, are reviewed in this section. The outlook for these\nvariables, and therefore for inflation, is discussed in a later section.\nInternational economic developments\nThe global economic expansion continues apace and is increasingly being driven by\nrapid economic expansion in emerging markets. The most recent International Monetary\nFund (IMF) data show that growth in real gross domestic product (GDP) was 5,4 per\ncent in 2006 and remains robust at an estimated 5,2 per cent in 2007 despite the recent\nturmoil in global financial markets (Table 3). The IMF forecasts that the pace of world\ninflation will increase to 3,9 per cent in 2007 from 3,6 per cent in 2006.\nTable 3\nAnnual percentage change in real gross domestic product and \nconsumer prices \nReal GDP\nInflation*\n2006\n2007\n2006\n2007\n(estimate)\n(estimate)\nWorld ......................................................................\n5,4\n5,2\n3,6\n3,9\nAdvanced economies ............................................\n2,9\n2,5\n2,3\n2,1\nUnited States ....................................................\n2,9\n1,9\n3,2\n2,7\nJapan ................................................................\n2,2\n2,0\n0,3\n0,0\nEuro area ..........................................................\n2,8 \n2,5\n2,2\n2,0\nUnited Kingdom ................................................\n2,8\n3,1\n2,3\n2,4\nOther advanced economies ..............................\n4,4\n4,3\n2,0\n1,9\nOther emerging-market and developing countries\n8,1\n8,1\n5,1\n5,9\nAfrica..................................................................\n5,6\n5,7\n6,3\n6,6\nCentral and eastern Europe ..............................\n6,3\n5,8\n5,0\n5,1\nCommonwealth of Independent States ..............\n7,7\n7,8\n9,4\n8,9\nDeveloping Asia ................................................\n9,8\n9,8\n4,0\n5,3\nChina ............................................................\n11,1\n11,5\n1,5\n4,5\nIndia ..............................................................\n9,7\n8,9\n6,1\n6,2\nMiddle East ......................................................\n5,6 \n5,9\n7,5\n10,8\nWestern hemisphere ..........................................\n5,5 \n5,0\n5,4\n5,3\n*\nInflation data exclude Zimbabwe\nSource: IMF World Economic Outlook, October 2007\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nAccording to the discussion document, the newly weighted CPI will continue to sample prices at\nthe current rate (100 000 prices per month) and the change in the basket, together with the change\nof weights, is unlikely to change the behaviour of the overall indices (Stats SA, 2007b). \nReferences\nStatistics South Africa. 2007a. Proposed new CPI basket. Information note, September. Available\nonline: http://www.statssa.gov.za Accessed on 8 October 2007.\nStatistics South Africa. 2007b. Unpacking the CPI basket: A proposed new selection methodology\nand basket for the South African CPI. Discussion document.\nAvailable online:\nhttp://www.statssa.gov.za Accessed on 8 October 2007.\nGrowth in the US regained momentum in the second quarter of 2007, although it is\nexpected to slow somewhat in the second half of the year to record 1,9 per cent in 2007\ncompared with 2,9 per cent in 2006. Inflation in the US is projected to decline to 2,7 per\ncent this year from 3,2 per cent in 2006. \nJapan’s economy continues to expand moderately and the IMF forecasts real GDP growth\nof 2,0 per cent this year compared with the 2,2 per cent recorded in 2006. Real GDP\ngrowth in the euro area is forecast to moderate slightly to 2,5 per cent in 2007 from the\n2,8 per cent recorded in 2006. Record employment growth and continued expansion in\nthe services sector have fuelled the longest stretch of continuous economic growth in more\nthan a century in the United Kingdom (UK), with growth accelerating slightly from 2,8 per\ncent in 2006 to a forecast 3,1 per cent in 2007. \nIn Africa, real GDP growth is expected to increase slightly to 5,7 per cent in 2007 from\nthe 5,6 per cent recorded in 2006. Sub-Saharan Africa is experiencing robust\neconomic expansion and regional growth is expected to reach 6,1 per cent this year\n(the fourth successive year of growth above 5 per cent). In 2006, growth in oil-\nexporting countries in the region moderated due to supply disruptions and temporary\nsetbacks in the expansion of oil production. However, non-oil exporting economies\nwithin the region grew strongly in 2006 against the backdrop of favourable export\nprices. Stronger domestic policy frameworks improved economic performance and\nlifted fixed capital formation outlays in the region. \nDeveloping Asia remains the fastest growing region in the world and growth prospects\nremain very favourable. The IMF forecasts that China will grow by 11,5 per cent in 2007\n(its fifth successive year of double-digit growth) and India is expected to record 8,9 per\ncent growth in 2007, compared with 9,7 per cent in 2006. Economic growth improved\nsomewhat in the Latin-American economies in 2006 when these economies expanded\nat a rate of 5,5 per cent and continues to be robust in 2007 with growth estimated at\n5,0 per cent. Middle Eastern economies are estimated to be expanding by 5,9 per cent\nthis year compared with growth of 5,6 per cent in 2006.\nOil prices\nCrude oil prices rose sharply in the first seven months of 2007 amid strong global oil\ndemand, mounting geopolitical concerns, supply constraints and limited spare\ncapacity. Figure 7 shows Brent crude oil prices rebounded from levels of around\nUS$51 per barrel in mid-January 2007 to new record-high levels approaching \nUS$80 per barrel in July. Upward pressure on oil prices throughout this period\nstemmed from tight US fuel supplies, supply disruptions in Nigeria, supply restrictions\nby the Organization of the Petroleum Exporting Countries (OPEC), US refinery\ninterruptions and geopolitical tensions in Nigeria and the Middle East. Oil prices\nsubsequently started to decline as Middle East geopolitical tensions eased and\nadequate levels of US crude and fuel stocks soothed supply concerns.\nAfter declining in late August, the oil price increased further amid a series of \nUS refinery interruptions, hurricane-related concerns and large declines in US crude\ninventories. The price of Brent crude oil subsequently increased to an all-time high\nlevel of around US$88 per barrel in late-October, notwithstanding OPEC having\ndecided to increase crude oil supply by 500 000 barrels per day with effect from \nSouth African Reserve Bank\n9\nMonetary Policy Review November 2007\n10\n1 November 2007. OPEC further noted a need to keep the market adequately\nsupplied during peak winter demand and will reassess the market situation at its\nnext meeting on 5 December 2007.\nCentral bank interest rate developments\nCentral banks remained concerned about inflationary pressures stemming from high\nlevels of growth as economies increasingly operated near or beyond potential with\nassociated robust domestic demand, high resource utilisation rates and low\nunemployment ratios. Monetary policy has been tightened in various countries since April\n2007 including Australia, Canada, the Czech Republic, Korea, and Poland (Table 4).\nSome emerging-market countries including Brazil, Hungary, Russia and Thailand lowered\ntheir policy rates. Furthermore, central banks in certain industrialised countries intervened\nto provide liquidity subsequent to the turmoil that erupted in global financial markets in\nAugust 2007. The monetary policy implications of increased uncertainty in global credit\nmarkets are discussed in Box 2 on page 12. \nIn the US, the Federal Open Market Committee cut the discount rate by 50 basis points\nin mid-August to supplement liquidity. After remaining unchanged since June 2006, the\ntarget for the federal funds rate was reduced by 50 basis points to 4,75 per cent in\nSeptember 2007 to further neutralise tight credit conditions. The European Central Bank\n(ECB) raised its main interest rate by a quarter percentage point to 4,00 per cent in June\n2007 citing upside risks to price stability in the medium term, but then kept it on hold as\ncredit conditions tightened. The Bank of England raised the repo rate by a further \n25 basis points to 5,75 per cent in July and has kept it unchanged since then. Both the\nECB and the Bank of England intervened to provide liquidity due to tight credit\nconditions in September 2007.\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nFigure 7 \nPrice of Brent crude oil \n2004\n2005\n2006\n2007\n2008\nJ M M J S N J M M J S N J M M J S N J M M J S N J M M J S N\nUS dollar per barrel\n \nBrent crude spot price\n \nFutures prices (11 October 2007)\n \nFutures prices (26 October 2007)\nSource: Bloomberg\n20\n35\n50\n65\n80\n95\nTable 4\nSelected central bank interest rates\nPer cent\nCountries\n1 Jan 2007 \n26 Oct 2007\nLatest change\n(percentage points)\nUnited States ....................................\n5,25\n4,75\n18 Sep 2007\n(-0,50)\nJapan................................................\n0,25\n0,50\n21 Feb 2007\n(+0,25)\nEuro area ..........................................\n3,50\n4,00\n13 Jun 2007\n(+0,25)\nUnited Kingdom ................................\n5,00\n5,75\n5 Jul 2007\n(+0,25)\nCanada ............................................\n4,25\n4,50\n10 Jul 2007\n(+0,25)\nDenmark ..........................................\n3,50\n4,00\n7 Jun 2007\n(+0,25)\nSweden ............................................\n3,00\n3,75\n7 Sep 2007\n(+0,25)\nSwitzerland........................................\n1,50 – 2,50\n2,25 – 3,25\n13 Sep 2007\n(+0,25)\nAustralia ............................................\n6,25\n6,50\n8 Aug 2007\n(+0,25)\nNew Zealand ....................................\n7,25\n8,25\n26 Jul 2007\n(+0,25)\nIsrael ................................................\n4,50\n4,00\n30 Aug 2007\n(+0,25)\nChina ................................................\n6,12\n7,29\n15 Sep 2007\n(+0,27)\nHong Kong........................................\n6,75\n6,25\n19 Sep 2007\n(-0,50)\nIndonesia ..........................................\n9,75\n8,25\n5 Jul 2007\n(-0,25)\nMalaysia ............................................\n3,50\n3,50\n26 Apr 2006\n(+0,25)\nSouth Korea ......................................\n4,50\n5,00\n9 Aug 2007\n(+0,25)\nTaiwan ..............................................\n2,75\n3,25\n21 Sep 2007\n(+0,125)\nThailand ............................................\n5,00\n3,25\n18 Jul 2007\n(-0,25)\nIndia ..................................................\n7,25\n7,75\n30 Mar 2007\n(+0,25)\nBrazil ................................................\n13,25\n11,25\n6 Sep 2007\n(-0,25)\nChile..................................................\n5,25\n5,75\n13 Sep 2007\n(+0,25)\nMexico ..............................................\n7,00\n7,50\n26 Oct 2007\n(+0,25)\nCzech Republic ................................\n2,50\n3,25\n31 Aug 2007\n(+0,25)\nHungary ............................................\n8,00\n7,50\n24 Sep 2007\n(-0,25)\nPoland ..............................................\n4,00\n4,75\n29 Aug 2007\n(+0,25)\nRussia ..............................................\n11,00\n10,00\n19 Jun 2007\n(-0,50)\nTurkey ..............................................\n17,50\n16,75\n16 Oct 2007\n(-0,50)\nSource: National central banks\nInflationary prospects in several countries also continued to be adversely influenced by\nhigher food and fuel prices and wage pressures. The People’s Bank of China raised the\none-year working capital rate to 7,29 per cent in September, and the Bank of Israel\nraised its main interest rate in August due to inflationary pressures. The Swedish\nRiksbank also tightened monetary policy due to strong growth and rising cost pressures,\nand the Swiss National Bank raised the target for the three-month Libor as the monetary\nenvironment tightened and the inflation outlook deteriorated. \nMonetary policy was also tightened in Chile, Mexico, the Czech Republic, Poland and\nTaiwan. Chile raised its rate in response to second-round inflationary effects stemming\nfrom food price increases, while Mexico raised rates in response to a slower-than-\nexpected deceleration in inflation. The Bank of Poland increased its rate due to a\nsignificantly higher inflation forecast based on economic growth above potential, wage\npressure and deterioration in the fiscal balance. The Czech National Bank and the Bank\nof Taiwan raised their policy rates due to rising inflationary pressures.\nMonetary policy was relaxed in Brazil, Russia and Turkey. Brazil cut its Selic rate by \n25 basis points to an all-time low of 11,25 per cent in September 2007. Having reduced\nrates at each of its previous eighteen meetings the Selic rate was held constant at the\nOctober meeting. The Central Bank of the Russian Federation lowered its refinancing\nrate by 50 basis points to 10,0 per cent in June, and the Central Bank of Turkey started\neasing monetary policy and lowered its rate in September as inflation is expected to\ndecelerate further. \nSouth African Reserve Bank\n11\nMonetary Policy Review November 2007\n12\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nBox 2 The subprime lending crisis in the United States and implications for \nmonetary policy\nThe international economy has been characterised by weeks of turmoil in financial markets that has\nlargely arisen from spill-over effects of the subprime lending crisis in the United States (US). This\nbox looks at the implications for monetary policy. \nSubprime lending is the practice of making loans to borrowers who do not qualify for the best \nmarket interest rates because of their deficient credit history. A subprime mortgage is a residential\nloan that does not conform to the criteria for “prime” mortgages, and therefore has a lower expected\nprobability of full repayment. This assessment is based on the borrower’s credit record, debt \nservice-to-income ratio and at times the mortgage loan-to-value ratio. The subprime mortgage is\noffered at a higher interest rate due to the increased risk for lenders and the term “subprime”\ntherefore refers to the credit status of the borrower and not the interest rate on the loan itself.\nSubprime lending is risky for both lenders and borrowers due to the combination of high interest\nrates, poor credit history and adverse financial situations usually associated with subprime\napplicants. Subprime lending has become increasingly controversial to the extent that its opponents\nhave alleged that most subprime lending is the result of predatory lending practices that inevitably\nlead to default, seizure of collateral, and foreclosure. However, proponents of subprime lending\nmaintain that the practice extends financial services to people who would otherwise not have access\nto them.\nSeveral legal amendments in the US and other countries during the 1980s and 1990s encouraged\nthe growth of the subprime market and resulted in significant financial innovation. Although these\ndevelopments extended financial services to lower income groups, they also resulted in a systemic\ndeterioration in credit quality in these countries largely as a result of some of the innovation that\nenabled banks to sell their loans. Various new financial instruments enabled loans to be packaged\ninto complex products designed to satisfy investors’ demand for income when yields on most\nalternative financial instruments were much lower. When loans can be rapidly ejected from bank \nbalance sheets, bankers have less incentive to worry about the creditworthiness of borrowers.\nQuestionable practices also occurred in the subprime mortgage lending market, such as selling\nadjustable rate mortgages with temptingly low rates initially without adequately explaining the \nimplications when the full interest rates kick in. As thousands of borrowers began defaulting, \nseveral major American subprime lenders filed for bankruptcy. The collapse of the subprime\nmortgage market in the US boosted market interest rates and prompted lenders to hold back on\nloans to all but the safest borrowers. The problem extended beyond the subprime mortgage sector\nin the US and elsewhere as credit conditions tightened across the board and parts of the credit \nmarkets in various countries ceased to function effectively. This financial contagion has led to a\nrestriction on the availability of credit in world financial markets. \nCentral bankers have increasingly warned that the markets are under-pricing risk. However, at the\nonset of the financial crisis in August, the main central banks' first responses varied – the European\nCentral Bank (ECB), at one extreme, was the first to augment money-market liquidity and the Bank\nof England, at the other, refrained from adopting any unusual measures. It was also important to\ndetermine whether this particular crisis was one of liquidity or solvency because the respective\ndiagnoses call for different policy remedies – liquidity constraints can be addressed with monetary\npolicy while an enduring credit problem would require a fiscal solution as well. The different policy\nresponses by central banks in part reflected the specific nature of the first financial pressures to\nbreak the surface in each country. The initial problems surfaced in July 2007 when two hedge funds\nrun by Bear Stearns, a Wall Street investment bank, incurred significant losses in subprime\nmortgages. This raised the question of whether billions of dollars worth of other mortgages around\nthe system in other highly leveraged funds were similarly mispriced. Investors suddenly realised that\nif ratings agencies had done a poor job of rating subprime debt, the market could not be certain\nthat the same mistakes were not being made with all the other innovative products. \nIn the first weeks of August 2007 confidence ebbed and the risk appetite diminished across the\ncredit markets to the point where central bank intervention was required to address a seizure in\nshort-term money markets whereby banks became reluctant to lend to each other overnight. An\nunprecedented de-leveraging process in the financial system gained momentum as many of the\nnewer financial products were not required to be marked to their market value in a timely way. The\nExchange rate developments\nThe nominal effective exchange rate of the rand (NEER), which measures the foreign\nexchange rate against a basket of thirteen currencies, changed little between May and\nearly October 2007 (Figure 8). After depreciating to 74,5 index points in mid-August in\nthe wake of the turbulence in international financial markets, the NEER recovered to\naverage 78,4 index points in the week preceding the October MPC meeting. By late\nOctober the NEER had appreciated to around 82 index points.\nSouth African Reserve Bank\n13\nMonetary Policy Review November 2007\nnew volatility in markets also caused self-feeding value destruction as widely used, but sometimes\nflawed, risk-management models caused forced selling as everyone sought to reduce risk\nexposure simultaneously. This is important for the real economy in the sense that if an economy is\nrobust but unsoundly financed, it will not remain robust for long. \nAfter liquidity constraint announcements by certain banks in France, Germany and the United\nKingdom during the remainder of August, a desperate attempt by various financial institutions in\nthese countries followed to obtain sufficient funding in the interbank market and disparate attempts\nto defend interest rates in various money markets. As uncertainty about risk emerged, confidence\nand liquidity drained away. As more evidence arose of a more serious credit crunch where the\nproblems of over-stretched home owners, mortgage lenders, house builders and highly leveraged\nfinancial institutions raised concerns about solvency, the differences between the central banks\nbegan narrowing and a more common diagnosis of developments and the most appropriate\nresponse began emerging. It had become abundantly clear that significant damage was done to\nconsumer and business confidence and to the robustness of expenditure and that output gaps\nmay also be impacted by less robust expenditure. After a meeting of the Bank for International\nSettlements (BIS) in September, central bankers stressed the importance of resolving the current\nfinancial crisis without more serious dislocation of capital markets, possible large-scale bank\nlosses, and widening potential damage to the real economy.\nEmerging markets have not experienced the same level of disruption as the developed economies\nfrom the recent financial market turbulence. According to the IMF’s latest Global Financial Stability\nReport, emerging markets are characterised by risks that are balanced between slightly lower\nsovereign risks because of their generally good economic fundamentals, and increasing risks in\nsome emerging-market economies that are experiencing rapid credit growth and an increasing\nreliance on flows from international capital markets. However, authorities in some emerging\nmarkets have been advised to strengthen surveillance to ensure vulnerabilities do not build to more\nsystemic levels, even though key indicators suggest that banking systems in emerging markets are\ncurrently profitable and well capitalised.\nIdeally, even in times of financial turbulence, decisions on interest rates by monetary authorities are\nbased on a forward-looking economic forecast and a balance of risks around that forecast. Sharp\nswings in financial market prices and volumes that change the financial conditions for the real\neconomy can affect both the central forecast and, perhaps to a greater extent, the risks around the\nforecast. This, in turn, could lead to a change in policy stance and amounts to a middle way on the\nimportant question of moral hazard, i.e. no policy rate cuts simply to bail out distressed investors,\nbut no undue risks with the economy to prove the point. These risks accentuate the importance of\nmaintaining a stable and transparent monetary policy regime. \nReferences \nCallan, E and Krishna, G. 2007. “Bankers try to piece together subprime puzzle”. Financial Times,\n30 August.\nInternational Monetary Fund. 2007. “Financial Market Turbulence: Causes, Consequences, and\nPolicies”. Global Financial Stability Report. September.\nKiff, J and Mills, P. 2007. “Money for Nothing and Checks for Free: Recent Developments in U.S.\nSubprime Mortgage Markets”. IMF Working Paper (WP/07/188).\n14\nThe bilateral exchange rates of the rand against the US dollar and the euro in Figure 8\npartly reflect the weakness of the US dollar against a number of major currencies\nincluding the euro in recent months, as well as capital inflows, strong commodity prices\nand the favourable outlook for the South African economy. The recent offer by the\nIndustrial and Commercial Bank of China for a 20 per cent stake in Standard Bank is\nalso important in this regard. The rand strengthened from R7,48 against the US dollar\non 17 August to R6,51 per US dollar on 26 October. Over the same period, the currency\nstrengthened from R10,05 to R9,32 against the euro.\nLabour markets\nDespite wage trends reflecting the upward drift in inflation expectations, developments\nin the labour markets remain broadly consistent with the inflation target (Figure 9).\nWage inflation as measured by the year-on-year growth in nominal remuneration per\nworker in the formal non-agricultural sector declined from 8,6 per cent in the fourth\nquarter of 2006 to 4,9 per cent in the first quarter of 2007 before increasing to 7,5 per\ncent in the second quarter. Over the same quarters, the year-on-year growth in labour\nproductivity (the ratio of real value added to employment in the formal non-agricultural\nsector) slowed from 3,2 per cent to 2,3 per cent and further to 1,9 per cent.\nConsequently, economy-wide unit labour cost inflation (i.e. wage inflation adjusted for\nproductivity changes in the formal non-agricultural sector) declined from 5,3 per cent\nin the final quarter of 2006 to 2,5 per cent in the first quarter of 2007 before rising to\n5,5 per cent in the second quarter.\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nIndex: 2000=100 (foreign currency per rand)\nRand per euro\nRand per US dollar\nFigure 8 \nExchange rates of the rand\n2006\n2007\nMar\nMay\nJul\nSep\nNov\nJan\n \nNominal effective exchange rate of the rand (NEER)\n \nRand per US dollar \n \nRand per euro (right-hand scale)\n70\n75\n80\n85\n90\n95\n100\n105\n5,0\n6,0\n7,0\n8,0\n7,0\n7,5\n8,0\n8,5\n9,0\n9,5\n10,0\n10,5\nMar\nMay\nJul\nSep\nNov\nJan\nThe results of the wage settlements survey published by Andrew Levy Employment\nPublications in September 2007 are reproduced in Figure 10. According to the survey,\nthe average level of wage settlements was 7,2 per cent for the nine months ending \n30 September 2007 compared to 6,4 per cent in the same period in 2006, and the\nannual average of 6,5 per cent for 2006 as a whole. \nSouth African Reserve Bank\n15\nMonetary Policy Review November 2007\nPercentage change over four quarters\n2001\n2002\n2003\n2004\n2006\n2007\n2005\nFigure 9 \nRemuneration per worker, labour productivity and \n \nunit labour cost in the formal non-agricultural sector\n \nNominal unit labour cost\n \nRemuneration per worker\n \nLabour productivity\n \n \nSources: Statistics South Africa and SARB calculations\n0\n2\n4\n6\n8\n10\n12\n14\n16\nPer cent \nFigure 10 Average annual inflation and wage settlements\n \nCPI\n \n \nData for 2007 are for the nine months ending 30 September 2007 \nSources: Andrew Levy Employment Publications and Statistics South Africa\n2006\n2004\n2002\n2000\n1998\n1996\n1994\n0\n2\n4\n6\n8\n10\n12\n14\nAverage wage settlements\nCPIX\n16\nDemand and output \nSouth Africa’s economic upswing continued in the first half of 2007 (Table 5). The real\noutput growth rate of 4,5 per cent in the second quarter of 2007, which was marginally\nlower than the 4,7 per cent recorded in the first quarter, is in line with the Bank’s estimates\nof potential output growth. Both sustained global economic growth and a favourable\ndomestic environment have continued to underpin robust activity in the economy.\nTable 5\nGrowth in real gross domestic product and expenditure components\nPer cent*\n2006\n2007\n2nd qr\n3rd qr\n4th qr\nYear\n1st qr\n2nd qr\nFinal consumption expenditure:\nHouseholds ....................................\n8,1\n7,6\n7,8\n7,3\n7,4\n5,5\nGeneral government ........................\n15,7\n-4,4\n4,7\n5,4\n13,9\n-3,1\nGross fixed capital formation ..............\n12,8\n14,0\n16,4\n12,7\n21,8\n14,2\nChange in inventories (R billions)** ......\n16,3\n9,0\n21,8\n15,8\n11,8\n10,5\nGross domestic expenditure ............\n9,0\n1,4\n12,3\n8,7\n5,8\n1,1\nExports of goods and services ..........\n24,9\n19,4\n38,7\n5,5\n-11,2\n4,0\nImports of goods and services ..........\n34,4\n5,5\n58,3\n18,4\n-5,0\n-5,8\nGross domestic product ..................\n5,5\n4,5\n5,6\n5,0\n4,7\n4,5\n*\nQuarterly data refer to quarter-on-quarter growth at annual rates of seasonally adjusted data \n**\nConstant 2000 prices\nReal output growth in the second quarter of 2007 reflected the improved performance\nof the primary and tertiary sectors which grew at rates of 2,6 per cent and 5,5 per cent,\nrespectively. In the primary sector, a growth rate of 10,5 per cent was recorded in the\nagricultural sector while the real value added by the mining sector was essentially\nunchanged from the level achieved in the first quarter of 2007. The tertiary sector’s faster\ngrowth performance in the second quarter was mainly due to increased activity in the\nfinance, insurance, real-estate and business services sector as well as the transport,\nstorage and communication sector. The performance of these sectors more than\nneutralised a moderation in the growth in real value added by the trade sector. Real\noutput growth in the secondary sector slowed to a rate of 2,7 per cent in the second\nquarter of 2007 as growth in the manufacturing sector, in particular, slowed to just 0,5 per\ncent. Growth in the real value added by both the construction sector and the sector that\nsupplies electricity, gas and water also moderated slightly in the second quarter. \nTable 5 shows that growth in domestic expenditure slowed significantly. Real gross\ndomestic expenditure recorded annualised growth of 1,1 per cent in the second quarter\nof 2007, reflecting slower growth in real domestic final demand and a further slowdown\nin inventory accumulation. Real final consumption expenditure by households grew at a\nrate of 5,5 per cent and real gross fixed capital formation at a rate of 14,2 per cent, while\nreal government consumption expenditure contracted by 3,1 per cent in the quarter. The\nslowdown in growth in real final consumption expenditure by households during the\nsecond quarter of 2007 was mainly due to a contraction in real spending on durable\ngoods as well as a moderation in the spending on non-durable goods. After increasing\nby 13,9 per cent in the first quarter of 2007, largly as a result of the purchase of military\nequipment, final consumption expenditure by government declined by 3,1 per cent in\nthe second quarter. General government’s real compensation of employees edged lower\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nduring the second quarter of 2007 due to a decline in salaries and wages accruing \nto employees participating in the four-week public-sector strike. Gross fixed capital\nformation as a percentage of GDP increased to 21,1 per cent in the second quarter \nof 2007.\nAlthough the deficit on the trade account narrowed in the second quarter of 2007, a\nsubstantial increase in net service, income and current transfer payments to non-\nresidents resulted in the deficit on the current account of the balance of payments\nnarrowing only slightly to 6,5 per cent of GDP from 6,9 per cent in the first quarter.\nExport proceeds gained from an increase in the volume of goods exported in the second\nquarter of 2007 as well as from higher rand prices of exports. Real exports had\ncontracted by 3,1 per cent in the preceding quarter. Although the volume of\nmerchandise imports contracted by 1 per cent in the second quarter due to the\nmoderate slowdown in domestic demand, the value of merchandise imports increased\nby 1,4 per cent as rising international oil and other prices outweighed the appreciation\nof the rand during the same period.\nThe deficit on the current account of the balance of payments continued to be\ncomfortably financed by net financial inflows. By 25 October 2007, net non-resident\npurchases of bonds and equities totalled R91,9 billion. Both the gross gold and other\nforeign-exchange reserves and the international liquidity position of the Bank increased\nover the past six months to reach levels of US$30,5 billion and US$28,4 billion,\nrespectively, at the end of September 2007.\nReal-estate and equity prices\nFigure 11 shows that the growth in house prices continued to moderate in the period\nunder review. The year-on-year rate of change in the Absa House Price Index declined\nslightly from 15,5 per cent in May 2007 to 14,2 per cent in September, while the\nStandard Bank House Price Index slowed from 10,9 per cent to 5,7 per cent over the\nsame period despite spiking to 18,8 per cent in June2. \nSouth African Reserve Bank\n17\nMonetary Policy Review November 2007\nPercentage change over twelve months\n2003\n2004\n2005\n2006\n2007\n0\n5\n10\n15\n20\n25\n30\n35\n40\n \nAbsa House Price Index\n \nStandard Bank House Price Index\nSources: Absa and Standard Bank\nFigure 11 House prices \n2\nThe Absa House Price\nIndex records the total\npurchase price of houses in the \n80 – 400 m2 size category,\nvalued at R2,7 million or less in\n2006 and for which loan\napplications were approved by\nAbsa. The Standard Bank index\nis based on the median price of\nthe full spectrum of recorded\nhouse prices. states that these\nprices are generally highly\ncorrelated with those of the\nDeeds Office.\n18\nBuilding statistics published by Statistics South Africa suggest that the level of\neconomic activity in the real-estate sector continued to decelerate when compared to\n2005 levels (Table 6). After increasing by 25,7 per cent in 2005, the total real value of\nbuildings completed increased by 21,4 per cent in 2006 and by 14,3 per cent in the\nfirst eight months of 2007 when compared to the same period a year ago. This\nslowdown is a result of developments in the residential sector, where growth has\nslowed from 32,7 per cent in 2005 to 16,7 per cent in 2006, and to 7,1 per cent in\nthe first eight months of 2007 compared to the same period in 2006. By contrast, the\ntotal real value of buildings completed in the non-residential sector rose by 30,6 per\ncent in 2006 and has increased by 47,5 per cent in the first eight months of 2007\nwhen compared to the same period a year ago.\nTable 6\nReal value of building plans passed and buildings completed in \nlarger municipalities\nAnnual percentage change\n2003\n2004\n2005\n2006\n2007*\nBuilding plans passed\nTotal ......................................................\n11,3\n35,7\n36,3\n7,5\n0,6\nResidential ........................................\n16,3\n42,0\n29,8\n2,7\n0,8\nNon-residential ..................................\n3,5\n23,8\n53,6\n28,3\n-2,1\nAdditions and alterations ..................\n6,3\n29,1\n41,6\n5,0\n2,1\nBuildings completed\nTotal........................................................\n6,8\n26,2\n25,7\n21,4\n14,3\nResidential ........................................\n8,1\n38,4\n32,7\n16,7\n7,1\nNon-residential ..................................\n8,7\n8,2\n6,7\n30,6\n47,5\nAdditions and alterations ..................\n1,4\n7,9\n18,1\n33,1\n12,8\n*\nFigures for January – August 2007 compared with the corresponding months of 2006\nSource: Statistics South Africa\nThe corresponding real value of building plans passed, which provides an indication of\nfuture construction activity, points to a significant decline in building activity in both the\nresidential and non-residential sectors. The total real value of building plans passed\nincreased by 0,6 per cent in the first eight months of 2007. This was the result of a\nsignificant slowdown in the non-residential sector, where the real value of plans passed\ncontracted by 2,1 per cent over the period.\nOn the JSE Limited (JSE), the all-share index (Alsi) traded above the 29 000 level for\nthe first time in May 2007 (Figure 12). Mergers and acquisitions, increased demand for\nsecurities by non-resident investors, and favourable conditions for resource stocks\ncontributed to the record highs. Negative sentiment emerged between July and\nAugust due to concerns surrounding large foreclosures and delinquencies in the \nUS subprime mortgage markets, as well as rising oil prices that pointed to a\ndeteriorating inflation outlook. Towards the end of July the market rebounded as\ninvestors became convinced that the sell-off was overdone. On 11 October, the Alsi\ntraded at new record levels of above 31 500 and then receded to around 30 805 on\n26 October due to global credit and liquidity concerns. The record highs were due to\nrenewed investor interest in commodity and financial stocks, as well as an\nimprovement in global investor sentiment.\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nFiscal policy \nThe Medium Term Budget Policy Statement (MTBPS) which was released on \n30 October 2007 depicts a continued strong fiscal position which remains supportive of\nmonetary policy. Revised estimates of key public finance data for the fiscal year\n2007/08, as well as medium-term projections for the fiscal years to 2010/11 are\npresented in Table 7. As a consequence of revisions to both revenue and expenditure,\nthe budget surplus for 2007/08 is now projected at R10,8 billion, or 0,5 per cent of GDP,\ncompared to the 0,6 per cent of GDP projected in February 2007. In the medium term\nrevenue is expected to exceed expenditure, resulting in projected budget surpluses of\n0,7 per cent, 0,6 per cent and 0,5 per cent of GDP for fiscal years 2008/09, 2009/10\nand 2010/11, respectively. \nTable 7\nPublic finance data\nR billions* and per cent\n2006/07\n2007/08 2007/08\n2008/09\n2009/10 2010/11\nActual\nBudget\nRevised\nMedium-term\nestimates\nNational government*:\nRevenue..............................................\n481,2\n544,6\n553,1\n616,0\n679,6\n740,5\nExpenditure ........................................\n470,2\n533,9\n542,4\n599,9\n665,6\n726,2\nBudget balance ..................................\n11,0\n10,7\n10,8\n16,2\n14,0\n14,3\nAs percentage of GDP:\nBudget balance ..................................\n0,6\n0,6\n0,5\n0,7\n0,6\n0,5\nTotal net loan debt ..............................\n26,7\n24,3\n23,0\n20,3\n17,9\n15,8\nDebt service cost ................................\n2,9\n2,7\n2,6\n2,3\n2,1\n1,9\nPSBR** ..............................................\n-0,2\n0,3\n0,3\n0,8\n1,1\n1,2\n**\nPSBR: Public-sector borrowing requirement\nSource: National Treasury Medium Term Budget Policy Statement 2007\nSouth African Reserve Bank\n19\nMonetary Policy Review November 2007\nIndex\nIndex\n2004\n2003\n2005\n2006\n2007\nFTSE/JSE all-share index\nFTSE/JSE resources index (right-hand scale)\nFTSE/JSE industrials index\nFTSE/JSE financials index\nFigure 12 Share price indices\n5000\n10000\n15000\n20000\n25000\n30000\n35000\n10000\n20000\n30000\n40000\n50000\n60000\n70000\n80000\n20\nIn line with continuing sustained economic performance and revenue collection, the\nnational government revenue for 2007/08 has been revised to R553,1 billion, which is\nR8,5 billion more than the estimate provided in the February 2007 Budget. The revised\nestimate for expenditure in 2007/08 is R542,4 billion, compared to R533,9 billion\nprojected in the 2007 Budget. Upward revision of expenditure is partly a reflection of\ncontinuing infrastructural investments. The revised public-sector borrowing requirement,\nwhich is the consolidated cash borrowing requirement of general government and public\nenterprises, is estimated at 0,3 per cent of GDP in 2007/08 and is projected to rise to\n0,8 per cent, 1,1 per cent and 1,2 per cent of GDP in 2008/09, 2009/10 and 2010/11,\nrespectively. \nMonetary conditions\nFigure 13 shows that the 12-month growth rate of the broad monetary aggregate (M3)\nincreased from 20,0 per cent in March 2007 to 25,8 per cent in August before decelerating\nto 24,9 per cent in September. While more volatile, the growth rates of the narrower M1\nand M2 aggregates were slightly lower than that of M3 in the period under review. The\nstrong monetary growth continued to be underpinned by rising nominal income and\nexpenditure, buoyant turnover in the financial markets and positive wealth effects, while\nspeculative and precautionary demand for money probably also played a significant role. \nTotal loans and advances to the private sector3 have continued to grow strongly despite\nincreases in lending rates since June 2006 (Figure 14). In the period under review, the year-\non-year growth in total loans and advances to the private sector increased from 26,2 per\ncent in March 2007 to 27,7 per cent in June before slowing to 25,2 per cent in September.\nThe growth in mortgage advances was an influential component of total loans and\nadvances, slowing from 27,9 per cent in March to 26,1 per cent in September. The growth\nin instalment sale credit and leasing finance slowed from 17,2 to 11,7 per cent in July and\nthen accelerated to 15,2 per cent in September. Growth in the category other loans and\nadvances increased from 28,1 per cent in March to 36,7 per cent in June before slowing to\n28,4 per cent in September.\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nPercentage change over twelve months\n2004\n2006\n2005\n2007\nFigure 13 Growth in the monetary aggregates\nM1\nM2\nM3\n0\n5\n10\n15\n20\n25\n30\n3\nTotal loans and advances\nto the domestic private sector\nconsist of instalment sale credit,\nleasing finance, mortgage\nadvances, overdrafts, credit\ncard and general advances. The\nfirst three categories are\nreferred to as asset-backed\ncredit, while the last three\ncategories together are referred\nto as other loans and advances.\nMonetary policy \nSince the previous Monetary Policy Review (MPR) there have been further changes in\nthe stance of monetary policy. As was outlined in the previous MPR, the monetary policy\nstance remained unchanged at the first two meetings of the MPC in 2007 following the\ncumulative 200-basis-point increase at the last four meetings of 2006 (Figure 15). In\nFebruary and April 2007 the outlook was initially viewed as having improved sufficiently\nto justify a pause in the upward phase of the interest rate cycle. However, as noted in\nthe previous MPR, the MPC had indicated that the unchanged stance at these two\nmeetings did not necessarily signal an end to the tightening cycle. The outlook for\ninterest rates would be dependent on the MPC’s further assessment of the evolution of\nthe determinants of inflation as well as the assessment of the risks to the outlook.\nSouth African Reserve Bank\n21\nMonetary Policy Review November 2007\nPercentage change over twelve months\n2001\n2000\n2002\n2003\n2006\n2004\n2005\n2007\nFigure 14 Growth in loans and advances\nOther loans and advances\nTotal loans and advances\nMortgage advances\nInstalment sale and leasing finance\n-10\n0\n10\n20\n30\n40\nPer cent\n2004\n2003\n2005\n2006\n2007\nPrime overdraft rate\nRepo rate\n3-month NCD rate\nFigure 15 The repo and other short-term interest rates\n6\n8\n10\n12\n14\n16\n18\n22\nBy the time the MPC met in June 2007, the most recent CPIX data, for April, showed\nthat inflation had breached the upper end of the inflation target range for the first time\nsince August 2003. A year-on-year increase of 6,3 per cent was recorded in April and it\nhas remained above 6 per cent since then. Although it was of significant concern to the\nBank that inflation had breached the upper level of the inflation target range, the actions\nof the MPC were not predicated on the actual breach but on the expected path of\ninflation. There is little that monetary policy can do to influence current and near-term\ninflation, given the lags with which monetary policy operates. \nThe South African Reserve Bank is also not alone among central banks in missing its target\nin the past year. The pressures primarily responsible for the breach of the inflation target\nrange, emanating from exogenous oil and food price shocks, are global phenomena which\nare posing challenges to many central banks. However, this does not mean that near-term\ndevelopments can be ignored. Inflation expectations and monetary policy credibility are\ndetermined in part by such considerations, and the overriding challenge for monetary\npolicy-makers is therefore to ensure that inflation is brought back to within the target range\nand that inflation expectations remain anchored within this range.\nAt the past three meetings of the MPC, the focus remained on ensuring a return of the\ninflation rate to within the target range. By the June 2007 meeting there had been some\ndeterioration in the inflation outlook compared to the previous two meetings. The risks to\nthe outlook were seen to be strongly on the upside despite continued low global inflation,\nsustained fiscal discipline and a relatively stable exchange value of the rand. Oil prices,\nhaving declined to a low of US$51 per barrel in January, were trading above US$72 per\nbarrel once again and indications were that these higher levels would be sustained.\nPressures from food prices were also expected to persist. Despite some moderation in\nmeat price inflation, food price increases were becoming more generalised. Grain\nproducts were responding strongly to the higher maize prices. \nOf further significance was the fact that household consumption expenditure growth\nremained very strong at around 7 per cent and apart from some decline in motor vehicle\nsales, had shown little sustained response to the previous monetary policy tightening.\nFurthermore, the results of the inflation expectations survey conducted in May showed\nthat inflation expectations had risen again to the levels recorded in the fourth quarter of\n2006, a finding corroborated by evidence from long-term bond yields and break-even\ninflation rates.\nThe forecasts of the Bank also showed a further deterioration in the inflation outlook\ncompared to the April forecast. It was projected that CPIX inflation would remain\nmarginally above the upper level of the inflation target range in the second quarter of\n2007, decline for technical reasons in the third quarter and then exceed 6 per cent in\nthe subsequent two quarters, peaking at an average of 6,3 per cent in the first quarter\nof 2008. Thereafter, CPIX inflation was projected to decline to an average of 5,3 per cent\nin the fourth quarter of 2008. Given these developments, it was decided that the repo\nrate be increased by 50 basis points to 9,5 per cent per annum in June 2007 to ensure\nthat CPIX inflation returns to within the inflation target range over time.\nAt the time of the August 2007 meeting of the MPC, the international environment had\nbecome increasingly volatile and uncertain. Financial market developments in certain of\nthe developed economies had had spill-over effects on emerging markets, including\nSouth Africa, and had prompted a number of central banks to inject substantial amounts\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nof liquidity into their banking systems. The impact on South Africa was felt in the foreign-\nexchange and the equities markets. In the wake of the financial market turbulence, the\nrand depreciated from around US$6,80 in July to R7,45 at the August meeting. The all-\nshare index on the JSE had also declined by about 13 per cent. The MPC felt it was still\ntoo early to assess the longer-term implications of these developments. The committee\ndecided that it was appropriate to remain focused on the inflation target and react to\nfinancial market developments insofar as they impacted on the inflation outlook.\nHowever, the upside risks to the inflation outlook identified in June remained in place,\nand the central forecast of the Bank indicated a slight deterioration when compared to\nthe June forecast. CPIX inflation was now expected to remain above the upper level of\nthe inflation target range at an average of around 6,3 per cent before reverting to within\nthe inflation target range in the second quarter of 2008, and reaching around 5,1 per\ncent by the end of 2009. \nThere was also further evidence that the inflation pressures were not emanating only\nfrom food and energy, but were more generalised. Household consumption expenditure\ngrowth was showing no significant signs of abating and indicators of consumer\nconfidence were still high. Rates of growth in credit extension were also high at around\n25 per cent. The MPC accordingly decided that a further adjustment to the monetary\npolicy stance was required and increased the repo rate by 50 basis points to 10,0 per\ncent per annum.\nAt the October 2007 MPC meeting there were signs that the economy was responding\nto the higher interest rate environment. There was clear evidence of a moderation in\nhousehold consumption expenditure, which grew by 5,5 per cent in the second quarter\nof 2007, and domestic economic growth had declined to levels broadly consistent with\nthe Bank’s view of potential output growth. The challenge for the committee was to\nassess whether these developments would be sustained and sufficient to bring inflation\ncomfortably within the inflation target range.\nThe view of the MPC was that despite this moderation, the risks to the outlook were still\non the upside. The central forecast of the Bank’s core model showed that inflation was\nexpected to peak at a level of 6,8 per cent in the first quarter of 2008, decline to 6,0 per\ncent in the second quarter, and reach 5,2 per cent at the end of 2009. Factors of\nconcern to the MPC included the further deterioration of inflation expectations which\nwere also reflected in higher nominal wage settlements, continued pressures emanating\nfrom food and oil prices, and high rates of growth in credit extension to households. On\nthe positive side, the exchange rate of the rand had recovered to the levels prevailing\nbefore the international financial market turbulence. On balance, it was decided that\ndespite the positive developments, a further upward adjustment of the repo rate was\nrequired and it was accordingly increased by 50 basis points.\nGoing forward, the challenge for monetary policy remains to bring CPIX inflation back to\nwithin the inflation target range. Although the breach of the target can be seen as a setback\nfor monetary policy, the main inflation drivers were factors beyond the direct influence of\nmonetary policy. However, the MPC is mindful of the impact of these developments on\ninflation expectations and also of the need to act against the emerging generalised inflation\npressures. The most recent inflation forecasts of the Bank suggest that inflation should\nreturn to within the inflation target range during the second half of next year, and monetary\npolicy will continue to be applied to ensure that this outcome is achieved.\nSouth African Reserve Bank\n23\nMonetary Policy Review November 2007\n24\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nBox 3 An international perspective on biofuels\nBiofuels are of interest not only because of their potential as an alternative energy source to fossil\nfuels, but also because of the impact their production may have on global food prices. These\nprices, in turn, have a direct impact on domestic food prices. Driven mainly by maize, wheat and\nsoya bean oil prices, global food prices increased by 10 per cent in 2006 (Figure B3.1). Increased\ndemand, higher energy and fertiliser prices, and poor wheat crops due to severe drought\nconditions in many wheat-producing countries contributed to recent price increases. A further\nfactor that has supported the strong demand for crops is the increased demand for agricultural\ncommodities as inputs to the biofuel production process.\nGlobal interest in biofuels as an alternative to fossil fuels is stimulated by high oil prices,\nuncertainties with regard to future availability of fossil fuels as well as increased global warming\nconcerns. Unlike fossil fuels, biofuel is a renewable source of energy that can be produced from\ndifferent starches and grains, from cellulosic materials such as straw, from other organic waste\nmaterial, or from oil-seed crops. Agricultural products such as maize, soya beans, sugar-cane, and\nsunflower oil are mainly used in the production of biofuels. \nThe production cost of biofuel differs between countries, depending on the kind of feedstock and\nenergy that is necessary for production. Biofuel production is most sensitive to changes in the\nfeedstock price, which is the main contributor to production costs. Agricultural policies, which\ninfluence the production of and trade in agricultural commodities, are an important factor\ninfluencing the price of the feedstock.\nBetween 1991 and 2005, global production of biofuels increased significantly. Ethanol production\nincreased by 174,5 per cent, while production of biodiesel increased from 11 million litres in 1991\nto 3 762 million litres in 2005 (Figure B3.2). Brazil and the United States of America (US) are\ncurrently the world’s major biofuel producers, accounting for around 72 per cent of world ethanol\nproduction during 2006 (Renewable Fuels Association, 2007). Brazil, the world’s largest exporter\nof ethanol, produces ethanol from sugar-cane, while the US produces ethanol mainly from maize.\nHowever, during 2006 global consumption of biofuel accounted for around 1,3 per cent of global\nmotor vehicle fuel consumption, and it is projected that it will account for around 3 per cent in\n2015 (Panorama, 2007).\nAnnual percentage change\n2005\n2003\n2001\n1999\n1997\n1995\n1993\n1991\n-15\n-10\n-5\n0\n5\n10\n15\n20\nSource: IMF World Economic Outlook Database, October 2007\nFigure B3.1 \nWorld commodity food price index\nSouth African Reserve Bank\n25\nMonetary Policy Review November 2007\nIncreased demand for agricultural commodities for biofuel production puts upward pressure on\nglobal food prices. For example, the projected impact of ethanol production on maize prices in the\nworld’s dominant producer, the US, is reproduced in Table B3.1. It is estimated that ethanol\ndemand for maize will increase by 34,1 and 48,8 per cent in 2006/07 and 2007/08, respectively,\ncontributing to corresponding overall demand growth of 4,7 and 4,8 per cent while the projected\nsupply of maize remains relatively constrained. This situation is projected to continue in 2008/09\nand 2009/10. Maize prices, which were around US$3,00 per bushel in 2006/2007, are projected\nto peak at US$3,75 in 2009/10 before supply and demand equalise from 2010/11. \nTable B3.1: Projected total supply, total demand, ethanol demand and price of \nUS maize\nAnnual percentage change and US dollar price*\nTotal\nTotal \nEthanol\nPrice\nsupply of\ndemand for\ndemand for\nof\nmaize\nmaize\nmaize\nmaize*\n2006/07.................................................\n-3,9\n4,7\n34,1\n3,00\n2007/08.................................................\n2,3\n4,8\n48,8\n3,50\n2008/09.................................................\n2,7\n3,1\n15,6\n3,60\n2009/10.................................................\n0,9\n1,3\n5,4\n3,75\n2010/11.................................................\n2,0\n1,6\n2,6\n3,55\n2011/12.................................................\n1,6\n1,4\n1,9\n3,50\n2012/13.................................................\n1,4\n1,2\n1,8\n3,45\n2013/14.................................................\n1,3\n1,2\n1,2\n3,40\n2014/15.................................................\n1,3\n1,2\n1,2\n3,35\n2015/16.................................................\n1,2\n1,2\n1,2\n3,35\n2016/17.................................................\n1,2\n1,0\n1,2\n3,30\nSource: United States Department of Agriculture, 2007\nMillion litres\nMillion litres\n0\n1000\n2000\n3000\n4000\n2005\n2003\n2001\n1999\n1997\n1995\n1993\n1991\n0\n10000\n20000\n30000\n40000\n50000\n \nEthanol \n \nBiodiesel (right-hand scale)\nSource: Earth Policy Institute, 2006\nFigure B3.2 \nWorld ethanol and biodiesel production\n26\nThe outlook for inflation\nThe outlook, risk and uncertainties relating to some of the factors that determine the outlook\nfor inflation and that are embodied in the Bank’s forecast, are presented in this section.\nInternational outlook\nThe global economy continued to expand vigorously in the first half of 2007, but the\nsubsequent turbulence in financial markets has clouded growth prospects somewhat for\n2008. Inflation in most major countries remains well contained despite strong growth\nalthough some countries face rising inflation pressures from food and energy prices.\nAccording to the interim World Economic Outlook (WEO) Update published in July 2007\nby the IMF, the projection for global growth was initially revised upward to 5,2 per cent\nin 2007 and 2008; 0,3 percentage points higher for both years than was projected at\nthe time of the April 2007 WEO. In the subsequent October 2007 WEO, the IMF lowered\nits forecast for global growth in 2008 to 4,8 per cent (Table 8) and warned that even its\nnew prediction may be too optimistic given threats posed by the sell-off in credit\nmarkets. Risks to the growth outlook for 2008 are deemed to be firmly on the downside\nand mainly centred around concerns that financial market strains could intensify and\ntrigger a more pronounced global slowdown. Supply constraints have tightened and\ninflation risks have risen since the April WEO, and world inflation is now expected to be\n3,9 per cent in 2007 and 3,6 per cent in 2008.\nGrowth in the US has slowed in response to developments in the housing market and it\nis expected that the economy will grow by around 1,9 per cent in both 2007 and 2008.\nThe IMF deems risks to the short-term outlook in the US to be firmly on the downside\ngiven the financial market turmoil, weak housing market, softening labour market and\nMonetary Policy Review November 2007\nSouth African Reserve Bank\nFurthermore, other crop prices may be affected. As US maize production becomes more attractive\nto farmers, they may decide to switch from competing crops, for example soya bean production\nto maize production. This would tend to result in a decline in the supply of soya beans and an\nincrease in soya bean prices.\nFinally, it is important to note that these international developments have a domestic impact. Because\nagricultural crops such as maize are tradeable commodities, their prices are derived not only from\ndomestic supply and demand factors, but also from dollar-based export and import parities.\nIncreases in global feedstock prices resulting from higher demand for agricultural commodities as\ninputs to the biofuel production process are therefore transmitted to domestic prices via import\nand export parity pricing.\nReferences\nPanorama. 2007. Biofuels worldwide. Panorama technical report. Available online:\nwww.ifp.fr/IFP/en/events/panorama/IFP-Panorama07_05-Biocarburants_ monde_VA.pdf\nAccessed on 23 October 2007.\nRenewable Fuels Association. 2007. Building New Horizons: Ethanol Industry Outlook 2007.\nUnited States Department of Agriculture (USDA). 2007. USDA Agricultural Projections to 2016.\nAvailable online:\nhttp://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1192 \nAccessed on 23 October 2007. \ndeclining productivity growth. The growth projection for the US in 2008 has accordingly\nbeen revised downward by 0,9 percentage points compared with that published in the\nApril WEO. The Institute for Supply Management (ISM) said that in September 2007 US\nservice industries expanded at the slowest pace in six months, a sign that the housing\nrecession is seeping into other parts of the economy. The ISM index of non-\nmanufacturing businesses, which make up almost 90 per cent of the economy, fell to\n54,8 in September from 55,8 in August 2007. Compared with data projected in the April\n2007 WEO, inflation is expected to be significantly higher in 2007 and somewhat lower\nin 2008, averaging 2,7 per cent in 2007 and 2,3 per cent in 2008. \nTable 8\nIMF projections of world growth and inflation for 2007 and 2008*\nPer cent\nReal GDP (growth)\nInflation rates**\n2007\n2008\n2007\n2008\nWorld ...................................................................... (4,9)\n5,2\n(4,9)\n4,8\n(3,5) 3,9 \n(3,5) 3,6\nAdvanced economies ............................................ (2,5)\n2,5\n(2,7)\n2,2\n(1,8) 2,1\n(2,1) 2,0\nUnited States ....................................................\n(2,2)\n1,9\n(2,8)\n1,9\n(1,9) 2,7 \n(2,5) 2,3\nJapan ................................................................\n(2,3)\n2,0\n(1,9)\n1,7\n(0,3) 0,0\n(0,8) 0,5\nEuro area ..........................................................\n(2,3)\n2,5\n(2,3)\n2,1\n(2,0) 2,0 \n(2,0) 2,0 \nUnited Kingdom ................................................\n(2,9)\n3,1\n(2,7)\n2,3\n(2,3) 2,4 \n(2,0) 2,0\nOther advanced economies ..............................\n(3,8)\n4,3\n(3,8)\n3,8\n(2,0) 1,9 \n(2,2) 2,3\nOther emerging-market and developing countries .... (7,5)\n8,1\n(7,1)\n7,4\n(5,4) 5,9 \n(4,9) 5,3\nAfrica ................................................................\n(6,2)\n5,7\n(5,8)\n6,5\n(10,7) 6,6 (10,4) 6,0\nCentral and eastern Europe ..............................\n(5,5)\n5,8\n(5,3)\n5,2\n(4,8) 5,1 \n(3,7) 4,1\nCommonwealth of Independent States..............\n(7,0)\n7,8\n(6,4)\n7,0\n(9,0) 8,9 \n(8,3) 8,3\nDeveloping Asia ................................................\n(8,8)\n9,8\n(8,4)\n8,8\n(3,9) 5,3 \n(3,4) 4,4\nChina.............................................................. (10,0) 11,5\n(9,5) 10,0\n(2,2) 4,5 \n(2,3) 3,9\nIndia ..............................................................\n(8,4)\n8,9\n(7,8)\n8,4\n(6,2) 6,2\n(4,3) 4,4\nMiddle East........................................................\n(5,5)\n5,9\n(5,5)\n5,9\n(10,6) 10,8\n(8,7) 9,2\nWestern hemisphere..........................................\n(4,9)\n5,0\n(4,2)\n4,3\n(5,2) 5,3\n(5,7) 5,8 \n*\nIMF projections for 2007 and 2008 as at April 2007 in parentheses \n**\nInflation data exclude Zimbabwe\nSource: IMF World Economic Outlook, October 2007\nIn the euro area it is expected that growth will moderate to 2,1 per cent in 2008 from \n2,5 per cent in 2007. The balance of risks to near-term growth has, however, shifted to\nthe downside because of slowing growth in the US and developments in the financial\nmarkets. Inflationary pressures are expected to remain well contained, with inflation\nprojected to average 2,0 per cent in 2007 and 2008. \nJapan’s economy is expected to continue expanding moderately in the second half of\n2007 but the annual forecasts for both 2007 and 2008 have been revised marginally\ndownward compared with the April 2007 estimates, after having been revised upward in\nJuly 2007. The October 2007 WEO forecasts real GDP growth of 1,7 per cent in 2008\ncompared with 2,0 per cent for this year. The outlook for Japan is mixed, as growth\ncould be dampened by the recent financial market turmoil and yen appreciation. Inflation\nis expected to increase from 0,0 per cent in 2007 to 0,5 per cent in 2008. The UK\neconomy is expected to expand by 3,1 per cent in 2007 and 2,3 per cent in 2008, with\nprojected inflation rates for the respective years of 2,4 per cent and 2,0 per cent.\nSouth African Reserve Bank\n27\nMonetary Policy Review November 2007\n28\nThe major upward revisions to IMF growth projections between the April and October\nWEOs have been for emerging-market and developing countries, with growth\nprojections substantially revised for China, India and Russia. Emerging-market and\ndeveloping countries are expected to continue their strong growth performances and\nare projected to grow at 8,1 and 7,4 per cent, respectively, in 2007 and 2008. Growth\nin developing Asia is expected to be 9,8 per cent this year and 8,8 per cent in 2008. \nCompared to the forecasts in the April WEO, these rates represent increases of 1,0 and\n0,4 percentage points, respectively. Growth in China is projected at 11,5 and 10,0 per\ncent in 2007 and 2008, respectively, while India is forecast to grow at 8,9 per cent in\n2007 and 8,4 per cent in 2008. Greater exchange rate flexibility and measures to boost\ndomestic demand in developing Asia could help reduce the reliance on export-led\ngrowth against the backdrop of continuing large current-account surpluses in many\ncountries in the region. \nAfrica’s economic expansion continues to be bolstered by the sustained global\neconomic expansion, improved policy implementation, debt relief, and firm demand for\nfuel and non-fuel commodities. Sub-Saharan Africa’s real GDP is projected to expand\nby 6,1 per cent this year and by 6,8 per cent in 2008. Growth is expected to accelerate\nin 2008 in a number of countries in the region as new oil projects come on stream. In\nthe Middle East, high oil prices have supported buoyant growth and strong external and\nfiscal balances in oil-exporting countries, and are expected to continue to do so in the\nnear term. The region’s GDP is projected to grow at 5,9 per cent in both 2007 and 2008.\nHowever, inflationary pressures have risen against the backdrop of tightening resource\nutilisation and rising import prices.\nThe IMF’s projection that growth will moderate somewhat in the advanced economies in\n2008 is supported by the latest Organisation for Economic Co-operation and Development\n(OECD) composite leading indicators (CLIs). The six-month rate of change in the CLI for the\nOECD area has decelerated for the second consecutive month from 2,0 per cent in July\n2007 to 0,7 per cent in August, suggesting some moderation in the period ahead.\nCrude oil prices remain volatile and reached record-high levels exceeding US$88 per\nbarrel in late-October 2007. The high crude oil prices reflect strong global demand,\nunfavourable geopolitical developments and limited excess oil production capacity.\nMedium-term risks to the price of oil are likely to remain on the upside as market\nfundamentals remain tight amid strong demand and moderate non-OPEC supply\ngrowth. The futures prices for Brent crude oil to be delivered in May and November 2008\nwere around US$86 and US$83 per barrel, respectively, on 26 October 2007.\nOutlook for domestic demand and supply\nDomestic growth is set to remain robust. However, although consumer and business\nconfidence remain at relatively high levels, both have moderated in 2007. Measures of\ntrade, manufacturing and fixed investment activity have also decelerated recently. \nAccording to the latest Reuters consensus forecasts, surveyed in September 2007, the\nSouth African economy is expected to grow by 4,8 per cent in 2007, 4,7 per cent in\n2008 and 5,1 per cent in 2009. These forecasts represent the mean of 16 individual\nforecasts for both 2007 and 2008 and the mean of 14 forecasts for 2009. They range\nfrom 4,7 to 5,0 per cent for 2007, from 4,1 to 5,3 per cent for 2008, and from 4,6 to \n5,7 per cent for 2009. \nMonetary Policy Review November 2007\nSouth African Reserve Bank\nConsumer confidence, measured by the First National Bank/Bureau for Economic\nResearch (FNB/BER) Consumer Confidence Index as the percentage of respondents\nexpecting an improvement in conditions less the percentage expecting deterioration,\ndeclined from +21 in the second quarter of 2007 to +18 in the third quarter. The index\nwas at +23 in the first quarter of 2007, the highest level of consumer confidence\nmeasured since the index was established 25 years ago. The decline in the third quarter\nwas partly the result of fewer consumers expecting economic performance to improve\nover the next 12 months.\nThe level of business confidence, measured in terms of the Rand Merchant Bank\n(RMB)/BER Business Confidence Index, is at its lowest level in three-and-a-half years\n(Figure 16). The index measures business confidence on a scale of 0 to 100, with 0\nindicating an extreme lack of confidence, 50 neutrality and 100 extreme confidence.\nIt declined from 80 in the second quarter of 2007 to 72 in the third quarter, with all\nsubcomponents declining in the quarter. The largest declines were reported for new\nvehicle dealers (-13) and manufacturers (-13). However, the majority of respondents\nremain optimistic, with confidence levels in all sectors except new vehicle dealers\nremaining above the 50 level.\nThe South African Chamber of Business/Absa Trade Activity Index, which is a\ncomposite index of sales volumes, new orders, supplier deliveries, inventory levels and\nemployment, declined by 2 index points from 52 in July to 50 in August. The index is\nnow eight index points lower than the level of 58 reported in March 2007. The Trade\nExpectations Index, which has remained in the 66 – 68 range since March, was at \n66 index points in August.\nThe Investec/BER Purchasing Manager’s Index (PMI), a barometer of manufacturing\nactivity, declined further to 51,4 index points on a seasonally adjusted basis in\nSouth African Reserve Bank\n29\nMonetary Policy Review November 2007\nPercentage\n1980\n82\n84\n86\n88\n90\n92\n94\n96\n98 2000 02\n04\n06\n0\n25\n50\n75\n100\n \nDownward phases of business cycle\nSources: Rand Merchant Bank and Bureau for Economic Research\nFigure 16 RMB/BER Business Confidence Index\nNet positive\nNet negative\n30\nSeptember 2007 from 54,1 in August. The major contributors in this regard were the\ndeclines in new sales growth, the employment index and the business activity index. The\ndecline to below the neutral 50 level in the latter two components of the index signifies\na shedding of labour and a contraction in business activity within the manufacturing\nsector, respectively.\nConfidence levels in the civil construction industry, which provide an insight into trends\nin fixed investment, declined in the third quarter of 2007, despite the robust\nperformance of fixed investment growth in the economy. The FNB Civil Construction\nConfidence Index, which reflects the proportion of managers expressing satisfaction\nwith current conditions in the industry, decreased from an index value of 85 in the\nsecond quarter to 70 in the third quarter of 2007. However, respondents did expect\nbusiness conditions and growth in construction activity to improve in the final quarter\nof the year.\nIndicators of inflation expectations\nInflation expectations play an important role in price setting and wage negotiations and\nare an important factor in determining future inflation outcomes. Most measures of\ninflation expectations have been increasing recently as the CPIX inflation rate has\nbreached the upper limit of the inflation target range of 3 to 6 per cent since April 2007.\nAccording to the latest BER quarterly survey of inflation expectations in the South\nAfrican economy, conducted in the third quarter of 2007, the average expectation for\nCPIX inflation for 2007 is 5,9 per cent, declining slightly to 5,8 per cent for 2008 and to\n5,6 per cent in 2009 (Figure 17). Compared to the results of the second quarter survey,\nthese expectations reflect upward revisions of 0,5 percentage points for both 2007 and\n2008, and of 0,4 percentage points for 2009. \nMonetary Policy Review November 2007\nSouth African Reserve Bank\nAnnual averages, per cent\n4\n5\n6\n2007\n2008\n2009\nFigure 17 \nBER surveys of CPIX inflation expectations\n5,4\n5,2\n5,4\n5,9\n5,4\n5,1\n5,3\n5,8\n5,6\n5,2\n5,1\nSurvey conducted during:\n \n06Q4 \n \n07Q1\n \n07Q2\n \n07Q3\nSource: Bureau for Economic Research, University of Stellenbosch\nTable 9 shows the breakdown of CPIX inflation expectations according to the different\ngroups surveyed. The results for financial analysts, business executives and trade\nunions are higher at each forecast horizon than in the survey undertaken in the second\nquarter of 2007. Financial analysts expect the average CPIX inflation rate to breach the\nupper limit of the inflation target range in 2007 and thereafter to slow slightly to 5,7 per\ncent in 2008 and 5,0 per cent in 2009. Business and unions, however, expect average\nCPIX inflation to remain within the upper limit of the inflation target range for each of the\nforecast years. \nTable 9\nBER survey of CPIX inflation expectations: Third quarter 2007*\nPer cent\n2007\n2008\n2009\n1. Financial analysts ..............................................\n(5,5) 6,1\n(5,0) 5,7\n(4,7) 5,0\n2. Business ............................................................\n(5,3) 5,7\n(5,4) 5,8\n(5,4) 5,8\n3. Trade unions ......................................................\n(5,5) 5,7\n(5,5) 5,9\n(5,4) 5,9\nAverage 1 – 3 ........................................................\n(5,4) 5,9\n(5,3) 5,8\n(5,2) 5,6\n*\nSecond-quarter 2007 results in parentheses\nSource: Bureau for Economic Research, University of Stellenbosch\nThe results of the September 2007 Reuters survey of long-term forecasts for the South\nAfrican economy, depicted in Table 10, closely resemble those of the financial analysts\nsurveyed by the BER. According to the Reuters survey, the mean forecast is for CPIX\ninflation to be above the upper limit of the inflation target range in 2007, averaging \n6,2 per cent. Inflation is then expected to recede to 5,8 per cent in 2008 and to 5,1 per\ncent in 2009. This reflects an upward revision of 0,1 percentage points for both 2007\nand 2008 from the August 2007 survey, while the forecast for 2009 remains unchanged.\nThe median forecasts for 2007 and 2008 have also been revised upward, although the\n2009 forecast has been revised downward from 5,3 per cent in the August 2007 survey\nto 5,2 per cent in the September 2007 survey. \nTable 10\nReuters survey of CPIX forecasts: September 2007*\nPer cent\n2007\n2008\n2009\n1. Mean..................................................................\n(6,1) 6,2\n(5,7) 5,8\n(5,1) 5,1\n2. Median ..............................................................\n(6,1) 6,2\n(5,7) 5,8\n(5,3) 5,2\n3. Highest ..............................................................\n(6,4) 6,3\n(6,1) 6,4\n(5,5) 5,7\n4. Lowest ..............................................................\n(5,9) 6,0\n(5,5) 5,3\n(4,6) 4,6\nNumber of forecasters..............................................\n(15) 16\n(15) 16\n(11) 13\n*\nAugust 2007 survey results in parentheses\nSource: Reuters\nSouth African Reserve Bank\n31\nMonetary Policy Review November 2007\n32\nMarket-based inflation expectations, measured by break-even inflation rates and\ndepicted in Figure 18, rose between May and July before easing somewhat in recent\nmonths. Break-even inflation rates are measured as the yield differential between\nSouth African government CPI inflation-linked bonds and conventional nominal\nbonds of similar maturity, assuming constant inflation and liquidity risk premia over\nthe period until the bond matures. Break-even inflation rates obtained from the \nR197 (maturing 2023) inflation-linked bond increased from around 4,5 per cent in\nmid-May to 5,3 per cent at the end of July, before declining to around 5,1 per cent\nin late-October. Over the same periods, break-even rates obtained from the \nR189 (maturing 2013) inflation-linked bond increased from 5,2 per cent to 6,2 per\ncent, and then declined to around 5,7 per cent.\nThe South African Reserve Bank inflation forecast\nThe latest quarterly inflation projections of the core inflation forecasting model of the\nBank, as presented to the MPC on 10 and 11 October 2007, are reproduced in \nFigure 19. The forecast indicates a further deterioration in the inflation outlook when\ncompared to the outlook considered at the August 2007 MPC meeting. Conditional on\na constant repo rate of 10 per cent, the central projection was for the CPIX inflation rate\nto remain above the upper level of the 3 to 6-per-cent inflation target range, peaking at\nan average of 6,8 per cent in the first quarter of 2008. Thereafter it was expected that\nCPIX inflation would decline towards the upper end of the inflation target range in the\nfollowing quarter, before reaching an average of approximately 5,2 per cent by the fourth\nquarter of 2009. This deterioration in the inflation outlook is partly related to the higher-\nthan-expected second-quarter inflation outcome and a revised administered price\nassumption due to, inter alia, raised property taxes and higher petroleum prices. \nMonetary Policy Review November 2007\nSouth African Reserve Bank\nPercentage points\n2003\n2004\n2005\n2006\n2007\nFigure 18 Break-even inflation rates\n3\n4\n5\n6\n7\n \nSpread between R189 and R153 bonds\n \nSpread between R197 and R186 bonds \nThere are nevertheless still a number of risks to the inflation outlook. Since the August\nMPC meeting, international oil prices have increased sharply from around US$68 per\nbarrel to above US$88 per barrel in October 2007. The recent appreciation of the rand\nagainst the dollar, when combined with the possible moderation of global growth, could\nalleviate some of the pressure from dollar-denominated oil prices. Due to adverse\ndomestic supply conditions and some international developments, including the impact\nof biofuel demand, food prices have increased significantly over the past two years and\nstill pose a risk to future inflation. The recent deterioration in inflation expectations and\nassociated higher average levels of wage settlements, if not offset by higher rates of\nlabour productivity growth, also present a risk to the inflation outlook. However, there are\ntentative signs of moderation in household consumption expenditure and output growth,\nwhich should have a dampening effect on inflationary pressures. \nAssessment and conclusion\nThe past six months have been challenging from a monetary policy perspective. Over\nthis period the inflation outlook deteriorated somewhat despite the tighter monetary\npolicy stance adopted in 2006. Initially, the impetus to the higher inflation trend came\nfrom exogenous factors such as food and petrol prices, although there were warning\nSouth African Reserve Bank\n33\nMonetary Policy Review November 2007\nPer cent\n2004\n2005\n2006\n2007\n2008\n2009\nFigure 19 CPIX forecast\n2\n3\n4\n5\n6\n7\n8\nNote:\nThe fan chart uses confidence bands to depict varying degrees of\ncertainty. The darkest band of the fan chart covers the most likely 10 per\ncent of probable outcomes foreseen for CPIX inflation, including the\ncentral projection. Each successive band, shaded slightly lighter and\nadded on either side of the central band, adds a further 10 per cent to\nthe probability until the whole shaded area depicts a 90-per-cent\nconfidence interval (see Box 4 “Understanding the fan chart” on p. 27 of\nthe March 2001 Monetary Policy Review).\n34\nsignals from the elevated rates of credit extension and household consumption\nexpenditure. More recently there has been evidence of generalised inflation pressures\nwhich have impacted adversely on inflation outcomes and the inflation outlook.\nThe international outlook remains uncertain. The full implications of the international\nfinancial market turbulence are still to be seen. Some slowdown in growth is expected,\nparticularly in the US. However, continued dynamism in the Asian economies is likely to\nunderpin global growth in general, and commodity prices in particular. Despite higher\ninternational oil and food prices, global inflation is expected to remain contained.\nMonetary policy in South Africa will remain focused on bringing inflation back to within\nthe inflation target range. Recently there have been some signs of moderation in\nconsumption expenditure. The outlook for monetary policy will depend to a significant\ndegree on whether these signs of moderation are sustained and sufficient to bring about\nthe desired inflation outcome. \nMonetary Policy Review November 2007\nSouth African Reserve Bank", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monetary_Policy_Reports/mpr092007.pdf"}
{"doc_id": "8707486d3817053db39f39d860a2a1bf", "text": "Vol. 27 No. 2 \n \n \nWeek Ending \n10th JANUARY 2025 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n 1 \n1. OVERVIEW \n \n \n \nThis report provides an overview of monetary and financial developments for the week ending 10th January \n2025. The review comprises of developments in domestic and international money and capital markets, \nnational payment systems, international commodity prices and exchange rates. \nDuring the week under review, foreign and local currency deposit rates largely remained unchanged, except \nfor local currency maximum deposits rates for 1 month and 3 months tenor which increased by 0.39 percentage \npoints and 0.72 percentage points, respectively. \nBoth local and foreign currency lending rates for individual clients increased, while those for corporate clients \ndeclined, during the period under review. \nIn the capital markets, both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange \n(VFEX) displayed bearish trends during the week of analysis. Consequently, the ZSE All Share Index and \nVFEX All Share Index fell by 2.59% and 2.35%, closing at 208.36 points and 103.28 points, respectively. \n \nThe aggregate transactions processed in value terms through the National Payment Systems (NPS) platforms \ndeclined by 1.82% to ZiG28.47 billion, from ZiG28.99 billion recorded in the previous week. The decline in \nNPS values was largely attributable to a decrease in values processed through POS, ATM, mobile banking \nand mobile money payment platforms. \n \nIn the interbank market, the Zimbabwe Gold (ZiG) depreciated by 0.5% against the greenback, from an \naverage of ZiG25.8073 per US$1 in the previous week to an average of ZiG25.9269 per US$1, during the \nweek under review. \n \nInternational average prices for gold, platinum, palladium, nickel, crude oil and lithium increased during the \nweek under review. Gold prices strengthened amid a shift in US administration's policies that continued to \nfuel safe-haven demand status for the metal. The rise in platinum and palladium prices was primarily linked \nto growing demand for these metals due to rising industrial needs across sectors. Likewise, lithium prices rose \ndriven by the increasing global demand for batteries. \nNickel prices increased underpinned by the impact of Indonesian macro policies, which aims at cutting nickel \nproduction. Brent crude oil prices rose as new US sanctions on Russia’s energy sector raised concerns about \npossible supply disruptions. \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2 \n \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n20 December 2024 \n27 December 2024 \n3 January 2025 \n10 January 2025 \nSavings \n \n \n \n \nMinimum \n3.75 \n3.75 \n3.54 \n3.54 \nMaximum \n3.88 \n3.88 \n3.38 \n3.38 \n1-month deposit \n \n \n \n \nMinimum \n5.38 \n5.38 \n5.38 \n5.38 \nMaximum \n7.94 \n8.33 \n7.94 \n8.33 \n3-months deposit \n \n \n \n \nMinimum \n5.67 \n5.67 \n5.67 \n5.67 \nMaximum \n8.15 \n8.15 \n8.15 \n8.87 \n6-months deposit \n \n \n \n \nMinimum \n5.00 \n5.00 \n5.00 \n5.00 \nMaximum \n7.48 \n7.48 \n7.48 \n7.48 \n12-months deposit \n \n \n \n \nMinimum \n5.01 \n5.01 \n5.01 \n5.01 \nMaximum \n7.49 \n7.49 \n7.49 \n7.49 \nOver 1 year \n \n \n \n \nMinimum \n5.02 \n5.02 \n5.02 \n5.02 \nMaximum \n7.78 \n7.78 \n7.78 \n7.78 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n20 December 2024 \n27 December 2024 \n3 January 2025 \n10 January 2025 \nSavings \n \n \n \n \nMinimum \n1.35 \n1.35 \n1.35 \n1.35 \nMaximum \n1.57 \n1.57 \n1.57 \n1.57 \n1-month deposit \n \n \n \n \nMinimum \n3.31 \n3.31 \n3.31 \n3.31 \nMaximum \n5.17 \n5.17 \n5.17 \n5.17 \n3-month deposit \n \n \n \n \nMinimum \n3.99 \n3.99 \n3.99 \n3.99 \nMaximum \n6.01 \n6.01 \n6.01 \n6.01 \n6-month deposit \n \n \n \n \nMinimum \n3.66 \n3.66 \n3.66 \n3.66 \nMaximum \n6.06 \n6.06 \n6.06 \n6.06 \n12-Month deposit \n \n \n \n \nMinimum \n3.75 \n3.75 \n3.75 \n3.75 \nMaximum \n6.19 \n6.19 \n6.19 \n6.19 \nOver 1 year \n \n \n \n \nMinimum \n3.86 \n3.86 \n3.86 \n3.86 \nMaximum \n6.28 \n6.28 \n6.28 \n6.28 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n \n \n \n 3 \n \n \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n20 December 2024 \n27 December 2024 \n3 January 2025 \n10 January 2025 \nIndividuals \n \n \n \n \nMinimum \n41.67 \n41.03 \n41.51 \n41.55 \nMaximum \n47.22 \n46.47 \n47.04 \n47.08 \nCorporates \n \n \n \n \nMinimum \n40.01 \n39.91 \n40.21 \n40.19 \nMaximum \n45.61 \n45.64 \n46.14 \n45.97 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n20 December 2024 \n27 December 2024 \n3 January 2025 \n10 January 2025 \nIndividuals \n \n \n \n \nMinimum \n13.03 \n13.02 \n12.77 \n12.79 \nMaximum \n17.40 \n17.40 \n17.31 \n17.34 \nCorporates \n \n \n \n \nMinimum \n10.61 \n10.58 \n10.66 \n10.65 \nMaximum \n16.23 \n16.24 \n16.30 \n16.25 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending rates \n20 December 2024 \n27 December 2024 \n3 January 2025 \n10 January 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n20.00 \n20.00 \n20.00 \n20.00 \nMaximum \n30.00 \n30.00 \n30.00 \n30.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n \n3. EQUITY MARKETS \n \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG billion) \nMarket \nTurnover \n(ZiG million) \nVolume of \nShares \n(million) \n20-Dec-24 \n215.54 \n210.86 \n208.79 \n231.43 \n100.11 \n235.38 \n65.36 \n58.33 \n11.96 \n27-Dec-24 \n216.88 \n214.21 \n211.70 \n227.67 \n100.11 \n235.38 \n66.21 \n30.98 \n0.89 \n3-Jan-25 \n213.90 \n212.33 \n213.56 \n246.61 \n100.11 \n235.38 \n65.09 \n30.98 \n5.73 \n10-Jan-25 \n208.36 \n206.60 \n208.73 \n240.23 \n100.11 \n235.38 \n62.93 \n51.39 \n48.73 \nWeekly \nChange (%) \n(2.59) \n(2.70) \n(2.26) \n(2.59) \n0.00 \n0.00 \n(3.32) \n65.88 \n750.44 \nSource: Zimbabwe Stock Exchange, 2024 \n \nVFEX Indicators \nDate \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover \n(US$ million) \nVolume of Shares \n(million) \n20-Dec-24 \n98.43 \n1.19 \n1.06 \n3.69 \n27-Dec-24 \n100.22 \n1.23 \n0.01 \n0.05 \n3-Jan-25 \n105.77 \n1.28 \n0.41 \n1.85 \n10-Jan-25 \n103.28 \n1.25 \n0.25 \n1.64 \nWeekly Change (%) \n(2.35) \n(2.34) \n(39.02) \n(11.35) \nSource: Victoria Falls Stock Exchange, 2024 \n \n 4 \n \n \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2024 \n \n \n \n140\n160\n180\n200\n220\n240\n260\n280\n300\n320\n11-Oct-24\n18-Oct-24\n25-Oct-24\n01-Nov-24\n08-Nov-24\n15-Nov-24\n22-Nov-24\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n40\n50\n60\n70\n80\n90\n100\n11-Oct-24\n18-Oct-24\n25-Oct-24\n01-Nov-24\n08-Nov-24\n15-Nov-24\n22-Nov-24\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\nZiG Billion\nZSE Market Capitalisation \n0\n2000\n4000\n6000\n8000\n10000\n12000\n14000\n16000\n18000\n20000\n11-Oct-24\n18-Oct-24\n25-Oct-24\n01-Nov-24\n08-Nov-24\n15-Nov-24\n22-Nov-24\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\nUS$ Thousand\nVFEX Market Turnover \n1.15\n1.2\n1.25\n1.3\n1.35\n1.4\n11-Oct-24\n18-Oct-24\n25-Oct-24\n01-Nov-24\n08-Nov-24\n15-Nov-24\n22-Nov-24\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\nUS$ Billion\nVFEX Market Capitalisation \n95\n100\n105\n110\n115\n11-Oct-24\n18-Oct-24\n25-Oct-24\n01-Nov-24\n08-Nov-24\n15-Nov-24\n22-Nov-24\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\nIndices\nVFEX All Share Index \n0\n20,000\n40,000\n60,000\n80,000\n100,000\n120,000\n11-Oct-24\n18-Oct-24\n25-Oct-24\n01-Nov-24\n08-Nov-24\n15-Nov-24\n22-Nov-24\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\nZiG Thousands\nZSE Market Turnover \nNegotiated trade deals Simbisa \nBrands Limited shares, Innscor \nAfrica Limited shares. \n \n 5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2024 \n \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n20 December 2024 \n27 December 2024 \n3 January 2025 \n10 January 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.54 \n1.54 \n1.54 \n1.53 \nPetrol Blend E20/ litre \n1.48 \n1.48 \n1.48 \n1.48 \nLP Gas / kg \n1.86 \n1.86 \n1.86 \n1.58 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n72.95 \n73.11 \n75.28 \n77.49 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2024 \n \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \n \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n6-January-25 \n2,646.80 \n2.09 \n2.31 \n0.0808 \n0.0894 \n7-January-25 \n2,633.35 \n2.08 \n2.30 \n0.0804 \n0.0889 \n8-January-25 \n2,650.85 \n2.10 \n2.32 \n0.0810 \n0.0895 \n9-January-25 \n2,659.65 \n2.11 \n2.34 \n0.0812 \n0.0898 \n10-January-25 \n2,674.60 \n2.13 \n2.35 \n0.0817 \n0.0903 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2024 \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n3 January 2025 \nWEEK ENDING \n10 January 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n21,603,297,276.69 \n22,487,646,895.77 \n4.09 \nOf which ZiG \n9,017,101,003.77 \n 5,904,560,329.29 \n \nOf which US$ transactions \n(ZiG Equivalent) \n12,586,196,272.92 \n16,583,086,566.48 \n \n \nPOS \n2,449,071,603.88 \n1,838,609,995.33 \n(24.93) \nATM \n1,889,951,284.00 \n1,330,705,393.04 \n(29.59) \nMOBILE BANKING \n346,311,303.08 \n284,176,661.09 \n(17.94) \nMOBILE MONEY \n2,573,347,964.31 \n2,370,732,013.39 \n(7.87) \nZIPIT MOBILE \n132,086,298.95 \n154,681,398.88 \n17.11 \nTOTAL \n28,994,065,730.90 \n28,466,552,357.50 \n(1.82) \n \nVOLUMES \n \nRTGS \n81,691 \n148,864 \n82.23 \nOf which ZiG \n58,626 \n60,668 \n \nOf which US$ \n23,065 \n88,196 \n \nPOS \n2,190,098 \n1,639,104 \n(25.16) \nATM \n241,373 \n168,525 \n(30.18) \nMOBILE BANKING \n451,770 \n474,221 \n4.97 \nMOBILE MONEY \n10,570,793 \n9,120,407 \n(13.72) \nZIPIT MOBILE \n180,924 \n169,941 \n(6.07) \nTOTAL \n13,716,649 \n11,721,062 \n(14.55) \n \n 6 \n \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n6-January-25 \n7-January-25 \n8-January-25 \n9-January-25 \n10-January-25 \n1.00Oz \n \n \n \n \n \nUS$ \n2,779.14 \n2,765.02 \n2,783.39 \n2,792.63 \n2,808.33 \nZiG \n71,798.53 \n71,509.99 \n72,043.10 \n72,674.63 \n73,179.18 \n0.50Oz \n \n \n \n \n \nUS$ \n1,389.57 \n1,382.51 \n1,391.70 \n1,396.32 \n1,404.17 \nZiG \n35,899.26 \n35,754.99 \n36,021.55 \n36,337.32 \n36,589.59 \n0.25Oz \n \n \n \n \n \nUS$ \n694.79 \n691.25 \n695.85 \n698.16 \n702.08 \nZiG \n17,949.63 \n17,877.50 \n18,010.78 \n18,168.66 \n18,294.80 \n0.10Oz \n \n \n \n \n \nUS$ \n277.91 \n276.50 \n278.34 \n279.26 \n280.83 \nZiG \n7,179.85 \n7,151.00 \n7,204.31 \n7,267.46 \n7,317.92 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(30 Dec – 3 Jan) \n25.8073 \n1.3755 \n32.2990 \n1.8532 \n26.7561 \n06-Jan \n25.8348 \n1.3761 \n32.132 \n1.8564 \n26.6473 \n07-Jan \n25.8348 \n1.3910 \n32.4148 \n1.8688 \n26.8853 \n08-Jan \n25.8832 \n1.3814 \n32.3101 \n1.8625 \n26.7969 \n09-Jan \n26.0237 \n1.3742 \n32.1121 \n1.857 \n26.8331 \n10-Jan \n26.0579 \n1.3748 \n32.0344 \n1.8581 \n26.8305 \nWeekly Average \n(6 – 10 Jan) \n25.9269 \n1.3795 \n32.2007 \n1.8606 \n26.7986 \nAppr (-)/Depr (+) (%) of the \nZWG \n0.5 \n0.3 \n(0.3) \n0.4 \n0.2 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \nInternational Commodity Prices \n \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(30 Dec - 3 Jan) \n929.88 \n919.75 \n15,236.00 \n9,875.00 \n06-Jan \n943.00 \n928.00 \n15,182.00 \n10,025.00 \n07-Jan \n949.00 \n929.00 \n15,398.00 \n10,025.00 \n08-Jan \n955.50 \n923.00 \n15,451.00 \n10,025.00 \n09-Jan \n963.00 \n944.00 \n15,482.00 \n10,025.00 \n10-Jan \n965.00 \n949.50 \n15,658.00 \n10,025.00 \nWeekly Average \n(6 - 10 Jan) \n955.10 \n934.70 \n15,434.20 \n10,025.00 \nWeekly Change (%) \n2.71 \n1.63 \n1.30 \n1.52 \nSource: BBC, KITCO and Bloomberg, 2024 \n \n \n \n \n \n 7 \nFigure 3: Weekly International Commodity Price Developments (8th December 2024 – 10th January 2025) \n \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2024 \n \nRESERVE BANK OF ZIMBABWE \nJANUARY 2025 \n2,500\n2,550\n2,600\n2,650\n2,700\n2,750\n2,800\n8-Dec\n11-Dec\n14-Dec\n17-Dec\n20-Dec\n23-Dec\n26-Dec\n29-Dec\n1-Jan\n4-Jan\n7-Jan\n10-Jan\nUS$/oz\nGold\n70\n72\n74\n76\n78\n80\n82\n8-Dec\n11-Dec\n14-Dec\n17-Dec\n20-Dec\n23-Dec\n26-Dec\n29-Dec\n1-Jan\n4-Jan\n7-Jan\n10-Jan\nUS$/barrel\nCrude oil \n900\n920\n940\n960\n980\n1,000\n1,020\n1,040\n1,060\n8-Dec\n11-Dec\n14-Dec\n17-Dec\n20-Dec\n23-Dec\n26-Dec\n29-Dec\n1-Jan\n4-Jan\n7-Jan\n10-Jan\nUS$/tonne\nPlatinum\n900\n910\n920\n930\n940\n950\n960\n970\n980\n990\n1,000\n8-Dec\n11-Dec\n14-Dec\n17-Dec\n20-Dec\n23-Dec\n26-Dec\n29-Dec\n1-Jan\n4-Jan\n7-Jan\n10-Jan\nUS$/tonne\nPalladium\n15,000\n15,200\n15,400\n15,600\n15,800\n16,000\n16,200\n16,400\n8-Dec\n11-Dec\n14-Dec\n17-Dec\n20-Dec\n23-Dec\n26-Dec\n29-Dec\n1-Jan\n4-Jan\n7-Jan\n10-Jan\nUS$/tonne\nNickel\n9,600\n9,700\n9,800\n9,900\n10,000\n10,100\n8-Dec\n11-Dec\n14-Dec\n17-Dec\n20-Dec\n23-Dec\n26-Dec\n29-Dec\n1-Jan\n4-Jan\n7-Jan\n10-Jan\nUS$/tonne\nLithium", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_10_JANUARY_2025_Volume_27_Number_2.pdf"}
{"doc_id": "42214cf8b958f25f0a00106d16fb4d06", "text": "i \n \n \n \nFebruary 2025 \n \ni \nTABLE OF CONTENTS \n \nOVERVIEW .................................................................................................................................. 1 \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ........................................... 1 \nMONETARY DEVELOPMENTS .............................................................................................. 6 \nSTOCK MARKET DEVELOPMENTS ..................................................................................... 7 \nZimbabwe Stock Exchange (ZSE) ........................................................................................... 7 \nVictoria Falls Stock Exchange (VFEX) ................................................................................... 8 \nNATIONAL PAYMENTS SYSTEM .......................................................................................... 9 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ............................................... 9 \nMobile and Internet Based Transactions ................................................................................ 9 \nCash Transactions ..................................................................................................................... 9 \nCard Based Transactions ......................................................................................................... 9 \nINFLATION OUTTURN ............................................................................................................. 9 \nMonthly Inflation .................................................................................................................... 10 \nUS$ Annual Inflation Developments ..................................................................................... 10 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1 \n \nOVERVIEW \nBoth the ZWG and USD month-on-month \ninflation fell below 1% in February 2025, \nvindicating that the shock experienced in \nJanuary 2025 was transitory. The ZWG \nmonthly inflation rate declined from 10.5% to \n0.5%, while the USD inflation also fell from \n11.5% in January to 0.2% in February 2025. \nBroad \nmoney \n(M3) \nstock \nstood \nat \nZiG85,635.15 million in February 2025, a \ndecline of 1.71% from the January 2025 \nposition of ZiG87,120.75 million. \nThe Zimbabwe Stock Exchange (ZSE) and the \nVictoria Falls Stock Exchange (VFEX) \nexhibited bullish trends in February 2025, \nrecovering from losses experienced in the \nprevious month. As a result, the ZSE All Share \nIndex gained by 4.34% while the VFEX All \nShare index gained by 2.97% compared to \nJanuary 2025. \n \nThe aggregate value of digital payment systems \ntransaction in February 2025 decreased by 9% \nto ZiG162.46 billion from ZiG178.79 billion. \nSimilarly, volumes decreased by 6% to 53.57 \nmillion from 56.83 million recorded in January \n2025. \nDuring \nthe \nmonth \nof \nFebruary \n2025, \ninternational average prices for gold, platinum, \npalladium, copper, and lithium increased, while \nnickel and Brent crude oil prices decreased. \nCommodity price changes were driven by U.S. \nadministration tariff threats, concerns over \npotential supply disruptions and persistent \ngeopolitical uncertainty. \nMerchandise exports amounted to US$512.6 \nmillion in February 2025, representing a 21.4% \ndecrease from US$ US$652 million realised in \nJanuary 2025. Similarly, the country’s import \nbill decreased to US$730.3 million from \nUS$748.8 million recorded in January 2025. As \na result, the country’s trade deficit was \nUS$217.7 million in February 2025. \nINTERNATIONAL COMMODITY \nPRICE DEVELOPMENTS \nDuring \nthe \nmonth \nof \nFebruary \n2025, \ninternational average prices for gold, platinum, \npalladium, copper, and lithium increased, while \nnickel and brent crude oil prices decreased. \nThe commodity price developments are shown \nin Table 1. \nTable 1: International Commodity Prices \nfor January 2025 and February 2025 \nCommodity \n \nJan-25 \nFeb-25 \nMonthly \nchanges \n(%) \nGold \nUS$/oz \n2,707.74 \n2,896.38 \n6.97 \nPlatinum \nUS$/oz \n948.45 \n975.53 \n2.86 \nPalladium \nUS$/oz \n952.01 \n975.08 \n2.42 \nCopper \nUS$/t \n9,108.02 \n9,406.75 \n3.28 \nNickel \nUS$/t \n15,610.91 \n15,497.65 \n-0.73 \nBrent Crude \noil \nUS$/bbl. \n77.79 \n74.57 \n \n-4.14 \nLithium \nUS$/t \n10,025.00 \n10,350.00 \n3.24 \nSource: Bloomberg, 2025 \n \nGold \nGold prices averaged US$2,896.38 per ounce \nin February 2025, reflecting 6.97% increase \nfrom the monthly average of US$2,707.74 per \nounce reported in January 2025. The rise in the \nyellow metal’s prices was fuelled by increase \nin the U.S inflation rate, uncertainties \nstemming from U.S. administration tariff \nthreats, and persistent geopolitical uncertainty, \nall enhancing gold's appeal as a safe haven. \n \n \n \n \n2 \n \nPlatinum \nPlatinum price increased by 2.85% during the \nreporting month, to an average of US$975.53 \nper ounce from US$948.45 per ounce recorded \nin the previous month. The price increase was \nmainly attributed to investor concerns over \npotential supply disruptions especially from \nSouth Africa the largest producer of platinum. \nPalladium \nPalladium prices rebounded by 2.42% in \nFebruary 2025, from US$952.01 per ounce in \nJanuary 2025 to US$975.08 per ounce. The \nprice recovery was driven by growing demand \nfor the precious metal as investors anticipated \ninterest rate cuts from major central banks. \nFigure 1 shows the trends of precious metal \nprices for the period from February 2022 to \nFebruary 2025. \n \nFigure 1: Monthly Precious Metal Prices (in \nUS$ per Ounce): February 2022 – February \n2025 \n \nSource: Bloomberg, 2025 \n \nBrent Crude Oil \nIn February 2025, brent crude oil price declined \ndue to disappointing economic data from the \nU.S and Germany, which raised concerns about \nreduced energy demand, as well as the new \nU.S. administration implementation of trade \npolicies and tariffs that disrupt international \ntrade with China, the world’s largest importer \nof crude oil and other nations. Resultantly, \nmonthly average prices for oil decreased to \nUS$74.57 per barrel, marking a 4.14% \ndecrease from US$77.79 per barrel in the prior \nmonth. \n \nFigure 2 shows developments in oil prices for \nthe period from February 2022 to February \n2025. \n \nFigure \n2: \nBrent \nCrude \nOil \nPrices \n(US$/Barrel) February 2022 – February \n2025 \n \nSource: Bloomberg, 2025 \n \nCopper \nDuring the month of February 2025, copper \nprices surged by 3.28%, to close the month \nunder analysis at US$9,406.75 per tonne. The \nrise in copper prices emanated from Chile, the \nworld’s largest copper producer encountering \nsupply bottlenecks due to delays caused by \naging mines. \n \n \n \n0\n200\n400\n600\n800\n1000\n1200\n800\n1,000\n1,200\n1,400\n1,600\n1,800\n2,000\n2,200\n2,400\n2,600\n2,800\n3,000\nFeb-22\nMay-22\nAug-22\nNov-22\nFeb-23\nMay-23\nAug-23\nNov-23\nFeb-24\nMay-24\nAug-24\nNov-24\nFeb-25\nUS$/ounce\nUS$/ounce\nGold\nPalladium\nPlatinum (RHS)\n60\n70\n80\n90\n100\n110\n120\nFeb-22\nApr-22\nJun-22\nAug-22\nOct-22\nDec-22\nFeb-23\nApr-23\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nUS$/BARREL\n \n \n \n3 \n \nNickel \nNickel prices remained in a negative trajectory, \ndropping by 0.73% from US$15,610.91 per \ntonne in the preceding month to US$15,497.65 \nper tonne during the month under review, as \nfears of output restrictions by Indonesia were \ninsufficient to offset the prevailing sentiment of \nan oversupplied market. Figure 3 shows base \nmetals price developments for the period from \nFebruary 2022 to February 2025. \n \nFigure 3: Base Metal Prices (US$/tonne): \nFebruary 2022 – February 2025 \n \nSource: Bloomberg 2025 \n \nLithium \nLithium prices improved during the month \nunder review, attributable to expectations of \nsupply reduction in 2025. Consequently, \nlithium prices increased by 3.24%, closing the \nmonth of February 2025 at US$10,350.00 per \ntonne. Price developments for lithium for the \nperiod February 2023 to February 2025 are \nshown in Figure 4. \n \n \n \n \n \n \n \nFigure 4: Lithium Prices (US$/tonne) \nFebruary 2023 – February 2025 \n \nSource: London Metal Exchange, 2025 \n \nMerchandise Trade Developments \nDuring the month of February 2025, total \nmerchandise trade declined by 11.3% to \nUS$1.24 \nbillion, \nfrom \nUS$1.40 \nbillion \nrecorded in the previous month, due to declines \nin both exports and imports. On a year-to-year \ncomparison, total merchandise trade declined \nby 9.6% in February 2025, from US$1.37 \nbillion recorded in February 2024. \n \nMerchandise Exports \nThe country’s merchandise exports recorded \nUS$512.6 million in February 2025, a 21.4% \ndecline from the previous month’s outturn of \nUS$652.0 million. The decline was largely due \nto lower export earnings from gold, tobacco \nand platinum group metals (PGMs). On a year-\non-year basis exports were 20.5% lower in \nFebruary 2025 compared to US$645.0 million \nregistered in February 2024. \n \n8,000\n13,000\n18,000\n23,000\n28,000\n33,000\n38,000\n4,500\n5,500\n6,500\n7,500\n8,500\n9,500\n10,500\n11,500\nFeb-22\nJun-22\nOct-22\nFeb-23\nJun-23\nOct-23\nFeb-24\nJun-24\nOct-24\nFeb-25\nUS$/tonne\nUS$/tonne\nCopper\nNickel (RHS)\n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\nFeb-23\nApr-23\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nUS$/tonne\n \n \n \n4 \n \nFigure 5 shows developments in the country’s \nmerchandise exports for the period from \nJanuary 2024 to February 2025. \n \nFigure 5: Monthly Merchandise Exports \n(US$ millions): 2024 and 2025 \n \nSource: ZIMSTAT, 2025 \n \nExports by Commodity \nThe country's export basket was predominantly \ncomposed of primary commodities, with gold \nleading at 42.31%, followed by tobacco, \n18.0%, and PGMs at 15.1%. Table 2 shows \ndevelopments in the country’s exports for the \nmonths of January and February 2025. \n \n \n \n \n \n \n \n \n \n \n \n \n \nTable 2: Major Exports (US$ millions) \n \nJan-25 \n(US$m) \nFeb-25 \n(US$m) \nJan-Feb \n2025 \nChanges \n(%) \nShare of \nExports \n(%) \nTotal \n652.0 \n512.6 \n-21.4 \n100.0 \nOf Which: \n \n \n \n \nGold \n291.5 \n216.9 \n-25.6 \n42.3 \nTobacco (Including \ncigarettes) \n130.1 \n92.1 \n-29.2 \n18.0 \nPGMs \n103.0 \n77.3 \n-25.0 \n15.1 \nOther mineral \nsubstances \n13.2 \n19.2 \n45.0 \n3.7 \nCoke \n18.4 \n19.0 \n3.3 \n3.6 \nOther ores and \nconcentrates \n15.7 \n16.2 \n3.6 \n3.2 \nFerrochromium \n22.5 \n14.3 \n-36.6 \n2.8 \nIndustrial diamond \n15.3 \n10.7 \n-29.1 \n2.1 \nChromium ores and \nconcentrates \n10.2 \n9.3 \n-8.8 \n1.8 \nSugar \n1.8 \n3.9 \n115.9 \n0.8 \nOthers \n30.3 \n33.7 \n11.0 \n6.6 \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \nExport Markets \nIn February 2025, the country’s exports were \nprimarily directed to United Arab Emirates \n(42.6%), South Africa (23.3%), and China at \n19.3%. The remaining exports were spread \nacross various other international jurisdictions \nand markets. Figure 6 shows the country’s \nmajor export markets during the month under \nreview. \n \nFigure 6: Top Ten Merchandise Export \nDestinations (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \n \n540.9\n645.0\n534.7\n513.5\n583.0\n524.0\n548.3\n674.0\n575.0\n698.1\n905.2\n692.4\n652.0\n512.6\n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1000\nJan\nFeb Mar Apr May Jun\nJul\nAug Sep Oct Nov Dec\n2024\n2025\n42.6\n23.3\n19.3\n2.7\n2.0\n1.6\n1.0\n0.6\n0.6\nUnited Arab Emirates\nSouth Africa\nChina\nMozambique\nZambia\nHong Kong\nNetherlands\nBotswana\nItaly\n \n \n \n5 \n \nMerchandise Imports \nMerchandise \nimports \nreached \nUS$730.3 \nmillion in February 2025, reflecting a 2.5% \ndecline from US$748.8 million recorded in the \nprevious month. Figure 7 shows the monthly \nmerchandise imports from January 2024 to \nFebruary 2025. \n \nFigure 7: Monthly Merchandise Imports \n(US$ millions): 2024 and 2025 \n Source: ZIMSTAT & RBZ Computations, 2025 \n \nImports by Commodity \nDuring the month of February 2025, the import \nbasket was largely comprised of raw materials \n(32.8%), capital goods (20%), and fuels and \nlubricants ((19.6%) as shown in Table 3. \n \n \n \n \n \n \n \n \n \nTable 3: Major Imports (US$ millions) \n \nJan-25 \n(US$m) \nFeb-25 \n \n(US$m) \nJan-Feb \n25 \nChanges \n(%) \nShare \nof Total \nImports \n(%) \nFeb-25 \nTotal \n749.2 \n730.3 \n-2.5 \n100.0 \nOf Which: \n \n \n \n \nIndustrial \nSupplies \n278.1 \n239.3 \n-13.9 \n32.8 \nCapital \nGoods \n142.0 \n146.3 \n3.0 \n20.0 \nFuels and \nLubricants \n139.8 \n143.4 \n2.6 \n19.6 \nFood and \nBeverages \n69.1 \n75.4 \n9.0 \n10.3 \nTransport \nEquipment \nand Parts \n73.5 \n74.0 \n0.6 \n10.1 \nConsumer \nGoods \n40.5 \n44.9 \n11.0 \n6.1 \nOthers \n6.1 \n7.1 \n15.7 \n1.0 \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \nIn February 2025, the country’s imports were \nmainly sourced from the following markets: \nSouth Africa (37.7%), China (16.9%), the \nBahamas (10.7%), and Singapore (3.4%). The \nremaining imports came from various other \nmarkets as shown in Figure 8. \n \nFigure 8: Top Ten Merchandise Import \nSources (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2025 \n \n37.7\n16.9\n10.7\n3.4\n3.0\n3.0\n2.6\n2.5\n2.5\n2.1\nSouth Africa\nChina\nBahamas\nSingapore\nZambia\nMozambique\nHong Kong\nBahrain\nItaly\nIndia\n694.2\n729.7\n720.5\n719.6\n746.1\n755.0\n828.3\n876.2\n784.2\n835.9\n952.1\n889.3\n749.2\n730.3\n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1000\nJan Feb Mar Apr May Jun\nJul Aug Sep Oct Nov Dec\n2024\n2025\n \n \n \n6 \n \nMerchandise Trade Balance \nDuring the month of February 2025, the \ncountry’s trade deficit widened to US$217.7 \nmillion, from US$96.8 million recorded in the \nprevious month. Relative to February 2024, the \ndeficit increased by 157% from US$84.7 \nmillion. Figure 9 shows the country’s trade \nbalance for the period from December 2024 to \nFebruary 2025. \n \n \nFigure 9: Merchandise Trade Balance (US$ \nmillions) \n \n Source: ZIMSTAT & RBZ Computations, 2025 \nMONETARY DEVELOPMENTS1 \nBroad \nmoney \n(M3) \nstock \nstood \nat \nZiG85,635.15 million in February 2025, a \ndecline of 1.71% from the January 2025 \nposition of ZiG87,120.75 million. \n \nThe decline in broad money largely reflected a \nmonth-on-month decrease of 3.12% in the \nforeign \ncurrency \ncomponent, \nfrom \n \n1 All monetary numbers are valued in ZiG since the \nintroduction of the new currency in April 2024. \n2 Claims in Government were adjusted for exchange \nlosses related to SDR drawdowns for the period April \nZIG73,255.21 million recorded in January \n2025 to ZIG70,971.06 million. The local \ncurrency component, however, recorded a \nmonth-on-month growth of 5.76%, from \nZiG13,865.54 million to ZiG14,664.08 million. \nThe money stock was comprised of 82.88% \nforeign currency deposits, 17.00% local \ncurrency deposits, and 0.12% local currency in \ncirculation. \nFigure 10 shows the composition of the money \nsupply. \n \nFigure 10: Composition of Money Supply \nSource: Reserve Bank of Zimbabwe, 2025 \n \nDuring the month under review, credit to the \nprivate sector and net claims on the \nGovernment2 increased by 0.80% and 2.32%, \nfrom ZiG56,741.74 million and ZiG52,732.57 \nmillion \nto \nZiG57,193.72 \nmillion \nand \nZiG53,954.32 million, respectively. \nOutstanding credit to the private sector was \nmainly channelled to households, agriculture, \n2024 to January 2025. The adjustment is an accounting \ntreatment which does not constitute actual RBZ lending \nto Government. \n692.4\n652.0\n512.6\n889.3\n749.2\n730.3\n-196.9\n-97.2\n-217.7\n-400.0\n-200.0\n0.0\n200.0\n400.0\n600.0\n800.0\n1000.0\nDec-24\nJan-25\nFeb-25\nExports\nImports\nTrade Balance\nNCDs, \n0.00%\nLocal Currency \nTime Deposits, \n2.43%\nFX Time \nDeposits, 7.74%\nLocal Currency \nTransferable , \n13.37%\nFX Transferable \nDeposits, 76.34%\nCurrency in \nCirculation, \n0.12%\n \n \n \n7 \n \nmanufacturing, \nand \ndistribution, \nwhich \nreceived 27.79%, 17.55%, 13.75%, and \n10.21% of the total credit, respectively. The \nmining sector received 10.16% of the total \noutstanding credit. \nFigure 11 shows the distribution of credit by \nsector \n \nFigure 11: Distribution of Private Sector \nCredit \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nCredit to the private sector was largely utilized \nfor recurrent expenditures, 38.01%; inventory \nbuild-up, \n23.34%; \nand \nfixed \ncapital \ninvestments, 13.96%. \n \nSTOCK MARKET DEVELOPMENTS \nZimbabwe Stock Exchange (ZSE) \nDuring February 2025, the Zimbabwe Stock \nExchange (ZSE) recovered from the previous \nmonth’s losses. As a result, the All Share, Top \n10 and Top 15 indices added 4.34%, 6.19% and \n5.76% to close at 204.06 points, 204.65 points \nand 206.03 points, respectively. \nThe resource index, however, declined by \n15.70% to close at 193.56 points. \n \nFigure 12: ZSE All Share, Top 10 and \nMining Indices \n \nSource: Zimbabwe Stock Exchange, 2025 \n \nDuring the month under review, trading \nactivity was concentrated in some selected \nwealth-preserving counters. \nAs a result, the cumulative volume and value of \nshares traded increased by 5.02% and 156.94% \nto close at 197.20 million shares and \nZiG506.14 million, respectively. \nThe proportion of foreign purchases to the \nvalue of shares traded increased from 1.82% in \nthe previous month to 25.53% in February \n2025. \nNet foreign position, however, worsened from \na negative position of ZiG0.55 million to a \nnegative ZiG11.00 million. \n \n \n \nHouseholds\n27.79%\nAgriculture\n17.55%\nMining\n10.16%\nManufacturing\n13.75%\nDistribution\n10.21%\nTransport and \nCommunication\n2.42%\nServices\n9.08%\nFinancial \nOrganisations and \nInvestments\n6.49%\nConstruction\n2.54%\nOther\n0.00%\n100\n150\n200\n250\n300\n350\n160\n210\n260\n310\nALL SHARE AND TOP 10 INDICES\nZSE ALL SHARE INDEX\nTop 10 Index\nMining Index (Points)\n \n \n \n8 \n \nFigure 13: ZSE Monthly Volume and Value \nTraded \n \nSource: Zimbabwe Stock Exchange, 2025 \n \nOwing to the bullish sentiments exhibited on \nthe ZSE during the period under review, the \nmarket gained 5.56%, or ZiG3 266.09 million \nworth of capitalization to close at ZiG62 060.95 \nmillion. This is comparable to ZiG58 794.86 \nmillion recorded in the previous month \n \nVictoria Falls Stock Exchange (VFEX) \nThe Victoria Falls Stock Exchange (VFEX) \nexhibited bullish sentiments. As such, the \nVFEX All Share index added 2.97% to close at \n106.11 points, compared to 103.04 points \nrecorded in January 2025. \n \nOn an annual basis, the VFEX All Share index \nalso gained 7.62%, from 98.59 points recorded \nin February 2024. \n \n \n \n \n \n \nFigure 14: Victoria Falls Stock Exchange \n(VFEX) All Share Index (ASI) \n \nSource: Victoria Falls Stock Exchange, 2025 \n \nVFEX Market Capitalization \nDespite positive trading sentiments on the \nVFEX, market capitalization decreased by \n6.67% to US$ 1,190.43 million, compared to \nUS$ 1,275.57 million recorded in the previous \nmonth. \n \nThe decline in VFEX market capitalization \nreflects the delisting of National Foods \nHoldings Limited from the USD-denominated \nexchange market, which significantly reduced \nthe number of tradable outstanding shares on \nthe VFEX. \n \nFigure 15: Victoria Falls Stock Exchange \n(VFEX) Market Capitalization (US$ Billion) \n \nSource: Victoria Falls Stock Exchange (VFEX), 2025 \n0\n100\n200\n300\n400\n500\n600\n0\n100\n200\n300\nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nVALUE TRADED ZIG MILLIONS\nVOLUME TRADED (MILIONS)\nVolume\nValue\n90\n95\n100\n105\n110\n115\nJan-24\nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\n1.15\n1.175\n1.2\n1.225\n1.25\n1.275\n1.3\nUS$ BILLIONS\n \n \n \n9 \n \nNATIONAL PAYMENTS SYSTEM \nThe total digital payment systems transaction \nvalues for February 2025 decreased by 9% to \nZiG162.46 billion from ZiG178.79 billion. \nVolumes also decreased by 6% to 53.57 million \nfrom 56.83 million recorded in January 2025 as \nshown in Figure 16. \n \nFigure 16: Payment Systems Monthly \nTransactional Values and Volumes from \nMarch 2024 - February 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe value of transactions processed through the \nRTGS system in February 2025 decreased by \n12% to ZiG92.21 billion from ZiG105.34 \nbillion reported in January 2025 whilst volumes \ndecreased by 3% to 0.82 million from 0.84 \nmillion during the same period. \n \n \n \n \n \nFigure 17: RTGS System Trend for Values \nand Volumes from February 2024 - \nFebruary 2025 \n \nSource: Reserve Bank of Zimbabwe, 2025 \n \nMobile and Internet Based Transactions \nMobile \nand \ninternet-based \ntransactions \ndecreased by 2.2% from ZiG59.34 billion in \nJanuary 2025, to ZiG58.04 billion in February \n2025. \n \nCash Transactions \nCash based transactions deceased by 13.31% to \nZiG13.89 billion in February 2025, from \nZiG16.02 billion obtained in January 2025. \n \nCard Based Transactions \nCard based transactions decreased by 13.47% \nfrom ZiG14.11 billion in January 2025 to \nZiG12.21 billion recorded in February 2025. \nINFLATION OUTTURN \nDuring the month of February 2025, both the \nZiG inflation and the US$ inflation fell below \n1%. \n0\n10\n20\n30\n40\n50\n60\n70\n80\n0\n50\n100\n150\n200\n250\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nVolumes (Millions)\nValues (Billions)\nValues\nVolumes\n 0.7\n 0.8\n 0.8\n 0.9\n 0.9\n 1.0\n 1.0\n 1.1\n 1.1\n0\n20\n40\n60\n80\n100\n120\n140\nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nVolumes in Millions\nValues in $ Billions\nValues\nVolume\n \n \n \n10 \n \nMonthly Inflation \nThe ZIG monthly inflation rate slowed from \n10.5% recorded in January 2025, to 0.5% in \nFebruary 2025. \n \nFigure 18 shows developments in monthly ZiG \ninflation from May 2024 to February 2025. \n \nFigure 18: ZiG Month-on-Month Inflation \n(%) \n \nSource: ZIMSTAT, 2025 \n \nThe US$ month-on-month inflation rate \ndecreased from 11.5% in January 2025 to 0.2% \nin February 2025. \n \nThe decline in monthly inflation is consistent \nwith the prevailing stability in the monetary and \nfinancial conditions, brought about by the tight \nmonetary policy measures instituted by the \nReserve Bank of Zimbabwe. \n \nUS$ Annual Inflation Developments \nAnnual US$ inflation rate surged from 14.6% \nrecorded in January 2025 to 15.1% in February \n2025. \n \n \n \n \n \nFigure \n19: \nUS$ \nAnnual \nInflation \nDevelopments (%) \n \nSource: ZIMSTAT, 2025 \n \n \n \nAPRIL 2025 \nRESERVE BANK OF ZIMBABWE \n-5\n0\n5\n10\n15\n20\n25\n30\n35\n40\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\n-6\n-4\n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\nDec-23\nJan-24\nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\n \n \n11 \nStatistical Tables \nMonetary Statistics \n 1. Depository Corporations Survey \n \n \n \n12 \n 2. Central Bank Survey \n \n \n \n \n \n \n13 \n \n3. Other Depository Corporations Survey \n \n \n \n \n14 \n Other Depository Corporations \n \n4.1 Assets \n \n \n \n \n \n \n \n15 \n 4.2 Liabilities \n \n \n \n \n \n \n \n16 \n Commercial Banks \n 5.1 Assets \n \n \n \n \n17 \n 5.2 Liabilities \n \n \n \n18 \n Building Societies \n 6.1 Assets \n \n \n \n \n \n \n19 \n 6.2 Liabilities \n \n \n \n \n \n20 \n Sectoral Analysis of Bank Loans and Advances and Deposits \n \n7.1 Sectoral Analysis of Commercial Banks Loans and Advances \n21 \n \n7.2 Sectoral Analysis of Commercial Banks Deposits \n \n \n22 \n Interest Rates \n \n8.1 Lending Rates \n \n \n \n \n \n \n \n23 \n \n8.2 Banks Deposit Rates \n \n \n \n \n \n \n24 \nInflation \n \n9.1 Monthly Inflation \n \n \n \n \n \n \n25 \n \n9.2 Yearly Inflation \n \n \n \n \n \n \n \n26 \nExternal Statistics \n 10. Exchange Rates \n \n \n \n \n \n \n \n27 \nZimbabwe Stock Exchange \n 11. Zimbabwe Stock Market Statistics \n \n \n \n \n28 \nNational Payments System Statistics \n \n \n \n \n12.1 Values of Transactions \n \n \n \n \n \n29 \n \n12.2 Volumes of Transactions \n \n \n \n \n \n30 \nTrade Statistics \n \n \n \n \n \n \n \n 13. Merchandise Trade Statistics \n \n 31 \n \n \n \n \n12 \n \nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nNet Foreign Assets\n-45,596,903.93\n-66,258,169.98\n-28,856.80\n-27,776.93\n-27,814.24\n-27,003.21\n-27,816.06\n-51,275.16\n-54,146.37\n-48,383.46\n-47,290.39\n-49,520.83\n-50,100.97\nCentral Bank(net)\n-54,031,060.41\n-77,865,030.28\n-35,698.77\n-34,640.99\n-34,675.54\n-34,509.44\n-34,520.05\n-62,586.92\n-66,010.33\n-57,686.80\n-56,911.91\n-58,197.29\n-60,030.71\nForeign Assets\n7,165,906.23\n12,179,330.67\n9,276.28\n9,502.38\n10,341.19\n10,301.55\n10,342.78\n17,610.06\n24,894.78\n22,229.01\n23,239.75\n23,967.01\n23,087.88\nForeign Liabilities\n61,196,966.64\n90,044,360.95\n44,975.04\n44,143.36\n45,016.73\n44,810.99\n44,862.84\n80,196.98\n90,905.11\n79,915.81\n80,151.65\n82,164.30\n83,118.59\nOther Depository Corporations(net)\n8,434,156.47\n11,606,860.30\n6,841.96\n6,864.06\n6,861.30\n7,506.23\n6,703.99\n11,311.76\n11,863.96\n9,303.35\n9,621.51\n8,676.45\n9,929.74\nForeign Assets\n12,860,635.15\n18,155,224.10\n10,973.84\n11,293.66\n11,679.33\n12,352.81\n11,598.44\n20,019.42\n21,861.67\n17,752.44\n19,141.21\n19,229.14\n20,477.93\nForeign Liabilities\n4,426,478.68\n6,548,363.80\n4,131.87\n4,429.60\n4,818.03\n4,846.58\n4,894.45\n8,707.65\n9,997.71\n8,449.09\n9,519.70\n10,552.69\n10,548.19\n0.00\nNet Domestic Assets (NDA)\n86,209,941.03\n125,429,655.45\n67,611.59\n68,804.54\n70,540.71\n72,978.85\n74,289.27\n126,283.12\n141,729.29\n131,610.28\n134,739.35\n136,641.59\n135,736.11\nDomestic Claims\n39,630,053.42\n58,052,804.32\n53,500.00\n54,803.53\n56,344.94\n60,565.63\n61,126.25\n104,881.67\n120,558.28\n105,678.26\n108,915.80\n111,239.08\n113,660.93\nClaims on Central Government(net)\n12,506,419.69\n16,182,769.56\n28,205.41\n28,407.20\n28,221.48\n30,417.96\n30,051.03\n52,245.38\n59,872.77\n49,971.17\n51,692.04\n52,732.57\n53,954.32\nClaims on Central Government\n14,706,600.27\n22,087,558.83\n31,723.97\n32,009.48\n33,320.57\n35,189.93\n35,139.28\n60,331.26\n68,339.60\n59,979.05\n62,000.03\n62,771.67\n59,447.93\nCentral Bank*\n8,298,885.39\n13,434,742.85\n25,896.94\n26,112.14\n26,985.97\n27,458.25\n28,058.14\n49,156.93\n56,008.80\n49,413.73\n50,322.20\n51,342.65\n48,573.05\nODCs\n6,407,714.88\n8,652,815.98\n5,827.03\n5,897.34\n6,334.60\n7,731.69\n7,081.14\n11,174.32\n12,330.80\n10,565.32\n11,677.83\n11,429.02\n10,874.88\nLess Liabilities to Central Government\n2,200,180.57\n5,904,789.27\n3,518.56\n3,602.28\n5,099.09\n4,771.98\n5,088.24\n8,085.88\n8,466.84\n10,007.88\n10,307.99\n10,039.10\n5,493.61\nCentral Bank\n1,859,602.80\n5,389,222.25\n3,275.71\n3,252.31\n4,509.83\n4,333.36\n4,555.31\n7,502.60\n7,839.37\n9,330.64\n9,591.57\n9,335.10\n4,557.22\nODCs\n340,577.77\n515,567.01\n242.85\n349.97\n589.26\n438.61\n532.94\n583.28\n627.47\n677.24\n716.42\n704.00\n936.39\nClaims on Other Sectors\n27,123,633.73\n41,870,034.76\n25,294.59\n26,396.33\n28,123.46\n30,147.67\n31,075.21\n52,636.29\n60,685.52\n55,707.08\n57,223.76\n58,506.51\n59,706.61\nOther Financial Corporations\n461,955.00\n803,485.08\n357.60\n435.16\n514.87\n481.66\n511.87\n867.29\n933.15\n842.46\n842.56\n809.80\n1,025.41\nState and Local Government\n232.00\n143.35\n1.80\n1.37\n1.49\n0.16\n0.19\n0.33\n0.08\n0.10\n0.57\n10.04\n18.89\nPublic Non Financial Corporations\n1,149,678.23\n1,615,646.42\n953.15\n936.15\n896.79\n876.57\n797.48\n1,314.16\n1,501.89\n1,234.05\n901.66\n944.93\n1,468.59\nPrivate Sector\n25,511,768.49\n39,450,759.91\n23,982.04\n25,023.65\n26,710.31\n28,789.28\n29,765.67\n50,454.50\n58,250.40\n53,630.47\n55,478.97\n56,741.74\n57,193.72\nCentral Bank\n211,425.09\n325,816.65\n148.91\n153.64\n237.80\n234.89\n231.23\n354.10\n437.25\n402.43\n403.34\n519.44\n538.88\nODCs\n25,300,343.41\n39,124,943.26\n23,833.13\n24,870.02\n26,472.52\n28,554.39\n29,534.44\n50,100.40\n57,813.15\n53,228.05\n55,075.63\n56,222.30\n56,654.84\nOther Items(Net)\n-46,579,887.61\n-67,376,851.14\n-14,111.59\n-14,001.01\n-14,195.77\n-12,413.22\n-13,163.03\n-21,401.46\n-21,171.01\n-25,932.03\n-25,823.55\n-25,402.51\n-22,075.19\nShares and Other Equity\n-43,302,266.35\n-60,601,283.93\n-12,601.01\n-10,297.97\n-7,881.58\n-6,103.69\n-3,963.84\n-5,871.02\n-6,523.13\n-9,456.19\n-6,806.94\n-6,956.77\n-3,405.92\nLiabilities to Other Financial Corporations\n279,727.92\n361,061.72\n222.68\n4.56\n13.22\n12.00\n12.50\n51.08\n16.11\n42.66\n112.46\n26.63\n17.39\nRestricted Deposits\n2,182,139.25\n1,707,978.42\n1,197.30\n1,636.34\n1,719.55\n1,550.88\n2,087.87\n3,658.37\n3,837.90\n3,788.06\n4,320.76\n4,381.22\n6,468.48\nDeposits and Securities Excluded from Base Money\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-5,739,488.44\n-8,844,607.35\n-2,930.56\n-5,343.93\n-8,046.96\n-7,872.41\n-11,299.56\n-19,239.88\n-18,501.89\n-20,306.55\n-23,449.82\n-22,853.59\n-25,155.13\nBroad Money-M3\n40,613,037.10\n59,171,485.48\n38,754.79\n41,027.61\n42,726.47\n45,975.63\n46,473.21\n75,007.96\n87,582.92\n83,226.83\n87,448.96\n87,120.75\n85,635.15\nSecurities Other than Shares Included in Broad Money\n9,458.36\n6,990.86\n2.80\n4.37\n3.99\n19.18\n26.61\n23.83\n42.73\n0.00\n0.00\n0.00\n0.00\nBroad Money-M2\n40,603,578.73\n59,164,494.62\n38,751.99\n41,023.24\n42,722.48\n45,956.45\n46,446.60\n74,984.13\n87,540.19\n83,226.83\n87,448.96\n87,120.75\n85,635.15\nOther Deposits (Time Deposits)\n2,805,565.71\n4,455,813.26\n2,705.48\n3,276.46\n3,820.45\n3,890.29\n3,878.31\n5,866.41\n7,892.50\n7,727.40\n8,189.14\n8,859.84\n9,071.11\nof which Foreign Currency Accounts\n2,089,992.44\n3,750,078.07\n2,426.64\n2,953.23\n3,343.14\n3,425.73\n3,030.91\n4,839.19\n6,654.69\n5,209.30\n5,598.13\n6,742.78\n6,673.16\nNarrow Money-M1\n37,798,013.02\n54,708,681.36\n36,046.51\n37,746.78\n38,902.03\n42,066.16\n42,568.30\n69,117.71\n79,647.69\n75,499.42\n79,259.81\n78,260.91\n76,564.03\nTransferable Deposits\n37,782,959.10\n54,692,210.23\n36,036.21\n37,708.56\n38,850.80\n42,007.92\n42,499.23\n69,037.22\n79,550.71\n75,399.73\n79,160.58\n78,157.44\n76,460.87\n Of which Foreign Currency Accounts\n32,969,005.36\n47,611,823.20\n29,423.83\n30,036.32\n30,193.91\n31,635.02\n31,676.25\n58,411.49\n69,086.19\n64,595.58\n67,208.79\n66,512.43\n64,297.90\nCurrency Outside Depository Corporations\n15,053.92\n16,471.13\n10.30\n38.23\n51.23\n58.23\n69.07\n80.49\n96.98\n99.70\n99.23\n103.48\n103.16\nMemorandum Items\nReserve Money\n4,054,140.06\n6,141,481.65\n4,892.12\n6,639.45\n7,238.62\n7,282.11\n7,708.04\n13,606.58\n20,428.83\n20,028.01\n20,395.12\n21,688.51\n21,184.52\nFCAs as a Percentage of Deposits in M3\n86.4%\n86.8%\n82.2%\n80.5%\n78.6%\n76.4%\n74.8%\n82.7%\n86.6%\n84.0%\n83.4%\n84.2%\n82.9%\nEnd Period Exchange Rate\n14,912.83\n22,055.47\n13.43\n13.32\n13.70\n13.79\n13.85\n24.88\n28.68\n25.45\n25.80\n26.37\n26.56\nSource: Reserve Bank of Zimbabwe,2025\nNotes:\n*From April 2024, amounts include Unrealised Exchange Losses pertaining to IMF SDR Drawdowns which have been reclassified from Other Assets (OIN).\n(i) Depository corporations survey - formerly Monetary Survey.\n(ii) Broad money redefined using IMF's Monetary and Financial Statistics Manual of 2000. Major changes include exclusion of Government deposits held by banks from broad money.\n(iii) Transferable deposits made up of demand and savings deposits.\n(iv) NCDs are also referred to as securities included in broad money.\n(v) All classes of time deposits, short and long term are classified as time deposits, which are also termed other deposits.\n(vi) Credit to the private sector now excludes claims on other financial corporations, as well as claims on state and local government (local authorities)\n(vii) Depository corporations made up of the Central Bank and other depository corporations\n(viii) Other depository corporations (ODCs) - Commercial banks, merchant banks, building societies and POSB.\n(ix) In December 2017, the statistics were adjusted in restrospect by reclassifying Securities issued under Aftrades from claims on government to claims on central bank\n(x) In December 2017, the statistics were adjusted in restrospect by reclassifying amounts accessed by banks under the Aftrades from liabilities to Other Depository corporations and Other Financial Corporations to liabilities to Central Bank \n(xi) In December 2018, statistics were revised from November 2017 due to reclassification of lines of credit (foreign liabilities) that were initially classified as deposits included in broad money\n(xii) All monetary and financial statistics are valued in ZWL$ since the introduction of the interbank foreign exchange market in February 2019\nTABLE 1: DEPOSITORY CORPORATIONS SURVEY \n($ 'Million)\n \n \n13 \n \n \n \nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nNet Foreign Assets\n-54,031,060.41\n-77,865,030.28\n-35,698.77\n-34,640.99\n-34,675.54\n-34,509.44\n-34,520.05\n-62,586.92\n-66,010.33\n-57,686.80\n-56,911.91\n-58,197.29\n-60,030.71\nClaims on Non Residents\n7,165,906.23\n12,179,330.67\n9,276.28\n9,502.38\n10,341.19\n10,301.55\n10,342.78\n17,610.06\n24,894.78\n22,229.01\n23,239.75\n23,967.01\n23,087.88\nOfficial Reserves Assets\n1,440,292.08\n2,707,777.26\n3,630.14\n4,432.81\n4,934.35\n4,653.58\n4,669.13\n7,448.23\n13,215.72\n12,029.88\n12,507.85\n13,012.03\n12,782.10\nOther Foreign Assets\n5,725,614.15\n9,471,553.41\n5,646.13\n5,069.57\n5,406.85\n5,647.96\n5,673.65\n10,161.83\n11,679.05\n10,199.13\n10,731.90\n10,954.98\n10,305.78\nLess Liabilities to Non Residents\n61,196,966.64\n90,044,360.95\n44,975.04\n44,143.36\n45,016.73\n44,810.99\n44,862.84\n80,196.98\n90,905.11\n79,915.81\n80,151.65\n82,164.30\n83,118.59\nShort Term Liabilities\n347,930.96\n890,130.62\n181.91\n68.81\n68.32\n67.28\n68.95\n121.43\n139.96\n124.23\n127.60\n130.78\n132.09\nOther Foreign Liabilities*\n60,849,035.68\n89,154,230.33\n44,793.13\n44,074.55\n44,948.40\n44,743.71\n44,793.89\n80,075.55\n90,765.15\n79,791.57\n80,024.06\n82,033.52\n82,986.50\n of which blocked funds\n11,781,589.93\n17,401,899.56\n10,572.46\n10,463.76\n10,741.17\n10,788.19\n10,803.57\n19,394.80\n22,213.36\n19,667.09\n17,365.02\n17,716.70\n17,848.34\nNet Domestic Assets (NDA)\n58,085,200.47\n84,006,511.93\n42,153.86\n41,280.44\n41,914.15\n41,791.55\n42,228.09\n76,193.50\n86,439.16\n77,714.81\n77,307.02\n79,885.79\n81,215.22\nDomestic Claims\n6,966,928.71\n8,857,704.49\n23,016.13\n23,259.57\n22,964.44\n23,611.62\n23,986.46\n42,382.26\n49,026.77\n40,880.35\n41,177.61\n42,570.17\n45,225.55\nNet Claims on Central Government\n6,439,282.59\n8,045,520.59\n22,621.23\n22,859.83\n22,476.14\n23,124.88\n23,502.83\n41,654.33\n48,169.43\n40,083.09\n40,730.63\n42,007.56\n44,015.83\nClaims on Central Government\n8,298,885.39\n13,434,742.85\n25,896.94\n26,112.14\n26,985.97\n27,458.25\n28,058.14\n49,156.93\n56,008.80\n49,413.73\n50,322.20\n51,342.65\n48,573.05\nOf which: Securities Other than Shares\n6,608,105.20\n11,307,721.90\n6,909.93\n6,872.11\n7,091.36\n7,151.41\n7,200.85\n12,949.53\n15,003.33\n13,352.40\n13,877.09\n14,218.90\n14,323.59\nLoans\n1,690,780.19\n2,127,020.95\n18,987.00\n19,240.02\n19,894.61\n20,306.84\n20,857.28\n36,207.40\n41,005.47\n36,061.34\n36,445.10\n37,123.76\n34,249.45\n Loans and Advances**\n1,049,930.70\n1,560,372.57\n791.54\n1,044.83\n1,287.21\n1,588.97\n1,589.53\n1,656.11\n1,575.29\n1,576.28\n1,579.04\n1,582.38\n8.68\nAmounts Due from Gvt including SDR Drawdowns\n640,849.49\n566,648.39\n18,195.47\n18,195.20\n18,607.40\n18,717.87\n19,267.75\n34,551.29\n39,430.19\n34,485.06\n34,866.06\n35,541.37\n34,240.77\n of which USD Securities revaluations (Exchange rate \nmovements)\n17,984.31\n17,896.02\n18,308.22\n18,563.85\n18,972.80\n34,256.34\n39,103.48\n34,071.40\n34,373.22\n35,256.53\n35,520.01\n Export Incentives\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLess Liabilities to Central Government\n1,859,602.80\n5,389,222.25\n3,275.71\n3,252.31\n4,509.83\n4,333.36\n4,555.31\n7,502.60\n7,839.37\n9,330.64\n9,591.57\n9,335.10\n4,557.22\nOf which: Deposits\n1,859,602.80\n5,389,222.25\n3,275.71\n3,252.31\n4,509.83\n4,333.36\n4,555.31\n7,502.60\n7,839.37\n9,330.64\n9,591.57\n9,335.10\n4,557.22\nof which Foreign Currency\n2,744.56\n2,472.55\n3,275.40\n3,115.31\n3,469.72\n6,332.62\n7,620.21\n9,113.05\n9,291.47\n8,231.67\n3,875.54\nLocal Currency Deposits\n0.00\n779.76\n1,234.43\n1,218.05\n1,085.59\n1,169.98\n219.16\n217.59\n300.09\n1,103.43\n681.67\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n527,646.13\n812,183.89\n394.90\n399.74\n488.29\n486.74\n483.63\n727.93\n857.34\n797.26\n446.98\n562.62\n1,209.73\nOther Financial Corporations\n71,573.93\n153,883.74\n62.04\n63.27\n62.78\n63.30\n64.05\n64.25\n68.33\n80.13\n31.35\n31.71\n245.53\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n244,647.11\n332,483.50\n183.95\n182.84\n187.72\n188.55\n188.35\n309.57\n351.77\n314.70\n12.29\n11.46\n425.32\nPrivate Sector\n211,425.09\n325,816.65\n148.91\n153.64\n237.80\n234.89\n231.23\n354.10\n437.25\n402.43\n403.34\n519.44\n538.88\nClaims on Other Depository Corporations\n503,151.45\n684,600.93\n364.06\n361.69\n362.07\n322.95\n315.11\n546.77\n591.24\n1,571.34\n907.94\n794.55\n948.29\nOf which: Loans\n503,151.45\n684,600.93\n364.06\n361.69\n362.07\n322.95\n315.11\n546.77\n591.24\n1,571.34\n907.94\n794.55\n948.29\nOther Liabilities to ODCs\n8,128,905.48\n10,984,562.86\n5,672.54\n6,381.13\n5,909.43\n5,505.98\n5,409.08\n4,538.82\n6,707.06\n8,873.54\n8,273.62\n7,914.94\n8,889.89\nOf which: Aftrades Balances\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Securities\n2,432,925.53\n3,557,870.72\n2,260.63\n2,214.95\n2,314.58\n2,802.34\n2,870.63\n1,385.74\n1,724.80\n2,144.38\n2,002.01\n1,650.52\n2,378.36\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(Net)\n-58,744,025.79\n-85,448,769.38\n-24,446.21\n-24,040.31\n-24,497.08\n-23,362.96\n-23,335.61\n-37,803.29\n-43,528.19\n-44,136.67\n-43,495.09\n-44,436.01\n-43,931.27\nShares and Other Equity\n-58,155,147.57\n-84,000,619.82\n-24,240.75\n-23,915.83\n-24,236.24\n-23,332.83\n-23,091.44\n-37,896.15\n-43,845.10\n-41,767.53\n-39,722.52\n-40,716.69\n-38,350.82\nOther Items(Net)\n-2,790,865.16\n-3,189,753.79\n-1,523.00\n-2,100.72\n-2,120.67\n-1,846.51\n-2,396.36\n-3,908.73\n-4,040.26\n-6,511.31\n-8,239.99\n-8,373.47\n-12,139.47\nLiabilities to Other Resident Sectors\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nDeposits and Securities Excluded from Base Money\n2,201,986.94\n1,741,604.23\n1,317.55\n1,976.25\n1,859.83\n1,816.38\n2,152.19\n4,001.59\n4,357.17\n4,142.16\n4,467.42\n4,654.15\n6,559.02\nMonetary Base \n4,054,140.06\n6,141,481.65\n6,455.09\n6,639.45\n7,238.62\n7,282.11\n7,708.04\n13,606.58\n20,428.83\n20,028.01\n20,395.12\n21,688.51\n21,184.52\nZWL Coins\n59.09\n51.54\n0.02\n0.02\n0.02\n0.01\n0.01\n0.01\n0.01\n0.01\n0.01\n0.01\n0.01\nZWL Notes\n18,138.39\n19,250.55\n7.65\n7.65\n7.64\n6.02\n5.29\n5.29\n5.29\n5.29\n5.29\n5.29\n5.29\nZiG Coins\n0.00\n0.00\n1.24\n12.16\n16.07\n20.18\n26.77\n33.55\n35.32\n35.32\n35.32\n35.32\n35.32\nZiG Notes\n0.00\n0.00\n8.85\n33.39\n36.72\n39.55\n43.39\n49.52\n113.07\n131.66\n141.25\n149.16\n155.38\nLiabilities to ODCs\n4,035,942.58\n6,122,179.56\n6,437.34\n6,586.23\n7,178.17\n7,216.36\n7,632.57\n13,518.21\n20,275.14\n19,855.72\n20,213.24\n21,498.73\n20,988.51\nReserve Deposits\n589,096.33\n782,882.89\n4,760.47\n5,381.97\n5,674.93\n6,001.81\n6,198.55\n11,991.23\n17,272.21\n16,096.48\n16,691.28\n17,918.32\n17,853.26\n Local Currency Reserve Deposits\n3,416,845.88\n5,293,831.56\n588.26\n852.99\n1,019.52\n1,293.91\n1,392.96\n1,999.40\n2,851.77\n2,965.91\n2,935.34\n2,981.54\n3,152.25\n Foreign Currency Reserve Deposits\n30,000.36\n45,465.11\n4,172.20\n4,528.98\n4,655.41\n4,707.90\n4,805.59\n9,991.83\n14,420.45\n13,130.57\n13,755.94\n14,936.79\n14,701.01\n Exess reserves \n932,843.22\n1,248,094.30\n1,676.87\n1,204.27\n1,503.24\n1,214.55\n1,434.02\n1,526.99\n3,002.92\n3,759.25\n3,521.96\n3,580.40\n3,135.25\n of which Excess reserves - ZiG\n12,006.27\n18,195.33\n113.90\n124.14\n145.19\n87.38\n143.71\n165.75\n338.54\n406.29\n398.70\n275.48\n440.42\n Excess reserves - FCA\n920,836.94\n1,229,898.97\n1,562.97\n1,080.12\n1,358.05\n1,127.17\n1,290.31\n1,361.23\n2,664.38\n3,352.96\n3,123.26\n3,304.93\n2,694.83\nPrivate Deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nSource: Reserve Bank of Zimbabwe,2025\nNB: * Other Foreign Liabilities include blocked funds amounting to USD2.2 billion assumed by the Central Bank on behalf of Government.\n **From April 2024, amounts include Unrealised Exchange Losses pertaining to IMF SDR Drawdowns which have been reclassified from Other Assets (OIN).\nTABLE 2: CENTRAL BANK SURVEY ($'Million)\n \n \n14 \n \n \n \n \nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nNet Foreign Assets\n8,434,156.47\n11,606,860.30\n6,841.96\n6,864.06\n6,861.30\n7,506.23\n6,703.99\n11,311.76\n11,863.96\n9,303.35\n9,621.51\n8,676.45\n9,929.74\nClaims on Non Residents\n12,860,635.15\n18,155,224.10\n10,973.84\n11,293.66\n11,679.33\n12,352.81\n11,598.44\n20,019.42\n21,861.67\n17,752.44\n19,141.21\n19,229.14\n20,477.93\nOf Which: Foreign Currency\n7,309,076.96\n9,785,505.64\n4,794.84\n4,337.57\n4,753.11\n5,739.94\n6,444.89\n10,895.91\n13,662.08\n11,233.74\n10,274.55\n12,729.37\n11,621.93\nDeposits\n5,518,707.07\n8,323,896.98\n6,152.46\n6,929.62\n6,902.26\n6,586.86\n5,128.04\n9,069.02\n8,153.53\n6,482.29\n8,827.76\n6,459.99\n8,811.63\nOther\n32,851.12\n45,821.48\n26.54\n26.47\n23.95\n26.02\n25.52\n54.49\n46.06\n36.41\n38.91\n39.78\n44.38\nLess Liabilities to Non Residents\n4,426,478.68\n6,548,363.80\n4,131.87\n4,429.60\n4,818.03\n4,846.58\n4,894.45\n8,707.65\n9,997.71\n8,449.09\n9,519.70\n10,552.69\n10,548.19\nOf Which: Deposits\n1,936,356.52\n2,837,026.03\n1,874.34\n1,941.68\n2,023.75\n1,715.87\n1,688.39\n2,976.71\n3,361.04\n2,691.55\n3,251.09\n3,669.92\n3,691.80\nLoans\n2,490,122.16\n3,711,337.77\n2,257.53\n2,487.92\n2,794.29\n3,130.71\n3,206.06\n5,730.94\n6,636.67\n5,757.54\n6,268.62\n6,882.77\n6,856.40\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nNet Domestic Assets (NDA)\n32,143,979.02\n47,514,528.24\n31,782.27\n33,785.42\n35,673.67\n38,145.67\n39,635.83\n63,272.48\n75,102.71\n73,469.68\n77,581.55\n78,067.90\n75,511.70\nDomestic Claims\n32,663,124.71\n49,195,099.83\n30,483.86\n31,543.96\n33,380.51\n36,954.01\n37,139.79\n62,499.40\n71,531.51\n65,031.26\n67,738.19\n68,668.90\n68,435.37\nNet Claims on Central Government\n6,067,137.11\n8,137,248.97\n5,584.18\n5,547.37\n5,745.34\n7,293.08\n6,548.20\n10,591.05\n11,703.33\n10,121.44\n10,961.41\n10,725.01\n9,938.49\nClaims on Central Government\n6,407,714.88\n8,652,815.98\n5,827.03\n5,897.34\n6,334.60\n7,731.69\n7,081.14\n11,174.32\n12,330.80\n10,798.67\n11,677.83\n11,429.02\n10,874.88\nSecurities\n6,381,641.82\n8,605,206.64\n5,583.19\n5,867.70\n6,309.90\n7,706.56\n6,955.09\n10,929.39\n12,091.79\n10,509.48\n11,621.39\n11,371.37\n10,816.74\nLoans\n26,073.06\n47,609.35\n243.84\n29.63\n24.70\n25.13\n126.05\n244.94\n239.01\n289.19\n56.44\n57.65\n58.14\nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nLess Liabilities to Central Government\n340,577.77\n515,567.01\n242.85\n349.97\n589.26\n438.61\n532.94\n583.28\n627.47\n677.24\n716.42\n704.00\n936.39\nOf which: Deposits\n340,577.77\n515,567.01\n242.85\n349.97\n589.26\n438.61\n532.94\n583.28\n627.47\n677.24\n716.42\n704.00\n936.39\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n26,595,987.60\n41,057,850.86\n24,899.68\n25,996.59\n27,635.17\n29,660.93\n30,591.59\n51,908.36\n59,828.17\n54,909.82\n56,776.78\n57,943.89\n58,496.88\nOther Financial Corporations\n390,381.07\n649,601.34\n295.55\n371.89\n452.09\n418.36\n447.83\n803.03\n864.82\n762.33\n811.21\n778.08\n779.88\nState and Local Government\n232.00\n143.35\n1.80\n1.37\n1.49\n0.16\n0.19\n0.33\n0.08\n0.10\n0.57\n10.04\n18.89\nPublic Non Financial Corporations\n905,031.12\n1,283,162.92\n769.20\n753.31\n709.07\n688.03\n609.13\n1,004.59\n1,150.11\n919.35\n889.37\n933.47\n1,043.27\nPrivate Sector\n25,300,343.41\n39,124,943.26\n23,833.13\n24,870.02\n26,472.52\n28,554.39\n29,534.44\n50,100.40\n57,813.15\n53,228.05\n55,075.63\n56,222.30\n56,654.84\nClaims on the Central Bank\n12,598,181.49\n16,737,574.91\n11,097.66\n12,455.53\n12,775.62\n11,481.33\n13,543.16\n22,444.63\n30,514.07\n32,279.22\n32,226.43\n32,420.85\n31,974.53\nCurrency\n3,143.57\n2,830.96\n7.45\n14.99\n9.22\n7.52\n6.40\n7.87\n56.71\n72.59\n82.64\n86.31\n92.84\nReserves\n12,595,037.92\n16,734,743.95\n11,090.20\n12,420.73\n12,746.02\n11,453.30\n13,516.16\n22,399.75\n30,414.71\n29,835.56\n32,109.98\n32,300.63\n31,847.52\nSecurities\n0.00\n0.00\n0.00\n19.81\n20.38\n20.50\n20.61\n37.01\n42.65\n2,371.07\n33.81\n33.91\n34.17\nOther Claims\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLiabilities to the Central Bank\n105,237.10\n95,704.99\n67.45\n50.90\n99.77\n99.87\n109.93\n491.44\n429.74\n409.27\n233.01\n368.66\n536.90\nOther Items(Net)\n13,012,090.08\n18,322,441.52\n9,731.80\n10,163.16\n10,382.69\n10,189.79\n10,937.19\n21,180.11\n26,513.13\n23,431.53\n22,150.06\n22,653.21\n24,361.30\nShares and Other Equity\n14,852,881.23\n23,399,335.89\n11,639.75\n13,617.86\n16,354.66\n17,229.14\n19,127.59\n32,025.13\n37,321.97\n32,311.33\n32,915.57\n33,759.92\n34,944.90\nLiabilities to other ressident sectors\n279,727.92\n361,061.72\n222.68\n4.56\n13.22\n12.00\n12.50\n51.08\n16.11\n42.66\n112.46\n26.63\n17.39\nOther Items(Net)\n-2,120,519.06\n-5,437,956.09\n-2,130.62\n-3,459.25\n-5,985.19\n-7,051.35\n-8,202.91\n-10,896.10\n-10,824.95\n-8,922.46\n-10,877.97\n-11,133.34\n-10,600.99\nDeposits and Securities Included in Broad Money\n40,578,135.49\n59,121,388.54\n38,624.24\n40,649.48\n42,534.96\n45,651.90\n46,339.82\n74,584.24\n86,966.67\n82,773.03\n87,203.06\n86,744.35\n85,441.44\nDeposits Included in Broad Money\n40,568,677.13\n \n59,114,397.68\n \n38,621.44\n \n40,645.11\n \n42,530.97\n \n45,632.72\n \n46,313.21\n \n74,560.41\n \n86,923.95\n \n82,773.03\n \n87,203.06\n \n86,744.35\n \n85,441.44\n \nTransferable Deposits\n37,763,111.42\n \n54,658,584.42\n \n35,915.96\n \n37,368.65\n \n38,710.52\n \n41,742.43\n \n42,434.91\n \n68,694.00\n \n79,031.45\n \n75,045.62\n \n79,013.92\n \n77,884.51\n \n76,370.33\n \n of which FCAs\n32,954,377.68\n \n47,588,241.67\n \n29,421.56\n \n29,788.82\n \n30,114.64\n \n31,415.69\n \n31,648.53\n \n58,109.73\n \n68,608.64\n \n64,281.47\n \n67,075.96\n \n66,339.66\n \n64,290.59\n \nOther Deposits (Time Deposits)\n2,805,565.71\n4,455,813.26\n2,705.48\n3,276.46\n3,820.45\n3,890.29\n3,878.31\n5,866.41\n7,892.50\n7,727.40\n8,189.14\n8,859.84\n9,071.11\n of which FCAs\n2,089,992.44\n3,750,078.07\n2,426.64\n2,953.23\n3,343.14\n3,425.73\n3,030.91\n4,839.19\n6,654.69\n5,209.30\n5,598.13\n6,742.78\n6,673.16\nMoney Market Instruments\n9,458.36\n \n6,990.86\n \n2.80\n \n4.37\n \n3.99\n \n19.18\n \n26.61\n \n23.83\n \n42.73\n \n-\n \n-\n \n-\n \n-\n \nSource:Reserve Bank of Zimbabwe,2025\n1. Figures recorded before April 2024 are in ZWL$\n2. Figures recorded from April 2024 to date are in ZWG\n TABLE 3 : OTHER DEPOSITORY \nCORPORATIONS SURVEY ( $ 'Million) \n \n \n15 \n \n \n \nForeign\nTOTAL\nEnd of\nNotes\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nOther \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\noca\nGovernemt\nOther2\nGovernment\nLocal \nPublic \n Institutional \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nGovernment\nEnterprises\nUnits\nAssets\n2022\nJan\n2,891.2\n \n53,378.3\n \n116,654.8\n \n13,232.3\n \n69,668.2\n \n30,774.3\n40,241.6\n2.4\n186.8\n2,906.7\n20.3\n163.0\n4,023.2\n228,616.6\n16,284.0\n53,627.8\n55,303.6\n85,737.0\n773,712.0\nFeb\n2,577.7\n \n62,064.5\n \n122,479.8\n \n17,480.5\n \n76,802.2\n \n28,703.5\n49,241.8\n1.6\n0.0\n3,242.5\n20.3\n158.1\n5,761.9\n249,205.9\n16,681.8\n55,099.6\n59,171.4\n86,732.0\n835,425.0\nMar\n2,111.5\n \n76,544.2\n \n142,962.5\n \n19,239.6\n \n87,884.5\n \n43,284.1\n50,566.9\n0.9\n0.0\n2,970.2\n19.4\n253.4\n6,635.8\n296,282.4\n16,435.1\n65,660.6\n69,287.0\n94,293.1\n974,431.2\nApr\n2,624.9\n \n74,716.9\n \n160,466.5\n \n28,352.1\n \n123,190.3\n \n26,628.8\n63,944.8\n0.2\n0.0\n2,583.9\n37.5\n252.4\n7,258.1\n338,207.2\n30,154.8\n53,372.3\n73,993.0\n90,352.8\n1,076,136.5\nMay\n3,155.9\n \n142,118.9\n \n236,166.0\n \n35,928.9\n \n207,812.8\n \n61,757.6\n70,936.8\n0.0\n155.0\n3,762.8\n41.3\n289.0\n16,588.0\n455,287.9\n36,125.5\n134,993.5\n111,577.7\n130,617.1\n1,647,314.7\nJun\n2,801.2\n \n138,347.1\n \n266,691.8\n \n45,952.0\n \n241,920.1\n \n63,631.8\n86,890.0\n0.0\n654.0\n5,297.4\n61.2\n226.3\n14,282.6\n549,799.2\n38,578.3\n169,511.8\n130,604.3\n205,601.3\n1,960,850.3\nJul\n2,427.6\n \n159,024.6\n \n315,832.5\n \n39,388.2\n \n230,432.5\n \n41,246.8\n91,509.2\n0.0\n394.3\n4,940.5\n100.7\n349.7\n22,911.0\n638,556.7\n45,361.4\n144,090.2\n143,606.3\n242,024.6\n2,122,196.7\nAug\n2,640.6\n \n263,637.4\n \n411,439.9\n \n69,203.5\n \n311,107.0\n \n29,186.6\n100,187.1\n0.0\n330.1\n6,912.2\n113.5\n287.1\n46,504.1\n764,466.3\n46,788.2\n167,029.4\n251,442.9\n244,934.2\n2,716,210.1\nSep\n3,030.7\n \n289,230.8\n \n504,071.1\n \n75,446.7\n \n417,007.1\n \n18,185.0\n143,464.9\n0.0\n267.4\n8,265.9\n115.1\n306.3\n41,560.9\n902,078.3\n51,664.5\n146,133.1\n231,760.0\n285,781.8\n3,118,369.8\nOct\n3,022.6\n \n300,240.3\n \n525,870.3\n \n104,483.2\n \n389,979.7\n \n22,895.3\n151,757.7\n0.0\n204.7\n4,590.6\n116.5\n342.0\n43,335.5\n936,397.1\n58,632.8\n165,306.9\n267,183.8\n298,996.3\n3,273,355.4\nNov\n3,251.4\n \n286,365.2\n \n575,885.7\n \n111,716.1\n \n342,790.1\n \n17,089.0\n198,814.4\n0.0\n142.0\n6,078.2\n119.5\n303.6\n43,195.4\n1,042,144.5\n73,069.8\n170,944.8\n232,107.1\n302,373.7\n3,406,390.5\nDec\n3,361.7\n \n295,435.1\n \n652,284.4\n \n119,932.8\n \n351,906.8\n \n7,965.4\n288,844.0\n0.0\n20,072.7\n8,831.7\n114.4\n282.6\n30,272.3\n1,143,910.8\n84,048.5\n159,126.2\n234,748.7\n418,944.7\n3,820,082.5\n2023\nJan\n4,923.3\n \n379,841.7\n \n704,168.6\n \n151,980.1\n \n389,342.8\n \n-1,443.6\n319,807.4\n0.0\n23,774.5\n8,624.7\n228.5\n251.2\n44,113.2\n1,348,919.7\n137,477.6\n227,545.4\n251,246.0\n451,149.8\n4,441,950.8\nFeb\n1,880.1\n \n436,062.8\n \n743,888.5\n \n81,067.5\n \n518,081.0\n \n21,964.4\n332,626.9\n0.0\n26,717.2\n6,974.7\n319.0\n197.4\n44,691.5\n1,538,078.6\n142,383.8\n226,933.0\n281,339.4\n490,831.3\n4,894,037.1\nMar\n2,031.6\n \n425,326.5\n \n817,631.1\n \n112,374.3\n \n531,935.4\n \n41,928.7\n360,626.2\n0.0\n24,689.0\n10,382.7\n432.2\n149.8\n48,725.4\n1,745,783.1\n166,893.5\n554,840.9\n315,882.3\n532,130.1\n5,691,762.4\nApr\n1,844.7\n \n462,081.4\n \n972,122.7\n \n161,740.7\n \n620,095.0\n \n32,207.0\n391,587.8\n0.0\n28,119.0\n19,573.0\n559.8\n99.3\n54,058.4\n1,822,350.9\n178,895.0\n214,270.9\n411,870.0\n572,012.3\n5,943,487.7\nMay\n1,107.2\n \n1,048,116.4\n \n2,049,066.1\n \n309,234.1\n \n1,554,969.0\n \n84,147.3\n653,025.9\n0.0\n76,351.5\n16,564.4\n4,599.1\n80.3\n112,188.1\n4,068,894.1\n366,505.1\n607,438.1\n788,546.8\n884,349.9\n12,625,183.4\nJun\n1,984.5\n \n2,249,201.6\n \n4,424,350.0\n \n471,360.3\n \n3,050,984.1\n \n390,369.2\n981,773.8\n0.0\n212,126.8\n8,070.8\n18,582.4\n83.0\n260,946.3\n8,977,244.2\n669,100.1\n1,390,786.2\n1,582,985.5\n2,782,639.3\n27,472,588.1\nJul\n1,489.0\n \n1,584,403.3\n \n4,137,377.2\n \n380,493.0\n \n3,132,849.9\n \n369,552.6\n1,242,045.2\n0.0\n165,764.7\n17,713.9\n7,368.1\n68.1\n208,253.7\n7,144,225.5\n821,517.0\n829,382.3\n1,411,037.1\n3,124,457.4\n24,577,997.9\nAug\n2,292.1\n \n1,505,916.2\n \n4,651,358.8\n \n448,025.8\n \n3,179,274.3\n \n245,546.0\n1,190,599.0\n0.0\n165,103.2\n7,939.8\n7,469.9\n75.8\n205,341.5\n7,142,066.9\n817,682.7\n701,626.2\n1,348,230.8\n3,086,091.3\n24,704,640.2\nSep\n2,465.6\n \n2,015,621.6\n \n5,263,338.5\n \n560,033.8\n \n3,210,332.7\n \n305,649.1\n1,318,582.7\n0.0\n175,013.5\n10,773.5\n9,935.8\n92.0\n219,878.9\n8,628,418.0\n892,737.1\n776,997.6\n1,646,406.8\n3,310,710.4\n28,346,987.7\nOct\n2,425.4\n \n2,312,575.1\n \n5,910,277.9\n \n751,077.6\n \n2,663,186.5\n \n240,258.0\n1,272,839.7\n0.0\n190,359.3\n21,408.8\n10,816.8\n98.1\n237,525.7\n9,281,352.1\n844,462.4\n958,746.4\n1,741,207.9\n3,433,150.2\n29,871,767.9\nNov\n2,705.3\n \n2,558,589.3\n \n6,324,144.1\n \n730,377.0\n \n2,788,783.6\n \n230,917.5\n1,517,348.4\n0.0\n188,949.4\n34,470.7\n10,921.4\n59.8\n238,702.3\n9,523,818.5\n907,759.0\n1,046,257.0\n2,150,227.0\n3,544,388.6\n31,798,418.9\nDec\n3,398.4\n \n2,868,505.6\n \n5,973,706.9\n \n918,524.5\n \n2,631,445.7\n \n212,294.5\n2,627,512.6\n0.0\n182,480.9\n38,249.3\n12,325.3\n73.5\n248,699.8\n10,110,961.4\n984,502.1\n1,184,706.9\n2,319,603.9\n4,087,896.6\n34,404,887.7\n2024\nJan\n2,947.9\n \n5,196,670.6\n \n9,096,074.6\n \n1,414,527.9\n \n3,957,664.6\n \n326,220.5\n4,283,761.8\n0.0\n306,771.2\n57,595.6\n17,912.4\n198.8\n374,088.3\n16,298,021.8\n1,109,251.7\n1,949,662.4\n3,467,246.2\n5,133,753.8\n52,992,370.2\nFeb\n3,143.6\n \n7,309,077.0\n \n12,595,037.9\n \n2,395,225.7\n \n5,340,576.7\n \n178,130.4\n6,381,641.8\n0.0\n437,989.9\n78,292.7\n26,073.1\n232.0\n488,602.8\n24,095,690.3\n1,538,423.6\n2,608,075.1\n4,122,833.9\n6,863,317.4\n74,462,363.7\nMar\n2,831.0\n \n9,785,505.6\n \n16,734,744.0\n \n3,185,636.7\n \n7,548,560.1\n \n775,336.9\n8,605,206.6\n0.0\n585,769.6\n126,026.3\n47,609.3\n143.3\n729,484.9\n37,149,745.6\n2,535,252.5\n2,860,196.6\n5,844,376.9\n10,808,889.0 107,325,315.0\nApr\n7.5\n \n4,794.8\n \n11,004.0\n \n2,108.7\n \n5,798.1\n \n354.3\n5,583.2\n0.0\n348.4\n37.2\n330.0\n1.8\n440.5\n22,799.4\n1,336.2\n2,510.2\n6,102.7\n5,490.3\n69,047.3\nMay\n15.0\n \n4,337.6\n \n12,420.7\n \n2,281.4\n \n6,437.2\n \n492.4\n5,867.7\n0.0\n339.6\n23.7\n49.4\n1.4\n433.4\n23,728.2\n1,520.6\n2,114.7\n7,240.8\n5,731.5\n73,035.2\nJun\n9.2\n \n4,753.1\n \n12,746.0\n \n2,349.5\n \n6,493.3\n \n409.0\n6,309.9\n0.0\n282.9\n32.6\n45.1\n1.5\n446.4\n25,292.4\n1,628.6\n2,541.3\n7,612.6\n6,871.1\n77,824.6\nJul\n7.5\n \n5,739.9\n \n11,453.3\n \n1,987.0\n \n6,135.6\n \n451.2\n7,706.6\n0.0\n276.2\n128.4\n45.6\n0.2\n432.4\n26,513.1\n2,454.9\n2,342.9\n8,065.1\n7,708.4\n81,448.2\nAug\n6.4\n \n6,444.9\n \n13,516.2\n \n2,310.5\n \n4,922.1\n \n205.9\n6,955.1\n0.0\n246.2\n100.5\n146.7\n0.2\n388.0\n27,463.6\n2,511.4\n2,767.9\n9,021.7\n8,363.7\n85,371.0\nSep\n7.9\n \n10,895.9\n \n22,399.7\n \n3,870.6\n \n8,728.6\n \n340.5\n10,929.4\n0.0\n431.0\n34.5\n281.9\n0.3\n610.8\n46,961.9\n3,924.3\n4,853.4\n13,635.1\n12,318.0\n140,223.9\nOct\n56.7\n \n13,662.1\n \n30,414.7\n \n5,068.5\n \n8,024.4\n \n129.1\n12,091.8\n0.0\n502.2\n53.5\n281.7\n0.1\n689.5\n54,229.9\n4,447.2\n6,380.1\n13,935.9\n13,802.2\n163,769.6\nNov\n72.6\n \n11,233.7\n \n29,835.6\n \n4,498.6\n \n6,365.0\n \n117.3\n10,509.5\n0.0\n367.6\n185.0\n2,660.3\n0.1\n582.5\n49,728.9\n4,261.8\n6,685.9\n14,193.4\n13,503.2\n154,800.9\nDec\n82.6\n \n10,274.6\n \n32,110.0\n \n5,538.7\n \n8,540.2\n \n287.6\n11,621.4\n0.0\n361.0\n79.0\n90.3\n0.6\n559.5\n51,561.9\n4,324.4\n6,555.3\n16,212.6\n14,183.7\n162,383.2\n2025\nJan\n86.3\n \n12,729.4\n \n32,300.6\n \n5,224.8\n \n6,088.6\n \n371.4\n11,371.4\n0.0\n352.9\n56.4\n91.6\n10.0\n612.5\n53,737.7\n3,262.0\n6,541.2\n14,514.4\n15,912.7\n163,264.0\nFeb\n92.8\n \n11,621.9\n \n31,847.5\n \n4,434.0\n \n8,274.5\n \n537.1\n10,816.7\n0.0\n292.4\n67.3\n92.3\n18.9\n782.9\n53,441.0\n3,997.8\n6,813.5\n12,600.8\n15,813.2\n161,544.6\nSource:Reserve Bank of Zimbabwe, 2025\nNotes\n1.Government securities includes treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations.\n4.Figures recorded before April 2024 are in ZWL$\n5.Figures recorded from April 2024 to date are in ZWG\nPublic \nEnterprises\nTABLE 4.1: OTHER DEPOSITORY CORPORATIONS -ASSETS\nMillions\nDebt Securities\nLoans and Advances\n \n \n16 \n \n \n \nDebt Securities Foreign Liabilities\nCapital\nContigent\nOther\nTOTAL\nand\nLiablities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2022\nJan\n392,702.2\n32,298.0\n39,346.3\n464,346.5\n2,962.5\n4,027.0\n471,336.0\n3,685.3\n25,398.5\n2,688.6\n1,416.9\n230.5\n144,852.4\n53,627.8\n70,476.0\n773,712.0\nFeb\n413,978.3\n37,494.3\n47,592.5\n499,065.1\n3,229.3\n4,407.7\n506,702.1\n4,456.2\n30,483.6\n2,120.4\n1,769.7\n226.8\n153,788.5\n55,099.6\n80,778.2\n835,425.0\nMar\n488,137.1\n37,893.9\n54,213.9\n580,244.9\n3,062.2\n5,330.5\n588,637.7\n4,510.9\n33,995.7\n2,137.9\n3,281.0\n810.6\n175,156.3\n65,660.6\n100,240.6\n974,431.2\nApr\n562,613.7\n46,129.7\n52,760.1\n661,503.5\n6,377.5\n7,656.8\n675,537.9\n4,246.9\n38,472.7\n2,173.0\n3,877.2\n486.8\n178,614.3\n53,372.3\n119,355.4\n1,076,136.5\nMay\n830,166.0\n61,112.6\n70,113.9\n961,392.5\n7,310.9\n7,417.6\n976,120.9\n6,165.3\n73,411.8\n2,383.3\n3,241.0\n321.8\n243,544.4\n134,993.5\n207,132.5\n1,647,314.7\nJun\n961,316.9\n66,716.9\n81,118.5\n1,109,152.4\n5,627.3\n10,226.2\n1,125,005.9\n7,157.9\n83,048.1\n2,898.5\n4,589.8\n345.2\n355,060.9\n169,511.8\n213,232.2\n1,960,850.3\nJul\n1,016,820.2\n79,550.5\n94,495.2\n1,190,865.8\n1,789.6\n9,363.5\n1,202,018.9\n8,137.9\n100,313.8\n2,814.9\n5,020.5\n1,339.1\n419,883.3\n144,090.2\n238,578.1\n2,122,196.7\nAug\n1,367,431.3\n85,931.5\n134,512.9\n1,587,875.7\n2,415.4\n7,892.4\n1,598,183.5\n12,785.6\n119,851.6\n3,230.7\n5,771.2\n555.2\n491,336.5\n167,029.4\n317,466.4\n2,716,210.1\nSep\n1,648,027.7\n92,678.5\n157,504.6\n1,898,210.8\n1,482.9\n8,707.2\n1,908,401.0\n14,047.5\n143,842.3\n3,720.2\n9,246.7\n587.2\n553,942.2\n146,133.1\n338,449.6\n3,118,369.8\nOct\n1,615,381.5\n76,774.2\n166,880.7\n1,859,036.4\n2,028.0\n6,673.7\n1,867,738.0\n15,558.9\n153,649.9\n28,072.2\n8,610.3\n762.5\n581,740.3\n165,306.9\n451,916.4\n3,273,355.4\nNov\n1,771,644.8\n81,518.1\n189,465.9\n2,042,628.9\n1,547.6\n6,731.4\n2,050,907.9\n13,438.5\n139,370.8\n19,973.5\n10,489.1\n339.6\n612,977.2\n170,944.8\n387,949.1\n3,406,390.5\nDec\n1,990,867.6\n90,317.0\n234,004.4\n2,315,189.0\n2,754.1\n7,866.7\n2,325,809.8\n14,149.0\n177,214.1\n10,597.8\n15,234.4\n752.5\n750,161.5\n159,126.2\n367,037.4\n3,820,082.5\n2023\nJan\n2,270,946.6\n100,094.1\n275,805.1\n2,646,845.8\n1,676.5\n41,821.3\n2,690,343.7\n15,056.5\n196,129.5\n4,974.3\n12,291.7\n675.5\n881,874.7\n227,545.4\n413,059.5\n4,441,950.8\nFeb\n2,496,192.1\n98,177.2\n294,332.5\n2,888,701.8\n1,956.9\n11,040.2\n2,901,698.9\n15,711.7\n225,209.4\n8,092.9\n20,822.5\n3,109.0\n951,831.6\n226,933.0\n540,628.1\n4,894,037.1\nMar\n2,710,394.6\n121,937.7\n333,589.3\n3,165,921.6\n1,430.8\n6,188.7\n3,173,541.1\n16,082.6\n256,206.0\n9,639.9\n22,996.8\n3,714.6\n1,036,325.4\n554,840.9\n618,415.2\n5,691,762.4\nApr\n3,144,048.4\n159,872.5\n269,932.0\n3,573,852.9\n573.4\n9,702.2\n3,584,128.5\n1,843.4\n318,092.2\n13,321.9\n29,787.9\n6,418.8\n1,137,637.3\n214,270.9\n637,986.8\n5,943,487.7\nMay\n6,481,742.5\n169,496.7\n556,927.2\n7,208,166.4\n1,068.6\n50,511.7\n7,259,746.7\n4,659.4\n783,531.0\n78,332.6\n74,083.0\n30,583.3\n2,224,856.6\n607,438.1\n1,561,952.6\n12,625,183.4\nJun\n12,937,869.2\n240,252.2\n1,073,317.8\n14,251,439.2\n4,578.8\n432,610.2\n14,688,628.1\n4,243.6\n1,833,341.2\n39,166.6\n112,338.9\n64,321.9\n6,245,056.0\n1,390,786.2\n3,094,705.7\n27,472,588.1\nJul\n11,864,787.9\n285,723.5\n828,095.7\n12,978,607.1\n30,380.7\n380,435.8\n13,389,423.7\n2,137.4\n1,458,906.6\n87,827.2\n160,696.4\n58,256.2\n5,865,068.7\n829,382.3\n2,726,299.5\n24,577,997.9\nAug\n12,168,928.8\n353,674.2\n862,852.8\n13,385,455.8\n23,457.8\n381,525.5\n13,790,439.1\n3,182.7\n1,483,108.2\n84,841.4\n154,160.3\n56,751.6\n5,646,934.2\n701,626.2\n2,783,596.5\n24,704,640.2\nSep\n14,342,241.3\n404,040.4\n947,184.1\n15,693,465.8\n11,309.1\n114,502.6\n15,819,277.6\n2,685.5\n1,688,992.2\n82,493.4\n168,880.8\n90,032.4\n6,410,594.6\n776,997.6\n3,307,033.6\n28,346,987.7\nOct\n15,103,817.1\n439,336.7\n1,190,702.7\n16,733,856.4\n8,575.8\n147,053.3\n16,889,485.5\n3,497.2\n1,573,857.1\n84,628.9\n176,455.5\n83,441.8\n6,756,087.7\n958,746.4\n3,345,567.7\n29,871,767.9\nNov\n15,816,643.6\n534,621.6\n1,241,055.7\n17,592,320.9\n92,509.4\n133,475.4\n17,818,305.6\n4,173.2\n1,784,153.1\n92,939.9\n244,115.1\n89,997.7\n7,059,070.8\n1,046,257.0\n3,659,406.4\n31,798,418.9\nDec\n16,937,697.1\n613,283.2\n1,290,630.5\n18,841,610.7\n94,004.9\n201,484.9\n19,137,100.5\n42,811.4\n1,831,385.7\n55,157.4\n162,437.9\n138,722.6\n7,736,287.7\n1,184,706.9\n4,116,277.7\n34,404,887.7\n2024\nJan\n26,686,959.6\n746,212.0\n1,754,255.7\n29,187,427.3\n113,265.9\n169,629.6\n29,470,322.8\n7,317.9\n3,007,687.4\n114,298.0\n290,202.8\n182,727.0\n11,623,761.9 1,949,662.4\n6,346,389.9\n52,992,370.2\nFeb\n36,944,811.1\n818,341.2\n2,810,669.8\n40,573,822.1\n177,789.1\n340,577.8\n41,092,189.0\n9,458.4\n4,421,333.7\n105,237.1\n454,842.1\n279,727.9\n16,146,119.3 2,608,075.1\n9,345,381.2\n74,462,363.7\nMar\n53,801,105.7\n857,520.8\n4,468,346.0\n59,126,972.5\n275,444.0\n515,567.0\n59,917,983.5\n6,990.9\n6,535,789.0\n95,705.0\n506,746.6\n361,061.7\n24,968,710.0 2,860,196.6\n12,072,131.8\n107,325,315.0\nApr\n35,042.5\n873.5\n2,711.3\n38,627.3\n161.4\n242.9\n39,031.6\n2.8\n4,126.0\n67.4\n358.1\n222.7\n12,859.8\n2,510.2\n9,868.8\n69,047.3\nMay\n36,571.3\n797.4\n3,283.3\n40,652.0\n82.8\n350.0\n41,084.8\n4.4\n4,422.7\n50.9\n436.0\n4.6\n15,110.7\n2,114.7\n9,806.4\n73,035.2\nJun\n37,665.2\n1,045.3\n3,824.5\n42,535.1\n2.1\n589.3\n43,126.4\n4.0\n4,813.9\n99.8\n450.6\n13.2\n17,940.3\n2,541.3\n8,835.0\n77,824.6\nJul\n40,332.2\n1,410.3\n3,894.3\n45,636.8\n68.7\n438.6\n46,144.1\n19.2\n4,842.5\n99.9\n483.0\n12.0\n18,795.9\n2,342.9\n8,708.8\n81,448.2\nAug\n40,849.7\n1,585.3\n3,882.8\n46,317.8\n65.6\n532.9\n46,916.3\n26.6\n4,889.9\n109.9\n602.1\n12.5\n20,035.9\n2,767.9\n10,009.9\n85,371.0\nSep\n66,835.5\n1,858.6\n5,872.5\n74,566.6\n99.2\n583.3\n75,249.0\n23.8\n8,701.5\n491.4\n860.8\n51.1\n34,201.4\n4,853.4\n15,791.4\n140,223.9\nOct\n76,868.7\n2,162.8\n7,903.0\n86,934.5\n257.1\n627.5\n87,819.1\n42.7\n9,987.1\n429.7\n1,310.2\n16.1\n39,650.6\n6,380.1\n18,134.0\n163,769.6\nNov\n72,575.6\n2,470.1\n7,734.9\n82,780.6\n202.6\n677.2\n83,660.4\n0.0\n8,441.5\n409.3\n568.8\n42.7\n38,968.8\n6,685.9\n16,023.6\n154,800.9\nDec\n76,723.8\n2,290.2\n8,197.9\n87,211.9\n205.6\n716.4\n88,133.9\n0.0\n9,510.9\n233.0\n856.2\n112.5\n39,782.4\n6,555.3\n17,199.0\n162,383.2\n2025\nJan\n75,644.1\n2,240.4\n8,868.0\n86,752.5\n212.0\n704.0\n87,668.5\n0.0\n10,544.5\n368.7\n848.5\n26.6\n38,868.3\n6,541.2\n18,397.6\n163,264.0\nFeb\n73,858.1\n2,512.3\n9,076.6\n85,447.0\n510.9\n936.4\n86,894.2\n0.0\n10,542.7\n536.9\n932.0\n17.4\n39,671.7\n6,813.5\n16,136.3\n161,544.6\nSource:Reserve Bank of Zimbabwe, 2025\n1.Figures recorded before April 2024 are in ZWL$\n2.Figures recorded from April 2024 to date are in ZWG\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\n(Millions)\n \n \n17 \n \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nOther \nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment\n1\nLocal Governemt\nPublic Enterprises\nOther\n2\nGovernment\nGovernment\nEnterprises\n Institutional Units\n3\nOther claims\nAssets\nOther Assets\nAssets\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2022\nJan\n2,359.27\n \n49,206.02\n \n108,119.97\n \n10,419.90\n \n66,808.45\n \n30,774.31\n \n38,636.84\n \n-\n \n186.80\n \n801.50\n \n20.33\n \n163.02\n \n3,628.73\n \n199,495.34\n \n2,997.94\n \n53,627.76\n \n47,405.91\n \n69,989.80\n \n684,641.9\n \nFeb\n1,971.78\n \n57,553.54\n \n112,522.99\n \n14,300.66\n \n70,750.63\n \n28,703.53\n \n44,705.21\n \n-\n \n-\n \n976.55\n \n20.34\n \n158.06\n \n5,367.16\n \n215,520.37\n \n3,055.50\n \n55,099.61\n \n53,459.12\n \n70,832.47\n \n734,997.5\n \nMar\n1,541.49\n \n70,856.33\n \n130,423.48\n \n15,503.46\n \n82,662.70\n \n43,284.13\n \n44,874.23\n \n-\n \n-\n \n1,380.20\n \n19.40\n \n253.42\n \n6,240.94\n \n258,715.05\n \n3,092.69\n \n65,660.61\n \n58,874.69\n \n76,938.87\n \n860,321.7\n \nApr\n1,939.64\n \n70,204.43\n \n144,168.02\n \n23,452.88\n \n117,033.42\n \n26,628.79\n \n57,772.47\n \n-\n \n-\n \n722.54\n \n37.54\n \n252.44\n \n6,858.06\n \n305,476.79\n \n4,348.46\n \n53,372.28\n \n62,788.55\n \n71,414.75\n \n946,471.1\n \nMay\n2,397.94\n \n131,996.38\n \n211,837.59\n \n31,586.61\n \n190,366.81\n \n61,757.62\n \n64,373.91\n \n-\n \n154.99\n \n1,559.14\n \n41.28\n \n289.00\n \n16,193.81\n \n398,048.90\n \n4,712.74\n \n134,993.54\n \n94,851.60\n \n111,543.84\n \n1,456,705.7\n \nJun\n2,263.18\n \n127,839.16\n \n234,109.43\n \n40,937.28\n \n219,607.39\n \n63,631.76\n \n83,690.44\n \n-\n \n653.97\n \n2,159.12\n \n61.20\n \n226.29\n \n13,888.60\n \n478,163.38\n \n8,954.46\n \n169,511.81\n \n110,528.09\n \n168,440.54\n \n1,724,666.1\n \nJul\n1,578.47\n \n147,217.74\n \n284,912.89\n \n34,334.13\n \n202,815.28\n \n41,246.78\n \n86,971.63\n \n-\n \n394.34\n \n1,852.14\n \n100.65\n \n349.68\n \n22,516.21\n \n556,692.12\n \n9,737.92\n \n144,090.18\n \n129,869.55\n \n192,524.32\n \n1,857,204.0\n \nAug\n1,630.70\n \n247,190.46\n \n377,078.80\n \n64,650.96\n \n273,181.97\n \n29,186.59\n \n95,346.12\n \n-\n \n330.12\n \n3,556.96\n \n113.50\n \n287.14\n \n26,564.57\n \n681,253.30\n \n11,493.92\n \n167,029.36\n \n238,442.98\n \n194,745.11\n \n2,412,082.6\n \nSep\n1,791.71\n \n270,594.59\n \n465,301.31\n \n68,020.95\n \n370,323.69\n \n18,184.96\n \n134,414.53\n \n-\n \n267.40\n \n4,916.56\n \n115.11\n \n306.33\n \n21,773.50\n \n806,774.24\n \n12,680.89\n \n146,133.14\n \n215,417.68\n \n219,933.24\n \n2,756,949.8\n \nOct\n1,704.79\n \n281,204.64\n \n480,106.49\n \n94,573.08\n \n343,440.15\n \n22,895.35\n \n136,939.74\n \n-\n \n204.69\n \n2,201.55\n \n116.48\n \n341.96\n \n22,935.50\n \n852,069.39\n \n15,525.65\n \n165,306.91\n \n232,188.99\n \n245,924.22\n \n2,897,679.6\n \nNov\n1,644.95\n \n259,109.18\n \n533,438.97\n \n101,870.32\n \n299,715.01\n \n17,089.04\n \n180,534.44\n \n-\n \n141.97\n \n2,292.28\n \n119.53\n \n303.55\n \n22,178.73\n \n960,814.77\n \n15,450.39\n \n170,944.78\n \n196,338.19\n \n250,551.19\n \n3,012,537.3\n \nDec\n1,778.71\n \n263,863.65\n \n603,136.26\n \n110,935.77\n \n299,087.30\n \n7,965.37\n \n266,725.41\n \n-\n \n79.26\n \n3,887.78\n \n114.42\n \n282.61\n \n30,272.25\n \n1,066,654.12\n \n16,130.63\n \n159,126.16\n \n189,560.01\n \n344,235.10\n \n3,363,834.8\n \n2023\nJan\n2,391.61\n \n340,953.56\n \n654,740.29\n \n143,455.70\n \n335,380.17\n \n(1,443.59)\n \n301,026.07\n \n-\n \n105.97\n \n4,873.87\n \n228.45\n \n251.24\n \n44,113.17\n \n1,307,512.98\n \n17,767.70\n \n227,545.42\n \n204,830.78\n \n374,080.77\n \n3,957,814.2\n \nFeb\n1,470.56\n \n366,544.71\n \n691,937.49\n \n71,097.36\n \n452,795.43\n \n21,074.53\n \n306,913.92\n \n-\n \n50.02\n \n1,524.98\n \n318.96\n \n197.44\n \n44,691.50\n \n1,481,851.05\n \n18,037.18\n \n226,932.96\n \n224,983.29\n \n411,002.80\n \n4,321,424.2\n \nMar\n1,771.98\n \n344,570.46\n \n755,463.34\n \n103,284.07\n \n478,333.21\n \n41,928.66\n \n330,669.68\n \n-\n \n-\n \n3,884.11\n \n432.22\n \n149.78\n \n48,725.38\n \n1,679,284.89\n \n28,439.56\n \n554,840.85\n \n254,605.57\n \n438,790.17\n \n5,065,173.9\n \nApr\n1,631.24\n \n388,822.83\n \n903,029.49\n \n144,252.31\n \n555,886.92\n \n32,206.95\n \n361,846.09\n \n-\n \n-\n \n8,716.45\n \n559.82\n \n99.28\n \n54,058.39\n \n1,722,384.40\n \n28,899.91\n \n214,270.92\n \n321,765.39\n \n476,263.19\n \n5,214,693.6\n \nMay\n1,010.26\n \n907,818.70\n \n1,932,225.57\n \n281,052.93\n \n1,351,116.97\n \n84,147.32\n \n570,367.60\n \n-\n \n-\n \n8,974.78\n \n4,599.15\n \n80.34\n \n112,188.06\n \n3,844,133.80\n \n65,696.39\n \n607,438.10\n \n669,908.72\n \n758,154.17\n \n11,198,912.9\n \nJun\n1,762.11\n \n1,979,000.71\n \n4,218,755.04\n \n444,538.09\n \n2,584,596.63\n \n350,042.51\n \n865,465.55\n \n-\n \n-\n \n221.09\n \n10,133.46\n \n8,052.34\n \n260,946.26\n \n8,487,837.63\n \n92,224.26\n \n1,390,786.24\n \n1,304,228.92\n \n2,222,499.38\n \n24,221,090.2\n \nJul\n1,305.13\n \n1,428,604.02\n \n3,898,282.53\n \n359,151.15\n \n2,646,743.26\n \n337,541.82\n \n1,133,463.14\n \n-\n \n-\n \n153.30\n \n7,368.09\n \n68.07\n \n208,253.70\n \n6,917,007.30\n \n129,308.58\n \n829,382.28\n \n1,155,945.57\n \n2,438,538.20\n \n21,491,116.1\n \nAug\n1,664.09\n \n1,370,651.81\n \n4,309,693.74\n \n391,792.23\n \n2,693,989.06\n \n208,098.88\n \n1,084,784.90\n \n-\n \n-\n \n138.30\n \n7,469.95\n \n75.80\n \n205,341.47\n \n6,863,348.14\n \n127,816.16\n \n701,626.16\n \n1,081,800.09\n \n2,446,465.02\n \n21,494,755.8\n \nSep\n1,503.56\n \n1,763,364.33\n \n4,914,305.55\n \n517,813.92\n \n2,760,807.78\n \n247,094.60\n \n1,204,684.14\n \n-\n \n-\n \n9.75\n \n9,935.82\n \n92.05\n \n219,878.94\n \n8,245,053.80\n \n151,685.43\n \n776,997.57\n \n1,312,147.78\n \n2,668,520.81\n \n24,793,895.8\n \nOct\n1,977.18\n \n2,059,471.85\n \n5,625,069.70\n \n562,790.91\n \n2,202,475.21\n \n175,235.94\n \n1,172,130.22\n \n-\n \n-\n \n0.03\n \n10,816.83\n \n98.06\n \n237,525.73\n \n8,864,363.09\n \n153,534.70\n \n958,746.42\n \n1,351,846.54\n \n2,767,099.33\n \n26,143,181.7\n \nNov\n2,295.18\n \n2,278,921.91\n \n5,913,094.15\n \n568,556.41\n \n2,451,981.00\n \n180,229.25\n \n1,337,040.40\n \n-\n \n-\n \n0.03\n \n10,921.42\n \n59.77\n \n238,702.30\n \n9,040,518.08\n \n158,702.11\n \n1,046,256.98\n \n1,702,370.26\n \n2,868,031.98\n \n27,797,681.2\n \nDec\n2,947.49\n \n2,536,437.97\n \n5,489,443.24\n \n657,432.63\n \n2,268,702.96\n \n155,742.88\n \n2,420,663.39\n \n-\n \n-\n \n0.03\n \n12,324.59\n \n73.45\n \n248,699.79\n \n9,507,281.46\n \n255,007.08\n \n1,184,706.91\n \n1,748,495.98\n \n3,349,062.31\n \n29,837,022.2\n \n2024\nJan\n2,536.36\n \n4,749,173.95\n \n8,535,153.83\n \n940,210.80\n \n3,564,879.01\n \n285,807.60\n \n3,972,600.87\n \n-\n \n-\n \n0.03\n \n17,912.41\n \n198.80\n \n374,088.29\n \n14,957,169.30\n \n312,516.30\n \n1,949,662.45\n \n2,737,500.88\n \n4,289,981.53\n \n46,689,392.4\n \nFeb\n2,519.25\n \n6,564,463.71\n \n11,709,703.62\n \n1,772,649.65\n \n4,708,270.62\n \n153,450.01\n \n5,911,393.45\n \n-\n \n-\n \n0.03\n \n26,073.06\n \n232.00\n \n488,602.76\n \n22,234,523.09\n \n378,975.16\n \n2,608,075.14\n \n3,125,793.33\n \n5,812,047.28\n \n65,496,772.2\n \nMar\n2,435.72\n \n8,601,285.46\n \n15,501,059.95\n \n2,213,233.27\n \n6,701,169.42\n \n775,336.87\n \n8,098,495.31\n \n-\n \n-\n \n0.03\n \n47,609.35\n \n143.35\n \n729,484.92\n \n34,077,197.02\n \n597,886.20\n \n2,860,196.61\n \n4,317,386.46\n \n8,974,860.63\n \n93,497,780.6\n \nApr\n5.89\n \n4,141.51\n \n9,980.68\n \n1,414.28\n \n5,461.70\n \n287.09\n \n5,206.08\n \n-\n \n-\n \n0.00\n \n31.18\n \n88.00\n \n440.49\n \n20,170.86\n \n246.21\n \n2,510.15\n \n5,472.97\n \n4,360.99\n \n59,818.1\n \nMay\n10.60\n \n3,583.02\n \n11,575.45\n \n1,506.01\n \n6,092.37\n \n382.87\n \n5,420.56\n \n-\n \n-\n \n0.00\n \n29.63\n \n1.37\n \n433.36\n \n21,315.87\n \n348.50\n \n2,114.73\n \n6,339.55\n \n4,613.87\n \n63,767.8\n \nJun\n8.01\n \n4,111.49\n \n11,498.97\n \n1,627.32\n \n5,775.34\n \n298.05\n \n6,080.69\n \n-\n \n-\n \n7.23\n \n24.70\n \n1.49\n \n446.45\n \n22,801.09\n \n345.72\n \n2,541.32\n \n6,558.03\n \n5,419.46\n \n67,545.3\n \nJul\n5.05\n \n4,943.82\n \n10,426.18\n \n1,342.47\n \n5,743.94\n \n351.44\n \n6,988.99\n \n-\n \n0.00\n \n5.21\n \n25.13\n \n0.16\n \n432.35\n \n24,895.03\n \n348.09\n \n2,342.85\n \n6,539.59\n \n6,244.23\n \n70,634.5\n \nAug\n5.26\n \n5,703.86\n \n12,540.81\n \n1,453.04\n \n4,411.38\n \n205.93\n \n6,149.38\n \n-\n \n-\n \n2.43\n \n126.05\n \n0.19\n \n378.05\n \n25,591.15\n \n542.15\n \n2,767.89\n \n7,004.36\n \n6,832.60\n \n73,714.5\n \nSep\n6.82\n \n9,465.31\n \n20,161.22\n \n2,742.22\n \n7,903.81\n \n340.45\n \n10,295.58\n \n-\n \n-\n \n0.00\n \n244.94\n \n0.33\n \n600.93\n \n43,094.11\n \n979.13\n \n4,853.44\n \n11,326.85\n \n9,785.35\n \n121,800.5\n \nOct\n39.65\n \n12,315.40\n \n27,597.64\n \n3,670.13\n \n7,120.62\n \n129.14\n \n11,256.45\n \n-\n \n-\n \n0.00\n \n239.01\n \n0.08\n \n679.62\n \n49,545.16\n \n1,042.81\n \n6,380.10\n \n11,454.83\n \n11,116.57\n \n142,587.2\n \nNov\n58.26\n \n10,111.62\n \n27,498.54\n \n3,102.17\n \n5,626.08\n \n117.33\n \n9,757.48\n \n-\n \n0.00\n \n0.00\n \n287.55\n \n2,326.36\n \n572.57\n \n45,782.99\n \n1,064.73\n \n6,685.94\n \n11,362.33\n \n10,783.91\n \n135,137.8\n \nDec\n64.89\n \n8,774.50\n \n29,312.78\n \n3,217.87\n \n7,673.17\n \n287.57\n \n10,942.77\n \n-\n \n0.00\n \n8.29\n \n54.88\n \n0.57\n \n549.66\n \n46,926.14\n \n1,073.63\n \n6,555.30\n \n13,399.70\n \n11,326.46\n \n140,168.2\n \n2025\nJan\n69.16\n \n11,456.41\n \n29,733.87\n \n3,619.46\n \n5,360.40\n \n371.37\n \n10,307.60\n \n-\n \n0.00\n \n8.47\n \n56.00\n \n10.04\n \n602.54\n \n47,707.68\n \n1,083.88\n \n6,541.21\n \n10,321.33\n \n12,929.18\n \n140,178.6\n \nFeb\n74.54\n \n10,379.65\n \n28,980.85\n \n2,887.47\n \n7,444.59\n \n537.09\n \n9,957.34\n \n-\n \n-\n \n8.33\n \n56.51\n \n18.89\n \n773.23\n \n47,741.48\n \n1,091.66\n \n6,813.47\n \n9,654.17\n \n12,804.87\n \n139,224.1\n \nSource:Reserve Bank of Zimbabwe, 2025\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations, \nTABLE 5.1: COMMERCIAL BANKS -ASSETS\nMillions\nDebt Securities\nLoans and Advances\n \n \n18 \n \n \n \nMillions\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nDebt Securities\nForeign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2022\nJan\n346,619.5\n43,438.8\n31,158.1\n421,216.4\n2,962.5\n3,864.8\n428,043.7\n2,995.6\n14,406.9\n2,688.6\n1,043.2\n230.5\n122,752.1\n53,627.8\n58,853.6\n684,641.9\nFeb\n358,979.4\n51,510.7\n38,313.7\n448,803.8\n3,229.3\n4,248.7\n456,281.8\n3,834.1\n16,267.7\n2,120.4\n1,338.1\n226.8\n130,981.3\n55,099.6\n68,847.8\n734,997.5\nMar\n422,934.6\n58,283.5\n42,258.5\n523,476.6\n3,062.2\n5,171.3\n531,710.2\n3,850.2\n18,374.8\n2,137.9\n2,779.1\n810.6\n149,781.8\n65,660.6\n85,216.5\n860,321.7\nApr\n479,558.7\n74,880.3\n40,491.0\n594,930.0\n6,377.5\n7,486.7\n608,794.2\n3,792.3\n21,445.6\n2,173.0\n3,173.0\n486.8\n149,610.1\n53,372.3\n103,623.7\n946,471.1\nMay\n666,937.8\n137,419.9\n55,389.8\n859,747.5\n7,310.9\n7,249.8\n874,308.3\n5,769.3\n39,105.1\n2,383.3\n2,207.5\n321.8\n214,978.6\n134,993.5\n182,638.3\n1,456,705.7\nJun\n773,692.7\n154,956.9\n63,511.7\n992,161.3\n4,597.1\n10,018.0\n1,006,776.4\n6,743.2\n42,701.8\n2,898.5\n3,389.3\n345.2\n307,341.8\n169,511.8\n184,958.1\n1,724,666.1\nJul\n810,906.6\n173,134.0\n74,324.5\n1,058,365.1\n717.0\n9,153.8\n1,068,235.9\n7,994.5\n54,168.7\n2,814.9\n2,948.9\n1,339.1\n355,597.9\n144,090.2\n220,013.9\n1,857,204.0\nAug\n1,100,922.1\n219,798.6\n110,595.1\n1,431,315.7\n790.2\n7,675.2\n1,439,781.1\n12,484.6\n64,160.3\n3,230.7\n2,791.8\n555.2\n421,880.4\n167,029.4\n300,169.0\n2,412,082.6\nSep\n1,328,584.6\n256,980.2\n127,051.1\n1,712,616.0\n1,482.9\n8,473.0\n1,722,571.9\n13,789.2\n81,182.4\n3,720.2\n5,632.9\n587.2\n465,063.9\n146,133.1\n318,269.0\n2,756,949.8\nOct\n1,365,908.5\n205,688.8\n128,186.9\n1,699,784.2\n813.8\n6,314.3\n1,706,912.3\n14,933.2\n83,998.0\n28,072.2\n4,282.4\n762.5\n486,396.6\n165,306.9\n407,015.5\n2,897,679.6\nNov\n1,481,503.5\n243,239.9\n146,530.0\n1,871,273.4\n291.3\n6,366.6\n1,877,931.3\n12,665.1\n67,318.9\n19,973.5\n5,349.1\n339.6\n514,200.0\n170,944.8\n343,815.1\n3,012,537.3\nDec\n1,697,008.7\n235,271.2\n181,090.6\n2,113,370.5\n1,514.4\n7,399.5\n2,122,284.4\n13,296.8\n106,071.5\n10,597.8\n9,610.4\n752.5\n621,113.3\n159,126.2\n320,981.8\n3,363,834.8\n2023\nJan\n2,139,458.0\n78,197.7\n215,537.0\n2,433,192.7\n214.3\n41,333.8\n2,474,740.8\n12,923.7\n123,605.0\n4,974.3\n5,669.1\n675.5\n723,452.2\n227,545.4\n384,228.1\n3,957,814.2\nFeb\n1,997,073.4\n398,595.8\n230,549.9\n2,626,219.1\n303.5\n10,655.7\n2,637,178.4\n14,443.3\n140,484.9\n8,092.9\n13,273.6\n3,109.0\n780,290.7\n226,933.0\n497,618.5\n4,321,424.2\nMar\n2,218,678.7\n384,245.5\n262,119.8\n2,865,044.1\n1,272.8\n5,953.0\n2,872,269.9\n15,181.9\n166,322.5\n9,639.9\n15,494.1\n3,714.6\n846,479.9\n554,840.9\n581,230.2\n5,065,173.9\nApr\n2,646,522.9\n382,678.9\n197,662.2\n3,226,864.0\n173.4\n9,463.7\n3,236,501.1\n1,115.5\n201,674.1\n13,321.9\n21,331.0\n6,418.8\n935,402.2\n214,270.9\n584,658.1\n5,214,693.6\nMay\n5,196,712.7\n969,812.4\n435,965.9\n6,602,490.9\n514.9\n50,270.4\n6,653,276.3\n1,287.6\n493,894.8\n78,332.6\n65,967.5\n30,583.3\n1,815,309.9\n607,438.1\n1,452,822.8\n11,198,912.9\nJun\n10,038,744.6\n2,287,818.9\n789,112.9\n13,115,676.4\n1,468.6\n432,367.0\n13,549,512.0\n1,177.5\n1,201,797.0\n39,166.6\n101,465.7\n64,321.9\n5,042,026.4\n1,390,786.2\n2,830,837.1\n24,221,090.2\nJul\n9,592,825.0\n1,787,488.9\n592,115.4\n11,972,429.2\n9,138.5\n380,190.7\n12,361,758.4\n512.4\n847,658.7\n87,827.2\n146,299.0\n58,256.2\n4,649,856.9\n829,382.3\n2,509,565.1\n21,491,116.1\nAug\n9,698,801.3\n1,920,804.2\n622,360.9\n12,241,966.5\n1,479.8\n381,277.2\n12,624,723.5\n863.9\n865,945.4\n84,841.4\n141,305.4\n56,751.6\n4,465,099.7\n701,626.2\n2,553,598.8\n21,494,755.8\nSep\n13,388,822.1\n319,686.0\n695,555.0\n14,404,063.1\n4,754.8\n114,251.5\n14,523,069.4\n504.3\n1,036,635.6\n82,493.4\n152,779.3\n90,032.4\n5,159,376.7\n776,997.6\n2,972,007.2\n24,793,895.8\nOct\n14,087,303.5\n312,655.9\n827,902.5\n15,227,861.9\n1,692.7\n146,801.2\n15,376,355.8\n522.9\n1,106,440.5\n84,628.9\n159,670.3\n83,441.8\n5,427,255.6\n958,746.4\n2,946,119.7\n26,143,181.7\nNov\n14,816,672.7\n306,014.4\n882,972.1\n16,005,659.2\n5,789.4\n133,219.7\n16,144,668.4\n432.3\n1,259,039.0\n92,939.9\n227,935.0\n89,997.7\n5,701,702.0\n1,046,257.0\n3,234,709.9\n27,797,681.2\nDec\n15,726,758.6\n369,405.4\n808,422.2\n16,904,586.1\n6,923.3\n201,225.8\n17,112,735.3\n36,808.0\n1,314,667.6\n55,157.4\n153,701.6\n138,722.6\n6,264,918.7\n1,184,706.9\n3,575,604.1\n29,837,022.2\n2024\nJan\n24,824,665.8\n662,989.2\n1,191,915.8\n26,679,570.7\n25,881.9\n169,368.5\n26,874,821.1\n168.2\n2,102,990.2\n114,298.0\n279,174.1\n182,727.0\n9,532,603.9\n1,949,662.4\n5,652,947.5\n46,689,392.4\nFeb\n34,081,030.9\n911,544.4\n1,983,870.0\n36,976,445.3\n7,146.9\n340,314.0\n37,323,906.2\n151.1\n3,106,432.1\n105,237.1\n449,118.3\n279,727.9\n13,237,287.6\n2,608,075.1\n8,386,836.6\n65,496,772.2\nMar\n48,600,783.9\n1,434,256.6\n3,333,658.9\n53,368,699.4\n104,688.2\n515,299.7\n53,988,687.3\n0.0\n4,654,985.7\n95,705.0\n500,611.7\n361,061.7\n20,221,996.6\n2,860,196.6\n10,814,535.9\n93,497,780.6\nApr\n31,998.9\n843.3\n1,944.9\n34,787.2\n92.9\n242.8\n35,122.9\n0.0\n2,867.4\n67.4\n358.1\n222.7\n10,281.8\n2,510.2\n8,387.7\n59,818.1\nMay\n33,721.9\n910.6\n2,242.3\n36,874.7\n79.3\n349.9\n37,303.9\n0.0\n3,056.1\n50.9\n436.0\n4.6\n12,101.9\n2,114.7\n8,699.7\n63,767.8\nJun\n34,597.9\n958.5\n2,874.9\n38,431.3\n2.1\n589.2\n39,022.6\n0.0\n3,399.1\n99.8\n442.6\n13.2\n14,415.1\n2,541.3\n7,611.6\n67,545.3\nJul\n36,817.5\n1,137.8\n2,766.8\n40,722.1\n68.7\n438.6\n41,229.4\n0.0\n3,923.2\n99.9\n469.8\n12.0\n15,126.4\n2,342.9\n7,430.9\n70,634.5\nAug\n37,597.8\n872.1\n2,514.1\n40,984.0\n65.6\n532.9\n41,582.4\n0.0\n4,039.1\n109.9\n586.0\n12.5\n16,106.1\n2,767.9\n8,510.5\n73,714.5\nSep\n59,919.0\n2,378.4\n3,920.7\n66,218.0\n76.5\n579.2\n66,873.8\n0.0\n7,142.2\n491.4\n844.5\n51.1\n27,911.3\n4,853.4\n13,632.7\n121,800.5\nOct\n70,016.8\n1,657.3\n5,193.9\n76,867.9\n170.2\n621.4\n77,659.6\n0.0\n8,524.2\n429.7\n1,248.8\n16.1\n32,737.1\n6,380.1\n15,591.5\n142,587.2\nNov\n66,321.7\n1,869.1\n5,320.9\n73,511.7\n156.7\n677.1\n74,345.6\n0.0\n7,213.9\n409.3\n558.7\n42.7\n32,040.3\n6,685.9\n13,841.4\n135,137.8\nDec\n69,146.0\n1,993.7\n5,095.0\n76,234.8\n134.4\n716.3\n77,085.5\n0.0\n8,204.4\n233.0\n588.3\n112.5\n32,891.4\n6,555.3\n14,497.8\n140,168.2\n2025\nJan\n67,471.6\n3,347.4\n5,479.5\n76,298.4\n113.0\n703.9\n77,115.3\n0.0\n8,899.1\n368.7\n583.1\n13.4\n31,606.5\n6,541.2\n15,051.3\n140,178.6\nFeb\n66,010.2\n2,819.1\n5,647.8\n74,477.1\n395.7\n912.6\n75,785.4\n0.0\n8,885.5\n536.9\n840.5\n17.4\n32,130.5\n6,813.5\n14,214.5\n139,224.1\nSource:Reserve Bank of Zimbabwe, 2025\n1. Figures recorded before April 2024 are in ZWL$\n2. Figures recorded from April 2024 to date are in ZWG\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\n \n \n19 \n \n \n \nForeign\nOther Assets\nNon Financial \nTOTAL\nEnd of\nNotes\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt Public Enterprises\nOther2\nMortgages\nGovernment\nOther\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2022\nJan\n324.6\n \n3504.3\n8,506.5\n \n2680.3\n2,631.0\n \n-\n \n1,110.8\n \n2.4\n-\n \n1,487.3\n \n2,967.6\n \n-\n \n35,913.5\n \n6693.8\n14,008.7\n \n79,830.9\n \nFeb\n411.5\n \n4021.5\n9,763.6\n \n3069.7\n5,678.0\n \n-\n \n4,048.9\n \n1.6\n-\n \n1,465.4\n \n3,241.1\n \n-\n \n39,977.5\n \n4511.5\n13,964.4\n \n90,154.6\n \nMar\n354.3\n \n4413.6\n11,882.6\n \n3691.3\n4,932.3\n \n-\n \n5,235.0\n \n0.9\n-\n \n1,590.0\n \n3,888.3\n \n-\n \n42,741.3\n \n9086.6\n15,421.2\n \n103,237.4\n \nApr\n546.4\n \n3054.1\n15,585.8\n \n4857.7\n5,768.6\n \n-\n \n5,714.4\n \n0.2\n-\n \n1,861.4\n \n4,143.7\n \n-\n \n48,582.4\n \n9654.2\n16,999.2\n \n116,768.1\n \nMay\n639.5\n \n8326.7\n23,817.6\n \n4251.9\n16,001.6\n \n-\n \n6,150.9\n \n0.0\n-\n \n1,486.3\n \n8,474.8\n \n-\n \n74,864.0\n \n14793.9\n17,091.2\n \n175,898.5\n \nJun\n418.5\n \n8464.3\n32,497.6\n \n3807.5\n21,184.8\n \n-\n \n2,639.3\n \n0.0\n-\n \n1,340.0\n \n10,851.1\n \n-\n \n85,145.9\n \n18155.8\n35,128.1\n \n219,633.0\n \nJul\n700.4\n \n9914.6\n30,660.3\n \n4983.4\n24,902.9\n \n-\n \n4,077.6\n \n0.0\n-\n \n1,411.5\n \n13,722.1\n \n-\n \n98,066.0\n \n9998.6\n45,127.9\n \n243,565.1\n \nAug\n863.8\n \n14422.1\n33,703.2\n \n4483.0\n34,971.8\n \n-\n \n4,379.8\n \n0.0\n-\n \n2,106.6\n \n16,515.4\n \n-\n \n115,491.9\n \n8745.3\n45,694.0\n \n281,377.1\n \nSep\n1,086.8\n \n14998.2\n37,911.3\n \n7470.1\n45,094.8\n \n-\n \n8,440.8\n \n0.0\n-\n \n1,302.8\n \n17,996.8\n \n-\n \n129,242.7\n \n11630.7\n60,830.4\n \n336,005.2\n \nOct\n1,158.3\n \n14768.7\n44,296.5\n \n10013.7\n44,664.1\n \n-\n \n14,109.9\n \n0.0\n-\n \n1,142.4\n \n16,817.7\n \n-\n \n123,793.8\n \n30036.4\n47,678.2\n \n348,479.7\n \nNov\n1,449.3\n \n22456.9\n41,398.0\n \n9771.8\n41,317.6\n \n-\n \n17,572.6\n \n0.0\n-\n \n2,085.3\n \n16,785.8\n \n-\n \n136,029.9\n \n30694.0\n46,275.8\n \n365,836.9\n \nDec\n1,470.7\n \n23012.7\n48,533.8\n \n8913.7\n50,229.0\n \n-\n \n21,411.1\n \n0.0\n19,993.4\n \n2,176.2\n \n17,693.7\n \n-\n \n119,322.3\n \n39279.1\n69,102.5\n \n421,138.1\n \n2023\nJan\n2,402.7\n \n32405.1\n47,062.6\n \n8410.8\n50,364.6\n \n-\n \n17,976.2\n \n0.0\n23,668.5\n \n2,406.3\n \n18,311.0\n \n-\n \n132,757.4\n \n41367.4\n69,570.1\n \n446,702.8\n \nFeb\n234.9\n \n59685.4\n50,103.0\n \n9568.6\n62,701.4\n \n889.9\n \n24,809.7\n \n0.0\n26,667.1\n \n4,451.9\n \n21,629.1\n \n-\n \n146,798.4\n \n50093.6\n70,987.9\n \n528,620.9\n \nMar\n214.6\n \n72311.9\n57,399.6\n \n9196.8\n51,300.9\n \n-\n \n28,841.5\n \n0.0\n24,689.0\n \n5,503.9\n \n19,118.6\n \n-\n \n170,376.6\n \n54524.7\n84,489.1\n \n577,967.3\n \nApr\n184.1\n \n61341.6\n63,129.5\n \n16343.2\n61,444.0\n \n-\n \n28,727.0\n \n0.0\n28,119.0\n \n5,989.2\n \n27,619.9\n \n-\n \n205,412.2\n \n81442.9\n86,571.2\n \n666,323.9\n \nMay\n78.1\n \n125685.1\n100,808.7\n \n22707.0\n195,646.6\n \n-\n \n81,344.3\n \n0.0\n69,908.9\n \n6,246.8\n \n53,180.7\n \n-\n \n440,462.4\n \n103176.1\n116,103.7\n \n1,315,348.2\n \nJun\n176.6\n \n227001.8\n172,666.5\n \n25998.2\n452,772.6\n \n40,326.7\n \n115,193.3\n \n0.0\n196,310.3\n \n4,209.5\n \n121,677.5\n \n-\n \n870,075.1\n \n230604.4\n544,587.8\n \n3,001,600.3\n \nJul\n162.7\n \n132017.2\n220,995.0\n \n20797.2\n459,668.2\n \n32,010.8\n \n105,308.6\n \n0.0\n154,472.7\n \n13,777.8\n \n153,638.5\n \n-\n \n697,177.8\n \n209734.6\n612,937.8\n \n2,812,698.9\n \nAug\n611.0\n \n105296.6\n309,821.7\n \n55744.7\n475,838.3\n \n37,447.1\n \n102,495.2\n \n0.0\n153,578.2\n \n6,767.5\n \n135,193.3\n \n-\n \n758,439.2\n \n223114.4\n564,622.1\n \n2,928,969.2\n \nSep\n949.3\n \n193065.6\n339,269.2\n \n41680.1\n437,996.0\n \n58,554.5\n \n110,351.3\n \n0.0\n161,346.6\n \n4,522.1\n \n153,113.7\n \n-\n \n880,148.8\n \n290026.7\n565,616.4\n \n3,236,640.3\n \nOct\n403.8\n \n204713.4\n254,684.1\n \n187632.1\n440,150.3\n \n65,022.1\n \n97,046.1\n \n0.0\n176,111.9\n \n13,771.8\n \n173,523.5\n \n-\n \n829,479.5\n \n345029.3\n586,015.6\n \n3,373,583.5\n \nNov\n370.5\n \n222344.7\n387,213.2\n \n160896.0\n326,510.1\n \n50,688.3\n \n159,225.4\n \n0.0\n173,990.9\n \n28,127.2\n \n187,363.3\n \n-\n \n926,663.7\n \n395549.5\n595,811.6\n \n3,614,754.5\n \nDec\n403.7\n \n251968.8\n457,034.9\n \n261067.9\n345,348.0\n \n56,551.7\n \n185,131.1\n \n0.0\n166,902.0\n \n27,875.9\n \n222,503.1\n \n0.7\n \n973,788.6\n \n507890.9\n658,045.7\n \n4,114,512.9\n \n2024\nJan\n367.9\n \n368046.7\n524,020.9\n \n471915.0\n363,325.6\n \n40,412.9\n \n280,803.2\n \n0.0\n280,441.0\n \n45,935.9\n \n339,610.7\n \n-\n \n1,563,405.5\n \n649087.4\n742,734.0\n \n5,670,106.8\n \nFeb\n578.8\n \n637645.2\n797,581.2\n \n618074.6\n613,309.7\n \n24,680.4\n \n425,783.2\n \n0.0\n399,313.5\n \n67,900.2\n \n519,513.4\n \n-\n \n2,188,186.8\n \n904519.6\n937,957.6\n \n8,135,044.1\n \nMar\n356.6\n \n1026840.5\n1,171,941.4\n \n888362.3\n829,470.4\n \n-\n \n440,943.8\n \n0.0\n528,820.5\n \n103,276.3\n \n787,872.2\n \n-\n \n3,761,909.8\n \n1403556.4\n1,697,667.5\n \n12,641,017.5\n \nApr\n1.0\n \n564.4\n864.1\n \n693.0\n326.5\n \n67.2\n \n337.2\n \n0.0\n313.5\n \n-\n \n593.2\n \n212.7\n \n2,856.8\n \n420.1\n824.2\n \n8,074.0\n \nMay\n4.0\n \n639.2\n783.2\n \n772.6\n296.2\n \n109.6\n \n407.6\n \n0.0\n303.7\n \n-\n \n309.2\n \n19.8\n \n2,946.5\n \n712.1\n903.7\n \n8,207.5\n \nJun\n1.1\n \n520.3\n1,122.4\n \n718.7\n678.1\n \n110.9\n \n188.6\n \n0.0\n282.9\n \n-\n \n424.7\n \n20.4\n \n2,998.6\n \n858.8\n1,229.8\n \n9,155.3\n \nJul\n2.4\n \n681.0\n918.2\n \n640.3\n336.2\n \n99.8\n \n676.7\n \n0.0\n276.2\n \n5.0\n \n333.9\n \n20.5\n \n3,022.2\n \n1332.3\n1,250.3\n \n9,595.1\n \nAug\n1.1\n \n642.2\n853.3\n \n852.1\n428.1\n \n-\n \n764.6\n \n0.0\n246.2\n \n5.1\n \n373.1\n \n20.6\n \n3,042.5\n \n1811.8\n1,318.9\n \n10,359.6\n \nSep\n1.0\n \n1230.9\n1,985.1\n \n1121.2\n705.4\n \n-\n \n555.5\n \n0.0\n431.0\n \n34.5\n \n1,130.0\n \n37.0\n \n4,878.1\n \n2054.8\n2,298.6\n \n16,463.3\n \nOct\n13.1\n \n1166.2\n2,512.0\n \n1391.6\n769.7\n \n-\n \n745.1\n \n0.0\n502.2\n \n5.3\n \n1,380.9\n \n42.7\n \n5,751.9\n \n2214.8\n2,435.0\n \n18,930.4\n \nNov\n14.0\n \n918.9\n2,141.3\n \n1383.8\n649.7\n \n-\n \n602.6\n \n0.0\n367.6\n \n5.4\n \n1,293.8\n \n39.5\n \n4,997.5\n \n2566.9\n2,458.3\n \n17,439.1\n \nDec\n17.1\n \n1089.4\n2,633.9\n \n2306.6\n754.5\n \n-\n \n675.7\n \n0.0\n361.0\n \n-\n \n1,424.9\n \n35.4\n \n5,500.8\n \n2343.9\n2,593.3\n \n19,736.5\n \n2025\nJan\n16.4\n \n936.1\n2,314.6\n \n1595.3\n637.3\n \n-\n \n1,060.8\n \n0.0\n352.9\n \n0.0\n \n1,532.1\n \n35.6\n \n5,695.2\n \n3701.1\n2,505.2\n \n20,382.5\n \nFeb\n17.2\n \n977.3\n2,481.1\n \n1537.6\n695.1\n \n-\n \n856.4\n \n0.0\n292.4\n \n-\n \n1,628.3\n \n35.8\n \n5,937.3\n \n2478.3\n2,513.8\n \n19,450.5\n \nSource:Reserve Bank of Zimbabwe, 2025\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations, \n4.Figures recorded before April 2024 are in ZWL$\n5.Figures recorded from April 2024 to date are in ZWG\nTABLE 6.1: BUILDING SOCIETIES -ASSETS\nMillions\nDebt Securities\nLoans and Advances\n \n \n20 \n \n \n \nDebt Securities\nForeign Liabilities\nCapital\nOther\nTOTAL\nand\nLiablities\nEnd of\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository \nOther Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2022\nJan\n31,695.1\n5,983.6\n37,678.7\n0.0\n15.0\n37,693.7\n1,771.4\n10,991.6\n0.0\n373.7\n0.0\n18,063.5\n10,937.0\n79,830.9\nFeb\n37,132.1\n7,089.1\n44,221.1\n0.0\n15.0\n44,236.1\n1,703.8\n14,215.9\n0.0\n431.6\n0.0\n18,241.5\n11,325.7\n90,154.6\nMar\n44,187.4\n6,190.7\n50,378.1\n0.0\n15.0\n50,393.1\n1,742.3\n15,620.9\n0.0\n501.9\n0.0\n20,548.8\n14,430.4\n103,237.4\nApr\n52,979.2\n6,553.0\n59,532.2\n0.0\n15.0\n59,547.2\n1,536.3\n17,027.1\n0.0\n704.1\n0.0\n23,099.0\n14,854.4\n116,768.1\nMay\n86,411.7\n6,683.0\n93,094.7\n0.0\n15.0\n93,109.8\n1,477.7\n34,306.7\n0.0\n1,033.4\n0.0\n22,645.2\n23,325.7\n175,898.5\nJun\n98,008.7\n8,427.1\n106,435.9\n1,030.1\n15.0\n107,481.1\n1,496.4\n40,346.3\n0.0\n1,200.6\n0.0\n42,213.2\n26,895.5\n219,633.0\nJul\n111,583.1\n9,489.2\n121,072.3\n1,072.6\n15.0\n122,159.9\n1,225.0\n46,145.1\n0.0\n2,071.5\n0.0\n55,131.6\n16,832.0\n243,565.1\nAug\n133,071.2\n11,398.3\n144,469.5\n1,625.2\n15.0\n146,109.7\n1,382.6\n55,691.4\n0.0\n2,979.3\n0.0\n60,157.4\n15,056.7\n281,377.1\nSep\n143,338.6\n28,284.7\n171,623.3\n0.0\n15.0\n171,638.3\n1,339.9\n62,659.9\n0.0\n3,613.8\n0.0\n79,343.1\n17,410.1\n336,005.2\nOct\n122,775.3\n20,897.6\n143,672.9\n1,214.2\n15.0\n144,902.1\n1,707.3\n69,651.9\n0.0\n4,327.9\n0.0\n86,799.2\n41,091.4\n348,479.7\nNov\n130,892.9\n23,401.5\n154,294.3\n1,256.4\n13.0\n155,563.7\n1,855.1\n72,052.0\n0.0\n5,140.0\n0.0\n89,895.0\n41,331.2\n365,836.9\nDec\n149,207.3\n30,517.1\n179,724.4\n1,239.7\n103.8\n181,068.0\n1,933.7\n71,142.6\n0.0\n5,623.9\n0.0\n118,486.1\n42,883.8\n421,138.1\n2023\nJan\n161,506.8\n31,099.4\n192,606.2\n1,462.2\n121.0\n194,189.4\n3,214.4\n72,524.5\n0.0\n6,622.6\n0.0\n144,335.3\n25,816.5\n446,702.8\nFeb\n210,739.4\n27,500.2\n238,239.5\n1,153.4\n15.0\n239,407.9\n2,349.9\n84,724.5\n0.0\n7,548.9\n0.0\n155,007.6\n39,582.0\n528,620.9\nMar\n234,480.2\n38,088.7\n272,568.9\n158.0\n14.4\n272,741.2\n1,982.4\n89,883.4\n0.0\n7,502.7\n0.0\n172,499.0\n33,358.6\n577,967.3\nApr\n272,738.9\n35,889.2\n308,628.0\n400.0\n15.0\n309,043.1\n1,809.5\n116,418.1\n0.0\n8,456.9\n0.0\n183,262.3\n47,334.0\n666,323.9\nMay\n502,897.5\n36,680.3\n539,577.9\n553.7\n15.0\n540,146.6\n4,453.5\n289,636.2\n0.0\n8,115.4\n0.0\n372,206.8\n100,789.6\n1,315,348.2\nJun\n927,980.2\n66,404.1\n994,384.3\n0.0\n15.0\n994,399.3\n4,147.7\n631,544.2\n0.0\n10,873.2\n0.0\n1,117,122.1\n243,513.7\n3,001,600.3\nJul\n804,547.2\n73,047.1\n877,594.3\n15,753.2\n15.0\n893,362.6\n2,706.7\n611,248.0\n0.0\n14,397.5\n0.0\n1,093,858.2\n197,126.1\n2,812,698.9\nAug\n920,687.4\n90,856.7\n1,011,544.1\n15,752.3\n15.0\n1,027,311.4\n3,400.5\n617,162.9\n0.0\n12,854.9\n0.0\n1,064,286.3\n203,953.2\n2,928,969.2\nSep\n1,062,730.1\n75,413.9\n1,138,143.9\n0.0\n15.1\n1,138,159.0\n3,262.9\n652,356.6\n0.0\n16,101.5\n0.0\n1,117,548.2\n309,212.1\n3,236,640.3\nOct\n1,261,965.8\n64,282.0\n1,326,247.8\n0.0\n15.1\n1,326,262.9\n4,056.0\n467,416.6\n0.0\n16,785.2\n0.0\n1,188,499.5\n370,563.3\n3,373,583.5\nNov\n1,301,463.8\n82,076.9\n1,383,540.7\n79,497.1\n15.1\n1,463,052.8\n4,822.5\n525,114.1\n0.0\n16,180.1\n0.0\n1,209,652.3\n395,932.7\n3,614,754.5\nDec\n1,541,238.9\n142,705.5\n1,683,944.4\n79,497.1\n15.8\n1,763,457.2\n7,085.0\n516,718.0\n0.0\n8,736.3\n0.0\n1,308,419.6\n510,096.7\n4,114,512.9\n2024\nJan\n2,094,039.4\n96,896.2\n2,190,935.6\n79,481.7\n15.1\n2,270,432.3\n8,231.4\n904,697.2\n0.0\n11,028.7\n0.0\n1,826,995.6\n648,721.6\n5,670,106.8\nFeb\n2,991,430.0\n192,203.3\n3,183,633.2\n162,422.1\n15.1\n3,346,070.4\n10,388.9\n1,314,901.6\n0.0\n5,723.7\n0.0\n2,630,626.9\n827,332.6\n8,135,044.1\nMar\n4,958,662.0\n186,068.5\n5,144,730.5\n162,239.8\n15.7\n5,306,986.0\n8,072.5\n1,880,803.3\n0.0\n6,134.8\n0.0\n4,286,906.8\n1,152,114.2\n12,641,017.5\nApr\n3,369.4\n36.3\n3,405.6\n65.0\n0.0\n3,470.7\n3.2\n1,258.6\n0.0\n0.0\n0.0\n1,955.9\n1,385.6\n8,074.0\nMay\n3,228.4\n75.2\n3,303.7\n0.0\n0.0\n3,303.7\n4.8\n1,366.6\n0.0\n0.0\n0.0\n2,496.7\n1,035.8\n8,207.5\nJun\n3,502.4\n97.1\n3,599.5\n0.0\n0.0\n3,599.5\n4.4\n1,414.8\n0.0\n8.0\n0.0\n2,990.2\n1,138.3\n9,155.3\nJul\n4,199.9\n128.4\n4,328.3\n0.0\n0.0\n4,328.3\n19.6\n919.3\n0.0\n13.2\n0.0\n3,111.6\n1,203.0\n9,595.1\nAug\n4,433.7\n172.4\n4,606.1\n0.0\n0.0\n4,606.1\n103.0\n850.7\n0.0\n16.1\n0.0\n3,370.3\n1,413.3\n10,359.6\nSep\n6,773.8\n475.3\n7,249.1\n22.6\n0.0\n7,271.7\n103.8\n1,559.3\n0.0\n16.3\n0.0\n5,486.0\n2,026.3\n16,463.3\nOct\n8,011.9\n795.7\n8,807.6\n86.9\n0.0\n8,894.5\n122.7\n1,462.9\n0.0\n61.4\n0.0\n6,003.1\n2,385.9\n18,930.4\nNov\n7,145.7\n872.8\n8,018.6\n45.8\n0.0\n8,064.4\n79.9\n1,227.6\n0.0\n10.0\n0.0\n6,043.8\n2,013.3\n17,439.1\nDec\n8,227.9\n1,293.1\n9,521.0\n71.2\n0.0\n9,592.2\n79.9\n1,306.5\n0.0\n267.8\n0.0\n5,923.9\n2,566.2\n19,736.5\n2025\nJan\n7,694.3\n1,357.3\n9,051.7\n99.0\n0.0\n9,150.7\n79.9\n1,645.4\n0.0\n265.4\n13.2\n6,057.2\n3,170.6\n20,382.5\nFeb\n7,981.1\n1,558.4\n9,539.5\n115.2\n0.0\n9,654.7\n3.9\n1,657.2\n0.0\n91.4\n0.0\n6,289.8\n1,753.5\n19,450.5\nSource:Reserve Bank of Zimbabwe, 2025\n1. Figures recorded before April 2024 are in ZWL\n2. Figures recorded from April 2024 to date are in ZWG\nAmounts Owing to\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\nMillions\n \n \n21 \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISATIONS\n \n \n \n \n2022\nJan\n58,163,723.8\n2,180,551.5\n576,438.1\n26,576,317.7\n366,231.4\n8,887,534.5\n23,074,734.8\n11,840,524.9\n15,743,736.5\n3,516,259.7\n47,325,078.3\n29,564.7\n198,280,695.9\nFeb\n59,500,669.7\n2,289,260.8\n618,640.1\n27,925,301.7\n641,435.0\n9,370,886.7\n27,976,121.6\n13,027,815.1\n20,505,827.5\n3,747,288.3\n51,007,737.3\n19,692.3\n216,630,676.1\nMar\n66,551,117.8\n2,538,377.1\n656,335.5\n29,688,979.7\n660,584.5\n10,903,917.1\n32,629,411.6\n15,688,496.1\n38,075,386.7\n4,471,441.5\n58,500,950.7\n802,168.3\n261,167,166.6\nApr\n74,441,781.1\n4,219,500.3\n1,441,218.1\n33,136,441.4\n673,885.9\n13,157,284.3\n34,426,878.3\n18,261,710.3\n39,043,359.8\n5,001,307.2\n63,176,517.9\n40,089.6\n287,019,974.2\nMay\n101,753,100.1\n5,120,524.8\n3,358,419.2\n50,514,059.3\n760,401.2\n12,433,390.5\n42,057,624.5\n28,724,818.4\n48,088,662.7\n6,286,840.2\n76,655,600.2\n34,456.8\n375,787,897.7\nJune\n118,753,589.0\n6,209,658.5\n2,293,665.5\n64,942,950.0\n869,273.2\n23,897,585.0\n58,442,367.2\n37,195,284.1\n62,467,707.8\n9,414,912.5\n96,536,183.0\n43,204.2\n481,066,380.0\nJuly\n133,779,414.0\n7,610,614.1\n3,684,426.1\n77,836,080.2\n938,368.0\n30,537,998.0\n69,408,788.7\n46,181,587.4\n72,642,938.5\n10,449,582.5\n111,094,524.5\n46,145.7\n564,210,467.8\nAug\n165,210,571.4\n10,163,176.7\n2,624,492.9\n93,899,073.6\n1,266,729.8\n39,544,245.3\n87,691,102.8\n58,330,938.2\n97,552,420.8\n10,450,507.1\n131,625,765.3\n154,457.6\n698,513,481.5\nSept\n201,167,878.5\n11,330,918.8\n5,038,300.4\n110,956,484.0\n1,297,748.5\n44,492,682.7\n101,816,518.3\n92,708,096.4\n88,483,494.4\n11,685,667.9\n152,934,863.3\n276,752.3\n822,189,405.6\nOct\n223,506,677.7\n12,026,669.5\n4,229,873.3\n113,451,159.2\n1,302,041.3\n46,399,745.2\n110,333,025.8\n79,715,558.1\n89,501,330.5\n9,611,322.3\n175,816,703.6\n178,607.8\n866,072,714.2\nNov\n232,953,535.1\n16,431,625.9\n11,131,139.8\n118,284,970.8\n1,687,527.0\n42,192,397.3\n124,017,335.4\n75,874,234.7\n94,636,395.6\n12,440,947.3\n207,085,835.5\n197,473.3\n936,933,417.8\nDec\n253,185,165.2\n19,199,455.9\n10,466,455.0\n135,037,685.1\n1,551,994.2\n70,805,600.3\n136,576,579.6\n94,115,141.7\n123,404,532.1\n12,079,018.7\n235,371,108.1\n173,717.1\n1,091,966,452.8\n2023\nJan\n299,237,745.1\n22,096,826.9\n11,001,194.9\n154,399,125.0\n2,073,794.8\n72,677,263.1\n165,905,496.5\n124,259,994.3\n140,303,195.4\n16,560,714.3\n290,446,774.7\n286,968.1\n1,299,249,093.1\nFeb\n333,081,520.8\n26,349,752.5\n12,607,980.8\n168,969,321.4\n3,232,834.7\n79,874,665.8\n198,087,465.1\n146,996,948.4\n150,078,778.0\n18,960,512.9\n335,439,856.5\n415,659.5\n1,474,095,296.5\nMar\n411,138,419.1\n28,795,432.6\n14,081,946.7\n184,250,094.2\n3,256,927.2\n101,507,881.5\n232,125,042.8\n168,374,643.7\n159,301,093.2\n20,786,447.1\n364,183,808.4\n229,595.5\n1,688,031,331.8\nApr\n411,638,425.6\n28,865,765.5\n14,081,964.7\n184,833,219.7\n3,256,927.2\n101,507,881.5\n235,076,590.9\n168,374,757.6\n159,310,920.5\n20,785,827.2\n365,366,760.5\n229,595.5\n1,693,328,636.3\nMay\n726,348,772.4\n78,828,771.5\n44,800,380.0\n409,618,602.9\n6,584,930.1\n226,467,642.5\n583,387,051.3\n480,909,418.5\n381,628,891.5\n62,593,512.5\n757,858,742.6\n267,815.4\n3,759,294,531.0\nJun\n1,385,380,571.7\n173,918,051.5\n114,682,839.7\n1,119,448,698.2\n23,922,347.4\n571,712,604.7\n1,309,324,347.9\n1,111,326,640.1\n808,734,970.2\n129,722,475.7\n1,754,989,459.0\n444,788.0\n8,503,607,794.2\nJul\n1,088,372,491.6\n132,529,236.3\n101,023,084.2\n843,805,813.7\n21,291,030.4\n370,922,779.8\n1,037,949,287.4\n824,419,062.0\n646,244,001.7\n87,491,103.6\n1,451,125,105.6\n356,098.9\n6,605,529,095.1\nAug\n1,104,126,310.1\n133,512,317.7\n105,426,999.2\n683,402,044.9\n21,345,225.8\n393,145,008.1\n1,077,529,295.3\n824,970,068.6\n716,638,286.7\n85,309,683.4\n1,543,461,599.3\n382,505.3\n6,689,249,344.4\nSep\n1,336,413,273.4\n158,136,405.6\n121,080,865.9\n752,199,791.2\n28,592,532.7\n465,470,715.5\n1,334,020,478.9\n1,012,670,250.7\n799,826,458.0\n102,238,002.6\n1,857,297,850.0\n586,991.0\n7,968,533,615.5\nOct\n1,461,090,986.5\n163,948,853.9\n120,153,516.7\n935,064,277.1\n24,681,683.2\n520,361,009.0\n1,381,206,351.2\n1,092,469,043.7\n859,550,943.1\n118,799,556.9\n2,126,512,435.0\n627,911.8\n8,804,466,568.2\nNov\n1,397,804,072.5\n171,337,302.5\n117,526,650.4\n1,017,731,862.9\n26,161,720.1\n535,490,381.0\n1,401,587,612.9\n992,371,783.2\n885,248,702.8\n129,500,343.7\n2,255,158,373.7\n621,795.6\n8,930,540,600.9\nDec\n1,360,816,417.4\n179,675,138.5\n121,167,248.1\n1,077,783,652.1\n46,946,926.9\n551,786,675.3\n1,483,619,833.9\n1,207,471,368.5\n863,309,236.7\n136,388,007.8\n2,458,239,172.8\n644,093.7\n9,487,847,771.7\n2024\nJan\n2,212,746,050.3\n265,031,131.4\n214,923,355.9\n1,663,240,228.2\n110,086,710.6\n875,780,504.1\n2,505,473,968.4\n1,910,394,449.6\n1,256,413,922.9\n237,647,459.8\n3,945,256,597.2\n1,037,343.5\n15,198,031,722.0\nFeb\n3,435,102,730.5\n426,536,836.7\n249,129,096.2\n2,383,796,904.4\n171,219,221.6\n1,264,658,167.3\n3,631,856,467.6\n2,844,642,895.8\n2,043,483,472.0\n352,320,643.5\n5,491,307,643.3\n1,518,795.1\n22,295,572,874.1\nMar\n4,949,814,064.7\n642,860,845.9\n452,924,544.6\n3,642,287,181.9\n251,866,635.2\n1,943,457,910.8\n5,387,453,048.3\n3,991,233,867.5\n3,178,219,935.6\n543,942,248.6\n8,278,044,179.1\n2,267,159.0\n33,264,371,621.3\n*Apr\n2,882,347.0\n371,595.0\n188,567.1\n3,081,028.9\n188,277.0\n1,174,215.3\n3,077,908.8\n2,281,800.0\n1,782,566.6\n399,652.2\n4,922,516.8\n1,655.4\n20,352,130.1\n*May\n3,549,471.2\n448,072.0\n196,408.6\n3,013,508.3\n181,989.4\n1,239,894.9\n3,619,936.0\n2,302,326.8\n1,793,582.3\n494,669.1\n5,661,322.4\n5,002.2\n22,513,367.9\n*Jun\n3,286,172.5\n496,282.6\n213,057.3\n3,210,670.4\n230,521.5\n1,418,401.0\n3,457,122.9\n1,954,112.0\n1,946,800.0\n567,017.7\n6,019,427.0\n1,771.4\n22,801,356.4\n*Jul\n3,487,382.6\n511,490.7\n202,186.1\n3,350,580.0\n163,104.4\n1,304,409.1\n3,570,513.3\n2,117,767.2\n2,347,954.2\n568,049.1\n6,348,713.3\n2,029.5\n23,985,090.6\n*Aug\n3,858,128.5\n496,920.1\n197,595.1\n3,160,166.1\n163,179.6\n1,353,221.2\n3,891,826.5\n2,259,346.5\n2,064,398.1\n355,517.6\n7,019,997.3\n1,626.5\n24,821,923.1\n*Sept\n6,672,075.1\n1,240,260.2\n365,299.0\n5,024,077.0\n274,548.6\n2,326,667.5\n6,387,958.1\n4,331,429.1\n3,418,807.3\n640,082.1\n11,884,283.8\n2,603.2\n42,568,091.0\n*Oct\n7,858,559.5\n1,469,928.3\n481,828.8\n5,465,309.0\n320,115.1\n2,603,522.8\n7,340,600.9\n5,249,584.6\n3,667,687.2\n726,009.2\n13,568,052.5\n3,070.1\n48,754,267.9\n*Nov\n7,180,366.7\n1,328,085.6\n428,978.8\n5,025,733.7\n284,239.9\n2,457,448.5\n6,759,835.7\n4,209,879.6\n3,928,182.1\n680,905.2\n13,074,981.8\n2,309.4\n45,360,946.8\n*Dec\n7,297,552.8\n1,289,292.1\n385,875.0\n4,973,856.6\n262,219.7\n2,513,526.6\n6,746,914.0\n4,827,984.5\n3,694,327.9\n706,439.7\n13,280,443.5\n2,262.8\n45,980,695.3\n2025\n*Jan\n7,678,298.7\n1,196,038.2\n409,696.0\n5,047,238.2\n306,809.7\n2,664,917.4\n6,434,242.4\n4,757,437.7\n4,086,971.0\n769,886.0\n13,569,651.2\n1,922.0\n46,923,108.5\n*Feb\n8,299,274.7\n1,201,875.8\n399,492.6\n4,830,538.6\n300,587.1\n2,770,286.7\n6,503,215.4\n4,803,609.8\n4,292,425.8\n746,491.4\n13,140,132.5\n1,960.5\n47,289,890.9\nSource:Reserve Bank of Zimbabwe,2025\n/1 Including the only merchant bank still in operation.\n *Statistics are denominated in ZiG (000)\n1. Figures recorded before April 2024 are in ZWL\nTABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES\n ('000)\n \n \n \n22 \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS\nORGANISATIONS\n2022\nJan\n17,399,268.4\n9,928,816.1\n28,146,847.2\n46,285,881.1\n15,060,177.5\n34,087,881.4\n60,888,346.7\n38,232,883.7\n135,579,116.5\n6,454,492.6\n32,504,960.5\n745,336.0\n425,314,007.6\nFeb\n20,260,983.5\n9,641,974.7\n32,159,803.2\n50,825,844.5\n15,235,028.5\n35,068,548.5\n49,157,612.2\n43,769,515.0\n146,423,512.2\n7,768,846.5\n36,257,364.0\n724,522.4\n447,293,555.2\nMar\n22,638,817.9\n11,683,937.4\n34,271,841.3\n61,002,811.6\n20,352,647.3\n34,501,628.6\n57,839,997.3\n60,678,395.3\n173,444,002.6\n9,467,563.9\n43,160,654.7\n970,393.8\n530,012,691.6\nApr\n26,926,844.7\n12,304,918.4\n34,924,202.5\n67,201,357.8\n21,444,798.1\n38,606,872.2\n61,303,321.1\n64,980,792.3\n216,612,532.7\n10,455,473.9\n45,951,692.0\n939,217.9\n601,652,023.6\nMay\n39,564,579.0\n21,954,770.2\n42,666,739.4\n108,620,498.7\n28,757,840.8\n54,108,110.4\n88,717,845.2\n107,568,244.7\n291,739,801.6\n14,310,137.6\n65,853,453.1\n1,190,747.9\n865,052,768.6\nJun\n45,956,287.6\n26,686,177.1\n47,155,850.8\n128,881,143.6\n23,783,755.2\n60,238,450.0\n105,247,922.5\n120,389,796.0\n326,034,986.6\n17,068,663.5\n108,828,797.1\n1,325,268.7\n1,011,597,098.7\nJul\n40,699,352.1\n28,329,526.0\n45,417,841.1\n128,847,329.1\n21,958,796.0\n62,326,844.4\n103,536,398.9\n112,642,685.5\n401,574,353.3\n17,902,000.2\n112,555,899.5\n1,117,408.2\n1,076,908,434.3\nAug\n68,438,409.6\n39,107,020.5\n53,616,955.7\n171,501,037.8\n25,370,674.6\n68,913,237.2\n162,326,617.3\n137,243,494.6\n538,409,018.4\n23,523,309.1\n146,121,882.2\n1,197,164.4\n1,435,768,821.4\nSep\n81,174,128.7\n51,501,554.8\n58,104,791.5\n204,056,688.7\n63,246,197.1\n174,562,749.5\n172,521,502.9\n138,936,277.9\n626,755,883.0\n25,607,188.8\n182,077,675.0\n11,177,650.8\n1,789,722,288.7\nOct\n83,201,043.6\n63,984,990.3\n67,031,137.9\n207,367,773.6\n40,617,325.3\n155,873,800.6\n179,051,392.6\n157,121,308.5\n575,293,016.5\n27,092,268.9\n201,852,712.9\n3,193,614.1\n1,761,680,384.8\nNov\n88,153,064.5\n61,978,896.6\n78,744,676.9\n236,152,455.1\n39,915,042.9\n100,872,718.3\n214,281,243.0\n200,240,592.5\n606,580,960.9\n32,903,876.7\n233,604,874.7\n119,223.2\n1,893,547,625.3\nDec\n106,799,918.4\n60,886,327.3\n73,518,960.3\n260,923,049.6\n48,959,835.1\n122,528,998.7\n242,741,914.1\n171,982,170.0\n747,151,447.2\n37,453,518.8\n270,164,633.7\n10,753,958.6\n2,153,864,731.9\n2023\nJan\n114,820,700.8\n79,460,381.9\n82,589,902.3\n305,204,829.9\n45,118,619.6\n135,072,311.1\n263,222,364.1\n223,632,204.7\n896,980,184.3\n37,534,722.0\n288,326,194.2\n7,916,696.9\n2,479,879,111.8\nFeb\n118,375,609.7\n85,995,682.6\n93,761,236.2\n312,626,341.5\n56,688,432.6\n147,245,179.4\n266,610,300.9\n273,709,371.2\n938,437,753.7\n39,909,193.6\n292,841,727.2\n6,842,518.8\n2,633,043,347.3\nMar\n119,963,933.2\n85,731,698.4\n100,697,025.6\n322,453,843.0\n45,619,349.1\n148,455,496.2\n286,712,763.6\n273,572,570.9\n1,064,798,433.6\n44,685,590.6\n330,031,150.7\n14,190,575.5\n2,836,912,430.3\nApr\n131,146,380.3\n89,322,733.6\n99,723,066.8\n324,249,300.1\n45,619,349.1\n149,245,957.9\n289,670,780.4\n273,578,020.7\n1,072,456,655.2\n44,926,335.6\n331,068,417.4\n14,190,575.5\n2,865,197,572.7\nMay\n269,460,363.1\n210,867,012.3\n216,906,304.0\n631,589,937.9\n113,357,505.7\n362,294,051.4\n581,761,350.4\n545,536,680.6\n2,504,454,969.8\n102,648,366.2\n702,960,786.4\n28,985,518.4\n6,270,822,846.4\nJun\n581,642,309.8\n428,772,683.4\n410,699,487.7\n1,366,510,052.6\n227,784,986.6\n700,617,673.8\n1,094,382,949.6\n1,185,026,806.7\n5,283,380,622.2\n199,474,750.2\n1,564,762,675.1\n40,673,167.4\n13,083,728,165.1\nJul\n535,377,934.4\n436,808,429.5\n413,150,824.0\n1,394,747,348.2\n206,866,966.8\n711,462,740.8\n1,157,802,106.8\n982,808,623.8\n4,533,520,705.6\n184,470,180.5\n1,464,856,207.2\n37,277,944.9\n12,059,150,012.5\nAug\n537,439,303.1\n422,479,784.1\n413,226,172.3\n1,343,458,227.8\n285,743,813.6\n662,607,567.9\n1,197,898,912.2\n1,004,826,660.3\n4,639,684,933.9\n209,521,849.6\n1,553,047,811.0\n38,718,344.9\n12,308,653,380.6\nSep\n632,283,427.7\n491,562,911.4\n426,060,663.5\n1,510,241,869.9\n296,604,785.0\n789,587,698.1\n1,300,914,518.5\n1,250,791,974.4\n5,214,851,978.1\n217,382,274.5\n1,781,106,637.9\n43,583,660.4\n13,954,972,399.2\nOct\n721,203,425.9\n541,011,315.6\n554,440,420.1\n1,657,817,920.3\n309,251,239.3\n841,367,968.7\n1,438,592,170.7\n1,187,082,973.9\n5,659,995,585.3\n260,248,908.5\n1,906,411,104.9\n49,647,602.0\n15,127,070,635.2\nNov\n703,080,882.8\n566,993,243.1\n532,803,998.3\n1,698,467,822.7\n346,291,934.3\n269,835,136.3\n1,554,832,195.3\n1,195,274,632.9\n6,063,945,343.0\n293,942,495.1\n2,031,657,547.5\n46,866,707.1\n15,885,967,935.9\nDec\n605,605,541.7\n423,493,370.4\n730,799,100.8\n1,549,938,533.1\n553,801,063.2\n767,650,016.2\n1,254,233,648.4\n1,348,969,145.1\n6,689,372,974.4\n247,647,472.3\n2,091,666,965.1\n53,713,528.9\n16,882,080,093.7\n2024\nJan\n833,932,128.8\n694,796,940.8\n1,029,474,123.2\n2,082,328,111.9\n884,819,488.9\n2,004,818,592.2\n1,699,026,894.5\n1,837,959,924.5\n12,124,252,579.3\n323,794,777.4\n3,044,604,553.8\n71,184,543.7\n26,630,992,659.0\nFeb\n1,156,065,718.2\n1,037,783,187.5\n1,369,731,749.1\n3,170,746,459.4\n114,038,016.4\n3,174,169,477.5\n2,227,190,946.8\n2,855,301,054.3\n15,834,462,125.0\n552,622,448.4\n4,294,792,965.3\n89,063,348.6\n36,904,967,496.7\nMar\n1,783,340,807.0\n1,442,504,457.6\n2,116,410,516.4\n4,588,105,383.9\n1,753,052,451.7\n4,712,657,212.6\n3,465,873,456.3\n3,573,833,122.5\n20,373,593,827.7\n1,006,777,059.1\n8,454,899,690.3\n100,278,506.8\n53,371,326,491.9\n*Apr\n1,476,289.1\n893,193.9\n1,388,298.4\n4,283,881.3\n1,092,218.9\n2,578,995.2\n2,513,192.9\n2,626,884.4\n11,782,151.6\n511,608.9\n5,775,025.0\n62,998.9\n34,984,738.5\n*May \n1,608,650.7\n1,037,123.0\n986,367.1\n3,197,388.6\n1,234,670.1\n3,669,306.6\n2,777,961.0\n2,424,631.2\n13,413,072.9\n726,100.9\n5,909,740.4\n55,506.5\n37,040,519.1\n*Jun\n1,578,119.3\n1,011,831.1\n1,759,648.1\n3,190,728.1\n1,134,620.4\n3,473,307.1\n2,999,644.4\n3,196,350.7\n15,181,074.6\n630,237.4\n5,302,910.1\n65,954.2\n39,524,425.4\n*Jul\n1,709,191.7\n1,060,814.6\n1,786,754.8\n4,244,435.1\n1,695,144.9\n3,842,095.5\n2,685,658.4\n3,860,698.0\n15,154,833.8\n494,408.1\n5,163,064.3\n152,575.2\n41,849,674.3\n*Aug\n1,881,831.5\n1,096,949.9\n1,756,800.1\n4,115,344.7\n1,560,883.8\n5,160,947.6\n3,104,912.0\n2,628,465.5\n14,680,525.5\n510,741.8\n4,692,301.9\n147,285.4\n41,336,989.7\n*Sep\n2,676,045.3\n2,231,428.0\n3,076,033.4\n6,657,466.1\n2,618,571.1\n6,677,406.6\n4,328,506.2\n3,749,838.4\n26,389,976.5\n867,911.2\n8,373,719.2\n219,988.3\n67,866,890.4\n*Oct\n3,485,504.6\n2,567,255.6\n3,535,607.0\n7,474,589.9\n3,299,698.5\n7,968,221.0\n5,044,419.4\n5,097,867.0\n29,458,757.4\n1,018,065.8\n9,462,752.7\n220,427.1\n78,633,166.0\n*Nov\n3,092,857.2\n2,583,575.6\n3,658,337.2\n6,311,484.9\n3,319,494.6\n7,425,250.6\n6,381,558.4\n4,761,639.8\n27,173,979.3\n1,133,673.7\n8,782,149.6\n200,228.7\n74,824,229.7\n*Dec\n3,246,075.7\n3,000,089.4\n3,491,754.7\n6,900,913.5\n3,547,897.3\n7,345,227.1\n6,716,997.9\n4,549,008.0\n27,260,521.5\n1,099,879.7\n10,022,447.2\n355,894.5\n77,536,706.5\n2025\n*Jan\n2,906,778.3\n3,263,210.2\n3,335,010.3\n6,226,024.9\n3,652,381.3\n8,401,231.9\n6,022,841.9\n4,820,773.5\n27,794,296.0\n1,020,418.1\n9,522,378.0\n214,322.4\n77,179,666.7\n*Feb\n3,148,260.0\n2,765,476.2\n2,386,768.4\n6,142,552.8\n3,733,009.0\n8,301,324.6\n5,391,986.9\n4,799,925.6\n27,396,588.3\n1,120,196.8\n10,349,018.6\n257,727.5\n75,792,834.8\nSource: Reserve Bank of Zimbabwe,2025\n* S tatistics are denominated in ZiG (000)\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \n('000)\n \n \n23 \n \n \n \nMinimum\nMaximum\nMinimum\nMaximum\n2022\nJan\n39.32 \n57.26 \n39.62 \n64.14 \nFeb\n40.55 \n57.28 \n64.02 \n64.02 \nMar\n40.74 \n57.83 \n43.88 \n63.78 \nApr\n38.15 \n59.59 \n45.56 \n63.89 \nMay\n38.01 \n59.70 \n47.25 \n63.82 \nJun\n38.45 \n60.09 \n48.25 \n64.31 \nJul\n82.75 \n123.71 \n165.45 \n218.51 \nAug\n88.46 \n123.46 \n155.96 \n218.02 \nSep\n98.07 \n123.64 \n158.46 \n221.58 \nOct\n99.37 \n127.72 \n115.26 \n222.80 \nNov\n99.03 \n127.58 \n110.97 \n223.48 \nDec\n99.02 \n125.64 \n110.83 \n242.53 \n2023\nJan\n90.05 \n125.64 \n116.03 \n242.53 \nFeb\n60.12 \n125.64 \n80.88 \n242.53 \nMar\n74.35 \n110.30 \n81.46 \n166.96 \nApr\n74.48 \n105.75 \n86.96 \n167.31 \nMay\n77.86 \n107.41 \n83.61 \n168.27 \nJun\n76.33 \n103.85 \n92.64 \n167.80 \nJul\n77.82 \n103.56 \n94.80 \n166.24 \nAug\n77.63 \n102.79 \n93.18 \n166.18 \nSep\n76.49 \n100.20 \n92.69 \n166.00 \nOct\n71.72 \n102.10 \n92.43 \n167.77 \nNov\n70.15 \n101.53 \n93.15 \n166.18 \nDec\n69.02 \n101.71 \n93.77 \n164.47 \n2024\nJan\n70.18 \n100.81 \n95.24 \n164.86 \nFeb\n76.06 \n99.20 \n93.76 \n166.71 \nMar\n73.43 \n98.46 \n91.40 \n165.42 \n*Apr\n25.91 \n32.10 \n24.29 \n32.52 \n*May\n25.17 \n31.72 \n24.52 \n32.65 \n*Jun\n24.89 \n31.19 \n24.46 \n33.04 \n*Jul\n24.69 \n30.62 \n24.44 \n32.21 \n*Aug\n24.42 \n30.51 \n24.15 \n32.43 \n*Sep\n24.27 \n30.31 \n23.92 \n32.76 \n*Oct\n38.49 \n45.17 \n36.80 \n45.43 \n*Nov\n39.25 \n45.63 \n34.29 \n43.88 \n*Dec\n41.03 \n46.47 \n39.91 \n45.64 \n2025\n*Jan\n41.82 \n47.35 \n40.13 \n46.08 \n*Feb\n43.00 \n48.60 \n40.45 \n45.68 \n Source: Reserve Bank of Zimbabwe, 2025\nTABLE 8.1: COMMERCIAL BANKS LENDING RATES (percent per annum)\n* ZiG weighted lending rates\nIndividuals \nCorporates\nEnd of\nWeighted Lending Rates\n \n \n24 \n \n \n \n2022\nJan\n3.66\n5.76\n13.16\n16.95\nFeb\n3.72\n6.29\n16.68\n16.84\nMar\n3.83\n5.94\n14.83\n16.95\nApr\n4.22\n6.35\n16.78\n18.53\nMay\n4.21\n6.35\n16.44\n18.42\nJun\n4.21\n6.35\n16.61\n19.05\nJul\n21.06\n23.44\n50.14\n54.58\nAug\n20.09\n20.25\n52.97\n57.29\nSep\n20.09\n20.25\n57.25\n61.08\nOct\n20.09\n20.25\n54.06\n60.55\nNov\n20.38\n20.53\n56.69\n60.87\nDec\n18.03\n18.03\n55.32\n60.08\n2023\nJan\n18.03\n18.03\n55.32\n60.08\nFeb\n18.03\n18.03\n55.32\n60.08\nMar\n34.01\n35.26\n68.06\n73.39\nApr\n36.00\n36.50\n63.06\n71.72\nMay\n35.33\n35.88\n61.31\n69.61\nJun\n35.33\n33.60\n59.18\n65.00\nJul\n34.29\n35.29\n61.67\n69.44\nAug\n34.29\n35.60\n57.67\n70.35\nSep\n34.29\n35.60\n61.67\n69.33\nOct\n34.29\n35.60\n61.67\n70.35\nNov\n35.00\n38.27\n60.81\n69.76\nDec\n34.38\n37.13\n57.94\n65.65\n2024\nJan\n33.75\n37.13\n56.06\n65.65\nFeb\n33.75\n37.13\n56.06\n65.65\nMar\n33.75\n37.13\n56.28\n64.78\n*Apr\n5.22\n5.34\n5.51\n6.04\n*May\n3.75\n3.88\n5.26\n5.78\n*Jun\n3.75\n3.88\n5.27\n5.94\n*Jul\n3.75\n3.88\n5.26\n5.83\n*Aug\n3.75\n3.88\n5.27\n5.89\n*Sep\n3.75\n3.88\n5.27\n5.94\n*Oct\n3.75\n3.88\n5.41\n7.19\n*Nov\n3.75\n3.88\n4.82\n6.19\n*Dec\n3.54\n3.38\n5.67\n8.15\n2025\n*Jan\n3.54\n3.38\n5.67\n8.15\n*Feb\n3.81\n4.14\n5.95\n8.87\n Source: Reserve Bank of Zimbabwe, 2025\n* Deposit rates depict the range of rates qouted by banks. \n* ZiG deposit rates\nSAVINGS\n3 MONTHS\nTABLE 8.2 : COMMERCIAL BANKS DEPOSIT RATES (percent per annum)\n \n \n25 \n \n \n \nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2022\nJan\n1.08\n0.64\n2.14\n0.42\n0.71\n0.43\n1.51\n12.08\n0.94\n1.90\n0.11\n1.68\n2.53\n1.90\nFeb\n1.82\n3.39\n1.89\n1.79\n0.68\n1.08\n0.60\n0.92\n0.35\n1.39\n1.69\n1.76\n3.43\n2.20\nMar\n2.59\n2.24\n0.77\n1.22\n0.96\n5.86\n2.27\n0.82\n0.15\n1.02\n-0.06\n1.67\n3.05\n2.04\nApr\n3.38\n1.68\n14.21\n5.59\n1.77\n1.93\n1.73\n1.76\n2.91\n6.05\n1.87\n7.17\n6.94\n7.11\nMay\n3.70\n8.73\n2.02\n1.21\n2.46\n3.36\n2.47\n2.06\n0.48\n3.33\n3.78\n3.12\n9.56\n4.85\nJun\n8.20\n7.94\n12.49\n10.84\n13.72\n5.65\n4.95\n6.63\n4.63\n5.35\n9.86\n9.85\n17.32\n11.95\nJul\n4.57\n1.91\n8.66\n5.87\n3.74\n2.16\n1.21\n2.64\n11.86\n2.00\n2.15\n5.88\n12.09\n7.71\nAug\n3.71\n2.47\n2.01\n1.44\n1.98\n1.59\n1.91\n1.12\n0.41\n1.21\n2.93\n2.02\n4.94\n2.91\nSep\n-2.39\n-1.80\n5.21\n-3.33\n-0.66\n-1.20\n10.12\n0.36\n8.21\n-1.80\n-1.68\n1.99\n-3.23\n0.36\nOct\n0.81\n1.31\n6.74\n1.83\n0.72\n0.88\n2.83\n1.21\n0.10\n0.72\n0.68\n3.29\n2.10\n2.93\nNov\n-0.23\n0.35\n0.34\n0.60\n0.85\n0.25\n4.30\n0.48\n16.78\n19.32\n0.85\n1.71\n0.23\n1.27\nDec\n0.39\n0.76\n0.20\n-0.24\n0.03\n-0.15\n3.91\n-0.10\n0.00\n0.73\n-0.23\n0.28\n1.55\n0.66\n2023\nJan\n0.17\n-0.62\n0.81\n0.34\n0.26\n0.45\n-2.36\n0.45\n0.06\n-0.58\n0.54\n0.33\n-0.77\n0.00\nFeb\n-3.59\n-1.56\n-3.56\n-1.27\n-1.02\n-4.40\n-1.81\n-2.19\n0.06\n-3.63\n-7.55\n-3.40\n-4.54\n-3.73\nMar\n-0.57\n-0.46\n-0.01\n-0.71\n-0.10\n-0.13\n0.44\n-0.24\n0.16\n-0.16\n-0.42\n-0.18\n-0.66\n-0.32\nApr\n1.05\n0.05\n2.79\n-0.18\n0.92\n0.18\n0.59\n0.43\n0.53\n0.35\n0.55\n1.36\n1.96\n1.54\nMay\n3.05\n0.34\n3.03\n-0.08\n2.87\n1.74\n6.10\n1.65\n1.19\n0.99\n2.35\n2.34\n3.37\n2.64\nJun\n11.74\n0.93\n14.88\n-0.85\n9.19\n5.27\n23.88\n5.15\n3.07\n3.15\n6.58\n9.53\n18.23\n12.10\nJul\n1.68\n0.51\n0.36\n0.56\n-0.34\n0.69\n0.68\n-0.11\n1.04\n2.82\n1.11\n0.65\n1.85\n1.03\nAug\n-1.11\n-0.11\n-2.00\n-0.19\n-0.02\n-0.02\n-0.61\n-0.53\n-0.45\n-0.40\n-1.37\n-1.12\n-1.83\n-1.34\nSep\n0.32\n0.04\n0.34\n0.30\n-0.38\n0.63\n5.77\n-0.21\n5.97\n-0.10\n0.91\n0.91\n1.05\n0.95\nOct\n1.91\n1.10\n4.96\n0.54\n1.89\n2.81\n-2.69\n0.43\n-4.21\n0.53\n2.43\n2.48\n2.42\n2.46\nNov\n1.94\n0.60\n8.93\n-0.36\n2.45\n1.30\n3.24\n0.79\n4.28\n-0.67\n1.07\n4.39\n4.89\n4.54\nDec\n3.49\n1.41\n5.40\n0.63\n0.55\n0.86\n0.71\n1.92\n0.22\n1.07\n1.95\n2.90\n8.64\n4.70\n2024\nJan\n2.65\n-2.53\n5.48\n-1.30\n-3.17\n11.61\n-8.22\n-3.90\n5.52\n0.78\n-3.36\n2.50\n15.01\n6.58\nFeb\n3.31\n0.26\n4.84\n0.64\n2.77\n2.47\n8.40\n2.25\n1.67\n1.15\n3.35\n2.98\n9.83\n5.39\nMar\n2.48\n0.76\n4.89\n0.62\n2.44\n2.39\n10.08\n2.14\n2.02\n1.75\n2.85\n2.48\n8.13\n4.89\nApr\n1.35\n0.66\n3.69\n0.28\n0.77\n1.01\n2.60\n0.18\n6.85\n-0.26\n0.87\n4.19\n4.19\n2.94\n*May\n-6.05\n-1.36\n0.54\n-3.09\n-1.14\n-0.73\n0.65\n-2.60\n0.00\n-0.90\n-2.82\n-0.99\n-5.55\n-2.42\n*Jun\n-0.48\n0.82\n0.08\n0.21\n0.44\n0.84\n0.33\n-0.03\n0.17\n0.04\n0.21\n0.22\n-0.38\n0.04\n*Jul\n0.57\n0.89\n0.38\n-0.11\n0.45\n-0.45\n-2.41\n0.06\n0.37\n0.22\n0.09\n0.14\n-0.73\n-0.13\n*Aug\n2.31\n1.57\n0.20\n2.07\n1.19\n2.72\n-0.06\n1.41\n0.49\n1.24\n2.11\n1.14\n2.15\n1.44\n*Sep\n11.10\n3.65\n1.14\n6.71\n4.01\n5.70\n2.87\n6.26\n0.86\n4.45\n7.46\n3.89\n10.15\n5.78\n*Oct\n55.63\n44.94\n16.79\n39.81\n50.55\n38.72\n42.19\n49.16\n3.69\n30.79\n54.02\n31.75\n49.25\n37.25\n*Nov\n15.83\n15.10\n2.30\n15.16\n15.13\n13.80\n6.82\n17.47\n4.67\n10.69\n14.76\n9.67\n15.66\n11.72\n*Dec\n4.07\n6.71\n1.49\n3.19\n3.69\n3.57\n3.29\n2.46\n6.03\n3.61\n3.52\n3.19\n4.56\n3.67\n2025\n*Jan\n6.85\n4.51\n2.80\n30.66\n7.15\n3.96\n1.81\n7.91\n1.54\n0.00\n2.41\n5.75\n6.85\n10.50\n*Feb\n-0.32\n0.58\n0.22\n0.81\n0.93\n0.46\n0.57\n0.42\n1.25\n0.80\n-0.63\n0.27\n0.82\n0.46\nSource: Zimstat, 2025\n*Statistics are in ZiG\nALCOHOLIC \nBEVERAGES & \nTOBACCO\nFURNITURE AND \nEQUIPMENT\nHEALTH\nTRANSPORT\nCOMMUNICATION\nFOOD & NON \nALCOHOLIC \nBEVERAGES\nALL \nITEMS\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & OTHER \nFUELS\nCLOTHING & \nFOOTWEAR\nRECREATION & \nCULTURE\nRESTAURANTS & \nHOTELS\nEDUCATION\nMISC. GOODS & \nSERVICES\nTOTAL NON \nFOOD\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n \n \n26 \n \n \n \nFOOD \nINFLATION\nWEIGHTS\n4,90\n4,35\n27,62\n5,29\n1,42\n8,39\n2,65\n2,27\n4,25\n1,08\n6,46\n68,70\n31,30\n100\n2021\nJan\n20,60\n-2,07\n36,36\n-1,28\n10,32\n-3,60\n128,10\n-5,01\n-21,25\n-30,63\n-23,35\n12,89\n17,44\n14,03\nFeb\n39,34\n9,50\n38,02\n12,01\n25,35\n8,60\n82,62\n14,90\n-32,54\n-21,66\n-17,59\n18,72\n29,84\n21,45\nMar\n14,17\n6,58\n29,52\n3,24\n5,87\n19,12\n92,07\n6,36\n6,81\n-2,73\n-7,44\n18,40\n22,51\n19,45\nApr\n14,30\n5,98\n30,11\n3,19\n6,13\n19,96\n93,18\n5,32\n25,12\n-1,35\n-10,56\n19,42\n22,82\n20,29\nMay\n15,83\n14,44\n20,88\n4,68\n16,10\n25,82\n102,08\n55,83\n36,63\n-3,32\n-9,20\n20,10\n22,47\n20,70\nJun\n12,75\n14,64\n22,39\n15,03\n9,18\n12,04\n70,11\n42,04\n30,41\n4,24\n-7,69\n19,04\n28,60\n21,31\nJul\n6,39\n11,64\n23,80\n10,15\n3,85\n6,95\n52,67\n52,59\n39,02\n13,15\n8,80\n18,71\n15,01\n17,76\nAug\n13,21\n12,09\n24,34\n11,12\n5,35\n6,76\n15,74\n59,33\n35,23\n16,34\n4,54\n18,18\n18,05\n18,15\nSep\n14,96\n12,70\n25,60\n16,41\n6,74\n12,34\n14,92\n60,58\n36,28\n21,35\n9,67\n20,76\n21,15\n20,86\nOct\n17,72\n16,64\n21,34\n23,27\n7,60\n13,62\n22,43\n60,80\n38,87\n20,39\n10,27\n21,05\n24,80\n21,99\nNov\n16,80\n14,54\n22,11\n24,82\n6,57\n13,72\n27,83\n60,49\n15,38\n17,92\n11,34\n20,15\n24,28\n21,19\nDec\n17,38\n12,07\n20,56\n24,61\n6,62\n10,09\n28,48\n61,86\n16,79\n14,71\n12,21\n19,00\n21,96\n19,76\n2022\nJan\n15,38\n11,03\n21,29\n20,02\n4,81\n7,80\n28,71\n82,72\n15,93\n17,46\n8,22\n18,46\n21,56\n19,26\nFeb\n16,00\n15,14\n25,74\n22,76\n3,87\n7,80\n31,58\n66,63\n18,83\n20,23\n9,44\n20,73\n23,23\n21,38\nMar\n18,84\n17,81\n25,15\n19,07\n7,41\n13,39\n28,67\n68,48\n18,98\n20,57\n9,57\n21,54\n26,32\n22,80\nApr\n22,71\n20,48\n42,29\n25,78\n9,04\n14,77\n30,15\n73,15\n4,52\n26,09\n15,50\n29,14\n34,75\n30,60\nMay\n26,46\n27,91\n43,15\n26,23\n11,74\n17,68\n33,27\n24,17\n3,66\n27,29\n19,09\n30,37\n47,22\n34,70\nJun\n34,62\n32,92\n47,25\n30,78\n25,21\n23,62\n38,51\n30,74\n3,41\n30,29\n28,37\n36,30\n68,72\n44,47\nJul\n38,99\n33,16\n59,19\n38,55\n30,80\n25,88\n40,04\n33,42\n15,74\n32,91\n29,63\n43,58\n89,00\n54,99\nAug\n41,70\n35,49\n60,73\n39,17\n31,89\n26,54\n37,81\n34,54\n16,27\n31,74\n31,34\n44,88\n96,89\n57,92\nSep\n35,93\n32,94\n66,48\n32,64\n30,19\n25,02\n45,99\n33,85\n26,81\n27,66\n27,17\n45,91\n86,25\n56,09\nOct\n35,00\n33,64\n76,23\n32,71\n30,19\n24,29\n39,72\n34,98\n24,31\n26,52\n26,89\n48,43\n83,72\n57,47\nNov\n33,55\n33,65\n74,26\n32,03\n30,42\n23,10\n39,54\n35,12\n55,96\n48,48\n26,56\n49,54\n78,43\n57,06\nDec\n30,92\n33,36\n72,02\n30,01\n29,63\n23,87\n44,62\n33,64\n55,91\n47,88\n23,73\n48,22\n77,66\n55,93\n2023\nJan\n29,74\n31,69\n69,78\n29,91\n29,05\n23,89\n39,11\n19,78\n54,56\n44,29\n24,25\n46,26\n71,94\n53,03\nFeb\n22,86\n25,38\n60,69\n26,01\n26,87\n23,89\n35,79\n16,09\n54,11\n37,14\n12,96\n38,85\n58,69\n44,14\nMar\n19,07\n22,07\n59,46\n23,60\n25,55\n23,89\n33,36\n14,86\n54,13\n35,54\n12,56\n36,31\n52,99\n40,80\nApr\n16,38\n20,11\n43,52\n16,85\n24,51\n23,89\n31,87\n13,36\n50,56\n28,25\n11,10\n28,93\n45,87\n33,48\nMay\n15,66\n10,84\n44,93\n15,37\n25,01\n23,89\n36,54\n12,90\n51,63\n25,34\n9,57\n27,96\n37,63\n30,68\nJun\n19,45\n3,65\n48,01\n3,20\n20,03\n23,89\n61,17\n11,33\n49,36\n22,73\n6,31\n27,58\n38,70\n30,85\nJul\n16,14\n2,22\n36,71\n-1,98\n15,30\n23,89\n60,33\n8,34\n34,91\n23,72\n5,22\n21,28\n26,03\n22,74\nAug\n10,74\n-0,36\n31,33\n-3,54\n13,04\n23,89\n56,36\n6,57\n33,75\n21,75\n0,82\n17,55\n17,90\n17,66\nSep\n13,82\n1,52\n25,26\n0,08\n13,36\n23,89\n50,18\n5,97\n30,99\n23,86\n3,48\n16,31\n23,12\n18,36\nOct\n15,06\n1,31\n23,16\n-1,20\n14,66\n7,28\n42,11\n5,15\n25,35\n23,64\n5,28\n15,40\n23,50\n17,82\nNov\n17,55\n1,56\n33,71\n-2,14\n16,48\n8,40\n40,66\n5,48\n11,94\n2,93\n5,52\n18,43\n29,24\n21,63\nDec\n21,19\n2,22\n40,65\n-1,28\n17,09\n9,49\n36,33\n7,61\n12,19\n3,27\n7,82\n21,52\n38,26\n26,52\n2024\nJan\n24,18\n0,25\n47,17\n-2,90\n13,08\n21,65\n28,14\n2,95\n18,31\n4,68\n3,64\n24,16\n60,25\n34,84\nFeb\n33,06\n2,10\n59,99\n-1,02\n17,41\n30,39\n41,46\n7,62\n20,22\n9,87\n15,86\n32,35\n84,37\n47,62\nMar\n37,15\n3,35\n67,82\n0,31\n20,39\n33,68\n55,04\n10,19\n22,44\n11,97\n19,67\n36,58\n100,68\n55,34\nApr\n37,55\n3,98\n69,28\n0,77\n20,20\n34,79\n58,13\n9,93\n30,14\n11,30\n20,06\n42,42\n105,07\n57,48\nSource: Zimstat, 2024\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nNON-FOOD INFLATION\nHEALTH\nTRANSPORT\nCOMMUNICATION\nEDUCATION\nALCOHOLIC \nBEVERAGES \n& TOBACCO \nCLOTHING \n& \nFOOTWEAR\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & \nOTHER FUELS\nFURNITURE \nAND \nEQUIPMENT\nRECREATION \n& CULTURE\nRESTAURANTS \n& HOTELS\nMISC. \nGOODS & \nSERVICES\nTOTAL NON \nFOOD\nFOOD & NON \nALCOHOLIC \nCEVERAGES \nALL ITEMS\n \n \n27 \n \n \n \n \n2022\nJan\n115.422\n7.4069\n9.8109\n0.9995\n128.8401\n154.8332\nFeb\n124.019\n8.0738\n10.7214\n1.0732\n138.2625\n165.6148\nMar\n142.424\n9.8091\n12.4763\n1.1665\n159.0161\n186.8670\nApr\n159.348\n10.0334\n13.1064\n1.2217\n167.9530\n199.4880\nMay\n290.888\n18.7787\n24.3182\n2.2757\n312.8351\n367.1438\nJun\n366.269\n22.5194\n29.7593\n2.6861\n382.8607\n444.3572\nJul\n416.289\n25.2673\n33.2407\n3.1299\n425.1560\n507.7061\nAug\n546.825\n32.3336\n42.8164\n3.9498\n548.9033\n638.9381\nSep\n621.532\n34.5376\n46.4284\n4.2999\n609.9716\n691.9517\nOct\n632.137\n34.7014\n47.2839\n4.2742\n628.8500\n732.8998\nNov\n654.865\n38.5947\n51.0140\n4.7279\n677.5889\n784.3319\nDec\n671.447\n39.5836\n52.6414\n5.0669\n715.4935\n809.2610\n2023\nJan\n796.522\n45.7487\n61.8897\n6.1132\n863.6683\n983.1863\nFeb\n889.133\n48.1898\n66.7294\n6.5202\n941.1468\n1070.6489\nMar\n929.862\n52.0727\n71.3204\n6.9912\n1013.3634\n1151.6803\nApr\n1047.445\n57.1437\n79.4723\n7.7646\n1151.0384\n1309.3061\nMay\n2577.056\n130.3252\n186.5789\n18.4901\n2755.1310\n3192.3286\nJun\n5739.000\n306.2597\n425.5469\n39.6710\n6240.5886\n7250.9396\nJul\n4516.803\n255.8972\n346.4388\n31.8342\n4971.8704\n5801.8328\nAug\n4608.107\n246.2293\n343.3039\n31.5721\n5031.5916\n5860.1292\nSep\n5466.747\n288.5390\n396.3391\n36.6073\n5782.7246\n6680.6377\nOct\n5698.961\n301.1746\n417.7338\n37.9539\n6039.7584\n6920.5328\nNov\n5791.080\n309.3526\n429.6053\n39.3710\n6363.8242\n7330.4810\nDec\n6104.723\n329.1177\n455.4123\n43.1811\n6753.9598\n7783.5213\n2024\nJan\n10152.393\n555.5556\n745.3522\n65.3595\n10985.0050\n12870.8909\nFeb\n14912.829\n769.2308\n1082.9160\n99.0099\n16156.7220\n18886.3930\nMar\n22055.474\n1165.3008\n1610.0496\n145.7394\n23872.8448\n27868.1939\n*Apr\n13.4301\n0.7185\n0.9542\n0.0857\n14.3722\n16.8366\n*May\n13.3177\n0.7089\n0.9762\n0.0850\n14.4098\n16.9421\n*Jun\n13.7031\n0.7414\n1.0065\n0.0851\n14.6500\n17.3056\n*Jul\n13.7446\n0.7532\n1.0141\n0.0870\n14.9010\n17.6623\n*Aug\n13.7998\n0.7653\n1.0283\n0.0944\n15.2106\n17.8698\n*Sep\n14.9588\n0.8491\n1.1308\n0.1046\n16.6101\n19.7600\n*Oct\n26.7752\n1.5243\n2.0166\n0.1790\n29.1961\n34.9654\n*Nov\n25.7613\n1.4365\n1.9056\n0.1676\n27.3826\n32.8510\n*Dec\n25.6843\n1.4166\n1.8831\n0.1678\n26.9255\n32.5120\n2025\n*Jan\n26.1493\n1.3956\n1.8772\n0.1670\n27.0736\n32.3011\n*Feb\n26.7654\n0.6835\n1.9622\n0.1795\n29.0177\n34.6893\nSource: Reserve Bank of Zimbabwe, 2025\n.\n TABLE 10 : SELECTED INTERNATIONAL EXCHANGE RATES\n*The Reserve Bank introduced a new currency ZiG on 5 April \n& recalibrated exchange rates to ZiG\nEND OF\nUSA DOLLAR\nSOUTH ARFICAN \nRAND\nBOTSWANA PULA\nJAPANESE YEN\nEURO\nPOUND \nSTERLING\n \n \n28 \n \n \n \nMarket Capitalisation\nAll Share Index*\nZWG millions\n2022\nJan\n12079.74\n8196.79\n3704.23\n82,402,101\n1,475,217.45\nFeb\n14990.42\n9300.03\n7979.35\n156,327,700\n1,863,028.60\nMar\n15858.92\n11289.34\n8186.00\n117,815,800\n1,964,738.42\nApr\n28391.75\n30527.28\n11366.89\n193,411,483\n3,547,347.52\nMay\n23072.46\n20021.24\n8211.45\n195,475,400\n2,893,011.70\nJune\n19791.94\n20021.24\n14570.16\n271,227,100\n2,439,165.45\nJuly\n16594.91\n20021.24\n23673.34\n239,937,180\n2,068,222.01\nAug\n13705.12\n15473.37\n8674.85\n139,225,500\n1,685,592.28\nSept\n14771.65\n18929.75\n5128.54\n137,092,750\n1,819,157.07\nOct\n15072.14\n23659.53\n8657.90\n201,566,548\n1,826,101.68\nNov\n14577.46\n25478.67\n7680.78\n90,311,600\n1,610,203.36\nDec\n19493.85\n25487.77\n27753.79\n472,926,200\n2,044,869.14\n2023\nJan\n22813.24\n25496.86\n11638.16\n102,792,200\n2,460,037.66\nFeb\n28548.02\n29207.92\n24410.54\n164,006,458\n2,576,324.76\nMar\n38568.48\n37359.78\n14262.67\n97,920,600\n3,381,456.06\nApr\n41391.62\n36393.55\n16756.85\n74,505,000\n3,482,408.54\nMay\n108195.29\n52765.85\n34867.41\n206,593,600\n8,939,058.47\nJun\n171408.90\n76960.49\n85279.40\n192,473,571\n13,987,476.83\nJul\n114746.13\n89512.59\n40846.72\n176,547,600\n9,171,346.28\nAug\n125134.79\n109159.36\n39214.53\n103,854,600\n9,723,577.74\nSep\n126642.42\n125531.67\n91310.72\n343,359,119\n9,873,493.87\nOct\n157083.06\n125531.67\n31773.08\n64,000,500\n12,576,665.45\nNov\n191271.68\n148883.44\n54864.31\n162,675,500\n15,311,628.01\nDec\n210833.92\n145542.27\n109727.94\n254,991,213\n16,812,914.36\n2024\nJan\n542743.66\n163733.73\n112532.73\n79,766,490\n43,459,150.79\nFeb\n525570.76\n216534.42\n103474.44\n73,940,200\n41,499,016.93\nMar\n873263.38\n218308.09\n123025.50\n54,297,600\n49,235,325.40\n*Apr\n98.82\n114.07\n22,304,969\n21,943,400\n28,571.12\n*May\n101.07\n114.07\n75,913,056\n58,831,200\n29,394.99\n*Jun\n128.64\n114.16\n99,811,029\n182,514,300\n38,710.43\n*Jul\n198.14\n253.49\n260,505,803\n93,603,100\n60,570.91\n*Aug\n200.49\n253.42\n164,625,191\n118,159,000\n61,448.73\n*Sep \n243.41\n251.68\n273,853,848\n257,091,400\n74,489.51\n*Oct\n289.12\n251.68\n502,844,478\n107,115,500\n89,605.28\n*Nov\n265.10\n235.38\n285,159,922\n72,864,500\n82,184.61\n*Dec\n217.58\n235.38\n225,234,022\n152,111,200\n66,241.20\n2025\n*Jan\n195.57\n229.61\n196,982,719\n187,781,200\n58,794.86\n*Feb\n204.06\n193.56\n506,135,991\n197,200,800\n62,060.95\nSource: Zimbabwe Stock Exchange, 2025\n**As at 26 June 2020\n***The ZSE rebased indices to 100 in April 2024 following the introduction of the ZiG\n*Statistics are denominated in ZiG\nTABLE 11: ZIMBABWE STOCK MARKET STATISTICS\nMining Index\n Market Turnover \nZWG \nVolume of Shares\nEND OF\n*All Share index was introduced in January, 2018\n \n \n29 \n \n \n \nJan-22\n802677.72\n5074.74\n55961.62\n61278.06\n180171.62\nFeb-22\n672722.97\n5607.02\n59581.58\n66681.80\n199733.77\nMar-22\n961452.00\n7896.85\n75050.75\n82886.94\n342168.72\nApr-22\n976617.19\n8391.54\n89192.57\n89671.98\n293204.61\nMay-22\n1205990.19\n13712.78\n110807.31\n106881.76\n469185.15\nJun-22\n1601225.31\n18810.59\n134550.97\n123721.28\n618347.53\nJul-22\n1754111.97\n20420.81\n170480.64\n172562.48\n713401.10\nAug-22\n2334295.00\n31418.59\n152343.37\n178188.87\n826377.12\nSep-22\n2793056.56\n35136.14\n177701.71\n202368.06\n872807.43\nOct-22\n2728731.31\n50202.30\n186478.88\n209757.95\n622412.78\nNov-22\n3370779.94\n61086.72\n202876.16\n213295.28\n734610.61\nDec-22\n3310814.92\n76872.04\n246783.64\n249516.43\n1106346.46\nJan-23\n3289379.32\n68386.68\n240010.34\n238455.31\n1107756.41\nFeb-23\n3050933.28\n73672.28\n219437.84\n245282.55\n1202998.52\nMar-23\n3802044.70\n85343.38\n308609.08\n328822.35\n1517972.57\nApr-23\n1594.52\n31.92\n136.70\n142.08\n602.92\nMay-23\n2511.41\n69.30\n207.44\n212.94\n1310.66\nJun-23\n6827.35\n246.20\n353.13\n484.44\n2657.61\nJul-23\n7147.48\n216.69\n413.75\n648.43\n2432.26\nAug-23\n7186.01\n260.06\n407.40\n576.51\n2499.18\nSep-23\n7479.85\n309.50\n488.94\n669.40\n3100.02\nOct-23\n7927.50\n330.84\n506.09\n786.08\n3466.43\nNov-23\n9478.96\n360.79\n572.00\n800.04\n3824.87\nDec-23\n10563.88\n437.30\n722.39\n1042.16\n4062.32\nJan-24\n11319.52\n740.84\n763.33\n1637.95\n8812.40\nFeb-24\n15550.15\n1072.17\n1143.47\n2212.81\n11832.98\nMar-24\n24178.03\n1786.80\n1575.64\n2219.12\n14944.99\nApr-24\n41317.54\n2797.06\n2063.05\n4767.70\n15996.48\nMay-24\n54378.56\n3355.39\n3335.65\n7058.05\n22545.40\nJun-24\n51046.38\n3230.95\n3281.73\n6470.44\n22040.12\nJul-24\n63526.12\n3646.28\n3956.03\n7361.68\n27328.40\nAug-24\n54975.89\n3937.26\n3973.72\n7555.92\n25760.62\nSep-24\n65045.55\n5331.36\n4685.63\n11940.58\n38798.22\nOct-24\n110385.82\n6836.32\n6900.07\n16082.35\n50983.09\nNov-24\n107345.13\n6940.40\n7074.56\n15645.29\n47876.36\nDec-24\n123594.82\n8665.18\n7954.46\n17068.54\n50613.24\nJan-25\n105337.90\n6858.89\n7252.43\n14579.45\n44760.80\nFeb-25\n92208.69\n6363.31\n5846.51\n14208.47\n43833.14\nSource: Reserve Bank of Zimbabwe, 2025\n1.Figures recorded before April 2024 are in ZWL$\n2.Figures recorded from April 2024 to date are in ZWG\nTABLE 12.1: ZETSS AND RETAIL PAYMENTS \nRTGS \nATM \nPOS \nMobile \nInternet\nEnd Of\nValue of Transactions (Miliions)\n \n \n30 \n \n \n \nJan-22\n957.90\n439.87\n14452.61\n85561.24\n1891.17\nFeb-22\n981.01\n433.68\n14197.00\n78870.33\n1882.48\nMar-22\n1242.33\n519.12\n15855.62\n87533.21\n2175.52\nApr-22\n1073.00\n457.99\n14895.38\n82673.39\n1937.64\nMay-22\n1213.54\n477.75\n15053.14\n80804.40\n2001.22\nJun-22\n1190.30\n474.16\n14340.04\n75631.66\n1705.09\nJul-22\n1115.80\n517.03\n15042.07\n88030.56\n1866.70\nAug-22\n1028.04\n489.08\n12916.51\n76957.81\n1623.75\nSep-22\n1084.61\n455.52\n13084.73\n71362.13\n2225.19\nOct-22\n969.32\n510.90\n12986.76\n67641.68\n1825.42\nNov-22\n1001.39\n499.89\n12324.09\n59151.51\n2430.24\nDec-22\n1013.61\n616.69\n14316.88\n60584.50\n2469.80\nJan-23\n918.88\n444.00\n11733.99\n48617.07\n1692.96\nFeb-23\n886.75\n479.91\n10301.47\n43326.51\n1895.81\nMar-23\n1092.60\n593.97\n13216.99\n50037.43\n1927.14\nApr-23\n907.55\n526.73\n14375.14\n47171.72\n1982.93\nMay-23\n1119.24\n576.68\n12808.69\n49143.18\n2233.62\nJun-23\n1050.21\n605.95\n10190.63\n45488.80\n1212.97\nJul-23\n942.67\n1777.10\n8226.82\n42648.82\n993.68\nAug-23\n888.00\n653.58\n8434.65\n44330.56\n977.54\nSep-23\n964.06\n703.55\n9658.95\n45148.73\n1061.36\nOct-23\n949.14\n618.97\n9449.30\n50632.71\n1037.56\nNov-23\n924.47\n623.29\n9525.69\n52332.44\n1048.51\nDec-23\n924.00\n776.49\n11845.97\n56450.97\n1026.21\nJan-24\n915.16\n708.08\n10017.89\n52444.26\n882.76\nFeb-24\n889.65\n737.54\n7868.69\n52987.62\n904.17\nMar-24\n941.14\n728.43\n7569.28\n59363.85\n921.38\nApr-24\n791.84\n744.79\n5729.47\n31813.12\n938.01\nMay-24\n1057.64\n899.38\n7950.08\n42290.80\n1690.28\nJun-24\n927.30\n849.61\n7224.24\n41224.15\n1155.79\nJul-24\n1059.13\n920.88\n8228.22\n44159.41\n1318.93\nAug-24\n974.38\n965.97\n8669.34\n47536.92\n1233.10\nSep-24\n1009.71\n860.54\n8371.33\n49927.24\n1408.88\nOct-24\n1020.11\n866.85\n8101.53\n53319.09\n1447.54\nNov-24\n868.41\n864.37\n7253.15\n51210.15\n1359.22\nDec-24\n931.58\n1071.61\n8017.72\n50767.85\n1541.29\nJan-25\n839.48\n911.06\n7381.34\n46337.89\n1363.63\nFeb-25\n815.47\n837.66\n6111.38\n44459.81\n1346.33\nSource: Reserve Bank of Zimbabwe, 2025\nTABLE 12.2 ZETTSS AND RETAIL PAYMENTS\nVolume of Transactions ('000's)\nInternet\nMobile \nPOS \nATM \nMONTH \nRTGS \n \n \n31 \n \n \n \nMonth-Year\nEXPORTS \nIMPORTS \nTOTAL TRADE\nTRADE BALANCE \nJan-23\n4276.93\n6337.62\n10614.55\n-2060.68\nFeb-23\n4358.70\n6234.39\n10593.09\n-1875.69\nMar-23\n5153.04\n7463.66\n12616.71\n-2310.62\nApr-23\n5555.48\n7084.18\n12639.66\n-1528.70\nMay-23\n6542.42\n8503.11\n15045.53\n-1960.69\nJun-23\n6414.81\n7273.06\n13687.87\n-858.26\nJul-23\n6032.32\n7794.98\n13827.30\n-1762.66\nAug-23\n6497.88\n8169.83\n14667.71\n-1671.95\nSep-23\n6781.03\n7730.52\n14511.55\n-949.49\nOct-23\n8318.67\n9013.21\n17331.88\n-694.55\nNov-23\n6812.85\n8273.27\n15086.13\n-1460.42\nDec-23\n5506.35\n8168.50\n13674.86\n-2662.15\nJan-24\n5408.98\n6942.02\n12351.01\n-1533.04\nFeb-24\n6450.15\n7296.92\n13747.06\n-846.77\nMar-24\n5346.93\n7204.81\n12551.74\n-1857.88\nApr-24\n5134.64\n7443.71\n12578.35\n-2309.08\nMay-24\n5830.07\n7460.38\n13290.45\n-1630.32\nJun-24\n5240.10\n7550.05\n12790.15\n-2309.95\nJul-24\n5482.83\n8283.26\n13766.09\n-2800.42\nAug-24\n6740.45\n8762.63\n15503.08\n-2022.18\nSep-24\n5749.74\n7848.66\n13598.40\n-2098.92\nOct-24\n6981.18\n8359.42\n15340.60\n-1378.25\nNov-24\n9052.31\n9523.18\n18575.50\n-470.87\nDec-24\n6924.02\n8897.45\n15821.48\n-1973.43\nJan-25\n6520.45\n7491.51\n14011.96\n-971.07\nFeb-25\n5125.87\n7302.84\n12428.71\n-2176.97\nSource: ZIMSTAT, 2025\nTABLE 13: MERCHANDISE TRADE STATISTICS\n(US$ Millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monthly_Economic_Reviews/Monthly_Economic_Review_February_2025.pdf"}
{"doc_id": "f0e2ed8e849e38b84b1ddc691405c4de", "text": "i \n \n \n \nJANUARY 2024 \n \n2 \nTABLE OF CONTENTS \n \nOVERVIEW .................................................................................................................................. 3 \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ........................................... 3 \nMERCHANDISE TRADE DEVELOPMENTS......................................................................... 5 \nMONETARY DEVELOPMENTS .............................................................................................. 7 \nSTOCK MARKET DEVELOPMENTS ..................................................................................... 8 \nZimbabwe Stock Exchange (ZSE) ........................................................................................... 8 \nVictoria Falls Stock Exchange (VFEX) ................................................................................... 9 \nNATIONAL PAYMENTS SYSTEM ........................................................................................ 10 \nZimbabwe Electronic Transfer Settlement System (ZETSS) ............................................. 10 \nMobile and Internet Based Transactions .............................................................................. 11 \nINFLATION OUTTURN ........................................................................................................... 11 \nAnnual Inflation ...................................................................................................................... 11 \nMonthly Inflation .................................................................................................................... 11 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3 \n \n OVERVIEW \nAnnual headline inflation rose to 34.8% in \nJanuary 2024 from 26.5% in December 2023. \nThis was attributable to the depreciation of the \nlocal currency against major currencies. \n \n \nOn a monthly basis, broad money increased by \n54.63% in January 2024, compared to 7.3% in \nthe previous month. The increase in broad \nmoney was largely attributable to valuation \nchanges arising from exchange rate movements \ncoupled with expansion in the quantum of \nforeign currency deposits. \n \n \nThe Zimbabwe Stock Exchange (ZSE) was \nbullish during the month of January 2024. The \nAll Share, Top 10, Top 15, Small Cap and \nMedium Cap indices rose by 157.43%, \n173.31%, 171.99%, 81.39% and 98.23%, \nrespectively. \n \nThe Victoria Falls Stock Exchange (VFEX) \ncontinued to trade in a positive trajectory in \nJanuary 2024. The All-Share index increased \nby 45.12% to close at 102.52 points, from 70.64 \npoints registered in December 2023. \n \n \nIn value terms, transactions processed through \nthe National Payment Systems (NPS) increased \nby 39% from ZW$42.05 trillion in December \n2023 to ZW$58.35 trillion in January 2024. \n \nNPS transactions volumes decreased by 9% to \n64.97 million in the reporting month from \n71.02 million in December 2023. \n \nOn the external front, export earnings for \nJanuary 2024 stood at US$540.3 million, up \n26.3% compared to US$427.7 million in \nJanuary 2023, driven by gold, PGM and \ntobacco exports. The country’s import bill for \nJanuary 2024 amounted to US$692.7 million, \nup from US$633.8 million recorded in January \n2023. \n \nAverage international prices of platinum, \npalladium, \ncopper, \nnickel, \nand \nlithium \ndeclined, while gold and crude oil prices \nregistered increases in January 2024. \n \nINTERNATIONAL COMMODITY PRICE \nDEVELOPMENTS \n \nDuring the month under review, platinum, \npalladium, copper, nickel and lithium prices \ndeclined. On the contrary, gold and crude oil \nprices registered increases during the same \nmonth. \n \nGold \nGold prices increased by 0.42%, from \nUS$2,026.06 per ounce reported in December \n2023 to close at US$2,034.61 per ounce in \nJanuary 2024. \n \nPlatinum \nPlatinum prices declined by 1.47%, from an \naverage of US$939.74 per ounce in December \n2023 to US$925.93 per ounce in January 2024. \nThe slowdown was largely attributable to \nstockpiles of the metal, especially in China. \n \nPalladium \nMonthly \naverage \nprices \nfor \npalladium \ncontinued in a negative trajectory, amid \nreduced demand for the metal. Palladium prices \nfell to US$979.52 per ounce in January from \n \n \n \n4 \n \nUS$1,003.49 per ounce recorded in December \n2023. The price developments for precious \nmetals for the period from January 2021 to \nJanuary 2024 are shown in Figure 1. \n \nFigure 1: Monthly Precious Metal Prices (in \nUS$ per Ounce): Jan 2021 – Jan 2024 \n \nSource: Bloomberg, 2024 \n \nBrent Crude Oil \nBrent crude oil prices rose by 1.75%, from a \nmonthly average of US$77.69 per barrel \nreported in December 2023 to US$79.05 per \nbarrel in January 2024. The increase was \nunderpinned by concerns over global energy \nsupply disruptions in several regions as \ngeopolitical tensions persist, coupled with \nproduction cuts by some OPEC countries. \nFigure 2 depicts the price developments of \nBrent crude oil prices for the period January \n2021 to January 2024. \n \n \n \n \n \n \n \n \nFigure 2: Brent Crude Oil Prices \n(US$/Barrel) Jan 2021 – Jan 2024\nSource: Bloomberg, 2024 \n \nCopper \nDuring the month under analysis, copper prices \ndecreased by 0.07%, from US$8,464.18 per \ntonne recorded in the prior month to \nUS$8,458.66 \nper \ntonne. \nCopper \nprices \ndeclined, following weak demand from China, \nwhich dampened bullish supply pressures. \n \nNickel \nNickel prices fell by 1.93%, from a monthly \naverage of US$16,674.25 per tonne recorded in \nDecember 2023 to US$16,352.41 per tonne, \nduring the month under analysis. Prices \nretreated due to the increases in global supplies \namid rising inventories in China. Figure 3 \nshows base metal price developments for the \nperiod January 2021 to January 2024. \n \n \n \n \n \n \n \n0\n200\n400\n600\n800\n1000\n1200\n1400\n800\n1,100\n1,400\n1,700\n2,000\n2,300\n2,600\n2,900\nJan-21\nApr-21\nJul-21\nOct-21\nJan-22\nApr-22\nJul-22\nOct-22\nJan-23\nApr-23\nJul-23\nOct-23\nJan-24\nUS$/ounce\nUS$/ounce\nGold\nPalladium\nPlatinum (RHS)\n0\n20\n40\n60\n80\n100\n120\n140\nJan-21\nApr-21\nJul-21\nOct-21\nJan-22\nApr-22\nJul-22\nOct-22\nJan-23\nApr-23\nJul-23\nOct-23\nJan-24\nUS$/barrel\n \n \n \n5 \n \nFigure 3: Base Metal Prices (US$/tonne): \nJan 2021 – Jan 2024 \nSource: Bloomberg, 2024 \n \n \nLithium \nLithium prices had a sharp decline of 14.82%, \nfrom US$17,200.12 per tonne in December \n2023 to US$14,650.454 per tonne in January \n2024. The decline in price was attributed to \nfalling electric vehicle sales in China. \n \nThe price developments for lithium for the \nperiod from February 2023 to January 2024 are \nshown in Figure 4. \n \nFigure 4: Lithium Prices (US$/tonne) \nFebruary 2023 – January 2024 \nSource: London Metal Exchange, 2024 \n \n \nMERCHANDISE TRADE DEVELOPMENTS \n \nTotal merchandise trade stood at US$1,233 \nmillion in January 2024, which was an increase \nof 28.8% from US$1,061.5 million, recorded in \nJanuary in 2023. \n \nMerchandise Exports \nThe country’s export earnings for January 2024 \nstood at US$540.3 million, which was 26.3% \nhigher than the January 2023 outturn of \nUS$427.7 \nmillion. \nFigure \n5 \nshows \ndevelopments in the country’s merchandise \nexports for the period from January 2023 to \nJanuary 2024. \n \nFigure 5: Merchandise Exports (US$ m): \n2023 and 2024 \n \nSource: ZIMSTAT, 2024 \n \nPrimary products, namely tobacco, gold, \nPGMs, and ferrochromium, remained the \ncountry's \nleading \nexport \ncommodities, \naccounting for 25.9%, 24.2%, 23.6%, and 4.5% \nof the export basket, respectively. Table 2 \nshows developments in the country’s exports \nfor the months of December 2023 and January \n2024. \n \n8,000\n13,000\n18,000\n23,000\n28,000\n33,000\n38,000\n4,500\n5,500\n6,500\n7,500\n8,500\n9,500\n10,500\n11,500\nJan-21\nMay-21\nSep-21\nJan-22\nMay-22\nSep-22\nJan-23\nMay-23\nSep-23\nJan-24\nUS$/tonne\nUS$/tonne\nCopper\nNickel (RHS)\n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nDec-23\nJan-24\nUS$/tonne\n427.7\n435.9\n515.3\n555.5\n654.2\n641.5\n603.2\n649.8\n678.1\n831.9\n681.3\n550.6\n540.3\n0.0\n200.0\n400.0\n600.0\n800.0\n1000.0\nJan\nFeb\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nOct\nNov\nDec\nMerchandise Exports (US$m)\n2023\n2024\n \n \n \n6 \n \nTable 1: Exports Classified by Harmonized \nCommodity Description and Code System \n \nDec-23 \n (US \n$m) \nJan-24 \n(US $m) \nDec-Jan \nChanges \n(%) \nShare of \nExports \n(%) Jan-24 \nTotal \n550.6 \n540.3 \n-1.9 \n100.0 \nOf Which: \n \n \n \n \nTobacco (Incl. \ncigarettes) \n111.1 \n139.9 \n25.9 \n25.9 \nGold \n158.3 \n130.9 \n-17.3 \n24.2 \nPGMs \n129.7 \n127.6 \n-1.6 \n23.6 \nFerrochromium \n30.5 \n24.5 \n-19.7 \n4.5 \nIndustrial \ndiamonds \n27.3 \n17.2 \n-37.0 \n3.2 \nCane sugar \n5.5 \n15.7 \n183.2 \n2.9 \nCoal \n9.4 \n9.2 \n-2.3 \n1.7 \nChromium ores \nand concentrates \n9.7 \n7.4 \n-24.5 \n1.4 \nCotton \n4.4 \n3.2 \n-27.8 \n0.6 \nElectricity \n1.0 \n1.3 \n26.7 \n0.2 \nSource: ZIMSTAT & RBZ Calculations, 2024 \n*PGMs \nInclude \nNickel mattes, \nnickel \nores \n& \nconcentrates and platinum \nDuring the month under analysis, the country’s \nexports were largely destined for South Africa \n(30%), the United Arab Emirates (25%) and \nChina (16.1%) The country’s exports to South \nAfrica were mainly constituted by minerals and \ntobacco. Exports to the United Arab Emirates \nwere primarily precious metals. Figure 6 shows \nthe country’s major export markets, during the \nreporting month. \nFigure 6: Top Ten Merchandise Export \nDestinations (% Share) \nSource: ZIMSTAT & RBZ Calculations, 2024 \nMerchandise Imports \nThe country’s import bill for January 2024 \namounted to US$692.7 million compared to \nUS$633.8 million recorded in January 2023, as \nshown in Figure 7. \nFigure 7: Merchandise Imports classified by \nHS Codes 2022 & 2023 (US$ m) \n \nSource: ZIMSTAT & RBZ Computations, 2023 \nThe country’s top imports were diesel, maize, \npetrol, and fertilisers, accounting for 10%, \n6.2%, 5.2% and 4.8% of total imports, \nrespectively. Table 3 shows imports of major \ncommodities for December 2023 and January \n2024. \n \nTable 3: Imports Classified by Harmonised \nCommodity Description and Code System \n \nDec-23 \n(US $m) \nJan-24 \n (US $m) \nDec-Jan \nChanges \n(%) \nShare of Total \n Imports (%) \nJan 24 \nTotal \n817.0 \n692.7 \n-15.2 \n100.0 \nOf Which: \n \n \n \n \nDiesel \n90.3 \n69.0 \n-23.6 \n10.0 \nMaize \n49.7 \n42.7 \n-13.9 \n6.2 \nLeaded petrol \n45.4 \n36.2 \n-20.1 \n5.2 \nFertilisers \n20.8 \n33.0 \n58.4 \n4.8 \nMachinery \n23.2 \n30.0 \n29.0 \n4.3 \nMedicaments \n16.9 \n18.7 \n11.2 \n2.7 \nCrude soya \nbean oil \n18.5 \n12.4 \n-32.8 \n1.8 \nElectricity \n11.8 \n11.0 \n-6.6 \n1.6 \nRice \n14.9 \n9.7 \n-34.8 \n1.4 \nPhotovoltaic \ncells \n1.0 \n8.4 \n726.8 \n1.2 \nSource: ZIMSTAT & RBZ Calculations, 2024 \n30.0\n25.0\n16.1\n9.6\n2.0\n1.9\n1.6\n1.5\n1.4\n0.7\n0.0\n10.0\n20.0\n30.0\n40.0\nSouth Africa\nUnited Arab Emirates\nChina\nMozambique\nZambia\nIndonesia\nBelgium\nViet Nam\nHong Kong\nUnited States\n633.8\n623.5\n746.4\n708.0\n850.3\n727.0\n781.6\n820.1\n771.1\n901.6\n825.9\n817.0\n692.7\n0\n200\n400\n600\n800\n1000\n2023\n2024\n \n \n \n7 \n \nDuring the month of January 2024, the \ncountry’s main import source markets were \nSouth Africa, which accounted for about 36% \nof total imports, followed by China and the \nBahamas at 16.4% and 4.8%, respectively. \nFigure 8 shows the country’s top import \nsources in January 2024. \n \nFigure 8: Top Ten Merchandise Import \nSources (% Share) \n \nSource: ZIMSTAT & RBZ Calculations, 2024 \nMerchandise Trade Balance \nThe country’s monthly net external trade \nposition narrowed from a deficit of US$266.4 \nmillion in December 2023 to a deficit of \nUS$152.4 million in January 2024. Figure 9 \nshows the country’s trade balance for the \nmonths of December 2023 and January 2024. \n \n \n \n \n \n \n \n \n \n \n \n \n1All monetary numbers are valued in ZW$ since the \nadoption of an interbank market determined exchange \nrate in February 2019. \nFigure 9: Merchandise Trade Balance (US$ m) \n \n Source: ZIMSTAT & RBZ Computations, 2024 \nMONETARY DEVELOPMENTS1 \n \nTotal broad money (M3) amounted to \nZW$29.25 trillion in January 2024, compared \nto ZW$18.91 trillion recorded in the previous \nmonth. \nThe money supply was composed of foreign \ncurrency deposits, 78.30%; local currency \ndeposits, 15.64%; and local currency in \ncirculation, 0.05%. \nFigure 10: Composition of Money Supply \nSource: Reserve Bank of Zimbabwe, 2024 \n36.0\n16.4\n4.8\n4.5\n4.0\n4.0\n3.6\n2.9\n2.7\n2.0\nSouth Africa\nChina\nBahamas\nBahrain\nMozambique\nUAE\nMauritius\nZambia\nSingapore\nSwitzerland\n550.6\n540.3\n817.0\n692.7\n-266.4\n-152.4\n-400.0\n-200.0\n0.0\n200.0\n400.0\n600.0\n800.0\n1000.0\nDec-23\nJan-24\nExports\nImports\nTrade Balance\nNCDs, \n0.03%\nLocal Currency \nTime , 1.27%\nFX Time \nDeposits, 4.71%\nLocal Currency \nTransferable , \n15.64%\nFX \nTransferable \nDeposits, \n78.30%\nCurrency in \nCirculation, \n0.05%\n \n \n \n8 \n \nOn a monthly basis, broad money increased by \n54.63% in January 2024, compared to 7.3% in \nDecember 2023. \nThe monthly increase in money supply \nreflected an expansion of 7.10% in the local \ncurrency component and 10.52% in the foreign \ncurrency component. \nCredit to the private sector, increased by \n56.33%, largely reflecting valuation changes \nowing to exchange rate depreciation. Over the \nsame period, net claims on the Government \nincreased by 59.38% \nOn a yearly basis, broad money increased by \n984.32% compared to 708.93% in December \n2023. The annual growth in money supply \nlargely reflected exchange rate depreciation, \nwhich moved from ZW$796.52/US$ in January \n2023 to ZW$10,153.39/US$ by end-January \n2024. Expansion in foreign currency deposits \naccounted for 833.9 percentage points of the \n984.32% annual growth in broad money. The \nlocal currency component of the money supply \ncontributed 150.41 percentage points of the \ntotal annual growth. \n \nOn the asset side, the annual increase in broad \nmoney largely reflected nominal changes in \ncredit to the private sector and net claims on the \nGovernment of 1,192.41% and 1,713.56%, \nrespectively. \n \nOutstanding credit to the private sector was \nmainly \nchannelled \nto \nhouseholds, \nmanufacturing, and agriculture which received \n25.96%, 16.49%, and 14.56% of the total \ncredit, \nrespectively. \nThe \nmining \nand \ndistribution sectors received 12.57% and \n10.94% of the total outstanding credit, \nrespectively. \nPrivate sector credit shares by economic sectors \nare shown in Figure 11. \n \nFigure 11: Distribution of Private Sector \nCredit \n \nSource: Reserve Bank of Zimbabwe, 2024 \n \nCredit to the private sector was largely utilized \nfor recurrent expenditures, 39.72%; inventory \nbuild-up, \n23.63%; \nand \nfixed \ncapital \ninvestments, 13.07%. \nSTOCK MARKET DEVELOPMENTS \nZimbabwe Stock Exchange (ZSE) \nThe ZSE was bullish during the month of \nJanuary 2024. Consequently, the All Share, \nTop 10, Top 15, Small Cap, and Medium Cap \nindices gained 157.43%, 173.31%, 171.99%, \n81.39% and 98.23% to close at 542 743.66 \npoints, 246 209.92 points, 331 602.19 points 9 \n947 030.87 points and 1 824 770.93 points, \nrespectively. \nThe mining index also gained 12.50% to close \nat 163 733.73 points compared to 145 542.27 \npoints, registered in December 2023. \nOn an annual basis, the All Share, Top 10, Top \n15, Small and Medium Cap indices added 2 \nHouseholds\n25.96%\nAgriculture\n14.56%\nMining\n12.57%\nManufacturing\n16.49%\nDistribution\n10.94%\nTransport and \nCommunication\n2.98%\nServices\n8.27%\nFinancial Organisations \nand Investiments\n5.76%\nConstruction\n1.74%\nOther\n0.73%\n \n \n \n9 \n \n279.07%, 1 681%, 2 035.76%, 1 896.25% and \n3 685.76%. This compares to 22 813.24 points, \n13 824.24 points, 15 526.17 points, 498 286.56 \npoints, and 48 200.90 points recorded in the \ncomparable period last year, respectively. \nThe mining index also added 542.17% from \n25 496.86 points recorded in January 2023. \nFigure 12: ZSE All Share, Top 10 and \nMining Indices \n \nSource: Zimbabwe Stock Exchange, 2024 \nDuring the month under review, trading \nactivity was concentrated on selected wealth-\npreserving counters. Consequently, cumulative \nvalues \nof \nshares \ntraded \namounted \nto \nZW$112.53 billion, reflecting an increase of \n2.56%, compared to ZW$109.73 billion, \nrecorded in the previous month. Similarly, \nturnover volume declined by 68.72% to 79.77 \nmillion shares, compared to 254.99 million \nshares traded in the prior month. \nThe proportion of foreign purchases to the \nvalue of shares traded improved to 2.02% from \n0.17% registered in December 2023. \nNet foreign position, however, stood at \nnegative ZW$5.37 billion, from negative \nZW$1.58 billion recorded in December 2023. \nFigure 13: ZSE Monthly Volume and Value \nTraded \n \nSource: Zimbabwe Stock Exchange, 2024 \nOwing to bullish sentiments at the ZSE, market \ncapitalization gained ZW$26 646.24 billion, or \n158.49% worth of capitalization to close at \nZW$43 459.15 billion. \n \nOn a year-on-year basis, ZSE capitalization \nadded 1 666.61%, from ZW$2 460.04 billion \nrecorded in January 2023. \n \nVictoria Falls Stock Exchange (VFEX) \nDuring the month of January 2024, the Victoria \nFalls Stock Exchange (VFEX) exhibited \nbullish sentiments. As such, the All-Share \nindex added 45.12% to close at 102.52 points, \nfrom 70.64 points recorded in December 2023. \n \nOn an annual basis, the VFEX All Share index \ndeclined by 7.73%, from 111.11 points \nrecorded in January 2023. \n \n \n \n \n \n4,000\n34,000\n64,000\n94,000\n124,000\n154,000\n184,000\n214,000\n244,000\n274,000\n10,000\n80,000\n150,000\n220,000\n290,000\n360,000\n430,000\n500,000\n570,000\n31-Jan-23\n28-Feb-23\n31-Mar-23\n30-Apr-23\n31-May-23\n30-Jun-23\n31-Jul-23\n31-Aug-23\n30-Sep-23\n31-Oct-23\n30-Nov-23\n31-Dec-23\n31-Jan-24\nAll Share Index\nTop 10 Index\nMining Index\n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n70,000\n80,000\n90,000\n100,000\n110,000\n120,000\n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nDec-23\nJan-24\nVALUE TRADED ($ MILLIONS)\nVOLUME TRADED (MILIONS)\nVolume\nValue\n \n \n \n10 \n \nFigure 14: Victoria Falls Stock Exchange \n(VFEX) All Share Index (ASI) \n \nSource: Victoria Falls Stock Exchange, 2024 \n \nVFEX Market Capitalization \nVFEX market capitalization increased by \n2.52% to US$1.24 billion, compared to \nUS$1.21 billion recorded in the previous \nmonth. This reflected an increase in demand for \nstocks on the USD-denominated market. \n \n \nFigure 15: Victoria Falls Stock Exchange \n(VFEX) Market Capitalization (US$ Billion) \n \nSource: Victoria Falls Stock Exchange (VFEX), 2024 \n \nNATIONAL PAYMENTS SYSTEM \n \nThe value of transactions processed through the \nNational Payment Systems (NPS) increased by \n39% from ZW$42.05 trillion in December \n2023 to close at ZW$58.35 trillion in January \n2024. \nNPS transactions volumes decreased by 9% to \nclose at 64.97 million in the reporting month \nfrom 71.02 million in the previous month. \n \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe value of transactions processed through the \nReal Time Gross Settlement (RTGS) system \nincreased by 7%, from ZW$26.40 trillion in the \nprevious month to close at ZW$28.29 trillion in \nJanuary 2023. \nThe volume of RTGS transactions decreased by \n1% to close at 915 thousand during the month \nunder review, from 924 thousand in December \n2023. \nFigure 16: ZETSS Volumes and Values \n \nSource: Reserve Bank of Zimbabwe, 2024 \n \n60\n65\n70\n75\n80\n85\n90\n95\n100\n105\n110\n115\n31-Jan-23\n28-Feb-23\n31-Mar-23\n30-Apr-23\n31-May-23\n30-Jun-23\n31-Jul-23\n31-Aug-23\n30-Sep-23\n31-Oct-23\n30-Nov-23\n31-Dec-23\n31-Jan-24\n0.00\n0.20\n0.40\n0.60\n0.80\n1.00\n1.20\n1.40\n1.60\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nDec-23\nJan-24\nUS$ Billions\n0\n4\n8\n12\n16\n20\n24\n28\n32\n0\n200\n400\n600\n800\n1,000\n1,200\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nDec-23\nJan-24\nValue in ZW$ Trillions\nVolume in Thousands\nVolume\nValue\n \n \n \n11 \n \nMobile and Internet Based Transactions \nMobile \nand \ninternet-based \ntransactions \namounted to ZW$26.31 trillion, during the \nmonth under analysis, representing an increase \nof 106.35% from ZW$12.75 trillion recorded in \nDecember 2023. \nCash Transactions \nCash based transactions amounted to ZW$4 \ntrillion in January 2024, from ZW$1.81 trillion \nin December 2023. \nCard Transactions \nCard based transactions were 29.45% higher to \nclose at ZW$3.75 trillion during the month \nunder review, compared to ZW$2.90 trillion \nrecorded in the previous month. \nINFLATION OUTTURN \n \nAnnual Inflation \nAnnual headline inflation rose to 34.8% in \nJanuary 2024 from 26.5% recorded in \nDecember 2023. This was attributable to the \ndepreciation of the local currency. \nMonthly Inflation \nThe month-on-month inflation rate increased to \n6.6% in January 2024, from 4.7% in December \n2023. Food inflation rose to 15% in January \n2024, from 8.6% in December 2023. \nMonthly non-food inflation was lower at 2.5% \nin January 2024, from 2.9% registered in the \nprevious month. \n \n \n \n \n \nFigure 17: Month-on-Month Inflation (%) \nSource: ZIMSTAT, 2024 \n \n \n \nRESERVE BANK OF ZIMBABWE \n-5.00\n-2.00\n1.00\n4.00\n7.00\n10.00\n13.00\n16.00\n19.00\nJan-22\nMar-22\nMay-22\nJul-22\nSep-22\nNov-22\nJan-23\nMar-23\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nFood and non alcoholic beverages\nNon food\nAll Items\n \n \n12 \nStatistical Tables \n \nMonetary Statistics \n 1. Depository Corporations Survey \n \n \n \n \n14 \n 2. Central Bank Survey \n \n \n \n \n \n \n15 \n \n3. Other Depository Corporations Survey \n \n \n \n \n16 \n Other Depository Corporations \n \n4.1 Assets \n \n \n \n \n \n \n \n17 \n 4.2 Liabilities \n \n \n \n \n \n \n \n \n18 \n Commercial Banks \n 5.1 Assets \n \n \n \n \n \n19 \n 5.2 Liabilities \n \n \n \n \n20 \n Building Societies \n 6.1 Assets \n \n \n \n \n \n \n \n21 \n 6.2 Liabilities \n \n \n \n \n \n \n22 \n Sectoral Analysis of Bank Loans and Advances and Deposits \n \n7.1 Sectoral Analysis of Commercial Banks Loans and Advances \n \n23 \n \n7.2 Sectoral Analysis of Commercial Banks Deposits \n \n \n \n24 \n Interest Rates \n \n8.1 Lending Rates \n \n \n \n \n \n \n \n25 \n \n8.2 Banks Deposit Rates \n \n \n \n \n \n \n26 \n \nInflation \n \n9.1 Monthly Inflation \n \n \n \n \n \n \n \n27 \n \n9.2 Yearly Inflation \n \n \n \n \n \n \n \n28 \nExternal Statistics \n 10. Exchange Rates \n \n \n \n \n \n \n \n29 \nZimbabwe Stock Exchange \n 11. Zimbabwe Stock Market Statistics \n \n \n \n \n \n30 \nNational Payments System Statistics \n \n \n \n \n \n13 \n \n \n12.1 Values of Transactions \n \n \n \n \n \n \n31 \n \n12.2 Volumes of Transactions \n \n \n \n \n \n32 \nTrade Statistics \n \n \n \n \n \n \n \n \n 13. Merchandise Trade Statistics \n \n \n \n \n \n33 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14 \n \nTABLE 1: DEPOSITORY CORPORATIONS SURVEY ($ '000)\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nDec-23\nJan-24\nNet Foreign Assets\n-2,748,857,529.85\n-2,951,073,126.64\n-3,006,324,492.94\n-3,566,322,365.73\n-8,582,225,834.40\n-16,963,911,301.47\n-14,214,106,707.82\n-14,227,506,302.78\n-16,447,478,675.26\n-17,460,266,333.79\n-18,045,044,675.98\n-18,830,050,198.23\n-30,708,633,279.93\nCentral Bank(net)\n-3,323,655,111.76\n-3,703,423,556.62\n-3,750,737,078.21\n-4,364,843,604.61\n-10,488,101,584.18\n-20,831,187,742.72\n-17,851,691,225.27\n-17,684,416,714.28\n-20,303,911,826.15\n-21,115,539,152.06\n-21,850,985,894.27\n-22,724,299,913.18\n-37,204,315,094.00\nForeign Assets\n586,967,884.70\n615,433,643.39\n564,973,118.29\n487,113,521.79\n1,242,178,197.33\n4,938,308,098.53\n2,249,211,942.26\n2,357,413,332.73\n2,869,139,839.85\n2,930,487,891.77\n2,722,752,920.94\n2,750,142,276.55\n4,789,971,270.20\nForeign Liabilities\n3,910,622,996.46\n4,318,857,200.01\n4,315,710,196.51\n4,851,957,126.40\n11,730,279,781.51\n25,769,495,841.25\n20,100,903,167.53\n20,041,830,047.01\n23,173,051,666.00\n24,046,027,043.83\n24,573,738,815.21\n25,474,442,189.73\n41,994,286,364.20\nOther Depository Corporations(net)\n574,797,581.91\n752,350,429.98\n744,412,585.27\n798,521,238.87\n1,905,875,749.78\n3,867,276,441.25\n3,637,584,517.45\n3,456,910,411.50\n3,856,433,150.89\n3,655,272,818.27\n3,805,941,218.28\n3,894,249,714.95\n6,495,681,814.07\nForeign Assets\n771,701,557.95\n978,124,840.54\n1,001,481,472.45\n1,117,664,547.79\n2,691,035,602.70\n5,707,374,025.18\n5,099,940,234.73\n4,942,678,600.40\n5,547,113,224.93\n5,232,466,845.31\n5,592,082,221.64\n5,729,082,981.88\n9,507,866,394.28\nForeign Liabilities\n196,903,976.04\n225,774,410.56\n257,068,887.17\n319,143,308.91\n785,159,852.92\n1,840,097,583.93\n1,462,355,717.28\n1,485,768,188.90\n1,690,680,074.03\n1,577,194,027.04\n1,786,141,003.36\n1,834,833,266.93\n3,012,184,580.21\nNet Domestic Assets (NDA)\n5,446,217,996.54\n5,879,316,414.74\n6,201,650,160.38\n7,164,925,241.35\n15,821,191,266.69\n31,239,386,362.79\n27,217,558,926.15\n27,639,288,378.08\n32,161,547,467.69\n34,250,554,903.24\n35,673,225,646.05\n37,744,636,990.28\n59,956,750,588.31\nDomestic Claims\n2,158,183,534.44\n2,390,147,141.27\n2,794,025,252.47\n3,101,957,753.62\n6,541,657,510.89\n10,642,561,243.15\n11,094,734,236.77\n11,015,584,365.69\n13,148,134,761.58\n14,099,323,168.68\n14,764,938,049.74\n16,661,349,824.12\n26,555,487,015.34\nClaims on Central Government(net)\n448,671,599.24\n460,256,173.30\n603,775,191.70\n783,297,842.19\n1,389,082,186.11\n-464,905,858.96\n1,919,403,373.96\n2,035,378,139.93\n2,469,546,156.09\n2,685,249,888.61\n3,426,568,722.64\n4,633,764,250.89\n8,146,919,528.13\nClaims on Central Government\n781,764,304.23\n961,476,154.82\n1,030,581,569.13\n1,109,723,491.62\n1,853,707,138.97\n3,237,920,191.20\n3,137,951,747.03\n3,471,122,173.32\n3,948,824,640.88\n4,022,430,300.76\n4,506,540,165.69\n5,826,109,037.18\n9,899,880,742.54\nCentral Bank\n461,728,501.30\n628,530,323.58\n669,523,170.19\n717,575,879.35\n1,196,082,138.57\n2,246,012,881.84\n1,888,538,492.52\n2,273,053,198.66\n2,620,306,139.59\n2,738,773,804.86\n2,978,270,299.68\n3,186,271,122.40\n5,598,206,535.08\nODCs\n320,035,802.93\n332,945,831.24\n361,058,398.93\n392,147,612.28\n657,625,000.40\n991,907,309.36\n1,249,413,254.51\n1,198,068,974.66\n1,328,518,501.28\n1,283,656,495.90\n1,528,269,866.01\n2,639,837,914.78\n4,301,674,207.46\nLess Liabilities to Central Government\n333,092,704.99\n501,219,981.52\n426,806,377.42\n326,425,649.43\n464,624,952.86\n3,702,826,050.16\n1,218,548,373.07\n1,435,744,033.39\n1,479,278,484.78\n1,337,180,412.15\n1,079,971,443.04\n1,192,344,786.29\n1,752,961,214.41\nCentral Bank\n291,271,379.60\n490,179,791.18\n420,617,652.14\n316,723,447.84\n414,113,225.54\n3,270,215,884.09\n838,112,561.24\n1,054,218,531.34\n1,364,775,878.32\n1,190,127,107.91\n946,496,075.59\n990,859,913.99\n1,583,331,636.98\nODCs\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\n381,525,502.04\n114,502,606.47\n147,053,304.24\n133,475,367.46\n201,484,872.29\n169,629,577.43\nClaims on Other Sectors\n1,709,511,935.20\n1,929,890,967.97\n2,190,250,060.77\n2,318,659,911.43\n5,152,575,324.78\n11,107,467,102.11\n9,175,330,862.81\n8,980,206,225.76\n10,678,588,605.49\n11,414,073,280.07\n11,338,369,327.09\n12,027,585,573.22\n18,408,567,487.20\nOther Financial Corporations\n176,029,053.38\n189,742,321.73\n202,939,856.36\n127,476,071.53\n204,879,115.02\n372,829,596.47\n286,485,380.68\n286,556,911.67\n345,395,684.06\n402,497,102.41\n366,785,937.06\n210,979,095.28\n367,132,374.31\nState and Local Government\n251,239.62\n197,442.25\n149,777.75\n99,276.39\n80,342.62\n83,001.69\n68,073.17\n75,802.84\n92,048.54\n98,056.56\n59,769.23\n73,453.85\n198,797.86\nPublic Non Financial Corporations\n198,192,725.01\n221,082,772.48\n244,918,005.85\n282,369,808.93\n680,427,260.99\n1,426,648,513.58\n1,144,767,740.03\n942,115,955.79\n1,064,377,138.00\n1,124,773,262.90\n758,994,509.56\n779,253,503.92\n787,050,316.56\nPrivate Sector\n1,335,038,917.19\n1,518,868,431.51\n1,742,242,420.81\n1,908,714,754.59\n4,267,188,606.15\n9,307,905,990.36\n7,744,009,668.94\n7,751,457,555.47\n9,268,723,734.89\n9,886,704,858.20\n10,212,529,111.24\n11,037,279,520.17\n17,254,185,998.48\nCentral Bank\n14,320,237.34\n15,366,452.38\n18,410,955.96\n21,144,958.50\n23,007,099.44\n23,430,389.25\n42,772,151.02\n61,406,600.26\n79,455,077.51\n92,261,985.53\n97,474,935.67\n102,273,703.78\n144,071,607.24\nODCs\n1,320,718,679.85\n1,503,501,979.13\n1,723,831,464.85\n1,887,569,796.09\n4,244,181,506.71\n9,284,475,601.11\n7,701,237,517.92\n7,690,050,955.21\n9,189,268,657.38\n9,794,442,872.67\n10,115,054,175.57\n10,935,005,816.39\n17,110,114,391.24\nOther Items(Net)\n-3,288,034,462.10\n-3,489,169,273.48\n-3,407,624,907.90\n-4,062,967,487.72\n-9,279,533,755.80\n-20,596,825,119.64\n-16,122,824,689.39\n-16,623,704,012.39\n-19,013,412,706.11\n-20,151,231,734.56\n-20,908,287,596.32 -21,083,287,166.17 -33,401,263,572.98\nShares and Other Equity\n-2,961,726,923.10\n-3,217,266,965.75\n-3,126,405,163.72\n-3,579,533,655.47\n-9,203,936,084.43\n-19,402,711,215.33\n-14,321,122,638.86\n-14,203,729,090.13\n-16,555,368,520.87\n-17,032,283,456.63\n-17,122,059,892.58\n-17,570,066,671.33\n-29,549,325,579.05\nLiabilities to Other Financial Corporations\n675,534.11\n3,108,981.29\n3,714,628.40\n6,418,803.44\n30,583,343.97\n64,321,874.21\n58,256,168.71\n56,751,608.46\n90,032,397.59\n83,441,760.88\n89,997,662.25\n138,722,557.11\n182,726,965.66\nRestricted Deposits\n52,836,636.96\n95,262,450.25\n116,383,765.15\n168,057,733.95\n452,445,666.52\n929,649,277.24\n832,146,281.94\n481,313,635.70\n652,311,438.83\n616,319,027.72\n598,451,618.98\n634,635,960.65\n1,122,721,876.21\nDeposits and Securities Excluded from Base Money\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-379,819,710.07\n-370,273,739.26\n-401,318,137.73\n-657,910,369.64\n-558,626,681.86\n-2,188,085,055.76\n-2,692,104,501.18\n-2,958,040,166.42\n-3,200,388,021.66\n-3,818,709,066.54\n-4,474,676,984.97\n-4,286,579,012.59\n-5,157,386,835.80\nBroad Money-M3\n2,697,360,466.69\n2,928,243,288.10\n3,195,325,667.44\n3,598,602,875.61\n7,238,965,432.29\n14,275,475,061.32\n13,003,452,218.33\n13,411,782,075.30\n15,714,068,792.44\n16,790,288,569.45\n17,628,180,970.07\n18,914,586,792.05\n29,248,117,308.38\nSecurities Other than Shares Included in Broad \nMoney\n15,056,472.03\n15,711,655.30\n16,082,619.50\n1,843,391.22\n4,659,433.86\n4,243,581.90\n2,137,443.55\n3,182,683.74\n2,685,488.92\n3,497,226.23\n4,173,191.32\n42,811,406.21\n7,317,942.35\nBroad Money-M2\n2,682,303,994.66\n2,912,531,632.80\n3,179,243,047.93\n3,596,759,484.40\n7,234,305,998.43\n14,271,231,479.42\n13,001,314,774.78\n13,408,599,391.56\n15,711,383,303.52\n16,786,791,343.22\n17,624,007,778.75\n18,871,775,385.85\n29,240,799,366.03\nOther Deposits (Time Deposits)\n275,038,711.32\n293,774,251.17\n332,735,496.03\n268,888,357.23\n555,305,758.75\n1,066,573,312.15\n824,657,970.63\n860,202,048.80\n945,509,710.97\n1,187,384,045.43\n1,239,087,789.32\n1,287,203,962.67\n1,749,790,464.18\nof which Foreign Currency Accounts\n159,977,076.22\n193,826,996.54\n204,002,079.62\n140,843,185.69\n366,430,904.52\n852,167,654.54\n616,409,108.42\n586,082,872.02\n715,202,149.51\n865,876,028.52\n823,225,160.91\n878,430,928.79\n1,378,784,627.54\nNarrow Money-M1\n2,407,265,283.35\n2,618,757,381.64\n2,846,507,551.90\n3,327,871,127.16\n6,679,000,239.69\n13,204,658,167.27\n12,176,656,804.16\n12,548,397,342.75\n14,765,873,592.55\n15,599,407,297.79\n16,384,919,989.43\n17,584,571,423.18\n27,491,008,901.84\nTransferable Deposits\n2,402,524,498.19\n2,612,610,043.68\n2,840,026,628.31\n3,320,722,893.78\n6,671,063,283.95\n13,196,303,401.12\n12,166,873,421.72\n12,538,725,239.63\n14,755,523,314.82\n15,588,193,442.31\n16,373,116,452.32\n17,572,220,001.14\n27,476,970,003.22\n Of which Foreign Currency Accounts\n1,626,587,667.25\n1,754,513,308.92\n1,869,072,784.19\n2,148,792,572.06\n5,274,426,984.71\n11,635,488,089.25\n10,099,330,132.00\n10,173,498,286.11\n12,310,342,777.52\n12,429,076,347.34\n12,757,305,066.07\n13,397,781,145.35\n22,901,496,643.22\nCurrency Outside Depository Corporations\n4,740,785.16\n6,147,337.96\n6,480,923.60\n7,148,233.38\n7,936,955.74\n8,354,766.15\n9,783,382.43\n9,672,103.13\n10,350,277.73\n11,213,855.47\n11,803,537.12\n12,351,422.04\n14,038,898.63\nMemorandum Items\nReserve Money\n122,997,662.08\n204,036,133.91\n232,896,654.62\n276,496,079.11\n520,611,909.67\n1,064,898,441.01\n1,003,043,754.90\n1,062,092,590.09\n1,312,407,291.74\n1,787,437,296.87\n1,817,508,312.01\n2,021,215,296.65\n3,069,128,065.16\nFCAs as a Percentage of Deposits in M3\n60.4%\n60.0%\n58.6%\n59.8%\n72.9%\n87.5%\n77.7%\n75.9%\n78.4%\n74.1%\n72.4%\n70.9%\n78.3%\nEnd Period Exchange Rate\n796.52\n889.13\n929.86\n1,047.44\n2,577.06\n5,739.80\n4,516.80\n4,608.11\n5,466.75\n5,698.96\n5,791.08\n6,104.72\n10,152.39\nSource: Reserve Bank of Zimbabwe, 2024\nNotes:\n(i) Depository corporations survey - formerly Monetary Survey.\n(ii) Broad money redefined using IMF's Monetary and Financial Statistics Manual of 2000. Major changes include exclusion of Government deposits held by banks from broad money.\n(iii) Transferable deposits made up of demand and savings deposits.\n(iv) NCDs are also referred to as securities included in broad money.\n(v) All classes of time deposits, short and long term are classified as time deposits, which are also termed other deposits.\n(vi) Credit to the private sector now excludes claims on other financial corporations, as well as claims on state and local government (local authorities)\n(vii) Depository corporations made up of the Central Bank and other depository corporations\n(viii) Other depository corporations (ODCs) - Commercial banks, merchant banks, building societies and POSB.\n(ix) In December 2017, the statistics were adjusted in restrospect by reclassifying Securities issued under Aftrades from claims on government to claims on central bank\n(x) In December 2017, the statistics were adjusted in restrospect by reclassifying amounts accessed by banks under the Aftrades from liabilities to Other Depository corporations and Other Financial Corporations to liabilities to Central Bank \n(xi) In December 2018, statistics were revised from November 2017 due to reclassification of lines of credit (foreign liabilities) that were initially classified as deposits included in broad money\n(xii) All monetary and financial statistics are valued in ZWL$ since the introduction of the interbank foreign exchange market in February 2019\n \n \n15 \n \n \n \n \n \nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nDec-23\nJan-24\nNet Foreign Assets\n-3,323,655,111.76\n-3,703,423,556.62\n-3,750,737,078.21\n-4,364,843,604.61 -10,488,101,584.18 -20,831,187,742.72\n-17,851,691,225.27\n-17,684,416,714.28 -20,303,911,826.15\n-21,115,539,152.06 -21,850,985,894.27\n-22,724,299,913.18\n-37,204,315,094.00\nClaims on Non Residents\n586,967,884.70\n615,433,643.39\n564,973,118.29\n487,113,521.79\n1,242,178,197.33\n4,938,308,098.53\n2,249,211,942.26\n2,357,413,332.73\n2,869,139,839.85\n2,930,487,891.77\n2,722,752,920.94\n2,750,142,276.55\n4,789,971,270.20\nOfficial Reserves Assets\n261,809,981.40\n249,068,733.08\n171,692,411.97\n146,106,760.95\n305,095,927.20\n2,685,528,792.05\n501,097,650.65\n609,700,872.98\n873,028,937.84\n901,998,462.96\n664,790,048.98\n670,897,605.40\n1,283,063,711.48\nOther Foreign Assets\n325,157,903.30\n366,364,910.31\n393,280,706.32\n341,006,760.85\n937,082,270.13\n2,252,779,306.49\n1,748,114,291.61\n1,747,712,459.75\n1,996,110,902.01\n2,028,489,428.81\n2,057,962,871.96\n2,079,244,671.16\n3,506,907,558.71\nLess Liabilities to Non Residents\n3,910,622,996.46\n4,318,857,200.01\n4,315,710,196.51\n4,851,957,126.40\n11,730,279,781.51\n25,769,495,841.25\n20,100,903,167.53\n20,041,830,047.01\n23,173,051,666.00\n24,046,027,043.83\n24,573,738,815.21\n25,474,442,189.73\n41,994,286,364.20\nShort Term Liabilities\n1,889,645,829.44\n2,092,686,621.90\n2,190,571,858.03\n2,461,132,179.69\n454,737,994.24\n740,090,616.66\n489,297,027.10\n431,377,013.98\n412,442,545.53\n498,435,076.07\n417,352,772.09\n253,445,372.66\n330,761,013.21\nOther Foreign Liabilities*\n2,020,977,167.02\n2,226,170,578.11\n2,125,138,338.48\n2,390,824,946.71\n11,275,541,787.27\n25,029,405,224.59\n19,611,606,140.43\n19,610,453,033.03\n22,760,609,120.47\n23,547,591,967.77\n24,156,386,043.12\n25,220,996,817.07\n41,663,525,350.99\n of which blocked funds\n918,840,100.80\n1,016,910,134.72\n844,460,244.12\n946,785,361.64\n2,218,121,428.14\n4,846,720,895.68\n3,809,201,616.00\n3,638,215,070.80\n4,306,782,215.73\n4,458,649,260.58\n4,527,891,788.72\n4,848,587,011.60\n8,054,627,951.76\nNet Domestic Assets (NDA)\n3,446,652,773.84\n3,907,459,690.53\n3,983,633,732.83\n4,641,339,683.72\n11,008,713,493.85\n21,896,086,183.73\n18,854,734,980.17\n18,746,509,304.37\n21,616,319,117.89\n22,902,976,448.93\n23,668,494,206.27\n24,745,515,209.82\n40,273,443,159.16\nDomestic Claims\n324,497,964.08\n313,504,419.70\n449,443,570.90\n633,073,494.67\n1,307,855,143.64\n-23,847,709.69\n1,885,131,142.46\n1,873,807,183.49\n2,028,957,342.73\n2,411,597,729.92\n2,496,519,062.46\n2,685,240,421.33\n4,316,485,335.80\nNet Claims on Central Government\n170,457,121.69\n138,350,532.40\n248,905,518.05\n400,852,431.51\n781,968,913.03\n-1,024,203,002.25\n1,050,425,931.27\n1,218,834,667.32\n1,255,530,261.28\n1,548,646,696.96\n2,031,774,224.09\n2,195,411,208.41\n4,014,874,898.09\nClaims on Central Government\n461,728,501.30\n628,530,323.58\n669,523,170.19\n717,575,879.35\n1,196,082,138.57\n2,246,012,881.84\n1,888,538,492.52\n2,273,053,198.66\n2,620,306,139.59\n2,738,773,804.86\n2,978,270,299.68\n3,186,271,122.40\n5,598,206,535.08\nOf which: Securities Other than Shares\n115,798,163.17\n141,163,866.74\n163,408,985.73\n197,483,744.44\n491,408,539.76\n1,282,058,425.55\n1,041,256,825.36\n1,354,647,836.07\n1,738,161,413.25\n1,883,996,199.01\n1,984,147,610.08\n2,219,186,779.04\n4,440,121,511.31\nLoans\n345,930,338.13\n487,366,456.84\n506,114,184.46\n520,092,134.91\n704,673,598.81\n963,954,456.29\n847,281,667.16\n918,405,362.59\n882,144,726.34\n854,777,605.86\n994,122,689.61\n967,084,343.36\n1,158,085,023.77\n Loans and Advances\n92,638,154.51\n100,736,810.22\n112,483,069.83\n126,461,020.28\n298,686,901.35\n557,967,758.83\n441,294,969.70\n453,167,575.54\n416,906,939.29\n389,539,818.81\n450,658,841.88\n423,620,495.64\n709,564,039.01\nAmounts Due from Gvt including SDR Drawdowns\n253,292,183.61\n386,629,646.61\n393,631,114.63\n393,631,114.63\n405,986,697.46\n405,986,697.46\n405,986,697.46\n465,237,787.05\n465,237,787.05\n465,237,787.05\n543,463,847.72\n543,463,847.72\n448,520,984.75\n Export Incentives\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLess Liabilities to Central Government\n291,271,379.60\n490,179,791.18\n420,617,652.14\n316,723,447.84\n414,113,225.54\n3,270,215,884.09\n838,112,561.24\n1,054,218,531.34\n1,364,775,878.32\n1,190,127,107.91\n946,496,075.59\n990,859,913.99\n1,583,331,636.98\nOf which: Deposits\n291,271,379.60\n490,179,791.18\n420,617,652.14\n316,723,447.84\n414,113,225.54\n3,270,215,884.09\n838,112,561.24\n1,054,218,531.34\n1,364,775,878.32\n1,190,127,107.91\n946,496,075.59\n990,859,913.99\n1,583,331,636.98\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n154,040,842.39\n175,153,887.31\n200,538,052.85\n232,221,063.16\n525,886,230.61\n1,000,355,292.57\n834,705,211.19\n654,972,516.17\n773,427,081.45\n862,951,032.96\n464,744,838.37\n489,829,212.93\n301,610,437.71\nOther Financial Corporations\n9,415,510.50\n10,113,325.42\n10,623,469.30\n10,883,730.62\n10,991,470.34\n12,986,635.27\n12,976,151.03\n13,602,645.94\n14,588,403.94\n63,414,783.51\n25,307,666.81\n28,216,636.43\n32,493,405.07\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n130,305,094.55\n149,674,109.51\n171,503,627.58\n200,192,374.04\n491,887,660.82\n963,938,268.05\n778,956,909.14\n579,963,269.97\n679,383,600.01\n707,274,263.92\n341,962,235.89\n359,338,872.72\n125,045,425.40\nPrivate Sector\n14,320,237.34\n15,366,452.38\n18,410,955.96\n21,144,958.50\n23,007,099.44\n23,430,389.25\n42,772,151.02\n61,406,600.26\n79,455,077.51\n92,261,985.53\n97,474,935.67\n102,273,703.78\n144,071,607.24\nClaims on Other Depository Corporations\n41,233,534.83\n43,495,940.76\n45,842,895.27\n47,004,500.30\n116,825,246.16\n267,624,056.04\n261,303,321.91\n238,753,031.59\n207,009,026.95\n229,347,409.30\n246,227,512.18\n266,265,290.73\n392,377,252.77\nOf which: Loans\n41,233,534.83\n43,495,940.76\n45,842,895.27\n47,004,500.30\n116,825,246.16\n267,624,056.04\n261,303,321.91\n238,753,031.59\n207,009,026.95\n229,347,409.30\n246,227,512.18\n266,265,290.73\n392,377,252.77\nOther Liabilities to ODCs\n730,178,263.75\n655,353,298.81\n642,344,547.18\n750,760,102.33\n1,428,720,516.68\n2,666,026,665.35\n2,901,005,739.21\n3,100,647,536.01\n3,107,865,677.76\n3,216,633,940.85\n3,876,066,859.55\n3,854,578,282.87\n5,812,079,968.88\nOf which: Aftrades Balances\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Securities\n355,071,440.18\n307,661,257.90\n318,264,602.32\n358,416,719.69\n479,833,629.00\n683,711,355.79\n1,196,912,067.35\n1,309,913,863.13\n1,094,629,530.65\n1,078,752,001.46\n1,460,737,223.38\n1,519,969,710.79\n1,701,520,057.58\nOther Items(Net)\n-3,811,099,538.68\n-4,205,812,628.87\n-4,130,691,813.85\n-4,712,021,791.09 -11,012,753,620.73 -24,318,336,502.72\n-19,609,306,255.01\n-19,734,596,625.30 -22,488,218,425.97\n-23,478,665,250.56 -24,801,814,491.19\n-25,648,587,780.63\n-41,376,660,539.47\nShares and Other Equity\n-3,673,971,825.27\n-4,085,919,716.08\n-4,078,823,961.23\n-4,620,636,211.04\n-11,291,316,467.09\n-25,202,259,045.14\n-19,805,080,179.46\n-19,579,648,458.36\n-22,753,122,010.85\n-23,550,146,670.91\n-23,892,801,192.96\n-25,053,448,266.86\n-40,143,169,460.35\nOther Items(Net)\n-221,456,181.24\n-233,402,893.37\n-175,955,067.06\n-276,252,783.87\n-193,714,335.06\n-63,920,685.55\n-652,745,707.09\n-652,393,199.08\n-396,662,893.13\n-589,895,589.07\n-1,529,336,116.22\n-1,251,036,312.37\n-2,400,043,318.75\nLiabilities to Other Resident Sectors\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nDeposits and Securities Excluded from Base Money\n84,328,467.83\n113,509,980.58\n124,087,214.44\n184,867,203.81\n472,277,181.43\n947,843,227.98\n848,519,631.54\n497,445,032.14\n661,566,478.01\n661,377,009.41\n620,322,818.00\n655,896,798.59\n1,166,552,239.63\nMonetary Base \n122,997,662.08\n204,036,133.91\n232,896,654.62\n276,496,079.11\n520,611,909.67\n1,064,898,441.01\n1,003,043,754.90\n1,062,092,590.09\n1,312,407,291.74\n1,787,437,296.87\n1,817,508,312.01\n2,021,215,296.65\n3,069,128,065.16\nBond Coins\n99,645.41\n99,645.43\n97,745.29\n90,572.71\n83,649.70\n80,542.92\n79,344.94\n79,163.84\n79,154.38\n79,154.84\n78,794.30\n76,968.83\n66,290.72\nBond Notes\n7,439,947.85\n7,927,761.49\n8,414,729.87\n8,902,316.39\n8,960,488.74\n10,258,707.59\n11,193,057.46\n11,885,047.43\n12,736,767.90\n13,560,105.45\n14,430,019.79\n15,672,830.10\n16,920,535.77\nLiabilities to ODCs\n115,357,630.46\n195,908,361.99\n224,283,814.46\n267,402,825.02\n511,467,406.24\n1,054,458,825.51\n961,770,952.77\n1,020,125,611.77\n1,269,591,004.47\n1,743,797,671.58\n1,772,929,799.17\n1,975,463,236.74\n3,052,141,238.66\n Local Currency Reserve Deposits\n56,112,655.93\n63,026,207.68\n72,736,726.53\n86,910,489.22\n105,795,700.01\n182,612,061.98\n243,159,063.25\n295,859,644.01\n344,623,158.66\n400,041,844.52\n449,770,161.09\n533,568,035.27\n557,373,870.90\n Foreign Currency Reserve Deposits\n59,244,974.53\n132,882,154.31\n151,547,087.93\n180,492,335.81\n405,671,706.23\n871,846,763.53\n718,611,889.52\n724,265,967.76\n924,967,845.81\n1,343,755,827.07\n1,323,159,638.08\n1,441,895,201.47\n2,464,767,002.76\n Exess reserves \n100,438.36\n100,364.99\n100,364.99\n100,364.99\n100,364.99\n100,364.99\n30,000,399.73\n30,002,767.04\n30,000,364.99\n30,000,364.99\n30,069,698.74\n30,002,260.98\n30,000,364.99\nPrivate Deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nSource: Reserve Bank of Zimbabwe, 2024\nNB: * Other Foreign Liabilities include blocked funds amounting to USD2.2 billion assumed by the Central Bank on behalf of Government.\nTABLE 2: CENTRAL BANK SURVEY ($'000)\n \n \n16 \n \n \n \n \n \n \n TABLE 3 : OTHER DEPOSITORY CORPORATIONS SURVEY ( $ '000)\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nDec-23\nJan-24\nNet Foreign Assets\n574,797,581.91\n752,350,429.98\n744,412,585.27\n798,521,238.87\n1,905,875,749.78\n3,867,276,441.25\n3,637,584,517.45\n3,456,910,411.50\n3,856,433,150.89\n3,655,272,818.27\n3,805,941,218.28\n3,894,249,714.95\n6,495,681,814.07\nClaims on Non Residents\n771,701,557.95\n978,124,840.54\n1,001,481,472.45\n1,117,664,547.79\n2,691,035,602.70\n5,707,374,025.18\n5,099,940,234.73\n4,942,678,600.40\n5,547,113,224.93\n5,232,466,845.31\n5,592,082,221.64\n5,729,082,981.88\n9,507,866,394.28\nOf Which: Foreign Currency\n381,966,212.75\n436,062,788.15\n425,326,479.00\n462,081,408.59\n1,048,116,376.82\n2,249,201,574.76\n1,584,403,308.04\n1,505,916,176.81\n2,015,621,585.66\n2,312,575,134.73\n2,558,589,332.45\n2,868,505,570.48\n5,196,670,641.24\nDeposits\n387,899,225.52\n540,045,460.79\n573,864,075.80\n652,301,901.26\n1,639,116,293.75\n3,441,353,382.68\n3,502,402,457.26\n3,423,237,567.41\n3,515,981,784.12\n2,903,444,523.75\n3,019,701,118.75\n2,843,740,238.47\n4,283,885,090.87\nOther\n1,836,119.68\n2,016,591.60\n2,290,917.65\n3,281,237.94\n3,802,932.12\n16,819,067.74\n13,134,469.43\n13,524,856.19\n15,509,855.15\n16,447,186.84\n13,791,770.44\n16,837,172.93\n27,310,662.17\nLess Liabilities to Non Residents\n196,903,976.04\n225,774,410.56\n257,068,887.17\n319,143,308.91\n785,159,852.92\n1,840,097,583.93\n1,462,355,717.28\n1,485,768,188.90\n1,690,680,074.03\n1,577,194,027.04\n1,786,141,003.36\n1,834,833,266.93\n3,012,184,580.21\nOf Which: Deposits\n93,815,500.56\n109,244,589.40\n121,808,803.93\n153,776,940.69\n378,197,467.04\n820,337,332.33\n764,960,085.21\n772,511,911.80\n827,268,243.95\n655,899,412.79\n782,004,591.95\n776,859,238.67\n1,316,061,176.34\nLoans\n103,088,475.48\n116,529,821.16\n135,260,083.25\n165,366,368.23\n406,962,385.88\n1,019,760,251.61\n697,395,632.08\n713,256,277.09\n863,411,830.08\n921,294,614.24\n1,004,136,411.41\n1,057,974,028.26\n1,696,123,403.87\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nNet Domestic Assets (NDA)\n2,086,330,268.75\n2,151,497,989.83\n2,436,728,709.28\n2,776,123,933.49\n5,305,321,211.88\n10,381,649,903.19\n9,339,710,968.86\n9,929,068,164.23\n11,838,030,324.64\n13,078,743,914.01\n13,788,565,015.66\n14,986,724,817.13\n22,694,566,232.26\nDomestic Claims\n1,833,685,570.36\n2,076,642,721.56\n2,344,581,681.58\n2,468,884,258.96\n5,233,802,367.26\n10,666,408,952.84\n9,209,603,094.31\n9,141,777,182.20\n11,119,177,418.85\n11,687,725,438.76\n12,268,418,987.27\n13,976,109,402.78\n22,239,001,679.53\nNet Claims on Central Government\n278,214,477.55\n321,905,640.90\n354,869,673.65\n382,445,410.68\n607,113,273.08\n559,297,143.29\n868,977,442.69\n816,543,472.61\n1,214,015,894.82\n1,136,603,191.66\n1,394,794,498.55\n2,438,353,042.48\n4,132,044,630.04\nClaims on Central Government\n320,035,802.93\n332,945,831.24\n361,058,398.93\n392,147,612.28\n657,625,000.40\n991,907,309.36\n1,249,413,254.51\n1,198,068,974.66\n1,328,518,501.28\n1,283,656,495.90\n1,528,269,866.01\n2,639,837,914.78\n4,301,674,207.46\nSecurities\n319,807,352.36\n332,626,867.19\n360,626,182.29\n391,587,790.26\n653,025,854.60\n981,773,844.67\n1,242,045,163.04\n1,190,599,025.63\n1,318,582,684.20\n1,272,839,666.04\n1,517,348,442.88\n2,627,512,618.11\n4,283,761,798.56\nLoans\n228,450.57\n318,964.05\n432,216.64\n559,822.02\n4,599,145.80\n10,133,464.70\n7,368,091.47\n7,469,949.03\n9,935,817.09\n10,816,829.86\n10,921,423.13\n12,325,296.66\n17,912,408.90\nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nLess Liabilities to Central Government\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\n381,525,502.04\n114,502,606.47\n147,053,304.24\n133,475,367.46\n201,484,872.29\n169,629,577.43\nOf which: Deposits\n41,821,325.38\n11,040,190.34\n6,188,725.28\n9,702,201.59\n50,511,727.32\n432,610,166.07\n380,435,811.82\n381,525,502.04\n114,502,606.47\n147,053,304.24\n133,475,367.46\n201,484,872.29\n169,629,577.43\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n1,555,471,092.81\n1,754,737,080.66\n1,989,712,007.92\n2,086,438,848.27\n4,626,689,094.18\n10,107,111,809.54\n8,340,625,651.62\n8,325,233,709.58\n9,905,161,524.04\n10,551,122,247.10\n10,873,624,488.72\n11,537,756,360.30\n18,106,957,049.49\nOther Financial Corporations\n166,613,542.88\n179,628,996.31\n192,316,387.05\n116,592,340.90\n193,887,644.68\n359,842,961.20\n273,509,229.65\n272,954,265.73\n330,807,280.13\n339,082,318.90\n341,478,270.25\n182,762,458.86\n334,638,969.24\nState and Local Government\n251,239.62\n197,442.25\n149,777.75\n99,276.39\n80,342.62\n83,001.69\n68,073.17\n75,802.84\n92,048.54\n98,056.56\n59,769.23\n73,453.85\n198,797.86\nPublic Non Financial Corporations\n67,887,630.46\n71,408,662.97\n73,414,378.27\n82,177,434.89\n188,539,600.17\n462,710,245.53\n365,810,830.89\n362,152,685.81\n384,993,537.99\n417,498,998.98\n417,032,273.67\n419,914,631.20\n662,004,891.16\nPrivate Sector\n1,320,718,679.85\n1,503,501,979.13\n1,723,831,464.85\n1,887,569,796.09\n4,244,181,506.71\n9,284,475,601.11\n7,701,237,517.92\n7,690,050,955.21\n9,189,268,657.38\n9,794,442,872.67\n10,115,054,175.57\n10,935,005,816.39\n17,110,114,391.24\nClaims on the Central Bank\n706,967,379.44\n745,768,616.10\n819,662,608.72\n973,967,364.65\n2,050,173,260.89\n4,434,783,343.65\n4,138,866,267.43\n4,653,650,898.99\n5,265,804,171.22\n5,912,703,283.03\n6,326,849,329.56\n5,977,105,227.74\n9,099,022,563.30\nCurrency\n2,798,808.10\n1,880,068.97\n2,031,551.56\n1,844,655.72\n1,107,182.70\n1,984,484.37\n1,489,019.97\n2,292,108.14\n2,465,644.54\n2,425,404.82\n2,705,276.98\n3,398,376.89\n2,947,927.87\nReserves\n704,168,571.34\n743,888,547.13\n817,631,057.16\n972,122,708.94\n2,049,066,078.19\n4,424,349,970.82\n4,137,377,247.46\n4,651,358,790.85\n5,263,338,526.67\n5,910,277,878.21\n6,324,144,052.58\n5,973,706,850.85\n9,096,074,635.43\nSecurities\n0.00\n0.00\n0.00\n0.00\n0.00\n8,448,888.46\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Claims\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nLiabilities to the Central Bank\n4,974,293.62\n8,092,936.71\n9,639,861.61\n13,321,881.07\n78,332,582.02\n39,166,568.11\n87,827,165.17\n84,841,425.78\n82,493,417.82\n84,628,889.30\n92,939,919.06\n55,157,360.84\n114,298,041.18\nOther Items(Net)\n449,348,387.42\n662,820,411.12\n717,875,719.41\n653,405,809.04\n1,900,321,834.26\n4,680,375,825.19\n3,920,931,227.71\n3,781,518,491.17\n4,464,457,847.61\n4,437,055,918.48\n4,713,763,382.12\n4,911,332,452.56\n8,529,159,969.39\nShares and Other Equity\n712,244,902.17\n868,652,750.33\n952,418,797.50\n1,041,102,555.56\n2,087,380,382.66\n5,799,547,829.81\n5,483,957,540.60\n5,375,919,368.23\n6,197,753,489.98\n6,517,863,214.28\n6,770,741,300.38\n7,483,381,595.52\n10,593,843,881.30\nLiabilities to other ressident sectors\n675,534.11\n3,108,981.29\n3,714,628.40\n6,418,803.44\n30,583,343.97\n64,321,874.21\n58,256,168.71\n56,751,608.46\n90,032,397.59\n83,441,760.88\n89,997,662.25\n138,722,557.11\n182,726,965.66\nOther Items(Net)\n-263,572,048.85\n-208,941,320.50\n-238,257,706.49\n-394,115,549.96\n-217,641,892.37\n-1,183,493,878.83\n-1,621,282,481.61\n-1,651,152,485.52\n-1,823,328,039.96\n-2,164,249,056.68\n-2,146,975,580.51\n-2,710,771,700.07\n-2,247,410,877.57\nDeposits and Securities Included in Broad Money\n2,661,127,850.66\n2,903,848,419.81\n3,181,141,294.55\n3,574,645,172.37\n7,211,196,961.65\n14,248,926,344.43\n12,977,295,486.31\n13,385,978,575.73\n15,694,463,475.53\n16,734,016,732.29\n17,594,506,233.94\n18,880,974,532.07\n29,190,248,046.34\nDeposits Included in Broad Money\n2,646,071,378.63\n \n2,888,136,764.51\n \n3,165,058,675.05\n \n3,572,801,781.15\n \n7,206,537,527.79\n \n14,244,682,762.54\n \n12,975,158,042.76\n \n13,382,795,891.99\n \n15,691,777,986.61\n \n16,730,519,506.06\n \n17,590,333,042.62\n \n18,838,163,125.87\n \n29,182,930,103.98\n \nTransferable Deposits\n2,371,032,667.32\n \n2,594,362,513.35\n \n2,832,323,179.02\n \n3,303,913,423.92\n \n6,651,231,769.05\n \n13,178,109,450.38\n \n12,150,500,072.13\n \n12,522,593,843.18\n \n14,746,268,275.64\n \n15,543,135,460.62\n \n16,351,245,253.30\n \n17,550,959,163.20\n \n27,433,139,639.80\n \n of which FCAs\n1,623,313,580.02\n \n1,750,982,009.54\n \n1,865,387,117.78\n \n2,144,912,895.57\n \n5,273,965,984.48\n \n11,634,530,484.57\n \n10,099,327,960.39\n \n10,172,409,984.27\n \n12,309,119,479.36\n \n12,388,978,422.26\n \n12,751,597,340.40\n \n13,391,882,427.59\n \n22,891,974,397.20\n \nOther Deposits (Time Deposits)\n275,038,711.32\n293,774,251.17\n332,735,496.03\n268,888,357.23\n555,305,758.75\n1,066,573,312.15\n824,657,970.63\n860,202,048.80\n945,509,710.97\n1,187,384,045.43\n1,239,087,789.32\n1,287,203,962.67\n1,749,790,464.18\n of which FCAs\n159,977,076.22\n193,826,996.54\n204,002,079.62\n140,843,185.69\n366,430,904.52\n852,167,654.54\n616,409,108.42\n586,082,872.02\n715,202,149.51\n865,876,028.52\n823,225,160.91\n878,430,928.79\n1,378,784,627.54\nMoney Market Instruments\n15,056,472.03\n \n15,711,655.30\n \n16,082,619.50\n \n1,843,391.22\n \n4,659,433.86\n \n4,243,581.90\n \n2,137,443.55\n \n3,182,683.74\n \n2,685,488.92\n \n3,497,226.23\n \n4,173,191.32\n \n42,811,406.21\n \n7,317,942.35\n \nSource:Reserve Bank of Zimbabwe, 2024\n \n \n17 \n \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nOther \n Notes &\n&\nwith\nOther Depository \nwith\non\nLocal Governemt\nOther2\nGovernment\nLocal \nPublic \n Institutional \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nsecurities\nGovernment\nEnterprises\nUnits\nAssets\n2021\nJan\n1,483.3\n \n42,733.9\n \n77,994.4\n \n13,109.2\n \n40,071.8\n \n10,922.0\n10,322.7\n10.2\n0.0\n212.4\n16.7\n18.0\n1,264.3\n77,984.0\n5,315.2\n25,036.2\n15,951.2\n41,028.5\n363,474.0\nFeb\n1,735.4\n \n41,180.7\n \n76,140.3\n \n17,748.1\n \n39,141.4\n \n6,341.4\n15,612.1\n9.2\n0.0\n238.0\n24.1\n22.7\n1,493.7\n84,845.3\n5,413.6\n28,339.2\n19,441.2\n42,761.3\n380,487.7\nMar\n1,457.1\n \n40,953.3\n \n83,032.1\n \n6,945.5\n \n42,516.8\n \n8,733.6\n17,602.7\n8.4\n19.2\n449.7\n15.2\n21.7\n1,400.3\n90,291.7\n4,912.2\n32,908.1\n22,849.5\n40,104.9\n394,221.9\nApr\n1,699.7\n \n40,964.4\n \n85,330.2\n \n6,844.8\n \n49,733.4\n \n7,679.0\n19,384.3\n7.7\n19.2\n571.8\n19.9\n12.7\n1,336.7\n104,118.1\n5,432.6\n34,537.9\n25,207.8\n41,034.6\n423,934.8\nMay\n1,906.1\n \n30,579.1\n \n94,330.9\n \n7,907.2\n \n63,644.8\n \n11,582.4\n19,197.1\n7.0\n152.7\n611.0\n21.8\n16.6\n1,263.7\n111,185.7\n5,063.0\n35,592.3\n24,975.4\n40,256.6\n448,293.6\nJun\n1,702.8\n \n30,255.6\n \n75,795.2\n \n25,605.9\n \n72,780.6\n \n17,601.3\n17,610.8\n6.5\n19.5\n1,385.2\n17.9\n77.8\n1,511.9\n125,592.3\n5,203.8\n26,856.5\n29,616.4\n42,418.7\n474,058.5\nJul\n2,139.9\n \n30,509.1\n \n104,983.5\n \n17,817.9\n \n82,032.9\n \n25,314.3\n23,160.6\n6.0\n290.8\n1,264.1\n17.3\n67.8\n1,351.1\n135,107.8\n5,762.2\n26,869.2\n33,897.2\n42,726.7\n533,318.3\nAug\n2,551.1\n \n33,323.4\n \n93,806.9\n \n11,919.2\n \n72,753.9\n \n25,194.9\n35,371.1\n5.4\n339.7\n1,111.2\n22.5\n63.9\n1,583.3\n150,558.7\n7,014.2\n32,281.1\n34,820.2\n46,819.4\n549,540.1\nSep\n2,853.7\n \n38,500.1\n \n100,996.0\n \n8,626.8\n \n68,707.9\n \n25,023.4\n36,196.3\n5.1\n366.9\n948.5\n21.1\n62.5\n1,531.1\n154,818.9\n6,587.8\n31,981.0\n35,461.8\n45,544.7\n558,233.5\nOct\n2,611.1\n \n50,074.7\n \n108,009.2\n \n9,575.8\n \n89,822.4\n \n26,924.2\n43,786.5\n4.3\n188.1\n1,054.2\n21.2\n75.4\n1,683.9\n172,358.5\n6,987.7\n49,581.0\n47,370.6\n47,611.9\n657,740.6\nNov\n2,721.5\n \n53,424.3\n \n107,781.7\n \n15,560.6\n \n74,072.3\n \n29,748.5\n47,418.1\n3.7\n187.0\n2,678.7\n21.2\n74.8\n1,882.5\n195,765.6\n7,682.2\n52,327.7\n45,567.2\n54,967.5\n691,885.0\nDec\n2,838.3\n \n50,031.0\n \n118,451.3\n \n13,654.0\n \n91,352.6\n \n33,690.9\n41,452.1\n3.0\n186.0\n6,192.4\n21.1\n167.5\n2,998.6\n212,438.0\n14,917.3\n60,917.0\n48,759.9\n71,817.7\n769,888.8\n2022\nJan\n2,891.2\n \n53,378.3\n \n116,654.8\n \n13,232.3\n \n69,668.2\n \n30,774.3\n40,241.6\n2.4\n186.8\n2,906.7\n20.3\n163.0\n4,023.2\n228,616.6\n16,284.0\n53,627.8\n55,303.6\n85,737.0\n773,712.0\nFeb\n2,577.7\n \n62,064.5\n \n122,479.8\n \n17,480.5\n \n76,802.2\n \n28,703.5\n49,241.8\n1.6\n0.0\n3,242.5\n20.3\n158.1\n5,761.9\n249,205.9\n16,681.8\n55,099.6\n59,171.4\n86,732.0\n835,425.0\nMar\n2,111.5\n \n76,544.2\n \n142,962.5\n \n19,239.6\n \n87,884.5\n \n43,284.1\n50,566.9\n0.9\n0.0\n2,970.2\n19.4\n253.4\n6,635.8\n296,282.4\n16,435.1\n65,660.6\n69,287.0\n94,293.1\n974,431.2\nApr\n2,624.9\n \n74,716.9\n \n160,466.5\n \n28,352.1\n \n123,190.3\n \n26,628.8\n63,944.8\n0.2\n0.0\n2,583.9\n37.5\n252.4\n7,258.1\n338,207.2\n30,154.8\n53,372.3\n73,993.0\n90,352.8\n1,076,136.5\nMay\n3,155.9\n \n142,118.9\n \n236,166.0\n \n35,928.9\n \n207,812.8\n \n61,757.6\n70,936.8\n0.0\n155.0\n3,762.8\n41.3\n289.0\n16,588.0\n455,287.9\n36,125.5\n134,993.5\n111,577.7\n130,617.1\n1,647,314.7\nJun\n2,801.2\n \n138,347.1\n \n266,691.8\n \n45,952.0\n \n241,920.1\n \n63,631.8\n86,890.0\n0.0\n654.0\n5,297.4\n61.2\n226.3\n14,282.6\n549,799.2\n38,578.3\n169,511.8\n130,604.3\n205,601.3\n1,960,850.3\nJul\n2,427.6\n \n159,024.6\n \n315,832.5\n \n39,388.2\n \n230,432.5\n \n41,246.8\n91,509.2\n0.0\n394.3\n4,940.5\n100.7\n349.7\n22,911.0\n638,556.7\n45,361.4\n144,090.2\n143,606.3\n242,024.6\n2,122,196.7\nAug\n2,640.6\n \n263,637.4\n \n411,439.9\n \n69,203.5\n \n311,107.0\n \n29,186.6\n100,187.1\n0.0\n330.1\n6,912.2\n113.5\n287.1\n46,504.1\n764,466.3\n46,788.2\n167,029.4\n251,442.9\n244,934.2\n2,716,210.1\nSep\n3,030.7\n \n289,230.8\n \n504,071.1\n \n75,446.7\n \n417,007.1\n \n18,185.0\n143,464.9\n0.0\n267.4\n8,265.9\n115.1\n306.3\n41,560.9\n902,078.3\n51,664.5\n146,133.1\n231,760.0\n285,781.8\n3,118,369.8\nOct\n3,022.6\n \n300,240.3\n \n525,870.3\n \n104,483.2\n \n389,979.7\n \n22,895.3\n151,757.7\n0.0\n204.7\n4,590.6\n116.5\n342.0\n43,335.5\n936,397.1\n58,632.8\n165,306.9\n267,183.8\n298,996.3\n3,273,355.4\nNov\n3,251.4\n \n286,365.2\n \n575,885.7\n \n111,716.1\n \n342,790.1\n \n17,089.0\n198,814.4\n0.0\n142.0\n6,078.2\n119.5\n303.6\n43,195.4\n1,042,144.5\n73,069.8\n170,944.8\n232,107.1\n302,373.7\n3,406,390.5\nDec\n3,361.7\n \n295,435.1\n \n652,284.4\n \n119,932.8\n \n351,906.8\n \n7,965.4\n288,844.0\n0.0\n20,072.7\n8,831.7\n114.4\n282.6\n30,272.3\n1,143,910.8\n84,048.5\n159,126.2\n234,748.7\n418,944.7\n3,820,082.5\n2023\nJan\n4,923.3\n \n379,841.7\n \n704,168.6\n \n151,980.1\n \n389,342.8\n \n-1,443.6\n319,807.4\n0.0\n23,774.5\n8,624.7\n228.5\n251.2\n44,113.2\n1,348,919.7\n137,477.6\n227,545.4\n251,246.0\n451,149.8\n4,441,950.8\nFeb\n1,880.1\n \n436,062.8\n \n743,888.5\n \n81,067.5\n \n518,081.0\n \n21,964.4\n332,626.9\n0.0\n26,717.2\n6,974.7\n319.0\n197.4\n44,691.5\n1,538,078.6\n142,383.8\n226,933.0\n281,339.4\n490,831.3\n4,894,037.1\nMar\n2,031.6\n \n425,326.5\n \n817,631.1\n \n112,374.3\n \n531,935.4\n \n41,928.7\n360,626.2\n0.0\n24,689.0\n10,382.7\n432.2\n149.8\n48,725.4\n1,745,783.1\n166,893.5\n554,840.9\n315,882.3\n532,130.1\n5,691,762.4\nApr\n1,844.7\n \n462,081.4\n \n972,122.7\n \n161,740.7\n \n620,095.0\n \n32,207.0\n391,587.8\n0.0\n28,119.0\n19,573.0\n559.8\n99.3\n54,058.4\n1,822,350.9\n178,895.0\n214,270.9\n411,870.0\n572,012.3\n5,943,487.7\nMay\n1,107.2\n \n1,048,116.4\n \n2,049,066.1\n \n309,234.1\n \n1,554,969.0\n \n84,147.3\n653,025.9\n0.0\n76,351.5\n16,564.4\n4,599.1\n80.3\n112,188.1\n4,068,894.1\n366,505.1\n607,438.1\n788,546.8\n884,349.9\n12,625,183.4\nJun\n1,984.5\n \n2,249,201.6\n \n4,424,350.0\n \n471,360.3\n \n3,050,984.1\n \n390,369.2\n981,773.8\n0.0\n212,126.8\n8,070.8\n18,582.4\n83.0\n260,946.3\n8,977,244.2\n669,100.1\n1,390,786.2\n1,582,985.5\n2,782,639.3\n27,472,588.1\nJul\n1,489.0\n \n1,584,403.3\n \n4,137,377.2\n \n380,493.0\n \n3,132,849.9\n \n369,552.6\n1,242,045.2\n0.0\n165,764.7\n17,713.9\n7,368.1\n68.1\n208,253.7\n7,144,225.5\n821,517.0\n829,382.3\n1,411,037.1\n3,124,457.4\n24,577,997.9\nAug\n2,292.1\n \n1,505,916.2\n \n4,651,358.8\n \n448,025.8\n \n3,179,274.3\n \n245,546.0\n1,190,599.0\n0.0\n165,103.2\n7,939.8\n7,469.9\n75.8\n205,341.5\n7,142,066.9\n817,682.7\n701,626.2\n1,348,230.8\n3,086,091.3\n24,704,640.2\nSep\n2,465.6\n \n2,015,621.6\n \n5,263,338.5\n \n560,033.8\n \n3,210,332.7\n \n305,649.1\n1,318,582.7\n0.0\n175,013.5\n10,773.5\n9,935.8\n92.0\n219,878.9\n8,628,418.0\n892,737.1\n776,997.6\n1,646,406.8\n3,310,710.4\n28,346,987.7\nOct\n2,425.4\n \n2,312,575.1\n \n5,910,277.9\n \n751,077.6\n \n2,663,186.5\n \n240,258.0\n1,272,839.7\n0.0\n190,359.3\n21,408.8\n10,816.8\n98.1\n237,525.7\n9,281,352.1\n844,462.4\n958,746.4\n1,741,207.9\n3,433,150.2\n29,871,767.9\nNov\n2,705.3\n \n2,558,589.3\n \n6,324,144.1\n \n730,377.0\n \n2,788,783.6\n \n230,917.5\n1,517,348.4\n0.0\n188,949.4\n34,470.7\n10,921.4\n59.8\n238,702.3\n9,523,818.5\n907,759.0\n1,046,257.0\n2,150,227.0\n3,544,388.6\n31,798,418.9\nDec\n3,398.4\n \n2,868,505.6\n \n5,973,706.9\n \n918,524.5\n \n2,631,445.7\n \n212,294.5\n2,627,512.6\n0.0\n182,480.9\n38,249.3\n12,325.3\n73.5\n248,699.8\n10,110,961.4\n984,502.1\n1,184,706.9\n2,319,603.9\n4,087,896.6\n34,404,887.7\n2024\nJan\n2,947.9\n \n5,196,670.6\n \n9,096,074.6\n \n1,414,527.9\n \n3,957,664.6\n \n326,220.5\n4,283,761.8\n0.0\n306,771.2\n57,595.6\n17,912.4\n198.8\n374,088.3\n16,298,021.8 1,109,251.7\n1,949,662.4\n3,467,246.2\n5,133,753.8\n52,992,370.2\nSource:Reserve Bank of Zimbabwe, 2024\nNotes\n1.Government securities includes treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations.\nPublic Enterprises\nTABLE 4.1: OTHER DEPOSITORY CORPORATIONS -ASSETS\nZWL$ millions\nDebt Securities\nLoans and Advances\nGovernment1 \nSecurities\n \n \n18 \n \n \n \n \nEnd of\n2021\nJan\n188,337.3\n17,667.3\n11,376.7\n217,381.3\n2,730.8\n5,453.7\n225,565.8\n1,422.4\n15,750.7\n391.1\n600.9\n376.7\n58,123.9\n25,036.2\n36,206.3\n363,474.0\nFeb\n189,154.3\n18,991.1\n14,072.8\n222,218.2\n2,959.1\n4,788.2\n229,965.5\n1,457.4\n15,908.6\n409.2\n581.4\n609.9\n63,583.8\n28,339.2\n39,632.7\n380,487.7\nMar\n193,674.2\n21,569.9\n14,209.4\n229,453.4\n4,691.2\n4,875.8\n239,020.5\n1,641.2\n14,997.2\n75.4\n1,378.2\n408.9\n67,061.8\n32,908.1\n36,730.7\n394,221.9\nApr\n219,936.5\n23,818.3\n13,746.7\n257,501.5\n2,725.1\n5,382.5\n265,609.2\n1,503.8\n15,748.4\n176.5\n939.0\n409.9\n68,812.8\n34,537.9\n36,197.4\n423,934.8\nMay\n232,585.8\n26,296.1\n18,415.5\n277,297.4\n2,205.9\n6,832.6\n286,335.9\n1,525.8\n16,063.1\n654.2\n540.1\n429.0\n69,567.0\n35,592.3\n37,586.2\n448,293.6\nJun\n249,167.5\n27,977.7\n21,449.6\n298,594.8\n2,906.1\n6,295.3\n307,796.2\n1,559.7\n15,430.6\n662.3\n939.0\n462.6\n72,403.8\n26,856.5\n47,947.9\n474,058.5\nJul\n271,359.4\n31,671.3\n23,074.4\n326,105.1\n3,016.7\n5,050.7\n334,172.4\n1,523.2\n16,041.4\n706.9\n750.8\n552.8\n76,406.3\n26,869.2\n76,295.4\n533,318.3\nAug\n275,007.8\n29,893.2\n29,352.2\n334,253.2\n3,661.5\n5,912.2\n343,826.8\n1,873.1\n18,699.5\n1,444.4\n2,300.1\n478.6\n82,627.2\n32,281.1\n66,009.2\n549,540.1\nSep\n301,829.4\n30,564.7\n26,426.5\n358,820.7\n3,719.1\n3,512.9\n366,052.6\n3,191.9\n16,236.1\n1,453.1\n71.3\n375.4\n84,564.6\n31,981.0\n54,307.5\n558,233.5\nOct\n350,366.7\n33,145.0\n27,967.9\n411,479.6\n2,824.1\n3,162.8\n417,466.5\n3,729.7\n21,509.9\n1,095.3\n1,109.9\n503.1\n92,871.8\n49,581.0\n69,873.5\n657,740.6\nNov\n363,455.0\n33,905.6\n33,256.8\n430,617.4\n3,325.7\n2,899.2\n436,842.3\n4,007.8\n19,465.9\n2,726.5\n1,556.1\n347.1\n104,310.9\n52,327.7\n70,300.6\n691,885.0\nDec\n396,412.5\n33,935.5\n37,464.8\n467,812.7\n3,922.1\n4,020.7\n475,755.5\n3,696.3\n23,643.2\n2,808.1\n2,405.3\n139.8\n128,421.4\n60,917.0\n72,102.3\n769,888.8\n2022\nJan\n392,702.2\n32,298.0\n39,346.3\n464,346.5\n2,962.5\n4,027.0\n471,336.0\n3,685.3\n25,398.5\n2,688.6\n1,416.9\n230.5\n144,852.4\n53,627.8\n70,476.0\n773,712.0\nFeb\n413,978.3\n37,494.3\n47,592.5\n499,065.1\n3,229.3\n4,407.7\n506,702.1\n4,456.2\n30,483.6\n2,120.4\n1,769.7\n226.8\n153,788.5\n55,099.6\n80,778.2\n835,425.0\nMar\n488,137.1\n37,893.9\n54,213.9\n580,244.9\n3,062.2\n5,330.5\n588,637.7\n4,510.9\n33,995.7\n2,137.9\n3,281.0\n810.6\n175,156.3\n65,660.6\n100,240.6\n974,431.2\nApr\n562,613.7\n46,129.7\n52,760.1\n661,503.5\n6,377.5\n7,656.8\n675,537.9\n4,246.9\n38,472.7\n2,173.0\n3,877.2\n486.8\n178,614.3\n53,372.3\n119,355.4\n1,076,136.5\nMay\n830,166.0\n61,112.6\n70,113.9\n961,392.5\n7,310.9\n7,417.6\n976,120.9\n6,165.3\n73,411.8\n2,383.3\n3,241.0\n321.8\n243,544.4\n134,993.5\n207,132.5\n1,647,314.7\nJun\n961,316.9\n66,716.9\n81,118.5\n1,109,152.4\n5,627.3\n10,226.2\n1,125,005.9\n7,157.9\n83,048.1\n2,898.5\n4,589.8\n345.2\n355,060.9\n169,511.8\n213,232.2\n1,960,850.3\nJul\n1,016,820.2\n79,550.5\n94,495.2\n1,190,865.8\n1,789.6\n9,363.5\n1,202,018.9\n8,137.9\n100,313.8\n2,814.9\n5,020.5\n1,339.1\n419,883.3\n144,090.2\n238,578.1\n2,122,196.7\nAug\n1,367,431.3\n85,931.5\n134,512.9\n1,587,875.7\n2,415.4\n7,892.4\n1,598,183.5\n12,785.6\n119,851.6\n3,230.7\n5,771.2\n555.2\n491,336.5\n167,029.4\n317,466.4\n2,716,210.1\nSep\n1,648,027.7\n92,678.5\n157,504.6\n1,898,210.8\n1,482.9\n8,707.2\n1,908,401.0\n14,047.5\n143,842.3\n3,720.2\n9,246.7\n587.2\n553,942.2\n146,133.1\n338,449.6\n3,118,369.8\nOct\n1,615,381.5\n76,774.2\n166,880.7\n1,859,036.4\n2,028.0\n6,673.7\n1,867,738.0\n15,558.9\n153,649.9\n28,072.2\n8,610.3\n762.5\n581,740.3\n165,306.9\n451,916.4\n3,273,355.4\nNov\n1,771,644.8\n81,518.1\n189,465.9\n2,042,628.9\n1,547.6\n6,731.4\n2,050,907.9\n13,438.5\n139,370.8\n19,973.5\n10,489.1\n339.6\n612,977.2\n170,944.8\n387,949.1\n3,406,390.5\nDec\n1,990,867.6\n90,317.0\n234,004.4\n2,315,189.0\n2,754.1\n7,866.7\n2,325,809.8\n14,149.0\n177,214.1\n10,597.8\n15,234.4\n752.5\n750,161.5\n159,126.2\n367,037.4\n3,820,082.5\n2023\nJan\n2,270,946.6\n100,094.1\n275,805.1\n2,646,845.8\n1,676.5\n41,821.3\n2,690,343.7\n15,056.5\n196,129.5\n4,974.3\n12,291.7\n675.5\n881,874.7\n227,545.4\n413,059.5\n4,441,950.8\nFeb\n2,496,192.1\n98,177.2\n294,332.5\n2,888,701.8\n1,956.9\n11,040.2\n2,901,698.9\n15,711.7\n225,209.4\n8,092.9\n20,822.5\n3,109.0\n951,831.6\n226,933.0\n540,628.1\n4,894,037.1\nMar\n2,710,394.6\n121,937.7\n333,589.3\n3,165,921.6\n1,430.8\n6,188.7\n3,173,541.1\n16,082.6\n256,206.0\n9,639.9\n22,996.8\n3,714.6\n1,036,325.4\n554,840.9\n618,415.2\n5,691,762.4\nApr\n3,144,048.4\n159,872.5\n269,932.0\n3,573,852.9\n573.4\n9,702.2\n3,584,128.5\n1,843.4\n318,092.2\n13,321.9\n29,787.9\n6,418.8\n1,137,637.3\n214,270.9\n637,986.8\n5,943,487.7\nMay\n6,481,742.5\n169,496.7\n556,927.2\n7,208,166.4\n1,068.6\n50,511.7\n7,259,746.7\n4,659.4\n783,531.0\n78,332.6\n74,083.0\n30,583.3\n2,224,856.6\n607,438.1\n1,561,952.6\n12,625,183.4\nJun\n12,937,869.2\n240,252.2\n1,073,317.8\n14,251,439.2\n4,578.8\n432,610.2\n14,688,628.1\n4,243.6\n1,833,341.2\n39,166.6\n112,338.9\n64,321.9\n6,245,056.0\n1,390,786.2\n3,094,705.7\n27,472,588.1\nJul\n11,864,787.9\n285,723.5\n828,095.7\n12,978,607.1\n30,380.7\n380,435.8\n13,389,423.7\n2,137.4\n1,458,906.6\n87,827.2\n160,696.4\n58,256.2\n5,865,068.7\n829,382.3\n2,726,299.5\n24,577,997.9\nAug\n12,168,928.8\n353,674.2\n862,852.8\n13,385,455.8\n23,457.8\n381,525.5\n13,790,439.1\n3,182.7\n1,483,108.2\n84,841.4\n154,160.3\n56,751.6\n5,646,934.2\n701,626.2\n2,783,596.5\n24,704,640.2\nSep\n14,342,241.3\n404,040.4\n947,184.1\n15,693,465.8\n11,309.1\n114,502.6\n15,819,277.6\n2,685.5\n1,688,992.2\n82,493.4\n168,880.8\n90,032.4\n6,410,594.6\n776,997.6\n3,307,033.6\n28,346,987.7\nOct\n15,103,817.1\n439,336.7\n1,190,702.7\n16,733,856.4\n8,575.8\n147,053.3\n16,889,485.5\n3,497.2\n1,573,857.1\n84,628.9\n176,455.5\n83,441.8\n6,756,087.7\n958,746.4\n3,345,567.7\n29,871,767.9\nNov\n15,816,643.6\n534,621.6\n1,241,055.7\n17,592,320.9\n92,509.4\n133,475.4\n17,818,305.6\n4,173.2\n1,784,153.1\n92,939.9\n244,115.1\n89,997.7\n7,059,070.8\n1,046,257.0\n3,659,406.4\n31,798,418.9\nDec\n16,937,697.1\n613,283.2\n1,290,630.5\n18,841,610.7\n94,004.9\n201,484.9\n19,137,100.5\n42,811.4\n1,831,385.7\n55,157.4\n162,437.9\n138,722.6\n7,736,287.7\n1,184,706.9\n4,116,277.7\n34,404,887.7\n2024\nJan\n26,686,959.6\n746,212.0\n1,754,255.7\n29,187,427.3\n113,265.9\n169,629.6\n29,470,322.8\n7,317.9\n3,007,687.4\n114,298.0\n290,202.8\n182,727.0\n11,623,761.9\n1,949,662.4\n6,346,389.9\n52,992,370.2\nSource: Reserve Bank of Zimbabwe, 2024\nTOTAL\nTime Deposits\nSavings\nDemand\nGovernment \nTotal\nOther Finacial \nCorporations\nCapital and \nReserves\nContigent \nLiabilities\nOther \nLiabilities\nOther \nDepository \nTotal Deposits from \nthe Public \nOther Depository \nCorporations\nDebt Securities\nForeign \nLiabilities\nRBZ\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\nZWL$ millions\n \n \n19 \n \n \n \n \nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nOther \nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment\n1\nLocal Governemt\nPublic Enterprises\nOther\n2\nGovernment\nGovernment\nEnterprises\n Institutional Units\n3\nOther claims\nAssets\nOther Assets\nAssets\nTOTAL\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2021\nJan\n1,237.43\n \n39,565.64\n \n71,463.64\n \n12,288.89\n \n39,092.85\n \n10,921.99\n \n8,281.80\n \n-\n \n-\n \n1.18\n \n16.67\n \n18.01\n \n1,264.28\n \n71,090.96\n \n718.83\n \n25,036.22\n \n12,333.21\n \n32,123.11\n \n325,454.7\n \nFeb\n1,320.27\n \n38,100.03\n \n69,341.48\n \n16,867.76\n \n38,108.83\n \n6,341.39\n \n12,518.15\n \n-\n \n-\n \n1.26\n \n24.15\n \n22.69\n \n1,493.66\n \n77,324.34\n \n774.89\n \n28,339.17\n \n15,953.14\n \n33,612.14\n \n340,143.4\n \nMar\n1,244.16\n \n38,369.53\n \n76,479.44\n \n5,317.61\n \n41,401.24\n \n8,733.65\n \n15,889.61\n \n-\n \n19.21\n \n34.56\n \n15.17\n \n21.67\n \n1,309.75\n \n80,607.03\n \n878.97\n \n32,908.13\n \n19,302.34\n \n30,861.86\n \n353,393.9\n \nApr\n1,430.83\n \n38,008.89\n \n79,592.64\n \n5,639.40\n \n48,564.03\n \n7,679.05\n \n18,267.01\n \n-\n \n19.23\n \n62.89\n \n19.86\n \n12.71\n \n1,336.70\n \n91,062.16\n \n956.75\n \n34,537.88\n \n21,214.88\n \n32,383.77\n \n380,788.7\n \nMay\n1,648.09\n \n28,677.21\n \n87,611.51\n \n6,479.66\n \n59,745.10\n \n11,582.44\n \n18,846.75\n \n-\n \n152.75\n \n93.37\n \n21.77\n \n16.58\n \n1,263.75\n \n94,790.46\n \n990.41\n \n35,592.28\n \n21,398.95\n \n31,307.45\n \n400,218.5\n \nJun\n1,419.27\n \n28,452.53\n \n69,413.26\n \n24,215.35\n \n70,835.98\n \n17,601.31\n \n17,152.75\n \n-\n \n19.46\n \n92.91\n \n17.91\n \n77.79\n \n1,511.86\n \n106,954.15\n \n1,247.08\n \n26,856.45\n \n26,444.57\n \n33,288.94\n \n425,601.6\n \nJul\n1,794.72\n \n29,100.73\n \n97,429.50\n \n15,901.02\n \n79,937.02\n \n25,314.30\n \n21,665.10\n \n-\n \n290.76\n \n47.39\n \n17.32\n \n67.80\n \n1,351.13\n \n117,348.16\n \n1,301.18\n \n26,869.18\n \n29,079.64\n \n33,587.68\n \n481,102.6\n \nAug\n2,137.72\n \n31,734.84\n \n85,441.98\n \n9,099.10\n \n70,391.64\n \n25,194.95\n \n31,434.20\n \n-\n \n339.72\n \n51.28\n \n22.49\n \n63.94\n \n1,583.28\n \n132,522.63\n \n1,337.19\n \n32,281.12\n \n30,022.43\n \n37,697.05\n \n491,355.6\n \nSep\n2,417.81\n \n36,259.54\n \n93,032.71\n \n6,164.78\n \n66,640.78\n \n25,023.38\n \n31,460.81\n \n-\n \n366.88\n \n57.60\n \n21.07\n \n62.45\n \n1,531.08\n \n134,780.92\n \n1,342.62\n \n31,980.97\n \n30,439.34\n \n34,630.85\n \n496,213.6\n \nOct\n1,993.06\n \n47,379.62\n \n99,470.02\n \n7,339.71\n \n86,302.62\n \n26,924.18\n \n37,639.16\n \n-\n \n188.07\n \n121.59\n \n21.20\n \n75.41\n \n1,683.89\n \n149,477.36\n \n1,523.34\n \n49,580.96\n \n40,853.06\n \n36,664.31\n \n587,237.6\n \nNov\n2,168.80\n \n49,327.15\n \n100,125.90\n \n12,723.73\n \n71,667.33\n \n29,748.47\n \n41,015.56\n \n-\n \n187.03\n \n999.12\n \n21.24\n \n74.76\n \n1,882.53\n \n168,661.25\n \n1,484.24\n \n52,327.68\n \n40,073.22\n \n43,878.52\n \n616,366.5\n \nDec\n2,315.32\n \n46,412.99\n \n109,803.84\n \n10,942.92\n \n87,347.07\n \n33,690.93\n \n38,610.29\n \n-\n \n185.99\n \n4,146.13\n \n21.09\n \n167.53\n \n2,798.61\n \n184,836.87\n \n3,368.75\n \n60,916.98\n \n41,811.67\n \n59,011.63\n \n686,388.6\n \n2022\nJan\n2,359.27\n \n49,206.02\n \n108,119.97\n \n10,419.90\n \n66,808.45\n \n30,774.31\n \n38,636.84\n \n-\n \n186.80\n \n801.50\n \n20.33\n \n163.02\n \n3,628.73\n \n199,495.34\n \n2,997.94\n \n53,627.76\n \n47,405.91\n \n69,989.80\n \n684,641.9\n \nFeb\n1,971.78\n \n57,553.54\n \n112,522.99\n \n14,300.66\n \n70,750.63\n \n28,703.53\n \n44,705.21\n \n-\n \n-\n \n976.55\n \n20.34\n \n158.06\n \n5,367.16\n \n215,520.37\n \n3,055.50\n \n55,099.61\n \n53,459.12\n \n70,832.47\n \n734,997.5\n \nMar\n1,541.49\n \n70,856.33\n \n130,423.48\n \n15,503.46\n \n82,662.70\n \n43,284.13\n \n44,874.23\n \n-\n \n-\n \n1,380.20\n \n19.40\n \n253.42\n \n6,240.94\n \n258,715.05\n \n3,092.69\n \n65,660.61\n \n58,874.69\n \n76,938.87\n \n860,321.7\n \nApr\n1,939.64\n \n70,204.43\n \n144,168.02\n \n23,452.88\n \n117,033.42\n \n26,628.79\n \n57,772.47\n \n-\n \n-\n \n722.54\n \n37.54\n \n252.44\n \n6,858.06\n \n305,476.79\n \n4,348.46\n \n53,372.28\n \n62,788.55\n \n71,414.75\n \n946,471.1\n \nMay\n2,397.94\n \n131,996.38\n \n211,837.59\n \n31,586.61\n \n190,366.81\n \n61,757.62\n \n64,373.91\n \n-\n \n154.99\n \n1,559.14\n \n41.28\n \n289.00\n \n16,193.81\n \n398,048.90\n \n4,712.74\n \n134,993.54\n \n94,851.60\n \n111,543.84\n \n1,456,705.7\n \nJun\n2,263.18\n \n127,839.16\n \n234,109.43\n \n40,937.28\n \n219,607.39\n \n63,631.76\n \n83,690.44\n \n-\n \n653.97\n \n2,159.12\n \n61.20\n \n226.29\n \n13,888.60\n \n478,163.38\n \n8,954.46\n \n169,511.81\n \n110,528.09\n \n168,440.54\n \n1,724,666.1\n \nJul\n1,578.47\n \n147,217.74\n \n284,912.89\n \n34,334.13\n \n202,815.28\n \n41,246.78\n \n86,971.63\n \n-\n \n394.34\n \n1,852.14\n \n100.65\n \n349.68\n \n22,516.21\n \n556,692.12\n \n9,737.92\n \n144,090.18\n \n129,869.55\n \n192,524.32\n \n1,857,204.0\n \nAug\n1,630.70\n \n247,190.46\n \n377,078.80\n \n64,650.96\n \n273,181.97\n \n29,186.59\n \n95,346.12\n \n-\n \n330.12\n \n3,556.96\n \n113.50\n \n287.14\n \n26,564.57\n \n681,253.30\n \n11,493.92\n \n167,029.36\n \n238,442.98\n \n194,745.11\n \n2,412,082.6\n \nSep\n1,791.71\n \n270,594.59\n \n465,301.31\n \n68,020.95\n \n370,323.69\n \n18,184.96\n \n134,414.53\n \n-\n \n267.40\n \n4,916.56\n \n115.11\n \n306.33\n \n21,773.50\n \n806,774.24\n \n12,680.89\n \n146,133.14\n \n215,417.68\n \n219,933.24\n \n2,756,949.8\n \nOct\n1,704.79\n \n281,204.64\n \n480,106.49\n \n94,573.08\n \n343,440.15\n \n22,895.35\n \n136,939.74\n \n-\n \n204.69\n \n2,201.55\n \n116.48\n \n341.96\n \n22,935.50\n \n852,069.39\n \n15,525.65\n \n165,306.91\n \n232,188.99\n \n245,924.22\n \n2,897,679.6\n \nNov\n1,644.95\n \n259,109.18\n \n533,438.97\n \n101,870.32\n \n299,715.01\n \n17,089.04\n \n180,534.44\n \n-\n \n141.97\n \n2,292.28\n \n119.53\n \n303.55\n \n22,178.73\n \n960,814.77\n \n15,450.39\n \n170,944.78\n \n196,338.19\n \n250,551.19\n \n3,012,537.3\n \nDec\n1,778.71\n \n263,863.65\n \n603,136.26\n \n110,935.77\n \n299,087.30\n \n7,965.37\n \n266,725.41\n \n-\n \n79.26\n \n3,887.78\n \n114.42\n \n282.61\n \n30,272.25\n \n1,066,654.12\n \n16,130.63\n \n159,126.16\n \n189,560.01\n \n344,235.10\n \n3,363,834.8\n \n2023\nJan\n2,391.61\n \n340,953.56\n \n654,740.29\n \n143,455.70\n \n335,380.17\n \n(1,443.59)\n \n301,026.07\n \n-\n \n105.97\n \n4,873.87\n \n228.45\n \n251.24\n \n44,113.17\n \n1,307,512.98\n \n17,767.70\n \n227,545.42\n \n204,830.78\n \n374,080.77\n \n3,957,814.2\n \nFeb\n1,470.56\n \n366,544.71\n \n691,937.49\n \n71,097.36\n \n452,795.43\n \n21,074.53\n \n306,913.92\n \n-\n \n50.02\n \n1,524.98\n \n318.96\n \n197.44\n \n44,691.50\n \n1,481,851.05\n \n18,037.18\n \n226,932.96\n \n224,983.29\n \n411,002.80\n \n4,321,424.2\n \nMar\n1,771.98\n \n344,570.46\n \n755,463.34\n \n103,284.07\n \n478,333.21\n \n41,928.66\n \n330,669.68\n \n-\n \n-\n \n3,884.11\n \n432.22\n \n149.78\n \n48,725.38\n \n1,679,284.89\n \n28,439.56\n \n554,840.85\n \n254,605.57\n \n438,790.17\n \n5,065,173.9\n \nApr\n1,631.24\n \n388,822.83\n \n903,029.49\n \n144,252.31\n \n555,886.92\n \n32,206.95\n \n361,846.09\n \n-\n \n-\n \n8,716.45\n \n559.82\n \n99.28\n \n54,058.39\n \n1,722,384.40\n \n28,899.91\n \n214,270.92\n \n321,765.39\n \n476,263.19\n \n5,214,693.6\n \nMay\n1,010.26\n \n907,818.70\n \n1,932,225.57\n \n281,052.93\n \n1,351,116.97\n \n84,147.32\n \n570,367.60\n \n-\n \n-\n \n8,974.78\n \n4,599.15\n \n80.34\n \n112,188.06\n \n3,844,133.80\n \n65,696.39\n \n607,438.10\n \n669,908.72\n \n758,154.17\n \n11,198,912.9\n \nJun\n1,762.11\n \n1,979,000.71\n \n4,218,755.04\n \n444,538.09\n \n2,584,596.63\n \n350,042.51\n \n865,465.55\n \n-\n \n-\n \n221.09\n \n10,133.46\n \n8,052.34\n \n260,946.26\n \n8,487,837.63\n \n92,224.26\n \n1,390,786.24\n \n1,304,228.92\n \n2,222,499.38\n \n24,221,090.2\n \nJul\n1,305.13\n \n1,428,604.02\n \n3,898,282.53\n \n359,151.15\n \n2,646,743.26\n \n337,541.82\n \n1,133,463.14\n \n-\n \n-\n \n153.30\n \n7,368.09\n \n68.07\n \n208,253.70\n \n6,917,007.30\n \n129,308.58\n \n829,382.28\n \n1,155,945.57\n \n2,438,538.20\n \n21,491,116.1\n \nAug\n1,664.09\n \n1,370,651.81\n \n4,309,693.74\n \n391,792.23\n \n2,693,989.06\n \n208,098.88\n \n1,084,784.90\n \n-\n \n-\n \n138.30\n \n7,469.95\n \n75.80\n \n205,341.47\n \n6,863,348.14\n \n127,816.16\n \n701,626.16\n \n1,081,800.09\n \n2,446,465.02\n \n21,494,755.8\n \nSep\n1,503.56\n \n1,763,364.33\n \n4,914,305.55\n \n517,813.92\n \n2,760,807.78\n \n247,094.60\n \n1,204,684.14\n \n-\n \n-\n \n9.75\n \n9,935.82\n \n92.05\n \n219,878.94\n \n8,245,053.80\n \n151,685.43\n \n776,997.57\n \n1,312,147.78\n \n2,668,520.81\n \n24,793,895.8\n \nOct\n1,977.18\n \n2,059,471.85\n \n5,625,069.70\n \n562,790.91\n \n2,202,475.21\n \n175,235.94\n \n1,172,130.22\n \n-\n \n-\n \n0.03\n \n10,816.83\n \n98.06\n \n237,525.73\n \n8,864,363.09\n \n153,534.70\n \n958,746.42\n \n1,351,846.54\n \n2,767,099.33\n \n26,143,181.7\n \nNov\n2,295.18\n \n2,278,921.91\n \n5,913,094.15\n \n568,556.41\n \n2,451,981.00\n \n180,229.25\n \n1,337,040.40\n \n-\n \n-\n \n0.03\n \n10,921.42\n \n59.77\n \n238,702.30\n \n9,040,518.08\n \n158,702.11\n \n1,046,256.98\n \n1,702,370.26\n \n2,868,031.98\n \n27,797,681.2\n \nDec\n2,947.49\n \n2,536,437.97\n \n5,489,443.24\n \n657,432.63\n \n2,268,702.96\n \n155,742.88\n \n2,420,663.39\n \n-\n \n-\n \n0.03\n \n12,324.59\n \n73.45\n \n248,699.79\n \n9,507,281.46\n \n255,007.08\n \n1,184,706.91\n \n1,748,495.98\n \n3,349,062.31\n \n29,837,022.2\n \n2024\nJan\n2,536.36\n \n4,749,173.95\n \n8,535,153.83\n \n940,210.80\n \n3,564,879.01\n \n285,807.60\n \n3,972,600.87\n \n-\n \n-\n \n0.03\n \n17,912.41\n \n198.80\n \n374,088.29\n \n14,957,169.30\n \n312,516.30\n \n1,949,662.45\n \n2,737,500.88\n \n4,289,981.53\n \n46,689,392.4\n \nSource: Reserve Bank of Zimbabwe, 2024\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations. \nTABLE 5.1: COMMERCIAL BANKS -ASSETS\nZWL$ millions\nDebt Securities\nLoans and Advances\n \n \n20 \n \n \n \nZWL$ millions\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nDebt Securities Foreign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2021\nJan\n158,888.8\n28,456.6\n10,150.2\n197,495.5\n2,580.8\n5,423.4\n205,499.8\n1,142.5\n12,732.6\n391.1\n519.6\n376.7\n50,147.7\n25,036.2\n29,608.5\n325,454.7\nFeb\n162,092.2\n26,146.3\n12,239.7\n200,478.2\n2,809.1\n4,762.5\n208,049.7\n1,150.4\n12,833.2\n409.2\n540.7\n609.9\n54,930.3\n28,339.2\n33,280.7\n340,143.4\nMar\n165,101.1\n30,313.5\n12,276.4\n207,691.0\n4,541.2\n4,845.3\n217,077.6\n1,331.7\n11,620.2\n75.4\n1,136.7\n408.9\n58,208.9\n32,908.1\n30,626.5\n353,393.9\nApr\n191,923.5\n31,441.3\n11,549.5\n234,914.3\n2,195.0\n5,346.7\n242,455.9\n1,190.1\n11,503.5\n176.5\n757.1\n409.9\n60,361.3\n34,537.9\n29,396.5\n380,788.7\nMay\n194,108.9\n40,921.9\n15,896.4\n250,927.2\n1,705.9\n6,802.1\n259,435.2\n1,186.9\n11,783.3\n654.2\n145.2\n429.0\n61,202.0\n35,592.3\n29,790.4\n400,218.5\nJun\n211,950.0\n40,878.5\n18,536.0\n271,364.4\n2,696.6\n6,202.3\n280,263.2\n1,211.8\n11,575.5\n662.3\n368.5\n462.6\n63,417.5\n26,856.5\n40,783.7\n425,601.6\nJul\n226,860.1\n48,928.9\n19,775.4\n295,564.4\n2,991.7\n5,012.2\n303,568.3\n1,169.2\n12,552.8\n706.9\n476.2\n552.8\n66,514.1\n26,869.2\n68,693.1\n481,102.6\nAug\n237,167.0\n38,425.4\n25,114.2\n300,706.5\n3,601.5\n5,873.7\n310,181.7\n1,216.2\n13,354.7\n1,444.4\n1,678.3\n478.6\n72,123.3\n32,281.1\n58,597.3\n491,355.6\nSep\n263,598.2\n37,954.3\n21,954.4\n323,506.9\n3,643.0\n3,469.0\n330,618.9\n2,141.0\n11,770.4\n1,453.1\n-110.6\n375.4\n71,255.0\n31,981.0\n46,729.4\n496,213.6\nOct\n299,038.0\n50,766.0\n22,882.7\n372,686.7\n2,824.1\n3,023.7\n378,534.5\n2,411.8\n14,077.4\n1,095.3\n1,109.9\n503.1\n78,644.6\n49,581.0\n61,280.0\n587,237.6\nNov\n307,063.4\n52,309.9\n27,875.3\n387,248.6\n3,325.7\n2,764.9\n393,339.3\n2,869.4\n12,437.2\n2,726.5\n1,352.5\n347.1\n89,288.6\n52,327.7\n61,678.3\n616,366.5\nDec\n334,599.0\n58,318.5\n30,455.6\n423,373.1\n3,842.1\n3,855.7\n431,070.9\n3,027.0\n13,896.4\n2,808.1\n1,693.3\n139.8\n109,665.4\n60,917.0\n63,170.8\n686,388.6\n2022\nJan\n346,619.5\n43,438.8\n31,158.1\n421,216.4\n2,962.5\n3,864.8\n428,043.7\n2,995.6\n14,406.9\n2,688.6\n1,043.2\n230.5\n122,752.1\n53,627.8\n58,853.6\n684,641.9\nFeb\n358,979.4\n51,510.7\n38,313.7\n448,803.8\n3,229.3\n4,248.7\n456,281.8\n3,834.1\n16,267.7\n2,120.4\n1,338.1\n226.8\n130,981.3\n55,099.6\n68,847.8\n734,997.5\nMar\n422,934.6\n58,283.5\n42,258.5\n523,476.6\n3,062.2\n5,171.3\n531,710.2\n3,850.2\n18,374.8\n2,137.9\n2,779.1\n810.6\n149,781.8\n65,660.6\n85,216.5\n860,321.7\nApr\n479,558.7\n74,880.3\n40,491.0\n594,930.0\n6,377.5\n7,486.7\n608,794.2\n3,792.3\n21,445.6\n2,173.0\n3,173.0\n486.8\n149,610.1\n53,372.3\n103,623.7\n946,471.1\nMay\n666,937.8\n137,419.9\n55,389.8\n859,747.5\n7,310.9\n7,249.8\n874,308.3\n5,769.3\n39,105.1\n2,383.3\n2,207.5\n321.8\n214,978.6\n134,993.5\n182,638.3\n1,456,705.7\nJun\n773,692.7\n154,956.9\n63,511.7\n992,161.3\n4,597.1\n10,018.0\n1,006,776.4\n6,743.2\n42,701.8\n2,898.5\n3,389.3\n345.2\n307,341.8\n169,511.8\n184,958.1\n1,724,666.1\nJul\n810,906.6\n173,134.0\n74,324.5\n1,058,365.1\n717.0\n9,153.8\n1,068,235.9\n7,994.5\n54,168.7\n2,814.9\n2,948.9\n1,339.1\n355,597.9\n144,090.2\n220,013.9\n1,857,204.0\nAug\n1,100,922.1\n219,798.6\n110,595.1\n1,431,315.7\n790.2\n7,675.2\n1,439,781.1\n12,484.6\n64,160.3\n3,230.7\n2,791.8\n555.2\n421,880.4\n167,029.4\n300,169.0\n2,412,082.6\nSep\n1,328,584.6\n256,980.2\n127,051.1\n1,712,616.0\n1,482.9\n8,473.0\n1,722,571.9\n13,789.2\n81,182.4\n3,720.2\n5,632.9\n587.2\n465,063.9\n146,133.1\n318,269.0\n2,756,949.8\nOct\n1,365,908.5\n205,688.8\n128,186.9\n1,699,784.2\n813.8\n6,314.3\n1,706,912.3\n14,933.2\n83,998.0\n28,072.2\n4,282.4\n762.5\n486,396.6\n165,306.9\n407,015.5\n2,897,679.6\nNov\n1,481,503.5\n243,239.9\n146,530.0\n1,871,273.4\n291.3\n6,366.6\n1,877,931.3\n12,665.1\n67,318.9\n19,973.5\n5,349.1\n339.6\n514,200.0\n170,944.8\n343,815.1\n3,012,537.3\nDec\n1,697,008.7\n235,271.2\n181,090.6\n2,113,370.5\n1,514.4\n7,399.5\n2,122,284.4\n13,296.8\n106,071.5\n10,597.8\n9,610.4\n752.5\n621,113.3\n159,126.2\n320,981.8\n3,363,834.8\n2023\nJan\n2,139,458.0\n78,197.7\n215,537.0\n2,433,192.7\n214.3\n41,333.8\n2,474,740.8\n12,923.7\n123,605.0\n4,974.3\n5,669.1\n675.5\n723,452.2\n227,545.4\n384,228.1\n3,957,814.2\nFeb\n1,997,073.4\n398,595.8\n230,549.9\n2,626,219.1\n303.5\n10,655.7\n2,637,178.4\n14,443.3\n140,484.9\n8,092.9\n13,273.6\n3,109.0\n780,290.7\n226,933.0\n497,618.5\n4,321,424.2\nMar\n2,218,678.7\n384,245.5\n262,119.8\n2,865,044.1\n1,272.8\n5,953.0\n2,872,269.9\n15,181.9\n166,322.5\n9,639.9\n15,494.1\n3,714.6\n846,479.9\n554,840.9\n581,230.2\n5,065,173.9\nApr\n2,646,522.9\n382,678.9\n197,662.2\n3,226,864.0\n173.4\n9,463.7\n3,236,501.1\n1,115.5\n201,674.1\n13,321.9\n21,331.0\n6,418.8\n935,402.2\n214,270.9\n584,658.1\n5,214,693.6\nMay\n5,196,712.7\n969,812.4\n435,965.9\n6,602,490.9\n514.9\n50,270.4\n6,653,276.3\n1,287.6\n493,894.8\n78,332.6\n65,967.5\n30,583.3\n1,815,309.9\n607,438.1\n1,452,822.8\n11,198,912.9\nJun\n10,038,744.6\n2,287,818.9\n789,112.9\n13,115,676.4\n1,468.6\n432,367.0\n13,549,512.0\n1,177.5\n1,201,797.0\n39,166.6\n101,465.7\n64,321.9\n5,042,026.4\n1,390,786.2\n2,830,837.1\n24,221,090.2\nJul\n9,592,825.0\n1,787,488.9\n592,115.4\n11,972,429.2\n9,138.5\n380,190.7\n12,361,758.4\n512.4\n847,658.7\n87,827.2\n146,299.0\n58,256.2\n4,649,856.9\n829,382.3\n2,509,565.1\n21,491,116.1\nAug\n9,698,801.3\n1,920,804.2\n622,360.9\n12,241,966.5\n1,479.8\n381,277.2\n12,624,723.5\n863.9\n865,945.4\n84,841.4\n141,305.4\n56,751.6\n4,465,099.7\n701,626.2\n2,553,598.8\n21,494,755.8\nSep\n13,388,822.1\n319,686.0\n695,555.0\n14,404,063.1\n4,754.8\n114,251.5\n14,523,069.4\n504.3\n1,036,635.6\n82,493.4\n152,779.3\n90,032.4\n5,159,376.7\n776,997.6\n2,972,007.2\n24,793,895.8\nOct\n14,087,303.5\n312,655.9\n827,902.5\n15,227,861.9\n1,692.7\n146,801.2\n15,376,355.8\n522.9\n1,106,440.5\n84,628.9\n159,670.3\n83,441.8\n5,427,255.6\n958,746.4\n2,946,119.7\n26,143,181.7\nNov\n14,816,672.7\n306,014.4\n882,972.1\n16,005,659.2\n5,789.4\n133,219.7\n16,144,668.4\n432.3\n1,259,039.0\n92,939.9\n227,935.0\n89,997.7\n5,701,702.0\n1,046,257.0\n3,234,709.9\n27,797,681.2\nDec\n15,726,758.6\n369,405.4\n808,422.2\n16,904,586.1\n6,923.3\n201,225.8\n17,112,735.3\n36,808.0\n1,314,667.6\n55,157.4\n153,701.6\n138,722.6\n6,264,918.7\n1,184,706.9\n3,575,604.1\n29,837,022.2\n2024\nJan\n24,824,665.8\n662,989.2\n1,191,915.8\n26,679,570.7\n25,881.9\n169,368.5\n26,874,821.1\n168.2\n2,102,990.2\n114,298.0\n279,174.1\n182,727.0\n9,532,603.9\n1,949,662.4\n5,652,947.5\n46,689,392.4\nSource: Reserve Bank of Zimbabwe, 2024\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\n \n \n21 \n \n \n \nForeign\nEnd of\nNotes\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nNon Financial \nTOTAL\n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nMortgages\nGovernment\nOther\nOther Assets\nAssets\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2021\nJan\n188.7\n \n2943.3\n5,986.5\n \n793.8\n843.5\n \n-\n \n1,783.8\n \n10.2\n-\n \n211.3\n \n1,091.3\n \n0.0\n \n9,329.1\n \n2980.3\n7,685.1\n \n33,846.9\n \nFeb\n345.7\n \n2762.9\n6,004.8\n \n811.1\n984.2\n \n-\n \n2,731.0\n \n9.2\n-\n \n236.8\n \n2,089.3\n \n-\n \n8,950.2\n \n2949.2\n7,790.6\n \n35,665.0\n \nMar\n168.3\n \n2278.9\n6,313.1\n \n1594.4\n1,028.2\n \n-\n \n1,341.7\n \n8.4\n-\n \n415.1\n \n1,242.4\n \n-\n \n10,867.7\n \n3027.5\n7,841.0\n \n36,126.8\n \nApr\n206.9\n \n2702.1\n5,302.6\n \n1156.7\n1,085.4\n \n-\n \n871.7\n \n7.7\n-\n \n508.9\n \n1,581.5\n \n-\n \n14,233.6\n \n3431.1\n7,237.9\n \n38,326.2\n \nMay\n210.3\n \n1687.6\n5,962.2\n \n1250.9\n3,847.1\n \n-\n \n116.9\n \n7.0\n-\n \n517.7\n \n1,568.8\n \n-\n \n17,154.9\n \n2927.9\n7,532.9\n \n42,784.2\n \nJun\n249.6\n \n1649.7\n6,202.6\n \n1163.8\n1,866.7\n \n-\n \n204.6\n \n6.5\n-\n \n588.0\n \n1,851.9\n \n-\n \n18,795.4\n \n2580.9\n7,701.1\n \n42,860.7\n \nJul\n283.7\n \n1212.2\n7,193.4\n \n1892.7\n1,875.4\n \n-\n \n1,143.4\n \n6.0\n-\n \n447.3\n \n1,963.2\n \n-\n \n18,280.3\n \n3923.5\n7,695.6\n \n45,916.5\n \nAug\n352.8\n \n1408.8\n7,869.3\n \n2537.6\n2,316.2\n \n-\n \n3,535.6\n \n5.4\n-\n \n399.5\n \n2,101.3\n \n-\n \n19,422.2\n \n3837.6\n7,666.6\n \n51,453.0\n \nSep\n349.8\n \n1926.6\n7,608.5\n \n2430.2\n1,941.4\n \n-\n \n4,314.6\n \n5.1\n-\n \n205.2\n \n2,231.7\n \n-\n \n20,461.1\n \n4013.2\n9,460.7\n \n54,948.1\n \nOct\n411.5\n \n2396.2\n8,221.0\n \n2162.4\n3,421.5\n \n-\n \n5,627.7\n \n4.3\n-\n \n271.1\n \n2,539.5\n \n-\n \n22,881.3\n \n5432.3\n9,501.3\n \n62,870.1\n \nNov\n339.8\n \n3578.4\n7,561.6\n \n2568.8\n2,299.5\n \n-\n \n5,882.7\n \n3.7\n-\n \n566.4\n \n2,788.5\n \n-\n \n27,326.1\n \n4400.3\n9,614.3\n \n66,930.0\n \nDec\n351.1\n \n3217.3\n8,557.8\n \n2619.2\n3,620.2\n \n-\n \n2,353.6\n \n3.0\n-\n \n1,189.0\n \n2,786.9\n \n-\n \n33,115.3\n \n5610.8\n11,334.1\n \n74,758.3\n \n2022\nJan\n324.6\n \n3504.3\n8,506.5\n \n2680.3\n2,631.0\n \n-\n \n1,110.8\n \n2.4\n-\n \n1,487.3\n \n2,967.6\n \n-\n \n35,913.5\n \n6693.8\n14,008.7\n \n79,830.9\n \nFeb\n411.5\n \n4021.5\n9,763.6\n \n3069.7\n5,678.0\n \n-\n \n4,048.9\n \n1.6\n-\n \n1,465.4\n \n3,241.1\n \n-\n \n39,977.5\n \n4511.5\n13,964.4\n \n90,154.6\n \nMar\n354.3\n \n4413.6\n11,882.6\n \n3691.3\n4,932.3\n \n-\n \n5,235.0\n \n0.9\n-\n \n1,590.0\n \n3,888.3\n \n-\n \n42,741.3\n \n9086.6\n15,421.2\n \n103,237.4\n \nApr\n546.4\n \n3054.1\n15,585.8\n \n4857.7\n5,768.6\n \n-\n \n5,714.4\n \n0.2\n-\n \n1,861.4\n \n4,143.7\n \n-\n \n48,582.4\n \n9654.2\n16,999.2\n \n116,768.1\n \nMay\n639.5\n \n8326.7\n23,817.6\n \n4251.9\n16,001.6\n \n-\n \n6,150.9\n \n0.0\n-\n \n1,486.3\n \n8,474.8\n \n-\n \n74,864.0\n \n14793.9\n17,091.2\n \n175,898.5\n \nJun\n418.5\n \n8464.3\n32,497.6\n \n3807.5\n21,184.8\n \n-\n \n2,639.3\n \n0.0\n-\n \n1,340.0\n \n10,851.1\n \n-\n \n85,145.9\n \n18155.8\n35,128.1\n \n219,633.0\n \nJul\n700.4\n \n9914.6\n30,660.3\n \n4983.4\n24,902.9\n \n-\n \n4,077.6\n \n0.0\n-\n \n1,411.5\n \n13,722.1\n \n-\n \n98,066.0\n \n9998.6\n45,127.9\n \n243,565.1\n \nAug\n863.8\n \n14422.1\n33,703.2\n \n4483.0\n34,971.8\n \n-\n \n4,379.8\n \n0.0\n-\n \n2,106.6\n \n16,515.4\n \n-\n \n115,491.9\n \n8745.3\n45,694.0\n \n281,377.1\n \nSep\n1,086.8\n \n14998.2\n37,911.3\n \n7470.1\n45,094.8\n \n-\n \n8,440.8\n \n0.0\n-\n \n1,302.8\n \n17,996.8\n \n-\n \n129,242.7\n \n11630.7\n60,830.4\n \n336,005.2\n \nOct\n1,158.3\n \n14768.7\n44,296.5\n \n10013.7\n44,664.1\n \n-\n \n14,109.9\n \n0.0\n-\n \n1,142.4\n \n16,817.7\n \n-\n \n123,793.8\n \n30036.4\n47,678.2\n \n348,479.7\n \nNov\n1,449.3\n \n22456.9\n41,398.0\n \n9771.8\n41,317.6\n \n-\n \n17,572.6\n \n0.0\n-\n \n2,085.3\n \n16,785.8\n \n-\n \n136,029.9\n \n30694.0\n46,275.8\n \n365,836.9\n \nDec\n1,470.7\n \n23012.7\n48,533.8\n \n8913.7\n50,229.0\n \n-\n \n21,411.1\n \n0.0\n19,993.4\n \n2,176.2\n \n17,693.7\n \n-\n \n119,322.3\n \n39279.1\n69,102.5\n \n421,138.1\n \n2023\nJan\n2,402.7\n \n32405.1\n47,062.6\n \n8410.8\n50,364.6\n \n-\n \n17,976.2\n \n0.0\n23,668.5\n \n2,406.3\n \n18,311.0\n \n-\n \n132,757.4\n \n41367.4\n69,570.1\n \n446,702.8\n \nFeb\n234.9\n \n59685.4\n50,103.0\n \n9568.6\n62,701.4\n \n889.9\n \n24,809.7\n \n0.0\n26,667.1\n \n4,451.9\n \n21,629.1\n \n-\n \n146,798.4\n \n50093.6\n70,987.9\n \n528,620.9\n \nMar\n214.6\n \n72311.9\n57,399.6\n \n9196.8\n51,300.9\n \n-\n \n28,841.5\n \n0.0\n24,689.0\n \n5,503.9\n \n19,118.6\n \n-\n \n170,376.6\n \n54524.7\n84,489.1\n \n577,967.3\n \nApr\n184.1\n \n61341.6\n63,129.5\n \n16343.2\n61,444.0\n \n-\n \n28,727.0\n \n0.0\n28,119.0\n \n5,989.2\n \n27,619.9\n \n-\n \n205,412.2\n \n81442.9\n86,571.2\n \n666,323.9\n \nMay\n78.1\n \n125685.1\n100,808.7\n \n22707.0\n195,646.6\n \n-\n \n81,344.3\n \n0.0\n69,908.9\n \n6,246.8\n \n53,180.7\n \n-\n \n440,462.4\n \n103176.1\n116,103.7\n \n1,315,348.2\n \nJun\n176.6\n \n227001.8\n172,666.5\n \n25998.2\n452,772.6\n \n40,326.7\n \n115,193.3\n \n0.0\n196,310.3\n \n4,209.5\n \n121,677.5\n \n-\n \n870,075.1\n \n230604.4\n544,587.8\n \n3,001,600.3\n \nJul\n162.7\n \n132017.2\n220,995.0\n \n20797.2\n459,668.2\n \n32,010.8\n \n105,308.6\n \n0.0\n154,472.7\n \n13,777.8\n \n153,638.5\n \n-\n \n697,177.8\n \n209734.6\n612,937.8\n \n2,812,698.9\n \nAug\n611.0\n \n105296.6\n309,821.7\n \n55744.7\n475,838.3\n \n37,447.1\n \n102,495.2\n \n0.0\n153,578.2\n \n6,767.5\n \n135,193.3\n \n-\n \n758,439.2\n \n223114.4\n564,622.1\n \n2,928,969.2\n \nSep\n949.3\n \n193065.6\n339,269.2\n \n41680.1\n437,996.0\n \n58,554.5\n \n110,351.3\n \n0.0\n161,346.6\n \n4,522.1\n \n153,113.7\n \n-\n \n880,148.8\n \n290026.7\n565,616.4\n \n3,236,640.3\n \nOct\n403.8\n \n204713.4\n254,684.1\n \n187632.1\n440,150.3\n \n65,022.1\n \n97,046.1\n \n0.0\n176,111.9\n \n13,771.8\n \n173,523.5\n \n-\n \n829,479.5\n \n345029.3\n586,015.6\n \n3,373,583.5\n \nNov\n370.5\n \n222344.7\n387,213.2\n \n160896.0\n326,510.1\n \n50,688.3\n \n159,225.4\n \n0.0\n173,990.9\n \n28,127.2\n \n187,363.3\n \n-\n \n926,663.7\n \n395549.5\n595,811.6\n \n3,614,754.5\n \nDec\n403.7\n \n251968.8\n457,034.9\n \n261067.9\n345,348.0\n \n56,551.7\n \n185,131.1\n \n0.0\n166,902.0\n \n27,875.9\n \n222,503.1\n \n0.7\n \n973,788.6\n \n507890.9\n658,045.7\n \n4,114,512.9\n \n2024\nJan\n367.9\n \n368046.7\n524,020.9\n \n471915.0\n363,325.6\n \n40,412.9\n \n280,803.2\n \n0.0\n280,441.0\n \n45,935.9\n \n339,610.7\n \n-\n \n1,563,405.5\n \n649087.4\n742,734.0\n \n5,670,106.8\n \nSource:Reserve Bank of Zimbabwe, 2024\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations, \nTABLE 6.1: BUILDING SOCIETIES -ASSETS\nZWL$ millions\nDebt Securities\nLoans and Advances\n \n \n22 \n \n \n \nDebt Securities\nForeign Liabilities\nCapital\nOther\nTOTAL\nand\nLiablities\nEnd of\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository \nOther Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2021\nJan\n17,060.5\n985.1\n18,045.7\n150.0\n15.0\n18,210.7\n291.2\n3,018.1\n0.0\n81.3\n0.0\n6,054.0\n6,191.6\n33,846.9\nFeb\n18,610.7\n1,047.5\n19,658.2\n150.0\n15.0\n19,823.2\n318.2\n3,075.5\n0.0\n40.7\n0.0\n6,533.5\n5,874.0\n35,665.0\nMar\n18,562.7\n1,070.5\n19,633.2\n150.0\n15.0\n19,798.2\n320.8\n3,377.0\n0.0\n241.5\n0.0\n6,727.5\n5,661.8\n36,126.8\nApr\n19,021.2\n1,353.2\n20,374.5\n500.0\n15.0\n20,889.5\n325.0\n4,244.8\n0.0\n181.9\n0.0\n6,267.0\n6,418.0\n38,326.2\nMay\n22,332.1\n1,453.5\n23,785.6\n500.0\n15.0\n24,300.6\n350.2\n4,279.9\n0.0\n394.8\n0.0\n6,067.1\n7,391.6\n42,784.2\nJun\n22,784.4\n1,675.4\n24,459.8\n209.5\n70.5\n24,739.8\n359.1\n3,855.1\n0.0\n570.4\n0.0\n6,623.0\n6,713.2\n42,860.7\nJul\n25,425.9\n1,997.8\n27,423.7\n25.0\n15.0\n27,463.7\n365.2\n3,488.6\n0.0\n274.6\n0.0\n7,194.2\n7,130.1\n45,916.5\nAug\n27,475.7\n2,728.9\n30,204.6\n60.0\n15.0\n30,279.6\n668.2\n5,344.8\n0.0\n621.9\n0.0\n7,683.7\n6,854.8\n51,453.0\nSep\n29,023.8\n2,834.6\n31,858.5\n76.0\n15.2\n31,949.7\n1,062.2\n4,465.7\n0.0\n181.9\n0.0\n10,227.1\n7,061.5\n54,948.1\nOct\n30,925.8\n4,239.0\n35,164.7\n0.0\n30.0\n35,194.8\n1,329.1\n7,432.5\n0.0\n0.0\n0.0\n10,906.3\n8,007.4\n62,870.1\nNov\n34,486.8\n4,344.1\n38,830.8\n0.0\n15.0\n38,845.9\n1,149.7\n7,028.7\n0.0\n203.6\n0.0\n11,575.7\n8,126.5\n66,930.0\nDec\n33,974.4\n4,856.8\n38,831.3\n80.0\n15.0\n38,926.3\n1,750.9\n9,746.8\n0.0\n712.0\n0.0\n15,101.8\n8,520.4\n74,758.3\n2022\nJan\n31,695.1\n5,983.6\n37,678.7\n0.0\n15.0\n37,693.7\n1,771.4\n10,991.6\n0.0\n373.7\n0.0\n18,063.5\n10,937.0\n79,830.9\nFeb\n37,132.1\n7,089.1\n44,221.1\n0.0\n15.0\n44,236.1\n1,703.8\n14,215.9\n0.0\n431.6\n0.0\n18,241.5\n11,325.7\n90,154.6\nMar\n44,187.4\n6,190.7\n50,378.1\n0.0\n15.0\n50,393.1\n1,742.3\n15,620.9\n0.0\n501.9\n0.0\n20,548.8\n14,430.4\n103,237.4\nApr\n52,979.2\n6,553.0\n59,532.2\n0.0\n15.0\n59,547.2\n1,536.3\n17,027.1\n0.0\n704.1\n0.0\n23,099.0\n14,854.4\n116,768.1\nMay\n86,411.7\n6,683.0\n93,094.7\n0.0\n15.0\n93,109.8\n1,477.7\n34,306.7\n0.0\n1,033.4\n0.0\n22,645.2\n23,325.7\n175,898.5\nJun\n98,008.7\n8,427.1\n106,435.9\n1,030.1\n15.0\n107,481.1\n1,496.4\n40,346.3\n0.0\n1,200.6\n0.0\n42,213.2\n26,895.5\n219,633.0\nJul\n111,583.1\n9,489.2\n121,072.3\n1,072.6\n15.0\n122,159.9\n1,225.0\n46,145.1\n0.0\n2,071.5\n0.0\n55,131.6\n16,832.0\n243,565.1\nAug\n133,071.2\n11,398.3\n144,469.5\n1,625.2\n15.0\n146,109.7\n1,382.6\n55,691.4\n0.0\n2,979.3\n0.0\n60,157.4\n15,056.7\n281,377.1\nSep\n143,338.6\n28,284.7\n171,623.3\n0.0\n15.0\n171,638.3\n1,339.9\n62,659.9\n0.0\n3,613.8\n0.0\n79,343.1\n17,410.1\n336,005.2\nOct\n122,775.3\n20,897.6\n143,672.9\n1,214.2\n15.0\n144,902.1\n1,707.3\n69,651.9\n0.0\n4,327.9\n0.0\n86,799.2\n41,091.4\n348,479.7\nNov\n130,892.9\n23,401.5\n154,294.3\n1,256.4\n13.0\n155,563.7\n1,855.1\n72,052.0\n0.0\n5,140.0\n0.0\n89,895.0\n41,331.2\n365,836.9\nDec\n149,207.3\n30,517.1\n179,724.4\n1,239.7\n103.8\n181,068.0\n1,933.7\n71,142.6\n0.0\n5,623.9\n0.0\n118,486.1\n42,883.8\n421,138.1\n2023\nJan\n161,506.8\n31,099.4\n192,606.2\n1,462.2\n121.0\n194,189.4\n3,214.4\n72,524.5\n0.0\n6,622.6\n0.0\n144,335.3\n25,816.5\n446,702.8\nFeb\n210,739.4\n27,500.2\n238,239.5\n1,153.4\n15.0\n239,407.9\n2,349.9\n84,724.5\n0.0\n7,548.9\n0.0\n155,007.6\n39,582.0\n528,620.9\nMar\n234,480.2\n38,088.7\n272,568.9\n158.0\n14.4\n272,741.2\n1,982.4\n89,883.4\n0.0\n7,502.7\n0.0\n172,499.0\n33,358.6\n577,967.3\nApr\n272,738.9\n35,889.2\n308,628.0\n400.0\n15.0\n309,043.1\n1,809.5\n116,418.1\n0.0\n8,456.9\n0.0\n183,262.3\n47,334.0\n666,323.9\nMay\n502,897.5\n36,680.3\n539,577.9\n553.7\n15.0\n540,146.6\n4,453.5\n289,636.2\n0.0\n8,115.4\n0.0\n372,206.8\n100,789.6\n1,315,348.2\nJun\n927,980.2\n66,404.1\n994,384.3\n0.0\n15.0\n994,399.3\n4,147.7\n631,544.2\n0.0\n10,873.2\n0.0\n1,117,122.1\n243,513.7\n3,001,600.3\nJul\n804,547.2\n73,047.1\n877,594.3\n15,753.2\n15.0\n893,362.6\n2,706.7\n611,248.0\n0.0\n14,397.5\n0.0\n1,093,858.2\n197,126.1\n2,812,698.9\nAug\n920,687.4\n90,856.7\n1,011,544.1\n15,752.3\n15.0\n1,027,311.4\n3,400.5\n617,162.9\n0.0\n12,854.9\n0.0\n1,064,286.3\n203,953.2\n2,928,969.2\nSep\n1,062,730.1\n75,413.9\n1,138,143.9\n0.0\n15.1\n1,138,159.0\n3,262.9\n652,356.6\n0.0\n16,101.5\n0.0\n1,117,548.2\n309,212.1\n3,236,640.3\nOct\n1,261,965.8\n64,282.0\n1,326,247.8\n0.0\n15.1\n1,326,262.9\n4,056.0\n467,416.6\n0.0\n16,785.2\n0.0\n1,188,499.5\n370,563.3\n3,373,583.5\nNov\n1,301,463.8\n82,076.9\n1,383,540.7\n79,497.1\n15.1\n1,463,052.8\n4,822.5\n525,114.1\n0.0\n16,180.1\n0.0\n1,209,652.3\n395,932.7\n3,614,754.5\nDec\n1,541,238.9\n142,705.5\n1,683,944.4\n79,497.1\n15.8\n1,763,457.2\n7,085.0\n516,718.0\n0.0\n8,736.3\n0.0\n1,308,419.6\n510,096.7\n4,114,512.9\n2024\nJan\n2,094,039.4\n96,896.2\n2,190,935.6\n79,481.7\n15.1\n2,270,432.3\n8,231.4\n904,697.2\n0.0\n11,028.7\n0.0\n1,826,995.6\n648,721.6\n5,670,106.8\nSource: Reserve Bank of Zimbabwe, 2024\nAmounts Owing to\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\nZWL$ millions\n \n \n23 \n \n \n \nEND OF\n2020\nJan\n4,084,551.94\n155,581.93\n40,879.89\n1,241,096.72\n54,212.81\n1,614,135.86\n1,136,124.87\n905,568.16\n799,835.71\n83,887.62\n1,594,904.42\n3,435.36\n11,714,215.29\nFeb\n4,492,412.28\n157,892.05\n54,850.75\n1,305,056.27\n51,575.18\n1,667,015.97\n1,328,895.13\n875,096.28\n827,340.38\n103,240.64\n1,837,059.21\n1,195.35\n12,701,629.50\nMar\n5,400,573.75\n137,553.14\n109,432.30\n1,355,737.76\n60,656.39\n2,181,804.45\n1,514,365.26\n1,743,391.37\n911,567.97\n129,647.77\n2,083,395.02\n30,866.95\n15,658,992.12\nApr\n5,497,243.24\n144,302.16\n94,782.20\n1,298,701.43\n50,563.13\n2,200,545.77\n1,762,996.43\n1,756,962.25\n1,057,031.75\n149,805.94\n2,211,133.89\n33,524.86\n16,257,593.05\nMay\n6,753,987.64\n152,161.11\n176,776.32\n1,688,453.47\n61,403.01\n2,272,323.33\n2,155,232.06\n2,018,291.52\n1,335,664.72\n161,892.59\n2,646,269.59\n56,873.34\n19,479,328.70\nJun\n8,233,748.36\n178,010.08\n127,961.90\n3,248,219.37\n64,989.86\n5,469,986.07\n3,799,659.67\n4,379,017.69\n1,983,339.32\n277,602.32\n3,665,408.84\n46,384.96\n31,474,328.45\nJul\n8,927,920.73\n256,440.30\n209,123.91\n4,249,101.81\n34,055.90\n7,106,442.23\n5,125,740.57\n5,385,837.14\n2,413,677.93\n418,160.11\n4,321,918.71\n46,630.64\n38,495,049.96\nAug\n9,773,178.50\n269,675.36\n194,537.60\n5,470,092.50\n33,043.10\n7,946,261.68\n6,723,930.20\n5,651,838.11\n3,103,883.15\n446,084.37\n5,291,100.20\n48,922.44\n44,952,547.19\nSep\n10,508,860.18\n202,928.95\n203,610.78\n4,810,727.31\n29,975.80\n1,041,079.17\n7,136,261.66\n4,099,760.81\n3,255,496.85\n517,871.73\n6,526,576.15\n48,754.08\n38,381,903.47\nOct\n12,296,430.45\n302,589.49\n251,238.66\n9,053,118.05\n28,434.20\n8,136,185.80\n6,305,609.42\n6,351,785.61\n3,855,757.60\n649,444.55\n7,243,034.96\n49,339.03\n54,522,967.83\nNov\n14,705,718.28\n553,426.67\n299,226.19\n10,178,453.66\n26,676.82\n9,457,279.18\n7,442,871.42\n6,834,160.25\n4,193,059.76\n959,134.44\n7,919,442.36\n50,802.65\n62,620,251.69\nDec\n19,070,900.24\n557,071.84\n265,529.08\n10,043,351.16\n24,925.66\n9,451,197.42\n8,214,424.44\n7,599,398.94\n4,750,996.82\n1,556,410.92\n9,213,845.68\n46,489.85\n70,794,542.04\n1,000.00\n2021\nJan\n23,978,167.35\n610,696.11\n267,400.20\n9,997,383.02\n66,046.86\n9,811,097.63\n7,641,910.42\n7,176,322.97\n4,807,054.16\n1,685,871.14\n10,092,630.46\n47,525.58\n76,182,105.93\nFeb\n24,581,772.22\n653,205.48\n285,830.69\n10,330,772.00\n65,231.37\n10,024,935.09\n7,949,013.06\n6,754,180.16\n5,018,015.84\n1,766,077.92\n10,905,948.39\n47,678.08\n78,382,660.29\nMar\n28,741,816.74\n737,140.48\n320,102.45\n10,604,119.56\n76,828.95\n10,517,753.11\n9,428,559.85\n8,179,722.05\n5,701,289.52\n1,822,019.95\n12,528,176.45\n33,915.52\n88,691,444.62\nApr\n31,859,146.34\n675,080.87\n347,881.04\n12,101,683.31\n205,760.21\n12,046,268.54\n10,788,214.39\n8,802,924.25\n6,559,969.13\n1,831,534.43\n14,724,055.16\n36,984.33\n99,979,501.99\nMay\n34,645,328.64\n713,518.48\n292,339.75\n13,012,546.01\n70,347.70\n10,160,360.67\n11,287,317.39\n8,318,871.52\n7,438,997.57\n1,831,015.12\n17,169,532.74\n10,879.19\n104,951,054.78\nJune\n36,527,537.18\n993,308.60\n357,200.72\n14,622,859.32\n69,173.21\n12,832,747.32\n12,635,012.94\n7,938,660.25\n9,226,503.32\n1,903,845.82\n19,986,300.49\n40,765.72\n117,133,914.90\nJul\n39,160,305.59\n1,280,558.68\n411,253.92\n16,562,010.52\n62,624.82\n13,792,648.82\n12,583,048.87\n8,567,557.82\n10,717,151.04\n1,820,088.91\n22,581,130.29\n13,756.78\n127,552,136.06\nAug\n41,218,056.27\n1,372,177.00\n431,669.10\n15,667,033.13\n66,504.42\n14,701,546.35\n13,446,660.94\n8,828,791.19\n11,500,069.82\n1,942,139.38\n27,299,685.30\n15,470.31\n136,489,803.20\nSep\n41,133,553.69\n1,649,182.17\n433,781.15\n16,702,896.26\n321,991.18\n15,183,417.18\n15,271,161.92\n9,065,558.07\n11,973,442.27\n2,145,369.49\n30,851,901.80\n19,863.23\n144,752,118.41\nOct\n48,491,758.71\n1,644,045.10\n477,340.76\n20,072,721.66\n337,273.51\n16,644,705.00\n17,906,042.38\n10,150,149.70\n8,544,940.34\n2,418,354.85\n35,641,091.07\n17,894.63\n162,346,317.71\nNov\n48,945,526.55\n1,598,923.06\n394,575.79\n20,998,777.03\n434,931.56\n16,621,266.44\n19,372,274.14\n10,802,887.56\n8,904,904.88\n2,882,220.06\n40,009,482.19\n18,275.25\n170,984,044.50\nDec\n54,028,791.83\n1,778,880.47\n556,046.62\n24,450,917.17\n570,685.08\n10,955,470.21\n22,025,406.62\n10,538,491.23\n14,437,886.10\n2,996,425.00\n43,047,088.39\n29,601.16\n185,415,689.87\n2022\nJan\n58,163,723.79\n2,180,551.47\n576,438.12\n26,576,317.70\n366,231.45\n8,887,534.55\n23,074,734.84\n11,840,524.88\n15,743,736.46\n3,516,259.69\n47,325,078.28\n29,564.68\n198,280,695.90\nFeb\n59,500,669.71\n2,289,260.81\n618,640.14\n27,925,301.74\n641,435.03\n9,370,886.67\n27,976,121.59\n13,027,815.12\n20,505,827.49\n3,747,288.27\n51,007,737.28\n19,692.27\n216,630,676.11\nMar\n66,551,117.83\n2,538,377.08\n656,335.46\n29,688,979.74\n660,584.49\n10,903,917.10\n32,629,411.62\n15,688,496.07\n38,075,386.72\n4,471,441.45\n58,500,950.68\n802,168.34\n261,167,166.58\nApr\n74,441,781.12\n4,219,500.30\n1,441,218.07\n33,136,441.44\n673,885.92\n13,157,284.33\n34,426,878.27\n18,261,710.29\n39,043,359.76\n5,001,307.17\n63,176,517.86\n40,089.64\n287,019,974.16\nMay\n101,753,100.08\n5,120,524.84\n3,358,419.20\n50,514,059.33\n760,401.23\n12,433,390.50\n42,057,624.50\n28,724,818.35\n48,088,662.73\n6,286,840.17\n76,655,600.16\n34,456.76\n375,787,897.73\nJune\n118,753,588.99\n6,209,658.53\n2,293,665.50\n64,942,949.99\n869,273.19\n23,897,585.00\n58,442,367.18\n37,195,284.13\n62,467,707.84\n9,414,912.48\n96,536,183.00\n43,204.15\n481,066,380.00\nJuly\n133,779,414.05\n7,610,614.14\n3,684,426.07\n77,836,080.20\n938,367.98\n30,537,997.95\n69,408,788.72\n46,181,587.44\n72,642,938.51\n10,449,582.51\n111,094,524.49\n46,145.73\n564,210,467.80\nAug\n165,210,571.41\n10,163,176.69\n2,624,492.88\n93,899,073.61\n1,266,729.80\n39,544,245.28\n87,691,102.84\n58,330,938.20\n97,552,420.83\n10,450,507.09\n131,625,765.29\n154,457.59\n698,513,481.52\nSept\n201,167,878.53\n11,330,918.80\n5,038,300.39\n110,956,484.03\n1,297,748.50\n44,492,682.69\n101,816,518.33\n92,708,096.37\n88,483,494.42\n11,685,667.87\n152,934,863.30\n276,752.34\n822,189,405.58\nOct\n223,506,677.74\n12,026,669.50\n4,229,873.27\n113,451,159.15\n1,302,041.27\n46,399,745.17\n110,333,025.84\n79,715,558.05\n89,501,330.53\n9,611,322.30\n175,816,703.56\n178,607.79\n866,072,714.17\nNov\n232,953,535.08\n16,431,625.92\n11,131,139.79\n118,284,970.84\n1,687,527.03\n42,192,397.26\n124,017,335.43\n75,874,234.73\n94,636,395.62\n12,440,947.33\n207,085,835.54\n197,473.26\n936,933,417.83\nDec\n253,185,165.18\n19,199,455.89\n10,466,455.02\n135,037,685.07\n1,551,994.21\n70,805,600.30\n136,576,579.60\n94,115,141.69\n123,404,532.09\n12,079,018.68\n235,371,108.06\n173,717.07\n1,091,966,452.83\n2023\nJan\n299,237,745.06\n22,096,826.86\n11,001,194.94\n154,399,125.00\n2,073,794.79\n72,677,263.10\n165,905,496.48\n124,259,994.28\n140,303,195.37\n16,560,714.33\n290,446,774.71\n286,968.13\n1,299,249,093.07\nFeb\n333,081,520.85\n26,349,752.54\n12,607,980.80\n168,969,321.35\n3,232,834.66\n79,874,665.83\n198,087,465.13\n146,996,948.44\n150,078,778.01\n18,960,512.94\n335,439,856.49\n415,659.47\n1,474,095,296.50\nMar\n411,138,419.07\n28,795,432.59\n14,081,946.71\n184,250,094.21\n3,256,927.22\n101,507,881.47\n232,125,042.77\n168,374,643.67\n159,301,093.17\n20,786,447.06\n364,183,808.40\n229,595.47\n1,688,031,331.80\nApr\n411,638,425.58\n28,865,765.48\n14,081,964.65\n184,833,219.66\n3,256,927.22\n101,507,881.47\n235,076,590.94\n168,374,757.64\n159,310,920.52\n20,785,827.18\n365,366,760.50\n229,595.47\n1,693,328,636.32\nMay\n726,348,772.35\n78,828,771.47\n44,800,380.00\n409,618,602.87\n6,584,930.07\n226,467,642.46\n583,387,051.30\n480,909,418.46\n381,628,891.53\n62,593,512.49\n757,858,742.61\n267,815.39\n3,759,294,531.01\nJun\n1,385,380,571.66\n173,918,051.54\n114,682,839.69\n1,119,448,698.19\n23,922,347.39\n571,712,604.71\n1,309,324,347.94\n1,111,326,640.14\n808,734,970.18\n129,722,475.73\n1,754,989,459.01\n444,788.00\n8,503,607,794.19\nJul\n1,088,372,491.59\n132,529,236.30\n101,023,084.21\n843,805,813.72\n21,291,030.44\n370,922,779.80\n1,037,949,287.43\n824,419,061.99\n646,244,001.65\n87,491,103.55\n1,451,125,105.58\n356,098.86\n6,605,529,095.13\nAug\n1,104,126,310.09\n133,512,317.72\n105,426,999.17\n683,402,044.93\n21,345,225.83\n393,145,008.06\n1,077,529,295.35\n824,970,068.56\n716,638,286.73\n85,309,683.35\n1,543,461,599.29\n382,505.35\n6,689,249,344.42\nSep\n1,336,413,273.40\n158,136,405.58\n121,080,865.90\n752,199,791.20\n28,592,532.70\n465,470,715.50\n1,334,020,478.90\n1,012,670,250.70\n799,826,458.00\n102,238,002.60\n1,857,297,850.00\n586,991.00\n7,968,533,615.50\nOct\n1,461,090,986.48\n163,948,853.90\n120,153,516.74\n935,064,277.07\n24,681,683.18\n520,361,008.99\n1,381,206,351.23\n1,092,469,043.71\n859,550,943.15\n118,799,556.91\n2,126,512,435.00\n627,911.82\n8,804,466,568.16\nNov\n1,397,804,072.50\n171,337,302.47\n117,526,650.42\n1,017,731,862.93\n26,161,720.05\n535,490,380.99\n1,401,587,612.93\n992,371,783.17\n885,248,702.84\n129,500,343.70\n2,255,158,373.70\n621,795.60\n8,930,540,600.93\nDec\n1,360,816,417.35\n179,675,138.50\n121,167,248.12\n1,077,783,652.10\n46,946,926.90\n551,786,675.29\n1,483,619,833.87\n1,207,471,368.52\n863,309,236.72\n136,388,007.82\n2,458,239,172.85\n644,093.68\n9,487,847,771.72\n2024\nJan\n2,212,746,050.25\n265,031,131.44\n214,923,355.91\n1,663,240,228.23\n110,086,710.61\n875,780,504.12\n2,505,473,968.40\n1,910,394,449.61\n1,256,413,922.88\n237,647,459.79\n3,945,256,597.25\n1,037,343.55\n15,198,031,722.04\nSource: Reserve Bank of Zimbabwe, 2024\n1 Including the only merchant bank still in operation.\n TABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES\n$ ('000)\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL & \nINVESTMENTS\nFINANCIAL \nORGANISATIONS\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\n \n \n24 \n \n \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS\nORGANISATIONS\n1,000.00\n2020\nJan\n2,173,633.03\n972,609.19\n3,182,087.13\n4,279,565.75\n1,757,297.12\n4,791,990.63\n2,791,625.15\n2,223,774.14\n9,875,803.48\n609,781.65\n2,838,775.94\n81,735.21\n35,578,678.43\nFeb\n2,492,591.77\n1,191,731.68\n3,340,863.80\n8,721,475.95\n1,919,428.47\n5,869,104.19\n3,481,495.51\n2,729,161.98\n10,202,203.60\n760,155.34\n3,574,134.47\n82,845.83\n44,365,192.59\nMar\n2,678,262.66\n1,449,645.90\n3,231,058.97\n11,715,273.88\n2,114,093.03\n6,507,000.01\n4,576,971.82\n3,048,053.49\n11,490,205.21\n947,918.17\n4,257,117.74\n72,082.86\n52,087,683.73\nApr\n2,854,374.82\n1,118,295.51\n3,492,330.52\n5,271,473.36\n1,999,901.13\n6,191,170.71\n4,276,817.19\n3,727,579.43\n14,060,717.80\n713,406.98\n4,444,924.89\n83,109.30\n48,234,101.64\nMay\n3,866,781.11\n1,163,944.89\n4,713,727.59\n7,932,403.43\n1,991,042.58\n7,151,451.48\n5,858,495.15\n5,031,912.53\n13,907,794.76\n944,318.05\n5,060,401.34\n88,613.61\n57,710,886.51\nJun\n7,228,784.40\n1,963,030.85\n5,393,404.53\n14,526,855.63\n3,997,135.72\n12,452,202.49\n11,386,156.55\n9,507,719.09\n22,807,615.50\n1,630,544.88\n9,798,261.20\n121,561.20\n100,813,272.04\nJul\n9,091,726.77\n2,629,847.13\n6,043,418.97\n19,096,889.49\n4,988,887.74\n15,446,649.70\n15,274,687.36\n7,918,819.51\n31,916,392.56\n2,035,354.71\n15,762,315.16\n147,865.97\n130,352,855.06\nAug\n9,462,082.74\n2,865,950.88\n6,582,519.60\n19,234,703.99\n5,333,846.88\n16,821,248.59\n17,017,042.14\n7,304,595.82\n35,312,317.72\n2,217,425.46\n16,548,990.51\n134,271.10\n138,834,995.43\nSep\n9,832,514.38\n3,139,646.07\n7,166,350.39\n20,531,087.56\n5,145,328.35\n9,505,277.06\n17,311,149.20\n10,234,597.66\n39,731,086.51\n2,011,372.45\n16,155,747.87\n148,612.60\n140,912,770.08\nOct\n9,923,335.07\n3,346,982.41\n9,919,999.10\n22,567,492.87\n6,180,403.26\n21,021,376.92\n20,667,754.18\n10,950,177.78\n41,131,626.19\n2,597,408.09\n18,072,164.45\n176,961.04\n166,555,681.37\nNov\n10,683,513.83\n3,732,868.95\n9,809,491.39\n28,228,980.99\n6,029,490.43\n17,343,347.49\n23,027,365.97\n14,471,556.33\n47,870,360.42\n2,986,050.60\n19,045,412.04\n209,168.81\n183,437,607.25\nDec\n10,252,495.91\n4,965,472.75\n12,171,250.70\n30,987,168.50\n5,959,867.34\n19,653,397.02\n25,666,591.10\n13,188,851.04\n55,454,341.21\n3,901,504.33\n22,313,591.00\n519,773.38\n205,034,304.27\n1,000.00\n2021\nJan\n12,195,945.09\n4,725,946.72\n13,067,828.56\n32,314,625.60\n6,804,952.50\n19,638,789.03\n27,577,248.19\n13,566,042.79\n60,234,250.60\n3,993,814.34\n22,146,327.53\n314,523.37\n216,580,294.30\nFeb\n12,215,925.38\n4,335,293.23\n13,268,343.18\n31,820,079.48\n6,327,338.72\n19,480,197.75\n27,088,789.92\n11,873,767.24\n62,647,881.89\n3,583,509.91\n23,594,651.47\n323,276.77\n216,559,054.94\nMar\n12,086,596.94\n5,009,117.91\n15,457,881.64\n33,668,114.17\n7,879,623.60\n17,019,379.33\n29,927,193.06\n12,664,366.44\n68,761,992.24\n4,513,060.17\n25,352,486.13\n371,874.60\n232,711,686.23\nApr\n14,293,712.79\n6,264,137.34\n17,624,611.65\n35,860,252.53\n7,955,587.69\n18,411,151.82\n32,890,743.11\n11,445,151.89\n81,410,668.87\n4,248,558.67\n27,176,673.47\n411,001.01\n257,992,250.84\nMay\n14,731,869.47\n5,542,211.64\n19,231,383.69\n37,283,237.74\n7,903,622.65\n19,756,317.30\n33,027,214.88\n22,796,168.05\n84,596,653.48\n4,504,355.67\n28,445,264.85\n378,185.06\n278,196,484.46\nJun\n15,628,935.51\n6,154,316.52\n20,722,752.27\n39,604,431.48\n7,861,552.67\n21,455,061.82\n36,502,664.43\n23,449,074.86\n92,196,178.85\n4,756,434.86\n29,731,644.54\n415,508.64\n298,478,556.45\nJul\n14,899,561.10\n6,742,913.66\n25,082,739.85\n39,720,936.02\n9,580,503.84\n24,570,675.98\n38,875,306.10\n31,312,003.24\n94,151,108.53\n5,021,547.73\n32,324,374.53\n568,402.62\n322,850,073.17\nAug\n14,056,945.25\n6,611,127.05\n26,897,316.63\n39,624,666.33\n9,778,338.93\n27,046,620.96\n40,693,944.15\n26,504,554.01\n84,766,848.12\n4,915,399.24\n33,960,935.12\n645,902.41\n315,502,598.18\nSep\n14,777,285.47\n6,264,492.08\n27,413,062.10\n45,375,795.43\n10,337,697.22\n25,786,388.31\n43,113,093.01\n30,700,846.40\n95,985,614.84\n5,605,871.74\n37,606,703.52\n687,817.24\n343,654,667.37\nOct\n14,923,669.66\n8,437,829.51\n26,583,413.65\n47,841,912.79\n11,477,927.22\n29,796,762.93\n51,676,553.79\n49,115,499.00\n111,611,484.23\n5,940,819.15\n35,043,857.03\n618,831.05\n393,068,559.99\nNov\n14,147,912.21\n7,546,852.86\n27,174,334.28\n44,238,573.41\n11,949,923.74\n27,199,271.57\n52,401,389.32\n49,817,772.34\n115,576,831.01\n5,911,967.57\n37,770,843.26\n751,068.72\n394,486,740.29\nDec\n16,522,401.63\n9,204,283.51\n26,835,545.00\n47,381,404.66\n15,303,976.78\n43,092,763.28\n57,822,911.04\n61,555,101.22\n122,091,550.61\n6,093,367.35\n40,046,246.70\n1,319,573.65\n447,269,125.42\n2022\nJan\n17,399,268.45\n9,928,816.10\n28,146,847.17\n46,285,881.10\n15,060,177.49\n34,087,881.41\n60,888,346.70\n38,232,883.69\n135,579,116.46\n6,454,492.58\n32,504,960.47\n745,336.00\n425,314,007.61\nFeb\n20,260,983.50\n9,641,974.72\n32,159,803.23\n50,825,844.50\n15,235,028.54\n35,068,548.54\n49,157,612.17\n43,769,514.96\n146,423,512.16\n7,768,846.48\n36,257,363.98\n724,522.36\n447,293,555.15\nMar\n22,638,817.86\n11,683,937.35\n34,271,841.32\n61,002,811.60\n20,352,647.27\n34,501,628.57\n57,839,997.29\n60,678,395.30\n173,444,002.60\n9,467,563.85\n43,160,654.72\n970,393.82\n530,012,691.56\nApr\n26,926,844.72\n12,304,918.39\n34,924,202.54\n67,201,357.79\n21,444,798.07\n38,606,872.21\n61,303,321.13\n64,980,792.31\n216,612,532.66\n10,455,473.89\n45,951,692.03\n939,217.87\n601,652,023.61\nMay\n39,564,579.03\n21,954,770.23\n42,666,739.38\n108,620,498.72\n28,757,840.78\n54,108,110.44\n88,717,845.18\n107,568,244.73\n291,739,801.56\n14,310,137.61\n65,853,453.06\n1,190,747.91\n865,052,768.60\nJun\n45,956,287.64\n26,686,177.09\n47,155,850.80\n128,881,143.56\n23,783,755.16\n60,238,449.95\n105,247,922.50\n120,389,795.99\n326,034,986.61\n17,068,663.50\n108,828,797.15\n1,325,268.69\n1,011,597,098.65\nJul\n40,699,352.12\n28,329,526.03\n45,417,841.09\n128,847,329.07\n21,958,796.02\n62,326,844.37\n103,536,398.88\n112,642,685.48\n401,574,353.33\n17,902,000.20\n112,555,899.49\n1,117,408.25\n1,076,908,434.33\nAug\n68,438,409.63\n39,107,020.53\n53,616,955.67\n171,501,037.83\n25,370,674.58\n68,913,237.19\n162,326,617.25\n137,243,494.58\n538,409,018.36\n23,523,309.06\n146,121,882.24\n1,197,164.45\n1,435,768,821.37\nSep\n81,174,128.75\n51,501,554.76\n58,104,791.47\n204,056,688.73\n63,246,197.07\n174,562,749.46\n172,521,502.90\n138,936,277.91\n626,755,883.05\n25,607,188.82\n182,077,675.02\n11,177,650.78\n1,789,722,288.71\nOct\n83,201,043.64\n63,984,990.31\n67,031,137.91\n207,367,773.63\n40,617,325.27\n155,873,800.58\n179,051,392.63\n157,121,308.46\n575,293,016.53\n27,092,268.91\n201,852,712.89\n3,193,614.07\n1,761,680,384.82\nNov\n88,153,064.47\n61,978,896.61\n78,744,676.95\n236,152,455.10\n39,915,042.93\n100,872,718.26\n214,281,243.03\n200,240,592.45\n606,580,960.90\n32,903,876.70\n233,604,874.73\n119,223.24\n1,893,547,625.35\nDec\n106,799,918.36\n60,886,327.29\n73,518,960.29\n260,923,049.61\n48,959,835.11\n122,528,998.69\n242,741,914.11\n171,982,170.05\n747,151,447.16\n37,453,518.81\n270,164,633.75\n10,753,958.63\n2,153,864,731.86\n2023\nJan\n114,820,700.76\n79,460,381.87\n82,589,902.30\n305,204,829.91\n45,118,619.63\n135,072,311.14\n263,222,364.10\n223,632,204.71\n896,980,184.31\n37,534,721.96\n288,326,194.21\n7,916,696.92\n2,479,879,111.81\nFeb\n118,375,609.69\n85,995,682.64\n93,761,236.16\n312,626,341.50\n56,688,432.58\n147,245,179.36\n266,610,300.93\n273,709,371.16\n938,437,753.70\n39,909,193.60\n292,841,727.23\n6,842,518.78\n2,633,043,347.35\nMar\n119,963,933.20\n85,731,698.36\n100,697,025.58\n322,453,842.97\n45,619,349.07\n148,455,496.20\n286,712,763.58\n273,572,570.94\n1,064,798,433.60\n44,685,590.57\n330,031,150.72\n14,190,575.51\n2,836,912,430.30\nApr\n131,146,380.30\n89,322,733.64\n99,723,066.84\n324,249,300.08\n45,619,349.07\n149,245,957.86\n289,670,780.41\n273,578,020.75\n1,072,456,655.25\n44,926,335.64\n331,068,417.40\n14,190,575.51\n2,865,197,572.73\nMay\n269,460,363.15\n210,867,012.29\n216,906,304.04\n631,589,937.93\n113,357,505.65\n362,294,051.43\n581,761,350.37\n545,536,680.63\n2,504,454,969.80\n102,648,366.24\n702,960,786.40\n28,985,518.44\n6,270,822,846.38\nJun\n581,642,309.76\n428,772,683.41\n410,699,487.74\n1,366,510,052.55\n227,784,986.62\n700,617,673.80\n1,094,382,949.63\n1,185,026,806.70\n5,283,380,622.25\n199,474,750.17\n1,564,762,675.09\n40,673,167.41\n13,083,728,165.12\nJul\n535,377,934.43\n436,808,429.52\n413,150,823.99\n1,394,747,348.19\n206,866,966.84\n711,462,740.79\n1,157,802,106.76\n982,808,623.76\n4,533,520,705.60\n184,470,180.50\n1,464,856,207.23\n37,277,944.87\n12,059,150,012.48\nAug\n537,439,303.14\n422,479,784.07\n413,226,172.28\n1,343,458,227.81\n285,743,813.63\n662,607,567.90\n1,197,898,912.17\n1,004,826,660.33\n4,639,684,933.86\n209,521,849.57\n1,553,047,811.00\n38,718,344.86\n12,308,653,380.62\nSep\n632,283,427.70\n491,562,911.40\n426,060,663.50\n1,510,241,869.90\n296,604,785.00\n789,587,698.10\n1,300,914,518.50\n1,250,791,974.40\n5,214,851,978.10\n217,382,274.50\n1,781,106,637.90\n43,583,660.40\n13,954,972,399.20\nOct\n721,203,425.90\n541,011,315.61\n554,440,420.11\n1,657,817,920.26\n309,251,239.26\n841,367,968.72\n1,438,592,170.70\n1,187,082,973.91\n5,659,995,585.31\n260,248,908.48\n1,906,411,104.87\n49,647,602.04\n15,127,070,635.17\nNov\n703,080,882.81\n566,993,243.11\n532,803,998.34\n1,698,467,822.71\n346,291,934.28\n269,835,136.30\n1,554,832,195.31\n1,195,274,632.93\n6,063,945,342.98\n293,942,495.06\n2,031,657,547.49\n46,866,707.11\n15,885,967,935.90\nDec\n605,605,541.75\n423,493,370.41\n730,799,100.82\n1,549,938,533.11\n553,801,063.21\n767,650,016.19\n1,254,233,648.36\n1,348,969,145.10\n6,689,372,974.36\n247,647,472.27\n2,091,666,965.12\n53,713,528.87\n16,882,080,093.66\n2024\nJan\n833,932,128.83\n694,796,940.75\n1,029,474,123.23\n2,082,328,111.88\n884,819,488.86\n2,004,818,592.25\n1,699,026,894.47\n1,837,959,924.52\n12,124,252,579.26\n323,794,777.38\n3,044,604,553.80\n71,184,543.75\n \n26,630,992,658.97\n \nSource: Reserve Bank of Zimbabwe, 2024\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \n$ ('000)\n \n \n25 \n \n \n \nMinimum\nMaximum\nMinimum\nMaximum\n2021\nJan\n32.65\n55.57\n24.77\n24.77\nFeb\n36.67\n52.01\n21.36\n21.36\nMar\n35.83\n55.77\n22.61\n22.61\nApr\n35.22\n57.08\n22.59\n22.59\nMay\n34.84\n56.21\n21.76\n21.76\nJun\n36.25\n57.04\n22.46\n22.46\nJul\n36.56\n57.00\n21.66\n21.66\nAug\n41.06\n57.39\n39.65\n39.65\nSep\n40.61\n58.44\n39.50\n39.50\nOct\n41.86\n58.68\n45.81\n45.81\nNov\n39.13\n58.74\n38.10\n38.10\nDec\n39.34\n58.65\n37.94\n37.94\n2022\nJan\n39.32\n57.26\n39.62\n39.62\nFeb\n40.55\n57.28\n64.02\n64.02\nMar\n40.74\n57.83\n43.88\n43.88\nApr\n38.15\n59.59\n45.56\n45.56\nMay\n38.01\n59.70\n47.25\n47.25\nJun\n38.45\n60.09\n48.25\n48.25\nJul\n82.75\n123.71\n165.45\n165.45\nAug\n88.46\n123.46\n155.96\n155.96\nSep\n98.07\n123.64\n158.46\n158.46\nOct\n99.37\n127.72\n115.26\n115.26\nNov\n99.03\n127.58\n110.97\n110.97\nDec\n99.02\n125.64\n110.83\n110.83\n2023\nJan\n90.05\n125.64\n116.03\n116.03\nFeb\n60.12\n125.64\n80.88\n80.88\nMar\n74.35\n110.30\n81.46\n81.46\nApr\n74.48\n105.75\n86.96\n86.96\nMay\n77.86\n107.41\n83.61\n83.61\nJun\n76.33\n103.85\n92.64\n92.64\nJul\n77.82\n103.56\n94.80\n94.80\nAug\n77.63\n102.79\n93.18\n93.18\nSep\n76.49\n100.20\n92.69\n92.69\nOct\n71.72\n102.10\n92.43\n92.43\nNov\n70.15\n101.53\n93.15\n93.15\nDec\n69.02\n101.71\n93.77\n93.77\n2024\nJan\n70.18\n100.81\n95.24\n95.24\n Source: Reserve Bank of Zimbabwe, 2024\nTABLE 8.1: COMMECIAL BANKS LENDING RATES (percent per annum)\nIndividuals \nCorporates\nEnd of\nWeighted Lending Rates\n \n \n26 \n \n \n \nMinimum\nMaximum\nMinimum\nMaximum\n2022\nJan\n3.66\n5.76\n13.16\n16.95\nFeb\n3.72\n6.29\n16.68\n16.84\nMar\n3.83\n5.94\n14.83\n16.95\nApr\n4.22\n6.35\n16.78\n18.53\nMay\n4.21\n6.35\n16.44\n18.42\nJun\n4.21\n6.35\n16.61\n19.05\nJul\n21.06\n23.44\n50.14\n54.58\nAug\n20.09\n20.25\n52.97\n57.29\nSep\n20.09\n20.25\n57.25\n61.08\nOct\n20.09\n20.25\n54.06\n60.55\nNov\n20.38\n20.53\n56.69\n60.87\nDec\n18.03\n18.03\n55.32\n60.08\n2023\nJan\n18.03\n18.03\n55.32\n60.08\nFeb\n18.03\n18.03\n55.32\n60.08\nMar\n34.01\n35.26\n68.06\n73.39\nApr\n36.00\n36.50\n63.06\n71.72\nMay\n35.33\n35.88\n61.31\n69.61\nJun\n35.33\n33.60\n59.18\n65.00\nJul\n34.29\n35.29\n61.67\n69.44\nAug\n34.29\n35.60\n57.67\n70.35\nSep\n34.29\n35.60\n61.67\n69.33\nOct\n34.29\n35.60\n61.67\n70.35\nNov\n35.00\n38.27\n60.81\n69.76\nDec\n34.38\n37.13\n57.94\n65.65\n2024\nJan\n33.75\n37.13\n56.06\n65.65\n Source: Reserve Bank of Zimbabwe, 2024\n* Deposit rates depict the range of rates qouted by banks. \nSAVINGS\n3 MONTHS\nTABLE 8.2 : COMMECIAL BANKS DEPOSIT RATES (percent per annum)\n \n \n27 \n \n \n \nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2020\nJan\n-3.00\n-2.06\n-0.28\n-2.74\n-1.04\n-0.84\n-1.06\n-4.48\n11.15\n4.75\n-4.37\n-0.58\n0.53\n-0.31\nFeb\n-12.36\n-10.83\n-2.89\n-12.30\n-10.59\n-10.28\n22.91\n-8.51\n14.28\n-12.28\n-6.48\n-5.06\n-7.72\n-5.72\nMar\n9.23\n9.65\n16.27\n2.69\n16.74\n0.11\n17.92\n22.40\n-27.82\n-11.98\n-11.43\n4.92\n-3.80\n2.78\nApr\n11.89\n-6.38\n-7.22\n10.27\n-0.98\n-8.34\n-15.68\n-12.00\n-12.48\n-7.83\n0.34\n-3.49\n10.74\n-0.21\nMay\n-0.71\n-5.16\n9.16\n-0.59\n-8.60\n-3.90\n-4.34\n-3.82\n-7.21\n4.44\n-0.85\n1.57\n0.57\n1.32\nJun\n4.42\n3.69\n8.01\n-2.64\n7.91\n12.94\n19.95\n11.11\n9.88\n-4.54\n0.25\n6.01\n-2.51\n3.85\nJul\n7.34\n4.46\n-0.64\n4.36\n4.41\n5.10\n11.54\n-6.38\n-6.24\n-7.89\n-14.18\n0.79\n11.88\n3.43\nAug\n-4.40\n0.30\n0.59\n0.10\n-0.31\n1.24\n36.61\n-3.95\n2.75\n-0.69\n5.74\n1.56\n-1.86\n0.68\nSep\n0.21\n-0.46\n0.55\n-3.17\n-0.67\n-4.96\n4.69\n0.09\n-1.55\n-2.85\n-3.21\n-0.89\n-0.32\n-0.75\nOct\n-0.88\n-2.63\n4.38\n-3.89\n-0.08\n0.32\n0.85\n0.23\n0.20\n2.44\n0.36\n1.29\n0.48\n1.08\nNov\n1.65\n2.18\n0.83\n-0.14\n1.65\n1.13\n0.02\n0.57\n12.03\n3.79\n0.14\n1.72\n3.63\n2.20\nDec\n1.90\n3.21\n2.81\n1.47\n0.60\n2.51\n-0.25\n0.15\n-1.18\n3.98\n1.26\n2.14\n3.92\n2.60\n2021\nJan\n2.84\n1.59\n1.52\n4.26\n2.44\n2.57\n1.33\n-0.72\n1.69\n-0.48\n3.81\n2.14\n2.87\n2.33\nFeb\n1.27\n-0.30\n-1.71\n-0.49\n1.59\n1.07\n-1.60\n10.67\n-2.10\n-0.94\n0.55\n-0.16\n2.03\n0.41\nMar\n0.15\n-0.08\n1.24\n4.37\n-2.37\n0.65\n4.58\n-0.29\n0.02\n0.74\n-0.18\n0.99\n0.52\n0.87\nApr\n0.12\n-0.57\n0.45\n-0.05\n0.24\n0.70\n0.58\n-0.99\n17.14\n1.41\n-3.37\n0.87\n0.25\n0.71\nMay\n0.62\n2.41\n1.41\n0.84\n-0.02\n0.80\n0.07\n42.32\n1.32\n2.36\n0.65\n2.15\n0.28\n1.66\nJun\n1.64\n3.87\n9.35\n6.99\n1.48\n0.57\n0.97\n1.28\n4.88\n2.93\n1.92\n5.07\n2.37\n4.38\nJul\n1.29\n1.73\n0.51\n-0.08\n-0.69\n0.33\n0.10\n0.58\n-0.05\n-0.01\n1.15\n0.51\n0.06\n0.40\nAug\n1.73\n0.72\n1.03\n0.99\n1.14\n1.06\n3.56\n0.29\n-0.05\n2.11\n1.60\n1.10\n0.74\n1.01\nSep\n1.76\n0.08\n1.58\n1.43\n0.64\n0.01\n3.95\n0.87\n-0.78\n1.33\n1.53\n1.27\n2.30\n1.53\nOct\n1.51\n0.77\n0.84\n1.78\n0.72\n1.47\n7.45\n0.36\n2.11\n1.62\n0.91\n1.53\n3.51\n2.03\nNov\n0.85\n0.34\n1.47\n1.12\n0.68\n1.22\n4.43\n0.37\n-6.92\n1.67\n1.11\n0.96\n3.19\n1.53\nDec\n2.41\n0.98\n1.50\n1.30\n0.64\n-0.77\n0.26\n1.01\n0.03\n1.14\n2.05\n1.17\n1.99\n1.38\n2022\nJan\n1.08\n0.64\n2.14\n0.42\n0.71\n0.43\n1.51\n12.08\n0.94\n1.90\n0.11\n1.68\n2.53\n1.90\nFeb\n1.82\n3.39\n1.89\n1.79\n0.68\n1.08\n0.60\n0.92\n0.35\n1.39\n1.69\n1.76\n3.43\n2.20\nMar\n2.59\n2.24\n0.77\n1.22\n0.96\n5.86\n2.27\n0.82\n0.15\n1.02\n-0.06\n1.67\n3.05\n2.04\nApr\n3.38\n1.68\n14.21\n5.59\n1.77\n1.93\n1.73\n1.76\n2.91\n6.05\n1.87\n7.17\n6.94\n7.11\nMay\n3.70\n8.73\n2.02\n1.21\n2.46\n3.36\n2.47\n2.06\n0.48\n3.33\n3.78\n3.12\n9.56\n4.85\nJun\n8.20\n7.94\n12.49\n10.84\n13.72\n5.65\n4.95\n6.63\n4.63\n5.35\n9.86\n9.85\n17.32\n11.95\nJul\n4.57\n1.91\n8.66\n5.87\n3.74\n2.16\n1.21\n2.64\n11.86\n2.00\n2.15\n5.88\n12.09\n7.71\nAug\n3.71\n2.47\n2.01\n1.44\n1.98\n1.59\n1.91\n1.12\n0.41\n1.21\n2.93\n2.02\n4.94\n2.91\nSep\n-2.39\n-1.80\n5.21\n-3.33\n-0.66\n-1.20\n10.12\n0.36\n8.21\n-1.80\n-1.68\n1.99\n-3.23\n0.36\nOct\n0.81\n1.31\n6.74\n1.83\n0.72\n0.88\n2.83\n1.21\n0.10\n0.72\n0.68\n3.29\n2.10\n2.93\nNov\n-0.23\n0.35\n0.34\n0.60\n0.85\n0.25\n4.30\n0.48\n16.78\n19.32\n0.85\n1.71\n0.23\n1.27\nDec\n0.39\n0.76\n0.20\n-0.24\n0.03\n-0.15\n3.91\n-0.10\n0.00\n0.73\n-0.23\n0.28\n1.55\n0.66\n2023\nJan\n0.17\n-0.62\n0.81\n0.34\n0.26\n0.45\n-2.36\n0.45\n0.06\n-0.58\n0.54\n0.33\n-0.77\n0.00\nFeb\n-3.59\n-1.56\n-3.56\n-1.27\n-1.02\n-4.40\n-1.81\n-2.19\n0.06\n-3.63\n-7.55\n-3.40\n-4.54\n-3.73\nMar\n-0.57\n-0.46\n-0.01\n-0.71\n-0.10\n-0.13\n0.44\n-0.24\n0.16\n-0.16\n-0.42\n-0.18\n-0.66\n-0.32\nApr\n1.05\n0.05\n2.79\n-0.18\n0.92\n0.18\n0.59\n0.43\n0.53\n0.35\n0.55\n1.36\n1.96\n1.54\nMay\n3.05\n0.34\n3.03\n-0.08\n2.87\n1.74\n6.10\n1.65\n1.19\n0.99\n2.35\n2.34\n3.37\n2.64\nJun\n11.74\n0.93\n14.88\n-0.85\n9.19\n5.27\n23.88\n5.15\n3.07\n3.15\n6.58\n9.53\n18.23\n12.10\nJul\n1.68\n0.51\n0.36\n0.56\n-0.34\n0.69\n0.68\n-0.11\n1.04\n2.82\n1.11\n0.65\n1.85\n1.03\nAug\n-1.11\n-0.11\n-2.00\n-0.19\n-0.02\n-0.02\n-0.61\n-0.53\n-0.45\n-0.40\n-1.37\n-1.12\n-1.83\n-1.34\nSep\n0.32\n0.04\n0.34\n0.30\n-0.38\n0.63\n5.77\n-0.21\n5.97\n-0.10\n0.91\n0.91\n1.05\n0.95\nOct\n1.91\n1.10\n4.96\n0.54\n1.89\n2.81\n-2.69\n0.43\n-4.21\n0.53\n2.43\n2.48\n2.42\n2.46\nNov\n1.94\n0.60\n8.93\n-0.36\n2.45\n1.30\n3.24\n0.79\n4.28\n-0.67\n1.07\n4.39\n4.89\n4.54\nDec\n3.49\n1.41\n5.40\n0.63\n0.55\n0.86\n0.71\n1.92\n0.22\n1.07\n1.95\n2.90\n8.64\n4.70\n2024\nJan\n2.65\n-2.53\n5.48\n-1.30\n-3.17\n11.61\n-8.22\n-3.90\n5.52\n0.78\n-3.36\n2.50\n15.01\n6.58\nSource: Zimstat, 2024\nALCOHOLIC \nBEVERAGES & \nTOBACCO\nFURNITURE AND \nEQUIPMENT\nHEALTH\nTRANSPORT\nCOMMUNICATION\nFOOD & NON \nALCOHOLIC \nBEVERAGES\nALL \nITEMS\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & OTHER \nFUELS\nCLOTHING & \nFOOTWEAR\nRECREATION & \nCULTURE\nRESTAURANTS & \nHOTELS\nEDUCATION\nMISC. GOODS & \nSERVICES\nTOTAL NON \nFOOD\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n \n \n28 \n \n \n \nFOOD \nINFLATION\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2020\nJun\n49.10\n-10.07\n29.30\n-16.31\n1.57\n-10.74\n24.86\n25.51\n-53.67\n-27.59\n-13.54\n9.22\n44.68\n15.98\nJul\n51.72\n-10.57\n31.42\n-14.75\n0.95\n-2.95\n46.48\n8.81\n-54.66\n-35.14\n-34.68\n8.73\n54.96\n17.77\nAug\n41.24\n-5.57\n34.15\n-8.90\n11.10\n-6.93\n98.46\n4.21\n-53.15\n-34.91\n-29.70\n10.35\n42.88\n17.03\nSep\n54.50\n5.38\n41.86\n4.35\n14.13\n-7.18\n106.87\n-1.44\n-33.62\n-14.65\n-13.91\n21.81\n65.73\n30.52\nOct\n19.20\n-16.47\n38.22\n-16.86\n1.99\n-16.89\n109.61\n-14.02\n-26.79\n-24.38\n-27.05\n7.83\n18.98\n10.42\nNov\n16.40\n-8.49\n38.98\n-10.94\n5.74\n-10.42\n118.10\n-9.99\n-17.04\n-26.54\n-26.56\n10.98\n18.95\n12.90\nDec\n13.75\n-5.58\n33.93\n-7.91\n6.56\n-6.80\n122.72\n-8.61\n-13.92\n-26.98\n-29.39\n9.88\n14.77\n11.10\n2021\nJan\n20.60\n-2.07\n36.36\n-1.28\n10.32\n-3.60\n128.10\n-5.01\n-21.25\n-30.63\n-23.35\n12.89\n17.44\n14.03\nFeb\n39.34\n9.50\n38.02\n12.01\n25.35\n8.60\n82.62\n14.90\n-32.54\n-21.66\n-17.59\n18.72\n29.84\n21.45\nMar\n14.17\n6.58\n29.52\n3.24\n5.87\n19.12\n92.07\n6.36\n6.81\n-2.73\n-7.44\n18.40\n22.51\n19.45\nApr\n14.30\n5.98\n30.11\n3.19\n6.13\n19.96\n93.18\n5.32\n25.12\n-1.35\n-10.56\n19.42\n22.82\n20.29\nMay\n15.83\n14.44\n20.88\n4.68\n16.10\n25.82\n102.08\n55.83\n36.63\n-3.32\n-9.20\n20.10\n22.47\n20.70\nJun\n12.75\n14.64\n22.39\n15.03\n9.18\n12.04\n70.11\n42.04\n30.41\n4.24\n-7.69\n19.04\n28.60\n21.31\nJul\n6.39\n11.64\n23.80\n10.15\n3.85\n6.95\n52.67\n52.59\n39.02\n13.15\n8.80\n18.71\n15.01\n17.76\nAug\n13.21\n12.09\n24.34\n11.12\n5.35\n6.76\n15.74\n59.33\n35.23\n16.34\n4.54\n18.18\n18.05\n18.15\nSep\n14.96\n12.70\n25.60\n16.41\n6.74\n12.34\n14.92\n60.58\n36.28\n21.35\n9.67\n20.76\n21.15\n20.86\nOct\n17.72\n16.64\n21.34\n23.27\n7.60\n13.62\n22.43\n60.80\n38.87\n20.39\n10.27\n21.05\n24.80\n21.99\nNov\n16.80\n14.54\n22.11\n24.82\n6.57\n13.72\n27.83\n60.49\n15.38\n17.92\n11.34\n20.15\n24.28\n21.19\nDec\n17.38\n12.07\n20.56\n24.61\n6.62\n10.09\n28.48\n61.86\n16.79\n14.71\n12.21\n19.00\n21.96\n19.76\n2022\nJan\n15.38\n11.03\n21.29\n20.02\n4.81\n7.80\n28.71\n82.72\n15.93\n17.46\n8.22\n18.46\n21.56\n19.26\nFeb\n16.00\n15.14\n25.74\n22.76\n3.87\n7.80\n31.58\n66.63\n18.83\n20.23\n9.44\n20.73\n23.23\n21.38\nMar\n18.84\n17.81\n25.15\n19.07\n7.41\n13.39\n28.67\n68.48\n18.98\n20.57\n9.57\n21.54\n26.32\n22.80\nApr\n22.71\n20.48\n42.29\n25.78\n9.04\n14.77\n30.15\n73.15\n4.52\n26.09\n15.50\n29.14\n34.75\n30.60\nMay\n26.46\n27.91\n43.15\n26.23\n11.74\n17.68\n33.27\n24.17\n3.66\n27.29\n19.09\n30.37\n47.22\n34.70\nJun\n34.62\n32.92\n47.25\n30.78\n25.21\n23.62\n38.51\n30.74\n3.41\n30.29\n28.37\n36.30\n68.72\n44.47\nJul\n38.99\n33.16\n59.19\n38.55\n30.80\n25.88\n40.04\n33.42\n15.74\n32.91\n29.63\n43.58\n89.00\n54.99\nAug\n41.70\n35.49\n60.73\n39.17\n31.89\n26.54\n37.81\n34.54\n16.27\n31.74\n31.34\n44.88\n96.89\n57.92\nSep\n35.93\n32.94\n66.48\n32.64\n30.19\n25.02\n45.99\n33.85\n26.81\n27.66\n27.17\n45.91\n86.25\n56.09\nOct\n35.00\n33.64\n76.23\n32.71\n30.19\n24.29\n39.72\n34.98\n24.31\n26.52\n26.89\n48.43\n83.72\n57.47\nNov\n33.55\n33.65\n74.26\n32.03\n30.42\n23.10\n39.54\n35.12\n55.96\n48.48\n26.56\n49.54\n78.43\n57.06\nDec\n30.92\n33.36\n72.02\n30.01\n29.63\n23.87\n44.62\n33.64\n55.91\n47.88\n23.73\n48.22\n77.66\n55.93\n2023\nJan\n29.74\n31.69\n69.78\n29.91\n29.05\n23.89\n39.11\n19.78\n54.56\n44.29\n24.25\n46.26\n71.94\n53.03\nFeb\n22.86\n25.38\n60.69\n26.01\n26.87\n23.89\n35.79\n16.09\n54.11\n37.14\n12.96\n38.85\n58.69\n44.14\nMar\n19.07\n22.07\n59.46\n23.60\n25.55\n23.89\n33.36\n14.86\n54.13\n35.54\n12.56\n36.31\n52.99\n40.80\nApr\n16.38\n20.11\n43.52\n16.85\n24.51\n23.89\n31.87\n13.36\n50.56\n28.25\n11.10\n28.93\n45.87\n33.48\nMay\n15.66\n10.84\n44.93\n15.37\n25.01\n23.89\n36.54\n12.90\n51.63\n25.34\n9.57\n27.96\n37.63\n30.68\nJun\n19.45\n3.65\n48.01\n3.20\n20.03\n23.89\n61.17\n11.33\n49.36\n22.73\n6.31\n27.58\n38.70\n30.85\nJul\n16.14\n2.22\n36.71\n-1.98\n15.30\n23.89\n60.33\n8.34\n34.91\n23.72\n5.22\n21.28\n26.03\n22.74\nAug\n10.74\n-0.36\n31.33\n-3.54\n13.04\n23.89\n56.36\n6.57\n33.75\n21.75\n0.82\n17.55\n17.90\n17.66\nSep\n13.82\n1.52\n25.26\n0.08\n13.36\n23.89\n50.18\n5.97\n30.99\n23.86\n3.48\n16.31\n23.12\n18.36\nOct\n15.06\n1.31\n23.16\n-1.20\n14.66\n7.28\n42.11\n5.15\n25.35\n23.64\n5.28\n15.40\n23.50\n17.82\nNov\n17.55\n1.56\n33.71\n-2.14\n16.48\n8.40\n40.66\n5.48\n11.94\n2.93\n5.52\n18.43\n29.24\n21.63\nDec\n21.19\n2.22\n40.65\n-1.28\n17.09\n9.49\n36.33\n7.61\n12.19\n3.27\n7.82\n21.52\n38.26\n26.52\n2024\nJan\n24.18\n0.25\n47.17\n-2.90\n13.08\n21.65\n28.14\n2.95\n18.31\n4.68\n3.64\n24.16\n60.25\n34.84\nSource: Zimstat, 2024\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \nNON-FOOD INFLATION\nHEALTH\nTRANSPORT\nCOMMUNICATION\nEDUCATION\nALCOHOLIC \nBEVERAGES \n& \nTOBACCO \nCLOTHING \n& \nFOOTWEAR\nHOUSING, \nWATER, \nELECTRICTY, \nGAS & \nOTHER FUELS\nFURNITURE \nAND \nEQUIPMENT\nRECREATION \n& CULTURE\nRESTAURANTS \n& HOTELS\nMISC. \nGOODS & \nSERVICES\nTOTAL \nNON \nFOOD\nFOOD & NON \nALCOHOLIC \nCEVERAGES \nALL ITEMS\n \n \n29 \n \n \n \n2022\nJan\n115.422\n7.4069\n9.8109\n0.9995\n128.8401\n154.8332\nFeb\n124.019\n8.0738\n10.7214\n1.0732\n138.2625\n165.6148\nMar\n142.424\n9.8091\n12.4763\n1.1665\n159.0161\n186.8670\nApr\n159.348\n10.0334\n13.1064\n1.2217\n167.9530\n199.4880\nMay\n290.888\n18.7787\n24.3182\n2.2757\n312.8351\n367.1438\nJun\n366.269\n22.5194\n29.7593\n2.6861\n382.8607\n444.3572\nJul\n416.289\n25.2673\n33.2407\n3.1299\n425.1560\n507.7061\nAug\n546.825\n32.3336\n42.8164\n3.9498\n548.9033\n638.9381\nSep\n621.532\n34.5376\n46.4284\n4.2999\n609.9716\n691.9517\nOct\n632.137\n34.7014\n47.2839\n4.2742\n628.8500\n732.8998\nNov\n654.865\n38.5947\n51.0140\n4.7279\n677.5889\n784.3319\nDec\n671.447\n39.5836\n52.6414\n5.0669\n715.4935\n809.2610\n2023\nJan\n796.522\n45.7487\n61.8897\n6.1132\n863.6683\n983.1863\nFeb\n889.133\n48.1898\n66.7294\n6.5202\n941.1468\n1070.6489\nMar\n929.862\n52.0727\n71.3204\n6.9912\n1013.3634\n1151.6803\nApr\n1047.445\n57.1437\n79.4723\n7.7646\n1151.0384\n1309.3061\nMay\n2577.056\n130.3252\n186.5789\n18.4901\n2755.1310\n3192.3286\nJun\n5739.000\n306.2597\n425.5469\n39.6710\n6240.5886\n7250.9396\nJul\n4516.803\n255.8972\n346.4388\n31.8342\n4971.8704\n5801.8328\nAug\n4608.107\n246.2293\n343.3039\n31.5721\n5031.5916\n5860.1292\nSep\n5466.747\n288.5390\n396.3391\n36.6073\n5782.7246\n6680.6377\nOct\n5698.961\n301.1746\n417.7338\n37.9539\n6039.7584\n6920.5328\nNov\n5791.080\n309.3526\n429.6053\n39.3710\n6363.8242\n7330.4810\nDec\n6104.723\n329.1177\n455.4123\n43.1811\n6753.9598\n7783.5213\n2024\nJan\n10152.393\n540.1665\n748.7916\n69.5003\n11075.3915\n12896.8157\nSource: Reserve Bank of Zimbabwe, 2024\n TABLE 10 : SELECTED INTERNATIONAL EXCHANGE RATES\n1. ZWL$ dollar per unit of foreign currency\nEND OF\nUSA DOLLAR\nSOUTH ARFICAN \nRAND\nBOTSWANA PULA\nJAPANESE YEN\nEURO\nPOUND \nSTERLING\n \n \n30 \n \n \n \nMarket Capitalisation\nAll Share Index*\nZWL$ millions\n2020\nJan\n332.9\n344.9\n304.86\n179,559,446\n43,426.5\nFeb\n473.13\n826.73\n360.13\n172,678,984\n60,987.5\nMar\n456.21\n720.47\n425.24\n237,667,043\n58,612.1\nApr\n488.60\n826.64\n269.66\n107,308,931\n63,387.9\nMay\n1180.14\n1582.86\n568.96\n218,832,930\n152,719.7\nJune**\n1788.75\n3995.48\n379.93\n519,901,300\n228,577.1\nAug\n1389.23\n3709.15\n1,026.76\n164,501,200\n175,678.4\nSep\n1638.17\n4128.52\n4,640.88\n1,093,040,821\n206,502.5\nOct\n1476.87\n3792.35\n986.70\n397,006,127\n179,690.0\nNov\n1595.59\n3322.22\n4,103.78\n470,899,659\n193,270.8\nDec\n2636.34\n4134.09\n2,734.50\n316,737,200\n317,879.3\n2021\nJan\n3600.82\n4356.74\n3,513.59\n2,477,166,688\n434,856.23\nFeb\n4154.37\n6683.44\n1,529.25\n149,031,800\n501,184.95\nMar\n4489.47\n5315.39\n4,517.14\n203,633,747\n531,742.64\nApr\n4641.11\n5061.28\n3,075.98\n223,494,202\n540,745.24\nMay\n5428.28\n6820.54\n3,917.41\n188,748,200\n634,011.15\nJun\n6194.88\n6211.49\n4458.87\n248,500,624\n745,175.95\nJul\n6818.29\n6621.17\n2921.32\n181,010,800\n803,900.15\nAug\n6652.31\n6115.85\n3456.94\n147,232,800\n792,291.48\nSep\n8580.16\n6014.53\n4730.25\n2,909,442,557\n1,032,472.92\nOct\n11329.48\n6652.04\n5661.76\n108,843,000\n1,378,227.92\nNov\n 10695.57\n7193.11\n9883.24\n791,653,520\n1,290,069.75\nDec\n12079.74\n7815.37\n17577.25\n228,225,060\n1,317,205.11\n2022\nJan\n12079.74\n8196.79\n3704.23\n82,402,101\n1,475,217.45\nFeb\n14990.42\n9300.03\n7979.35\n156,327,700\n1,863,028.60\nMar\n15858.92\n11289.34\n8186.00\n117,815,800\n1,964,738.42\nApr\n28391.75\n30527.28\n11366.89\n193,411,483\n3,547,347.52\nMay\n23072.46\n20021.24\n8211.45\n195,475,400\n2,893,011.70\nJune\n19791.94\n20021.24\n14570.16\n271,227,100\n2,439,165.45\nJuly\n16594.91\n20021.24\n23673.34\n239,937,180\n2,068,222.01\nAug\n13705.12\n15473.37\n8674.85\n139,225,500\n1,685,592.28\nSept\n14771.65\n18929.75\n5128.54\n137,092,750\n1,819,157.07\nOct\n15072.14\n23659.53\n8657.90\n201,566,548\n1,826,101.68\nNov\n14577.46\n25478.67\n7680.78\n90,311,600\n1,610,203.36\nDec\n19493.85\n25487.77\n27753.79\n472,926,200\n2,044,869.14\n2023\nJan\n22813.24\n25496.86\n11638.16\n102,792,200\n2,460,037.66\nFeb\n28548.02\n29207.92\n24410.54\n164,006,458\n2,576,324.76\nMar\n38568.48\n37359.78\n14262.67\n97,920,600\n3,381,456.06\nApr\n41391.62\n36393.55\n16756.85\n74,505,000\n3,482,408.54\nMay\n108195.29\n52765.85\n34867.41\n206,593,600\n8,939,058.47\nJun\n171408.90\n76960.49\n85279.40\n192,473,571\n13,987,476.83\nJul\n114746.13\n89512.59\n40846.72\n176,547,600\n9,171,346.28\nAug\n125134.79\n109159.36\n39214.53\n103,854,600\n9,723,577.74\nSep\n126642.42\n125531.67\n91310.72\n343,359,119\n9,873,493.87\nOct\n157083.06\n125531.67\n31773.08\n64,000,500\n12,576,665.45\nNov\n191271.68\n148883.44\n54864.31\n162,675,500\n15,311,628.01\nDec\n210833.92\n145542.27\n109727.94\n254,991,213\n16,812,914.36\n2024\nJan\n542743.66\n163733.73\n112532.73\n79,766,490\n43,459,150.79\nSource: Zimbabwe Stock Exchange, 2024\n**As at 26 June 2020\n*All Share index was introduced in January, 2018\nTABLE 11: ZIMBABWE STOCK MARKET STATISTICS\nMining Index\n Market Turnover \nZWL$ million \nVolume of Shares\nEND OF\n \n \n31 \n \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n255551.3\n-\n21042.2\n2300.3\n35349.1\n66624.4\nFeb\n226335.8\n-\n22882.6\n2288.9\n36434.4\n63598.2\nMar\n320422.1\n-\n28569.9\n3316.6\n44524.0\n86463.9\nApr\n288958.8\n-\n30071.5\n2807.0\n44131.6\n90580.4\nMay\n361427.1\n-\n36765.1\n3193.7\n49745.8\n89471.3\nJun\n388757.5\n-\n38540.1\n3200.0\n51437.4\n115145.7\nJul\n379659.9\n-\n45808.1\n2489.1\n57565.8\n145027.0\nAug\n397539.0\n-\n52853.9\n4086.0\n60908.4\n159206.6\nSep\n477933.6\n-\n52262.7\n4179.5\n64139.2\n181194.8\nOct\n481180.9\n-\n53165.9\n3839.9\n65329.0\n197972.5\nNov\n621896.7\n-\n56025.3\n4877.0\n63017.5\n252407.9\nDec\n747035.6\n-\n67903.9\n4705.5\n76511.6\n264749.2\n2022\nJan\n802677.7\n-\n55961.6\n5074.7\n53456.3\n218545.3\nFeb\n672723.0\n-\n59581.6\n5607.0\n66812.0\n238910.8\nMar\n961452.0\n-\n75050.7\n7882.2\n82886.9\n342168.7\nApr\n976617.2\n-\n89192.6\n8391.5\n89672.0\n293204.6\nMay\n1205990.0\n-\n110807.3\n13712.8\n106881.8\n469185.2\nJune\n1601225.3\n-\n134551.0\n18810.6\n123721.3\n618347.5\nJuly\n1754112.0\n-\n170480.6\n20413.1\n172562.5\n713401.1\nAug\n2334295.0\n-\n152343.4\n31418.6\n178188.9\n826377.1\nSep\n2793056.6\n-\n177701.7\n35144.4\n202368.1\n872807.4\nOct\n2728731.3\n-\n186478.9\n50202.3\n209758.0\n622412.8\nNov\n3370779.9\n-\n202876.2\n61086.7\n213295.3\n734610.6\nDec\n3310814.9\n-\n246783.6\n76872.0\n249516.4\n1106346.5\n2023\nJan\n3289379.3\n-\n240010.3\n68386.7\n238455.3\n1107756.4\nFeb\n3050933.3\n-\n219437.8\n73672.3\n245282.5\n1202998.5\nMar\n5068223.7\n-\n308609.1\n85343.4\n328822.3\n1517972.6\nApr\n5294044.5\n-\n341571.3\n79754.6\n355007.3\n1517972.6\nMay\n6275310.7\n-\n518333.9\n173170.7\n532078.6\n3274968.5\nJun\n17059664.0\n-\n882362.6\n615190.9\n1210486.2\n6640627.1\nJul\n17859586.4\n-\n1033836.9\n541445.6\n1620242.8\n6077538.3\nAug\n17955865.5\n-\n1017990.5\n649827.9\n1440537.4\n6244772.4\nSep\n18690087.0\n-\n1221725.3\n773363.9\n1672654.2\n7746084.3\nOct\n19808639.1\n-\n1264577.2\n826681.2\n5116902.9\n8661662.9\nNov\n23685304.8\n-\n1429269.5\n901515.6\n1999069.4\n9557300.7\nDec\n26396219.4\n-\n1805050.5\n1092682.6\n2604059.2\n10150615.3\n2024\nJan\n28285124.94\n-\n1907120.03\n1843871.04\n4294126.98\n22017137.9\nSource: Reserve Bank of Zimbabwe, 2024\nTABLE 12.1 : ZETSS AND RETAIL PAYMENTS \n Values of Transactions (ZWL$ millions)\n \n \n32 \n \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2021\nJan\n720.0\n-\n9849.3\n229.0\n94691.4\n872.2\nFeb\n806.0\n-\n12309.3\n527.8\n90078.0\n754.9\nMar\n1112.8\n-\n15178.8\n751.0\n105272.0\n1003.7\nApr\n951.7\n-\n15185.0\n605.5\n97253.3\n1040.1\nMay\n1029.8\n-\n16511.3\n664.4\n103708.7\n994.8\nJun\n1076.9\n-\n14797.9\n581.9\n99349.6\n982.1\nJul\n1028.2\n-\n15217.6\n551.0\n102587.6\n980.8\nAug\n1045.0\n-\n14624.5\n475.4\n105269.7\n955.8\nSep\n1193.1\n-\n15397.6\n492.2\n104141.9\n2092.6\nOct\n1114.2\n-\n18207.4\n434.5\n107294.6\n2342.6\nNov\n1144.9\n-\n17435.9\n477.0\n98386.5\n2322.9\nDec\n1220.3\n-\n20029.6\n519.5\n106428.6\n2580.6\n2022\nJan\n957.9\n-\n15480.2\n439.9\n83661.8\n1902.9\nFeb\n981.0\n-\n15190.4\n433.7\n78916.1\n1895.3\nMar\n1242.3\n-\n16967.6\n519.1\n87501.1\n2128.6\nApr\n1073.0\n-\n15906.2\n458.0\n82673.4\n1937.6\nMay\n1213.5\n-\n16069.9\n477.8\n78385.2\n2001.2\nJune\n1190.3\n-\n15304.7\n474.2\n75631.7\n1705.1\nJuly\n1115.8\n-\n16063.8\n517.0\n88030.6\n1866.7\nAug\n1028.0\n-\n13686.8\n489.1\n76957.8\n1623.7\nSep\n1084.6\n-\n13084.7\n455.5\n71362.1\n2225.2\nOct\n969.3\n-\n12986.8\n510.9\n67641.7\n1825.4\nNov\n1001.4\n-\n12324.1\n499.9\n59151.5\n2430.2\nDec\n1013.6\n-\n14316.9\n616.7\n60584.5\n2469.8\n2023\nJan\n918.9\n-\n11734.0\n444.0\n48617.1\n1693.0\nFeb\n886.7\n-\n10301.5\n479.9\n43326.5\n1895.8\nMar\n1092.6\n-\n13217.0\n594.0\n50037.4\n1927.1\nApr\n907.6\n-\n14375.1\n526.7\n47171.7\n1982.9\nMay\n1119.2\n-\n12808.7\n576.7\n49143.2\n2233.6\nJun\n1050.2\n-\n10190.6\n606.0\n45488.8\n1213.0\nJul\n942.7\n-\n8226.8\n1777.1\n42648.8\n993.7\nAug\n888.0\n-\n8434.6\n653.6\n42648.8\n977.5\nSep\n964.1\n-\n9659.0\n703.6\n45148.7\n1061.4\nOct\n949.1\n-\n9449.3\n619.0\n50640.6\n904.4\nNov\n924.5\n-\n9525.7\n623.3\n52332.4\n1048.5\nDec\n924.5\n-\n11846.0\n776.5\n56451.0\n1026.2\n2024\nJan\n914.9\n-\n10017.9\n708.1\n52445.0\n882.8\nSource: Reserve Bank of Zimbabwe, 2024\nTABLE 12.2 : ZETSS AND RETAIL PAYMENTS \n Volumes of Transactions (000's)\n \n \n33 \n \n \n \nEND OF\nEXPORTS\nIMPORTS\nTOTAL TRADE\nTRADE BALANCE\n2021\nJan\n282.9\n460.3\n743.20\n-177.4\nFeb\n340.8\n451.9\n792.70\n-111.1\nMar\n461.8\n527.2\n989.00\n-65.4\nApr\n444.7\n489.9\n934.60\n-45.2\nMay\n486.8\n503.1\n989.91\n-16.2\nJun\n502.5\n622.2\n-119.7\n-55.6\nJul\n629.9\n667.6\n-37.7\n-37.7\nAug\n597.3\n630.2\n-32.9\n-32.9\nSep\n514.4\n666.7\n-152.2\n-152.3\nOct\n535.5\n713.6\n-178.1\n-178.1\nNov\n647.6\n684.3\n-36.7\n-36.7\nDec\n591.2\n771.2\n-179.9\n-180.0\n2022\nJan\n543.9\n633.2\n-88.1\n-89.3\nFeb\n438.0\n630.1\n1068.1\n-192.2\nMar\n557.6\n713.8\n1271.4\n-156.2\nApr\n587.3\n637.2\n1224.5\n-49.9\nMay\n513.1\n714.4\n1227.6\n-201.3\nJun\n541.0\n751.4\n1292.3\n-210.4\nJul\n548.4\n728.2\n1276.6\n-179.9\nAug\n493.6\n759.9\n1253.4\n-266.3\nSep\n552.3\n765.3\n1317.6\n-213.1\nOct\n502.3\n770.5\n1272.8\n-268.2\nNov\n674.6\n802.2\n1476.8\n-127.5\nDec\n633.5\n772.6\n1406.1\n-139.1\n2023\nJan\n427.8\n633.8\n1061.6\n-206.0\nFeb\n435.9\n623.5\n1059.3\n-187.6\nMar\n515.3\n746.4\n1261.7\n-231.1\nApr\n555.5\n708.6\n1264.1\n-153.0\nMay\n654.2\n850.3\n1504.6\n-196.1\nJun\n641.5\n727.4\n1368.9\n-85.9\nJul\n603.2\n782.9\n1386.2\n-179.7\nAug\n649.8\n820.2\n1470.1\n-170.4\nSep\n678.1\n772.7\n1450.8\n-94.6\nOct\n831.9\n901.5\n1733.4\n-69.6\nNov\n681.4\n827.3\n1508.7\n-145.9\nDec\n550.6\n819.4\n1370.0\n-268.7\n0.0\n2024\nJan\n540.3\n692.7\n1233.0\n-152.4\nSource: ZIMSTAT, 2024\nTABLE 13 : MERCHANDISE TRADE STATISTICS\n (US$ millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monthly_Economic_Reviews/Monthly_Economic_Review_January_2024.pdf"}
{"doc_id": "ed0a3e2733630985826e7b8c782de972", "text": "Vol. 27 No. 13 \n \n \nWeek Ending \n28th March 2025 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 1 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n 1 \n1. OVERVIEW \n \n \n \nThis report provides an analysis of monetary and financial developments for the week ending 28th March 2025. \nIt includes updates on domestic money and capital markets, national payment systems, exchange rates and \ninternational commodity prices. \nDuring the week under review, local and foreign currency deposit rates remained unchanged except for \nmaximum local currency deposit rates of over 1 year tenor, which decreased. Minimum local currency lending \nrates for both individual and corporate clients decreased, while the maximum lending rates increased during \nthe same week. Minimum and maximum foreign currency lending rates increased, during the review period. \nThe Zimbabwe Stock Exchange (ZSE) exhibited bearish sentiments for the second consecutive week, with the \nZSE All Share Index shedding 1.67% to close at 204.11 points. In contrast, the Victoria Falls Stock Exchange \n(VFEX) traded positively. As a result, the VFEX All Share index gained 4.33% to close at 108.40 points, \nrespectively. \nThe value of aggregate transactions processed through the National Payment Systems (NPS) platforms \nincreased by 25.48% from ZiG31.73 billion in the previous week to ZiG39.82 billion, during the week under \nanalysis. The surge in NPS transactions was caused by an increase in values processed through RTGS, POS, \nATM, mobile banking and ZIPIT mobile payment streams. \nOn the interbank market, the Zimbabwe Gold (ZiG) depreciated by 0.2%, from an average of ZiG26.69 per \nUS$1 in the previous week to ZiG26.73 per US$1, during the week under review. \nInternational weekly average prices for gold, crude oil and lithium rose, while platinum, palladium and nickel \nprices fell during the week ending 28th March 2025. Gold prices increased by 0.51%, largely driven by safe \nhaven demand for the metal, as investors sought safety amid rising global trade tensions. Similarly, lithium \nprices rose by 0.36% underpinned by increased demand for the metal. Brent crude oil prices increased, \nfollowing a decline in U.S crude inventories, which signalled a potential near-term supply shortage. \nPlatinum prices declined, attributable to weakening demand for the metal. Similarly, palladium prices \nretreated on concerns over excess supply of the metal coupled with slackening demand. Nickel prices \ncontinued a downward trajectory, attributable to an oversupplied market. \nA total of 33.42 million kilograms of tobacco had been sold as of the 18th day of the tobacco selling season, \nmarking a 24.31% decline from the 44.15 million kilograms sold during the same period in 2024. In value \nterms, tobacco sales decreased by 25.36%, from US$154.54 million in the comparable period in 2024 to \nUS$115.34 million, during the period under review. \n \n \n \n \n \n 2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG)) (%) \nZiG Deposit rates \n07 March 2025 \n14 March 2025 \n21 March 2025 \n28 March 2025 \nSavings \n \n \n \n \nMinimum \n3.81 \n3.81 \n3.81 \n3.81 \nMaximum \n4.14 \n4.14 \n4.14 \n4.14 \n1-month deposit \n \n \n \n \nMinimum \n5.66 \n5.66 \n5.66 \n5.66 \nMaximum \n8.44 \n8.44 \n8.66 \n8.66 \n3-months deposit \n \n \n \n \nMinimum \n5.95 \n5.95 \n5.95 \n5.95 \nMaximum \n8.87 \n8.87 \n8.87 \n8.87 \n6-months deposit \n \n \n \n \nMinimum \n5.56 \n5.56 \n5.56 \n5.56 \nMaximum \n7.76 \n7.76 \n7.76 \n7.76 \n12-months deposit \n \n \n \n \nMinimum \n5.57 \n5.57 \n5.57 \n5.57 \nMaximum \n7.77 \n7.77 \n7.77 \n7.77 \nOver 1 year \n \n \n \n \nMinimum \n5.58 \n5.58 \n5.58 \n5.58 \nMaximum \n8.19 \n8.19 \n8.19 \n7.78 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$)) (%) \nUS$ Deposit rates \n07 March 2025 \n14 March 2025 \n21 March 2025 \n28 March 2025 \nSavings \n \n \n \n \nMinimum \n1.69 \n1.67 \n1.67 \n1.67 \nMaximum \n1.72 \n1.86 \n1.86 \n1.86 \n1-month deposit \n \n \n \n \nMinimum \n3.50 \n3.50 \n3.72 \n3.72 \nMaximum \n5.22 \n5.22 \n5.72 \n5.72 \n3-month deposit \n \n \n \n \nMinimum \n4.16 \n4.16 \n4.38 \n4.38 \nMaximum \n6.09 \n6.09 \n6.53 \n6.53 \n6-month deposit \n \n \n \n \nMinimum \n3.95 \n3.95 \n4.18 \n4.18 \nMaximum \n6.26 \n6.26 \n6.71 \n6.71 \n12-Month deposit \n \n \n \n \nMinimum \n4.03 \n4.03 \n4.25 \n4.25 \nMaximum \n6.44 \n6.44 \n6.53 \n6.53 \nOver 1 year \n \n \n \n \nMinimum \n4.14 \n4.14 \n4.36 \n4.36 \nMaximum \n6.53 \n6.53 \n6.31 \n6.31 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n 3 \nCommercial bank weighted lending rates (Local Currency (ZiG)) (%) \nZiG Lending rates \n07 March 2025 \n14 March 2025 \n21 March 2025 \n28 March 2025 \nIndividuals \n \n \n \n \nMinimum \n42.42 \n42.39 \n42.34 \n42.33 \nMaximum \n47.99 \n47.99 \n47.95 \n47.97 \nCorporates \n \n \n \n \nMinimum \n40.42 \n40.45 \n40.45 \n40.42 \nMaximum \n45.74 \n46.20 \n46.03 \n46.11 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$)) (%) \nUS$ Lending rates \n07 March 2025 \n14 March 2025 \n21 March 2025 \n28 March 2025 \nIndividuals \n \n \n \n \nMinimum \n12.90 \n12.90 \n12.90 \n12.91 \nMaximum \n17.39 \n17.39 \n17.37 \n17.38 \nCorporates \n \n \n \n \nMinimum \n10.86 \n10.91 \n10.93 \n10.99 \nMaximum \n16.01 \n16.06 \n16.07 \n16.12 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending rates \n07 March 2025 \n14 March 2025 \n21 March 2025 \n28 March 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n20.00 \n20.00 \n20.00 \n25.00 \nMaximum \n30.00 \n30.00 \n30.00 \n45.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n22.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n3. EQUITY MARKETS \n \n \nZSE Indicators \n \n \nAll \nShare \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG \nbillion) \nMarket \nTurnover \n(ZiG \nmillion) \nVolume of \nShares \n(million) \n07-Mar-25 \n206.66 \n207.31 \n208.71 \n228.06 \n100.11 \n185.41 \n63.35 \n56.79 \n15.26 \n14-Mar-25 \n210.99 \n211.63 \n213.11 \n232.60 \n100.11 \n184.97 \n65.17 \n30.41 \n19.41 \n21-Mar-25 \n207.57 \n205.53 \n208.39 \n239.22 \n100.11 \n180.43 \n64.16 \n51.94 \n46.03 \n28-Mar-25 \n204.11 \n199.43 \n203.75 \n245.34 \n100.11 \n180.43 \n62.64 \n84.23 \n10.99 \nWeekly \nChange (%) \n(1.67) \n(2.97) \n(2.23) \n2.56 \n0.00 \n0.00 \n(2.37) \n62.17 \n(76.12) \nSource: Zimbabwe Stock Exchange, 2025 \n \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover \n(US$ million) \nVolume of Shares \n(million) \n07-Mar-25 \n108.29 \n1.21 \n0.75 \n10.67 \n14-Mar-25 \n103.87 \n1.21 \n0.47 \n5.57 \n21-Mar-25 \n103.90 \n1.21 \n0.60 \n2.87 \n28-Mar-25 \n108.40 \n1.26 \n0.62 \n6.81 \nWeekly Change (%) \n4.33 \n4.13 \n3.33 \n137.28 \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n 4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n \n140\n160\n180\n200\n220\n240\n260\n280\n300\n320\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\nIndices\nZSE Indices \n40\n50\n60\n70\n80\n90\n100\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\nZiG Billion\nZSE Market Capitalisation \n10\n5010\n10010\n15010\n20010\n25010\n30010\n35010\n40010\n45010\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\nUS$ Thousand\nVFEX Market Turnover \nTrade\ndeal:\nFirst\nCapital\nBank\nLimited\n(1,134.27\nmillion\nshares\nsold\nat\n(US$0.04 cents per share)\n1.1\n1.15\n1.2\n1.25\n1.3\n1.35\n1.4\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\nUS$ Billion\nVFEX Market Capitalisation \n95\n100\n105\n110\n115\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\nIndex\nVFEX All Share Index \n0\n20,000\n40,000\n60,000\n80,000\n100,000\n120,000\n140,000\n160,000\n29-Nov-24\n06-Dec-24\n13-Dec-24\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\nZiG Thousands\nZSE Market Turnover \nLump-sum deals: Econet \nWireless Zimbabwe \nLimited, OK Zimbabwe \nLimited, Delta \nCorporation Limited\n \n 5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n07 March 2025 \n14 March 2025 \n21 March 2025 \n28 March 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.55 \n1.55 \n1.55 \n1.55 \nPetrol Blend E20/ litre \n1.54 \n1.54 \n1.54 \n1.54 \nLP Gas / kg \n1.61 \n1.61 \n1.61 \n1.61 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n70.07 \n69.35 \n 71.05 \n72.83 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \n \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n24-March -25 \n3,013.70 \n2.46 \n2.72 \n0.0920 \n0.1017 \n25-March -25 \n3,007.75 \n2.46 \n2.71 \n0.0919 \n0.1015 \n26-March -25 \n3,025.20 \n2.47 \n2.73 \n0.0924 \n0.1021 \n27-March -25 \n3,013.25 \n2.46 \n2.72 \n0.0920 \n0.1017 \n28-March -25 \n3,056.55 \n2.50 \n2.76 \n0.0934 \n0.1032 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n21 March 2025 \nWEEK ENDING \n28 March 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n26,281,709,678.29 \n32,122,437,270.14 \n22.22 \nOf which ZiG \n9,864,235,912.96 \n10,395,000,395.30 \n \nOf which US$ transactions \n(ZiG Equivalent) \n16,417,473,765.33 \n \n21,727,436,874.84 \n \nPOS \n1,596,263,589.08 \n2,883,645,032.98 \n80.65 \nATM \n996,632,751.07 \n2,035,457,832.11 \n104.23 \nMOBILE BANKING \n67,314,117.73 \n176,105,641.37 \n161.62 \nMOBILE MONEY \n2,602,693,953.24 \n2,388,381,666.01 \n(8.23) \nZIPIT MOBILE \n186,711,805.84 \n211,458,611.54 \n13.25 \nTOTAL \n31,731,325,895.25 \n39,817,486,054.15 \n25.48 \n \nVOLUMES \n \nRTGS \n170,421 \n313,953 \n84.22 \nOf which ZiG \n71,444 \n135,830 \n \nOf which US$ \n98,977 \n178,123 \n \nPOS \n1,469,311 \n2,218,833 \n51.01 \nATM \n126,508 \n281,480 \n122.50 \nMOBILE BANKING \n155,851 \n294,237 \n88.79 \nMOBILE MONEY \n10,206,436 \n9,726,963 \n(4.70) \nZIPIT MOBILE \n189,185 \n298,977 \n58.03 \nTOTAL \n12,317,712 \n13,134,443 \n6.63 \n \n 6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n24-March -25 \n25-March -25 \n26-March -25 \n27-March -25 \n28-March -25 \n1.00Oz \n \n \n \n \n \nUS$ \n3,164.39 \n3,158.14 \n3,176.46 \n3,163.91 \n3,209.38 \nZiG \n84,552.37 \n84,410.38 \n84,909.00 \n84,606.82 \n85,837.69 \n0.50Oz \n \n \n \n \n \nUS$ \n1,582.19 \n1,579.07 \n1,588.23 \n1,581.96 \n1,604.69 \nZiG \n42,276.18 \n42,205.19 \n42,454.50 \n42,303.41 \n42,918.84 \n0.25Oz \n \n \n \n \n \nUS$ \n791.10 \n789.53 \n794.12 \n790.98 \n802.34 \nZiG \n21,138.09 \n21,102.60 \n21,227.25 \n21,151.70 \n21,459.42 \n0.10Oz \n \n \n \n \n \nUS$ \n316.64 \n315.81 \n317.65 \n316.39 \n320.94 \nZiG \n8,455.24 \n8,441.04 \n8,490.90 \n8,460.68 \n8,583.77 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(17 Mar -21 Mar) \n26.6928 \n1.4713 \n33.0374 \n1.9610 \n29.0615 \n24-Mar \n26.7200 \n1.4656 \n34.517 \n1.9615 \n28.9257 \n25-Mar \n26.7279 \n1.4652 \n34.5526 \n1.9634 \n28.8835 \n26-Mar \n26.7307 \n1.4607 \n34.5683 \n1.9609 \n28.8211 \n27-Mar \n26.7412 \n1.4678 \n34.5551 \n1.9563 \n28.8244 \n28-Mar \n26.7459 \n1.4618 \n34.6067 \n1.9567 \n28.8522 \nWeekly Average \n(24 Mar -28 Mar) \n26.7331 \n1.4642 \n34.5599 \n1.9598 \n28.8614 \nAppr (-)/Depr (+) (%) of the \nZWG \n0.2 \n(0.5) \n4.6 \n(0.1) \n(0.7) \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(17Mar–21 Mar) \n3,021.11 \n992.60 \n962.40 \n16,283.80 \n9,400.95 \n \n24-Mar \n3,019.00 \n976.00 \n959.00 \n15,884.98 \n9,423.81 \n25-Mar \n3,023.47 \n976.23 \n948.65 \n16,110.00 \n9,423.81 \n26-Mar \n3,017.55 \n975.50 \n960.00 \n16,245.00 \n9,423.81 \n27-Mar \n3,052.82 \n973.50 \n954.10 \n16,247.00 \n9,452.38 \n28-Mar \n3,070.50 \n987.00 \n980.50 \n16,380.00 \n9,452.38 \nWeekly Average \n(24 Mar -28 Mar) \n3,036.67 \n977.65 \n960.45 \n16,173.40 \n9,435.24 \nWeekly change (%) \n0.51 \n(1.51) \n(0.20) \n(0.68) \n0.36 \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n \n \n \n 7 \nFigure 3: Weekly International Commodity Price Developments (17th January 2025– 28th March 2025) \n \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n2,500\n2,550\n2,600\n2,650\n2,700\n2,750\n2,800\n2,850\n2,900\n2,950\n3,000\n3,050\n3,100\n17-Jan\n24-Jan\n31-Jan\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\nUS$/oz\nGold\n50\n55\n60\n65\n70\n75\n80\n85\n90\n17-Jan\n24-Jan\n31-Jan\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\nUS$/barrel\nCrude oil \n820\n840\n860\n880\n900\n920\n940\n960\n980\n1,000\n1,020\n17-Jan\n24-Jan\n31-Jan\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\nUS$/tonne\nPlatinum\n15,000\n15,200\n15,400\n15,600\n15,800\n16,000\n16,200\n16,400\n16,600\n16,800\n17-Jan\n24-Jan\n31-Jan\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\nUS$/tonne\nNickel\n8,600\n8,800\n9,000\n9,200\n9,400\n9,600\n9,800\n10,000\n10,200\n10,400\n10,600\n10,800\n17-Jan\n24-Jan\n31-Jan\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\nUS$/tonne\nLithium \n900\n910\n920\n930\n940\n950\n960\n970\n980\n990\n1,000\n1,010\n1,020\n17-Jan\n24-Jan\n31-Jan\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\nUS$/tonne\nPalladium\n \n 8 \n8. TOBACCO SALES \n \nWeekly Cumulative Tobacco Sales: Day 18 (28th March 2025) \n \n2024 \n2025 \nVariance (%) \nCumulative Quantity Sold (million kgs) \n44,154,373 \n33,422,645 \n(24.31) \nAverage Price (US$/kg) \n3.50 \n3.45 \n(1.40) \nCumulative value (US$ million) \n154,542,653 \n115,344,577 \n(25.36) \nSource: Tobacco Industry and Marketing Board (TIMB), 2025 \n \n \n \nRESERVE BANK OF ZIMBABWE \nMARCH 2025", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_28_March_2025_Volume_27_Number_13.pdf"}
{"doc_id": "e0839328859289a3ef3615540551f901", "text": "Vol. 26 No. 20 \n \n \nWeek Ending \n17th May 2024 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nPRICES .................................................................................... 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n8. \nTOBACCO SALES ................................................................. 7 \n \n \n \n 1 \n1. OVERVIEW \n \n \nDuring the week ending 17th May 2024, minimum and maximum local currency deposit rates for all \ntenors increased except for 12-month maximum deposit rates. On the other hand, the local currency \nlending rates for both individual and corporate clients declined. Minimum foreign currency deposit \nrates for 3 months, 6 months, 1 year, and over 1-year tenors decreased during the week under review \nwhile foreign currency lending rates for all tenors increased. \nThe Zimbabwe Stock Exchange (ZSE) All share index increased by 0.68% to close at 94.65 points \nduring the week under review. In tandem, cumulative value of shares traded increased by 82.95% to \nclose at ZiG 32.63 million from ZiG 24.74 million in the previous week. The Victoria Falls Stock \nExchange (VFEX) also continued a positive trajectory during the week under review. The VFEX All \nshare index increased from 99.15 points last week to close at 100.12 points. \nThe aggregate transactions processed in value terms through the National Payment Systems \nplatforms increased by 16.95% to close at ZiG17.41 billion during the week under analysis. The Real \nTime Gross Settlement (RTGS) system constituted 84.10% of the value of transactions. \nThe interbank exchange rate appreciated by 1% from ZiG13.4823 per US$1 at the beginning of the \nweek to ZiG13.3976 per US$1 at the end of the week, in line with the increase in the price of gold. \nAverage international commodity prices for gold, platinum, palladium, copper, crude oil, and nickel \nincreased during the week ending 17th May 2024. However, lithium prices declined during the same \nweek. Gold prices increased during the week on account of U.S. inflation data, which stoked investor \nexpectations. Similarly, platinum and palladium prices firmed driven by increased demand for the \nmetals. Nickel prices were boosted by funds inflow and supply disruptions worries in New Caledonia, \na French Pacific Territory. Crude oil prices rose on account of recent declines in US crude oil \ninventories. \nA cumulative total of 138 million kilograms of tobacco had been sold as at 17th of May 2024, a \n26.07% decrease from 187 million kilograms sold during the same period in 2023. The golden leaf \nwas sold at an average price of US$3.54 per kilogram, up from US$3.00 per kilogram realised in the \nsame period last year. \n \n \n \n \n \n \n \n \n 2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG)) \nZiG Deposit rates \n 26 April 2024 \n 3 May 2024 \n 10 May 2024 \n17 May 2024 \nSavings \n \n \n \n \nMinimum \n5.22 \n5.22 \n3.41 \n3.72 \nMaximum \n5.34 \n7.83 \n4.13 \n4.09 \n1-month deposit \n \n \n \n \nMinimum \n5.42 \n5.42 \n5.14 \n5.19 \nMaximum \n5.82 \n7.76 \n5.63 \n5.68 \n3-month deposit \n \n \n \n \nMinimum \n5.51 \n5.51 \n5.23 \n5.24 \nMaximum \n6.04 \n8.51 \n5.81 \n5.82 \n6-month deposit \n \n \n \n \nMinimum \n5.61 \n5.61 \n5.30 \n5.31 \nMaximum \n6.15 \n9.05 \n5.92 \n5.93 \n12-Month deposit \n \n \n \n \nMinimum \n5.65 \n5.65 \n5.34 \n5.33 \nMaximum \n6.17 \n9.09 \n6.02 \n6.01 \nOver 1 year \n \n \n \n \nMinimum \n5.65 \n5.65 \n5.34 \n5.34 \nMaximum \n6.22 \n9.26 \n6.06 \n6.06 \nSource: Reserve Bank of Zimbabwe, 2024 \n \nAverage commercial bank deposit rates (Foreign Currency (US$) \nUS$ Deposit rates \n 26 April 2024 \n 3 May 2024 \n 10 May 2024 \n17 May 2024 \nSavings \n \n \n \n \nMinimum \n1.23 \n1.23 \n1.40 \n1.40 \nMaximum \n1.68 \n1.68 \n1.73 \n1.73 \n1-month deposit \n \n \n \n \nMinimum \n3.28 \n3.25 \n3.19 \n3.28 \nMaximum \n4.68 \n4.68 \n4.85 \n4.99 \n3-month deposit \n \n \n \n \nMinimum \n3.69 \n3.69 \n3.77 \n3.63 \nMaximum \n5.21 \n5.21 \n5.64 \n5.28 \n6-month deposit \n \n \n \n \nMinimum \n3.81 \n3.81 \n3.88 \n3.73 \nMaximum \n5.68 \n5.68 \n6.12 \n5.73 \n12-Month deposit \n \n \n \n \nMinimum \n4.00 \n3.97 \n4.03 \n3.88 \nMaximum \n5.92 \n5.95 \n6.38 \n6.38 \nOver 1 year \n \n \n \n \nMinimum \n4.18 \n4.18 \n4.23 \n4.08 \nMaximum \n5.92 \n5.92 \n6.35 \n6.35 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n \n \n \n \n 3 \nCommercial bank weighted lending rates (Local Currency (ZiG) \nZiG Lending rates \n 26 April 2024 \n 3 May 2024 \n 10 May 2024 \n17 May 2024 \nIndividuals \n \n \n \n \nMinimum \n25.91 \n26.00 \n26.37 \n26.35 \nMaximum \n32.10 \n32.00 \n32.06 \n31.96 \nCorporates \n \n \n \n \nMinimum \n24.29 \n24.32 \n24.46 \n24.39 \nMaximum \n32.52 \n32.72 \n32.82 \n32.40 \nSource: Reserve Bank of Zimbabwe, 2024 \n \nCommercial bank weighted lending rates (Foreign Currency (US$) \nUS$ Lending rates \n 26 April 2024 \n 3 May 2024 \n 10 May 2024 \n17 May 2024 \nIndividuals \n \n \n \n \nMinimum \n10.35 \n10.38 \n10.40 \n10.41 \nMaximum \n14.58 \n14.59 \n14.61 \n15.05 \nCorporates \n \n \n \n \nMinimum \n8.37 \n8.39 \n8.43 \n8.79 \nMaximum \n14.77 \n14.77 \n14.87 \n15.13 \nSource: Reserve Bank of Zimbabwe, 2024 \n \nCommercial banks and building societies mortgage lending rates \nMortgage Lending rates \n 26 April 2024 \n 3 May 2024 \n10 May 2024 \n17 May 2024 \nZiG Lending rates \n \n \n \n \nMinimum \n20.00 \n20.00 \n20.00 \n20.00 \nMaximum \n30.00 \n30.00 \n30.00 \n30.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n3. EQUITY MARKETS \n \n \nZSE Indicators \n \n \nAll \nShare \nIndex \n(points) \n \nTop 10 \nindex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket \nCap (ZiG \nbillion) \nMarket \nTurnover \n(ZiG \nmillion) \nVolume of \nShares \n(million) \n26-April-24 \n99.03 \n96.98 \n98.17 \n104.23 \n100.00 \n100.04 \n28.63 \n11.99 \n9.62 \n3-May-24 \n98.29 \n96.63 \n97.63 \n102.85 \n100.00 \n114.07 \n28.34 \n6.98 \n4.49 \n10-May-24 \n94.01 \n91.78 \n92.92 \n95.88 \n100.00 \n114.70 \n26.90 \n24.74 \n17.07 \n17-May-24 \n94.65 \n92.76 \n93.58 \n97.63 \n100.00 \n114.07 \n27.05 \n32.63 \n31.23 \nWeekly \nChange (%) \n0.68 \n1.12 \n0.71 \n1.83 \n0.00 \n-0.55 \n-5.08 \n0.56 \n82.95 \nSource: Zimbabwe Stock Exchange, 2024 \n \n \n \n \nVFEX Indicators \nDate \nAll Share Index \nPoints \nGrand Market \nCapitalisation \n(US$ billion) \nMarket Turnover \n(US$ million) \nVolume of Shares (million) \n26-April-24 \n97.49 \n1.18 \n0.58 \n4.59 \n3-May-24 \n99.15 \n1.20 \n0.52 \n0.16 \n10-May-24 \n99.51 \n1.20 \n0.32 \n7.08 \n17-May-24 \n100.12 \n1.21 \n0.82 \n3.53 \nWeekly Change (%) \n0.61 \n0.61 \n158.73 \n-50.20 \nSource: Victoria Falls Stock Exchange, 2024 \n \n 4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2024 \n \n \n \n \n \n \n \n \n \n \n90\n95\n100\n105\n110\n115\n120\n27-Apr-24\n28-Apr-24\n29-Apr-24\n30-Apr-24\n01-May-24\n02-May-24\n03-May-24\n04-May-24\n05-May-24\n06-May-24\n07-May-24\n08-May-24\n09-May-24\n10-May-24\n11-May-24\n12-May-24\n13-May-24\n14-May-24\n15-May-24\n16-May-24\n17-May-24\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n0\n2,000\n4,000\n6,000\n8,000\n10,000\n12,000\n27-Apr-24\n28-Apr-24\n29-Apr-24\n30-Apr-24\n01-May-24\n02-May-24\n03-May-24\n04-May-24\n05-May-24\n06-May-24\n07-May-24\n08-May-24\n09-May-24\n10-May-24\n11-May-24\n12-May-24\n13-May-24\n14-May-24\n15-May-24\n16-May-24\n17-May-24\nZiG Thousand\nZSE Market Turnover \n25\n30\n35\n27-Apr-24\n28-Apr-24\n29-Apr-24\n30-Apr-24\n01-May-24\n02-May-24\n03-May-24\n04-May-24\n05-May-24\n06-May-24\n07-May-24\n08-May-24\n09-May-24\n10-May-24\n11-May-24\n12-May-24\n13-May-24\n14-May-24\n15-May-24\n16-May-24\n17-May-24\nZiG Billion\nZSE Market Capitalisation \n0\n20\n40\n60\n80\n100\n120\n09-Feb-24\n16-Feb-24\n23-Feb-24\n01-Mar-24\n08-Mar-24\n15-Mar-24\n22-Mar-24\n29-Mar-24\n05-Apr-24\n12-Apr-24\n19-Apr-24\n26-Apr-24\n03-May-24\n10-May-24\n17-May-24\nIndex\nVFEX All Share Index \n0.8\n0.9\n1\n1.1\n1.2\n1.3\n1.4\n1.5\n1.6\n09-Feb-24\n16-Feb-24\n23-Feb-24\n01-Mar-24\n08-Mar-24\n15-Mar-24\n22-Mar-24\n29-Mar-24\n05-Apr-24\n12-Apr-24\n19-Apr-24\n26-Apr-24\n03-May-24\n10-May-24\n17-May-24\nUS$ Billion\nVFEX Market Capitalisation \n0\n200\n400\n600\n800\n23-Feb-24\n01-Mar-24\n08-Mar-24\n15-Mar-24\n22-Mar-24\n29-Mar-24\n05-Apr-24\n12-Apr-24\n19-Apr-24\n26-Apr-24\n03-May-24\n10-May-24\n17-May-24\nUS$ Thousand\nVFEX Market Turnover \n \n 5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2024 \n \n5. PRICES \n \nEnergy Prices \n \n26 April 2024 \n3 May 2024 \n10 May 2024 \n17 May 2024 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.68 \n1.68 \n1.66 \n1.66 \nPetrol Blend E20/ litre \n1.69 \n1.69 \n1.58 \n1.58 \nLP Gas / kg \n1.87 \n1.87 \n1.86 \n1.86 \n \n \n \n \n \nInternational Energy Prices \n(Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n88.20 \n84.75 \n83.41 \n83.49 \nSource: Zimbabwe Energy Regulatory Authority and BBC 2024 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED \nDIGITAL TOKENS (GBDT) \n \n \nGold PM Fix and Gold Backed Digital Token Prices \nWeek Ending \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n13-May-24 \n2343.80 \n0.98 \n1.08 \n0.0725 \n0.0801 \n14-May-24 \n2354.85 \n0.96 \n1.06 \n0.0716 \n0.0791 \n15-May-24 \n2357.50 \n0.96 \n1.07 \n0.0719 \n0.0795 \n16-May-24 \n2377.40 \n0.96 \n1.07 \n0.0720 \n0.0796 \n17-May-24 \n2402.60 \n0.97 \n1.08 \n0.0726 \n0.0803 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2024 \n \n \n \nPAYMENT \nSTREAM \nWEEK ENDING \n10 May 2024 \nWEEK ENDING \n17 May 2024 \nWEEKLY \nCHANGE (%) \n \nVALUES IN ZiG \n \nRTGS \n11,055,051,315.31 \n14,642,036,659.52 \n32.45% \nOf which ZiG \n4,391,063,844.45 \n 5,120,007,371.70 \n \nOf which US$ \n488,517,636.08 \n709,192,006.56 \n \nPOS \n1,024,214,000.15 \n604,911,248.26 \n-40.94% \nATM \n1,066,198,880.31 \n640,190,634.07 \n-39.96% \nMOBILE BANKING \n69,881,930.79 \n50,743,936.33 \n-27.39% \nMOBILE MONEY \n1,564,941,976.68 \n1,401,140,560.18 \n-10.47% \nZIPIT MOBILE \n106,975,557.73 \n70,905,168.69 \n-33.72% \nTOTAL \n14,887,263,660.97 \n17,409,928,207.05 \n16.95% \n \nVOLUMES \n \nRTGS \n211,311 \n176,792 \n-16.34% \nOf which ZiG \n91,877 \n83,339 \n \nOf which US$ \n119,434 \n93,453 \n \nPOS \n2,316,595 \n1,354,215 \n-41.54% \nATM \n262,216 \n155,567 \n -40.67% \nMOBILE BANKING \n419,022 \n294,694 \n-29.67% \nMOBILE MONEY \n9,044,736 \n8,272,830 \n-8.53% \nZIPIT MOBILE \n296,152 \n205,820 \n-30.50% \nTOTAL \n12,550,032 \n10,459,918 \n-16.65% \n \n 6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin Price \n13 May 2024 \n14 May 2024 \n15 May 2024 \n16 May 2024 \n17 May 2024 \n1.00Oz \n \n \n \n \n \nUS$ \n2,491.07 \n2,460.99 \n2,403.29 \n2,475.38 \n2,496.27 \nZiG \n33,585.39 \n32,008.27 \n32,493.82 \n33,729.66 \n33,444.03 \n0.50Oz \n \n \n \n \n \nUS$ \n1,245.54 \n1,230.50 \n1,201.65 \n1,237.69 \n1,248.14 \nZiG \n16,792.69 \n16,504.14 \n16,246.91 \n16,586.87 \n16,722.01 \n0.25Oz \n \n \n \n \n \nUS$ \n622.77 \n604.37 \n615.25 \n618.84 \n624.07 \nZiG \n8,396.35 \n8,252.07 \n8,123.45 \n8,293.43 \n8,361.01 \n0.10Oz \n \n \n \n \n \nUS$ \n249.11 \n241.75 \n245.17 \n274.54 \n249.63 \nZiG \n3,358.54 \n3,300.83 \n3,249.38 \n3,317.37 \n3,344.40 \nSource: Reserve Bank of Zimbabwe, 2024 \n \n7. EXTERNAL SECTOR \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \nUSD \nZAR \nGBP \nBWP \nEURO \n13-May \n13.4823 \n1.3667 \n16.8866 \n0.9916 \n14.5218 \n14-May \n13.4126 \n1.3698 \n16.8415 \n0.9885 \n14.4668 \n15-May \n13.4097 \n1.3702 \n16.8869 \n0.9856 \n14.5127 \n16-May \n13.4015 \n1.3641 \n17.0005 \n0.9884 \n14.5849 \n17-May \n13.3976 \n1.3595 \n16.9587 \n0.9928 \n14.5471 \nWeekly Average \n(13– 17May) \n13.42 \n1.37 \n16.91 \n0.99 \n14.53 \nSource: Reserve Bank of Zimbabwe, 2024 \n \nInternational Commodity Price Developments \n \nPlatinum \nPalladium \nNickel \nLithium \n2024 \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n (6-10 May) \n974.00 \n968.20 \n19,098.20 \n14,350.00 \n13-May \n1002.00 \n983.00 \n19230.00 \n14350.00 \n14-May \n1010.00 \n971.50 \n19075.00 \n14350.00 \n15-May \n1048.00 \n1006.00 \n19489.00 \n14330.00 \n16-May \n1064.00 \n1008.50 \n19797.00 \n14310.00 \n17-May \n1061.50 \n986.00 \n21080.00 \n14290.00 \nWeekly Average \n (13-17 May) \n1037.10 \n991.00 \n19,734.20 \n14,326.00 \nSource: BBC, KITCO and Bloomberg, 2024 \n \n \n \n \n \n \n \n \n \n \n \n \n 7 \nFigure 3: Weekly Precious Metals Price Developments (13th – 17th May 2024) \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2024 \n \n8. TOBACCO SALES \n \nWeekly Cumulative Tobacco Sales (17th May 2024) \n \n2023 \n2024 \nVariance (%) \nCumulative Quantity Sold (million kgs) \n186,830,365 \n138,124,417 \n-26.07 \nAverage Price (US$/kg) \n3.00 \n3.54 \n17.99 \nCumulative Value (US$ million) \n560,472,380 \n488,896,348 \n-12.77 \nSource: Tobacco Industry and Marketing Board, 2024 \n990\n1,010\n1,030\n1,050\n1,070\n13-May 14-May 15-May 16-May 17-May\nUS$/tonne\nPlatinum\n900\n950\n1,000\n1,050\n13-May 14-May 15-May 16-May 17-May\nUS$/tonne\nPalladium\n18,500\n19,050\n19,600\n20,150\n20,700\n21,250\n13-May\n14-May\n15-May\n16-May\n17-May\nUS$/tonne\nNickel\n14,100\n14,200\n14,300\n14,400\n14,500\n13-May\n14-May\n15-May\n16-May\n17-May\nUS$/tonne\nLithium", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_17_MAY_2024_Volume_26_Number_20.pdf"}
{"doc_id": "8b273a5ab13e54257ea9a5e8ea650e20", "text": "i \n \n \n \n \n \n \n \nDECEMBER 2017 \n \n1 \n \nTABLE OF CONTENTS \n \nSelected Economic Indicators ...................................................................................................... 2 \nInternational Commodity Prices ................................................................................................. 3 \nMerchandise Trade Developments .............................................................................................. 4 \nMonetary Developments ............................................................................................................... 6 \nStock Market Developments ........................................................................................................ 7 \nInflation Outturn .......................................................................................................................... 8 \nNational Payments System Developments .................................................................................. 9 \n \n \n \n \n \n \n \n2 \n \n \n \n \n2017 \n \nNovember \n2017 \n \nDecember \nMonth-on- \nMonth \nChange (%) \nZ.S.E. Mining Index1 \n126.86 \n142.40 \n12.25 \nZ.S.E. Industrial Index1 \n376.69 \n333.02 \n11.59 \nNational Payment System Transactions \n(US$ millions) \n11 162.41 \n11 596.93 \n3.90 \nMoney Supply (US$ millions)2 \n8 020.03 \n8 106.22 \n1.07 \nMoney Supply (M3) Annual Growth2 (%) \n47.97 \n43.77 \n \nYearly Inflation3 (%) \n2.94 \n3.46 \n \nMonthly Inflation3 (%) \n0.74 \n0.53 \n \nNominal Lending Rate2 (% per annum) \n4.45-18.00 \n4.45-18.00 \n \nSources: \n1. Zimbabwe Stock Exchange (ZSE) \n2. Reserve Bank of Zimbabwe (RBZ) \n3. Zimbabwe National Statistics Agency (ZIMSTAT) \nSELECTED ECONOMIC INDICATORS \n \n \n \n3 \n \nINTERNATIONAL COMMODITY PRICE \nDEVELOPMENTS \n \nDuring \nthe \nmonth \nof \nDecember \n2017, \ninternational commodity prices of precious and \nbase metals were generally subdued, owing to \nweak investment demand. Crude oil prices, \nhowever, firmed following global supply \ndisruptions due to geopolitical tensions in the \nMiddle East. \n \n Precious Metals \n \nPrecious metal prices were weighed down by a \nstronger U.S dollar, as investors shifted their \nfocus to interest bearing assets, amid progress \non U.S tax overhauls. This followed interest rate \nhikes by the Federal Reserve effected in \nDecember 2017. Gold prices retreated by \n1.45%, from US$1,282.89/oz recorded in the \nprevious month to US$1,264.26/oz, during the \nmonth under review. Similarly, platinum prices \ndecreased by 2.67%, to US$909.08/oz in \nDecember \n2017 \nfrom \nUS$934.02/oz \nin \nNovember 2017. \n Figure 1: Precious metal prices \nSource: Bloomberg, 2017 \n \n \nBase Metals \nBase metal prices were generally depressed \nduring the month of December 2017, as the US \ninterest rate hike dampened their demand \nprospects. Rising global stockpiles and slowing \ndemand from China, the world’s largest \nconsumer of base metals, also exerted \ndownward pressure on the prices. Consequently, \ncopper and nickel monthly average prices \nslumped \nby \n0.51% \nand \n5.39% \nto \nUS$6,828.97/tonne and US$11,436.94/tonne, \nrespectively. \nFigure 2: Base metal prices \nSource: Bloomberg, 2017 \n Brent Crude Oil \nCrude oil prices maintained a positive \ntrajectory, registering a 1.67% increase to \nUS$63.85/barrel, during the month under \nreview. This was underpinned by fears of supply \ndisruptions, following news of a pipeline \nexplosion in Libya, which reduced oil \nproduction by 100 000 barrels a day. \n \n \n0\n450\n900\n1350\n1800\nDec-16\nJan-17\nFeb-17\nMar-17\nApr-17\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\nGold\nPlatinum\n0\n4000\n8000\n12000\n0\n2000\n4000\n6000\nDec-16\nFeb-17\nApr-17\nJun-17\nAug-17\nOct-17\nDec-17\nNICKEL US/TON\nCOPPER US$/TON\nCopper\nNickel\n \n \n \n4 \n \n Figure 3: International crude oil prices \nSource: Bloomberg, 2017 \nMONETARY DEVELOPMENTS1 \n \nBroad money supply2 stood at US$8 106.22 \nmillion in December 2017, registering an annual \ngrowth of 43.77%, from $5 638.28 million in \nDecember 2016. The growth was due to \nincreases in transferable deposits, 56.29%; and \nnegotiable certificates of deposits3, 9.13%. Time \ndeposits, however, declined by 4.75%. Bond \nnotes and coins in circulation increased from \n$70.17 million in December 2016, to $331.94 \nmillion in December 2017. \n \nOn a monthly basis, broad money increased by \n1.07%, from US$8 020.03 million in November \n2017 to US$8 106.22 in December 2017. \n \n \n1 Provisional figures \n2 Beginning January 2017, broad money is redefined using \nIMF’s Monetary and Financial Statistics Manual of 2000. The \n \nSource: Reserve Bank of Zimbabwe, 2017 \nBroad money comprised of transferable or \ntransitory deposits, 77.77%; time deposits, \n17.29%; currency in circulation, 4.09%; and \nnegotiable certificates of deposits, 0.85%, \nduring the month under review. \nmajor change is the exclusion of Government deposits held by \nbanks from broad money. \n3 NCDs are also referred to as securities included in broad \nmoney. \n40\n45\n50\n55\n60\n65\n70\nOct-16\nNov-16\nDec-16\nJan-17\nFeb-17\nMar-17\nApr-17\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\n-10\n0\n10\n20\n30\n40\n50\n60\n -\n 2.0\n 4.0\n 6.0\n 8.0\n 10.0\n%\nUS$ BILLIONS\nFigure 8: Money Supply\nM3\nM3 Annual Growth rate\n \n \n \n5 \n \nSource: Reserve Bank of Zimbabwe, 2017 \nBank lending to local economic agents recorded \na 43.07% increase, from $7 481.42 million in \nDecember 2016 to $10 703.45 million in \nDecember 2017. The growth was largely driven \nby a 73.91% expansion in net credit to \nGovernment. On a month-on-month basis, \ndomestic \ncredit \ngrew \nby \n2.32%, \nfrom \n$10 290.52 million in November 2017 to \n$10 703.45 in December 2017. \nCredit to the private sector increased by 5.83%, \nfrom $3 513.53 million in December 2016 to $3 \n718.33 million in December 2017. On a month-\non-month basis, credit to the private sector \nrecorded a modest growth of 0.67%, from $3 \n693.55 million in November 2017 to $3 718.33 \nin December 2017. \nSource: Reserve Bank of Zimbabwe, 2017 \nDuring the month under analysis, outstanding \ncredit to the private sector was distributed as \nfollows: \nhouseholds, 23.40%; \nagriculture, \n18.44%; \nservices, \n14.13%; \ndistribution, \n12.58%; manufacturing, 11.57%; financial \norganisations and investments, 10.97%; mining, \n4.77%; construction, 2.04%; transport; and \ncommunications, 1.57%. \nPrivate sector credit was utilised for inventory \nbuild-up, 28.1%; consumer durables, 19.1%; \nfixed capital investment, 9.7%; and pre and post \nshipment financing, 1.1%. Amounts channelled \ntowards other recurrent expenditures constituted \n39.1% of the total outstanding loans and \nadvances, during the month under review. \nSTOCK MARKET DEVELOPMENTS \nThe Zimbabwe Stock Exchange (ZSE) was \ncharacterized by bearish sentiments during the \nmonth of December 2017. Trading on the local \nbourse was dominated by low activity in some \nselected heavyweight counters, largely due to \ninvestor profit-taking and portfolio rebalancing, \nTransferable \nDeposits\n77.77%\nOther \nDeposits \n(Time)\n17.29%\nNCDs\n0.85%\nBond \nNotes and \nCoins\n4.09%\nFigure 9: Composition of \nMoney Supply November\n2017\nHouseholds\n23.4%\nAgriculture, \n18.4%\nManufacturing, \n11.6%\nServices, \n14.1%\nDistribution, \n12.6%\nFinancial \nOrganisati\nons, \n11.0%\nMining, \n4.8%\nTransport and \nCommunication, \n1.6%\nConstruction, \n2.0%\nOther, 0.5%\nFigure 10 : Sectoral Distribution of \nCredit\n \n \n \n6 \n \nahead of the impending new trading year. \nResultantly, the mainstream index declined by \n11.59%, to close the month under review at \n333.02 points. The resources index, however, \nregistered a 12.25% increase to close the year at \n142.40 points. \nSource: Zimbabwe Stock Exchange, 2017 \nShare trading volumes increased by 329.64% to \n844.2 million in December 2017, compared to \n196.5 million registered in November 2017. \nThis was largely due to notable block trades in \nNicoz Diamond, First Mutual Properties, OK \nZimbabwe and Meikles shares. The block share \ntrades were as follows; Nicoz Diamond \n(354.4 million); First Mutual Properties (111.1 \nmillion); OK Zimbabwe (40.2 million); and \nMeikles (2.25 million), which exchanged hands \nat 3.97 cents; 5.70 cents; 20 cents; and 28.01 \ncents, respectively. \nTurnover value, however, declined by 63.73%, \nfrom US$207.52 million realized in the previous \nmonth to US$75.27 million in December 2017. \nForeign portfolio investment improved in \nDecember 2017, with net inflows at US$4.93 \nmillion, compared to net outflows of US$19.76 \nmillion in November 2017. \nSource: Zimbabwe Stock Exchange, 2017 \nDevelopments on the local bourse, during the \nmonth under review, resulted in a US$1.20 \nbillion loss in capitalisation, to close at US$9.58 \nbillion. On a year-on year basis, however, the \nZSE capitalization increased by 139.04%. \n \nINFLATION OUTTURN \n \nAnnual Inflation \n \nThe annual headline inflation remained in the \nprojected levels, increasing by 0.49% to 3.46% \nin December 2017. This was occasioned by \nincreases in both food and non food items. \nAnnual food inflation increased from 5.65% in \nNovemebr 2017, to 6.60% in December 2017. \nNon-food inflation also rose, from 1.74% in \nNovember 2017 to 2.00% in December 2017. \n \n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\n550\n31-Dec-16\n31-Jan-17\n28-Feb-17\n31-Mar-17\n30-Apr-17\n31-May-17\n30-Jun-17\n31-Jul-17\n31-Aug-17\n30-Sep-17\n31-Oct-17\n30-Nov-17\n31-Dec-17\nFigure 11: ZSE Indices\nIndustrial\nMining\n0.00\n30.00\n60.00\n90.00\n120.00\n150.00\n180.00\n210.00\n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1,000\nDec-16\nJan-17\nFeb-17\nMar-17\nApr-17\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\nValues Traded (US$ Millions)\nVolumes Traded (Millions)\nFigure 2: ZSE Monthly Volumes \nand Values Traded\nVolume\nTurnover\n \n \n \n7 \n \nFigure 12 shows annual inflation developments. \n \nSource: ZIMSTAT, 2017 \nMonthly Inflation \n \nMonth-on-month inflation stood at 0.53% in \nDecember 2017, down from 0.7% in November \n2017. This was on the back of a slowdown in \nprices of both food and non-food categories. \n \n \nSource: ZIMSTAT, 2017 \nMonthly food inflation declined from 1.74% in \nNovember 2017 to 1.29% in December 2017. \nDeclines in prices of bread and cereals, \nvegetables, sugar, jam, and honey weighed \ndown food inflation. \nMonth-on-month \nnon-food \ninflation \nalso \ndeclined, from 0.26% in November 2017 to \n0.16% in December 2017. This was largely \ndriven by declines in housing, water, \nelectricity, gas and other fuels. \n \nNATIONAL PAYMENTS SYSTEM \n \nThe value of transactions processed through the \nNational Payment System (NPS) stood at \nUS$11.6 billion in December 2017, compared to \nUS$11.2 billion in November 2017. In volume \nterms, total NPS transactions registered an \nincrease of 19%, from 123.8 million in \nNovember 2017 to 148.1 million in December \n2017. \n \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe value of transactions processed through the \nRTGS system decreased by 6.1%, from \nUS$6.26 billion in November 2017 to US$5.88 \nbillion in December 2017. RTGS transaction \nvolumes, also registered a 9% decline to close \nthe month under review at 524 204 transactions. \nSource: Reserve Bank of Zimbabwe, 2017 \n \n-4.5\n-2.5\n-0.5\n1.5\n3.5\n5.5\nFigure 12: Annual Inflation \n(%)\nHeadline Inflation\nFood\nNon Food\n-0.5\n-0.3\n-0.1\n0.2\n0.4\n0.6\n0.8\n1.0\n1.2\n1.4\n1.6\nFigure 13: M-O-M Inflation\n -\n 1.0\n 2.0\n 3.0\n 4.0\n 5.0\n 6.0\n 7.0\n -\n 100\n 200\n 300\n 400\n 500\n 600\n 700\nVALUE IN US$ BILLIONS\nVOLUME IN THOUSANDS\nFigure 14: ZETSS Volumes and \nValues\nVolume\nValue\n \n \n \n8 \n \nCash transactions \nThe total value of cash transactions was higher \nat US$245.92 million in December 2017, \ncompared to US$209.07 million in November \n2017. \nMobile and Internet Based Transactions \nMobile and internet based transactions also \nincreased to US$ 4.1 billion in December 2017, \nfrom US$3.36 billion in November 2017. \n \n \nCard Based Transactions \nThe total value of card based transactions stood \nat US$ 794.74 million during the month under \nreview, up from US$690.13 million recorded in \nNovember 2017. \nCheque Transactions \nDuring the month of December 2017, the value \nof cheque transactions decreased to US$3.6 \nmillion, from US$4.88 million in November \n2017. \n \nFEBRUARY 2018 \nRESERVE BANK OF ZIMBABWE \n \n9 \n \nStatistical Tables \n \nMonetary Statistics \n 1. Depository Corporations Survey \n \n \n \n12 \n 2. Central Bank Survey \n \n \n \n \n \n \n13 \n \n3. Other Depository Corporations Survey \n \n \n \n \n14 \n Other Depository Corporations \n \n4.1 Assets \n \n \n \n \n \n \n \n15 \n 4.2 Liabilities \n \n \n \n \n \n \n \n16 \n Commercial Banks \n 5.1 Assets \n \n \n \n \n17 \n 5.2 Liabilities \n \n \n \n18 \n Building Societies \n 6.1 Assets \n \n \n \n \n \n \n19 \n 6.2 Liabilities \n \n \n \n \n \n20 \n Sectoral Analysis of Bank Loans and Advances and Deposits \n \n7.1 Sectoral Analysis of Commercial Banks Loans and Advances \n21 \n \n7.2 Sectoral Analysis of Commercial Banks Deposits \n \n \n22 \n Interest Rates \n \n8.1 Lending Rates \n \n \n \n \n \n \n \n23 \n \n8.2 Banks Deposit Rates \n \n \n \n \n \n \n24 \n \n Inflation \n \n9.1 Monthly Inflation \n \n \n \n \n \n \n25 \n \n9.2 Yearly Inflation \n \n \n \n \n \n \n \n26 \n External Statistics \n \n10. Total External Debt Outstanding by Debtor \n \n \n \n27 \n 11. Exchange Rates \n \n \n \n \n \n \n \n28 \n \n \n \n \n \n10 \n \n12. Zimbabwe Stock Exchange Statistics \n \n \n \n \n 29 \n \n 13. National Payments System Statistics \n \n \n \n \n13.1 Values of Transactions \n \n \n \n \n 30 \n \n13.2 Volumes of Transactions \n \n \n \n \n 31 \n \n14. Merchandise Trade Statistics \n \n \n \n \n \n 32 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 11 \n \n \nDec-16\nJan-17\nFeb-17\nMar-17\nApr-17\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\nNet Foreign Assets\n-556,149.85\n-584,587.94\n-574,226.80\n-558,721.32\n-513,306.49\n-568,383.24\n-574,712.07\n-626,166.71\n-581,024.98\n-549,943.15\n-600,146.55\n-718,745.96\n-835,691.57\nCentral Bank(net)\n-574,251.01\n-583,790.45\n-588,653.44\n-584,124.96\n-598,046.16\n-624,627.79\n-572,190.43\n-673,117.34\n-634,409.89\n-644,166.06\n-736,057.71\n-869,239.58\n-998,177.94\nForeign Assets\n411,734.17\n450,139.03\n446,101.75\n420,146.58\n406,925.81\n381,126.20\n415,139.98\n380,195.83\n432,967.36\n442,659.91\n330,188.17\n316,883.48\n399,298.64\nForeign Liabilities\n985,985.18\n1,033,929.49\n1,034,755.19\n1,004,271.54\n1,004,971.97\n1,005,753.98\n987,330.41\n1,053,313.17\n1,067,377.25\n1,086,825.97\n1,066,245.88\n1,186,123.05\n1,397,476.58\nOther Depository Corporations(net)\n18,101.16\n-797.49\n14,426.64\n25,403.64\n84,739.67\n56,244.55\n-2,521.64\n46,950.63\n53,384.91\n94,222.92\n135,911.17\n150,493.62\n162,486.37\nForeign Assets\n297,836.79\n270,935.31\n290,763.66\n275,104.70\n338,839.86\n302,736.47\n260,090.51\n212,254.02\n214,135.93\n249,362.59\n293,931.99\n304,880.23\n338,932.13\nForeign Liabilities\n279,735.63\n271,732.80\n276,337.02\n249,701.07\n254,100.19\n246,491.92\n262,612.14\n165,303.39\n160,751.02\n155,139.67\n158,020.82\n154,386.61\n176,445.76\nNet Domestic Assets (NDA)\n6,194,430.87\n6,248,024.45\n6,345,868.68 6,438,654.97\n6,630,089.13 6,768,665.58 7,066,383.69\n7,190,192.60 7,656,567.78\n8,010,141.46\n8,287,169.55\n8,738,773.53\n8,941,916.14\nDomestic Claims\n7,481,417.88\n7,456,396.51\n7,606,214.41\n7,693,211.88\n7,850,810.40\n8,109,966.41\n8,430,156.54\n8,563,257.71\n9,041,471.69 9,445,954.95 9,806,932.03 10,290,523.51 10,703,450.61\nClaims on Central Government(net)\n3,597,963.54\n3,711,453.49\n3,859,591.32 3,839,525.33\n4,019,529.99\n4,168,269.21\n4,429,130.33\n4,583,719.81\n4,963,451.34 5,262,365.52 5,558,940.68\n5,980,149.89\n6,257,101.12\nClaims on Central Government\n3,758,737.40\n3,790,240.06\n3,939,990.88\n3,952,135.70\n4,118,041.33\n4,265,615.80\n4,543,365.26\n4,702,324.42\n5,092,414.12\n5,358,107.60\n5,642,566.58\n6,055,451.35\n6,392,274.17\nCentral Bank\n2,337,546.70\n2,270,648.80\n2,355,433.40\n2,337,736.86\n2,444,902.51\n2,578,541.50\n2,781,509.63\n2,976,316.75\n3,253,867.88\n3,386,569.83\n3,558,186.58\n3,826,415.91\n3,965,701.91\nODCs\n1,421,190.70\n1,519,591.25\n1,584,557.48\n1,614,398.84\n1,673,138.81\n1,687,074.29\n1,761,855.63\n1,726,007.68\n1,838,546.24\n1,971,537.77\n2,084,380.00\n2,229,035.44\n2,426,572.26\nLess Liabilities to Central Government\n160,773.86\n78,786.57\n80,399.57\n112,610.37\n98,511.34\n97,346.59\n114,234.93\n118,604.61\n128,962.78\n95,742.09\n83,625.90\n75,301.46\n135,173.05\nCentral Bank\n118,608.45\n25,722.84\n25,139.92\n25,709.26\n22,277.32\n22,242.61\n40,520.14\n40,545.19\n40,631.81\n40,545.86\n40,530.28\n40,553.01\n40,567.80\nODCs\n42,165.41\n53,063.72\n55,259.64\n86,901.10\n76,234.01\n75,103.98\n73,714.80\n78,059.42\n88,330.97\n55,196.23\n43,095.62\n34,748.45\n94,605.25\nClaims on Other Sectors\n3,883,454.35\n3,744,943.02\n3,746,623.09\n3,853,686.55\n3,831,280.41\n3,941,697.20\n4,001,026.21\n3,979,537.89\n4,078,020.35\n4,183,589.43\n4,247,991.35\n4,310,373.62\n4,446,349.49\nOther Financial Corporations\n82,282.79\n80,004.96\n46,341.75\n47,369.15\n49,453.09\n52,463.93\n105,548.86\n54,242.21\n48,020.09\n49,739.69\n49,554.83\n52,045.37\n65,264.09\nState and Local Government\n34,237.41\n35,909.11\n35,006.53\n34,312.18\n34,732.93\n36,595.52\n35,573.02\n34,059.17\n34,223.63\n31,707.35\n33,198.40\n38,416.75\n46,177.22\nPublic Non Financial Corporations\n253,405.61\n257,713.21\n286,508.91\n280,721.01\n314,505.79\n346,370.34\n349,686.88\n412,068.05\n412,045.72\n465,886.74\n474,544.48\n526,356.79\n616,578.26\nPrivate Sector\n3,513,528.54\n3,371,315.74\n3,378,765.90\n3,491,284.21\n3,432,588.60\n3,506,267.42\n3,510,217.45\n3,479,168.47\n3,583,730.91\n3,636,255.65\n3,690,693.65\n3,693,554.71\n3,718,329.92\nCentral Bank\n16,422.01\n15,931.59\n21,712.67\n21,760.49\n18,704.05\n19,992.79\n20,634.27\n21,723.98\n30,090.82\n24,112.13\n29,027.93\n30,167.18\n24,680.59\nODCs\n3,497,106.53\n3,355,384.15\n3,357,053.23\n3,469,523.72\n3,413,884.55\n3,486,274.63\n3,489,583.19\n3,457,444.48\n3,553,640.10\n3,612,143.52\n3,661,665.72\n3,663,387.53\n3,693,649.33\nOther Items(Net)\n1,286,987.02\n1,208,372.06\n1,260,345.73\n1,254,556.91\n1,220,721.27\n1,341,300.82\n1,363,772.85\n1,373,065.10\n1,384,903.90\n1,435,813.49\n1,519,762.48\n1,551,749.98\n1,761,534.47\nShares and Other Equity\n1,470,571.17\n1,471,378.22\n1,481,806.96\n1,505,125.73\n1,501,542.78\n1,530,318.81\n1,547,498.75\n1,546,591.54\n1,561,407.08\n1,584,816.35\n1,635,896.82\n1,657,131.70\n1,770,317.74\nLiabilities to Other Financial Corporations\n45,135.69\n19,748.85\n19,754.13\n15,735.14\n15,467.80\n15,506.06\n17,953.19\n18,647.30\n17,870.07\n27,738.15\n24,759.56\n24,615.34\n6,152.75\nRestricted Deposits\n60,499.79\n66,478.53\n66,737.97\n67,789.29\n68,133.12\n84,939.87\n84,617.96\n84,477.31\n32,685.62\n115,800.59\n161,010.60\n88,854.55\n165,099.98\nDeposits and Securities Excluded from Base Mo\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-289,219.64\n-349,233.54\n-307,953.33\n-334,093.24\n-364,422.43\n-289,463.92\n-286,297.05\n-276,651.05\n-227,058.87\n-292,541.60\n-301,904.50\n-218,851.62\n-180,036.00\nBroad Money-M3\n5,638,281.02\n5,663,436.51\n5,771,641.88 5,879,933.65\n6,116,782.64 6,200,282.35\n6,491,671.62 6,564,025.89 7,075,542.80\n7,460,198.31\n7,687,023.01\n8,020,027.58\n8,106,224.57\nSecurities Other than Shares Included in Broa\n62,894.35\n50,562.02\n59,329.24\n60,161.15\n63,292.20\n61,392.93\n65,667.46\n66,282.58\n71,054.38\n55,830.26\n62,975.36\n66,482.78\n68,638.47\nBroad Money-M2\n5,575,386.66\n5,612,874.49\n5,712,312.64\n5,819,772.50 6,053,490.44\n6,138,889.42\n6,426,004.16\n6,497,743.31 7,004,488.42 7,404,368.06 7,624,047.65\n7,953,544.80\n8,037,586.10\nOther Deposits\n1,471,657.19\n1,544,945.66\n1,552,644.56\n1,529,856.98\n1,530,705.58\n1,558,418.08\n1,538,865.52\n1,600,104.76\n1,604,901.44\n1,571,434.68\n1,460,819.34\n1,450,191.32\n1,401,725.04\nNarrow Money-M1\n4,103,729.48\n4,067,928.83\n4,159,668.08\n4,289,915.52 4,522,784.87\n4,580,471.34\n4,887,138.64 4,897,638.55 5,399,586.98 5,832,933.38\n6,163,228.31\n6,503,353.48\n6,635,861.06\nTransferable Deposits\n4,033,558.66\n3,985,443.09\n4,046,287.46\n4,147,742.43\n4,369,406.07\n4,404,701.40\n4,690,977.34\n4,696,301.61\n5,199,733.27\n5,589,485.14\n5,875,303.92\n6,184,269.27\n6,303,923.18\nCurrency Outside Depository Corporations\n70,170.81\n82,485.74\n113,380.62\n142,173.09\n153,378.80\n175,769.94\n196,161.30\n201,336.94\n199,853.71\n243,448.24\n287,924.39\n319,084.21\n331,937.88\nSource: Reserve Bank of Zimbawe\nNotes:\n(i) Depository corporations survey - formerly Monetary Survey.\n(ii) Broad money redefined using IMF's Monetary and Financial Statistics Manual of 2000. Major changes include exclusion of Government deposits held by banks from broad money.\n(iii) Transferable deposits made up of demand and savings deposits.\n(iv) NCDs are also referred to as securities included in broad money.\n(v) All classes of time deposits, short and long term are classified as time deposits, which are also termed other deposits.\n(vi) Credit to the private sector now excludes claims on other financial corporations, as well as claims on state and local government (local authorities)\n(vii) Depository corporations made up of the Central Bank and other depository corporations\n(viii) Other depository corporations (ODCs) - Commercial banks, merchant banks, building societies and POSB.\n(ix) In December 2017, the statistics were adjusted in restrospect by reclassifying Securities issued under Aftrades from claims on government to claims on central bank\n(x) In December 2017, the statistics were adjusted in restrospect by reclassifying amounts accessed by banks under the Aftrades from liabilities to Other Depository corporations and Other Financial Corporations to liabilities to Central Ban\nTABLE 1: DEPOSITORY CORPORATIONS SURVEY (US$ '000)\n \n \n \n12 \n \n \nDec-16\nJan-17\nFeb-17\nMar-17\nApr-17\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\nNet Foreign Assets\n-574,251.01\n-583,790.45\n-588,653.44\n-584,124.96\n-598,046.16\n-624,627.79\n-572,190.43\n-673,117.34\n-634,409.89\n-644,166.06\n-736,057.71\n-869,239.58\n-998,177.94\nClaims on Non Residents\n411,734.17\n450,139.03\n446,101.75\n420,146.58\n406,925.81\n381,126.20\n415,139.98\n380,195.83\n432,967.36\n442,659.91\n330,188.17\n316,883.48\n399,298.64\nOfficial Reserves Assets\n310,238.19\n351,354.77\n347,232.74\n320,724.81\n306,786.71\n281,496.90\n311,951.49\n217,201.99\n270,004.32\n281,012.34\n227,656.94\n205,053.80\n292,286.01\nOther Foreign Assets\n101,495.99\n98,784.27\n98,869.01\n99,421.78\n100,139.10\n99,629.30\n103,188.49\n162,993.84\n162,963.05\n161,647.57\n102,531.22\n111,829.68\n107,012.63\nLess Liabilities to Non Residents\n985,985.18\n1,033,929.49\n1,034,755.19\n1,004,271.54\n1,004,971.97\n1,005,753.98\n987,330.41\n1,053,313.17\n1,067,377.25\n1,086,825.97\n1,066,245.88\n1,186,123.05\n1,397,476.58\nShort Term Liabilities\n515,365.90\n558,302.10\n560,678.78\n528,171.18\n523,978.67\n523,548.11\n502,610.47\n563,024.67\n574,360.75\n593,884.47\n573,462.17\n693,209.75\n903,645.68\nOther Foreign Liabilities\n470,619.28\n475,627.38\n474,076.41\n476,100.37\n480,993.30\n482,205.88\n484,719.93\n490,288.49\n493,016.51\n492,941.50\n492,783.71\n492,913.31\n493,830.91\nNet Domestic Assets (NDA)\n2,046,986.18\n2,083,563.46\n2,193,240.85\n2,188,550.14\n2,257,792.42\n2,349,975.84\n2,521,069.54\n2,737,322.28\n2,999,347.85\n3,105,441.82\n3,256,650.47\n3,578,707.96\n3,663,611.93\nDomestic Claims\n2,418,650.38\n2,450,795.71\n2,572,531.94\n2,546,698.82\n2,684,539.56\n2,853,418.83\n3,030,356.62\n3,245,039.24\n3,502,380.95\n3,713,000.64\n3,917,674.05\n4,231,837.20\n4,417,359.87\nNet Claims on Central Government\n2,218,938.25\n2,244,925.96\n2,330,293.48\n2,312,027.60\n2,422,625.19\n2,556,298.89\n2,740,989.49\n2,935,771.55\n3,213,236.07\n3,346,023.97\n3,517,656.29\n3,785,862.91\n3,925,134.11\nClaims on Central Government\n2,337,546.70\n2,270,648.80\n2,355,433.40\n2,337,736.86\n2,444,902.51\n2,578,541.50\n2,781,509.63\n2,976,316.75\n3,253,867.88\n3,386,569.83\n3,558,186.58\n3,826,415.91\n3,965,701.91\nOf which: Securities Other than Shares\n566,328.08\n577,431.69\n562,535.65\n551,741.20\n533,407.34\n537,150.63\n620,541.15\n640,269.72\n677,443.83\n641,160.04\n1,105,837.44\n1,153,434.17\n1,478,745.94\nLoans\n1,771,218.62\n1,693,217.11\n1,792,897.75\n1,785,995.66\n1,911,495.17\n2,041,390.87\n2,160,968.48\n2,336,047.02\n2,576,424.05\n2,745,409.80\n2,452,349.14\n2,672,981.75\n2,486,955.97\n Loans and Advances\n1,413,619.41\n1,335,617.86\n1,435,423.48\n1,464,915.87\n1,590,415.34\n1,720,310.96\n1,839,861.18\n2,014,968.77\n2,255,345.80\n2,426,555.62\n2,133,497.10\n2,354,104.05\n2,210,823.06\n Legacy Debt\n357,599.21\n357,599.25\n357,474.27\n321,079.79\n321,079.84\n321,079.91\n321,107.30\n321,078.25\n321,078.25\n318,854.18\n318,852.04\n318,877.70\n276,132.91\nLess Liabilities to Central Government\n118,608.45\n25,722.84\n25,139.92\n25,709.26\n22,277.32\n22,242.61\n40,520.14\n40,545.19\n40,631.81\n40,545.86\n40,530.28\n40,553.01\n40,567.80\nOf which: Deposits\n118,608.45\n25,722.84\n25,139.92\n25,709.26\n22,277.32\n22,242.61\n40,520.14\n40,545.19\n40,631.81\n40,545.86\n40,530.28\n40,553.01\n40,567.80\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n199,712.128\n205,869.751\n242,238.465\n234,671.229\n261,914.370\n297,119.940\n289,367.124\n309,267.684\n289,144.884\n366,976.666\n400,017.757\n445,974.296\n492,225.757\nOther Financial Corporations\n16,515.86\n16,900.44\n18,434.72\n18,570.34\n18,972.27\n19,413.25\n17,924.43\n18,367.00\n18,768.05\n19,232.50\n20,476.27\n20,253.71\n19,884.68\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n166,774.26\n173,037.73\n202,091.08\n194,340.40\n224,238.05\n257,713.90\n250,808.43\n269,176.70\n240,286.01\n323,632.04\n350,513.55\n395,553.41\n447,660.48\nPrivate Sector\n16,422.01\n15,931.59\n21,712.67\n21,760.49\n18,704.05\n19,992.79\n20,634.27\n21,723.98\n30,090.82\n24,112.13\n29,027.93\n30,167.18\n24,680.59\nClaims on Other Depository Corporations\n138,331.70\n110,720.51\n93,514.18\n104,865.33\n85,479.27\n50,810.90\n52,540.42\n43,316.48\n30,413.03\n40,885.26\n73,618.97\n166,428.64\n180,890.40\nOf which: Loans\n138,331.70\n110,720.51\n93,514.18\n104,865.33\n85,479.27\n50,810.90\n52,540.42\n43,316.48\n30,413.03\n40,885.26\n73,618.97\n166,428.64\n180,890.40\nOther Liabilities to ODCs\n296,865.05\n276,464.59\n264,018.11\n261,130.29\n305,203.40\n328,027.29\n322,885.34\n319,687.89\n362,778.93\n386,988.59\n423,416.48\n567,034.15\n618,954.75\nOf which: Aftrades Balances\n209,265.62\n209,265.62\n214,543.03\n240,485.80\n290,485.80\n300,443.03\n300,442.83\n300,443.03\n339,943.03\n339,943.03\n339,943.03\n399,943.03\n399,987.70\n Securities\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n6,000.00\n65,130.00\n142,380.00\n165,174.80\nOther Items(Net)\n213,130.85\n201,488.18\n208,787.15\n201,883.73\n207,023.01\n226,226.60\n238,942.17\n231,345.55\n170,667.19\n261,455.48\n311,226.08\n252,523.73\n315,683.58\nShares and Other Equity\n198,745.12\n198,391.01\n202,521.27\n203,258.37\n206,519.28\n220,031.93\n222,222.74\n215,716.92\n219,271.55\n228,502.18\n237,010.51\n234,173.10\n239,919.77\nOther Items(Net)\n-89,331.41\n-81,217.98\n-78,308.70\n-84,747.72\n-83,213.17\n-94,328.99\n-83,482.31\n-84,432.46\n-96,873.76\n-99,019.71\n-102,378.81\n-86,087.70\n-89,336.17\nLiabilities to Other Resident Sectors\n43,217.35\n17,836.62\n17,836.62\n15,583.78\n15,583.78\n15,583.78\n15,583.78\n15,583.78\n15,583.78\n16,172.43\n15,583.78\n15,583.78\n0.00\nDeposits and Securities Excluded from Base \n60,499.79\n66,478.53\n66,737.97\n67,789.29\n68,133.12\n84,939.87\n84,617.96\n84,477.31\n32,685.62\n115,800.59\n161,010.60\n88,854.55\n165,099.98\nMonetary Base Incl. foreign currency clearing balances\nMonetary Base \n1,472,735.173 1,499,773.004 1,604,587.411 1,604,425.179 1,659,746.254 1,725,348.049 1,948,879.104 2,064,204.942 2,364,937.964 2,461,275.759 2,520,592.752 2,709,468.388 2,665,433.989\nBond Coins\n13,783.332\n13,852.694\n13,845.125\n20,385.149\n23,268.864\n25,819.605\n27,667.474\n28,763.070\n30,289.792\n35,089.724\n37,235.523\n42,063.416\n54,687.288\nBond Notes\n72,950.552\n88,839.102\n118,836.703\n134,347.604\n140,801.342\n163,388.941\n175,855.752\n179,722.240\n181,874.281\n220,358.199\n259,385.565\n286,809.559\n289,827.726\nLiabilities to ODCs\n1,385,011.220\n1,395,502.072\n1,467,941.594\n1,446,635.592\n1,492,786.162\n1,520,837.740\n1,728,301.189\n1,838,460.100\n2,135,122.534\n2,166,837.091\n2,181,116.178\n2,331,782.192\n2,285,501.169\nReserve Deposits\n0.000\n0.000\n0.000\n0.000\n0.000\n0.000\n0.000\n0.000\n0.000\n0.000\n0.000\n0.000\n0.000\nOther\n1,385,011.220 1,395,502.072 1,467,941.594 1,446,635.592 1,492,786.162 1,520,837.740 1,728,301.189 1,838,460.100 2,135,122.534 2,166,837.091 2,181,116.178 2,331,782.192 2,285,501.169\nPrivate Deposits\n990.069\n1,579.135\n3,963.989\n3,056.833\n2,889.886\n15,301.762\n17,054.689\n17,259.532\n17,651.358\n38,990.746\n42,855.486\n48,813.221\n35,417.806\nSource: Reserve Bank of Zimbawe\nTABLE 2: CENTRAL BANK SURVEY (US$'000)\n \n \n \n13 \n \n \nDec-16\nJan-17\nFeb-17\nMar-17\nApr-17\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\nNet Foreign Assets\n18,101.16\n-797.49\n14,426.64\n25,403.64\n84,739.67\n56,244.55\n-2,521.64\n46,950.63\n53,384.91\n94,222.92\n135,911.17\n150,493.62\n162,486.37\nClaims on Non Residents\n297,836.79\n270,935.31\n290,763.66\n275,104.70\n338,839.86\n302,736.47\n260,090.51\n212,254.02\n214,135.93\n249,362.59\n293,931.99\n304,880.23\n338,932.13\nOf Which: Foreign Currency\n107,687.14\n110,979.79\n96,836.03\n66,426.17\n67,822.05\n56,944.26\n57,084.55\n45,185.40\n40,576.65\n38,057.17\n41,812.82\n46,089.81\n58,127.85\nDeposits\n189,886.91\n159,688.03\n193,663.57\n208,412.27\n270,746.20\n245,512.83\n202,703.19\n166,729.03\n173,240.95\n210,988.32\n251,805.84\n258,471.13\n279,933.74\nOther\n262.74\n267.49\n264.07\n266.26\n271.61\n279.38\n302.77\n339.60\n318.33\n317.10\n313.33\n319.29\n870.54\nLess Liabilities to Non Residents\n279,735.63\n271,732.80\n276,337.02\n249,701.07\n254,100.19\n246,491.92\n262,612.14\n165,303.39\n160,751.02\n155,139.67\n158,020.82\n154,386.61\n176,445.76\nOf Which: Deposits\n142,073.73\n137,945.79\n135,779.65\n117,026.45\n126,179.95\n120,578.30\n119,073.63\n54,731.95\n51,835.14\n54,067.71\n58,472.24\n56,101.99\n67,977.29\nLoans\n137,661.90\n133,787.01\n140,557.37\n132,674.61\n127,920.24\n125,913.62\n143,538.51\n110,571.44\n108,915.89\n101,071.96\n99,548.59\n98,284.62\n108,468.47\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nNet Domestic Assets (NDA)\n5,549,018.98\n \n5,580,169.12\n \n5,639,870.63\n \n5,709,300.08\n \n5,875,774.29\n \n5,952,966.10\n \n6,280,977.27\n \n6,298,478.80\n \n6,804,652.82\n \n7,083,536.41\n \n7,220,331.96\n \n7,501,636.53\n \n7,576,382.51\n \nDomestic Claims\n5,062,767.51\n \n5,005,600.80\n \n5,033,682.47\n \n5,146,513.06\n \n5,166,270.84\n \n5,256,547.58\n \n5,399,799.92\n \n5,318,218.47\n \n5,539,090.73\n \n5,732,954.31\n \n5,889,257.98\n \n6,058,686.31\n \n6,286,090.74\n \nNet Claims on Central Government\n1,379,025.29\n \n1,466,527.53\n \n1,529,297.84\n \n1,527,497.74\n \n1,596,904.80\n \n1,611,970.31\n \n1,688,140.84\n \n1,647,948.26\n \n1,750,215.27\n \n1,916,341.54\n \n2,041,284.38\n \n2,194,286.98\n \n2,331,967.01\n \nClaims on Central Government\n1,421,190.70\n \n1,519,591.25\n \n1,584,557.48\n \n1,614,398.84\n \n1,673,138.81\n \n1,687,074.29\n \n1,761,855.63\n \n1,726,007.68\n \n1,838,546.24\n \n1,971,537.77\n \n2,084,380.00\n \n2,229,035.44\n \n2,426,572.26\n \nSecurities\n1,403,396.87\n \n1,503,705.38\n \n1,569,588.93\n \n1,598,695.64\n \n1,657,317.09\n \n1,670,327.43\n \n1,713,932.99\n \n1,680,825.17\n \n1,797,227.42\n \n1,930,046.62\n \n2,049,535.06\n \n2,196,782.06\n \n2,397,156.98\n \nLoans\n17,793.82\n \n15,885.88\n \n14,968.55\n \n15,703.20\n \n15,821.72\n \n16,746.86\n \n47,922.65\n \n45,182.51\n \n41,318.82\n \n41,491.15\n \n34,844.95\n \n32,253.38\n \n29,415.28\n \nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nLess Liabilities to Central Government\n42,165.41\n \n53,063.72\n \n55,259.64\n \n86,901.10\n \n76,234.01\n \n75,103.98\n \n73,714.80\n \n78,059.42\n \n88,330.97\n \n55,196.23\n \n43,095.62\n \n34,748.45\n \n94,605.25\n \nOf which: Deposits\n42,165.41\n \n53,063.72\n \n55,259.64\n \n86,901.10\n \n76,234.01\n \n75,103.98\n \n73,714.80\n \n78,059.42\n \n88,330.97\n \n55,196.23\n \n43,095.62\n \n34,748.45\n \n94,605.25\n \nOther \n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\nClaims on Other Sectors\n3,683,742.22\n \n3,539,073.27\n \n3,504,384.63\n \n3,619,015.32\n \n3,569,366.04\n \n3,644,577.26\n \n3,711,659.09\n \n3,670,270.21\n \n3,788,875.46\n \n3,816,612.76\n \n3,847,973.60\n \n3,864,399.32\n \n3,954,123.73\n \nOther Financial Corporations\n65,766.93\n \n63,104.52\n \n27,907.03\n \n28,798.81\n \n30,480.82\n \n33,050.68\n \n87,624.43\n \n35,875.21\n \n29,252.04\n \n30,507.19\n \n29,078.55\n \n31,791.66\n \n45,379.41\n \nState and Local Government\n34,237.41\n \n35,909.11\n \n35,006.53\n \n34,312.18\n \n34,732.93\n \n36,595.52\n \n35,573.02\n \n34,059.17\n \n34,223.63\n \n31,707.35\n \n33,198.40\n \n38,416.75\n \n46,177.22\n \nPublic Non Financial Corporations\n86,631.35\n \n84,675.48\n \n84,417.84\n \n86,380.62\n \n90,267.74\n \n88,656.44\n \n98,878.45\n \n142,891.35\n \n171,759.70\n \n142,254.70\n \n124,030.93\n \n130,803.39\n \n168,917.77\n \nPrivate Sector\n3,497,106.53\n \n3,355,384.15\n \n3,357,053.23\n \n3,469,523.72\n \n3,413,884.55\n \n3,486,274.63\n \n3,489,583.19\n \n3,457,444.48\n \n3,553,640.10\n \n3,612,143.52\n \n3,661,665.72\n \n3,663,387.53\n \n3,693,649.33\n \nClaims on the Central Bank\n1,643,116.38\n \n1,684,125.02\n \n1,692,364.62\n \n1,734,347.30\n \n1,843,336.43\n \n1,856,234.16\n \n2,034,646.02\n \n2,168,966.56\n \n2,440,107.43\n \n2,495,688.75\n \n2,525,633.85\n \n2,671,576.69\n \n2,604,575.55\n \nCurrency\n16,563.071\n \n20,206.055\n \n19,301.209\n \n12,559.660\n \n10,691.409\n \n13,438.609\n \n7,361.926\n \n7,148.374\n \n12,310.361\n \n11,999.682\n \n8,696.697\n \n9,788.767\n \n12,577.130\n \nOther Claims including Reserves\n1,626,553.31\n \n1,663,918.96\n \n1,673,063.41\n \n1,721,787.64\n \n1,832,645.02\n \n1,842,795.55\n \n2,027,284.09\n \n2,161,818.18\n \n2,427,797.07\n \n2,483,689.07\n \n2,516,937.16\n \n2,661,787.92\n \n2,591,998.42\n \nLiabilities to the Central Bank\n68,634.82\n \n39,193.97\n \n41,437.92\n \n43,486.92\n \n42,006.71\n \n42,321.73\n \n44,233.20\n \n32,516.41\n \n20,544.52\n \n20,550.87\n \n32,863.80\n \n51,156.39\n \n113,727.10\n \nOther Items(Net)\n1,088,230.09\n \n1,070,362.72\n \n1,044,738.54\n \n1,128,073.36\n \n1,091,826.28\n \n1,117,493.91\n \n1,109,235.47\n \n1,156,189.82\n \n1,154,000.82\n \n1,124,555.78\n \n1,161,696.08\n \n1,177,470.09\n \n1,200,556.69\n \nShares and Other Equity\n1,271,826.05\n \n1,272,987.21\n \n1,279,285.69\n \n1,301,867.36\n \n1,295,023.50\n \n1,310,286.87\n \n1,325,276.01\n \n1,330,874.62\n \n1,342,135.53\n \n1,356,314.17\n \n1,398,886.31\n \n1,422,958.60\n \n1,530,397.97\n \nLiabilities to other ressident sectors\n1,918.34\n \n1,912.23\n \n1,917.51\n \n151.35\n \n(115.98)\n \n(77.72)\n \n2,369.41\n \n3,063.52\n \n2,286.29\n \n11,565.72\n \n9,175.78\n \n9,031.56\n \n6,152.75\n \nOther Items(Net)\n(185,514.31)\n \n(204,536.72)\n \n(236,464.66)\n \n(173,945.36)\n \n(203,081.24)\n \n(192,715.24)\n \n(218,409.95)\n \n(177,748.32)\n \n(190,420.99)\n \n(243,324.12)\n \n(246,366.01)\n \n(254,520.08)\n \n(335,994.03)\n \nDeposits and Securities Included in Broad Mon\n5,567,120.14\n \n5,579,371.63\n \n5,654,297.27\n \n5,734,703.72\n \n5,960,513.96\n \n6,009,210.65\n \n6,278,455.63\n \n6,345,429.42\n \n6,858,037.73\n \n7,177,759.33\n \n7,356,243.13\n \n7,652,130.15\n \n7,738,868.88\n \nDeposits Included in Broad Money\n5,504,225.78\n \n5,528,809.61\n \n5,594,968.03\n \n5,674,542.57\n \n5,897,221.76\n \n5,947,817.72\n \n6,212,788.17\n \n6,279,146.84\n \n6,786,983.35\n \n7,121,929.07\n \n7,293,267.77\n \n7,585,647.37\n \n7,670,230.41\n \nTransferable Deposits\n4,032,568.59\n3,983,863.96\n4,042,323.47\n4,144,685.59\n4,366,516.18\n4,389,399.64\n4,673,922.65\n4,679,042.08\n5,182,081.91\n5,550,494.39\n5,832,448.43\n6,135,456.05\n6,268,505.37\nMoney Market Instruments\n62,894.35\n \n50,562.02\n \n59,329.24\n \n60,161.15\n \n63,292.20\n \n61,392.93\n \n65,667.46\n \n66,282.58\n \n71,054.38\n \n55,830.26\n \n62,975.36\n \n66,482.78\n \n68,638.47\n \nSource:Reserve Bank of Zimbabwe,2017\nTABLE 2 : OTHER DEPOSITORY CORPORATIONS SURVEY ( US '000)\n \n \n \n14 \n \n \nForeign\nTOTAL\nEnd of\nNotes\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment\n1\nLocal Governemt\nPublic Enterprises\nOther\n2\nGovernment\nLocal \nPublic \nOther Institutional Units\n3\nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nGovernment\nEnterprises\nAssets\n2016\nJan\n1.22\n \n193.28\n734.58\n294.53\n116.1\n25.0\n1,147.0\n28.8\n5.2\n19.1\n28.5\n15.6\n63.6\n3,547.4\n110.2\n582.8\n412.8\n545.1\n7,870.8\nFeb\n1.44\n \n160.35\n763.47\n287.06\n102.8\n25.0\n1,228.9\n29.2\n5.2\n19.0\n25.0\n15.8\n61.1\n3,472.0\n100.5\n477.1\n427.3\n547.6\n7,748.9\nMar\n1.53\n \n179.00\n809.22\n286.42\n148.6\n25.0\n1,225.0\n28.5\n5.1\n16.4\n22.6\n14.2\n103.9\n3,510.6\n59.3\n471.0\n428.0\n552.9\n7,887.2\nApr\n1.55\n \n146.02\n818.74\n323.00\n111.8\n25.0\n1,322.7\n27.6\n5.1\n15.8\n25.1\n15.0\n102.4\n3,453.7\n66.7\n413.7\n445.5\n552.2\n7,871.5\nMay\n1.53\n \n100.12\n973.06\n281.55\n91.0\n25.0\n1,354.1\n26.8\n5.0\n16.6\n12.3\n14.7\n101.1\n3,433.4\n61.0\n397.0\n440.2\n564.1\n7,898.5\nJun\n1.61\n \n124.61\n1,015.85\n287.98\n128.5\n25.0\n1,412.9\n25.9\n0.0\n16.4\n28.1\n14.6\n98.9\n3,414.9\n66.9\n407.7\n431.5\n578.8\n8,080.1\nJul\n1.62\n \n111.03\n1,053.72\n242.57\n147.4\n25.0\n1,450.1\n33.4\n0.0\n16.2\n26.6\n15.4\n100.7\n3,320.9\n74.2\n393.1\n416.7\n592.4\n8,021.1\nAug\n1.58\n \n148.46\n1,177.10\n235.02\n136.0\n25.0\n1,420.2\n32.3\n0.0\n11.3\n22.9\n15.4\n100.5\n3,326.8\n67.8\n390.2\n445.0\n598.3\n8,153.9\nSep\n1.63\n \n96.32\n1,208.28\n310.75\n173.6\n25.0\n1,463.4\n29.0\n5.4\n3.2\n27.3\n14.5\n88.4\n3,349.0\n86.1\n382.3\n448.6\n606.6\n8,319.5\nOct\n1.42\n \n88.60\n1,155.19\n322.05\n162.3\n27.0\n1,517.5\n26.3\n15.4\n3.9\n28.7\n15.5\n88.1\n3,389.7\n68.2\n397.2\n427.7\n609.0\n8,343.8\nNov\n4.57\n \n76.25\n1,318.56\n318.52\n140.9\n27.0\n1,500.7\n22.3\n15.5\n4.6\n17.6\n15.4\n86.1\n3,469.5\n71.9\n350.5\n419.0\n618.2\n8,477.2\nDec\n16.56\n \n107.69\n1,418.99\n378.23\n162.9\n27.0\n1,553.2\n21.0\n15.3\n4.9\n17.8\n13.2\n71.3\n3,265.0\n330.1\n376.7\n408.8\n626.0\n8,814.8\n2017\nJan\n20.21\n \n110.98\n1,454.99\n239.82\n132.7\n27.0\n1,654.5\n20.8\n15.4\n3.6\n15.9\n15.1\n69.2\n3,394.7\n57.5\n395.7\n383.4\n630.4\n8,642.1\nFeb\n19.30\n \n96.84\n1,488.48\n251.83\n145.1\n48.6\n1,714.0\n20.1\n15.5\n3.2\n15.0\n14.9\n68.9\n3,177.9\n236.8\n398.5\n400.0\n631.1\n8,746.0\nMar\n12.56\n \n66.43\n1,485.92\n260.51\n154.9\n53.5\n1,794.1\n18.7\n15.7\n3.8\n15.7\n15.7\n70.7\n3,460.5\n67.2\n422.4\n442.5\n635.1\n8,995.8\nApr\n10.69\n \n67.82\n1,495.25\n249.41\n219.3\n51.4\n1,954.0\n17.8\n15.8\n3.6\n15.8\n16.9\n74.5\n3,449.5\n24.6\n489.1\n398.8\n644.6\n9,199.0\nMay\n13.44\n \n56.94\n1,492.38\n272.47\n170.2\n75.3\n1,968.9\n20.3\n15.7\n33.6\n16.7\n16.3\n72.9\n3,447.8\n82.4\n486.1\n421.7\n644.4\n9,307.6\nJun\n7.36\n \n57.08\n1,674.91\n350.26\n92.1\n110.6\n2,014.2\n19.0\n16.0\n35.0\n47.9\n16.5\n82.9\n3,494.3\n92.8\n533.5\n408.9\n649.6\n9,702.8\nJul\n7.15\n \n45.19\n1,807.42\n302.34\n63.1\n103.6\n1,982.8\n17.2\n26.1\n34.4\n45.2\n16.9\n116.8\n3,417.1\n86.8\n513.6\n432.9\n635.8\n9,654.3\nAug\n12.31\n \n40.58\n2,061.85\n276.55\n165.3\n7.9\n2,100.9\n16.3\n26.3\n64.6\n41.3\n18.0\n145.5\n3,494.5\n78.6\n531.8\n403.7\n639.5\n10,125.5\nSep\n12.00\n \n38.06\n2,110.44\n226.79\n179.7\n31.3\n2,248.9\n16.1\n23.5\n65.0\n41.5\n15.6\n118.8\n3,554.4\n78.0\n472.8\n415.6\n655.1\n10,303.5\nOct\n8.70\n \n41.81\n2,139.31\n254.07\n190.8\n61.0\n2,372.1\n15.4\n24.4\n65.1\n34.8\n17.8\n99.6\n3,599.1\n82.0\n432.4\n459.3\n667.3\n10,564.9\nNov\n9.79\n \n46.09\n2,315.51\n289.76\n184.2\n74.3\n2,487.7\n18.8\n23.5\n65.4\n32.3\n19.6\n107.3\n3,608.7\n76.8\n417.7\n505.6\n672.5\n10,955.5\nDec\n12.58\n \n58.13\n2,592.00\n276.01\n213.4\n66.6\n2,397.2\n26.8\n23.5\n66.3\n29.4\n19.4\n145.5\n3,581.3\n92.2\n508.3\n509.3\n699.9\n11,317.7\nSource:Reserve Bank of Zimbabwe,2017\nNotes\n1.Government securities includes treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations.\nTABLE 4.1: OTHER DEPOSITORY CORPORATIONS -ASSETS\nUS$ millions\nDebt Securities\nLoans and Advances\n \n \n \n15 \n \n \n \n \nDebt Securities\nForeign Liabilities\nCapital\nContigent\nOther\nTOTAL\nand\nLiablities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository \nOther Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2016\n Jan\n2,487.3\n650.3\n1,536.5\n4,674.2\n388.1\n26.4\n5,088.7\n44.9\n356.5\n0.0\n125.0\n86.0\n1,189.0\n582.8\n397.8\n7,870.76\n \n Feb\n2,466.2\n669.7\n1,552.9\n4,688.8\n375.0\n20.4\n5,084.1\n50.3\n341.1\n0.0\n171.7\n36.4\n1,196.7\n477.1\n391.3\n7,748.89\n \n Mar\n2,566.3\n676.8\n1,592.4\n4,835.5\n371.0\n16.9\n5,223.5\n55.6\n340.1\n0.0\n181.1\n37.3\n1,185.3\n471.0\n393.5\n7,887.24\n \n Apr\n2,629.9\n695.1\n1,568.6\n4,893.7\n332.4\n18.5\n5,244.6\n80.1\n322.6\n0.0\n194.0\n36.9\n1,188.4\n413.7\n391.2\n7,871.55\n \n May\n2,698.3\n690.6\n1,559.5\n4,948.4\n309.8\n19.5\n5,277.7\n71.6\n336.1\n0.0\n143.5\n36.8\n1,238.7\n397.0\n397.2\n7,898.54\n \n Jun\n2,792.4\n660.9\n1,569.2\n5,022.5\n401.4\n25.6\n5,449.5\n81.0\n307.7\n0.0\n159.4\n47.4\n1,243.5\n407.7\n384.0\n8,080.12\n \n Jul\n2,734.8\n722.9\n1,517.7\n4,975.5\n435.1\n50.9\n5,461.5\n71.8\n296.6\n0.0\n129.6\n46.2\n1,256.6\n393.1\n365.6\n8,021.06\n \n Aug\n2,894.5\n639.2\n1,553.3\n5,087.1\n412.3\n46.9\n5,546.3\n80.8\n290.6\n0.0\n127.6\n41.2\n1,271.0\n390.2\n406.1\n8,153.92\n \n Sep\n2,974.8\n679.9\n1,534.9\n5,189.6\n479.7\n43.7\n5,713.0\n74.1\n276.8\n0.0\n151.7\n36.2\n1,276.8\n382.3\n408.4\n8,319.46\n \n Oct\n3,115.2\n605.1\n1,508.9\n5,229.3\n433.8\n43.1\n5,706.1\n73.4\n297.0\n0.0\n162.4\n28.3\n1,293.5\n397.2\n385.9\n8,343.79\n \n Nov\n3,245.5\n640.8\n1,467.6\n5,353.9\n471.9\n46.2\n5,872.0\n43.9\n289.7\n0.0\n142.2\n28.8\n1,313.4\n350.5\n436.9\n8,477.19\n \n Dec\n3,329.8\n702.9\n1,471.7\n5,504.4\n510.9\n42.2\n6,057.4\n62.9\n279.6\n1.8\n191.5\n48.8\n1,384.1\n376.7\n412.1\n8,814.81\n \n2017\n Jan\n3,263.8\n720.5\n1,544.9\n5,529.3\n429.8\n53.1\n6,012.2\n50.6\n271.2\n0.0\n104.5\n41.1\n1,360.2\n395.7\n406.6\n8,642.14\n \n Feb\n3,325.9\n722.0\n1,552.6\n5,600.5\n426.0\n55.3\n6,081.7\n59.3\n270.8\n0.0\n126.1\n43.4\n1,365.8\n398.5\n400.4\n8,746.02\n \n Mar\n3,429.2\n715.7\n1,529.9\n5,674.7\n461.0\n86.9\n6,222.6\n60.2\n249.6\n1.8\n134.9\n41.9\n1,426.8\n422.4\n435.7\n8,995.81\n \n Apr\n3,555.8\n813.7\n1,530.7\n5,900.2\n450.9\n76.2\n6,427.3\n63.3\n251.1\n0.0\n117.4\n41.9\n1,382.2\n489.1\n426.7\n9,199.00\n \n May\n3,593.7\n798.7\n1,558.4\n5,950.8\n454.6\n75.1\n6,480.5\n61.4\n243.5\n0.0\n95.2\n42.2\n1,448.6\n486.1\n450.1\n9,307.64\n \n Jun\n3,851.4\n825.6\n1,538.9\n6,215.9\n497.6\n73.7\n6,787.2\n65.7\n259.5\n0.0\n108.9\n46.6\n1,455.9\n533.5\n445.6\n9,702.82\n \n Jul\n3,845.0\n837.2\n1,600.1\n6,282.3\n503.0\n78.1\n6,863.3\n66.3\n162.2\n0.0\n99.5\n35.6\n1,463.2\n513.6\n450.7\n9,654.29\n \n Aug\n4,257.2\n927.5\n1,604.9\n6,789.6\n451.2\n88.3\n7,329.1\n71.1\n158.2\n0.0\n79.1\n22.8\n1,478.4\n531.8\n454.9\n10,125.48\n \n Sep\n4,622.2\n932.4\n1,571.4\n7,126.0\n383.4\n55.2\n7,564.6\n55.8\n151.1\n0.0\n67.4\n32.1\n1,494.5\n472.8\n465.2\n10,303.53\n \n Oct\n4,825.8\n1,010.8\n1,460.8\n7,297.4\n410.7\n43.1\n7,751.2\n63.0\n153.9\n0.0\n73.1\n42.0\n1,537.5\n432.4\n511.7\n10,564.89\n \n Nov\n5,090.7\n1,047.9\n1,450.2\n7,588.7\n454.9\n34.7\n8,078.3\n66.5\n151.3\n0.0\n84.5\n60.2\n1,562.7\n417.7\n534.3\n10,955.47\n \n Dec\n5,144.5\n1,127.4\n1,401.7\n7,673.6\n407.8\n94.6\n8,176.0\n68.6\n173.1\n113.7\n100.7\n6.2\n1,663.1\n508.3\n508.1\n11,317.70\n \nSource:Reserve Bank of Zimbabwe,2017\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\nUS$ millions\n \n \n \n16 \n \n \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nOther \nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nGovernment\nGovernment\nEnterprises\n Institutional Units3\nOther claims\nAssets\nOther Assets\nAssets\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2016\nJan\n1.05\n \n171.98\n667.53\n119.20\n105.6\n25.0\n1,039.4\n0.0\n5.2\n19.1\n28.5\n15.6\n62.6\n2,703.9\n61.5\n582.8\n278.8\n396.6\n6,284.4\nFeb\n1.21\n \n140.75\n702.19\n96.28\n93.1\n25.0\n1,128.1\n0.0\n5.2\n19.0\n25.0\n15.8\n60.1\n2,615.0\n62.1\n477.1\n292.8\n399.3\n6,158.2\nMar\n1.31\n \n161.90\n734.53\n96.34\n131.7\n25.0\n1,143.3\n0.0\n5.1\n16.4\n22.6\n14.2\n102.9\n2,618.9\n62.6\n471.0\n298.0\n405.1\n6,311.1\nApr\n1.35\n \n135.51\n778.19\n135.47\n108.3\n25.0\n1,200.9\n0.0\n5.1\n15.8\n25.1\n15.0\n101.5\n2,573.6\n69.6\n413.7\n309.7\n404.7\n6,318.6\nMay\n1.38\n \n89.57\n891.44\n130.52\n85.3\n25.0\n1,229.5\n0.0\n5.0\n16.6\n12.3\n14.7\n100.1\n2,534.2\n64.0\n397.0\n302.2\n413.8\n6,312.8\nJun\n1.42\n \n108.53\n934.42\n84.65\n123.2\n25.0\n1,279.0\n0.0\n0.0\n16.4\n28.1\n14.6\n97.9\n2,523.7\n64.1\n407.7\n299.0\n431.6\n6,439.3\nJul\n1.45\n \n101.74\n977.63\n79.50\n141.3\n25.0\n1,316.9\n0.0\n0.0\n16.2\n26.6\n15.4\n99.7\n2,414.7\n65.7\n393.1\n284.0\n440.7\n6,399.6\nAug\n1.36\n \n140.23\n1,074.47\n97.53\n131.9\n25.0\n1,297.4\n0.0\n0.0\n11.3\n22.9\n15.4\n99.5\n2,414.8\n67.3\n390.2\n313.6\n447.3\n6,550.2\nSep\n1.40\n \n91.63\n1,122.67\n143.91\n169.6\n25.0\n1,331.9\n0.0\n5.4\n3.2\n27.3\n14.5\n87.3\n2,451.9\n71.4\n382.3\n317.3\n455.9\n6,702.6\nOct\n1.27\n \n81.03\n1,090.44\n130.20\n155.1\n27.0\n1,376.2\n0.0\n15.4\n3.9\n28.7\n15.5\n87.1\n2,472.1\n66.0\n397.2\n293.2\n458.2\n6,698.6\nNov\n4.24\n \n69.45\n1,242.12\n103.17\n136.3\n27.0\n1,349.8\n0.0\n15.5\n4.6\n17.6\n15.4\n85.2\n2,511.0\n68.5\n350.5\n285.6\n466.2\n6,752.2\nDec\n14.07\n \n98.95\n1,306.91\n134.35\n156.7\n27.0\n1,416.0\n0.0\n15.3\n4.9\n17.8\n13.2\n70.4\n2,380.1\n273.8\n376.7\n274.2\n473.4\n7,053.8\n2017\nJan\n17.72\n \n103.75\n1,322.38\n81.89\n128.2\n27.0\n1,485.0\n0.0\n15.4\n3.6\n15.9\n15.1\n68.6\n2,467.7\n53.9\n395.7\n251.9\n479.3\n6,933.1\nFeb\n16.29\n \n89.44\n1,396.07\n96.11\n137.3\n48.6\n1,502.5\n0.0\n15.5\n3.2\n15.0\n14.9\n68.2\n2,238.9\n239.7\n398.5\n266.0\n480.1\n7,026.4\nMar\n10.74\n \n63.27\n1,421.43\n83.18\n150.7\n53.5\n1,578.7\n0.0\n15.7\n3.8\n15.7\n15.7\n69.9\n2,554.3\n23.7\n422.4\n314.5\n484.0\n7,281.0\nApr\n9.82\n \n64.14\n1,383.44\n75.92\n209.0\n51.4\n1,744.4\n0.0\n15.8\n3.6\n15.8\n16.9\n74.0\n2,493.3\n26.4\n489.1\n263.7\n492.6\n7,429.3\nMay\n12.36\n \n52.63\n1,376.30\n119.89\n159.1\n75.3\n1,739.8\n0.0\n15.7\n33.6\n16.7\n16.3\n72.4\n2,528.3\n28.4\n486.1\n290.7\n492.0\n7,515.6\nJun\n7.01\n \n53.33\n1,578.51\n141.42\n82.2\n110.6\n1,786.8\n0.0\n16.0\n35.0\n47.9\n16.5\n82.2\n2,583.5\n23.9\n533.5\n273.6\n497.3\n7,869.2\nJul\n6.71\n \n40.92\n1,684.48\n137.62\n53.7\n103.6\n1,752.4\n0.0\n26.1\n34.4\n45.2\n16.9\n116.3\n2,495.4\n24.2\n513.6\n295.5\n482.1\n7,829.0\nAug\n11.80\n \n37.09\n1,882.39\n124.33\n161.2\n7.9\n1,856.2\n0.0\n26.3\n64.6\n41.3\n18.0\n145.0\n2,538.1\n23.8\n531.8\n272.6\n485.7\n8,228.1\nSep\n11.43\n \n35.83\n1,961.76\n109.59\n172.7\n31.3\n1,998.0\n0.0\n23.5\n65.0\n41.5\n15.6\n118.2\n2,585.7\n28.3\n472.8\n281.3\n487.7\n8,440.0\nOct\n8.10\n \n40.49\n1,961.82\n143.68\n175.7\n61.0\n2,106.6\n0.0\n24.4\n65.1\n34.8\n17.8\n99.1\n2,607.0\n29.4\n432.4\n287.8\n508.9\n8,604.1\nNov\n9.04\n \n45.09\n2,126.74\n161.14\n174.7\n74.3\n2,230.4\n0.0\n23.5\n65.4\n32.3\n19.6\n106.9\n2,618.1\n26.4\n417.7\n324.2\n511.4\n8,966.9\nDec\n11.43\n \n55.32\n2,373.95\n141.47\n203.5\n66.6\n2,128.7\n0.0\n23.5\n66.3\n29.4\n19.4\n145.0\n2,579.8\n40.0\n508.3\n324.5\n536.4\n9,253.6\nSource:Reserve Bank of Zimbabwe,2017\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations, \nTABLE 5.1: COMMERCIAL BANKS -ASSETS\nUS$ millions\nDebt Securities\nLoans and Advances\n \n \n \n17 \n \n \n \nUS$ millions\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nDebt Securities\nForeign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2016\n Jan\n2,428.8\n278.8\n967.1\n3674.77\n340.4\n24.7\n4,039.9\n33.6\n313.2\n0.0\n50.3\n85.3\n871.3\n582.8\n308.0\n6,284.43\n \n Feb\n2,407.9\n290.0\n984.9\n3682.68\n337.3\n18.8\n4,038.7\n38.4\n298.9\n0.0\n91.0\n35.0\n878.1\n477.1\n301.0\n6,158.19\n \n Mar\n2,508.0\n288.3\n1,026.9\n3823.12\n345.4\n15.4\n4,183.9\n43.2\n303.1\n0.0\n100.2\n36.1\n886.6\n471.0\n287.1\n6,311.15\n \n Apr\n2,571.6\n297.5\n1,014.8\n3883.80\n306.8\n16.9\n4,207.6\n67.7\n285.7\n0.0\n119.4\n36.1\n893.9\n413.7\n294.4\n6,318.60\n \n May\n2,639.9\n280.6\n1,042.8\n3963.37\n275.1\n17.9\n4,256.4\n57.9\n300.0\n0.0\n66.3\n36.1\n908.9\n397.0\n290.1\n6,312.76\n \n Jun\n2,734.1\n268.2\n1,019.8\n4022.09\n331.6\n24.0\n4,377.6\n67.9\n272.3\n0.0\n77.8\n44.3\n915.7\n407.7\n276.0\n6,439.33\n \n Jul\n2,676.5\n334.1\n987.4\n3997.93\n361.0\n33.8\n4,392.8\n58.2\n261.0\n0.0\n56.9\n45.8\n922.1\n393.1\n269.8\n6,399.63\n \n Aug\n2,836.2\n285.6\n1,009.5\n4131.35\n341.3\n29.3\n4,501.9\n67.0\n257.0\n0.0\n51.1\n40.9\n932.3\n390.2\n309.8\n6,550.23\n \n Sep\n2,915.9\n334.9\n987.8\n4238.62\n393.9\n25.8\n4,658.3\n62.9\n246.3\n0.0\n69.3\n35.9\n944.5\n382.3\n303.2\n6,702.64\n \n Oct\n3,056.4\n267.0\n940.9\n4264.34\n344.5\n25.0\n4,633.9\n60.0\n267.7\n0.0\n74.5\n27.9\n954.5\n397.2\n283.0\n6,698.61\n \n Nov\n3,186.7\n254.5\n896.9\n4338.05\n382.5\n28.0\n4,748.6\n29.3\n260.0\n0.0\n51.4\n28.2\n966.9\n350.5\n317.3\n6,752.22\n \n Dec\n3,271.3\n285.7\n896.0\n4452.99\n418.3\n19.6\n4,890.9\n47.1\n250.7\n1.8\n111.6\n48.2\n1,032.7\n376.7\n294.0\n7,053.81\n \n2017\n Jan\n3,205.0\n317.1\n981.8\n4503.86\n348.3\n30.4\n4,882.6\n36.9\n242.1\n0.0\n38.0\n40.4\n1,005.1\n395.7\n292.2\n6,933.07\n \n Feb\n3,267.0\n318.3\n977.1\n4562.41\n349.8\n32.6\n4,944.9\n47.5\n243.9\n0.0\n63.7\n42.9\n1,007.7\n398.5\n277.4\n7,026.43\n \n Mar\n3,370.3\n313.3\n965.3\n4648.90\n390.8\n64.2\n5,103.9\n50.6\n225.6\n1.8\n66.3\n41.5\n1,061.6\n422.4\n307.3\n7,281.03\n \n Apr\n3,496.9\n328.5\n960.8\n4786.12\n380.3\n54.3\n5,220.7\n52.8\n228.3\n0.0\n63.3\n41.7\n1,034.4\n489.1\n299.0\n7,429.28\n \n May\n3,534.8\n331.2\n979.7\n4845.74\n384.0\n53.4\n5,283.1\n50.8\n220.4\n0.0\n29.0\n41.9\n1,092.7\n486.1\n311.6\n7,515.61\n \n Jun\n3,792.5\n332.7\n949.8\n5075.08\n423.9\n51.7\n5,550.7\n54.9\n237.5\n0.0\n43.7\n45.8\n1,095.2\n533.5\n308.0\n7,869.22\n \n Jul\n3,786.1\n326.0\n1,021.7\n5133.85\n432.5\n56.2\n5,622.6\n55.3\n140.0\n0.0\n42.2\n35.3\n1,096.8\n513.6\n323.2\n7,829.03\n \n Aug\n4,198.3\n342.7\n1,010.3\n5551.37\n380.7\n66.3\n5,998.3\n58.3\n136.9\n0.0\n41.8\n22.5\n1,116.1\n531.8\n322.4\n8,228.06\n \n Sep\n4,561.7\n355.5\n1,003.7\n5920.98\n303.1\n32.7\n6,256.8\n42.3\n133.7\n0.0\n50.4\n31.9\n1,129.8\n472.8\n322.3\n8,440.05\n \n Oct\n4,771.6\n340.7\n927.8\n6040.15\n329.8\n21.1\n6,391.1\n50.8\n127.5\n0.0\n52.5\n41.7\n1,167.6\n432.4\n340.5\n8,604.14\n \n Nov\n5,036.5\n380.1\n918.9\n6335.46\n349.5\n12.7\n6,697.6\n54.0\n124.7\n0.0\n61.8\n59.9\n1,189.6\n417.7\n361.6\n8,966.85\n \n Dec\n5,143.9\n409.2\n850.3\n6403.38\n302.6\n72.1\n6,778.1\n56.5\n147.2\n113.7\n78.0\n5.7\n1,205.7\n508.3\n360.4\n9,253.57\n \nSource:Reserve Bank of Zimbabwe,2017\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\n \n \n \n18 \n \n \nForeign\nOther Assets\nNon Financial \nTOTAL\nEnd of\nNotes\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nMortgages\nGovernment\nOther\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2016\nJan\n0.13\n \n17.39\n52.89\n174.89\n10.0\n0.0\n76.6\n28.8\n0.0\n0.0\n332.8\n0.0\n424.2\n107.9\n119.7\n1,345.3\nFeb\n0.20\n \n18.23\n51.29\n188.70\n9.2\n0.0\n65.6\n29.2\n0.0\n0.0\n330.2\n0.0\n428.9\n110.4\n119.6\n1,351.6\nMar\n0.19\n \n15.08\n63.72\n189.76\n16.6\n0.0\n50.8\n28.5\n0.0\n0.0\n345.4\n0.0\n407.7\n105.9\n119.4\n1,343.1\nApr\n0.19\n \n9.46\n24.44\n186.02\n3.4\n0.0\n90.9\n27.6\n0.0\n0.0\n332.5\n0.0\n406.6\n111.4\n119.2\n1,311.8\nMay\n0.14\n \n7.35\n65.79\n148.67\n5.5\n0.0\n93.3\n26.8\n0.0\n0.0\n339.8\n0.0\n421.5\n114.2\n122.3\n1,345.3\nJun\n0.18\n \n12.92\n66.94\n200.92\n5.2\n0.0\n103.7\n25.9\n0.0\n0.0\n353.3\n0.0\n402.0\n107.4\n119.3\n1,397.7\nJul\n0.16\n \n8.30\n63.25\n162.33\n5.7\n0.0\n101.6\n33.4\n0.0\n0.0\n346.8\n0.0\n426.1\n107.3\n123.8\n1,378.9\nAug\n0.20\n \n7.54\n84.78\n136.50\n4.1\n0.0\n95.1\n32.3\n0.0\n0.0\n353.4\n0.0\n416.6\n105.8\n123.4\n1,359.7\nSep\n0.21\n \n4.16\n67.01\n165.80\n3.8\n0.0\n95.5\n29.0\n0.0\n0.0\n354.4\n0.0\n417.1\n105.4\n123.3\n1,365.6\nOct\n0.12\n \n7.23\n52.19\n191.21\n6.8\n0.0\n100.9\n26.3\n0.0\n0.0\n356.9\n0.0\n427.0\n108.8\n123.4\n1,400.9\nNov\n0.14\n \n6.44\n54.76\n214.60\n3.9\n0.0\n114.9\n22.3\n0.0\n0.0\n381.2\n0.0\n444.9\n108.8\n124.7\n1,476.7\nDec\n1.72\n \n8.05\n89.65\n243.77\n5.1\n0.0\n91.3\n21.0\n0.0\n0.0\n379.8\n0.0\n430.2\n110.0\n124.4\n1,505.1\n2017\nJan\n2.35\n \n7.02\n109.63\n157.70\n4.3\n0.0\n123.7\n20.8\n0.0\n0.0\n389.1\n0.0\n406.1\n106.3\n124.4\n1,451.4\nFeb\n1.19\n \n7.29\n69.26\n155.60\n7.4\n0.0\n162.0\n20.1\n0.0\n0.0\n394.4\n0.0\n410.1\n109.0\n124.2\n1,460.4\nMar\n1.65\n \n3.07\n35.53\n177.16\n4.0\n0.0\n164.2\n18.7\n0.0\n0.0\n404.4\n0.0\n413.0\n102.8\n124.2\n1,448.6\nApr\n0.74\n \n3.56\n73.43\n173.28\n9.8\n0.0\n158.6\n17.8\n0.0\n0.0\n392.5\n0.0\n432.3\n109.7\n125.1\n1,496.8\nMay\n0.92\n \n3.94\n81.47\n152.32\n10.8\n0.0\n168.2\n20.3\n0.0\n0.0\n394.4\n0.0\n451.1\n105.9\n126.1\n1,515.4\nJun\n0.34\n \n3.66\n65.90\n208.75\n9.8\n0.0\n165.3\n19.0\n0.0\n0.0\n387.6\n0.0\n452.9\n109.6\n126.0\n1,548.8\nJul\n0.39\n \n3.93\n105.83\n164.58\n9.2\n0.0\n168.4\n17.2\n0.0\n0.0\n391.9\n0.0\n451.9\n110.9\n127.3\n1,551.5\nAug\n0.44\n \n3.09\n142.75\n152.03\n3.9\n0.0\n186.7\n16.3\n0.0\n0.0\n409.3\n0.0\n465.5\n104.7\n127.2\n1,611.9\nSep\n0.56\n \n1.82\n108.41\n116.96\n6.7\n0.0\n193.0\n16.1\n0.0\n0.0\n412.7\n0.0\n475.2\n113.4\n130.1\n1,574.8\nOct\n0.57\n \n1.15\n145.68\n110.02\n14.8\n0.0\n193.9\n15.4\n0.0\n0.0\n420.7\n0.0\n493.6\n149.9\n130.4\n1,676.0\nNov\n0.75\n \n0.90\n138.84\n128.42\n8.7\n0.0\n193.6\n18.8\n0.0\n0.0\n420.9\n0.0\n489.0\n160.4\n133.0\n1,693.3\nDec\n1.05\n \n2.59\n170.60\n134.30\n9.1\n0.0\n195.1\n26.8\n0.0\n0.0\n402.3\n0.0\n516.8\n163.2\n135.5\n1,757.3\nSource:Reserve Bank of Zimbabwe,2017\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations, \nTABLE 6.1: BUILDING SOCIETIES -ASSETS\nUS$ millions\nDebt Securities\nLoans and Advances\n \n \n \n19 \n \n \n \nDebt Securities\nForeign Liabilities\nCapital\nOther\nTOTAL\nand\nLiablities\nEnd of\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2016\n Jan\n297.8\n534.3\n832.14\n47.2\n0.1\n879.4\n22.6\n43.3\n0.0\n74.7\n0.0\n292.9\n32.3\n1,345.27\n \n Feb\n305.9\n533.4\n839.34\n37.2\n0.1\n876.6\n23.2\n42.3\n0.0\n80.7\n0.9\n296.3\n31.5\n1,351.56\n \n Mar\n314.1\n531.2\n845.28\n25.1\n0.0\n870.4\n23.6\n37.0\n0.0\n80.9\n0.8\n284.3\n46.0\n1,343.06\n \n Apr\n317.6\n520.8\n838.41\n25.1\n0.0\n863.5\n23.7\n36.9\n0.0\n74.6\n0.5\n278.8\n33.9\n1,311.79\n \n May\n330.8\n480.5\n811.31\n34.1\n0.0\n845.5\n25.0\n36.2\n0.0\n77.2\n0.5\n315.5\n45.5\n1,345.27\n \n Jun\n313.1\n511.6\n824.71\n69.2\n0.0\n893.9\n24.4\n35.4\n0.0\n81.5\n3.1\n313.1\n46.3\n1,397.68\n \n Jul\n313.4\n490.8\n804.18\n74.0\n15.5\n893.7\n24.8\n35.7\n0.0\n72.7\n0.4\n318.2\n33.4\n1,378.87\n \n Aug\n278.7\n503.6\n782.31\n71.0\n16.1\n869.4\n25.1\n33.6\n0.0\n76.5\n0.4\n321.5\n33.3\n1,359.67\n \n Sep\n270.8\n507.3\n778.11\n85.7\n16.4\n880.2\n22.5\n30.5\n0.0\n82.4\n0.3\n314.1\n35.5\n1,365.62\n \n Oct\n267.3\n525.9\n793.19\n89.2\n16.4\n898.9\n24.6\n29.4\n0.0\n87.8\n0.4\n319.7\n40.1\n1,400.87\n \n Nov\n311.8\n529.0\n840.82\n89.4\n16.5\n946.7\n25.8\n29.6\n0.0\n90.8\n0.6\n326.4\n56.8\n1,476.66\n \n Dec\n339.5\n532.9\n872.41\n92.6\n16.6\n981.6\n27.0\n28.8\n0.0\n79.9\n0.5\n330.3\n56.9\n1,505.10\n \n2017\n Jan\n326.2\n522.1\n848.23\n81.5\n16.6\n946.4\n25.0\n29.1\n0.0\n66.5\n0.7\n332.1\n51.7\n1,451.40\n \n Feb\n326.1\n534.4\n860.48\n76.2\n16.6\n953.3\n23.1\n27.0\n0.0\n62.4\n0.5\n334.5\n59.7\n1,460.43\n \n Mar\n319.7\n523.2\n842.91\n70.2\n16.7\n929.9\n20.9\n24.0\n0.0\n68.5\n0.3\n340.7\n64.3\n1,448.62\n \n Apr\n399.6\n527.1\n926.64\n70.6\n16.0\n1,013.2\n21.8\n22.8\n0.0\n54.0\n0.2\n322.5\n62.3\n1,496.83\n \n May\n378.0\n536.0\n914.03\n70.7\n16.1\n1,000.8\n21.8\n23.0\n0.0\n66.2\n0.4\n325.8\n77.4\n1,515.45\n \n Jun\n401.8\n544.4\n946.24\n70.7\n16.5\n1,033.4\n22.0\n22.0\n0.0\n65.2\n0.8\n330.0\n75.4\n1,548.79\n \n Jul\n430.3\n531.5\n961.78\n70.4\n16.1\n1,048.3\n22.2\n22.2\n0.0\n57.3\n0.3\n334.5\n66.8\n1,551.54\n \n Aug\n495.3\n546.5\n1041.77\n70.6\n16.3\n1,128.6\n24.0\n21.3\n0.0\n37.4\n0.4\n328.9\n71.4\n1,611.94\n \n Sep\n488.5\n517.9\n1006.46\n80.3\n16.7\n1,103.4\n24.8\n17.4\n0.0\n17.0\n0.2\n334.0\n78.0\n1,574.82\n \n Oct\n583.1\n475.2\n1058.27\n80.9\n16.2\n1,155.4\n23.4\n26.4\n0.0\n20.6\n0.3\n338.0\n111.8\n1,675.97\n \n Nov\n570.3\n473.5\n1043.76\n105.4\n16.3\n1,165.4\n23.7\n26.6\n0.0\n22.7\n0.3\n341.5\n113.0\n1,693.33\n \n Dec\n608.2\n496.6\n1104.85\n105.2\n16.5\n1,226.6\n23.4\n25.9\n0.0\n22.7\n0.5\n371.7\n86.7\n1,757.28\n \nSource:Reserve Bank of Zimbabwe,2017\nAmounts Owing to\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\nUS$ millions\n \n \n \n20 \n \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISATIONS\n \n \n \n \n2016\nJan\n577,684.4\n35,033.6\n35,535.9\n379,618.2\n13,329.2\n68,325.8\n476,677.0\n158,150.5\n410,992.6\n40,295.6\n535,379.3\n380.2\n2,731,402.2\nFeb\n539,562.8\n35,885.1\n37,857.4\n374,835.1\n13,285.9\n63,301.8\n473,970.3\n155,889.4\n415,520.6\n40,862.5\n531,789.5\n365.3\n2,683,125.7\nMar\n586,349.7\n39,180.5\n41,037.5\n371,809.6\n13,397.9\n63,061.4\n444,769.1\n156,209.2\n402,900.5\n44,606.7\n588,882.7\n410.7\n2,752,615.5\nApr\n527,545.8\n46,612.5\n40,624.2\n379,572.0\n13,428.1\n69,469.7\n437,795.4\n142,682.1\n421,335.6\n43,921.4\n645,037.3\n9,410.0\n2,777,434.0\nMay\n522,239.8\n40,194.4\n38,496.8\n358,042.5\n13,280.8\n65,381.2\n439,295.5\n145,180.0\n401,304.1\n41,908.5\n651,719.3\n9,579.0\n2,726,621.9\nJun\n510,016.8\n39,316.9\n36,866.1\n361,138.1\n12,764.5\n68,850.3\n433,145.3\n143,595.6\n476,484.5\n42,179.6\n650,071.4\n9,739.2\n2,784,168.3\nJul\n501,744.6\n43,266.6\n12,746.6\n287,960.5\n11,403.0\n64,344.7\n423,354.4\n141,639.6\n489,050.6\n40,059.9\n652,366.8\n9,804.6\n2,677,741.9\nAug\n498,489.6\n43,265.5\n26,005.4\n295,108.0\n11,957.4\n69,959.8\n423,824.7\n139,556.7\n458,763.3\n44,237.3\n636,726.8\n10,497.1\n2,658,391.5\nSep\n487,504.2\n42,900.7\n20,644.2\n338,165.8\n11,960.4\n154,582.0\n409,891.0\n142,259.6\n400,059.8\n40,609.7\n636,000.8\n11,273.3\n2,695,851.5\nOct\n513,303.7\n44,348.8\n23,814.1\n333,709.5\n11,968.6\n70,984.3\n418,465.3\n152,571.6\n456,867.4\n45,511.4\n637,546.1\n11,122.2\n2,720,213.0\nNov\n526,709.8\n42,580.2\n22,481.4\n338,556.1\n11,358.7\n72,491.9\n413,849.2\n152,092.3\n464,279.4\n42,762.1\n641,080.5\n10,545.5\n2,738,787.0\nDec\n436,452.3\n41,297.5\n19,541.4\n311,503.1\n11,668.9\n327,576.0\n377,945.5\n134,516.0\n415,801.6\n36,867.2\n613,022.6\n10,287.7\n2,736,479.6\n2017\nJan\n448,344.7\n41,732.8\n22,069.3\n264,734.2\n12,019.3\n270,117.2\n350,757.1\n144,447.3\n394,945.0\n40,975.0\n591,245.7\n11,489.3\n2,592,877.1\nFeb\n436,206.2\n40,112.3\n24,467.5\n269,358.3\n12,146.8\n272,314.8\n361,416.8\n143,990.4\n373,445.1\n40,250.7\n568,686.3\n11,227.9\n2,553,623.0\nMar\n425,496.8\n54,688.4\n25,533.4\n275,500.1\n12,241.8\n290,985.3\n349,722.5\n159,101.0\n359,672.5\n37,864.1\n572,233.3\n13,047.7\n2,576,086.9\nApr\n426,696.6\n43,836.6\n18,145.2\n340,025.3\n12,219.1\n271,824.0\n360,945.8\n134,101.0\n350,475.1\n42,208.4\n571,000.5\n12,492.9\n2,583,970.5\nMay\n428,874.0\n43,427.0\n16,689.0\n322,695.4\n12,252.6\n269,976.3\n360,929.9\n117,479.9\n354,102.7\n41,337.5\n569,798.9\n11,923.7\n2,549,487.0\nJun\n431,677.5\n45,018.0\n16,989.2\n311,641.4\n14,435.6\n266,917.5\n343,590.2\n126,542.8\n417,469.8\n37,849.5\n595,749.5\n12,001.6\n2,619,882.5\nJul\n459,128.0\n52,500.1\n11,717.0\n255,319.0\n14,541.0\n255,591.2\n311,364.4\n131,420.5\n422,799.8\n39,630.7\n609,112.5\n14,464.3\n2,577,588.5\nAug\n457,861.9\n52,622.6\n11,736.0\n262,602.7\n17,438.9\n256,802.3\n313,868.5\n138,714.9\n420,653.6\n41,089.3\n617,686.4\n15,194.2\n2,606,271.3\nSep\n457,157.2\n48,477.1\n12,117.9\n340,506.4\n21,660.1\n265,082.3\n331,929.6\n124,822.8\n393,491.3\n41,117.0\n619,867.0\n16,061.2\n2,672,289.8\nOct\n460,475.1\n46,588.0\n12,273.6\n329,020.8\n21,810.6\n262,118.2\n317,587.0\n126,041.6\n383,374.3\n41,351.4\n634,561.2\n16,061.2\n2,651,263.1\nNov\n477,486.1\n46,318.3\n12,005.2\n323,990.0\n21,811.0\n261,421.1\n316,225.5\n123,307.2\n379,542.7\n32,215.3\n649,034.3\n16,061.2\n2,659,418.0\nDec\n489,695.6\n54,162.9\n10,119.0\n334,030.3\n21,844.6\n269,399.3\n307,802.0\n126,719.0\n375,161.7\n31,701.6\n621,421.9\n13,938.1\n2,655,996.0\nSource:Reserve Bank of Zimbabwe,2017\n/1 Including the only merchant bank still in operation.\nTABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES/1\nUS$ ('000)\n \n \n \n21 \n \n \n \nEND OF\nAGRICULTURE CONSTRUCTION COMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS ORGANISATIONS\n2016\nJan\n231,827.3\n101,724.1\n93,544.2\n465,089.7\n325,203.1\n977,272.1\n345,812.2\n62,026.3\n1,083,702.7\n61,755.6\n618,080.1\n58,808.7\n4,424,846.1\nFeb\n226,568.3\n105,747.9\n97,684.4\n518,411.4\n339,839.0\n896,869.2\n326,026.0\n59,381.3\n1,047,904.6\n63,248.3\n634,478.3\n63,017.8\n4,379,176.4\nMar\n243,546.9\n102,238.4\n116,471.1\n517,089.2\n362,058.8\n879,340.8\n368,689.6\n60,514.0\n1,073,567.6\n62,839.4\n642,779.4\n61,037.6\n4,490,172.8\nApr\n243,151.6\n102,234.0\n112,219.5\n525,070.9\n360,299.5\n907,855.6\n335,068.6\n71,721.0\n1,156,122.6\n63,858.0\n628,901.1\n61,087.0\n4,567,589.5\nMay\n236,180.5\n97,008.6\n120,726.3\n582,943.5\n371,034.5\n923,580.9\n356,500.9\n99,176.4\n1,107,956.8\n61,396.5\n607,501.4\n64,066.3\n4,628,072.5\nJun\n218,386.8\n103,914.2\n134,181.8\n569,660.7\n362,400.2\n973,333.3\n316,490.8\n58,856.9\n1,128,688.7\n72,063.3\n601,813.8\n61,833.2\n4,601,623.8\nJul\n207,280.2\n99,727.9\n138,781.2\n593,284.9\n348,779.7\n1,035,697.0\n370,456.9\n63,986.1\n1,114,413.7\n65,391.9\n622,329.2\n69,058.9\n4,729,187.8\nAug\n233,004.5\n97,248.8\n153,590.8\n596,904.8\n365,366.8\n997,123.0\n356,522.0\n64,413.7\n1,227,979.0\n67,005.8\n621,307.8\n73,076.2\n4,853,543.2\nSep\n236,724.3\n101,117.1\n155,483.5\n616,359.8\n346,375.9\n1,046,195.2\n366,312.8\n57,885.0\n1,365,673.5\n73,805.9\n595,219.8\n70,669.7\n5,031,822.4\nOct\n239,373.9\n107,235.7\n160,641.2\n578,487.3\n344,681.9\n988,274.7\n363,815.8\n63,998.0\n1,384,083.2\n76,834.0\n593,827.7\n73,608.8\n4,974,862.2\nNov\n318,652.7\n107,089.5\n189,581.3\n597,290.0\n329,147.3\n992,135.7\n411,467.8\n150,691.6\n1,337,295.6\n79,405.2\n591,639.0\n71,016.3\n5,175,412.0\nDec\n258,814.9\n110,009.2\n202,260.4\n593,362.2\n348,457.0\n1,020,795.0\n382,615.8\n81,542.7\n1,466,867.2\n82,186.5\n592,932.5\n76,874.9\n5,216,718.4\n \n2017\nJan\n236,437.3\n108,552.5\n230,965.4\n618,213.5\n339,580.3\n1,002,775.4\n382,746.3\n86,115.0\n1,393,941.2\n82,670.8\n589,549.9\n85,602.3\n5,157,150.0\nFeb\n254,463.9\n112,294.4\n226,877.9\n613,080.1\n312,948.5\n997,181.2\n393,542.8\n121,798.7\n1,402,647.6\n91,521.7\n604,325.0\n84,653.3\n5,215,335.3\nMar\n299,519.0\n118,530.1\n232,990.6\n626,986.6\n308,297.9\n1,049,255.7\n402,864.2\n170,835.1\n1,400,323.5\n102,287.7\n610,024.4\n91,046.0\n5,412,960.9\nApr\n281,219.8\n117,174.3\n235,093.5\n687,962.2\n307,711.4\n1,013,362.6\n400,018.9\n190,005.8\n1,432,953.1\n110,258.7\n650,595.9\n102,681.0\n5,529,037.2\nMay\n301,531.2\n113,685.5\n220,541.8\n679,781.4\n320,878.2\n1,019,941.1\n417,418.5\n175,383.4\n1,454,718.3\n108,366.5\n667,019.7\n71,770.2\n5,551,035.8\nJun\n295,920.4\n109,938.0\n248,436.3\n712,648.0\n334,368.7\n1,121,023.5\n408,604.0\n185,262.3\n1,521,876.3\n107,327.1\n697,997.7\n74,195.4\n5,817,597.8\nJul\n309,864.7\n126,628.5\n262,827.7\n587,617.1\n341,371.5\n1,143,423.8\n423,846.6\n191,273.6\n1,599,344.4\n99,509.8\n680,622.6\n76,164.4\n5,842,494.6\nAug\n302,611.3\n149,014.9\n296,550.6\n914,686.8\n346,236.8\n1,131,207.5\n453,584.0\n169,521.2\n1,562,637.2\n111,394.6\n746,644.5\n90,999.4\n6,275,088.8\nSep\n348,786.3\n146,383.0\n286,092.4\n796,517.1\n340,224.7\n1,072,979.9\n571,373.7\n211,077.0\n1,705,640.6\n122,645.6\n747,874.4\n72,255.0\n6,421,849.6\nOct\n345,521.0\n138,274.9\n238,975.9\n778,597.1\n355,135.9\n1,138,203.7\n565,046.4\n259,285.2\n1,694,691.4\n123,908.8\n741,652.0\n72,255.0\n6,451,547.3\nNov\n336,339.3\n144,708.5\n239,524.3\n927,820.8\n362,515.4\n986,824.6\n629,010.4\n250,132.7\n1,694,043.5\n131,768.3\n761,400.5\n72,255.0\n6,536,343.3\nDec\n317,794.8\n160,261.7\n284,829.7\n890,549.4\n375,616.4\n1,073,707.0\n686,933.4\n257,197.2\n1,712,823.9\n143,466.1\n711,031.6\n62,444.8\n6,676,655.9\nSource: Reserve Bank of Zimbabwe,2017\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \nUS$ ('000)\n \n22 \n \n \nEnd Period\nNominal Lending \nRates 1\nIndividuals \nCorporate\n2016 \nJan\n6.00-22.00\n12.08\n7.38\nFeb\n4.00-22.00\n11.48\n7.29\nMar\n4.00-22.00\n11.44\n7.16\nApr\n4.00-22.00\n11.50\n7.20\nMay\n4.00-18.00\n11.43\n7.35\nJun\n4.00-18.00\n11.40\n7.48\nJul\n4.00-18.00\n10.69\n6.79\nAug\n4.00-18.00\n10.67\n6.84\nSep\n4.00-18.00\n10.66\n6.95\nOct\n4.00-18.00\n10.70\n6.93\nNov\n4.00-18.00\n10.69\n6.99\nDec\n4.00-18.00\n10.59\n6.87\n2017 \nJan\n4.00-18.00\n10.61\n6.68\nFeb\n4.00-18.00\n10.06\n6.52\nMar\n4.00-18.00\n9.12\n7.02\nApr\n4.00-18.00\n9.25\n7.02\nMay\n4.00-18.00\n9.17\n7.03\nJun\n4.00-18.00\n9.01\n7.05\nJul\n4.00-18.00\n8.94\n7.05\nAug\n4.00-18.00\n8.88\n6.95\nSep\n4.45-18.00\n8.86\n7.01\nOct\n4.45-18.00\n9.66\n7.06\nNov\n4.45-18.00\n9.66\n7.03\nDec\n4.45-18.00\n9.39\n7.00\nSource:Reserve Bank of Zimbabwe, 2017\nNotes\nTABLE 8.1: LENDING RATES (percent per annum)\n1. Nominal lending rates depict the range of rates quoted by banks.\nCommercial Banks\nRates\n \n \n \n23 \n \n \nEND OF\nSAVINGS\n3 MONTHS\n2016 \nJan\n0.50-8.00\n0.75-17.00\nFeb\n0.50-8.00\n0.75-17.00\nMar\n0.50-8.00\n0.75-17.00\nApr\n0.50-8.00\n0.75-17.00\nMay\n0.50-8.00\n0.75-17.00\nJun\n0.50-6.00\n0.75-17.00\nJul\n0.50-6.00\n0.75-17.00\nAug\n0.50-6.00\n1.00-17.00\nSep\n0.50-6.00\n1.00-17.00\nOct\n0.50-6.00\n1.00-17.00\nNov\n0.50-6.00\n1.00-17.00\nDec\n0.50-6.00\n1.00-17.00\n2017 \nJan\n0.50-6.00\n1.00-17.00\nFeb\n0.50-6.00\n1.00-17.00\nMar\n0.50-6.00\n1.00-17.00\nApr\n0.50-6.00\n1.00-17.00\nMay\n0.50-6.00\n1.00-9.50**\nJun\n0.50-6.00\n1.00-12.00\nJul\n0.50-6.00\n1.00-12.00\nAug\n0.50-6.00\n1.00-12.00\nSep\n0.50-12.00\n0.75-8.00\nOct\n0.50-12.00\n0.75-8.00\nNov\n0.50-12.00\n0.75-8.00\nDec\n0.50-12.00\n0.75-8.00\n Source:Reserve Bank of Zimbabwe, 2017\n* Deposit rates depict the range of rates qouted by banks. \n **Banks have adjusted their costs of holding deposits following the call by the RBZ to reduce lending rates. \nTABLE 8.2 : BANK DEPOSIT RATES (percent per annum)\nCOMMERCIAL BANKS\n \n 24 \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHOUSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNICATION\nRECREATION \n&\nEDUCATION\nRESTAURANTS \n&\nMISC.\nTOTAL NON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.38\n6.05\n17.74\n9.91\n2.16\n9.76\n3.41\n2.1\n5.67\n1.38\n3.91\n66.47\n33.53\n100\n2016 \nJan\n0.05\n-0.02\n-0.04\n-0.30\n-0.15\n-0.37\n0.00\n-0.18\n0.00\n-0.16\n-0.29\n-0.13\n0.13\n-0.05\nFeb\n-0.14\n0.00\n-0.12\n-0.19\n-0.17\n-0.37\n-0.13\n-0.01\n0.00\n-0.17\n0.06\n-0.14\n-0.03\n-0.10\nMar\n-0.15\n-0.17\n-1.03\n-0.73\n-0.13\n-0.30\n0.42\n-0.04\n3.36\n-0.62\n-0.60\n-0.11\n-0.13\n-0.12\nApr\n0.03\n-0.14\n-0.02\n-0.32\n0.00\n0.07\n-0.08\n-0.02\n-0.01\n-0.09\n-0.35\n-0.08\n-0.51\n-0.21\nMay\n-0.29\n-0.22\n0.12\n-0.11\n-0.18\n-0.11\n-1.61\n0.06\n0.00\n0.02\n-0.33\n-0.12\n-0.49\n-0.24\nJun\n0.07\n-0.21\n0.58\n0.03\n0.15\n-0.08\n-0.01\n-0.23\n2.65\n0.31\n0.09\n0.44\n-0.35\n0.19\nJul\n0.01\n-0.15\n0.04\n0.05\n-0.15\n-0.03\n-0.36\n0.09\n0.00\n0.04\n-0.30\n-0.03\n-0.52\n-0.19\nAug\n-0.06\n-0.22\n0.00\n-0.03\n-0.02\n-0.13\n-0.02\n-0.10\n0.00\n0.01\n0.13\n-0.04\n-0.31\n-0.13\nSep\n0.10\n-0.03\n-1.11\n-0.27\n-0.03\n-0.08\n-0.09\n-0.26\n0.00\n0.01\n0.10\n-0.34\n-0.06\n-0.26\nOct\n-0.05\n-0.24\n-0.13\n0.06\n-0.03\n-0.06\n0.00\n-0.01\n0.00\n-0.06\n0.17\n-0.05\n0.40\n0.09\nNov\n0.06\n-0.09\n0.00\n0.10\n-0.07\n0.33\n0.00\n0.18\n-2.46\n-0.01\n0.14\n-0.22\n0.54\n0.02\nDec\n-0.06\n0.09\n-0.59\n0.46\n0.09\n-0.27\n0.00\n0.29\n0.00\n0.16\n0.34\n-0.09\n0.38\n0.06\n2017 \nJan\n0.00\n-0.15\n0.10\n0.34\n-0.15\n-0.75\n0.44\n0.27\n0.00\n0.29\n0.08\n-0.03\n0.80\n0.23\nFeb\n-0.09\n-0.14\n0.13\n0.70\n-0.03\n0.11\n0.00\n-0.04\n0.00\n0.18\n0.52\n0.17\n1.56\n0.61\nMar\n0.15\n0.03\n-0.07\n0.64\n0.11\n0.21\n-0.02\n0.18\n0.00\n0.01\n0.36\n0.15\n-0.21\n0.03\nApr\n-0.11\n0.02\n0.04\n0.06\n-0.04\n0.00\n0.05\n0.02\n2.02\n0.34\n-0.07\n0.25\n-0.36\n0.05\nMay\n0.13\n0.09\n-0.01\n0.02\n0.13\n0.04\n0.00\n-0.21\n0.00\n-0.39\n-0.09\n0.01\n0.07\n0.03\nJun\n0.21\n0.03\n-0.82\n0.38\n-0.03\n-0.18\n0.00\n0.18\n0.00\n0.29\n0.33\n-0.14\n-0.45\n-0.24\nJul\n0.19\n0.01\n0.01\n-0.06\n0.01\n-0.23\n-0.08\n0.05\n-2.81\n1.10\n0.11\n-0.33\n-0.42\n-0.36\nAug\n-0.18\n0.10\n0.06\n0.05\n0.03\n0.00\n0.03\n0.13\n0.00\n0.00\n0.06\n0.03\n-0.47\n-0.13\nSep\n0.02\n0.45\n0.24\n1.10\n0.07\n-0.31\n0.14\n0.64\n0.00\n0.05\n0.12\n0.25\n0.66\n0.38\nOct\n0.63\n1.44\n0.24\n3.49\n1.07\n1.08\n0.37\n3.08\n0.00\n0.45\n2.66\n1.20\n2.27\n1.54\nNov\n0.28\n0.62\n0.06\n1.32\n0.38\n0.29\n-0.04\n1.14\n-1.43\n-0.72\n1.10\n0.26\n1.74\n0.74\nDec\n0.28\n0.72\n-0.43\n0.45\n0.01\n0.29\n-0.01\n0.78\n0.00\n0.49\n0.74\n0.16\n1.29\n0.53\nSource:Zimstat, 2017\nNON-FOOD INFLATION\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n( December 2012 = 100)\n \n \n \n25 \n \n \nF OOD \nIN F LA TION\nA LC OHOLIC \nC LOTHIN G\nHOUS IN G, \nWA TER ,\nF UR N ITUR E\nM IS C .\nF OOD & \nB EVER A GES \n& \nELEC TR IC T\nY, GA S\nA N D\nR EC R EA TION \n&\nR ES TA UR A N TS \n&\nGOOD S &\nTOTA L N ON\nN ON \nA LC OHOLIC \nA LL\n& TOB A C C O\nF OOTWEA R\n& OTHER\nEQUIP M EN T\nC ULTUR E\nHOTELS\nS ER VIC ES\nF OOD\nB EVER A GES\nITEM S\nF UELS\n2016\nJan\n-0.79\n-2.41\n-4.40\n-3.27\n0.37\n-2.66\n-0.93\n-1.09\n11.17\n0.75\n-1.01\n-1.34\n-3.96\n-2.19\nFeb\n-1.16\n-2.06\n-4.43\n-3.35\n0.22\n-2.62\n-0.97\n0.21\n11.17\n0.96\n-1.17\n-1.35\n-4.04\n-2.22\nMar\n-1.43\n-1.97\n-5.36\n-4.04\n0.14\n-2.92\n-0.55\n-1.00\n14.91\n0.21\n-1.86\n-1.43\n-4.13\n-2.31\nApr\n-1.40\n-1.40\n-2.11\n-3.91\n0.19\n-2.71\n-0.50\n-0.95\n14.21\n-0.28\n-2.17\n-0.51\n-4.02\n-1.64\nMay\n-1.52\n-1.21\n-2.17\n-3.77\n-0.10\n-2.57\n-2.09\n-0.78\n14.21\n-0.18\n-2.07\n-0.53\n-4.13\n-1.69\nJun\n-1.80\n-1.36\n-1.58\n-3.67\n0.21\n-2.71\n-2.10\n-0.92\n17.24\n0.20\n-2.09\n-0.09\n-4.04\n-1.37\nJul\n-1.71\n-1.56\n-0.98\n-2.83\n-0.09\n-2.66\n-2.43\n-0.69\n9.09\n0.27\n-2.42\n-0.59\n-3.76\n-1.60\nAug\n-1.50\n-1.77\n-1.01\n-2.73\n-0.07\n-2.50\n-2.39\n-0.54\n9.09\n0.42\n-2.21\n-0.54\n-3.34\n-1.43\nSep\n-1.36\n-1.79\n-1.50\n-2.48\n-0.14\n-2.17\n-2.10\n-0.78\n9.09\n-0.84\n-1.82\n-0.58\n-2.94\n-1.33\nOct\n-0.97\n-1.73\n-1.54\n-2.10\n-0.76\n-1.77\n-2.13\n-0.65\n9.09\n-0.72\n-1.77\n-0.45\n-2.03\n-0.95\nNov\n-0.77\n-1.63\n-1.53\n-1.77\n-0.83\n-1.37\n-1.91\n-0.45\n3.48\n-0.70\n-1.62\n-0.89\n-1.54\n-1.09\nDec\n-0.42\n-1.39\n-2.29\n-1.25\n-0.67\n-1.39\n-1.87\n-0.24\n3.49\n-0.47\n-0.99\n-0.92\n-0.95\n-0.93\n2017\nJan\n-0.47\n-1.52\n-2.16\n-0.62\n-0.68\n-1.76\n-1.44\n0.20\n3.49\n-0.02\n-0.62\n-0.82\n-0.30\n-0.65\nFeb\n-0.42\n-1.66\n-1.91\n0.26\n-0.53\n-1.29\n-1.31\n0.18\n3.49\n0.24\n-0.05\n-0.51\n1.29\n0.06\nMar\n-0.13\n-1.45\n-0.95\n1.64\n-0.30\n-0.79\n-1.74\n0.40\n0.12\n0.87\n0.92\n-0.25\n1.21\n0.21\nApr\n-0.26\n-1.29\n-0.89\n2.03\n-0.33\n-0.86\n-1.61\n0.44\n2.16\n1.30\n1.21\n0.08\n1.35\n0.48\nMay\n0.15\n-0.98\n-1.01\n2.16\n-0.01\n-0.71\n0.00\n0.17\n2.16\n0.88\n1.46\n0.21\n1.92\n0.75\nJun\n0.29\n-0.74\n-2.39\n2.52\n-0.19\n-0.81\n0.00\n0.59\n-0.48\n0.86\n1.70\n-0.37\n1.82\n0.31\nJul\n0.47\n-0.58\n-2.43\n2.41\n-0.03\n-1.01\n0.29\n0.55\n-3.28\n1.93\n2.12\n-0.67\n1.92\n0.14\nAug\n0.35\n-0.26\n-2.37\n2.50\n0.02\n-0.88\n0.33\n0.78\n-3.28\n1.92\n2.05\n-0.60\n1.76\n0.14\nSep\n0.27\n0.22\n-1.05\n3.91\n0.12\n-1.11\n0.57\n1.69\n-3.28\n1.97\n2.07\n-0.01\n2.49\n0.78\nOct\n0.95\n1.91\n-0.68\n7.47\n1.22\n0.02\n0.94\n4.84\n-3.28\n2.49\n4.61\n1.25\n4.40\n2.24\nNov\n1.17\n2.62\n-0.62\n8.78\n1.67\n-0.02\n0.89\n5.83\n-2.25\n1.76\n5.62\n1.74\n5.65\n2.97\nDec\n1.51\n3.27\n-0.45\n8.77\n1.57\n0.55\n0.89\n6.35\n-2.26\n2.09\n6.04\n2.00\n6.60\n3.46\nSource: Zimstat, 2017\nC OM M UN IC A TION\nTR A N S P OR T\nHEA LTH\nED UC A TION\nN ON -F OOD IN F LA TION\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n(December 2012 = 100)\n \n \n \n26 \n \n \n \n \n(US$ millions)\nEnd Period\n2000\n2001\n2002\n2003\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\nLong-Term External Debt\n3,227\n3,255\n3,327\n3,644\n3,927\n3,805\n3,965\n4,032\n4,464\n4,951\n5,175\n6,096\n6,607\n7,370\n8,444\n8,426\n8,656\n8,977\nGovernment\n2,249\n2,328\n2,376\n2,617\n2,844\n2,895\n3,024\n3,054\n3,464\n4,037\n4,095\n4,638\n4,929\n5,012\n4,522\n5,293\n5,365\n5,638\nBilateral Creditors\n1,050\n1,115\n1,107\n1,255\n1,455\n1,438\n1,520\n1,520\n1,863\n2,308\n2,325\n2,597\n2,694\n2,928\n2,445\n3,310\n3,479\n3,654\nMultilateral Creditors\n1,199\n1,213\n1,269\n1,362\n1,389\n1,457\n1,504\n1,524\n1,592\n1,729\n1,770\n2,041\n2,235\n2,084\n2,078\n1,982\n1,886\n1,984\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n0\n10\n10\n0\n0\n0\n0\n0\n0\n0\n0\n0\nPublic Enterprises\n534\n568\n616\n698\n714\n709\n766\n790\n825\n857\n938\n1,092\n1,198\n1,356\n1,661\n1,220\n1,370\n1,419\nBilateral Creditors\n301\n315\n351\n403\n442\n439\n464\n474\n497\n453\n238\n711\n703\n858\n1,155\n760\n779\n837\nMultilateral Creditors\n233\n253\n265\n295\n272\n270\n302\n316\n327\n403\n700\n382\n495\n498\n506\n460\n591\n582\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\nMonetary Authorities\n292\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\n120\n110\n0\n0\nMultilateral Creditors - IMF\n292\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\n120\n110\n0\n0\nPrivate\n152\n67\n56\n41\n78\n57\n45\n51\n35\n57\n142\n366\n480\n1,002\n2,261\n1,913\n1,920\n1,960\nShort-Term External Debt\n298\n167\n183\n169\n144\n173\n281\n387\n226\n1,198\n1,382\n1,289\n890\n1,564\n2,394\n2,258\n2,304\n2,271\nSupplier's Credits\n42\n13\n26\n51\n69\n107\n122\n178\n41\n193\n286\n134\n30\n0\n0\n0\n0\n0\nReserve Bank\n642\n642\n618\n614\n614\n587\n587\n573\n490\nPrivate\n256\n154\n157\n118\n75\n66\n159\n209\n185\n363\n454\n537\n246\n950\n1,807\n1,671\n1,731\n1,781\nTotal External Debt\n3,525\n3,422\n3,510\n3,812\n4,071\n3,978\n4,246\n4,419\n4,690\n6,149\n6,557\n7,385\n7,497\n8,934\n10,838\n10,684\n10,960\n11,299\nSource: Ministry of Finance & Economic Development, 2017; & Reserve Bank of Zimbabwe, 2017\nTABLE 10: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR (INCLUDING ALL ARREARS)\n \n27 \n \n \n \nSOUTH ARFICAN\nBOTSWANA\nJAPANESE\nEURO/2\nPOUND\nEND OF\nRAND/1\nPULA/1\nYEN/1\nSTERLING/2\n2016\nJan\n16.0900\n11.4300\n120.5500\n1.0905\n1.4493\nfeb\n16.1100\n11.2700\n113.0300\n1.0990\n1.3880\nMar\n15.4500\n11.1000\n112.9500\n1.1100\n1.4200\nApr\n14.6200\n10.7575\n109.6825\n1.1340\n1.4306\nMay\n15.3200\n10.9800\n108.9323\n1.1340\n1.4522\nJun\n14.8834\n10.9349\n102.6700\n1.1095\n1.3397\nJul\n14.4277\n10.7892\n103.9398\n1.1069\n1.3180\nAug\n13.7656\n9.4521\n101.2190\n1.0960\n1.2280\nSep\n13.9200\n10.5800\n101.6000\n1.1200\n1.3200\nOct\n13.9400\n10.6500\n103.7600\n1.0989\n1.2346\nNov\n13.9402\n10.6875\n107.9934\n1.0811\n1.2430\nDec\n13.8416\n10.7247\n115.7895\n1.0556\n1.2509\n2017\nJan\n13.5146\n10.5652\n113.4750\n1.0701\n1.2516\nFeb\n12.9957\n10.3573\n112.5100\n1.0591\n1.2439\nMar\n13.5450\n10.5541\n111.8750\n1.0678\n1.2487\nApr\n13.3461\n10.4384\n111.1600\n1.0862\n1.2908\nMay\n13.1162\n10.2987\n110.9650\n1.1168\n1.2801\nJun\n13.0150\n10.2249\n111.9450\n1.1439\n1.3013\nJul\n12.9986\n10.2093\n110.5150\n1.1734\n1.3127\nAug\n13.0153\n10.1368\n110.5500\n1.1873\n1.2920\nSep\n13.5463\n10.3252\n112.6750\n1.1777\n1.3416\nOct\n14.0603\n10.5319\n113.1150\n1.1630\n1.3209\nNov\n13.6625\n10.3199\n112.1250\n1.1867\n1.3470\nDec\n12.4000\n9.9602\n112.7500\n1.1945\n1.3500\nSource: Reserve Bank of Zimbabwe, 2017\n TABLE 11 : SELECTED INTERNATIONAL EXCHANGE RATES\n1. Foreign currency per US dollar.\n2. US dollars per unit of foreign currency.\n \n \n \n28 \n \n \n \n \n \n \n \n \n \n \nMarket Capitalisation\nEND OF\nUS$ millions\n2016\nJan\n103.0\n19.5\n10.4\n61,882,757\n2,790.4\nFeb\n99.4\n19.1\n15.6\n95,020,938\n2,692.3\nMar\n97.6\n19.4\n16.4\n97,601,725\n2,645.1\nApr\n105.8\n20.2\n14.0\n187,848,946\n2,862.6\nMay\n104.7\n25.5\n13.9\n99,055,230\n2,881.3\nJun\n101.0\n24.7\n18.1\n88,525,472\n2,780.9\nJul\n98.8\n25.7\n11.8\n57,222,624\n2,772.0\nAug\n99.5\n26.3\n7.1\n41,264,438\n2,734.3\nSep\n98.9\n26.6\n13.0\n68,329,516\n2,725.1\nOct\n120.8\n33.8\n22.6\n177,384,684\n3,328.3\nNov\n137.1\n57.4\n23.5\n233,749,377\n3,804.6\nDec\n144.5\n58.5\n26.0\n292,538,969\n4,008.0\n2017\nJan\n140.2\n56.3\n8.6\n31,616,982\n3,903.7\nFeb\n135.3\n56.5\n11.5\n85,314,995\n3,770.0\nMar\n139.0\n58.6\n26.9\n145,238,255\n3,871.3\nApr\n143.0\n66.3\n11.2\n75,857,712\n4,182.8\nMay\n162.3\n69.6\n16.8\n170,830,515\n4,740.1\nJun\n196.0\n69.8\n39.7\n311,145,262\n5,695.2\nJul\n203.3\n69.4\n24.7\n149,425,245\n5,759.0\nAug\n235.0\n73.5\n13.6\n107,920,143\n6,659.4\nSep\n418.4\n122.6\n89.5\n245,278,194\n11,860.2\nOct\n521.9\n132.5\n168.8\n1,006,687,304\n14,830.3\nNov\n376.7\n126.9\n207.5\n196,489,710\n10,777.7\nDec\n333.0\n142.4\n75.3\n844,189,447\n9,580.6\nSource:Zimbabwe Stock Exchange ,2017\nIndices\nTABLE 12: ZIMBABWE STOCK MARKET STATISTICS\nIndustrial\n Market Turnover \nUS$ million \nVolume of Shares\nMining\n \n \n \n29 \n \n \n \n \n \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n \nINTERNET\n2016\nJan\n 3,385.9 \n11.1\n137.4\n331.5\n388.9\n167.7\nFeb\n 3,448.2 \n11.9\n138.8\n312.1\n389.3\n167.9\nMar\n 3,460.2 \n11.3\n142.1\n288.8\n417.1\n255.9\nApr\n 3,564.3 \n9.7\n180.1\n247.6\n427.3\n168.3\nMay\n 3,869.2 \n10.8\n214.8\n203.3\n479.9\n217.9\nJun\n 4,522.2 \n10.3\n203.9\n131.4\n465.1\n174.1\nJul\n 3,911.8 \n9.2\n240.0\n166.3\n491.2\n218.0\nAug\n 3,928.7 \n7.9\n238.0\n165.9\n535.4\n230.6\nSep\n 4,382.9 \n10.5\n237.3\n167.7\n533.9\n215.9\nOct\n 4,127.6 \n8.0\n322.8\n112.5\n524.5\n216.0\nNov\n 4,624.7 \n6.9\n363.4\n84.5\n537.2\n229.9\nDec\n 4,882.6 \n5.6\n479.9\n71.9\n626.1\n265.1\n2017\nJan\n 4,052.7 \n7.5\n368.7\n70.4\n495.6\n318.9\nFeb\n 4,246.6 \n7.0\n327.3\n58.4\n472.3\n324.1\nMar\n 4,629.8 \n7.4\n392.2\n58.8\n671.6\n399.7\nApr\n 4,178.8 \n4.8\n466.9\n39.3\n792.5\n337.6\nMay\n 4,974.0 \n6.5\n557.8\n44.7\n939.9\n618.7\nJun\n 5,346.4 \n6.3\n558.8\n34.6\n1095.5\n500.3\nJul\n 4,805.1 \n5.7\n588.4\n29.4\n1601.4\n586.4\nAug\n 5,325.1 \n5.2\n590.1\n24.7\n1776.4\n583.3\nSep\n 6,031.4 \n5.2\n651.1\n16.1\n2159.3\n731.9\nOct\n 5,991.3 \n5.4\n681.9\n19.4\n2401.6\n779.2\nNov\n 6,259.7 \n4.9\n666.5\n15.9\n2561.8\n798.3\nDec\n 5,877.2 \n3.6\n778.4\n16.3\n3052.7\n1043.3\nSource:Reserve Bank of Zimbabwe, 2017\nTABLE 13.1 : ZETSS AND RETAIL PAYMENTS \n Values of Transactions (US$ millions)\n \n \n \n30 \n \n \n \n \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2016\nJan\n132.3\n24.6\n1328.9\n1104.4\n 19,956.1 \n49.9\nFeb\n148.4\n30.3\n1289.5\n1067.1\n 19,793.7 \n54.6\nMar\n152.5\n29.6\n1455.7\n962.9\n 21,731.5 \n61.9\nApr\n161.7\n25.0\n1962.6\n841.3\n 21,086.6 \n59.9\nMay\n199.3\n29.1\n2779.9\n675.8\n 23,293.0 \n83.2\nJun\n268.2\n33.5\n3203.8\n741.9\n 23,321.2 \n88.0\nJul\n242.4\n31.1\n3946.3\n1052.8\n 24,538.8 \n102.7\nAug\n253.9\n27.8\n4038.1\n1156.4\n 26,009.6 \n109.5\nSep\n288.5\n32.5\n4421.9\n1188.5\n 27,300.0 \n100.0\nOct\n296.0\n29.2\n6247.4\n1106.4\n 29,801.7 \n117.9\nNov\n353.0\n30.6\n8691.2\n1086,9\n 28,542.1 \n128.8\nDec\n405.4\n24.4\n13042.1\n1348.0\n 33,211.8 \n155.9\nAnnual Total\n 2,901.5 \n347.7\n 52,407.5 11,245.7 298,586.2 \n1112.1\n2017\nJan\n 350.0 \n26.7\n 12,756.3 1,173.6 27,550.1 \n191.0\nFeb\n 326.3 \n27.8\n 8,952.0 953.5 26,820.1 \n207.0\nMar\n 414.2 \n31.0\n 11,124.0 922.2 35,604.1 \n244.1\nApr\n 363.7 \n21.6\n 13,595.5 652.9 40,089.0 \n231.0\nMay\n 531.8 \n27.8\n 16,623.4 820.6 47,019.1 \n323.3\nJun\n 525.0 \n29.3\n 17,466.2 696.9 53,738.1 \n342.1\nJul\n 521.8 \n30.0\n 20,013.7 636.1 61,162.4 \n382.6\nAug\n 541.5 \n26.6\n 20,303.0 595.6 70,771.6 \n419.1\nSep\n 620.0 \n27.2\n 20,731.0 478.0 83,303.0 \n432.0\nOct\n 609.6 \n27.2\n 23,764.6 475.1 92,540.6 \n478.9\nNov\n 575.3 \n25.6\n 22,748.6 347.3 97,945.2 \n473.0\nDec\n 524.2 \n19.2\n 26,779.1 347.2 118,198.9 \n524.8\nSource:Reserve Bank of Zimbabwe, 2017\nTABLE 13.2 : ZETSS AND RETAIL PAYMENTS \n Volumes of Transactions (000's)\n \n \n \n31 \n \n \n \nEND OF\nEXPORTS\nIMPORTS\nTOTAL TRADE TRADE BALANCE\n2016\nJan\n249.18\n395.35\n644.52\n(146.17)\nFeb\n209.55\n427.73\n637.28\n(218.18)\nMar\n166.50\n478.06\n644.55\n(311.56)\nApr\n157.83\n356.48\n514.31\n(198.65)\nMay\n165.20\n408.49\n573.69\n(243.29)\nJun\n176.21\n429.41\n605.61\n(253.20)\nJul\n184.21\n394.23\n578.43\n(210.02)\nAug\n202.14\n445.03\n647.16\n(242.89)\nSep\n250.42\n443.89\n694.30\n(193.47)\nOct\n318.45\n468.06\n786.52\n(149.61)\nNov\n460.73\n475.33\n936.06\n(14.61)\nDec\n291.87\n489.37\n781.24\n(197.50)\nTotal\n2832.27\n5211.41\n8043.69\n(2379.14)\n2017\nJan\n291.97\n384.96\n676.93\n(92.99)\nFeb\n290.34\n424.36\n714.71\n(134.02)\nMar\n265.67\n461.71\n727.37\n(196.04)\nApr\n225.58\n405.52\n631.09\n(179.94)\nMay\n268.65\n466.11\n734.77\n(197.46)\nJun\n264.67\n495.14\n759.82\n(230.47)\nJul\n262.65\n482.09\n744.74\n(219.43)\nAug\n356.46\n448.08\n804.54\n(91.62)\nSep\n326.48\n439.58\n766.05\n(113.10)\nOct\n352.96\n459.89\n812.85\n(106.94)\nNov\n577.59\n492.67\n1070.30\n84.91\nSource: Zimstat, 2017\nTABLE 14 : MERCHANDISE TRADE STATISTICS\n (US$ millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/MPC_Statements/December2017.pdf"}
{"doc_id": "9cb26bf9a96fc199e1edda7bd6f83e63", "text": "i \n \n \n \n \n \n \n \nJULY 2019 \n \n1 \n \nTABLE OF CONTENTS \n \nSELECTED ECONOMIC INDICATORS ................................................................................. 2 \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ........................................... 3 \nMERCHANDISE TRADE DEVELOPMENTS ...................................................................... 4 \nSTOCK MARKET DEVELOPMENTS ..................................................................................... 8 \nINFLATION OUTTURN ............................................................................................................. 9 \nMonthly Inflation ...................................................................................................................... 9 \n \nNATIONAL PAYMENTS SYSTEM ........................................................................................ 10 \n \n \n \n \n \n \n \n \n2 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nSources: \n1. Zimbabwe National Statistics Agency. \n2. Reserve Bank of Zimbabwe. \n3. Zimbabwe Stock Exchange. \n \n2019 \n \nJune \n2019 \n \nJuly \nMonth-on- \nMonth Change \n(%) \nMonthly Inflation1 (%) \n39.26 \n21.04 \n- \nNational \nPayment \nSystem \nTransactions2 (US$ billions) \n30.16 \n38.40 \n16.9 \nMoney Supply2 (US$ millions) \n13,009.04 \n14,767.89 \n13.52 \nMoney \nSupply \n(M3) \nAnnual \nGrowth2 (%) \n57.51 \n66.99 \n- \nNominal Lending Rate2 (% per \nannum) \n4.00-22.00 \n4.00-22.00 \n- \nZ.S.E All share Index3 \n204.75 \n187.12 \n8.87 \nZ.S.E. Mining Index3 \n255.26 \n244.58 \n13.04 \nZ.S.E. Industrial Index3 \n683.51 \n624.41 \n40.74 \nSELECTED ECONOMIC INDICATORS \n \n \n \n3 \n \nINTERNATIONAL COMMODITY PRICE \nDEVELOPMENTS \n \nInternational commodity prices for precious \nmetals, base metals and crude oil increased, \nduring the month of July 2019. \n \n \n Precious Metals \nGold prices rose by 5.8%, from a monthly \naverage of US$1,287.04/oz in June 2019, to \nUS$1,358.75/oz in July 2019. The rebound in \nprices followed prospects of a positive \ninvestment demand outlook, as economic data \npointed to easing inflationary pressures in the \nUS. In addition, the uncertainties posed by \ngeopolitical tensions between the US and Iran, \nbolstered safe haven demand for the yellow \nmetal. \n \nPlatinum prices, however, declined by 3.1%, \nfrom a monthly average of US$886.85/oz in \nJune 2019 to US$807.9/oz in July 2019. The \ndecline was largely due to slowing global \ndemand, \nparticularly \nfrom \nautomotive \nindustries. \n \n \n \nFigure 1: Precious metal prices (US$/oz.) \nSource: Bloomberg, 2019 \n \nBase Metals \nCopper prices rebounded during the month \nunder review, as robust output and investment \ndata from China helped to boost positive \nsentiment in industrial metals markets. In the \noutlook period, however, the demand for copper \nwill continue to be dampened by the on-going \ntrade tensions between the US and China. \nAgainst this backdrop, copper prices rose by \n0.9%, from US$5,885.7 per tonne in June 2019, \nto US$5,939.3 per tonne in July 2019. \n \nSimilarly, nickel prices increased by 13.2%, to \nUS$13,533.4 per tonne in July 2019, from \nUS$11,954.8 per tonne in June 2019. Prices \nwere further supported by speculative buying, as \ninvestors anticipated that growth in electric \nvehicles would boost demand for the metal for \nthe manufacture of car batteries. \n \n \nFigure 2: Base metal prices (US$/ton) \nSource: Bloomberg, 2019 \n \n \n \n \n \n600\n700\n800\n900\n1000\n1100\n1200\n1300\n1400\n1500\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\nUS$/oz.\nGold\nPlatinum\n5,000\n7,000\n9,000\n11,000\n13,000\n15,000\n17,000\n4,000\n4,500\n5,000\n5,500\n6,000\n6,500\n7,000\n7,500\nJul-18\nSep-18\nNov-18\nJan-19\nMar-19\nMay-19\nJul-19\nNickel US$/ton\nCopper US$/ton\nCopper\nNickel (RHS)\n \n \n \n4 \n \n \nBrent Crude Oil \nDuring the month of July 2019, international oil \nprices firmed, due to signs of tight supply \nconditions, as major producers cut nearly a third \nof offshore production in the Gulf of Mexico, \ndue to the tropical storm. The increase in oil \nprices was, somewhat moderated, by concerns \nof slackening global demand, occasioned by the \nescalating trade disputes between the US and \nChina. Crude oil prices increased by 2.0%, from \nUS$63.1 per barrel in June 2019 to US$64.4 per \nbarrel, during the month under analysis. \nFigure 3: International crude oil prices \n(US$/barrel) \n \nSource: Bloomberg, 2019 \n \nMERCHANDISE \n \n \nTRADE \nDEVELOPMENTS \n \nThe country’s total merchandise trade declined \nby 6.0%, to close at US$656.4 million in July \n2019, from US$698.4 million recorded in the \nprevious month. This was, largely underpinned, \nby the significant slowdown in merchandise \nimports. \n \n Merchandise Exports \nMonthly merchandise exports rose by 24.9%, \nfrom US$239.8 million in June, to US$299.5 \nmillion in July 2019. The increase was \nattributable to a rise in export earnings from \ngold (40.8%); nickel ore & concentrates \n(27.8%); and ferrochrome (28.1%). \nFigure 4: Merchandise Exports (US$ m) \n \nSource: ZIMSTAT, 2019 \n \n \nThe country’s export basket remained largely \nconcentrated in a few primary and semi-\nprocessed commodities, which included; PGMs; \ngold; \nferrochrome; \nflue-cured \ntobacco; \ndiamonds; and cane sugar. These commodities \ncontributed about 80.2% of the country’s export \nearnings for the month of July 2019. \n \nTable 1 shows the major export commodities for \nthe months of June 2019 and July 2019. \n \n40\n45\n50\n55\n60\n65\n70\n75\n80\n85\nJan-18\nFeb-18\nMar-18\nApr-18\nMay-18\nJun-18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\nUS$/barrel\n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\n \n \n \n5 \n \nTable 1: Exports Classified by Harmonised \nCommodity Description and Code System \nCommodity \nJune-19 \nJuly-19 \nJuly \nShare of \nTotal \n(%) \n*Nickel \nores \n& \nconcentrates1 \n72.4 \n92.5 \n30.9 \nSemi-\nmanufactured gold \n62.2 \n87.6 \n29.2 \nFerro-chromium \n16.1 \n20.7 \n6.9 \nFlue-cured tobacco \n17.5 \n18.6 \n6.2 \nIndustrial \ndiamonds \n8.4 \n8.8 \n2.9 \nCane Sugar \n5.0 \n6.3 \n2.1 \n*Unwrought \nPlatinum1 \n5.2 \n5.8 \n1.9 \nMacadamia nuts \n2.0 \n3.3 \n1.1 \nChromium ores and \nconcentrates \n3.9 \n3.0 \n1.0 \nCoke and semi-coke \n(coal) \n1.7 \n2.9 \n1.0 \n*Nickel Mattes1 \n1.4 \n0.5 \n0.2 \nOther \n44.1 \n49.52 \n12.3 \nTotal \n239.8 \n299.5 \n100.0 \nSource: ZIMSTAT, 2019 & RBZ Calculations, 2019 \nThe country’s major export destinations \nincluded South Africa, which absorbed 32.8% \nof total exports, followed by Singapore, \n(28.9%); China, (9.7%); India (2.7%); and UK \n(2.6%). \n \n \n \n \n \n \n1 Nickel ores and concentrates, nickel mattes and \nunwrought platinum are components of the platinum \ngroup of metals (PGMs). \nFigure 5: Top Five Merchandise Export \nDestinations (% Share) \nSource: ZIMSTAT, 2019 & RBZ Calculations, 2019 \n \nMerchandise Imports \nMerchandise imports registered a decline of \n22.2%, from US$458.6 million in June to \nUS$357.0 million in July 2019. The decline was \nlargely underpinned by lower imports of fuel, \nnotably diesel and petrol, as shown in Table 2. \n \n \n \n \n \n34.0%\n28.9%\n9.7%\n2.7%\n2.6%\n1.9%\n1.8%\n18.3%\nS.A\nSingapore\nChina\nIndia\nU.K.\nU.A.E\nJapan\nOther\n \n \n \n6 \n \nTable 2: Imports Classified by Harmonised \nCommodity Description and Code System \nCommodity \nJune \nUS$ m \nJuly \nUS$ m \nShare of \nTotal \nImports \n(%) \nDiesel \n112.4 \n78.3 \n21.9 \nUnleaded petrol \n46.4 \n24.2 \n6.8 \nWheat \n2.2 \n9.7 \n2.7 \nElectricity \n6.2 \n5.8 \n1.6 \nMedicines \n10.6 \n4.8 \n1.3 \nCrude soybeans \n12.6 \n4.5 \n1.3 \nAmmonium \nNitrate \n6.7 \n4.1 \n1.1 \nRoad \nConstruction \nMachinery \n2.7 \n3.9 \n1.1 \nVehicles (Goods) \n2.6 \n3.5 \n1.0 \nPackaging \nMaterial \n0.9 \n2.9 \n0.8 \nOther \n255.2 \n215.3 \n60.3 \nSource: ZIMSTAT, 2019 & RBZ Calculations, 2019 \nThe country’s major import sources were as \nfollows: South Africa (40.6%); Singapore \n(26.1%); China (8.0%); Zambia (4.0%) and \nIndia (2.7%), as shown in Figure 6. \nFigure 6: Top Five Merchandise Import \nSources (% Share). \nSource: ZIMSTAT, 2019 & RBZ Calculations, 2019 \nMerchandise Trade Balance \nThe increase in exports, on the back of a slump \nin imports, culminated in a significant \nimprovement in the country’s trade balance, \nfrom a deficit of -US$218.8 million in June \n2019, to a deficit of -US$57.5 million in July \n2019. \nFigure 7: Merchandise Trade Balance \n(US$ m) \nSource: ZIMSTAT, 2019 & RBZ Computations, 2019 \n40.6%\n26.1%\n8.0%\n4.0%\n2.7%\n South Africa\n Singapore\nChina\nZambia\nIndia\n-400.0\n-200.0\n0.0\n200.0\n400.0\n600.0\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\nExports\nImports\nTrade Balance\n \n \n \n7 \n \nMONETARY DEVELOPMENTS2 \nBroad money3 grew by 81.98% to $17.08 \nbillion in July 2019, from $9.38 billion in July \n2018. The growth was partly attributed to \nexpansion in foreign currency accounts included \nin transferable deposits, owing to exchange rate \ndepreciation. \n \nThe annual growth in money supply was \nreflective of increases in transferable deposits, \n100.96%; negotiable certificates of deposits \n(NCDs), 87.90%; time deposits, 9.28%; and \ncurrency in circulation, 8.87%. \n \nFigure 8: Broad Money in Levels and Growth \nRates \nSource: Reserve Bank of Zimbabwe, 2019 \n \nOn a month -on-month basis, broad money rose \nby 15.63%. The growth largely reflected the \n16.59% expansion in transferable deposits. \n \n2 All monetary numbers valued in RTGS$ since the \nadoption of an interbank market determined exchange rate \nin February 2019. \n3 From November 2017, broad money adjusted by a \nreclassification of lines of credit that were incorrectly \nTransferable deposits in domestic currency \naccounted for 62.97% of total money supply, \nfollowed by foreign currency accounts deposits, \n23.72%; time deposits, 9.61%; currency in \ncirculation, 2.72%; and negotiable certificates \nof deposits, 0.98%, as shown in Figure 9. \nFigure 9: Composition of Money Supply \n \nSource: Reserve Bank of Zimbabwe, 2019 \nFollowing the increase in money supply, credit \nto the private sector increased from $3.35 billion \nin July 2018 to $5.55 billion in July 2019. This \ntranslated to an annual increase of 52.09% in \nJuly 2019, compared to 16.13% recorded in \nJune 2019. \nclassified as deposits included in broad money. This \nreduced the stock of money and at the same time reducing \nthe net foreign assets of other depository corporations. \n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n -\n 2\n 4\n 6\n 8\n 10\n 12\n 14\n 16\n 18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\n%\n$ Billions\nM3\nM3 Annual Growth rate\nDemand \ndeposits\n62.71%\nFCA \ndeposits\n23.72%\nTime \nDeposits\n9.61%\nCurrency in \nCirculation\n2.72%\nNegotiable \nCertificates \nof Deposits\n0.98%\n \n \n \n8 \n \nOn a month-on-month basis, credit to the private \nsector recorded a growth of 8.13%, between \nJune and July 2019. \n \nAgriculture at 22.49%, took up the largest share \nof credit to the private sector, followed by \nhouseholds, 20.81%; distribution, 13.97%; and \nservices, 12.55%. \nFigure 10: Distribution of Private Sector \nCredit \n \nSource: Reserve Bank of Zimbabwe, 2019 \nOutstanding private sector credit in July 2019 \nwas channelled towards inventory build-up, \n23.33%; other recurrent expenditures, 34.48%; \nconsumer durables, 21.14%; fixed capital \ninvestment, 16.41%; and pre and post shipment \nfinancing, 4.64%. \nSTOCK MARKET DEVELOPMENTS \n \nTrading on the Zimbabwe Stock Exchange \n(ZSE) was bearish, during the month of July \n2019. Accordingly, the All Share and Top 10 \nindices declined by 8.61% and 10.77%, to close \nat 187.12 points and 175.98 points, respectively. \n \n \nFigure 11: Zimbabwe Stock Exchange All \nShare and Top 10 Indices \nSource: Zimbabwe Stock Exchange, 2019 \n \nIndustrial and mining indices stood at 624.41 \npoints and 244.58 points in July 2019, reflecting \ndeclines of 8.65% and 4.18%, respectively. \n \nOn an annual basis, both the industrial and \nmining indices grew by 62.50% and 49.14%, \nfrom 384.25 points and 163.99 points recorded \nin June 2018, respectively. \n \n \n \n \n \n \n \nConstruction, \n2.21%\nTransport and \nCommunication, \nMining, \n6.74%\nFin \nOrgan & \nInvest, \n9.99%\nDistrubution, \n13.97%\nServices, \n12.55%\nManufacturing, \n9.27%\nAgriculture, \n22.49%\nHouseholds, \n20.81%\nOther, \n0.16%\n0.00\n50.00\n100.00\n150.00\n200.00\n250.00\n40.00\n90.00\n140.00\n190.00\n240.00\n31-Jul-18\n31-Aug-18\n30-Sep-18\n31-Oct-18\n30-Nov-18\n31-Dec-18\n31-Jan-19\n28-Feb-19\n31-Mar-19\n30-Apr-19\n31-May-19\n30-Jun-19\n31-Jul-19\nTop 10 Index\nAll Share Index\nAll Share Index\nTop 10 Index\n \n \n \n9 \n \nFigure 12: Zimbabwe Stock Exchange \nIndices \nSource: Zimbabwe Stock Exchange, 2019 \n \nThe value of shares traded on the ZSE declined \nby 18.87%, to close at $191.05 million in July \n2019. In tandem, the volume of shares traded \nalso declined by 44.49% to 162.74 million \nshares, during the same month. \n \nFigure 13: ZSE Monthly Volumes and Values \nTraded \nSource: Zimbabwe Stock Exchange, 2019 \n \nThe ZSE lost $2.38 billion, or 8.81% worth of \ncapitalization to $24.64 billion, during the \nmonth under review. On a year-on-year basis, \nhowever, capitalization on the local bourse \nincreased by 124.58% to $13.67 billion, from \n$10.97 billion recorded in the previous month. \nINFLATION OUTTURN \n \n \nMonthly Inflation \n \nMonth-on-month inflation decelerated from \n39.3% in June 2019, to 21.04% in July 2019. \nThe decline was reflected in both monthly food \nand non-food inflation. \n \nMonthly food inflation fell from 55.1% in June \n2019 to 19.90% in July 2019, driven by bread \nand cereals; meat; vegetables; and oils and fats. \nSimilarly, month-on-month non-food inflation \ndeclined by 9.5 percentage points, from 31.23% \nin June 2019 to 21.72% in July 2019, largely \ndriven by furniture and household goods; \nclothing and footwear; alcoholic beverages and \ntobacco; and transport. \n \n \nFigure 14: Month-on-Month Inflation (%)\nSource: ZIMSTAT, 2019 \n \n \n \n0\n50\n100\n150\n200\n250\n300\n350\n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\nMining Index Points\nIndustrial Inedx Points\nIndustrial\nMining\n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1,000\n1,100\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\nValues Traded ($ millions)\nVolumes Traded (milions)\nVolume\nTurnover\n-5.0\n0.0\n5.0\n10.0\n15.0\n20.0\n25.0\n30.0\n35.0\n40.0\n45.0\nJul-18\nSep-18\nNov-18\nJan-19\nMar-19\nMay-19\nJul-19\n \n \n \n10 \n \nNATIONAL PAYMENTS SYSTEM \n \n \n \n \nTransactions processed through the National \nPayment System (NPS) increased by 16.9%, to \nclose at $38.40 billion in July 2019. In volume \nterms, transactions increased by 7.4%, from \n181.9 million in June 2019 to 195.3 million in \nJuly 2019. \n \nZimbabwe Electronic Transfer Settlement \nSystem (ZETSS) \n \nThe value of transactions processed through the \nRTGS system registered a 30.4% increase to \nclose at $23.31 billion in July 2019, from $17.88 \nbillion in June 2019. RTGS transaction volumes \nalso increased to 983,532 in July 2019, from \n705,958 in June 2019. \n \nFigure 15: ZETSS Volumes and Values \n \nSource: Reserve Bank of Zimbabwe, 2019 \n \nCash transactions \n \nCash based transaction values amounted to \n$889.6 million in July 2019, a 22.7% increase \nfrom $724.76 million registered in June 2019. \n \n \nMobile and Internet Based Transactions \nThe total value of mobile and internet based \ntransactions increased by 28.56%, from $9.67 \nbillion in June 2019 to $12.43 billion in July \n2019. \nCard Based Transactions \nCard based transactions amounted to $1.84 \nbillion in July 2019, up from $1.49 billion in \nJune 2019. \nCheque Transactions \nCheque transactions declined by 0.8%, from \n$3.70 million in July 2019 to $3.73 million in \nJune 2019. \n \nSEPTEMBER 2019 \nRESERVE BANK OF ZIMBABWE \n -\n 5.0\n 10.0\n 15.0\n 20.0\n 25.0\n0\n200\n400\n600\n800\n1000\n1200\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\nValue in $ Billions\nVolume in Thousands\nVolume\nValue\n \n11 \n \nStatistical Tables \n \nMonetary Statistics \n 1. Depository Corporations Survey \n \n \n \n13 \n 2. Central Bank Survey \n \n \n \n \n \n \n14 \n \n3. Other Depository Corporations Survey \n \n \n \n \n15 \n Other Depository Corporations \n \n4.1 Assets \n \n \n \n \n \n \n \n16 \n 4.2 Liabilities \n \n \n \n \n \n \n \n17 \n Commercial Banks \n 5.1 Assets \n \n \n \n \n18 \n 5.2 Liabilities \n \n \n \n19 \n Building Societies \n 6.1 Assets \n \n \n \n \n \n \n20 \n 6.2 Liabilities \n \n \n \n \n \n21 \n Sectoral Analysis of Bank Loans and Advances and Deposits \n \n7.1 Sectoral Analysis of Commercial Banks Loans and Advances \n22 \n \n7.2 Sectoral Analysis of Commercial Banks Deposits \n \n \n23 \n Interest Rates \n \n8.1 Lending Rates \n \n \n \n \n \n \n \n24 \n \n8.2 Banks Deposit Rates \n \n \n \n \n \n \n25 \n \n Inflation \n \n9.1 Monthly Inflation \n \n \n \n \n \n \n26 \n \n9.2 Yearly Inflation \n \n \n \n \n \n \n \n27 \n External Statistics \n \n10. Total External Debt Outstanding by Debtor \n \n \n \n28 \n 11. Exchange Rates \n \n \n \n \n \n \n \n29 \n \n \n \n \n \n12 \n \n12. Zimbabwe Stock Market Statistics \n \n \n \n \n 30 \n \n 13. National Payments System Statistics \n \n \n \n \n13.1 Values of Transactions \n \n \n \n \n 31 \n \n13.2 Volumes of Transactions \n \n \n \n \n 32 \n \n14. Merchandise Trade Statistics \n \n \n \n \n \n 33 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 13 \n \n \nJun-18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\nNet Foreign Assets\n-1,508,217.61\n-1,499,686.15\n-1,804,600.44\n-1,815,294.15\n-1,728,377.38\n-1,725,207.58\n-1,877,294.72\n-1,874,425.56\n-4,424,467.92\n-5,983,620.49\n-6,226,059.55\n-10,192,415.69\n-12,704,437.39\n-19,915,608.51\nCentral Bank(net)\n-1,217,451.12\n-1,275,444.50\n-1,513,864.28\n-1,555,285.99\n-1,455,053.24\n-1,541,066.06\n-1,758,219.23\n-1,766,538.71\n-4,676,973.98\n-6,110,320.34\n-6,756,572.48\n-11,352,535.79\n-14,602,968.79\n-23,287,056.52\nForeign Assets\n510,355.35\n528,307.45\n290,596.25\n237,850.70\n255,482.93\n247,680.14\n295,965.66\n303,248.18\n853,285.31\n996,604.88\n932,666.79\n2,417,729.41\n2,917,765.26\n3,402,652.93\nForeign Liabilities\n1,727,806.48\n1,803,751.95\n1,804,460.53\n1,793,136.69\n1,710,536.17\n1,788,746.20\n2,054,184.89\n2,069,786.89\n5,530,259.29\n7,106,925.22\n7,689,239.28\n13,770,265.20\n17,520,734.04\n26,689,709.45\nOther Depository Corporations(net)\n-290,766.49\n-224,241.66\n-290,736.16\n-260,008.17\n-273,324.14\n-184,141.52\n-119,075.49\n-107,886.85\n252,506.07\n126,699.85\n530,512.93\n1,160,120.10\n1,898,531.40\n3,371,448.01\nForeign Assets\n263,405.79\n320,981.77\n244,837.54\n299,508.91\n308,206.84\n359,199.07\n405,848.41\n422,803.54\n1,034,721.60\n1,060,697.66\n1,491,439.91\n2,534,779.04\n3,814,622.33\n5,390,485.00\nForeign Liabilities\n554,172.27\n545,223.42\n535,573.70\n559,517.07\n581,530.99\n543,340.59\n524,923.90\n530,690.39\n782,215.53\n933,997.80\n960,926.97\n1,374,658.95\n1,916,090.93\n2,019,036.99\nNet Domestic Assets (NDA)\n10,351,577.44\n10,883,377.40\n11,301,536.89\n11,637,230.97\n11,491,870.79\n11,515,658.20\n11,887,199.99\n11,731,452.83\n14,813,771.42\n16,610,996.67\n17,579,425.62\n23,201,453.94\n27,472,328.14\n36,991,644.76\nDomestic Claims\n12,410,120.00\n13,195,525.47\n13,840,196.20\n14,162,804.05\n14,361,247.61\n14,642,956.80\n14,982,344.65\n15,268,955.01\n14,831,314.29\n14,652,405.60\n14,594,432.73\n14,958,514.70\n16,416,486.46\n18,057,310.94\nClaims on Central Government(net)\n7,703,126.14\n8,707,427.93\n9,245,237.20\n9,367,999.90\n9,453,371.60\n9,709,749.15\n9,992,336.76\n10,397,721.31\n9,848,404.77\n9,631,357.74\n9,398,952.61\n9,082,566.10\n9,422,173.55\n11,348,394.86\nClaims on Central Government\n7,834,035.83\n8,782,266.41\n9,319,418.72\n9,454,322.45\n9,547,216.70\n9,799,794.74\n10,074,924.82\n10,481,274.02\n9,996,649.93\n9,810,201.11\n9,615,349.44\n9,377,820.25\n10,630,234.88\n12,906,211.52\nCentral Bank\n4,961,290.78\n5,486,379.33\n5,949,540.54\n6,303,205.89\n6,436,684.56\n6,619,938.86\n7,024,652.77\n7,438,578.19\n6,914,447.06\n6,777,148.85\n6,690,110.86\n6,461,220.18\n7,707,833.00\n9,419,993.38\nODCs\n2,872,745.05\n3,295,887.08\n3,369,878.18\n3,151,116.56\n3,110,532.15\n3,179,855.88\n3,050,272.06\n3,042,695.82\n3,082,202.87\n3,033,052.26\n2,925,238.58\n2,916,600.07\n2,922,401.88\n3,486,218.14\nLess Liabilities to Central Government\n130,909.69\n74,838.48\n74,181.52\n86,322.55\n93,845.11\n90,045.59\n82,588.06\n83,552.71\n148,245.17\n178,843.37\n216,396.83\n295,254.14\n1,208,061.33\n1,557,816.66\nCentral Bank\n41,699.08\n41,707.71\n41,789.64\n41,694.93\n41,685.64\n41,331.00\n41,321.07\n41,366.44\n103,759.15\n130,917.86\n160,540.01\n246,390.26\n1,163,537.70\n1,507,260.60\nODCs\n89,210.62\n33,130.77\n32,391.88\n44,627.63\n52,159.47\n48,714.59\n41,267.00\n42,186.27\n44,486.02\n47,925.52\n55,856.82\n48,863.88\n44,523.63\n50,556.06\nClaims on Other Sectors\n4,706,993.86\n4,488,097.54\n4,594,959.00\n4,794,804.16\n4,907,876.01\n4,933,207.65\n4,990,007.89\n4,871,233.70\n4,982,909.52\n5,021,047.86\n5,195,480.12\n5,875,948.60\n6,994,312.91\n6,708,916.08\nOther Financial Corporations\n67,789.70\n133,851.47\n141,976.37\n145,256.31\n149,474.39\n146,924.77\n156,610.64\n163,570.22\n171,891.86\n159,230.21\n161,501.25\n169,299.57\n180,349.24\n174,910.96\nState and Local Government\n49,509.94\n54,356.85\n52,796.97\n51,597.49\n39,591.11\n37,039.73\n37,159.65\n35,335.26\n34,253.92\n35,077.27\n34,576.44\n33,304.49\n31,319.18\n31,193.91\nPublic Non Financial Corporations\n678,604.79\n653,645.57\n675,218.20\n707,808.19\n714,396.35\n759,288.09\n737,586.90\n760,026.12\n717,834.55\n874,075.49\n987,347.41\n1,256,829.39\n1,653,927.27\n957,335.21\nPrivate Sector\n3,911,089.43\n3,646,243.64\n3,724,967.47\n3,890,142.17\n4,004,414.16\n3,989,955.06\n4,058,650.69\n3,912,302.09\n4,058,929.20\n3,952,664.90\n4,012,055.03\n4,416,515.15\n5,128,717.22\n5,545,476.00\nCentral Bank\n19,822.36\n20,351.40\n22,784.69\n21,112.94\n21,332.89\n21,390.08\n21,335.35\n17,030.76\n17,036.09\n21,956.10\n24,683.88\n25,361.29\n23,154.78\n33,310.97\nODCs\n3,891,267.06\n3,625,892.25\n3,702,182.78\n3,869,029.24\n3,983,081.27\n3,968,564.98\n4,037,315.34\n3,895,271.33\n4,041,893.11\n3,930,708.81\n3,987,371.15\n4,391,153.86\n5,105,562.43\n5,512,165.03\nOther Items(Net)\n2,058,542.55\n2,312,148.07\n2,538,659.31\n2,525,573.08\n2,869,376.82\n3,127,298.60\n3,095,144.66\n3,537,502.18\n17,542.87\n-1,958,591.07\n-2,984,992.88\n-8,242,939.24\n-11,055,841.67\n-18,934,333.82\nShares and Other Equity\n1,993,144.37\n2,192,599.84\n2,239,731.19\n2,135,709.67\n2,187,396.87\n2,221,755.34\n2,281,378.82\n2,281,748.45\n-544,566.17\n-1,687,090.85\n-2,151,220.63\n-6,856,982.76\n-9,810,341.46\n-18,099,228.93\nLiabilities to Other Financial Corporations\n21,559.36\n32,602.91\n33,341.07\n46,596.88\n42,026.50\n42,314.24\n39,048.36\n39,216.29\n42,570.71\n42,675.76\n30,412.39\n49,216.06\n43,639.00\n27,408.22\nRestricted Deposits\n65,963.28\n41,991.83\n46,269.35\n46,191.19\n68,052.98\n17,139.46\n21,014.72\n17,086.44\n8,667.49\n16,636.01\n46,764.60\n12,192.36\n363,411.77\n1,123,177.17\nDeposits and Securities Excluded from Base Money\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nOther Items(net)\n-22,124.46\n44,953.48\n219,317.70\n297,075.34\n571,900.47\n846,089.55\n753,702.76\n1,199,451.00\n510,870.83\n-330,811.98\n-910,949.25\n-1,447,364.90\n-1,652,550.98\n-1,985,690.29\nBroad Money-M3\n8,843,359.83\n9,383,691.25\n9,496,936.45\n9,821,936.82\n9,763,493.41\n9,790,450.62\n10,009,905.27\n9,857,027.27\n10,389,303.50\n10,627,376.18\n11,353,366.06\n13,009,038.25\n14,767,890.75\n17,076,036.26\nSecurities Other than Shares Included in Broad Money\n66,844.08\n89,499.33\n66,484.46\n52,419.97\n61,703.77\n50,864.73\n58,584.04\n59,302.10\n71,792.12\n74,503.10\n90,813.24\n139,439.93\n171,667.83\n168,169.20\nBroad Money-M2\n8,776,515.75\n9,294,191.92\n9,430,452.00\n9,769,516.85\n9,701,789.65\n9,739,585.90\n9,951,321.23\n9,797,725.16\n10,317,511.39\n10,552,873.07\n11,262,552.82\n12,869,598.32\n14,596,222.92\n16,907,867.06\nOther Deposits\n1,459,140.37\n1,501,520.77\n1,524,244.03\n1,488,981.24\n1,427,834.38\n1,430,427.17\n1,508,902.47\n1,466,797.51\n1,473,224.43\n1,437,053.15\n1,487,637.39\n1,611,815.34\n1,428,886.89\n1,640,846.54\nNarrow Money-M1\n7,317,375.38\n7,792,671.15\n7,906,207.97\n8,280,535.61\n8,273,955.26\n8,309,158.73\n8,442,418.76\n8,330,927.65\n8,844,286.96\n9,115,819.92\n9,774,915.43\n11,257,782.98\n13,167,336.03\n15,267,020.52\nTransferable Deposits\n6,938,172.87\n7,365,729.27\n7,444,516.45\n7,789,665.52\n7,792,430.08\n7,817,001.46\n7,940,376.20\n7,857,164.47\n8,380,317.93\n8,648,981.05\n9,283,238.74\n10,792,389.36\n12,695,789.56\n14,802,212.01\n Of which Foreign Currency Accounts\n0.00\n0.00\n0.00\n0.00\n149,041.84\n139,613.34\n343,305.00\n418,087.02\n1,190,521.05\n1,417,836.22\n1,753,489.14\n3,031,536.97\n3,887,787.41\n4,049,120.88\nCurrency Outside Depository Corporations\n379,202.52\n426,941.88\n461,691.52\n490,870.09\n481,525.19\n492,157.27\n502,042.57\n473,763.18\n463,969.03\n466,838.87\n491,676.69\n465,393.62\n471,546.47\n464,808.51\nMemorandum Items\nReserve Money\n2,513,332.55\n2,789,945.53\n2,967,852.44\n2,891,742.55\n2,860,575.65\n3,135,918.22\n3,258,220.86\n3,029,004.88\n3,201,051.95\n3,172,354.75\n3,019,535.69\n2,522,708.23\n3,575,573.83\n4,057,364.05\nFCAs as a Percentage of Deposits in M3\n0.0%\n0.0%\n0.0%\n0.0%\n1.6%\n1.5%\n3.6%\n4.5%\n12.0%\n14.0%\n16.1%\n24.2%\n27.2%\n24.4%\nEnd Period Exchange Rate\n1.00\n1.00\n1.00\n1.00\n1.00\n1.00\n1.00\n1.00\n2.50\n3.01\n3.26\n5.26\n6.62\n9.19\nSource: Reserve Bank of Zimbabwe,2019\nNotes:\n(i) Depository corporations survey - formerly Monetary Survey.\n(ii) Broad money redefined using IMF's Monetary and Financial Statistics Manual of 2000. Major changes include exclusion of Government deposits held by banks from broad money.\n(iii) Transferable deposits made up of demand and savings deposits.\n(iv) NCDs are also referred to as securities included in broad money.\n(v) All classes of time deposits, short and long term are classified as time deposits, which are also termed other deposits.\n(vi) Credit to the private sector now excludes claims on other financial corporations, as well as claims on state and local government (local authorities)\n(vii) Depository corporations made up of the Central Bank and other depository corporations\n(viii) Other depository corporations (ODCs) - Commercial banks, merchant banks, building societies and POSB.\n(ix) In December 2017, the statistics were adjusted in restrospect by reclassifying Securities issued under Aftrades from claims on government to claims on central bank\n(x) In December 2017, the statistics were adjusted in restrospect by reclassifying amounts accessed by banks under the Aftrades from liabilities to Other Depository corporations and Other Financial Corporations to liabilities to Central Bank \n(xi) In December 2018, statistics were revised from November 2017 due to reclassification of lines of credit (foreign liabilities) that were initially classified as deposits included in broad money\n(xii) All monetary and financial statistics are valued in ZWL$ since the introduction of the interbank foreign exchange market in February 2019\nTABLE 1: DEPOSITORY CORPORATIONS SURVEY (ZWL$ '000)\n \n \n \n14 \n \n \n \nJun-18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\nNet Foreign Assets\n-1,217,451.12\n-1,275,444.50 -1,513,864.28 -1,555,285.99 -1,455,053.24 -1,541,066.06 -1,758,219.23 -1,766,538.71 -4,676,973.98 -6,110,320.34 -6,756,572.48 -11,352,535.79 -14,602,968.79 -23,287,056.52\nClaims on Non Residents\n510,355.35\n528,307.45\n290,596.25\n237,850.70\n255,482.93\n247,680.14\n295,965.66\n303,248.18\n853,285.31\n996,604.88\n932,666.79\n2,417,729.41\n2,917,765.26\n3,402,652.93\nOfficial Reserves Assets\n163,434.94\n180,936.77\n189,263.65\n136,268.14\n153,107.92\n137,602.74\n86,950.64\n80,847.73\n311,203.67\n344,973.29\n230,535.90\n1,223,599.47\n1,399,462.47\n1,401,366.80\nOther Foreign Assets\n346,920.41\n347,370.68\n101,332.60\n101,582.56\n102,375.02\n110,077.40\n209,015.01\n222,400.44\n542,081.63\n651,631.59\n702,130.89\n1,194,129.94\n1,518,302.79\n2,001,286.13\nLess Liabilities to Non Residents\n1,727,806.48\n1,803,751.95\n1,804,460.53\n1,793,136.69\n1,710,536.17\n1,788,746.20\n2,054,184.89\n2,069,786.89\n5,530,259.29\n7,106,925.22\n7,689,239.28\n13,770,265.20\n17,520,734.04\n26,689,709.45\nShort Term Liabilities\n1,229,630.31\n1,303,458.23 1,303,461.16 1,291,247.23 1,207,367.88 1,300,370.95 1,563,599.81 1,574,674.14 4,300,887.88 5,631,784.52 6,092,241.62\n11,229,210.34\n14,024,443.68\n18,833,457.18\nOther Foreign Liabilities\n498,176.16\n500,293.72\n500,999.37\n501,889.46\n503,168.29\n488,375.25\n490,585.08\n495,112.75 1,229,371.41 1,475,140.70 1,596,997.65\n2,541,054.86\n3,496,290.36\n7,856,252.27\nNet Domestic Assets (NDA)\n3,730,783.67\n4,065,390.03 4,481,716.72 4,447,028.54 4,315,628.88 4,676,984.28 5,016,440.09 4,795,543.60 7,878,025.93 9,282,675.10 9,776,108.17\n13,875,244.02\n18,178,542.62\n27,344,420.57\nDomestic Claims\n5,420,856.73\n6,026,539.60 6,509,710.94 6,826,230.06 6,991,768.06 7,189,089.87 7,598,696.62 7,999,682.43 7,398,364.83 7,254,587.97 7,189,577.74\n6,912,529.53\n7,344,238.48\n8,736,761.70\nNet Claims on Central Government\n4,919,591.70\n5,444,671.63 5,907,750.89 6,261,510.96 6,394,998.92 6,578,607.86 6,983,331.70 7,397,211.76 6,810,687.92 6,646,231.00 6,529,570.85\n6,214,829.92\n6,544,295.30\n7,912,732.78\nClaims on Central Government\n4,961,290.78\n5,486,379.33\n5,949,540.54\n6,303,205.89\n6,436,684.56\n6,619,938.86\n7,024,652.77\n7,438,578.19\n6,914,447.06\n6,777,148.85\n6,690,110.86\n6,461,220.18\n7,707,833.00\n9,419,993.38\nOf which: Securities Other than Shares\n1,655,951.61\n1,767,970.98 2,124,232.15 2,107,570.78 2,109,129.00 2,073,611.90 2,062,178.19 2,377,373.84 1,962,432.38 1,910,408.71 1,835,171.86\n1,793,430.00\n5,922,355.91\n7,222,007.40\nLoans\n3,305,339.17\n3,718,408.35\n3,825,308.38\n4,195,635.11\n4,327,555.56\n4,546,326.96\n4,962,474.58\n5,061,204.35\n4,952,014.68\n4,866,740.14\n4,854,939.01\n4,667,790.18\n1,785,477.10\n2,197,985.98\n Loans and Advances\n3,032,637.59\n3,445,708.69 3,552,608.66 3,925,152.95 3,092,815.50 3,259,847.32 3,618,214.10 3,632,085.91 3,480,989.65 3,358,008.67 3,319,653.21\n3,053,293.48\n114,667.21\n368,837.75\n Legacy Debt\n272,701.58\n272,699.66\n272,699.72\n270,482.16\n270,483.94\n270,476.30\n271,144.05\n291,998.61\n308,519.87\n309,020.71\n309,052.17\n309,088.45\n309,057.44\n405,543.61\n Export Incentives\n657,961.30\n685,670.05\n760,667.33\n878,452.43\n964,256.12\n1,016,003.35\n1,073,116.43\n1,137,119.83\n1,162,505.16\n1,199,710.77\n1,226,233.63\n1,305,408.24\n1,361,752.45\n1,423,604.62\nLess Liabilities to Central Government\n41,699.08\n41,707.71\n41,789.64\n41,694.93\n41,685.64\n41,331.00\n41,321.07\n41,366.44\n103,759.15\n130,917.86\n160,540.01\n246,390.26\n1,163,537.70\n1,507,260.60\nOf which: Deposits\n41,699.08\n41,707.71\n41,789.64\n41,694.93\n41,685.64\n41,331.00\n41,321.07\n41,366.44\n103,759.15\n130,917.86\n160,540.01\n246,390.26\n1,163,537.70\n1,507,260.60\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n501,265.03\n581,867.98\n601,960.04\n564,719.10\n596,769.14\n610,482.01\n615,364.93\n602,470.67\n587,676.91\n608,356.98\n660,006.89\n697,699.62\n799,943.18\n824,028.92\nOther Financial Corporations\n25,383.43\n89,858.36\n90,693.36\n93,173.28\n95,076.36\n92,865.03\n104,283.41\n109,152.02\n121,634.35\n114,497.79\n117,613.99\n114,408.61\n125,389.20\n109,687.61\nState and Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nPublic Non Financial Corporations\n456,059.23\n471,658.22\n488,482.00\n450,432.88\n480,359.88\n496,226.90\n489,746.16\n476,287.89\n449,006.47\n471,903.09\n517,709.02\n557,929.72\n651,399.20\n681,030.34\nPrivate Sector\n19,822.36\n20,351.40\n22,784.69\n21,112.94\n21,332.89\n21,390.08\n21,335.35\n17,030.76\n17,036.09\n21,956.10\n24,683.88\n25,361.29\n23,154.78\n33,310.97\nClaims on Other Depository Corporations\n289,295.02\n301,846.44\n306,132.79\n306,155.60\n316,177.15\n379,173.85\n393,735.95\n418,332.74\n330,900.10\n339,662.09\n332,906.49\n339,094.15\n363,908.20\n339,280.92\nOf which: Loans\n289,295.02\n301,846.44\n306,132.79\n306,155.60\n316,177.15\n379,173.85\n393,735.95\n418,332.74\n330,900.10\n339,662.09\n332,906.49\n339,094.15\n363,908.20\n339,280.92\nOther Liabilities to ODCs\n1,762,290.93\n1,996,438.50 2,054,141.40 2,395,312.12 2,682,243.65 2,626,664.31 2,739,770.63 3,367,888.49 2,509,676.59 2,400,005.83 2,538,511.34\n3,047,017.11\n2,552,569.32\n2,468,731.01\nOf which: Aftrades Balances\n445,143.93\n463,755.70\n489,416.24\n483,497.99\n388,000.00\n388,000.00\n388,000.00\n388,000.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Securities\n1,181,913.83\n1,425,661.22\n1,486,721.94\n1,823,973.56\n2,083,075.39\n1,964,016.64\n2,135,541.16\n2,726,599.60\n2,314,291.29\n2,248,370.43\n2,348,400.79\n2,738,904.07\n2,200,323.26\n2,004,097.96\nOther Items(Net)\n217,077.15\n266,557.51\n279,985.61\n290,045.02\n310,072.68\n264,615.13\n236,221.85\n254,583.08\n-2,658,437.58\n-4,088,430.87\n-4,792,135.28\n-9,670,637.45\n-13,022,965.26\n-20,737,108.96\nShares and Other Equity\n360,766.36\n433,728.61\n444,671.00\n454,134.87\n466,363.60\n467,391.73\n475,653.19\n464,456.24\n-2,402,232.48\n-3,873,725.31\n-4,589,274.75\n-9,310,271.34\n-12,940,837.81\n-21,517,328.05\nOther Items(Net)\n-209,652.49\n-209,162.93\n-210,954.74\n-210,281.05\n-224,343.90\n-219,916.07\n-260,446.06\n-226,959.59\n-264,872.60\n-231,341.56\n-251,223.69\n-375,255.92\n-445,539.22\n-342,958.09\nLiabilities to Other Resident Sectors\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n1,598.56\n2,697.45\n0.00\n0.00\nDeposits and Securities Excluded from Base Money\n65,963.28\n41,991.83\n46,269.35\n46,191.19\n68,052.98\n17,139.46\n21,014.72\n17,086.44\n8,667.49\n16,636.01\n46,764.60\n12,192.36\n363,411.77\n1,123,177.17\nMonetary Base Incl. foreign currency clearing balances\nMonetary Base \n2,513,332.55\n2,789,945.53 2,967,852.44 2,891,742.55 2,860,575.65 3,135,918.22 3,258,220.86 3,029,004.88 3,201,051.95 3,172,354.75 3,019,535.69\n2,522,708.23\n3,575,573.83\n4,057,364.05\nBond Coins\n80,593.64\n80,812.71\n84,872.46\n86,177.94\n86,521.28\n86,507.82\n86,558.34\n86,671.08\n86,794.17\n86,775.25\n87,096.23\n87,423.30\n87,606.55\n87,843.40\nBond Notes\n307,595.14\n366,738.89\n399,951.59\n422,933.66\n434,935.71\n436,225.70\n435,985.12\n436,131.63\n436,825.58\n442,551.17\n449,762.88\n476,656.02\n510,197.39\n609,392.70\nLiabilities to ODCs\n2,112,051.33\n2,294,108.09 2,406,600.92 2,296,266.80 2,282,181.13 2,545,140.17 2,718,472.21 2,431,429.69 2,620,801.43 2,556,061.06 2,410,617.85\n1,861,836.07\n2,877,247.31\n3,233,425.19\nReserve Deposits\n0.00\n0.00\n0.00\n0.00\n0.00\n399,643.22\n393,439.26\n395,649.57\n387,117.92\n379,777.18\n382,618.00\n406,733.21\n434,435.93\n497,763.67\nOther\n2,112,051.33\n2,294,108.09 2,406,600.92 2,296,266.80 2,282,181.13 2,145,496.95 2,325,032.95 2,035,780.12 2,233,683.51 2,176,283.88 2,027,999.85\n1,455,102.86\n2,442,811.38\n2,735,661.52\nPrivate Deposits\n13,092.44\n48,285.84\n76,427.47\n86,364.15\n56,937.52\n68,044.53\n17,205.18\n74,772.49\n56,630.77\n86,967.28\n72,058.73\n96,792.85\n100,522.59\n126,702.75\nSource: Reserve Bank of Zimbabwe,2019\nTABLE 2: CENTRAL BANK SURVEY (ZWL$'000)\n \n \n \n15 \n \n \n \n \nJun-18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\nJun-19\nJul-19\nNet Foreign Assets\n-290,766.49\n-224,241.66\n-290,736.16\n-260,008.17\n-273,324.14\n-184,141.52\n-119,075.49\n-107,886.85\n252,506.07\n126,699.85\n530,512.93\n1,160,120.10\n1,898,531.40\n3,371,448.01\nClaims on Non Residents\n263,405.79\n320,981.77\n244,837.54\n299,508.91\n308,206.84\n359,199.07\n405,848.41\n422,803.54\n1,034,721.60\n1,060,697.66\n1,491,439.91\n2,534,779.04\n3,814,622.33\n5,390,485.00\nOf Which: Foreign Currency\n58,497.99\n61,888.30\n72,330.74\n61,523.80\n70,410.81\n84,619.66\n94,485.74\n113,427.55\n256,754.30\n263,233.15\n363,481.95\n484,193.31\n882,204.61\n968,769.48\nDeposits\n204,103.25\n206,979.87\n171,610.30\n237,075.06\n236,895.75\n273,677.73\n310,319.40\n307,770.08\n776,043.16\n794,324.48\n1,123,646.46\n2,044,144.29\n2,921,840.60\n4,408,575.22\nOther\n804.54\n52,113.60\n896.50\n910.05\n900.29\n901.68\n1,043.27\n1,605.91\n1,924.14\n3,140.03\n4,311.50\n6,441.45\n10,577.12\n13,140.31\nLess Liabilities to Non Residents\n554,172.27\n545,223.42\n535,573.70\n559,517.07\n581,530.99\n543,340.59\n524,923.90\n530,690.39\n782,215.53\n933,997.80\n960,926.97\n1,374,658.95\n1,916,090.93\n2,019,036.99\nOf Which: Deposits\n76,977.43\n71,906.41\n61,764.73\n91,213.72\n115,149.81\n86,609.01\n81,573.41\n81,808.20\n172,568.31\n242,800.88\n584,272.60\n719,211.04\n769,197.36\n857,462.40\nLoans\n477,194.84\n473,317.01\n473,808.97\n468,303.36\n466,381.17\n456,731.58\n443,350.50\n448,882.19\n609,647.22\n691,196.93\n376,654.37\n655,447.91\n1,146,893.57\n1,161,574.59\nOther\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nNet Domestic Assets (NDA)\n8,741,831.36\n \n9,132,705.19\n \n9,249,553.63\n9,504,710.75\n9,498,354.86\n9,414,390.34\n9,609,733.01\n9,416,378.45\n9,616,197.64\n9,946,870.18\n10,259,117.71\n11,286,731.69\n12,297,290.28\n13,113,076.98\nDomestic Claims\n6,989,263.27\n \n7,168,985.87\n \n7,330,485.27\n7,336,573.99\n7,369,479.55\n7,453,866.93\n7,383,648.03\n7,269,272.57\n7,432,949.46\n7,397,817.63\n7,404,854.99\n8,045,985.17\n9,072,247.98\n9,320,549.24\nNet Claims on Central Government\n2,783,534.43\n \n3,262,756.31\n \n3,337,486.31\n3,106,488.93\n3,058,372.68\n3,131,141.29\n3,009,005.06\n3,000,509.55\n3,037,716.85\n2,985,126.74\n2,869,381.76\n2,867,736.19\n2,877,878.25\n3,435,662.08\nClaims on Central Government\n2,872,745.05\n \n3,295,887.08\n \n3,369,878.18\n3,151,116.56\n3,110,532.15\n3,179,855.88\n3,050,272.06\n3,042,695.82\n3,082,202.87\n3,033,052.26\n2,925,238.58\n2,916,600.07\n2,922,401.88\n3,486,218.14\nSecurities\n2,865,309.79\n \n3,291,375.03\n \n3,362,827.03\n3,145,693.06\n3,105,944.58\n3,172,866.99\n3,044,069.03\n3,038,282.27\n3,076,367.83\n3,028,779.35\n2,921,262.97\n2,912,674.94\n2,918,508.31\n3,484,041.96\nLoans\n7,435.26\n \n4,512.05\n \n7,051.15\n5,423.50\n4,587.57\n6,988.90\n6,203.03\n4,413.55\n5,835.04\n4,272.91\n3,975.61\n3,925.13\n3,893.57\n2,176.18\nOther \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nLess Liabilities to Central Government\n89,210.62\n \n33,130.77\n \n32,391.88\n44,627.63\n52,159.47\n48,714.59\n41,267.00\n42,186.27\n44,486.02\n47,925.52\n55,856.82\n48,863.88\n44,523.63\n50,556.06\nOf which: Deposits\n89,210.62\n \n33,130.77\n \n32,391.88\n44,627.63\n52,159.47\n48,714.59\n41,267.00\n42,186.27\n44,486.02\n47,925.52\n55,856.82\n48,863.88\n44,523.63\n50,556.06\nOther \n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nClaims on Other Sectors\n4,205,728.83\n \n3,906,229.56\n \n3,992,998.96\n4,230,085.05\n4,311,106.88\n4,322,725.64\n4,374,642.97\n4,268,763.02\n4,395,232.61\n4,412,690.88\n4,535,473.23\n5,178,248.99\n6,194,369.73\n5,884,887.16\nOther Financial Corporations\n42,406.27\n \n43,993.11\n \n51,283.01\n52,083.02\n54,398.03\n54,059.74\n52,327.23\n54,418.20\n50,257.50\n44,732.42\n43,887.25\n54,890.96\n54,960.04\n65,223.35\nState and Local Government\n49,509.94\n \n54,356.85\n \n52,796.97\n51,597.49\n39,591.11\n37,039.73\n37,159.65\n35,335.26\n34,253.92\n35,077.27\n34,576.44\n33,304.49\n31,319.18\n31,193.91\nPublic Non Financial Corporations\n222,545.56\n \n181,987.35\n \n186,736.20\n257,375.31\n234,036.46\n263,061.19\n247,840.74\n283,738.23\n268,828.08\n402,172.40\n469,638.39\n698,899.67\n1,002,528.07\n276,304.88\nPrivate Sector\n3,891,267.06\n \n3,625,892.25\n \n3,702,182.78\n3,869,029.24\n3,983,081.27\n3,968,564.98\n4,037,315.34\n3,895,271.33\n4,041,893.11\n3,930,708.81\n3,987,371.15\n4,391,153.86\n5,105,562.43\n5,512,165.03\nClaims on the Central Bank\n3,089,939.84\n \n3,471,170.30\n \n3,498,784.50\n3,799,833.82\n3,811,216.96\n3,726,890.73\n3,969,951.54\n3,950,061.19\n3,824,458.20\n3,953,460.88\n4,199,075.04\n4,187,900.42\n4,644,902.11\n5,448,316.23\nCurrency\n8,986.260\n \n20,609.732\n \n23,132.54\n18,241.51\n39,931.81\n30,576.25\n20,500.90\n49,039.52\n59,650.72\n62,487.55\n45,182.42\n98,685.70\n126,257.46\n232,427.59\nReserves\n3,080,953.58\n \n3,450,560.57\n \n3,475,651.96\n3,781,592.32\n3,771,285.15\n3,696,314.48\n3,949,450.64\n3,901,021.67\n3,764,807.48\n3,890,973.33\n4,153,892.62\n4,089,214.73\n4,518,644.65\n5,215,888.64\nSecurities\n0.00\nOther Claims\n0.00\nLiabilities to the Central Bank\n119,810.71\n \n118,944.97\n \n136,950.59\n142,244.29\n147,588.60\n213,749.43\n229,588.29\n239,529.91\n158,887.13\n165,849.57\n148,327.69\n148,760.15\n150,275.70\n151,973.32\nOther Items(Net)\n1,217,561.04\n \n1,388,506.01\n \n1,442,765.55\n1,489,452.77\n1,534,753.06\n1,552,617.90\n1,514,278.27\n1,563,425.41\n1,482,322.89\n1,238,558.76\n1,196,484.63\n798,393.76\n1,269,584.10\n1,503,815.17\nShares and Other Equity\n1,632,378.01\n \n1,758,871.23\n \n1,795,060.19\n1,681,574.79\n1,721,033.27\n1,754,363.61\n1,805,725.63\n1,817,292.21\n1,857,666.31\n2,186,634.46\n2,438,054.11\n2,453,288.57\n3,130,496.35\n3,418,099.11\nLiabilities to other ressident sectors\n21,559.36\n \n32,602.91\n \n33,341.07\n46,596.88\n42,026.50\n42,314.24\n39,048.36\n39,216.29\n42,570.71\n42,675.76\n28,813.83\n46,518.61\n43,639.00\n27,408.22\nOther Items(Net)\n(436,376.33)\n \n(402,968.13)\n \n-385,635.72\n-238,718.90\n-228,306.72\n-244,059.95\n-330,495.73\n-293,083.09\n-417,914.13\n-990,751.46\n-1,270,383.32\n-1,701,413.42\n-1,904,551.24\n-1,941,692.17\nDeposits and Securities Included in Broad Mone\n8,451,064.87\n \n8,908,463.53\n \n8,958,817.46\n9,244,702.58\n9,225,030.71\n9,230,248.82\n9,490,657.52\n9,308,491.60\n9,868,703.71\n10,073,570.03\n10,789,630.64\n12,446,851.79\n14,195,821.68\n16,484,524.99\nDeposits Included in Broad Money\n8,384,220.79\n \n8,818,964.20\n \n8,892,333.01\n \n9,192,282.61\n \n9,163,326.94\n \n9,179,384.09\n \n9,432,073.48\n \n9,249,189.49\n \n9,796,911.59\n \n9,999,066.93\n \n10,698,817.40\n \n12,307,411.86\n \n14,024,153.85\n \n16,316,355.79\n \nTransferable Deposits\n6,925,080.42\n7,317,443.43\n7,368,088.98\n7,703,301.37\n7,735,492.56\n7,748,956.93\n7,923,171.01\n \n7,782,391.98\n \n8,323,687.16\n \n8,562,013.77\n \n9,211,180.01\n \n10,695,596.51\n \n12,595,266.96\n \n14,675,509.25\n \n of which FCAs\n149,041.84\n139,613.34\n343,305.00\n \n418,087.02\n \n1,190,521.05\n \n1,417,836.22\n \n1,753,489.14\n \n3,031,536.97\n \n3,887,787.41\n \n4,049,120.88\n \nOther Deposits\n1,459,140.37\n \n1,501,520.77\n \n1,524,244.03\n \n1,488,981.24\n \n1,427,834.38\n \n1,430,427.17\n1,508,902.47\n \n1,466,797.51\n1,473,224.43\n1,437,053.15\n1,487,637.39\n1,611,815.34\n1,428,886.89\n1,640,846.54\nMoney Market Instruments\n66,844.08\n \n89,499.33\n \n66,484.46\n \n52,419.97\n \n61,703.77\n \n50,864.73\n \n58,584.04\n \n59,302.10\n \n71,792.12\n \n74,503.10\n \n90,813.24\n \n139,439.93\n \n171,667.83\n \n168,169.20\n \nSource:Reserve Bank of Zimbabwe,2019\nTABLE 3 : OTHER DEPOSITORY CORPORATIONS SURVEY ( ZWL$ '000)\n \n \n \n16 \n \n \n \n \n \n \n \n \nForeign\nTOTAL\nEnd of\nNotes\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nOther \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nGovernemt\nOther2\nGovernment\nLocal \nPublic \n Institutional \nOther cliams\nContigent Assets\nOther Assets\nNon Financial \nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\nGovernment\nEnterprises\nUnits\nAssets\n2017\nJun\n7.4\n \n57.1\n \n1,674.9\n \n350.3\n \n92.1\n \n110.6\n2,014.2\n19.0\n16.0\n35.0\n47.9\n16.5\n82.9\n3,494.3\n92.8\n533.5\n408.9\n649.6\n9,702.8\nJul\n7.1\n \n45.2\n \n1,807.4\n \n302.3\n \n63.1\n \n103.6\n1,982.8\n17.2\n26.1\n34.4\n45.2\n16.9\n116.8\n3,417.1\n86.8\n513.6\n432.9\n635.8\n9,654.3\nAug\n12.3\n \n40.6\n \n2,061.9\n \n276.6\n \n165.3\n \n7.9\n2,100.9\n16.3\n26.3\n64.6\n41.3\n18.0\n145.5\n3,494.5\n78.6\n531.8\n403.7\n639.5\n10,125.5\nSep\n12.0\n \n38.1\n \n2,110.4\n \n226.8\n \n179.7\n \n31.3\n2,248.9\n16.1\n23.5\n65.0\n41.5\n15.6\n118.8\n3,554.4\n78.0\n472.8\n415.6\n655.1\n10,303.5\nOct\n8.7\n \n41.8\n \n2,139.3\n \n254.1\n \n190.8\n \n61.0\n2,372.1\n15.4\n24.4\n65.1\n34.8\n17.8\n99.6\n3,599.1\n82.0\n432.4\n459.3\n667.3\n10,564.9\nNov\n9.8\n \n46.1\n \n2,315.5\n \n289.8\n \n184.2\n \n74.3\n2,487.7\n18.8\n23.5\n65.4\n32.3\n19.6\n107.3\n3,608.7\n76.8\n417.7\n505.6\n672.5\n10,955.5\nDec\n12.6\n \n58.1\n \n2,592.0\n \n276.0\n \n213.4\n \n66.6\n2,397.2\n26.8\n23.5\n66.3\n29.4\n19.4\n145.5\n3,581.3\n92.2\n508.3\n509.3\n699.9\n11,317.7\n2018\nJan\n23.4\n \n66.9\n \n2,528.5\n \n291.2\n \n111.9\n \n81.9\n2,336.0\n34.5\n23.5\n65.9\n26.3\n20.6\n155.3\n3,461.2\n74.6\n501.0\n457.8\n700.8\n10,961.1\nFeb\n20.0\n \n46.8\n \n2,516.8\n \n347.6\n \n114.2\n \n96.2\n2,313.4\n33.5\n23.5\n66.1\n24.3\n21.1\n145.4\n3,527.1\n22.2\n507.8\n434.5\n697.8\n10,958.3\nMar\n16.7\n \n57.9\n \n2,457.7\n \n312.8\n \n139.2\n \n99.5\n2,434.8\n32.8\n23.5\n66.7\n19.2\n15.9\n127.5\n3,637.8\n24.2\n504.1\n487.4\n710.3\n11,168.1\nApr\n14.9\n \n61.9\n \n2,423.5\n \n337.0\n \n120.8\n \n78.5\n2,558.9\n32.0\n24.7\n67.0\n13.4\n20.9\n121.2\n3,674.0\n22.1\n532.0\n459.2\n715.7\n11,277.5\nMay\n14.2\n \n71.7\n \n2,543.0\n \n477.8\n \n138.6\n \n85.7\n2,814.9\n30.9\n25.0\n66.9\n8.4\n20.9\n134.4\n3,740.3\n12.0\n458.9\n457.2\n718.2\n11,819.1\nJun\n9.0\n \n58.5\n \n3,081.0\n \n509.8\n \n120.0\n \n84.1\n2,865.3\n30.1\n26.2\n66.5\n7.4\n19.4\n196.4\n3,829.3\n38.6\n551.4\n448.1\n730.7\n12,671.8\nJul\n20.6\n \n61.9\n \n3,450.6\n \n466.4\n \n111.6\n \n95.4\n3,291.4\n33.3\n0.0\n67.5\n4.5\n21.0\n182.0\n3,500.6\n153.9\n611.4\n472.5\n732.0\n13,276.5\nAug\n23.1\n \n72.3\n \n3,475.7\n \n377.8\n \n105.3\n \n66.3\n3,362.8\n32.2\n0.0\n67.3\n7.1\n20.6\n186.7\n3,585.1\n102.0\n647.7\n489.9\n736.1\n13,358.0\nSep\n18.2\n \n61.5\n \n3,781.6\n \n398.1\n \n159.1\n \n78.0\n3,145.7\n31.2\n45.2\n68.1\n5.4\n20.4\n212.2\n3,734.2\n119.7\n637.4\n527.8\n742.6\n13,786.4\nOct\n39.9\n \n70.4\n \n3,771.3\n \n368.3\n \n185.5\n \n51.4\n3,105.9\n30.2\n45.2\n68.4\n4.6\n9.4\n188.8\n3,838.0\n132.0\n647.5\n537.8\n743.0\n13,837.7\nNov\n30.6\n \n84.6\n \n3,696.3\n \n300.6\n \n209.8\n \n63.9\n3,172.9\n28.9\n45.2\n68.7\n7.0\n8.1\n217.7\n3,813.2\n141.9\n633.2\n581.9\n742.4\n13,846.8\nDec\n20.5\n \n94.5\n \n3,949.5\n \n439.6\n \n235.5\n \n74.8\n3,044.1\n28.0\n43.4\n69.2\n6.2\n9.2\n204.3\n3,870.5\n151.2\n573.8\n612.5\n812.4\n14,239.0\n2019\nJan\n49.0\n \n113.4\n \n3,901.0\n \n401.9\n \n261.6\n \n46.1\n3,038.3\n27.3\n94.6\n68.7\n4.4\n8.1\n189.2\n3,773.5\n109.1\n517.2\n592.3\n827.7\n14,023.5\nFeb\n59.7\n \n256.8\n \n3,764.8\n \n357.1\n \n570.4\n \n205.7\n3,076.4\n26.5\n60.5\n2.0\n5.8\n7.7\n208.3\n3,991.5\n100.5\n490.7\n669.1\n880.0\n14,733.6\nMar\n62.5\n \n263.2\n \n3,891.0\n \n432.9\n \n739.3\n \n55.1\n3,028.8\n25.5\n61.5\n4.5\n4.3\n9.5\n340.7\n3,845.0\n129.0\n523.7\n954.5\n1,205.2\n15,576.2\nApr\n45.2\n \n363.5\n \n4,153.9\n \n578.9\n \n1,031.9\n \n91.7\n2,921.3\n25.0\n61.8\n4.0\n4.0\n9.6\n407.8\n3,899.7\n131.9\n620.5\n1,135.4\n1,304.8\n16,790.9\nMay\n98.7\n \n484.2\n \n4,089.2\n \n694.1\n \n1,890.1\n \n154.1\n2,912.7\n23.9\n62.1\n4.2\n3.9\n9.4\n636.8\n4,303.9\n144.3\n910.1\n2,031.0\n1,532.3\n19,985.1\nJun\n126.3\n \n882.2\n \n4,518.6\n \n560.2\n \n2,383.0\n \n538.9\n2,918.5\n22.6\n63.1\n6.6\n3.9\n8.7\n929.4\n5,011.5\n163.0\n1,606.5\n1,621.9\n2,120.4\n23,485.3\nJul\n232.4\n \n968.8\n \n5,605.6\n \n370.4\n \n3,738.0\n \n801.9\n2,962.9\n22.2\n103.4\n5.5\n2.2\n9.0\n164.6\n5,364.7\n228.7\n1,587.7\n2,124.1\n2,345.3\n26,637.3\nPublic \nEnterprises\nTABLE 4.1: OTHER DEPOSITORY CORPORATIONS -ASSETS\nZWL$ millions\nDebt Securities\nLoans and Advances\n \n \n \n17 \n \n \n \n \n \n \nDebt Securities Foreign Liabilities\nCapital\nContigent\nOther\nTOTAL\nand\nLiablities\nLiablities\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2017\n Jun\n3,851.4\n825.6\n1,538.9\n6,215.9\n497.6\n73.7\n6,787.2\n65.7\n259.5\n0.0\n108.9\n46.6\n1,455.9\n533.5\n445.6\n9,702.8\n Jul\n3,845.0\n837.2\n1,600.1\n6,282.3\n503.0\n78.1\n6,863.3\n66.3\n162.2\n0.0\n99.5\n35.6\n1,463.2\n513.6\n450.7\n9,654.3\n Aug\n4,257.2\n927.5\n1,604.9\n6,789.6\n451.2\n88.3\n7,329.1\n71.1\n158.2\n0.0\n79.1\n22.8\n1,478.4\n531.8\n454.9\n10,125.5\n Sep\n4,622.2\n932.4\n1,571.4\n7,126.0\n383.4\n55.2\n7,564.6\n55.8\n151.1\n0.0\n67.4\n32.1\n1,494.5\n472.8\n465.2\n10,303.5\n Oct\n4,825.8\n1,010.8\n1,460.8\n7,297.4\n410.7\n43.1\n7,751.2\n63.0\n153.9\n0.0\n73.1\n42.0\n1,537.5\n432.4\n511.7\n10,564.9\n Nov\n5,090.7\n1,047.9\n1,450.2\n7,588.7\n454.9\n34.7\n8,078.3\n66.5\n151.3\n0.0\n84.5\n60.2\n1,562.7\n417.7\n534.3\n10,955.5\n Dec\n5,144.5\n1,127.4\n1,401.7\n7,673.6\n407.8\n94.6\n8,176.0\n68.6\n173.1\n113.7\n100.7\n6.2\n1,663.1\n508.3\n508.1\n11,317.7\n2018\nJan\n4,640.2\n1,008.1\n1,454.0\n7,102.2\n406.5\n107.3\n7,616.1\n65.1\n444.8\n115.1\n49.1\n2.6\n1,645.3\n501.0\n522.1\n10,961.1\nFeb\n4,633.7\n989.2\n1,458.8\n7,081.7\n418.7\n101.2\n7,601.7\n75.4\n435.4\n111.2\n92.8\n2.9\n1,620.1\n507.8\n511.0\n10,958.3\nMar\n4,732.9\n1,007.5\n1,491.0\n7,231.4\n365.0\n114.7\n7,711.0\n77.3\n460.8\n140.5\n89.2\n6.9\n1,654.7\n504.1\n523.4\n11,168.1\nApr\n4,907.7\n1,066.6\n1,374.6\n7,349.0\n387.8\n95.6\n7,832.3\n84.0\n453.1\n82.4\n68.8\n16.1\n1,641.9\n532.0\n567.0\n11,277.5\nMay\n5,172.9\n1,138.2\n1,442.5\n7,753.6\n442.8\n107.4\n8,303.8\n88.0\n554.0\n101.5\n94.9\n19.9\n1,671.5\n458.9\n526.5\n11,819.1\nJune\n5,650.6\n1,274.7\n1,459.1\n8,384.4\n438.0\n89.2\n8,911.6\n66.8\n554.0\n119.8\n173.4\n21.6\n1,707.5\n551.4\n565.7\n12,671.8\nJuly\n5,902.3\n1,415.3\n1,501.5\n8,819.1\n424.4\n33.1\n9,276.7\n89.5\n545.1\n118.9\n132.9\n32.6\n1,846.0\n611.4\n623.4\n13,276.5\nAug\n6,005.7\n1,362.6\n1,524.2\n8,892.5\n399.6\n32.4\n9,324.5\n66.5\n535.4\n137.0\n119.5\n33.3\n1,882.9\n647.7\n611.2\n13,358.0\nSep\n6,281.7\n1,421.8\n1,489.0\n9,192.4\n439.0\n44.6\n9,676.1\n52.4\n559.4\n142.2\n129.1\n46.6\n1,913.4\n637.4\n629.7\n13,786.4\nOct\n6,345.7\n1,390.0\n1,427.8\n9,163.5\n435.2\n52.2\n9,650.8\n61.7\n581.4\n147.6\n93.4\n42.0\n1,957.6\n647.5\n655.7\n13,837.7\nNov\n6,419.8\n1,329.4\n1,430.4\n9,179.6\n366.8\n48.7\n9,595.1\n50.9\n543.1\n213.7\n74.8\n42.3\n1,991.6\n633.2\n702.1\n13,846.8\nDec\n6,601.1\n1,322.2\n1,508.9\n9,432.2\n394.5\n41.3\n9,868.0\n58.6\n524.7\n229.6\n187.8\n39.0\n2,057.7\n573.8\n699.7\n14,239.0\n2019\nJan\n6,626.6\n1,155.9\n1,466.8\n9,249.4\n381.0\n42.2\n9,672.5\n59.3\n530.5\n239.5\n188.3\n39.2\n2,047.0\n517.2\n729.8\n14,023.5\nFeb\n7,168.7\n1,155.1\n1,473.2\n9,797.1\n387.8\n44.5\n10,229.3\n71.8\n782.0\n158.9\n151.7\n42.6\n2,145.1\n490.7\n661.5\n14,733.6\nMar\n7,435.2\n1,127.0\n1,437.1\n9,999.2\n372.7\n47.9\n10,419.9\n74.5\n933.8\n165.8\n140.9\n42.7\n2,349.0\n523.7\n925.8\n15,576.2\nApr\n7,968.0\n1,243.3\n1,795.8\n11,007.1\n390.9\n55.9\n11,453.8\n90.8\n652.7\n148.3\n173.5\n28.8\n2,551.4\n620.5\n1,071.0\n16,790.9\nMay\n9,316.8\n1,379.0\n1,932.4\n12,628.2\n462.9\n48.9\n13,139.9\n139.4\n1,053.9\n148.8\n206.7\n46.5\n2,556.6\n910.1\n1,783.2\n19,985.1\nJun\n11,021.9\n1,573.5\n1,737.2\n14,332.6\n422.0\n44.5\n14,799.2\n171.7\n1,607.6\n150.3\n216.7\n43.6\n3,240.7\n1,606.5\n1,649.0\n23,485.3\nJul\n13,014.4\n1,661.3\n1,949.2\n16,624.9\n432.6\n50.6\n17,108.1\n168.2\n1,710.5\n152.0\n225.8\n27.4\n3,522.6\n1,587.7\n2,135.1\n26,637.3\nSource:Reserve Bank of Zimbabwe,2019\nTABLE 4.2 : OTHER DEPOSITORY CORPORATIONS - LIABILITIES \nDeposits\nAmounts Owing to\nZWL$ millions\n \n \n \n18 \n \n \n \n \n \n \nTOTAL\nEnd of\nForeign\nBond\nNotes\nBalances\nBalances with\nBalances\nOther Claims \nLocal\nPublic\nOther \nContigent \nNon Financial \n Notes &\n&\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nGovernment\nGovernment\nEnterprises\n Institutional Units3\nOther claims\nAssets\nOther Assets\nAssets\nCoins\nCoin\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2017\nJun\n7.0\n \n53.3\n \n1,578.5\n \n141.4\n \n82.2\n \n110.6\n \n1,786.8\n \n-\n \n16.0\n \n35.0\n \n47.9\n \n16.5\n \n82.2\n \n2,583.5\n \n23.9\n \n533.5\n \n273.6\n \n497.3\n \n7,869.2\n \nJul\n6.7\n \n40.9\n \n1,684.5\n \n137.6\n \n53.7\n \n103.6\n \n1,752.4\n \n-\n \n26.1\n \n34.4\n \n45.2\n \n16.9\n \n116.3\n \n2,495.4\n \n24.2\n \n513.6\n \n295.5\n \n482.1\n \n7,829.0\n \nAug\n11.8\n \n37.1\n \n1,882.4\n \n124.3\n \n161.2\n \n7.9\n \n1,856.2\n \n-\n \n26.3\n \n64.6\n \n41.3\n \n18.0\n \n145.0\n \n2,538.1\n \n23.8\n \n531.8\n \n272.6\n \n485.7\n \n8,228.1\n \nSep\n11.4\n \n35.8\n \n1,961.8\n \n109.6\n \n172.7\n \n31.3\n \n1,998.0\n \n-\n \n23.5\n \n65.0\n \n41.5\n \n15.6\n \n118.2\n \n2,585.7\n \n28.3\n \n472.8\n \n281.3\n \n487.7\n \n8,440.0\n \nOct\n8.1\n \n40.5\n \n1,961.8\n \n143.7\n \n175.7\n \n61.0\n \n2,106.6\n \n-\n \n24.4\n \n65.1\n \n34.8\n \n17.8\n \n99.1\n \n2,607.0\n \n29.4\n \n432.4\n \n287.8\n \n508.9\n \n8,604.1\n \nNov\n9.0\n \n45.1\n \n2,126.7\n \n161.1\n \n174.7\n \n74.3\n \n2,230.4\n \n-\n \n23.5\n \n65.4\n \n32.3\n \n19.6\n \n106.9\n \n2,618.1\n \n26.4\n \n417.7\n \n324.2\n \n511.4\n \n8,966.9\n \nDec\n11.4\n \n55.3\n \n2,373.9\n \n141.5\n \n203.5\n \n66.6\n \n2,128.7\n \n-\n \n23.5\n \n66.3\n \n29.4\n \n19.4\n \n145.0\n \n2,579.8\n \n40.0\n \n508.3\n \n324.5\n \n536.4\n \n9,253.6\n \n2018\nJan\n22.4\n \n64.1\n \n2,294.5\n \n192.1\n \n103.4\n \n81.9\n \n2,143.2\n \n-\n \n23.5\n \n65.9\n \n26.3\n \n20.6\n \n154.8\n \n2,451.1\n \n28.7\n \n501.0\n \n294.2\n \n538.9\n \n9,006.6\n \nFeb\n18.3\n \n44.0\n \n2,296.8\n \n223.7\n \n108.3\n \n96.2\n \n2,109.3\n \n-\n \n23.5\n \n66.1\n \n24.3\n \n21.1\n \n145.0\n \n2,461.5\n \n28.7\n \n507.8\n \n290.6\n \n536.3\n \n9,001.5\n \nMar\n14.8\n \n53.6\n \n2,238.8\n \n240.7\n \n124.5\n \n99.5\n \n2,164.0\n \n-\n \n23.5\n \n66.7\n \n19.2\n \n15.9\n \n127.1\n \n2,535.8\n \n30.4\n \n504.1\n \n325.8\n \n552.3\n \n9,136.6\n \nApr\n13.5\n \n56.7\n \n2,207.9\n \n275.0\n \n116.7\n \n78.5\n \n2,314.9\n \n-\n \n24.7\n \n67.0\n \n13.4\n \n20.9\n \n120.8\n \n2,519.8\n \n28.3\n \n532.0\n \n299.0\n \n554.9\n \n9,244.0\n \nMay\n12.9\n \n62.8\n \n2,309.0\n \n339.5\n \n130.1\n \n85.7\n \n2,562.4\n \n-\n \n25.0\n \n66.9\n \n8.4\n \n20.9\n \n134.0\n \n2,556.2\n \n23.9\n \n458.9\n \n307.9\n \n555.3\n \n9,659.8\n \nJune\n7.5\n \n52.6\n \n2,848.5\n \n331.8\n \n117.3\n \n84.1\n \n2,538.3\n \n-\n \n26.2\n \n66.5\n \n7.4\n \n19.4\n \n196.0\n \n2,662.2\n \n25.5\n \n551.4\n \n302.9\n \n563.4\n \n10,401.0\n \nJuly\n17.9\n \n54.3\n \n3,189.6\n \n281.1\n \n109.3\n \n95.4\n \n2,949.2\n \n-\n \n-\n \n67.5\n \n4.5\n \n21.0\n \n182.0\n \n2,414.6\n \n26.0\n \n611.4\n \n322.5\n \n565.1\n \n10,911.4\n \nAug\n21.0\n \n67.8\n \n3,196.7\n \n232.3\n \n102.5\n \n66.3\n \n3,014.9\n \n-\n \n-\n \n67.3\n \n7.1\n \n20.6\n \n186.7\n \n2,491.0\n \n29.8\n \n647.7\n \n329.4\n \n566.3\n \n11,047.4\n \nSep\n16.3\n \n58.2\n \n3,487.9\n \n305.3\n \n137.8\n \n78.0\n \n2,789.8\n \n-\n \n45.2\n \n68.1\n \n5.4\n \n20.4\n \n212.2\n \n2,577.1\n \n36.7\n \n637.4\n \n357.4\n \n571.8\n \n11,405.0\n \nOct\n33.1\n \n68.0\n \n3,505.8\n \n272.1\n \n173.1\n \n51.4\n \n2,728.8\n \n-\n \n45.2\n \n68.4\n \n4.6\n \n9.4\n \n188.8\n \n2,697.4\n \n38.7\n \n647.5\n \n353.2\n \n569.2\n \n11,454.9\n \nNov\n25.8\n \n81.4\n \n3,384.4\n \n264.6\n \n198.2\n \n63.9\n \n2,793.9\n \n-\n \n45.2\n \n68.7\n \n7.0\n \n8.1\n \n217.7\n \n2,672.3\n \n46.1\n \n633.2\n \n406.6\n \n569.8\n \n11,486.9\n \nDec\n18.2\n \n89.9\n \n3,737.0\n \n317.3\n \n224.4\n \n74.8\n \n2,633.7\n \n-\n \n43.4\n \n69.2\n \n6.2\n \n9.2\n \n204.3\n \n2,707.6\n \n53.7\n \n573.8\n \n406.2\n \n633.9\n \n11,802.7\n \n2019\nJan\n42.05\n \n106.91\n \n3,766.70\n \n338.09\n \n249.77\n \n46.14\n \n2,621.20\n \n-\n \n61.02\n \n68.66\n \n4.41\n \n8.06\n \n189.15\n \n2,594.53\n \n33.84\n \n517.24\n \n428.82\n \n649.94\n \n11,726.5\n \nFeb\n52.63\n \n238.67\n \n3,601.94\n \n293.36\n \n549.59\n \n205.65\n \n2,675.29\n \n-\n \n60.52\n \n2.00\n \n5.84\n \n7.71\n \n208.31\n \n2,784.17\n \n31.04\n \n490.74\n \n472.78\n \n696.82\n \n12,377.1\n \nMar\n59.17\n \n244.62\n \n3,729.81\n \n393.22\n \n712.08\n \n55.05\n \n2,635.68\n \n-\n \n61.52\n \n4.53\n \n4.27\n \n9.53\n \n340.66\n \n2,660.90\n \n25.33\n \n523.72\n \n755.57\n \n971.53\n \n13,187.2\n \nApr\n40.82\n \n331.97\n \n3,876.83\n \n492.10\n \n981.80\n \n91.75\n \n2,590.97\n \n-\n \n61.79\n \n3.95\n \n3.98\n \n9.62\n \n407.85\n \n2,721.57\n \n24.55\n \n620.52\n \n935.27\n \n1,002.47\n \n14,197.8\n \nMay\n94.59\n \n444.70\n \n3,886.07\n \n571.50\n \n1,747.69\n \n154.08\n \n2,508.43\n \n-\n \n62.12\n \n4.20\n \n3.93\n \n9.43\n \n636.78\n \n3,056.86\n \n34.46\n \n910.14\n \n1,832.95\n \n1,142.77\n \n17,100.7\n \nJun\n119.69\n \n810.71\n \n4,104.17\n \n413.18\n \n2,244.98\n \n538.88\n \n2,596.97\n \n-\n \n63.09\n \n6.62\n \n3.89\n \n8.73\n \n929.36\n \n3,667.45\n \n37.02\n \n1,606.53\n \n1,374.23\n \n1,621.33\n \n20,146.8\n \nJul\n224.75\n \n791.31\n \n5,081.19\n \n275.44\n \n3,602.89\n \n801.93\n \n2,640.55\n \n-\n \n103.36\n \n5.49\n \n2.18\n \n9.00\n \n164.58\n \n4,043.75\n \n32.65\n \n1,587.68\n \n1,873.44\n \n1,722.66\n \n22,962.9\n \nSource:Reserve Bank of Zimbabwe,2019\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations, \nTABLE 5.1: COMMERCIAL BANKS -ASSETS\nZWL$ millions\nDebt Securities\nLoans and Advances\n \n \n \n19 \n \n \n \n \n \n \n \nZWL$ millions\nEnd of\nDemand\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nDebt Securities\nForeign Liabilities\nRBZ\nOther Depository Other Finacial \nCapital\nContigent\nOther\nfrom the public\nCorporations\n Corporations\n Corporations\nand\nLiablities\nLiablities\nTOTAL\nReserves\n2017\n Jun\n3,792.5\n332.7\n949.8\n5,075.1\n423.9\n51.7\n5,550.7\n54.9\n237.5\n0.0\n43.7\n45.8\n1,095.2\n533.5\n308.0\n7,869.2\n Jul\n3,786.1\n326.0\n1,021.7\n5,133.8\n432.5\n56.2\n5,622.6\n55.3\n140.0\n0.0\n42.2\n35.3\n1,096.8\n513.6\n323.2\n7,829.0\n Aug\n4,198.3\n342.7\n1,010.3\n5,551.4\n380.7\n66.3\n5,998.3\n58.3\n136.9\n0.0\n41.8\n22.5\n1,116.1\n531.8\n322.4\n8,228.1\n Sep\n4,561.7\n355.5\n1,003.7\n5,921.0\n303.1\n32.7\n6,256.8\n42.3\n133.7\n0.0\n50.4\n31.9\n1,129.8\n472.8\n322.3\n8,440.0\n Oct\n4,771.6\n340.7\n927.8\n6,040.2\n329.8\n21.1\n6,391.1\n50.8\n127.5\n0.0\n52.5\n41.7\n1,167.6\n432.4\n340.5\n8,604.1\n Nov\n5,036.5\n380.1\n918.9\n6,335.5\n349.5\n12.7\n6,697.6\n54.0\n124.7\n0.0\n61.8\n59.9\n1,189.6\n417.7\n361.6\n8,966.9\n Dec\n5,143.9\n409.2\n850.3\n6,403.4\n302.6\n72.1\n6,778.1\n56.5\n147.2\n113.7\n78.0\n5.7\n1,205.7\n508.3\n360.4\n9,253.6\n2018\nJan\n4,640.2\n369.3\n903.3\n5,912.7\n301.3\n85.0\n6,299.0\n53.6\n418.7\n115.1\n26.2\n2.4\n1,205.0\n501.0\n385.6\n9,006.6\nFeb\n4,633.7\n375.8\n920.2\n5,929.7\n298.5\n78.6\n6,306.8\n58.1\n409.1\n111.2\n59.1\n2.4\n1,174.8\n507.8\n372.1\n9,001.5\nMar\n4,732.9\n368.8\n930.7\n6,032.4\n244.7\n92.4\n6,369.5\n61.1\n419.5\n140.5\n54.8\n6.4\n1,196.4\n504.1\n384.3\n9,136.6\nApr\n4,907.7\n394.4\n874.8\n6,176.9\n243.4\n72.8\n6,493.1\n67.4\n413.5\n82.4\n35.2\n15.7\n1,201.5\n532.0\n403.4\n9,244.0\nMay\n5,172.9\n416.2\n917.2\n6,506.3\n246.2\n85.2\n6,837.7\n66.8\n514.1\n101.5\n63.7\n19.4\n1,224.6\n458.9\n373.2\n9,659.8\nJun\n5,650.6\n504.3\n897.4\n7,052.2\n254.8\n66.9\n7,373.9\n45.0\n514.7\n119.8\n116.5\n21.1\n1,259.1\n551.4\n399.5\n10,401.0\nJul\n5,902.3\n527.0\n901.0\n7,330.3\n296.0\n12.2\n7,638.4\n72.0\n507.6\n118.9\n102.5\n16.8\n1,380.1\n611.4\n463.6\n10,911.4\nAug\n6,005.7\n540.8\n930.8\n7,477.3\n266.6\n11.5\n7,755.3\n46.4\n501.5\n137.0\n101.3\n15.4\n1,408.6\n647.7\n434.3\n11,047.4\nSep\n6,281.7\n556.4\n927.2\n7,765.3\n273.0\n23.5\n8,061.8\n40.9\n503.5\n142.2\n108.4\n21.1\n1,434.8\n637.4\n454.9\n11,405.0\nOct\n6,340.3\n509.5\n898.1\n7,747.9\n284.2\n31.1\n8,063.2\n49.3\n525.1\n147.6\n72.2\n16.5\n1,461.0\n647.5\n472.6\n11,454.9\nNov\n6,411.0\n503.9\n861.0\n7,775.9\n232.8\n27.6\n8,036.4\n41.2\n487.5\n213.7\n58.6\n17.8\n1,490.0\n633.2\n508.4\n11,486.9\nDec\n6,582.3\n495.0\n910.9\n7,988.3\n255.0\n19.7\n8,262.9\n43.3\n469.5\n229.6\n147.5\n15.6\n1,551.3\n573.8\n509.2\n11,802.7\n2019\nJan\n6,603.6\n440.8\n919.5\n7,964.0\n240.5\n20.5\n8,225.0\n42.6\n475.0\n239.5\n130.2\n14.4\n1,545.2\n517.2\n537.2\n11,726.5\nFeb\n7,129.0\n426.7\n923.8\n8,479.6\n248.9\n22.8\n8,751.4\n57.3\n647.5\n158.9\n119.1\n14.4\n1,626.6\n490.7\n511.1\n12,377.0\nMar\n7,350.5\n451.8\n915.0\n8,717.3\n225.9\n26.4\n8,969.6\n56.8\n778.3\n165.8\n108.4\n17.0\n1,804.3\n523.7\n763.2\n13,187.2\nApr\n7,861.8\n447.1\n1,280.5\n9,589.3\n260.3\n34.4\n9,884.1\n76.0\n487.7\n148.3\n145.3\n14.8\n1,935.7\n620.5\n885.4\n14,197.8\nMay\n9,143.2\n544.3\n1,412.7\n11,100.2\n309.4\n27.5\n11,437.1\n126.8\n789.2\n148.8\n164.7\n16.0\n1,916.9\n910.1\n1,591.0\n17,100.7\nJun\n10,758.5\n567.5\n1,279.7\n12,605.8\n290.5\n23.1\n12,919.4\n159.0\n1,271.1\n150.3\n161.8\n16.5\n2,409.1\n1,606.5\n1,453.0\n20,146.8\nJul\n12,675.9\n672.2\n1,367.7\n14,715.9\n357.4\n29.4\n15,102.7\n146.4\n1,254.8\n152.0\n205.6\n10.4\n2,583.9\n1,587.7\n1,919.4\n22,962.9\nTABLE 5.2 : COMMERCIAL BANKS - LIABILITIES\nDeposits\nAmounts Owing to\n \n \n \n20 \n \n \n \n \n \n21 \n \n \nForeign\nOther Assets\nNon Financial \nTOTAL\nEnd of\nNotes\nAssets\nBond\n&\nBalances\nBalances with\nBalances\nOther Claims \n Notes &\nCoin\nwith\nOther Depository \nwith\non\nGovernment1\nLocal Governemt\nPublic Enterprises\nOther2\nMortgages\nGovernment\nOther\nCoins\nRBZ\nCorporations\nForeign Banks\nNon-residents\nSecurities\nsecurities\n2017\nJun\n0.3\n \n3.7\n \n65.9\n \n208.8\n \n9.8\n \n-\n \n165.3\n \n19.0\n \n-\n \n-\n \n387.6\n \n-\n \n452.9\n \n109.6\n \n126.0\n \n1,548.8\n \nJul\n0.4\n \n3.9\n \n105.8\n \n164.6\n \n9.2\n \n-\n \n168.4\n \n17.2\n \n-\n \n-\n \n391.9\n \n-\n \n451.9\n \n110.9\n \n127.3\n \n1,551.5\n \nAug\n0.4\n \n3.1\n \n142.8\n \n152.0\n \n3.9\n \n-\n \n186.7\n \n16.3\n \n-\n \n-\n \n409.3\n \n-\n \n465.5\n \n104.7\n \n127.2\n \n1,611.9\n \nSep\n0.6\n \n1.8\n \n108.4\n \n117.0\n \n6.7\n \n-\n \n193.0\n \n16.1\n \n-\n \n-\n \n412.7\n \n-\n \n475.2\n \n113.4\n \n130.1\n \n1,574.8\n \nOct\n0.6\n \n1.1\n \n145.7\n \n110.0\n \n14.8\n \n-\n \n193.9\n \n15.4\n \n-\n \n-\n \n420.7\n \n-\n \n493.6\n \n149.9\n \n130.4\n \n1,676.0\n \nNov\n0.7\n \n0.9\n \n138.8\n \n128.4\n \n8.7\n \n-\n \n193.6\n \n18.8\n \n-\n \n-\n \n420.9\n \n-\n \n489.0\n \n160.4\n \n133.0\n \n1,693.3\n \nDec\n1.0\n \n2.6\n \n170.6\n \n134.3\n \n9.1\n \n-\n \n195.1\n \n26.8\n \n-\n \n-\n \n402.3\n \n-\n \n516.8\n \n163.2\n \n135.5\n \n1,757.3\n \n2018\nJan\n0.9\n \n2.3\n \n197.4\n \n98.7\n \n7.8\n \n-\n \n129.8\n \n34.5\n \n-\n \n-\n \n413.2\n \n-\n \n508.7\n \n144.9\n \n136.1\n \n1,674.3\n \nFeb\n1.5\n \n1.8\n \n172.4\n \n123.5\n \n5.5\n \n-\n \n141.3\n \n33.5\n \n-\n \n-\n \n414.8\n \n-\n \n507.9\n \n125.7\n \n135.7\n \n1,663.6\n \nMar\n1.4\n \n3.4\n \n175.9\n \n72.1\n \n14.1\n \n-\n \n212.6\n \n32.8\n \n-\n \n-\n \n411.4\n \n-\n \n539.4\n \n142.8\n \n132.3\n \n1,738.2\n \nApr\n1.1\n \n4.3\n \n185.5\n \n61.9\n \n3.6\n \n-\n \n184.4\n \n32.0\n \n-\n \n-\n \n413.3\n \n-\n \n582.7\n \n141.6\n \n135.2\n \n1,745.7\n \nMay\n1.0\n \n7.6\n \n196.3\n \n138.2\n \n8.1\n \n-\n \n191.0\n \n30.9\n \n-\n \n-\n \n415.0\n \n-\n \n608.4\n \n128.1\n \n137.4\n \n1,862.0\n \nJune\n1.2\n \n4.9\n \n188.6\n \n177.8\n \n1.9\n \n-\n \n266.2\n \n30.1\n \n-\n \n-\n \n413.9\n \n-\n \n614.3\n \n124.0\n \n141.5\n \n1,964.5\n \nJuly\n1.8\n \n6.6\n \n207.1\n \n185.1\n \n1.7\n \n-\n \n283.2\n \n33.3\n \n-\n \n-\n \n423.5\n \n-\n \n636.1\n \n128.2\n \n141.1\n \n2,047.7\n \nAug\n1.6\n \n3.7\n \n224.7\n \n145.3\n \n2.4\n \n-\n \n288.9\n \n32.2\n \n-\n \n-\n \n428.2\n \n-\n \n579.4\n \n139.1\n \n143.7\n \n1,989.2\n \nSep\n1.9\n \n2.9\n \n245.6\n \n92.6\n \n20.8\n \n-\n \n291.1\n \n31.2\n \n-\n \n-\n \n430.3\n \n-\n \n650.2\n \n148.1\n \n144.4\n \n2,059.1\n \nOct\n4.9\n \n2.1\n \n220.0\n \n95.8\n \n11.9\n \n-\n \n318.9\n \n30.2\n \n-\n \n-\n \n427.7\n \n-\n \n639.8\n \n154.2\n \n147.0\n \n2,052.5\n \nNov\n3.6\n \n2.9\n \n243.3\n \n35.7\n \n10.4\n \n-\n \n320.7\n \n28.9\n \n-\n \n-\n \n433.5\n \n-\n \n635.7\n \n148.0\n \n145.8\n \n2,008.5\n \nDec\n2.3\n \n4.3\n \n157.4\n \n121.3\n \n10.4\n \n-\n \n339.4\n \n28.0\n \n-\n \n-\n \n444.8\n \n-\n \n645.9\n \n179.7\n \n151.9\n \n2,085.6\n \n2019\nJan\n6.3\n \n4.6\n108.2\n \n63.5\n10.9\n \n-\n \n343.8\n \n27.3\n33.6\n \n-\n \n438.0\n \n-\n \n649.3\n \n136.7\n151.2\n \n1,973.3\n \nFeb\n5.4\n \n17.6\n120.6\n \n62.8\n18.1\n \n-\n \n339.6\n \n26.5\n-\n \n-\n \n416.1\n \n-\n \n696.1\n \n171.1\n156.7\n \n2,030.8\n \nMar\n2.6\n \n18.0\n126.3\n \n38.6\n23.9\n \n-\n \n331.7\n \n25.5\n-\n \n-\n \n415.1\n \n-\n \n710.1\n \n172.1\n207.4\n \n2,071.2\n \nApr\n3.7\n \n30.6\n220.3\n \n85.0\n47.6\n \n-\n \n271.6\n \n25.0\n-\n \n-\n \n414.1\n \n-\n \n705.0\n \n169.0\n276.2\n \n2,247.8\n \nMay\n3.9\n \n38.4\n162.2\n \n115.4\n139.0\n \n-\n \n345.5\n \n23.9\n-\n \n-\n \n406.2\n \n-\n \n776.6\n \n165.7\n363.4\n \n2,540.1\n \nJun\n6.3\n \n69.8\n361.6\n \n144.5\n132.4\n \n-\n \n265.8\n \n22.6\n-\n \n-\n \n421.7\n \n-\n \n873.6\n \n210.5\n473.0\n \n2,981.8\n \nJul\n6.5\n \n174.7\n473.9\n \n89.7\n131.1\n \n-\n \n258.3\n \n22.2\n-\n \n-\n \n416.0\n \n-\n \n934.6\n \n203.1\n565.6\n \n3,275.8\n \nSource:Reserve Bank of Zimbabwe,2019\nNotes\n1.Government securities include treasuary bills and bonds\n2.Includes bankers acceptances, discounted bills and negotiable certificates of deposits.\n3.Includes households, other financial corporations, \nTABLE 6.1: BUILDING SOCIETIES -ASSETS\nZWL$ millions\nDebt Securities\nLoans and Advances\n \n \n \n22 \n \n \n \n \n \nDebt Securities\nForeign Liabilities\nCapital\nOther\nTOTAL\nand\nLiablities\nEnd of\nSavings\nTime Deposits\nTotal Deposits \nOther Depository\nGovernment \nTotal\nRBZ\nOther Depository Other Finacial \nReserves\nfrom the public\nCorporations\n Corporations\n Corporations\n2017\n Jun\n401.8\n544.4\n946.2\n70.7\n16.5\n1,033.4\n22.0\n22.0\n0.0\n65.2\n0.8\n330.0\n75.4\n1,548.8\n Jul\n430.3\n531.5\n961.8\n70.4\n16.1\n1,048.3\n22.2\n22.2\n0.0\n57.3\n0.3\n334.5\n66.8\n1,551.5\n Aug\n495.3\n546.5\n1,041.8\n70.6\n16.3\n1,128.6\n24.0\n21.3\n0.0\n37.4\n0.4\n328.9\n71.4\n1,611.9\n Sep\n488.5\n517.9\n1,006.5\n80.3\n16.7\n1,103.4\n24.8\n17.4\n0.0\n17.0\n0.2\n334.0\n78.0\n1,574.8\n Oct\n583.1\n475.2\n1,058.3\n80.9\n16.2\n1,155.4\n23.4\n26.4\n0.0\n20.6\n0.3\n338.0\n111.8\n1,676.0\n Nov\n570.3\n473.5\n1,043.8\n105.4\n16.3\n1,165.4\n23.7\n26.6\n0.0\n22.7\n0.3\n341.5\n113.0\n1,693.3\n Dec\n608.2\n496.6\n1,104.9\n105.2\n16.5\n1,226.6\n23.4\n25.9\n0.0\n22.7\n0.5\n371.7\n86.7\n1,757.3\n2018\nJan\n544.7\n497.1\n1,041.7\n105.2\n16.4\n1,163.3\n22.8\n26.1\n0.0\n22.9\n0.2\n362.1\n77.0\n1,674.3\nFeb\n512.0\n480.5\n992.5\n120.3\n16.8\n1,129.5\n28.5\n26.3\n0.0\n33.6\n0.5\n366.0\n79.2\n1,663.6\nMar\n535.1\n507.8\n1,042.9\n120.3\n16.5\n1,179.7\n27.5\n41.3\n0.0\n34.5\n0.5\n378.2\n76.5\n1,738.2\nApr\n568.0\n452.6\n1,020.5\n144.4\n17.0\n1,181.9\n27.9\n39.7\n0.0\n33.6\n0.4\n358.5\n103.7\n1,745.7\nMay\n613.8\n475.1\n1,089.0\n196.6\n16.4\n1,302.0\n32.4\n40.0\n0.0\n31.2\n0.5\n363.1\n92.8\n1,862.0\nJune\n658.5\n507.9\n1,166.5\n183.2\n16.4\n1,366.0\n33.1\n39.3\n0.0\n56.9\n0.4\n363.5\n105.2\n1,964.5\nJuly\n770.2\n542.9\n1,313.1\n128.5\n15.0\n1,456.6\n28.7\n37.5\n0.0\n30.4\n15.8\n378.9\n99.8\n2,047.7\nAug\n703.4\n534.7\n1,238.0\n133.0\n15.0\n1,386.0\n31.3\n33.9\n0.0\n18.3\n17.9\n385.8\n116.0\n1,989.2\nSep\n749.8\n502.3\n1,252.2\n166.0\n15.1\n1,433.2\n22.8\n55.9\n0.0\n20.7\n25.5\n388.6\n112.3\n2,059.1\nOct\n772.5\n471.9\n1,244.4\n151.0\n15.1\n1,410.5\n23.7\n56.3\n0.0\n21.2\n25.5\n389.9\n125.4\n2,052.5\nNov\n699.9\n511.9\n1,211.9\n134.0\n15.1\n1,360.9\n21.0\n55.6\n0.0\n16.2\n24.5\n396.1\n134.2\n2,008.5\nDec\n713.2\n540.0\n1,253.1\n139.6\n15.1\n1,407.8\n26.5\n55.3\n0.0\n40.2\n23.4\n400.1\n132.3\n2,085.6\n2019\nJan\n633.8\n490.2\n1,124.0\n140.5\n15.0\n1,279.6\n27.9\n55.5\n0.0\n58.1\n24.8\n392.8\n134.7\n1,973.3\nFeb\n661.3\n492.3\n1,153.6\n138.8\n15.0\n1,307.4\n25.8\n134.5\n0.0\n32.6\n28.2\n366.7\n135.6\n2,030.8\nMar\n655.2\n473.9\n1,129.1\n146.8\n15.0\n1,290.9\n29.0\n155.6\n0.0\n32.5\n25.7\n391.4\n146.2\n2,071.2\nApr\n782.3\n460.0\n1,242.3\n130.5\n14.9\n1,387.7\n26.0\n165.0\n0.0\n28.2\n14.1\n457.7\n169.2\n2,247.8\nMay\n895.0\n464.3\n1,359.4\n153.5\n15.0\n1,527.9\n23.9\n264.7\n0.0\n41.9\n30.6\n477.5\n173.6\n2,540.1\nJun\n1,154.3\n406.8\n1,561.1\n131.5\n15.0\n1,707.7\n23.9\n336.5\n0.0\n54.8\n27.1\n664.7\n167.0\n2,981.8\nJul\n1,192.2\n538.1\n1,730.3\n75.2\n14.9\n1,820.4\n33.0\n455.7\n0.0\n20.2\n17.0\n739.6\n189.9\n3,275.8\nSource:Reserve Bank of Zimbabwe,2019\nAmounts Owing to\nTABLE 6.2: BUILDING SOCIETIES -LIABILITIES\nZWL$ millions\n \n \n \n23 \n \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISATIONS\n \n \n \n \n2017\nJun\n431,677.5\n45,018.0\n16,989.2\n311,641.4\n14,435.6\n266,917.5\n343,590.2\n126,542.8\n417,469.8\n37,849.5\n595,749.5\n12,001.6\n2,619,882.5\nJul\n459,128.0\n52,500.1\n11,717.0\n255,319.0\n14,541.0\n255,591.2\n311,364.4\n131,420.5\n422,799.8\n39,630.7\n609,112.5\n14,464.3\n2,577,588.5\nAug\n457,861.9\n52,622.6\n11,736.0\n262,602.7\n17,438.9\n256,802.3\n313,868.5\n138,714.9\n420,653.6\n41,089.3\n617,686.4\n15,194.2\n2,606,271.3\nSep\n457,157.2\n48,477.1\n12,117.9\n340,506.4\n21,660.1\n265,082.3\n331,929.6\n124,822.8\n393,491.3\n41,117.0\n619,867.0\n16,061.2\n2,672,289.8\nOct\n460,475.1\n46,588.0\n12,273.6\n329,020.8\n21,810.6\n262,118.2\n317,587.0\n126,041.6\n383,374.3\n41,351.4\n634,561.2\n16,061.2\n2,651,263.1\nNov\n477,486.1\n46,318.3\n12,005.2\n323,990.0\n21,811.0\n261,421.1\n316,225.5\n123,307.2\n379,542.7\n32,215.3\n649,034.3\n16,061.2\n2,659,418.0\nDec\n489,695.6\n54,162.9\n10,119.0\n334,030.3\n21,844.6\n269,399.3\n307,802.0\n126,719.0\n375,161.7\n31,701.6\n621,421.9\n13,938.1\n2,655,996.0\n2018\nJan\n479,109.6\n59,336.8\n9,442.4\n289,531.3\n20,569.7\n258,035.0\n271,453.8\n106,425.1\n390,052.9\n32,328.6\n617,303.0\n14,394.7\n2,547,982.8\nFeb\n488,203.1\n59.,977.6\n9,271.6\n315,569.6\n20,133.1\n258,263.6\n285,045.1\n108,649.0\n393,604.9\n31,636.6\n618,377.4\n15,010.6\n2,543,764.6\nMar\n484,764.7\n64,826.5\n11,050.5\n344,731.3\n15,203.3\n274,150.2\n303,649.2\n114,431.9\n363,449.4\n32,793.4\n640,496.9\n19,893.1\n2,669,440.4\nApr\n485,790.0\n63,948.2\n10,904.2\n344,532.1\n15,015.2\n271,071.8\n294,270.8\n112,692.1\n333,633.8\n31,103.5\n631,920.5\n22,066.0\n2,616,948.2\nMay\n501,783.7\n63,555.3\n10,933.5\n362,939.6\n15,079.8\n358,553.4\n317,666.7\n117,123.0\n338,846.3\n31,523.1\n651,444.0\n24,226.4\n2,793,674.8\nJun\n475,105.7\n66,796.8\n13,907.7\n385,583.3\n15,079.8\n344,917.3\n323,212.1\n117,146.6\n335,216.9\n34,457.6\n655,427.0\n34,163.4\n2,801,014.3\nJul\n463,286.3\n70,905.2\n18,924.1\n383,314.7\n14,976.4\n140,624.6\n274,507.8\n113,776.3\n309,209.5\n37,474.0\n652,652.7\n34,402.1\n2,514,053.7\nAug\n470,756.1\n79,237.1\n15,167.3\n331,672.8\n15,021.9\n144,100.7\n271,000.5\n111,960.2\n306,022.7\n37,341.2\n666,649.4\n34,402.1\n2,483,332.1\nSep\n451,745.3\n79,055.7\n15,021.6\n341,851.7\n15,021.9\n144,799.6\n263,994.2\n112,656.6\n320,788.5\n36,914.6\n666,971.5\n64,407.1\n2,513,228.2\nOct\n453,068.3\n74,931.8\n16,036.5\n389,851.7\n15,156.8\n165,252.7\n268,933.2\n111,956.6\n313,376.8\n36,118.6\n680,445.7\n12,855.7\n2,537,984.3\nNov\n444,130.8\n133,137.6\n14,884.1\n313,733.0\n15,156.8\n165,419.8\n269,459.9\n149,908.1\n316,738.8\n45,693.2\n679,403.7\n12,265.4\n2,559,931.1\nDec\n492,669.9\n78,176.7\n15,958.0\n340,422.7\n14,425.5\n165,648.7\n253,354.3\n113,596.5\n347,242.2\n40,695.4\n669,879.6\n12,254.3\n2,544,323.9\n2019\nJan\n525,176.7\n80,480.9\n20,199.4\n349,755.6\n15,294.0\n158,458.9\n255,380.4\n123,772.8\n358,554.2\n42,355.5\n666,797.1\n16,335.7\n2,612,561.3\nFeb\n521,988.1\n79,066.7\n10,931.1\n352,797.8\n14,699.0\n80,894.7\n253,027.0\n124,474.7\n389,523.0\n40,923.5\n644,320.9\n11,446.6\n2,524,093.1\nMar\n538,072.7\n87,791.3\n18,211.5\n379,233.1\n14,556.7\n205,466.5\n270,360.1\n133,324.8\n407,638.0\n43,541.4\n731,600.3\n11,476.6\n2,841,272.8\nApr\n584,205.3\n96,516.9\n22,430.9\n421,676.7\n15,968.0\n236,000.3\n310,449.7\n193,315.8\n387,730.2\n44,465.7\n788,749.6\n14,486.6\n3,115,995.7\nMay\n712,661.5\n98,826.6\n27,802.4\n466,620.0\n17,425.9\n317,055.8\n368,550.6\n250,912.5\n441,731.0\n43,682.6\n901,283.4\n14,096.6\n3,660,649.0\nJun\n940,505.8\n82,926.8\n30,534.7\n566,391.1\n169,400.8\n876,820.4\n354,648.6\n331,070.0\n404,941.1\n49,207.3\n898,523.5\n14,258.9\n4,566,768.2\nJul\n1,060,152.4\n108,889.3\n38,005.8\n685,729.8\n22,484.8\n470,421.8\n497,581.3\n333,137.4\n643,722.0\n51,560.7\n1,111,698.0\n7,683.2\n5,031,066.5\nSource:Reserve Bank of Zimbabwe,2019\n/1 Including the only merchant bank still in operation.\nTABLE 7.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES/1\nZWL$ ('000)\n \n \n \n24 \n \n \n \n \n \nEND OF\nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATIONS\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nINVESTMENTS ORGANISATIONS\n2017\nJun\n295,920.4\n109,938.0\n248,436.3\n712,648.0\n334,368.7\n1,121,023.5\n408,604.0\n185,262.3\n1,521,876.3\n107,327.1\n697,997.7\n74,195.4\n5,817,597.8\nJul\n309,864.7\n126,628.5\n262,827.7\n587,617.1\n341,371.5\n1,143,423.8\n423,846.6\n191,273.6\n1,599,344.4\n99,509.8\n680,622.6\n76,164.4\n5,842,494.6\nAug\n302,611.3\n149,014.9\n296,550.6\n914,686.8\n346,236.8\n1,131,207.5\n453,584.0\n169,521.2\n1,562,637.2\n111,394.6\n746,644.5\n90,999.4\n6,275,088.8\nSep\n348,786.3\n146,383.0\n286,092.4\n796,517.1\n340,224.7\n1,072,979.9\n571,373.7\n211,077.0\n1,705,640.6\n122,645.6\n747,874.4\n72,255.0\n6,421,849.6\nOct\n345,521.0\n138,274.9\n238,975.9\n778,597.1\n355,135.9\n1,138,203.7\n565,046.4\n259,285.2\n1,694,691.4\n123,908.8\n741,652.0\n72,255.0\n6,451,547.3\nNov\n336,339.3\n144,708.5\n239,524.3\n927,820.8\n362,515.4\n986,824.6\n629,010.4\n250,132.7\n1,694,043.5\n131,768.3\n761,400.5\n72,255.0\n6,536,343.3\nDec\n317,794.8\n160,261.7\n284,829.7\n890,549.4\n375,616.4\n1,073,707.0\n686,933.4\n257,197.2\n1,712,823.9\n143,466.1\n711,031.6\n62,444.8\n6,676,655.9\n2018\nJan\n380,283.8\n151,436.0\n257,298.2\n918,787.6\n365,354.6\n1,050,097.7\n652,999.0\n248,933.0\n1,757,391.8\n141,913.2\n669,049.8\n67,904.7\n6,661,449.4\nFeb\n455,217.0\n224,070.1\n263,961.9\n897,453.2\n399,016.2\n949,795.6\n674,828.4\n354,052.8\n1,701,611.4\n107,779.5\n680,060.2\n67,686.4\n6,775,532.7\nMar\n451,992.5\n142,332.9\n296,310.0\n825,805.5\n376,593.0\n1,001,674.3\n597,436.8\n253,127.4\n1,827,464.3\n163,971.7\n597,436.8\n63,604.3\n6,597,749.5\nApr\n476,448.1\n144,564.6\n310,795.6\n806,144.7\n364,824.6\n988,527.2\n649,893.0\n255,761.8\n1,892,415.2\n179,252.3\n712,565.9\n65,398.2\n6,846,591.4\nMay\n494,612.8\n152,567.4\n350,409.2\n874,140.5\n374,089.9\n1,097,970.7\n700,891.9\n271,892.0\n1,913,394.9\n186,192.5\n745,592.7\n64,970.7\n7,226,725.2\nJun\n465,984.0\n164,242.3\n391,142.3\n948,703.0\n368,260.1\n1,140,652.9\n754,981.1\n324,355.8\n2,160,400.4\n200,774.3\n779,012.8\n64,786.3\n7,763,295.2\nJul\n445,780.0\n226,433.0\n413,409.1\n955,925.6\n420,416.6\n1,120,834.7\n760,588.2\n321,078.4\n2,192,743.2\n200,523.6\n822,857.6\n64,786.3\n7,945,376.2\nAug\n429,439.9\n189,498.0\n386,595.6\n980,354.1\n429,659.7\n1,091,202.9\n782,008.7\n297,412.3\n1,968,724.0\n196,068.8\n836,719.1\n64,786.3\n7,652,469.3\nSep\n447,556.4\n206,194.1\n382,491.5\n1,186,453.7\n444,599.1\n1,070,365.1\n811,296.2\n302,579.3\n2,059,093.1\n247,105.7\n906,767.6\n84,514.5\n8,149,016.3\nOct\n445,484.4\n199,531.1\n391,968.4\n984,701.5\n469,891.9\n1,153,855.9\n846,453.3\n315,808.5\n2,110,864.2\n260,816.9\n817,328.3\n67,915.2\n8,064,619.7\nNov\n489,192.9\n194,869.4\n391,442.4\n925,081.3\n441,534.3\n1,248,555.8\n827,349.4\n316,945.5\n2,059,370.1\n261,756.5\n825,642.2\n66,458.7\n8,048,198.5\nDec\n494,011.3\n201,871.0\n531,888.3\n1,034,592.5\n428,738.7\n1,196,503.2\n823,081.9\n331,251.3\n2,063,550.8\n278,659.0\n802,507.6\n63,361.3\n8,250,016.9\n2019\nJan\n505,422.9\n391,022.0\n497,976.2\n1,034,948.2\n411,945.9\n1,187,606.7\n882,289.7\n322,030.3\n2,154,902.3\n135,871.6\n763,189.5\n63,064.3\n8,350,269.7\nFeb\n512,602.3\n374,750.6\n394,709.1\n936,123.6\n449,800.9\n904,919.4\n855,348.4\n347,405.5\n2,355,866.1\n138,685.8\n776,949.7\n63,097.1\n8,110,258.7\nMar\n526,564.2\n343,684.3\n376,205.6\n937,743.4\n393,489.3\n1,317,757.7\n861,574.9\n380,295.4\n2,099,331.1\n141,677.2\n773,726.4\n63,094.9\n8,215,144.4\nApr\n632,972.5\n255,945.6\n1,010,978.7\n90,282.6\n462,133.1\n1,535,772.6\n890,606.5\n325,814.6\n2,413,535.6\n320,213.5\n876,646.5\n90,282.6\n9,963,832.2\nMay\n832,073.6\n305,410.9\n1,321,039.7\n1,177,925.1\n522,764.9\n1,646,358.6\n1,142,369.6\n372,594.9\n2,765,341.2\n371,372.0\n965,202.7\n93,188.9\n11,515,642.2\nJun\n1,001,633.6\n309,108.9\n1,124,005.3\n1,337,171.0\n546,572.5\n2,210,293.9\n1,319,789.8\n562,858.0\n3,493,214.3\n434,828.2\n1,070,319.7\n52,118.6\n13,461,913.9\nJul\n1,171,245.4\n353,388.5\n1,504,911.5\n1,241,910.1\n654,904.7\n2,553,878.7\n1,383,215.2\n585,108.2\n4,131,588.8\n463,161.9\n1,304,402.7\n71,943.6\n15,419,659.2\nSource: Reserve Bank of Zimbabwe,2019\n TABLE 7.2: SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS \nZWL$ ('000)\n \n \n \n25 \n \n \n \n \n \n \n26 \n \n \nEnd of\nNominal Lending \nRates 1\nIndividuals \nCorporate\n2017 \nJan\n4.00-18.00\n10.61\n6.68\nFeb\n4.00-18.00\n10.06\n6.52\nMar\n4.00-18.00\n9.12\n7.02\nApr\n4.00-18.00\n9.25\n7.02\nMay\n4.00-18.00\n9.17\n7.03\nJun\n4.00-18.00\n9.01\n7.05\nJul\n4.00-18.00\n8.94\n7.05\nAug\n4.00-18.00\n8.88\n6.95\nSep\n4.45-18.00\n8.86\n7.01\nOct\n4.45-18.00\n9.66\n7.06\nNov\n4.45-18.00\n9.66\n7.03\nDec\n4.45-18.00\n9.39\n7.00\n2018\nJan\n4.45-18.00\n9.33\n6.99\nFeb\n4.45-18.00\n9.57\n6.93\nMar\n4.45-18.00\n9.64\n6.98\nApr\n4.00-18.00\n9.32\n7.08\nMay\n4.00-18.00\n9.28\n7.09\nJun\n4.00-18.00\n9.32\n7.14\nJul\n4.00-18.00\n9.75\n6.97\nAug\n4.00-18.00\n9.87\n7.10\nSep\n4.00-18.00\n9.56\n7.11\nOct\n4.00-18.00\n9.47\n7.38\nNov\n4.00-18.00\n9.49\n7.38\nDec\n4.00-18.00\n9.48\n7.39\n2019\nJan\n4.00-18.00\n9.47\n7.40\nFeb\n4.00-18.00\n9.23\n7.30\nMar\n4.00-18.00\n9.23\n7.31\nApr\n4.00-18.00\n9.30\n7.38\nMay\n4.00-22.00\n9.31\n7.33\nJun\n4.00-22.00\n9.15\n7.67\nJul\n4.00-35.00\n9.54\n8.40\nSource:Reserve Bank of Zimbabwe, 2019\nNotes\nTABLE 8.1: LENDING RATES (percent per annum)\n1. Nominal lending rates depict the range of rates quoted by banks.\nCommercial Banks\nWeighted Lending Rates\n \n27 \n \n \nEND OF\nSAVINGS\n3 MONTHS\n2017 \nJan\n0.50-6.00\n1.00-17.00\nFeb\n0.50-6.00\n1.00-17.00\nMar\n0.50-6.00\n1.00-17.00\nApr\n0.50-6.00\n1.00-17.00\nMay\n0.50-6.00\n1.00-9.50**\nJun\n0.50-6.00\n1.00-12.00\nJul\n0.50-6.00\n1.00-12.00\nAug\n0.50-6.00\n1.00-12.00\nSep\n0.50-12.00\n0.75-8.00\nOct\n0.50-12.00\n0.75-8.00\nNov\n0.50-12.00\n0.75-8.00\nDec\n0.50-12.00\n0.75-8.00\n2018\nJan\n0.22-12.00\n0.75-8.00\nFeb\n0.22-12.00\n0.75-8.00\nMar\n0.22-12.00\n0.75-8.00\nApr\n0.22-12.00\n0.75-8.00\nMay\n0.22-12.00\n0.75-8.00\nJun\n0.22-12.00\n0.75-8.00\nJul\n0.22-12.00\n0.75-8.00\nAug\n0.22-12.00\n0.75-8.00\nSep\n0.22-12.00\n0.75-8.00\nOct\n0.22-12.00\n0.75-8.00\nNov\n0.22-12.00\n1.00-8.00\nDec\n0.22-12.00\n1.00-6.75\n2019\nJan\n0.22-12.00\n1.00-8.00\nFeb\n0.22-12.00\n1.00-6.75\nMar\n0.22-12.00\n1.00-8.00\nApr\n0.22-12.00\n1.00-8.00\nMay\n0.22-12.00\n1.00-8.00\nJun\n0.22-12.00\n1.00-8.00\nJul\n0.22-12.00\n1.00-8.00\n Source:Reserve Bank of Zimbabwe, 2019\n* Deposit rates depict the range of rates qouted by banks. \n **Banks have adjusted their costs of holding deposits following the call by the RBZ to reduce lending rates. \nTABLE 8.2 : BANK DEPOSIT RATES (percent per annum)\nCOMMERCIAL BANKS\n \n 28 \n \n \nALCOHOLIC \nBEVERAGES \nCLOTHING\nHOUSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT COMMUNICATION RECREATION \n&\nEDUCATION RESTAURANTS \n&\nMISC.\nTOTAL NON\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2017 \nJan\n-0.14\n-0.15\n0.10\n0.34\n-0.15\n-0.75\n0.44\n0.27\n0.00\n0.29\n0.08\n0.01\n0.80\n0.23\nFeb\n0.05\n-0.14\n0.13\n0.70\n-0.03\n0.11\n0.00\n-0.04\n0.00\n0.18\n0.52\n0.23\n1.56\n0.61\nMar\n0.15\n0.03\n-0.07\n0.64\n0.11\n0.21\n-0.02\n0.18\n0.00\n0.01\n0.36\n0.13\n-0.21\n0.03\nApr\n-0.11\n0.02\n0.04\n0.06\n-0.04\n0.00\n0.05\n0.02\n2.02\n0.34\n-0.07\n0.22\n-0.36\n0.05\nMay\n0.13\n0.09\n-0.01\n0.02\n0.13\n0.04\n0.00\n-0.21\n0.00\n-0.39\n-0.09\n0.01\n0.07\n0.03\nJun\n0.21\n0.03\n-0.82\n0.38\n-0.03\n-0.18\n0.00\n0.18\n0.00\n0.29\n0.33\n-0.15\n-0.45\n-0.24\nJul\n0.19\n0.01\n0.01\n-0.06\n0.01\n-0.23\n-0.08\n0.05\n-2.81\n1.10\n0.11\n-0.33\n-0.42\n-0.36\nAug\n-0.18\n0.10\n0.06\n0.05\n0.03\n0.00\n0.03\n0.13\n0.00\n0.00\n0.06\n0.01\n-0.47\n-0.13\nSep\n0.02\n0.45\n0.24\n1.10\n0.07\n-0.31\n0.14\n0.64\n0.00\n0.05\n0.12\n0.27\n0.66\n0.38\nOct\n0.63\n1.44\n0.24\n3.49\n1.07\n1.08\n0.37\n3.08\n0.00\n0.45\n2.66\n1.25\n2.27\n1.54\nNov\n0.28\n0.62\n0.06\n1.32\n0.38\n0.29\n-0.04\n1.14\n-1.43\n-0.72\n1.10\n0.33\n1.74\n0.74\nDec\n0.28\n0.72\n-0.43\n0.45\n0.01\n0.29\n-0.01\n0.78\n0.00\n0.49\n0.74\n0.21\n1.29\n0.53\n2018\nJan\n0.17\n0.67\n0.02\n0.55\n0.10\n0.00\n-0.04\n1.78\n0.00\n-0.16\n0.64\n0.26\n0.39\n0.30\nFeb\n0.26\n0.91\n0.01\n0.43\n0.00\n-0.02\n0.15\n0.90\n0.00\n0.01\n0.21\n0.19\n-0.18\n0.08\nMar\n0.13\n-0.34\n-0.74\n0.46\n0.18\n-1.29\n-1.60\n1.58\n0.01\n-0.14\n-0.55\n0.09\n-0.03\n-0.25\nApr\n0.20\n0.34\n-0.01\n0.00\n0.10\n-0.32\n-0.21\n-0.10\n0.63\n1.85\n0.26\n0.11\n0.02\n0.08\nMay\n-0.03\n0.10\n0.00\n-0.12\n0.03\n0.14\n-0.01\n0.08\n0.00\n0.05\n0.33\n0.03\n0.02\n0.03\nJun\n0.60\n0.14\n-0.16\n-0.48\n0.38\n0.19\n0.10\n-0.25\n0.00\n0.26\n1.00\n0.04\n-0.23\n-0.05\nJul\n0.43\n0.38\n0.00\n0.40\n0.31\n0.17\n0.08\n0.65\n7.16\n3.20\n0.75\n1.09\n0.74\n0.98\nAug\n0.13\n0.45\n0.00\n0.91\n0.24\n0.47\n0.00\n-0.23\n0.00\n0.11\n0.34\n0.28\n0.62\n0.39\nSep\n0.22\n1.35\n0.53\n2.79\n1.90\n0.51\n0.32\n0.22\n0.00\n0.28\n0.07\n0.85\n1.05\n0.92\nOct\n7.89\n45.88\n2.94\n26.86\n12.94\n19.13\n1.39\n27.66\n0.00\n9.86\n13.64\n14.66\n20.12\n16.44\nNov\n7.21\n10.63\n4.80\n9.12\n3.36\n2.31\n0.18\n16.33\n0.35\n9.29\n15.42\n6.50\n14.53\n9.20\nDec\n10.22\n8.07\n2.77\n8.07\n8.49\n28.61\n1.26\n3.19\n0.00\n13.84\n10.07\n9.01\n9.07\n9.03\n2019\nJan\n13.35\n1.04\n4.35\n9.46\n11.64\n47.25\n1.12\n11.01\n0.10\n11.73\n6.72\n12.83\n6.94\n10.75\nFeb\n2.94\n5.94\n2.77\n2.73\n2.93\n-7.70\n0.14\n3.42\n0.02\n2.20\n4.34\n0.70\n3.56\n1.67\nMar\n14.29\n5.56\n2.34\n5.20\n2.30\n3.06\n0.14\n3.92\n3.66\n4.54\n5.16\n4.05\n5.10\n4.38\nApr\n12.05\n6.57\n0.65\n5.84\n19.90\n3.40\n3.50\n5.36\n6.93\n19.74\n5.35\n4.45\n7.85\n5.52\nMay\n21.57\n11.89\n2.54\n11.51\n16.85\n16.18\n31.21\n29.81\n3.05\n6.67\n8.96\n10.12\n17.63\n12.54\nJun\n40.94\n59.89\n18.11\n63.80\n46.53\n41.90\n2.32\n35.38\n0.06\n28.71\n36.63\n31.23\n55.07\n39.26\nJul\n23.72\n27.68\n9.19\n27.01\n43.32\n26.39\n7.48\n36.17\n11.05\n30.51\n39.79\n21.72\n19.90\n21.04\nSource:Zimstat, 2019\nFOOD & NON \nALCOHOLIC \nBEVERAGES\nALL \nITEMS\nTABLE 9.1 : MONTHLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n(February 2019 = 100)\n \n \n \n29 \n \n \nF OOD \nIN F LA TION\nA LC OHOLIC \nC LOTHIN G\nHOUS IN G, \nWA TER ,\nF UR N ITUR E\nM IS C .\nF OOD & \nB EVER A GES \n& \nELEC TR IC TY, \nGA S\nA N D\nR EC R EA TION \n&\nR ES TA UR A N TS \n&\nGOOD S &\nTOTA L N ON\nN ON \nA LC OHOLIC \nA LL\n& TOB A C C O\nF OOTWEA R\n& OTHER\nEQUIP M EN T\nC ULTUR E\nHOTELS\nS ER VIC ES\nF OOD\nB EVER A GES\nITEM S\nF UELS\nWEIGHTS\n4.90\n4.35\n27.62\n5.29\n1.42\n8.39\n2.65\n2.27\n4.25\n1.08\n6.46\n68.70\n31.30\n100\n2017\nJan\n-0.61\n-1.52\n-2.16\n-0.62\n-0.68\n-1.76\n-1.44\n0.20\n3.49\n-0.02\n-0.62\n-0.79\n-0.30\n-0.65\nFeb\n-0.42\n-1.66\n-1.91\n0.26\n-0.53\n-1.29\n-1.31\n0.18\n3.49\n0.24\n-0.05\n-0.43\n1.29\n0.06\nMar\n-0.13\n-1.45\n-0.95\n1.64\n-0.30\n-0.79\n-1.74\n0.40\n0.12\n0.87\n0.92\n-0.19\n1.21\n0.21\nApr\n-0.26\n-1.29\n-0.89\n2.03\n-0.33\n-0.86\n-1.61\n0.44\n2.16\n1.30\n1.21\n0.13\n1.35\n0.48\nMay\n0.15\n-0.98\n-1.01\n2.16\n-0.01\n-0.71\n0.00\n0.17\n2.16\n0.88\n1.46\n0.28\n1.92\n0.75\nJun\n0.29\n-0.74\n-2.39\n2.52\n-0.19\n-0.81\n0.00\n0.59\n-0.48\n0.86\n1.70\n-0.28\n1.82\n0.31\nJul\n0.47\n-0.58\n-2.43\n2.41\n-0.03\n-1.01\n0.29\n0.55\n-3.28\n1.93\n2.12\n-0.56\n1.92\n0.14\nAug\n0.35\n-0.26\n-2.37\n2.50\n0.02\n-0.88\n0.33\n0.78\n-3.28\n1.92\n2.05\n-0.50\n1.76\n0.14\nSep\n0.27\n0.22\n-1.05\n3.91\n0.12\n-1.11\n0.57\n1.69\n-3.28\n1.97\n2.07\n0.10\n2.49\n0.78\nOct\n0.95\n1.91\n-0.68\n7.47\n1.22\n0.02\n0.94\n4.84\n-3.28\n2.49\n4.61\n1.38\n4.40\n2.24\nNov\n1.17\n2.62\n-0.62\n8.78\n1.67\n-0.02\n0.89\n5.83\n-2.25\n1.76\n5.62\n1.91\n5.65\n2.97\nDec\n1.51\n3.27\n-0.45\n8.77\n1.57\n0.55\n0.89\n6.35\n-2.26\n2.09\n6.04\n2.20\n6.60\n3.46\n2018\nJan\n1.83\n4.12\n-0.52\n9.00\n1.82\n1.30\n0.41\n7.95\n-2.25\n1.63\n6.64\n2.45\n6.17\n3.52\nFeb\n2.04\n5.21\n-0.65\n8.71\n1.84\n1.17\n0.56\n8.96\n-2.25\n1.45\n6.31\n2.41\n4.35\n2.98\nMar\n2.02\n4.81\n-1.32\n8.52\n1.91\n-0.35\n-1.03\n10.48\n-2.24\n1.30\n5.35\n2.37\n4.54\n2.68\nApr\n2.34\n5.14\n-1.36\n8.45\n2.06\n-0.67\n-1.28\n10.36\n-3.58\n2.84\n5.70\n2.26\n4.94\n2.71\nMay\n2.18\n5.15\n-1.36\n8.30\n1.96\n-0.58\n-1.30\n10.67\n-3.58\n3.29\n6.14\n2.28\n4.89\n2.71\nJun\n2.58\n5.27\n-0.70\n7.36\n2.38\n-0.20\n-1.20\n10.20\n-3.58\n3.26\n6.85\n2.48\n5.12\n2.91\nJul\n2.83\n5.66\n-0.71\n7.86\n2.68\n0.20\n-1.04\n10.86\n6.31\n5.42\n7.53\n3.94\n6.35\n4.29\nAug\n3.15\n6.03\n-0.77\n8.78\n2.89\n0.67\n-1.07\n10.47\n6.31\n5.53\n7.84\n4.22\n7.52\n4.83\nSep\n3.35\n6.98\n-0.47\n10.60\n4.77\n1.49\n-0.89\n10.00\n6.31\n5.77\n7.79\n4.83\n7.94\n5.39\nOct\n10.81\n53.83\n2.20\n35.57\n17.08\n19.61\n0.11\n36.24\n6.31\n15.68\n19.31\n18.71\n26.78\n20.85\nNov\n18.47\n69.14\n7.04\n46.01\n20.56\n22.02\n0.34\n56.70\n8.23\n27.34\n36.21\n26.02\n42.71\n31.01\nDec\n30.21\n81.48\n10.48\n57.08\n30.80\n56.47\n1.61\n60.45\n8.22\n44.26\n48.82\n37.08\n53.68\n42.09\n2019\nJan\n47.34\n82.13\n15.27\n71.00\n45.88\n130.41\n2.79\n75.00\n8.32\n61.45\n57.81\n54.26\n63.71\n56.90\nFeb\n51.28\n91.22\n18.46\n74.92\n50.16\n112.71\n2.78\n79.38\n8.34\n64.99\n64.31\n55.04\n69.84\n59.39\nMar\n72.67\n102.55\n22.14\n83.18\n53.34\n122.10\n4.59\n83.51\n12.30\n72.72\n73.75\n61.19\n78.55\n66.80\nApr\n93.08\n115.13\n22.94\n93.88\n83.66\n130.40\n8.49\n93.54\n19.33\n103.06\n82.56\n68.17\n92.52\n75.86\nMay\n134.80\n140.46\n26.07\n116.47\n114.54\n167.32\n42.36\n151.04\n22.97\n116.49\n98.28\n85.94\n126.43\n97.85\nJun\n228.95\n283.96\n49.13\n256.29\n213.17\n278.58\n45.52\n240.71\n23.05\n177.91\n168.24\n142.84\n251.94\n175.66\nSource:Zimstat, 2019\nTABLE 9.2 : YEARLY INFLATION - % CHANGE IN CONSUMER PRICE INDEX \n(February 2019 = 100)\nC OM M UN IC A TION\nTR A N S P OR T\nHEA LTH\nED UC A TION\nN ON -F OOD IN F LA TION\n \n \n \n30 \n \nEnd Period\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\nLong-Term External Debt\n4,339\n5,010\n6,223\n6,732\n7,495\n8,564\n8,537\n8,656\n9,006\n2,095\nGovernment\n4,282\n4,868\n5,857\n6,252\n6,493\n6,303\n6,623\n6,735\n7,057\n6,306\nBilateral Creditors\n2,213\n2,353\n3,307\n3,397\n3,786\n3,599\n4,071\n4,258\n4,491\n4,261\nMultilateral Creditors\n2,059\n2,505\n2,550\n2,855\n2,707\n2,704\n2,553\n2,477\n2,566\n2,045\nPrivate Creditors\n10\n10\n0\n0\n0\n0\n0\n0\n0\n0\nPublic Enterprises\n825\n825\n1,092\n1,198\n1,356\n1,661\n1,220\n1,370\n1,419\n1,426\nBilateral Creditors\n497\n497\n711\n703\n858\n1,155\n760\n779\n837\n898\nMultilateral Creditors\n327\n327\n382\n495\n498\n506\n460\n591\n582\n528\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\nMonetary Authorities\n140\n550\n127\n125\n125\n120\n110\n0\n0\n0\nMultilateral Creditors - IMF\n140\n550\n127\n125\n125\n120\n110\n0\n0\n0\nPrivate\n57\n142\n366\n480\n1,002\n2,261\n1,913\n1,920\n1,949\n2,095\nShort-Term External Debt\n1,348\n2,040\n1,286\n891\n1,564\n2,394\n2,258\n2,304\n2,292\n2,374\nSupplier's Credits\n193\n286\n134\n30\n0\n0\n0\n0\n0\n0\nReserve Bank\n998\n1,300\n615\n615\n614\n587\n587\n573\n490\n441\nPrivate\n156\n454\n537\n246\n950\n1,807\n1,671\n1,731\n1,802\n1,933\nTotal External Debt\n5,687\n7,050\n7,509\n7,623\n9,059\n10,958\n10,794\n10,960\n11,299\n13,134\nTABLE 10: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR (INCLUDING ALL ARREARS)\n \n31 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nUSA\nSOUTH ARFICAN\nBOTSWANA\nJAPANESE\nEURO/2\nPOUND\nEND OF\nDollar\nRAND/1\nPULA/1\nYEN/1\nSTERLING/2\n2019\nMar\n3.0120\n0.2064\n0.2789\n0.0272\n3.3832\n3.9363\nApr\n3.2614\n0.2275\n0.3031\n0.0292\n3.6490\n4.2209\nMay\n5.2635\n0.3550\n0.4831\n0.0483\n5.8585\n6.6391\nJun\n6.6220\n0.4673\n0.6231\n0.0615\n7.5245\n8.3906\nJul\n9.1900\n0.6494\n0.8621\n0.0846\n10.0000\n11.1111\nSource: Reserve Bank of Zimbabwe, 2019\n TABLE 11 : SELECTED INTERNATIONAL EXCHANGE RATES\n1. Foreign currency per ZWL$ dollar.\n \n \n \n32 \n \n \n \n \nMarket Capitalisation\nEND OF\nAll Share*\nZWL$ millions\n2017\nJan\n-\n140.2\n56.3\n8.6\n31,616,982\n3,903.7\nFeb\n-\n135.3\n56.5\n11.5\n85,314,995\n3,770.0\nMar\n-\n139.0\n58.6\n26.9\n145,238,255\n3,871.3\nApr\n-\n143.0\n66.3\n11.2\n75,857,712\n4,182.8\nMay\n-\n162.3\n69.6\n16.8\n170,830,515\n4,740.1\nJun\n-\n196.0\n69.8\n39.7\n311,145,262\n5,695.2\nJul\n-\n203.3\n69.4\n24.7\n149,425,245\n5,759.0\nAug\n-\n235.0\n73.5\n13.6\n107,920,143\n6,659.4\nSep\n-\n418.4\n122.6\n89.5\n245,278,194\n11,860.2\nOct\n-\n521.9\n132.5\n168.8\n1,006,687,304\n14,830.3\nNov\n-\n376.7\n126.9\n207.5\n196,489,710\n10,777.7\nDec\n-\n333.0\n142.4\n75.3\n844,189,447\n9,580.6\n2018\nJan\n91.3\n305.4\n130.4\n31.4\n55,032,220\n8,652.9\nFeb\n88.0\n294.6\n124.9\n63.7\n138,142,187\n8,386.0\nMar\n87.0\n291.0\n125.1\n40.3\n108,997,097\n8,290.4\nApr\n98.7\n330.7\n124.4\n44.4\n206,342,675\n9,405.3\nMay\n108.3\n361.5\n151.5\n59.3\n129,155,586\n10,393.2\nJun\n102.9\n342.8\n161.3\n73.0\n234,834,368\n9,792.2\nJul\n114.3\n384.3\n164.0\n114.9\n624,256,160\n10,969.7\nAug\n117.3\n394.6\n161.3\n50.5\n142,150,599\n12,475.4\nSep\n115.1\n387.0\n163.8\n61.1\n197,401,341\n12,265.5\nOct\n163.8\n549.8\n217.3\n449.6\n316,060,000\n17,960.0\nNov\n160.4\n538.7\n208.6\n118.0\n153,874,660\n17,316.6\nDec\n146.2\n487.1\n227.7\n93.0\n144,479,601\n19,424.4\n2019\nJan\n157.5\n525.9\n213.1\n110.3\n122,778,938\n20,888.4\nFeb\n148.1\n494.3\n206.9\n295.8\n229,935,122\n19,773.4\nMar\n121.7\n405.6\n194.0\n70.8\n123,398,632\n16,084.9\nApr\n133.7\n446.5\n186.5\n116.5\n134,394,898\n17,502.7\nMay\n188.1\n628.4\n225.8\n193.5\n237,334,372\n24,920.0\nJun\n204.8\n683.5\n255.3\n235.5\n293,138,775\n27,017.2\nJul\n187.1\n624.4\n244.6\n191.0\n163,556,663\n24,636.1\nSource:Zimbabwe Stock Exchange ,2019\n*All Share index was introduced in January 2018\nTABLE 12: ZIMBABWE STOCK MARKET STATISTICS\nIndustrial\n Market Turnover \nZWL$ million \nVolume of Shares\nMining\nIndices\n \n \n \n33 \n \n \n \n \n \n34 \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n \nINTERNET\n2017\nJan\n 4,052.7 \n7.5\n368.7\n70.4\n 495.55 \n318.9\nFeb\n 4,246.6 \n7.0\n327.3\n58.4\n 472.30 \n324.1\nMar\n 4,629.8 \n7.4\n392.2\n58.8\n 671.60 \n399.7\nApr\n 4,178.8 \n4.8\n466.9\n39.3\n 792.50 \n337.6\nMay\n 4,974.0 \n6.5\n557.8\n44.7\n 939.90 \n618.7\nJun\n 5,346.4 \n6.3\n558.8\n34.6\n 1,095.55 \n500.3\nJul\n 4,805.1 \n5.7\n588.4\n29.4\n 1,601.38 \n586.4\nAug\n 5,325.1 \n5.2\n590.1\n24.7\n 1,776.44 \n583.3\nSep\n 6,031.4 \n5.2\n651.1\n16.1\n 2,159.26 \n731.9\nOct\n 5,991.3 \n5.4\n681.9\n19.4\n 2,401.62 \n779.2\nNov\n 6,259.7 \n4.9\n666.5\n15.9\n 2,561.84 \n798.3\nDec\n 5,877.2 \n3.6\n778.4\n16.3\n 3,052.72 \n1043.3\n2018\nJan\n 5,548.1 \n4.9\n663.5\n21.3\n 2,318.80 1,006.05 \nFeb\n 4,706.6 \n4.5\n594.0\n13.9\n 2,015.11 831.05 \nMar\n 6,300.4 \n4.5\n654.2\n12.5\n 2,657.10 864.83 \nApr\n 5,786.8 \n3.3\n640.9\n11.5\n 3,002.63 822.58 \nMay\n 7,298.4 \n4.2\n819.7\n10.5\n 3,550.07 968.58 \nJun\n 7,997.3 \n4.7\n779.4\n8.3\n 3,724.31 1,135.49 \nJul\n 8,290.0 \n4.0\n790.0\n9.4\n 4,446.68 1,262.53 \nAug\n 7,762.9 \n2.9\n811.2\n14.0\n 4,558.54 1,254.96 \nSep\n 7,155.0 \n4.0\n842.5\n17.0\n 4,462.40 1,393.08 \nOct\n 8,230.5 \n4.2\n821.3\n17.9\n 4,607.38 1,428.20 \nNov\n 7,922.5 \n3.7\n657.5\n19.9\n 3,964.78 1,026.70 \nDec\n 8,355.2 \n2.8\n917.2\n14.6\n 4,833.80 1,102.90 \n2019\nJan\n 6,903.0 \n2.9\n 1,294.05 \n16.9\n 3,608.83 1,056.16 \nFeb\n 8,337.0 \n4.0\n 1,330.58 \n17.2\n 3,594.51 1,093.64 \nMar\n 9,881.5 \n3.9\n 1,399.50 \n18.3\n 4,080.65 1,250.55 \nApr\n 10,321.4 \n3.1\n 1,590.10 \n14.0\n 4,949.34 1,408.53 \nMay\n 14,670.3 \n4.2\n 1,397.48 \n11.8\n 6,692.55 1,897.82 \nJun\n 17,881.2 \n3.7\n 1,464.66 \n30.1\n 7,130.02 2,539.84 \nJul\n 23,309.9 \n3.7\n 1,806.45 \n36.6\n 9,137.36 3,295.81 \nSource:Reserve Bank of Zimbabwe, 2019\nTABLE 13.1 : ZETSS AND RETAIL PAYMENTS \n Values of Transactions (ZWL$ millions)\n \n \n \n35 \n \n \nEND OF\nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2017\nJan\n 350.0 \n26.7\n 12,756.3 1,173.6 27,550.1 191.0 \nFeb\n 326.3 \n27.8\n 8,952.0 953.5 26,820.1 207.0 \nMar\n 414.2 \n31.0\n 11,124.0 922.2 35,604.1 244.1 \nApr\n 363.7 \n21.6\n 13,595.5 652.9 40,089.0 231.0 \nMay\n 531.8 \n27.8\n 16,623.4 820.6 47,019.1 323.3 \nJun\n 525.0 \n29.3\n 17,466.2 696.9 53,738.1 342.1 \nJul\n 521.8 \n30.0\n 20,013.7 636.1 61,162.4 382.6 \nAug\n 541.5 \n26.6\n 20,303.0 595.6 70,771.6 419.1 \nSep\n 620.0 \n27.2\n 20,731.0 478.0 83,303.0 432.0 \nOct\n 609.6 \n27.2\n 23,764.6 475.1 92,540.6 478.9 \nNov\n 575.3 \n25.6\n 22,748.6 347.3 97,945.2 473.0 \nDec\n 524.2 \n19.2\n 26,779.1 347.2 118,198.9 524.8 \nAnnual Total\n 5,903.4 \n320.1\n 214,857.4 8,099.0 754,742.1 4,248.84 \n2018\nJan\n 548.1 \n22.7\n 20,981.2 449.6 100,593.9 501.8 \nFeb\n 457.2 \n22.5\n 18,869.0 292.2 89,584.3 463.8 \nMar\n 545.2 \n23.7\n 21,996.8 268.4 116,120.0 510.5 \nApr\n 505.5 \n17.4\n 21,170.0 253.6 117,616.8 457.0 \nMay\n 611.1 \n21.2\n 23,278.2 213.2 137,423.0 496.6 \nJun\n 553.6 \n22.5\n 23,790.0 175.2 156,609.8 502.2 \nJul\n 560.2 \n20.1\n 25,075.5 223.1 169,416.8 559.6 \nAug\n 553.0 \n15.1\n 25,249.9 317.4 164,918.0 518.7 \nSep\n 543.0 \n19.4\n 24,918.0 300.8 161,289.5 511.3 \nOct\n 571.6 \n20.4\n 21,025.4 345.5 161,427.4 496.0 \nNov\n 477.4 \n16.7\n 17,845.4 334.9 133,862.1 430.6 \nDec\n 478.6 \n13.0\n 27,419.1 236.2 161,540.7 409.1 \nAnnual Total\n 6,404.4 \n234.6\n 271,618.6 3,410.1 1,670,402.1 5,857.13 \n2019\nJan\n 401.5 \n12.2\n 40,613.8 232.6 135,481.1 413.4 \nFeb\n 456.5 \n16.4\n 27,811.2 226.8 119,081.1 463.6 \nMar\n 525.9 \n15.4\n 30,417.6 248.9 142,597.8 441.0 \nApr\n 535.0 \n13.7\n 32,092.5 168.8 157,348.3 390.1 \nMay\n 642.6 \n14.7\n 15,542.6 121.4 166,491.6 494.3 \nJun\n 706.0 \n13.3\n 18,012.1 79.6 160,873.0 486.8 \nJul\n 983.5 \n13.6\n 20,465.4 99.6 170,823.3 638.2 \nSource:Reserve Bank of Zimbabwe, 2019\nTABLE 13.2 : ZETSS AND RETAIL PAYMENTS \n Volumes of Transactions (ZWL$ 000's)\n \n \n \n36 \n \n \nEND OF\nEXPORTS\nIMPORTS\nTOTAL TRADE TRADE BALANCE\n2017\nJan\n292.0\n385.0\n677.0\n-93.0\nFeb\n290.3\n424.4\n714.7\n-134.1\nMar\n265.7\n461.8\n727.5\n-196.1\nApr\n225.6\n405.5\n631.1\n-179.9\nMay\n268.6\n465.6\n734.2\n-197.0\nJun\n264.5\n495.1\n759.6\n-230.6\nJul\n261.9\n481.9\n743.8\n-220.0\nAug\n356.4\n448.2\n804.6\n-91.8\nSep\n324.8\n440.0\n764.8\n-115.2\nOct\n352.8\n460.8\n813.6\n-108.0\nNov\n577.7\n493.7\n1071.4\n84.0\nDec\n299.8\n556.3\n856.1\n-256.5\nTotal\n3780.2\n5518.3\n9298.5\n-1738.1\n2018\nJan\n251.2\n489.7\n740.9\n-238.5\nFeb\n346.3\n574.9\n921.2\n-228.6\nMar\n288.6\n605.8\n894.3\n-317.2\nApr\n329.6\n544.1\n873.7\n-214.5\nMay\n267.2\n532.4\n799.6\n-265.2\nJun\n384.6\n614.6\n999.3\n-230.0\nJul\n340.3\n560.0\n900.3\n-219.7\nAug\n449.3\n576.5\n1025.9\n-127.2\nSep\n353.4\n577.1\n930.5\n-223.7\nOct\n448.6\n592.3\n1040.9\n-143.7\nNov\n471.7\n628.7\n1100.4\n-157.0\nDec\n364.8\n494.7\n859.5\n-129.9\nTotal\n4295.6\n6790.8\n11086.5\n-2495.2\n2019\nJan\n292.6\n336.8\n629.4\n-44.2\nFeb\n348.4\n370.5\n718.9\n-22.1\nMar\n295.9\n329.0\n624.9\n-33.1\nApr\n277.0\n416.7\n693.7\n-139.7\nMay\n343.2\n436.8\n780.0\n-93.6\nJun\n239.8\n458.5\n698.3\n-218.7\nJul\n299.5\n357.0\n656.5\n-57.5\nSource: Zimstat, 2019\nTABLE 14 : MERCHANDISE TRADE STATISTICS\n (US$ millions)", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monthly_Economic_Reviews/Monthly-Economic-Review-July-2019-.pdf"}
{"doc_id": "99d4797896cebe7a9d0dac259bbbd677", "text": "Vol. 25 No. 47 \n \n \nWeek Ending \n24th November 2023 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ................................................................................................ 1 \n2. \nINTEREST RATES .................................................................................... 1 \n3. \nCLEARING AND SETTLEMENT ACTIVITY ...................................... 3 \n4. \nINTERNATIONAL COMMODITY PRICE DEVELOPMENTS ......... 5 \n5. \nEQUITY MARKETS.................................................................................. 9 \n6. \nTHE ROLE OF INFLATION EXPECTATIONS ON INFLATION \nOUTCOMES ............................................................................................. 13 \n \n \n \n \n 1 \n1. OVERVIEW \n \n \nThis report provides an analysis of the money market interest rates, transactions under the \nNational Payment Systems, movements in international prices of selected mineral commodities \nas well as stock market price and volume developments. The report also carries out an analysis \nof the importance of expectations in influencing and shaping domestic inflation. The report \ncovers the week ending 24th November 2023. \n \nThe minimum savings deposit rates for local currency deposits were lower during the week under \nreview while foreign currency deposit interest rates remained largely unchanged, during the same \nperiod. A total value of ZW$6.39 trillion was processed through the National Payment Systems \n(NPS) during the week, reflecting a 10.12% decline from the previous week’s levels as aggregate \ndemand remains depressed ahead of the month end. \n \nThe international prices of gold, platinum, palladium, crude oil and copper increased during the \nweek amid speculation that the Federal Reserve is nearing the end of its interest rate hiking cycle. \nThe prices of nickel and lithium, however, registered declines due to waning demand for nickel \ncoupled with loss-making conditions from the stainless-steel sector. The decline in lithium prices \nsignal concerns regarding diminished demand prospects for the commodity after China presented \nmixed economic data. \n \nThe Zimbabwe Stock Exchange (ZSE) was characterised by mixed trading while the Victoria \nFalls Stock Exchange (VFEX) was bullish during the week under analysis. \n \n2. INTEREST RATES \n \nLocal Currency (ZW$) Deposit Rates \n \nCommercial bank minimum deposit rates for savings deposits registered a decline while those \nfor 1 month, 3-month and 6-month tenor were higher during the week of analysis. Maximum \ndeposit rates for deposits of 1 month, 3-month, 6-month and 12-month tenor increased while \nthose for savings deposits remained unchanged during the same week. \n \n \n \n \n \n 2 \nTable 1: Average Deposit Rates (per annum) \nDate \nSavings deposits \n \n1- Month deposit rates \n \n3- Month deposit rates \n \n6- Month deposit rates \n \n12- Month deposit rates \n \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \n27-Oct-23 \n34.29 \n35.60 \n59.00 \n69.33 \n61.67 \n70.35 \n59.17 \n68.64 \n59.33 \n68.79 \n3-Nov-23 \n34.29 \n35.60 \n59.00 \n69.33 \n61.67 \n70.35 \n59.17 \n68.64 \n59.33 \n68.79 \n10-Nov-23 \n34.29 \n35.60 \n59.00 \n69.33 \n61.67 \n70.35 \n59.17 \n68.64 \n59.33 \n68.79 \n17-Nov-23 \n35.33 \n38.27 \n57.33 \n64.78 \n57.67 \n \n67.12 \n57.70 \n67.21 \n57.87 \n67.36 \n24-Nov-23 \n35.00 \n38.27 \n57.72 \n67.00 \n60.81 \n69.76 \n58.70 \n71.14 \n58.87 \n71.29 \nSource: Reserve Bank of Zimbabwe, 2023 \n \nLocal Currency (ZW$) Lending Rates \nThe minimum and maximum lending rates for individual clients decreased during the week \nending 24th November 2023. The minimum deposit rates for corporates clients were higher while \nmaximum lending rates decreased during the same period. \n \nTable 2 shows local currency lending rates. \n \nTable 2: Lending Rates (per annum) \nDate \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \nIndividual Clients \n \n Corporate Clients \n \n27-Oct-23 \n71.72 \n102.10 \n92.43 \n167.77 \n3-Nov-23 \n71.54 \n101.77 \n92.27 \n167.70 \n10-Nov-23 \n70.58 \n101.56 \n93.43 \n166.07 \n17-Nov-23 \n71.09 \n101.72 \n92.36 \n168.04 \n24-Nov-23 \n70.15 \n101.53 \n93.15 \n166.18 \nSource: Reserve Bank of Zimbabwe, 2023 \n \nForeign Currency (USD) Deposit Rates \n \nDuring the week under review, minimum and maximum foreign currency deposit rates for \ndeposits of all classes remained unchanged. Average foreign currency deposit rates are shown in \nTable 3. \n \n \n \n \n \n 3 \nTable 3: Average Foreign Currency Deposit Rates (per annum) \nDate \nSavings deposits (%) \n1- Month deposit rates \n \n3- Month deposit rates \n \n6-Month deposit rates \n \n12- Month deposit rates \n \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \nMinimum \n(%) \nMaximum \n(%) \n27-Oct-23 \n1.27 \n1.81 \n3.15 \n4.56 \n3.33 \n5.00 \n3.35 \n5.27 \n3.43 \n5.50 \n3-Nov-23 \n1.27 \n1.81 \n3.15 \n4.56 \n3.33 \n5.00 \n3.35 \n5.27 \n3.43 \n5.50 \n10-Nov-23 \n1.27 \n1.81 \n3.15 \n4.56 \n3.33 \n5.00 \n3.35 \n5.27 \n3.43 \n5.50 \n17-Nov-23 \n1.36 \n1.86 \n2.97 \n4.94 \n3.43 \n5.53 \n3.56 \n5.86 \n3.70 \n6.21 \n24-Nov-23 \n1.36 \n1.86 \n2.97 \n4.94 \n3.43 \n5.53 \n3.56 \n5.86 \n3.70 \n6.21 \nSource: Reserve Bank of Zimbabwe, 2023 \n \nForeign Currency (USD) Lending Rates \nDuring the week ending 24th November 2023, minimum and maximum foreign currency lending \nrates for individual clients increased by 0.4 and 0.3 percentage points, respectively. Minimum \nforeign currency lending rates for corporate clients declined while maximum lending rates for \ncorporate clients increased. Table 4 shows foreign currency lending rates. \n \nTable 4: Lending Rates (per annum) \n \nMinimum (%) \nMaximum (%) \nMinimum (%) \nMaximum (%) \n \n Individual Clients \n Corporate Clients \n \n20-Oct-23 \n11.16 \n13.36 \n8.24 \n14.28 \n27-Oct-23 \n11.12 \n13.39 \n8.72 \n15.31 \n3-Nov-23 \n11.10 \n13.40 \n8.26 \n14.20 \n10-Nov-23 \n11.10 \n13.37 \n8.28 \n14.18 \n17-Nov-23 \n11.07 \n13.42 \n8.30 \n14.17 \n24-Nov-23 \n11.47 \n13.69 \n7.53 \n14.26 \nSource: Reserve Bank of Zimbabwe, 2023 \n3. CLEARING AND SETTLEMENT ACTIVITY \n \nThe aggregate transactions processed in value terms through the National Payment Systems \nplatforms was ZW$6.39 trillion, representing a decrease of 10.12% from the previous week’s \nlevels, reflecting depressed settlement activity ahead of the month end. \n \n \n 4 \nThe distribution of NPS transactions, in value terms, was as follows: Real Time Gross \nSettlement (RTGS), 82.83%; Point of Sale (POS), 6.45%; Automated Teller Machines (ATM), \n5.72% and Mobile, 5.00%, as shown in Figure 1. \n \nFigure 1: Composition of NPS Transactions in Value Terms\n \n Source: Reserve Bank of Zimbabwe, 2023 \n \nThe volume of transactions processed through the NPS increased by 4.64% to close at 13.57 \nmillion, largely on account of increases in ATM and RTGS volumes. Mobile based transactions \ncontinued to dominate NPS transactions volumes at 80.26% of the total, followed by POS, \n16.47%; RTGS, 1.79%; and ATM, 1.47% as shown in Figure 2. \n \n Figure 2: Composition of NPS Transactions in Volume Terms \n \n Source: Reserve Bank of Zimbabwe, 2023 \nRTGS\n82.83%\nPOS\n6.45%\nATM\n5.72%\nMOBILE\n5.00%\nRTGS\nPOS\nATM\nMOBILE\nRTGS, 1.79%\nPOS, 16.47%\nATM, 1.47%\nMOBILE, 80.26%\nRTGS\nPOS\nATM\nMOBILE\n \n 5 \nTable 5: National Payment Systems Activity \nPAYMENT \nSTREAM \n WEEK \nENDING \n17 NOVEMBER \n2023 \n WEEK \nENDING \n 24 NOVEMBER \n2023 \n% CHANGE \nFROM LAST \nWEEK \nPROPORTION \n \nVALUES IN ZW$MILLIONS \n \nRTGS \n6,375,829,420,778.88 \n5,291,282,605,122.93 \n-17.01% \n82.83% \nPOS \n262,855,084,936.99 \n411,822,331,869.21 \n56.67% \n6.45% \nATM \n157,780,984,692.26 \n365,466,947,301.42 \n131.63% \n5.72% \nMOBILE \n310,447,727,825.75 \n319,279,504,250.33 \n2.84% \n5.00% \nTOTAL \n7,106,913,218,233.87 \n6,387,851,388,543.90 \n-10.12% \n100% \n \nVOLUMES \n \nRTGS \n157,536 \n242,997 \n54.25% \n1.79% \nPOS \n2,076,348 \n2,235,050 \n7.643% \n16.47% \nATM \n93,604 \n199,769 \n113.42% \n1.47% \nMOBILE \n10,639,891 \n10,890,839 \n2.36% \n80.26% \nTOTAL \n12,967,379 \n13,568,655 \n4.64% \n100% \nSource: Reserve Bank of Zimbabwe, 2023 \n \n4. INTERNATIONAL COMMODITY PRICE DEVELOPMENTS \n \nDuring the week under review, prices for gold, platinum, palladium, crude oil and copper \nincreased while nickel and lithium prices edged lower, as shown in Table 6. \n \nTable 6: Metal and Crude Oil Prices for the week ending 24th November 2023 \n \nGold \nPlatinum \nPalladium \nCopper \nNickel \nCrude Oil \nLithium \n2023 \nUS$/ounce \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nUS$/barrel \nUS$/tonne \n \nWeekly Average \n(13 - 17 \nNovember) \n1,961.31 \n884.90 \n988.50 \n8,240.60 \n17,241.00 \n80.94 \n21,400.00 \n20-Nov \n1,972.38 \n899.00 \n1,066.50 \n8,445.50 \n16,980.00 \n82.03 \n20,950.00 \n21-Nov \n1,997.58 \n927.00 \n1,077.50 \n8,409.00 \n16,625.00 \n82.27 \n20,650.00 \n22-Nov \n1,994.23 \n937.00 \n1,066.00 \n8,388.50 \n16,435.00 \n80.99 \n20,350.00 \n23-Nov \n1,992.73 \n922.50 \n1,055.00 \n8,404.50 \n16,545.00 \n81.26 \n20,150.00 \n24-Nov \n1,998.03 \n918.50 \n1,052.00 \n8,428.50 \n16,138.00 \n80.02 \n19,950.00 \nWeekly Average \n(20 - 24 Nov) \n1,990.99 \n920.80 \n1,063.40 \n8,415.20 \n16,544.60 \n81.31 \n20,410.00 \nWeekly Change \n(%) \n1.51 \n4.06 \n7.58 \n2,12 \n-4.04 \n0.47 \n-4.63 \nSource: BBC, KITCO and Bloomberg 2023 \n \nPrecious Metals \nDuring the week under review, the average weekly prices of precious metals, namely gold, \nplatinum and palladium, gained 1.51%, 4.06% and 7.58%, respectively. Lithium prices \ndecelerated by 4.63% in the same week, as indicated in Table 6. Global gold and platinum prices \n \n 6 \nincreased, ending the week supported by a weaker US dollar amid speculation that the Federal \nReserve is nearing the end of its interest rate hiking cycle. At the same time, attention switched \nto US inflation data due later this week. \n \nThe increase in palladium prices was on account of higher demand and a weaker US dollar. \nLithium prices, however, declined, signalling concerns regarding diminished demand prospects \nafter China presented mixed economic data. Global electric car sales, however, are expected to \nsurge 35% this year to 14 million units, according to the International Energy Agency's annual \noutlook released in April 2023, which is anticipated to weigh down prices. \n \nThe price trends for Gold, Platinum, Palladium and Lithium Hydroxide for the period 20 \nNovember 2023 to 24 November 2023, are shown in Figure 3. \n \nFigure 3: Weekly Precious Metals Price Developments (20 - 24 November. 2023) \n \nSource: Kitco,2023 \n \nSource: Kitco,2023 \n \nSource: Kitco,2023 \n \nSource: London Metal Exchange,2023 \n1950.00\n1960.00\n1970.00\n1980.00\n1990.00\n2000.00\n2010.00\nUS$/ ounce\nGold\nGold\nLinear (Gold)\n800\n820\n840\n860\n880\n900\n920\n940\nUS$/ounce\nPlatinum\nPlatinum\nLinear (Platinum)\n1030.00\n1040.00\n1050.00\n1060.00\n1070.00\n1080.00\nUS$/ ounce\nPalladium\nPalladium\nLinear (Palladium)\n19,500\n20,000\n20,500\n21,000\n21,500\nUS$/tonne\nLithium Hydroxide\nLithium Hydroxide\nLinear (Lithium Hydroxide)\n \n 7 \nBase Metals and Brent Crude Oil \nCrude oil prices increased by 0.47%, attributed to market demand caused by oil cuts meant to \nrejuvenate the market, particularly from OPEC countries. Copper price increased by 2.12%, \nsupported by a weaker dollar and improved risk appetite in financial markets. In addition. \nBloomberg reported on Thursday that China may allow banks to offer unsecured short-term loans \nto qualified developers for the first time to ease the sector crisis after finalising a draft of 50 \ndevelopers eligible for financial support, boosting market demand. \n \nNickel prices contracted by 4.04% due to waning demand coupled with loss-making conditions \nfrom the stainless-steel sector, the primary consumer of nickel, which has led to wider production \ncuts and weighed down prices. In addition, nickel consumption from electric vehicles came in \nsofter than expected. \n \nFigure 4: Daily commodity price developments for copper, nickel, and Brent crude oil \n(19 Nov. 2023 - 24 Nov. 2023) \n \nSource: London Metal Exchange,2023 \n \nSource: London Metal Exchange,2023 \n8,300\n8,320\n8,340\n8,360\n8,380\n8,400\n8,420\n8,440\n8,460\n19-Nov\n20-Nov\n21-Nov\n22-Nov\n23-Nov\n24-Nov\nUS$/tonne\n17-Nov\n20-Nov\n21-Nov\n22-Nov\n23-Nov\n24-Nov\nCopper\n8321.50\n8445.50\n8409.00\n8388.50\n8404.50\n8428.50\nCopper\nLinear (Copper)\n15,600\n16,000\n16,400\n16,800\n17,200\n19-Nov\n20-Nov\n21-Nov\n22-Nov\n23-Nov\n24-Nov\nUS$/tonne\n17-Nov\n20-Nov\n21-Nov\n22-Nov\n23-Nov\n24-Nov\nNickel\n16980.00\n16980.00\n16625.00\n16435.00\n16545.00\n16138.00\nNickel\nLinear (Nickel)\n \n 8 \n \nSource: BBC,2023 \n \nExchange Rate Developments \n \nInterbank Market \nDuring the period under analysis, the Zimbabwe dollar (ZW$) experienced a marginal \ndepreciation of 0.33% against the US dollar on the interbank market. The average exchange rate \nshifted from ZW$5,750.48 per US$1 in the previous week to ZW$5,769.65 per US$1. In addition \nto that, there was an appreciation of the ZW$ against the South African Rand (ZAR), indicating \na marginal gain. However, the ZW$ depreciated against the British Pound (GBP), Botswana Pula \n(BWP) and the Euro (EURO) by 1.6%, 0.3% and 1.5%, respectively, during the week. \n \n \nTable 7: Selected Exchange Rates (ZW$ per unit of foreign currency) \n2023 \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(06 - 10 November) \n5,750.4819 \n315.4762 \n7,106.9237 \n426.6633 \n6,204.8114 \n20-Nov \n5,760.2991 \n317.4603 \n7,192.9475 \n430.3254 \n6,293.7648 \n21-Nov \n5,761.4639 \n317.4603 \n7,220.3288 \n430.4124 \n6,314.0505 \n22-Nov \n5,774.2758 \n312.5000 \n7,232.0073 \n427.3277 \n6,297.4877 \n23-Nov \n5,775.9900 \n312.5000 \n7,223.8515 \n424.8710 \n6,298.2021 \n24-Nov \n5,776.2304 \n312.5000 \n7,245.5242 \n425.8021 \n6,301.0166 \nWeekly Average \n(20 -24 Nov) \n5,769.6518 \n314.4841 \n7,222.9318 \n427.7477 \n6,300.9043 \nAppr (-)/Depr (+) \n(%) of the ZWL \n0.33 \n-0.3 \n1.6 \n0.3 \n1.5 \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n78.00\n79.00\n80.00\n81.00\n82.00\n83.00\n19-Nov\n20-Nov\n21-Nov\n22-Nov\n23-Nov\n24-Nov\nUS$/barrel\n17-Nov\n20-Nov\n21-Nov\n22-Nov\n23-Nov\n24-Nov\nBrent crude oil\n81.26\n82.03\n82.27\n80.99\n81.26\n80.02\nBrent crude oil\nLinear (Brent crude oil)\n \n 9 \n5. EQUITY MARKETS \n \nDuring the week ending 24th November 2023, the Zimbabwe Stock Exchange (ZSE) exhibited \nmixed sentiments as investors prepare to wind up the year. On the other hand, the Victoria Falls \nStock Exchange (VFEX) traded in the positive trajectory. The ZSE and VFEX All Share indices \nadded 2.19% and 1.29% to close at 177 395.02 points and 68.78 points, respectively. Tables 7 \nand 8 shows ZSE and VFEX statistics. \n \nTable 7: Zimbabwe Stock Exchange Statistics1 \n \nAll Share \nIndex \nPoints \nTop 10 \nindex \n(points) \n \n \n \nMining \nIndex \n(points) \nGrand \nMarket \nCapitaliz\nation \n(ZWL \nbillion) \nMarket \nTurnover \n(ZWL \nmillion) \nVolume \nof Shares \n(million) \nTop 15 \nIndex \npoints \nMedium \nCap \n(points) \nSmall Cap \n(points) \n \n \n \n03-Nov-23 \n161,050.06 \n71,537.08 \n96,384.72 \n648,559.23 \n5,342,954.00 \n125,531.67 \n12,883.61 \n9,332.16 \n15.63 \n10-Nov-23 \n173,883.74 \n76,606.36 \n104,347.52 \n713,116.49 \n5,343,533.69 \n134,627.40 \n13,926.15 \n14,117.02 \n46.16 \n17-Nov-23 \n177,395.02 \n77,093.46 \n105,130.31 \n748,580.34 \n5,343,533.69 \n145,542.27 \n14,301.48 \n20,327.69 \n69.57 \n24-Nov-23 \n181,272.70 \n76,303.61 \n104,591.00 \n814,589.67 \n5,313,312.58 \n148,883.44 \n14,458.60 \n6,143.67 \n20.98 \n% Change \n \n2.19 \n-1.02 \n \n-0.51 \n8.82 \n \n-0.57 \n2.30 \n \n1.10 \n-69.78 \n-69.8 \nSource, Zimbabwe Stock Exchange, 2023 \n \nTable 8: Victoria Falls Stock Exchange Statistics \nDate \nAll Share Index Points \nGrand Market \nCapitalization (US$ \nbillion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares \n(million) \n03-Nov-23 \n67.59 \n1.16 \n1.19 \n8.37 \n10-Nov-23 \n68.06 \n1.16 \n0.77 \n2.44 \n17-Nov--23 \n68.78 \n1.18 \n0.40 \n4.58 \n24-Nov-23 \n69.66 \n1.19 \n0.79 \n6.08 \n% Change \n1.29 \n1.28 \n94.95 \n32.92 \nSource, Zimbabwe Stock Exchange, 2023 \n \n \n \n \n \n1 The Zimbabwe Stock Exchange (ZSE) adopted the Global Industry Classification Standards, effective from 1 January 2020. ZSE major \nindices comprise of the following categories: All Share Index Top 10 Index; Top 15; Top 25; Medium cap and Small cap Indices. \n \n \n \n10 \nZimbabwe Stock Exchange (ZSE) Developments \n \nThe Medium Cap added 8.82% to close at 814 589.67 points, while the Top 10, Top 15 and \nSmall cap indices lost 1.02%, 0.51% and 0.57% to close at 76 303.61 points, 104 591.00 points \nand 5 313 312.58 points, respectively. \n \nThe increase in the mainstream index resulted from share price gains in First Mutual Properties \nLimited (22.35%), General Beltings Holdings Limited (20.36%), Zimre Holdings Limited \n(19.23%), Ariston Holdings Limited (18.03%) and SeedCo Limited (14.56%). \n \nLosses were registered in share prices of Nampack Zimbabwe Limited (10.58%), Delta \nCorporation Limited (5.50%), CFI Holdings Limited (5.00%), Rainbow Tourism Group Limited \n(3.44%) and CBZ Holdings Limited (3.44%). \n \nThe mining index added 2.30% to close at 148 883.44 points compared to 145 542.27 points \nrecorded in the prior week. Figure 5 shows selected ZSE indices. \n \nFigure 5: ZSE All Share, Top 10 and Mining Indices \n \nSource: Zimbabwe Stock Exchange, 2023 \n \n \n \n10,100\n30,100\n50,100\n70,100\n90,100\n110,100\n130,100\n150,100\n170,100\n190,100\n0\n20,000\n40,000\n60,000\n80,000\n100,000\n120,000\n140,000\n160,000\n180,000\n200,000\n25-Nov-22\n09-Dec-22\n23-Dec-22\n06-Jan-23\n20-Jan-23\n03-Feb-23\n17-Feb-23\n03-Mar-23\n17-Mar-23\n31-Mar-23\n14-Apr-23\n28-Apr-23\n12-May-23\n26-May-23\n09-Jun-23\n23-Jun-23\n07-Jul-23\n21-Jul-23\n04-Aug-23\n18-Aug-23\n01-Sep-23\n15-Sep-23\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\nMining Index\nAll Share and Top 10 Indices\nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n \n \n11 \nMarket Turnover \nThe cumulative volume and value of shares traded declined by 69.85% and 69.78% to 20.98 \nmillion shares and ZW$6.14 billion, respectively. This compares to 69.57 million shares and \nZW$20.33 billion, recorded in the previous week. \n \nFigure 6 shows the trend in daily market turnover for the period 25th November 2022 to 24th \nNovember 2023. \n \nFigure 6: Market Turnover \nSource: Zimbabwe Stock Exchange, 2023 \n \nMarket Capitalization \nDespite the slowdown in trading activity on the ZSE during the week under review, as evidenced \nby the decline in volume and value of shares traded, the market added 1.10%, or ZW$157.12 \nbillion worth of capitalization to close at ZW$14 458.60 billion. \n \nFigure 7 shows the evolution of market capitalization for the period 25th November 2022 to 24th \nNovember 2023. \n \n \n \n0\n5,000\n10,000\n15,000\n20,000\n25,000\n30,000\n35,000\n40,000\n45,000\n50,000\n25-Nov-22\n09-Dec-22\n23-Dec-22\n06-Jan-23\n20-Jan-23\n03-Feb-23\n17-Feb-23\n03-Mar-23\n17-Mar-23\n31-Mar-23\n14-Apr-23\n28-Apr-23\n12-May-23\n26-May-23\n09-Jun-23\n23-Jun-23\n07-Jul-23\n21-Jul-23\n04-Aug-23\n18-Aug-23\n01-Sep-23\n15-Sep-23\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\nZW$ (Million)\nNegotiated Deal: 241 million \nFirst Mutual Holdings \nLimited shares exchanged \nhands at ZW$196/share\n \n \n12 \n Figure 7: Market Capitalization \n \nSource: Zimbabwe Stock Exchange, 2023 \n \nVictoria Falls Stock Exchange (VFEX) Developments \n \nThe VFEX mainstream index increased by 1.28% during the week under review, due to share \nprice gains in SeedCo International VX (19.09%), Axia Corporation Limited (18.66%), Padenga \nHoldings Limited (16.73%) and African Sun Limited (6.38%). \n \nLosses were registered in the share prices of Bindura Nickel Corporation (BNC) (14.39%), \nSimbisa Brands Limited (8.01%) and Innscor Africa Limited (14.16%). \n \nVFEX Market Turnover \n \nThe VFEX volume and values of shares increased by 32.92% and 94.95% to 6.08 million shares \nand US$0.79 million, respectively. This is in comparison to 4.58 million shares and US$0.40 \nmillion recorded in the preceding week. \n \nVFEX Market Capitalization \nThe market added 1.28% worth of capitalization to close at US$1.19 billion compared to \nUS$1.18 billion, recorded in the prior week. This is, in part, attributed to subdued trading activity \non the VFEX. \n \n0\n1,800\n3,600\n5,400\n7,200\n9,000\n10,800\n12,600\n14,400\n16,200\n25-Nov-22\n09-Dec-22\n23-Dec-22\n06-Jan-23\n20-Jan-23\n03-Feb-23\n17-Feb-23\n03-Mar-23\n17-Mar-23\n31-Mar-23\n14-Apr-23\n28-Apr-23\n12-May-23\n26-May-23\n09-Jun-23\n23-Jun-23\n07-Jul-23\n21-Jul-23\n04-Aug-23\n18-Aug-23\n01-Sep-23\n15-Sep-23\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\n$ Billions\n \n \n13 \nFigure 8 shows the trend in the VFEX All Share Index (ASI) for the period 25th November \n2022 to 24th November 2023. \n \n \nFigure 8: VFEX All Share Index \n \nSource: Victoria Falls Stock Exchange (VFEX), 2023 \n6. THE ROLE OF INFLATION EXPECTATIONS ON INFLATION OUTCOMES \n \n \nThe country’s experience with episodes of high inflation changed the dynamics of inflation \nexpectations in the economy. In essence, past memory tends to play a role in the formation of \ninflation expectations particularly with regards to backward looking agents. In the case of \nZimbabwe, the proportion of backward-looking agents relying on past inflation including the \n2008/09 hyperinflation to form expectations about future inflation is high. Precisely, at least 80% \nof the inflation out-turn in the economy emanates from the effects of expected inflation. \nThe Bank continues to implement measures that complement Government efforts that are aimed \nat entrenching forward looking behaviour in the formation of inflation expectations to ensure \nthat they rely on current inflation trends and signals from prevailing monetary policy stance to \nshape future expectations. The Bank achieves this goal through policy transparency, consistency, \nand timeous communication. Thus, the policy resolutions of the Monetary Policy Committee \n(MPC) after every meeting on the current and direction of the monetary policy stance, interest \n40\n50\n60\n70\n80\n90\n100\n110\n120\n130\n140\n150\n25-Nov-22\n09-Dec-22\n23-Dec-22\n06-Jan-23\n20-Jan-23\n03-Feb-23\n17-Feb-23\n03-Mar-23\n17-Mar-23\n31-Mar-23\n14-Apr-23\n28-Apr-23\n12-May-23\n26-May-23\n09-Jun-23\n23-Jun-23\n07-Jul-23\n21-Jul-23\n04-Aug-23\n18-Aug-23\n01-Sep-23\n15-Sep-23\n29-Sep-23\n13-Oct-23\n27-Oct-23\n10-Nov-23\n24-Nov-23\n \n \n14 \nrates and inflation outlook are shared with the public to ensure that economic agents are well \ninformed on how to form their expectations about future inflation. \nThe Bank’s goal is to anchor inflation expectations particularly with a view of reducing the \nproportion of households with backward looking behaviour in the formation of inflation \nexpectations. In addition, the Bank also aims to minimise the influence of various other factors \nthat impact on the formation of inflation expectations in the economy, including expectations \nbuilt around the likely effects of natural disasters and shocks such as climate change risks. \n \nThe Bank continues to communicate its actions and policies deliberately and transparently \nthrough various channels. Specifically, the Bank avails information to the public through \npublication of reports and key statistics on the official website, social and print media platforms. \nIn addition, some of the key information from the Bank is disseminated through delivery of \nspeeches and reports in private and public fora among others. The public is, therefore urged to \nfact check information in to foster the use of credible information before making decisions. \n \nRESERVE BANK OF ZIMBABWE\n \n \nAPPENDIX 1: FOREIGN EXCHANGE AUCTION RESULTS FOR WHOLESALEFX2 \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n \n \n \n2 Wholesale Foreign Currency Auction (Wholesale FX) is normally conducted on Tuesday every week. The RBZ MPC resolutions dated 6 June 2023 resolved that with effect \nfrom 7 June 2023, the Bank shall sell foreign currency at the market-determined exchange rate through banks to support and strengthen the foreign exchange interbank market, \nand banks shall in turn sell the foreign currency to their customers. \n \n \n \n30-Oct-23 \nWHOLESALE FX \n \n \n07-Nov-23 \n \n \n \n14-Nov-23 \n \n \n \n21-Nov-23 \nTotal \nBids (US$ dollars) \n17,798,011.00 \n17,460,100.00 \n17,343,660.00 \n17,309,350.08 \nAmount Allotted (US$ dollars) \n17,798,011.00 \n17,460,100.00 \n17,343,660.00 \n17,309,350.08 \nHighest Rate \n5,775.00 \n5,775.00 \n5,781.00 \n5,792.0000 \nLowest Bid Rate Allotted \n5,700.00 \n5,722.00 \n5,745.00 \n5,760.0000 \nWeighted Average Rate \n5,718.41 \n5,738.7217 \n5,755.7081 \n5,774.2758 \nNumber of Bids Received \n19 \n20 \n19 \n18 \nNumber of Bids Rejected \n0 \n0 \n0 \n0 \n \n \nAPPENDIX 2: SUMMARY OF FOREIGN CURRENCY AUCTION ALLOTMENTS BY PURPOSE \n \nSource: Reserve Bank of Zimbabwe, 2023 \n \n \n \n \n30-Oct-23 \n \n07-Nov-23 \n \n14-Nov-23 \n \n21-Nov-23 \nRaw Materials \n456,015.48 \n582,700.58 \n598,523.02 \n866,444.48 \nMachinery and Equipment \n493,100.95 \n610,987.82 \n612,285.63 \n586,565.83 \nConsumables \n(Incl. Spares, Tyres, \nPackaging) \n170,113.52 \n153,558.13 \n123,770.73 \n113,022,49 \nPharmaceuticals and \nChemicals \n39,851.54 \n2,753.86 \n27,527.50 \n28,937,82 \nServices (Loans, Dividends \nand Disinvestments) \n217,908.52 \n340,875.92 \n249,383.83 \n298,514.91 \nRetail and Distribution \n167,960.99 \n179,261.41 \n315,518.12 \n200,761.39 \nFuel, Electricity and Gas \n- \n- \n- \n- \nPaper and Packaging \n37,773.27 \n29,201.90 \n72,709.08 \n20,011.84 \nTOTAL \n1,582,724.27 \n1,899,339.62 \n1,999,717.91 \n2,114,258.76", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_24_NOVEMBER_2023_Volume_25_Number_47.pdf"}
{"doc_id": "0161a84fcd1f5fcb49f4e875639dd909", "text": "R\nE\nS\nE\nR\nV\nE\n \nB\nA\nN\nK\nO\nF\n \nZ\nI\nM\nB\nA\nB\nW\nE\n \nANNUAL FINANCIAL \nSTABILITY REPORT \n2020 \n \n2 \n \nTable of Contents \nPurpose of the Report .............................................................................................................................. 5 \nGOVERNOR’S FOREWORD ............................................................................................................... 6 \n1. \nFINANCIAL STABILITY RISKS ................................................................................................. 9 \n2. \nBANKING SECTOR SOUNDNESS ............................................................................................ 17 \n3. \nCAPITAL MARKETS .................................................................................................................. 28 \n4. \nINSURANCE AND PENSIONS INDUSTRY ............................................................................. 36 \n5. \nDEPOSIT PROTECTION SYSTEM ........................................................................................... 46 \n6. \nFINANCIAL MARKETS INFRASTRUCTURE........................................................................ 50 \n7. \nAML/CFT SURVEILLANCE INITIATIVES ............................................................................ 60 \n8. \nOUTLOOK ..................................................................................................................................... 65 \nAppendices .............................................................................................................................................. 69 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3 \n \nList of Tables \nTable 1: Macroeconomic Environment Heat Map ............................................................................. 16 \nTable 2:Banking Sector Risk Matrix as at 31 December 2020 .......................................................... 20 \nTable 3: Regulated institutions in the Capital Markets ..................................................................... 28 \nTable 4: Securities Exchanges Performance ....................................................................................... 29 \nTable 5: Equity Markets Performance Summary............................................................................... 30 \nTable 6: FINSEC ATP Performance Summary .................................................................................. 32 \nTable 7 : Asset Management Summary (December 2020) ................................................................. 33 \nTable 8: Summary of Key Risks to Capital Markets and Risk Mitigation Measures ..................... 35 \nTable 9 : Insurance Sector Infrastructure ........................................................................................... 36 \nTable 10 : Insurance Sector Premium Income .................................................................................... 37 \nTable 11 : Insurance Industry Assets and Liabilities ......................................................................... 37 \nTable 12 : Insurance Sector Minimum Capital Requirements Compliance..................................... 38 \nTable 13: Financial performance of the Pensions Industry ............................................................... 39 \nTable 14: Compliance with Minimum Capital Requirements as at 31 December 2020 .................. 42 \nTable 15: Insurance and Pensions Sector Risk Matrix....................................................................... 44 \nTable 16: Deposit Insurance Coverage for Conventional Banking Institutions ............................... 46 \nTable 17 : Deposit Protection Cover for DTMFIs as at 31 December 2020 ..................................... 47 \nTable 18:Risk to the Financial Safety Net ........................................................................................... 47 \nTable 19: Payment Systems Risk Management Assessment Matrix ................................................. 55 \nTable 20: Overall Payment Systems Risk Assessment Matrix ........................................................... 56 \nTable 21: Payment Systems Risk Assessment by Risk Type .............................................................. 56 \n \n \n \n \n \n \n \n \n \n \n \n \n \n4 \n \nList of Figures \nFigure 1: Global Economic Growth (%) ................................................................................................ 9 \nFigure 2: Zimbabwe GDP Growth (%) ............................................................................................... 12 \nFigure 3 : Exchange Rate Developments (ZW$/US$) ......................................................................... 13 \nFigure 4: Annual Inflation (%) ............................................................................................................. 14 \nFigure 5: Banking Sector Soundness Index and Sub-Indices ............................................................ 17 \nFigure 6 : Banking Sector Net Capital Base (ZW$ Millions) and CAR (%) .................................... 19 \nFigure 7 : Banking Sector Income Components.................................................................................. 20 \nFigure 8: Trend in NPL Ratio ............................................................................................................... 21 \nFigure 9: Credit Stress Test: Increase in NPLs ................................................................................... 22 \nFigure 10: Default of top five largest borrowers ................................................................................. 22 \nFigure 11: Liquidity Stress Test Results .............................................................................................. 23 \nFigure 12: Prudential Liquidity Ratio ................................................................................................. 24 \nFigure 13: Interest Rate Risk Shocks ................................................................................................... 25 \nFigure 14: Foreign Exchange Risk Stress Test Results ...................................................................... 26 \nFigure 15: Zimbabwe Stock Exchange Volume/ Turnover ................................................................ 30 \nFigure 16: Top Ten Counters to Market Capitalisation ..................................................................... 31 \nFigure 17: All Share Index EWMA Relative Volatility (January 2018 –December 2020) .............. 32 \nFigure 18: Funds under Management as at 31 December 2020 ......................................................... 34 \nFigure 19: Total Assets by Class of Investment as at December 2020 .............................................. 39 \nFigure 20: Total Annual Payment Systems Transactions from 2009 - 2020..................................... 50 \nFigure 21: RTGS Annual Transactional Values and Volumes 2009-2020 ....................................... 51 \nFigure 22: Mobile Payments Interoperability Transaction October 2020-March 2021 ................. 53 \nFigure 23: Payment System Initiatives 2018-2020 .............................................................................. 54 \n \n \n \n \n \n \n \n \n \n \n \n5 \n \nPurpose of the Report \nThe financial stability report presents an analysis of the status and potential \nrisks to the financial system and an overall assessment of its stability for the \nyear ending December 2020. The report reflects a collective assessment of risks \nto financial stability by all financial sector regulators in Zimbabwe constituting \nthe Multidisciplinary Financial Stability Committee (the Reserve Bank of \nZimbabwe, Deposit Protection Corporation, Insurance & Pensions \nCommission and Securities & Exchange Commission). \n \nThe main purpose of the publication is to provide an update on the risks to \nfinancial stability and the regulatory initiatives being undertaken to minimise \nthe impact of the identified risks. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6 \n \nGOVERNOR’S FOREWORD \n \n1. This edition of our Financial Stability Report is presented amid the Covid-19 \npandemic which has impacted all aspects of life. The global financial system \ndepicted relative resilience in 2020 despite the ongoing pandemic. \n2. In response to the attendant challenges of the pandemic, governments and \ncentral banks across the globe have implemented various measures to mitigate \nthe impact of the pandemic on global financial stability. These measures, which \ninclude accommodative monetary policies and social safety nets, reduced the \nimpact of the pandemic on the global economy. This resulted in a global \neconomic contraction of 3.3% compared to an initial projection of 4.4% (World \nEconomic Outlook, March 2021). \n3. Sub-Saharan Africa was not spared from the disruptive effects of the Covid-19 \npandemic, with output contracting by 2.6% in 2020. \n4. Notwithstanding the heightening inherent risks arising from the Covid-19 \npandemic and other macroeconomic factors, the Zimbabwean banking sector \nended the year 2020 with adequate capital, satisfactory asset portfolios and \nsustained profitability. \n5. In order to mitigate the impact of the pandemic, the Bank reduced the Statutory \nReserve Ratio from 5% to 4.5%, reduced the Bank’s Policy rate from 35% to \n25%, and relaxed the single borrower limit from 25% to 35%, among other \nmeasures. \n6. The banking sector maintained adequate capitalisation while liquidity buffers \nin the sector also positively impacted on financial stability. The revised \ncapitalisation requirements effective in December 2021 are expected to build \ngreater loss absorbance capacity in the banking sector. \n7. The insurance and pensions industry coped satisfactorily to shocks as \nevidenced by high compliance with minimum capital requirements in the sector \nin 2020. \n \n7 \n \n8. The capital markets ended the year on a positive growth momentum on the \nback of improving economic fundamentals. \n9. During the review period, significant efforts in the financial sector were geared \ntowards promoting and accelerating digital financial services and building \nfinancial resilience. \n10. The Bank is continuing to enhance financial infrastructure in order to \nstrengthen credit risk management and promote inclusive access to credit. The \noperationalization of the Collateral Registry is expected before the end of 2021. \n11. In line with developing trends, financial institutions are expected to integrate \nEnvironmental, Social and Governance (ESG) factors, such as climate change, \ninto their investment, lending and finance decisions. \n12. The Bank has registered significant progress in the adoption of sustainability \nstandards in the banking sector under the Sustainability Standards and \nCertification Initiative (SSCI). Promoting the existence of strong, dynamic and \nresilient financial institutions is critical in ensuring sustainable economic \ngrowth and development. \n13. The pandemic has accelerated the adoption of digital financial services which \nhave supported the conduct of business transactions by the real economy. This \nhas resulted in digital payment transactions in the economy accounting for the \nbulk of payments. Relevant stakeholders are urged to ensure higher levels of \ndigital financial literacy in the economy. \n14. The financial sector regulatory authorities will continue to implement financial \nstability enhancements by embracing international standards that promote \nfinancial stability. \n15. In the outlook, the expected economic recovery as well as price and exchange \nrate stability in 2021 are expected to impact positively on financial stability. \n16. The above measures, and the various initiatives in the other financial sector \nsegments, coupled with ongoing improvement both in capabilities and tools \nfor financial stability assessment, will ensure that the financial sector \ncontinues to play its role of mobilising savings, providing credit in support of \n \n8 \n \nproduction, risk mitigation, efficient allocation of resources and facilitating \ndelivery of products and services. \n17. In conclusion, I would like to take this opportunity to thank all stakeholders \nand in particular our fellow financial sector regulators for their continued \ncontribution to the maintenance of financial stability in Zimbabwe. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9 \n \n1. FINANCIAL STABILITY RISKS \n \n1.1 The Covid-19 pandemic posed significant risk to financial stability in 2020 \nas governments across the globe imposed lockdown measures in attempts \nto curb the spread of the virus with severe ramifications on economic \nactivity and financial conditions. The most affected sectors were mainly \nthose that are contact-intensive such as tourism. \n1.2 As a consequence, the global economy is estimated to have contracted by \n3.3% in 2020 (World Economic Outlook, April 2021) as shown in Figure 1 \nbelow. \nFigure 1: Global Economic Growth (%) \n \nSource: World Economic Outlook (January 2021) \n \nFiscal and Monetary Policy Interventions \n1.3 The full extent of knock-on effects of the pandemic on the global financial \nmarkets was mitigated by policy responses from governments and central \nbanks around the world. Globally, central bank relief measures included \nlowering of interest rates and provision of liquidity assistance to the \nbanking sector, whilst fiscal authorities implemented stimulus packages in \nthe form of cash hand-outs, tax holidays and debt guarantees; strengthened \nhealth care systems; and emergency food distribution. These policies \n-6\n-4\n-2\n0\n2\n4\n6\n8\n2015\n2016\n2017\n2018\n2019\n2020\n2021\n2022\nGlobal\nAdvanced\nEMDEs\nSub-Saharan\n \n10 \n \nsupported the flow of credit to the real economy and reduced the economic \ndecline. \n1.4 During the second half of 2020, global production processes began to adapt \nto the new operating environment and the policy interventions implemented \nbegan to bear fruit. This saw global economic activity recovering and \ninvestor confidence increasing, particularly towards the end of 2020. \n1.5 In addition, the development and rollout of Covid-19 vaccines from late \n2020 and accommodative policy measures are expected to drive global \neconomic recovery in 2021 and maintain financial stability. \n1.6 For some Sub-Saharan African countries that were facing constrained fiscal \nspace, the pandemic and its containment measures worsened the situation. \nThe World Bank reported that in 2020, government debt in the region \nincreased to 70% of GDP from 57% at the end of 2019. \n1.7 Economic performance in Sub-Saharan Africa contracted by 2.0% in 2020. \nThe region is, however, projected to grow by 3.4% in 2021 and 4% in 2022 \non the back of re-opening of the economies. Underlying structural \nconstraints, such as power-supply shortages, as well as delays in the Covid-\n19 vaccine rollout may, however, affect the attainment of the projected \ngrowth. \n1.8 Variations in economic structures in the region will also result in an uneven \nrecovery, with well diversified economies and those that are less fiscally \nconstrained registering higher growth rates. Debt sustainability concerns \nmay require fiscal consolidation, which, if prematurely implemented, is \nlikely to further soften the projected recovery. \n1.9 The existence of a sovereign-bank nexus means that vulnerabilities that \ncould arise due to constrained fiscal positions may be transmitted to the \nbanking sector. This poses risks to financial stability in fiscally constrained \nSub-Saharan African countries in the outlook period. \n \n11 \n \n1.10 Relief measures in Zimbabwe, which included fiscal allocation of a \nstimulus package for productive sectors, monthly allowances to vulnerable \nhouseholds, extension of the deadline for compliance with the revised \nminimum capital levels from 31 December 2020 to 31 December 2021, as \nwell as downward review of statutory reserve requirements from 5% to \n2.5%, mitigated the Covid-19 pandemic shock. \n1.11 The easing of reserve requirements enabled banks to increase credit to the \nproductive sectors of the economy, while the liquidity assistance provided \nmuch needed relief to ailing industries and restless households. \nExpected Economic Rebound \n1.12 Against the background of fiscal and central bank stimuli, as well as vaccine \nroll-outs, global economic growth is expected to rise to 6% in 2021 and \n4.4% in 2022. Positive economic growth is expected to increase corporate \nand household incomes and improve debt servicing capacity of borrowers \nthereby decreasing credit risk, leading to stronger banking sector balance \nsheets. \n1.13 The projected recovery in the Zimbabwean economy (7.4% in 2021), which \nis expected to be driven by strong recovery in agriculture, mining, \nelectricity, construction, transport and communication as well as finance \nand insurance, should lower financial stability risks [Fig 2]. The economic \nrecovery is also expected to result in formal employment creation and a rise \nin incomes. \n1.14 Higher household incomes are expected to increase the demand for \nfinancial services boosting the sector’s performance and stability in 2021. \nConsiderable uncertainty which may impede the attainment of the projected \nglobal economic growth arising from the infections waves occurring across \nthe world as well as emergence of new variants of the Covid-19 virus that \n \n12 \n \nmay militate against the efficacy of the currently available vaccines, \nhowever, persist. \nFigure 2: Zimbabwe GDP Growth (%) \n \n \nSource: ZIMSTAT-MOFAD (2020) \n \n1.15 Further, the rate of availability and efficacy of the vaccines in different \nparts of the world will probably impact on production value chains thereby \nleading to an uneven economic recovery pattern across the globe. An \naccommodative policy environment is expected to play a crucial role in \nsupporting economic activity and mitigating against risks to the recovery. \nDomestic Financial Stability Risks \n1.16 In Zimbabwe, the pandemic came at a time when the country was also \ndealing with climate shocks in the form of prolonged droughts and cyclonic \nrainfall. The authorities implemented policies that were targeted at fostering \nproductive capacity, as well as price and exchange rate stability. \n \na. Exchange Rate Shocks \n1.17 Foreign exchange related shocks, which included price volatility, were \nmitigated by the introduction of a foreign currency auction system on 23 \nJune 2020, which resulted in notable stabilisation of the Zimbabwe dollar \nexchange rate in the third quarter of the year. \n1.8\n0.8\n4.8\n3.4\n-6.0\n-4.1\n7.4\n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n10\n2015\n2016\n2017\n2018\n2019\n2020 est\n2021 proj\nGDP Growth (%)\n \n13 \n \n1.18 The exchange rate depreciated from an average of ZW$32.35/US$1 in June \n2020 until it stabilised as from August 2020 and remained relatively stable \nin the range of ZW$81/US$1 to ZW$82/US$1 as at 31 December 2020. \nExchange rate stability is expected to be sustained in 2021 largely due to \nthe measures that the monetary authorities have taken to curb speculative \nand rent seeking behaviour in the foreign exchange market. Risks to \nfinancial stability arising from exchange rate volatility are, therefore, \nexpected to be low in the outlook period as shown in Figure 3 below. \n \nFigure 3 : Exchange Rate Developments (ZW$/US$) \n \nSource: RBZ (2021) \n \nb. Inflation Risk \n1.19 Inflation risk abated in 2020 as reflected by the decline in annual inflation \nfrom 521.2% in 2019 to 348.6% by end of 2020. Fiscal consolidation, \ncoupled with monetary stabilization and monetary targeting framework \nmeasures have resulted in notable stability in the pricing of goods and \nservices, particularly during the last quarter of 2020. \n1.20 In 2021, price stability is expected to be maintained on the back of \ncontinued foreign exchange stability as authorities continue to rein in \n55\n60\n65\n70\n75\n80\n85\n18-Jun-20\n8-Jul-20\n28-Jul-20\n17-Aug-20\n6-Sep-20\n26-Sep-20\n16-Oct-20\n5-Nov-20\n25-Nov-20\n15-Dec-20\n4-Jan-21\n \n14 \n \nspeculative behaviour. Inflation is projected to decline in the outlook \nperiod. \n1.21 Lower inflation [Fig 4] will provide the financial sector with a more \nenabling operating environment which facilitates planning and appropriate \npricing of financial products and services. \n \nFigure 4: Annual Inflation (%) \n \nSource: ZIMSTAT (2021) \n \nMonetary Developments \n1.22 Broad money supply stood at ZW$204.92 billion as at December 2020, \ncompared to ZW$153.84 billion recorded as at 30 September 2020. The \ngrowth reflected expansion in local currency transferable deposits, 68.66%; \ntime deposits, 42.84%; negotiable certificates of deposits (NCDs), 32.50%; \nforeign currency deposits, 12.51%; and currency in circulation, 13.08%. \n1.23 As at 31 December 2020, foreign currency deposits amounting to \nZW$103.73 billion, accounted for 51% of total deposits, while local \ncurrency deposits and currency in circulation co-accounted for the balance \nof the money stock (M3). \n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n2018:01\n2018:02\n2018:03\n2018:04\n2018:05\n2018:06\n2018:07\n2018:08\n2018:09\n2018:10\n2018:11\n2018:12\n2019:01\n2019:02\n2019:03\n2019:04\n2019:05\n2019:06\n2019:07\n2019:08\n2019:09\n2019:10\n2019:11\n2019:12\n2020:01\n2020:02\n2020:03\n2020:04\n2020:05\n2020:06\n2020:07\n2020:08\n2020:09\n2020:10\n2020:11\n2020:12\n%\n \n15 \n \n1.24 The local currency deposits, transferrable or demand deposits amounted to \nZW$88.66 billion (26.64%); time deposits, ZW$9.91 billion (2.01%); and \nnegotiable certificates of deposits, ZW$1.44 billion (0.59%). Notes and \ncoin in circulation stood at ZW$1.07 billion, as at end December 2020. The \nongoing implementation of the monetary targeting framework is expected \nto contribute to price stability which is key to maintaining financial \nstability. \n1.25 Nominal lending rates quoted by banks ranged between 5% and 65%, as at \n31 December 2020. Time deposit rates for 60-day and 90-day tenures \nregistered maximum averages of 10.33% and 9.46%, from 7.12% and \n7.70% recorded in September 2020, respectively. Average maximum \nsavings deposit rates, however, decreased from 5.19% to 4.69%, during the \nperiod under review. \n1.26 The ongoing implementation of the monetary targeting framework is \nexpected to contribute to price stability which is key to maintaining \nfinancial stability. \nMacroeconomic Environment Heatmap \n1.27 The overall risks to financial stability arising from the macroeconomic \nenvironment for the review period were considered moderate. One major \nrisk to economic activity that may potentially affect financial stability \nrelates to uncertainties on the efficacy of the Covid-19 vaccines. The \nstabilising effects of both the fiscal and monetary policies will promote the \nattainment of the economic growth rates that are envisaged in the National \nDevelopment Strategy 1 (NDS1). A Heat map indicating this position is \nshown in Table 1 below. \n \n \n \n \n16 \n \n Table 1: Macroeconomic Environment Heat Map \n \n2017 \n2018 \n2019 \n2020 est \n2021proj \nEconomic Activity \n \n \n \n \n \nSovereign Risk \n \n \n \n \n \nInflation \n \n \n \n \n \nExchange Rate \n \n \n \n \nGlobal Economic Activity \n \n \n \n \n \nOverall Risk \n \n \n \n \n \n \n \n \n \n \n \n \nLess Risk \nVery Low \nLow \nModerate \nHigh \nVery High \nExtreme \nMore Risk \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17 \n \n \n2. \nBANKING SECTOR SOUNDNESS \n \n2.1 The banking sector reported adequate levels of capitalisation, satisfactory \nasset quality, earnings and liquidity for the period ending December 2020. \n2.2 Notwithstanding the heightening of inherent risks mainly arising from the \nCovid-19 pandemic, the sector depicted resilience. Banks have adjusted \nrelatively well to the Covid-19 induced environment as shown by the \nbanking sector soundness1 index below: \nFigure 5: Banking Sector Soundness Index and Sub-Indices \n \nSource: RBZ (2021) \n2.3 The Banking Sector Soundness Index (BSI) indicates that as at December \n2020, there was an overall reduction in risks posed to the banking sector on \nthe back of a decline in risks posed to asset quality and capitalisation. \nHowever, there were notable increases in risks to sensitivity to market risk, \nearnings and liquidity. A detailed assessment of the various components is \ncontained in the sections below. \n \n1 The derivation of the Banking Sector Soundness Index was presented in the June 2019 Financial Stability \nReport and is currently based on commercial banks data. \n0.0\n0.1\n0.2\n0.3\n0.4\n0.5\n0.6\n0.7\n0.8\nDec-13\nJun-14\nDec-14\nJun-15\nDec-15\nJun-16\nDec-16\nJun-17\nDec-17\nJun-18\nDec-18\nJun-19\nDec-19\nJun-20\nDec-20\n0\n0.05\n0.1\n0.15\n0.2\n0.25\nSep-13\nMay-14\nJan-15\nSep-15\nMay-16\nJan-17\nSep-17\nMay-18\nJan-19\nSep-19\nMay-20\nCapital Adequacy\nAsset quality\nEarnings and profitability\nLiquidity\nSensitivity to market risk\n \n18 \n \n2.4 The performance of the five systemically important banking institutions (D-\nSIBs) as at December 2020 was satisfactory. All the D-SIBs were profitable \nand their profits accounted for 48.1% of total banking sector profits. D-SIBs \nheld 71.57% of total deposits and housed 75.53% of banking sector issued \nloans. \n \n \nCapitalisation \n2.5 The sector’s net capital base increased five-fold, to ZW$53.18 billion as at \n31 December 2020. The capital adequacy ratio (CAR) which represents \n \nThe BSI is mainly based on five CAMELS components, namely: \ni. \nCapital Adequacy; \nii. \nAsset Quality; \niii. \nEarnings and Profitability; \niv. \nLiquidity; and \nv. \nSensitivity to Market risk. \nThe data used in the BSI for Zimbabwe is compiled from Financial Soundness Indicators (FSIs) that are \navailable on a quarterly basis (currently based on commercial banks data). These are then transformed using \nempirical normalization to fit the data within the range of 0 to 1. The following equation is used to normalize \nthe ratios: \n𝐼𝑖 =\n𝑋𝑖−𝑋𝑚𝑖𝑛\n𝑋𝑚𝑎𝑥−𝑋𝑚𝑖𝑛\n \nWhere: \nIi is the sub-index value at point i \nXi is each data point i \nXMin is the minima among all the data points \nXMax is the maxima among all the data points \nXi, 0 to 1 is the data point i normalized between 0 and 1 \nBOX 1: BANKING SECTOR SOUNDNESS INDEX (BSI) \n \n19 \n \nextent of cushion against unexpected losses, also rose from 32.57% in \nDecember 2019 to 34.62% as shown below. \nFigure 6 : Banking Sector Net Capital Base (ZW$ Millions) and CAR (%) \n \nSource: RBZ (2021) \n \nEarnings Performance \n2.6 All banking institutions recorded profits for the year ended 31 December \n2020 with aggregate sector profits amounting to ZW$34.24 billion. The \ncost-to-income ratio, however, increased from 59.05% as at December 2019 \nto 71.97% as at December 2020 mainly attributable to Covid-19 related \nexpenses. Earnings are expected to remain on an upward trend as the sector \ncontinues to adjust to new operating conditions through effective risk \nmanagement systems and digital banking models. The contribution of non-\ninterest income to total banking sector income has continued to strengthen \nover the past few years [Fig 7] reflecting increasing diversification of \nincome sources. \n \n \n \n0.0\n1.0\n2.0\n3.0\n4.0\n5.0\n6.0\n0.00%\n5.00%\n10.00%\n15.00%\n20.00%\n25.00%\n30.00%\n35.00%\n40.00%\nMar/16\nJun/16\nSep/16\nDec/16\nMar/17\nJun/17\nSep/17\nDec/17\nMar/18\nJun/18\nSep/18\nDec/18\nMar/19\nJun/19\nSep/19\nDec/19\nMar/20\nJun/20\nSep/20\nDec/20\nCapital $ Millions\nCAR (%)\nNet Capital\nCAR\n \n20 \n \n \n \nFigure 7 : Banking Sector Income Components \n \nSource: RBZ (2021) \n2.7 Table 2 presents the banking sector’s major risks at an aggregate level and \nassessment of the adequacy of risk management systems across the market \nas at 31 December 2020. \nTable 2:Banking Sector Risk Matrix as at 31 December 2020 \nType of Risk \nLevel \nof \nInherent Risk \nAdequacy of Risk \nManagement \nSystems \nOverall \nComposite \nRisk \nDirection of Overall \nComposite Risk \nCredit \nModerate \nAcceptable \nModerate \nStable \nLiquidity \nModerate \nAcceptable \nModerate \nStable \nForeign Exchange \nModerate \nAcceptable \nModerate \nStable \nInterest Rate \nModerate \nAcceptable \nModerate \nStable \nStrategic Risk \nModerate \nAcceptable \n Moderate \nStable \nCyber Risk \nModerate \nAcceptable \nModerate \nIncreasing \nOperational Risk \nHigh \nAcceptable \nModerate \nIncreasing \nOverall \nModerate \nAcceptable \nModerate \nStable \n \n \n \n \n -\n 10,000.00\n 20,000.00\n 30,000.00\n 40,000.00\n 50,000.00\n2014\n2015\n2016\n2017\n2018\n2019\n2020\n0%\n20%\n40%\n60%\n80%\n100%\nTotal Interest income\nTotal Non-interest income\nTotal Income\n \n21 \n \nCredit Risk \n2.8 Asset quality remained satisfactory with a non-performing loans (NPLs) to \ntotal loans ratio of 0.31% as at 31 December 2020, down from 1.75% as at \n31 December 2019. \n2.9 The trend in the NPL ratio is shown in Figure 8 below. The sector also \nimplemented Covid-19 related relief measures on asset quality, and \nenhanced credit risk management systems, particularly in light of IFRS 9 \nExpected Credit Losses (ECLs) classification and measurement \nmethodologies. \nFigure 8: Trend in NPL Ratio \n \nSource: RBZ, 2021 \n2.10 Credit risk stress test results showed that the banking sector was largely \nsusceptible to asset quality deterioration, at aggregate level. The results \nindicate that when subjected to a minor credit shock of migration of NPLs \nby 14%, the aggregate banking sector NPLs ratio would rise from 0.31% to \n14.31%. Notwithstanding such a shock, the banking sector would remain \nadequately capitalised. Further, banks are holding sufficient provisions to \nmeet any losses. A major shock of increase in NPLs by 42%, whose \n0%\n1%\n2%\n3%\n4%\n5%\n6%\n7%\n8%\nJun-18\nDec-18\nJun-19\nDec-19\nJun-20\nDec-20\n \n22 \n \noccurrence is very remote, may result in the NPLs ratio increasing to \n42.31%. Figure 9 summarises the stress test results. \n \nFigure 9: Credit Stress Test: Increase in NPLs \n \nSource: RBZ (2021) \n2.11 The credit concentration stress test, which captures the impact on a bank’s \ncapital of a default by its top borrowers, indicated that only three banks \nwere vulnerable to a minor shock, which is the default of a bank’s largest \nborrower. One more bank was vulnerable to moderate and major shocks \nrepresenting the default of a bank’s top three and five borrowers, \nrespectively as shown on Figure 10 below. \n \nFigure 10: Default of top five largest borrowers \n \nSource: RBZ (2021) \nMinor \n(3 Bank)\nModerate \n(4 Banks)\nMajor \n(6 Banks) \nNo. of Banks with CAR < 12%\nMinor\n(3 Banks)\nModerate (4 Banks)\nMajor\n(4 Banks)\nNo. of Banks with CAR<12%\n \n23 \n \n2.12 Credit concentration is sufficiently mitigated on bank balance sheets \nthrough liquidity contingency plans and other capital mobilisation \nstrategies. \nLiquidity Risk \n2.13 Most liquidity indicators showed relative stability between December 2019 \nand December 2020. The Banking Sector Soundness Index, however, \ndepicts a marginal increase in risks to liquidity reflected in a decline in the \nliquid assets to short-term liabilities ratio for commercial banks over the \nperiod under review. \n2.14 Liquidity risk is expected to remain low due to the envisaged improvement \nin the operating environment. Banks tend to reduce the transformation of \ndeposits into loans as part of a cautious approach to lending in order to \ncontain credit risk and liquidity risk. \n2.15 The liquidity stress test results showed that the banking sector is resilient \nto liquidity shocks as shown in Figure 11 below. \nFigure 11: Liquidity Stress Test Results \n \nSource: RBZ (2021) \n2.16 The Reserve Bank continuously monitors the level of available liquid assets \nagainst liquidity demanding liabilities within banks using the Prudential \nLiquidity Ratio (PLR). During the period under review all banks had a PLR \nabove the regulatory minimum of 30% and the banking sector average was \nMinor\n(1 Bank)\nModerate\n(3 Banks)\nMajor \n(10 Banks)\nNo. of Iliquid Banks by Day 5\n \n24 \n \n73.06%. Figure 12 below shows the PLR trend for the period March 2016 \nto December 2020. \nFigure 12: Trend in the Prudential Liquidity Ratio \n \nSource: RBZ (2021) \nMarket Risk \na. Interest Rate Risk \n2.17 The interest rate risk exposure in the banking sector remained moderate, as \nthe balance sheets are dominated by banking book items and limited trading \nactivities. In addition, sources of funds for banks are predominantly retail \ndeposits which are relatively less interest rate sensitive, while re-pricing \nassets are mainly loans and advances and treasury bills which have long \nrepricing cycles. \n2.18 As at 31 December 2020 the banking sector had an overall asset sensitive \nbook, with a cumulative re-pricing gap of ZW$13.03 billion in the 1-365 \ndays’ time bucket. The banking sector showed resilience to interest rate \nrisk shocks, with only three banking institutions being vulnerable to a major \nshock as shown on Figure 13 below. \n \n \n40\n45\n50\n55\n60\n65\n70\n75\n80\n1/3/2016\n1/6/2016\n1/9/2016\n1/12/2016\n1/3/2017\n1/6/2017\n1/9/2017\n1/12/2017\n1/3/2018\n1/6/2018\n1/9/2018\n1/12/2018\n1/3/2019\n1/6/2019\n1/9/2019\n1/12/2019\n1/3/2020\n1/6/2020\n1/9/2020\n1/12/2020\n(%)\n \n25 \n \nFigure 13: Interest Rate Risk Shocks \n \nSource: RBZ (2021) \n2.19 Interest rate risk is expected to remain moderate largely due to minimal \nexposure to trading in interest rate sensitive instruments. \n \nb. Foreign Exchange Risk \n2.20 Foreign exchange risk is expected to continue to be moderate in 2021 \nlargely due to the stability in the foreign exchange rate following the \nintroduction of the Foreign Exchange Auction System during the review \nperiod. The Banking Sector Soundness Index, however, showed an increase \nin risks to sensitivity to market risk attributable to the depreciation of the \nlocal currency against major currencies over the period under review. \n2.21 The banking sector had a negative net open position which was attributed \nto foreign obligations such as payment of ICT systems licences, acquisition \nof ICT infrastructure and legacy debts. The foreign currency assets \nconstituted 25.65% of the total assets whilst foreign liabilities constituted \n53% of the total liabilities. \n2.22 Stress test results show local currency volatility may have a marginal \nimpact on the banking sector capitalisation as shown on Figure 14 below. \n \nModerate\n(1 Bank)\nMajor \n(3 Banks)\nNo. of Banks with CAR<12%\n \n26 \n \nFigure 14: Foreign Exchange Risk Stress Test Results \n \nSource: RBZ (2021) \n \nStrategic Risk \n2.23 Banking institutions have robust processes to identify, quantify and mitigate \nrisks inherent in their strategic execution. Institutions activated and \nreviewed their business continuity strategies and align them with the Covid-\n19 pandemic operating environment. \n2.24 Strategic risk in the sector is also heightened by competition from fintech \ncompanies, which have the scope to disrupt the traditional banking business \nmodels by offering cheaper and more consumer-focused financial products. \nHowever, banks have since adopted strategies to collaborate with financial \ntechnology companies (fintechs) so that they can leverage on new \ntechnologies. Fintechs on the other hand would benefit from tapping into \nthe existing customer bases of traditional banks. \n \nCyber Risk \n2.25 Increased usage of electronic payments and virtual office platforms exposed \nthe banking sector to elevated cyber risks, in the form of hacking, fraudulent \ntransactions and identity theft by third parties. \nMinor\n(4 Banks)\nModerate (4 Banks)\nMajor\n(5 Banks)\nNo. of Banks with CAR<12%\n \n27 \n \n2.26 In the meantime, banks have upgraded their ICT security systems to protect \nthemselves and their clients, through enhanced security measures such as \ntwo-step authentication, among others. \n2.27 A number of banks have instituted corresponding consumer education \nprogrammes on the risks of transacting online in order to mitigate the \nheightened level of cyber risks. \n \nOperational Risk \n2.28 The banking sector witnessed numerous shifts in focus and reprioritization \nof operational and conduct risks in 2020 as institutions came to terms with \nmanaging temporary closure of branches, self-isolation of staff, dispersed \nworkforces and managing working-from- home controls. \n2.29 During the year ended 31 December 2020, the risk management systems \naround the sector, operational procedures, controls and policies were \nlargely satisafactory. \n2.30 The Bank will continue to monitor the adequacy of banks’ contingency \nplans as well as other developments that may affect the operations of banks \nwith a view to give adequate guidance to the market to maintain sector \nstability. \n \n \n \n \n \n \n \n \n28 \n \n3. \nCAPITAL MARKETS \n3.1 The capital markets continued to play a critical role in economic growth \nand development through providing infrastructural requirements to access \nlong term financing to the real sector. \n3.2 The capital markets exhibited relative stability during the course of 2020 \nagainst the background of improving economic fundamentals and the \nintroduction of the Foreign Currency Auction System. The general \nvolatility on the stock exchange experienced during the first half of 2020 \nwas largely attributable to the initial uncertainties surrounding exchange \nrate policies introduced to neutralise foreign exchange risk. \n3.3 As at December 2020, The number of licensed institutions under the \nsupervision of the Securities and Exchange Commission of Zimbabwe \n(SECZ) had increased compared to December 2019 as indicated in Table 3 \nbelow \nTable 3: Regulated institutions in the Capital Markets \n \n \n \n \n \nSource: Securities and Exchange Commission of Zimbabwe (2021) \n \n3.4 In an endeavour to increase investment diversity for both local and foreign \ninvestors as well as improve the foreign direct investment into the market, \nSECZ oversaw the establishment of the Victoria Falls Stock Exchange \n(VFEX) by the Zimbabwe Stock Exchange (ZSE). \nType of institution \n2020 \n2019 \nSecurities Exchanges \n3 \n2 \nCentral Securities Depositories \n1 \n1 \nSecurities Dealing (Stockbroking) firms \n18 \n16 \nSecurities Investment (Asset) Management firms \n22 \n16 \nSecurities Custodial firms \n5 \n5 \nSecurities Transfer Secretaries firms \n3 \n3 \nSecurities Trustee firms \n3 \n2 \nSecurities Advisory firms \n44 \n31 \n \n29 \n \nCondition and Performance of Securities Markets \n3.5 On the equity market, the All Share and Top Ten indices recorded annual \ngains of 1,046% and 733%, to end the year at 2,636.47 points and 1,671.47 \npoints, respectively. In line with the stock market rebound, high trading \nvolumes and values on negotiated trades were witnessed on several counters \nwhich included ZB, CBZ, Bindura and Zimre Holdings. Consequently, \nequity turnover grew by 754% whilst trading volumes increased by 64% on \nan annual basis. \n3.6 The performance of the two securities exchanges as at December 2020 is \nshown in the table below: \nTable 4: Securities Exchanges Performance \n \n2020 \nZimbabwe Stock Exchange \nZW$ \nZSE Turnover \n17,321,473,923 \nTraded Volume \n 3,735,809,255 \nMarket Capitalisation \n317,879,307,047 \nAll Share Index \n2,636.34 \nTop 10 Index \n1,671.47 \nNumber of Listed Companies \n51 \n \n \nFinancial Securities Exchange \n2020 \nATP Turnover \n57,251,889 \nATP Traded Volume \n1,595,785 \nATP Market Capitalisation \n2,199,810,527 \nNumber of listed Companies \n1 \nSource: Securities and Exchange Commission of Zimbabwe (2021) \n \n3.7 The trend in turnover and volume developments during period under review \nis reflected in the figure below. \n \n \n \n \n \n30 \n \nFigure 15: Zimbabwe Stock Exchange Volume/ Turnover \n \n \nSource: Zimbabwe Stock Exchange (2021) \n3.8 \n The firming up of the equities indices resulted in the market capitalization \nincreasing by 968% to ZW$317.88 billion as at December 2020, \nnotwithstanding a decrease in the number of listed entities by 15%. The \ntable below summarises the overall performance in the Equities market \nfrom 2018. \nTable 5: Equity Markets Performance Summary \n Zimbabwe Stock Exchange \n2020 (ZW$) \n2019 (ZW$) \n2018(ZW$) \n% Change \nZSE Turnover \n17,321,473,923 \n2,028,580,517 \n926,309,643 \n754% \nTraded Volume \n 3,735,809,255 \n2,283,747,926 \n2,517,356,999 \n64% \nMarket Capitalisation \n317,879,307,047 \n29,767,094,449 \n19,424,406,159 \n968% \nAll Share Index \n2,636.34 \n230.08 \n146.24 \n1046% \nTop 10 Index \n1,671.47 \n200.56 \n - \n733% \nNo of Listed Companies \n51 \n60 \n64 \n-15% \nSource: Zimbabwe Stock Exchange (2021) \n \n3.9 The suspension of dual listed companies on the ZSE on 26 June 2020 and \nthe launch of the Victoria Falls Stock Exchange (VFEX) on 23 October \n2020 reshaped the composition of the indices. As at the end of 2020, only \n -\n 500\n 1,000\n 1,500\n 2,000\n 2,500\n 3,000\n 3,500\n 4,000\n 4,500\n 5,000\n -\n 200\n 400\n 600\n 800\n 1,000\n 1,200\nFeb-15\nApr-15\nJun-15\nAug-15\nOct-15\nDec-15\nFeb-16\nApr-16\nJun-16\nAug-16\nOct-16\nDec-16\nFeb-17\nApr-17\nJun-17\nAug-17\nOct-17\nDec-17\nFeb-18\nApr-18\nJun-18\nAug-18\nOct-18\nDec-18\nFeb-19\nApr-19\nJun-19\nAug-19\nOct-19\nDec-19\nFeb-20\nApr-20\nJun-20\nAug-20\nOct-20\nDec-20\nMillions\nVolume\nMillions\nZSE Trading Turnover/ Volume \n Volume\n Turnover\n \n31 \n \nSeedco International had listed on the VFEX and the other two counters \nnamely Old Mutual and PPC remained temporarily suspended from trading. \n3.10 The top ten counters’ contribution to the total market capitalisation declined \nfrom 73.4% in 2019 to 68.5% in 2020. The figure below summarises the \ncomposition of the top ten counters on the ZSE between 2019 and 2020. \nFigure 16: Top Ten Counters to Market Capitalisation \n \nSource: Zimbabwe Stock Exchange (2021) \na) ZSE All Share Index (ALSI) \n3.11 The ALSI volatility, which was calculated using Industrial Indices from \nJanuary 2018 to December 2020, was estimated at 5.461% as of 31 \nDecember 2020, using a smoothing constant of 0.97. The major spike on \nreturns in April 2020 was attributed to socio-economic changes which saw \nthe equity market prices surge in response to rising demand as investors \nsought to hedge against inflation. Naturally, uncertainties in the \nmacroeconomic environment continued to inform the performance of the \nmarket. Trends in the ZSE ALSI are shown in the figure below. \n \n \n \n \nTop Ten Market Cap %\nDELTA\nCASSAVA\nECONET\nOLD MUTUAL\nINNSCOR\nPADENGA\nBAT\nSEEDCO INTL\nSIMBISA\nOK ZIM\n2019 \n(73.41%)\nCBZ\nDELTA\nECONET\nINNSCOR\nHIPPO\nCASSAVA\nPADENGA\nBAT\nOK ZIM\nFBC\n2020 \n(68.53%)\n \n32 \n \nFigure 17: All Share Index EWMA Relative Volatility (January 2018 –December 2020) \n \nSource: Zimbabwe Stock Exchange (2021) \n3.12 The FINSEC Alternative Trading Platform (ATP) market capitalisation \nclosed at $2.19 billion in December 2020, reflecting a significant growth of \n121% from ZW$996 million in 2019. Turnover grew by 15% (ZW$57.5 \nmillion) while the volume of shares traded fell by 84% to 1.6 million from \n9.8 million in the previous year. Table 6 below summarises the overall \nperformance of the FINSEC ATP. \nTable 6: FINSEC ATP Performance Summary \nFinancial Securities Exchange \n2020 \n2019 \n2018 \n% change \nATP Turnover (ZW$) \n57,251,889 \n49,907,564 \n5,118,548 \n15% \nATP Traded Volume \n1,595,785 \n9,886,188 \n1,682,086 \n-84% \nATP Market Capitalisation (ZW$) \n2,199,810,527 \n996,140,616 \n410,908,004 \n121% \nNumber of listed Companies \n1 \n1 \n1 \n \nSource: Securities and Exchanges Commission (2021) \nb) Investment Management \n3.13 Funds under Management (FUM) for the industry as at 31 December 2020 \nstood at ZW$156.5 billion representing an increase of 9.40 times from \nZW$15.05 billion reported as at 31 December 2019. The increase was \nmainly attributed to properties asset revaluations following the conversion \nof United States Dollar (US$) denominated assets and equities. \nSep-17\nApr-18\nOct-18\nMay-19\nDec-19\nJun-20\nJan-21\nJul-21-20.000%\n0.000%\n20.000%\n40.000%\n60.000%\n80.000%\n100.000%\n0.00\n500.00\n1,000.00\n1,500.00\n2,000.00\n2,500.00\n3,000.00\nJun-17\nDec-17\nJul-18\nFeb-19\nAug-19\nMar-20\nSep-20\nApr-21\nALSI Points\nMoM\nAll Share Index\nAll Share\nReturns ^2\n \n33 \n \nTable 7 : Asset Management Summary (December 2020) \nAsset Management \n2020 \n2019 \n2018 \nChange \nFunds under Management (Total FUM) \n(ZW$) \n156,539,539,068 \n15,050,708,208 \n7,159,044,293 \n940.1% \nCollective Investments Schemes (CIS) (ZW$) \n730,246,168 \n167,023,446 \n168,176,773 \n337.2% \nCIS / Total Market FUM \n0.5% \n1.1% \n2.3% \n-58.0% \nNumber of Players \n 22 \n 19 \n 16 \n15.8% \n**Capital Adequacy Compliance (%) \n72.2% \n77.8% \n93.8% \n-7.1% \n**Firms' Positive Earnings (%) \n89.5% \n100.0% \n62.5% \n-10.5% \n \n \n \n \n \nSource: Zimbabwe Stock Exchange (2021) \n**Data as at 30 September 2020 \n3.14 Meanwhile, the sector’s profitability and capital adequacy ratios declined \nover the review period to 89.5% and 72.2% respectively as a result of the \nrisk adjusted capital framework adopted by the Securities and Exchange \nCommission which takes into account the assets volatility and requisite risk \nexposure. \n3.15 Overall assets under management went up by 337.2% while a decrease of \n58% was recorded for collective investment schemes (CIS) from 1.1% to \n0.5% of the total funds under management. Generally, there is limited asset \ndiversity in assets invested in CIS funds which tends to limit investments \nand permutations. The trend in funds under management over the last few \nyears is shown in Figure 18 below. \n \n \n \n \n \n \n34 \n \nFigure 18: Funds under Management as at 31 December 2020 \n \nSource: Securities and Exchange Commission (2021) \n \nCapital Markets Risks and Risk Management Measures \n3.16 Notwithstanding risks posed by the Covid-19 scourge, the overall \nprofitability of the capital markets in respect of securities dealing firms, \ntransfer secretaries and exchanges slightly improved on the back of growth \non the Zimbabwe Stock Exchange. \n3.17 Securities Market Intermediaries adopted comprehensive measures to \nmitigate the spread of Covid-19 and ensure availability of uninterrupted \nfinancial services. Measures included enhanced usage of technology, \nencouraging customers to use online channels, reassessing business \ncontinuity plans, and enhancing the monitoring frequency of key risk areas \nsuch as credit, capital market and foreign exchange exposures etc. \n3.18 Table 8 below presents a summary of the risks to financial stability arising \nfrom the macroeconomic environment and the capital markets as well as \nvarious mitigatory measures. \n \n-\n20 \n40 \n60 \n80 \n100 \n120 \n140 \n160 \n180 \nBILLIONS\n \n35 \n \nTable 8: Summary of Key Risks to Capital Markets and Risk Mitigation Measures \nTop Risks Identified \nDescription \nLikely Impact \nIncrease in Domestic Inflation \nThe risk of increasing domestic inflation necessitated by \ninformal sector prices linked to parallel markets rates on \nretail and commercial goods. \nMedium \nSlowdown in Domestic Growth \nThe risk of slowed national growth due to the Covid-19 \ninduced restrictions and challenges which may affect the \ngrowth projections and expectations in fulfilling national \nagenda. \nMedium \nVolatility in Property and Equity \nPrices \nThe risk of increasing volatility on the equity and property \nmarkets as investors hedge against inflation and foreign \nexchange movements on the local currency \nMedium \nForeign Exchange Risk \nThe risk of the currency depreciation on the Zimbabwean \ndollar against other currencies in the world and region \nwhich will increase costs of raw materials and increased \ndemand for foreign currency by the local entities. \nMedium \nInterest Rate Risk \nIncreasing interest rate risk fluctuations due to the \ninflationary pressures as instruments reprice over time \nLow \nGeopolitical Risk \nThe risk emanating from political instability within the \ncountry from political and civic rights groups and Islamic \ninsurgents in the region (Mozambique) which directly \naffects foreign direct investments \nMedium \nWidening fiscal deficit \nThe possible risk emanating from fiscal deficit caused by \nthe supplementary budgets induced by Covid-19 stimulus \npackages. \nMedium High \nDeterioration of household \nsavings \nThe risk of deterioration of household savings as the nation \ngrapples with Covid-19 induced restrictions to grow \nbusiness. \nMedium Low \nSlowdown in Corporate Sector \nGrowth \nThe risk emanating from the Covid-19 challenges to grow \nthe domestic corporate sector due to travel and movement \nrestrictions leading to shortages and price increases on \nconsumers \nMedium \n \n 1=Low, 2=Medium Low, 3=Medium, 4=Medium High, 5=High \n \n \n \n \n \n \n \n \n \n \n \n \n 1 \n \n2 \n \n3 \n \n4 \n \n5 \n \n36 \n \n4. \nINSURANCE AND PENSIONS INDUSTRY \n4.1 The insurance and pensions sector continued to positively contribute to \neconomic growth through its mechanism of risk transfer and the \nintermediation role across the economy. \n4.2 The sector remained largely sound and resilient despite the difficult \noperating environment while the outlook period was considered stable. \nInsurance Sector \na) Industry Architecture \n4.3 As at 31 December 2020, the insurance industry was made up of 84 \nregistered players excluding agents as shown in the table below: \nTable 9 : Insurance Sector Infrastructure as at December 2020 \nClass of Business \nNumber of Registered Players \nLife Assurance \n12 \nFuneral Assurance \n8 \nNon-life Insurers \n18 \nNon-life Reinsurers \n4 \nComposite Reinsurers \n4 \nInsurance Brokers \n31 \nReinsurance Brokers \n7 \nTotal \n84 \nSource: Insurance and Pensions Commission (2021) \n \nb) Performance and Financial Condition \n4.4 Despite the challenging economic environment, the industry reported 580% \ngrowth in premium income as shown in the table below: \n \n \n \n \n37 \n \nTable 10 : Insurance Sector Premium Income (ZW$ Thousands) \nClass of Business \n31 Dec 2020 \n31 Dec 2019 \nGrowth \nShort term Insurers \n9, 110, 000 \n1,370, 000 \n565% \nShort term Reinsurers \n5, 300,000 \n664, 900 \n697% \nLife Assurers \n3, 650, 000 \n596, 930 \n 511% \nLife Re-assurers \n87, 530 \n12, 544 \n598% \nFuneral Assurers \n61,110 \n34,560 \n77% \nTotal Gross Premiums \n18, 286, 640 \n2,678,934 \n580% \nSource: Insurance and Pensions Commission (2021) \n \nc) \nIndustry Assets \n4.5 The insurance industry assets and liabilities stood at ZW$49.42 billion and \nZW$20.02 billion respectively as at 31 December 2020 as shown below: \n \nTable 11 : Insurance Industry Assets and Liabilities (ZW$ Thousands) \n \nShort \nTerm \nReinsurers \nLife Assurers \nLife Reassurers \nFuneral \nAssurers \nInsurance \nBrokers \nReinsurance \nBrokers \nTotal \nNon-Current \nAssets \n3,990,880 \n2,796,740 \n28,756,024 \n0 \n779,747 \n17,800 \n9,010 \n36,350,201 \nTechnical \nAssets \n320,110 \n316,620 \n0 \n0 \n0 \n0 \n0 \n636,730 \nCurrent Assets \n4,558,400 \n3,290,000 \n3,843,541 \n641, 269 \n88,151 \n2,330 \n7,910 \n12,431,601 \nTotal \n8,869,390 \n6,403,360 \n32,599,565 \n641, 269 \n867,898 \n20,130 \n16,920 \n49,418,532 \n \n \n \n \n \n \n \n \n \nEquity \n4,202,140 \n3, 224, 502 \n17,025,655 \n2, 153, 743 \n528,209 \n418, 617 \n9,540 \n21,765,544 \nTotal Liabilities \n242,710 \n2, 830, 143 \n15,573,800 \n523, 235 \n339,689 \n514, 660 \n7.380 \n20,024,244 \n \n \n \n \n \n \n \n \n \nRisk Retention \nRatio \n42.81% \n64.02% \n97,95% \n65,75% \n100% \n \n \n \nExpense Ratio \n48.87% \n24.10% \n29,22% \n16,00% \n64.62% \n \n \n \nSource: Insurance and Pensions Commission (2021) \n \nd) \nCapitalisation Levels \n4.6 A total of 74 out of the 84 insurance entities were compliant with the new \nminimum capital requirements as at 31 December 2020, as shown in the \ntable below: \n \n38 \n \nTable 12 : Insurance Sector Minimum Capital Requirements Compliance \n \nNumber of Compliant Entities \nAverage Compliance (%) \nLife Companies \n10 out of 12 \n83% \nLife reassures \n4 out of 4 \n100% \nNon-Life Companies \n18 out of 18 \n100% \nNon-Reinsurers \n4 out of 4 \n100% \nFuneral Assurers \n3 out of 8 \n38% \nInsurance Brokers \n28 out of 31 \n94% \nReinsurance brokers \n7 out of 7 \n100% \nSource: Insurance and Pensions Commission (2021) \n \nPensions Sector \na) \nPensions Industry Infrastructure \n4.7 The number of registered pension funds was 967 with a total of 881 330 \nmembers as at 31 December 2020. Of the registered funds, 592, constituting \nabout 61.2% were active whilst 38.8% were inactive funds. The high \nnumber of inactive funds was largely attributed to viability challenges of \nsponsoring employers which was worsened by the Covid-19 pandemic. \nThe pandemic has seen some funds applying for suspension of contributions \nand paid-up status. \n \nb) Performance and Financial Condition \n4.8 The industry assets were valued at ZW$110.24 billion, having increased in \nnominal terms by 273.06% from ZW$29.55 billion reported as at 31 \nDecember 2019. In real terms, the asset base declined by 24% from US$1.8 \nbillion as at 31 December 2019 to US$1.35 billion as at 31 December 2020. \n4.9 The breakdown of assets by asset class as at 31 December 2020 is shown \nbelow: \n \n39 \n \n Figure 19: Total Assets by Class of Investment as at December 2020 \n \nSource: Insurance and Pensions Commission (2021) \n \n4.10 As shown in the figure above, investment property constituted 47% of the \npensions industry assets, whilst equities were 34%. This is on account of \nthe repricing of these two asset classes which is faster than the other classes. \n4.11 Total income for the 12 months ended 31 December 2020 amounted to \n$79.2 billion. The breakdown of income, expenditure and the resulting \nsurplus for the period is shown in the table below. \n Table 13: Financial performance of the Pensions Industry \nIndicator \n31 December 2020 \n31 December 2019 \nTotal Contributions (ZW$ billions) \n5.2 \n0. 69 \nInvestment Income (ZW$ billions) \n71.54 \n8.7 \nTotal Income (ZW$ billions) \n79.2 \n2.69 \nTotal Benefits Incurred (ZW$ billions) \n3.30 \n9.6 \nTotal Expenditure (ZW$ billions) \n5.0 \n0.56 \nIncome Surplus (Deficit) (ZW$ billions) \n74.20 \n8.99 \nExpenses/Contributions \n32.83% \n26.5% \nExpenses/Total Income \n2.18% \n1.91% \nSource: Insurance and Pensions Commission (2021) \n \n \n40 \n \n4.12 The industry reported a surplus of ZW$74.20 billion for the 12 months \nended 31 December 2020 compared to a surplus of ZW$8.99 billion in the \nsame period in 2019. The surplus was mainly driven by investment income \ntotalling ZW$71.54 billion. Investment income was mainly driven by fair \nvalue gains due to property revaluations and a bull run on the Zimbabwe \nStock Exchange. \n \nRisks to the Insurance and Pensions Sectors \na. Economic Risk \n4.13 Economic risk was considered moderate due to the real growth that was \nrecorded in the sector as a result of the relative stability in the economy. \nDespite the forecasted decreases in Gross Premiums Written due to the \neffects of Covid-19, the insurance industry recorded a nominal positive \ngrowth rate of 586%. \n \nb. Reputational Risk \n4.14 Following the currency reforms implemented in 2019, payment of benefits \nin local currency on contracts that had been made in foreign currency \nheightened the industry’s reputational risk. The expectation of \npolicyholders and pension scheme members was to receive their benefits in \nforeign currency notwithstanding the currency reforms. This further dented \nconfidence in the sector which saw some products becoming irrelevant and \nsome members requesting full commutations of their accumulations. \n4.15 To address the potential loss of value from the 2019 currency reforms, the \nInsurance and Pensions Commission issued a Guideline to the Insurance \nand Pensions Industry on Adjusting Insurance and Pension Values in \nResponse to Currency Reforms which has largely restored public \nconfidence reflected by increasing pension values. \n \n \n41 \n \nc. Market Risk \n4.16 Market risk was considered moderate to high on account of asset-liability \nmismatches due to unavailability of value-preserving short-term investment \nassets which match the liability profiles of insurance companies and \npension funds. For effective asset liability matching, the assets must match \nthe nature, tenure, and currency of the liabilities. Following approval for \ngeneral public to purchase insurance and pension products in foreign \ncurrency using free funds, there is need for asset classes that match the \ncurrency of liabilities. Further, the forex market should be deep and liquid \nenough to absorb the forex premiums and contributions to allow orderly \nexits should the need arise. It is envisaged that the risk will be mitigated \ngoing forward as activity on the Victoria Falls Stock Exchange increases. \n \nd. Operational Risk \n4.17 Operational risk was considered high on account of the threat to business \ncontinuity in the Covid-19 environment. In addition, the increasing Covid-\n19 infection and deaths rates at the end of 2020 had direct impact on claims, \nthreatening viability of some funeral assurers. \n4.18 The extensive usage of digital platforms by both the customers and \nemployers across the sector has increased the level of cyber security threats. \n4.19 Inter-company investments pose a risk to the operations of insurance \ncompanies thus contributing to contagion risk. In the funeral insurance \nsector, there is a direct relationship between the funeral assurance \ncompanies and the funeral service providers. Although the exact figure of \ninter-company exposure is not available for the whole industry, information \nfrom the inspections conducted during the review period reflects that \nintercompany exposure in the insurance industry is low. \n \n \n \n42 \n \ne. Regulatory and Compliance Risk \n4.20 Regulatory and compliance risk was considered low on account of \nimprovements in compliance with the minimum capital requirements \n(MCR) with 87% of all regulated entities being compliant as at 31 \nDecember 2020. \nTable 14: Compliance with Minimum Capital Requirements as at 31 December 2020 \nClass of Business \nMCR \n(ZW$ \nMillions) \nNo. of Entities \nNo. of Compliant \nCo. \n% \nCompliance \nStatus \nInsurance Brokers \n1.5 \n32 \n28 \n88% \nReinsurance Brokers \n1.5 \n7 \n7 \n100% \nFuneral Companies \n62.5 \n8 \n3 \n38% \nShort-term Insurers \n37.5 \n18 \n18 \n100% \nReinsurance \n75 \n8 \n8 \n100% \nLife Assurers \n75 \n12 \n10 \n83% \nMicro-insurers \n4.5 \n2 \n2 \n100% \nAverage Compliance \nlevel \n \n \n \n87% \nSource: Insurance and Pensions Commission (2021) \n \n4.21 Compliance with prescribed asset requirements was, however, low at an \naverage of 3.69% for short-term insurers, 2.43% for life assurers and 6.41 \n% for pension funds against compliance thresholds of 10%, 15% and 20% \nrespectively. The low compliance levels are on account of the adverse \nimpact of inflation on fixed income securities. Insurers and pension funds \nare shunning value eroding assets, which saw investment portfolios skewed \ntowards investment property and listed equity. This is compounded by \nmemories of 2009 loss of value and need for compensation after Justice \nSmith loss of value investigation. \n4.22 The above scenario has led to concentration of investments in few asset \nclasses which impacts the institutions’ portfolio diversification strategies, \nwhile prospects for Government and other issuers of paper to mobilise \nresources from institutional investors become limited. \n \n43 \n \n4.23 To ensure compliance with prescribed asset requirements, the Commission \nhas widened the framework for prescribed assets to include alternative \ninvestments such as private equity. Engagements are also ongoing with the \nindustry and Government in an effort to come up with value preserving \ninstruments which are attractive to the industry. \n \nf. Liquidity Risk \n4.24 Liquidity risk was considered moderate with 46.83% of total assets in \ninvestment property. The concentration of assets in investment property is \nworsened by growth in contribution arrears, suspension in contributions and \nfunds being in paid up status. The risk is, however, unlikely to pose \nsignificant threat to the financial sector stability. \n \ng. Credit Risk \n4.25 Credit risk was considered moderate due to sponsoring employers failing to \npay pension contributions on time and to adhere to agreed payment plans. \n4.26 In the insurance sector, players have experienced significant premium \ndebtors which presents the risk that some companies may fail to realise the \npremiums. Insurers may then fail to honour claims when they fall due as \npremiums remain uncollected thereby eating into reserves and depleting \ntheir insurance pools. \n \n \n \n \n \n44 \n \nTable 15: Insurance and Pensions Sector Risk Matrix \nRisk Type \nRisk Level \nRisk Direction \nEconomic Risk \nModerate \nStable \nOperational Risk \nHigh \nHigh \nRegulatory and Compliance Risk \nModerate \nStable \nLiquidity Risk \nModerate \nStable \nCredit Risk \nModerate \nStable \n \n1=Low, 2=Moderate Low, 3 = Moderate, 4=Moderate High, 5=High \n \nRisk Mitigatory Measures \n4.27 The following mitigatory measures were implemented to manage the risks \nidentified as threats to the insurance and pensions sector during the review \nperiod: \na. \nGovernment bailout package (ZW$75 million allocated in 2020 \nNational Budget); \nb. \nIssued SI 280 of 2020 that allows payment of insurance premiums and \npensions and settlement of benefits in US$; \nc. \nIssued Guidance Paper on Currency Reforms to ensure equitable \nallocation of revaluation gains following the 2019 Currency Reforms; \nd. \nReviewed Framework for Prescribed Assets to include private equity, \nhybrid instruments, other alternative investments and Public–Private \nPartnerships (PPPs); \ne. \nIndustry challenged to issue innovative products and offer promotions \nthat encourage clients to continue paying premiums; \nf. \nUse of reinsurance especially for the funeral sector which has long \nshunned reinsurance arrangements; \n \n 1 \n \n2 \n \n3 \n \n4 \n \n5 \n \n45 \n \ng. \nEncourage mergers and takeovers for entities with higher risk of not \nmeeting the minimum capital requirements; and \nh. \nIssuance of inflation-indexed instruments. \n \n4.28 IPEC continues to monitor risks in the insurance and pensions industry and \nto provide guidance on mitigation of the risks while tapping into valuable \nlessons from fellow regulators locally and internationally. \nRegulatory Developments \n4.29 The commission registered the following regulatory developments: \na. \nMinimum Capital Requirements – Issued S.I. 59 of 2020 on MCRs. \nb. \nRisk-Based Capitalisation (ZICARP) – progressing well \nc. \nForeign-denominated policies – issued S.I. 280 of 2020 permitting \nwriting of forex business by insurers and pension funds \nd. \nOngoing Review of the Acts – the Insurance Act, IPEC Act and the \nPensions & Provident Funds Act. \ne. \nIssuance and enforcement of Guideline on Currency Reforms – S.I. 69 \nof 2020. \nf. \nIssued Circular 26 of 2020 IAS 29 (Financial Reporting in \nhyperinflationary economies \ng. \nIssued Risk Management and Corporate Governance Guidelines for \nthe Pensions Industry (Circular 11 of 2020) \n \n \n \n \n \n \n46 \n \n5. \nDEPOSIT PROTECTION SYSTEM \n \n5.1 Effective deposit protection is an important facet of any financial system \nsafety net, promoting public confidence in the sector. \n \nDeposit Protection Corporation Cover Level \n \n5.2 As at 31 December 2020, 95.5% of the banking sector’s depositor accounts \nwere fully covered at the cover level of ZW$10,000 per depositor per bank. \nThis is in line with the Public Policy Objectives of ensuring that at least \n90% of the depositors are fully covered. \n5.3 The deposit insurance coverage for the conventional banking institutions is \nreflected in Table 16 below: \nTable 16: Deposit Insurance Coverage for Conventional Banking Institutions \nItem \nDecember 2020 \nPercentage \nTotal Number of Deposit Accounts \n5,294,740 \n100% \nTotal Number of Deposit Accounts Fully Covered. \n5,058,088 \n95.5% \nTotal Number of Deposit Accounts Partially Covered. \n236,652 \n4.5% \nValue of Deposits in Fully Covered Accounts \nZW$2.9 billion \n3.2% \nValue of Deposits in Partially Covered Accounts. \nZW$87.7 billion \n96.8% \nTotal Value of Insured Deposits \nZW$5.3 billion \n5.8% \nTotal value of deposits \nZW$90.6 billion \n100% \nSource: Depositors Protection Corporation (2021) \n \n5.4 At the cover level of ZW$500 per depositor per institution, 96.2% of the \ndeposit-taking microfinance institutions (DTMFIs) depositors were fully \ncovered as shown in Table 17 below: \n \n \n \n \n47 \n \nTable 17 : Deposit Protection Cover for DTMFIs as at 31 December 2020 \nItem \nDecember 2020 \nPercentage \nTotal Number of Deposit Accounts \n150,989 \n100% \nTotal Number of Deposit Accounts Fully Covered. \n145,190 \n96.2% \nTotal Number of Deposit Accounts Partially Covered. \n5,799 \n3.8% \nValue of Deposits in Fully Covered Accounts \nZW$2.9 million \n1.2% \nValue of Deposits in Partially Covered Accounts. \nZW$230.6 million \n98.8% \nTotal Value of Insured Deposits \nZW$5.8 million \n2.5% \nTotal Value of Deposits \nZW$233.5 million \n100% \nSource: Depositors Protection Corporation (2021) \n \n \nRisks to the Deposit Protection Corporation Fund \n5.5 The DPC Fund is inherently exposed to funding and investment risk. \n5.6 Premiums collected by the Corporation are mainly invested on the money \nmarket in local currency instruments. Depreciation of the Zimbabwean \ndollar against the United States Dollar and the high inflation environment \nhave the potential of diminishing the value of the Deposit Protection Fund. \n5.7 The other risks are outlined in the table below. \nTable 18: Risks to the Financial Safety Net \nType of Risk \nLevel of \nInherent \nRisk \nRisk Mitigants \nQuality Risk rating \nResidual \nRisk \nTrend of Risk \nMacroeconomic Risk \n \nCovid-19 induced supply chain \ndisruptions \n \ninflationary pressures, \n \nlow aggregate demand, \n \nlow production and \n \nglobal economic risk. \nHigh \nLow \n vaccination to achieve herd immunity \n ZW$18 billion fiscal social support to business & \nindividuals \n Restrict money supply growth to below 22.5% per \nquarter. \n Funding of agricultural productivity \nHigh \nStable \nCovid-19 Pandemic \n High death and hospitalisation rates. \n Covid-19 induced supply chain \ndisruptions & economic activity. \n Reallocation of resources from \nother development programmes \n \nHigh \nHigh \n Lockdowns to restrict spread of disease \n Encourage telecommuting at work places \n vaccination of at least 60% of the population to \nachieve herd immunity \n limited opening of boarders for commerce \nHigh \nModerate \nInflation Risk \n ZW$ prices indexed at depreciating \nparallel market rates \n High government and local \nauthority service charges \n High fuel and electricity charges \nHigh \nModerate \n Allocation of foreign currency on the auction system \nis key in maintaining a stable exchange rate and \nmonetary stability. \n Restrict money supply growth to below 22.5% per \nquarter. \n \nModerate \n \nStable \n \nHazard risks \n Climate Change & Global Warming \nHigh \nLow \n Develop climate proof production systems e.g. \nHigh \nIncreasing \n \n48 \n \nType of Risk \nLevel of \nInherent \nRisk \nRisk Mitigants \nQuality Risk rating \nResidual \nRisk \nTrend of Risk \n Cyclones, earthquakes and droughts \nHazards materialises as credit and \noperational \nrisks \nto \nfinancial \ninstitutions. \n \nirrigation in agriculture. \n Reduction in the emission of greenhouse gases. \n incorporate \nhazard \nrisks \nin \nEnterprise \nRisk \nManagement and financial sector resilience\\ stress \ntests frameworks. \n Strengthening Civil Disaster Response units \nOperational Risk \n Effectiveness of management \ncontrols in era of telecommuting \n Disruptions to business processes \ndue to power and ICT failures \n People risks due to high cost of \nliving against depressed wages \nModerate \nModerate \n Telecommuting policies and procedures. \n Importation of power and installation of solar based \npower systems \n Continuous review of wages and salaries and \noffering of non-financial benefits \n \nModerate \nStable \nCyber Risk \n Accelerated Digitisation for \nfinancial services offerings. \n digital platforms exposed to cyber-\ncrimes such as card cloning, pin \nhacking, and sophisticated IT \nviruses \nHigh \nModerate \n promulgation of cyber security bill \n upgrade of cyber security systems \n public or client education campaigns \n client electronic notifications or messaging warning \nof cyber-attacks. \nHigh \nincreasing \n \n \nKEY \n \nGreen \n- Level of risk is considered minor \nLime \n- Level of risk is considered low \nYellow - Level of risk is considered moderate \nOrange- Level of risk is considered high \nRed \n- Level of risk is considered extreme \nTREND \nGreen \n- Level of risk is expected to decrease in the next 12 Months \nAmber - Level of Risk is expected to remain stable in the next 12 Months \nRed \n- Level of risk is expected to increase in the next 12 months. \n \n \nRisk Mitigation \na. Adequate Funding: \n5.8 Adequacy of the DPC Fund is of paramount importance in enhancing the \nCorporation’s operational readiness to pay depositors in the event of \noccurrence of a compensating event. At ZW$134.9 million as of 31 \nDecember 2020, the DPC Fund was inadequate to cover an exposure of \nZW$166.9 million to the eight (8) contributory institutions (CIs), including \nmostly DTMFIs, on the watch list category. \n5.9 With effect from 1 January 2021, the Corporation reviewed upwards the \npremium rate from 0.2% to 0.3% per annum, as one of the strategies to close \nthe funding gap. \n \n \n49 \n \n \n \nb. Protection of FCA deposits \n5.10 The DPC is liaising with stakeholders for protection of FCA deposits which \nhave remained uncovered by the Deposit Protection Scheme (DPS) since \nJanuary 2019. As at 31 December 2020, gross FCA deposits were US$1.6 \nbillion or ZW$130.9 billion at the prevailing rate of ZW$81.79/US$1 and \naccounted for 55.1% of the combined gross ZW$ and converted FCA \ndeposits of ZW$237.7 billion in the banking sector. \n5.11 Extension of deposit protection to FCA Deposits, which is under \nconsideration is expected to help to boost depositor confidence and promote \noverall financial stability. \nc. Investment Diversification: \n5.12 The Corporation is actively diversifying its investment portfolio to hedge \nagainst inflation as well as improve the rate of return on investment. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n50 \n \n6. \nFINANCIAL MARKETS INFRASTRUCTURE \n6.1 In 2020, the Reserve Bank continued to advance the development of the \npayment, clearing and settlement sector with efforts primarily geared \ntowards promoting and accelerating the digital financial services and \nbuilding financial resilience. \n6.2 Notably, the sector registered significant investment in the information and \ncommunication technology resulting in achievement of a strategic fit of \n90% digital payment transactions in the economy. \n6.3 The national payment system is well positioned to deal with some of the \nchallenges posed by the Covid-19 pandemic. \nPayment Systems Transactional Activities \n6.4 Total value of national payment systems transactions increased 5.43 times \nto ZW$2.503 billion in 2020 from to ZW$389 billion in 2019, while the \nvolumes decreased by 10% to 1.9 billion in 2020 from 2.1 billion in 2019 \ntransactions as shown in Figure 20 below. \nFigure 20: Total Annual Payment Systems Transactions from 2009 - 2020 \n \nSource: RBZ(2021) \n6.5 There are notable increases in transaction volumes, over the last few years \nas reflected above. The current systems have capacity to handle further \nincreases in transactions and remain stable. \n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n -\n 50.00\n 100.00\n 150.00\n 200.00\n 250.00\n 300.00\n 350.00\n 400.00\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019\n2020\nVolumes in Billions\nVlaues in ZWL Billions\nVALUES LHS\nVOLUMES RHS\n \n51 \n \n6.6 The Bank monitors payment systems providers and participants on an \nongoing basis to ensure systems have sufficient capacity to cater for \ntransaction volumes growth. \n6.7 Further, the Bank monitors growth in POS and Mobile transactions to \nensure that the related collateral is updated timeously and adequately to \nmanage systemic and credit risks. \n6.8 The management of settlement and liquidity risks in the clearing and \nsettlement schemes was found to be satisfactory to maintain safety and \nstability of the payment systems. \n6.9 Over the review period, electronic money on mobile money platforms was \nnoted to be adequately aligned to the bank balances at the participating \nbanks. In this regard, real time online monitoring of systems continued \nsmoothly both at banks and mobile money systems. \n6.10 The Real Time Gross Settlement System (RTGS) is particularly critical for \nlarge value, time critical payments between system participants, other retail \npayment systems and central securities depositories. Stability of the system \nis critical as the system manages a greater part of the transactions. The Bank \nwill continue to encourage channelling of large value transactions through \nthis system, which is credit-push based, to manage systemic risks. \n6.11 The RTGS annual transactional values and volumes are shown in Figure 21 \nbelow. \nFigure 21: RTGS Annual Transactional Values and Volumes 2009-2020 \n \nSource: RBZ(2021) \n -\n 2\n 4\n 6\n 8\n 10\n 12\n0\n25\n50\n75\n100\n125\n150\n175\n200\n225\n250\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\n2019\n2020\nVOLUMES IN MILLIONS\nVALUES IN BILLIONS\nValues\nVolume\n \n52 \n \n6.12 The Large Value Payment, Clearing and Settlement Systems - RTGS and \nCentral Securities Depository (CSD) - maintained a high level of \navailability of 99% during the year under review with few network \nconnectivity challenges experienced. \n6.13 Meanwhile, the Bank has engaged the CDS system supplier on a required \nupgrade of the platform to ensure the flawless processing of transactions \nand system availability at times. \n6.14 RTGS and CSD systems are financial market infrastructures through which \nthe Bank implements monetary policy and provides liquidity to the financial \nsystem. Against this background, continuous upgrades are critical in \nensuring financial stability and upholding the public interest objectives of \nsafety and soundness of payment infrastructure. \n \nInteroperability \n6.15 All players including mobile money entities are connected to the \nZimswitch platform effective 15th of August 2020, in line with the Banking \n(Mobile \nTransmission, \nMobile \nBanking \nand \nMobile \nMoney \nInteroperability) Regulations, Statutory Instrument (S.I.) 80 of 2020. The \ninteroperability has enhanced convenience to the market and reduced \ntransactional costs through efficiency and shared infrastructure. \n6.16 Resultantly, the value of mobile interoperability transactions increased \nfrom ZW$400 million in October 2020 to ZW$1.033 billion in December \n2020 as shown in Figure 22 below. Going forward the transaction values \nand volumes are expected to maintain the growth trajectory in 2021. \n \n \n \n \n \n \n53 \n \nFigure 22: Mobile Payments Interoperability Transaction October 2020-March 2021 \n \nSource: RBZ(2021) \n \n6.17 As the transaction volumes increase in 2021 the related exposures, required \ncollateral, settlement and systemic risk are also expected to grow in \nsympathy. As such the Bank will continue to monitor the collateral \nmanagement system in line with the increased exposures to ensure payment \nsystems stability. \nNew Payment Systems, Services and Delivery Channels \n6.18 The growth of payment systems providers and participants as well as \nrelated access devices and channels is critical for stability and competition \nwhich enhance consumer protection and market conduct issues. \n6.19 In this regard the Bank has continued to strengthen the approval and \nlicensing requirements as well as the due diligence processes to ensure that, \nno risk is imported into the financial services sector through the payment \nsystems. The Bank assessed and approved 21 innovative products during \nthe period under review. These were mainly aimed at meeting the increasing \ndemand and change in consumer tastes which include mobile banking, card \nand enhancements of use cases of existing electronic products among others \nas indicated by Figure 23 below. \n -\n 100\n 200\n 300\n 400\n 500\n 600\n 700\n 800\n 900\n -\n 0.20\n 0.40\n 0.60\n 0.80\n 1.00\n 1.20\n 1.40\n 1.60\n 1.80\n 2.00\nOct-20\nNov-20\nDec-20\nJan-21\nFeb-21\nMar-21\nVolumes in Thousands\nValues in Billions\nIncoming Values LHS\nOutgoing Values LHS\nIncoming Vol RHS\nOutgoing Vol RHS\n \n54 \n \nFigure 23: Payment System Initiatives 2018-2020 \n \n Source: RBZ (2021) \n6.20 All access points and devices recorded a positive growth during the period \nunder review except for ATMs. \n6.21 Over a thousand business continuity applications were processed as \ncompared to two hundred in 2019, representing more than 400% increase. \nThe increase was attributable to pressures brought about by sudden changes \nof operating circumstances in the Covid-19 pandemic environment. The \ncontingency measures put in place were able to smoothly facilitate the \nseamless processing of financial transactions without causing any \ninstability. \n6.22 The Bank will continue to facilitate business continuity for banks with \ntechnical challenges as part of its policy mandate to promote financial \nstability in the economy. \n6.23 The Bank continues to safeguard the integrity of the national payment \nsystems, by enforcing and supporting payment services providers in \ncomplying and upholding the best practice standards including anti-money \nlaundering and countering financing of terrorism (AML/CFT). \n \nE-Banking\nPlatform\nMobile Banking\nCard\nCrypto/Virtual\nSwitch/Payment\nsystem\nPOS\n2018\n3\n12\n6\n0\n2\n3\n2019\n3\n12\n6\n0\n2\n3\n2020\n4\n7\n6\n0\n4\n0\n0\n2\n4\n6\n8\n10\n12\n14\n2018\n2019\n2020\n \n55 \n \nRisk Matrix and Risk Management Systems \n6.24 The sound operation of payment systems is central to facilitating financial \ntransactions and supporting economic growth. The advance in technology \npresents an opportunity for payment system providers to develop innovative \nproducts and services. These technological advances, however, change the \nrisk landscape, particularly by increasing exposure to cyber and money-\nlaundering, and terrorism-financing risks. \n6.25 Below are key composite risk assessments for payment systems, which \narise from the combination of level of inherent risk and related risk \nmanagement systems. The level of inherent risk is ranked from low, \nmoderate to high and the risk management systems are ranked from strong, \nacceptable to weak. Payment systems have high inherent risk as shown by \nthe strike through on high inherent risk and strong risk management \nsystems (as shown by the strike through) to manage these risks leading to a \nmoderate composite risk (as shown by the strike through) as illustrated in \nTable 19 below. \nTable 19: Payment Systems Risk Management Assessment Matrix \n6.26 Overall payments systems have moderate composite risk which is in the \nstable direction leading to an overall composite risk assessment of a \nmoderate to high risk as shown in Table 20 below. \n \nCOMPOSITE RISK ASSESSMENT \nLEVEL OF INHERENT RISK \nLow \nModerate \nHigh \nRISK MANAGEMENT \nSYSTEMS \nStrong \nlow \nModerate \nModerate \nAcceptable \nModerate \nModerate to High \nHigh \nWeak \nModerate \nHigh \nHigh \n \n56 \n \nTable 20: Overall Payment Systems Risk Assessment Matrix \nOVERALL COMPOSITE RISK ASSESSMENT \nDIRECTION OF RISK \nDecreasing \nStable \nIncreasing \nCOMPOSITE RISK \nLow \nlow \nModerate \nModerate \nModerate \nModerate \nModerate to \nHigh \nModerate to High \nModerate to High \nModerate to \nHigh \nModerate to \nHigh \nHigh \nHigh \nHigh \nHigh \nHigh \n6.27 Overall payments systems have a moderate to high risk as shown in table \nwhen analysed by each type of risk as shown in the table below. \nTable 21: Payment Systems Risk Assessment by Risk Type \nType of Risk \nLevel \nof \nAggregate \nInherent Risk \nAdequacy of \nAggregate \nRisk \nMgt. \nSystems \nOverall \nComposite \nRisk \nDirection \nof \nOverall \nComposite Risk \nResidual \nComposite \nRisk \nSystemic \nModerate \nStrong \nModerate \nStable \nModerate to \nHigh \nCredit \nLow \nStrong \nLow \nStable \nModerate \nSettlement \nModerate \nStrong \nModerate \nStable \nModerate to \nHigh \nInterest \nLow \nStrong \nLow \nStable \nModerate \nMarket: \nForeign \nExchange \nLow \nStrong \nLow \nStable \nModerate \nLiquidity \nModerate \nStrong \nModerate \nIncreasing \nHigh \nOperational \nHigh \nStrong \nModerate \nStable \nModerate to \nHigh \nCyber crime \nHigh \nStrong \nModerate \nIncreasing \nHigh \nConfidentiality \nHigh \nStrong \nModerate \nStable \nModerate to \nHigh \nMoney \nLaundering and \nTerrorism \nFinance \nModerate \nStrong \nModerate \nStable \nModerate to \nHigh \nLegal & \nCompliance \nHigh \nStrong \nModerate \nStable \nModerate to \nHigh \nReputation \nHigh \nStrong \nModerate \nStable \nModerate to \nHigh \nStrategic \nHigh \nStrong \nModerate \nStable \nModerate to \nHigh \nAggregate \nHigh \nStrong \nModerate \nStable \nModerate to \nHigh \n \n57 \n \n6.28 The Bank will continue to monitor the resilience of the time critical and \nhigh value-risk payment systems in order to identify any emerging or \nspecific vulnerabilities that may affect the nature of financial stability risks \ngoing forward. \n \nHighlights on Specific Programs and Initiatives \na) Cyber Security \n \n6.29 Cybercrime is one of the risks targeting the financial sector which is \nexpected to increase in sophistication and frequency in view of the \nincreased leveraging on technology. \n6.30 The national payment systems have largely digitalised and have become a \nmajor target for fraudsters and cyber criminals. Evidence at hand indicate \nthat, a number of various security breaches have been reported such as \nransomware, card skimming, phishing and SQL (Structured Query \nLanguage) injection attacks. \n6.31 It is imperative for regulators to stay a step ahead and proactively formulate \nsafety-nets for financial system stability. In this regard, the Bank is \nincreasingly coordinating efforts to reinforce the financial cyber security \nlandscape to address the constantly evolving threats. To this end, the Bank \nhas issued a Cybersecurity Framework that outlines the minimum \nrequirements for participant banks and payment services providers to \nenhance cyber risk management.. \n6.32 Meanwhile, continuous guidance to the market is being issued through \nadvisory circulars and directives to the regulated entities. \n \n \n \n \n \n \n \n58 \n \nb) Migration to EMV Chip Technology \n \n6.33 EMV, (Europay, MasterCard and Visa) is a set of international standards \nthat defines interoperability of secure transactions across the international \npayments landscape. \n6.34 EMV has become one of the major stepping stones to the future of payments \ndue to its dynamic data authentication (Contactless, Mobile). \n6.35 To ensure uniformity in the card payment ecosystem, banks were required \nto implement the EMV measures that handle card-based payments, with \nless risk. \n6.36 The Bank will continue with efforts to ensure full EMV compliance of \npayment systems devices, access points and related infrastructure \nparticularly for cards which have been noted to be lagging. \n \nc) Swift Customer Security Programme and Related Activities \n6.37 The Reserve Bank continues to review SWIFT operations and engagements \non an ongoing basis to ensure robust and increased security of the SWIFT \narchitecture and the financial system at large. \n6.38 There were continuous engagements with SWIFT participants on the \nimplementation of SWIFT projects underway during the period under \nreview namely the Customer Security Program (CSP), Global Payment \nInitiative (GPI), ISO 20022 and Standard Release 2021. \n6.39 ISO 20022 is an international message standard for transmitting financial \ntransactions between financial institutions and businesses alike. The \nstandard helps to facilitate efficiency, increase security and interoperability \nin payment systems. \n6.40 A country subcommittee was established to provide guidance to the SWIFT \ncommunity on the migration to ISO20022 earmarked for implementation in \n2022. \n \n \n59 \n \nd) \nRegional and International Developments \n6.41 Zimbabwe is a member of the SADC Real Gross Settlement System \n(SADC-RTGS) and Common Market for Eastern and Southern Africa \nRegional Payment and Settlement Systems (COMESA-REPSS) which are \nprimarily intended to promote inter-regional trade. \n6.42 Zimbabwe, Zambia and South Africa are currently testing the retail \npayment streams which when implemented will further promote low value \npayments, mainly in the form of remittances given the intra-regional labour \nmigration. \n6.43 At the end of December 2020, Zimbabwe had 14 banks on the SADC-\nRTGS facilitating cross border payments. \n6.44 The regional payment platforms will promote the much required inter-\nregional trade and reduce transactional costs on payments going through \ninternational channels while managing the de-risking challenge. The \nexpected reduction in the flow of funds via illegal channels will positively \nimpact on financial stability. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n60 \n \n7. \nAML/CFT SURVEILLANCE INITIATIVES \n7.1 The domestic economy thrives when the financial services sector is safe and \nsound thereby providing the necessary conditions for smooth monetary \npolicy transmission and financial intermediation. The Financial Intelligence \nUnit (FIU) undertakes a range of oversight activities relating to anti-money \nlaundering, countering financing of terrorism and proliferation financing. \n7.2 AML/CFT risk in the context of assessment is composed of both threat and \nvulnerability. The following sections highlight the scenario for risk for \nAML selected sectors. \nSectoral Risk Assessment \na) \nMobile Money Service Providers \n7.3 Mobile Money Service Providers (MMP) operate in a technologically \nadvancing and dynamic sector. Against this background, AML/CFT/PF risk \nin the MMP sector of financial services industry is inherently high. \n7.4 MMP threat levels are considered to have dissipated towards the end of \n2020 because of enforcement activities instituted. On the downside, \nhowever, vulnerability of the sector remains high, giving an overall high \ninherent risk. \n7.5 The Reserve Bank is currently seized with the implementation of the risk \nbased supervision of payment services providers including mobile money \nproviders. \n7.6 At the same time, the Bank has progressively implemented a number of \nmeasures to strengthen the effectiveness of its AML/CFT regime and \naddressed related technical compliance deficiencies. \n7.7 During the period under review, the Bank in collaboration with the \nFinancial Intelligence Unit, adopted a principled stand against any \nviolations with a view to enhancing financial stability in the economy. \n \n61 \n \n7.8 A number of payment providers and mobile money agents were penalised \nfor abusing the payment channels. The Bank also directed the pruning of \nselected services and products that were being used as springboards for \nundesirable activities. \n7.9 The Bank is also increasingly conscious of the opportunities and threats \nbrought about by new innovations and technologies. To this end, staff of \npayment services providers were trained through joint efforts with the FIU \nin order to foster compliance culture. \n7.10 Going forward, the Bank will continuously apply the risk based approach \nholistically and where necessary take appropriate corrective measures to \nensure stability and integrity of the national payment system. \nb) \nMoney Value Transfer Agencies \n7.11 Amounts flowing through the official money value transfer channels \nshowed a positive increasing trend in 2020. \n7.12 The Money Value Transfer Agencies (MVTA) sector for the period under \nreview was deemed to be moderate to high risk, taking second place to \nMMP. There are indications that large amounts of illicit money transfers \nare taking place across borders away from official channels. Drivers to the \nillicit flows range from apparently benign causes such as transaction costs \nand culture to more malignant causes such as origin and purpose of funds. \n7.13 Given the implication of unrecorded flows to economic planning as well as \nthe implications for ML/TF that may arise from funds flowing underneath \nofficial controls, the sector requires focused attention to reign in deviant \nbehaviour. \n7.14 The FIU is continuing to work with other stakeholders on awareness raising \nfor participants in this sector. \n \n \n \n \n62 \n \nc) \nBanking Sector \n7.15 The Banking sector is rated medium in the period under review for \nAML/CFT/PF risk. \n7.16 There are varying levels of adoption of AML/CFT compliance and thus \nvulnerability and risk management profiles observed for different \ninstitutions in the sector. \n7.17 Overall, the Covid-19 pandemic created risk for the banking sector, \nparticularly due to the increased uptake of previously low risk rated \nproducts through digital on boarding processes. Whilst banks have been \neager to embrace the technology and remain afloat in the pandemic, their \ncompliance sections are generally lagging behind in AML/CFT compliance \nmonitoring in relation to the challenges that have arisen. This has created \nconsiderable vulnerability to digital and IT related fraud activities. \n7.18 It is anticipated that the risk-based approach for high risk products and \ninstitutions will go a long way in addressing the fragmented compliance \nthat exists within the banking sector. \n \nd) \n Insurance, Pensions and Securities \n7.19 These sectors remain low risk for AML/CFT. The major cause for low risk \nfor Insurance and Pensions is partly the low levels of activities in these \nsectors, whilst Securities assumed a higher level of risk in the period under \nreview given the increased activity in investment and broking that arose as \nan avenue to invest funds in the pandemic period. \n7.20 The Financial Intelligence Unit is working closely with IPEC and SECZ to \nmonitor these sectors for possible heightened risk exposure. \n \ne) \n Microfinance Institutions \n7.21 Microfinance institutions (MFIs) continue to be classified as low risk for \nAML/CFT/PF. \n \n63 \n \n7.22 However, the level of risk potentially increased in the period under review \nas a result of the closure of agent lines for illicit activities in the mobile \nfinancial services sector. Entry barriers into the sector are not sufficiently \nprohibitive compared to other sectors and the minimum AML/CFT/PF \nsupervisory activity may lure suspect funds and players into the sector. \n \nHigh Risk Classification by the FATF \n7.23 The Financial Action Task Force has continued to classify Zimbabwe as \na High-Risk jurisdiction due to the deficiencies in its AML/CFT regime and \nother variables including political and credit risk. As such, transactions \nfrom the country are subject to enhanced due diligence. The country has \nalso been grey-listed by the International Country Risk Guide (ICRG). \n7.24 An action plan to address the deficiencies has been agreed by the ICRG and \nthe Zimbabwean Authorities. During the period under review, the country \nwas in its second year of this plan of action. \nDe-risking \n7.25 De-risking practices by global financial institutions threaten to cut off \naccess to the global financial system for remittance companies and local \nbanks, putting them at risk of losing access to the global financial system. \n7.26 During the period under review it was noted that 9 financial institutions had \ntheir corresponding relationship restricted and 4 financial institutions had \ntheir corresponding relationship terminated due to either jurisdiction \nconcerns, regulatory concerns and/or respondent concerns. \n7.27 De-risking from correspondent banks has put pressure on banks to tighten \ntheir AML/CFT measures, in order to satisfy their correspondent partners \nof the robustness of their systems, to ensure they are not being used as \nconduits for laundering dirty money. \n \n64 \n \n7.28 This has led to closure of 71 bank accounts due to AML/CFT concerns and \n34 accounts due to correspondent bank conditions during the period under \nreview. \nFinancial Inclusion \n7.29 The FIU supports financial inclusion, as formal transactions by a banked \neconomy are less vulnerable to ML/TF/PF. Notable gains have been made \non the front of financial inclusion specifically with regards to KYC Lite \nproducts. \n7.30 The Financial Intelligence Unit continues to issue guidance in relation to \napproval of new products as well as facilitating related capacity building \ninitiatives. The FIU will also conduct ongoing due diligence and close \nmonitoring to proactively mitigate emerging risks. \nCrypto Assets and other Digital technologies \n7.31 Internationally from an AML/CFT/PF perspective, authorities are \nadvocating for licensing and supervision of emerging technologies for \nAML/CFT. \n7.32 The Bank has taken a proactive approach to ensure financial innovation \ndoes not destabilise the country’s financial system. A Fintech Unit was \nestablished with the main mandate of researching and monitoring Fintech \ndevelopments in the country. To foster responsible innovation, the Bank \nestablished a Regulatory Sandbox in March 2021, which provides a \nplatform for testing new financial innovations in a regulated environment \nbefore the technology is ushered to the market. \n7.33 The Bank is cautious about the potential impact of digital currencies, given \nthe sensitivities around currency issues. As such, the Bank will remain \nguided by international developments on Fintech issues as well as guidance \nfrom international and regional standard setting bodies. \n \n65 \n \n8. \nOUTLOOK \n8.1 The global economy is projected to recover in 2021. However, financial \nstability risks associated with the Covid-19 pandemic are likely to persist in \nlight of the uncertain path the pandemic will take across the world. From a \nglobal perspective, rising cyber risks, asset price increases and debt build-\nup from accommodative monetary policies effected in 2020 are some of the \nkey risks to financial stability. The wind-down of supportive fiscal and \nmonetary policy measures are also crucial factors that will determine the \neconomic recovery trajectory. \n8.2 Economic recovery in advanced economies due to the availability of the \nvaccine may result in tapering of money supply growth in pursuance of \ndisinflationary measures, with consequent increases in interest rates. \nShould average global interest rates increase this might impact the servicing \ncosts and availability of lines of credit. \n \nBanking Sector Stability \n8.3 A domestic economic rebound is expected on the back of the extensive \nCovid-19 vaccination campaign that is currently being undertaken by the \nGovernment of Zimbabwe. Industry is expected to reopen resulting in \nincreased economic activities which will spur growth across the different \nsectors of the economy. \n8.4 The ongoing inflationary neutral and monetary stabilization measures are \nexpected to go a long way in mitigating economic and social costs. Inherent \ncredit risk is likely to remain moderate in the short to medium term whilst \noperational risk may remain high due the adoption of digital financial \nservices and associated technological advancements. Notwithstanding, the \nbanking sector is expected to maintain its resilience in light of strong \nbalance sheets, capitalisation and profitability. \n \n66 \n \n \nFinancial Market Infrastructures \n8.5 The risk outlook for the payment system infrastructure shall continue to be \ndominated by the course and effects of the Covid-19 pandemic. It is \nexpected that the support measures implemented by the Government will \ncontinue to assist financial market infrastructures to function satisfactorily \nthrough the pandemic. \n8.6 Players are urged to continue to manage risks relating to governance, cyber \nsecurity, fraud, settlement, operation, compliance, money laundering and \nfinancing of terrorism among others. \n8.7 The Bank will continue to enhance the regulatory framework that embraces \nnew developments, capacity building through upskilling of staff, risk based \nmonitoring and supervision as well as collaboration with other supervisors. \n8.8 The Bank further encourages the adoption and positioning of new business \nmodels commensurate with the obtaining risk profile in the environment as \nmitigatory measures to the identified vulnerabilities and threats. \n \nInsurance and Pensions Industry \n8.9 Against the background of anticipated macroeconomic stability \ncharacterised by declining inflation, stable exchange rates, a successful \nvaccination programme, among other factors, the industry is anticipating a \nrebound of the economy. \n8.10 The industry also expects increases in occupancy rates as well as uptake of \nReal Estate Investment Trusts and an increase in listings and trades at the \nVictoria Falls Foreign Exchange, which have a bearing on the investment \nreturn and liquidity of the insurance and pensions industry. \n \n67 \n \n8.11 At regulatory and supervisory level, IPEC will be working with players in \nthe industry to address data integrity challenges, governance gaps and \ncompensation to policyholders and pension scheme members following \ncurrency reforms. \n8.12 Major risks requiring effective management include reputation, credit, \nliquidity, cyber, third party and operational risks. Some of the risks may be \nreduced if the Covid-19 pandemic is sufficiently contained at national level. \n \nSecurities Market Expectations \n8.13 The year under review saw the operationalization of the Reuters foreign \nexchange market tracker system which successfully stabilized the formal \nmarket prices and enhanced industry access to the foreign currency. \n8.14 SEC remains focused on sustainable regulatory policy framework for \npurposes of rebuilding confidence, promoting new listings as well as \nattracting investors onto the market. \n8.15 Key risk areas in the outlook period include the Covid-19 induced business \ndisruptions which affect the full operations of the Securities Market \nIntermediaries (SMIs) and listed entities. The players are expected to \ncontinue to invest in technology in a manner which mitigates operational \nrisks and promote profitability and going concern status. \n8.16 While domestic inflationary pressures have been receding there are some \nresidual threats to the capital markets. Inflation risk affects performance of \nlisted entities performance and negative returns may dampen the interest of \nforeign investors. \n8.17 For the rest of 2021, the industry expects the ongoing financial sector \nreforms to result in a sustainable foreign currency reserves position and \nsustained economic revival. \n \n68 \n \n8.18 The increasing dependence on technology in the capital markets has \nreactivated the risk of cyber-attacks on financial data and systems. While \nthere has been no incidence of data leaks locally, in the short term, these \nattacks will continue to pose a threat to financial institutions. \n8.19 The Commission remains vigilant in its AML risk monitoring to ensure \nrevenue generated from illegal activities do not find its way to the capital \nmarkets and/or be used for mergers and acquisitions. \n8.20 The rejuvenation of VFEX is expected to be a game changer in the medium \nto long term. The authorities shall endeavour to expand the listed entities \non the Exchange to promote portfolio building and management. \n \nDeposit \nProtection \nSystem \n \n8.21 From a financial safety net perspective, the financial sector has remained \nstable and resilient, despite its vulnerability to various risks. \n8.22 The corporation expects to continue to build its capacity to reduce the scope \nof funding risk which is considered to be high. Risk mitigation initiatives \ninclude (a) actuarial determination of optimal premium rate and risk-based \npremium rate system; (b) investment income diversification; and engaging \nwith stakeholders with a view to protect FCA deposits. \n \n \n \n \n \n \n \n \n69 \n \nAppendices \n \nAppendix 1: Macroeconomic Indicators for Zimbabwe \n \n2015 \n2016 \n2017 \n2018 \n2019 \n2020 (Est) \nREAL SECTOR \n \n \n \n \n \n \nReal GDP at 2012 Market prices (US$' m) \n18,188.30 \n18,325.80 \n19,187.80 \n20,234.56 \n19,024.30 \n18,236.22 \nNominal GDP at Market (US$'m up to 2016) \n19,963.10 \n20,548.70 \n22,434.60 \n36,921.29 \n161,977.15 \n1,070,640.29 \nGDP at Market Prices % changes \n1.8 \n0.8 \n4.8 \n5.5 \n-6 \n-4.1 \nGDP per capita \n1,304.50 \n1,284.90 \n1,316.40 \n1,189.84 \n933.64 \n1,159.81 \n \n \n \n \n \n \n \nPRICES \n \n \n \n \n \n \nMonth-on-Month (end period) % \n-0.11 \n0.06 \n0.53 \n9.03 \n16.6 \n4.2 \nAnnual Inflation (end period) % \n-2.5 \n-0.93 \n3.46 \n42.1 \n521.2 \n348.6 \nAnnual Inflation (period average) % \n-2.41 \n-1.56 \n0.9 \n10.6 \n173.3 \n654.9 \n \n \n \n \n \n \n \nEXTERNAL SECTOR \n \n \n \n \n \n \nTrade Balance (US$m) \n-2113.5 \n-1262.6 \n-950.8 \n-2464 \n-131.4 \n53.9 \nCurrent a/c balance (US$m) \n-1596.6 \n-697.4 \n-295 \n-1379.63 \n10235.65 \n67560.85 \nCurrent a/c balance (% of GDP) \n-8.00% \n-3.40% \n-1.30% \n-3.70% \n6.30% \n6.30% \n \n \n \n \n \n \n \nMONETARY SECTOR* \n \n \n \n \n \n \nBroad Money M3 (ZW$ '000) \n4,765,422 \n6,200,282 \n7,817,279 \n10,009,905 \n350,180,000 \n202,724,000 \nDomestic Credit (ZW$ '000) \n5,535,396 \n8,451,438 \n10,697,156 \n14,982,345 \n27,820,000 \n139,267,000 \nCredit to Private Sector (ZW$ '000) \n3,830,132 \n3,495,107 \n3,719,426 \n4,058,651 \n11,113,000 \n121,390,000 \nCredit to Parastatals (ZW$ '000) \n140,910 \n356,235 \n591,301 \n737,587 \n988,381.20 \n- \nCredit to Government ( net )(ZW$ '000) \n1,564,355 \n4,466,829 \n6,277,468 \n9,992,337 \n14,063,000 \n14,241,000 \nNominal Minimum Lending Rate (%) \n6 \n4 \n4.5 \n4 \n5 \n6 \nNominal Maximum Lending Rate (%) \n16 \n18 \n18 \n18 \n65 \n65 \n \n \n \n \n \n \n \nSTOCK MARKET INDICES \n \n \n \n \n \n \nIndustrial Index (Points) \n114.9 \n134.8 \n333 \n487.13 \n766.34 \n2636.34 \nMining Index (Points) \n23.7 \n60.9 \n142.4 \n227.71 \n316.66 \n4134.09 \nGrand Market Capitalisation (US$m) \n3,073.40 \n3,763.90 \n9,580.60 \n19,189.50 \n27,977.00 \n317,879.31 \n \n \n \n \n \n \n \nPUBLIC FINANCES \n \n \n \n \n \n \nRevenue excluding grants \n3,737.10 \n3,502.20 \n3,950.20 \n5,533.00 \n22,971.00 \n173,496.00 \nRevenue including grants \n3,737.10 \n3,502.20 \n4,375.90 \n5,533.00 \n22,971.00 \n173,496.00 \nCapital expenditure and net lending \n252 \n387.2 \n1,530.00 \n3,087.90 \n2,194.30 \n57,742.00 \nRecurrent Expenditure \n3,348.00 \n3,807.80 \n4,515.00 \n5,197.00 \n13,823.00 \n120,754.00 \nTotal expenditure and net lending \n3,923.60 \n4,705.50 \n6,045.00 \n5,743.00 \n7,765.00 \n65,655.00 \nBalance excluding grants \n-186.5 \n-1,203.30 \n-2,094.80 \n-210.00 \n15,206.00 \n107,841.00 \nBalance including grants \n-186.5 \n-1,203.30 \n-1,669.10 \n-210.00 \n15,206.00 \n107,841.00 \nPOPULATION (millions) \n13.9 \n14.3 \n14.6 \n14.9 \n14.4 \n14.9 \n \n \n70 \n \nAppendix 2: Selected Banking Sector Indicators, 2016 – 2020 \n \n \n2016 \n2017 \n2018 \n2019 \n2020 \nCapital Adequacy Ratio \n24.55% 27.64% \n28.22% 33.41% 34.62% \nNonperforming Loans Ratio \n7.88% \n7.05% \n6.92% \n1.75% \n0.31% \nLarge Exposures to Capital \n93.03% 94.78% \n97.60% 35.47% 32.61% \nReturn on Equity \n13.36% 15.50% \n26.28% 58.77% 45.54% \nReturn on Assets \n2.49% \n2.61% \n4.57% \n8.99% 13.55% \nPrudential Liquidity Ratio \n97.07% 98.58% 100.97% 98.31% 73.06%", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Financial_Stability_Reports/Financial-Stability-Report-2020.pdf"}
{"doc_id": "0f1e3ae0843bbc45055f4534a72922af", "text": "Vol. 27 No. 28 \n \n \nWeek Ending \n11th July 2025 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n8. \nTOBACCO SALES ................................................................. 8 \n \n \n \n \n1 \n1. OVERVIEW \nThis report offers an overview of key developments in the domestic monetary and financial sectors of the \neconomy for the week ending 11 July 2025. It includes updates on the money and capital markets, national \npayment systems, exchange rates, international commodity prices and tobacco marketing developments. \nDuring the week ending 11th July 2025 local currency deposit rates increased for all tenors. The foreign \ncurrency minimum deposits rates for 3 months, 6 months, 12 months, and over one-year declined, save for \nsavings rates which remained unchanged during the same week. However, maximum deposit rates for 1 \nmonth, 3 months, 12-month, and over one-year all increased \nMeanwhile, local currency lending rates increased. Foreign currency minimum lending rates for corporate \nclients declined while for individual clients remained the same. Maximum lending rates for both individual \nand corporate clients increased. \nDuring the same week, both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange \n(VFEX) exhibited bearish sentiments. The ZSE and VFEX All Share indices lost 0.60% and 1.25% to close \nat 195.90 points and 107.33 points, respectively. \nThe value of aggregate transactions processed through the National Payment Systems platforms decreased by \n12.89%, to ZiG36.26 billion from ZiG 41.63 billion recorded in the previous week. This decline was mainly \ndue to a fall in both transaction values and volumes of key platforms including POS, RTGS, ATMs, mobile \nbanking, mobile money, and ZIPIT mobile. \nDuring the week ending 11th July 2025, the Zimbabwe Gold (ZiG) marginally appreciated by 0.33% against \nthe US dollar on the interbank market, to ZiG26.87 per US$1, from ZiG26.96 per US$1 in the previous week \nThe average prices for most international commodities declined over the week, with the exception of \npalladium, which recorded an increase. Palladium prices strengthened on account of persistent disruptions in \nglobal supply, mainly from key producers (Russia and South Africa) which continue to face geopolitical \nuncertainties and limited spare capacity. \nGold prices fell amid easing geopolitical risks, particularly following the ceasefire announced between Isreal \nand Iran. Platinum prices also declined, largely driven by a stronger U.S. dollar. Lithium prices dropped amid \nconcerns of oversupply from major producers, particularly Chile, Mali, Argentina, and Australia, which \nincreased output, contributing to the market glut. \nAs of the 89th day of the 2025 tobacco selling season, a total of 341.84 million kilograms were sold, a 51.27% \nincrease from 225.98 million kilograms sold during the same period in 2024. Sales rose by 46.97% to US$1.14 \nbillion during the period under review, from US$0.78 billion recorded during the same period in 2024. During \nthe reporting period, the average price of the golden leaf was US$3.34 per kg, compared to US$3.43 per kg \nrealised in the same period in 2024. \n \n \n \n2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n20 June 2025 \n27 June 2025 \n04 July 2025 \n11 July 2025 \nSavings \n \n \n \n \nMinimum \n3.81 \n3.81 \n3.81 \n3.94 \nMaximum \n4.14 \n4.14 \n4.14 \n4.28 \n1-month deposit \n \n \n \n \nMinimum \n5.66 \n5.66 \n5.66 \n5.79 \nMaximum \n8.77 \n8.77 \n8.77 \n9.24 \n3-months deposit \n \n \n \n \nMinimum \n5.95 \n5.95 \n5.95 \n6.07 \nMaximum \n9.21 \n9.21 \n9.21 \n10.01 \n6-months deposit \n \n \n \n \nMinimum \n5.56 \n5.56 \n5.56 \n5.67 \nMaximum \n8.23 \n8.23 \n8.23 \n9.03 \n12-months deposit \n \n \n \n \nMinimum \n5.57 \n5.57 \n5.57 \n5.68 \nMaximum \n8.24 \n8.24 \n8.24 \n9.04 \nOver 1 year \n \n \n \n \nMinimum \n5.58 \n5.58 \n5.58 \n5.69 \nMaximum \n8.25 \n8.25 \n8.25 \n9.06 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n20 June 2025 \n27 June 2025 \n04 July 2025 \n11 July 2025 \nSavings \n \n \n \n \nMinimum \n1.67 \n1.67 \n1.67 \n1.67 \nMaximum \n1.86 \n1.86 \n1.86 \n1.86 \n1-month deposit \n \n \n \n \nMinimum \n3.72 \n3.72 \n3.72 \n3.78 \nMaximum \n5.72 \n5.75 \n5.75 \n6.11 \n3-month deposit \n \n \n \n \nMinimum \n4.38 \n4.38 \n4.38 \n4.32 \nMaximum \n6.70 \n6.53 \n6.53 \n6.92 \n6-month deposit \n \n \n \n \nMinimum \n4.18 \n4.18 \n4.18 \n4.12 \nMaximum \n6.71 \n6.82 \n6.82 \n6.60 \n12-Month deposit \n \n \n \n \nMinimum \n4.25 \n4.25 \n4.25 \n4.19 \nMaximum \n6.44 \n6.44 \n6.44 \n6.78 \nOver 1 year \n \n \n \n \nMinimum \n4.36 \n4.36 \n4.36 \n4.31 \nMaximum \n6.61 \n6.61 \n6.61 \n6.94 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n \n3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n20 June 2025 \n27 June 2025 \n04 July 2025 \n11 July 2025 \nIndividuals \n \n \n \n \nMinimum \n42.34 \n42.28 \n42.25 \n42.34 \nMaximum \n48.06 \n48.03 \n48.01 \n48.08 \nCorporates \n \n \n \n \nMinimum \n40.51 \n40.58 \n40.53 \n40.52 \nMaximum \n46.77 \n46.87 \n46.65 \n46.80 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n20 June 2025 \n27 June 2025 \n04 July 2025 \n11 July 2025 \nIndividuals \n \n \n \n \nMinimum \n13.33 \n13.35 \n13.43 \n13.43 \nMaximum \n17.48 \n17.49 \n17.52 \n17.61 \nCorporates \n \n \n \n \nMinimum \n10.31 \n10.26 \n10.26 \n10.29 \nMaximum \n15.86 \n15.86 \n15.84 \n15.81 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending rates \n20 June 2025 \n27 June 2025 \n04 July 2025 \n11 July 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n22.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n3. EQUITY MARKETS \n \n \nZSE Indicators \n \n \nAll \nShare \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG \nbillion) \nMarket \nTurnover \n(ZiG \nmillion) \nVolume of \nShares \n(million) \n20-June-25 \n193.05 \n189.67 \n192.91 \n228.09 \n100.00 \n145.40 \n59.66 \n91.49 \n43.14 \n27-June-25 \n196.05 \n193.01 \n196.61 \n230.14 \n100.12 \n145.40 \n60.58 \n148.89 \n25.54 \n04-July-25 \n197.09 \n196.34 \n196.58 \n237.76 \n100.11 \n145.40 \n60.68 \n60.64 \n89.22 \n11-July-25 \n195.90 \n189.72 \n195.35 \n241.85 \n100.11 \n145.40 \n60.64 \n71.12 \n19.85 \nWeekly \nChange (%) \n(0.60) \n(3.37) \n(0.63) \n1.72 \n0.00 \n0.00 \n(0.07) \n17.28 \n(77.75) \nSource: Zimbabwe Stock Exchange, 2025 \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n20-Jun-25 \n106.13 \n1.24 \n0.98 \n3.88 \n27-Jun-25 \n106.92 \n1.25 \n4.41 \n10.79 \n04-July-25 \n108.69 \n1.27 \n0.70 \n4.50 \n11-July-25 \n107.33 \n1.25 \n0.94 \n3.51 \nWeekly Change (%) \n(1.25) \n(1.57) \n 34.29 \n(22.00) \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n \n \n \n4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n \n0\n50 000\n100 000\n150 000\n200 000\n250 000\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\nZiG Thousands\nZSE Market Turnover \nNotable\ntrade\ndeals:\n97.69\nmillion\nEconet\nWireless\nZimbabwe Limited shares,3.11\nmillion OK Zimbabwe Limited\nshares,\n3.06\nmillion\nshares\nexchanged hands at ZiG297.45\ncents/share,ZiG35.90cents/shar\ne and ZiG12.53 cents/share,\nrespectively\n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n95\n100\n105\n110\n115\n120\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\nIndex\nVFEX All Share Index \n0\n200\n400\n600\n800\n1000\n1200\n1400\n1600\n1800\n2000\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\nUS$ Thousand\nVFEX Market Turnover \n1,1\n1,15\n1,2\n1,25\n1,3\n1,35\n1,4\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\nUS$ Billion\nVFEX Market Capitalisation \n40\n45\n50\n55\n60\n65\n70\n75\n80\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\n02-May-25\n09-May-25\n16-May-25\n23-May-25\n30-May-25\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\nZiG Billion\nZSE Market Capitalisation \n \n \n5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n20 June 2025 \n27 June 2025 \n04-July 2025 \n11 July 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.50 \n1.50 \n1.55 \n1.55 \nPetrol Blend E5/ litre \n1.54 \n1.54 \n1.56 \n1.56 \nLP Gas / kg \n1.59 \n1.59 \n1.57 \n1.57 \n \n \n \n \n \nInternational Energy \nPrices (Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n75.79 \n67.14 \n67.55 \n69.34 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n07-July-25 \n3,331.90 \n2.74 \n3.02 \n0.1018 \n0.1125 \n08-July-25 \n3,315.35 \n2.72 \n3.01 \n0.1013 \n0.1119 \n09-July-25 \n3,314.75 \n2.72 \n3.01 \n0.1012 \n0.1119 \n10-July-25 \n3,300.15 \n2.71 \n2.99 \n0.1008 \n0.1114 \n11-July-25 \n3,312.60 \n2.72 \n3.00 \n0.1012 \n0.1118 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n04 July 2025 \nWEEK ENDING \n11 July 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n29,021,421,673.04 \n26,220,502,738.99 \n (9.65) \nOf which ZiG \n9,182,928,180.57 \n9,883,962,407.15 \n7.63 \nOf which US$ transactions \n(ZiG Equivalent) \n19,838,493,492.47 \n16,336,540,331.84 \n(17.65) \nPOS \n3,776,217,338.52 \n2,945,438,192.10 \n(22.00) \nATM \n3,088,366,649.28 \n2,242,270,403.49 \n(27.40) \nMOBILE BANKING \n348,912,975.16 \n308,586,012.46 \n(11.56) \nMOBILE MONEY \n4,975,575,781.14 \n4,203,165,814.25 \n(15.52) \nZIPIT MOBILE \n418,276,477.21 \n344,781,491.16 \n(17.57) \nTOTAL \n41,628,770,894.36 \n36,264,744,652.45 \n(12.89) \n \nVOLUMES \n \nRTGS \n233.719 \n161,372 \n(30.95) \nOf which ZiG \n99,098 \n64,768 \n(34.64) \nOf which US$ \n134.621 \n96,604 \n (28.24) \nPOS \n2,672,899 \n2,013,566 \n(24.67) \nATM \n371,308 \n256,006 \n(31.05) \nMOBILE BANKING \n403,692 \n381,665 \n (5.46) \nMOBILE MONEY \n12,877,522 \n12,063,366 \n (6.32) \nZIPIT MOBILE \n372,903 \n315,446 \n (15.41) \nTOTAL \n16,932,043 \n15,191,421 \n (10.28) \n \n \n6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n7-July-25 \n8-July-25 \n9-July-25 \n10-July-25 \n11-July-25 \n1.00Oz \n \n \n \n \n \nUS$ \n3,498.50 \n3,481.12 \n3,480.49 \n3,465.16 \n3,478.23 \nZiG \n94,048.99 \n93,599.94 \n93,592.05 \n93,025.96 \n93,353.61 \n0.50Oz \n \n \n \n \n \nUS$ \n1,749.25 \n1,740.56 \n1,740.24 \n1,732.58 \n1,739.12 \nZiG \n47,024.50 \n46,799.97 \n46,796.02 \n46,512.98 \n46,676.80 \n0.25Oz \n \n \n \n \n \nUS$ \n874.62 \n870.28 \n870.12 \n866.29 \n869.56 \nZiG \n23,512.25 \n23,399.98 \n23,398.01 \n23,256.49 \n23,338.40 \n0.10Oz \n \n \n \n \n \nUS$ \n349.85 \n348.11 \n348.05 \n346.52 \n347.82 \nZiG \n9,404.90 \n9,359.99 \n9,359.20 \n9,302.60 \n9,335.36 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(30 Jun - 4 July) \n26.9392 \n1.5272 \n36.9252 \n2.0287 \n31.7280 \n7-July \n26.8827 \n1.5168 \n36.5982 \n2.0298 \n31.6289 \n8-July \n26.8879 \n1.5092 \n36.6430 \n2.0154 \n31.5570 \n9-July \n26.8905 \n1.5122 \n36.5443 \n2.0143 \n31.5050 \n10-July \n26.8461 \n1.5076 \n36.5350 \n2.0041 \n31.5160 \n11-July \n26.8394 \n1.5110 \n36.4037 \n2.0119 \n31.3565 \nWeekly Average \n(7 July – 11 July) \n26.8693 \n1.5114 \n36.5448 \n2.0151 \n31.5127 \nAppr (-)/Depr (+) (%) of the \nZWG \n(0.26) \n(1.03) \n(1.03) \n(0.67) \n(0.68) \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(30 June –4 July) \n3,341.50 \n1,376.60 \n1,137.70 \n15,292.80 \n8,196.00 \n7-July \n3,334.67 \n1,376.50 \n1,126.00 \n15,177.00 \n8,140.00 \n8-July \n3,288.79 \n1,353.00 \n1,123.00 \n15,042.00 \n8,110.00 \n9-July \n3,320.69 \n1,353.00 \n1,117.00 \n14,979.00 \n8,070.00 \n10-July \n3,332.78 \n1,358.00 \n1,157.00 \n15,290.00 \n8,030.00 \n11-July \n3,358.00 \n1,393.00 \n1,229.00 \n15,198.00 \n8,020.00 \nWeekly Average \n(7 July – 11 July) \n3,326.99 \n1,366.70 \n1,150.40 \n15,137.20 \n8,074.00 \nWeekly change (%) \n(0.43) \n(0.72) \n1.12 \n(1.02) \n(1.49) \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n7 \n \nFigure 3: Weekly International Commodity Price Developments (25th April 2025– 11th July 2025) \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n0,00\n200,00\n400,00\n600,00\n800,00\n1000,00\n1200,00\n1400,00\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\nUS$/oz\nPalladium\n14200,00\n14400,00\n14600,00\n14800,00\n15000,00\n15200,00\n15400,00\n15600,00\n15800,00\n16000,00\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\nUS$/tonne\nNickel\n2 900\n3 150\n3 400\n3 650\n3 900\n25-Apr\n02-May\n09-May\n16-May\n23-May\n30-May\n06-Jun\n13-Jun\n20-Jun\n27-Jun\n04-Jul\n11-Jul\nUS$/oz\nGold\n50\n55\n60\n65\n70\n75\n80\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\nUS$/barrel\nCrude oil \n880\n930\n980\n1 030\n1 080\n1 130\n1 180\n1 230\n1 280\n1 330\n1 380\n1 430\n1 480\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\nUS$/tonne\nPlatinum\n8 000\n8 300\n8 600\n8 900\n9 200\n9 500\n9 800\n10 100\n25-Apr\n2-May\n9-May\n16-May\n23-May\n30-May\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\nUS$/tonne\nLithium \n \n \n8 \n8. TOBACCO SALES \n \nWeekly Cumulative Tobacco Sales: Day 89 (11th July 2025) \n \n2025 \n2024 \nVariance (%) \nCumulative Quantity Sold (Kgs) \n341,844,697 \n225,982,046 \n51.27 \nAverage Price (US$/kg) \n3.34 \n3.43 \n(2.62) \nCumulative value (US$) \n1,140,707,478 \n766,144,144 \n48.89 \nSource: Tobacco Industry and Marketing Board (TIMB), 2025 \n \n \n \nRESERVE BANK OF ZIMBABWE \nJULY 2025", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_11_July_2025_Volume_27_Number_28.pdf"}
{"doc_id": "2cec9f1e4292eaf63088d5a39f442843", "text": "Vol. 27 No. 35 \n \nWeek Ending \n29th August 2025 \n \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 2 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n8. \nTOBACCO SALES ................................................................. 8 \n \n \n \n \n1 \n1. OVERVIEW \nThis report outlines key trends in monetary and financial indicators for the week ending 29th August 2025. It \ncovers developments in domestic money and capital markets, national payment systems, exchange rates, \ninternational commodity prices and the tobacco market. \nDuring the week under review, local currency deposit rates decreased for all tenors. Conversely, foreign \ncurrency deposit rates registered decreases across all maturities. The lending rates for both individual and \ncorporate clients in local currency, however, increased, while foreign currency lending rates increased across \nall client categories during the same week. \nThe Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) sustained their upward \nmomentum, marking a second consecutive week of positive performance. As such, the ZSE and VFEX All \nshare indices added 1.74% and 3.15% to close at 208.72 points and 126.77 points, respectively. \nThe total value of transactions processed through the National Payment Systems platforms increased by \n35.13%, from ZiG30.03 billion reported in the previous week to ZiG40.58 billion, during the week under \nanalysis. This was largely attributable to the increase in values of transactions processed through RTGS, POS, \nATM, Mobile money and ZPIT mobile. The volume of transactions processed also increased by 10.69%, from \n13.83 million in the prior week to 15.31 million during the week under review. \nThe interbank market saw the average ZIG/USD exchange rate appreciate by 0.02% from ZiG26.76 per dollar \nrecorded in the previous week to ZiG26.75 per dollar, during the week ending 29th August 2025, \nInternational average prices for gold, platinum, nickel and lithium firmed during the week ending 29th August \n2025. Prices for palladium, however, retreated during the same week, despite the supply constraints on the \nglobal market. \nGold prices increased mainly due to heightened expectations that the U.S. Federal Reserve would implement \ninterest rate cuts in its upcoming September 2025 meeting. Platinum prices rose amid the ongoing supply \nconstraints in major platinum-producing regions. Supply disruptions in China, particularly the suspension of \noperations at CATL's Jianxiawo mine led to a surge in lithium prices. Similarly, nickel prices increased due \nto concerns about potential supply disruptions from Indonesia, the world's largest nickel producer \nTotal tobacco sales rose by 53.12% to 354.80 million kilograms as of the 122nd day of the 2025 tobacco selling \nseason, from 231.71 million kilograms sold during the same period in 2024. Concomitantly, sales revenues \nincreased by 48.43% to US$1.18 billion during the period under analysis, from US$0.79 billion realised during \nthe same period in 2024. The average price, however, decreased to US$3.32 per kg, from US$3.43 per kg \nrecorded in the comparable period in 2024. \n \n \n \n \n \n \n2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n08 August 2025 \n15 August 2025 \n22 August 2025 \n29 August \nSavings \n \n \n \n \nMinimum \n3.75 \n3.75 \n3.91 \n3.75 \nMaximum \n4.08 \n4.08 \n4.03 \n3.86 \n1-month deposit \n \n \n \n \nMinimum \n6.63 \n6.63 \n7.46 \n6.63 \nMaximum \n10.49 \n10.49 \n11.52 \n10.38 \n3-months deposit \n \n \n \n \nMinimum \n6.90 \n6.90 \n7.73 \n6.90 \nMaximum \n10.68 \n10.68 \n11.65 \n10.48 \n6-months deposit \n \n \n \n \nMinimum \n6.51 \n6.51 \n7.34 \n6.51 \nMaximum \n10.28 \n10.28 \n11.26 \n10.01 \n12-months deposit \n \n \n \n \nMinimum \n6.52 \n6.52 \n7.35 \n6.52 \nMaximum \n10.99 \n10.99 \n12.66 \n10.71 \nOver 1 year \n \n \n \n \nMinimum \n6.53 \n6.53 \n7.36 \n6.53 \nMaximum \n11.00 \n11.00 \n12.67 \n10.72 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n08 August 2025 \n15 August 2025 \n22 August 2025 \n29 August \nSavings \n \n \n \n \nMinimum \n1.61 \n1.61 \n1.75 \n1.61 \nMaximum \n1.81 \n1.81 \n1.84 \n1.69 \n1-month deposit \n \n \n \n \nMinimum \n3.92 \n3.92 \n4.08 \n3.92 \nMaximum \n6.59 \n6.59 \n6.93 \n6.51 \n3-month deposit \n \n \n \n \nMinimum \n4.46 \n4.46 \n4.52 \n4.46 \nMaximum \n7.45 \n7.45 \n7.78 \n7.35 \n6-month deposit \n \n \n \n \nMinimum \n4.26 \n4.26 \n4.83 \n4.26 \nMaximum \n7.57 \n7.57 \n7.75 \n7.35 \n12-Month deposit \n \n \n \n \nMinimum \n4.56 \n4.56 \n4.83 \n4.56 \nMaximum \n7.47 \n7.47 \n7.75 \n7.14 \nOver 1 year \n \n \n \n \nMinimum \n4.67 \n4.67 \n4.89 \n4.67 \nMaximum \n7.64 \n7.64 \n7.92 \n7.36 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n08 August 2025 \n15 August 2025 \n22 August 2025 \n29 August \nIndividuals \n \n \n \n \nMinimum \n43.05 \n43.05 \n43.22 \n43.33 \nMaximum \n48.84 \n48.84 \n48.90 \n48.96 \nCorporates \n \n \n \n \nMinimum \n40.36 \n40.36 \n40.36 \n40.39 \nMaximum \n46.23 \n46.23 \n46.20 \n46.34 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n08 August 2025 \n15 August 2025 \n22 August 2025 \n29 August \nIndividuals \n \n \n \n \nMinimum \n13.49 \n13.49 \n13.52 \n13.54 \nMaximum \n17.58 \n17.58 \n17.55 \n17.58 \nCorporates \n \n \n \n \nMinimum \n10.36 \n10.36 \n10.36 \n10.47 \nMaximum \n15.81 \n15.81 \n15.83 \n15.88 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending \nrates \n08 August 2025 \n15 August 2025 \n22 August 2025 \n29 August \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n18.00 \n18.00 \n18.00 \n18.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n3. EQUITY MARKETS \n \nZSE Indicators \n \n \nAll Share \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG billion) \nMarket \nTurnover \n(ZiG million) \nVolume of \nShares \n(million) \n08-Aug-25 \n203.32 \n199.20 \n203.84 \n238.62 \n100.12 \n145.31 \n63.70 \n60.76 \n236.80 \n15-Aug-25 \n200.84 \n196.22 \n200.89 \n238.18 \n100.12 \n145.31 \n62.94 \n58.84 \n10.624 \n22-Aug-25 \n205.16 \n201.33 \n205.06 \n239.29 \n100.12 \n145.31 \n64.29 \n161.76 \n39.28 \n29-Aug-25 \n208.72 \n205.89 \n209.73 \n238.92 \n100.11 \n145.31 \n65.35 \n371.96 \n78.10 \nWeekly \nChange (%) \n1.74 \n2.26 \n2.28 \n(0.15) \n(0.01) \n0.00 \n1.65 \n129.95 \n98.83 \nSource: Zimbabwe Stock Exchange, 2025 \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n08-Aug-25 \n122.87 \n1.43 \n0.65 \n2.21 \n15-Aug-25 \n122.76 \n1.43 \n0.37 \n1.90 \n22-Aug-25 \n122.90 \n1.43 \n1.32 \n5.01 \n29-Aug-25 \n126.77 \n1.48 \n1.24 \n3.56 \nWeekly Change (%) \n3.15 \n3.50 \n(6,06) \n(28.94) \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n \n \n \n \n4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n \n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n40\n45\n50\n55\n60\n65\n70\n75\n80\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\nZiG Billion\nZSE Market Capitalisation \n100\n105\n110\n115\n120\n125\n130\n135\n140\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\nIndex\nVFEX All Share Index \n0\n200\n400\n600\n800\n1000\n1200\n1400\n1600\n1800\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\nUS$ Thousand\nVFEX Market Turnover \n1,2\n1,25\n1,3\n1,35\n1,4\n1,45\n1,5\n1,55\n1,6\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\nUS$ Billion\nVFEX Market Capitalisation \n0\n50 000\n100 000\n150 000\n200 000\n250 000\n300 000\n06-Jun-25\n13-Jun-25\n20-Jun-25\n27-Jun-25\n04-Jul-25\n11-Jul-25\n18-Jul-25\n25-Jul-25\n01-Aug-25\n08-Aug-25\n15-Aug-25\n22-Aug-25\n29-Aug-25\nZiG Thousands\nZSE Market Turnover \n \n \n5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n08-Aug 2025 \n15-Aug 2025 \n22-Aug 2025 \n29-Aug 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.55 \n1.55 \n1.55 \n1.55 \nPetrol Blend E5/ litre \n1.56 \n1.55 \n1.55 \n1.55 \nLP Gas / kg \n1.57 \n1.51 \n1.51 \n1.51 \n \n \n \n \n \nInternational Energy \nPrices (Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n67.34 \n66.01 \n66.56 \n67.21 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n25-Aug-25 \n3,334.25 \n2.73 \n3.01 \n0.1018 \n0.1126 \n26-Aug-25 \n3,334.25 \n2.73 \n3.01 \n0.1018 \n0.1126 \n27-Aug-25 \n3,367.10 \n2.75 \n3.04 \n0.1028 \n0.1137 \n28-Aug-25 \n3,376.35 \n2.76 \n3.05 \n0.1031 \n0.1140 \n29-Aug-25 \n3,407.65 \n2.78 \n3.08 \n0.1041 \n0.1150 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n22 Aug 2025 \nWEEK ENDING \n29 August 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n23,709,639,049.56 \n32,645,901,636.64 \n37.69 \nOf which ZiG \n6,607,334,531.76 \n10,401,322,547.83 \n57.42 \nOf which US$ transactions \n(ZiG Equivalent) \n17,102,304,517.80 \n \n22,244,579,089.81 \n \n30.07 \nPOS \n1,648,908,901.44 \n2,416,568,906.80 \n46.56 \nATM \n1,238,041,639.10 \n1,985,760,973.98 \n60.40 \nMOBILE BANKING \n235,204,263.00 \n223,174,240.00 \n(5.11) \nMOBILE MONEY \n3,002,452,015.64 \n3,063,534,858.80 \n2.03 \nZIPIT MOBILE \n198,359,004.52 \n248,786,310.95 \n25.42 \nTOTAL \n30,032,604,873.25 \n40,583,726,927.17 \n35.13 \n \nVOLUMES \n \nRTGS \n171,657 \n316,408 \n84.33 \nOf which ZiG \n62,258 \n135,108 \n117.01 \nOf which US$ \n109,399 \n 181,300 \n65.72 \nPOS \n1,436,909 \n1,828,657 \n27.26 \nATM \n162,202 \n249,263 \n53.67 \nMOBILE BANKING \n277,805 \n318,481 \n14.64 \nMOBILE MONEY \n11,591,825 \n12,354,491 \n6.58 \nZIPIT MOBILE \n193,719 \n245,452 \n26.71 \nTOTAL \n13,834,117 \n15,312,752 \n10.69 \n \n \n6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n25-Aug-25 \n26-Aug-25 \n27-Aug-25 \n28-Aug-25 \n29-Aug-25 \n1.00Oz \n \n \n \n \n \nUS$ \n3,500.96 \n3,500.96 \n3,535.46 \n3,545.17 \n3,578.03 \nZiG \n93,694.08 \n93,716.25 \n94,556.10 \n94,832.36 \n95,729.56 \n0.50Oz \n \n \n \n \n \nUS$ \n1,750.48 \n1,750.48 \n1,767.73 \n1,772.58 \n1,789.02 \nZiG \n46,847.04 \n46,858.13 \n47,278.05 \n47,416.18 \n47,864.78 \n0.25Oz \n \n \n \n \n \nUS$ \n875.24 \n875.24 \n883.86 \n886.29 \n894.51 \nZiG \n23,423.52 \n23,429.06 \n23,639.02 \n23,708.09 \n23,932.39 \n0.10Oz \n \n \n \n \n \nUS$ \n350.10 \n350.10 \n353.55 \n354.52 \n357.80 \nZiG \n9,369.41 \n9,371.63 \n9,455.61 \n9,483.24 \n9,572.96 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(18 Aug – 22 Aug) \n26.7602 \n1.5132 \n36.0719 \n1.8795 \n31.1711 \n25-Aug \n26.7624 \n1.5314 \n36.1521 \n1.8847 \n31.3160 \n26-Aug \n26.7687 \n1.5193 \n36.0214 \n1.8852 \n31.1333 \n27-Aug \n26.7451 \n1.5149 \n35.9762 \n1.8835 \n31.0725 \n28-Aug \n26.7498 \n1.5129 \n36.1242 \n1.8512 \n31.1367 \n29-Aug \n26.7548 \n1.5090 \n36.1084 \n1.8585 \n31.2015 \nWeekly Average \n(25 Aug – 29 Aug) \n26,7561 \n1.5175 \n36.0764 \n1.8726 \n31.1720 \nAppr (-)/Depr (+) (%) of the \nZWG \n(0.02) \n0.28 \n0,01 \n(0.37) \n0.003 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(18 Aug – 22 Aug) \n3,338.70 \n \n1,340.60 \n1,125.20 \n15,038.80 \n8,620.00 \n25-Aug \n3,375.00 \n1,343.00 \n1,105.00 \n15,100.00 \n8,740.00 \n26-Aug \n3,379.20 \n1,357.00 \n1,109.00 \n15,285.00 \n8,740.00 \n27-Aug \n3,392.40 \n1,353.00 \n1,107.00 \n15,131.00 \n8,880.00 \n28-Aug \n3,411.50 \n1,357.00 \n1,112.00 \n15,263.00 \n9,020.00 \n29-Aug \n3,477.00 \n1,385.00 \n1,132.00 \n15,421.00 \n9,176.00 \nWeekly Average \n(25Aug – 29 Aug) \n3,407.02 \n1,359.00 \n1,113.00 \n15,240.00 \n8,911.20 \nWeekly change (%) \n2.05 \n1.37 \n(1.08) \n1.34 \n3.38 \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n7 \nFigure 3: Weekly International Commodity Price Developments (6th June 2025– 29th August 2025) \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n400,00\n600,00\n800,00\n1000,00\n1200,00\n1400,00\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\nUS$/oz\nPalladium\n980\n1 080\n1 180\n1 280\n1 380\n1 480\n1 580\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\nUS$/tonne\nPlatinum\n7 500\n7 800\n8 100\n8 400\n8 700\n9 000\n9 300\n9 600\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\nUS$/tonne\nLithium \n14 400\n14 600\n14 800\n15 000\n15 200\n15 400\n15 600\n15 800\n16 000\n16 200\n16 400\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\nUS$/tonne\nNickel\n50\n55\n60\n65\n70\n75\n80\n6-Jun\n13-Jun\n20-Jun\n27-Jun\n4-Jul\n11-Jul\n18-Jul\n25-Jul\n1-Aug\n8-Aug\n15-Aug\n22-Aug\n29-Aug\nUS$/barrel\nCrude oil \n2 900\n3 150\n3 400\n3 650\n3 900\n06-Jun\n13-Jun\n20-Jun\n27-Jun\n04-Jul\n11-Jul\n18-Jul\n25-Jul\n01-Aug\n08-Aug\n15-Aug\n22-Aug\n29-Aug\nUS$/oz\nGold\n \n \n8 \n8. TOBACCO SALES \n \nWeekly Cumulative Tobacco Sales: Day 122 (29th August 2025) \n \n2025 \n2024 \nVariance (%) \nCumulative Quantity Sold (Kgs) \n 354,802,138 \n231,709,675 \n53.12 \nAverage Price (US$/kg) \n 3.32 \n 3.43 \n(3.21) \nCumulative value (US$) \n1,178,183,226 \n793,774,288 \n48.43 \nSource: Tobacco Industry and Marketing Board (TIMB), 2025 \n \n \n \nRESERVE BANK OF ZIMBABWE \nAUGUST 2025", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_29_August_2025_Volume_27_Number_35_2.pdf"}
{"doc_id": "2acfe75e092df2ec8f33b01bafde2458", "text": "QUARTERLY \nECONOMIC \nREVIEW \n \n \n \n \n \nRESERVE BANK OF ZIMBABWE \n \n \n2 \nCONTENTS \nFOREWORD .................................................................................................................................. 5 \nEXECUTIVE SUMMARY ............................................................................................................ 7 \n1. \nGLOBAL ECONOMIC DEVELOPMENTS .......................................................................... 7 \n2. \nDOMESTIC ECONOMY...................................................................................................... 14 \n3. \nREAL SECTOR DEVELOPMENTS .................................................................................... 16 \n4. \nINFLATION DEVELOPMENTS ......................................................................................... 24 \n5. \nPUBLIC FINANCES ............................................................................................................ 27 \n6. \nEXTERNAL SECTOR DEVELOPMENTS ......................................................................... 31 \n7. \nMONETARY DEVELOPMENTS ........................................................................................ 34 \n8. \nPAYMENT, CLEARING AND SETTLEMENT ACTIVITIES .......................................... 41 \n9. \nSTOCK MARKET DEVELOPMENTS ............................................................................... 48 \nSTATISTICAL TABLES \n \n \n \n \n3 \nList of Figures \nFigure 1: Global Economic Growth (%) ....................................................................................... 10 \nFigure 2: Gold and Platinum Prices (US$/oz) .............................................................................. 12 \nFigure 3: Nickel and Copper Prices .............................................................................................. 13 \nFigure 4: Crude Oil Prices (US$/barrel) ....................................................................................... 14 \nFigure 5: Economic Growth (%)................................................................................................... 16 \nFigure 6: First Quarter Mineral Production (2009 to 2014) ......................................................... 21 \nFigure 7: Capacity Utilization in the Manufacturing Sector (%) .................................................. 22 \nFigure 8: Annual Inflation Profile (%).......................................................................................... 24 \nFigure 9: Rand/US Dollar Exchange rate ..................................................................................... 25 \nFigure 10: Quarterly Annualized Inflation Profile (%)................................................................. 25 \nFigure 11: Selected SADC Countries’ Inflation Rates (%) .......................................................... 26 \nFigure 12: Selected SADC Countries’ Inflation Rates (%) .......................................................... 27 \nFigure 13: Monthly Revenue (Actual vs Target) .......................................................................... 28 \nFigure 14: Revenue Structure as at 30th June 2014 ....................................................................... 29 \nFigure 15: Government Expenditure for the First Half 2014 ....................................................... 30 \nFigure 16: External Trade: January-June 2014 (US$ Millions) .................................................... 31 \nFigure 17: Current, Capital and Overall Balance (US$ Billions) ................................................. 33 \nFigure 18: External Payment Arrears (US$ Billion)..................................................................... 34 \nFigure 19: Annual Broad Money Growth Rate and Level ............................................................ 35 \nFigure 20: Structure and Level of Domestic Credit ...................................................................... 36 \nFigure 21: Evolution of Non-Performing Loans ........................................................................... 38 \nFigure 22: Growth in Credit to the Private Sector ........................................................................ 40 \nFigure 23: Volumes and Values of RTGS Transactions. .............................................................. 43 \nFigure 24: SWIFT Quarterly Foreign Currency Transactions ...................................................... 44 \nFigure 25: Volumes of Retail Transactions .................................................................................. 45 \nFigure 26: Values of Retail Transactions...................................................................................... 45 \nFigure 27: Number of Access Points ............................................................................................ 47 \nFigure 28: Number of Access Devices ......................................................................................... 48 \nFigure 29: Zimbabwe Stock Exchange Indices ............................................................................ 49 \n \n \n4 \nList of Tables \nTable 1: International Commodity Prices 2014 .......................................................................................... 11 \nTable 2: Zimbabwe: Gross Domestic Product - Real Growth Rates.......................................................... 17 \nTable 3: Annual Growth (%) in Selected Agriculture Sub Sectors............................................................. 18 \nTable 4: Mineral Production: First Quarter 2014 ........................................................................................ 20 \nTable 5: Capacity Utilisation for Selected Manufacturing Sub-Sectors ..................................................... 22 \nTable 6 : Retrenchment Statistics................................................................................................................ 23 \nTable 7: Companies under Judicial Management & Liquidation ............................................................... 23 \nTable 9: Comparison of Revenue Collections for the First Half of 2013 and 2014 ................................... 29 \nTable 10: Loan Disbursements (as at 31 December 2013) ......................................................................... 33 \nTable 11: Transactional activities ............................................................................................................... 42 \nTable 12: Payment Systems Access Points ................................................................................................. 46 \n \n5 \nFOREWORD \n \nIn response to requests by stakeholders and also in line with practices in Central Banks the world \nover, Reserve Bank of Zimbabwe (RBZ) is resuming the publication of a Quarterly Economic \nReview. The RBZ is pleased to resume this important Publication, which will provide a quarterly \ndimension to the existing Weekly and Monthly reports, as well as the Annual Report. It is \nanticipated that, from time to time, the Bank shall be including research and other feature papers \nin the Review, so as to steer debate, and share information with interested stakeholders among the \nreadership. \nThis Publication is, however, being launched against the backdrop of a number of macroeconomic \nand social challenges, including liquidity constraints, company closures and retrenchments, being \nsymptomatic of major underlying difficulties of both structural and institutional nature in the \neconomy. Since the adoption of the multiple currency framework in 2009, the early gains of the \nnascent recovery witnessed in 2009 to 2012, have been slowly reversed. Economic growth has \nslowed down significantly from an average of 10.5% over the period 2009 to 2012, to an estimated \n4.5% in 2013 and is projected to decline further to around 3.1% in 2014. \nGovernment is, however, taking bold steps to arrest further economic decline and has set a \nrecovery tone through the introduction and implementation of the Zimbabwe Agenda for \nSustainable Socio-Economic Transformation (ZimAsset). ZimAsset, which has adopted a cluster \napproach to economic development, is underpinned by specific measures to revive the economy \nthrough ensuring food security and nutrition; social services and poverty eradication; resuscitation \nof infrastructure and utilities; and value addition and beneficiation. There is, therefore, need for all \nstakeholders and indeed the whole nation, to rally behind this economic blueprint, to ensure \nsuccess of the implementation and realization of its key objectives. The RBZ adopted as its \nstrategic foundation, a “Back to Basics” approach. This strategy implies that the operations of the \nBank are consistent with the role of Central Banking. \n \n \n6 \nWithin our “back to basics” philosophy, the Central Bank fully supports Government efforts to \nrevive the economy, and will continue to aggressively play a facilitative and advisory \nresponsibilities. \nThis Review covers macroeconomic developments and performance of the economy, over the first \nhalf of 2014, highlighting major underlying economic and social challenges that need urgent \nredress, in order to get the economy back on track. \n \nDR. J. P. MANGUDYA \nGOVERNOR \n \n7 \nEXECUTIVE SUMMARY \n \nGlobal economic growth is projected to increase from 3% in 2013 to 3.6% in 2014, spurred by \nrecovery in advanced and developing economies. In advanced economies, economic growth is \nexpected to increase on the back of moderated effects of fiscal consolidation, improved labor \nmarket conditions and supportive monetary conditions. In emerging markets and developing \neconomies, growth is projected to pick up gradually, supported by stronger external demand from \nadvanced economies. \n \nThe domestic economy continues to face a number of challenges, including persistent liquidity \nshortages; declining production and output levels across key sectors of the economy; low foreign \ndirect investments (FDI) and external lines of credit; widening current account deficit; limited \nfiscal space; and energy shortfalls. In addition, the business operating environment remains \ndifficult, particularly in view of the negative perceptions around the interpretation and \nimplementation of the indigenization and economic empowerment regulations. The negative \nperceptions have also adversely affected the country’s Ease of Doing Business Index rating. \n \nConsumer price developments indicate that inflation was in negative territory for the months of \nFebruary, March, April, May and June 2014. Deflationary pressures have, however, been \ndissipating since April 2014. Annual headline inflation stood at -0.08% in June 2014, gaining \n0.11% on the May 2014 rate of -0.19%. The marginal rise in inflation experienced during the \nsecond quarter of the year, if sustained over a period of time, could result in the economy moving \nout of deflation. \n \nFiscal performance remained under considerable pressure, exacerbated by the general slowdown \nin economic activity and inherent liquidity shortages. Monthly revenues for the period January to \nJune 2014 fell short of targets, with non-discretionary expenditures increasing. \n \nBroad money growth continued to show signs of weakening, reflecting the general slowdown in \nthe economy, as well as the difficult balance of payments situation. In tandem with the declining \ngrowth in broad money supply, credit to the private sector declined, reflecting the slowdown in \n \n8 \nlending by banks due to liquidity constraints and the increase in non-performing loans. The ratio \nof non-performing loans to total credit in the banking sector increased to 18.49% in June 2014, \nfrom 14.51% in June 2013. \n \nAs at end of June 2014, lending rates ranged between 6% and 35%, with most banks quoting rates \naround 20% per annum. The level of interest rates quoted by banks, in large part, reflected \nindividual banks’ liquidity positions and their cost of funds. \n \nOn the Zimbabwe Stock Exchange, the industrial index increased by 5.8%, from 176.32 points in \nMarch 2014 to 186.57 points in June 2014, largely on the back of news that the Government would \nbe reviewing the indigenization and economic empowerment policy. The mining index also firmed \nto 61.32 points in June 2014, from 29.51 points in March 2014, representing a 107.8% increase. \n \nThe country’s external sector position remained difficult, on account a growing import dependence \nagainst subdued export performance. The continued closure of some companies, declining \nindustrial capacity utilization, and loss of competitiveness have combined to further widen supply \ngaps in the economy and resulted in increased demand for imports. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9 \n1. GLOBAL ECONOMIC DEVELOPMENTS \n \nAccording to the IMF World Economic Output report of April 2014, global economic growth is \nprojected to increase from 3% in 2013 to 3.6% in 2014, spurred by recovery in advanced and \ndeveloping economies. The adverse effects of a severe winter in the U.S. and the Euro-Area in the \nfirst quarter of 2014, coupled with financial market volatility and political instability in Russia and \nUkraine, however, weighed down global economic activity during the first half of 2014. \nIn advanced economies, economic growth is expected to increase from 1.3% in 2013 to 2.2% in \n2014, on the back of moderated effects of fiscal consolidation, improved labour market conditions \nand supportive monetary conditions. Growth will be strongest in the United States, where it is \nprojected at 2.8 % for 2014, compared to 1.9% in 2013. There were concerns earlier in the year \nthat tapering of the stimulus package by the US Fed would weigh down on growth. The US \ngovernment highlighted that economic recovery was well entrenched and there was no need for further \nsupport in the form of quantitative easing. The tapering policy, however, would largely depend on how \nthe economy will respond to the policy in order to prevent the economy from sliding back. \nIn the Euro area, a growth of 1.7% is projected for 2014, compared to 0.5% in 2013. This growth \nis, however, unevenly distributed across the economies in the region. This is largely because \neconomic activity is expected to remain stronger in the core economies of Europe but weaker in \nperiphery countries, on the back of high debt and financial fragmentation which are adversely \naffecting growth and domestic demand. Monetary easing, however, is required to sustain economic \nactivity in the Euro area in order to achieve the European Central Bank’s price stability objective, \nby lowering risks of even lower inflation or outright deflation. \nIn emerging markets and developing economies, growth is projected to pick up gradually, from \n4.7% in 2013 to 5% in 2014, supported by stronger external demand from advanced economies. \nNonetheless, tight financial conditions are expected to dampen domestic demand and moderate \neconomic growth prospects. In China, growth is projected to remain at 7.5% in 2014, as authorities \nseek to ensure a gradual transition to a more balanced and sustainable growth path. Overall, \nfinancial conditions have tightened further in some emerging market economies, resulting in an \nincrease in the cost of capital. This is expected to further dampen investment and weigh down on \ngrowth. \n \n10 \nIn Sub-Saharan Africa, growth is expected to increase modestly from 4.9% in 2013 to 5% in 2014, \nunderpinned by commodity-related projects. Many African countries have succeeded in \nmaintaining strong growth, partly due to improved macroeconomic policies. \nIn the SADC region, growth is projected to remain at about 5% supported by favourable \ncommodity price developments. The South African economy, however, was hampered by a 5 \nmonth strike in the platinum sector which dragged mining down for the second consecutive period \nin 2014. \nWith regards to macroeconomic convergence progress, most counties are well within the SADC \ntarget of 3-7% in terms of inflation. Most countries have also managed to maintain a budget deficit \nwithin the target of 3% as a ratio of GDP. The majority of the countries, however, are yet to attain \nthe SADC debt to GDP ratio maximum threshold of 60%. \nFigure 1 below shows the growth patterns and projected growth in different regions of the world. \nFigure 1: Global Economic Growth (%) \nSource: World Economic Outlook \n \n \n-4\n-2\n0\n2\n4\n6\n8\n2009\n2010\n2011\n2012\n2013\n2014\n2015\nWorld\nAdvanced Economies\nUSA\nEmerging Markets and Developing Economies\nSub-Saharan Africa\n \n11 \nCommodity Price Developments \nMost commodity prices have been firming up since January 2014, on the back of geo-political \ntensions in Russia, Ukraine and Iraq (see Table 1 below). \nThough firm, the generally subdued international commodity prices continue to suppress export \nvalues for Zimbabwe’s commodities, compounded by production challenges that have severely \nlimited export volumes. \n \nTable 1: International Commodity Prices 2014 \n2014 \nGold \nPlatinum \nCopper \nNickel \nCrude Oil \nUS$/oz \nUS$/oz \nUS$/tonne \nUS$/tonne \nUS$/barrel \nJanuary \n1,241.82 \n1,420.43 \n7,294.77 \n14,096.36 \n107.44 \nFebruary \n1,299.83 \n1,409.51 \n7,149.38 \n14,158.50 \n108.69 \nMarch \n1,336.71 \n1,451.11 \n6,668.90 \n15,673.10 \n107.79 \nApril \n1,298.80 \n1,431.40 \n6,665.78 \n17,346.10 \n107.99 \nMay \n1,289.06 \n1,451.79 \n6,880.58 \n19,396.25 \n109.20 \nJune \n1,278.49 \n1,452.60 \n6,797.20 \n18,575.83 \n111.77 \nSource: BBC and KITCO \n \nPrecious Metals \nPrecious metal prices remained firm during the first half of 2014 (see Figure 2 below). Gold prices \nincreased by 7.64% between January and early March 2014, but receded in late March as the U.S. \nlong-term interest rates fell and geopolitical risks intensified in Ukraine and Russia. Platinum \nprices firmed from US$1 420.43/oz in January to US$1 452.60/oz in June 2014, on the back of \nsupply side concerns precipitated by labour disputes in South African, the world’s largest platinum \nproducer. \n \n12 \nFigure 2: Gold and Platinum Prices (US$/oz) \n \nSource: BBC, KITCO \n \nBase Metals \nBase metal prices were broadly subdued due to concerns over weaker demand from China. \nGenerally, base metal prices are strongly influenced by economic conditions as they are largely \nused as industrial inputs in manufacturing, construction and infrastructure projects. Reflecting this \ndevelopment, copper prices retreated by 6.8%, from US$7 294.77/tonne in January 2014 to US$6 \n797.20/tonne in June 2014 (see Figure 3 below). \n \nNickel prices, however, posted substantial gains following Indonesia’s export ban on unprocessed \nore, as well as the fear of export disruptions in Russia. The prices rose from US$14 096.36/tonne \nin January 2014 to US$18 575.83/tonne in June 2014 (see Figure 3 below). \n \n500\n700\n900\n1100\n1300\n1500\n1700\n1900\n2100\n2-Jan-09\n16-Feb-09\n31-Mar-09\n18-May-09\n1-Jul-09\n13-Aug-09\n25-Sep\n9-Nov-09\n22-Dec-09\n5-Feb-10\n22-Mar-10\n7-May-10\n21-Jun-10\n3-Aug-10\n17-Sep-10\n1-Nov-10\n14-Dec-10\n31-Jan-11\n15-Mar-11\n3-May-11\n16-Jun-11\n29-Jul-11\n14-Sep-11\n27-Oct-11\n9-Dec-11\n27-Jan-12\n12-Mar-12\n29-Apr-12\n13-Jun-12\n26-Jul-12\n11-Sep-12\n24-Oct-12\n6-Dec-12\n24-Jan-13\n8-Mar-13\n24-Apr-13\n7-Jun-13\n22-Jul-13\n5-Sep-13\n18-Oct-13\n2-Dec-13\nGold\nPlatinum\n \n13 \nFigure 3: Nickel and Copper Prices \n0\n5000\n10000\n15000\n20000\n25000\n30000\n35000\n2-Jan-09\n5-Mar-09\n11-May-09\n13-Jul-09\n11-Sep-09\n12-Nov-09\n15-Jan-10\n18-Mar-10\n24-May-10\n23-Jul-10\n27-Sep-10\n26-Nov-10\n1-Feb-11\n4-Apr-11\n10-Jun-11\n15-Aug-11\n14-Oct-11\n15-Dec-11\n21-Feb-12\n28-Apr-12\n29-Jun-12\n3-Sep-12\n2-Nov-12\n9-Jan-13\n12-Mar-13\n16-May-13\n17-Jul-13\n19-Sep-13\n20-Nov-13\nNickel\n0\n2000\n4000\n6000\n8000\n10000\n12000\n2-Jan-09\n17-Feb-09\n2-Apr-09\n21-May-09\n7-Jul-09\n20-Aug-09\n5-Oct-09\n18-Nov-09\n5-Jan-10\n18-Feb-10\n7-Apr-10\n24-May-10\n7-Jul-10\n24-Aug-10\n7-Oct-10\n22-Nov-10\n10-Jan-10\n23-Feb-11\n8-Apr-11\n31-May-11\n14-Jul-11\n31-Aug-11\n14-Oct-11\n29-Nov-11\n18-Jan-12\n2-Mar-12\n20-Apr-12\n7-Jun-12\n23-Jul-12\n7-Sep-12\n23-Oct-12\n6-Dec-12\n25-Jan-13\n12-Mar-13\n29-Apr-13\n13-Jun-13\n29-Jul-13\n13-Sep-13\n29-Oct-13\n12-Dec-13\nCopper\n \nSource: BBC, KITCO \n \nOil Prices \nCrude oil prices rose by 4% from US$107.44/barrel in January 2014 to US$11.77/barrel in June \n2014, amid geopolitical tensions in Ukraine and numerous supply outages in Libya and Iraq. Oil \nprices reached their 6-month high in June 2014, as instability in Iraq intensified. \n \n14 \nFigure 4: Crude Oil Prices (US$/barrel) \nSource: BBC and KITCO \n2. DOMESTIC ECONOMY \nThe domestic economy continues to face a number of challenges, including persistent liquidity \nshortages; declining production and output levels across key sectors of the economy; low foreign \ndirect investments (FDI) and external lines of credit; widening current account deficit; limited \nfiscal space; and energy shortfalls. These challenges are, however, reflective of underlying \nstructural rigidities and bottlenecks in the economy, such as rapidly deteriorating infrastructure; \nexternal debt overhang; growing informalisation of the economy; perceived country risk and lack \nof confidence in the economy. \nThe aforementioned challenges continue to weigh down efforts geared at reviving the economy, \nwhich is already exhibiting weak and distress signals, particularly in the manufacturing sector. The \nchallenges may also prevent the domestic economy from benefiting from the positive spin-offs \nfrom the anticipated growth in the world economy in 2014 and in the medium to long term. \nThe lack of adequate long term financing for retooling and working capital purposes continues to \nseverely undermine the growth of the economy. This mainly reflects the low levels of FDI, coupled \n0\n20\n40\n60\n80\n100\n120\n140\n2-Jan-09\n13-Feb-09\n27-Mar-09\n13-May-09\n25-Jun-09\n6-Aug-09\n17-Sep-09\n29-Oct-09\n10-Dec-09\n25-Jan-10\n8-Mar-10\n22-Apr-10\n3-Jun-10\n15-Jul-10\n30-Aug-10\n11-Oct-10\n22-Nov-10\n6-Jan-10\n17-Feb-11\n31-Mar-11\n18-May-11\n30-Jun-11\n15-Aug-11\n26-Sep-11\n7-Nov-11\n19-Dec-11\n3-Feb-12\n16-Mar-12\n3-May-12\n15-Jun-12\n27-Jul-12\n11-Sep-12\n23-Oct-12\n4-Dec-12\n21-Jan-13\n4-Mar-13\n17-Apr-13\n30-May-13\n11-Jul-13\n26-Aug-13\n7-Oct-13\n18-Nov-13\n \n15 \nwith declining external lines of credit. As a result, capacity utilization levels in the manufacturing \nsector declined from 45% in 2010 to below 40% in 2013. \nIn addition, the business operating environment remains difficult, particularly in view of the \nnegative perceptions around the interpretation and implementation of the indigenization and \neconomic empowerment regulations. The negative perceptions have also adversely affected the \ncountry’s Ease of Doing Business Index rating. According to the World Bank Ease of Doing \nBusiness Index, Zimbabwe ranked 170 in 2014, from 168 in 2013. The Ease of Doing Business \nIndex ranks economies from 1 to 185, with first place being the best. A high ranking (a low \nnumerical rank) means that the regulatory environment is conducive to business operation. The \nranking does not, however, measure all aspects of the business environment though it provides an \noverview of the business environment in an economy. \nFiscal performance remains under considerable pressure, exacerbated by the general slowdown in \neconomic activity and inherent liquidity shortages. Monthly revenues for the period January to \nJune 2014 fell short of targets, with non-discretionary expenditures increasing. Consequently, a \nwider fiscal deficit is now anticipated for 2014. \nOn the monetary front, broad money growth continued to show signs of weakening, reflecting the \ngeneral slowdown in the economy, as well as the difficult balance of payments situation. These \nfactors have combined to worsen the liquidity crunch, with an adverse impact on economic \nactivity. Since the last quarter of 2013, there has been a general slowdown in lending by banks due \nto liquidity constraints, as well as an increase in non-performing loans. \nAgainst this background, inflation was in negative territory for five months during the first and \nsecond quarters of 2014, as a result of a combination of factors, which include depressed domestic \naggregate demand, tight liquidity conditions, a softer South African rand and higher international \noil and food prices. Deflationary pressures have, however, been dissipating since April 2014. \nTo arrest the economic slowdown and set the path for recovery, Government has adopted the \nZimbabwe Agenda for Sustainable Social-Economic Transformation (ZIM ASSET), whose \nimplementation has taken a cluster approach and enables Government to prioritise the \nimplementation of programmes and projects. The successful implementation of ZIM ASSET, \n \n16 \nanchored on exploitation of the country’s abundant human and natural resources, is expected to \nresult in sustainable development and social equity. \n \n3. REAL SECTOR DEVELOPMENTS \n \nReal GDP \nReal economic growth is estimated to have slowed down to 4.5% in 2013, from 10.6% in 2012, \nwith developments in the first half of 2014 pointing to a further slackening in economic activity to \nresult in an economic growth of around 3% in 2014. In the outlook period, downside risks remain \nhigh mainly due to low international commodity prices; increasing fiscal pressures against \ndeclining revenues; low foreign direct investment; shortage of liquidity; and low aggregate \ndemand. \nFigure 5: Economic Growth (%) \n \nSource: Zimstat \n \nReal GDP growth in 2013 was largely driven by mining (11.7%); finance and insurance (11.3%); \ntransport and communication (7%); and distribution, hotels and restaurants (3.9%). \n \n \n \n \n0\n2\n4\n6\n8\n10\n12\n14\n2009\n2010\n2011\n2012\n2013\n2014\n \n17 \nTable 2: Zimbabwe: Gross Domestic Product - Real Growth Rates \n(Annual percent change) \nItems \nWeights \n2009 \n2010 \n2011 \n2012 \n2013 \n(2009=100) \nActual \nActual \nActual \nEst. \nEst. \nAgriculture, hunting \nand fishing \n12.7 \n37.6 \n7.2 \n1.4 \n7.8 \n-2.6 \nMining and \nquarrying \n6.9 \n18.9 \n37.4 \n24.4 \n8.0 \n11.7 \nManufacturing \n13.1 \n17.0 \n2.0 \n13.8 \n5.3 \n-0.6 \nElectricity and \nwater \n3.4 \n1.9 \n19.5 \n6.4 \n0.3 \n5.0 \nConstruction \n1.7 \n2.1 \n14.1 \n65.1 \n23.5 \n3.9 \nFinance and \ninsurance \n7.0 \n4.5 \n8.3 \n8.3 \n28.0 \n11.3 \nReal estate \n1.4 \n2.0 \n4.9 \n48.9 \n59.0 \n0.7 \nDistribution, hotels \nand restaurants \n14.8 \n6.5 \n8.8 \n4.3 \n4.3 \n3.9 \nTransport and \ncommunication \n13.2 \n2.2 \n4.7 \n0.0 \n6.7 \n7.0 \nPublic \nadministration \n2.3 \n2.0 \n30.3 \n19.6 \n19.1 \n3.4 \nEducation \n2.6 \n2.8 \n37.0 \n63.9 \n38.1 \n2.9 \nHealth \n1.1 \n3.2 \n15.7 \n7.7 \n7.7 \n0.5 \nDomestic services \n0.4 \n2.2 \n10.0 \n1.0 \n-3.5 \n6.0 \nOther services \n4.2 \n2.3 \n14.7 \n11.3 \n-10.7 \n-4.7 \nLess Imputed bank \nservice charges \n-0.3 \n4.5 \n32.9 \n38.7 \n9.8 \n11.3 \nGDP at factor \ncost \n84.5 \n5.4 \n11.4 \n11.9 \n10.6 \n3.8 \nNet other taxes \non production \n1.4 \n5.4 \n11.4 \n11.9 \n10.6 \n6.0 \nGDP at basic \nprices \n85.8 \n5.4 \n11.4 \n11.9 \n10.6 \n3.8 \nNet taxes on \nproducts \n14.2 \n5.4 \n11.4 \n11.9 \n10.6 \n8.4 \nNet indirect taxes \n15.5 \n5.4 \n11.4 \n11.9 \n10.6 \n8.2 \nGDP at market \nprices \n100.0 \n5.4 \n11.4 \n11.9 \n10.6 \n4.5 \n Source: Zimstat \n \n18 \nAgriculture \nAgriculture output is estimated to have registered a negative growth of 2.6% in 2013, on account \nof reduced maize, cotton, wheat, sugar cane and dairy output. This followed an unfavourable \nagricultural season. \nTable 3: Annual Growth (%) in Selected Agriculture Sub Sectors \n \n2010 \n2011 \n2012 \n2013 Est \nTobacco (flue cured) \n110.58 \n7.70 \n8.73 \n15.29 \nMaize \n7.10 \n9.34 \n-33.33 \n-17.50 \nBeef \n2.15 \n-1.05 \n0.11 \n1.60 \nCotton \n27.96 \n-7.41 \n40.00 \n-59.14 \nSugar \n16.87 \n9.77 \n20.24 \n-11.63 \nHorticulture \n22.86 \n4.65 \n13.33 \n7.84 \nPoultry \n7.14 \n44.44 \n34.86 \n14.88 \nGroundnuts \n-13.89 \n24.19 \n-48.05 \n-27.71 \nWheat \n-13.54 \n27.95 \n-36.62 \n-26.76 \nDairy (m lt) \n4.44 \n7.23 \n6.67 \n-2.38 \nCoffee \n-3.85 \n8.00 \n-29.63 \n-21.05 \nSoybeans \n-39.13 \n20.00 \n-16.07 \n9.12 \nTea \n15.38 \n66.67 \n-2.00 \n0.00 \nPaprika \n33.33 \n-12.50 \n14.29 \n12.50 \n Source: Zimstat \n \nThe country, however, experienced a relatively favourable 2013/2014 agriculture season, which is \nexpected to result in a projected 23.8% increase in agricultural output. The increase in tobacco \noutput mainly reflected the success of the production and marketing arrangements in the sector, \nparticularly contract farming. \n \n \n \n \n19 \n \nMining \nThe mining industry, which has been the main driver of economic growth since the introduction \nof multicurrency system, has shown signs of a slowdown, largely due to depressed, international \nmineral prices. The performance of the sector in the first half of 2014 shows that the output of \nplatinum and palladium were depressed, compared to the corresponding period in 2013. \nContract Farming \nThe term contract farming involves agricultural production being carried out on the \nbasis of an arrangement where a farmer and firm, usually agro-processor, engage in \na forward agreement of production and marketing of the produce. \n \nThe terms of the contract vary and usually specify how much produce the contractor \nwill buy and at what price. The contractor often provides credit, inputs and technical \nadvice. The contractor is guaranteed of supply at a pre-determined price, while the \nfarmer is assured of a market for his output at a pre-determined return. Contracting \nis, therefore, a way of allocating benefits and risks between producer and contractor; \nthe farmer takes the risk of production while the contractor takes the risk of \nmarketing. \n \nThe basis of contract farming, therefore, is the commitment of the farmer to provide \na specific commodity in quantities and at quality standards as determined by the \npurchaser and the commitment of the company to support the farmer’s production \nand to purchase the commodity. \n \nContract farming arrangements thus require a long-term commitment from both \nparties to be successful. When efficiently organized and managed, contract farming \nreduces risk and uncertainty for both parties as compared to buying and selling crops \non the open market. \n \n20 \nGold production, however, registered a marginal growth, increasing to 3 337kgs during the first \nquarter of 2014, from 3 266kgs in the same period in 2013. The designation of Fidelity Printers \nand Refiners (FPR) as the sole buyer of gold in the country, coupled with the downward revision \nof royalties from 7% to 3% for small gold producers, is likely to reduce smuggling and lead to an \nimprovement in recorded gold output for 2014. Coal output continues to benefit from increased \nproduction at Makomo Resources. The ramping up of nickel production at Bindura Nickel \nCorporation (BNC) is also expected to spur nickel output in 2014 (See Table 4). \nTable 4: Mineral Production: First Quarter 2014 \n \nMineral \nDec-13 \nJan-14 \nFeb-14 \nMar-14 \nCumulative \n1st Quarter \n2014 \nChrome \\Kt \n42 857.0 \n28 207 \n36 794 \n39 839.0 \n104 840.0 \nCoal \\Kt \n525 178.0 \n525 060 \n513 597 \nn/a \n1 038 657.0 \nCobalt \\t \n27.88 \n24.6 \n33.0 \n29.8 \n87.3 \nCopper \\t \n620.9 \n698.1 \n689.3 \n641.0 \n2 028.4 \nGold \\kg \n1 150.7 \n1 109.0 \n1 059.5 \n1 168.8 \n3 337.3 \nNickel \\t \n1 235.4 \n1 559.0 \n1 557.1 \n1 098.1 \n4 214.2 \nPaladium \\kg \n892.2 \n809.0 \n832.4 \n786.0 \n2 427.4 \nPlatinum \\kg \n1 101.0 \n1 015.0 \n1 044.0 \n980.1 \n3 039.1 \nRhodium \\kg \n101.5 \n93.5 \n95.7 \n88.5 \n277.7 \nRuthenium \\kg \n104.7 \n58.3 \n56.9 \n78.1 \n193.2 \nSource: Chamber of Mines of Zimbabwe, 2014 \n \n \n \n \n21 \nFigure 6: First Quarter Mineral Production (2009 to 2014) \nSource: Chamber of Mines of Zimbabwe, 2014 \n \nA comparative analysis of the first quarter mineral production over the period 2009 to 2014 shows \nthat the rate of growth of mineral production is stagnating, suggesting maximum usage of existing \ncapacity. In this regard, a significant amount of Foreign Direct Investment (FDI) is required to \nfacilitate the establishment of green field projects and expansion of existing mines. \nManufacturing \nThe lack of adequate long term financing for retooling and working capital purposes continues to \nseverely undermine the performance of the industry. This mainly reflects the low international \ncredit rating attached to Zimbabwe. The country was ranked very low, at 170 out of 189 countries \nin 2013, on the World Bank’s Ease of Doing Business Indicators. \nThe competitiveness of the manufacturing sector is also affected by the high cost of borrowing, \nuse of antiquated machinery and frequent power outages. As a result, the manufacturing industry \nfaces stiff competition from cheap imports from South Africa and China. \nCapacity utilization levels in the manufacturing industry have also declined on the back of lack of \nadequate long term financing for retooling and working capital purposes and low level of FDI. \nAccording to the 2013 Confederation of Zimbabwe Industries Manufacturing Sector Survey, \n0\n500\n1,000\n1,500\n2,000\n2,500\n3,000\n3,500\n4,000\n4,500\nQ1-2009\nQ1-2010\nQ1-2011\nQ1-2012\nQ1-2013\nQ1-2014\nGold/kg\nPlatinum/kg\nPalladium/kg\nNickel/t\n \n22 \ncapacity utilization levels declined progressively from 56% in 2011 to 44.6% in 2012 and 39.6% \nin 2013. Figure 7 below shows developments in capacity utilization for the period 2009 to 2013. \nFigure 7: Capacity Utilization in the Manufacturing Sector (%) \n \nSource: CZI \n \nTable 5 below shows results of a snap survey on capacity utilization by sub sector, conducted by \nthe CZI for the first half of 2014 for selected manufacturing sub-sectors. \n \nTable 5: Capacity Utilisation for Selected Manufacturing Sub-Sectors \nSector \n% Change in Capacity Utilisation \nBattery Manufacturers \n-4 \nCar Assemblers \n-2.5 \nEngineering \n-11 \nFood and Beverages Manufacturers \n2.7 \nFurniture Manufacturers \n-3 \nIndustrial Chemicals \n-3 \nLeather and Allied \n-1.5 \nPlastics Manufacturers \n-12.5 \nTobacco Processors \n-2 \nTextiles and Clothing \n-5 \nSource: CZI, 2014 \n \n32.3\n43.7\n57.2\n44.9\n39.6\n0\n10\n20\n30\n40\n50\n60\n70\n2009\n2010\n2011\n2012\n2013\n \n23 \nReflecting the difficult operating environment, some players in the manufacturing sector have \nceased operations owing to viability challenges. The widespread closure of companies has also \nresulted in substantial job losses in the formal sector. According to the Employers’ Confederation \nof Zimbabwe (EMCOZ), a total of 4 007 and 2 376 employees were retrenched in 2012 and in \n2013, respectively. The table below shows quarterly retrenchment figures since 2013. \n \nTable 6 : Retrenchment Statistics \nQuarter \nNo of Retrenchees \nJanuary-March 2013 \n494 \nApril-June 2013 \n585 \nJuly-September 2013 \n491 \nOctober-December 2013 \n806 \nJanuary-March 2014 \n1326 \nSource: Retrenchment board \n \nThe country has also witnessed an increasing number of firms being placed under judicial \nmanagement in the last 2 years. According to data obtained from the Master of High Court, \ncompanies placed under judicial management rose from 9 in 2010 to 37 in 2013. The table below \nshows companies that were either placed under judicial management or liquidated. \n \nTable 7: Companies under Judicial Management & Liquidation \nYear \n2010 \n2011 \n2012 \n2013 \nCompanies Under Judicial Management \n9 \n11 \n20 \n37 \nApplications for Winding Down \n50 \n73 \n149 \nn/a \nSource: Master of High Court, 2014 \n \nA significant number of companies are also failing to pay their staff on a regular basis, \naccumulating salary arrears and further adversely impacting on aggregate demand. \n \n \n24 \n4. INFLATION DEVELOPMENTS \n \nAnnual inflation was in negative territory for the months of February, March, April, May and June \n2014, though the deflationary pressures have been dissipating since April 2014. Annual headline \ninflation stood at -0.08% in June 2014, gaining 0.11% on the May 2014 rate of -0.19%. Figure 1 \nbelow shows the year-on-year inflation profile for the period January 2012 to June 2014. \n \nFigure 8: Annual Inflation Profile (%) \n \nSource: ZIMSTAT, July 2014 \n \nThe deflationary pressures are attributed to depressed effective domestic demand, tight liquidity \nconditions and a weak South African rand. The South African rand has generally depreciated \nagainst the US dollar, fluctuating around ZAR10.50 to the US dollar during the first half of 2014. \n \n \n \n \n \n \n-2\n-1\n0\n1\n2\n3\n4\n5\n6\n7\n8\nMar-10\nJun-10\nSep-10\nDec-10\nMar-11\nJun-11\nSep-11\nDec-11\nMar-12\nJun-12\nSep-12\nDec-12\nMar-13\nJun-13\nSep-13\nDec-13\nMar-14\nJun-14\n Zimbabwe\nSouth Africa\n \n25 \nFigure 9: Rand/US Dollar Exchange rate \n \nSource: RBZ 2014 \nQuarterly annualized inflation which had fallen from 0.63% in January 2014 to -0.12% in March \n2014, rose to 1.71% in June 2014, pointing to a reversal of deflation in the short term. \nFigure 10: Quarterly Annualized Inflation Profile (%) \n \nSource: RBZ July 2014 \n \n9.2\n9.7\n10.2\n10.7\n11.2\n11.7\n26-May-13\n11-Jun-13\n27-Jun-13\n13-Jul-13\n29-Jul-13\n14-Aug-13\n30-Aug-13\n15-Sep-13\n01-Oct-13\n17-Oct-13\n02-Nov-13\n18-Nov-13\n04-Dec-13\n20-Dec-13\n05-Jan-14\n21-Jan-14\n06-Feb-14\n22-Feb-14\n10-Mar-14\n26-Mar-14\n11-Apr-14\n27-Apr-14\n13-May-14\n29-May-14\n14-Jun-14\n30-Jun-14\n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n10\n12\n14\n \n26 \nRegional Inflation Developments \nZimbabwe’s inflation rate at -0.1% in June 2014 was the lowest in the SADC region. Table 8 \nbelow shows Zimbabwe’s annual inflation rate compared to inflation rates obtaining in the region \nfor June 2014. Most SADC countries have, however, made significant strides in reducing their \ninflation rates to within the 2018 SADC convergence inflation target of between 3% and 7%. This \nis commendable performance for the region. \nFigure 11: Selected SADC Countries’ Inflation Rates (%) \nSource: Country Central Bank Websites, 2014 \n \n \n \n \n \n \n \n \n-3\n0\n3\n6\n9\n12\n15\n18\nMay-10\nJul-10\nSep-10\nNov-10\nJan-11\nMar-11\nMay-11\nJul-11\nSep-11\nNov-11\nJan-12\nMar-12\nMay-12\nJul-12\nSep-12\nNov-12\nJan-13\nMar-13\nMay-13\nJul-13\nSep-13\nNov-13\nJan-14\nMar-14\nMay-14\nSADC\nConvergence\nInflation Target\n3-7%\nSADC Inflation Rates (%)\nZimbabwe\nSA\nBotswana\nMozambique\nZambia\n \n27 \nFigure 12: Selected SADC Countries’ Inflation Rates (%) \n Source: Country Central Bank Websites, 2014 \nThe marginal rise in inflation experienced during the second quarter of the year, if sustained over \na period of time, could result in the economy moving out of deflation. Inflation is, therefore, \nexpected to be in positive territory for the rest of 2014. \n \n5. PUBLIC FINANCES \n \nFiscal performance remains considerably under pressure, exacerbated by the general slowdown in \neconomic activity, inherent liquidity shortages and the growing informalisation of the economy. \nRevenues \nCumulative revenues for the first half of 2014 amounted to US$1.72 billion, against a target of \nUS$1.85 billion. The revenue collections for the half year to June 2014, represents a 6.3% decline \nfrom US$1.83 billion for the same period in 2013. Tax revenue accounted for 97% of the total \nrevenue and non-tax revenue, 3%.The subdued revenue collections during the first half of 2014 \nare symptomatic of a shrinking economy. The underperformance of Government revenues was \n0\n3\n6\n9\n12\n15\n18\n21\n24\n27\n30\n33\n36\n39\nJan-10\nMar-10\nMay-10\nJul-10\nSep-10\nNov-10\nJan-11\nMar-11\nMay-11\nJul-11\nSep-11\nNov-11\nJan-12\nMar-12\nMay-12\nJul-12\nSep-12\nNov-12\nJan-13\nMar-13\nMay-13\nJul-13\nSep-13\nNov-13\nJan-14\nMar-14\nMay-14\nSADC\nConvergence \nInflation Target\n3-7%\nTanzania\nMalawi\n \n28 \nreflected in monthly revenue shortfalls for the period January to June 2014, as shown in Figure II \nbelow. \n \nFigure 13: Monthly Revenue (Actual vs Target) \nSource: Ministry of Finance, June 2014 \n \nTax on income and profits and VAT continued to dominate in terms of contribution to total \nrevenue during the second quarter of 2014, accounting for 49.5% and 24.6%, respectively. \n \n \n \n \n \n \n \n \n \n \n0\n50\n100\n150\n200\n250\n300\n350\n400\nJan-14\nFeb-14\nMar-14\nApr-14\nMay-14\nJun-14\nUS$ Millions\nActual\nTarget\n \n29 \nFigure 14: Revenue Structure as at 30th June 2014 \n \nSource: Ministry of Finance, June 2014 \n \n \nTable 8: Comparison of Revenue Collections for the First Half of 2013 and 2014 \n \nSix months to June \n2013 (US$ million) \nSix months to June \n2014 (US$ millions) \nVariance \n(US$ millions) \nIncome and Profit Tax \n653.9 \n728.9 \n75.0 \nValue Added Tax \n508.7 \n451.4 \n(57.3) \nCustoms \n182.2 \n138.6 \n(43.6) \nExcise Duty \n242.8 \n241.4 \n(1.4) \nNon Tax Revenue \n165.1 \n88.9 \n(76.2) \nTotal \n1752.7 \n1649.2 \n(103.5) \nSource: Ministry of Finance, June 2014 \nAs shown in Table 9 above, revenue performance of the different sub heads for 2014 were lower \ncompared to 2013, except for income and profit tax, which benefited from increased revenue \ncompliance measures being implemented by the Zimbabwe Revenue Authority. \nVAT, 24.6%\nIncome & Profits, \n49.5%\nExcise, 12.1%\nCustoms Duty, 7.5%\nNon Tax Revenue, \n3.2%\nOther Indirect Taxes, \n3.1%\n \n30 \nExpenditures \nTotal expenditures for the first half of 2014 amounted to US$1.7 billion, against a target of US$1.8 \nbillion, reflecting the constrained fiscal position, emanating from depressed revenue collections. \nEmployment costs accounted for 62.3% and 58%, of recurrent and total expenditures, respectively, \nup from the respective historical averages of 52% and 48%. This followed the upward review of \ncivil service salaries in February 2014. Capital expenditure constituted 6.8% of the total \nexpenditures, constraining the implementation of on-going and earmarked infrastructural projects \nin the country. \n \nFigure 15: Government Expenditure for the First Half 2014 \nSource: Ministry of Finance, June 2014 \n \n \n \n \n \nEmployment costs, \n58%\nCapital Expenditure \nand Net Lending, 7%\nOther current \nexpenditure, 35%\n \n31 \n6. EXTERNAL SECTOR DEVELOPMENTS \n \nThe country’s external sector position remained difficult, on account a growing import dependence \nagainst subdued export performance. The continued closure of some companies, declining \nindustrial capacity utilization, and loss of competitiveness have combined to further widen supply \ngaps in the economy, and resulted in increased demand for imports. Moreover, weakening \ninternational commodity prices for the country’s key export minerals, coupled with a slow-down \nin domestic economic activity and lack of FDI, affected export viability. \n \nMerchandise Trade Developments \nTotal exports from January to June 2014, amounted to US$1,228.4 million, against imports of \nUS$2 996.3 million, resulting in a trade deficit amounting to US$1,767.9 million. While imports \nremained relatively stable, averaging about US$500 million per month over the first half of the \nyear, monthly exports slowed down from US$278.2 million in January 2014, to US$156.4 million \nin March, before recovering to US$238 million in June 2014. \nFigure 16: External Trade: January-June 2014 (US$ Millions) \nSource: ZIMSTAT \n \n-400\n-300\n-200\n-100\n0\n100\n200\n300\n400\n500\n600\nJan\nFeb\nMar\nApr\nMay\nJun\nExports\nImports\nTrade Balance\n \n32 \nOn the back of a huge import bill that continues to surpass export earnings, the current account \ndeficit widened from 24% of GDP in 2012, to 28% of GDP in 2013. \nCapital Account Developments \nThe capital and financial account of the balance of payments recorded surpluses, on the back of \nincreased access to debt creating capital flows. In this regard, the capital account surplus increased \nfrom US$1.7 billion in 2012 to US$2.7 billion in 2013. Local banks sourced credit lines on behalf \nof firms or on their own books for on-lending domestically. \nForeign direct investment (FDI), however, remained subdued although it improved slightly from \nUS$350 million in 2012 to US$373 million in 2013. The increase was mainly attributed to \ngreenfield investments and inter-company loans. Portfolio investment inflows also increased from \nUS$99 million in 2012, to US$283.3 million in 2013. \nPrivate Sector Offshore Loans \nNotwithstanding subdued non-debt creating capital inflows such as FDI and portfolio investment, \nutilization of private sector offshore long term loans increased from US$434 million in 2012 to \nUS$1.3 billion in 2013. Higher utilization levels also reflected the ability of the private sector to \ntimely meet loan repayment obligations, without accumulating arrears. \nDespite increased access to private sector offshore facilities in 2013, loan utilization levels \nremained subdued during the period January to April 2014, with only US$7.9 million (1%) of the \napproved US$706.3 million having been disbursed as at 30 April 2014. This mainly reflected the \ngeneral slowdown in economic activity, as well as failure by companies to meet some conditions \nprecedent. \n \n \n \n33 \nTable 9: Loan Disbursements (as at 31 December 2013) \nSector \n \n \nNo. of \nApplications \n \nAmount \nApproved \n(US$M) \nAmount \nDisbursed \n(US$M) \nUtilization Rate \n(%) \n \nAgriculture \n83 \n1187.8 \n441.5 \n37% \nDistribution \n68 \n375.3 \n110.0 \n29% \nEnergy \n9 \n294.4 \n31.0 \n11% \nFinancial \n50 \n811.4 \n445.6 \n55% \nManufacturing \n36 \n154.7 \n72.8 \n47% \nMining \n48 \n262.9 \n158.2 \n60% \nTransport \n7 \n11.3 \n9.6 \n85% \nTourism & Hospitality \n6 \n9.4 \n8.3 \n89% \nConstruction/Engineering/ \nProperty Development \n15 \n9.0 \n1.5 \n17% \nICT \n4 \n32.8 \n4.8 \n15% \nTOTAL \n326 \n3148.8 \n1283.2 \n41% \nSource: RBZ \nOverall Balance of Payments \nReflecting developments in the current and capital accounts, the country’s overall balance of \npayments recorded a deficit of US$366.4 million in 2013, which is further projected to widen to \nUS$658.6 billion in 2014. \n \nFigure 17: Current, Capital and Overall Balance (US$ Billions) \n \nSource: RBZ \n \nUS$ Millions\nCurrent Account Balance\nCapital Account Balance\nOverall Balance\n \n34 \nFinancing of Balance of Payments \nThe financing of the balance of payments has remained a challenge due to low foreign currency \nreserves. Against the background of reserve inadequacy and attendant resource constraints, the \ncountry has been accumulating external payment arrears, which increased from US$5.95 billion \nin 2012 to US$6.2 billion in 2013. Adverse balance of payments developments continue to impose \na constraint on the mobilization of bank deposits, and on the attainment of fast-paced economic \ngrowth. \nFigure 18: External Payment Arrears (US$ Billion) \nSource: RBZ \n \n7. MONETARY DEVELOPMENTS \n \nOn an annual basis, the broad money supply growth rate, which had slowed down to 0.55% in the \nlast quarter of 2013, rebounded in 2014 to 4.11% and 5.61% in the first and the second quarters \nof 2014, respectively. The annual growth in broad money during the second quarter of 2014 was \non the back of expansions in demand deposits, US$173.8 million; over 30-days deposits; \nUS$161.4 million; savings deposits, US$77.1 million; and under 30-days deposits, US$73.1 \nmillion. \n0\n1.5\n3\n4.5\n6\n7.5\n2008\n2009\n2010\n2011\n2012\n2013\nArrears\n \n35 \nOn a year to date basis, broad money grew by 9.95%, compared to a decline of 1.25% recorded \nduring the same period in 2013. The growth was partly driven by tobacco related inflows for this \nyear’s selling season. As at end of June 2014, cumulative tobacco sales amounted to US$647.4 \nmillion, compared to US$565.7 million sold the same period in the previous year. \nThe general and sustained slowdown in annual broad money growth, from a high growth rate of \n372.95% recorded in January 2010 to 12.65% by June 2014, reflected the difficult balance of \npayments position, low FDI and other investment inflows. This partly underpins the liquidity \nchallenges that have persisted in the economy, since the adoption of the multiple currency system \nin 2009. \nFigure 19: Annual Broad Money Growth Rate and Level \n \nSource: RBZ \n \nDomestic Credit \nIn tandem with the declining growth in broad money supply, credit to the private sector, the main \ndriver of domestic credit, declined by 1.74%, from US$3 666.2 million in June 2013 to US$3 \n602.3 million in June 2014. The decline reflected the slowdown in lending by banks due to \nliquidity constraints, as well as an increase in non-performing loans. The overall ratio of non-\nperforming loans to total credit in the banking sector increased to 18.49% in June 2014, from \n14.51% recorded in June 2013. \n-5%\n0%\n5%\n10%\n15%\n20%\n25%\n30%\n35%\n40%\n0\n500\n1000\n1500\n2000\n2500\n3000\n3500\n4000\n4500\n5000\nAnnual Growth\nUS$ million\nDemand\nSavings\nUnder-30 day\nOver-30 day\nGrowth\n \n36 \nFigure 20: Structure and Level of Domestic Credit \n \nSource: RBZ \n \nInterest Rates \nIn the absence of an anchor rate, interest rates quoted by banks continued to vary across banks and \nwere largely determined by individual banks’ liquidity positions. As at end of June 2014, lending \nrates ranged between 6% and 35%, with most banks quoting rates around 20% per annum. The \nlevel of interest rates quoted by banks, in large part, reflected individual banks’ liquidity positions \nand their cost of funds. Banks with low cost of funds and better access to funding quoted lower \nrates, compared to the other banks. \n \n \n \n \n-500\n0\n500\n1,000\n1,500\n2,000\n2,500\n3,000\n3,500\n4,000\n4,500\n Dec 09\n Dec 10\n Dec 11\nJan-12\nFeb-12\nMar-12\nApr-12\nMay-12\nJun-12\nJul-12\nAug-12\nSep-12\nOct-12\nNov-12\nDec-12\nJan-13\nFeb-13\nMar-13\nApr-13\nMay-13\nJun-13\nJul-13\nAug-13\nSep-13\nOct-13\nNov-13\nDec-13\nJan-14\nFeb-14\nMar-14\nApr-14\nMay-14\nJun-14\nUS$ million\nPEs\nGvt\nPvt Sector\n \n37 \n \n \n \n \nNon-Performing Loans \n \nIn general terms, non-performing loans refer to those financial assets from which banks \nno longer receive interest and/or installment payments as scheduled. They are known as \nnon-performing because the loan ceases to generate income for the bank. In terms of \nsection 18 of Part IV of the Third Schedule of Banking Regulations, 2000, “non-\nperforming”, in relation to any asset, means that: \na. the asset is not generating any income; or \nb. the principal, interest or both is due and unpaid for 90 days or more; or \nc. interest payment equal to 90 days or more have been capitalized, refinanced or \nrolled over. \n \nThe unfavourable macroeconomic environment, largely liquidity crunch, coupled with \npoor corporate governance at some banks, resulted in Zimbabwe’s financial institutions \nrecording high defaults on loans. In addition, poor corporate governance practices and \nweak risk management systems at some institutions, has contributed to the increases in \nNPLs. The average ratio of NPLs increased to 18.49%as at June 2014, up from below \n5% in 2009. \n \n38 \nFigure 21: Evolution of Non-Performing Loans \n \nSource: RBZ \n \nNPLs have adverse effects on banks’ finances as they reduce asset quality as well as profitability. \nThe rise in NPLs also leads to higher risk aversion by banks, which may result in lower lending to \neconomic agents thus further starving the economy of the much needed funding. The challenge of \nNPLs can be partly addressed by the introduction of a credit reference bureau. \n \n \n \n \n \n \n \n \n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n20\nMar-09\nJun-09\nSep-09\nDec-09\nMar-10\nJun-10\nSep-10\nDec-10\nMar-11\nJun-11\nSep-11\nDec-11\nMar-12\nJun-12\nSep-12\nDec-12\nMar-13\nJun-13\nSep-13\nDec-13\nMar-14\nJun-14\n%\n \n39 \n \nCredit Reference Bureaux \nCredit Reference Bureaux support the central role played by banks and other financial institutions in \nextending financial services within an economy. According to Wikipedia.org, “A credit bureau is \norganization providing information on individuals' borrowing and paying habits. Credit information such \nas a person’s previous loan performance is a powerful tool to predict his future behavior. Such credit \ninformation institutions reduce the effect of asymmetric information between borrowers and lenders, and \nalleviate problems of adverse selection and moral hazard. Thus, credit bureaus help lenders make faster and \nmore accurate credit decisions”. \nThe Reserve Bank of Zimbabwe is currently finalizing a framework for the operationalization of Credit \nReference Bureaus (CRBs) which is expected to assist in reducing the current asymmetric information gap \nbetween borrowers and lenders, in the process, improving credit risk management at banks. \nThe setting up of CRBs is expected to enhance prudent credit risk management practices by banking \ninstitutions. This will in turn curtail the high levels of over-borrowings and over-indebtedness by a number \nof corporates which is expected to reduce the high levels of non – performing loans in the economy. \nRwanda \nAfter experiencing high levels of non-performing loans in the banking sector, the National Bank of Rwanda \n(BNR) spear headed the formation of a credit reference bureau, CRB Africa, in 2010. All financial \ninstitutions signed agreements to provide CRB Africa with relevant credit information of their clients. \nResultantly, non-performing loans fell by 10% over the year December 2011 to December 2012. \nMauritius \nThe Mauritius Credit Information Bureau (MCIB) was set up under the Bank of Mauritius Act 2004 and \ncame into operation on 1 December 2005. MCIB is fully owned and operated by the Bank of Mauritius \nfrom within its premises. Prior to the establishment of the MCIB the average NPLs ratio was around 18%. \nWhen the MCIB was introduced in 2005 the ratio came down gradually to the current levels of 2%. NPLs \nare no longer a problem in Mauritius. \n \n \n \n40 \nFigure 22: Growth in Credit to the Private Sector \n \nSource: RBZ \n \nThe slowdown in credit to the private sector, coupled with limited access to external sources of \nfinancing, is mirrored in declining economic performance. In addition, high finance costs have \nhampered the operations of the domestic industry as it rendered them less competitive on both the \ndomestic and international markets. Furthermore, after losing business, companies have not been \nable to service their loans, thus worsening the size of non-performing loans on banks’ balance \nsheets. \n-5%\n0%\n5%\n10%\n15%\n20%\n25%\n30%\n35%\nDec-12\nJan-13\nFeb-13\nMar-13\nApr-13\nMay-13\nJun-13\nJul-13\nAug-13\nSep-13\nOct-13\nNov-13\nDec-13\nJan-14\nFeb-14\nMar-14\nApr-14\nMay-14\nJun-14\nJul-14\n \n41 \n \n8. PAYMENT, CLEARING AND SETTLEMENT ACTIVITIES \n \nThe value of transactions processed through the National Payment System in the quarter ending \n30 June 2014, was almost the same at US$12.8 billion, as the US$12.9 billion during the same \nperiod in 2013. In volume terms, there was a 39% increase in transactions from 35 million to 49 \nmillion. Most payment streams recorded increases in transactions processed both in value and \nvolume terms for the period under review, compared to the quarter ending 31 March 2014. Mobile \nvalues and cheque volumes, however, registered decreases of 15% and 5%, respectively. Statistical \ninformation on various payment streams for the second quarter of 2014 and previous quarters is \nshown in the Table 10 below. \nCredit to the Private Sector \nThe financial sector plays an intermediary role, that is, it mobilizes resources from surplus \nunits of the economy to deficit units. In addition, the financial sector can be viewed as a \nclearing house for all financial flows, thus providing a unique insight into the behavior of \nthese flows, which sometimes mirrors the flows of real resources among the sectors. \nOver the period June 2013 to June 2014, annual growth in credit to the private sector has \nbeen on a downward trend a reflection of a slowdown in lending by banks. The slowdown \nis chiefly attributable to liquidity challenges and high credit risk which is mirrored by a rise \nin non-performing loans. \n \n \n42 \nTable 10: Transactional activities \nPAYMENT \nSTREAM \nSECOND \nQUARTER 2013 \nPREVIOUS \nQUARTER \nENDING 31 \nMARCH 2014 \nSECOND \nQUARTER 2014 \nCHANGE FROM \nLAST QUARTER \nPROPORTION \n \nVALUES IN USD \n \nRTGS \n10,995,240,607.41 \n9,380,728,142.58 \n10,462,701,464.33 \n10% \n81.65% \nCHEQUE \n45,652,769.68 \n32,091,200.38 \n33,025,515.04 \n2% \n0.26% \nPOS \n386,577,497.08 \n307,371,709.87 \n361,418,964.11 \n14% \n2.82% \nATMS \n572,575,994.72 \n659,939,278.09 \n778,369,059.00 \n21% \n6.07% \nMOBILE \n519,000,738.31 \n921,359,718.03 \n842,496,279.17 \n-15% \n6.57% \nINTERNET \n397,253,656.02 \n220,661,381.50 \n335,906,455.94 \n29% \n2.62% \nTOTAL \n12,916,301,263.22 \n11,522,151,430.45 \n12,813,917,737.60 \n \n100% \n \nVOLUMES \n \nRTGS \n583,866 \n549,591 \n577,354 \n5% \n1.18% \nCHEQUE \n108,758 \n94,711 \n89,695 \n-5% \n0.18% \nPOS \n2,877,517 \n3,191,717 \n3,570,499 \n13% \n7.31% \nATMs \n2,285,069 \n2,619,036 \n2,979,405 \n16% \n6.10% \nMOBILE \n29,097,577 \n34,587,995 \n41,526,198 \n24% \n85.03% \nINTERNET \n110,281 \n80,141 \n93,724 \n12% \n0.19% \nTOTAL \n35,063,068 \n41,123,191 \n48,836,875 \n \n100% \nSource: RBZ \nThe value of transactions processed through the RTGS system for the quarter ending 30 June 2014 \nstood at US$10.5 billion, down from US$11 billion recorded during the same period in 2013. Total \ntransactions in volume terms registered a decrease of 1% from 583 866 to 577354. As shown in \nthe Figure 17 below, RTGS transactions were higher in both value and volume terms in the second \nquarter, compared to the first quarter in 2014. \n \n \n \n \n \n \n \n \n \n43 \nFigure 23: Volumes and Values of RTGS Transactions. \nSource: RBZ \n \nSWIFT Foreign Currency Transactions \nSWIFT foreign currency payments declined by 0.3% to US$1.673 billion during the quarter ending \nJune 2014, from US$1.678 billion in the quarter ending March 2014. SWIFT foreign currency \nreceipts totaled US$1.796 billion in the quarter ending June 2014, up from US$1.705 billion in the \nquarter ending March 2014. \n \n8.5\n9.0\n9.5\n10.0\n10.5\n11.0\n11.5\n520\n530\n540\n550\n560\n570\n580\n590\n600\nQuarter\nending June\n2013\nQuarter\nending\nSeptember\n2013\nQuarter\nending\nDecember\n2013\nQuarter\nending March\n2014\nQuarter\nending June\n2014\nRTGS Values in US$ Billions\nRTGS Volumes in Thousands\nVolumes\nValues\n \n44 \nFigure 24: SWIFT Quarterly Foreign Currency Transactions \n \n \n \nRetail Payments \nFigures 19 and 20 below show the trend in the values and volumes of retail transactions for the \nsecond quarter ending June 2013 to second quarter of 2014. \n \nVolumes in Thousands\nValue in US$Billions\nForeign Currency Inflow Values\nForeign Currency Outflow Values\nForeign Currency Outflow Volumes\nForeign Currency Inflow Volumes\n \n45 \nFigure 25: Volumes of Retail Transactions \n \nSource: RBZ \nFigure 26: Values of Retail Transactions \n \nSource: RBZ \nAccess Points and Devices \nThe table below shows the access points and devices from the quarter ending June 2013 to June \n2014. \n \n46 \nTable 11: Payment Systems Access Points \n \nQuarter \nending June \n2013 \nQuarter \nending \nSeptember \n2013 \nQuarter \nending \nDecember \n2013 \nQuarter \nending March \n2014 \nQuarter \nending June \n2014 \nMobile Banking \nAgents \n4,169 \n5,909 \n6,900 \n16,271 \n19,931 \nATMs \n422 \n426 \n431 \n450 \n508 \nPOS \n4,940 \n4,945 \n6,901 \n7,464 \n11,944 \nPAYMENT SYSTEMS ACCESS DEVICES \nDebit Cards \n2,072,427 \n2,078,110 \n2,246,659 \n2,294,018 \n2,593,029 \nCredit Cards \n7,985 \n7,479 \n7,221 \n7,182 \n7,782 \nPrepaid Cards \n14,168 \n15,598 \n17,599 \n19,274 \n21,834 \nMobile Banking \nSubscribers \n2,955,391 \n2,297,038 \n2,444,340 \n4,158,799 \n4,218,874 \nInternet Banking \nSubscribers \n60,104 \n63,736 \n52,105 \n53,396 \n62,745 \nSource: RBZ \nAccess points continued to exhibit growth, with the number of Mobile banking agents and Point \nof Sale (POS) devices being gradually deployed in remote parts of the country. This initiative was \na result of continued guidance to financial institutions by the Central Bank, to promote electronic \nmeans of payments that promote financial inclusion. \n \n \n \n \n \n \n \n \n47 \nFigure 27: Number of Access Points \n \nSource: RBZ \n \nThere were marginal increases in the number of subscribers to both mobile and internet banking, \nfrom the first quarter ending March 2014, to the second quarter ending June 2014 as shown in the \nFigure 28 below. \n \n \n \n \n \n \n \n \n0\n5\n10\n15\n20\n25\nQuarter ending June\n2013\nQuarter ending\nSeptember 2013\nQuarter ending\nDecember 2013\nQuarter ending March\n2014\nQuarter ending June\n2014\nThousands\nPOS POPULATION\nATM Population\nMobile Banking Agents\n \n48 \nFigure 28: Number of Access Devices \n \nSource: RBZ \n \n9. STOCK MARKET DEVELOPMENTS \n \nThe losses registered on the Zimbabwe Stock Exchange during the first quarter were reversed in \nthe quarter ending June 2014. The industrial index increased by 5.8%, from 176.32 points in March \n2014 to 186.57 points in June 2014, largely on the back of news that the Government would be \nreviewing the indigenization and economic empowerment policy. The mining index also firmed \nto 61.32 points in June 2014, from 29.51 points in March 2014, representing a 107.8% increase. \nThis followed increases in production at Hwange Colliery Company and Bindura Nickel Mine. \n \n \n \n \n0.0\n0.5\n1.0\n1.5\n2.0\n2.5\n3.0\n3.5\n4.0\n4.5\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nQuarter ending\nJune 2013\nQuarter ending\nSeptember\n2013\nQuarter ending\nDecember 2013\nQuarter ending\nMarch 2014\nQuarter ending\nJune 2014\nActine Mobile & Dr Card Users in Millions\nInternet, Cr & Prepaid Cards in Thousands\nMobile\nDr Cards\nInternet\nCr Cards\nPrepaid Cards\n \n49 \nFigure 29: Zimbabwe Stock Exchange Indices \n \n \nSource: Zimbabwe Stock Exchange, 2014 \n \nMarket Turnover \nIn line with the performance recovery in the second quarter of 2014, there was improvement in \ntrading activity on the stock market. Market turnover volume increased by 22.9% to 837 523 059 \nshares in the quarter up to June 2014, from 681 599 364 shares in the previous quarter. In addition, \nmarket turnover value also increased by 3% from $112.5 million in the first quarter to US$115.9 \nmillion in the quarter under review. Despite a decline in foreign purchases in the second quarter \nof 2014, foreign investor participation in the bourse remained strong, contributing about 60% of \ntrade value, against a background of Government’s intention to review the Indigenization Policy. \nDuring the quarter under review, net foreign purchases were US$3.1 million, compared to US$29.5 \nmillion the previous quarter. \n \nRESERVE BANK OF ZIMBABWE \n0\n50\n100\n150\n200\n250\n300\n350\n0\n50\n100\n150\n200\n250\n20-Feb-09\n21-Apr-09\n20-Jun-09\n19-Aug-09\n18-Oct-09\n17-Dec-09\n15-Feb-10\n16-Apr-10\n15-Jun-10\n14-Aug-10\n13-Oct-10\n12-Dec-10\n10-Feb-11\n11-Apr-11\n10-Jun-11\n9-Aug-11\n8-Oct-11\n7-Dec-11\n5-Feb-12\n5-Apr-12\n4-Jun-12\n3-Aug-12\n2-Oct-12\n1-Dec-12\n30-Jan-13\n31-Mar-13\n30-May-13\n29-Jul-13\n27-Sep-13\n26-Nov-13\n25-Jan-14\n26-Mar-14\n25-May-14\nIndustrial Index\nMining Index\n \nSTATISTICAL TABLES \n \n1. \nLiabilities and Assets of the Central Bank \n1.1. Reserve Bank: Liabilities \n \n \n \n \n \n \n \nS1 \n1.2. Reserve Bank: Assets \n \n \n \n \n \n \n \nS2 \n \n2. \nLiabilities and Assets of Other Depository Corporations \n2.1. Commercial Banks: Liabilities \n \n \n \n \n \n \nS3 \n2.2. Commercial Banks: Assets \n \n \n \n \n \n \nS4 \n2.3. Accepting Houses: Liabilities \n \n \n \n \n \n \nS5 \n2.4. Accepting Houses: Assets \n \n \n \n \n \n \n \nS6 \n2.5. Building Societies: Liabilities \n \n \n \n \n \n \nS7 \n2.6. Building Societies: Assets \n \n \n \n \n \n \n \nS8 \n \n3. \nMoney Supply and Bank Liquidity \n3.1. Monetary Aggregates \n \n \n \n \n \n \n \nS9 \n3.2. Broad Money Survey \n \n \n \n \n \n \n \nS10 \n3.3. Analysis of Monthly Changes in Money Supply \n \n \n \n \nS11 \n3.4. Analysis of Yearly Changes in Money Supply \n \n \n \n \nS12 \n3.5. Sectoral Analysis of Commercial Banks’ Loans and Advances \n \n \nS13 \n3.6. Sectoral Analysis of Merchant Banks’ Loans and Advances \n \n \nS14 \n3.7. Sectoral Analysis of Commercial Banks’ Deposits \n \n \n \nS15 \n \n4. \nNational Payment Systems \n \n \n4.1. Values of Transactions \n \n \n \n \n \n \n \nS16 \n4.2. Volumes of Transactions \n \n \n \n \n \n \n \nS16 \n \n5. \nInterest Rates, Security Yields and Prices \n5.1. Lending Rates \n \n \n \n \n \n \n \n \nS17 \n5.2. Deposit Rates \n \n \n \n \n \n \n \n \nS17 \n5.3. Stock Exchange Indices \n \n \n \n \n \n \n \nS18 \n5.4. Monthly Inflation \n \n \n \n \n \n \n \n \nS19 \n5.5. Quarterly Inflation \n \n \n \n \n \n \n \n \nS20 \n5.6. Annual Inflation \n \n \n \n \n \n \n \n \nS21 \n \n6. \nBalance of Payments \n6.1. Monthly Cross Border Payments \n \n \n \n \n \n \nS22 \n \n6.2. Monthly Cross Border Receipts \n \n \n \n \n \n \nS23 \n6.3. External Debt Outstanding by Debtor \n \n \n \n \n \nS24 \n6.4. External Debt Outstanding by Source \n \n \n \n \n \nS25 \n6.5. External Debt Service and Debt Service Ratios \n \n \n \n \nS26 \n \n7. \nNational Accounts \n7.1. Real Gross Domestic and National Product per Capita at Market Prices \n \nS27 \n7.2. Gross Domestic Product at Factor Cost by Industry \n \n \n \nS28 \n7.3. Expenditure on Gross Domestic Product \n \n \n \n \n \nS28 \n7.4. Mineral Production \n \n \n \n \n \n \n \nS29 \n7.5. Electricity Energy Produced and Distributed \n \n \n \n \nS30 \n7.6. Volume of Manufacturing Index \n \n \n \n \n \n \nS31 \nTABLE 1.1: RESERVE BANK - LIABILITIES\nUS$ '000s\nLiabilities to the public\nNotes and\nDeposits\nCapital\ncoin in\nand\ncirculation\nForeign\ngeneral\nEnd of\nBankers/1 \nCentral\nOther\nTotal\nloans\nOther\nTotal\nreserve\nOther\nForeign Liabilities\nTOTAL\nGovt.\n2009\n0.0\n125081.2\n0.0\n187.4\n125268.6\n0.0\n0.0\n125268.6\n-1131128.2\n395083.8\n1295065.8\n684290.0\n2010\n0.0\n255984.5\n0.0\n186.8\n256171.3\n0.0\n0.0\n256171.3\n-1146095.7\n529768.4\n1153432.9\n793276.8\n2011\n0.0\n185871.1\n0.0\n80.5\n185951.6\n0.0\n0.0\n185951.6\n-1056254.3\n634356.0\n1152069.8\n916123.1\n2012\n0.0\n272600.8\n0.0\n80.8\n272681.6\n0.0\n0.0\n272681.6\n-1089458.2\n716128.1\n1149161.2\n1048512.8\n2013\n0.0\n271521.6\n0.0\n71.9\n271593.5\n0.0\n0.0\n271593.5\n-1206013.8\n652146.7\n1150150.8\n867877.2\n2013:Jan\n0.0\n289362.5\n0.0\n78.6\n289441.0\n0.0\n0.0\n289441.0\n-1086997.8\n721548.1\n1149023.6\n1073015.0\nFeb\n0.0\n260032.6\n0.0\n78.3\n260110.9\n0.0\n0.0\n260110.9\n-1088740.4\n730650.7\n1141623.5\n1043644.7\nMar\n0.0\n226890.9\n0.0\n77.3\n226968.2\n0.0\n0.0\n226968.2\n-1088589.4\n738713.7\n1135073.4\n1012166.0\nApr\n0.0\n291092.2\n0.0\n78.6\n291170.8\n0.0\n0.0\n291170.8\n-1088491.8\n720020.3\n1140521.7\n1063221.1\nMay\n0.0\n313108.3\n0.0\n74.5\n313182.8\n0.0\n0.0\n313182.8\n-1066274.5\n723013.8\n1134105.5\n1104027.6\nJun\n0.0\n337309.3\n0.0\n73.0\n337382.2\n0.0\n0.0\n337382.2\n-1082780.1\n707286.0\n1138062.0\n1099950.1\nJul\n0.0\n279499.7\n0.0\n73.5\n279573.2\n0.0\n0.0\n279573.2\n-1114546.3\n694095.7\n1143126.7\n1002249.3\nAug\n0.0\n219051.4\n0.0\n71.9\n219123.3\n0.0\n0.0\n219123.3\n-1128445.1\n697227.6\n1139865.9\n927771.6\nSept\n0.0\n275730.3\n0.0\n72.8\n275803.1\n0.0\n0.0\n275803.1\n-1107206.2\n667339.8\n1146634.4\n982571.1\nOct\n0.0\n268520.6\n0.0\n73.3\n268594.0\n0.0\n0.0\n268594.0\n-1224720.0\n670636.9\n1150527.4\n865038.3\nNov\n0.0\n225356.1\n0.0\n72.6\n225428.7\n0.0\n0.0\n225428.7\n-1225178.2\n675763.0\n1147979.0\n823992.5\nDec\n0.0\n271521.6\n0.0\n71.9\n271593.5\n0.0\n0.0\n271593.5\n-1206013.8\n652146.7\n1150150.8\n867877.2\n2014:Jan\n0.0\n292736.8\n0.0\n69.7\n292806.5\n0.0\n0.0\n292806.5\n-1206425.2\n657107.4\n1148693.8\n892182.6\nFeb\n0.0\n299351.3\n0.0\n71.1\n299422.4\n0.0\n0.0\n299422.4\n-1210019.6\n668360.3\n1151300.5\n909063.7\nMar\n0.0\n310478.6\n0.0\n71.5\n310550.1\n0.0\n0.0\n310550.1\n-1239445.8\n680789.0\n1152604.9\n904498.1\nApr\n0.0\n381782.7\n0.0\n71.5\n381854.2\n0.0\n0.0\n381854.2\n-1236365.7\n559108.9\n1146704.0\n851301.4\nMay\n0.0\n440897.7\n0.0\n71.9\n440969.7\n0.0\n0.0\n440969.7\n-1243102.7\n563275.1\n1143977.0\n905119.0\nJun\n0.0\n404250.6\n0.0\n96.6\n404347.2\n0.0\n0.0\n404347.2\n-1176677.5\n486162.5\n1141906.4\n855738.5\n1. Commercial banks and accepting houses.\n2. Statutory bodies.\n \n \nS4 \n \n \nTABLE 1.2: RESERVE BANK - ASSETS\nUS$ '000s\nLoans and advances\nEnd of\nGold\nOther\nTotal\nTreasury \nOther\nCentral\nOther\nGovt.\nOther\nOther\nTOTAL\nGovernment\nStock\n2009\n0.0\n467,033.2\n467,033.2\n0.0\n616.4\n-1,857.6\n318.1\n0.0\n15,937.1\n202,242.7\n684,290.0\n2010\n0.0\n484,200.1\n484,200.1\n0.0\n689.9\n-4,729.2\n547.5\n0.0\n12,242.7\n300,344.1\n793,276.8\n2011\n1,053.6\n413,085.3\n414,138.9\n0.0\n3,530.0\n-1,834.8\n0.0\n0.0\n43,849.4\n459,279.7\n916,123.1\n2012\n1,140.6\n446,848.2\n447,988.8\n0.0\n3,530.0\n-11,097.8\n0.0\n0.0\n37,106.2\n570,985.5\n1,048,512.8\n2013\n486.1\n338,001.8\n338,487.8\n0.0\n3,494.6\n-1,182.3\n0.0\n0.0\n31,621.4\n495,455.6\n867,877.2\n2013:Jan\n667.6\n453,678.4\n454,346.1\n0.0\n3,530.0\n-1,225.8\n0.0\n0.0\n37,484.1\n578,880.6\n1,073,015.0\nFeb\n647.4\n421,231.9\n421,879.3\n0.0\n3,530.0\n-1,192.4\n0.0\n0.0\n37,484.1\n581,943.7\n1,043,644.7\nMar\n646.9\n366,445.9\n367,092.8\n0.0\n3,530.0\n-1,179.6\n0.0\n0.0\n37,484.1\n605,238.6\n1,012,166.0\nApr\n592.2\n411,562.8\n412,155.0\n0.0\n3,530.0\n-1,180.8\n0.0\n0.0\n37,484.1\n611,232.8\n1,063,221.1\nMay\n570.4\n471,094.4\n471,664.8\n0.0\n3,530.0\n-1,179.7\n0.0\n0.0\n36,598.8\n593,413.7\n1,104,027.6\nJun\n497.5\n461,299.6\n461,797.0\n0.0\n3,530.0\n-1,828.4\n0.0\n0.0\n36,598.8\n599,852.6\n1,099,950.1\nJul\n536.6\n361,945.9\n362,482.5\n0.0\n3,530.0\n-3,487.6\n0.0\n0.0\n32,615.1\n607,109.3\n1,002,249.3\nAug\n568.1\n287,048.2\n287,616.2\n0.0\n3,530.0\n-1,242.0\n0.0\n0.0\n32,615.1\n605,252.2\n927,771.6\nSept\n541.1\n344,244.0\n344,785.1\n0.0\n3,494.6\n-1,196.6\n0.0\n0.0\n32,615.1\n602,872.9\n982,571.1\nOct\n546.7\n321,903.6\n322,450.3\n0.0\n3,494.6\n-1,468.9\n0.0\n0.0\n31,621.4\n508,940.8\n865,038.3\nNov\n502.6\n264,324.2\n264,826.8\n0.0\n3,494.6\n-1,188.2\n0.0\n0.0\n31,621.4\n525,237.7\n823,992.5\nDec\n486.1\n338,001.8\n338,487.8\n0.0\n3,494.6\n-1,182.3\n0.0\n0.0\n31,621.4\n495,455.6\n867,877.2\n2014:Jan\n501.4\n354,318.8\n354,820.2\n0.0\n3,494.6\n-1,181.7\n0.0\n0.0\n31,621.4\n503,428.0\n892,182.6\nFeb\n537.6\n364,538.2\n365,075.8\n0.0\n3,494.6\n-1,181.8\n0.0\n0.0\n31,621.4\n510,053.6\n909,063.7\nMar\n522.5\n356,634.8\n357,157.3\n0.0\n3,494.6\n-1,179.6\n0.0\n0.0\n31,250.4\n513,775.3\n904,498.1\nApr\n523.7\n359,335.7\n359,859.4\n0.0\n3,494.6\n-1,178.8\n0.0\n0.0\n31,250.4\n457,875.7\n851,301.4\nMay\n506.4\n410,397.8\n410,904.2\n0.0\n3,494.6\n-1,178.9\n28.4\n0.0\n31,250.4\n460,620.2\n905,119.0\nJun\n531.7\n374,024.9\n374,556.5\n0.0\n3,474.8\n-1,179.1\n32.7\n0.0\n31,250.4\n447,603.1\n855,738.5\n Investments\n Foreign Assets\n Bills Discounted\n \n \nS5 \n \n \n \nLoans & \nContingent\nOther\nNon \nFinancial \nTotal\nNotes\nTotal\nOther \nBalances\nAdvances\nAssets\nAssets\nAssets\nAssets \n&\nBalances\nBalances \nBalances\n Liquid\nwith RBZ\nCoin\nwith\nwith Other \nat\nTrade\nTreasury\nAgric PEs\n Assets\nat Banks\nRBZ\nBanks\nForeign \nBanks\nBills\nBills\n2009\n158.3\n106.3\n7.3\n423.6\n36.2\n0.0\n0.0\n731.8\n91.1\n523.5\n192.3\n47.3\n217.8\n1,803.8\n2010\n206.3\n136.2\n12.0\n420.5\n88.8\n0.0\n0.0\n863.7\n115.2\n1,080.0\n303.5\n125.1\n222.0\n2,709.4\n2011\n256.0\n225.3\n92.0\n361.7\n140.6\n0.0\n0.0\n1,075.7\n119.8\n1,952.0\n244.2\n127.6\n310.5\n3,829.8\n2012\n375.9\n374.7\n131.1\n219.7\n190.8\n8.2\n0.0\n1,300.4\n27.7\n2,631.8\n375.3\n250.7\n389.0\n4,975.0\n2013\n354.8\n367.8\n135.5\n287.3\n199.9\n118.0\n6.6\n1,469.9\n28.4\n2,799.5\n490.8\n259.5\n347.6\n5,395.7\n2013:Jan\n323.4\n378.5\n103.4\n182.3\n247.8\n0.0\n0.0\n1,235.5\n52.2\n2,694.9\n386.1\n205.7\n386.7\n4,961.1\nFeb\n292.2\n357.7\n120.5\n234.6\n239.9\n0.0\n0.0\n1,244.9\n27.7\n2,289.3\n328.8\n208.0\n388.3\n4,887.0\nMar\n271.6\n345.7\n196.1\n198.9\n265.3\n0.0\n0.0\n1,277.6\n26.1\n2,715.8\n367.2\n228.8\n388.0\n5,003.5\nApr\n263.8\n383.6\n201.1\n272.9\n289.9\n75.3\n5.2\n1,491.7\n26.3\n2,595.8\n341.3\n207.0\n382.1\n5,044.2\nMay\n250.9\n400.9\n198.2\n296.7\n253.5\n75.4\n5.3\n1,480.8\n25.8\n2,673.2\n389.8\n208.0\n382.9\n5,160.5\nJun\n227.2\n416.4\n171.9\n257.5\n271.8\n75.5\n5.3\n1,425.8\n26.0\n2,698.3\n364.1\n217.8\n384.6\n5,116.5\nJul\n266.5\n352.8\n164.2\n266.1\n263.8\n110.2\n6.4\n1,429.9\n26.5\n2,701.3\n337.1\n229.8\n387.0\n5,111.7\nAug\n322.8\n277.9\n136.4\n242.5\n237.8\n61.1\n6.4\n1,285.0\n26.2\n2,813.0\n367.0\n218.3\n385.2\n5,094.7\nSept\n334.1\n336.0\n178.0\n327.8\n226.3\n111.5\n6.0\n1,519.7\n26.9\n2,773.3\n298.8\n234.7\n386.4\n5,239.8\nOct\n379.4\n387.5\n137.1\n219.7\n260.9\n99.4\n5.0\n1,489.0\n17.3\n2,809.1\n316.7\n257.3\n371.5\n5,260.9\nNov\n333.3\n312.7\n160.2\n197.1\n261.1\n108.6\n6.5\n1,379.5\n26.6\n2,789.7\n291.3\n235.4\n369.8\n5,092.3\nDec\n354.8\n367.8\n135.5\n287.3\n199.9\n118.0\n6.6\n1,469.9\n28.4\n2,799.5\n490.8\n259.5\n347.6\n5,395.7\n2014:Jan\n356.9\n395.3\n134.1\n253.1\n153.0\n119.2\n5.4\n1,417.0\n27.9\n2,866.4\n516.1\n362.2\n353.9\n5,543.5\nFeb\n334.3\n387.0\n130.5\n285.0\n195.0\n193.2\n5.4\n1,530.0\n32.8\n2,718.1\n534.5\n502.9\n351.1\n5,669.5\nMar\n304.6\n354.1\n147.4\n280.3\n165.9\n255.2\n5.4\n1,512.9\n28.7\n2,737.9\n522.7\n538.8\n349.7\n5,690.7\nApr\n353.3\n367.8\n154.4\n274.9\n205.7\n247.0\n5.4\n1,608.4\n32.5\n2,844.6\n534.1\n345.3\n348.6\n5,713.6\nMay\n327.8\n421.1\n120.5\n372.8\n211.5\n241.7\n5.4\n1,700.6\n27.5\n2,836.8\n591.4\n366.2\n347.1\n5,869.6\nJun\n347.1\n404.7\n166.4\n338.1\n198.0\n261.9\n0.0\n1,716.1\n16.2\n2,863.2\n607.8\n362.9\n346.1\n5,912.6\nTABLE 2.1: COMMERCIAL BANKS - ASSETS\nUS$ Millions\nLiquid Assets\nSecurities\n \n \nS6 \n \n \n \nDeposits\nCapital\nand\nOf which\nEnd of\nDemand\nSavings and \nShort-term\nLong-term\nTotal\nForeign \nLiabilities\nRBZ\nOther Banks\nReserves\nContingent\nOther\nTotal\nLiabilities to \nthe \n Deposits\nLiabilities\nLiabilities\nLiabilities \nPublic\n2009\n996.3\n140.3\n54.4\n1,191.0\n54.3\n0.0\n6.4\n230.3\n192.3\n129.4\n1,803.8\n1,191.0\n2010\n1,321.3\n424.5\n111.1\n1,856.9\n116.9\n0.0\n19.4\n275.3\n303.5\n137.4\n2,709.4\n1,856.9\n2011\n1,800.2\n673.4\n213.9\n2,687.5\n127.8\n0.0\n53.6\n411.6\n244.2\n304.9\n3,829.7\n2,687.5\n2012\n2,090.5\n922.3\n507.5\n3,520.4\n212.5\n0.0\n30.8\n618.5\n375.3\n222.5\n4,980.0\n3,520.4\n2013\n1,980.4\n813.6\n517.1\n3,311.1\n614.0\n0.0\n65.0\n730.9\n490.8\n184.0\n5,395.7\n3,311.1\n2013\nJan\n2,032.2\n866.1\n552.4\n3,450.7\n266.1\n0.0\n27.8\n623.9\n386.1\n206.5\n4,961.1\n3,450.7\nFeb\n1,987.8\n933.3\n491.5\n3,412.5\n258.1\n0.0\n32.4\n631.9\n328.8\n223.3\n4,887.0\n3,417.9\nMar\n1,960.1\n976.3\n451.1\n3,387.3\n290.9\n0.0\n32.8\n687.7\n367.2\n237.6\n5,003.5\n3,387.3\nApr\n2,074.5\n1,046.3\n379.5\n3,500.3\n247.6\n0.0\n37.9\n667.2\n341.3\n249.8\n5,044.2\n3,500.3\nMay\n2,066.0\n913.0\n479.9\n3,459.0\n346.5\n0.0\n81.8\n674.4\n389.8\n209.0\n5,160.4\n3,459.0\nJun\n2,013.9\n919.6\n298.9\n3,232.4\n553.0\n0.0\n74.1\n702.3\n364.1\n190.6\n5,116.5\n3,232.4\nJul\n2,054.1\n916.2\n245.9\n3,216.2\n578.3\n0.0\n77.5\n699.7\n337.1\n202.9\n5,111.7\n3,216.2\nAug\n2,017.4\n879.5\n253.2\n3,150.1\n608.2\n0.0\n63.8\n694.9\n367.0\n210.8\n5,094.7\n3,150.1\nSep\n2,082.1\n899.3\n294.5\n3,275.8\n674.6\n0.0\n74.0\n708.8\n298.8\n207.7\n5,239.8\n3,275.8\nOct\n2,125.9\n880.0\n349.3\n3,355.2\n611.4\n0.0\n68.5\n703.0\n316.7\n206.0\n5,260.9\n3,355.2\nNov\n1,953.4\n861.2\n371.6\n3,186.2\n627.8\n0.0\n75.8\n689.7\n291.3\n221.6\n5,092.3\n3,186.2\nDec\n1,980.4\n813.6\n517.1\n3,311.1\n614.0\n0.0\n65.0\n730.9\n490.8\n184.0\n5,395.7\n3,311.1\n2014\nJan\n2,153.6\n802.7\n403.5\n3,359.8\n661.3\n0.0\n55.9\n592.9\n516.1\n357.5\n5,543.5\n3,359.8\nFeb\n2,111.8\n878.8\n494.6\n3,485.2\n630.0\n0.0\n51.1\n609.5\n534.5\n359.0\n5,669.5\n3,485.2\nMar\n2,156.8\n919.6\n454.2\n3,530.6\n635.5\n0.0\n44.8\n596.4\n522.7\n360.7\n5,690.7\n3,530.6\nApr\n2,267.5\n958.3\n435.7\n3,661.5\n553.5\n0.0\n17.0\n595.0\n534.1\n352.4\n5,713.6\n3,661.5\nMay\n2,294.9\n975.8\n451.7\n3,722.4\n585.0\n0.0\n13.7\n591.1\n591.4\n366.1\n5,869.6\n3,722.4\nJun\n2,248.9\n989.8\n506.1\n3,744.8\n543.8\n0.0\n48.3\n591.2\n607.8\n376.7\n5,912.6\n3,744.8\nTABLE 2.2: COMMERCIAL BANKS - LIABILITIES\nUS$ Millions\nAmounts Owing to\n \n \nS7 \n \n \n \nEnd of\nNotes\n&\nBalances\nBalances \nBalances\nTotal\nCoin\nwith\nwith Other \nat\nTrade\nTreasury\nLiquid \nOther \nBalances\nLoans & \nContingent\nOther\nNon \nFinancial \nTotal\nat Banks\nRBZ\nBanks\nForeign \nBanks\nBills\nBills\n Assets\nwith RBZ\nAdvances\nAssets\nAssets\nAssets\nAssets \n2009\n7.1\n5.9\n17.7\n9.9\n42.9\n0.0\n83.6\n0.0\n51.3\n17.0\n23.6\n46.0\n221.4\n2010\n15.5\n10.4\n69.3\n31.7\n138.8\n0.0\n265.6\n0.0\n211.7\n62.3\n69.1\n42.1\n650.9\n2011\n3.6\n8.3\n2.4\n0.7\n62.0\n0.0\n77.1\n0.0\n216.5\n83.1\n58.5\n28.9\n464.1\n2012\n2.2\n1.0\n26.1\n1.4\n3.7\n0.0\n34.4\n0.0\n239.2\n37.2\n69.1\n22.3\n402.3\n2013\n1.1\n0.5\n0.1\n0.4\n2.5\n0.0\n4.6\n0.0\n232.7\n35.5\n29.2\n40.5\n342.5\n2013\nJan\n1.5\n2.7\n28.6\n0.0\n3.4\n0.0\n36.2\n0.0\n236.7\n34.8\n60.2\n29.1\n397.0\nFeb\n4.7\n1.5\n18.4\n0.0\n4.5\n0.0\n29.2\n0.0\n245.7\n34.8\n63.9\n28.9\n398.2\nMar\n2.5\n1.1\n7.3\n-3.1\n1.2\n0.0\n8.9\n0.0\n260.3\n34.2\n50.4\n28.8\n382.6\nApr\n2.7\n1.3\n20.1\n-1.9\n1.2\n0.0\n23.4\n0.0\n254.9\n34.2\n51.7\n27.7\n392.0\nMay\n2.4\n4.1\n18.6\n-2.4\n4.5\n0.0\n27.3\n0.0\n253.4\n34.6\n63.0\n12.7\n391.0\nJun\n2.4\n3.6\n7.9\n1.1\n9.1\n0.0\n24.1\n0.0\n260.3\n34.6\n51.4\n35.2\n405.6\nJul\n1.9\n1.3\n2.8\n2.2\n3.4\n0.0\n11.6\n0.0\n264.0\n34.8\n51.7\n35.5\n397.6\nAug\n1.4\n1.7\n0.4\n0.6\n3.4\n0.0\n7.4\n0.0\n265.6\n34.5\n45.5\n37.3\n390.3\nSep\n1.2\n0.8\n0.0\n0.3\n3.4\n0.0\n5.7\n0.0\n233.7\n35.8\n46.6\n38.6\n360.4\nOct\n0.9\n0.5\n0.4\n0.6\n2.5\n0.0\n4.8\n0.0\n234.8\n35.6\n41.3\n38.7\n355.2\nNov\n0.4\n0.6\n0.1\n0.2\n2.5\n0.0\n3.9\n0.0\n231.9\n35.5\n39.6\n38.3\n349.2\nDec\n1.1\n0.5\n0.1\n0.4\n2.5\n0.0\n4.6\n0.0\n232.7\n35.5\n29.2\n40.5\n342.5\n2014\nJan\n0.1\n0.5\n0.0\n0.2\n1.8\n0.0\n2.6\n0.0\n81.3\n10.0\n23.5\n34.7\n152.1\nFeb\n0.2\n0.4\n0.1\n0.1\n1.8\n0.0\n2.5\n0.0\n77.6\n9.0\n24.1\n34.6\n147.9\nMar\n0.1\n0.1\n0.1\n0.1\n1.6\n0.0\n2.0\n0.0\n53.2\n8.7\n21.8\n32.5\n118.1\nApr\n0.1\n0.4\n0.2\n0.3\n1.6\n0.0\n2.6\n0.0\n75.2\n8.5\n22.2\n32.4\n140.9\nMay\n0.2\n0.4\n0.0\n0.1\n0.3\n0.0\n0.9\n0.0\n68.7\n0.1\n14.6\n30.3\n114.6\nJun\n0.2\n0.2\n0.1\n0.1\n0.6\n0.0\n1.2\n0.0\n66.8\n0.1\n14.7\n29.6\n112.4\nTABLE 2.3 : ACCEPTING HOUSES - ASSETS\nUS$ Millions\nLiquid Assets\n \n \nS8 \n \n \n \nDeposits\nCapital\nOf which\nTotal\nand\nContingent\nOther\nTotal\nLiabilities \nto the \nEnd of\nDemand\nSavings and \nShort-term\nLong-term\n Deposits\nForeign \nLiabilities\nRBZ\nOther \nBanks\nReserves\nLiabilities\nLiabilities\nLiabilities \nPublic\n2009\n36.2\n75.4\n9.3\n120.9\n0.0\n0.0\n12.3\n58.8\n17.0\n12.4\n221.5\n120.9\n2010\n141.0\n257.4\n59.3\n457.8\n25.1\n0.0\n0.0\n79.6\n62.3\n26.1\n650.9\n457.8\n2011\n109.1\n75.4\n60.5\n245.0\n44.9\n0.0\n0.0\n22.5\n83.1\n68.6\n464.1\n245.0\n2012\n108.1\n67.9\n44.2\n220.2\n44.5\n0.0\n2.7\n-60.9\n37.2\n158.5\n402.3\n220.2\n2013\n134.5\n56.4\n6.9\n197.8\n48.9\n0.0\n1.2\n-127.6\n35.5\n186.7\n342.5\n197.8\n2013\nJan\n106.9\n91.7\n21.3\n220\n44.8\n0.0\n2.7\n-72.4\n34.8\n167.2\n397.0\n220.0\nFeb\n102.8\n66.0\n55.7\n224.5\n45.3\n0.0\n2.7\n-77.8\n34.8\n168.7\n398.2\n224.5\nMar\n104.3\n62.3\n52.8\n219.5\n45.8\n0.0\n1.2\n-97.3\n34.2\n179.3\n382.6\n219.5\nApr\n107.3\n64.6\n56.3\n228.3\n45.4\n0.0\n1.2\n-98.1\n34.2\n181.1\n392.0\n228.3\nMay\n112.2\n67.1\n54.4\n233.6\n46.7\n0.0\n1.2\n-99.4\n34.6\n174.3\n391.0\n233.6\nJun\n114.6\n56.2\n52.3\n223.1\n46.7\n0.0\n1.2\n-91.2\n34.6\n191.2\n405.6\n223.1\nJul\n111.3\n82.7\n27.0\n220.9\n47.1\n0.0\n1.2\n-94.1\n34.8\n187.8\n397.6\n220.9\nAug\n109.5\n80.6\n25.2\n215.2\n47.5\n0.0\n1.2\n-101.7\n34.5\n193.6\n390.3\n215.2\nSep\n111.2\n82.6\n19.0\n212.8\n47.9\n0.0\n1.2\n-114.9\n35.8\n177.8\n360.4\n212.8\nOct\n112.5\n80.4\n14.9\n207.8\n48.3\n0.0\n1.2\n-114.3\n35.6\n176.7\n355.2\n207.8\nNov\n122.6\n59.7\n20.0\n202.3\n48.2\n0.0\n1.2\n-118.2\n35.5\n180.2\n349.2\n202.3\nDec\n134.5\n56.4\n6.9\n197.8\n48.9\n0.0\n1.2\n-127.6\n35.5\n186.7\n342.5\n197.8\n2014\nJan\n36.8\n57.7\n5.7\n100.1\n11.7\n0.0\n0.0\n0.7\n10.0\n29.6\n152.1\n100.1\nFeb\n47.6\n48.3\n0.0\n95.8\n11.7\n0.0\n0.0\n-10.9\n9.0\n42.3\n147.9\n95.8\nMar\n41.0\n55.8\n0.0\n96.9\n12.0\n0.0\n0.0\n-17.7\n8.7\n18.4\n118.1\n96.9\nApr\n57.4\n40.3\n0.0\n97.7\n12.2\n0.0\n0.0\n-19.8\n8.5\n42.4\n140.9\n97.7\nMay\n42.8\n34.6\n0.0\n77.4\n0.0\n0.0\n0.0\n4.7\n0.1\n32.5\n114.6\n77.4\nJun\n42.8\n33.2\n0.0\n76.0\n0.0\n0.0\n0.0\n2.3\n0.1\n33.7\n112.3\n76.0\nTABLE 2.4: ACCEPTING HOUSES - LIABILITIES\nUS$ Millions\nAmounts Owing to\n \n \nS9 \n \n \n \nLiquid \nAssets\nNotes \nBalances \nTrade\nTreasury\nTotal\nMortgage\nOther\nOther\nNon \nFinancial \nTotal\nEnd of\n&\nwith Other \nBills\nBills\nLiquid \nAdvances\nAdvances\nAssets\nAssets\n Assets\nCoin\nBanks\n Assets\nat Banks\n2009\n6.7\n11.1\n0\n0\n17.8\n26.4\n3.2\n8.2\n86.4\n142.0\n2010\n11.8\n73.3\n0.0\n0.0\n85.1\n65.0\n24.0\n8.7\n97.3\n280.1\n2011\n17.1\n76.7\n0.0\n0.0\n93.8\n199.5\n83.4\n19.0\n109.4\n505.1\n2012\n29.2\n133.2\n0.0\n163.4\n325.9\n278.1\n118.3\n30.2\n126.9\n716.9\n2013\n34.8\n158.8\n0.0\n40.0\n233.6\n381.5\n127.7\n55.2\n123.0\n920.9\n2013\nJan\n20.4\n125.5\n0.2\n0.0\n146.1\n283.2\n118.5\n36.1\n121.4\n705.3\nFeb\n20.2\n164.3\n0.0\n0.0\n84.5\n291.8\n117.9\n35.3\n121.4\n734.2\nMar\n18.8\n129.1\n0.2\n20.0\n168.1\n291.4\n116.9\n39.5\n121.4\n737.3\nApr\n16.9\n159.8\n0.2\n20.2\n197.2\n294.8\n115.5\n39.5\n122.1\n769.1\nMay\n30.2\n179.6\n0.2\n20.3\n230.0\n307.3\n120.3\n40.4\n121.9\n820.0\nJun \n28.6\n178.8\n0.0\n20.0\n227.3\n314.2\n122.4\n44.6\n121.8\n830.3\nJul\n26.1\n207.4\n0.0\n20.0\n253.5\n312.4\n123.1\n48.6\n121.6\n859.2\nAug\n34.7\n204.1\n0.0\n20.0\n258.8\n320.6\n123.0\n46.4\n124.1\n872.9\nSep\n36.4\n204.9\n0.0\n20.0\n261.3\n353.4\n122.7\n52.2\n124.6\n914.2\nOct\n39.3\n186.8\n0.0\n20.0\n246.1\n358.4\n128.2\n51.8\n122.4\n906.9\nNov\n39.7\n163.1\n0.0\n40.0\n242.8\n361.6\n135.8\n43.6\n122.9\n906.7\nDec\n34.8\n158.8\n0.0\n40.0\n233.6\n381.5\n127.7\n55.2\n123.0\n920.9\n2014\nJan\n30.9\n147.5\n0.2\n40.0\n218.6\n384.5\n136.4\n64.4\n125.3\n929.1\nFeb\n30.2\n165.0\n0.2\n40.0\n235.3\n385.8\n132.0\n65.4\n125.4\n943.9\nMar\n47.5\n166.2\n0.2\n40.0\n253.8\n390.4\n132.1\n68.8\n125.0\n970.1\nApr\n45.2\n161.0\n0.2\n40.0\n246.5\n401.8\n132.4\n76.6\n124.7\n981.9\nMay\n47.7\n190.7\n0.2\n40.0\n278.6\n394.0\n147.0\n82.7\n124.3\n1,026.7\nJun\n39.5\n187.9\n0.0\n40.0\n267.4\n400.0\n150.4\n84.0\n124.4\n1,026.1\nTABLE 2.5: BUILDING SOCIETIES- ASSETS\nUS$ Millions\n \n \nS10 \n \n \n \nCapital\nO f which\nTotal\nand\nO ther\nTotal\nLiabilities \nto the \nEnd of\nSavings \nand Short-\nterm\nLong-term\n Deposits\nReserves\nLiabilities\n Liabilities\nPublic\n2009\n34.6\n9.8\n44.4\n89.1\n8.5\n142.0\n44.4\n2010\n92.3\n52.5\n144.9\n101.9\n33.4\n280.1\n144.9\n2011\n186.4\n100.7\n287.1\n121.3\n96.7\n505.1\n287.0\n2012\n255.8\n184.6\n440.3\n177.8\n28.1\n716.9\n440.3\n2013\n370.3\n197.3\n567.6\n219.6\n133.9\n921.0\n567.6\n2013\nJan\n230.0\n192.8\n422.8\n180.3\n102.3\n705.3\n422.8\nFeb\n255.7\n194.2\n449.9\n183.7\n100.6\n734.2\n449.9\nMar\n250.6\n203.9\n454.5\n187.2\n95.7\n737.3\n454.5\nApr\n252.9\n226.6\n479.5\n190.6\n22.3\n769.3\n479.5\nMay\n315.3\n212.0\n527.4\n193.3\n23.4\n820.0\n527.4\nJun \n309.0\n222.6\n531.6\n198.3\n100.4\n830.3\n531.6\nJul\n339.1\n222.8\n561.9\n202.0\n95.3\n859.2\n561.9\nAug\n298.4\n270.1\n568.4\n206.3\n98.2\n872.9\n568.4\nSep\n336.1\n246.9\n583.0\n209.2\n122.0\n914.2\n583.0\nOct\n310.9\n264.9\n575.8\n212.0\n119.4\n907.2\n575.8\nNov\n328.9\n244.3\n573.1\n214.8\n118.8\n906.7\n573.1\nDec\n370.3\n197.3\n567.6\n219.6\n133.9\n921.0\n567.6\n2014\nJan\n313.9\n253.1\n567.0\n225.9\n136.2\n929.1\n567.0\nFeb\n318.7\n264.4\n583.1\n228.6\n132.2\n943.9\n583.1\nMar\n374.6\n234.6\n609.2\n231.4\n129.5\n970.1\n609.2\nApr\n358.4\n262.7\n621.1\n234.0\n126.8\n981.9\n621.1\nMay\n436.2\n233.2\n669.4\n238.0\n119.1\n1,026.7\n669.4\nJun\n440.1\n212.2\n652.3\n243.1\n131.0\n1,026.1\n652.3\nTABLE 2.6 : BUILDING SOCIETIES - LIABILITIES\nUS$ Millions \nDeposits\n \n \nS11 \n \n \n \nRBZ \nDemand \nDeposits\nComm. \nBanks Dem. \nDeposits\nMerchant \nBanks Dem. \nDeposits\nM1\nComm. \nBanks \nSavings \nDeposits\nBuilding Soc. \nSavings \nDeposits\nP O S B \nSavings \nDeposits\nComm. Banks U-\n30 Day \nDeposits\nMerchant \nBanks U-30 \nDay Deposits\nBuilding Soc. \nU- 30 Day \nDeposits\nM2\nComm. Banks \nO-30 Day \nDeposits\nMerchant \nBanks O-30 \nDay \nDeposits\nBuilding \nSoc. O- 30 \nDay \nDeposits\nBuilding Soc. \nClass C \nDeposits\nBuilding \nSoc. Other \nShare \nDeposits\nP O S B \nTime \nDeposits\nM3\n2009\n185.2\n996,286.9\n36,033.8\n1,032,505.9\n94,905.0\n32,364.7\n13,702.2\n45,361.6\n73,354.2\n2,894.1\n1,295,087.7\n54,412.4\n9,250.1\n9,776.3\n1,500.0\n6,332.8\n4,887.9\n1,381,247.2\n2010\n186.8\n1,230,648.3\n141,200.0\n1,372,035.1\n194,400.4\n65,394.5\n28,600.5\n197,255.1\n241,039.3\n26,946.3\n2,125,671.0\n77,607.4\n53,073.5\n52,544.3\n0.0\n10,141.6\n8,570.5\n2,327,608.3\n2011\n80.5\n1,738,095.6\n106,850.7\n1,845,026.8\n150,648.2\n123,501.5\n44,220.9\n505,981.7\n65,287.0\n62,893.7\n2,797,559.8\n131,736.8\n52,440.1\n100,654.2\n0.0\n10,141.6\n7,869.0\n3,100,401.5\n2012\n80.8\n1,981,218.7\n108,094.7\n2,089,394.2\n253,471.9\n180,152.6\n54,893.7\n613,008.0\n67,930.5\n65,572.4\n3,324,423.3\n314,380.7\n44,191.4\n184,561.2\n0.0\n10,141.6\n8,973.9\n3,886,672.1\n2013\n71.9\n1,825,413.5\n134,494.8\n1,959,980.2\n281,785.8\n204,200.7\n62,044.0\n489,493.1\n56,379.8\n155,932.2\n3,209,815.8\n496,391.7\n6,900.3\n197,343.9\n0.0\n11,266.6\n10,606.9\n3,932,325.2\n2013\nJan\n78.6\n1,924,517.4\n106,935.2\n2,031,531.2\n193,007.6\n159,093.7\n55,832.5\n632,215.7\n91,671.2\n60,885.9\n3,224,237.8\n351,356.6\n21,339.0\n192,823.3\n0.0\n10,141.6\n8,497.2\n3,808,395.5\nFeb\n78.3\n1,875,465.4\n102,797.7\n1,978,341.4\n192,683.5\n168,605.4\n56,274.2\n708,500.6\n65,975.9\n77,091.9\n3,247,472.9\n297,613.9\n55,714.0\n194,226.7\n0.0\n10,141.6\n8,447.9\n3,813,616.9\nMar\n77.3\n1,860,664.0\n104,281.4\n1,965,022.7\n201,459.2\n168,484.1\n57,860.7\n734,849.5\n62,324.3\n82,098.1\n3,272,098.6\n249,558.5\n52,841.7\n203,912.9\n0.0\n11,266.6\n8,845.8\n3,798,524.1\nApr\n78.6\n1,979,220.0\n107,324.1\n2,086,622.6\n194,873.4\n170,975.7\n55,236.9\n786,076.0\n64,604.1\n81,944.4\n3,440,333.1\n223,799.1\n56,349.4\n226,550.8\n0.0\n11,266.6\n8,443.5\n3,966,742.5\nMay\n74.5\n1,932,968.1\n112,173.4\n2,045,215.9\n221,622.3\n192,634.8\n56,544.5\n637,041.1\n67,104.2\n122,672.1\n3,342,834.9\n387,930.6\n54,361.5\n212,044.5\n0.0\n11,266.5\n9,703.5\n4,018,141.5\nJun\n73.0\n1,874,568.0\n114,560.5\n1,989,201.5\n229,386.7\n189,753.8\n60,117.8\n629,544.6\n56,223.1\n119,217.4\n3,273,444.9\n268,082.1\n52,329.5\n222,591.8\n0.0\n11,266.6\n10,492.4\n3,838,207.3\nJul\n73.5\n1,926,968.4\n111,261.1\n2,038,303.0\n201,667.8\n195,606.6\n60,162.5\n663,617.3\n82,650.4\n121,325.5\n3,363,333.0\n219,826.9\n27,019.2\n222,795.8\n0.0\n11,266.6\n10,680.2\n3,854,921.7\nAug\n71.9\n1,901,793.3\n109,449.6\n2,011,314.8\n187,394.4\n189,953.1\n51,322.2\n643,559.0\n80,569.1\n99,842.7\n3,263,955.2\n223,258.1\n25,199.0\n264,539.8\n0.0\n11,266.6\n8,018.0\n3,796,236.7\nSept\n72.8\n1,952,024.0\n111,153.9\n2,063,250.8\n227,599.9\n191,553.5\n58,974.0\n606,360.8\n82,581.6\n138,431.2\n3,368,751.9\n257,854.4\n19,024.4\n242,907.0\n0.0\n11,266.6\n10,855.2\n3,910,659.4\nOct\n73.3\n1,971,838.8\n112,536.2\n2,084,448.3\n209,966.7\n187,410.7\n50,457.7\n614,427.6\n80,368.8\n113,495.4\n3,340,575.2\n308,773.8\n14,876.1\n264,867.2\n0.0\n11,266.6\n11,324.0\n3,951,682.9\nNov\n72.6\n1,821,288.9\n122,639.2\n1,944,000.7\n201,724.6\n200,415.2\n60,845.4\n605,429.9\n59,721.1\n118,360.9\n3,190,497.8\n328,511.0\n19,965.3\n244,283.7\n0.0\n11,266.6\n12,586.1\n3,807,110.5\nDec\n71.9\n1,825,413.5\n134,494.8\n1,959,980.2\n281,785.8\n204,200.7\n62,044.0\n489,493.1\n56,379.8\n155,932.2\n3,209,815.8\n496,391.7\n6,900.3\n197,343.9\n0.0\n11,266.6\n10,606.9\n3,932,325.2\n2014\nJan\n69.7\n2,039,955.9\n36,792.2\n2,076,817.8\n215,665.0\n196,806.6\n58,314.5\n552,134.9\n47,277.8\n107,130.3\n3,254,146.9\n352,689.2\n5,665.1\n253,060.8\n0.0\n11,266.6\n11,816.7\n3,888,645.3\nFeb\n71.1\n1,974,493.8\n47,555.9\n2,022,120.8\n230,541.1\n195,707.7\n58,920.4\n596,106.0\n48,250.7\n112,927.5\n3,264,574.2\n468,960.6\n0.0\n264,395.8\n0.0\n11,266.6\n12,582.4\n4,021,779.6\nMar\n71.5\n2,033,715.1\n41,037.1\n2,074,823.7\n237,243.6\n202,243.6\n60,801.9\n626,443.7\n48,387.9\n156,466.8\n3,406,411.2\n426,625.1\n0.0\n234,625.6\n0.0\n11,266.6\n14,314.8\n4,093,243.3\nApr\n71.5\n2,130,063.2\n57,346.1\n2,187,480.8\n233,539.2\n228,310.8\n66,479.0\n661,815.1\n40,336.6\n115,037.7\n3,532,999.2\n408,961.7\n0.0\n262,711.8\n0.0\n11,266.6\n14,519.3\n4,230,458.6\nMay\n71.9\n2,173,283.2\n42,779.8\n2,216,134.9\n223,445.3\n241,398.4\n64,831.6\n685,132.2\n34,572.1\n164,622.3\n3,630,137.0\n438,431.5\n0.0\n233,243.8\n0.0\n11,266.6\n12,651.5\n4,325,730.4\nJun\n96.6\n2,120,102.4\n42,779.8\n2,162,978.8\n253,857.5\n234,278.6\n68,218.1\n669,439.9\n33,202.1\n175,432.1\n3,597,407.0\n489,568.8\n0.0\n212,224.9\n0.0\n11,266.6\n13,098.6\n4,323,565.9\nTABLE 3.1: MONETARY AGGREGATES\nUS$ '000s\n \n \nS12 \n \n \n \n \nPeriod\nNET FOREIGN \nASSETS \nTotal Foreign \nAssets\nLiabilities\nRBZ\nDMBs\nOBIs\nNET \nDOMESTIC \nASSETS \nDOMESTIC \nCREDIT\nClaims on \nGovernment \n(net) \nRBZ\nDMBs\nOBIs\nClaims on Public \nEnterprises \nClaims on \nPrivate Sector\nOTHER ITEMS \n(NET) \nBROAD \nMONEY (M3) \n2009\n-278,784.5\n1,072,911.5\n-1,351,696.0\n1,295,065.8\n56,605.4\n24.8\n1,660,033.9\n723,950.3\n-1,857.6\n-1,857.6\n0.0\n0.0\n25,498.0\n700,309.9\n936,083.6\n1,381,249.4\n2010\n-140,294.0\n1,174,644.6\n-1,314,938.5\n1,153,432.9\n161,505.6\n0.0\n2,467,902.3\n1,694,451.8\n-5,656.9\n-4,729.2\n0.2\n-927.9\n22,907.5\n1,677,201.2\n773,450.5\n2,327,608.3\n2011\n-296,486.9\n1,055,987.4\n-1,352,474.4\n1,152,069.8\n174,712.4\n25,692.2\n3,396,888.3\n2,798,126.8\n-1,834.8\n-1,834.8\n0.0\n0.0\n44,924.5\n2,755,037.2\n598,761.5\n3,100,401.4\n2012\n-435,528.8\n1,089,808.5\n-1,525,337.3\n1,149,161.2\n352,118.4\n24,057.8\n4,322,201.0\n3,788,468.5\n176,058.4\n-11,097.8\n185,922.5\n1,233.6\n51,716.9\n3,560,693.2\n533,732.4\n3,886,672.1\n2013\n-810,172.3\n1,042,166.0\n-1,852,338.3\n1,150,150.8\n671,435.2\n30,752.3\n4,742,497.4\n4,068,697.5\n357,997.4\n-1,182.3\n319,016.2\n40,163.5\n60,645.0\n3,650,055.2\n673,799.9\n3,932,325.1\n2013\nJan\n-485,643.4\n994,812.7\n-1,480,456.0\n1,149,023.6\n311,214.1\n20,218.4\n4,294,038.7\n3,777,967.9\n166,842.3\n-1,225.8\n167,834.5\n233.6\n52,261.1\n3,558,864.5\n516,070.8\n3,808,395.4\nFeb\n-478,669.1\n988,575.6\n-1,467,244.7\n1,141,623.5\n303,476.1\n22,145.2\n4,292,286.0\n3,781,756.5\n153,164.0\n-1,192.4\n154,122.7\n233.6\n53,708.5\n3,574,884.1\n510,529.5\n3,813,616.9\nMar\n-627,094.5\n867,399.6\n-1,494,494.1\n1,135,073.4\n337,091.1\n22,329.6\n4,425,618.6\n3,845,110.1\n170,638.1\n-1,179.6\n151,543.0\n20,274.7\n54,091.4\n3,620,380.6\n580,508.5\n3,798,524.1\nApr\n-477,210.6\n983,189.5\n-1,460,400.2\n1,140,521.7\n293,394.4\n26,484.0\n4,443,953.2\n3,808,385.3\n180,007.9\n-1,180.8\n160,538.4\n20,650.2\n58,973.6\n3,569,403.8\n635,567.9\n3,966,742.5\nMay\n-488,616.3\n1,065,690.2\n-1,554,306.5\n1,134,105.5\n393,575.8\n26,625.2\n4,506,758.0\n3,871,013.0\n212,221.9\n-1,179.7\n192,880.2\n20,521.4\n63,604.9\n3,595,186.2\n635,745.0\n4,018,141.5\nJun\n-770,401.9\n994,502.1\n-1,764,904.0\n1,138,062.0\n600,126.4\n26,715.6\n4,608,609.2\n3,936,046.1\n206,189.6\n-1,828.4\n187,784.4\n20,233.6\n63,628.7\n3,666,227.8\n672,563.1\n3,838,207.3\nJul\n-822,415.5\n967,794.1\n-1,790,209.6\n1,143,126.7\n625,430.1\n21,652.8\n4,677,337.2\n3,966,266.5\n232,272.7\n-3,487.6\n215,526.7\n20,233.6\n62,174.3\n3,671,819.5\n711,070.7\n3,854,921.7\nAug\n-884,443.1\n931,989.0\n-1,816,432.1\n1,139,865.9\n655,728.1\n20,838.1\n4,680,679.8\n3,988,814.6\n234,118.0\n-1,242.0\n215,126.4\n20,233.6\n60,363.0\n3,694,333.6\n691,865.2\n3,796,236.7\nSept\n-814,488.4\n1,075,508.0\n-1,889,996.4\n1,146,634.4\n722,521.0\n20,841.0\n4,725,147.8\n4,006,290.9\n228,614.8\n-1,196.6\n209,577.8\n20,233.6\n59,809.8\n3,717,866.2\n718,856.9\n3,910,659.4\nOct\n-850,336.4\n994,326.1\n-1,844,662.6\n1,150,527.4\n673,156.2\n20,979.0\n4,802,019.3\n4,079,215.4\n299,686.0\n-1,468.9\n280,921.3\n20,233.6\n59,424.2\n3,720,105.1\n722,804.0\n3,951,682.9\nNov\n-1,001,798.9\n856,654.9\n-1,858,453.8\n1,147,979.0\n689,480.9\n20,993.9\n4,808,909.2\n4,091,310.4\n331,797.8\n-1,188.2\n292,752.3\n40,233.6\n60,844.8\n3,698,667.8\n717,598.9\n3,807,110.4\nDec\n-810,172.3\n1,042,166.0\n-1,852,338.3\n1,150,150.8\n671,435.2\n30,752.3\n4,742,497.4\n4,068,697.5\n357,997.4\n-1,182.3\n319,016.2\n40,163.5\n60,645.0\n3,650,055.2\n673,799.9\n3,932,325.1\n2014\nJan\n-846,622.1\n1,009,920.7\n-1,856,542.9\n1,148,693.8\n681,744.6\n26,104.5\n4,735,267.5\n3,985,906.5\n358,798.3\n-1,181.7\n319,816.4\n40,163.5\n60,553.0\n3,566,555.3\n749,360.9\n3,888,645.3\nFeb\n-799,433.7\n1,032,518.9\n-1,831,952.5\n1,151,300.5\n655,537.7\n25,114.4\n4,821,213.2\n4,114,186.0\n426,507.5\n-1,181.8\n387,525.7\n40,163.5\n60,689.3\n3,626,989.2\n707,027.2\n4,021,779.6\nMar\n-816,838.4\n1,021,388.5\n-1,838,226.8\n1,152,604.9\n660,898.1\n24,723.8\n4,910,777.6\n4,180,109.0\n490,233.2\n-1,179.6\n451,249.2\n40,163.5\n75,528.0\n3,610,347.9\n730,668.6\n4,093,939.2\nApr\n-695,843.6\n1,063,604.4\n-1,759,448.0\n1,155,463.3\n579,093.6\n24,891.2\n4,926,302.1\n4,150,137.4\n476,917.3\n-1,178.8\n437,932.6\n40,163.5\n78,292.8\n3,594,927.4\n776,164.7\n4,230,458.5\nMay\n-585,616.7\n1,190,209.8\n-1,775,826.5\n1,152,736.3\n598,403.2\n24,687.0\n4,911,347.2\n4,138,311.2\n468,461.4\n-1,178.9\n429,476.7\n40,163.5\n78,383.6\n3,591,466.2\n773,035.9\n4,325,730.5\nJun\n-595,417.7\n1,126,637.1\n-1,722,054.8\n1,141,906.4\n545,347.3\n34,801.1\n4,918,983.6\n4,174,067.9\n498,617.0\n-1,179.1\n459,632.5\n40,163.5\n73,173.2\n3,602,277.7\n744,915.7\n4,323,565.9\nTABLE 3.2: BROAD MONEY SURVEY\nUS$ '000s\n \n \nS13 \n \n \n \n \n \nTABLE 3.3: ANALYSIS OF MONTHLY CHANGES IN MONEY SUPPLY\nUS$ '000s\nNET \nFOREIGN \nASSETS \n Total \nForeign \nAssets\n Liabilities \nNET \nDOMESTIC \nASSETS \nDOMESTIC \nCREDIT\n Claims on \nGovernment \n(net) \nRBZ\nDMBs\nOBIs\n Claims on \nPublic \nEnterprises \n Claims on \nPrivate \nSector\nRBZ\nDMBs\nOBIs\nOTHER \nITEMS \n(NET) \nBROAD \nMONEY \n(M3) \nBroad \nMoney \n(M3) \n \nDomestic \nCredit \n \nClaims \non \nPrivate \nSector\n2009\n26,314.9\n-517.7\n26,832.6\n144,736.2\n96,198.3\n-435.2\n-435.2\n0.0\n0.0\n2,769.7\n93,863.8\n-7,572.3\n88,829.1\n12,607.0\n48,537.8\n171,051.0\n14.1%\n15.3%\n15.5%\n2010\n116,717.6\n179,819.4\n-63,101.8\n-85,407.8\n130,555.6\n-523.1\n-815.6\n300.1\n-7.6\n1,201.0\n129,877.7\n-945.2\n119,963.6\n10,859.3\n-215,963.3\n31,309.8\n1.4%\n8.3%\n8.4%\n2011\n24,582.0\n29,394.7\n-4,812.7\n-12,756.7\n50,334.2\n-207.2\n-207.2\n0.0\n0.0\n2,887.1\n47,654.3\n-957.7\n35,712.8\n12,899.2\n-63,090.9\n11,825.3\n0.4%\n1.8%\n1.8%\n2012\n-94,629.1\n26,397.5\n-121,026.6\n156,644.5\n167,516.4\n95,348.0\n-63.0\n95,410.9\n0.0\n252.4\n71,916.0\n-885.3\n68,894.3\n3,906.9\n-10,871.9\n62,015.4\n1.6%\n4.6%\n2.1%\n2013\n191,626.5\n185,511.0\n6,115.5\n-66,411.8\n-22,612.8\n26,199.6\n5.8\n26,263.8\n-70.1\n-199.9\n-48,612.5\n0.0\n-52,550.5\n3,938.0\n-43,799.0\n125,214.7\n3.3%\n-0.6%\n-1.3%\n2013\nJan\n-50,114.5\n-94,995.8\n44,881.3\n-28,162.2\n-10,500.6\n-9,216.1\n9,872.0\n-18,088.0\n-1,000.0\n544.3\n-1,828.7\n377.8\n-7,832.6\n5,626.0\n-17,661.6\n-78,276.7\n-2.0%\n-0.3%\n-0.1%\nFeb\n6,974.3\n-6,237.1\n13,211.3\n-1,752.7\n3,788.6\n-13,678.3\n33.4\n-13,711.8\n0.0\n1,447.3\n16,019.6\n1.0\n7,812.5\n8,206.1\n-5,541.3\n5,221.5\n0.1%\n0.1%\n0.5%\nMar\n-148,425.4\n-121,176.0\n-27,249.4\n133,332.6\n63,353.6\n17,474.1\n12.8\n-2,579.8\n20,041.1\n382.9\n45,496.5\n-1.0\n46,815.1\n-1,317.5\n69,979.0\n-15,092.8\n-0.4%\n1.7%\n1.3%\nApr\n149,883.9\n115,789.9\n34,093.9\n18,334.6\n-36,724.9\n9,369.8\n-1.2\n8,995.5\n375.5\n4,882.2\n-50,976.8\n0.0\n-53,257.8\n2,281.0\n55,059.4\n168,218.4\n4.4%\n-1.0%\n-1.4%\nMay\n-11,405.7\n82,500.7\n-93,906.3\n62,804.8\n62,627.7\n32,214.0\n1.1\n32,341.8\n-128.8\n4,631.3\n25,782.4\n-885.3\n4,990.7\n21,677.1\n177.1\n51,399.0\n1.3%\n1.6%\n0.7%\nJun\n-281,785.6\n-71,188.1\n-210,597.5\n101,851.2\n65,033.1\n-6,032.3\n-648.7\n-5,095.8\n-287.8\n23.8\n71,041.6\n0.0\n61,670.4\n9,371.2\n36,818.1\n-179,934.2\n-4.5%\n1.7%\n2.0%\nJul\n-52,013.6\n-26,708.0\n-25,305.6\n68,728.0\n30,220.4\n26,083.2\n-1,659.1\n27,742.3\n0.0\n-1,454.4\n5,591.7\n-3,982.7\n8,171.7\n1,402.7\n38,507.5\n16,714.4\n0.4%\n0.8%\n0.2%\nAug\n-62,027.6\n-35,805.2\n-26,222.5\n3,342.6\n22,548.1\n1,845.2\n2,245.5\n-400.3\n0.0\n-1,811.3\n22,514.2\n1.0\n25,868.8\n-3,355.6\n-19,205.5\n-58,685.0\n-1.5%\n0.6%\n0.6%\nSept\n69,954.8\n143,519.1\n-73,564.3\n44,468.0\n17,476.3\n-5,503.1\n45.4\n-5,548.6\n0.0\n-553.2\n23,532.6\n-34.4\n-17,001.2\n40,568.2\n26,991.7\n114,422.8\n3.0%\n0.4%\n0.6%\nOct\n-35,848.0\n-81,181.9\n45,333.9\n76,871.5\n72,924.5\n71,071.2\n-272.3\n71,343.5\n0.0\n-385.6\n2,238.9\n-992.6\n-749.8\n3,981.3\n3,947.0\n41,023.5\n1.0%\n1.8%\n0.1%\nNov\n-151,462.4\n-137,671.2\n-13,791.2\n6,889.9\n12,095.0\n32,111.8\n280.7\n11,831.0\n20,000.0\n1,420.6\n-21,437.3\n-4.0\n-35,445.7\n14,012.4\n-5,205.1\n-144,572.5\n-3.7%\n0.3%\n-0.6%\nDec\n191,626.5\n185,511.0\n6,115.5\n-66,411.8\n-22,612.8\n26,199.6\n5.8\n26,263.8\n-70.1\n-199.9\n-48,612.5\n0.0\n-52,550.5\n3,938.0\n-43,799.0\n125,214.7\n3.3%\n-0.6%\n-1.3%\n2014\nJan\n-36,449.8\n-15,336.3\n-4,647.8\n-7,230.0\n-82,791.0\n800.9\n0.7\n800.2\n0.0\n-91.9\n-83,500.0\n0.0\n-98,611.4\n15,111.4\n75,561.0\n-43,679.7\n-1.1%\n-2.0%\n-2.3%\nFeb\n47,188.5\n3,093.6\n-990.1\n85,945.8\n128,279.5\n67,709.2\n-0.1\n67,709.4\n0.0\n136.3\n60,434.0\n0.0\n61,551.1\n-1,117.1\n-42,333.7\n133,134.2\n3.4%\n3.2%\n1.7%\nMar\n-17,404.7\n-11,130.7\n-6,274.3\n89,564.4\n65,923.0\n63,725.7\n2.2\n63,723.5\n0.0\n18,838.6\n-16,641.3\n0.0\n-22,596.8\n6,326.4\n23,641.4\n72,159.7\n1.8%\n1.6%\n-0.5%\nApr\n120,994.8\n42,216.0\n78,778.8\n15,524.5\n-29,971.6\n-13,315.9\n0.8\n-13,316.6\n0.0\n-1,235.2\n-15,420.5\n0.0\n-25,427.6\n10,007.1\n45,496.1\n136,519.3\n3.3%\n-0.7%\n-0.4%\nMay\n110,226.8\n126,605.3\n-16,378.5\n-14,954.9\n-11,826.2\n-8,455.9\n0.0\n-8,455.9\n0.0\n90.9\n-3,461.1\n0.0\n-12,524.1\n9,063.0\n-3,128.7\n95,271.9\n2.3%\n-0.3%\n-0.1%\nJun\n-9,801.0\n-63,572.7\n53,771.7\n7,636.5\n35,756.7\n30,155.7\n-0.2\n30,155.8\n0.0\n-5,210.4\n10,811.4\n-19.8\n-182.9\n11,014.2\n-28,120.2\n-2,164.5\n-0.1%\n0.9%\n0.3%\n \n \nS14 \n \n \n \n \n \nNET \nFOREIGN \nASSETS \n Total \nForeign \nAssets\n Liabilities \\2 RBZ\n \nDMBs\n \nOBIs\nNET \nDOMESTIC \nASSETS \\3\nDOMESTIC \nCREDIT\n Claims on \nGovernment \n(net) \n RBZ\n DMBs\n \nOBIs\n Claims on \nPublic \nEnterprises \n Claims on \nPrivate \nSector\n \nRBZ\n \nDMBs\n2010\n138,490.5\n101,733.1\n36,757.4\n-141,632.9\n104,900.3\n-24.8\n807,868.4\n970,501.5\n-3,799.3\n-2,871.6\n0.2\n-927.9\n-2,590.5\n976,891.3\n-3,628.0\n902,768.9\n2011\n-156,193.0\n-118,657.1\n-37,535.8\n-1,363.1\n13,206.8\n25,692.2\n928,986.1\n1,103,675.0\n3,822.1\n2,894.4\n-0.2\n927.9\n22,016.9\n1,077,836.0\n31,613.8\n838,302.6\n2012\n-139,041.9\n33,821.1\n-172,863.0\n-2,908.6\n177,406.0\n-1,634.4\n925,312.7\n990,341.7\n177,893.2\n-9,262.9\n185,922.5\n1,233.6\n6,792.4\n805,656.0\n-3,903.1\n687,696.6\n2013\n-374,643.5\n-47,642.5\n-327,001.0\n989.6\n319,316.8\n6,694.5\n420,296.5\n280,229.0\n181,938.9\n9,915.4\n133,093.6\n38,929.9\n8,928.1\n89,362.0\n-5,520.2\n-11,508.5\n2013\nJan\n-211,017.8\n-99,644.3\n-111,373.4\n-9,155.5\n121,978.0\n-1,449.1\n874,388.8\n986,989.4\n168,720.9\n652.8\n167,834.5\n233.6\n7,557.9\n810,710.6\n-5,788.8\n691,818.1\nFeb\n-408,762.5\n-321,764.7\n-86,997.8\n-20,012.2\n105,662.9\n1,347.1\n844,811.7\n963,317.9\n154,920.0\n562.6\n154,123.7\n233.6\n9,665.0\n798,733.0\n-7,388.1\n687,296.3\nMar\n-268,481.4\n-149,564.2\n-118,917.3\n-23,389.5\n140,952.3\n1,354.5\n628,387.0\n842,942.1\n81,055.3\n582.2\n60,198.4\n20,274.7\n24,122.0\n737,764.8\n-6,693.9\n627,797.4\nApr\n-146,235.3\n-66,182.3\n-80,053.1\n-17,346.3\n92,713.4\n4,686.0\n659,222.6\n786,202.9\n91,424.1\n537.9\n70,439.5\n20,446.7\n27,528.6\n667,250.2\n-3,088.9\n545,532.3\nMay\n-116,519.4\n50,744.2\n-167,263.6\n-10,305.8\n172,628.6\n4,940.8\n554,475.7\n731,055.8\n133,685.7\n553.3\n112,834.8\n20,297.6\n31,812.4\n565,557.7\n-7,047.9\n441,516.4\nJun\n-395,149.4\n-13,526.8\n-381,622.6\n-7,088.6\n383,811.9\n4,899.3\n643,086.0\n708,713.7\n123,996.4\n277.7\n103,688.6\n20,030.1\n14,317.4\n570,399.9\n-3,630.4\n461,613.7\nJul\n-456,065.7\n-43,201.5\n-412,864.3\n804.6\n408,225.7\n3,834.0\n613,427.0\n603,624.8\n152,935.2\n-1,964.9\n134,666.5\n20,233.6\n12,558.6\n438,131.0\n-2,646.2\n336,118.8\nAug\n-425,304.4\n13,716.9\n-439,021.3\n-4,310.9\n439,507.9\n3,824.3\n632,242.7\n592,398.4\n160,962.3\n260.4\n140,468.3\n20,233.6\n11,073.2\n420,363.0\n-5,176.5\n335,446.9\nSept\n-366,815.7\n123,202.2\n-490,017.9\n-3,016.5\n489,247.4\n3,786.9\n549,291.7\n536,322.4\n155,400.1\n318.0\n134,848.5\n20,233.6\n13,749.2\n367,173.2\n-6,435.5\n244,506.0\nOct\n-432,496.1\n29,959.1\n-462,455.2\n3,294.4\n462,114.0\n-2,953.2\n570,215.1\n576,565.6\n219,466.4\n9,875.8\n190,590.5\n19,000.0\n9,782.8\n347,316.4\n-7,002.0\n250,995.0\nNov\n-660,899.2\n-206,756.1\n-454,143.1\n659.3\n456,163.5\n-2,679.8\n643,352.8\n470,358.2\n251,087.3\n9,846.6\n202,240.7\n39,000.0\n9,380.3\n209,890.6\n-6,405.5\n109,936.4\nDec\n-374,643.5\n-47,642.5\n-327,001.0\n989.6\n319,316.8\n6,694.5\n420,296.5\n280,229.0\n181,938.9\n9,915.4\n133,093.6\n38,929.9\n8,928.1\n89,362.0\n-5,520.2\n-11,508.5\n2014\nJan\n-360,978.8\n15,108.1\n-376,086.8\n-329.7\n370,530.4\n5,886.1\n441,228.7\n207,938.6\n191,956.0\n44.1\n151,981.9\n39,929.9\n8,291.9\n7,690.8\n-5,898.0\n-102,287.3\nFeb\n-320,764.6\n43,943.2\n-364,707.8\n9,677.0\n352,061.6\n2,969.2\n528,927.2\n332,429.5\n273,343.5\n10.6\n233,403.0\n39,929.9\n6,980.8\n52,105.1\n-5,899.0\n-48,548.7\nMar\n-189,746.9\n136,457.4\n-312,349.0\n-13,852.3\n323,807.0\n2,394.3\n485,159.0\n334,998.9\n319,595.1\n0.0\n299,706.3\n19,888.8\n25,436.5\n-10,032.7\n-6,269.0\n-117,960.6\nApr\n-218,632.9\n80,414.9\n-299,047.9\n14,941.5\n285,699.2\n-1,592.9\n482,349.0\n341,752.2\n296,909.4\n2.0\n277,394.1\n19,513.3\n19,319.1\n25,523.6\n-6,269.0\n-90,130.3\nMay\n-97,000.4\n124,519.6\n-221,520.0\n18,630.8\n204,827.4\n-1,938.2\n404,589.2\n267,298.2\n256,239.5\n0.8\n236,596.5\n19,642.1\n14,778.7\n-3,720.0\n-5,383.7\n-107,645.2\nJun\n174,984.2\n132,134.9\n42,849.2\n3,844.4\n-54,779.1\n8,085.5\n310,374.5\n238,021.8\n292,427.5\n649.4\n271,848.2\n19,929.9\n9,544.5\n-63,950.1\n-5,403.6\n-169,498.5\nTABLE 3.4: ANALYSIS OF YEARLY CHANGES IN MONEY SUPPLY\nUS$ '000s\n \n \nS15 \n \n \n \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL &\nFINANCIAL\nMANUFACTU\nRING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATE\nTOTAL\nEND OF\n \n \n \nINVESTMENTS\nORGANISAT\nIONS\n \n \n \n \n2009\n110,230.4\n12,406.6\n10,948.3\n151,169.9\n345.0\n32,093.2\n116,375.5\n36,259.7\n35,593.3\n12,726.1\n23,212.5\n1,016.1\n542,376.7\n2010\n238,969.8\n24,075.5\n15,855.7\n225,277.0\n384.6\n72,693.1\n218,621.4\n71,729.9\n112,325.2\n22,015.6\n86,980.6\n1,122.1\n1,090,050.4\n2011\n366,827.1\n36,043.9\n24,836.9\n323,322,2\n3,720.8\n87,963.3\n310,488.5\n75,310.4\n191,534.5\n55,295.7\n180,205.0\n4,726.2\n1,660,274.6\n2012\n444,341.0\n32,622.8\n37,353.2\n428,782.2\n8,513.2\n31,513.9\n414,044.9\n148,927.9\n233,864.4\n33,116.1\n288,628.5\n9,370.9\n2,111,078.9\n2013\n533,165.2\n42,285.1\n17,617.9\n435,613.1\n5,047.0\n62,165.8\n389,181.2\n115,404.6\n379,809.3\n37,409.1\n369,838.8\n18,252.9\n2,405,790.0\n2013\nJan\n450,170.0\n31,073.4\n38,762.3\n426,050.9\n11,967.9\n31,547.4\n417,961.3\n144,645.1\n237,323.7\n33,906.5\n300,841.1\n9,373.1\n2,133,622.7\nFeb\n494,536.6\n33,786.9\n28,372.0\n439,556.7\n14,811.4\n33,948.5\n409,692.7\n128,242.7\n303,269.9\n38,235.9\n298,171.5\n3,685.5\n2,226,310.2\nMar\n467,874.0\n41,532.7\n68,987.2\n433,337.1\n16,118.8\n34,704.7\n471,204.9\n159,925.7\n307,134.7\n44,413.6\n370,123.5\n4,491.7\n2,419,848.6\nApr\n455,178.9\n43,628.2\n23,433.4\n428,381.7\n14,997.8\n35,589.1\n444,798.7\n135,046.2\n288,857.6\n45,643.6\n377,037.0\n7,693.7\n2,300,585.8\nMay\n484,635.0\n38,637.2\n27,795.2\n455,737.9\n14,699.1\n35,106.1\n465,890.2\n115,457.8\n301,547.9\n52,075.2\n382,172.8\n5,034.0\n2,378,788.7\nJun\n489,730.1\n37,474.3\n38,198.7\n425,521.3\n7,310.7\n53,815.0\n454,368.5\n110,349.9\n295,432.3\n51,453.6\n385,769.7\n11,033.4\n2,360,457.5\nJul\n483,103.7\n40,342.5\n33,494.3\n464,921.7\n6,869.2\n38,522.6\n541,025.9\n116,557.1\n307,117.5\n48,218.0\n426,582.7\n4,455.3\n2,511,210.5\nAug\n521,743.0\n38,889.1\n43,894.5\n425,531.4\n7,260.6\n39.087.2\n451,871.2\n110,041.8\n346,006.0\n40,216.0\n374,587.1\n9,914.6\n2,409,042.5\nSept\n496,289.3\n39,446.9\n38,856.6\n447,247.2\n13,953.5\n43,006.7\n437,211.9\n118,873.7\n330,709.6\n40,046.6\n373,596.8\n9,790.6\n2,389,029.4\nOct\n491,610.6\n38,871.5\n39,766.0\n471,966.2\n8,023.3\n40,835.3\n420,445.3\n110,778.3\n417,411.6\n36,334.1\n376,463.1\n9,861.9\n2,462,367.3\nNov\n487,289.4\n40,321.7\n42,332.0\n488,637.3\n3,116.5\n36,852.0\n417,162.5\n117,050.8\n389,727.1\n39,126.4\n369,190.3\n17,960.5\n2,448,766.4\nDec\n533,165.2\n42,285.1\n17,617.9\n435,613.1\n5,047.0\n62,165.8\n389,181.2\n115,404.6\n379,809.3\n37,409.1\n369,838.8\n18,252.9\n2,405,790.0\n2014\nJan\n489,585.3\n43,743.8\n18,574.7\n464,097.6\n5,467.4\n48,086.1\n362,554.0\n116,635.5\n412,901.1\n37,722.2\n367,126.2\n16,773.1\n2,383,267.1\nFeb\n519,154.6\n38,918.1\n24,765.4\n460,528.2\n10,397.3\n47,488.6\n385,038.1\n116,670.5\n401,619.6\n32,978.1\n396,800.8\n8,542.7\n2,442,902.1\nMar\n503,868.1\n42,707.9\n35,785.1\n494,663.8\n5,257.4\n52,722.0\n374,809.1\n116,653.0\n396,000.6\n38,089.3\n406,503.1\n15,833.1\n2,482,892.7\nApr\n540,156.2\n40,707.1\n18,138.9\n502,514.1\n9,898.6\n18,817.9\n407,595.0\n175,048.3\n447,549.2\n49,619.1\n511,048.2\n15,136.7\n2,736,229.2\nMay\n546,733.9\n41,594.2\n21,547.9\n488,389.7\n10,073.8\n23,049.1\n396,846.0\n184,730.9\n452.373.8\n51,891.8\n512,864.5\n17,718.8\n2,747,814.6\nJun\n536,188.9\n46,085.8\n28,201.0\n500,266.1\n10,656.3\n25,616.2\n417,002.7\n197,441.1\n432,692.4\n46,751.6\n499,191.5\n17,173.9\n2,757,267.4\nUS$ '000s\n3.5. SECTORAL ANALYSIS OF COMMERCIAL BANKS’ LOANS AND ADVANCES\n \n \nS16 \n \n \n \n \n \n \n \nAGRICULTURE\nCONSTRUCTION\nDISTRIBUTION\nFINANCIAL \nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATE\nTOTAL\nEND OF \n \nINVESTMENT\nORGANISATIONS\n \n \n \n \n \n2009\n1,848.0\n1,800.8\n10,589.5\n2,396.7\n1,743.2\n16,585.9\n5,319.3\n4,275.5\n2,280.8\n1,790.6\n324.4\n48,954.7\n2010\n23,054.9\n3,201.0\n23,141.0\n11,198.1\n9,848.5\n28,811.8\n13,693.5\n23,301.5\n15,221.8\n6,953.1\n13,897.6\n172,322.7\n2011\n31,338.9\n10,547.9\n46,231.1\n17,089.5\n44,752.3\n68,045.5\n45,679.1\n86,371.6\n24,273.3\n65,951.4\n2,326.4\n442,607.0\n2012\n69,626.6\n17,100.6\n61,871.2\n35,218.3\n38,605.1\n76,364.8\n79,801.1\n85,485.2\n45,026.6\n166,500.2\n8,482.6\n684,082.4\n2013\n67,626.4\n9,691.4\n50,354.1\n11,629.3\n29,200.1\n70,093.2\n101,301.5\n100,507.4\n15,301.2\n174,918.3\n14,748.0\n645,370.9\n2013\nJan\n67,517.6\n16,163.5\n56,807.8\n18,616.7\n58,326.4\n78,419.6\n89,890.9\n106,553.9\n18,590.6\n144,497.3\n15,986.5\n671,370.8\nFeb\n58,292.9\n21,826.4\n56,104.4\n18,101.2\n62,883.5\n78,714.5\n89,292.0\n117,785.5\n17,680.2\n128,827.9\n9,967.9\n659,476.4\nMar\n69,856.5\n16,673.4\n60,104.1\n16,684.4\n58,510.5\n72,517.4\n97,158.1\n88,814.4\n14,831.7\n173,486.3\n17,657.4\n686,294.2\nApr\n63,793.8\n17,080.4\n63,074.6\n20,726.0\n58,308.4\n70,475.5\n89,412.8\n87,962.4\n15,412.2\n174,072.5\n18,871.2\n679,189.8\nMay\n67,425.0\n17,232.4\n66,358.3\n21,534.7\n59,449.7\n72,998.8\n89,738.5\n84,961.5\n15,028.8\n189,089.0\n18,888.7\n702,705.4\nJun\n68,762.1\n16,928.9\n64,967.8\n11,199.2\n57,389.1\n72,983.6\n94,193.4\n98,762.3\n13,866.1\n176,186.3\n18,800.0\n694,038.8\nJul\n66,851.1\n15,061.8\n64,398.0\n11,134.2\n34,750.7\n77,551.0\n100,908.8\n109,118.2\n14,701.2\n162,459.7\n0.0\n656,934.7\nAug\n67,246.9\n15,177.5\n68,887.7\n11,071.0\n34,241.2\n77,411.5\n122,491.8\n120,661.7\n13,212.7\n137,335.6\n0.0\n667,737.6\nSept\n69,700.0\n15,202.1\n67,723.0\n10,981.1\n34,026.9\n77,338.7\n103,272.3\n106,398.8\n16,871.0\n173,866.8\n0.0\n675,380.7\nOct\n72,224.8\n17,189.6\n64,266.5\n11,000.2\n34,072.5\n67,425.8\n95,019.2\n125,049.4\n15,931.7\n172,834.8\n17,401.5\n692,416.0\nNov\n68,628.1\n15,194.8\n61,488.3\n11,456.3\n33,491.0\n71,854.0\n101,230.0\n129,298.4\n41,690.2\n133,954.5\n11,348.1\n679,633.7\nDec\n67,626.4\n9,691.4\n50,354.1\n11,629.3\n29,200.1\n70,093.2\n101,301.5\n100,507.4\n15,301.2\n174,918.3\n14,748.0\n645,370.9\n2014\nJan\n24,456.9\n6,122.0\n33,734.0\n9,856.2\n23,491.2\n42,349.6\n55,948.1\n35,302.4\n15,083.5\n153,861.9\n1,893.8\n402,099.6\nFeb\n28,842.8\n5,882.2\n32,873.4\n9,361.7\n22,320.3\n44,904.2\n55,857.3\n33,373.4\n11,068.1\n182,690.8\n0.0\n427,174.2\n Mar \n29,771.6\n4,151.1\n29,125.9\n6,053.4\n14,432.5\n44,390.0\n65,187.3\n67,751.5\n15,035.0\n124,621.1\n2,755.1\n403,274.5\nApr\n2,263.5\n4,439.5\n16,779.5\n9,040.6\n21,554.7\n4,641.1\n11,484.2\n2,329.6\n136.4\n1,944.8\n0.0\n74,613.9\nMay\n2,299.4\n4,640.4\n17,050.1\n9,182.5\n21,892.8\n4,570.4\n11,663.7\n2,338.4\n7.4\n1,979.9\n0.0\n75,625.0\nJun\n2,161.8\n4,353.6\n11,794.5\n8,937.6\n21,309.1\n2,709.7\n11,296.9\n2,272.5\n7.3\n1,897.9\n0.0\n66,740.9\nUS$ '000s\nTABLE 3.6: SECTORAL ANALYSIS OF MERCHANT BANKS' LOANS AND ADVANCES\n \n \nS17 \n \n \n \n \n \nAGRICULTURE\nCONSTRUCTION\nCOMMUNICATION\nDISTRIBUTION\nFINANCIAL \nFINANCIAL\nMANUFACTURING\nMINING\nSERVICES\nTRANSPORT\nINDIVIDUALS\nCONGLOMERATES\nTOTAL\nEND OF \n \nINVESTMENT\nORGANISATIONS\n \n \n \n \n \n2009\n61,792.7\n6,467.2\n35,365.8\n81,470.7\n45,127.5\n68,001.8\n111,397.9\n30,218.3\n480,954.6\n14,728.8\n180,117.5\n3,415.5\n1,119,058.5\n2010\n113,727.1\n13,189.9\n52,087.1\n195,080.2\n84,886.8\n146,548.7\n144,660.9\n67,916.4\n504,291.2\n17,349.7\n300,489.1\n5,962.4\n1,646,189.5\n2011\n120,665.7\n35,860.2\n107,439.2\n295,439.3\n94,854.2\n277,933.7\n267,305.3\n69,436.0\n518,311.2\n24,462.2\n444,051.7\n15,849.9\n2,271,608.5\n2012\n96,098.4\n50,492.7\n126,343.5\n379,068.0\n198,323.3\n509,241.6\n280,975.4\n95,457.1\n582,286.2\n41,852.2\n538,135.2\n26,491.3\n2,924,764.8\n2013\n113,914.2\n51,981.7\n142,938.1\n342,785.1\n213,125.2\n755,299.4\n327,658.1\n83,103.1\n762,884.4\n41,827.9\n432,436.3\n61,038.7\n3,328,992.1\n2013:Jan\n91,648.8\n48,329.1\n128,426.0\n351,566.7\n212,401.7\n494,823.6\n252,389.7\n93,470.0\n658,260.1\n44,091.4\n512,289.8\n32,145.9\n2,919,842.6\nFeb\n96,796.5\n48,491.5\n147,571.5\n360,757.9\n147,995.9\n578,306.4\n284,603.8\n64,530.5\n679,554.8\n41,983.6\n516,431.2\n25,275.3\n2,991.999.1\nMar\n96,752.8\n44,883.3\n139,327.8\n354,627.8\n155,915.2\n610,758.4\n290,072.8\n87,143.0\n594,397.7\n38,345.5\n523,913.8\n141,404.6\n3,077,542.7\nApr\n98,671.0\n49,093.8\n152,390.8\n350,269.2\n166,578.5\n545,118.2\n311,310.8\n105,766.9\n638,341.8\n39,837.1\n533,691.3\n99,053.9\n3,090,123.4\nMay\n114,053.3\n55,427.4\n142,023.3\n389,384.7\n255,352.1\n484,429.7\n318,129.4\n92,777.2\n700,668.7\n46,593.8\n578,509.2\n32,297.7\n3,209,646.5\nJun\n116,635.2\n58,578.8\n147,313.8\n447,394.5\n183,146.3\n352,600.3\n366,824.2\n96,685.8\n701,195.7\n46,578.5\n597,373.1\n104,843.6\n3,219,169.8\nJul\n108,086.6\n46,449.5\n120,982.3\n380,448.8\n178,341.4\n677,700.7\n301,575.9\n97,583.8\n710,856.1\n39,395.9\n487,954.4\n102,531.4\n3,251,906.9\nAug\n137,107.1\n48,726.1\n135,788.5\n319,106.0\n174,593.9\n637,190.7\n333,255.3\n99,194.1\n639,401.6\n41,996.5\n417,762.6\n93,772.1\n3,077,894.4\nSept\n100,028.3\n57,039.8\n145,652.5\n380,781.4\n207,379.2\n612,131.5\n408,359.1\n103,872.8\n795,047.6\n46,982.9\n435,912.4\n90,265.8\n3,383,453.4\nOct\n94,346.3\n52,722.4\n141,401.4\n338,625.9\n223,223.8\n754,145.4\n339,305.6\n99,583.3\n754,116.1\n41,527.2\n440,197.9\n97,771.1\n3,376,966.4\nNov\n114,178.7\n47,740.9\n128,399.3\n312,639.2\n241,628.8\n741,885.4\n283,426.0\n80,507.6\n727,492.5\n42,901.0\n458,479.9\n89,292.5\n3,268,571.8\nDec\n113,914.2\n51,981.7\n142,938.1\n342,785.1\n213,125.2\n755,299.4\n327,658.1\n83,103.1\n762,884.4\n41,827.9\n432,436.3\n61,038.7\n3,328,992.1\n2014:Jan\n130,154.6\n53,292.9\n146,876.1\n353,793.8\n259,569.6\n731,703.3\n304,033.2\n93,776.7\n770,435.4\n40,085.9\n485,573.1\n60,897.7\n3,430,192.5\nFeb\n138,812.3\n55,092.2\n134,813.9\n420,181.0\n262,183.8\n786,295.6\n270,062.5\n131,134.8\n779,640.3\n39,169.2\n508,813.7\n61,822.3\n3,588,021.6\nMar\n118,239.1\n55,167.5\n135,807.9\n382,675.5\n216,025.3\n791,776.0\n275,549.1\n103,298.7\n806,185.9\n42,432.8\n521,381.5\n72,990.9\n3,521,530.3\nApr\n164,347.5\n59,289.3\n102,323.7\n408,823.5\n325,559.7\n780,207.0\n325,659.8\n135,187.4\n888,876.2\n43,746.5\n582,848.8\n82,009.8\n3,898,879.1\nMay\n149,474.1\n60,669.4\n108,977.6\n355,802.3\n332,850.8\n800,256.8\n303,599.4\n132,132.8\n1,027,552.7\n38,921.0\n581,930.2\n93,334.9\n3,985,501.8\nJun\n194,685.1\n64,188.9\n95,595.6\n470,267.7\n291,594.6\n812,999.7\n348,303.5\n130,453.4\n895,698.0\n44,735.5\n575,149.1\n91,392.4\n4,015,063.5\nTABLE 3.7: SECTORALl ANALYSIS OF COMMERCIAL BANKS' DEPOSITS\nUS$ Thousands\n \n \nS18 \n \n \n \n \nMONTH \nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\nMONTH \nZETSS \nCHEQUE \nPOS\nATM\nMOBILE\n INTERNET\n2013\n2013\nJan\n3,563.84\n5.24\n80.72\n173.71\n115.53\n89.67\nJan\n181.68\n21.18\n761.09\n691.18\n6,950.84\n47.53\nFeb\n2,968.02\n5.52\n103.88\n156.66\n118.7\n80.56\nFeb\n172.41\n21.95\n811.83\n620.06\n6,835.89\n30.75\nMar\n3,339.98\n15.21\n134.33\n178.08\n118.47\n102.05\nMar\n179.44\n37.01\n1,377.65\n743.82\n7,042.27\n33.69\nApr\n3,535.58\n16.58\n140.28\n187.85\n160.61\n123.03\nApr\n182.87\n37.31\n954.8\n760.46\n9,908.41\n34.73\nMay\n3,915.31\n15.42\n129.2\n203.37\n211.75\n152.24\nMay\n215.2\n37.09\n954.18\n793.43\n12,146.90\n38.68\nJun\n3,544.35\n13.65\n117.11\n181.35\n146.64\n121.98\nJun\n185.8\n34.36\n968.54\n731.17\n9,110.97\n36.87\nJul\n3,955.45\n12.31\n132.61\n205.37\n164.08\n139.13\nJul\n205.85\n35.41\n1,052.26\n822.57\n10,099.72\n42.74\nAug\n3,351.13\n10.45\n138.05\n203.41\n189.48\n128.68\nAug\n187.25\n30.29\n1,114.86\n825.75\n11,551.94\n41.78\nSep\n3,409.17\n13.34\n120.41\n190.44\n173.13\n142.32\nSep\n201.22\n33.17\n1,003.98\n799.62\n8,701.56\n44.48\nOct\n3,641.98\n13.75\n121.55\n206.51\n201.51\n156.26\nOct\n212.66\n35.69\n1,073.88\n873.19\n9,769.81\n48.59\nNov\n3,134.35\n11.4\n102.19\n229.52\n222.18\n57.34\nNov\n186.64\n31.74\n904.27\n927.93\n14,753.35\n24.04\nDec\n3,438.08\n4.04\n130.15\n265.8\n268.94\n68.58\nDec\n180.8\n11.82\n1,033.73\n1,042.32\n12,273.02\n23.56\nAnnual \nTotal\n41,797.24\n136.91\n1,450.48\n2,382.07\n2,091.02\n1,361.84\nAnnual \nTotal\n2,291.82\n367.02\n12,011.07\n9,631.50\n119,144.68\n447.44\n2014\n2014\nJan\n3,093.01\n5.24\n102.26\n233.1\n228.25\n68.31\nJan\n182.48\n29.41\n973.79\n815.89\n11,141.19\n24.19\nFeb\n2,954.93\n10.73\n96.27\n193.9\n217.14\n64.42\nFeb\n175.09\n32.95\n991.91\n799.12\n10,631.60\n25.1\nMar\n3,332.79\n10.4\n103.58\n232.94\n255.32\n87.94\nMar\n192.02\n32.35\n1,163.76\n947.64\n12,859.50\n30.82\nApr\n3,439.33\n9.66\n126.26\n253.16\n264.38\n96.29\nApr\n183.63\n28.12\n1,184.85\n974.37\n13,298.04\n29.23\nMay\n3,915.31\n13.65\n117.11\n181.35\n146.64\n121.98\nMay\n215.2\n37.09\n954.18\n793.43\n12,146.90\n38.68\nJun\n3,657.44\n12.42\n110.38\n250.87\n284.18\n104.28\nJun\n193.58\n32.98\n1,164.73\n966.45\n14,163.56\n34.25\nTABLE 4.1 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY\nValues of Transactions (US$ in millions)\nTABLE 4.2 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY\nVolumes of Transactions (in thousands)\n \n \nS19 \n \n \n \n \nCOMMERCIAL BANKS\nACCEPTING HOUSES\nEND OF\nSAVINGS\n3 MONTHS\n3 MONTHS\nEnd Period\nNominal \nLending \nRates 2\nIndividuals \nCorporate\nNominal \nLending \nRates 2\nIndividuals \nCorporate\n2013\n2013\nJan\n10.00-35.00\n15.58\n10.81\n13.00-25.00\n17.96\n14.42\nJan\n0.15-8.00\n4.00-20.00\n6.00-17.00\nFeb \n10.00-35.00\n14.83\n10.53 \n13.00-25.00 \n17.93 \n14.36 \nFeb \n0.15-8.00\n4.00-20.00\n6.00-17.00\nMar\n6.00-35.00\n14.32\n10.19\n14.00-25.00\n17.8\n14.35\nMar\n0.15-8.00\n4.00-20.00\n8.00-12.00\nApr\n3.00-35.00\n14.58\n9.66\n14.00-25.00\n17.77\n14.35\nApr\n0.15-8.00\n4.00-20.00\n8.00-12.00\nMay\n9.00-35.00\n14.25\n9.89\n13.00-23.00\n17.66\n17.02\nMay\n0.15-8.00\n4.00-20.00\n6.00-17.00\nJun\n9.00-35.00\n14.29\n9.46 \n15.00-22.50\n17.78\n16.89 \nJun\n0.15-8.00\n4.00-20.00\n6.00-17.00\nJul\n6.00-35.00\n14.39\n9.65\n15.00-28.00\n17.7\n16.97\nJul\n0.15-8.00\n3.00-20.00\n6.00-17.00\nAug\n6.00-35.00\n13.82\n9.32\n15.00-23.00\n18.32\n16.92\nAug\n0.15-8.00\n3.00-20.00\n6.00-17.00\nSep\n6.00-35.00\n14.03\n9.37\n15.00-22.50\n18.31\n16.94\nSep\n0.15-8.00\n3.00-20.00\n11.00-12.00\nOct\n6.00-35.00\n13.95\n9.25\n15.00-23.00\n18.67\n17.66\nOct\n0.15--8.00\n3.00-20.00\n11.00-12.00\nNov\n6.00-35.00\n14.18\n9.4\n15.00-23.00\n18.84\n17.72\nNov\n0.15--8.00\n3.00-20.00\n11.00-12.00\nDec\n6.00-35.00\n14.13\n9.35\n15.00-23.00\n18.84\n17.76\nDec\n0.15--8.00\n3.00-20.00\n11.00-12.00\n2014\n2014\nJan\n6.00-35.00\n14.09\n9.3\n15.00-23.00\n18.88\n17.74\nJan\n0.15--8.00\n3.00-20.00\n11.00-12.00\nFeb \n6.00-35.00\n14.08\n9.32\n15.00-23.00\n18.88\n17.73\nFeb \n0.15--8.00\n3.00-20.00\n11.00-12.00\nMar\n6.00-35.00\n14.24\n9.27\n15.00-23.00\n18.88\n17.73\nMar\n0.15--8.00\n3.00-20.00\n11.00-12.00\nApr\n6.00-35.00\n14.22\n9.12\n15.00-23.00\n18.88\n17.73\nApr\n0.15--8.00\n3.00-20.00\n11.00-12.00\nMay\n6.00-35.00\n14.39\n9.25\n15.00-23.00\n18.87\n17.74\nMay\n0.15-8.00\n3.00-20.00\n11.00-12.00\nJun\n6.00-35.00\n14.44\n9.33\n15.00-23.00\n19.00\n18.00\nJun\n0.15-8.00\n3.00-20.00\n11.00-12.00\nNotes\nTABLE 5.2 : BANKS DEPOSIT RATES (percent per annum)1\n1. The range of rates qouted by banks during the period.\n2. Three (3) months deposit rates revised to exclude rates on inactive or dormant \naccounts.\nTABLE 5.1: LENDING RATES (percent per annum)1\n3. Lending rates exclude rates on staff loans. \n1. Table revised, to separate weighted lending rates for individuals and corporate bodies. \n2. Nominal Lending Rates depict the range of rates quoted by banks.\nWeighted Average \nLending Rates 3 \nWeighted Average \nLending Rates 3 \nMerchant Banks\nCommercial Banks\n \n \nS20 \n \n \nUS$ Millions\nIndustrial\nMining\nMarket Capitalisation\n2013\nJan\n179.3\n84.1\n4,700.3\nFeb\n182.3\n72.0\n4,748.2\nMar\n183.9\n66.2\n4,726.3\nApr\n189.7\n72.0\n4,894.7\nMay\n212.7\n74.0\n5,471.2\nJun\n211.2\n73.3\n5,436.6\nJul\n232.9\n66.8\n59,136.8\nAug\n181.7\n48.7\n4,682.3\nSep\n200.1\n49.9\n5,157.2\nOct\n209.7\n52.7\n5,407.4\nNov\n213.0\n47.0\n5,482.0\nDec\n202.1\n45.8\n5,203.1\n2014\nJan\n189.3\n35.4\n4,882.1\nFeb\n189.5\n39.2\n4,906.9\nMar\n176.3\n29.5\n4,560.3\nApr\n172.9\n29.6\n4,473.5\nMay\n174.9\n35.5\n4,485.1\nJun\n186.6\n61.3\n4,873.4\nTABLE 5.3: ZIMBABWE STOCK MARKET STATISTICS\nSource: Zimbabwe Stock Exchange (ZSE) \nIndices\n \n \nS21 \n \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHSING, \nWATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNICATION\nRECREATION &\nEDUCATION\nRESTAURANTS \n&\nMISC.\nTOTAL \nNON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.38\n6.05\n17.74\n9.91\n2.16\n9.76\n3.41\n2.1\n5.67\n1.38\n3.91\n66.47\n33.53\n100\n2009\n0.2\n-1.6\n1.1\n-0.3\n-0.7\n0.8\n-0.6\n0.2\n0.5\n-0.4\n-0.3\n-0.3\n-1.3\n-0.7\n2010\n-0.2\n-0.2\n0.2\n0.0\n0.1\n-0.2\n-0.3\n-0.2\n0.0\n0.5\n0.1\n0.1\n0.6\n0.3\n2011\n0.1\n0.2\n0.6\n0.3\n0.0\n0.5\n0.9\n0.2\n0.5\n0.7\n0.5\n0.4\n0.5\n0.4\n2012\n0.0\n0.0\n0.9\n0.1\n0.2\n0.6\n0.0\n0.0\n1.1\n0.3\n0.2\n0.2\n0.3\n0.3\n2013\n0.4\n0.0\n0.3\n-0.1\n0.2\n0.1\n-1.2\n-0.1\n0.9\n0.2\n-0.1\n0.1\n-0.2\n0.0\n2013:Jan\n-0.54\n0.00\n0.00\n0.00\n0.01\n0.00\n0.00\n0.01\n0.00\n0.01\n-0.52\n-0.06\n0.32\n0.07\nFeb\n2.75\n0.37\n0.41\n0.20\n1.51\n1.65\n-0.17\n-0.08\n0.08\n0.77\n1.11\n0.72\n1.40\n0.95\nMar\n0.47\n0.04\n0.04\n0.37\n0.05\n0.49\n-0.20\n0.13\n0.00\n-1.12\n0.08\n0.15\n0.33\n0.20\nApr\n0.20\n-0.08\n1.60\n0.04\n0.34\n0.00\n-13.16\n0.06\n4.02\n0.29\n-0.31\n0.11\n-0.44\n-0.07\nMay\n-0.02\n0.17\n0.01\n-0.28\n-0.07\n-0.73\n-0.05\n-0.49\n0.00\n0.05\n-0.30\n-0.17\n-0.28\n-0.20\nJun\n0.17\n-0.03\n-0.01\n-0.02\n-0.05\n-0.14\n-0.33\n0.12\n0.00\n-0.15\n0.06\n-0.03\n-0.33\n-0.13\nJul\n-0.16\n0.11\n-0.01\n-0.20\n-0.04\n0.31\n-0.04\n-0.11\n0.00\n0.02\n-0.04\n0.00\n-1.14\n-0.38\nAug\n-0.42\n-0.33\n0.79\n-0.28\n0.29\n0.07\n-0.15\n-0.09\n1.23\n0.97\n-0.42\n0.23\n-0.90\n-0.15\nSept\n0.03\n0.04\n0.40\n0.11\n-0.22\n0.15\n0.00\n-0.08\n0.02\n0.19\n0.41\n0.17\n-0.18\n0.05\nOct\n1.20\n0.00\n-0.02\n-0.36\n0.06\n-0.32\n-0.08\n-0.14\n0.02\n-0.08\n-0.20\n-0.04\n0.04\n-0.01\nNov\n0.39\n-0.19\n-0.01\n-0.37\n0.10\n-0.13\n-0.01\n-0.14\n5.57\n1.08\n-0.27\n0.43\n-0.60\n0.09\nDec\n0.14\n-0.01\n0.38\n-0.29\n0.12\n0.28\n0.06\n-0.22\n0.00\n0.01\n-0.46\n0.09\n-0.40\n-0.08\n2014:Jan\n0.20\n-0.07\n0.00\n0.01\n-0.23\n0.01\n0.00\n-0.07\n0.02\n0.16\n-0.09\n0.00\n0.43\n0.14\nFeb\n-0.01\n-0.09\n-0.11\n-0.08\n0.09\n0.08\n0.00\n-0.04\n0.23\n-0.08\n0.07\n-1.06\n0.18\n0.05\nMar\n-0.05\n-0.06\n-0.82\n-0.12\n0.02\n0.00\n0.01\n0.00\n-0.20\n0.01\n-0.30\n-1.27\n-0.14\n-0.22\nApr\n0.30\n-0.10\n-0.13\n-0.75\n0.16\n0.33\n-0.02\n0.34\n12.64\n-1.02\n-0.03\n1.09\n-0.46\n0.58\nMay\n0.11\n-0.11\n-0.06\n-0.29\n0.00\n0.23\n-0.03\n-0.20\n0.07\n-0.13\n-0.43\n-0.05\n-0.30\n-0.13\nJun\n-0.05\n0.12\n0.00\n0.06\n0.30\n-0.03\n0.00\n-0.09\n0.00\n-0.11\n0.15\n0.02\n-0.12\n-0.03\nNON-FOOD INFLATION\nTABLE 5.4 : MONTHLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \\1\n( DECEMBER 2012 = 100)\n \n \nS22 \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHSING, WATER,\nFURNITURE\nHEALTH\nTRANSPORT\nCOMMUNICATION\nRECREATION &\nEDUCATION\nRESTAURANTS &\nMISC.\nTOTAL NON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, GAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.38\n6.05\n17.74\n9.91\n2.16\n9.76\n3.41\n2.1\n5.67\n1.38\n3.91\n66.47\n33.53\n100\n2010\n-0.52\n-0.46\n0.39\n-0.08\n0.35\n-0.31\n-0.63\n-0.52\n0.33\n1.21\n0.26\n0.28\n1.40\n0.61\n2011\n0.31\n0.49\n1.14\n0.67\n0.00\n1.08\n1.83\n0.31\n0.91\n1.19\n0.87\n0.74\n0.78\n0.75\n2012\n-0.14\n-0.09\n1.74\n0.23\n0.34\n1.14\n-0.01\n-0.01\n2.24\n0.63\n0.35\n0.42\n0.63\n0.49\n2013\n0.84\n0.00\n0.59\n-0.18\n0.38\n0.23\n-2.34\n-0.16\n1.81\n0.34\n-0.10\n0.26\n-0.30\n0.07\n2013:Jan\n1.21\n-0.17\n0.26\n-0.24\n0.43\n-0.17\n0.25\n-0.09\n-0.09\n0.04\n-0.46\n-0.01\n0.61\n0.19\nFeb\n2.20\n0.37\n0.41\n0.20\n1.53\n1.65\n-0.16\n-0.07\n0.08\n0.77\n0.58\n0.66\n1.73\n1.02\nMar\n3.23\n0.41\n0.45\n0.57\n1.57\n2.15\n-0.36\n0.05\n0.08\n-0.36\n1.19\n0.87\n1.73\n1.16\nApr\n0.68\n-0.04\n1.64\n0.41\n0.40\n0.49\n-13.33\n0.19\n4.01\n-0.83\n-0.22\n0.26\n-0.12\n0.13\nMay\n0.19\n0.09\n1.61\n-0.24\n0.27\n-0.73\n-13.20\n-0.43\n4.02\n0.34\n-0.60\n-0.06\n-0.72\n-0.27\nJun\n0.16\n0.14\n0.00\n-0.30\n-0.13\n-0.88\n-0.38\n-0.38\n0.00\n-0.11\n-0.24\n-0.20\n-0.61\n-0.33\nJul\n0.01\n0.08\n-0.02\n-0.22\n-0.09\n0.17\n-0.37\n0.01\n0.00\n-0.13\n0.02\n-0.03\n-1.47\n-0.51\nAug\n-0.59\n-0.22\n0.78\n-0.47\n0.25\n0.38\n-0.18\n-0.20\n1.23\n0.99\n-0.46\n0.24\n-2.03\n-0.53\nSept\n-0.39\n-0.29\n1.19\n-0.17\n0.07\n0.21\n-0.15\n-0.17\n1.25\n1.16\n-0.01\n0.40\n-1.08\n-0.10\nOct\n1.23\n0.04\n0.38\n-0.25\n-0.16\n-0.18\n-0.08\n-0.22\n0.04\n0.11\n0.21\n0.13\n-0.14\n0.04\nNov\n1.59\n-0.19\n-0.03\n-0.73\n0.16\n-0.45\n-0.09\n-0.28\n5.59\n1.00\n-0.47\n0.39\n-0.56\n0.08\nDec\n0.53\n-0.19\n0.37\n-0.66\n0.21\n0.15\n0.04\n-0.36\n5.57\n1.09\n-0.73\n0.51\n-1.00\n0.01\n2014:Jan\n0.34\n-0.07\n0.38\n-0.28\n-0.11\n0.29\n0.05\n-0.29\n0.01\n0.16\n-0.55\n0.09\n0.03\n0.07\nFeb\n0.19\n-0.16\n-0.11\n-0.07\n-0.13\n0.09\n0.00\n-0.11\n0.24\n0.08\n-0.01\n-0.01\n0.61\n0.19\nMar\n0.14\n-0.22\n-0.93\n-0.19\n-0.11\n0.09\n0.00\n-0.11\n0.05\n0.09\n-0.31\n-0.28\n0.47\n-0.03\nApr\n0.24\n-0.25\n-1.06\n-0.95\n0.27\n0.41\n-0.01\n0.29\n12.89\n-1.09\n-0.26\n0.81\n-0.42\n0.41\nMay\n0.37\n-0.28\n-1.00\n-1.16\n0.18\n0.56\n-0.04\n0.13\n12.72\n-1.15\n-0.76\n0.77\n-0.90\n0.23\nJun\n0.37\n-0.10\n-0.19\n-0.99\n0.45\n0.53\n-0.05\n0.05\n12.94\n-1.26\n-0.39\n1.06\n-0.87\n0.43\nTABLE 5.5 : QUARTERLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \\1\n( DECEMBER 2012 = 100)\nNON-FOOD INFLATION\n \n \nS23 \n \n \n \nFOOD \nINFLATION\nALL\nALCOHOLIC \nBEVERAGES \nCLOTHING\nHSING, \nWATER,\nFURNITURE HEALTH\nTRANSPORT COMMUNICATION RECREATION &\nEDUCATION\nRESTAURANTS \n&\nMISC.\nTOTAL \nNON\nFOOD & \nITEMS\n& TOBACCO\nFOOTWEAR\nELECTRICTY, \nGAS\nAND\nCULTURE\nHOTELS\nGOODS &\nFOOD\nNON \nALCOHOLIC \nBEVERAGES\n& OTHER\nEQUIPMENT\nSERVICES\nFUELS\nWEIGHTS\n4.38\n6.05\n17.74\n9.91\n2.16\n9.76\n3.41\n2.1\n5.67\n1.38\n3.91\n66.47\n33.53\n100\n2009\n2010\n-2.00\n-6.14\n8.20\n-1.40\n0.60\n5.30\n-4.10\n-2.00\n3.40\n9.64\n-0.80\n2.70\n4.20\n3.10\n2011\n0.20\n1.59\n4.40\n3.20\n-0.30\n7.50\n1.70\n0.20\n4.00\n4.96\n4.50\n3.10\n4.00\n3.50\n2012\n-0.80\n0.80\n11.90\n2.30\n1.60\n2.00\n8.10\n0.80\n8.90\n6.20\n2.80\n3.50\n4.60\n3.70\n2013\n4.10\n-0.20\n4.50\n0.00\n2.90\n5.30\n-10.20\n-0.70\n10.70\n1.60\n0.80\n1.60\n1.70\n1.60\n2013:Jan\n-0.78\n-0.74\n3.63\n-1.08\n2.11\n1.61\n-13.99\n-1.03\n11.29\n2.03\n-0.87\n1.61\n3.72\n2.51\nFeb\n2.10\n-0.74\n10.70\n0.65\n1.94\n6.42\n-0.36\n-0.23\n12.96\n1.92\n1.32\n1.97\n4.68\n2.98\nMar\n6.24\n-0.82\n7.11\n0.64\n3.25\n8.27\n0.05\n-0.17\n13.07\n2.98\n1.93\n2.20\n4.16\n2.75\nApr\n5.83\n-0.35\n5.45\n0.71\n3.31\n8.71\n-0.05\n-0.19\n8.36\n1.71\n1.64\n2.04\n3.58\n2.49\nMay\n5.88\n-0.38\n4.34\n0.92\n3.81\n7.79\n-13.29\n-1.27\n12.55\n1.69\n1.19\n1.94\n3.54\n2.20\nJun\n2.98\n-0.50\n3.95\n0.66\n3.60\n6.85\n-13.13\n-0.83\n12.56\n1.44\n1.04\n1.54\n2.90\n1.86\nJul\n4.84\n0.15\n2.64\n0.16\n3.03\n6.85\n-13.39\n-0.33\n7.74\n1.35\n1.22\n1.40\n1.74\n1.24\nAug\n4.43\n0.30\n2.53\n-0.05\n2.84\n4.96\n-13.47\n-0.60\n12.70\n0.71\n1.00\n1.06\n0.94\n1.28\nSept\n1.99\n0.61\n3.03\n-0.40\n3.84\n5.04\n-13.57\n-0.69\n8.82\n1.60\n0.81\n1.45\n-0.32\n0.86\nOct\n5.23\n0.25\n3.69\n-0.37\n2.10\n5.06\n-13.65\n-1.01\n8.42\n1.23\n0.92\n1.48\n-0.73\n0.59\nNov\n5.94\n-0.07\n2.96\n-0.70\n2.21\n1.40\n-13.76\n-0.73\n9.05\n0.83\n-0.20\n1.25\n-1.50\n0.54\nDec\n4.26\n0.09\n3.51\n-1.03\n2.42\n1.16\n-13.83\n-0.92\n11.19\n2.06\n-0.34\n1.57\n-2.19\n0.33\n2014:Jan\n5.03\n0.03\n3.63\n-1.07\n1.87\n1.62\n-14.00\n-1.12\n11.30\n2.18\n-0.43\n1.67\n-2.08\n0.41\nFeb\n2.21\n-0.43\n3.09\n-1.35\n0.44\n0.05\n-13.86\n-1.08\n11.47\n1.32\n-1.45\n-0.13\n-3.26\n-0.49\nMar\n1.68\n-0.53\n2.20\n-1.83\n0.41\n-0.44\n-13.68\n-1.21\n11.25\n2.48\n-1.82\n0.51\n-3.71\n-0.91\nApr\n1.78\n-0.55\n0.46\n-2.60\n0.22\n-0.11\n-0.62\n-0.93\n20.71\n1.13\n-1.56\n1.50\n-3.73\n-0.26\nMay\n1.91\n-0.83\n0.39\n-2.62\n0.29\n0.86\n-0.60\n-0.64\n20.79\n0.95\n-1.69\n1.62\n-3.75\n-0.19\nJun\n1.68\n-0.81\n0.40\n-2.54\n0.64\n0.97\n-0.27\n-0.84\n20.79\n0.99\n-1.67\n1.67\n-3.54\n-0.08\nTABLE 5.6 : ANNUAL INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \\1\n( DECEMBER 2012 = 100)\nNON-FOOD INFLATION\n \n \nS24 \n \n \n \nJan-13\nFeb-13 Mar-13\nApr-13 May-13 Jun-13\nJul-13\nAug-13\nSep-13\nOct-13\nNov-13 Dec-13\nJan-14\nFeb-14 Mar-14\nApr-14 May-14 Jun-14\nMerchandise Imports (excl. energy)\n385.1\n323.3\n279.0\n337.9\n351.2\n322.7\n357.0\n290.9\n330.9\n333.5\n340.6\n347.3\n350.5\n275.9\n262.1\n277.8\n280.4\n313.2\n- Consumption Goods\n157.7\n125.5\n109.7\n137.0\n124.2\n93.4\n130.7\n114.2\n139.8\n140.1\n166.6\n162.2\n194.8\n137.9\n130.0\n144.5\n138.0\n148.8\n- Capital Goods\n134.5\n118.0\n93.1\n92.9\n120.8\n117.6\n131.1\n92.1\n115.7\n102.8\n92.4\n120.0\n92.4\n92.1\n90.0\n89.4\n100.5\n105.2\n- Intermediate Goods\n92.9\n79.8\n76.2\n108.0\n106.2\n111.7\n95.2\n84.6\n75.4\n90.6\n81.6\n65.1\n63.3\n45.9\n42.1\n43.9\n41.9\n59.2\nEnergy (Fuel & Electricity)\n124.3\n94.8\n97.5\n110.4\n117.2\n129.3\n112.8\n144.0\n114.1\n116.0\n109.3\n122.5\n125.4\n99.0\n138.9\n117.5\n129.8\n128.6\nService Payments\n162.1\n190.3\n237.9\n137.6\n156.4\n129.8\n138.3\n135.0\n127.1\n188.3\n130.5\n138.2\n191.4\n122.2\n126.8\n110.7\n120.5\n129.6\n- Technical, Professional & consult\n91.3\n115.1\n190.5\n85.2\n105.6\n87.3\n74.1\n62.1\n68.4\n122.8\n74.4\n85.9\n82.3\n69.8\n69.9\n64.1\n72.2\n77.3\n- Software\n4.5\n3.7\n2.2\n5.4\n3.9\n4.6\n6.0\n5.8\n4.1\n3.9\n2.1\n3.6\n4.2\n5.6\n4.0\n3.6\n4.7\n10.4\n- Other (tourism, edu, freight etc)\n66.3\n71.4\n45.2\n47.0\n47.0\n37.9\n58.2\n67.2\n54.6\n61.6\n54.0\n48.7\n104.9\n46.8\n52.9\n43.0\n43.6\n41.9\nIncome Payments (Profits, Dividends)\n29.5\n15.2\n38.9\n18.9\n32.7\n52.1\n22.3\n38.7\n35.2\n32.1\n36.5\n35.1\n28.5\n23.1\n23.9\n30.1\n41.4\n27.9\nCapital Remittances (outward)\n100.3\n60.1\n67.7\n112.9\n97.3\n113.8\n91.0\n65.4\n150.0\n126.3\n128.6\n103.8\n143.7\n55.4\n155.8\n121.8\n109.5\n183.2\n- External Loan Repayments \n49.0\n38.8\n56.3\n58.7\n51.3\n47.6\n58.5\n38.0\n79.7\n71.7\n58.1\n49.8\n63.0\n35.8\n133.6\n101.7\n89.8\n143.9\n- Foreign Investment\n51.3\n21.3\n11.4\n54.2\n46.0\n66.3\n32.5\n27.5\n70.3\n54.6\n70.5\n54.1\n80.7\n19.6\n22.2\n20.1\n19.7\n39.3\nOther Payments\n0.4\n0.7\n0.5\n7.5\n2.7\n12.2\n3.6\n4.9\n6.5\n2.0\n2.5\n3.2\n2.6\n3.1\n1.6\n8.6\n0.8\n1.4\nTOTAL\n801.6\n684.3\n721.5\n725.2\n757.5\n760.0\n724.9\n679.0\n763.8\n798.3\n747.9\n750.2\n842.1\n578.6\n709.1\n666.6\n682.4\n783.8\nTable 6.1: MONTHLY CROSS BORDER PAYMENTS \n(US$ Millions)\n \n \nS25 \n \n \n \n(US$ Millions)\nAgriculture\nHorticulture\nManufacturing\nMining\nTobacco\nTourism\n Transport & \nTelecom \nOther Services\nTotal\n2013\nJan\n5.3\n2.1\n60.8\n300.7\n217.5\n1.2\n3.0\n0.8\n591.5\nFeb\n22.7\n6.3\n93.9\n485.0\n319.1\n4.2\n24.3\n0.6\n956.2\nMar\n32.1\n8.5\n136.5\n687.0\n353.0\n8.8\n148.8\n0.8\n1,375.4\nApr\n43.0\n12.7\n164.9\n806.6\n382.9\n15.0\n163.2\n1.1\n1,589.4\nMay\n53.9\n14.4\n202.5\n932.0\n429.3\n20.6\n158.8\n1.1\n1,812.6\nJun\n61.8\n18.8\n280.0\n1,150.9\n459.2\n27.6\n179.6\n1.4\n2,179.3\nJul\n75.6\n21.8\n331.3\n1,279.8\n474.0\n38.8\n200.8\n1.9\n2,424.0\nAug\n89.6\n23.2\n426.9\n1,417.8\n504.8\n44.9\n219.9\n1.9\n2,729.0\nSept\n103.6\n25.2\n467.1\n1,651.8\n548.6\n53.3\n233.2\n4.4\n3,087.2\nOct\n114.4\n27.2\n542.7\n2,105.2\n681.0\n59.4\n249.2\n4.4\n3,783.5\nNov\n130.5\n29.6\n568.8\n2,257.3\n772.7\n90.2\n283.3\n14.2\n4,146.5\nDec\n138.4\n31.6\n602.6\n2,418.8\n862.8\n96.9\n309.2\n14.7\n4,475.0\n2014\nJan\n8.9\n2.6\n38.8\n200.6\n139.7\n0.5\n15.0\n0.1\n406.2\nFeb\n23.0\n3.9\n61.4\n355.7\n207.4\n7.7\n36.7\n0.7\n696.5\nMar\n32.0\n6.1\n86.5\n497.7\n280.2\n14.0\n60.2\n1.9\n978.6\nTable 6.2: MONTHLY CROSS BORDER RECEIPTS \n \n \nS26 \n \n \n \nTABLE 6.3: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR \n(US$ millions)\nEnd Period\n2001\n2002\n2003\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\nLong-Term External Debt\n3,255\n3,327\n3,644\n3,927\n3,805\n3,965\n4,032\n4,464\n4951\n5175\n6,096\n6,607\n7,370\nGovernment\n2,328\n2,376\n2,617\n2,844\n2,895\n3,024\n3,054\n3,464\n4037\n4095\n4,638\n4,929\n5,012\nBilateral Creditors\n1,115\n1,107\n1,255\n1,455\n1,438\n1,520\n1,520\n1,863\n2308\n2325\n2,597\n2,694\n2,928\nMultilateral Creditors\n1,213\n1,269\n1,362\n1,389\n1,457\n1,504\n1,524\n1,592\n1729\n1770\n2,041\n2,235\n2,084\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n10\n10\n0\n0\n0\n0\n0\nPublic Enterprises\n568\n616\n698\n714\n709\n766\n790\n825\n857\n938\n1,092\n1,198\n1,356\nBilateral Creditors\n315\n351\n403\n442\n439\n464\n474\n497\n453\n238\n711\n703\n858\nMultilateral Creditors\n253\n265\n295\n272\n270\n302\n316\n327\n403\n700\n382\n495\n498\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\n0\nMonetary Authorities\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\nMultilateral Creditors - IMF\n292\n279\n288\n291\n144\n130\n137\n140\n140\n138\n127\n125\n125\nPrivate\n67\n56\n41\n78\n57\n45\n51\n35\n57\n142\n366\n480\n1,002\nShort-Term External Debt\n167\n183\n169\n144\n173\n281\n387\n226\n1198\n1382\n1,286\n891\n1,564\nSupplier's Credits\n13\n26\n51\n69\n107\n122\n178\n41\n193\n286\n134\n30\n0\nReserve Bank\n642\n642\n615\n615\n614\nPrivate\n154\n157\n118\n75\n66\n159\n209\n185\n363\n454\n537\n246\n950\nTotal External Debt\n3,422\n3,510\n3,812\n4,071\n3,978\n4,246\n4,607\n4,690\n6,289\n6,695\n7,382\n7,498\n8,934\nSOURCE: Ministry of Finance and Reserve Bank of Zimbabwe\n \n \nS27 \n \n \n \nEnd Period\n2001\n2002\n2003\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n(US$ millions)\nTotal Medium to Long-Term External Debt\n3,255\n3,327\n3,644\n3,927\n3,805\n3,965\n4,032\n4,464\n5,091\n5,313\n6,096\n6,607\n7,370\nPublic and Publicly Guaranteed Debt \n3,188\n3,271\n3,603\n3,849\n3,748\n3,920\n3,981\n4,429\n5,034\n5,171\n5,730\n6,127\n6,368\nBilateral Creditors\n1,430\n1,458\n1,658\n1,897\n1,877\n1,984\n1,994\n2,360\n2,761\n2,563\n3,307\n3,397\n3,786\nMultilateral Creditors\n1,758\n1,813\n1,945\n1,952\n1,871\n1,936\n1,976\n2,059\n2,272\n2,608\n2,423\n2,730\n2,582\nPrivate Creditors\n0\n0\n0\n0\n0\n0\n10\n10\n0\n0\n0\n0\n0\nPrivate Non-Guaranteed Long term\n67\n56\n41\n78\n57\n45\n51\n35\n57\n142\n366\n480\n1,002\nShort-Term External Debt\n167\n183\n169\n144\n173\n281\n387\n226\n1198\n1382\n1,286\n891\n1,564\n Public and Publicly Guaranteed Debt\n13\n26\n51\n69\n107\n122\n178\n41\n193\n286\n134\n30\n0\n Reserve Bank\n642\n642\n615\n615\n614\n Private\n154\n157\n118\n75\n66\n159\n209\n185\n363\n454\n537\n246\n950\nTotal External Debt\n3,422\n3,510\n3,812\n4,071\n3,978\n4,246\n4,419\n4,690\n6,289\n6,695\n7,382\n7,498\n8,934\nGross Domestic Product\n10,887\n6,715\n5,037\n4,299\n2,918\n6,645\n4,000\n3,175\n8157\n9457\n10,956\n12,472\n12,973\nExternal Debt / GDP\n31.4%\n52.3%\n75.7%\n94.7%\n136.3%\n63.9%\n110.5%\n147.7%\n77.1%\n70.8%\n67.4%\n60.1%\n68.9%\nSOURCE: Ministry of Finance and Reserve Bank of Zimbabwe\nTABLE 6.4: External Debt Outstanding by Source\n(US$ millions)\n \n \nS28 \n \n \n \nTABLE 6.5 EXTERNAL DEBT SERVICE AND DEBT SERVICE RATIOS\n (US$ MILLIONS)\n2009\n2010\n2011\n2012\n2013\nGovernment\n170.1\n188.0\n169.9\n171.6\n240.0\nCapital\n131.3\n153.9\n141.9\n136.1\n156.0\nInterest\n38.9\n34.1\n28.0\n35.5\n84.0\nParastatals\n42.6\n35.8\n30.0\n0.0\n0.0\nCapital\n34.4\n29.3\n24.7\n0.0\n0.0\nInterest\n8.2\n6.5\n5.3\n0.0\n0.0\nPrivate\n51.0\n50.3\n238.5\n358.8\n315.0\nCapital\n45.0\n42.8\n178.3\n280.5\n270.0\nInterest\n6.0\n7.5\n60.2\n78.3\n45.0\nTotal\n263.7\n274.1\n438.4\n530.4\n555.0\nCapital\n210.7\n226.0\n344.9\n416.6\n426.0\nInterest\n53.1\n48.1\n93.5\n113.8\n129.0\nExports of Goods\nand Services\n1,591.3\n3,541.0\n4,770.9\n4,076.2\n4,480.0\nDebt Service ratio\n16.6%\n7.7%\n9.2%\n13.0%\n12.4%\nCapital Service Ratio\n13.2%\n6.4%\n7.2%\n10.2%\n10.2%\nInterest Service ratio\n3.3%\n1.4%\n2.0%\n2.8%\n2.8%\nNote: Figures reflect scheduled debt service.\n \nSOURCE: Ministry of Finance and Reserve Bank of Zimbabwe\n \n \nS29 \n \n \n \nGross\nNet Investment\n Gross\nGross\n Gross\nDomestic\nIncome Paid\n National\nDomestic\nNational\nGross\n Gross\nProduct\nto other\n Product\nProduct\nProduct\nDomestic\nNational\nPeriod\nCountries\nProduct\nProduct\n \n2009\n8,157.1\n-83.6\n8,073.5\n8,157.1\n8,073.5\n643.5\n636.9\n2010\n9,456.8\n-84.8\n9,372.0\n9,085.0\n9,042.7\n520.0\n517.6\n2011\n10,956.2\n-210.4\n10,745.8\n10,166.6\n10,066.7\n627.0\n620.8\n2012\n12,472.4\n-217.9\n12,254.5\n11,240.8\n11,120.6\n693.0\n685.6\n2013\n13,490.2\n-225.7\n13,264.6\n11,744.8\n11,602.1\n903.4\n892.5\n Per Capita\n Constant Prices\nCurrent Prices\n Constant Prices\n TABLE 7.1: REAL GROSS DOMESTIC AND NATIONAL PRODUCT PER CAPITA AT MARKET PRICES\nUS$ Millions\n(at market prices)\n \n \nS30 \n \n \n \n \nAgriculture\n Mining \nManufacturing\nElectricity\nFinance\nDistribution\n Transport\n Public\nHunting and\nand\n and\nConstruction\nand\nReal\nHotels and\nand Comm-\nAdministration\nOther\nPeriod\nFishing\n Quarrying\n Water\nInsurance\nEstate\nRestaurants\n unication\nEducation\nHealth\nServices\nTotal\n \n2009\n1,038.4\n560.8\n1,066.2\n278.5\n136.7\n571.6\n110.5\n1,207.1\n1,080.4\n186.4\n209.7\n35.2\n342.8\n6,824.3\n2010\n1,113.3\n770.3\n1,087.2\n332.8\n156.0\n618.8\n115.8\n1,313.5\n1,131.6\n243.0\n287.3\n38.7\n393.2\n7,601.6\n2011\n1,129.0\n958.1\n1,237.7\n354.3\n257.6\n669.9\n172.5\n1,370.0\n1,131.7\n290.5\n470.8\n39.1\n437.4\n8,518.7\n2012\n1,217.4\n1,034.5\n1,303.9\n355.2\n318.1\n857.4\n274.3\n1,428.9\n1,207.5\n345.9\n650.1\n37.7\n390.6\n9,421.6\n2013\n1,363.9\n1,186.5\n1,456.9\n492.1\n398.6\n1,072.5\n340.5\n1,909.1\n1,374.4\n401.9\n879.3\n123.0\n399.9\n11,365.2\n \n \n \n \n \n1 . Source : Central Statistical Office .\n2 . Includes domestic services and allowance for imputed banking service charges .\nTABLE 7.2 : GROSS DOMESTIC PRODUCT AT FACTOR COST BY INDUSTRY\n US$ millions\n (at current prices )\nTABLE 7.3: EXPENDITURE ON GROSS DOMESTIC PRODUCT/1\n US$ Millions\n (at current prices)\nNet\n Private\n Gross\nNet\nExpenditure\n Private\nGvt\n Non-profit\n Fixed\n Increase\n Total\nExport of\n on Gross\n Consumption\nCurrent\n Making\n Captital\n in\n Statistical\n Domestic\nGoods and\n Domestic\nPeriod\nExpenditure\n Bodies\n Formation\n Stocks\nDiscrepancy\n Expenditure\nServices\n Product\n2009\n9,797.5\n672.4\n412.7\n959.7\n272.3\n0.0\n12,114.7\n-3,957.6\n8,157.1\n2010\n8,161.6\n1,111.5\n543.5\n2,048.5\n210.9\n0.0\n12,076.1\n-2,619.2\n9,456.8\n2011\n11,182.0\n1,804.8\n555.0\n2,063.8\n389.6\n0.0\n15,995.2\n-5,039.0\n10,956.2\n2012\n11,840.7\n1,978.6\n566.5\n2,079.2\n-392.2\n0.0\n16,072.8\n-3,600.3\n12,472.4\n2013\n13,027.2\n2,113.2\n788.6\n1,752.8\n536.6\n0.0\n17,687.1\n-4,196.9\n13,490.2\n1 . Source: Zimstat\n \n \nS31 \n \n \n \nPeriod\n Gold\nPlatinum\nPalladium\nNickel\nCopper\nCoal\nChrome\nRhodium\nOther/1\nTotal\n2009\n157.2\n239.1\n0.0\n62.2\n15.4\n58.0\n18.4\n24.1\n47.0\n621.3\n2010\n380.4\n409.1\n100.7\n111.2\n28.5\n97.0\n56.9\n50.3\n12.9\n1,246.9\n2011\n658.1\n538.3\n178.3\n175.5\n50.9\n103.9\n73.1\n52.4\n25.8\n1,856.3\n2012\n782.8\n464.5\n148.6\n112.4\n39.2\n83.9\n49.0\n31.2\n22.2\n1,733.8\n2013\n626.1\n554.0\n205.8\n158.1\n44.2\n171.5\n36.3\n32.9\n17.9\n1,846.7\n2013\nJan\n57.8\n41.5\n15.0\n10.1\n3.5\n15.1\n1.2\n2.6\n6.5\n153.4\nFeb\n51.1\n38.4\n19.0\n23.4\n4.2\n14.7\n1.1\n3.2\n14.2\n169.3\nMar\n56.1\n41.1\n17.0\n10.7\n3.8\n15.3\n1.4\n3.0\n9.8\n158.2\nApr\n55.6\n47.5\n15.2\n9.9\n3.4\n13.0\n1.3\n2.7\n1.0\n147.9\nMay\n55.7\n42.4\n17.3\n10.6\n3.7\n12.9\n2.2\n3.0\n9.1\n156.9\nJun\n49.0\n41.0\n18.7\n10.7\n4.1\n19.2\n3.1\n3.1\n11.8\n160.5\nJul\n52.8\n33.0\n17.1\n13.0\n3.6\n16.8\n3.2\n2.6\n11.5\n153.5\nAug\n51.3\n40.0\n16.8\n12.0\n3.5\n16.8\n3.9\n2.5\n4.5\n151.3\nSept\n49.5\n36.4\n17.3\n18.0\n3.6\n15.2\n5.3\n2.6\n11.2\n159.1\nOct\n51.4\n43.3\n15.8\n15.6\n4.0\n16.4\n4.6\n2.3\n1.0\n152.1\nNov\n46.9\n37.7\n18.6\n15.5\n3.7\n8.4\n4.3\n2.7\n9.5\n147.4\nDec\n44.8\n22.1\n18.0\n12.6\n3.2\n7.6\n4.3\n2.6\n20.0\n137.2\n2014\nJan\n44.0\n42.4\n16.7\n15.2\n3.6\n7.7\n3.2\n2.4\n12.7\n147.9\nFeb\n42.7\n41.4\n17.1\n15.4\n3.3\n7.4\n3.6\n2.6\n14.0\n147.6\nMar\n48.9\n39.9\n16.6\n11.2\n3.0\n8.1\n3.9\n2.6\n5.7\n139.9\nSource: Zimstat\n1. Other minerals include Ferrosilicon, Iron ore, Iron pyrites and magnesite\nTable 7.4: MINERAL PRODUCTION\nUS$ Millions\n \n \nS32 \n \n \n \nBy Hwange \nPower station\nBy Kariba \nPower \nStation\nBy Other \nPower \nStation\nIPPs\nTotal from \nZimbabwe\nDrawings from \nInterconnected \nsystem\nFrom Other non \ninter-connected \nsystem\nNet imports\nTotal\n2009\n2010\n2,635.6\n5,762.8\n74.5\n0.0\n8,472.9\n9,496.2\n0.0\n694.4\n10,190.6\n2011\n3,420.0\n5,201.8\n397.4\n0.0\n9,019.2\n10,008.7\n0.0\n587.5\n10,596.2\n2012\n3,133.2\n5,387.3\n442.1\n0.0\n8,962.7\n9,788.4\n0.0\n375.1\n10,163.6\n2013\n3,826.9\n4,981.8\n506.1\n0.0\n9,314.8\n10,704.1\n0.0\n532.7\n11,236.8\n2013\nJan\n237.3\n377.1\n27.7\n0.0\n642.1\n860.9\n0.0\n114.9\n975.8\nFeb\n220.2\n393.3\n29.6\n0.0\n643.1\n813.1\n0.0\n81.7\n894.8\nMar\n331.7\n402.2\n29.6\n0.0\n763.5\n870.3\n0.0\n51.8\n922.1\nApr\n355.0\n334.4\n34.5\n0.0\n723.9\n799.1\n0.0\n67.0\n866.1\nMay\n249.0\n466.6\n36.7\n0.0\n752.3\n837.0\n0.0\n70.7\n907.7\nJun\n365.1\n457.2\n40.3\n0.0\n862.6\n982.2\n0.0\n5.5\n987.7\nJul\n437.9\n462.4\n46.1\n0.0\n946.4\n1,074.6\n0.0\n-5.1\n1,069.5\nAug\n395.4\n477.2\n38.9\n0.0\n911.5\n1,041.0\n0.0\n-27.8\n1,013.2\nSept\n353.8\n399.2\n49.9\n0.0\n802.9\n910.9\n0.0\n5.6\n916.5\nOct\n322.3\n379.4\n61.7\n0.0\n763.4\n841.8\n0.0\n80.5\n922.3\nNov\n271.8\n428.5\n55.9\n0.0\n756.2\n854.4\n0.0\n42.1\n896.5\nDec\n287.4\n404.3\n55.2\n0.0\n746.9\n818.8\n0.0\n45.8\n864.6\n2014\nJan\n258.9\n424.6\n54.3\n2.9\n740.7\n824.3\n0.0\n51.0\n875.3\nFeb\n179.0\n439.8\n47.4\n3.1\n669.3\n739.0\n0.0\n34.3\n773.3\nMar\n250.5\n439.2\n56.5\n3.5\n749.7\n757.4\n0.0\n79.1\n836.5\nSource: Zimstat\nTable 7.5: ELECTRICITY ENERGY PRODUCED AND DISTRIBUTED\nInterconnected System\nEnergy Distributed in Zimbabwe\nGeneration Sent Out\nFrom other sources\n \n \nS33 \n \n \n \nFood-Stuffs \n(including \nstockfeeds)\nDrink and \nTobacco\nTextiles \nIncluding \nGinning\nClothing and \nFootwear\nWood and \nFurniture\nPaper, Printing \nand Publishing\nChemical and \nPetroleum \nProducts\nNon-metalic \nMineral Products\nMetals and \nMetal Products\nTransport and \nTransport \nEquipment\nOther \nManufacturing \nGroups\nAll Manufacturing \nGroups\nWeight\n135\n195\n110\n68\n31\n64\n115\n23\n221\n30\n8\n1000\n2011\nMean\n47.0\n69.7\n23.3\n10.2\n79.9\n18.2\n32.0\n69.5\n65.3\n32.1\n57.5\n49.2\n2012\nMean\n38.3\n90.7\n25.0\n9.9\n59.1\n26.1\n26.9\n70.1\n53.1\n72.4\n53.0\n49.9\n2013\nMean\n30.8\n75.4\n44.7\n9.7\n66.5\n32.1\n25.4\n78.7\n62.9\n45.5\n53.0\n49.6\n2012\nJan\n37.6\n89.5\n28.1\n5.3\n52.1\n14.0\n25.2\n69.3\n45.2\n46.1\n64.8\n44.9\nFeb\n39.0\n88.0\n36.4\n11.2\n64.7\n33.4\n31.4\n76.8\n50.7\n49.1\n64.6\n49.9\nMar\n36.2\n81.7\n34.4\n10.0\n64.8\n29.3\n29.4\n67.8\n45.6\n44.3\n41.2\n45.8\nApr\n39.5\n65.8\n23.9\n8.2\n67.0\n25.2\n26.6\n71.1\n46.0\n45.6\n55.4\n41.7\nMay\n39.9\n79.7\n24.6\n9.3\n66.0\n28.7\n27.4\n68.6\n44.9\n43.2\n62.8\n44.6\nJun\n37.9\n142.1\n25.4\n9.4\n74.0\n28.2\n28.7\n70.7\n46.6\n44.8\n48.3\n57.3\nJul\n37.8\n88.1\n21.4\n11.3\n52.6\n26.8\n27.7\n68.8\n44.9\n46.4\n53.8\n45.3\nAug\n37.9\n89.4\n21.5\n10.8\n59.1\n27.4\n27.5\n68.6\n45.4\n174.2\n50.9\n49.7\nSept\n39.0\n91.6\n22.4\n11.0\n47.3\n28.1\n28.6\n70.8\n33.8\n171.0\n50.4\n47.5\nOct\n38.5\n92.0\n22.1\n9.1\n54.1\n27.0\n27.7\n68.6\n45.3\n173.5\n49.5\n50.0\nNov\n38.4\n97.7\n24.4\n10.1\n55.4\n28.1\n28.2\n71.3\n46.8\n98.3\n50.8\n49.7\nDec\n37.4\n99.3\n20.3\n17.7\n57.4\n27.3\n17.7\n68.8\n44.5\n99.4\n49.2\n48.2\n2013\nJan\n30.6\n72.9\n36.6\n9.0\n55.9\n40.3\n10.7\n74.0\n59.6\n97.4\n64.8\n46.8\nFeb\n33.3\n77.0\n42.0\n10.8\n70.5\n37.7\n28.6\n80.3\n47.0\n105.7\n64.6\n48.7\nMar\n30.2\n73.1\n37.6\n9.7\n65.3\n40.9\n25.8\n84.2\n76.1\n98.2\n41.2\n52.8\nApr\n31.5\n59.7\n38.2\n9.8\n72.3\n30.9\n26.7\n77.3\n56.4\n99.7\n55.4\n45.7\nMay\n31.2\n76.2\n37.7\n9.6\n67.1\n29.8\n25.8\n77.3\n64.1\n96.8\n62.8\n50.2\nJun\n31.5\n76.0\n37.9\n9.9\n66.9\n30.2\n27.8\n81.0\n65.4\n25.8\n48.3\n48.6\nJul\n30.5\n80.8\n52.3\n9.6\n84.5\n29.5\n27.7\n77.1\n64.5\n25.7\n53.8\n51.2\nAug\n30.7\n78.9\n51.9\n9.7\n62.0\n29.4\n28.4\n77.8\n66.0\n26.8\n50.9\n50.6\nSept\n30.9\n78.1\n53.2\n10.0\n68.5\n30.3\n27.8\n80.5\n66.0\n26.8\n50.4\n50.8\nOct\n29.6\n78.1\n51.4\n9.7\n61.7\n29.4\n27.0\n77.6\n63.8\n25.8\n49.5\n49.5\nNov\n30.5\n79.1\n53.2\n10.1\n64.6\n30.3\n27.9\n80.3\n65.9\n25.8\n50.8\n50.8\nDec\n29.6\n77.6\n51.4\n9.2\n62.6\n29.3\n28.6\n77.8\n63.7\n25.7\n49.2\n49.6\nTABLE 7.6: VOLUME OF MANUFACTURING INDEX (VMI)\n(1990=100)\n \n \nS34", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Quarterly_Economic_Reviews/qerjune2014.pdf"}
{"doc_id": "8041b8f47c8e0174c9ba9a1d1ae5159e", "text": "Vol. 27 No. 17 \n \n \nWeek Ending \n25th April 2025 \nWeekly Economic \nHighlights \nTABLE OF CONTENTS \n \n1. \nOVERVIEW ............................................................................ 1 \n2. \nINTEREST RATES ................................................................ 1 \n3. \nEQUITY MARKETS .............................................................. 3 \n4. \nCLEARING AND SETTLEMENT ACTIVITY .................. 5 \n5. \nENERGY PRICES .................................................................. 5 \n6. \nGOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND \nGOLD BACKED DIGITAL TOKENS (GBDT) .................. 5 \n7. \nEXTERNAL SECTOR ........................................................... 6 \n \n \n \n 1 \n1. OVERVIEW \n \n \n \nThis report provides a snapshot of key developments in the domestic monetary and financial sectors during \nthe week ending 25th April 2025. It includes updates on money and capital markets, national payment systems, \nexchange rates, and international commodity prices. \nThe local currency savings rate, as well as the minimum and maximum deposit rates for all tenors, remained \nconstant during the week under review. Similarly, foreign currency savings rates and deposit rates for all \ntenors were unchanged. \nDuring the week under review, local currency lending rates for both individual and corporate clients declined. \nLikewise, foreign currency lending rates decreased for both individual and corporate clients, except for the \nindividual maximum lending rate, which increased. \nThe Zimbabwe Stock Exchange (ZSE) continued on a bearish trend for the third consecutive week, while the \nVictoria Falls Stock Exchange (VFEX) exhibited bullish sentiments. As a result, the ZSE Share Index declined \nby 3.70%, closing at 190.95 points, while the VFEX All Share Index gained 3.27%, closing at 113.89 points. \nThe value of aggregate transactions processed through the National Payment Systems (NPS) declined by \n2.60%, from ZiG34.66 billion to ZiG33.76 billion. This decline was underpinned by reduced processing \nthrough the RTGS payment platforms. \nThe Zimbabwe Gold (ZiG) marginally depreciated by 0.03%, from an average of ZiG26.81 per US$1 in the \nprevious week to ZiG26.82 per US$1, during the week under review. \nWeekly average international prices for gold, platinum, and nickel increased. The rise in gold prices was \ndriven by a weakening US dollar amid uncertainty surrounding the impact of U.S.-China trade tensions on the \nglobal economy. Platinum prices rose due to optimism about increased demand, spurred by anticipated U.S. \ntariff reductions and reports suggesting that carmakers might be exempted from new tariffs—boosting \nplatinum's use in catalytic converters. Nickel prices increased due to potential supply disruptions in major \nproducing countries, particularly Indonesia. In addition, brent crude oil prices increased, driven by newly \nimposed U.S. sanctions on Iran and rising equity markets. However, prices for palladium and lithium declined \nduring the week under review, due to demand constraints and uncertainty over potential U.S. tariffs on China, \nwhich could disrupt global trade flows. \nAs of day 36 of the tobacco selling season, a cumulative total of 104.32 million kilograms of tobacco had been \nsold, a 7.66% decrease from the 112.98 million kilograms sold during the same period in 2024. In value terms, \ntobacco sales dropped by 11.81%, from US$403.42 million in 2024 to US$355.77 million during the period \nunder review. \n \n \n \n \n 2 \n2. INTEREST RATES \n \nAverage commercial bank deposit rates (Local Currency (ZiG) (%) \nZiG Deposit rates \n04 April 2025 \n11 April 2025 \n17 April 2025 \n25 April 2025 \nSavings \n \n \n \n \nMinimum \n3.81 \n3.81 \n3.81 \n3.81 \nMaximum \n4.14 \n4.14 \n4.14 \n4.14 \n1-month deposit \n \n \n \n \nMinimum \n5.66 \n5.66 \n5.66 \n5.66 \nMaximum \n8.66 \n8.33 \n8.66 \n8.66 \n3-months deposit \n \n \n \n \nMinimum \n5.95 \n5.95 \n5.95 \n5.95 \nMaximum \n8.15 \n8.87 \n8.93 \n8.93 \n6-months deposit \n \n \n \n \nMinimum \n5.56 \n5.56 \n5.56 \n5.56 \nMaximum \n7.76 \n7.76 \n8.23 \n8.23 \n12-months deposit \n \n \n \n \nMinimum \n5.57 \n5.57 \n5.57 \n5.57 \nMaximum \n8.04 \n7.77 \n8.24 \n8.24 \nOver 1 year \n \n \n \n \nMinimum \n5.58 \n5.58 \n5.58 \n5.58 \nMaximum \n7.78 \n7.78 \n8.25 \n8.25 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nAverage commercial bank deposit rates (Foreign Currency (US$) (%) \nUS$ Deposit rates \n04 April 2025 \n11 April 2025 \n17 April 2025 \n25 April 2025 \nSavings \n \n \n \n \nMinimum \n1.67 \n1.67 \n1.67 \n1.67 \nMaximum \n1.86 \n1.86 \n1.86 \n1.86 \n1-month deposit \n \n \n \n \nMinimum \n3.72 \n3.72 \n3.72 \n3.72 \nMaximum \n5.72 \n5.67 \n5.67 \n5.67 \n3-month deposit \n \n \n \n \nMinimum \n4.38 \n4.38 \n4.38 \n4.38 \nMaximum \n6.53 \n6.53 \n6.53 \n6.53 \n6-month deposit \n \n \n \n \nMinimum \n4.18 \n4.18 \n4.18 \n4.18 \nMaximum \n6.71 \n6.71 \n6.71 \n6.71 \n12-Month deposit \n \n \n \n \nMinimum \n4.25 \n4.25 \n4.25 \n4.25 \nMaximum \n6.53 \n6.22 \n6.44 \n6.44 \nOver 1 year \n \n \n \n \nMinimum \n4.36 \n4.36 \n4.36 \n4.36 \nMaximum \n6.31 \n6.61 \n6.61 \n6.61 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \n \n \n 3 \nCommercial bank weighted lending rates (Local Currency (ZiG) (%) \nZiG Lending rates \n04 April 2025 \n11 April 2025 \n17 April 2025 \n25 April 2025 \nIndividuals \n \n \n \n \nMinimum \n42.28 \n42.20 \n42.79 \n42.16 \nMaximum \n47.91 \n47.83 \n48.42 \n47.82 \nCorporates \n \n \n \n \nMinimum \n40.45 \n40.47 \n40.64 \n40.43 \nMaximum \n45.99 \n46.02 \n46.89 \n46.21 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial bank weighted lending rates (Foreign Currency (US$) (%) \nUS$ Lending rates \n04 April 2025 \n11 April 2025 \n17 April 2025 \n25 April 2025 \nIndividuals \n \n \n \n \nMinimum \n12.96 \n13.01 \n13.03 \n13.02 \nMaximum \n17.40 \n17.38 \n17.39 \n17.40 \nCorporates \n \n \n \n \nMinimum \n11.09 \n11.11 \n11.01 \n10.98 \nMaximum \n16.18 \n16.20 \n16.48 \n16.16 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nCommercial banks and building societies mortgage lending rates (%) \nMortgage Lending rates \n04 April 2025 \n11 April 2025 \n17 April 2025 \n25 April 2025 \nZiG Lending rates \n \n \n \n \nMinimum \n25.00 \n25.00 \n25.00 \n25.00 \nMaximum \n50.00 \n50.00 \n50.00 \n50.00 \nUS$ Lending rates \n \n \n \n \nMinimum \n10.00 \n10.00 \n10.00 \n10.00 \nMaximum \n22.00 \n22.00 \n22.00 \n22.00 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n3. EQUITY MARKETS \n \n \nZSE Indicators \n \n \nAll \nShare \nIndex \n(points) \nTop 10 \nIndex \n(points) \nTop 15 \nIndex \n(points) \nMedium Cap \n(points) \nSmall Cap \n(points) \nMining \nIndex \n(points) \nGrand \nMarket Cap \n(ZiG \nbillion) \nMarket \nTurnover \n(ZiG \nmillion) \nVolume of \nShares \n(million) \n04-Apr-25 \n201.75 \n194.65 \n200.53 \n251.83 \n100.12 \n156.98 \n61.34 \n72.80 \n16.11 \n11-Apr-25 \n200.42 \n193.16 \n198.75 \n250.94 \n100.11 \n168.39 \n60.89 \n97.40 \n105.55 \n17-Apr-25 \n198.29 \n192.61 \n197.09 \n242.62 \n100.11 \n143.13 \n60.48 \n23.12 \n4.25 \n25-Apr-25 \n190.95 \n184.03 \n188.90 \n238.87 \n100.11 \n143.95 \n58.09 \n34.32 \n14.93 \nWeekly \nChange (%) \n(3.70) \n(4.45) \n(4.16) \n(1.55) \n0.00 \n0.57 \n(3.95) \n48.44 \n251.29 \nSource: Zimbabwe Stock Exchange, 2025 \n \n \nVFEX Indicators \nDate \n \nAll Share Index \nPoints \nGrand Market Capitalisation \n(US$ billion) \nMarket Turnover (US$ \nmillion) \nVolume of Shares (million) \n04-Apr-25 \n106.95 \n1.25 \n1.06 \n5.26 \n11-Apr-25 \n111.31 \n1.30 \n0.78 \n8.31 \n17-Apr-25 \n110.28 \n1.29 \n0.70 \n3.90 \n25-Apr-25 \n113.89 \n1.33 \n0.63 \n4.71 \nWeekly Change (%) \n3.27 \n3.10 \n(10.00) \n20.77 \nSource: Victoria Falls Stock Exchange, 2025 \n \n \n \n 4 \nFigure 1: ZSE and VFEX Indicators \n \n \n \n \n \n \n \nSource: Zimbabwe Stock Exchange and Victoria Falls Stock Exchange, 2025 \n \n \n \n40\n50\n60\n70\n80\n90\n100\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\nZiG Billion\nZSE Market Capitalisation \n10\n5010\n10010\n15010\n20010\n25010\n30010\n35010\n40010\n45010\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\nUS$ Thousand\nVFEX Market Turnover \nTrade\ndeal:\nFirst\nCapital Bank Limited\n(1,134.27\nmillion\nshares\nsold\nat\n(US$0.04\ncents\nper\nshare)\n1.1\n1.15\n1.2\n1.25\n1.3\n1.35\n1.4\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\nUS$ Billion\nVFEX Market Capitalisation \n95\n100\n105\n110\n115\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\nIndex\nVFEX All Share Index \n0\n20,000\n40,000\n60,000\n80,000\n100,000\n120,000\n140,000\n160,000\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\nZiG Thousands\nZSE Market Turnover \nLump-sum deals:\nEconet Wireless \nZimbabwe Limited, \nOK Zimbabwe \nLimited, Delta \nCorporation Limited\n90\n110\n130\n150\n170\n190\n210\n230\n250\n270\n20-Dec-24\n27-Dec-24\n03-Jan-25\n10-Jan-25\n17-Jan-25\n24-Jan-25\n31-Jan-25\n07-Feb-25\n14-Feb-25\n21-Feb-25\n28-Feb-25\n07-Mar-25\n14-Mar-25\n21-Mar-25\n28-Mar-25\n04-Apr-25\n11-Apr-25\n18-Apr-25\n25-Apr-25\nIndices\nZSE Indices \nAll Share Index (ZSE)\nTop 10 Index\nMining Index\n \n 5 \n4. CLEARING AND SETTLEMENT ACTIVITY \n Source: Reserve Bank of Zimbabwe, 2025 \n \n5. ENERGY PRICES \n \nEnergy Prices \n \n04 April 2025 \n11 April 2025 \n17 April 2025 \n25 April 2025 \nDomestic Energy Prices \nUS$ \nUS$ \nUS$ \nUS$ \nDiesel 50/ litre \n1.52 \n1.52 \n1.52 \n1.52 \nPetrol Blend E20/ litre \n1.53 \n1.53 \n1.53 \n1.53 \nLP Gas / kg \n1.57 \n1.57 \n1.57 \n1.57 \n \n \n \n \n \nInternational Energy \nPrices (Weekly average) \nUS$/barrel \nUS$/barrel \nUS$/barrel \nUS$/barrel \nCrude Oil Prices \n71.13 \n63.79 \n65.40 \n66.47 \n Source: Zimbabwe Energy Regulatory Authority and BBC 2025 \n \n6. GOLD PM FIX, MOSI-OA-TUNYA GOLD COINS AND GOLD BACKED DIGITAL TOKENS \n(GBDT) \n \nGold PM Fix and Gold Backed Digital Token Prices \nDate \nGold PM Fix \nGBDT ZiG Price per Mg \nGBDT US$ Price per Mg \nUS$/oz \nBuy \nSell \nBuy \nSell \n22-April-25 \n3, 305.65 \n2.71 \n2.99 \n0.1010 \n0.1116 \n23-April-25 \n3,433.55 \n2.81 \n3.11 \n0.1049 \n0.1159 \n24-April-25 \n3,262.95 \n2.67 \n2.96 \n0.0997 \n0.1102 \n25-April-25 \n3,314.75 \n2.78 \n3.07 \n0.1012 \n0.1119 \nSource: London Bullion Market Association and Reserve Bank of Zimbabwe, 2025 \n \n \n \n \n \nPAYMENT STREAM \nWEEK ENDING \n17 April 2025 \nWEEK ENDING \n25 April 2025 \nWEEKLY \nCHANGE (%) \n \nVALUES \n \nRTGS \n28,200,688,885.89 \n25,487,633,934.09 \n(9.62) \nOf which ZiG \n10,739,934,210.18 \n10,132,699,648.88 \n \nOf which US$ transactions \n(ZiG Equivalent) \n17,460,754,675.71 \n15,354,934,285.21 \n \nPOS \n1,760,519,029.65 \n2,718,667,693.40 \n54.42 \nATM \n1,177,673,317.37 \n1,842,846,977.88 \n56.48 \nMOBILE BANKING \n321,390,382.76 \n351,470,360.76 \n9.36 \nMOBILE MONEY \n3,049,766,821.71 \n3,062,082,989.13 \n0.40 \nZIPIT MOBILE \n147,688,569.66 \n294,237,569.21 \n99.23 \nTOTAL \n34,657,727,007.03 \n33,756,939,524.47 \n(2.60) \n \nVOLUMES \n \nRTGS \n157,487 \n204,773 \n30.03 \nOf which ZiG \n67,683 \n88,022 \n \nOf which US$ \n89,804 \n116,751 \n \nPOS \n1,523,007 \n2,056,287 \n35.01 \nATM \n136,237 \n246,653 \n81.05 \nMOBILE BANKING \n442,407 \n396,655 \n(10.34) \nMOBILE MONEY \n10,753,050 \n10,895,168 \n1.32 \nZIPIT MOBILE \n180,596 \n328,776 \n82.05 \nTOTAL \n13,192,784 \n14,128,312 \n7.09 \n \n 6 \nMosi-oa-Tunya Gold Coin Prices \nGold Coin \nPrice \n22-April -25 \n23-April -25 \n24-April -25 \n25-April-25 \n1.00Oz \n \n \n \n \nUS$ \n3,470.93 \n3,605.23 \n3,426.10 \n3.480.49 \nZiG \n93,051.88 \n96,693.64 \n91,918.43 \n95,622.57 \n0.50Oz \n \n \n \n \nUS$ \n1,735.47 \n1,802.61 \n1,713.05 \n1,740.24 \nZiG \n46,525.94 \n48,346.82 \n45,959.21 \n47,811.28 \n0.25Oz \n \n \n \n \nUS$ \n867.73 \n901.31 \n856.52 \n870.12 \nZiG \n23,262.97 \n24,173.41 \n22,979.61 \n23,905.64 \n0.10Oz \n \n \n \n \nUS$ \n347.09 \n360.52 \n342.61 \n348.05 \nZiG \n9,305.19 \n9,669.36 \n9,191.84 \n9,562.26 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \n7. EXTERNAL SECTOR \n \n \nExchange Rate Developments (ZiG per Unit of foreign currency) \n \n \nUSD \nZAR \nGBP \nBWP \nEURO \nWeekly Average \n(14 – 17 Apr) \n26.8078 \n1.4147 \n35.3898 \n1.9354 \n30.4580 \n22-Apr \n26.8089 \n1.4362 \n35.9603 \n1.9493 \n30.9281 \n23-Apr \n26.8204 \n1.4436 \n35.702 \n1.9635 \n30.5566 \n24-Apr \n26.8289 \n1.4384 \n35.6128 \n1.9641 \n30.4347 \n25-Apr \n26.8038 \n1.4211 \n35.6211 \n1.9622 \n30.3889 \nWeekly Average \n(22 – 25 Apr) \n26.8155 \n1.4348 \n35.7241 \n1.9598 \n30.5771 \nAppr (-)/Depr (+) (%) of the \nZWG \n0.03 \n1.42 \n0.94 \n1.26 \n0.39 \nSource: Reserve Bank of Zimbabwe, 2025 \n \n \nInternational Commodity Prices \n \nGold \nPlatinum \nPalladium \nNickel \nLithium \n \nUS$/oz \nUS$/ounce \nUS$/ounce \nUS$/tonne \nUS$/tonne \nWeekly Average \n(14 - 17 Apr)) \n3,266.04 \n958.75 \n 956.00 \n15,542.50 \n9,425.00 \n22-Apr \n3,444.13 \n967.00 \n941.50 \n15,682.00 \n9,352.50 \n23-Apr \n3,297.90 \n969.00 \n942.50 \n15,662.00 \n9,352.50 \n24-Apr \n3,322.90 \n977.50 \n944.50 \n15,821.00 \n9,352.50 \n25-Apr \n3,288.33 \n967.00 \n943.00 \n15,545.00 \n9,337.50 \nWeekly Average \n(21 - 25 Apr) \n3,338.32 \n970.13 \n942.88 \n15,677.50 \n9,348.75 \nWeekly change (%) \n2.21 \n1.19 \n(1.37) \n0.87 \n(0.81) \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n \n \n \n \n \n 7 \nFigure 3: Weekly International Commodity Price Developments (7th February 2025– 25th April 2025) \n \n \n \n \n \n \nSource: BBC, KITCO and Bloomberg, 2025 \n \n \n \n \n2,500\n2,550\n2,600\n2,650\n2,700\n2,750\n2,800\n2,850\n2,900\n2,950\n3,000\n3,050\n3,100\n3,150\n3,200\n3,250\n3,300\n3,350\n3,400\n3,450\n3,500\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\nUS$/oz\nGold\n50\n55\n60\n65\n70\n75\n80\n85\n90\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\nUS$/barrel\nCrude oil \n820\n840\n860\n880\n900\n920\n940\n960\n980\n1,000\n1,020\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\nUS$/tonne\nPlatinum\n14,000\n14,200\n14,400\n14,600\n14,800\n15,000\n15,200\n15,400\n15,600\n15,800\n16,000\n16,200\n16,400\n16,600\n16,800\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\nUS$/tonne\nNickel\n8,600\n8,800\n9,000\n9,200\n9,400\n9,600\n9,800\n10,000\n10,200\n10,400\n10,600\n10,800\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\nUS$/tonne\nLithium \n900\n910\n920\n930\n940\n950\n960\n970\n980\n990\n1,000\n1,010\n1,020\n7-Feb\n14-Feb\n21-Feb\n28-Feb\n7-Mar\n14-Mar\n21-Mar\n28-Mar\n4-Apr\n11-Apr\n18-Apr\n25-Apr\nUS$/tonne\nPalladium\n \n 8 \n8. TOBACCO SALES \n \nWeekly Cumulative Tobacco Sales: Day 36 (25th April 2025) \n \n2024 \n2025 \nVariance (%) \nCumulative Quantity Sold (Kgs) \n112,981,065 \n104,322,524 \n(7.66) \nAverage Price (US$/kg) \n3.57 \n3.41 \n(4.49) \nCumulative value (US$) \n403,419,357 \n355,767,290 \n(11.81) \nSource: Tobacco Industry and Marketing Board (TIMB), 2025 \n \n \n \nRESERVE BANK OF ZIMBABWE \nAPRIL 2025", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Weekly_Economic_Highlights/WEEKLY_ECONOMIC_HIGHLIGHTS_25_April_2025_Volume_27_Number_17.pdf"}
{"doc_id": "cbb52f6a8ec2657c1487293bb95fab71", "text": "Monetary Policy\nReview\n \n \n May 2005\nMonetary Policy\nReview\nMay 2005\nSouth African Reserve Bank\nMonetary Policy Review May 2005\n© South African Reserve Bank\nAll rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any\nform or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of\nthe publisher. The contents of this publication are intended for general information only and are not intended to serve\nas financial or other advice. While every precaution is taken to ensure the accuracy of information, the South African\nReserve Bank shall not be liable to any person for inaccurate information or opinions contained in this publication.\nEnquiries relating to this Review should be addressed to:\nHead of Research and Senior Deputy Chief Economist\nResearch Department\nS A Reserve Bank\nP O Box 427\nPretoria 0001\nTel. 27-12-3133668/3944\nhttp://www.reservebank.co.za\nISSN: 1609-3194\nSouth African Reserve Bank\nMonetary Policy Review May 2005\nContents \nMonetary Policy Review\nIntroduction...........................................................................................................................\n1\nRecent developments in inflation...........................................................................................\n1\nThe evolution of indicators of inflation..............................................................................\n1\nFactors affecting inflation.................................................................................................\n6\nMonetary policy.....................................................................................................................\n22\nThe outlook for inflation.........................................................................................................\n28\nInternational outlook........................................................................................................\n28\nOutlook for domestic demand and supply ......................................................................\n29\nIndicators of inflation expectations ..................................................................................\n30\nThe Reserve Bank inflation forecast ................................................................................\n31\nAssessment and conclusion..................................................................................................\n32\nMonetary Policy Review\nIntroduction\nDespite increased uncertainty in the global environment since the publication of the\nprevious Monetary Policy Review in November 2004, the inflation outlook remains\nfavourable. Inflation has remained within the target range for the past 19 months, there\nhas been a significant decline in inflation expectations, and it is generally expected that\ninflation will remain within the target range for the next two years. Primarily as a result of\nthese favourable developments, the repurchase rate was lowered by 50 basis points at\nthe April meeting of the Monetary Policy Committee (MPC).\nThe global environment has been characterised by uncertainties in recent months which\nrequire consideration. Developments in international oil markets have been of particular\nconcern, as oil prices have reached record highs notwithstanding increases in output\nlevels, and market conditions seem destined to be tight for some time. These higher oil\nprices have duly resulted in forecasts of global growth being revised downward. The\nimbalances in the United States (US) economy also remain, as does the uncertainty\nregarding the future path of the US dollar exchange rate. \nDomestically, strong economic growth has been supported by robust domestic\nexpenditure and accompanied by a welcome expansion in formal non-agricultural\nsector employment. However, some evidence of an exchange-rate related slowing in\nactivity has emerged in the mining and manufacturing sectors. The view of the MPC in\nthis regard is that a competitive and stable exchange rate is desirable for sustainable\neconomic growth. \nAs usual, the Monetary Policy Review analyses inflation developments and the factors\nthat have impacted on inflation, followed by an assessment of recent monetary policy\ndevelopments and a discussion of the outlook for inflation. Three topical issues are\nfocused on in the boxes. The first box discusses the long-term prospects for the\ninternational oil market, while the second reviews developments in house prices in South\nAfrica and internationally. The final box looks at the objectives of monetary policy in\ninflation-targeting monetary policy frameworks.\nRecent developments in inflation\nThis section analyses recent trends in the main inflation indices, and reviews\ndevelopments in the main determinants of inflation in the South African economy. \nThe evolution of indicators of inflation\nFigure 1 shows that the year-on-year increase in the consumer price index excluding\nmortgage interest cost for metropolitan and other urban areas (CPIX), the measure\ntargeted by the Reserve Bank, extended its stay within the 3 to 6 per cent target range\nto 19 consecutive months in March 2005. Since the publication of the previous\nMonetary Policy Review in November 2004, when the available rate was 3,7 per cent for\nSeptember, CPIX inflation initially rose to 4,6 per cent in November 2004 before slowing\nto 3,1 per cent in February 2005. In March, the rate increased once more to 3,6 per cent.\nThe analysis presented in this section suggests that these fluctuations have been largely\nthe result of movements in petrol and diesel prices. \nSouth African Reserve Bank\n1\nMonetary Policy Review May 2005\n2\nMonetary Policy Review May 2005\nFor the calendar year 2004, average CPIX inflation was 4,3 per cent. Quarterly CPIX\ninflation (measured as the annualised quarter-on-quarter rate of increase in the seasonally\nadjusted data) accelerated from 2,7 per cent in the third quarter of 2004 to 5,0 per cent\nin the final quarter, and then slowed to 2,1 per cent in the first quarter of 2005. \nInflation measured year on year in terms of the headline consumer price index (CPI) for\nmetropolitan areas increased from 1,3 per cent in September 2004 to 3,7 per cent in\nNovember 2004, before slowing to 2,6 per cent in February 2005. In March, it rose to \n3,0 per cent. On a seasonally adjusted and annualised basis, the quarter-on-quarter rate\nof increase in the CPI accelerated from 2,5 per cent in the third quarter of 2004 to 4,9 per\ncent in the fourth quarter, before declining to 2,3 per cent in the first quarter of 2005.\nTable 1 shows the weighted contributions of the main components of the CPIX to the\nyear-on-year percentage changes discussed above. As can be seen, the recent\nmovements in the CPIX inflation rate are largely attributable to developments in the\ntransport component of the index. The contribution of this component increased from\n0,6 percentage points in September 2004 to 1,1 percentage points in November, and\nthen declined to 0,2 percentage points in February 2005 before rising once more to \n0,5 percentage points in March. The corresponding movements in the inland pump\nprice of unleaded petrol saw an increase from R4,54 per litre in September 2004 to\nR4,85 per litre in November, followed by a cumulative 65-cent decline to R4,20 a litre in\nFebruary 2005 and increases to R4,62 per litre in March and R5,02 per litre in April (the\nlatter includes the increase of 5 cents per litre in the Fuel Levy and 5 cents per litre in\nthe Road Accident Fund Levy announced by the Minister of Finance in his Budget\nSpeech in February). \nThe contributions of the other main components of the index remained relatively\nconstant over the period under review. The food component contributed between \n0,4 and 0,5 percentage points to overall CPIX inflation, while the contribution of the\nhousing component increased from 0,8 percentage points during October and\nSouth African Reserve Bank\nPercentage change over twelve months\n0\n3\n6\n9\n12\n15\n2000\n2001\n2002\n2003\n2004\n2005\n \nCPI\n \nCPIX\nFigure 1 \nConsumer price inflation: CPIX and CPI\nSource: Statistics South Africa\nSouth African Reserve Bank\nNovember 2004 to 0,9 percentage points during the following three months before\ndeclining once more to 0,8 percentage points in March. Finally, the contribution of the\nmedical and health care component decreased from 0,7 percentage points in\nSeptember 2004 to 0,5 percentage points in January 2005 before rising once more to\n0,7 percentage points in March.\nFigure 2 illustrates the effect of excluding energy and food prices from the CPIX inflation\nmeasure. Energy prices have been the dominant factor determining the observed\nfluctuations in CPIX inflation in the period under review. Once energy prices are excluded\nfrom the overall CPIX, the rate of increase in the remaining prices increased slightly from\n3,4 per cent in September 2004 to 3,7 per cent during November 2004 before declining\nto 3,3 per cent in March 2005. Food prices, by contrast, continued to have a moderating\neffect on the overall CPIX inflation rate. Excluding this component, CPIX inflation\nincreased from 4,2 per cent in September 2004 to 5,5 per cent in November 2004\nbefore recording 3,8 per cent in February 2005 and 4,3 per cent in March. \n3\nMonetary Policy Review May 2005\nTable 1\nContributions to year-on-year CPIX inflation \nPercentage change over twelve months* and percentage points\nComponent\nSep\nOct\nNov\nDec\nJan\nFeb\nMar\n2004\n2004\n2004\n2004\n2005\n2005\n2005\nTotal* .................................................\n3,7\n4,2\n4,6\n4,3\n3,6\n3,1\n3,6\nOf which:\nFood..................................................\n0,4\n0,5\n0,5\n0,4\n0,4\n0,4\n0,4\nHousing.............................................\n0,8\n0,8\n0,8\n0,9\n0,9\n0,9\n0,8\nMedical care and health expenses....\n0,7\n0,7\n0,7\n0,7\n0,5\n0,6\n0,7\nTransport ...........................................\n0,6\n0,9\n1,1\n0,9\n0,5\n0,2\n0,5\nEducation ..........................................\n0,4\n0,4\n0,4\n0,4\n0,4\n0,4\n0,4\nSource: Statistics South Africa\nPercentage change over twelve months\n2001\n2000\n2002\n2003\n2004\n2005\n2\n4\n6\n8\n10\n12\nCPIX\nCPIX excluding energy prices\nCPIX excluding food prices\nSource: Statistics South Africa and SARB calculations\n \n \nFigure 2 \nThe effect of food and energy prices on CPIX \n \n \ninflation\n4\nMonetary Policy Review May 2005\nThe inflation rates for the goods and services categories of CPIX are presented in Figure 3.\nAs the graph shows, services price inflation trended downward throughout 2004 and into\n2005, declining to below the upper end of the inflation target range in January 2005 for the\nfirst time since the introduction of inflation targeting. The year-on-year inflation rate for\nservices prices increased from 6,3 per cent in September to 6,6 per cent in November 2004\nbefore receding to 5,6 per cent in February 2005. In March, the services price inflation rate\nwas 5,9 per cent. Goods prices, by comparison, rose by 3,6 per cent over the twelve\nmonths to November 2004 before decelerating to 2,3 per cent by March 2005.\nAs the construction of the official index of administered prices by Statistics South Africa\nis still under way, the index of administered prices calculated by the Reserve Bank is\npresented in Figure 4 (Box 1 in the April 2002 Monetary Policy Review provides details).\nSince petrol has a weight of 20,7 per cent in this calculation (5,08 per cent in the CPIX\nbasket), the recent fluctuations in petrol prices have had a significant influence on the\nindex. The year-on-year inflation rate for the administered price index increased from \n6,8 per cent in August 2004 to 10,0 per cent in November 2004, with petrol prices\ncontributing 4,4 percentage points to this total. The rate then declined to reach 5,6 per\ncent in February 2005 before rising to 6,9 per cent in March (petrol prices contributing\n0,5 and 1,8 percentage points, respectively). Excluding the petrol component, therefore,\nthe inflation rate for the remaining administered prices continued the downward trend\nbegan in mid-2003, reaching 6,3 per cent in March 2005.\nThe overall production price index (PPI) inflation rate began to rise in May 2004 but\nproduction price inflation has since remained low (Figure 5). Twelve-month PPI inflation\nincreased to 2,5 per cent in November 2004 before declining to 1,4 per cent and \n1,2 per cent during January and February 2005, respectively. In March, an inflation rate\nof 1,9 per cent was recorded. This subdued performance can be attributed mainly to the\nimpact of the stronger exchange rate of the rand and low inflation rates in South Africa’s\nmain trading partners on the production prices of imported goods. Figure 5 shows that\nprices of these goods increased by 0,3 per cent in January, declined by 0,7 per cent in\nSouth African Reserve Bank\nPercentage change over twelve months\n2001\n2000\n2002\n2003\n2004\n2005\n0\n3\n6\n9\n12\n15\n \nGoods\nServices\nCPIX\n \nFigure 3 \nCPIX: Goods and services inflation \nSource: Statistics South Africa\nFebruary, and rose by 0,7 per cent in March 2005. The year-on-year inflation rate for\ndomestically produced goods has also been relatively subdued, increasing from 2,4 per\ncent in September 2004 to 3,4 per cent in November before slowing to 2,3 per cent in\nMarch 2005. Excluding energy prices, production prices have declined on a year-on-\nyear basis in each month since October 2004.\nSouth African Reserve Bank\n5\nMonetary Policy Review May 2005\nPercentage change over twelve months\n2001\n2000\n2002\n2003\n2004\n2005\n2\n4\n6\n8\n10\n12\n \nAdministered price index (API)\n \nAPI excluding petrol\n \nCPIX\nSource: Statistics South Africa and SARB calculations\n \nFigure 4 \nCPIX and administered prices\nPercentage points* and percentage change over twelve months\n2001\n2002\n2003\n2004\n2005\n-5\n0\n5\n10\n15\n20\nContribution of:\n \n \nImported component*\n \n \nDomestically produced component*\n \nProduction price index (PPI)\n \nPPI excluding energy prices\nSource: Statistics South Africa \nFigure 5 \nProduction price inflation\n6\nMonetary Policy Review May 2005\nMeasured as the annualised quarter-on-quarter rate of increase in the seasonally\nadjusted data, PPI inflation slowed from 1,5 per cent in the third quarter of 2004 to\n0,9 per cent in the final quarter, and then declined by 0,5 per cent in the first quarter\nof 2005. \nFactors affecting inflation\nRecent developments in some of the main drivers of inflation are reviewed in this section,\nincluding domestic and international factors. In a later section the outlook for these\nvariables and, therefore, for inflation, is presented.\nInternational economic developments\nAfter growing strongly in late 2003 and early 2004, global growth has moderated partly\nas a result of higher international oil prices. A growth rate of 5,1 per cent, the highest for\nthe world economy in nearly 30 years, was nevertheless reported by the International\nMonetary Fund (IMF) for 2004 (Table 2). The expansion has, however, tended to become\nless balanced, although the inflation environment remained for the most part benign,\nwith little evidence of second-round effects from higher oil prices.\nTable 2\nAnnual percentage change in real gross domestic product and\nconsumer prices\nReal GDP\nConsumer prices\n2004\n2004\nWorld ..............................................................................\n5,1\n3,7\nAdvanced economies ....................................................\n3,4\n2,0\nUnited States..............................................................\n4,4\n2,7\nEuro area ....................................................................\n2,0\n2,2\nUnited Kingdom..........................................................\n3,1\n1,3\nJapan ........................................................................\n2,6\n0,0\nOther advanced economies........................................\n3,8\n1,8\nOther emerging-market and developing countries ......\n7,2\n5,7\nAfrica ..........................................................................\n5,1\n7,7\nCentral and eastern Europe ........................................\n6,1\n6,6\nCommonwealth of Independent States ......................\n8,2\n10,3\nDeveloping Asia ..........................................................\n8,2\n4,2\nChina ......................................................................\n9,5\n3,9\nIndia ........................................................................\n7,3\n3,8\nMiddle East ................................................................\n5,5\n8,3\nWestern hemisphere ..................................................\n5,7\n6,5\nSource: IMF World Economic Outlook, April 2005\nGrowth of 3,4 per cent in the advanced economies in 2004 was aided by a stronger-\nthan-expected expansion in the US which offset disappointing growth in Europe and\nJapan. In the US, real gross domestic product (GDP) growth accelerated from 3,0 per\ncent in 2003 to 4,4 per cent in 2004, although third and fourth-quarter annualised\ngrowth rates moderated to 4,0 and 3,8 per cent, respectively. The United Kingdom (UK)\neconomy also slowed gradually through the year, as the Bank of England’s Monetary\nPolicy Committee raised the cost of borrowing by a quarter percentage point on five\noccasions between November 2003 and August 2004. However, growth remained\nrobust at 3,1 per cent for 2004. \nSouth African Reserve Bank\nIn the euro area, GDP growth for 2004 as a whole was 2,0 per cent, compared with \n0,5 per cent in 2003, while growth in Japan has continued to be uneven. The growth\nperformance was very strong from mid-2003 to early 2004, but a sharp slowdown was\nrecorded in the latter part of last year. Consequently, although 2,6 per cent growth was\nrecorded for 2004 as a whole, the Japanese economy registered approximately zero\nexpansion in the last three quarters of the year.\nDeveloping Asia generated considerable economic momentum in 2004 when GDP\ngrowth averaged 8,2 per cent, the fastest growth rate since the 1997-98 Asian financial\ncrisis. This was aided by China’s real GDP growth of 9,5 per cent, despite efforts by the\nChinese government to slow the economy in 2004. India also grew strongly at 7,3 per\ncent. In spite of the terrible humanitarian cost of the tsunami resulting from the\nearthquake that occurred off the northwest coast of Sumatra on 26 December 2004, the\nimpact of the catastrophe on growth in the region is expected to be limited.\nIn Latin America growth exceeded expectations in 2004, with Brazil growing at 5,2 per\ncent, while Central and Eastern Europe experienced their strongest growth since the\nbeginning of the transition to more market-oriented economic systems. In the\nCommonwealth of Independent States higher-than-expected growth was driven largely\nby buoyant domestic demand and high energy and metals prices. Robust growth of \n5,5 per cent was also recorded in 2004 by the oil-exporting countries of the Middle East.\nSub-Saharan Africa posted its highest GDP increase in a decade as strong global demand and\nprices for commodity exports, better macroeconomic policies and structural reforms in a\nnumber of countries in the region provided an encouraging boost to the poverty-reduction\nefforts of these countries. Economic growth in sub-Saharan Africa amounted to 5,1 per cent\nin 2004, with particularly impressive growth being recorded by the oil-producing countries. \nOil prices\nThe strong global economic recovery has contributed to upward pressure on commodity\nprices and especially to a sharp increase in international crude oil prices during 2004.\nExcess capacity in the Organization of the Petroleum Exporting Countries (OPEC) has\nreached record low levels and actual oil production exceeded current output quotas\nduring the past two years. The discussion in Box 1 suggests that conditions in the\ninternational oil market may indeed remain tight in the longer term.\nThe price of Brent crude oil increased significantly from around US$30 per barrel at the\nbeginning of 2004 to US$52 per barrel in October before falling to below US$37 per\nbarrel in early December (Figure 6). Crude oil prices began to increase once more in\nDecember after OPEC requested member countries to reduce actual production by \n1 million barrels per day from January 2005 to meet the previously agreed output quota\nof 27 million barrels per day. OPEC decided in January to maintain the agreed output\nquotas but announced that the price band mechanism would be temporarily\nsuspended, pending the completion of further studies on the subject. Crude oil prices\ncontinued to be highly volatile and reached levels of around US$47 per barrel towards\nthe end of January before dropping below US$44 per barrel in early February after the\nelections in Iraq passed without disruptions to oil production.\nCrude oil prices started to increase towards the end of February and accelerated further\nduring March after the International Energy Agency (IEA) increased its estimate for global\noil demand in 2005 for the third consecutive month. The IEA projected in December 2004\nthat global oil demand would increase to 83,7 million barrels per day in 2005. However,\nSouth African Reserve Bank\n7\nMonetary Policy Review May 2005\n8\nMonetary Policy Review May 2005\nthe March 2005 IEA projections showed oil demand in 2005 increasing to 84,3 million\nbarrels per day. OPEC countries decided in March to increase output quotas\nimmediately by 500 000 barrels per day and pledged an additional 500 000 barrels per\nday should oil prices not decline. The price of Brent crude oil, however, increased further\nto levels around US$55 per barrel as markets feared that global oil production might fail\nto keep pace with rising demand. \nCrude oil prices again declined to around US$50 per barrel towards the end of March\nbut increased above US$55 per barrel in early April following a research report released\nby Goldman Sachs that revised its “superspike range” to US$50 – US$105 per barrel in\nthe next several years. Crude oil prices have since declined to levels around \nUS$50 per barrel due to favourable pronouncements regarding production levels in\nOPEC countries. The IEA also lowered its forecasts for global oil demand marginally by\n50 000 barrels per day in its April 2005 montly report.\nSouth African Reserve Bank\nBox 1\nProspects for the world oil market\nThe long-term prospects for the international oil market appear to have taken a turn for the worse.\nAlthough current prices are well below the levels reached in the 1970s when measured in real terms,\nand the magnitude of the recent increases is limited relative to those experienced at that time, the\nlonger-run outlook for the oil market suggests that there is a significant risk that conditions may\nremain tight. This is the view of the IMF 1, for example, whose analysis appears qualitatively consis-\ntent with that of other relevant institutions such as the International Energy Agency (IEA), the OPEC\nSecretariat and US Department of Energy (DoE). This box discusses these recent projections for the\ninternational oil market.\nAlthough nominal oil prices have reached record highs in recent months, it is important to keep in\nmind the historical perspective provided by Figure B1.1. As the graph shows, and as a number of\ncommentators have stressed, prices measured in real US dollar terms are far below the levels\nreached in the late 1970s and early 1980s. It is also clear from the graph that the price increases\nexperienced in recent months are not nearly as severe as those of 1974 and 1979.\nUS dollars per barrel\n25\n30\n35\n40\n45\n50\n55\n60\n2004\n2005\nSource: Bloomberg\nJan\nMar\nMay\nJul\nSep\nNov\nJan\nMar\nMay\nFigure 6 \nPrice of Brent crude oil\n1\nThe discussion of this view\nis based on Chapter 4 of the\nWorld Economic Outlook, April\n2005 and \"Oil Market Develop-\nments and Issues\", Policy \nDevelopment and Review De-\npartment, IMF, 1 March 2005.\nSouth African Reserve Bank\n9\nMonetary Policy Review May 2005\nA fundamental determinant of oil prices now and in the future is the balance between supply and\ndemand for oil in the various markets. In the shorter term, when temporarily higher demand (e.g. as\na result of a cold winter) or supply disruptions cause market conditions to tighten, the risk of price\nspikes increases. Provided the longer-term prospects for oil prices remain favourable, as they\ngenerally have in the 1985-2000 period, the impact of these increases on investment decisions and\ngrowth tends to be limited. When the likely evolution of the supply-demand balance over a longer\nhorizon suggests that conditions will remain tight, however, these increases are likely to have a more\nsignificant impact on expectations and growth.\nThe balance between supply and demand in the oil market in the longer term is influenced by a\ncomplex set of factors which tend to act with long lags. Current oil prices are an important factor,\nfor example. On the one hand, higher oil prices tend to encourage economies to reduce their\ndependence on oil, and also provide an incentive for producers to expand their production capacity\nand to facilitate the use of unconventional sources. As Federal Reserve Chairman Alan Greenspan\nrecently said, “... if history is any guide, should higher prices persist, energy use will over time\ncontinue to decline, relative to GDP” 2. The dependence of OECD economies on oil has undoubtedly\ndeclined over time, largely in response to the earlier oil price shocks of the 1970s and 1980s,\nalthough developing countries remain more energy-intensive in production. On the other hand, low\ncurrent prices discourage energy conservation and investment in future production capacity.\nRegarding the latter, it is interesting that following the lower oil price environment of 1985-2000,\nOPEC’s current production capacity is estimated by the IMF to be below the level of 1978. \nIncreases in supply are of course ultimately limited by the extent of unexploited reserves and the cost\nof exploiting these reserves. The distribution of reserves between the OPEC and non-OPEC countries\nis also a factor which will influence developments in the global oil industry. The IMF suggests that the\nresponsiveness of non-OPEC oil supply is the key unknown in its projection of the supply-demand\nbalance. If, as the IMF believes, supply from these countries will peak by 2010, then the importance\nof OPEC supply in meeting additional demand will increase after this date.\nTaking these factors into account, then, what are the projections for demand and supply in the\ncoming years? In line with the discussion of non-OPEC supply in the preceding paragraph, the\nbaseline price path in the IMF’s World Economic Outlook forecast is for the real price of oil (a simple\naverage of West Texas Intermediate, Brent and Dubai prices) to decline from US$44,70 in 2005 to\nUS$33,70 a barrel in 2010, and then to remain at this level until 2030. Table B1.1 shows the projected\noil demand, non-OPEC supply and the residual “call on OPEC”3 for the period 2010 to 2030.\n2\nRemarks by Chairman Alan\nGreenspan before the National\nPetrochemical and Refiners\nAssociation Conference, San\nAntonia, Texas, 5 April 2005.\n3\nThis is the hypothetical\namount that OPEC would need\nto produce to meet the shortfall\nbetween total demand and non-\nOPEC supply in the market.\nUS$ per barrel\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\n1970\n1975\n1980\n1985\n1990\n1995\n2000\n2005\nFigure B1.1 \nBrent crude oil prices\n \nUK Brent (constant 2000 prices)\n \nUK Brent (nominal)\nSource: IMF, International Financial Statistics\n10\nMonetary Policy Review May 2005\nKey central bank interest rates\nTable 3 presents the most recent interest rate changes made by central banks around the\nworld. The US Federal Open Market Committee (FOMC) increased the target for the\nFederal Funds Rate in May 2005 to 3,0 per cent, the eighth consecutive 25-basis-point\nincrease since the record low level of 1,0 per cent in June 2003. The FOMC noted that\noutput was continuing to grow at a solid pace and that inflationary pressures had\nSouth African Reserve Bank\nAs can be seen, the IMF’s baseline projection is for global oil demand to increase to 92 million\nbarrels per day in 2010, 113,5 million barrels per day in 2020 and eventually to 138,5 million barrels\nper day by 2030. Lower and upper boundaries are then provided for growth in non-OPEC supply,\nwith the lower bound showing no increase in supply after 2020. The call on OPEC in order to meet\nprojected demand therefore varies according to the path followed by non-OPEC supply. If this is at\nthe lower bound, for example, the call on OPEC increases (according to the upper bound in the\ntable) to 32,7 million barrels per day in 2010, 49,2 million barrels per day in 2020 and to 74,4 million\nbarrels per day by 2030. The table also presents alternative oil demand projections by other\nagencies and corresponding estimates of the call on OPEC for comparison purposes.\nThe call on OPEC is projected to grow significantly over the coming years in the baseline projections\npresented by the IMF. After initially remaining approximately unchanged at around 32 million barrels\nper day until 2010, it then doubles to 61 – 74 million barrels per day in 2030. Significant investment\nspending will be required to meet this increase in demand, and concerns in this regard have been\nvoiced. Since proved oil reserves are concentrated in its member countries, OPEC’s response to\nthe increase in demand will be the key determinant of future developments in the supply-demand\nbalance and oil prices.\nAlthough projections such as these provide important insights regarding the factors which are likely\nto influence the oil market, the IMF correctly stresses that long-run forecasts for oil supply and\ndemand are subject to substantial uncertainties. Besides assumptions regarding the rate of global\ngrowth in future and the rate of growth of non-OPEC supply, more fundamental factors such as the\nmanner in which technological progress will impact on the projections need to be considered. While\nthis means that the risks to the projections are necessarily large, the importance of developments\nin the energy markets for policy-makers makes the exercise useful.\nTable B1.1\nProjections: Oil demand, non-OPEC supply and call \non OPEC\nMillions of barrels per day\n2003\n2004\n2010\n2020\n2025\n2030\nActual Estimate\nBaseline demand projection ....................\n79,8\n82,4\n92,0\n113,5\n125,5\n138,5\nNon-OPEC supply\nLower bound...........................................\n49,0\n50,4\n59,3\n64,4\n64,5\n64,1\nUpper bound...........................................\n49,0\n50,4\n61,4\n70,1\n73,9\n77,2\nCall on OPEC\nLower bound...........................................\n30,7\n32,0\n30,6\n43,5\n51,6\n61,3\nUpper bound...........................................\n30,7\n32,0\n32,7\n49,2\n61,0\n74,4\nMemorandum:\nOil demand projection by agency\nIEA ....................................................\n79,8\n…\n90,4\n106,7\n…\n121,3\nDoE...................................................\n79,8\n…\n91,1\n110,0\n120,6\n…\nOPEC Secretariat ..............................\n79,8\n…\n88,7\n105,8\n114,6\n…\nCall on OPEC by agency\nIEA ....................................................\n30,7\n…\n33,3\n49,8\n…\n64,8\nDoE...................................................\n30,7\n…\n35,7\n47,8\n56,0\n…\nOPEC Secretariat ..............................\n30,7\n…\n34,1\n48,9\n58,3\n…\nSource: Reproduced from IMF World Economic Outlook, April 2005, p 170\nincreased in recent months. The committee wanted to keep the upside and downside\nrisks to sustainable growth and price stability equal, and believed that the existing\nmonetary policy accommodation could be removed at a measured pace. \nTable 3\nKey central bank interest rates\nPer cent\nCountries\n1 Jan \n3 May\nLatest change\n2004\n2005\n(percentage points)\nUnited States ....................................\n1,00\n3,00\n3 May 2005\n(+0,25)\nJapan* ..............................................\n0,00\n0,00\n19 Mar 2001\n(-0,15)\nEuro area ..........................................\n2,00\n2,00\n6 Jun 2003\n(-0,50)\nUnited Kingdom ................................\n3,75\n4,75\n5 Aug 2004\n(+0,25)\nCanada ............................................\n2,75\n2,50\n19 Oct 2004\n(+0,25)\nDenmark ..........................................\n2,00\n2,00\n6 Jun 2003\n(-0,50)\nSweden ............................................\n2,75\n2,00\n7 Apr 2004\n(-0,50)\nSwitzerland........................................\n0 – 0,75\n0,25 – 1,25\n16 Sep 2004\n(+0,25)\nAustralia ............................................\n5,25\n5,50\n2 Mar 2005\n(+0,25)\nNew Zealand ....................................\n5,00\n6,75\n10 Mar 2005\n(+0,25)\nIsrael ................................................\n4,80\n3,50\n1 Feb 2005\n(-0,20)\nChina ................................................\n5,31\n5,58\n29 Oct 2004\n(+0,27)\nHong Kong........................................\n2,50\n4,25\n23 Mar 2005\n(+0,25)\nIndonesia ..........................................\n8,31\n7,70\n20 Apr 2005\n(+0,17)\nMalaysia ............................................\n,**\n2,70\n23 Apr 2004**\nSouth Korea ......................................\n3,75\n3,25\n11 Nov 2004\n(-0,25)\nTaiwan ..............................................\n1,38\n1,88\n24 Mar 2005\n(+0,13)\nThailand ............................................\n1,25\n2,25\n2 Mar 2005\n(+0,25)\nIndia ..................................................\n4,50\n5,00\n28 Apr 2005\n(+0,25)\nBrazil ................................................\n16,50\n19,50\n20 Apr 2005\n(+0,25)\nChile..................................................\n2,25\n3,00\n7 Apr 2005\n(+0,25)\nCzech Republic ................................\n2,00\n1,75\n29 Apr 2005\n(-0,25)\nHungary ............................................\n12,50\n7,50\n26 Apr 2005\n(-0,25)\nPoland ..............................................\n5,25\n5,50\n27 Apr 2005\n(-0,50)\nRussia ..............................................\n16,00\n13,00\n15 Jun 2004\n(-1,00)\n*\nJapan eased monetary policy several times during 2003 and again in January 2004 by increasing the target range for the\noutstanding balance on reserve accounts at the Bank of Japan\n**\nThe central bank of Malaysia introduced a new interest rate framework on 23 April 2004\nSource: National central banks\nThe Bank of England (BOE) raised its repo rate by 25 basis points in August 2004 to\n4,75 per cent, following three similar moves earlier in 2004 to keep inflation on track and\nmeet the inflation target in the medium term. The BOE has since left interest rates\nunchanged, although some members of its Monetary Policy Committee are in favour of\nhigher interest rates due to high growth in demand in the UK economy.\nThe European Central Bank (ECB) has kept its official interest rate unchanged at 2 per cent\nsince June 2003 and is satisfied that there is no significant evidence of underlying domestic\ninflationary pressures building up in the euro area. However, the ECB will continue to\nmonitor the medium-term upside risks to price stability given the high level of international\noil prices. Although the Bank of Japan has maintained its policy interest rate near zero\nsince 2001, it has eased monetary policy several times during 2003 and again in January\n2004 by increasing the target range for the outstanding balance on reserve accounts held\nby private financial institutions at the Bank of Japan. The monetary authority is currently\nwilling to provide sufficient liquidity to the markets until the year-on-year rate of change\nin core consumer prices registers zero per cent or higher on a sustainable basis. \nSouth African Reserve Bank\n11\nMonetary Policy Review May 2005\n12\nMonetary Policy Review May 2005\nAfter having kept monetary policy unchanged since the end of 2003, the Reserve Bank\nof Australia increased its cash rate by 25 basis points to 5,5 per cent in March 2005.\nThis increase was considered necessary due to a gradual increase in underlying inflation\nand limited spare capacity in the economy. The Reserve Bank of New Zealand has\nincreased its official cash rate by a cumulative 175 basis points to 6,75 per cent since\nthe beginning of 2004 as inflationary pressures remained strong.\nBrazil’s central bank raised its benchmark lending rate to 19,50 per cent in April 2005\nfollowing evidence of inflationary pressures and the increase in oil prices. The year-on-\nyear increase of 7,5 per cent in Brazil’s consumer prices in March is still higher than the\ninflation target of 5,1 per cent for 2005. The central bank of Chile increased its key\ninterest rate by 25 basis points to 3,0 per cent in April 2005 due to robust domestic\nexpenditure and a gradual increase in core inflation. \nThe pronounced disinflationary trends in the Czech Republic, Hungary and Poland\nprovided the opportunity for the respective central banks to reduce their interest rates\nfurther in April 2005. The Bank of Israel also lowered its short-term interest rate by \n40 basis points during January and February 2005.\nChina tightened monetary policy for the first time in nine years in October 2004 due to\nconcerns about the overheating of its economy. Interest rates in China were increased\nby 27 basis points to 5,58 per cent. The Bank of Thailand increased its 14-day\nrepurchase rate by a cumulative 75 basis points in 2004 and a further 25 basis points\nin March 2005 to 2,25 per cent. The Bank of Thailand expects strong economic growth\nin the coming months as the negative impact of the tsunami disaster has been less\nsevere than previously anticipated, although the impact of higher oil prices is expected\nto start feeding through to inflation. Taiwan also raised interest rates in March 2005 to\n1,88 per cent. By contrast, the Bank of Korea lowered the target for the overnight call\nrate by a cumulative 50 basis points to 3,25 per cent during 2004 due to a slowdown\nin the pace of recovery and subdued consumer demand.\nExchange rate developments\nThe exchange rate of the rand measured against a basket of currencies is currently\naround its average level for the past 10 months. As the graphs in Figure 7 show, the\nnominal effective exchange rate of the rand appreciated in the period between August\nand December 2004 partly as a result of US dollar weakness, and then trended\ndownward once more in 2005. As usual, the performance of the rand in the period since\nthe publication of the previous Monetary Policy Review in November 2004 has been\ninfluenced by both international and domestic factors.\nMovements in the exchange rate of the US dollar against a broad spectrum of\ncurrencies have been an important factor affecting the rand in this period. The dollar\ninitially strengthened from the end of 2004 to mid-February 2005 as a result of\nfavourable pronouncements and economic data releases, and the 25-basis-point\nincrease in the Federal Funds Rate on 2 February. The currency then weakened on\ninternational markets until early March, influenced by continued concerns about the\nincreasing US trade deficit and speculation about possible central bank diversification of\nforeign exchange reserves from US dollars into alternative currencies. Subsequently,\nhowever, the dollar strengthened once more, supported by a further 25-basis-point\nincrease in the Federal Funds Rate on 23 March and positive consumer and producer\ndata released for February. \nSouth African Reserve Bank\nVarious other factors have also contributed to the recent performance of the rand.\nInternational perceptions of South Africa’s economic fundamentals continued to improve,\ninfluenced by factors such as a more favourable growth performance, an improved foreign-\nexchange reserve position, continued sound fiscal management and better inflation\nperformance. A ratings upgrade was consequently received from Moody’s Investor Services\nin January 2005. The period under review also saw a significant inflow of capital. The last\nquarter of 2004 saw net purchases of about R24 billion worth of bonds and equities by\nforeign investors, followed by a further R7,8 billion from January to March 2005. Partly\nabsorbing these flows, the deficit on the current account of the balance of payments\nwidened once more in the fourth quarter of 2004 as increases in the value of imports and\nnet service and income payments more than offset the growth in export values.\nReserve accumulation\nFigure 8 reveals that the South African Reserve Bank has continued to purchase foreign\nexchange in order to build up reserves in a gradual manner. The Bank’s gross reserves\nincreased from US$12,4 billion at the end of September 2004 to US$15,9 billion at the\nend of March 2005, while the international liquidity position (net reserves) improved from\nUS$9,0 billion to US$12,4 billion over the same period.\nSouth African Reserve Bank\n13\nMonetary Policy Review May 2005\nIndex: 2000=100 (foreign currency per rand)\nRand per euro\nRand per US dollar\nFigure 7 \nExchange rates of the rand\nJan\nMar\nMay\n2004\n2005\nJul\nSep\nNov\nJan\nMar\n \nNominal effective exchange rate of the rand (NEER)\n \nRand per US dollar \n \nRand per euro (right-hand scale)\n \n70\n80\n90\n100\n6\n7\n8\n9\n10\n5\n6\n7\n8\n14\nMonetary Policy Review May 2005\nUnit labour cost\nDevelopments in unit labour cost, measured as the ratio of remuneration per worker to\noutput per worker in the formal non-agricultural sector of the economy (Figure 9), require\ncareful consideration in the period under review. Revisions to the Survey of Employment\nand Earnings by Statistics South Africa now show nominal remuneration per worker\nSouth African Reserve Bank\nUS$ millions \n-5000\n0\n5000\n10000\n15000\n20000\n2002\n2003\n2004\n2005\n \nGross reserves\n \nInternational liquidity position\n \n \nFigure 8 \nOfficial reserve position of the South African \n \nReserve Bank\nPercentage change over four quarters\n2001\n2002\n2003\n2004\nFigure 9 \nRenumeration per worker, labour productivity\n \nand unit labour cost in the formal\n \nnon-agricultural sector\n \nNominal unit labour cost\n \nRemuneration per worker\n \nLabour productivity\nSource: Statistics South Africa\n0\n3\n6\n9\n12\n15\ngrowing by 7,3 and 10,5 per cent year on year in the third and fourth quarters of 2004,\nrespectively, although the latter increase in particular is well above the annual average\nresults obtained from surveys of wage settlements. Average nominal wage settlements\nare reported by Andrew Levy Employment Publications to be 6,8 per cent for 2004, and\n6 per cent in the first quarter of 2005. With the downward trend in labour productivity\ngrowth continuing, year-on-year unit labour cost duly increased by 6,6 per cent in the\nthird quarter and by 10,1 per cent in the fourth quarter of 2004.\nThe growth in labour productivity has declined continuously from 5,2 per cent in the third\nquarter of 2003 to 0,4 per cent in the final quarter of 2004. Measured here as the ratio of\nreal value added to employment in the formal non-agricultural sector, this decline is largely\nattributable to increases in employment more than offsetting increases in real value added. \nDemand and output\nSince the November 2004 Monetary Policy Review, Statistics South Africa and the\nSouth African Reserve Bank have published a revised set of national accounts data for\nthe post-1997 period. The exercise resulted in level adjustments to the data and also\ninvolved changing the base year from 1995 to the year 2000. Table 4 examines the\nrecent growth in real GDP using these data.\nTable 4\nGrowth in real gross domestic product and expenditure\ncomponents\nPer cent\n2003\n2004\n3rd qr\n4th qr\nYear\n1st qr 2nd qr\n3rd qr\n4th qr\nYear\nFinal consumption expenditure \nby households ....................................\n5,6\n5,9\n3,4\n6,2\n6,4\n6,6\n7,1\n6,1\nFinal consumption expenditure \nby government....................................\n6,4\n13,9\n6,4\n6,0\n6,2\n0,2\n13,2\n7,2\nGross fixed capital formation ..............\n7,2\n10,1\n9,0\n11,6\n10,1\n7,4\n9,1\n9,4\nChanges in inventories (R billions)* ......\n9,2\n9,2\n9,2\n9,6\n14,9\n13,6\n7,6\n11,4\nGross domestic expenditure..............\n6,0\n8,6\n5,3\n5,4\n8,8\n2,6\n4,4\n6,3\nExports of goods and services ..........\n-0,2\n-0,9\n-0,9\n-10,8\n15,9\n11,4\n23,8\n2,9\nImports of goods and services ..........\n14,3\n20,6\n8,5\n-4,2\n34,1\n-0,5\n23,3\n12,9\nGross domestic product ..................\n2,3\n3,1\n2,8\n3,8\n4,4\n5,7\n4,0\n3,7\nQuarterly data refer to quarter-on-quarter growth at annual rates of seasonally adjusted data \n*\nConstant 2000 prices\nBuoyed by sustained strong growth in domestic demand, the growth rate of real GDP\naccelerated to 5,7 per cent in the third quarter of 2004 before easing to 4,0 per cent in\nthe final quarter of the year. For 2004 as a whole, real GDP growth increased to 3,7 per\ncent from 2,8 per cent in 2003. \nDomestic spending has generally been the main driver of this expansion, supported by\ngrowth in disposable income, buoyant real-estate and securities markets, and a\nfavourable interest rate environment. Despite slowing to 2,6 per cent in the third quarter\nof 2004 largely as a result of weak final consumption expenditure by government, real\ndomestic expenditure increased by 4,4 per cent in the fourth quarter and by 6,3 per cent\noverall in 2004. The three main components of real final demand all contributed strongly\nin this regard. Final consumption expenditure by private households and general\nSouth African Reserve Bank\n15\nMonetary Policy Review May 2005\n16\nMonetary Policy Review May 2005\ngovernment increased by 6,1 per cent and 7,2 per cent, respectively, in 2004 and\ngrowth in gross fixed capital formation was even higher at 9,4 per cent. The increase in\ndomestic demand coupled with the stronger exchange rate also stimulated growth in\nexpenditure on imports of goods and services, which after slowing to 0,5 per cent in the\nthird quarter jumped to 23,3 per cent in the final quarter, contributing to overall growth\nof 12,9 per cent for the year. Exports of goods and services, having contracted in 2003\nand in the first quarter of 2004, increased once more in the last three quarters of the year\nto record growth of 2,9 per cent overall.\nReal output growth tended to be strongest in those sectors primarily oriented towards\nthe domestic market in response to the expansion in expenditure. The slower growth\nrecorded in the final quarter of the year was mainly the result of weakness in the primary\nand secondary sectors, and especially in the mining and manufacturing sectors which\nare most exposed to the effects of the stronger currency. However, in 2004 as a whole,\nthe primary sector was able to expand real value added by 3,3 per cent, the secondary\nsector by 2,9 per cent, and the tertiary sector by 4,1 per cent. \nReal-estate and equity prices\nRobust growth has been a striking feature of the South African real-estate market in\nrecent years, although house price increases have slowed in recent months. Figure 10\npresents the year-on-year increases in house prices measured by the Absa house price\nindex. This index records the total purchase price of houses in the 80 – 400 m2 size\ncategory which are priced at less than R2,2 million and for which loan applications were\napproved by Absa. After peaking at just over 35 per cent in September 2004, growth in\nnominal house prices declined to reach 26,9 per cent in March 2005. In real terms, the\ncorresponding rates are 33,7 per cent in September 2004 and 23,2 per cent in March\n2005. Box 2 provides an international perspective on these developments.\nSouth African Reserve Bank\nPercentage change over twelve months \n2001\n2000\n2002\n2003\n2004\n2005\n0\n5\n10\n15\n20\n25\n30\n35\n40\n \nAbsa house price index (nominal)\n \nAbsa house price index (real)\nSource: Absa \nFigure 10 \nHouse prices\nA factor which may help explain the slower growth in house prices is the impact of\nbuoyant market conditions on the affordability of houses. Figure 11 presents two indices\nwhich serve as proxies of affordability. In both cases an increase in the index represents\na decline in affordability. The first (PDI) is simply the ratio of the indices of Absa nominal\nhouse prices to per capita disposable income. This broad measure shows that\naffordability has been deteriorating since 1997 as house prices have risen faster than\nincreases in disposable income. The second measure (RDI), which is calculated as the\nratio of mortgage repayments on an average priced house to per capita disposable\nincome suggests, however, that there has been limited deterioration in affordability in\nrecent years. Since this measure takes into account both house prices and the mortgage\ninterest rate, increases in house prices which exceed increases in disposable income may\nbe offset by lower interest cost. \nThe values of building plans passed and completed are important indicators of real-\nestate sector activity. Table 5 shows that the values of both building plans approved and\ncompleted remain strong, particularly in the residential real-estate sector. The growth in\nthe real value of buildings completed increased from 6,8 per cent in 2003 to 22,5 per\ncent in 2004, while the real value of building plans passed, a measure of future\nconstruction activity, increased by 33,0 per cent in 2004 compared with 11,3 per cent\nin 2003. The increases recorded in January – February 2005 relative to the corres-\nponding months of 2004 were 9,9 per cent for the real value of building plans passed,\nand 20,4 per cent for the real value of buildings completed. \nSouth African Reserve Bank\n17\nMonetary Policy Review May 2005\nIndices: 2000=100\n1975\n1980\n1985\n1990\n1995\n2000\n2004\n1970\nFigure 11 \nHousing affordability indices\n50\n100\n150\n200\n250\n300\n \nPDI\n \nRDI\nSource: Absa and SARB calculations\nNote: A down payment of 20 per cent is assumed in the calculation of RDI. The\nmortgage rate is proxied by the predominant rate of banks for dwelling units, and\nthe monthly repayment is calculated over a period of 20 years.\n18\nMonetary Policy Review May 2005\nSouth African Reserve Bank\nSouth African Reserve Bank\n1\nCase K E, J M Quigley and\nR J Shiller. 2001. \"Comparing\nWealth Effects: The Stock\nMarket Versus the Housing\nMarket\", Cowles Foundation\nDiscussion Paper No. 1335,\nYale University, October.\n2\nFor example Tsatsaronis K\nand H Zhu. 2004. \"What drives\nhousing price dynamics: cross-\ncountry evidence\". BIS Quarterly\nReview, March; and Sutton G D.\n2002. \"Explaining changes in\nhouse prices\". BIS Quarterly\nReview, September.\nBox 2\nHousing price dynamics: An international perspective\nThe behaviour of house prices is attracting attention in the media and from policy-makers in a\nnumber of countries around the world, in part due to the growing realisation of their importance for\nboth monetary policy and financial stability in general. This box briefly discusses why house prices\nmay matter, and reviews developments in these prices in South Africa and internationally. An analysis\nof trends in inflation-adjusted house prices in the post-1980 period is presented, and the factors\nwhich drive these trends are considered.\nWhy are developments in house prices important?\nA house is typically the most valuable asset a household owns. For financial intermediaries, the\nmortgages raised to finance the ownership of residential real estate constitute a significant portion of\ntheir portfolios. Fluctuations in house prices are therefore important to both groups, and by extension\nto the wider economy. Research suggests that changes in housing wealth influences consumption\nbehaviour, for example1, and that house prices play a potentially important role in the transmission of\nmonetary policy via wealth and balance sheet effects (see Box 3, May 2004 Monetary Policy Review).\nIn addition, the importance of mortgages in the asset-backed finance portfolios of banks and other\nfinancial intermediaries means that house prices also influence the performance of these institutions\nand of the financial system itself.\nTrends in house prices\nFigure B2.1 presents inflation-adjusted house price indices for South Africa, Australia, the United\nKingdom, Ireland, Canada and the United States. Although these indices may not be fully comparable\nbetween countries, given differences in measurement, they do provide a sense of the general trends –\nthe long swings which are evident in the prices. Consistent with the findings of other studies2, two\nperiods of rapid growth can be observed in the graphs. The first of these is in the 1980s, followed first\nby a slowdown in the early 1990s as the global economy slowed, and then by a second period of\ngrowth which is most notable from the mid-1990s.\nThese broad trends disregard important differences in the experiences of the countries, however.\nGrowth in house prices in Canada and the US, for example, has tended to be less volatile than in the\nother countries in Figure B2.1, although real house prices are nevertheless at historic highs in the US\nat present. Also, the more recent upswing appears to have begun earlier in the UK, Australia and the\nUS than in South Africa, where prices accelerated late in the decade. \nWhat drives house prices?\nHouse prices, like other prices, are determined by demand and supply factors. Tsatsaronis and Zhu\n(2004), for example, distinguish between factors that operate in the longer term, and those that\nimpact on the shorter-term dynamics of house prices. Furthermore, differences in the characteristics\nof national housing markets mean that these factors may affect house prices differently in different\ncountries. In fact, this is the case even within countries.\nIn the longer term, the demand for housing would tend to be positively related to household income\nand wealth (both current and expected). Moreover, since a house is a long-lived asset that provides\nservices over an extended period, the current and future interest rates used to discount this stream\nof services is an important determinant of its price. It follows, therefore, that a shift to a lower inflation\nenvironment that reduces these interest rates would tend to boost house prices. Shifts in\ndemographics (e.g. population movements or changes in the age profile which impacts on the\nnumber of potential new buyers), amendments to the tax system that favour home ownership or\nchanges in the financial service markets that promote ownership would also impact on demand. The\nsupply of housing is influenced in the longer term by factors such as the availability of land, the\nexisting stock of housing and the cost of adding to this housing stock.\nSupply factors tend to be relatively inflexible in the shorter term, while the planning and construction\nphases involved in expanding the housing stock occur. Consequently, movements in house prices at\nthis horizon may be attributed largely to demand factors. Demand factors which have received\nattention in the literature include the prevailing conditions relating to the financing of house\npurchases, the transaction cost framework and the general level of confidence in the housing market\n(which may remain low, e.g. following a period of volatility; Tsatsaronis and Zhu, 2004).\nSouth African Reserve Bank\n19\nMonetary Policy Review May 2005\nEven though houses are not physically transferable, factors such as stronger global growth and the\nstructural shift to lower inflation and interest rates in the 1990s are universal drivers of rising house prices. \nTo the extent that the various demand and supply factors are national in character, however, the\ndynamics of house prices may differ across countries. In South Africa, declines in inflation and interest\nrates have been bolstered by a number of idiosyncratic factors which have supported the positive\nmomentum in housing demand. There have been gradual reductions in both personal income taxes and\ntransfer costs, and the growing economy has generated not only increases in income but has begun to\nmodify its distribution. Greater access to the mainstream housing markets by previously excluded\ncommunities has contributed to the increased demand for housing. South Africa has also seen changes\nin the financial sector that have impacted on the dynamics of house prices, such as the emergence of\nsecuritisation of mortgage assets and the extension of the duration of mortgages. Collectively, these\nglobal and national factors explain the recent trends in house prices in South Africa.\nUnited States\nFigure B2.1 \nInflation-adjusted house prices*\nIndices: 1995=100\nUnited Kingdom\nIndices: 1995=100\nCanada\nIndices: 1995=100\nAustralia\nIndices: 1995=100\n* Deflated using CPI data. For Ireland, quarterly house price data for the period 1980–98 are derived from annual data using the quadratic match \naverage interpolation method.\nSources: Bloomberg, Absa, Nationwide, Irish Department of Environment and Local Government, Office of Federal Housing Enterprise Oversight \nand IFS.\nIreland\nIndices: 1995=100\nSouth Africa\nIndices: 1995=100\n50\n100\n150\n200\n250\n300\n350\n50\n100\n150\n200\n250\n300\n350\n50\n100\n150\n200\n250\n300\n350\n50\n100\n150\n200\n250\n300\n350\n50\n100\n150\n200\n250\n300\n350\n50\n100\n150\n200\n250\n300\n350\n1980\n1985\n1990\n1995\n2000\n2004\n1980\n1985\n1990\n1995\n2000\n2004\n1980\n1985\n1990\n1995\n2000\n2004\n1980\n1985\n1990\n1995\n2000\n2004\n1980\n1985\n1990\n1995\n2000\n2004\n1980\n1985\n1990\n1995\n2000\n2004\n20\nMonetary Policy Review May 2005\nSouth African Reserve Bank\nTable 5\nThe real value of building plans passed and buildings completed\nPercentage change\n2003\n2004\n2005*\nBuilding plans passed\nTotal ........................................................................................\n11,3\n33,0\n9,9\nResidential ........................................................................\n16,3\n39,6\n-3,2\nNon-residential ..................................................................\n3,5\n18,1\n40,0\nAdditions and alterations....................................................\n6,3\n27,6\n30,4\nBuildings completed\nTotal ........................................................................................\n6,8\n22,5\n20,4\nResidential ........................................................................\n8,1\n33,8\n35,7\nNon-residential ..................................................................\n8,7\n6,2\n-5,1\nAdditions and alterations....................................................\n1,4\n5,8\n4,3\n*\nThese figures are for January – February 2005 compared to the corresponding months of 2004\nSource: Statistics South Africa\nThe lower domestic inflation and interest rate environment, good corporate performance,\nhigh international commodity prices and stronger global equity markets provided support to\nequity prices on the JSE Securities Exchange SA (JSE) until mid-March 2005. The closing\nlevel of the daily all-share price index as depicted in Figure 12 shows a continued upward\ntrend in share prices from mid-2004, reaching a record high of 13 761 on 17 March 2005.\nThe index then fell to below 12 500 at the end of April as world markets weakened. The\nresources index, which performed sluggishly between October and mid-December 2004,\nin part due to the strengthening of the exchange rate, then rose to reach a historic high level\nof 12 473 on 17 March 2005, before declining to around 10 650 at the end of April. \nFiscal policy \nGovernment’s fiscal policies remain supportive of monetary policy. The Budget\npresented on 23 February 2005 estimates total revenue for the 2005/06 fiscal year at\nR369,9 billion and makes provision for total expenditure of R417,8 billion, resulting in an\nIndices\n2003\n2004\n2005\n7000\n8000\n9000\n10000\n11000\n12000\n13000\n14000\n15000\nFTSE/JSE all-share index\nFTSE/JSE resources index\nFigure 12 \nShare price indices\nSouth African Reserve Bank\n21\nMonetary Policy Review May 2005\nestimated budget deficit of R48,0 billion (Table 6). This represents 3,1 per cent of GDP.\nThe budget deficit as a proportion of GDP is projected to decline to 3,0 and 2,7 per cent,\nrespectively, in the subsequent two fiscal years. \nTable 6\nPublic finance data\n2002/03 2003/04\n2004/05 2004/05 2005/06 2006/07 2007/08\nActual\nActual\nMTBPS\nRevised\nMedium-term\nOct 2004\nestimates\nestimates\nNational government (R billions)\nRevenue..........................\n278,5\n299,4\n328,2\n338,0\n369,9\n405,4\n444,6\nExpenditure ....................\n291,5\n328,7\n371,7\n370,1\n417,8\n456,4\n494,9\nDeficit (-)..........................\n13,0\n29,2\n43,5\n32,2\n48,0\n51,0\n50,3\nAs a percentage of GDP:\nDeficit (-)..........................\n1,1\n2,3\n3,2\n2,3\n3,1\n3,0\n2,7\nTotal gross loan debt ......\n35,8\n35,7\n37,6\n35,7\n36,0\n36,7\n36,6\nPSBR* ............................\n1,0\n2,4\n4,1\n2,8\n3,9\n3,8\n3,8\n*\nPSBR: Public-sector borrowing requirement\nSource: National Treasury Budget Review 2005 and Medium Term Budget Policy Statement 2004\nThe deficit to GDP ratio for 2004/05 has been revised to 2,3 per cent in the 2005/06 Budget\nReview from the 3,2 per cent envisaged in the 2004 Medium Term Budget Policy Statement\n(MTBPS). This is a consequence of revisions to historical GDP data, an increase in revenue\ncollection and a slightly lower revised expenditure estimate. Indeed, higher than expected\ntax revenues suggest that the actual deficit for 2004/05 may be even lower than the revised\n2,3 per cent of GDP.\nThe public-sector borrowing requirement (PSBR) for 2004/05 has also been revised\ndownward from the 4,1 per cent of GDP presented in the 2004 MTBPS to 2,8 per cent\nin the 2005/06 Budget Review. The PSBR is estimated at 3,9 per cent of GDP in the\nfiscal year 2005/06, declining slightly to 3,8 per cent in the medium term. \nMonetary conditions\nMonetary aggregates have grown at a brisk rate in 2004 and early 2005 (Table 7), in line\nwith the growth in domestic expenditure. The average monthly year-on-year growth rate\nin 2004 for the broad monetary aggregate, M3, was 13,3 per cent, although the rate\ndecelerated from a high of 14,9 per cent in October to 11,9 per cent in March 2005. The\nmovements in the year-on-year growth in the narrower aggregates were more\npronounced than those in M3, with M1A and M1 growing at 16,6 per cent and 15,2 per\ncent, respectively, in 2004. Measured from quarter to quarter and at an annualised rate,\nM3 increased by 17,6 per cent in the final quarter of 2004 and by 6,0 per cent in the first\nquarter of 2005.\nThe total loans and advances credit aggregate accelerated in the period under review,\ndriven mainly by growth in asset-backed finance (mortgage advances, leasing finance\nand instalment sale credit). On a year-on-year basis, the rate of increase in total loans\nand advances accelerated from 8,8 per cent in June 2004 to 17,8 per cent in March\n2005, with growth in asset-backed finance increasing from 17,7 per cent to 22,9 per\ncent over the same period. Growth in mortgage advances recorded 24,2 per cent in\nMarch, while leasing finance and instalment sales credit grew by 15,2 and 21,0 per cent,\nrespectively. Quarter-on-quarter annualised growth in total loans and advances\n22\nMonetary Policy Review May 2005\nSouth African Reserve Bank\naccelerated from 10,1 per cent in the second quarter of 2004 to 27,0 per cent in the\nfourth quarter, before slowing to 20,0 per cent in the first quarter of 2005.\nTable 7\nPercentage change in monetary and credit aggregates\nPer cent \nPeriod\nM1A\nM1\nM2\nM3\nTotal loans and\nadvances **\nQuarterly change*\n2003\n1st qr ..................................\n-0,4\n-1,4\n14,7\n11,6\n12,4\n2nd qr .................................\n0,8\n-3,7\n23,5\n19,8\n22,3\n3rd qr ..................................\n13,0\n3,0\n15,9\n9,8\n8,4\n4th qr ..................................\n16,9\n25,7\n11,9\n10,0\n7,3\n2004\n1st qr ..................................\n40,6\n37,3\n10,2\n15,0\n12,5\n2nd qr .................................\n8,1\n-1,2\n5,9\n13,0\n10,1\n3rd qr ..................................\n0,7\n10,0\n13,8\n13,0\n12,5\n4th qr ..................................\n10,6\n14,0\n19,1\n17,6\n27,0\n2005\n1st qr ..................................\n17,0\n-0,4\n7,0\n6,0\n20,0\nTwelve-month change\n2004\nJan......................................\n15,5\n13,0\n14,8\n12,6\n12,2\nFeb......................................\n22,1\n19,3\n16,6\n14,9\n12,5\nMar......................................\n14,9\n14,1\n14,7\n14,2\n12,3\nApr ......................................\n16,9\n13,0\n11,5\n12,6\n9,9\nMay .....................................\n21,6\n16,0\n10,6\n11,9\n9,0\nJun......................................\n18,3\n18,9\n9,7\n11,8\n8,8\nJul .......................................\n15,0\n15,2\n8,9\n11,3\n9,3\nAug .....................................\n16,7\n17,6\n10,2\n13,3\n11,4\nSep .....................................\n16,6\n17,4\n12,1\n14,7\n13,2\nOct......................................\n14,9\n14,9\n12,3\n14,9\n15,2\nNov .....................................\n13,8\n13,9\n11,5\n14,2\n15,6\nDec .....................................\n12,3\n9,0\n11,0\n12,8\n16,1\nAverage\n............................................\n16,6\n15,2\n12,0\n13,3\n12,1\n2005\nJan......................................\n10,1\n5,7\n10,5\n12,0\n17,0\nFeb......................................\n6,2\n4,2\n11,3\n12,2\n17,6\nMar......................................\n13,4\n8,4\n12,6\n11,9\n17,8\n*\nQuarter-on-quarter growth at annual rates of seasonally adjusted data\n**\nTotal loans and advances to the domestic private sector excluding investments and bills discounted\nMonetary policy\nSince the publication of the previous Monetary Policy Review there have been three\nmeetings of the MPC. At the December 2004 and February 2005 meetings the monetary\npolicy stance was left unchanged. At the April meeting, the MPC decided to reduce the\nrepo rate by 50 basis points (Figure 13) in view of an improvement in inflation\nexpectations and a favourable expected inflation outcome in the next two years.\nDevelopments in the international oil markets and associated uncertainty dominated\ndiscussions not only of the threat to domestic inflation but also to world inflation and\ngrowth. However, despite the threat that looms over the market, the actual impact on\nworld and domestic inflation has been far less marked than was the case during previous\noil crises.\nAn important factor in determining the stance of monetary policy is the forecast\ngenerated by the Bank’s macroeconomic models. As has been explained in previous\nSouth African Reserve Bank\n23\nMonetary Policy Review May 2005\nMonetary Policy Reviews, monetary policy is not set mechanistically according to the\noutcome of the central forecast. Some judgement is required as well. But the model\ndoes attempt to incorporate in a systematic way the combined impact of the different\ninflation determinants on the inflation outcome. In addition, forecasts presented at\ndifferent meetings are subject to change, either because of a change in the assumptions\nabout the exogenous variables (for example the international oil price) or forecast errors.\nIn addition, the forecast is constructed on the assumption of an unchanged monetary\npolicy stance. If the stance changes one would expect to see a change in the forecast.\nThe forecasts presented to the MPC in October 2004 showed that inflation was\nexpected to peak at around 5,8 per cent in the third quarter of 2005 and then decline\nmoderately. Since then the forecasts have predicted more benign inflation outcomes. In\nFebruary 2005, the central forecast showed that inflation was expected to peak in the\nfirst quarter of 2006 at a level slightly above 5 per cent and to then decline towards the\nmid-point of the target. In April, the forecasts showed a similar pattern, although a\nslightly lower inflation path was predicted as a result of the unexpectedly low inflation\noutcome in the first month of this year. This was despite higher oil price assumptions\nfactored into the forecast. The forecast presented to the MPC in April is reproduced later\nin this Review. The MPC’s views on the outlook for some of the determinants of inflation\nare highlighted below.\nA theme that dominated all three meetings was the developments in international oil\nprices. At the time of the December 2004 meeting, oil prices had receded from their\nOctober highs of over US$52 per barrel following the Iraqi elections. In November Brent\ncrude oil averaged US$43,45, although the MPC acknowledged that the daily\nfluctuations clearly illustrated the nervousness in the market. By February 2005 the\naverage oil price had risen slightly, although the combination of the lower prices in\nNovember and December, combined with a firm rand, resulted in a lowering of domestic\npetrol prices in January and February. Since then, international prices have resumed\ntheir upward movement, averaging just below US$55 per barrel in the two weeks before\nthe April MPC meeting. The implications for domestic prices were a reversal of the petrol\nPer cent, interest rates measured at end of period\n2002\n2001\n2003\n2004\n2005\nFigure 13 \nThe repo and short-term interest rates\n6\n8\n10\n12\n14\n16\n18\n \nPrime rate\n \nRepo rate\n \n3-month NCD rate\n24\nMonetary Policy Review May 2005\nSouth African Reserve Bank\nprice reductions seen in previous months, and the likelihood that these increases would\nensure that the 3,1 per cent CPIX inflation measured in February would represent the low\npoint of the inflation outcomes for the time being.\nAt the time of the April meeting, uncertainty regarding the future course of the oil price had\nincreased, with suggestions of high upside risk. However, the MPC had to consider a\nnumber of issues. First, although there is no doubt that higher oil prices do impact\nnegatively on measured inflation, it is generally accepted that monetary policy should not\nrespond to these first-round effects. In any event, as mentioned above, the forecasts\nshowed that despite the higher oil price assumptions, inflation should remain well\ncontained. In the event of an unexpectedly high “superspike”, monetary policy would have\nto remain vigilant of the second-round effects. Furthermore, in such an event, the impact\non the real economy is likely to be contractionary, which could offset in part the impact of\nthe higher oil prices on inflation. Precipitate tightening of monetary policy under such\ncircumstances could intensify this contractionary effect. Second, there is the impact of\nhigher oil prices on the international economy. Although there has been a significant\nincrease in prices, the impact has been far more muted than in previous rounds of price\nincreases. Despite the higher prices, the IMF still forecasts inflation to be well contained,\nand the latest World Economic Outlook projects world inflation to be marginally lower in\n2005 than in 2004. This continued subdued world inflation has been one of the\nconsiderations in the setting of domestic monetary policy. The higher oil prices have,\nhowever, resulted in a downward revision of world economic growth of about 0,5 per cent.\nDevelopments in wage settlements and unit labour cost were also closely monitored by\nthe MPC. In February 2005, the committee commented on the favourable unit labour\ncost data, which showed that in the third quarter of 2004 unit labour cost had increased\nby 4,9 per cent compared to the third quarter of the previous year. At the time of the\nsubsequent meeting, this figure had been revised up to 6,6 per cent, and the figure for\nthe fourth quarter was 10,1 per cent. These figures appear to be a threat to the inflation\noutlook. However, the surveys on wage settlements continue to reflect a downward\ntrend, with the latest figures for the first quarter of 2005 indicating settlements averaging\n6 per cent. The MPC has in the past commented on the fact that wages tend to be set\non the basis of past inflation, and therefore these settlements are likely to lag, but\neventually follow, the downward trend in inflation. This pattern appears to be continuing,\nbut the committee did raise a cautionary note.\nDomestic expenditure trends continued to be carefully analysed in these meetings. As\nseen earlier, domestic expenditure remained robust and was sustained by higher\nconsumer confidence, the stronger rand, lower interest rates, higher real incomes and\nhigh asset prices. There was, however, evidence that the rate of increase in house\nprices was slowing. Nevertheless, the strong consumer demand continued over the\nperiod but there was little evidence of inflationary pressure emanating from this. The\nstrong domestic pressure was also reflected in the money supply and credit extension\nfigures. Although M3 money supply growth has remained fairly stable at around 12 per\ncent on a year-on-year basis, credit extension has been growing at a much faster rate.\nMuch of this was related to mortgage loans, reflecting the buoyant conditions in the\nproperty market, and the purchase of new motor vehicles which have reached near\nrecord highs.\nAlthough output was also relatively robust it declined moderately in the fourth quarter of\n2004 in line with the expectations of the MPC. In the April 2005 meeting, the committee\nwas concerned about the slackening pace of growth in a number of sectors, in particular\nthe manufacturing and gold-mining sectors. The outlook for growth in these sectors\nwould be affected by world economic growth as well as the rand exchange rate.\nSouth African Reserve Bank\n25\nMonetary Policy Review May 2005\nThe MPC also noted the fact that the current-account deficit has been increasing as a\nresult of the higher levels of imported goods. In 2004 the current-account deficit as a\npercentage of GDP averaged 3,2 per cent for the year, and around 4 per cent in the\nfourth quarter. The MPC was, however, confident that deficits around these levels would\ncontinue to be financed comfortably through capital inflows.\nThe rand exchange rate, which has had an important impact on the inflation outcome in\nSouth Africa, has been a source of uncertainty. At the time of the December 2004\nmeeting, the rand had strengthened mainly as a result of dollar weakness, but\nsubsequently the dollar recovered somewhat as US monetary policy was tightened.\nHowever, the continued imbalances in the US economy implied that the outlook for the\nUS dollar, and therefore for the rand exchange rate, remained uncertain. \nIn the April meeting the MPC expressed concern about the fact that since the middle of\n2004 the rand had been in a trading range significantly higher than was the case since\nthe beginning of 2003. This was not only true against the US dollar. The average\neffective (trade-weighted) exchange rate index was approximately 10 per cent higher\nthan its level between the beginning of 2003 and mid-2004. The MPC expressed\nconcern regarding the impact of this development on certain sectors of the economy\nwhich were beginning to show signs of stress in the face of the stronger rand.\nThis concern has been interpreted in some quarters as a signal that there has been a\nchange in the objective of monetary policy. However, it should be emphasised that\nachieving the inflation target remains the primary and overriding objective of monetary\npolicy. The purpose of achieving this objective is not to achieve low inflation for its own\nsake, but to provide a stable platform for sustainable economic growth. When inflation is\ncomfortably within the inflation target range, monetary policy has a greater degree of\nfreedom to focus on other factors as well. Being concerned with the impact of\ndevelopments in the rand exchange rate on the growth prospects of the economy is\ntherefore entirely consistent with the inflation-targeting framework, where the control of\ninflation remains the overriding objective. These issues are discussed further in Box 3.\nIn the December meeting the committee noted that the increase in the price of\nconsumer services had remained consistently above the upper level of the inflation\ntarget. By the April meeting, however, this measure had fallen below the 6-per-cent level\nfor two consecutive months, measuring 5,6 per cent in February 2005. This was viewed\nas a positive development, as these prices are generally less affected by exchange rate\ndevelopments than are goods prices. This reflected in part progress made by the public\nauthorities in the containment of administered price increases. Fiscal policy also\ncontinued, and is expected to continue, to be supportive of monetary policy during this\nperiod, with the MPC highlighting the lower-than-expected budget deficit outturn for the\n2004/05 fiscal year.\nOther favourable developments over the period included the continued low levels of\nproduction price inflation, which indicate few pressures coming through on consumer\nprices in the short term and continued low levels of food price increases. \nFinally, a further important positive development has been the evolution of inflationary\nexpectations which are discussed in more detail later in this Review. All the recent\nsurveys showed a progressive decline in inflation expectations. The results of the latest\nsurvey by the Bureau for Economic Research (BER) showed that all categories of\nrespondents expected CPIX inflation to remain in the target range over the next three\nyears. These improved expectations are seen as an illustration of the improved credibility\nof monetary policy and an important signal that low inflation is sustainable.\n26\nMonetary Policy Review May 2005\nSouth African Reserve Bank\nFrom the discussion above it is clear that the MPC was cognisant of the risks to the\ninflation forecast. However it was felt that, on balance, and given the favourable inflation\noutcome and expected outcomes, the factors supporting a further rate reduction\noutweighed the risks. Accordingly, the MPC decided at its April meeting that a further\n50-basis-point reduction in the repo rate was justified. This brought the repo rate down\nto 7 per cent. Although this is low in nominal terms, real rates remain in line with those\nin a number of other countries including Australia, New Zealand and the UK, and are still\nsignificantly higher than those in the US and the euro area (Figure 14).\nPer cent\nFigure 14 \nReal money-market interest rates in April 2005\nArgentina\nUS\nEuro\nArea\nJapan\nKorea\nIndia\nUK\nAustralia\nSouth\nAfrica\nNew\nZealand\nTurkey\nBrazil\n-5\n0\n5\n10\n15\n * December 2004\n ** Calculated using CPIX inflation\n3-month money-market interest rates adjusted using latest 12-month inflation in \nconsumer prices\nSource: Bloomberg and The Economist\n11,8\n8,9\n3,5*\n3,0\n0,4\n0,05\n0,04\n-0,05\n3,5**\n3,1*\n1,1\n-4,5\nBox 3\nInflation targeting and the objectives of monetary policy\nWithin an inflation-targeting framework, achieving and maintaining inflation at or around the target\nis the primary objective of monetary policy. The question that is often raised is whether or not\nmonetary policy should have or does have other objectives as well. In South Africa, when interest\nrates were raised in 2002 in response to exchange rate developments, the Bank was accused of\nbeing indifferent to economic growth and of having exchange rate targets. More recently, the\nBank’s decision to lower interest rates has been met with criticism that the Bank is now targeting\noutput and/or the exchange rate. Maintaining the inflation rate within the 3-6 per cent target range\nremains the overriding objective of monetary policy. However, to suggest that monetary policy\ndoes not take other developments into consideration in reaching a decision on interest rate\nchanges is to misunderstand the nature of the inflation-targeting framework. \nThere are three main reasons for wanting to achieve low inflation. Firstly, there are good\ndistributional and efficiency reasons. It is generally the case that the poor are affected most by\ninflation as they are least able to hedge against the ravages of high inflation. In addition, inflation\ncan result in a misallocation of resources across sectors of the economy. Secondly, low inflation\nSouth African Reserve Bank\n27\nMonetary Policy Review May 2005\nor price stability provides an anchor for inflation expectations. If inflation expectations are well\nanchored, this makes price stability easier to maintain in the long term. Finally, low inflation\nmakes an important contribution to growth by providing a stable environment for sustainable\neconomic growth. This is in line with the constitutional mandate of the Bank to protect the value\nof the currency in the interest of balanced and sustainable economic growth. In the long run,\ntherefore, low inflation contributes to economic growth by providing a stable macroeconomic\nenvironment. This does not, however, imply that there is a long-run trade-off between growth\nand inflation. The Bank does not believe that higher long-run growth can be achieved through\nhigher inflation. On the contrary, it believes that higher long-run growth will be achieved against\na background of low inflation. Low inflation brings about lower interest rate variability and lower\nnominal interest rates on a sustainable basis which contribute to growth. More recently, with\ninflation remaining well contained within the inflation target range, higher levels of economic\ngrowth have been achieved on a sustainable basis which is indeed the reason monetary policy\nis directed at maintaining low inflation.\nAchieving low inflation may incur short-run real costs, and there may be a trade-off between\ninflation variability and output variability in the short run. It is perhaps instructive to distinguish here\nbetween what is usually referred to as strict and flexible inflation targeting. Strict inflation targeting\nis when only inflation enters the central bank’s objective function, while flexible inflation targeting\nis when other variables, such as output, have a positive weight in the objective function. The fact\nthat most central banks to some extent have secondary objectives means that flexible inflation\ntargeting is the general case. \nThe question then becomes how flexible inflation targeting is applied, or what weight is assigned\nto output? It is often the case that in the early phase of inflation targeting, a greater weight is\nassigned to inflation as credibility is built up. Monetary policy characterised by strict inflation\ntargeting will try to hit the target as quickly as possible under all circumstances. Under flexible\ntargeting, monetary policy will gradually push inflation towards the target. Most inflation-targeting\nmodels show that the stricter inflation targeting is, the more variable output will be. Too narrow a\nfocus on inflation will result in interest rate and output instability. By contrast, too much of a focus\non the cyclical growth issues will result in greater inflation variability and lower credibility for the\nwhole inflation-targeting framework. The issue then is the appropriate trade-off between rigid\nadherence to the inflation target on the one hand and a steady path of output on the other, bearing\nin mind credibility considerations.\nEven if a central bank does not have output variability or the size of the output gap as a specific\nobjective of monetary policy, it is the case that in most models of inflation, the output gap is one\nof the determinants of inflation. A widening output gap (i.e. lower current or expected growth)\nimplies less pressure on inflation, and therefore room for further monetary accommodation.\nConversely, as the output gap closes, a tighter monetary policy stance is more likely.\nSimilarly, current or expected exchange rate developments will feed into the monetary policy\ndecision-making process. An appreciating currency will be reflected in a more benign inflation\nforecast because of the direct price effect of import prices on domestic prices. Furthermore, an\nappreciating currency results in a contraction in output and an effective tightening of monetary\nconditions, and this impact on economic growth could be offset by lower interest rates.\nFurthermore, although monetary policy does not target the exchange rate, the valuation of the\nexchange rate could be cause for concern. \nThis does not mean that responses to exchange rate or output developments happen\nmechanically, i.e. that every time the exchange rate appreciates or output declines there will be an\neasing of monetary policy. The inflation outlook is impacted on by a number of concurrent and\noften contradictory forces, and the forecasting model will take this into account. In addition, the\nMPC will have to use its judgement as to the likely evolution of these variables. As long as the\ninflation target remains the overriding objective of monetary policy, it is appropriate that monetary\npolicy takes cognisance of other variables that impact on inflation.\n28\nMonetary Policy Review May 2005\nThe outlook for inflation\nThe outlook, risk and uncertainties relating to some of the factors that determine the\noutlook for inflation and that are embodied in the forecast, are presented in this section. \nInternational outlook\nHaving moderated as 2004 progressed, global growth looks set to continue at\nsustainable, though still robust, rates in 2005 and 2006. The IMF projects world growth\nat 4,3 per cent in 2005 and at 4,4 per cent in 2006 (Table 8). Global inflation is expected\nto remain subdued at 3,6 and 3,1 per cent in 2005 and 2006, respectively. Although\nmacroeconomic policies and financial conditions remain generally supportive of growth,\nthere are a number of threats and challenges to this outlook.\nTable 8\nIMF projections of world growth and inflation for 2005 \nand 2006 \nPer cent\nReal GDP\nInflation rates\n2005\n2006\n2005\n2006\nWorld ......................................................................\n4,3\n4,4\n3,6\n3,1\nAdvanced economies ............................................\n2,6\n3,0\n2,0\n1,9\nUnited States......................................................\n3,6\n3,6\n2,7\n2,4\nJapan ................................................................\n0,8\n1,9\n-0,2\n-0,0\nEuro area............................................................\n1,6\n2,3\n1,9\n1,7\nUnited Kingdom ................................................\n2,6\n2,6\n1,7\n2,0\nOther advanced economies................................\n3,1\n3,4\n2,0\n2,1\nOther emerging-market and developing countries\n6,3\n6,0\n5,5\n4,6\nAfrica..................................................................\n5,0\n5,4\n7,7\n5,9\nCentral and eastern Europe................................\n4,5\n4,5\n5,2\n4,0\nCommonwealth of Independent States ..............\n6,5\n6,0\n11,4\n8,8\nDeveloping Asia..................................................\n7,4\n7,1\n3,9\n3,4\nChina ..............................................................\n8,5\n8,0\n3,0\n2,5\nIndia................................................................\n6,7\n6,4\n4,0\n3,6\nMiddle East ........................................................\n5,0\n4,9\n8,6\n8,3\nWestern hemisphere ..........................................\n4,1\n3,7\n6,0\n5,2\nSource: IMF World Economic Outlook, April 2005\nThe projections in Table 8 indicate that US GDP will grow by 3,6 per cent in both 2005\nand 2006. Inflationary pressures remain relatively benign as inflation is projected to slow\nfrom 2,7 per cent in 2005 to 2,4 per cent in 2006. However, uncertainties regarding the\nlarge deficits in the US and the future path of the US dollar exchange rate, which\nincrease the risk associated with global imbalances, suggest that there are threats to\nthese projections. The US budget proposals for the fiscal year 2006, which aim to halve\nthe budget deficit in 4 years, will be an important step towards sustainability.\nThe euro area and Japan, which together account for nearly one quarter of global\noutput, have performed disappointingly recently. Given strong economic ties, economic\ndevelopments in these countries have a significant impact on growth prospects for\nSouth Africa. Growth in the euro area is projected at 1,6 per cent for 2005 improving to\n2,3 per cent for 2006, and in Japan at 0,8 and 1,9 per cent for 2005 and 2006,\nrespectively. The projections for inflation in Table 8 suggest that inflationary pressures are\nwell contained in both cases. The UK economy is projected to grow by 2,6 per cent in\nboth 2005 and 2006, with inflation rates of 1,7 and 2,0 per cent, respectively. \nSouth African Reserve Bank\nIn Developing Asia growth is expected to be slightly slower in 2005 and 2006 at 7,4 and\n7,1 per cent, respectively, compared with the 8,2 per cent growth rate achieved in 2004.\nChina’s economy grew by more than 9 per cent for the second straight year in 2004,\nand is expected to slow only slightly to 8,5 per cent in 2005 and 8,0 per cent in 2006.\nDespite slowing markedly in recent months, inflation in China remains a concern. The\nconsumer price index registered a 3,9-per-cent increase in 2004, although this is\nprojected to slow in 2005 and 2006. Latin America is expected to grow robustly this\nyear, as is the oil-rich Middle East region, and prospects for growth in sub-Saharan\nAfrica remain generally favourable.\nSolid global growth is therefore expected in 2005 and 2006. However, there are important\nrisks to the outlook which are perhaps tilted slightly to the downside. Some of the key\nrisks cited by the IMF are the increasingly unbalanced nature of the global expansion, the\npossibility of a sudden tightening of financial conditions and further sharp increases in the\noil price. The IMF forecasts are based on the assumption of an average price of oil of\nUS$46,50 per barrel in 2005, and US$43,75 per barrel in 2006 (a simple average of the\nspot prices of UK Brent, Dubai, and West Texas Intermediate crude oil). \nOutlook for domestic demand and supply\nThe domestic economy looks set to sustain the growth momentum which was\nestablished in 2004. The latest Reuters consensus forecast, based on surveys\nundertaken in late March 2005, is for real GDP growth of 4,1 per cent in 2005 and \n3,8 per cent in 2006. The forecasts are the means of 13 individual forecasts ranging\nbetween 3,7 and 4,6 per cent for 2005, and between 3,4 and 4,5 per cent for 2006. \nDomestic demand is likely to remain the most important force behind economic growth\nin 2005. Consumer confidence remains high, as is borne out by the near-record levels of\nthe First National Bank/BER consumer confidence index in the first quarter of 2005. The\nimprovement in this index in recent quarters has been broad-based as confidence\nincreased across all population and income groups. The factors that pushed consumer\nconfidence higher last year remained in place, including the lowest nominal interest rates\nin over two decades, low inflation, a surge in house and share prices, favourable personal\ntax rates, increased social grants and a moderate improvement in employment.\nEconomic activity on the supply side has also shown signs of expansion. The tertiary\nsector has contributed substantially to economic growth and remains resilient, and the\nextended period of growth in domestic demand has helped to offset the adverse impact\nof the exchange rate and disappointing export growth of the secondary sector. There is\nevidence, however, of a slackening of activity in parts of the manufacturing and primary\nsectors which is related to the stronger external value of the rand in the past six months.\nMany companies have seen their profits soar, with the First National Bank/BER business\nconfidence index recording a recent high in March 2005. Businesses also deemed this\nyear’s Budget and the amendment to the company tax rate as complementing the\npresent favourable financial environment and ensuring continued momentum for\nmedium-term economic growth. The South African Chamber of Business (Sacob)\nbusiness confidence index registered 127,5 in March 2005, its highest level since\nreaching a record level of 130,9 in September 2004. However, the Standard\nBank/Sacob Trade Conditions Survey, which appraises overall trading conditions in\nSouth Africa on a monthly basis, indicated that trade conditions had been slightly weaker\nin the first three months of 2005. The medium-term (six months ahead) outlook\nnevertheless continues to be quite optimistic according to the trade expectations index\nfor March. \nSouth African Reserve Bank\n29\nMonetary Policy Review May 2005\n30\nMonetary Policy Review May 2005\nIndicators of inflation expectations\nExpectations for CPIX inflation in 2005 have declined to the midpoint of the target range,\naccording to the results of the most recent BER quarterly survey of inflation expectations\nfor South Africa. The latest survey of financial analysts, business executives and\nrepresentatives of the trade union movement was conducted early in March 2005. Table\n9 shows that the average expectation for 2005 regarding the CPIX inflation measure\ntargeted by the Reserve Bank is 4,5 per cent, rising slightly to 4,8 per cent for 2006 and\nto 5,0 per cent for 2007. Since the survey undertaken in the fourth quarter of 2004, the\naverage expectations for CPIX inflation in 2005 and 2006 have declined by a full\npercentage point in each case. \nTable 9\nBER survey of CPIX inflation expectations: 1st quarter 2005* \nPer cent\n2005\n2006\n2007\n1. Finance................................................\n(4,7)\n4,0\n(5,2)\n4,7\n( )\n4,8\n2. Business..............................................\n(6,3)\n4,7\n(6,6)\n5,1\n( ) \n5,4\n3. Labour ................................................\n(5,6) \n4,8\n(5,7) \n4,6\n( )\n4,8\nAverage 1 – 3 ..........................................\n(5,5)\n4,5\n(5,8)\n4,8\n( )\n5,0\n*\nFourth-quarter 2004 results in parentheses\nSource: Bureau for Economic Research, University of Stellenbosch\nThe decline in overall CPIX inflation expectations between the fourth quarter of 2004 and\nfirst quarter of 2005 was primarily the result of a downward shift in the expectations of\nbusiness executives. Their expectation for inflation in 2005 declined by 1,6 percentage\npoints and for inflation in 2006 by 1,5 percentage points. By contrast, labour represen-\ntatives’ expectations for 2005 and 2006 declined by 0,8 and 1,1 percentage points, and\nthose financial analysts by 0,7 and 0,5 percentage points, respectively.\nThe Reuters survey of economists based in South Africa, the UK and the US published on\n7 April reports a similar trend in consensus forecasts for 2005-07. CPIX inflation is\nexpected to average 4,1 per cent in 2005, representing the mean of 15 individual forecasts\nranging from 3,4 to 4,7 per cent. The expectation is that CPIX inflation will then rise to\naverage 4,8 per cent in 2006, and 5,0 per cent in 2007. The consensus forecast for 2006\nis the mean of 16 forecasts ranging between 3,6 and 5,8 per cent, and for 2007 it is the\nmean of 10 forecasts ranging between 4,1 and 6,0 per cent.\nEvidence of inflation expectations being anchored in the target range is also provided by the\nbreakeven inflation rates, measured by the spreads between the yields on South African CPI\ninflation-linked bonds and conventional nominal bonds of similar maturity. These spreads\nprovide an indication of expected inflation over the period until the bond matures, assuming\nno changes to the risk premium associated with future inflation and differences in the\nliquidity of the bonds and their payment patterns. As Figure 15 shows, these breakeven\ninflation rates declined steadily between mid-2004 and the end of February 2005, rose\nslightly in March, and then declined once more in April. The inflation expectations obtained\nfrom the R197 (maturing 2023), R189 (maturing 2013) and R198 (maturing 2008) inflation-\nlinked bonds have remained within the target range since mid-2004 and were around 4 per\ncent at the end of April 2005.\nSouth African Reserve Bank\nThe Reserve Bank inflation forecast\nFigure 16 reproduces the Reserve Bank’s quarterly forecast for CPIX inflation presented at\nthe MPC meeting on 13 and 14 April 2005. The latest observed value for CPIX was for the\nfourth quarter of 2004, although January 2005 data were incorporated in the forecast for\nSouth African Reserve Bank\n31\nMonetary Policy Review May 2005\nPercentage points\n2001\n2002\n2003\n2004\n2005\nFigure 15 \nBreakeven inflation rates\n3\n4\n5\n6\n7\n8\n9\n \nSpread between R189 and R153 bonds\n \nSpread between R197 and R186 bonds\n \nSpread between R198 and R194 bonds\nPer cent\n2002\n2003\n2004\n2005\n2006\nFigure 16 \nCPIX forecast\n0\n2\n4\n6\n8\n10\n12\nNote: The fan chart uses confidence bands to depict varying degrees of certainty. The\ndarkest band of the fan chart covers the most likely 10 per cent of probable\noutcomes foreseen for CPIX inflation, including the central projection. Each\nsuccessive band, shaded slightly lighter and added on either side of the central\nband, adds a further 10 per cent to the probability until the whole shaded area\ndepicts a 90 per cent confidence interval (see Box 4 “Understanding the fan\nchart” on p 27 of the March 2001 Monetary Policy Review).\n32\nMonetary Policy Review May 2005\nthe first quarter of 2005. The forecast is based on the assumption of an unchanged repo\nrate at 7,5 per cent over the forecast period, which runs from the first quarter of 2005\nto the final quarter of 2006. \nThe central projection of the forecast is for the CPIX inflation rate to reach a lower turning\npoint in the first quarter of 2005 and then to increase to 5,2 per cent in the first quarter\nof 2006, before gradually declining to around 4,5 per cent by the end of the forecast\nperiod. The probability distribution for this forecast suggests that there is approximately\nan 80 per cent probability that the CPIX inflation rate will be between 3 and 6 per cent\nin the final quarter of 2006.\nWith regard to the risks to the forecast, there are a number of factors that increase the\npossibility of outcomes that deviate from the central projection. Important among these\nis the threat of international crude oil price spikes, which would increase the upside risks\nassociated with the forecast. Additional factors such as high rates of growth in asset-\nbacked credit extension and administered price increases above the upper limit of the\ntarget range are also relevant in this regard. The low rates of production price inflation\nand agricultural futures suggest that future pressure from these sources will be limited.\nOverall, the balance of risks associated with the forecast is deemed to be neutral. \nAssessment and conclusion\nAgainst a background of an uncertain international economic environment, monetary\npolicy in South Africa has contributed to maintaining inflation within the inflation target of\n3 – 6 per cent. Although the inflation rate appears to have reached a lower turning point\nin February, the increase in March to a year-on-year rate of 3,6 per cent was attributable\nmainly to the higher international oil prices. Of significance is the fact that despite the\nhigher oil prices, inflation is expected to remain comfortably within the target range over\nthe forecast period of two years. This view is confirmed not only by the Bank’s forecasts,\nbut also by the fact that inflation expectations have continued to improve considerably\nover time.\nThe lower actual and forecasted inflation resulted in more room for the Bank to reduce\ninterest rates at the April meeting of the MPC. This move was justified not only on the\nbasis of the improved inflation outlook but also on the basis of evidence of a slackening\nof activity in some sectors of the economy. These sectors have been negatively affected\nby the continued strength of the exchange rate which has in effect resulted in an\ninvoluntary tightening of monetary conditions. On a weighted basis, the rand has been\ntrading over the past few months at a range higher than for the main part of 2004.\nMonetary policy will continue to be forward looking and will remain focused on the\nexpected trend of inflation. As usual, there are a number of upside and downside risks\nand uncertainties relating to the determinants of the inflation trend. On the international\nfront, there are the oil prices and their impact on global growth and prices, as well as the\nuncertain outlook for the US dollar which has implications for the exchange rate of the\nrand. Domestically, monetary policy will have to take cognisance of the risks and\nuncertainties relating inter alia to the continued high levels of expenditure, the outlook for\nthe output gap and trends in wage settlements. Monetary policy will be guided by the\nMPC’s assessment of the future developments in these and other variables, and their\nexpected impact on the outlook for inflation. \nSouth African Reserve Bank", "source": "SARB", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monetary_Policy_Reports/mpr052005.pdf"}
{"doc_id": "552c3a63ec34b7f7301a8a753cea7b47", "text": "BANK OF GHANA\nMonetary Policy Summary\n7102\nYRAUNAJ\nNKOFGHA\nA N\nB A\nEST.1957\n\nPag e | i\nPREFACE\nThe Bank of Ghana’s Monetary Policy Summary provides a brief overview of macroeconomic developments\nand monetary policy considerations, released after each MPC meeting in January, May, July and\nNovember. After meetings in March and September, a full Monetary Policy Report is published. The aim of\nissuing these monetary policy publications is to provide the public with background materials which served\nas inputs for the policy decision making process and economic assessments at each MPC session. Through\nthe publication of these documents, Bank of Ghana aims to promote accountability of its decision making\nand build understanding of the monetary policy formulation process among stakeholders.\nMonetary Policy in Ghana\nThe primary objective of the Bank of Ghana is to pursue sound monetary policies aimed at price stability\nand creating an enabling environment for sustainable economic growth. Price stability in this context is\ndefined as a medium-term inflation target of 8 percent with a symmetric band of ±2 percent, for which the\neconomy is expected to grow at its full potential without excessive inflation pressures. Other tasks for the\nBank of Ghana include promoting and maintaining a sound financial sector and payment systems through\neffective regulation and supervision. This is important for intermediation since risks associated with financial\nmarkets are taken into account in monetary policy formulation.\nMonetary Policy Strategy\nTo achieve the objective of price stability, Bank of Ghana was granted operational independence to employ\nwhichever policy tools were deemed appropriate to stabilise inflation around the medium-term target. The\nBank of Ghana’s framework for conducting monetary policy is Inflation Targeting (IT), in which the central\nbank uses the Monetary Policy Rate (MPR) as the primary policy tool to set the monetary policy stance and\nanchor inflation expectations in the economy.\nThe MPC Process\nThe MPC is a statutorily constituted body by the Bank of Ghana Act to formulate monetary policy. The MPC\nconsists of seven members – five from the Bank of Ghana (including the Governor who acts as the\nChairman) and two external members appointed by the Board of the Bank of Ghana. The MPC meets once\nin every two months to assess economic conditions and risks to the inflation outlook, after which a policy\ndecision is made on positioning the MPR. Each MPR decision provides a signal of tightening (increase),\nloosening (decrease) or maintaining (no change) the monetary policy stance. The MPC meeting dates are\ndetermined well in advance at the beginning of each year. The policy decision is arrived at by consensus\nwith each member stating reasons underlying a preferred rate decision. An MPC policy statement is\npublished via a press release, and a press conference is held, after each MPC meeting to communicate and\nexplain the Committee’s decisions to the financial markets and the general public.\nMonetary Policy Summary /January 2017\n\nPag e | ii\nContents\nPreface ............................................................................................................................................................. i\nModerate recovery continues in global economy ............................................................................................. 1\nCommodity prices remain volatile but some may pick up ................................................................................. 2\nBalance of payments turns positive after five years ......................................................................................... 2\nPace of economic activity subdued but prospects positive .............................................................................. 3\nInflation continues to decline ........................................................................................................................... 4\nFiscal challenges pose risks to the inflation outlook ......................................................................................... 5\nMoney supply growth picks up ......................................................................................................................... 5\nMoney market rates decline with a slight uptick in private sector credit growth ................................................ 6\nMixed performance of key financial sector indicators as NPLs decline ............................................................ 6\nRelative stability in the exchange rate is foreseen ........................................................................................... 7\nGlobal policy uncertainties weigh on domestic economy ................................................................................. 7\nMonetary policy stance unchanged ................................................................................................................. 7\nRecent inflation trends are positive but risks exist ........................................................................................... 8\nANNEXES ....................................................................................................................................................... 9\nMonetary Policy Summary /January 2017\n\nPag e | 1\nModerate recovery continues in global economy\nThe global recovery process continued at a moderate pace,\nhindered by heightened policy uncertainties in the US and\nEuro Area, volatile commodity prices and rebalancing in\nChina. It is however expected that growth in the advanced\neconomies will pick up pace in 2017 on the back of expected\ntax cuts and increased infrastructure spending, especially in\nthe U.S. The fiscal stimulus will boost trade in the Euro Area\nand Japan and further strengthen the recovery efforts.\nGrowth in emerging economies is also expected to pick up in\n2017 driven mainly by the recovery in commodity prices,\nsustained growth in China and India, end of recession in the\nlargest emerging economies such as Russia and Brazil, and a\npickup in global trade. However, higher yields and stronger\ndollar may increase external financing costs. In addition,\nexports may decline if the US goes ahead with protectionist\ntrade policies. Tighter immigration policies in the US may also\nreduce remittance flows to emerging economies.\nIn Sub-Saharan Africa, growth was constrained by mounting\ndomestic imbalances particularly in Nigeria and South Africa,\nand a slow recovery in commodity prices during 2016. The\nrecent recovery in commodity prices is therefore expected to\nboost growth in Sub-Saharan African countries in 2017.\nGlobal growth projected to pick up pace in 2017\nHowever, the continuing domestic imbalance in the two largest\neconomies on the African continent will remain a major risk to 5\nthe regional growth outlook. 4.5\n4\nGlobal financial markets have also recovered somewhat, 3.5\ndespite lingering doubts about the strength of the recoveries in 3\n2.5\nthe Euro Area and Japan. Stocks in the U.S have rebounded\n2\ndue to the stronger than expected growth in the third quarter\n1.5\nand the prospects of stronger growth in 2017. The Fed is also\n1\nexpected to continue gradual increases in interest rates as\n0.5\ngrowth prospects strengthen in the U.S.\n0\nAdvanced Emerging market World\neconomies and developing\nOn the whole, risks to the global economic outlook appear to\neconomies\nbe broadly balanced. But, upside risks such as a stronger US\n2014 2015 2016 2017\ndollar and rising global bond yields, on the back of expected\nhikes in the Fed funds rate, could impact adversely on Source: IMF World Economic Outlook, January 2017\nGhana’s balance of payments, fiscal operations and the\ninflation outlook.\nMonetary Policy Summary /January 2017\n\nPag e | 2\nCommodity prices remain volatile but some may\npick up Cocoa, gold, and crude oil prices remained volatile in\n2016 (Jan-14=100)\nInternational prices of Ghana’s three key export commodities\n140.0\nwere volatile throughout last year. Average gold prices\nrecovered in the year due to an increase in financial market 120.0\nvolatilities and the expected Fed rate hike, posting a 7.6 per 100.0\ncent annual rise. Brent crude oil prices also rebounded in the\n80.0\nlater part of 2016, following the consensus reached by OPEC\n60.0\nto cut production. On year-on-year basis, crude oil prices\nmoved up by 41.1 per cent. Cocoa prices however, declined 40.0\non the futures market underscored by projected excess\n20.0\nsupply. On year-on-year basis, cocoa prices declined by 31.3\n0.0\nper cent.\nThe January 2017 Commodity Markets Outlook by the World\nBank indicates that some key commodity prices may pick up in\n2017. In particular, cocoa price is projected to average about Balance of payments records the first surplus in 5 years\nUS$2,940 per tonne in 2017 from US$2,850 in 2016.\nUnderlining this cocoa price projections are declines in output\nin West Africa and a pick-up in global demand. Oil prices are\nalso projected to increase to US$55 per barrel in 2017 from an\naverage of US$44 per barrel in 2016 because of increased\nglobal demand and the OPEC output cut. However, gold\nprices are projected to decline from an average of US$1,249\nper fine ounce in 2016 to US$1,219 in 2017 due largely to an\nexpected strengthening of the US dollar. Some other optimistic\nforecasts project gold prices to range between US$1,331 -\nUS$1,500 fine ounce on the back of dwindling number of new\ngold mines and soaring of global investment demand. These\nprice developments, coupled with the expected increase in\nexport volumes, should improve Ghana’s trade balance in the Trade account improves on the back of increased\nexport receipts (US$ m)\nshort-to-medium term.\nBalance of payments turns positive after five\nyears\nFor the first time since 2011, the provisional balance of\npayments in 2016 recorded a surplus. This largely reflected an\nimprovement in the trade balance driven by a rise in gold\nexport receipts and a fall in oil import prices. The improvement\nmore than compensated for the moderation in the capital and\nfinancial accounts arising from lower official foreign inflows.\nIn 2016, the trade balance improved from a deficit of\nUS$3.1bn in 2015 to a deficit of US$1.7bn due to an increase\nin exports receipts by 7.2 per cent and a decline in imports by\n5.3 per cent. The services and income accounts also recorded\nappreciable improvement during the year, but the transfers\nMonetary Policy Summary /January 2017\n41-naJ 41-raM 41-yaM 41-luJ 41-peS 41-voN 51-naJ 51-raM 51-yaM 51-luJ 51-peS 51-voN 61-naJ 61-raM 61-yaM 61-luJ 61-peS 61-voN\nCocoa Gold Oil\n800\n600\n400\n200\n0\n-200\n-400\n-600\n-800\n2011 2012 2013 2014 2015 2016\nnoillim'$SU\n16,000.0\n14,000.0\n12,000.0\n10,000.0\n8,000.0\n6,000.0\n4,000.0\n2,000.0\n0.0\n-2,000.0\n-4,000.0\n-6,000.0\n201420152016 201420152016 201420152016\nExports Imports Trade Balance\n\nPag e | 3\naccount was impacted adversely by delays in grant\nThe balance of payments surplus reflects an improved\ndisbursements and reduced remittance inflows. Consequently,\ncurrent account balance\nthe provisional estimates of the current account deficit\n5,000 0.7\nimproved to US$2.6bn in 2016 compared with US$2.8bn in\n4,000 0.6 0.6\n2015. 3,000 0.5\n0.4\n2,000\n0.3\nThe capital and financial account surplus reduced by 5.8 per 1,000\n0.2\ncent due to a marginal increase in foreign direct investment -\n0.1\ncoupled with lower portfolio inflows and official loan -1,000 0\n-2,000\ndisbursements during the period. -0.1\n-3,000 -0.2 -0.2\n-4,000 -0.3 -0.3\nThis notwithstanding, the overall BOP recorded a surplus of\n-5,000 -0.4\nUS$247mn (+0.6% GDP), compared to a deficit of US$129 mn 2014 2015 2016\n(-0.3% GDP) in 2015. The improved BOP position translated CA balance ($m) CFA balance ($m)\nOverall Balance (% GDP)\ninto external reserves accretion. Gross foreign assets\nincreased to US$6.2bn in 2016, equivalent to 3.5 months\nimport cover. This compares with US$5.9bn in 2015.\nPace of economic activity still subdued\n15.0\nThe balance of payments outlook for 2017 remains positive\ngiven that production levels at the TEN oil fields and the 10.0\nSankofa Fields are expected to ramp up, resulting in increased\nvolume of oil exports. On the downside, the expected hikes in 5.0\nFed’s rate and the possible appreciation of the US dollar\nleading to tight external financing conditions and lower 0.0\nportfolio inflows, which may exert downward pressures on the\n-5.0\nexchange rate and worsen the inflation outlook.\n-10.0\nPace of economic activity subdued but prospects\npositive\nEconomic activity remained modest throughout last year,\nagainst the backdrop of policy tightness, oil and gas\nConsumer sentiments reflect optimism about economic\nproduction challenges at the Jubilee field, and lingering prospects\nconsequences of the power supply constraints. The November\n110.0\n2016 update of the Composite Index of Economic Activity 100.0\n(CIEA) points to subdued pace of economic activity, reflecting 90.0\ndeclines in industrial consumption of electricity, cement sales, 80.0\ntourist arrivals and domestic VAT collection. 70.0\n60.0\nThe latest consumer sentiments survey conducted after the 50.0\nDecember 2016 polls reflected optimism about economic 40.0\nprospects. This was against the back drop of favourable 30.0\neconomic outlook and moderating consumer prices. 20.0\n10.0\nEconomic activity is expected to strengthen in 2017 on the\nback of gradual rebound in credit extension to the private\nsector and improvement in the macro fundamentals. In\naddition, the expected increase in oil production from the TEN\nMonetary Policy Summary /January 2017\n\nPag e | 4\nand the Sankofa fields are expected to boost growth further in Headline inflation declines, driven by non-food inflation\n2017. However, the major risks to the growth outlook include 30.0\nvolatile commodity prices and high utility costs.\n25.0\n20.0\nInflation continues to decline\nHeadline inflation continued to ease in the last quarter of 2016. 15.0\nFrom the peak of 19.2 percent in the first quarter of 2016\n10.0\n(17.7% in Dec. 2015), inflation broadly slowed to 15.4 per cent\n5.0\nin December 2016. This was supported by the monetary policy\ntightening over the past years and relative stability of the\n0.0\nexchange rate for most of 2016 and easing underlying inflation\npressures.\nOverall Food Non-food\nThe slowdown in inflation was influenced mainly by non-food.\nNon-food inflation declined from 23.3 per cent in December Moderation in the CPI sub-indices (%)\n2015 to 18.2 per cent in December 2016, supported by 2.0\nstability in the domestic currency and favourable base effects\n1.5\narising from the upward revision in petroleum products a year\nearlier. In contrast, food inflation picked up from 8.0 per cent in\n1.0\nDecember 2015 to 9.7 per cent in December 2016, driven\nlargely by domestic food components. 0.5\n0.0\nContributions to the overall consumer price index showed\ngeneral moderation in all the sub-indices in December 2016,\n-0.5 Others Transport\nwith the exception of food & beverages and medical care & Housing & Utilities Food&Bev\nhealth expenses which exerted slightly higher upward -1.0\npressures on inflation.\nThe Bank’s main core measure of inflation, which excludes\nenergy and utility prices, significantly declined to 14.6 per cent Core inflation moderating (%)\nin December 2016 from 18.6 per cent in December 2015, 25.0\nindicating an easing of underlying inflation pressures.\n20.0\nSimilarly, the Bank of Ghana’s round of surveys on inflation\nexpectations declined significantly alongside headline inflation 15.0\nduring 2016. The consumer inflation expectation index\n10.0\ndeclined to 79.6 in December 2016 from 87.8 in December\n2015. Also, the financial sector inflation expectations declined Headline Inflation\n5.0\nto 14.8 per cent from 18.0 per cent over the same comparative Core Inflation (excl. energy and\nutility)\nperiod. The improvement in inflation expectations was mainly\n0.0\nattributed to relative stability in the local currency, improving\nelectricity supply and renewed confidence in the economy\nfollowing another successful election.\nMonetary Policy Summary /January 2017\n\nPag e | 5\nFiscal challenges pose risks to the inflation\nBudget deficit widens due to revenue shortfalls (% GDP)\noutlook\n35\nProvisional fiscal data for the first eleven months of the year\n30\nshow that total Revenue and Grants amounted to GH¢30.1 25\nbillion (18.0% of GDP) compared with a target of GH¢34.0 20\nbillion (20.4% of GDP); while total expenditures and arrears 15\nclearance stood at GH¢41.7 billion (25% of GDP) relative to 10\nthe target of GH¢42.4 billion (25.4% of GDP). 5\n0\n-5\nThese resulted in an overall budget deficit which was\nestimated at 7.0 per cent of GDP as of November 2016, higher -10 -8.1 -5.8 -7.0\n-10.0\n-15 -11.2\nthan the target of 4.7 per cent of GDP. The deficit was\nNov-12 Nov-13 Nov-14 Nov-15 Nov-16\nfinanced mostly from domestic sources that included a\ndrawdown on government deposits with the Bank of Ghana.\nRevenue & Grants Total Exependiture Fiscal Deficit\nThe fiscal slippage was mainly attributed to shortfalls in\nrevenues, arising from low international oil prices, weak tax Public debt expands in November 2016\nrevenue mobilization and lower than expected donor support. 35.0 80.0\nThe fiscal outturn for 2016 presents upside risks to the inflation 30.0 70.0\noutlook. 60.0\n25.0\n50.0\n20.0\nAvailable data indicates that the total public debt stood at\n40.0\nUS$30.1 billion (71.9% of GDP) at the end of November 2016, 15.0\n30.0\ncompared with US$25.6 billion (69.5% of GDP) at the end of 10.0\n20.0\nDecember 2015. Of the total, Domestic debt accounted for\n5.0 10.0\nover 55 per cent, compared with some 40 per cent share in\n0.0 0.0\n2015. The rising share of domestic debt in total public debt is a\npositive development for long term debt sustainability for two\nmain reasons.\nFirst, it would help minimize the potential impact of\nunanticipated redemptions, and secondly, lower the sensitivity\nof the public debt profile to exchange rate volatility. It is Yield curve moves lower in 2016 (%)\nhowever important to manage this process in a manner that\ndoes not crowd out the private sector from the loanable funds\nmarket.\nMoney supply growth picks up\nReserve money growth picked up on account of a higher\ncontribution from the Net Domestic Assets (NDA) of the Bank\nof Ghana. This was as a result of higher contributions from the\nOMO sterilization account and other items net.\nBroad money supply (M2+) growth also picked up due to a\nhigher contribution from the NDA of the banking system. The\nrise in M2+ growth was reflected in currency outside banks\nand demand deposits.\nMonetary Policy Summary /January 2017\nnb$SU PDG\n%\nExternal Domestic\nDebt(% of GDP) R-Axis\n27.0\n25.0\n23.0\n21.0\n19.0\nNov-15 Nov-16\n17.0\n15.0\n\nPag e | 6\nMoney market rates decline with a slight uptick in\nprivate sector credit growth Private sector credit growth picks up (%)\nTreasury securities broadly declined during the last year as 60\ngovernment reduced its public sector borrowing requirements 50\non the money market.\n40\n30\nBank credit to the private sector moderated for most part of\n20\n2016, but gradually picked up in the last two months. Total\noutstanding credit stood at GH¢34,545.4 million at the end of 10\nNovember 2016, of which the private sector accounted for 0\n84.5 per cent.\n-10\nNGPSC RGPSC\n-20\nMixed performance of key financial sector\nindicators as NPLs decline\nThe performance of the banking sector remained relatively\nstrong in 2016 underpinned by asset growth and marginal\nimprovement in liquidity. The strong asset growth was due to Non-performing loan ratios decline\nincreases in banks’ investment portfolio and foreign assets. 25.0\n20.0\nBanks’ solvency, as measured by the Capital Adequacy Ratio\n(CAR), did not record significant changes over the review\n15.0\nperiod, although asset quality generally deteriorated. However,\nasset quality started improving in the last quarter of 2016 after\n10.0\nrestructuring, reclassification and commencement of actual\npayments of the energy-related State Owned Enterprises 5.0\n(SOEs) debts owed banks.\n0.0\nThe NPL ratio improved in the last quarter of 2016 from 19.0\nper cent as at end September 2016 to 17.3 per cent as at end- Non Performing Loans Adjusted NPLs\nDecember 2016 with the onset of payments of the restructured\nTema Oil Refinery (TOR) and Volta River Authority (VRA)\ndebts. Growth in banks’ loans and advances remained modest\nBank earnings and profitability decline\nthrough 2016 despite a slight pick-up in the last quarter on the 35.0 6.0\nback of easing stance in bank credit to both enterprises and\n30.0 5.0\nhouseholds.\n25.0\n4.0\n20.0\nThe banking industry CAR also picked up slightly from 17.0\n3.0\nper cent as at end-September 2016 to 17.8 per cent as at the 15.0\nend of the year. The key profitability indicators, namely, return- 2.0\n10.0\non-equity (ROE) and return-on-assets (ROA) however, fell\n5.0 1.0\nfrom 20.8 per cent and 4.5 per cent as at September 2016 to\n- -\n18.0 per cent and 3.8 per cent respectively for the period\nending December 2016. Liquidity eased with both core and\nbroad liquidity indicators, pointing towards marginal Return On Equity Return On Assets (RHS)\nimprovement in liquidity as at end-December 2016 compared\nwith the end-September 2016 position.\nMonetary Policy Summary /January 2017\n\nPag e | 7\nRelative stability in the exchange rate is foreseen\nThe pace of exchange rate depreciation in 2016 slower\nThe foreign exchange market witnessed some volatility in the\nthan 2015\nrun-up to the December polls as demand pressures mounted,\nbut the pace of depreciation has since slowed. In the outlook,\nthe tight monetary policy stance, renewed confidence in the\neconomy and improved balance of payments outturn are\nexpected to support stability in the foreign exchange market.\nIn 2016, the Ghana cedi recorded a cumulative depreciation of\n9.6 per cent against the US dollar, compared with 15.7 per\ncent in 2015. The Ghana cedi remained relatively stable\nagainst the major currencies in December 2016, on the back\nof tighter monetary policy, improved sentiments and increased\nforeign exchange inflows.\nThe first six transaction days in 2017 showed a depreciation of\nthe cedi by 0.81 per cent against the U.S dollar compared to\nReal effective exchange rate slightly overvalued\n0.51 per cent depreciation in 2016. However, the cedi’s\nvolatility is slightly lower in 2017 compared to 2016. The\nnominal effective exchange rate remained broadly stable,\nwhile the real effective exchange rate reflected some\nappreciation.\nGlobal policy uncertainties weigh on domestic\neconomy\nAlthough domestic growth conditions remain modest,\nprospects are positive, underpinned by improved oil and gas\nproduction from the new oil fields, the gradual rebound in\ngrowth in private sector credit and improved sentiments and\nexpectations. However, upside risks to the global economy\nwhich includes policy uncertainties such as Brexit and volatile\ncommodity prices, could weigh on domestic growth conditions\nInflation seen returning to the target in 2018\nin 2017.\nMonetary policy stance unchanged\nThe developments in headline inflation during the year were\nbroadly in line with the Bank’s 2016 forecasts. At this MPC\nround, however, the BOG’s updated January 2017 forecast\nsees inflation declining to the medium-term inflation target in\n2018, compared to the November forecast of meeting the\ntarget in 2017. Meeting the inflation target in 2017 would have\nrequired a dramatic tightening of monetary policy at the\nexpense of economic growth, which in the Committee’s view\nwas not feasible.\nMonetary Policy Summary /January 2017\n2.1-\n9.7-\n6.41-\n9.61-\n9.91-\n1.62-\n4.7-\n9.02-\n8.41-\n5.51- 5.51- 7.51-\n0.1-\n2.2-\n9.0-\n0.0\n0.1-\n3.3- 9.3- 8.3- 4.4- 3.4- 7.4-\n6.9-\n0.00\n-5.00\n-10.00\n-15.00\n-20.00\n-25.00\n-30.00\n20\n18\n16\n14\n12\n10\n8\n6\n4\n2\n0\n-2\n90% 60% 30% confidence interval\n\nPag e | 8\nThe January forecast revision incorporated new information\nthat the BOG analysed after the November 2016 forecast\nround. This comprised the recent upward adjustments in ex-\npump prices that were announced after the November\nforecast, higher than expected end-year exchange rate\ndepreciation and a higher than budgeted fiscal deficit outturn\nfor 2016. This inflation outlook could however improve if the\nfiscal consolidation process is restored, alongside tight\nmonetary policy and exchange rate stability.\nRecent inflation trends are positive but risks exist\nThe recent downward trends in inflation are positive but there\nare emerging risks in the outlook. On the upside, rising global\nyields and stronger dollar as well as the anticipated hikes in\nthe Fed rate in 2017 with its implications on external financing\nconditions for emerging and developing economies pose risks\nto the inflation outlook. Also, the impact of the recent\nexchange rate volatility, persistent increases in food inflation\nand the higher than targeted fiscal outturn are all upside risks\nfor inflation going forward.\nThe downside risks to the inflation outlook include the\ncontinued improvement in inflation expectations alongside\ndeceleration in core inflation is expected to support the\ndownward trends in inflation in the coming months.\nIn conclusion, the Committee viewed the declining trends\nobserved in headline inflation, core inflation and inflation\nexpectations as positive, and the risks to inflation and growth\nas balanced. Hence, the Monetary Policy Rate was maintained\nat 25.5 per cent at the January MPC meeting. The Committee\nwill continue to monitor developments and take the necessary\n.\npolicy actions required for the attainment of the medium term\ninflation target of 8±2 per cent.\nMonetary Policy Summary /January 2017\n\nPag e | 9\nANNEXES\nHeadline Inflation (%) Monthly Changes in CPI (%)\nCombined Food Non-food Combined Food Non-food\nDec-13 13.5 7.2 18.1 1.0 0.6 1.3\nDec-14 17.0 6.8 23.9 1.0 0.7 1.1\n2015\nJan 16.4 6.9 23.0 3.4 5.7 2.2\nFeb 16.5 7.0 23.0 1.2 0.5 1.6\nMar 16.6 7.2 23.1 1.0 0.8 1.2\nApr 16.8 7.2 23.2 1.8 1.5 2.0\nMay 16.9 7.3 23.4 1.0 1.1 0.9\nJun 17.1 7.4 23.6 1.8 1.5 2.0\nJul 17.9 7.6 24.6 2.3 -0.8 4.1\nAug 17.3 7.7 23.4 -0.7 -1.2 -0.5\nSep 17.4 7.8 23.2 -0.1 -2.9 1.4\nOct 17.4 7.8 23.0 2.7 0.1 4.1\nNov 17.6 7.9 23.2 1.0 1.0 1.1\nDec 17.7 8.0 23.3 1.1 0.8 1.2\n2016\nJan 19.0 8.2 25.5 4.6 5.8 4.0\nFeb 18.5 8.3 24.5 0.8 0.6 0.8\nMar 19.2 8.3 25.7 1.7 0.7 1.2\nApr 18.7 8.4 24.8 1.4 1.5 1.3\nMay 18.9 8.5 25.0 1.1 1.2 1.1\nJun 18.4 8.6 24.2 1.3 1.5 1.2\nJul 16.7 8.6 21.2 0.9 -0.8 1.7\nAug 16.9 8.5 21.5 -0.6 -1.4 -0.3\nSep 17.2 9.0 21.6 0.2 -2.4 1.4\nOct 15.8 8.7 19.4 1.4 -0.2 2.2\nNov 15.5 9.3 18.7 0.8 1.6 0.5\nDec 15.4 9.7 18.2 0.9 1.2 0.8\nSource: Ghana Statistical Service\nMeasures of Core Inflation\nWeight 2016\n% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec\nHeadline Inflation 100.0 19.0 18.5 19.2 18.7 18.9 18.4 16.7 16.9 17.2 15.8 15.5 15.4\nCore 1: Inflation excl Energy and Utility 94.9 17.6 17.2 18.1 17.7 17.9 17.9 17.8 16.6 16.9 15.2 14.7 14.6\nCore 2: Inflation excl Energy and Utility 77.3 19.1 18.7 19.7 19.2 19.3 19.3 19.2 17.8 18.4 16.5 15.4 15.1\nand Volatile Food Items\nCore 3: Inflation excl Energy and Utility 73.1 17.5 17.2 17.1 16.7 16.8 16.7 17.9 16.6 16.9 14.9 14.3 14.1\nVolatile Food Items & Transportation\nCore 4: Inflation excl All Food Items, 51.0 24.2 23.4 24.9 24.1 24.3 24.3 24.0 21.9 21.9 19.0 17.9 17.4\nEnergy & Utility\nMonetary Policy Summary /January 2017\n\nPag e | 10\nCPI Components\n2015 2016\nWeghts Mar Jun Sep Dec Mar Jun Sep Dec\n(%)\nOverall 100.0 16.6 17.1 17.4 17.7 19.2 18.4 17.2 15.4\nFood and Beverages 43.9 7.2 7.4 7.8 8.0 8.3 8.6 9.0 9.7\nNon-food 56.1 23.1 23.6 23.2 23.3 25.7 24.2 21.6 18.2\nAlcoholic Beverages, Tobacco 1.7 20.1 20.1 20.8 19.2 15.3 15.1 15.7 13.5\nClothing and footwear 9.0 22.4 24.3 24.9 24.1 21.0 22.6 23.2 16.4\nHousing, Water, Elect, Gas & Fuels 8.6 26.2 24.8 23.6 24.3 39.6 32.8 28.0 20.2\nFurnish, H/H Equipt. Etc 4.7 20.9 23.3 23.4 25.8 22.9 21.4 23.0 18.8\nHealth 2.4 18.1 16.8 15.7 14.7 13.7 13.9 15.4 18.5\nTransport 7.3 25.8 25.5 23.8 27.0 40.0 40.3 27.3 27.2\nCommunications 2.7 13.8 12.0 15.4 14.0 13.6 12.5 11.3 10.8\nRecreation & Culture 2.6 23.1 23.5 27.0 26.9 26.7 27.4 27.6 20.3\nEducation 3.9 22.9 24.6 29.6 26.8 27.7 33.3 32.5 23.4\nHotels, Cafes & Restaurants 6.1 18.4 19.8 18.0 18.9 15.9 14.9 16.1 13.7\nMiscellaneous goods & services 7.1 16.3 19.2 23.0 21.7 18.3 15.5 13.1 14.7\nBILATERAL MOVEMENT OF THE CEDI AGAINST CORE CURRENCIES\nMonthly Year-to-Year Changes (%)\nGH¢/$ GH¢/£ GH¢/€ GH¢/$ GH¢/£ GH¢/€ GH¢/$ GH¢/£ GH¢/€\n2015\nJan-15 3.2400 4.9000 3.6700 -1.2 1.6 6.3 -25.9 -20.0 -11.4\nFeb-15 3.4700 5.3600 3.9000 -6.6 -8.6 -5.9 -27.4 -21.3 -11.0\nMar-15 3.7500 5.5500 4.0600 -7.5 -3.4 -3.9 -28.5 -19.8 -10.1\nApr-15 3.8500 5.9500 4.2900 -2.6 -6.7 -5.4 -27.5 -20.5 -10.3\nMay-15 3.9996 6.1000 4.3600 -3.7 -2.5 -1.6 -27.7 -20.7 -9.6\nJun-15 3.4648 6.8208 4.8400 15.4 -10.6 -9.9 -13.4 -25.1 -15.5\nJul-15 3.4500 5.3818 3.5700 0.4 26.7 35.6 -12.2 -4.7 13.7\nAug-15 4.0500 6.2173 4.5400 -14.8 -13.4 -21.4 -22.7 -16.5 -9.0\nSep-15 3.7545 5.6956 4.2257 7.9 9.2 7.4 -14.8 -8.9 -3.9\nOct-15 3.7854 5.7858 4.1526 -0.8 -1.6 1.8 -15.5 -11.5 -3.0\nNov-15 3.7861 5.7009 4.0074 0.0 1.5 3.6 -15.5 -11.8 -0.4\nDec-15 3.7950 5.6265 4.1514 -0.2 1.3 -3.5 -15.7 -11.5 -6.1\nCum. Changes (%) Jan-Dec -15.7 -11.5 -6.1\n2016\nJan-16 3.8311 5.4945 4.1825 -0.9 2.4 -0.7 -1.0 2.4 -0.7\nFeb-16 3.8787 5.4068 4.2525 -1.2 1.6 -1.6 -2.2 4.1 -2.4\nMar-16 3.8304 5.5252 4.3456 1.3 -2.1 -2.1 -0.9 1.8 -4.5\nApr-16 3.7951 5.5361 4.2986 0.9 -0.2 1.1 0.0 1.6 -3.4\nMay-16 3.8337 5.6097 4.2700 -1.0 -1.3 0.7 -1.0 0.3 -2.8\nJun-16 3.9230 5.3052 4.3623 -2.3 5.7 -2.1 -3.3 6.1 -4.8\nJul-16 3.9469 5.1673 4.3756 -0.6 2.7 -0.3 -3.9 8.9 -5.1\nAug-16 3.9445 5.1612 4.3968 0.1 0.1 -0.5 -3.8 9.0 -5.6\nSep-16 3.9709 5.1576 4.4653 -0.7 0.1 -1.5 -4.4 9.1 -7.0\nOct-16 3.9643 4.8184 4.3345 0.2 7.0 3.0 -4.3 16.8 -4.2\nNov-16 3.9805 4.9754 4.2196 -0.4 -3.2 2.7 -4.7 13.1 -1.6\nDec-16 4.2002 5.1154 4.3813 -5.2 -2.7 -3.7 -9.2 10.0 -5.2\nCum. Changes (%) Jan-Dec -9.6 10.0 -5.2\nMonetary Policy Summary /January 2017\n\nPag e | 11\nMOVEMENTS OF SELECTED CURRENCIES AGAINST THE US DOLLAR (%)\nPt-to-pt. (%) Advanced Economies Emerging Markets SSA\nEuro Pound Yen Yuan Rupee Real Rand Kwacha Gh. Cedi Naira Shilling\nEuro zone UK Japan China India Brazil S. Africa Zambia Ghana Nigeria Kenya\n2015\nJan -5.8 -3.2 0.9 -0.4 1.0 0.3 -0.5 -2.2 -1.2 -0.8 -1.0\nFeb -2.3 1.2 -0.4 -0.5 0.2 -6.5 -0.2 -4.2 -6.8 -6.5 -0.1\nMar -4.7 -2.4 -1.4 0.2 -0.8 -10.2 -0.4 -7.8 -7.3 -1.3 -0.3\nApr 0.0 0.1 0.7 0.6 -0.3 3.3 0.8 -0.8 -2.7 0.0 -1.8\nMay 3.1 3.2 -1.1 0.0 -1.6 -0.8 0.1 1.9 -3.7 0.0 -3.1\nJun 0.7 0.8 -2.3 0.0 -0.1 -1.6 -2.5 -0.9 -7.6 0.0 -2.3\nJul -2.0 -0.1 0.3 0.0 0.3 -3.6 -1.4 -4.4 25.3 0.2 -2.5\nAug 1.3 0.1 0.3 -2.1 -2.4 -8.3 -3.5 -5.3 -14.6 0.0 -1.2\nSept 0.8 -1.5 2.3 -0.4 -1.6 -9.8 -5.3 7.8\nOct 0.0 0.0 0.1 0.3 1.8 0.7 1.1 -0.8\nNov -4.5 -1.0 -2.1 -0.3 -1.7 2.4 -4.7 0.0\nDec 1.5 -1.4 0.8 -1.2 -0.6 -2.5 -5.5 -0.2\nJan-Dec (Cum) -11.9 -4.2 -1.8 -4.0 -5.9 -36.6 -22.0 -23.8 -11.8 -8.4 -12.3\n2016\nJan -0.3 -4.0 3.0 -1.9 -1.2 -4.3 -8.4 -3.2 -1.0 0.3 -0.1\nFeb 2.3 -0.5 3.1 0.3 -1.3 2.3 3.7 -1.1 -1.2 0.0 0.3\nMar 0.2 -0.4 1.5 0.7 2.0 7.3 2.5 2.2 1.3 0.0 0.5\nApr 1.9 0.5 3.1 0.4 0.7 3.7 5.4 16.0 0.9 0.0 0.3\nMay -0.3 1.5 0.6 -0.8 -0.7 0.6 -4.8 -4.3 -1.0 0.0 0.5\nJun -0.7 -2.3 3.4 -1.0 -0.6 3.5 1.8 -6.1 -2.3 -30.4 -0.4\nJul -1.6 -7.5 1.1 -1.3 0.1 4.3 4.6 7.9 -0.6 -9.6 -0.2\nAug 1.4 -0.3 2.9 0.5 0.4 2.3 4.5 -2.2 0.1 2.5 -0.1\nSept 0.1 0.3 -0.6 -0.3 0.3 -1.4 -1.8 -0.7\nOct -1.8 -6.2 -2.0 -0.9 0.0 2.1 0.7 0.2\nNov -2.1 0.8 -4.3 -1.7 -1.4 -4.6 0.1 -0.4\nDec -2.1 0.5 -6.3 -1.1 -0.2 3.9 0.6 -5.2\nJan-Aug (Cum) -2.9 -17.6 5.5 -7.0 -1.8 19.7 8.9 9.1 -10.0 -37.3 0.8\nSource: Reuters and Bank of Ghana computation\nMonetary Policy Summary /January 2017\n\nPag e | 12\nSelected Economic and Financial Indicators Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16\n(Annual percentage change; unless otherwise indicated)\nNational Income and Prices\nReal GDP 4.2 n.a n.a 4.2 n.a n.a 2.3 n.a n.a 4.0 na na na\nReal GDP_non-oil 4.1 n.a n.a 6.7 n.a n.a 6.2 n.a n.a 4.6 na na na\nConsumer price index (end of period)\nOverall 17.7 19 18.5 19.2 18.7 18.9 18.4 16.7 16.9 17.2 15.8 15.5 15.4\nFood 8.0 8.2 8.3 8.3 8.4 8.5 8.6 8.6 8.5 9.0 8.7 9.3 9.7\nNon-food 23.3 25.5 24.5 25.7 24.8 25.0 24.2 21.2 21.5 21.6 19.4 18.7 18.2\nExchange rate ($/ȼ): (end of period) 3.7944 3.8311 3.8787 3.8304 3.7951 3.8337 3.9230 3.9469 3.9445 3.9709 3.9643 3.9805 4.2002\nExchange rate depreciation (M/M) -0.20 -0.96 -1.2 1.14 0.92 -1.00 -2.30 -0.40 0.10 -0.66 0.17 -0.41 -4.80\nExchange rate depreciation (YTD, %) -15.7 -0.96 -2.2 -0.9 -0.02 -1.03 -3.28 -3.67 -3.81 -4.44 -4.29 -4.68 -9.66\nMoney and credit\nBroad money supply (M2+) 26.1 2 8.7 23.0 18.1 16.1 16.7 12.0 25.9 20.6 22.4 19.8 20.8 22.0\nCredit to the private sector 24.7 2 4.7 19.5 11.2 11.1 10.1 8.5 16.0 12.4 12.6 12.1 13.5 14.4\nReal Credit to the private sector 5.9 4 .8 0.8 -6.7 -6.1 -7.4 -8.4 -0.6 -3.8 -2.8 -3.2 -1.8 -0.8\nInterest rates (%)\nMonetary Policy rate 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 25.5 25.5\nInterbank rate 25.3 23.5 25.4 25.4 25.4 25.5 25.5 25.5 25.5 25.5 25.5 25.5 25.3\n91-Day treasury bill rate 23.1 22.7 22.7 22.6 22.8 22.8 22.8 22.8 22.8 22.9 22.8 20.9 16.4\n182-Day treasury bill rate 24.4 24.5 24.5 24.6 24.6 24.6 24.6 24.7 24.7 24.7 24.3 22.6 17.6\nAverage lending rate 27.5 28.2 28.2 28.6 32.1 32.3 32.7 33.0 33.0 29.3 32.1 32.0 31.2\n3-month average Deposit rate 13.0 13.5 13.5 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0\nlending - deposit rate spread 14.5 14.7 14.7 15.6 19.1 19.3 19.7 20.0 20.0 16.3 19.1 19.0 18.2\nExternal Sector (cummulative)\nCurrent account balance ($million) -2,819 n.a n.a -540.4 n.a n.a -1,139.8 n.a na -1,915.9 na na -2,643.6\nper cent of GDP -7.8 n.a n.a -1.3 n.a n.a -2.7 n.a na -4.5 na na -6.2\nTrade balance ($million) -3,928.9 -249.2 -397.9 -675.4 -972.8 -1,274.9 -1,395.6 -1,665.5 -1,976.1 -1739.8 -2,142.9 -2,221.2 -1,689.2\nCommodity prices (International)\nCocoa ($/tonne) 3,301 2 ,895 2 ,861 3,010.1 3,084.0 3,014.4 3,070.5 2,998.9 2,993.5 2,845.7 2,695.0 2,441.7 2,268.4\nGold ($/ounce) 1,069 1 ,098 1,199 1,243.0 1,242.8 1,256.2 1,275.2 1,338.3 1,339.2 1,326.7 1,274.6 1,237.6 1,151.2\nCrude Oil ($/barrel) 38.9 3 1.9 33.4 39.8 46.9 47.7 49.9 46.6 47.2 47.2 51.4 47.1 54.9\nGross Foreign Assets (US$ m) 5 ,884.7 5 ,838.6 5,531.0 5,696.3 5,951.0 5,498.0 5,199.4 5,049.7 4,903.3 4,788.1 5,917.4 6,099.0 6,161.8\nmonths of import cover 3.5 3.4 3.2 3.3 3.5 3.2 3.0 2.9 2.8 2.8 3.4 3.5 3.5\nNet international reserves (US$m) 3 ,093.7 3 ,079.5 2 ,601.0 2,735.0 2,860.0 2,624.4 2,337.5 2,221.4 2,062.0 1,815.1 2,209.0 3,370.8 3,431.0\nFiscal (as at End-Period)\nNet Domestic Financing (GHS Million) 3 ,814.9 9 67.7 2 ,620.9 3,394.5 4,097.2 5,365.6 5,646.9 7,898.0 10,099.1 9,812.3 9,528.9 9,963.2 12,959.1\nPer cent of GDP 2.9 0.6 1 .7 2.1 2 .6 3 .4 3.56 4.74 6.06 5.88 5.71 5.97 7.77\nNon-Performing Loan(NPL) 14.7 14.6 15.6 16.2 18.6 19.3 18.8 19.1 18.6 19.0 19.0 18.8 17.6\nNon-Performing Loan(Excluding Loss) 6.8 6.5 7.6 8.3 10.4 11.5 10.9 11.0 10.6 10.8 10.2 9.8 8.4\nMonetary Policy Summary /January 2017", "source": "BOG", "stratum": "cb_requests", "fetch_date": "2026-04-27", "url": "https://www.bog.gov.gh/wp-content/uploads/2019/08/Monetary-Policy-Report-January-2017.pdf"}
{"doc_id": "837448874074a6a56499aa484e70ca69", "text": "ECONOMIC REPORT \nTHIRD QUARTER 2019 \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage ii \nEconomic Report Third Quarter \n2019 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nThe Central Bank of Nigeria Quarterly Economic Report is designed for the dissemination \nof financial and economic information on the Nigerian economy on current basis. The \nReport analyses developments in the financial, fiscal, real and external sectors of the \neconomy, as well as international economic issues of interest. The Report is directed at \na wide spectrum of readers including economists and financial analysts in government \nand the private sector, as well as general readers. \n \n \n \n \nSubscription to the Quarterly Economic Report is available without charge to institutions, corporations, \nembassies and development agencies. Individuals, on written request, can obtain any particular issue \nwithout a charge. Please direct all inquiries on the publication to the Director of Research, Central Bank \nof Nigeria, P.M.B. 187, Garki, Abuja, Nigeria. \n \nThe Quarterly Reports can also be freely downloaded from the CBN website: www.cbn.gov.ng \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage iii \nEconomic Report Third Quarter \n2019 \nContents \n1.0 \nSummary ....................................................................................................................................... 1 \n2.0 \nFinancial Sector Developments .................................................................................................... 3 \n2.1 \nMonetary and Credit Developments ............................................................................................ 3 \n2.2 \nCurrency-in-circulation (CIC) and Deposits at the CBN ................................................................. 7 \n2.3 \nMoney Market Developments ...................................................................................................... 8 \n2.3.1 \nInterest Rate Developments ................................................................................................. 8 \n2.3.2 \nCommercial Papers (CPs) .................................................................................................... 10 \n2.3.3 \nBankers’ Acceptances (BAs) ................................................................................................ 10 \n2.3.4 \nOpen Market Operations .................................................................................................... 10 \n2.3.5 \nPrimary Market ................................................................................................................... 10 \n2.3.6 \nBonds Market ...................................................................................................................... 11 \n2.3.7 \nCBN Standing Facilities ........................................................................................................ 11 \n2.4 \nDeposit Money Banks’ Activities ................................................................................................. 12 \n2.5 \nCapital Market Developments .................................................................................................... 12 \n2.5.1 \nSecondary Market ............................................................................................................... 12 \n2.5.2 \nNew Issues Market .............................................................................................................. 13 \n2.5.3 \nMarket Capitalisation .......................................................................................................... 14 \n2.5.4 \nNSE All-Share Index ............................................................................................................. 14 \n3.0 \nFiscal Operations ........................................................................................................................ 17 \n3.1 \nFederation Account Operations .................................................................................................. 17 \n3.2 \nThe Fiscal Operations of the Three Tiers of Government ........................................................... 20 \n3.2.1 \nThe Federal Government .................................................................................................... 20 \n3.2.2 \nStatutory Allocations to State Governments ...................................................................... 22 \n3.2.3 \nStatutory Allocations to Local Government Councils ......................................................... 22 \n4.0 \nDomestic Economic Conditions .................................................................................................. 23 \n4.1 \nAgricultural Sector ...................................................................................................................... 23 \n4.2 \nAgricultural Credit Guarrantee Scheme Operations ................................................................... 23 \n4.3 \nCommercial Agricultural Credit Scheme Operations .................................................................. 24 \n4.4 \nIndustrial Production .................................................................................................................. 24 \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage iv \nEconomic Report Third Quarter \n2019 \n4.5 \nPetroleum Sector ........................................................................................................................ 26 \n4.6 \nConsumer Prices ......................................................................................................................... 27 \n5.0 \nExternal Sector Developments ................................................................................................... 31 \n5.1 \nForeign Exchange Flows .............................................................................................................. 31 \n5.2 \nNon-Oil Export Earnings by Exporters ......................................................................................... 33 \n5.3 \nSectoral Utilisation of Foreign Exchange .................................................................................... 34 \n5.4 \nForeign Exchange Market Developments ................................................................................... 34 \n5.5 \nGross External Reserves .............................................................................................................. 37 \n6.0 \nGlobal Economic Outlooks.. ........................................................................................................ 39 \n6.1 \nGlobal Output.............................................................................................................................. 39 \n6.2 \nGlobal Inflation ............................................................................................................................ 40 \n6.3 \nGlobal Commodity Demand and Prices ...................................................................................... 41 \n6.4 \nInternational Financial Markets .................................................................................................. 41 \n6.5 \nOther International Economic Development and Meetings ....................................................... 42 \n \nText Tables \nTable 1: Growth in Monetary and Credit Aggregates .................................................................................................... 7 \nTable 2: Selected Interest Rates (Percent, Averages) .................................................................................................... 9 \nTable 3: Traded Securities on the Nigerian Stock Exchange (NSE) .............................................................................. 13 \nTable 4: New and Suplementary Listing on the Nigerian Stock Exchange ………………………………………………………………14 \nTable 5: Market Capitalisation and All Share Index (ASI) ............................................................................................ 15 \nTable 6: Gross Federation Account Revenue ............................................................................................................... 18 \nTable 7: Components of Gross Oil Revenue ................................................................................................................ 17 \nTable 8: Components of Gross Non-Oil Revenue ........................................................................................................ 19 \nTable 9: Summary of Federally-Collected Revenue Deductions and Transfers ........................................................... 20 \nTable 10: Federal Government Fiscal Operations ....................................................................................................... 21 \nTable 11: Disbursement of Credit Under the Commercial Agriculture Credit Scheme ............................................... 24 \nTable 12: Index of Industrial Production and Manufacturing Capacity Utilisation Rate ............................................. 26 \nTable 13: Average Crude Oil Prices in the International Oil Market ............................................................................ 27 \nTable 14: Consumer Price Index (November 2009 = 100) ........................................................................................... 28 \nTable 15: Headline Inflation Rate ................................................................................................................................ 29 \nTable 16: Foreign Exchange Flows Through the CBN .................................................................................................. 32 \nTable 17: Demand for and Supply of Foreign Exchange .............................................................................................. 35 \nTable 18: Exchange Rate Movements and Exchange Rate Premium .......................................................................... 36 \nTable 19: Gross External Reserves ............................................................................................................................... 38 \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage v \nEconomic Report Third Quarter \n2019 \n \nAppendix Tables \nTable A1: Money and Credit Aggregates ....................................................................................................... 47 \nTable A2: Money and Credit Aggregates (Growth Rates) ......................................................................... 48 \nTable A3: Federal Government Fiscal Operations ........................................................................................ 49 \n \n \nFigures \nFigure 1: Growth Rate of Narrow Money (M1) and Broad Money (M2) ..................................................... 4 \nFigure 2: Growth Rate of Aggregate Domestic Credit to the Economy .................................................. 6 \nFigure 3: Selected DMBs Interest Rates (Average) .......................................................................................... 9 \nFigure 4: Volume and Value of Traded Securities ......................................................................................... 13 \nFigure 5: Market Capitalisation and All-Share Index .................................................................................... 15 \nFigure 6: Components of Gross Federally-Collected Revenue ................................................................. 17 \nFigure 7: Gross Oil Revenue and Its Components ......................................................................................... 18 \nFigure 8: Gross Non-Oil Revenue and Its Components ................................................................................ 19 \nFigure 9: Federal Government Retained Revenue ....................................................................................... 21 \nFigure 10: Federal Government Expenditure .................................................................................................. 22 \nFigure 11: Index of Industrial Production (1990=100) .................................................................................... 25 \nFigure 12: Trends in Crude Oil Prices .................................................................................................................. 27 \nFigure 13: Consumer Price Index ........................................................................................................................ 28 \nFigure 14: Inflation Rate ........................................................................................................................................ 29 \nFigure 15: Foreign Exchange Flows Through the CBN .................................................................................. 32 \nFigure 16: Sectoral Utilisation of Foreign Exchange ...................................................................................... 34 \nFigure 17: Demand for and Supply of Foreign Exchange ........................................................................... 35 \nFigure 18: Average Exchange Rate Movements .......................................................................................... 36 \nFigure 19: Exchange Rate Premium .................................................................................................................. 37 \nFigure 20: Gross External Reserves ..................................................................................................................... 38 \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage vi \nEconomic Report Third Quarter \n2019 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 1 \nEconomic Report Third Quarter \n2019 \n 1.0 Summary1 \nThe Bank maintained its Monetary Policy stance in the review period, as \nthe Monetary Policy Rate remained at 13.50 per cent. Broad money \nsupply (M3), on quarter-on-quarter basis, grew by 1.0 per cent to \nN35,245.17 billion at end-August 2019, compared with the growth of 3.2 \nper cent at end-June 2019. The development reflected the respective \ngrowth of 6.0 per cent and 7.3 per cent in aggregate credit (net) and \nother assets (net) of the banking system, which more than offset the 15.0 \nper cent decline in net foreign assets. Over the level at end-December \n2018, broad money supply (M3) grew by 5.7 per cent at end-August \n2019, compared with the growth of 4.6 per cent at end-June 2019. The \ndevelopment was due, wholly, to the 24.4 per cent growth in net \ndomestic credit of the banking system. Narrow money supply (M1), on \nquarter-on-quarter basis, grew by 0.8 per cent to N11,245.42 billion at \nend-August 2019, compared with the growth of 2.0 per cent at end-\nJune 2019. \nDevelopments in banks’ deposit and lending rates were mixed in the \nreview quarter. With the exception of the 6-month deposit rate, which \nrose by 0.04 percentage point to 10.26 per cent, all other deposit rates \nof various maturities fell from a range of 3.68 – 10.37 per cent in the \npreceding quarter to 3.18 – 10.12 per cent in the third quarter of 2019. \nThe average term deposit rate fell by 0.28 percentage point to 8.45 per \ncent in the third quarter of 2019, compared with 8.73 per cent in the \nsecond quarter of 2019, while the average savings deposit rate rose by \n0.92 percentage point to 5.27 per cent at end-September 2019. The \naverage maximum lending rate was 31.05 per cent, while the average \nprime lending rate stood at 15.55 per cent at end-September 2019. \nConsequently, the spread between the weighted average term \ndeposit and maximum lending rates widened by 0.29 percentage point \nto 22.60 percentage points at end-September 2019. Similarly, the \nmargin between the average savings deposit and maximum lending \nrates widened by 0.01 percentage point to 27.12 percentage points in \nthe review quarter. The weighted average interbank call rate rose by \n3.23 percentage points to 11.61 per cent at end-September 2019. The \ntotal value of money market assets outstanding rose by 2.9 per cent to \nN12,595.30 billion, at end-September 2019, compared with the level at \nend-June 2019. The development was attributed, largely to the rise in \nthe FGN Bonds outstanding in the review quarter. Developments on the \nNigerian Stock Exchange (NSE) were mixed. \nFederally collected revenue, at N2,700.20 billion in the third quarter of \n \n1 The Second Quarter 2019 data on monetary aggregates, government \nspending and foreign exchange flows were provisional. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 2 \nEconomic Report Third Quarter \n2019 \n2019, fell below the provisional quarterly budget by 28.2 per cent, but \nwas higher than the receipts in the preceding quarter by 18.3 per cent. \nThe development, relative to the budget estimate, was due, largely, to \nthe shortfall in receipts from oil revenue, component in the review \nquarter. Federal Government retained revenue in the review quarter, \nwas N1,026.95 billion, while total estimated expenditure amounted to \nN1,406.63 billion, resulting in an estimated fiscal deficit of N379.68 billion. \nAgricultural activities in the review quarter were dominated by \nharvesting of farm produce. In the livestock sub-sector, farmers \ncontinued the breeding of poultry and cattle nation-wide. The end-\nperiod headline inflation, on year-on-year and 12-month moving \naverage bases, for the third quarter of 2019, were estimated at 11.24 \nper cent and 11.27 per cent, respectively. \nForeign exchange inflow and outflow through the CBN amounted to \nUS$11.69 billion and US$15.30 billion, respectively, resulting in a net \noutflow of US$3.61 billion. Foreign exchange sales by the CBN to \nauthorised dealers amounted to US$10.11 billion in the third quarter of \n2019. The average exchange rate of the naira vis-à-vis the US dollar \nappreciated by 0.01 per cent and 0.12 per cent to N306.93/US$ and \nN359.557/US$ at the inter-bank and the BDC segments, respectively. It, \nhowever, depreciated by 0.4 per cent to N362.20/US$ at the “Investors” \nand “Exporters” (I&E) Window. At US$40.90 billion, the gross external \nreserves fell by 8.6 per cent below the level at end-June 2019. \nWorld crude oil demand and supply were estimated at 100.63 mbd and \n99.26 mbd, respectively, in the third quarter of 2019, compared with \n99.08 mbd and 98.58 mbd demanded and supplied in the second \nquarter of 2019. Nigeria’s crude oil production, including condensates \nand natural gas liquids, was estimated at an average of 1.91 mbd in \nthe review quarter, compared with 1.86 mbd in the preceding quarter. \nThe average price of Nigeria’s reference crude, the Bonny Light (370 \nAPI), was US$65.21 per barrel in the third quarter of 2019, compared with \nUS$71.32 per barrel in the second quarter of 2019. The development \nwas due largely to tightened crude oil supply in the global oil market. \nMajor international developments of importance to the domestic \neconomy in the review quarter included: The Federal Ministry of Foreign \nAffairs \n(FMFA) \nconvened \nthe \nfirst \npreparatory \nInter-Ministerial \nCommittee meeting for the 74th session of the United Nations General \nAssembly (UNGA), scheduled for September 2019, in New York; and the \nTechnical Committee (TC) of the West African Institute for Financial and \nEconomic Management (WAIFEM), held an extra-ordinary meeting, \nfocused on the Restructuring of the WAIFEM, at Conakry, Guinea from \nAugust 14-15, 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 3 \nEconomic Report Third Quarter \n2019 \n2.0 Financial Sector Developments2 \nThe Bank maintained its monetary policy stance in the review period, \nas the Monetary Policy Rate remained at 13.50 per cent. Over the \nlevel at end-June 2019, broad money supply (M3), grew by 1.0 per \ncent at end-August 2019, reflecting 6.0 per cent and 7.3 per cent \nincrease in aggregate credit (net) and other assets (net) of the \nbanking system, respectively. Narrow money supply (M1) rose by 0.8 \nper cent, due, largely, to the 0.1 per cent and 0.9 per cent increase \nin its currency outside banks and demand deposits components, \nrespectively. The value of money market assets outstanding rose \nabove the level in the preceding quarter. Activities on the Nigerian \nStock Exchange (NSE) indicated mixed developments during the third \nquarter of 2019. \n2.1 Monetary and Credit Developments \nThe Bank maintained its monetary policy stance in the review \nperiod, as the Monetary Policy Rate remained at 13.50 per \ncent. The key monetary aggregates trended upward at end-\nAugust 2019. Broad money supply (M3), on quarter-on-quarter \nbasis, grew by 1.0 per cent to N35,245.17 billion at end-August \n2019, compared with the growth of 3.2 per cent at end-June \n2019. The development reflected, largely, the respective \ngrowth of 6.0 per cent and 7.3 per cent in aggregate credit \n(net) and other assets (net) of the banking system, which were \nmore than offset the 15.0 per cent decline in net foreign assets. \nRelative to the level at end-December 2018, broad money \nsupply (M3) grew by 5.7 per cent at end-August 2019, \ncompared with the growth of 4.6 per cent at end-June 2019. \nThe development was due, wholly, to the 24.4 per cent growth \nin net domestic credit of the banking system. \nNarrow money supply (M1), on quarter-on-quarter basis, grew \nby 0.8 per cent to N11,245.42 billion at end-August 2019, \ncompared with the growth of 2.0 per cent at end-June 2019. \nThe development reflected, significantly, the 0.1 per cent and \n0.9 per cent increase in currency outside banks and demand \ndeposits, respectively. Over the level at end-December 2018, \nM1 fell by 4.3 per cent at end-August 2019, compared with the \n \n2 The monetary aggregate numbers used for the third quarter 2019 report are provisional. \nGrowth in monetary \naggregates was \nsignificant in the \nreview period. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 4 \nEconomic Report Third Quarter \n2019 \ndecline of 5.0 per cent at end-June 2019. \nAt end-August 2019, quasi-money, on quarter-on-quarter basis, \nfell by 2.4 per cent to N16,341.00 billion, in contrast to the \ngrowth of 5.3 per cent at end-June 2019. The development was \nattributed to the fall in time and savings deposits of banks. \nRelative to the level at end-December 2018, quasi-money grew \nby 6.7 per cent at end-August 2019, compared with the growth \nof 9.3 per cent at end-June 2019 (Figure 1, Table 1). \nFigure 1: Growth Rate of Narrow Money (M1) and Broad Money (M3)3 \n \nSource: CBN \nAggregate credit to the domestic economy (net), on quarter-\non-quarter basis, grew by 6.0 per cent to N34,291.10 billion, \ncompared with the growth of 1.9 per cent at end-June 2019. \nThe growth was due, largely, to the 24.7 per cent and 0.3 per \ncent growth in claims on the Federal Government and claims \non the private sector, respectively. Relative to the level at end-\nDecember 2018, aggregate credit to the domestic economy \n(net), grew by 24.4 per cent at end-August 2019, compared \nwith 17.3 per cent at end-June 2019. \n \n3 QM1 and QM2 represent quarter-on-quarter changes, while CM1 and CM2 \nrepresent cumulative changes (year-to-date) in narrow and broad money supply, \nrespectively. \n-8\n-6\n-4\n-2\n0\n2\n4\n6\n8\n10\n12\n-15\n-10\n-5\n0\n5\n10\n15\n20\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nAugust-19\nQuarterly (%)\nCumulative (%)\nQM1 (RHS)\nQM3 (RHS)\nCM1 (LHS)\nCM3 (LHS)\nBanking system’s \ncredit to the Federal \nGovernment rose in \nthe review period. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 5 \nEconomic Report Third Quarter \n2019 \nNet claims on the Federal Government grew by 24.7 per cent \nto N9,456.33 billion at end-August 2019, in contrast to the \ndecline of 2.1 per cent at end-June 2019. The development \nreflected, largely, the increased holding of government \nsecurities by the CBN and commercial banks. Relative to the \nlevel at end-December 2018, claims on the Federal \nGovernment grew by 94.3 per cent at end-August 2019, \ncompared with the growth of 55.8 per cent at end-June 2019. \nOn quarter-on-quarter basis, banking system’s credit to the \nprivate sector rose by 0.3 per cent to N24,834.77 billion at end-\nAugust 2019, compared with the growth of 3.2 per cent at end-\nJune 2019. The development was attributed, wholly, to the 1.0 \nper cent increase in claims on the core private sector. Over the \nlevel at end-December 2018, banking system’s credit to the \nprivate sector increased by 9.4 per cent at end-August 2019, \ncompared with the 9.0 per cent increase at end-June 2019, \n(Figure 2, Table 1). \nFigure 2: Growth Rate of Aggregate Domestic Credit to the Economy4 \nSource: CBN \nForeign assets (net) of the banking system fell by 15.0 per cent \nto N15,702.07 billion at end-August 2019, in contrast to the \ngrowth of 9.8 per cent recorded at end-June 2019. The fall in \nNFA, relative to the level in the preceding quarter, was as a \n \n4 QCP, QCG and QAC represent quarter-on-quarter changes, while CCP, CCG and \nCAC represent cumulative changes (year-to-date) in credit to the private sector, \ncredit to the government and aggregate domestic credit, respectively. \n-40\n-20\n0\n20\n40\n60\n80\n-40\n-20\n0\n20\n40\n60\n80\n100\n120\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nAug-19\nQuarterly (%)\nCumulative (%)\nQCP (RHS)\nQCG (RHS)\nQAC (RHS)\nCCP (LHS)\nCCG (LHS)\nCAC (LHS)\nForeign assets (net) \nof the banking \nsystem fell at the \nend of the review \nperiod. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 6 \nEconomic Report Third Quarter \n2019 \nresult of the decline in foreign asset holdings of the banking \nsystem. Over the level at end-December 2018, net foreign \nassets of the banking system fell by 14.7 per cent at end-August \n2019, in contrast to the growth of 0.4 per cent at end-June 2019. \nAt end-August 2019, other assets (net) of the banking system \nrose by 7.3 per cent to negative N14,747.99 billion, compared \nwith the growth of 8.1 per cent at end-June. The development \nwas on the account of the increase in the unclassified assets of \nthe CBN. Over the level at end-December 2018, other assets \n(net) of the banking system fell by 16.9 per cent at end-August \n2019, compared with the decline of 26.1 per cent at end-June \n2019. \nTable 1: Growth in Monetary and Credit Aggregates (Per cent) Over the \nPreceding Quarter* \nJun-18\nSep-18\nDec-18\nMar-19\nJun-19\nAug-19\nDomestic Credit (Net)\n-6.3\n3.3\n4.4\n15.1\n1.9\n6.0\n Claims on Federal Government (Net)\n-33.4\n4.7\n41.4\n59.1\n-2.1\n24.7\n Claims on Private Sector\n-0.4\n3.1\n-1.1\n5.7\n3.2\n0.3\n Claims on Other Private Sector\n0.1\n5.3\n-0.3\n5.6\n3.7\n1.0\nForeign Assets (Net)\n12.4\n2.6\n-2.2\n-8.6\n9.8\n-15.0\nOther Assets (Net)\n-0.4\n-1.3\n-12.3\n-16.7\n8.1\n-7.3\nBroad Money Supply (M3)\n0.8\n5.1\n8.1\n1.4\n3.2\n1.0\nQuasi-Money\n5.4\n4.9\n3.5\n3.8\n5.3\n-2.4\nNarrow Money Supply (M1)\n-3.0\n0.5\n9.3\n-6.9\n2.0\n0.8\nMemorandum Items:\nReserve Money (RM)\n-5.9\n7.0\n4.9\n1.6\n11.6\n-13.7\n \nSource: CBN \n*figures are provisional \n2.2 \nCurrency-in-circulation and Deposits at the \nCBN \n \nCurrency-in-circulation (CIC) at end-August 2019, rose by 0.1 \nper cent to N2,018.8 billion, in contrast to the decline of 7.3 per \ncent at end-June 2019. The development, relative to the \npreceding quarter, reflected, mainly, the increase in its \ncurrency outside banks and demand deposit components. \n \nTotal deposits at the CBN amounted to N14,084.1 billion at end-\nAugust 2019, indicating a decline of 12.1 per cent below the \nlevel at end-June 2019. The fall was attributed to 18.4 per cent, \n9.3 per cent and 5.8 per cent decline in the deposits of the \ncommercial banks, the Federal Government and the private \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 7 \nEconomic Report Third Quarter \n2019 \nsector, respectively. Of the total deposits at the CBN, the shares \nof the Federal Government, banks and private sector deposits \nwere 44.3 per cent, 35.2 per cent and 20.5 per cent, \nrespectively. \nReserve money fell by 13.7 per cent to N6,977.8 billion at end-\nAugust 2019, in contrast to the increase of 11.6 per cent at end-\nJune 2018. The development reflected the fall in banks’ \ndeposits with the CBN. \n2.3 \nMoney Market Developments \nDevelopments in the money market were mixed, as liquidity \nfluctuated during the review quarter. Activities that boosted \nliquidity were mainly inflow from repayment of matured CBN \nbills, maturing Federal Government (FGN) Bonds and Nigerian \nTreasury Bills (NTBs), as well as fiscal disbursements to the three \ntiers of Government, while provisioning and settlement of \nforeign exchange purchases, auctioning of CBN bills, FGN Bonds \nand Nigerian Treasury Bills (NTBs) moderated liquidity. \nTotal value of money market assets outstanding in the third \nquarter of 2019 stood at N12,595.30 billion, showing an increase \nof 2.9 per cent, compared with the increase of 3.0 per cent at \nthe end of the second quarter of 2019. The development was \nattributed, wholly, to the 3.7 per cent increase in FGN Bonds \noutstanding during the review quarter. \n2.3.1 \n Interest Rates Developments \nInterest rates moved in tandem with the level of banking system \nliquidity during the review period. Developments in the banks’ \ndeposit and lending rates were mixed in the third quarter of \n2019. The 6-month maturity deposit rate rose from 10.22 per \ncent at end-June 2019 to 10.26 per cent at end-September \n2019. All other rates of various maturities, however, fell from a \nrange of 3.68 – 10.37 per cent at end-June 2019 to a range of \n3.18 – 10.12 per cent at end-September 2019. The average term \ndeposit rate fell by 0.28 percentage point to 8.45 per cent at \nthe end of the review quarter. \nThe weighted average prime lending rate fell by 0.25 \npercentage point to 15.55 per cent, while the weighted \naverage maximum lending rate rose by 0.01 percentage point \nto 31.05 per cent at end-September 2019. Consequently, the \nLiquidity in the money \nmarket fluctuated in \nthe review period. \nInterest rates moved in \ntandem with the level \nof banking system \nliquidity in the money \nmarket during the \nreview period. \nReserve money (RM) \nfell in the review \nperiod. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 8 \nEconomic Report Third Quarter \n2019 \nspread between the weighted average term deposit and \nmaximum lending rates widened by 0.29 percentage point to \n22.60 percentage points at the end of the review quarter. \nSimilarly, the margin between the average savings and \nmaximum lending rates widened by 0.01 percentage point to \n27.12 percentage points at end-September 2019. \nAt the inter-bank segment, the weighted average inter-bank \ncall rate, which stood at 8.38 per cent at end-June 2019, rose \nby 2.23 percentage points to 11.61 per cent at end-September \n2019. Similarly, the Nigeria inter-bank offered rate (NIBOR), for \nthe 30-day tenor, rose from 12.10 per cent in the preceding \nquarter to 13.44 per cent at end-September 2019. Also, the \nweighted average rate at the Open-Buy-Back (OBB) segment \nrose by 2.25 percentage points to 10.96 per cent (Figure 3, \nTable 2). \nFigure 3: Selected DMBs Interest Rates (Average) \n \n \nSource: CBN \n \n \n \n \n \n0.0\n2.5\n5.0\n7.5\n10.0\n12.5\n15.0\n17.5\n20.0\n22.5\n25.0\n0.0\n2.5\n5.0\n7.5\n10.0\n12.5\n15.0\n17.5\n20.0\n22.5\n25.0\n27.5\n30.0\n32.5\n35.0\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nPer cent per Annum\nPercent per Annum\nPrime\nInterbank\nMaximum\nAverage Term Deposits (RHS)\nInter-bank call rate \nrose in Q3 2019 \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 9 \nEconomic Report Third Quarter \n2019 \nTable 2: Selected Interest Rates (Per cent, Averages) \nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nAverage Term Deposits\n8.87\n8.77\n8.34\n8.66\n8.51\n8.61\n8.86\n8.73\n8.45\nPrime Lending\n17.74\n17.66\n17.31\n17.03\n16.69\n16.45\n15.67\n15.80\n15.55\nInterbank\n18.45\n24.02\n18.98\n10.29\n5.83\n8.45\n14.32\n8.38\n11.61\nMaximum Lending\n31.18\n31.30\n31.61\n31.34\n30.93\n30.66\n30.62\n31.04\n31.05 \nSource: CBN \n \n2.3.2 \nCommercial Paper (CP) \nCommercial Paper (CP) outstanding held by banks stood at \nN40.18 billion at the end of the third quarter of 2019, showing a \ndecrease of 2.5 per cent below the N41.20 billion recorded at \nthe end of the preceding quarter. The development was due, \nlargely, to the decrease in investments in CP by merchant \nbanks during the review quarter. Thus, CP constituted 0.32 per \ncent of the total value of money market assets outstanding \nduring the review period, compared with 0.28 per cent in the \nsecond quarter of 2019. \n \n2.3.3 \nBankers’ Acceptances (BAs) \nBankers’ Acceptances (BAs) outstanding stood at N1.87 billion \nin the third quarter of 2019, showing a decline of 47.32 per cent \nbelow the N3.55 billion recorded at the end of the preceding \nquarter. The development was attributed, wholly, to a fall in \ninvestment in BAs by commercial banks during the review \nperiod. Consequently, BAs accounted for 0.02 per cent of the \ntotal value of money market assets outstanding at the end of \nthe third quarter of 2019, compared with 0.06 per cent at the \nend of the second quarter of 2019. \n \n2.3.4 Open Market Operations \nThe Bank intervened through direct Open Market Operations \n(OMO) auctions, to influence liquidity in the system during the \nthird quarter of 2019. The tenors to maturity of the instruments \nranged from 84 days to 364 days. Total amount offered, \nsubscribed to and allotted, stood at N3,435.00 billion, N5,944.96 \nbillion and N2,627.27 billion, respectively. The bid rates ranged \nfrom 11.20 per cent to 15.50 per cent, while the stop rates \nranged from 10.00 per cent to 13.50 per cent. Repayment of \nBanks’ holdings of \nBAs declined in Q3 \nof 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 10 \nEconomic Report Third Quarter \n2019 \nmatured CBN bills amounted to N3,450.98 billion, translating to \na net injection of N823.71 billion. \n2.3.5 \nPrimary Market \nAt the Government securities market, NTBs of 91- 182- and 364-\nday tenors, amounting to N1,000.51 billion, N2,434.83 billion and \nN1,000.51 billion were offered, subscribed to and allotted, \nrespectively, at the auctions held in the third quarter of 2019 on \nbehalf of the Debt Management Office (DMO). Total \nsubscription and allotment at the 91-day auction, were N158.03 \nbillion and N80.62 billion, respectively. The bid rates ranged \nfrom 9.00 per cent to 17.00 per cent, while the stop rates ranged \nfrom 9.74 per cent to 11.10 per cent. \nFor the 182-day auction, total subscription and allotment were \nN233.18 billion and N124.42 billion, respectively. The bid rates \nranged from 10.00 per cent to 15.00 per cent, while the stop \nrates ranged from 10.00 per cent to 11.80 per cent. Total \nsubscription and allotment at the 364-day auction were \nN1,653.44 billion and N706.61 billion, respectively, with bid rates \nranging from 10.50 per cent to 14.82 per cent, while stop rates \nranged from 11.14 per cent to 13.30 per cent. \n2.3.6 \nBonds Market \n Tranches of the 5-, 10-, and 30-year FGN Bonds were re-\nopened and offered for sale in the review period. The term to \nmaturity of the bonds ranged from 3 years 7 months to 29 years \n7 months. Total amount offered, subscribed to, and allotted \nwere N400.00 billion, N557.01 billion and N200.82 billion, \nrespectively. In addition, N91.10 billion was allotted on a non-\ncompetitive basis. There was no maturity and repayment \nduring the review period. The bid rates on all tenors ranged \nfrom 12.70 per cent to 15.78 per cent, while the marginal rates \nranged from 13.35 per cent to 14.64 per cent. The auctions \nwere impressive, due to renewed investors’ confidence in the \nmarket. \n2.3.7 \nCBN Standing Facilities \nThe banks continued to access the CBN’s Standing Facilities to \nsquare up their positions either by borrowing from the standing \nlending facility (SLF) or depositing their excess liquidity at the \nstanding deposit facility (SDF) of the CBN at the end of each \nbusiness day. \nTranches of FGN Bonds \nof various maturities \nwere offered for sale in \nthe Q3 of 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 11 \nEconomic Report Third Quarter \n2019 \nTotal request for the Standing Lending Facility (SLF), inclusive of \ndirect SLF and Intra-day lending facilities (ILF) that were \nconverted to overnight repo during the review quarter, stood \nat N6,203.28 billion, compared with N3,624.08 billion in the \npreceding quarter. Daily average transaction value amounted \nto N100.05 billion in 62 transaction days, with total interest \nearned at N4.21 billion, compared with the daily average of \nN62.48 billion in 58 transaction days, with a total of N2.63 billion, \nas interest earned at the end of the preceding quarter. \nTotal standing deposit facility (SDF) granted during the review \nperiod was N2,081.14 billion, with daily average of N33.08 \nbillion, compared with N4,983.88 billion, in the second quarter \nof 2019. The cost incurred on SDF in the review quarter \namounted to N0.63 billion, compared with N1.67 billion in the \npreceding quarter. \n2.4 \nBanks’ Activities \nThe total assets and liabilities of commercial banks stood at \nN39,587.71 billion at end-August 2019, representing a 0.1 per \ncent fall below the level at end-June 2019. Funds were sourced, \nlargely, from increased foreign liabilities, realisation of foreign \nassets and reduction of claims on the Central Bank of Nigeria. \nThe funds were used, mainly, to reduce unclassified liabilities, \nsettlement of time savings and foreign currency deposits and \nincreased claims on the private sector. \nAt N21,819.01 billion, banks’ credit to the domestic economy, \nat end-August 2019, showed an increase of 3.5 per cent, \ncompared with the level at end-June 2019. The development \nreflected, largely, the 3.7 per cent and 3.4 per cent rise in claims \non the Federal Government and the private sector, \nrespectively, in the review period. \nTotal specified liquid assets of the commercial banks was \nN13,778.50 billion at end-August 2019, representing 59.4 per \ncent of the total current liabilities. At that level, the liquidity ratio \nwas 5.5 percentage points and 29.4 percentage points above \nthe level at end-June 2019 and the stipulated minimum ratio of \n30.0 per cent, respectively. The loans-to-deposit ratio, at 61.1 \nper cent, was 3.5 percentage points higher than the level at \nend-June 2019, but 18.9 percentage points lower than the \nLiquidity ratio was \nabove the prescribed \nminimum, while the \nLoan-to-deposit ratio \nwas below the \nprescribed maximum \nin August 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 12 \nEconomic Report Third Quarter \n2019 \nprescribed maximum of 80.0 per cent. \n2.5 \nCapital Market Developments \n \n2.5.1 \nSecondary Market \nActivities on the Nigerian Stock Exchange (NSE) were mixed \nduring the third quarter of 2019, as the All Share Index (ASI) fell, \nwhile the aggregate market capitalisation rose at the end of \nthe review period. The turnover volume and value of traded \nsecurities declined by 36.0 per cent and 38.1 per cent to 16.3 \nbillion shares and N187.7 billion, respectively, in 218,415 deals, \ncompared with 25.5 billion shares worth N303.0 billion in 240,990 \ndeals, recorded in the second quarter of 2019. Developments \nin the market were driven, largely, by the cross-border listing of \n3.8 billion ordinary shares of Airtel Africa Plc, and sell-offs by \ninvestors, despite a generally positive half-year corporate \nearnings (Figure 4, Table 3). \nFigure 4 : Volume and Value of Traded Securities \n \n \n \n \nSource: NSE \nTable 3: Traded Securities on the Nigerian Stock Exchange (NSE) \nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nVolume (Billion)\n20.4\n28.7\n43.8\n23.1\n16.3\n18.9\n20.7\n25.5\n16.3\nValue (N Billion)\n360.4\n339.4 439.7\n359\n205\n211.2\n208.7\n303\n187.7\n \nSource: NSE \n \n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\n0\n5\n10\n15\n20\n25\n30\n35\n40\n45\n50\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nValue (N Billion)\nVolume (Billion)\nVolume of traded securities (LHS)\nValue of securities (RHS)\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 13 \nEconomic Report Third Quarter \n2019 \n2.5.2 \nNew Issues Market/Supplementary Listings \nThere was one (1) new equity listing and two (2) supplementary \nlistings during the review period (Table 4). \n \nTable 4: New and Supplementary Listing on the Nigerian Stock Exchange \nS/N Company\nAdditional Shares (Units)\nReasons\nListing\n1 Fidson Healthcare Plc\n0.59 billion Ordinary Shares \nAdditional Shares \nSupplementary\n2 Airtel Africa Plc\n3.76 billion Ordinary Shares\nEntire Shares Issued \nNew Listing \n3 Stanbic IBTC Holdings Plc\n232.90 billion Ordinary Shares\nAdditional Shares \nSupplementary\n \n \n2.5.3 Market Capitalisation \nThe aggregate market capitalisation for all listed securities \n(equities and debts) rose by 2.3 per cent to N26.3 trillion at the \nend of the third quarter of 2019, compared with N25.7 trillion at \nend-June 2019. Similarly, market capitalisation for the equities \nsegment rose by 2.0 per cent to N13.5 trillion and constituted \n51.3 per cent of the aggregate market capitalisation, \ncompared with N13.2 trillion and 51.3 per cent at end-June \n2019. \n \n2.5.4 NSE All-Share Index \nThe All-Share Index, which opened at 29,966.87 at the \nbeginning of the quarter, declined by 7.8 per cent to close at \n27,630.56 at end-September 2019. All the sectoral indices also \nwitnessed decline in the review period. Specifically, the NSE-\nPremium, NSE-Lotus, NSE-Oil and Gas, NSE-Consumer Goods, \nNSE-Industrial, NSE-Pension, NSE-Banking, NSE-AseM and NSE-\nInsurance indices fell by 5.2 per cent, 8.9 per cent, 5.5 per cent, \n8.8 per cent, 0.4 per cent, 6.1 per cent, 6.2 per cent, 1.0 per \ncent and 6.3 per cent, to 2,271.74, 1,789.82, 239.35, 567.41, \n1,083.31, 993.24, 343.99, 774.30 and 116.00, respectively, at end-\nSeptember 2019. \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 14 \nEconomic Report Third Quarter \n2019 \nFigure 5: Market Capitalisation and All-Share Index \n \nSource: NSE \nTable 5: Market Capitalisation and All Share Index (NSE) \nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nMarket Capitalisation (N trillion)\n19.6\n22.9\n24.869\n23.9\n22.3\n21.9\n22.3\n25.7\n26.3\nAll-Share Index (Equities)\n35,439.98\n \n38,243.19\n \n41,504.51\n \n38,278.55\n \n32,766.37\n \n31,430.50\n \n31,041.42\n \n29,966.87\n \n27,630.56\n \n \nSource: NSE \n \n \n \n \n \n \n \n \n \n \n \n \n -\n 5,000.00\n 10,000.00\n 15,000.00\n 20,000.00\n 25,000.00\n 30,000.00\n 35,000.00\n 40,000.00\n 45,000.00\n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\n30.00\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nIndex\nN Billion\nMarket Capitalization (LHS)\nAll-Share Index (RHS)\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 15 \nEconomic Report Third Quarter \n2019 \n3.0 \nFiscal Operations5 \nFederally-collected revenue in the third quarter of 2019, fell below the \nquarterly budget by 28.2 per cent, but rose above receipts in the \npreceding quarter by 18.3 per cent. Federal Government retained \nrevenue in the review quarter was N1,026.95 billion, while total \nestimated expenditure amounted to N1,406.63 billion, resulting in an \nestimated fiscal deficits of N379.68 billion. \n \n3.1 \nFederation Account Operations \nAt N2,700.20 billion, federally-collected revenue in the third \nquarter of 2019, was lower than the quarterly budget6 of \nN3,758.77 billion by 28.2 per cent. It, however, rose by 18.3 per \ncent above receipts in the preceding quarter. The decline in \nfederally-collected revenue (gross), relative to the quarterly \nbudget, was attributed, largely, to shortfalls in receipts from oil \nrevenue in the review period (Figure 6, Table 6). \nFigure 6: Components of Gross Federally-Collected Revenue \n \n \nTable 6: Gross Federation Account Revenue (N Billion)* \nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nFederally-collected revenue (Gross) \n2,564.28\n \n2,489.66\n \n2,309.78\n \n2,281.74\n \n2,700.20\n \n Oil Revenue\n1,394.19\n \n1,465.31\n \n1,413.74\n \n1,219.19\n \n1,340.08\n \n Non-Oil Revenue\n1,170.09\n \n1,024.35\n \n896.04\n \n1,062.55\n \n1,360.12\n \n \nSource: Federal Ministry of Finance \n*Figures are provisional \n \n \n5 Figures on government revenue and expenditure for the second quarter of 2019 were provisional and subject to \nchanges \n6 The quarterly budget was derived from the 2019 approved budget. \n0.00\n500.00\n1000.00\n1500.00\n2000.00\n2500.00\n3000.00\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nN Billion\nOil Revenue\nNon-Oil Revenue\nGross \nfederally- \ncollected revenue \nfell by 28.2 per \ncent \nbelow \nthe \nquarterly budget. \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 16 \nEconomic Report Third Quarter \n2019 \nGross oil revenue, at N1,340.08 billion or 49.6 per cent of the \ntotal receipts, was below the quarterly budget by 44.6 per cent, \nbut was above the receipt in the preceding quarter by 9.9 per \ncent. The decline in oil revenue, relative to the quarterly \nbudget, was due, largely, to shortfalls in all the components of \noil revenue, except Domestic Crude Oil and Gas sales (Figure \n7, Table 7). \n \n Figure 7 : Gross Oil Revenue and Its Components \n \n \nTable 7: Components of Gross Oil Revenue (N Billion) \nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nOil Revenue Gross\n1,394.19\n \n1,465.31\n \n1,413.74\n \n1,219.19\n \n1,340.08\n \nCrude oil/Gas Exports\n104.49\n \n103.62\n \n137.09\n \n86.98\n \n57.28\n \nPPT/Royalties\n914.56\n \n1,044.17\n \n871.36\n \n763.97\n \n947.53\n \nOthers\n375.14\n \n317.52\n \n405.29\n \n368.25\n \n335.26\n \nSource: Federal Ministry of Finance \n* Figures are provisional \nNon-oil revenue (gross), at N1,360.12 billion, rose above the \nquarterly budget of N1,341.72 billion by 1.4 per cent. It, similarly, \nrose above the level in the preceding quarter by 28.0 per cent. \nThe higher non-oil revenue, relative to the quarterly budget, \nwas as a result of increased receipts from Corporate Taxes, and \nimprovements in the collection of the Nigeria Customs Service \n(NCS) (Figure 8, Table 8). \n \n \n \n0.00\n500.00\n1000.00\n1500.00\n2000.00\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nN Billion\nCrude oil/Gas Exports\nPPT/Royalties\nOthers\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 17 \nEconomic Report Third Quarter \n2019 \nFigure 8: Gross Non-Oil Revenue and Its Components \n \n \n \nTable 8: Components of Gross Non-Oil Revenue (N Billion)* \nQ3 -18\nQ4 -18\nQ1-19\nQ2 -19\nQ3 -19\n Non-Oil Revenue\n1,170 .0 9\n \n1,0 2 4 .3 5\n \n8 9 6 .0 4\n \n10 6 2 .55\n1,3 6 0 .12\n \n Value-Added Tax (VAT)\n279.69\n \n276.41\n \n301.62\n \n295.49\n \n290.87\n \n Corporate Tax\n510.79\n \n347.15\n \n297.21\n \n332.61\n \n651.43\n \n Customs & Excise Duties\n181.06\n \n196.37\n \n190.96\n \n214.93\n \n210.77\n \n Others/1\n198.55\n \n204.43\n \n106.26\n \n219.52\n \n207.05\n \n1/Includes FGN Independent Revenue, Education Tax, NITDF & Customs Federation/Non-Federation Account Levies \n(Port, Sugar, ETLS, Steel, CISS & Cement Levies) \nSource: Federal Ministry of Finance \n* Figures are provisional \n \nAfter the statutory deductions and transfers of N443.68 billion \nand N486.29 billion, respectively, a net sum of N1,770.23 billion \nwas retained in the Federation Account for distribution. Of this \namount, the Federal Government got N866.79 billion, State and \nLocal governments received N439.65 billion and N338.95 billion, \nrespectively, while the balance of N124.85 billion was \ntransferred to the 13.0% Derivation Fund for distribution among \nthe oil-producing states. \nIn addition, the Federal Government received N41.89 billion, \nwhile the State and Local governments got N139.62 billion and \nN97.73 billion, respectively, from the VAT Pool Account. \n0.00\n500.00\n1000.00\n1500.00\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nN Billion\n Corporate Tax\n Customs & Excise Duties\nThe sum of N1,770.23 \nbillion \nof \nthe \ngross \nfederally-collected \nrevenue was distributed \namong the three tiers of \ngovernment \nand \nthe \n13.0% Derivation Fund \nfor oil-producing states. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 18 \nEconomic Report Third Quarter \n2019 \nTable 9: Summary of Federally-Collected Revenue Deductions and Transfers \n(N Billion)* \nQ3 2018\nQ4 2018\nQ1 2019\nQ2 2019\nQ3 2019\nTotal Deductions 1/\n396.91\n \n288.34\n \n435.51\n \n292.68\n \n443.68\n \n Oil Rev enue Deductions\n352.61\n245.80\n394.20\n248.66\n379.68\n Non-Oil Rev enue Deductions\n44.30\n42.54\n41.31\n44.02\n64.00\nTotal Transfers\n467.05\n \n469.78\n \n395.81\n \n503.20\n \n486.29\n \n Federal Gov t. Ind. Rev enue\n85.54\n90.03\n38.80\n148.73\n115.91\n VAT Pool Account\n268.50\n265.35\n289.55\n283.67\n279.24\n Others 2/\n113.00\n114.40\n67.46\n70.80\n91.14\n1/ Refer to Table 1 for breakdown of deductions\n2/Includes Federation and Non-Federation Special Levies, Education Tax & NITDEF\n \nSource: Office of the Accountant General of the Federation (OAGF) and Federal Ministry of Finance \n * Figures are provisional \nThe sum of N1.75 billion was drawn-down on the Non-oil Excess \nRevenue Account and distributed as follows: Federal \nGovernment, N0.92 billion; State governments, N0.47 billion; \nand Local governments, N0.36 billion. The sum of N3.02 billion \nwas also shared as Exchange Gain in the following proportion: \nFederal Government, N1.44 billion; State governments, N0.74 \nbillion; Local governments, N0.56 billion; and 13.0% Derivation \nFund, N0.28 billion. \nThus, the total statutory and VAT revenue allocation to the three \ntiers of government in the third quarter of 2019, amounted to \nN2,054.24 billion, compared with the quarterly budget of \nN3,272.00 billion. \n3.2 \nThe Fiscal Operations of the Three Tiers of \nGovernment \n3.2.1 \nThe Federal Government \nProvisional data on Federal Government finances indicated \nthat the Federal Government retained revenue for the third \nquarter of 2019 amounted to N1,026.95 billion. This was below \nthe quarterly budget by 51.5 per cent, but was above the \nreceipt in the preceding quarter by 8.7 per cent. Of the total \nrevenue, Federation Account accounted for 84.4 per cent, \nwhile Federal Government Independent Revenue, VAT, Non-oil \nExcess and Exchange Gain, accounted for 11.3 per cent, 4.1 \nper cent, 0.14 per cent, and 0.09 per cent, respectively (Figure \n9). \n \nAt N1,026.95 billion, the \nestimated FGN retained \nrevenue was lower than \nthe quarterly budget by \n51.5 per cent. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 19 \nEconomic Report Third Quarter \n2019 \nFigure 9: Federal Government Retained Revenue \n \n \nTable 10: Federal Government Fiscal Operations (N Billion)* \nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nRetained Revenue\n1,035.72\n \n1,144.47\n \n798.82\n \n944.58\n \n1,026.95\n \nExpenditure\n1,939.90\n \n2,017.63\n \n1,197.04\n \n1,579.88\n \n1,406.63\n \nCurrent Surplus(+)/Deficit(-)\n(564.73)\n \n(213.89)\n \n(56.10)\n \n(89.80)\n \n142.16\n \nPrimary Surplus(+)/Deficit(-)\n(163.20)\n \n(526.02)\n \n(64.83)\n \n(238.86)\n \n(29.09)\n \nOverall Balance: Surplus(+)/Deficit(-)\n(904.19)\n \n(873.16)\n \n(398.22)\n \n(635.30)\n \n(379.69)\n \nSource: Fiscal Liquidity Assessment Committee (FLAC), Ministry of Finance & the Office of the Accountant General \nof the Federation \n*Figures are provisional \nThe estimated Federal Government expenditure for the third \nquarter of 2019, at N1,406.63 billion, was below the level in the \npreceding quarter and the quarterly budget of N2,595.94 \nbillion by 11.0 per cent and 45.8 per cent, respectively. A \nbreakdown of the total expenditure showed that the recurrent \ncomponent accounted for 62.9 per cent, while capital and \nstatutory transfers accounted for 26.4 per cent and 10.7 per \ncent, respectively (Figure 10). A further breakdown of the \nrecurrent expenditure showed that the non-debt component \nexplained 60.4 per cent, while debt service payments was 39.6 \nper cent. \nFederation Acct.\n84.4%\nVAT Pool Acct.\n4.1%\nFGN Ind. Rev.\n11.3%\nExchange Gain\n0.14%\nNon-oil Excess\n0.09%\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 20 \nEconomic Report Third Quarter \n2019 \nFigure 10: Federal Government Expenditure\n \nThus, the fiscal operations of the Federal Government resulted \nin an estimated deficits of N379.68 billion, compared with the \nproportionate quarterly budget deficit of N479.62 billion. \n3.2.2 \nStatutory Allocations to State Governments \nAt N705.60 billion, the total allocation to state governments \nfrom the Federation Account, including the 13.0% Derivation \nFund and the VAT Pool Account, was lower than the quarterly \nbudget by 40.1 per cent. \nA breakdown showed that receipts from the Federation \nAccount were N565.98 billion (80.2%), while the share from VAT \npool account stood at N139.62 billion (19.8%). The receipts from \nthe Federation and VAT Pool Accounts fell below the quarterly \nbudget by 41.8 and 31.8 per cent, respectively. \n3.2.3 \nStatutory Allocations to Local Government Councils \nTotal allocations to local governments from the Federation and \nVAT Pool Accounts in the third quarter of 2019 stood at N437.61 \nbillion. This was below the quarterly budget by 35.1 per cent. Of \nthe total amount, allocation from the Federation Account was \nN339.87 billion (77.7%), while the VAT Pool Account stood at \nN97.73 billion (22.3%). \n \n \n \n \nRecurrent, \n62.9%\nCapital, 26.4%\nTransfers, \n10.7%\nThe fiscal \noperations of the \nFG resulted in an \nestimated overall \ndeficits of N379.68 \nbillion in Q3 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 21 \nEconomic Report Third Quarter \n2019 \n4.0 \nDomestic Economic Conditions \nAgricultural activities in the review quarter were dominated by \nharvesting of farm produce. In the livestock sub-sector, farmers \ncontinued the breeding of poultry and cattle nation-wide. The end-\nperiod headline inflation, on year-on-year and 12-month moving \naverage bases for the third quarter of 2019, stood at 11.24 per cent \nand 11.27 per cent, respectively. \n4.1 \nAgricultural Sector \nIn the third quarter of 2019, agricultural activities intensified, \ndue, largely, to increased rainfall experienced in most parts of \nthe country. However, a few cases of flooding were recorded \nin some parts of the country, which destroyed farm produce. \nFarming activities were centred majorly on the harvest of \nagricultural produce during the quarter. \nIn a bid to curb the farmers/herders clash and ensure a well-\nintegrated meat/dairy industry, a plot phase of the Livestock \nTransformation Plan was flagged off in Adamawa, Benue, \nKaduna, Plateau, Nasarawa, Taraba and Zamfara states. The \nPlan was targeted at supporting the development of the \ncountry’s livestock sub-sector. \n4.2 \nAgricultural Credit Guarantee Scheme \nA total of N1,214.2 million loan was guaranteed to 9,752 farmers \nunder the Agricultural Credit Guarantee Scheme (ACGS) in the \nthird quarter of 2019. This represented an increase of 41.7 per \ncent above the level in the preceding quarter, but was 14.6 per \ncent below the level in the corresponding quarter of 2018. Sub-\nsectorial analysis showed that food crops received the largest \nshare of N595.5 million (49.0 per cent) guaranteed to 5,436 \nbeneficiaries, mixed crops got N221.8 million (18.3 per cent) \nguaranteed to 2,472 beneficiaries, while livestock had N174.5 \nmillion (14.4 per cent) guaranteed to 690 beneficiaries. Cash \ncrops, fisheries and ‘Others’ got N106.5 million (8.8 per cent), \nN84.4 million (6.9 per cent) and N31.5 million (2.6 per cent), \nguaranteed to 629, 321 and 204 beneficiaries, respectively. \nAnalysis by state, showed that 34 states and the Federal Capital \nTerritory benefited from the Scheme in the review quarter, with \nthe highest and lowest sums of N142.9 million (11.8 per cent) \nand N2.6 million (0.2 per cent) guaranteed to Adamawa and \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 22 \nEconomic Report Third Quarter \n2019 \nJigawa states, respectively. \n4.3 Commercial Agricultural Credit Scheme (CACS) \nAt end-September 2019, the total amount released, since \ninception by the CBN under the Commercial Agriculture Credit \nScheme (CACS) to the participating banks for disbursement, \namounted to N610.4 billion for 593 projects, while total amount \nrepaid since inception stood at N368.0 billion at end-June 2019, \ncompared with N338.4 billion (Table 11). \nTable 11: Disbursement and Repayment of Credit under the Commercial \nAgriculture Credit Scheme (CACS) as at September 18, 2019 \n \n \n \n \n \n \n \n \n \n \n4.4 \nIndustrial Production7 \nData from the Nigeria Bureau of Statistics (NBS) indicated that \nthe industrial sector showed an improvement in the third \nquarter of 2019, on account of expansion in manufacturing \nactivities, due to marginal increase in employment, electricity \nconsumption, crude oil exploration, output and new orders in \nthe sub-sector. Consequently, industrial production in the \nreview quarter indicated a marginal increase over the level in \nthe preceding quarter. At 108.5 (2010=100), the estimated \nindex of industrial production rose by 0.7 per cent above the \nlevel in the preceding quarter. The increase reflected improved \nactivities in manufacturing, mining and electricity generation \n \n7 Indices are staff estimates and subject to changes and revision \nIndustrial activities \nimproved in the \nreview quarter, due \nto a marginal \nincrease in \nemployment, output \nand new orders. \nS/N Participating Banks\nTotal No. of Projects Amount Disbursed (N billion)\nAmount Repaid (N bil\n1\nUBA Plc\n52\n83.53\n55.0\n2\nZenith Bank\n76\n123.91\n79.5\n3\nFirst Bank of Nigeria Plc \n104\n52.99\n44.2\n4\nUnity Bank Plc \n30\n29.80\n13.0\n5\nUnion Bank Plc \n40\n28.96\n21.3\n6\nStanbic IBTC Plc\n46\n28.10\n19.2\n7\nSterlling Bank\n43\n72.43\n26.7\n8\nAccess Bank Plc\n26\n36.66\n29.6\n9\nFidelity Bank Plc \n17\n23.67\n13.8\n10\nPolaris Bank Limited\n10\n13.77\n11.7\n11\nFCMB Plc.\n29\n18.53\n9.6\n12\nEcobank\n10\n6.38\n6.4\n13\nGTBank\n29\n39.85\n20.3\n14\nDiamond Bank Plc\n23\n4.85\n4.0\n15\nHeritage Bank\n14\n6.81\n2.4\n16\nCitibank Plc\n2\n3.00\n3.0\n17\nKeystone Bank\n22\n30.05\n6.9\n18\nWEMA Bank Plc\n14\n3.24\n1.3\n19\nJaiz Bank Plc\n3\n2.05\n0.0\n20\nSuntrust BanK Ltd\n3\n1.85\n0.3\nTOTAL\n593\n610.43\n368.02\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 23 \nEconomic Report Third Quarter \n2019 \nand consumption. \nThe estimated index of manufacturing production, at 179.7 \n(2010=100), increased by 2.3 per cent, in the third quarter of \n2019, compared with the level in the preceding quarter. The \nimprovement was due, largely, to continued expansion in \nconsumer demand and moderated input prices (Figure11). \nThe estimated index of mining production, at 77.9 (2010=100), \nrose marginally by 0.3 per cent in the third quarter of 2019, \ncompared with the level attained in the second quarter of \n2019. The increase reflected the improvement in crude oil and \ngas production (Figure 11, Table 12). \nElectricity generation improved during the review quarter. At \n4,144.4 MW/h, average estimated electricity generation rose \nby 4.8 per cent, compared with the level at the end of the \nsecond quarter of 2019. The increase was attributed, majorly, \nto improvements in gas supply to thermal stations, as well as, \nincrease in water level at the hydro stations. \nAt 3,855.1 MW/h, average estimated electricity consumption \nincreased by 17.4 per cent, compared with the level attained \nin the preceding quarter. The increase was attributed, \nsignificantly, to improvements in transmission networks resulting \nfrom rising investments in transmissions infrastructures. \n \n \n \n \n \n \n \n \n \n \nAverage electricity \ngeneration and \nconsumption improved \nin the review quarter. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 24 \nEconomic Report Third Quarter \n2019 \n \n \n \nFigure 11 : Indices of Industrial Production (2010=100) 8\n0\n20\n40\n60\n80\n100\n120\n140\n160\n180\n200\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nIndex\nMining\nAll Sectors\nManufacturing\n \nSource: Staff Estimate \n \nTable 12: Indices of Industrial Production \n \nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nAll Sectors (1990=100)\n111.70\n95.80\n108.62\n109.10\n108.50\n Manufacturing\n176.1\n188.6\n183.7\n184.2\n179.7\n Mining\n73.7\n89.1\n77.5\n78.2\n77.9 \nSource: Staff Estimate \n4.5 \nPetroleum Sector \nNigeria’s crude oil production, including condensates and \nnatural gas liquids, averaged 1.89 mbd in the review quarter. \nThis represented an increase of 1.6 per cent, compared with \n1.86 mbd produced in the preceding quarter. The increase in \nproduction was attributed to the re-opening of some major oil \ninstallations earlier shutdown, including the contributions from \nthe start-up of the new Total Egina field. Allocation of crude oil \nfor domestic consumption was 0.45 mbd or 41.4 million barrels \nin the review period. \nThe average spot price of Nigeria’s reference crude oil, the \nBonny Light (37° API) fell from US$71.32/b in the second quarter \nof 2019, to US$65.21/b in the third quarter of 2019. This \nrepresented a decrease of 8.6 per cent and 14.7 per cent \n \n8 Index measurement (2010=100) from first quarter 2015 \nCrude oil and natural \ngas production \nincreased in the third \nquarter of 2019. \nCrude oil export increased \nin Q3 2019. \nAverage crude oil prices, \nincluding the Bonny Light \n(37° API) fell in the \ninternational crude oil \nmarket in Q3 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 25 \nEconomic Report Third Quarter \n2019 \nbelow the levels in the preceding quarter and the \ncorresponding period of 2018, respectively. The development \nwas, due, largely, to tightened crude oil supply in the global \noil market, majorly to high U.S crude stockpiles in the period and \nworries over escalating US-China trade dispute. The UK Brent at \nUS$63.42/b, Forcados at US$65.28/b and WTI at US$57.25/b, \nexhibited similar trends, as the Bonny Light. \nThe average price of the OPEC basket of the fifteen selected \ncrude streams was US$62.36/b in the third quarter of 2019, \nindicating a decrease of 8.8 per cent and 15.8 per cent, \ncompared with the US$62.72/b and US$74.10/b in the \npreceding quarter and the corresponding quarter of 2018 \n(Figure 12, Table 13). \nFigure 12: Trends in Crude Oil Prices \n \nSource: Reuters \n \nTable 13: Average Crude Oil Prices in the International Oil Market (US$ Barrel) \nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nBonny Light\n52.92\n62.48\n68.55\n75.43\n76.5\n69.89\n64.75\n71.3\n65.21\nOPEC Basket\n49.97\n59.35\n64.76\n71.88\n74.10\n67.98\n62.72\n68.40\n62.36\n \nSource: Reuters \n \n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nUS$ per barrel\nBonny Light\nOPEC Basket\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 26 \nEconomic Report Third Quarter \n2019 \n4.6 \nConsumer Prices9 \nThe all-items composite Consumer Price Index (CPI), at end-\nSeptember \n2019, \nwas \nestimated \nat \n298.5 \n(November \n2009=100), indicating a 3.0 per cent and 11.2 per cent increase \nover the levels in the second quarter of 2019 and the \ncorresponding period of 2018, respectively. The development \nwas attributed, largely, to increase in both food and non-food \ncategories. \nThe urban All-items CPI (November 2009=100) stood at 304.1 at \nend-September 2019, representing 3.3 per cent and 11.8 per \ncent increase, compared with the levels at end-June 2019 and \nend-September 2018, respectively. The rural all-items CPI \n(November 2009=100), was 294.1 at end-September 2019, \nrepresenting 2.9 per cent and 10.9 per cent increase, \ncompared with the levels at the end of the preceding quarter \nand the corresponding period of 2018, respectively (Figure 13, \nTable 14). \nThe composite food index (with a weight of 50.7 per cent) was \nestimated at 328.1 per cent in the third quarter of 2019, \ncompared with the 316.0 per cent and 289.0 per cent in the \npreceding quarter and the corresponding period of 2018, \nrespectively. \nFigure 13: Consumer Price Index \n \n \nSource: NBS \n \n9 New CPI with November 2009 = 100, as base and new weight, based on the \n2003/2004 Nigeria Living Standard Survey (NLSS), was released by the National \nBureau of Statistics (NBS) on October 18, 2010. \n200\n210\n220\n230\n240\n250\n260\n270\n280\n290\n300\n310\n320\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nIndex\nComposite\nUrban\nRural\nThe general price level \nincreased in Q3 2019 \nbelow the level in the \npreceding quarter. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 27 \nEconomic Report Third Quarter \n2019 \n \nTable 14: Consumer Price Index (November 2009=100) \nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nComposite\n241.2\n246.4\n252.4\n260.5\n268.4\n274.6\n280.8\n289.7\n298.6\nUrban\n243.5\n249.3\n255.6\n263.8\n272\n278.5\n285\n294.4\n304.1\nRural\n239.4\n244.1\n249.9\n257.8\n265.5\n271.4\n277.4\n285.9\n294.1 \nHeadline inflation stood at 11.24 per cent at end-September \n2019, compared with 11.22 per cent and 11.28 per cent at the \nend of the preceding quarter and the corresponding period of \n2018, respectively. The 12-Month Moving Average (12MMA) \ninflation, for the third quarter of 2019, was 11.27 per cent, \ncompared with 11.30 per cent and 13.16 per cent in the \npreceding quarter and the corresponding period of 2018, \nrespectively (Figure 14, Table 15). \n \nFigure 14: Inflation Rate \n \nSource: NBS \nTable15: Headline Inflation Rate (%) \nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\n12-Month Moving Average\n17.20\n16.50\n15.60\n14.37\n13.20\n12.10\n11.40\n11.30\n11.27\nYear-on-Year\n15.98\n15.37\n13.34\n11.23\n11.28\n11.44\n11.25\n11.22\n11.24\nSource: NBS \n \n5.00\n7.00\n9.00\n11.00\n13.00\n15.00\n17.00\n19.00\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nPercent\n12-Month Average\nYear-on-Year\nThe headline inflation \n(y-o-y) stood at 11.24 \nper cent in Q3 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 28 \nEconomic Report Third Quarter \n2019 \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 29 \nEconomic Report Third Quarter \n2019 \n5.0 \nExternal Sector Developments10 \nOn quarter-on-quarter basis, foreign exchange inflow, through the \nCBN, fell by 6.7 per cent, while outflow through Bank rose by 22.0 per \ncent, relative to their levels in the second quarter of 2019. Total non-\noil export proceeds received by banks fell by 11.7 per cent, \ncompared with the level at end-June 2019. The average exchange \nrate at the ’Investors’ and ‘Exporters’ window, the BDC and the Inter-\nbank segments of the market were N362.20/US$, N359.14/US$ and \nN306.93/US$, respectively, in the review quarter. At US$40.90 billion, \nthe gross external reserves fell by 8.6 per cent, compared with the \nlevel at end-June 2019. \n5.1 \nForeign Exchange Flows \nAggregate foreign exchange inflow into the CBN amounted to \nUS$11.69 billion, showing decline of 6.7 per cent and 9.5 per \ncent, compared with the levels in the second quarter of 2019 \nand the corresponding period of 2018, respectively. The \ndevelopment, relative to the preceding quarter reflected, \nmainly, the fall in non-oil receipts. \nAggregate outflow from the CBN was US$15.30 billion, \nindicating an increase of 22.0 per cent above the level in the \nsecond quarter of 2019, but a decline of 12.0 per cent, \ncompared with level in the corresponding period of 2018. The \nrise in outflow, relative to the preceding quarter, reflected, \nmainly, increased intervention in the foreign exchange market \nand other official payments. Overall, foreign exchange flows, \nthrough the Bank in the review period, resulted in a net outflow \nof US$3.61 billion, compared with net outflow of US$0.02 billion \nand US$4.47 billion in the preceding quarter and the \ncorresponding period of 2018, respectively (Figure 15, Table 16). \n \n \n \n \n \n10 Data on foreign exchange flows through the CBN and the Economy, as well as foreign \nexchange utilisation for the third quarter of 2019 are provisional and subject to change. \nForeign exchange inflow \ninto the CBN declined, \nwhile outflow from the \nBank rose, resulting in a \nnet outflow of US$3.61 \nbillion in Q3 of 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 30 \nEconomic Report Third Quarter \n2019 \nFigure 15: Foreign Exchange Flows through the CBN \n \n \nSource: CBN \nTable 16: Foreign Exchange Flows through the CBN (US$ million) \nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nInflow\n14,708.45\n \n14,194.10\n \n13,817.56\n \n12,949.01\n \n15,815.40\n \n18,384.02\n \n13,830.98\n \n11,689.73\n \nOutflow\n8,444.27\n \n9,651.78\n \n13,296.38\n \n16,931.36\n \n16,002.49\n \n16,302.16\n \n10,066.75\n \n15,302.72\n \nNetflow\n6,264.18\n \n4,542.32\n \n521.18\n \n(3,982.36)\n \n(187.09)\n \n2,081.86\n \n3,764.22\n \n(3,612.99)\n \n \nSource: CBN \n \nAggregate foreign exchange inflow into the economy \namounted to US$25.76 billion in the third quarter of 2019, \nindicating a decline of 5.7 per cent, compared with the level in \nthe preceding quarter, but an increase of 4.3 per cent above \nthe level in the corresponding period of 2018. The development \nwas as a result of the 6.7 per cent and 5.0 per cent decline in \ninflow through the CBN and autonomous sources, respectively. \nOil sector receipts, which accounted for US$4.00 billion, rose by \n4.9 per cent and 3.5 per cent above the levels at the end of \nthe preceding quarter and the corresponding period of 2018, \nrespectively. \nNon-oil public sector inflow, at US$7.71 billion (29.9 per cent of \nthe total) in the review period, declined by 11.7 per cent and \n15.1 per cent below the levels at the end of the second quarter \nof 2019 and the corresponding period of 2018, respectively. \nAutonomous inflow, at US$14.07 billion in the third quarter of \n-10,000\n-5,000\n0\n5,000\n10,000\n15,000\n20,000\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nUS$ million\nInflow\nOutflow\nNetflow\nAutonomous inflow \ninto the economy fell \nby 5.0 per cent in Q3 \n2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 31 \nEconomic Report Third Quarter \n2019 \n2019, similarly, declined by 5.0 per cent, compared with the \nlevel at the end of the preceding quarter, but increased by 19.4 \nper cent above the level recorded at the end of the \ncorresponding period of 2018. Inflow from autonomous sources \naccounted for 54.6 per cent of the total. \nAt US$16.54 billion, aggregate foreign exchange outflow from \nthe economy rose by 21.9 per cent above the level in the \npreceding quarter. It, however, fell by 9.4 per cent relative to \nthe \nlevel in the corresponding period of \n2018. \nThe \ndevelopment, relative to the preceding quarter was driven, \nmainly, by 22.0 per cent rise in outflow from the CBN, over the \nlevel in the preceding quarter. Thus, foreign exchange flows \nthrough the economy, resulted in a net inflow of US$9.22 billion \nin the review quarter, compared with US$13.76 billion and \nUS$9.43 billion in the preceding quarter and the corresponding \nperiod of 2018, respectively. \n5.2 \nNon-Oil Export Earnings by Exporters \nTotal non-oil export earnings received through the banks during \nthe review period amounted to US$1.62 billion, representing an \nincrease of 1.2 per cent and 95.1 per cent relative to the levels \nat the end of the preceding quarter and corresponding period \nof 2018, respectively. The development, relative to the \npreceding quarter’s level, was attributed, largely, to the 82.6 \nper cent, 82.4 per cent and 33.3 per cent increase in receipts \nfrom the agricultural, food products and transport sub-sectors, \nrespectively. Sectoral analysis showed that proceeds from the \nindustrial, manufacturing and minerals sub-sectors fell by 23.5 \nper cent, 21.1 per cent and 19.5 per cent, respectively. The \ndecrease in the non-oil export receipts from manufactured \nproducts was driven, majorly, by plastics, footwear, soap and \nother detergents, furniture and wood, glass and glass products, \ndrugs and pharmaceutical products, electronics and other \nmanufactured products. \nThe shares of the various sectors in non-oil export proceeds \nwere: agricultural products, 34.2 per cent; industrial sector, 27.6 \nper cent; minerals, 23.4 per cent; manufactured products, 9.5 \nper cent; and food products, 5.3 per cent. \n \nTotal non-oil export \nearnings by exporters \nfell in Q2 2019. \nTotal non-oil export \nearnings by exporters \nrose in Q3 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 32 \nEconomic Report Third Quarter \n2019 \n5.3 \nSectoral Utilisation of Foreign Exchange \n \nAggregate sectoral foreign exchange utilisation in the third \nquarter of 2019 stood at US$13.26 billion, indicating an increase \nof 50.9 per cent and 10.8 per cent above the levels at the end \nof the second quarter of 2019 and the corresponding period of \n2018, respectively. The invisible sector accounted for the bulk \n(69.5%) of total foreign exchange disbursed in the review \nquarter, followed by the industrial sector (13.1%). Others were: \nmanufactured products, 6.2 per cent; minerals and oil, 4.9 per \ncent; food products, 4.5 per cent; transport, 1.1 per cent; and \nagricultural sector, 0.7 per cent (Figure16). \nFigure 16: Sectoral Utilisation of Foreign Exchange Source: CBN \n \nSource: CBN \n \n5.4 \nForeign Exchange Market Developments \nA total of US$10.11 billion was sold by the CBN to authorised \ndealers in the third quarter of 2019. This represented 37.1 per \ncent increase, compared with the level in the second quarter \nof 2019. The development, relative to the preceding quarter, \nreflected, mainly, the significant rise in foreign exchange sales \nto the I&E window, swaps transactions and wholesale forwards \nin the review quarter. \nOf the total, foreign exchange sales to the I&E window, swaps \ntransaction, wholesale forwards intervention, SME intervention, \nsales to BDCs, interbank sales and SMIS intervention rose above \ntheir levels in the preceding quarter by 2,345.14 per cent, 36.1 \n1.0\n2.5\n9.0\n14.0\n9.5\n30.5\n33.5\n0.7\n1.1\n4.5\n6.2\n4.9\n13.1\n69.5\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\nAgricultural\nTransport\nFood\nManufactures\nMinerals & Oil\nIndustrial\nInvisibles\npercent of total\nQ3-19\nQ2-19\nQ1-19\nThe invisible sector \naccounted for the \nbulk of the total \nforeign exchange \ndisbursed in Q3 2019. \nSupply of foreign \nexchange to \nauthorised dealers \nrose in Q3 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 33 \nEconomic Report Third Quarter \n2019 \nper cent, 24.3 per cent, 12.5 per cent, 9.3 per cent, 6.9 per cent \nand 0.7 per cent, respectively, to US$2.02 billion, US$0.47 billion, \nUS$1.50 billion, US$0.43 billion, US$3.54 billion, US$0.33 billion and \nUS$1.84 billion, respectively. Foreign exchange forwards \ndisbursed at maturity recorded no transaction during the \nperiod under review (Figure 17, Table 17). \nFigure 17: Supply of Foreign Exchange \n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\n14.00\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nUS$ billion\nForex Sales at rDAS/Interbank\nSupply of Swaps\nSupply of Forex to BDC\nTotal Forex Supply\n \n \nSource: CBN \n \nTable 17: Demand for and Supply of Foreign Exchange (US$ billion) \nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nForex Sales at rDAS/Interbank\n1.96\n0.82\n0.36\n0.33\n0.33\nSupply of Swaps\n1.40\n0.13\n0.66\n0.09\n0.47\nSupply of Forex to BDC\n2.51\n2.98\n2.44\n3.33\n3.54\nWholesale Forward\n0.00\n0.00\n0.31\n1.18\n1.50\nSupply to I & E\n2.08\n2.09\n0.83\n0.08\n2.02\nSMIS Intervention\n0.00\n0.00\n0.70\n1.93\n1.84\nSME Intervention\n0.00\n0.00\n0.13\n0.40\n0.43\nDisbursement at maturity\n2.99\n3.15\n1.47\n0.00\n0.00\nTotal Forex Supply(BDC and rDAS)\n10.94\n9.18\n6.90\n7.33\n10.11\nSource: CBN \n \nThe CBN sustained its interventions at both the Inter-bank and \nthe BDC segments of the foreign exchange market in the \nreview quarter. Consequently, average exchange rate of the \nThe average naira \nexchange rate vis-à-vis \nthe US appreciated at the \ninter-bank and the BDC \nsegments, while it \ndepreciated at the I&E \nWindow in Q3 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 34 \nEconomic Report Third Quarter \n2019 \nnaira vis-à-vis the US dollar at the Inter-bank segment, \nappreciated by 0.01 per cent to N306.93/US$, above the level \nin the preceding quarter. It, however, depreciated by 0.3 per \ncent, compared with the level recorded in the corresponding \nperiod of 2018. Conversely, at the BDC segment, the average \nexchange rate, appreciated by 0.1 per cent and 0.02 per cent \nto N359.14/US$, relative to the level in the preceding quarter \nand the corresponding period of 2018, respectively. At \nN362.20/US$, the average exchange rate at the “Investors” \nand “Exporters” (I&E) window depreciated by 0.4 per cent, \nrelative to the level in the preceding quarter, but appreciated \nby 0.1 per cent, compared with the level in the corresponding \nperiod of 2018. \nConsequently, the premium between the average inter-bank \nand BDC rates narrowed by 0.13 percentage point to 17.0 per \ncent, relative to the level in the preceding quarter. The \npremium between the average exchange rates at the \n“Investors” and “Exporters” window and the BDC segment \nwidened by 0.6 percentage point to 0.9 per cent, in the review \nquarter, from 0.3 per cent at the end of the second quarter of \n2019 (Figure 18, Table 18). \nFigure 18: Average Exchange Rate Movements \n305.50\n306.00\n306.50\n307.00\n307.50\n356.00\n358.00\n360.00\n362.00\n364.00\n366.00\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nAv. I & E\nAv. BDC\nAv. Interbank (RHS)\nN/US$\n \n Source: CBN \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 35 \nEconomic Report Third Quarter \n2019 \nTable 18: Exchange Rate Movements and Exchange Rate Premium \nAverage Exchange Rate (N/US$)\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nInvestors and Exporters Window\n362.15\n360.47\n360.38\n360.80\n362.49\n364.21\n362.07\n360.72\n362.20\n BDC\n365.56\n362.83\n362.58\n361.84\n359.27\n362.34\n359.97\n360.00\n359.14\n Interbank\n305.81\n305.96\n305.81\n305.77\n306.03\n306.70\n306.84\n306.95\n306.93\nPremium (%)\n I&E/Interbank\nN/A\nN/A\nN/A\n18.0\n18.4\n18.3\n18.3\n17.5\n18.0\n BDC/Interbank\n19.30\n19.50\n18.59\n18.30\n17.40\n0.50\n0.80\n17.14\n17.00\n \nSource: CBN \n \n \nFigure 19: Exchange Rate Premium \n \nSource: CBN \n \n5.5 \nGross Official External Reserves \nGross external reserves were US$40.90 billion as at September \n25, 2019. This indicated a decrease of 8.6 per cent, compared \nwith the level in the second quarter of 2019. The external \nreserves position would cover 5.2 months of import of goods \nand services or 9.2 months of import of goods only, based on \nthe estimated value of import for the second quarter of 2019. A \nbreakdown of the external reserves by ownership showed that \nthe share of Federation reserves was US$0.27 billion (0.7 per \ncent); Federal Government reserves, US$7.00 billion (17.1 per \ncent); and the CBN reserves, US$33.62 billion (82.2 per cent) of \nthe total (Figure 20, Table 19). \n \n \n16.0\n16.5\n17.0\n17.5\n18.0\n18.5\n19.0\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nPer cent\nInterbank/BDC\nInterbank/BDC\nGross external \nreserves fell in the \nthird quarter of 2019. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 36 \nEconomic Report Third Quarter \n2019 \nFigure 20 : Gross Official External Reserves \n0\n10,000\n20,000\n30,000\n40,000\n50,000\nQ3-17\nQ4-17\nQ1-18\nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nUS$ million\n \n \nTable 19: Gross Official External Reserves (US$ million) \nQ2-18\nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nExternal Reserves\n47,157.9\n \n42,609.0\n \n42.542.82\n44,793.1\n \n44,747.0\n \n40,897.2\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 37 \nEconomic Report Third Quarter \n2019 \n6.0 Global Economic Outlooks \n6.1 Global Output \nGlobal growth was projected at 3.2 per cent for the year 2019 \nand was estimated to improve to 3.5 per cent in 2020. This was \n0.1 percentage point lower than in the projection in April World \nEconomic Outlook (WEO) for both years. Growth forecast for \nChina and Emerging Asia were revised downward, consistent \nwith the impact of intensifying trade tensions and associated \nconfidence effects. \n \nThe IMF’s World Economic Outlook (WEO) released in April 2019, \nprojected growth in major advanced economies to slowdown \nfrom 2.2 per cent in 2018 to 1.9 per cent and 1.7 per cent in \n2019 and 2020, respectively. The estimated growth rate for 2019 \nwas 0.1 percentage point, which was lower than the April 2019 \nWEO projection. In the United States, growth was projected to \ndecline to 2.6 per cent in 2019. This was below the IMF forecast \nof April 2019 of 2.3 per cent. The downward revision of 2019 \ngrowth reflected the stronger-than-anticipated first quarter \nperformance, as the headline number was strong on the back \nof robust exports and inventory accumulation. Domestic \ndemand was, however, somewhat softer than expected, and \nimports weaker, reflecting the effect of tariffs. These \ndevelopments point to slowing momentum over the rest of the \nyear. \n \nMeanwhile, growth in the euro area was projected to \nmoderate from 1.9 per cent in 2018 to 1.3 per cent in 2019. It \nwas, however, expected to improve to 1.6 per cent in the first \nhalf of 2020, 0.1 percentage point higher than in April 2018. \nGrowth rates had declined for many European economies, \nnotably Germany, where growth was revised downward, due \nto weaker-than-expected external demand, which also \nweighed \non \ninvestment. \nProjections, \nhowever, \nremain \nunchanged for France, where fiscal measures were expected \nto support growth, and Italy, where the uncertain fiscal outlook \nwas similar to April 2019 WEO projection, taking a toll on \ninvestment and domestic demand. In the United Kingdom, \ngrowth was projected at 1.4 per cent in 2018, 1.3 per cent in \n2019 and 1.4 per cent in 2020, 0.1 per cent higher than the April \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 38 \nEconomic Report Third Quarter \n2019 \n2019 WEO projection. Japan’s economy is set to grow by 0.9 \nper cent in 2019, 0.1 percentage point lower than in the April \n2019 WEO. \n \nIn emerging markets and developing economies, growth was \nprojected at 4.7 per cent in 2020, from 4.1 per cent in 2019. The \nforecasts for 2019 and 2020 were 0.3 percentage point and 0.1 \npercentage point lower, respectively, than in April, reflecting \ndownward revisions in all major regions. China’s growth was \nprojected to decline from 6.6 per cent in 2018 to 6.2 per cent in \n2019, while India’s growth was projected to increase from 6.8 \nper cent in 2018 to 7.0 per cent in 2019. In Brazil, growth was \nestimated to decline from 1.1 per cent in 2018 to 0.8 per cent \nin 2019. \n \nGrowth in sub-Sahara African economies was recovering, with \nthe region’s average growth projected to rise from 3.1 per cent \nin 2018 to 3.4 per cent and 3.6 per cent in 2019 and 2020, \nrespectively. The increase was due, mainly, to the impact of \nrecovering oil production and prices, agricultural diversification \nand growth in the financial sector. In South Africa for instance, \ngrowth is expected to move at a more subdued pace in 2019 \nthan projected in the April WEO, following a very weak first \nquarter. The development reflected a larger-than-anticipated \nimpact of strike activity, energy supply issues in mining, and \nweak agricultural production. Nigeria’s growth was projected \nto increase from 1.9 per cent in 2018 to 2.3 per cent in 2019, as \na result of the impact of recovering oil production and prices, \nagricultural diversification and growth in the financial sector. \n \n6.2 Global Inflation \nPreliminary data on global inflation for the third quarter of 2019 \nrevealed mixed results. While some advanced and emerging \nmarket economies experienced decelerating inflation, others \nhad increasing inflation. Among the advanced economies, \ninflation remain unchanged in the Eurozone at 1.0 per cent in \nAugust 2019, but increased in the United States to 1.8 per cent \nin July 2019, from 1.6 per cent in June 2019. Furthermore, \ninflation increased, marginally, in the United Kingdom to 2.1 per \ncent in July 2019 from 2.0 per cent in June 2019, but fell in Japan \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 39 \nEconomic Report Third Quarter \n2019 \nto 0.5 per cent in July 2019, from 0.7 per cent in the preceding \nmonth. \nIn major emerging markets, there were mixed developments. \nThe headline inflation in Brazil and India decreased to 3.2 per \ncent and 3.2 per cent in July 2019 from 3.4 per cent and 3.2 per \ncent, respectively, in June 2019. However, inflation in China rose \nto 2.8 per cent in July 2019 from 2.7 per cent in June 2019. In \nGhana, inflation also increased to 9.4 per cent in July 2019 from \n9.1 per cent in June 2019. \nAccording to the IMF’s World Economic Outlook (WEO) of April \n2019, inflation was estimated at 1.6 per cent in 2019 for the \nadvanced economy group, from 2.0 per cent in 2018. For the \nemerging markets and developing economies, inflation was \nexpected to remain unchanged in 2019 from 4.8 per cent in \n2018, reflecting pressures in a few economies, including \nrelatively strong demand conditions and a modest increase in \nfood inflation in India. In Sub-Saharan Africa, inflation was \nprojected to remain at double digits for some large developing \neconomies, though at a declining rate. However, the overall \ninflation in Sub-Saharan Africa was estimated to decelerate to \n8.1 percent in 2019, from 8.5 percent in 2018. \n6.3 Global Commodity Demand and Prices \nGlobal crude oil supply in the review quarter was estimated at \n69.23 mbd, representing an increase of 0.9 per cent above the \nlevel in the preceding quarter. World crude oil demand was \nprojected at 100.63 mbd in the third quarter of 2019, indicating \nan increase of 1.6 per cent compared with the level in the \nsecond quarter of 2019. The rise in crude oil demand was \ndriven, largely, by growing demand for September and \nOctober loading programmes, especially in Asia; tightening \ncrude supply in Latin America, the Middle East and North Africa, \ndue to planned and unplanned outages; and voluntary \nproduction adjustments from the OPEC and non-OPEC \nparticipating countries. \n6.4 \n International Financial Markets \nDevelopments in the international stock markets were mixed in \nthe third quarter of 2019. In North America, the United States \nS&P 500, the Canadian S&P/TSX Composite index and Mexico \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 40 \nEconomic Report Third Quarter \n2019 \nBolsa indices increased by 1.2 per cent, 1.5 per cent and 0.5 \nper cent, respectively. \nIn South America, the Brazilian Bovespa Stock, Argentine Merval \nindex and Colombian COLCAP indices increased by 3.9 per \ncent, 17.4 per cent and 1.6 per cent, respectively. In Europe, \nthe FTSE 100, France CAC 40 and the German DAX indices \nincreased by 3.0 per cent, 2.9 per cent and 3.7 per cent, \nrespectively. In Asia, Japan’s Nikkei 225, Shanghai Stock \nExchange-A and the Indian BSE Sensex indices rose by 6.0 per \ncent, 0.8 per cent and 3.9 per cent, respectively, during the \nperiod. \nIn the foreign exchange market, thirteen (13) of the sixteen (16) \ncurrencies surveyed depreciated against the US dollar, \nreflecting continued sluggish recovery of global output, decline \nin commodity prices and investor appetite for dollar-\ndenominated assets. The movement in the regional currencies \nexchange rates are as follows: \n \nAfrica: The Egyptian pound and the Ghanaian cedi \nappreciated against the US dollar by 2.2 per cent and \n0.7 per cent, respectively, while the Nigerian naira, the \nSouth African rand, and Kenyan shilling depreciated by \n0.03 per cent, 6.9 per cent, 1.4 per cent, respectively. \n \n \nNorth America: The Canadian dollar and Mexican peso \ndepreciated against the U.S. dollar by 1.1 per cent and \n2.38 per cent, respectively. \n \n \nSouth America: The Brazilian real appreciated against \nthe U.S. dollar by 7.9 per cent, while the Argentine peso \nand Colombian peso depreciated by 26.2 per cent and \n7.6 per cent, respectively. \n \n \nEurope: The Pound Sterling, Euro and Russian rubble \ndepreciated against the US dollar by 3.2 per cent, 4.2 \nper cent and 2.5 per cent, respectively. \n \n \nAsia: The Japanese yen, Chinese Yuan and Indian rupee \ndepreciated against the U.S. Dollar by 0.2 per cent, 3.9 \nper cent and 2.6 per cent, respectively. \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 41 \nEconomic Report Third Quarter \n2019 \n6.5 Other International Economic Developments \nand Meetings \nOther major international economic developments and \nmeetings of importance to the domestic economy in the third \nquarter of 2019 included: The Federal Ministry of Foreign Affairs \n(FMFA) \nconvened \nthe \nfirst \npreparatory \nInter-Ministerial \nCommittee meeting for the 74th session of the United Nations \nGeneral Assembly (UNGA), scheduled for September 2019, in \nNew York. The meeting held in July 2019 at the Rotunda \nAuditorium, Federal Ministry of Foreign Affairs, Abuja. The \npurpose of the meeting was to discuss the expectations of the \nMinistries, Departments and Agencies (MDAs) and Nigeria’s \nparticipation at the 74th session of the United Nations General \nAssembly (UNGA) in New York. \nThe Technical Committee (TC) of the West African Institute for \nFinancial and Economic Management (WAIFEM), held an \nextra-ordinary meeting, centred on the Restructuring of \nWAIFEM, at Conakry, Guinea from August 14 -15, 2019 under \nthe Chairmanship of Dr. Moses K. Tule, Director, Monetary Policy \nDepartment, Central Bank of Nigeria. In attendance were \nCentral Bank of The Gambia, Bank of Ghana, Central Bank of \nLiberia, Central Bank of Nigeria and Bank of Sierra Leone. \nFurthermore, the 2019 mid-year statutory meetings of the West \nAfrican Monetary Zone (WAMZ), West African Monetary \nAgency (WAMA) and WAIFEM held in Conakry, Republic of \nGuinea from August 16 – 23, 2019. The meetings took place as \nfollows: \n \nExtra-ordinary Meeting of the Technical Committee of \nWAIFEM – Aug 14 -15, 2019; \n \n35th Meeting of the TC of WAMA - Aug 18 -19, 2019; \n \n40th Meeting of the TC of WAIFEM – Aug 19, 2019; \n \n45th Meeting of the TC of WAMZ – Aug 20 -21, 2019; \n \n37th Meeting of WAIFEM Board of Governors – Aug 22, \n2019; \n \n39th Meeting of the Committee of Governors of WAMZ – \nAug 22, 2019; \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 42 \nEconomic Report Third Quarter \n2019 \n \n54th Meeting of the Committee of Governors of WAMA – \nAug 22, 2019; and \n \n42nd Meeting of the Convergence Council – Aug 23, \n2019. \nThe meetings had in attendance representatives from member \ncentral banks in the ECOWAS sub-region, Ministries of Finance, \nAfrican Development Bank (AfDB), West African Bankers \nAssociation (WABA), amongst other observers, and was hosted \nby the Central Bank of the Republic of Guinea (BCRG). \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 43 \nEconomic Report Third Quarter \n2019 \n \n \n \n \n \n \n \nAPPENDIX TABLES \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 44 \nEconomic Report Third Quarter \n2019 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 45 \nEconomic Report Third Quarter \n2019 \n \nTable A1: Money and Credit Aggregates \nJun-18\nSep-18\nDec-18\nMar-19\nJun-19\nAug-19\nDomestic Credit (Net)\n25,568.20\n \n26,408.42\n \n27,574.32\n \n31,736.89\n \n32,341.48\n \n34,291.10\n \n Claims on Federal Government (Net)\n3,286.30\n \n3,440.99\n \n4,866.09\n \n7,742.16\n \n7,583.24\n \n9,456.33\n \n Central Bank (Net)\n23,409.80\n \n(91.46)\n \n342.21\n \n3,215.42\n \n2,754.06\n \n4,450.03\n \n Banks\n3,262.90\n \n3,532.45\n \n4,523.88\n \n4,526.74\n \n4,829.18\n \n5,006.30\n \n Claims on Private Sector\n22,281.90\n \n22,967.43\n \n22,708.23\n \n23,994.74\n \n24,758.24\n \n24,834.77\n \n Central Bank\n6,420.40\n \n6,431.58\n \n6,574.67\n \n7,678.57\n \n8,504.88\n \n8,022.06\n \n Banks\n15,861.50\n \n16,535.85\n \n16,133.54\n \n16,316.16\n \n16,253.36\n \n16,812.71\n \n Claims on Other Private Sector\n20,489.00\n \n21,173.75\n \n21,109.72\n \n22,284.77\n \n23,117.87\n \n23,336.43\n \n Central Bank\n5,599.80\n \n5,730.19\n \n5,873.28\n \n6,870.79\n \n7,740.84\n \n7,258.02\n \n Banks\n14,889.20\n \n15,443.56\n \n15,236.44\n \n15,413.99\n \n15,377.03\n \n16,078.41\n \n Claims on State and Local Government\n1,628.80\n \n1,341.87\n \n1,553,64\n1,618.85\n \n1,595.81\n \n1,453.77\n \n Central Bank\n656.50\n \n656.53\n \n656.53\n \n716.67\n \n719.47\n \n719.47\n \n Banks\n972.30\n \n685.34\n \n897.11\n \n902.18\n \n876.33\n \n734.29\n \n Claims on Non-financial Public Enterprises\n Central Bank\n DMBs \nForeign Assets (Net)\n18,337.50\n \n18,815.94\n \n18,397.82\n \n16,816.80\n \n18,471.24\n \n15,702.07\n \n Central Bank\n17,844.10\n \n18,277.81\n \n18,181.45\n \n16,292.64\n \n17,569.37\n \n16,021.38\n \n Banks \n493.50\n \n538.13\n \n216.37\n \n524.16\n \n901.87\n \n(319.31)\n \nOther Assets (Net)\n(10,091.00)\n \n(14,373.29)\n \n(12,612.88)\n \n(14,722.61)\n \n(15,908.67)\n \n(14,747.99)\n \nMoney Supply (M3)\n33,814.70\n \n30,851.05\n \n33,359.26\n \n33,831.08\n \n34,904.05\n \n35,245.17\n \nQuasi-Money 1/\n14,112.90\n \n14,802.98\n \n15,316.02\n \n15,890.94\n \n16,737.58\n \n16,341.00\n \nMoney Supply (M1)\n10,701.10\n \n10,757.68\n \n11,752.56\n \n10,943.88\n \n11,161.25\n \n11,245.42\n \n Currency Outside Banks\n1,519.90\n \n1,601.88\n \n1,912.98\n \n1,780.61\n \n1,650.87\n \n1,653.26\n \n Demand Deposits 2/\n9,181.20\n \n9,155.79\n \n9,839.58\n \n9,163.26\n \n9,510.38\n \n9,592.16\n \nMoney Supply (M2)\n24,814.00\n \n25,560.66\n \n27,068.58\n \n26,834.82\n \n27,898.83\n \n27,586.42\n \nCBN Bills held by Non-Bank Sectors\n9,000.70\n \n5,290.39\n \n6,290.67\n \n6,996.26\n \n7,005.22\n \n7,658.74\n \nMoney Supply (M3)\n33,814.70\n \n30,851.05\n \n33,359.25\n \n33,831.07\n \n34,904.05\n \n35,245.17\n \nMemorandum Items:\nReserve Money (RM)\n6,360.50\n \n6,802.56\n \n7,135.73\n \n7,246.28\n \n8,088.46\n \n6,977.84\n \n Currency in Circulation (CIC)\n1,900.70\n \n1,926.38\n \n2,329.71\n \n2,153.22\n \n2,014.07\n \n2,018.84\n \n Banks' Deposit with CBN\n4,459.80\n \n4,876.17\n \n4,806.02\n \n5,093.06\n \n6,074.39\n \n4,958.99\n \n \nSource: CBN \n \n1/ Quasi money consist of Time, Savings and Foreign Currency Deposit at Deposit Money Banks excluding Taking from Discount Houses. \n2/ Demand Deposit consist of State, Local and Parastatals Deposits at CBN, State, Local Government and Private Sector Deposits as well \n as Demand Deposits of non-financial Public Enterprises at Deposit Money Banks. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 46 \nEconomic Report Third Quarter \n2019 \n \nTable A2: Money and Credit Aggregates (Growth Rates)* \nJun-18\nSep-18\nDec-18\nMar-19\nJun-19\nAug-19\nDomestic Credit (Net)\n-6.32\n3.3\n4.4\n15.1\n1.9\n6.0\n Claims on Federal Government (Net)\n-33.35\n4.7\n41.4\n59.1\n-2.1\n24.7\n Claims on Private Sector\n-0.36\n3.1\n-1.1\n5.7\n3.2\n0.3\n Claims on Other Private Sector\n0.11\n5.3\n-0.3\n5.6\n3.7\n1.0\n Claims on State and Local Government\n-0.19\n-17.6\n15.8\n4.2\n-1.4\n-8.9\n Claims on Non-financial Public Enterprises\nForeign Assets (Net)\n12.38\n2.6\n-2.2\n-8.6\n9.8\n-15.0\nOther Assets (Net)\n-3.56\n-1.3\n-12.3\n16.7\n8.1\n-7.3\nMoney Supply (M3)\n2.01\n5.1\n8.1\n1.4\n3.2\n1.0\nQuasi-Money 1/\n5.4\n4.9\n3.5\n3.8\n5.3\n-2.4\nMoney Supply (M1)\n-3.02\n0.5\n9.3\n-6.9\n2.0\n0.8\n Currency Outside Banks\n-8.9\n5.4\n19.4\n-6.9\n-7.3\n0.1\n Demand Deposits 2/\n-1.97\n-0.3\n7.5\n-6.9\n3.8\n0.9\nTotal Money Assets (M2)\n1.6\n3\n5.9\n-0.9\n4.0\n-1.1\nCBN Bills held by Non-Bank Sectors\n3.19\n16.8\n18.9\n11.2\n0.1\n9.3\nMoney Supply (M3)\n2.01\n5.1\n8.1\n1.4\n3.2\n1.0\nMemorandum Items:\nReserve Money (RM)\n-5.85\n7\n4.9\n1.6\n11.6\n-13.7\n Currency in Circulation (CIC)\n-6.8\n1.4\n20.9\n1.6\n11.6\n13.7\n DMBs Demand Deposit with CBN\n-2.53\n9.3\n-10.5\n-7.6\n6.5\n0.2\nDomestic Credit (Net)\n-1.4\n1.8\n6.3\n15.1\n17.3\n24.4\n Claims on Federal Government (Net)\n-9.74\n-5.4\n33.7\n59.1\n55.8\n94.3\n Claims on Private Sector\n-0.04\n3\n1.9\n5.7\n9.0\n9.4\n Claims on Other Private Sector\n-1.11\n2.2\n1.9\n5.6\n9.5\n10.6\n Claims on State and Local Governments\n5.44\n-13.1\n0.6\n4.2\n2.7\n-6.4\n Claims on Non-financial Public Enterprises\nForeign Asset (Net)\n5.13\n21.2\n18.5\n8.6\n0.4\n-14.7\nOther Asset (Net)\n-1.64\n12.5\n1.3\n-16.7\n-26.1\n-16.9\nMoney Supply (M3)\n6.39\n7.6\n16.4\n1.4\n4.6\n5.7\nQuasi-Money 1/\n3.28\n14.2\n18.1\n3.8\n9.3\n6.7\nMoney Supply (M1)\n-1.27\n-3.7\n5.2\n-6.9\n-5.0\n-4.3\n Currency Outside Banks\n-6.41\n-10.1\n7.3\n-6.9\n-13.7\n-13.6\n Demand Deposits 2/\n-0.29\n-2.5\n4.8\n-6.9\n-3.4\n-2.5\nMoney Supply (M2)\n2.33\n1.18\n5.9\n-0.9\n3.1\n1.9\nCBN Bills held by Non-Bank Sectors\n42.91\n24.31\n16.8\n11.2\n11.4\n21.8\nMoney Supply (M3)\n6.39\n7.6\n16.4\n1.4\n4.6\n5.7\nMemorandum Items:\nReserve Money (RM)\n-4.93\n10.88\n10.1\n1.6\n13.4\n-2.2\n Currency in Circulation (CIC)\n-1.01\n-5.47\n8\n-7.6\n-13.6\n-13.3\n DMBs Demand Deposit with CBN\n17.9\n9\n11.10\n6.00\n26.4\n3.2\nPercentage Change Over Preceding Quarter\nPercentage Change Over Preceding December\n \nSource: CBN \n1/ Quasi money consist of Time, Savings and Foreign Currency Deposit at Deposit Money Banks excluding Taking from Discount Houses. \n2/ Demand Deposit consist of State, Local and Parastatals Deposits at CBN, State, Local Government and Private Sector Deposits as well as Demand Deposits of \nnon-financial Public Enterprises at Deposit Money Banks. \n*All figures are provisional. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 47 \nEconomic Report Third Quarter \n2019 \n \nTable A3: Federal Government Fiscal Operations (N billion) * \nQ3-18\nQ4-18\nQ1-19\nQ2-19\nQ3-19\nRetained Revenue\n1,035.72\n \n1,144.47\n \n798.82\n \n944.58\n \n1,026.95\n \n Federation Account\n824.40\n \n828.66\n \n709.03\n716.29\n \n866.79\n \n VAT Pool Account\n40.28\n \n39.80\n \n43.43\n \n42.55\n \n41.89\n \n FGN Independent Revenue\n85.54\n \n90.03\n \n38.80\n \n148.73\n \n115.91\n \n Excess oil\n5.50\n \n-\n \n-\n \n36.33\n \n-\n \n Excess non-oil\n3.86\n \n2.32\n \n6.40\n \n-\n \n0.92\n \nExchange gain\n30.73\n \n56.00\n \n1.16\n \n0.69\n \n1.44\n \n Others\n45.42\n \n127.66\n \n-\n \n-\n \n-\n \nExpenditure\n1,939.90\n \n2,017.63\n \n1,197.04\n \n1,579.88\n \n1,406.63\n \n Recurrent\n1,600.45\n \n1,358.36\n \n854.92\n \n1,034.38\n \n884.79\n \n Capital\n225.34\n545.15\n275.55\n493.48\n371.65\n Transfers\n114.11\n \n114.11\n \n66.57\n \n52.02\n \n150.19\n \nOverall Balance: Surplus(+)/Deficit(-)\n(904.19)\n \n(873.16)\n \n(398.22)\n \n(635.30)\n \n(379.68)\n \n \n \n*Third Quarter 2019 figures are provisional. \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 48 \nEconomic Report Third Quarter \n2019", "source": "BOG", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Quarterly_Economic_Reports/CBN ECONOMIC REPORT THIRD QUARTER 2019_final.pdf"}
{"doc_id": "f8445140710c5100d2ede0f81f085c56", "text": "PUBLIC \nPUBLIC \nq \n \n \n \n \n \n \n \n \n \nBANK OF GHANA \nMONETARY POLICY REPORT \n \n \n \n \n \n \n \n \n \n \nJuly 2025 \nB\nA\nN\nK\nO\nF\nG\nH\nA\nN\nA\nE\nS\nT\n.\n1\n9\n5\n7\n \n \nPUBLIC \nPUBLIC \nThe Monetary Policy Report highlights the economic and financial sector assessments that the Monetary Policy \nCommittee (MPC) considered prior to the policy decision during the 125th meeting held in July 2025. \nMonetary Policy Objective in Ghana \nThe primary objective of the Bank of Ghana is to ensure stability in the general level of prices which has been \ndefined as maintaining inflation over the medium term, within a band of 8± 2 percent. Without limiting the \nprimary objective, the Bank is also expected to support the general economic policy of the government, promote \neconomic growth and development, foster the effective and efficient operation of the banking and credit system; \nand contribute to the promotion and maintenance of financial stability. \n \nMonetary Policy Strategy \nTo achieve the objective of price stability, Bank of Ghana was granted operational independence to use whichever \npolicy tools it sees appropriate to stabilise inflation around the target band. The Bank of Ghana’s framework for \nconducting monetary policy is Inflation Targeting (IT), in which the central bank uses the Monetary Policy Rate \n(MPR) as the primary policy tool to set the monetary policy stance and anchor inflation expectations in the \neconomy. \n \nThe MPC Process \nThe MPC is a statutorily constituted body established by the Bank of Ghana (Amendment) Act, Act 2016 (Act 918) \nto formulate monetary policy. The MPC consists of seven members – five from the Bank of Ghana (including the \nGovernor who is the Chairman) and two external members appointed by the Board of the Bank. The MPC meeting \ndates are determined at the beginning of each year. The MPC meets bi-monthly to assess economic conditions \nand risks to the inflation outlook, after which a policy decision is made on positioning the MPR. Each decision \nsignals a monetary policy stance of tightening (increase), easing (decrease) or no change (stay put). The policy \ndecision is arrived at by consensus with each member stating reasons underlying a preferred MPR decision. \nSubsequently, the decision is announced at a press conference held after each MPC meeting and a press release \nissued to financial markets and the public. \n \n©Research Department, Bank of Ghana MPC Report – July 2025 \nwww.bog.gov.gh \n \n \n \n1 \n \nPUBLIC \nTable of Contents \n \n1. GLOBAL ECONOMIC DEVELOPMENTS .................................................................................................................... 3 \n1.0 HIGHLIGHTS .................................................................................................................................................................... 3 \n1.1 GLOBAL GROWTH DEVELOPMENTS ............................................................................................................................... 3 \n1.2 GLOBAL PRICE DEVELOPMENTS ..................................................................................................................................... 4 \n1.3 GLOBAL FINANCIAL MARKETS DEVELOPMENTS ............................................................................................................ 4 \n1.4 CURRENCY MARKETS ..................................................................................................................................................... 5 \n2. EXTERNAL SECTOR DEVELOPMENTS ...................................................................................................................... 8 \n2.0 HIGHLIGHTS .................................................................................................................................................................... 8 \n2.1 COMMODITY PRICE TRENDS ........................................................................................................................................... 8 \n2.2 TRADE BALANCE ............................................................................................................................................................. 9 \n2.3 CURRENT ACCOUNT ...................................................................................................................................................... 10 \n2.4 CAPITAL AND FINANCIAL ACCOUNTS ........................................................................................................................... 10 \n2.5 INTERNATIONAL RESERVES .......................................................................................................................................... 10 \n2.6 EXTERNAL SECTOR OUTLOOK ...................................................................................................................................... 10 \n3. REAL SECTOR DEVELOPMENTS ............................................................................................................................... 12 \n3.0 HIGHLIGHTS .................................................................................................................................................................. 12 \n3.1 ECONOMIC GROWTH .................................................................................................................................................... 12 \n3.2 TRENDS IN REAL SECTOR INDICATORS ......................................................................................................................... 12 \n3.3 LABOUR MARKET ACTIVITY......................................................................................................................................... 14 \n3.4 COMPOSITE INDEX OF ECONOMIC ACTIVITY ............................................................................................................... 14 \n3.5 CONSUMER AND BUSINESS SURVEYS ............................................................................................................................. 14 \n4. MONETARY AND FINANCIAL DEVELOPMENTS................................................................................................... 18 \n4.0 HIGHLIGHTS .................................................................................................................................................................. 18 \n4.1 DEVELOPMENTS IN MONETARY AGGREGATES ............................................................................................................. 18 \n4.2 RESERVE MONEY .......................................................................................................................................................... 19 \n4.3 DEPOSIT MONEY BANKS CREDIT DEVELOPMENTS ...................................................................................................... 20 \n4.4 MONEY MARKET DEVELOPMENTS ............................................................................................................................... 21 \n4.5 STOCK MARKET DEVELOPMENTS ................................................................................................................................. 22 \n4.6 CONCLUSION ................................................................................................................................................................. 23 \n5. BANKING SECTOR DEVELOPMENTS ....................................................................................................................... 24 \n5.0 HIGHLIGHTS .................................................................................................................................................................. 24 \n5.1 BANKS’ BALANCE SHEET .............................................................................................................................................. 24 \n5.2 CREDIT RISK ................................................................................................................................................................. 26 \n5.3 FINANCIAL SOUNDNESS INDICATORS ............................................................................................................................ 28 \n5.4 CREDIT CONDITIONS SURVEY ....................................................................................................................................... 31 \n5.5 CONCLUSION AND OUTLOOK ........................................................................................................................................ 32 \n6. MACROPRUDENTIAL DEVELOPMENTS ................................................................................................................. 33 \n6.0 OVERVIEW .................................................................................................................................................................... 33 \n6.1 MICROFINANCIAL RISK ASSESSMENT ........................................................................................................................... 33 \n6.2 RISK OF CAPITAL FLIGHT ............................................................................................................................................. 34 \n6.3 BANKING SECTOR SOUNDNESS ...................................................................................................................................... 35 \n6.4 BANKING SECTOR RESILIENCE ..................................................................................................................................... 36 \n6.5 CONCLUSION ................................................................................................................................................................. 38 \n7. FISCAL DEVELOPMENTS ............................................................................................................................................ 39 \n7.0 HIGHLIGHTS .................................................................................................................................................................. 39 \n7.1 REVENUE AND GRANTS ................................................................................................................................................. 39 \n7.2 EXPENDITURE ............................................................................................................................................................... 39 \n7.3 BUDGET BALANCE AND FINANCING .............................................................................................................................. 42 \n7.4 PUBLIC DEBT ANALYSIS ................................................................................................................................................ 43 \n8. PRICE DEVELOPMENTS ............................................................................................................................................... 46 \n8.0 HIGHLIGHTS .................................................................................................................................................................. 46 \n8.1 GLOBAL GROWTH AND INFLATION DEVELOPMENTS.................................................................................................... 46 \n8.2 DOMESTIC PRICE DEVELOPMENTS ............................................................................................................................... 47 \n8.3 INFLATION OUTLOOK AND RISK ASSESSMENT ............................................................................................................. 49 \nAPPENDIX............................................................................................................................................................................. 51 \n \n \n2 \n \nPUBLIC \nOverview \n \n \nThe global outlook is becoming increasingly challenging, due to the erection of substantial \nbarriers to trade, especially tariffs proposed by the U.S. This has contributed to raising policy \nuncertainty, which has negatively impacted business and consumer confidence and is set to hold back \ntrade and investment, while tightening financial conditions. The global disinflation process has stalled \nsomewhat, prompting more restrictive monetary policy stances and dampening growth prospects. \n \nOn the domestic front, the Bank’s high frequency real sector indicators point to a sustained \npickup in economic activity. The updated Composite Index of Economic Activity recorded an annual \ngrowth of 4.4 percent in May 2025, compared to a growth of 3.4 percent for the corresponding period \nof 2024. This development was mainly driven by improvements in international trade activities, \nconsumption of goods and services by households and firms, construction activities, and tourist arrivals. \n \nHeadline inflation has declined consecutively in the first six months of the year. Between December \n2024 and June 2025, it fell by 10.1 percentage points to 13.7 percent. It has been driven by both food \nand non-food inflation. The decline has been broad-based, driven by tight monetary policy and a sharp \nappreciation of the domestic currency. \n \nThe external sector has continued to perform strongly, with a record provisional current account \nsurplus of US$3.4 billion in the first half of 2025. This has been driven mainly by increased export \nearnings from gold and cocoa. The current account surplus, together with a surplus in the capital \naccount, amounted to US$3.5 billion, putting the country in a net lending position with the rest of the \nworld. The strong external performance resulted in a significant build-up in international reserves. \n \nThe cedi has remained relatively stable despite rising global uncertainty. This performance has \nbeen driven by a range of factors, including the tight monetary policy stance, BoG’s support to the \nmarket, positive market sentiments from a ratings upgrade, continuous reserve build-up from exports, \nremittances, and IMF inflows. \n \nThe monetary and financial sector was stable during the period under review. Growth in monetary \naggregates remained subdued, reflecting tight monetary conditions consistent with policy efforts to \nsustain the disinflation process. There was significant build-up in Net Foreign Assets (NFA) but the \neffect was contained through sterilization efforts. Credit slowed during the period under review. Year \non year, money market rates broadly trended downwards at the short end of the primary market while \ninterest rates on longer-dated instruments remained stable. The GSE Composite Index (GSE-CI) \nrecorded significant gains relative to the corresponding period last year. This was underpinned by \nimproved investor appetite, driven by significant recovery in the profitability of listed financial \ninstitutions and improved liquidity in that segment of the market. \n \nThe banking sector performed strongly in the first six months of 2025. The sector recorded \nincreased profitability levels than for the same period a year earlier, mainly driven by growth in assets \nand deposits. The Financial Soundness Indicators remained healthy, recording improvements in \nsolvency, efficiency and asset quality indicators in June 2025 relative to June 2024; however, liquidity \nindicators moderated. The industry’s non-performing loans (NPL) ratio also improved on account of a \nlarger growth in loans and advances than in the NPL stock. \n \n \n3 \n \nPUBLIC \n1. Global Economic Developments \n \n1.0 Highlights \nThe global outlook is becoming increasingly challenging, amid the erection of substantial barriers to \ntrade, especially by the U.S. The global disinflation process has stalled somewhat, and headline \ninflation has remained stickier downwards than anticipated in some countries. Financial conditions \nremain restrictive, reflecting still high policy rates and long-term bond yields amid rising uncertainty. \nIn the local forex market, the Ghana cedi maintained its stability, supported by policy and a strong \nreserves build-up. \n \n1.1 Global Growth Developments \nThe global outlook is becoming increasingly challenging due to a significant increase in trade barriers, \ncontributing to policy uncertainty. Rising global uncertainty has negatively impacted business and \nconsumer confidence and is set to hold back trade and investment, while tightening financial conditions. \nAgainst this backdrop, global growth projections have been downgraded from 3.3 percent in 2024 to \n3.0 percent in 2025. The downgrades are broad-based, with growth in the U.S. and China expected to \nmoderate much more sharply than their peers amid the tariff wars. Activity in the global economy will \nbe largely supported by growth in Emerging Market and Developing Economies \n \nRisks to the outlook for growth are tilted to the downside. Growth could be hit by further bilateral tariff \nactions and countermeasures. This will prolong economic and trade policy uncertainty, deteriorating \nconsumer and business confidence. Meanwhile, the on-going trade measures could elevate downward \npressures on household and business spending. Also, headline inflation may remain stickier downwards \nthan anticipated, prompting more restrictive monetary policy stances and dampening growth prospects. \nThe uncertainty about how central banks will navigate the difficult trade-offs they face amid tariffs \ncould trigger a disruptive repricing of risky assets, sharp tightening of financial conditions, and \nappreciation of the dollar. \n \nTable 1.1: Overview of the WEO Projections \n \nOverview of the World Economic Outlook Projections\n(Percent change)\n2024\n2025\n2026\nWorld \n3.3\n3.0\n3.1\nAdvanced Economies\n1.8\n1.5\n1.6\nUnited States \n2.8\n1.9\n2.0\nEuro Area\n0.9\n1.0\n1.2\nGermany\n–0.2\n0.1\n0.9\nFrance\n1.1\n0.6\n1.0\nItaly\n0.7\n0.5\n0.8\nSpain\n3.2\n2.5\n1.8\nJapan \n0.2\n0.7\n0.5\nUnited Kingdom\n1.1\n1.2\n1.4\nCanada\n1.6\n1.6\n1.9\nOther Advanced Economies\n2.2\n1.6\n2.1\nEmerging Market and Developing Economies\n4.3\n4.1\n4.0\nChina\n5.0\n4.8\n4.2\nIndia\n6.5\n6.4\n6.4\nRussia\n4.3\n0.9\n1.0\nBrazil\n3.4\n2.3\n2.1\nMexico\n1.4\n0.2\n1.4\nSub-Saharan Africa \n4.0\n4.0\n4.3\nNigeria\n3.4\n3.4\n3.2\nSouth Africa\n0.5\n1.0\n1.3\nGhana\n5.7\n4.0\n4.8\nSource: IMF, WEO July.\nProjections\n \n4 \n \nPUBLIC \n \n1.2 Global Price Developments \nHeadline inflation has remained stickier downwards than anticipated in some countries, with inflation \nprojected to remain above most central bank’s target in 2025. The FAO food price index picked up in \nJune 2025 due to supply constraints emanating from climate related shocks. Pressures from food prices \nwere, however, partially offset by a decline in oil prices due to increased supply from non-OPEC \ncountries amid reduced global demand. Core inflation remained elevated due to persistence in services \ninflation and a resurgence in core goods inflation. Reflecting the persistence in inflation, price \nexpectations have been revised up for 2025 and 2026; however, expectations are expected to return to \ntarget in 2027. \n \nIn the outlook, global headline inflation is expected to decline, but this outcome is subject to high \nuncertainty. On the downside, the decline in oil prices in preceding months is expected to be sustained \nin the near term, with oil prices projected by the IMF to close the year at $66.94 per barrel. In addition, \nthe cooling of the labour markets will reduce wage growth pressures and support the disinflation \nprocess. However, potential tariff increases may drive up trade costs and cause prices to increase in \nlevying countries. Also, increasing food prices and the persistence of core inflation remain an upside \nrisk to prices. \n \nFigure 1.1: Headline Inflation in Advanced and Emerging Market Economies \n \nSource: Bank of Gana, Trading Economics \n \n \n1.3 Global Financial Markets Developments \nGlobal financial conditions remain restrictive, reflecting still-high policy rates and long-term bond \nyields amid rising uncertainty. Major central banks have adopted a cautious stance in their monetary \npolicy decisions. The Fed, the Bank of England, and the Bank of Japan have maintained policy rates at \ncurrent levels, due to elevated uncertainty and ongoing trade tensions. Also, long-term bond yields \nremain high, driven by trade policy uncertainty. However, equity markets continue to rally, reflecting \ncooling tariff fears and stronger earnings. In addition, portfolio flows to EMDEs rebounded in June \n2025, amid search for higher yields. \n \nIn the outlook, financial conditions will remain tight in the near term, reflecting the persistence in \nservices and good inflation. Also, higher policy rates amid heightened uncertainty and rising long term \nbond yields will keep financing conditions tighter for longer. Rising economic policy uncertainty amid \n \n5 \n \nPUBLIC \ntrade barriers could trigger a disruptive repricing of risky assets while putting downward pressure on \nEM currencies. \n \n \nTable 1.2: Monetary Policy Stance of Selected Central Banks \n \nSource: Growth Rate (World Bank); Debt/GDP (IMF) Policy Rates (Trading Economics) \n \n1.4 Currency Markets \nOn the international currency market, the U.S. dollar has trended down since January 2025 due to \nDonald Trump’s trade policies, expected weakness in the U.S. economy, and a recovery in the Euro \nArea. The dollar's recent rally was fuelled by optimism over U.S.-China tariff agreements and the fading \nof tariff fears. Subdued performance of the dollar has provided some support to EMDE currencies in \nthe review period. \n \nOn the domestic currency market, the cedi remained relatively stable despite rising global uncertainty. \nThe performance of the currency was supported by the tight monetary policy stance, BoG’s support to \nthe market, positive market sentiments from a ratings upgrade, continuous reserve build-up from \nexports, remittances and the IMF inflows. The cedi, however, experienced some demand pressures from \ncorporate, commerce and the energy sectors as well as bond sales by foreign investors. In the outlook, \nthe cedi’s performance will depend on continued fiscal consolidation, the strength of the U.S. dollar, \nthe level of reserves build-up, and BoG market support. In the interbank market, the cedi appreciated \nby 42.6 percent, 30.3 percent, and 25.6 percent against the dollar, the pound, and the euro, respectively, \non a year-to-date basis. This is against a depreciation of 18.6 percent, 17.9 percent, and 16.0 percent, \nagainst the dollar, the pound, and the euro, respectively, during the same period in 2024. However, the \ncedi was more volatile during the first 142 transaction days in 2025 compared to other years. \n \n \n \n \n \n \n \nCountry\nPolicy rate -\nPrevious (%)\nPolicy Rate \nCurrent (%)\nForecast\nInflation \nMay, 2025\nInflation \nJune, 2025\nReal rate Infl Target\nOverall \nFiscal \nDeficit \n(2024,% \nof GDP)\nGDP \nGrowth \n(Dec.2024)\nGross \nDebt/GDP(\n2024,%)\nYTD \nDepr/Appr \n22nd July \n2025\nU.S \n4.5\n4.5\n4.5\n2.4\n2.7\n1.8\n2%\n-7.3\n2.8\n120.8\nEuro Area\n2.4\n2.15\n2.15\n1.9\n2\n0.15\n< 2%\n-3.1\n0.9\n87.7\n13.57\nUK\n4.25\n4.25\n4\n3.4\n3.6\n0.7\n2%\n-5.7\n1.1\n101.2\n8.06\nJapan\n0.5\n0.5\n0.75\n3.5\n3.3\n-2.8\n2%\n-2.5\n0.1\n236.7\n6.13\nRussia\n21\n20\n18\n9.9\n9.4\n10.6\n4%\n-2.2\n4.1\n20.3\n44.46\nIndia\n6\n5.5\n5.5\n2.82\n2.10\n3.9\n4±2%\n-7.4\n6.5\n81.3\n-0.88\nBrazil\n14.75\n15\n15\n5.32\n5.35\n9.65\n4.5±1.5%\n-6.6\n3.4\n87.3\n11.00\nTurkey\n46\n46\n43.5\n35.41\n35.05\n10.95\n5±2%\n-5.2\n3.2\n26\n-12.52\nMalaysia\n3\n2.75\n2.75\n1.2\n1.1\n1.7\n3% - 4%\n-4\n5.1\n70.4\n5.66\nIndonesia\n5.5\n5.25\n5.25\n1.6\n1.87\n3.38\n3.5% ± 1%\n-2.3\n5\n40.2\n-1.28\nChile\n5\n5\n4.75\n4.4\n4.1\n0.9\n3±1%\n-2.7\n2.6\n42.0\n4.67\nGhana\n28\n28\n18.4\n13.7\n14.3\n8±2%\n-7.7\n5.7\n70.5\n40.67\nSouth Africa\n7.5\n7.25\n7.25\n2.8\n3\n4.3\n3% -6%\n-6.1\n0.6\n76.4\n7.32\nNigeria\n27.5\n27.5\n27.5\n22.97\n22.22\n5.28\n6% -9%\n-3.4\n3.4\n52.9\n0.82\nKenya\n10\n9.75\n9.75\n3.8\n3.8\n5.95\n2.5-7.5%\n-5.5\n4.5\n65.6\n0.07\nZambia\n14.5\n14.5\n14.5\n15.3\n14.1\n0.4\n6%-8%\n-3.3\n4\n114.9\n20.57\nMorocco\n2.25\n2.25\n2.25\n0.4\n0.4\n1.9\n-4.1\n3.2\n70\n12.61\nAngola\n19.5\n19.5\n19.5\n20.7\n19.73\n-0.23\n9-11%\n-1\n4.5\n62.5\n-0.32\nEgypt\n24\n24\n24.00\n16.8\n14.9\n9.1\n7± 2%\n-7.1\n2.4\n90.9\n3.62\nSource: Growth rate(World Bank); Debt/GDP (IMF)\nPolicy Rates (Trading Economics), YTD depreciation/appreciation is from Bloomberg\n \n6 \n \nPUBLIC \nTable 1.3: Interbank Exchange Rates \n \nSource: Bank of Ghana Staff Calculations \n \nThe cedi appreciated by 21.8 percent, and 29.0 percent, respectively, in trade weighted terms and forex \ntransaction weighted terms on a year-to-date basis in June 2025, reversing the depreciation of 19.9 \npercent and 22.5 percent, respectively, for the same period in 2024. \n \n \nTable 1.4: Nominal Effective Exchange Rate \n \nSource: Bank of Ghana Staff Calculations \n \nIn real bilateral terms, the cedi appreciated by 30.8 percent, 23.9 percent, and 21.7 percent, against the \ndollar, the pound, and the euro, respectively, on a year-to-date basis in June 2025. Comparatively, over \nthe same period in 2024, the cedi had experienced a depreciation of 11.4 percent, 9.5 percent, and 7.7 \npercent, respectively against the dollar, the pound, and the euro. \n \n \n \n \nExchange Rate Movements\nUS$/GHC*\nMonthly \ndepreciation/a\nppreciation\nYear-to-Date \ndepreciation/\nappreciation\nGBP/GHC*\nMonthly \ndepreciation/a\nppreciation\nYear-to-Date \ndepreciation/\nappreciation\nEuro/GHC*\nMonthly \ndepreciation/\nappreciation\nYear-to-Date \ndepreciation/a\nppreciation\n2023\nJan\n10.7997\n-20.6\n-20.59\n13.2863\n-22.4\n-22.39\n11.7262\n-22.0\n-22.01\nFeb\n11.0135\n-1.9\n-22.13\n13.3699\n-0.6\n-22.87\n11.7182\n0.1\n-21.95\nMar\n11.0137\n0.0\n-22.13\n13.6218\n-1.8\n-24.30\n11.9657\n-2.1\n-23.57\nApr\n10.9516\n0.6\n-21.69\n13.7624\n-1.0\n-25.07\n12.0876\n-1.0\n-24.34\nMay\n10.9715\n-0.2\n-21.83\n13.5888\n1.3\n-24.12\n11.6978\n3.3\n-21.82\nJune\n10.9972\n-0.2\n-22.02\n13.9879\n-2.9\n-26.28\n12.0073\n-2.6\n-23.83\nJuly\n11.0034\n-0.1\n-22.06\n14.1482\n-1.1\n-27.12\n12.1272\n-1.0\n-24.59\nAug\n11.0192\n-0.1\n-22.17\n13.9514\n1.4\n-26.09\n11.9473\n1.5\n-23.45\nSep\n11.1285\n-1.0\n-22.94\n13.5935\n2.6\n-24.14\n11.7774\n1.4\n-22.35\nOct\n11.4963\n-3.2\n-25.40\n13.9399\n-2.5\n-26.03\n12.1438\n-3.0\n-24.69\nNov\n11.6206\n-1.1\n-26.20\n14.6821\n-5.1\n-29.77\n12.6756\n-4.2\n-27.85\nDec\n11.8800\n-2.2\n-27.81\n15.1334\n-3.0\n-31.86\n13.1264\n-3.4\n-30.33\n2024\nJan\n12.0356\n-1.3\n-1.29\n15.3027\n-1.1\n-1.11\n13.0547\n0.5\n0.55\nFeb\n12.4642\n-3.4\n-4.69\n15.8022\n-3.2\n-4.23\n13.5234\n-3.5\n-2.94\nMar\n12.8770\n-3.2\n-7.74\n16.2617\n-2.8\n-6.94\n13.9031\n-2.7\n-5.59\nApr\n13.2739\n-3.0\n-10.50\n16.6243\n-2.2\n-8.97\n14.1900\n-2.0\n-7.50\nMay\n14.1301\n-6.1\n-15.92\n17.9996\n-7.6\n-15.92\n15.3345\n-7.5\n-14.40\nJune\n14.5860\n-3.1\n-18.55\n18.4375\n-2.4\n-17.92\n15.6270\n-1.9\n-16.00\nJuly\n14.9009\n-2.1\n-20.27\n19.1305\n-3.6\n-20.89\n16.1065\n-3.0\n-18.50\nAug\n15.1899\n-1.9\n-21.79\n19.9261\n-4.0\n-24.05\n16.7828\n-4.0\n-21.79\nSep\n15.8000\n-3.9\n-24.81\n21.1823\n-5.9\n-28.56\n17.6108\n-4.7\n-25.46\nOct\n16.3000\n-3.1\n-27.12\n20.9700\n1.0\n-27.83\n17.6992\n-0.5\n-25.84\nNov\n15.2700\n6.7\n-22.20\n19.3592\n8.3\n-21.83\n16.1291\n9.7\n-18.62\nDec\n14.7000\n3.9\n-19.18\n18.4008\n5.2\n-17.76\n15.2141\n6.0\n-13.72\n2025\nJan\n15.3001\n-3.9\n-3.92\n19.0003\n-3.2\n-3.16\n15.9012\n-4.3\n-4.32\nFeb\n15.5300\n-1.5\n-5.34\n19.5484\n-2.8\n-5.87\n16.1524\n-1.6\n-5.81\nMar\n15.5300\n0.0\n-5.34\n20.0951\n-2.7\n-8.43\n16.8068\n-3.9\n-9.48\nApr\n14.1500\n9.8\n3.89\n18.8769\n6.5\n-2.52\n16.0640\n4.6\n-5.29\nMay\n10.2800\n37.6\n43.00\n13.8529\n36.3\n32.83\n11.6675\n37.7\n30.40\nJune\n10.3100\n-0.3\n42.58\n14.1252\n-1.9\n30.27\n12.1138\n-3.7\n25.59\nMonth\n2021=100\nMonthly CHG(%)\nYear-to-Date (%)\nFXTWI\n TWI\nFXTWI\n TWI FXTWI\n TWI\n2024\nJan-24\n48.36\n52.70\n-1.15\n0.30\n-1.15\n0.30\nFeb-24\n46.71\n50.96\n-3.54\n-3.42\n-4.73\n-3.11\nMar-24\n45.22\n49.38\n-3.30\n-3.20\n-8.18\n-6.41\nApr-24\n43.91\n48.38\n-2.97\n-2.06\n-11.40\n-8.60\nMay-24\n41.18\n44.77\n-6.63\n-8.05\n-18.78\n-17.35\nJun-24\n39.94\n43.83\n-3.11\n-2.16\n-22.48\n-19.88\nJul-24\n39.05\n42.49\n-2.28\n-3.14\n-25.27\n-23.65\nAug-24\n38.23\n40.96\n-2.14\n-3.76\n-27.95\n-28.29\nSep-24\n36.72\n39.07\n-4.12\n-4.82\n-33.23\n-34.47\nOct-24\n35.68\n38.67\n-2.91\n-1.03\n-37.10\n-35.86\nNov-24\n38.18\n42.26\n6.55\n8.49\n-28.12\n-24.33\nDec-24\n39.74\n44.70\n3.93\n5.46\n-23.09\n-17.54\n2025\nJan-25\n38.19\n42.96\n-4.07\n-4.07\n-4.07\n-4.07\nFeb-25\n37.61\n42.23\n-1.54\n-1.73\n-5.67\n-5.87\nMar-25\n37.47\n40.78\n-0.38\n-3.54\n-6.07\n-9.61\nApr-25\n40.95\n43.06\n8.50\n5.28\n2.95\n-3.82\nMay-25\n56.35\n59.15\n27.33\n27.20\n29.47\n24.42\nJun-25\n55.99\n57.15\n-0.63\n-3.49\n29.03\n21.78\n \n7 \n \nPUBLIC \nTable 1.5: Real Bilateral Exchange Rate \n \nSource: Bank of Ghana Staff Calculations \n \nThe cedi appreciated by 23.2 percent, and 30.0 percent, in real trade weighted terms, and real forex \ntransaction weighted terms, on a year-to-date basis in June 2025. This compares with depreciations of \n8.4 percent, and 11.1 percent, respectively, in real trade weighted terms and forex transaction weighted \nterms for the same period in 2024. \n \n \nTable 1.6: Real Effective Exchange Rate for Major Trade Partners \n \nSource: Bank of Ghana Staff Calculations \n \n \n3.0 Global Economic Outlook and Risks \nThe global outlook is becoming increasingly challenging, amid substantial trade barriers. Headline \ninflation has remained stickier than anticipated in some countries. Financial conditions remain \nrestrictive, reflecting still high policy rates and long-term bond yields. Risks to the outlook are tilted to \nthe downside. Growth could be hit by further bilateral tariff actions and retaliatory actions. \nConsequently, rising trade costs may add to inflationary pressures. These pressures may force central \nbanks to maintain restrictive policy stances for a while. As a result, financial conditions may remain \ntight in the near term. \n \nRER Index (Jan.2021=100) MONTHLY CHANGE (Index) Year-to-Date (%)\nMonth\nEUR\nGBP\nUSD\nEUR\nGBP\nUSD\nEUR\nGBP\nUSD\n2024\nJan-24\n98.89\n92.57\n87.94\n3.02\n1.57\n0.14\n3.02\n1.57\n0.14\nFeb-24\n96.51\n90.72\n85.73\n-2.46\n-2.03\n-2.58\n0.63\n-0.43\n-2.44\nMar-24\n93.63\n88.07\n83.15\n-3.08\n-3.01\n-3.11\n-2.43\n-3.45\n-5.63\nApr-24\n93.00\n87.65\n81.79\n-0.68\n-0.59\n-1.66\n-3.13\n-4.06\n-7.38\nMay-24\n88.40\n82.92\n79.12\n-5.20\n-5.59\n-3.38\n-8.49\n-9.88\n-11.01\nJun-24\n89.04\n83.17\n78.84\n0.73\n0.30\n-0.34\n-7.70\n-9.54\n-11.39\nJul-24\n88.04\n81.90\n78.66\n-1.14\n-1.56\n-0.24\n-8.93\n-11.25\n-11.66\nAug-24\n83.90\n77.84\n76.56\n-4.93\n-5.21\n-2.74\n-14.30\n-17.05\n-14.71\nSep-24\n82.36\n75.56\n75.54\n-1.89\n-3.02\n-1.35\n-16.44\n-20.59\n-16.26\nOct-24\n82.09\n76.12\n73.76\n-0.33\n0.74\n-2.41\n-16.82\n-19.69\n-19.07\nNov-24\n92.79\n84.37\n80.80\n11.53\n9.77\n8.71\n-3.36\n-8.00\n-8.70\nDec-24\n99.88\n90.44\n85.41\n7.10\n6.72\n5.40\n3.98\n-0.74\n-2.82\n2025\nJan-25\n97.81\n89.38\n82.94\n-2.12\n-1.18\n-2.98\n-2.12\n-1.18\n-2.98\nFeb-25\n97.04\n87.64\n82.41\n-0.75\n-1.99\n-0.64\n-2.88\n-3.20\n-3.64\nMar-25\n92.78\n85.11\n82.42\n-4.64\n-2.97\n0.01\n-7.66\n-6.26\n-3.63\nApr-25\n97.47\n90.79\n90.92\n4.81\n6.25\n9.34\n-2.47\n0.39\n6.06\nMay-25\n134.99\n123.62\n125.81\n27.79\n26.55\n27.73\n26.01\n26.84\n32.11\nJun-25\n127.62\n118.89\n123.48\n-5.77\n-3.98\n-1.89\n21.74\n23.93\n30.83\nMonth\nINDEX (2021=100)\nMONTHLY CHG\nYear-to-Date (%)\nRFXTWI\nRTWI\nRFXTWI\nRTWI\nRFXTWI\nRTWI\n2024\nJan-24\n88.83\n96.79\n0.39\n2.51\n0.39\n2.51\nFeb-24\n86.63\n94.48\n-2.54\n-2.44\n-2.14\n0.13\nMar-24\n84.01\n91.66\n-3.12\n-3.07\n-5.33\n-2.94\nApr-24\n82.71\n90.91\n-1.56\n-0.83\n-6.98\n-3.80\nMay-24\n79.87\n86.61\n-3.56\n-4.96\n-10.79\n-8.95\nJun-24\n79.67\n87.09\n-0.25\n0.55\n-11.06\n-8.35\nJul-24\n79.40\n86.18\n-0.34\n-1.06\n-11.44\n-9.50\nAug-24\n77.13\n82.34\n-2.95\n-4.65\n-14.73\n-14.59\nSep-24\n76.04\n80.81\n-1.43\n-1.90\n-16.37\n-16.77\nOct-24\n74.41\n80.39\n-2.19\n-0.51\n-18.91\n-17.37\nNov-24\n81.73\n90.33\n8.95\n11.00\n-8.27\n-4.46\nDec-24\n86.54\n96.97\n5.56\n6.84\n-2.24\n2.69\n2025\nJan-25\n84.13\n94.93\n-2.87\n-2.15\n-2.87\n-2.15\nFeb-25\n83.56\n94.13\n-0.68\n-0.84\n-3.57\n-3.01\nMar-25\n83.23\n90.64\n-0.40\n-3.86\n-3.98\n-6.98\nApr-25\n91.40\n95.97\n8.94\n5.56\n5.31\n-1.04\nMay-25\n126.44\n132.70\n27.71\n27.68\n31.55\n26.93\nJun-25\n123.69\n126.28\n-2.22\n-5.09\n30.03\n23.21\nRTWI and FXRTWI\n \n8 \n \nPUBLIC \n2. External Sector Developments \n \n2.0 Highlights \nThe external sector maintained a strong performance in the first half of the year, posting a record \ncurrent account surplus of US$3.44 billion, driven by increased gold export earnings and improved \ncocoa receipts. The strong current account surplus, coupled with the surplus in the capital account, \ncontributed to a significant build-up in international reserves, reaching a gross level of US$11.12 \nbillion, equivalent to 4.8 months of import cover, in the first half of 2025. \n \n \n2.1 Commodity Price Trends \nOn the international commodities market, prices of Ghana’s major export commodities traded mixed. \nCocoa futures averaged US$9,155.10 per tonne in June 2025, recording a 5.4 percent fall compared to \nthe previous month, driven mainly by expectation of larger harvest in the West Africa cocoa growing \nregion. Compared with the same period last year, cocoa prices recorded a marginal increase of 1.5 \npercent primarily due to the adverse weather conditions last year which have offset the softening in \nprices from the improved production this year. \n \nOn the other hand, crude oil prices increased by 9.6 percent to close at an average price of US$69.84 \nper barrel in June 2025, mainly due to fears of curtailed oil supplies from the heightened security risks \nemanating from tensions between Israel and Iran. Compared to a year earlier, crude oil prices slumped \nby 15.9 percent, mainly due to weak demand from China. \n \nGold prices continued to soar, reaching a record average price of US$3,351.59 per fine ounce in June \n2025, reflecting an increase of 1.9 percent over the previous month. The surge in gold prices was driven \nby the geopolitical risks and the economic uncertainty associated with the ongoing trade war, which \nfueled investor demand for safe-haven assets. Relative to the same period last year, gold prices spiked \nby 44.1 percent in June 2025, from US$2,325.34 in June 2024. \n \n2.1.1 Commodity Price Index \nThe overall weighted average price index of the three major export commodities of Ghana (cocoa, gold, \nand crude oil) increased marginally in June 2025 to 235.85, from 235.11 in the previous month, \nrepresenting an uptick of 0.3 percent. The increase was on account of increases in both the gold and \ncrude oil sub-indices, which went up by 1.9 percent and 9.7 percent, respectively, while the cocoa sub-\nindex softened by 5.4 percent during the period under review. On a year-on-year basis, the composite \ncommodity price index increased by 19.9 percent, stemming from the strong 44.1 percent increase in \nthe gold price sub-index and a 1.5 percent increase in the cocoa sub-index. The crude oil price sub-\nindex, however, showed a decline of 15.9 percent during the review period. \n \n \n \n \n \n \n \n \n \n \n9 \n \nPUBLIC \n \n \n2.2 Trade Balance \nTrade balance for the first half of the year showed a significant surplus of US$5.57 billion, representing \na sharp increase over the US$1.37 billion recorded in the comparative period in 2024. The improved \ntrade surplus resulted from a larger increase in exports than imports. \n \nThe value of exports surged to US$13.80 billion in June 2025, from US$8.87 billion in the same period \nin 2024, driven mainly by gold exports and supported by cocoa exports. The value of gold exports went \nup by 80.2 percent to US$8.39 billion, from US$4.66 billion in June 2024, on account of increases in \nboth the volume and price of gold. The volume of gold exports increased by 26.3 percent to 2.81 million \nfine ounces, on the back of increased output from the responsible and regulated small-scale gold mines \nfollowing the operationalization of GoldBod, together with the sustained output of the large-scale \nmines. The average price for gold also increased by 42.6 percent to US$2,980.90 per fine ounce in June \n2025, compared to US$2,090.40 in June 2024, largely due to global economic uncertainty and \ngeopolitical tensions. Receipts from cocoa exports, both beans and products, increased sharply to \nUS$2.17 billion during the first half of 2025, from US$0.76 billion in the same period in 2024, driven \nby both higher volumes of exports and prices. Improved weather conditions supported the increased \ncocoa production during the period. \n \nCrude oil exports, however, dropped by 31.1 percent to US$1.36 billion in the first half of the year due \nto reduced volumes of exports and decline in prices. The volume of crude oil exports fell by 20.5 percent \nto 18.94 million barrels as of June 2025, from 23.83 million barrels during the same period last year. \nThis was partly on account of a shut down in the Jubilee field for routine maintenance works during the \nfirst quarter of the year. The average price of crude oil for the period showed a decline of 13.3 percent \nto US$72.1 per barrel, from US$83.1 per barrel in June 2024. Prices were low due to weak global \ndemand, particularly from China, and OPEC’s decision to ramp up production. Other exports, including \nSource: Reuters\nSource: Reuters\nSource: Reuters\nSource: BoG Staff Compilation\n \n10 \n \nPUBLIC \nnon-traditional exports, increased by 27.9 percent to US$1.88 billion, from US$1.47 billion during the \nsame review period. \n \nTotal imports, on the other hand, recorded an increase of 9.7 percent to US$8.23 billion during the first \nhalf of 2025, from US$7.50 billion in the corresponding period of 2024, on account of increases in both \noil and non-oil imports. Oil imports increased by 6.6 percent to US$2.59 billion in June 2025 from \nUS$2.42 billion in June 2024, while non-oil imports increased to US$5.64 billion from US$5.07 billion \nduring the same reference period. \n \n2.3 Current Account \nThe current account recorded an impressive surplus of US$3.44 billion in the first half of 2025, \nrepresenting a sharp increase over the surplus of US$283.11 million recorded during the same period \nin 2024. The higher current account surplus came on the back of higher cocoa and gold receipts. Net \npayment for services, however, increased to US$2.64 billion, driven largely by freight and insurance, \ntrade-related services, financial services and travel. Income payments to non-residents amounted to \nUS$2.38 billion on a net basis, driven by private sector payments and interest payments on government \nexternal debt. Private remittance flows increased by 8.2 percent to US$3.93 billion in June 2025 from \nUS$3.63 billion during the same time in 2024. \n \n2.4 Capital and Financial Accounts \nThe capital account recorded net transfers of US$50.5 million, reflecting mainly project grants. The \nsum of the surpluses in the current and capital accounts amounted to US$3.49 billion, putting the \ncountry in a net lending position with the rest of the world. Consequently, there was net acquisition of \nfinancial assets in the financial account amounting to US$3.79 billion, significantly higher than the \nUS$438.4 million recorded in the same period of 2024. Out of this, other investments were US$2.4 \nbillion, largely driven by increased currency and deposits in the nostro accounts of commercial banks \nas well as trade credit and advances. The economy attracted net direct investments of US$921.1 million \nin June 2025 from US$828.2 million in June 2024 and lower net portfolio inflows of US$55.2 million, \nfrom US$546.2 million during the same review period. Reserve assets of the Bank of Ghana improved \nsignificantly to US$2.2 billion from US$588.5 million. \n \n2.5 International Reserves \nAt the end of June 2025, the stock of Gross International Reserves (GIR) stood at US$11.12 billion, \nenough to provide cover for 4.8 months of import of goods and services. This compares with the end-\nDecember 2024 GIR of US$8.98 billion (equivalent to 4 months of imports cover). The program Net \nInternational Reserves (NIR) recorded a build-up of US$1.65 billion to US$3.53 billion in June 2025, \nagainst a target buildup of US$493 million for the same period. \n \n2.6 External Sector Outlook \nOverall, the external sector outlook remains broadly positive, notwithstanding the increasingly \nchallenging global economy and geopolitical tensions. The prices of Ghana’s major export commodities \nprices are forecast to remain largely favourable. Gold prices are expected to remain above $3,000 per \nfine ounce in the second half of the year, while the cocoa market remains upbeat about a boost in \nGhana’s crop in the upcoming season if weather patterns remain favourable. Crude oil prices are \nprojected to average lower than $70 per barrel, on the back of low demand, although Brent may find \nsupport from risk premia of the continuous geopolitical conflicts. These forecasts will bode well for the \nperformance of the external sector in the next half of the year. The robust external sector outlook \n \n11 \n \nPUBLIC \ncoupled with the improved macroeconomic environment are expected to provide adequate support to \nsustain the macroeconomic gains and keep the external sector on a strong footing moving forward. \n \nTable 2.1: Trade Balance (US$ million) \n \nSource: Bank of Ghana \n \n Table 1\n2023\n2024\n2025\nAbs Y/Y\nRel Y/Y\n Jan - Jun \n Jan - Jun \n Jan - Jun \nChg\nChg\nTrade Balance\n1,307.0\n1,367.9\n5,573.0\n4,205.1\n307.4\nTrade Bal (% GDP)\n1.6\n1.6\n6.4\nTotal Exports\n7,845.4\n8,868.7\n13,798.9\n4,930.2\n55.6\nGold ( $'M)\n3,149.6\n4,655.3\n8,387.4\n3,732.1\n80.2\n Volume (fine ounces)\n1,716,175.6\n2,227,015.6\n2,813,741.0\n586,725.3\n26.3\n Unit Price ($/fine ounce)\n1,835.2\n2,090.4\n2,980.9\n890.5\n42.6\nCocoa Beans ( $'M)\n1,031.6\n406.2\n1,297.4\n891.2\n219.4\n Volume (tonnes)\n420,734.7\n150,747.0\n244,156.7\n93,409.7\n62.0\n Unit Price ($/tonne)\n2,451.9\n2,694.7\n5,313.9\n2,619.2\n97.2\nCocoa Products ( $'M)\n421.9\n356.3\n870.1\n513.8\n144.2\n Volume (tonnes)\n129,309.5\n90,245.9\n118,317.4\n28,071.6\n31.1\n Unit Price ($/tonne)\n3,262.8\n3,947.9\n7,353.6\n3,405.7\n86.3\nCrude Oil ( $'M)\n1,659.5\n1,981.2\n1,364.7\n-616.5\n-31.1\n Volume (barrels)\n20,960,643.0\n23,827,026.0\n18,938,925.3\n-4,888,100.7\n-20.5\n Unit Price ($/bbl)\n79.2\n83.1\n72.1\n-11.1\n-13.3\nOther Exports\n1,582.7\n1,469.7\n1,879.3\n409.6\n27.9\no/w: Non-Tradional Exports\n1,210.9\n1,109.5\n1,473.2\n363.6\n32.8\nTotal Import\n6,538.4\n7,500.8\n8,225.9\n725.1\n9.7\n Non-Oil\n4,369.9\n5,074.2\n5,640.3\n566.1\n11.2\n Oil and Gas\n2,168.6\n2,426.6\n2,585.6\n159.0\n6.6\n of which: Products\n1,949.8\n2,094.7\n2,416.3\n321.6\n15.4\nGas\n109.0\n111.8\n120.8\n9.0\n8.1\nCrude Oil \n109.8\n220.1\n48.4\n-171.6\n-78.0\n \n12 \n \nPUBLIC \n3. Real Sector Developments \n \n3.0 Highlights \nGhana's economy demonstrated robust growth in the first quarter of 2025. Beyond the first quarter, the \nlatest high frequency real sector indicators point to a sustained pickup in economic activity in May \n2025. Consumer and business confidence also increased significantly in line with improving \nmacroeconomic conditions. \n \n3.1 Economic Growth \nThe latest data from the Ghana Statistical Service showed that real GDP grew by 5.3 percent, compared \nwith 4.9 percent recorded in the corresponding quarter of 2024. A key factor of the strong growth \noutturn was the non-oil sector. Non-oil GDP growth was 6.8 percent, compared with 4.3 percent in the \nsame period of 2024. This indicates strong underlying momentum in the broader economy and a \ndiversification away from reliance on oil. The observed growth outturn was driven by the agricultural \nand services sectors, which grew by 6.6 percent, and 5.9 percent, respectively. \n \nFigure 3.1: Oil and Non-oil GDP Growth \n \nSource: GSS \n \n3.2 Trends in Real Sector Indicators \n \nConsumer Spending \nConsumer spending, proxied by domestic VAT collections and retail sales, posted a positive \nperformance in May 2025, compared with the corresponding period in 2024. Domestic VAT collections \nincreased by 30.1 percent on a year-on-year basis to GH¢1,772.60 million, from GH¢1,362.13 million. \nCumulatively, total domestic VAT for the first five months of 2025 went up by 33.6 percent to \nGH¢8,313.95 million, compared with GH¢6,221.21 million for the corresponding period of last year. \n \nRetail sales increased by 38.6 percent (year-on-year) to GH¢277.62 million in May 2025, from \nGH¢200.27 million recorded in the same period in 2024. On a month-on-month basis, retail sales \nimproved by 4.6 percent in May 2025, from GH¢265.46 million in the preceding month. In cumulative \nterms, retail sales for the first five months of 2025 went up by 35.7 percent. \n \n \n \n \n13 \n \nPUBLIC \nManufacturing Activities \nActivities in the manufacturing sub-sector, gauged by trends in the collection of direct taxes and private \nsector workers’ contributions to the Social Security and National Insurance Trust (SSNIT) Pension \nScheme (Tier-1), improved in May 2025. Total direct taxes collected increased by 34.0 percent (year-\non-year) to GH¢5,503.67 million in May 2025, relative to GH¢4,107.22 million recorded in a similar \nperiod in 2024. Cumulatively, total direct taxes collected for the first five months of 2025 went up by \n47.7 percent to GH¢32,772.67 million, from GH¢22,191.12 million for the same period in 2024. In \nterms of contributions of the various sub-tax categories, income tax (PAYE and self-employed) \naccounted for 49.4 percent, corporate tax accounted for 34.5 percent, while “Other Tax Sources” \ncontributed 16.1 percent. \n \nTotal private sector workers’ contribution to the SSNIT Pension Scheme (Tier-1) increased by 10.7 \npercent in year-on-year terms to GH¢521.33 million in May 2025, from GH¢470.92 million collected \nduring the corresponding period in 2024. Cumulatively, for the first five months of 2025, the \ncontribution grew by 24.6 percent to GH¢2,458.61 million, relative to GH¢1,973.34 million recorded \nin the same period in 2024. \n \nConstruction Sector Activities \nActivity in the construction sub-sector, proxied by the volume of cement sales, improved by 8.5 percent \n(year-on-year) in May 2025 to 255,063.29 tonnes, up from 235,050.55 tonnes recorded a year ago. \nHowever, on a month-on-month basis, total cement sales dipped by 3.2 percent in May 2025 compared \nwith the 263,623.46 tonnes recorded in April 2025. Cumulatively, cement sales for the first five months \nof 2025 improved by 8.2 percent to 1,225,395.86 tonnes, from 1,132,654.32 tonnes for the same period \nof 2024. The relative improvement in total cement sales, year-on-year, was due to an uptick in \nconstruction activities during the review period. \n \nVehicle Registration \nTransport sector activities, gauged by new vehicle registrations by the Driver and Vehicle Licensing \nAuthority (DVLA), improved by 24.5 percent to 20,202 in May 2025, from 16,220 vehicles registered \nduring the corresponding period of 2024. Cumulatively, vehicles registered by the DVLA within the \nfirst five months of 2025 increased by 29.4 percent to 108,542 from 83,878 recorded a year ago. \n \nIndustrial Consumption of Electricity \nIndustrial consumption of electricity declined by 3.6 percent in May 2025 to 285.05 gigawatts, as \nagainst 295.71 gigawatts recorded for the corresponding period in 2024. In cumulative terms, electricity \nconsumed by industries for the first five months of 2025 remained largely unchanged at 1,430.96 \ngigawatts from 1,429.28 gigawatts for the corresponding period a year ago. \n \nPassenger Arrivals \nPassenger arrivals improved by 10.7 percent in year-on-year terms to 108,665 in May 2025, up from \n98,205 arrivals recorded a year ago. Similarly, compared to April 2025, passenger arrivals went up by \n11.0 percent. Cumulatively, for the first five months of 2025, there were 501,961 arrivals recorded at \nthe international airport and the land borders, compared with 497,048 for the corresponding period in \n2024, representing a marginal growth of 1.0 percent. \n \n \n \n \n14 \n \nPUBLIC \nPorts and Harbours Activity \nInternational trade at the country’s two main harbours (Tema and Takoradi), as measured by laden \ncontainer traffic for inbound and outbound containers, improved during the period under review. Total \ncontainer traffic increased by 32.6 percent, year-on-year, to 79,059 in May 2025, up from 59,639 for a \nsimilar period in 2024. In cumulative terms, total container traffic for the first five months of 2025 went \nup by 23.5 percent to 351,690 compared with 284,745 for the corresponding period of last year. \n \n \n3.3 Labour Market Activity \n \nPrivate Sector Pension Contributors \nTotal number of private sector SSNIT contributors, which partially gauges employment conditions, \nimproved marginally by 2.1 percent to 1,065,925 in May 2025, compared with 1,044,111 for the same \nperiod in 2024. On a month-on-month basis, total number of private sector SSNIT contributors \nremained largely unchanged from the 1,067,531 individuals recorded in April 2025. \n \nAdvertised Jobs \nThe number of jobs advertised in selected print and online media, which partially gauges labour demand \nin the economy, decreased in June 2025 relative to what was observed in the corresponding period a \nyear ago. In total, 2,502 job adverts were recorded as compared with 2,968 for the same period in 2024, \nindicating a decline of 15.7 percent (year-on-year). Similarly, on a month-on-month basis, the number \nof job vacancies in June 2025 dipped by 18.4 percent from the 3,066 jobs advertised in May 2025. \nCumulatively, for the first half of 2025, the total number of advertised jobs went up by 7.7 percent to \n18,604 from 17,278 recorded during the same period in 2024. \n \n3.4 Composite Index of Economic Activity \nThe Bank’s real Composite Index of Economic Activity (CIEA) recorded an annual growth of 4.4 \npercent in May 2025, compared to a growth of 3.4 percent for the corresponding period of 2024. \nInternational trade activities, consumption of goods and services by households and firms, construction \nactivities and tourist arrivals contributed to the improvement in economic activity during the period. \n \n3.5 Consumer and Business Surveys \nThe latest confidence surveys conducted in June 2025 showed significant improvement in both \nconsumer and business confidence. The Consumer Confidence Index markedly improved to 119.2 in \nJune 2025, the highest recorded level of confidence, from 103.6 in April 2025. This was on account of \nsubstantial easing of inflationary pressures, which in turn led to strong optimism about future economic \nconditions. The Business Confidence Index also increased to 105.5 from 102.2 in the same comparative \nperiod as firms met their short-term targets and expressed positive sentiments about company and \nindustry prospects, in line with improving macroeconomic conditions. Results from the confidence \nsurveys were aligned with the observed trend in Ghana’s Purchasing Managers’ Index (PMI), which \nalso signalled an improvement in business conditions in June 2025, albeit at a slower pace than in May \n2025. The PMI remained above the 50.0 no-change mark at 51.3 in June 2025, down from 53.6 in the \nprevious month. \n \n \n \n \n \n15 \n \nPUBLIC \n \nFigure 3.1: High Frequency Economic Indicators \n \n \n \nSources: Bank of Ghana, Various Stakeholders\n...Domestic VAT collections and retail sales improved in May 2025 compared \nto April 2025...\n...Labour hiring conditions, proxied by the number of private sector \nworkers contributing to SSNIT, remained largely unchanged...\n...Labour market conditions improved in May 2025 relative to April 2025...\n...Construction activities, proxied by cement sales, declined in May 2025 \ncompared to April 2025...\n...Port activity increased in May 2025 compared to the previous month...\n...Tourist arrivals increased in May 2025 compared to April 2025... \n150\n170\n190\n210\n230\n250\n270\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nCement Sales\n35\n40\n45\n50\n55\n60\n65\n70\n75\n80\n85\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nThousands\nPort Activity (Container Traffic)\n0\n20\n40\n60\n80\n100\n120\n140\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nThousands\nTourist Arrivals\n600\n700\n800\n900\n1000\n1100\n1200\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nThousands\nNumber of Private Sector Contributors to SSNIT\nThousands, tons\n 200.00\n 400.00\n 600.00\n 800.00\n 1,000.00\n 1,200.00\n 1,400.00\n 1,600.00\n 1,800.00\n 2,000.00\n 2,200.00\n 40.00\n 90.00\n 140.00\n 190.00\n 240.00\n 290.00\n 340.00\n 390.00\n 440.00\n 490.00\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nMillion, GHC\nMillion, GHC\nRetail Sales and Domestic VAT collection\nRetail Sales, Left\nDomestic VAT\n100\n150\n200\n250\n300\n350\n400\n450\n500\n550\n600\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nMillion GHC\nSSNIT Contributions from Private Sector\nPanel 1:\nGhana's Leading Indicators of Economic Activity\n \n16 \n \nPUBLIC \n \n \n \n \nSource: Bank of Ghana, Various Stakeholders\n...Commercial banks' credit to the private sector declined in May 2025 relative \nto the pevious month...\n...Industrial activity, proxied by industrial consumption of electricity, \nremained largely unchanged...\n...Exports and Imports increased in May 2025 compared to April 2025...\n600\n800\n1000\n1200\n1400\n1600\n1800\n2000\n2200\n2400\n2600\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nMillion, USD\nImports\nExports\nImports and Exports\n220\n240\n260\n280\n300\n320\n340\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nGWh\nIndustrial Consumption of Electricity\n30\n40\n50\n60\n70\n80\n90\n100\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nBillion, GHC\nDMB's Credit to Private Sector\n-6\n-4\n-2\n0\n2\n4\n6\n8\n10\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nPercent, y-o-y\nReal CIEA\n-8\n-4\n0\n4\n8\n12\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nPercent, y-o-y\nCement Sales (Tons)\nPort Activity\nSSNIT Contr by Pte Sector\nExports\nIndustrial Cons of Electricity\nDMB's Credit to Pte Sector\nImports\nTourist Arrivals\nDom VAT\nReal CIEA growth (%)\nContribution to Real CIEA growth\n500\n1000\n1500\n2000\n2500\n3000\n3500\n4000\n4500\n5000\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nJun-25\nJob Adverts\nPanel 2:\nGhana's Leading Indicators of Economic Activity\n...On a year-on-year basis, the real CIEA grew by 4.4 percent in May 2025, \ncompared with a growth of 3.4 percent in May 2024...\n...The growth in the real CIEA was mainly driven by a pick-up in Port Activity, \nExports, Imports, Domestic VAT, Cement Sales and Tourist Arrivals...\n...Demand for labour, proxied by the number of job adverts (in print and \nonline media), decreased in June 2025...\nNumber of advertised jobs\n \n17 \n \nPUBLIC \n \n \n \n \n \n \nSource: Bank of Ghana, Various Stakeholders\n...Business Confidence improved as firms met their short-term targets and \nexpressed positive sentiments about company and industry prospects in line \nwith improving macroeconomic conditions...\n...Vehicle registration increased in May 2025 compared to the month before...\n...Consumer Confidence improved on account of easing inflationary \npressures and optimism about future economic conditions...\n0\n5000\n10000\n15000\n20000\n25000\n30000\n35000\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nVehicle Registration\n105.5\n40\n50\n60\n70\n80\n90\n100\n110\n120\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nJun-25\nIndex\nBusiness Confidence Index\n119.2\n40\n50\n60\n70\n80\n90\n100\n110\n120\n130\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nJun-25\nIndex\nConsumer Confidence Index\n0\n2\n4\n6\n8\n10\n12\n14\n16\nMay-23\nJul-23\nSep-23\nNov-23\nJan-24\nMar-24\nMay-24\nJul-24\nSep-24\nNov-24\nJan-25\nMar-25\nMay-25\nBillion, GHC\nDomestic taxes, Direct\n...Domestic tax collection decreased in May 2025 compared to April 2025...\n2.4 \n6.6 \n6.7 \n3.4 \n4.7 \n5.9 \n-8.0\n-6.0\n-4.0\n-2.0\n0.0\n2.0\n4.0\n6.0\n8.0\n10.0\n12.0\n14.0\n2023Q3\n2023Q4\n2024Q1\n2024Q2\n2024Q3\n2024Q4\n2025Q1\nPercent\nAgricuture\nIndustry\nServices\nAnnual sectoral real GDP growth rate, y/y \n4.9\n5.3\n4.3\n6.8\n-6.0\n-4.0\n-2.0\n0.0\n2.0\n4.0\n6.0\n8.0\n10.0\n2023Q3\n2023Q4\n2024Q1\n2024Q2\n2024Q3\n2024Q4\n2025Q1\nPercent\nOil GDP\nNon-Oil GDP\nAnnual real GDP growth rate, y/y \n...Real Oil and Non-Oil GDP grew by 5.3 percent and 6.8 percent respectively \nin 2025Q1, compared with growth rates of 4.9 percent and 4.3 percent \nrespectively in 2024Q1... \n...The Agriculture and Services sectors drove growth in 2025Q1, recording growth \nrates of 6.6 percent and 5.9 percent respectively, relative to growth rates of 2.4 \npercent and 4.7 percent in 2024Q1 respectively...\nPanel 3:\nGhana's Leading Indicators of Economic Activity\nNumber of vehicles\n \n18 \n \nPUBLIC \n4. Monetary and Financial Developments \n \n4.0 Highlights \nGrowth in monetary aggregates remained subdued during the first half of the year, reflecting tight \nmonetary conditions consistent with policy efforts to sustain the disinflation process. There was \nsignificant build-up in Net Foreign Assets (NFA), reflecting inflows from the domestic gold purchase \nprogramme, remittances, forex purchases from mining firms, and multilateral disbursements. This \nliquidity build-up was, however, contained through sterilization efforts during the period. Credit slowed \nduring the period under review, reflecting, among others, banks preference for Bank of Ghana bills, \nwhich had higher returns. Money market rates broadly trended downwards at the short-end of the \nprimary market, on year-on-year basis, while interest rates on longer-dated instruments remained \nstable. The GSE Composite Index (GSE-CI) recorded significant gains, year-on-year, in June 2025 \nrelative to the corresponding period last year. The impressive performance of the GSE-CI was \nunderpinned by improved investor appetite, driven by significant recovery in the profitability of listed \nfinancial institutions and improved liquidity on that segment of the market. \n \n4.1 Developments in Monetary Aggregates \n \nMoney Supply \nDevelopments in monetary aggregates for June 2025 showed a deceleration in the pace of growth in \nbroad money supply (M2+), driven by contractions in both the Net Domestic Assets (NDA) and the Net \nForeign Assets (NFA). Annual growth in M2+ declined to 15.64 percent in June 2025, relative to 34.07 \npercent in the corresponding period of 2024. The contribution of NFA to the growth in M2+ decreased \nto 9.50 percent from 23.11 percent, mainly due to the appreciation of the domestic currency. Similarly, \nthe contribution of NDA to the growth in M2+ decreased to 6.14 percent from 10.96 percent over the \nsame comparative period, induced by the tight monetary policy stance and effective liquidity \nmanagement. \n \n \n \nSources: Bank of Ghana \n \n \n \n-40.00\n-20.00\n0.00\n20.00\n40.00\n60.00\n80.00\nper cent\nFigure 4.1a: M2+ Growth and its Sources (% \ncontributions)\nNet Foreign Assets\nNDA\nTotal Liquidity (M2+)\n-40.00\n-20.00\n0.00\n20.00\n40.00\n60.00\n80.00\n100.00\nper cent\nFigure 4.1b: Banking Sector NDA and its Sources \n(% contributions)\n NCG\n Claims on Priv. Sect. (Incl.\nPE's)\n BOG OMO Steril. Acc.\n OIN\n \n19 \n \nPUBLIC \n \n \nSource: Bank of Ghana \n \nAccordingly, the decline in the contribution of the NDA to the growth of M2+ was mainly driven by \ncontractions in the Net Claims on Government (NCG) and increased sterilization through the issuance \nof BOG bills. This was moderated by increases in Claims on Private and Public Sector and expansion \nin the Other Items (Net) (OIN). \n \nAnalysis of the components of M2+ showed that the moderation in the growth in M2+ reflected in \ndecreased growth in demand deposits, time deposits, and foreign currency deposits in June 2025 relative \nto same period in 2024. Growth in saving deposits and currency with the public, however, increased \nsignificantly over the same comparative period . \n \n4.2 Reserve Money \nGrowth in Reserve Money (RM) moderated significantly in June 2025, mainly induced by a contraction \nin the NDA, reflecting increased sterilization and decline in net claims on Government. Growth in the \nNFA also declined considerably, largely on the back of delayed inflows from the Gold for Reserve \n(G4R) Programme. Annual growth in reserve money declined to 1.95 percent in June 2025, from a \ngrowth of 77.37 percent recorded in the corresponding period of 2024. \n \nThe NDA of the Central Bank declined due to a contraction in Net Claims on Government (NCG) and \nClaims on Deposit Money Banks (DMBs), as well as increased Open Market Operations (OMO). The \ncontribution of NDA to the growth in RM decreased to negative 29.32 percent in June 2025 compared \nto 18.33 percent recorded in June 2024. Similarly, the contribution of the NFA to the growth in RM \ndecreased to 31.27 percent, relative to 59.04 percent over the same comparative period. \n \n-2.00\n8.00\n18.00\n28.00\n38.00\n48.00\n58.00\nper cent\nFigure 4.2: M2+ growth and its component (% contributions)\nCurr.\nDem. Dep\nSav and Time Dep.\nFCDs\nTotal Liquidity (M2+)\n \n20 \n \nPUBLIC \n \n \nSource: Bank of Ghana \n \n \n4.3 Deposit Money Banks Credit Developments \nDeposit Money Banks’ (DMBs’) total credit to the private sector and public institutions dipped to \nGH¢4,685.30 million (5.55%) in June 2025 from GH¢11,353.44 million (15.53%) recorded in June \n2024. The decrease in credit flows was largely due a decline in credit to the public sector. Credit flows \nto the private sector declined to GH¢6,690.70 million (8.57%) in June 2025 from GH¢11,690.77 million \n(17.61%) recorded in the corresponding period of 2024. The decreased flow of credit to the private \nsector was on the back of a shift to the purchase of both Government and Bank of Ghana securities by \nthe banks. \nPrivate sector credit accounted for 95.05 percent of the flow in total outstanding credit in June 2025, \nrelative to 92.40 percent recorded in the corresponding period of 2024. The top five sectors with \nsignificant share of credit flows are: services (76.53%); commerce and finance (17.65%); electricity, \ngas and water (6.52%); manufacturing (4.55%); and agriculture, forestry and fisheries (4.12%) (Chart \n4a). Outstanding credit to private sector at the end of June 2025 was GH¢84,752.43 million, compared \nwith GH¢78,061.73 million recorded in June 2024. \nIn real terms, however, private sector credit contracted by 4.48 percent relative to 4.18 percent \ncontraction, over the same comparative period. Growth in real private sector credit declined slightly \nbelow its trend during the review period. \n \n \n \n \n \n-60.0\n-40.0\n-20.0\n0.0\n20.0\n40.0\n60.0\n80.0\n100.0\n120.0\nPer cent\nFigure 4.3a: RM Growth and Contribution from NFA \nand NDA\nNDA\nNFA\n-100.0\n-50.0\n0.0\n50.0\n100.0\n150.0\n200.0\nFigure 4.3b: BOG NDA and Its Sources (% \nContributions)\nNCG\nNC_DMBs\nOMO Ster. A/c\nOIN\nNDA\n \n21 \n \nPUBLIC \n \n \nSource: Bank of Ghana \n \n4.4 Money Market Developments \nDevelopments in interest rates broadly showed downward trends at the short end of the primary market \non year-on-year basis, consistent with Government’s continued efforts to bring down rates in \npreparation for issuances on the bonds market. Interest rates on longer-dated instruments, however, \nremained stable. The 91-day, 182-day and 364-day Treasury bill rates decreased to 14.74 percent, 15.34 \npercent, and 15.76 percent, respectively, in June 2025, from 24.91 percent, 26.84 percent and 27.83 \npercent, respectively, in the corresponding period of 2024. Rates on the 2-year, 3-year, 5-year, 6-year, \n7-year, 10-year, 15-year, and 20-year bonds remained broadly stable due to the non-issuance of these \ninstruments during the review period. \n \nThe Interbank Weighted Average Rate (IWAR) decreased to 27.02 percent in June 2025 from 28.80 \npercent in June 2024. Similarly, the average lending rates of banks declined to 27.00 percent in June \n2025 from 31.10 percent, recorded in the corresponding period of 2024, reflecting the pass-through \neffect of declines in rates on the primary market. \n \n \n \nSource: Bank of Ghana \nFigure 4.4a: Sectoral Shares in Credit to the \nPrivate sector (%)\nJun-24\nJun-25\n-32.00\n-27.00\n-22.00\n-17.00\n-12.00\n-7.00\n-2.00\n3.00\n8.00\n13.00\nFigure 4.4b: Growth in Real Private Sector Credit \n(RGPSC) vs. Trend\nRGPSC\nTrend\n7.00\n12.00\n17.00\n22.00\n27.00\n32.00\n37.00\n42.00\n47.00\n52.00\nFigure 4.5a: MPR, Interbank, T-bill Rates and \nInflation \nMPR\n 91-Day T-bill\nrate\n Inter-Bank\nrate\nInflation\n10.00\n15.00\n20.00\n25.00\n30.00\n35.00\nFigure 4.5b: Yield Curve (YOY) \nJun-24\nJun-25\n \n22 \n \nPUBLIC \n \n \nSource: Bank of Ghana \n \n \n4.5 Stock Market Developments \nThe Ghana Stock Exchange Composite Index (GSE-CI) increased to 6248.48 points in June 2025 from \n3829.61 points recorded in the corresponding period of 2024. This translates into a year-on-year gain \nof 63.16 percent in June 2025 compared to a growth of 36.38 percent in June 2024. The robust \nperformance of the GSE-CI is underpinned by improved investor appetite, driven by significant \nrecovery in the profitability of listed financial institutions and improved liquidity on that segment of the \nmarket. The GSE-CI has been further boosted by the limited investment options on the domestic \nmarkets on account of the Domestic Debt Exchange Programme (DDEP). The main sectors that \ncontributed to the gains recorded by the GSE-CI were the ETFund, distribution, agriculture, and finance \nsectors. \n \nThe GSE-Financial Stocks Index (GSE-FSI) closed at 3376.01 points, reflecting a gain of 59.62 percent \ncompared to a gain of 25.01 percent, over the same comparative period. The gain in the GSE-FSI was \nmainly on the back of improved profitability of listed financial institutions, following initial losses \ninduced by the impact of the DDEP. \n \nTotal market capitalisation of the GSE at the end of June 2025 was GH¢137.29 billion representing a \nyear-on-year growth of 61.33 percent (GH¢52.19 billion), compared with a growth of 21.15 percent \n(GH¢14.86 billion) in June 2024. The increase in market capitalization was mainly driven by \nappreciation in share prices, underpinned by renewed investor confidence, particularly in the ETFund, \ndistribution, agriculture, and finance sectors. \n \nTable 4.1: Performance of Ghana Stock Exchange \n \nSource: Ghana Stock Exchange and Bank of Ghana Staff Calculations \n-30.00\n-20.00\n-10.00\n0.00\n10.00\n20.00\n30.00\n40.00\n50.00\npercent\nFigure 4.6: Real Interest Rates and Inflation\nReal MPR\nReal 91 Day T-bill Rate\nReal Interbank Rate\nReal Lending Rate\nReal Deposit Rate\n \n23 \n \nPUBLIC \n \n \n \nSource: Bank of Ghana \n \n \n4.6 Conclusion \nGrowth in monetary aggregates was largely constrained in the first half of the year, underpinned by the \ntight monetary policy stance and effective liquidity management. Growth in reserve money moderated \nsignificantly in June 2025, mainly induced by a contraction in the NDA, reflecting increased \nsterilization. Annual growth in credit to the private sector decreased in nominal terms, due to a shift in \nbanks preference to investments in Government and Bank of Ghana securities. In real terms credit to \nprivate sector contracted marginally. \n \nMoney market rates broadly trended downwards at the short-end of the primary market, on year-on-\nyear basis in preparation for future bond issuances; interest rates on longer-dated instruments, however, \nremained stable. On the interbank market, the Interbank Weighted Average Rate (IWAR) decreased, \ntrading on the floor of the policy corridor. Similarly, the average lending rates of banks decreased, \nreflecting pass-through effect of declines in the Government’s short-term rates. \n \nThe GSE Composite Index (GSE-CI) recorded increased year-on-year gain in June 2025 relative to the \ncorresponding period last year. The performance of the index was underpinned by improved investor \nappetite, driven by significant recovery in the profitability of listed financial institutions and improved \nliquidity on that segment of the market. \n \n \n \n \n1900\n2400\n2900\n3400\n3900\n4400\n4900\n5400\n5900\n6400\n6900\nFigure 4.7a: GSE Composite Index\n2023\n2024\n2025\n1600\n1800\n2000\n2200\n2400\n2600\n2800\n3000\n3200\n3400\n3600\nFigure 4.7b: GSE Financial Stocks Index\n2023\n2024\n2025\n \n24 \n \nPUBLIC \n5. Banking Sector Developments \n \n5.0 Highlights \nThe banking sector posted a strong performance during the first six months of 2025, recording higher \nprofit than a year ago, on the back of growth in total assets and deposits. The Financial Soundness \nIndicators (FSIs) remained healthy, with improved solvency, efficiency and asset quality indicators, \nwhile liquidity indicators moderated. The industry’s Non-Performing Loans (NPL) ratio improved in \nJune 2025 on account of a higher growth in loans and advances relative to the growth in the NPL stock. \nThe outlook for the banking sector remains largely stable, dependent on banks’ adherence to \nrecapitalisation plans, the establishment of a strong corporate governance culture and enforcement of \nstrict credit underwriting standards. \n \n \n5.1 Banks’ Balance Sheet \nTotal assets of the banking sector grew by 18.9 percent to GH¢384.3 billion as at June 2025, compared \nwith 33.3 percent in June 2024. The lower growth in assets was driven by a moderate growth in deposits \nas well as the appreciation of the Ghana cedi. Foreign assets contracted by 32.2 percent in June 2025, \ncompared to a growth of 57.6 percent in June 2024, while domestic assets grew by 24.7 percent in June \n2025, from 31.0 percent growth in June 2024. Subsequently, the share of foreign assets in total assets \ndecreased to 5.8 percent in June 2025 from 10.2 percent the prior year, while the share of domestic \nassets rose to 94.2 percent from 89.8 percent during the same reference period. \n \nInvestments grew by 51.5 percent to GH¢162.3 billion in June 2025, from a growth of 19.2 percent in \nJune 2024, as banks recorded a significant growth in short-term instruments. Short-term bills surged \nby 129.1 percent from a growth of 7.3 percent in June 2024. Long-term instruments (securities), \nhowever, contracted by 0.1 percent in June 2025 from a growth of 28.6 percent in June 2024. The \ndevelopments in bills and securities culminated in an increased share of investments in total assets to \n42.3 percent in June 2025 from 33.2 percent in June 2024. \n \nGrowth in gross loans and advances moderated to 6.1 percent in June 2025 relative to the 15.6 percent \ngrowth recorded in June 2024. Gross loans and advances stood at GH¢89.7 billion in June 2025. Growth \nin net loans and advances (gross loans adjusted for provisions and interest in suspense) also moderated \nto 4.8 percent from 10.3 percent during the review period. \n \nThe growth in assets was funded by an increase in deposits and other funding sources. Deposits \nremained the main source of funding for the banking sector, with a share of 72.9 percent of total assets \nin June 2025, down from a share of 76.1 percent in June 2024. Deposits increased by 13.9 percent to \nGH¢280.1 billion in June 2025, compared to the growth of 31.1 percent recorded in June 2024. The \nforeign currency component of deposits contracted by 23.3 percent to GH¢62.3 billion in June 2025, \nfrom a growth of 29.8 percent a year ago, and this was largely driven by the currency appreciation. \nBorrowings, however, increased by 42.1 percent to GH¢33.0 billion in June 2025 from 44.4 percent \ngrowth recorded in June 2024. The growth in borrowings in June 2025 was mainly driven by domestic \nborrowing while foreign borrowing contracted further by 40.0 percent in June 2025 relative to a \ncontraction of 0.8 percent the previous year. On the domestic front, both short-term and long-term \nborrowing grew significantly. In contrast both short-term and long-term foreign borrowings contracted \nduring the review period. \n \n25 \n \nPUBLIC \n \n \nBanks’ shareholders’ funds position (comprising paid-up capital and reserves) continued to improve on \naccount of a rebound in profits across the industry and recapitalization efforts of undercapitalized banks. \nTotal shareholders’ funds increased by 48.5 percent to GH¢48.0 billion as at end-June 2025, compared \nto a growth of 44.9 percent recorded a year ago. \n \n \n \nSource: Bank of Ghana \n \n5.1.1 Asset and Liability Structure \nThe asset structure of the industry’s balance sheet in June 2025 reflected banks’ preference for \ninvestments. Investments (comprising bills, securities, and equity) replaced cash and bank balances as \nthe largest component of total assets, with an increased share of 42.3 percent in June 2025, from 33.2 \npercent in June 2024, as banks rebalanced their portfolios in favour of higher returns on investments. \nCash and bank balances was the second largest component of banks’ assets as at June 2025, although \nits share in total assets declined to 28.9 percent, from 35.8 percent in June 2024. Investments and cash \nand bank balances together accounted for 71.2 percent of total assets in June 2025, compared to a share \nof 69.0 percent in June 2024. Net loans and advances constituted the third-largest component of total \nassets, recording a declined share of 19.0 percent, from 21.4 percent in June 2024. Non-earning assets \n(fixed assets and other assets) in banks’ total assets recorded a marginal increase in share to 9.9 percent, \nfrom 9.6 percent, during the review period. \n \nOn the liability side, the share of deposits in banks’ liabilities and shareholders’ funds declined to 72.9 \npercent in June 2025, from 76.1 percent in the corresponding period last year. The share of borrowings \nrose during the period under review to 8.6 percent from 7.2 percent, reflecting the growth in total \nborrowings during the period. The share of shareholders’ funds in banks’ liabilities and shareholders’ \nJun-24\nApr-25\nJun-25\nJun-24\nApr-25\nJun-25\nJun-24\nJun-25\nTOTAL ASSETS\n323,177.5\n \n390,142.3\n \n384,273.7\n \n33.3\n \n27.2\n \n18.9\n \n100.0\n \n100.0\n \nA. Foreign Assets\n33,010.0\n \n43,371.9\n \n22,381.6\n \n57.6\n \n49.0\n \n(32.2)\n \n10.2\n \n5.8\n \nB. Domestic Assets\n290,167.5\n \n346,770.3\n \n361,892.2\n \n31.0\n \n24.9\n \n24.7\n \n89.8\n \n94.2\n \n Investments\n107,211.3\n \n135,382.7\n \n162,464.7\n \n19.2\n \n27.8\n \n51.5\n \n33.2\n \n42.3\n \n i. Bills\n42,796.0\n \n68,116.9\n \n98,039.9\n \n7.3\n \n51.7\n \n129.1\n \n13.2\n \n25.5\n \n ii. Securities\n64,078.7\n \n66,849.0\n \n64,008.4\n \n28.6\n \n10.0\n \n(0.1)\n \n19.8\n \n16.7\n \n Advances (Net)\n69,104.7\n \n74,559.5\n \n72,443.7\n \n10.3\n \n18.7\n \n4.8\n \n21.4\n \n18.9\n \n of which Foreign Currency\n24,333.5\n \n21,562.0\n \n17,004.3\n \n10.4\n \n(4.6)\n \n(30.1)\n \n7.5\n \n4.4\n \n Gross Advances\n84,530.0\n \n92,184.8\n \n89,702.9\n \n15.6\n \n18.3\n \n6.1\n \n26.2\n \n23.3\n \n Other Assets\n21,961.5\n \n26,133.4\n \n27,494.6\n \n49.3\n \n23.1\n \n25.2\n \n6.8\n \n7.2\n \n Fixed Assets\n8,582.7\n \n9,787.5\n \n9,910.3\n \n15.1\n \n16.5\n \n15.5\n \n2.7\n \n2.6\n \nTOTAL LIABILITIES AND CAPITAL\n323,177.5\n \n390,142.3\n \n384,273.7\n \n33.3\n \n27.2\n \n18.9\n \n100.0\n \n100.0\n \nTotal Deposits\n245,880.2\n \n289,545.2\n \n280,118.8\n \n31.1\n \n22.6\n \n13.9\n \n76.1\n \n72.9\n \n of which Foreign Currency\n81,228.3\n \n85,409.6\n \n62,296.9\n \n29.8\n \n12.8\n \n(23.3)\n \n25.1\n \n16.2\n \nTotal Borrowings\n23,168.3\n \n32,923.0\n \n32,910.7\n \n44.4\n \n69.1\n \n42.1\n \n7.2\n \n8.6\n \n Foreign Liabilities\n7,487.5\n \n6,075.6\n \n4,490.9\n \n(0.8)\n \n(7.2)\n \n(40.0)\n \n2.3\n \n1.2\n \n i. Short-term borrowings\n2,490.6\n \n2,288.9\n \n1,863.6\n \n33.2\n \n14.5\n \n(25.2)\n \n0.8\n \n0.5\n \n ii. Long-term borrowings\n4,015.1\n \n2,263.8\n \n1,563.9\n \n(2.5)\n \n(40.4)\n \n(61.0)\n \n1.2\n \n0.4\n \n iii. Deposits of non-residents\n940.6\n \n1,422.6\n \n997.1\n \n(39.1)\n \n94.5\n \n6.0\n \n0.3\n \n0.3\n \n Domestic Liabilities\n281,979.5\n \n340,090.3\n \n331,433.0\n \n33.2\n \n26.6\n \n17.5\n \n87.3\n \n86.2\n \n i. Short-term borrowing\n15,230.3\n \n26,524.1\n \n27,361.9\n \n83.0\n \n113.1\n \n79.7\n \n4.7\n \n7.1\n \n ii. Long-term Borrowings\n1,432.3\n \n1,846.1\n \n2,121.3\n \n(17.6)\n \n50.8\n \n48.1\n \n0.4\n \n0.6\n \n iii. Domestic Deposits\n244,939.5\n \n288,122.7\n \n279,121.7\n \n31.7\n \n22.3\n \n14.0\n \n75.8\n \n72.6\n \nOther Liabilities\n21,093.0\n \n22,438.1\n \n21,694.4\n \n32.6\n \n14.4\n \n2.9\n \n6.5\n \n5.6\n \nPaid-up capital\n13,023.9\n \n17,282.9\n \n18,879.0\n \n24.8\n \n32.6\n \n45.0\n \n4.0\n \n4.9\n \nShareholders' Funds\n32,307.2\n \n43,964.3\n \n47,979.2\n \n44.9\n \n42.6\n \n48.5\n \n10.0\n \n12.5\n \n (GH ¢'million)\nY-on-Y Growth (%)\nShares (%)\nTable 5.1: Key Developments in DMBs' Balance Sheet\n \n26 \n \nPUBLIC \nfunds also rose to 12.5 percent from 10.0 percent, consistent with the strong growth in shareholders’ \nfunds. The proportion of other liabilities on the other hand declined to 5.6 percent, from 6.5 percent \nduring the review period. \n \nFigure 5.1: Developments in Banks’ Balance Sheet & Asset Quality \n \n Source: Bank of Ghana \n \n5.1.2 Share of Banks’ Investments \nBills (short-term debt instruments) constituted the largest component of banks’ investment portfolio, \nafter its share rose to 60.3 percent in June 2025, from 39.9 percent in June 2024. The share of long-term \nsecurities in total investments, however, declined to 39.4 percent from 59.8 percent over the same \nperiod. The share of equity investments remained negligible and unchanged at 0.3 percent during the \nperiod under review. \n \n5.2 Credit Risk \nThe industry’s asset quality improved during the first half of 2025, relative to the comparative period \nin 2024, although credit risk remains elevated. The improved asset quality reflected in a decline in NPL \nratios in all but three economic sectors in June 2025 compared to June 2024. \n44.3\n39.9\n50.3 \n60.3 \n55.4\n59.8\n49.4 \n39.4 \n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\n100.0\nJun-23\nJun-24\nApr-25\nJun-25\nComponents of Banks' Investments (% share)\nBills\nSecurities\nShares & Other Equities\n27.7\n35.8\n36.6 \n28.9 \n37.1\n33.2\n34.7 \n42.3 \n25.8\n21.4\n19.3 \n19.0 \n9.4 \n9.6 \n9.4 \n9.9 \n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\n100.0\nJun-23\nJun-24\nApr-25\nJun-25\nAsset Structure of Banks (%) \nCash and Due from Banks\nInvestments\nNet Advances\nOthers\n77.4 \n76.1 \n74.2 \n72.9 \n6.6 \n7.2 \n8.4 \n8.6 \n9.2 \n10.0 \n11.3 \n12.5 \n6.6 \n6.5 \n5.8 \n5.6 \n -\n 10.0\n 20.0\n 30.0\n 40.0\n 50.0\n 60.0\n 70.0\n 80.0\n 90.0\n 100.0\nJun-23\nJun-24\nApr-25\nJun-25\nLiability Structure of Banks (%)\nTotal Deposits\nTotal Borrowings\nShareholders' Funds\nOther Liabilities\n90.8 \n92.4 \n94.2 \n95.1\n9.2 \n7.6 \n5.8 \n4.9\n -\n 20.0\n 40.0\n 60.0\n 80.0\n 100.0\nComponents of Banks' Credit Portfolio (%)\nPrivate sector\nPublic sector\n3.6\n3.3\n10.7\n9.1\n3.9\n23.6\n7.4\n32.8\n5.5\n3.9\n2.8\n10.6\n8.6\n3.3\n24.4\n5.8\n37.2\n3.3\n0.0\n10.0\n20.0\n30.0\n40.0\nAgric, Forest. & Fishing\nMining & Quarrying\nManufacturing\nConstruction\nElect., Water & Gas\nCommerce and Finance\nTransp., Stor. & Commu.\nServices\nMiscellaneous\nDistribution of Credit by Sector (%)\nJun-25\nJun-24\n0.0\n5.0\n10.0\n15.0\n20.0\n25.0\n30.0\nAgric, Forest. & Fishing\nMining & Quarrying\nManufacturing\nConstruction\nElect., Water & Gas\nCommerce and Finance\nTransp., Stor. & Commu.\nServices\nMiscellaneous\n8.4\n1.8\n8.0\n13.8\n3.3\n19.7\n15.1\n26.6\n3.2\n10.0\n0.7\n8.0\n11.4\n2.4\n27.0\n12.9\n25.7\n1.8\nNPL ratio in each Sector (%)\nJun-25\nJun-24\n \n27 \n \nPUBLIC \n5.2.1 Credit Portfolio Analysis \nThe stock of gross loans and advances (domestic and foreign) recorded a marginal growth of 6.1 percent \nto GH¢89.7 billion at end-June 2025, compared to the 15.6 percent growth during the same period last \nyear. Private sector credit (comprising credit to private enterprises and households) posted a lower \ngrowth of 9.2 percent to GH¢85.3 billion in June 2025, from 17.7 percent in the corresponding period \nthe previous year. Public sector credit contracted by 31.3 percent to GH¢4.4 billion at end-June 2025 \ncompared to a contraction of 5.0 percent in June 2024. Consequently, the share of private sector credit \nin total credit rose to 95.1 percent in June 2025, from 92.4 percent in June 2024, while the share of \npublic sector credit dropped to 4.9 percent, from 7.6 percent a year earlier. \n \nIn terms of the distribution of credit by sectors, the services sector accounted for the largest share of \n37.2 percent as at end-June 2025 (32.8 percent in June 2024), followed by the commerce and finance \nsector with a relative share of 24.4 percent (23.6 percent in June 2024), while the manufacturing sector \naccounted for a share of 10.6 percent (10.7 percent in June 2024). Together, these top three sectors \naccounted for 72.3 percent of total credit in June 2025 (67.2 percent in June 2024). The mining and \nquarrying sector remained the lowest recipient of industry credit, with a share of 2.8 percent (3.3 percent \nin June 2024). \n \n5.2.2 Off-Balance Sheet Transactions \nOff-balance sheet transactions (largely trade finance and guarantees) declined during the review period. \nContingent liabilities contracted by 34.5 percent to GH¢16.8 billion as at end-June 2025, from GH¢25.7 \nbillion as at end-June 2024. Similarly, banks’ contingent liabilities as a percentage of total liabilities \ndeclined to 5.0 percent in June 2025 from 8.8 percent in June 2024. \n \n5.2.3 Asset Quality \nThe asset quality of the banking industry improved during the period under review. The industry’s NPL \nratio declined to 23.1 percent in June 2025 from 24.2 percent in June 2024. When the fully provisioned \nloan loss category is adjusted for, the industry’s NPL ratio decreases to 8.5 percent from 10.8 percent, \nreflecting decreasing stock in the sub-standard category of nonperforming loans. The decline in the \nNPL ratio during the period under review is explained by the lower growth in the NPL stock relative to \nthe growth in total loans. The industry’s NPL stock increased by 1.3 percent to GH¢20.7 billion in June \n2025, from GH¢20.4 billion in June 2024 (representing 49.4% year-on-year growth) although there was \na decrease in the share of foreign currency NPL. \n \nThe private sector accounted for the most non-performing loans, being the largest recipient of the \nindustry’s credit. The proportion of NPLs attributable to the private sector rose marginally to 96.4 \npercent in June 2025 from 95.6 percent in June 2024, while that of the public sector inched down to 3.6 \npercent from 4.4 percent a year earlier. \n \nThe commerce and finance sector, and the agriculture, forestry and fishing sector recorded increases in \ntheir NPL ratios while that of the manufacturing sector remained unchanged in June 2025 compared \nwith the same reference period in 2024. The commerce and finance sector recorded the highest NPL \nratio of 27.0 percent (19.7 percent a year ago), followed by the services sector with an NPL ratio of \n25.7 percent (26.6 percent a year earlier). The NPL ratio of the transport, storage and communications \nsector decreased to 12.9 percent (15.1 percent a year earlier), followed by the construction sector with \na ratio of 11.4 percent (13.8 percent a year earlier), and then the manufacturing sector with an unchanged \n \n28 \n \nPUBLIC \nNPL ratio of 8.0 percent. The mining and quarrying sector accounted for the lowest NPL ratio of 0.7 \npercent in June 2025 (1.8 percent a year earlier). \n \n5.3 Financial Soundness Indicators \nApart from the improvement in asset quality during the review period, other key financial soundness \nindicators (FSIs) in the first half of 2025 pointed to an efficient and profitable sector with improving \ncapital buffers. \n \nFigure 5.2: Key Financial Soundness Indicators \n \nSource: Bank of Ghana \n \n \n5.3.1 Liquidity Indicators \nThe industry’s liquidity position remained strong in June 2025, although core measures recorded \ndeclines as banks rebalanced their portfolios. The ratio of core liquid assets (mainly cash and due from \nbanks) to total deposits decreased to 39.6 percent in June 2025 from 47.1 percent in June 2024, while \ncore liquid assets to total assets ratio decreased to 28.9 percent from 35.8 percent. However, the ratio \nof broad liquid assets to total deposits grew to 97.4 percent from 90.6 percent, while broad liquid assets \nto total assets ratio increased to 71.0 percent from 68.9 percent over the review period. (Annexes Table \n5.5). \n \n5.3.2 Capital Adequacy Ratio \nThe industry’s solvency position, measured by the Capital Adequacy Ratio (CAR) adjusted for the \nregulatory reliefs, was 19.7 percent in June 2025, compared to 14.3 percent recorded in June 2024. This \nwas higher than the revised prudential minimum of 10 percent. The CAR in June 2025 reflected the \nrecognition of 2025 profits posted by banks for purposes of CAR computation, as well as the on-going \nrecapitalisation of banks (Figure 5.2). \n \n6.5\n5.4\n3.5\n5.5\n4.4\n3.5\n2.3\n3.6\n0.0\n1.0\n2.0\n3.0\n4.0\n5.0\n6.0\n7.0\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\nJun-23\nJun-24\nApr-25\nJun-25\nEfficiency Indicators (%)\nCost to income\nOperational Cost to gross income\nCost to total assets (RHS)\nOperational Cost to total assets (RHS)\n37.6\n35.3\n30.0\n32.2\n5.5\n5.4\n5.0\n5.6\n -\n 5.0\n 10.0\n 15.0\n 20.0\n 25.0\n 30.0\n 35.0\n 40.0\nJun-23\nJun-24\nApr-25\nJun-25\nProfitability (%)\nReturn On Equity (%) after tax\nReturn On Assets (%) before tax\n3.8 \n7.8 \n10.8 \n9.0 \n8.5 \n14.1 \n18.7 \n24.2 \n23.6 \n23.1 \n -\n 5.0\n 10.0\n 15.0\n 20.0\n 25.0\n 30.0\n -\n 5,000.0\n 10,000.0\n 15,000.0\n 20,000.0\n 25,000.0\nJun-22\nJun-23\nJun-24\nApr-25\nJun-25\nAsset Quality\nSUB-STD (GH¢m)\nDOUBTFUL (GH¢m)\nLOSS (GH¢m)\nAdjusted NPL Ratio (%)\nNPL Ratio (% Right Axis)\n14.3 \n19.7 \n10.6 \n18.2 \n 10.0\n 20.0\n 30.0\n 40.0\n 50.0\n 60.0\n -\n 5.0\n 10.0\n 15.0\n 20.0\n 25.0\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nJun-25\nSolvency (%)\nRWA/Total Assets\n CAR (with Reliefs)\n CAR (w/o Reliefs)\n \n29 \n \nPUBLIC \n5.3.3 Profitability \nThe banking industry remained profitable for the first half of 2025, recording both a higher profit-\nbefore-tax (PBT) and profit-after-tax (PAT) in June 2025 relative to the same period last year. \n \nGenerally, all income lines increased at higher growth rates in June 2025 compared to the same period \nlast year. Net interest income increased by 20.2 percent to GH¢14.2 billion, higher than the \ncorresponding growth of 19.4 percent in June 2024. In year-on-year terms, interest income increased to \nGH¢21.6 billion from GH¢18.0 billion, representing a growth of 20.4 percent in June 2025 compared \nwith 19.1 percent in June 2024. The higher growth in interest income is explained by the relatively \nhigher rates on money market instruments this year compared to the first half of 2024, as well as higher \nlending rates. Interest expenses also rose to GH¢7.5 billion in June 2025, representing a higher growth \nrate of 20.7 percent compared to the 18.6 percent growth recorded in June 2024. \n \nNet fees and commissions recorded a marginal growth of 17.8 percent from 16.8 percent a year ago \nwhile other income recorded a higher growth of 52.2 percent to GH¢3.6 million from GH¢2.4 billion \n(16.2% contraction) during the same review period. These developments in the different income lines \nculminated in an increase in the industry’s operating income to GH¢20.9 billion in June 2025 from \nGH¢16.8 billion, representing a higher growth of 24.4 percent compared to 12.3 percent in the year \nprior. Similarly, gross income increased to GH¢28.3 billion in June 2025 (23.4% year-on-year growth) \nfrom GH¢23.0 billion in June 2024 (14.0% year-on-year growth). \n \nThe cost lines recorded similar increases in growth rates in June 2025 compared to the same period in \n2024. The industry’s operating expenses grew by 21.4 percent in June 2025, compared to 15.5 percent \nin June 2024, on the back of higher growth in staff costs and other operating (administrative) expenses. \nHowever, impairment losses on financial assets as well as provisions for bad debt and depreciation \ncontracted by 14.8 percent in June 2025, compared to the 39.5 percent contraction in June 2024. \n \nConsequently, the industry’s profit-after-tax increased by 32.6 percent to GH¢7.2 billion in June 2025, \ncompared with the 25.5 percent growth recorded in June 2024. Profit-before-tax also rose by 32.2 \npercent to GH¢10.8 billion, from GH¢8.1 billion in June 2024. The higher growth in profit during the \nfirst half of this year was due to increases in interest income and other income lines in 2025 relative to \nthe same period in 2024. \n \n(a) Return on Assets and Return on Equity \nThe banking sector’s profitability indicators, namely return-on-assets (ROA) and return-on-equity \n(ROE), recorded a mixed performance during the period under review. The ROA improved marginally \nby 5.6 percent in June 2025, from 5.4 percent in June 2024, on account of a moderate growth in total \nassets relative to industry profit. The ROE, however, declined to 32.2 percent in June 2025, from 35.3 \npercent in June 2024 on the back of a higher growth in shareholders’ funds relative to industry profit. \n \n(b) Interest Margin and Spread \nInterest spreads for the banking sector narrowed to 6.0 percent in June 2025 from 6.4 percent in June \n2024. The decrease in spreads was on the back of a decline in gross yields and interest payable. Gross \nyields declined to 8.9 percent in June 2025 from 9.4 percent in June 2024 while interest payable \ndecreased to 2.8 percent from 3.0 percent a year earlier. The ratio of interest margin to total assets \nremained flat at 3.7 percent, while interest margin to gross income declined from 51.4 percent to 50.1 \npercent during the period under review. The ratio of gross income to total assets (asset utilisation) rose \n \n30 \n \nPUBLIC \nto 7.4 percent in June 2025 from 7.1 percent in June 2024, while the profitability ratio increased from \n23.5 percent to 25.3 percent over the review period. \n \n(c) Composition of Banks’ Income \nIncome from investments remained the largest component of banks’ total income in June 2025, with its \nshare rising to 43.9 percent from 42.8 percent in June 2024 following the growth in total investments. \nThe share of interest income from loans, however, decreased to 33.6 percent from 36.3 percent in June \n2024. The share of banks’ income from fees and commissions increased to 11.2 percent from 10.5 \npercent, while the share of income from other sources also rose to 11.3 percent from 10.4 percent during \nthe period under review. \n \nFigure 5.3: Composition of Income, Cost and Borrowings \n \nSource: Bank of Ghana \n \n \n5.3.4 Operational Efficiency \nThe industry’s efficiency recorded a mixed performance during the first half of 2025 compared with \nthe same period last year. The cost-to-income ratio improved to 74.7 percent in June 2025, from 76.5 \npercent in June 2024, whereas cost-to-total assets ratio weakened to 5.5 percent, from 5.4 percent a year \nearlier. The operational cost-to-total assets ratio also increased to 3.6 percent from 3.5 percent a year \nearlier, reflecting the higher growth in operating expenses in June 2025 relative to June 2024. However, \nthe ratio of operational cost to total income improved to 48.4 percent from 49.6 percent, following the \nstrong outturn in income in June 2025 compared with the corresponding period last year. \n \n \n \n32.9\n35.2\n34.5\n35.2\n41.5\n43.3\n45.2\n43.6\n10.9\n6.0\n4.8\n4.2\n14.7\n15.6\n15.6\n17.0\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\n100.0\nComposition of Cost (%)\nInterest Expense\nOperating Expense\nTotal Provision\nTax\n38.8\n42.8\n42.7\n43.9\n35.9\n36.3\n35.7\n33.6\n10.5\n10.5\n12.5\n11.2\n14.8\n10.4\n9.1\n11.3\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\n100.0\nComposition of Banks' Income (%)\nInvestments\nLoans\nFees & Commissions\nOther Income\n52.1\n62.7\n71.9\n86.2\n89.6\n47.9\n37.3\n28.1\n13.8\n10.4\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\n100.0\nJun-22\nJun-23\nJun-24\nApr-25\nJun-25\nBanks' Borrowing by Source (% of Total)\n Domestic Borrowing\n Foreign Borrowing\n61.1\n31.2\n38.3\n50.3\n54.4\n38.9\n68.8\n61.7\n49.7\n45.6\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\n100.0\nJun-22\nJun-23\nJun-24\nApr-25\nJun-25\nBanks' External Borrowing by Maturity \n(% of Total)\nShort-term borrowings\nLong term borrowings\n \n31 \n \nPUBLIC \n5.3.5 Banks’ Counterparty Relationships \nTotal offshore balances decreased by 34.1 percent to GH¢19.7 billion in June 2025, compared to the \n71.4 percent growth in the previous year, driven largely by a contraction in placements and nostro \nbalances. Industry placements with foreign counterparties recorded contracted by 22.8 percent from the \n69.4 percent growth recorded during the same period a year earlier. Similarly, nostro balances also \ncontracted by 44.7 percent compared with a growth of 73.6 percent in June 2024. As a result, the ratio \nof offshore balances to net worth decreased to 41.1 percent from 92.6 percent during the review period. \n \nThe share of banks’ external borrowings in total borrowings declined to 10.4 percent in June 2025, from \n28.1 percent in June 2024, while the share of domestic borrowings increased to 89.6 percent from 71.9 \npercent in June 2024. Banks’ external borrowings were tilted towards short-term instruments with the \nshare of short-term borrowings in total external borrowings increasing to 54.4 percent from 38.3 \npercent, while the share of long-term borrowings declined to 45.6 percent from 61.7 percent a year \nearlier. \n \n5.4 Credit Conditions Survey \nResults of the June 2025 Credit Conditions Survey indicated a net tightening in the overall stance on \nloans to enterprises between April and June 2025, on the back of a net tightening in the stance on all \ncomponents of enterprise loans (namely short-term and long-term enterprise loans, loans to SMEs, and \nloans to large enterprises). Banks projected their overall stance on enterprise loans to record a net easing \nin July and August 2025 from an easing in all components of enterprise loans apart from loans to large \nenterprises. \n \nHowever, the overall stance on loans to households eased during the June 2025 survey round from a \nnet ease in stance on all components of household loans (namely loans for house purchases and \nconsumer credit and other lending). Over the next two months, banks project a net easing in the overall \nstance on loans to households, driven mainly by a net ease on consumer credit and other lending, \nalthough the stance on loans for house purchases is expected to tighten. \n \nOn the demand side, the June 2025 survey further indicated a reduction in overall demand for enterprise \nloans from decreases in the demand for loans on all components of enterprise loans except long-term \nloans. Banks projected a net decreased demand for corporate loans over the next two months on account \nof a net decrease in the demand by small and medium-sized enterprises although demand for loans by \nlarge enterprises is projected to increase. \n \nCredit demand by households recorded a net increase between April and June 2025 from a net increase \nin the demand for both mortgages and consumer credit and other lending. Over the next two months, \nbanks expect a surge in the demand for both consumer credit and loans for house purchases to drive a \nnet increase in the overall demand for household loans. \n \n \n \n \n \n \n \n \n \n32 \n \nPUBLIC \n \nFigure 5.4: Credit Conditions Survey Results \n \nSource: Bank of Ghana \n \n \n5.5 Conclusion and Outlook \nThe banking sector’s performance continued to improve in the first six months of the year. The sector \nremained profitable, with all banks recording profits for first half of 2025. The banking sector solvency \nand efficiency indicators pointed to relative improvement. The industry’s outlook remains stable, with \nrecapitalisation and enforcement of stringent credit underwriting standards, as well as intensified loan \nrecovery efforts being critical to the performance of the sector going forward. \n \n \n \n \n \n \n \n \n \n-10.00\n0.00\n10.00\n20.00\n30.00\n40.00\n50.00\n60.00\nNPR (%)\nLoans for house purchase\nConsumer credit and other lending\nOverall stance to Households\nHouseholds\n-30\n-20\n-10\n0\n10\n20\n30\n40\n50\nNPR (%)\nLoans for house purchase\nLoans for consumer credit\nOverall Household demand for loans\nHouseholds\n-10.00\n-5.00\n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\n30.00\n35.00\n40.00\nNPR (%)\nSmall and Medium Enterprises\nLarge Enterprises\nOverall Credit Stance for Enterprises\nShort term enterprise loans\nLong term enterprise loans\nIndex, a rise denotes tightening\nCorporates\n-30.00\n-20.00\n-10.00\n0.00\n10.00\n20.00\n30.00\n40.00\nNPR (%)\nOverall Demand for credit\nSmall and Medium Enterprises\nLarge Enterprises\nShort term\nLong term\nIndex, a rise denotes increase in \ndemand\nCorporates\n \n33 \n \nPUBLIC \n \n6. Macroprudential Developments \n \n6.0 Overview \nThere has been an improvement in global and domestic macroeconomic risk levels in June 2025 \ncompared to June 2024. The soundness of the banking sector, especially its resilience to shocks, has \nimproved markedly, year-on-year. However, debt servicing remains a challenge for both the corporate \nand household sectors. The debt market has shown signs of renewed foreign investor sentiment \nfollowing the successful completion of Ghana’s debt restructuring. \n \n6.1 Microfinancial Risk Assessment \nThe Bank of Ghana observed an improvement in global and domestic macroeconomic risk levels in \nJune 2025 compared to June 2024. From the Cobweb framework, risk levels from both the global \nmacroeconomy and the domestic macroeconomy improved in June 2025 relative to June 2024. This \noutcome was largely driven by sustained economic growth and declining inflation globally and \ndomestically, alongside other domestic factors such as exchange rate appreciation, a stronger reserve \nposition, and lower public debt levels. However, risks from the corporate and household sectors \nremained broadly unchanged, reflecting the relatively high non-performing ratio in the banking sector. \nIn the outlook, global economic risks are expected to moderate in the near term, supported by a steady \ndecline in inflation. However, downside risks remain, including the adverse effects of geopolitical \ntensions on growth, commodity prices, and financial conditions. On the domestic economy front, risk \nlevels are projected to remain stable on the back of sustained growth amid monetary policy easing and \nthe expected disinflationary trend. It is the expectation that the monetary policy rate cut, together with \nthe reductions in the 91-day Treasury Bill and Interbank weighted average rate, will drive lending rates \ndownwards. This will help moderate risk build-up in the corporate and household sectors. \n \nFigure 6.1: Cobweb Diagram \n \nSource: Bank of Ghana \n \nThe private sector–credit to GDP gap is another measure of macrofinancial risk used in monitoring \nfinancial stability conditions. A positive credit-to-GDP gap indicates that total private sector credit \nextension relative to the size of the economy is above its long-term trend and vice versa. The negative \ncredit-to-GDP gap recorded in June 2025 suggests that there is further scope to expand private sector \n -\n 0.20\n 0.40\n 0.60\n 0.80\n 1.00\n 1.20\n 1.40\n 1.60\n 1.80\nGlobal Economy Risk\nDomestic Economy Risk\nHouseholds Sector Risk\nCorporate Sector Risk\nJun-2023\nJun-2024\nJun-2025\n \n34 \n \nPUBLIC \ncredit delivery without causing excessive build-up of risks in the economy, subject to sound credit risk \nmanagement practices by the banking sector. \n \n \nFigure 6.2: Credit-to-GDP Gap \n \nSource: Bank of Ghana \n \n6.2 Risk of Capital Flight \nWhile the Ghana Stock Market has outperformed its peers, foreign investors have taken advantage to \nrealize capital gains by selling off their shares during the first half of the year. However, there was a \ngradual recovery of foreign investors' activities in the bond market. \n \nThe Ghana stock exchange (GSE) outperformed its peers in sub-Saharan Africa. This is partly due to \nthe strong earnings of some listed institutions and favourable economic prospects. The positive \nperformance is expected to contain foreign portfolio reversals from the equity market. As of July 15, \n2025, the GSE recorded a year-to-date return of 32.0 per cent, compared to 28.1 per cent, -2.3 per cent, \nand 22.8 per cent for similar markets in Kenya, Namibia, and Nigeria over the same period. \n \nFigure 6.3: Year-to-Date Returns of Selected Stock Markets in SSA - 2025 \n \nSource: Databank Group \n \nAs of end-May 2025, foreign investors on the equity market recorded a year-to-date net sell-off of \nGH¢594.42 million, significantly higher than the GH¢109.34 million recorded over the same period in \n2024. The increasing sell-off partly reflects their desire to realize gains from the cedi’s appreciation and \nthe strong stock market performance experienced over the past two years. \n \n-2\n-1.5\n-1\n-0.5\n0\n0.5\n1\n1.5\n2\n2.5\n2008Q2\n2008Q4\n2009Q2\n2009Q4\n2010Q2\n2010Q4\n2011Q2\n2011Q4\n2012Q2\n2012Q4\n2013Q2\n2013Q4\n2014Q2\n2014Q4\n2015Q2\n2015Q4\n2016Q2\n2016Q4\n2017Q2\n2017Q4\n2018Q2\n2018Q4\n2019Q2\n2019Q4\n2020Q2\n2020Q4\n2021Q2\n2021Q4\n2022Q2\n2022Q4\n2023Q2\n2023Q4\n2024Q2\n2024Q4\n2025Q2\nCTGDP_GAP\n-20.0%\n-10.0%\n0.0%\n10.0%\n20.0%\n30.0%\n40.0%\n02-Jan-25\n09-Jan-25\n16-Jan-25\n23-Jan-25\n30-Jan-25\n06-Feb-25\n13-Feb-25\n20-Feb-25\n27-Feb-25\n06-Mar-25\n13-Mar-25\n20-Mar-25\n27-Mar-25\n03-Apr-25\n10-Apr-25\n17-Apr-25\n24-Apr-25\n01-May-25\n08-May-25\n15-May-25\n22-May-25\n29-May-25\n05-Jun-25\n12-Jun-25\n19-Jun-25\n26-Jun-25\n03-Jul-25\n10-Jul-25\nGhana\nKenya\nNamibia\nNigeria\n \n35 \n \nPUBLIC \nThe debt market has shown signs of renewed foreign investor sentiment following the successful \ncompletion of Ghana’s debt restructuring. The foreign investors made net purchases of GH¢69.14 \nmillion in the first five months of 2025 compared with 3.89 million in 2024. \n \nFigure 6.4: Foreign Investors' Cumulative Net Purchases in the equity and debt market \n \n \nSource: Central Securities Depository \n \n6.3 Banking Sector Soundness \nThe Banking Sector Soundness Index (BSSI) improved year-on-year on the back of improved solvency \namid strong liquidity, cost-efficiency, and profitability of the sector. The non-performing loans ratio, \nthough improved, remained elevated. That notwithstanding, the ongoing macroeconomic recovery has \nled to a significant moderation in the build-up of new non-performing loans. \n \nFigure 6.5: Banking Sector Soundness Index (BSSI) \n \nSource: Bank of Ghana \n \n \n (700.00)\n (600.00)\n (500.00)\n (400.00)\n (300.00)\n (200.00)\n (100.00)\n -\n 100.00\n2023\n2024\n2025\nGHS M\nCUMULATIVE NET MONTHLY \nFOREIGN INVESTOR EQUITY \nPURCHASES GHC M (JAN-MAY)\n -\n 200.00\n 400.00\n 600.00\n 800.00\n 1,000.00\n 1,200.00\n 1,400.00\n2023\n2024\n2025\nGHS M\nCUMULATIVE NET MONTHLY \nFOREIGN INVESTOR DEBT \nINSTRUMENTS PURCHASES GHC \nM (JAN-MAY)\n \n36 \n \nPUBLIC \nThe heatmap shows a broad-based improvement in financial soundness indicators across the banking \nsector. It highlights the improvements in capital adequacy and profitability year-on-year. \nNotwithstanding these gains, non-performing loans remain elevated. \n \nTable 6.1: Heatmap \n \nColor Code \nGreen \nBlue \nYellow \nRed \nPerforming Period \n1st Best \n2nd Best \n3rd Best \n4th Best \nSource: Bank of Ghana \n \n6.4 Banking Sector Resilience \nThe stress tests assessed the implications of macroeconomic developments in the outlook for the \nsolvency conditions of the banking sector. The results of the stress tests indicated that the banking sector \nappears resilient to adverse macroeconomic developments, given the current strong capital positions of \nthe banks. Again, a deterioration in macroeconomic conditions could negatively impact asset quality \nand increase operational costs, but these would be offset by gains from net interest income. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nFSIs\nJun-23\nSep-23 Dec-23\nMar-24\nApr-24 Jun-24\nSep-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25\nMay-25 Jun-25\nCapital Adequacy\nRegulatory capital to risk weighted assets (Threshold - Without Reliefs)\n7.36\n \n7.39\n \n8.27\n \n11.69\n \n11.48\n \n10.55\n \n11.17\n \n11.28\n \n11.15\n \n12.10\n \n15.54\n \n15.84\n \n18.58\n \n17.83\n \nRegulatory capital to risk weighted assets (Distribution - Without Reliefs)\n7.36\n \n7.39\n \n8.27\n \n11.69\n \n11.48\n \n10.55\n \n11.17\n \n11.28\n \n11.15\n \n12.10\n \n15.54\n \n15.84\n \n18.58\n \n18.24\n \nRegulatory tier I capital to risk-weighted assets\n11.60\n \n11.03\n \n11.04\n \n13.56\n \n12.95\n \n11.46\n \n11.51\n \n11.13\n \n10.83\n \n11.74\n \n14.89\n \n13.96\n \n16.64\n \n16.28\n \nAsset Quality\nNonperforming loans net of loan-loss provision to capital\n14.26\n \n11.28\n \n14.55\n \n19.45\n \n15.78\n \n15.36\n \n12.29\n \n11.10\n \n11.07\n \n10.82\n \n11.98\n \n10.81\n \n9.00\n \n8.32\n \nNonperforming loans to total gross loans\n18.71\n \n17.99\n \n20.58\n \n26.74\n \n25.66\n \n24.13\n \n22.77\n \n21.79\n \n22.55\n \n22.57\n \n23.44\n \n23.57\n \n23.52\n \n23.09\n \nBanks provisions to NPL\n76.76\n \n78.89\n \n73.19\n \n71.70\n \n75.66\n \n75.66\n \n78.35\n \n78.74\n \n78.27\n \n78.42\n \n76.67\n \n78.13\n \n79.51\n \n80.73\n \nEarnings\nReturn on assets\n5.54\n \n5.33\n \n5.37\n \n5.63\n \n5.39\n \n5.40\n \n5.05\n \n5.04\n \n4.85\n \n4.67\n \n4.96\n \n4.98\n \n5.35\n \n5.61\n \nReturn on equity\n37.59\n \n35.58\n \n34.16\n \n36.36\n \n34.97\n \n35.25\n \n32.12\n \n30.84\n \n29.71\n \n28.51\n \n29.92\n \n30.02\n \n31.47\n \n32.21\n \nInterest margin to gross income\n49.06\n \n51.27\n \n51.80\n \n54.23\n \n52.46\n \n51.41\n \n51.10\n \n50.92\n \n52.36\n \n51.72\n \n51.82\n \n51.28\n \n50.08\n \n50.11\n \nLiquidity\nCore liquid assets to total assets\n26.77\n \n24.73\n \n29.34\n \n30.99\n \n33.77\n \n34.47\n \n35.39\n \n36.16\n \n36.15\n \n37.41\n \n36.24\n \n35.36\n \n31.23\n \n27.50\n \nCore liquid assets to short-term liabilities\n32.29\n \n29.83\n \n35.48\n \n37.32\n \n40.61\n \n41.39\n \n42.54\n \n43.31\n \n43.61\n \n45.23\n \n43.47\n \n42.51\n \n38.03\n \n33.68\n \nCore liquid assets to total deposits\n34.60\n \n31.71\n \n37.61\n \n40.04\n \n43.84\n \n45.31\n \n46.82\n \n48.16\n \n48.58\n \n50.15\n \n48.20\n \n47.63\n \n42.95\n \n37.73\n \nBroad liquid assets to total assets \n63.78\n \n64.73\n \n65.69\n \n68.35\n \n68.21\n \n67.55\n \n67.58\n \n66.87\n \n68.19\n \n69.08\n \n69.44\n \n69.93\n \n70.29\n \n69.67\n \nBroad liquid assets to short-term liabilities\n76.92\n \n78.07\n \n79.42\n \n82.31\n \n82.03\n \n81.10\n \n81.23\n \n80.09\n \n82.28\n \n83.53\n \n83.30\n \n84.07\n \n85.60\n \n85.31\n \nEfficiency\nNoninterest expenses to gross income\n41.26\n \n42.69\n \n43.04\n \n38.86\n \n38.78\n \n37.65\n \n39.43\n \n40.83\n \n38.70\n \n38.63\n \n37.78\n \n38.08\n \n36.51\n \n35.70\n \nPersonnel expenses to gross income\n15.49\n \n15.65\n \n15.67\n \n16.19\n \n16.65\n \n16.62\n \n16.67\n \n16.45\n \n17.65\n \n18.21\n \n17.25\n \n17.47\n \n17.35\n \n16.71\n \n \n37 \n \nPUBLIC \n \n Figure 6.6: Key Macroeconomic Scenarios of Stress Tests \n \n \nSource: Bank of Ghana \n \n-2.00%\n-1.00%\n0.00%\n1.00%\n2.00%\n3.00%\n4.00%\n5.00%\n6.00%\n7.00%\n8.00%\nDec-20\nJun-21\nDec-21\nJun-22\nDec-22\nJun-23\nDec-23\nJun-24\nDec-24\nJun-25\nDec-25\nReal GDP growth (%, yoy)\nHistory\nBaseline\nAdverse\nSeverely adverse\n0.00%\n10.00%\n20.00%\n30.00%\n40.00%\n50.00%\n60.00%\nInflation (%, yoy)\nHistory\nBaseline\n0.00%\n5.00%\n10.00%\n15.00%\n20.00%\n25.00%\n30.00%\n35.00%\nInterbank rate (%)\nHistory\nBaseline\n0.00%\n5.00%\n10.00%\n15.00%\n20.00%\n25.00%\n30.00%\n35.00%\n40.00%\nT-Bill Rate (%)\nHistory 25.17% 25.28%\nBaseline\n0.00%\n10.00%\n20.00%\n30.00%\n40.00%\nLending rate (%)\nHistory\nBaseline\n0.0%\n5.0%\n10.0%\n15.0%\n20.0%\n25.0%\n30.0%\n35.0%\n40.0%\n4Y Bond yield\nHistory\nBaseline\nAdverse\nSeverely adverse\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nExchange rate\nHistory\nBaseline\nAdverse\nSeverely adverse\n \n38 \n \nPUBLIC \nFigure 6.7: Results of Macro Stress Test \n \nSource: Bank of Ghana \n \n \n \n6.5 Conclusion \nThe macro-prudential assessment of the banking sector indicates that positive macroeconomic \ndevelopments have supported the banking sector’s performance and moderated systemic risk in \nH12025. The Bank’s stress test results suggest that the banking sector’s resilience to shocks has \nimproved due to profit retention, capital injections, adequate liquidity, and moderation in the build-up \nof new non-performing loans. However, debt servicing remains a challenge for both the corporate and \nhousehold sectors. It is expected that the ongoing macroeconomic recovery, restructuring of loans to \neligible borrowers, and implementation of measures outlined in the Bank of Ghana’s Regulatory Notice \nto banks on reducing NPLs will help address this challenge. In the near term, sustaining the \nmacroeconomic gains would provide the impetus for a stronger recovery in the banking sector’s \nintermediation capacity. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n -\n 5.00\n 10.00\n 15.00\n 20.00\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nDec-25\nPercent\nPost-Stress CAR\nHistory\nBaseline\nAdverse\nSeverely Adverse\n \n39 \n \nPUBLIC \n \n7. Fiscal Developments \n \n7.0 Highlights \nThe provisional half year 2025 fiscal performance indicates that total revenue and grants grew, in year-\non-year terms, by 30.5 percent. Despite the significant growth, the outturn was about 3.2 percent below \ntarget. Expenditures were broadly contained, 14.3 percent below the programmed target. The primary \nbalance on commitment basis (the fiscal anchor) as at end-June 2025 recorded a surplus of 1.1 percent \nof GDP, surpassing the targeted surplus of 0.4 percent of GDP. The significant appreciation of the cedi \nhas reduced the debt burden and improved debt sustainability. \n \n7.1 Revenue and Grants \nTotal revenue and grants as of June 2025 was GH¢99,339.3 million (7.1% of GDP), less than the target \nof GH¢102,577.4 million (7.3% of GDP). This outturn represented a shortfall of 3.2 percent from the \ntarget but registered a year-on-year growth of 30.5 percent. The shortfall was mainly on the account of \nthe underperformance of non-tax revenue, taxes on international trade, and grants. \n \nNon-oil tax revenue was GH¢82,954.0 million (5.9% of GDP), accounting for 83.5 of the total revenue \nand grants, and was above its target of GH¢82,167 million (5.9% of GDP) by 1.0 percent. The \noverperformance was mainly due to corporate income tax exceeding its target by GH¢555.3 million \n(2.9%), and mineral royalties exceeding its target by GH¢143.0 million as well as the payment of a \ncapital gains tax of GH¢2,500 million paid by Newmont Ghana Limited on its sale of Akyem Mines. \n \nNon-oil non-tax revenue amounted to GH¢8,031.0 million (0.6% of GDP), representing 8.1 percent of \ntotal revenue and grants. The outturn was below its target of GH¢9,513 million (0.7% of GDP) by 15.6 \npercent. This is made-up of MDAs’ IGF retention, IGF lodgement, fees & user charges, \ndividends/interest & profits, and surface rentals from oil. The underperformance was on account of \nlower than programmed dividend/interest & profits as well as fees and charges collections for the \nperiod. \n \nOil and gas receipts was GH¢3,541.0 million below the target of GH¢6,201.00. The underperformance \nwas due to delays in receipts from corporate income tax from oil and the appreciation of the Ghana \ncedi. \n \nOther Revenue Measures (ESLA) of GH¢4,084 million was received, accounting for 4.1 percent of \ntotal revenue and was above its target of GH¢3,627 million by 12.6 percent. The overperformance was \nmainly due to increased consumption of petroleum products. \n \nGrants was GH¢730 million, which was below its target of GH¢1,069 million by 3.2 percent. This \nunderperformance was on the back of slowdown in disbursement to repurpose government project loan \nportfolio. \n \n7.2 Expenditure \nTotal expenditures for the review period amounted to GH¢109,594.2 million (7.8% of GDP) and within \nits programmed target of GH¢128,042.8 million (9.1% of GDP) by 14.4 percent. This outturn \nrepresented a year-on-year growth of 3.8 percent. All the expenditure lines were below target except \nfor compensation of employees. \n \n \n \n \n \n40 \n \nPUBLIC \n \nTable 7.1: Revenue and Grants \nMillion Ghana Cedis \n2024 \n2025 \n2025 \n2025 \n2025/2024 \n \nOUTTURN \nOUTTURN \nPROG \nDEVIATION \nY-O-Y \n \nQ1+Q2 \nQ1+Q2 \nQ1+Q2 \nOVER(+)/ \nBELOW(-) \nGROWTH \nTAX REVENUE \n \n60,367.2 \n \n84,348.5 \n \n85,297.45 \n \n(1.1) \n \n39.7 \nTAXES ON INCOME & PROPERTY \n \n29,346.6 \n \n43,733.3 \n \n41,778.30 \n \n4.7 \n \n49.0 \nPersonal \n \n9,377.0 \n \n12,832.5 \n \n13,161.37 \n \n(2.5) \n \n36.9 \nCompanies \n \n12,363.8 \n \n19,946.6 \n \n19,391.32 \n 2.9 \n \n61.3 \nCompany Taxes on Oil \n \n1,821.9 \n \n870.8 \n \n1,957.62 \n (55.5) \n \n(52.2) \nOthers \n \n5,783.9 \n \n10,083.3 \n \n7,267.99 \n 38.7 \n \n74.3 \nTAXES ON DOMESTIC GOODS AND SERVICES \n \n25,966.6 \n \n34,732.8 \n \n34,394.77 \n \n1.0 \n \n33.8 \nExcises \n \n3,250.8 \n \n3,044.7 \n \n4,003.98 \n (24.0) \n \n(6.3) \nVAT \n \n14,312.2 \n \n19,723.2 \n \n19,770.14 \n \n(0.2) \n \n37.8 \nNational Health Insurance Levy (NHIL) \n \n3,066.4 \n \n4,588.9 \n \n3,903.76 \n 17.6 \n \n49.7 \nGETFund Levy \n \n3,066.5 \n \n4,561.7 \n \n3,916.71 \n 16.5 \n \n48.8 \nCommunication Service Tax \n \n367.3 \n \n695.8 \n \n513.63 \n 35.5 \n \n89.4 \nE-Transaction Levy \n \n810.5 \n \n812.7 \n \n517.70 \n 57.0 \n \n0.3 \nCovid-19 Health Levy \n \n1,092.8 \n \n1,305.8 \n \n1,768.85 \n (26.2) \n \n19.5 \nTAXES ON INTERNATIONAL TRADE \n \n8,386.2 \n \n10,956.8 \n \n12,548.00 \n \n(12.7) \n \n30.7 \nImports Duty \n \n8,386.2 \n \n10,956.8 \n \n12,548.00 \n \n \nTAX REFUND \n \n(3,332.2) \n \n(5,074.4) \n \n(3,423.63) \n 48.2 \n \n52.3 \nSOCIAL CONTRIBUTIONS \n \n692.6 \n \n796.2 \n \n596.73 \n 33.4 \n \n15.0 \nNON-TAX REVENUE \n \n11,265.1 \n \n10,177.4 \n \n12,583.97 \n \n(19.1) \n \n(9.7) \nOTHER REVENUE \n \n2,539.5 \n \n3,287.3 \n \n3,030.63 \n \n8.5 \n \n29.4 \nDOMESTIC REVENUE \n \n74,864.3 \n \n98,609.4 \n \n101,508.8 \n \n(2.9) \n \n31.7 \nGRANTS \n \n1,237.9 \n \n729.9 \n \n1,068.6 \n \n(31.7) \n \n(41.0) \nProject Grants \n \n1,237.9 \n \n729.9 \n \n1,068.6 \n \n \nProgramme Grants \n0.0 \n0.0 \n726.3 \n \n \nTOTAL REVENUE & GRANTS \n \n76,102.2 \n \n99,339.3 \n \n102,577.4 \n \n(3.16) \n \n30.5 \n Source: Ministry of Finance \n \nCompensation of employees (including wages and salaries and social contributions) was GH¢38,842.49 \nmillion and accounted for 35.4 percent of total expenditure. This was marginally higher than the target \nof GH¢38,320.06 million by 1.4 precent and recorded year-on-year growth of 21.0 percent. In terms of \nfiscal flexibility, compensation of employees constituted 39.1 percent of domestic revenue mobilised \nduring the period under review. The overrun was largely due to last-minute recruitments in late 2024 \nand ad-hoc reviews of conditions of service. \n \n \n41 \n \nPUBLIC \nUse of goods and services totalled GH¢1,942.5 million, constituting 1.8 percent of total expenditure. \nThis was below the target of GH¢3,158.5 million by 38.5 percent and recorded a year-on-year decline \nof 63.0 percent. The significant decline was on the back of commitment control measures by the \ngovernment. \n \nTable 7.2: Expenditure \nMillion Ghana Cedis \n2024 \n2025 \n2025 \n2025 \n2025/2024 \n \nOUTTURN \nOUTTURN \nPROG \nDEVIATION \nY-O-Y \n \nQ1+Q2 \nQ1+Q2 \nQ1+Q2 \nOVER(+)/ \nBELOW(-) \nGROWTH \nCompensation of Employees \n \n32,091.6 \n \n38,842.5 \n \n38,320.1 \n \n1.4 \n \n21.0 \nUse of Goods and Services \n \n5,246.0 \n \n1,942.5 \n \n3,158.5 \n \n(38.5) \n \n(63.0) \nInterest Payment \n \n19,028.5 \n \n25,422.9 \n \n30,504.7 \n \n(16.7) \n \n33.6 \nDomestic \n \n18,463.1 \n \n21,629.8 \n \n26,532.2 \n \n(18.5) \n \n17.2 \nExternal (Due) \n \n565.4 \n \n3,793.1 \n \n3,972.4 \n \n(4.5) \n \n570.9 \nSubsidies \n \n145.3 \n - \n \n149.8 \n - \n \n3.1 \nGrants to Other Government Units \n \n19,272.1 \n \n24,866.4 \n \n24,921.9 \n \n(0.2) \n \n29.0 \nSocial Benefits \n \n376.8 \n \n1,464.5 \n \n1,618.5 \n \n(9.5) \n \n288.6 \nOther Expenditure \n \n12,976.9 \n \n9,950.4 \n \n11,310.9 \n \n(12.0) \n \n(23.3) \no/w Energy Sector Payment Shortfalls \n \n10,600.6 \n \n9,106.2 \n \n6,376.9 \n \n42.8 \n \n(14.1) \nCapital Expenditure \n \n16,418.5 \n \n7,105.1 \n \n18,058.5 \n \n(60.7) \n \n(56.7) \nDomestic financed \n \n8,904.1 \n \n3,951.7 \n \n8,641.9 \n \n(54.3) \n \n(55.6) \nForeign financed \n \n7,514.4 \n \n3,153.4 \n \n9,416.6 \n \n(66.5) \n \n(58.0) \nTOTAL EXPENDITURE \n \n105,555.7 \n \n109,594.2 \n \n128,042.8 \n \n(14.4) \n \n3.8 \nSource: Ministry of Finance \n \nTotal interest payments of GH¢25,422.9 million fell below the programmed target of GH¢30,504.7 \nmillion for the review period, accounting for 23.2 of total expenditure. Out of the total interest \npayments, domestic interest payment was GH¢21,629.8 falling below the target of GH¢26,532.2 \nmillion largely on the back of lower borrowing and interest cost. External interest payment of \nGH¢3,793.1 million also fell below its target of GH¢3,972.4 million due to the appreciation of the local \ncurrency, resulting in lower external debt service burden. \n \nCapital expenditure of GH¢7,105.1 million (0.5% of GDP), representing 6.5 percent of total \nexpenditure, was below its programmed target of GH¢18,058.5 million (1.3% of GDP) by 60.7 percent \nand registered a year-on-year decline of 56.7 percent. Capital expenditure comprised GH¢3,951.7 \nmillion in domestic-financed spending (significantly below the target of GH¢8,641.9 million), and \nGH¢3,153.4 million in foreign-financed spending (also falling short of the target of GH¢9,416.6 \nmillion). The underperformance of capital expenditure was largely due to a shortfall in ABFA revenue \nearmarked for the Big Push projects, the implementation of government commitment control measures, \nand the appreciation of the local currency. \n \n \n42 \n \nPUBLIC \nOther expenditure amounted to GH¢9,950.4 million, representing 9.1 percent of total expenditure for \nthe half year. This was 12 percent below the target of GH¢11,310.9 million and reflected a year-on-\nyear decline of 23.3 percent. The underperformance was mainly due to the absence of programmed \ntransfers to the GoldBod. \n \nGrants to other government units amounted to GH¢24,866.4 million, representing 22.7 percent of total \nexpenditure. This was 0.2 percent below the target of GH¢24,921.9 million but reflected a year-on-year \ngrowth of 29.0 percent. \n \n \n7.3 Budget Balance and Financing \nGovernment budgetary operations resulted in an overall budget deficit (cash basis) of \nGH¢15,119.5million (1.1% of GDP). This was less than the targeted deficit of GH¢32,961.7 million \n(2.4% of GDP) and the deficit of GH¢37,335.5 million (3.2% of GDP) for the corresponding period in \n2024. The overall deficit was financed from both domestic and external sources. Government borrowed, \non net basis, GH¢13,076.8 million from domestic sources and relied on net foreign financing of \nGH¢2,762.4 million. The corresponding primary balance (cash basis) for 2025H1 improved to a surplus \nof GH¢10,303.5 million (0.4% of GDP), from a deficit of GH¢18,307 million (1.6% of GDP) in the \nsame period of 2024. The primary balance on commitment basis (the fiscal anchor) improved to a \nsurplus of GH¢15,083.4 million (1.1% of GDP), from a deficit of GH¢4,161.3 million (0.4% of GDP) \nin the same period of 2024 surpassing the half year target of GH¢5,039.3 million (0.4% of GDP). \n \nTable 7.3: Budget Balance and Financing \nMillion Ghana Cedis \n2024 \n2025 \n2025 \n2025 \n2025/2024 \n \nOUTTURN \nOUTTURN \nPROG \nDEVIATION \nY-O-Y \n \nQ1+Q2 \nQ1+Q2 \nQ1+Q2 \nOVER(+)/ \nBELOW(-) \nGROWTH \nRevenue & Grants \n \n76,102.2 \n \n99,339.3 \n \n102,577.4 \n \n(3.16) \n \n30.5 \nExpenditure \n \n105,555.7 \n \n109,594.2 \n \n128,042.8 \n \n(14.4) \n \n3.8 \nOverall balance (commitment) \n \n(29,453.5) \n \n(10,254.9) \n \n(25,465.4) \n \n(59.7) \n \n(65.2) \n(percent of GDP) \n \n(2.5) \n \n(0.7) \n \n(1.8) \n \n \nArrears Clearance (Net) \n \n(14,145.7) \n \n(4,779.9) \n \n(7,496.3) \n \n(36.2) \n \n(66.2) \no/w Clearance of Arrears \n \n(18,683.5) \n \n(4,779.9) \n \n(7,496.3) \n \n \n(74.4) \no/w Payables build-up \n \n4,537.8 \n0.0 \n0.0 \n \n \nOverall balance (cash) \n \n(43,599.2) \n \n(15,034.8) \n \n(32,961.7) \n \n(54.4) \n \n(65.5) \n(percent of GDP) \n \n(3.7) \n-1.1 \n-2.4 \n \n \nDiscrepancy \n \n6,263.6 \n \n(84.7) \n \n0.0 \n \n \nOverall balance (incl. Divestiture and Discrepancy) \n \n(37,335.5) \n \n(15,119.5) \n \n(32,961.7) \n \n-54.1 \n \n(59.5) \n(percent of GDP) \n \n(3.2) \n-1.1 \n-2.4 \n \n \nFinancing \n \n37,335.5 \n \n15,119.5 \n \n32,961.7 \n \n(54.1) \n \n(59.5) \nForeign (net) \n \n16,242.9 \n \n2,762.4 \n \n14,626.8 \n \n(81.1) \n \n(83.0) \nBorrowing \n \n17,321.9 \n \n6,928.4 \n \n19,125.0 \n \n(63.8) \n \n(60.0) \n \n43 \n \nPUBLIC \nProject loans \n \n6,276.5 \n \n2,423.4 \n \n8,348.0 \n \n(71.0) \n \n(61.4) \nProgramme Loans \n \n11,045.4 \n \n4,505.0 \n \n10,777.0 \n \n \no/w IMF \n \n7,189.8 \n \n4,505.0 \n \n5,878.4 \n \n \no/w World Bank DPO \n \n3,855.6 \n - \n4,898.6 \n \n \nSovereign Bond \n - \n0.0 \n - \n \n \nAmortisation (due) \n \n(1,078.9) \n \n(4,166.1) \n \n(4,498.2) \n \n(7.4) \n \n286.1 \nDomestic (net) \n \n21,603.3 \n \n13,076.8 \n \n18,865.6 \n \n(30.7) \n \n(39.5) \nBanking \n \n(3,146.8) \n \n(568.2) \n \n9,976.2 \n \n(105.7) \n \n(81.9) \nBank of Ghana \n \n(4,075.0) \n \n4,582.7 \n - \n \n \n(212.5) \nComm. Banks \n \n928.2 \n \n(5,150.9) \n \n9,976.2 \n \n(151.6) \n \n(654.9) \nNon-banks \n \n24,750.1 \n \n13,645.0 \n \n8,889.4 \n \n \n(44.9) \nGhana Petroleum Funds \n \n(814.1) \n \n(719.7) \n \n(430.2) \n \n \n(11.6) \nTransfer to Ghana Petroleum Funds \n \n(1,336.7) \n \n(825.2) \n \n(1,434.1) \n \n \n(38.3) \no/w Stabilisation Fund \n \n(935.7) \n \n(577.6) \n \n(1,003.9) \n \n \n(38.3) \no/w Heritage Fund \n \n(401.0) \n \n(247.5) \n \n(430.2) \n \n \n(38.3) \nTransfer from Stabilisation Fund \n \n522.6 \n \n105.5 \n \n1,003.9 \n \n \nSinking Fund \n \n303.3 \n - \n(100.4) \n \n \nContingency Fund \n - - - \n \n \nNominal GDP (Including Oil) \n \n1,176,219.9 \n \n1,400,006.1 \n \n1,400,006.1 \n \n \nNominal GDP (Excluding oil) \n \n1,128,205.1 \n \n1,350,563.8 \n \n1,350,563.8 \n \n \nSource: Ministry of Finance \n \n7.4 Public Debt Analysis \nThe outstanding stock of public debt as of end-June 2025 stood at GH¢613,000.06 million, equivalent \nto 43.8 percent of GDP. This reflects a decline of GH¢113,679.94 million (8.1 percent of GDP) from \nthe end-December 2024 level of GH¢726,680.00 million (61.8 percent of GDP). For the corresponding \nperiod in 2024, the debt-to-GDP ratio was 63.3 percent. The reduction was largely driven by the \nrestructuring of Eurobond debt and the significant appreciation of the Ghana cedi. Of the total public \ndebt, external debt amounted to GH¢300,278.09 million (21.45 percent of GDP), while domestic debt \nstood at GH¢312,722.51 million (22.34 percent of GDP). In terms of the composition of total public \ndebt, external debt accounted for approximately 49 percent, with domestic debt representing the \nremaining 51 percent. \n \n \n \n \n \n \n \n44 \n \nPUBLIC \nTable 7.4: Public Debt \n \n2024 \n2024 \n2025 \n2025 \n2025 \n2025 \n2025 \n2025 \nJun 2025 -\nDec 2024 \n \nJUNE \nDECEMBER \nJANUARY \nFEBRUARY \nMARCH \nAPRIL \nMAY \nJUNE \nCHANGE \nTOTAL DOMESTIC DEBT (GH¢m) \n289,994.4 \n309,844.8 \n320,079.9 \n328,036.0 \n326,903.1 \n322,295.4 \n315,630.3 \n312,722.5 \n2,877.7 \n SHORT TERM \n93,542.5 \n111,165.7 \n121,185.1 \n125,962.4 \n124,988.6 \n121,822.7 \n117,440.3 \n114,734.1 \n3,568.4 \n MEDIUM-TERM \n127,374.6 \n129,051.2 \n129,422.1 \n131,053.5 \n130,943.1 \n129,624.0 \n127,176.7 \n126,984.6 \n(2,066.6) \n LONG-TERM \n67,771.6 \n68,559.9 \n68,559.9 \n70,116.2 \n70,116.2 \n70,116.2 \n70,495.8 \n70,483.5 \n1,923.6 \n STANDARD LOANS \n1,305.7 \n1,068.1 \n912.9 \n903.8 \n855.1 \n732.5 \n517.5 \n520.3 \n(547.7) \nHOLDINGS OF DOMESTIC DEBT \n(GH¢m) \n288,688.7 \n309,844.8 \n320,079.9 \n328,036.0 \n326,903.1 \n322,295.4 \n315,630.3 \n312,722.5 \n2,877.7 \n BANKING SYSTEM \n136,270.8 \n135,756.9 \n139,066.2 \n141,488.5 \n135,691.3 \n133,060.1 \n126,837.1 \n125,665.5 \n(10,091.4) \n NON-BANK \n139,211.2 \n159,604.8 \n166,505.2 \n171,422.1 \n176,331.5 \n174,334.6 \n174,817.0 \n173,202.2 \n13,597.4 \n FOREIGN SECTOR (Non-Resident) \n13,206.7 \n13,415.0 \n13,595.7 \n14,221.6 \n14,025.2 \n14,168.2 \n13,458.7 \n13,334.4 \n(80.6) \n STANDARD LOANS \n \n1,068.1 \n912.9 \n903.8 \n855.1 \n732.5 \n517.5 \n520.3 \n(547.7) \nTOTAL EXTERNAL(US$m) \n31,222.0 \n28,322.6 \n28,223.7 \n28,325.1 \n28,479.8 \n28,822.1 \n28,825.1 \n29,110.3 \n787.6 \n MULTILATERAL \n10,202.0 \n11,235.7 \n11,297.4 \n11,363.5 \n11,390.6 \n11,537.0 \n11,506.5 \n11,637.2 \n401.5 \n BILATERAL \n5,459.8 \n5,274.0 \n5,278.8 \n5,313.2 \n5,403.5 \n5,552.5 \n5,545.1 \n5,664.2 \n390.2 \n COMMERCIAL \n15,560.2 \n11,812.9 \n11,647.5 \n11,648.3 \n11,685.7 \n11,732.6 \n11,773.5 \n11,808.9 \n(4.0) \nTOTAL EXTERNAL(GH¢m) \n454,851.0 \n416,835.2 \n432,040.0 \n440,109.0 \n442,513.7 \n408,037.1 \n296,469.3 \n300,278.1 \n(116,557.1) \nTOTAL PUBLIC DEBT (GH¢m) \n744,845.4 \n726,680.0 \n752,119.9 \n768,145.0 \n769,416.8 \n730,332.5 \n612,099.6 \n613,000.6 \n(113,679.4) \nEXCHANGE RATE (End Period \nSelling MOF) \n14.5683 \n14.7174 \n15.3077 \n15.5378 \n15.5378 \n14.1571 \n10.2851 \n10.3152 \n \nMEMORANDUM ITEMS \n \n \n \n \n \n \n \n \n \nNOMINAL GDP ( GH¢m) \n1,176,219.9 \n1,176,219.9 \n1,400,006.1 \n1,400,006.1 \n1,400,006.1 \n1,400,006.1 \n1,400,006.1 \n1,400,006.1 \n \nTOTAL DEBT /GDP RATIO (%) \n63.33 \n61.78 \n53.72 \n54.87 \n54.96 \n52.17 \n43.72 \n43.79 \n \nEXTERNAL DEBT/GDP \n38.7 \n35.4 \n30.9 \n31.4 \n31.6 \n29.1 \n21.2 \n21.4 \n \nDOMESTIC DEBT/GDP \n24.7 \n26.3 \n22.9 \n23.4 \n23.4 \n23.0 \n22.5 \n22.3 \n \nEXTERNAL DEBT/TOTAL DEBT \n61.1 \n57.4 \n57.4 \n57.3 \n57.5 \n55.9 \n48.4 \n49.0 \n \nDOMESTIC DEBT/TOTAL DEBT \n38.9 \n42.6 \n42.6 \n42.7 \n42.5 \n44.1 \n51.6 \n51.0 \n \nSource: Bank of Ghana, Ministry of Finance \n \n7.5 Outlook \nSystemic revenue leakages at key customs collection points, along with the smuggling of goods, \ncontinue to undermine revenue mobilisation efforts. Wage and salary overruns are placing significant \npressure on the compensation budget and pose a threat to fiscal consolidation. Additionally, rising fuel \ncosts to support power generation could place further pressure on the national budget and warrant close \nmonitoring. \n \n \n \n \n \n45 \n \nPUBLIC \n7.6 Conclusion \nThe fiscal performance for the first half of 2025 showed significant improvement, with the primary \nbalance on a commitment basis (the fiscal anchor) recording a surplus of 1.1 percent of GDP, surpassing \nthe target of 0.4 percent. Total revenue and grants posted a mixed performance: while non-oil tax \nrevenue exceeded targets, petroleum receipts, non-oil non-tax revenue, and grants underperformed. \nExpenditures were tightly managed, with total spending 14.3 percent below the programmed amount. \nInterest payments declined, driven by reduced borrowing, lower interest costs, and the appreciation of \nthe local currency. Budget financing relied heavily on domestic sources, with net domestic financing \namounting to GH¢13,076.8 million—well below the target. The record appreciation of the Ghana cedi \ncontributed to a reduction in the debt burden and accelerated progress toward debt sustainability. \n \n \n \n46 \n \nPUBLIC \n8. Price Developments \n \n8.0 Highlights \nDomestic inflation has declined consistently through the first half of 2025, cumulatively dropping by \n10.1 percentage points since December 2024. The decline has been broad-based, across both the food \nand non-food categories. It has also been driven by tight monetary policy and a sharp appreciation of \nthe domestic currency. Staff projections show a high probability of inflation declining to 12 percent in \nthe third quarter of 2025 and further down to the medium-term target of 8 ± 2 percent by the end of \n2025. \n \n8.1 Global Growth and Inflation Developments \nThe global disinflation process has stalled in some advanced economies, primarily due to rising food, \nenergy and services costs. Moreover, recent U.S. tariff actions and corresponding retaliatory measures \nhave heightened long-term inflation expectations in many emerging market economies. As a result, \nglobal inflation is projected to remain elevated in the near-term, with some upside risks—mainly \nstemming from persistent trade protectionism and policy uncertainty. Global inflation is expected to \nreturn to target levels sooner in advanced economies, reaching 2.2 percent by 2026 from 2.5 percent in \n2025. In contrast, emerging market and developing economies will see a slower decline, with inflation \neasing to 4.6 percent from 5.5 percent over the same period (World Economic Outlook, April 2025). \n \nGlobal economic activity is expected to be significantly impacted by the rapid escalation of trade \ntensions and exceptionally high levels of policy uncertainty. The direct effects of new trade measures—\nalongside their indirect spillovers through heightened uncertainty and deteriorating sentiments—\nprompted a downgrade of global growth projections (World Economic Outlook, April 2025). These \nrevisions were broad-based across regions, reflecting widespread vulnerabilities. Moreover, high-\nfrequency indicators, such as purchasing managers’ surveys, further signal a slowdown in growth \nmomentum. \n \nFigure 8.1: Advanced Economies Headline Inflation Rates (%) \n \nSource: Trading Economics \n \n \n \n \n \n-2\n-1\n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\n10\n11\n12\nApr-21\nJun-21\nAug-21\nOct-21\nDec-21\nFeb-22\nApr-22\nJun-22\nAug-22\nOct-22\nDec-22\nFeb-23\nApr-23\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nJun-25\nUS\nUK\nJapan\nEuro Area\nInflation in Advanced Economies \n(Year-on-Year, percent)\nSource: Trading Economics\n \n47 \n \nPUBLIC \n \nFigure 8.2: Emerging Markets Economies Headline Inflation Rates (%) \n \nSource: Trading Economics \n \n \nFigure 8.3: Global growth projections \n \nSource: IMF WEO, April 2025 \n \n8.2 Domestic Price Developments \nDomestic inflation declined steadily throughout the first half of 2025, with broad-based moderation \nacross both food and non-food categories. Headline inflation fell to 13.7 percent in June 2025, down \nfrom 23.8 percent in December 2024, driven by tight monetary policy and a sharp appreciation of the \ndomestic currency. This represents a cumulative decline of 10.1 percentage points over the six-month \nperiod. \n \nNon-food inflation dropped significantly from 20.3 percent in December 2024 to 11.4 percent in June \n2025, while food inflation also saw a sharp decline—falling to 16.3 percent from 27.8 percent over the \nsame period. These improvements were largely due to a 42.6 percent year-to-date appreciation of the \nGhana Cedi as at June 2025, which helped ease imported inflation, stabilize prices and re-anchor \ninflation expectations. Additionally, stepped-up liquidity sterilization efforts and a downward revision \nin ex-pump petroleum prices, which triggered a 15 percent reduction in transport fares, further \nsupported the disinflation process. \n \n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\n-2\n0\n2\n4\n6\n8\n10\n12\n14\nApr-21\nJun-21\nAug-21\nOct-21\nDec-21\nFeb-22\nApr-22\nJun-22\nAug-22\nOct-22\nDec-22\nFeb-23\nApr-23\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nJun-25\nChina\nBrazil\nTurkey (LHS)\nInflation in Emerging Markets Economies\n(Year-on-Year, percent)\nSource: Trading Economics\n \n48 \n \nPUBLIC \nFigure 8.4: Year on Year Inflation \n \nSource: GSS and Bank of Ghana Staff Calculations \n \nThe Bank’s main measure of core inflation continues to ease. The core inflation rate, which excludes \nenergy and utility items from the consumer basket, fell to 13.0 percent in June 2025 from 23.1 percent \nin December 2024. An assessment of inflation expectations which incorporates surveys of banks, \nbusinesses, and consumers, indicates well-anchored inflation expectations across all economic sectors. \n \nFigure 8.5: Headline vs Core Inflation (%) \n \nSource: GSS and Bank of Ghana Staff Calculations \n \nOn a month-on-month basis, headline inflation fell sharply to -1.2 percent in June 2025 from 0.7 percent \nin May 2025, on account of the 15 percent reduction in transport fares which took effect in May 2025 \nand the recent appreciation in the Cedi. Monthly food inflation dropped to -0.5 percent in June 2025 \nfrom 0.6 percent in May 2025. Similarly, month-on-month non-food inflation dropped significantly to \n-1.8 percent from 0.6 percent over the same period. \n \n \n \n \n \n \n0\n10\n20\n30\n40\n50\n60\nJun-22\nAug-22\nOct-22\nDec-22\nFeb-23\nApr-23\nJun-23\nAug-23\nOct-23\nDec-23\nFeb-24\nApr-24\nJun-24\nAug-24\nOct-24\nDec-24\nFeb-25\nApr-25\nJun-25\nYear on Year Inflation\nHeadline\nLower Band\nUpper Band\n4\n14\n24\n34\n44\n54\n64\nJun-22\nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nJul-23\nAug-23\nSep-23\nOct-23\nNov-23\nDec-23\nJan-24\nFeb-24\nMar-24\nApr-24\nMay-24\nJun-24\nJul-24\nAug-24\nSep-24\nOct-24\nNov-24\nDec-24\nJan-25\nFeb-25\nMar-25\nApr-25\nMay-25\nJun-25\nHeadline vs Core Inflation (%)\nCore 1 (Excluding Fuel, and Utilities)\nHeadline Inflation\n \n49 \n \nPUBLIC \nFigure 8.6: Month-on-Month Inflation (%) \n \nSource: Ghana Statistical Service \n \n \n \nTable 8.1: CPI Components \n \n \n8.3 Inflation Risk Assessment and Outlook \nHeadline inflation is expected to decline to 12 percent in the third quarter of 2025 and further down to \nthe medium-term target of 8 ± 2 percent by the end of 2025, reflecting the impact of monetary policy \ntightening, the appreciation of the cedi, and the ongoing fiscal consolidation. \n \nMoreover, supply-side pressures have eased, reducing their contribution to food and headline inflation. \nIn the outlook, risks to inflation are tilted to the downside. However, upside risks remain, including \nbroader supply chain challenges, global trade tensions, a 2.5 percent upward adjustment in utility tariffs, \nand the introduction of a new GHS 1.0 energy levy on ex-pump prices, which could impact inflation. \n \nGoing forward, exchange rate stability is expected to persist, supported by significant improvements in \nthe external sector. These improvements have led to the accumulation of international reserves, far \nexceeding the ECF-supported program target, which will further aid the disinflation process. \nAdditionally, factors such as a tight monetary policy stance, ongoing fiscal consolidation, and stable \ncrude oil prices could help offset the upside risks to disinflation. \n-3\n-2\n-1\n0\n1\n2\n3\n4\n5\n6\nJun-\n23\nJul-\n23\nAug-\n23\nSep-\n23\nOct-\n23\nNov-\n23\nDec-\n23\nJan-\n24\nFeb-\n24\nMar-\n24\nApr-\n24\nMay-\n24\nJun-\n24\nJul-\n24\nAug-\n24\nSep-\n24\nOct-\n24\nNov-\n24\nDec-\n24\nJan-\n25\nFeb-\n25\nMar-\n25\nApr-\n25\nMay-\n25\nJun-\n25\nHeadline\n3.2\n3.6\n-0.2\n1.9\n0.3\n1.8\n1.2\n2.0\n1.6\n0.8\n1.8\n3.2\n2.9\n2.1\n-0.7\n2.8\n0.9\n2.6\n1.8\n1.7\n1.3\n0.2\n0.8\n0.7\n-1.2\nFood\n3.9\n3.8\n-0.3\n1.6\n-0.3\n1.2\n1.3\n1.6\n1.9\n1.0\n2.1\n2.7\n5.1\n1.7\n-2.2\n4.2\n0.3\n3.8\n2.8\n2.0\n1.8\n-0.2\n0.9\n0.9\n-0.5\nNon-food\n2.6\n3.4\n-0.2\n2.1\n0.9\n2.3\n1.0\n2.4\n1.3\n0.7\n1.5\n3.6\n0.9\n2.4\n0.7\n1.6\n1.4\n1.6\n0.7\n1.4\n0.9\n0.7\n0.7\n0.6\n-1.8\nMonthly Inflation\nWeghts\nDec\nApr\nMay\nJun\nJul\nDec\nJan\nFeb\nMar\nApr\nMay\nJun\n(%)\nOverall \n100.0\n23.2\n25.0\n23.1\n22.8\n20.9\n23.8\n23.5\n23.1\n22.4\n21.2\n18.4\n13.7\nFood and Beverages\n42.7\n28.7\n26.8\n22.6\n24.0\n21.5\n27.8\n28.6\n28.1\n26.5\n25.0\n22.8\n16.3\nNon-food\n57.4\n18.7\n23.5\n23.6\n21.6\n20.5\n20.3\n19.2\n18.8\n18.7\n17.9\n14.4\n11.4\nAlcoholic Beverages, Tobacco & Narcotics\n3.9\n38.2\n39.4\n34.2\n32.3\n26.8\n28.4\n27.2\n25.6\n23.8\n24.0\n22.4\n16.0\nClothing and footwear\n8.0\n22.3\n23.8\n20.5\n18.2\n16.9\n20.0\n19.8\n19.2\n19.3\n19.7\n19.3\n17.2\nHousing and Utilities\n10.2\n19.5\n28.1\n26.9\n26.0\n28.6\n26.3\n24.6\n24.3\n25.1\n22.5\n21.6\n24.9\nFurnishings, Household Equipment\n3.2\n26.9\n21.3\n17.9\n17.0\n14.3\n16.7\n15.3\n15.4\n15.3\n15.1\n13.9\n10.5\nHealth\n0.7\n23.0\n31.2\n26.5\n22.6\n21.2\n21.4\n18.4\n16.6\n16.8\n15.0\n14.1\n11.3\nTransport\n10.5\n4.4\n10.3\n20.3\n19.0\n18.1\n16.8\n16.9\n17.9\n16.8\n14.9\n3.1\n-8.5\nInformation and Communication\n3.6\n14.2\n14.7\n13.2\n10.4\n10.1\n12.0\n11.6\n10.8\n10.8\n10.9\n9.7\n10.4\nRecreation & Culture\n3.5\n24.9\n28.7\n24.1\n20.5\n17.1\n17.4\n17.4\n16.5\n20.7\n22.8\n22.5\n20.1\nEducation\n6.6\n13.9\n23.4\n25.2\n20.9\n18.0\n19.1\n13.9\n12.3\n11.3\n11.7\n6.3\n6.0\nRestaurants and accommodation services\n4.3\n28.0\n33.9\n31.6\n30.7\n28.3\n16.5\n16.5\n14.2\n13.3\n10.7\n10.4\n9.6\nInsurance and Financial services\n0.4\n8.1\n9.6\n8.7\n6.2\n11.3\n16.5\n15.4\n16.1\n16.6\n16.9\n16.9\n15.9\nPersonal care, social protection & Miscellaneous services\n2.5\n31.1\n31.9\n24.3\n19.5\n16.0\n19.3\n17.9\n17.1\n17.4\n17.2\n17.2\n11.4\n2023\nCPI Components (%)\n2024\n2025\nSource: Ghana Statistical Service\n \n50 \n \nPUBLIC \n \n \nDecision on the Monetary Policy Rate \nOverall, the Committee noted that macroeconomic conditions have significantly improved, inflation \nexpectations are broadly anchored, external buffers have strengthened, and confidence in the economy \nis returning. The July forecast also shows that headline inflation is expected to decline further in the \nthird quarter of 2025 and trend within the medium-term target of 8±2 percent by the end of 2025, earlier \nthan initial projections. However, there are upside risks to the inflation outlook, which include potential \nsupply chain challenges emanating from the global trade tensions, and upward adjustment in utility \ntariffs. This notwithstanding, the impact of these risks on inflation are expected to be offset by \nappropriately tight monetary policy stance and continued fiscal consolidation. \n \nGiven these considerations, the Committee, by a majority decision, voted to lower the Monetary Policy \nRate by 300 basis points to 25.0 percent. Looking ahead, the Committee will continue to assess \nincoming data and likely reduce the policy rate further, should the disinflation trend continue. The \nCommittee remains committed to the price stability mandate, while creating conditions for inclusive \nand sustainable growth. \n \n \n \n \n51 \n \nPUBLIC \nAPPENDIX \n \nTable A.1: Sources of Growth in Total Liquidity (GH¢ Millions, unless otherwise stated) \n \n Source: Bank of Ghana Staff Calculations \n \nTable A.2: Sources of Growth in Reserve Money (GH¢ Millions, unless otherwise stated) \n \nSource: Bank of Ghana Staff Calculations \nAppendix 1: Sources of Growth in Total Liquidity (M2+) (millions of Ghana cedis unless otherwise stated)\nMay-23\nJun-23\nDec-23\nJun-24\nSep-24\nDec-24\nMar-25\nMay-25\nJun-25\n1 Net Foreign Assets\n(4341.98)\n649.68\n21710.89\n49084.99\n65801.73\n87417.32\n102671.42\n75204.72\n75772.12\n Bank of Ghana\n(17154.60) (13750.27)\n4021.06\n23057.19\n34489.38\n47647.12\n65439.11\n50189.42\n57633.89\n Commercial Banks\n12812.61\n14399.95\n17689.83\n26027.80\n31312.35\n39770.20\n37232.31\n25015.30\n18138.23\n2 Net Domestic Assets\n211287.26\n208970.93\n228308.31\n231954.03\n245378.55\n242321.48\n241260.50\n250805.60\n249222.50\n3 ow: Claims on government (net)\n144436.51\n137161.10\n115681.46\n117391.93\n130147.19\n113291.69\n114016.14\n108639.33\n108861.84\n4 ow: Claims on Private sector( Incl. PE's)\n86924.88\n87839.24\n86096.51\n93719.28\n101487.64\n105901.21\n104292.76\n96693.98\n99507.29\n BOG OMO Sterilisation Acc.\n(31024.06) (27273.48)\n(24795.37)\n(16244.51)\n(21138.18)\n(18142.88)\n(35561.16)\n(60803.22)\n(75269.68)\n5 Total Liquidity (M2+)\n206945.28\n209620.61\n250019.20\n281039.02\n311180.28\n329738.77\n343931.92\n326010.32\n324994.62\n6 ow: Broad Money Supply (M2)\n149200.43\n150070.56\n185425.80\n203530.25\n229253.49\n247761.93\n255756.31\n267720.94\n265190.99\n7 ow: Foreign Currency Deposits(¢million)\n57744.85\n59550.05\n64593.40\n77508.78\n81926.79\n81976.84\n88175.61\n58289.38\n59803.63\nChange from previous year (in per cent)\n8 Net Foreign Assets\n(34.09)\n(108.70)\n(310.35)\n7455.25\n(3972.59)\n302.64\n201.22\n78.59\n54.37\n9 Net Domestic Assets\n41.58\n36.92\n19.79\n11.00\n11.10\n6.14\n6.27\n7.19\n7.44\n10 ow: Claims on government (net)\n52.27\n42.22\n(9.28)\n(14.41)\n9.93\n(2.07)\n(3.66)\n(11.53)\n(7.27)\n11 ow: Claims on Private sector( Incl. PE's)\n24.64\n23.12\n1.20\n6.69\n15.14\n23.00\n21.00\n6.86\n6.18\n12 ow: BOG OMO Sterilisation Acc.\n(498.64)\n(495.08)\n(220.96)\n40.44\n42.22\n26.83\n(57.31)\n(268.27)\n(363.35)\n12 Total Liquidity (M2+)\n45.08\n44.41\n38.69\n34.07\n41.99\n31.89\n31.71\n18.08\n15.64\n13 Broad Money Supply (M2)\n41.29\n40.93\n37.21\n35.62\n44.50\n33.62\n34.48\n34.76\n30.30\n14 Foreign Currency Deposits (FCDs)\n55.89\n54.00\n43.15\n30.16\n35.38\n26.91\n24.30\n(24.71)\n(22.84)\nCummulative change from previous year end (in per cent)\n15 Net Foreign Assets\n(57.93)\n(106.29)\n(310.35)\n126.08\n203.08\n302.64\n17.45\n(13.97)\n(13.32)\n16 Net Domestic Assets\n10.86\n9.65\n19.79\n1.60\n7.48\n6.14\n(0.44)\n3.50\n2.85\n17 o/w: Claims on government (net)\n13.27\n7.56\n(9.28)\n1.48\n12.50\n(2.07)\n0.64\n(4.11)\n(3.91)\n18 Broad Money(M2+)\n14.80\n16.28\n38.69\n12.41\n24.46\n31.89\n4.30\n(1.13)\n(1.44)\nAnnual per cent contribution to money growth\n19 Net Foreign Assets\n1.57\n5.59\n17.77\n23.11\n30.80\n26.28\n26.27\n11.99\n9.50\n20 NDA\n43.51\n38.82\n20.92\n10.96\n11.19\n5.60\n5.45\n6.10\n6.14\n21 Total Liquidity (M2+)\n45.08\n44.41\n38.69\n34.07\n41.99\n31.89\n31.71\n18.08\n15.64\nMemorandum items\n22 Reserve Money \n61727.91\n62343.44\n87987.66\n110578.33\n120771.47\n130481.72\n143154.12\n138174.99\n112735.91\n23 NFA ($million)\n(395.75)\n59.08\n1827.52\n3365.21\n4164.67\n5946.76\n6611.17\n7337.05\n7349.38\n24 Currency ratio\n0.18\n0.18\n0.18\n0.19\n0.20\n0.24\n0.22\n0.24\n0.22\n25 FCD/M2+ \n0.28\n0.28\n0.26\n0.28\n0.26\n0.25\n0.26\n0.18\n0.18\n26 FCD/Total Deposit \n0.33\n0.33\n0.30\n0.33\n0.32\n0.31\n0.31\n0.22\n0.22\n27 RM multiplier\n2.42\n2.41\n2.11\n1.84\n1.90\n1.90\n1.79\n1.94\n2.35\nAppendix 2: Sources of Growth in Reserve Money (millions of Ghana cedis unless otherwise stated)\nJun-23\nDec-23\nJun-24\nSep-24\nDec-24\nMar-25\nMay-25\nJun-25\n1 Net Foreign Assets ( NFA)\n(13,750.27)\n \n4021.1\n23057.2\n34489.4\n47647.1\n65439.1\n50189.4\n57633.9\n2 Net Domestic Assets ( NDA)\n76093.7\n84278.4\n87521.1\n86282.1\n82834.6\n77715.0\n87985.6\n55102.0\nof which:\n3 ow: Claims on government (net)\n82951.8\n54356.1\n55138.4\n69537.6\n56031.5\n56703.2\n56530.1\n53033.0\n4 Claims on DMB's (net)\n(8502.2)\n(9878.4)\n(13451.5) (26897.1) (21783.3) (15238.3) (14131.6) (27840.7)\n5 OMO Sterilisation Account.\n(27273.5)\n(24795.4) (16244.5) (21138.2) (18142.9) (35561.2) (60803.2) (75269.7)\n6 Reserve Money ( RM)\n62343.4\n88299.4\n110578.3 120771.5 130481.7 143154.1 138175.0 112735.9\n7 ow:Currency \n31238.5\n37620.7\n44895.6\n52752.8\n64127.7\n61995.8\n62084.4\n58090.4\n8 DMB's reserves\n25888.2\n38050.2\n58972.2\n60760.4\n58769.1\n73241.6\n67995.3\n46779.8\n9 Non-Bank deposits\n5216.7\n12628.5\n6710.6\n7258.3\n7584.9\n7916.7\n8095.3\n7865.8\nChange from previous year (in per cent)\n10 Net Foreign Assets\n114.8\n(123.0)\n(267.7)\n(312.1)\n1084.9\n393.8\n212.1\n150.0\n11 Net Domestic Assets\n39.3\n(1.5)\n15.0\n8.2\n(1.7)\n2.6\n(4.6)\n(37.0)\n12 ow: Claims on government (net)\n61.3\n(31.1)\n(33.5)\n11.5\n3.1\n13.2\n(0.9)\n(3.8)\n13 Claims on DMB's (net)\n(81.7)\n(143.5)\n(58.2)\n(131.1)\n(120.5)\n4.9\n(18.6)\n(107.0)\n14 OMO Sterilisation Account.\n(495.1)\n(221.0)\n40.4\n42.2\n26.8\n(57.3)\n(268.3)\n(363.4)\n15 Reserve Money ( RM)\n(8.5)\n29.7\n25.2\n36.8\n47.8\n9.7\n5.9\n(13.6)\n16 ow:Currency \n(0.6)\n19.7\n19.3\n40.2\n70.5\n(3.3)\n(3.2)\n(9.4)\nCumulative change from previous year end (in per cent)\n17 Net Foreign Assets ( NFA)\n(21.4)\n(123.0)\n473.4\n757.7\n1084.9\n37.3\n5.3\n21.0\n18 Net Domestic Assets ( NDA)\n(11.1)\n(1.5)\n3.8\n2.4\n(1.7)\n(6.2)\n6.2\n(33.5)\n19 o/w: Claims on government (net)\n5.2\n(31.1)\n1.4\n27.9\n3.1\n1.2\n0.9\n(5.4)\n20 Reserve Money ( RM)\n(8.5)\n29.7\n25.2\n36.8\n47.8\n9.7\n5.9\n(13.6)\nAnnual per cent contribution\n21 Net Foreign Assets\n(15.23)\n31.58\n59.04\n79.93\n49.41\n58.63\n31.50\n31.27\n22 Net Domestic Assets ( NDA)\n44.47\n(1.93)\n18.33\n10.27\n(1.64)\n2.20\n(3.89)\n(29.32)\n23 RM growth ( y-o-y)\n29.24\n29.65\n77.37\n90.20\n47.77\n60.83\n27.61\n1.95\n \n52 \n \nPUBLIC \nTable A.3: DMB’s Credit Allocations (GH¢ Millions, unless otherwise stated) \n \nSource: Bank of Ghana \n \nTable A.4: Asset and Liability Structure of the Banking Sector \n \nSource: Bank of Ghana Staff Calculations \n \nTable A.5: Credit Growth \n \nSource: Bank of Ghana Staff Calculations \n \n \nTable A.6: Contingent Liabilities \n \nSource: Bank of Ghana Staff Calculations \n \nAs at end-June .2023\nAs at end June .2024\nAs at end-June. 2025\nJun-23\nJun-24\nJun-25\nAbs\nPercent\nAbs\nPercent\nAbs\nPercent\na Public Sector\n6,754.31\n \n6,416.98\n \n4,411.57\n \n552.49\n \n8.91\n \n(337.33)\n \n(4.99)\n \n(2,005.41)\n \n(31.25)\n \nb Private Sector\n66,370.96\n \n78,061.73\n \n84,752.43\n \n9,210.01\n \n16.11\n \n11,690.77\n \n17.61\n \n6,690.70\n \n8.57\n \n Agric.,For. & Fish.\n2,619.62\n \n3,047.99\n \n3,505.61\n \n575.17\n \n28.13\n \n428.37\n \n16.35\n \n457.62\n \n15.01\n \n Export Trade\n474.92\n \n577.22\n \n514.08\n \n229.50\n \n93.51\n \n102.30\n \n21.54\n \n(63.14)\n \n(10.94)\n \n Manufacturing\n7,739.05\n \n8,986.70\n \n9,405.91\n \n1,704.23\n \n28.24\n \n1,247.65\n \n16.12\n \n419.21\n \n4.66\n \n Trans.,Stor., & Comm.\n3,770.45\n \n4,810.42\n \n4,018.45\n \n669.33\n \n21.58\n \n1,039.97\n \n27.58\n \n(791.97)\n \n(16.46)\n \n Mining & Quarrying\n2,489.31\n \n2,751.86\n \n2,527.78\n \n1,159.06\n \n87.13\n \n262.54\n \n10.55\n \n(224.08)\n \n(8.14)\n \n Import Trade\n4,904.19\n \n7,212.92\n \n7,070.12\n \n2,972.82\n \n153.92\n \n2,308.73\n \n47.08\n \n(142.80)\n \n(1.98)\n \n Construction\n6,503.67\n \n7,405.79\n \n7,478.35\n \n539.44\n \n9.04\n \n902.12\n \n13.87\n \n72.56\n \n0.98\n \n Commerce & Finance\n9,828.76\n \n11,507.33\n \n13,213.80\n \n(1,097.97)\n \n(10.05)\n \n1,678.57\n \n17.08\n \n1,706.47\n \n14.83\n \n Elect.,Gas & Water\n2,606.11\n \n2,275.37\n \n2,255.83\n \n(23.54)\n \n(0.90)\n \n(330.73)\n \n(12.69)\n \n(19.54)\n \n(0.86)\n \n Services\n21,235.79\n \n24,890.15\n \n31,810.31\n \n2,151.38\n \n11.27\n \n3,654.36\n \n17.21\n \n6,920.15\n \n27.80\n \n Miscellaneous\n4,199.07\n \n4,595.97\n \n2,952.19\n \n330.59\n \n8.55\n \n396.90\n \n9.45\n \n(1,643.78)\n \n(35.77)\n \nc Grand Total\n73,125.27\n \n84,478.71\n \n89,164.00\n \n9,762.49\n \n15.41\n \n11,353.44\n \n15.53\n \n4,685.30\n \n5.55\n \nLevels (GH¢ Millions)\nYear -On-Year Variation\nJun-22\nJun-23\nJun-24\nApr-25\nJun-25\nComponents of Assets (% of Total)\nCash and Due from Banks\n23.4\n27.7\n35.8\n36.6\n28.9\nInvestments\n40.5\n37.1\n33.2\n34.7\n42.3\nNet Advances\n28.1\n25.8\n21.4\n19.3\n19.0\nOthers\n8.0\n9.4\n9.6\n9.4\n9.9\nComponents of Liabilities and Shareholders' Funds (% of Total)\nTotal Deposits\n65.7\n \n77.4\n \n76.1\n \n74.2\n \n72.9\n \nTotal Borrowings\n13.2\n \n6.6\n \n7.2\n \n8.4\n \n8.6\n \nShareholders' Funds\n13.1\n \n9.2\n \n10.0\n \n11.3\n \n12.5\n \nOther Liabilities\n8.0\n \n6.6\n \n6.5\n \n5.8\n \n5.6\n \nJun-23\nJun-24\nApr-25\nJun-25\nJun-24\nJun-25\nPublic Sector\n6,754.31\n \n6,416.98\n5,371.95\n4,411.57\n-5.0\n-31.3\nPrivate Sector\n66,370.96\n \n78,113.05\n86,812.87\n85,291.32\n17.7\n9.2\n - Private Enterprises\n48,643.78\n \n57,447.21\n60,583.75\n59,981.12\n18.1\n4.4\n o/w Foreign\n3,219.23\n \n4,469.18\n3,830.60\n3,062.63\n38.8\n-31.5\n Indigeneous\n45,424.55\n \n52,978.03\n56,753.14\n56,918.49\n16.6\n7.4\n - Households\n16,208.51\n \n19,289.09\n22,971.64\n22,056.03\n19.0\n14.3\nGross Loans\n73,125.3\n84,530.0\n92,184.82\n89,702.9\n15.6\n6.1\nEconomic Sector\nGh¢million\ny/y growth (%)\nJun-22\nJun-23\nJun-24\nApr-25\nJun-25\nContingent Liabilities (GH¢million)\n21,921.0\n \n19,885.5\n \n25,657.6\n \n20,950.2\n \n16,811.5\n \nGrowth (y-o-y)\n55.8\n-9.3\n29.0\n-14.1\n-34.5\n% of Total Liabilities\n12.6\n9.0\n8.8\n6.1\n5.0\n \n53 \n \nPUBLIC \nTable A.7: Distribution of Loans and NPLs by Economic Sector (%) \n \nSource: Bank of Ghana Staff Calculations \n \nTable A.8: Liquidity Ratios \n \nSource: Bank of Ghana Staff Calculations \n \nTable A.9: Profitability Indicators (%) \n \nSource: Bank of Ghana Staff Calculations \n \n \n \n \n \n \n \n \n \n \n \n \n \na. Public Sector\n9.2\n4.5\n7.6\n4.4\n5.8\n3.5\n4.9\n3.6\n i. Government\n4.1\n2.3\n2.7\n1.2\n1.5\n0.9\n1.1\n1.2\n ii. Public Institutions\n1.8\n0.0\n1.6\n0.1\n1.0\n0.5\n1.1\n0.5\n iii. Public Enterprises\n3.3\n2.2\n3.3\n3.1\n3.3\n2.1\n2.8\n1.9\nb. Private Sector\n90.8\n95.5\n92.4\n95.6\n94.2\n96.5\n95.1\n96.4\n i. Private Enterprises\n66.5\n84.0\n67.9\n83.6\n65.7\n84.1\n66.9\n83.6\n o/w Foreign\n4.4\n2.6\n5.3\n2.2\n4.2\n2.2\n3.4\n1.8\n Indigeneous\n62.1\n81.4\n62.7\n81.5\n61.6\n82.0\n63.5\n81.8\n ii. Households\n22.2\n10.8\n22.8\n11.1\n24.9\n11.5\n24.6\n11.9\n iii. Others\n2.1\n0.7\n1.6\n0.8\n3.5\n0.9\n1.7\n0.9\nShare in Total \nCredit\nShare in \nNPLs\nShare in \nTotal Credit\nShare in \nNPLs\nShare in Total \nCredit\nShare in \nNPLs\nJun-23\nJun-24\nApr-25\nJun-25\nShare in Total \nCredit\nShare in \nNPLs\nJun-22\nJun-23\nJun-24\nApr-25\nJun-25\nLiquid Assets (Core) - (GH¢'million)\n46,726.4\n \n67,100.0\n \n115,827.0\n \n142,771.0\n \n110,906.3\n \nLiquid Assets (Broad) -(GH¢'million)\n127,547.3\n \n156,811.9\n \n222,701.8\n \n277,736.9\n \n272,954.5\n \nLiquid Assets to total deposits (Core)-%\n35.6\n \n35.8\n \n47.1\n \n49.3\n \n39.6\n \nLiquid Assets to total deposits (Broad)- %\n97.1\n \n83.6\n \n90.6\n \n95.9\n \n97.4\n \nLiquid assets to total assets (Core)- %\n23.4\n \n27.7\n \n35.8\n \n36.6\n \n28.9\n \nLiquid assets to total assets (Broad)- %\n63.8\n \n64.7\n \n68.9\n \n71.2\n \n71.0\n \nJun-23\nJun-24\nApr-25\nJun-25\nGross Yield\n9.1\n9.4\n5.8\n8.9\nInterest Payable\n3.2\n3.0\n1.8\n2.8\nSpread\n6.0\n6.4\n4.0\n6.0\nAsset Utilitisation\n8.3\n7.1\n4.6\n7.4\nInterest Margin to Total Assets\n4.1\n3.7\n2.4\n3.7\nInterest Margin to Gross income\n49.1\n51.4\n51.3\n50.1\nProfitability Ratio\n21.3\n23.5\n23.8\n25.3\nReturn On Equity (%) after tax\n37.6\n35.3\n30.0\n32.2\nReturn On Assets (%) before tax\n5.5\n5.4\n5.0\n5.6\n \n54 \n \nPUBLIC \nTable A.10: DMBs’ Income Statement \n \nSource: Bank of Ghana Staff Calculations \n \n \nTable A.11: Developments in Offshore Balances \n \nSource: Bank of Ghana Staff Calculations \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nJun-23\nJun-24\nApr-25\nJun-25\nJun-24\nApr-25\nJun-25\nInterest Income\n15,092.6\n \n17,980.5\n \n13,905.0\n \n21,647.4\n \n19.1\n \n15.9\n20.4\nInterest Expenses\n(5,211.3)\n \n(6,180.4)\n \n(4,708.8)\n \n(7,457.9)\n \n18.6\n \n16.5\n20.7\nNet Interest Income\n9,881.2\n \n11,800.0\n \n9,196.2\n \n14,189.5\n \n19.4\n \n15.5\n20.2\nFees and Commissions (Net)\n2,243.4\n \n2,620.1\n \n2,006.0\n \n3,087.5\n \n16.8\n \n26.2\n17.8\nOther Income\n2,805.7\n \n2,352.5\n \n2,022.2\n \n3,580.5\n \n(16.2)\n \n27.8\n52.2\nOperating Income\n14,930.3\n \n16,772.7\n \n13,224.4\n \n20,857.5\n \n12.3\n \n18.8\n24.4\nOperating Expenses \n(6,577.6)\n \n(7,594.1)\n \n(6,174.2)\n \n(9,215.8)\n \n15.5\n \n23.0\n21.4\n Staff Cost (deduct)\n(3,120.0)\n \n(3,813.7)\n \n(3,132.8)\n \n(4,731.0)\n \n22.2\n \n24.0\n24.1\n Other operating Expenses \n(3,457.7)\n \n(3,780.4)\n \n(3,041.5)\n \n(4,484.8)\n \n9.3\n \n22.0\n18.6\nNet Operating Income\n8,352.7\n \n9,178.6\n \n7,050.2\n \n11,641.7\n \n9.9\n \n15.4\n26.8\nTotal Provision (Loan losses, \nDepreciation & others)\n(1,731.9)\n \n(1,048.2)\n \n(654.2)\n \n(893.0)\n \n(39.5)\n \n(24.2)\n(14.8)\nIncome Before Tax\n6,620.8\n \n8,130.4\n \n6,396.1\n \n10,748.7\n \n22.8\n \n21.9\n32.2\nTax\n(2,320.9)\n \n(2,733.8)\n \n(2,127.7)\n \n(3,594.7)\n \n17.8\n \n21.7\n31.5\nNet Income\n4,299.9\n \n5,396.5\n \n4,268.4\n \n7,154.0\n \n25.5\n \n22.0\n32.6\nGross Income\n20,141.6\n \n22,953.1\n \n17,933.2\n \n28,315.4\n \n14.0\n \n18.2\n23.4\n (GH ¢'million)\nY-o-y Growth (%)\nJun-22\nJun-23\nJun-24\nApr-25\nJun-25\nOffshore balances as % to Networth\n39.6\n78.3\n92.6\n89.2\n41.1\nAnnual Growth in Offshore balances (%)\n13.4\n67.8\n71.4\n53.2\n-34.1\nAnnual Growth in Nostro Balances (%)\n-10.7\n77.9\n73.6\n18.7\n-44.7\nAnnual Growth in Placement (%)\n51.7\n58.8\n69.4\n84.4\n-22.8\n \n55 \n \nPUBLIC \n \nTable A.12: Fiscal indicators \nMillion Ghana Cedis \n2024 \n2024 \n2025 \n2025 \n2025 \n2025/2024 \n \nQ1+Q2 \nQ1 \nQ1+Q2 \nQ1+Q2 \nDEVIATION \nY-O-Y \n \nOUTTURN \nOUTTURN \nOUTTURN \nPROG \nOVER(+)/ \nBELOW(-) \nGROWTH \nDomestic Revenue \n \n74,864.3 \n \n30,378.9 \n \n98,609.4 \n \n101,508.8 \n \n(2.9) \n \n31.7 \n (percent of GDP) \n 6.4 \n \n2.9 \n 7.0 7.3 \n \n \nDomestic expenditure \n \n72,749.2 \n \n34,417.9 \n \n81,102.6 \n \n88,121.5 \n \n(8.0) \n \n11.5 \n (percent of GDP) \n 6.2 \n \n3.3 \n 5.8 6.3 \n \n \nDomestic Primary Balance \n \n2,115.2 \n \n(4,039.0) \n \n17,506.8 \n \n13,387.3 \n \n30.8 \n \n727.7 \n (percent of GDP) \n 0.2 \n \n(0.4) \n 1.3 1.0 \n \n \nPrimary Balance (Commitment) \n \n(4,161.3) \n \n(6,025.4) \n \n15,083.4 \n \n5,039.3 \n \n199.3 \n \n(462.5) \n (percent of GDP) \n \n(0.4) \n \n(0.6) \n 1.1 0.4 \n \n \nPrimary Balance (Cash) \n \n(18,307.0) \n \n(15,104.0) \n \n10,303.5 \n \n(2,457.1) \n \n(519.3) \n \n(156.3) \n (percent of GDP) \n \n(1.6) \n \n(1.4) \n 0.7 \n \n(0.2) \n \n \nNon-Oil Primary Balance \n \n(24,564.1) \n \n(17,007.7) \n \n6,762.3 \n \n(8,658.5) \n \n(178.1) \n \n(127.5) \n (percent of GDP) \n \n(2.2) \n \n(1.6) \n 0.5 \n \n(0.6) \n \n \nOverall Balance (Commitment) \n \n(23,189.8) \n \n(18,588.2) \n \n(10,339.6) \n \n(25,465.4) \n \n(59.4) \n \n(55.4) \n (percent of GDP) \n \n(2.0) \n \n(1.8) \n \n(0.7) \n \n(1.8) \n \n \nOverall Balance (cash, discrepancy) \n \n(37,335.5) \n \n(27,666.8) \n \n(15,119.5) \n \n(32,961.7) \n \n(54.1) \n \n(59.5) \n (percent of GDP) \n \n(3.2) \n \n(2.6) \n \n(1.1) \n \n(2.4) \n \n \nOil Revenue \n \n6,257.1 \n \n1,903.8 \n \n3,541.2 \n \n6,201.5 \n \n(42.9) \n \n(43.4) \n (percent of GDP) \n 0.5 \n \n0.2 \n 0.3 0.4 \n \n \nNon-Oil Revenue and Grants \n \n69,845.1 \n \n28,510.1 \n \n95,798.2 \n \n96,375.9 \n \n(0.6) \n \n37.2 \n (percent of GDP) \n 5.9 \n \n2.7 \n 6.8 6.9 \n \n \nBenchmark Oil Revenue \n \n4,455.7 \n \n1,116.4 \n \n2,750.6 \n \n4,780.3 \n \n(42.5) \n \n(38.3) \n (percent of GDP) \n 0.4 \n \n0.1 \n 0.2 0.3 \n \n \nAnnual Budget Funding Amount (ABFA) \n \n3,119.0 \n \n781.5 \n \n1,925.4 \n \n3,346.2 \n \n(42.5) \n \n(38.3) \n (percent of GDP) \n 0.3 \n \n0.1 \n 0.1 0.2 \n \nNominal GDP \n \n1,176,219.9 \n \n1,050,978.3 \n \n1,400,006.1 \n \n1,400,006.1 \n \n \nNon-Oil Nominal GDP \n \n1,128,205.1 \n \n979,407.7 \n \n1,350,563.8 \n \n1,350,563.8 \n \n \nSource: Ministry of Finance \n \n \n56 \n \nPUBLIC \nTable A.13: Headline and Core Inflation \n \nCombined\nFood\nNon-food\nCombined\nFood\nNon-food\nCore 1\nCore 2\nCore 3\nCore 4\n100\n42.7\n57.3\n100\n42.7\n57.3\n93.8\n60.2\n87.0\n50.7\nDec-20\n10.4\n14.1\n7.7\n0.9\n1.5\n0.4\n11.2\n8.5\n11.4\n8.3\nDec-21\n12.6\n12.8\n12.5\n1.2\n1.2\n1.2\n11.9\n11.9\n11.5\n10.7\nDec-22\n54.1\n59.7\n49.9\n3.8\n4.1\n3.6\n53.2\n53.5\n54.4\n47.2\nDec-23\n23.2\n28.7\n18.7\n1.2\n1.3\n1.0\n24.2\n22.3\n25.5\n20.7\n2024\nJan\n23.5\n27.1\n20.5\n2.0\n1.6\n2.4\n24.2\n22.4\n25.4\n21.8\nFeb\n23.2\n27.0\n20.0\n1.6\n2.0\n1.3\n24.0\n22.2\n25.0\n21.8\nMar\n25.8\n29.6\n22.6\n0.8\n1.0\n0.7\n26.3\n24.0\n27.2\n23.8\nApr\n25.0\n26.8\n23.5\n1.8\n2.1\n1.5\n24.8\n22.9\n25.9\n22.9\nMay\n23.1\n22.6\n23.6\n3.2\n2.7\n3.6\n22.6\n21.5\n23.2\n21.9\nJun\n22.8\n24.0\n21.6\n2.9\n5.1\n0.9\n22.1\n19.5\n23.2\n19.1\nJul\n20.9\n21.5\n20.5\n2.1\n1.7\n2.4\n19.9\n16.7\n20.8\n17.3\nAug\n20.4\n19.1\n21.5\n-0.7\n-2.2\n0.7\n19.4\n16.9\n20.0\n18.9\nSep\n21.5\n22.1\n20.9\n2.8\n4.2\n1.6\n20.8\n17.6\n21.5\n18.4\nOct\n22.1\n22.8\n21.5\n0.9\n0.3\n1.4\n21.4\n19.5\n22.2\n19.1\nNov\n23.0\n25.9\n20.7\n2.6\n3.8\n1.6\n22.4\n18.7\n23.2\n17.6\nDec\n23.8\n27.8\n20.3\n1.8\n2.8\n0.7\n23.1\n18.5\n24.0\n17.1\n2025\nJan\n23.5\n28.3\n19.2\n1.7\n2.0\n1.4\n22.8\n18.0\n23.7\n16.3\nFeb\n23.1\n28.1\n18.8\n1.3\n1.8\n0.9\n22.4\n17.5\n23.3\n15.8\nMar\n22.4\n26.5\n18.7\n0.2\n-0.2\n0.7\n21.8\n17.9\n22.5\n16.0\nApr\n21.2\n25.0\n17.9\n0.8\n0.9\n0.7\n21.0\n18.0\n21.7\n16.0\nMay\n18.4\n22.8\n14.4\n0.7\n0.9\n0.6\n18.4\n15.8\n19.2\n13.9\nJune\n13.7\n16.3\n11.4\n-1.2\n-0.5\n-1.8\n13.0\n11.6\n13.6\n10.6\nSource: Ghana Statistical Service\nMonthly Changes in CPI (%)\nAnnual Changes in CPI (%)\nCore Inflation (%)\nBank of Ghana", "source": "BOG", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/Monetary_Policy_Reports/Monetary-Policy-Report-July-2025 (1).pdf"}
{"doc_id": "7a835a4e549892f84f87541cb43013f0", "text": "Classified as Confidential \n \n \n \n \n \n \n \n \n \n \n2023 \nHalf Year \nEconomic Report \n \nCENTRAL BANK OF NIGERIA \nHa lf Year Economic Report, 2023 \n \n \nClassified as Confidential \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHa lf Year Economic Report, 2023 \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \ni \n \nCentral Bank of Nigeria Corporate Head Office \nPlot 33, Abubakar Tafawa Balewa Way Central \nBusiness \nDistrict, Cadastral Zone \nP.M.B. 0187 \nGarki, Abuja \nWebsite: www.cbn.gov.ng \n \nContact Centre \nTel: +234 (0) 700 225 5226 \n \n \n \n \n \n \n \n \n \n \n \n \n©2023 Central Bank of Nigeria \n \nISSN 1597 - 2976 \n \n \nClassified as Confidential \n \n \nABOUT THE REPORT \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nThe Central Bank of Nigeria (CBN) Economic Report presents economic \ndevelopments in Nigeria, intended for dissemination to the public. The \nReport provides insights on current developments in the real, fiscal, \nfinancial, and external sectors of the Nigerian economy, as well as on \nglobal issues of interest. It also reflects the policy initiatives of the CBN \nin pursuit of its mandate. The Report is targeted at a wide range of \nreaders, including economists, policymakers, financial analysts in the \ngovernment and private sectors, and the public. Free copies of the \nReport, both current and past issues, can be obtained from the CBN \nwebsite: www.cbn.gov.ng. All inquiries concerning the report should be \ndirected to the Director, Research Department, Central Bank of Nigeria, \nP.M.B. 187, Garki, Abuja, Nigeria. \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \niii \n \nGOVERNANCE FRAMEWORK \n \n Members of the Committee of Governors \n1 \nGodwin I. Emefiele, CON \n- \nGovernor (Chairman) \n2 \nAishah N. Ahmad \n- \nDeputy Governor (Financial System Stability) \n3 \nEdward L. Adamu \n- \nDeputy Governor (Corporate Services) \n4 \nFolashodun A. Shonubi \n- \nDeputy Governor (Operations) \n5 \nKingsley I. Obiora \n- \nDeputy Governor (Economic Policy) \n6 \nAlice Karau \n- \nSecretary to the Board \n \n \n \n \nMembers of the Monetary Policy Committee (MPC) as of 30 June 2023 \n1 Godwin I. Emefiele, CON \n- \nGovernor (Chairman) \n2 Aishah N. Ahmad \n- \nDeputy Governor (Financial System Stability) \n3 Edward L. Adamu \n- \nDeputy Governor (Corporate Services) \n4 Folashodun A. Shonubi \n- \nDeputy Governor (Operations) \n5 Kingsley I. Obiora \n- \nDeputy Governor (Economic Policy) \n6 Mike I. Obadan \n- \nMember \n7 Adeola F. Adenikinju \n- \nMember \n8 Robert C. Asogwa \n- \nMember \n9 Aliyu R. Sanusi - \nMember \n10 Ahmed Aliyu - \nMember \n11 Momodu Omamegbe - \nMember \n12 Mohammed A. Salisu \n- \nMember \n13 Hassan Mahmud \n- \nSecretary \n \n \n \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \nClassified as Confidential \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n List of Departmental Directors as of 30 June 2023 \n1 Samuel C. Okojere \n- \nBanking Services \n2 Haruna B. Mustafa \n- \nBanking Supervision \n3 Elizabeth O. Fasoranti \n- \nBranch Operations \n4 Muhammad A. Abba \n- \nCapacity Development \n5 Rashida J. Monguno \n- \nConsumer Protection \n6 Osita C. Nwanisobi \n- \nCorporate Communication \n7 Alice Karau \n- \nCorporate Secretariat \n8 Ahmed B. Umar \n- \nCurrency Operations \n9 Philip Y. Yusuf \n- \nDevelopment Finance \n10 Benjamin A. Fakunle \n- \nFinance \n11 Angela A. Sere-Ejembi \n- \nFinancial Markets \n12 Chibuzo A. Efobi \n- \nFinancial Policy and Regulation \n13 Joseph G. Omayuku \n- \nGovernors \n14 Amina A. Habib \n- \nHuman Resources \n15 Rakiya S. Mohammed \n- \nInformation Technology \n16 Lydia I. Alfa \n- \nInternal Audit \n17 Sirajuddin K. Salam-Alada \n- \nLegal Services \n18 Abdulkadir A. Jibril \n- \nMedical Services \n19 Hassan Mahmud \n- \nMonetary Policy \n20 Nkiru E. Asiegbu \n- \nOther Financial Institutions Supervision \n21 Musa I. Jimoh \n- \nPayments System Management \n22 Arinze A. Stanley \n- \nProcurement and Support Services \n23 Michael A. Adebiyi \n- \nResearch \n24 Benjamin C. Nnadi \n- \nReserve Management \n25 Blaise Ijebor \n- \nRisk Management \n26 Oluwakemi O. Osa-Odigie \n- \nSecurity Services \n27 Mohammed M. Tumala \n- \nStatistics \n28 Clement O. Buari \n- \nStrategy Management \n29 Ozoemena S. Nnaji \n- \nTrade and Exchange \n30 Olorunsola E. Olowofeso \n- \nWest African Monetary Institute \n31 Abubakar A. Kure \n- \nNIRSAL Microfinance Bank \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \nv \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n List of Branch Controllers/Currency Officers as at 30 June 2023 \n1 Ogbogu D. Amaechi \n- \nAbakaliki \n2 Wahab Oseni \n- \nAbeokuta \n3 Ogbu, O. Michael \n- \nAbuja \n4 Wasiu A. Omotoso \n- \nAdo-Ekiti \n5 Fatai A. Yusuf \n- \nAkure \n6 Okafor G. Ikechukwu \n- \nAsaba \n7 Benedicth I.C. Maduagwu. \n- \nAwka \n8 Haladu A. Idris \n- \nBauchi \n9 Renner D. Jumbo \n- \nBenin \n10 Mannir D. Abdullahi \n- \nBirnin-Kebbi \n11 Glory U. Iniunam \n- \nCalabar \n12 Gana A. Abdulkadir \n- \nDamaturu \n13 Sa'adatu A. Ibrahim \n- \nDutse \n14 Chidozie E. Okonjo \n- \nEnugu \n15 Shehu A. Goringo \n- \nGombe \n16 Umar B. Ibrahim \n- \nGusau \n17 Olufolake M. Ogundero \n- \nIbadan \n18 Najimu L. Oluwale \n- \nIlorin \n19 Idirisa D. Maina \n- \nJalingo \n20 Esther T. Catherine \n- \nJos \n21 Yusuf W. Baba \n- \nKaduna \n22 Babangida, Jino \n- \nKano \n23 Musa Ahmed. Ladan \n- \nKatsina \n24 Samson Isuwa \n- \nLafia \n25 Bariboloka K. Godfrey \n- \nLagos \n26 Ahmed I. Sule \n- \nLokoja \n27 Tijani K. Lawan \n- \nMaiduguri \n28 John O. Itaha \n- \nMakurdi \n29 Saheed M. Ademola \n- \nMinna \n30 Ajuma D. Madojemu \n- \nOsogbo \n31 Oruwari Oyoburuoma \n- \nOwerri \n32 Okeke Chuks \n- \nPort Harcourt \n33 Dahiru U. Nakazalle \n- \nSokoto \n34 Ayotunde O. Oladimeji \n- \nUmuahia \n35 Itohan M. Ogbomon-Paul \n- \nUyo \n36 Francis E. Asuquo \n- \nYenagoa \n37 Sanusi S. Nyashi \n- \nYola \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \nClassified as Confidential \niii \n \niii \n \niii \niv \nv \n \n \n \n \n \n \n \n \nABOUT THE REPORT \nGOVERNANCE FRAMEWORK \nMembers of the Committee of Governors \nMembers of the MPC \nDepartmental Directors \nBranch Controllers/Currency Officers \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n SERVING THE NIGERIAN PEOPLE \n \n \nDELIVERING ON \nTHE CBN’s \nMANDATE \n \nTHE GLOBAL \nECONOMY \n \n \n \n \n \n \n \n \n \n \n \n \n• \nThe CBN’s Mandate \n \n4 \n \n• \nCBN \nStrategic \nPriorities \n \n \n4 \n• \nOutput Growth \n7 \n \n \n \n \n \n \n \n• \nInflation \n8 \n \n \n \n \n \n \n \n• \nFinancial \nMarkets \n10 \n \n \n \n \n \n \n \n \n• \nCommodity \nPrices \n11 \n \n \n \n \n \n \n \n• \nCentral Banks’ \nResponse \n13 \n \n \n \n \n• \nFiscal Measures \n13 \nCONTENTS \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \nvi \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nMACRROECONOMIC PERFORMANCE \n \nOUTLOOK \n \nADDITIONAL \nINFORMATION \n \n \n \n \n \n \n \n \n \n• \nMonetary Policy \n16 \n• \nGlobal \noutlook \n \n85 \n• \nRegional \nMeetings \n• \nNon-\nRegional \nMeetings \n89 \n \n92 \n• \nThe Real Economy \n17 \n• \nDomestic \noutlook \n \n87 \n \n \n• \nFiscal Developments \n30 \n \n \n \n \n \n• \nFinancial Developments \n38 \n \n \n \n \n \n• \nPayments System \nManagement \n65 \n \n \n \n• \nExternal Sector \nDevelopment \n71 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n1 \nEXECUTIVE SUMMARY \nThe Global Economy: Global economic output \nexpanded in the first half of 2023 on account of \nimprovement in supply chain, moderating \ninflationary pressures, improved business and \nconsumer sentiments, as well as eased household \nbudget constraints. This was reflected in the \naverage \nJ.P. \nMorgan \nGlobal \nComposite \nPurchasing Manager’s Index (PMI), which rose to \n52.75 points in the first half of 2023, from 48.85 \npoints and 52.00 points in the preceding and \ncorresponding periods of 2022, respectively. The \nexpansion was driven, primarily, by the services \nsub-sector, which rose to 53.65 points, compared \nwith 49.30 points in the preceding period. \nThe Real Economy: The domestic economy \nmaintained a modest growth trajectory in the first \nhalf of the year, despite significant headwinds. \nReal Gross Domestic Product (GDP) grew by 2.41 \nper cent, compared with 2.91 per cent and 3.32 \nper cent in the preceding and the first halves of \n2022, respectively. The growth was on account of \nsustained improvement in the performance of the \nnon-oil sector, driven by increased investments in \nthe sector and sustained fiscal and monetary \nstimuli to critical sectors of the economy. \nDespite the subsisting monetary policy tightening, \nheadline inflation, in the first half of 2023, rose to \n22.79 per cent from 21.34 per cent and 18.60 per \ncent at the preceding and corresponding halves of \n2022. The heightened price pressures were \noccasioned by higher energy and food prices that \naccompanied the Russia-Ukraine war and \nexchange rate pass-through. From the domestic \nfront, cost-push factors such as the removal of \nPMS subsidy and the reforms in the foreign \nexchange market, among other legacy structural \nchallenges, contributed to the continued surge in \naggregate prices. \nDomestic crude oil production in the first half of \n2023 improved due to enhanced security of crude \noil production and distribution infrastructure and \nsustained investment in exploration activities by \nthe NNPC Limited. At an average daily production \nof 1.21 million barrels per day (mbpd), Nigeria’s \ncrude oil output in the first half of 2023, increased \nby 2.54 per cent, from 1.18 mbpd in the second \nhalf of 2022. However, it fell slightly by 0.82 per \ncent, relative to the level in the corresponding half \nof 2022. Crude oil prices declined in the first half \nof 2023, due, mainly to higher global supply, \nparticularly \nfrom \nthe \nUS \nand \nMexico. \nConsequently, the average spot price of Nigeria’s \nreference crude, the Bonny Light, fell by 17.22 per \ncent in the first half of 2023 to US$81.87 per \nbarrel (pb) from US$98.90 pb in the second half of \n2022. The Bank reduced the pace of its \nintervention in the critical segments of the \neconomy, while loan repayment increased in the \nsame period. The increase in recovery reflected \nincreased drive for loan-recovery and positive \nreturns from the programmes. \nFiscal Developments: Fiscal policy in the first half \nof 2023 towed the path of fiscal consolidation \nwith the implementation of broad reforms to \nwiden the fiscal space and ensure fiscal viability. \nIn addition, expenditure and public debt policies \nwere implemented to reflect efforts at softening \nthe impact of external and domestic headwinds. \nRevenue performance was influenced by broad \nreforms in the mineral and non-oil sectors. The \nFinance Act 2023 helped broaden the tax base to \ninclude digital assets for capital gains. However, \nthe continued crude oil theft, and subsisting tax \nexpenditures lowered accretion to the Federation \nAccount. Federation revenue waned due to \nsubsidy payments for premium motor spirit (PMS) \nand \nlow \ndomestic \ncrude \noil \nproduction. \nAccordingly, at N6,903.32 billion or 5.4 per cent \nof GDP, provisional gross federally collected \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \nClassified as Confidential \nrevenue declined by 5.5 per cent, relative to the \nlevel in the second half of 2022, and fell short of \nthe proportionate budget by 34.8 per cent. \nRetained revenue of the FGN rose significantly, \nrelative to the corresponding period of 2022. \nProvisional FGN retained revenue, at N3,128.31 \nbillion (2.6 per cent of the GDP), outpaced \nperformance in the first half of 2022 by 34.9 per \ncent, reflecting higher independent FGN receipts. \nProvisional aggregate expenditure of the FGN \ndeclined, relative to the first half of 2022. At \nN6,998.76 billion (8.9 per cent of the GDP), \nprovisional aggregate expenditure of the FGN \nwas below the level in the first half of 2022 and \nthe benchmark by 13.0 per cent and 35.9 per cent, \nrespectively. The lower expenditure was driven by \nreduced interest obligations, arising from the \nredemption of N703.77 billion out of the total \ndebt stock of the FGN in 2022. Consequently, the \nfiscal operations of the Federal Government \n(FGN) resulted in an overall deficit of 3.1 per cent \nof GDP, while consolidated public debt levels \nexceeded the 40.0 per cent debt-to-GDP national \nthreshold, but remained well within the 70.0 per \ncent benchmark for Market Access Countries \n(MAC). \nFinancial Developments: The Bank sustained its \nhawkish policy stance in a bid to tame \ninflationary pressure in the first half of 2023. \nDespite \nthe \nsubsisting \nmonetary \npolicy \ntightening, liquidity in the banking system was \nhigher-than-expected on the back of the \ncombined effect of currency recirculation, \nexchange rate reforms, improved FAAC payments \nand \nmaturities \nof \ngovernment \nsecurities. \nConsequently, broad money supply (M3) grew \nsignificantly by 24.4 per cent annualised to 48.8 \nper cent exceeding its provisional benchmark of \n28.21 per cent. The financial sector remained \nresilient in the first half of 2023, as key financial \nsoundness indicators were within regulatory \nbenchmarks. The Bank’s payments system \narchitecture remained robust driving digital \nfinancial inclusion through the introduction of \ninnovative measures aimed at fostering a more \nprofound evolution of the payments system \nlandscape during the period. \nActivities at the Nigerian equities market were \nbullish, as the All-Share Index (ASI) and aggregate \nmarket capitalisation appreciated, relative to \ntheir levels at end-December 2022 and end-June \n2022. The performance was on account of better-\nthan-expected \n2023Q1, \ncorporate \nearnings \ndeclaration, dividend reinvestments, and the \nanticipation of favourable 2023H1 corporate \nearnings following the reforms in the energy \nsector and the foreign exchange market. \nExternal Sector Developments: The external \naccount in the first half of 2023 deteriorated due \nlargely to global financial tightening to rein in \ninflation, and a lull in economic activities, \nattributed to the uncertainties surrounding the \ngeneral elections. The development resulted in an \noverall balance of payments deficit of 1.4 per cent \nof GDP, relative to 1.0 per cent of GDP in the \nsecond half of 2022 and 0.4 per cent of GDP in \nthe first half of 2022. \nSustained inflow of remittances and lower \npayments for the import of goods and services, \nresulted in an improved current account surplus \nof 1.1 per cent of GDP. The financial account \nmaintained a net borrowing position with a net \nincurrence of financial liabilities of 0.7 per cent of \nthe GDP, compared with 1.4 per cent in the \npreceding period. The international investment \nposition (IIP) posted a lower net liability of \nUS$53.13 billion. The external reserves position at \nend-June 2023 was US$33.71 billion and could \nfinance 7.9 months of import (goods only) or 5.9 \nmonths of import (goods and services), which was \nabove the international benchmark of 3.0 \nmonths. The adoption of a market determined \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n3 \nexchange rate in June 2023 led to the \ndepreciation of the naira by 10.3 per cent. The \nstock of external debt increased to US$43.16 \nbillion at end-June 2023, from US$40.06 billion at \nend-June 2022. \nOutlook: Looking ahead, the global economic \noutlook for the rest of 2023 remains positive, \nowing to easing supply chain pressure, as shocks \nfrom the COVID-19 pandemic and Russia-Ukraine \nwar taper. On the domestic front growth is \nexpected to maintain a positive trajectory for the \nrest of the year. Tailwinds to the outlook are \npredicated on a sustained rally in crude oil prices, \nimprovement in domestic crude oil production, \ngains of fiscal consolidation and other reforms \nunder the Finance Act 2023. Headwinds to the \ndomestic outlook remain rising energy prices, \nexternal debt service obligations, subsisting \nsecurity challenges, legacy infrastructural deficit, \nand tightening global financial conditions. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n4 \nSection One \n \n \n \n \n \n \n \nCBN Strategic Priorities (2019 – 2024): 5-Point Agenda \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCBN MANDATE \n& \nSTRATEGY \n* Ensure monetary and price stability\n* Issue legal tender currency in Nigeria\n* Maintain external reserves to safeguard the international\nvalue of the legal tender currency\n* Promote a sound financial system in Nigeria\n* Act as Banker and provide economic and financial advice to the\nFederal government\nFoster the Development of a Robust \nPayments System \nConserve the utilization of reserves \nfor critical raw materials and imports \nthat are not produced locally \nImprove consumer \nspending and \ninvestment by MSMEs through \naffordable and adequate credit \nGrow our External Reserves \nImprove Access to Credit \nPromote inclusive growth and \nprivate sector investment by \nleveraging on monetary tools to \nmaintain a low inflation \nenvironment , while trying to seek \nexchange rate stability \nPreserving macroeconomic and \nfinancial stability \nDrive the cashless initiative across \nthe country to enhance efficiency \nand propel the financial inclusion \ndrive \nDiversify the Economy through \ni ntervention programmes \nBoost productivity growth in both \nthe agricultural and manufacturing \nsectors through end \n- to - end value \nchain credit intervention \nprogrammes \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n5 \nStrategic \nThemes\nPrice stability\nIntegrity and \nsoundness\nFuture-forward \n& inclusive\nCatalyst for \nproductivity\nResilience \nagainst shocks\nOperational \nexcellence\nEmpowered \nfor impact\nIntegrity\nPartnership\nAccountability\nCourage\nTenacity\nMission \n“To ENSURE monetary, price, and \nfinancial system stability as a \ncatalyst for inclusive growth and \nsustainable economic \ndevelopment” \nCBN: 2021-2024\nCBN Strategy \nCore Values \nVision \n“To be a people-focused Central \nBank promoting confidence in the \neconomy and enabling an \nimproved standard of living” \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n6 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Section Two\nTHE GLOBAL ECONOMY \n \n \n \n \n \nTHE GLOBAL ECONOMY\n•Global Output\n•Global Inflation\n•Glonal Financial Markets\n•Central Banks' Responses\n•Fiscal Measures\n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n7 \n \n2.1 \nGLOBAL OUTPUT GROWTH \nGlobal economic output expanded in the first half \nof 2023 due to diminishing supply chain pressures \nand moderating inflationary pressures. Economic \nactivities expanded on eased household budget \nconstraints and improved business & consumer \nsentiments as a result of tailwinds from \nmoderating inflationary pressures, and waning \nsupply chain disruptions due to the reopening of \nChina’s economy. \nThe average J.P. Morgan Global Composite \nPurchasing Manager’s Index (PMI), rose to 52.75 \npoints in the first half of 2023 above 48.85 points \nand 52.00 points in the preceding and \ncorresponding \nperiods, \nrespectively. \nThe \nexpansion was driven primarily by the services \nsub-sector, which rose to 53.65 points, compared \nwith 49.30 points in the preceding period, as \nbusiness optimism strengthened, and cost \npressures peaked. It was, however, dampened by \na contraction in manufacturing output as new \norders declined. The manufacturing sub-index \nremained in contractionary territory at 49.53 \npoints in the first half of 2023. \n \nTable 2.1: Global Purchasing Managers’ Index (PMI) \n \n2022H1 \n2022H2 \n2023H1 \nComposite \n52.0 \n48.85 \n52.75 \nManufacturing \n51.87 \n49.83 \n49.53 \nServices \n(Business Activity) \n52.67 \n49.30 \n53.65 \n Source: JP Morgan. \n2.1.1. Advanced Economies (AEs) \nEconomic activities in major Advanced Economies \nimproved as supply chains normalised and price \npressures moderated. The average JP Morgan \ncomposite Global Purchasing Managers’ Index \n(PMI) in most of the countries in the region \nimproved in the first half of 2023. In the United \nStates and the United Kingdom, a solid upturn in \nprivate sector business activity, attributed to \nimproved supply chains, broad decline in food \nand energy prices, and stronger demand, \nstimulated the pace of economic activity. The \nexpansion was reflected by the rise in PMI to \n51.68 and 52.59 points, compared with 46.90 and \n49.40 points, respectively, in the second half of \n2022. \nSimilarly, economic activity expanded in Germany \nas PMI rose to 51.99 points, over the level in the \npreceding half of 2022. The expansion was \nunderpinned by an uptick in the services sector \non the back of reduced inflationary pressures and \nthe acceleration of new businesses and job \ncreation. Also, business activities in Japan further \nexpanded, as reflected by the rise in PMI to 52.00 \npoints, compared with 50.33 points in the \ncorresponding period of 2022. The expansion was \nbuoyed \nby \nincreased \ndemand \nand \naccommodative policies such as the travel \nsubsidy programme. \n \nTable 2.2: Selected Countries' PMIs \n \n2022H1 \n2022H2 \n2023H1 \nUnited States \n54.43 \n46.90 \n51.68 \nUnited Kingdom \n56.67 \n49.40 \n52.59 \nChina \n46.47 \n49.95 \n54.32 \nIndia \n54.48 \n56.90 \n59.59 \nGermany \n54.23 \n46.85 \n51.99 \nItaly \n52.18 \n48.20 \n53.07 \nJapan \n50.33 \n50.15 \n52.00 \nSouth Africa \n49.47 \n50.65 \n49.18 \nSource: IHS Markit. \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n8 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n2.1.2 Emerging Markets and Developing \n Economies \nGrowth in the Emerging Markets and Developing \nEconomies (EMDEs) remained impressive, due to \nrising demand and the re-opening of China’s \neconomy. The PMI figures indicated expansion for \nmost EMDEs. Specifically, China’s PMI index, at \n54.32 points, rose above the benchmark relative \nto 49.95 points in the preceding period. This was \ndriven primarily by improved domestic sales and \noperating conditions in China's manufacturing \nsector and an overall uptick in economic \nactivities. India’s PMI index rose to 59.59 points \nabove 56.90 points and 54.48 in the preceding \nand corresponding half of 2022, respectively. The \nincrease was attributed to surging demand and \nincreased export orders, with improvements in \noperating conditions. \nIn South Africa, the PMI index dropped to 49.18 \nfrom 50.65 points in the second half of 2022, \nowing primarily to disruptions in electricity supply \nand elevated prices, resulting in weak economic \nperformance. \n \n2.2 \nGLOBAL INFLATION \nInflationary pressures moderated in the first half \nof 2023 following monetary policy tightening by \nmost \ncentral \nbanks \nand \nsupply \nchain \nimprovement. In the Advanced Economies (AEs), \ninflation generally declined due to lower \ncommodity prices, reduced energy costs, and \nsustained interest rate hikes. In the United States, \ninflation eased to 3.0 per cent, compared with 6.5 \nper cent at end-December 2022 and 9.1 per cent \nat end-June 2022. In the United Kingdom, \ninflation decreased to 7.9 per cent, compared \nwith 10.5 per cent and 9.4 per cent at end-\nDecember 2022 and end-June 2022, respectively. \nIn Japan, inflation fell to 3.3 per cent, from 4.0 per \ncent at end-December 2022, but was higher than \n2.4 per cent at end-June 2022. Inflation in \nGermany and Italy fell to 6.4 per cent and 6.7 per \ncent, from 8.1 per cent, and 12.3 per cent at end-\nDecember 2022, respectively, and 6.7 per cent \nand 8.5 per cent at end-June 2022. \nIn the EMDEs, inflation generally declined in most \neconomies, compared with the level in the \nsecond half of 2022, due to decreased food and \nenergy prices and the normalisation of the supply \nchains in many sectors. Specifically, inflation in \nChina flattened to 0.0 per cent, from 1.8 per cent \nat end-December 2022 and 2.5 per cent at end-\nJune 2022. Inflation in Russia and India declined \nto 3.2 per cent and 4.8 per cent at end-June 2023, \nfrom 11.9 per cent and 5.7 per cent in the \npreceding half, and 15.9 per cent and 7.0 per cent \nin the corresponding half of 2022, respectively. \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n9 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nSource: Refinitiv Eikon (Thomson Reuters). \n \n \n \nSource: Refinitiv Eikon (Thomson Reuters). \n \n \n \n \n \n \n \n \n \nCountry \nJun-22 \nJul-22 \nAug-22 \nSep-22 \nOct-22 \nNov-22 \nDec-22 \nJan-23 \nFeb-23 \nMar-23 \nApr-23 \nMay-23 \nJun-23 \nUnited States \n9.1 \n8.5 \n8.3 \n8.2 \n7.7 \n7.1 \n6.5 \n6.4 \n6.0 \n5.0 \n4.9 \n4.0 \n3.0 \nUnited Kingdom \n9.4 \n10.1 \n9.9 \n10.1 \n11.1 \n10.7 \n10.5 \n10.1 \n10.4 \n10.1 \n8.7 \n8.7 \n7.9 \nJapan \n2.4 \n2.6 \n3.0 \n3.0 \n3.7 \n3.8 \n4.0 \n4.3 \n3.3 \n3.2 \n3.5 \n3.2 \n3.3 \nGermany \n6.7 \n6.7 \n7.0 \n8.6 \n8.8 \n8.8 \n8.1 \n8.7 \n8.7 \n7.4 \n7.2 \n6.1 \n6.4 \nItaly \n8.5 \n8.4 \n9.1 \n9.4 \n12.6 \n12.6 \n12.3 \n10.7 \n9.8 \n8.1 \n8.7 \n8.0 \n6.7 \nChina \n2.5 \n2.7 \n2.5 \n2.8 \n2.1 \n1.6 \n1.8 \n2.1 \n1.0 \n0.7 \n0.1 \n0.2 \n0.0 \nRussia \n15.9 \n15.1 \n14.3 \n13.7 \n12.6 \n12.0 \n11.9 \n11.8 \n11.0 \n3.5 \n2.3 \n2.5 \n3.2 \nIndia \n7.0 \n6.7 \n7.0 \n7.4 \n6.8 \n5.9 \n5.7 \n6.5 \n6.4 \n5.7 \n4.7 \n4.3 \n4.8 \nBrazil \n11.9 \n10.1 \n8.7 \n7.2 \n6.5 \n5.9 \n5.8 \n5.8 \n5.6 \n4.7 \n4.2 \n3.9 \n3.2 \nSouth Africa \n7.4 \n7.8 \n7.6 \n7.5 \n7.6 \n7.4 \n7.2 \n6.9 \n7.0 \n7.1 \n6.8 \n6.3 \n5.4 \n-2\n0\n2\n4\n6\n8\n10\n12\n14\n16\nUnited\nStates\nUnited\nKingdom\nJapan\nGermany\nItaly\nChina\nRussia\nIndia\nSouth\nAfrica\nBrazil\nJun-22\nDec-22\nJun-23\nTable 2.3: Inflation in Selected Countries \nFigure 2.1: Inflation in Selected Countries (per cent) \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n10 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nSimilarly, inflation in Brazil and South Africa fell, \ncompared with the level in the second half of \n2022, driven majorly, by declining energy costs. In \nBrazil, inflation fell to 3.2 per cent, from 5.8 per \ncent at end-December 2022 and 11.9 per cent at \nend-June 2022. Inflation in South Africa \ndecelerated to 5.4 per cent, from 7.2 2 per cent \nat end-December 2022 and 7.4 per cent at end-\nJune 2022. \n \n2.3 \nGLOBAL FINANCIAL MARKETS \n2.3.1 Global Financial Conditions \nTight global financial conditions amid waning \ninflationary pressures influenced the performance \nof financial markets in the first half of 2023. \nGlobal stock markets were bullish in the review \nperiod, led by the AEs, despite the policy rate \nhikes. The equity indices of the AEs weathered \nthe banking sector crisis to post gains, fueled by \nthe surge in artificial intelligence (AI) inspired \ntech stock and the deceleration in inflation. \nSpecifically, the S&P 500 grew by 15.91 per cent, \ncompared with 1.43 per cent in the second half of \n2022 and a contraction of 20.58 per cent in the \nfirst half of 2022. \nSimilarly, the performance of the Nasdaq 100, \nCAC 40, DAX, EURO STOXX 50, NIKKIE 225, TOPIX, \nFTMIB, and IBEX 35 surpassed the gains in the \nprevious and corresponding periods of 2022. \nNotably, the EMDEs stocks were confronted by \ncapital outflows triggered by concerns about \nrising interest rates and inflation amid broad-\nbased weaknesses in commodity prices and \nconcerns over the outlook for the Chinese \neconomy. Specifically, the Brazilian BVSP, Indian \nBSESN, Egyptian EGX30, and South African JALSH, \nunderperformed in the review period, compared \nwith the levels in the first and second halves of \n2022. Uncertainties surrounding the Turkish \nelection constrained the growth of the XU100 to \n4.54 per cent, from 129.04 per cent in the second \nhalf of 2022 and 29.48 per cent in the first half of \n2022. \nFigure 2.2: Key Global Stock Indices \n \nSource: Reuters and Bloomberg. \n \nFigure 2.3: 10-year Government Bond Yields for Selected \nCountries \nSource: Bloomberg. \n \nIn response to elevated inflation, government \nbonds surged on the back of the hawkish \n-50.00\n-30.00\n-10.00\n10.00\n30.00\n50.00\n70.00\n90.00\n110.00\n130.00\nUS-S&P 500\nUS-Dow Jones\nUS-Nasdaq 100\nUK-FTSE 100\nFrance-CAC 40\nGermany-DAX\nEuro Area-EURO STOXX 50\nCanada-SPTSE\nJapan-Nikkei 225\nJapan-TOPIX\nItaly-FTMIB\nSpain-IBEX 35\nMexico-MXX\nTurkey-XU100\nRussia-IMOEX\nBrazil-BVSP\nIndia-BSESN\nHong Kong-HSI\nChina-SZSE\nChina-SZSC\nIndonesia-JKSE\nKenya-NSE20\nEgypt-EGX30\nSouth Africa-JALSH\nAdvanced Economies\nEmerging Markets and Developing Economies\nJun-23\nDec-22\nJun-22\n3.17 1.58 2.83\n0.30\n2.88 3.49 2.62\n8.82 7.19 6.90\n15.56\n10.15\n32.55\n13.70\n10.16\n-5.00\n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\n30.00\n35.00\nUnited States\nEuro Area\nUnited Kingdom\nJapan\nCanada\nItaly\nSpain\nMexico\nIndia\nIndonesia\nTurkey\nSouth Africa\nGhana\nKenya\nRussia\nAdvanced Economies\nEmerging Markets and Developing Economies\nJun-23\nDec-22\nJun-22\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n11 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nmonetary policy stance. Bond yields in the US \nrallied by 1.5 percentage points, compared with \nthe second half of 2022, reflecting concerns over \ninflation and expectations of tighter monetary \npolicies by the US Federal Reserve. Similarly, the \nbond yields of the United Kingdom (2.83 per \ncent), Japan (0.30 per cent), and Canada (2.88 per \ncent) rose higher than in the preceding period. \nYields of emerging market bonds also rallied in \nthe review period, except Turkey, reflecting the \nrate-cutting stance of the Turkish Central Bank at \nthe beginning of the year. Policy rate hikes fueled \nthe surge in yields of Mexico, India, Indonesia, \nSouth Africa, and Kenya, while the increase in the \nRussian bond yield was largely due to the \ngovernment's dependence on bonds to finance \nits budget deficit. \n \n2.4 \nGLOBAL COMMODITY PRICES \n2.4.1 Agricultural Commodity Prices \nGlobal agricultural commodity prices generally \ndeclined in the first half of 2023. The extension of \nthe Black Sea Grain Initiative between Russia and \nUkraine played a pivotal role in sustaining grain \nexports to global markets. In addition, favourable \nweather conditions in key grain-producing \nregions, which benefitted harvest, coupled with \na \ndecrease \nin \nenergy \ncosts \nmoderated \nagricultural commodity prices. \nConsequently, the all-commodities index stood at \n124.5 index points (2010=100), showing a 0.9 per \ncent decline, compared with the level in the \npreceding half, but was 19.1 per cent higher than \nthe corresponding period in 2022. Significant \nprice decreases were observed for rubber, palm \noil, soybeans, wheat, and cotton, which saw \ndeclines of 0.6 per cent, 2.5 per cent, 5.8 per \ncent, 8.0 per cent, and 14.7 per cent, \nrespectively. \nConversely, price increases of 7.4 per cent, 10.9 \nper cent, and 20.9 per cent were recorded for \ngroundnut, coffee, and cocoa, respectively, in the \nfirst half of 2023. The surge in price of cocoa was \ndriven by lower production in West Africa, a \nconsequence of the prevalence of black pod \ndisease, which significantly affected cocoa \nsupply. \n \nTable 2.4: Indices of Average World Prices of Nigeria's \nMajor Agricultural Export Commodities (2010 = 100) \n(Dollar Based) \n \n2022H1 \n2022H2 \n2023H1 \n% ∆ \n \n-1 \n-2 \n-3 \n \n All Commodities \n104.5 \n125.7 \n124.5 \n19.1 \n Cocoa \n79.7 \n66.6 \n80.6 \n1.0 \n Cotton \n89.9 \n145.3 \n123.9 \n37.8 \n Coffee \n112.1 \n145.1 \n160.9 \n43.5 \n Wheat \n152.6 \n201.4 \n185.3 \n21.4 \n Rubber \n36.3 \n45.3 \n45.0 \n24.1 \n Groundnut \n107.6 \n136.1 \n146.1 \n35.8 \n Palm Oil \n131.1 \n115.7 \n112.7 \n-\n14.0 \n Soya Beans \n127.0 \n150.4 \n141.8 \n11.6 \nSource: Staff Computation based on data from Index Mundi. \n \n2.4.2 Crude Oil Prices \nCrude oil prices declined in the first half of 2023, \ndue, mainly to higher global supply, particularly \nfrom the US and Mexico. Consequently, the \naverage spot price of Nigeria’s reference crude, \nthe Bonny Light, fell by 17.2 per cent to US$81.87 \nper barrel (pb) from US$98.90 pb in the second \nhalf of 2022, and by 26.2 per cent from \nUS$110.96 pb in the corresponding half of 2022. \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n12 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 2.5: Bonny Light Average Prices, 2018H1- \n 2023H1(US$ per barrel) \n \nSource: Refinitiv Eikon (Thomson Reuters). \n \nSimilarly, prices of the Brent, Forcados, West \nTexas Intermediate (WTI) and OPEC Reference \nBasket fell by 18.0 per cent, 17.5 per cent, 15.1 \nper cent and 16.3 per cent to US$80.37 pb, \nUS$82.26 pb, US$75.93 pb and US$79.35 pb, \nrespectively, relative to the level in the second \nhalf of 2022. Furthermore, the prices of all the \ncrude streams declined, compared with the levels \nin the corresponding half of 2022. \n \nFigure 2.6: Average Monthly Crude Oil Prices, 2022-2023 \n(US$ per barrel) \n \nSource: Refinitiv Eikon (Thomson Reuters). \n2.4.3 Global Crude Oil Supply and Demand \nGlobal crude oil supply increased on account of \nhigher supplies from some non-OPEC countries. \nWorld crude oil supply averaged 101.20 million \nbarrels per day (mbpd) in the first half of 2023, a \n2.4 per cent and 2.30 per cent increase above the \nlevels in the preceding and corresponding halves \nof 2022, respectively. The rise was attributed, \nmainly to higher supplies of crude oil from Mexico \nand the US. Specifically, increased private sector \ninvestment in Mexico’s oil and gas sector \ncontributed to the increase in crude oil supply. In \nthe US, the crude oil supply increase was \nsupported by higher demand for oil in Asia, as \ncountries in the region sought alternative sources \nof crude following production cuts by OPEC+. \nFollowing the announcement by OPEC+ in April \n2023 to cut production by 1.16 mbpd from May \nuntil the end of the year, OPEC crude oil supply \nfell by 2.1 per cent, to 33.76 mbpd in the first half \nof 2023, from 34.57 mbpd in the preceding half \nof 2022. Specifically, the OPEC crude portion fell \nby 2.2 per cent to 28.43 mbpd, while the \nLiquefied Natural Gas (LNG) and condensates \nportion fell by 1.6 per cent to 5.41 mpbd, \ncompared with the levels in the second half of \n2022. However, it rose by 0.24 per cent \ncompared with 33.76 mbpd in the first half of \n2022. \nWorld crude oil demand rose to 100.40 mbpd in \nthe first half of 2023, compared with 100.06 \nmbpd and 98.56 mbpd in the preceding and \ncorresponding halves of 2022, respectively. The \nOrganisation for Economic Co-operation and \nDevelopment (OECD) countries' demand was \n45.0 per cent (45.53 mbpd) of the total world \ndemand, while non-OECD countries, led by China, \naccounted for the balance, at 54.87 mbpd. \n71.99\n73.05\n67.9\n64.98\n40.6\n43.74\n64.82\n77.08\n110.96\n98.9\n81.87\nUS$ PER BARREL\n0\n20\n40\n60\n80\n100\n120\nBonny Light\nBrent\nForcados\nWTI\nOPEC Basket\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n13 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nThe improved economic growth in China \nfollowing the reopening of its economy and \nhigher crude oil import quotas to refiners, \nsupported the increase in demand. In addition, \nthe importation of large volumes of discounted \nRussian crude feedstock by Chinese refiners, \nfurther supported the increase in crude oil \ndemand. \n \n2.5 \nCENTRAL BANKS’ RESPONSE \nMost central banks tightened their monetary \npolicy stance to tame the persistent inflationary \npressures. The pace of policy hikes slowed in the \nfirst half of the year, signaling an end to the \naggressive \ntightening \ncycle \nin \n2022, \nas \ninflationary pressures began to ease. Specifically, \nthe Federal Reserve raised the monetary policy \nrate by a cumulative 75 basis points (bps) to 5.25 \nper cent within the period. The European Central \nBank and Bank of England raised their policy rates \nby 150 bps each, to 4.0 per cent and 5.0 per cent, \nrespectively. Also, the Bank of Canada raised its \nbenchmark rate by 50 bps to 4.75 per cent. \nHowever, the Bank of Japan maintained its ultra-\nlow policy rate at -0.10 per cent to support \neconomic recovery. \nMonetary authorities in the EMDEs also \nmaintained a hawkish stance, tightening rates \nfurther to curtail the elevated inflation and \nsafeguard their domestic currencies. The Bank of \nMexico raised its repo rate to 11.25 per cent from \n10.50 per cent. Central Bank of Turkey also hiked \nits policy rate to 15 per cent from 9.0 per cent, \nreversing its unorthodox monetary policies. \nMajor economies in Africa also continued to \ntighten their financial conditions. The Central \nBank of Egypt and the Reserve Bank of South \nAfrica raised policy rates by 2 bps and 125 bps, to \n18.25 per cent and 8.25 per cent, respectively, in \nthe first half of 2023. The Bank of Ghana raised its \npolicy rate by a cumulative 250 bps, to 29.50 per \ncent. However, the People’s Bank of China \nretained the anchor rate at 3.65 per cent \nthroughout the period to balance growth and \nsafeguard the yuan. \n \n Table 2.5: Monetary Policy Rates of Selected Central Banks \nCountry \n2022H1 \n2022H2 \n2023H1 \nUnited States \n4.5 \n4.50 \n5.25 \nUnited Kingdom \n1.25 \n3.50 \n5.00 \nJapan \n-0.10 \n-0.10 \n-0.10 \nCanada \n1.75 \n4.25 \n4.75 \nEuro Area \n0.0 \n2.50 \n4.00 \nChina \n3.70 \n3.65 \n3.65 \nIndia \n4.9 \n6.25 \n6.50 \nMexico \n7.75 \n10.5 \n11.25 \nTurkey \n14.0 \n9.0 \n15.0 \nEgypt \n11.5 \n16.25 \n18.25 \nGhana \n19.0 \n27.00 \n29.50 \nSouth Africa \n7.00 \n7.00 \n8.25 \nNigeria \n14.00 \n16.50 \n18.50 \n Source: Various Central Bank Websites. \n \n \n2.6 \nFISCAL MEASURES \nFiscal authorities faced the dilemma of supporting \ncounter-inflationary measures and providing \nrelief to the vulnerable. Several European \ncountries commenced the reform of their fiscal \nframework \nafter \nadopting \nflexible \npolicy \nmeasures to cushion the effects of the COVID-19 \npandemic. The new measures were aimed at \nachieving debt sustainability and building up fiscal \nbuffers. The EU also extended the escape clause \nearlier adopted in 2022 to allow greater flexibility \nwhen countries are faced with shocks. \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n14 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nDuring the period, the Turkish government rolled \nout a programme to provide free natural gas to \nhouseholds for one year to stem the cost-of-living \ncrises in the country. Some countries within the \nEU, such as Germany and France, also \nimplemented energy subsidies to address the \nelevated energy prices owing to the Russia-\nUkraine war. \nIn Africa, Heads of Government, the African \nDevelopment \nBank, \nDevelopment \nFinance \ninstitutions, \nand \ninstitutional \ninvestors \nestablished the modalities for developing 69 \npriority infrastructure projects worth US$160 \nbillion, expected to be completed by 2030. The 69 \nprojects were under the Programme for \nInfrastructure Development in Africa (PIDA), a \nblueprint for infrastructure development meant \nto increase Africa's output, competitiveness and \neconomic integration. \nAlso, the Governments of Egypt and Ghana \nsecured loans of about US$3 billion each from the \nIMF. \nThe \nloans \naimed \nat \nrestoring \nmacroeconomic \nstability, \nparticularly \nsafeguarding \ndomestic \ncurrencies \nwhile \nprotecting \nthe \nvulnerable. \nThe \ncountries \nintroduced reforms towards a more sustainable \ndebt framework, preserve financial stability, \nrestore buffers, and pave the way for private-\nsector-led \ngrowth. \nTo \naddress \nthe \nhigh \ninflationary pressure and fiscal prudence, the \nBank of Ghana signed a Memorandum of \nUnderstanding with the Ghanaian government to \neliminate fiscal dominance by halting the \nfinancing of the budget through Ways and Means \nAdvances. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n15 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n \n \n \n \n \n \n \n \n \n \n \n \n \nSection Three\nMACROECONOMIC \nPERFORMANCE \nTHE DOMESTIC ECONOMY\n• Monetary Policy\n• Real Economy\n• Fiscal Policy\n• Financial Markets\n• Payments System\n• External Sector\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n16 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n 3.1 \nMONETARY POLICY \n \n \nMajor Economic \nDevelopment \n \n\nExchange rate instability \n\nHeightened currency \nspeculation \n\nElevated global inflation \n\nInsecurity-induced \ninflationary pressure \nPriorities of Monetary Policy \n \n\nEnsure exchange rate & \nprice stability \n\nStrengthen financial \nmarket fundamentals \n\nEncourage credit flow to \nthe real sector \n \n \nImplications \n \n\nPersistence of \nmacroeconomic risk \n\nPressure on the exchange \nrate \n\nDeclining but double-digit \ninflation figure \n\nHeightened investors’ \nsentiment \n \n \n \n \n \nMonetary Policy Environment \nLiquidity Management \nThroughout the first half of the year, the Central Bank of Nigeria (CBN) employed \nOpen Market Operations (OMO), reserve requirements, and discount window \noperations to maintain optimal banking system liquidity. In response to \nescalating inflationary pressures, the CBN adhered to a tight monetary policy \nstance, incrementally raising the Monetary Policy Rate (MPR) by 50 basis points \nat each of the January, March, and May 2023 Monetary Policy Committee (MPC) \nmeetings, reaching 18.5 percent. \nThe asymmetric corridor, set at +100/-700 basis points around the MPR, \nalongside the Cash Reserve Ratio (CRR) at 32.5 percent and Liquidity Ratio at 30 \npercent, remained unchanged. The Bank's decisions were driven by upside risks \nto the inflation outlook and a commitment to uphold its credibility, aligning with \nearlier forward guidance to tighten policy in the face of persistent inflationary \ntrends. \nExchange Rate Policy \n\nIn an official press release issued on June 14, 2023, the CBN \ninformed business stakeholders and the public about immediate \nadjustments to the operations of the Nigerian foreign exchange \nmarket. These modifications entail consolidating multiple \nexchange rates into the Investors and Exporters (I&E) window, \nproviding unrestricted access to foreign exchange for all eligible \ntransactions without segmentation. \nInstruments of MP \nIn \nfulfilling \nits \nstatutory \nmandate, the Bank utilized a \nvariety of monetary policy \ninstruments during the review \nperiod. \n\nThe CBN Bill remained the \nmajor instrument of \nmonetary policy, \ncomplemented by: \n\nCash Reserve Ratio (CRR) \n\nStanding Facilities \noperations \n\nInterventions in the \nforeign exchange market. \nTrend in Monetary Policy Rate (per cent) \n \nMonetary Policy Decisions \n \nJanuary \n23 and \n24, 2023 \n \nRaised the MPR to 17.5 percent \nRetained the CRR at 32.5 percent \nRetained the Liquidity Ratio at 30.0 percent; and \nRetained the Asymmetric corridor at +100 and -700 \nbasis points around the MPR. \n \nMarch 20 \nand 21, \n2023 \n \nRaised the MPR to 18.0 percent \nRetained the CRR at 32.5 percent \nRetained the Liquidity Ratio at 30.0 percent; and \nRetained the Asymmetric corridor at +100 and -700 \nbasis points around the MPR. \n \nMay 23 \nand 24, \n2023 \nRaised the MPR to 18.5 percent \nRetained the CRR at 32.5 percent \nRetained the Liquidity Ratio at 30.0 percent; and \nRetained the Asymmetric corridor at +100 and -700 \nbasis points around the MPR. \n \n \n \n \n \n \n \n \n \n \nMonetary Policy \nobjectives\nPrice stability \nHeadline inflation: 6-9%\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n17 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n3.2 \nTHE REAL ECONOMY \n3.2.1 Domestic Output \nThe economy maintained its growth trajectory, \nalbeit at a slower pace, despite significant \nheadwinds in the first half of the year. Real \nGross Domestic Product (GDP) grew by 2.41 per \ncent to N35,469 billion, compared with 2.91 \nper cent and 3.32 per cent in the preceding and \nthe first halves of 2022, respectively. The \ngrowth \nwas \non \naccount \nof \nsustained \nimprovement in the performance of the non-oil \nsector, which grew by 3.18 per cent to N33,420 \nbillion in the first half of 2023. Continued \ngrowth in the non-oil sector was largely, driven \nby increased investment in ICT infrastructure, \nowing to the continued deployment of the Fifth \nGeneration (5G) broadband services, and \nimproved finance and insurance services. Also, \nthe 2023 general elections and the pre-\npopulation census spending gave further \nimpetus to growth. \nThe growth momentum, however, moderated \non account of both global and domestic \nheadwinds. On the global front, energy costs, \nexacerbated by the lingering effects of the \nRussia-Ukraine war, coupled with sustained the \nhikes in policy rates to contain inflation, \nweakened the productive base of the economy. \nOn the domestic front, the subsisting \ninfrastructural and security challenges, and \nhike in PMS prices, constrained production \nactivities during the period. \n \n \n \n \n \n Figure 3.2.1: GDP Growth Rate (per cent) \n Source: National Bureau of Statistics (NBS). \n \nThe oil sector contracted by 8.70 per cent to \nN2,049 billion during the period, compared with \nthe 18.66 per cent and 19.71 per cent in the \npreceding and first halves of 2022, respectively, \ndue to lower crude oil prices. However, the \nnarrowed contraction was on account of \nimproved security measures in the crude oil \nproduction and distribution infrastructure. In \naddition, sustained investment, such as the \nexploration activities by the Nigeria National \nPetroleum \nCompany \n(NNPC) \nLimited, \nparticularly in the Middle Benue Trough \n(starting with the Ebenyi-A Exploration Well in \nNasarawa State) contributed to the lower \ncontraction. \nFurthermore, Total Energies made a significant \noil and gas discovery in the Ntokon field, located \nin Oil Mining Lease (OML)102 offshore Nigeria. \nThe Ntokon-1AX well has a reservoir of 38 \nmeters of light oil and 15 meters of gas. \nConsequently, at an average daily production of \n1.21 million barrels per day (mbpd), Nigeria’s \ncrude oil output in the first half of 2023, \nincreased by 2.54 per cent, over 1.18 mbpd in \nthe second half of 2022. In contrast, the \n-25.0\n-20.0\n-15.0\n-10.0\n-5.0\n0.0\n5.0\n10.0\n2019H1 2019H2 2020H1 2020H2 2021H1 2021H2 2022H1 2022H2 2023H1\nTotal GDP\nNon-Oil GDP\nOil GDP\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n18 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nproduction level fell slightly by 0.82 per cent, \nrelative to the levels in the corresponding half \nof 2022. \n \nFigure 3.2.2: Average Crude Oil Production \nSource: Refinitiv Eikon (Thomson Reuters). \n \n3.2.2 Sectoral Performance \n Agriculture \nAgriculture sector performance moderated in \nthe first half of 2023. The tepid growth was on \naccount of marked increases in input costs, \nheightened security concerns along food \nproducing areas, and lagged effects of the 2022 \nflooding on farm produce, and food delivery \nchain. \nThus, the agriculture sector grew tepidly by \n0.32 per cent to N7,922 billion, compared with \nthe 1.69 per cent and 2.15 per cent in the \npreceding and first halves of 2022, respectively. \nThe growth was driven mainly by crop \nproduction, which grew faster at 1.88 per cent \ncompared with 1.86 per cent in the preceding \nhalf. Forestry grew by 1.58 per cent while \nlivestock and fishery contracted by 17.3 per \ncent and 1.59 per cent, respectively. \n \n \nFigure 3.2.3: Agriculture Sector Performance (%) \nSource: National Bureau of Statistics (NBS). \n \nThe growth of the sector was corroborated by \nthe higher Index of Agricultural Production, \nwhich stood at 152.3 points (2010=100). \n \n Table 3.2.1: Agricultural Production Index \n \n \nFirst Half 2022, Second Half 2022, First Half 2023 \n1 \n2 \n3 \n%(3&1) \n%(3&2) \nAggregate \n149.3 \n151.82 \n152.31 \n2.01 \n0.32 \nCrops \n148.4 \n151.18 \n154.02 \n3.79 \n1.88 \nStaples \n136.9 \n136.52 \n136.71 \n-0.14 \n0.14 \nother crops \n153.6 \n150.41 \n152.01 \n-1.04 \n1.06 \nLivestock \n147.8 \n147.77 \n122.21 \n-17.32 \n-17.30 \nFishery \n154.9 \n157.86 \n155.35 \n0.29 \n-1.59 \nForestry \n158.92 \n156.81 \n159.29 \n0.23 \n1.58 \nSource: National Bureau of Statistics (NBS). \nIndustry \nThe performance of the industry sector \nremained weak on account of technical and \nproduction challenges, especially in the crude \npetroleum and natural gas sub-sector. The \nsector contracted (though at a slower pace) by \n0.76 per cent in to N7,025 billion the first half \n-2.0\n-1.0\n0.0\n1.0\n2.0\n3.0\n4.0\n2021H1\n2021H2\n2022H1\n2022H2\n2023H1\nCrop Prod.\nLivestock\nForestry\nFishing\nAgric (RHS)\n1.9\n1.85\n1.85\n1.89\n1.66\n1.33\n1.37\n1.25\n1.22\n1.07\n1.21\nMillions Of Barrels Per Day\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n19 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nof 2023, compared with 4.52 per cent and 4.73 \nper cent contractions inthe preceding and \ncorresponding halves of 2022, respectively. \nContraction in the industry sector was due to \nthe poor performance of the mining and \nquarrying subsector, especially the crude oil \nand natural gas activity sector as a result of \nlower crude oil prices owing to increased global \nsupply of crude oil, particularly from the US and \nMexico. However, the solid mineral activity \nsector grew further by 32.92 per cent \ncompared with 27.42 per cent in the preceding \nhalf, on account of sustained implementation \nof reforms. \nThe slow pace of contraction of the industry \nsector was reflected in the improvement in the \nindex of Industrial Production, which, at 96.8 \n(2010=100) index points, rose by 6.5 per cent, \ncompared with 90.9 points in the preceding half \nof 2022. \nFigure 3.2.4.: Index of Industrial Production \nSource: Computed based on data obtained from NBS and \nManufacturing Association of Nigeria (MAN). \n \n Manufacturing subsector \nThe Manufacturing sub-sector remained largely \ninnovative and resilient to observed shocks as it \ndrove growth in the industry sector and overall \nGDP growth with contributions of 0.87 \npercentage point and 0.18 percentage point, \nrespectively. The subsector also grew faster by \n1.88 per cent, compared with 0.51 per cent in \nthe preceding half of 2022 on account of \ninnovative supply chain delivery systems and \nother cost-cutting measures which improved \noperational efficiency of manufacturing outfits \namid rising operational costs as well as \nincreased investment in plant and technology. \nThe sub-sector showed resilience in the face of \nhigher energy prices and weaker purchasing \npower of citizens owing to rising inflationary \npressures. The improved performance was due \nto rising demand for locally manufactured \ngoods. This resulted in higher manufacturing \ncapacity utilisation, which increased by 3.3 \npercentage points to 58.2 per cent, compared \nwith 54.9 per cent and 57.9 per cent observed \nin the preceding and corresponding halves of \n2022, respectively. \n \nConstruction \nConstruction subsector supported growth, \nexpanding by 3.34 per cent to N1,322 billion in \nthe first half of 2023, compared with a growth \nof 4.59 per cent and 4.48 per cent in the \npreceding and corresponding halves of 2022, \nrespectively. The positive performance of the \nsub-sector \nwas \nattributed \nto \ncontinued \ninvestment in public ad private sectors to \nnarrow infrastructural deficit in the country. \nThis \nincluded \nthe \ncompletion \nof \nkey \ninfrastructural projects, such as the Second \nNiger Bridge, 200 out of 365 kilometres of the \nKano-Abuja highway, and 114 out of 127 \nkilometres of the Lagos-Ibadan highway. This \nwas in addition to the ongoing construction of \n185.9\n186.4\n189.4\n57.9\n47.2\n53.3\n240.1\n217.3\n264.2\n98.6\n90.9\n96.8\nF I R S T H A L F \n2 0 2 2\nS E C O N D H A L F \n2 0 2 2\nF I R S T H A L F \n2 0 2 3\nIndex\nManufacturing\nMining\nElectricity\nIndustry\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n20 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nthe dual carriageway section of the Kaduna-\nKano Road and Federal Secretariat building \ncomplexes in Anambra, Bayelsa, and Zamfara \nstates. Also, the number of housing units under \nconstruction by the Federal Government \nincreased to 6,124 units as at June 2023, from \n6,018 units and 5,698 units as at the end of the \npreceding and corresponding halves of 2022, \nrespectively. In addition, the number of \ncompleted housing units increased to 2,870 \nunits as at end June 2023 from 2,515 units and \n2,362 units at the end of the preceding and \ncorresponding halves of 2022, respectively. \n \nWater Supply, Sewage and Waste \nManagement Sub-Sector \nThe \nwater \nsupply, \nsewage \nand \nwaste \nmanagement sub-sector grew by 14.72 per \ncent to N114 billion, compared with 6.28 per \ncent and 19.41 per cent in the preceding and \ncorresponding halves of 2022, respectively. \nThis resulted in a 0.04 percentage point \ncontribution to overall growth. \n \nEnergy \nElectricity, Gas, Steam & Air conditioner \nsubsector \nThe Electricity, Gas, Steam & Air conditioner \nsubsector grew by 6.84 per cent to N161.87 \nbillion in the first half of 2023, compared with \n7.06 per cent and a contraction of 11.42 per \ncent in the preceding and corresponding halves \nof 2022, respectively. The growth was driven \nmainly by the improvement in electricity \n \n1 The five modular refineries are - the Waltersmith, Niger \nDelta Petroleum Resources (NDPR), OMSA Pillar Astex \nCompany (OPAC), Duport and Edo Refineries. \ngeneration occasioned by the execution of the \nSiemens project and activation of the 700 \nmegawatts Zungeru Hydroelectric Power Plant \nto the national grid, among other investments. \nHence, the average electricity generation, at \n4,193.4 MW/h increased by 4.0 and 10.3 per \ncent, compared with 4,031.0 MW/h and 3,801.9 \nMW/h in the preceding and corresponding half \nof 2022. Similarly, the average electricity \nconsumption rose by 13.4 per cent to 3,547.8 \nMW/h from 3,128.1 MW/h and 3,236.2 MW/h \nin the preceding and corresponding halves of \n2022. The increase was attributed to addional \ninvestment in the electricity distribution chain \nand continued deployment of prepaid meters \nnationwide. \nA \ncomprehensive \nlegal \nand \ninstitutional \nframework for Nigeria's electricity industry was \ncreated with the signing of the Electricity Act of \n2023 into law. The Act aims to transform the \nsector by empowering states, companies, and \nindividuals to generate, transmit and distribute \nelectricity. It addresses issues related to grid \ninstability, electricity access and employment \nopportunities. \nRefinery Operations \nThe output of the five modular refineries 1 in \nNigeria revealed that fuel oils constituted the \nmajority of products produced and was closely \nfollowed by the automotive gas oil (AGO) or \ndiesel. \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n21 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nTable 3.2.2: Total production from refineries \n(million litres) 2023H1 \nProduct \nJan \nFeb \nMar \nApr \nMay \nJun \nTotal \n AGO \n7.5 \n9.9 \n8.9 \n9.8 \n10.3 \n9.3 \n55.6 \n DPK \n2.0 \n5.2 \n2.9 \n4.9 \n1.2 \n5.7 \n21.9 \n \nNAPHTA \n3.6 \n9.6 \n8.0 \n5.1 \n2.4 \n10.1 \n38.8 \n Fuel Oil \n11.0 \n9.1 \n5.6 \n10.7 \n8.7 \n10.9 \n56.0 \n Total \n24.1 \n33.8 \n25.4 \n30.5 \n22.5 \n36.0 \n172.3 \nSource: Nigerian Midstream and Downstream Petroleum Regulatory \nAuthority (NMDPRA). \n \nConsumption of Petroleum Products \nNigeria’s \nPremium \nMotor \nSpirit \n(PMS) \nconsumption fell during the period on account \nof the removal of subsidy, which led to a \nreduction in domestic demand. The total \nestimated volume of Premium Motor Spirit \n(PMS) consumed in the first half of 2023 fell by \n5.55 per cent to 11.480 billion litres from \n12.155 billion litres and 12.190 billion litres in \nthe preceding and corresponding halves of \n2022. However, the total estimated volume of \nAutomotive Gas Oil (AGO) consumed increased \nby 21.09 per cent and 26.29 per cent, to 2.536 \nbillion litres from 2.094 billion litres and 2.008 \nbillion litres in the preceding and corresponding \nhalves of 2022. \nTable 3.2.3: Industry Sector Performance (Growth rate) \n \n2020H\n1 \n2020H\n2 \n2021H\n1 \n2021H\n2 \n2022H\n1 \n2022H\n2 \n2023H\n1 \nIndustry Sector \n-4.97 \n-6.7 \n-0.08 \n-0.86 \n-4.73 \n-4.52 \n-0.76 \nMining and \nQuarrying \n-1.04 -15.54 -6.98 \n-8.67 -19.27 -16.94 -8.00 \nManufacturing \n-4.07 \n-1.51 \n3.44 \n3.26 \n4.55 \n0.51 1.88 \nElectricity, \nGas, Steam & \nAir conditioner \n-2.78 \n-2.98 \n56.58 \n7.51 \n-11.42 7.06 6.84 \nWater supply, \nsewage, waste \nManagement. \n3.16 \n4.68 \n16.92 20.19 19.41 6.28 \n14.72 \nConstruction \n-15.99 \n1.95 \n2.4 \n3.75 \n4.48 \n4.59 \n3.34 \nSource: National Bureau of Statistics (NBS). \n Services \nThe services sector sustained its performance \nand remained the major driver of growth owing \nto the increased leverage of ICT in business and \nimproved access to credit by financial \ninstitutions. The Sector contributed 2.49 \npercentage points to the overall growth and \nrose by 4.39 per cent to N20,521 billion in the \nfirst half of 2023, compared with 6.29 per cent \nand 7.07 per cent in the second and first halves \nof 2022, respectively. \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n22 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nSource: National Bureau of Statistics (NBS). \n \nInformation and Communication Technology \nDuring the first half of 2023, the Information \nand Communication industry maintained a \npositive growth trajectory, contributing 1.63 \npercentage points to real GDP growth. The \nsector grew by 9.40 per cent to N6,56 billion, \ncompared with 10.43 per cent and 9.06 per cent \nin the second half and first half 2022, \nrespectively. The sector’s performance was \nattributed to substantial investment in the 5G \nnetwork services by the telecommunication \ncompanies. Despite the huge investment in the \nsubsector, slower growth was realised in the ICT \nsubsector on account of the 1.12 per cent drop \nin the number of active telecom subscriptions \nto 221.26 million, below 222.57 million \nrecorded at end-December 2022. \n \nIn addition, the broadband penetration rate \ndeclined to 47.01 per cent below its preceding \nlevel of 47.36 per cent within the same \ntimeframe. The development was attributed to \nthe disconnection of customers who were \nunable to comply with the enhanced Subscriber \nIdentity \nModule \n(SIM) \nregistration \nrequirements by the government. The policy \nwhich \nalso \ndiscouraged \nnew \nSIM \ncard \nregistration was intended to check rising \nsecurity challenges and improve the national \nsecurity environment. \nTeledensity, which gauges the number of \ntelephone connections per 100 individuals also \ndipped to 115.30 per cent in the first half of \n2023, compared with 116.60 per cent at end-\nDecember 2022. \nTable 3.2.4: Services Sector Performance (Growth rate) \n \n2020H1 \n2020H2 \n2021H1 \n2021H2 \n2022H1 \n2022H2 \n2023H1 \nContributio\nn to \nGrowth in \n2023H1 \nServices Sector \n-2.64 \n-1.83 \n4.27 \n6.84 \n7.07 \n6.29 \n4.39 \n2.49 \nTrade \n-9.64 \n-7.43 \n8.97 \n8.3 \n5.5 \n4.79 \n1.87 \n0.31 \nAccommodation and Food \nServices \n-16.8 \n-18.56 \n-2.85 \n1.63 \n2.24 \n5.85 \n3.53 \n0.02 \nTransportation and Storage \n-20.47 \n-24.01 \n6.3 \n26.39 \n15.4 \n15.03 \n-28.10 \n-0.41 \nInformation and \nCommunication \n11.59 \n14.77 \n5.97 \n7.11 \n9.06 \n10.43 \n9.40 \n1.63 \nArts, Entertainment & \nRecreation \n-3.01 \n-3 \n-0.17 \n4.02 \n1.4 \n7.64 \n4.28 \n0.01 \nFinancial and Insurance \n19.63 \n-0.72 \n-1.47 \n23.74 \n20.88 \n12.09 \n24.02 \n1.05 \nReal Estate \n-14.11 \n-5.07 \n2.79 \n1.85 \n4.43 \n3.58 \n1.79 \n0.10 \nProfessional, Scientific & \nTechnical Serv. \n-8.08 \n-7.78 \n-1.43 \n1.32 \n1.9 \n2.60 \n2.99 \n0.09 \nAdministrative and Support \nServices \n-2.15 \n-3.26 \n2.02 \n3.04 \n2.87 \n3.41 \n-1.26 \n-0.00 \nPublic Administration \n-2.88 \n2.62 \n-1.34 \n0.53 \n1.97 \n1.85 \n2.12 \n0.04 \nEducation \n-10.83 \n-15.6 \n-3.5 \n1.4 \n1.58 \n1.18 \n1.01 \n0.02 \nHuman Health & Social \nServices \n1.49 \n2.94 \n4.79 \n5.07 \n4 \n4.39 \n2.20 \n0.02 \nOther Services \n-5.98 \n-5.57 \n-1.54 \n1.28 \n3.1 \n0.99 \n-11.30 \n-0.38 \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n23 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.2.5.: Active Telephony Subscriptions and \nTeledensity 2023H1 \nSource: Nigerian Communications Commission (NCC). \nDomestic Wholesale and Retail Trade \nThe domestic wholesale and retail trade \nsubsector also supported growth, contributing \n0.1 percentage point to the overall growth. The \nsubsector grew at a slower pace, on account of \npolicy-induced shocks on aggregate demand, \nwhich manifested in weaker purchasing power of \nhouseholds, and higher energy costs. \n \nEducation \nSimilarly, the education subsector grew by 1.01 \nper cent to N570 billion compared with 1.18 per \ncent and 1.58 per cent in the preceding and \ncorresponding halves of 2022. The growth was \non account of continued efforts by the \ngovernment to improve access and the quality \nof infrastructure of educational institutions \nnationwide. Thus, the FGN signed the Student \nLoan Bill (2023) into law, to provide financial \nassistance to Nigerian students in tertiary \ninstitutions through the Education Loan Bank. \nSimilarly, \nthe \nFederal \nExecutive \nCouncil \napproved the establishment of 37 new private \nuniversities across the country. The Federal \nGovernment also approved the disbursement \nof N320.34 billion intervention fund to public \ntertiary institutions nationwide. \n \nTransport \nThe Transport subsector dragged growth, \ndipping by 18.1 per cent to N366.41 billion from \nN593.21 billion and N509.61 billion in the \npreceding and corresponding halves of 2022, \nrespectively. The poor performance of the \nsector was attributed to the unintended effects \nof the currency redesign policy and hike in the \nprice of PMS, which increased transport costs. \nThe number of passengers who used the rail \ntransport service decreased to 915,842 persons \nfrom 1,837,456 persons and 1,375,492 persons \nin the preceding and corresponding halves of \n2022, respectively. The decrease was due to \nperceived security concerns along the rail \nroutes amid intermittent suspension of rail \nservices on account of derailment of coaches \nfrom the rail lines. However, the volume of \ncargoes increased to 115,995 tonnes from \n86,448 tonnes and 70,576 tonnes in the \npreceding and corresponding halves of 2022, \nrespectively. Similarly, the number of airlifted \npassengers on the domestic and international \nroutes fell to 8,096,505 from 9,347,079 and \n9,965,684 in the preceding and corresponding \nperiods of 2022, respectively. Also, cargo \nmovement by air fell to 60.536 million kg from \n75.236 million kg and 80.529 million kg in the \npreceding and corresponding halves of 2022, \nrespectively. However, the number of ocean \ngoing vessels increased to 2,454 tonnes from \n2,429 tons and 2,346 tonnes in the preceding \nand corresponding halves of 2022, respectively. \nThe volume of cargo throughput also increased \nto 84.299 million tonnes, from 79.089 million \ntonnes in the preceding half, though below the \n0\n20\n40\n60\n80\n100\n120\n140\n -\n 50,000,000\n 100,000,000\n 150,000,000\n 200,000,000\n 250,000,000\nTeledensity (%)\nNumber of Subscriptions\nSubscriptions\nTeledensity\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n24 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n84.659 million tonnes recorded in the \ncorresponding half of 2022. \n \n3.2.3 Employment and Job Creation \nThe Federal Government sustained efforts at \nimproving the employment level in the country \nby partnering with stakeholders. The federal \ngovernment, through the Ministry of Labour \nand Employment collaborated with the German \nFederal Ministry for Economic Cooperation and \nDevelopment to train 200,000 Nigerian youths \non various skills and equip them to be self-\nemployed. The training was on arts, fashion, \npainting, baking, ICT, and fishery, among others. \n \nThe level of unemployment stood at 4.1 per \ncent in the first quarter of the year compared \nwith 5.3 per cent at the fourth quarter of 2022. \n \n3.2.4 Consumer Prices \nHeadline inflation maintained a northward \ntrajectory throughout the first half of 2023 \ndespite sustained monetary policy tightening. \nNotwithstanding the improvements in supply \nchains, price pressures rose due to higher \nenergy cost and food prices that accompanied \nthe Russia-Ukraine war and exchange rate pass-\nthrough following elevated global inflation \nrates. From the domestic front, cost-push \nfactors such as the removal of PMS subsidy and \nthe reforms in the foreign exchange market \naccounted for the continued surge in aggregate \nprices. \nFurthermore, \nother \nstructural \nchallenges \nsuch \nas \nelection-related \nexpenditures, the effect of the 2022 flooding \non farming activities, security challenges, \nlegacy infrastructural deficit, and expectations \nof further increase in aggregate prices \ncontinued to weigh on inflation. \n \nThus, the observed shocks in the macro-\neconomy drove headline inflation (year-on-\nyear) to 22.79 per cent at end-June 2023 from \n21.34 per cent at end-December 2022 and \n18.60 per cent at end-June 2022. Further \nanalysis indicated that, although the seasonally \nadjusted inflation rate was above the long-run \ntrend, there appeared to be a convergence to \nits trend level, indicating that current shocks to \ninflation would wane over time. \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n25 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n P \nFigure 3.2.5: Headline Inflation Rate (per cent) \n Source: National Bureau of Statistics (NBS). \n Food Inflation \nAggregate food price increases remained \nunabated and grew consistently to 25.25 per \ncent at end-June 2023 from 23.75 per cent at \nend-December 2022 and 20.60 per cent a year \nago. Food prices rose on account of continued \nsecurity challenges, particularly in major food \nproducing \nareas, \nexchange \nrate \neffect, \n(especially on imported food and input for food \nprocessing) as well as higher transport costs in \nthe delivery of farm produce to the markets. \nThe rise in food inflation was driven mainly by \nprocessed food which accounted for an \naverage of 13.7 percentage points compared \nwith the average of 10.9 percentage points \ncontributed by farm produce. \nFigure 3.2.6: Contribution of Processed Food and Farm \nProduce (Percentage Points) to Food Inflation \n(Per cent), First Half 2023 \nSource: National Bureau of Statistics (NBS). \n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\n30.00\nPeocessed food\nFarm Produce\nFood\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n26 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nTable 3.2.5: Average Contribution of Components of \nProcessed Foods, 2023H1 \n \nSource: National Bureau of Statistics (NBS). \n \n \nCore Inflation \nUnderlying inflationary pressures persisted \nthroughout the period, as core inflation \nmeasures, such as ‘all items less farm produce’ \nand ‘all items less farm produce and energy’, \nindicated a rising trajectory of the non-volatile \ncomponent of the CPI. Supply side shocks drove \ncore inflation (all items less farm produce and \nenergy) to 20.06 per cent at end-June 2023 \nfrom 18.21 per cent at end-December 2022 \nand 15.70 per cent in June 2022. Further review \nof the core inflation rate using alternative \nmeasures such as the trimmed mean (20.0 per \ncent trim) and the trimmed median, revealed \nthat the core inflation rate continued to follow \na northward trajectory. \n \nFigure 3.2.7: Core Inflation Measures, (Seasonally \nAdjusted) per cent \n8\n10\n12\n14\n16\n18\n20\n22\nJanuary 2020\nJune 2023\ncore1_inf\ncore2_inf\nTrimmed mean\nTrimmed Median\n \nSource: National Bureau of Statistics (NBS). \n \nDynamics in core inflation was driven by \nprocessed food items, which contributed an \naverage of 8.23 percentage points in the first \nhalf of 2023. This was followed closely by the \nhousing, water, electricity, gas, and other fuel \ncomponents, which contributed an average of \n3.89 percentage points to core inflation. \nClothing and footwear component also drove \ncore inflation by an average of 2.04 percentage \npoints during the period. Further analysis \nrevealed that fish & sea food (due mainly to \nhigher cost of fish feed and other inputs), meat, \nand guinea corn flour contributed an average of \n25.79 per cent, 21.34 per cent, 19.11 per cent \nand 7.34 per cent, respectively, to the upward \npressure from the processed food component of \nthe core inflation in the first half of 2023. \n \nComponent \nShare (%) \nFish & Sea Food \n25.79 \nMeat \n21.34 \nGuinea Corn Flour Sold Loose \n19.11 \nCorn Flakes 350g \n7.38 \nGari Yellow Sold Loose \n4.31 \nOil & Fats \n4.12 \nMilk, Cheese & Eggs \n3.86 \nFritters (Puff Puff) \n3.21 \nEko (Agidikafa) \n2.26 \nSugar, Jam, Honey, etc. \n2.05 \nCustard 300g \n1.99 \nPlantain Flour \n1.52 \nCorn Flour 2kg \n1.21 \nOthers \n1.84 \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n27 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.2.8: Component Contribution to Core2 Inflation \n(Percentage Points) \nSource: National Bureau of Statistics (NBS). \n \n3.2.5 Development Financing \nThe Bank continued to intervene in the critical \nsectors of the economy. The Bank reduced the \npace of its intervention in the critical segments \nof the economy, relative to the preceding and \nthe corresponding periods of 2022. A total of 63 \nprojects, including 134,275 individuals and \nbusinesses benefited from the Bank’s 13 \nintervention programmes, compared with 125 \nand 187 projects, including 279,211 and \n134,275 individuals and businesses that \nbenefited from its 20 and 19 programmes in the \npreceding and the corresponding periods of \n2022, respectively. \nCumulative disbursement declined by 35.4 per \ncent to N331.33 billion below N513.13 billion in \nthe preceding half of 2022, while the repayment \n \n2 This measures underlying inflation by excluding farm \nproduce from Headline inflation \nincreased by 27.4 per cent to N264.04 billion \nabove N207.33 billion in the same period. The \nincrease in recovery reflected the drive for \nrepayments. \nActivities at the National Collateral Registry (NCR) \nindicated mixed performance. The number of \nfinancing statements and number of borrowers \nindicated that 30,327, worth N833.49 billion, was \nregistered in respect of 31,734 borrowers during \nthe review period, compared with 40,909, worth \nN1,025.61 billion, in respect of 42,695 borrowers \nin the second half of 2022. \nA further breakdown indicated that 48.79 per cent \nof the financing statements were for 47.81 per \ncent of borrowers (female and female-owned \nenterprises). When compared with the second \nhalf of 2022, 51.43 per cent of the financing \nstatements were in respect of 50.57 per cent of \ntotal borrowers (female and female-owned \nenterprises). From the inception of the NCR in \n2016 to end-June 2023, a total of 146 financial \ninstitutions had registered 319,220 financing \nstatements valued at N17.24 trillion. \n \nTable 3.2.6: No. and Value of Secured Transactions in Movable \nAssets (STMA) Financing Statements in respect of Females and \nFemale-owned Businesses 2023 \nDebtor \nType \nNo. of Financing \nStatements in respect \nof Females and \nFemale-owned \nBusinesses \nNo. of Female and \nFemale-owned \nEnterprise Borrowers \nFinancing Statements \n(N' billion) \n  \n2022H2 \n2023H1 \n2022H2 \n2023H1 \n2022H2 \n2023H1 \nIndividual \n20,393 \n14,360 \n20,776 \n14,568 \n763.21 \n73.39 \nLarge \nBusiness \n29 \n23 \n83 \n47 \n1.19 \n0.59 \nMedium \nBusiness \n354 \n186 \n400 \n253 \n2.78 \n1.92 \nMicro \nBusiness \n36 \n38 \n43 \n47 \n0.19 \n0.30 \nSmall \nBusiness \n226 \n192 \n289 \n256 \n2.23 \n1.44 \nTotal \n21,038 \n14,799 \n21,591 \n15,171 \n769,599,468,\n769.96 \n77,643,585,\n975.35 \n Source: Central Bank of Nigeria. \n \n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\nJun-22\nJul-22\nAug-22\nSep-22\nOct-22\nNov '22\nDec '22\nJan '23\nFeb-23\nMar-23\nApr-23\nMay-23\nJun-23\nMiscellaneous Goods & Services\nRestaurant & Hotels\nEducation\nRecreation & culture\nCommunication\nTransport\nHealth\nFurnishings, Household Equip &HH Maint.\nHousing,Water, Elect.Gas & Other Fuel\nClothing & footwear\nAlcoholic Bev. Tobacco & Kola\nNon-Alcoholic Beverages\nProcessed Food\nCore1\n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n28 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n \nTable 3.2.7: No. and Value of Secured Transactions in \nMovable Assets (STMA) Financing Statements 2023 \nDebtor \nType \nNo. of Financing \nStatements in \nrespect of Females \nand Female-owned \nBusinesses \nNo. of Female and \nFemale-owned \nEnterprise \nBorrowers \nFinancing Statements \n(N' billion) \n  \n2022H2 \n2023H1 \n2022H2 \n2023H1 \n2022H2 \n2023H1 \nIndividual \n36,364 \n26,743 \n37,464 \n27,437 \n829.15 \n445.65 \nLarge \nBusiness \n271 \n205 \n480 \n357 \n95.34 \n168.07 \nMedium \nBusiness \n2,120 \n1,498 \n2,355 \n1,781 \n73.74 \n179.49 \nMicro \nBusiness \n295 \n279 \n335 \n320 \n2.50 \n2.07 \nSmall \nBusiness \n1,859 \n1,602 \n2,061 \n1,839 \n24.88 \n38.21 \nTotal \n40,909 \n30,327 \n42,695 \n31,734 \n1,025.61 \n833.49 \nSource: Central Bank of Nigeria. \n \n3.2.5 Financial Inclusion \nThe drive towards the attainment of 95.0 per \ncent financial inclusion target by 2024 was \nenhanced by the significant increase in the use \nof the agent network, which increased to 1.67 \nmillion by June 2023, to bridge the channels \ndispersion gap, particularly in the rural areas \nand \nNorthern \nNigeria. Also, \nUnique/Foundational \nID \nwith \ntotal \nNIN \nregistrations reaching 101 million as of June 26, \n2023, were optimised. In addition, SabiMoni e-\nLearning Platform was launched to facilitate \nself-paced online delivery of the financial \nliteracy curriculum for the Volunteer Corps \nMembers (VCMs) to reduce dependence on \nmanual and paper-based training materials, and \nto \nbroaden \noutreach \nto \nthe \ntarget \nconsumers. Similarly, 195,314 agents were \nonboarded under the SANEF agent expansion \nscheme, bringing the total to 1,669,487, and \nincreasing access point per capita to 1,574 \nagents per 100,000 adults. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29 \nTable 3.2.8 Disbursements on Interventions in 2022H1, 2022H2 and 2023H1 \nInterventions \n2022H1 \n2022H2 \n2023H1 * \nDisbursements \n \nRepayments \nDisbursements \n \nRepayments \nDisbursements \n \nRepayments \nAmount \nBeneficiaries \n \nAmount \nAmount \nBeneficiaries \n \nAmount \nAmount \nBeneficiaries \n \nAmount \n(N \nBillion) \n \n(N Billion) \n(N \nBillion) \n \n(N Billion) \n(N \nBillion) \n \n(N Billion) \nAgricultural Credit Guarantee \nScheme (ACGS) \n3.21 \n13,194 Loans \nGuaranteed \n \n2.14 \n5.25 \n30,650 Loans \nGuaranteed \n \n₦3.14 \n0.03 \n10,304 loans \n \n₦3.30 \nCommercial Agricultural Credit \nScheme (CACS) \n28.3 \n12 Projects \n \n32.86 \n0.99 \n11 Projects \n \n43.61 \n2 \n1 Project \n \n40.7 \nAnchor Borrowers' Programme \n35.52 \n28,875 farmers \n \n42.99 \n103.72 \n245,361 farmers \n \n63.37 \n37.9 \n123,856 \nfarmers \n \n82.15 \nAccelerated Agriculture \nDevelopment Scheme (AADS) \n1.5 \n1 State \ngovernment-\nsponsored \nprojects \n \n4.37 \n0.18 \n1 State government-\nsponsored projects \n \n1.64 \nNil \nNil \n \n1.92 \nMaize Aggregation Scheme (MAS) \nNil \nNil \n \nNil \nNil \nNil \n \nNil \nNil \nNil \n \n- \nPaddy Aggregation Scheme (PAS) \n6.2 \n3 Projects \n \nNil \nNil \nNil \n \n1 \nNil \nNil \n \n4.5 \nPresidential Fertilizer Initiative (PFI) \nNil \nNil \n \n3 \nNil \nNil \n \n4 \nNil \nNil \n \n3 \nNational Food Security Programme \n(NFSP) \nNil \nNil \n \n2.03 \nNil \nNil \n \n4.95 \nNil \nNil \n \n3.29 \nReal Sector Support Facility Using \nDifferentiated Cash Reserve Ratio \n(RSSF-DCRR) \n210.29 \n34 Projects \n \n18.5 \n73.2 \n16 Projects \n \n27.39 \n114.12 \n16 Projects \n \n43.24 \nCOVID-19 Intervention for \nManufacturing Sector (CIMS) \n413.84 \n50 Projects \n \n12 \n131.26 \n29 Projects \n \n7.95 \n83.65 \n24 Projects \n \n30.03 \nNon-oil Export Stimulation Facility \n(NESF) \nNil \nNil \n \n2 \nNil \nNil \n \n7.45 \nNil \nNil \n \n4.08 \nMicro, Small and Medium \nEnterprises Development Fund \n(MSMEDF) \nNil \nNil \n \n2.52 \n0.01 \n130 Beneficiaries \n \n5.07 \nNil \nNil \n \n1.22 \nAgribusiness/Small and Medium \nEnterprises Investment Scheme \n(AGSMEIS) \n1.6 \n2,720 \nBeneficiaries \n \n0.008 \n1.32 \n154 Beneficiaries \n \n2.75 \n4.19 \n1 Project \n \nNil \nCreative Industry Financing \nInitiative (CIFI) \nNil \nNil \n \n0.28 \n0.17 \n30 Beneficiaries \n \n0.3 \nNil \nNil \n \n0.41 \nTargeted Credit Facility (TCF) \n24.37 \n50,302 \nBeneficiaries \n \nNil \n1.21 \n2,863 Beneficiaries \n \n0.82 \n0.035 \n66 \nBeneficiaries \n \n1.05 \nNigeria Youth Investment Fund \n(NYIF) \nNil \nNil \n \n0.28 \n0.88 \nNil \n \n2.62 \nNil \nNil \n \n- \nShared Agent Network Expansion \nFacility (SANEF) \nNil \nNil \n \n0.37 \nNil \nNil \n \n0.4 \nNil \nNil \n \n0.85 \nHealthcare Sector Intervention \nFacility (HSIF) \n17.21 \n11 Projects \n \nNil \n12.28 \n8 Projects \n \n6.53 \nNil \nNil \n \n7.44 \nHealthcare Sector Research & \nDevelopment Intervention (Grant) \nScheme (HSRDIS) \n0.02 \n- \n \nNil \n0.03 \n1 Project \n \nNil \n0.04 \nN/A \n \n- \nNational Mass Metering \nProgramme (NMMP) \n0.2 \n3 DisCos \n \nNil \n3.11 \n3 DisCos \n \n0.36 \n2.4 \nN/A \n \n1.87 \nNigeria Electricity Market \nStabilization Facility (NEMSF - 2) \n34.37 \n8 DisCos \n \nNil \n63.64 \n8 DisCos \n \n13.98 \n35.57 \n8 DisCos \n \n21.95 \nNigeria Bulk Electricity Trading – \nPayment Assurance Facility (NBET-\nPAF) \n26.93 \n1 Project \n \n322.87 \nNil \n1 Project \n \nNil \nNil \nNil \n \nNil \nSolar Connection Facility (SCF) \n0 \nNil \n \nNil \n0 \nNil \n \nNil \nNil \nNil \n \n1.07 \nIntervention Facility for Nigeria Gas \nExpansion Programme (IFNGEP) \n26 \n4 Projects \n \nNil \n9.3 \n2 Projects \n \nNil \nNil \nNil \n \nNil \nTertiary Institution \nEntrepreneurship Scheme (TIES) \n0.26 \n53 Beneficiaries \n \nNil \n0.06 \n20 Beneficiaries \n \nNil \n0.16 \n41 \nBeneficiaries \n \nNil \n100FOR100 Policy on Production \nand Productivity (100FOR100 PPP) \n69.13 \n51 Projects \n \n1.43 \n82.54 \n31 Projects \n \n1.14 \n47.23 \n20 Projects \n \n6.1 \nYouth Entrepreneurship \nDevelopment Programme (YEDP) \nNil \nNil \n \n0.12 \nNil \nNil \n \n0.001 \nNil \nNil \n \n0.00013 \nPower and Airline Intervention \nFacility (PAIF) \nNil \nNil \n \n15.91 \nNil \nNil \n \n4.37 \n4 \n1 Project \n \n5.87 \nTextile Sector Intervention Facility \n(TSIF) \nNil \nNil \n \n8.62 \n1.5 \n3 Projects \n \n4.49 \nNil \nNil \n \nNil \nPrivate – Accelerated Agricultural \nDevelopment Scheme (P-AADS) \nNil \nNil \n \nNil \nNil \nNil \n \nNil \nNil \nNil \n \nNil \nExport Facilitation Initiative (EFI) \n36 \n5 Projects \n \nNil \nNil \nNil \n \nNil \nNil \nNil \n \nNil \nExport Development Facility (EDF) \n17.08 \n15 Projects \n \nNil \n22.39 \n14 Projects \n \nNil \nNil \nNil \n \nNil \n Source: Central Bank of Nigeria.\n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n30 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n3.3 \nFISCAL DEVELOPMENTS \nFiscal policy in the first half of 2023 towed the path \nof fiscal consolidation with the implementation of \nbroad reforms to widen the fiscal space and \nensure fiscal viability. In addition, expenditure and \npublic debt policies were implemented to reflect \nefforts at softening the impact of external and \ndomestic headwinds. \nConsequently, the fiscal operations of the Federal \nGovernment (FGN) resulted in an overall deficit of \n3.1 per cent of GDP, while public debt, at 25.0 per \ncent of GDP (at end-March 2023) remained within \nthe 40.0 per cent medium-term domestic debt \nstrategy threshold. \n3.3.1 Federation Account Operations \n• \nFederation Revenue \nRevenue performance in the review period was \ninfluenced by broad reforms in the mineral and \nnon-oil sectors. Specifically, the Finance Act 2023, \nhelped broaden the tax base to include digital \nassets for capital gains. However, the continued \ncrude oil theft, and subsisting tax expenditures \nlowered accretion to the Federation Account. \n \n3 Earnings lodged in the Federation Account by virtue of Section 161 of the \nFederal Republic of Nigeria Constitution 1999 as amended. \nKey Budget Parameters and Projections\nSource: 2023 Appropriation Act. \n \nRelative to the second half of 2022, federation \nrevenue in the first half of 2023 waned, owing to \nsubsidy on premium motor spirit, and low \ndomestic crude oil production. At N6,903.32 \nbillion or 5.4 per cent of GDP, provisional gross \nfederally collected revenue3 declined by 5.5 per \ncent, relative to the level in the second half of \n2022, and fell short of the proportionate budget \nby 34.8 per cent. However, it was 25.0 per cent \nabove collection in the first half of 2022. The \nperformance, relative to the corresponding half of \n2022, reflected payoffs from non-oil revenue \nreforms, including the Strategic Revenue Growth \nInitiatives (SRGIs); and higher oil revenue, \nfollowing the removal of the petrol subsidy. \n•1.69 mbpd\nDaily oil production\n•US$75.00\nCrude oil price\n•N435.57/US$\nExchange rate\n•3.75 %\nGDP growth\n•17.16 %\nInflation rate\nDeficits\nN11.60 Trillion\nExpenditure\nN22.65 Trillion\nRevenue\nN11.05 Trillion\n \n \n \n \n31 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.3.1: Structure of Federation Revenue (per cent) \nSources: Federal Ministry of Finance, Budget and National Planning \n(FMFB&NP) and Office of the Accountant General of the Federation \n(OAGF). \n \nThe strong performance of non-oil revenue was \nsustained in the first half of 2023, accounting for \n68.9 per cent of total federation earnings. \nImprovement in non-oil revenue reflected the \nbenefits from fiscal consolidation measures \nimplemented under the Finance Act 2023. \nConversely, the contribution of oil continued to \ndecline from 37.9 per cent in the first half of 2022, \nto 31.1 per cent in the current period. Structural \nrigidities, burden of subsidy payments and low \ndomestic crude oil production due to theft, \ninsecurity, and under-investment in the upstream \nsector, \ncontributed \nto \nthe \ndepressed \nperformance of oil revenue. \nDrivers of Federally Collected Revenue \nNon-oil Revenue \nSustained growth in the economy, tax reforms, \nand expenditure rationalisation in Government-\nOwned Enterprises and MDAs, drove non-oil \nrevenue performance in the period. In nominal \nterms, non-oil revenue at N4,753.18 billion (3.3 \nper cent of the GDP), surpassed the levels in the \nfirst half of 2022 by 38.7 per cent and the \npreceding half by 1.4 per cent. However, the \ncollection fell short of the proportionate target by \n17.6 per cent. \n \nFigure 3.3.2: Composition of Non-Oil Revenue (per cent) \nSources: Federal Ministry of Finance, Budget, and National Planning \n(FMFB&NP) and Office of the Accountant General of the Federation \n(OAGF). \n \nOil Revenue \nLow domestic crude oil production and subsidy \ndeductions, majorly contributed to the decline in \noil receipts in the period. Oil revenue at N2,150.14 \nbillion (2.0 per cent of the GDP), underperformed \nin relation to the proportionate budget of \nN4,821.79 billion by 55.4 per cent. However, it \nsurpassed the level in the first and second halves \nof 2022 by 2.6 per cent and 17.8 percent, \nrespectively. \n Figure 3.3.3: Composition of Oil Revenue (per cent) \n \nSource: Federal Ministry of Finance, Budget, and National Planning \n(FMFB&NP) and Office of the Accountant General of the Federation \n(OAGF). \n \nDeductions \nFrom the gross revenue of N6,903.32 billion \nrealised in the first half of 2022, statutory \ndeductions from oil and non-oil revenue, as well \nas transfers, amounted to N2,727.30 billion, \nPPT & \nRoyalties\n97.9%\nOthers\n2.1%\n37.9\n35.8\n31.1\n45.5\n62.1\n64.2\n68.9\n54.5\n0.0\n20.0\n40.0\n60.0\n80.0\n100.0\n1st Half 2022 2nd Half 2022 1st Half 2023\nBudget\nOil Revenue\nNon-Oil Revenue\nCompany \nIncome Tax\n24.8%\nCustoms & \nExcise Duties\n16.2%\nValue-\nAdded Tax\n30.5%\nFGN \nIndependent \nRevenue\n28.2%\nOther \nTransfers\n0.4%\n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n32 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nleaving a net distributable balance of N4,649.76 \nbillion. \n \nAllocations to the three tiers of government \nAllocation to the three tiers of government \nexceeded the level in the first half of 2022, owing \nto improved non-oil revenue. Total disbursement \nexceeded the level in the corresponding half of \n2022 by 19.0 per cent. However, it was 2.5 per \ncent and 28.9 per cent below the levels in the \nsecond half of 2022 and the half year budget, \nrespectively. The shortfall in federation allocation, \nrelative to the target, exacerbated fiscal pressure \nat the central and subnational levels. \n \nTable 3.3.1: Federally Collected Revenue and \n Distribution (N Billion) \n \n \n1st Half \n2022 \n2nd Half \n2022 \n1st Half \n2023 \nBudget \nFederation Revenue (Gross) \n5,521.90 \n7,303.07 \n6,903.32 \n10,587.32 \nOil \n \n2,095.34 \n2,615.36 \n2,150.14 \n4,821.79 \nCrude Oil & Gas Exports \n0.00 \n0.00 \n0.00 \n245.42 \nPPT & Royalties \n1,707.64 \n2,507.91 \n2,104.11 \n4,120.51 \nDomestic Crude Oil/Gas Sales \n339.12 \n64.56 \n0.00 \n50.29 \nOthers \n \n48.57 \n42.89 \n46.03 \n405.56 \nNon-oil \n \n3,426.56 \n4,687.71 \n4,753.18 \n5,765.53 \nCorporate Tax \n \n969.91 \n1,670.78 \n1,176.60 \n1,046.33 \nCustoms & Excise Duties \n789.36 \n898.29 \n771.49 \n1,057.94 \nValue-Added Tax (VAT) \n1,181.86 \n1,280.40 \n1,448.05 \n1,476.89 \nIndependent Revenue of Fed. \nGovt. \n467.84 \n820.66 \n1,339.43 \n1,584.54 \nOthers* \n \n17.58 \n17.58 \n56.73 \n599.83 \nTotal Deductions/Transfers* \n1,917.89 \n2,686.46 \n2,727.30 \n4,745.99 \nFederally \nCollected \nRev \n(Net) \nLess Deductions \n& Transfers** \n \n3,604.01 \n4,616.61 \n4,176.02 \n6,470.88 \nPlus: \n \n \n \n \n \nAdditional Revenue \n303.99 \n152.08 \n473.74 \n68.17 \nExcess Oil Revenue \n0.00 \n20.00 \n0.00 \n0.00 \nExcess Non-Oil Revenue \n293.64 \n119.14 \n258.26 \n68.17 \nExchange Gain \n \n10.35 \n12.94 \n215.48 \n0 \nTotal Distributed Balance \n3,907.99 \n4,768.70 \n4,649.76 \n6,539.06 \n Federal Government \n1,473.96 \n1,903.20 \n1,767.10 \n2,582.20 \n State Governments \n1,255.39 \n1,478.91 \n1,513.80 \n1,918.63 \n Local Governments \n925.35 \n1,097.18 \n1,115.39 \n1,428.22 \n 13% Derivation \n253.3 \n289.41 \n253.47 \n610.01 \nSources: Federal Ministry of Finance, Budget, and National Planning \n (FMFB&NP). \n \n \n \n \n4 Revenue Statistics in Africa 2022, OECD Publishing. \n \nFigure 3.3.4: Distribution to the Three Tiers of Government \nand 13% Derivation Fund (N Billion) \nSource: Federal Ministry of Finance, Budget, and National \nPlanning (FMFB&NP) and Office of the Accountant General of \nthe Federation (OAGF). \n \nTax Effort \nAnalysis of the structure of federation revenue \nindicates declining contribution of taxes to total \nfederation earnings. Tax revenue accounted for \n79.9 per cent of total federation revenue in the \nfirst half of 2023, compared with 84.5 per cent \nand 87.3 per cent in the first and second halves of \n2022, respectively. Income tax (consisting of \nPetroleum Profit Tax (PPT) and Company Income \nTax (CIT)) remained the main driver of tax revenue \nin the period. \nTax revenue-to-GDP, at 5.4 per cent, was \nmarginally above the first half tax revenue-to-GDP \nratio of 5.2 per cent, but was below the level in \nthe second half of 2022 of 5.8 per cent. This \ncompares with an average tax revenue-to-GDP of \n16.0 per cent in 31 African countries4. \n Figure 3.3.5: Composition of Tax Revenue \n \nSources: Staff computation using data from the Federal Ministry of \nFinance, Budget and National Planning (FMFB&NP) and Office of the \nAccountant General of the Federation (OAGF). \nNote: Income tax consists of CIT and PPT. However, PPT includes \nroyalties, which might overstate PPT contribution. \n0\n20\n40\n60\n80\n2022H1\n2022H2\n2023H1\nHalf Year\nBenchmark\nIncome Tax\nConsumption Tax\nTrade Tax\nOther Taxes\n0\n500\n1000\n1500\n2000\n2500\n3000\nFG\nSG\nLG\n13%\nHalf Year\nBenchmark\n2023H1\n2022H2\n2022H1\n \n \n \n \n33 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nTable 3.3.2: Tax & Non-Tax Revenue Structure (N Billion) \n \n2022H1 \n2022H2 \n2023H1 \nBudget \nTotal revenue \n5,521.90 \n7,303.07 \n6,903.32 \n10,587.32 \nNon-Tax \n855.54 \n928.12 \n1,385.46 \n2,680.35 \nTax \n4,666.36 \n6,374.96 \n5,517.86 \n7,906.97 \n Tax Revenue Percentage of: \n \n \n \nTotal Revenue \n84.5 \n87.3 \n79.9 \n74.7 \n GDP \n5.2 \n5.8 \n5.4 \n7.0 \n Income tax \n2,677.56 \n4,178.69 \n3,280.71 \n5,166.85 \n PPT \n1,707.64 \n2,507.91 \n2,104.11 \n4,120.51 \n CIT \n969.91 \n1,670.78 \n1,176.60 \n1,046.33 \n Consumption tax \n1,181.86 \n1,280.40 \n1,448.05 \n1,476.89 \n Trade tax \n789.36 \n898.29 \n771.49 \n1,057.94 \n Other Taxes \n17.59 \n17.58 \n17.60 \n205.30 \nNote: PPT includes royalties, thus overstating its contribution. \nOther Taxes includes Education Tax. \nSources: Staff computation using data from the Federal Ministry of \nFinance, Budget and National Planning (FMFB&NP) and Office of the \nAccountant General of the Federation (OAGF). \n \n3.3.2 Fiscal Operations of the Federal \n Government \nFGN Retained Revenue \nRetained revenue of the FGN rose significantly, \nrelative to the corresponding period of 2022. \nProvisional FGN retained revenue, at N3,128.31 \nbillion or 2.6 per cent of the GDP, outpaced \nperformance in the first half of 2022 by 34.9 per \ncent, reflecting higher statutory and independent \nFGN receipts. However, relative to the second \nhalf of 2022 and the target, FGN retained revenue \ndropped by 6.3 per cent and 43.4 per cent, \nrespectively. \nThe \ndevelopment \nindicated \npersisting revenue challenge, despite growing \nnon-oil revenue. \n \n \n \n \n \n \n \n \n \n \n \n \n \n5 N317.71 billion in domestic debt repayment, and \nUSD906.24 million or N386.05 billion @ N426 /USD1 \n Table 3.3.3: FGN Retained Revenue (N Billion) \n \n2022H1 \n2022H2 \n2023H1 \nBudget \nFGN Retained \nRevenue \n2,319.48 \n3,340.03 \n3,128.31 \n5,522.55 \nFederation \nAccount \n1,185.93 \n1652.23 \n1,369.80 \n2,141.67 \nVAT Pool \nAccount \n165.08 \n178.85 \n202.11 \n191.55 \nFGN \nIndependent \nRevenue \n467.84 \n820.66 \n1,339.43 \n1,584.54 \nExcess Oil \nRevenue \n0.00 \n10.52 \n0.00 \n0.00 \nExcess Non-Oil \n118.04 \n55.55 \n94.88 \n0.00 \nExchange Gain \n4.90 \n6.06 \n100.32 \n0.00 \nOthers* \n377.68 \n616.17 \n21.77 \n1,604.80 \nSources: Federal Ministry of Finance, Budget and National Planning \n(FMFB&NP) and Office of the Accountant General of the Federation \n(OAGF) \nNote*: Includes Transfers from Special Levies Accounts, FGN’s share \nof Signature Bonus, Domestic Recoveries, Stamp Duty, Grants and \nDonor Funding and Share of NLNG Dividend. \n \nFederal Government Expenditure \nProvisional aggregate expenditure of the FGN \ndeclined, relative to the first half of 2022. At \nN6,998.76 billion or 8.9 per cent of the GDP, \nprovisional aggregate expenditure of the FGN was \nbelow the level in the first half of 2022 and the \nbenchmark by 13.0 and 35.9 per cent, \nrespectively. The lower expenditure was, driven \nby reduced interest obligations, arising from the \nredemption of N703.77 billion5 out of the total \ndebt stock of the FGN in 2022. Relative to the \nsecond half of 2022, aggregate expenditure in the \nfirst half of 2023 was, however, higher by 8.3 per \ncent, driven by increased capital spending. \nAt N4,147.27 billion or 5.7 per cent of the GDP, \ntotal recurrent expenditure accounted for 59.3 \nper cent of total expenditure, while capital \nexpenditure and transfers constituted 34.0 per \ncent and 6.7 per cent, respectively. \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n34 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nTable 3.3.4: FGN Expenditure (N Billion) \n \n2022H1 \n2022H2 \n2023H1 \nBudget \nAggregate \nExpenditure \n8,042.32 \n6,465.26 \n6,998.76 \n10,913.59 \nRecurrent \n5,176.67 \n5,418.41 \n4,147.27 \n 7,443.48 \nof which: \n \n \n \n \nPersonnel Cost \n1,716.37 \n1,881.05 \n1,971.90 \n2,507.96 \nPension \nand \nGratuities \n191.05 \n200.29 \n253.29 \n427.41 \nOverhead Cost \n543.05 \n406.42 \n557.53 \n 1,229.32 \nInterest \nPayments \n2,597.85 \n2,787.63 \n1,244.20 \n3,278.80 \nDomestic \n2,048.15 \n2,145.72 \n1,098.34 \n2,371.42 \nExternal \n549.70 \n641.91 \n145.86 \n907.38 \nSpecial Funds \n128.35 \n143.02 \n120.36 \n0.00 \nCapital \nExpenditure \n2,445.67 \n721.62 \n2,376.55 \n2,986.37 \nTransfers \n419.98 \n \n325.24 \n \n 474.94 \n \n 483.74 \n \n \nSource: CBN Staff Estimate. \n \n \n \nTable 3.3.5: Economic Classification of \nGovernment Expenditure, First Half 2023 \n \nExpenditure \n(=N=billion) \nPercentage share \n \nAdmin. \nEconomic \nservices \nSocial and \ncommunity \nservices \nTransfers \nRecurrent \n4,147.27 \n \n33.3 \n8.9 \n18.8 \n39.0 \nCapital \n2,376.55 \n38.5 \n41.1 \n15.9 \n4.5 \nTransfers \n474.94 \n \n- \n- \n- \n- \nSource: CBN Staff Estimate. \n \n \nFigure 3.3.6: Composition of Federal Government \nExpenditure in per cent \n \n Sources: Office of the Accountant General of the Federation (OAGF) \nand Staff estimates. \n \n \nFederal Government Fiscal Balance \nThe fiscal operations of the Federal Government in \nthe first half of 2023 recorded a deficit of 3.8 per \ncent of the GDP, driven, largely, by low revenue \noutcome. The fiscal operations of the Federal \nGovernment resulted in an overall deficit of \nN3,870.45 billion, representing a contraction of \n32.4 per cent, relative to the level in the first half \nof 2022 and was below the proportionate budget \n \n62020-2023 Medium-Term Debt Strategy framework \nby 28.2 per cent. It however, widened by 23.8 per \ncent, when compared with the second half of \n2022. The deficit was financed from domestic \n(FGN Bond, Treasury Bills, Sukuk, Promissory \nNotes, Treasury Bonds, Green Bonds, and Savings \nBonds) and external (Multilateral, Bilateral, \nCommercial and Syndicated loans) sources. \n \nTable 3.3.6: Federal Government Fiscal Operations \n(N Billion) \n \n2022H1 \n2022H2 \n2023H1* \nBudget \nRetained \nrevenue \n2,319.48 \n3,340.03 \n3,128.31 \n 5,522.55 \nAggregate \nexpenditure \n8,042.32 \n6,465.26 \n6,998.76 \n10,913.59 \nPrimary \nbalance \n-3,124.99 \n-337.60 \n-\n2,6426.26 \n-2,112.24 \nOverall \nbalance \n-5,722.84 \n-3,125.23 \n-3,870.45 \n-5,391.04 \nDeficit-to-\nGDP (%) \n-6.3 \n-2.9 \n-3.8 \n-2.4 \nSource: CBN Staff Estimates from available data. \nNote: * 2023 Figures are provisional. \n \nFigure 3.3.7: Federal Government Fiscal Operations \n(N Billion) \nSources: Federal Ministry of Finance, Budget and National Planning \n(FMFB&NP) and Office of the Accountant General of the Federation \n(OAGF). \nNote: revenue and expenditure figures are provisional. \n \n \n \n \n3.3.3. Public Debt Strategy and Sustainability \nFGN borrowing in the review period was anchored \non the 2020-2023 MTDS6, which stipulates a self-\nRecurrent \n59.3%\nCapital\n34.0%\nTransfers\n6.7%\n (6,000)\n (4,000)\n (2,000)\n -\n 2,000\n 4,000\n 6,000\n 8,000\n 10,000\n2022H1\n2022H2\n2023H1\nBudget\nRevenue\nExpenditure\nFiscal Balance\n \n \n \n \n35 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nimposed debt-to-GDP threshold of 40.0 per cent, \nas against the 70.0 per cent for Market Access-\nCountries (MAC7). The strategy also targets an \noptimal portfolio mix of 70.0 per cent domestic \nand 30 per cent external debt; among other \nconsiderations \ntowards \nensuring \ndebt \nsustainability. \n \nTable 3.3.7: Revised MTDS Targets \nIndicator \nTargets \nTargets \n2016-2019 \n2020-\n2023 \nFiscal Sustainability: Total Public \nDebt as % of the GDP \nMax. 25% \nMax. 40% \nPortfolio Composition: \n \n \nDomestic: External Debt Mix \nMax.60: \nMin.40 \nMax.70: \nMin.30 \nRefinancing Risk: Average Tenor of \nDebt Portfolio \nMin. 10 \nyears \nMin. 10 \nyears \nLong-Term: Short-Term \nMin.75: \nMax.25 \nMin.75: \nMax.25 \nDomestic Debt Mix \n Source: MTDS 2020-2023, Debt Management Office. \n \n \n• \nTotal Public Debt \nPublic debt levels exceeded the 40.0 per cent debt-\nto-GDP national threshold, but remained well \nwithin the 70.0 per cent benchmark for Market-\nAccess Countries (MAC). Total public debt \noutstanding, comprising Federal and State \ngovernments’ debt obligation, at end-June 2023, \nstood at N87,379.40 billion or 42.3 per cent of the \nGDP, representing an increase of 103.9 and 75.3 \nper cent, above the levels at end-June 2022 and \nend-March 2023, respectively. The increase was \nattributed to the exchange rate revaluation and \nsecuritisation of FGN Ways and Means Advances. \n \n \n \nTable 3.3.8: Total Public Debt (N Billion) \nType \n2022H1 \n2022H2 \n2023H1* \nExternal Debt \n16,615.66 \n18,702.25 \n33,248.98 \n Of which: \n \n \nFGN \n14,723.46 \n16,703.35 \n29,898.43 \n \n7 These are countries with capacity to access international markets \non a durable and substantial basis. \nStates & FCT \n1,892.20 \n 1,998.90 \n 3,350.54 \nDomestic Debt \n26,230.22 \n27,548.12 \n54,130.42 \n Of Which: \n \n \nFGN \n20,948.94 \n22,210.36 \n48,314.74 \nStates & FCT \n5,281.28 \n5,337.75 \n5,815.68 \nTotal \n42,845.88 \n 39,556.03 \n 87,379.40 \nSource: Debt Management Office. \nNote: *As at end-June, awaiting third quarter figures. \n \nThe consolidated debt stock of the Federal \nGovernment \n(including \nState \ngovernments’ \nexternal debt, which are contingent liability of the \nFGN) was N81,563.72 billion or 39.5 per cent of \nthe GDP, while State governments’ domestic debt \nstock accounted for the balance of N5,815.68 \nbillion or 2.8 per cent of the GDP. \nFederal Government Debt Profile \nA breakdown of the FGN debt shows domestic \ndebt at N48,314.74 billion (59.2%), while external \ndebt stood at N33,248.98 billion (40.8%) or \nUS$43.16 billion. FGN Bond maintained its \ndominance in domestic debt portfolio, accounting \nfor 86.9 per cent, followed by Treasury Bills \n(9.8%), Promissory Notes (1.6%), FGN Sukuk \n(1.5%), and others8 (0.2%). \n \nFigure 3.3.8: Composition of FGN Debt Stock (N Billion) \n Source: Debt Management Office. \n Note: 2023H1 is at end-June. \nHoldings of Nigeria’s external debt indicates that \nMultilateral, Commercial and Bilateral loans \naccounted for 48.2 per cent, 36.2 per cent and \n12.8 per cent, respectively, while ‘other’ loans9 \nconstituted 2.9 per cent. \n \n8 Composed of Treasury Bonds (0.11 per cent), Green Bonds (0.03 \nper cent) and FGN Savings Bond (0.06 per cent) \n9 Promissory Notes \n16,615.66 \n18,702.25 \n33,248.98 \n20,948.94 \n22,210.36 \n48,314.74 \n2022H1\n2022H2\n2023H1\nLocal Currecy Denominated Debt\nForeign Currecy Denominated Debt\n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n36 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.3.9.: Composition of Domestic Debt Stock \n in Per cent \nSource: Debt Management Office. \n \nFigure 3.3.10: Composition of External Debt Stock \n in Per cent \n \nSource: Debt Management Office. \n \nDebt Service \nThe consolidated debt service payment of the \nFederal Government in the first half of 2023 was \nN1,997.65 billion, compared with N1,809.56 \nbillion in the corresponding half of 2022. Of the \ntotal interest payment in the period, 72.1 per cent \nor N1,440.01 billion went to domestic creditors, \nwhile 27.9 per cent or N557.64 billion was paid to \nexternal creditors. With regards to the solvency of \nthe FGN, debt service accounted for 63.9 per cent \nof FGN retained revenue in the first half of 2023. \nThis compares with the DMO’s self-imposed debt-\nservice-revenue threshold of 50.0 per cent, and \nthe ratio of 54.2 per cent in the first half of 2022. \n \n \n \n \n10 These arise from state governments’ contractual obligations, including \ntheir contribution to external debt service fund, payments for fertilizer, \nFigure 3.3.11: Breakdown of Total Debt Service \n(N Billion) \n \nSource: Debt Management Office. \nNote: 2023H1 is at end-June. \n \n3.3.4 \nSub-National Government Finances \nState Governments and the FCT \nRevenue \nThe revenue of state governments increased in the \nfirst half of 2023, relative to the first half of 2022; \ndriven, majorly, by improvements in receipts from \nExchange Gain and VAT. At N1,767.26 billion state \ngovernments’ gross statutory allocation increased \nby N258.58 billion or 17.1 per cent, relative to the \nlevel in the first half of 2022. The increase was \ndue, largely, to considerable improvement in \nExchange Gain, and VAT receipts, on account of \nthe depreciation of the naira, increased \nconsumption of VAT-able goods, broadening of \nthe tax-net, and curbing of revenue leakages. \nSubsisting liabilities of N348.03 billion 10 was \ndeducted from states’ Federation Account \nreceipts, leaving a net balance of N1,419.23 \nbillion for distribution to the states. This \nexceeded the distribution in the corresponding \nperiod of 2022 by N187.79 billion or 15.2 per cent. \nThe sources of states’ statutory revenue include: \nFederation Account, N923.20 billion (52.2%); VAT \nPool Account, N673.69 billion (38.1%); Non-oil \nExcess N94.44 billion (5.3%); and Exchange Gain, \nN75.93 billion (4.3%). \n \n \nState Including Agricultural Project, National Fadama Project and the \nNational Agricultural Technology Support Programme. \n1,146.74 \n1,118.01 \n188.27 \n1,333.41 \n1,227.36 \n565.88 \n2022H 1\n2022H 2\n2023H 1\nExternal\nDomestic\nFGN Bonds\n86.9%\nTreasury Bills\n9.8%\nPromisory \nNotes\n1.6%\nFGN Sukuk\n1.5%Others\n0.2%\nMultilateral\n48.2%\nCommercial\n36.2%\nBilateral \n12.8%\nOthers\n2.9%\n \n \n \n \n37 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.3.12: Composition of State Governments and FCT’s \nRevenue First Half 2023 in Per cent \n \nSource: Federal Ministry of Finance, Budget and National Planning \n(FMFB&NP), Office of the Accountant General of the Federation \n(OAGF) and Staff Estimates. \n \n \nTable 3.3.9: Subnational Government Revenue (N Billion) \n \nHalf Year 2022 \nHalf Year 2023 \nHalf Year \nBenchmark \nState Governments \n 1,255.39 \n1,513.80 \n 1,918.6 \n13% Derivation \n 253.30 \n 253.47 \n 610.01 \n \nState \nAllocation \n(N’Billion) \n% of Total \nTop 3 \nLagos \n142.11 \n8.0 \nDelta \n123.13 \n7.0 \nRivers \n95.16 \n5.4 \nBottom 3 \nEkiti \n33.27 \n1.9 \nKwara \n33.02 \n1.9 \nNasarawa \n32.85 \n1.9 \nSource: Federal Ministry of Finance, Budget and National Planning \n(FMFB&NP), Office of the Accountant General of the Federation \n(OAGF) and Staff Estimates. \n \nLocal Government Finances \nAggregate \nrevenue \nof \nlocal \ngovernments \nimproved in the first half of 2023, on the back of \nhigher VAT collection. The 774 Local governments \nreceived N1,115.39 billion from the Federation \nAccount in the first half of 2023. This was 20.5 \nand 1.7 per cent higher than the levels in the first \nand second halves of 2022, respectively. It was, \nhowever, 21.9 per cent below target. \nGross allocation to Local governments comprised \nreceipts from the Federation Account, N535.65 \nbillion (48.0%); VAT, N417.31 billion (42.3%); Non-\noil Excess revenue, N68.94 billion (6.2%); and \nExchange Gain, N39.23 billion (3.5%). \n \n \nTable 3.3.10: Subnational Government Revenue (N Billion) \n \n2022H1 \n2022H2 \n2023H1 \nBudget \nState Govt. \n1,255.39 \n1,478.91 \n1,513.80 \n1,918.63 \nLocal Govt. \n925.35 \n1,097.18 \n1,115.39 \n1428.22 \n13% \nDerivation \n253.3 \n289.41 \n253.47 \n610.01 \nSource: Staff compilation from Federal Ministry of Finance, Budget \nand National Planning (FMFB&NP) and Office of the Accountant \nGeneral of the Federation (OAGF). \n \nLocal governments in Lagos, Kano and Katsina \nstates received the highest allocations in the \nperiod at N90.69 billion (8.1%), N61.15 billion \n(5.5%), and N44.57 billion (4.0%); while Ebonyi, \nGombe and Bayelsa states ranked least receiving \n1.6, 1.4 and 1.1 per cent of the total allocation to \nthe 774 local governments, respectively. \n \nTable 3.3.11 Subnational Government Revenue \nPerformance by State \n \nLocal \n \nAllocation \n(N’Billion) \n \n% of \nTotal \n \n \n2022H1 \n2022H2 \n 2023H1 \n \nTop 3 \nLagos \n75.06 \n82.58 \n90.69 \n8.1 \n \nKano \n51.14 \n60.70 \n61.15 \n5.5 \n \n Oyo \n37.67 \n44.81 \n- \n \n \nKatsina \n- \n- \n44.57 \n4.0 \nBottom 3 \nEbonyi \n14.37 \n17.34 \n17.36 \n1.6 \n \nGombe \n13.26 \n15.85 \n15.84 \n1.4 \n \nBayelsa \n10.79 \n12.49 \n12.61 \n1.1 \nSource: Staff compilation from Federal Ministry of Finance, Budget \nand National Planning (FMFB&NP) and Office of the Accountant \nGeneral of the Federation (OAGF). \n \nFigure 3.3.13: Composition of Statutory Allocations to Local \nGovernments, First Half 2023 in Per cent \nSource: Federal Ministry of Finance, Budget and National Planning \n(FMFB&NP) and Office of the Accountant General of the Federation \n(OAGF). \nFederation \nAcct \n52.2%\nVAT \n38.1%\nExcess \nNon-Oil \n5.3%\nExchange \nGain \n4.3%\nFederation \nAccount \n48.0%\nVAT\n42.3%\nNon-Oil \nExcess\n6.2%\nExchange \nGain\n3.5%\n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n38 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n3.4 FINANCIAL DEVELOPMENTS \n3.4.1 Monetary and Credit Developments \nThe Bank sustained its hawkish policy stance in a \nbid to tame inflationary pressure in the first half of \n2023. Key policies, such as the adoption of market-\ndetermined exchange rate and the securitisation \nof Ways and Means Advances, influenced the \ntrajectory and structure of key monetary \naggregates. \n \nReserve Money \nReserve money rose by 8.2 per cent to ₦17,339.25 \nbillion, driven, wholly by growth in liabilities to \nOther Depository Corporations (ODCs). Liabilities \nto Other Depository Corporations grew by 13.2 \nper cent, relative to the 30.6 and 6.4 per cent \ngrowth at end-December 2022 and end-June \n2022, respectively. The increase in liabilities to \nODCs was attributed to 18.9 per cent growth in \nrequired reserves, reflecting increased deposits, \narising from improved financial services. \nCurrency-in-circulation \n(CIC), \nhowever, \ncontracted by 13.6 per cent, compared with a \ndecline of 9.4 per cent and 2.1 per cent at end-\nDecember 2022 and end-June 2022, respectively, \nthus constituting a drag on reserve money. The \ndevelopment was due to the Bank’s efforts aimed \nat deepening the adoption of the eNaira and \nelectronic transaction channels. \nTable 3.4.1: Reserve Money (N’ Billion) \n \nJun-21 \nDec-21 \nJun-22 \nDec-22 \nJun-23 \n Reserve \nMoney \n12,333.85 \n13,295.15 \n13,860.27 \n16,032.96 \n17,339.25 \nCurrency \nin \nCirculation \n2,741.26 \n3,325.16 \n3,255.56 \n3,012.06 \n2,603.27 \nNotes and \nCoins \n2,741.26 \n3,324.22 \n3,254.21 \n3,009.51 \n2,596.11 \neNaira \n- \n0.94 \n1.35 \n2.55 \n7.16 \nLiabilities \nto ODCs \n9,592.59 \n9,969.99 \n10,604.70 \n13,020.91 \n14,735.98 \nSource: Central Bank of Nigeria. \nFigure 3.4.1: Reserve Money \n \nSource: Central Bank of Nigeria. \n \nFurther disaggregation of CIC revealed that the \nvalue of notes and coins declined by 13.7 per cent \nto ₦2,596.11 billion at end-June 2023, while \neNaira transactions increased by 180.8 per cent to \n₦7.16 billion. \n \nFigure 3.4.2: Composition of Currency-in-Circulation \n (N Billion) \nSource: Central Bank of Nigeria. \n -\n 5,000.00\n 10,000.00\n 15,000.00\n 20,000.00\nJun-21\nDec-21\nJun-22\nDec-22\nJun-23\nCIC\n2,741.26\n3,325.16\n3,255.56\n3,012.06\n2,603.27\nLODCs\n9,592.59\n9,969.99\n10,604.7\n13,020.9\n14,735.9\nRM\n12,333.8\n13,295.1\n13,860.2\n16,032.9\n17,339.2\nN'Billion\nCIC\nLODCs\nRM\n -\n 1.00\n 2.00\n 3.00\n 4.00\n 5.00\n 6.00\n 7.00\n 8.00\n -\n 500.00\n 1,000.00\n 1,500.00\n 2,000.00\n 2,500.00\n 3,000.00\n 3,500.00\nJun-21\nSep-21\nDec-21\nMar-22\nJun-22\nSep-22\nDec-22\nMar-23\nJun-23\nN' Billion\nN'Billion\n Naira & Coins (LHS)\n eNaira (RHS)\n \n \n \n \n39 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n \nBroad Money Supply \nBroad money (M3) grew significantly above its \nprovisional benchmark, driven, largely, by the \nincrease in net foreign assets (NFA) following the \nadoption of a market- determined exchange rate \nin June 2023. NFA grew significantly by 59.6 per \ncent to ₦11,112.80 billion against the contraction \nof 25.6 and 34.7 per cent recorded at end-\nDecember 2022 and end-June 2022, respectively. \nNotably, the NFA maintained a downward \ntrajectory until May 2023 before it started rising \nin June 2023, due to the revaluation effect of the \nassets, following the Bank’s decision to switch to \na market-determined exchange rate. This was \nreflected in the 51.8 per cent growth in claims on \nnon-residents, propelled by the increase in the \nvalue of the official reserve assets and other \nforeign assets of the Bank, as well as the increase \nin foreign currency deposits of ODCs. \nNet domestic assets (NDA) also grew by 18.9 per \ncent to ₦53,818.46 billion in June 2023, relative \nto 28.9 and 21.9 per cent at end-December 2022 \nand end-June 2022, respectively. The increase in \nNDA was, driven by the 31.2 per cent growth in \ndomestic claims which was prompted by the 39.8 \nand 26.6 per cent rise in net claims on the central \ngovernment and claims on other sectors, \nrespectively. \nThe composition of the monetary authority’s \nclaims on the central government changed \nsignificantly in line with the securitisation of the \nWays and Means Advances, which took effect in \nJune 2023. Consequently, claims in the form of \nsecurities and shares increased by 987.1 per cent, \ncompared with the growth of 22.8 per cent at \nend-December 2022, but contrasted with the \ndecrease of 4.6 per cent in the corresponding \nperiod of 2022. Claims in the form of loans to the \ncentral government declined by 60.78 per cent, in \ncontrast to the increase of 34.4 and 25.6 per cent \nat end-December 2022 and end-June 2022, \nrespectively. \nClaims on other sectors increased owing to the \n26.9, 4.6 and 31.5 per cent growth in claims on \nother financial corporations, claims on public \nnonfinancial corporations and claims on private \nsector, respectively. \nThe combined growth in NFA and NDA, \nculminated in the 24.4 per cent increase in broad \nmoney (M3) to ₦64,906.93 billion, relative to the \n17.4 and 10.0 per cent growth at end-December \n2022 and end-June 2022, respectively. On an \nannualised basis, M3 grew by 48.8 per cent, 20.6 \npercentage points above the 2023 provisional \nbenchmark of 28.21 per cent. \nOn the liability side, the major drivers of the \ngrowth \nin \nbroad \nmoney \nliabilities \nwere \ntransferable deposits and other deposits, which \n \nBox 3 \nCurrency Operations \nThe Bank issued currency totaling ₦2,405.34 \nbillion during the review period. This \nrepresented an increase of 331.0 and 236.37 \nper cent, relative to the first and second \nhalves of 2022, respectively. The eNaira \naccounted for less than half a per cent of the \ncurrency issued, with banknotes accounting \nfor over 99.0 per cent. \n \nPeriod \nBank Note \n(N Billion) \neNaira \n(N Billion) \nTotal \n(N Billion) \nJan – Jun 2022 \n557.61 \n0.48 \n558.09 \nJul – Dec 2022 \n713.51 \n1.55 \n715.09 \nJan – Jun 2023 \n2,400.48 \n4.86 \n2,405.34 \n \nThe Forensic Currency Laboratory of the Bank \nhas secured approval to commence in-house \ncounterfeit \nnotes \nadjudication \nand \nexamination \nusing \nstate-of-the-art \ntechnology to enhance quality and integrity \nof the currency. \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n40 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \ngrew by 22.2 and 28.5 per cent, respectively, \ncompared with the 20.3 and 17.6 per cent at end-\nDecember 2022 and 16.5 per cent and 8.2 per \ncent at end-June 2022. Specifically, the 71.3 per \ncent growth in other deposits was propelled by \nthe increase in foreign currency deposits, \nfollowing the adoption of a market-determined \nexchange rate. Currency outside depository \ncorporations, however, constituted a drag on the \ngrowth of monetary liabilities as it declined by \n11.9 per cent, thus, sustaining its downward trend \nsince December 2022. \nTable 3.3.12: Growth in Monetary Assets and \nLiabilities \n \nDrivers of Growth in Monetary Assets \nNFA contributed 8.0 percentage points to the \ngrowth in broad money supply, in contrast to the \nnegative \n5.4 \npercentage \npoints \nand \n7.3 \npercentage points, respectively, at end-December \n2022 and end-June 2022. NDA contributed 16.4 \npercentage points to the growth in money supply, \nrelative to contributions of 22.8 percentage points \nat end-December 2022 and 17.3 percentage \npoints at end-June 2022. \nDomestic claims contributed the most to growth \nin broad money supply at 38.3 percentage points, \nwhich was higher than the 34.5 percentage points \nand \n19.6 \npercentage points \ncontributions \nrecorded in the preceding half and the \ncorresponding period of 2022, respectively. A \nfurther disaggregation shows that net claims on \ncentral government and claims on other sectors \nboth recorded higher contributions of 17.0 \npercentage points and 21.3 percentage points, \nrespectively. \nDrivers of Growth in Monetary Liabilities \nOther deposits contributed the most to growth in \nmonetary liabilities at 16.9 percentage points, \nrelative to 10.5 percentage points and 4.9 \npercentage points at end-December 2022 and \nend-June 2022, respectively. This was followed by \ntransferable deposits, which contributed 7.7 \npercentage points, compared with 6.9 percentage \npoints and 5.7 percentage points at end-\nDecember 2022 and end-June 2022, respectively. \nCurrency \noutside \ndepository \ncorporations \nconstituted a drag to growth in monetary \nliabilities, as it recorded a negative contribution of \n0.6 percentage point in the review period, \ncompared with negative 0.8 percentage point and \nnegative 0.5 percentage point at end-December \n2022 and end-June 2022, respectively. \n \n3.4.2 \nConsumer Credit \nThe value of consumer credit extended by ODCs to \neconomic agents expanded relative to the level in \nthe preceding half. Consumer credit improved \ndespite the increase in lending rates. The \ndevelopment was due to increased demand for \npersonal loans and strengthened enforcement of \nthe \nloan-to-deposit \nratio \n(LDR) \npolicy. \nConsequently, consumer credit outstanding rose \nby 13.7 per cent to N2,637.32 billion in the review \nperiod, compared with N2,318.63 billion and \n \nJun 21 \nDec 21 \nJun 22 \nDec 22 \nJun 23 \nNFA \n(18.73) \n4.22 \n(34.68) \n(25.57) \n59.64 \nDC \n6.85 \n17.83 \n 17.82 \n31.42 \n 31.22 \n Net claims on \nGovernment \n0.88 \n20.42 \n31.61 \n61.61 \n39.64 \nClaims on \n \n \n \n \n \nOther Sectors \n 9.15 \n16.83 \n12.35 \n19.46 \n26.60 \n Other financial \ncorporations \n \n(1.89) \n \n(5.34) \n \n2.91 \n \n(11.69) \n \n26.86 \n State and local \ngovernment \n 3.57 \n 20.63 \n29.85 \n 32.47 \n(8.51) \n Public \nnonfinancial \ncorporations \n28.75 \n3.44 \n 42.37 \n40.89 \n 4.55 \n Private sector \n 13.87 \n 26.84 \n 12.64 \n 19.95 \n 31.47 \nBroad money \nLiabilities \n \n1.56 \n \n14.24 \n \n10.02 \n \n17.44 \n \n24.39 \nCurrency outside \ndepository \ncorporations \n \n(9.91) \n \n17.74 \n \n(7.46) \n \n(12.57) \n \n(11.91) \nTransferable \ndeposits \n 3.25 \n13.30 \n16.61 \n20.34 \n22.20 \nOther deposits \n3.86 \n19.99 \n8.19 \n17.63 \n28.49 \nSecurities other \nthan shares \n(39.82) \n(99.92) \n(1.68) \n0.00 \n26.13 \n \n \n \n \n \n \nSource: Central Bank of Nigeria \n \n \n \n \n41 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nN1,933.18 billion in the preceding half and \ncorresponding period of 2022, respectively. \nConsumer credit accounted for 7.0 per cent of \ntotal credit to the various sectors of the economy \nby the ODCs, compared with 7.9 and 7.2 per cent \nin the preceding half and corresponding period of \n2022, respectively. \nFigure 3.4.3: Consumer Credit and its Share of Total Sectoral \n Credit \n \nSource: Central Bank of Nigeria. \n \nCredit Utilisation by Sectors \nThe Bank's numerous intervention initiatives, LDR \npolicy implementation and the revaluation of \nforeign credit to critical sectors led to a significant \nincrease in sectoral credit allocation to critical \nsectors of the economy. Total sectoral credit \nutilisation stood at ₦37,479.37 billion at end-June \n2023, representing an increase of 27.3 and 39.6 \nper cent, respectively, relative to the ₦29,445.87 \nbillion and ₦26,846.40 billion recorded at end-\nDecember 2022 and end-June 2022. Of the total \nsectoral credit utilised, services sector sustained \nits dominance, as it accounted for the largest \nshare of 51.6 per cent, relative to 52.8 and 54.5 \nper cent at end-December 2022 and end-June \n2022, respectively. The share of industry sector \nincreased by 2.5 percentage points to 43.5 per \ncent, relative to 41.0 and 39.4 per cent recorded \nat end-December 2022 and end-June 2022, \nrespectively. The share of credit to agriculture \ndeclined by 1.3 percentage points to 4.9 per cent, \ncompared with 6.2 and 6.1 per cent in the \npreceding half year and corresponding period, \nrespectively. \n \nTable 3.4.1: Sectoral Credit Allocation in Per cent \n \nJun-22 \nDec-22 \nJun-23 \nAgriculture \n6.1 \n6.2 \n4.9 \nIndustry \n39.4 \n41.0 \n43.5 \n of which Construction \n4.4 \n4.0 \n4.0 \nServices \n54.5 \n52.8 \n51.6 \n of which Trade/General \nCommerce \n7.1 \n7.5 \n7.7 \nSource: Central Bank of Nigeria. \n \nMaturity structure of Banks Claims’ and Liabilities \nShort-term deposits of less than one-year \nmaturity accounted for 90.2 per cent, relative to \n4.5 and 5.3 per cent for medium-term and long-\nterm deposits, respectively. Short-term deposits \nrose by 0.4 and 0.2 percentage points, relative to \nits share of 89.8 and 90.0 per cent at end-\nDecember 2022 and the corresponding period of \n2022, respectively. The preference for short-term \ndeposits over longer-term deposits has continued \nto grow despite the increase in deposit rates for \nmedium- to long-term. This was, driven by \nuncertainties around inflation expectations. \n \nFigure 3.4.4: Maturity Structure of Bank by Deposits in \n \n Per cent \n \nSource: Central Bank of Nigeria. \n \nThe structure of banks’ loans exhibited a similar \ntrend as deposits. Credit with maximum maturity \nof one year formed the bulk of banks’ loan \nportfolio, accounting for 51.0 per cent of the total \n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n0.00\n500.00\n1,000.00\n1,500.00\n2,000.00\n2,500.00\n3,000.00\nJun. 21Dec-21 Jun-22 Dec-22 Jun-23\nPer cent\n₦' Billion\nToatl Cosumer Credit\nShare of Total Sectoral Credit (RHS)\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nJun. 20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23\nPer cent (%)\nShort-term\nMedium-term\nLong-term\n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n42 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nloans, relative to 14.0 and 35.0 per cent for bank \ncredit with medium-term and long-term tenors, \nrespectively. At 51.0 per cent, short-term credit \ndeclined by 7.1 percentage points, relative to the \n58.1 and 55.1 per cent recorded in the preceding \nand corresponding halves, respectively. Although, \nshort-term \ncredit \ntrended \ndownward, \nit \ncontinued to be dominant in the loan portfolio of \nbanks due to the need to match short-term \nliabilities and uncertainty in the business \nenvironment. \n \nFigure 3.4.5: Distribution of Bank Loans and Advances by \n Maturity in Per cent \n \nSource: Central Bank of Nigeria. \n \n \nMarket Structure of the Banking Industry \nThe market structure of the banking industry \nrecorded marginal improvement. There was slight \ntapering in the concentration ratio of the five \nlargest banks in terms of deposits and assets, \nrelative to the preceding period of 2022. The \nconcentration of the five largest banks in terms of \ndeposits moderated by 4.5 percentage points to \n64.10 per cent, compared with the 68.60 per cent \nconcentration ratio in the preceding half of 2022. \nSimilarly, in terms of assets, the concentration of \nthe five largest banks declined by 6.32 percentage \npoints to 62.68 per cent over 69.00 per cent in \nDecember 2022. The shares of individual banks in \ntotal deposits and assets ranged from 0.13 per \ncent to 15.20 per cent and 0.44 per cent to 17.55 \nper cent, respectively. \n \nFigure 3.4.6: Market Concentration Ratios of Banks (Assets \nand Deposits) \n \nSource: Central Bank of Nigeria. \n \nThe structure of the banking system remained \ncompetitive as the Herfindahl-Hirschman Indices \n(HHI) of 973.70 in deposits, and 981.80 in assets \n(on a scale of 100 to 10,000) remained below \n1,000, signifying the existence of competition in \nthe banking system. Nonetheless, the HHI \nposition for both deposits and assets increased \nrelative to the corresponding half-year position of \n954.53 and 933.89, respectively. \n3.4.3 \nFinancial Soundness Indicators \nNigeria’s financial sector remained resilient, as key \nfinancial soundness indicators were within \nregulatory benchmarks. At end-June 2023, the \nindustry Capital Adequacy Ratio (CAR) fell to 11.2 \nper cent, from 13.8 and 14.1 per cent at end-\nDecember 2022 and end-June 2022, respectively. \nThe development was attributed to the reforms in \nthe foreign exchange market, resulting in the \nrevaluation of foreign exchange denominated risk \nassets. Consequently, the risk-weighted assets of \nbanks increased, which more than offset the rise \nin their total qualifying capital. The ratio, \nhowever, \nremained \nabove \nthe \nminimum \nregulatory benchmark of 10.0 per cent. \n0\n10\n20\n30\n40\n50\n60\nPer cent (%)\nShort-term\nMedium-term\nLong-term\n0.0\n20.0\n40.0\n60.0\n80.0\nDec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23\nCR 6 (Deposits)\nCR 6 (Assets)\nCR (Largest Deposits)\nCR (Largest Assets)\n \n \n \n \n43 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nAnalysis of bank asset quality measured by the \nratio of non-performing loans (NPLs) to gross \nloans stood at 4.1 per cent at end-June 2023, \nrelative to 4.2 per cent at end-December 2022, \nand 5.0 per cent at end-June 2022. The NPL ratio \nwas within the 5.0 per cent prudential \nrequirement. \nBanking industry Liquidity Ratio (LR) rose by 9.2 \npercentage points to 62.2 per cent, compared \nwith 53.0 per cent at end-December 2022. The \nrise in LR reflected an increase in the stock of \nliquid assets held by banks, particularly, \ngovernment securities. Liquidity ratio remained \nabove the regulatory benchmark of 30.0 per cent. \n3.4.4 \nDevelopments in Other Financial \nInstitutions \nThe Bank sustained its regulation and supervision \nof Other Financial Institutions (OFIs) in the review \nperiod to support stability of the financial system \nand enhance inclusive growth. To further broaden \nthe reach of the OFIs segment, 13 new OFIs, \ncomprising 11 MFBs and two FCs, were granted \noperating licences. In addition, following the \nrevocation of operating licenses of 186 OFIs \nconsisting of four Primary Mortgage Banks \n(PMBs), three Finance Companies (FCs) and 179 \nMicrofinance Banks (MFBs), the total number of \nOFIs stood at 6,536 at end-June 2023, relative to \n6,709 and 6,699 at end-December 2022 and end-\nJune 2022, respectively. \nA further analysis showed that there were a total \nof 712 MFBs in operation as at end-June 2023, \ncomprising 9 National, 123 State, and 580 Unit \nMFBs, compared with 880 MFBs and 875 MFBs at \nend-December \n2022 \nand \nend-June \n2022, \nrespectively. The change in the number of MFBs \nrelative to the level in the second half of 2022 was \ndue to the licencing of 11 new MFBs and the \nrevocation of 179 MFBs. \nThe FCs in operation at end-June 2023 were 110, \ncompared with 111 at end-December 2022 and \n106 at end-June 2022. The change was, due to the \nlicensing of two FCs in the first half of 2023, while \nthe licences of three FCs were revoked in the \nreview period. \nThe number of operating PMBs decreased to 32 \n(10 national PMBs and 22 state PMBs) at end-June \n2023 from 34 at end-December 2022. The \ndecrease was as a result of the revocation of \noperating licences of four PMBs at end-December \n2022. \nThe number of Bureaux-de-Change (BDC) and \nDFIs remained at 5,675 and seven (7), \nrespectively, as there was no newly licenced \ninstitution during the review period. \nAn analysis of the OFIs financial position showed \nthat, total assets excluding the Bureaux-de-\nChanges (BDCs), was N6,377.01 billion at end-\nJune 2023. This was 2.2 and 12.9 per cent above \nthe N6,240.55 billion and N5,646.65 billion, at \nend-December \n2022 \nand \nend-June \n2022, \nrespectively. The increase in total assets was \nattributed, largely, to increases in shareholders’ \nfunds, deposit liabilities, borrowings and ‘due to \nother banks’. \nTable 3.4.2: Breakdown of Other Financial Institutions \nS/N \nType \nTotal No. of institutions as at \n \n \nend-Jun-\n22 \nend-Dec-\n22 \nend-Jun-23 \n1 \nMicrofinance \nBanks: \n \n \n \n \n Unit \n732 \n737 \n580 \n \n State \n134 \n134 \n123 \n \n National \n9 \n9 \n9 \n \n \n875 \n880 \n712 \n2 \nBureaux \nDe \nChange \n5,613 \n5,675 \n5,675 \n3 \nFinance \nCompanies \n106 \n111 \n110 \n4 \nDevelopment \nFinance \nInstitutions \n7 \n7 \n7 \n 5 \nPrimary \nMortgage \nBanks: \n \n \n \n \n State \n23 \n25 \n22 \n \n National \n11 \n11 \n10 \n \n \n34 \n36 \n32 \n \nTotal \n6,697 \n6,707 \n6,536 \n Source: Central Bank of Nigeria \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n44 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nTable 3.4.3: Other Financial Institutions Consolidated \n Financial Position \n Source: Central Bank of Nigeria \n \nNet loans and advances, at N3,237.21 billion, was \n2.9 and 7.1 per cent above its levels at end-\nDecember 2022 and end-June 2022, respectively. \nSimilarly, placements increased by 14.0 per cent \nto N942.07 billion, compared with the N810.48 \nbillion at end-December 2022. Investments at \nN1,477.39 billion at end-June 2023 fell by 4.6 per \ncent from the N1,550.32 billion recorded at end-\nDecember 2022. \nTotal Deposit liabilities, at N1,296.85 billion in the \nfirst half of 2023, was 0.6 and 9.3 per cent above \nthe levels at end-December 2022 and end-June \n2022, respectively. Borrowings amounted to \nN3,155.76 billion at end-June 2023, indicating an \nincrease of 25.5 and 48.5 per cent, compared with \nthe levels at end-December 2022 and end-June \n2022, respectively. Share capital of N663.07 \nbillion at end-June 2023, was 34.0 per cent and \n33.1 per cent higher than the levels at end-\nDecember 2023 and end-June 2022, respectively. \nSimilarly, reserves increased by 27.1 and 33.2 per \ncent to N313.91 billion at end-June 2023, relative \nto its levels at end-December 2022 and end-June \n2022, respectively. \nFurthermore, “due to other banks” increased by \n194.5 and 17.2 per cent to N185.06 billion at end-\nJune 2023, relative to its levels at end-December \n2022 \nand \nend-June \n2022, \nrespectively. \nShareholders’ fund amounted to N976.98 billion, \nan increase of 31.7 and 33.1 per cent relative to \nits levels at end-December 2022 and end-June \n2022, respectively. The increase in shareholders’ \nfund was due to fresh capital injections and \naccretion to reserves. \nA disaggregation of the total capital, at N6,377.01 \nbillion, showed that the DFIs, MFBs, PMBs and FCs \naccounted for 61.4, 22.9, 8.2 and 7.5 per cent of \nthe total, respectively. \n \n3.4.5 \nDevelopment Finance Institutions \nThe consolidated financial position of the \nDevelopment Finance Institutions (DFIs) improved \nowing to additional capital injection to enhance \ntheir functions. At end-June 2023, the total assets \nof the DFIs was N3,916.78 billion, an increase of \n3.8 and 17.5 per cent above the levels at end-\nDecember 2022 and end-June 2022, respectively. \nThe rise was, majorly, due to increase in \nplacements, net loans and advances, investment, \nfixed assets, and “Other assets”. The increased \nasset was financed through accretion to reserves, \nincreased borrowings, shareholders’ fund, paid-\nup capital, deposits, and long-term liabilities. \n \nASSETS \nJUN. 2022 \nDEC. 2022 \nJUN. 2023 \n \n N'000 \nN'000 \nN'000 \nCash & Bank \nBalances \n263,824,378 \n295,309,667 \n240,441,610 \nPlacements \n708,544,239 \n810,478,588 \n942,068,762 \nInvestments \n1,231,449,913 \n1,548,315,206 \n1,477,387,519 \nNet Loans & \nAdvances \n3,023,609,148 \n3,147,517,943 \n3,237,205,058 \nOther Assets \n249,145,506 \n262,036,336 \n287,868,142 \nFixed Assets \n170,071,913 \n176,894,192 \n192,039,524 \nTotal Assets \n5,646,645,097 \n6,240,551,932 \n6,377,010,615 \nFinanced By: \n \n \n \nShare Capital \n498,230,745 \n494,913,592 \n663,072,057 \nReserves \n235,691,426 \n246,951,059 \n313,904,949 \nShareholders' \nfund \n733,922,171 \n741,864,651 \n976,977,006 \nDeposits \nLiabilities \n1,186,557,994 \n1,289,653,202 \n1,296,852,513 \nBorrowings \n2,125,758,380 \n2,513,660,735 \n3,155,758,751 \nDue to Other \nBanks \n157,941,082 \n62,849,814 \n185,060,971 \nOther \nLiabilities \n920,530,197 \n758,322,662 \n53,587,339 \nLong-term \nLiabilities \n521,935,273 \n874,200,868 \n708,774,035 \nTotal Capital & \nLiabilities \n5,646,645,097 \n6,240,551,932 \n6,377,010,615 \n \n \n \n \n45 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFurthermore, analysis of the total assets by \ninstitution indicated that, the Bank of Industry \n(BOI), Federal Mortgage Bank of Nigeria (FMBN), \nDevelopment Bank of Nigeria (DBN), Nigerian \nExport-Import Bank (NEXIM), Nigeria Mortgage \nRefinance Company (NMRC), Bank of Agriculture \n(BOA) and The Infrastructure Bank (TIB) \naccounted for 62.6, 13.9, 13.2, 6.9, 2.2, 1.1 and \n0.1 per cent, respectively. The BOI, DBN, FMBN, \nNEXIM, NMRC and BOA accounted for 54.3, 19.3, \n17.2, 7.3, 1.4 and 0.5 per cent, of the total net \nloans and advances, respectively. \nTable 3.4.4: Consolidated Balance Sheet of DFIs for the first \n half of 2023 \n Source: Central Bank of Nigeria. \n \n \nMicrofinance Banks \nAssets of MFBs decreased, following the \nrevocation of the licences of some MFBs. Total \nassets of the MFBs decreased by 3.4 per cent to \nN1,461.14 billion at end-June 2023, from \nN1,512.09 \nbillion \nat \nend-December \n2022. \nHowever, it was higher than the level at the \ncorresponding period of 2022 by 3.7 per cent or \nN1,408.58 billion. The asset gap was financed, \nmainly by increase in ‘takings from other banks’ \nand share holders’ funds. \nTable 3.4.5: Balance Sheet of MFBs for the First Half of 2023 \n \nJUN. 2022 \nDEC. 2022 \nJUN. 2023 \n \nN'000 \nN'000 \nN'000 \nCash \n32,744,108 \n7,937,795 \n 9,398,478 \nBalances with \nBanks \n151,276,444 \n186,842,538 \n152,549,820 \nPlacements \n127,669,383 \n140,433,293 \n 171,013,148 \nShort term \nInvestments \n32,033,882 \n24,783,957 \n 24,239,757 \nLong Term \nInvestments \n7,381,753 \n13,556,832 \n10,197,623 \nNet Loans and \nAdvances \n955,227,381 \n1,031,013,635 \n985,397,083 \nOther Assets \n66,799,279 \n75,975,326 \n79,070,436 \nFixed Assets \n35,449,116 \n31,551,291 \n29,270,403 \nTOTAL ASSETS \n1,408,581,346 \n1,512,094,667 \n1,461,136,748 \n \n \n \n \nFINANCED BY \n \n \n \nPaid-up Capital \n119,260,260 \n117,280,901 \n134,651,505 \nReserves \n54,573,548 \n65,017,456 \n 53,404,528 \nShareholders' \nFund \n173,833,808 \n182,298,357 \n 188,056,033 \nDeposits \n453,989,534 \n507,633,134 \n 466,886,509 \nTakings from \nOther Banks \n133,925,243 \n36,453,326 \n 161,986,359 \nLong Term \nLoans/On-lending \n390,356,047 \n605,040,843 \n 575,617,373 \nOther Liabilities \n256,476,714 \n180,669,007 \n 68,590,474 \nTOTAL LIABILITIES \n1,408,581,346 \n1,512,094,667 \n1,461,136,748 \n Source: Central Bank of Nigeria. \n \nFinance Companies \nTotal assets of FCs increased, due largely to \nincreases in net loans and advances, placements, \ninvestment, fixed assets and other assets. The \ntotal assets rose to N475.62 billion at end-June \n2023, indicating an increase of 14.1 and 26.0 per \ncent, compared with N416.90 billion and N377.47 \nbillion at end-December 2022 and end-June 2022, \nrespectively. \nTable 3.4.6: Consolidated Balance Sheet of FCs for first half \nof 2023 \n \n \nASSETS \nJun. 2022 \nDec. 2022 \nJun. 2023 \n \nN'000 \nN'000 \nN'000 \nCash \n2,233,223 \n2,197,848 \n1,537,155 \nBalances with Banks \n27,670,496 \n28,208,361 \n30,366,762 \nPlacements \n37,021,246 \n49,617,287 \n56,525,436 \nInvestments \n12,756,583 \n14,384,508 \n19,107,701 \nNet Loans and Advances \n181,798,627 \n204,412,724 \n245,861,463 \nOther Assets \n66,198,625 \n70,243,528 \n70,514,713 \nFixed Assets \n49,792,007 \n47,839,606 \n51,706,663 \nTOTAL \n377,470,807 \n416,903,862 \n475,619,893 \nFINANCED BY: \n \n \n \nPaid-up Capital \n29,404,116 \n26,524,245 \n28,991,984 \nReserves \n17,780,420 \n12,039,063 \n1,617,782 \nShareholders' Funds \n47,184,536 \n38,563,308 \n30,609,766 \nLong Term Liabilities \n1,940,146 \n3,473,686 \n3,607,465 \nTotal Borrowings \n239,037,832 \n254,348,165 \n300,685,047 \nOther Liabilities \n89,308,293 \n120,518,703 \n140,717,615 \nTOTAL \n377,470,807 \n416,903,862 \n475,619,893 \n Source: Central Bank of Nigeria. \nASSETS \nJUN. 2022 \nDEC. 2022 \nJUN. 2023 \n \nN'000 \nN'000 \nN'000 \nCash & Bank \nBalances \n22,002,218 \n45,347,441 \n15,979,261 \nPlacements \n466,507,297 \n540,251,875 \n634,344,315 \nInvestments \n1,121,464,031 \n1,437,983,251 \n1,373,293,546 \nNet Loans & \nAdvances \n1,598,617,094 \n1,614,042,034 \n1,723,426,155 \nOther Assets \n60,525,133 \n60,134,815 \n80,012,589 \nFixed Assets \n64,943,907 \n76,724,014 \n89,722,409 \nTotal Assets \n3,334,059,680 \n3,774,483,430 \n3,916,778,275 \nFinanced By: \n \n \n \nPaid-up Capital \n238,780,740 \n238,868,169 \n398,244,480 \nReserves \n232,891,187 \n246,934,588 \n318,201,961 \nShareholders' \nfund \n471,671,927 \n485,802,757 \n716,446,441 \nDeposits \n558,363,855 \n600,086,698 \n646,656,845 \nBorrowings \n1,886,720,548 \n2,259,312,570 \n2,855,073,704 \nDue to Other \nBanks \n2,927,389 \n1,467,273 \n1,232,985 \nOther Liabilities \n371,031,896 \n372,581,982 \n-353,769,363 \nLong-term \nLiabilities \n43,344,065 \n55,232,150 \n51,137,663 \nTotal Capital & \nLiabilities \n3,334,059,680 \n3,774,483,430 \n3,916,778,275 \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n46\n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nPrimary Mortgage Banks \nThe total assets of PMBs decreased due mainly to \nthe revocation of the operating licences of two \nPMBs. Total assets of PMBs, at N523.48 billion, \nreflected a decrease of 2.5 and 0.6 per cent below \nthe N537.07 billion and N526.53 billion at end-\nDecember 2022 and end-June 2022, respectively. \nThe development was due, mainly, to the \ndecreases in net loans and advances, and \ninvestments. Net loans and advances at N282.52 \nbillion at end-June 2023, decreased by 5.2 and 1.9 \nper cent from the N298.05 billion and N287.97 \nbillion at end-December 2022 and end-June 2022, \nrespectively. Investments at N37.14 billion, \ndecreased by 25.5 and 20.4 per cent below the \nlevels at end-December 2022 and end-June 2022, \nrespectively. \n \nTable 3.4.7: Consolidated Balance Sheet of PMBs for the \n first half of 2023 \n \nASSETS \nJUN. 2022 \nDEC. 2022 \nJUN. 2023 \n \nN'000 \nN'000 \nN'000 \nCash \n1,670,226 \n942,406 \n2,635,867 \nCash Reserve \nRequirement \n2,590,795 \n2,372,286 \n2,365,231 \nBalances with \nBanks \n23,636,868 \n21,460,992 \n25,609,036 \nPlacement with \nbanks \n77,346,313 \n80,176,133 \n80,185,863 \nInvestments/Non-\ncurrent Assets Held \nfor Sale \n46,623,126 \n49,817,888 \n37,135,056 \nShort Term \nInvestments \n4,388,071 \n822,347 \n7,007,616 \nInvestment in \nQuoted Shares \n6,802,467 \n6,966,423 \n6,406,220 \nNet Loans and \nAdvances \n287,966,046 \n298,049,550 \n282,520,357 \nOther Assets \n55,622,469 \n55,682,667 \n58,270,404 \nFixed Assets \n19,886,883 \n20,779,281 \n21,340,049 \nTOTAL \n526,533,264 \n537,069,973 \n523,475,699 \nFINANCED BY: \n \n \n \nPaid-up Capital \n110,785,629 \n112,240,277 \n101,184,088 \nReserves \n-69,553,729 \n-77,040,048 \n-59,319,322 \nShareholders' \nFunds \n41,231,900 \n35,200,229 \n41,864,766 \nDeposits \n174,204,605 \n181,933,370 \n183,309,159 \nDue to \nBanks/Others \n21,088,450 \n24,929,215 \n21,841,627 \nLong-term \nLoans/NHF \n86,295,015 \n84,552,970 \n78,411,534 \nOther Liabilities \n203,713,294 \n210,454,189 \n198,048,613 \nTOTAL \n526,533,264 \n537,069,973 \n523,475,699 \nSource: Central Bank of Nigeria. \n \n \nExamination of Other Financial Institutions \nThe Bank conducted Target and Anti-Money \nLaundering, \nCombating \nthe \nFinancing \nof \nTerrorism, and combating Proliferation Financing \n(AML/CFT/CPF) examinations on 910 BDCs, and \nRisk-Based Supervision (RBS) and AML/CFT \nexamination of 100 MFBs. The objective was to \nascertain compliance with the extant Money \nlaundering (ML) and Terrorism Financing Acts and \nother \napplicable \nregulations. \nThe \nMoney \nLaundering, \nTerrorism \nFinancing, \nand \nProliferation \nFinancing \n(ML/FT/PF) \nrisk \nexamination of the OFIs was assessed in line with \nthe extant money laundering and terrorism Acts \nthat were enacted in 2022 and the newly \ngazetted CBN AML/CFT/CPF Regulations 2022. \nThe examination revealed various infractions \nfrom the extant regulations and the erring \ninstitutions were penalized in line with the extant \nCBN AML/CFT/CPF (Administrative Sanctions) \nRegulations of 2018. \nFurthermore, target examination of 116 OFIs, \ncomprising, 2 PMBs, 17 FCs and 97 MFBs was \nconducted in the review period. The examination \nfocused on risk asset portfolio, corporate \ngovernance and adequacy of regulatory capital. \nOut of the 17 FCs, 11 were examined, four had \nclosed shop, while two were undergoing \nrestructuring. Of the 11 FCs examined, 10 were \nrequired to inject additional capital. The target \nexamination of the 97 MFBs revealed that 69 \n \n \n \n \n47 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nMFBs were solvent, while 28 MFBs required \nadditional capital. \n3.4.6 \nFinancial Markets \nInterest Rate Developments \nInterest rates movements, generally, reflected \nthe hawkish policy stance of the Bank. The \nbanking system witnessed ample liquidity on the \nback of the combined effect of currency \nrecirculation, exchange rate reforms, improved \nFAAC payments and maturities of government \nsecurities. \nIn the interbank market, the movements of rates \nwere generally mixed. The average interbank call \nrate (IBCR) gained 0.20 percentage point, while \naverage open-buy-back rate (OBB) shed 0.67 \npercentage point to close the review period at \n12.41 and 12.42 per cent, respectively, compared \nwith the levels in the preceding half of 2022. \n \nTable 3.4.8: End-Period Money Market Rates \n \nIBCR \nOBB \nNIBOR-\nCALL \nNIBOR-\n30 \nMPR \n2021 H1 \n16.87 \n16.39 \n13.39 \n12.30 \n11.50 \n2021 H2 \n0.00 \n12.59 \n13.78 \n10.03 \n11.50 \n2022 H1 \n11.10 \n10.89 \n11.80 \n8.52 \n13.00 \n2022 H2 \n12.08 \n11.61 \n11.89 \n13.16 \n16.50 \n2023 HI \n11.66 \n10.89 \n10.04 \n11.49 \n18.50 \nJan \n10.35 \n8.51 \n10.31 \n11.61 \n17.50 \nFeb \n12.54 \n6.10 \n12.54 \n12.75 \n17.50 \nMar \n14.75 \n6.62 \n13.83 \n13.21 \n18.00 \nApril \n15.80 \n7.49 \n17.36 \n15.02 \n18.00 \nMay \n12.31 \n9.39 \n13.15 \n12.89 \n18.50 \nJune \n11.66 \n10.89 \n10.04 \n11.49 \n18.50 \n Source: Central Bank of Nigeria \nNote: IBCR-Interbank Call Rate, NIBOR- Nigeria Inter-Bank Offered \nRate, OBB – Open Buy Back, MPR- Monetary Policy Rate \n \n \nThe average NIBOR-call rate declined to 10.04 per \ncent from 11.89 per cent in the preceding half of \n2022. These developments were in tandem with \nthe liquidity conditions in the market following the \nBank’s implementation of the CRR policy, \ninterventions in the foreign exchange market, \nFAAC distributions, among others. \n \n \nDeposit and Lending Rates \nThe average lending rates remained elevated, \nfollowing the hawkish monetary policy stance of \nthe Bank. The average prime and maximum \nlending rates rose to 13.9 and 28.4 per cent in the \nfirst half of 2023, compared with 12.8 and 28.3 \nper cent in the second half of 2022, respectively. \nIn \ncomparison \nwith \nthe \nlevels \nin \nthe \ncorresponding period of 2022, the average prime \nand maximum lending rates rose by 2.0 \npercentage points and 0.4 percentage point, \nrespectively. \n \nTable 3.4.9: DMBs Deposit and Lending Rates in Per cent \nSource: Central Bank of Nigeria. \n \nThe average term deposit rate increased to 7.0 \nper cent in the first half of 2023 compared with \n6.2 per cent in the second half of 2022. \nConsequently, in first half of 2023, the spread \nbetween the average term deposit and maximum \nlending rates narrowed to 21.4 percentage points \nin the review period compared with 22.1 and 24.6 \npercentage \npoints \nin \nthe \npreceding \nand \ncorresponding halves of 2022, respectively. \n \nOpen Market Operations \nTransactions in Open Market Operations (OMO) \nincreased during the review period. Total CBN \nbills offered, subscribed to, and allotted at the \nOMO was ₦9,518.83 billion apiece, compared \nwith ₦6,559.63 billion and ₦7,333.01 billion in \nthe preceding and corresponding halves of 2022. \nThe higher amount of OMO bills was in tandem \nwith the Bank’s contractionary monetary policy \nstance. \nMonth \nSavi\nngs \nRate \nTerm \nDeposit \nRate \nPrime \nLendin\ng Rate \nMax. \nLendin\ng Rate \nSpread \n(Percentage \npoints) \n \n(1) \n(2) \n(3) \n(4) \n(5) \n \n \n \n \n \n(2) & (4) \nJan-23 \n4.3 \n7.6 \n13.7 \n27.6 \n20.0 \nFeb-23 \n4.3 \n7.1 \n13.6 \n28.8 \n21.7 \nMar-23 \n4.6 \n6.7 \n14.0 \n28.1 \n21.4 \nApr-23 \n4.6 \n6.9 \n14.1 \n28.6 \n21.7 \nMay-23 \n5.1 \n7.0 \n14.1 \n28.3 \n21.3 \nJun-23 \n5.2 \n6.6 \n13.9 \n28.9 \n22.3 \n2023 H1 \n4.68 \n6.98 \n13.87 \n28.38 \n21.41 \n2022 H2 \n3.38 \n6.21 \n12.75 \n28.26 \n22.06 \n2022 H1 \n1.30 \n 3.41 \n11.90 \n27.96 \n24.55 \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n48\n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n Figure 3.4.7: OMO Offer and Sales, (N Billion) \nSource: Central Bank of Nigeria. \n \nTenored Repurchase Transactions (Repos) \nThere were no transactions in tenored repo, as \nagainst ₦6,285.26 billion and ₦4,998.12 billion in \nthe first and second halves of 2022, respectively, \nreflecting liquidity conditions in the market. \n \nDiscount Window Operations \nCBN Standing Facilities \nTransaction at the standing facilities window \nshowed growth in the deposit placements arising \nfrom the increased average net liquidity to \n₦792.88 billion in the first half of 2023 from \n₦330.04 billion in the preceding half of 2022. \nThe average daily SDF amount of ₦26.84 billion \nwas recorded in 120 transaction days, at \napplicable rates ranging from 10.5 per cent to \n11.50 per cent in the first half of 2023. This \ncompared with ₦9.81 billion in 123 transaction \ndays at applicable rates, which ranged from 7.0 \nper cent to 9.5 per cent in the preceding half of \n2022. \nConsequently, the average interest payments on \ndeposits increased to ₦0.90 billion in the first half \nof 2023 from ₦0.31 billion in the preceding half of \n2022. On the other hand, average daily request \nfor SLF (comprising only ILF Conversion) stood at \n₦91.69 billion in 103 transaction days, compared \nwith ₦76.08 billion (outright SLF and ILF) in 121 \ntransaction days in the preceding half of 2022, \nwith average daily interest of ₦0.10 billion \ncharged relative to ₦0.61 billion in the preceding \nhalf of 2022. \nInterbank Market Transactions \nSecured \ntransactions \ndominated \ninter-bank \nmarket \ntransactions, \nalbeit \nwith \nrecorded \nincreases \nin \nunsecured \nplacements. \nThe \naggregate value of transactions at the OBB, \ninterbank call and interbank tenored segments \ndeclined in the review period to ₦23,807.16 \nbillion, from ₦24,915.0 billion and ₦25,408.36 \nbillion in the preceding and corresponding \nperiods, respectively. \nAverage transactions at the OBB segment in the \nreview period stood at ₦193.61 billion lower than \n₦198.25 billion and ₦200.56 billion in the \npreceding and corresponding periods. At the \ninterbank (call and tenored) segments, average \ntransactions in the review period stood at ₦10.07 \nbillion, marginally lower than ₦10.31 billion in the \npreceding period, but higher than ₦4.86 billion in \nthe \ncorresponding \nperiod. \nSpecifically, \ntransactions at the OBB segment accounted for \nthe bulk of interbank transactions at 97.6 per \ncent, while the interbank call and tenored \ntransactions accounted for the remaining 2.4 per \ncent. There was a significant increase in interbank \ncall and tenored transactions in the review period, \nindicating \nimproved \nconfidence \namong \ncounterparties in the interbank market. \nFigure 3.4.8 Value of Interbank Funds Market Transactions, \n (N’ Billion) \n \n Source: Central Bank of Nigeria. \n0\n2000\n4000\n6000\n8000\n10000\nH1 2021 H2 2021 H1 2022 H2 2022 H1 2023\nTotal Offer (₦’Billion) \nTotal Sales (₦’Billion)\n0\n5000\n10000\n15000\n20000\n25000\n30000\n35000\nH1 2021 H2 2021 H1 2022 H2 2022 H1 2023\n₦'Billion\nAggregate Inter-bank Transactions\n \n \n \n \n49 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.4.9: Share of Interbank Funds Market Transactions, \n (N’ Billion) \n \n \nSource: Central Bank of Nigeria. \n \nPrimary Market Activities \nThe total sales of Nigerian Treasury Bills (NTBs) \nincreased, compared with the level recorded in \n2022, due, mainly, to the Federal Government’s \nstrategy to maximise domestic borrowings, amid \nrising global interest rates. The total value of NTBs \noffered and allotted was ₦2,599.91 billion apiece, \nindicating an increase of 13.06 per cent and 7.6 \nper cent, above ₦2,260.28 billion and ₦2,415.58 \nbillion, respectively, in the preceding and \ncorresponding periods of 2022. The total public \nsubscription stood at ₦9,502.78 billion, compared \nwith ₦4,450.28 billion and ₦4,663.18 billion in \nthe preceding and corresponding halves of 2022, \nrespectively. Public subscription was higher due \nto the sustained appetite for risk-free instruments \nand prevailing liquidity conditions. \n \nFigure 3.4.10: NTB Offer, Subscriptions, and Allotments \nSource: Central Bank of Nigeria. \nStructure of Allotment of Nigeria Treasury Bills \nThe structure of allotment of the NTBs indicated \nthat deposit money banks, including foreign \ninvestors, took up ₦1,999.10 billion or 76.9 per \ncent. Mandate and internal funds stood at \n₦319.32 billion or 12.3 per cent and merchant \nbanks accounted for the balance of ₦281.49 \nbillion or 10.8 per cent. The stop rates ranged \nbetween 0.10 and 6.00 per cent for the 91-day, \n0.30 and 8.00 per cent for the 182-day and 4.00 \nand 6.49 per cent for the 364-day. \n \n Figure 3.4.11: Nigerian Treasury Bills Outstanding: Class \n of Holders in Per cent \nSource: Central Bank of Nigeria. \n \nThe total value of NTBs outstanding at end-June \n2023 stood at ₦4,722.72 billion, compared with \n₦4,422.72 billion, at end-December 2022 \nindicating an increase of 4.84 per cent. \n \nFigure 3.4.12: Nigerian Treasury Bills Outstanding \n \nSource: Central Bank of Nigeria \n0.00\n10000.00\n20000.00\n30000.00\nH1 2021\nH2 2021\nH1 2022\nH2 2022\nH1 2023\n₦'Billion\nTotal InterBank Call + Interbank Tenored …\nTotal OBB (₦’Billion)\n0.00\n1000.00\n2000.00\n3000.00\n4000.00\n5000.00\n6000.00\n7000.00\n8000.00\n9000.00\n10000.00\nH1 2021\nH2 2021\nH1 2022\nH2 2022\nH1 2023\nOffer (₦'Billion)\nSubscription (₦'Billion)\nAllotment (₦'Billion)\nMandate \nand Internal \nFunds, 27%\nDeposit \nMoney \nBanks, 43%\nMerchant \nBanks, 1%\nParastatals, \n29%\nMandate and Internal Funds\nCommercial Banks\n2991.87\n3786.14\n4504.80\n4422.72\n4722.72\n0.00\n500.00\n1000.00\n1500.00\n2000.00\n2500.00\n3000.00\n3500.00\n4000.00\n4500.00\n5000.00\nH1 2021H2 2021H1 2022H2 2022H1 2023\nN Billion\n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n50 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nOver-the-Counter Transactions in Treasury Bills \nand FGN Bonds \nThere was a decrease in Over-the-Counter (OTC) \ntransactions for NTBs, in contrast to transactions \nin FGN Bonds, which recorded an increase. OTC \ntransactions for NTBs amounted to ₦17,465.16 \nbillion, indicating a decrease of 31.02 per cent \nbelow ₦25,318.10 billion recorded in the \npreceding half of 2022. OTC transactions in FGN \nBonds amounted to ₦10,310.64 billion, indicating \nan increase of 88.73 per cent above ₦5,463.28 \nbillion recorded in the preceding half of 2022. The \nmixed development in the OTC markets was \nattributed, primarily to preference by investors \nfor long-tenored bond instruments with higher \nmarket rates to the NTBs. \n \nFederal Republic of Nigeria Treasury Bonds \nFederal Republic of Nigeria Treasury Bonds \n(FRNTBs) \nworth \n₦50.99 \nbillion \nremained \noutstanding at end-June 2023, same at end-\nDecember 2022. A breakdown of the amount \noutstanding indicated that the CBN held ₦3.12 \nbillion or 6.1 per cent, while ₦47.87 billion or 93.9 \nper cent was held in the Sinking Fund. There were \nno new issues of FRNTBs in the first half of 2023. \n \nFederal Government of Nigeria (FGN) Bonds \nTotal amount of FGN Bonds offered to the public \nin the review period was ₦2,160.00 billion, while \npublic subscription and allotment stood at \n₦4,163.94 \nbillion \nand \n₦3,567.42 \nbillion, \nrespectively. In the latter half of 2022, FGN Bonds \nissuance, subscription and allotment were \n₦1,350.00 \nbillion, \n₦1,631.21 \nbillion, \nand \n₦1,195.18 billion, respectively. The increased \nsubscription was attributed to the conduct of \ntwenty-four (24) auctions in the first half of 2023 \nagainst eighteen (18) in the preceding half, \ncoupled with attractive yields and the prevailing \nliquidity conditions. The subsisting restriction \nplaced on non-banking institutions and individuals \nfrom purchasing OMO bills also sustained \nactivities in the bond market. The total value of \nFGN Bonds outstanding at end-June 2023 stood at \n₦41,972.73 billion, compared with ₦16,421.56 \nbillion at end-December 2022, indicating an \nincrease of 155.6 per cent. The significant rise was \na reflection of the Federal Government’s approval \nto restructure the “Ways and Means Advances” to \nFGN Bonds. \n \nFigure 3.4.13: FGN Bonds Auctions \n \nSource: Central Bank of Nigeria. \n \nFederal Government of Nigeria Savings Bonds \nIn the first half of 2023, FGN Savings Bonds worth \n₦6.28 billion was offered and allotted, compared \nwith ₦9.13 billion at end-December 2022. The \ndecline was attributed to investors’ preference \nfor longer tenored instruments. The new issues \nwere 2- and 3-year tenors with coupon rates \nranging from 9.47 per cent to 10.39 per cent and \n10.47 per cent to 11.39 per cent, respectively. The \ncoupon rates in the preceding half ranged from \n8.08 per cent to 12.49 per cent for the 2-year \ntenor, and 9.08 per cent to 13.49 per cent for the \n3-year tenor. Consequently, the total value of \nFGN Savings bonds outstanding at end-June 2023 \nwas ₦30.70 billion, compared with ₦27.51 billion \nat end-December 2022. \nFederal Government of Nigeria Green Bonds \nThere was no issuance of FGN Green bonds in the \nreview period. Thus, the outstanding stock of the \n0.00\n500.00\n1000.00\n1500.00\n2000.00\n2500.00\n3000.00\n3500.00\n4000.00\n4500.00\nH1 2021 H2 2021 H1 2022 H2 2022 H1 2023\nOffer (₦'Billion)\nSubscription (₦'Billion)\nAllotment (₦'Billion)\n \n \n \n \n51 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nGreen bond remain unchanged at ₦15.00 billion \nat end-June 2023. \nFederal Government of Nigeria Sukuk \nDuring the review period, there was no issuance \nof FGN Sukuk. Thus, FGN Sukuk outstanding at \nend-June 2023 remained at ₦742.56 billion. In the \npreceding half of 2022, a 10-year FGN Sukuk of \n₦130.00 billion was issued and allotted with the \nrental rate of 15.64 per cent payable semi-\nannually. \nFederal Government of Nigeria Promissory Note \nFGN Promissory Notes valued at ₦304.17 billion \nwere issued in the review period. The outstanding \nstock of the Notes at end-June 2023 stood at \n₦780.04 billion, representing an increase of 47.2 \nper cent, compared with ₦530.03 billion at end-\nDecember 2022. The increase was attributed to \nthe payment of incentives to exporters under the \nExport Expansion Grant (EEG) scheme. \n \nTable 3.4.10: Outstanding Debt Instruments \nInstrument \nOutstanding \nOutstanding \n2022H2 \n2023H1 \n(N’ billion) \n(N’ billion) \nNTBs \n4,504.8 \n4,722.72 \nFGN Bonds \n16,421.56 \n41,972.73 \nTreasury Bonds \n50.99 \n50.99 \nSavings Bonds \n27.51 \n30.7 \nFGN Sukuk \n742.56 \n742.56 \nFGN Green Bonds \n15 \n15 \nPromissory Notes \n530.03 \n780.04 \nSource: Central Bank of Nigeria \n3.4.7 \nDevelopments in the Capital Market \nInstitutional Development \nIn the first half of 2023, the Securities and \nExchange Commission (SEC), continued its \nregulatory activities to protect investors, market \noperators, and ensure market integrity. Thus, the \nCommission performed the following regulatory \nfunctions and activities: \n• Blacklisted six unregulated online trading \nplatforms, which included, Prime Invest, \nFXBoxed, New Finance LLC, Axi24, Evolve \nConsulting LLC, and Trust Fund-Mining Global \nPty Ltd.; \n• Accepted applications for its Regulatory \nIncubation (RI) program for FinTech firms \noperating or seeking to operate in the Nigerian \nCapital Market; and \n• Cautioned \nthe \ninvesting \npublic \nagainst \ninvestment on the Binance platform for \ncrypto-assets. \n \nThe Nigerian Exchange Limited (NGX) sustained its \ntransparency initiatives, aimed at enhancing \nmarket integrity and protecting investors by \nproviding compliance-related information to all \nlisted companies. The NGX accomplished the \nfollowing during the review period: \n• Instituted the Digital and Technology Products \nAdvisory \nPanel, \naimed \nat \nengendering \ninteraction with the capital market community \nand the fintech ecosystem to enhance and \nincrease \nthe \nExchange \ndigital \nproduct \nofferings; and \n \n• Listed the Africa Infra Plus Fund (AIPF I), which \nis the first Carbon+ fund in Nigeria, amounting \nto N20.50 billion, closed-end infrastructure \nfund. \nSecondary Market Activities \nActivities on the Nigerian capital market was \nbullish in the first half of 2023, as the All-Share \nIndex (ASI) and aggregate market capitalisation \nappreciated, despite uncertainties in the global \nand domestic economies. The performance was \non account of better-than-expected 2023Q1, \ncorporate \nearnings \ndeclaration, \ncorporate \ninitiatives in digital technology & climate \nproducts, dividend reinvestments, anticipation of \nfavourable 2023H1 corporate earnings in the \nwake of reforms in the energy sector and the \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n52 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nforeign exchange market. Also, appreciation in \nthe banking services stocks, consumer goods, \ntelecommunication and oil/gas stocks also \ncontributed to the improved performance. \nFurthermore, there were 34 new listings on the \nExchange in 2023H1, compared with 26 and 31 \nlistings in the second and first halves of 2022, \nrespectively. \nThe Exchange recorded a significant surge in the \naggregate volume and value of traded securities \nat end-June 2023. The aggregate volume of \ntransactions and value of traded shares increased \nby 165.2 and 117.3 per cent to 66.23 billion shares \nand N727.86 billion, respectively, in 596,360 \ndeals, compared with the 24.97 billion shares and \nN334.97 billion in 489,793 deals recorded at end-\nDecember 2022. Activities on the Exchange was \nslower in the review period, compared with the \ncorresponding half of 2022. \n Figure 3.4.14: Volume and Value of Equities Traded on the \n NGX \n \nSources: Staffs’ computation using data from Securities and \nExchange Commission (SEC). \n \n \nThe equities segment maintained its dominance in \nthe capital market, accounting for 99.9, 99.8 and \n99.7 per cent of the aggregate volume, value of \ntransactions and number of deals, respectively; \nwhile the debt and Exchange Traded Fund (ETF) \ncomponents accounted for the balance. \nSectoral analysis of the equities segment of the \nmarket showed that the financial services sector, \nmeasured by volume of transactions, remained \nthe most active sector on the Exchange. The \nsegment accounted for 34.27 billion shares or \n51.8 per cent, valued at N337.12 billion or 46.5 \nper cent, in 289,623 deals or 48.7 per cent of the \ntotal equities’ transactions at end-June 2023. \nFigure 3.4.15: Changes in Volume, Value & Number of Deals \nof Equities Traded on the NGX \n \nSources: Staffs’ computation using data from SEC. \n \n \n \nIn the review period, rising global interest rate and \nappreciation of the US dollar triggered capital \nflight. \nConsequently, \ndomestic \ninvestors \noutperformed the foreign ones, relative to the \npreceding and corresponding halves of 2022. The \nlevels of domestic and foreign investors’ \nparticipation were 88.7 and 11.3 per cent, \nrespectively, compared with 77.1 and 22.9 per \ncent in the preceding half year. Relative to the \nlevels in the corresponding half of 2022, the \ndomestic and foreign investors’ participation \nstood at 85.4 and 14.6 per cent, respectively. \n \n0.0\n100.0\n200.0\n300.0\n400.0\n500.0\n600.0\n700.0\n800.0\n900.0\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\nFirst half 2022\nSecond Half 2022\nFirst Half 2023\nValue(N' billion)\nVolume (Billion)\nVolume of traded securities (LHS)\nValue of securities (RHS)\n165.2\n117.3\n21.8\n-12.9\n-12.7\n-3.4\n-50.0\n0.0\n50.0\n100.0\n150.0\n200.0\nVolume\nValue\nDeals\nChanges (%)\nRelative to Preceding Period\nRelative to Corresponding Period\n \n \n \n \n53 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.4.16: Domestic and Foreign Investors Participation \nin the Equities Market. \n \n \nSources: Staffs’ computation using data from SEC. \n \nNGX All-Share Index \nThe NGX All-Share Index (ASI) improved on \naccount of price appreciation in the banking \nservices, consumer goods, telecommunication \nand oil/gas stocks, as well as reforms in the energy \nsector and the foreign exchange market. The NGX \nAll-Share Index closed at 60,968.27 index points \nat end-June 2023, reflecting an increase of 19.0 \nand 17.7 per cent, relative to the 51,251.06 and \n51,817.59 recorded at end-December 2022 and \nend-June 2022, respectively. \n \nA bullish run was recorded across all the sectoral \nindices monitored in the review period, as all the \nindices appreciated, compared with the levels at \nend of the second and first halves of 2022, with \nthe exception of NGX-Sovereign bond index, \nwhich depreciated, while NGX-ASeM remained \nflat. \n \n \n \n \n \n \n \nFigure 3.4.17: Percentage Changes of Sectoral Indices at \nend-June 2023. \nSources: Staffs’ computation using data from SEC. \n \nMarket Capitalisation \nThe aggregate market capitalisation appreciated, \ndue to strong corporate earnings in 2023Q1, \nreforms in the energy sector and the foreign \nexchange market, among others. The aggregate \nmarket capitalisation of the 311 listed securities \nclosed at N59,920.00 billion, indicating an \nappreciation of 17.0 and 19.4 per cent, relative to \nthe levels in the second and first halves of 2022, \nrespectively. The development was, due to \nappreciation in the value of securities in all the \nsegments of the market (equities, debts, and \nETFs). \nSimilarly, the market capitalisation of the 156 \nlisted equities grew by 18.7 and 18.9 per cent to \nN33,203.45 billion at end-June 2023, compared \nwith the levels at end-December 2022 and end-\nJune 2022, respectively. The listed equities \n88.7\n77.1\n85.4\n11.3\n22.9\n14.6\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\n100\nFirst Half 2023\nSecond Half 2022\nFirst Half 2022\nParticipation (%)\nDomestic Portfolio Investment\nForeign Portfolio Investment\n-20.0\n-10.0\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\nNGX-Main Board Index\nNGX-30 Index\nNGX-CG Index\nNGX-Premium Index\nNGX-Banking Index\nNGX-Pension Index\nNGX-Insurance Index\nNGX-ASeM Index\nNGX-AFR Bank Value Index\nNGX-AFR Div. Yield Index\nNGX-MERI Growth Index\nNGX-MERI Value Index\nNGX-Consumer Goods Index\nNGX-Oil/Gas Index\nNGX-Lotus II\nNGX-Industrial Goods Index\nNGX-Growth Index\nNGX-Sovereign Bond Index\nChanges (%)\nPreceding changes\ncorresponding changes\n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n54 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \naccounted for 55.4 per cent of the aggregate \nmarket capitalisation, while the debt and ETF \ncomponents accounted for 44.6 and 0.02 per \ncent, respectively. \nThe top ten capitalised companies on the \nExchange accounted for N25,619.29 billion or \n77.2 per cent of the total equity market \ncapitalisation and 42.8 per cent of the aggregate \nmarket capitalisation. Two banks made the top \nten list, accounting for N2,105.42 billion or 6.3 per \ncent of the total equity market capitalisation. \nTotal market capitalisation, as a percentage of \nnominal GDP, stood at 15.0 per cent at end-June \n2023, relative to 14.1 and 14.0 per cent at end-\nDecember 2022 and end-June 2022, respectively. \nThe Warren Buffet Index11, measured by the ratio \nof the value of traded stocks to GDP was between \none and two standard deviation of the historical \ntrend line, implying that the stock market was \nslightly overvalued. The ratio remained the same \nas the level at end-December 2022, but was lower \nby 0.1 percentage point, compared with the 0.8 \nper cent at end-June 2022. \nFigure 3.4.18: All-Share Index and Aggregate Market \nCapitalisation \n \nSources: Staffs’ computation using data from SEC. \n \n \n11 Warren Buffet Index decision, if absolute difference between the actual and historical \naverage: \na. are within 1 standard deviation above or below the trend line, indicates slight over or \nundervaluation; \n b. \nbetween 1 and 2 standard deviations above or below the trend line, indicate moderate over \nor undervaluation; and . \nPrimary Market Activities \nActivities in the primary segment of the Nigerian \ncapital market improved in the first half of 2023. \nThere were 34 new security issuances worth \nN3,829.74 billion, compared with 26 and 31 \nvalued at N1,505.20 billion and N2,090.20 billion, \nin the preceding and corresponding halves of \n2022, respectively. During the review period, \nthere was no initial public offering (IPO), public \noffering, and equity rights issues. There were, \nhowever, two private placements worth N6.40 \nbillion, compared with no private placements in \nthe preceding period and corresponding periods. \nIn the government segment of the primary \nmarket, 24 FGN Bonds worth N3,567.42 billion \nwere \nissued \nand \nallotted \nby \nthe \nDebt \nManagement Office (DMO), compared with 18 \nworth N1,227.47 billion and 15 worth N1,555.70 \nbillion in the preceding and corresponding halves \nof 2022. Eight corporate bonds valued at N255.92 \nbillion compared with 16 valued at N267.73 \nbillion, 10 valued at N410.40 billion, in the \npreceding and corresponding halves of 2022. \n \nFigure 3.4.19: Value of New Issues by Sector \n \nSource: Securities and Exchange Commission (SEC)/Nigerian Stock \n Exchange (NSE) \n \nc. 2+ standard deviations above or below the trend line, indicate severe over or \nundervaluation. \n \n \n44.0\n46.0\n48.0\n50.0\n52.0\n54.0\n56.0\n58.0\n60.0\n62.0\n 46,000\n 48,000\n 50,000\n 52,000\n 54,000\n 56,000\n 58,000\n 60,000\n 62,000\nFirst Half-22\nSecond Half-\n22\nFirst Half-23\nNaira (billion)\nIndex\nAll-Share Index (LHS)\nMarket Capitalisation (RHS)\n93%\n7%\nFGN Bonds\nCorporate Bonds\nSub-national Bonds\nEquities\n \n \n \n \n55 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nInstitutional Savings \nAggregate financial savings rose by 28.6 per cent \nto N40,841.63 billion over N31,868.76 billion at \nend-December 2022, and increased by 42.7 per \ncent over the N28,617.06 billion at end-June \n2022. The ratio of financial savings to GDP rose to \n18.5 per cent over 16.0 and 14.4 per cent at the \nend of the second and first halves of 2022, \nrespectively. This was driven, largely, by robust \ncorporate earnings. Further analysis on financial \nsavings \nshowed \nthat, \nbanks \n(commercial, \nmerchant, and non-interest banks) remained the \ndominant depository institutions in the financial \nsystem. Thus, accounting for 95.3 per cent of total \nfinancial savings, compared with 95.2 and 93.7 \nper cent in the preceding and corresponding \nhalves of 2022, respectively. Other institutions, \ncomprising, \nprimary \nmortgage \nbanks, \nmicrofinance banks, life insurance companies, \npension fund custodians and the Nigeria Social \nInsurance Trust Fund (NSITF), accounted for the \nbalance of 4.8 per cent. \n \n3.4.8 \nDevelopments in Financial System \nStability and Macroprudential Policy \nIn the review period, associated risks and \nvulnerabilities to financial system stability were \ncontained using macroprudential policies. \n \nSolvency Stress Tests and Liquidity Simulations \nStress test conducted revealed that the banking \nindustry remained resilient under mild-to-\nmoderate scenarios of sustained economic and \nfinancial conditions. Though there was a slight \nmoderation in the banking industry’s resilience at \nend-June 2023, relative to the levels at end-\nDecember 2022, the CAR and NPL, were within \nindustry regulatory benchmarks, while LR, at \n44.38 per cent, was above the threshold. The \nbaseline CAR, LR and NPL ratios in the review \nperiod were 11.23, 44.38 and 4.14 per cent, \nrespectively. Return on Asset (ROA) and Return on \nEquity (ROE) stood at 2.3 and 32.2 per cent, \nrespectively. The industry, however, could be \nvulnerable under severe scenarios of sustained \neconomic and financial stress. \n \nTable 3.4.11: Banking Industry Baseline Selected Key \nIndicators for First Half of 2023 \n \nCAR (%) \nLR (%) \nNPLs (%) \nROA \n(%) \nROE \n(%) \nJun 2023 \n11.23 \n44.38 \n4.14 \n2.3 \n32.2 \nDec 2022 \n13.76 \n44.12 \n4.21 \n1.86 \n23.82 \nJun 2022 \n14.1 \n54.2 \n5.0 \n2.0 \n17.3 \nPercentage \nPoint(s) \nChange \n-2.53 \n4.26 \n-0.07 \n0.44 \n8.38 \nBenchmarks \n10.0 - 15.0 \n30 \n5 \n- \n- \nSource: Central Bank of Nigeria. \n \nFigure 3.4.20: Banking Industry CAR in Per cent \n \nSource: Central Bank of Nigeria. \n \nCredit Risk Shocks \nThe impact of general credit risk shock of 10.0, \n15.0, 20.0, 30.0, 50.0 and 100 per cent in NPLs \ncould result in a deterioration of banking industry \nCAR to 10.92, 10.76, 10.61, 10.29, 9.66, and 8.04 \nper cent, respectively, from the baseline position \nof 11.22 per cent in the review period. \n \n \n \n \n \n14.93 14.83 15.46\n14.11 13.76\n11.23\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nDec-20\nJun-21\nDec-21\nJun-22\nDec-22\nJun-23\n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n56 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nTable 3.4.12: Credit Default Shocks on Banking Industry CAR \n in Per cent \nSingle Factor Shocks \nEnd-Dec 2022 \nEnd-June 2023 \nBaseline CAR \n13.76 \n11.23 \nPost-Shock CAR \n10% NPLs increase \n13.44 \n10.92 \n15% NPLs increase \n13.28 \n10.76 \n20% NPLs increase \n13.12 \n10.61 \n30% NPLs increase \n12.81 \n10.29 \n50% NPLs increase \n12.16 \n9.66 \n100% NPLs increase \n10.51 \n8.04 \nSource: Central Bank of Nigeria. \n \nSimilarly, the banking industry’s resilience was \ndemonstrated by the obligor credit concentration \nstress test as CAR remained above the minimum \nregulatory benchmark of 10.0 per cent under all \nthe three scenarios. \n \nTable 3.4.13: Credit Concentration Risk on Banking Industry \n CAR in Per cent \n \nDec-22 \nJun-23 \nBaseline CAR \n13.76 \n11.23 \nSingle Factor Credit Concentration Shocks \n \n \nScenario 1 \n13.43 \n10.68 \nFive largest corporate credit facilities shifted \nfrom pass-through to sub-standard (10%) \nScenario 2 \n12.09 \n9.86 \nFive largest corporate credit facilities shifted \nfrom sub-standard to doubtful (50%) \nScenario 3 \n10.36 \n8.45 \nFive largest corporate credit facilities shifted \nfrom doubtful to lost (100%) \nSource: Central Bank of Nigeria. \n \nFigure 3.4.21: Credit Concentration Risk for First Half 2023 \n In Per cent \n \nSource: Central Bank of Nigeria. \n \nSector Credit Concentration Risk \nIn the review period, analysis of the banking \nindustry’s total credit by sector indicated that: Oil \nand Gas; Manufacturing; General; Government; \nGeneral Commerce; and Finance & Insurance \naccounted for 25.8, 18.4, 8.3, 6.4, 8.0, and 7.6 per \ncent, respectively, while “others” constituted 25.5 \nper cent. \n \nFigure 3.4.22: Sectoral Concentration of Credit in Per cent \n \nSource: Central Bank of Nigeria. \n \nThe result of the stress test of the sector credit \nconcentration indicated that the banking industry \ncould absorb a shock up to 20.00 per cent in \nexposure to oil and gas, with post shock CAR \ndropping to 10.38 per cent, from an initial 11.23 \nper cent. A shock of 50.0 per cent exposure to oil \nand gas sector, could, however, lead to \nvulnerability of 5.66 per cent in the banking \nindustry. \n \nTable 3.4.14: Stress Test on Oil and Gas Exposures for First \nHalf 2023 \n \nIndustry CAR (%) \nBaseline CAR \n11.23 \n20% Default on total exposure to \nOil and Gas \n10.38 \n50% Default on total exposure to \nOil and Gas \n5.7 \nSource: Central Bank of Nigeria. \n \n11.2\n10.7\n9.9\n8.5\n13.8\n13.4\n12.1\n10.1\nBASELINE\nSCENARIO 1 (10%) SCENARIO 2: CREDIT \nFACILITIES SHIFTED \nFROM DOUBTFUL \nTO LOST (50%)\nSCENARIO 3: CREDIT \nFACILITIES SHIFTED \nFROM DOUBTFUL \nTO LOST (100%)\nJun-23\nDec-22\nOil &Gas, \n25.78%\nManufact\nuring, \n18.38%\nGovernment\n, 6.43%\nGeneral, \n8.32%\nGen \nComm, \n7.99%\nFin & Ins, \n7.61%\nOthers, \n25.49%\n \n \n \n \n57 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nInterest Rate Risk \nRising interest rates, the war in Ukraine and \nstructural issues continue to generate spillover \neffects globally, posing significant challenges to \ncountries, including Nigeria. The continued rise in \ninflation rate and the ensuing contractionary \npolicy stance has implications on the cost of credit \nand fixed income assets. Although banks tend to \ngain from higher net income, they suffer losses as \nloan origination declines and default rates rise. \nThe net effect would determine the potential \nimpact on banking industry health and the \nappropriate \nuse \nof \nmicroprudential \nand \nmacroprudential tools. \nIn view of the above, interest rate stress testing \nwas conducted to assess the impact of mild, \nmoderate and severe scenarios on banks’ CAR \nand LR. The results showed that the banks could \nwithstand a shock of 20.0 per cent loss in value of \nbanks holding of FGN bonds under Fair-Value-\nthrough Profit/Loss (FVTPL) and Fair-Value-\nThrough Other Comprehensive Income (FVTOCI), \nas the industry’s post-shock CAR and LR remained \nabove the regulatory thresholds of 10.0 per cent \nand 30 per cent, respectively. \nFigure 3.4.23: Impact of Rise in Interest on CAR via FGN \n Securities (FVTPL & FVTOCI) Holding of Banks \nSource: Central Bank of Nigeria. \n \n \n \n \n \nFigure 3.4.24: Impact of Rise in Interest on LR via FGN \nSecurities (FVTPL & FVTOCI) Holding of Banks \n \nSource: Central Bank of Nigeria. \n \n \nTable 3.4.15: Liquidity Stress Test Results (Post-Shock) \n \nNo of Banks with \nLR < 30% \n \nIndustry LR (%) \n \nDec-22 \nJun-23 \nDec-22 \nShortfall to \n30% LR \nthreshold \nJun-23 \nShortfall \nto 30% LR \nthreshold \n (N’ billion) \n (N’ billion) \nDay 1 \n5 \n9 \n29.56 \n148.83 \n36.06 \n-2,351.13 \nDay 2 \n13 \n16 \n25.29 \n1,519.57 \n31.39 \n-504.02 \nDay 3 \n19 \n19 \n20.84 \n2,794.56 \n26.47 \n1,200.64 \nDay 4 \n23 \n21 \n16.00 \n4,042.96 \n21.09 \n2,841.14 \nDay 5 \n23 \n21 \n10.89 \n5,212.68 \n15.80 \n4,198.56 \nDay 30 \n27 \n24 \n5.95 \n6,165.73 \n9.40 \n5,584.13 \nSource: Central Bank of Nigeria \n \nLiquidity Stress Test \nIn the first half of 2023, Implied Cash Flow Analysis \n(ICFA) and Maturity Mismatch/Rollover Risk \nmethods were used in liquidity stress tests to \ndetermine the resilience of individual banks and \nthe banking industry to funding and liquidity \nshocks. \nThe outcome of the stress test showed that after \na one-day run scenario, the liquidity ratio for the \nindustry declined from 48.38 per cent baseline \nposition to 36.06 per cent. Similarly, under the 5-\nday and 30-day scenarios, the liquidity ratio for \nthe industry declined to 15.80 per cent and 9.40 \nper cent, indicating a liquidity position shortfall of \nN4.20 trillion and N5.58 trillion, respectively. \n \n48.38 \n47.87 \n47.62 \n47.37 \n 46.80\n 47.00\n 47.20\n 47.40\n 47.60\n 47.80\n 48.00\n 48.20\n 48.40\n 48.60\nBaseline/Current\nActual Position\nScneario 1: 10% Fall\nin Value\nScneario 2: 15% Fall\nin Value\nScneario 3: 20% Fall\nin Value\n11.23 \n10.71 \n10.46 \n10.20 \n 9.60\n 9.80\n 10.00\n 10.20\n 10.40\n 10.60\n 10.80\n 11.00\n 11.20\n 11.40\nBaseline/Current\nActual Position\nScneario 1: 10% Fall\nin Value\nScneario 2: 15% Fall\nin Value\nScneario 3: 20% Fall\nin Value\n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n58 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \n Figure 3.4.25: Industry Liquidity Ratios at Periods 1-5 and \ncumulative 30-day Shocks \nSource: Central Bank of Nigeria. \n \nMaturity Mismatch \nThe industry’s baseline assets and liabilities \nmaturity profile at end-June 2023, showed that \nthe shorter end of the market (≤90-day bucket) \nwas adequately funded, showing an excess of \nN18,997.06 billion assets over liabilities. \n \nTable 3.4.16: Maturity Profile of Assets and Liabilities at \nend-June 2023 (Billion Naira) \nBucket \nLiabilities \nAssets \nMismatch \nCumulative \nMismatch \n≤30 days \n49,723.15 \n30,316.69 \n19,406.46 \n19,406.46 \n31-90 \ndays \n4,615.25 \n5,024.65 \n-409.4 \n18,997.06 \n91-180 \ndays \n2,101.23 \n4,206.46 \n-2,105.23 \n16,891.83 \n181-365 \ndays \n2,008.29 \n7,283.89 \n-5,275.60 \n11,616.23 \n1-3 years \n3,147.34 \n7,512.10 \n-4,364.77 \n7,251.46 \n>3 years \n4,220.44 \n17,635.60 \n-\n13,415.16 \n-6,163.70 \nTotal \n65,815.69 \n71,979.39 \n \n \nSource: Central Bank of Nigeria. \n \nThe System-wide Maturity Mismatch Analysis \n(Test 2A) revealed that the banking industry was \nadequately funded, except for above 3-years \nbucket. Under Static Rollover Risk Analysis (Test \n2B) and Dynamic Rollover risk (Test 2C), the \nindustry had mismatches of N11,172.34 billion \nand N13,345.06 billion, respectively. These \nreflected increases of N3,793.17 billion and \nN3,186.55 billion, relative to end-June 2022 tests, \nunder the Test 2B and Test 2C, respectively. \nTable 3.4.17: Test Results for System-wide Maturity \nMismatch at end-June 2023 \n \nTest 2A \nTest 2B \nTest 2C \nDescriptive Maturity \nMismatch. \nStatic Rollover risk \nAnalysis. \nDynamic Rollover risk test. \n(No consideration of \nrollover) \n(No possibility to close \nliquidity gaps in other \nbuckets) \n(Free assets used to close \nliquidity gaps in other \nbuckets) \n \nN’ billion \nNo of \nbanks with \nmismatch \nN’ billion \nNo of \nbanks with \nmismatch \nN’ billion \nNo of \nbanks with \nmismatch \n≤30 \ndays \n27,601.65 \n5 \n17,657.02 \n8 \n688.32 \n8 \n31-90 \ndays \n7,706.92 \n9 \n-1,701.67 \n19 \n-1,290.11 \n9 \n91-\n180days \n6,009.96 \n11 \n-2,525.48 \n25 \n-1,307.00 \n10 \n181-\n365days \n2,919.59 \n17 \n-5,878.09 \n30 \n-1,132.31 \n10 \n1-3 \nYears \n3,756.61 \n20 \n-5,308.97 \n31 \n-1,828.53 \n16 \nAbove 3 \nyears \n-5,219.96 \n28 \n-13,415.16 \n31 \n-8,475.43 \n20 \nTotal \n42,774.77 \n \n-11,127.34 \n-13,345.06 \nSource: Central Bank of Nigeria. \n \nContagion Risk Analysis \nThe contagion risk analysis, using inter-bank \nplacements and takings, depicted a decline in \ninterconnectedness. The total exposure increased \nby 134.71 per cent to ₦1,228.92 billion, \ncompared with the end-December 2022 position. \nFurther analysis revealed that 12 out of 23 banks \naccounted for ₦1,108.94 billion of total \nplacements, while another six banks accounted \nfor ₦874.43 billion of total takings. The exposures \ndid not pose any significant threat to financial \nsystem \nstability, \nas \nall \nplacements \nwere \ncollateralised. \n \n \n \n44.12\n29.56\n25.29\n20.84\n16.00\n10.89\n5.96\n48.38\n36.06\n31.39\n26.47\n21.09\n15.80\n9.40\n0\n5\n10\n15\n20\n25\n30\n35\n40\n45\n50\n55\n60\nPre -Shock\nAfter Day 1\nAfter Day 2\nAfter Day 3\nAfter Day 4\nAfter Day 5 After cum day\n30\nDec-22\nJun-23\n \n \n \n \n59 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.4.26: Network Analysis based on Interbank \n Exposures \n \n \nSource: Central Bank of Nigeria. \n \n \nCredit Risk Management System \nThe \nimplementation \nof \nthe \nCredit \nRisk \nManagement System (CRMS) 12 continued to \nstrengthen credit administration in Nigeria. The \nCBN CRMS database continued to serve as a \nviable source of credit information in the Nigerian \nbanking industry. The number of credit facilities \non the CRMS database increased by 13.3 per cent \nto 49,060,977 at end-June 2023 over the \n43,320,180 recorded at end-December 2022, due \nto increased credit by banks. The number of \ncredit/facilities reported on the CRMS database \ncomprised 47,918,185 individuals and 1,142,792 \nnon-individuals. \n \n \n \n \n \n \n \n12 The CRMS is a regulatory tool designed to capture credit records \nand mitigate credit risk in the banking system \nTable 3.4.18 Borrowers from the Banking Sector \n(Commercial, Merchant and Non-Interest Banks) \nSource: Central Bank of Nigeria \nThe total number of credit/facilities with \noutstanding balances on the CRMS database \nincreased by 33.1 per cent to 12,744,856 at end-\nJune 2023 from 9,579,073 at end-December \n2022. This comprised 12,566,218 individuals and \n178,638 non-individuals. \n \nPrivate Credit Bureaux \nThe number of licensed credit bureaux remained \nthree (3) at end-June 2023, same as in the \npreceding and corresponding period of 2022. The \naverage number of uniquely identified credit \nrecords in the database of these three credit \nbureaux at end-June 2023 stood at 56.87 million, \na decrease of 20.72 million, compared with 77.59 \nmillion at end-December 2022. The decrease was \nattributed mainly to a reduced appetite for \nborrowing in view of market uncertainties and \npolitical changes. \nTable 3.4.19: Credit Records in the Databases of the Bureaux at \nend-June 2022 \nS/N \nComponent \nCRC Credit \nBureau Ltd \nCR Services \nCredit \nBureau Plc \nFirst \nCentral \nCredit \nBureau Ltd \n1 \nNumber of \ncredit records \n88,864,944 \n941,180 \n80,816,616 \n2 \nValue of \nCredit \nFacilities \n(N’ Trillion) \n50.35 \n44.13 \n40.76 \n3 \nNumber of \nborrowers \n34,937,835 \n17,989,074 \n23,389,390 \n4 \nNumber of \nsubscribers \n1,793 \n739 \n1,564 \nSource: Central Bank of Nigeria. \nNode colour representation\nBlue\n= Lenders,\nDeep Blue= Net Placement\nRed\n= Borrowers\nPurple= Net Takings\nDescription \n \nEnd-Dec \n2022 \n \nEnd-Jun \n2023 \n \nChange \nChange \n(%) \n \n* Total No. of \nCredit/facilities \nreported on \nthe CRMS: \n43,320,180 \n49,060,977 \n5,740,797 \n 13.25 \nIndividuals \n42,227,560 \n47,918,185 \n5,690,625 \n 13.48 \nNon-\nIndividuals \n1,092,620 \n1,142,792 \n 50,172 \n 4.59 \n* Total No. of \nOutstanding \nCredit facilities \non the CRMS: \n9,579,073 \n12,744,856 \n3,165,783 \n 33.05 \nIndividuals \n9,426,343 \n12,566,218 \n3,139,875 \n 33.31 \nNon-\nIndividuals \n152,730 \n178,638 \n25,908 \n 16.96 \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n60\n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nHowever, the average number of subscribers in \nthe database of the credit bureaux increased to \n1,365 at end-June, 2023, over 1,316 at end-\nDecember, 2022. The annual onsite routine \nexamination of the three credit bureaux as at \nDecember 31, 2022 commenced in June 2023. \n \n3.4.9 \nDevelopments in Regulatory Compliance \n& Consumer Protection \n \nFinancial Sector Surveillance \nDuring the first half of 2023, the Bank sustained its \nregulatory and supervisory oversight of the \ninstitutions under its purview, towards promoting \na safe, stable, and sound financial system. This \nwas performed through offsite surveillance and \nonsite examination, as well as the issuance of \nrelevant guidelines to banks and other financial \ninstitutions. \nSequel to the commencement of the parallel run \nof the Basel II and III Guidelines in November \n2021, banks reported their CAR computation \nusing both the extant Basel II template and the \nnew Basel III template for concurrent review by \nthe CBN. Adjustments were made to the five (5) \nBasel III CBN Reporting Templates based on the \nfeedback and gaps observed during the parallel \nrun. \nFinancial \nCrimes \nSurveillance/Anti-Money \nLaundering/Combating the Financing of Terrorism \nand \nCountering \nProliferation \nFinancing \n(AML/CFT/CPF) \nNigeria made some progress on most of the \nMutual Evaluation Report’s (MER) recommended \nactions by Financial Action Task Force (FATF), \nwhich included: improving its AML/CFT/CPF \nlegislative framework; updating its assessment of \ninherent ML/TF/PF risks; and strengthening its \nimplementation of targeted financial sanctions. A \nsubsequent evaluation of the actions taken by \nNigeria was reviewed at the February 2023 \nmeeting \nof \nFinancial \nAction \nTask \nForce \nInternational Cooperation and Review Group \n(FATF/ICRG). In that review, some outstanding \ndeficiencies were noted for consideration by the \nNigerian authorities, of which the activities to \nimplement FATF’s action plan on Nigeria were \nongoing. \nTo strengthen the existing AML/CFT/CPF regime, \nthe Bank undertook the following activities during \nthe first half of 2023: \n• \nRoutine \nRisk-Based \nAML/CFT/CPF \nExamination of 19 banks with “Above \nAverage” rating. The examination was \nconducted to ensure that the banking system \nand financial system were not used for \nmoney laundering, terrorism financing and \nthe financing of proliferation of weapons of \nmass destruction; \n• \nIn-house AML/CFT/CPF training on: Politically \nExposed Persons (PEPs) spot check; PEPs \nreturn appraisals; and AML/CFT/CPF RBS \ncross border examination, among others. \nStaff of the Bank also participated in training \noutreach to banks and other financial \ninstitutions. Similarly, in-house training for all \nExaminers \non \nissues \nconcerning \nAML/CFT/CPF was conducted; \n• \nTarget examination of Politically Exposed \nPersons (PEPs) in June 2023 based on Risk-\nBased Approach (RBA). The examination \nfocused on 15 banks with previous ratings of \nLow or Moderate Effectiveness, four (4) new \nbanks and five (5) new Payment Service \nBanks that have not been assessed before; \n• \nOn-site \nAML/CFT/CPF \ncross-border \nexaminations \nin \n2023. \nDuring \nthe \n \n \n \n \n61 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nexamination, six Nigerian banks foreign \nsubsidiaries were visited, namely, FBN UK, GT \nBank UK, Zenith Bank UK, Access Bank South \nAfrica, UBA Liberia, and UBA Kenya in June \n2023. The examinations were conducted to \nassess the subsidiaries’ compliance with the \nCBN AML/CFT/CPF regulations, 2022 in \nregards to their host country AML/CFT/CPF \nlaws and regulations; and \n• \nTraining \nand \nengagement \nwith \nChief \nCompliance Officers of banks to remediate \none of the MER recommended actions that \nrequired \nsupervisors \nto \nhave \nregular \nstakeholders’ engagement. Members of the \nAssociation of Chief Compliance Officers of \nBanks in Nigeria (ACCOBIN) were trained on \nissues of mutual concern and interest. \nCompliance \nwith \nthe \nCode \nof \nCorporate \nGovernance \nCorporate Governance Compliance Scorecard \nAssessment was conducted on eight (8) selected \nbanks using the risk-based approach (RBA), to \nascertain the level of compliance with the CBN \nCode of Corporate Governance for Banks and \nDiscount Houses, 2014. The assessment was \nbased on the following pillars of corporate \ngovernance: Board and Management; Ethics and \nProfessionalism; Treatment of Shareholders; \nRights of other Stakeholders; Disclosure; and \nTransparency. \nThe result of the examination showed that all the \neight banks were rated “Acceptable”, and largely \ncompliant with the CBN Code of Corporate \nGovernance. The examination noted two (2) \nsignificant observations that were not in \ncompliance with extant code of corporate \ngovernance. First, two (2) banks failed to obtain \nCBN approval for investors, who held above 5.0 \nper cent shareholdings, contrary to Section 3.2.1 \nof the Code, which required that “an equity \nholding of 5 per cent and above by any investor \nshall be subject to CBN’s prior approval”. Second, \ntwo banks were also found to have failed to \nengage External Auditors to review the banks’ Risk \nManagement Practices as required by the \nprovisions of Section 6.1.9 of the CBN Code that \n“External Auditors shall render annually, reports \non the bank’s risk management practices to the \nCBN”. Consequently, the four (4) banks were \nsanctioned for the infractions. \nConsumer Protection \nIn furtherance of its statutory responsibility to \npromote confidence in the financial system, the \nBank sustained the implementation of measures \nto ensure consumer protection, mainly in the form \nof customer complaints management. The Bank \nreceived 3,490 complaints from consumers of \nfinancial services in the first half of 2023, \nindicating an increase of 27.5 and 43.5 per cent \nabove the levels in second half of 2022 and the \ncorresponding half of 2022, respectively. \n \nFigure 3.4.27: Complaints Received in the First Half of 2023 \nSource: Central Bank of Nigeria. \n \nA total of 3,051 complaints, including those \noutstanding from 2022, were resolved in the \nreview period, indicating 95.5 and 117.0 per cent \nincreases, compared with the 1,561 and 1,406 \ncomplaints resolved in the preceding and \ncorresponding periods of 2022, respectively. \n \n2,432 \n2,738 \n3,490 \n -\n 500\n 1,000\n 1,500\n 2,000\n 2,500\n 3,000\n 3,500\n 4,000\n1st Half, 2022\n2nd Half, 2022\n1st Half, 2023\nNumber Of Complaints\n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n62 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.4.28: Complaints Resolved in the First Half of 2023 \n Source: Central Bank of Nigeria \n \nIn the review period, total claims in local and \nforeign currencies amounted to N31.30 billion \nand US$24,992.05, respectively, compared with \nN1.90 billion and US$105,830.49 claimed in the \npreceding period of 2022 and N8.1 billion and \nUS$11,283.93 in the corresponding period of \n2022. There was an increase of 1,547.4 per cent \nin local currency claims, in contrast to a decrease \nof 76.4 per cent in foreign currency claims, \ncompared with the levels in the preceding period. \n \nFigure 3.4.29a: Total Claims in the First half of 2023 (N) \n \nSource: Central Bank of Nigeria \nFigure 3.4.29b: Total Consumer Claims in the First Half \n of 2023 (US$) \n \nSource: Central Bank of Nigeria \nThe sums of N15.6 billion and US$25,246.52 were \nrefunded, compared with the N1.5 billion and \nUS$18,691.50 refunded in the second half of 2022 \nand N3.4 billion and US$31,580.41 refunded in \nthe first half of 2022. This indicated an increase of \n4.7 and 35.0 per cent in local and foreign currency \nrefunded to consumers of financial services, \nrespectively, relative to the levels in the preceding \nperiod. \nFigure 3.4.30a: Total refunds in the First Half of 2023 \n (N’ Billion) \n \nSource: Central Bank of Nigeria \n \n \nN8.1 \nBillion\nN1.9 \nBillion\nN31.3 \nBillion\n1st Half, 2022\n2nd Half, 2022\n1st Half, 2023\nUS$24,992.\n05\nUS$105,830.49\nUS$11,283.93\nN3.4 \nBillion\nN1.5 \nBillion\nN15.6 \nBillion\n1st Half, 2022\n2nd Half, 2022\n1st Half, 2023\n1,406\n1,561\n3,051\n0\n500\n1,000\n1,500\n2,000\n2,500\n3,000\n3,500\n1st Half, 2022\n2nd Half, 2022\n1st Half, 2023\nNumber of Complaints \n \n \n \n \n63 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nFigure 3.4.30b: Total refunds in the First Half of 2023 \n (US$) \n \nSource: Central Bank of Nigeria \n \nThe Consumer Complaints Management System \n(CCMS) is a web-based solution designed to \nenable \ncustomers \nmonitor \nthe \nstatus \nof \ncomplaints already logged with their respective \nbanks, as well as address the cumbersome nature \nof the manual system of complaints management \nin the banking industry. \nThe redesign of the CCMS was concluded in the \nfirst half of 2023 to enhance its efficiency and \nimprove interface with the banking public, \nthrough the public portal. The portal will provide \na platform for consumers of financial service to \nescalate to the CBN complaints that were neither \nresolved nor satisfactorily treated by their banks. \nThe Bank also reviewed the draft Framework for \nRegistration of Trademarks and Patent Rights of \nthe Bank's Proprietary Properties and the \nConsumer Protection Framework (CPF). \n \nConsumer Education Initiatives. \nThe CBN implemented the 2023 Global Money \nWeek (GMW) in collaboration with the Junior \nAchievers \nof \nNigeria \n(JAN) \nand \nBankers \nCommittee. The 11th edition of the GMW was held \n20 – 26 March 2023 with the theme \"Plan your \nMoney, Plant your Future\". To commemorate the \nevent, the CBN, Bankers Committee, and other \nstakeholders mentored over 600 secondary \nschool students across 8 schools selected from \nthe six geo-political zones of the country. The \nstudents were educated on the importance of \nsavings, budgeting, investing etc. Other activities \ncovered included financial literacy rally with \nchildren and youth, tour of the Nigerian Exchange \nLimited (NGX) for the students, financial literacy \nfair at the CBN Head Office and essay \ncompetitions in selected schools. \nSimilarly, in April 2023, the Bank organised a \nwebinar with the theme, “Digital Financial \nServices: the Way Forward” as part of the effort \nto improve the level of financial literacy among \nstaff. The webinar focused on raising awareness \non the need to embrace Digital Financial Services \n(DFS) and to mitigate against fraud and other \nchallenges inherent in the use of Digital Financial \nServices. \nThe Bank continued with the implementation of \nperiodic nationwide media engagements to raise \nawareness \non \nthe \nBank’s \nconsumer \nprotection/financial literacy initiatives, leveraging \non the Bank’s dedicated media channels (radio \nstations, \nsocial \nmedia, \netc.). \nThe \nmedia \nengagement was to enlighten the public on the \nSabiMONI financial literacy e-learning platform; \nthe Naira redesign policy; cash withdrawal limit; \ne-Naira etc. \nThe SabiMONI e-Learning portal was launched on \n15 May 2023. It was developed to improve the \nfinancial literacy level among consumers of \nfinancial products and services. This, in turn, \nwould facilitate the attainment of the target of \n95.0 per cent financial inclusion rate by 2024 in \nNigeria. A total of 557 participants (401 Male and \n156 Female) were on-boarded onto the platform \non the day of the launch. The focus was to \nincrease user adoption. \nAs part of its effortto conduct Monitoring and \nEvaluation (M&E) of Consumer Protection \ninitiatives and upskill staff in the areas of M&E and \nConsumer Research, the Bank commenced the \nUS$25,246.52\nUS$18,691.50\nUS$31,580.41\n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n64\n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \ndevelopment of a Monitoring and Evaluation \nframework \nand \nestablished \na \nConsumer \nProtection Embedded Laboratory in collaboration \nwith Innovation for Poverty Action (IPA). The \ndiagnostic phase of the project had been \nconcluded. \nThe Bank developed a USSD/SMS Short code to \nserve as an avenue for consumers to: verify the \nlicensing status of financial institutions regulated \nby the Bank; and access other financial \ninformation services. The service was accessible \nby MTN, Airtel and 9Mobile users via *959#, while \nefforts were still ongoing towards connecting \nother mobile network providers to the platform. \n \n• \nNigeria Sustainable Banking Principles \nThe \nBank \ncontinued \nto \nmonitor \nthe \nimplementation of the Nigeria Sustainable \nBanking Principles (NSBPs) at individual bank and \nindustry levels. In that regard, the Bank received \nand reviewed semi-annual reports from banks for \nthe period ended December 2022, in line with the \nreporting template issued to the industry via a \ncircular captioned “Reporting Template for the \nNigeria Sustainable Banking Principles”. \nThe review assessed progress made by banks in \nthe implementation of the NSBPs in line with the \nrequirements of the Guidance Note issued to the \nindustry in 2012. Subsequent to the review, banks \nwere advised to improve on areas of weakness to \nfurther deepen the implementation of the NSBPs, \nincluding the enhancement of environmental and \nsocial \n(E&S) \nrisk \nmanagement \npractices, \ndeployment of measures to reduce carbon \nfootprints from operations, E&S assessment of \nthird-party vendors, building the capacity of \nemployees, among others. \nProgress in compliance and implementation were \nfurther assessed during routine Risk-Based \nSupervision Examinations and onsite assessment \nof E&S Implementation. \nThe NSBPs were being reviewed to reflect \nemerging issues and global imperatives. The \nreview would also include aligning the Principles \nwith \nNigeria’s \nNationally \nDetermined \nContributions (NDCs) under the Paris Climate \nAgreement. \nThe CBN continued to provide appropriate \nintervention to help resolve the challenges \nhindering the implementation, as well as offer an \nobjective, fair and equitable basis for possible \nincentives. \nThe \nBank \nattended \nvarious \nstakeholder \nengagements \non \nsustainable \nbanking \nand \nestablished an in-house Sustainability Steering \nCommittee to coordinate the implementation of \nsustainability issues including the NSBPs. \n• \nAsset Management Corporation of \nNigeria \nThe annual Routine Examination of the Asset \nManagement Corporation of Nigeria as at 31 \nDecember 2022, held in the first quarter of 2023. \nThe examination focused on the review of the \nCorporation’s operations from October 1, 2021, \nto December 31, 2022 and the scope covered \ncorporate governance, strategic planning, loan \nadministration and management of Eligible Bank \nAssets (EBA), enforcement processes and Assets \nUnder Management. Others were the financial \nposition, third party Service Providers, validation \nof collaterals, compliance with the AMCON Act \n2010 (as amended in 2015, 2019 and 2021), its \nOperating Guidelines, other relevant extant laws \nand regulatory directives. \n \nFrom inception of its operations to June 30, 2023, \nthe Corporation has achieved a total recovery of \nN1,801.00 billion, made up of cash recovery of \n \n \n \n \n65 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nN971.33 billion and other collections (property \nsale, share sales, rental income, dividend income \nand re-investment income) of N829.73 billion. In \nthe first half of 2023, the Corporation achieved \ncash recoveries of N45.83 billion and other \ncollections of N15.16 billion. \nThe carrying value of AMCON’s liabilities \nincreased to N5,865.00 billion at end-June 2023, \nover the N5,599.00 billion at end-December 2022 \n(unaudited) and N5,715.00 billion at end-June \n2022, representing an increase of 4.6 and 2.6 per \ncent, respectively. The carrying value of the \nAMCON Note remained at N3,859.00 billion at \nend-June 2023, while the sum of N500.00 billion \nLoan plus accrued interest of N15.00 billion was \nfully repaid by AMCON on January 31, 2023. The \nAMCON Note is scheduled for redemption on \nDecember 27, 2023. The Corporation’s total \nassets net of impairment stood at N1,171.00 \ntrillion at end-June 2023, compared with N989.89 \nbillion \nrecorded \nat \nend-December \n2022 \n(unaudited) and N896.49 billion at end-June 2022, \nrepresenting an increase of 18.2 and 30.7 per \ncent, respectively. \nContributions to the Banking Sector Resolution \nCost Fund (BSRCF) by the CBN and other \nparticipating banks for the year 2023 amounted \nto N417.00 billion. The collection is invested in \nprimary issuance of Nigeria Treasury Bills pending \nutilisation by AMCON in meeting its obligations on \nissued securities in line with Section 60E (1)(a) of \nthe AMCON amendment Act 2015. \n \n3.5 \nPAYMENTS SYSTEM MANAGEMENT \nThe Bank under the Nigeria Payments System \nVision 2025 (PSV2025) continued to introduce \ninnovative measures to strengthen the payment \nsystem landscape to further deepen digital \nfinancial \ninclusion \nand \nenhance \nfinancial \nintermediation to support inclusive growth. \n \n3.5.1 Payments System Policies \nThe Bank continued to strengthen the payments \necosystem with the introduction of two \ninnovative regulatory measures, namely, the \nOperational Guidelines for Open Banking in \nNigeria and the Guidelines for Contactless \nPayments in Nigeria. These innovations aimed at \nguaranteeing the safety, and stability of the \npayments infrastructure, while fostering an \nenvironment that promotes interoperability. \n \nOperational Guidelines for Open Banking in \nNigeria \nOperational guidelines on open banking were \nissued in March 2023, with the objective of \nestablishing the principles for data sharing across \nthe banking and payments ecosystem. It \nstipulates data and Application Programming \nInterface (API) access requirements, design, and \ninformation security specifications between \nbanks and third-party financial service providers \n(FSPs) with the customer's consent. The \nguidelines provide an Open Banking Registry \n(OBR) for regulatory oversight of participants to \nenhance transparency in the operations of open \nbanking, \nimprove \naccessibility \nto \nfinancial \nservices, promote innovation, and create new \nopportunities for businesses and consumers. \n \nGuidelines for Contactless Payments in Nigeria \n The guidelines were issued in June 2023, \nspecifying minimum standards and requirements \nfor the operation of contactless payments, the \nroles and responsibilities of stakeholders, and \nsanctions/penalties. \nHence, \nthe \nguidelines \nrequire: \ni. \nA \nmaximum \ntransaction \nlimit \nof \n₦15,000.00 \nper \ntransaction \nand \n₦50,000.00 per day for contactless \npayments without Personal Identification \nNumber (PIN) or biometric verification; \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n66\n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nii. \nAll contactless devices to be connected to \nan account or wallet that has a Bank \nVerification Number (BVN); \niii. \nMerchants to conduct proper Know Your \nCustomer (KYC) checks on all customers \nwho make contactless payments; and \niv. \nThat contactless readers are properly \nconfigured and maintained. \n \n \nPayments System Infrastructure \nEnrolment and linkage of the existing accounts to \nthe Bank Verification Number (BVN) increased \nagainst the backdrop of innovative payments \nsystem infrastructure. At end-June 2023, the \nnumber of bank customers enrolled on the BVN \nplatform was 57.99 million. This represented an \nincrease of 2.56 per cent over the 56.51 million \nenrolled in the preceding half of 2022 and a 5.78 \nper cent rise from the 54.65 million enrolled in the \ncorresponding period. A total of 154.05 million \nbank accounts were linked with BVN compared \nwith 127.91 million and 130.56 million in the \npreceding and corresponding halves of 2022, \nrespectively. The total number of active bank \naccounts in the banking industry rose to 182.01 \nmillion, above 159.42 million accounts in the \nsecond half of 2022. \n \nFurthermore, the number of BVN placed on \nWatch-list for Fraudulent and Deceased, during \nthe first half of 2023 were 7,709 and 15,027 \nrespectively, \nunderscoring \nthe \nBank's \ncommitment to ensuring vigilance and security \nwithin the financial system. \n \nTable 3.5.1: BVN Statistics \n \nEnd-Jun. \n2022 \nEnd-Dec. \n2022 \nEnd-Jun. \n2023 \nBVN enrolment \n54,651,086 \n56,513,499 \n57,990,304 \nAccounts linked with \nBVN \n130,569,656 \n127,916,574 \n154,053,756 \nActive Accounts \n148,462,947 \n159,421,664 \n182,013,156 \nBVN on Watchlist \n(Fraudulent) \n6,047 \n7,353 \n7,709 \nBVN on Watchlist \n(Deceased) \n11,871 \n13,743 \n15,027 \nSource: Central Bank of Nigeria. \n \nPayments System Strategy \nThe PSV2025 strategy remains the overarching \nroadmap for the implementation of a nationally \nutilised and internationally recognised payments \necosystem in Nigeria. The PSV2025 strategy \ndocument is an essential roadmap, strategically \ndesigned to accommodate emerging initiatives \nand innovations within the payments landscape. \nThe strategy provides a conducive environment \nand offers enhanced momentum for the \nintroduction of novel products, innovative \nbusiness models, and increased participation \nacross the payment ecosystem. \nBox 4 \nContactless payment \nContactless payment refers to a payment method that \nenables customers to conduct financial transactions \nwithout the necessity of physical contact between their \npayment instruments, such as contactless-enabled \ncredit or debit cards, wearable devices, or mobile \nphones, and the point-of-sale (POS) terminal. \n \nIt \nrelies \non \nnear-field \ncommunication \n(NFC) \ntechnology, allowing for secure and rapid wireless data \nexchange between the payment instrument and the \nPOS terminal when they are in proximity. The absence \nof physical interaction streamlines the payment \nprocess, resulting in reduced transaction time and \nenhanced customer convenience. \n \n \n \n \n67 \n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nSupervision and Regulation \nThe Bank increased the licensing of Payments \nSystem Providers (PSPs) in the first half of 2023 to \nstrengthen financial services penetration and \naccommodate new entrants in the Nigerian \nelectronic payment space. The number of licensed \nPSPs increased significantly to 213 above 132 and \n116 in the preceding and corresponding halves of \n2022, respectively. Further analysis showed that \nthe Bank issued one new licence for Card Scheme, \none for Switching and Processing, 35 for \nPayments Solution Service Providers (PSSPs), 19 \nfor Payments Terminal Service Providers (PTSPs), \nand 24 for Super Agents (SAs). However, the \nnumber of Mobile Money Operators (MMOs) \nremained 17 compared with the preceding half of \n2022 but grew from 16 in the corresponding half \nof 2022. \n \nImplementation of Nigeria Cheque Standard and \nNigeria Cheque Printers Accreditation Scheme \nVersion 2.0. \nIn the review period, the Bank conducted both \naccreditation and compliance exercises for \nCheque Printers and Personalisers in compliance \nwith the provisions of the Nigeria Cheque \nStandards (NCS) and the Nigeria Cheque Printers \nAccreditation Scheme (NICPAS) Version 2.0. At \nend-June 2023, there were six (6) existing Cheque \nPrinters, of which the Bank renewed the licences \nof three: Papi Printing Company Limited, \nMarvelous Mike Press Limited and KAS Arts \nServices Limited, while the other three: Superflux \nInternational Limited, Tripple Gee Co. Ltd. and \nYaliam Press Limited, had subsisting licences. \nSimilarly, the licences of seven Personalisers, \nnamely, Zenith Bank Plc, Ecobank Plc, Stanbic IBTC \nBank Plc, First Bank Plc, Keystone Bank Plc, Wema \nBank Plc and Providus Bank Plc, were renewed. \nFurthermore, the Bank issued a circular on the \nRevised Nigeria Cheque Standard (NCS) and \nNigeria Cheque Printers Accreditation Scheme \n(NICPAS) directing DMBs to ensure that the use of \nold cheques for any form of transaction and \nsettlement ceased to be acceptable by 31 \nDecember 2023. \nTable 3.5.2: Licensed Payments System Participants \n \nLicense -Type \nNumber \nJune \n2022 \nDec. \n2022 \nJune \n2023 \nCard Schemes \n7 \n7 \n8 \nSwitching and Processing \n13 \n16 \n17 \nMobile Money Operators* \n16 \n17 \n17 \nPayment \nSolution \nService \nProviders \n39 \n42 \n77 \nPayment \nTerminal \nService \nProviders \n19 \n19 \n38 \nSuper Agents \n20 \n26 \n50 \nAccredited Cheque Printers \n2 \n5 \n6 \nTotal \n116 \n132 \n213 \nSource: Central Bank of Nigeria. \n*The data shown is for Non-Bank Licensed Mobile Money \nOperators. \n** n.a – Not applicable with new licence categorization. \n \n3.5.2 Trends in the Payments System \nElectronic payments increased on account of the \nBank’s policies to enhance the efficiency of the \npayments system. During the review period, \nelectronic payments (e-payments) witnessed \nnotable growth in both the volume and value of \ntransactions. \nThe \nretail \ne-payments \nand \nwholesale e-payments increased in both volume \nand value. The surge in retail e-payments was \nattributed \nto \nthe \nincreased \nadoption \nof \ntechnology and the Internet, which facilitated \nmore accessible avenues for online financial \nservices. Furthermore, the Bank's unwavering \ncommitment to fostering a cashless economy and \nthe currency re-design policy in the first quarter \nof 2023 encouraged the use of electronic \npayment methods. \nAnalysis of electronic payments showed that the \nvolume of total e-payments rose significantly by \n62.5 per cent to 19,532.94 million transactions in \nthe first half of 2023, compared with 12,020.52 \nmillion in the second half, and by 94.3 per cent \nabove 10,053.47 million in the first half of 2022. \nIn value terms, e-payments increased by 25.8 per \ncent to ₦983.73 trillion, above ₦782.29 trillion in \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n68\n \nThis document is for CBN internal consumption \nThis document is for CBN internal consumption \nthe second half of 2022, and by 33.3 per cent over \nthe ₦737.95 trillion in the first half of 2022. The \nrise was attributed to the increased adoption and \nutilisation of various electronic channels as \npreferred means of payments. \n3.5.2.1 Retail Payments System \nTransactions in retail e-payments in the first half \nof 2023 increased significantly in both volume and \nvalue, attributed to the shifting consumer \npreference towards e-transactions and growth in \ne-commerce. At 19,532.79 million, the volume of \ntransactions rose by 62.5 per cent and 94.3 per \ncent above the 12,020.38 million and 10,053.32 \nmillion in the second and first halves of 2022, \nrespectively. A breakdown of the volume of \ntransactions across e-payment channels in the \nfirst half of 2023 showed significant increases \nover the levels in the corresponding half of 2022. \nInternet/web increased by 74.5 per cent; Point of \nSales (POS), 184.9 per cent; Mobile App, 190.1 \nper cent; Unstructured Supplementary Service \nData (USSD), 38.7 per cent; National Electronic \nFunds Transfer (NEFT), 23.6 per cent; and Direct \nDebit, 109.4 per cent, to 11,321.44 million, \n4,872.27 million, 2,330.34 million, 370.29 million, \n48.83 million and 72.10 million, respectively. \nATM transactions, however, declined by 27.0 per \ncent to 519.52 million. Relative to the second half \nof 2022, transactions via the internet/web, POS, \nMobile App, and Unstructured Supplementary \nService Data (USSD) increased by 49.4, 124.0, \n120.2, and 48.7 per cent, respectively, while NEFT \nand Direct Debit transactions decreased by 0.3 \nand 38.1 per cent, respectively. \nThe total value of transactions increased to \n₦932.39 trillion in the first half of 2023, signifying \na growth of 25.1 and 33.0 per cent over the levels \nin the preceding and corresponding halves of \n2022, respectively. A breakdown of the value of \ntransactions across e-payment channels in the \nfirst half of 2023 showed significant increases over \nthe levels in the corresponding half of 2022. \nInternet/web increased by 32.7 per cent; Point of \nSales (POS), 207.4 per cent; Mobile App, 88.8 per \ncent; Unstructured Supplementary Service Data \n(USSD), 19.8 per cent; National Electronic Funds \nTransfer (NEFT), 14.2 per cent; and ATM, 15.7 per \ncent, to 462.17 trillion, 48.44 trillion, 97.05 trillion, \n2.72 trillion, 298.13 trillion and 14.63 trillion, \nrespectively. Direct Debit, however, declined by \n5.1 per cent to 9.25 trillion. Relative to the second \nhalf of 2022, transactions via the internet/web, \nPOS, Mobile App, USSD and NEFT increased by \n6.2, 91.7, 62.5, 22.5, and 60.0 per cent \nrespectively, while ATM and Direct Debit \ntransactions decreased by 26.3 and 44.4 per cent, \nrespectively. \nAnalysis of the components of the retail e-\npayments segment showed that the internet/web \nchannel dominated all other channels, accounting \nfor 58.0 per cent of the total volume and 49.6 per \ncent of the total value in the review period. The \ncomposition of e-payments transactions by \nvolume revealed that, POS, Mobile App, ATMs, \nNEFT, USSD and Direct Debit channels constituted \n24.9, 11.9, 2.7, 0.2, 1.9, and 0.4 per cent \nrespectively of the total e-payment transactions. \nIn value terms, PoS, Mobile App, ATMs, NEFT, \nUSSD and Direct Debit channels constituted 5.2, \n10.4, 1.6, 32.0, 0.3, and 1.0 per cent of the total \ne-payment transactions in the first half of 2023. \nFigure 3.5.1: Composition of e-Payments Transactions by \nVolume, First Half 2023 in Per cent \n Source: Central Bank of Nigeria \nATM\n2.7%\nPOS\n24.9%\nInternet/Web\n58.0%\nNEFT\n0.2%\nUSSD\n1.9%\nMobile App\n11.9%\nDirect Debits\n0.4%\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n69 \n \nThis document is for CBN internal consumption \nAt end-June 2023, the number of ATM terminals \nstood at 19,490, compared with 19,433 and \n19,392 terminals at end-December 2022 and \nend-June 2022, respectively. The number of \nconnected \nPoint-of-Sale \n(POS) \nterminals \nincreased to 2.29 million above 1.66 million at \nend- December 2022 and 1.29 million at end- \nJune 2022. Similarly, the number of agents \nincreased to 1,669,487 above 1,474,173 and \n1,204,423 at end-December 2022 and end-June \n2022, respectively. \n \nFigure 3.5.2: Share of e-Payments Transactions by Value \nFirst Half 2023 in Per cent \n Source: Central Bank of Nigeria \n \nThe volume and value of cheque transactions \ndecreased in the review period due to the uptake \nof e-payment channels in settling transactions. \nAt 6.9 million, the volume of cheque \ntransactions decreased by 25.0 and 17.8 per \ncent below 9.2 million and 8.4 million in the \nsecond and first halves of 2022, respectively. \nSimilarly, at N6,969.9 trillion in the first half of \n2023, the value of cheque transactions \ndecreased by 10.2 and 6.9 per cent, below \nN7,764.5 trillion and N7,486.7 trillion in the \nsecond and first halves of 2022, respectively. \nIn the first half of 2023, the volume and value of \npayment services offered by MMOs through their \nagent touchpoints increased significantly. The \nvolume of transactions increased to 5,128 \nmillion, above 1,480.99 million and 445.3 million \nin the second and first halves of 2022, \nrespectively. Similarly, the value of transactions \nincreased to N42.25 trillion, compared with \nN23.01 trillion and N9.58 trillion in the second \nand first halves of 2022. These developments \nwere attributed to the increased onboarding of \nagents, a crucial driver for advancing financial \ninclusion. \n \n3.5.2.2 Wholesale Payments System \nThe volume and value of transactions in the \nwholesale \npayments \n(Real \nTime \nGross \nSettlement (RTGS)) system increased in the first \nhalf of 2023. The volume of inter-bank fund \ntransfers through the RTGS increased by 4.3 per \ncent to 145,190 in the first half of 2023 above \n139,181 in the preceding half of 2022, but fell by \n2.6 per cent below 149,035 in the corresponding \nhalf of 2022. At N51,341.43 billion, the value of \ntransactions increased by 39.1 and 39.5 per cent \nabove N36,913.89 billion and N36,792.58 billion \nin the preceding and corresponding halves of \n2022, respectively. \n \nFigure 3.5.3. Volume of Inter-bank RTGS Transactions \n Source: Central Bank of Nigeria \nATM\n1.6%\nPos\n5.2%\nInternet/We\nb\n49.6%\nNEFT\n32.0%\nUSSD\n0.3%\nMobile App\n10.4%\nDirect \nDebits\n1.0%\n149,035.0 \n139,181.0 \n145,190.0 \n134,000.0 \n136,000.0 \n138,000.0 \n140,000.0 \n142,000.0 \n144,000.0 \n146,000.0 \n148,000.0 \n150,000.0 \nFirst Half 2022\nSecond Half 2022\nFirst Half 2023\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n70 \n \nThis document is for CBN internal consumption \nFigure 3.5.4: Value of Inter-bank RTGS Transactions \n (N’ Billion) \nSource Central Bank of Nigeria \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTable 3.5.3: Volume and Value of Electronic Payments and Other Channels \nPayment \nChannels \nNumber of Terminals \n Volume of Transactions (Million) \n Value of Transaction N'Trillion \nJun-22 \nDec-22 \nJun-23 \nJun-22 \nDec-22 \nJun-23 \nJun-22 \nDec-22 \nJun-23 \nATM \n 19,392 \n 19,433 \n 19,490 \n711.71 \n795.29 \n519.52 \n12.64 \n19.84 \n14.63 \nPOS \n 1,299,738 \n 1,665,664 \n 2,292,561 \n1,710.29 \n2,175.51 \n4,872.27 \n15.76 \n25.27 \n48.44 \nInternet (Web) \n - \n - \n \n6,487.17 \n7,576.73 \n11,321.44 \n348.30 \n435.36 \n462.17 \nNEFT \n - \n - \n \n39.52 \n48.98 \n46.83 \n261.03 \n186.33 \n298.13 \nRTGS \n - \n - \n \n0.15 \n0.14 \n0.15 \n36.79 \n36.91 \n51.34 \nUSSD \n - \n - \n \n267.04 \n249.06 \n370.29 \n2.27 \n2.22 \n2.72 \nMobile App \n - \n - \n \n803.16 \n1,058.24 \n2,330.34 \n51.41 \n59.71 \n97.05 \nDirect Debits \n - \n - \n \n34.43 \n116.57 \n72.10 \n9.75 \n16.65 \n9.25 \nTotal e-Payment \n \n \n \n10,053.47 \n12,020.52 \n19,532.94 \n737.95 \n782.29 \n983.73 \nCheques \n - \n - \n \n8.4 \n9.2 \n6.9 \n7.49 \n7.87 \n6.96 \nMMOs \n - \n - \n \n445.3 \n1,480.99 \n5,128.03 \n9.58 \n23.01 \n42.25 \nSource: Central Bank of Nigeria \n \n \n \n \n \n \n \nNote: Total e-payment transactions includes ATM, online transfers, NEFT, RTGS, USSD, Mobile App, and Direct Debit transactions \n \n \n \n \n \n \n \n \n \n36,792.58 \n36,913.89 \n51,341.43 \n-\n10,000.00 \n20,000.00 \n30,000.00 \n40,000.00 \n50,000.00 \n60,000.00 \nFirst Half 2022\nSecond Half 2022\nFirst Half 2023\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n71 \n \nThis document is for CBN internal consumption \n3.6 \nEXTERNAL SECTOR DEVELOPMENTS \nThe external account in the first half of 2023 \ndeteriorated largely, due to global financial \ntightening to rein in inflation, and a lull in economic \nactivities, \nattributed \nto \nthe \nuncertainties \nsurrounding \nthe \ngeneral \nelections. \nThe \ndevelopment resulted in an overall balance of \npayments deficit of 1.4 per cent of GDP, higher than \nthe deficit of 1.0 per cent of GDP and 0.4 per cent \nof GDP in the second half of 2022, and the first half \nof 2022, respectively. \nSustained inflow of remittances, coupled with \ndeclines in import bills and payment for services, \nresulted in an improved current account surplus of \n1.1 per cent of the GDP. The financial account \nmaintained a net borrowing position with a net \nincurrence of financial liabilities of 0.7 per cent of \nthe GDP, compared with 1.4 per cent in the \npreceding period. The international investment \nposition (IIP) posted a lower net liability of \nUS$53.13 billion in the review period. \nThe external reserves position at end-June 2023 \nwas US$33.71 billion and could finance 7.9 months \nof import (goods only) or 5.9 months of import \n(goods and services), which was above the \ninternational benchmark of 3.0 months. The \nforeign exchange market remained relatively \nstable in the first five months of 2023. Following \nthe Bank’s introduction of new reforms from June \n14, 2023, the average exchange rate of the naira \ndepreciated by 10.3 per cent. The stock of external \ndebt increased to US$43.16 billion, from US$41.69 \nbillion at end-December 2022, following additional \nloan disbursements. \n \n \n \nCurrent and Capital Account Developments \nThe current and capital account recorded a higher \nsurplus, driven by improved surplus in the \nsecondary income account and lower deficits in the \nservices and the primary income accounts. The \ncurrent account surplus improved significantly to \nUS$2.46 billion or 1.1 per cent of GDP, compared \nwith US$0.73 billion and US$0.29 billion in the first \nand second halves of 2022, respectively. The \ndevelopment was buoyed by lower deficits in the \nservices and primary income accounts, as well as a \nhigher surplus in the secondary income account. \n \nFigure 3.6.1: Current and Capital Account Balance (US$ \n'Billion) \n \nSource: Central Bank of Nigeria \n \nTrade \nTransactions in the goods account resulted in a \nlower surplus of US$2.66 billion or 1.3 per cent of \nGDP, compared with US$3.24 billion and US$2.76 \nbillion in the first and second halves of 2022, \nrespectively. The development was, largely, due to \nlower export earnings. \n \n \n \n \n-3.00\n-2.00\n-1.00\n0.00\n1.00\n2.00\n3.00\n2021H1\n2021H2\n2022H1\n2022H2\n2023H1\n-2.98\n1.13\n0.73\n0.29\n2.46\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n72 \n \nThis document is for CBN internal consumption \nExport Performance \nLower export receipts was recorded, on account \ndrop in gas export as a result of slowdown in \ndemand, due to favourable weather conditions, \nparticularly in Europe. Aggregate export earnings \ndeclined by 1.6 per cent to US$28.29 billion or 13.7 \nper cent of GDP, compared with US$28.75 billion \nin the second half of 2022. It also indicated a \ndecline of 20.2 per cent, compared with US$35.47 \nbillion in the first half of 2022. The development \nwas, driven, majorly by the decrease in oil export \nearnings to US$24.90 billion, from US$25.54 billion \nin the second half and US$31.57 billion in the first \nhalf of 2022. The decline in oil and gas export \nreceipts was majorly on account of a slowdown in \ndemand for gas. \nIn terms of share in total export earnings, crude oil \nand gas component remained dominant, with 88.0 \nper cent, while non-oil accounted for 12.0 per \ncent. \nA disaggregation of total export shows that crude \noil and gas export receipts declined by 2.5 per cent \nand 21.1 per cent to US$24.90 billion (11.5 per \ncent of GDP), in the review period, compared with \nUS$25.54 billion and US$31.57 billion in the \npreceding and corresponding halves of 2022, \nrespectively. Crude oil export receipts rose slightly \nby 0.1 per cent to US$22.02 billion, relative to \nUS$22.00 billion in the second half of 2022, \nreflecting majorly, sustained levels of crude oil \nproduction, following the increased surveillance of \npipeline infrastructure against vandalism and \ntheft. Compared with the first half of 2022, oil \nexport declined by 20.7 per cent from US$27.76 \nbillion. \nGas export receipts dropped by 19.0 per cent and \n24.6 per cent to US$2.88 billion, compared with \nUS$3.55 billion and US$3.81 billion in the \npreceding and corresponding halves of 2022, \nrespectively. The development was, driven, largely \nby lower export of liquefied natural gas and \nliquefied petroleum gas in the review period, \noccasioned by slowdown in demand, due to \nfavourable weather conditions, particularly, in \nEurope and the United States. \nNon-oil export earnings rose by 5.8 per cent to \nUS$3.40 billion or 1.6 per cent of GDP, from \nUS$3.21 billion in the second half of 2022, but \ndeclined by 13.1 per cent, compared with US$3.91 \nbillion in the corresponding half of 2022. The rise \nin non-oil export earnings was attributed to \nfavourable commodity prices and the positive \neffects of domestic policy measures aimed at \nboosting non-oil export. \nA breakdown of non-oil export by sector shows \nthat agricultural export, (majorly cocoa beans, \ncashew nuts and sesame seeds) accounted for the \nlargest share of 43.5 per cent, followed by other \nnon-oil export (mainly urea and cement) with 24.6 \nper \ncent. \nSemi-manufactured \n(driven \nby \naluminium, leather products, cocoa products and \ntin) accounted for 15.0 per cent, while mineral \nproduct (mainly copper, lead and zinc) was 9.6 per \ncent. Manufactured products (majorly aluminium \nproducts and tobacco) accounted for 7.5 per cent \nof total non-oil export. \nThe main non-oil export commodities comprised \nurea, cocoa beans, cashew nuts, sesame seeds, \nand aluminium. Vietnam, Japan, China, Brazil, the \nUS, Hungary, The Netherlands and Malaysia were \nthe major export destinations. \nExport to the ECOWAS Sub-Region \nNigeria’s export to the ECOWAS sub-region \ndecreased, reflecting a lull in economic activities \nduring the general elections period. Nigeria's non-\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n73 \n \nThis document is for CBN internal consumption \noil export to the ECOWAS sub-region declined to \nUS$175.48 million in the first half of 2023, from \nUS$249.17 million in the second half of 2022 and \nUS$254.98 million in the first half of 2022. A \nbreakdown shows that Nigeria’s export to Niger, at \nUS$47.14 million, constituted 26.9 per cent of the \ntotal, followed by: Ghana with US$41.16 million, \n23.5 per cent; Côte d’Ivoire, US$23.78 million, 13.6 \nper cent; and Togo, US$17.72 million, 10.1 per \ncent. Export to Senegal was US$16.33 million, 9.3 \nper cent; Benin, US$12.75 million, 7.3 per cent; \nand Burkina Faso, US$10.67 million, 6.1 per cent. \nOther countries accounted for the balance of 3.4 \nper cent. The major export commodities to the \nsub-region \nwere \ntobacco, \ninstant \nnoodles, \ndetergents, plastics, dairy products, soyabean \nmeal and carbonated soft drinks. \n \nTable 3.6.1: Export to ECOWAS Sub-Region (US$ Million) \nS/N \nCountry \nAmount \n1 \nNiger \n 47.14 \n2 \nGhana \n 41.16 \n3 \nCôte d’Ivoire \n 23.78 \n4 \nTogo \n 17.72 \n5 \nSenegal \n 16.33 \n6 \nBenin \n 12.75 \n7 \nBurkina Faso \n 10.67 \n8 \nMali \n 2.00 \n9 \nLiberia \n 1.34 \n10 \nGuinea-Bissau \n 0.92 \n11 \nThe Gambia \n 0.89 \n12 \nSierra Leone \n 0.48 \n13 \nGuinea \n 0.29 \n14 \nCape Verde \n - \nTotal \n175.48 \nSource: Central Bank of Nigeria \n Figure 3.6.2: Export to ECOWAS Sub-Region in Per cent \n \nSource: Central Bank of Nigeria \n \nForeign Exchange Earnings by the Top 100 Non-Oil \nExporters. \nThe sustained implementation of domestic policy \nmeasures aimed at boosting non-oil export \nresulted in higher earnings by the top 100 non-oil \nexporters. Receipts by the top 100 non-oil \nexporters increased by 1.9 per cent to US$2.12 \nbillion, from US$2.08 billion in the second half of \n2022. The amount was lower than US$2.29 billion \nin the corresponding half of 2022. The value of the \ntop 100 non-oil export accounted for 47.1 per cent \nof total non-oil export receipts. \nA breakdown of the receipts shows that Indorama \nEleme Fertiliser and Chemical Limited topped the \nlist with a value of US$260.22 million, representing \n12.3 per cent of the total, from the export of urea \nand fertiliser to Turkey and China. Dangote \nFertilizer Limited followed with US$199.87 million \nor 8.6 per cent of the total, from the export of \nfertilizer to the US and Brazil. \nIn third place was Outspan Nigeria Limited with \nexport value of US$133.55 million or 6.3 per cent \nof total, from the export of cocoa beans and \ncashew nuts to Malaysia, the US, and Vietnam. In \nthe fourth position was Starlink Global and Ideal \nTogo\n10.1%\nBenin\n7.3%\nSenegal\n9.3%\nGhana\n23.5%\nNiger\n26.9%\nCôte \nd’Ivoire\n13.6%\nBurkina \nFaso\n6.1%\nOther Ecowas \nCountries…\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n74 \n \nThis document is for CBN internal consumption \nLimited, with earnings of US$100.50 million (4.7%), \nfrom the export of aluminium alloy ingots, copper \nbillets, and brass ingots to China. In the fifth, sixth \nand seventh positions were Metal Recycling \nIndustries Limited, Segilola Resources Operating \nLimited and Olam Nigeria Limited with export \nvalues of US$86.04 million (4.1%); US$71.01 \nmillion (3.4%) and US$60.11 million (2.8%). Metal \nrecycling Industries Limited exported aluminium \nand brass ingots to China. Segilola Resources \nOperating Limited exported gold to China, while \nOlam Nigeria Limited exported cocoa bean seeds \nto Australia, Greece, Turkey and China. \nEverest Metal Nigeria Limited, WACOT Limited, \nand Sunbeth Global Concept Limited ranked \neighth, ninth and tenth, with respective earnings of \nUS$56.61 million (2.7%), US$53.49 million (2.5%), \nand US$50.45 million (2.4%). Everest Metal Nigeria \nLimited exported aluminium and copper ingots to \nthe US, while WACOT Limited exported cotton \nproducts, sesame seeds, and ginger to The \nNetherlands and the US. Sunbeth Global Concept \nLimited exported cocoa beans and cashew nuts to \nthe US. \n \nTable 3.6.2: Top 10 Non-Oil Exports (US$ Million) \nS/N \nEXPORTER \nAMOUNT \n \n% SHARE \n1 \nINDORAMA ELEME FERTILIZER AND \nCHEMICAL LTD \n260.22 \n12.3 \n2 \nDANGOTE FERTILIZER LIMITED \n199.87 \n9.4 \n3 \nOUTSPAN NIGERIA LIMITED \n133.55 \n6.3 \n4 \nSTARLINK GLOBAL & IDEAL LIMITED \n100.50 \n4.7 \n5 \nMETAL RECYCLING INDUSTRIES LIMITED \n86.04 \n4.1 \n6 \nSEGILOLA \nRESOURCES \nOPERATING \nLIMITED \n71.01 \n3.4 \n7 \nOLAM NIGERIA LIMITED \n60.11 \n2.8 \n8 \nEVEREST METAL NIGERIA LIMITED \n56.61 \n2.7 \n9 \nWACOT LIMITED \n53.49 \n2.5 \n10 \nSUNBETH GLOBAL CONCEPT LTD \n50.45 \n2.4 \nSource: Central Bank of Nigeria \n \nNon-Oil Receipts through Banks \nNon-oil export proceeds repatriated through the \nbanking system increased by 22.6 per cent to \nUS$3.48 billion, compared with US$2.84 billion in \nthe preceding half of 2022. The value was also \nhigher than US$2.85 billion in the corresponding \nhalf of 2022 by 21.9 per cent. The amount \naccounted for 77.3 per cent of total non-oil export \nreceipts in the review period. A breakdown of the \nproceeds by sector shows that receipts from the \nexport of agricultural products accounted for 44.2 \nper cent of total receipts, followed by industrial \nproducts with a share of 30.6 per cent of the total. \nProceeds from the sale of manufactured products \nconstituted 20.5 per cent; mineral products, \n(3.0%); transport, (0.9%); and food products, \n(0.8%). \n \nFigure 3.6.3: Non-Oil Export Receipts by Banks in Per cent \n \nSource: Central Bank of Nigeria \n \nMerchandise Import \nAggregate merchandise import bills decreased, due \nto supply constraints and low aggregate demand. \n23\n34.7\n30.6\n1.1\n1.8\n0.8\n23.4\n21.2\n20.5\n0.2\n0.6\n0.9\n50.3\n39.9\n44.2\n2.1\n1.9\n3\nF I R S T H A L F 2 0 2 2\nS E C O N D H A L F \n2 0 2 2\nF I R S T H A L F 2 0 2 3\nIndustrial\nFood\nManufactured\nTransport\nAgriculture\nMinerals\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n75 \n \nThis document is for CBN internal consumption \nAggregate merchandise import decreased by 1.4 \nand 20.5 per cent to US$25.64 billion or 11.9 per \ncent of the GDP, compared with US$26.00 billion \nand US$32.23 billion in the second and first halves \nof 2022, respectively. A breakdown shows the \nimportation of non-oil products declined by 8.4 \nand 17.2 per cent to US$15.59 billion or 7.2 per \ncent of GDP, compared with US$17.03 billion and \nUS$18.84 billion in the second and first halves of \n2022. \nImportation \nof \npetroleum \nproducts \nincreased by 11.9 per cent to US$10.04 billion (4.6 \nper cent of GDP), compared with US$9.0 billion in \nthe second half of 2022, but declined by 28.0 per \ncent relative \nto US$13.96 \nbillion \nin \nthe \ncorresponding half. Despite the decline in non-oil \nimport, it continued to dominate total import, \naccounting for 60.8 per cent of the total import. Oil \nimport constituted the balance of 39.2 per cent. \nA breakdown of merchandise import by broad \neconomic categories indicates that fuels and \nlubricants accounted for 32.6 per cent, followed by \nindustrial sector, with 19.3 per cent. Furthermore: \ncapital goods was 15.4 per cent, food and \nbeverages, 13.1 per cent; transport equipment and \nparts, 13.0 per cent; consumer goods, 5.2 per cent; \nand others, 1.4 per cent. \nFigure 3.6.4: Export, Import and Trade Balance \n \nSource: Central Bank of Nigeria \nServices \nTransactions in the services account resulted in a \nlower deficit, owing, largely, to reduced payments \nfor transportation and travel services. The deficit in \nthe services account decreased by 12.1 per cent to \nUS$6.32 billion, or 2.9 per cent of GDP in the first \nhalf of 2023, compared with US$7.19 billion in the \nsecond half of 2022. Analysis indicates that \npayments for imported services declined by 13.4 \nper cent to US$8.49 billion, relative to US$9.81 \nbillion in the second half of 2022. \nA \nbreakdown \nshows \nthat \npayments \nfor \ntransportation and travel services declined by 18.1 \nand 15.0 per cent, respectively, to US$3.85 billion \nand US$1.79 billion, compared with US$4.70 \nbillion and US$2.10 billion in the second half of \n2022. The development was attributed to lower \nspending on air transportation, while for travel \npayments was due to lower expenditure on \neducation related travels. \nFurthermore, financial services, declined by 57.0 \nper cent, to US$0.12 billion in the first half of 2023. \nSimilarly, payments for insurance and pension \nservices, as well as government services fell by 1.7 \nand 2.8 per cent to US$0.32 billion and US$0.16 \nbillion, compared with the levels in the preceding \nhalf of 2022. \nPayments for personal, cultural, and recreational \nservices increased to US$0.12 billion, from \nUS$0.02 billion. Payments for telecommunications \nservices also grew by 14.5 per cent to US$0.30 \nbillion, relative to US$0.26 billion in the second half \nof 2022, owing to higher payments for computer \nand information services. \nAnalysis of total services payments by share shows \nthat transportation services constituted 45.4 per \ncent, followed by travel services at 21.0 per cent. \n-3.58\n-0.98\n3.24\n2.76\n2.66\n-10.00\n-5.00\n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\n30.00\n35.00\n40.00\nFirst Half 2021\nSecond Half 2021\nFirst Half 2022\nSecond Half 2022\nFirst Half 2023\nUS $ BIllions\n Export\n Import\n Trade Balance\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n76 \n \nThis document is for CBN internal consumption \nOther business services accounted for 20.0 per \ncent; \ninsurance \nservices, \n3.7 \nper \ncent; \ntelecommunications and computer services, 3.5 \nper cent; government services, 1.9 per cent; \ncharges on intellectual property, 1.5 per cent; and \nfinancial services, 1.4 per cent. \n \nFigure 3.6.5: Share of Services Out-Payments in Per cent \n \nSource: Central Bank of Nigeria \nAggregate earnings from services export declined \nby 17.0 and 3.2 per cent to US$2.17 billion, relative \nto the levels in the second half and first half of \n2022. The development was attributed to lower \ninflow from the provision of travel, financial and \ntransportation services. \nA breakdown reveals that receipts from travel \ndecreased by 33.4 per cent, to US$0.42 billion, \ncompared with US$0.63 billion in the second half \nof 2022. Proceeds from transportation services \nalso dropped by 10.4 per cent to US$0.95 billion, \ncompared with the level in the preceding half of \n2022, owing majorly to lower receipts from sea \ntransportation services. Receipts from financial \nservices also fell by 18.0 per cent to US$0.38 \nbillion, relative to US$0.46 billion in the second half \nof 2022. Inflow from telecommunication services, \ndeclined by 20.5 per cent to US$0.11 billion, \nrelative to the level in the second half of 2022. \nReceipts from government services decreased \nmarginally by 0.7 per cent to US$0.23 billion, \ncompared with the level in the preceding half of \n2022. \nIn terms of share in total services receipts, \ntransportation services accounted for 43.5 per \ncent of the total, followed by: travels, 19.2 per \ncent; financial services, 17.3 per cent; government \nservice, 10.6 per cent; and telecommunication \nservices, 5.1 per cent. Insurance services was 2.3 \nper cent, while other business services accounted \nfor 1.9 per cent of the total. \nFigure 3.6.6: Share of Services Receipts in Per cent \n \nSource: Central Bank of Nigeria \n \nPrimary Income \nThe deficit in the primary income account \nnarrowed, due, majorly, to lower investment \nincome claims by non-resident investors as some \ncompanies declared losses. The primary income \naccount deficit narrowed by 13.0 per cent to \nUS$4.95 billion, compared with US$5.69 billion, in \nthe preceding half of 2022 and by 31.0 per cent, \nrelative to US$7.18 billion in the corresponding \nperiod of 2022. \nTransportati\non\n45.4%\nTravel\n21.0%\nOther \nBusiness\n20.0%\nInsurance\n3.7%\nTelecommun\nication\n3.5%\nGovernment\n1.9%\nFinancial \n1.4%\nCharges on \nIntellectual \nPrperty\n1.5%\nOthers\n1.6%\nTransportatio\nn\n43.5%\nTravel\n19.2%\nOther \nBusiness\n1.9%\nInsurance\n2.3%\nTelecommuni\ncation\n5.1%\nGovernment\n10.6%\nFinancial \n17.3%\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n77 \n \nThis document is for CBN internal consumption \nInvestment income from direct investment in the \nform of dividends and profit payments, decreased \nby 11.1 per cent to US$5.77 billion, compared with \nUS$6.49 billion in the preceding half of 2022. A \nbreakdown shows \nthat \ndividend \npayments \nincreased by 1.3 per cent to US$5.02 billion, from \nUS$4.96 billion in the second half of 2022. There \nwere, however, negative reinvested earnings of \nUS$0.79 billion was recorded, compared with \nUS$0.42 billion in the preceding half-year. The \ndevelopment reflected lower investment income \nclaims by non-resident investors as some \ncompanies declared losses during the review \nperiod. \nInterest payments on portfolio investments \nincreased to US$0.18 billion, compared with \nUS$0.11 billion in the second half of 2022, \nindicating the bullish performance of the capital \nmarket in the review period. Similarly, interest \nearnings on external reserves investments grew to \nUS$0.46 billion, compared with US$0.29 billion in \nthe second half of 2022, owing to higher interest \non fixed income securities in the Advanced \nEconomies. Interest payments on loans increased \nto US$1.32 billion, from US$0.95 billion in the \npreceding period. \nThe compensation of employees sub-account \nremained in a surplus position, though lower by 2.2 \nper cent at US$0.12 billion, compared with the \nlevel in the preceding half of 2022. \n \nSecondary Income \nThe secondary income account recorded a higher \nsurplus, owing to increased inflow of grants to the \ngeneral government and sustained inflow of \nremittances. The surplus in the secondary income \naccount increased to US$11.08 billion or 5.1 per \ncent of GDP in the review period, compared with \nUS$10.41 billion or 4.0 per cent of GDP in the \npreceding period. It was, however, lower than \nUS$11.44 billion recorded in the corresponding \nhalf of 2022. The increase was occasioned by \nsustained inflow of remittances and higher inflow \nof grants to the general government, majorly to \nsupport the general elections process during the \nreview period. Inflow of grants to the general \ngovernment rose to US$1.44 billion in the first half \nof 2023, from US$1.26 billion in the preceding half \nof 2022. The amount, however, was lower by 7.3 \nper cent when compared with US$1.55 billion in \nthe corresponding period. \n Remittances \nfrom migrant \nworkers, \nwhich \nconstituted 86.8 per cent of total secondary \nincome inflow increased slightly to US$9.80 billion, \nfrom US$9.75 billion in the second half of 2022, but \nlower than US$10.11 billion in the first half of \n2022, reflecting improvements in wages in major \nmigrant host countries as inflation eases in the \nreview period. \nFigure 3.6.7: Workers’ Remittances (US$’ Billion) \n \nSource: Central Bank of Nigeria \n \nFinancial Account Developments \nThe financial account remained in a net borrowing \nposition in the review period. The financial account \nrecorded a lower net incurrence of liabilities of \nUS$1.48 billion in the review period, compared \n9.22\n10.02\n10.11\n9.75\n9.8\n8.6\n8.8\n9\n9.2\n9.4\n9.6\n9.8\n10\n10.2\n2021H1\n2021H2\n2022H1\n2022H2\n2023H1\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n78 \n \nThis document is for CBN internal consumption \nwith US$3.54 billion and US$2.95 billion in the \npreceding and corresponding halves of 2022, \nrespectively. The development was, due to lower \ninflow of foreign portfolio and loans, occasioned by \nthe lull in domestic economic activities, particularly \nduring the general elections in the first quarter and \ntight global financial conditions. \n \nNet Incurrence of Liabilities \nTighter \nglobal \nfinancial \nconditions \nand \nuncertainties surrounding the general elections \ndampened investors’ sentiments, thus, resulting in \na lower inflow of foreign capital. Aggregate \nfinancial liabilities declined significantly to US$0.97 \nbillion, compared with US$5.51 billion and \nUS$7.49 billion in the second and first halves of \n2022, respectively. \nA \nbreakdown \nreveals \nthat \nforeign \ndirect \ninvestment (FDI) inflow amounted to US$0.01 \nbillion in the first half of 2023, compared with \nUS$1.25 billion in the preceding half. This was in \ncontrast to a divestment of US$1.44 billion in the \ncorresponding half of 2022. The decrease was as a \nresult of the lower inflow of equity and negative \nreinvested earnings. \nAlso, portfolio investment inflow in form of equity \nand debt securities was lower at US$0.77 billion, \nrelative to US$1.34 billion and US$3.22 billion in \nthe preceding and corresponding halves of 2022, \nrespectively. The development was owing majorly \nto the Central Bank’s redemption of matured \ninvestments in short-term debt securities. In \ncontrast, ‘other’ investment recorded an outflow \nof US$0.18 billion, in contrast to an inflow of \nUS$2.92 billion in the preceding half of 2022, and \nUS$4.70 billion in the corresponding half of 2022, \ndue to withdrawal of currency and deposits from \ndomestic deposit taking corporations. \nFigure 3.6.8: Foreign Capital Inflow (US$ Billion) \n \nSource: Central Bank of Nigeria \n \nNet Acquisition of Assets \nAggregate financial assets recorded a disposal of \nUS$0.52 billion, in contrast to an acquisition of \nUS$1.96 billion and US$4.54 billion in the \npreceding and corresponding halves of 2022, \nrespectively. The development was, largely due, to \nlower acquisition of other investment assets and \ndepletion in external reserves. \nAn analysis reveals a disposal of direct investment \nassets by resident investors stood at US$0.01 \nbillion in the review period, relative to an \nacquisition of US$0.18 billion in the second half of \n2022. Portfolio investment assets decreased to \nUS$0.02 billion, compared with US$0.40 billion in \nthe preceding half of 2022. The acquisition of \n‘other investment’ asset also decreased to \nUS$2.44 billion, compared with US$3.93 billion in \nthe preceding half of 2022. The decline was, due to \nthe withdrawal of foreign currency and deposits by \ndeposit taking corporations and repayment of \nloans by the deposit-taking corporations. \nReserve assets was depleted by US$2.96 billion in \nthe review period, compared with US$2.54 billion \nin the preceding half of 2022. The depletion was on \naccount of settlement of balance of payments \n (5.00)\n -\n 5.00\n 10.00\nH1 2021\nH2 2021\nH1 2022\nH2 2022\nH1 2023\nDirect investment\nPortfolio investment\nFinancial derivatives\nOther investment\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n79 \n \nThis document is for CBN internal consumption \nobligations, including servicing of outstanding debt \nobligations. \nExternal Debt \nNigeria's public external debt increased in the \nreview period, owing to incurrence of new of loans. \nNigeria’s public sector external debt stock and \nexternal debt service payment at end-June 2023 \nstood at US$43.16 billion or 10.4 per cent of GDP \nand US$0.37 billion, respectively. A breakdown \nshowed that the multilateral loans, from the World \nBank, International Monetary Fund, and African \nDevelopment \nBank \nGroups, \namounted \nto \nUS$20.79 billion, accounting for 48.2 per cent of \nthe total. A total of US$15.62 billion or 36.2 per \ncent of the total was borrowed from commercial \nsources in the form of Euro Bonds. Loans from \nbilateral sources was US$5.52 billion, or 12.8 per \ncent of the total, promissory notes were US$0.93 \nbillion, or 2.2 per cent of the total, while \nsyndicated loan (arranged by African Finance \nCorporation) stood at US$0.30 billion or 0.7 per \ncent of the total debt stock. \nThe external debt service payment stood at \nUS$0.37 billion at end-June 2023. A breakdown \nshowed that interest payment totaled US$0.21 \nbillion, accounting for 56.8 per cent of the entire \ndebt service payment. Principal repayment totaled \nUS$0.13 billion, or 35.1 per cent of the total, while \nother payments made up the balance. An analysis \nof interest payments showed that interest \npayment on commercial borrowings accounted for \n75.3 per cent of the total at US$0.16 billion, while \ninterest on multilateral loans amounted to \nUS$0.04 billion or 21.4 per cent of the total. \nInterest \npayments \nto \nbilateral \ninstitutions \naccounted for the balance. \n \n \nInternational Investment Position \nA lower net liability was recorded in the \nInternational Investment Position. A lower net \nfinancial liability of US$53.13 billion was recorded \nat end-June 2023, compared with US$74.64 billion \nat end-December 2022, and US$74.91 billion at \nend-June 2022. \nThe stock of financial liabilities, representing \nforeign investors' claims on the economy, declined \nby 12.1 per cent to US$161.90 billion at end-June \n2023, relative to US$184.27 billion at end-\nDecember 2022. There was also a 11.7 per cent \ndecline when compared to US$183.25 billion at \nend-June 2022. The development reflected a \ndecrease in the stock of portfolio investments \n(particularly the household holdings) and direct \ninvestments (particularly equity and investment \nfund shares in direct investment enterprises). \nThe stock of portfolio investment fell by 21.3 per \ncent to US$28.46 billion at end-June 2023, relative \nto US$36.17 billion at end-December 2022. \nSimilarly, the stock of FDI liabilities declined by 16.0 \nper cent to US$72.08 billion at end-June 2023, \nrelative to US$ 85.81 billion at end-December \n2022. The stock of other liabilities also declined by \n1.9 per cent to US$57.98 billion at end-June 2023, \nrelative to US$59.12 billion at end-December \n2022. \nTotal stock of financial assets declined marginally \nby 0.8 per cent to US$108.77 billion at end-June \n2023, relative to US$109.64 billion at end-\nDecember 2022. This was, largely due, to the \ndepletion in external reserves. \nFurther analysis reveals that direct investment \ndeclined slightly by 0.1 per cent to US$13.65 billion \nat end-June 2023, relative to US$13.67 billion at \nend-December \n2022. \nPortfolio \ninvestment \ndeclined by 5.1 per cent to US$3.85 billion at end-\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n80 \n \nThis document is for CBN internal consumption \nJune 2023, relative to US$4.06 billion at end-\nDecember 2022. However, ‘Other’ investment \nassets rose by 4.3 per cent to US$54.40 billion, \nrelative to US$52.14 billion at end-December \n2022. The stock of reserve assets fell to US$33.71 \nbillion at end-June 2023, relative to US$36.61 \nbillion at end-December 2022. \n \nExternal Reserves \nThe external reserves remained above the \ninternational benchmark of three months of import \ncover. Gross external reserves at end-June 2023 \nstood at US$33.71 billion, compared with \nUS$36.61 billion and US$39.16 billion at end-\nDecember 2022 and end-June 2022, respectively. \nThe 7.9 per cent decline in external reserves, \ncompared with the level at end- December 2022, \nwas, mainly due, to the Bank’s effort to stabilise \nthe foreign exchange market and settlement of \nother obligations, including public sector and \nexternal debt service payments. \nA breakdown of external reserves by ownership \nshows that, the CBN maintained the largest share \nof 85.9 per cent, followed by the Federal \nGovernment with 14.0 per cent. The Federation \naccounted for the outstanding 0.1 per cent. In \nterms of currency composition, the US dollar, at \nUS$25.11 billion, constituted 74.5 per cent of the \ntotal; Special drawing rights, US$5.02 billion \n(14.9%); Chinese yuan, US$3.16 billion (9.4%); and \nother currencies accounted for the balance of 1.2 \nper cent. \nAn assessment of external reserves adequacy \nbased on the traditional benchmark, shows, that \nthe level of reserves at end-June 2023 could \nfinance 6.0 months of import of goods and services \nor 8.2 months of goods only, higher than the \nprescribed 3.0 months international benchmark. \nThe ratio of external reserves to short-term \nliabilities was 3.4 percentage points below the \nbenchmark of 100.0 per cent short-term debt \ncover, based on the Greenspan-Guidotti measure \nof external reserves adequacy. In terms of external \nreserves to money supply (M3), the ratio, at 40.1 \nper cent was above the international benchmark of \n20.0 per cent. \n \nFigure 3.6.9: External Reserves Stock and Reserve \nAdequacy Measures \nSource: Central Bank of Nigeria \n \nExternal Asset Management Programme and \nIncome from Reserves Management \nThe Net Asset Value of the portfolio managed \nby the external Asset Managers increased to \nUS$7.31 billion at end-June 2023, from \nUS$7.23 billion at end-December 2022 and \nUS$7.26 billion at end-June 2022. \nForeign Exchange Flows \nThe economy recorded a higher net foreign \nexchange inflow, due to increased receipts from \nautonomous sources. Foreign exchange flow \nthrough the economy recorded a net inflow of \nUS$16.75 billion in the first half of 2023, compared \nwith US$14.27 billion in the second half of 2022. \n92\n94\n96\n98\n100\n102\n104\n106\n108\n0\n10\n20\n30\n40\n50\n60\nFirst Half 2022\nSecond Half 2022\nFirst Half 2023\nReserves\nImport Cover (Goods)\nImport Cover (G&S)\nReserves/M3\nShort Term Debt Cover\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n81 \n \nThis document is for CBN internal consumption \nAggregate inflow into the economy rose by 2.4 per \ncent to US$34.04 billion in the first half of 2023, \ncompared with US$33.26 billion, in the second half \nof 2022, but fell by 11.7 per cent, compared with \nUS$38.56 billion, in the first half of 2022. The \ndevelopment was driven, largely, by 8.6 per cent \nincrease in inflow through autonomous sources. A \nbreakdown shows that inflow through the CBN and \nautonomous sources accounted for 36.9 and 63.1 \nper cent, respectively. \nInflow through autonomous sources increased by \n8.6 per cent to US$21.47 billion, from US$19.77 \nbillion in the second half of 2022. Foreign exchange \ninflow through the CBN fell by 6.8 per cent to \nUS$12.58 billion in the first half of 2023 from \nUS$13.49 billion in the second half of 2022. \nAggregate foreign exchange outflow from the \neconomy declined by 8.9 per cent to US$17.29 \nbillion, from the levels in the second half of 2022. \nA breakdown shows that outflow through \nautonomous sources declined by 29.5 per cent to \nUS$2.07 billion, compared with the level in the \nsecond half of 2022. Similarly, outflow through the \nCBN decreased by 5.2 per cent to US$15.22 billion. \nA net inflow of US$19.40 billion was recorded in \nthe first half of 2023 through autonomous sources, \ncompared with US$16.84 billion in the second half \nof 2022. The CBN recorded a higher net outflow of \nUS$2.65 billion in the first half of 2023, compared \nwith US$2.56 billion in the second half of 2022. \n \n \n \n \n \n \n \n \nFigure 3.6.10: Foreign Exchange Flows through the Economy \n(US$ Billion) \n \n Source: Central Bank of Nigeria \n \nForeign Exchange Management \nThe foreign exchange market remained relatively \nstable in the first five months of 2023. The Bank, \nhowever, introduced some operational changes in \nthe foreign exchange market from June 14, 2023, \nwhich included the collapse of all foreign exchange \nsegmented markets into the Investors and \nExporters (I&E) window. Thus, all eligible foreign \nexchange transactions for medical needs, school \nfees, Business Travel Allowance/ Personal Travel \nAllowance (BTA/PTA) and Small and Medium \nEnterprise (SMEs) import amongst others were to \nbe transacted at the I & E window. \nThe Bank also discontinued the RT200 Rebate \nScheme and the Naira4Dollar Remittance Scheme \nto ensure a market determined foreign exchange \nrate. In addition, the Bank introduced eNaira \npayment option to recipients of diaspora \nremittances. The policy shift to a market \ndetermined regime resulted in the depreciation of \nthe naira. \n \n \n \n38.56 \n33.26 \n34.04 \n21.81 \n18.98 \n17.29 \n16.75 \n14.27 \n16.75 \nH 1 2 2\nH 2 22\nH 1 23\nInflow\nOutflow\nNetflow\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n82 \n \nThis document is for CBN internal consumption \nExchange Rate Movements \nThe exchange rate of the naira to the US dollar at \nthe I&E window, closed at N770.88/US$ at end-\nJune 2023, relative to N460.00/US$ at end-\nDecember 2022 and N414.00/US$ at end-June \n2022. \nThe average exchange rate of the naira to the US \ndollar at the I&E window depreciated by 10.3 per \ncent and 14.4 per cent to ₦486.08/US$ in the first \nhalf of 2023, relative to ₦436.00/US$ and \n₦416.02/US$ in the second and first halves of \n2022, respectively. \nFigure 3.6.11: Average Exchange Rate Movements \n (N /US$) \n \nSource: Central Bank of Nigeria \n \nIn the first half of 2023, the average cross exchange \nrate of the naira against the surveyed currencies \ndepreciated, relative to the levels in the second \nhalf of 2022. The naira depreciated by 14.6 per \ncent against the British pound to N600.39/£. The \nnaira also depreciated by 15.8 per cent against the \neuro to N525.46/€ and 13.3 per cent against the \nJapanese yen at N3.60/¥. The naira weakened by \n15.3 per cent against the CFA Franc and 12.0 per \ncent against the WAUA, to N0.79/CFA and \nN638.94/WAUA. \nSectoral Utilisation of Foreign Exchange \nAggregate utilisation of foreign exchange by \nsectors decreased, driven, mainly by decline in the \nutilisation for invisibles import. Aggregate sectoral \nutilisation of foreign exchange was US$13.78 \nbillion in the first half of 2023, indicating a \ndecrease of 10.9 per cent, compared with the level \nin the second half of 2022. It also fell by 3.9 per \ncent relative to the level in the corresponding half \nof 2022. A disaggregation shows that US$9.34 \nbillion or 67.7 per cent of the foreign exchange was \nutilised for visible import, indicating an increase of \n0.2 and 5.0 per cent, compared with their levels in \nthe second and first halves of 2022, respectively. \nFurther analysis shows that the amount utilised by \nthe industrial sector, at US$4.83 billion, rose by \n14.0 per cent, over the level in the second half of \n2022. Similarly, utilisation by oil, mineral and \ntransport sectors grew by 13.2, 15.9 and 12.8 per \ncent, to US$0.81 billion, US$0.43 billion and \nUS$0.28 billion, respectively, compared with the \nlevels in the preceding period. \nThe amount utilised for manufactured, food \nproducts and agricultural sectors declined by 27.3, \n12.9 and 4.2 per cent, to US$1.47 billion, US$1.36 \nbillion, and US$0.16 billion, respectively, relative to \nthe levels in the preceding half of 2022. \nFigure 3.6.12: Share of Sectoral Utilisation of Foreign \nExchange (Visible) \n \n \nSource: Central Bank of Nigeria \n350\n370\n390\n410\n430\n450\n470\n490\n510\nH1 2021\nH2 2021\nH1 2022\nH2 2022\nH1 2023\nI&E\nINDUSTRIAL \nSECTOR, 35.0\nFOOD PRODUCTS, \n9.9\nMANUFACTURED \nPRODUCTS, 10.7\nTRANSPORT \nSECTOR, 2.0\nAGRICULTURAL \nSECTOR, 1.2\nMINERALS, 3.1\nOIL SECTOR, 5.8\n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2022 \n \n83 \n \nThis document is for CBN internal consumption \nInvisible transactions at US$4.45 billion or 32.3 per \ncent of the total, declined by 27.7 per cent, below \nUS$6.16 billion in the second half of 2022, and 18.4 \nper cent below US$5.45 billion recorded in the first \nhalf of 2022. A breakdown shows that the amount \nutilised for financial services and other services \ndeclined by 25.8 and 56.9 per cent to US$3.17 \nbillion and US$0.16 billion, respectively, below the \nlevels in the second half of 2022. The amount \nutilised for transport, educational and business \nservices also decreased by 46.2, 37.3 and 13.1 per \ncent, to US$0.17 billion, US$0.34 billion, and \nUS$0.46 billion, respectively, relative to the levels \nin the second half of 2022. \n \nFigure 3.6.13: Share of Sectoral Utilisation of Foreign \nExchange (Invisibles) in Per cent \n \nSource: Central Bank of Nigeria \n \n \nNominal Effective Exchange Rate (NEER) and Real \nEffective Exchange Rate (REER) Indices \nThe average 19-currency13 NEER index (November \n2009=100) in the review period was 217.07 index \npoints, indicating a rise of 14.1 and 11.4 per cent, \n \n13 China, India, USA, Netherlands, Brazil, Spain, France, South Africa, \nGermany, UK, Japan, Cote d'Ivoire, South Korea, Indonesia, Belgium, Italy, \nGhana, Sweden, UAE \nrelative to the levels in the second and first halves \nof 2022, respectively. The average REER index \n(November \n2009=100) \nwas \n62.82 \npoints, \nrepresenting a 4.7 per cent increase and 4.6 per \ncent decrease, compared with the levels in the \nsecond and first halves of 2022, respectively. The \nindices reflected depreciation against the major \ntrading partners in the review period, which \nsuggested increased export competitiveness. \n \nFigure 3.6.14: Nominal Effective Exchange Rate (NEER) and \n Real Effective Exchange Rate (REER) \n \nSource: Central Bank of Nigeria \n \n \n \n \n \nBUSINESS \nSERVICES, \n3.36 \nCOMMUNICATIO\nN SERVICES, 0.99 \nEDUCATIONAL \nSERVICES, 2.48 \nFINANCIAL \nSERVICES, 23.02 \nOTHER SERVICES \nNOT INCLUDED \nELSEWHERE, 1.15 \n0.00\n50.00\n100.00\n150.00\n200.00\n250.00\n2021H2\n2022H1\n2022H2\n2023H1\nNEER\nREER\n \n \n \n84 \n \n \n \n \n \n \nSection Four\nOUTLOOK \n \n \n \n \n \n \n \n \nEconomic Outlook\n• Global \nEconomy\n• Real Domestic \nEconomy \n \n \n \n85 \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2023 \n \n4.1 \nGLOBAL ECONOMIC OUTLOOK \nThe global economic outlook for the rest of 2023 \nremains positive, owing to the easing supply chain \npressure, as shocks from the COVID-19 and Russia-\nUkraine war moderate. The prevailing tight \nfinancial conditions, however, is expected to \nsuppress demand, resulting to slower growth, \nparticularly, in the AEs. Consequently, the IMF \nprojected the expansion of the global economy to \nslow in 2023 at 3.0 per cent, below the pre-\npandemic average of 3.8 per cent, and the 3.5 per \ncent recorded in 2022. \nIn the Advanced Economies (AEs), rising credit \nconstraints and shrinking labour markets are \nexpected to drag output growth to 1.5 per cent in \n2023, from 2.7 per cent in 2022. In the United \nStates, output is projected to slow to 1.8 per cent \nin 2023 from 2.1 per cent in 2022, attributable to \nthe anticipated impact of tight monetary policy. \nGrowth in the euro area is projected to fall to 0.9 \nper cent in 2023 from 3.5 per cent in 2022. In the \nUK, growth is expected to decline to 0.4 per cent \nfrom 4.1 per cent in 2022 as households face \nsevere cost of living crisis. The German economy is \nprojected to slide into recession, contracting by 0.3 \nper cent, from 1.8 per cent growth in 2022. \nIn Emerging Markets and Developing Economies \n(EMDEs), growth is projected to remain stable at \n4.0 per cent in 2023. Anticipated recovery in China \nwould be driving growth. Thus, the Chinese \neconomy is projected to grow by 5.2 per cent from \n3.0 per cent in 2022. Output in India is, however, \nexpected to decline to 6.1 per cent in 2023 from \n7.2 per cent in the preceding year. At the regional \nlevel, growth in the Middle East and Central Asia is \nprojected at 2.5 per cent in 2023 from 5.4 per cent \nin 2022. \n \nThe outlook for sub-Saharan Africa is positive, with \ngrowth projected at 3.5 per cent in 2023, a \ndecrease from the 3.9 per cent growth in 2022. The \nprojection for the region reflects the contagion \neffects from advanced countries and the monetary \ntightening. \nGlobal headline inflation is projected to remain \nelevated in 2023, though lower than the levels in \n2022, due to lower energy prices and monetary \npolicy measures. Consequently, global headline \ninflation is expected to decline from 8.7 per cent in \n2022 to 6.8 per cent, with about three-quarters of \nthe global economies expected to experience \nlower disinflation. However, the IMF projections \nsuggest that the inflationary pressure could \nheighten further if international commodity prices \nrise and central banks loosen their policy stance. \nIn the AEs, inflationary pressure is expected to \nease, reflecting the impact of the decline in energy \nand commodity prices owing to the diminishing \neffects of the Russia-Ukraine war. Thus, the \ninflation rate in AEs is expected to decline to 4.6 \nper cent from 7.3 per cent in 2022. Within the \nEMDEs, inflation is projected to continue to trend \ndownward, declining to 8.1 per cent from 9.9 per \ncent in the preceding year. \nInflationary pressure could, however, rise further if \nthe labour market in the AEs remains tight and \nwages rise. Also, any unexpected rise in energy and \nfood prices could make it more difficult to anchor \ninflation expectations, which would require even \ntighter monetary policy to tackle. \n \n \n \n \n \n \n \n \n \n86 \n \nCountry \nGrowth \n \n2022 \n2023f \n2024f \nGlobal \n3.5 \n3.0 \n3.0 \nAdvanced Economies \n2.7 \n1.5 \n1.4 \nUnited States \n2.1 \n1.8 \n1.0 \nUnited Kingdom \n4.1 \n0.4 \n0.1 \nJapan \n1.0 \n1.4 \n1.0 \nGermany \n1.8 \n-0.3 \n1.3 \nItaly \n3.7 \n1.1 \n0.9 \nEmerging Market & Developing \nEconomies \n4.0 \n4.0 \n4.1 \nRussia \n-2.1 \n1.5 \n1.3 \nChina \n3.0 \n5.2 \n4.5 \nIndia \n7.2 \n6.1 \n6.3 \nSub-Saharan Africa \n3.9 \n3.5 \n4.1 \nSouth Africa \n1.9 \n0.3 \n1.7 \nNigeria \n3.1 \n3.2 \n3.0 \n Source: IMF World Economic Outlook, 2023 \n Note: 2023f and 2024f are forecasts \n \n \nTable 4.1: Economic Growth in Selected Countries \n \n \n \nCENTRAL BANK OF NIGERIA \nHalf Year Economic Report, 2021 \n \n87 \n \nThis document is for CBN internal consumption \n4.2 \n DOMESTIC ECONOMIC OUTLOOK \nNigeria’s output growth is expected to maintain a \npositive trajectory for the rest of 2023. The \ngrowth prospects are dependent on continued \npolicy support in the agriculture and oil sectors, \nand reforms in the foreign exchange market. \nSpecifically, the Nigerian economy is estimated to \ngrow in 2023 by 2.79 per cent (CBN), 3.79 per cent \n(FMBNP) and 3.20 per cent (IMF). The positive \noutlook \nis \npredicated \non \nthe \neffective \nimplementation of Finance Act 2023 and the \n2022-2025 Medium-Term National Development \nPlan (MTNDP), and the continued interventions by \nthe CBN in growth-enhancing sectors. \n \nThe risk to the outlook is still tilted to the \ndownside, characterised by significant headwinds \nsuch as rising energy prices emanating from \nlingering effects of the Russia-Ukraine war, and \nthe \npersisting \nsecurity \nand \ninfrastructural \nchallenges, which could undermine the growth \noutlook in the short-to-medium-term. \n \nDomestic prices are expected to remain elevated \nthrough the second half of 2023. This is on the back \nof spillovers from global supply constraints, and \nexchange rate pass-through. More so, the \npersisting security and infrastructural challenges \ncould exacerbate inflationary pressures. \n \nFiscal sector performance is expected to remain on a \npositive recovery trajectory in the second half of 2023. \nThis outlook is contingent on the effective \nimplementation of the Finance Act 2023 and \nrestructuring of key revenue generating MDAs to \nboost non-oil revenue. Low domestic crude oil \nproduction, growing public debt, lingering \ninsecurity, global economic slowdown, and the \nwar in Ukraine, could, however, pose significant \ndownside risks to fiscal operations in the short- to \nmedium-term. \n \nThe financial sector is expected to remain resilient in \nthe second half of 2023. The outlook mirrors the \nefforts of the CBN in continuously monitoring \nemerging vulnerabilities and risks in the system, \nincluding periodic stress-tests and examination \nexercises, and the provision of risk mitigants. \n \nThe outlook for Nigeria’s external position is optimistic, \non the expectation of favourable terms of trade, \noccasioned by sustained rally in crude oil prices and an \nimprovement in domestic crude oil production. The \npositive outlook is supported by the sustenance of \ncrude oil price, propelled by the decision to cut \nproduction from May, and gains from capital \nflows and remittances. Lower crude oil earnings, \nabolishing of fuel subsidy removal, rising import \nbills and increased external debt servicing \nobligations could, however, pose downside risks \nto the accretion of external reserves. In addition, \nthe sustained monetary policy tightening by \ncentral banks across advanced economies \nincreases the risk of capital outflow. \n \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \n88 \n \nThis document is for CBN internal consumption \n \n \n \n \n \n \nSection Five\nADDITIONAL INFORMATION \n \n \n \n \n \n \n \nINTERNATIONAL \nMEETINGS \n•Regional meetings\n•Non-regional \nmeetiings\n \n \n \nCENTRAL BANK OF NIGERIA \n \n \n89 \n \nThis document is for CBN internal consumption \n 5.1 REGIONAL MEETINGS \n47th Meeting of the Technical Committee (TC) of the \nWest African Institute for Financial and Economic \nManagement (WAIFEM) was held in Banjul, The \nGambia, on 5 February 2023. The draft Minutes \nof the 43rd Meeting of the Board of Governors, \nheld virtually on 25 August 2022, was considered \nby the TC, and recommended for the Board’s \nconsideration and adoption. Highlights of the \nMeeting included the need for: \n \n• \nDeliberate actions to ensure more female \nparticipation in WAIFEM programmes, \nfollowing the observed gender imbalance \n(31.3 per cent female participation); \n• \nAfrica Capacity Building Foundation (ACBF) \nto pilot the capacity building project for \nEnhanced Leadership and Governance with \nrespect to Public Financial Management \n(ELG-PFM) in five countries - Nigeria, Ghana, \nKenya, Zimbabwe and Senegal; \n• \nWAIFEM to foster close collaboration with \ndevelopment partners, including joint training \nprogrammes with the International Monetary \nFund (IMF), World Bank, African Regional \nTechnical Assistance Centre in West Africa \n(AFRITAC West 2), Africa Training Institute (ATI), \nand Macroeconomic and Financial Management \nInstitute (MEFMI) to promote cost-effectiveness \nin service delivery; \n• \nWAIFEM to sustain discussion with the \nAfrican Development Bank (AfDB) and the \nACBF to fund training programmes on \nemerging macroeconomic management, \nleadership, and governance issues; and \n• \nContinuation \nof \nWAIFEM \nface-to-face \ntraining programmes, in addition to the \nHybrid (Blended Learning) format. \n \n49th Meeting of the Convergence Council of \nMinisters and Governors of Central Banks of the \nWest African Monetary Zone (WAMZ). The \nConvergence Council (CC) of Ministers and \nGovernors of the Central Banks of the \nMember States of the WAMZ held its 49th \nMeeting in Banjul, The Gambia, on 10 \nFebruary 2023. The Meeting deliberated on \nthe status of implementation of the WAMZ \nwork programme and activities under the \nEconomic Community of West African States \n(ECOWAS) Single Currency Programme. The \nReport of the 46th Meeting of the WAMZ’s \nCommittee of Governors (CoG) formed the \nbasis for the deliberations. Highlights of the \nMeeting included: \n• \nAdoption \nof \nthe \nMacroeconomic \nDevelopments and Convergence Report of \nend-June 2022, the study on the “Optimal \nInflation-Growth Threshold: A Case of WAMZ \nMember States”, and the roadmap for \nadoption of inflation targeting; \n \n• \nThe reduction of the financial burden on \nMember States. The ECOWAS Commission \nwas advised to allocate resources to WAMI \nand WAMA to carry out their roles as the \nproposed 2027 deadline for the launching of \nthe ECOWAS Single Currency Programme \napproaches; \n• \nThe appropriateness of the current 5.0 \nper cent inflation threshold for the WAMZ \nwas questioned, on account of the inability of \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \n90 \n \nThis document is for CBN internal consumption \nMember States to satisfy the criterion since \nits adoption. Earlier studies had suggested an \noptimal inflation threshold of about 10.0 per \ncent for the Zone; and \n• \nWAMI was directed to update the \nroadmap on inflation targeting and the pre-\nconditions set for Member States of the \nWAMZ. \n \nSecond Dakar Financing Summit for Africa's \nInfrastructure Development, Dakar, Senegal \nThe African Union Development Agency and \nthe Government of Senegal held the 2nd Dakar \nFinancing Summit for Africa's Infrastructure \nDevelopment in Dakar, Senegal, from 1 - 3 \nFebruary 2023. \nAfrican Heads of government, the African \nDevelopment Bank, development finance \ninstitutions, and institutional investors met to \narticulate the modalities for implementing 69 \ninfrastructure projects worth US$160 billion \nfor completion by 2030. The 69 projects fall \nunder the Programme for Infrastructure \nDevelopment in Africa (PIDA), a blueprint for \ninfrastructure \ndevelopment \nto \nincrease \nAfrica's \ncompetitiveness \nand \neconomic \nintegration. PIDA’s Priority Action Plan 2, was \nadopted by the African Union Assembly of \nHeads of State and Government in 2021. \nRegional \nbodies \nand \nunions \nwere \nimplementing the 69 projects in all five of \nAfrica’s regions. The projects included: \n• \nTrans-border Sub-marine Fiber point of \npresence and Regional Smart Hub Facility and \nData Center project, which would provide \ninformation and communication technology \nconnectivity to 285 million people in Ethiopia, \nKenya, Somalia, South Sudan, Tanzania, and \nUganda; \n• \nThe Gambia River Basin Development \nOrganization (OMVG) Energy Project which \ninvolves 4 countries, The Gambia, Guinea, \nGuinea-Bissau, and Senegal. It focuses on the \nrational management of the joint resources of \nRivers Gambia, Kayanga-Géba and Koliba-\nCorubal, \nwhose \nbasins \nhave \npower-\ngenerating potential; and \n• \nBaynes Hydropower project, an energy \nproject that would benefit Angola, Botswana, \nthe Democratic Republic of the Congo, \nEswatini, Lesotho, Malawi, Mozambique, \nNamibia, South Africa, Tanzania, Zambia, and \nZimbabwe. \n \n36th Ordinary Session of the Assembly of the \nAfrican Union \nThe 36th Ordinary Summit of the African \nUnion (AU) was held in Addis Ababa, Ethiopia, \nfrom 18 - 19 February 2023, with the theme \n\"The Year of African Continental Free Trade \nArea (AfCFTA): Acceleration of the African \nContinental \nFree \nTrade \nArea \nImplementation”. The deliberations at the \nsummit focused on the integration of Africa, \nensuring continental peace and security, \nsocio-economic \ndevelopment, \nrebuilding \nAfrica from the brunt of various health and \nsocio-economic crises, and strong African \nrepresentation in multi-lateral international \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \n91 \n \nThis document is for CBN internal consumption \ninstitutions. The Heads of State and \nGovernment considered, among others: \n• \nThe \nagenda, \ndraft \ndecisions, \nand \ndeclarations at the summit of the Assembly \nfor adoption, which were submitted by the \n42nd Ordinary Session of the Executive \nCouncil, held before the Summit on 15 and 16 \nFebruary 2023; \n• \nThe Institutional Reforms of the AU, \nwhich was presented by President of the \nRepublic of Rwanda, H.E. Paul Kagame; \n• \nThe activities of the Peace and Security \nCouncil (PSC) and the state of peace and \nsecurity in Africa; and \n• \nThe global political, financial, and energy \npolicy governance, presented by President of \nthe Republic of Senegal, H.E. Macky Sall, and \nthe global food crisis. \n \nRegional Workshop of the Expert Committee on \nthe Harmonization of Regulatory and Supervisory \nFramework for Banks and Non-Bank Financial \nInstitutions in ECOWAS was held in Freetown, \nSierra Leone, from 12 - 16 June 2023. The \nobjective was to validate the draft Model Act \nfor Banks and Financial Holdings Companies \nfor the ECOWAS region. Key highlights were: \n• \nThe articulation of a model Banking Act \nclarifying the terminology and ensuring its \nconsistent \napplication \nacross \nlegal \njurisdictions; and \n• \nThe agreement to establish two sub-\ncommittees to review the structure of the \nModel Act, and make recommendations \nregarding the arrangement of the sections \nand any other relevant adjustments. \n \nAnnual Meetings of the Board of Governors of the \nAfrican Development Bank Group. The 58th \nAnnual Meeting of the Board of Governors of \nthe African Development Bank and the 49th \nMeeting of the Board of Governors of the \nAfrican Development Fund (the concessional \narm of the Bank Group) was held in Sharm El \nSheikh, Egypt, from 22 - 26 May 2023, with \nthe \ntheme \n“Mobilising \nPrivate \nSector \nFinancing for Climate and Green Growth in \nAfrica”. \nThe Meetings served as a forum to discuss \nAfrica's challenges in attracting private sector \nfinancing in low-carbon investments and \npractical policies that governments could use \nto address the bottlenecks. It also served as a \nplatform to share experiences to stimulate \nprivate \nfinancing, \ndomestically \nand \ninternationally, harness capital for climate \nfinancing, and promote the transition to \ngreen growth in Africa. \n Joint Multilateral Surveillance Mission to Nigeria \nby ECOWAS Commission, West African Monetary \nAgency (WAMA), and West African Monetary \nInstitute (WAMI). The ECOWAS Commission, \nWAMA, and WAMI conducted a Joint \nMultilateral Surveillance Mission to Nigeria, \nduring the period 4 - 11 May 2023, to assess \nthe country’s macroeconomic developments \nand status of convergence in 2022, as well as \nthe outlook for 2023 within the framework of \nthe \nECOWAS \nMonetary \nCooperation \nProgramme. \nThe Mission noted that: \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \n92 \n \nThis document is for CBN internal consumption \n• \nThe Nigerian economy is recovering, \ndriven by agriculture and services; \n• \nInflationary \npressures \nremained \nelevated; \n• \nRevenue fell short of expenditure, \nleading to the widening of the budget deficit \nin 2022; \n• \nexternal sector performance improved, \nas the current account deficit narrowed to \nUS$2,490.69 in 2023Q1, from US$2,348.31 in \n2022Q4, respectively, despite the prevailing \nglobal challenges; and \nNigeria met one of the four primary criteria \n(gross external reserves) and both secondary \ncriteria under macroeconomic convergence. \n \n \n \n \n \n \n \n \n \n \n \n \n \n4.2 NON-REGIONAL MEETINGS \nThe Intergovernmental Group of Twenty-Four \nTechnical Group Meeting. The Meeting was \nheld virtually from 23 February - 2 March \n2023, with the theme “Challenges to \nStructural Transformation \nfor \nEmerging \nMarket and Developing Countries (EMDEs)”. \nDiscussions were centered on multiple issues \nthat create both long-term and immediate \npolicy challenges for the EMDEs. \nThe Virtual TGM sessions provided a forum \nfor \nMember \ncountries \nto \ndiscuss \ndevelopments in key areas of concern and \nformulate views that informed the positions \nthat the Group could articulate in global \ndiscussions and its forthcoming Spring \nMinisterial Communiqué. \nFollowing extensive deliberations, the group \nagreed on key actionable recommendations \nas follows: \n• \nThe setting up and implementation of \nresponsive country models in resource \nallocation and operational efficiency; \n• \nEnsuring a decent transition that focuses \non sustainable and inclusive growth among \nmembers; \n• \nIncreased \ntransparency \nin \nthe \nenforcement of agreed benchmarks and \ngrowth-enhancing financing options in the \nWorld Bank Group operations; \n• \nWelcomed new deals that could aid \nstructural transformation, by shifting from \nausterity to investment-led public spending, \nprogressive taxation, and tailored policies; \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \n93 \n \nThis document is for CBN internal consumption \n• \n Advocated capital efficiency among \nmember countries, and the need to play an \nactive role in defining ambition; \n• \nCalled for caution among members in \npromoting private financing mechanisms, \nconsidering potential borrower costs and the \nchronic deficiency of private development \nfinance; \n• \nResolved \nto \nincrease \ncapital \ncontribution, implement concrete actions, \nensure equitable burden sharing and financial \ncommitments; and \n• \nRamped up Action Plan for Climate and \nSDG Investment Mobilisation, in the short \nterm, leveraging on existing blended finance \ntransactions and funding with successful tract \nrecords. \n \n2023 Spring Meetings of the Board of \nGovernors of the International Monetary Fund \n/ The World Bank Group, 10—16 April 2023. \nThe Meetings of the Board of Governors of \nthe \nWorld \nBank \nGroup \n(WBG), \nthe \nInternational Monetary Fund (IMF) and the \nInter-Governmental Group of Twenty-Four \n(G-24) on International Monetary Affairs and \nDevelopments were held In-person and \nvirtually from April 10– 16, 2023. The Nigerian \ndelegation was led by the Honorable Minister \nof Finance, Budget and National Planning, \nMrs. Zainab Ahmed. The sideline Meetings \nincluded those of the International Monetary \nand Finance Committee (IMFC) of the \nGovernors \nof \nIMF, \nthe \nDevelopment \nCommittee (DC) of the World Bank Group, as \nwell as the Meetings of the Ministers of the G-\n24. The proceedings of the Meetings were; \nThe G24 Ministers: \n• \nCalled for structural changes to prevent \nfurther erosion of the Bank and Fund’s \nlegitimacy and reinvigorate multilateralism, \nnoting that, “Multilateralism can only exist \nwhere there is expanded consultation \nbetween \ndeveloped \nand \ndeveloping \ncountries, the broader UN system and the \nBretton Woods Institutions for a more \nbalanced governance structure.”; \n• \nExpressed \nconcerns \nthat \nmore \nconcessional \nlending \nto \nmiddle-income \ncountries due to the Bank’s shifting mandate, \ncould be at the expense of poorer countries, \nthe struggle to adequately replenish both the \nBank’s IDA and the Fund’s Poverty Reduction \nand Growth Trust (PRGT) being an early \nindication of this challenge; \n• \nWelcomed the establishment of a new \nLoss and Damage Fund agreed at the 27th \nUnited Nations Conference on Climate \nChange (COP27) in November 2022, and \ncalled on advanced economies to step up \ntheir commitments; \n• \nExpressed concern on the increasing \nrisks to financial stability that could disrupt \neconomic recovery. Thus, in managing the \nexit from accommodative macro-economic \npolicies, policymakers need to strike a \nbalance between containing surging inflation \nand supporting economic recovery; and \n• \nObserved that Faster than expected \nincreases in interest rates in advanced \neconomies could raise rates globally and \ntrigger capital outflows from developing \ncountries, reducing access to financial \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \n94 \n \nThis document is for CBN internal consumption \nmarkets, \nand \nfurther \nincreasing \ndebt \nvulnerabilities. \n \nThe International Monetary and Financial \nCommittee (IMFC): \n• \nCondemned the war in Ukraine and \nstressed that it is causing immense human \nsuffering and exacerbating existing fragilities \nin the global economy - constraining growth, \nincreasing inflation, disrupting supply chains, \nheightening energy and food insecurity, and \nelevating financial stability risks; \n \n• \nRemained committed to the IMF’s policy \nadvice and analytical work on policies to \naddress \nfinancial \nsector \nvulnerabilities, \ncontain inflation, tackle elevated debt levels, \nand \nthe \nimpact \nof \ngeo-economic \nfragmentation; and \n• \nWelcomed the IMF’s strong policy and \nfinancial support to low-income countries, \nincluding those benefiting from the new \ntemporary food shock window and Poverty \nReduction and Growth Trust-supported \nprograms. \nThe Development Committee: \n• \nHighlighted process made on the \nEvolution Roadmap of the World Bank Group \n(WBG) and look forward to more work to \nachieve major milestones during their \nmeeting in October 2023 in Marrakech. They \ncharged the Board of Executive Directors and \nWBG management to finalize the work plan \nwith detailed actions to be taken; \n• \nWelcomed increased support for nature \nand biodiversity, and other environmental \nchallenges and look forward to seeing \nupdates on the Gender Strategy and the mid-\nterm review of the Fragility, Conflict, and \nViolence Strategy; \n• \nRecognized that Russia’s invasion of \nUkraine has continued to have massive \nhumanitarian \nconsequences \nand \na \ndetrimental impact on the global economy \nand called for continued economic support to \nUkraine and other countries affected by the \nwar; \n• \nExpressed their commitment to ensuring \nthat the WBG has adequate financial capacity \nto respond to development challenges and \nsupport its expanded mission. They strongly \nreaffirmed their commitment to boosting the \nWBG’s financial capacity, including through a \nrevision of IBRD’s (International Bank for \nReconstruction and Development) minimum \nEquity-to-Loan Ratio to 19.0 per cent, a \nHybrid Capital pilot for capital-market \ninvestors, and a scaled-up bilateral guarantee \nprogram. They looked forward to seeing \nupdates from the Executive Directors on the \nimplementation of these initiatives, which \nhave the potential to add US$50.00 billion \nadditional financing capacity in the next ten \nyears; \n• \nAgreed to consider a proposal to remove \nthe Statutory Lending Limit (SLL) from the \nArticles of Agreement; \n• \nCommended the WBG management and \nstaff for responding at scale to the \nunanticipated crises, with historic surges in \ndevelopment financing that have sustained \nthe fight against poverty. The WBG delivered \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \n95 \n \nThis document is for CBN internal consumption \na record US$330.00 billion during the last \nthree-and-a-half fiscal years; \n• \nObserved that the WBG was also the \nworld’s largest provider of climate finance to \ndeveloping countries in the last three-and-a-\nhalf fiscal years, reaching almost US$90.00 \nbillion, and has outlined its plan for alignment \nwith the Paris Agreement; \n• \nExpressed their deep appreciation to Mr. \nDavid Malpass for his strong and steadfast \nleadership of the WBG during a historically \nchallenging \nperiod, \nincluding \nan \nunprecedented surge in financing in response \nto the multiple crises affecting global \ndevelopment outcomes. They value his \ncommitment to the WBG mission, its strategic \ngoals \nand \ncountry-level \ndevelopment \noutcomes. They also commended his support \nto staff, as well as his strong leadership, which \nhas made possible the many significant \naccomplishments during his tenure; and \n• \nReiterated \nits \ncall \nfor \ngreater \ninternational cooperation and strengthened \nmultilateralism to safeguard global economic \nintegration.", "source": "BOG", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Quarterly_Economic_Reports/2023 HALF-YEAR.pdf"}
{"doc_id": "request_BOG", "text": "April 26, 2026\n\nResearch Department\nBank of Ghana\nGhana\nEmail: research@bog.gov.gh\n\nDear Research Department,\n\nRe: Formal Data Request for Academic NLP Research — NhauFinance\n\nMy name is Takudzwa Chirindo, and I am a graduate student in the M.S. Data Analytics Candidate program at George Washington University (expected May 2027). I am writing to formally request access to publicly available and internally archived textual publications from Bank of Ghana for use in an academic research project.\n\nPROJECT BACKGROUND\n\nI am developing NhauFinance, a domain-adapted financial language model for African markets. The project involves continued pretraining of FinBERT (ProsusAI/finbert, 110M parameters) on a curated corpus of African corporate and central bank text, targeting four downstream tasks: central bank communication sentiment classification (Hawkish / Neutral / Dovish), financial distress detection, corporate event detection, and African financial named-entity recognition. The model and all benchmark test sets will be released publicly on HuggingFace (TakueGhost/NhauFinance) and GitHub (github.com/TakueGhost/NhauFinance) under an open research licence.\n\nDATA REQUEST\n\nI respectfully request the following materials from Bank of Ghana, in machine-readable format (plain text, HTML, or PDF) where available:\n\n 1. Monetary Policy Committee press releases and statements (all available years)\n 2. Governor speeches and public addresses\n 3. Monetary Policy Report publications\n 4. Financial Stability Report publications\n 5. Bank of Ghana Annual Report\n\nWhere possible, I request coverage from 2000 to the present. Earlier records are equally welcome and will be incorporated.\n\nINTENDED USE\n\nAll requested materials will be used solely for academic NLP research. Documents will be tokenised, deduplicated, and used to train a text model. No raw documents will be redistributed in any form. I am happy to enter into a data use agreement, supply a formal research protocol, or provide any additional documentation upon request.\n\nThis request is made in the spirit of the Right to Information Act (2019).\n\nThank you for your time and for supporting academic research on African financial markets. I would be grateful for confirmation of receipt and an indication of what materials can be provided and in what timeframe.\n\nRespectfully,\n\nTakudzwa Chirindo\nM.S. Data Analytics Candidate\nGeorge Washington University\ntkchirindo@gmail.com | +1-240-351-7339\nGitHub: github.com/TakueGhost | LinkedIn: linkedin.com/in/takudzwa-chirindo", "source": "BOG", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": ""}
{"doc_id": "ef3e0bceec3ab76418a82821bb747a85", "text": "PUBLIC \nPUBLIC \n \n \nGood morning, ladies and gentlemen of the media and welcome to the press briefing for the 122nd \nMonetary Policy Committee (MPC) meetings, which is also the MPC’s first meeting of the year 2025. \nDuring the meetings, the Committee deliberated on macroeconomic developments in 2024, assessed the \ncurrent state of the economy, and the risks to the inflation and growth outlook. A summary of the \nassessment and key considerations that informed the Committee’s decision on the monetary policy rate \nis provided below: \n \nA. Global Developments \n \n1. \nThe momentum in global economic growth observed at the beginning of 2024 was sustained \nthroughout the year. The January 2025 World Economic Outlook (WEO) report indicates an upward \nrevision in growth from 3.2 percent in the October 2024 WEO to 3.3 percent. The better-than-expected \nglobal growth outturn in 2024 was primarily due to strong growth in the U.S, a pickup of economic \nactivity in China, and stability in Emerging Market Economies, which together offset weaker growth in \nthe Euro Area. Global growth is expected to remain stable in 2025, underpinned by low inflation, steady \nemployment growth and a supportive monetary policy stance. However, rising uncertainty associated \nwith trade protectionist policies and geopolitics may weigh in on business and consumer confidence, \nand in the process dampen the growth outlook for 2025. \n \n2. \nInflation continued its downward trend throughout 2024, as most central banks moved \ncloser to their targets. The ease in inflationary pressures was largely supported by subdued crude oil \nprices and the gains from tighter monetary policy stances adopted earlier. However, there are signs of \nunderlying inflationary pressures in the services sector and the tight labour market conditions. In the \noutlook, global headline inflation is forecast to decline further in 2025 and 2026 as core inflation trends \ndown mainly from slower wage growth. \n \n3. \nGlobal financial conditions eased somewhat in late 2024, but remained restrictive. Policy \nrates globally have remained restrictive due to slower-than-expected disinflation in some regions, \nsurging long-term bond yields in advanced economies, and increasing uncertainty surrounding changes \nto U.S. trade and immigration policies. For Emerging Market and Developing Economies, the tight \nmonetary policy stance in Advanced Economies and rising uncertainty related to policy shifts by the \nnew US administration have weighed on equity prices and led to volatile investor sentiments. Looking \nahead, financial conditions are expected to ease gradually as policy stance becomes more \n \n \n2\naccommodative as inflation cools off in the United States and in the Euro Area. These conditions are \nexpected to result in improvements in investor sentiments towards Emerging Market and Developing \nEconomies. \n \n \nB. Domestic Macroeconomic Conditions \n \n4. \nOn the domestic front, economic activity was stronger with higher-than-projected growth \nin the first three quarters of 2024. The latest data from the Ghana Statistical Service showed that real \nGDP expanded at an annual rate of 6.3 percent during the first three quarters of 2024, relative to 2.6 \npercent during the corresponding period in 2023. Non-oil GDP grew by 6.2 percent from 3.3 percent \nover the same comparative period. The strong growth outturn was mainly driven by gold production in \nthe industry sector. In the fourth quarter of 2024, the Bank’s Composite Index of Economic Activity \n(CIEA) suggests that growth will remain strong, driven in large parts by international trade activities, \nincreased credit to the private sector by banks, construction activities, and tourist-related spending. \n \n5. \nThe latest confidence surveys conducted in December 2024 showed an improvement in both \nconsumer and business confidence. Consumer confidence improved largely on account of optimism \nabout future economic conditions. Business confidence also picked up as firms met their short-term \ntargets and expressed positive sentiments about company and industry prospects in line with improving \nmacroeconomic conditions. Ghana’s Purchasing Managers’ Index (PMI), however, declined to 49.4 in \nDecember 2024 from 52.5 in the previous month largely due to a slowdown in firms’ operations during \nthe election period. \n \n6. \nPrice developments in 2024 indicated a slowdown in the disinflation process resulting \nmainly from food price pressures. At the beginning of the year, inflation rose from 23.2 percent in \nDecember 2023 to 25.8 percent in March 2024. Thereafter, it declined steadily to 20.4 percent in August \nbut has since risen to 23.8 percent in December 2024, primarily due to food price increases. The \nincreased prices in the food sector were largely attributable to dry weather conditions experienced in the \nearlier parts of the year, which adversely affected harvest yields. In contrast to food inflation, non-food \ninflation declined steadily during the last quarter of the year, settling at 20.3 percent. \n \n7. \nTotal liquidity, measured through the key monetary aggregates, declined in 2024. Annual \ngrowth in broad money supply (M2+) decreased to 31.9 percent in December 2024, relative to 38.7 \npercent in December 2023. The decline in M2+ growth was attributable to a slower pace of growth in \nall the components – demand deposits, savings and time deposits, and foreign currency deposits – except \nfor currency held by the public, which increased over the same comparative period. \n \n8. \nPrivate sector credit growth continued to increase towards pre-2022 macroeconomic crisis \nlevels, albeit slowly. Nominal growth in the private sector credit increased to 26.3 percent in December \n2024 from 10.7 percent recorded in the corresponding period of 2023. In real terms, credit to the private \nsector increased by 2.0 percent relative to a 10.2 percent contraction recorded over the same comparative \nperiod in the previous year. \n \n9. \nThe banking sector continues to be profitable, well-capitalized and liquid. Assets of the \nbanking sector grew by 33.8 percent in 2024. Capital Adequacy Ratio (CAR) with reliefs grew \n \n \n3\nmarginally to 14.0 percent in December 2024 from 13.9 percent in December 2023. However, CAR \nwithout reliefs rose to 11.3 percent in December 2024, higher than the 8.3 percent recorded in December \n2023. Profits went up in 2024 relative to 2023, but the pace of growth slowed, resulting in the moderation \nof profitability indicators during the period. In the outlook elevated credit risk remained the main upside \nrisk to the banking sector. The industry’s Non-Performing Loans (NPL) ratio increased to 21.8 percent \nin December 2024, up from 20.6 percent in December 2023. The resilience of the banking sector in 2024 \nwas supported by improved domestic macroeconomic conditions. \n \n10. \nMoney market rates broadly trended downwards. The 91-day and 182-day Treasury bill rates \ndeclined to 27.73 percent and 28.43 percent respectively, in December 2024, from 29.39 percent and \n31.70 percent respectively, in December 2023. Similarly, the rate on the 364-day instrument declined to \n29.95 percent in December 2024 from 32.97 percent in December 2023. Additionally, the Interbank \nWeighted Average Rate (IWAR) dropped to 27.03 percent in December 2024 from 30.19 percent a year \nearlier. This decline contributed to a reduction in average lending rates for banks from 33.75 percent to \n30.25 percent over the same period. \n \n11. \nThe Ghana Stock Exchange recorded a strong performance in 2024. The Ghana Stock \nExchange Composite Index (GSE-CI) gained 56.2 percent on a year-on-year basis in December 2024, \ncompared to a gain of 28.1 percent for the same period last year. The robust performance of the GSE-CI \nwas underpinned by improved investor sentiments, significant recovery in the profitability of listed \nfinancial institutions and improved liquidity on the market. Market capitalisation increased to \nGH¢111.36 billion at end December 2024, compared to GH¢73.89 billion in the corresponding period \nof 2023. \n \n12. \nPrices of the major export commodities on the international commodities market traded \nmixed in 2024. Cocoa prices rose sharply to US$10,869.1 per tonne in December 2024 from US$4,235.6 \nper tonne in December 2023, on the back of reduced supplies due to adverse weather conditions which \naffected top producers such as Cote d’Ivoire. Gold prices increased by 29.4 percent to US$2,641.5 per \nfine ounce in December 2024 from US$2,035.4 per fine ounce a year earlier. In contrast, crude oil prices \nfell by 5.3 percent year-on-year to settle at an average price of US$73.2 per barrel in December 2024, \nfollowing concerns over supply risks and the prospects of increased supply in 2025. \n \n13. \nThe external sector position improved significantly in 2024 on account of increased trade \nsurplus and lower capital outflows. The current account recorded a provisional surplus of US$3.8 \nbillion, compared with a surplus of US$1.4 billion in 2023, driven mainly by higher gold and crude oil \nexports, as well as strong remittance inflows. This, together with a lower net outflow of US$588 million \nin the capital and financial account, relative to a net outflow of US$733 million in 2023, contributed to \nan improved balance of payments position for the year. The lower outflow in the capital and financial \naccount reflects Ghana’s successful debt restructuring and the IMF ECF programme. These favourable \ndevelopments resulted in an improved balance of payments surplus of US$3.1 billion, compared to a \nsurplus of US$518 million recorded in 2023. \n \n14. \nInternational reserves build-up was faster than programmed in 2024. Gross International \nReserves (GIR) increased to a stock position of US$8.98 billion at the end of 2024 and was enough to \ncover 4.0 months of imports, exceeding targets under the IMF programme. This compares favourably \nwith the end-December 2023 GIR of US$5.92 billion (2.7 months of imports). \n \n \n4\n \n15. \nThe cedi came under intermittent pressures during the first three quarters of the year, but \nregained some value in the last quarter of the year. Increased demand for foreign exchange to support \nenergy related payments, uncertainty around timelines on conclusion of the external bond restructuring, \nuncertainties around COCOBOD financing arrangements, and election-related jitters exerted pressure \non the currency and by the end of the third quarter, the currency had depreciated by 24.8 percent on a \nyear-on-year basis. In the last quarter, commercial banks’ participation in the gold purchase programme \nfor foreign currency, positive sentiments from the progress made in the debt restructuring, and continued \ntight liquidity management caused the currency to appreciate. By the end of the year, the currency had \ndepreciated by 19.0 percent against the US dollar. \n \n \nC. Summary and Outlook \n \n16. \nThe Committee noted that global economic conditions broadly improved in 2024. Global \ninflationary pressures have gradually eased over the period, which has led to easing monetary policy \nstance across several countries. Consequently, global financial conditions are expected to ease gradually \nas policy stances become more accommodative and inflation targets in Advanced Economies are met \nand expectations anchored. These conditions are expected to result in improvements in investor \nsentiments towards emerging market and developing economies. On top of the projected steady growth \nfor 2025, the international markets have priced in a much stronger US economy stemming from the \npolicies to be implemented by the new US administration. This has already instigated a stronger US \ndollar with implications for emerging markets and developing economies, including Ghana. \nComplementary fiscal and monetary policies will therefore have to be carefully set to prevent spillovers \nto the Ghanaian economy. \n \n17. \nExternal sector conditions remain positive, with sustained and stronger-than-programmed \nrebuilding of reserve buffers contributing to the stability of the domestic currency. The \nperformance of the external sector was mainly driven by strong growth in gold exports, which also \nlargely impacted positively on growth. In the outlook, the external sector is expected to remain strong \nas commodity prices remain favourable amid improvements in production. Overall, while the external \nsector conditions are expected to provide an anchor to exchange rate stability, key risks in the outlook \nincluding challenges in the energy sector will have to be closely monitored. \n \n18. \nThe stronger-than-projected growth and generally improved macroeconomic conditions \nare spilling over positively to the banking sector. To sustain this effort, the Bank of Ghana will \ncontinue to ensure that banks with capital gaps adhere to their committed recapitalisation plans to shore \nup solvency. Supervisory activities will be intensified to ensure that banks continue to address the high \nNPLs, which poses potential risks to the stability of the industry. The improvement in domestic \nmacroeconomic conditions is also expected to bolster debt servicing capabilities of corporate and \nhousehold sectors, which would help mitigate further build-up of NPLs within the industry. \n \n19. \nThe inflation profile remains elevated, largely driven by food price movements, especially \nin the last quarter of the year. The climate-related factors including the dry spell in some parts of the \nfood-growing regions of the country and the late onset of rains, negatively affected production, while \nsupply chain weaknesses generally affected food prices. While the inflation outturn for the year 2024 \n \n \n5\ndeviated from target, it is expected that the disinflation process will resume, contingent on renewed \nefforts at fiscal consolidation, which is anticipated in the new administration’s economic policy agenda \nand the yet-to-be-presented 2025 budget statement. The Bank’s latest inflation forecast shows a steady \ndecline and return to the path of disinflation, with an extended time horizon of achieving the medium-\nterm target of 8±2 percent. \n \n20. \nUnder the circumstances, the Committee decided to keep the monetary policy rate unchanged at \n27.0 percent. \n \n \nD. Informational Note \n \nThe next Monetary Policy Committee (MPC) meeting is scheduled for March 25-28, 2025. The Meeting \nwill conclude on Monday, March 31, 2025, with the announcement of the policy decision.", "source": "BOG", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///SARB/MPC_Statements/MPC-Press-Statement-January-2025.pdf"}
{"doc_id": "b4dbfcc64f13134f7a4b336977ee9e75", "text": "MONETARY POLICY STATEMENT \n \n \n \n \n \n“ESTABLISHMENT OF AN INTER-BANK FOREIGN EXCHANGE \nMARKET TO RESTORE COMPETITIVENESS” \n \n \n \n \n \n \n \nRESERVE BANK OF ZIMBABWE \n \n20 FEBRUARY 2019 \n2 \n \n \nCONTENTS \nSECTION ONE: INTRODUCTION ................................................................ 6 \n \nSECTION TWO: NEW MONETARY POLICY MEASURES ..................... 9 \nEstablishment of an Inter-bank Foreign Exchange Market………..……………9 \nLocal Settlement of Nostro FCA Transfers ........................................................ 12 \nLiquidity Management ........................................................................................ 12 \nIFRS 9 Implementation ....................................................................................... 12 \nMacro-Prudential Policy Framework .................................................................. 13 \nAnti-money Laundering Measures ..................................................................... 14 \nCyber Risk Management .................................................................................... 14 \nMigration to Euro Mastercard Visa (EMV) Technology ................................... 15 \n \nSECTION THREE: ECONOMIC OUTLOOK AND CONCLUSION ...... 16 \n \nANNEXURE I: GLOBAL & DOMESTIC ECONOMIC & FINANCIAL \nCONDITIONS UNDERPINNING CURRENT MONETARY POLICY \nDECISIONS ....................................................................................................... 19 \nGlobal and Regional Economic Developments .................................................. 19 \nCommodity Price Developments ........................................................................ 21 \nGold Deliveries to Fidelity Printers & Refineries .............................................. 23 \n \nANNEXURE II BALANCE OF PAYMENTS DEVELOPMENTS ............ 25 \nServices Account Developments ........................................................................ 27 \nPrimary Income Account Developments ............................................................ 28 \nForeign Currency Receipts ................................................................................. 29 \nPrivate Sector Debt ............................................................................................. 30 \n \nANNEXURE III INFLATION DEVELOPMENTS ...................................... 32 \n \nANNEXURE IV MONETARY DEVELOPMENTS ..................................... 34 \n \nANNEXURE V FINANCIAL SECTOR DEVELOPMENTS ...................... 36 \n3 \n \nBanking Sector Architecture ............................................................................... 36 \nPerformance of the Banking Sector .................................................................... 36 \nCapitalisation ...................................................................................................... 38 \nBanking Sector Deposits ..................................................................................... 39 \nLoans and Advances ........................................................................................... 42 \nLoan Portfolio Quality ........................................................................................ 44 \nDeposit Insurance Payments ............................................................................... 46 \nBanking Sector Developments…………………………………………………47 \n \nANNEXURE VI DEVELOPMENTS ON THE ZIMBABWE STOCK \nEXCHANGE ...................................................................................................... 48 \n \nANNEXURE VII STATUS AND CONDITION OF MICROFINANCE \nSECTOR ............................................................................................................ 52 \nPerformance of Deposit-Taking Microfinance Institutions ................................ 52 \nPerformance of Credit-Only Microfinance Institutions ...................................... 54 \nDistribution of Loans .......................................................................................... 57 \nProfitability ......................................................................................................... 58 \nSocial Performance Management ....................................................................... 58 \n \nANNEXURE VIII FINANCIAL INCLUSION .............................................. 59 \nCredit Infrastructure ............................................................................................ 61 \n \nANNEXURE IX NATIONAL PAYMENT \nSYSTEMS………………………………………….……………….....………64 \nSWIFT Security Customer Program ................................................................... 66 \n \n \n \n \n4 \n \nLIST OF TABLES \nTable 1: Current and Proposed Retention Thresholds ........................................ 12 \nTable 2: Global Economic Growth & Outlook (%) ............................................ 19 \nTable 3: Global Foreign Currency Receipts (USD million) ............................... 29 \nTable 4: External Loan Approvals per Sector .................................................... 30 \nTable 5: Architecture of the Banking Sector ...................................................... 36 \nTable 6: Financial Soundness Indicators ............................................................ 37 \nTable 7: Banking Sector Capitalisation ($ million) ............................................ 38 \nTable 8: Total Nostro FCA and RTGS FCA Balances Summary as at 31 \nDecember 2018 ................................................................................................... 42 \nTable 9: Deposit Insurance Payments as at 31 December 2018 ......................... 47 \nTable 10: Trend in the Key Performance Indicators for the DTMFIS ............... 53 \nTable 11: Key Performance Indicators, September 2017 to September 2018.... 55 \n \n \n \n5 \n \nLIST OF FIGURES \nFigure 1: Commodity Price Indices (2010 = 100): 2015 to 2018 ....................... 21 \nFigure 2: Gold Deliveries to Fidelity Printers (Kgs): Jan to Dec 2018 .............. 24 \nFigure 3: Merchandise Trade Developments (US$ million) .............................. 26 \nFigure 4: Annual Inflation Profile....................................................................... 35 \nFigure 5: Month on Month Inflation ................................................................... 33 \nFigure 6: Money Supply ..................................................................................... 35 \nFigure 7: Trend in Banking Sector Deposits ($ million) .................................... 39 \nFigure 8: Composition of Deposits as at 31 December 2018 ............................. 43 \nFigure 9: Composition of Deposits by Nature of Currency ................................ 44 \nFigure 10: Loans & Advances of Loans as at 21 December 2018 ..................... 43 \nFigure 11: Sectoral Distribution.......................................................................... 44 \nFigure 12: Trend in Non-performing loans 2011 – 31 December 2018 ............. 45 \nFigure 13: Prudential Liquidity Ratio Trend (%) ............................................... 46 \nFigure 14: Zimbabwe Stock Exchnage Indices .................................................. 49 \nFigure 15: ZSE Market Turnover ....................................................................... 50 \nFigure 16: Market Capitalisation ........................................................................ 50 \nFigure 17: Loan Distribution 2017-2018 ............................................................ 57 \nFigure 18: Financial Inclusion Indicators ........................................................... 59 \nFigure 19: Cumulative Credit Registry Inquiries May 2019-Dec 2018...……..62 \nFigure 20: Monthly Inquiries by Banks & MFIs………………………………62 \nFigure 21: Annual Electronic Transactional Activities from 2009-1018……...64 \nFigure 22: Structure of Aggregate Payment Stream Values - 2018…….……..65 \n \n \n \n6 \n \nSECTION ONE \n \nINTRODUCTION \n \nSince the last Monetary Policy Statement on 1st October 2018, Zimbabwe has \nwitnessed significant changes on the economic front. The economy took a \ndifferent course of direction from a positive economic trajectory to an inflationary \nenvironment. This situation needs immediate redress in order to restore value for \nmoney. The foreign exchange premiums on the parallel market which ranged \nfrom 1.40 to 1.80 to the US dollar in September 2018 increased to the current \nlevels of between 3.00 to 4.00. This movement in forex premiums has had \nnegative pass-through effects on inflation which increased particularly from the \nSeptember year-on-year level of 5.4% to 20.9% in October and closed the year at \n42.09%. \n \nOn the positive side, the separation of bank accounts into NOSTRO FCAs and \nRTGS FCAs has yielded positive results as reflected by the significant increase \nin the Nostro FCAs to US$451.2 million as at 31st January 2019, compared to \nUS$240.5 million at the beginning of October 2018, a growth of 87.6%. \n \nThe significant shift in economic fundamentals during the last quarter of 2018 \nalso increased the practice by retailers of charging goods and services on the basis \nof a multi-tier pricing system, where a single product has different prices \ndepending on the mode of payment e.g. USD cash, electronic payment, mobile \nmoney and bond notes. This situation has continued to put pressure on the \ncountry’s balance of payments position. \n \nThe current pricing structure indicates that the majority of transactions in the \neconomy are now largely being conducted in electronic money and bond notes at \n7 \n \nan implied parallel market exchange rate of around 3.0 to 3.5 to the USD. In this \nrespect, continuing to use the USD as a unit of account in the economy, when its \nvalue has drifted away from the value of the RTGS denominated money supply \nhas brought forth a number of challenges. The challenges include multi-tier \npricing by business, speculative pricing, loss of government revenue, valuation \nand accounting difficulties, asset-liability mismatches and negative investor \nconfidence. \n \nThe current monetary arrangements, if maintained, could pose the risk of a costly \nre-dollarisation of the economy which will move the economy into a recession. \nThis is evidenced by the fact that some businesses are already gradually reducing \nprices due to low demand in the economy. Moreover, some of those charging in \nforeign currency have also been experiencing reduced demand for their products \nand are, thus, reverting to pricing in RTGS and/or bond notes. \n \nExporters on the other hand, are fast becoming uncompetitive as the export \nincentive scheme has been eroded by the forex premiums induced inflation. Such \na scenario is not conducive for enhancing exports and diaspora remittances. \nIntroduction of a market determined mechanism for trading of US dollars with \nRTGS balances and bond notes has become imperative. Similarly, without a \nformal guidance on the relative values of the RTGS, bond notes and the USDs, \nthe transacting public is currently being prejudiced through ad hoc pricing by \nbusinesses which factor in different implied parallel market exchange rates in \ntheir pricing systems. This needs to be corrected. \n \nThis Statement, therefore, presents policies aimed at establishing a trading \nmechanism of RTGS balances and bond notes with international currencies \nthrough establishing an inter-bank foreign exchange market to restore domestic \ncompetitiveness and promote growth. The measures are also meant to strengthen \n8 \n \ndemand for the domestic forms of payment and to preserve foreign currency for \nexternal payments purposes that include importation of goods and services, \nforeign dividend payments, business and personal travel and servicing of \ncountry’s external obligations. The measures in this Statement are necessary to \npreserve the purchasing power of RTGS money and to restore export \ncompetitiveness within the economy. \n \nThe rest of the monetary policy statement is organised as follows. Section two \ndiscusses the new monetary policy measures. Section three discusses the outlook \nand conclusion. The statement also contains an Annex which looks at the global \nand domestic economic and financial developments. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9 \n \nSECTION TWO \nNEW MONETARY POLICY MEASURES \n \n1. Establishment of an Inter-bank Foreign Exchange Market \n \nThe Bank has taken note of the excellent contributions from the business \ncommunity, bankers, the academia, the media and members of the public on the \nneed to establish an inter-bank foreign exchange market to formalise the selling \nand buying of US$s through banks and bureaux de change. This is essential in \norder to bring sanity in the foreign currency market whilst at the same time \npromoting exports, diaspora remittances and investments for the good of our \nnational economy. \n \nThe Bank considered the implications - accounting, financial, economic, legal \nand social - that are embedded in the establishment of an inter-bank forex market \nwithin the context of the current national payment systems made up of RTGS, \nmobile payment platforms, point of sale (POS), bond notes and coins. \n \nAfter taking account of the implications and putting in place safeguards to \nmaintain stability in the forex market, the Bank is, with immediate effect, \nestablishing an inter-bank foreign exchange market in Zimbabwe to \nformalise the trading of RTGS balances and bond notes with US$s and other \ncurrencies on a willing-buyer willing-seller basis through banks and bureaux \nde change under the following framework: \n \ni. \nDenominating the existing RTGS balances, bond notes and coins in \ncirculation as RTGS dollars in order to establish an exchange rate between \nthe current monetary balances and foreign currency. The RTGS dollars \n10 \n \nthus become part of the multi-currency system in Zimbabwe. The legal \ninstrument to give effect to this has been prepared. \n \nii. \nThe RTGS dollars shall be used by all entities (including government) and \nindividuals in Zimbabwe for the purposes of pricing of goods and services, \nrecord debts, accounting and settlement of domestic transactions. \n \niii. \nThe use of RTGS dollars for domestic transactions will eliminate the \nexistence of the multi-pricing system and charging of goods and services \nin foreign currency within the domestic economy. In this regard, prices \nshould remain at their current levels and or to start to decline in sympathy \nwith the stability in the exchange rate given that the current monetary \nbalances have not been changed. In this respect, the RBZ will commit all \nits efforts to use the instruments at its disposal to maintain stability of the \nexchange rate. \n \niv. \nThe Bank has arranged sufficient lines of credit to enable it to maintain \nadequate foreign currency to underpin the foreign exchange market. This \nis essential to restore the purchasing power of RTGS balances through \nsafeguarding price stability emanating from the pass-through effects of \nexchange rate movements. \n \nv. \nForeign currency from the inter-bank market shall be utilised for current \nbonafide foreign payment invoices except for education fees. \n \nvi. \nAll foreign liabilities or legacy debts due to suppliers and service providers \nsuch as the International Air Transport Association (IATA), declared \ndividends, etc shall be treated separately after registering such transactions \nwith Exchange Control for the purposes of providing the Bank with \n11 \n \nsufficient information that will allow it to determine the roadmap for \norderly expunging the legacy debt. \n \nvii. \nForeign currency requirements for Government expenditure and other \nessential commodities that include, fuel, cooking oil, electricity, medicines \nand water chemicals shall continue to be made available through the \nexisting letters of credit facilities and/or the Foreign Exchange Allocations \nCommittee. \n \nviii. \nBanks shall report activities of the inter-bank foreign currency market to \nthe Bank that shall closely monitor the foreign currency trades on a daily \nbasis using the form and format stipulated by the Bank. \n \nix. \nBureaux de change shall be authorised to purchase foreign currency \nwithout limits but shall be limited to sell foreign currency for small \ntransactions such as subscriptions, business and personal travel up to a \nmaximum aggregate daily limit of US$10 000 per bureau de change. Like \nwith banks, bureaux de change and their agents shall report their activities \nof the inter-bank on a daily basis as required by the Bank. \n \nx. \nIn order to allow exporters to benefit from the inter-bank foreign currency \nmarket and to promote uninterrupted supply of forex in the economy, the \nexport retention thresholds which are in line with regional practice shall be \nas follows: \n \n \n \n \n \n12 \n \nTable 1: Current and Proposed Retention Thresholds \nSector \nLevel \nManufacturing \n80 \nGold (Large scale producers) \n55 \nGold (Small scale producers) \n55 \nAll other minerals \n50 \nTobacco & cotton merchants (for input schemes) \n80 \nTobacco & cotton growers \n30 \nHorticulture \n80 \nTransport \n80 \nTourism \n80 \n \nxi. \nSimilarly, in order to enhance liquidity within the foreign currency market, \nexporters shall be entitled to utilise their retained export receipts within 30 \ndays, after which the unutilised export receipts will be offloaded into the \nmarket at the prevailing market exchange rate. \n \nxii. \nAll international remittances and individual funds received from offshore \nshall continue to be treated as free funds. \n \n2. Local Settlement of Nostro FCA Transfers \nGiven the successful completion of the separation of RTGS FCAs and Nostro \nFCAs, the Bank is, with effect from 25th February 2019, putting in place a local \nNostro FCAs settlement platform to allow for domestic inter-bank settlement of \nNostro FCA transfers. \n \n3. Liquidity Management \n \nTo anchor price stability, the Bank shall aggressively intervene in the market to \nsterilize liquidity so as to help contain inflationary and exchange rate pressures. \nThe Bank will also implement a monetary targeting framework, with monetary \naggregates as operational targets for monetary policy. Under this framework, the \n13 \n \nBank will appropriately target growth in base money with a view to help stabilize \nand anchor macroeconomic stability. The existing monetary policy instruments, \nincluding continued issuance of savings bonds and changes in the statutory \nreserve requirements, will be instrumental in achieving the reserve money target. \nThe fiscal stance taken by Government to reduce recourse to Central Bank \noverdraft and to limit the overdraft to statutory levels will provide further impetus \non the Bank’s ability to contain pressures in the goods and foreign exchange \nmarket. \n \n4. IFRS 9 Implementation \n \nFollowing the initial publication of International Financial Reporting Standard \n(IFRS) 9 compliant interim financial statements for the period ended 30 June \n2018, banks will be publishing 2018 year–end accounts by 31 March 2019. The \nimplementation of IFRS 9 represents a significant milestone in financial stability \nenhancement due to the forward-looking nature of provisions set under the new \nstandard. \n \n5. Macro-Prudential Policy Framework \n \nAs part of ongoing initiatives to strengthen the stability and resilience of the \nfinancial system, the Bank is putting in place a macro-prudential policy \nframework which will be operational by 30 June 2019. The framework provides \nfor effective macro-prudential tools, appropriate governance, transparency, and \naccountability arrangements that facilitate identification of the build-up of \nsystemic risks, and monitoring thereof, to ensure appropriate measures are taken \nin a timely manner. \n14 \n \n \n6. Anti-money Laundering Measures \n \nZimbabwe is party to various international legal instruments that require \ncountries to put in place robust Anti Money Laundering and Counter Financing \nof Terrorism (AML/CFT) frameworks, to prevent the financial system from being \nmisused by criminals for purposes of money laundering, financing of terrorism \nor other illicit purposes. \n \nBanks and Designated Non-Financial Businesses and Professions (DNFBPs), \nincluding lawyers, accountants, estate agents, casinos and precious stone and \nprecious metal dealers, play a key role in identifying and reporting of suspected \ncases of money laundering and related criminal activity within the financial \nsystem. \n \nBanks have reached acceptable levels in the implementation of AML/CFT \nrequirements. Going forward, the Bank’s Financial Intelligence Unit will be \nplacing greater focus towards ensuring compliance by DNFBPs, including \nthrough invocation of administrative penalties prescribed under the Money \nLaundering and Proceeds of Crime Act. The Bank calls upon all stakeholders \nwith various roles in the fight against money laundering, including agencies \ninvolved in the identification, investigation and prosecution of money laundering \ncases, to work diligently to improve the effectiveness of the country’s AML/CFT \nregime. \n \n7. Cyber Risk Management \n \nThe Bank is aware that cyber risk will keep changing due to the evolution of cyber \nthreats in the country and indeed across the globe. Financial institutions and \n15 \n \nindividuals are increasingly being exposed to cyber-attacks which have become \nmore sophisticated, frequent, targeted and difficult to identify The Bank urges \npayment services providers and banks board of directors and senior management \nto; \n \ni. \nIntensify their efforts and take responsibility for setting, overseeing the \nstrategy and ensure that cyber risks are accorded due consideration; \nii. \nUpdate cyber security policies, strategies and frameworks and submit the \nsame to the Central Bank by 31 March 2019; \niii. \nEnsure that Information Technology (IT) objectives include maintaining the \ncapacity to effectively anticipate, identify and recover from cyber security \nattacks for overall IT resilience; and \niv. \nImmediately make a report whenever an institution becomes aware of cyber \nsecurity incidences within its system which adversely impact on the \ncustomers or the ecosystem. \n \n8. Migration to Euro Mastercard Visa (EMV) Technology \n \nFurther to the cyber security guidance, market participants are required to migrate \nto Euro MasterCard and Visa (EMV) standards to ensure enhanced card security \nfeatures to curb cyber related activities. Currently, over 80% of the card \ninfrastructure in the country is now EMV compliant. Financial institutions should \ntherefore ensure that all cards issued in the market are EMV compliant by 31 \nMarch 2019. \n \n \n \n \n \n16 \n \nSECTION THREE \nECONOMIC OUTLOOK AND CONCLUSION \n \nThe inter-bank foreign exchange system will have significant positive effects on \nthe economy’s external and fiscal sectors, domestic production and on the welfare \nof citizens. The system is envisaged to go a long way in rebalancing the economy \nand setting it on a sustainable growth trajectory. As such, Zimbabwe’s short to \nmedium term macroeconomic outlook following the implementation of the inter-\nbank market will derive character from sustained positive growth, external sector \nsustainability and increased capacity utilization in the productive sectors of the \neconomy. \n \nIn particular, the new framework is set to bring certainty, predictability and \nfunctionality to the economy’s foreign exchange market. This, in turn, will \naddress the valuation and unit of account difficulties that has been constraining \ninvestment flows into the country. In this regard, investment inflows are projected \nto improve going forward and this will drive growth on account of opening of \nnew businesses as well as improved availability of foreign exchange for domestic \nindustries. \n \nFurthermore, the fair alignment of the exchange rate is set to trigger an \nexpenditure switching effect across the economy which will benefit local \nproducers, thereby, limiting imports of consumptive goods and services. \nSimilarly the measures are set to encourage export growth as the market \ndetermined exchange rate improves external competitiveness of domestic \nproducers that include tobacco and cotton growers. \n \nOn the fiscal front, the inter-bank foreign currency system is envisaged to \nenhance fair valuation of imports at points of entry. This has potential to \n17 \n \nsignificantly improve government revenues and enhance sustainability of the \ncountry’s fiscal balance. \n \nOverall, the measures contained in this Statement are expected to improve the \ncompetitiveness of the economy by appropriately rewarding exporters whilst at \nthe same time reducing price distortions and arbitrage within the domestic \nmarket. The Bank commits all its efforts to reduce inflation within growth \nenhancing levels, while minimizing the adverse effects of a tight monetary \nframework in order to enhance production and productivity in the country. \n \nI THANK YOU. \n \n \nJOHN MANGUDYA \nGOVERNOR \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18 \n \n \n \n \n \n \nANNEX \n \n \n \n \n \n \n \n \n \n \n \n19 \n \nANNEXURE I \n \nGLOBAL \nAND \nDOMESTIC \nECONOMIC \nAND \nFINANCIAL \nCONDITIONS UNDERPINNING CURRENT MONETARY POLICY \nDECISIONS \n \nGlobal and Regional Economic Developments \nGlobal economic activity is estimated to have moderated to 3.0% in 2018 from \n3.1% in 2017, occasioned by softened recoveries in trade and manufacturing \nactivity. Recovery in international trade and investment has tapered while trade \ndisputes, particularly between the U.S. and China, remained elevated despite \nnegotiations to ease the tensions and broker a favourable deal. In addition, a \nstrengthening U.S. dollar, elevated financial market volatility, and rising risk \npremiums, in part, exacerbated capital outflow and currency pressures in some \nemerging market and developing economies (EMDEs) resulting in substantial \nfinancial market vulnerabilities. The table below summarizes global economic \ngrowth developments and prospects for selected regions and countries. \n \nTable 2: Global Economic Growth & Outlook (%) \n \n2016 \n2017 \n2018 \nEstimate \n2019 \nProjection \nWorld Output \n2.4 \n3.1 \n3.0 \n2.9 \nAdvanced Economies \n1.7 \n2.3 \n2.2 \n2.0 \n US \n1.6 \n2.2 \n2.9 \n2.5 \n Euro Area \n1.9 \n2.4 \n1.9 \n1.6 \n Japan \n0.6 \n1.9 \n0.8 \n0.9 \nEmerging Market & Developing \n3.7 \n4.3 \n4.2 \n4.2 \nChina\n6.7\n6.9\n6.5\n6.2\n India \n7.1 \n6.7 \n7.3 \n7.5 \nSub-Saharan Africa \n1.3 \n2.6 \n2.7 \n3.4 \n Zimbabwe1 \n0.6 \n4.7 \n4.0 \n3.1 \nLatin America & the Caribbean \n-1.5 \n0.8 \n0.6 \n1.7 \nSource: World Bank: Global Economic Prospects (January 2019 Update) \n \n1 Zimbabwe growth rates are from Treasury, Reserve Bank & Zimstat \n20 \n \nIn 2019, global economic growth is projected to decelerate to 2.9% as economic \nactivity remains anaemic on the backdrop of slowing global trade, coupled with \ntightening of monetary policy in advanced economies. \n \nEconomic growth has weakened in most advanced economies, save for the United \nStates, where expansionary fiscal policy is enhancing activity. Economic activity \nin all major advanced economies is projected to ease towards potential output \nlevels in the medium term, mainly attributed to falling capacity and the interest \nrate pressures that will emanate from the withdrawal of monetary \naccommodation. The Eurozone’s growth eased to 1.9% in 2018, from 2.4% \nregistered in 2017, mainly as a result of the fall in export earnings emanating from \na stronger euro and lower external demand. Growth in the Eurozone is projected \nto further decelerate to 1.6% in 2019 owing to tighter monetary policy and the \nmoderation in growth of global trade. \n \nJapan’s growth momentum slowed to an estimated 0.8% in 2018, down from \n1.9% in 2017, mainly attributed to adverse weather conditions and natural \ndisasters. In 2019, economic activity is expected to recover from natural setbacks \nexperienced in 2018 and growth is projected to increase to 0.9% in 2019. In \nChina, activity remains robust, but downside risks are increasing in a context of \nheightened trade tensions with the United States. Growth is projected to \ndecelerate to 6.2% in 2019, slightly below previous projections as a result of \nweaker exports. \n \nEconomic growth in sub-Saharan Africa for 2018 is estimated at 2.7%, up from \n2.6% in 2017, is expected to further increase to 3.4% in 2019, with a high degree \nof variation across countries. Growth is mainly be supported by firmer \ncommodity prices. Potential downside risks include rising public debt, financial \n21 \n \nsector strains and low external buffers. Public debt is high not only in oil \nexporting countries but in many fast-growing economies as well. Zimbabwe’s \ngrowth rate, which significantly outpaced average Sub-Saharan region’s growth \nrate in 2017 and 2018, will slow down marginally to 3.1% in 2019, owing to the \ncontractionary impact of austerity measures and economic reforms. \n \nCommodity Price Developments \nInternational commodity prices generally fluctuated in 2018, with precious \nmetals weighed down by weak investment demand and a strengthening United \nStates dollar. Energy prices recovered in response to stable demand and falling \nstocks. In particular, prices for crude oil fluctuated noticeably in the second half \nof 2018, mainly due to supply factors, with sharp declines toward the end of the \nyear. Base metals were hurt by weak demand outlook from China and escalating \ntrade tensions between the United States and China, including the imposition of \ntariffs on a range of products. The World Bank, however, projects commodity \nprices to stabilize in 2019 following sharp movements in 2018. \n \nFigure 1: Commodity Price Indices (2010 = 100): 2015 to 2018 \nSource: World Bank 2019 \n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\n100.0\n110.0\n2015M1\n2015M4\n2015M7\n2015M10\n2016M1\n2016M4\n2016M7\n2016M10\n2017M1\n2017M4\n2017M7\n2017M10\n2018M1\n2018M4\n2018M7\n2018M10\nEnergy\nBase Metals\nPrecious Metals\n22 \n \n \nPrecious Metal Prices \n \nPrecious metals were generally subdued in 2018, occasioned by weak safe haven \ndemand and a generally stronger dollar owing to interest rate hikes by the Federal \nReserve during the year. These developments significantly raised opportunity \ncosts of holding precious metals such as gold and platinum. Furthermore, a \ngeneral waning in global tensions diminished safe haven demand for precious \nmetals. The moderation in commodity prices calls for increased production in \ncommodity dependent economies such as Zimbabwe, so as to compensate for the \npotential revenue losses. \n \nBase Metals \n \nBase metal prices which firmed in the first half of last year fell sharply in the \nsecond half following the imposition of broad-based tariffs by the United States \non China’s imports. Intensified trade tensions involving these economies have \nraised market concerns about global trade and investment prospects and as a \nresult, they have clouded the outlook for demand for most commodities. \nParticularly, industrial metals have been particularly responsive to these concerns \ngiven their many uses in the manufacture of tradable goods, with some metals \nsuch as nickel falling sharply. \n \nCrude Oil Prices \n \nOil prices averaged $68/barrel in 2018, amid robust global oil consumption and \nsupply-side factors. Ongoing declines in production in Venezuela and market \nconcerns about the impact of U.S. sanctions on Iran contributed to strong crude \noil prices, which peaked at $86/barrel in early October 2018. However, prices fell \n23 \n \nsharply in November after the United States announced temporary waivers to the \nsanctions on Iran for eight countries, including China and India. The decline in \nprices also reflected continued rapid growth in oil production in the United States, \nas well as a substantial increase in supply by the Organization of the Petroleum \nExporting Countries (OPEC) and the Russian Federation. The World Bank \nprojected oil prices to average $67/barrel in 2019. The anticipated decline in oil \nprices will help dissipate inflation in Zimbabwe, which is threatened by domestic \nfactors associated with foreign exchange shortfalls in the economy. \n \nGold Deliveries to Fidelity Printers & Refineries \n \nIn 2018, gold deliveries to Fidelity Printers & Refiners reached 33.2 tonnes, a \nrecord high for the country, which also surpassed the year’s target of 30 tonnes. \nThis represents a 33.9% increase from 24.8 tonnes delivered in 2017. Notably, \nsmall scale producers, despite facing a plethora of challenges, continued to \ndominate the country’s gold deliveries, accounting for 65.3% of the total \ndeliveries, with the primary producers contributing the remainder. Deliveries of \ngold by small scale producers increased by 64.5% from 13.2 tonnes in 2017 to \n21.7 tonnes in 2018. \n \n \n \n \n \n \n \n \n \n24 \n \nFigure 2: Gold Deliveries to Fidelity Printers (Kgs): Jan to Dec 2018 \nSource: Fidelity Printers and Refineries (FPR), 2018 \n \nThe marked increase in gold deliveries was realized against the background of \nstrong Government and RBZ support and incentives to further boost production \nand exports. \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,160\n932\n953\n983\n1,183\n1,033\n1,086\n893\n755\n849\n815\n967\n1,399\n1,084\n1,782\n1,905\n2,217\n2,644\n2,463\n3,026\n2,721\n1,199\n602\n637\n2,559\n2,016\n2,735\n2,888\n3,399\n3,677\n3,550\n3,919\n3,476\n2,048\n1,418\n1,604\n0\n400\n800\n1200\n1600\n2000\n2400\n2800\n3200\n3600\n4000\n4400\nJan\nFeb\nMar\nApr\nMay\nJun\nJul\nAug\nSep\nOct\nNov\nDec\nPrimary producers\nSmall Scale producers\nTotal Gold Purchased\n25 \n \nANNEXURE II \nBALANCE OF PAYMENTS DEVELOPMENTS \n \nThe country’s external sector position has largely remained under considerable \npressure, due to excessive foreign currency demand against the foreign currency \ninflows. This pressure is manifested through persistent and large trade and current \naccount deficits that the economy has been recording since 2009. While exports \nof goods and services have been on an upward trend, this has been offset by the \nincrease in imports of goods and services on the back of domestic supply gaps \nand rising international oil prices. \n \nCurrent Account \nThe current account deficit sharply deteriorated from US$246 million in the first \nthree quarters quarter of 2017 to US$935.8 million for the same period in 2018, \nreflecting a surge in imports against a background of subdued exports. The annual \ndeficit is estimated to have widened to $1 029 million in 2018 compared to \nUS$286.2 million in 2017. \n \n \n \n \n \n \n \n \n \n \n \n26 \n \nFigure 3: Merchandise Trade Developments (US$ million) \nSource: RBZ BOP Database \nMerchandise exports increased by 9.8% from US$3 103 million in the first three \nquarters of 2017 to US$3 407.4 million for the same period in 2018 underpinned \nby growth in both mineral and manufactured exports. Mineral exports accounted \nfor 60.5% of the total merchandise exports while agriculture and manufactured \nexports accounted for 22.6% and 16.9% of the total exports, respectively. \n \nExports are estimated to have registered an 11.5% growth to US$4 809.9 million \nin 2018, from US$4 313.0 million in 2017 as mineral, agriculture and \nmanufactured exports all increased. Gold, flue-cured tobacco, nickel, \nferrochrome, chrome, industrial diamonds, jewellery, cotton, platinum and cane \nsugar dominated the country’s export basket, contributing above 80% of the \ncountry’s exports. \n \n-500\n0\n500\n1000\n1500\n2000\nExports\nImports\nCurrent Account Balance\n27 \n \nMerchandise imports increased from US$4 031.5 million in the first three \nquarters of 2017 to about US$5 258.7 million during the same period in 2018 \nlargely reflecting a growing economy. The country’s major imports were fuel \n(diesel and petrol), electricity, machinery, raw materials and vehicles. In 2018, \nmerchandise imports are estimated to have registered a moderate growth of \n28.45%, from US$5 462.2 million in 2017 to US$7 018.4 million in 2018. The \ngrowth in imports was largely driven by non-food imports. Fuel imports increased \non account of rising crude oil prices and increased consumer and industrial \ndemand. \n \nServices Account Developments \nServices exports improved during the first three quarters of 2018 while imports \nsharply dropped. Driven by travel and transport, services exports are estimated \nto have increased by 15.5% from US$337.9 million in 2017 to US$390.1 million \nin 2018. Transport exports increased in line with increasing merchandise trade \nwhile activity in the tourism and travel sector has gone up since end 2017 with \nmost hotels reporting huge improvement in room occupancy levels. \n \nOn the other hand, services imports collapsed from US$837.9 million in the first \nthree quarters of 2017 to US$619.4 million for the same period in 2018 driven by \ndeclines in travel, transport and other business services. Imports of services are \nlargely being affected by foreign currency challenges. The increase in services \nexport receipts coupled with a decline in services imports payments resulted in \nthe improvement in the services account balance. \n \nServices imports are estimated to have declined by 18.5% from US$1 092.7 \nmillion in 2017 to US$890.4 million in 2018, largely reflecting acute foreign \ncurrency shortages that the country is facing. On the other hand, services exports \n28 \n \nare estimated to have increased by 25.4% from US$418.9 million in 2017 to \nUS$525.1 million in 2018, underpinned by freight and travel. \n \nPrimary Income Account Developments \nThe country has consistently registered a negative balance on its primary income \naccount, implying that the country is a net importer of capital. This account \nmainly records non-resident transactions on returns to labour and capital in the \nform of compensation of employees, interest on scheduled payments, dividends \nand re-invested earnings. \n \nSecondary Income Account Developments \nSecondary income flows are second largest contributor of foreign currency to the \ncountry after exports. The account mainly records transfers to Non-Profit \nInstitutions Serving Households (NPISHs) and personal transfers; i.e. transfers \nthat a migrants makes to the country of origin. \n \nSecondary income account receipts slightly decreased in 2018 following declines \nin personal remittances. Personal remittances declined in 2018 possibly reflecting \nin-formalisation of remittances flows in light of the foreign currency shortages in \nthe country. Exchange rate depreciation in major the source countries (SA and \nUK) also had an effect. Transfers to NIPISHs, however, increased in 2018 \nparticularly in 2018 Q2 probably on account of elections related inflows. \n \nFinancial Account Developments \nThe country remained a net importer of capital with the financial account balance \nwidening in 2018, on account of increased foreign direct investment inflows. \nInflows of short and long term debt and portfolio investment inflows were \nhowever subdued. Net debt creating inflows declined from US$685.4 million in \n2017 to US$418.4 million in 2018. Net foreign direct investment into the country \n29 \n \nis estimated to have increased from US$307.2 million in 2017 to US$456.6 \nmillion in 2018. \n \nForeign Currency Receipts \n \nThe Global Foreign Currency for the period January – December 2018 amounted to \nUS$6.3 billion compared to US$5.5 billion received during the same period in 2017, \nrepresenting a 13.9% increase in foreign currency supply. The table below shows \nGlobal foreign currency receipts by source; \n \nTable 3: Global Foreign Currency Receipts (USD million) \nType of Receipt \nWeek \n52 \n2018 \n% \nContribution \n \nWeek \n52 \n2017 \n% \nContribution \n \n% \nChange \n \nExport \nProceeds \n \n4,264.7 \n68% \n3,556.2 \n64% \n19.9% \nInternational \nRemittances \nDiaspora \nRemittance\ns \n597.4 \n9% \n695.3 \n13% \n-14% \nNGOs \n530.4 \n8% \n682.5 \n12% \n-22% \nLoan \nProceeds \n \n826.1 \n13% \n533.5 \n10% \n55% \nIncome \nreceipts \n \n59.3 \n1% \n57.0 \n1% \n4% \nForeign \nInvestment \n \n22.8 \n0% \n25.4 \n0% \n-10% \nTOTAL \n \n6,300.7 \n100% \n5,549.9 \n100% \n13.5% \nSource: Exchange Control Records and Bank Supervision Application System (BSA) \n \n30 \n \nExport proceeds contributed 68% of the total global receipts for the fifty-two \nweeks of 2018, while international money transfers accounted for about 17%. \nExport proceeds have continued to be the major source of liquidity for the country \n \nInternational Remittances declined by 19% from US$1.4 billion received in 2017 to \nUS$1.1 billion received in 2018. Of the US$1.4 billion, Diaspora remittances \ncontributed US$619, 2 million, a decline of 11.4% as compared to US$699 million \nreceived in 2017. The decline of diaspora remittances is mainly attributed to the \npreference to send in-kind, remittances by the Diaspora, and the interception of \nremittances in South Africa by cross border traders. South Africa contributes about \n34% of the total Diaspora remittances. \n \nPrivate Sector Debt \nIn the year 2018, Exchange Control approved and registered a total of 140 \nexternal loan facilities with a monetary value of US$1.28 billion. A 3% increase \nin the total approvals from the US$1.23 billion recorded in 2017, was observed \nas shown on the table below. \n \nTable 4: External Loan Approvals per Sector \nSector \n2017 Facility \nApprovals (US$) \n2018 Facility \nApprovals (US$) \nVariance \n(US$) \nVariance \n(%) \nAgriculture \n828,165,567 \n801,593,999 \n-26,571,568 \n-3% \nFinancial \n38,106,000 \n204,370,000 \n166,264,000 \n81% \nTourism & Hospitality \n4,261,000 \n14,137,800 \n9,876,800 \n70% \nServices \n30,335,000 \n12,386,608 \n-17,948,392 \n-100% \nEnergy \n252,444,000 \n40,615,000 \n-211,829,000 \n-100% \nRetail & Distribution \n37,187,879 \n356,225 \n-36,831,654 \n-100% \nMining \n40,211,940 \n114,126,237 \n73,914,297 \n65% \nManufacturing \n4,104,590 \n88,264,140 \n84,159,550 \n95% \nTransport \n931,797 \n5,421,652 \n4,489,855 \n83% \nConstruction \n3,850,395 \n1,774,195 \n-2,076,200 \n-117% \nTOTAL \n1,239,598,168 \n1,283,045,857 \n43,447,689 \n3% \nSource: External Loans and Exchange Control Review Committee Database \n31 \n \nThe sectoral spread of borrowings improved in 2018, with sectors such as \nFinance, Manufacturing, Tourism and Transport recording more than 50% \nincrease in monetary value and number of facilities from 2017. Overall, Tobacco \nFinance facilities dominated the loans with a 63% contribution. \n \nActual External Loan Drawdowns \nIn the year 2018, local borrowers received loan proceeds amounting to US$844.9 \nmillion. It should be noted, however, that this figure includes drawdowns from \nfacilities that were approved in previous years. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n32 \n \nANNEXURE III \nINFLATION DEVELOPMENTS \n \nThe annual headline inflation, which had been largely trending below 5% for the \ngreater part of 2018, spiked to 21% in October 2018 and further to 42.1% in \nDecember 2018, as inflation pressures builds in the economy. The price hikes in \nOctober were due to excessive speculative behavior, unrelated to economic \nfundamentals, which also saw unjustified increases in parallel market rates for \nforeign exchange. It is anticipated that these speculative bubbles will collapse in \nthe medium term, as the economy adjusts and self-corrects to policy stimuli. \n \nFigure 4: Annual Inflation Profile (%) \n \nSource: Zimstat, 2018 \n \nThe end of the year saw both food and non-food prices spiraling up, across most \ncategories of the consumer basket. Most discernible price increases were \nobserved in categories that have a significant import content, reflecting the \nsourcing of foreign exchange from alternative markets due to shortages. Month-\non-month inflation, which had remained largely below the 1.5% threshold \n-10.0\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\nJan-17\nFeb-17\nMar-17\nApr-17\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\nJan-18\nFeb-18\nMar-18\nApr-18\nMay-18\nJun-18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nFood Inflation\nNon-Food Inflation\nAll Items\n33 \n \nthroughout the year, escalated 16.4% in October 2018, before subsiding to 9.0% \nin December 2018, on the back of both food and non-food drivers. Government \nis instituting a wide range of fiscal and monetary measures, aimed at keeping \ninflation in check. \n \nFigure 5: Month-on-Month Inflation % \n \nSource: Zimstat, 2018 \n \nThe spike in inflation calls for concerted national efforts to fight the scourge, so \nas to engineer growth and stability across the markets. The recent fuel price \nincrease, while temporarily inflationary in the short term, will be neutralized by \nsupply side gains, as well as by positive payoffs from on-going economic reforms \nin the fiscal and monetary sectors. The anticipated fall in international oil prices \nwill also see inflationary pressures relenting, buttressed by other positive external \ndevelopments. \n \n \n-0.50\n1.50\n3.50\n5.50\n7.50\n9.50\n11.50\n13.50\n15.50\n17.50\nMar-16\nApr-16\nMay-16\nJun-16\nJul-16\nAug-16\nSep-16\nOct-16\nNov-16\nDec-16\nJan-17\nFeb-17\nMar-17\nApr-17\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\nJan-18\nFeb-18\nMar-18\nApr-18\nMay-18\nJun-18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\n34 \n \nANNEXURE IV \n \nMONETARY DEVELOPMENTS \n \nGenerally, annual growth in money supply has been on a downward trend since \nJuly 2018, largely reflecting slowdown in accommodation to Government, fiscal \nconsolidation, as well as Central Bank efforts to mop up excess liquidity from the \nmarket. Liquidity sterilization efforts through the Bank’s savings bonds, have \ncontinued to bear fruit, mopping up a total of $1.96 billion worth of liquidity, \nsince their introduction in September 2017. \n \nAnnual broad money2 growth fell from close to 50% in July 2018, to 28.8% by \nNovember 2018, reaching a stock of US$10 093.66 million as of the same month. \nThe growth in money supply was reflected in a 36.3% increase in narrow money, \nof which, transferable deposits grew by 35.62%; while currency in circulation \ngained by 48.65%. Partially offsetting the increase in narrow money during the \nperiod under review, were declines in negotiable certificates of deposits (NCDs) \nand time deposits, of 21.8% and 1.6%, respectively. \n \n \n \n2 Beginning January 2017, broad money is redefined using IMF’s Monetary and Financial Statistics Manual of 2016. The \nmajor change is the exclusion of Government deposits held by banks from broad money. \n35 \n \nFigure 6: Money Supply \nSource: Reserve Bank of Zimbabwe, 2018 \n \nThe country’s money supply, however, continues to be dominated by transitory \ndeposits, as evidenced by its composition by end of November 2018, where \ntransferable deposits were 80.45% of total broad money; time deposits, 14.17%; \ncurrency in circulation, 4.88%; and negotiable certificates of deposits, 0.50%. \n \nThis short term money does not auger well for investment, as it falls short of the \nmedium to long term credit requirements of most industries, which are need to \nre-tooling, refurbishment and new capital investments. \n \n \n \n \n \n \n \n \n \n \n-10\n0\n10\n20\n30\n40\n50\n60\n -\n 2\n 4\n 6\n 8\n 10\n 12\n%\nUSUS$ BILLIONS\nM3\nM3 Annual Growth rate\n36 \n \nANNEXURE V \n \nFINANCIAL SECTOR DEVELOPMENTS \n \nBanking Sector Architecture \nThere were 19 operating banking institutions as at 31 December 2018, as shown \nin the table below. \n \nTable 5: Architecture of the Banking Sector \nType of Institution \nNumber \nCommercial Banks \n13 \nBuilding Societies \n5 \nSavings Bank \n1 \nTotal Banking Institutions \n19 \nOther Institutions under the supervision of Reserve Bank \nCredit-only-MFIs \n199 \nDeposit-taking MFIs \n6 \nDevelopment Financial Institutions \n2 \nTOTAL \n226 \n \nPerformance of the Banking Sector \n \nThe banking sector remained generally stable as reflected by adequate \ncapitalisation and improved earnings performance for the period ended 31 \nDecember 2018. However, asset quality deteriorated as reflected by increase in \nthe average non-performing loans to total loans ratio during the period under \nreview. The table below shows trends in financial soundness indicators. \n37 \n \nTable 6: Financial Soundness Indicators \nKey Indicators \nBenchmark Dec-17 \nJun-18 \nSept-18 Dec-18 \nTotal Assets \n \n$11.25bn $12.35bn $13.31bn $13.98bn \nTotal Loans & \nAdvances \n \n$3.80bn $4.08bn $4.00bn $4.22bn \nNet Capital Base \n \n$1.58bn $1.61bn $1.72bn $1.83bn \nTotal Deposits \n \n$8.48bn $9.53bn $9.57bn $10.32bn \nNet Profit \n \n$241.94m $176.09m $283.98m $389.85m \nReturn on Assets \n \n2.61% \n1.75% \n2.61% \n4.57% \nReturn on Equity \n \n15.48% 11.16% \n16.80% \n20.59% \nCapital Adequacy \nRatio \n12% \n27.63% 26.32% \n27.79% \n30.27% \nLoans to Deposits \n70% \n44.81% 43.53% \n41.8% \n40.71% \nNon-Performing \nLoans Ratio \n5% \n7.08% \n6.22% \n6.69% \n8.39% \nTier 1 Ratio \n8% \n23.97% 24.16% \n22.68% \n23.84% \nLiquidity Ratio \n30% \n62.62% 68.45% \n70.66% \n68.00% \nCost to Income Ratio \n \n75.36% 67.59% \n66.85% \n70.01% \n \n \n \n38 \n \nCapitalisation \nThe banking sector remained adequately capitalised with average tier 1 and \ncapital adequacy ratios of 23.84% and 30.27%, respectively. The banking sector \naggregate core capital increased by 15.32%, from $1.37 billion as at 31 December \n2017 to $1.58 billion as at 31 December 2018, largely due to organic capital \ngrowth. All banking institutions were compliant with the prescribed minimum \ncapital requirements as shown in the table below. \n \nTable 7: Banking Sector Capitalisation ($ million) \nInstitution \nCore Capital \nas \nat \n31 \nDecember \nCore Capital \nas \nat \n31 \nDecember \nPrescribed \nMinimum \nCapital \n CBZ Bank & Society \n218.41 \n168.15 \n25 \n Stanbic Bank \n135.52 \n162.22 \n25 \n Barclays Bank \n79.22 \n107.17 \n25 \n Ecobank \n73.95 \n104.14 \n25 \n FBC Bank \n70.37 \n93.64 \n25 \n ZB Bank & Society \n83.54 \n87.94 \n25 \n BancABC \n75.96 \n86.72 \n25 \n Steward Bank \n71.91 \n86.58 \n25 \n Standard Chartered Bank \n71.34 \n84.84 \n25 \n NMB Bank \n61.31 \n76.72 \n25 \n Agribank \n55.54 \n74.36 \n25 \nNedbank Zimbabwe \n54.52 \n70.01 \n25 \n Metbank \n44.99 \n65.88 \n25 \nBUILDING \nSOCIETIES\n \n \n \nCABS Building Society \n127.75 \n146.45 \n20 \nFBC Building Society \n47.48 \n47.07 \n20 \nNational Building Society \n43.84 \n46.03 \n20 \nSAVINGS BANK \n \n \n \nPOSB \n53.83 \n69.33 \n- \nTotal \n1,369.48 \n1,577.25 \n- \n \nThe challenging macroeconomic environment underscores the need for banking \ninstitutions to implement capital preservation strategies. \n39 \n \nBanking Sector Deposits \nTotal banking sector deposits amounted to $10.32 billion as at 31 December \n2018, up from $8.48 billion as at 31 December 2017. The figure below shows the \ntrend in the banking sector deposits over the period 31 December 2009 to 31 \nDecember 2018. \n \nFigure 7: Trend in Banking Sector Deposits ($million) \n \n \nThe banking sector was predominantly funded by demand deposits which \naccounted for 64.94% of total deposits as at 31 December 2018. The composition \nof total banking sector deposits as at 31 December 2018 is depicted in the figure \nbelow. \n \n \n \n1,363.67\n2,567.61\n3,376.34\n4,410.92\n4,728.07\n5,056.75\n5,623.00\n6,511.83\n8,480.46\n8,236.44\n9,529.00\n9,567.00\n10,320.51\n0\n2000\n4000\n6000\n8000\n10000\n12000\n31-Dec-09\n31-Dec-10\n31-Dec-11\n31-Dec-12\n31-Dec-13\n30-Dec-14\n31-Dec-15\n31-Dec-16\n31-Dec-17\n31-Mar-18\n30-Jun-18\n30-Sep-18\n31-Dec-18\n40 \n \nFigure 8: Composition of Deposits as at 31 December 2018 \n \n \nAs at 31 December 2018, total Nostro FCA deposits amounted to $673.81 \nmillion, representing 6.53% of total deposits. The Nostro FCA depositors are \npredominantly constituted by corporate deposits amounting to $654.77 million, \nrepresenting 97.17% of total Nostro FCA deposits, as at 31 December 2018. The \nlevel of Nostro FCAs and RTGS FCAs deposits, since the separation of the two \n(2) categories in October 2018 is shown below. \n \n \nDemand Deposits \n64.94%\nCall Deposits \n1.25%\nTime Deposits \n22.89%\nSavings \nDeposits \n5.11%\nForeign Deposits \n(Foreign Entity \nDeposits) \n1.91%\nForeign Deposits \n(Foreign Lines) \n2.27%\nOther Deposits \n1.63%\n41 \nFigure 9: Composition of Deposits By nature of Currency \nAs at 31 December 2018, the number of corporate RTGS FCA depositors was \n214,094 valued at $8.67 billion, while the number of individual RTGS FCA \ndepositors, amounted to 3.24 million valued at $894.54 million. Of the 3.24 \nmillion individual depositors 95.98% held deposit balances of less than $1,000.00 \neach, with an average balance of $80, accounting for a total $213.42 million. \nOn the other hand, corporate RTGS FCA depositors (1,884) holding balances in \nexcess of $500,000 constitute 83.64% ($7.25billion) of total corporate RTGS \ndeposit of $8.67 billion as at 31 December 2018. The table below shows a \nbreakdown of total deposits by balance category; \n8.66\n9.68\n6.65\n0.61\n0.66\n0.67\n0\n2\n4\n6\n8\n10\n12\n30 Nov 2018\n14 Dec 2018\n31 Dec 2018\nBillions US$\nNostro FCAs\nRTGS F CAs\n42 \n \nTable 8: Total Nostro FCA and RTGS FCA Balances Summary as at 31 \nDecember 2018 \n \nRTGS FCA \nNOSTRO FCA \n \nNumber \nValue ($) \nNumber \nValue ($) \n<1,000 \n3,113,699 \n213,417,633 \n111,069 \n4,036,509 \n1,001-5,000 \n284,552 \n369,048,704 \n16,769 \n11,380,851 \n5,001-10,000 \n26,637 \n162,785,867 \n2,030 \n9,743,790 \n10,001-20,000 \n15,008 \n198,562,426 \n1,612 \n19,202,170 \n20,001-50,000 \n8,846 \n269,736,735 \n1,084 \n32,469,786 \n50,001-100,000 \n3,551 \n243,288,370 \n458 \n31,959,006 \n100,001-200,000 \n2,136 \n295,089,016 \n270 \n37,429,252 \n200,001-300,000 \n1,018 \n210,202,651 \n96 \n23,236,315 \n300,001-500,000 \n809 \n309,775,981 \n84 \n31,728,454 \n500,000+ \n1,919 \n7,291,261,403 \n161 \n472,627,663 \nTOTAL \n3,458,175 \n9,563,168,786 \n133,633 \n673,813,796 \n \nGoing forward, it is envisaged that the number of Nostro FCA depositors will \nincrease, driven by increases in the tobacco and mineral production, as well as \nfinancial inclusion efforts. \n \nLoans and Advances \nTotal banking sector loans and advances increased by 11.05%, from $3.80 billion \nas at 31 December 2017 to $4.22 billion as at 31 December 2018. The figure \nbelow shows the trend of banking sector loans and advances from 31 December \n2014 to 31 December 2018. \n \n \n43 \n \nFigure 10: Loans and Advances \n \n \nLending to the productive sector increased over the year, from 73.64% to 76.01% \nof total loans as at 31 December 2018. The increase is largely attributable to \nlending to the agricultural sector which increased from 14.7% to 16.39% and \nother segments including state owned enterprises from 12.1% to 20.1 %. The \nchart below shows the breakdown of lending to the productive sector. \n \n \n4,060.00 \n3,942.94 \n3,999.35 \n3,872.39 \n3,729.77 \n3,649.30 \n3,688.46 \n3,590.91 \n3,733.15 \n3,798.36 \n3,778.95 \n4,078.50 \n4,007.14 \n4,224.55 \n -\n 1,000.00\n 2,000.00\n 3,000.00\n 4,000.00\n 5,000.00\nDec-14\nMar-15\nJun-15\nSep-15\nDec-15\nMar-16\nJun-16\nSep-16\nDec-16\nMar-17\nJun-17\nSep-17\nDec-17\nMar-18\nJun-18\nSep-18\nDec-18\n44 \n \nFigure 11: Sectoral Distribution of loans as at 31 December 2018 \n \nThe loans to deposit ratio decreased from 44.81% to 40.1% over the year ended \n31 December 2018, reflecting low lending levels. This position reflects that there \nis scope for banking institutions to increase lending to various sectors of the \neconomy to spur economic revival. \n \nLoan Portfolio Quality \nCredit risk in the banking sector portfolio increased during the period under \nreview as reflected by the ratio of non-performing loans (NPLs) to total loans of \n8.25% % as at 30 December 2018, from 7.08% as at 31 December 2017. The \nincrease in NPLs is largely a reflection of forward looking credit risk \nmanagement tools adopted by banks in line with the IFRS 9 accounting standards, \nresulting in improvement of the banks’ risks controls and provisions coverage. \nThe trend in the level of non-performing loans from 2011 to 31 December 2018 \nis indicated in the figure below. \nCONSUMPTIVE\n17.75%\nOTHER\n6.24%\nAgricultural\n16.34%\nManufacturing\n7.68%\nCommercial \n15.33%\nMining \n3.52%\nDistribution\n10.52%\nContruction\n9.86%\nTransport\n1.06%\nCoomunication\n0.38%\nFinancial\n1.78%\nMortgage \n11.12%\nPRODUCTIVE\n76.01%\n45 \n \nFigure 12: Trend in Non-Performing Loans 2011 – 31 December 2018 \n \n \nEarnings Performance \nAll banking institutions, with the exception of one, reported profits for the year \nended 31 December 2018, with a 61.06% increase in aggregate profits from \n$241.94 million in 2017 to $389.85 million in 2018. \n \nBanking Sector Liquidity \nAll banking institutions were compliant with the minimum prudential liquidity \nratio of 30% as at 31 December 2018, with the exception of two (2) institutions. \nThe average prudential liquidity ratio for the banking sector was 68.00% as at 31 \nDecember 2018, against the minimum regulatory requirement of 30%. Trend in \nthe banking sector average prudential liquidity ratio since March 2015 is shown \nin the figure below. \n \n \n \n7.55%\n13.46%\n15.92%\n15.91%\n7.87%\n7.08%\n7.06%\n6.22%\n6.68%\n8.25%\n0%\n2%\n4%\n6%\n8%\n10%\n12%\n14%\n16%\n18%\n2011\n2012\n2013\nDec-14 Dec-16 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18\nLevel of NPL Ratio\n46 \n \nFigure 13: Prudential Liquidity Ratio Trend (%) \n \nThe high average prudential liquidity ratio is largely attributed to substantial \nholdings of securities and investments, and cautious approach to lending by most \nbanking institutions. \n \nDeposit Insurance Payments \nAs at 31 December 2018, 15,313 out of 54,909 depositors by number had been \ncompensated out of the Deposit Protection Fund, administered through the \nDeposit Protection Corporation. In monetary terms $3.61 million (56%) had been \npaid against an exposure of $6.4 million. The table below provides a synopsis of \ndeposit insurance payments in respect of the six (6) failed contributory banking \ninstitutions under liquidation. \n \n \n36.61 38.14\n43.13\n45.43\n49.63\n52.47\n61.91\n66.87\n62.49\n62.62\n62.37\n68.45\n70.63\n68.00\n25\n30\n35\n40\n45\n50\n55\n60\n65\n70\n75\n47 \n \nTable 9: Deposit Insurance Payments as at 31 December 2018 \nName of \nInstitution \nTotal \nDepositor\ns \nNo. of \nDepos\nitors \npaid \nExposure \nDeposits \npayable at \n$500($) \nValue of \nDepositors \npaid ($) \n% of \nTotal \ndepos\nits \nGross \nDeposits \nRoyal Bank \n5,453 \n3,111 \n472,207 \n358,654 \n76% \n5,538,805 \nTrust Bank \n2,958 \n1,041 \n328,516 \n169,877 \n52% \n11,482,102 \nGenesis \n86 \n62 \n11,810 \n8,821 \n75% \n1,426,913 \nAllied Bank \n9,228 \n1,539 \n1,248,307 \n536,503 \n43% \n14,316,614 \nInterfin Bank \n13,021 \n2,738 \n918,814 \n325,373 \n35% \n137,336,570 \nAfrasia \n24,163 \n6,822 \n3,439,276 \n2,212,152 \n64% \n18,559,591 \nTotal \n54,909 15,313 \n6,418,930.43 \n3,611,380 \n56% \n188,660,595 \n \nAll the above institutions are under final liquidation by the Deposit Protection \nCorporation. \n \nBanking Sector Developments \nTetrad Investment Bank \nProvisional Judicial Management for Tetrad Investment Bank was uplifted on 30 \nOctober 2018, following a successful conclusion of a scheme of arrangement \ninvolving conversion of debt to equity, which resulted in the institution’s capital \nbeing in compliance with the regulatory minimum of $25 million for merchant \nbanks. \n \nThe banking institutional is, however, not yet operational as the bank’s board is \nworking to address issues before commencement of operations including \nshareholding structure, corporate governance arrangements, risk management \nsystems and availability of working capital. \n \n \n48 \n \nANNEXURE VI \n \nDEVELOPMENTS ON THE ZIMBABWE STOCK EXCHANGE \n \nThe year 2018, saw the Zimbabwe Stock Exchange (ZSE) experiencing generally \nbullish sentiment, with the industrial and mining indices rising from 333.02 points \nand 142.40 points, respectively, at the end of December 2017, to 699.89 points \nand 242.81 points, in October 2018. The growth was partly attributed to strong \nperformance on some blue chip counters, coupled with hedging tendencies \nagainst perceived losses of value on parallel market rates and inflation. Although \nactivity on the stock market declined in December 2018, in line with trends during \nthe festive season, year-on-year, however, both the industrial and mining indices \ngrew significantly by 46.28% and 59.91%, respectively. \n \nThe Top 10 Index, which tracks share price developments of wealth preserving \ncounters, gained 45.02% to reach 145.02 points at the end of 2018. By breaking \nthe 100 points benchmark, it implies that blue-chip stock prices at 31 December \n2018 have surpassed prices at the beginning of the year, when the index was \nintroduced. \n \nFigure below shows developments in the industrial and mining indices for the \nperiod 31 December 2017 to 31 December 2018. \n \n \n \n \n \n \n49 \n \nFigure 14: Zimbabwe Stock Exchange Indices \n \nSource: Zimbabwe Stock Exchange, 2019 \n \nAs a consequence of improved investor appetite in blue-chip counters, the \ncumulative value of shares traded increased by 72.77% to $1.20 billion, up from \n$0.69 billion realized in 2017. Volume of shares traded, however, declined by \n27.30% to 2.45 billion shares, from 3.37 billion shares registered the previous \nyear. The cumulative net capital inflows amounted to $51.61 million in 2018, \ncompared to cumulative net outflows of $99.99 million in 2017. \n \n \n \n \n \n \n \n \n \n30\n95\n160\n225\n290\n355\n0\n95\n190\n285\n380\n475\n570\n665\n760\n31-Dec-17\n31-Jan-18\n28-Feb-18\n31-Mar-18\n30-Apr-18\n31-May-18\n30-Jun-18\n31-Jul-18\n31-Aug-18\n30-Sep-18\n31-Oct-18\n30-Nov-18\n31-Dec-18\nMining Index\nIndustrial Index\nIndustrial Index\nMining Index\n50 \n \nFigure 15: ZSE Market Turnover \n \nSource: Zimbabwe Stock Exchange, 2019 \nIn line with significant increases in share prices across many counters, market \ncapitalization trended upwards, reaching peak levels of close to $23 billion in \nOctober 2018, before moderating to around $19 billion by the close of the year. \n \nFigure 16: Market Capitalization \n \nSource: Zimbabwe Stock Exchange, 2019 \n0.0\n60.0\n120.0\n180.0\n240.0\n300.0\n360.0\n420.0\n480.0\n0.0\n200.0\n400.0\n600.0\n800.0\n1,000.0\n1,200.0\nValue ($Millions)\nVolume (Millions)\nVolume\nValue\n2,000\n5,000\n8,000\n11,000\n14,000\n17,000\n20,000\n23,000\nUS$ Millions\n51 \n \nThe launch and operationalization of an online and mobile platform, Capital \nTrade (C-Trade) in the second half of 2018, is expected to improve trading \nactivity on the Zimbabwe Stock Exchange (ZSE). This development is set to \nfurther deepen financial inclusion in the capital markets, riding on the \ncountrywide mobile network platforms, which have attracted subscribers from \nthe width and breadth of the economy. \n \n \n \n \n \n \n \n \n \n \n \n \n52 \n \nANNEXURE VII \nSTATUS AND CONDITION OF MICROFINANCE SECTOR \nThe microfinance sector continued to play a significant catalytic role in the \nfinancial inclusion agenda and the attainment of the Sustainable Development \nGoals (SDGs). As at 31 December 2018, a total of 205 microfinance institutions \nwere operational. The microfinance sector continued on a growth trajectory \nduring the period under review. Positive growth was recorded in outreach, loan \nportfolio size, equity funding, and deposit mobilisation. \n \nPerformance of Deposit-Taking Microfinance Institutions \nThe six (6) operating Deposit-Taking Microfinance Institutions (DTMFIs) \ncontinue to play a significant role in promoting access to formal financial services \nby marginalised segments. Zimbabwe Women’s Microfinance Bank and \nEmpowerBank commenced operations in 2018 with mandates to primarily focus \non financial inclusion of women and youth respectively. The trend in the key \nperformance indicators for the DTMFIs is indicated in the table below: \n \n \n \n \n \n \n \n \n \n \n \n \n53 \n \nTable 10: Trend in the Key Performance Indicators for the DTMFIS \nKey Indicators \nDec-17 \nJun-18 \nSept-18 \nDec-18 \nTotal Assets \n$88.36m $100.28m \n$128.23m \n$138.16m \nTotal Loans & Advances \n$62.02m \n$68.80m \n$79.26m \n$84.40m \nNet Capital Base \n$39.20m \n$40.09m \n$62.24m \n$63.78m \nTotal Deposits \n$6.41m \n$15.35m \n$21.00m \n$23.85m \nNet Profit \n$2.25m $965,250.19 -$939,080.58 \n-\n$29,488.44 \nOperating self-sufficiency \nratio \n126.30% 116.83% \n76.22% \n89.27% \nAverage Return on Assets \n-4.63% \n1.27% \n-6.23% \n-9.16% \nAverage Return on Equity \n-3.61% \n3.20% \n-6.00% \n-8.40% \nPortfolio risk Ratio (> 30 \ndays) \n11.30% \n16.54% \n9.56% \n13.51% \n \nStatus of Capitalisation \nThe capital levels for the Deposit-Taking Microfinance Institutions sub-sector \ngrew from $39.20 million in 2017 to $63.78 million as at 31 December 2018. \nHowever, one institution’s capital level was in breach of the minimum prescribed \ncapital requirement of $5 million and shareholder efforts are underway to \nregularise the capital position of the institution. \n \nThe Reserve Bank of Zimbabwe urges players in the deposit-taking microfinance \nsub-sector to continue to raise capitalisation levels in order to create capacity to \nunderwrite significant business across economic sectors. \n \n54 \n \nTotal Loans and Deposits \nTotal loans and deposits increased from $62.02 million and $6.41 million as at \n31 December 2017 to $84.40 million and $23.85 million as at 31 December 2018, \nrespectively. The growth in the loans has largely been financed by deposits, lines \nof credit and shareholder loans. \n \nEarnings Performance \nProfitability in the sector remained subdued during the year. The earnings \nperformance was largely weighed down by start-up costs in the newly established \ndeposit-taking microfinance institutions. New entities typically need 2 to 3 years \nto build their portfolios in order to attain sustainable critical mass and break-even. \n \nOutreach \nTotal number of DTMFIs branches increased by 69% from 16 in 2017 to 27 as at \n31 December 2018. The subsector recorded a 302% growth in the number of \naccount holders from 6,441 in 2017 to 25,906 as at 31 December 2018. \n \nPerformance of Credit-Only Microfinance Institutions \nThe microfinance sector’s total assets registered a 58.30% growth in over the year \nfrom $211.83 million as at 30 September 2017 to $335.33 million as at 30 \nSeptember 2018, driven by the growth in total loans. The trend of the performance \nindicators in the credit-only microfinance sub-sector is indicated in the table \nbelow. \n \n \n55 \n \nTable 11: Key Performance Indicators, September 2017 to September 2018 \nIndicator \nSept -17 \nSept-18 \nNumber of Licensed Institutions \n184 \n194 \nTotal Loans (US$m) \n175.41 \n272.13 \nTotal Assets (US$m) \n211.83 \n335.33 \nTotal Equity (US$m) \n92.65 \n126.04 \nNet Profit (US$m) \n10.42 \n11.27 \nAverage Operational Self-Sufficiency (OSS) \n151.08% \n114.80% \nPortfolio at Risk (PaR>30 days)* (%) \n6.52% \n15.65% \nNumber of Active Loan Clients \n235,885 \n278,583 \nNumber of Outstanding Loans \n244,155 \n312,680 \nNumber of Branches \n675 \n755 \n* Portfolio at Risk [30] days-The value of all loans outstanding that have one or more \ninstallments of principal past due more than [30] days. This includes the entire unpaid \nprincipal balance, including both the past due and future installments, but not accrued \ninterest. It also includes loans that have been restructured or rescheduled. \n \nMicrofinance Outreach \nThe sector continued to make inroads in the financial inclusion space with the \nsector registering a 18.10% increase in the number of active clients over the year \nfrom 235,885 as at 30 September 2017, to 278,583 as at 30 September 2018. The \nnumber of women borrowers has been on an upward trend over the review period \nwith women borrowers accounting for 53.20% of the total active clients in the \nmicrofinance industry, up from 40.28% recorded in September 2017. \n \nAccess to the Reserve Bank Empowerment facilities such as the Women \nEmpowerment Facility and the Business Linkage Facility has contributed \nsignificantly to the increase in the number of women borrowers. Microfinance \ninstitutions can accelerate their outreach into the remote rural areas with \n56 \n \ninnovative products by embracing mobile banking services and collaborating \nwith mobile network operators through the framework of agency. \n \nCapital & Funding \nThe microfinance sector registered a 36.04% increase in aggregate equity over \nthe review period from $92.65 million as at 30 September 2017, to $126.04 \nmillion as at 30 September 2018. However, the sector’s equity was under threat \nfrom increased portfolio at risk and high operational costs. Lack of long-term \nsustainable funding continues to militate against increased outreach and impact \nof credit-only microfinance institutions on the low income and marginalised. \nMicrofinance shareholders are therefore urged to inject additional capital in order \nto come up with stronger, more sustainable and well-funded institutions. \n \nLending and Portfolio Quality \nThe sector registered a 55.14% increase in total portfolio over the year from \n$175.41million as at 30 September 2017, to $272.13 million as at 30 September \n2018 on the back of increased demand for micro-credit by both micro and small \nenterprises as well as individuals. \n \nThe sector registered a deterioration in portfolio quality over the year with \nportfolio-at-risk (˃30 days) (PaR) ratio of 15.65% as at 30 September 2018, up \nfrom 6.52% as at 30 September 2017, against the international benchmark of 5%. \nThe deterioration in the asset quality was partly driven by increased over-\nindebtedness and multi-borrowing among microfinance borrowers against \ndeclining disposable income. \n \n \n \n57 \n \nDistribution of Loans \n \nLoans to the productive sector of $194.64 million as at 30 September 2018, \naccounted for 71.52% of the total credit-only microfinance sub-sector loans of \n$272.13 million. The figure below shows the distribution of loans for 2017 and \n2018. \n \nFigure 17: Loan Distribution 2017 – 2018 \n \n \nThe Reserve Bank urges the sector to leverage on technology and partner with \nother financial service providers in order to expand their credit portfolios and \noffer other products such as micro-insurance and micro-pensions. \n \n131.24\n42.39\n28.98\n1.76\n194.64\n77.49\n41.5\n3.42\n0\n50\n100\n150\n200\n250\nProductive ($m)\nConsumptive ($m)\nEducation ($m)\nHealth ($m)\n2017\n2018\n58 \n \n \nProfitability \n \nThe credit-only microfinance sub-sector registered a 8.16% increase in net profit \nover the year from $10.42 million for period ended 30 September 2017, to $11.27 \nmillion for the period ended 30 September 2018. The average operational self-\nsufficiency ratio (OSS)3 for the sector deteriorated to 114.80% as at 30 \nSeptember 2018, down from 151.08% as at 30 September 2017. The OSS ratio \nof 114.80% was above the break-even point of 100%, indicating that the sector is \nstill operationally sustainable. \n \nSocial Performance Management \n \nIn line with international best practice and standards, the Reserve Bank of \nZimbabwe will be implementing Social Performance Management to facilitate \nmicrofinance institutions aligning their social objectives and financial objectives \nin providing access to finance to the poor and marginalised. During the course of \n2019, the Reserve Bank will develop a Social Performance Management \nFramework to provide guidance on the evaluation of the impact of microfinance \nservice on the target marginalised groups. \n \n \n \n \n \n \n3 OSS is the ratio of an MFI’s operating revenues to its operating expenses including financial costs and \nimpairment losses on loans. \n59 \n \nANNEXURE VIII \nFINANCIAL INCLUSION \nThe Reserve Bank continues to collaborate with other stakeholders in \nimplementing various initiatives to enhance access to formal financial services \nby the majority of the people. Following the launch of the National Financial \nInclusion Strategy in March 2016, there has been notable progress regarding \naccess to formal financial services by the targeted groups such as women, \nMSMEs and the youth as shown by the indicators below. \n \n Figure 18: Financial Inclusion Indicators - Dec 2016-18 \nIndicator \nDec 2016 Dec 2017 \nJune 2018 Sept \n2018 \nDec 2018 \nValue \nof \nloans \nto \nMSMEs \n$131.69m $146.22 m $168.25m \n$131.83m \n$169.96m \n% of loans to MSMEs \nover total loans \n3.57% \n3.75% \n3.57% \n3.84% \n3.94% \nNumber \nof \nMSMEs \nwith bank accounts \n71,730 \n76,524 \n81,369 \n97,527 \n100,644 \nNumber \nof \nWomen \nwith Bank Accounts \n769,883 \n935,994 \n1,612,820 \n1,528,704 \n1,736,285 \nValue \nof \nLoans \nto \nWomen \n$277.30m $310.78m $360.68m \n$384.55m \n$432.36m \nNumber of Loans to \nYouth \n38,400 \n61,529 \n68,756 \n74,165 \n69,421 \nValue of Loans to Youth \n$58.41m $138.93 m $126.64m \n$146.79m \n$104.43m \nTotal number of Bank \nAccounts \n1.49m \n3.07m \n5.58m \n5.81m \n6.73m \nNumber of Low Cost \nAccounts \n1.20m \n3.02m \n3.56m \n3.31m \n4.67m \n \nFinancial Inclusion Empowerment Facilities \nAccess to funding is a critical component of financial inclusivity. The Reserve \nBank of Zimbabwe and the banking institutions continues to avail funding \ntargeted at various priority groups under the National Financial Inclusion \n60 \n \nStrategy. As at the end of 2018, Revolving Empowerment Facilities amounting \nto $501.1 million had been put in place. However, uptake has remained low at \n55% largely due to low financial literacy, inadequate entrepreneurial skills as well \nas the prevailing foreign currency shortages. \n \nThe injection of additional capital in Export Credit Guarantee Corporation \n(ECGC) to enable it to provide credit guarantee support to Micro Small and \nMedium Enterprises (MSMEs) as well as the operationalisation of the Collateral \nRegistry are expected to facilitate increased access to finance for productive \npurposes by MSMEs lacking acceptable collateral. It is encouraging to note that \nas at 31 December 2018, a total of ten (10) financial institutions had accessed \ncredit guarantees through ECGC. \n \nReserve Bank also acknowledges efforts by banking and microfinance \ninstitutions in the provision of financial services to the target segments under the \nNational Financial Inclusion Strategy using their own resources. \n \nFinancial Literacy \nFinancial literacy is one of the key pillars of the National Financial Inclusion \nStrategy. The Reserve Bank of Zimbabwe acknowledges efforts by financial \ninstitutions as well as other stakeholders in raising awareness of financial services \namong the targeted segments. The Reserve Bank of Zimbabwe urges financial \ninstitutions to continue to invest in financial literacy programs focusing on \nvarious concepts and skills including financial planning, budgeting, saving and \ndebt management skills, as well as promoting the understanding of consumer \nrights and responsibilities. \n \n \n \n61 \n \nSustainable Financing \nTo date, eight (8) financial institutions have confirmed their readiness to \nparticipate in the Sustainability Standards and Certification Initiative for \nFinancial Institutions, an initiative of the European Organisation for Sustainable \nDevelopment under the Global Sustainable Finance Network. The Reserve Bank \nof Zimbabwe urges banking institutions to incorporate sustainability principles in \ntheir business operations to promote positive development impact on society as \nwell as protection of the environment as they conduct their banking business. \n \nCredit Infrastructure \nThe credit infrastructure in Zimbabwe continued to improve as reflected by the \nfavourable assessment in the World Bank’s 2019 Doing Business Report \ncovering the 2018 period, against the background of increased coverage for the \ncredit registry and credit bureaus as well as depth of credit information \n \nCredit Registry \nAs at 31 December 2018, the Credit Registry held 845,672 records of which \n563,420 were active loan accounts. Individual records represented 99% of the \nactive loan records. Total subscribers closed the year at 165, up from 104 in 2017. \nCredit Registry usage levels by subscribing institutions have increased steadily \nto a cumulative 440,407 reports as at 31 December 2018 as shown in the figure \nbelow. \n \n \n \n \n \n \n62 \n \nFigure 19: Cumulative Credit Registry Inquiries: May 2017 - Dec 2018 \n \nA further outliner of the month by month enquiries is shown in the table below: \n \nFigure 20: Monthly Inquiries by Banks and MFIs \n \n \n3,738 \n23,999 \n62,043 \n96,652 \n138,960 \n184,241 \n233,991 \n287,529 \n353,554 \n422,504 \n440,407 \n -\n 50,000\n 100,000\n 150,000\n 200,000\n 250,000\n 300,000\n 350,000\n 400,000\n 450,000\n 500,000\n18011\n16,643\n14799\n17309\n17483\n20114\n23068\n21620\n28860\n23229\n40304\n15829\n1828\n5826\n8035\n5699\n4742\n5690\n5285\n2459\n2074\n0\n5000\n10000\n15000\n20000\n25000\n30000\n35000\n40000\n45000\nBanks Inquiries\nMFI Inquiries\n63 \n \nIn an endeavor to improve services offered by the system, the Credit Registry is \nin the process of implementing value-added products, which are expected to \nenhance credit risk management for lending institutions, facilitate in-depth \nanalysis of the credit data held in the credit registry database for micro and macro \nprudential supervision as well as promote efficiency of credit registry processes. \nFurther, the Credit Registry will intensify the process of collecting and reporting \ninformation from microfinance institutions during 2019 in order to deepen the \ndatabase and provide more comprehensive information for credit decision-\nmaking by lenders. \n \nGoing forward, financial institutions are expected to leverage on the credit \nregistry data to make data driven insights and decisions such as risk based pricing \nand development of new products and services. The credit data will also promote \nthe formulation of data driven policies relating to financial inclusion, micro and \nmacroprudential analysis and financial stability. The enhanced credit reporting \nenvironment will aid in promoting responsible lending practices, reduce over \nindebtedness and lower credit costs, as credit service providers are now able to \nbetter understand their customers using verifiable credit data. \n \nCollateral Registry \nThe Collateral Registry is expected to facilitate borrowers such as SMEs and \nindividuals to pledge movable assets as collateral for borrowings, while providing \nlenders with access to information on any prior pledges on movable assets offered \nas collateral. The software for the collateral registry system is expected to be \nacquired and deployed during the course of 2019. \n \n \n \n \n64 \n \nANNEXURE IX \nNATIONAL PAYMENT SYSTEMS \nThe payment services sector remained generally stable, safe, resilient and sound, \ndespite some isolated challenges in the environment during the year 2018. This \nwas largely attributable to the on-going oversight efforts by the Central Bank, as \nwell as development and implementation of sound risk management measures by \nmarket players. \n \nIn 2018, payment systems registered a growth of 61.7% in transaction values to \nUS$151.75 billion, and 98% in volume terms to 1.96 billion transactions. \n \nFigure 21: Annual Electronic Transactional Activities from 2009- 2018 \n \n \nAnalysis of Payment Systems Activities \nThe national payment stream is characterised by large value (Real Time Gross \nSettlement) and small value (mobile financial services, cheque, automated teller \nmachines, point of sale and internet). The diagram below shows the architecture \nof the payment, clearing and settlement with proportional representation of \ntransactional activities in the economy during the year 2018. \n6.87 \n22.22 \n34.36 \n42.57 \n49.08 \n53.40 \n56.71 \n61.61 \n93.83 \n151.75 \n2 \n5 \n13 \n38 \n144 \n207 \n259 \n367 \n988 \n1,960 \n -\n 500\n 1,000\n 1,500\n 2,000\n 2,500\n -\n 20.00\n 40.00\n 60.00\n 80.00\n 100.00\n 120.00\n 140.00\n 160.00\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n2016\n2017\n2018\nvolumes in Millions\nValues in Billions\nValues\nVolumes\n65 \n \nFigure 22: Structure of Aggregate Payment Stream Values -2018 \n \n \nDuring the period under review the payment streams recorded positive growth \nwith the exception of cheques and ATM transactions. An aggregate of 6.4 million \ntransactions valued at US$85 billion were settled through the RTGS system \nduring 2018 representing an increase of 8% and 38%, respectively, from the \nprevious year. \n \nMobile financial services transactional activities went up by 145% to US$44 \nbillion from US$18 billion whilst volumes increased by 121% to 1.7 billion from \n755 million in 2017. Internet transactions increased by 8.63% to US$13 billion \nin 2018. \n \n \n \nRTGS, 56.23%\nCHEQUE, 0.03%\nPOS, 5.92%\nATMS, 0.11%\nMOBILE , 29.08%\nINTERNET, 8.63%\n66 \n \nSWIFT Security Customer Program \n \nThe SWIFT Security Customer Program launched in 2016 has gained momentum \nand continues to be updated to enhance the existing security controls. The \nsecurity controls are kept under constant monitoring to take into account \nemerging and evolving cyber threats. \n \nTo ensure the effectiveness of these controls, SWIFT has developed an attestation \nand compliance process which requires users to self-attest compliance against the \nmandatory security controls. As at the end of 2018, most banks had put in place \nall mandatory controls that were required at the time of their respective \nattestation. \n \nSWIFT has also announced additional updates to the Customer Security Controls \nFramework through the KYC registry Self Attestation commencing in July 2019. \nTherefore, as mandated by SWIFT and supported by the Central Bank, all \ninstitutions are required to fully comply by December 2019 and expeditiously \nimplement the requisite controls as well as observe these measures on an ongoing \nbasis to counter any cyber security threats. \n \nPayment System Capacity \n \nThe payments, clearing and settlement sector is going through a period of \nunusually rapid evolution and growth. Market players have enhanced the payment \nsystems infrastructure capacity to handle currently high volumes. The safety and \nstability of the payment systems infrastructure and related technology hinges on \nthe effective management of system capacity on an on-going basis. Inadequately \naddressed capacity issues could result in operational and strategic risks, \npotentially affecting the ecosystem. \n67 \n \nCognisant of that and to ensure financial stability in the ecosystem, market \nplayers should continuously plan and invest in enhancing their infrastructure \ncapacity in tandem with the increasing electronic transactions. \n \nPayment Systems Oversight Activities \n \nOverall oversight activities focused on monitoring and evaluation of the large \nvalue and retail payment systems on a risk sensitive basis. Pursuant to that, \nmeasures undertaken by system operators were largely adequate and ensured the \nefficient and safe functioning of the payment system. \n \nNotwithstanding that, the following key areas were noted and require further \nattention and monitoring: \nCorporate governance – mobile payment providers are still to operate as legal \nentities in line with Retail Payment Systems Guideline instead of being strategic \nbusiness units. This compromises effective supervision and independence of the \nmobile financial services. \n \nPayment system providers are, therefore, urged to comply with the \nGuidelines for Retail Payment Systems and Instruments of 2017 which \nrequires institutions to regularise their governance structures by end of year \n2019. \n \nInternational Standards maintenance – there is limited appreciation of key \nrecognised standards such as the principles of financial market infrastructures \n(PFMIs) and financial action task force (FATF). This is largely due to inadequate \ntraining and awareness. \n \n68 \n \nBanks and payment services providers should continuously train all staff to \nensure a better understanding, effective and consistent application of \nstandards across the board. \n \nConsumer protection - concerns related to delayed query resolutions, consumer \neducation and awareness, and lack of full transparency on some key information \ncontinue to be registered thus impacting negatively on the confidence levels. \n \nPayment services providers should; \ni. \nEnforce timely resolution of consumer queries as per approved policies; \nii. \nContinue educating their customers on the products and cyber-crime related \nissues; \niii. \nEnhance their systems to inform the consumer in advance before committing \nto the services, especially charges, thereby promoting transparency as opposed \nto the current set up.", "source": "RBZ", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///RBZ/Monetary_Policy_Statements/mpsfeb2019Zim.pdf"}
{"doc_id": "bf0cb06a6d02bcf980c05e645aeb9bac", "text": "2019 MID TERM MONETARY POLICY STATEMENT \n \n \n \nTRANSITION TO NORMALCY \n \n \nBY \nDR. J. P. MANGUDYA \nGOVERNOR \n \n \n \n \n \nRESERVE BANK OF ZIMBABWE \n13 SEPTEMBER 2019 \n \n2 \n \nTABLE OF CONTENTS \n \nSECTION ONE: INTRODUCTION .................................................................... 5 \nSECTION TWO: REVIEW OF THE RECENT MONETARY POLICY ........... 8 \nSECTION THREE: NEW MONETARY POLICY MEASURES ..................... 10 \nFINANCIAL SECTOR DEVELOPMENTS ...................................................... 30 \nBANKING SECTOR ARCHITECTURE .......................................................... 31 \nPERFORMANCE OF THE BANKING SECTOR ............................................ 32 \nCapitalisation ...................................................................................................... 33 \nBanking Sector Deposits ..................................................................................... 34 \nLoans and Advances............................................................................................ 36 \nLoan Portfolio Quality ........................................................................................ 37 \nEarnings Performance ......................................................................................... 38 \nBanking Sector Liquidity .................................................................................... 39 \nFigure 7: Prudential Liquidity Ratio Trend (%) ................................................. 40 \nFINANCIAL STABILITY INITIATIVES ......................................................... 42 \nBasel II/III Implementation ................................................................................. 42 \nMacro-prudential policy framework ................................................................... 42 \nInternational Financial Reporting Standard 9 (IFRS 9) ...................................... 42 \nENHANCEMENT OF CREDIT INFRASTRUCTURE .................................... 42 \nFINANCIAL TECHNOLOGY (FINTECH) ...................................................... 44 \nOTHER DEVELOPMENTS IN THE BANKING SECTOR ............................ 46 \nAfrexim Bank Initiative, Africa’s Due Diligence Data, MANSA Platform ...... 47 \nLegal Developments ........................................................................................... 47 \nPERFORMANCE OF THE MICROFINANCE SECTOR ................................ 48 \nMicrofinance Sector Lending and Portfolio Quality .......................................... 50 \nFINANCIAL INCLUSION ................................................................................ 53 \nSUSTAINABLE FINANCING .......................................................................... 55 \n \n \n \n \n3 \n \nLIST OF TABLES \nTable 1: Global Economic Growth & Outlook (%) ............................................ 16 \nTable 2: Global Foreign Exchange Receipts as at 30 June 2019 ........................ 20 \nTable 3: Export Shipments (USD Millions) ....................................................... 21 \nTable 4: Foreign Payments for the period January - June (US$) ....................... 22 \nTable 5 : Architecture of the Banking Sector ..................................................... 32 \nTable 6: Financial Soundness Indicators ............................................................. 33 \nTable 7: Banking Sector Capitalisation ($ million) ............................................ 34 \nTable 8: Deposit Insurance Payments as at 30 June 2019 .................................. 41 \nTable 9: Status of Banks under Resolution* as at 30 June 2019 ........................ 41 \nTable 10 : Microfinance Sector, Key Performance Indicators ........................... 49 \nTable 11: Financial Inclusion Indicators - Dec 2016 - March 2019 ................... 53 \nTable 12: Payment Streams Transactional Activities from January to June 2019\n ............................................................................................................................. 58 \n \n \n \n \n4 \n \nLIST OF FIGURES \nFigure 1: Commodity Price Indices (2010 = 100) ............................................. 18 \nFigure 2: Gold Purchases by Fidelity Printers and Refiners (kilograms) – \nJanuary to June 2019 ........................................................................................... 19 \nFigure 3: Merchandise Exports (US$ m) January - May 2018 & 2019 ............. 23 \nFigure 4: Merchandise Imports January-May 2018 & 2019 (US$m) ................ 24 \nFigure 5: Exchange Rate Developments: February - May 2019 ........................ 25 \nFigure 6: Parallel Market Premium (%) ............................................................. 26 \nFigure 7: Reserve Money Developments ............................................................ 27 \nFigure 8: Broad Money Supply (M3) ................................................................. 28 \nFigure 9: Annual Inflation Profile (%) ............................................................... 29 \nFigure 10: Trend of Banking Sector Deposits ($ million) .................................. 35 \nFigure 11: Composition of Deposits as at 30 June 2019 .................................... 35 \nFigure 12 : Banking Sector Loans (Dec 2014 - June 2019 ZWL$M ................. 36 \nFigure 13 : Sectoral Distribution of loans as at 30 June 2019 ............................ 37 \nFigure 14 : Non-Performing Loans to Total Loans Ratio ................................... 38 \nFigure 15: Income Mix as at 30 June 2019 ......................................................... 39 \nFigure 16: Prudential Liquidity Ratio Trend (%) ............................................... 40 \nFigure 17: Cumulative Credit Registry Inquiries: June 2017 – June 2019 ........ 43 \nFigure 18: Microfinance Sector Trends in Total Loans & PaR Ratio ................ 51 \nFigure 19: Microfinance industry- Trends in Profitability, 2014 - 2019 ............ 52 \n \n \n \n5 \n \nSECTION ONE \n \n INTRODUCTION \n1. \nThis mid-term Monetary Policy Statement comes at a time when the \ncountry is implementing a number of policy reforms to strengthening fiscal \nsustainability, reducing inflation and promoting a flexible exchange system \nand lay the foundation for sustainable private sector-led economic \ntransformation. \n \n2. \nThe inflationary pressures emanate from; (i) the lagged effects of \nmonetization of past fiscal deficits, (ii) the ongoing and necessary \ncorrection of long decades of mispricing and across the board subsidization \nof many goods and services including foreign currency, fuel, electricity, \netc. which resulted in foreign currency shortages, spiralling parallel \nexchange rate premiums and speculative pricing, thus posing the risk of a \ncostly re-dollarization of the economy. \n \n3. \nTo restore normalcy in the foreign currency market and stabilise the \nensuing inflationary pressures, we formalised the trading of foreign \ncurrency by introducing the inter-bank foreign exchange market and \nlicencing of bureaux de change in February 2019. Subsequent to that, \nGovernment took a deliberate and bold move of removing the multiple-\ncurrency system through Statutory Instrument (SI) 142 in June 2019. \n \n4. \nThese measures are meant to restore confidence and macroeconomic \nstability, strengthen economic fundamentals and to create a conducive \nbusiness environment. The policy measures were also buttressed by \nadditional strategies to manage liquidity in the economy and keeping \n \n6 \n \ninflation under check, including the recent upward review of the Bank rate \nfrom 15% to 50%, which is meant to curtail speculative borrowing. \n \n5. \nAs a result of ongoing policy measures, we have seen the parallel market \nexchange rate starting to converge with the interbank rate, as foreign \ncurrency flows to the formal market improve. \n \n6. \nAs the country get over the pass-through effects of the ongoing re-\nalignment of domestic prices that include fuel and electricity, we should \nsee inflationary pressures beginning to recede, as retailers adjust their \nprices in line with the relative stability of the inter-bank market and falling \nparallel exchange rate premiums and as prices re-align to depressed or \nsubdued effective demand. \n \n7. \nA more positive outlook on exchange rate and inflation is, therefore, \nexpected in the medium to long term, as the necessary supportive policy \ninterventions and conditions are already in place, including the following: \n \ni. The discontinuation of Central Bank financing of Government deficits to \ncurtail money supply growth. This allows for successful monetary \ntargeting and is a precondition for a stable exchange rate and inflation. \nii. The upward review of the Bank rate, which is expected to continue \ncurtailing speculative borrowing to purchase foreign currency on the \nforeign exchange market. \niii. The implementation of a tight monetary regime when necessary, coupled \nwith a flexible exchange rate system. The flexible exchange rate will \nassist in absorbing external shocks and ensuring that the external position \nis sustainable. The strict control of money supply through monetary \n \n7 \n \ntargeting framework is expected to anchor inflation expectations and \nfurther stabilise the exchange rate. \niv. Lastly, the introduction of measures supportive of the local currency \nsystem will allow the Central Bank to regulate the quantity of money in \nthe economy in line with levels of economic activity. The current \nshortage of physical cash has led to a supply and demand disequilibrium, \nand arbitrage opportunities for differential pricing models, depending on \nthe mode of payment, thereby creating distortions in the pricing \nmechanism. Shortages of cash excludes the informal sector, the rural \npeople and senior citizens from fully participating in economic activity. \n \n8. \nIt is our considered view that the policies being pursued by Government \nwill undoubtedly tame the inflationary pressures currently bedevilling the \neconomy. As such, this Statement proposes additional confidence building \nmeasures, including the timeous and effective communication of economic \nand monetary developments to help anchor inflation expectations. \n \n9. \nAs monetary authorities, we strongly believe that the country’s underlying \nfundamentals are in the right direction and must be buttressed by strong \ncommitment and implementation of the policy measures to boost economic \ngrowth and to guarantee exchange rate and price stability. Moreover, the \nneed for continuing structural reforms across all sectors of the economy \nremains critical for the country to realize the envisaged vision of becoming \nan upper middle class economy by 2030. \n \n10. \nThe rest of the monetary policy statement is as follows: Section 2 provides \nthe Review of the recent monetary policy measures, Section 3 highlights \nthe current monetary policy measures and lastly, the Annexures Section \n \n8 \n \nhighlight the international and domestic developments underpinning this \nmonetary policy statement. \n \nSECTION TWO \n \nREVIEW OF THE RECENT MONETARY POLICY \n11. \nIn the Monetary Policy Statement of February 2019, the Bank announced \na number of milestone policies, which principally include the \nestablishment of the inter-bank foreign exchange market and the \ndesignation of the RTGS dollar as a unit of accounting for both the private \nand government sectors in the economy. \n \n12. \nThe Bank also adopted the monetary targeting framework for monetary \npolicy. Together with the subsequent removal of the multiple currency \nsystem and upward review of the Bank rate in June 2019, the policies have \nhad significant positive impact on the economy, especially with regard to \nrestoration of sanity and stability. \n \n13. \nThe introduction of the interbank foreign currency market was meant to \naddress the foreign currency grid-lock arising from widening parallel \nmarket activities by harnessing foreign exchange through the formal \nmarket. As a result, about US$ 799.0 million worth of foreign currency has \nbeen traded on the interbank market since its introduction. \n \n14. \nWhilst the adverse side effects of the policies to restore macroeconomic \nstability were anticipated, it is essential to note that the measures are now \nbeginning to bear fruit, with some stability being observed on both the \navailability and price of foreign currency, with some significant positive \nspill over benefits to the prices of goods and services in the economy. Other \n \n9 \n \nsupporting policy measures included reviewing the export retention \nthresholds to more favourable levels, consistent with the new foreign \ncurrency market reforms. \n \n15. \nIn response to the fiscal and monetary reforms, the country witnessed an \nimprovement in the current account balance during the first half of 2019, \ndue to import compression following the expenditure-switching effects of \nthe introduction of the exchange rate, which has seen consumption moving \naway from imported products to domestically produced goods. \n \n16. \nThe current account deficit narrowed from a peak of US$2.7 billion in 2011 \nto US$1.4 billion in 2018 and is projected to further contract to US$597.2 \nmillion in 2019. This development augurs well with easing of pressures on \nthe foreign currency demand and exchange rate stability. \n \n17. \nThe Bank has, however, gone a long way to contain money supply growth \nthrough mopping up of excess liquidity and reducing central bank \nfinancing of government deficits. Similarly, the exchange rate depreciation \nhas been contained and the interbank rate has stabilised following the \nremoval of the multiple currency system in June 2019. \n \n18. \nNotwithstanding these measures, annual inflation escalated from about \n5.39 percent in September 2018 to 175.5 percent in June 2019, mainly \nreflecting the exchange rate price indexation in an environment of high \npremiums in the parallel market. Since the abolishment of the \nmulticurrency system and re-introduction of the Zimbabwe dollar in June \n2019 as well as the upward reviewing of the Bank policy rate, the inflation \npressures are expected to dissipate. Both the annual and monthly inflation \nare expected to moderate over time. \n \n \n10 \n \nSECTION THREE \n \n NEW MONETARY POLICY MEASURES \n19. \nThe re-introduction of the Zimbabwean dollar presents renewed scope for \nthe Bank to conduct effective monetary policy. Accordingly, the Bank shall \nvigorously pursue its primary objective of maintaining price and financial \nstability, while complementing fiscal policy in line with the country’s \nobjective of becoming an upper middle income country by 2030. \n \n20. \nThe following policy tools will be used to guide the Bank’s monetary \npolicy operations: \n \ni. \nIntroduction of USD-denominated Savings Bonds \n \n21. \nIn order to promote a savings culture and to provide reasonable return on \nFCA Nostro account deposits and USD cash held by individuals and firms, \nthe Bank is with immediate effect, introducing USD-denominated Savings \nBonds alongside the current ZWL$ denominated Savings Bonds, with the \nfollowing features: \n(i) \nInterest rate of 7.5% per year; \n(ii) \nMinimum tenure of one year; \n(iii) Tax Exemption, in line with Government policy; \n(iv) \nLiquid Asset Status; \n(v) \nTradable; and \n(vi) \nAcceptable as collateral for overnight accommodation by the RBZ. \n \nThe interest rate on the ZWL$ Savings Bonds shall soon be reviewed to \ntake account of developments on the domestic Treasury Bill market and to \nmotivate banks to provide meaningful return on local currency deposits. \n \n11 \n \n \nii. \nEasing Cash Shortages \n \n22. \nThe re-introduction of the local currency and the subsequent withdrawal of \nthe US Dollar as a transactional currency implies that the Bank should issue \nadequate notes and coins to support economic activity. The increase in the \ndemand for physical cash has worsened cash shortages, as reflected by \nunending queues at most banks in the country. In addition, visitors to the \ncountry including tourists are failing to access cash for their domestic \ntransactions, as they are supposed to buy local currency cash from banks \nor bureaux de change. Failure to get cash is undermining the confidence in \nthe local currency as well as forcing economic agents to resort to the illegal \ntransactions in foreign currency and to selling cash at a premium. \n \n23. \nOur estimation, based on the country’s historical cash levels and practises \nin neighbouring countries, shows that the currency in circulation should be \nbetween 10-15% of broad money supply. Accordingly, without prejudice \nto our cash-lite society drive which has served the country very well, the \nBank will continue to inject additional notes and coins on a gradual basis, \nto support productive and lessen the inconvenience caused by physical cash \nshortages to the transacting public. The cash injections will not result in an \nincrease in money supply as banks will use their existing RTGS balances \nto exchange for cash. \n \niii. \nLiquidity Management \n \n24. \nA tight monetary growth target will continue be implemented to promote \nstability in the exchange rate and inflation. \n \n \n12 \n \n25. \nTo support this, the Bank will take the necessary open market operations \n(OMO) and utilise the instruments at its disposal to ensure that a tight \nreserve money programme is implemented aimed at keeping reserve \nmoney growth rate to no more than 10% by end of 2019. Given the recent \nincrease in reserve money, this will entail a reduction in reserve monetary \ngrowth. \n \nvi. \nCredit Enhancing Policies \n \n26. \nThe Bank remains concerned about the depressed levels of productivity \nand their implications on both exchange rate stability and potential output \nof the economy. In this regard, and consistent with the monetary targeting \nframework, the Bank will introduce measures and incentives to encourage \nbanks to increase long term lending to enhance credit to the private sector \nto support economic growth. \n \n27. \nUnder this framework, banking institutions with loan maturities of above \ntwo years in their loan portfolios will be able to use their commercial loan \ninstruments as collateral for borrowing from the Reserve Bank. This \nmeasure is meant to break the cycle of short-termism in the credit market \nas well as encourage banks to promote long term savings on their \nportfolios. \n \n28. \nIn addition, the Bank will also be deepening financial inclusion, \nparticularly aimed at enhancing access to finance by SMEs in consideration \nof their growing role in the economy. The Bank shall, therefore, only \nintervene on a targeted basis to support the productive sectors of the \neconomy under its special productive sector financing window in its role \nas the lender of last resort to stimulate economic activity. The interest rate \n \n13 \n \nunder the productive sector financing window shall be linked to the \nTreasury Bill rate as determined by the market. \n \nv. \nCapitalization of Banks \n \n29. Banking institutions must continuously evaluate their capital adequacy in \nrelation to their risk profiles in view of the changing operating \nenvironment. Against this background, all banking institutions are \ntherefore expected to proactively reinforce their economic capital levels in \norder to ensure that the institution’s risks are well covered. Going forward, \nall Tier 1 banking institutions are required to hold core capital of at least \nZWL$ 200 million by December 2020 in order to support risks associated \nwith their business activities. \n \n30. The minimum capital requirements for banking institutions under Tier 2 \nand Tier 3 shall remain at the current levels and shall be reviewed next \nyear. \n \nvi. \nForward Guidance \n \n30 \nThe country is moving towards bringing inflation under control and \nlowering it over time after the initial burst of high inflation that followed \nfrom the liberalisation of the exchange rate. In this regard, it is important \nfor the Bank to pursue the following: \n \n(a) Overnight Bank Rate \n31 \nProviding forward guidance on the major macroeconomic indicators, \nincluding the desired and expected path of interest rates, exchange rates \nand inflation. In this regard, the Bank’s rate for overnight borrowing has \n \n14 \n \nbeen revised upwards from 50% to 70% to take account of developments \non inflation and the exchange rate. The Bank expects inflation to start \ndeclining after the current high inflation cycle ends, as attested by ebbing \nexchange rate depreciation pressures, following the removal of the multi-\ncurrency system. \n \nb) RBZ Board and the Monetary Policy Committee \n32. \nGovernment has put in place a new Board of Directors and a Monetary \nPolicy Committee (MPC) with effect from September 2019, following the \nexpiry of the tenure of the current Board, which served the Bank for its full \nstatutory tenure of four years. \n \nc) Effective Communication \n33. \nThe Bank will be transparent in its monetary policy interventions in order \nto anchor inflation expectations. In addition, the Bank shall also strengthen \ncommunication with relevant stakeholders, including through the timely \npublication of monetary and the Bank’s balance sheet data. This will be \naimed at promoting a two-way feedback mechanism that strengthens \nstakeholder understanding of monetary policies. \n \n \n \n \n \n \n \n \n \n \n \n15 \n \nCONCLUSION AND OUTLOOK \n \n34. \nThe economy is transitioning to stabilisation. Measures put in place by \nGovernment to strengthening fiscal sustainability and promoting a flexible \nexchange rate system have therefore set the right conditions for a sustained \neconomic recovery and growth. \n \n35. \nThe current levels of broad money supply of around ZLW$15 billion and \nthe country’s monthly foreign exchange receipts of US$400 million, \ncoupled with fiscal consolidation, should ideally go a long way in \nstabilising the exchange rate and containing the pass-through effects of \nexchange rate depreciation to inflation. \n \n36. \nConsequently, inflation is expected to stabilize to lower levels, after the \ncurrent cycle, which is largely influenced by the base effect and adverse \nexpectations or low confidence levels, has passed. The confidence \ndividends from stable inflation and exchange rates will help anchor adverse \ninflation expectations. \n \n37. \nRight sizing the economy was therefore a necessary step to transform the \neconomy towards a market based system which is consistent with the \nnational aspiration to become an upper middle income country by 2030. \nThis aspiration requires the country to increase productivity, \ncompetitiveness, exports, confidence and social cohesion. \n \nI thank you \n \nJohn Mangudya \nGovernor \n \n16 \n \nANNEXURE \n \nGLOBAL AND REGIONAL ECONOMIC DECVELOPMENTS \n31. \nGlobal economic growth is projected to slowdown in 2019, partly due to \nweaker performance in Europe and Asia, as well as negative effects of the \ntrade wars between the United States and China. Furthermore, the protracted \nuncertainty concerning Brexit is also posing a number of risks to the \nEurozone and the rest of the global economy. \n \n32. \nThese developments represent a drag on global trade in general, in so far as \nthey weigh down on commodity prices. Accordingly, the International \nMonetary Fund (IMF), in its April 2019 update of the World Economic \nOutlook (WEO), projected global growth for 2019 at 3.3%, down from 3.6% \nin 2018. Table 1 summarizes global economic growth developments and \nprospects for selected regions and countries. \n \nTable 1: Global Economic Growth & Outlook (%) \n \n \n2016 \n2017 \n2018 \n \n2019 \nProj. \nWorld Output \n3.4 \n3.8 \n3.6 \n3.3 \nAdvanced Economies \n1.7 \n2.3 \n2.2 \n2.0 \n US \n1.7 \n2.4 \n2.2 \n1.8 \n Euro Area \n1.6 \n2.2 \n2.9 \n2.3 \n Japan \n0.6 \n1.9 \n0.8 \n1.0 \nEmerging Market & Developing Economies \n4.6 \n4.8 \n4.5 \n4.4 \n China \n6.7 \n6.8 \n6.6 \n6.3 \n India \n8.2 \n7.2 \n7.1 \n7.3 \nSub-Saharan Africa \n1.4 \n2.9 \n3.0 \n3.5 \n Zimbabwe1 \n0.6 \n4.7 \n6.2 \n-3.2 \nLatin America & the Caribbean \n-0.6 \n1.2 \n1.0 \n1.4 \nSource: IMF World Economic Outlook (April 2019) \n \n \n1 Zimbabwe growth rates are from Treasury, Reserve Bank & Zimstat \n \n17 \n \n33. \nIn line with the aforementioned global developments, regional growth \nprospects for the sub-Saharan Africa (SSA) remain constrained at levels \nbelow 6% across the continent. SSA economies are, however, projected to \ngrow by 3.5% in 2019, up from 3.0% in 2018. \n \n34. \nThe anticipated slowdown in global growth has also affected Zimbabwe’s \neconomic prospects for 2019, being a small open economy which had \nalready been plagued by unfortunate natural disasters such as drought and \nCyclone Idai, and the impact of climate change. \n \n35. \nZimbabwe’s growth prospects for 2019 are further weighed down by the \npersistent foreign currency shortages and constrained spending being \nimposed by fiscal austerity reforms, as well as the inescapable depressed \ndemand for our exports resulting from the slowdown in the growth of the \nglobal economy. \n \nInternational Commodity Price Developments \n36. \nThe international commodity prices displayed varied trends over the first 6 \nmonths of 2019, with some commodities registering gains, while others \nreceded. Precious metal prices, particularly gold, recorded strong growth as \na weaker US dollar and volatile equity markets on the back of weak US \neconomic data heightened fears of a global economic slowdown. \nFurthermore, the Brexit turmoil and a dovish stance by the U.S. Federal \nReserve signalled a potential slowdown in the pace of rate hikes in the 2019 \noutlook. These developments are likely to boost safe haven demand for \nprecious metals, which would benefit our mineral exports. \n \n37. \nAlready, base metal prices, which had for long been hurt by the trade wars \nbetween the United States and China, somewhat rebounded on the back of \n \n18 \n \nsupply disruptions in some markets. The rebound was also underpinned by \nfears of shortages, amid supply disruptions and the positive demand outlook \nprompted by the expectation of a fiscal stimulus in China. \n \n38. \n Global energy prices eased, as oil prices dropped due to the increase in \nsupply that emanated from a temporary waiver in United States sanctions on \nIranian oil exports to some countries. The record-high US crude oil \nproduction also exerted downward pressure on prices. Oil prices are, \nhowever, showing some signs of recovery owing to production cuts by the \nOrganization of Petroleum Exporting Countries (OPEC). Lower oil prices \nwill benefit us in terms of reduced pass-through effects to domestic inflation. \n \n39. \nCommodity price indices for the period from January 2015 to June 2019 are \nshown in Figure 1. \n \nFigure 1: Commodity Price Indices (2010 = 100) \nSource: World Bank \n \n30\n40\n50\n60\n70\n80\n90\n100\n110\nEnergy\nAgriculture\nBase Metals\nPrecious Metals\n \n19 \n \nGold Deliveries to Fidelity Printers & Refineries (FPR) \n40. \nGold deliveries to Fidelity Printers and Refineries stood at 12.3 tonnes for \nthe period January to June 2019. This was a 40.6% decline compared to 17.3 \ntonnes that were delivered during the comparative period in 2018. Exchange \nrate, pricing and payment issues, which partly accounted for the decline in \ndeliveries have, however, been largely resolved through the recent monetary \npolicy measures. \n \n41. \nIt is, however, pleasing to note that small scale producers, despite facing a \nplethora of challenges, continued to dominate the country’s gold deliveries, \naccounting for more than 60% of total deliveries. Primary producers \ncontributed the remainder as shown in Figure 2 below: \n \nFigure 2: Gold Purchases by Fidelity Printers and Refiners (kilograms) – \nJanuary to June 2019 \n \nSource: FPR, 2019 \n \n \n745.2\n639.9\n925.7\n1,006.6\n878.9\n814.5\n1,025.8\n1,496.3\n1,690.6\n1,119.7\n1,278.8\n687.4\n0.0\n500.0\n1000.0\n1500.0\n2000.0\n2500.0\n3000.0\n0.0\n200.0\n400.0\n600.0\n800.0\n1000.0\n1200.0\n1400.0\n1600.0\n1800.0\nJanuary\nFebruary\nMarch\nApril\nMay\nJune\nPrimary producers\nSmall Scale producers\nTotal Gold Purchased (RHS)\n \n20 \n \nForeign Exchange Receipts \n \n42. \nTotal foreign exchange receipts (including exports, international \nremittances, offshore loan proceeds, income receipts and foreign investment \nproceeds) for the period January to June 2019, amounted to US$2.58 billion, \ncompared to US$3.40 billion received during the same period in 2018, \nrepresenting a 24.0% decrease. Table 2 shows foreign exchange receipts as \nat 30 June 2019. \n \n Table 2: Global Foreign Exchange Receipts as at 30 June 2019 \n (USD Millions) \nSource of Receipt \n30 June \n2019 \n30 June \n2018 \n% \nChange \nMining \n1,240.0 \n1,542.2 \n-19.6% \nManufacturing \n80.5 \n70.7 \n13.9% \nAgriculture (including Horticulture & \nTobacco) \n318.2 \n353.0 \n-9.9% \nTourism \n62.0 \n89.2 \n-30.5% \nTransport \n89.2 \n119.8 \n-25.5% \nTelecommunications \n6.5 \n2.1 \n209.5% \nGeneral Services \n20.0 \n30.1 \n-33.6% \nIncome Receipts \n39.0 \n18.8 \n107.4% \nExternal Loan Disbursements \n207.4 \n574.5 \n-63.9% \nForeign Investment \n14.4 \n14.6 \n-1.4% \nInternational Money Transfers \n504.7 \n581.3 \n-13.2% \nTotal foreign Currency Receipts \n2,581.9 \n3,396.3 \n-24.0% \nSource: Exchange Control Records (2019) \n \n \n21 \n \nExport Shipments \n \n43. \nExport shipments for the period January to June 2019 stood at US$1.90 \nbillion, a 7.5% decrease from US$2.06 billion registered during the \ncomparable period in 2018. Table 3 shows export shipments by sector. \n \n Table 3: Export Shipments (USD Millions) \nSector \n30 June 2019 \n30 June 2018 \n% Change \nMining \n1,314.20 \n1,534.30 \n-14.30% \nTobacco \n281.4 \n203.9 \n38.00% \nManufacturing \n127.9 \n106.5 \n20.10% \nAgriculture \n112.5 \n70.5 \n59.60% \nTransport \n44.7 \n99.9 \n-55.30% \nHorticulture \n13.6 \n16.6 \n-18.10% \nTourism (Hunting) \n3.3 \n5.8 \n-43.10% \nPostal & Telecommunications \n2.2 \n3.9 \n-43.60% \nOther Services (Construction, etc) \n4.4 \n17.5 \n-74.90% \nTotal \n1,904.20 \n2,058.90 \n-7.50% \nSource: Exchange Control Records (2019) \n \nForeign payments also declined by 3%, from US$45.8 million in 2008 to \nUS$24.5 million in the comparable period in 2019. \n \n22 \n \n Table 4: Foreign Payments for the period January - June (US$) \nSector \n2019 \n2018 \nVariance \n% change\nRetail and distribution \n502,217,299 \n751,994,098 \n(249,776,799) \n(33) \nServices \n431,190,305 \n630,818,095 \n(199,627,789) \n(32) \nManufacturing \n398,997,907 \n607,317,193 \n(208,319,286) \n(34) \nMining \n308,100,910 \n342,612,098 \n(34,511,188) \n(10) \nAgriculture \n74,043,223 \n110,008,909 \n(35,965,686) \n(33) \nIndividuals \n24,471,477 \n45,789,744 \n(21,318,267) \n(47) \nTotal \n1,739,021,121 \n2,488,540,137 \n(749,519,016) \n(30) \nSource: Exchange Control Records (2019) \n \nBALANCE OF PAYMENTS DEVELOPMENTS \n44. \nThe country’s external sector position is showing signs of improvement, \nwith the current account deficit projected to narrow further by end of 2019. \nThis is largely on account of a slowdown in imports, against a background \nof an improvement in the country’s export earnings. \n \n45. \nThe current account, for the first time since the adoption of the \nmulticurrency, registered a surplus in the first quarter of 2019, reflecting a \nsharp contraction in imports, against a moderate increase in export exports. \n \n46. \nCumulative exports for the five-month period up to May 2019 stood at \nUS$1,558.2 million, a 5.1% increase from US$1,482.9 million realized in \nthe comparable period in 2018. The increase in exports was bolstered by \nhigher export earnings for nickel, tobacco, diamonds and jewellery. \n \n \n \n \n \n23 \n \n Figure 3: Merchandise Exports (US$ m) January - May 2018 & 2019 \n \nSource: Zimstat, 2019 \n \nMajor Exports and Imports \n \n47. \nThe country’s exports for the period January to May 2019 were mainly \ndestined for the South African, Asian and European markets. South Africa \ncontinues to be the major destination for the country’s total merchandise \nexports, absorbing about 46%. Major exports to South Africa include \nplatinum group of metals (PGMs), gold and nickel, among others. \n \n48. \nOn the contrary, merchandise imports for the first five months of 2019 \nsharply declined from US$2,747.7 million in the comparative period in 2018 \nto US$1,957.2 million, a 28.8% decline as shown as shown in Figure 4. \n \n \n \n1,482.9 \n1,558.2 \n200\n700\n1,200\n1,700\n2018\n2019\nJanuary - May 2017 & \n2018\n292.6\n349.5\n295.9\n277.0\n343.2\n0\n50\n100\n150\n200\n250\n300\n350\n400\nJan\nFeb\nMar\nApr\nMay\nMonthly Merchandise \nExports Jan-May 2019\n \n24 \n \n \n Figure 4: Merchandise Imports January-May 2018 & 2019 (US$m) \n \nSource: ZIMSTAT & RBZ Computations \n \n49. \nImports for the period January to May 2019 were mainly composed of diesel \n(18.8%), petrol (9.3%), medicines (2%) and crude soya bean oil (1.4%). \n \n50. \nThe country continues to source most of its imports from South Africa and \nits fuel from Singapore. During the period January to May 2019, the \ncountry’s imports were mainly obtained from South Africa (34.9%), \nSingapore (28.7%), China (9.2%), India (2.6%) and the UK (2.4%). \n \n51. \nThe cumulative trade deficit between January and May 2019 stood at -$399 \nmillion which is a significant improvement from a deficit of -$1,264.8 \nmillion, incurred in the same period in 2018. \n \n52. \nMerchandise imports have been declining due to foreign exchange shortages \nand the effects of the austerity measures being implemented by Government. \nThis has resulted in the narrowing of the trade deficit since September 2018. \n \n2,747.7 \n1,957.2 \n0\n1,000\n2,000\n3,000\nJan-May 2018\nJan-May 2019\nImports-Jan-May 2018 & 19\n366.7\n408\n329.1\n416.7\n436.8\n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\nJan\nFeb\nMar\nApr\nMay\nMerchandise Imports- 2019\n \n25 \n \nEXCHANGE RATE DEVELOPMENTS \n \n53. \nThe introduction of the new currency has greatly assisted in reducing the \npremium between the parallel market rate and official exchange rate from \nabove 60% to current levels of around 5-10%. The graph below depicts the \ndevelopments in the interbank and the parallel exchange since the \nintroduction of the interbank market in February 2019. \n \n Figure 5: Exchange Rate Developments: February - May 2019 \n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\n14.00\n25-Feb\n4-Mar\n11-Mar\n18-Mar\n25-Mar\n1-Apr\n8-Apr\n15-Apr\n22-Apr\n29-Apr\n6-May\n13-May\n20-May\n27-May\n3-Jun\n10-Jun\n17-Jun\n24-Jun\n1-Jul\n8-Jul\nINTERBANK RATE\nPARALLEL RATE\n \n \n Figure 6: Parallel Market Premium (%) \n \nSource: RBZ, 2019 \n \n54. \nThe use of letters of credit to support critical imports such as fuel and \ncooking oil is also assisting to reduce the demand for foreign currency, \nwhich would arise in the event of once-off payments and thus assisting in \nstabilizing the exchange rate. \n \nMONETARY DEVELOPMENTS \nReserve Money \n55. \nThe Reserve Bank of Zimbabwe has adopted the Monetary Targeting \nframework to curtail the rise in money supply as a way of dealing with \ninflationary pressures in the economy. Under this framework, the Bank will \nuse base money as the operating target of policy, and this has been pegged \nat 8-10% by year end. In this regard, Reserve Money recorded year on year \ngrowth of 7.05% in May 2019, down from 36.11% in April 2019. The \nslowdown in reserve money growth is largely attributed to active liquidity \nmopping by the Central Bank through saving bonds issuances, as well as \nRBZ foreign exchange sales to the inter-bank market. If this path is \n0.0\n20.0\n40.0\n60.0\n80.0\n100.0\n120.0\n25-Feb\n4-Mar\n11-Mar\n18-Mar\n25-Mar\n1-Apr\n8-Apr\n15-Apr\n22-Apr\n29-Apr\n6-May\n13-May\n20-May\n27-May\n3-Jun\n10-Jun\n17-Jun\n24-Jun\n1-Jul\n8-Jul\n \n27 \n \nmaintained, the country would meet its reserve money growth target of 10% \nby year end. \n \nFigure 7: Reserve Money Developments \n \nSource: RBZ, 2019 \n \n56. \nTo contain money supply growth, Government instituted other \ncomplementary measures from the fiscal side. On this note, the RBZ lending \nto Government has not increased, reflecting fiscal consolidation measures \nbeing pursued by Government since the second half of 2018, under the \nTransitional Stabilisation Programme (TSP). \n \n57. \nBroad money supply, however, recorded a year on year growth of 57.51%, \nfrom $8 258.92 million in May 2018 to $13 009.04 million in May 2019. \nThe growth, partly reflects expansion in Foreign Currency Account (FCA) \ndeposits, caused by the movement of the exchange rate, from 1:1 to about \n1:8. The re-denomination of the foreign currency positions into local \ncurrency resulted in inflated balances, hence the increase in money supply. \n \n0\n10\n20\n30\n40\n50\n60\n70\n -\n 1\n 1\n 2\n 2\n 3\n 3\n 4\nJan-18\nFeb-18\nMar-18\nApr-18\nMay-18\nJun-18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\n%\nUSUS$ BILLIONS\nAnnual Growth \n \n28 \n \nFigure 8: Broad Money Supply (M3) \n \nSource: RBZ, 2019 \n \nPrivate Sector Credit \n58. \nCredit to the private sector which has remained largely subdued, grew on an \nannual basis by 16.20%, from $3 800.88 million in May 2018 to $4 416.52 \nmillion in May 2019. This growth is, however, not sufficient to propel GDP \non a growth trajectory. \n \nNet Foreign Assets (NFA) \n59. \nThe overall net foreign assets (NFA) position worsened, due to contraction \nof new external loans to support importation of fuel, electricity, drugs and \nother essentials, coupled with the effect of exchange rate depreciation. This \nresulted in the Net International Reserves (NIR) position of the RBZ, at – \nUS$1 748 million in May 2019, exceeding the June 2019 Staff Monitored \nProgram (SMP) target of –US$1 267 million. \n \nINFLATION \n60. \nInflation remains the major challenge facing the economy at the moment. \nAnnual headline inflation accelerated from 56.9% in January 2019 to \n0\n10\n20\n30\n40\n50\n60\n70\n -\n 2\n 4\n 6\n 8\n 10\n 12\n 14\nMay-17\nJun-17\nJul-17\nAug-17\nSep-17\nOct-17\nNov-17\nDec-17\nJan-18\nFeb-18\nMar-18\nApr-18\nMay-18\nJun-18\nJul-18\nAug-18\nSep-18\nOct-18\nNov-18\nDec-18\nJan-19\nFeb-19\nMar-19\nApr-19\nMay-19\n%\nUSUS$ BILLIONS\n \n29 \n \n175.5% in June 2019. The inflation developments mainly reflected exchange \nrate adjustments, following a phased approach to currency reforms, which \nculminated in the simultaneous abolishment of the multicurrency regime and \nre-introduction of the Zimbabwe dollar, on 24 June 2019. Figure 9 shows \nthe recent trends in inflation. \n \nFigure 9: Annual Inflation Profile (%) \n \nSource: Zimstat, 2019 \n \n61. \nThe apparent spike in inflation in June 2019, in particular, reflected \ncontinued speculative pricing tendencies; the factoring in of exchange rate \ndepreciation; implicit benchmarking of prices in US dollars; as well as \ndeliberately high and unfair prices in RTGS, ostensibly aimed at forcing \nconsumers to pay for goods and services in foreign currency. These \nspeculative tendencies were significantly addressed by the abolition of the \nmulticurrency system, and we expect the practices to have subsided by the \nend of July 2019. \n \n62. \nStability in the foreign exchange market, following the introduction of the \nlocal currency and successful fiscal consolidation efforts by Government, \n-20.0\n0.0\n20.0\n40.0\n60.0\n80.0\n100.0\n120.0\n140.0\n160.0\n180.0\n200.0\nApr-16\nJun-16\nAug-16\nOct-16\nDec-16\nFeb-17\nApr-17\nJun-17\nAug-17\nOct-17\nDec-17\nFeb-18\nApr-18\nJun-18\nAug-18\nOct-18\nDec-18\nFeb-19\nApr-19\nJun-19\nAnnual Inflation\nMonthly Inflation\n \n30 \n \nhave laid a strong foundation for a disinflationary trend in the economy. \nFurther, the Bank is now in a position to effectively implement monetary \npolicy to contain inflation. \n \n63. \nDespite the elevated risks to inflation, emanating mainly from adverse \ninflation expectations and some lingering price distortions, which require \nfine tuning, the Bank is fully committed to containing money supply growth, \nto ensure long-term price stability in the economy. \n \n64. \nThough inflation is likely to remain elevated in the near-term and even \nbreach the 200% mark, we expect annual inflation to start declining from \nOctober 2019, and to moderate by the end of the year. \n \n65. \nThe major outstanding challenge in winning the inflation battle, is to ensure \nthat funding for inescapable Government expenditures, such as grain \nimports, fuel and summer cropping working capital requirements, are \ncontained within budget, so as to minimize recourse to potential inflationary \nCentral Bank financing. \n \nFINANCIAL SECTOR DEVELOPMENTS \n66. \nDespite the operational challenges in the macro-economic environment, the \nbanking sector remains safe and sound. \n \n67. \nThe improved financial strength registered by the banking sector is on the \nback of various Government led policies and programmes, as well as \nstrategic measures being implemented by the Reserve Bank of Zimbabwe, \nto bolster public confidence in the sector. \n \n31 \n \n68. \nThe Government’s elevated efforts to clear international debts and re-\nengagement with the international community, is expected to attract fresh \nexternal lines of credit and unlock liquidity for the sector. \n \n69. \nA strong financial system is considered critical to ensure a meaningful \nfinancial intermediary role and spur the much needed economic growth. \n \n70. \nIn light of the above, all financial soundness indicators depicted satisfactory \ncondition and performance of the banking sector as at 31 March 2019, as \nevidenced by adequate capitalisation, expanded asset base, satisfactory asset \nquality and earnings performance. \n \n71. \nSuch resilience has been mainly attributable to financial stability \nenhancements by the Reserve Bank, including operationalisation of the \ncredit reference system, supported by appropriate strategic responses by \nbanking institutions, notably; cost rationalisation, enhanced risk \nmanagement, and technological innovation. \n \nBANKING SECTOR ARCHITECTURE \n72. \n As at 30 June 2019, the number of operating banking institutions were \nnineteen (19), comprising thirteen (13), commercial banks, five (5) building \nsocieties, and one (1) savings bank as shown below. \n \n \n \n \n \n \n \n32 \n \nTable 5 : Architecture of the Banking Sector \nType of Institution \nNumber \nCommercial Banks \n13 \nBuilding Societies \n5 \nSavings Bank \n1 \nTotal Banking Institutions \n19 \nOther Institutions under RBZ Supervision \n \nDevelopment Financial Institutions \n2 \nDeposit-taking Microfinance Institutions \n6 \nCredit-only Microfinance Institutions \n204 \nTotal \n231 \n \nPERFORMANCE OF THE BANKING SECTOR \n73. \nThe banking sector remained generally stable and continued to exhibit \nresilience, buoyed by adequate capitalisation, sustained earnings \nperformance, satisfactory asset quality and improved liquidity position for \nthe period ended 30 June 2019. \n \n74. \nThere is, however heightened exposure to foreign exchange rate risk, which \nhas impacted on the earnings positions of a few institutions. The financial \nsoundness indicators for the period under review are provided in the Table \n6 below. \n \n \n \n \n33 \n \nTable 6: \nFinancial Soundness Indicators \nKey Indicators \nBenchmark June-18 Dec-18 \nMar-19 June-19 \nTotal Assets \n- \n$12.35bn $13.98bn $15.40bn $23.54bn \nTotal Loans & \nAdvances \n- \n$4.08bn \n$4.22bn $4.44bn $6.17bn \nNet Capital Base \n- \n$1.61bn \n$1.83bn $2.09bn $3.31bn \nTotal Deposits \n- \n$9.53bn $10.32bn $11.00bn $16.92bn \nNet Profit \n- \n$176.09m $425.26m $78.05m $929.95m \nReturn on Assets \n- \n1.75% \n4.57% \n1.37% \n5.11% \nReturn on Equity \n- \n11.16% \n20.59% \n4.92% \n20.95% \nCapital Adequacy Ratio \n12% \n26.32% \n30.27% \n30.74% 32.64% \nTier 1 Ratio \n8% \n24.16% \n23.84% \n27.67% 27.24% \nLoans to Deposits \n70% \n43.53% \n40.71% \n40.43% 36.49% \nNon-Performing Loans \nRatio \n5% \n6.22% \n6.92% \n5.58% \n3.95% \nLiquidity Ratio \n30% \n68.45% \n70.66% \n66.82% 64.77% \n \nCapitalisation \n75. \nThe banking sector remained adequately capitalized, with aggregate core \ncapital of $2.33 billion as at 30 June 2019, representing a 47.63% increase \nfrom $1.58 billion as at 31 December 2018. The growth in capital was \nmainly attributed to capitalisation of retained earnings. As at 30 June 2019, \nall banking institutions were compliant with the prescribed minimum capital \nrequirements as shown in Table 7 below. \n \n \n \n34 \n \nTable 7: \nBanking Sector Capitalisation ($ million) \nInstitution \nCore Capital \nas at 31 \nCore Capital as \nat 30 June 2019 \nPrescribed \nMinimum \n CBZ Bank & Society \n168.15 \n268.08 \n25 \n Stanbic Bank \n162.22 \n186.39 \n25 \n First Capital Bank \n107.17 \n174.52 \n25 \n Ecobank \n104.14 \n424.31 \n25 \n FBC Bank \n93.64 \n166.25 \n25 \n ZB Bank & Society \n87.94 \n106.00 \n25 \n BancABC \n86.72 \n73.96 \n25 \n Steward Bank \n86.58 \n82.84 \n25 \n Standard Chartered \n84.84 \n118.76 \n25 \n NMB Bank \n76.72 \n150.85 \n25 \n Agribank \n74.36 \n73.55 \n25 \nNedbank Zimbabwe \n70.01 \n80.68 \n25 \n Metbank \n65.88 \n67.00 \n25 \nBUILDING \n \n \n \nCABS Building \n146.45 \n172.90 \n20 \nFBC Building Society \n47.07 \n47.23 \n20 \nNational Building \n46.03 \n50.63 \n20 \nSAVINGS BANK \n \n \n \nPOSB \n69.33 \n73.25 \n- \nTotal \n1,577.25 \n2,328.56 \n- \n \n76. \nThe average capital adequacy and tier 1 ratios of 32.64% and 27.24% as at \n30 June 2019, respectively, were above the regulatory minima of 12% and \n8%, respectively. All banking institutions complied with the minimum \nregulatory capital adequacy and tier 1 ratios. \n \nBanking Sector Deposits \n77. \nTotal banking sector deposits amounted to $16.92 billion as at 30 June 2019, \nan increase of 63.95% from $10.32 billion as at 31 December 2018. The \nfigure below shows the trend of banking sector deposits over the period 31 \nDecember 2014 to 30 June 2019. \n \n \n35 \n \nFigure 10: Trend of Banking Sector Deposits ($ million) \n \n \n78. \nThe increase in the deposit base during the period under review is mainly \nattributable to the revaluation of foreign currency denominated deposit \nbalances. The deposit base for the banking sector is dominated by demand \ndeposits which accounted for 72.72% ($10.13 billion) of the total non-bank \ndeposits, as shown in the figure below. \n \n Figure 11: Composition of Deposits as at 30 June 2019 \n \n5,056.75\n5,623.00\n5,672.98\n6,137.69\n6,511.83\n6,549.97\n6,992.07\n7,617.29\n8,480.46\n8,236.44\n9,529.00\n10,376.23\n10,320.51\n10,996.51\n16,916.12\n0\n2000\n4000\n6000\n8000\n10000\n12000\n14000\n16000\n18000\n31-Dec-14\n31-Dec-15\n31-Mar-16\n30-Sep-16\n31-Dec-16\n31-Mar-17\n30-Jun-17\n30-Sep-17\n31-Dec-17\n31-Mar-18\n30-Jun-18\n30-Sep-18\n30-Dec-18\n31-Mar-19\n30-Jun-19\nDemand Deposits\n72.72%\nSavings Deposits\n3.96%\nTime Deposits\n9.29%\nFCAs\n12.39%\nNegotiable Certificates of \nDeposits\n1.63%\n \n36 \n \nLoans and Advances \n79. \nTotal banking sector loans and advances increased by 46.21%, from $4.22 \nbillion as at 31 December 2018 to $6.17 billion as at 30 June 2019. The total \nbanking sector loans and advances also include foreign currency \ndenominated loans, whose translation partly explains the growth in total \nloans during the period under review. \n \n80. \nThe level of the banking sector financial intermediation has, however \nremained subdued as reflected by the loans to deposits ratio of 36.49%, \nlargely as a result of cautious lending approach adopted by some banking \ninstitutions. Figure 12 below shows the trend in the total banking sector \nloans and advances. \n \nFigure 12 : Banking Sector Loans (Dec 2014 - June 2019 ZWL$M \n \n \n81. \nLoans to productive sectors of the economy constituted 73.80% of total \nsector loans as at 30 June 2019, as shown in the diagram below. \n \n \n \n4,060.00 \n3,942.94 \n3,999.35 \n3,872.39 \n3,729.77 \n3,649.30 \n3,688.46 \n3,590.91 \n3,733.15 \n3,798.36 \n3,778.95 \n4,078.50 \n4,007.14 \n4,220.12 \n4,444.45 \n -\n 1,000.00\n 2,000.00\n 3,000.00\n 4,000.00\n 5,000.00\n 6,000.00\n 7,000.00\nDec-14\nMar-15\nJun-15\nSep-15\nDec-15\nMar-16\nJun-16\nSep-16\nDec-16\nMar-17\nJun-17\nSep-17\nDec-17\nMar-18\nJun-18\nSep-18\nDec-18\nMar-19\nJun-19\n \n37 \n \nFigure 13 : Sectoral Distribution of loans as at 30 June 2019 \n \n \nLoan Portfolio Quality \n82. \nThe quality of the banking sector loan portfolio continued to improve, \nreflected by the decline in the non-performing loans (NPLs) to total loans, \nfrom 6.92% as at 31 December 2018 to 3.95% as at 30 June 2019. The \nimprovement in the NPLs ratio, was a result of a combination of an increase \nin total banking sector loans and advances coupled with a 30% decrease in \nthe total non-performing loans from $348.83 million as at 31 December \n2018 to $243.78 million as at 30 June 2019. \n \n83. \nFigure 14 below shows the trend in the level of non-performing loans to total \nloans ratio (NPLs ratio) from December 2014 to June 2019. \n \n \n \nCONSUMPTIVE\n17.75%\nOTHER\n8.45%\nAGRICULTURAL\n19.29%\nMANUFACTURING\n8.05%\nCOMMERCIAL\n6.10%\nMINING\n4.21%\nDISTRIBUTION\n11.82%\nCONSTRUCTION\n1.92%\nTRANSPORT\n0.81%\nCOMMUNICATION\n0.30%\nFINANCIAL\n1.77%\nMORTGAGE\n19.54%\nPRODUCTIVE\n[73.80]\n \n38 \n \nFigure 14 : Non-Performing Loans to Total Loans Ratio \n \n \nEarnings Performance \n84. \nDuring the period under review, all banking institutions, except one (1) were \nprofitable in their operations. In comparison to the corresponding period in \n2018, the banking sector recorded a significant increase in aggregate profits, \nfrom $176.09 million for the half-year ended 30 June 2018 to $929.95 \nmillion for the half-year ended 30 June 2019. \n \n85. \nEarnings performance was partly buoyed by foreign exchange translation \ngains for a number of institutions while on the contrary, the loss recorded by \none (1) banking institution emanated from foreign exchange translation \nlosses. The institution is, however, instituting measures to turn around its \nearnings performance. \n \n86. \nNon-interest income comprising income from foreign exchange and fees & \ncommissions were the key revenue driver in the sector during the period \nunder review, as shown in the chart below. \n \n15.91%\n10.82%\n7.87%\n8.39%\n7.95%\n8.63%\n7.08%\n7.06%\n6.22%\n6.69%\n6.92%\n5.58%\n3.95%\n0.00%\n2.00%\n4.00%\n6.00%\n8.00%\n10.00%\n12.00%\n14.00%\n16.00%\n18.00%\nDec-14 Dec-15 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19\nLevel of NPLs Ratio\n \n39 \n \n Figure 15: Income Mix as at 30 June 2019 \n \n \nBanking Sector Liquidity \n87. \nThe average prudential liquidity ratio as at 30 June 2019 was 64.77% \ncompared to 70.66% as at 31 December 2018. As at 30 June 2019, two (2) \nbanking institution were non-compliant with the minimum prudential \nliquidity ratio of 30%. The non-compliant banking institutions are taking \nmeasures to ensure compliance with the minimum prudential liquidity ratio. \nThe figure below shows the trend in the banking sector average prudential \nliquidity ratio from March 2015. \n \n \n \n \n \n \nInterest Income \nfrom Loans \nAdvances and \nLeases\n15.01%\nInterest Income on \nBalances with \nBanking Institutions\n0.96%\nInterest Income On \nInvestments ans \nSecurities\n10.55%\nForeign Exchange\n30.36%\nFees and \nCommission\n21.19%\nOther Non Interest \nIncome\n21.92%\nIncome Mix as at 30 June 2019\n \n40 \n \nFigure 16: Prudential Liquidity Ratio Trend (%) \n \n \n88. \nThe prudential liquidity ratio has remained high reflective of the cautious \napproach to lending with increased investments in securities. \n \nSTATUS OF BANKS UNDER RESOLUTION \n89. \nThe Deposit Protection Corporation (DPC) was appointed Liquidator of six \n(6) failed institutions currently in final liquidation; as well as Provisional \nJudicial Manager (PJM) of one (1) failed institution. \n \n90. \nAs at 30 June 2019, 22,697 out of 54,909 depositors had been compensated \nfrom the Deposit Protection Fund; representing about $3.96 million against \nan exposure of $6.4 million. The table below provides a synopsis of deposit \ninsurance payments in respect of the six (6) failed banking institutions under \nliquidation. \n \n \n \n \n38.62%\n49.63%\n63.79%\n62.37%\n70.66%\n66.82%\n64.77%\n0%\n10%\n20%\n30%\n40%\n50%\n60%\n70%\n80%\nMar-15\nMar-16\nMar-17\nMar-18\nDec-18\nMar-19\nJun-19\nindustry average\nminimum requirement\n \n41 \n \n Table 8: Deposit Insurance Payments as at 30 June 2019 \nName of \nInstitution \nTotal \nDepositor\ns \nNo. of \nDepositor\ns paid \n% of \nDepositors \npaid \nExposure \nDeposits \npayable at \n$500($) \nValue of \nDepositors \npaid ($) \n% of \nTotal \ndeposits \nGross \nDeposits \n$ \nRoyal Bank \n5,453 \n3,111 \n57% \n472,207 \n358,654 \n76% \n5,538,804 \nTrust Bank \n2,958 \n \n1,041 \n35% \n328,516 \n169,877 \n52% \n11,482,102 \nGenesis \n86 \n62 \n72% \n11,810 \n8,821 \n75% \n1,426,913 \nAllied Bank \n9,228 \n1,546 \n17% \n1,248,307 \n540,003 \n43% \n14,316,614 \nInterfin Bank \n13,021 \n \n2,738 \n21% \n918,814 \n325,373 \n35% \n137,336,570 \nAfrasia \n24,163 \n14,199 \n59% \n3,439,276 \n2,562,931 \n74% \n18,559,591 \nTotal \n \n54,909 \n22,697 \n41% \n \n6,418,930.43 \n3,965,659 \n62% \n188,660,594 \nSource – Deposit Protection Corporation \n \n91. \nThe table below summarizes the statuses of the seven (7) failed institutions \nas at 30 June 2019. Total recoveries in cash, treasury bills and properties \nwere $96.4 million, which translate to a 36% recovery rate to date. Total \ndividends paid out to creditors of the six (6) failed institutions under \nliquidation increased by 17% from $28.6 million to $33.4 million over the \nquarter. \nTable 9: Status of Banks under Resolution* as at 30 June 2019 \nInstitution \nTotal \nAssets \nTotal \nLiabilities \nTotal \nRecoveries \nValue Of \nPreferred \nClaims \nPayments \nTo \nPreferred \nCreditors \nDividend \nPaid - \nConcurrent \nCreditors \nDividend To \nSecured \nCreditors \n \nGENESIS \nBANK \n \n$2.2 m \n$5.1 m \n$0.62m \n$170,178 \n$162,456 \n$231,000 \n$207,931 \nROYAL \nBANK \n \n$5.3 m \n$12.6m \n$2.85 m \n$2.11 m \n$938,275 \nNil \n$208,138 \nTRUST BANK \n \n$13 m \n$26.7 m \n$8 m \n$3.54 m \n$1.5 m \n$3.2m \n$834,043 \nINTERFIN \nBANK \n \n$24.3 m \n$144.2 m \n$41.3m \n$2.36 m \n$1.7m \n$8.4m \n$7.28 m \n \nALLIED \nBANK \n \n$9.5 m \n$34.5 m \n$2.7m \n$2.4 m \n$142,497 \nNil \n- \nAFRASIA \nBANK \n \n$39.1 m \n $61 m \n$16m \n$3.9 m \n$3.5m \n$4.8m \n$157,320 \nTETRAD \nPJM lifted \n30.10.18 \n$46 m \n$66 m \n$28.3 m \n- \n- \n-- \n \nTOTALS \n$139.4 m \n$350.1 m \n$96.4 m \n$17.14 m \n$8m \n$16.7m \n$8.68 m \n* All the institutions are under final liquidation except Tetrad whose provisional judicial management \norder was uplifted on 30 October 2018 and returned to its shareholders \n \n42 \n \n \nFINANCIAL STABILITY INITIATIVES \nBasel II/III Implementation \n92. \nAs part of ongoing measures to enhance the stability and resilience of the \nfinancial system, the Reserve Bank is developing local guidance on the \nimplementation of Basel III capital and liquidity framework. The framework \nis designed to improve the quality, consistency and transparency of capital \nand reduce pro-cyclicality, as well as enhance liquidity management. \n \nMacro-prudential policy framework \n93. \nPursuant to my last Monetary Policy Statement, I am pleased to advise that \nthe Reserve Bank has developed a Macro-prudential Framework. The \nFramework, which provides for effective macro-prudential tools, \nappropriate governance arrangements, and systemic risk assessment, will be \noperationalised in due course. \n \nInternational Financial Reporting Standard 9 (IFRS 9) \n94. \nIn a milestone development in financial reporting, all banks published IFRS \n9 Compliant Financial Statements for the year ended 31 December 2018. \nThe forward looking nature of provisioning requirements as well as \nexpanded disclosure requirements significantly enhance bank risk \nmanagement and reinforce market discipline. \n \nENHANCEMENT OF CREDIT INFRASTRUCTURE \nCredit Registry \n95. \nThe credit referencing environment continues to improve against the \nbackground of increased coverage for the Credit Registry and Credit \nBureaus, as well as depth of credit information. As at 30th June 2019 the \nCredit Registry held 1,044,538 records, of which 525,967 were active loan \naccounts. Individual records represented 98.4% of the active loan records. \n \n \n43 \n \n96. \nTotal subscribers as at 30 June 2019 were 174, from 162 as at 30 September \n2018, comprising 18 banking institutions, 152 MFIs (including SMEDCO), \nDepositor Protection Corporation and 3 non-banks. Credit Registry usage \nlevels by subscribing institutions increased steadily to a cumulative 566,298 \nreports as at 30 June 2019. \n \nFigure 17: Cumulative Credit Registry Inquiries: June 2017 – June 2019 \n \n \n97. In a bid to augment efficiency of the Credit Registry, the Reserve Bank \nimplemented value-added products aimed at facilitating in-depth analysis of \ncredit data for risk management and policy making purposes. \n \nCollateral Registry \n98. The Reserve Bank is in the process of establishing a Collateral Registry to \noperationalize the Movable Property Security Interests Act [Chapter 14:35]. \nThe Collateral Registry is expected to promote access to credit by \nmarginalised and financially-excluded groupings. \n \n13,011\n62,043\n116,491\n184,241\n261,801\n353,554\n440,407\n501,387\n566,298\n0\n100,000\n200,000\n300,000\n400,000\n500,000\n600,000\nJun-17\nSep-17\nDec-17\nMar-18\nJun-18\nSep-18\nDec-18\nMar-19\nJun-19\n \n44 \n \n99. The procurement process of suitable software for the Collateral Registry is \nongoing and the system is expected to be acquired and deployed during the \ncourse of 2019. The Collateral Registry Regulations to operationalize the \nMovable Property and Security Interests Act will be finalised in line with \noperational specifications of the deployed collateral registry system. \n \nFINANCIAL TECHNOLOGY (FINTECH) \n100. The world has experienced a proliferation of technology and innovations \nthat have significantly altered the financial landscape and the way financial \ninstitutions offer services and products. This has the potential to promote \neconomic growth and development. \n \n101. Zimbabwe has not been spared from these technological innovations, which \nare significantly altering the financial landscape. The Reserve Bank \nrecognises the important role of fin-tech and innovation and the need to \nharness and leverage on the technology advancements to enable the financial \nservices industry to offer wide range of products and services. \n \n102. Notwithstanding the benefits, the new technological innovations bring to the \nfore additional risks that should be mitigated in a manner that balances \ninnovation and financial stability. This underscores the significance of \nconstantly reflecting on the emerging fin-tech trends and broader changes \naffecting the financial services industry. \n \n103. As a result of the technological developments, there has been a surge in the \nnumber of enquiries and proposals from local and foreign companies \nintending to offer Financial Technology (Fintech) services and products in \nthe country. \n \n \n45 \n \n104. The Reserve Bank has embedded innovation and technology transformation \nin the core of it operations. The Reserve Bank is thus committed to \npromoting a legal and regulatory environment supportive of innovation and \nthe adoption and usage of Fintech by financial institutions while ensuring \nattendant risks are identified and mitigated. \n \n105. Against this background, a National Fintech Steering Committee comprising \ngovernment line ministries, government departments and regulatory \nagencies was constituted to provide strategic policy direction in the Fintech \nspace. \n \n106. In addition, an Interagency Fintech Working Group (IFWG), comprised of \ntechnical staff across government line ministries, government departments \nand regulatory agencies as well as relevant stakeholders was constituted. \nThe IFWG is supported by the following thematic working committees: \na) Legal/Regulatory; \nb) Crypto Assets and Digital Currencies; \nc) Innovation/Technical; and \nd) Consumer Protection. \n \n107. The objective of this collaborative effort is to come up with a National \nFintech Strategy. Notably, there is need to put in place a regulatory \nframework to avoid regulatory arbitrage, create an enabling environment for \nFintech as well as a consistent approach in understanding and regulating \nFintech, build consumer awareness and education and establish institutional \narrangements to ensure a coordinated approach among stakeholders. \n \n \n \n \n46 \n \nOTHER DEVELOPMENTS IN THE BANKING SECTOR \nLion Microfinance Limited \n108. Lion Microfinance Limited was placed under the management of a Curator \nwith effect from 25 July 2019, for a period of three months in terms of the \nMicrofinance Act [Chapter 24:29]. The decision followed a determination \nthat the institution was not in a sound financial condition mainly due to \ncritical undercapitalization and weak corporate governance. The Deposit \nProtection Corporation was appointed curator of Lion Microfinance \nLimited. \nLending rates \n109. The inflationary pressures in the obtaining macroeconomic environment \nhave resulted in negative real returns. Against this background and coupled \nwith the increase in overnight interest rate to 50%, most banking institutions \nhave revised their lending rates upwards to sustain operations. Banking \ninstitutions also took cognisance of the likely negative impact of high \ninterest rates on borrowers’ repayment capacity. \n110. The lending rates reported by banking institutions range from 18% to 35% \nper annum for individual loans and 12% to 25% per annum for productive \nloans including mortgage loans. \n \n111. The Reserve Bank, however, continues to urge banking institutions to ensure \nprovision of affordable banking services and increased access to credit \nthrough maintenance of fair business practices and adherence to responsible \npricing taking into account the application of the know your customer \n(KYC) principles on an on-going basis. \n \n \n \n \n47 \n \nAfrexim Bank Initiative, Africa’s Due Diligence Data, MANSA \nPlatform \n112. During the period under review, the Reserve bank signed a Verifer Charter \nwith Afrexim bank in order to contribute and access data from the MANSA \nplatform. \n \n113. The goal of MANSA platform is to facilitate access to information necessary \nfor conducting Know Your Customer (KYC), Anti – Money Laundering \n(AML) and Counter Terrorism evaluations thereby reducing compliance \ncosts with respect to African trade and project finance transactions thereby \nopening opportunities to access finance from international investors and \npotential business partners. \n \nLegal Developments \nThe Microfinance Bill, 2018 \n114. The Bill is still undergoing the parliamentary process. The Microfinance \nBill, 2018 was published on 21 December 2018. The Bill will amend the \nMicrofinance Act [Chapter 24:30] to achieve the following objectives: \na) to provide for perpetual licences for deposit-taking microfinance \ninstitutions and credit only MFIs, subject to cancellation in the same manner \nas traditional banking institutions; \nb) to reduce confusion and overlapping, the Bill will amend the Microfinance \nAct to recognise only two institutions in the microfinance sector, i.e. credit-\nonly microfinance institutions and deposit-taking microfinance institutions; \nand \nc) to enhance corporate governance and risk management practices within the \nmicrofinance sector. \n \n \n \n48 \n \n \nProposed Amendments to the Banking Regulations \n115. In order to align the Banking Regulations SI 205 of 2000 with the Banking \nAct, proposals for amendment of the Banking Regulations are under \nconsideration of the following aspects: \na) reducing significant interest threshold from 10% to 5% in line with the new \nsection 15B (1) of the Banking Act; \nb) increasing the maximum shareholding that an ordinary company can have \nin a banking institution from 10% to 25% in line with the new threshold in \nsection 15A (1) of the Banking Act. The Banking Act was amended in 2015 \nto increase the threshold from 10% to 25%; \nc) providing for the disclosure of interests form as required under the new \nsection 20B of the Banking Act; and \nd) providing for the maximum amount, which can be lent to an insider without \nboard approval. \n \nPERFORMANCE OF THE MICROFINANCE SECTOR \n116. In line with its role as a pillar of the National Financial Inclusion Strategy \nand a driver of sustainable economic development, the microfinance sector \ncontinued to make significant inroads in empowering the low income and \nmarginalised groups through provision of innovative financial products and \nother non-financial services. \n \n117. As at 31 March 2019, the microfinance sector had a total of 210 \nmicrofinance institutions comprising of 204 credit-only microfinance \ninstitutions and six (6) deposit-taking microfinance institutions. \n \n118. A summary of the key performance indicators for the microfinance sector is \nindicated in the table below. \n \n \n49 \n \nTable 10 : Microfinance Sector, Key Performance Indicators \nIndicator \nMar-18 June-18 \nSep -18 \nDec-18 \nMar-19 \nNumber of Licensed Institutions \n \n190 196 \n200 \n205 \n210 \nTotal Loans ($m) \n272.95 \n297.52 \n351.39 \n387.87 \n443.12 \nTotal Assets ($m) \n360.46 \n412.29 \n463.56 \n490.22 \n533.05 \nTotal Equity ($m) \n142.94 \n138.15 \n187.87 \n197.85 \n200.38 \nNet Profit ($m) \n9.08 \n13.67 \n9.98 \n16.62 \n4.98 \nAverage Operational Self-\nSufficiency (OSS) \n142.92% 154.76% 114.45% 153.11% \n142.29% \nTotal Deposits (DTMFIs) ($m) \n11.84 \n15.35 \n21.00 \n23.85 \n25.65 \nNumber of Savings Accounts \n(DTMFIs) \n8,668 \n10,196 \n24,386 \n68,258 \n73,258 \nPortfolio at Risk* (PaR>30 days) \n9.55% \n10.15% \n15.51% \n10.51% \n8.02% \nNumber of Active Loan Clients \n282,024 276,660 288,858 \n349,341 \n402,295 \nNumber of Female Borrowers \n107,226 107,566 153,980 \n161,023 \n160,074 \nNumber of Outstanding Loans \n296,544 297,843 323,129 \n393,219 \n440,032 \nNumber of Branches \n676 \n660 \n781 \n750 \n807 \n* Portfolio at Risk [30] days-The value of all loans outstanding that have one or more instalments of \nprincipal past due more than [30] days. This includes the entire unpaid principal balance, including \nboth the past due and future instalments, but not accrued interest. It also includes loans that have been \nrestructured or rescheduled. \n \nMicrofinance Outreach \n119. The microfinance sector registered a 15.16% increase in the number of \nactive clients over the quarter from 349,341 as 31 December 2018, to \n402,295 as at 31 March 2019, with women borrowers accounting for 39.79% \nof the total number of active clients. Women borrower’s accessed 25.17% \n \n50 \n \n($111.54 million) of the total microfinance sector loans of $443.12 million \nas at 31 March 2019. \n \nCapital and Funding \n120. Funding continues to be the major challenge militating against increased \noutreach and development of sustainable financial institutions for the low \nincome and the marginalised, as the majority of microfinance institutions \nlack anchor institutional investors. The sector registered a marginal increase \nin aggregate equity over the review period from $197.85 million as at 31 \nDecember 2018, to $200,30 million as at 31 March 2019. \n \n121. The Reserve Bank continues to encourage consolidation in the sector and \nattraction of institutional anchor investors in order to come up with \nstronger, well-funded microfinance institutions that are able to contribute \nmore meaningfully to the national development agenda. \n \n122. The deposit-taking microfinance institutions (DTMFI) subsector registered \nan improvement in capitalisation over the review period from $60.10 million \nas at 31 December 2018, to $70.23 million as at 31 March 2019. The \nimprovement was largely attributed to capitalisation of retained earnings by \nsome of the DTMFIs. \n \nMicrofinance Sector Lending and Portfolio Quality \n123. Total loans outstanding for the microfinance sector amounted to $443.12 \nmillion as at 31 March 2019, up from $387.87 million as at 31 December \n2018. Growth in the sector loans is hampered by limited funding within the \nindividual microfinance institutions, which have been relying on owners’ \nfunds which are grossly inadequate to meet the demand for loans. \n \n \n51 \n \n124. The sector registered an improvement in the portfolio quality as reflected by \nthe portfolio at risk (PaR >30 days) ratio of 8.02% as at 31 March 2019, \ndown from 10.51% as at 31 December 2018. \n \n125. The trend in the microfinance sector loan portfolio growth and quality is \nindicated in the figure below. \n \nFigure 18: Microfinance Sector Trends in Total Loans & PaR Ratio \n \n \n126. The Reserve Bank continues to encourage microfinance institutions to \nadopt proper lending methodologies, based on transparency, thorough \nclient assessment, and financial education in order to maintain a strong \nportfolio quality. \n \nSector Profitability \n127. The microfinance sector registered a decline in profitability, with aggregate \nnet profit of $4.98 million for period ended 31 March 2019 which represents \n$164.20 $156.99\n$187.16\n$206.28\n$254.04\n$272.95\n$297.52 $351.39\n$387.87\n$443.12\n16.03%\n11.28%\n10.72%\n8.34%\n7.34%\n9.55%\n10.15%\n15.51%\n10.51%\n8.02%\n0.00%\n2.00%\n4.00%\n6.00%\n8.00%\n10.00%\n12.00%\n14.00%\n16.00%\n18.00%\n$0.00\n$50.00\n$100.00\n$150.00\n$200.00\n$250.00\n$300.00\n$350.00\n$400.00\n$450.00\n$500.00\n2013\n2014\n2015\n2016\n2017\nMar-18\nJun-18\nSep-18\nDec-18\nMar-19\nTotal Loans ($M)\nBenchmark PaR (5%)\nPaR (%)\n \n52 \n \na 54.85% decline over the year from $9.08 million for period ended 31 \nMarch 2018. \n \n128. The trend in the profitability of the microfinance sector is indicated in the \nfigure below. \n \nFigure 19: Microfinance industry- Trends in Profitability, 2014 - 2019 \n \n \n129. In view of the challenging operating environment, microfinance \ninstitutions are urged to re-align their business models to bolster \nprofitability. \n \n130. The microfinance sector remains operationally self-sustainable as reflected \nby the operational self-sufficiency ratio of 142.29% for period ended 31 \nMarch 2019. Sustainability is a cornerstone of sound microfinance as \nfinancially sustainable microfinance institutions become a permanent part of \nthe financial system which can continue to provide financial services to the \n$24,840,000\n$22,040,000\n$19,310,000\n$21,640,000\n$9,070,000\n$13,980,000\n$9,980,000\n$16,620,000\n$4,980,000\n12.25%\n11.87%\n9.70%\n2.83%\n2.63%\n5.48%\n5.25%\n5.85%\n1.40%\n34.26% 32.33%\n13.89%\n3.68%\n3.96%\n8.10%\n12.32%\n12.80%\n2.06%\n$0\n$5,000,000\n$10,000,000\n$15,000,000\n$20,000,000\n$25,000,000\n$30,000,000\n0.00%\n5.00%\n10.00%\n15.00%\n20.00%\n25.00%\n30.00%\n35.00%\n40.00%\nDec-I4\nDec-I5\nDec-16\nDec-17\nMar-18\nJun-18\nSep-18\nDec-18\nMar-19\nNet Profit ($)\nROA\nROE\n \n53 \n \nlow income and marginalised groups on a sustainable basis, beyond grants \nor soft loans. \nFINANCIAL INCLUSION \nNFIS Monitoring and Evaluation \n131. Satisfactory progress has been made in the implementation of the National \nFinancial Inclusion Strategy (NFIS). The notable areas include product \ndiversification, innovation and human centred design of financial services \nand delivery channels, financial literacy, consumer protection, opening of \nlow cost bank accounts, micro-insurance, MSMEs product offering, and \nincreased participation of lower income groups on the capital markets. The \nabove progress is reflected in the financial inclusion indicators in the table \nbelow: \nTable 11: Financial Inclusion Indicators - Dec 2016 - March 2019 \nIndicator \nDec 2017 \nMarch \n2018 \nJune 2018 \nSept 2018 Dec 2018 \nMarch 2019 \nValue \nof \nloans \nto \nMSMEs \n$146.22 m \n$123.10m $168.25m \n$131.83m \n$169.96m \n$142.38m \n% of loans to MSMEs \nover total loans \n3.75% \n3.19% \n3.57% \n3.84% \n3.94% \n3.29% \nNumber of MSMEs \nwith bank accounts \n76,524 \n57,512 \n81,369 \n97,527 \n100,644 \n99,489 \nNumber of Women \nwith Bank Accounts \n935,994 \n 99,48\n9 \n1,612,820 \n1,528,704 \n1,736,285 \n1,814,875 \nValue of Loans to \nWomen \n$310.78m \n \n$316.27m \n$360.68m \n$384.55m \n$432.36m \n$428.78m \nNumber of Loans to \nYouth \n61,529 \n59,308 \n68,756 \n74,165 \n69,421 \n176,487 \nValue of Loans to \nYouth \n$138.93 m \n$111.70m \n$126.64m \n$146.79m \n$104.43m \n$282.18m \nTotal number of Bank \nAccounts \n3.07m \n5.51m \n5.58m \n5.81m \n5.94m \n6.25m \nNumber of Low Cost \nAccounts \n3.02m \n3.16m \n3.56m \n3.31m \n3.88m \n4.33m \n \n54 \n \n \nEmpowerment Facilities \n132. Targeted beneficiaries of financial inclusion initiatives are continuing to \naccess the Revolving Empowerment as part of the implementation of the \nNational Financial Inclusion Strategy. As at 1 August 2019, cumulative \ndisbursements of $462.97 million had been made, representing 92.39% of \nthe total funds amounting to $501.1 million. \n \n133. In addition, the MSMEs guarantee scheme being provided through the \nExport Credit Guarantee Company (ECGC) is contributing to enhanced \nMSME uptake of financial services. As at 31 March 2019, a total of nine (9) \nbanking institutions, four (4) Deposit Taking MFIs and 10 credit only MFIs \nhad accessed credit guarantees through ECGC amounting to $7.54 million. \n \nConsumer Education \n134. The Reserve Bank of Zimbabwe, in collaboration with various stakeholders, \ncontinue to implement initiatives to enhance financial education and \nconsumer protection, including the following: \na) 2019 Global Money Week Celebrations were held from 25-29 March \n2019 under the theme “Learn, Save, Earn”; and \nb) Issuance of consumer education material by the Reserve Bank to \npromote responsible access to financial services and expected positive \nimpact of financial inclusion on the lives of beneficiaries. \n \n \n \n \n \n \n55 \n \n SUSTAINABLE FINANCING \n135. Notable progress has been recorded in the area of sustainable financing. \nEight (8) institutions have confirmed their participation under the \nSustainability Standards and Certification Initiative (SSCI) being \nimplemented by the European Organisation for Sustainable Development \n(EOSD) and have since paid their application fees. \n \n136. The Reserve Bank of Zimbabwe held high level meetings with each of the \nparticipating institutions and it is encouraging to note that quite a number of \ninstitutions have already embraced green financing the following are some \nof the interesting insights: \n \na) Some institutions are already working towards accessing the Green \nClimate Fund are currently undergoing the accreditation process. \nb) Some have started evaluating potential projects for funding and these \ninclude renewable energy projects (e.g. solar projects for Universities and \nschools). The projects are currently few and generally limited to mining \nand energy segments. \nc) Some institutions are incorporating greening concepts in their projects (e.g. \nBuilding societies are considering installing solar power and water heating \nsystems at their projects). \nd) Some have started the process of reviewing policies and procedures to \nreflect the new thrust (e.g. reducing level of support to products that have \na negative effect on health to promoting other industries such as citrus and \nmacadamia nuts, considered to have high nutritional value) while a few \nbanks have embedded sustainability in their credit policies. \ne) A few banks have introduced the use of data collection tools with key \nenvironmental indictors. \n \n56 \n \nf) A few institutions have adopted sustainability reporting in their Annual \nFinancial Statements. Sustainable financing is key to Integrated Reporting. \n \n137. The institutions are now working on defining their High Impact Goals, \nwhich should be linked to the country’s developmental aspirations and \nshould also subscribe to the Triple Bottom Line concept – People, Planet \nand Profit. \n \n138. The Reserve Bank of Zimbabwe and the European Organisation for \nSustainable Development (EOSD) have since signed a Memorandum of \nUnderstanding, which provides a framework for effective cooperation and \ncoordination between the two (2) institutions in the implementation of the \nSustainability Standards and Certification Initiative (SSCI) for financial \ninstitutions in Zimbabwe. \n \nNATIONAL PAYMENT SYSTEMS OVERVIEW \n139. The national payment services sector remained safe and sound. It recorded \nsignificant improvements in key performance indicators, on the back of a \nnumber of measures instituted by the Bank. These included oversight, \nresearch, licensing and operational activities which continued to foster \nconvenience, development and safety of transacting to the members of the \npublic. \n \n140. In terms of operational reliability, the payment system in country achieved \nan average uptime of over 95% during the period under review. The Bank \ncontinued to maintain a strong focus on ensuring the resilience of the \npayment system infrastructure against cyber threats. \n \n \n \n57 \n \nOversight Activities \n141. In order to ensure that appropriate risk management and consumer \nprotection measures are implemented, the Bank continued to conduct off and \non-site reviews on the payment services providers to ensure compliance. \nGenerally, the control measures implemented by these payment services \nproviders were found to be satisfactory. Improvement measures were \nidentified for some payment services providers to further strengthen their \nrisk management and operational arrangements. \n \n142. Given the policy thrust to promote electronic means of payment and \ncognizant of the vulnerabilities that come with it, a cocktail of risk \nmanagement measures was instituted to ensure effective consumer \nprotection, safety and system efficiency on an ongoing basis. The measures \ninstituted included the enforcement of best practices, cybersecurity, \ncustomer security programs, Euro MasterCard and Visa (EMV) among \nothers. \n \nInteroperability \n143. While desirous of encouraging competition and innovation in payment \nservices which will benefit users and promote greater financial inclusion, \nthe Bank is mindful of the costs associated with a highly fragmented retail \npayment market arising from non-interoperable systems. In this regard, the \nregulatory framework in place require the ‘existing and new payment \nsystems operators to embrace infrastructure sharing and interoperability. \n \nPaynet Zimbabwe \n144. Following disagreement on demands for payment in foreign currency on \nlocal services provided by Paynet Zimbabwe, banks were subsequently \nsuspended from the system. Notwithstanding the suspension, banks continue \n \n58 \n \nusing other payment services such as RTGS, internet, card (POS) and mobile \nmoney payments to serve the transacting public. In addition, banks have also \ndevised mechanisms to allow for exchange of electronic payment files. \n \n145. In line with continued innovation and to further enhance efficiency, banks \nare working on a fully fledged bulk payments local solution which is \nexpected to go live end of July 2019. \n \nPayment Systems Statistics \n146. During the period January to May 2019, the electronic means of payment \ntransactional activities amounted to RTGS$ 87 billion, from 1(one) billion \ntransactions as shown in Table 12 below. Notably, financial transactions \nmade via the mobile channel continued to gain traction during the period \nJanuary to May 2019, leveraging on the high mobile phone penetration \namong the Zimbabwean population. \n \nTable 12: Payment Streams Transactional Activities from January to June \n2019 \nPAYMENT STREAMS \nTOTAL FOR JAN-JUNE 2019 \nPROPORTION \nOF TOTAL \nVALUES \nRTGS \n50,113,186,253.19 \n57.68% \nCHEQUE \n18,153,190.14 \n0.02% \nPOS \n7,011,707,119.88 \n8.07% \nATMS \n78,201,111.49 \n0.09% \nMOBILE \n22,925,869,324.11 \n26.39% \nINTERNET \n6,728,741,109.57 \n7.75% \nTOTAL VALUE \n86,875,858,108.37 \n100.00% \nVOLUMES \nRTGS \n2,561,563 \n0.25% \nCHEQUE \n72,281 \n0.01% \nPOS \n146,477,651 \n14.10% \n \n59 \n \nATMs \n998,482 \n0.10% \nMOBILE \n886,272,588 \n85.33% \nINTERNET \n2,256,967 \n0.22% \nTOTAL VOLUME \n1,038,639,532 \n100.00% \nSource: RBZ, 2019 \n \n147. The aggregate monthly value of digital payment transactions increased by \nan average of 18% to during the first five months of 2019, whilst the \ncorresponding volumes exponentially increased by a monthly average of \n23%. \n \n \nReserve Bank of Zimbabwe \n13 September 2019", "source": "RBZ", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///RBZ/Monetary_Policy_Statements/MPS-September-2019-Zim.pdf"}
{"doc_id": "5babf4e261cbc94b7484f4f75c541c6d", "text": "MID-TERM MONETARY POLICY STATEMENT\nFOSTERING PRICE STABILITY \n21 AUGUST 2020\n \n \n \nR\nE\nS\nE\nR\nV\nE\n \nB\nA\nN\nK\n \nO\nF\n \nZ\nI\nM\nB\nA\nB\nW\nE\n2 \nTABLE OF CONTENTS \n \n \nTABLE OF FIGURES...................................................................................................................................... 3 \nList of Tables ............................................................................................................................................... 4 \nSECTION 1: INTRODUCTION ....................................................................................................................... 5 \nSECTION 2: RECENT MONETARY POLICY MEASURES ................................................................................. 8 \nIntroducƟon of the Foreign Exchange AucƟon System .......................................................................... 8 \nMeasures to Support the AucƟon System ........................................................................................... 10 \nBank Policy Rate ................................................................................................................................... 10 \nOpen Market OperaƟons Instruments ................................................................................................. 10 \nProducƟve Sector Facility ..................................................................................................................... 11 \nReserve Requirements ......................................................................................................................... 11 \nMonetary TargeƟng Framework .......................................................................................................... 11 \nAddressing Cash Challenges ................................................................................................................. 11 \nSECTION 3: NEW MONETARY POLICY MEASURES .................................................................................... 13 \nSupporƟng the AucƟon from DomesƟc Forex Resources .................................................................... 14 \nSECTION 4: OUTLOOK AND CONCLUSION ................................................................................................ 23 \nConclusion ............................................................................................................................................ 24 \nANNEXURE:\n MACROECONOMIC AND FINANCIAL DEVELOPMENTS .................................................... 26 \nGlobal Developments ............................................................................................................................... 26 \nDomesƟc Developments .......................................................................................................................... 27 \nForeign Currency Receipts and Payments ................................................................................................ 28 \nForeign Currency Payments ..................................................................................................................... 29 \nBalance of Payments Developments and Outlook ................................................................................... 30 \nNATIONAL PAYMENT SYSTEMS DEVELOPMENTS .................................................................................... 56 \n \n3 \n \nTABLE OF FIGURES \nFigure 1: Exchange Rate Convergence Under the Auction System .............................. 8 \nFigure 2: Inflation Development and Outlook ..................................................................... 20 \nFigure 3: Month-on-month Inflation ........................................................................................ 24 \nFigure 5: Composition of Money Supply ............................................................................... 30 \nFigure 7: Trend of Banking Sector Deposits (ZW$ billions) ......................................... 35 \nFigure 8: Composition of Deposits as at 30 June 2020 .................................................... 36 \nFigure 9: Prudential Liquidity Ratio Trend (%) .................................................................. 37 \nFigure 10: Composition of the Banking Sector Assets as at 30 June 2020 .............. 38 \nFigure 11: Trend in Banking Sector Loans & Advances ($m) ...................................... 39 \nFigure 12: Sectoral Distribution of loans as at 30 June 2020 ......................................... 39 \nFigure 13: Trend in NPL Ratio ................................................................................................... 40 \nFigure 14: Income Mix – 30 June 2020 .................................................................................. 41 \nFigure 15: DTMFIs Performance Indicators, Dec 2018 – June 2020 ....................... 43 \nFigure 16: Quarterly Credit Registry Inquiries by Banks and ....................................... 53 \n \n4 \n \nList of Tables \nTable 1:Foreign Currency Retention Thresholds ................................................................ 14 \nTable 2: Minimum Capital Requirements .............................................................................. 16 \nTable 3: World Economic Growth (%) ................................................................................... 22 \nTable 4: Total Foreign Currency Receipts (USD millions) ............................................ 25 \nTable 5: Foreign Payments by Sector in USD (01 Jan – 30 June 2020) .................... 26 \nTable 6: Monthly Inward Diaspora Remittances (USD) .................................................. 27 \nTable 7: Reserve Money Developments (ZW$ Millions) ................................................ 28 \nTable 8: Architecture of the Banking Sector ......................................................................... 32 \nTable 9: Financial Soundness Indicators ............................................................................... 33 \nTable 10: Financial Inclusion Indicators – December 2016 to June 2020 .............. 52 \nTable 11: NPS Transactional Values July 2019 –June 2020 .......................................... 55 \nTable 12: NPS Transactional Volumes (in millions) July 2019 –June 2020 ........... 56 \n \n \n \n5 \n \nSECTION 1: INTRODUCTION \n \n1. \nThis Monetary Policy Statement outlines the monetary policy stance being \npursued by the Bank in the second half of 2020. The Statement also reviews \nthe monetary policy measures implemented in the first half of the year, with \nparticular focus on measures to contain the impact of the COVID-19 pandemic \non price and exchange rate stability. In addition, the Statement outlines the \ncurrent global and domestic economic developments and implications on the \neconomic outlook. \n \n2. \nThe national economy, like the rest of economies across the globe, is \nexperiencing economic and social turbulence induced by the outbreak of the \nCOVID-19 pandemic. The prolonged COVID-19 induced disruptions to \nglobal production and trade have been more than initially anticipated and have \nworsened the global economic outlook, with adverse effects on domestic \neconomic performance. Consequently, the global economy which was \ninitially anticipated to decline by 3.9% in 2020 is now expected to decline by \n4.9%. These developments have seen central banks across the globe easing \nmonetary policies as well as taking deliberate measures to balance financial \nstability while supporting economic recovery. \n \n3. \nThe domestic economic decline was further exacerbated by negative \nperceptions that continued to prevail during the first half of the year. \nResultantly, business entities resorted to the practice of forward pricing to \nhedge against exchange rate volatility, notwithstanding improving economic \nfundamentals as reflected in healthy fiscal and balance of payments positions. \n \n6 \n4. \nIt is against the above context that the Bank’s monetary policy stance has been \nreinvigorated to foster price and exchange rate stability through the \nintroduction of a transparent foreign exchange auction system on 23 June 2020 \nand strict adherence to the monetary targeting framework. \n \n5. \nThe introduction of the Dutch foreign exchange auction system has so far \nachieved its key objective of price stability and has greatly assisted in creating \ntransparency in the management of foreign exchange and in price discovery \nof the market exchange rate. This has restrained the speculative pass-through \neffects of the exchange rate on the pricing of goods and services in the \neconomy. Sustaining the auction system is therefore crucial in fostering price \nstability in the economy. \n \n6. \nWhilst the Bank is encouraged by the fact that some business entities have \nrealigned their pricing models to the auction determined exchange rate, other \nentities are not complying and charging for goods and services at rates higher \nthan the auction rate despite accessing foreign exchange from the auction. \nSuch practice of forward pricing of the exchange rate goes against the positive \noutlook on the exchange rate that is showing consistent signs of convergence \nas evidenced by the continued narrowing of the bands between the highest and \nlowest foreign currency bids and the reduction in the parallel exchange rate \npremium to below 15%. \n \n7. \nThe resultant stability and predictability in the exchange rate is envisaged to \nhelp stabilise prices of goods and services. Consequently, annual blended \ninflation that stood at 485.27% is projected to taper-off over the remaining \npart of the year as inflationary pressures continue to ease. The supportive \nmeasures put in place by the Bank to sustain the auction, including strict \nadherence to the monetary targeting framework, suspension of mobile money \n7 \nagents for bulk transactions and improved monitoring of electronic \ntransactions have also started to bear fruit as evidenced by the muted activity \non the foreign exchange parallel market. \n \n8. \nThe stability and predictability of the exchange rate have been supported by \nthe buoyant external sector, which continues to exhibit resilience as evidenced \nby a stable trend in performance of exports and international remittances, \nnotwithstanding the adverse impact of COVID-19. The country recorded a \npositive foreign currency net position of US$1.3 billion for the six months \nending 30 June 2020, compared to a deficit of US$738.7 million for the same \nperiod in 2019. Sustained export performance is critical for the steady supply \nof foreign currency needed to sustain the economy. \n \n9. \nThe financial sector has also continued to exhibit resilience as evidenced by \nstrong banking sector balance sheets and minimum systemic risks. In addition, \nall banking institutions are compliant with the prescribed minimum capital \nrequirements. \n \n10. This Statement, therefore, lays out additional measures to support price and \nexchange rate stability in the economy. The rest of the Monetary Policy \nStatement is organised as follows: Section 2 evaluates the recent monetary \npolicy measures, including decisions and policies made by the Bank’s MPC \nand Section 3 outlines the additional measures to buttress and sustain the \nauction system as well as supporting economic recovery. Section 4 discusses \nthe outlook and conclusions from the Statement. Finally, the Statement \ncontains an annexure discussing international and domestic macroeconomic \nand financial developments underpinning monetary policy decisions. \n \n \n8 \nSECTION 2: RECENT MONETARY POLICY MEASURES \n \n11. Since the last Monetary Policy Statement issued in February 2020, the Bank, \nthrough the Monetary Policy Committee (MPC), implemented a number of \nmeasures aimed at ensuring exchange rate, price and financial stability in the \neconomy, while supporting real economic activity. In particular, the Bank \nimplemented the following key policies: \n \nIntroduction of the Foreign Exchange Auction System \n12. In response to the volatility in the pricing of goods and services due to the \nrising parallel exchange rate premium, the Bank replaced the fixed exchange \nrate system, which had the domestic currency pegged at ZW$25 per US \ndollar, with a foreign exchange auction system. \n \n13. Since its introduction on 23 June 2020, a total of US$137.4 million has been \nallotted against bids for US$157.8 million at the end of 9th auction on 18 \nAugust 2020. Effectively the auction system has to date served 87.1% of the \nformal foreign exchange market demand. Total foreign currency allotments \nhave ranged between US$10.3 million and US$18.8 million per auction. \n \n14. The foreign exchange auction system has greatly assisted in improving \ntransparency in the foreign currency market and has facilitated the discovery \nof a market-based exchange rate. In addition, the system has been critical in \nfostering exchange rate and price convergence over time. The dispersion \nbetween the highest and lowest bid rates on the auction system has been \nconverging towards the weighted average exchange rate, while the parallel \nmarket premium has remained suppressed. The dispersion between the highest \nand lowest bid rates, which was around 75 points at the beginning of the \nauction had fallen to about 8 points after the ninth auction. \n9 \n \nFigure 1: Exchange Rate Convergence Under the Auction System \n \n \n \n \n17. The same is true for the parallel market exchange rate that fell from the range \nof ZW$95 to Z$W120 : US$ at the commencement of the auction system to \nthe current range of ZW$85 to ZW$110 : US$ as shown in Figure 1 above. \nThe parallel exchange rate premiums have thus plummeted from about 300% \nbefore the introduction of the auction system to the international known levels \nof between 5 to 15% as of the second week of August 2020. \n \n18. The re-direction of the foreign currency demand pressure from the parallel \nmarket to the auction, coupled with improved foreign currency supply and the \nBank’s contractionary monetary growth stance, will assist in fostering price \nstability. The subsequent introduction of the auction system for SMEs, running \nconcurrently with the main auction, will further support current efforts to \nimprove the management of foreign exchange in the economy. \n \n0.\n25.\n50.\n75.\n100.\n125.\n23 Jun 20\n30 Jun 20\n07 Jul 20\n14 Jul 20\n21 Jul 20\n28 Jul 20\n04 Aug 20\n13 Aug 20\n18 Aug 20\nExchange Rate (USD:ZWL)\nLow Bid Rate\nHigh Bid Rate\nWeighted Rate\n10 \nMeasures to Support the Auction System \n19. The Bank has also put in place the following supply side measures to support \nthe auction: \na. Allowing direct participation of exporters on the auction at their preferred \nreserve prices; \nb. Engagement of banks to participate on the auction; \nc. Upward reviewing of the foreign exchange retention for gold producers to \n70% for them to enhance production; \nd. Arranging foreign lines of credit on behalf of Government to supplement \ndomestic-generated foreign exchange, and \ne. Liberalisation of the use of free funds. \n \n20. The above measures have continued to see a steady flow of funds to support \nthe auction. \n \nBank Policy Rate \n21. In order to curb speculative borrowing and manage foreign exchange \npressures, the Bank reviewed the Bank Policy rate upwards from 15% to 35%. \nThis was to reduce excess liquidity on the market which could be channelled \ntowards purchasing of foreign currency thus putting pressure on the exchange \nrate. \n \nOpen Market Operations Instruments \n22. The Bank introduced an exchange rate linked Open Market Operations \n(OMO) instrument settled in local currency, to allow those with excess \nliquidity to preserve value without destabilising the exchange rate. The \ninstrument, over and above compensating for exchange rate losses, also \ncarries an interest rate of 5% per annum. This instrument which shall also be \nlisted on the Zimbabwe Stock Exchange is expected to mop up the excess \n11 \nliquidity and ease the exchange rate pressures in the economy. In the same \nvein, the Bank has encouraged banking institutions to come up with similar \nvalue preserving instruments for their customers. \n \nProductive Sector Facility \n24. The Bank continued to support the productive sectors through its Medium-\nterm Lending Facility to support banks with productive sector funding \nrequirements. A total of ZW$2.6 billion had been disbursed to banks as at \n30th June 2020. Whilst this Facility is necessary to enhance productivity, it \nneeds to be continuously reviewed to manage the risk of increasing reserve \nmoney in the economy. \n \nReserve Requirements \n25. The Bank reviewed the reserve requirements from 5% to 2.5% to enable banks \nto increase credit to the productive sectors of the economy. \n \nMonetary Targeting Framework \n26. The Bank remained committed to the monetary targeting framework as a way \nof containing money supply growth to curb inflationary pressures in the \neconomy. The Bank, through the MPC, has been aggressive in containing \nreserve money growth below the target growth of 50% by year end. The Bank \nhas also been transparently publishing reserve money statistics as part of its \nforward guidance and communication strategy. \n \nAddressing Cash Challenges \n27. In response to the increasing demand for cash by the transacting public, the \nBank introduced higher denominations of ZW$10 and ZW$20 in the banking \nsystem. In addition, the cash withdrawal limits were reviewed upwards from \n12 \nZW$300 to ZW$1000 per week to provide transactional convenience to the \npublic. \n \n28. The Bank implemented various regulatory and supervisory measures to \nmaintain financial stability. These measures were aimed at ensuring that \nbanking institutions continue to support the real economy, as well as \nminimising the adverse impact of the COVID-19 pandemic on the sector. \n \n29. The banking sector has also implemented various strategies to cushion its \ncustomers and maintain stability and these include moratoria on repayment of \nloans and a freeze or reduction of service fees. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13 \nSECTION 3: NEW MONETARY POLICY MEASURES \n \nA. SUSTENANCE OF THE FOREIGN EXCHANGE AUCTION \n30. The foreign exchange auction system has managed to minimise the volatility \nin the exchange rate which was the principal driver of price instability in the \neconomy. Accordingly, the auction or market exchange rate has continued to \nbe below the parallel exchange rates of between ZW$95 -120 : US$ that the \nmarket was using before the introduction of the auction system on 23 June \n2020. This positive development on the exchange rate has thus significantly \nstabilised prices in the national economy and should be sustained. \n \n31. In order to continue fostering price stability through increasing availability of \nforeign currency on the auction, the Bank is putting in place the following \nmeasures that take account of the fact that participation on the auction is open \nto all entities irrespective of whether or not they are exporters and, as such, \nany shortfalls to meet entities’ foreign exchange requirements will be met \nthrough the auction: \n \nStandardisation of Export Retention \n32. Given the positive impact of the auction system in price stability and the need \nto sustain the auction, all export retention thresholds for all exporters will be \nat a standard level of 70% with immediate effect. \n \n33. In addition to this equity principle on export retention thresholds, the 30 day \nliquidation period of unused funds has been reviewed upwards to 60 days \nfrom the day of receipt of funds. This is essential to enable exporters to better \nmanage and plan their cashflows. \n \n14 \nSupporting the Auction from Domestic Forex Resources \n34. Following the decision to allow the use of free funds in the pricing of goods \nand services in the economy, the Bank is encouraged by the growth of the \nforeign exchange balances in the domestic foreign currency accounts, from \nUS$352.4 million in January 2020 to US$404.8 million as at end of July 2020. \n \n35. In order to ensure that some of the domestic-generated foreign currency is \nutilised to sustain the auction, with immediate effect and going forward, 20% \nof the foreign currency receipts of providers of goods and services shall be \nliquidated at the point of depositing in the Domestic FCAs. \n \n36. For the avoidance of doubt, all existing balances in the Domestic FCAs will \nnot be affected by this policy. \n \n37. This policy measure shall also not apply to recipients of free funds including \nindividuals, embassies, non-governmental organisations, tobacco and cotton \nproducers and Domestic FCAs for fuel companies. \n \nForeign Currency Trading by Bureaux de Change \n38. The Bank is further liberalising the activities of bureaux de change to enable \nthem to enhance their business by increasing the exchange rate spread from \nthe current 3.5% to up to 5.0% above the auction rate. The bureaux de change \nwill be required to sell at the auction at their reserve price, 80% of their \nbalances held every Monday. \n \n Compliance with Auction Rates \n39. The Bank has noted with concern malpractices by certain business entities \nthat are charging for goods and services at rates way above the rate obtaining \n15 \non the auction to the detriment of the consumers. Such malpractices are \ncounter-productive and negate the objective of price stability. \n \n40. In order to curb such delinquent behaviour and to enforce compliance, the \nBank is proceeding to establish a toll free line through which the \npublic/consumers will report to the Bank such malpractices and other foreign \ncurrency related transgressions. \n \nB. BANK POLICY RATE \n41. In line with the MPC resolutions of 13 August 2020, the Bank Policy Rate for \novernight accommodation shall remain at 35% per annum, whilst the rate for \nthe Medium-term Lending Facility shall be 25% per annum with immediate \neffect. \n \nC. BANKING INSTITUTIONS CAPITALISATION PLANS \n42. Cognisant of the prevailing challenging environment exacerbated by the \nnegative impact of the COVID-19 pandemic, the Bank is extending the \ndeadline for compliance with the requirement for meeting the minimum \ncapital levels, as indicated in Table 2 below, by one year from 31 December \n2020 to 31 December 2021. In this regard, banking institutions are required \nto submit to the Bank updates of capitalisation plans by 31 December 2020 \nand 30 June 2021. \n \n \n \n \n \n \n \n16 \nTable 2: Minimum Capital Requirements \nType of Institution \nMinimum Capital Requirements in ZW$ \nEquivalent to :- \nTIER 1 - Large Indigenous Commercial Banks & all \nForeign Banks \nUSD30 million \nTIER II - Commercial Banks, Merchant Banks, Building \nSocieties, Development Banks, Finance & Discount \nHouses \nUSD20 million \nTIER III - Deposit-Taking Microfinance Banks \nUSD5 million \nCredit Only Microfinance Institutions \nUSD25,000 \n \n \n43. Banking institutions are also required to continue to assess the adequacy of \ntheir economic capital levels against their risk profiles. Particular attention \nshould be given to credit risk, operational risk and business risk, which have \nbeen significantly increased by the COVID-19 pandemic. \n \nD. MEASURES TO ADDRESS DEFICIENCIES IN MOBILE BANKING \n44. The forensic audit to assess the integrity, compliance and efficacy of mobile \nmoney platforms and transactions in Zimbabwe has revealed significant \nweaknesses in the systems of the mobile payment operators, namely Ecocash, \nOneMoney, Telecash and Mycash. \n \n45. The critical weaknesses that cut across the four mobile payment platforms are: \ni. \nNon-adherence to KYC principles, characterised by, among other \nissues, creation of mobile money accounts using fictitious and \nunverified identification particulars; \n17 \nii. Creation of money on the platforms (overdrafts and fraudulent / \nfictitious credits) which is not backed by balances in the Mobile Money \nTrust Accounts; \niii. System infrastructure inadequacies and weak Anti Money Laundering \ncontrols; \niv. Failure to comply with, including willful disregard for, regulatory \ndirectives; \nv. Connivance between mobile money operator employees and customers \nto delay or illegally bypass account freeze orders; \nvi. Failure to deduct or remit statutory taxes; and \nvii. Rampant abuse of agent, super-agent and bulk payment wallets for \npurposes of trading on the foreign exchange parallel market. \n \n46. On the basis of the forensic audit findings and recommendations, the \nfollowing measures to address the shortcomings shall be implemented with \nimmediate effect: \n \nIndividuals \n47. Transactions by individuals shall be pegged at ZW$5,000 per day. Individuals \nshall be allowed to undertake Person to Person transfers, Person to Merchant \npayments for goods and services, settlement of bills and purchase of airtime. \n \n48. Following the suspension and freezing of agent and bulk-payer wallets on 27 \nJune, 2020, mobile money operators have allowed illegal foreign currency \ndealers to use multiple individual wallets as a means to bypass the transaction \nlimits and continue with their illicit transactions. Mobile money operators \nshall, with immediate effect, close all multiple wallets, and allow just one \nwallet per individual. \n \n18 \n \n \nMerchants \n49. Retailers and other service providers will be permitted to continue operating \nmerchant wallets to allow the public to pay for goods and services. \n \n50. Merchants shall not be allowed to make payments from their wallets. E-value \nheld in merchant wallets shall be liquidated to the merchant’s bank account. \n \n51. In this regard, mobile money operators shall have systems in place to ensure \nautomatic liquidations from the merchant wallets to the merchant bank \naccounts. This measure shall ensure that mobile payment platforms are not \nused for store of value but shall be restricted for transacting purposes in \nfurtherance of financial inclusion in the economy. \n \nAgents \n52. Agent wallets are no longer serving any legitimate purpose and were now \nbeing used primarily for illegal foreign exchange transactions. Agents’ mobile \nmoney wallets are therefore abolished, with immediate effect. \n \n53. Agents currently holding value in suspended and frozen wallets shall be \nallowed to liquidate the funds to their bank accounts, upon the Financial \nIntelligence Unit (FIU) having satisfied itself of the legitimacy of the source \nof funds. \n \nBulk payment accounts \n54. Mobile payment operators have been turning a blind eye and have even \nactively encouraged the abuse of bulk payment wallets for illegal foreign \ncurrency transactions, thus earning lucrative transaction fees in the process. \n19 \n \n55. Going forward, bulk payment wallets will be approved by regulatory \nauthorities for limited use, primarily for low value transactions and \nhumanitarian funds disbursements to vulnerable members of society. \n \n56. Any other bulk payment transactions, such as payment of salaries and wages, \nshould be processed through normal banking channels. \n \nOther corrective measures \n57. The Bank, as regulator of mobile payment services, and the FIU, as the agency \nresponsible for enforcing anti money laundering standards, will consider the \nfindings and recommendations of the forensic report, in detail, and come up \nwith comprehensive corrective measures for implementation by mobile \npayment operators, to ensure compliance, integrity and efficacy of mobile \nmoney transactions. \n \n58. For identified serious breaches, appropriate regulatory and disciplinary \nmeasures will be instituted against delinquent mobile money operators and / \nor any culpable individuals, in accordance with the law. \n \nInteroperability \n59. On 27 March 2020, the Government passed the Banking (Money \nTransmission, Mobile Banking and Mobile Money Interoperability) \nRegulations, under Statutory Instrument 80 of 2020. The new law is intended \nto facilitate integration of payment systems and promote efficiency of \npayment services, for the convenience of the transacting public. \n \n60. Pursuant to the statutory instrument, the Bank designated Zimswitch \nTechnologies (Private) Limited (Zimswitch) as a national payment switch, \n20 \nand required all payment service providers, including mobile payment \noperators, to be connected thereto. \n \n61. With all banks and some mobile payment operators already connected to \nZimswitch, connectivity by all payment service providers is expected to be \ncompleted by 30 September 2020. \n \nE. MANAGEMENT OF COVID-19 ALLOWANCES FOR PUBLIC SECTOR \nEMPLOYEES \n \n62. In view of the continuous challenges faced by the public sector employees to \naccess their COVID-19 allowances, the Bank is directing all banks to adhere \nto the requirements to open domestic FCA accounts to enable the public sector \nemployees to access their US$ allowances in the manner and form as expected \nby Government and the employees. \n \n63. Banks should make it easy for these public servants to have access to foreign \nexchange cards and to permit them to transact in the normal course of business \nlike any other ordinary customers of banks with adherence to the usual Know \nYour Customer (KYC) principles. \n \n64. Accordingly, banks are directed to submit returns to the Bank by 31 August \n2020 on their banking programme(s) that they have put in place to address the \nrequirement for ease of access to COVID-19 allowance by the public sector \nemployees. \n \nF. BUSINESS CONTINUITY \n65. The COVID-19 pandemic has presented businesses with many unforeseen \nchallenges due to its rapid spreading and global reach, which necessitates \n21 \nimprovement and continuous review of banking institutions’ business \ncontinuity plans to better prepare for the impact the pandemic. \n \n66. In this regard, banking institutions are required to submit updated business \ncontinuity plans (BCPs) by 30 October 2020. The revised BCPs should \ninclude: \na) adequate measures for infection control in the workplace; \nb) preparedness for large-scale remote working of staff; \nc) customers prompt access to their funds; \nd) critical systems, functions and staff; \ne) continued compliance with regulatory reporting requirements \nf) alternate business sites; and \ng) data back-up and recovery. \n \nG. CREDIT RISK \n67. The COVID-19 pandemic and the attendant lockdowns to contain the spread \nof the pandemic has impacted negatively on the cash flows of many \nconsumers and businesses. The identification of risk concentrations from an \noverall portfolio perspective is therefore paramount during this pandemic. In \nparticular reviewing sectoral concentrations of loans is critical given that the \npandemic has affected various sectors differently. \n \n68. Against this background, with effect from 30 September 2020, banking \ninstitutions are required to submit monthly credit reports on the status of each \nof their top twenty loans/exposure and a clear strategy for action where there \nis deterioration in quality of the concerned loan. \n \n \n \n22 \nH. CYBER RISK AND CONSUMER PROTECTION \n69. The COVID-19 pandemic has made a compelling case for digital banking. \nAccelerated digitisation by banking institutions in the wake of COVID-19 and \nthe remote working arrangements have expanded the attack surface of banks’ \ninformation technology networks. Critical business functions are more \nexposed to opportunistic and targeted cyber-attacks by criminals and thus \nincreasing consumer protection risks. \n \n70. Cyber and anti-fraud controls are critical for banking institutions during and \npost COVID-19. Banking institutions are called upon to remain alert to such \nthreats and activate appropriate risk management responses and to conduct \nongoing consumer education campaigns. \n \n71. Banking institutions should review the adequacy of their ICT systems. \nAccordingly, banking institutions are required to submit to the Bank updated \ncyber risk management policies by 30 October 2020, taking into account \nCOVID-19 experiences to date. \n \n \n \n \n \n \n \n \n \n \n \n \n23 \nSECTION 4: OUTLOOK AND CONCLUSION \n \nEconomic Outlook \n72. The measures contained in this Statement will foster stability in prices and \nexchange rate consistent with the trend that has been witnessed since adoption \nof the foreign exchange auction system in June 2020. The Bank is committed \nto containing fluctuations in the exchange rate within a low band through \nmarket-based means and monetary policy instruments under its purview, \nnotably, reserve money targeting. \n \n73. The ensuing stability of the exchange rate will enhance the value of the \nZimbabwe dollar as a store of value in an environment where business and \nconsumers use the exchange rate as the nominal anchor. This will in turn help \nreduce demand for foreign currency for store of value and thus enhancing \ncurrent measures to stabilise prices. \n \n74. Reflecting recent developments on the foreign exchange auction, blended \nannual inflation is forecast to gradually fall to 249% by December 2020 and \nfurther to single digit levels by December 2021. The liquidity mopping effect \nof the auction coupled with continued restraint on money supply growth is \nexpected to dampen inflationary pressures in the economy culminating to a \nsustained trajectory in the year-on-year inflation as shown in the post auction \npolicy scenario in Figure 2. \n \n \n \n \n \n \n24 \nFigure 2: Inflation Development and Outlook \n \n \nConclusion \n75. The stability in prices and exchange rate witnessed since the adoption of the \nauction system will go a long way in fostering stability and predictability in \nprice and exchange rate dynamics. This stability is necessary to support and \nboost the country’s productivity levels that is critical to ensure self-sustenance \nand increasing employment. \n \n76. Concerted efforts are obviously required from all stakeholders to play their \npart in avoiding some of the vices which have been driving the parallel market \nexchange rate and propagating inflationary pressures in the economy. These \nvices include the speculative and short-termism tendencies and indiscipline \nparticularly relating to the use of the mobile money platforms which \ncompelled Government to take drastic measures to suspend agent-based \nmobile transactions and subsequent abolishment of agent mobile money \nwallets in terms of this Statement. \n \n0.000\n100.000\n200.000\n300.000\n400.000\n500.000\n600.000\nApr-20\nMay-20\nJun-20\nJul-20\nAug-20\nSep-20\nOct-20\nNov-20\nDec-20\nProjections\nbaseline\nPost Auction Policy\nImpact of \nAuction\n25 \n77. The Bank remains committed to foster price stability through containing \nmoney supply growth to anchor inflation expectations and contain \nfluctuations in the market-based exchange rate within sustainable bands. \nFostering price stability is sine qua non to boost confidence within the \neconomy and for enhancing production and productivity. \n \n \n \nI THANK YOU \n \nJOHN P. MANGUDYA \nGOVERNOR \n \n \n \n26 \nANNEXURE:\n \nMACROECONOMIC \nAND \nFINANCIAL \nDEVELOPMENTS \nGlobal Developments \n1. The global economy is now projected to decline by 4.9% in 2020, as a result \nof the COVID-19 pandemic, which has disruptive and negative implications \nfor global trade channels, business and tourism travel, capital flows and \ncommodity prices. \n \n3. The world economy is, however, forecasted to rebound by 5.4% in 2021, on \naccount of worldwide restoration of consumer and investor confidence. Table \n1 summarises global economic growth developments and prospects for \nselected regions and countries. \n \n \nTable 3: World Economic Growth (%) \n \n2018 \n2019 \n2020 Proj. \n2021 Proj. \nWorld Output \n3.6 \n2.9 \n-4.9 \n5.4 \n Advanced Economies \n2.2 \n1.7 \n-8.0 \n4.8 \n o/w: United States \n2.9 \n2.3 \n-8.0 \n4.5 \n Euro-Area \n1.9 \n1.3 \n-10.2 \n6.0 \n Japan \n0.3 \n0.7 \n-5.8 \n2.4 \nEmerging Market & \nDeveloping Economies \n4.5 \n3.7 \n-3.0 \n5.9 \n Asia \n6.3 \n5.5 \n-0.8 \n7.4 \nChina \n6.7 \n6.1 \n1.0 \n8.2 \nIndia \n6.1 \n4.2 \n-4.5 \n6.0 \nSSA \n3.2 \n3.1 \n-3.2 \n3.4 \nNigeria \n1.9 \n2.2 \n-5.4 \n2.6 \nSouth Africa \n0.8 \n0.2 \n-8.0 \n3.5 \n \nSource: IMF World Economic Outlook, June 2020 \n27 \nDomestic Developments \n4. The economy was initially projected to grow by 3% in 2020, driven by \nanticipated positive performances in the key sectors. However, due to COVID-\n19 and another drought year, the economy is now projected to contract by \n4.5%, with the declines cutting across all sectors of the economy. \n \nInflation \n5. Following adoption of dual currency pricing, it became essential and \nreasonable that inflation in Zimbabwe is measured on a blended or composite \nbasis to reflect changes in both local currency and USD prices. Accordingly, \nthe blended month-on-month inflation declined from 29.1% in June 2020 to \n16.6% in July 2020 as shown in Figure 2 below. Foreign exchange transactions \nin the economy have increased following Government’s policy to allow the use \nof foreign exchange on domestic transactions at the onset of COVID-19 \ncontainment measures. \n \n6. \nThe decline in overall monthly blended inflation in July 2020 was mainly on \naccount of decreases in food inflation. Blended monthly food inflation \ndeclined from 36.8% in June to 4.77%. The decline in food prices mainly \nreflect stability in the foreign exchange market where the producers of \nfoodstuffs are accessing forex at the auction rate. The parallel exchange rate \nhas stabilised following adoption of the foreign exchange auction, thus \npointing to subdued inflationary pressures in the outlook. \n \n \n \n \n \n \n \n \n \n \n28 \nFigure 2: Month-on-month Inflation \n \n \nSource: Zimstat, 2020 \n \n \n \nForeign Currency Receipts and Payments \n7. \nTotal foreign currency receipts for the period January to 30 June 2020 \namounted to USD3.16 billion, of which USD1,96 billion were export \nproceeds. During the corresponding period in 2019, total foreign currency \nreceipts amounted to USD2.69 billion, of which USD1,86 billion were export \nproceeds. \n \n8. \nThe increase of 17.4% in total foreign currency receipts in the first quarter of \n2020 as shown in Table 4 below was mainly driven by the increase in \ninternational remittances, drawdowns on lines of credit and increase in \nexports. \n \n \n \n \n \n0.00\n12.50\n25.00\n37.50\n50.00\n62.50\n7/1/19\n8/1/19\n9/1/19\n10/1/19\n11/1/19\n12/1/19\n1/1/20\n2/1/20\n3/1/20\n4/1/20\n5/1/20\n6/1/20\n7/1/20\nFood\nNon-Food\nAll Items\n29 \n \nTable 4: Total Foreign Currency Receipts (USD millions) \nSource \nJan-June \n2020 \n% \nContribution \nJan-June \n2019 \n% Change \nExport Proceeds \n \n1,955.7 \n62% \n1,864.5 \n4.9% \nInternational \nRemittances \nDiaspora \nRemittances \n374.6 \n12% \n298.4 \n26% \nNGOs \n331.1 \n10% \n260.1 \n27% \nLoan Proceeds \n \n454.6 \n14% \n211.3 \n115% \nIncome receipts \n \n29.9 \n0.9% \n40.4 \n-26% \nForeign Investment \n \n17.8 \n0.6% \n19.1 \n-7% \nTOTAL \n \n3,163.7 \n100% \n2,693.8 \n17.4% \nSource: Exchange Control Records and Bank Supervision Application System (BSA) \n \nForeign Currency Payments \n9. From January to 30 June 2020, foreign payments reported by Authorised \nDealers amounted to USD1,84 billion. This represents a 5.9% decrease from \nUSD1,96 billion recorded during the same period in 2019. Mining and \nAgriculture sectors registered fair increase of 24% and 58% respectively in \nforeign payments made relative to the previous year’s payments with the \nexception of the manufacturing, services, retail & distribution and individuals \nsectors which recorded a decrease of about 16%, 21%, 8% and 1% respectively. \n \n \n \n \n \n \n30 \n \nTable 5: Foreign Payments by Sector in USD (Jan – June 2020) \nSector \n2020 \n2019 \n% Variance \nServices \n481,156,320 \n610,936,943 \n-21 \nRetail and Distribution \n478,832,447 \n518,461,573 \n -8 \nManufacturing \n341,543,884 \n405,465,529 \n -16 \nMining \n397,039,217 \n319,655,580 \n24.2 \nAgriculture \n118,898,621 \n75,200,971 \n 58 \nIndividuals \n21,877,414 \n25,394,058 \n-14 \nTotal \n1,839,347,903 \n1,955,114,654 \n-5.9 \nSource: CEBAS Foreign Payments Reporting System, RBZ \nBalance of Payments Developments and Outlook \n10. Reflecting favourable foreign currency performance during the first half of \nthe year, albeit under a harsh operating environment, the country’s balance \nof payments is projected to remain favourable, driven by improvements in \nexports and diaspora remittances. \n \n11. As at 30 June 2020 total International Remittances amounted to US$705 \nmillion, representing a 26% increase from 2019’s figure of US$558 million \nduring the same period. Of the total amount, diaspora remittances amounted to \nUS$374 million, a 25% increase from US$298 million received during the \nsame period in 2019. International remittances received through the normal \nbanking system on behalf of International Organizations (NGOs) amounted to \nUS$331 million, a 27% increase from previous year of US$260 million. Table \n6 shows month on month Diaspora remittances (person to person remittances) \nfor the year 2019 and 2020. \n \n31 \nTable 6: Monthly Inward Diaspora Remittances in USD (Jan - July) \n \n2020 \n2019 \nVariance % \nJanuary \n60,487,920 \n44,567,757 \n36 \nFebruary \n69,216,134 \n41,778,076 \n66 \nMarch \n61,138,089 \n62,414,369 \n-2 \nApril \n30,906,845 \n49,227,045 \n-37 \nMay \n66,742,096 \n53,896,272 \n24 \nJune \n85,849,311 \n46,525,102 \n85 \nJuly \n91,852,638 \n51,255,845 \n79 \nTotal \n466,193,033 \n349,664,465 \n33 \nSource: Exchange Control and Bank Supervision Application System (BSA) \n \nMONETARY GROWTH \n12. Growth in reserve money continues to be contained within the Bank’s \nMonetary Targeting Framework, which is consistent with the Monetary \nPolicy Committee’s targeted reserve money growth of below 50 percent per \nquarter in 2020. In line with this policy framework, reserve money declined \nto ZW$11.81 billion as at week ending 14th August 2020, from ZW$16.66 \nbillion recorded at the end of July 2020, largely reflecting decreases of banks’ \nliquidity positions (i.e. banks’ balances at RBZ). \n \n13. The decrease in reserve money since the introduction of the auction system \nhas largely been attributable to purchases of foreign exchange at the new \nauction rates; general increase in Government deposits which absorbs market \nliquidity as a result of increased revenue collections; and tight liquidity \nconditions which saw banks increasingly utilising their deposit balances at the \nBank. The Table below shows developments in reserve money since the \nbeginning of 2020. \n32 \nTable 1: Reserve Money Developments (ZW$ Millions) \n \nJan-20 \nFeb-20 \nMar-20 \nApr-20 \nMay-20 \nJun-20 \nJul-20 \nWeek \nEnding \n7 Aug-20 \nWeek \nEnding \n14 Aug-20 \nCurrency Issued by RBZ* \n1,137 \n1,217 \n1,308 \n1,341 \n1,456 \n1,671 \n1,898 \n1,948 \n1,948 \nBanking Sector Deposits at RBZ \n7,254 \n7,089 \n8,789 \n10,199 \n12,082 \n10,420+ \n11,453 \n10,536 \n9,584 \n Statutory (Required) Reserves \n1,041 \n1,083 \n1,205 \n1,214 \n1,387 \n890 \n1,050 \n1,041 \n1,136 \n Banks’ RTGS LiquidityΩ \n6,213 \n6,006 \n7,584 \n8,895 \n10,696 \n9,529 \n10,403 \n9,495 \n8,447 \nOther Deposits@ \n861 \n1,075 \n1,608 \n920 \n277 \n582 \n3,312 \n870 \n282 \nReserve Moneyπ \n9,251 \n9,381 \n11,705 \n12,460 \n13,815 \n12,673 \n16,662 \n13,354 \n11,814 \nMemorandum Items \n \n \n \n \n \n \n \n \n \nCurrency Issued/Reserve Money \n12.3% \n13.0% \n11.2% \n10.8% \n10.5% \n13.2% \n11.4% \n14.6% \n16.5% \nCurrency in Circulation**/Deposits \n2.7% \n2.5% \n2.2% \n2.0% \n1.9% \n1.5% \n1.6% \n1.6% \n1.4% \nMonthly Change in RTGS Balances \n-16.4% \n-3.3% \n26.3% \n18.5% \n19.0% \n-16.8% \n-10.2% \n-8.7% \n-10.9% \nMonthly Change in Reserve Money \n-10.4% \n1.4% \n24.8% \n6.5% \n10.9% \n-10.6% \n-2.0% \n-19.9% \n-11.5% \nGovernment Deposits at RBZ )ψ \n3,144 \n3,347 \n2,847 \n2,967 \n2,092 \n8,509 \n7,073 \n8,881 \n8,367 \nOther Deposits at RBZ (FPR a/c) \n \n \n \n \n \n \n \n2,324 \n2,216 \nMonthly Inflation \n2.2% \n13.5% \n26.59% \n17.64% \n15.13% \n31.66% \n35.53% \nN/A \nN/A \nInter-Bank Exchange Rate \n17.35 \n17.95 \n25.00 \n25.00 \n25.00 \n57.36 \n76.76 \n80.47 \n82.56 \nNotes: \n1. Amount also reflects re-classification of FPR’s foreign exchange deposit, which was previously included in reserve \nmoney. This deposit has no effect on reserve money as previously advised. \n* Currency Issued – refers to bank notes and coins issued by the Reserve Bank of Zimbabwe. \n** Currency in Circulation – refers to the currency circulating outside the banking system. This excludes currency held \nin the vaults of banks. \nΩ These are deposits that banks place in the Real Time Gross Settlement (RTGS) System for purposes of meeting their \ninter-bank transactions. \nπ Figures may reflect positions as at last Friday of the month. See Monthly Reviews for month-end positions. \n@ Other Deposits are mainly proceeds of drawdowns from foreign currency loans which are advanced to Fidelity \nPrinters & Refiners (FPR) to purchase gold from the gold producers. The amounts are, therefore, purely accounting \nentries which do not represent money creation. With effect from 7th August 2020, this foreign exchange deposit will \nnow appear as a memorandum item. \n Ψ Provisional. \nN/A - not yet available. \n33 \n \n14. As at May 2020, broad money (M3) stood at ZW$59.5 billion, of which \nZW$33.16 billion (56.10%) was in local currency deposits and ZW$24.98 \nbillion (42.01%) constituted foreign currency deposits. Growth in broad \nmoney during the first five months of 2020 was significantly explained by the \nimpact of exchange rate depreciation on the foreign currency component of \nthe deposits (FCAs). \n \n15. The movement of the inter-bank exchange rate, from ZW$17.35/USD in \nJanuary 2020 to ZW$25.00/USD in May, resulted in an increase in the foreign \ncurrency component of broad, merely on account of the 44% depreciation in \nthe exchange rate. \n \n16. The adoption of the foreign exchange auction system, which has seen the \nexchange rate re-aligning from ZW$25/USD in May 2020 to ZW$82.9/USD \non the auction of 18th August 2020, will lead to further increases in the foreign \ncurrency component of broad money. \n \n17. In addition, foreign currency deposits in the banking system have been \nimproving due to inflows from the tobacco selling season, as well as the \nharnessing of foreign currency into formal channels, following the policy to \nallow use of free funds in settling domestic transactions. \n \n18. The increase in currency in circulation from ZW$953.2 million in January \n2020 to Z$W1.1 billion by May 2020 was in line with increased demand for \nmoney in the economy for transactions purposes, in the inflationary \nenvironment. Figure 5 shows developments in the components of broad \nmoney, since 2018. \n34 \n Figure 3: Composition of Money Supply \n \nSource: Reserve Bank of Zimbabwe, 2020 \n \n19. Domestic credit grew by 36.73% from ZW$27.82 billion in December 2019 \nto ZW$39.06 billion in May 2020, largely due to an increase in credit to the \nprivate sector, from ZW$11.1 billion to ZW$21.58 billion, over the same \nperiod. \n \n20. Net credit to Government remained constant around Z$W14 billion over the \nfirst 5 months of the year, reflecting reduced recourse by Government to \ndomestic bank sources of finance. Government recorded a budget surplus of \naround ZW$800 million for the first half of 2020. \n \n \nCONDITION AND PERFORMANCE OF THE BANKING SECTOR \n \n21. Notwithstanding the unprecedented challenges occasioned by the COVID-19 \npandemic, the banking sector remained financially stable. On its part, the Bank \nimplemented regulatory and supervisory measures to maintain financial \nstability. These measures were aimed at ensuring that banking institutions \n0\n15,000\n30,000\n45,000\n60,000\n75,000\nMar-18\nJun-18\nSept-18\nDec-18\nMar-19\nJun-19\nSept-19\nDec-19\nMar-20\nZ$ Million\nNCDs\nTime Deposits\nLCY Transferable Deposits\nFCAs\nCurrency in Circulation\nAnnual Growth\n35 \ncontinue to support the real economy, while minimizing the impact of the \nCOVID-19 pandemic on the sector. \n \nBanking Sector Architecture \n22. The composition of the banking sector under the supervision and oversight of \nthe Bank remained largely unchanged over the period under review, with the \nnumber of institutions distributed as shown below. \n \nTable 8: Architecture of the Banking Sector \nType of Institution \nNumber \nCommercial Banks \n13 \nBuilding Societies \n5 \nSavings Bank \n1 \nTotal Banking Institutions \n19 \nOther Institutions under the supervision of Reserve Bank \n \n \n \nCredit-only-MFIs \n225 \nDeposit-taking MFIs* \n8 \nDevelopment Financial Institutions \n2 \nTotal Other Institutions \n235 \n \n \n * Includes Lion Microfinance Limited (under Curatorship) \n23. Ndoro Microfinance (Private) Limited and Cashbox Financial Services \nMicrofinance Bank (Private) Limited, which were licensed as Deposit-Taking \nMicrofinance Institutions in September 2019 and February 2020, respectively, \n36 \nare yet to commence operations as they are putting in place the necessary \ninfrastructure for commencement of business. \n \nPERFORMANCE OF THE BANKING SECTOR \n24. The performance of the banking sector was considered satisfactory during the \nperiod ended 30 June 2020, as evidenced by the financial soundness indicators \nprovided in Table 9 below. \n \nTable 9: Financial Soundness Indicators \nKey Indicators \nBenchmark \nJune-19 \nDec-19 \nMar-20 \nJune -20 \nTotal Assets \n- \n$23.54bn \n$60.64bn \n$98.79bn \n$193.56bn \nTotal Loans & Advances \n- \n$6.17bn \n$12.63bn \n$19.42bn \n$37.77bn \nNet Capital Base \n- \n$3.31bn \n$9.75bn \n$14.25bn \n$29.47bn \nTotal Deposits \n- \n$16.92bn \n$34.50bn \n$47.05bn \n$97.40bn \nNet Profit \n- \n$929.95m \n$6.41bn \n$1.99bn \n$13.46bn \nReturn on Assets \n- \n5.11% \n8.99% \n2.44% \n10.53% \nReturn on Equity \n- \n20.95% \n33.02% \n8.67% \n27.38% \nCapital Adequacy Ratio \n12% \n32.64% \n39.56% \n41.83% \n61.72% \nTier 1 Ratio \n8% \n27.24% \n27.87% \n27.87% \n34.35% \nLoans to Deposits \n70% \n36.49% \n36.60% \n41.28% \n37.71% \nNon-Performing Loans Ratio \n5% \n3.95% \n1.75% \n1.42% \n1.03% \nLiquidity Ratio \n30% \n64.77% \n72.42% \n66.71% \n74.85% \n37 \nCapitalisation \n26. As at 30 June 2020, the banking sector aggregate core capital was ZW$20.99 \nbillion, representing an increase of 180.99%, from ZW$7.47 billion as at 31 \nDecember 2019. The growth in banking sector aggregate capital was mainly \nattributed to growth in retained earnings, buoyed by revaluation gains from \nforeign exchange denominated assets, following movements in the foreign \nexchange rate with the introduction of the foreign exchange auction in June \n2020. \n \n27. The banking sector average capital adequacy and tier 1 ratios of 61.72% and \n34.35% as at 30 June 2020, respectively were above the regulatory minima of \n12% and 8%, respectively. All banking institutions complied with the \nminimum regulatory capital adequacy and tier 1 ratios. \n \nBanking Sector Deposits \n28. Total banking sector deposits amounted to $ZW97.40 billion as at 30 June \n2020, representing an increase of 182.32%, from $ZW34.5 billion as at \nDecember 2019. The increase in the deposit base was mainly attributable to \nrevaluation of foreign currency denominated deposits. The trend of banking \nsector deposits over the period 31 December 2017 to 30 June 2020 as shown \nin Figure 6. \n \n \n \n \n \n \n \n38 \nFigure 6: Trend of Banking Sector Deposits (ZW$ billion) \n \n \n29. The deposit base is dominated by FCA and local demand deposits, which \naccounted for 52.59% and 40.66%, of total deposits, respectively, as shown in \nFigure 7 below. \nFigure 7: Composition of Deposits as at 30 June 2020 \n \n8,480.46\n12,202.79 10,320.51\n10,996.51 16,916.12\n34,502.46\n47,048.84\n97,402.00\n0.\n25000.\n50000.\n75000.\n100000.\n125000.\n31-Dec-17\n30-Sept-18\n30-Dec-18\n31-Mar-19\n30-Jun-19\n31-Dec-19\n31-Mar-20\n30-Jun-20\nThousands\n39 \n \n \n30. As at 30 June 2020, the commercial banking sub-sector deposits accounted for \n91.54% of total deposits. \n \n \nBanking Sector Liquidity \n31. Figure 8 below shows a relatively stable and steadily rising trend in the banking \nsector average prudential liquidity ratio from March 2015 to June 2020. \n \nFigure 8: Prudential Liquidity Ratio Trend (%) \n \n \n \n32. The average prudential liquidity ratio for the banking sector was 74.85% as at \n30 June 2020. The high average prudential liquidity ratio was partly due to a \ncautious lending approach being adopted by banking institutions. \n \nBanking Sector Assets \n33. Total assets were ZW$193.56 billion as at 30 June 2020, and largely \ncomprised balances with foreign institutions, loans & advances, balances with \n38.62%\n49.63%\n63.79%\n62.37%\n70.66%\n66.82%\n64.77%\n76.54%\n72.42%\n74.85%\n0.00%\n20.00%\n40.00%\n60.00%\n80.00%\n100.00%\nMar-15\nMar-16\nMar-17\nMar-18\nDec-18\nMar-19\nJun-19\nsep-19\nDec-19\nJun-20\nindustry average\nminimum requirement\n40 \ncentral bank, and off-balance sheet items, which constituted 18.58%, 15.85%, \nand 12.63% of total assets, respectively, as shown below: \n \nFigure 9: Composition of the Banking Sector Assets as at 30 June 2020 \n \n \nLoans and Advances \n34. Total banking sector loans and advances increased by 94.49%, from ZW$19.42 \nbillion as at 31 December 2019 to ZW$37.77 billion as at 30 June 2020. The \ngrowth in total banking sector loans and advances is largely attributed to the \ntranslation of foreign currency denominated loans at the prevailing interbank \nexchange rate, which moved upwards in June 2020, following the introduction \nof the foreign exchange auction system. Figure 10 below shows the trend in \nthe total banking sector loans and advances from December 2013 to June 2020. \n \n \n41 \nFigure 10: Trend in Banking Sector Loans & Advances (ZW$m) \n \n \n \n35. Loans to productive sectors of the economy constituted 83.69% of total \nbanking sector loans as at 30 June 2020, as shown in the diagram below. \n \nFigure 11: Sectoral Distribution of Loans as at 30 June 2020 \n \n \n \n \n3,701.11 \n3,872.39 \n3,688.46 \n3,798.36 \n4,220.12 \n6,197.03 \n8,348.73 \n12,629.15 \n37,770.98 \n '-\n 10,000\n 20,000\n 30,000\n 40,000\nDec-13\nDec-15\nDec-16\nDec-17\nDec-18\nJun-19\nSept-19\nDec-19\nJun-20\n42 \n \nLoan Portfolio Quality \n36. The quality of the banking sector loan portfolio continued to improve, as \nreflected by an improvement in the non-performing loans (NPLs) to total loans \nratio, from 1.75% as at 31 December 2019 to 1.03% as at 30 June 2020. Figure \n13 below shows the trend in the level of non-performing loans to total loans \nratio (NPLs ratio) from December 2015 to June 2020. \n \nFigure 12: Trend in NPL Ratio \n \n \nEarnings Performance \n37. During the period under review, all banking institutions were profitable, with \naggregate profit of ZW$13.46 billion for the half year ended 30 June 2020, up \nfrom ZW$79.40 million for the corresponding period in 2019. The key \nrevenue drivers were other non-interest income, mainly from revaluation gains \non foreign currency assets. The figure below shows the income mix as at 30 \nJune 2020. \n \n \n \n \n \n10.82%\n7.87% 8.39% 7.95% 8.63%\n7.08% 7.06%\n6.22% 6.69% 6.92%\n3.23%\n1.75% 1.42% 1.03%\n0.00%\n2.75%\n5.50%\n8.25%\n11.00%\n13.75%\nLevel of NPLs Ratio\n43 \nFigure 13: Income Mix – 30 June 2020 \n \n \nOPERATIONAL RISK MANAGEMENT \n38. The Bank has put in place a sector-wide complaints tracking mechanism as \npart of consumer protection. All banking and microfinance institutions are now \nrequired to electronically log complaints they receive from clients into a \nComplaints Return on the Consumer Protection Module in the Bank \nSupervision Application (BSA) System. \n \n39. Submissions for the half year ended June 2020 revealed that complaints \nreceived by banking and microfinance institutions largely related to failed \ntransactions (14%), delayed transfers (11.62%), and ZIPIT transfer challenges \n(8.64%). \n \nSUSTAINABILITY STANDARDS \n40. The Bank is collaborating with the European Organization for Sustainable \nDevelopment (EOSD) in embedding sustainability standards in the financial \nsector under the Sustainability Standards Certification Initiative (SSCI). \n \n44 \n41. Pursuant to a Memorandum of Understanding signed in July 2019 between the \nEOSD and the Bank, six (6) banking institutions are participating and are \nimplementing the Standards. Participating banking institutions are now \nworking on their Purpose Statements and High Impact Goals, which are \naligned to the country’s developmental objectives. \n \nCONDITION AND PERFORMANCE OF DEPOSIT-TAKING \nMICROFINANCE INSTITUTIONS \n \n42. As at 30 June 2020, there were eight (8) registered deposit-taking microfinance \ninstitutions (DTMFIs), comprising of five operating institutions, two licenced \nbut yet to commence operations, as well as one under curatorship. \n \nPerformance of the DTMFIs \n43. The DTMFI sub-sector remained generally stable and resilient as evidenced by \nadequate capitalization and growth in total assets. However, the sub-sector \nrecorded heightened exposure to credit risk, as well as low business volumes \nand operating losses, mainly due to the COVID-19 pandemic-induced \nrestrictions. \n \n44. Table 13 below shows the DTMFI sub-sector’s performance indicators as at \n30 June 2020. \n \n \n \n \n \n \n45 \nTable 13 : DTMFIs Performance Indicators, Dec 2018 – June 2020 (ZW$) \nKey Indicators \nDec-18 \nJune 19 \n*Dec 19 \n*March \n2020 \n*June 2020 \nTotal Assets \n$138.16m \n$158.35m \n$258.63m \n$403.40m \n$843.04m \nTotal Loans & Advances \n$84.40m \n$97.44m \n$88.83m \n$120.81m \n$134.33m \nCore Capital \n$60.46m \n$86.10m \n$128.34m \n$178.81m \n$300.98m \nNet Capital Base \n$63.78m \n$86.10m \n$145.54m \n$218.25m \n$482.98m \nTotal Deposits \n$23.85m \n$15.29m \n$35.95m \n$68.02m \n$83.09m \nNet Profit \n-$0.029m \n$10.32m \n$17.39m \n$0.17m \n$119.79m \nAverage Operational Self-\nSufficiency Ratio \n89.27% \n119.15% \n122.57% \n97.66% \n241.80% \nAverage Return on Assets \n-9.16% \n-0.61% \n-0.27% \n-1.87% \n0.96% \nAverage Return on Equity \n-8.40% \n2.66% \n9.53% \n-0.49% \n7.04% \nPortfolio at risk Ratio (> 30 \ndays) \n13.51% \n10.34% \n11.02% \n8.86% \n16.97% \n*figures exclude Lion Microfinance which is under curatorship. \n \n45. Lion Microfinance Limited, which was placed under curatorship by the Bank \non 26 July 2019 due to critical undercapitalisation and weak corporate \ngovernance systems, had its curatorship extended to 30 September 2020, to \nallow for finalization of the recapitalisation process, audit verification of the \ninstitution’s financial condition and rectification of corporate governance and \nrisk management systems. \n \n46 \nCapitalisation \n46. All the five (5) operating DTMFIs were compliant with the minimum \nregulatory capital requirement of ZW$5 million. The DTMFIs submitted \ncapitalisation plans to comply with revised capital requirements of an \nequivalent of USD5 million for DTMFIs, which reflect a need for fresh capital \ninjections. \n \nAsset Quality \n47. Asset quality in the sub-sector deteriorated as evidenced by the increase in the \nPortfolio at Risk (>30 days) ratio, from 11.02% as at 31 December 2020 to \n16.97% as at 30 June 2020, mainly due to the COVID-19 pandemic-induced \nrestrictions, which affected borrowers’ businesses performance, ability of \nDTMFIs’ loans officers to make collections, as well as failure by some clients \nfrom the informal sector to resume operations following relaxation of national \nlockdown regulations as they are unregistered. \n \nEarnings performance \n48. Aggregate net profit increased ten (10) times to ZW$119.79 million for the six \n(6) months ended 30 June 2020, from ZW$10.32 million for the corresponding \nperiod in 2019, largely driven by revaluation gains on investment properties. \nHowever, three (3) DTMFIs reported losses during the six months ended 30 \nJune 2020, due to the negative impact of the COVID-19 pandemic, coupled \nwith the prevailing adverse operating environment. \n \nPerformance of credit only microfinance institution \n49. Microfinance business remained generally subdued over the half-year to June \n2020 due to the impact of the COVID-19 pandemic and the social distancing \nprotocols which have reduced the demand for microfinance loans and client \n47 \nvisits as most of the microfinance clients, in particular, the micro, small and \nmedium enterprises remain largely closed for business. \n \n50. Most credit-only microfinance institutions did not have robust business \ncontinuity plans and the advent of the COVID-19 pandemic disrupted \nmicrofinance business operations. The situation was exacerbated by lack of \nrobust ICT systems and digital platforms, particularly among the credit-only \nmicrofinance institutions which in turn has militated against effective and \nefficient delivery of microfinance services. \n \n51. Preliminary COVID-19 impact assessment reports submitted by both credit-\nonly institutions indicate that the pandemic is expected to have a significant \nimpact on microfinance business in Zimbabwe. The credit only microfinance \ninstitutions face a myriad of challenges emanating from the COVID-19 \npandemic. The challenges include liquidity challenges, increased portfolio risk \nand inability to underwrite any meaningful business, which in turn has the \npotential to impact negatively on the sustainability of the sector. \n \nLEGAL AND REGULATORY DEVELOPMENTS \nReview of the Single Obligor Limit \n \n52. In order to enhance support to the productive sector in light of the COVID-19 \npandemic, the Bank, temporarily increased the single obligor limit from 25% \nto 35%, subject to a banking institution meeting the requirements of the \nBanking Act [Chapter 24:20], the Banking Regulations S.I. 205 of 2000 and \ninternal policies. The relaxation was with effective 21 May 2020. \n \n53. Banking institutions are currently submitting quarterly reports on all facilities \ngranted in excess of the single obligor limits. \n48 \n \nProposed Changes to the Legal Framework \n54. In line with its mandate of promoting financial stability, the Bank continued to \nstrengthen the regulatory framework and direct its supervisory efforts towards \nthe promotion of a safe, stable and sound financial system in Zimbabwe. \n \n55. The Bank is working with the Deposit Protection Corporation and Ministry of \nFinance and Economic Development to consider further enhancing banking \nlaws on cross-border banking, bank resolution and crisis management to align \nit with good practices. \n \n56. The proposed amendments to the Banking Regulations S. I. 205 of 2000, to \nprovide for matters that require to be prescribed under the Banking Act \nincluding the new minimum capital requirements, are under review by the \nAttorney General’s Office. \n \nEnhancement of Prudential Standards \n57. The Bank continues to monitor implementation of International Financial \nReporting Standard 9, which provides for forward-looking provisioning \nrequirements and expanded disclosure requirements. The standard \nsignificantly reinforces bank risk management and market discipline. \n \n58. Local regulatory authorities have provided various coordinated responses to \nthe pandemic in order to mitigate against potential significant increase in credit \nrisk on previously performing loans due to the COVID-19 pandemic. These \nmeasures include loan restructuring and repayment moratorium. In light of \nthese developments, banking institutions continue to ensure that underlying \nimpairment credit risk models are validated annually in accordance with \nregulatory requirements. \n49 \n \n59. In further efforts to enhance financial stability, the Bank developed a \nFramework for Domestic Systemically Important Banking Institutions, which \nwas issued in March 2020. The framework articulates relevant regulatory \nmeasures for the identification, monitoring and management of systemic risks \narising from the distress of local systemically important institutions. \n \n60. The Bank has developed a framework for the implementation of Basel III \nLiquidity Standards, covering Liquidity Coverage and Net Stable Funding \nratios. The framework is designed to enhance local metrics for the management \nof liquidity risk, aligning them with international best practice. \n \nSupervisory Response to COVID-19 Pandemic \n61. The COVID-19 pandemic has given rise to unprecedented challenges that have \naffected virtually every aspect of modern life. Economic uncertainties and risks \nto overall banking sector’s soundness increased during the first half of 2020, \nreflecting partly the impact of COVID-19 containment measures. \n \n62. On 23 March 2020, Statutory Instrument 76/2020 – Declaration of State of \nDisaster - COVID-19 was issued. The COVID-19 Prevention, Containment \nand Treatment Regulations SI 77/2020 were simultaneously issued with the \ndeclaration of national disaster. The Public Health (COVID-19 Prevention, \nContainment and Treatment) (National Lockdown) Order, 2020, was \npublished on the 29 March 2020 in Statutory Instrument 83 of 2020, declaring \na national lockdown to contain the spread of the COVID-19 formidable \ninfectious disease. \n \n63. Following these national measures, the Bank implemented regulatory and \nsupervisory measures to maintain financial stability. These measures were \n50 \naimed at ensuring that banking institutions are able to continue to support the \nreal economy, while minimizing impact of the COVID-19 pandemic on the \nsector. \n \n64. The Bank issued Circular 02/2020 providing guidance on enforcing social \ndistancing and enhanced hygiene practices to prevent spread of COVID-19. \nBanking institutions were required to promote digital banking and ensure that \nadequate business continuity measures were in place. \n \n65. In addition, Circular 03/2020 was issued by the Bank providing further \nguidance and measures including restructuring of facilities of customers \nnegatively affected by the pandemic. Banks were directed to ensure that \nconsideration is given only to facilities that were performing prior to the \nchallenges associated with the COVID-19. \n \n66. The banking sector has also implemented various strategies to cushion its \ncustomers and maintain stability and these include moratoria and/or reduction \nin service fees. Despite restrictions on movement during the National \nLockdown, banks ensured that the banking public continued to access banking \nservices through the medium of digital platforms. \n \n67. Banking institutions submitted their business continuity plans to the Bank and \nactivated their business continuity arrangements, which entailed banks \noperating with minimum number of staff to ensure customers continue to \naccess selected banking services. \n \n68. As institutions implemented their business continuity arrangements, banking \nhalls were temporarily closed to ensure that both customers and employees are \nprotected from the spread of the disease. As the nation moved to Level 2 of the \n51 \nCOVID-19 lockdown effective 4 May 2020, banking institutions opened most \nbranches to ensure that customers continue to access banking services. \n \n69. Further, with the recent surge in the number of COVID-19 cases, a number of \nbanking institutions are temporarily closing some branches to facilitate deep \ncleaning and disinfecting of branches and testing of staff members. Banking \nclients are being encouraged to make use of digital platforms. \n \n70. A preliminary analysis of the impact of the COVID-19 pandemic revealed \ngeneral slowdown in business volumes, constraints in meeting loan \nrepayments particularly in the MSME and informal sectors and increased costs \nattributable to the COVID-19 protection measures for both staff and clients. \n \nCapital Bank Corporation Limited (Under Provisional Liquidation) \n71. Capital Bank was placed under provisional liquidation on 30 January 2019. \nThe Provisional Liquidator is pursuing confirmation of the liquidation order, \nas well as verification of assets and liabilities of the institution. \n \n FINANCIAL INCLUSION \n72. Implementation of the National Financial Inclusion Strategy (2016 – 2020), \nthrough various initiatives targeting previously marginalized segments is now \nin its final year. The Bank is in the process of conducting a review of the first \nphase of the National Financial Inclusion Strategy (NFIS). The report, together \nwith the results of pending formal independent reviews will inform the \ndevelopment of the NFIS Phase II. \n \n73. The first phase of the Strategy implementation has come to an end at a time \nwhen the world is gripped with the COVID-19 pandemic, which is threatening \nto reverse the financial inclusion gains that had been registered particularly for \n52 \nvulnerable low-income groups. Targeted priority segments under the Strategy \nare experiencing cash flow challenges as a result of lock-down measures \nimposed to prevent the uncontrollable spread of the virus. \n \n74. The pandemic has necessitated new business models, which call for intensive \ntraining on the required new skills, including online marketing. Further, the \nunavoidable job losses are likely to result in growth of the informal sector. \nRelevant policy actors and stakeholders are urged to optimally coordinate \nefforts and render appropriate targeted support to minimise suffering of those \naffected. \n \n75. Further, the pandemic has presented an opportunity for Government to \naccelerate formalization and sustainability of the MSMEs sector during and \npost-COVID-19 period. As part of interventions to compensate for loss of \nincome during the COVID-19 lockdown periods, Government established a \nZW$18 billion economic stimulus package aimed at providing liquidity \nsupport to the productive sectors including registered micro, small and medium \nenterprises (MSMEs). \n \n76. Financial inclusion has proven to be a powerful solution in times of health and \neconomic crises hence NFIS implementing stakeholders are urged to continue \nto strengthen their efforts to financially include the vulnerable segments of our \npopulation. \n \nFinancial Inclusion Indicators \n77. Supply-side data collected by the Bank from the banking sector continues to \nreflect an upward trajectory in the levels of access to financial services by the \nlower income and under-served segments as shown in the table below. \n \n53 \nTable 14: Financial Inclusion Indicators – December 2016 to June 2020 \nIndicator \nDec 2016 \nDec 2017 \nDec 2018 \n June 2019 \nDec 2019 \nMarch \n2020 \n June \n2020 \nMSMEs \nValue of loans to MSMEs (ZW) \n$131.69m $146.22m \n$169.96m \n$178.92m \n$462.98m \n$1,457.47b \n$2,899.69b \nMSMEs loans as % of total loans 3.57% \n3.75% \n3.94% \n 2.99% \n3.92% \n4.66% \n7.65% \nNumber of MSMEs with bank \naccounts \n71,730 \n76,524 \n100,644 \n111,498 \n116,467 \n121,945 \n253,908 \nWomen \nNumber of Bank Accounts held \nby Women \n769,883 \n935,994 \n1,736,285 \n2,215,214 \n2,152,185 \n2,251,300 \n2,536,558 \nValue of Loans to Women (ZW) \n$277.30m \n$310.78m \n$432.36m \n$446.40m \n$586.74m \n$841.19m \n \n$1,183.16m \nLoans to women as a % of total \nloans \n7.52% \n7.96% \n10.57% \n10.90% \n15.59% \n4.25% \n3.12% \nYouth \nNumber of Loans to Youth \n38,400 \n61,529 \n69,421 \n154,091 \n189,658 \n144,676 \n126,002 \nValue of Loans to Youth (ZW) \n$58.41m \n$138.93m \n$104.43m \n120.68m \n$188.71m \n$669.51m \n$964.86m \nloans to the youth as a % of total \nloans \n1.58% \n3.56% \n2.55% \n5.26% \n 6.09% 3.38% \n2.55% \n \n \n78. There was, however, a notable drop in the number of loans to youth (12.91%) \nduring the quarter ending 30 June 2020, which is attributable to the COVID-\n19 induced lockdown. \n \n \n \n54 \nCREDIT INFRASTRUCTURE \nCredit Registry \n79. The Bank and credit bureaus continued to improve the credit referencing \nenvironment during the period under review. Credit reporting systems have \nbeen increasingly embraced by banks, microfinance institutions (MFIs) and \nother non-financial institutions. The Bank has successfully tested a monitoring \nmodule, which is expected to further promote credit risk management in the \nsector as lenders are automatically notified about significant changes or \nupdates on selected customers such as new facilities or repayments to other \nlenders. \n \n80. Banks and MFIs continued to utilise the Credit Registry for loan application \nscreening purposes and ongoing credit risk management during the period \nunder review, albeit with a notable decline during the month of April as the \nnational lockdown commenced. The utilisation trend for the past two years is \nindicated in Figure 14 below: \n \nFigure 14: Quarterly Credit Registry Inquiries by Banks and MFIs \n \n55 \n \n81. The Reserve Bank is continuously encouraging the banks to make use of \ntechnology when assessing credit worthiness of borrowers. One such \ntechnology is the use of Application Programming Interfaces. \n \nCollateral Registry \n82. The implementation of the Collateral Registry awaits completion of the \nprocurement process, which was delayed as a result of the COVID-19 \npandemic. \n \n83. Once implemented, the Collateral Registry is expected to enable households \nand MSME`s to leverage on their movable assets to access funding from formal \nfinancial institutions. \n \nFINANCIAL TECHNOLOGY \n84. As part of measures to promote the adoption of financial technologies, the \nBank is set to operationalise the Regulatory Sandbox Framework after a \nconsultative process with major stakeholders. The framework will be issued to \nthe market for comments before being finalised and rolled out later in the year. \n \n85. The framework will outline the qualification, application and evaluation \ncriterion for entities to be admitted into the sandbox. The sandbox provides an \nopportunity for innovators to connect to banks and other financial system \nplayers. \n \n \n \n \n \n56 \nNATIONAL PAYMENT SYSTEMS DEVELOPMENTS \n \n86. Aggregate values and volumes of national payment systems transactions for \nthe year to date ending June 2020 amounted to ZW$1 trillion and 2.5 billion, \nrespectively. \n \n87. RTGS system transactions values and volumes increased by 54% to ZW$91.3 \nbillion from ZW$59.3 billion and 36% to 0.9 million from 0.6 million in June \n2020, respectively from the previous month. \n \n88. Tables 15 and 16 below show the monthly transactional activities in the \nrespective payment streams for the preceding twelve months ending June 2020: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n57 \nTable 15: NPS Transactional Values July 2019 –June 2020 \nMONTH \n VALUES IN Z$ BILLIONS \n \n \nRTGS Card \nATM POS Mobile \nInternet \nValues \nTotal \nTotal \nChange \nJul-19 \n23.31 \n1.84 \n0.04 \n1.81 \n9.14 \n3.30 \n39.43 \nAug-19 \n23.60 \n2.22 \n0.04 \n2.18 \n11.08 \n3.49 \n42.61 \n8% \nSep-19 \n30.33 \n3.08 \n0.05 \n3.03 \n15.11 \n5.34 \n56.94 \n34% \nOct-19 \n39.41 \n3.69 \n0.07 \n3.62 \n16.59 \n6.24 \n69.62 \n22% \nNov-19 \n40.87 \n4.27 \n0.07 \n4.20 \n13.54 \n7.20 \n70.14 \n1% \nDec-19 \n49.58 \n5.79 \n0.10 \n5.70 \n19.36 \n8.72 \n89.25 \n27% \nJan-20 \n47.84 \n5.35 \n0.12 \n5.24 \n21.32 \n9.65 \n89.51 \n0% \nFeb-20 \n41.64 \n5.57 \n0.14 \n5.43 \n22.59 \n9.63 \n85.00 \n-5% \nMar-20 \n60.80 \n7.52 \n0.27 \n7.25 \n28.00 \n14.41 \n118.26 \n39% \nApr-20 \n47.53 \n4.23 \n0.08 \n4.15 \n18.30 \n11.48 \n85.77 \n-27% \nMay-20 \n59.27 \n7.78 \n0.35 \n7.43 \n24.85 \n19.59 \n119.27 \n39% \nJun-20 \n91.31 10.27 \n0.52 \n9.75 \n26.04 \n25.84 \n163.73 \n37% \nTOTAL \n555.49 61.61 \n1.83 59.78 \n225.91 \n124.90 \n1,029.53 \n \n \n \n \n \n \n58 \nTable 16: NPS Transactional Volumes (in millions) July 2019 –June 2020 \nMONTH \nRTGS \nCard \nATM \nPOS \nMobile Internet \nTotal \nVolumes \nTotal \nChang\ne \nJul-19 \n0.98 \n20.56 \n0.10 \n20.47 \n170.82 \n0.64 \n213.57 \nAug-19 \n0.87 \n22.01 \n0.09 \n21.92 \n179.86 \n0.54 \n225.28 \n5% \nSep-19 \n1.01 \n22.81 \n0.06 \n22.75 \n200.44 \n0.68 \n247.76 \n10% \nOct-19 \n1.08 \n23.26 \n0.06 \n23.19 \n206.62 \n1.10 \n255.31 \n3% \nNov-19 \n0.98 \n25.96 \n0.23 \n25.74 \n152.92 \n2.04 \n207.87 \n-19% \nDec-19 \n1.00 \n28.19 \n0.39 \n27.80 \n146.32 \n1.27 \n204.97 \n-1% \nJan-20 \n0.94 \n23.85 \n0.20 \n23.65 \n140.73 \n0.67 \n190.05 \n-7% \nFeb-20 \n0.92 \n21.85 \n0.20 \n21.65 \n149.67 \n0.65 \n194.93 \n3% \nMar-20 \n1.07 \n22.82 \n0.23 \n22.59 \n173.06 \n0.66 \n220.44 \n13% \nApr-20 \n0.52 \n11.08 \n0.04 \n11.04 \n131.19 \n1.00 \n154.86 \n-30% \nMay-20 \n0.67 \n14.94 \n0.23 \n14.71 \n150.94 \n0.71 \n182.20 \n18% \nJun-20 \n0.91 \n14.71 \n0.29 \n14.42 \n135.52 \n1.39 \n167.24 \n-8% \nTOTAL \n10.96 \n252.03 \n2.11 \n249.92 1,938.10 \n11.35 \n2,464.48 \n0% \n \n*The cheque has not been a preferred payment instrument during the COVID-\n19 lockdown period. \n \nRESERVE BANK OF ZIMBABWE \nAUGUST 2020", "source": "RBZ", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///RBZ/Monetary_Policy_Statements/MPS--MID-TERMZim.pdf"}
{"doc_id": "d216b4b5154487493cbdfdb177d3cba6", "text": "1 \n \n \n \n \n \n \n2016 MID-TERM MONETARY POLICY STATEMENT \n \nBY \nDR. J. MANGUDYA \nGOVERNOR \n \nRESERVE BANK OF ZIMBABWE \n \n \nWALK THE TALK TO RESTORE TRUST AND \nCONFIDENCE \n \n \n \n \n2 \n \nTABLE OF CONTENTS \nSECTION 1: INTRODUCTION ............................................................................................ 7 \nBACKGROUND AND CONTEXT ………………………………………………………….7 \nSECTION 2: EXTERNAL SECTOR & INFLATION DEVELOPMENTS ................... 10 \nGlobal Economic Developments ............................................................................................. 11 \nInternational Commodity Price Developments ....................................................................... 12 \nBase Metals and other commodity prices ................................................................................ 13 \nImplications of global economic developments on domestic economic activity .................... 14 \nBALANCE OF PAYMENTS DEVELOPMENTS ................................................................. 15 \nMerchandise Trade Developments .......................................................................................... 15 \nInternational Remittances ........................................................................................................ 17 \nForeign Private Capital Flows ................................................................................................. 18 \nForeign Payments …………………………………………………………………………….19 \n \nCurrent and Capital Account Developments .......................................................................... .20 \nZIMBABWE INFLATION DEVELOPMENTS……………………………………….…….22 \n \nInflation Outlook ……………………………………………………………………………..24 \n \nSECTION 3: FINANCIAL SECTOR DEVELOPMENTS ............................................... 25 \nStructure of the Banking Sector .............................................................................................. 26 \nPerformance and Condition of the Banking Sector ………………………………………….24 \n \nBanking Sector Capitalisation ................................................................................................. 25 \nBanking Sector Deposits ......................................................................................................... 26 \nBanking Sector Liquidity ........................................................................................................ 29 \nBanking Sector Loans and Advances ...................................................................................... 30 \nSectoral Distribution of Loans and Advances ..................................................................... 31 \nNon-Performing Loans ........................................................................................................ 32 \nEarnings Performance ............................................................................................................. 34 \nInterest Rates ........................................................................................................................... 35 \nPerformance of the Microfinance Sector ................................................................................. 35 \n3 \n \nLegal & Regulatory Developments ......................................................................................... 36 \nCredit Infrastructure ................................................................................................................ 40 \nCredit Reference System ......................................................................................................... 40 \nCollateral Registry and Secured Transactions ......................................................................... 41 \nBasel II Implementation .......................................................................................................... 41 \nAdoption of Implementations of IFRS and Financial Instruments…………………………..42 \n \nRecovery & Resolution Planning for Banking Institutions ..................................................... 43 \nFinancial Inclusion .................................................................................................................. 44 \nDevelopment of Policies and Guidelines ................................................................................ 45 \nPrudential Standards No. 01-2016/BSD: Agency Banking ………………………………….46 \n \nFinancial Consumer Protection Prudential Standards ............................................................. 46 \nEstablishment of SME Units and Women Desks………………………………………….....48 \n \nCollection of Disaggregated Data…………………………………………………………… 49 \n \nFinancial Inclusion of Women ……………………………………………………………….50 \n \nFinancing Model ………………………………………………………………………......…50 \n \nFinancial Inclusion Commitments under the Maya Declaration ............................................. 51 \nSECTION 4: IMPACT OF POLICY MEASURES TAKEN BY RBZ IN MAY 2016 ... 52 \nSECTION 5: POLICY MEASURES TO ENHANCE CONFIDENCE PRODUCTION .....62 \nEase of Securing Offshore Loans ............................................................................................ 62 \nIncentivising Inflows from the Diaspora & Private Unrequited Transfers ............................. 63 \nForeign Exchange/Nostro Stabilisation Facilities of US$215 Million .................................... 63 \nUS$20 Million Gold Development Initiative Facility to Support Small Scale Miners………63 \n \nInternal Devaluation to Restore Competitiveness ................................................................... 70 \nSECTION 6: POLICY ADVICE ......................................................................................... 67 \nSECTION 7: CONCLUSION AND OUTLOOK……………………..…………………..69 \nAPPENDIX I ........................................................................................................................... 77 \nThe Re-engagement Process ................................................................................................... 77 \n4 \n \nAPPENDIX II .......................................................................................................................... 79 \nRTGS and Nostro Balances in the Context of Monetary Aggregates ..................................... 74 \nAPPENDIX III …………………………………………………………………………….....83 \nUpdate on Closed Banks ………………………………………………………………….….83 \n \n \n \n \n5 \n \nLIST OF FIGURES \nFigure 1: Commodity Price Indices (2010 = 100) ..................................................................... 13 \nFigure 2: Merchandise Exports, Imports, Real GDP Growth & 990 – 2015 ............................ 16 \nFigure 3: General Merchandise Trade for Jan – Jun 2016 (US$m) .......................................... 16 \nFigure 4: Diaspora Remittances: Jan-June 2015&2016 ............................................................ 18 \nFigure 5: Annual Inflation Profile (%) ...................................................................................... 23 \nFigure 6: Trend of Banking Sector Deposits: June 2009 – June 2016(US$ millions) ............... 28 \nFigure 7: Composition of Deposits as at 30 June 2016 ............................................................. 29 \nFigure 8: Prudential liquidity ratio Dec 2013 - June 2016 ........................................................ 30 \nFigure 9: Trend of Banking Sector Loans & Advances: Dec 2011 - June 2016 ....................... 31 \nFigure10: Sectoral Distribution of Credit as at 30 June 2016 ................................................... 32 \nFigure 11:Non-Performing Loans as at 30 June 2016 ............................................................... 33 \nFigure 12: Total Electronic Payments ....................................................................................... 53 \n \n \n \n6 \n \nLIST OF TABLES \nTable 1: Global Economic Developments and Outlook (%) ..................................................... 12 \nTable 2: Comparison of Loan Approvals per Month in 2015 and 2016 ................................... 19 \nTable 3: Outgoing Foreign Payments (Jan-June 2015/2016) ……………...…………………20 \nTable 4: Balance of Payments Developments (US$) ................................................................ 22 \nTable 5: Annual Inflation rates (%) for selected SADC Countries and USA ........................... 24 \nTable 6: Key Financial Sector Indicators .................................................................................. 26 \nTable 7: Capital adequacy levels for individual banks 30 June 2016 ………………………..26 \nTable 8: Microfinance Performance Institutions: March 2015 –June 2016……………..……36 \nTable 9: Thematic Working Groupd on Financial Inclusion .................................................... 45 \nTable 10: Foreign Payments Priority List Guidelines ............................................................... 54 \nTable 11: Foreign Currency Inflows and Export Incentive Entitlements USD (5 May-4 Aug \n2016) .......................................................................................................................................... 59 \nTable 12: Gold Deliveries to Fidelity (kgs) as at 30 June 2016 ................................................ 60 \nTable 13: Zimbabwe Gosl Production (including PGMs Gold) Kgs ........................................ 64 \nTable 14: Other Policy Recommendations……………………………………………..……..69 \n \n \n \n7 \n \nSECTION 1 \nBACKGROUND AND CONTEXT \n \nThis Mid-Term Monetary Policy Statement is issued in terms of Section 46 of the \nReserve Bank Act (Chapter 22:15). The major objectives of this Statement are \nto highlight the global and domestic financial developments; to provide an \nassessment of the monetary policy measures taken by the Bank in May 2016 to \nstabilize the economy; to present new measures to restore confidence within the \neconomy; and to offer policy advice to deal with the fiscal and current account \ndeficits in order to change Zimbabwe’s economic narrative to production and \nproductivity which is very vital or imperative to restore trust and confidence \nwithin the national economy. \n \nThe policy measures presented in this Statement are designed to augment the \nmeasures taken by the Bank in May 2016. The new measures include the \nelimination of administrative hurdles of contracting offshore loans, resuscitation \nof the credit guarantee scheme to enhance local production by small to medium \nscale enterprises, putting in place nostro stabilization facilities to deal with delays \nin the remittance of outgoing foreign payments, promotion of internal devaluation \nusing market-based mechanisms to restore competitiveness in the national \neconomy, and encouraging the fast-track elimination of bottlenecks that are \nhampering the ease of doing business within the economy especially in the export \nproduction sectors. \n \nThe measures and policy advice which are well aligned to those presented by the \nHonourable Minister of Finance and Economic Development in the Mid-Term \nFiscal Review Statement are designed to deal with the structural imbalances that \ncontinue to stress the economy. The structural imbalances are evidenced by the \nlarge current account and fiscal gaps generated by the difficult internal and \n8 \n \nexternal \nconditions, \na \nlegacy \nof \ndollarisation \npolicy \ninconsistencies/contradictions, policy slippages and procrastination in the \nimplementation of critical Government policies. These imbalances are further \nexacerbated by adverse weather conditions and weak investor sentiment leading \nto the under performance of the national economy. \n \nThe under performance of the economy which started in 2012 - three years after \ndollarisation - is also greatly attributable to the legacy of policy inconsistencies/ \ncontradictions when the country went into dollarisation in March 2009, by default \nand not by design, to tame hyperinflation. This was soon after the formation of \nthe Government of National Unity in February 2009. The policy \ninconsistencies/contradictions which were secondary to the political settlement \ninclude over liberalisation of both the current and capital accounts at a time when \nthe country had very limited access to foreign finance due to debt overhang, and \nnon- conducive investment climate due to sanctions and unattractive domestic \ninvestment policies; wrong choice of trading currency and; failure to benchmark \nwith regional comparators to maintain competitiveness. \n \nIt is therefore a combination of the current internal and external imbalances and \nhistorical challenges that need to be urgently addressed for the proper functioning \nof the multi-currency exchange system that, de facto, is currently totally \ndominated by the use of US$. This situation requires the nation to do things \ndifferently and WALK THE TALK to transform the economy by changing the \nnarrative from consumption to production. The economy is hungry for production \nand productivity. With the public sector wage and salary bill being one of the \nhighest in the world at more than 90% as a share of fiscal revenue and inflation at \n-1.4% being low or in negative territory (deflation) for two years now since 2014, \nreal wages and salaries have increased, crowding out capital and social \n9 \n \nexpenditure – thus undermining the economy’s capacity to enhance employment \nand to be competitive. \n \nThe business climate, on the other hand, affected by limited access to foreign \nfinance; unfinished business on land security tenure and investment regulations; \nand high input costs, has not been conducive to attracting the much needed \ndomestic and foreign investment. In addition the increasing fiscal gap in the \nabsence of external financing has led to a decline in private sector activity and a \nreduction in domestic credit as financial institutions try to contain foreign \nexchange induced demand pressures attributable to lending activities. \n \nAs if the above harsh conditions are not enough, the economic impact of the El-\nNino induced drought also increased the need for imports to reduce food \ninsecurity, whilst the decline in mineral prices depressed export proceeds. In \naddition, amid low investor sentiment, the appreciation of the US$ induced higher \nthan expected demand for this currency, reduced remittances in US$ terms, \nespecially from South Africa and the United Kingdom (following Brexit) and \ngenerated speculation. With South Africa being Zimbabwe’s main trading partner \n- accounting for around 50% of total trade - where the rand depreciated against \nthe US$, competitiveness has also been severely eroded. \n \nWhilst efforts taken by Government to deal with the above fragile economic \nsituation have been commendable, a stronger than anticipated impact of \nexogenous shocks highlighted above continued to exacerbate the economic \nslowdown and precipitated the decline in fiscal space and the cash shortage \nsituation. \n \nWalking the Talk within the above context of weak economic conditions requires \npolicy precision and urgent implementation of necessary reform measures to \n10 \n \ntransform the economy. The process won’t be easy but must be done. It requires \nnational sacrifice, sincerity and integrity. It requires the ability to share the \nadjustment or transformation burden across the board and between the fiscal and \nmonetary policies. Reliance on one policy instrument to manage the current \nstructural imbalances would not be sustainable to transform the economy and to \nrestore trust and confidence. \n \nOverall, transforming the economy from a consumptive to a productive one \nrequires fiscal discipline, production discipline, policy discipline, and \nmessage/communication discipline (speaking with one voice) in order to achieve \nthe optimal levels of economic turnaround depicted by the following economic \nfunctional identities: \n \ni. Liquidity = f*(Exports/Forex Earnings) \nii. Exports /Import Dependence = f(Production) \niii. Production = f(Investment Climate/Incentives/ Ease of Doing Business) \niv. Investment Climate = f(Policy Measures/Policy Consistency) \n \nThe rest of this Monetary Policy Statement is organized as follows; Section 2 \ndiscusses external sector developments and their implications on domestic \neconomic activities. Section 3 looks at the status of the financial sector. Section 4 \ndiscusses the impact of policy measures introduced by the Reserve Bank in May \n2016. Section 5 provides new policy measures to enhance confidence and \nproduction in the economy. Section 6 provides policy advice and Section 7 is the \nConclusion. The Appendixes provide an update on the re-engagement, a brief \nRTGS and Nostro concepts within the context of the multicurrency exchange \nsystem and an update on closed banks. \n \n * f is read as function of \n11 \n \nSECTION 2 \nEXTERNAL SECTOR AND INFLATION DEVELOPMENTS \nGlobal Economic Developments \nGlobal economic recovery has remained fragile with adverse consequences on \ndeveloping economies like Zimbabwe. The situation has been exacerbated by the \nreferendum outcome which approved Britain’s exit (Brexit) from the European \nUnion. \n \nThe Brexit vote has deepened economic, political and institutional uncertainty \nwithin the EU, threatening the growth momentum witnessed in the first half of the \nyear. This uncertainty has negatively affected investor confidence and financial \nmarket conditions. Moreover, the bumpy adjustment in China also continues to \nundermine sustained global economic recovery. \n \nThe recent global economic developments, have compelled the International \nMonetary Fund (IMF) to downwardly revise the initial global economic growth \nprojections for 2016, by 0.1 percent, on account of the negative macroeconomic \nconsequences, especially in advanced European economies. Consequently, the \nIMF is now projecting the global economy to grow by 3.1 percent in 2016 and 3.4 \npercent in 2017. Table 1 below shows recent global economic developments and \nprojections for 2016 and 2017: \n \n \n12 \n \nTable 1: Global Economic Developments and Outlook (%) \n \nActuals \nProjections \nDiff. from April \n2016 Proj. \n \n2014 \n2015 \n2016 \n2017 \n2016 \n2017 \nWorld Output \n3.4 \n3.1 \n3.1 \n3.4 \n-0.1 \n-0.1 \nAdvanced Economies \n1.9 \n1.9 \n1.8 \n1.8 \n-0.1 \n-0.2 \n US \n2.4 \n2.4 \n2.2 \n2.5 \n-0.2 \n0.0 \n Eurozone \n0.9 \n1.7 \n1.6 \n1.4 \n0.1 \n-0.2 \n Japan \n0.0 \n0.5 \n0.3 \n0.1 \n-0.2 \n0.2 \nEmerging Market & \nD\nl\ni\nE\ni\n4.6 \n4.0 \n4.1 \n4.6 \n0.0 \n0.0 \n China \n7.3 \n6.9 \n6.6 \n6.2 \n0.1 \n0.0 \n India \n7.2 \n7.6 \n7.4 \n7.4 \n-0.1 \n-0.1 \nSub-Saharan Africa \n5.1 \n3.3 \n1.6 \n3.3 \n-1.4 \n-0.7 \n Zimbabwe \n3.8 \n1.1 \n1.2 \n5.6 \n- \n- \nLatin America & the \nCaribbean \n1.3 \n0.0 \n-0.4 \n1.6 \n0.1 \n0.1 \nSource: IMF World Economic Outlook Update (19 July 2016), Ministry of Finance and \nEconomic Development and RBZ projections \n \nGrowth in Sub-Saharan Africa is expected to decelerate from 3.3% in 2015 to \n1.6% in 2016, representing a 1.4% decline from the initial forecasts in April 2016. \nThis slowdown is primarily driven by the downturn in international commodity \nprices and Brexit fallout. Moreover, economic growth prospects for regional \neconomies, notably, South Africa, Botswana and Zambia remain vulnerable to the \ndownturn in international commodity prices and the depreciation of domestic \ncurrencies. \n \nInternational Commodity Price Developments \nInternational commodity prices have generally remained subdued over the recent \npast mainly on account of weakening growth prospects in China, the world’s \nlargest metal consumer. This notwithstanding, global commodity prices reflected \na modest recovery, albeit from a low base, during the first half of 2016 on the \n13 \n \nbackdrop of transient stabilisation of global markets. Figure 1 shows global \ncommodity indices for the period March 2009 to June 2016. \n \nFigure 1: Commodity Price Indices (2010 = 100) \n \n Source: World Bank Commodity Price Data \n \nSpecifically, gold prices firmed by 16.3%, from an average price of US$1 \n096.68/oz in January 2016 to US$1 274.99/oz in June, 2016. Similarly, platinum \nincreased by 15.3% from US$853.65/oz in January 2016 to US$984.45/oz in June, \n2016. \n \nBase Metals and other commodity prices \nBase metals recorded a steady recovery during the first half of 2016, boosted by \nproduction cuts and renewed demand. In this context, over the period January to \nJune 2016, copper and nickel prices picked by 3.7% and 4.8% to US$4 \n634.34/tonne and US$8 888.43/tonne. \n \nCrude oil prices, which declined to record low levels in January 2016, recovered \nsteadily to average US$49.83/barrel in June, 2016. Discussions among major oil \n35\n55\n75\n95\n115\n135\n155\n2009M03\n2009M06\n2009M09\n2009M12\n2010M03\n2010M06\n2010M09\n2010M12\n2011M03\n2011M06\n2011M09\n2011M12\n2012M03\n2012M06\n2012M09\n2012M12\n2013M03\n2013M06\n2013M09\n2013M12\n2014M03\n2014M06\n2014M09\n2014M12\n2015M03\n2015M06\n2015M09\n2015M12\n2016M03\n2016M06\nEnergy\nAgriculture\nBase Metals\nPrecious Metals\n14 \n \nproducers (Russia, Saudi Arabia, Venezuela and Qatar) to curtail crude \noil production shored up oil prices. \n \nAgricultural commodity prices increased by 12.5% in the first half of 2016 owing \nto the adverse effects of the El Nino weather conditions due to relatively high \ninventory levels. \n \nImplications of global economic developments on domestic economic activity \nThe effects of the weak global economy are being transmitted to the local economy \nmainly through depressed commodity prices and weakening trading partner \ncurrencies on the back of a relatively strengthening US$. \n \nThe sustained low commodity price environment, particularly for precious \nminerals and base metals have implications on the domestic economy as the \ncountry mainly depends on primary and semi-processed minerals. Weaker prices \nfor precious and base metals imply lower export revenues for Zimbabwe, while \ndepressed oil and food prices have a moderating effect on the country’s fuel and \nfood import bill. \n \nMoreover, the strengthening of the US$, coupled with sustained low commodity \nprices environment, has weakened growth prospects of the country’s major trading \npartners, notably South Africa, Botswana and Zambia. This development has \nresulted in sustained depreciation of these countries’ domestic currencies to the \ndetriment of Zimbabwe’s trade competitiveness. \n \nResultantly, the manufacturing sector in Zimbabwe has continued to lose \ncompetitive ground. The exchange rate based loss in competitiveness has \nconspired with other supply side rigidities affecting the economy to intensify the \ninflux of relatively cheaper imports into the economy. \n15 \n \nBALANCE OF PAYMENTS DEVELOPMENTS \n \nMerchandise Trade Developments \nThe economy has continued to be affected by sustained mismatches between \nexport receipts and imports as evidenced by the disproportionate import \nabsorption relative to exports especially for the period 2008-2015; a sign of weak \neconomic fundamentals and over liberalisation of current and capital accounts. \nFigure 3 shows the Zimbabwe’s merchandise exports, imports and real GDP \ngrowth over the period 1990-2015. The graph also shows the sensitiveness of the \neconomy to various shocks and vagaries, including droughts. \n \nOver the period January to June 2016, merchandise exports declined by 8.7%, \nfrom US$1,232.3 million realized in 2015 to US$1,125.0 million in the \ncorresponding period in 2016. Similarly, merchandise imports for the period \nJanuary to June 2016 amounted to US$2,496.6 million, a 14.4% decline from \nUS$2,917.1 million realized over the comparative period in 2015. \n \nFigure 2 shows monthly merchandise exports and imports development for the \nperiod January to June 2016. \n \n \n \n \n \n \n \n \n \n \n16 \n \nFigure 2: General Merchandise Trade for Jan – Jun 2016 (US$m) \n \nSource: ZIMSTAT \n \nFigure 3: Merchandise Exports, Imports, Real GDP Growth & 990 – 2015 \n \nSource: RBZ & Zimstat \n \nJan\nFeb\nMar\nApr\nMay\nJune\nExports\n249.2\n209.7\n167.1\n157.9\n165.3\n179.4\nImports\n395.4\n427.7\n478.1\n356.4\n408.4\n430.6\nTrade Balance\n-146.2\n-218\n-310.9668784\n-198.5\n-243.1\n-251.1\n-400\n-300\n-200\n-100\n0\n100\n200\n300\n400\n500\n600\nExports\nImports\nTrade Balance\n-15.5\n-10.5\n-5.5\n-0.5\n4.5\n9.5\n14.5\n0\n1000\n2000\n3000\n4000\n5000\n6000\n7000\n8000\n1990\n1991\n1992\n1993\n1994\n1995\n1996\n1997\n1998\n1999\n2000\n2001\n2002\n2003\n2004\n2005\n2006\n2007\n2008\n2009\n2010\n2011\n2012\n2013\n2014\n2015\n Exports (US$m)\n Imports (US$m)\nReal GDP Growth (%) - (RHS)\n17 \n \nThe decline in export and import performance is a reflection of the overall \nslowdown in economic activity, emanating from the drought induced contraction \nin agriculture, depressed commodity prices, suppressed capacity utilization in the \nmanufacturing sector, as well as continued difficulties in accessing external lines \nof credit. \n \nA combination of foreign currency management measures, including the \nprioritization of imports announced by the Reserve Bank in May 2016 and \nrestrictions on selected imports by the Ministry of Industry and Commerce in July \n2016, as well as the effects of a stronger US$ on the country’s terms of trade are \nexpected to lead to a 0.9% decline in the import bill in 2016. Food imports (maize \nand wheat) are, however, expected to surge owing to the El Nino induced drought \nthat ravaged the Southern African region, including Zimbabwe. \n \nContinued reliance on imports of finished goods is unsustainable as it undermines \ncurrent efforts to resuscitate domestic industrial production, leading to significant \ntrade and current account deficits. \n \nInternational Remittances \nThe continued appreciation of the US$ against regional currencies has also \naffected the dollar denominated value of remittance inflows, particularly from \nSouth Africa, which have over the years been a significant source of foreign \ncurrency in the country. The weakening of the South African rand against the US$, \nimply that Zimbabweans who are in South Africa are no longer in a position to \nsend the same amount of money in US$ they used to remit back home. The rand \nvalue remittances have gone down in US$ terms. \n \nThis is evident from the decline in diaspora remittances of 13% from US$457.9 \nmillion for the period January to June 2015 to US$397.3 million in the \n18 \n \ncorresponding period in 2016. This development has, therefore, affected general \nmarket liquidity in the economy with adverse effect on aggregate demand and \nsustained economic recovery. \n \n Figure 4: Diaspora Remittances: January to June 2015 & 2016 \n \n \n \nSource: RBZ \n \nForeign Private Capital Flows \nPrivate sector offshore external loans have been an integral source of liquidity in \nthe economy since adoption of the multi-currency exchange system in 2009. These \nloans, as opposed to equity injection, have mostly been utilized for working capital \nand capitalization. \n \nIn the period from January 2016 –June 2016, the Bank approved and registered a \ntotal of 156 facilities with a monetary value of US$976.4 million. As is the norm, \nthe agriculture sector has the highest contribution of 49% which is mostly buoyed \nby the tobacco sector. A comparison with the same period in 2015 shows that as \n0\n100\n200\n300\n400\n500\nJan-June 2016\nJan-June 2015\nRemittances (US$M)\n75.9\n76.5\n78.9\n76.0\n80.3\n70.1\n62.9\n62.6\n67.4\n70.8\n63.2\n70.4\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\n80.0\n90.0\nJan\nFeb\nMar\nApr\nMay\nJun\nMonthly Remittances (US$M)\n2015\n2016\n19 \n \nat 30 June 2015, a total of 185 facilities had been approved with total monetary \nvalue of US$1.2 billion. \n \nIt is evident that due to the perceived unfavourable investment climate in \nZimbabwe, investors have since devised a method to mitigate this perceived risk \nby using loans to finance their investments in the country as opposed to equity \nfinancing. This is also particularly true for some significant investors who have \nresorted to using the Engineering Procurement and Construction (EPC) model of \ninvestment as opposed to cash injection or equity into Zimbabwe like what they \ndo in other countries such as Angola, Ethiopia, Mozambique, Zambia and Nigeria. \nTable 2 below shows monthly private sector loan approvals for 2015 and 2016. \n \n Table 2: Comparison of Loan Approvals per Month in 2015 and 2016 \n2016 \n2015 \nMonth \nNumber of \nFacilities \nApproved \nAmount (USD \nMillions) \nNumber \nof \nFacilities \nApproved \nAmount (USD \nMillions) \nJanuary \n28 \n27.4 \n18 \n98.8 \nFebruary \n21 \n133.1 \n28 \n129.8 \nMarch \n29 \n126.6 \n52 \n170.4 \nApril \n18 \n73.9 \n31 \n373.9 \nMay \n23 \n427.5 \n24 \n111.3 \nJune \n39 \n187.8 \n32 \n278.5 \nTOTAL \n158 \n976.4 \n185 \n1,162.7 \nSource: RBZ \n \nForeign Payments \nFor the period January to 30 June 2016, banks processed, on a cashflow basis, total \noutgoing payments amounting to US$2.7 billion. This represents a 24% decline \nfrom US$3.5 billion for the same period in 2015. \n \nAll categories of outgoing foreign payments as indicated in Table 3 experienced \ndecreases. This is attributable to the limited foreign exchange reserves within the \n20 \n \neconomy and the positive effect of the import compression policies which promote \nthe importation of critical goods and services not available on the local market. \n \nTable 3: Outgoing Foreign Payments (Jan-June 2015/2016) \nCategory \n2016 \n2015 \nVariance \nShare \n2016 \nShare \n2015 \nConsumption Goods \n667 \n851 \n-22% \n25% \n24% \nCapital & Intermediate \nGoods \n650 \n777 \n-16% \n24% \n22% \nFuel & Electricity \n356 \n514 \n-31% \n13% \n15% \nService Payments \n580 \n656 \n-11% \n22% \n19% \nCapital and Income \nPayments \n418 \n716 \n-42% \n16% \n20% \nTotal Outflows \n2,672 \n3,515 \n-24% \n100% \n100% \nSource: RBZ \n \nCurrent and Capital Account Developments \nThe current account deficit is projected to narrow down, from a deficit of \nUS$1,519 million in 2015, to a deficit of US$1,069 million in 2016, partly on \naccount of the projected decline in the import bill. The projected decline in imports \nin 2016 is mainly a result of the various measures being implemented to compress \nimports as well as the economic slowdown which has reduced the country’s import \nabsorptive capacity. \n \nA sustained current account deficit poses significant challenges as the country \nrelies on export revenues to generate liquidity to support domestic economic \nactivity. In this regard, the need to attract both domestic and foreign investment to \nrejuvenate industry and generate adequate foreign exchange reserves to cushion \n21 \n \nthe economy from external vulnerabilities, remains integral to economic revival \nefforts. \n \nThe capital and financial account balance is also projected to decline from a \nsurplus of US$1,632 million in 2015 to a surplus of US$845 million in 2016, as a \nresult of the projected decline in private sector offshore loans. The projected \ndecline in private sector offshore loans reflects the reduced absorptive capacity of \nthe private sector in concomitance with weakening economic activity. \n \nForeign direct investment (FDI) into the country is also projected to decline in \n2016. This underscores the need to build investor confidence to attract foreign \ncapital which is critical for growth. \n \nThe overall balance of payments position is projected to deteriorate from a deficit \nof US$25.8 million in 2015 to a deficit of US$224.0 million in 2016. Table 4 \nbelow shows balance of payments developments and projections for 2016. \n \n \n \n \n \n \n \n \n \n \n \n \n \n22 \n \nTable 4: Balance of Payments Developments (US$ million) \n \n2012 \n2013 \n2014 \n2015 \n2016 \n \nActual \nActual \nActual \nEstimate \nProjection \nCurrent Account \nBalance \n \n-1,838.9 \n \n-2,539.2 \n \n-2,247.5 \n \n-1,519.4 \n \n-1,069.2 \nTrade Balance \n \n-2,706.3 \n \n-2,947.1 \n \n-2,589.1 \n \n-2,448.1 \n \n-1,890.4 \nExports F.O.B \n \n4,004.0 \n \n3,861.8 \n \n3,717.2 \n \n3,614.2 \n \n3,551.7 \n Agriculture \n979.6 \n1,047.5 \n981.2 \n1,015.9 \n911.4 \n Mining \n2,384.9 \n2,223.3 \n2,113.4 \n2,089.2 \n2,133.2 \nManufacturing \n549.2 \n487.0 \n532.8 \n417.1 \n412.8 \nImports F.O.B \n \n6,710.2 \n \n6,808.9 \n \n6,306.3 \n \n6,062.3 \n \n5,442.1 \nFood \n730.6 \n658.1 \n352.3 \n586.3 \n629.1 \nFuel \n1,365.7 \n1,364.7 \n1,393.6 \n1,460.9 \n1,455.9 \nCapital Account \nBalance \n \n1,515.0 \n \n1,687.6 \n \n2,095.8 \n \n1,632.3 \n \n845.2 \nErrors And Omissions \n-111.3 \n656.2 \n111.5 \n-138.6 \n0.0 \nOverall Balance \n-435.3 \n-195.4 \n-40.3 \n-25.8 \n-224.0 \nSource: RBZ, Ministry of Finance & Zimstat \n \nWithin the context of the multiple currency system, monetary and liquidity \ndevelopments in the country remain closely linked to developments on the balance \nof payments. The external sector is a critical source of liquidity in the economy \nand it is against this backdrop that the Bank introduced the export incentive \nscheme to boost the country’s export earnings, which have been a significant \nsource of liquidity. \n \nZIMBABWE INFLATION DEVELOPMENTS \n \nAnnual headline inflation remained in the negative territory, albeit accelerating \nfrom -2.19% in January 2016 to -1.4% in June 2016. The continued decline in \nprices in 2016 was driven by both food and non-food inflation, underpinned by \n23 \n \nthe sustained depreciation of the South African rand; subdued international oil \nprices; and waning domestic demand. Figure 5 below shows the annual headline \ninflation profile for the period January 2014 to June 2016. \n \nFigure 5: Annual Inflation Profile (%) \nSource: Zimstat, July 2016 \nAnnual food inflation which averaged -4% over the period January to June 2016, \nwas weighed down by declines in the prices of meat; bread and cereals; milk, \ncheese and eggs; oils and fats; and vegetables, among others, owing to improved \nsupplies and competition from cheaper imports. \n \nDeclines in prices of housing, water, electricity, gas and other fuels; furniture and \nhousehold equipment; transport; clothing and footwear among others, however, \ncontinued to weigh down on non-food inflation, which remained in the negative \nduring the period under review. \n \nEducation is the only sector that registered significant increases during the last 12 \nmonths under the non-food category. \n-4\n-3.5\n-3\n-2.5\n-2\n-1.5\n-1\n-0.5\n0\n0.5\n1\nJan-14\nFeb-14\nMar-14\nApr-14\nMay-14\nJun-14\nJul-14\nAug-14\nSep-14\nOct-14\nNov-14\nDec-14\nJan-15\nFeb-15\nMar-15\nApr-15\nMay-15\nJun-15\nJul-15\nAug-15\nSep-15\nOct-15\nNov-15\nDec-15\nJan-16\nFeb-16\nMar-16\nApr-16\nMay-16\nJun-16\n(%)\n24 \n \nZimbabwe’s inflation remains the lowest and the only one in the negative territory \nin the SADC region, as shown in Table 5 below. \n \nTable 5: Annual Inflation rates (%) for selected SADC Countries and USA \n \nZimbabwe SA \nBotswana Mozambique Tanzania Zambia Malawi USA \nJan-2016 \n-2.2 \n6.2 \n2.7 \n11.3 \n6.5 \n21.8 \n23.5 \n1.4 \nFeb-2016 \n-2.2 \n7.0 \n3.0 \n12.2 \n5.6 \n22.9 \n23.4 \n1.0 \nMar-2016 \n-2.3 \n6.3 \n3.0 \n13.6 \n5.4 \n22.2 \n22.1 \n0.9 \nApr-2016 \n-1.6 \n6.2 \n2.8 \n17.3 \n5.1 \n21.8 \n20.1 \n1.1 \nMay-2016 \n-1.7 \n6.1 \n2.8 \n18.3 \n5.2 \n21.3 \n21.5 \n1.0 \nJun-2016 \n-1.4 \n6.3 \n2.7 \n19.7 \n5.5 \n21.0 \n22.6 \n1.0 \n \nSource: Country Central Bank Websites, 2016 \n \nInflation Outlook \nInflation is expected to remain broadly subdued in 2016. On one hand, the \npersistent weakening of the South African rand against major currencies, coupled \nwith the low aggregate demand, are likely to continue exerting further downward \npressure on domestic prices. \n \nOn the other hand, the anticipated increase in electricity and communication \ntariffs, the upward movements in food prices emanating from the drought induced \nfood shortfalls, and the resurgence of oil prices experienced since mid-January \n2016, if sustained, are expected to induce inflationary pressures in the economy. \n \nIn addition measures taken by the Central Bank, including the prioritization of \nimports, are expected to restrict the importation of cheap finished goods and are \nlikely to have a positive impact on inflation in the medium term \n \n25 \n \nSECTION 3 \nFINANCIAL SECTOR DEVELOPMENTS \nStructure of the Banking Sector \nThe banking sector is composed of 14 operating commercial banks, including \nPOSB, 4 building societies, 4 deposit taking microfinance and 164 credit only \nmicrofinance institutions. The sector has demonstrated remarkable resilience on \nthe back of a strong solvency position, largely due to proactive supervisory \ninterventions by the Reserve Bank to, inter-alia, ensure that banks have adequate \nand high quality capital; cleanse the banking sector of toxic assets and weak banks. \n \nNational Building Society Limited (NBS) commenced operations on 18 May \n2016. With an estimated 1.5 million people on the national housing waiting list, \nthe entry of an additional player is expected to boost the provision of housing, \nespecially to low income groups and other vulnerable members of society. \n \nFurther to the provision of housing loans by building societies, commercial banks \nhave also scaled up their mortgage lending activities since 2014. As at 30 June \n2016, six (6) commercial banks, including POSB, were offering mortgage finance, \nwith tenors ranging from 10 to 20 years. Meanwhile, Lion Microfinance Limited \nwas licenced on 31 May 2016, bringing the number of licensed deposit-taking \nmicrofinance institutions to four (4). \n \nPerformance and Condition of the Banking Sector \n \nTable 6 below shows the trend of the financial soundness indicators for the sector \n \n \n \n \n26 \n \n Table 6: Key Financial Sector Indicators \nKey Indicators \nJune -15 \nDec -15 \nMar -16 \nJun-16 \nTotal Assets (US$b) \n$7.59 \n$7.83 \n$7.79bn \n $8.01 \nTotal Loans (US$b) \n$3.97 \n$3.87 \n$3.81bn \n$3.73 \nNet Capital Base (US$b) \n$1.01 \n$1.14 \n$1.16bn \n$1.21 \nCore Capital (US$m) \n$899.10 \n$982.5 \n$976.25m \n$1.04 \nTotal Deposits (US$b) \n$5.45 \n$5.62 \n$5.67bn \n$5.91 \nNet Profit (US$m) \n$34.01 \n$127.47 \n$38.54m \n$67.79 \nReturn on Assets \n0.63% \n2.11% \n0.42% \n0.98% \nReturn on Equity \n3.26% \n10.96% \n2.79% \n5.54% \nCapital Adequacy Ratio \n19.68% \n21.31% \n22.34% \n23.28% \nLoans to Deposits \n72.84% \n68.86% \n67.19% \n63.11% \nNon-Performing Loans \nRatio \n14.25% \n10.82% \n10.81% \n10.05% \nLiquidity Ratio \n44.95% \n45.35% \n48.96% \n52.47% \nCost to Income Ratio \n90.76% \n84.40% \n86.30% \n84.25% \n Source: RBZ \n \nBanking Sector Capitalization \nThe banking sector’s aggregate core capital increased by 5.80% from US$982.50 \nmillion as at 31 December 2015 to US$1.04 billion as at 30 June 2016, on the back \nof improved earnings performance. \n \nThe banking sector average capital adequacy and tier 1 ratios of 24.17% and \n21.51% as at 30 June 2016, respectively, were above the minimum required capital \nadequacy and tier 1 ratios of 12% and 8%, respectively. As at 30 June 2016, all \nbanking institutions were adequately capitalized and in compliance with \nprescribed minimum capital requirements as shown in Table 7 below. \n27 \n \n \nTable 7: Capital adequacy levels for individual banks 30 June 2016 \nInstitution \n \nCOMMERCIAL BANKS \nCore Capital \nas at 30 June \n2016 (US$ \nPrescribed \nMinimum Capital \nrequirements (US$ \nCBZ Bank* \n212.72 \n25 \nStanbic Bank \n96.47 \n25 \nBANC ABC \n65.58 \n25 \nStandard Chartered Bank \n59.96 \n25 \nZB Bank \n53.82 \n25 \nSteward Bank \n49.76 \n25 \nBarclays Bank \n49.71 \n25 \nEcobank \n48.67 \n25 \nNMB Bank \n45.16 \n25 \nFBC Bank \n43.01 \n25 \nMBCA Bank \n41.56 \n25 \nMetbank \n39.45 \n25 \nAgribank \n34.49 \n25 \nBUILDING SOCIETIES \n \n \nCABS Building Society \n92.29 \n20 \nFBC Building Society \n37.48 \n20 \nNational Building Society \n22.37 \n20 \nZB Building Society** \n15.97 \n20 \nSAVINGS BANK \n \n \nPOSB \n34.15 \n \n*includes CBZ Building Society **Society being merged with ZB Bank \n \nMost banking institutions have set deadlines to comply with the December 2020 \ncapital requirements, largely through increased recapitalization of retained \nearnings, following improvement in asset quality and subsequent decrease in loan \nloss provisions. As at 30 June 2016, six (6) other institutions had core capital levels \nabove US$50 million. \n \nBanking institutions are therefore urged to continue with the recapitalisation \ninitiatives and consolidate the gains recorded to date. The Reserve Bank will \n28 \n \ncontinue to monitor progress towards compliance with the 2020 minimum capital \nrequirements. \n \nBanking Sector Deposits \nTotal banking sector deposits increased by 5.2% to US$5.9 billion as at 30 June \n2016, from US$5.6 billion as at 31 December 2015. Figure 6 below shows the \ntrend of banking sector deposits over the period 30 June 2009 to 30 June 2016. \n \nFigure 6: Trend of Banking Sector Deposits: June 2009 – June 2016(US$ \nmillions) \n \n \n \nThe composition of total banking sector deposits as at 30 June 2016 under Figure \n7 below \n \n \n \n \n705.76\n1 363.67\n2 567.61\n3 376.34\n4 410.92\n4 728.07\n5 056.75\n5 623.00\n5 672.98\n5 912.80\n0\n400\n800\n1200\n1600\n2000\n2400\n2800\n3200\n3600\n4000\n4400\n4800\n5200\n5600\n6000\n6400\n30-Jun-09\n31-Dec-09\n31-Dec-10\n31-Dec-11\n31-Dec-12\n31-Dec-13\n30-Dec-14\n31-Dec-15\n31-Mar-16\n30-Jun-16\nSource: RBZ \n29 \n \nFigure 7: Composition of Deposits as at 30 June 2016 \nSource: RBZ \n \nDuring the period January to June 2016 however, the banking sector was exposed \nto cash shortages largely as a result of macroeconomic challenges facing the \ncountry, including lack of fiscal space and the current account deficit. \n \nBanking Sector Liquidity \nThe banking sector average prudential liquidity ratio, at 52.47% as at 30 June \n2016, was above the regulatory minimum requirement of 30%. Eighteen banks \nwere compliant with the prudential liquidity ratio as at 30 June 2016. Figure 8 \nshows the trend in the banking sector average prudential liquidity ratio since \nMarch 2014. \n \n \n \n \nDemand Deposits\n50.75%\nInterbank Deposits\n12.50%\nTime Deposits\n22.33%\nSavings Deposits\n5.84%\nForeign Deposits\n5.20%\nOther Deposits\n3.37%\n30 \n \nFigure 8: Prudential liquidity ratio Dec 2013 - June 2016 \nSource: RBZ \n \nNotwithstanding the high average prudential liquidity ratio, the banking sector \nhas been experiencing cash challenges. The worsening trade deficit and an \ninclination towards holding and externalising physical cash have continued to \ndrain cash from the economy, and the adverse effects are transferred to the \nbanking sector manifesting in cash shortages at banking institutions. \n \nIn response to this liquidity constraint, the Reserve Bank adopted a number of \npolicy measures to ameliorate the cash challenges including importing cash, \nthe promotion of the usage of plastic money and the use of other currencies \nwithin the multi-currency basket and cash withdrawal limits. \n \nBanking Sector Loans and Advances \nBanking sector loans and advances declined from $4 billion as at 30 June 2015 \nto US$3.7 billion as at 30 June 2016, largely as a result of cautious and prudent \nlending measures by banking institutions in response to the operating \nenvironment that requires banks to contain foreign exchange induced demand \n38.56\n38.08\n40.86\n39.99\n37.18\n36.61\n38.14\n43.13\n45.43\n49.63\n52.47\n25\n30\n35\n40\n45\n50\n55\nDec-13\nMar-14\nJun-14\nSep-14\nDec-14\nMar-15\nJun-15\nSep-15\nDec-15\nMar-16\nJun-16\n31 \n \npressures attributable to lending activities. Disposal of non-performing loans \nto ZAMCO has also significantly contributed to the reduction in the banks’ \nloan portfolios. \n \nFigure 9 below shows the trend of banking sector loans and advances from 31 \nDecember 2011 to 30 June 2016. \n \nFigure 9: Trend of Banking Sector Loans & Advances: Dec 2011 - June 2016 \n \nSource: RBZ \n \nSectoral Distribution of Loans and Advances \nLending to individuals, manufacturing and agriculture continued to dominate the \nbanking sector loan portfolio during the first half of 2016, as shown in Figure 10. \nIt is important to note that some of the lending to individuals is for business \npurposes, especially agricultural activities. \n2 761.39 \n3 471.89 \n3 701.11 \n4 008.81 \n4 060.00 \n3 942.94 \n3 999.35 \n3 872.39 \n3 810.47 \n3 729.77 \n 1 500.00\n 2 000.00\n 2 500.00\n 3 000.00\n 3 500.00\n 4 000.00\n 4 500.00\nDec-11\nMar-…\nJun-12\nSep-12\nDec-12\nMar-…\nJun-13\nSep-13\nDec-13\nMar-…\nJun-14\nSep-14\nDec-14\nMar-…\nJun-15\nSep-15\nDec-15\nMar-…\nJun-16\nUS$ millions \n32 \n \n \nFigure 10: Sectoral Distribution of Credit as at 30 June 2016 \n \nSource: RBZ \n \nThe Reserve Bank is pleased to note that banks have scaled up their funding \nsupport to Micro, Small and Medium Scale Enterprises (MSME) in line with the \nBank’s guidelines. The measures aimed at increasing support to the MSME sector \ninclude MSME funding targets for achievement over a 3 to 5 year period, \nestablishment of dedicated MSME Business Units and provision of training in \nareas such as entrepreneurship and human resources management. These \ninitiatives will go a long way in ensuring that the sector is adequately supported \nand realises its full potential. \n \nNon-Performing Loans \nThere has been an improvement in the level of banking sector non-performing \nloans (NPLs) to 10.05% as at 30 June 2016, from 10.82% as at 31 December 2015 \nAGRICULTURAL \n15.05%\nMANUFACTURING \n15.38%\nSERVICES\n10.13%\nINDIVIDUALS\n16.57%\nMINING\n12.04%\nDISTRIBUTION\n12.07%\nCONSTRUCTION\n1.27%\nFINANCIAL SERVICES\n1.99%\nSTATE\n0.52%\nOTHER \n14.98%\n33 \n \nand a peak of 20.45% as at 30 September 2014. Figure 11 below shows the trend \nin NPLs from 2011 to 30 June 2016. \n \nFigure 11: Non-Performing Loans as at 30 June 2016 \n \nSource: RBZ \n \nThe declining trend in NPLs is a reflection of the successful efforts by banks to \nreduce their exposure to non-performing assets, including strengthening of credit \nrisk management systems and intensified collections and workout plans, among \nothers. \n \nThe establishment of ZAMCO in 2014 also paved way for banking institutions to \nhive off non-performing assets to the asset management company and free up the \nbalance sheet to underwrite more business. ZAMCO continues to discharge its \nmandate of purchasing qualifying NPLs from banking institutions, with a total of \nUS$528.4 million worth of loans purchased as at 30 June 2016. \n \n7.55%\n13.46%\n15.92%\n20.45%\n15.91%\n14.27%\n10.82%\n10.81%\n10.05%\n0%\n5%\n10%\n15%\n20%\n25%\n2011\n2012\n2013\nSep-14\nDec-14\nSep-15\nDec-15\nMar-16\nJun-16\nLevel of NPL Ratio\n34 \n \nIn the Monetary Policy Statement of July 2015, the Reserve Bank set target \nthresholds for banking institutions to reduce non-performing loans to 10% and 5% \nin June 2016 and December 2016, respectively. I am pleased to advise that as at \n30 June 2016, significant progress has been made in meeting the NPL ratio targets, \nwith 13 out of 19 banking institutions, having met the June 2016 target of 10%. \nFive (5) banking institutions were already within the December 2016 target of 5%. \nThe remaining banks are instituting various measures to improve the quality of \ntheir credit portfolio. \n \nIt is envisaged that the gradual decline in interest rates, enhancement of credit \ninfrastructure (establishment of credit reference system and collateral registry) and \nongoing macroeconomic stabilization measures, should result in further \nimprovement in banks’ asset quality. Further, it is anticipated that, with a credit \nreference system, interest rates charged to borrowers will be reflective of their risk \nprofiles and there will no longer be any justifiable basis for banks to charge high \nrisk premiums to compensate for lack of credit information. \n \nEarnings Performance \nNotwithstanding the adverse operating macroeconomic environment, the banking \nsector has remained profitable, recording an aggregate net profit of US$68.0 \nmillion for the period ended 30 June 2016, from US$34.0 million in the \ncorresponding period in 2015. Seventeen out of eighteen operating banking \ninstitutions recorded profits during the period ended 30 June 2016. \n \nThe increase in profitability was largely driven by lower loan loss provisions, in \nline with improving asset quality, lower interest expenses, as well as continued \nrealignment of cost structures at most institutions. Banking institutions are taking \nvarious measures to enhance their earnings capacity through embracing \n35 \n \ntechnology in banking which is more cost efficient than traditional approaches to \nbanking. \n \nInterest Rates \nAs part of measures to instill confidence in the banking sector, stabilize and \nstimulate the economy, the Reserve Bank has been engaging the banking sector to \nreduce lending interest rates to a maximum of 15% agreed in May 2016. To that \nend, I am pleased to report that most banking institutions have heeded the call \nresulting in a continued decline in lending rates, however, there some banks which \nare still lending at rates above the 15% agreed threshold. These banks are urged \nto reduce their lending rates to levels below the threshold. \n \nThe Reserve Bank continues to monitor the levels of lending rates through \nongoing supervisory activities, while banking institutions are required to \nadequately disclose and communicate the effective lending rates to their \nborrowers. The envisaged lower interest rate environment will go a long way in \nreducing the cost of capital and thus improve the competitiveness of our products \non the international markets. \n \nPerformance of the Microfinance Sector \nTotal loans for the microfinance sector as at 30 June 2016 were $183.4 million, a \nmarginal decline from $187.2 million as at 31 December 2015. The trend in the \nperformance indicators of credit only microfinance institutions is as indicated on \nTable 8. \n \n \n \n \n \n36 \n \n \nTable 8: Performance of Microfinance Institutions: March 2015 –June 2016 \n \nMar 15 \nJun 15 \nSep 15 \nDec 15 \n Jun 16 \nNumber of \nlicensed \ninstitutions \n143 \n147 \n155 \n152 \n164 \nTotal loans \n$163.53 m $162.20 m \n$173.31 m \n$187.16 m \n$183.40 m \nTotal Assets $202.58 m $208.76 m \n$207.74 m \n$225.13 m \n$250.97 m \nPortfolio at \nRisk \n(PaR>30 \ndays)* \n12.05% \n13.31% \n9.05% \n10.72% \n9.88% \nNumber \nof \nActive \nClients \n189,028 \n224,300 \n198,371 \n202,242 \n251,553 \nNumber \nof \nOutstanding \nLoans \n195,641 \n281,547 \n224,055 \n262,627 \n285,466 \nNumber \nof \nBranches \n499 \n495 \n475 \n571 \n600 \n Source: RBZ \n \nAs at 30 June 2016, the microfinance sector was highly concentrated, with the top \n20 microfinance institutions controlling 86.97% of total microfinance sector loans. \nWhile productive lending is still below consumptive lending, the sector has \nregistered notable re-orientation of the microfinance lending portfolios towards \nproductive lending. Consumptive lending declined from 70.9% of total loans in \n2013 to 54.0% as at 30 June 2016. \n \nLegal & Regulatory Developments \nThe Banking Amendment Act No. 12 of 2015 which was gazetted on 13 May 2016 \nseeks to enhance financial sector stability and boost market confidence. The new \nregulatory framework encompasses a comprehensive framework that will promote \n37 \n \nconsumer protection, enhance corporate governance and risk management within \nbanking institutions, as well as, facilitate speedy resolution of problem banks \nthrough enhanced authority of the Reserve Bank to deal with problem banks. \n \nThese measures are expected to build and maintain investors, depositors and \npublic confidence in the banking sector thereby promoting financial stability, \ngrowth, efficiency and innovation over the long term. \n \nIn line with internationally recognized principles of consumer protection and \nefforts to enhance market conduct, the consumer protection provisions now call \nfor more transparency and disclosure requirements and will promote equitable and \nfair treatment of consumers. This will promote responsible conduct by banking \ninstitutions including protection against abuse of deposits and depositors by \nprovision of a complaints handling mechanism. The new law is expected to \npromote confidence in the banking sector, increase access to financial products \nand services, as well as, enhance fair competition among financial service \nproviders. \n \nDirectors of banking institutions and principal officers would now be held \naccountable and answerable for their actions. The Banking Act now calls for more \nenhanced oversight by the shareholders, directors and principal officers. The \nfitness and probity criteria is now specifically provided in the law. Directors, \nprincipal officers and shareholders are required to be vetted for fitness and probity \nprior to appointment. The law now specifically requires independent directors to \nbe in the majority on the board as this allows for more checks and independent \nthought. \n \nThe Banking Act now clearly lays out statutory duties of directors. The directors \nduties were previously only provided for in the Companies Act [Chapter 24:03] \n38 \n \nand are now also specifically provided for in the Banking Act. Any disregard of \nthe corporate governance requirements or violations of the law which lead to loss \nof money by depositors will result in the directors being held personally liable for \ntheir actions and decisions. The new law helps boost confidence in the sector as \nconsumers are assured that any loss that they may suffer as a result of directors’ \ndisregard of the law will be recovered from the said directors. \n \nPrevious delays in the resolution of troubled banks left many depositors severely \nprejudiced due to the loss in value of their deposits. This significantly contributed \nto the erosion of public confidence in the banking sector. The new amendments \nprovide a detailed framework on problem bank resolution, which empowers the \nReserve Bank to swiftly resolve problem banking institutions in the public interest \nand also places responsibilities on the Reserve Bank to protect assets of depositors \nduring resolution. Further, these provisions enhance the stability of the financial \nsystem. \n \nAnother safety net measure for the depositors is the Deposit Protection \nCorporation (DPC) whose capacity will be enhanced so that it can participate more \neffectively in problem bank resolution. The turnaround time for the paying out to \nsmall depositors has been restricted to 60 days and pay-outs to small depositors \nwill also be increased to US$ 1,000. The delays tied to the timelines in the \nliquidation and winding up processes have now been streamlined, which will \nresult in the winding up process of a banking institution being resolved speedily. \n \nThe Reserve Bank expects a strict culture of compliance and shall be monitoring \nand enforcing strict compliance with the new legal framework. The Banking Act \nrequires banking institutions to have stand - alone risk management committees \nand an independent compliance function. Banking institutions with controlling \ncompanies are required to register the bank holding companies. The Reserve \n39 \n \nBank is developing registration requirements for controlling companies and the \nrequisite statutory instrument will be gazetted in due course. \n \nFor a director, the tenure of appointment to the board of a banking institution is a \ncontinuous period of 10 years, such a director will not be eligible for \nreappointment to the board, unless at least 5 years have elapsed since he last served \non that board. \n \nBanking institutions are also required to submit their plans to comply with the \nnew requirements in respect of any director who may have served in excess of ten \nyears to date. Further, banking institutions should take a cue from the new limit \nof ten years and make suitable arrangements to facilitate rotation of directors and \nintroduction of fresh minds and perspectives in the interests of the banking \ninstitution. \n \nIn respect of section 19(1) (a) and (b) of the Banking Act on the number of other \ndirectorships, the Reserve Bank confirms that the law now places restrictions on \nthe number of directorships to three. An affected director may, however, bring \nthemselves within compliance by reducing the said number of other directorships. \n \nIn respect of those who are affected and will not be able to bring themselves within \ncompliance, banking institutions are required to provide the Reserve Bank with \nsuch information and dates on which their terms of office will be coming to an end \nor when they are next due for appointment by shareholders at the institution’s \nannual general meeting. \n \nIn respect of insider loans, the Reserve Bank confirms that in terms of section \n35(3) of the Banking Act, as read with section 35(10) of the Banking Act, no new \ninsider loans may be granted before the maximum amount to be prescribed in \n40 \n \nterms of section 35(3) of the Banking Act has been so prescribed. This will also \nbe prescribed in due course. \n \nCredit Infrastructure \nRobust credit infrastructure is critical for efficient operation of financial systems. \nBy definition credit infrastructure is the set of laws and institutions that enable \nefficient and effective access to finance, stability, and socially responsible \neconomic growth. The key elements of an effective credit infrastructure are credit \nreference systems; secured transactions & collateral registries; and insolvency and \ndebt resolution frameworks. \n \nThe Reserve Bank in collaboration with Government has been seized with reforms \naimed at enhancing the efficient operations of financial markets. The current \ninitiatives to enhance credit infrastructure is expected to reduce the level of \ninformation asymmetry thus unlocking the potential for thousands of businesses \nto borrow, invest and grow. In addition, credit infrastructure is expected to reduce \nthe cost of credit thus lowering the cost of doing business and promoting price \ncompetitiveness and production. \n \nCredit Reference System \nThe Reserve Bank is pleased to advise that the Banking Amendment Act \nempowering the Reserve Bank to establish a credit registry, license and supervise \nprivate credit bureaus was promulgated on 13 May 2016. The amendment also \nempowers the credit registry to collect credit information from participating \ninstitutions including non-regulated credit providers and utility bodies. \n \nSubsequent to the announcement in the January 2016 Monetary Policy Statement, \nrelating to the acquisition of Credit Registry system, a number of milestones have \nbeen achieved. I am pleased to announce that the deployment process of the credit \n41 \n \nregistry has commenced. Meanwhile, with effect from 29 August 2016, all \nbanking institutions started providing credit test data to the Reserve Bank. \n \nThe Reserve Bank will ensure that the credit registry system is stabilized before \nreports are generated for the market. It is anticipated that the deployment of the \ncredit registry system will be completed by 30 September 2016. \n \nCollateral Registry and Secured Transactions \nThe Reserve Bank is pleased to advise that a robust legal and regulatory \nframework for the collateral registry has been developed in collaboration with the \nMinistry of Finance & Economic Development and the World Bank. The Movable \nProperty Security Interest Bill seeks to empower the Reserve Bank to establish a \nCollateral Registry and includes provisions on: \na) the creation of security interests; \nb) perfection of security interests; \nc) priority of security interests; and \nd) enforcement of security interests. \n \nIt is anticipated that the Bill will be presented to the legislature in the last quarter \nof 2016. The establishment of the collateral registry will go a long way in assisting \nmembers of the public who were unable to access credit and other banking \nfacilities for lack of immovable security. \n \nBasel II Implementation \nThe Reserve Bank has circulated for comments a guideline on the minimum \nsupervisory expectation on the structure and coverage of Internal Capital \nAdequacy Assessment Process (ICAAP) reports. The guidance outlines key areas \nto be covered in ICAAP reports, including governance arrangements, strategy and \n42 \n \nrisk appetite, risk analysis, stress testing and scenario analysis, capital planning \nand forecasting, as well as quality assurance and adoption of the ICAAP. \n \nAdoption and Implementation of IFRS 9: Financial Instruments \nFurther to my January 2016 Monetary Policy Statement regarding the adoption \nand implementation of International Financial Reporting Standards (IFRS), I \nwould like to advise that the Reserve Bank in collaboration with the Public \nAccountants & Auditors Board (PAAB) and Institute of Chartered Accountants \nZimbabwe (ICAZ) are working on a roadmap for the implementation and adoption \nof IFRS 9: Financial Instruments, whose mandatory effective date is beginning 1 \nJanuary 2018. \n \nThe new standard, which is a comprehensive response to the global financial crisis \nprovides a logical model for classification and measurement; a single, forward-\nlooking ‘expected loss’ impairment model; and a substantially-reformed approach \nto hedge accounting. IFRS 9: Financial Instruments, is expected to contribute to \nmore robust financial reporting and assist board and senior management of \nbanking institutions in making informed decisions, proactively manage provisions \nand effects on capital plans. This is expected to ultimately result in a more sound, \nlower-risk banking system with more efficient banks and better allocation of \ncapital. \n \nThe new standard represents a fundamental change of approach and will require, \namong other, the substantial re-engineering of process and changes in accounting \nsystems and procedures. To this end, the Reserve Bank shall be issuing guidance \nto the market on the implementation and adoption processes, by 30 September \n2016. In this regard all banking institutions are advised to activate processes to \nensure implementation of IFRS 9: Financial Instruments. \n \n43 \n \nRecovery & Resolution Planning for Banking Institutions \nAs part of measures to enhance the safety and soundness of the banking sector, \nthe Reserve Bank is developing guidance to the banking sector on the development \nof recovery plans, in line with standards established by the Financial Stability \nBoard after the Global Financial Crisis. \n \nThe benefits of recovery plans include increased awareness by banks of possible \nstress scenarios and enhanced ability to proactively plan for such scenarios. In \naddition, it assists supervisors to identify appropriate actions that can restore the \nviability of banks in the shortest possible time and at minimal cost. \n \nA recovery plan should cover the following, among other elements: \na) \nCoverage: The recovery plans should include a liquidity recovery plan, \na capital recovery plan and a business continuity plan. \nb) \nGovernance structure: The recovery plan must clearly articulate roles \nand responsibilities for all staff involved in the development of the \nrecovery. \nc) \nGroup structure and key information on legal entities: The recovery \nplan must identify interdependencies of an operational and financial \nnature among legal entities within a banking group. \na) \nTrigger framework: The recovery plan should identify triggers for the \nimplementation of the plan. The triggers should be an extension of the \nbanks’ risk appetite and risk management framework for capital, \nliquidity and business continuity. \nb) \nStress Scenario: Banking institutions are required to use reverse stress \ntesting to develop stress scenarios for capital, liquidity and business \ncontinuity. These stresses should be more severe than the stresses \napplied in other processes such as the ICAAP. \n44 \n \nc) \nRecovery options: The recovery plan must identify and prioritise \nsuitable recovery options. The recovery options should be an extension \nof existing capital plans, liquidity contingent funding plans as well as \nbusiness continuity and disaster recovery plans, but should allow the \nbank to recover from more severe stresses. \n \nThe guideline will be issued for comments to the market by 30 September 2016 \nand all banking institutions will be required to submit to the Reserve Bank their \nrecovery plans by 31 December 2016. \n \nIt is anticipated that the development of robust recovery plans will enable banking \ninstitutions to adequately prepare for severe stress scenarios, thereby minimizing \nthe risk of failure. This development, together with other financial stability \nmeasures are expected to translate to restoration of confidence in the banking \nsector by the banking public, whose confidence was eroded by past bank failures. \n \nFinancial Inclusion \nThe Reserve Bank has in earnest embarked on the implementation of the National \nFinancial Inclusion Strategy, which was launched on 11 March 2016. The \nimplementation of various initiatives under the strategy is designed to positively \nimpact the economic lives of target groups and communities through financial \ninclusion. \n \nIn order to inform the Strategy implementation process, the Reserve Bank is \ncurrently engaging key stakeholders, including government ministries, other \nfinancial sector regulators, tertiary and higher learning institutions, banking \ninstitutions, and development partners. In this regard, eight (8) thematic working \ngroups comprising key stakeholders focusing on financial inclusion initiatives \nhave been constituted as follows: \n45 \n \nTable 9: Thematic Working Groups on Financial Inclusion \nWorking Group \nTerms of Reference \nWomen \nFinancing \nand \nDevelopment \nPromote development of innovative financial products for \nwomen and facilitate capacity building programs for women to \nimprove access to financial services. \nSMEs Finance & Development Facilitate minimisation of challenges encountered by SMEs in \ntheir efforts to be financially included, promote innovative \nfinancial products for SMEs and other capacity building \nprograms. \nRural and Agricultural \nFinance & Development \nDevelop and recommend agricultural finance solutions for \nsmall holder farmers and the rural community. \nInsurance, Pensions and \nCapital Markets \nFacilitate the development and uptake of appropriate \ninsurance, pensions and capital market products for low \nincome groups and ensure effective capacity building and \nawareness programmes. \nDigital Finance \nPromote the development of innovative and affordable digital \nfinancial products and services that promote financial \ninclusion. \nFinancial Literacy and \nConsumer Protection \nFacilitate the design and implementation of tailored financial \nliteracy strategies for special groups e.g. school children, \nyouth, women and SMEs. \nFacilitate the design and implementation of a sound framework \nfor financial consumer protection. \nMicrofinance \nAdvisory \nCouncil \n \nPromote development of innovative products, delivery \nchannels and capacity building in the microfinance sector, and \npositive contribution of microfinance to financial inclusivity. \nYouth \nPromote development of innovative financial products for \nyouth and facilitate capacity building programs for youth to \nimprove access to financial services. \n \nDevelopment of Policies and Guidelines \nThe implementation of the National Financial Inclusion Strategy necessitates the \ndevelopment of various policies and guidelines to guide stakeholders. In this \nregard, the following policy documents will be issued: \n \n \n46 \n \nPrudential Standards No. 01-2016/BSD: Agency Banking \nIt is encouraging to note that, in keeping with the thrust of the National Financial \nInclusion Strategy, a number of banks have introduced agent banking as an \ninnovative way of reaching out to the unbanked in remote areas and to date, more \nthan 3,000 access points have been opened. \n \nAgency banking brings with it a number of benefits to the banking public, \nincluding improved access to banking products and services at lower costs while \nbanking institutions are able to broaden their customer base. In addition, agents \nare able to augment their income through commissions earned from facilitating \nbank transactions. \n \nThe introduction of agency banking will be beneficial to members of the public as \nthere will be more outreach to the areas where the public are having challenges in \naccessing banking facilities. In this regard, the Reserve Bank has developed \nPrudential Standards which outline the minimum regulatory expectations with \nrespect to the conduct of agency banking business. \n \nFinancial Consumer Protection Prudential Standards \nThe ever-increasing complexity and diversity of the range of products and services \noffered by financial institutions, and the increasing transfer of opportunities and \nrisks to consumers call for enhanced protection of consumers of financial services. \nIt is against this background that the Reserve Bank will be issuing Prudential \nStandards on Financial Consumer Protection. The prudential standards constitute \nminimum standards of market conduct for banking institutions to achieve \nacceptable consumer protection when conducting their banking business. \n \nThe standards will also increase public awareness of financial services and \nproducts, promote greater transparency and minimize information asymmetry \n47 \n \nbetween financial services consumers and banking institutions. The standards also \nseek to ensure availability of adequate consumer redress where there are \ngrievances. \n \nThe prudential standards are anchored on seven general consumer protection \nprinciples namely: \n \ni. \nEquitable and fair treatment of customers; \nii. \nDisclosure and transparency; \niii. \nFinancial education and awareness; \niv. \nResponsible business conduct of institutions and authorized agents; \nv. \nProtection of customer assets against fraud and misuse; \nvi. \nProtection of consumer data and privacy; and \nvii. \nComplaints handling and redress. \n \nOverall, the prudential standards will foster public confidence and trust in the \nbanking sector. Banking institutions are required to prime their risk management \nsystems and processes to ensure compliance with the provisions of the Banking \nAct as amended, and the Prudential Standards which will be issued by 30 \nSeptember 2016. \n \nFinancial Literacy Framework \nIt is generally recognized that, financial education, when conducted alongside \neffective financial inclusion and consumer protection frameworks, enables \nindividuals to effectively use financial products and services and to meaningfully \nparticipate in financial and economic activities. \n \nIn this regard, the Reserve Bank is developing a Financial Literacy Framework to \nenable the implementation of tailored financial literacy programs for target groups \n48 \n \nsuch as school children, youths and women entrepreneurs and SMEs under the \nNational Financial Inclusion Strategy. \n \nThe Financial Literacy Framework seeks to increase awareness of and access to \neffective financial education; determine and integrate core financial competencies; \nimprove financial education infrastructure; identify, enhance, and share effective \npractices; \nincrease \nindividual \nknowledge \nand \nskills \nand \nhelp \nindividuals/businesses understand financial laws and ethics. \n \nThe Framework will be issued by 30 September 2016 and all banking institutions \nwill be required to develop and implement financial literacy programmes for the \nvarious segments of their customers to raise awareness of their products and \nservices as well as capacitate the customers. \n \nEstablishment of SME Units and Women Desks \nIn line with the January 2016 Monetary Policy Statement, where banks were \nencouraged to set up SME units and women desks, I am pleased to report that there \nis commendable progress in that regard. A total of 12 banks have set up SME units \nand eight (8) banks have established women desks, while the remaining are \nworking on the establishment of the same. \n \nThrough the SME units and women desks, banks are now able to focus on \ndeveloping products and services that meet the specific needs of MSMEs and \nwomen entrepreneurs. A significant number of banks have tailor-made products \nthat meet the specific needs of SMEs and women entrepreneurs. \n \n \n \n \n49 \n \nCollection of Disaggregated Data \nIn order to achieve our overall financial inclusion target of 90% by 2020, the \nReserve is currently working on targets for specific segments, including women, \nyouth and SMEs. \n \nTo clearly understand and develop targeted initiatives aimed at promoting \nfinancial inclusion of these segments, the Reserve Bank is collaborating with \nvarious stakeholders, including development partners to establish the level of \nfinancial inclusion. \n \nIn this regard, the Reserve Bank has also designed a template with financial \ninclusion indicators to facilitate collection of disaggregated data from banking \ninstitutions on a quarterly basis. \n \nFinancial Inclusion of Women \nThe level of financial exclusion of women has remained relatively higher in many \ncountries and the exclusion rate is more pronounced in developing countries, \nZimbabwe included. According to the World Bank 2014 Global Findex data, 58% \nof women had a bank account compared to 65% of men. This gender gap has \nremained at 9% for developing economies since 2011. \n \nStatistics recently collected from the Zimbabwe banking sector revealed that \nlending to women constituted less than 10% of total banking sector loans and \nadvances as at 30 June 2016. \n \nIt is, therefore, critical for women to have access to the full range of financial \nproducts and services, including credit, savings and micro-insurance which are \nessential to fully develop their productive assets to facilitate graduation of their \nincome-generating activities from survival level into viable businesses. \n50 \n \nIn this regard, all banking institutions are required to submit to the Reserve Bank, \nby 31 December 2016, their 2017 targets for lending and other financial products \nand services targeted at women, including accompanying capacity building \nactivities such as tailored financial literacy or other training programs. Banks \nshould also capitalize on available funding from regional and international funders \ntargeting women. \n \nValue Chain Financing Model \nThe Reserve Bank has partnered with key stakeholders, including financial \ninstitutions, government ministries/departments and development partners and is \noperationalising the value chain financing model through implementing projects \nthat can be replicated across the country. The initial focus is on small-scale \nagriculture and rural financing and beneficiaries will be supported in groups / \nclusters. \n \nEach model project is expected to address the following minimum expectations: \ni. Production requirements; \nii. Financing; \niii. Capacity building programs; \niv. Access to markets; \nv. Access to an information centre; and \nvi. Use of digital finance, agent banking etc. as enablers. \n \nThe model projects are envisaged to have high impact in transforming people’s \nlives and will involve many actors along the value chain. \n \n \n \n \n51 \n \nFinancial Inclusion Commitments under the Maya Declaration \nAs a way of demonstrating the country’s commitment towards defined financial \ninclusion targets, Zimbabwe has submitted commitments under the Maya \nDeclaration. \n \nMaya Declaration represents the world’s first commitment platform which enables \nAlliance for Financial Inclusion member institutions to make concrete financial \ninclusion targets, implement in-country policy changes, and regularly share \nprogress updates. \n \nIt provides a mechanism that allows policymakers to apply positive peer pressure \nto promote financial inclusion. This public declaration will ensure that initiatives \naimed at promoting an inclusive financial sector are developed and implemented \nwithin the stated timelines. \n \nZimbabwe made financial inclusion commitments in the following areas: \n \ni. \nNational Financial Inclusion Strategy; \nii. \nFinancial Literacy and Consumer Protection; \niii. \nDigital Financial Services; \niv. \nFinancial Infrastructure; and \nv. \nGender. \n \n \n52 \n \nSECTION 4 \nIMPACT OF POLICY MEASURES TAKEN BY RBZ IN MAY 2016 \n \nIn response to the myriad of challenges besetting the economy, the Reserve Bank \nintroduced the following measures in May 2016 to deal with the scourge of \nimports and cash shortages within the national economy whilst at the same time \npromoting exports of goods and services in order to increase liquidity in the \neconomy; \n \ni. \nPromotion of cashless payment systems that include the use of plastic \nmoney through point of sale (POS) machines, on-line banking, transfers \nand other electronic banking systems. The uptake of these electronic \npayment systems has been quite satisfactory, with total electronic payments \nhaving increased from US$4.1 billion in January 2016 to US$5.5 billion in \nJuly 2016, as shown in Figure 12 below. The increase in the usage of plastic \nmoney is testimony of the efforts by banks to promote electronic payments \nto make it easier and cheaper for the banking public to use cards. Efforts are \nalso being made by the Reserve Bank, Zimswitch, financial institutions and \nmobile banking providers to ensure that a stable infrastructure to support the \nelectronic payment system is available. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53 \n \n \nFigure 12: Total Electronic Payments \n \nSource: RBZ \n \nii. \nLimitation on cash withdrawal amounts to US$1000 for individuals and \nUS$10 000 for corporates per day in line with international best practice. \nDespite the recurrence of queues in banking halls on Government paydays, \ncash shortage has subsided especially in view of the surge in the use of \ncashless payment systems and the fact that the Bank is continuously \nimporting cash to service the market. In addition, and in order to strike a \nbalance between the availability and demand for cash, banks have had to put \ntheir internal prudential limits to manage the physical shortage of cash. \n \nThe Reserve Bank has also invoked the Bank Use Promotion Act [Chapter \n24:24] to ensure that traders bank their surplus cash in line with policy. This \nexercise has greatly assisted in compelling some of the unscrupulous traders, \nwho had never bothered to bank their cash since the introduction of \ndollarisation in 2009, to use the banking system. \n \n4.1\n4.1\n4.3\n4.3\n4.8\n5.4\n5.5\n 18\n 20\n 22\n 24\n 26\n 28\n 30\n 32\n 34\n3.5\n4.0\n4.5\n5.0\n5.5\n6.0\nJan-16\nFeb-16\nMar-16\nApr-16\nMay-16\nJun-16\nJul-16\nVolumes in Millions\nValues in US$ Billions \nValue\nVolume\n54 \n \niii. \nPrioritisation of imports to ensure that foreign exchange is utilised \nefficiently on productive imports of goods and services as per the import \npriority list shown in Table 10. Adherence to this policy objective has started \nto bear fruit as non- essential imports like water and vegetables have gone \ndown whilst local production of import substituting products including \nplastics, recharge cards and confectionaries is going up. The Reserve Bank \nhas on its part put in place a foreign currency committee to have an oversight \nrole on the management of foreign exchange in compliance with the import \npriority list and for the purposes of supplementing forex resources through \nbanks for essential imports such as fuel, electricity and grain from forex \nreceipts of gold and other minerals retained by RBZ under the auspices of \nlocal content regulations. \n \nSustainability of this local content biased policy measure is dependent on the \ncountry’s capability to continuously enhance forex receipts through the ease \nof doing business. \n \nTable 10: Foreign Payments Priority List Guidelines \nPRIORITY \nLEVEL \nFOREIGN CURRENCY PAYMENTS CATEGORY \nPriority \nOne \n(HIGH) \n \n \ni. \nNet Exporters who import raw-materials or machinery \nto aide them to produce and generate more exports; \nii. \nNon-exporting importers of raw materials and \nmachinery for local production (value addition) that \ndirectly substitute import of essential finished goods; \niii. \nImports of critical and strategic goods such as basic food \nstuffs and fuel, health and agro-chemicals granted these \ngoods are not available locally; \n55 \n \nPRIORITY \nLEVEL \nFOREIGN CURRENCY PAYMENTS CATEGORY \niv. \nRepayments of offshore lines of credit procured to fund \nproductive activities; \nv. \nPayments for services not available in Zimbabwe; \nvi. \nForeign investment (Capital disinvestments, profits and \ndividends). \nvii. \nRemittance of rental income from properties owned by \nnon resident Zimbabweans and foreign investors who \nwould have purchased property using funds originating \nfrom offshore and transferred through normal banking \nchannels \nviii. \nRemittance of pension income for non-resident \nZimbabweans who formally emigrated from Zimbabwe \nix. \nImportation of packaging material not available in \nZimbabwe \nx. \nUniversity and college fees. \nPriority \nTwo \n(MEDIUM) \ni. \nBank borrowing clients in the productive sector who \nengage in critical and strategic imports. \nii. \nCapital remittances from disposal of local property for \nelderly people. \nPriority \nThree \n(LOW) \n \n \niii. \nCash depositing clients in the retail and wholesale \nservice industry. The customers generate cash which can \neither be recycled for local use or repatriated to \nreplenish Nostro accounts. \niv. \nOther borrowing clients who have engaged in the \nimportation of non-strategic goods. \n \n56 \n \nPRIORITY \nLEVEL \nFOREIGN CURRENCY PAYMENTS CATEGORY \nNot \nPriority \ni. \nCapital remittances from disposal of local property \nii. \nCapital remittances for cross border investments \niii. \nFunding of offshore credit cards \niv. \nImportation of trinkets, low local content consumer \ngoods and/ or goods readily available in Zimbabwe \nincluding non-commercial vehicles, maheu, bottled \nwater, tomatoes, vegetables. \nv. \nPayments for services available in Zimbabwe \nvi. \nDonations \n \n \niv. \nIntroduction of an export incentive scheme of up to 5% to promote the \nexport of goods and services. Given that the multi-currency foreign \nexchange system is here to stay and that its sustainability is dependent \non the economy’s capacity and ability to generate foreign exchange to meet \nits domestic and foreign requirements, development and promotion of \nforeign exchange revenue streams such as exports of goods and services and \ndiaspora remittances, is therefore critical to enhance foreign exchange \nreserves of the country. \n \nThe above reality together with the country’s trade deficit of around US$2.5 \nbillion per annum requires a substantial policy shift to promote exports in \nview of lack of competitiveness of Zimbabwean exports due to global \nshocks that include the strong US$, sharp decline in commodity prices and \ntighter global financial conditions. \n \n57 \n \nIt is against the above background that Government, through the Reserve \nBank of Zimbabwe, introduced the performance related export bonus \nscheme of up to 5% to be awarded to exporters of goods and services to \naddress the challenges of low productivity and promote exports with the \noverall aim of liquefying the multi-currency exchange system. \n \nThe funding mechanism of the export incentive scheme will be through \nbond notes in order to preserve the offshore US$200 million counter-\ncyclical facility that has been arranged to support the export bonus scheme \nfrom externalization and/or capital flight which has continued to negatively \naffect the economy since dollarization in 2009. The bond notes will be zero-\ncoupon, tax-exempt debt instruments. \n \nThe issuance of bond notes has a self-control mechanism in that when there \nare no exports there will be no bond notes. The bond notes will be gradually \nreleased into the economy in sympathy with export receipts through normal \nbanking channels up to a maximum ceiling of the facility of US$200 \nmillion. The ceiling would be attained when total exports are around US$6 \nbillion. At the rate at which the country is exporting and based on statistics \nin Table 11, we anticipate that bond notes equivalent to around US$75 \nmillion will be in the market by the end of December 2016. \n \nThe bond notes which will start to circulate by end October 2016 will be at \npar with the US$ (i.e. one to one) and will be used and treated in the same \nmanner as bond coins. In simple terms exporters will receive the incentive \nproceeds in US$ and the incentive will be credited to their US$ accounts in \nUS$ currency. An exporter will then transact through RTGS, make foreign \npayments for imports of goods and services and transact freely within the \n58 \n \nmulti-currency exchange system. It is also important to note that bond notes \nshall not be forced on people who do not like them. \n \nThe Bank has heard and taken note of the public’s concerns, fear, anxiety \nand skepticism of bond notes which all boils down to the general lack of \ntrust and confidence within the economy. The Bank is addressing the \nconcerns by planning to introduce smaller denominations of bond notes of \n$2 and $5. In addition the Bank has proposed for the setting up of an \nindependent board to have an oversight role on the issuance of bond notes \nin the economy. \n \nDoing nothing to incentivise exporters of goods and services whilst at the \nsame time desiring to maintain the multi-currency exchange system is not \nonly contradictory but also imprudent. \n \nIt is critical to emphasise that the introduction of bond notes does not mark \nthe return of the Zimbabwe dollar through the back door. The \nmacroeconomic fundamentals or conditions for the return of the local \ncurrency are not yet right to do so. \n \nKey economic fundamentals or conditions for the return of the local \ncurrency are as follows: \n \na) Minimum foreign exchange reserves equivalent to one (1) year of \nimport cover; \nb) Balanced and sustainable government budget; \nc) Sustainable interest rates; \nd) High consumer and business confidence; \ne) Sustainable level of inflation; and \n59 \n \nf) Healthy job market. \n \nThe country is still very far from attaining these economic fundamentals. \n \n \nTable 11: Foreign Currency Inflows and Export Incentive Entitlements \n(May-Sep 2016) \nSector \n Total Foreign \nCurrency \nReceipts (USD \nEquivalent) \n Total Incentives \n \n Grand Total \n \n \n5% \n2.50% \n Mining \n491,390,342 \n692,141 \n6,988,128 \n7,680,269 \n Agriculture excl \nTobacco \n53,557,175 \n2,677,859 \n- \n2,677,859 \n Manufacturing \n41,819,954 \n2,090,998 \n- \n2,090,998 \n Services \n94,086,317 \n4,704,316 \n- \n4,704,316 \n Other \n4,973,380 \n248,669 \n- \n248,669 \n Tobacco - Value \nAddition \n54,991,836 \n2,749,592 \n- \n2,749,592 \n Total Banks \n740,819,003 \n13,163,574 \n6,988,128 \n20,151,702 \n Tobacco Growers \n(Green Leaf Purchases)* \n566,332,848 \n28,316,642 \n- \n28,316,642 \n Gold Producers \n211,469,223 \n4,334,321 \n3,119,570 \n7,453,891 \n Grand Total \n1,518,621,074 \n45,814,537 \n10,107,698 \n55,922,235 \nSource: RBZ \n* Tobacco figures are for the entire selling season i.e. 30 March – 20 August 2016 \n \nv. \nGold Deliveries to Fidelity Printers and Refiners \nAs at 30 June 2016, delivery to Fidelity Printers and Refiners was 9.6 tonnes \nof gold compared to 8.1 tonnes delivered during the same period in 2015, \nrepresenting an increase of 18%. Including gold processed from Platinum \nGroup Metals (PGMs) amounting to 1.1 tonnes between January and June \n2016, total gold production during the period amounted to 10.7 tonnes. \n \n60 \n \nThe projected annual gold delivery for 2016 is 24 tonnes. In this regard, the \nhalf year delivery of 10.7 tonnes indicates that the targeted 24 tonnes is \nachievable as more gold is usually produced during the second half of the year. \n \nTable 12 below shows gold deliveries to Fidelity Printers & Refiners as at 30 \nJune 2016 including gold from PGMs. \n \n Table 12: Gold Deliveries to Fidelity (kgs) as at 30 June 2016 \n \n2015 \n2016 \n% \nchange \n \nPrimary \nSmall \nScale \nTotal Primary \nSmall \nScale \nTotal \nJan \n809 \n375 \n1,184 \n868 \n590 \n1,458 \n23 \nFeb \n751 \n401 \n1,152 \n877 \n698 \n1,576 \n37 \nMar \n970 \n506 \n1,476 \n932 \n635 \n1,567 \n6 \nApr \n797 \n604 \n1,400 \n928 \n713 \n1,641 \n17 \nMay \n830 \n567 \n1,397 \n1,087 \n602 \n1,689 \n21 \nJun \n980 \n593 \n1,573 \n953 \n743 \n1,696 \n8 \nPGM \n(Gold) \n392 \n- \n392 \n1,068 \n- \n1,068 \n172 \nTotal \n5,527 \n3,046 \n8,573 \n6,714 \n3,982 \n10,695 \n25 \nSource: Fidelity Printers \n \nThe specific factors that have contributed to an increase in gold output during the \nfirst half of 2016 include: \n \na) The reduction in royalties from 5% to 3% on incremental output with \na cap of 5% for large scale primary producers, and from 3% to 1% \nfor small scale and artisanal miners; \n \nb) The firming of international gold prices, from an average of US$1 \n181.21 per ounce in the first quarter to about US$1 259.35 per ounce \nduring the second quarter of 2016; \n61 \n \n \nc) The relative stability of power availability in the second quarter of \n2016. \nd) The 5% export incentive scheme introduced by the Reserve Bank in \nMay 2016; and \n \ne) Sterling efforts being implemented by the gold mobilization and \nmonitoring committee. \n \nvi. \nResuscitating of Aurex, a RBZ subsidiary, after an injection of US$1.2 \nmillion for the procurement of state of the art diamond cutting and \npolishing equipment from India. The new plant, with a cutting and polishing \ncapacity of between 2500 and 10 000 carats of rough diamonds per month, \ndepending on the stone size, has now been in operation since August 2016. \nThe company is currently involved in the development of external markets \nfor cut and polished diamonds, an effort which seeks to bring more revenue \nto the fiscus and create local employment. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n62 \n \n \n \nSECTION 5 \nPOLICY \nMEASURES \nTO \nENHANCE \nCONFIDENCE \nAND \nPRODUCTION \n \nThe following policy measures are being put in place to enhance confidence and \nproduction in the economy, while simultaneously ensuring sustained financial \nstability: \ni. \nEase of securing offshore loans; \nii. \nIncentivising inflows from the diaspora and private unrequited \ntransfers; \niii. \nNostro stabilisation facilities of US$215 million; \niv. \nUS$20 million gold development initiative for small scale gold \nproducers; \nv. \nUS$10 million horticulture/floriculture pre- and post-shipment \nfacility; \nvi. \nResuscitation of the credit guarantee scheme; \nvii. \nEstablishment of an offshore financial centre; \nviii. \nGuidance on interest rates charged by microfinance; \n \ni. \nEase of Securing Offshore Loans. The current Exchange Control policy \nstates that all external loans and commercial credit applications above \nUS$10 million, for both the private sector and state owned enterprises, \nneed prior approval by the Reserve Bank. \n \nIn order to enhance the ease of securing offshore lines of credit, the \nthreshold of external loans that do not need prior Exchange Control \napproval is, with immediate effect, increased to US$20 million. \n63 \n \nAuthorised dealers will still be required to register all such loans, in the \nusual manner, with the Reserve Bank. \n \nIn the same vein, the banking public should ensure that all unregistered \noffshore facilities should be regularised with the Reserve Bank through their \nbanks. \nii. \nIncentivising inflows from the diaspora and private unrequited \ntransfers. In view of the critical role of diaspora remittances in the \neconomy and in order to enhance the remittance of such funds, the Bank \nshall be extending the export incentive scheme at a level of between 2.5-5% \nto diaspora remittances including any form of private unrequited transfers \non funds remitted to Zimbabwe through normal banking channels with \neffect from 1st October 2016. \n \niii. \nForeign Exchange/ Nostro Stabilization Facilities of US$215 million. In \norder to deal with the current delays in the processing of outgoing \nforeign payments by banks the Bank has managed to secure facilities in \nan amount of US$215 million from international finance institutions to \ndeal with the outgoing foreign payments backlog. In addition, \nnegotiations are at an advanced stage to raise US$330 million from \nregional sources to enhance production and improve the liquidity \nsituation in the country \n \niv. \nUS$20 million gold development initiative facility to support small scale \nand artisanal miners. The Reserve Bank has secured US$20 million for \nFidelity Printers and Refiners (FPR) to support small-scale and artisanal \nmining operations in order to increase gold production in the country. \n \n64 \n \nWith underground gold reserves estimated to be around 13 million tonnes, \nZimbabwe’s rich gold reserves are clearly under-exploited. Only 586 tons \nhave been officially mined over the past 36 years from 1980 to August 2016 \nas shown in Table 13. There is therefore great scope to vigorously promote \nthe mining of gold across the country in order to liquefy the economy. \n \nTable 13: Zimbabwe Gold Production (Including PGMs Gold) kgs \n \n \nYear \nTotal (Volume /Kg \nPrice/Ounce \nUS$ Million \n \n1980 \n 11 414.99 \n 594.00 \n 242.2 \n \n \n1981 \n 11 539.41 \n 400.00 \n 164.8 \n \n \n1982 \n 13 250.10 \n 447.00 \n 211.5 \n \n \n1983 \n 14 089.90 \n 380.00 \n 191.2 \n \n \n1984 \n 14 867.48 \n 308.00 \n 163.5 \n \n \n1985 \n 14 691.00 \n 327.00 \n 171.6 \n \n \n1986 \n 14 867.48 \n 390.90 \n 207.6 \n \n \n1987 \n 14 711.97 \n 486.50 \n 255.6 \n \n \n1988 \n 14 961.00 \n 410.15 \n 219.2 \n \n \n1989 \n 16 018.31 \n 401.00 \n 229.4 \n \n \n1990 \n 16 920.32 \n 386.20 \n 233.4 \n \n \n1991 \n 17 884.53 \n 353.15 \n 225.6 \n \n \n1992 \n 18 278.00 \n 333.00 \n 217.4 \n \n \n1993 \n 18 599.91 \n 391.75 \n 233.6 \n \n \n1994 \n 20 683.84 \n 383.25 \n 252.3 \n \n \n1995 \n 23 959.00 \n 387.00 \n 303.1 \n \n \n1996 \n 24 699.00 \n 369.00 \n 297.5 \n \n \n1997 \n 24 225.00 \n 387.05 \n 268.1 \n \n \n1998 \n 25 175.00 \n 288.70 \n 236.3 \n \n \n1999 \n 30 232.62 \n 290.25 \n 229.8 \n \n \n2000 \n 22 021.29 \n 272.65 \n 216.4 \n \n \n2001 \n 18 474.00 \n 276.50 \n 225.5 \n \n \n2002 \n 15 669.00 \n 342.75 \n 159.2 \n \n \n2003 \n 12 446.07 \n 417.25 \n 152.3 \n \n \n65 \n \n2004 \n 21 342.29 \n 435.60 \n 262.8 \n \n \n2005 \n 13 453.45 \n 513.00 \n 191.1 \n \n \n2006 \n 10 961.04 \n 635.70 \n 201.5 \n \n \n2007 \n 6 797.60 \n 836.50 \n 140.8 \n \n \n2008 \n 3 071.82 \n 869.75 \n 93.8 \n \n \n2009 \n 4 208.11 \n 1 087.50 \n 155.2 \n \n \n2010 \n 9 619.80 \n 1 420.25 \n 334.2 \n \n \n2011 \n 12 992.60 \n 1 531.00 \n 598.7 \n \n \n2012 \n 14 742.99 \n 1 664.00 \n 714.9 \n \n \n2013 \n 14 065.23 \n 1 204.50 \n 638.5 \n \n \n2014 \n 15 385.74 \n 1 199.25 \n 624.4 \n \n \n2015 \n 20 022.75 \n 1 060.00 \n 753.3 \n \n \n2016 \n 10 695.00 \n 1 329.00 \n 402.5 \n \n P\nGrand Total \n 587 037.62 \n 633.86 \n 10 418.80 \n \n \nSource: RBZ \n \nThe gold development initiative (GDI) i.e the formalisation process of the small \nscale gold producers which will be executed according to responsible gold mining \nstandards will need to be supported by fast-tracking the ease of doing business \npolicy measures that include the reduction of cost of doing business as follows: \n \na) Reduction in custom milling fees from the current US$8 000 on the \nbasis that when the fee was US$2 000 there were 485 millers which \nwere registered but now at US$8 000 the registered millers are now \naround 51. The challenge is that there are many millers who cannot \nafford to pay the required fee of US$8 000 but are still operating and \nselling their gold on the black market and/or smuggling gold out of the \ncountry. \n \n66 \n \nb) Reduction of licence fee for explosives. At US$100 about 5 000 small \nscale gold producers were registered and when the fee was increased \nto U$2 000 only 300 registered. \n \nc) Reduction of the Environmental Management Agency (EMA) fees. \n \nThe fee for exploiting the environment at 2% of gross revenue is \nextremely high. Consideration should be made to scrap this fee in order \nto enhance gold production. \n \nd) Rural District Council (Land Development Tax) fees. These charges \nshould be reviewed downwards based on ability to pay and must be \ndetermined in the context of all the other taxes, fees and charges that \nare applied to the mining industry. \n \ne) Environmental Impact Assessment (EIA). The fee at between 0.8%-\n1.2% of total cost (with a maximum cap of US$2 million) remains high \nand is a huge barrier to investment. Reducing this to a rate of 0.05% \nof the project cost with a reasonable upper limit of US$50 000 would \nbe in line with international best practice. \n \nf) Reduction of Exploration Licenses, Claims and Related charges. \nThe ground fees currently levied on prospective and mining firms in \nZimbabwe are exorbitant. \n \nv. \nUS$10 million horticulture and floriculture pre and post shipment facility \nHorticulture and floriculture has previously been a fast growing export source \nwith Zimbabwe having been one of the top exporting country in Africa in the \n1990s. In order to increase production and exports of this sub-sector the Bank \n67 \n \nhas arranged a facility of US$10 million for the pre and post-shipping \nrequirements for producers of horticulture and floriculture. The facility would \nbe disbursed through normal banking channels. \n \nvi. \nResuscitation of the credit guarantee scheme. The Reserve Bank is \nresuscitating the Credit Guarantee Scheme under the Export Credit Guarantee \nCompany (ECGC) to support SMEs to increase production with effect from \n1st October 2016. \n \nThe guarantee scheme, which used to be operational, was discontinued in 2002 \nas the guarantee limit had become too insignificant to support any meaningful \nbusiness due to economic circumstances prevailing at the time. The credit \nguarantee scheme will address the challenge of lack of adequate and \nacceptable collateral, which is among the major challenges faced by \nmarginalized groups including SMEs, women, youth, small holder farmers \nand rural population in accessing bank credit. The resuscitation of the credit \nguarantee scheme will go a long way in stimulating productive lending to the \nmarginalized groups which will stimulate economic growth and poverty \nreduction. \n \nvii. Guidance on interest rates charged by microfinance institutions. \nMicrofinance has been identified as an important pillar of the National \nFinancial Inclusion Strategy in Zimbabwe. However, the high costs of \ntraditional microfinance loans limit the effectiveness of microfinance as a \ndevelopmental and poverty-reduction tool. The high cost of microfinance \nloans is partly a reflection of the high cost of funds and the high transaction \ncost of traditional microfinance operations associated with high volumes of \nsmall, low-value loans. \n \n68 \n \nThe Reserve Bank has noted with concern that while banks’ lending rates \nhave declined to an average of 15% per annum, some microfinance \ninstitutions continue to charge interest rates of over 20% per month. In this \nrespect, microfinance institutions are expected to reduce their lending rates \nin the spirit of building inclusive financial systems and sustainable \neconomic development. Accordingly, all microfinance institutions are \nurged to reduce their effective lending rates to a maximum of 10% per \nmonth effective, 1 October 2016. Future adjustments would need to be in \ntandem with the improvement on the tenure of the operating licences of \nmicrofinance institutions which are renewed on an annual basis. \n \nvi. \nEstablishment of an Offshore Financial Centre. The Bank is proceeding \nto putting in place mechanisms to establish an offshore financial centre as a \nconfidence building measure under the auspices of the Special Economic \nZones. Details of this initiative shall be unveiled in line with developments \non the establishment of the Special Economic Zones in the country. \n \n \n \n \n \n \n \n \n \n \n \n \n69 \n \nSECTION 6 \nPOLICY ADVICE \n1. \nDealing with fiscal deficit in a sustainable manner that promotes \neconomic growth requires a combination of the following measures; \n \na) Leveraging and securitisation of the country’s vast resources \n(minerals, non-core assets, residential and commercial land) to obtain \ncapital for development and to close the fiscal deficit. The country’s \nenormous potential for sustained growth and poverty reduction is \nachievable through leveraging and securitisation of the country’s \ngenerous endowment of natural resources. \n \nb) Acceleration of the reform and reorganisation of state owned \nenterprises (SOEs) including disposal through joint ventures and/or \noutright sale of some of the non-core SOEs to raise capital for \ndevelopment and to close the fiscal deficit. Additionally, production \ncan be enhanced by granting investors contracts under long lease-back, \nbuild-operate-transfer (BOT) or build-own-operate-transfer (BOOT) \nagreements. \n \nc) Putting in place an attractive investment climate to generate \ninvestment-led growth. Investment, like people, likes security. \nSecurity of investment is a good or conducive investment climate. \nSecurity of tenure is the best form of reward or incentive for business. \nPutting in place a conducive investment climate, fortunately, costs \nalmost nothing yet the cost of not having it is horrendous. \n \nd) The clarification of the Indigenisation Policy by His Excellency, the \nPresident, in April 2016 was a critical milestone towards improving \n70 \n \nthe investment climate but the Act is yet to be aligned to the Policy. \nSimilarly, regularisation of the 99-year land tenure security to make it a \nbankable document is yet to be done. Regularisation of these two policy \ndocuments will cost almost nothing but yet taking action on them would \nbe tremendous as it would signal that domestic and foreign investment \nis welcome in Zimbabwe. We need to Walk the Talk to see this through \nin order to create an investor friendly environment. \n \ne) \nWork being done by the Office of the President and Cabinet on the \nease of doing business is quite commendable. What is now needed is \nto Walk the Talk by fast-tracking the implementation of all the \nidentified areas of improvement especially as they pertain to the \nregulatory environment of doing business in Zimbabwe. Business \nlicense application forms, for example, should be available on-line, \nidentical to all applicants and processed as a routine procedure. \n \nf) \nPutting in place effective performance management systems across \nthe board to ensure that performance commensurate with rewards \nand to inculcate positive work ethics. Special government projects that \ninclude the Brazil’s More Food Programme and the Directed \nAgriculture Programme should also be subject to this scrutiny. \n \n2. Dealing with the current account deficit through internal devaluation to \nrestore competitiveness. The use of the multi-currency exchange system \nputs Zimbabwe in a special circumstance that takes away the flexibility of \nadjusting the nominal exchange rate to maintain relative competitiveness. \nThis unique situation is similar to the experience of countries within the Euro \narea, for example, which are unable to reverse a loss of competitiveness and \n71 \n \nbalance of payments imbalance through a nominal devaluation of the \ncurrency. \n \nFor countries in this predicament, the loss of competitiveness can only be \nreversed internally, through relative gains in the efficiency in production and \nor through action to reduce cost of production i.e. internal devaluation – \naimed mainly at reducing wages and other related labour costs. \n \nHistorical experiences with internal devaluation have been mixed. Others \nhave been successful whilst other “successful” internal devaluation have \nbeen accompanied by falling demand and recession. The truth of the matter \nis that there are always pros and cons with devaluations, whether it is nominal \nor internal devaluation. Management and choice of internal devaluation is \ntherefore critical. \n \nWhilst there is general acceptance across the board in Zimbabwe about the \nneed for internal devaluation in the country, there is no consensus on its form \nand format. Statistics at the Reserve Bank shows that the country would need \nto gradually devalue by up to 45% over a three year period to restore \ncompetitiveness. \n \nInternal devaluation in Zimbabwe can be achieved through two possible \napproaches. The first approach would be for reduction in wages and salaries, \naccompanied by a similar reduction in the cost of finance and utility charges. \nOnce this is done, the country would need to find a comparator to benchmark \nwith to ensure that costs would not increase again without being checked. The \nchallenge of this approach is that it can lead to further reduction in aggregate \ndemand and to depression and recession. An equilibrium position would \ntherefore need to be determined for this approach to produce desirable results. \n72 \n \n \nThe second approach, which also takes account of peculiarities in Zimbabwe, \nwould be to achieve internal devaluation by a combination of improving the \ncompetitiveness of the country’s exports whilst simultaneously levelling the \nplaying field between importers and domestic producers. This external \nrebalancing approach would incentivize foreign exchange earners (including \nall depositors) who are the generators of foreign currency whilst at the same \ntime levying all payments of imports of goods and services (including \nwithdrawals). \n \nThe intention of this approach would be to manage foreign exchange using \nmarket based mechanisms. There would be no charges on the use of plastic \nmoney and other electronic payment means. This approach would be neutral \nto net cash depositors. This will, therefore, be a market mechanism to support \nincreased use of plastic money and for attracting foreign exchange deposits. \n \nThe downside risk of this second approach is that it would increase prices \nwithin the economy. The Bank, however, believes that the levy on imports \nwould have a minimal effect on inflation given that the country is currently in \ndeflation. Allowing some level of inflationary pressures in the economy \nwould help to increase company revenues and profitability with positive \nmultiplier effects on Government revenues, employment and GDP growth. \n \nMost firms in Zimbabwe have already implemented or are in the process of \nimplementing the first approach of internal devaluation of reducing wages and \nsalaries. In view of these developments, it would be prudent to buttress the \nfirst approach by the second approach of internal devaluation to deal with the \ncurrent account gap. \n \n73 \n \nThe Bank shall be accelerating the second approach of internal devaluation \nafter consultations with business and consumers. \n \n \n3. \nEnforcement of local procurement by Government, in line with existing \nlocal procurement rules, is essential to conserve scarce foreign exchange \nand create a multiplier effect to stimulate local suppliers. The increased \nlocal business activity will, in time, boost fiscal space through increased \ntaxes. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n74 \n \nSECTION 7 \n \nCONCLUSION AND OUTLOOK \nThe main message of this Monetary Policy Statement is that the Zimbabwean \neconomy which is under stress as a result of harsh external conditions, structural \nimbalances and legacy policy inconsistencies/contradictions requires urgent and \ndecisive steps to generate investment-led recovery in order to revamp \nproduction across all the sectors of the economy. Walking the Talk is critical \nbecause the large current account and fiscal gaps generated by these imbalances \nhave inhibited private investment and restricted economic growth to as low as \n1.1% in 2015 and projected at 1.2% in 2016. Enhanced production will increase \nemployment, fiscal space, exports, economic growth and reduce import \ndependence and poverty. This is the panacea to restore trust and confidence. \n \nPrudent fiscal policy is the main lever to deal with the internal imbalances and \ncreate an economic environment conducive to economic transformation. \nAccordingly, measures taken by the Bank in May 2016 and those presented in this \nStatement would need to be aligned to the fiscal policy measures presented by the \nHon Minister of Finance and Economic Development in the 2016 Mid –Year \nFiscal Policy Review Statement. \n \nThe measures would need to be supported by concessional external financing. \nThus, with fresh foreign financing being an integral part of the envisaged \nZimbabwe transformation agenda, completion of the re-engagement process is \ncritical to improve Zimbabwe’s country risk premium. \n \nThe policy measures in this Statement and those announced by the Minister of \nFinance and Economic Development in the Mid-Year Fiscal Policy Review \nStatement, combined with fast-tracking re-engagement with the rest of the world \n75 \n \nwill pave way for sustained growth and development. This would lead to an \nincrease in economic growth from 1.2% this year to high single digits over the \nnext three years, while inflation would be limited to lower single digits and \ninternational reserves would recover significantly. \n \nOverall, the medium term looks favourable for Zimbabwe. Strong economic \npolicies would also have an immediate impact in increasing competitiveness and \nattracting investment. The financial system which is currently constrained by the \nenvironment would be enabled to allocate scarce resources to the most effective \nuse, and support production while facilitating the build-up of foreign exchange \nreserves. \n \nI THANK YOU. \n \n \n \nDR J P MANGUDYA \nGOVERNOR \n \n \n \n \n \n \n \n \n \n \n76 \n \n \nAPPENDIX I \n \nThe Re engagement Process \nConsiderable mileage has been made under the re-engagement process to clear \nZimbabwe’s external debt arrears with the multilateral financial institutions. This \nprocess is being done for the purposes of improving Zimbabwe’s country risk \npremium through reducing the country’s debt overhang and to improve the \ncountry’s access to foreign finance. \n \nSignificant work has been recorded to ensure that the country clears its external \ndebt arrears by 31 December 2016. It is critical to note that it is Zimbabwe that \nowes multilateral and bilateral creditors and not vice versa as shown in the Arrears \nClearance Chart below.\n77 \n \nPUBLIC AND PUBLICLY \nGUARANTEED DEBT (US$7.1 billion) \nClearance of IFIs Arrears \n(US$1.8 billion) \nNegotiation after IFIs \nArrears Clearance \nClearance of Paris and \nNon Paris Club \n(US$4.0 billion ) \nIMF \n(US$110 m) \nIBRD \n(US$896 m) \nIDA \n(US$218 m) \nAfDB \n(US$601 m) \nOwn (SDR) \nResources \nMedium-Long-\nterm Loan \nSelf-liquidating pre-financing \nBenefits \nLower debt & country \nrisk premium \nPrivate sector financing \nfrom IFC, EIB and AfDB \nPossible New \nFinancing from IFIs \nBudget support \nBOP support \nInvestment and other \nfinancing\nClearance of Arrears to \nEIB (US$214m) and other \nMultilateral (US$61 m) \nClearance of EIB after IFIs. \nOwn resources for other \nmultilateral arrears \nZIMBABWE ARREARS CLEARANCE PROCESS \n78 \n \n \nAPPENDIX II \n \nRTGS and Nostro Balances under the multi-currency exchange system \nA healthy discourse on funds held by the Reserve Bank under the Real Time Gross \nSettlement (RTGS) account and Nostro balances has been going on for some time. \nIt is critical for the Bank to provide clarity on this scholarly debate in order to provide \nconfidence within the market and advice on monetary aggregates in the context of \ndollarisation in Zimbabwe. \n \nNostro Account \nA Nostro account is a bank account held in a foreign bank and is usually denominated \nin the currency of that foreign country. These accounts are opened under \ncorrespondent banking relationship, between local banks and foreign banks. Nostro \naccounts are used to facilitate receipts (from inflows such as export proceeds, loan \ndisbursements) and payments (imports, external loan repayments) on behalf of the \nbank and its clients. The word Nostro is borrowed from Latin and means “Ours”. The \nforeign banks act as domestic banks’ agents abroad through the correspondent \naccounts, of which Nostro accounts are a part of. \n \nLocal banks also open bank accounts for foreign banks in domestic currency and \nsuch accounts are termed Vostro accounts. \n \nReal Time Gross Settlement (RTGS) \nRefers to the continuous processing, settlement of payments, transfer instructions and \nother obligations on an individual basis without netting debits with credits, that is, on \na transaction by transaction basis in real time across the books of a central bank. An \nRTGS system is a system for large-value, time critical interbank funds transfers. This \n79 \n \nsystem lessens settlement risk since interbank settlement happens throughout the day, \nrather than just at the end of the day. \n \nSettlement \nSettlement refers to the completion of a payment or the discharge of an obligation in \nrespect of funds or securities between two or more parties. It is also used to refer to \nthe payment or discharge of interbank transactions or a series of prior existing \ntransactions. RTGS operates on a credit push basis, that is sufficient funds are \nrequired in the paying bank’s settlement account held at the Reserve Bank before a \ntransaction can be processed successfully. \n \nThe RTGS System settlement account held at the Central Bank is a prefunded \naccount by a paying bank(s) to facilitate interbank payments and settlements at any \ngiven time. All local banks in Zimbabwe are currently very liquid with aggregate \nRTGS banking industry balance amounting to around US$1 billion. \n \nRTGS Funds are not the same as Nostro Funds. \nRTGS funds are not held by banks and/or the Reserve Bank on a one to one basis \nwith funds in the Nostro accounts. In simply terms, transactions under RTGS and \nNostro accounts are independent to each other, the two accounts do not tally. This is \nthe practice throughout the world. This stems from the fact that not all RTGS \nmonetary balances are expended on foreign transactions. A transaction for the \nimportation of fuel exclusively done by a local bank, for example, would reduce the \nNostro position and that bank’s deposits without affecting its RTGS position at the \nReserve Bank. \n \nWhat is, however, true is that a certain proportion of funds held under RTGS should \nbe supported by funds in the Nostro accounts at a level equivalent to the import \ndependence ratio. Thus, given that Zimbabwe’s import dependence ratio is around \n80 \n \n45%, the Nostro position to support the RTGS position of US$1 billion would need \nto be around US$450 million i.e. 45% of RTGS position of US$1 billion. \n \nIt is in view of the mismatch between the expected Nostro position of US$450 million \nand the current country’s aggregate Nostro position of US$250 million that RBZ had \nto arrange for the US$215 million stabilisation facilities, advised in this Statement, \nin order to close the gap which is evidenced by delays in the remittances of outgoing \nforeign payments by banks. Ideally banks are expected to arrange such facilities for \ntheir clients but because of the country’s limited access to foreign finance due to the \nhigh country risk premium, it has not been easy for the local banks to do so. \n \nIt is also essential to note that almost all payments to government, through ZIMRA, \nby tax payers are done through RTGS (as showm in the Chart below) and not physical \ncash or Nostro transfers but yet Government employees, like all other employees in \nZimbabwe, are paid in physical cash through banks – as is evidenced by queues at \nbanks on paydays. This mismatch which is not sustainable requires that payments \nwithin the domestic economy are mainly done through electronic transfers and by \nuse of plastic money. This way, the country would be preserving funds in the Nostro \naccounts for making the much needed foreign payments for the importation of fuel, \nraw materials, grain, e.t.c. \n \n \n81 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n82 \n \nAPPENDIX III \n \nUpdate on Closed Banks \nAs part of measures to promote financial sector stability and restore confidence in \nthe banking sector, the Reserve Bank dealt decisively with weak banks which were \nnegatively impacting on the overall soundness of the sector. The supervisory actions \ninstituted culminated in the closure and liquidation proceedings as discussed \nhereunder. \n \nAllied Bank \nThe bank was closed on 8 January 2015 following surrender of the banking licence \nby the institution’s board on 6 January 2015. The bank was placed under final \nliquidation on 6 March 2015 and the Deposit Protection Corporation (DPC) was \nappointed liquidator of the bank. \n \nAs at 30 June 2016, $343,966 had been collected from various debtors whilst \n$584,596 had been realised from the disposal of government stock and movable \nassets against claims amounting to $15.7 million that were accepted by the Master of \nthe High Court. \n \nAFRASIA Bank Limited \nAFRASIA Bank Zimbabwe Limited, whose licence was cancelled on 24 February \n2015 after the institution’s board surrendered the licence was placed under final \nliquidation on 29 April 2015 and the DPC was appointed liquidator. As at 30 June \n2016, DPC distributed a total of $1.35 million to preferred creditors namely, \nemployees, NSSA and ZIMDEF. \n \nInterfin Bank Limited \nThe bank was closed on 31 December 2014 after failing to trade out of critical \n83 \n \nliquidity and solvency challenges amid futile recapitalization attempts. The bank was \nplaced under final liquidation on 4 March 2015 and DPC was appointed liquidator of \nthe bank. \n \nAs at 30 June 2016, a total of $6.3 million had been recovered from a total loan book \nof $167.3 million of which $90.6 million are related party loans. The first interim \nliquidation and distribution account was approved by the Master of High Court on \n18 May 2016. Thereafter, $520,875 was paid to preferred creditors namely NSSA, \nZIMRA, ZIMDEF and former employees. \n \nCapital Bank \nThe Reserve Bank cancelled the operating licence for Capital Bank Corporation \n(formerly Renaissance Merchant Bank) on 4 June 2014 after the Board voluntarily \nsurrendered the licence. In June 2014, National Social Security Authority (NSSA) \npetitioned the High Court for voluntary liquidation but the application has been \nopposed by the institution’s other shareholders. The parties await allocation of a set \ndown date for the hearing of the application by the High Court. \n \nTrust Bank Limited \nThe bank was closed on 6 December 2013 after failing to trade out of liquidity and \nsolvency challenges. A final liquidation order was granted by the High Court on 19 \nMay 2016. The Deposit Protection Corporation was appointed liquidator and has set \na creditors meeting for 21 July 2016. \n \nTo date, a total of $3.5 million had been collected from a gross loan book of $18 \nmillion. \n \n \n \n84 \n \nTetrad Investment Bank (Tetrad) \nThe DPC was appointed the Provisional Judicial Manager (PJM) of Tetrad \nInvestment Bank with effect from 1 July 2015. \n \nSince DPC came in on 1 July 2015, approximately $13.5 million has been recovered \nfrom the various debtors out of a gross loan book of $56.7 million. At the second \nTetrad Bank creditors’ meeting held on 24 and 25 September 2015 in Harare and \nBulawayo, respectively, the creditors passed a resolution authorising the PJM to \nproceed to implement a scheme of arrangement in terms of section 191 of the \nCompanies Act [Chapter24:03]. The scheme of arrangement involves the conversion \nof debt to equity, and that TIB be put in Final Judicial Management for a three month \nperiod to allow the Scheme of Arrangement as proposed above to be consummated. \n \nThe High Court extended the return date for provisional judicial management \nindefinitely to allow for the finalisation of the scheme of arrangement. As at 30 June \n2016, DPC had paid out a total of $3.11 million of insured deposits in closed banks. \n \nThe table below gives a summary of the payments made by DPC as at 30 June 2016 \nin the closed banks. \nDeposit insurance payments as at 30 June 2016 \nName of \nInstitution \nTotal \nDepositors \nGross Deposits \nExposure \n(Deposits \npayable at $500) \nNo. of \nDepositors \npaid to date \n% of \nDepositors \npaid to \ndate \nValue of \nDeposits \npaid ($) \n% Paid to \nExposure \nRoyal Bank \n \n5,453.00 \n \n2,566,938.08 \n 472,207.00 \n \n3,097.00 \n56.79% \n354,697.00 \n75.11% \nTrust Bank \n \n2,958.00 \n \n11,482,101.93 \n 328,516.00 \n \n377.00 \n12.75% \n133,081.00 \n40.51% \nGenesis \n \n86.00 \n \n1,426,912.56 \n 11,810.00 \n \n62.00 \n72.09% \n8,821.00 \n74.69% \nAllied Bank \n \n9,228.00 \n \n14,316,614.12 \n 1,248,307.00 \n \n1,462.00 \n15.84% \n514,097.00 \n41.18% \nInterfin Bank \n \n13,021.00 \n \n137,336,569.70 \n 918,814.00 \n \n604.00 \n4.64% \n238,672.00 \n25.98% \nAfrAsia \n \n24,163.00 \n \n18,559,590.79 \n 3,439,276.00 \n \n5,708.00 \n23.62% \n1,864,720.00 \n54.22% \n \n \n \n \n \n \n \n \nTotal \n \n54,909.00 \n \n185,688,727.18 \n 6,418,930.00 \n \n11,310.00 \n3,114,088.00 \n \n85", "source": "RBZ", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///RBZ/Monetary_Policy_Statements/mpssept2016Zim.pdf"}
{"doc_id": "17bcc9792a078d1b9fa4d4d2aef1ec2f", "text": "1 \n \n \nDate: Tuesday, 21 May 2024 \nRef: CBN/MPC/COM/152/295 \nAttention: News Editors/Gentlemen of the Press \n \nMONETARY POLICY RATE HIKED TO 26.25 PER CENT \n \nThe Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) \nheld its 295th meeting on the 20th and 21st of May 2024 to review recent \neconomic & financial developments and assess risks to the outlook. \n \nDecisions of the MPC \n \nThe Committee’s decisions are as follows: \n1. Raise the MPR by 150 basis points to 26.25 per cent from 24.75 per cent. \n2. Retain the asymmetric corridor around the MPR to +100/-300 basis points \n3. Retain the Cash Reserve Ratio of Deposit Money Banks at 45.00 per cent. \n4. Retain the Liquidity Ratio at 30.00 per cent \n \nConsiderations \nThe key focus of the MPC at this meeting remained to achieve price stability \nby effectively by using tools available to the monetary authority to rein in \ninflation. \nMembers observed that while year-on-year headline inflation in April 2024 \nrose moderately, the month-on-month measures of headline, food and core \nall declined significantly. This follows a decline (month-on-month) of headline \nand food measures in March 2024, suggesting that the recent tight monetary \npolicy stance of the Bank is beginning to yield the desired outcomes. \nThe MPC, however, noted that the inflationary pressure continues to be \ndriven largely by food inflation. The Committee thus reiterated several \n \n2 \n \nchallenges confronting the effective moderation of food inflation to include: \nrising cost of transportation of farm produce; infrastructure-related constraints \nalong the line of distribution network; security challenges in some food \nproducing areas; and exchange rate pass-through to domestic prices for \nimported food items. The MPC urged that more be done to address the \nsecurity of farming communities to guarantee improved food production in \nthese areas. \nMembers further observed the recent volatility in the foreign exchange \nmarket, attributing this to seasonal demand, a reflection of the interplay \nbetween demand and supply in a freely functioning market system. The \nCommittee also noted the marginal increase in the external reserve balance \nbetween March and April 2024 and urged the Bank to sustain its focus on \naccretion to reserves. The MPC commended the Bank for the recent \napproval of licenses of fourteen (14) international Money Transfer operators \n(IMTOS). This is expected to improve competition and lower the cost of \ntransactions, thus attracting more remittances through formal channels. \nThe Committee noted with satisfaction that the banking system remains safe, \nsound, and stable, despite the headwinds confronting the economy. It \ncommended \nthe \nrecent \nrecapitalization \ninitiative \nand \nurged \nthe \nmanagement to sustain its regulatory oversight to ensure the continued \nstability of the banking system. \nMembers focused on the best policy approach to continue to guide the \neconomy towards achieving an overall macroeconomic balance. At this \nmeeting, the Committee was thus faced with the option of either continuing \nwith policy tightening or hold to observe the impact of previous rate hikes. \nFollowing an extensive review of risks and the near-term inflation outlook, the \nbalance of risks suggests further tightening of policy to build on the benefits \naccruing from previous rate hikes. \nKey Developments in the Domestic and Global Economies \nDomestic headline inflation rose further to 33.69 per cent in April 2024, from \n33.20 per cent in March, driven by both the food and core components. On \na month-on-month basis, however, headline inflation declined significantly to \n2.29 per cent in April 2024, from 3.02 per cent in March. The food and core \ncomponents also declined to 2.50 and 2.20 per cent from 3.62 and 2.54 per \ncent, respectively in the same period. According to the National Bureau of \nStatistics, real GDP grew by 3.46 per cent in the fourth quarter of 2023, \n \n3 \n \ncompared with 2.54 per cent in the third quarter, driven by both the oil and \nnon-oil sectors. Recent Purchasing Manager’s Index (PMI) suggests that \neconomic activities will continue to expand in 2024. In addition, staff \nforecasts indicate that the domestic economy will grow by 3.38 per cent in \n2024. \nAccording to the IMF, global growth in 2024 and 2025 is projected at 3.2 per \ncent apiece, while it revised Nigeria’s growth upwards to 3.3 per cent from \n3.0 per cent in 2024. The identified headwinds to this projection are the tight \nfinancial conditions and broad disruptions to the global supply chain \nassociated with geopolitical tensions and economic fragmentations. While \nthese are feeding directly into a rally in the prices of key commodities such as \ngrains and oil, global inflation is projected to continue to decelerate in 2024 \nbut could remain above the long-run objectives of advanced economy \ncentral banks. This group of central banks are likely to pause their rate hike \ncycles in the near term to observe the trend of inflation. \nAccordingly, the Committee will continue to monitor developments in the \nglobal and domestic economies to guide policy and ensure that inflation \nexpectations are adequately anchored. \nAll twelve members attended the meeting. The next meeting of the \nCommittee will hold on the 22nd and 23rd of July 2024. \nThank you. \nOlayemi Cardoso \nGovernor, \nCentral Bank of Nigeria \n21st May 2024 \n \n \n \n \n \n \n \n \n \n \n4 \n \n \nPERSONAL STATEMENTS BY \nTHE MONETARY POLICY COMMITTEE MEMBERS \nMPC MEETING MAY 20 – 21, 2024 \n \n1. AKU PAULINE ODINKEMELU \nI vote to raise the Monetary Policy Rate (MPR) by 100 basis points from 24.75 \npercent to 25.75 percent, retain the asymmetric corridor around the MPR at \n+100/-300 basis points, Cash Reserve Ratio of Deposit Money Banks at 45.00 \nper cent, and the Liquidity Ratio at 30.00 per cent. \nMy decision is influenced by the following developments: \n1. Global Economic Developments \nThe International Monetary Fund’s (IMF) World Economic Outlook of April 2024 \nprojected global growth at 3.2 per cent in 2024 and 2025. The drivers of \ngrowth in the global economy are the stronger than expected resilience in \nthe Advanced Economies, the Emerging market and Developing economies \nas well as fiscal support in China. The Advanced Economies are projected to \ngrow by 1.7 per cent in 2024 and 1.8 per cent in 2025, due to stronger than \nexpected growth in the US, partly offset by weaker-than-expected growth in \nthe Euro Area. Growth in the Emerging Markets and Developing Economies is \nexpected to moderate to 4.2 per cent in 2024 and 2025, notwithstanding the \nmixed performance across the various regions. Growth in sub-Saharan Africa \nis projected to rise to 3.8 and 4.0 per cent in 2024 and 2025, respectively, from \n3.4 per cent in 2023. The downside risks to growth remain geopolitical \ntensions, climate risk, tight financial conditions in advanced economies, and \nthe disruption to the global supply chain. \nThe continued resilience of the Nigerian economy is evidenced by the IMF’s \nupward revision of Nigeria’s growth forecast from 2.9 per cent in 2023 to 3.3 \nand 3.0 per cent in 2024 and 2025, respectively as well as data from the \nNational Bureau of Statistics (NBS) which indicated that Nigeria’s real GDP \ngrew by 3.46 per cent in the fourth quarter of 2023, compared to 2.54 per \ncent in the third quarter. The growth trajectory tends to suggest steady \ngrowth in a period of tight monetary policy, as against extant theory of tight \npolicy stance hurting growth. I understand that the effect may not be \ncontemporaneous, however, growth in an inflationary economy is merely \nstability of the graveyard. I, therefore, favor growth in a price stable \neconomy, and vote for further but gradual rate hike. \n \n5 \n \nGlobal inflation is projected to continue to moderate to an annual average \nof 5.9 per cent in 2024 and 4.5 per cent in 2025. The deceleration in global \ninflation is driven largely by tight financial conditions and sustained decline in \nthe prices of global commodities. In advanced economies, inflation is \nprojected to decline to 2.6 per cent in 2024 and 2.0 per cent in 2025 in line \nwith the long-run objectives of the central banks in this group. Inflationary \npressure in Emerging and Developing Economies is projected to remain high \nat 8.3 per cent in 2024, before moderating to 6.2 per cent in 2025, as the \nprices of food and energy are expected to trend downwards. The rise in \nNigeria’s headline inflation from 33.20 per cent in March 2024 to 33.69 per \ncent in April 2024 supports my resolve to vote for a sustained tight policy \nstance to effectively anchor inflation expectations. \n2. Domestic Economic Developments and Outlook \nAs argued earlier, the Nigerian economy remains resilient with real GDP \ngrowing by 3.46 per cent in the last quarter of 2023, from 2.54 per cent in the \nthird quarter. The IMF, World Bank and Federal Ministry of Finance, Budget, \nand National Planning, project the Nigerian economy to expand by 3.30, \n3.30, and 3.88 per cent, respectively, in 2024. Despite the growth path and \nthe resilience of the economy, growth is fragile due to domestic factors such \nas inflationary pressure, legacy issues and external factors – geopolitical \ntensions, climate change, tight financial conditions in advanced economies, \nand disruptions to the global supply chain. \nNigeria’s headline inflation rose from 33.20 per cent in March to 33.69 per \ncent in April 2024. Lingering security challenges in food producing areas, \ninfrastructural deficits, rising energy cost, and seasonal factors are the \nidentified drivers. The growth in money supply in March 2024, however, tends \nto suggest that structural factors alone may not account for the inflationary \npressure in the domestic economy. The continued depreciation of the Naira, \nhowever, may have accounted for the development. It is therefore important \nto sustain the tight policy stance, also curtail the demand for foreign \nexchange. \nTo effectively anchor inflation expectations, further tightening, albeit at a \ngradual pace, is important to sustain the gains observed in the decline on \nmonth-on-month headline, food, and core inflation between March and April \n2024. I appreciate the argument that further tightening may impact on the \nstability of the banking system through the deterioration of key financial \nstability indicators such as NPLs and CAR. I also understand the argument on \nthe other adverse effects of a high interest rate regime such as crowding out \neffect, higher cost of funds, and an inverted yield curve or short-term bias. \nWhile these arguments are plausible, containing inflationary pressure is \n \n6 \n \ncritically important to banking system stability and fostering a conducive \ninvestment climate. Given the moderation in the rate of change of price \ndevelopment (month-on-month), further but gradual tightening is important \nto consolidate and build on the gains already achieved from previous rate \nhikes. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7 \n \n \n2. ALOYSIUS UCHE ORDU \nGLOBAL ECONOMIC DEVELOPMENTS \nIn its April World Economic Outlook, the IMF projected growth of the global \neconomy at 3.2% and global inflation at 5.9% in 2024. Despite the multiple \nglobal headwinds, the US economy continues to account for a significant \nshare of the economic expansion. Although economic growth and consumer \nspending showed signs of slowing in recent months, the US labor market \nremained surprisingly robust. Data dependence is a bedrock principle of \nmonetary policy, so the hotter-than-expected data on the job market for \nMay complicated the forward path for Fed policy makers as they look for \nclearer signs of a slowing economy, confirming that inflation has fallen \nenough to ease tightening. \nThe ECB’s guidance for possible future interest rate cuts reflects progress \nmade in reducing annual inflation to 2.6% in May from 10.6% in October 2022. \nIt also reflects optimism about the improving prospects as latest data \nreinforced signs that the eurozone's economic recovery, though uneven \ncountry and sector-wide, is continuing to progress albeit with overall GDP \ngrowth of 0.8% in 2024. \nEarlier in the month, the Bank of Canada became the first G7 member to \nlower borrowing costs, dropping its policy rate by one-quarter of a \npercentage point to 4.75%. In the UK, inflation trended down to 2.3% in April, \nbut the Bank rate remained unchanged at 5.25%, the highest policy rate \nsince the 2008 global financial crisis. \nAfter months of overshooting their inflation targets, central bankers in \nadvanced economies are watchful as they trade off inflation and growth. \nIn emerging market economies, policy makers do not yet have the luxury of \nlowering borrowing costs. In Turkey, interest rates are at 50% as inflation hit \n75.5% in May 2024 from 69.8% in April. Argentina continues to battle multiple \ncrises, including inflation, which is heading towards 200%, a depleting reserve \nposition, and rising poverty levels. In most other Latin American and the \nCaribbean countries, economic growth will slow to 2% with inflation down to \n12.7% in 2024. \n \n8 \n \nGrowth in Asia and Pacific region has remained strong, with inflation \ndecelerating. India, Malaysia, the Philippines and Vietnam remain the league \nleaders in the world’s most dynamic region. \nIn Africa, the AfDB’s Africa Economic Outlook, released in May, projected \noverall real GDP growth of 3.7%, with East Africa as the fastest growing region \nwith 4.9% in 2024. West Africa is projected to record growth of 4.2% in 2024, \nreflecting stronger performances in Cote D’Ivoire, Ghana, Nigeria and \nSenegal. \nAfrica’s average inflation is estimated at 17.8% in 2024 on account of \nsustained high food and energy prices, and currency depreciations. In \nKenya, following four consecutive months of deceleration, inflation rose to \n5.10% in May from 4.98% recorded in April. And in Ghana, the authorities held \nthe monetary policy rate at 29% for the fifth consecutive month. \nThe tightened global financial conditions and high uncertainties continue to \nimpact external financial flows to Africa, with overall declines in foreign direct \ninvestment, official development assistance and portfolio investment. Across \nthe region, public debt levels remain high at around 60% of GDP in 2024, with \ndebt service payments eroding fiscal space and constraining investments in \nvital infrastructure and human capital development. \nWith the US dollar on track to remain stronger for longer on account of robust \nUS growth, high interest rates, and geopolitical risks, African economies will \nremain vulnerable as a stronger dollar raises the local currency costs of \nsettling their international financial obligations. A strengthening dollar will also \nexacerbate the impact of higher oil prices on inflation and increase pressure \non the balance of payments. \nDOMESTIC ECONOMIC OUTLOOK \nReducing Nigeria’s high inflation is both an economic and a political \nimperative of the first order. The MPC acted promptly and decisively during \nthe \nFebruary-March \nmeetings, \ndeploying \nthe \nblunt \ninstrument \nof \nexcruciatingly tight money. \nCBN staff presentations during the May meeting showed that Headline \ninflation (year-on-year) rose to 33.69% in April from 33.20% in March, driven by \nhigher food and energy costs. Food inflation jumped to 40.53% from 40.01% \n \n9 \n \nand Core inflation rose to 26.84% from 25.9% during the corresponding \nperiod, on account of increases in the price of farm produce and processed \nfood items; insecurity and infrastructure deficits; and cost-push factors \nincluding increased cost of fertilizers and transport logistics. \nPress coverage showed that the current state of play is wreaking havoc on \nconsumers, particularly those on the lower end of the income scale who are \nmore acutely feeling the pain from high inflation. This segment of our society \nis facing a myriad of challenges, including food and fuel, and they are \nfinancially strapped. \nThe CBN staff presentation also showed that on a month-on-month basis, the \nApril numbers indicate a decline in Headline inflation to 2.29% from 3.02%; \nFood inflation to 2.50% from 3.62%; and Core inflation to 2.20% from 2.54% in \nMarch 2024. \nClearly, one month does not constitute a trend, but the April numbers \nindicate that policy is taking effect though the later reversal of the naira’s \npositive momentum indicates continuing inflation risks. \nTo be sure, Nigeria is not the only emerging market economy that \nexperienced outflows of portfolio investments. The key lesson from other \ncountries, e.g., India, Indonesia, Vietnam, South Africa, etc., is to scale up \nimprovements in overall investment climate to attract foreign direct \ninvestments which is much more sustainable. Nigeria needs urgent actions on \nthis front. \nAlso, efforts to diversify Nigeria’s export base remains of utmost importance. \nMeasures are warranted to significantly boost oil production from 1.28 million \nbarrels per day, which is well below the OPEC quota of 1.58 million barrels per \nday, especially as oil prices are above US$80 per barrel. Much more could \nalso be done in the mining sector in view of the country’s rich endowment in \nmineral resources. \nClearly, monetary policy ought not be the only game in town for the express \npurpose of stabilizing Nigeria’s macroeconomy. An activist fiscal policy \nstance is urgently needed to bring inflation down quickly and painlessly. \nBesides, another substantial increase in the policy rate in May 2024 may raise \nmarket expectations both about the risks of inflation — because the MPC is so \n \n10 \n \nconcerned about it — and market expectations about the ultimate \nexpected tightening that we intend based on a balanced view of the \nevidence presented by CBN staff. Taking all the available evidence into \naccount, my own preference was for a moderate increase in the MPR at this \nmeeting. We need to continue to urge patience and to let our restrictive \npolicy stance do its work. \nI therefore voted to raise the MPR by only 100 basis points, and to hold the \nCRR and the asymmetric corridor at their current levels. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11 \n \n3. BALA MOH’D BELLO MoN \nOpening Statement \nAt the May 2024 MPC meeting, I voted to raise the monetary policy rate \n(MPR) by 150 basis points to 26.25 per cent from 24.75 per cent, whilst \nkeeping all other policy parameters constant viz: the asymmetric corridor \naround the MPR at +100/-300 basis points; Cash Reserve Ratio of Deposit \nMoney Banks at 45.00 per cent; and Liquidity Ratio at 30.00 per cent. My \ndecision to further tighten the stance of monetary policy was guided by the \ncontinued stickiness of domestic prices, as well as data on other domestic \nmacroeconomic indicators, discussed briefly in the following sections. \nConsiderations \nAccording to the National Bureau of Statistics (NBS), headline inflation (year-\non-year) rose to 33.69 per cent in April 2024 from 33.20 per cent in the \nprevious month, driven by increases in both the food and core components. \nIn April 2024, food inflation increased to 40.53 per cent from 40.01 per cent in \nthe previous period, while core inflation rose to 26.84 per cent from 25.90 per \ncent in the same period. Exchange rate passthrough to domestic prices and \nstructural issues continue to drive price movements in Nigeria. \nThe data also showed that previous monetary policy rate hikes and other \ncomplementary policies are yielding some positive results albeit slowly. \nMonth-on-month, headline inflation declined significantly to 2.29 per cent in \nApril 2024 from 3.02 per cent in the previous month. The month-on-month \ndeviation of annual core and food inflation also follows similar pattern. This \ndownward trend in the month-on-month rise in prices, thus suggests the need \nto press further with the tightening cycle to ensure that flattening of the \ninflation curve is quickly achieved to pave the way for a quick deceleration. \nIn addition, while money supply growth has been substantially reduced, it \nremains above the benchmarks for the year, thus, fueling credit growth \nabove the desired level for inflation to be fully curtailed. Tightening the \nstance of monetary policy further to slow credit creation, combined with \nongoing complementary fiscal policy initiatives is, thus, essential. \nExchange rate passthrough to domestic prices remains an important factor in \nthe current inflation pressure. While the pressure on the naira reflects supply \nand demand imbalances in the foreign exchange (FX) market, I am certain \nthat tightening the policy stance further would dampen demand pressure \nwhile also having a positive impact on autonomous FX supply as domestic \nyields improve. Recent approval of licenses of fourteen (14) international \nMoney Transfer Operators is expected to improve remittance flows to dowse \ndemand pressure. \n \n12 \n \nWith regards to financial system stability, data presented at the meeting \nshowed that all major financial soundness indicators (capital adequacy, non-\nperforming loans, and liquidity ratios) remained within their prudential \nthresholds. While industry earnings ratios have also remained comparatively \nstrong, there is the need to continue strengthening macroprudential and \ncapital buffers to further improve industry resilience to future shocks. \nReal GDP grew by 3.46 per cent in the fourth quarter of 2023, compared with \n2.54 per cent in the third quarter of the same year, driven by both the oil and \nnon-oil sectors. There are also indications that economic activities will remain \non a positive path as reflected in the Purchasing Managers’ Index (PMI) \nwhich increased from 42.8 index points in March 2024 to 49.2 index points in \nApril 2024. \nOn the global front, output growth in 2024 and 2025 is projected by the \nInternational Monetary Fund at 3.2 per cent a piece, indicating a steady \npace of recovery despite identified headwinds. Inflation is also expected to \ncontinue to decelerate across major economies even though it is likely to \nremain above the long-run objectives of several key central banks. \nConsequently, global prices could remain high and persisting headwinds \nneed to be curtailed to mitigate supply chain disruptions. \nOverall, for Nigeria, maintaining a tight monetary policy stance over the \nshort- to medium- term horizon remains the most ideal direction for monetary \npolicy. Among the limited instruments available to the Committee, my \npreference at this May 2024 meeting, is an upward adjustment of the \nMonetary Policy Rate due to its potency to impact both money supply \ngrowth and exchange rate appreciation simultaneously. As the trajectory of \nkey economic indicators unfolds, more information and assessments will \nbecome available to enable consideration of other policy instruments for \nfurther action. \n \n \n \n13 \n \n \n4. BANDELE A.G. AMOO \nHaving reviewed the developments in both the global and domestic \neconomies since the MPC meeting of March 26, 2024, I decided to vote as \nfollows. \n \n(a) \nRaise the Monetary Policy Rate (MPR) by 100 basis points from 24.75 \nper cent to 26.25 per cent. \n(b) \nRetain the asymmetric corridor around the MPR at +100/300 basis \npoints. \n(c) \nRetain the cash reserve ratio at 45.0 per cent. \n(d) \nRetain the cash reserve ratio of merchant banks at 14.0 per cent. \n(e) \nRetain the Liquidity Ratio (LR) at 30.00 percent. \n \nMy decision was based on the following developments within the global and \ndomestic economies. \n \n1 Global Economic Developments \n \nEconomic developments in the global economy since March 2024 continued \nto be resilient despite rising geopolitical tensions. Growth in the advanced \neconomies (AEs) recorded moderate improvement driven by expected \nimprovement in the US economy while growth in the emerging markets and \ndeveloping economies (EMDEs) is expected to moderate due to subdued \ngrowth in China. Even though the global economy is on a path of soft-\nlanding, the steady growth recorded is still faced with the challenges of wide \nfiscal deficits, weak export earnings, low growth in comparative trade, as well \nas slow domestic growth. \n \nHigh yields in gilt edged securities in the advanced economies has continued \nto mitigate significant capital inflows into the EMDEs. The high interest rate \nregime across several central banks, however, has implications for debt \nservicing especially for debt-ridden countries. Consequently, the current tight \nglobal financial conditions portend significant risk of a debt overhang for \nseveral sovereigns globally. \n \n2 Domestic Economic Developments and Outlook \n \nThe empirical impact of March 2024 MPC decisions on the major sectors of \nthe Nigerian economy showed mixed performances. Generally, the impact \non the monetary base, (especially growth in broad money), as well as the \nmoney and equity markets was mixed. \n \n14 \n \n \nThe CBN monthly composite PMI improved to 49.2 index pts in April 2024 from \n42.8 index points in March 2024 reflecting an expansion in new orders. This \nimproved development remained below the 50.0 index threshold. \n \nConsumers, however, expressed pessimism in their overall outlook on \neconomic conditions in Q1:2024 and Q2:2024. The negative outlook was \nattributed to unfavourable economic conditions; worsening family situation; \nand declining income purchasing power. \n \nOn a year-on-year (y-o-y) basis, headline inflation increased marginally to \n33.69% in April 2024 from 33.20% in March 2024. The same trend was recorded \nin respect of food (40.53%) and core inflation (26.84%). On a month-on-\nmonth (m-o-m) basis, headline inflation, however, declined to 2.29% in April \n2024 from 3.02% in March 2024. Food inflation (m-o-m), also decreased to \n2.50% in April 2024 from 3.62% in March 2024. The declines recorded were due \nto drop in prices of food & non-alcoholic beverage, farm produce, as well as \nthe opening of the borders, which led to inflow of staple agricultural products \nrespectively. \n \nSpecifically, the banking industry was adjudged relatively stable during the \nperiod under review as solvency and liquidity remained within the set \nregulatory standards. The maximum lending rate stood at 29.38% in March \n2024 from 26.55% in February level. \n \nWhile the naira exchange rate and external reserve levels increased slightly, \nthe overall BOP (US$’B) balance remained stable. The fiscal sector recorded \npositive impact as federal government revenue increased while the fiscal \ndeficit declined. \n \n3 MY CONCERN \n \nGiven the afore-mentioned developments, it is imperative that the current \nmonetary tightening regime which commenced at the February 2024 \nmeeting of the MPC, should continue, to allow complete policy pass-through \nto the Nigerian economy. Given the fact that Nigeria is competing for \ninvestment capital with comparable EMDEs such as Egypt, Ghana, Kenya \nand others, there is a compelling need to further move the policy rate slightly \nupwards. Inflation is globally receding but still higher than the targets of most \ncentral banks. Given the structure of the Nigerian economy, we expect the \ninflation pass-through to domestic prices to continue especially through \nimports. \n \n \n15 \n \nSubstantive progress in addressing the rising cost-push factors and other \nsupply-chain issues is required to minimize the risk that high inflation level \nmight remain for long. Exchange rate fluctuations in recent past caused lots \nof instability in production sectors and adversely affects people’s welfare in \nevery sector of the Nigerian economy. These heightened the high \nelectricity/energy deficit, unemployment, prevalent poverty, and high social \ninsecurity. Consequently, it presents a serious policy dilemma for the MPC, \ngiven the imperative to sustain the growth trajectory with limited tools at its \ndisposal, low productive capacity, high import dependence as well as the \nconstricted fiscal environment. Addressing these issues by monetary-fiscal \nrelationship and cooperation would greatly help to maximize the impact of \nmonetary policy on the Nigerian economy. \n \n \n \n \n \n \n16 \n \n \n5. EMEM USORO \n1.0 My Considerations \nGlobal developments since the last MPC meeting \nThe global economy remains on a solid path to recovery, as the service \nsector of major economies continues to expand, buoyed by business \noptimism. However, price levels across regions are exhibiting mixed trends, \nbut largely softening amidst fading relative price shocks, declining core \ninflation and energy prices, which is not unconnected with the increased \nglobal energy supply and tight monetary policies. According to the IMF, the \noutlook for global growth is optimistic, as the global economy is expected to \nremain resilient amid tight monetary policy stance, and fiscal support in \nChina. \nNotwithstanding, inflation in most economies has remained above central \nbank targets, thus, most central banks are maintaining higher-for-longer \npositions to rein in price levels while not losing sight of the trajectory of \ninflation in the medium-term. Overall, global inflation is expected to continue \nto decline in the near-term, albeit at a moderate pace, especially in the \nadvanced economies. \nGlobal financial conditions eased in the review period, due to investor \noptimism about lower long-term yields and stock market rallies while most \nglobal currencies weakened against the US dollar owing to country-specific \nfactors. \nOn the domestic front, inflationary pressures persisted at a slower pace on a \nyear-on-year basis as prices of food and core inflation continued to rise. On a \nmonth-on-month basis, however, there was a notable decline in headline, \nfood and core inflation since the last MPC meeting,. \nThe development in the domestic economy was occasioned by supply \ndisruptions of Premium Motor Spirit (PMS), high exchange rate pass-through, \nlingering infrastructural deficit and security challenges. \nIn addition, tight financial conditions, occasioned by the recent monetary \npolicy actions contributed to the recent price dynamics. Notably, average \nbanking system liquidity declined in April, from its previous level in March, \nresulting in a rise in key market rates and tight credit market conditions. In \naddition, reduced exchange rate pass-through, emanating from the modest \nappreciation of the naira exchange rate in April, supported the easing of \ninflation outcomes. \n \n17 \n \nIn parallel, economic activity has improved since the last MPC meeting, due \nto improved business optimism and fiscal support. Composite PMI rose further \nin April 2024, due to increase in agricultural production and slower \ncontraction in other subsectors. It is important to emphasise the strong \nassociation between agricultural output and deceleration in headline and \nfood inflation, implying that inflation is more supply-driven than demand-\ndriven. Thus, recent efforts by the Federal Government geared towards \nimproving productivity in the agricultural sector and ensuring food security is \ncommendable, given the potential to tame inflation. \nOn the fiscal side, limited revenue amid rising expenditure, with trickled down \neffect on inflation, continue to be a challenge. Rising public debt continues \nto limit the fiscal space with attendant threat to fiscal sustainability, even \nthough, the financial system remains resilient. \nOn the external front, recent upgrades of Nigeria's credit ratings from stable \nto positive by international rating agencies, such as Fitch and Moody’s have \nlent supports to investor confidence in attracting sizeable inflows to the \nofficial exchange rate market, thereby dousing demand pressures. \nResultantly, exchange rate fluctuations have been largely contained, and \nexternal reserves remain at a sufficient level in line with international \nstandards. \nTherefore, sustaining a tight monetary policy stance potentially makes \ndomestic yields more attractive for domestic and foreign investors, supports \nthe naira and accretion to the external reserves. It also helps tame imported \ninflation, which is crucial given the import-dependent nature of the Nigerian \neconomy. \nLooking forward, the domestic outlook remains cautiously optimistic, as the \neconomy is projected to expand in the near-term. This outlook is hinged on \nfiscal \nreforms, \ninfrastructural \ndevelopment \ninitiatives, \nefforts \ntoward \ncontinuous deepening of the financial markets through FCY-denominated \ndebt instruments, positive expectations around crude oil prices, increased \ndomestic oil production, and commencement of operations at the Port \nHarcourt refinery. Additionally, tight monetary policy stance is expected to \nsupport this outlook by attracting more capital inflows to improve accretion \nto reserves. Inflation is, however, expected to remain elevated, but \ncommence moderation in the second half of the year, due to the tight \nmonetary policy, and base effects. \nA risk assessment reveals the existence of several risks confronting the \nglobal and domestic economies. In the global economy, these include \nescalating geopolitical tensions and the impact of climate change, which \nmight heighten uncertainties and disrupt global markets. On the domestic \n \n18 \n \nfront, supply chain disruptions emanating from geopolitical tensions and \nother supply shocks such as increase in electricity tariffs, exchange rate \ndepreciation, among others, pose a threat to price stability in the near term. \n2.0 \nMy Decision \nI remain committed to the Committee’s disinflationary drive, to stabilize \neconomic conditions and improve the well-being of the Nigerian citizenry. \nConsequently, on the basis of the above developments and outlook for both \nthe global and domestic economies, I vote to: \ni. \nRaise the MPR by 150 basis points to 26.25%, to further tighten financial \nconditions, reduce the negative interest gap and attract more capital \ninflows to stabilize the naira exchange rate. \nii. \nRetain the asymmetric corridor at MPR +100/-300 basis points. \niii. \nRetain the CRR for Merchant banks and Commercial banks at 14% and \n45%, respectively, to realise the full benefits of the bank lending \nchannel of monetary policy transmission; and \niv. \nRetain the LR at 30.0%. \n \n \n \n \n \n \n \n \n \n \n \n19 \n \n \n6. LYDIA SHEHU JAFIYA \nGlobal economic growth has remained strong, supported by improved \neconomic activities in the US and robust fiscal support in China. Recent data \nregarding the Composite Performing Managers Index (Composite PMI) \nsuggests that economic activity expanded in April 2024, remaining above the \n50.0 index points benchmark for the fifteenth consecutive month. The IMF \nWorld Economic Outlook (WEO) released in April 2024, forecast global growth \nat 3.2 per cent in 2024. Growth in the Advanced Economies is projected to \nrise to 1.7 per cent in 2024, while in Emerging Market and Developing \nEconomies (EMDEs), growth is expected to increase to 4.2 per cent in 2024. \nGlobal inflation is decelerating but remains above the long-run targets for \nmany central banks. Despite reaching the peak of their interest rate hike \ncycles, many central banks remain cautious about relaxing the restrictive \nstance of monetary policy, given the lingering upside risks to price stability, \nincluding geopolitical and country specific factors. The IMF April 2024 WEO, \nprojected global inflation at an annual average of 5.9 per cent in 2024, from \n6.8 per cent in 2023. \nInternational trade is solidly picking up, indicating a partial normalization of \ntrade patterns, notwithstanding escalating geopolitical tensions and \ndisruptions in major sea routes. \nForeign capital inflows to Emerging Markets improved, as Advanced \nEconomies steadily approach the end of their monetary policy tightening \nregimes. \nTHE DOMESTIC ECONOMY \nThe domestic economy grew by 3.46 per cent (year-on-year) in Q4 2023 from \n2.54 per cent in Q3 2023. Non-oil output grew by 3.07 per cent, while oil GDP \nexpanded by 12.11 per cent, after 14 consecutive quarters of contraction. \nServices, Industry and Agriculture sectors grew by 3.98 per cent, 3.86 per \ncent, and 2.10 per cent, respectively. The solid pace of economic expansion \nis reinforced by recently released Q1 2024 real GDP data which indicated an \noutput growth of 2.98 per cent (year-on-year) in Q1 2024, higher than the 2.31 \nper cent recorded in Q1 2023. \nHeadline inflation (year-on-year) inched up by 0.49 percentage points to \n33.69 per cent in April 2024 from 33.20 per cent in March 2024, largely driven \nby food and core inflation, which increased to 40.53 per cent and 26.84 per \ncent, respectively, in April 2024. Month-on-month, headline inflation declined \n \n20 \n \nto 2.29 per cent in April 2024 from 3.02 per cent in March 2024, driven by \nmoderations in both the food and core components. \nInflation expectation declined to 26.50 per cent in April 2024 from 28.34 per \ncent in the preceding month. The moderation in expectations reflect the \nimpact of the appreciation of the naira in April 2024, the Bank’s resolve to \nsustain the current restrictive monetary policy stance to address inflation \npersistence and ongoing credible fiscal policies, as well as commitment to \nfiscal responsibility. These have collectively contributed in restoring public \nconfidence and anchoring inflation expectations. \nFinancial soundness indicators remain within their regulatory requirements, \nindicating safety and soundness of the banking system. \nCONSIDERATION FOR VOTING \nThe economy has sustained a positive growth trajectory since exiting the \nCOVID-19 induced recession. Even though headline inflation year-on-year, \nrose at a moderated pace, the significant decline in the month-on-month \nmeasure, indicates that the monetary policy tightening of the last two MPC \nmeetings has started to impact on prices. \nThere is no gainsaying that domestic financial conditions are tight and may \nbe putting upward pressure on public debt service, however, further \ntightening of monetary policy will help restore investor confidence and \nsustainable recovery of output growth. \nWhile the current specter of inflation is driven by both monetary and \nstructural factors, the Government remains committed to providing the right \nfiscal support to address structural side bottlenecks. For instance, most fiscal \nrevenue collection platforms have been automated to improve revenue \ngeneration and facilitation of non-oil export trade. Indeed, revenue \ngeneration has witnessed enormous improvement which has enabled the \ngovernment to meet its debt obligations and thus ease pressure from the \ntight financial conditions associated with tighter monetary policy. It also \ncontinues to invest in affordable public transportation system, infrastructure \ndevelopment and improvement of the security situation to support economic \nactivities. \nConsidering that high yields in Advanced Economies continue to attract \nforeign capital destined for EMDEs including Nigeria, there is need to firmly \nanchor inflationary expectations to moderate the volatility in the exchange \nrate through a sustained hike in the policy rate. I thus aligned with the view to \nsustain the current tight stance of policy, albeit moderately, so as not to hurt \ninvestments and economic growth. \n \n21 \n \nIn the light of the foregoing considerations, I voted for a relatively modest \nincrease in the Monetary Policy Rate (MPR) by 100 basis points, while \nmaintaining all other policy parameters at their extant levels. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22 \n \n7. LAMIDO ABUBAKAR YUGUDA \nGlobal Developments \nThe recovery of the global economy is expected to progress at a slower \npace. The IMF expects global GDP to grow at 3.2 per cent for 2024 and 2025. \nThough this expected growth is significant, the sustained tightening by \nleading central banks has kept it under the historical trend line. Growth in the \nEmerging Markets & Developing Economies (EMDEs) would be stronger \ncompared to the Advanced Economies (AEs), although the relative \ncontribution of EMDEs to the total size of the global economy, lags that of \nAEs. For 2024 and 2025, growth in EMDEs would hold steady at 4.2 per cent. \nFor the AEs, growth will improve from 1.7 per cent to 1.8 per cent, propelled \nby better-than-expected outturn in the US. \nGlobal inflation is expected to decelerate to 5.9 per cent in 2024 and further \nto 4.5 per cent in 2025 from 6.8 per cent in 2023. Food inflation is expected to \nhelp moderate prices with expected decline in commodity prices in 2024. \nThe decline in inflation is expected to be priced in by markets, thus raising the \nexpectation of rate cuts among central banks, and as a result bond yields in \nseveral countries have commenced a gradual decline in response. The \nequity markets have also responded to the expectation of change in policy \nstance with most indices recording positive performance. Overall, AEs are \nexpected to reach their long-term inflation objectives quicker than the \nEMDEs. \nDomestic Developments \nThe Nigerian economy grew by 2.98 per cent in Q1:2024. This performance \nwas better than the corresponding period of 2023 (2.31 per cent), but below \nthe growth achieved in Q4:2023 (3.46 per cent). Growth in Q1:2024 was \nmainly driven by the services sector, which contributed 58.04 per cent to \naggregate GDP. Agriculture and industry grew by 0.18 per cent and 2.19 per \ncent respectively. The main subsectoral highfliers in terms of contribution \ninclude crop production (19.24%), trade (15.70%), and telecommunications \nand information services (14.58%). The performance of crop production is \nparticularly encouraging given its prospect of helping to lower domestic food \ninflation. However, agriculture underperformed in Q4:2023. \nThe gains made in the oil sector in Q4:2023 was sustained in Q1:2024 as it \ngrew by 5.70 per cent in Q1:2024 compared to 12.11 per cent in Q4:2023. Oil \nbeing the mainstay of foreign exchange earnings should grow consistently to \nhelp drive the economy on a sustainable path. In this regard, it would be \nnecessary that the impediments to the performance of the sector are \nadequately addressed with a view to reaching Nigeria’s OPEC oil production \nquota. \n \n23 \n \nThe PMI for April improved to 49.2 index points from 42.8 index points in \nMarch. While this remains within the contractionary region this improvement, \nif sustained for May and June, would suggest that the business environment is \nresponding positively to the more stable exchange rate environment despite \nthe increasing cost of borrowing. \nThere is still considerable pressure on domestic prices, given the continued \nrise in headline inflation to 33.69 per cent in April from 33.20 per cent in \nMarch. Although the core component also increased, the pressure from food \ndeserves urgent steps to ensure enhanced food supply. As the Bank wields its \ninstruments to combat inflation, it is imperative that the fiscal authorities fast-\ntrack solutions to ensure that farm produce moves seamlessly from farm gates \nto consumption centres. The need for improved security and appropriate \npricing of energy cannot, therefore, be over-emphasized. \nMonetary developments were somewhat encouraging in March 2024. Broad \nmoney (M3) grew by 16.52 per cent over end-December 2023, reflecting a \ngrowth in Net Foreign Assets (NFA) and a decline in net domestic assets \n(NDA). The increase in the NFA bodes well for the health of the external \nsector, helping to increase liquidity in the foreign exchange market. \nConsequently, the external sector posted a favourable position, with an \noverall BOP surplus. The decline in Net Domestic Assets (NDA) also contains \ngood news as it was mainly on account of reduced claims on government. \nAlthough there was marked improvement in the Federal Government \nretained revenue in the first quarter of 2024, relative to the corresponding \nperiod in 2023, it fell short of the budget projection such that the overall fiscal \ndeficit was higher than the target for the quarter. \nFor the external sector, although the country posted a surplus in the Balance \nof Payments in Q4:2023, in contrast to the deficit in Q3:2023, the current \naccount recorded a deficit in Q4:2023, indicating that more needs to be \ndone to increase the level of exports, while at the same time reducing \nimports by substituting them with locally made products. \nIssues to Consider by the MPC \nI. \nFighting \ninflation \nremains \nthe \nkey \nto \nachieving \nother \nmacroeconomic objectives: inflation remains a major challenge \nfor the economy as it is still way above the threshold, and our \ninstruments must be deployed to counter the trend, to promote \ngrowth in the economy. \nII. \nThe strengthening of the US dollar in the face of widening \ninflation differential between Nigeria and AEs (especially, the US) \nhas implications for both the naira exchange rate and the \nprospects for Foreign Portfolio Investment inflows to Nigeria. FPI \n \n24 \n \ninflows are important to stabilizing Nigeria’s foreign exchange \nmarket in the short-to-medium term until the CBN’s traditional \nsources of foreign exchange improve. \nIII. \nThe stronger US dollar is having adverse spillover effects in many \ncountries, and that could, in part, explain the recent fluctuations \nin the naira exchange rate. \nIV. \nStudies have shown that structural factors are also driving \ninflation, therefore, the fiscal authorities must step up efforts to \naddress these factors, while the Bank continues to deploy its \ninstruments to douse the demand-side component of inflation. \nV. \nThe deceleration in month-on-month inflation is indicative that \npolicy actions thus far are having the desired impact and, \ntherefore, there is the need to sustain the policy stance to \nmaximize the gains already accruing. \nMy Vote \n1. Raise the MPR by 150 basis points. \n2. Keep all other policy parameters unchanged. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25 \n \n8. MUHAMMAD SANI ABDULLAHI \nMy Vote \nThe upside risks and uncertainties identified at both the February and March \n2024 meetings of the MPC still pose some challenges to domestic price \ndevelopments. From the April 2024 inflation data released by the National \nBureau of Statistics (NBS), year-on-year headline inflation remains high at \n33.69 per cent. However, detailed analysis of the inflation numbers suggests \nthat the rate of change has slowed, indicating that the effect of the previous \nrate hikes may have started setting in. Additionally, the month-on-month \nnumbers show a clear deceleration in all measures of headline, food, and \ncore inflation. The choice at this meeting, therefore, is either a hold stance to \nallow the impact of the previous rate hikes continue to permeate the \neconomy or tighten further to consolidate the current gains in slowing down \nprice development. In arriving at my decision, I considered the economic \ncost of higher interest rates to borrowing, consumer spending and output \ngrowth and the risks of higher inflation on these and other macroeconomic \nvariables. Having voted for two consecutive significant hikes in the past, I am \nconvinced that a further hike at this time will be consistent with my decisions \nat the February and March 2024 meetings of the Committee and necessary \nto signal our stance on curtailing inflation. At this meeting, therefore, I voted \nto: \n1) Increase the MPR by 150 basis points to 26.25 per cent from 24.75 per \ncent. \n2) Retain the asymmetric corridor at +100/-300 basis points around the \nMPR. \n3) Retain the CRR at 45.00 per cent. \n4) Retain the CRR for Merchant Banks at 14.00 per cent; and \n5) Retain the Liquidity Ratio at 30.00 per cent. \nMy Considerations \nThe choices before the MPC at this meeting are the same as in the February \nand March 2024 meetings - stemming inflation to allow for medium to long \nterm sustainable growth. At both MPC meetings, I spared no details regarding \nthe deep realities that the prevailing inflationary pressures could create, \npotentially, driving prices even higher and undermining the credibility and \nintegrity of monetary policy if no significant actions were taken to steer \nheadline inflation downward. My analysis of the situation, fitted more \nappropriately to the empirical evidence at the disposal of the Committee at \nthose meetings. The April 2024 headline inflation figure of 33.69 per cent, \nbroad money (M3) growth and inflation outlook further substantiate this \nposition. Reflecting the weight of evidence, this has not changed, in my \n \n26 \n \njudgement. Therefore, we must continue to do whatever it takes to address \nthese concerns. Notwithstanding the tepid growth in output, there is no \nambiguity regarding the medium to long term trade-off between growth and \nthe cost of higher inflation. \nAlthough the recent data shows that headline inflation remains high, our \ndesire to shorten the recovery period towards a low inflation environment has \ngained traction with the April 2024 inflation numbers which showed that the \nrate of increase in headline inflation slowed thus suggesting that inflation \ncould be nearing its peak. The month-on-month inflation eased across all \nmeasures in April 2024 - headline, food, and core, for the first time since \nOctober 2023. The development could be further enhanced if other structural \nissues driving price increases are simultaneously addressed. Bearing in mind \nour responsibility towards addressing inflation and stemming the risk of its \nresurgence, the primacy of stability is consequential and will remain the focus \nof policy using all available monetary policy instruments. This suggests \nunambiguously that monetary policy must not change its course of action, \nwith the CBN keeping the policy rate high to attract the much-needed \ninflows that would support foreign exchange market liquidity. \n \nThe Bank’s response to the drivers of headline inflation may be limited to \nmonetary causes. Thus, we must also strengthen the conversation with fiscal \npolicy, around combating food inflation, addressing food security and the \nentire food production ecosystem. Growing the food economy will \ncomplement our monetary policy actions as well as lead to job and wealth \ncreation and thus, push the Nigerian economy to full recovery. To this end, I \napplaud the efforts of the Federal Government to boost food production and \nsupply through deliberate and targeted interventions in the entire agricultural \nvalue chain. Regarding the exchange rate passthrough to domestic prices, \nthe data shows that volatility has reduced measurably in the aftermath of the \nMPC’s March 26, 2024, rate hike. I am, therefore, optimistic that stability in the \nforeign exchange market will bring about effective demand planning and \nmanagement and optimization of business processes. The stability is \ncomplemented by consumer and business expectations which are now \nanchored on monetary policy actions as indicated by the inflation \nexpectations survey of April 2024. \n \nThe fiscal deficit decreased month-on-month, by 30.5 per cent to negative \n1.07 trillion naira in March 2024 from negative 1.55 trillion naira recorded in \nFebruary 2024. Improved oil production and revenue collection arising from \nongoing reforms will lead to wider fiscal space that will enhance overall \ngovernment fiscal operations and positive fiscal outlook and the ability to \nfinance the 2024 budget. \n \n27 \n \n \nPortfolio inflows have continued to respond to ongoing reform efforts and \nother complementary measures with the economy posting continued \npositive net inflow since the beginning of 2024, despite increased outflows. \nEconomies within the emerging markets will continue to compete with the \nadvanced economies for capital inflows to the extent that the rates remain \ncompetitive. Notwithstanding, market data shows increased month-on-\nmonth inflows with total inflows into the economy at US$29.75 billion as of April \n2024. The inflows reflect investor perception of the reforms and have \nsupported efforts to stem volatility in the foreign exchange market with \ngreater potential for price stability. \n \nGlobal and Domestic Developments \nFrom available data, global growth would continue to remain in positive \ntrajectory in 2024 albeit at a pace below historical averages because of the \nlagged impact of previous monetary rate hikes, heightened geopolitical risks, \ninflation risk, economic divergences and energy and food crisis, amongst \nothers. Global growth is forecast at 3.2 per cent apiece in 2024 and 2025 (IMF \nWEO April 2024). In the Advanced Economies, growth is projected to expand \nto 1.7 per cent in 2024 before rising to 1.8 per cent in 2025, reflecting stronger \nthan expected output in the US and other large economies, despite tight \nlabor market conditions. Growth in the Emerging Markets and Developing \nEconomies is, however, expected to remain at 4.2 per cent apiece in 2024 \nand 2025, despite the expected mixed performance across the various \nregions. The recovery in the EMDEs is expected to progress moderately with \nChina and India posting significant output growth in Q1:2024. While China’s \ngrowth is driven by expansion in industrial production, India’s real estate, \nservices and finance sectors will account for its projected growth. Inflation in \nthe Advanced Economies is expected to return to their long-run objectives \nsooner than the Emerging Market and Developing Economies. However, the \nlingering downside risks and uncertainties to the recovery of the global \neconomy identified at the February and March 2024 meetings of the MPC \nremain. \n \nNigeria’s gross domestic product (GDP) expanded by 2.98 per cent (year-on-\nyear) in Q1 2024 compared with 3.46 per cent (year-on-year) in Q4:2023, \nindicating that the economy remains on a growth trajectory. The improved \nperformance in Q1:2024 was driven majorly by the services sector which \nrecorded a growth of 4.32 per cent in Q1:2024 and contributed 58.03 per \ncent to aggregate GDP. In addition, the improvement in oil production with \nan average daily production of 1.57 mbpd in Q1:2024 is expected to support \nthe tepid recovery. The Purchasing Managers Index (PMI) improved slightly to \n49.2 index points in April 2024, from 42.8 index points in March 2024. Services \n \n28 \n \nand industry PMI contracted, while agriculture PMI expanded during the \nperiod. \n \nInflationary pressures have continued as headline inflation, year-on-year, rose \nto 33.69 per cent in April 2024 from 33.20 per cent in March driven by food \nand core inflation. However, the rate of increase for headline and food \ninflation slowed for the first time in April 2024 suggesting that inflation could \nbe nearing its peak. The month-on-month measure showed a decline across \nall measures in April 2024 - headline, food, and core for the first time since \nOctober 2023. Analysis of the inflation expectations survey for the month of \nApril 2024 showed a decline in the inflation expectation index, indicating that \nrespondents expect prices to moderate at a gradual pace. The outcome of \nthe survey is consistent with the actual month-on-month inflation numbers in \nApril 2024. This is an indication that notable gains are being made and the \nBank is coming strong on curtailing inflation. Additionally, it is salutary that \ndomestic food items which remain the major driver of headline inflation \nshowed a significant moderation of 112 basis points (1.12 per cent) in April \n2024. \n \nProvisional survey numbers indicate that the broad money supply (M3) grew \nyear-to-date by 24.60 per cent at end-April 2024, a deviation of 9 \npercentage points above the 15.60 per cent provisional benchmark for 2024 \ndriven largely by increase in Net Foreign Assets (NFA). Month-on-month, M3 \ngrowth was lower at 4.75 per cent in April 2024. \n \nDevelopments around Nigeria’s external sector has continued to be \ninfluenced by uncertainties around the global economic environment and \nother exogeneous factors. Notwithstanding the overall balance of payments \nin Q4 2023 recorded a surplus position of 0.3 per cent of GDP, compared with \na deficit of -0.9 per cent of GDP in Q3 2023. The current account also posted \na surplus of 4.16 per cent of GDP in Q4 2023 from 1.90 per cent of GDP in Q3 \nof 2023 following improvements in merchandise trade. \n \nData on the banking system shows that it remains safe, sound, and resilient. \nThe major reforms announced recently on bank recapitalization will improve \nthe robustness of the system and enhance the ability of Nigerian banks to \ncontinue to play their intermediation role and foster financial inclusion. This is \nin addition to innovations such as in digital banking, protection against cyber \nthreats and keying into advancements in financial technology to enhance \nservice delivery and overall stability. \n \n \n \n29 \n \n \n9. MURTALA SABO SAGAGI \nContext \nThe recent international credit rating of Nigeria by S&P Global Ratings of ‘B-/B' \nsuggests a positive outlook, while the Fitch rating of ‘B-‘indicates a stable outlook \nfor the country. Both rating agencies noted the economic reforms implemented \nby the government to restore domestic and international confidence in the \neconomy. Equally, they expressed concerns over structural rigidities that \ndiscourage investments in productive sectors and issues related to fiscal discipline. \nAccordingly, the task of boosting productive capacity and reducing fiscal \ndominance amidst the current monetary tightening stance of the Central Bank \nremains a critical challenge to reducing inflation in Nigeria. The efficacy of \nmonetary policy tightening, a global best practice of taming inflationary \npressure, is largely dependent on government’s reform agenda anchored \naround reducing market distortions, stimulating inclusive economic growth and \nfostering innovation. \nInnovation, in particular, is key to achieving economic growth, contributing \nabout two-thirds of Europe’s economic growth in recent decades (European \nInvestment Bank, 2023). Ironically, Nigeria’s innovativeness ranks 109th among \nthe 132 economies and also ranks 11th among the 28 Sub-Saharan African \neconomies (Global Innovation Index, 2023). This largely explains the limited \ngrowth prospect of the country even though the economic growth prospects \nof Emerging Markets and Developing Economies (EMDEs) is projected to \nsurpass the global growth forecast. The task before the Nigerian economic \nmanagers \nis \nto \nharness \nlocal \nresilience \nwith \ndiverse \nsources \nof \ncomparative/competitive advantages to maximally benefit from the \nmoderating global inflation and the projected increase in global trade and \ninvestments. \nGlobal and Domestic Economic Environment \nIn today’s world, volatilities are the new normal. Amidst global uncertainties, \nmodest economic recovery and relative ease in inflationary pressure is \nprojected in 2024. The global growth forecast for this year remains at 3.2 per \ncent while global inflation is expected to decelerate from 6.8 per cent in 2023 \nto 5.9 per cent in 2024 (IMF, 2024). Also, the economic growth rate in the \nEMDEs is also expected to remain at 4.2 per cent in 2024 while inflation is \nexpected to remain unchanged at 8.3 per cent in 2024. The decreasing \nglobal inflation is largely driven by decline in the prices of global commodities \nand the aftermath of tight monetary policies. \n \n30 \n \nEven though inflation is just moderating in developing countries, the \nmonetary authorities of Kenya, South Africa and Ghana maintained their \nrates in their recent policy meetings. In these countries, however, real rates \nhave recently turned positive mainly due to easing inflation and improved \ngrowth outlook. In Nigeria, however, the negative real interest rates persists \ndespite recent considerable interest rate hikes. Inflation continues to rise \nmainly due to high cost of energy, naira devaluation and persistent high cost \nof food. Headline inflation (year-on-year) rose to 33.20 per cent in March 2024 \nfrom 31.70 per cent in February (NBS, 2024). More worrisome is that the \neconomy is projected to expand by only 3.38 per cent in 2024 (CBN, 2024). \nConsidering the enormous growth opportunities ranging from solid minerals, \nagriculture, industry, trade and service, and high youth population (15-35 \nyears) estimated by the National Youth Survey, 2020, at 95,315,144 million, \nnearly 50% of the total population, Nigeria is, thus, in a unique position to aim \nat double digit growth anchored around food and energy security and \nexport diversification. \nThe net foreign exchange inflows for March was only US$3,734.29 million \nsuggesting the need for renewed policy direction towards innovations and \nexports. In the process, the nation’s foreign reserve which currently stood at \nUS$32.21 billion would be significantly enhanced and, in turn, build \nconfidence and enhance stability of the naira which exchanged for N1, \n440.00/US$ in April. \nThe pursuit of price stability, financial stability and exchange rates stability by \nthe Central Bank would constantly be challenged by shocks and internal \nrigidities. Also, increasing food prices will further complicate future monetary \npolicy decisions. However, when economic managers think and act in line \nwith the overall national needs for rapid development of strategic industries, \nas exemplified by the Korean Development model and pursue governance \nwith the kind of discipline demonstrated by leaders of Singapore, Nigeria \nwould, in the not-too-distant future, regain its strategic status in the comity of \nnations. \nMy Vote \nConsistent with the tight monetary policy stance of the Bank to curb inflation \nusing available monetary tools, I vote to: \n Raise the Monetary Policy Rate (MPR) by 100 basis points. \n Retain the Asymmetric Corridor around the MPR to +100/-300 basis \npoints. \n Retain the Cash Reserve Ratio of Deposit Money Banks at 45.0 per \ncent. \n Retain the Cash Reserve Ratio of Merchant Banks at 14.0 per cent. \n \n31 \n \n Retain the Liquidity Ratio at 30.0 per cent. \nRecommendations \n1. Improve credit ratings: To complement measures aimed at price stability, \nthe government’s growth and recovery agenda should aim at identifying \nand nurturing strategic industries across sectors to rapidly promote domestic \nproductivity and competiveness, thereby improving the country’s growth \nprospects in the medium to long term. \n2. Innovation: Develop strong inter-MDA national innovation framework \ncovering high potential sectors and use public-private dialogue and \npartnerships to foster innovation, especially among the youth. \n3. Communication and partnership: Improve the communication of monetary \npolicy to a wide range of stakeholders and foster strategic partnerships to \nanchor inflation expectations, restore stability, attract investments in \ninfrastructure and industry, implement agricultural development policies, and \nfoster inclusive growth. \n \n \n \n \n \n \n32 \n \n10. MUSTAPHA AKINKUNMI \nContext \nRecent exchange rate fluctuations and significant passthrough from \ninternational commodity prices, along with domestic supply shocks, have \ncontinued to exert inflationary pressures, leading to an increase in headline \ninflation. However, the growth of inflation on a month-to-month basis has \nmoderated somewhat due to the tightening of monetary policy in the recent \nmeetings. \nIn response to these developments, the Central Bank reaffirms its \ncommitment to ensuring the necessary conditions for sustainable economic \ndevelopment and maintains its primary mandate to achieve price stability \nover the medium term. Accordingly, the Monetary Policy Committee (MPC) \nwill persist in targeting inflation as its principal anchor while allowing the \nexchange rate to be determined by market dynamics. \nThe unification of the exchange rate remains a critical goal since it helps to \neliminate foreign exchange backlogs and close the gap between the official \nand parallel exchange rates. Considering these factors, and in alignment \nwith the MPC’s ongoing tightening stance, I support the decision to raise the \nMonetary Policy Rate (MPR) at the May 2024 meeting of the MPC. \nThe Global Economy \nThe global economy showed slight improvement in the Purchasing Managers' \nIndex (PMI), with the index moving from 52.3 in March 2024 to 52.4 in April \n2024, driven by an expansion in new orders. The global services PMI rose, \nwhile the global manufacturing PMI slightly decreased. \nThe International Monetary Fund (IMF) has revised the global economic \ngrowth forecast for 2024 slightly upwards to 3.2%, from an initial 3.1%, \nsupported by increased global resilience and fiscal support from China. \nGrowth in the advanced economies is now expected to reach 1.7%, up from \nthe earlier projection of 1.5%, largely due to stronger-than-expected growth \nin the US, which is expected to offset weaker growth in the Euro Area. With a \nprojected growth rate of at 4.2% in 2024 and 2025Emerging Markets and \nDeveloping Economies (EMDEs) are projected to drive global growth, with \ntheir economies expected to grow, led by steady growth in China and \ndynamic growth in India. \nReal GDP growth in the United Staes in Q1 2024 decrease to 1.6% from 3.4% in \nQ4 2023. In the Euro Area growth in Q1 2024 was modest at 0.4%, driven by \n \n33 \n \nwage-induced private consumption. The UK exited recession with 0.2% \ngrowth in Q1 2024, thanks to expansions in the service sector and improved \nproduction, while India is projected to grow at 6.8%, and China at 4.6%. \nGlobal inflation is expected to decrease from 6.8% in 2023 to 5.9% in 2024 and \n4.5% in 2025, driven by falling energy and goods prices and easing supply \nchain pressures. In the advanced economies, inflation is projected at 2.6% in \n2024, reducing to 2.0% in 2025. The US, Eurozone, and Japan all saw slight \ndecreases in inflation in early 2024. \nIn the EMDEs, inflation is expected to remain steady at 8.3% in 2024 but \ndecrease to 6.2% in 2025 due to falling food and energy prices as well as \nprogressive monetary policy tightening. Inflation rates in the review period \nvaried across countries, with some like China and Nigeria experiencing \nincreases, while others like India, South Africa, and Kenya saw decreases. \nIn the review period, most central banks maintained stable policy rates to as \ninflation showed signs of moderation. The US Federal Reserve, Bank of \nEngland, and European Central Bank kept their rates unchanged to target \ntheir respective inflation goals. However, Nigeria and Indonesia raised rates \nto manage inflationary pressures, while Chile reduced its rate to support \neconomic growth. \nThe Domestic Economy \nIn 2023, Africa's economic growth was 3.2%, significantly trailing Asia's nearly \n5% growth. Despite a growing population, Africa struggles with widespread \nincome inequality, resulting in slower per capita growth compared to Asia. \nNigeria is expected to grow by 3.3% in 2024, fueled by improvements in oil \nand agricultural outputs and enhanced security measures despite losing its \nstatus as Africa's largest economy, ranking behind South Africa and Egypt, It \nremains notable for having the second-highest number of fast-growing \ncompanies on the continent. The annual real GDP dropped to 2.74% in 2023 \nfrom 3.10% in 2022. Q1 2024 growth was 2.98%, primarily driven by the services \nsector, which grew by 4.32%. However, agriculture and industry sectors saw \ndeclines. The overall PMI for the Nigerian economy improved to 49.2 index \npoints in April 2024, though still below the 50.0 index point threshold driven by \nimproved agriculture sector PMI of 51.5 in April 2024. \nThe shift towards orthodox monetary policy aims to stabilize high inflation, \nwhich stands at 33.69%—the highest in three decades. Headline inflation rose \nto 33.69% in April 2024, driven by food supply deficits and security challenges. \nThe debt-to-GDP ratio is expected to reach 46.59% in 2024 and 46.83% in \n \n34 \n \n2025, but remain lower than the EMDE average. While year-on-year food \ninflation rose to 40.53% in April 2024, It, however, decreased month-on-month \nto 2.29% in April 2024. \nDecision \nGiven the recent decisions by the Monetary Policy Committee (MPC) to raise \nkey policy rates, I believe that the current monetary stance is suitably \npositioned to drive inflation towards a downward trend. We will continue to \nmonitor its impact on the economy following a data-driven approach. The \nMPC emphasizes that future policy rate adjustments will be guided by \ninflation expectations rather than current rates, and we will not hesitate to \nuse all available tools to ensure that our policy stance is focused on \nmoderating inflation to maintain price stability. In alignment with these \nobjectives, I vote to increase the Monetary Policy Rate (MPR) by 150 basis \npoints while keeping other variables unchanged. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n35 \n \n11. PHILIP IKEAZOR \n \nThe persistent pressure on the general price level justifies a sustained tight \nstance in all the instruments of monetary policy. However, to encourage \ngrowth, there should be restraint on the choice and the margin of elevation \nof policy instruments. Noting that averting hyperinflation takes priority over \ngrowth at this time. \n \nI therefore voted to: \n \n1. Raise MPR by 150 basis points to 26.25 from 24.75 per cent. \n \n2. Retain the Asymmetric Corridor at +100/-300 basis points. \n \n3. Retain the Cash Reserve Ratio (CRR) of DMBs at 45.00 per cent. \n \n4. Retain the Cash Reserve Ratio of Merchant Banks at 14.00 per cent. \n \n5. Retain the Liquidity Ratio at 30.00 per cent. \n \nDevelopments in the Global and Domestic Economy \nThe global economic recovery continues to show remarkable resilience as \nmost advanced economy central banks approach the end of their \ntightening cycles. This has resulted in uneven growth between the low-\nincome developing economies still confronted with high inflationary \npressures, and the rest of the world. As such, the revised forecast by the IMF \nprojected a “soft landing” for the global economy — reining in inflation with \nslight disruptions to output growth. \n \nThe IMF revised its forecast of global growth in 2024 to 3.2 per cent, up from \n3.1 per cent projected in January. The revision is contingent on robust first-\nquarter growth in China, strong consumer spending and productivity in the \nUS, and the anticipated sharp decline in global inflation from 6.8 per cent at \nend-2023 to 5.9 and 4.5 per cent at end-2024 and 2025, respectively. \n \nNotwithstanding, challenges in China’s property market, the Middle East and \nUkraine-Russia conflicts remain key downside risks to global growth. Moreover, \nthe global economy could be susceptible to uncertainties arising from \nstaggered and divergent growth in most low-income countries compared \nwith the rest of the world which may not be offset by the robust growth in \nChina and the exit of the United Kingdom from recession. \n \n36 \n \nIn the domestic economy, fiscal injections, energy prices, exchange rate \ndepreciation and the associated pass-through, led to persistent inflationary \npressure. Nonetheless, on a month-on-month basis, headline inflation and its \ncomponents continued to decline significantly in response to the Bank’s \ncontractionary stance which started in February 2024. Headline inflation \ndeclined to 2.29 per cent in April from 3.02 per cent in March, food inflation \ndecelerated to 2.5 per cent down from 3.62 per cent, while core inflation \ndeclined to 2.2 per cent compared with 2.54 per cent in March. In addition, \nimported food inflation also declined to 2.3 per cent from 3.9 per cent at \nend-March 2024. \n \nCBN estimates show that real output would grow by 3.38 in 2024, driven by \nthe expected growth in the agricultural sector, improvements in the oil sector, \nfiscal reforms, and improved investor sentiment. However, the expected \ngrowth could be moderated by the sluggish growth in the manufacturing \nsector, and external sector vulnerability to swings in global commodity prices. \n \nThe credit channel will also witness a major boost with the introduction of the \nN100 billion ($142.86 million) Nigerian Consumer Credit Corporation \n(CREDICORP). In terms of monetary and financial system stability, it is \nexpected that the scheme will enhance the efficacy of monetary policy and \nstrengthen the interaction between the monetary and real sector. \n \nNon-core inflation and exchange rate pass-through could also moderate in \nthe near-term given fiscal policy actions to address some legacy \ninfrastructure challenges in food producing areas. The approval of funds for \ninfrastructural developments; notably award of contracts for the construction \nof new roads and upgrades of existing roads in farming communities, is \nexpected to improve the distribution channel of agricultural commodities \nand moderate food inflation. In addition, the reconciliation and expansion of \nremittances to NITDA is expected to increase remittance inflows, boost \nliquidity in FX markets, lead to appreciation of the naira, and thus, reduce \ninflation pass-through. \n \nMy Considerations \nThe domestic economy faces adverse macroeconomic headwinds arising \nfrom the volatility in exchange rate, exposure of the external sector to swings \nin international commodity prices, fiscal injections, and increase in the \ndomestic price of energy. In this regard, my tilt towards a hike in the policy \nrate is to moderate the adverse impact of these pressures on the general \nprice level and sustain the gains from the previous monetary policy decisions. \n \n \n37 \n \nGains from the previous tight stance manifested in the deceleration of \nmonthly headline, food, core, and imported food inflation. And in weighing \nthe option for further tightening, I considered the margin of elevation in the \npolicy rate that will not significantly alter the projected output growth path \nfor the economy or worsen the exposure of the real sector to credit default. \n \nBesides, monetary stance needs to be proactive, considering the \nconsequences of inflation and inflation expectation on the ongoing wage \nfloor negotiation and the consumer credit scheme, both of which could \nreshape the efficacy of monetary policy. It is, therefore, important to set in \nmotion a monetary policy stance that will counteract the effects of these \ncredit and income policies on the transmission mechanism of monetary \npolicy. \n \nIn the last couple of months, the economy faced significant volatility in the \nexchange rate arising from the pause in foreign capital inflows due largely to \nthe tight global financial conditions. Given the slowdown in rate hikes around \nthe world, coupled with the deceleration of monthly domestic inflation, the \nhike in the policy rate will also improve the real interest rate and pave way for \nforeign investment and accretion to reserves. \n \nAlso, credit to individuals and households in Q1-2024 decreased by 7.46 \npercentage points, while the value of deposit money banks’ (DMBs) new \ncredits to the core private sector dropped to N1.14 trillion at end-April. Again, \nthese are supply constraints; as such, any hike in the CRR will further worsen \nthe supply of credit to productive sectors and impedes the effective \ntransmission of monetary policy. \n \nProvisional monthly data shows that growth in reserve money moderated by \n5.82 percentage points to 4.29 per cent at end-April compared to the 10.11 \nper cent recorded at end-March, while currency outside the depository \ncorporations declined significantly from 6.34 per cent at end-March to -0.64 \nper cent at end-April. In my view, these are clear signs that the Bank’s tight \nmonetary policy stance is effectively reining in liquidity and must thus be \nsustained. \n \nLastly, as the Bank continues to address the challenges of inflationary \npressure with the available policy tools, there is also a holistic approach to \nrespond to both core and non-core inflation. In the near term, a stronger \nalignment, which has already commenced, between the monetary and \nfiscal authorities is expected to bring inflation to the desired path. Moreover, \nas the fiscal authorities make a deliberate attempt to reduce fiscal \n \n38 \n \ndominance, the attendant moderation in inflation bias will anchor inflation \nexpectations. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39 \n \n12. OLAYEMI CARDOSO \nGovernor of the Central Bank of Nigeria and Chairman, Monetary Policy \nCommittee \nThe Monetary Policy Committee (MPC) is meeting for the third time within a \nrelatively short period under my leadership as the Chairman and Governor of \nthe Central Bank of Nigeria (CBN). The MPC meetings have been deliberately \nscheduled to be held at short intervals to allow us to review the impact of \npolicy actions on the economy and take corrective actions in a timely \nmanner if, and when necessary. Whilst recognizing the expected lag time of \n3-6 months for the transmission of monetary policy actions, I am glad to say \nthat the economy has started responding positively to decisions taken by the \nMPC in its last two meetings to increase the Monetary Policy Rate (MPR) by a \ntotal of 600bps, increase the Cash Reserve Requirement (CRR) to 45%, and \ntighten the asymmetric corridor to -100/+300 basis points (bps) around the \nMPR. \nAfter accelerating sharply in the first two months of 2024, the pace of inflation \nhas slowed in the last three months and although year on year inflation rate \ninched up in April, the month-on-month trend shows that inflation is gradually \ndecelerating. The economy, however, still faces several macroeconomic \nheadwinds and the upside risks to inflation persists. \nThe latest outlook suggests a slight elevation in inflation arising from the \npossible upward revision of the minimum wage, adjustment in electricity \ntariffs, higher fuel prices, continued low agricultural output due to insecurity, \nthe elevated consumption and spending during festive season, and the pass-\nthrough of exchange rate depreciation and volatility. These will continue to \nbe closely monitored and necessary actions taken to avoid a reversal of the \ngains achieved thus far and to ensure sustained disinflation. It is also \nimportant to highlight that policy rate expectation was a key driver of lower \ninflation expectation and appreciation of the currency witnessed in April \n2024, hence the MPC must remain resolute in its stance on using all available \ntools in its policy toolkit to tame inflation. \nGlobally, food prices have been observed as a common factor in the \ntrajectory of inflation and Nigeria is not an exception in this regard. Food \ninflation particularly continued to rise due to a combination of domestic \nstructural challenges and imported food items, but the positive news is that \nthe Purchasing Manager’s Index (PMI) from the agricultural sector now shows \nan upward trend, signaling a possible increase in productive activities in the \nsector and a likely short to medium term decline in food prices. \n \n40 \n \nEmerging markets and developing economies (EMDEs) continued to see \npositive capital flows and foreign capital inflows to Nigeria recorded a \nsignificant uptick in the first quarter of 2024, a direct response to our policy \nand market reforms. Given the high pass-through of exchange rate \ndepreciation to headline inflation and inflation expectations, it is important to \nsustain the momentum of capital inflows and strive to deliver positive real \ninterest rates in the near term to further mobilise savings and investments in \nthe domestic economy. \nFrom the foregoing developments, the MPC was confronted with two major \npolicy options which were either to retain or tighten further to sustain the \ndisinflation trend. Many reasons may suffice to make a credible argument for \nholding the policy rates. Firstly, it will moderate the cost of borrowing to \ngovernment and the private sector, especially small-scale businesses \nconsidering debt sustainability concerns in a lingering high interest rate \nenvironment. Secondly, it will ameliorate the prevailing challenging \neconomic conditions and the resulting pressures being exerted on the \nfinancial system. Lastly, it can also be argued that positive results of previous \ntightening rounds are enough indication that adequate policy actions have \nalready been taken and this will become more evident as the transmission \neffects further takes hold on economic activities. \nOn the other hand, there are compelling arguments to progress with the \ntightening regime. There is no evidence that the downward trend in month-\non-month inflation rate is sustainable and would eventually manifest in \ndownward trend in headline inflation. More so, considering the various upside \nrisks to price development from both the global and domestic economies, \nthere is sufficient reason to be concerned about the continued uptick in \ninflation if we rest on our oars at this critical point. Furthermore, tightening will \nhelp to sustain the current momentum of capital inflows into the economy \nand provide necessary support for the currency in the near term. It is \nimportant to highlight that lingering high interest rates in advanced \neconomies presents a real dilemma for emerging market economies seeking \nto attract capital inflows, and we must ensure that interest rates differentials \nremain sufficiently competitive by achieving positive real rates in the short \nterm. \nWe must also not lose sight of the fact that inflation is the major problem. A \ntighter monetary policy stance with the accompanying higher interest rates \nare policy tools we have at our disposal to solve the problem from a \nmonetary angle, even as we admit that there are structural issues that must \nalso be addressed alongside by various stakeholders. \nThe efforts of the fiscal authority is noted, but fiscal reforms must be sustained, \nand we look forward to the positive impact that the outcomes of these efforts \n \n41 \n \nwill have on the economic trajectory. The tax reforms and other fiscal \nmeasures to boost government revenue, and reign in fiscal deficit is \ncommendable and recent developments in the oil sector targeted at \nsignificantly increasing domestic refining capacity bodes well for energy \nsecurity, price stability, and reduced pressure on the foreign exchange \nmarkets. The Bank must thus, continue to collaborate with the fiscal authority \nto avoid fiscal dominance and ensure that sustainable non-inflationary \ngrowth is achieved. \nAfter careful consideration, I was convinced to align with other members of \nthe Monetary Policy Committee to vote for further tightening of the stance of \npolicy. \nI therefore voted to: \n1. Increase MPR by 150 basis points from 24.75 per cent to 26.25 per cent. \n2. Retain the asymmetric corridor at +100/-300 basis points around the MPR. \n3. Retain the Cash Reserve Requirement (CRR) for deposit money banks and \nmerchant banks at 45.00 and 14.00 per cent, respectively. \n4. Retain liquidity ratio at 30.00 per cent. \n \nOLAYEMI CARDOSO \nGovernor \nMay 2024", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/PERSONAL STATEMENTS OF MEMBERS FOR THE 295TH MEETING OF THE MONETARY POLICY COMMITTEE.pdf"}
{"doc_id": "8b258f9c0261de94b2ac96b72cebbc20", "text": "CENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 139 OF THE MONETARY POLICY \nCOMMITTEE MEETING HELD ON MONDAY 22nd AND TUESDAY 23rd NOVEMBER \n2021 \nThe Monetary Policy Committee (MPC) met on 22nd and 23rd November 2021, \nin light of the continued recovery of the global economy and improving output \ngrowth in the domestic economy. Though, the growth outlook for the global \neconomy for the rest of the year and into 2022 remains favourable, the uneven \npace of recovery across countries has persisted. This was driven primarily by \ncountry and regional disparities in COVID-19 vaccination rate, size of policy \nsupport and regional economic conditions. On the domestic front, the \ncontinued support by the monetary and fiscal authorities is sustaining the \ngrowth recovery, notwithstanding the persistence of security challenges and \nlegacy infrastructural constraints. The Committee appraised the developments \nin the global economy, international financial environment and the domestic \neconomy, as well as the outlook for the rest of the year and the first quarter of \n2022. \nTen (10) members of the Committee attended this meeting. \nGlobal Economic Developments \nGlobal output growth has remained upbeat as economic agents defy the \ncontinued threat posed by the sharp rise in infection rates associated with new \nstrains of the COVID-19 virus. Despite the forecast for a robust recovery of the \nglobal economy in 2021, the uneven pace of vaccination across the globe and \nthe continued rise in infection rates by the more fatal and mutating strains of \nthe COVID-19 virus, suggest that the current two-speed recovery of the global \neconomy may persist longer than anticipated. This may, however, be remedied \n \n \n \nif governments across the globe rally to improve coordination in the distribution \nof vaccines to aid the early attainment of global herd immunity. The Committee \nnoted that the downside risks to the recovery may persist if the spread of these \nnew variants is not addressed urgently. \nIn light of the above dynamics and associated headwinds, the International \nMonetary Fund (IMF) downgraded its 2021 growth forecast for the global \neconomy from 6.0 per cent to 5.9 per cent. It also revised the projection for the \nAdvanced Economies downwards from 5.6 per cent to 5.2 per cent. The \ndowngrade was, however, offset by an upgrade of the growth forecast for \nEmerging Markets and Developing Economies (EMDEs) in 2021. Thus, the \nforecast for the Emerging Markets and Developing Economies was revised \nupwards to 6.4 per cent from 6.3 per cent. \n Inflation across several Advanced Economies is expected to continue its \nupward trend into 2022, contrary to earlier expectations of transiency, as \ncommodity prices continue to recover and feeding into energy and goods \nprices. This is on the backdrop of rising demand, associated with the sustained \nrebound in global output growth, amid lingering supply constraints. In response \nto the persistence of price development, the US Federal Reserve Bank has \nannounced its intention to commence tapering its monthly bond-buying \nprogramme by the end of November 2021. Other advanced economy central \nbanks have also indicated the likelihood of following suit in the short to medium \nterm. In key Emerging Market and Developing Economies, inflation remained \nrelatively high compared with the Advanced Economies. This is mostly due to \nsupply-side constraints associated with the Pandemic; exchange rate pressures; \nand other legacy structural problems. The severity of inflationary pressures in this \ngroup of economies, however, varies across countries in relation to the specific \nstructure and dynamics of the individual economies. \nIn the global financial markets, equity prices largely maintained a strong post-\nlockdown recovery, while investors continued to maintain a sizeable hedge in \ngold, possibly to ease the impact of a rebound of the Pandemic as infection \n \n \n \nrates continue to rise. The financial markets remained moderately bullish, an \nindication that investors remain cautious in view of the unabating Pandemic. \nThis is reflected by the price of Gold, which has remained well above pre-\nPandemic levels. \nDomestic Economic Developments \nAccording to the National Bureau of Statistics (NBS), real Gross Domestic \nProduct (GDP) grew by 4.03 per cent (year-on -year) in the third quarter of 2021, \ncompared with 5.01 and -3.62 per cent in Q2 2021 and Q3 2020, respectively. \nThe growth trajectory has thus, been positive in the last four quarters following \nthe exit from the recession in 2020. Quarter-on-quarter, real GDP grew by 11.07 \nper cent in Q3 2021 compared with -0.79 per cent in the preceding quarter. This \nimprovement in real GDP was driven by growth in both the oil and non-oil \nsectors by 12.05 and 10.99 per cent, respectively. The Committee also noted \nthe continued improvement in the Manufacturing Purchasing Managers’ Index \n(PMI), which though, remained below the 50-index point benchmark, rose to \n47.3 index points in October 2021 from 46.6 index points in September 2021. This \nimprovement indicated a gradual recovery of output growth, driven largely by \nthe increase in new orders associated with rising aggregate demand and \nupswing in business activities. The Non-Manufacturing PMI, however, declined \nto 47.5 index points in October 2021 from 47.8 index points in September 2021 \nas uncertainties persisted around the poor security situation. \nThe Committee noted the continued moderation in headline inflation (year-on-\nyear) to 15.99 per cent in October 2021 from 16.63 per cent in the previous \nmonth, the seventh consecutive month of decline. The decrease was attributed \nto a marginal decline in both the food and core components to 18.34 and 13.34 \nper cent in October 2021 from 19.57 and 13.74 per cent, respectively in \nSeptember 2021. Inflation, however, remained above the Bank’s implicit \ntolerance corridor of 6 – 9 per cent and above its benchmark policy rate of 11.5 \nper cent despite its progressive decline. \n \n \n \nObserving developments in monetary aggregates, the Committee noted that \nbroad money supply (M3) grew by 7.10 per cent in October 2021, compared \nwith 4.72 per cent in September 2021. This was driven by growth in Net Domestic \nAssets (NDA) by 9.12 per cent in October 2021, compared with 10.71 per cent \nrecorded in September 2021. Net Foreign Assets (NFA), on the other hand, \ncontracted moderately by -1.50 per cent in October, compared with -20.85 per \ncent in the preceding month. The continued growth in Net Domestic Assets \n(NDA) was largely driven by increased claims on the Federal Government and \nother public nonfinancial corporations, private sector and state and local \ngovernments. \nIn the financial markets, money market rates oscillated within the standing \nfacilities corridor, reflecting the prevailing liquidity conditions in the banking \nsystem. The monthly weighted average Open Buyback (OBB) rate increased to \n12.18 per cent in October 2021 from 11.11 per cent in September 2021, while the \nmonthly weighted average Inter-bank Call rate decreased from 13.21 per cent \nin September 2021, to 10.00 per cent in October 2021. The increase in the Open \nBuyback (OBB) rate reflected the tight liquidity condition in the banking system. \nThe MPC noted the positive performance of the equities market in the review \nperiod, with the All-Share Index (ASI) and Market Capitalization(MC) increasing \nto 43,199.27 and ₦22.55 trillion on November 19, 2021, from 39,219.61 and ₦20.43 \ntrillion on August 31, 2021. This depicts improved investor sentiment, following \nimpressive corporate earnings of listed companies on the Exchange. This has led \nto a new bargain hunting drive by investors. \n \nThe MPC noted that the Capital Adequacy Ratio (CAR) and Liquidity Ratio (LR) \nboth remained above their prudential limits at 15.2 and 41.2 per cent, \nrespectively. The Non-Performing Loan ratio (NPL) at 5.3 per cent in October \n2021, reflected progressive improvement, compared with 5.7 per cent in \nOctober 2020. The Committee, however, urged the Bank to sustain its tight \nprudential regime to bring the Non-Performing Loan (NPL) ratio below the 5.0 \nper cent prudential benchmark. \n \n \n \nThe gross external reserves stood at US$41.41 billion as at November 18, 2021, \ncompared with US$41.34 billion in October 2021, a moderate increase of 0.17 \nper cent. \nOutlook \nThe overall outlook for both the global and domestic economies remain upbeat \nbut for the significant downside risks clouding the path to full recovery. The key \nrisks remain the unabating COVID-19 pandemic and uneven progress in \nvaccination. As the US Federal Reserve Bank commences scaling down of its \nmonthly bond-buying programme, there is increased likelihood that other \nadvanced economy central banks will follow in the same direction. With this \nimpending development, external financial conditions will likely tighten for most \nEMDEs, in view of huge capital flow reversals to the Advanced Economies as \nyields rise. This will no doubt deepen the growth divergence between these two \ngroups of economies. \nForecasts for key macroeconomic variables for the Nigerian economy, indicate \ncontinuing rebound in growth recovery for the rest of the year. This is expected \non the back of continued support by both monetary and fiscal policy, sustained \nhigh crude oil prices and most importantly, availability of COVID-19 vaccines as \nwell as high turnout for vaccination in Nigeria. Accordingly, the Nigerian \neconomy is forecast to grow in 2021 by 3.10 per cent (CBN), 3.0 per cent (FGN) \nand 2.6 per cent (IMF). Inflation is expected to continue its downward trajectory \nas the harvest season sets in and the government works on improving the \nsecurity situation to ease the bottlenecks constraining food supply. \nThe Committee’s Considerations \nThe Committee commended the continued recovery in output growth \nfollowing a positive outcome in the third quarter of 2021. \nBased on the current outlook for price development and growth, Members \ncarefully reviewed the options confronting the Committee in the short to \nmedium term, taking into consideration, key downside risks to growth and \n \n \n \nupside risks to inflation. Members reiterated the need to remain cautious and \nurged both the monetary and fiscal authorities to sustain their support for the \nrecovery, as the Pandemic was yet to be over. The Committee, however, noted \nthat with the sustained intervention by the Bank, economic activities will \nnormalize in the short to medium term, leading to improved output growth and \nlower inflationary pressure. The MPC also urged the fiscal authorities to sustain \nthe current effort to revamp the economy through continued support to the \ncritical sectors of the economy. \nThe continued security challenge across the country remained a major source \nof concern for Members, noting its impact on business confidence, foreign \ninvestment inflows and overall economic activities. The persistence of insecurity \nin major food producing areas, remained a key downside risk to the recovery. \nThe Committee called on security agencies in the country to increase their \npresence in order to boost public confidence and facilitate the movement of \npeople, goods and services across the country. With improved security, \nespecially in these food producing areas, Members expressed optimism that \nfood inflation will drop significantly following successful harvests and distribution. \nThe Committee also commended the gradual diversification of the economy \nwith the increased contribution of the non-oil sector to Government revenues \nand called for more support to increase non-oil exports as a source of foreign \nexchange earnings into the economy. \nMembers also reiterated the impact of poor infrastructure on rising domestic \nprice levels, urging the Federal Government to prioritize investment in public \nutilities to improve the business environment. These include transportation \nnetworks, power supply, education and health. Following the President’s recent \ninternational call to investors to channel investments to Nigeria, Members were \nof the view that funding for such projects could be sourced through equitable \npartnerships with foreign investors and Nigerians in diaspora. \nThe Committee noted that the equities market remained in a strong position, \nsignposting continued investor confidence in the Nigerian economy. Members \n \n \n \nthus urged the monetary and fiscal authorities to build on this sustained \nconfidence to attract more Foreign Direct Investment into Nigeria. \nThe MPC welcomed the continued resilience of the banking system in the face \nof severe shocks to both the domestic and global economies, commending \nthe Bank’s Management for maintaining overall stability in the banking system. \nThe Committee thus, called on the Bank to continue to push for increased \nintermediation as the way forward to reduce unemployment, enhance \nproduction, create wealth, and improve aggregate demand to strengthen the \nrecovery. On this note, Members applauded the success achieved by the \nBank’s various intervention schemes, which have contributed to both the \ndemand and supply sides of the economy. \nThe Committee reviewed the performance of the Bank’s various interventions \naimed at sustaining recovery of output growth and addressing the downside \nrisks to other external and domestic shocks to the economy. Interventions \ncontinued \nlargely \nin \nmanufacturing/industries, \nagriculture, \nenergy/infrastructure, healthcare and Micro, Small and Medium Enterprises \n(MSMEs). Under the Targeted Credit Facility, the Bank has disbursed a total of \n₦363.49 billion to 766,719 beneficiaries, comprising 638,070 households and 128, \n649 small businesses. Under its Agribusiness Small and Medium Enterprise \nInvestment Scheme (AgSMEIS), the Bank has released ₦134.63 billion to 37,571 \nentrepreneurs. \nBetween September and October 2021, under the Anchor Borrowers’ \nProgramme (ABP), the Bank disbursed ₦43.19 billion to support the cultivation \nof over 250,000 hectares of maize, sorghum, soya beans and rice during the \n2021 dry season; and ₦5.88 billion to finance six (6) large-scale agricultural \nprojects under the Commercial Agriculture Credit Scheme (CACS). \nCumulatively the Bank has disbursed the total sum of ₦864 billion to 4.1 million \nfarmers, cultivating 5.02 million hectares. The bank also disbursed the sum of \n₦41.2 billion for the commencement of the brown revolution, a large-scale \nwheat program to wean us off imports by 35 per cent in the first year. \n \n \n \nIn addition, the Bank disbursed the sum of ₦261.92 billion for 42 additional \nprojects under the ₦1 trillion manufacturing intervention. Cumulatively, the \nbank has disbursed the sum of N1.08 trillion under this Scheme. As part of its \neffort to support the resilience of the healthcare sector, the Bank disbursed \n₦5.39 billion to Nine (9) healthcare projects under the Healthcare Sector \nIntervention Facility (HSIF). The Bank has also cumulatively disbursed the sum of \n₦108.65 billion to hospitals and pharmaceutical industry. 54 of the 117 projects \nfunded are for hospital services. Committee was gratified that the funding \nunder Health sector has resulted in establishment of two (2) new Cancer \nCenters, over 59 MRI and more than 42 CT Scan Centers in Nigeria, within the \nlast 18 months \nTo further promote entrepreneurship development among Nigerian youth, the \nBank recently approved the implementation of the Tertiary Institutions \nEntrepreneurship Scheme (TIES). The Scheme is designed to create a paradigm \nshift among undergraduates and graduates of tertiary institutions in Nigeria, \nfrom white-collar jobs towards entrepreneurship development. The guidelines \nfor the implementation of the Scheme was recently published, as Bank of \nIndustry (BOI) is presently partnering with the Bank for the pilot implementation \nphase. \nUnder the National Mass Metering Programme (NMMP), ₦8.69 billion was \ndisbursed to four (4) Distribution Companies (DisCos) under the scheme’s Phase-\n0. The sum of ₦47.66 billion has been disbursed so far for the acquisition of \n858,026 meters. Also, in furtherance of its intervention in the energy sector, the \nBank released ₦27.03 billion to power sector players under the Nigeria Bulk \nElectricity Trading Payment Assurance Facility (NBET-PAF). This is in addition to \nthe ₦37.69 billion disbursed to eight (8) Distribution Companies (DisCos) recently, \nunder the Nigeria Electricity Market Stabilisation Facility (NEMSF-2). \nThe Bank has disbursed the sum of ₦39.2bn under the Nigerian gas expansion \nprogram to promote the migration to compressed natural gas (CNG) as the \n \n \n \npreferred fuel for transportation and liquefied petroleum gas (LPG) as the \npreferred cooking fuel. \n Furthermore, the Bank recently introduced the 100 for 100 Policy on Production \nand Productivity (PPP), designed to create the flow of finance and investments \nto enterprises with potential to kick-start a sustainable economic growth \ntrajectory, accelerate structural transformation, promote diversification, and \nimprove productivity in the country. It is geared to support private sector \ncompanies with the aim of reducing certain imports, increasing non-oil exports \nand improving the FX-generating capacity of the economy. The Bank will select \nand finance 100 of such companies at 100 day intervals, in line with detailed \nselection criteria as contained in the guidelines, and roll this over for another \n100 companies for the next 100 days. \nThe Targeted Credit Facility (TCF) was particularly highlighted by the Committee \nfor its contribution to alleviating poverty at the grassroot. The Committee thus \nurged the Bank to continue its support through the TCF to ensure that more \npeople benefit from this programme. \nWith the announcement to commence monetary policy normalization by the \nUS Fed and impending interest rate liftoff by central banks in some advanced \neconomies, the MPC called on the Federal Government to intensify its drive \ntowards a counter-cyclical fiscal policy in view of the imminent tightening of \nexternal financial conditions. Committee members, therefore, noted with \nconcern that the gradual normalization of monetary policy by this group of \neconomies would dampen the recovery of several Emerging Market and \nDeveloping Economies in the short to medium term due to the sharp reversal of \ncapital flows. \nThe Committee also evaluated the developments in China relating to the \nreoccurring Pandemic, power outages and crisis in the property market, noting \nthe likely impact these could have on Nigeria as a major trading partner. \nMembers thus called on the Bank to ensure that the necessary buffers are put \n \n \n \nin place to shield the economy from the downside risks associated with these \ndevelopments. \nIn general, Members expressed confidence in the ongoing policies of both the \nmonetary and fiscal authorities which in their view was the hallmark of the \ncurrent recovery and restoration of macroeconomic stability in Nigeria. They, \ntherefore, called on both authorities to look beyond the current position and \nplan towards attracting sustainable investment flows to Nigeria. \nThe Committee’s Decision \nAt this meeting, MPC was gratified that its policy actions in the past had started \nto yield positive results given the remarkable improvement in GDP which stood \nat 4.03 per cent during Q3 of 2021 and the 6th consecutive month moderation \nin inflation to 15.99 per cent in October 2021. \nGiven the level of its conviction about the efficacy of its actions on \nmacroeconomic variables, MPC felt that whereas tightening would further help \nto rein in inflation aggressively, it nevertheless feels that tightening will increase \ncost of funds and constrain output growth. \nOn the other hand, whereas loosening will lower policy rates, ease liquidity \npressures, and stimulate additional credit creation which will boost output \ngrowth, MPC also thinks that loosening will further widen the negative real \ninterest rate gap and compound the price distortions in the money markets \nwhich could fuel inflationary pressures. \nAs for whether to hold its existing stance, MPC believes that the existing \nmonetary policy stance has supported the growth recovery and should be \nallowed to continue for a little longer for consolidation to achieve the MPC \nmandate of price stability that is conducive for sustainable growth. The \nCommittee also feels that a hold stance will enable it to carefully appraise the \nimplications of the unfolding global development around policy tapering and \nnormalization by advanced economies. \n \n \n \nBased on the foregoing, the Committee decided to hold all policy parameters \nconstant to support the enabling environment for sustained recovery. \nThe Committee thus, decided by a unanimous vote to retain the Monetary \nPolicy Rate (MPR) at 11.5 per cent. In summary, the MPC voted to: \nI. \nRetain the MPR at 11.5 per cent; \nII. \nRetain the asymmetric corridor of +100/-700 basis points around the MPR; \nIII. \nRetain the CRR at 27.5 per cent; and \nIV. Retain the Liquidity Ratio at 30 per cent. \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n23rd November 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPERSONAL STATEMENTS BY THE MONETARY POLICY COMMITTEE MEMBERS \n1. ADAMU, EDWARD LAMETEK \nAs FY (2021) draws to a close, it is clearer that the world is witnessing one of the \nfastest recoveries in many decades. Despite several headwinds, output \nrecovery has proceeded in a vast majority of countries following the relaxation \nof the COVID-19 induced shutdowns and movement restrictions. In retrospect, \nwe can see that this has not happened fortuitously. Globally, monetary and \nfiscal authorities have responded, and continued to respond robustly with both \nconventional and non-conventional tools. Thanks to technological innovations, \nit was possible to quickly rollout vaccines, and some other activities virtually. \nAnd so, the outlook for global growth continues to be impressive \nnotwithstanding the resurgence of the pandemic. Importantly, countries have \nlearned better ways of coping with the disease and of handling its fallouts. \nLockdowns have consequently reduced in duration and frequency in the face \nof the new and more virulent strains of COVID-19 virus. Although the world is not \nout of the woods, the indicators are certainly not as bad today as they were in \n2020. \nThe International Monetary Fund (IMF) currently foresees global output \nexpansion of about 5.9 per cent in 2021 and 4.9 per cent in 2022, after \ndiscounting weak recovery in low-income countries. The complexity of the \npolicy challenge has varied markedly across countries. Some countries \nincluding Nigeria have had to deal simultaneously with slow output and high \ninflation. Some have faced additional challenges of exchange rate volatility \nand low access to vaccines. Most low-income countries fall into the latter \ncategory, which explains the rather slow recovery in the group. The fact \nremains, however, that policy support and vaccination have played a \ntremendous role in output recovery everywhere. Both factors also underpinned \nthe dichotomy in growth prospects across countries and especially between \nthe global North and South. \n \n \n \nDivergence in growth prospects continues to reflect the dynamics of policy \nsupport and access to vaccines. Most developing countries especially need a \nlot more resources to address growth challenges than they can afford. In fact, \nthe IMF estimates the funding need of low-income (developing) countries at \nover US$400 billion in October 2021. The resource constraint in these economies \npartly underpins their low access to vaccines, which is further complicated by \nthe growing pressure for booster shots in countries that have already achieved \nhigh vaccination coverage. \nNigeria has also had her own share of growth challenges – insecurity, huge \ninfrastructure deficit, constricting fiscal space, and so on. In this context, the \noutput growth recorded in the first three quarters of the year and several months \nof uninterrupted deceleration in inflation obviously represent significant \nprogress. Apparently, the overarching strategy of ensuring optimal liquidity and \nthe deliberate targeting of key growth poles in the process is yielding the \ndesired outcomes. The Bank’s development interventions have combined well \nwith the Federal Government of Nigeria (FGN) growth initiatives under the Fiscal \nSustainability Plan to revive and sustain economic activity during the year. \nNeedless to say, the sterilization actions of the Bank have effectively prevented \nthe economy from overheating in the face of increased liquidity injections in \nresponse to the fallouts of the COVID-19 pandemic. Against the foregoing \nbackground, I voted at the November 2021 MPC to retain the monetary policy \nlevers at their levels prior to the meeting, in line with my preferred policy path - \ncontinuation of the extant strategy of targeted intervention in critical sectors \nalongside sterilization actions to rein-in excess banking system liquidity. I outline \nsubsequently in this statement my reflections on specific economic indicators. \nNotwithstanding the positive outcomes so far on inflation and growth, the \neconomy is yet to attain the pre-pandemic level on several fronts. Employment, \nfor instance, continues to be a major policy concern. The surest bet to \nalleviating poverty is growth in employment which is tied to economic (output) \nexpansion. In effect, the economy needs to expand at a faster rate than has \nhappened up to Q3 2021, to generate more jobs. Even at the 4.03 per cent \n \n \n \noverall real growth rate in Q3, some sectors (activities) were still struggling. \nAmong those, Oil & Gas, Fishing and Oil Refining stood out. These activities and \nsome others that barely crossed the line would continue to require policy \nsupport in the short- to medium-term. The need to sustain liquidity support to \nkey economic activities is buttressed by the vulnerabilities in the horizon, \nincluding new variants of the coronavirus driving infection resurgence. \nThe outlook for inflation appears stable following seven (7) consecutive months \nof deceleration. The moderation in inflation is occurring at a fast pace, \nattributable mainly to the consistent effort towards boosting supply, rather than \na decline in demand. Headline inflation is forecast to close the year at about \n15.0 per cent. Barring any major shock, the current trajectory is expected to be \nsustained through the first quarter of 2022. Contrary to what is happening in most \nother climes, the recovery in domestic demand has not translated to new price \nshocks. Not only has output rapidly increased, the liquidity management \nstrategy has kept banking system liquidity close to its optimal level. I therefore \nsaw no immediate need to alter the stance of monetary policy on account of \ninflation at the November meeting. \nAgainst the backdrop of tight liquidity management and the recent \nmodification of the foreign exchange (FX) management strategy, the naira \nexchange rate has remained stable since the last adjustment at the I&E \nwindow. Meanwhile, the initial panic-driven depreciation at the parallel market \nhas gradually given way to real market forces. Apparently, the revised FX \nmanagement strategy, which excludes BDCs from direct sales, is working as a \nsubstantial share of FX demand has migrated to the DMBs’ window. We should \nexpect this pattern to continue in the coming months as confidence in the \nmodified framework grows. \nOverall, I figured that the primary purpose of policy at this point would be to \npreserve and possibly deepen the relative stability the economy has started to \nrecord. The current monetary policy configuration continues to be relevant in \nmy view. There are concerns, nevertheless. The upward global price pressures \n \n \n \nemanating from commodity price rises and pent-up demand, for example, is \nunsettling the outlook for stability. Some analysts believe that the current \ninflation pressures are largely transitory (reflecting pandemic-induced supply \nshocks and pent-up demand mainly) and should wane by the middle of 2022. \nHowever, this calculation would depend on what happens to inflation \nexpectation. This implies that the current outlook for global inflation is uncertain, \nmeaning the pressure could transmute into a persistent one, in which case \nmonetary policy must adapt. This perhaps explains why some emerging \neconomies including South Africa, Brazil, Mexico, Russia are shifting to less \naccommodative policy stances. Nevertheless, policy actions of the majority of \ncentral banks have not dramatically changed from being pre-occupied with \noutput recovery, considering that the balance of risk continues to be tilted \nagainst growth. \nFor Nigeria, I do not think the time is rife to look away from economic growth for \nat least two reasons. Though impressive, growth is still fragile and should benefit \nfrom a slightly much longer policy support. The second consideration is that the \ncurrent pressures on domestic prices appear to be largely supply related, in \nwhich case, increasing domestic output of goods and services and easing \ndistribution bottlenecks should go a long way in alleviating the pressure. \nAlready, this is happening and, I should emphasis, extra fiscal support will be \nimportant especially to those sectors that are struggling to recover. \n \nMy overall judgement is that the extant monetary policy setting is optimal. The \nmeasures aimed at redirecting credit to critical sectors of the economy have \ngot extra allowance for impact given that the banking system continues to be \nresilient with major financial soundness indicators (FSIs) showing robustness. I am \npersuaded to retain the major monetary policy parameters at their previous \nlevels. In effect, I voted to: \n1. Retain the MPR at 11.5 per cent. \n \n \n \n2. Retain the Asymmetric corridor at +100/-700 basis points. \n3. Retain the CRR at 27.5 per cent. \n4. Retain the Liquidity Ratio at 30.0 per cent. \n \n \n \n \n \n \n \n \n \n \n \n \n \n2. ADENIKINJU, ADEOLA FESTUS \nInternational Economic Development \nGlobal economy activities continued to show improvement in Q3 2021. \nHowever, the recovery is progressing faster in advanced economies because \nof higher vaccination rates and stimulus support. Inflation remains a major \nconcern in both advanced and most emerging and developing economies. \nCommodities prices, including crude oil have recovered from the 2020 covid-\n \n \n \n19 pandemic shocks, and returned to pre-pandemic trajectory. Globally, \nvaccination coverage is on the rise, though significant difference exists \nbetween developed and developing economies. The coexistence of the delta \nand omicron variants are likely to pose some challenges to the pace and \ncoverage of global economic recovery in 2022. The rising inflation in advanced \neconomies is causing central banks in these countries to commence tapering \nmuch earlier than expected. The expected rise in interest rates may further \nreduce capital flows to developing economies in 2022. The headwinds facing \nthe China economy will have spillover effects on both the global and Nigerian \neconomies. \nDomestic Economic Development \nStaff presentations on Economic Development and Outlook, the Banking Sector \nStability Review and Development Financing, provide particularly useful \ninformation to MPC members. The Economic Report showed that real GDP \ngrowth climbed further in the third quarter of 2021 to 4.03%, marking the fourth \nconsecutive quarter of increase. The PMIs remained below the 50-benchmark \nindex, suggesting tepid growth in October 2021. The real GDP growth was \nmajorly driven by the non-oil sector, especially trade, 1.65%; telecommunication \nand information services, 1.22% and financial services, 0.61%. The agricultural \nsector grew by 1.22%; while the industrial sector contracted by -1.63%. Similarly, \nthe oil sector contracted by -1.63% in Q3 2021, compared to -12.65% in Q2 2021. \nHeadline inflation also declined to 15.99% in October 2021. Both food and core \ninflation decelerated year on year. Food inflation decelerated from 19.75% in \nSeptember 2021 to 18.34% in October 2021. Core inflation also fell from 13.74% \nin September 2021 to 13.24% in October 2021. \nAll Share index (ASI) increased by 7.19% in October 2021 to 42,038.60 index \npoints, up from 39,219.61 index points in August 2021. Monetary base decreased \nby -1.31% month on month in October 2021. While Cash in Circulation rose by \n4.54%; CRR and other reserves declined by 2.21% and 16.12% respectively. \n \n \n \nPressures on external reserves persisted with a decrease of 0.55% month on \nmonth at end of October 2021. The exchange rate depreciated at the I&E \nwindow from N411.22: $1 average October 2021 to N411.75: $1 average \nNovember 15, 2021. External reserves rose from US$41.34billon on October 29, \n2021, to US$41.45 billion by November 12, 2021. Current account balance as a \nshare of GDP and FPI inflow improved in September relative to August 2021. \nBoth FDI and remittances declined in Q3 2021 relative Q2 2021. \nFiscal account showed the encouraging news of rising share of non-oil revenue \nin total government revenue. Despite this improvement, revenue GDP ratio is \nstill too low and there is space for both non-oil and oil revenues to expand to \nboost the capacity of the governments at all levels to deliver on their promises \nto the Nigerian people. FGN debt rose from N28.9 trillion end March 2021 to \nN31.3 trillion end-June 2021. \nThe Banking Sector Stability Review showed that the banking sector remains \nstrong, resilient, and very stable. Financial Soundness Indicators, such as, Non-\nperforming Loans ratio, Capital Adequacy Ratio and Liquidity Ratio were all \nclose to their respective prudential requirements and in many cases, not too far, \nfrom those of comparator countries. All measures of industry size, bank credit, \nassets and deposits were higher than the corresponding values in October 2020. \nOf particular interest is the growth in bank industry credit, which rose from N19.39 \ntrillion in October 2020 to N23.49 trillion in October 2021. \nThe report on the Other Financial Institutions (OFIs) showed that they contributed \nsignificantly to aggregate consumer’s credit. Other Financial Institutions \ngranted 22.39 million facilities to 9.23 million loan beneficiaries out of which 69.26 \nthousand were corporate consumers. Overall, OFIs contributed an additional \nN2.79 trillion or 10.62% to banking sector credit in the past one year. \nThe Development Financing Report showed the aggregate and sectoral \ndecomposition of Central Bank interventions in the economy. The sectoral \nbreakdown as well as geopolitical breakdown of the intervention showed that \ncore sectors of the economy and Nigerians from different geopolitical zones \n \n \n \nhave benefitted from the intervention funds. Nigerians, who otherwise would \nnot have been able to access credit from the formal market have been able \nto benefit from the intervention funds. The CBN interventions have boosted both \nthe demand and real sides of the economy. Boosting the demand side is \nextremely critical given the size of consumption in the aggregate GDP as well \nas the huge compression on real income caused by COVID-19. The increase in \naggregate supply also has the capacity to increase GDP as well as lower \ngeneral price level. \n My Concern \nDespite the general improvements, albeit marginal in economic performance \nin October 2021, there are vulnerabilities and uncertainties in global and \ndomestic economies. Insecurity remains a potent challenge to the Nigerian \neconomy and domestic price formation. The drop in crude oil output to \n1.52mbd in Q3 2021 from 1.54mbd in Q3 2020 due to oil theft and pipeline \nvandalism should be of concern given that the 2022 budget was predicated \non 1.88 mbd. In addition, the incidence of COVID-19 virus and its variants, given \nthe low vaccination coverage in Nigeria presents its own uncertainty on the \neconomy in the medium term. The rising negative sentiments among world \nleaders and leading investors to financing new investments in the development \nof fossil energy, may affect long term development of the petroleum sector. \nFurthermore, there is also the uncertainty around 2022, being a pre-election \nyear. Usually, foreign investors are less likely to commit to new investment in the \ncountry, affecting foreign exchange reserves. \nGoing forward, there is a need to harmonise monetary policy with the monetary \nand development targets in the newly approved Medium-Term National \nDevelopment Plan. There is also a need to decompose the intervention fund to \nthose that went to boost aggregate demand and those that went into \nexpanding the supply base of the economy. Careful examination of the \ncontributions of these interventions should guide the decision on the pace of \nwinding down the interventions in 2022. The CBN must continue to explore ways \n \n \n \nof further derisking the critical sectors of the economy to enable the deposit \nmoney banks to lend to them. As CBN interventions cannot continue in the long \nterm, domestic banks must take on the responsibility of supporting households’ \ncredit and the MSMEs. The unsustainability of PMS subsidy is an issue that the \ngovernment should address urgently. \n \nMy Vote \nIn view of the above, and recognizing the current trend in most economic \nindicators, especially the real GDP and inflation, as well as the uncertainties and \nvulnerabilities in the global economy, it is my considered opinion that we need \nto wait to get a better information on the direction of the economy. Hence, I \ncast my vote to maintain all monetary parameters at their extant values: \n1) MPR at 14.5% \n2) CRR at 27.5% \n3) LR at 30% \n4) Asymmetry corridor around the MPR at +100/-700 basis points. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3. AHMAD, AISHAH N. \nThe Monetary Policy Committee held its last meeting in 2021 with prospects of \ncontinued global and domestic recovery, despite lingering and emerging risks \n- new variants of the coronavirus driving infection resurgence in parts of the \nworld, uneven access to vaccines, inflation spikes, high public debt levels and \npolicy normalization in some Advanced Economies. \nThe Committee broadly appraised its existing policies vis a vis global and \ndomestic developments over the year, taking stock of their impact on \nmacroeconomic variables and the price stability mandate, in particular. \nUndoubtedly, it had been an eventful year. Spillover effects from the COVID-19 \npandemic persisted, and policy makers across many jurisdictions were faced \nwith complex policy trade-offs with limited room to maneuver. Thankfully, \ndomestic policies yielded some positive results, evidenced by fairly good \neconomic fundamentals with a positive short-to-medium-term outlook, \nconsidering persistent vulnerabilities. \nData recently released by the National Bureau of Statistics shows that domestic \nreal GDP grew by 4.03 per cent year-on-year in Q3 2021 compared with 5.01 \nand -3.62 per cent in Q2 2021 and Q3 2020, respectively. This marks the fourth \nconsecutive positive output growth following exit from recession in Q4 2020. \nQuarter-on-quarter, real GDP grew by 11.07 per cent in Q3 2021 compared with \n-0.79 per cent in the preceding quarter. The improvement in real GDP was \ndriven mainly by growth in the non-oil sector by 5.44 per cent, reflecting the \nimportance of ongoing CBN interventions and fiscal stimulus measures \nalongside efforts to further diversify the economic base and strengthen growth \n \n \n \nenhancing sectors. Some sectors, such as Crude Petroleum & Natural Gas and \nSolid Minerals, however, contracted, signifying the need for sustained stimulus \nto strengthen the recovery which remains fragile. This is also reflected in both \nthe manufacturing and non-manufacturing Purchasing Manager’s Indexes \n(PMIs) for November 2021 which continued to remain below the 50 index points \nat 47.3 and 47.5 index points, respectively. \nDomestic prices maintained a downward trend with headline inflation (year-on-\nyear) decelerating for the seventh consecutive month to 15.99 per cent in \nOctober 2021 from 16.63 per cent in the previous month. The decrease was \nattributed to a marginal decline in both the food and core components to 18.34 \nand 13.34 per cent in October 2021 from 19.57 and 13.74 per cent, respectively \nin September 2021. Inflation though decelerating remains at double digit and \nabove the Bank’s benchmark of 6-9 per cent, driven majorly driven by food \ncomponent, high electricity tariffs and exchange rate adjustments. However, \nwith the onset of harvest, sustained CBN interventions and complementary \nfiscal policies to boost food supply, domestic prices are expected to decline \nfurther in the near term. \nIn addition, external reserves increased by 0.17 per cent, from US$41.34 billion \nin October 2021 to US$41.41 billion as at November 18, 2021, a development \nthat will further sustain the current exchange rate stability at the Investors’ and \nExporters’ (I&E) window with positive implications for domestic prices. \nImprovements in the macroeconomy were also propelled by a resilient \nfinancial system which channeled significant credit to support growth \nenhancing sectors such as agriculture, manufacturing and general commerce, \nas well as individuals and households. Total credit increased by N4.10 trillion \n(21.12 per cent) between end-October 2020 and end-October 2021, due largely \nto the increase in the industry funding base and the CBN’s Loans to Deposit \nRatio policy, which has encouraged banks to increase lending to the real sector \nof the economy. This credit to the real sector has been critical for the economic \nrecovery. \n \n \n \nCapital Adequacy and Liquidity ratio remained strong at 15.2 per cent and 41.2 \nper cent respectively, in October 2021, while Non-Performing Loans (NPLs) ratio \ndeclined to 5.3 per cent in the same period from 5.7 per cent in October 2020 \nreflecting proactive regulatory oversight and strong industry risk management \npractices. Positive domestic GDP growth prospects should further strengthen \nasset quality, solvency ratios and sustain financial system stability. Furthermore, \ndigital innovations such as the CBN’s historic pioneering launch of the e-naira \nlast month, is expected to strengthen monetary policy management and \neventually foster financial inclusion. \nWhile I note the positive domestic trajectory, emerging global headwinds call \nfor strengthened and coordinated policy support to sustain Nigeria’s economic \nresilience. The much-anticipated tapering of the $120 billion bond purchase \nannounced by the Fed commencing this month and impending interest rate \nrise (monetary policy normalisation), has triggered quicker than expected \ntightening by some Emerging Market and Developing Economies, to remain \ncompetitive and mitigate likely massive asset sell-offs. The inherent risk of capital \nflow volatility and exchange rate pressures on the back of monetary policy \nnormalisation in some Advanced Economies can be mitigated by sustained \nconfidence building policy actions. \nAlthough portfolio inflows to Nigeria have been benign through the pandemic, \naccelerating ongoing efforts at improving age long domestic structural FX \nsupply constraints remains imperative, to ensure Nigeria remains an attractive \ninvestment destination. On that note, I commend the fiscal authorities for \ninnovative initiatives such as the Finance Act which provides incentives to boost \nproductivity in critical sectors including Agriculture, Solid Minerals and \nManufacturing. The CBN’s recently introduced 100 for 100 policy on production \nand productivity targeted at increasing non-oil exports and improving foreign \nexchange supply would also help re-invigorate local industry to replace imports \nand fuel growth. \n \n \n \nOf concern remains the surge in COVID-19 infections around the world requiring \nfresh restrictions in some countries to contain spread of the virus amidst vaccine \nhesitancy, which poses risks to the slow global recovery. These developments \nare reflected in recent global growth projections by the IMF for 2021 which have \nbeen downgraded from 6.0 per cent to 5.9 per cent and expected to slow to \n4.9 per cent in 2022. \nNotwithstanding emerging global risks, the positive trajectory of key domestic \nfundamentals earlier highlighted – output and Inflation in particular, and \nongoing CBN interventions in growth enhancing sectors, leads me to the same \nconclusion as my last statement that there is no immediate need to alter the \nmonetary policy stance. More so, inflation though above the 6-9 per cent \nbenchmark, is trending downwards and efforts at mitigating supply induced \ninflation is yielding results, while routine monetary sterilization is helping to keep \nmonetary induced inflation under control without requiring adjustments to the \nprimary policy levers. \nAs such, I vote to retain the current stance of monetary policy by maintaining \nall parameters at existing levels – MPR at 11.5 per cent; an asymmetric corridor \nof +100 and -700 basis points around the MPR; CRR at 27.5 per cent and Liquidity \nRatio at 30 per cent. \n4. ALIYU, AHMED \nINTERNATIONAL AND DOMESTIC ECONOMIC DEVELOPMENTS \nThe Monetary Policy Committee (MPC) held its last meeting for the year 2021 \nagainst a backdrop of persisting and emerging new strains of the COVID-19 viral \ndisease. Indeed, global economic recovery continues to depend on the course \nof the pandemic, despite measures taken to contain it. Although significant \nprogress has been made on vaccine rollouts globally, near to medium term \ngrowth outlook remains fairly uncertain, as the resurgence of new and deadlier \nstrains of the virus threaten the gains of the recent past. \n \n \n \nIn view of the lack of predictability on the duration of the pandemic, the \nInternational Monetary Fund (IMF) in its October 2021 World Economic Outlook \n(WEO), revised downwards the 2021 global growth forecasts from 6.0 percent \nto 5.9 percent, with expectations that it will moderate to 4.9 percent in 2022. \nThe development is necessitated by weaker growth forecasts for the Advanced \nEconomies (AEs) where the resurgence of the pandemic has been more \nwidespread. However, stronger projections for commodity exporting Emerging \nMarkets and Developing Economies (EMDEs) are expected to have a calming \neffect on growth. \nInflationary pressures are intensifying across several Advanced Economies. \nAlthough the development has been attributed to high energy prices and \nlingering supply - demand imbalances, the emergence of the Omicron variant \nof the COVID-19 virus raises new concerns about further acceleration of \ninflation. Even though, the US Federal Reserve Bank has commenced tapering, \nit remains unclear how fast the process will usher in policy rate increases to rein-\nin inflation. The European Central Bank, according to its President – Christine \nLagarde, is cautious of the implication of an interest rate increase on \nemployment, and would rather adjust when inflation is sustained around the 2 \npercent target, over the medium term. \nStaff report showed a sustained recovery in global trade, arising from \nunexpected strong recovery of demand in some Advanced Economies and \nEMDEs. Global trade is expected to expand to 10.0 percent in 2021 and \nmoderate to 7.0 percent in 2022, spurred by merchandise trade volume which \nis estimated to grow by 10.8 percent in 2021. However, the realisation of the \nforecast is predicated on faster resolution of the current supply chain \ndisruptions, and on early containment of the Omicron variant of the COVID-19 \nvirus to avert border closures and economic lockdowns. \nGenerally, commodity prices surged, buoyed by a strong recovery in demand. \nIn particular, crude oil prices remained upbeat, albeit a slight dip in November \n2021. The OPEC Basket, Bonny Light, UK Brent and West Texas Intermediate sold \n \n \n \nat US$79.37/b, US$77.99/b, US$81.24/b and US$75.94/b respectively, on \nNovember 19, 2021. For commodity exporting EMDEs, the encouraging oil price \ndevelopment is expected to improve growth projections in the medium term. \nGlobal debt maintained a steady upward climb, with EMDEs alone accessing \nUS$3.5 trillion or 72.9 percent of total new debt of US$4.8 trillion in Q3 2021. Most \nof these countries are already at high risk of debt distress. It is hoped that the \nUS$650 billion (about SDR 456 billion) allocations of Special Drawing Rights to \nMember Countries by the IMF, would help in reducing additional non-\nconcessional financing and provide fiscal space for priority development \nexpenditures. \nTHE DOMESTIC ECONOMY \nOn the domestic economy, leading indicators of economic performance \npoints to a relatively strong recovery from the pandemic. Real GDP grew by \n4.03 percent year-on-year in Q3 2021, from 5.01 percent year-on-year in Q2 \n2021. On quarter-on-quarter, Real GDP grew by 11.07 percent in Q3 2021 from \n-0.79 percent in Q2 2021. The improvement was driven by growth in the non-oil \nsector, led by the Services sector which grew by 8.41 percent, a slight \nmoderation from 9.27 percent recorded in Q2 2021. However, the Agricultural \nsector, a leading employer of labour, continued to be weighed down by \nstructural challenges and other legacy issues, growing by a paltry 1.22 percent \nin Q3 2021 from 1.30 percent in Q2 2021. \nPerformance of indexes which gauge the rate of manufacturing and non-\nmanufacturing activities were mixed and remained below the 50 points \nbenchmark. The Manufacturing PMI increased to 47.3 points in October 2021, \nfrom 46.6 points in the preceding month, due largely to improvements in \ndelivery times, while the Non-Manufacturing PMI contracted to 47.5 points in \nOctober 2021, from 47.8 points in September 2021, due to rising prices of goods \nand services. \n \n \n \nAlthough the economy recovered in Q3 2021 in real terms, output gap \nremained within the negative region, narrowing by 1.5 percentage points to -\n2.1 percent in Q3 2021 from -3.6 percent in Q2 2021, indicating excess capacity. \nHeadline inflation year-on-year, sustained a downward trend, moderating \nfurther to 15.99 percent in October 2021, from 16.63 percent recorded in \nSeptember 2021. The downward trajectory of inflation was largely driven by the \ndeceleration in the core and food components of the index by -0.51 and -1.23 \npercentage points, respectively. Food inflation, year-on-year moderated to \n18.34 percent in October 2021, from 19.75 percent in September 2021. Similarly, \ncore inflation slowed to 13.24 percent in October 2021 from 13.74 percent in \nSeptember 2021. With the rapid return of economic activities, buoyed by \ntargeted interventions in the real sector to increase output, I feel that the current \ndownward trend in inflation would be sustained. \nTrends in monetary aggregates indicated a 2.38 percentage points increase in \nBroad Money supply (M3), to 7.10 per cent in October 2021, although it fell by -\n2.54 percentage points below the 2021Q4 indicative benchmark of 9.64 \npercent. The growth in M3 was driven by growth in Net Domestic Assets (NDA), \nwhich is reflective of the improvement in aggregate credit net. Money market \nrates oscillated within the standing facilities corridor, reflecting the prevailing \nliquidity conditions in the banking system. In the equities market, key indicators \nimproved, following renewed investor confidence. \nFinancial Soundness Indicators (FSIs) remained robust with strong liquidity and \nCapital Adequacy Ratios (CAR), as well as moderating Non-Performing Loans \n(NPLs) following improved risk management practices. Industry liquidity ratio \nwas 41.39 percent as at end-October 2021 compared with 35.56 percent at \nend October 2020. Average industry CAR stood at 15.20 percent at end-\nOctober 2021 from 14.98 percent in the previous month. This is well above the \n10 percent regulatory minimum. NPLs was 5.29 percent at end-October 2021 \ncompared with 5.43 percent at end-September 2020. Total Credit increased by \nN4.10 trillion or 21.12 percent year-on-year, due largely to the increase in the \n \n \n \nindustry funding base as well as the CBN’s directive on Loans to Deposit Ratio \n(LDR). \nOn external sector performance, the gross external reserves stood at US$41.41 \nbillion as at November 18, 2021, compared with US$41.34 billion in October 2021, \na moderate increase of 0.07 per cent, attributed to receipts from 3rd parties, as \nwell as proceeds from Royalties and oil related taxes. \nFiscal operations of the Federal government remained in tandem with the \nexpansionary fiscal stance to support economic growth, infrastructure \ndevelopment, and douse the devastating effects of the COVID-19 pandemic, \namongst others. The rapid automation and visibility of federal government fiscal \noperations would bolster the revenue collection process and translate to \npositive revenue generation and efficiency in expenditure management. \nCONSIDERATION FOR VOTING \nAt this meeting, I note the sustained gradual recovery of key macroeconomic \nindicators as inflation moderated for the 7th successive month, buoyed by \ndeceleration in the core and food components of inflation. Similarly, real GDP \nyear-on-year grew for the 4th consecutive quarter in a V-shaped direction. The \nsignificant improvement in growth quarter-on-quarter gives assurance that \nstrong economic fundamentals underlie the recent trend in growth. Supporting \nthe growth dynamics is the gradual improvement in PMIs and the narrowing of \nthe output gap, albeit remaining in the negative region. \nIn the light of the foregoing, it is worth contemplating whether it is apt in the \ncircumstances to consider monetary policy tightening as a policy choice to \naccelerate the downward trend in inflation and attract yield seeking foreign \ninvestors. But looking back to where we were a year ago, and where we are \nnow, there is no doubt that monetary and fiscal stimuli played a significant role \nin bringing the economy out of recession. I strongly believe that consistency and \nperseverance with the current monetary and fiscal measures is required to close \nthe output gap and restore the economy on a faster pace of recovery. \n \n \n \nWithin the price stability and growth objectives of the Central Bank of Nigeria \n(CBN), immediate concerns include the resurgence of new variants of the \nCOVID-19 pandemic across the globe, tepid performance of the Chinese \neconomy (being our major trading partner) and commencement of monetary \npolicy tapering and normalization, especially with the rising level of inflation \nacross many Advanced Economies. Tapering may not necessarily result in \nenormous capital flight as is being feared, because, investors among other \nthings are also interested in positive real rates of returns. Hence, what is \nimportant now is to explore other sources of risk-free foreign capital without \nnecessarily altering the existing monetary policy stance. \nI must commend the CBN over the rollout of new intervention programmes to \ndirectly support the flow of finance and investments to enterprises with potential \nto kick-start a sustainable economic growth trajectory. Against the foregoing \nbackground, I vote to maintain all policy parameters at their extant levels, as \nfollows: \n• MPR at 11.5 percent \n• The Asymmetric Corridor at +100/-700 basis points around the MPR \n• Liquidity ratio at 30.0 percent \n• CRR at 27.5 percent \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5. ASOGWA, ROBERT CHIKWENDU \nBackground: \nThe rocky road out of the COVID-19 pandemic has created a combination of \nshocks in many economies which continue to pose multiple challenges for \npolicy makers. However, with a wide range of instruments including support of \nmonetary and fiscal policies as well as the optimism of economic agents, global \nrecovery has been strong, but uneven across countries. On the domestic side, \nthe Nigerian economy is also on a sound recovery path despite challenges on \nthe external sector. Output growth looks good even as the effect of the low \ncomparative base which brought about high growth rates in the second \nquarter of 2021 waned partly in the third quarter. The domestic economic \nforecast appears balanced at the time of this MPC meeting with key downside \nrisks relating to the emergence of new variants of the covid-19 virus especially \nin key export countries and the persisting community security threats in many \nstates of the country. Policy decisions at this meeting are thus guided by the \noutlook of the global economy as well as the unfolding trends in the domestic \neconomy especially the paths of inflation, output, external trade and domestic \nfinancial stability. Essentially, the need to ensure that the economy returns close \nto the pre-pandemic levels remains a paramount policy focus. However, it is \nalso important to keep a close eye on emerging global developments and in \n \n \n \nparticular, the materialization of the new risk scenarios in order to assess future \nmonetary policy stance. \nAssessment of the Global Economy: \nMost indicators of global economic activity show positive momentum except \nfor the rapidly rising inflation rates and the debt levels. For global growth, the \nthird quarter 2021 GDP figures for many countries suggest a positive recovery \ntrend although at a moderate pace than the second quarter but the base \neffects from the deep global contraction in 2020 still somewhat overstates this \ngrowth momentum. CBN Staff report show that output growth moderated in the \nthird quarter in the US, UK, Japan and China compared to the second quarter \nof 2021, but for the Euro Area, there was a modest improvement in output \ngrowth to 2.2 percent compared to the 2.1 percent recorded in the second \nquarter. According to the IMF’s October forecast, global GDP growth is now \nprojected at 5.9 percent in 2021, which is 0.1 percentage points lower than the \nFund’s July forecast, and this slight downward revision stems from weaker output \ngrowth in several advanced economies. Despite the slight downgrade, \neconomic and financial conditions remain very expansionary. For instance, the \nglobal purchasing Manager’s index as at October 2021 indicates further \neconomic expansion particularly for manufacturing which edged up to 54.3 \nindex points while for services it jumped to 55.6 points. The momentum of world \ntrade has also been sustained for some time now, even though the volume \nmoderated in October, but remains at relatively high levels of activity. \nIn terms of the global financial market, the conditions are good overall, but \nperformance has been mixed across economies since October with volatility \nincreasing as from the third quarter of 2021. The main global equity indices \nincreased sharply, while corporate bond yields have also been on the rise in \nmany advanced economies. Currencies in several developing and emerging \neconomies lately strengthened against the dollar, but the Euro weakened \nagainst the dollar. \n \n \n \nOn the global inflationary trend, the pressures have continued to build to well \nabove central banks’ targets in a number of economies. Higher energy prices, \nalongside the strong recovery in global demand as well as capacity constraints \nin the goods sector, all contributed to this development. The month-on-month \ninflation rate in the US increased by 0.9 percent in October 2021 from 0.4 \npercent in the previous month, and in UK it increased by 1.1 percent in October \ncompared with 0.3 percent in September. The Euro Area month-on-month \ninflation rate also increased by 0.8 percent in October compared with 0.5 \npercent in the previous month. This rapidly accelerating prices have disrupted \nrecovery very sharply in a number of countries including Russia and Brazil, where \nyear-on-year inflation rates rose to 8.1 and 10.7 percentages, respectively, in \nOctober 2021. For now, risks to the inflation pressures remain tilted on the upside \nand likely to last longer as disruptions caused by the pandemic resulted in \nsupply backlogs, and there are fresh factory shutdowns in some countries. \nA patient monetary policy choice seems to be the favoured option for so many \ncountries now, with their central banks maintaining an accommodative stance \nin order to further bolster demand. For instance, the European Central Bank, \nannounced no change to its monetary policy at its October meeting. The Bank \nof England also at its November 2nd meeting retained policy rate at 0.1 percent, \nwith a continuation of its bond purchase programme. Similarly, the Central \nBanks of Japan and India at their respective monetary policy committee \nmeetings in October, left policies unchanged. The only change announced by \nIndia was the end of quantitative easing from the end of October 2021, with a \nforward-looking guide of possible policy rate tightening from April 2022. \nHowever, in some other countries where inflation has risen or is expected to rise \nthe most, their Central Banks have gradually started shifting towards less \naccommodative monetary policies so as to counteract the inflationary trend. \nIn the US, the Fed has approved that the reduction in asset purchase should \nbegin as early as November 2021 and is expected to cut $15 billion per month \nuntil June 2022 with expectations that policy rates will be raised at the end of \n2022. The Central Bank of Brazil hiked its policy rates by 150bps in October and \n \n \n \npre-announced another hike of a similar magnitude at the next meeting in \nDecember. Similarly, the Central Bank of Russia on October 22nd hiked it policy \nrates by 75 bps, while the Central Banks of Mexico and Iceland raised policy \nrates by 25 basis points and 5 basis points on November 12 and 15 2021, \nrespectively. \nA key downside risk to the global economic outlook in the short term is the new \nthreat which the ‘Omicron variant’ of COVID-19 poses especially as it is currently \nspreading at a period of an already stretched global supply chain. The number \nof new cases has been on the rise since early October, especially in the US, \nRussia and Europe. Currently a number of European countries have imposed \nnew pandemic restrictions so as to control the spread, with Austria already \nimplementing a full lockdown. Even though such large and synchronized global \nlockdown as seen in early 2020 is highly unlikely, prices of some commodities \nare already being affected which pose immediate challenges for several \ndeveloping and emerging market economies. \nDomestic Economic Outlook. \nTurning to the domestic economy, current available information based on the \n2021 third and fourth quarter data suggest that the economy has continued on \nthe recovery path. Although the real GDP growth (y-o-y) slowed from 5.01 \npercent in the second quarter to 4.03 percent in the third quarter but this partly \nreflected the waning of the base effects from the 2020 contraction. The quarter \nby quarter (q-o-q) assessment depicts a more positive upward trend as real \nGDP (q-o-q) grew by 11.07 percent in the third quarter from -0.79 percent in the \nsecond quarter of 2021. This improvement arose from growth in the non-oil \nsector, especially trade and ICT, and driven by a rebound of economic \nactivities and supply chain networks as fiscal and monetary stimulus enabled \nNigerian enterprises to increase production and households to increase \ndemand for goods and services. The expectation is that the improvement in \ndomestic production is likely to strengthen further in the coming months given \nthe October increases in both manufacturing and non-manufacturing PMIs as \n \n \n \nwell the Manufacturers Association of Nigeria (MAN) CEO’s confidence Index \nfor October 2021. With oil prices expected to sustain a favourable tempo in the \nremaining parts of 2021, GDP growth may likely remain strong in the fourth \nquarter, consistent with earlier forecasts. \nThe inflation rates have continued the momentum of positive moderation for \nboth year on year and month on month measures. The headline inflation (y-on-\ny) slowed from 16.63 percent in September 2021 to 15.99 percent in October \n2021 while on a month on month basis, it slowed from 1.15 percent in September \nto 0.98 percent in October. Interestingly, and for the first time in several months, \nboth food inflation and core inflation declined at the same time in October \n2021, at the year on year as well as month on month levels. Even though the \ncurrent inflation expectations of the general public appears to have increased \nat this time given the uncertainties related to fuel and electricity costs, the \nunderlying pressures arising from insecurity in the food producing regions is \nslightly abating. \nThe domestic financial market remains strong and resilient in the months of \nSeptember and October, but some minimal volatility was observed in the equity \nmarket in the early weeks of November. Data for September and October 2021 \nindicate that credit flows, particularly to the industry and services sectors have \nimproved significantly, thereby supporting the revival of the economy. The \nbanking sector credit to the economy continued to expand in October 2021, \nparticularly, the credit to the private sector. Overall, the growth of broad money \n(M3) improved significantly from 4.72 percent on a month-on-month basis at \nend September to 7.10 percent at end October 2021, which is commensurate \nwith the increase in credit to the private sector and increase in claims of the \nCentral Bank on government. Stock prices have risen slightly in recent times due \nto strong investors sentiments with market capitalization increasing by 7.36 \npercent between August and October 2021 and the All-share index also rising \nby 7.19 percent during the same period. The banking sector itself remains stable \nand resilient, just like the position at the MPC meeting in September despite the \nfact that the profitability indicators were unchanged between September and \n \n \n \nOctober. The non-performing loans ratio for the banking sector decreased \nfurther from 6.0 percent in August 2021 to 5.4 percent in September and further \nto 5.3 percent in October 2021. The size of the total banking industry assets has \ncontinued an impressive expansion, increasing by 7.83 trillion naira or 15.83 \npercent (y-on-y) between October 2020 and October 2021. \nThe external and fiscal sectors remain the weak links in the domestic economic \noutlook, similar to the situation in the last MPC meeting. The deficit in Nigeria’s \nexternal account balance has continued to recur for over ten quarters but CBN \nstaff report show a significant reduction in the size of the deficit as at the second \nquarter of 2021, arising from the positive change in the ‘trade in goods’ and \n‘secondary income account’ balances. The persisting deficits have sustained \nthe pressure on the exchange rates even when the gross official reserves \nincreased by 15.56 percent in September, before declining by 0.55 percent in \nOctober 2021. There are however projections that the current account balance \nmay turn towards a positive territory sometime in 2022, if the oil export \nmomentum is sustained. On the fiscal side, pressures remain unabated, similar \nto the position during the September MPC meeting as CBN staff report show \nthat the revenue-expenditure gap has further widened. The persisting context \nof increasing fiscal deficits amid weak revenue performance has kept \nworsening the debt-revenue ratios posing considerable uncertainty around the \nfuture domestic economic outlook. As the economy moves from recovery to \nexpansion, a rebound in government revenues is absolutely necessary if the \nbudget deficit to GDP ratio is to be reduced in 2022 and 2023. However, \nnationally implemented expenditure related reforms, especially on the non-\nsalary recurrent side with focus on fiscal discipline will help achieve a sustainable \nbudget balance in the future. \nMonetary Policy Outlook and Decision: \nIn consideration of the macroeconomic developments as highlighted above, \nthe current policy rate and the ongoing monetary stimulus remain appropriate \nand should be continued. Nevertheless, the Central Bank is expected to remain \n \n \n \nvigilant and continue to monitor domestic and global macroeconomic and \nfinancial market developments so as to take appropriate actions if necessary \nwith the aim of maintaining inflation in the desired direction and supporting \nsustained economic recovery. \nI will thus vote to: \n• Retain the MPR at 11.5 % \n• Retain the CRR at 27.5% \n• Retain the Asymmetric Corridor at +100/-700 basis points \n• Retain the Liquidity Ratio at 30.0% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6. OBADAN, MIKE IDIAHI \nThe global economy has maintained impressive recovery but with the \nAdvanced Economies (AEs) ahead of the Emerging and Developing Market \nEconomies (EMDEs). The former is moving to pre-COVID-19 levels because of \nhigher vaccination rates and larger fiscal and monetary policy support while \nthe latter remains confronted with severe headwinds associated with continued \nhigh COVID-19 infection rates, poor availability and distribution of vaccines and \nweaker policy support. Now, the fresh threat to sustained recovery path of \nglobal economies is the resurgence of COVID-19 infections, manifesting the \nmercurial nature of the virus considering that it has been mutating into more \nvirulent variants and causing uncertainties to pervade the global economy. \nAGGRAVATED GLOBAL UNCERTAINTIES \nUncertainties confronting the global economy have also arisen from other \nsources: the uneven distribution of vaccines; rising inflation rates; and supply-\nside constraints, the combined impact of which is weighing down on recovery. \nNevertheless, what seems to be causing greater concern now is the resurgence \nof COVID-19 infections, especially in the Advanced economies, with the \nprevalence of the Delta strain and other highly fatal strains of the virus. In these \neconomies, the resurgence of the Pandemic has been substantial, causing \nserious concerns even in countries that have achieved a high rate of \nvaccination. Some of these countries are actively considering containment \n \n \n \nmeasures including lockdown or partial lockdown of the economies. Indeed, \nsome countries have already implemented partial lockdowns with serious \nimplications for national and global growth prospects. Among those that have \nimplemented full or partial lockdown are the following European countries: \nLatvia, Russia, Netherlands, Austria and Ireland. In Africa, up to seven countries \nincluding South Africa, Botswana and Zimbabwe are battling a new variant of \nthe virus which has caused the AEs to impose travel restrictions on the countries. \nNo doubt, the global economy has continued on the recovery path, but the \nmomentum has weakened. As a result of the impact of the highly transmissible \nDelta variant, the global COVID-19 death toll has risen to about 5 million amidst \nelevated health risks, thus, impeding a full return to normalcy. The pandemic \noutbreaks affected critical areas of global supply chains, resulting in the \nshortages of key inputs, and dragged manufacturing activity lower in several \ncountries, with negative consequences for domestic production, exports and \nforeign exchange generation. \nUncertainties surround the normalisation of monetary policies by the AEs. \nFollowing the huge monetary and fiscal injections into their economies to \ncombat the adverse impact of the COVID-19 pandemic and the subsequent \nimproved economic conditions and rising rates of inflation to historical levels, \nthe advanced economies have given indications to commence the \nnormalisation of their monetary policies. This entails a gradual tightening of \nmonetary policy. The United States has already given specific signals to \ngradually reduce its bonds purchase programme by US$15 billion per month, \nbeginning from November 2021. Policy rates hikes in the AEs and some other \neconomies may follow much earlier than expected with implications for \nborrowing costs. Against the backdrop of the massive liquidity injections from \nfiscal and monetary interventions, there are concerns that when monetary \nauthorities commence policy normalisation, it may jeopardize global financial \nsystem stability. For the EMDEs, monetary policy normalisation portends a near - \nto medium-term tightening of external financial conditions for the group and \nother developing economies. Consequently, there is the fear that global \n \n \n \ncapital flows will shift away from the EMDEs toward the AEs, thus widening the \nrecovery gap between these two groups of economies. \nOne thing that seems clear though is that the AEs are not likely to rush into \nwithdrawal of policy support for economic recovery. Monetary and fiscal policy \nremain largely accommodating in advanced and emerging market \neconomies, with long-term interest rates in major advanced economies at \nhistoric lows. A survey of fourteen (14) central banks by the Central Bank of \nNigeria, between September and November 2021 revealed a continuing trend \ntowards monetary accommodation in both the advanced and emerging \nmarket economies. It is likely that global monetary and fiscal policy would \ncontinue to support economic recovery and growth, job creation and \nlivelihoods, and achieve full recovery. \nNIGERIA’S MONETARY POLICY DIRECTION: SOME KEY ISSUES \n1. Economic growth performance \nEconomic activities have gained impressive momentum following the \nrelaxation of covid-19 containment (lockdown) measures and substantial \nexpansionary fiscal and monetary policy support to critical economic and \nsocial sectors. Consequently, the real GDP grew by 4.03 percent (year-on-year) \nin the third quarter of 2021, showing a sustained positive growth over the last \nfour quarters since the recession witnessed in 2020. Also encouraging is that the \nquarter-on-quarter growth rate which was negative at -0.79 percent in the \nsecond quarter but turned into an impressive positive of 11.07 percent in quarter \n3. Perhaps, a seasonally-adjusted quarter-on-quarter GDP would provide better \npolicy information than year-on-year series. \nThe growth achieved has not reached a level that provides room for comfort. \nIt is not solid and there are numerous headwinds including uncertainties in the \nglobal economy arising from the resurgence of COVID-19 infections in the \nadvanced countries, the looming normalisation of their monetary policies; \nforeign exchange market pressures; unpredictable global oil market and risk of \n \n \n \ncontinuing low oil production; legacy infrastructure deficits and the persisting \ninsecurity. Indeed, the latter is a major factor in the persisting output gap as it \nhas increasingly impacted food supply, prices and other physical economic \nactivities negatively. \n2. Inflationary pressures. \nIt is good news that the inflation rate further decelerated in October 2021, owing \nto a lower food price despite persisting insecurity and other structural \nbottlenecks. Indeed, all the three measures of inflation – headline, food inflation \nand core inflation – declined year-on-year in October. While the headline \ninflation witnessed eight months of continued deceleration from 18.12 percent \nin April to 15.99 percent in October 2021, food inflation declined consistently \nover a period of 8 months from 22.95 percent in March to 18.34 percent in \nOctober 2021. However, the rates of deceleration of the measures are sluggish, \nthus making the present headline inflation rate to still remain much higher than \nthe 6 – 9 percent CBN target range. The rate is still too high and impacting \nnegatively on living conditions of the people. Importantly, with the price of oil \nmaintaining an upward trend and translating into overall high cost of energy, \nhigh cost of local production and importation, the expected moderation in \nprices could be dampened. Also, depreciation of the naira, uncontrolled fiscal \ndeficits and the planned removal of fuel subsidy before the end of June 2022 \nare potential threats to inflation control. \n \n3. Positive developments in the crude oil market but … \nFor many months now, the global oil market has witnessed and sustained a \nrebound. For example, the average spot price of Bonny Light rose from \nUS$49.97/barrel in December 2020 to US$84.10/barrel in October 2021. This \ncompares with US$50.43/barrel on 4th January, 2021 and a trough of \nUS$14.67/barrel recorded on 27th April, 2020. In the meantime, oil price futures \n \n \n \nup to December 2022 deliveries are looking upwards. The price of crude oil is \nexpected to be around US$72.56/barrel for December 2022 deliveries. \nThe developments in the oil market constitutes good news to oil exporting \ncountries except, perhaps, Nigeria. The country has weak production capacity \nto take advantage of the increased oil prices. Crude oil production at 1.54 \nmbpd in October 2021, is below the budget benchmark and potential \nproduction capacity because of several challenges. Importantly, is the fact \nthat oil export sales are used to finance importation of refined petroleum \nproducts. Consequently, oil and gas sales in the global market virtually do not \nhave any positive impact on government revenue or external reserves. \n4. Weak fiscal position of the Government. \nThe Federal Government has struggled against the tide of two debilitating \nrecessions in five years, occasioned largely by externally-induced shocks \nincluding the coronavirus-induced health and economic shocks. With little or \nno fiscal buffers, it has had to borrow heavily, domestically and externally, to \nmitigate the negative impacts of the shocks. Consequently, public debt sky-\nrocketed, standing at N35.465 trillion (US$86.571 billion) as at June 30, 2021 from \nN31.009 trillion (US$85.896 billion) in June 2020. External debt represents 38.66 per \ncent (N13.710 trillion), while domestic debt represents 61.34 per cent (N21.754 \ntrillion). Actual domestic debt service amounted to N935.458 billion for the \nperiod January-June 2021. With the rising debt service-to-revenue ratio, which \nis currently put at over 90 per cent, heavy debt servicing is taking a toll on lean \nfiscal resources and could hinder availability of funds to finance critical \ngovernment programmes and projects. Against the backdrop of limited \ndomestic revenue mobilisation and little or no foreign exchange inflow from oil \nand gas exports, the government’s fiscal capacity remains weak. It requires \ncontinued monetary support to drive economic activities towards the desired \nsustainable growth trajectory. \n5. Normalisation of monetary policy in the Advanced Economies. \n \n \n \nThis may likely bring to fore the risk of heightened capital outflows from the \ncountry as rising asset yields abroad become more attractive. In other words, \nmarket sentiments and the potential hike in short and long-term interest rates \nabroad could lead to capital flight from Nigeria, as investors seek more rewards \nfor their investments. The impact on external reserves, exchange rate, the \nbalance of payments and foreign borrowing costs could be substantial. \nHowever, considering that since the COVID-19 era, foreign capital flows to \nNigeria has been limited, while capital outflows heightened, impacting the \nexchange rate and reserves negatively, the concern about monetary policy \nnormalisation needs to be moderated. \nOPINION \nIn light of the foregoing, my considered opinion is the need not to take any \nmonetary policy decisions that may turn out to be precipitate. Yes, the AEs are \nconsidering normalisation of their monetary policies. But this should not drive us \nto follow suit which may not be in the interest of the desired recovery and \ngrowth of the economy. With the fresh wave of covid-19 infections in the \nAdvanced Economies and re-introduction of lockdowns/partial lockdowns, \nuncertainties surround the planned normalisation of monetary policies. \nImportantly, competitive normalisation of monetary policies by the AEs and \neven some developing economies could impact global growth and trade \nnegatively while relativities remain unchanged. Those economies that have the \nnecessary shock absorbers may normalise their policies. But others would need \nto watch the situation. \nThe vulnerabilities which the economy faces are still very potent and must be \ntaken cognisance of: persistence of covid-19 and its virulent variants; \nunrelenting insecurity challenges; continued impact of double-digit inflation; \ncontinued weak fiscal position of the government; threats from normalisation of \nmonetary policy by the Advanced Economies in terms of raising foreign \nborrowing costs; impact of foreign exchange market pressures; and others. \n \n \n \nIt is important to allow extant monetary measures which have been proved to \nbe effective in supporting growth and inflation control to further strengthen the \ngrowth achieved while the existing administrative monetary policy tightening \nmeasures should be continued as we watch global and domestic \ndevelopments and understand their implications. \nMy vote therefore is to hold all the policy parameters constant, that is: \nMonetary Policy Rate: \n \n11.5 percent \nCash Reserve Requirement: \n27.5 percent \nLiquidity Ratio: \n \n30.0 percent \nAsymmetric Corridor: \n+100/-700 percent \nCONSIDERATIONS FOR POLICY ACTION \ni. The CBN intervention projects are many so as to impact different critical \nsectors of the economy in aid of economic recovery and respectable growth. \nIndeed, they have played a notable role in lifting the economy out of the two \nrecessions and complemented fiscal policies significantly in putting the \neconomy on the current path of sustained recovery. But for the CBN’s sizeable \ndevelopment interventions, the story of the country’s economic performance \ncould have been different in an opposite direction. However, as the economic \nrecovery moves into a sustained growth trajectory, it will be important to review \nthe projects portfolio in relation to their impact and objectives with a view to \nrationalising the portfolio. This will accord with the intervention nature of the \nprojects. \nii. Monitoring surveillance of the foreign exchange activities of commercial \nbanks. The public is still sceptical about their transparency and cleanliness in \nforeign \nexchange \nmatters. \nNotable \nchallenges \nencountered \nin \nthe \nimplementation of the new foreign exchange policy include slow turnaround \ntime for foreign exchange transactions, use of fake documentation, multiple \napplications by same applicant, amongst others. A key desire is ensuring that \n \n \n \neligible customers have unimpeded access to foreign exchange. Achieving this \nrequires close monitoring and effective supervision of the banks to ensure \ntransparent and efficient foreign exchange sales to customers and to curb \nsharp practices aimed at undermining the new foreign exchange policy. \niii. The fiscal operations of the Federal Government which resulted in a \ncumulative huge deficit between January and July, 2021, remains a major issue \nof concern because of the public debt and inflationary implications. No doubt, \nlow revenue generation capacity is a major source of problem. But it is \nimportant for the government to also consider adjustment on the expenditure \nside, in particular, the recurrent spending which reflects very high cost of \ngovernance. In the kind of challenging fiscal situation in which the government \nis operating, it is imperative to avoid proliferating high-educational institutions \nthat have huge financial implications. The government should also be mindful \nof entering into agreements, with huge financial implications, with trade unions \nand which turn out to be un-implementable from the government’s \nperspective. In other words, it is important to appreciate that the present \nsituation requires economic adjustment and hence the need to rationalise non-\nessential public spending. \niv. The external reserves stock is still at a rather uncomfortable level. The gross \nexternal reserves increased by 15.56 per cent to US$41.57 billion in September \n2021. The increase to this level was largely due to the inflows from Eurobond \nproceeds and the Special Drawing Rights (SDR) Allocation to Nigeria by the \nInternational Monetary Fund (IMF). The Bank would need to sustain the current \nforeign exchange management strategies which ensure that foreign exchange \ngets to priority growth-stimulating sectors of the economy. Perhaps, when petrol \nsubsidy is eliminated sometime next year, as the Federal Government has \nindicated and the Dangote refinery starts to meet domestic needs for fuel, \nforeign exchange reserves will be significantly boosted to enhance exchange \nrate stability through increased interventions by the Bank in the foreign \nexchange market. \n \n \n \nv. Inflationary pressure is easing and the economy is expanding as a result of \nconsistent and supportive fiscal and monetary policy actions and the \nreopening of economic activities. But inflation expectations remain high, owing \nprimarily to subsisting security challenges, energy prices, exchange rate \nadjustments, and persistent production constraints. There is need therefore for \npolicy to relentlessly focus on achieving greater security of all parts of the \ncountry, ensuring exchange rate stability and minimising the constraints in the \noperating business environment. \nvi. GDP reporting and analysis: Government seems to place emphasis on year-\non-year analysis of the GDP. It seems to me that quarter-on-quarter analysis has \nmore policy significance, for example, growth in the 3rd quarter in relation to the \nsecond quarter in the same year. It shows progress or lack of it in each quarter \nas a stimulus for action. If there is concern about seasonal effects in quarterly \nGDP, then the series can be seasonally adjusted and used for policy analysis. \nYear-on-year analysis could just provide additional information. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7. OBIORA, KINGSLEY ISITUA \nIn view of continuing economic recovery and \ndecelerating inflation, I voted to: retain the \nMonetary Policy Rate (MPR) at 11.5 per cent, the \nCash Reserve Ratio (CRR) at 27.5 per cent, the \nLiquidity Ratio (LR) at 30 per cent and the \nasymmetric corridor of +100/-700 basis points \naround the MPR. I believe this stance would \ncontinue to support the recovery, foster inclusive \ngrowth and rein in inflationary pressures. \nThe resurgent Coronavirus Disease (COVID-19) pandemic continued to disrupt \nglobal economic activities. Since the September MPC meetings, the number of \nconfirmed Covid cases globally had increased by 13.0 per cent from 227 million to \n257 million in November 2021. The number of deaths also increased by 11.0 per \ncent from 4.6 million to 5.1 million. Whilst other regions are recording lower number \nof confirmed cases, another wave of COVID-19 is ravaging Europe, making it the \ncurrent epicenter of the pandemic. Vaccine inequality continues to widen \nbetween advanced and developing economies. As of 24th November, 2021, 7.5 \nbillion doses were administered globally, but only 5.0 per cent of the population in \ndeveloping countries had received at least one dose of the vaccine. This severe \n \n \n \nvaccine inequality resulted in many African countries missing the target of 10 per \ncent vaccination coverage set for September 2021, as only 15 out of 54 countries \nmet the target. The World Health Organisation (WHO) has also projected that only \n5 out of 54 countries in Africa would meet the target of 40 per cent vaccination \ncoverage by December 2021, leaving many African countries vulnerable to further \noutbreaks. There is, therefore, an urgent need to accelerate delivery of vaccines \nto Africa and other developing countries. As the United Nations Children's Fund \n(UNICEF) explained - “Vaccine inequity is not just holding the poorest countries \nback – it is holding the world back,” \nAlthough the global recovery slowed down marginally due to the associated \nadversities of COVID-19 infections, it is expected to remain resilient in 2021. The \nJPMorgan Global Purchasing Manger’s Index expanded by 54.5 in October from \n53.3 points in September 2021, making it the sixteenth (16th ) consecutive month it \nexceeded the 50 points benchmark. The expansion was driven by activity in the \nbusiness, consumer, financial services, and intermediate goods industries. The IMF \nmarginally revised downward global growth to 5.9 per cent for 2021 (WEO \nOctober 2021) from 6.0 per cent in its July projection due to the severe impact of \nthe COVID-19 pandemic, associated supply disruptions, and rising inflationary \npressures in advanced and emerging market economies. Projections for Sub-\nSaharan Africa was, however, revised upwards to 3.7 per cent from 3.4 per cent, \ndue to improvement in global trade and rising commodity prices. The latter was \nthe least growth rate for any region when compared with others. Advanced \neconomies, Emerging and Developing Asia, Latin America and the Caribbean, \nwhich are set to grow by 5.2, 7.2 and 6.3 per cent, respectively. At the country \nlevel, while the United States, United Kingdom, China and India are projected to \ngrow at 6.0, 6.8, 8.0 and 9.5 per cent in 2021. Also, South Africa, Nigeria, and \nAngola have been estimated to grow at 5.0 2.6, and -0.7 per cent, respectively. \nThese divergences in growth across the regions and countries reflect the rate of \nvaccination coverage, the size of economic policy support, and the structural \nconditions of these regions and countries. \n \n \n \nThe domestic economy maintained its strong recovery, supported by policy \nresponses from monetary and fiscal authorities. Official data from the National \nBureau of Statistics (NBS) revealed that Nigeria’s real GDP grew by 4.03 per cent \nin Q3 2021, compared with 5.01 and -3.62 per cent in Q2 2021 and Q3 2020, \nrespectively. This was driven by the non-oil sector, that grew by 5.44 per cent, even \nas the oil sector contracted by 10.73 per cent. The sub-sectors that recorded \nsignificant growth include the Rail Transport and Pipelines, Metal Ores, Air transport, \nFinancial institutions which grew by 59.93, 54.92, 33.31 and 25.50, respectively. \nOthers were Trade, Telecommunication and Information services, Food, Beverage \nand Tobacco, and Cement that grew by 11.90, 10.87, 6.07, and 5.68, respectively. \nHowever, productivity in the Oil Refining, Crude petroleum and Natural Gas, \nQuarrying and Fishing contracted by 47.83, 10.73, 4.20, and 3.97 per cent, \nrespectively. Nonetheless, the IMF marginally revised Nigeria’s growth projection \nupwards to 2.6 per cent from its July 2021 projection of 2.5 per cent, driven by oil \nprice recovery, monetary and fiscal policy support. Headline inflation (year-on-\nyear) moderated further to15.99 per cent in October from 16.63 per cent in \nSeptember 2021. Since April 2021, inflationary pressures had continued to \ndecelerate and expected to moderate further into 2022. This was largely driven \nby the gradual decline in the two major components, food and core inflation that \ndeclined to 18.34 and 13.24 per cent in October from 19.57 and 13.74 in \nSeptember 2021, respectively. Furthermore, the gross external reserves increased \nby 15.83 per cent to US$41.34 billion at end-October 2021 from US$35.69 billion at \nend-October 2020. The increase was largely attributed to the inflows from the \nEurobond proceeds and the Special Drawing Rights (SDR) allocation to Nigeria by \nthe International Monetary Fund (IMF), which in part, promoted the current \nrelative exchange rate stability at the Investors’ and Exporters’ (I&E) Window. \nThe banking system remained sound and safe buoyed by monetary policy support \nand prudential measures. The total asset of the industry increased by 15.8 per cent \nfrom N49.47 trillion in October 2020 to N57.30 trillion in October 2021. Accordingly, \nthe gross banking sector credit increased by 21.12 per cent from N19.39 trillion in \nOctober 2020 to N23.49 trillion in October 2021. Increased in credit was recorded \n \n \n \nin manufacturing, consumer credit, general commerce, information and \ncommunication and agriculture. Lending to individuals and households also \nincreased from N1.91 trillion in the first quarter of 2021 to N1.95 trillion in the third \nquarter of 2021, reflecting the COVID-19 Targeted Credit Facility (TCF) and other \ninterventions by the CBN. The Capital Adequacy Ratio (CAR) was 15.2 per cent, \nslightly above the prudential benchmarks of 15.0 per cent, indicating the \nsoundness of the industry. Furthermore, the Non-Performing Loans (NPLs) ratio was \n5.3 per cent at end-October 2021, an improvement from 5.7 per cent at end-\nOctober 2020, reflecting the case-by-case review of regulatory forbearance, the \nGlobal Standing Instruction (GSI) policy, and strengthening of risk management \npractices in banks. The monthly weighted average for the Inter-bank Call rate \ndecreased from 13.21 per cent in September to 10.00 per cent in October 2021. \nThe Open Buy Back (OBB) rate, however, trended upward from 11.11 per cent in \nSeptember to 12.18 per cent in October 2021, reflecting a tight banking liquidity \ncondition, which contributed to the deceleration in inflationary pressures and \nsupported banking system stability . \nEven as the domestic economy is on the path of a strong recovery, significant \nheadwinds remain. Globally, there is a growing concern about the virulent variants \nof the COVID-19 pandemic that continue to mutate with devastating \nconsequences on lives and livelihoods. Although the economy continued to \nrecover since it exited the recession in Q4 2020, it is still fragile. Oil Refining and \nCrude Petroleum and Natural Gas, which are key sectors of the economy \nextended contractions into Q3 2021. Whilst the performances of the \nmanufacturing and non-manufacturing Purchasing Manager’s Indexes (PMIs) \nimproved, they remained below the 50 index points at 47.3 and 47.5 points, \nrespectively. Although headline inflation sustained a downward trend since April \n2021, driven by the onset of the harvest season and various intervention \nprogrammes by the Bank to increase food supply nationwide, it is still above the \nBank’s implicit target of 6.0 to 9.0 per cent. Although headwinds to the domestic \neconomy that include slow vaccination rate, limited fiscal space, lingering \ninsecurity and infrastructural deficits could severely affect the prospect of a full \n \n \n \nrecovery in the medium term, the current positive trajectory of output growth and \nmoderating inflation supported by the Bank’s aggressive interventions in the key \ntargeted sectors of the economy offers prospects of a stronger economy . \nThe modest achievements against these headwinds, therefore, need to be \nsustained through the deployment of more growth-induced policies. That is why I \nsupport the current effort of the Bank for introducing the 100 for 100 Policy on \nProduction and Productivity (PPP). The policy will boost production in the \nmanufacturing sector; reduce imports and expand the non-oil exports; improve \naccretion to external reserves; and ensure exchange rate stability. Also, the \nlaunching of the Tertiary Institutions Entrepreneurship Scheme (TIES) in November \n2021 would enhance entrepreneurship and promote economic growth in \nstrategic sectors of the economy as well as address the challenges of youth \nunemployment in the country. However, given Nigeria’s huge investment needs \nand limited fiscal space, we must continue to attract the private sector to the \ncritical sectors of the economy through Public-Private Partnership (PPP). This \narrangement will enhance efficient development and productivity of \ninfrastructure, human capital and other critical sectors of the economy on a \nsustainable basis. \nIn view of the modest growth recovery and to allow policy actions already \ndeployed by the Bank to take their full effect, I believe the best course of action is \nto hold all parameters and, on that basis, I voted to: \n• \nRetain the Monetary Policy Rate (MPR) at 11.5 per cent; \n• \nRetain the Cash Reserve Ratio (CRR) at 27.5 per cent; \n• \nRetain the Liquidity Ratio (LR) at 30.0 per cent; and \n• \nRetain the asymmetric corridor to +100/–700 basis points around the MPR. \n8. SANUSI, ALIYU RAFINDADI \n1.0 Decision \nMy decision to vote for a hold on all the policy parameters in today’s meeting \nwas informed by my conviction that, given the data on both inflation and \n \n \n \noutput as well as their most probable forecasts, neither tightening nor easing \nwould be an optimal stance. Although the pace of disinflation remains slow as \nthe rising prices continue to erode real income, raising the rate to hasten the \nrate of disinflation could hurt the fragile output recovery. Loosening to \naccelerate the rate of output recovery could halt the disinflationary process \nand exacerbate the exchange rate pressure, which would further threaten \ninflation. Given the rising uncertainty in the global economy in the face of the \n4th wave of the COVID-19 pandemic and the possibility of faster rate of \ntapering in the US as its inflation surges, a hold on all the policy parameters \nappears to be the optimal choice. \n \n2.0 Background and Justification \n2.1 Global Economic Developments \nAlthough the global economic recovery continues across both Advanced \nEconomies (AEs) and Emerging Markets and Developing Economies (EMDEs), \nthe rising inflation and resurgence of covid-19 infections in the US and other \nmajor economies have further beclouded the medium-term horizon. On the \none hand, the rising global inflation raises the possibility of increasing the rate of \ntapering towards policy normalization than earlier planned. On the other hand, \nthe spread of the new variants of the COVID-19 raises the risk of lockdowns and \nrestrictions. Despite the continued rise in global trade and the rising oil prices \ndue to rising demand, the global economic outlook remains uncertain. \n \nAs the global economy continues to recover in response to the coordinated \nfiscal and monetary injections across Advanced Economies and EMDEs, two \nemerging developments pose significant threat to the recovery. First, the rising \ninflation in the US economy implies that the policy normalization, which has \nstarted with the Feds tapering of its bond-buying programme in November \n2021, may be accelerated, and raising rates may start earlier than \nprogrammed. Second, fourth wave of COVID-19, which has started as the rates \nof infection and spread of new variants increase, may threaten the global \n \n \n \nrecovery. The global economic recovery has, however, continued in the third \nquarter of 2021, and is expected to grow at 5.9% in 2021, but moderate to 4.9% \nin 2022. The growth projections for the Advanced Economies was downgraded \nto 5.2% in 2021 and 4.5% in 2022. Growth in the EMDEs was, however, revised \nupwards to 6.4% in 2021 from 6.3% but will moderate to 5.1% in 2022. Output in \nthe US economy has grown (q-on-q) by 2.0% in Q3 2021 compared with the \n6.7% in Q2 2021, but is projected to grow at 4.0% in Q4 2021. The growth in Q3 \n2021 was less than expected. The Euro zone expanded by 2.2% (q-on-q) in Q3 \n2021 compared with the 2.1% achieved in Q2 2021. Output in the UK economy \nslowed down to 1.3% in Q3 2021 compared with 5.5% achieved in Q2 2021. It is \nforecasted to grow at 2.1% in Q4 2021. In Japan, output contracted (q-on-q) by \n0.8% in Q3 2021 from a positive growth of 0.4% in Q2 2021. The contraction was \ndriven by the resurgence of COVID-19 infections, supply chain disruptions and \ndecline in exports. \nOutput developments among the EMDEs were mixed in Q2 2021. Russia, South \nAfrica, and China have recorded positive output growth but India and Brazil \nrecorded contraction during the quarter. India contracted by -10.2% (q-on-q) \nin Q2 2021 compared with 2.3% in Q1 2021. It is expected to grow at 1.4% in Q3 \n2021 and further to 2.2% in Q4 2021. China grew by 1.3% (q-on-q) in Q2 2021 \nand moderated to 0.2% in Q3 2021 due to power shortages and supply chain \nbottlenecks. There are also significant concerns over the buildup of systemic risk \nin the real estate market. Output in China is expected to grow at 1.3% in Q4 \n2021. Output in Brazil declined by -0.1% (q-on-q) in Q2 2021 from 1.2% in Q1 2021 \ndue to resurgence of the new variants of COVID-19. It is expected to grow by \n0.7% in Q3 2021 and 0.8% in Q4 2021. Russia grew by 1.8% (q-on-q) in Q2 2021, \nand is forecasted to grow by 2.5% in Q3 2021 and decline to 0.7% in Q4 2021. In \nNigeria, q-on-q output grew by 11.1% in Q3 2021 from -0.8% in Q2 2021. The \nglobal trade is expected to grow at 10% in 2021 and moderate to 7.0% in 2022. \nAs at November 19, 2021, the price of OPEC basket stood at US$ 79.37/b \ncompared with US$71.98 per barrel on September 14, 2021 or US$54.38 per \nbarrel in January 2021. The upward trend is, however, expected to halt given \n \n \n \nthe decision of OPEC+ to maintain a gradual supply increase, as well as the \nrelease of strategic reserves by the US, China, Japan and others. \n \nGlobal inflation continues to rise driven by supply bottlenecks and rising \ncommodity prices. In the Advanced Economies, inflation is forecasted to rise to \n2.8% in 2021, but decline to 2.3% in 2022. Inflation in US, Eurozone and UK has \nbeen rising well away from their long-term target of 2%. In the US, inflation rose \nto 6.2% (y-on-y) in October 2021 from 5.4% in September 2021. In the Euro area, \ninflation rose from 3.4% in September 2021 to 4.1% in October 2021. In the UK, \ninflation increased from 3.1% in September 2021. In the EMDEs, inflation is \nforecasted to increase to 5.5% in 2021 from 5.1% in 2020, but will decline to 4.7% \nin 2022. During the year 2021, however, price developments across the countries \ncontinued to be mixed. Between September and October 2021, inflation \ndeclined in Egypt (from 6.6% to 6.3%), Kenya (from 6.95% to 6.45%) and Nigeria \n(from 16.33% to 15.99%). \n \nData on global capital flows shows that portfolio flows to Emerging Markets \nhave declined from US$28.1 billion in June 2021 to US$29.8 billion in September \n2021. In terms of composition, the data shows that debt portfolio flows have \nincreased relative to equity flow as US$26.2 billion of the flows were debt flows, \nwhile only US$3.6 billion was equity. In September 2021. The uncertainty over the \ntapering plans US Federal Reserve and the systemic risk buildup in the Chinese \nreal estate market have waned investor sentiments. \n \n2.2 Domestic Economic Developments and their Implications \nAvailable data from NBS showed that, as expected, the domestic output \nrecovery continued in the third quarter of 2021. Indeed, although the output \ngrowth of 4.03% achieved in Q3 2021 representing a slight decline from the \n5.01% achieved in Q2 2021, the Q3 growth was better than the earlier projected \n3.33%. The output performance in Q3 2021 was driven by the non-oil sector, \nwhich grew by 5.44% (y-on-y). The non-oil GDP growth was driven by growth in \n \n \n \nservices and agriculture. The oil-GDP contracted (y-on-y) by -10.73% in Q3 2021 \ncompared with -12.65% in Q2 2021. The contraction of the oil sector was due \nto fall in crude production level of Forcados and Escravos crude streams \nbecause of the leaks on the Trans Ramos and Bonga pipelines. The industrial \nsector also contracted by -1.63%, due to contraction in Mining and Quarrying. \nStaff forecasts show that output growth would be 2.98% for the Q4 2021 and \n3.10% for the year 2021 if the oil price remains at US$70. \nThe headline inflation, as expected, continued to moderate (y-o-y) from 16.63% \nin September 2021 to 15.99% in October 2021, representing the 7th consecutive \nmonthly decline. The moderation was driven by decline in both food inflation \nand Core Inflation. Food inflation moderated (y-on-y) from 19.75% in September \n2021 to 18.34% in October 2021. The decrease is driven by moderation in the \nprices of non-alcoholic beverages. The core inflation also slightly declined (y-o-\ny) to 13.24% in October 2021 from 13.74% in September 2021 driven by \nmoderation in the prices of processed food. Staff forecasts showed that the \ndeclining trend will continue, and inflation will to moderate to 15.06% in \nDecember 2021 and further to 14.08% in March 2022 driven by the positive \nimpact of the various intervention by CBN and FGN in agriculture and real \nsector as well as the arrival of the harvest season. \nReview of the Banking System Stability Report showed that the banking industry \nhas remained resilient. The key indicators showed that the industry is sound, with \nCapital Adequacy Ratio (CAR) 15.2% as at October 2021. Asset quality of the \nindustry has continued to improve with the Non-Performing Loans (NPLs) ratio \ndeclining further to 5.3% in October from 5.4% in September 2021. The total \ncredit issued by the banking industry to the economy grew from N19.39 trillion \nin October 2020 to N23.49 trillion in October 2021, representing a 21.12% \nincrease. The largest beneficiaries of the increased credit included \nManufacturing, General Commerce, Oil & Gas, Agriculture, Construction, \nHealth, ICT, Transportation & Storage, Power and Energy. Available data \n \n \n \nshowed that weighted average lending rates have continued to decline since \nJanuary 2021. \n \n3.0 The Basis for My Policy Choice \nIn choosing the options to tighten or loosen the current policy stance, I voted \nfor hold on all the policy parameters. This is because the data and staff forecasts \nsuggest that both inflation and output are not only trending in the desired \ndirection, but are also most likely to continue to evolve in the desired direction \nin the medium-term. Although the paces of inflation moderation and output \nrecovery may be slower than desired, neither tightening nor easing would be \nan optimal stance. On the one hand, tightening in order to hasten the rate of \ndisinflation would jeopardize the fragile output recovery. On the other hand, \nloosening to accelerate the rate of output recovery could halt the \ndisinflationary process and exacerbate the exchange rate pressure, which \nwould further threaten inflation. A hold, in my opinion, is the optimal choice for \nnow. \n \nConsequently, I voted to: \nRetain the MPR at 11.50 per cent; \nRetain the CRR at 27.5 per cent; \nRetain the asymmetric corridor at +100/–700 basis points; and \nRetain liquidity ratio at 30.0 per cent. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9. SHONUBI, FOLASHODUN A. \nThe policy environment in 2021 was characterised by efforts to rescue the global \neconomy from COVID-19 pandemic-induced economic downturn that has \nbeen likened, in severity to the great depression of 1930s. Though the global \neconomy recorded some rebound during the year, mainly due to slowly \nincreasing but uneven vaccination coverage and record level fiscal and \nmonetary stimuli, growth prospects remain threatened by spreading infections \nand emergence of mutated variants of the virus. The global economy therefore \ncontinued to suffer from intermittent lockdowns, with implications for controlled \n \n \n \nreopening of economies. Despite the implications of a weak global economy \nfor domestic economic prosperity, ingenuity of the monetary and fiscal policy \nauthorities have moderated the negative impact on lives and livelihood of \nhouseholds and businesses. While the economy still grapples with high but \ngradually waning inflation and fragile growth, these measures have led to a \nslow but steady emergence of a domestic economy with growth dynamics that \nis becoming largely driven by the internal strength and potentials of the \ndomestic socio and macroeconomic environment. \n \nGlobal and Domestic Economic Developments \nLargely measured reopening of economic activities due to increasing but \nuneven vaccination rate, high global trade and a generous stimulus regime \naided rebound of the global economy for most part of 2021. However, \nemergence of new variants and rising infection rate in a couple of economies, \nhave constrained incremental expansion of economic activities and \nconstituted a drag on prospects of further growth. With a rebound that has \nlargely been driven by manufacturing, other major sectors, including tourism, \nentertainment and travel remaining weak and trade losing momentum, \nrecovery is likely to remain slow and gradual. Consequently, the International \nMonetary Fund revised the growth forecast for advanced economies \ndownward to 5.2 per cent, while growth in Emerging and Developing \nEconomies was reviewed upward to 6.4 per cent in 2021. Global growth \nforecast was also revised downward to 5.9 per cent, on account of the lingering \nuncertainties. \n \nOn the domestic scene, the National Bureau of Statistics (NBS) reported that the \nNigerian economy grew further by 4.02 per cent (year-on-year) in the third \nquarter of 2021. This indicated a fourth consecutive quarters of growth, post the \nrecession recorded in the third quarter of 2020. Driven mainly by 5.44 per cent \nexpansion in the non-oil sector, the development also represented 11.09 per \ncent growth on quarter-on-quarter basis. The manufacturing sector grew further \n \n \n \nby 4.29 per cent (year-on-year) for the third consecutive quarters, indicating a \ngradual rebound, as also depicted by the further rise in Purchasing Manager’s \nIndex to 47.3 index points in October 2021, from 46.6 index points in the previous \nmonth. \n \nHeadline Inflation, though remained high, declined further for the seventh \nconsecutive month, to 15.99 per cent (year-on-year) in October 2021, from a \npeak of 18.17 per cent in March 2021. The deceleration reflected decline in \nboth food and core inflation to 18.34 and 13.24 per cent, respectively, due to \nthe commencement of harvest and relative stability in the foreign exchange \nmarket. On month-on-month basis, both food and core inflation also \ndecelerated. \n \nThe banking system was generally resilient in 2021, guided by the Bank’s \nmeasures designed to ensure the sector continues to efficiently serve as the \nveritable channel for financial intermediation. Industry capital adequacy and \nliquidity ratios, at 15.2 and 41.2 per cent in October 2021 respectively above \nregulatory minimum of 15.0 and 30.0 per cent throughout the year. Non-\nperforming loans ratio improved to 5.3 per cent, from 6.1 per cent at the \nbeginning of the year, though slightly higher than the 5.0 per cent regulatory \nlimit. \n \nGrowth in major monetary aggregates were generally below the target for \nfiscal 2021, with the exception of net claims on ‘other sectors’ which grew by \n12.24 per cent growth, above the 10.75 per cent benchmark, on account of \nthe Bank’s support for increased credit flow to the private sector to stimulate \ndemand and business activities. Movement of rates and dynamics of activities \nin the money market generally reflected the liquid conditions in the banking \nsystem. Post demutualization in the first quarter of 2021, the capital market has \nmaintained a good rally, with major market indices generally trending in the \npositive direction. \n \n \n \n \nFollowing the decisive measures taken by the Bank in the middle of 2021 to \nfurther improve efficiency of foreign exchange demand and supply \nmanagement, the external sector has continued to witness relative calm. \nAccretion to reserves, though slow, has steadily increased, while effective \ndemand continues to benefit from the improved internal balancing \nmechanisms of the foreign exchange market. The fiscal space remained weak \nand challenged by low revenue and high debt profile, under compelling \nimperatives for increased expenditure to address the current fragile \nmacroeconomic fundamentals. \n \nOverall Considerations and Decision \nSigns of improvement notwithstanding, the global economy is going into 2022 \nwith less strong fundamentals. Uncertainties around new variants of the virus \nand rising infection rates, weakening trade, port delays and high shipping costs, \nespecially in the advanced economies are major constraints to improved \neconomic activities. Inflation remains generally high and is projected to rise \nfurther as increasing cost of trade and recovering commodity prices is passed \ninto energy and goods prices. The probability of a muted rebound in the \nrecovery of the global economy reinforces the need to sustain the focus of \ncurrent domestic measures to catalyze domestic investment as the driver of \neconomic growth. \n \nHaving started the year on a fragile note, the current state of the economy is a \nsignpost that the measures we have deployed are working. Firstly, we got the \neconomy out of recession in record time, against prediction of prolonged \nperiod of contraction. Today, with four consecutive quarters of growth, driven \nmainly by sustained non-oil sector expansion, robust crude oil prices and \nsteadily recovering manufacturing sector, the prospect for further growth is \nbright. Clearly, our creative measures to address the supply side issues through \nthe various interventions in the productive sectors, while also supporting \n \n \n \nhouseholds to stimulate aggregate demand have not only supported growth \nbut also moderated inflation. Successive months of deceleration in year-on-\nyear inflation and recent trend of decline in month-on-month food and core \ninflation affirms the efficacy of the approach. \n \nAs I mentioned in my previous statements the banking sector, has been an \neffective and veritable channel, enabling sustained credit flow to the \nproductive sectors, thereby helping to ease constraints to output expansion, \nreduce production cost and ultimately moderate inflation. Also, through \ninnovative regulatory actions, the banking sector has remained resilient. The \nrespite provided by effectiveness of the banking sector is now being amplified \nby the gradual calmness in the external sector, as the full benefit of the far-\nreaching reforms continued to manifest in a stable foreign exchange market. \nTo preserve the gains, we must continue to uphold the supervisory imperatives \nof enforcing good behaviour and ensuring consequences for bad behaviour. \n \nDespite the recent moderation in expenditure and overall deficit, the tight fiscal \nspace remains a major constraint to the ability of the Government to provide \nthe required stimulus to further push expansion in economic activities. In this \nregard, I hold the view that leveraging the Public Private Partnership model will \nbe an effective approach to addressing the funding gap to aggressively \nimplement much needed strategic initiatives, especially in infrastructure and \npublic works. This will go a long way to further support the progress achieved in \nthe monetary space. \nI am convinced that our current policy posture to support domestic investment \nand demand as the driver of growth, in the face of a weakened global \neconomy is yielding positive result. Though the path to full recovery and \nsustainable growth require huge resources, that we are seeing slow but steady \nprogress provides encouragement to do more of what is working, discontinue \nthat which is hurting and explore more to take advantage of new opportunities \nin the domestic socio and macroeconomic environment. \n \n \n \nAs we continue to leverage on the lessons from the performance of the \nmeasures we deployed in the recent past, noting that the current numbers and \noutlook were promising, it is rational to do more to support the current trend. A \nmajor imperative is that we must remain supportive of the nascent growth \nthrough various finance support programmes, even as we sustain our \nadministrative approach at managing excess liquidity and its implications for \ninflationary pressure. \nI therefore vote to retain the: \n• MPR at 11.50 per cent; \n• Asymmetric corridor of +100/-700 basis points around the MPR; \n• Cash Reserve Ratio (CRR) at 27.5 per cent; and \n• Liquidity Ratio at 30.0 per cent. \n10. EMEFIELE, GODWIN I. \nGOVERNOR OF THE CENTRAL BANK OF NIGERIA AND CHAIRMAN, MONETARY \nPOLICY COMMITTEE \nAs the threats of the Covid-19 pandemic to food security, jobs and poverty \ncontinues to linger, my stance for the domestic economy remains pro-growth. \nAt the beginning of 2021, overwhelming uncertainty pervaded the economy \npressed by the 3rd wave of the pandemic. Today, with GDP growth and inflation \ntrends on track, expectations for 2022 is largely promising. I favour sustaining \nongoing measures to strengthen recovery and reverse structural deficiencies. \nTo further enhance short-term prospects, synchronised fiscal-monetary support \nshould be sustained as monetary policy continues to pursue price stability in \ngenres that are conducive to growth. \n \nDomestic conditions reflected the developments in the global economy, where \nGDP recovery remains robust. Short-term global outlook is strong, irrespective of \nthe 0.1 percentage point IMF downgrade of 2021 growth forecast to 5.9 \npercent. The headwinds to global outlook include long-lasting effects of the \npandemic, continued vaccine inequity, and the potential emergence of a \nmore aggressive variant of the virus. Following the ubiquitous covid-instigated \n \n \n \nliquidity injections and growing demand as more countries reopen, global \ninflation is elevated. Financial markets are recovering on the average, though \nhuge currency pressures are developing in some EMDEs. Generally, global \nrecovery is continuing. Yet, coordinated actions are required to resolve latent \nthreats to outlook, especially those related to vaccine inequity. \n \nIn the domestic economy, sentiments remain positive with improving outcomes \nand brightening outlook. Since 2020q4, GDP has maintained an upward \ntrajectory, consolidating from 5.01 percent in 2021q2 to 4.03 percent in 2021q3. \nThis reflected the continued robustness of non-oil activities, which grew by 5.44 \npercent in 2021q3 and contributed 4.93 percent to overall growth. At -10.73 \npercent, the oil sector contracted again and contributed -0.90 percent. This \nstructure does not only underscore the urgency of diversifying from oil but, more \nimportantly, buttresses the imperatives of insulating the economy from \nunpredictable shocks. The various CBN interventions to boost domestic non-oil \nproductivity, support diversification, and correct structural imbalances, are \nboosting economic outlook. \nThough vulnerability remain due to the persistent effects of the COVID-19, the \nNigerian economy is projected to strengthen in the near-term. With the nearly \n2.9 percent growth estimated for 2021q4 and the better-than-expected 2021q3 \noutcome, CBN growth forecast for 2022 was upgraded to about 3.1 percent as \nagainst a contraction of -1.92 contraction in 2020. This reflected upturns in \nbusiness and investor confidence as shown by improvements in the PMIs. The \nbusiness environment is equally optimistic following sustained policy supports in \nthe economy. Our medium-term goal is to fast-track growth above historic \naverage. Economic activities may reach pre-pandemic levels if the resilience \nof non-oil activities (especially agriculture and manufacturing sectors) are given \ncontinued impetus. Extensive structural reforms are also needed to ensure that \nlong-run paths of growth surpass potential. As business sentiments brighten, \nfollowing our various supply-side support and orderly implementation of \n \n \n \nmacroeconomic policies, l expect domestic fragility to diminish with benign \nknock-on effects on welfare and livelihood. \n \nNigeria recorded a seventh consecutive month of deceleration in headline \ninflation rate to 15.99 percent in October 2021 from 16.63 percent in September. \nThis reflected the disinflation in both the food and core components. Food \ninflation dropped 1.23 percentage points to 18.34 per cent, while core inflation \nreduced by 0.50 percentage points. Regardless, inflation remained at \nunacceptable levels, propped by structural inadequacies. Short-term \nprojections indicate further moderations in expected inflation, especially as \ndevelopment financing continue to resolve supply rigidities. \n \nAnalysis of monetary condition indicated a tepid outcome during the review \nperiod with mixed interest rate developments. While weighted average inter-\nbank call rate fell 3.21 percentage points to 10.00 percent in October 2021, \nopen-buy-back rate gained 1.07 percentage points to 12.18 percent. Monetary \naggregates expanded in October, although, below provisional targets. Broad \nmoney growth at 7.10 percent, was 2.54 percentage points below benchmark. \nThe observed growth was however attributable to the 9.12 percent expansion \nof net domestic assets underpinned by credits to the private sector. The banking \nsystem remains stable and resilient with CAR at 15.2 per cent; liquidity ratio, 41.2 \nper cent; and NPL ratio at 5.3 percent. In the FX market, exchange rate pressure \npersisted, despite external reserves accretion, while capital market metrics \nrecorded positive performances. \nIn my consideration, I note the enormity of the Covid-19 shock and its long-\nlasting impact on the global economy. The aftershock of the pandemic is \nexpected to reverberate into the medium-term, with huge ramifications for \ncountries with weak structural base. Yet, given the uptick in demand, global \noutlook is brightening, and outcome will be enhanced if vaccine inequity is \nresolved. For the domestic economy, I acknowledge the success recorded so \nfar with respect to output and inflation, the trends of which remain on track. To \n \n \n \ntackle the extraordinary shock from the pandemic, the CBN deployed \nunorthodox measures, results of which are beginning to touchdown. With our \nvarious development finance support for the real sector, and administrative \nmeasures to deal with excess liquidity, recovery of the Nigerian economy is \nstrengthening. It, however, remains fragile and below potential. There is the \nincreasing need to boost growth through deliberate reforms and reinforce the \nstructural base of the economy. \n \nI note that whilst short-term domestic outlook is improving, it is imperative to \nmaintain coordinated policies to bolster economic fundamentals. I support pro-\ngrowth measures, at this time, and favour price stability conducive to growth. \nCurrent inflation is higher-than-desired and needs to be curbed. We, however, \nalso need to consolidate GDP growth, create jobs and boost the welfare of \nNigerians. I, again, recognise the trade-off between GDP and inflation, but \nfavour the rectification of supply constraints. \n \nToday, with continued improvements in macroeconomic conditions based on \nour policies, I retain my cautious optimism. Given the forecasted trend, I am \nreluctant to upset the current trajectories of either growth or inflation. I note that \nboth are trending in the desired direction and could outperform pre-pandemic \nlevels in the near-term. To enable the effectiveness of extant policy measures \nto continue to permeate the system, without destabilising imminent equilibrium, \nI vote to: \n1. Retain the MPR at 11.5 percent; \n2. Retain the asymmetric corridor at +100/–700 basis points; \n3. Retain the CRR at 27.5 percent; and \n4. Retain liquidity ratio at 30.0 percent \n \nGODWIN I. EMEFIELE, CON \nGovernor \n November 2021", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No.139 of Monetary Policy Committee Meeting of November 22nd-23rd, 2021, with Personal Statements of Members.pdf"}
{"doc_id": "24db48d3c24bcf3224ffda23bffd0e44", "text": "1 \n \n \n \n \nCentral Bank of Nigeria Communiqué No. 93 of the Monetary Policy \nCommittee Meeting of Monday 20 and Tuesday 21 January, 2014 \n \nThe Monetary Policy Committee (MPC) met on January 20 and 21, 2014 \nagainst the backdrop of uncertainties in the global economy, \nespecially arising from the commencement of the QE3 tapering by the \nFed. In attendance were eight (8) out of the ten (10) members \nfollowing the retirement of Mr. Tunde Lemo, Deputy Governor, on \nJanuary 11, 2014 and Mr. John Oshilaja, an external member of the \nMPC, who completed his term on December 31, 2013. The Committee \nreviewed key global and domestic economic developments in 2013 \nand re-assessed the short- to medium-term risks to inflation, domestic \noutput and financial stability and the outlook for 2014. \n \nInternational Economic Developments \nThe global economy is expected to continue recovering from the \nglobal financial crisis, as growth is projected to accelerate in 2014. The \nInternational Monetary Fund (IMF) projected global growth at 3.4 and \n3.5 per cent in 2014 and 2015, respectively, up from 2.4 per cent in \n2013. Some other sources, however, have produced less optimistic \nprojections of global growth for 2014; for example, the United Nations \nDepartment for Economic and Social Affairs’ (UNDESA) has projected 3 \nper cent growth. The decision by the US Federal Reserve to reduce its \nmonthly asset purchases from USD85 billion to USD75 billion left most \nmarkets stable having already priced-in the development. The \nquantitative easing measures by the US Federal Reserve had helped to \nrestore momentum to the US economy and also contributed to the \nimprovement of the Eurozone economy in 2013. \n \nEurope is forecast to return to growth in 2014 after two years of \ncontraction. Greece, which has been at the centre of the Bloc's \n2 \n \nbanking and debt crisis, is expected to record its first economic \nexpansion in six years. Emerging markets that were major beneficiaries \nof cheap money from the Fed stimulus could experience financial \nmarket instability as tapering begins, although the US authorities have \nmade it clear that they remain sensitive to the impact of their domestic \npolicies on global markets and will therefore aim to minimise \ndisruptions. \n \nGlobal inflation is projected to rise to 2.71 per cent in 2014, up from \nabout 2.30 per cent in 2013. Favorable developments in food and fuel \nsupply would moderate upward pressure on prices of major \ncommodities, despite the expected acceleration in global activity. The \nUS recorded inflation of 1.5 per cent in December, up from 1.2 per cent \nin November, 2013. \nMost central banks maintained a cautious posture in 2013, retaining or \nvarying policy rates only slightly. The financial markets expect monetary \nauthorities to continue with policies aimed at supporting growth in \n2014. In effect, monetary conditions are likely to remain easy in key \nadvanced economies over the short- to medium-term on the back of \nthe forward guidance that monetary authorities in these economies \nhave given, with regard to the conditions that must be met before any \nchange in policy stance comes into effect. \n \nDomestic Economic and Financial Developments \nOutput \nThe National Bureau of Statistics (NBS) estimated real Gross Domestic \nProduct (GDP) growth rate of 7.67 per cent for the fourth quarter of \n2013, which was higher than the revised figure of 6.81 and 6.99 per cent \nrecorded in the third quarter, and the corresponding period of 2012, \nrespectively. Overall, growth rate for fiscal 2013 was estimated at 6.87 \nper cent up from 6.58 per cent in 2012. \nThe non-oil sector remained the major driver of growth, recording 8.73 \nper cent in the fourth quarter of 2013. The growth drivers in the non-oil \nsector remained agriculture; wholesale and retail trade; and services \n3 \n \nwhich contributed 1.64, 2.34, and 2.66 per cent, respectively. The \nrelatively robust growth performance despite sluggish global recovery \nreflected the continuing favourable climatic conditions for increased \nagricultural production, sustained outcome of banking sector reforms \nand macroeconomic stability. \n \nPrices \nThe moderation in inflationary pressure, which began in the fourth \nquarter of 2012, continued in 2013. The year-on-year headline inflation \nfell consistently from 9.0 per cent in January to 8.6 and 8.4 per cent in \nMarch and June, respectively, before ending the year at 8.0 per cent. \nAlso, food inflation, which constitutes 51.8 per cent of the CPI basket, \ndeclined from 10.1 per cent in January to 9.5, 9.6, 9.4 and 9.3 per cent \nin March, June, September, and December 2013, respectively. \nHowever, core inflation initially declined to 7.2 and 5.5 per cent in \nMarch and June from 11.3 per cent in January, but rose during the \nsecond half of the year to 7.4 and 7.9 per cent in September and \nDecember, 2013, respectively. The moderation in domestic price level \nwas largely due to the tight monetary policy stance coupled with the \nrelatively stable exchange rate regime during the period, which \nresulted in single digit inflation in the three measures for the whole year. \nThis is the first time the country has achieved this since 2007. \nThe Committee noted with satisfaction that the year-on-year headline \ninflation remained within the indicative target range of 6-9% in the \nsecond half of 2013. However, the Committee noted the underlining \npressure on core inflation, which may not be unconnected with the \nwidening spread between official and BDC exchange rates. In order to \nhead off the spectre of rising inflation in 2014, concrete actions will be \nneeded to stabilize the currency and minimize the divergence \nbetween the two segments of the foreign exchange market. \n \nMonetary, Credit and Financial Market Developments \nBroad money supply (M2) contracted by 4.82 per cent in December \n2013 over the level at end-December 2012, in contrast to the growth of \n16.39 per cent in the corresponding period of 2012. M2 was also below \n4 \n \nthe growth benchmark of 15.20 per cent for 2013. Aggregate domestic \ncredit (net) grew by 11.11 per cent in December 2013, over the end-\nDecember 2012 level. The aggregate domestic credit (net) at end-\nDecember 2013 was, however, below the provisional benchmark of \n22.98 per cent for 2013. The decline in M2 was due mainly to the \ndecrease in Net Foreign Assets by 5.86 per cent. \nInterest rates in all segments of the money market reflected the liquidity \nconditions in the banking system. At the MPC meeting of November 18-\n19, 2013, the Monetary Policy Rate (MPR) was retained at 12.00 per \ncent with a symmetric corridor of +/- 200 basis points, thus effectively \nmaintaining the SLF and SDF rates at 14.00 and 10.00 per cent, \nrespectively. Alongside the existing Cash Reserve requirement (CRR) of \n12.0 per cent, the 50.0 per cent CRR on public sector deposits was \nretained \nto \naddress \nexcess \nliquidity \nin \nthe \nbanking \nsystem. \nConsequently, both the weighted average inter-bank call and OBB \nrates opened at 11.73 per cent in December 2012 but closed at 10.86 \nand 10.46 per cent in December 2013, respectively. \nThe capital market continued its rally with the equities market providing \nthe lead. The All-Share Index (ASI) increased by 47.2 per cent from \n28,078.81 on December 31, 2012 to 41,329.19 on December 31, 2013. \nMarket Capitalization (MC) increased by 47.4 per cent from N8.97 \ntrillion to N13.23 trillion during the same period. Improved earnings and \ninvestor confidence in macroeconomic management contributed to \nthe rise in stock prices. \n \nExternal Sector Developments \nThe end-period exchange rate remained stable at the w/rDAS and \ninterbank segments but depreciated significantly at the BDC segment. \nThe exchange rate at the w/rDAS-SPT in 2013 opened at N157.33/US$ \n(including 1% commission) and closed at N157.26/US$, representing an \nappreciation of N0.07k or 0.04 per cent. The inter-bank selling rate \nopened at N156.25/US$ and closed at N159.90/US$, representing a \ndepreciation of N3.65k or 2.34 per cent for the period. However, at the \nBDC segment of the foreign exchange market, the selling rate opened \n5 \n \nat N159.50/US$ and closed at N172.00/US$, representing a depreciation \nof N12.50k or 7.84 per cent. \nGross external reserves as at December 31, 2013 stood at US$42.85 \nbillion, representing a decrease of US$ 0.98 billion or 2.23 per cent \ncompared with US$ 43.83 billion at end- December 2012. The \nCommittee noted that the decrease in the reserves level resulted \nlargely from a slowdown in portfolio and FDI flows in Q4 2013 resulting in \nincreased funding of the foreign exchange market by the CBN to \nstabilize the currency. The Committee again expressed concern over \nthe continued depletion of the Excess Crude Account (ECA) which \nbalance stood at less than US$2.5 billion on January 17, 2014 compared \nwith about US$11.5 billion in December 2012. This absence of fiscal \nbuffers increased our reliance on portfolio flows thus, constituting the \nprincipal risk to exchange rate stability, especially with uncertainties \naround capital flows and oil price. \n \nThe Committee’s Considerations \nThe MPC welcomed the sustained stability of the exchange rate and \nsingle digit inflation in 2013. It, however, identified four (4) key concerns \nfor policy in the short- to medium-term: \n1. Depletion of fiscal buffers following the continuing decline in oil \nrevenue, rundown of reserves and depletion of excess crude oil \nsavings; \n2. Falling portfolio and FDI inflows; \n3. Widening gap between the official and the BDC exchange rates; \nand \n4. Creeping increase in core inflation. \n \nOn the depletion of fiscal buffers, the Committee decried the \ncontinuous fall in revenue from oil despite stable price of oil and \nproduction in 2013. Although the Committee acknowledged output \nlosses due to theft and vandalism, this could not wholly explain the \nmagnitude of the shortfall in revenue. As a consequence, accretion to \nexternal reserves remained low while much of the previous savings \nhave been depleted, thereby undermining the ability of the Central \n6 \n \nBank to sustain exchange rate stability. The Committee therefore, \nurged the fiscal authorities to block revenue leakages and rebuild fiscal \nsavings needed to sustain confidence and preserve the value of the \nnaira. \n \nThe MPC also noted the reduction in portfolio inflows driven by the \ncommencement of the QE3 tapering by the Fed, transition concerns at \nthe CBN and continued depletion of the ECA, thus dampening investor \nconfidence. The reduction of the US stimulus especially, could in \naddition, trigger capital flow reversals and put greater pressure on the \nnaira exchange rate. The Committee also expressed concern about \nthe widening gap between the official and the BDC exchange rates, \nnoting that this could precipitate speculation and round-tripping. \nThough, the BDCs represent a small component of the foreign \nexchange market, the widening spread appeared to have fed into \ncreeping increases in core inflation. \nThe Committee re-affirmed its commitment to a stable exchange rate \nregime while urging the fiscal authority to provide support by reducing \nfiscal leakages, improving controls around oil revenues and reviewing \nterms around production sharing agreements with oil companies, while \nawaiting the passage of the Petroleum Industry Bill (PIB). The \nCommittee also noted the necessity for a complementary monetary \npolicy response to ensure sustained exchange rate stability and \nconvergence of rates in various segments. In the light of this, two \noptions were considered: \na) Allowing a depreciation of the currency to avoid further \ntightening and depletion of reserves; and \nb) Maintaining our commitment to currency stability while stressing \nthat monetary policy is almost at its limits and needs support from \nthe fiscal side in the form of excess crude savings if currency \nstability is to be maintained in the future. \nThe Committee decided that the costs of a weaker naira far outweigh \nthe benefits to the Nigerian economy and the core mandate of the \nCBN. It therefore opted to maintain its commitment to currency \nstability. Furthermore, having looked at all the options, the Committee \n7 \n \ndecided against excessive reliance on external reserves to support the \nexchange rate and opted for monetary tightening until fiscal buffers \nare rebuilt. \nDecision \nHaving considered all the issues above the Committee decided as \nfollows: \n All members voted for an increase in CRR on public sector \ndeposits from 50 per cent to 75 per cent with effect from February \n4, 2014 \n Five (5) members voted for a retention of CRR on private sector \ndeposit at 12 per cent while three (3) voted for an increase in this \ncomponent to 15 per cent \n One (1) member voted for allowing the currency to depreciate \nby either shifting the mid-point or widening the band. \nThe decision is therefore as follows: \n1. MPR remains at 12 per cent +/- 200 basis points and liquidity ratio \n(LR) at 30 per cent \n2. Public sector CRR increased from 50 per cent to 75 per cent \n3. Private sector CRR retained at 12 per cent \n4. The CBN to take immediate step to redress the supply-demand \nimbalance in the BDC segment while maintaining its focus on \nanti-money laundering (AML) activities. \n \nThank you for Listening \n \nSanusi Lamido Sanusi, CON \nGovernor \nCentral Bank of Nigeria \n \n21st January, 2014 \n8 \n \nPERSONAL \nSTATEMENTS \nBY \nTHE \nMONETARY \nPOLICY \nCOMMITTEE \nMEMBERS: \n \n1.0 ALADE, SARAH \n \nThis first MPC of the year is coming at a time of some uncertainties in \nthe world economy. The world’s four largest economies are currently \nundergoing transitions with the United State of America struggling to \nboost growth in a fractured political environment. China is moving from \na growth model based on investment and exports to one led by \ninternal demand. Europe is struggling to preserve the integrity of its \ncommon currency while resolving a multitude of complex institutional \nand debt issues, and Japan is trying to fight two decades of deflation \nwith aggressive and unconventional monetary policies. All these have \nimplications for the Nigerian economy, with deep dependency on \nexport earnings and external demand. These development coupled \nwith internal domestic dynamics during an election year, which are \ndiscussed below will require careful maneuvering and appropriate \npolicies to safeguard the stability of the economy. Against this \nbackground, I support a no change in Monetary Policy Rate (MPC), a \n75 per cent increase in public sector deposits Cash Reserve \nRequirement (CRR) and a review of the exchange rate midpoint to \nsafeguard the economy. \n \nHeadline inflation increased slightly to 8.0 per cent in December \ncompared \nto \n7.9 \nper \ncent \nrecorded \nin \nNovember \n2013. \nNotwithstanding the slight increase in inflation in December 2013, the \ngoal of single digit inflation was achieved in 2013 with average \nheadline inflation for the year at 8.52 per cent. In the same period, core \ninflation rose slightly to 7.9 per cent in December from 7.8 per cent \nrecorded in November 2013, while food inflation remained unchanged \nat 9.3 per cent from the previous month. Despite this downward trend \nin inflation, there are still pockets of risks in the short term. These include \nthe upcoming planting season and the fiscal risk through increased \nelection spending. Additional risks include reduction to the fiscal buffers \nand its impact on the investors/consumer confidence and exchange \n9 \n \nrate stability. Based on this, monetary policy should remain restrictive to \nforestall the anticipated impact of fiscal risks and food seasonality. \n \nAlthough there is likelihood of heightened fiscal spending as the \nelectioneering season commence, the late passage of the bill give \nroom to maneuver in the first quarter. The 2014 national budget \nsubmitted to the National Assembly has a deficit of 1.9 per cent, which \nis lower than 2.17 per cent recorded in 2013 and even lower than the 3 \nper cent stipulated in the Fiscal Responsibility Act. The late passage of \nthe bill will mean that expenditure would be delayed suggesting \ndampened risk for front-loading of expenditure in the first quarter. \nMonetary policy will have to expect an increased spending later in the \nyear due to electioneering activities. \n \nThere has been intense pressure on exchange rate as the spread \nbetween the official and Bureau de change (BDC) rates has widened. \nAs at December, 2013, foreign exchange reserves stood at $42.85 \nbillion, mainly on the back of foreign inflows and reduced government \nrevenue. Government oil revenue declined throughout 2013 on the \nback of oil theft and pipeline vandalism, resulting in the depletion of \nExcess crude Account (ECA) and pressure on the exchange rate. In \nthe face of planned sustained tapering from the United States, it is \nimportant that an appropriate exchange rate policy is adopted to \nbalance the objective of stable currency without unduly depleting the \naccumulated reserves. Effort should be intensified at rebuilding the \nfiscal buffers in anticipation of exit as cheap money dries up. \nOtherwise, the exit could pose downside risk to the domestic economy \nthrough exchange rate pressure and reserve depletion if not managed \nproperly. Already, available data suggest that Gross Foreign Direct \nInvestment (FDI) and portfolio inflows decreased significantly in the last \nquarter of 2013. Given that monetary policy is approaching its limit, \nthere is need to allow for more flexibility in the exchange rate. \n \nGross Domestic Product (GDP) although robust is trending below \nforecast. The 2013 third quarter GDP grew by 6.81 and the projection \nfor the fourth quarter is expected to be higher due to reforms in the \n10 \n \nagricultural sector which drove the growth in non-oil sector to 7.95 per \ncent in the third quarter. The oil sector’s contribution to GDP declined \nby -0.58 per cent in the third quarter attributable to oil theft and \npipeline vandalism in the Niger Delta that have resulted in the \nshutdown of some oil wells and reduced oil production. Although \nNational Bureau of Statistics (NBS) projections suggest a GDP growth of \n7.27 per cent for 2014, its achievement will require careful planning and \nmaintenance of stable macroeconomic environment. Precaution \nshould be taken to safeguard the Naira, suggesting that monetary \neasing at this time is premature, however to guarantee growth, \nincreasing rate could dampen the projections. It is therefore important \nto manage the inflation-growth nexus in the face of high level of \npoverty in the country. Base on this, focus must be on striking the right \nbalance between interest rate and flexible exchange rate in the \nmanagement of inflation. \n \nThe banking system continues to show high level of liquidity, suggesting \nthat monetary easing at this time may be counterproductive. Banking \nsystem deposits at the CBN deposit facility has consistently been high. \nEven with OMO operations, Interbank and OBB rate still traded below \nthe standing deposit facility rate at 10.54 per cent and 10.23 per cent \nrespectively as at January 10, 2014. However, lending rates remained \nhigh at over 23 per cent, suggesting that care must be taken to \nmanage the structural liquidity and the structural impediments to credit \ngrowth. In addition, pressure on the exchange rate window is \nimpacting the foreign exchange reserves negatively. Therefore, a \nbalance between defending the naira and saving the reserve must be \nstruck for economic stability. \n \nGlobal economic growth projection is showing some improvements \nboosted by recovery in major economies especially in the United \nStates. The IMF upgraded the global economic outlook to 3.6 per cent \nform 2.9 per cent projected in the April World Economic Outlook (WEO) \nciting stronger US economy and return to positive but subdued growth \nin the euro zone. The Federal Reserve Quantitative Easing (QE) have \nhelped channel cheap funds to emerging markets such as Nigeria \nhelping to drive equity market growth and reserve build up. However, \n11 \n \nthe Federal Reserve policymakers decided last month to cut the \nmonthly bond purchases to $75 billion from $85 billion and suggested it \nwould further trim its buying in future meetings if conditions continue to \nimprove. Most analysts are of the opinion that economic conditions are \npositive enough to suggest that the Fed will continue reducing its bond \npurchases in 2014. This has implications for foreign inflows, reserve build \nup and exchange rate stability in emerging countries. There is also a \npossibility that as the cheap money from quantitative easing dries up, \nforeign investors could exit the country with consequences for the \ndomestic economy. Therefore to remain competitive and attract \nforeign investors, tight monetary policy stance should be maintained. \nBased on the above, with benign inflationary outlook, high structural \nliquidity and sustained pressure on the foreign exchange, I will support \na no increase in Monetary Policy Rate, a 75 per cent increase in public \nsector deposits Cash Reserve Requirement (CRR) and a review of the \nmidpoint in exchange rate band. \n \n \n2.0 BARAU, SULEIMAN \n \ni. \nREVIEW OF SIGNIFICANT DEVELOPMENTS \n \nThe estimated GDP growth rate of 6.87 for 2013 is impressive and is \nan indication of a rebound in growth statistics as it is higher than \n6.58% recorded in 2012. The 7.67% recorded in Q4 2013 did not \nonly show a very strong rebound over growth performance in \nearlier quarters of 2013 but it is also higher than 6.99% recorded in \ncorresponding period (Q4) of 2012. \n \nThe robust growth recorded in 2013 is inspite of the tight monetary \nmeasures implemented by the CBN. A point may be made that \nthis is below Nigeria’s potential but we must also state that this \ndevelopment shows that what is required to spur radical growth in \nthe real sector is the implementation of significant reforms that \nwould make credit to gravitate towards that sector. The second \npoint to make is that Nigeria’s GDP growth is taking place at a time \nthat other emerging economies such as India have not reversed \n12 \n \nrecent trends in GDP decline effectively since the beginning of the \nglobal financial crises. Finally, Nigeria’s GDP growth is substantially \nand consistently higher than Sub-Saharan African estimate of 5% in \n2013. \n \nThe global economy is showing strong signs of recovery. The IMF \nexpects global growth to accelerate from 2.9% in 2013 to 3.6% in \n2014. While the US economy has shown signs of strong growth \ngoing into 2014, China and other emerging market economies are \nprojected to continue to grow at levels that are higher than those \nof the advanced economies. Europe is also forecast to return to \nstrong growth in 2014 after over two years of crisis. Overall the \nrebound in global growth would on balance be positive to \ndeveloping economies including Nigeria. \n \nFinancial markets around the world were not significantly jolted by \nthe “tapering” announcement of December 18, 2013 by the US \nFederal Reserve System reducing monthly Asset Purchase program \nfrom $85 billion to $75 billion monthly. This is because markets had \nanticipated and largely factored in the expected “tapering”. \nLatest job figures released in the US shows that targets have been \nmissed and informed opinion suggest that ‘’tapering’’ would \ncontinue to be gradual perhaps in magnitude of $10 billion \nreduction until end2014. What is very clear is that the Quantitative \nEasing measures of the Federal Reserve have helped the strong \nrebound of the US, reversal of slide in Europe and have supported \nrecent modest growth in developing and emerging economies. \n \nDomestic inflation remains largely subdued. All measures of \ninflation remained at single digit. HeadIine Inflation (YoY) inched \nup marginally to 8.0% from 7.8% in December and November \nrespectively. The Core measure continued its marginal upswing \nfrom 7.75% to 7.87% in November and December respectively. \nHowever Food Inflation moderated to 9.25% in December \ncompared to 9.31% in November. It is important to highlight that \nmonth on month measures for the three broad measures of \ninflation have shown increasing tendencies. \n13 \n \n \nMoney markets rates were relatively stable during review period. \nWith average interbank call rate at 12.24% and OBB at 11.98%, \nrates were largely within the corridor throughout 2013. However, \nthe sustained high spread between deposit and lending rates \nremain a source of concern for policy. \n \nExchange rates remained largely stable particularly in the \nWholesale/Retail (w/r) DAS and Interbank segments. The rate at \nw/r DAS witnessed appreciation of 0.04 in 2013 while interbank and \nBDC rates depreciated by 2.34% and 7.84%. Of concern is the \npremium between rDAS and BDC rates which has widened to \n9.38% due largely to measures taken to check the uncontrolled \noutflow of funds at the BDC window. \n \nThe level of external reserves declined to $42.85 billion but they \nremain largely at decent levels, capable of supporting over 10 \nmonths of import. There has been substantial downward pressure \non the reserves due to a combination of declining revenues from \nsale of crude oil due to leakages and increased demand that is \ndriven by the liquidity in the system. \nii. \nCHALLENGES/RISKS \nThe following (not in any particular order of importance) are the key \npressure points facing the MPC; \n Keeping inflation at single digit in view of the forecasts for 2014 and \nthe upward trend of the Core Inflation measure. \n Reversing the declining levels of foreign reserves particularly in \nview of the observed reduction in and likely reversal of foreign \nportfolio inflows following reversal of QE by the Fed of the USA. \n \nContaining demand and supply issues at the Foreign Exchange \nmarket. The supply issues are largely as a result of reduced \nrevenues due to oil theft and other possible sources of leakages. \nDemand pressure is driven largely by the evidence of sustained \nliquidity, fiscal spending and market sentiment. \n14 \n \n Checking the premium between rDAS and BDC rates. The \nimmediate cause for the sharp rise in premium is traceable to the \nrecent measures taken by CBN to curb money laundering. This was \naggravated by activities of clients who may have been forced to \nrecourse to the use of foreign currencies to avoid charges \nassociated with Naira cash withdrawals. \n Preparing for the effect of capital outflows/’’tapering’’ The newly \nappointed US Fed Chief Yallen’s statement that QE will continue \nthrough 2014 is a good development. The pattern of tapering is still \na source for concern. A sudden and drastic reversal will lead to \nmassive reversal of portfolio flows. It is gratifying that a survey of \nfinancial experts in the US suggests that ‘’tapering’’ may be in \nmonthly equal amounts of N10b. \n Narrowing the spread between Deposit and Lending rates. While \nmarket rates have remained stable, the spread between deposit \nand lending rates have remained disturbingly high. The shared \nservices initiative of the banking industry when fully implemented \nwould help to narrow spreads. Nigerian banks also have one of \nthe highest costs of doing business but the weak state of the fixed \nincome segments of the capital market, have also reduced \noptions available to borrowers and this has led to the distortion in \npricing the cost of capital by banks who now literally play in quasi-\noligopolistic market scenario. \n Pre—election year/fiscal spending – liquidity injection is expected \nto be stepped up. This is perhaps responsible for the recent \nsubstantial reduction in the Excess Crude Account (ECA) balances. \nFurther depletion of the ECA will increase the liquidity risk to the \nsystem and impact price stability negatively. \n Oil price/international oil demand/global growth in oil production; \nstaff reports indicating that growth in production will marginally \noutstrip demand growth in spite of the shale oil developments \nmake the oil price outlook, at least in the short run, to be positive. \nThe crises in South Sudan and Syria though unfortunate, appear \nhelpful. Strong oil price forecast should help or at least reduce the \neffect of oil revenue leakages and will impact portfolio flow risk but \n15 \n \noil price collapse is still a risk we must keep in view given the volatile \ncurrent state of the global economy. \niii. \nFOREIGN EXCHANGE, MARKET STABILITY AND FISCAL ISSUES \n Out of the above challenges, the issue of currency stability \n(exchange rate and smooth functioning of the foreign exchange \nmarket) should now take the centre stage in view of recent \ncommentary \nadvocating \nsome \nform \nof \ndepreciation \nor \ndevaluation to address the strong demand and exchange rate \npremium between rDAS and BDC rates. I have the following \ncomments on this matter; \n I am aware of the recurring debate as to whether the Naira is \novervalued or not at the moment. The jury is still out there on this \nmatter. \n The increased foreign exchange demand we have witnessed \nrecently is driven by established high level of liquidity in the system \nwhich itself is caused by past accelerated fiscal spending. \n Depreciation of the Naira will have significant pass through effect \non domestic prices and obviously wipe out the gains we have \nmade in taming inflation. Besides, being an import dependent \neconomy, depreciation will not benefit the economy unless we see \nstructural reforms that will help diversify the economy, make our \nproducts/exports internationally competitive and stimulate exports. \n The aggravated demand for foreign exchange (for transfers/Letters \nof Credit, valid) that we have seen in 2013 is largely in the area of \ninvisibles which has increased by 23.8% from 2012 to 2013 or 24% \n($13.3b) and 48.2% ($26.1b) of total outflows. \n Total Demand for Foreign Exchange in 2013 was $35 billion while \ntotal accretion to reserves from purchase of foreign exchange \nfrom Government excluding autonomous sources was $45billion. \nAt current estimated level of supply and demand, it is difficult to \njustify a depreciation. In this regard, it is difficult to rationalize \nmarket sentiment beyond saying that we should depreciate simply \n16 \n \nbecause other emerging economies, with less strong market \nfundamentals, have also depreciated. \n In assessing the Naira/ dollar exchange rate, there are two levels of \nanalysis that is required. Whether the demand/supply interplay is \ndriven by fundamental or technical factors. In my view demand is \nnot driven by fundamental but by technical factors and market \nsentiments which we could address. The second level is whether \nour response should be strategic or tactical. In terms of strategy, I \nrecommend that currency stability is important given the \nconsequence of depreciation on the economy unless it is \nabsolutely necessary. We have a large number of tactical \nmeasures \nthat \nwe \ncould \ntake \nto \ncontain \nsome \nof \nthe \ndemand/supply pressures and by extension, the exchange rate. \nThese have started and should be sustained. In addition to these, \nwe need to take out further liquidity from the system so as to \nreduce the demand pressure. We should consider depreciation \nafter these measures have failed. \n \niv. \nRECOMMENDATIONS \nIt is in view of the foregoing issues, challenges and pressure points that I \nvoted as follows; \n That we maintain the current tight policy regime \n That we increase Cash Reserve Rate (CRR) to 15% and Public \nSector CRR to 75% \n That we keep Monetary Policy Rate (MPR) at 12% \n That we maintain the corridor around MPR at plus and minus 2% \non the Standing Lending and Standing Deposit Facilities. \n That we keep minimum Liquidity Ratio at 30% \n That we keep the Net Open Position limit at 1% of Shareholders \nFunds \n \n \n \n \n17 \n \n3.0 GARBA, ABDUL-GANIYU \nMY VOTE \ni. \nI vote for (i) an increase in the CRR on public sector deposit from 50% \nto 75% and (ii) holding CRR on private sector deposit at 12%; MPR at \n12% and the asymmetric corridor of ±2%. \nJUSTIFICATION \nii. \nGiven the structure of the Nigerian economy and, the inflation \nprocess in particular, a stable exchange rate is critical to the primary \ngoal of price stability. Available evidence links the downward trend \nof the headline inflation from 12% in December 2012 to 8% in \nDecember 2013 to a stable exchange rate regime. \niii. \nYet, a stable exchange rate regime has been achieved by \nsacrificing \nmonetary \npolicy \nindependence \na \npoint \nthat \nis \ntheoretically obvious from the impossible trinity thesis. Ideally, the \nmaintenance of stable exchange rate regime ought to make fiscal \npolicy a more potent instrument for achieving growth and \nemployment goals. However, the fiscal policy regime is yet to take \nadvantage of the stable exchange rate and price stability to \ndevelop national economic competitiveness. Also, a non-forward \nlooking and non-strategic management of oil and gas resources is \nfailing to sustain inflows of forex revenue to support monetary policy \nin stabilizing the exchange rate with minimal tightening. \niv. \nIt is clear to me that (i) a forward looking fiscal policy regime is \ncritical to the attainment of macroeconomic goals in Nigeria; (ii) a \nforward looking fiscal policy depends on a commitment to the fiscal \nrules in the Fiscal Responsibility Act of 2007 and (iii) a strategic and \nforward looking management of oil and gas resources is critical to \nbuilding the forex reserves required to support a stable currency. \nv. \nThe macroeconomic management in Nigeria as I indicated in my \nlast personal statement faces two key structural challenges that \nneed urgent attention. The first is the global challenge that is rooted \nin the low interest rate and quantitative easing trap that the major \nwestern economies have dug themselves into. The trap has (i) \nweakened the transmission mechanisms of policies (monetary and \n18 \n \nfiscal) and (ii) distorted financial-real economy relationships while \ncausing financial markets to malfunction in the allocation and \npricing of financial assets. As a consequence, global financial flows \nare threatening the financial and economic stability of emerging \nmarkets. The danger is acute for economies committed to \nexchange rate stability and free capital flows. This is because the \nmonetary policy of such an emerging market could easily be \ntrapped in a high interest rate regime because easing in such a \nregime will exert downward pressures on the exchange rate. A \nstable exchange rate and price regime could very easily unravel. \nvi. \nTo the extent that exchange rate stability is necessary for the \nattainment of the primary goal of price stability, and given the \npressures that rising yield in developed economies are exerting on \nan expanding set of emerging countries, monetary policy has to be \nforward looking. Therefore, a monetary response to emerging \ndangers is necessary. \nvii. \nI have always argued consistently for a creative mix of policies and \ninstitutional changes because institutions and the incentives they \nembed are critical to the strategies and outcomes of the games \nthat economic agents play in Nigeria. For instance, while simplistic \nanalysis will narrow policy options to that defined by the impossible \ntrinity, creative analysis expands the choice set and enables a not \nonly an informed choice but, a wise one. We now know from past \nexperiences and evidence that a creative mix of policies works. We \nalso know from studies and past experience that a regime of (i) \nlowering supply to BDC and (ii) rDAS creates arbitrage opportunities \nthat rational players exploit and widens regardless of the \nfundamentals. Whereas, a positive current account balances and a \npositive balance on the financial flow account should lead to \nupward pressures on the exchange rate appreciation, arbitrage \nopportunities works contrariwise. In 2011, we confronted a similar \nsituation that was effectively checkmated by appropriate reaction \nfunctions –policy/institutional. \nviii. \nOf the options evaluated, the CRR on public sector deposits has \nproven to be very effective as an instrument of monetary policy. As \nwe have argued since the July MPC, the increase in the CRR on \npublic deposit is a game changer for monetary policy, for fiscal \npolicy, for Nigerian financial markets and, for Nigerian banks. \n19 \n \nPersonal Statements have been providing forward guidance about \nthe policy direction on public deposit. Forward looking fiscal policy \noperators ought to be working speedily towards a Treasury Single \nAccount (TSA) while forward looking deposit money banks ought to \nbe changing (i) their business model hence, (ii) the composition of \ntheir liabilities and assets. \nix. \nThe increase in public sector CRR to 50% in July 2013 was \ncomplemented by financial system stability supportive measures. We \nnow know as anticipated that the rise in OBB and interbank rate was \nshort-lived. Also, that the short term interest rates (maximum and \nprime lending rates) were flat while the treasury bills rate has trended \ndownwards. In addition, the composition of the deposits of the DMBs \nhas been shifting significantly in favour of public sector deposits \nwhich rose by 148% to N5.9 Trillion by ending of December 2013. \nx. \nIn voting to increase the CRR on public sector deposit to 75%, I \nexpect the fiscal authorities to speed up the process towards the \nTreasury Single Account (TSA) which I have consistently argued is \n“indispensable (i) to avoiding a high interest rate trap and (ii) to \npreparing the economy to soften the likely adverse effects of the \nlow interest rate trap imploding.” \nxi. \nI have also anchored my vote on the premise that with “a more \nefficient and effective cash management that a Treasury Single \nAccount will facilitate; the federal government would be a net \nlender to the economy. This will have several positive effects: (i) less \ndependence of DMBs on government securities; (ii) improved \nefficiency in the pricing and allocation of credit; (iii) transition from \ncrowding-out effects of borrowing to crowding-in effects of \ngovernment lending; (iv) rise in money multiplier through increased \nintermediation by DMBs; (v) potentially lower interest rates; (vi) less \ndependence on portfolio flows; (vii) more efficient pricing and \nallocation of financial assets and (viii) reduced risks of financial \ncontagion.” \n \n4.0 MOGHALU, KINGSLEY CHIEDU \n \nThe Monetary Policy Committee meets at a time of significant \nuncertainty in which the immediate horizon for monetary policy is \n20 \n \nfaced with strong challenges. In arriving at my vote I have taken into \nconsideration the following factors: \n The role of fiscal factors in the current difficulties, marked by a \nsevere decline in the Excess Crude Account over the past year, \nthus leaving the country dangerously vulnerable to external \nshocks as a result of the lack of fiscal savings. There is no \nindication that this situation will change in the near to medium \nterm. \n Sharp declines in Foreign Direct Investment and portfolio inflows \nas a result of the commencement of a tapering of quantitative \neasing (QE) by the United States Federal Reserve Bank, but also \npartly owing to the depleting ECA. \n The difficulties that have buffeted the naira as an anchor of price \nstability, with the increased gap in rates between the official and \nparallel markets owing to bottlenecks in supply to bureau de \nchange. \n The rise of core inflation, headline inflation, and staff projections of \ninflation heading upwards in the next six months. These forecasts \nare based largely on BDC rates for the naira, net credit to the \ngovernment, and on the quantum of reserve money. \nAgainst this background, the options before the MPC appear to be \nmainly between an intervention in monetary conditions through the \nMonetary Policy rate and\\or the Cash Reserve Ratio by increasing \neither of both, or depreciating the naira while maintaining monetary \nconditions. \nIn favour of a currency depreciation we have the argument that the \ndifference between the official and parallel rates has persisted for the \npast few months, and the CBN has spent significant amount of reserves \nto maintain the value of the currency, suggesting that perhaps the \nexchange rate may be artificial and there is a need to “bite the bullet” \nof depreciation. This is especially so when we consider that the CBN has \nfor the last few years defended the value of the naira not in terms of \nseeking a fixed exchange rate but of a predictable band within which \nthe naira can be traded, thus facilitating effective currency planning \n21 \n \nby economic actors. In this context the question becomes not if, but \nwhen will the CBN depreciate the naira – most likely by moving the \nmid-point of the band. \nBut the other side of this debate is question of whether, beyond the \ngap between the parallel and official markets, caused mainly by \nsupply-side factors owing to controls imposed by the CBN on the \nimportation of US dollars and restrictions on sales by banks to BDCs, \nthere has been any change in the economic fundamentals to support \na depreciation of the naira. In this context I note that the price of oil, \nthe most important factor, has remained strong. And the role of the \nnaira as an anchor of stability and its characteristic as a major pass-\nthrough channel of inflation, the need to manage expectations for the \nyear 2014 - a sensitive year in Nigeria’s political economy- and the \nunpredictability of the fallout of a naira depreciation, all argue for a \nresponse through monetary conditions and not the exchange rate at \nthis time. In the absence of a fundamental change of circumstance in \nthe fundamentals that support the value of the naira, a depreciation of \nthe currency is not called for at this time and devaluation should be a \nlast option. \nMonetary tightening through the CRR will help control liquidity and \ncontribute further to structural reform of bank lending to the real sector \ninstead of the pursuit of public sector deposits. It will also help conserve \ndeclining foreign reserves. Here, however, it is important to keep \nconcerns about financial stability in mind, as banks and bank borrowers \nhave long borne the brunt of fundamental structural problems in the \ndecision-making paradigm of the MPC. \nBased on the foregoing considerations, I vote to: \n Increase the CRR for public sector deposits from 50 per cent to 75 \nper cent, and the CRR for private sector deposits from 12 per cent \nto 15 per cent. \n Maintain the MPR and the minimum Liquidity ratio at their present \nlevels of 12 per cent (with the corridor at plus or minus 2 per cent) \nand 30 per cent respectively. \n22 \n \n Maintain the present band of the naira exchange rate and take \nadministrative measures to close the gap between the RDAS and \nBDC rates of exchange of the naira. \n \n5.0 ORONSAYE, STEPHEN OSAGIEDE \n \nStatistics from the National Bureau of Statistics (NBS) since the last \nMonetary Policy Committee (MPC) meeting in November 2013 \nprojected fourth quarter Gross Domestic Product (GDP) for 2013 to \ngrow by 7.67 per cent compared to 6.58 recorded in the \ncorresponding period of 2012. \n \nAlthough all measures of inflation remained within single digit, headline \ninflation appears to be on the rise. The Naira has continued to enjoy a \ngreat deal of stability because of the intervention of the CBN, however, \nthe Bank may not be able to sustain this for a long time unless certain \nstructural challenges are addressed \n \nThere is huge disparity between the official exchange rate of the Naira \nand the rate at Bureaux de Change (BDCs), which needs to be \naddressed to avoid the pass-through inflation. Therefore, we need to \ntake appropriate steps to check the wide gap in the exchange rates. \nWhile we must remain committed to a stable exchange rate, I do not \nsupport depreciation in the value of the Naira. For me, the \nfundamentals on ground do not support such a move: oil prices are still \nhigh and there are no threats presently. I believe that the cost of a \nweaker currency far outweighs the benefits to the economy. \n \nThe MPC noted that Broad money supply (M2) shrunk by 4.82 per cent \nin December 2013 compared to the growth of 16.39 witnessed during \nthe corresponding period of 2012. We also noted that the aggregate \ndomestic credit at the end of December 2013 was below the \nprovisional benchmark of 22.98 per cent for 2013. The decline in Broad \nmoney supply is attributable to a fall of 5.86 per cent in the country’s \nnet foreign assets. This calls for greater fiscal discipline and monetary \ntightening. \n23 \n \nThe bulk of public sector funds are still in Deposit Money Banks (DMBs) \nand I do not think there is any reason why all public sector funds should \nnot be back to the CBN. I am of the view that the CBN should have a \ndeliberate constructive engagement with the Federal Ministry of \nFinance in order to address areas of concern, if any. \nWe have consistently held MPR at 12% and achieved stability. Those \nconditions for maintaining the rate at that figure have still not changed. \nTherefore I support the view that we do not tamper with the rate at this \npoint in time. \nOn the Cash Reserve Requirement (CRR) on deposits from the Public \nSector, I think that the impact has been positive on the financial \nsystem. Consequently, I am persuaded to support an increase in the \nCRR on public sector deposits from 50% to 75%. \nVotes \nBased on the foregoing, I voted for the following: \na) \nHolding the MPR at 12%; \nb) \nRetaining the symmetric corridor of 200 basis point around the \nMPR; \nc) \nRetaining the Cash Reserve Requirement (CRR) at 12% for \ndeposits from the private sector; \nd) \nIncreasing the Cash Reserve Requirement (CRR) on deposits \nfrom the Public Sector from 50% to 75%; and \ne) \nMaintaining Liquidity Ratio at 30%. \n \nI also voted that the Central Bank of Nigeria urgently addresses the \nimbalance in the BDC segment while also stepping up its anti-money \nlaundering (AML) activities. \n \n6.0 SALAMI, ADEDOYIN \n \nHeadline inflation in December 2013 ended the year at 8 per cent, \nwhich, though marginally higher than the 7.9 per cent reported for the \nprevious month, took the average for the year to 8.5 per cent a \nposition much better than the 12.2 per cent average for 2012. \n24 \n \nNotwithstanding the continuous deterioration in Core inflation from its \nmid‐year low of 5.5 per cent to 7.9 per cent at year end, its average for \nthe year of 7.7 per cent also marks an improvement on the 13.9 per \ncent in the previous year. The satisfaction of that position is however \nslightly undermined by realization that Core inflation continued to edge \nhigher since July 2013. \n \nThe nature of challenges to confront monetary policy making in Nigeria \nthis year began to define themselves last year. It had already been \napparent before the close of 2013 that the key factors to take shape \nthe direction and nature would include – \n Pace of and reaction to the tapering of Quantitative Easing by \nthe Federal Open Markets Committee of the US Federal Reserve; \n Fiscal Dominance arising from dwindling revenues and its \nimplication for Reserves and currency management; \n The dynamics and impact of risks related to the electoral cycle. \nIt was already clear that 2014 would be a challenging year for making \nmonetary policy. Whilst the questions already suggested themselves, \nthe most pervasive being around currency rates and the implications \nfor policy credibility, there were few answers. The wall of data provided \nfor this meeting provided cold comfort. \n \nThe first conclusion from the data is a worsening outlook for inflation. Six-\nmonth forecasts provided by Bank Staff for the meeting in November \nsuggested would drop from 8.3per cent in December 2013 to 7.2 per \ncent in March 2014 before rising to 8.1 per cent the following month. \nBank Staff now expect Headline inflation to be 8.4 per cent in April 2014 \nand further increase to 9.2 per cent by June 2014. A similar trend is \nexpected for Core and Food inflation. Indeed, the rate of increase in \nfood prices is expected to cross into ‘double digits’ in May 2014. \n \nBeyond the worsening prospects for inflation, available data show a \ncontinuing deterioration in fiscal performance. A sharp increase in \nexpenditure, especially ahead of an election, is the typical fear on the \nfiscal side. Available data shows continuing revenue weakness. Data \nfrom the Office of the Accountant General of the Federation (OAGF), \nthe Central Bank of Nigeria (CBN) and the National Bureau of Statistics \n(NBS) show that between 2011 and 2013, average crude oil prices and \n25 \n \nproduction dropped by 1.02 per cent and 5 per cent respectively. In \nthe same period the average annual decline in revenue from Crude oil \ndropped almost 12 per cent. In consequence of this, our fiscal savings, \nrepresented by the Excess Crude Account, dropped from NGN1.551trn \nin Dec 2012 to NGN0.434trn in Dec 2013. A continuation of this trend \nalmost certainly implies higher levels of government borrowing putting \nworsening the challenge of ‘crowding out’ amongst others. \n \nFailure to rebuild fiscal buffers is also reflected in the FOREX Reserve \ndata. At US$43.8bn in mid‐Jan 2014, forex reserves are almost 10 per \ncent lower than the 2013 high of US$47.8bn in March. Furthermore, the \nFederation Reserves component, which represents Excess Crude \nsavings, amounted to US$42.48bn – down from US$11.46bn in \nDecember, 2012. The deterioration in Foreign Reserve position also \nreflects a slowdown in inflows from Foreign Portfolio investors (FPI). Whilst \nFPI inflows, at US$19.182bn in 2013, accounted for approximately 82 per \ncent of capital importation in 2013, there was a noticeable slowdown \nin the Q3‐2013. Indeed, both FPI and Foreign Direct Investment (FDI) \nslowed significantly. It is not unlikely that QE tapering by the US Federal \nReserve is a contributory factor in the slowdown of FPI flows. \n \nRecent pressure on the Naira at the Foreign Exchanges reflects a \ncombination of restricted supply to the Bureau de Change (BDC) \nsegment of the market and heightened expectations of currency \ndepreciation. From the perspective of economics theory, a persistent \nsurplus on our current account, resulting from high oil price, should see \nthe Naira strengthen. However, the failure to build reserves has resulted \nin strengthening expectation of that the Naira will lose value. This \nexpectation has been manifested in a continuing switch from Naira to \nforeign currency denominated deposits – a trend I had previously \ndescribed as ‘retail hedging’. \n \nUnless the Fiscal side shows significant improvement imminently, the \noptions for monetary policy may become glaringly inconsistent with the \nobjectives and policy direction for the economy in Nigeria. For \nmonetary policy, the challenge of managing the internal and external \nvalue of the Naira is a core element of its mandate. Achieving inflation \nrate of 6‐9 per cent in 2014 requires a stable currency. The model \n26 \n \narticulated, in various documents, for the growth and development of \nthe larger economy in Nigeria is predicated on Import substitution. \nSimilar to attainment of the mandate that the Central Bank of Nigeria \n(CBN) achieve price stability, import substitution requires a stable, even \nstrong currency!! \n \nGiven the data and information laid before my colleagues and I on this \noccasion – in particular, the immediate and emerging build‐up of \nbanking system liquidity, it is clear that there is a need to respond to the \npressure on the currency and forestall the build‐up of further pressure. \nThe measures which I have supported, further sterilizing government \ndeposits by raising the Cash Reserve Ratio to 75 per cent and easing \nthe constraint on supply to the BDC segment of the forex market, \nshould, in the short term, achieve the objectives set. However, it is \nincreasingly clear that we are approaching the limits for using the cost \nof credit as a management tool without inflicting damage on the \ngrowth and development aspirations of the economy. \n \n7.0 UCHE, U. CHIBUIKE \nIn previous MPC meetings, I have consistently argued that poor fiscal \nmanagement remains the major impediment to the promulgation of \neffective monetary policy in our country. In the past, such poor fiscal \nmanagement practices which include increasing levels of oil theft and \nexcessive and sometimes unnecessary borrowings have contributed \nmaterially to monetary tightening by MPC. While such tightening may \nhave helped achieve the desired single digit interest rate which has \nlasted for some time now, the fact remains that this has to a great \nextent been done at the cost of growing the real sector of the \neconomy. Government has for instance increasingly, directly and \nindirectly, crowded out the private sector in the market for loans and \nadvances. The primary goal of monetary stability, which is the \npromotion of real sector economic development, has therefore been \nsubordinated to funding government fiscal indiscipline. At the \nNovember 2013 MPC meeting, for instance, I explicitly asserted thus: \nThe danger fiscal policy poses to development of effective \nmonetary policies in Nigeria becomes stark when one considers the \n27 \n \nmechanism of cash management by government. For over one \ndecade, all parties are in agreement that a Treasury Single Account \n(TSA) will provide the most effective platform for managing \ngovernment funds. At the very least, the incessant practice of \nunnecessary borrowings at high interest rates while simultaneously \nholding huge balances in non interest yielding deposits will be \ngreatly curtailed. Despite this simple logic, government is yet to \nimplement the TSA. This has led to widespread allegations that \nprivate interests within government policy making circles are \ncolluding with banks and benefitting handsomely from the status \nquo through the receipt of deposit brokerages. \nIt was because of my above view that I voted for an increase in CRR \non public sector deposits at the said meeting. Although I was in the \nminority at the time, I still believe that this is the way to go. Available \nevidence from our decision to increase CRR on public sector deposits \nto 50 per cent in July 2013, for instance, show that this is one form of \nmonetary tightening that has led to increased lending to the real \nsector by banks. This is so because the incentive for banks to earn rent \nincome by simply colluding with government officials to privately place \ngovernment deposits in such banks has been reduced. Banks have \ntherefore been forced to focus more on their intermediation function \nwhich is what leads to economic development. \nAnother way of making the above point is to argue that increasing CRR \non public sector deposits will reduce the incentive for government \nofficials to make suboptimal decisions in the management of \ngovernment funds for personal interests. In other words, increasing CRR \non public sector deposits will have a direct impact on government \nfiscal management. An obvious consequence of the above will be the \nreduction in government debts. \nI am aware that some stakeholders are very critical of the use of CRR \nbecause of its blunt nature and direct impact on the cash-flow of \nbanks. It is however important to note that the use of CRR on public \nsector deposits is in itself an anomaly. If, for instance, a TSA is in place \nand all government deposits domiciled in the CBN which is the official \nbanker to Government, the issue of using CRR on such public sector \ndeposits will not arise in the first place. \n28 \n \nIt is also pleasing to note that the tightening of monetary policy through \nincreasing CRR on public sector funds at the present time is unlikely to \nattract further speculative foreign capital. This is especially so given the \nfact that available statistics suggests that recent international \ndevelopments have already ensured a slowdown in the inflow of such \nspeculative capital. Despite this, I find it prudent to continue to express \nmy concern about speculative capital. This is because the vulnerability \nof the value of our currency in recent times has at least in part been as \na consequence of the unstable nature of such speculative FDI. The \nearlier we begin to discourage such capital flows, the better. \nAdmittedly, this has to be gradually and skillfully done to prevent \nsudden capital flight. While FDI is desirable, it only makes sense when it \nis invested in the real sectors of our economy. \nAs already mentioned, increasing CRR on public sector deposits will \nmake banks to focus more on their intermediation function. An obvious \nconsequence of this will be enhanced competition amongst the banks \nwhich will at least in the medium term begin to reduce the \nunacceptable wide spread between deposit and lending rates in the \ncountry. \nAnother issue of concern for me is the widening gap between the \nr/wDAS exchange rate and the Bureau de Change exchange rate for \nthe Naira. This creates huge incentives for banks and regulators to \nexploit the system and earn arbitrage profits. This is even more troubling \nin an import dependent economy like ours where the BDC rate is \ngradually \nbecoming \nthe \nbenchmark \nfor \nprices \nof \nimported \ncommodities. This might explain why core inflation is gradually inching \nup. I therefore believe that the time has come for us to rethink our BDC \npolicies with the objective of reducing the gap between BDC and \nr/wDAS exchange rates. Surely there must be effective ways of \ncurtailing money laundering in our economy without materially \naffecting the supply of foreign exchange to Bureau de Changes. \nIn conclusion, I am convinced that the greatest threat to effective \nmonetary policy in the country is the way government conducts its \nfiscal \npolicy. \nGovernment \nfiscal \nmanagement \nproblems \nhave \nincreasingly made it difficult for monetary policy to be effective. \nThankfully, monetary policy is not altogether helpless. Using monetary \n29 \n \npolicy to force government to implement the TSA will, at least to some \nextent, help improve government fiscal policy management. Equally \nimportant is the fact that it will help to refocus banks on their \nintermediation function which is central to promoting economic \ndevelopment. \nIn the light of the above factors, I hereby vote as follows: (1) to retain \nMPR at 12 per cent with interest rate corridor of + 200/- 200 basis points; \n(2) to retain CRR at 12 per cent but increase CRR on government \ndeposits from 50 per cent to 75 per cent; and (3) to retain Liquidity \nRatio at 30 per cent. \n \n8.0 SANUSI LAMIDO SANUSI, GOVERNOR AND CHAIRMAN, MONETARY \nPOLICY COMMITTEE \n \nBarely a few weeks before this MPC meeting, one was looking forward \nto a very routine meeting at which we would review the economic \nenvironment and outlook, congratulate ourselves for a job well-done, \nand leave everything unchanged. The sense of calm is not entirely \nwithout basis. \n \nGDP growth has remained robust in spite of high interest rates. Inflation \nremained firmly in single-digit range for the entire year 2013, the first \ntime this has happened since 2007. The equity market is doing \nextremely well and is performing almost as well as it did before the \nfinancial crisis. AMCON has reduced its indebtedness by about \nN1trillion. As we predicted, there was no disruption to the market \ndespite the unfounded but understandable alarm raised by many \nanalysts. \n \nYet, complacency and self-congratulation are extremely dangerous \nand if unchecked could turn stability into the calmness before a storm. \nOur task is to always look out for red flags and anticipate the possible \nimpact on stability. \n \nThe most obvious red flag is the fiscal space. In January 2014, we are \nyet to have a budget approved, and there is no end in sight to high \n30 \n \nrecurrent spending. The Federation has squandered its Excess Crude \nSavings, from $11.5billion at the beginning of 2013 to under $2.5billion \ntoday. This, moreover, has happened in a period of high and stable oil \nprices and high levels of production and crude lifting, in spite of losses \ndue to oil theft and vandalism. Clearly, huge fiscal leakages continue \nto exist in the oil sector as will become manifest at the conclusion of on-\ngoing debates around NNPC remittances to the Federation Account. \nTo compound the problem, we saw in Q4:3 a significant collapse in \nportfolio and FDI flows as a result of QE tapering in the US, concerns \nover leadership transition at the Bank and alarm at the rate of \ndepletion of fiscal savings. As a result of the above, the Bank has had \nto increase funding of the forex market to avoid currency depreciation. \nBut this has also meant a return to the era of attrition of foreign \nexchange reserves. \n \nOn the monetary side, measures aimed at curbing money laundering \ndisrupted the equilibrium in the BDC market through curbs on supply, \nleading to the emergence and widening of a gap between exchange \nrates in the inter-bank and BDC segments. The weak naira at BDC has \nfed into costs and creeping inflation and threatens to reverse some of \nthe progress made in the recent past. The BDC rate is also not helped \nby ill-advised tariff regimes which force eligible demand onto the \nparallel market thus compounding the shortage in that segment. \n \nIt is therefore not entirely surprising that exchange rates, reserves and \nfiscal leakages formed the fulcrum for our discussions these past two \ndays. We have had to deal with a number of difficult questions: Do we \nneed a monetary response now, or do we wait until next MPC? If we \nchose to respond, should we allow the Naira to depreciate or reaffirm \nour commitment to keeping it stable within current range? If we opted \nfor the latter in the wake of declining foreign currency inflows and \nsavings, how could we best defend the Naira? Do we deplete our \nreserves and expose the economy to greater risk; or tighten money at \nthe risk of a big public and political outcry? These decisions are never \neasy. \n \n \n \n31 \n \nMy position is as follows: \nOn the exchange rate, I continue to maintain that stability must \ncontinue to be the lodestar of monetary policy and a weak naira will \nwipe out investor profits, lead to a bearish run on the stock exchange, \nstoke up inflation and ultimately result in even more extreme tightening \nwithout offering any tangible benefits. For me, letting the naira \ndepreciate is an absolute last resort after all attempts at stabilizing it \nhave failed, or where the cost of supporting the currency becomes \nunbearable. \n \nI also do not see any wisdom in depleting reserves to support the \ncurrency. In any case, this strategy fails once reserves fall to a level \nwhere investors believe we do not have the ammunition to support the \ncurrency. \n \nI have never believed we were at the end of our tightening cycle. \nPushing up interest rates may not be a priority given the already high \nyields in our market and given that only about 10% of portfolio flows are \nin fixed income instruments. But we need to continue attacking the \nstructural liquidity surfeit in the system. By tightening monetary \nconditions and increasing the supply of dollars to the BDC segment we \ncan stabilize the currency and achieve convergence. \n \nMy vote is \n \ni. \nTo increase CRR on Public Sector to 75% for now, with a view to \ngetting to 100% if need be later in the year; \nii. \nI also vote with the minority for increasing Private Sector CRR to \n15% as this reduces incentive for arbitrage and adds bite to the \ntightening measures; \niii. \nI support retention of MPR and LR at current levels; \niv. \nAdministrative measures should be taken to restore equilibrium to \nthe BDC segment. I vote accordingly.", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No  93 (with Personal Statements) of the Monetary Policy Committee Meeting of Monday 20 and Tuesday 21 January (2).pdf"}
{"doc_id": "5650565256ab27e72dda5ed8bda0f455", "text": "MENU\nB.1.1 Summary of Federal Government Finances\nB.1.2 Federal Government Recurrent Expenditure\nB.1.3 Federal Government Capital Expenditure\nB.1.4 Federal Government’s Domestic Debt Outstanding\nB.1.5 Holdings of Federal Government’s Domestic Debt\nOutstanding\nB.1.6 Nigeria's External Debt Outstanding\nB.2.1 Summary of State Governments' and Federal Capital\nTerritory Finances\nB.2.2 Domestic Debt of State Governments\nB.3.1 Summary of Local Governments' Finances\nB.3.2 Local Governments' Total Outstanding Debts\nReturn to\nMenu\nTable B.1.1:\nSummary of\nFederal\nGovernment\nFinances (N'\nBillion)\nItem\n1981\n1982\n1983\nTotal\nFederally\nCollected\nRevenue\n13.2905\n11.4337\n10.5087000\nOil Revenue\n8.5643999999999991\n7.8148999999999997\n7.25300000\nNon- Oil\nRevenue\n4.7261000000000006\n3.6188000000000002\n3.2557\nFederation\nAccount\n10.182799999999999\n9.8849\n9.79860000\nFed Govt\nRetained\nRevenue\n7.5116000000000005\n5.8191000000000006\n6.27200000\nTotal\nExpenditure\n11.4137\n11.923200000000001\n9.63649999\nRecurrent\nExpenditure1\n4.8467000000000002\n5.5060000000000002\n4.75079999\nCapital\nExpenditure2\n6.5670000000000002\n6.4172000000000002\n4.88569999\nCurrent\nSurplus(+)/\nDeficit(-)\n2.6649000000000003\n0.31310000000000004 1.52120000\n% of GDP\n2.8252312553218748\n0.30996554838398899 1.38210454\nOverall\nSurplus(+)/\nDeficit(-)\n-3.9021000000000003 -6.1041000000000007 -3.3645\n% of GDP\n-4.1368662544153576 -6.0429917083701916 -3.05685692\nNominal\nGDP\n94.325021889098139\n101.01122580633641\n110.064032\nFinancing:\n3.9021000000000003\n6.1041000000000007\n3.3645\nForeign (net) 0.46439999999999998 0.26350000000000001 1.1069\nDomestic\n(net)\n4.2008000000000001\n3.4020000000000001\n7.05700000\nBanking\nSystem (net)\nof which:\n3.0179999999999998\n3.9891999999999999\n5.29630000\nCBN\n3.6240999999999999\n2.9891999999999999\n3.27119999\nDeposit\nMoney Banks\n0\n0\n0\nNon Bank\nPublic\n1.1827999999999999\n0.4128\n1.76070000\nPrivatization\nProceed\n0\n0\n0\nOther\nFunds3\n-0.7631\n2.4386000000000001\n-4.79939999\nSources:\nFederal\nMinistry of\nFinance &\nCentral Bank\nof Nigeria\nNotes:\n1Includes\ninterest\npayments on\ndebt service,\nother\ntransfers and\nextra-\nbudgetary\nitems\n2Includes\ncapital\nrepayments\non debt\nservice,\nother\ntransfers and\nnet lending\n3Includes\nPublic,\nSpecial and\nTrust Funds,\nTreasury\nClearance\nFunds,\nexcess\nreserves, etc\nMinus (-)\ndenotes\nincrease;\nPlus (+)\ndenotes\ndecrease\n4Provisional\nReturn to Menu\nTable B.1.2:\nFederal\nGovernment\nRecurrent\nExpenditure (N'\nBillion)\nFunction\n1981\n1982\n1983\nAdministration 0.9149110502031832\n1.0393670419911953\n0.896\n1. General\nadministration\n0.9149110502031832\n1.0393670419911953\n0.896\n2. Defence\n-\n-\n-\n3. Internal\nSecurity\n-\n-\n-\n4. National\nAssembly\n-\n-\n-\nSocial and\nCommunity\nServices\n0.29474654306355119\n0.3348411220228017\n0.288\n5. Education\n0.16542735212777968\n0.1879305508522407\n0.162\n6. Health\n8.4457536121458399E-2 9.594635399029236E-2\n8.278\n7. Other social\nand community\nservices\n4.4861654814313125E-2 5.0964217180268653E-2 4.397\nEconomic\nServices\n0.17565115913195614\n0.19954510949317078\n0.172\n8. Agriculture\n1.3027660430071114E-2 1.4799822214696919E-2 1.276\n9. Construction 9.6664556524438408E-2 0.10981390393949655\n9.475\n10. Transport &\nCommunication\n3.2415281070098202E-2 3.6824754486962409E-2 3.177\n11. Other\neconomic\nservices\n3.3543661107348459E-2 3.81066288520149E-2\n3.287\nTransfers\n3.4613912476013091\n3.9322467264928322\n3.392\n12. Public debt\nservicing\n1.0274071205835871\n1.1671660317191557\n1.007\n13. Pensions\nand gratuities\n0.21039158694547916\n0.2390113020656959\n0.206\n14.\nContingencies/\nsubventions\n8.7193002878428721E-3 9.905392820860141E-3\n8.546\n15. Other/\nOther CFR\ncharges\n2.2148732397844002\n2.5161639998871204\n2.171\nTOTAL*\n4.8467000000000002\n5.5060000000000002\n4.750\nSources:\nFederal\nRepublic of\nNigeria Official\nGazettes and\nthe various\nstates' official\nGazettes\nNote:\n*Excludes\ninterest\npayments on\ndebt service,\nother transfers\nand extra-\nbudgetary\nitems\nReturn to\nMenu\nTable B.1.3:\nFederal\nGovernment\nCapital\nExpenditure\n/1 (N'\nBillion)\nAdmin-\n% of\nEconomic\nYear\nistration\nTotal\nServices\n1981\n0.72010000000000007 10.96543322673976\n3.6294\n1982\n0.38539999999999996 6.0057345882939597 2.5425\n1983\n1.0982000000000001\n22.477843502466381 2.2906999999\n1984\n0.26269999999999999 6.4071608009560732 0.6562999999\n1985\n0.45960000000000001 8.4103427452559156 0.8927000000\n1986\n0.26480000000000004 3.105502650466764\n1.0999000000\n1987\n1.8162\n28.500588466065125 2.1597\n1988\n1.8985999999999998\n22.764715051378285 2.1286999999\n1989\n2.6175000000000002\n17.410420311159296 3.9263000000\n1990\n2.9199000000000002\n12.141663132157381 3.4857\n1991\n3.3450000000000002\n11.8027303296649\n3.145\n1992\n5.1185\n12.872422560501768 2.3367\n1993\n8.0816999999999997\n14.82831759685001\n18.3447\n1994\n8.7850999999999999\n12.387634785379795 27.102799999\n1995\n13.3378\n11.010390603137074 43.1492\n1996\n14.8636\n6.9806313264260913 117.82910000\n1997\n49.548999999999999\n18.375185470738735 169.6131\n1998\n35.270400000000002\n11.413792701727681 200.86189999\n1999\n42.737199999999994\n8.5812914786248786 323.58080000\n2000\n53.279499999999999\n22.250699412697966 111.5086\n2001\n49.254899999999999\n11.227557092431784 259.75779999\n2002\n73.577399999999997\n22.894341587058982 215.33339999\n2003\n87.9589\n36.393528358633823 97.982100000\n2004\n137.76585\n39.221594306049816 167.7218\n2005\n171.57413523020003\n33.028689862783224 265.03467288\n2006\n185.22425081580002\n33.53168217137371\n262.20729257\n2007\n226.97440434701599\n29.893325505454392 358.37564660\n2008\n287.10358507800368\n29.878920084409621 504.28687361\n2009\n291.66000000000003\n25.300215606136906 506.01\n2010\n260.2\n29.438568484552952 412.2\n2011\n231.8\n25.235455619183693 386.4\n2012\n190.5\n21.778895621355893 320.90000000\n2013\n283.649369734\n25.59119899038464\n505.76500111\n2014\n229.63218863011147\n29.322756237011099 393.44500000\n2015\n226.80583965419453\n27.714933147041769 348.74691777\n2016 2\n150.35353120491953\n23.685639630881962 261.27757797\nSources:\nFederal\nMinistry of\nFinance,\nOffice of the\nAccountant-\nGeneral of\nthe\nFederation\nNote: /1\nRevised\n2Provisional\nReturn to\nMenu\nTable B.1.4:\nFederal\nGovernment's\nDomestic\nDebt\nOutstanding\n(N' Billion)\nYear\nTreasury\nFGN\nTreasury\nBills\nBonds1\nCertificates\n1981\n5.782\n0\n2.0575999999\n1982\n9.782\n0\n1.6685999999\n1983\n13.476000000000001 0\n4.8943999999\n1984\n15.476000000000001 0\n6.4131\n1985\n16.975999999999999 0\n6.6541000000\n1986\n16.975999999999999 0\n6.6547000000\n1987\n25.225999999999999 0\n6.6541000000\n1988\n35.475999999999999 0\n6.7946\n1989\n24.126000000000001 0\n6.9446000000\n1990\n25.475999999999999 0\n34.214599999\n1991\n57.763100000000001 0\n34.214599999\n1992\n119.75280000000001 0\n35.241399999\n1993\n116.38069999999999 0\n36.584300000\n1994\n170.92589999999998 0\n37.342699999\n1995\n276.90520000000004 0\n23.596299999\n1996\n179.62799999999999 0\n0\n1997\n364.52350000000001 0\n0\n1998\n378.5301\n0\n0\n1999\n361.75840000000005 0\n0\n2000\n465.53570000000002 0\n0\n2001\n584.53579999999999 0\n0\n2002\n733.76250000000005 0\n0\n2003\n825.05449999999996 72.56\n0\n2004\n871.577\n72.56\n0\n2005\n854.82839999999999 250.83\n0\n2006\n695\n643.94090000000006 0\n2007\n574.92942999999991 1186.1600000000001 0\n2008\n471.92942800000003 1445.5995819999998 0\n2009\n797.48244599999998 1974.9265700000001 0\n2010\n1277.101559\n2901.6003289999999 0\n2011\n1727.914364\n3541.1988480000005 0\n2012\n2122.9269570000001 4080.0488479999999 0\n2013\n2581.550643\n4222.0377099999996 0\n2014\n2815.5237529999999 4792.2812210000002 0\n2015\n2772.8670379999999 5808.140821\n0\n2016\n3277.2788310000001 7564.9374655920001 0\nSource:\nCentral Bank\nof Nigeria\nand Debt\nManagement\nOffice\nNotes:\n1Issuance of\nFGN Bonds\ncommenced\nin 2003.\nReturn to\nMenu\nTable B1.5:\nHoldings of\nFederal\nGovernment's\nDomestic\nDebt\nOutstanding\n(N' Billion)\nYear\nCBN\nCommercial Banks\nMerchant Bank\n1981\n4.5236000000000001 1.7739\n6.9400000000\n1982\n6.4888999999999992 2.8186\n0.1746999999\n1983\n10.402200000000001 5.1403999999999996 0.3855000000\n1984\n9.5317000000000007 8.7261000000000006 0.8940000000\n1985\n9.9055\n10.254899999999999 1.1339000000\n1986\n16.103300000000001 4.4219999999999997 0.1482\n1987\n17.646900000000002 7.5727000000000002 0.2853999999\n1988\n26.635999999999999 7.3096000000000005 0.1678999999\n1989\n15.6477\n3.6139999999999999 8.4599999999\n1990\n27.380800000000001 8.702399999999999\n0.3621000000\n1991\n62.2943\n6.8135000000000003 0.6730000000\n1992\n138.7696\n5.5351000000000008 0.6932999999\n1993\n202.43470000000002 29.535400000000003 9.3439999999\n1994\n308.44081349960999 38.9011\n8.3710000000\n1995\n414.28593392920999 20.5398\n1.7558\n1996\n312.80426257656995 47.243300000000005 8.8218999999\n1997\n403.30154926672003 39.402200000000001 5.6978999999\n1998\n454.91050820316997 48.795300000000005 8.8797000000\n1999\n530.42082642499997 188.16550000000001 13.325299999\n2000\n498.92\n344.89\n0\n2001\n569.51\n386.45\n0\n2002\n519.77080000000001 460.22949999999997 0\n2003\n613.79\n500.43\n0\n2004\n403.46170000000001 669.0702\n0\n2005\n408.42093999999997 726.22663999999997 0\n2006\n335.53469999999999 882.85094000000004 0\n2007\n293.5838\n1410.04251\n0\n2008\n289.37\n1482.16\n0\n2009\n323.18\n1274.58\n0\n2010\n343.14\n2605.0100000000002 0\n2011\n348.84\n3790.9\n0\n2012\n398.26827514500002 3580.42\n0\n2013 1\n468.86\n3293.83\n0\n2014 1\n180.21\n3982.72\n0\n2015 1\n877.3\n3067.816581\n216.19341900\n2016 2\n1688.2\n3521.0183050000001 215.00169499\nSource:\nCentral Bank\nof Nigeria\nand Debt\nManagement\nOffice\nNote: 1\nRevised\n2 Provisional\nReturn to\nMenu\nTable B.1.6:\nNigeria's\nExternal\nDebt\nOutstanding\n(N' Billion)\nYears\nMultilateral\nParis Club\nLondon\nClub\n1981\n0.17959999999999998 1.9759\n0\n1982\n0.53039999999999998 5.4743999999999993 1.9817\n1983\n0.56640000000000001 6.0022000000000002 2.7588000000\n1984\n1.2712000000000001\n6.3603999999999994 5.4436999999\n1985\n1.2935000000000001\n7.7263999999999999 6.1642999999\n1986\n4.6707000000000001\n21.725300000000001 8.4447000000\n1987\n8.7814999999999994\n63.205599999999997 6.7664999999\n1988\n9.9917999999999996\n75.445300000000003 14.9861\n1989\n21.473599999999998\n121.2296\n42.84\n1990\n34.606300000000005\n154.5506\n53.431800000\n1991\n39.458300000000001\n173.05120000000002 58.238099999\n1992\n89.274299999999997\n324.72990000000004 41.890599999\n1993\n81.456299999999999\n400.3809\n45.323800000\n1994\n97.056600000000003\n404.21259999999995 45.367899999\n1995\n97.042000000000002\n476.7312\n44.99\n1996\n102.63\n420.00200000000001 44.945999999\n1997\n96.198999999999998\n417.56880000000001 44.945999999\n1998\n93.213999999999999\n458.25779999999997 44.945999999\n1999\n361.19490000000002\n1885.6648\n187.62710000\n2000\n379.04300000000001\n2320.2689999999998 223.83260000\n2001\n313.50470000000001\n2475.5093999999999 228.95020000\n2002\n375.70009999999996\n3220.8235\n182.96449999\n2003\n413.8777\n3737.2799\n196.15690000\n2004\n384.24869999999999\n4196.8445999999994 196.15549999\n2005\n330.65440000000001\n2028.5801000000001 189.76839999\n2006\n332.2192\n0\n0\n2007\n374.30347389999997\n0\n0\n2008\n464.55784560000006\n0\n0\n2009\n524.20460580000008\n0\n0\n2010\n635.44772160000002\n0\n0\n2011\n723.12296839999999\n0\n0\n2012 1\n828.72161529999994\n0\n0\n2013 1\n986.83795199999986\n0\n0\n2014\n1142.2924800000001\n0\n0\n2015 1\n1489.4064633\n0\n0\n2016 2\n2436.4070999999999\n0\n0\nSources:\nCentral\nBank of\nNigeria and\nDebt\nManagement\nOffice\nNote: 1\nRevised\n2\nProvisional\nReturn to\nMenu\nTable B.2.1:\nSummary of\nState\nGovernments'\nand Federal\nCapital\nTerritory\nFinances (N'\nBillion)\n1981\n1982\n1983\nTotal\nRevenue\n4.8748000000000005\n4.5614999999999997\n4.329399\n(i)\nFederation\nAccount1\n3.8256000000000001\n3.2456999999999998\n2.958499\n(ii) Value\nAdded Tax\n-\n-\n-\n(iii) Internal\nRevenue\n0.1426\n7.4900000000000008E-2 3.799999\n(iv) Grants\n0.90660000000000007 1.2409000000000001\n1.332900\n(v)\nStabilization\nFunds\nReceipts\n-\n-\n-\n(vi) Others\n0\n0\n0\nRecurrent\nExpenditure\n4.6109999999999998\n4.7338999999999993\n5.262100\nCurrent\nSurplus (+)/\nDeficit (-)\n0.26380000000000003 -0.1724\n-0.932700\nCapital\nExpenditure\n6.3798999999999992\n5.9466000000000001\n5.828800\nExtra-\nbudgetary\nExpenditure6\n0\n0\n0\nTotal\nExpenditure\n10.9909\n10.6805\n11.0909\nOverall\nSurplus (+)/\nDeficit (-)\n-6.1160999999999994 -6.1189999999999998\n-6.761499\nFinancing\n6.1161000000000003\n6.1189999999999998\n6.761499\n(a) Internal\nLoans2\n0.55889999999999995 0.54679999999999995\n-0.736999\n(b) External\nLoans\n1.1674\n1.3311999999999999\n1.6528\n(c) Opening\nCash Balance\n-\n-\n-\n(d) Other\nFunds3\n4.3898000000000001\n4.2409999999999997\n5.845699\nSources:\nCentral Bank\nof Nigeria/\nOffices of the\nAccountant\nGeneral of\nthe States\nand Federal\nCapital\nTerritory\n(FCT)\nNote: F.C.T.\nfinances are\nincluded as\nfrom 1990\n1Statutory\nAllocations\n(Gross)\n2Internal\nLoans\ninclude\nCapital\nReceipts for\n1986-1989\n3Positive\n(+) sign\nconnotes\ndecrease\nwhile\nnegative (-)\nsign connotes\nincrease in\nOther Funds\n4Revised\n5Provisional\n6 Includes\ncontribution\nto external\ndebt fund\nand other\ndeductions at\nsource\n\"-\" Indicates\n\"Not\nAvailable\"\nReturn to\nMenu\nTable B.2.2:\nDomestic\nDebt of State\nGovernments\n(N' Million)\nState\n2011\n2012\n2013\nAbia\n24202.240000000002 8663.7857495400003 31736.723709\nAdamawa\n25954.2\n24284.06029361\n15976.516325\nAkwa-\nIbom**\n41253.910000000003 108889.39260956\n125037.03760\nAnambra\n6403.32\n14299.992428040001 3025.7970466\nBauchi\n18345.73\n18807.271224209999 16825.508391\nBayelsa\n162822.65\n222401.77013028\n69513.133900\nBenue\n16631.14\n24402.439512360001 24987.874907\nBorno\n1684.56\n24423.19727964\n23943.15\nCross-River\n90750.05\n90872.909453460001 116061.63484\nDelta\n90843.57\n83684.012083549998 102100.20124\nEbonyi\n40239.94\n28895.754999500001 13236.092949\nEdo\n39044.300000000003 62274.74267793\n48190.150127\nEkiti\n23667.51\n39587.701580360001 22376.368393\nEnugu\n10887.17\n17354.185792709999 12061.395495\nGombe\n7170.42\n30243.536993379999 27992.839304\nImo\n25419.4\n16700.726473350001 12633.534789\nJigawa*\n1590.54\n2081.4256239400002 1612.2868072\nKaduna\n34771.71\n22855.929138\n9831.8448751\nKano\n5867.29\n5867.2905419999997 32207.008565\nKatsina*\n2059.88\n918.92588676000003 269.653436\nKebbi\n7291.05\n2716.0072\n853.67819199\nKogi\n34122.120000000003 14979.189827\n7109.8738907\nKwara\n25254.47\n29776.55897849\n22416.654388\nLagos\n157536.16\n230432.88048176002 278867.06655\nNassarawa\n5336.06\n7096.1404742599998 28848.544842\nNiger\n16975.509999999998 17802.495694000001 24731.746161\nOgun***\n30143.97\n45726.563647169998 58381.996066\nOndo\n48369.86\n36518.092218010002 30883.178135\nOsun\n5463.64\n38600\n41400\nOyo\n4808.3900000000003 11726.21452172\n19106.047344\nPlateau\n20908.12\n24117.321248880002 52416.334018\nRivers**\n83978.39\n81459.189147149998 129549.64645\nSokoto\n4902.05\n2997.3095195199999 5739.5700553\nTaraba\n17974.66\n16701.017997040002 13883.978775\nYobe\n2088.4\n3991.2171091499999 1122.6351016\nZamfara\n12968.38\n15508.107216320001 28217.646668\nFCT\n85563.89\n123992.77048351\n84324.102643\nTOTAL\n1233294.6499999999 1551650.1262361603 1537471.4520\nNote: *Year\n2016 debt\nfigure is as\nat March\n2016.\n**Year 2016\ndebt figure is\nas at June\n2016.\n***Year\n2016 debt\nfigure is as\nat December\n2015.\nSource: Debt\nManagement\nOffice\n(DMO)\nReturn to\nMenu\nTable B.3.1:\nSummary of\nLocal\nGovernments'\nFinances (N'\nBillion)\n1993\n1994\n1995\nCURRENT\nREVENUE\n19.874500000000001\n19.223100000000002\n24.412\n(i) Federation\nAccount\n18.316400000000002\n17.321300000000001\n17.875\n(ii) State\nAllocation\n0.25309999999999999\n0.46639999999999998\n0.6253\n(iii) Value\nAdded Tax\n0\n0\n3.5581\n(iv) Internally\nGenerated\nRevenue\n1.0355999999999999\n1.2059000000000002\n2.1108\n(v) Grants &\nOthers3\n0.26939999999999997\n0.22950000000000001\n0.2429\nRECURRENT\nEXPENDITURE\n13.9665\n14.8842\n16.317\nCurrent\nSurplus(+)/\nDeficit(-)\n5.9080000000000004\n4.3389000000000015\n8.0954\nCAPITAL\nEXPENDITURE\n5.5087999999999999\n4.0829000000000004\n6.1261\nTOTAL\nEXPENDITURE\n19.475300000000001\n18.967100000000002\n22.443\nOverall\nSurplus(+)/\nDeficit(-)\n0.39920000000000072\n0.25600000000000001\n1.9693\nFINANCING\n-0.39920000000000072\n-0.25600000000000001\n-1.969\n(a) Loans\n3.9899999999999998E-2 7.1499999999999994E-2 5.0500\n(b) Opening\nCash Balance\n-\n-\n-\n(c) Other\nFunds4\n-0.43910000000000071\n-0.32749999999999635\n-2.019\nSource:\nCentral Bank\nof Nigeria\nNotes: Local\nGovernment\nSurvey\ncommenced in\n1993\n1Revised\n2Provisional\n4Include\nNNPC refund\n& additional\nfund\n4Positive (+)\nsign connotes\ndecrease while\nnegative (-)\nsign connotes\nincrease in\n'Other Funds'.\nReturn to\nMenu\nTable B3.2\nLocal\nGovernments'\nTotal\nOutstanding\nDebts1\n(Naira\nMillion)\nState\nNo\nof\nLGs\n2007\n2008\n2009\nAbia\n17\n152.12988054000002 55.761371349685717\n2718.42\nAdamawa\n21\n1571.624\n64.406475125364381\n1567.95\nAkwa Ibom\n31\n24.2\n12.399019283784234\n303.443\nAnambra\n21\n1441.2855709999999 21.69143608241837\n410.7\nBauchi\n20\n1348.3146954900001 78.164179697969942\n1567.66\nBayelsa\n8\n149.91\n3.2964573016185619\n103.21\nBenue\n23\n1044.8215867599999 28.811426437935424\n1113.32\nBorno\n27\n833.94215296000004 3.9857287604217921\n9053.55\nCross River\n18\n638.30155790999981 35.049974937046393\n608.340\nDelta\n25\n1557.7242385100001 80.836144407208195\n2987.52\nEbonyi\n13\n22.644250849999999 9.7373942876690602\n707.936\nEdo\n18\n292.40859136\n50.450176421426249\n1352.23\nEkiti\n16\n492.95098999999999 1665.6193359326885\n16580.5\nEnugu\n17\n598.45716000000004 24.996056081544516\n1240.21\nGombe\n11\n90.277350589999983 15.897517909805906\n1100.20\nImo\n27\n281.33130299999999 30.423237177467414\n1111.14\nJigawa\n27\n436.99662503000002 4.9834370705266666\n458.043\nKaduna\n23\n245.5411\n43.889536318227258\n880.839\nKano\n44\n2380.7992953600001 95.759560120738101\n1920.56\nKatsina\n34\n27.614417920000001 10.446980387684397\n163.061\nKebbi\n21\n235.24918199999999 30.035941241398703\n3483.12\nKogi\n21\n819.02559697000004 19.270311182367237\n2210.40\nKwara\n16\n1193.5745735800001 16.403036467884942\n839.451\nLagos\n20\n257.09657098000002 16.568802782770746\n1380.33\nNassarawa\n13\n819.59485672000005 9.7348839342366649\n942.549\nNiger\n25\n377.57595952000003 7.2004184252301364\n304.445\nOgun\n20\n0\n15.178834452753295\n496.789\nOndo\n18\n427.20129125\n23.13687222690633\n460.654\nOsun\n30\n75.710261220000007 0.97785831807278956 405.601\nOyo\n33\n557.65612999999996 198.75249442217597\n217.646\nPlateau\n17\n1026.3882009199999 24.401018568936994\n2549.25\nRivers\n23\n1303.8779906500001 4.7821875225900952\n542.878\nSokoto\n23\n277.92635999999999 33.520653316295565\n886.908\nTaraba\n16\n3196.44695\n59.338386033132878\n1330.57\nYobe\n17\n42.802019999999999 56.266327897133394\n71.7510\nZamfara\n14\n581.73396681999998 14.597687894868024\n232.172\nFct\n6\n540.64189075000002 39.354542969716711\n1442.47\nTotal\n774 25363.77656866\n2906.1257027477009\n63745.9\nSource:\nCentral Bank\nof Nigeria\nAnnual\nSurvey\nNote:\n1Provisional", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Annual_Reports/2016 Statistical Bulletin Public Finance Statistics.pdf"}
{"doc_id": "277e96862e50a500d1022751be4f777b", "text": "1\nCBN Half Year Economic Report for 2007\nCENTRAL BANK OF NIGERIA\nREPORT FOR THE FIRST HALF OF 2007\nTable 1: Monetary Policy Targets (Growth in % except otherwise stated)\n \n*Targets for half year\n \n1.0\nINTRODUCTION\nMonetary targeting remained the main strategy for monetary policy implementation in the first half of \n2007. The CBN adopted various policy measures aimed at containing the growth of monetary aggregates in \norder to achieve monetary and price stability, including reserve money target under the Policy Support \nInstrument (PSI). Open Market Operations (OMO) remained the major tool of liquidity management. Other \npolicy measures included increased issuance of treasury securities in the primary market to mop-up excess \nliquidity; use of deposit and lending facilities to encourage inter-bank transactions as well as sales of foreign \nexchange, including swaps. \n \n \nKey Policy \nTarget \n2003 \n2004 \n2005 \n2006 \n2007 \n(i) \nBroad Money \nGrowth (M2) \n15.00 \n15.00 \n15.04 \n15-17 \n10.00 \n(ii) \nNarrow Money \n(M1) \n13.80 \n10.80 \n11.38 \n13.30 \n \n(iii) \nBase Money \n(under PSI) \n- \n- \n- \nN800 \nbillion* \nN860 \nbillion* \n(iv) \nAggregate credit \nto the domestic \neconomy \n25.70 \n24.50 \n22.54 \n22.50 \n-29.96 \n(v) \nCredit to \nGovernment \n150.30 \n29.90 \n14.01 \n-57.2 \n-54.94 \n(vi) \nCredit to the \nprivate sector \n32.30 \n30.00 \n25.24 \n30.00 \n30.00 \n(vii) \nInflation rate \n9.00 \n10.00 \n10.00 \n9.00 \n9.00 \n(viii) \nGDP \n5.00 \n5.00 \n6.00 \n7-10 \n10.00 \n \n2.0 \nOPERATIONS OF THE CENTRAL BANK OF NIGERIA\n2.1 \nLiquidity Management\nLiquidity management efforts of the Central Bank of Nigeria (CBN) yielded the expected results as the \nreserve money target for the first half of the year was met. Analysis of OMO transactions showed that total bids \nand sales of intervention securities amounted to N411.80 billion and N1,051.00 billion, respectively, compared \nwith N1,207.00 billion and N895.60 billion in the corresponding period of 2006. Nigerian Treasury Bills \n(NTBs) of various tenors (91-, 182- and 364-days) amounting to N765.50 billion were issued during the period. \nWith the introduction of the new Monetary Policy Rate (MPR) and the adoption of the CBN standing \nfacilities, the volatility in the inter-bank rates was contained with rates hovering within the standing facility's \ninterest rate corridor. The sums of N101.54 billion and N145.68 billion Cash Reserve Requirement (CRR) \ninvested on behalf of the banks following the reduction in required reserves from 5.0 to 3.0 per cent in December \n2006 were released at maturity on March 29 and April 13, 2007, respectively. \n2\nCBN Half Year Economic Report for 2007\n2.2\nPayments and Clearing System\nThe reform in the payments system was sustained. The effectiveness of Cheque Clearing and \nSettlement arrangement was further enhanced with the full implementation of the cheque standardization \npolicy as well as the approval of Oceanic Bank as a settlement bank, bringing the number of settlement banks to \neleven. Also, arrangements were concluded towards the reduction in the up-country cheque clearing cycle form \n5 3 days, while electronic bulk payments of salaries of 7 Ministries, Departments and Agencies (MDAs) of the \nFederal Government commenced. The CBN also finalised actions to commence the payment of staff and \npensioners emoluments through electronic bulk payment system. The National Payments System Vision 2020 \nwas presented to stakeholders at a National Payments System Stakeholders' Forum in order to harvest ideas to \nimprove the strategy. The development would further aid the implementation of the initiatives outlined in the \nPayments System Vision 2020. The new CBN Act empowers the Central Bank of Nigeria to regulate electronic \npayments and settlement. As part of the effort to transform Nigeria into an international financial the Financial \nSystem Strategy (FSS-2020) which was initiated by the CBN in 2006 was given further impetus during the \nperiod. An international conference was held from June 18 to 20, 2007 with the objective of sensitizing \nstakeholders and harvesting of ideas that would facilitate the realization of the strategy. \nThe aggregate volume and value of cheques cleared increased by 5.58 and 33.26 per cent, respectively. \nA total of 7.12 million instruments worth N10,128.87 billion were cleared, compared with 6.74 million worth \nN7,601.12 billion in the corresponding period of 2006. The development indicated the increasing use of cheque \nfor large value transactions in the country.\n2.2.1\nRetail Payments System\n2.2.1.1 Cheque\n3\nCBN Half Year Economic Report for 2007\n \n-\n200,000.00\n400,000.00\n600,000.00\n800,000.00\n1,000,000.00\n1,200,000.00\n1,400,000.00\nVolume\nFig. 2 \nVolume of Cheques Cleared (First Half 2007)\n2006 1,151,813.00 \n 1,196,266.00 \n 1,097,038.0 989,264.00 1,171,396.00 \n 1,138,300.00 \n2007 1,244,819.00 \n 1,327,881.00 \n 1,237,956.0 1,005,623.0 1,152,709.00 \n 1,051,547.00 \nJanuary\nFebruary\nMarch\nApril\nMay\nJune\n \n-\n200,000.00\n400,000.00\n600,000.00\n800,000.00\n1,000,000.00\n1,200,000.00\n1,400,000.00\n1,600,000.00\n1,800,000.00\n2,000,000.00\nNaira Million\nFig. 3\nValue of Cheques Cleared (First Half 2007)\n2006 1,110,681.0 1,258,225.0 1,294,447.0 1,210,702.0 1,421,775.0 1,305,287.0\n2007 1,441,810.0 1,651,724.0 1,849,271.0 1,596,257.0 1,820,297.0 1,607,595.0\nJanuary\nFebruary\nMarch\nApril\nMay\nJune\nIn terms of the volume of the cheques cleared, the Lagos Clearing Zone maintained its lead with 54.87 per cent, \nfollowed by Abuja, Port Harcourt and Benin with 9.98, 6.09 and 4.56 per cent, respectively.\nThe increase in the use of electronic payments continued during the period was attributed to the \naggressive marketing strategy of the banks and increased public awareness. Available data on various e-\npayment channels indicated that Automated Teller Machine (ATM) was the most patronized, accounting for \nover 93 per cent of the total, while mobile phone payments was the least with about 0.20 per cent.\n2.2.1.1 Electronic Payments\n4\nCBN Half Year Economic Report for 2007\nTable 2 \nChannel of Transaction \nPer cent \nVolume Terms \nATM \n93.66 \n \nWeb (Internet) \n 4.36 \n \nPOS \n 1.79 \n \nMobile \n 0.19 \nValue Terms \nATM \n94.51 \n \nWeb (Internet) \n 3.31 \n \nPOS \n 2.17 \n \nMobile Phone\n \n 0.02 \n \nATM's patronage was fuelled by the dominance of cash in settling transactions within the country.\nThe upward trend in ATM transactions was sustained. At 4,765,467 and N41.28 billion as at end -June \n2007, the volume and value of ATM transactions increased by 32.08 and 118.32 per cent, respectively, over the \nfigures in the corresponding period of 2006. The increased usage of ATMs could be attributed to a number of \nfactors, including increased number of ATMs in the country, enhanced public awareness and the ease of service \ndelivery.\n2.2.1.1.1 ATM Transactions\n5\nCBN Half Year Economic Report for 2007\n \n18.91\n41.28\n0\n5\n10\n15\n20\n25\n30\n35\n40\n45\nN'billion\n2006\n2007\nFig. 5 \nValue of ATM transactions (Jan - June) 2006-2007\n2.2.1.1.1\nWeb Transactions\n2.2.1.1.2\nPoint of Sale (POS) Transactions\nTransactions involving the use of Internet increased significantly. In terms of volume and value, the use \nof Internet for payment for goods and services increased by 119.8 and 50.9 per cent to 221,537 and N1.55 \nbillion, respectively. The development was attributable to the growing number of merchants that accept the use \nof payment cards on such sites and the issuance of international prepaid cards by some banks.\nThe volume and value of online POS transactions increased significantly from 19,769 and N90.19 \nmillion to 91,211 and N946.22 million, respectively. The development was attributable to the increasing \nconnectivity of POS terminals via General Packet Radio Service (GPRS) and the widespread use of debit \ncards.\n \n6\nCBN Half Year Economic Report for 2007\n \n90.19\n946.22\n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1000\nN'billion\n2006\n2007\nFig. 7\n Value of POS transactions (Jan - June) 2006-2007\n7\nCBN Half Year Economic Report for 2007\n \n-\n2,000.00\n4,000.00\n6,000.00\n8,000.00\n10,000.00\n12,000.00\nVolume\nFig. 8\nVolume of Large Value Transfers (First Half 2007)\n2006 8,186.00 \n 7,720.00 \n 6,504.00 \n 6,637.00 \n 7,856.00 \n 7,955.00 \n2007 6,235.00 \n 8,290.00 10,391.00 9,905.00 11,801.00 11,150.00 \nJanuary\nFebruary\nMarch\nApril\nMay\nJune\n2.2.1.1.1\nDollar Denominated Card Transactions\n2.2.2\nWholesale Payments System\nThe use of Dollar denominated Cards grew significantly during the review period. The volume and \nvalue of transactions increased by 73.94 and 70.51 per cent to 88,891 and US$22.46 million, respectively, over \nthe levels in the corresponding period of 2006. The development was due to the growing public awareness of the \nscheme and the ease of transactions.\nThe volume and value of transactions through inter-bank transfers rose by 28.79 and 96.14 per cent to \n57,772 and N27,372.29 billion, respectively. The rise was buoyed by the Real Time Gross Settlement (RTGS) \nsystem. The guidelines for the intra-day facility as well as additional modules were introduced during the period \nto ensure the efficiency of the RTGS system\n8\nCBN Half Year Economic Report for 2007\n0\n1000\n2000\n3000\n4000\n5000\n6000\nNaira billion\nFig. 9\nValue of Inter-bank Transfers (First Half 2007)\n2006\n1939.35\n2347.91\n2338.32\n2181.55\n2566.71\n2581.9\n2007\n2743.76\n4437.75\n4857.87\n4854.4\n5205.29\n5276.22\nJanuary\nFebruary\nMarch\nApril\nMay\nJune\nS/N \nFAILED BANK\n \nASSUMED BY\n \n1 \nAllstates Trust Bank\n \nEcobank Plc\n \n2 \nAssurance Bank\n \nAfribank Plc\n \n3 \nLead Bank\n \nAfribank Plc\n \n4\n \nTrade Bank\n \nUBA Plc\n \n5\n \nMetropolitan Bank\n \nUBA Plc\n \n6\n \nCity Express Bank\n \nUBA Plc\n \n7\n \nHallmark Bank\n \nEcobank Plc\n \n2.3 \nFinancial Sector Surveillance\n2.3.1 \nBanking Supervision\n The CBN intensified its supervisory and surveillance activities on the financial institutions through \nregular appraisal and review of banks' periodic returns, spot checks, monitoring and special investigations, \namong others. Post-consolidation on-site verification of the deposit money banks' integration processes, as \ncontained in their strategic business plans were also conducted. The exercise revealed that eighteen (18) banks, \nexcluding the six (6) banks that were not involved in mergers and acquisitions during the consolidation exercise \nhad attained 80 per cent compliance level as at end-June 2007. \nIn line with the decision of the CBN that no private sector deposits in the fourteen banks that failed to \nmeet the recapitalization requirement would be lost, the NDIC invited the healthy banks to assume the private \nsector liabilities of ten (10) banks for which final court order for their liquidation had been obtained and to \ncherry-pick their assets under the Purchase and Assumption (P&A) model of bank liquidation. Thus far, the \nprivate sector liabilities of seven banks had been assumed by three healthy banks as indicated below: \n9\nCBN Half Year Economic Report for 2007\nOf the four (4) outstanding banks that could not recapitalize, the NDIC had obtained provisional court \norder to liquidate one (1), while the remaining three (3) banks are still undergoing court processes.\nThe implementation of the electronic Financial Analysis and Surveillance System (e-FASS) was \nfurther boosted with the deployment of the Data Security System (DSS) in all the banks. With this development, \nall the banks now render returns in absolute figures through the e-FASS. All the bureaux-de-change (BDCs) \nhave effectively connected to the DSS and were expected to commence the rendition of their returns through the \nsystem, while the finance companies, primary mortgage institutions (PMIs) and the development finance \ninstitutions (DFIs) would be similarly connected within the year.\nAs part of the efforts to promote safe and sound financial system, the CBN issued a number of circulars \nto the banks which included:\nWaiver of tax on interest earnings from agricultural lending by banks\nReporting of suspicious or unusual transactions involving terrorism to the Nigerian Financial \nIntelligence Unit (NFIU); and\nSubmission of returns through the e-FASS\nA total of 741 cases of attempted fraud and forgery, involving 5.4 billion, US$35,406.1, €150.00 and \n₤60.0 were reported, up from 597 cases in the corresponding period of 2006. The 438 cases that were \nsuccessfully executed resulted in the loss of 1.4 billion, US$13,938, €150.0 and ₤60.0 to the banks, compared \nwith 295 cases and the loss of 1.2 billion, US$455,549.0, and ₤10,000.0 during the corresponding period in \n2006. The development was attributable to the weaknesses in the internal control systems of the banks and the \ndelay to \n\n\n\nN\nN\nN\nfully integrate their systems and processes.\nIncome audits, verification of capital and special investigations were conducted on some banks to \ncheck the authenticity of reports/returns to the CBN. The examination focused on the level of income and \nprofits reported in the audited accounts, the liquid assets, and the legitimacy of funds used for recapitalisation. \nFurther examination revealed that 88.0 per cent of the banks in the system met the specified minimum capital \nadequacy ratio (CAR) of 10.0 per cent, compared with 96.0 per cent in the corresponding period of 2006. With \nrespect to the liquidity ratio (LR), 72.0 per cent of the banks met the stipulated minimum of 40.0 per cent, \ncompared with 92.0 per cent in the corresponding period of 2006. The defaulting banks were penalized \naccordingly.\nAn assessment of the banking sector soundness using the CAMEL parameters revealed that as at end-\nJune 2007, six (6) banks were rated sound, sixteen (16) satisfactory, and three (3) banks were rated marginal. No \nbank was rated unsound, reflecting the positive results of the consolidation exercise. The non-performing loans \nof the banks rose from N209.0 billion at end-June 2006 to N254 0 billion, reflecting a deterioration in the \nquality of loan facilities. The ratio of non-performing credit to industry total credit was 7.7 per cent as at end-\nJune, 2007 as against 9.7 per cent recorded at end-June, 2006. The ratios were below the acceptable \ncontingency threshold of 20.0 per cent for the industry. \nRoutine examinations were also conducted on some of the deposit money banks and the discount \nhouses. The examinations covered prudential regulations, foreign exchange operations, anti-money laundering \n2.3.2 \nPrudential Examination\n2.3.3\n Banking Sector Soundnes\n2.3.4 Routine Examinations\n10\nCBN Half Year Economic Report for 2007\ncontrols and know-your-customer (KYC) directives. The examination on foreign exchange operations of the \nbanks revealed various infractions, including poor record keeping, incomplete documentation, non-compliance \nwith the foreign exchange rules and regulations, among others. The errant banks were appropriately sanctioned \nfor each of the offences.\nAn examination of the extent of compliance with the anti-money laundering controls and the Know-\nYour-Customer (KYC) principle in banks and other financial institutions revealed the following: non-\nuniformity with regard to the documentation of customers' identity; difficulty in obtaining information on \npolitically exposed persons; difficulty in obtaining uniform means of identification of customers; lack of \ncontinuous training for staff; and low adoption of self regulation by the institutions, among others.\nThe CBN embarked on a number of measures on Anti-Money Laundering/Combating Financing \nTerrorism (AM/CFT) in compliance with the Financial Action Task Force (FATF) requirements. In this regard, \nthe CBN organized various public enlightenment and training programmes on money laundering in \ncollaboration with other stakeholders. It also placed advertisements in newspapers and magazines as well as co-\noperated with and shared information with local and foreign law enforcement agencies in the arrest and \nprosecution of persons involved in financial crimes.\n Verification exercise on compliance with the provisions of the code of corporate governance for banks \nissued in April 2006 was conducted. Appraisal of the banks' monthly reports as well as periodic on-site \nverification by examiners to confirm the claims in their reports revealed that four (4) banks had government \nequity holdings above 10 per cent, while no bank had complied with the appointment of independent directors.\nOn-site examinations on 1,351 Other Financial Institutions (OFIs), comprising 757 community banks \n(CBs), 16 microfinance banks (MFBs), 113 finance companies (FCs), 91 primary mortgage institutions (PMIs), \n368 bureaux de change (BDCs), and 6 development finance institutions (DFIs) were conducted. The major \nregulatory issues that emerged from the examinations included deep erosion of shareholders' funds through poor \nquality of risk assets, poor loan recovery effort and weak discharge of oversight functions by the Boards of \nDirectors. \n Off-site review of the activities of the OFIs revealed improvement in their operations. The total assets of \nthe community banks, primary mortgage institutions and finance companies grew by 1.9, 5.7 and 6.0 per cent, \nrespectively, over the levels at end-December 2006. \nThe development finance institutions defaulted in the timely rendition of their statutory returns which \nconstituted a major impediment to effective supervisory process. In order to address the recent resurgence of \nillegal finance houses that were involved in questionable activities, the CBN embarked on a verification exercise \nas a prelude to publishing the names of licensed active FCs. The exercise revealed that seventy-six (76) FCs were \nin operation, while thirty-seven (37) had ceased operations. The names of the seventy-six licensed active FCs \nwere subsequently published in the national dailies to guide members of the general public. \nOne hundred and ten (110) fresh applications for BDC licences were received in the first half of the \nyear, out of which sixteen (16) operating licences were approved and sixty-six (66) Approvals-In-Principle \ngranted, while twenty-eight (28) others were at various stages of processing. Inspite of the publication of the \nnames of eighty (80) BDCs that could not be located during the on-site examination in the first quarter of 2006, \nonly 23 of the BDCs were located by the CBN, with 57 outstanding as at end of June 2007.\n2.3.5 \nFinancial Crime Surveillance\n2.3.6 \nCompliance with the Code of Corporate Governance for Banks in Nigeria\n2.3.7 \nExamination of Other Financial Institutions\n11\nCBN Half Year Economic Report for 2007\nFig. 11\nExchange Rate Movements (Naira per US$)\n115\n120\n125\n130\n135\n140\n145\n150\n155\nJan-06\nFeb-06\nMar-06\nApr-06\nMay-06\nJun-06\nJul-06\nAug-06\nSep-06\nOct-06\nNov-06\nDec-06\nJan-07\nFeb-07\nMar-07\nApr-07\nMay-07\nJun-07\nWDAS\nBDC\nInter-Bank\n2.4\nForeign Exchange Management\nThe official segment of the foreign exchange market under the Wholesale Dutch Auction System \n(WDAS) held 47 auctions as against 44 in the corresponding period of 2006. In aggregate, the market witnessed \na surge in demand amounting to US$6.59 billion, up from US$3.78 billion in the first half of 2006. This \ndevelopment was occasioned by the bid to pay for new oil blocks, importation of petroleum products and the \nrise in the repatriation of dividend at the end of the first quarter. Consequently, the value of foreign exchange \nsold by the CBN to the authorized dealers increased by 137.6 per cent to US$8,73 billion.\nAt N127.94, the exchange rate of the naira vis-à-vis the US dollar appreciated by 0.8 per cent over the \nlevel in the corresponding period of 2006. In the bureaux de change (BDC) segment of the market, the naira also \nappreciated, by 11.5 per cent, and traded at an average of N129.32 per US dollar. Consequently, the wide \nparallel market premium of 11.8 per cent in the first half of 2006 crashed to a remarkable low of 1.1 per cent.\n12\nCBN Half Year Economic Report for 2007\nJun-06\n11.8\nDec-06\n1.71\nJun-07\n1.1\n0\n5\n10\n15\n20\n25\nFig. 12\nBureaux de Change Premium\nJan-06\nFeb-06\nMar-06\nApr-06\nMay-06\nJun-06\nJul-06\nAug-06\nSep-06\nOct-06\nNov-06\nDec-06\nJan-07\nFeb-07\nMar-07\nApr-07\nMay-07\nJun-07\n \nFig. 13\nForeign Exchange Disbursements (2007 Half Year)\nWDAS Utilisation\n64.01%\nExternal Debt Service\n5.82%\nDrawing on L/C\n2.35%\nNational Priority \nProjects\n0.00%\nOther Official Payments\n25.22%\nAutonomous Source\n2.60%\n2.4.2 \nForeign Exchange Flows \nForeign exchange flows into the economy increased by 1.0 per cent over the level in the corresponding \nperiod of 2006 to US$29.49 billion. Total receipts from the oil sector (US$12.53 billion) accounted for 42.5 per \ncent, while the autonomous sources (US$14.94 billion) and non-oil public sector inflows (US$2.02 billion) \naccounted for 50.7 and 6.9 per cent, respectively. The huge autonomous inflows which surpassed the oil receipts \nwere driven by the increase in receipts from invisibles and non-oil exports. Total foreign exchange outflow \nincreased by 20.2 per cent to US$13.50 billion during the period. This development was attributed to the \nincrease in the frequency and sales at the WDAS, drawings on letters of credit, as well as other official and \nautonomous payments. \n13\nCBN Half Year Economic Report for 2007\nFig. 15 \nSectoral Utilization of Foreign Exchange\nAgricultural\n0.8%\nTransport\n4.5%\nInvisibles\n30.7%\nOthers\n28.9%\nIndustrial\n35.1%\nTransactions through the CBN resulted in a net inflow of US$1.30 billion, compared with US$7.32 \nbillion in the corresponding period of 2006. The inflows and outflows were US$14.55 billion and US$13.24 \nbillion, respectively, compared with US$18.37 billion and US$11.06 billion in the corresponding period of \n2006.\n2.4.3 \nSectoral Utilization of Foreign Exchange\nUtilization of official foreign exchange was estimated at US$12,647.1 million, representing an increase \nof 59.0 per cent over the level in the first half of 2006. An analysis of the foreign exchange utilization showed \nthat industrial and agricultural sectors accounted for 35.1 and 0.8 per cent, respectively, compared with 45.6 and \n1.0 per cent in the corresponding period of 2006. The share of finished goods, transport and invisibles were 28.9, \n4.5 and 30.7 per cent, respectively, compared with 30.6, 4.9 and 17.9 per cent in the corresponding period of \n2006. \n14\nCBN Half Year Economic Report for 2007\nFig. 16\n Sectoral Distribution of ACGSF Loans (Nmillion)\nFood Crop\n69.0%\nOthers\n21.1%\nLivestock\n9.9%\n2.5\nDevelopment Finance Operations\n2.5.1\nAgricultural Credit Guarantee Scheme Fund (ACGSF)\nThe authorized and called-up share capital of the ACGSF as at end-June 2007 was N3.0 billion, while \nthe paid-up capital remained N2.25 billion. Total resources available under the scheme as at end-June 2007 was \nN4.790 billion. A total of 11,374 loans valued at N1.002 billion were guaranteed under the scheme, compared \nwith 12,188 loans, valued at N801.1 million in the corresponding period of 2006. This represented a decline of \n6.6 per cent in volume and an increase of 25.1 per cent in value of loans guaranteed, compared with the levels \nattained in the corresponding period of 2006. The total number of loans repaid stood at 15,993 valued at N1.252 \nbillion. The cumulative volume and value of ACGSF loans from inception in 1978 to end-June 2007 stood at \n509,066 and N15.92 billion. The number and value of applications for claims settled under the scheme rose by \n124.8 and 108.5 per cent over the levels in the corresponding period of 2006 to 517 and N31.79 million, \nrespectively.\n2.5.2\nInterest Drawback Programme (IDP)\n2.5.3\nThe Trust Fund Model (TFM)\n2.5.4\nSmall and Medium Enterprises Equity Investment Scheme (SMEEIS)\nThe number and value of settled IDP claims rose by 38.8 and 152.6 per cent over the levels in the \ncorresponding period of 2006 to 8,214 and N44.17 million, respectively. The increase was attributed to the \nincentive offered under the IDP which encouraged farmers to payback their loans more promptly.\nThe total number of MOU signed under the TFM remained at 16 as at end-June 2007, as no new MOU \nwas signed during the first half of 2007.\nThe cumulative sum set aside by banks under the SMEEIS as at end June, 2007 was N37.42 billion, \nwhich represented a decrease of 2.1 and 8.2 per cent relative to the levels in the preceding half year and the \n15\nCBN Half Year Economic Report for 2007\n \nFig. 17\nSectoral Distribution of Investments by Banks as at June 2007\nAgro-Allied\n6.03%\nManufacturing\n38.37%\nConstruction\n6.14%\nSolid Minerals\n0.33%\nICT & Telecom.\n11.74%\nEducational Estab.\n0.74%\nServices\n17.10%\nTourism\n21.63%\nMicro Enterprises\n0.00%\ncorresponding period of 2006, respectively. The sum of N18.13 billion was invested by banks in 258 projects, \nrepresenting an increase of 6.4 and 21.6 per cent over the levels in the preceding half year and the corresponding \nperiod of 2006, respectively.\nA sectoral breakdown of the investments as at end-June, 2007, showed that the real sector received \nN9.2 billion (50.79 per cent) for 163 projects, while the services sub-sector accounted for the balance valued at \nN8.9 billion (49.21 per cent) invested in 95 projects. Further analysis revealed that the manufacturing sub sector \ndominated, accounting for 46.9 and 38.3 per cent of the total number and value of projects, respectively. \nServices followed with 21.3 and 17.1 per cent of the total number and value of projects, respectively. Tourism & \nLeisure, and Information and Communication Technology (ICT) & Telecommunications accounted for 21.6 \nand 9.8 per cent of the total amount invested, respectively, while construction, agro-allied, educational \nestablishment and solid minerals sub sectors accounted for 6.1, 6.0, 0.7 and 0.3 per cent, respectively. \n2.5.4\nMicrofinance\nForty (40) additional applications for microfinance bank (MFB) licenses from new investors were \nreceived, while eleven (11) final licenses, and thirty-two (32) approvals-in- principle (AIPs) were granted. Also, \nfive (5) final licences and one hundred and forty (140) provisional approvals were granted to existing CBs to \nconvert to MFBs. Twenty-three (23) other new applications for MFB licences were at various stages of \nprocessing. However, the implementation of the conversion plans submitted by the community banks that were \nyet to meet the minimum shareholders' funds of N20 million was hampered by their failure to adhere to the \nprogrammes and timelines contained in their conversion plans. \nEfforts to build the skills and competencies of the executives of microfinance banks were given a boost \nwith the CBN's approval of the certification programme for directors and management staff of microfinance \n16\nCBN Half Year Economic Report for 2007\nbanks as well as other regulators. Following the approval, steps are being taken to finalize the Terms of \nReference for the Technical Service Providers, establish a Supervisory Board, and set up an Administrative \nSecretariat. \nProvisional data showed that the total assets of the CBN as at end-June 2007 increased by 23.68 per \ncent to N6,492.8 billion when compared with the level in the corresponding period of 2006. This reflected the \nincrease of 31.14, 29.31, 23.89 and 10.56 per cent in total external reserves, rediscount and advances, fixed \nassets and other securities, which more than offset the decrease of 49.33 and 22.21 per cent in Federal \nGovernment securities and other assets.\nThe corresponding increase of 23.55 per cent in total liabilities relative to the first half of 2006 was \naccounted for by deposits (29.0 per cent), currency in circulation (19.43 per cent), and other liabilities (14.0 per \ncent). The increase of 47.36 and 21.67 per cent in other deposits and the federal and state governments' deposits \nmore than offset the decline in banks' deposits.\n2.6\nCBN Assets and Liabilities", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Quarterly_Economic_Reports/main report-2.pdf"}
{"doc_id": "0d9cd9fbe74bdc83cdc441fa3e2658da", "text": "1 \n \n \n \n \nCentral Bank of Nigeria Communique No 109 of the \nMonetary Policy Committee Meeting of Monday and \nTuesday 19th and 20th September 2016 \nThe Monetary Policy Committee met on 19th and 20th \nSeptember 2016, amidst persistently subdued global \nand domestic economic and financial environments. \nThe Committee thoroughly assessed the global and \ndomestic macroeconomic and financial developments \nand risks to the domestic economy up to September \n2016, and the outlook for the last quarter of the year. \nIn attendance were 10 out of 12 members. \n \n2 \n \nInternational Economic Developments \nThe Committee acknowledged the tepid growth \nperformance of global output, arising from legacy \nfactors, the June 23rd Brexit vote as well as contagion \nfrom emerging markets’ weak demand and contracting \nproductivity. Whereas growth appears to be slowly \nrecovering in advanced economies, especially the \nUnited States, the outlook remains fraught with \nuncertainty as long-term government bonds have \nnosedived to multi-year lows on expectations of loose \nmonetary policy from advanced economies and the \ncontinued sub-optimal performance of the Euro Area, \nJapan and China. Consequently, the IMF had in July \n2016, further downgraded its baseline forecast for \n3 \n \nglobal growth to 3.1 per cent from 3.2 in April. The \nWorld Bank in its June 2016 Report on Global \nEconomic Prospects showed even less optimism with \na global output growth projection of 2.4 per cent for \n2016 from the 2.9 per cent in January. The subdued \nglobal growth prospects is traced to persistently weak \nfundamentals, mainly in emerging markets and \ndeveloping economies (EMDEs), mostly due to soft \ncommodity prices, diminished investment, contracting \ntrade, weak demand and rising inflation. Volatility in \nglobal financial markets appeared to have subsided in \nthe second quarter of the year, after a wild ride \nfollowing the UK Brexit vote, and against the backdrop \n4 \n \nof less likely US rate hike expectations and some \nstability in the crude oil market. \nThe United States (US) economy firmed up at a \nseasonally-adjusted annualized rate of 1.1 per cent in \nQ2 2016, although with a downward adjustment of 0.1 \nper cent from the first estimate of 1.2 per cent. It, \nhowever, still represents a noticeable improvement \ncompared with the 0.8 per cent growth recorded in Q1 \n2016. The improved performance of the economy was \nattributed to increased private consumption spending, \na robust labor market and increased exports, even as \nretail sales and manufacturing output declined. \nJapan’s economy expanded at a seasonally adjusted \nannualized rate of 0.2 per cent in Q2 2016 compared \n5 \n \nwith 1.7 per cent in Q1 of 2016, against the backdrop \nof weak wage growth and an external sector that is \nundermined by a strong yen. Fearing that monetary \npolicy may be approaching its limits, the government \non 2nd August, approved a fiscal stimulus of ¥13.5 \ntrillion (US$132 billion) in a spirited attempt to \njumpstart the economy, even as the Bank of Japan \n(BOJ) dismissed market speculation that it was \nplanning to stop its monthly monetary stimulus \nprogram of ¥6.7 trillion ($69.07 billion). The massive \nfiscal and monetary stimuli are, however, yet to have \nthe desired impact. \nReal GDP in the Euro area expanded by 0.3 per cent, \na significant decline compared with the 0.6 per cent \n6 \n \nrecorded in Q1 2016. Downside risks from the Brexit \nvote seems to have dissipated with no attendant major \neconomic shock to the zone’s economy thus far. As \nsuch, many of the conditions that had driven the \nrecovery remained in place, suggesting that Q3 growth \nmay continue in the direction of the second quarter. \nFollowing its September 8th, 2016 meeting, the \nGoverning Council of the European Central Bank \nresolved to leave its key interest rates on the main \nrefinancing operations, the marginal lending facility \nand the deposit facility unchanged at 0.00, 0.25 and -\n0.40 per cent, respectively. The Council also \nreaffirmed its commitment to sustain the monthly asset \npurchases of €80 billion (US$90.4 billion) until end of \n7 \n \nMarch 2017 or until a sustained adjustment is seen on \nthe path of inflation, towards the 2.0 per cent policy \ntarget. \nThe Bank of England (BoE), at its August 4th meeting, \nand in attempts to further blunt the aftershocks of the \nBrexit vote, decided to cut its benchmark interest rate \nfor the first time since 2009, by 25 basis points from \n0.5 per cent to 0.25 per cent, the lowest ever in the \nBank’s history. The Committee voted to increase its \nmonthly assets purchase program financed through \nthe issuance of reserves by another ₤60 billion \n(US$80.4 billion) from ₤375 billion (US$502.5 billion) \nto ₤435 billion (US$582.9 billion). Furthermore, the \nBoE revived its financial crises-era U.K. government \n8 \n \nbond buying program financed through the issuance of \nreserves, up to ₤10 billion ($13.4 billion), in effort to \nstimulate the economy and steer inflation towards its \n2.0 per cent target. \nWhile major EMDEs continue to be constrained by low \ncapital \ninflow, \nthe \nintractable \nmacroeconomic \nenvironment faced in 2015 and through to the first half \nof this year is gradually abating. The prospects for \nnear term full economic and financial recovery in the \nEMDEs remain subdued, with the IMF (WEO July \n2016 Update) projected growth rate forecast for this \ngroup of countries at 4.1 per cent, a downward review \nfrom 4.3 projected in April. However, the resumption of \n9 \n \ngrowth is expected to be powered by rising credits and \na surge in government spending. \nThe potential alliance between OPEC and non-OPEC \nmembers like Russia, to reduce quota, in the face of \ndisruptions to production in Nigeria, Libya and Iraq, \nhave aided relative stability in the crude oil market. \nGlobally, general price levels remained tapered due to \nsustained low oil and other commodity prices. In the \nadvanced economies, despite the uncertainties arising \nfrom the UK referendum, accommodative monetary \npolicy stance of the region’s central Banks, negative \ninterest rate in Japan and elsewhere, as well as \nvarious fiscal stimuli, global inflation has remained \nsuppressed. As deviations in macroeconomic \n10 \n \nfundamentals in the advanced economies and the \nEMDEs widen, monetary policy could continue to \ndiverge between the two in the short to medium term. \nDomestic Economic and Financial Developments \nOutput \nData released by the National Bureau of Statistics \n(NBS) in August indicated that the economy had \nslipped into recession following another contraction in \nQ2, 2016. The August 2016 data showed domestic \noutput in Q2, 2016 contracted by 2.06 per cent. This \nrepresented a decline of 1.70 percentage points in \noutput from the -0.36 per cent recorded in Q1, and \n4.41 percentage points lower than the 2.35 per cent \n11 \n \ngrowth in the corresponding period of 2015. The non-\noil sector contracted by 0.38 per cent, compared with \nthe 0.18 per cent contraction in the preceding quarter. \nAgriculture; \nOther \nServices; \nEducation; \nArts, \nEntertainment & Recreation; and Information & \nCommunication, grew by 4.53, 4.32, 2.88, 1.80 and \n1.35 per cent, respectively. \nThe shocks associated with energy shortages and \nprice hikes, scarcity of foreign exchange and \ndepressed \nconsumer \ndemand, \namong \nothers, \napparently proved to be more damaging than \nexpected. Recognizing that the conditions which \nprecipitated the current economic downturn were not \nessentially sensitive to monetary policy interventions, \n12 \n \nthe \nMPC \nagain \nrenewed \nits \ncall \nfor \nurgent \ncomplementary fiscal policies to resuscitate production \nand engineer aggregate consumption. In particular, \nmembers \nunderscored \nthe \nimperatives \nof \ndiversification of the economy away from oil into \nagriculture, manufacturing and services as well as \nmore efforts towards payment of salaries and arrears \nof public sector employees particularly in states and \nlocal \ngovernments \nto \nstimulate \naggregate \nconsumption, as part of the overall fiscal policy menu \nkit. On the supply side, efforts must be intensified at \nincreased capital expenditure to redress infrastructural \ndeficits, improve the business environment and spur \ngrowth. \n13 \n \nPrices \nThe Committee noted that headline inflation (year-on-\nyear) rose again in August to 17.6 per cent, from 17.1 \nper cent in July 2016, thus maintaining the upward \ntrend since January 2016. The increase in headline \ninflation in August reflected increases in both food and \ncore components of inflation. Core and food inflation \nhave increased from 16.93 and 15.80 per cent in July \nto 17.2 and 16.43 per cent, respectively, in August \n2016. \nThe Committee nonetheless, noted that the month-on-\nmonth evolution of consumer price inflation has been \nless phenomenal. The headline inflation index rose by \n14 \n \n1.0 per cent in August from 1.3 per cent in July, 1.7 \nper cent in June; and 2.8 per cent in May 2016. \nSimilarly, the core index has been increasing at a \ndecreasing rate since May when it rose by 2.7 per \ncent. It moderated to 0.85 per cent in August from 1.22 \nper cent in July and 1.83 per cent in June. The same \npattern of moderation is seen in the food (month-on-\nmonth) index which rose by 1.2 per cent in August \nfrom 1.21 per cent in July, 1.4 per cent in June and 2.6 \nper cent in May. \nThe MPC further noted that the pressure on consumer \nprices continues to be associated with reform-related \nlegacy and structural factors including high costs of \nelectricity, transport, production inputs, as well as \n15 \n \nhigher prices of both domestic and imported food \nproducts. The MPC expects that with the onset of the \nharvest season, the restrictive stance of policy as well \nas the flexible FX regime, prices will begin to taper in \nthe fourth quarter. \nMonetary, \nCredit \nand \nFinancial \nMarkets \nDevelopments \nBroad money supply (M2) grew by 8.08 per cent in \nAugust, 2016, compared with the July level of 10.75 \nper cent. When annualized, M2 grew by 12.12 per cent \nin August 2016 above the growth benchmark of 10.98 \nper cent for 2016. Net domestic credit (NDC) grew by \n20.09 per cent in the same period, annualized at 30.14 \n16 \n \nper cent. At this rate, the growth rate of NDC was \nabove the provisional benchmark of 17.94 per cent for \n2016. The development in NDC, essentially reflected \nthe relative growth in credit to the private sector of \n21.07 per cent in the month, annualized to 31.61 per \ncent. Credit to government grew by 1.99 per cent in \nAugust 2016, which annualized to a growth of 3.0 per \ncent compared with the growth benchmark of 13.28 \nper cent. The growth in M2 was traced to exchange \nrate effect following the depreciation of naira in the \nsecond quarter of the year. \nMoney \nmarket \ninterest \nrates \nreflected \nliquidity \nconditions in the economy. Average inter-bank call \nrate, which stood at 15.00 per cent on 8th July 2016, \n17 \n \nclosed at 30.00 per cent on August 26, 2016. Between \nJuly 8th and 26th August 2016, interbank call rate \naveraged 24.95 per cent. The rates increased to 50.0 \nper cent on July 15, 2016. The sharp increase was \nattributed to the drop in net liquidity during the period. \nThe Committee noted a decline in the equities \nsegment of the capital market as the All-Share Index \n(ASI) fell by 3.51 per cent from 28,733.90 on July 18, \n2016, to 27,725.40 on September 15, 2016. Similarly, \nMarket Capitalization (MC) declined by 3.55 per cent \nfrom N9.87 trillion to 9.52 trillion during the same \nperiod. In addition, relative to end-December 2015, the \ncapital market indices fell by 20.06 per cent and 3.35 \nper cent, respectively, reflecting the slowdown in the \n18 \n \neconomy. Overall, the capital market did not show \nvulnerabilities \nto \ndomestic \nand \nexternal \nsector \ndevelopments. \nExternal Sector Developments \nThe average naira exchange rate weakened at the \ninter-bank segment of the foreign exchange market \nduring the review period. The exchange rate at the \ninterbank market opened at N285.25/US$ and closed \nat N305.90/US$, with a daily average of N302.87/US$ \nbetween July 1st and August 26, 2016. The Committee \nobserved that total foreign exchange inflows through \nthe CBN increased by 89.14 per cent, from \nUS$1,092.21 million recorded in July to US$2,065.79 \nmillion in August 2016. This increase was due mainly \n19 \n \nto receipts of foreign flows within the month. Total \noutflows, however, decreased by 4.57 per cent from \nUS$2,728.12 million to US$2,603.35 during the same \nperiod. In direct efforts to deepen the foreign exchange \nmarket and stabilize the financial markets generally, a \nnumber of policy instruments were deployed since the \nlast MPC meeting, including an increase in the \nbenchmark \ninterest \nrate. \nComplementary \nadministrative measures were also taken towards \nachieving this goal, among which was the directive to \nIMTOs to sell forex directly to Bureau de Change \nOperators, in order to improve liquidity in that segment \nof the foreign exchange market. While challenges \nremained, the Committee expressed optimism that \n20 \n \nwith the crystallization of current policy measures, \nnoticeable improvements should be observed in the \nfinancial markets. \nThe Committee’s Considerations \nThe \nCommittee \nacknowledged \nthe \nweak \nmacroeconomic performance and the challenges \nconfronting the economy, but noted that the MPC had \nconsistently called attention to the implications of the \nabsence of robust fiscal policy to complement \nmonetary policy in the past. The Committee also \nassessed the impact of its decision to tighten the \nstance of monetary policy by raising the MPR in July \n2016. At the time, the Committee understood the \ncomplexity of the challenges facing the economy and \n21 \n \nthe difficulty of arriving at an optimal policy mix to \naddress rising inflation and economic contraction, \nsimultaneously. The Committee also recognized that \nmonetary policy had been substantially burdened \nsince 2009 and had been stretched. The Committee \nnoted that new capital flows into the economy, \napproximately US$1 billion, had come in since July, \nwhile \nmonth-on-month \ninflation \nhas \ndeclined \ncontinuously \nsince \nMay \n2016. \nAgainst \nthis \nbackground, members reemphasized the need to \nprioritize the use of monetary policy instruments in \ndealing essentially with stability issues around key \nprices (consumer prices and exchange rate) as \nprerequisites for growth. \n22 \n \nThe MPC noted that stagflation is indeed a very \ndifficult economic condition with no quick fixes: having \nbeen imposed by supply shocks as well as fiscal and \ncurrent account (twin) deficits. Consequently, the \npolicy framework must be reengineered urgently to \nprovide a lever for reversing the negative growth trend. \nWhile the imperative for ensuring financial system \nstability remains, the MPC reiterated the fact that \nmonetary policy alone cannot move the economy out \nof stagflation. \nThe MPC considered the numerous analysis and calls \nfor rates reduction but came to the conclusion that the \ngreatest challenge to the economy today remains \nincomplete fiscal reforms which raise costs, risks and \n23 \n \nuncertainty. The calls came mainly from the believe \nthat reducing interest rates will spur credit growth, not \nonly in the private sector but also by the public sector, \nwhich \nwill \nhelp \nprovide \nliquidity \nto \nstimulate \nconsumption \nand \ninvestment \nspending. \nThe \nCommittee was of the view that in the past, the MPC \nhad cut rates to achieve the above objectives; but \nfound that rather than deploy the available liquidity to \nprovide credit to agriculture and manufacturing \nsectors, the rate cuts provided opportunities for \nlending to traders who deployed the same liquidity in \nputting pressure on the foreign exchange market \nwhich had limited supply, thus pushing up the \nexchange rate. \n24 \n \nWith respect to providing opportunity to the public \nsector to borrow at lower rates to boost consumption \nand investment spending, the Committee agreed that \nwhile it was expected to stimulate growth through \naggressive spending, doing so without corresponding \nefforts to boost industrial output by taking actions to \ndeepen foreign exchange supply for raw materials will \nnot help reduce unemployment nor would it boost \nindustrial capacities. The Committee was also of the \nview that consumer demand for goods which will be \nboosted through increased spending may indeed be \nchasing too few goods which may further exacerbate \nthe already heightened inflationary conditions. The \nurgency of a monetary-fiscal policy retreat along with \n25 \n \ntrade and budgetary policy, to design a comprehensive \nintervention mechanism is long overdue. \nThe Bank has since 2009 expanded its balance sheet \nto bail out the financial system and support growth \ninitiatives in the economy. While stimulating economic \ngrowth and creating a congenial investment climate \nalways is and remains essentially the realm of fiscal \npolicy; monetary policy in all cases only comes in to \nsupport sound fiscal policy. Nevertheless, the Bank \nhas and shall continue to deploy its development \nfinance interventions to complement the overall effort \nof fiscal policy towards reinvigorating the economy. \nThe interest rate decisions of the Bank are, therefore, \n26 \n \nanchored on sound judgment, fundamentals and \ncompelling arguments for such policy interventions. \nThe Committee also feels that there was the need to \ncontinue to encourage the inflow of foreign capital into \nthe economy by continuing to put in place incentives to \ngain the confidence of players in this segment of the \nforeign \nexchange \nmarket. \nConsequently \nthe \nCommittee considers that loosening monetary policy \nnow is not advisable as real interest rates are \nnegative, pressure exists on the foreign exchange \nmarket while inflation is trending upwards. \nThe Committee noted the positive response of the \ndeposit money banks (DMBs) to the Bank’s call for \nincreased credit to the private sector between July and \n27 \n \nAugust. As the growth in the monetary aggregates \nspiked above their provisional benchmarks, headline \ninflation continued its upward trajectory in August \n2016, and now close to twice the size of the upper limit \nof the policy reference band. Supply side factors \nincluding energy and utility prices, transportation and \ninput costs, have continued to add to consumer price \npressures. Members emphasized that improved fiscal \nactivities, especially, the active implementation of the \n2016 Federal Budget, and payment of salaries by \nstates and local governments, will go a long way in \ncontributing to economic recovery. In the same \ndirection, the Committee urged the fiscal authorities to \n28 \n \nconsider tax incentives as a stimulus on both supply \nand demand sides of economic activities \nOutlook \nThe data available to the Committee and forecasts of \nkey variables suggest that the outlook for inflation in \nthe medium term appears benign. First, month-on-\nmonth inflation has since May 2016 turned the curve; \nsecond, harvests have started to kick-in for most \nagricultural \nproduce \nand \nshould \ncontribute \nto \ndampening consumer prices in the months ahead; and \nthird, the current stance of monetary policy is expected \nto continue to help lock-in expectations of inflation \nwhich, has started to improve with the gradual return \nof stability in the foreign exchange market. In this light, \n29 \n \nthe MPC believes that as inflows improve, the naira \nexchange rate should further stabilize. Overall, the \nmajor pressure points remain the challenges in the oil \nsector (production and prices), output contraction, and \nother financial system vulnerabilities as well as foreign \nexchange shortage. \nThe Committee’s Decisions \nThe Committee assessed the relevant risks, and \nconcluded that the economy continues to face \nelevated risks on both price and output fronts. \nHowever, given its primary mandate and considering \nthe limitations of its instruments with respect to output, \nthe Committee elected to retain the current stance of \n30 \n \npolicy. Conscious of the need to allow this and other \nmeasures like the foreign exchange market reforms to \nwork through fully, the Committee decided to retain all \nthe monetary policy instruments at their current levels. \nIn summary, all 10 MPC members voted to: \n(i) Retain the MPR at 14.00 per cent; \n(ii) Retain the CRR at 22.5 per cent; \n(iii) Retain the Liquidity Ratio at 30.00 per cent; \nand \n(iv) Retain the Asymmetric Window at +200 and \n-500 basis points around the MPR \nThank you for listening. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n20th September 2016", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No. 109 of the Monetary Policy Committee Meeting of Monday and Tuesday, September 19 and 20, 2016.pdf"}
{"doc_id": "6cd705b9e8a82a55f01dd8a2271c8879", "text": "1 \n \n \nCentral Bank of Nigeria Communiqué’ No. 104 of the \nMonetary Policy Committee Meeting of Monday and \nTuesday, November 23 and 24, 2015 \nThe Monetary Policy Committee met on 23rd and 24th \nNovember, 2015 against the backdrop of slowing global \ngrowth \nand \na \nweakening \ndomestic \neconomic \nenvironment, attributable largely to the down turn in oil \nprices. In attendance were 10 out of 12 members. The \nCommittee appraised the global and domestic economic \nand financial environments up to October 2015 as well as \nthe economic outlook for the first half of 2016. \nInternational Economic Developments \nThe Committee noted the moderation in global output \nrecovery evidenced by the less-than-expected growth of \n2.9 per cent in the first half of 2015. The development \n \n2 \n \nwas underpinned largely by deteriorating global trade, \nreversal in output growth in the advanced economies \nand a significant slowdown in growth in the emerging \nand developing economies. The key drag on growth in \nthe advanced economies included unfavorable labor \nmarket conditions, suppressed foreign demand and \nweaker than anticipated domestic aggregate demand. \nConsequently, growth in the U.S. slowed to 1.5 per cent \nin the third quarter of 2015 as a result of a drawdown in \ninventories; deceleration in exports; drag in private \nconsumption, government spending and residential fixed \ninvestment. The outlook for the fourth quarter, however, \nremains optimistic as consumption spending is expected \nto drive growth, supported by low inflation. \n \nThe Bank of Japan continued with monetary easing, \nthrough its asset purchase program, with a monthly \n \n3 \n \ninjection of ¥6.7 trillion ($54.27 billion); but this was \ninsufficient to restart output as third quarter growth is \nprojected to be weaker than the second quarter, thereby \nincreasing the likelihood of dampening growth and \npressure for higher stimulus. The European Central Bank \n(ECB) in October 2015; reaffirmed its commitment to its \nmonthly asset purchase of €60 billion ($64.2 billion) until \nSeptember, 2016; although the package may fall short of \nwhat is required for meaningful impact on growth. \nSimilarly, the Bank of England continued its ₤375 billion \n($570 billion) monthly asset purchase program, as the \neconomy is expected to retreat from its performance of \n0.7 per cent in the second quarter to about 0.5 per cent \nin Q3 with the decline in foreign demand, potentially \ndampening the prospects for an interest rate hike. \nGrowth in the emerging markets and developing \neconomies (EMDEs) continued to sag; reflecting the \n \n4 \n \nprotracted slowdown in China as well as recession in \nRussia and Brazil. The slowdown among EMDEs has been \nmainly due to weak import growth in China, low \ncommodity prices, capital flow reversals, rising debt \nlevels and other geopolitical factors. In effect, the poor \ngrowth expectations could continue into the fourth \nquarter with the likelihood of further dampening into \n2016. \n \nOverall, monetary policy in the most advanced and \nemerging market economies appears oriented towards \neasing to revive output and strengthen employment. No \nsubstantial upswing is expected around the current tepid \nglobal inflation, projected to remain moderate through \n2016. The continuously bearish commodity prices and \nstronger \nconsumer \nsentiments \nhave \ndampened \nconsumer prices in the advanced economies. In the \n \n5 \n \nemerging and developing markets, the major risk to \ndomestic prices is mainly the increased pressure on \ndomestic currencies. However, in most emerging \nmarkets, the low prices of oil and other commodities \ncontinue to cushion consumer inflation pressures. \n \nDomestic Economic and Financial Developments \nOutput \nData from the National Bureau of Statistics (NBS) \nindicated that real GDP grew by 2.84 per cent in the third \nquarter of 2015, compared with 2.35 per cent in the \nsecond quarter. However, economic growth in Q3 was \nlower than the 3.96 and 6.23 per cent in the first quarter \nof 2015 and the corresponding period of 2014, \nrespectively. Both the oil and non-oil sectors contributed \nto growth in the third quarter of 2015. In the non-oil \n \n6 \n \nsector, the key drivers of output growth were Crop \nProduction, \nTrade \nand \nTelecommunications \nand \nInformation Services, contributing 0.91, 0.79 and 0.40 \npercentage points, respectively. \n \nThe overall outlook for economic activity is expected to \nimprove on account of sustained improvement in the \nsupply of power and refined petroleum products, \nprogress with counter-insurgency in the North-East and \ntargeted interventions in the real sector. In addition, the \ninauguration of the Federal Executive Council and the \nassumption of office of the Ministers, earlier this month, \nare expected to add impetus to the growth momentum. \nThe Committee reiterated its commitment to support the \nvarious ongoing initiatives of the Federal Government to \nstimulate output growth. \n \n \n7 \n \nPrices \nThe Committee noted with delight the slight decline in \nyear-on-year headline inflation to 9.3 per cent in \nOctober, from 9.4 per cent in September, 2015. The \ndecline in headline inflation in October 2015, reflected \ndecreases in both the core and food components. Core \ninflation declined for the second consecutive month to \n8.7 per cent in October from 8.9 per cent in September, \nwhile food inflation slowed to 10.1 per cent from 10.2 \nper cent over the same period. The Committee further \nnoted the continued moderation in month-on-month \ninflation and reaffirmed its commitment to price \nstability, stressing the need for complementary supply \nside policies as part of an overall strategy to lock-in \ninflation expectations. \n \n \n8 \n \nMonetary, Credit and Financial Markets Developments \nBroad money supply (M2) contracted by 3.75 per cent in \nOctober, 2015, over the level at end-December, 2014. \nAnnualized, M2 declined by 5.0 per cent, which is \nsignificantly below the growth benchmark of 15.24 per \ncent for 2015. Net domestic credit (NDC) grew by 10.8 \nper cent, which annualizes to 14.35 per cent in the same \nperiod. At this level, NDC fell below the provisional \nbenchmark of 29.30 per cent for 2015. Growth in \naggregate credit reflected mainly growth in net credit to \nthe Federal Government which grew by 96.66 per cent in \nOctober, although lower than the 142.38 per cent in \nSeptember, 2015. The sharp moderation in credit to \ngovernment may be partly attributable to the lag effect \nof implementation of the Treasury Single Account (TSA). \nDuring the period under review, money market interest \nrates were low but sometimes volatile, reflecting \n \n9 \n \nfluctuations in banking system liquidity during the \nperiod. Average inter-bank call and Open Buy Back (OBB) \nrates, which stood at 15.50 and 35.00 per cent on \nSeptember 21 and 22, 2015, respectively, fell to 9.67 and \n9.00 per cent on September 23, 2015. On October 19, \n2015, OBB rate closed at 1.00 per cent with no \ntransaction at the interbank call segment. Following the \nincrease in net liquidity level, the interbank call and OBB \nrates further declined and closed at 3.76 and 0.73 per \ncent, on October 29 and 30, 2015, respectively. Between \nthe last MPC and end-October 2015, interbank call and \nOBB rates averaged 6.66 and 6.72 per cent, respectively, \nand were 0.41 per cent and 1.33 per cent on 19th \nNovember, 2015. \nThe Committee also noted the bearish trend in the \nequities segment of the capital market during the review \nperiod. The All-Share Index (ASI) decreased by 9.9 per \n \n10 \n \ncent from 31,217.77 on September 30, 2015 to 28,131.28 \non November 20, 2015. Similarly, Market Capitalization \n(MC) fell by 9.9 per cent from N10.73 trillion to N9.67 \ntrillion during the same period. However, relative to end-\nDecember 2014, the indices decreased by 18.9 and 9.5 \nper cent, respectively. These developments reflected, \nlargely the cautious approach to lending by the deposit \nmoney banks. \n \nExternal Sector Developments \nThe average naira exchange rate remained relatively \nstable at both the inter-bank and Bureau-de-Change \n(BDC) segments of the foreign exchange market during \nthe review period. The exchange rate at the interbank \nmarket opened at N197.00/US$ and closed at N197.00, \nwith a daily average of N196.99/US$ between September \n21 and October 30, 2015. At the BDC segment, the \n \n11 \n \nexchange rate opened at N223.50/US$ and closed at \nN225.00, with a daily average of N224.46/US$, \nrepresenting a depreciation of N1.50k for the period. The \nrelative stability in the foreign exchange market is \nattributable to the sustained supply of foreign exchange \nfrom autonomous sources as well as the effects of \nvarious administrative measures taken by the Bank. \nGross official reserves increased from US$29.85 billion at \nend-September, 2015 to $30.31 billion on 20th \nNovember, 2015. \n \nCommittee’s Considerations \nThe Committee acknowledged the continued fragile \nglobal economic environment, including the possibility of \nmonetary policy normalization in the United States; poor \noutlook for commodity prices and further slowdown in \nthe Emerging Markets and Developing Economies. The \n \n12 \n \nMPC also noted \nthe fragility \nof the \ndomestic \nmacroeconomic environment; reflected partly in low \noutput growth, soft oil prices, low credit to the high \nelasticity sectors of the economy and sustained \ninflationary \npressure, \nwhich \nhowever, \nsoftened \nmoderately in October. The MPC was, particularly, \nconcerned \nthat \nthe \nprevious \nliquidity \ninjections \nembarked upon through lowering of the Cash Reserve \nRatio (CRR), in the last MPC, has not transmitted \nsignificantly to improved credit delivery to key growth \nand employment in sensitive sectors of the economy. \nRather, credit went to sectors with low employment \nelasticity. \nThe Committee restated its commitment to evolve and \nimplement measures that would be supportive of \nconsolidating \nand \nstrengthening \noutput \ngrowth, \nhowever, with an eye on price stability. The Committee, \n \n13 \n \nhowever, recognized the limits of monetary policy under \nconditions of huge infrastructure gap and significant \nglobal financial market fragilities. While noting the \nimperative of complementary fiscal policies to augment \nmonetary policy, under the circumstance, monetary \npolicy must remain bold in charting the desired course \nthat would stimulate sustainable output growth in the \ncountry. \nConcerned about the state of unemployment in the \ncountry, the MPC evaluated various options for ensuring \nincreased credit delivery to the key growth sectors of the \neconomy, \ncapable \nof \ngenerating \nemployment \nopportunities, \nand \nimproving \nproductivity. \nThe \nCommittee underscored the need for the Deposit Money \nBanks to ensure that measures taken by the Central Bank \nto inject liquidity and stimulate the economy adequately \ntranslate into increased lending to the sectors with \n \n14 \n \nsufficient employment capabilities and the potential to \ngenerate growth. Accordingly, the MPC agreed that going \nforward any attempt by the CBN at easing liquidity into \nthe system shall be directed at targeting real sector, \ninfrastructure, agriculture and solid minerals. The MPC \nfurther directed the Bank’s Management to put in place \nnecessary \nmeasures/regulations \nto \nensure \nstrict \ncompliance by the DMBs. This is aimed at ensuring that \nemployment and productivity is stimulated while also \nmoderating prices. \nThe Committee noted with satisfaction the stability, \nsoundness and resilience of the banking system even \nagainst adverse global financial conditions. Given the \nsituation, the MPC emphasized the necessity of focusing \non financial market stability and proactive engagement \nof policy and administrative levers needed to support the \nenvironment in which market institutions operate. On \n \n15 \n \ntheir part, market institutions are encouraged to employ \nmore stringent criteria in evaluating their portfolio and \nbusiness decisions. \nThe MPC considered that although, headline inflation \nhad remained at the borderline of single digit, the \nobserved moderation, especially in the month-on-month \ninflation, provided some room for monetary easing to \nsupport output in the short to medium term, while \nkeeping in focus the primacy of price stability. In effect, \nthe Committee will continue to monitor developments \naround the Naira exchange rate, interest rates, and \nconsumer prices, even as target measures are needed to \nchannel liquidity to the key sectors of the economy in an \nattempt to drive growth. \nThe Committee noted that close coordination between \nmonetary and fiscal policy was imperative for sustainable \ngrowth enhancing policies. \n \n16 \n \n \nThe Committee’s Decisions \nIn consideration of the weakening fundamentals of the \neconomy, particularly the low output growth, rising \nunemployment and the uncertainty of the global \neconomic environment, the MPC, by a vote of 8 out of \n10, reduced the MPR from 13.0 to 11.0 per cent while 2 \nmembers voted for a retention of the rate at 13.0 per \ncent; 7 members voted to reduce the Cash Reserve \nRequirement (CRR) from 25.0 per cent to 20.0 per cent \nwhile 3 members voted to hold. In addition, 8 members \nvoted for an asymmetric corridor of +2/-7 per cent while \n2 voted to retain the symmetric corridor of +/-2 per cent \naround the Monetary Policy Rate (MPR). \n \nThe MPC emphasized that the liquidity arising from the \nreduction in the CRR to 20 per cent, will only be released \n \n17 \n \nto the banks that are willing to channel it to employment \ngenerating activities in the economy such as agriculture, \ninfrastructure development, solid minerals and industry. \n \nIn summary, the MPC voted to: \n(i) Reduce the CRR from 25.0 per cent to 20.0 per cent; \n(ii) Reduce the MPR from 13.0 per cent to 11.0 per cent; \n(iii) Change the symmetric corridor of 200 basis points \naround the MPR to an asymmetric corridor of +200 basis \npoints and -700 basis points, around the MPR. \n \n \nThank you for listening. \n \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n24th November 2015", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/DRAFT November 2015  Communique_Final.pdf"}
{"doc_id": "6f363bf5559e0b4209c4beec5ecc31b0", "text": "ECONOMIC REPORT \nTHIRD QUARTER 2016 \n \n \n \nCENTRAL BANK OF NIGERIA \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage ii \nEconomic Report Third Quarter \n2016 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nThe Central Bank of Nigeria Quarterly Economic Report is designed for the dissemination \nof financial and economic information on the Nigerian economy on current basis. The \nReport analyses developments in the financial, fiscal, real and external sectors of the \neconomy, as well as international economic issues of interest. The Report is directed at \na wide spectrum of readers including economists and financial analysts in government \nand the private sector, as well as general readers. \n \n \n \n \nSubscription to the Quarterly Economic Report is available without charge to institutions, corporations, \nembassies and development agencies. Individuals, on written request, can obtain any particular issue \nwithout a charge. Please direct all inquiries on the publication to the Director of Research, Central Bank \nof Nigeria, P.M.B. 187, Garki, Abuja, Nigeria. \n \nThe Quarterly Reports can also be freely downloaded from the CBN website: www.cbn.gov.ng \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage iii \nEconomic Report Third Quarter \n2016 \nContents \n1.0 \nSummary ....................................................................................................................................... 1 \n2.0 \nFinancial Sector Developments .................................................................................................... 3 \n2.1 \nMonetary and Credit Developments ............................................................................................ 3 \n2.2 \nCurrency-in-circulation (CIC) and Deposits at the CBN ................................................................. 6 \n2.3 \nMoney Market Developments ...................................................................................................... 7 \n2.3.1 \nInterest Rate Developments ................................................................................................. 7 \n2.3.2 \nCommercial Papers (CPs) ...................................................................................................... 9 \n2.3.3 \nBankers’ Acceptances (BAs) .................................................................................................. 9 \n2.3.4 \nOpen Market Operations ...................................................................................................... 9 \n2.3.5 \nPrimary Market ..................................................................................................................... 9 \n2.3.6 \nBonds Market ...................................................................................................................... 10 \n2.3.7 \nCBN Standing Facilities ........................................................................................................ 10 \n2.4 \nDeposit Money Banks’ Activities ................................................................................................. 11 \n2.5 \nCapital Market Developments .................................................................................................... 11 \n2.5.1 \nSecondary Market ............................................................................................................... 11 \n2.5.2 \nNew Issues Market .............................................................................................................. 12 \n2.5.3 \nMarket Capitalization .......................................................................................................... 12 \n2.5.4 \nNSE All-Share Index ............................................................................................................. 12 \n3.0 \nFiscal Operations ........................................................................................................................ 15 \n3.1 \nFederation Account Operations .................................................................................................. 15 \n3.2 \nThe Fiscal Operations of the Three Tiers of Government ........................................................... 18 \n3.2.1 \nThe Federal Government .................................................................................................... 18 \n3.2.2 \nStatutory Allocations to State Governments ...................................................................... 20 \n3.2.3 \nStatutory Allocations to Local Government Councils ......................................................... 20 \n4.0 \nDomestic Economic Conditions .................................................................................................. 21 \n4.1 \nAgricultural Sector ...................................................................................................................... 21 \n4.2 \nAgricultural Credit Guarrantee Scheme Operations ................................................................... 21 \n4.3 \nIndustrial Production .................................................................................................................. 23 \n4.4 \nPetroleum Sector ........................................................................................................................ 25 \n4.5 \nConsumer Prices ......................................................................................................................... 26 \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage iv \nEconomic Report Third Quarter \n2016 \n5.0 \nExternal Sector Developments ................................................................................................... 29 \n5.1 \nForeign Exchange Flows .............................................................................................................. 29 \n5.2 \nNon-Oil Export Earnings by Exporters ......................................................................................... 31 \n5.3 \nSectoral Utilisation of Foreign Exchange .................................................................................... 32 \n5.4 \nForeign Exchange Market Developments ................................................................................... 33 \n5.5 \nGross External Reserves .............................................................................................................. 35 \n6.0 \nGlobal Economic Conditions.. ..................................................................................................... 37 \n6.1 \nGlobal Output.............................................................................................................................. 37 \n6.2 \nGlobal Inflation ............................................................................................................................ 37 \n6.3 \nGlobal Commodity Demand and Prices ...................................................................................... 38 \n6.4 \nInternational Financial Markets .................................................................................................. 38 \n6.5 \nOther International Economic Development and Meetings ....................................................... 39 \n \nText Tables \nTable 1: Growth in Monetary and Credit Aggregates .................................................................................................... 6 \nTable 2: Selected Interest Rates (Percent, Averages) .................................................................................................... 8 \nTable 3: Traded Securities on the Nigerian Stock Exchange (NSE) .............................................................................. 12 \nTable 4: Market Capitalization and All Share Index (ASI) ............................................................................................ 14 \nTable 5: Gross Federation Account Revenue ............................................................................................................... 15 \nTable 6: Components of Gross Oil Revenue ................................................................................................................ 16 \nTable 7: Components of Gross Non-Oil Revenue ........................................................................................................ 17 \nTable 8: Federal Government Fiscal Operations ......................................................................................................... 19 \nTable 9: Disbursement of Credit Under the Commercial Agriculture Credit Scheme ................................................. 22 \nTable 10: Index of Industrial Production and Manufacturing Capacity Utilization Rate ............................................. 25 \nTable 11: Average Crude Oil Prices in the International Oil Market ............................................................................ 27 \nTable 12: Consumer Price Index (November 2009 = 100) ........................................................................................... 28 \nTable 13: Headline Inflation Rate ................................................................................................................................ 28 \nTable 14: Foreign Exchange Flows Through the CBN .................................................................................................. 30 \nTable 15: Demand for and Supply of Foreign Exchange .............................................................................................. 33 \nTable 16: Exchange Rate Movements and Exchange Rate Premium .......................................................................... 34 \nTable 17: Gross External Reserves ............................................................................................................................... 35 \n \nAppendix Tables \nTable A1: Money and Credit Aggregates ....................................................................................................... 41 \nTable A2: Money and Credit Aggregates (Growth Rates) ......................................................................... 42 \nTable A3: Federal Government Fiscal Operations ........................................................................................ 43 \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage v \nEconomic Report Third Quarter \n2016 \nFigures \nFigure 1: Growth Rate of Narrow Money (M1) and Broad Money (M2) ..................................................... 4 \nFigure 2: Growth Rate of Aggregate Domestic Credit to the Economy .................................................. 5 \nFigure 3: Selected DMBs Interest Rates (Average) .......................................................................................... 8 \nFigure 4: Volume and Value of Traded Securities ......................................................................................... 12 \nFigure 5: Market Capitalization and All-Share Index .................................................................................... 13 \nFigure 6: Components of Gross Federally-Collected Revenue ................................................................. 15 \nFigure 7: Gross Oil Revenue and Its Components ......................................................................................... 16 \nFigure 8: Gross Non-Oil Revenue and Its Components ................................................................................ 17 \nFigure 9: Federal Government Retained Revenue ....................................................................................... 19 \nFigure 10: Federal Government Expenditure .................................................................................................. 20 \nFigure 11: Capacity Utilization Rate .................................................................................................................. 23 \nFigure 12: Index of Industrial Production (1990=100) .................................................................................... 24 \nFigure 13: Trends in Crude Oil Prices .................................................................................................................. 26 \nFigure 14: Consumer Price Index ........................................................................................................................ 27 \nFigure 15: Inflation Rate ........................................................................................................................................ 28 \nFigure 16: Foreign Exchange Flows Through the CBN .................................................................................. 30 \nFigure 17: Sectoral Utilisation of Foreign Exchange ...................................................................................... 32 \nFigure 18: Demand for and Supply of Foreign Exchange ........................................................................... 33 \nFigure 19: Average Exchange Rate Movements .......................................................................................... 34 \nFigure 20: Exchange Rate Premium .................................................................................................................. 34 \nFigure 21: Gross External Reserves ..................................................................................................................... 35 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage vi \nEconomic Report Third Quarter \n2016 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 1 \nEconomic Report Third Quarter \n2016 \n1.0 Summary \nThe significant increase in domestic credit (net), foreign assets (net) \nand other asset (net) led to growth in key monetary aggregates in \nthe third quarter of 2016. Broad money supply (M2) and narrow \nmoney supply (M1) grew by 2.1 per cent and 9.0 per cent, \nrespectively, over the levels at end-June 2016. \nThe continued restrictive monetary policy stance of the Bank led to \nthe general increase in banks’ deposit and lending rates in the third \nquarter of 2016. The spread between the weighted average term \ndeposit and maximum lending rates narrowed to 21.09 percentage \npoints at the end of the third quarter of 2016. Similarly, the margin \nbetween the average savings deposit and the maximum lending \nrates narrowed to 23.96 percentage points. The weighted average \ninter-bank call rate rose to 23.42 per cent, reflecting the liquidity \ncondition in the banking system. \nThe total value of money market assets outstanding at the end of \nthe third quarter of 2016, stood at N10,684.44 billion, showing an \nincrease of 2.14 per cent over the level at the end of the second \nquarter of 2016. The development reflected the increase in \ncommercial paper outstanding. Developments on the Nigerian \nStock Exchange (NSE) were bearish in the review quarter. \nShortfall in receipts from oil and non-oil revenue due to persistent low \nprice of crude oil and pipeline vandalism, continued to impact \nnegatively on government revenue. Consequently, at N1,980.95 \nbillion, total federally-collected revenue was lower than both the \nquarterly budget estimate and the preceding quarter’s receipts. \nGross oil and non-oil receipts were both lower than the provisional \nquarterly budget estimate, though receipt from non-oil sources was \nabove the level in the preceding quarter by 87.1 per cent. Federal \nGovernment retained revenue was N922.9 billion, while total \nexpenditure was N1,424.9 billion, resulting in an estimated deficit of \nN502.0 billion in the third quarter of 2016, compared with the \nproportionate quarterly budget deficit of N555.49 billion. \nAgrcultural sector activities increased in the review period due to \nwidespread rain experienced in most parts of the country. Major \nactivities in the Southern and Northern parts of the country were \nharvesting of maize, yam, groundnuts and potatoes, while farmers in \nthe livestock sub-sector, engaged in the breeding of poultry and \nmigration of cattle from the North to the South in search of green \npastures. The end-period inflation rate, on year-on-year and 12-\nmonth moving average basis for the third quarter of 2016, was 17.9 \nper cent and 13.5 per cent, respectively. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 2 \nEconomic Report Third Quarter \n2016 \nWorld crude oil demand and supply were estimated at 95.15 mbd \nand 95.65 mbd, respectively, in the third quarter of 2016. Nigeria’s \ncrude oil production, including condensates and natural gas liquids, \nwas also estimated at an average of 1.48 million barrels per day \n(mbd) or 136.16 million barrels (mb) for the third quarter of 2016. \nCrude oil export was estimated at 1.03 mbd or 94.76 million barrels, \nwhile deliveries to the refineries for domestic consumption was 0.45 \nmbd or 41.40 million barrels in the review quarter. The average price \nof Nigeria’s reference crude, the Bonny Light (370 API), was US$46.44 \nper barrel in the review quarter. \nProvisional data showed that foreign exchange inflow and outflow \nthrough the CBN amounted to US$5.59 billion and US$7.73 billion, \nrespectively, resulting in a net outflow of US$2.14 billion. Foreign \nexchange sales by the CBN to the authorized dealers amounted to \nUS$5.30 billion, while the average exchange rate of the naira vis-à-\nvis the US dollar at the inter-bank market depreciated further to \nN303.16/US$. \nWorld Economic Outlook (WEO) 2016, projected a decline in global \ngrowth to 3.1 per cent in 2016. Growth was, however, estimated to \nrebound next year to 3.4 per cent. Growth in emerging market and \ndeveloping economies is expected to strengthen slightly in 2016 to \n4.2 per cent after five consecutive years of decline. \nOther major international economic developments and meetings of \nimportance to the domestic economy in the review period included: \nthe 2016 meeting of the African Governors of the IMF and World \nBank held at Palais des Congres, Cotonou, Benin Republic from \nAugust 4 - 5, 2016; the 2016 Annual meetings of the Association of \nAfrican Central Banks held in Abuja, Nigeria, from August 15 – 19, \n2016; and the 29th Ordinary Meeting of the Economic and Monetary \nAffairs Committee and the Administration Committee of WAMA held \nat the Riviera Royale Hotel, Conakry, Guinea from July 29 - 30, 2016. \nIn addition, the 33rd meeting of the Committee of Governors of the \nWest African Monetary Zone (WAMZ) was held on 4th August, 2016 \nto deliberate on the Report of the 39th Meeting of the Technical \nCommittee of the WAMZ. Finally, The 31st meeting of the Board of \nGovernors of WAIFEM was held at the Riviera Royale Hotel Conakry, \nGuinea on August 4, 2016. \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 3 \nEconomic Report Third Quarter \n2016 \n2.0 Financial Sector Developments \n2.1 Monetary and Credit Developments \nOn the back of significant increase in both domestic, foreign assets \n(net) and other assets (net), growth in the key monetary aggregates \naccelerated at the end of the third quarter of 2016. Banks’ deposit \nand lending rates trended upward. The value of money market \nassets outstanding increased, due, largely, to the rise in commercial \npaper. Developments on the Nigerian Stock Exchange (NSE) were \nbearish. \nThe persistent low crude oil prices continued to have \nnegative impact on the economy, including rising inflation \nwhich resulted in a restrictive monetary policy stance of the \nmonetary authorities. However, provisional data indicated \nthat growth in the key monetary aggregates accelerated at \nthe end of the third quarter of 2016. On quarter-on-quarter \nbasis, broad money supply (M2), at N22,133.48 billion, grew by \n2.1 per cent, compared with the growth of 5.9 per cent at the \nend of the second quarter of 2016. The growth in M2 was \nattributed to the significant increase in foreign assets (net), \nother assets (net) and domestic credit (net) of the banking \nsystem. \nOver the level at end-December 2015, broad money supply \n(M2) grew by 10.5 per cent, compared with the growth of 10.8 \nper cent at the end of the second quarter. The development \nreflected the 21.9 per cent and 37.0 per cent growth in \naggregate credit and foreign assets of the banking system, \nrespectively. \nNarrow money supply (M1), rose by 9.0 per cent to N9,949.39 \nbillion, compared with 0.9 per cent and 9.3 per cent growth at \nthe end of the second quarter of 2016 and the corresponding \nperiod of 2015, respectively . The development was attributed \nto the 7.1 per cent and 9.4 per cent growth in currency \noutside banks and demand deposits, respectively. Over the \nlevel at end-December 2015, narrow money supply (M1) rose \nby 16.1 per cent, reflecting the 1.5 per cent and 19.1 per cent \nincrease in its currency outside banks and demand deposit \ncomponents, respectively. \nRelative to the level at the end of the second quarter of 2016, \nquasi-money fell by 3.0 per cent to N12,184.09 billion in the \nKey monetary \naggregates grew \nduring Q3 of 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 4 \nEconomic Report Third Quarter \n2016 \nthird quarter, in contrast to the growth of 9.9 per cent \nrecorded in the preceding quarter. The fall in quasi-money \nwas due to a fall in foreign currency deposits of banks. Over \nend-December 2015, quasi money increased by 6.3 per cent, \ncompared with the 9.6 per cent growth at the end of the \npreceding quarter (Fig. 1, Table 1). \nFigure 1: Growth Rate of Narrow Money (M1) and Broad Money (M2)1 \n \nAt N26,341.47 billion, aggregate domestic credit (net) to the \neconomy, on quarter-on-quarter basis, grew by 8.3 per cent, \ncompared with the growth of 7.3 per cent and 0.5 per cent at \nthe end of the preceding quarter and the corresponding \nperiod of 2015, respectively. The growth in aggregate credit \nwas attributed to the increased borrowing by the Federal \nGovernment through the issuance of treasury bills and the \nincreased lending by banks to the private sector. Over the \nlevel at end-December 2015, net domestic credit grew by \n21.9 per cent, compared with the growth of 12.5 per cent and \n11.7 per cent at end-June 2016 and the corresponding period \nof 2015, respectively. The development was attributed to the \nsubstantial growth in net claims on the Federal Government \nand claims on the private sector. \n \n1 QM1 and QM2 represent quarter-on-quarter changes, while CM1 and CM2 represent \ncumulative changes (year-to-date). \n \n-15\n-10\n-5\n0\n5\n10\n15\n20\n25\n-10\n-5\n0\n5\n10\n15\n20\n25\n30\nQ2-14\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nQuarterly (%) \nCumulative (%) \nQM1 (RHS)\nQM2 (RHS)\nCM1 (LHS)\nCM2 (LHS)\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 5 \nEconomic Report Third Quarter \n2016 \nBanking system‟s credit (net) to the Federal Government \nincreased by 29.6 per cent to N3,748.84 billion, in contrast to \nthe decline of 23.5 per cent at the end of the preceding \nquarter. The development reflected the respective increase of \n4.0 per cent and 4.5 per cent in outstanding government bills \nheld by banks and direct loans largely through CBN‟s Ways \nand Means Advances, respectively. Relative to the level at \nend-December 2015, net claims on the Federal Government \ngrew by 29.6 per cent, compared with the 0.00003 per cent \ngrowth at end-June 2016. \nAt N22,592.63 billion, banking system‟s credit to the private \nsector, grew by 5.5 per cent quarter-on-quarter, compared \nwith the growth of 13.5 per cent at end-June 2016. The \ndevelopment was due, mainly, to CBN interventions in critical \nsectors of the economy through the banks. Over the level at \nend-December 2015, banking system‟s credit to the private \nsector grew by 20.7 per cent, compared with the growth of \n14.5 per cent at the end of the preceding quarter. \nFigure 2: Growth Rate of Aggregate Domestic Credit to the Economy \n \nThe continued depreciation of the naira in the second quarter \nof 2016 impacted positively on the foreign assets in the third \nquarter, as net foreign asset holdings of the CBN rose by 13.9 \nper cent. Consequently, foreign Asset (Net) of the banking \nsystem grew by 9.0 per cent (N7,742.28), compared with the \ngrowth of 28.0 per cent at end-June 2016. Over the level at \nend-December 2015, foreign asset (net) increased by 37.0 per \ncent in the third quarter of 2016, compared with the growth of \n-50\n0\n50\n100\n150\n200\n-50\n0\n50\n100\n150\n200\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nQuarterly (%) \nCumulative (%) \nQCP (RHS)\nQCG (RHS)\nQAC (RHS)\nCCP (LHS)\nCCG (LHS)\nCAC (LHS)\nBanking system’s \ncredit to the Federal \nGovernment \nincreased by 29.6 per \ncent at the end of the \nthird quarter of 2016. \nForeign assets (net) \nof the banking \nsystem grew at the \nend of the review \nquarter. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 6 \nEconomic Report Third Quarter \n2016 \n25.7 per cent at the end of the second quarter. The growth \nwas due to the 40.5 per cent increase in the foreign asset \nholdings of the CBN. \nTable 1: Growth in Monetary and Credit Aggregates (Per cent) Over \nPreceding Quarter \nDec-14\nMar-15\nJun-15\nSep-15\nDec-15\nMar-16\nJun-16\nSep-16\nDomestic Credit (Net)\n17.3\n7.7\n3.8\n0.5\n0.4\n4.9\n7.3\n8.3\n Claims on Federal Government (Net)\n-27.3\n89.4\n26.5\n11.0\n3.8\n30.7\n-23.5\n29.6\n Claims on Private Sector\n2.6\n2.5\n1.3\n-0.9\n-0.1\n0.9\n13.5\n5.5\n Claims on Other Private Sector\n2.7\n2.6\n1.6\n-1.3\n-0.2\n-0.4\n13.0\n5.7\nForeign Assets (Net)\n-5.1\n13.9\n-12.3\n-14.6\n11.2\n-1.8\n28.0\n9.0\nOther Assets (Net)\n5.4\n3.9\n-3.1\n7.8\n8.2\n7.1\n25.7\n22.7\nBroad Money Supply (M2)\n0.1\n1.2\n-1.7\n-0.5\n7.0\n2.2\n5.9\n2.1\nQuasi-Money\n6.2\n1.2\n1.0\n-5.7\n-1.0\n-0.3\n9.9\n-3.0\nNarrow Money Supply (M1)\n-8.7\n1.3\n-6.3\n9.3\n19.9\n5.5\n0.9\n9.0\nMemorandum Items:\nReserve Money (RM)\n20.7\n-0.1\n0.7\n-2.7\n0.4\n-0.9\n-6.7\n24.0\n \n2.2 \nCurrency-in-circulation (CIC) and Deposits at CBN \n \nAt N1,794.3 billion, currency-in-circulation rose by 6.1 per cent \nrelative to the level in the second quarter of 2016. The \ndevelopment was due, largely, to the increase in its currency \noutside banks component. \n \nTotal deposits at the CBN amounted to N12,550.63 billion, \nindicating an increase of 19.5 per cent relative to the level at \nthe end of the second quarter. The development reflected \nincrease in all the components of 2016. Of the total deposits at \nCBN, the shares of the Federal Government, Banks and \n„‟Others‟‟ were N5,072.8 (40.4 per cent), N4,864.7 billion billion \n(38.8 per cent) and N2,613.1 billion (20.8 per cent), \nrespectively. \nReserve money (RM) rose by 24.0 per cent to N6,659.01 billion \nat the end of the third quarter of 2016, reflecting an increase \nin both DMBs‟ reserves with the CBN and currency-in-\ncirculation. \n \n \n \n \n \nReserve money (RM) \nrose at the end of \nthe third quarter of \n2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 7 \nEconomic Report Third Quarter \n2016 \n2.3 \nMoney Market Developments \nTo complement the adoption of the flexible foreign exchange \npolicy framework, the Monetary Policy Committee (MPC), at \nits meeting during the quarter, increased the Monetary Policy \nRate (MPR) from 12.00 to 14.00 per cent to moderate inflation \nand provide for positive real returns on investment to attract \nforeign investment. However, the shortfall in the supply of \nforeign exchange impacted on financial market indicators in \nthe third quarter. Furthermore, the Bank directed that foreign \nexchange from remittances be sold to Bureau-De-Change \n(BDC) operators to boost supply. However, these efforts could \nnot signifcinatly increase the supply of foreign exchange in the \nmarket as the naira depreciated further at the parallel market, \nwhile the rate at the official market was largely stable. \n \nProvisional data indicated that the total value of money \nmarket assets outstanding at the end of the third quarter of \n2016 stood at N10,684.44 billion, showing 2.14 per cent \nincrease, compared with the increase of 20.36 per cent at the \nend of the second quarter. The development was attributed, \nmainly, to the significant increase in Commercial Paper. \n \n2.3.1 \n Interest Rate Developments \nThe Monetary Policy Committee (MPC) increased the \nMonetary Policy Rate (MPR) from 12.00 to 14.00 per cent at its \nfirst meeting in the third quarter to moderate inflation, ensure \npositive real returns on investment and attract investors. The \nrestrictive monetary policy stance of the Bank brought about \nliquidity squeeze in the system due to the increase in market \ninterest rates. \n \nAvailable data showed an upward movement in all banks‟ \ndeposit and lending rates in the third quarter of 2016. Similalry, \nthe average term deposit rate rose by 0.75 percentage point \nabove the level in the preceding quarter to 6.16 per cent at \nend-September 2016. The average prime and maximum \nlending rates increased by 0.58 and 0.4 percentage points to \n17.14 per cent and 27.25 per cent, respectively. Consequently, \nthe spread between the weighted average term deposit and \nmaximum lending rates narrowed by 0.34 percentage point to \n21.09 percentage points, at the end of the third quarter of \n2016. The margin between the average savings deposit and \nThe financial market \nwas relatively liquid \nduring the review \nperiod . \nThe spread between \nthe weighted – \naverage term deposit \nand maximum \nlending rates \nnarrowed at the end \nof the third quarter \nof 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 8 \nEconomic Report Third Quarter \n2016 \nthe maximum lending rates contracted by 0.14 percentage \npoint to 23.96 percentage points. With headline inflation at \n17.9 per cent at end-September 2016, the prime lending and \ndeposit rates were negative in real terms, while the maximum \nlending rate was positive in real terms. \nAt the inter-bank funds segment, the weighted average inter-\nbank call rate, which stood at 15.56 per cent at end-June \n2016, rose by 7.86 percentage points to 23.42 per cent, in the \nthird quarter of 2016, due to the tight liquidity condition in the \nbanking system. The Nigeria inter-bank offered rate (NIBOR) for \nthe 30-day tenor rose from 10.04 per cent in the preceding \nquarter to 17.72 per cent in the third quarter of 2016. Similarly, \nthe weighted average rate at the Open-Buy-Back (OBB) \nsegment rose by 4.27 percentage points to 14.85 per cent \n(Fig. 3, Table 2). \nFigure 3: Selected DMBs Interest Rates (Average) \n \n \nTable 2: Selected Interest Rates (Percent, Averages) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nAverage Term Deposits\n8.2\n8.6\n8.5\n7.9\n9.2\n6.1\n5.4\n5.4\n6.2\nPrime Lending\n16.5\n16.3\n16.8\n16.4\n17.2\n16.9\n16.7\n16.6\n17.1\nInterbank\n11.1\n16.0\n15.4\n17.3\n20.5\n1.6\n3.0\n15.6\n23.4\nMaximum Lending\n25.6\n25.8\n26.3\n26.6\n27.0\n27.0\n26.8\n26.9\n27.3\n \n \n \n0.0\n2.5\n5.0\n7.5\n10.0\n12.5\n15.0\n17.5\n20.0\n22.5\n25.0\n0.0\n2.5\n5.0\n7.5\n10.0\n12.5\n15.0\n17.5\n20.0\n22.5\n25.0\n27.5\n30.0\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nPercent per Annum \nPercent per Annum \nPrime\nInterbank\nMaximum\nAverage Term Deposits (RHS)\n \nInterbank call \nrate rose in Q3 \n2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 9 \nEconomic Report Third Quarter \n2016 \n2.3.2 \nCommercial Paper (CP) \nCommercial Paper (CP) outstanding held by banks rose \nsignificantly to N3.1 billion at the end of the third quarter of \n2016, above N0.5 billion at the end of the second quarter of \n2016. The development was due to the rise in investment in CP \nby the banks in the review period. Thus, CP constituted 0.03 \nper cent of the total value of money market assets \noutstanding during the review period, compared with 0.01 per \ncent at the end of the preceding quarter. \n2.3.3 \nBankers’ Acceptances (BAs) \nBAs outstanding increased by 53.23 per cent to N45.60 billion \nfrom N29.76 billion at the end of the preceding quarter. The \ndevelopment was attributed to the increase in investment in \nBAs by the banks during the quarter. Consequently, BAs \naccounted for 0.43 per cent of the total value of money \nmarket assets outstanding, at the end of the third quarter of \n2016, compared with 0.28 per cent at end-June 2016. \n \n2.3.4 Open Market Operations \nIn furtherance of the restrictive policy stance, the Bank \ncontinued to deploy different monetary policy tools to \nachieve its objectives. There were regular interventions \nthrough Open Market Operations (OMO) involving the sale of \nCentral Bank of Nigeria (CBN) bills for liquidity management. \nInstruments with maturities ranging from 100 to 364 days were \nissued between July and September 2016. Total sales was \nN3,481.31 billion, while total subscription was N4,225.76 billion. \nThe bid rates ranged from 12.50 per cent to 20.00 per cent, \nwhile the stop rates ranged from 12.50 per cent to 19.00 per \ncent. Total sales included the N420.00 billion allotted through \nthe two-way quote trading platform. This translated to a net \nwithdrawal of N2,315.09 billion. \n2.3.5 \nPrimary Market \nAt the government securities market, NTBs and long-term (FGN \nBonds) debt instruments were issued at the primary market on \nbehalf of the Debt Management Office (DMO). NTBs of 91- \n182- and 364-day tenors, amounting to N1,066.55 billion, \nN2,550.72 billion and N1,239.55 billion were offered, subscribed \nto and alloted, respectively, in the third quarter of 2016. The \nbid rates ranged from 7.00 per cent to 20.00 per cent, 9.00 per \ncent to 20.49 per cent, and 10.50 per cent to 25.35 per cent, \nInvestment in CP by \nbanks rose in the \nthird quarter of \n2016. \nDMBs’ holdings of \nBAs increased \nduring Q3 of 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 10 \nEconomic Report Third Quarter \n2016 \nrespectively, for the 91-, 182- and 364- day tenors, while the \nstop rates ranged from 9.98 per cent to 15.44 per cent, 12.24 \nper cent to 18.06 per cent and 14.99 per cent to 18.50 per \ncent, respectively, for the different tenors. \n2.3.6 \nBonds Market \nTranches of the 5-, 10- and 20-year FGN Bonds were re-\nopened in addition to a new issue of the 5-year bond offered \nfor sale in the third quarter of 2016. The term to maturity of the \nbonds ranged from 4 years 10 months to 19 years, 8 months. \nTotal amount offered, subscribed to and allotted were N350.0 \nbillion, N604.1 billion and N335.0 billion, respectively. The \nmarginal rates for the 5-year bond ranged from 14.5000 per \ncent to 15.1430 per cent, 14.9000 per cent to 15.5357 per cent \nfor the 10-year bond and 14.9830 per cent to 15.5974 per cent \nfor the 20-year. The marginal rates for all the tenors ranged \nfrom 14.50 per cent to 15.59 per cent. The sum of N448.00 \nbillion FGN Bonds matured in the third quarter. \n \n2.3.7 \nCBN Standing Facilities \nDeposit money banks and merchant banks continued to \naccess the Standing Facility window to smoothen their liquidity \nneeds either through lending (SLF) from the CBN or depositing \n(SDF) their excess reserves at the end of each business day. \nThere was a reversal in the trend of standing facilities \npatronage, with more requests for SLF than the SDF in the \nreview period. Applicable rates for the SLF and SDF stood at \n16.00 per cent and 9.00 per cent, respectively. \nTotal request for Standing Lending Facility (including the Intra-\nday lending facilities (ILF) converted to overnight repo) \namounted to N 11,360.51 billion with interest income of N8.78 \nbillion, compared with SLF of N4,518.78 billion and interest \nincome of N2.64 billion in the preceding quarter. Penal rate of \nan additional 500 basis points was charged on institutions that \nfailed to redeem their lending as at when due. \nTotal standing deposit facility (SDF) granted during the review \nperiod was N2,431.95 billion with a daily average of N45.04 \nbillion, compared with N 6,085.58 billion in the second quarter \nof 2016. The interest payment on SDF in the third quarter stood \nat N0.87 billion, compared with N 1.76 billion in the preceding \nquarter. \nSubscription for FGN \nBonds of various \nmaturities were re-\nopened during the \nthird quarter of 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 11 \nEconomic Report Third Quarter \n2016 \n2.4 \nDeposit Money Banks’ Activities \nThe total assets and liabilities of the commercial banks stood \nat N31,792.04 billion at the end of the third quarter of 2016, \nrepresenting an increase of 1.6 per cent over the level at the \nend of the the second quarter of 2016. The funds were \nsourced, mainly, from drawdown on reserves, and increase in \ncapital accounts and foreign liabilities. The funds were used, \nmainly, to reduce time, savings and foreign currency deposits, \ndemand deposit and unclassified liabilities as well as to \nincrease claims on the central government. \nAt N21,485.13 billion, banks‟ credit to the domestic economy, \nrose by 5.3 per cent, relative to the level at end-June 2016. \nThe development was attributed to the increase in claims on \nboth the private sector and the Federal Government, in the \nreview quarter. \nCentral Bank‟s credit to the commercial banks fell by 17.9 per \ncent to N855.57 billion, at the end of the review quarter. Total \nspecified liquid assets of the banks stood at N6,782.09 billion, \nrepresenting 37.0 per cent of their total current liabilities. At \nthat level, the liquidity ratio expanded by 8.13 percentage \npoints above the level at the end of the preceding quarter \nand was 7.0 percentage points above the stipulated minimum \nratio of 30.0 per cent. The loans-to-deposit ratio, at 81.05 per \ncent, was 6.18 percentage points, above the level at the end \nof the preceding quarter and 1.1 percentage points above \nthe prescribed maximum of 80.0 per cent. \n2.5 \nCapital Market Developments \n2.5.1 \nSecondary Market \nThe market was characterised by investors‟s low sentiments, \nhigh volatility and poor performance by listed companies in \nthe review period. Hence, developments on the Nigerian \nStock Exchange (NSE) were generally bearish. Total volume \nand value of traded securities declined by 32.3 per cent and \n8.7 per cent to 18.3 billion shares and N149.1 billion in 211,065 \ndeals, compared with 27.04 billion shares worth N163.36 billion \nin 251,646 deals recorded in the second quarter of 2016. The \nFinancial Services Industry led the activity chart (measured by \nvolume) with 14.84 billion shares worth N77.98 billion in 117,547 \ndeals, compared with 22.4 billion shares worth N105.5 billion in \n154,827 deals in the second quarter of 2016. The banking sub-\nLiquidity ratio in Q3 \nwas \nabove \nthe \nstipulated \nminimum, \nwhile the Loan-to-\ndeposit \nratio \nwas \nabove the prescribed \nmaximum. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 12 \nEconomic Report Third Quarter \n2016 \nsector was the most active (measured by volume). \nFigure 4: Volume and Value of Traded Securities \n \nTable 3: Traded Securities on the Nigerian Stock Exchange (NSE) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nVolume (Billion)\n26.8\n28.9\n25.9\n24.7\n23.26\n18.4\n34.9\n27\n18.3\nValue (N Billion)\n441.25\n316.99\n279.1\n277.9\n219.76\n172.6\n148.9\n163.4\n149.1\n \n2.5.2 \nNew Issues Market/Supplementary Listings \nThere were no new or supplementary listings in the review quarter. \n \n2.5.3 \nMarket Capitalization \nAggregate market capitalization for all the listed securities \n(Equities and Bonds), as at September 29, 2016 stood at \nN16.39 trillion, indicating a decline of 5.2 per cent below the \nlevel at the end of the second quarter of 2016. Similarly, \nmarket capitalization for the listed equities decreased by 4.3 \nper cent below the level in the second quarter of 2016 to \nclose at N9.7 trillion at the end of the review quarter. Listed \nequities accounted for 59.4 per cent of the aggregate market \ncapitalisation compared, with 58.9 per cent at the end of the \npreceding quarter. \n \n2.5.4 NSE All-Share Index \nThe All-Share Index, which opened at 29,597.79, at the \nbeginning of the period, closed at 28,335.40 and represented \na decrease of 2.7 per cent. With the exception of the NSE-Oil \nand Gas and NSE Consumer Goods indices, which increased \n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\n500\n0\n5\n10\n15\n20\n25\n30\n35\n40\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nValue (N billion) \nVolume (Billion) \nVolume of traded securities (LHS)\nValue of securities (RHS)\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 13 \nEconomic Report Third Quarter \n2016 \nby 3.7 per cent and 2.9 per cent to 336.03 and 757.40, \nrespectively, at end-September 2016, as well as the NSE AseM, \nwhich closed flat at 1,213.68, all other sectoral indices fell \nbelow their levels at the end of the preceding quarter. The \nNSE Banking, NSE Insurance, NSE Lotus Islamic, NSE Industrial, \nNSE Pension and NSE Premium indices fell by 8.1 per cent, 7.5 \nper cent, 2.3 per cent, 14.6 per cent, 4.9 per cent, and 4.9 per \ncent to close at 274.77, 129.58, 1914.19, 1834.31, 839.08 and \n1772.51, respectively. \n Figure 5: Market Capitalization and All-Share Index \n \n \nTable 4: Market Capitalization and All Share Index (NSE) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nMarket Capitalization (N trillion)\n18.90\n16.90\n16.30\n17.02\n17.01\n17.00\n15.88\n17.28\n16.39\nAll-Share Index (Equities)\n41,210.10\n \n34,657.15\n \n31,744.82\n \n33,456.86\n \n31,217.77\n \n26,871.24\n \n27,385.69\n \n29,597.79\n \n28,335.40\n \n \n \n \n \n \n \n \n \n \n \n \n -\n 5,000.00\n 10,000.00\n 15,000.00\n 20,000.00\n 25,000.00\n 30,000.00\n 35,000.00\n 40,000.00\n 45,000.00\n14\n14.5\n15\n15.5\n16\n16.5\n17\n17.5\n18\n18.5\n19\n19.5\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nIndex \nN billion \nMarket Capitalization (LHS)\nAll-Share Index (RHS)\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 14 \nEconomic Report Third Quarter \n2016 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 15 \nEconomic Report Third Quarter \n2016 \n3.0 \nFiscal Operations \n3.1 \nFederation Account Operations \nFederally-collected revenue in the third quarter of 2016, at \nN1,980.95 billion, was lower than the quarterly budget2 \nestimate of N2,378.12 billion by 16.7 per cent. However, it was \nhigher than the receipts in the second quarter of 2016 by 70.9 \nper cent. The decline in federally-collected revenue (gross) \nrelative to the quarterly budget estimate was attributed to \nthe shortfall in receipts from both oil and non-oil sources (Fig. \n6, Table 6). \nFigure 6: Components of Gross Federally Collected Revenue \n \nTable 5: Gross Federation Account Revenue (N billion) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nFederally-collected revenue (Gross) \n2783.46\n2210.81\n2055.64\n1397.20\n1911.71\n1547.96\n1268.59\n1159.05\n1980.95\n Oil Revenue\n1723.11\n1466.22\n1210.77\n839.02\n949.45\n830.81\n666.13\n537.19\n817.48\n Non-Oil Revenue\n1060.30\n744.58\n844.87\n558.19\n956.32\n717.16\n602.46\n621.86\n1163.46\n \nGross oil receipts, at N817.48 billion or 41.3 per cent of the total \nrevenue, was lower than the quarterly budget estimate by 7.5 \nper cent. It was however, higher than the receipts in the \nsecond quarter of 2016 by 52.2 per cent. The decline in oil \nrevenue relative to the quarterly budget estimate was \n \n2 Quarterly Budget is arrived at by prorating the Annual budget into four equal proportions. \n0\n500\n1000\n1500\n2000\n2500\n3000\nQ2-14\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nOil Revenue Gross\nNon-Oil Revenue\nGross federally -\ncollected revenue \nrose by 70.9 per \ncent above the \nlevel \nin \nthe \nsecond quarter of \n2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 16 \nEconomic Report Third Quarter \n2016 \nattributed to the fall in receipts from crude oil/gas export, \nowing to the drop in the price of crude oil in the international \nmarket as well as the shut-ins and shut-downs at some NNPC \nterminals, arising from vandalism of oil infrastructure in the \nNiger Delta region (Fig. 7, Table 7). \n \nFigure 7: Gross Oil Revenue and Its Components \n \nTable 6: Components of Gross Oil Revenue (N billion) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nOil Revenue Gross\n1723.11\n1466.22\n1210.77\n839.02\n949.45\n830.81\n666.13\n537.19\n817.48\nCrude oil/Gas Sales\n470.99\n331.18\n274.09\n215.40\n196.29\n212.86\n82.43\n112.54\n115.95\nPPT/Royalties\n916.31\n809.89\n573.30\n325.03\n495.39\n388.66\n314.04\n212.78\n392.38\nOthers\n335.81\n325.15\n363.38\n298.59\n257.78\n229.28\n269.66\n211.86\n309.15 \nNon-oil receipts (gross), at N1,163.46 billion or 58.7 per cent of \ntotal revenue, also fell below the quarterly budget estimate by \n22.1 per cent, but was above the level in the second quarter \nof 2016 by 87.1 per cent. The fall in non-oil revenue relative to \nthe quarterly budget estimate was due, largely, to the fall in \nreceipts from VAT, Independent Revenue of the Federal \nGovernment and Customs Special Levies (Federation Account \ncomponent), during the review quarter (Fig. 3, Table 3). \n -\n 200\n 400\n 600\n 800\n 1,000\n 1,200\n 1,400\n 1,600\n 1,800\n 2,000\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nN billion \nOthers\nPPT/Royalties\nCrude oil/Gas Sales\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 17 \nEconomic Report Third Quarter \n2016 \nFigure 8: Gross Non-Oil Revenue and its Components\n \nTable 7: Components of Gross Non-Oil Revenue (N Billion) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\n Non-Oil Revenue\n1025.89\n744.58\n844.87\n558.19\n962.25\n717.15\n602.46\n621.86\n1163.46\n Value-Added Tax (VAT)\n193.39\n192.88\n195.66\n203.18\n202.11\n177.78\n196.57\n194.61\n210.35\n Companies Income Tax & Other Taxes\n422.60\n202.38\n174.94\n159.36\n415.67\n279.13\n176.26\n171.71\n453.74\n Customs & Excise Duties\n151.53\n156.80\n138.08\n127.59\n138.83\n141.67\n135.51\n106.54\n150.15\n Others/1\n258.37\n192.52\n336.19\n68.06\n205.64\n118.57\n94.12\n149.00\n349.22 \n1/ Include FGN Independent Revenue, Education Tax, NITDF & Customs Federation/Non-Federation \nAccount Levies (Port, Sugar, ETLS, Steel, CISS & Cement Levies) \nA net sum of N948.26 billion was retained in the Federation \nAccount after the statutory deductions and transfers of \nN481.53 billion and N551.16 billion, respectively, from the gross \nfederally-collected revenue. This amount was distributed \namong the three tiers of government and the 13.0% Derivation \nFund as follows: Federal Government, N473.73 billion; States \nN240.28 billion; and local governments, N185.25 billion. The \nbalance of N49.00 billion was allocated to the 13.0% \nDerivation Fund for distribution among the oil-producing \nstates. In addition, the Federal Government received N30.29 \nbillion from the VAT Pool Account, while the state and local \ngovernments received N100.97 billion and N70.68 billion, \nrespectively. The sum of N9.93 billion was received from the \nMinistry of Mines and Steel Development (MMSD) in July 2016 \nand shared as follows: Federal Government, N4.55 billion; \nStates, N2.31 billion; and local governments, N1.78 billion, while \nthe balance of N1.29 was distributed among the mineral \n -\n 200\n 400\n 600\n 800\n 1,000\n 1,200\n 1,400\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nN billion \n Others\n Customs & Excise Duties\n Companies Income Tax & Other Taxes\n Value-Added Tax (VAT)\nThe \nsum \nof \nN948.26 \nbillion \nout of the gross \nfederally collected \nrevenue \nwas \ndistributed among \nthe three tiers of \ngovernment \nand \n13.0% Derivation \nFund \nfor \noil \nproducing states. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 18 \nEconomic Report Third Quarter \n2016 \nproducing states as 13.0% Derivation Fund. \nThe sum of N269.23 billion was also distributed as Exchange \nGain among the three tiers of government and the 13% \nDerivation Fund as follows: Federal Government (N130.59 \nbillion); \nState \nGovernments \n(N66.23 \nbillion); \nLocal \nGovernments (N51.06 billion) and 13% Derivation Fund (N21.34 \nbillion). Similarly, the sum of N85.17 billion was drawn down in \nthe quarter from the Excess Crude Account for distributiuon \namong the three tiers of government and 13% Derivation \nFund. The Federal Government received N66.21 billion, state \ngovernments received N8.14 billion and local governments \nreceived N6.27 billion, while the sum of N4.55 billion was \ndistributed among the oil-producing states as 13% Derivation \nFund. \nFurthermore, the sum of N18.99 billion was received by the \nFederal Government being refund of indebtedness by the \nNNPC to the Federal Governmnt in the third quarter of 2016. \nThus, the total statutory and VAT revenue allocation to the \nthree tiers of government in the third quarter of 2016 \namounted to N1,534.88 billion, compared with the quarterly \nbudget estimate of N1,485.70 billion and N879.35 billion \nreceived in the second quarter of 2016. \n3.2 \nThe Fiscal Operations of the Three Tiers of \nGovernment \n \n3.2.1 \nThe Federal Government \n \nProvisional data indicated that the Federal Government \nretained revenue for the third quarter of 2016 amounted to \nN922.86 billion. This was below the quarterly budget estimate \nby 8.8 per cent. It was, however, higher than the receipts in \nthe preceding quarter by 36.1 per cent. Of the total revenue, \nFederation Account accounted for 51.3 per cent, while \nFederal Government Independent Revenue, Exchange Gain, \n„Other Oil Revenue‟, VAT, and NNPC Refund accounted for \n21.4, 14.2, 7.7, 3.3 and 2.1 per cent, respectively (Fig. 9, Table \n9). \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 19 \nEconomic Report Third Quarter \n2016 \nFigure 9: Federal Government Retained Revenue \n \nTable 8: Federal Government Fiscal Operations (N Billion) \nQ2-14\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nRetained Revenue\n936.7\n988.6\n839.8\n1027.0\n538.6\n1044.9\n802.6\n570.5\n677.9\n922.9\nExpenditure\n949.0\n1252.4\n1164.0\n1156.6\n1024.6\n1176.2\n1538.5\n1119.0\n1768.9\n1424.9\nOverall Balance: Surplus(+)/Deficit(-)\n-12.4\n-263.8\n-324.2\n-129.5\n-485.9\n-131.3\n-735.8\n-548.4\n-1091.0\n-502.1\n \nAt N1,424.91 billion, the estimated Federal Government \nexpenditure for the third quarter of 2016 was lower than the \nquarterly budget estimate of N1,567.93 billion by 9.1 per cent. \nIt was also lower than the level in the preceding quarter by \n19.4 per cent. This development relative to the quarterly \nbudget estimate was attributed, mainly, to the decrease in \ncapital expenditure in the period under consideration. A \nbreakdown of the total expenditure showed that the recurrent \ncomponent accounted for 76.8 per cent, while capital and \nstatutory transfers accounted for 16.0 and 7.2 per cent, \nrepectively (Fig. 5). A further breakdown of the recurrent \nexpenditure \nshowed \nthat \nthe \nnon-debt \ncomponent \naccounted for 77.5 per cent, while debt service payments \naccounted for the balance of 22.5 per cent. \nThe fiscal operations of the Federal Government, therefore \nresulted in a deficit of N502.05 billion, which was 9.6 per cent \nlower than the quarterly budget deficit of N555.49 billion. \nFederation \nAccount \n51.3% \nVAT Pool \nAccount \n3.3% \nFGN Independent \nRevenue \n21.4% \nNNPC Refund \n2.1% \nExchange Gain \n14.2% \nOthers \n7.7% \nFiscal \noperations \nof the FG resulted \nin an estimated \ndeficit of N502.05 \nbillion in Q3 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 20 \nEconomic Report Third Quarter \n2016 \nFigure 10: Federal Government Expenditure \n \n3.2.2 \nStatutory Allocations to State Governments \n \nTotal allocation to state governments from the Federation \nAccount, including 13.0% Derivation Fund and the VAT Pool \nAccount stood at N494.48 billion during the review quarter. \nThis was lower than the quarterly budget estimate by 5.0 per \ncent, but higher than the level in the preceding quarter by \n58.3 per cent. Further breakdown showed that receipts from \nthe Federation Account was N393.51 billion (79.6 per cent), \nwhile VAT contributed N100.97 billion (20.4 per cent). The share \nof Federation Account was 79.8 per cent higher than the level \nin the preceding quarter. Similarly, receipts from the VAT Pool \nAccount rose by 8.1 per cent above the level in the \npreceding quarter. \n3.2.3 \nStatutory Allocations to Local Government Councils \n \nProvisional allocations to local governments \nfrom the \nFederation and VAT Pool Accounts in the third quarter of 2016 \nstood at N315.32 billion. This was below the quarterly budget \nestimate by 8.7 per cent but exceeded the level in the \npreceding quarter by 63.2 per cent. Of the total amount, \nallocation from the Federation Account was N244.65 billion \n(77.6 per cent), while VAT Pool Account accounted for the \nbalance of N70.68 billion (22.4 per cent). \n \n \n Recurrent, \n76.8% \n Capital, 16.0% \n Transfers, 7.2% \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 21 \nEconomic Report Third Quarter \n2016 \n4.0 \nDomestic Economic Conditions \nThere was improvement in the activities of the agrcultural sector in \nthe third quarter due to widespread rain experienced in most parts \nof the country. Farmers in the Southern part of the country engaged \nin the early harvest of maize and yam, while farmers in the Northern \nand central states engaged in the harvest of potatoes and \ngroundnuts. Livestock farmers were involved in the breeding of \npoultry and migration of cattle from the North to the South in search \nof green pastures. Crude oil production was estimated at 1.48 million \nbarrels per day (mbd) or 136.16 million barrels, for the quarter. End-\nperiod inflation rate for the third quarter of 2016, on year-on-year \nand 12-month moving average basis, were 17.9 per cent and 13.5 \nper cent, respectively. \n4.1 \nAgricultural Sector \nThere was improvement in the activities of the agricultural \nsector in the third quarter of 2016 due to impressive rainfall \nexperienced in most part of the country. Analysis of the \nStandardized Precipitation Index (SPI) showed that there was \nclement weather condition for farming. However, there were \ncases of flash floods along the Benue and Niger rivers, the \nconfluence at Lokoja, and at convergence areas into the \nAtlantic Ocean in the Niger Delta area. \nFarming activities in the South centered on early harvest of \nyams and maize, while farmers in the Central and Northern \nstates were mainly involved in the harvest of potatoes and \ngroundnuts. In the livestock sub-sector, farmers engaged in \nbreeding of poultry and migration of cattle from the Northern \nstates to the South in search of green pastures. However, \nactivities of insurgents continued to impact adversely on \nlivelihoods and functioning of markets in Northern and Central \nBorno as well as south-eastern Yobe. The development \nhampered humanitarian effort, especially provision of food to \nthe displaced households, thereby contributing to increased \nprices of staple foods in those areas. \n4.2 \nAgricultural Credit Guarantee Scheme \nIn terms of credit to the farmers, the sum of N2,146.2 million \nwas guaranteed to 17,851 farmers under the Agricultural \nCredit Guarantee Scheme (ACGS) in the third quarter of 2016. \nThis amount represented an increase of 7.6 per cent above \nthe level in the second quarter of 2016, but was a decrease of \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 22 \nEconomic Report Third Quarter \n2016 \n26.1 per cent below the level in the corresponding period of \n2015. Sub-sectoral analysis showed that food crops obtained \nthe largest share of N1,437.4 million (67 per cent) guaranteed \nto 14,130 beneficiaries, livestock got N297.8 million (13.9 per \ncent) guaranteed to 1,328 beneficiaries, cash crops had \nN152.4 million (7.1 per cent) guaranteed to 887 beneficiaries, \nwhile \nfisheries received \nN131.7 million \n(6.1 per cent) \nguaranteed to 491 beneficiaries. The Mixed Crop sub-sector \nreceived N105.3 million (4.9 per cent) guaranteed to 822 \nbeneficiaries, while „Others‟ received a total of N21.6 million \n(1.0 per cent) guaranteed to 193 beneficiaries. Analysis by \nstate showed that 34 states and the Federal Capital Territory \nbenefited from the Scheme in the period under review, with \nthe highest and lowest sums of N265.0 million (12.4 per cent) \nand N4.6 million (0.22 per cent) guaranteed to Ogun and \nBauchi States, respectively. \nAs at September 20, 2016, total amount released by the CBN \nunder the Commercial Agriculture Credit Scheme (CACS) \nfrom inception to the participating banks, for disbursement, \nstood at N386.04 billion, for 474 projects(Table 10). \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Table 9: Disbursement of Credit Under the Commercial Agriculture Credit Scheme (CACS)\nS/N\nParticipating Banks\nAmt Disbursed (N billion)\nNumber of Projects/State Governments\n1\nAccess Bank Plc\n18.63\n20\n2\nCitibank Plc\n3.00\n2\n3\nDiamond Baqnk Plc\n4.73\n20\n4\nECOBANK\n6.38\n10\n5\nFCMB Plc.\n11.37\n22\n6\nFidelity Bank Plc \n15.91\n13\n7\nFirst Bank of Nigeria Plc \n41.89\n97\n8\nGTBank Plc\n25.70\n21\n9\nHeritage Bank Plc\n6.81\n14\n10\nKeystone Bank \n3.55\n7\n11\nJaiz Bank Plc\n1.00\n1\n12\nSkye Bank Plc\n11.77\n9\n13\nStanbic IBTC Bank \n21.99\n41\n14\nSterling Bank Plc\n29.68\n32\n15\nUnion Bank Nigeria PLC\n22.91\n31\n16\nUnited Bank for Africa (UBA) Plc\n57.76\n41\n17\nUnity Bank Plc \n24.33\n26\n18\nWema Bank\n1.82\n10\n19\nZenith Bank\n76.84\n57\nTOTAL\n386.0\n474\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 23 \nEconomic Report Third Quarter \n2016 \n4.3 \nIndustrial Production \nPersistent supply-demand imbalance in the foreign exchange \nmarket continued to adversely impact business confidence \nand business transactions in the review period. Consequently, \nactivities in the industrial sector decreased, compared with \nthe levels in the second quarter of 2016, reflecting the decline \nin the placement of new orders, output and employment \nwithin the sector. \nAt 108.5 (2010=100), the estimated index of industrial \nproduction fell by 0.02 per cent and 0.12 per cent below the \nlevels in the second quarter of 2016 and the corresponding \nperiod of 2015, respectively. The decrease also reflected the \ndecline in activities in manufacturing and mining subsectors, \nwhich more than offset the marginal improvement in the \nelectricity sub-sector. \nThe estimated index of manufacturing production in the third \nquarter of 2016, at 186.6 (2010=100), showed a marginal \ndecrease of 0.01 and 0.03 per cent relative to the levels in the \nsecond quarter of 2016 and the corresponding period of 2015, \nrespectively. Capacity utilization was estimated at 48.4 per \ncent, \nindicating \na \n2.3 \npercentage \npoints \ndecrease, \noccasioned by a fall in aggregate demand. The development \nwas exacerbated by the depreciation of the naira exchange \nrate which contributed to increased production cost, hence \nthe fall in output (Fig.11). \nFigure11: Manufacturing Capacity Utilization Rate \n \n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nPercent \nIndustrial activities \nfell in the review \nquarter due to \nreduced activities in \nall sub-sectors. \nIndustrial capacity \nutilization \nwas \nestimated to have \ndeclined \nby \n2.3 \npercentage points \nduring the review \nquarter. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 24 \nEconomic Report Third Quarter \n2016 \nAt 62.7 (1990=100), the estimated index of mining production \nin the third quarter of 2016, fell by 0.1 and 0.3 per cent relative \nto the levels attained in the preceding quarter and the \ncorresponding period of 2015, respectively. The decrease in \nmining activities was attributed, mainly, to he fall in crude oil \nand gas production. \nAt 3,307.15 MW/h, estimated average electricity generation in \nthe third quarter of 2016 rose by 25.4 per cent, compared with \nthe level attained in the second quarter of 2016. Increased \ngeneration from the various hydro-power plants, due to \nwidespread rain in the country, accounted for the increase in \nelectricity generation. \nAverage estimated electricity consumed, at 2,853 MW/h also \nrose by 22.9 per cent, compared with the level attained in the \nsecond \nquarter \nof \n2016. \nThe \nincrease \nin \nelectricity \nconsumption was attributed to rise in generation (Fig. 12, Table \n11). \nFigure 12: Index of Industrial Production (2010=100) 3\n0\n50\n100\n150\n200\n250\nQ3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16\nIndex\nMining\nAll Sectors\nManufacturing\n \n \n \n \n \n \n3 Index measurement at (2010=100) from first quarter15 \nAverage electricity \ngeneration and \nconsumption rose \nduring the review \nquarter. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 25 \nEconomic Report Third Quarter \n2016 \nTable 10: Index of Industrial Production and Manufacturing Capacity Utilization Rate \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nAll Sectors (1990=100)\n139.00\n123.60\n139.45\n110.20\n112.50\n118.80\n111.10\n110.30\n108.50\n Manufacturing\n108.4\n108.98\n191.2\n185.1\n191.8\n185.5\n190.2\n188.9\n186.6\n Mining\n147.5\n147.59\n101.1\n87.4\n83.1\n94.5\n75\n72\n62.7\nCapacity Utilization (%)\n59.88\n60.30\n60.50\n59.5\n54.90\n53.70\n52.70\n50.70\n48.40\n \n4.4 \nPetroleum Sector \nActivities of militants in the oil producing areas, which has led \nto shut-ins and shut-downs at some of Nigeria‟s crude oil \nproduction terminals, continued to impact negatively on the \nnation‟s crude oil production. Consequently, Nigeria‟s crude \noil production, including condensates and natural gas liquids, \naveraged 1.48 mbd or 136.16 million barrels (mb) in the review \nquarter. This represented a decrease of 0.06 mbd or 4.1 per \ncent, compared with 1.54 mbd or 140.14 mb recorded in the \nprevious quarter. \nCrude oil export stood at 1.03 mbd or 94.76 mb, representing \na decrease of 5.8 per cent compared with 1.09 mbd or 99.19 \nmb recorded in the preceding quarter. The development was \nas a result of the sustained sabotage on oil pipelines, despite \non-going efforts at repairing the leakages and negotiations \nwith the militants in the Niger Delta region. Allocation of crude \noil for domestic consumption was 0.45 mbd or 41.40 million \nbarrels in the review quarter. \nThere were positive sentiments regarding the recent plans by \nRussia and Saudi Arabia to cooperate with other OPEC and \nkey non-OPEC countries towards stabilisation of the oil markets \nin the review period. In addition, data from the EIA showed a \nmassive drawdown on crude oil stocks of the US due to the \neffect of the hurricane that disrupted shipments in the Gulf of \nMexico. The effect of the development was a 1.9 per cent \nincrease in the price of Nigeria‟s reference crude, the Bonny \nLight (37º API), from estimated average of US$46.44 per barrel \nin the preceding quarter to US$47.33 per barrel in the review \nquarter. The average prices of other competing crudes, \nnamely the The UK Brent at US$45.47/b and the Forcados at \nUS$46.27/b, exhibited a similar trend as the Bonny Light. \nHowever, the WTI at US$44.43/b, declined by 1.7 per cent \nrelative to the average price in the preceding quarter. \nCrude oil and \nnatural gas \nproduction \ndecreased in the \nthird quarter of \n2016. \nCrude oil export \ndecreased in Q3 \n2016. \nAverage crude oil \nprices, including \nNigeria’s Bony \nLight (37o API) rose \nin the international \ncrude oil market in \nQ3 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 26 \nEconomic Report Third Quarter \n2016 \nThe average price of OPEC basket of eleven selected crude \nstreams was US$42.86/b in the third quarter of 2016, indicating \na 1.1 per cent increase above the level in the preceding \nquarter (Fig. 13, Table 12). \nFigure13: Trends in Crude Oil Prices\n \nTable 11: Average Crude Oil Prices in the International Oil Market \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nBonny Light\n103.04\n77.74\n56.73\n62.22\n51.15\n44.08\n34.39\n46.44\n47.33\nOPEC Basket\n100.86\n7.36\n50.3\n59.31\n48.14\n39.9\n30.16\n42.38\n42.86\n \n \n4.5 \nConsumer Prices4 \nPersistent depreciation of the naira exchange rate and the \nresultant pass-through to general prices, fuelled inflationary \npressures in the review period. The pressures reflected mostly \nthe significant increase in the prices of food and energy. The \nall-items composite Consumer Price Index (CPI), at the end of \nthe third quarter of 2016, was 208.0 (November 2009=100), \nrepresenting an increase of 3.1 per cent and 17.9 per cent, \nabove the levels in the second quarter of 2016 and the \n \n4 New CPI with November 2009 = 100 as base and new weight based on the 2003/2004 Nigeria \nLiving Standard Survey (NLSS) was released by the National Bureau of Statistics (NBS) ON 18TH \nOctober 2010. \n0\n20\n40\n60\n80\n100\n120\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nUS$ per barrel \nBonny Light\nOPEC Basket\nThe general price \nlevel rose in Q3, \ncompared with the \nlevel in the second \nquarterof 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 27 \nEconomic Report Third Quarter \n2016 \ncorresponding quarter of 2015, respectively. The development \nwas driven, largely, by the increase in the prices of food and \nnon-alcoholic beverages; housing, water, electricity, gas and \nother fuel; clothing and footwear; transport; education; \nfurnishing, household equipment and maintenance; and \nhealth. \nThe urban all-items CPI at the end of the third quarter of 2016 \nwas 209.6 (November 2009=100), indicating an increase of 3.0 \nand 19.4 per cent, above the levels in the second quarter of \n2016 and the corresponding period of 2015, respectively. \nSimilarly, the rural all-items CPI, at 206.7 (November 2009=100), \nrepresented increase of 3.1 per cent and 16.4 per cent above \nthe levels at end-June 2016 and the corresponding period of \n2015, respectively (Fig. 14, Table 13). \nThe composite food index (with a weight of 50.7 per cent) was \n212.0 per cent, representing an increase of 3.2 per cent, \ncompared with the 205.39 per cent at the end of the \npreceding quarter. The development was attributed to the \nincrease in the prices of farm produce (vegetables, yam, \npotatoes, and other tubers, rice, millet, and fruits) and \nprocessed food. \nFigure 14: Consumer Price Index \n \n \n \n \n \n \n \n155\n157.5\n160\n162.5\n165\n167.5\n170\n172.5\n175\n177.5\n180\n182.5\n185\n187.5\n190\n192.5\n195\n197.5\n200\n202.5\n205\n207.5\n210\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nIndex \nComposite\nUrban\nRural\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 28 \nEconomic Report Third Quarter \n2016 \nTable 12: Consumer Price Index (November 2009=100) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nComposite\n161.3\n164.4\n168.4\n173.2\n176.5\n180.2\n189.9\n201.7\n208\nUrban\n162.4\n163.4\n167.4\n172.2\n175.5\n179.2\n190.0\n203.4\n209.6\nRural\n160.3\n165.5\n169.5\n174.2\n177.5\n181.11\n189.9\n200.5\n206.7\n \nThe inflation rate at the end of the review quarter, on a year-\non-year basis, was 17.9 per cent, compared with 16.5 and 9.4 \nper cent in the second quarter of 2016 and the corresponding \nperiod of 2015, respectively. On a twelve-month moving \naverage basis, the inflation rate was 13.5 per cent, indicating \na 2.1 percentage points increase, above the level in the \npreceding quarter (Fig. 15, Table 14). \nFigure 15: Inflation Rate \n \n \nTable 13: Headline Inflation Rate (%) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\n12-Month Moving Average\n8.0\n8.0\n8.2\n8.4\n8.7\n9.0\n9.8\n11.4\n13.5\nYear-on-Year\n8.3\n8.0\n8.5\n9.2\n9.4\n9.6\n12.8\n16.5\n17.9\n \n \n0.0\n2.0\n4.0\n6.0\n8.0\n10.0\n12.0\n14.0\n16.0\n18.0\n20.0\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nPercent \n12-Month Average\nYear-on-Year\nThe headline \ninflation (y-o-y) \nstood at 17.9 per \ncent in Q3 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 29 \nEconomic Report Third Quarter \n2016 \n5.0 \nExternal Sector Developments \nLower than expected global crude oil prices and domestic \nproduction challenges remained the major hindrance to the \nperformance of the external sector in the third quarter of 2016. \nProvisional data showed that foreign exchange inflow through the \nCBN in the third quarter of 2016, declined by 4.8 per cent below the \nlevel in the preceding quarter, while outflow grew by 28.4 per cent. \nTotal non-oil export receipts declined by 15.3 per cent, relative to \nthe level in the preceding quarter. The average exchange rate at \nthe \ninter-bank \nsegment \nwas \nN303.16/US$, \ncompared \nwith \nN209.13/US$ at end-June 2016. At US$24.11 billion, the gross external \nreserves fell by 11.4 per cent, compared with the level at the end of \nthe second quarter of 2016. \n5.1 \nForeign Exchange Flows \nThe persistent lower than expected global crude oil prices and \nbelow target crude oil output due to restiveness in the Niger \nDelta region were the major challenges to the performance of \nthe external sector in the third quarter of 2016. As part of the \nmeasures by the CBN to improve foreign exchange supply, \ncommercial banks were mandated to sell $50,000 from \ndiaspora-related foreign exchange inflow on weekly basis to \nover 2,500 BDC operators to ease the foreign exchange \nsupply shortage. The Bank also amended Memorandum 21 of \nthe Foreign Exchange Manual to allow foreign exchange \ninflow of individual Nigerians, companies, residents and non-\nresidents alike for investment in the debt, equities and money \nmarket instruments. \nThus, there was a rise in inflow through the the CBN and \nmarginal increase in foreign exchange supply in the retail-end \nof the foreign exchange market. However, fall in non-oil \nreceipts, more than offset the increase in oil and autonomous \nreceipts, and resulted in weak overall performance of the \nexternal sector in the review period. \nProvisional data showed that foreign exchange inflow and \nouflow through the CBN in the third quarter of 2016 were \nUS$5.59 billion and US$7.73 billion, respectively. This resulted in \na net outflow of US$2.14 billion, compared with the net outflow \nof US$0.20 billion in the preceding quarter. Relative to the level \nat end-June 2016 and the corresponding period of 2015, \ninflow declined by 4.8 per cent and 49.7 per cent, \nForeign exchange \ninflow through the \nCBN rose by 4.8 per \ncent, but outflow \ngrew by 28.4 percent. \nThis resulted in a net \noutflow of US$2.14 \nbillion in Q3 of 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 30 \nEconomic Report Third Quarter \n2016 \nrespectively. Conversely, outflow through the CBN, at US$7.73 \nbillion, rose by 28.4 per cent above the level in the preceding \nquarter, but was a decline of 18.8 per cent relative to the \nlevel at the end of the corresponding period of 2015. The \ndevelopment relative to the preceding quarter was driven \nmainly, by inter-bank sales, swaps and 3rd party MDA transfers \n(Fig.16, Table 15). \nFigure 16: Foreign Exchange Flows Through the CBN \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTable 14: Foreign Exchange Flows Through the CBN (US$ million) \nQ2-14\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ1-16\nQ2-16\nQ3-16\nInflow\n13,094.23\n \n10,641.86\n \n8,307.23\n \n6,976.02\n \n11,111.00\n \n7,135.41\n \n3,942.89\n \n5,875.18\n \n5,592.44\n \nOutflow\n11,804.98\n \n14,527.35\n \n12,875.77\n \n8,194.56\n \n9,523.32\n \n7,757.49\n \n4,487.05\n \n6,023.10\n \n7,731.19\n \nNetflow\n1,289.25\n \n(3,885.49)\n \n(4,568.54)\n \n(1,218.54)\n \n1,587.68\n \n(622.08)\n \n(544.16)\n \n(147.92)\n \n(2,138.75)\n \n \n \nProvisonal data on aggregate foreign exchange inflow into \nthe economy indicated that total inflow was US$17.02 billion. \nThis represented an increase of 11.1 per cent above the level \nat the end of the second quarter of 2016, but showed a \ndecline of 37.7 per cent relative to the level at the end of the \ncorresponding period of 2015. The development was driven \nby increase in oil and autonomous receipts. Oil sector \nreceipts, which accounted for 21.1 per cent of the total, stood \nat US$3.60 billion, compared with US$3.15 billion and US$6.05 \nbillion, in the second quarter of 2016 and the corresponding \nperiod of 2015, respectively. \nNon-oil public sector inflow, at US$1.99 billion (11.7 per cent of \nthe total), declined by 27.0 per cent and 60.7 percent below \nAutonomous inflow \ninto the economy \nincreased by 21.1 \nper cent in Q3 2016 \n-10,000\n-5,000\n0\n5,000\n10,000\n15,000\n20,000\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nUS$ million \nInflow\nOutflow\nNetflow\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 31 \nEconomic Report Third Quarter \n2016 \nthe \nlevels at the end of the \nsecond quarter and \ncorresponding period of 2015. Autonomous inflow, which \naccounted for 67.2 per cent of the total, increased by 21.1 \nper cent compared with the level in the preceding quarter of \n2016. \nAt US$8.33 billion, aggregate foreign exchange outflow from \nthe economy rose by 27.2 per cent, above the level in the \npreceding quarter, but showed a decline of 23.9 per cent, \nbelow the level at the end of the corresponding period of \n2015. The outflow rose on the account of payments for \nmatured foreign exchange forwards, external debt service \nand other official payments, which increased to US$3.54 \nbillion, US$125.96 million and US$1.49 billion, respectively. Thus, \nforeign exchange flows through the economy resulted in a net \ninflow of US$8.69 billion in the review quarter, compared with \nUS$8.77 billion and US$16.4 billion in the second quarter of \n2016 and at end-September 2015, respectively. \n5.2 \nNon-Oil Export Earnings by Exporters \nIn spite of the measures taken by the Bank to reduce foreign \nexchange supply constraints, low imports of production input \nhampered domestic production of non-oil exports. Hence, \nprovisional data showed that non-oil export receipts by banks \nin the third quarter of 2016 at US$500.45 million, fell by 15.3 per \ncent, relative to the level in the second quarter. This was due \nto the 28.6 per cent and 12.5 per cent contraction in the \nvolumes of exports of industrial and manufactured products to \nUS$65.59 million and US$70.61 million, respectively. Similarly, in \nthe review period, foreign exchange proceeds from transport, \nagricultural and minerals sub-sectors fell by 4.0 per cent, 34.0 \nper cent and 0.7 per cent to US$0.12 million, US$146.95 million \nand US$184.18 million, respectively. \nThe \npercentage \nshares \nof \nminerals, \nagricultural, \nmanufacturing, industrial and food products as well as \ntransport sub-sectors in total non-oil export proceeds were 36.8 \nper cent, 29.4 per cent, 14.1 per cent, 13.1 per cent, 6.6 per \ncent and 0.02 per cent, respectively. \n \n \n \n. \nTotal non-oil export \nearnings by \nexporters fell \nduring the second \nquarter of 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 32 \nEconomic Report Third Quarter \n2016 \n5.3 \nSectoral Utilisation of Foreign Exchange \n \nThere was increased utilisation of foreign exchange mainly, for \nindustrial and manufatcured products in the review period, \nfollowing the various measures taken to improve the supply of \nforeign exchange in the retail segment of the foreign \nexchange \nmarket. \nConsequently, \naggregate \nsectoral \nutilisation of foreign exchange rose by 50.2 per cent to \nUS$10.10 billion, compared with the level in the second \nquarter of 2016. The Invisible, which accounted for the bulk of \ntotal foreign exchange disbursed in the third quarter of 2016, \n(32.9 per cent), rose by 53.9 per cent relative to the preceding \nquarter‟s level of US$3.33 billion. This was followed by the \nminerals and oil sub-sector (23.7 per cent). The contributions of \nthe other sectors in a descending order were: industrial sub-\nsector (21.5 per cent), manufactured products (11.7 per cent), \nfood products (7.3 per cent), transport sector (2.1 per cent) \nand agricultural products (0.8 per cent) (Fig.17). \nFigure17: Sectoral Utilisation of Foreign Exchange \n \n \n \n \n \n \n \n0.8 \n2.0 \n7.3 \n11.8 \n23.7 \n21.5 \n32.9 \n0.8 \n1.7 \n8.4 \n11.7 \n23.5 \n21.7 \n32.2 \n0.9 \n2.8 \n7.3 \n13.1 \n18.9 \n24.1 \n32.9 \n0.0\n5.0\n10.0\n15.0\n20.0\n25.0\n30.0\n35.0\nPercent of Total \nQ1-16\nQ2-16\nQ3-16\nThe visible sector \naccounted for the \nbulk of the total \nforeign exchange \ndisbursed during \nQ3 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 33 \nEconomic Report Third Quarter \n2016 \n5.4 \nForeign Exchange Market Developments5 \nThe measures taken by the Bank in the review period \nmarginally improved foreign exchange supply in the retail end \nof the foreign exchange market. To further improve the \ngeneral supply of foreign exchange, a total of US$5.30 billion \nwas sold by the CBN to authorized dealers during the third \nquarter of 2016. This reflected an increase of 23.1 per cent \nabove the level in the second quarter of 2016, but a 34.1 per \ncent decline below the level in the corresponding period of \n2015. The development, relative to the preceding quarter, was \nattributed to the increased intervention by the CBN in the \ninter-bank market and swap transactions. Of the aggregate, \ninterbank sales amounted to US$0.72 billion or 13.6 per cent, \nwhile swap contracts disbursed at maturity were valued at \nUS$1.04 billion or 19.6 per cent. The balance was accounted \nfor by matured forwards contract, valued at US$3.54 billion or \n66.8 per cent of the total supply in the review period (Fig. 18, \nTable 16). \nFigure 18: Supply of Foreign Exchange \n \n \n \nTable 15: Demand for and Supply of Foreign Exchange (US$ billion) \nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nForex Sales at rDAS/Interbank\n8.17\n4.68\n4.85\n3.78\n2.75\n3.11\n0.72\nSupply of Swaps\n1.00\n1.25\n1.50\n1.20\n0.74\n1.20\n1.04\nSupply of Forex to BDC\n0.86\n0.97\n1.24\n0.87\n0.02\n0.00\n0.00\nTotal Forex Supply(BDC and rDAS)\n10.92\n7.35\n8.04\n7.01\n3.51\n4.31\n5.30\n \n5 Market Closed (MC) - wDAS and rDAS window was closed in February 2015 \n \n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\n14.00\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nUS$ billion \nForex Sales at rDAS/Interbank\nSupply of Swaps\nSupply of Forex to BDC\nTotal Forex Supply\nSupply for foreign \nexchange by \nauthorized dealers \nrose during Q3 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 34 \nEconomic Report Third Quarter \n2016 \nThe average naira exchange rate at the inter-bank segment \ndepreciated by 31.8 per cent to N303.16/US$, compared with \nN206.8800/US$ in the second quarter of 2016. At the BDC \nsegment, the naira exchange rate depreciated by 14.7 and \n42.9 per cent to an average of N394.59/US$, relative to the \nlevels in the second quarter and the corresponding period of \n2015, respectively, (Fig. 19, Table 17). \nFigure 19: Average Exchange Rate Movements \n \n Table 16: Exchange Rate Movements and Exchange Rate Premium \nAverage Exchange Rate (N/US$)\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nrDAS\n157.29\n162.33\n169.68 N/A\nN/A\nN/A\nN/A\nN/A\nN/A\n BDC\n168.90\n178.24\n210.69\n216.41\n225.21\n238.69\n313.49\n336.67\n394.59\n Interbank\n162.39\n172.16\n191.11\n196.97\n196.99\n196.99\n197.00\n206.88\n303.16\nPremium (%)\n rDAS/BDC\n7.4\n9.8\n23.5 N/A\nN/A\nN/A\nN/A\nN/A\nN/A\n rDAS/Interbank\n3.2\n6.1\n12.6 N/A\nN/A\nN/A\nN/A\nN/A\nN/A\n BDC/Interbank\n4.0\n3.5\n10.2\n9.9\n14.3\n21.2\n59.1\n62.7\n55.6\n \n \nFigure 20: Exchange Rate Premium \n \n \n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nN/US $ \nAverage wDAS/rDAS\nAverage BDC\nAverage Interbank\n0\n10\n20\n30\n40\n50\n60\n70\n80\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nPer cent \nrDAS/BDC\nrDAS/Interbank\nInterbank/BDC\nThe average naira \nexchange rate vis-à-\nvis the US dollar was \nN303.16/US$ at the \ninterbank segment in \nQ3 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 35 \nEconomic Report Third Quarter \n2016 \n5.5 \nGross Official External Reserves \nThe lingering weak proceeds from oil and non-oil exports \ntogether with the need by the CBN to make up for foreign \nexchange supply shortage constrained the accretion to \nreserves. Provisional data indicated that gross external \nreserves as at September 28, 2016 stood at US$24.11 billion, \nshowing a decline of 11.4 per cent and 19.3 per cent, below \nthe levels in the second quarter and the corresponding period \nof 2015, respectively. Foreign exchange payments in respect \nof swap transactions in the review period accounted for the \nbulk of the decline in reserves. A breakdown of external \nreserves by ownership showed that the federation reserves \nwas US$3.03 billion (12.6%); the Federal Government reserves, \nUS$5.92 billion (24.6%), and the CBN reserves, US$15.16 billion \n(62.8%) (Fig. 21, Table 18). \nFigure 21: Gross Official External Reserves \n0\n5,000\n10,000\n15,000\n20,000\n25,000\n30,000\n35,000\n40,000\n45,000\nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nUS$ million\n \nTable 17: Gross Official External Reserves (US$ million) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nExternal Reserves\n38,278.6\n \n34,241.5\n \n29,357.2\n \n28,335.2\n \n29,880.2\n \n28,284.8\n \n27,336.4\n \n26,505.4\n \n24,111.3\n \n \n \n \n \nGross external \nreserves declined \nduring the third \nquarter of 2016. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 36 \nEconomic Report Third Quarter \n2016 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 37 \nEconomic Report Third Quarter \n2016 \n6.0 Global Economic Conditions \n6.1 Global Output \nThe decline in momentum of the U.S. economy over the past \nfew quarters continued amidst failed expectation of a \nrebound in the second quarter of 2016. Growth in the \neuroarea declined to 1.2 per cent at a seasonally adjusted \nannualized rate in the second quarter. Strong start to the \nsecond quarter in the United Kingdom lifted GDP growth to 2.4 \nper cent at a seasonally adjusted annualized rate, from 1.8 \nper cent in the first quarter of 2016. Survey indicators for July \nand August point to sharp retrenchment in manufacturing \nactivity in the immediate post-Brexit referendum period, \nfollowed by a rebound, while retail sales have remained \nupbeat. Emerging market and developing economies as a \ngroup recorded a slight rebound in momentum. Emerging \nAsia registered strong growth, while the situation improved \nslightly for stressed economies such as Brazil and Russia. World \nEconomic Outlook (WEO) 2016, projected global growth at 3.1 \nper cent and 3.4 per cent in 2016 and 2017, respectively. \n6.2 Global Inflation \nThere was mix development in inflation rates across regions \nand countries in the review period. Inflation in the US average \nslightly above 2.0 per cent, reflecting the effect of temporary \nfactor or seasonality, while inflation in the euroarea and \nJapan were lower. Gradual diminishing effect of past \nexchange rate depreciation in emerging and developing \neconomies has led to relative stability in inflation, though pass-\nthrough of large depreciations has kept inflation in double-\ndigit levels in few major economies in sub-Sahara Africa. \nWEO of October 2016 projected inflation rates in advanced \neconomies to reach about 0.8 per cent in 2016, from 0.3 per \ncent in 2015 reflecting, mostly, a reduced drag from energy \nprices. As fuel prices increase modestly and output gaps \ngradually shrink, inflation is expected to rise over the next few \nyears. With the exception of Argentina (where high inflation is \na byproduct of liberalization process) and Venezuela, waning \neffect of earlier currency depreciations in emerging market \nand developing economies is expected to move inflation to \n4.5 per cent in 2016 from 4.7 per cent in 2015. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 38 \nEconomic Report Third Quarter \n2016 \n6.3 Global Commodity Demand and Prices \nWorld crude oil demand was estimated at 95.15 mbd in the \nthird quarter of 2016, representing an increase of 1.6 per cent \ncompared with the 93.7 mbd recorded in the preceding \nquarter. World crude oil supply in the review quarter was \nestimated at 95.65 mbd, representing an increase of 1.2 per \ncent from the level in the preceding quarter. \nThe price of OPEC Reference Basket (ORB) was US$42.86 per \nbarrel in the third quarter of 2016, representing an increase of \n1.1 per cent, over the level in the preceding quarter. The \ndevelopment was attributed to positive sentiments arising from \npossible cooperation between OPEC and non-OPEC suppliers \ntowards stabilizing the market and indications of massive \ndrawdown on crude stock by the US. \n6.4 International Financial Markets \nPerformance of international stock markets in the review \nperiod were largely positive except in Africa. In Europe, the \nDAX, FTSE 100, CAC 40 and MICEX indices increased by 8.6, \n6.1, 5.0 and 4.6 per cent, respectively. In North America, \nCanada S&P/TSX Composite, the US S&P 500 and Mexican \nBolsa Indices all increased by 4.7, 3.3 and 2.8 per cent, \nrespectively. Similarly, in South America, Argentine Merval \nindex, the Brazilian Bovespa and Columbian IGBC General all \nincreased by 13.6, 13.3 and 2.0 per cent, respectively. \nIn Africa, however, the Kenyan Nairobi NSE 20, Nigerian All-\nShare, Ghanaian GSE All-Share and South African JSE AS \nindices decreased by 10.9, 4.3, 0.7 and 0.5 per cent, \nrespectively, while the Egyptian EGX CSE 30 index increased \nby 13.5 per cent. \nDevelopments in the international foreign exchange market \nwere mixed in the review period. In Europe, the euro and \nRussian ruble appreciated against the dollar, while the British \npound depreciated against the dollar. The Columbian peso, \nCanadian dollar, Mexican peso, Japanese yen and Indian \nrupee appreciated against the dollar, while the Chinese yuan, \nBrazilian real and Argentine peso all deprecated against the \ndollar. In Africa, with the exception of the Nigerian naira and \nthe Kenyan shilling which depreciated, against the dollar, \nother major African currencies appreciated against the dollar. \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 39 \nEconomic Report Third Quarter \n2016 \n6.5 Other International Economic Developments and \nMeetings \nOther major international economic developments and \nmeetings of importance to the domestic economy during the \nreview period included, the 2016 meeting of the African \nGovernors of the IMF and World Bank held at Palais des \nCongres, Cotonou, Benin Republic from August 4 - 5, 2016. The \ntheme of the meeting was “Scaling Up Bretton Woods \nInstitutions Support to Address Shocks, Robust Growth and \nEnhance Transformation in Africa”. At the end of the meetings \nthe Governors agreed that: \n \nConduct of development policies on the continent has \nproven to be more challenging due to declining \ncommodity prices, tighter financial conditions in capital \nmarkets and multiplicity of non-economic shocks, mainly \nsecurity issues (terrorism) and climate change; \n \nTo address the challenges of these shocks, it was \nnecessary to promote diversity, inclusive growth, and \nstrengthening our regional economies; and \n \nIt was necessary to continue to work for more transparent \ngovernance, while implementing public policies for \ndevelopment. \nFurther more, the Association of African Central Banks held its \n2016 Annual meetings in Abuja, Nigeria, from August 15 – 19, \n2016. The Assembly of Governors of the AACB held its 39th \nOrdinary Meeting, on August 19, 2016 at the Central Bank of \nNigeria (CBN) Abuja, Nigeria. The meeting was attended by \ntwenty-seven central banks and the African Union Commission \n(AUC), but preceded by a Symposium which held on 18th \nAugust, 2016 with the theme: “Unwinding Unconventional \nMonetary Policies: Implications for Monetary Policy and \nFinancial Stability in Africa”. The meeting: \n \nConsidered the status of the progress report on the \nimplementation of the African Monetary Cooperation \nProgramme (AMCP) in 2015 and noted the difficulties of \nmember countries to fullfil the AMCP‟s primary criteria; \n \nConsidered the information provided by the African \nUnion Commission on the submission to the African Union \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 40 \nEconomic Report Third Quarter \n2016 \n(AU) decision making bodies of the Study Report and the \nJoint AUC-AACB Strategy for the creation of the African \nCentral Bank (ACB); \n \nElected Mr. Godwin I. Emefiele, Governor of the Central \nBank of Nigeria (CBN) as Chairman of AACB for tiscal \nyear 2016 – 2017; and \n \nRequested the submission of the Statutes of the African \nInstitute for Remittances (AIR) to AACB member central \nbanks for comments by December 31, 2016, among \nothers. \nThe 29th Ordinary Meeting of the Economic and Monetary \nAffairs Committee and the Administration Committee of \nWAMA took place at the Riviera Royale Hotel, Conakry, \nGuinea from July 29 - 30, 2016. The Technical Committee \ndeliberated on critical issues bordering on the ECOWAS \nMonetary \nCooperation \nProgramme \n(EMCP) \nand \nother \nadministrative issues at WAMA. The 34th meeting of the \ntechnical committee of WAIFEM was also held on July 31, 2016 \nat the Riviera Royale Hotel, Conakry, Guinea. The meeting \ndeliberated on developments in WAIFEM for the period \nJanuary – June 2016. \nSimilarly, the 33rd meeting of the Committee of Governors of \nthe West African Monetary Zone (WAMZ) took place on 4th \nAugust, 2016 to deliberate on the Report of the 39th Meeting of \nthe Technical Committee of the WAMZ. \nFinally, the 31st meeting of the Board of Governors of WAIFEM \nheld at the Riviera Royale Hotel Conakry, Guinea on August 4, \n2016. The meeting considered the report of the 34th Meeting of \nthe Technical Committee. \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 41 \nEconomic Report Third Quarter \n2016 \n \n \n \n \n \n \nAPPENDIX TABLES \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 42 \nEconomic Report Third Quarter \n2016 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 43 \nEconomic Report Third Quarter \n2016 \nTable A1: Money and Credit Aggregates \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1/ Quasi money consist of Time, Savings and Foreign Currency Deposit at Deposit Money Banks excluding Taking from Discount \nHouses. \n \n 2/ Demand Deposit consist of State, Local and Parastatals Deposits at CBN, State, Local Government and Private Sector Deposits as well \n as Demand Deposits of non-financial Public Enterprises at Deposit Money Banks. \n \n \n \nJun-15\nSep-15\nDec-15\nMar-16\nJun-16\nSep-16\nDomestic Credit (Net)\n21409.8\n21519.8\n21612.5\n22664.8\n24318.1\n26341.5\n Claims on Federal Government (Net)\n2512.9\n2787.6\n2893.2\n3782.6\n2893.2\n3748.8\n Central Bank (Net)\n-769.5\n-1042.2\n-1653.1\n-850.7\n-1465.2\n-1042.5\n Banks\n3219.3\n3829.8\n4546.3\n4633.3\n4179.9\n4569.1\n Claims on Private Sector\n18897.3\n18732.2\n18719.3\n18882.2\n21425.0\n22592.6\n Central Bank\n5093.1\n5275.2\n5061.6\n5166.7\n5376.9\n5898.9\n Banks\n13713.0\n13456.9\n13657.7\n13715.6\n15903.6\n16530.1\n Claims on Other Private Sector\n18374.8\n18142.3\n18109.9\n18044.3\n20397.9\n21560.6\n Central Bank\n5042.0\n5082.3\n5036.0\n4996.7\n5050.3\n5552.9\n Banks\n13241.5\n13059.9\n13073.8\n13047.6\n15204.8\n15845.5\n Claims on State and Local Government\n471.4\n397.0\n583.8\n668.0\n700.5\n686.1\n Central Bank\n--\n--\n--\n--\n--\n--\n DMBs \n471.4\n397.0\n583.8\n668.0\n698.8\n684.5\n Claims on Non-financial Public Enterprises\n--\n--\n--\n--\n--\n--\n Central Bank\n--\n--\n--\n--\n--\n--\n DMBs \n--\n--\n--\n--\n--\n--\nForeign Assets (Net)\n5951.5\n5083.1\n5653.3\n5551.7\n7105.7\n7742.3\n Central Bank\n5796.0\n5242.6\n5545.3\n5178.2\n6840.4\n7791.1\n DMBs and Non Interest Banks\n155.5\n-159.5\n108.0\n373.5\n254.5\n-51.7\nOther Assets (Net)\n-8549.8\n-7884.9\n-7235.9\n-7746.1\n-9738.8\n-11950.3\nTotal Monetary Assets (M2)\n18811.4\n18718.0\n20029.8\n20470.4\n21685.0\n22133.5\nQuasi-Money 1/\n11569.4\n11569.4\n11458.1\n11429.6\n12559.0\n12184.1\nMoney Supply (M1)\n7148.6\n7148.6\n8571.7\n9040.8\n9125.9\n9949.4\n Currency Outside Banks\n1219.0\n1219.0\n1456.1\n1441.4\n1379.2\n1477.4\n Demand Deposits 2/\n5929.6\n5929.6\n7115.6\n7599.5\n7746.7\n8471.9\nTotal Monetary Liabilities (M2)\n18811.4\n18718.0\n20029.8\n20470.4\n21685.0\n22133.5\nMemorandum Items:\nReserve Money (RM)\n4943.0\n5930.9\n5937.1\n5945.8\n5221.9\n6659.0\n Currency in Circulation (CIC)\n1547.9\n1798.0\n1818.4\n1562.6\n1679.5\n1794.3\n Banks' Deposit with CBN\n3395.1\n4133.0\n4118.7\n4383.4\n3542.4\n4864.7\nN billion\n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 44 \nEconomic Report Third Quarter \n2016 \nTable A2: Money and Credit Aggregates (Growth Rates) \nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nDomestic Credit (Net)\n3.75\n0.51\n0.43\n4.87\n7.29\n8.32\n Claims on Federal Government (Net)\n-26.46\n10.95\n3.79\n30.74\n-23.51\n29.57\n Claims on Private Sector\n1.33\n-0.87\n-0.07\n0.87\n13.47\n5.45\n Claims on Other Private Sector\n1.63\n-1.27\n-0.18\n-0.36\n13.04\n5.7\n Claims on State and Local Government\n-13.22\n-15.79\n47.06\n14.41\n4.87\n-2.05\n Claims on Non-financial Public Enterprises\nForeign Assets (Net)\n-12.3\n-14.6\n11.2\n-1.8\n28.0\n8.96\nOther Assets (Net)\n-3.12\n7.78\n8.23\n7.05\n25.73\n22.71\nTotal Monetary Assets (M2)\n-1.7\n-0.5\n7.0\n2.2\n5.9\n2.1\nQuasi-Money 1/\n1.0\n-5.7\n-1.0\n-0.3\n9.9\n-3.0\nMoney Supply (M1)\n-6.32\n9.27\n19.91\n5.47\n0.94\n9.02\n Currency Outside Banks\n-19.5\n2.95\n19.45\n-1.01\n-4.31\n7.12\n Demand Deposits 2/\n-2.98\n-10.66\n20\n6.8\n1.94\n9.36\nTotal Monetary Liabilities (M2)\n-1.7\n-0.5\n7.0\n2.2\n5.9\n2.1\nMemorandum Items:\nReserve Money (RM)\n0.65\n-2.65\n0.42\n-0.9\n-6.74\n23.96\n Currency in Circulation (CIC)\n-14.07\n-14.07\n13.46\n-2.52\n-6.98\n6.5\n DMBs Demand Deposit with CBN\n7.21\n-5.31\n-4.72\n-0.14\n-6.64\n31.93\nDomestic Credit (Net)\n11.08\n11.65\n12.13\n4.87\n12.52\n21.88\n Claims on Federal Government (Net)\n118.5\n142.38\n151.56\n30.74\n0.00003\n29.574\n Claims on Private Sector\n4.3\n3.36\n3.29\n0.87\n14.45\n20.69\n Claims on Other Private Sector\n4.6\n3.31\n3.12\n-0.36\n12.63\n19.05\n Claims on State and Local Governments\n-12.11\n-25.99\n8.85\n14.41\n19.98\n17.52\n Claims on Non-financial Public Enterprises\nForeign Asset (Net)\n-14.42\n-26.91\n-18.71\n-1.8\n25.69\n36.95\nOther Asset (Net)\n-16.9\n-7.79\n1.08\n-7.05\n-34.59\n-65.15\nTotal Monetary Assets (M2)\n-0.54\n-1.03\n5.90\n2.20\n8.26\n10.50\nQuasi-Money 1/\n2.2\n-3.65\n-4.58\n-0.25\n9.61\n6.34\nMoney Supply (M1)\n-5.3\n3.53\n24.14\n5.47\n6.47\n16.07\n Currency Outside Banks\n-17.6\n-15.2\n1.3\n-1.01\n-5.28\n1.47\n Demand Deposits 2/\n-2\n8.45\n30.15\n6.8\n8.87\n19.06\nTotal Monetary Liabilities (M2)\n-0.54\n-1.03\n5.90\n2.20\n8.26\n10.50\nMemorandum Items:\nReserve Money (RM)\n0.25\n-2.41\n-1.99\n-0.9\n-7.58\n14.56\n Currency in Circulation (CIC)\n-13.11\n-8.93\n3.34\n-9.32\n-3.43\n DMBs Demand Deposit with CBN\n6.06\n0.43\n0.43\n-0.14\n-6.76\n23.01\nPercentage Change Over Preceding Quarter\nPercentage Change Over Preceding December\n \n1/ Quasi money consist of Time, Savings and Foreign Currency Deposit at Deposit Money Banks excluding Taking from Discount Houses. \n2/ Demand Deposit consist of State, Local and Parastatals Deposits at CBN, State, Local Government and Private Sector Deposits as well as Demand Deposits of \nnon-financial Public Enterprises at Deposit Money Banks. \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 45 \nEconomic Report Third Quarter \n2016 \nTable A3: Federal Government Fiscal Operations (N billion) \nQ3-14\nQ4-14\nQ1-15\nQ2-15\nQ3-15\nQ4-15\nQ1-16\nQ2-16\nQ3-16\nRetained Revenue\n988.60\n839.77\n1027.03\n538.61\n1044.91\n802.60\n570.54\n677.88\n922.86\n Federation Account\n765.56\n638.38\n601.39\n430.41\n589.66\n482.84\n412.24\n323.16\n473.73\n VAT Pool Account\n27.85\n27.77\n28.17\n29.26\n29.10\n25.60\n28.31\n28.02\n30.29\n FGN Independent Revenue\n98.88\n62.44\n280.63\n10.31\n23.47\n8.93\n40.31\n100.92\n197.79\n Excess Crude\n0.00\n1.27\n7.16\n0.00\n0.00\n0.00\n0.00\n0.00\n66.21\n Others/SURE-P\n96.31\n109.91\n109.68\n68.63\n402.68\n285.23\n89.68\n225.78\n154.84\nExpenditure\n1252.37\n1163.98\n1156.57\n1024.55\n1176.17\n1538.46\n1118.96\n1768.84\n1424.91\n Recurrent\n904.71\n869.66\n1032.77\n814.15\n1013.07\n939.20\n988.37\n1285.08\n1094.79\n Capital\n236.82\n193.15\n59.58\n162.29\n72.31\n463.18\n72.36\n350.07\n227.44\n Transfers\n110.84\n101.18\n64.22\n48.11\n90.15\n136.08\n58.23\n133.69\n102.68\nOverall Balance: Surplus(+)/Deficit(-)\n-263.77\n-324.21\n-129.54\n-485.94\n-131.26\n-735.86\n-548.42\n-1090.96\n-502.05 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nC e n t r a l B a n k o f N i g e r i a \nPage 46 \nEconomic Report Third Quarter \n2016", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Quarterly_Economic_Reports/CBN ECONOMIC REPORT THIRD QUARTER 2016 Published.pdf"}
{"doc_id": "6af655ba7eef47e7fec04204f3bfd7fb", "text": "CENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 146 OF THE MONETARY POLICY \nCOMMITTEE MEETING HELD ON MONDAY 23rd AND TUESDAY 24th JANUARY 2023 \nThe Monetary Policy Committee (MPC) held its first meeting for 2023 on the 23rd \nand 24th January, 2023, as optimism of a rebound in global output recovery \nwaned considerably, giving room for increased concerns of a likely global \nrecession in 2023. This is driven by several global shocks impacting negatively on \ngrowth and price development. Major headwinds to global growth include: \nongoing geopolitical tensions in some regions; intensified disruptions to the \nenergy market; persisting supply bottlenecks; resurgence of the COVID-19 \npandemic in major industrial cities in China; and tightening external financial \nconditions. In addition to these, the slow growth in global trade, continued \nvolatility in the oil market and growing private and public debt portfolios, are \nclear signals of increasing uncertainty, imposing a drag on growth. \nIn the domestic economy, output growth recovery was subdued in the third \nquarter of 2022, but expected to recover moderately in the fourth quarter on \nthe back of continued support of both monetary and fiscal policy through \nvarious interventions in growth-enhancing sectors. At this meeting, the \nCommittee reviewed these and other developments in the global and \ndomestic economic and financial environments in 2022, as well as the outlook \nand risks for 2023. \nTwelve (12) members of the Committee attended this meeting. \nGlobal Economic Developments \nThe Committee noted with concern, the growing evidence of increased \nmilitarization of the war in Ukraine and the consequence of a prolonged war on \n \n \nthe recovery of the global economy. It also noted the renewed concern of the \npossibility of yet another Pandemic reverberating the global economy in \n2023, as infection rates rise in China, following its lifting of COVID-19 restrictions. \nThese two factors alongside the tightening of global financial conditions remain \nmajor headwinds to global economic growth. The combined impact of these \nshocks on the global economy could result in further disruptions to commodity \nand energy markets as well as the efficient functioning of global supply chains. \nIn the Advanced Economies, fiscal policy retreated to give way to monetary \nadjustment, while in the Emerging Markets and Developing Economies, fiscal \ncapacity is being greatly undermined by the array of shock spillovers from the \nglobal economy. The International Monetary Fund (IMF), in its October 2022 \nWorld Economic Outlook, retained its global output growth projection for 2022 \nat 3.2 per cent, but further downgraded in the 2023 forecast to 2.7 per cent \ncompared with 2.9 per cent in its July 2022 forecast. The World Bank in its latest \nforecast, indicated a much lower global growth expectation of 1.7 per cent for \n2023. \nOn price development, the MPC observed that inflation, in most Advanced \nEconomies, although trending downwards, remained significantly above their \nlong-run objectives and is expected to remain elevated throughout 2023. This is \ndriven by the continued high price of food and energy, a fallout of the war in \nUkraine, lagged impact of the massive liquidity support rolled out to douse the \nimpact of the COVID-19 pandemic, and persisting disruptions to the global \nsupply chain as China faces a renewed surge of the Pandemic. Fears that \nRussia may renege on its commitment to the Black Sea grains deal is also \nbuilding expectations of possible rise in short-term price levels. In the Emerging \nMarkets and Developing Economies, inflation is expected to moderate \nmarginally in 2023, but remain broadly elevated due to a combination of \nfactors such as the persisting high price of grains and other commodities; \ncontinued exchange rate pressures; and other legacy structural factors. \nIn the global financial markets, the continued normalisation of monetary policy \nhas led to the tightening of external financial conditions and increased volatility \n \n \nin the equities market. With the increased fears of a likely global recession in \n2023, investors have commenced a move towards safe-haven assets such as \ngold and silver to safeguard their investments. \nIn the Advanced Economies, corporate debt levels remain considerably high \nas pressure builds to avoid default scenarios with the continued hike of \nmonetary policy rates. In the Emerging Market and Developing Economies, the \npersistence of rising public debt profiles and capital flow reversals are putting \nsevere pressure on exchange rates, posing a challenge to external \nsustainability. \nDomestic Economic Developments \nAvailable data from the National Bureau of Statistics (NBS) revealed that Real \nGross Domestic Product (GDP) grew by 2.25 per cent (year-on-year) in the third \nquarter of 2022, compared with 3.54 per cent in the second quarter of 2022 and \n4.03 per cent in the corresponding period of 2021. The economy has continued \non a path of positive growth for eight consecutive quarters. This is driven largely \nby support by the Bank and the fiscal authority to growth enhancing sectors. \nStaff projections showed that output growth recovery is expected to continue \nreasonably in 2023, given the expected sustained positive performance during \nthe fourth quarter of 2022 and steady rebound in economic activities. \nThe MPC welcomed the moderation in inflation following ten consecutive \nmonths of uptick, as headline inflation (year-on-year) declined marginally to \n21.34 per cent in December 2022 from 21.47 per cent in November 2022. Month-\non-month headline inflation however, increased to 1.71 per cent in December \n2022 from 1.39 per cent in the preceding month, due to a rise in consumer \nspending during the festive period. \nThe Committee observed the continued growth in money supply with broad \nmoney (M3) growth exceeding the 2022 provisional benchmark of 15.21 per \ncent at 16.52 per cent (year-to-date) in December 2022, compared with 13.92 \nper cent in November 2022. This was largely driven by increased claims on other \n \n \nsectors (other financial corporations, state and local governments, public \nnonfinancial corporations, and the private sector). \nMoney market rates oscillated below and within the asymmetric corridor of the \nstanding facilities window, reflecting changing liquidity conditions in the \nbanking system. Accordingly, the monthly weighted average Open Buyback \n(OBB) rate decreased to 11.61 per cent in December 2022 from 12.56 per cent \nin November 2022, while the monthly average inter-bank rate, increased to \n12.08 per cent in December 2022 from 11.89 per cent in November 2022. \nThe MPC noted the continued resilience of the banking system, evidenced by \nthe progressive improvement in the Non-Performing Loans (NPLs) ratio from 4.9 \nper cent in November 2022 to 4.2 per cent in December 2022. The Committee \nalso noted that the liquidity ratio was well above its prudential limit at 44.1 per \ncent, while the Capital Adequacy Ratio (CAR) remained at 13.8 per cent in \nDecember 2022 compared with the preceding month, staying within its \nprudential range of 10.0 -15.0 per cent. \nThe equities market was bullish in the review period, as the All-Share Index (ASI) \nand Market Capitalization (MC) increased to 51,251.06 and N27.92 trillion on \nDecember 30, 2022, from 43,839.08 and N23.88 trillion respectively, on October \n31, 2022. This reflected better-than-expected corporate earnings and improved \ninvestor confidence in the country. \nThe Committee noted the marginal decline in the external reserves, as gross \nexternal reserves decreased by 0.95 per cent at end-December 2022 to \nUS$36.55 billion, from US$36.9 billion at end-November 2022. This reflects the \nexchange rate pressure accentuated by a combination of heightened demand \nand slow accretion to reserves. \nThe Committee reviewed the performance of the Bank’s various interventions \naimed at stimulating production and productivity across the real sector. \nBetween September and October 2022, under the Anchor Borrowers’ \nProgramme (ABP), the Bank disbursed N41.02 billion to several agricultural \n \n \nprojects, bringing the cumulative disbursements under the Programme to \n₦1,067.29 billion to over 4.6 million smallholder farmers cultivating or rearing 21 \ncommodities across the country. The Bank also released N300 million to finance \nlarge-scale agricultural projects under the Commercial Agriculture Credit \nScheme (CACS), bringing the total disbursements under the Scheme to ₦745.31 \nbillion for 680 projects in agro-production and agro-processing. \nIn addition, the Bank released the sum of ₦48.30 billion under the ₦1.0 trillion \nReal Sector Facility to seven (7) new real sector projects in agriculture, \nmanufacturing, and services. Cumulative disbursements under the Real Sector \nFacility currently stood at ₦2.15 trillion disbursed to 437 projects across the \ncountry, comprising 240 in manufacturing, 91 in agriculture, 93 in services and \n13 mining sector projects. Furthermore, under the 100 for 100 Policy on \nProduction and Productivity (PPP), the Bank has disbursed the sum of ₦20.78 \nbillion to nine (9) projects in healthcare, manufacturing, and services. This brings \nthe cumulative disbursements under the facility to ₦114.17 billion to 71 projects \nacross healthcare, manufacturing, services and agriculture. The Bank released \n₦4.00 billion under the Intervention Facility for the National Gas Expansion \nProgramme (IFNGEP) to promote the adoption of compressed natural gas \n(CNG) as the preferred fuel for transportation and liquefied petroleum gas \n(LPG) as the preferred cooking fuel. \nIn the MSME sector, the Bank supported entrepreneurship development with the \ndisbursement of the sums of N1.33 billion and N10.00 million under the \nAgribusiness/Small and Medium Enterprise Investment Scheme (AgSMEIS) and \nMicro, Small, and Medium Enterprise Development Fund (MSMEDF), \nrespectively, to support entrepreneurship development in the country, bringing \nthe total disbursement under the interventions to N150.22 billion and N96.08 \nbillion, respectively. Under the Export Facilitation Initiative (EFI), the Bank funded \nexport-oriented projects with the sum of N5.34 billion, bringing the cumulative \ndisbursement under the intervention to N44.58 billion. \n \n \nOutlook \nThe broad outlook for the recovery of both the global and domestic economies \nremain uncertain with the path to full recovery clouded by significant downside \nrisks. The key risks remain the lingering headwinds from the Russian-Ukraine war, \nheightened inflationary pressure across several economies and sharp slowdown \nof economic activities in China with the resurgence of COVID-19 pandemic \nacross its major cities. Others include: the tightening of external financial \nconditions, as monetary policy normalization continues; increasing risk of a \nglobal debt crisis, as both corporate and public debt levels burgeon; and the \nincreasing likelihood of a global recession in 2023. \nAvailable data and forecasts for key macroeconomic indicators for Nigeria \nsuggest that the economy will continue to grow through 2023, but at a subdued \npace. The continued high level of insecurity; perennial scarcity of Premium Motor \nSpirit (PMS) and high cost of other energy sources; increased spending towards \nthe 2023 general elections; rising cost of debt servicing; and deteriorating fiscal \nbalances, remain the key sources of shocks to the Nigerian economy. \nAccordingly, the economy is forecast to grow in 2023 by 2.88 per cent by the \nCBN estimate. \n \nThe Committee’s Considerations \nAt this meeting, although the MPC was delighted that inflation (year-on-year) \nhad started to moderate, it was not convinced that a marginal 13 basis points \ndip in inflation was enough to begin to celebrate. The Committee was therefore \nnot of the opinion that a hold or loosen option was desirable. This is because \nloosening under a double-digit inflationary condition will be tantamount to an \nimmediate reversal of the expected further downward trend in inflation. \nCommittee also felt that loosening will negate the objective of dampening the \npent-up aggregate demand that fueled the rise in inflation post-COVID-19 \npandemic. \n \n \nAs for hold, the Committee was reluctant in considering this option because a \nhold option would signal MPC’s quick adjustment of its policy stance due to a \none-time, marginal decline in inflation, suggesting a weak confidence in its \nprevious policy stance at taming inflation. \nThe MPC was therefore unanimous in its position to continue to tighten. \nHowever, the dilemma at this meeting was whether to continue tightening \naggressively or moderately. To the Committee, a moderate tightening may \nslow the rate of deceleration in inflation without necessarily hurting output. For \nthose members who felt that an aggressive stance was needed, they were of \nthe view that Nigeria’s inflation at a rate above 20 per cent, was already a \nthreat to growth and among the highest in the world. To this group of members, \naggressively raising the policy rate was paramount to reining in inflation \nbecause an aggressive tightening stance would further narrow the negative \nreal interest rate margin. MPC also feels that a tightening stance would signal \nconfidence in the effectiveness of its Monetary Policy direction to rein in \ninflation, improve financial system stability, and moderate exchange rate. \nThe Committee’s Decision \nMembers welcomed the recent deceleration in year-on-year headline inflation, \nnoting that the persistence in policy rate hikes over the last few meetings of the \nCommittee had started to yield the expected decline in inflation. \nThe Committee thus deliberated on either to hike rates further or hold for the \nimpact of the last four rate hikes to continue to feed through. At this MPC, \ntherefore, the options considered were primarily to hold the policy rate or \ntighten further to consolidate the gains of previous rate hikes. Loosening, in the \nview of members, would gravely undermine the gains of the last four rate hikes. \nThe MPC noted the continued upward risk to price development characterized \nby the forthcoming 2023 general elections; perennial scarcity of PMS; continued \nrise in other energy prices; exchange rate pressure; as well as rising insecurity. \nMembers, however, noted that the current naira redesign and cash withdrawal \n \n \nlimit policies are huge moderating factors to price development as \nCurrencyOutside-Banks is expected to continue to moderate beyond the \nimplementation stage of these policies. \nThe MPC was of the view that although the inflation rate moderated marginally \nin December, the economy remained confronted with the risk of high inflation \nwith adverse consequences on the general standard of living. The Committee, \ntherefore, decided to sustain the current stance of policy at this point in time to \nfurther rein in inflation. \nOne (1) member voted to increase the MPR by 150 basis points, Four (4) \nmembers by 50 basis points, and Seven (7) members by 100 basis points, In \nsummary, the MPC voted to: \nI. \nRaise the MPR by 100 basis points to 17.5 per cent; \nII. \nRetain the asymmetric corridor of +100/-700 basis points around the MPR; \nIII. \nRetain the CRR at 32.5 per cent; and IV. \nRetain the Liquidity Ratio at 30 \nper cent. \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n24th January 2023 \n \n \n \n \n \n \nPERSONAL STATEMENTS BY THE MONETARY POLICY COMMITTEE MEMBERS \n1. ADAMU, EDWARD LAMETEK \nYear 2022 ended with less optimistic outlook for global growth in 2023 as \nprospects of recession loomed large across many economies owing to multiple \nvulnerabilities. These vulnerabilities included tighter financial conditions, supply \nissues especially around food and energy as well as slowing trade. The major \nsources of risk - Russia-Ukraine war, coronavirus pandemic and broad-based \ninflationary pressures – have continued to date. Weakening outlook for global \nactivity is signposted by the slowdown in China, USA and Euro Area. These \ntogether account for a sizeable share of global output, trade, and commerce. \nIn emerging market and developing economies (EMDEs) there is an additional \nheadwind coming from exchange rate pressures owing to capital flow \ninstability, weak external demand, and debt burden. These undercurrents \nbroadly point to the possibility of a global economic recession in 2023. On a \nbright note, however, inflation is starting to respond to the widespread rate hikes \nand rollback of monetary easing especially in the advanced economies. \nDespite this development, most central banks are likely to sustain monetary \ntightening over the medium term to firmly decelerate inflation pressures. EMDEs \nespecially are likely to be more reluctant to end tightening early given the \nrather slow response of inflation to policy adjustments in those climes. Egypt \nincreased its policy rate by a whooping 300 basis points in December 2022; \nGhana by 250 basis points in November and Indonesia by 25 basis points in \nJanuary 2023. \n \nIn December 2022, after a cumulative 500 basis points increase in the Central \nBank of Nigeria’s policy rate, headline inflation moderated for the first time in \nseveral months. This turnaround was nonetheless accompanied by a softening \nof the outlook for domestic growth. Despite the moderation, my view continues \nto be that inflation remains the dominant threat to macroeconomic stability in \nthe short-to medium-term. This is buttressed by the month-on-month (M-o-M) \n \n \nmeasure which rose sharply in the same month for headline and food. Against \nthis background, I voted to raise the monetary policy rate (MPR) at the January \n2023 meeting of the Monetary Policy Committee (MPC). Details of my \nconsideration and decision are presented subsequently. \n \nFrom 1.39 per cent in November, m-o-m inflation rose to 1.71 per cent in \nDecember 2022. This development may be partly attributed to the usual surge \nin demand owing to year-end festivities. Nevertheless, at over 20.0 per cent, \ninflation certainly remains a constraint on growth and savings and may be \npartly responsible for the weakening outlook for economic growth. This is an \nadditional ground for prioritizing disinflation at this time. \nThe fundamental driving forces of inflation have remained active. The naira \nexchange rate has depreciated significantly in the last one year – from about \nN416/US$ in January 2022 to N461/US$ in January 2023 due to increased \ndemand, and supply shortages in the foreign exchange market. Similarly, \nexcess liquidity underpinned by increased private and public spending \ncontinues to be at the heart of the inflation challenge. \nUp to November 2022, key monetary aggregates grew in excess of their \nprogrammed levels by significant margins. A key money market rate, the open \nbuy back (OBB), trended downwards in December pointing also to a surfeit of \nliquidity in the banking system. Although today’s inflation is not entirely driven \nby money, elevated liquidity levels could undoubtedly exacerbate it; hence \nthe need to deploy measures to bring it under control. This is especially \nimportant in view of the uptick in political activities and campaign spending \ntowards the general elections scheduled to take place in the first quarter of \n2023. \n \nThe outlook for fiscal policy remains inclement. The envisaged deficit in 2023 is \nlarge and may be financed in part by the banking system. As at end November \n2022, banking system net claim on Government had grown by about 63.58 per \n \n \ncent relative to end-2021. Fiscal 2023 could see a more rapid growth in the \naggregate unless financing conditions in the domestic economy tighten. \nUltimately, government revenue must improve to complement monetary policy \ntowards reining-in inflation. \n \nAdditionally, staff forecasts up to March 2023 suggest a slow-paced moderation \nin inflation. Further tightening of the policy stance should improve the pace by \ndampening consumer demand and exchange rate depreciation pressures. This \npartly explains why most EMDEs central banks are not relenting in tightening \nmonetary policy. Also, I view a tight monetary policy stance in the domestic \neconomy as a reasonable response to rising yields in the advanced economies. \nDoing so should curtail the straining effect of tight financial conditions abroad \non capital inflow. \n \nFinally, the outlook for real GDP growth, though a bit softening, continues to \nprovide some room for policy action on the inflation side. Of course, this entails \na delicate balancing act in the monetary policy sphere. I urge the fiscal \nauthorities to continue to complement the Bank’s catalytic actions in the real \nsector to sustain economic growth. \n \nI believe that the risks to financial stability of further tightening are generally \nmuted. The banking system continues to be resilient with major financial \nsoundness indicators (FSIs) comparing favourably with prudential thresholds. \nThe industry is well capitalized (13.76 per cent in December 2022) and liquid \n(44.12 per cent in December 2022). Asset quality continues to improve with non-\nperforming loans ratio at 4.2 per cent in December 2022, when viewed against \nthe prudential benchmark of 5.0 per cent. \n \nI, therefore, voted to: \n1. Raise the MPR by 100 basis points to 17.5 per cent. \n2. Retain the asymmetric corridor at +100/-700 basis points. \n \n \n3. Retain the CRR at 32.5 per cent. \n4. Retain the Liquidity Ratio at 30 per cent. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2. ADENIKINJU, ADEOLA FESTUS \nInternational Economic Developments \nThe headwinds facing the global economy have not changed much since the \nlast meeting of the MPC in November 2022. The Russian-Ukrainian war is \nongoing, China is yet to fully resolve the latent crisis from Covid-19 pandemic, \nthe economies of most Advanced Economies remain weak, inflation is still \nelevated in most countries and remain above the target rates in most countries. \nGlobal GDP growth is forecasted to decline from 2.9% in 2022 to 1.7% in 2023. \nThe World Bank has projected that one-third of the global economy is at a risk \nof recession in 2023. National debts are at all-time high, accentuated by \nincrease in the costs of debt service for EMDEs. Although, inflation is dissipating \nin the US, the US Fed has not paused its policy rates increase. The Fed increased \nits benchmark policy rate in 2022 by a cumulative amount of 425 basis points, \nU.K. by 325 basis points, Egypt by 425 basis points, Nigeria by 500 basis points, \nand Ghana by 1250 basis points. \nGlobal Composite Output inched up a little from 48.0 index points in November \n2022 to 48.2 index points in December 2022. However, the index was still below \n50 index points. Global Manufacturing PMI declined to a 48.6 index points in \nDecember 2022, a 30-month low level. Global services sector PMI remained \nunchanged between December 2021 and previous month, at 48.1 index points. \nGlobal trade growth is expected to decelerate from 4.0% in 2022 to 1.6% in 2023. \nGlobal Commodity prices remained soft as demand moderates. Global stocks \nrose in December 2022 boosted by the recent reopening in China. Most \nnational currencies depreciated against the US dollars. Global financial \nconditions tightened in 2022, leading to capital outflow from EMDEs. This will \ncontinue to pose a major constraint to FDI flows to EMDEs in 2023. \nDomestic Economic Developments \n \n \nThe Macroeconomic Developments and Outlook Report presented by CBN \nStaff shows mixed developments in the economy. Real GDP grew by 2.25% in \n2022Q3, driven primarily by the non-oil sector - services and agriculture. At the \nsame time, the Oil sector contracted by -22.67%., mainly due to decline in \naverage oil production from 1.57mbd in 2022Q2 to 1.20mbd in 2022Q3. In \naddition, indicators of economic activity remained subdued in December 2022, \nmonth-on-month. Composite PMI at 49.4 index points was below 50.0 index \npoints. This was largely due to relatively low activities in the industrial and \nservices sectors. The World Bank forecast Nigeria’s real GDP growth to decline \nto 2.9% in 2023. The slow growth is because of the effects of flooding, the tight \nfiscal space and rise in borrowing costs, security challenges and moderation in \noil prices. \nInflation figures released by the NBS showed that headline inflation decelerated \nfrom 21.47% in November 2022 to 21.34% in December 2022 (y-o-y). Food \ninflation also declined year on year from 24.13% in November 2022 to 23.75% in \nDecember 2022. However, core inflation rose from 18.28% in November 2022 to \n18.49% in December 2022. \nThe NSE All-Share Index recorded positive performance due to improved \ninvestor sentiments, bargaining hunting activities of investors and expectations \nof a market rebound in 2023. \nOn monetary sector and financial markets developments, broad money M3 \ngrowth, accelerated from 16.29% in November 2022 to 17.32% in December \n2022. Monetary base rose from N15, 263.89 billion in November 2022 to \nN16,032.06 billion in December 2022, as against the 2022 benchmark of \nN15,094.69 billion. The growth in broad money was due to increase in Net \nDomestic Asset, while the increase in Monetary base was driven by increase in \nCash Reserve Requirements. Interest rate spread month-on-month widened to \n23.42% in December 2022, as maximum lending rate increased from 28.14% to \n29.13% and average savings rate rose from 3.93% to 4.13% between November \nand December 2022, respectively. \n \n \nIn the external sector, the naira depreciated against the dollars by 1.15% from \nN445.58 to a dollar in November 2022, to N450.71 to a dollar in December 2022. \nNet foreign exchange flow through the economy in November 2022 stood at \nUS$2.017 billion compared with US$1.743 billion in October 2022. Gross external \nreserves declined by 9.1% to US$36.5 billion in December 2022 from US$40.2 \nbillion in December 2021. \nThe fiscal side remained problematic. The 2023 FGN budget projects a total \nexpenditure of N21.83 trillion, and a total revenue of N10.49 trillion, giving a \nbudget deficit of N11.34 trillion. While the Non-oil revenue is expected to \ncontribute N2.43 trillion, the Oil sector is expected to contribute N2.23 trillion. The \nexpected budget deficit will lead to an increase in the Public Debt, and debt \nservicing, that already took a significant share of government revenue. \nThe Banking System Stability Review Report was also presented at the meeting. \nThe various Financial Soundness Indicators (FSI) showed that the banking \nsystems remain safe, sound, and resilient. All the FSIs were within the prudential \nrequirements and compared well with comparator countries. NPLs ratio fell from \n4.9% in September 2022 to 4.2% in December 2022. Capital Adequacy Ratio \nremained unchanged at 13.8%. ROE rose to 202% in December 2022 from 18.4% \nin September 2022. Total operating cost to total operating income declined \nfrom 74.6% in September 2022 to 74.1% in December 2022. \nAll measures of industry aggregates: assets, deposits and credit rose year on \nyear. Total assets of the banking industry grew by N14.36 trillion between end-\nDecember 2021 and 2022. Similarly, industry credit increased by N5.14 trillion \nover the same period. In addition, total industry deposits rose by N7.08 trillion \nbetween end-December 2021 and 2022. In December 2022, a total of 130,854 \nnew credits valued at N947.46 billion were granted to various customers. \n My Concern \nThe deceleration in the inflation rate in December 2022 is a welcome \ndevelopment and could be a reflection that the measures put in place by the \n \n \nMPC and the CBN management to contain inflation is working. However, a \nsingle data point is not sufficient to make any firm conclusion. We must wait for \nJanuary 2023 inflation figures and for subsequent months ahead to make a firm \nconclusion. It is therefore too early to remove the foot from the pedal at this \nmeeting. This is particularly so, because month-on-month, headline inflation is \nstill rising. Moreover, Nigeria’s inflation figure, at 21.34% is still one of the highest \nin the world. \nThe fall in inflation expectation in December 2022 suggested that the Nigerian \npublic have confidence by the actions of the monetary authority to rein in \ninflation. \nWe cannot attribute the current high inflation level solely to supply and \nstructural factors. Data presented in the Macroeconomic Developments and \nOutlook Report showed that there was excess liquidity in the system in \nDecember 2023. Growth in broad money (M3) rose faster than the provisional \nbenchmark. This was driven primarily by the growth in domestic claims. The \ngrowth in the domestic claims was driven by net FGN operations, FAAC, Net SLF \nand Net Development Finance Department disbursements. Open market \noperations conducted during the period also increased the liquidity in the \nsystem. \nThe 2023 budget is going to be financed largely by deficit, which is likely to \nfurther drive-up liquidity in the system. Although, it is safe to assume that the \nimpacts of the 2023 elections on liquidity expansion may be muted because of \nthe implementation of the CBN Naira redesign policy. \nThe inflation threshold analysis carried out by the CBN Research Department \nhas shown that inflation rate in excess of 15% is deleterious to economic growth. \nSimilarly, the study shows that raising MPR to 17.5% is likely to bring inflation rate \ndown to 14.98% by 2023Q2, all things being equal. \n \n \nI have firm belief that if we could subdue inflation, we are more likely to address \npart of the exchange rate challenges we have, and in the long run create the \nenvironment for investment and economic growth in the economy growth. \nI hope the FGN will follow through with its plan to remove fuel subsidy towards \nthe second half of the year. This will reduce the fiscal pressure on the \ngovernment, and it will also stimulate massive investments in the petroleum \ndownstream sector and help realise the PIA goals. The removal of fuel subsidy \nmay trigger initial flurry of increases in prices of commodities. However, this short-\nterm impact in price increases will fizzle out in time, because of demand \nadjustments and supply expansion in the fuel market in response to price signals. \nHowever, a successful policy on subsidy must come with other complementary \npolicies like full liberalization of the sector, as well as compensatory mechanisms \nfor the vulnerable people in the economy. \nMy Vote \nThe MPC needs to sustain the current tight monetary policy stance to dampen \ninflationary pressures. The decline in headline inflation rate for December 2022 \ndoes not yet guarantee that this is a permanent shift in the inflationary trend in \nNigeria. Hence, I cast my vote to increase the MPR by 100 basis points, while \nmaintaining all other monetary parameters at their extant values. Hence, I vote \nto: \n1) Raise MPR by 100 basis points to 17.5% \n2) Retain CRR at 32.5% \n3) Retain LR at 30% \n4) Maintain asymmetry corridor around the MPR at +100/-700 basis points. \n \n \n \n \n \n \n \n \n \n3. AHMAD, AISHAH N. \nThe headwinds that characterized the global economy following Russia’s \ninvasion of Ukraine and lingering effects of the COVID-19 pandemic are \npersisting into 2023 with rising uncertainty. Output in many countries declined \nsharply in 2022, with threats of a global recession, driven by several factors \nincluding increased volatility in commodity prices, tightened financial \nconditions as central banks raised rates to curb inflation, which has remained \nwell above historic levels in many global economies, and some country specific \nchallenges. \nIn addition, intensified disruptions to the energy market, resurgence of the \nCOVID-19 pandemic in China, exchange rate pressures in most Emerging \nMarket and Developing Economies (EMDEs) and concerns over debt \nsustainability, cast shadows on global economic prospects. Prompted by these \ndevelopments, the International Monetary Fund (IMF), in its October 2022 World \nEconomic Outlook, further downgraded output growth forecast for 2023 to 2.7 \nper cent compared with 2.9 per cent in its July 2022 forecast, while the World \nBank projected a much lower global growth rate of 1.7 per cent for 2023 – the \nthird weakest pace in the last three decades. \nAlthough inflation is projected to gradually moderate over the course of the \nyear, especially in the United States, which may prompt slower rate hikes by the \nFed, underlying inflation drivers – pent up demand, supply chain disruptions and \nspillover effects from the Russia Ukraine war, are expected to persist in the near \nterm. Central banks worldwide, must, therefore, sustain the resoluteness to bring \ninflation under control, in view of its adverse implications for global economic \nrecovery. Ultimately, ending the Russia-Ukraine crisis is critical for broad-based \nand lasting global economic recovery. \nIn the domestic economy, high inflation continues to be a major challenge, \ndespite a cumulative 500bps policy rate hike over 2022 by the monetary \nauthority. In line with the tight monetary policy stance since May last year, \n \n \nmarket interest rates begun to rise while the pace of development finance \ninterventions by the Bank has slowed to curb monetary induced inflation. Yet, \nheadline inflation (year-on-year) remains sticky, falling marginally to 21.34 per \ncent in December 2022 from 21.47 per cent in November 2022. Month-on-\nmonth, headline inflation however, increased to 1.71 per cent in December \n2022 from 1.39 per cent in the preceding month, due to a rise in consumer \nspending during the festive period. \nThe food component dropped marginally to 23.75 per cent in December 2022 \nfrom 24.13 per cent in the previous month, driven by suppressed demand and \ndecline in prices especially in processed and imported food items. Core \ninflation (year-on-year) rose to 18.49 per cent from 18.24 per cent over the same \nperiod, due to increase in import costs from high global inflation, and increased \nproduction, transport, and logistics costs. \nClearly, the trajectory of inflation is still uncertain, while underlying drivers of \nsurge in domestic prices – supply side disruptions, high energy costs and rise in \nliquidity levels - remain elevated. Broad money (M3) exceeded the 2022 \nprovisional benchmark of 15.21 per cent at 17.32 per cent in December 2022, \ncompared with 16.29 per cent in the previous month. This highlights the \nimportance of policy rate hikes by the MPC to curb domestic inflation trends, \nwhile efforts to ramp up food production are being sustained. \nThe economy has continued on a path of positive growth for eight consecutive \nquarters, driven largely by support from the Bank and the fiscal authority to \noutput enhancing sectors. Based on data from the National Bureau of Statistics, \nReal Gross Domestic Product (GDP) grew by 2.25 per cent (year-on-year) in the \nthird quarter of 2022, compared with 3.54 per cent in the second quarter of \n2022 and 4.03 per cent in the corresponding period of 2021. \nStaff projections indicate that output growth recovery is expected to continue \nreasonably into 2023, given the expected sustained positive performance \nduring the fourth quarter of 2022 and steady rebound in economic activities. \n \n \nThe optimism is further supported by the marginal improvement in the \ncomposite Purchasing Manager’s Index (PMI) from 49.0 index points in \nNovember 2022 to 49.4 index points in December 2022, although it remained \nbelow the 50.0 index points threshold. Continued policy support is therefore \ncrucial to strengthen output performance and preserve this positive output \ngrowth trajectory. \nExternal reserves position remained relatively stable at US$36.50 billion at end-\nDecember 2022 providing support for the balance of payments position which \nrecorded a surplus position in the first and second quarters of 2022 with a \nmarginal deficit of US$1.44 billion in the third quarter of last year, despite \nchallenges with foreign exchange supply. \nThe inherent risk of capital flow reversals and exchange rate pressures, on the \nback of monetary policy normalisation in many advanced economies is a key \nconsideration for policy makers in EMDEs. However, the effect on external \nreserves should be moderate in view of the tepid foreign portfolio inflows \nrecorded in recent years, notwithstanding the relatively high domestic yields. \nInitiatives aimed at boosting domestic exports and opening sustainable \nchannels of foreign exchange supply remain imperative and must continue to \nbe pursued to ensure effective exchange rate management and stability in the \nlong term. \nThe financial system has provided significant support for needed domestic \neconomic resilience amidst global shocks and remained strong into 2023. Data \nprovided by Bank staff indicated stability in broad soundness indicators and an \nunprecedented improvement in asset quality, even as credit to the private \nsector continued to grow. Capital adequacy as of December 2022 was robust \nat 13.83 per cent, 383 basis points above the regulatory minimum of 10 per cent. \nIndustry liquidity was also strong at 44.10 per cent over the same period and \nsupported by significant cash reserve requirement buffers available to provide \nliquidity backstops, should banks require it. \n \n \nKey industry aggregates also continued their year-on-year upward trajectory \nwith total assets rising to N73.59trillion in December 2022 from N59.24 trillion in \nDecember 2021, while total deposits rose to N45.50trillion from N38.42trillion over \nthe same period. Total credit also increased by N5.14 trillion between end-\nDecember 2021 and end-December 2022 with significant growth in credit to \nmanufacturing, General commerce and Oil & Gas sectors. This impressive \nincrease was achieved amidst continued decline in non-performing loans ratio \nfrom 4.90 per cent in December 2021 to 4.20 per cent in December 2022. \nThe sector also benefitted from ingenious Initiatives such as the naira redesign \nand revised cash withdrawal limit policies, all expected to strengthen the \nbanking channel of monetary policy transmission. \nFurthermore, results of stress tests showed resilience of banks’ solvency and \nliquidity ratios in response to potential severe macroeconomic shocks. \nHowever, the Bank must remain vigilant to proactively manage probable \nmacro risks to the financial system arising from spillover effects of global \nheadwinds and domestic vulnerabilities, in view of the financial system’s \nstrategic role in driving sustainable economic recovery. \n \n \nPolicy Decision \nProspects for the global economy remain hazy and continue to be \novershadowed by the war in Ukraine and its fallouts, alongside lingering effects \nof the pandemic and intense inflationary pressures. Globally, incomes are being \nplundered as cost of living continues to rise, with nearly all the gains of post-\nCOVID-19 recovery eroded. \nFor Nigeria, despite sustained rate hikes by the monetary authority since May \n2022, liquidity levels in the economy have not altered sufficiently. Annualized \ngrowth rates of key monetary aggregates exceeded annual targets in 2022, \n \n \nwhile real interest rates remain negative in view of the persistently high inflation. \nAlthough headline inflation declined marginally year-on-year in December \n2022, it remains significantly high at 21.34 per cent, with an uncertain outlook \nespecially with the core component of inflation. \nThe rather slow transition in these indicators is worrisome even though monetary \npolicy instruments impact the economy with a lag, which in the case of Nigeria \ncould stretch up to eight (8) quarters. Nonetheless, sustaining the tightening \nstance, in my view, is important to over time reverse the trend of domestic prices \n– the key remit of the monetary authority - given its adverse implications for real \nincomes, threat to output growth, and overall economic activities. \nThus, I vote to increase the Monetary Policy Rate by 100bps to 17.5 per cent \nfrom 16.5 per cent; retain the Cash Reserve Ratio (CRR) at 32.5 per cent; retain \nthe Liquidity Ratio (LR) at 30.0 per cent; and retain the asymmetric corridor at \n+100/–700 basis points around the MPR. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4. ALIYU, AHMED \nThe year 2022 was very challenging for the world economy as it struggled with \nheadwinds occasioned by unabating COVID-19 pandemic in China – an \ninfluential global economy, as well as the fallouts of geopolitical tensions \nbetween Russia and Ukraine. These factors combined to impair the global \nsupply chain and trigger an unprecedented surge in inflation. Expectedly, the \nrisks to the global economy were on the downside for the greater part of the \nyear. \nAlthough, the harsh economic environment appears to be abating following \nthe easing of supply chain disruptions as China reopens its economy, this \ncoupled with the moderation in inflation; growth is expected to remain \nsubdued in 2023. This is because the continued tightening of monetary policy \nby many Advanced Economies and Emerging Market and Developing \nEconomies (EMDEs) central banks to fight inflation, coupled with the health \nchallenges in China, and the ongoing Russia-Ukraine war, are potentially \ncapable of restraining global economic recovery, as output gap widens, and \ndebt distress worsens. \nIn consideration of these macroeconomic fragilities and uncertainties, the IMF \nin its January 2023 World Economic Outlook (WEO) update, forecasts global \ngrowth to decline from an estimated 3.4 percent in 2022 to 2.9 percent in 2023 \nand thereafter rise to 3.1 percent in 2024. Specifically, growth in the Advanced \nEconomies is forecast to decline from 2.7 percent in 2022 to 1.2 percent in 2023 \nand further to 1.4 percent in 2024; while in the EMDEs, growth is projected to rise \nslightly from 3.9 percent in 2022 to 4.0 percent in 2023 and further to 4.2 percent \nin 2024, supported by the relaxation of lockdown restrictions in China, boost \nfrom pent-up demand and likely upward movement in commodity prices. \nOn price developments, inflation has begun to decline globally, albeit, at a \nmarginal rate. The moderation in prices is supported by the modest \ndeceleration in energy and commodity prices; and weaker demand, amidst \n \n \nslight easing of the impediments to supply chain. Amongst the Advanced \nEconomies, the US inflation rate declined to 6.50 percent in December 2022 \nfrom 7.10 percent in November 2022. Similarly, the Euro Zone inflation rate \ndeclined to 9.20 percent from 10.10 percent and the UK to 10.50 percent from \n10.70 percent, in the same period. The current development suggests that \nmonetary policy tightening has started to have downward impact on demand \nand inflation. In Advanced Economies, the IMF projects annual average \ninflation rate to decline from 7.3 percent in 2022 to 4.6 percent in 2023 and \nfurther to 2.6 percent in 2024, above their medium to long term targets. \nIn the case of EMDEs, annual inflation is projected to decline from 9.9 percent \nin 2022 to 8.1 percent in 2023 and 5.5 percent in 2024. The index is expected to \nremain above central banks targets, on the back of high prices of food and \nenergy, and other inputs especially in local currency terms. The depreciation of \ntheir currencies against the US dollar, could further exacerbate inflationary \npressure and weaken economic activities. Consequently, global inflation is \nexpected to decrease from 8.8 percent in 2022 to 6.6 percent in 2023 and 4.3 \npercent in 2024, even though, above the pre-pandemic levels of 3.5 percent \n(IMF WEO, January 2023). \nWhilst most central banks are near the end of their rate hike cycles and may \nslow down the pace of policy rate increases in 2023, they have signalled \nintentions to maintain a tight monetary policy stance, in the resolve to bringing \ninflation rate down to their medium to long term targets. Tight global financial \nconditions in 2023, portend significant contraction of capital flows to EMDEs. In \naddition, high lending rates and strong US dollar will increase the cost of debt \nservice for EMDEs, thus, heightening the risk of default. \nThe lacklustre economic conditions and uncertainties have continued to put \ndownward pressure on global trade. The World Bank January 2023 Report, \nindicated that global trade may decelerate further to 1.6 percent in 2023, \nlargely reflecting weakening global demand. Trade is envisaged to be \n \n \nparticularly subdued in EMDEs with strong trade linkages to major economies \nwhere demand is expected to slow rapidly. \nTHE DOMESTIC ECONOMY \nOn the domestic side, the positive growth recovery which commenced since \nthe 2020 recession, was sustained, through Q3 2022. Real Gross Domestic \nProduct (GDP) year-on-year grew by 2.25 percent in Q3 2022 from 3.54 percent \nin Q2 2022. The slower growth in Q3 2022 compared with the preceding quarter, \nwas due to base effects of the past recession. On quarter-on-quarter, real GDP \ngrew by 9.68 percent in Q3 2022. Other indicators of economic activity \nremained subdued in December 2022. For instance, aside from marginal \nimprovements in the Purchasing Manager’s Index (PMI) of the Services and \nIndustrial subsectors, Agricultural sector PMI declined. On a general scale, \nComposite PMI increased marginally from 49.0 index points in November 2022 \nto 49.4 index points in December 2022, which is below the 50-index points \nbenchmark. The output gap was negative, although, projected to narrow by \n0.48 percentage points from -7.73 percent in Q3 2022 to -7.25 percent in \nQ4 2022, respectively. \nInflation rate, remained elevated, despite the moderate deceleration in \nDecember 2022, driven by demand pressures and supply shocks. Headline \ninflation (year-on-year) decreased to 21.34 percent in December 2022 from \n21.47 percent in November 2022. This, no doubt, is a welcome development, \nconsidering that the index has been rising since January 2022. The marginal \ndecline is attributable to the tight monetary policy stance of the recent past, \nwhich has begun to anchor inflation expectations and suppress demand. It is \nnoteworthy, that month-on-month, the index rose to 1.71 percent from 1.39 \npercent in November 2022, due to seasonal demand for goods and services. \nSimilarly, the core component of inflation, which is all Items less farm produce \nand energy CPI, rose to 18.49 percent year-on-year, from 18.24 percent in \nNovember 2022, due to rising cost of production, associated with high energy \nprices. However, food inflation declined to 23.75 percent in the same period, \n \n \nfrom 24.13 percent in November 2022, due to reduced demand for processed \nfood items. \nMonetary aggregates indicate high level of liquidity in the system, as broad \nmoney supply (M3) grew by 17.32 percent year-to-date (2.11 basis points, \nabove the 2022 provisional benchmark of 15.21 percent). The development is \nattributed to the increase in Net Domestic Assets (NDA), which was spurred by \nthe increase in Net Claims on Government and Net Claims on Other Sectors. \nOn interest rate movements, Open Buy Back (OBB) transactions and rates at \nthe interbank market moderated, reflecting liquidity conditions in the banking \nsector, on account of increased cash deposit in line with the currency redesign \nprogramme of the CBN and Matured CBN Bills. \nOn the external sector front, gross external reserves stood at US$36.5 billion as \nat December 2022 compared with US$40.2 billion in December 2021. The \nReserves could cover 6.21 months of import of goods and services or 8.79 \nmonths of imports of goods only. \nFinancial Soundness Indicators revealed salutary outcomes in the review \nperiod. Industry Capital Adequacy Ratio (CAR) at 13.8 percent at end-\nDecember 2022, was above the 10 percent prudential requirement. Liquidity \nratio at 44.1 percent was above the 30 percent regulatory requirement. Also, \nNon-Performing Loans (NPLs) improved to 4.2 percent in the review period, \ncompared with the regulatory minimum of 5 percent. Return on Equity (ROE) \nand Return on Assets (ROA) both rose by 20.2 percent and 1.6 percent in \nDecember 2022, from 18.4 and 1.5 percent in September 2022, respectively. \nGross Credit rose by N5.14 trillion or 20.93 percent between end-December 2021 \nand 2022, due to increased industry funding base, CBN’s directive on LDR, and \nbusiness strategy and competition. \nCONSIDERATION FOR VOTING \nThe current tight stance of monetary policy may have started to have impact \non domestic prices. Though marginal, headline inflation has begun to decrease \n \n \nand is likely to decline rapidly over the medium term, given the lags in monetary \npolicy transmission. Nevertheless, inflationary pressures remain persistent, from \nthe pass-through effects of elevated inflation in Advanced Economies, rising \nenergy prices, global supply chain disruptions, local currency depreciation \nagainst the U.S. dollar, and heightened inflation expectations. \nWhilst it is a delight to see inflation slowing, a month’s tepid decline, does not \nprovide sufficient assurance to conclude at this January 2023 meeting that \nmonetary policy tightening has reached a saturation point to justify a sudden \nhalt or less aggressive action. \nAlthough, the National Bureau of Statistics (NBS) inflation outlook for January \n2023, suggests a continued moderation in domestic price development, given \nthe relative stability in the exchange rate and the reviewed cashless policy; \nthere are considerable uncertainties around this forecast, considering that \nongoing scarcity and unofficial increases in the price of PMS across the country, \ncoupled with the likelihood of huge pre-election spending, could constitute \nupside risks to inflation. \nWhilst the slower growth in real GDP (year-on-year), has been attributed to the \nbase effects of the past recession, one may be inclined to argue that further \npolicy tightening could roll back the growth recovery, as credit and investment \nare hindered. Important as economic growth may be, the primacy of price \nstability as a core objective of the central bank remains sacrosanct. At this \nperiod of persisting global economic and policy uncertainties, and in which \ndomestic demand pressures and supply shocks remain immediate concern, \npriority for the central bank, is achieving sustained decline in inflation, with \ntighter monetary conditions. Whereas the economy has been subject to a \nlegacy of crisis caused by the COVID-19 pandemic and the Russia - Ukraine \nwar, monetary policy should remain steadfast in adjusting to these shocks to \nensure that inflation is sustained within its long run target of 6 – 9 percent, and \nthat inflation expectations are firmly anchored, over the medium term. \n \n \nCentral Banks in the Advanced Economies, despite the abatement of headline \nCPI, are not abandoning tightening and interest rate normalization as yet. Even, \nmore EMDEs are maintaining policy tightening till such a time when inflation \nbecomes subdued. It is noteworthy, that real interest rate is still negative, in \nrelation to comparator countries, which has consequences for foreign capital \ninflows and foreign exchange management. \nI would like to mention that to complement the efforts of the monetary authority \nto tame inflation, the fiscal authority is making several efforts at boosting \nrevenue generation through various tax reforms, public debt recovery and \nexpenditure management measures, among others. \nIn the light of the foregoing, I am of the opinion that we maintain our aggressive \napproach to rein-in inflation. I, therefore, vote for a 100 basis points increase in \nthe MPR from 16.5 to 17.5 percent, while leaving other policy parameters at \ntheir extant levels. \n \n \n \n \n \n \n \n \n \n \n \n \n5. ASOGWA, ROBERT CHIKWENDU \nBackground: \nPrior to the January MPC meeting, two key issues dominated policy discussions. \nFirst, there are growing concerns about the impact of cumulative interest rate \nhikes across the globe since 2022 which may lead to global economic recession \nin 2023. Second, is the weak pace of moderation for inflation rates which is \nslower than expected with many countries still battling elevated cost pressures, \ndespite the strong monetary tightening regime in place. Needless to say, both \nof these concerns present policy makers with a dilemma especially on future \ninterest rate paths. The alternatives are either to continue raising interest rates \nat the same pace or at a slower pace or even to pause the rate hikes so as to \nassess the impact of earlier cumulative rate hikes. Recent monetary policy \nannouncements especially at end 2022 and early 2023 suggest a mixture of \npolicy choices amongst leading central banks in advanced and emerging \nmarket economies. Our decision at this MPC meeting should therefore take \nthese concerns into account while reflecting on recent economic and financial \ndevelopments at both global and domestic levels. \nGlobal Economic Developments: \nGlobally, economic growth slowed in the last quarter of 2022, probably \nweighed down by elevated cost pressures and the resultant policy rate hikes in \nmany countries. Besides, COVID-19 related disruptions in China and the \nongoing Russia-Ukraine war have also contributed to the weakening of growth. \nPreliminary fourth quarter 2022 output estimates suggest subdued global \neconomic activity when compared with the output figures for the third quarter \nof 2022. In the Euro area for instance, GDP grew by 0.1 percent in the last \nquarter of 2022 compared with 0.3 percent growth in quarter three, while in \nChina, GDP grew by 2.9 percent in the fourth quarter of 2022 which is lower than \nthe 3.9 percent growth rate recorded in the third quarter of 2022. In South \nKorea, GDP contracted by 0.4 percent in the fourth quarter of 2022 following a \n \n \n0.3 percent growth in quarter three of 2022, which is the first contraction since \nthe second quarter of 2021. In the USA, GDP grew by 2.8 percent in the fourth \nquarter of 2022, lower than the 3.2 percent growth recorded in the third quarter. \nThe current projection is for a further slowdown in 2023 especially as the \ndownside risks including ongoing geopolitical tensions and the tight financial \nmarket conditions persist. High frequency indicators including the purchasing \nmanager’ index (PMI) and household consumption have also moderated in \nrecent times. The global manufacturing PMI declined to a 30-month low of 48.6 \nindex points in December 2022 from 48.8 index point in November 2022. These \nhave probably lead to recent downgrades in growth forecasts. The World Bank \nhas slashed its 2023 global growth forecast to 1.7 percent for 2023 from its earlier \nprojection of 3 percent, which is the slowest growth rate outside of the 2009 and \n2020 recessions. Similarly, recent estimates by the IMF suggest that global \ngrowth will slow from 3.4 percent in 2022 to 2.9 percent in 2023. \nGlobal Inflation remains broad-based and at multi year highs in many countries \ndespite recent moderations in key advanced and emerging market \neconomies. CBN staff report shows that in the United States, month-on-month \ninflation decelerated by -0.1 percent in December 2022 compared with 0.1 \npercent in November while the year-on-year measure also fell to 6.5 percent in \nDecember 2022 compared with 7.1 percent in November. In the UK, month-on-\nmonth inflation declined to 0.4 percent in November 2022 compared with 2.0 \npercent in the previous month, while on a year-on-year basis, inflation \ndecelerated to 10.7 percent in November compared with 11.1 percent in the \nprevious period. In the Euro Area, month-on-month inflation contracted to -0.3 \npercent in December 2022 compared with -0.1 percent in November, while on \na year-on-year basis, it reduced to 9.2 percent in December 2022 compared \nwith 10.1 percent in November. There were also inflation decelerations in \nJapan, China, South Africa and Brazil in December 2022 while it accelerated in \nGhana and Egypt during the same period. Going forward, global inflation is \nprojected to decline further in the first quarter of 2023 as supply side pressures \ncontinue to dissipate along with declines in energy prices. \n \n \nVolatility in the global financial markets appears to have reduced in 2023 when \ncompared with the condition at the last MPC meeting in November 2022, \nreflecting largely higher market optimism. The US dollar has consistently \nweakened against many currencies, while capital flows to emerging \neconomies have increased with stock market indices also rising in a number of \ncountries. CBN staff report shows that recently, the British Pound and the Euro \nappreciated against the US dollar, while in Asia, the Japanese Yen, Chinese \nYuan and Indian rupee all appreciated against the US dollar. In Africa however, \nwhile the Nigerian naira, the Egyptian pound and the Kenya shilling all \ndepreciated against the US dollar, the South Africa rand appreciated against \nthe US dollar. Stability is also gradually returning to global equity markets with \nmany recording positive daily market improvements since December 2022. \nThere have been a mix in terms of policy response by global central banks with \nseveral countries continuing the process of monetary tightening but in a less \naggressive path. At the last policy rate meeting, the US Fed dialled back the \ntempo of rate hikes to 50 basis points after four consecutive 75 basis point hikes. \nIn the Euro Area, the rate hike tempo has also dropped from 75 basis points to \n50 basis points in December 2022, while Indonesia also decelerated from 100 \nbasis points hike in October to 75 basis points hike in December 2022. South \nAfrica moved from a 75 basis points hike in November 2022 to a 25 basis points \nhike in January 2023. While the Central Banks of Korea, Peru and Thailand all \nraised policy rates in January 2023 by 25 basis points, the Central Banks of Chile, \nMalaysia, Norway and Sri Lanka left policy rates unchanged in January 2023. \nOverall, a less hawkish policy stance is expected amongst global central banks \nin 2023 but the scale would likely be informed by the prevailing conditions and \ntheir implications for each country’s domestic inflation and growth outlook. \nDomestic Economic Developments: \nThe Nigerian economy is projected to make a gradual recovery in 2023 given \nthe expected improvements in domestic supply conditions and in the external \nsector. Latest high frequency data on the economy indicate relative expansion \n \n \nin the fourth quarter of 2022 with GDP growth rate expected to exceed the third \nquarter levels. The third quarter of 2022 output figures show a moderation to \n2.25 percent from the 3.54 percent in the second quarter of 2022. At the time \nof this MPC meeting, the figures for 2022 fourth quarter GDP growth are yet to \nbe released, but improvements in the composite purchasing managers index \n(PMI) and the manufacturers CEO confidence index point towards a stronger \nlast quarter performance in 2022. The composite purchasing manager’s index \n(PMI) stood at 49.4 index points in December 2022, up from 49.0 index points in \nNovember 2022 which was due to marginal improvements in the industry and \nservice sectors. However, despite the optimism on Nigeria’s growth prospects \nfor 2023, there are still significant downside risks stemming from external factors, \nespecially the global supply chain which directly affects commodity prices. \nNigeria’s headline inflation rates (year-on-year) declined marginally for the first \ntime in close to twelve months with food inflation decelerating from 24.13 \npercent in November to 23.75 percent in December 2022, while core inflation \nincreased from 18.24 percent in November to 18.49 percent in December 2022. \nThe month-on-month rates are however different as both headline and food \ninflation increased in December 2022, while core inflation decreased in the \nsame period. This marginal downward adjustment in headline and food \ninflation (year-on-year) are expected to continue through the first quarter of \n2023 with expected improvements in domestic supply conditions and the \nexisting tight monetary conditions despite threats of election related spending. \nThere is however the risk of core inflation remaining sluggish at high levels for \nlonger periods owing to potential increases in pass through amid lingering \nglobal cost pressures. \nThe domestic financial sector remains resilient similar to the position at the last \nMPC meeting. Deposit money banks maintain high capital adequacy ratio at \n13.8 percent in December 2022, same as in September 2022, with non-\nperforming loans declining further from 4.9 percent in September 2022 to 4.2 \npercent in December 2022. The total banking industry deposits and credit \n \n \nincreased between September and December 2022. The equities market \nbounced back strongly with the All-Share Index increasing by 19.98 percent \nbetween end-October 2022 and end-December 2022 while market \ncapitalization also increased by 16.91 percent during the same period. CBN \nstaff report attributes this improved performance to the ‘release of better-than \nexpected corporate earnings results and bargain hunting activities of investors’. \nThe external sector position may have deteriorated recently in comparison with \nthe situation at the last MPC meeting. In the third quarter of 2022, the balance \nof payments recorded a deficit representing -1.15 percent of GDP, but in the \nsecond quarter of 2022, it had a surplus equivalent to about 0.08 percent of \nGDP. This negative outturn emanated from the current account balance which \nrecorded a deficit of about -4.60 percent of GDP in the third quarter of 2022 \nafter five consecutive quarters of positive surplus. The deficit is attributed to \nexport earnings decline in the third quarter of 2022 even with the substantial \ncompression of merchandise imports. As a result, the domestic foreign \nexchange market performance is at variance with global trend of other \ncurrencies which has lately appreciated against the dollar. At the I&E window, \nthe naira has consistently depreciated against the dollar since the third quarter \nof 2022. In December 2022, the naira depreciated by 1.15 percent (month-on-\nmonth) and by 3.04 percent (year to date). The foreign exchange market \nturnover however increased during this period as net foreign exchange flow \nrose despite the tight supply conditions with declining external reserves position. \nThe external sector outlook for 2023 is however positive despite these current \nchallenges given the resurgence of oil prices and domestic oil and gas output \nwhich will definitely enhance export earnings. \nThe fiscal sector challenges persist and may even worsen in 2023 with rising debt \nlevels and expected deficit position. In 2022, the huge government \nexpenditures in a regime of low revenues kept the overall debt stock at very \nhigh levels. With the possible addition of existing ways and mean advances to \nthe total debt stock, the overall burden of debt repayment and servicing looks \n \n \nalarming. At a projected fiscal deficit of 11.34 trillion naira in the 2023 budget, \nwhich is more than the projected overall revenue of 10.49 trillion naira, the \nexpectations of any fiscal ease in 2023 may be unlikely. \nPolicy Decision: \nGiven that the domestic inflation outlook is still assessed on the upside despite \nthe moderate easing of headline rates in December 2022, a continuation of the \ntightening regime remains appropriate. However, I will prefer a less aggressive \npolicy rate hike of not more than 50 basis points for now as we balance the risks \nof under-and over-monetary tightening. I will therefore vote to: \n• Raise the MPR from 16.5 percent to 17.0 percent, \n• Retain the CRR at 32.5 percent, \n• Retain the Asymmetric Corridor at +100/-700 basis points, \n• Retain the Liquidity Ratio at 30.0 percent. \n \n \n \n \n \n \n \n \n \n \n \n \n \n6. OBADAN, MIKE IDIAHI \nINTRODUCTION \nEconomic uncertainty arising from various kinds of shocks has continued to \nweigh on global growth and economic activities in individual economies. In \nrecent years, the key drivers of global economic uncertainty have evolved from \nthe US trade tensions with China, to the emergence of covid-19 pandemic in \n2020. Although most parts of the world appear to have put the covid-19 \npandemic behind them, it is lingering in some areas, in particular, China which \nhad experienced lockdowns and attendant protests in recent months. Not very \nlong after the global economy began to show strong signs of recovery from this \npandemic, Russia invaded Ukraine in February, 2022 with so much disruption of \nthe global supply chains, especially food and energies, with attendant \nescalation of global inflation and the associated cost of living crisis. Of course, \nthere is the phenomenon of renewed trade uncertainty which a recent IMF Blog \n(“Global Economic Uncertainty, remains elevated, Weighing on Growth, \nJanuary 30, 2023) considered as associated with the risk of geo-economic \nfragmentation. Consequently, the global economic uncertainty index remains \nat elevated levels and spillovers from major economies are rife. In light of the \nsubsisting shocks and uncertainties, global economic indicators are likely to be \nuninspiring in 2023. As the Russia-Ukraine war shows no signs of abating, the \n2022 challenging environment of weakening growth, elevated inflation rates, \nweak trade growth, tightening financial conditions, may persist in 2023. \nGLOBAL ECONOMIC FEATURES/OUTLOOK \nThe significance of this derives from the fact that Nigeria’s macroeconomic \nperformance/outlook is largely dependent on global economic performance \nand outlook as the country is highly globalised with its economy depending \nheavily on global trade, finance/investment and capital flows. \nGlobal growth. The global economy experienced weak economic momentum \nin 2022 and this is expected to continue in 2023 as the global uncertainties and \n \n \nmacroeconomic fragilities of 2022 may persist during the year. In light of this, \nglobal growth is expected to decline from the strong recovery rate of 5.9 per \ncent in 2021 to 2.9 per cent in 2022 and to 1.7 per cent in 2023 – the weakest in \nmany years after the 2009 financial crisis and covid-19 lockdowns in many \ncountries. Global output is expected to moderate in 2023 across both the \nAdvanced Economies (AEs) and Emerging Market and Developing Economies \n(EMDEs). The AEs as a group is expected to grow by 0.5 per cent in 2023 \ncompared to 2.5 per cent in 2022 while the EMDEs’ growth may remain \nstagnant at 3.4 per cent. \nIndeed, there are strong fears of global recession in 2023 as about one-third of \nthe global economy faces recession. A coalition of factors threaten growth \nprospects in 2023: widespread geopolitical tensions (Russia – Ukraine war, \nChina tension on Taiwan, Iran – Western countries tension) and continued \nsupply chain disruptions; lingering covid-19 pandemic, especially in China \nwhich slows its growth and disrupts supply chains; continued monetary policy \ntightening amid elevated inflation and uncertainty regarding the pace of \ninterest rate hikes; tightening financial conditions as monetary policy \nnormalisation by central banks continue which will pose significant contraction \nof capital flows to EMDEs. All these have spillovers on the EMDEs, Nigeria \nincluded. \nGlobal trade. Growth of global trade declined from 10.6 per cent in 2021 to 4.0 \nper cent in 2022 due to high inflation, higher interest rates and weaker demand \nin the US and Europe. The trade decline trend is expected to continue in 2023 \nto about 1.6 per cent. The continuation of the downward trend of global trade \nmay be due to multiple shocks alongside deteriorating economic conditions \nand rising uncertainties. In the context of climate change, dwindling demand \nfor crude oil and global reduction in the use of fossil fuel may affect global \ntrade. \nInflation. Although there were indications of moderating inflation in 2022, \ninflation remains high worldwide and it is expected to remain elevated in 2023 \n \n \nacross AEs and EMDEs, staying above the long-run inflation objectives of central \nbanks in most economies due mainly to the sustained high prices of \ncommodities, food and energy. Gradual declines may be experienced in 2023 \ndue to moderate declines in energy and commodity prices and slight easing of \nsupply bottlenecks. Nevertheless, central banks’ monetary policy normalisation \nmay continue but with reduced rate of interest rate hikes. \nCommodity market. Global prices of agricultural produce have continued to \ndecline due to easing of supply chain bottlenecks largely through the Black Sea \nagreement with Russia and the easing of covid-19 restrictions in China while \ngold price consistently increased, for example, from US$ 1,664.0 per ounce in \nOctober 2022 to US$ 1,925.66 per ounce on January 20, 2023 as investors seek \nhigher yielding assets following expectations of a US Fed slowdown in frequency \nand magnitude of interest rate hikes. In contrast, crude oil prices continued to \nmoderate as global economic recovery remained cloudy and fragile. As of \nJanuary 20, 2023, oil prices were as follows: \nOPEC basket: US$ 82.60 pb (US$ 81.29 pb on Dec 30 2022) \nBonny Light: US$ 87.40 pb (US$ 82.58 pb on December 30, 2022 and the peak of \nUS$127.98 on March 08, 2022) \nUK Brent: US$ 87.63 pb (US$ 83.33 pb on December 30 2022). \nOil prices continued to fall due primarily to fears of an impending global \nrecession just as Russia maintained supply despite efforts by the US and its allies \nto place a cap on the price and supply of Russian crude. Oil price futures for \nDecember 2023 deliveries indicate a continued downward trend, around mid-\nUS$70/barrel, reflecting expectations for a slowdown in global economic \nactivities. \nOther developments. Indications are that monetary policy tightening will \ncontinue in 2023 amidst high and widespread inflation but the pace is expected \nto drop due to increased likelihood of a broad-based global recession. The \n \n \npolicy tightening stance may increase uncertainties and pose high risk to \noutput growth; increase difficulty of countries to service external loans; \nconstrain access to capital for investment to finance economic development; \nand generally, increase the cost of borrowing. Global debt accumulation \nslowed in the third quarter of 2022 while high lending rates and strong US dollar \nare reducing the rate of new borrowing. And there is an increase in the cost of \ndebt service for EMDEs, heightening the risk of default. The high risk of debt crisis \nin EMDEs is aggravated by the following: possibility of global recession; soaring \ninflation; uncertainties surrounding an end to the Russia-Ukraine war; high \ninterest rates; and strong US dollar compounding debt-service burdens. \nFrom the global developments, there is a reasonable expectation that some \ncentral banks may slow the pace of interest rate hikes in 2023. However, as both \nthe US and EU are caught in the policy dilemma of choice between a restrictive \nmonetary policy stance to curb inflation and the need to bolster output growth \nrecovery, the prevailing weak economic momentum may continue in 2023. \nNIGERIA’S ECONOMIC PERFORMANCE AND PROSPECTS \nThe Nigerian economy was highly challenged in 2022 as reflected by \nweakening growth performance, high and escalating inflation, foreign \nexchange market pressure and depreciating exchange rate, ballooning fiscal \ndeficits and public debt, expanding money supply, etc. Macroeconomic \nperformance in the country has continued to be impacted by spillovers from \nthe major economies: geopolitical tensions, supply chain disruptions, high \ninflation, high energy and food prices, tightening financial conditions, among \nothers. \nGrowth. Compared to some other countries, Nigeria’s real GDP growth rate \nshowed resilience in 2022 although it recorded a reduced rate of 2.25 per cent \n(year-on-year) in Q3 2022 from 3.54 per cent in the preceding quarter, \nindicating eight (8) consecutive quarters of expansion in output. The yearly \naverage forecast for 2022 is 2.88 per cent. Nevertheless, the growth remains \n \n \nfragile, and it could be between 2 and 3 per cent in 2023 depending on the \noutlook of the global oil market and production of crude oil in the country. \nIndeed, the growth prospects could be brighter if: the present recovery of oil \nproduction is sustained and production meets the OPEC quota; global oil prices \ndo not fall below the current levels; and burdensome petroleum product \nsubsidy is removed; local refining of petroleum products by private refineries \ncommences, etc. \nInflation. In Nigeria, headline inflation remains very high although it moderated \nto 21.34 per cent (y-o-y) in December 2022 from 21.47 per cent in November \n2022 – the first month of decline since January, 2022. Although it shows that the \ntight monetary policy stance of the CBN is having an impact, headline inflation \nis still high and very much above the Bank’s implicit target of 6.00 – 9.00 per \ncent. However, the inflation rate is expected to decline in 2023 due to the \nsustained tight monetary policy stance of the CBN, gradual deceleration of \ninflation in the trading partner countries, likely reduction in fuel shortages: PMS \nand Automotive Gas Oil. \nMonetary growth. Two issues about monetary development are the money \nsupply growth which exceeded the provisional benchmark, and growth in \nliquidity. The Broad Money (M3) grew by 16.52 per cent in November 2022, \n(year-to-date) compared with 13.92 per cent in October 2022 and was above \nthe provisional benchmark of 15.21 per cent for 2022. The major source of \nliquidity growth is the fiscal operations of the government. \nExternal sector developments. These relate mainly to high exchange rates, \nforeign exchange market pressures and dwindling external reserves. These \nappeared to have worsened in 2022 because of both external and domestic \nshocks. Although the gross external reserves position as of December 2022 \ncould cover 6.21 months of imports of goods and services or 8.79 months of \nimports of goods, suggesting that the external reserves position may not be \nprecarious, it is of concern as it is inadequate to maintain exchange rate \nstability. \n \n \nFiscal Operations of the Government. These have continued to elicit serious \nconcerns considering the growing yearly fiscal deficits and their implications for \npublic debt accumulation (N44.06 trillion as at September 2022 and excluding \nnearly N23.0 trillion Ways and Means Advances) and inflation in view of the \nWays and Means Advances financing. From January to November 2022, the \nFederal Government had incurred a fiscal deficit of N7.338 trillion. The projected \nFederal Government fiscal deficit for 2023 is N11.34 trillion and it is to be partially \nfinanced through deficit financing. This is where the challenge lies for inflation \ncontrol. \nOPINION \nThis predicated on the following premises: \nThe country’s growth rate has shown resilience, but it is inadequate, fragile and \ncould be threatened by several headwinds including spillovers from the likely \nrecession in the country’s trading partners in 2023. Even the significant monetary \npolicy tightening stance is a headwind to growth. \nHeadline inflation showed a decline last December. But if the inflation \nheadwinds persist, this trend may not be sustained. Therefore, there is need for \ncaution in changing the current tight monetary policy stance in terms of easing. \nBut because of the negative impact on growth of aggressive monetary policy \ntightening (could slide the economy into recession), it is important to moderate \nthe rate of hiking the Monetary Policy Rate. And considering that the role of \nnon-monetary factors in the current inflation cannot be ruled out, it is necessary \nto avoid a policy stance of continued aggressive tightening in the belief that it \nwill address all the triggers of inflation. In other words, the burden of adjustment \nto resolve the inflation challenge cannot be on monetary policy alone. Even \nthe Advanced Economies have recognised the important role of non-\nmonetary factors in their inflation; hence they keep working to address issues \nrelating to supply-side shocks: energy and food prices, for example, and \nbrokering the Black Sea Agreement and US increasing export of oil to Europe. \n \n \nForeign exchange market pressure could be eased by monetary tightening, but \nthis hurts the real sectors of the economy. So, supply-side strategies to boost \nforeign exchange supply and external reserves, for example, frontally \naddressing the oil production challenge, would be a much better policy option \nat this time. The foreign exchange market and exchange rate outlook could \nimprove significantly if the petroleum subsidy regime is abandoned, oil \nproduction and exports are stepped up significantly, and domestic oil refining \nresumes in the country. \nBallooning fiscal deficits of government are of concern because of their \nimplications for price and monetary stability. Government strategies can also \naddress this to remove the burden of financing it from the Monetary Authority. \nBesides implementing bold measures to improve revenue mobilisation, there is \nthe need for urgent stoppage of the petroleum products subsidy regime. \nFor over a decade, I had written a lot of articles on petroleum subsidy in Nigeria. \nI have argued that subsidy on petroleum products had become one of the \neffortless avenues for privileged people and companies to corruptly \nappropriate the nation’s resources while the consumers are worse off. The gross \ninefficiency and corruption in subsidy administration in the past coupled with \nthe current difficult economic situation of the country makes it imperative for a \nre-consideration of the continued retention of subsidy on petrol but under \nappropriate framework/basis. In my last article on the subject, published in Daily \nIndependent of December 24, 2021, I had observed “that there is a strong case \nfor the eventual deregulation of petrol price and hence eliminating the subsidy \nin it. But the government needed to work towards it. To avoid unpleasant \nmacroeconomic and social consequences, it should deregulate on the basis of \ndomestic refining of petroleum products and not importation of such products. \nImported refined products are expensive not only because of high crude oil \nprice and international transportation costs but also because of exchange rate \nchanges. Naira depreciation makes importation costly and retail prices higher. \nExiting fuel subsidy under a regime of importation of petrol will highly endanger \n \n \nthe current fragile macroeconomic stability, especially under the regime of very \nhigh oil prices prevailing in the global market”. \nBut since three months now, I have changed my position to the effect that \nderegulation of petroleum product prices, whether based on local refining or \nimported petroleum products, should no longer be delayed. The reason is that \nthe socio-economic and macroeconomic implications of deregulation of \nimported petroleum product prices are already playing out in the economy. \nThere has been inexplicable scarcity of petroleum products and marketers, \nexcepting the NNPC mega petrol stations, have been selling petrol at \nderegulated prices –N400 – N600 per litre in the part of the country where I live. \nAnd motorists seem to be unperturbed. All that they seem to desire is that petrol \nshould be available; they seem to be eager to buy irrespective of the impact \non production costs, inflation and the standard of living. If the government \nofficially deregulates petrol prices and abandons subsidy, Nigerians will not be \nworse off. They are already used to the prices of the already deregulated \nproducts – diesel AGO and kerosene used by ordinary people. So, let’s free the \ncountry from the fraud inherent in petrol subsidy. The over N6.0 trillion that could \nleave the government’s coffers in 2023 as subsidy could go to development \nprojects and/or reduce the nation’s public debt. For obvious reasons, \ngovernment should consider removing the subsidy immediately after the \nelections. \nIn light of the above, I vote to cautiously increase the MPR by 50 basis points \nand for all the other parameters to remain constant, that is, have: \nMPR - \n17.0% \nCRR - \n32.5% \nLiquidity ratio - 30% \nAsymmetric corridor \n- \n \n+100/-700 basis points. \n \n \n \n7. OBIORA, KINGSLEY ISITUA \nIn light of high levels of inflation, negative real interest \nrates, and the need to re-anchor inflation expectations \nand protect the most vulnerable households, I voted to \nraise the Monetary Policy Rate (MPR) to 17.5 per cent \nfrom 16.5 per cent, retain the Cash Reserve Ratio (CRR) \nat 32.5 per cent, the Liquidity Ratio (LR) at 30.0 per cent \nand the Asymmetric Corridor of +100/-700 basis points \naround the MPR, respectively. This stance reflects my \nhope that we can continue to dampen inflation, \nminimize its effect on growth and safeguard financial \nsystem stability. \n \nThe global economy continues to face high levels of inflation and flagging \ngrowth. Some factors responsible for these headwinds include spillover from the \nRussian invasion of Ukraine, the prolonged COVID-19 pandemic and property \nsector crisis in China, high food and energy prices, tight labour market, \ncontractionary monetary policy stance, and volatile financial markets. All these \neconomic and geopolitical headwinds continue to weigh on global economic \nactivity. As a result of these developments, global growth is expected to \ndecelerate in 2023. Although the J.P. Morgan Global Composite Purchasing \nManagers Index (PMI) inched up to 48.2 points in December from 48.0 points in \nNovember 2022, it is still below the 50-point benchmark, making it the fifth \nsuccessive month of contraction and one of the lowest in the last fifteen years. \nThe contraction was driven by a decline in new order inflows, and downturns in \neconomic activity, especially in manufacturing and services, thus, confirming a \nweak global economic activity. \n \nThese have led to downgrade of global growth forecast by several reputable \ninstitutions. For example, the International Monetary Fund (IMF, October WEO, \n2022) downgraded the 2023 global growth forecast from 3.2 per cent in 2022 to \n2.7 per cent in 2023. Also, the World Bank Global Economic Prospects (GEP, \nJanuary 2023) projected global growth to decline from 2.9 per cent in 2022 to \n1.7 per cent in 2023. Similarly, in Advanced Economies, growth is expected to \n \n \ndecline significantly from 2.5 per cent in 2022 to 0.5 per cent in 2023 due to high \ninflation and rapid monetary policy tightening, which continue to weigh on \naggregate demand. Emerging Market and Developing Economies (EMDEs) is \nprojected to remain unchanged at 3.4 per cent in 2022 and 2023 due to \ntightening global financial conditions and supply chain disruptions, currency \ndepreciation, high inflation, and weak external demands. \n \nAlthough global inflation is expected to decelerate in 2023, it remains broadly \nelevated. Global inflation is projected to decelerate to 6.5 per cent in 2023 from \nan estimated 8.8 per cent in 2022. In Advanced Economies (AEs), inflation is also \nexpected to moderate to 4.4 per cent in 2023 from an estimated 7.2 per cent \nin 2022, owing to moderate declines in energy and commodity prices, and a \nslight easing of supply bottlenecks. In Emerging Markets and Developing \nEurope, it is expected to drop to 19.4 per cent in 2023 from 27.8 per cent in 2022. \nIn Sub-Saharan Africa, inflation is projected to decline to 11.9 per cent in 2023 \nfrom an estimated 14.4 per cent in 2022 (IMF, October 2022, World Economic \nOutlook). \n \nWhilst inflation is decelerating in Advanced Economies, it is still far above the \ntarget of 2.0 per cent set by the central banks of these economies. For example, \nin the United States, inflation declined from 7.1 per cent in November 2022 to \n6.5 per cent in December 2022. In the Euro Area, inflation decreased to 9.2 per \ncent in December from 10.1 per cent in November 2022. Also, in the United \nKingdom, inflation moderated slightly from 9.3 per cent in November to 9.2 per \ncent in December 2022. In Canada, it declined to 6.3 per cent in December \n2022 from 6.8 per cent in November 2022. Inflation, therefore, may have \npeaked in some of these advanced economies, it is, however, believed that \nwith the labour-market tightness and high core inflation, the underlying \ninflationary pressures still exist and may become persistent. As a result, many \ncentral banks in advanced and developing economies remain focused on \ntaming inflation through continuous interest rate hikes. \n \n \n \nReflecting on these headwinds, Nigeria’s economic growth may moderate in \n2023. Official data from the National Bureau of Statistics (NBS) revealed that \nNigeria’s real GDP (year-on-year) grew by 2.25 per cent in Q3 2022, compared \nwith 4.03 and 3.54 per cent in Q2 2021 and Q2 2023, respectively. This represents \na decline of 1.78 and 1.29 percentage points relative to the corresponding and \npreceding quarters, respectively. The decline in growth was due to a continued \ncontraction in the oil sector and the slowing performance of the non-oil sector. \nThe moderate growth, however, was mainly driven by the services and \nagricultural sub-sectors of the non-oil sector. They include Road Transport, \nFinancial Institutions, Telecommunications, Manufacturing (Chemical and \npharmaceutical products), Trade, and Agriculture (Crop Production), which \ngrew by 49.68, 12.03, 10.06, 11.09, 5.08, and 1.33 per cent, respectively. Overall, \nthe non-oil sector moderated by 4.27 per cent in Q3 2022, compared with 4.77 \nper cent in Q2 2022, reflecting a decline of 0.5 percentage points. In relative \nterms, the non-oil sector contributed 94.34 per cent, higher than the 93.67 per \ncent recorded in Q2 2022. The oil sector further contracted by 22.7 per cent \n(year-on-year) in Q3 2022, compared with a contraction of 11.77 per cent \n(year-on-year) in Q2 2022, indicating a further contraction of 10.9 percentage \npoints. This was attributed to operational issues, increasing oil theft, pipeline \nvandalism, and divestments by international oil companies. \n \nHowever, bold macroeconomic policies can reverse this projection. The \nforegoing as well as the continuation of PMS subsidies imply low oil revenues for \nthe Federal Government, weak accretion to external reserves, and further \npressure on the local currency. As a result, the Balance of Payments (BOP) \nposition recorded an overall deficit of 1.15 per cent of the GDP in Q3 2022, \ncompared with a surplus of 0.08 per cent of the GDP in Q2 2022. The BOP deficits \nwere due to a decline in export earnings and remittances, as well as a rise in \nthe net acquisition of foreign currency and deposits held in foreign banks by \nthe private sector. Consequently, the IMF (WEO, October 2022) projected the \n \n \nNigerian economy to moderate to 3.2 and 3.0 per cent in 2022 and 2023 from \n3.6 per cent in 2021. The World Bank (GEP, January 2023) also expected the \neconomy to slow down from 3.6 per cent in 2021 to 3.1 and 2.9 per cent in 2022 \nand 2023, respectively. Notwithstanding these circumstances, bold policies \ntargeted at raising significantly more revenue, managing debt accumulation, \nmoving to a market-based PMS pricing, and tackling long- standing structural \nimpediments to growth can reverse this outcome. \n \nThankfully, the banking system remains sound, safe, and resilient. Industry Non-\nperforming Loans (NLs) decreased from 4.9 per cent in December 2021 to 4.2 \nper cent in December 2022, which was below the maximum prudential \nrequirement of 5.0 per cent. The decline in NPLs was attributable to write-offs, \nrestructuring of facilities, Global Standing Instruction (GSI) and sound credit risk \nmanagement by banks. Total assets of the banking industry grew by ₦14.36 \ntrillion or 24.24 per cent from ₦59.24 trillion in December 2021 to ₦73.59 trillion in \nDecember 2022, driven by balances with CBN/banks, investments, and credit \nexpansion to the real sector. As a result, total gross credit increased by N5.14 \ntrillion or 20.93 per cent between the end of December 2021 and December \n2022, from N24.57 trillion to N29.72 trillion, due to the increase in the industry \nfunding base as well as the CBN’s directive on LDR, which has encouraged \nbanks to increase lending to the real sector of the economy, and business \nstrategy and competition. The increase in credit to the key sectors of the \neconomy is expected to bolster aggregate demand and promote economic \ngrowth, job creation, and poverty alleviation. \n \nOverall, policymakers need to keep an eye on pre-existing macroeconomic \nimbalances and headwinds. The global economic slowdown (especially in the \nUnited States, the Euro Area and China), the Russian-Ukraine war, geopolitical \nfragmentation, weaker currencies in many EMDEs, and rising external debt are \nall weighing on domestic investment and further exacerbating the existing \ndomestic headwinds. With China re-opening after three years of zero Covid \npolicy, these headwinds are, however, expected to moderate and improve \n \n \nglobal growth, but could also be a risk to global inflation. Domestically, \nalthough oil production has improved, it is still below the OPEC allocation quota \nof about 1.8 mbpd due to high production costs, oil theft and pipeline \nvandalism. Low oil production in the face of high oil prices continues to reduce \nfiscal space, with consequences for external debt and foreign reserves \naccretion. \n \nGiven all the above, tackling runaway inflation and engendering growth \ncontinue to be top priorities. Although inflation has started to decelerate, it is still \nfar above the implicit target set by the Bank. Also, monetary aggregates are \nabove their provisional benchmarks and real interest rates are still in negative \nterritory. The Bank must, therefore, not lose focus on containing inflation \nbecause it continues to disproportionately affect low-income households and \nthe most vulnerable in the society by reducing their real income and \nexacerbating inequality and poverty. \n \nOn account of high-level inflation, growth in the money supply, negative real \ninterest rates, general election spending, and the need to be consistent and \ncredible, I voted to raise the MPR by 100 basis points. \n \n• \nIncrease the Monetary Policy Rate (MPR) from 16.5 percent to 17.5 \npercent. \n• \nRetain the Cash Reserve Ratio (CRR) at 32.5 percent. \n• \nRetain the Liquidity Ratio (LR) at 30.0 percent; and \n• \nRetain the asymmetric corridor to +100/–700 basis points around the \nMPR. \n \n \n \n \n \n \n \n8. OMAMEGBE, MO’ \nGlobal Economic Developments \nThe year 2022 was a challenging year for the global economy. The many \nchallenges of 2022 included the Russian Federation’s invasion of Ukraine, the \nsupply bottlenecks associated with the disruptions from the war, high energy- \nprices, persistent inflationary surge accompanied by an aggressive monetary \ntightening cycle. This is in addition to extraordinary financial market volatility, \ntightened global financial conditions as well as China’s sustained zero Covid-\n19 policy. These series of events set back the global economy in 2022 and the \ngeneral prognosis for 2023 remains gloomy and uncertain. \n \n The International Monetary Fund (IMF) has warned that a third of the global \neconomy would be affected by recession this year.1 The Fund also observed \nthat it would feel like a recession for hundreds of millions of people, even for \ncountries not in recession. The latest World Bank Global Economic Prospects \nReport2, forecast that global growth will decline to 1.7 percent in 2023 from 3.0 \npercent expected six months ago. The worsening outlook is broad-based in \nalmost all regions of the world and the World Bank has lowered its growth \nforecasts for 95 percent of advanced economies and over 70 percent of \nemerging market and developing economies. \n \nDomestic food price inflation continues to remain high in almost all countries \nand substantially above central bank targets in almost all inflation targeting \neconomies. CPI inflation is expected to remain high at 5.2% in 2023 before \nfalling to 3.2 % in 2024. Also 94.1% of low-income countries, 92.9% of lower-\nmiddle-income countries, and 89% of upper-middle-income countries have \n \n1 https://edition.cnn.com/2023/01/02/business/imf-china-global-economy-recession-intl-hnk/index.html \n \n2 https://openknowledge.worldbank.org/bitstream/handle/10986/38030/GEP-January-2023.pdf \n \n \n \nexperienced inflation levels above 5%, with many such as Nigeria experiencing \ndouble-digit inflation. 3 \n \nIn the United States, Consumer price inflation for December shows that the \nIndex for All Urban Consumers decreased 0.1 percent, down from a 7.1% gain \nin November4, Year-over-year CPI inflation reached a 40-year high of 9.1% in \nJune, 2022.5 In the UK6, the Consumer Prices Index (CPI) rose by 10.5% in the 12 \nmonths to December 2022, down from 10.7% in November 2022 and 11.1% in \nOctober 2022. Inflation trended up throughout 2022, reaching a 41-year high of \n11.1 per cent. The pace of upward price movements in Germany slowed in \nDecember 2022, moving back into single digits, owing to lower energy prices \nand a government relief package in December 2022.7 Germany ended 2022 \nwith an overall inflation rate of 8.7 percent, the highest annual rate since the \ncountry’s reunification after the end of the Cold War in 1990 and up from just \n3.2 percent in 2021. In China, the average CPI for all of 2022 was 2.0% higher \nthan in 2021, compared with the government target of an increase of around \n3%. \nAccording to the World Economic Forum8 Global Risks Report 2023, the world is \nat a critical inflection point, Policy makers globally are grappling with two \nconflicting risks namely, failing to raise rates high enough will allow high inflation \nto persist, while raising rates too high will lead the economies into recession. \n \nGlobal stock markets posted their biggest annual drop since the 2008 financial \ncrisis. The MSCI All-Country World Index of stocks lost about a fifth of its value \nduring 2022, the worst performance in 14 years. Oil however recorded its second \n \n3 World Bank, https://thedocs.worldbank.org/en/doc/40ebbf38f5a6b68bfc11e5273e1405d4-\n0090012022/related/Food-Security-Update-LXXVI-January-12-2023.pdf \n \n4 https://www.forbes.com/advisor/investing/current-inflation-rate/ \n5 https://www.bls.gov/cpi/ \n6 https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/december2022 \n7 https://www.nytimes.com/2023/01/03/world/europe/germany-inflation.html \n8 The Global Risks Report 2023 18th Edition \nhttps://www3.weforum.org/docs/WEF_Global_Risks_Report_2023.pdf \n \n \n \nannual gain, after a turbulent year. In March 2022, Brent crude reached its \nhighest point since 2008, reaching $139 a barrel, when traders anticipated \ndisruption to Russian supplies. However, crude prices then fell back from that \nMarch 2022 peak, ending the year about $83 a barrel, owing to concerns that \nthe global economy was weakening. The darkening global economic outlook \nand COVID-19 flare-ups in China will likely impact demand as well as \ncompensate the impact of supply shortfalls from Russia.9 OPEC forecast that \nglobal oil demand will reach 101.8mn b/d in 2023, up from 99.55mn b/d in 2022. \n \n \nDomestic Economy \nThe Word Bank10 Growth forecast for Nigeria was revised to 3.1 percent in 2022, \na 0.3 percentage point reduction from the June 2022 projection. AfDB 11 \nestimates Nigeria’s growth will average 3.2 per cent in 2023 while inflation rate, \nwhich closed at 21.24 percent the previous year, is expected to slow down to \n14.6 per cent. \n \nThe inflation report from the National Bureau of Statistics (NBS) shows that In \nDecember 2022, the headline inflation eased to 21.34% compared with \nNovember 2022 headline inflation of 21.47%. This is a decline of 0.13% when \ncompared with November 2022 inflation rate. However, on a year-on-year \nbasis, the headline inflation was 5.72% points higher compared to the level \nrecorded in December 2021 at 15.63%. The inflation numbers reflect that Food \nand Core inflation averaged 20.6 and 15.8 percent, respectively, in 2022. Since \nthe country relied heavily on imports for manufactured and industrial \nintermediate goods, global inflationary pressure permeated all productive \nactivities in Nigeria. On the domestic front, a combination of cost-push and \n \n9 https://www.reuters.com/business/energy/economic-weakness-set-weigh-oil-price-2023-2022-12-\n30/#:~:text=A%20survey%20of%2030%20economists,%2499%20per%20barrel%20in%202022. \n \n10 https://openknowledge.worldbank.org/bitstream/handle/10986/38030/GEP-January-2023.pdf \n \n11 https://www.afdb.org/en/documents/africas-macroeconomic-performance-and-outlook-january-2023 \n \n \n \ndemand-pull factors were significant drivers of the surge in the general price \nlevel. \nThe country’s recovery in 2022 was driven by the service and agriculture sectors \nwith the non-oil sector posting an average growth of 5.1 percent in the first three \nquarters of the year, while the oil sector contracted by 20.7 percent in the same \nperiod due primarily to the decline in domestic crude oil production, massive \ncrude oil theft and governance challenges. \nThe Nigerian Upstream Petroleum Regulatory Commission, revealed that crude \noil production in Nigeria rose to 1.235 million barrels per day in December 2022, \nrepresenting the highest output since March 2022. Crude oil production in \nNigeria had crashed to as low as 0.937mbpd in September 2022, which was the \nlowest output recorded in Nigeria in several years. The Nigerian National \nPetroleum Company (NNPC) Limited has disclosed that the country will export \nPremium Motor Spirit by mid-2023 as local refining capacity is set to jump to 1.1 \nmillion barrels per day. \n \n \nNigerian Capital Market \nDespite the rising inflation and interest rate hikes, the equities market ended the \nyear 2022 on a positive note. Data from the Nigeria Exchange Limited, shows \nThe NGX All Share Index (ASI) closed at 51,251.06 points as of December 31, \n2022. This represents a 19.98% increase when compared to the close of \n42,4716.44 as of December 31, 2021. The index was the best performing in Africa \nand crossed the 50,000 mark for the first time since post market crash 2007-2008. \nAlso, market capitalization increased from ₦22.30 trillion to ₦27.92 trillion for the \nsame period representing a 25% increase. The volume of securities traded \nincreased by 95% from 460 million shares to 890 million shares, while the value of \nsecurities traded decreased by 25.06% from ₦9.88 billion to ₦7.36 billion. \n \n \nThe current principal statute governing operations in the capital market is the \nInvestments and Securities Act (ISA) 2007. The Securities and Exchange \nCommission (SEC) has observed areas requiring review in order to strengthen \nthe existing provisions, remove ambiguities, introduce new provisions that would \nenhance the international competitiveness of the Nigerian capital market and \nreposition the market to catalyze National economic transformation. \nGiven the highly technical and dynamic nature of the capital market as well as \nthe market’s evolution since the passage of the ISA 2007, it was the consensus \nby major stakeholders in the capital market community that rather than \nwholesale amendments, a complete overhaul of the ISA through a new Bill \nwould be more expedient towards the objective of consolidating the \nefficiency, transparency and viability of the market. \nThe House of Representatives passed the Investments and Securities Bill in \nDecember 2022, after which the document was sent to the Senate for \nConcurrence. The passage of the Bill will lead to a holistic strengthening of the \nLegal and Regulatory Framework underpinning capital market operations in the \nCountry. \nOverall consideration \nIn 2022, we saw Central Banks aggressive policy tightening in the United States, \nthe EU and other parts of the world to address persistent inflation. In Nigeria, the \nMonetary Policy Committee hiked the Policy rate four times in 2022 by 500 basis \npoints from 11.5 up to 16.5% to tame rising prices. We have seen inflation remain \nstubbornly high though increasing at a decelerating rate. \nStatistics from NBS shows that Consumer-price inflation in Nigeria averaged \n14.15% over the period January 2009 to December 2022. It peaked at 20.94% \nin December 2022, with a low of 9.4% in April and May of 2014. Since 2020, \nconsumer price inflation has averaged 17.85% with a low of 13.8%. \n \n \nIncreasing price pressures remain an important threat to current and future \nprosperity as it puts pressure on real incomes. Permanently high inflation also \nundermines our economic foundation as well as our macro-economic stability. \nThe effect of consistent monetary policy tightening has driven up debt service \ncosts for households and borrowing costs for businesses with negative \nimplications for production and growth. The fiscal challenges of poor revenue \nperformance and growing deficit financing on the one hand, and rising energy \nand food prices on the other, combine to exacerbate the rising price levels \nwhile increasing downward pressure on growth. \nThere is an urgent need for monetary and fiscal policy alignment to address the \npersistent inflationary pressures. Monetary policy should be complemented by \nbold fiscal measures to address rising sovereign debt, revenue challenges, \nrestore crude oil production to pre-pandemic levels and phase out fuel subsidy \nthat does not seem to trickle proportionately to the poor and most vulnerable \nsegment of our population. \nThe medium to long term solution remains the implementation of policy \ninitiatives to fully unlock the productive capacity of our country. A relentless \nfocus on production and policy measures to enable the key components of the \nproduction value chain drive the Nation to self-sufficiency and economic \nindependence. \nThere was a slight dip in headline Inflation and food Inflation in December 2022 \n(YoY). However, the insignificant reductions in one-month numbers do not justify \na policy reversal at this time. We are certainly not out of the woods and the \nneed to curb inflation and tackle the current cost-of-living crisis should remain \na top policy agenda. \nMy Policy Decisions \n I therefore vote to: \n \n• Raise MPR by 50 basis points to 17 percent; \n \n \n• Retain the Asymmetric Corridor of +100/-700 basis points around the MPR; \n• Retain the CRR at 32.5 percent; \nRetain the Liquidity Ratio at 30 percent. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9. SALISU, MOHAMMED ADAYA \nGlobal Developments and Economic Outlook \n \nMany of the factors that adversely affected the global economy are still around \nus, suggesting that the global economic growth would decelerate in 2023. The \ncontinued war in Ukraine, the lingering effects of the Covid-19 pandemic in \nChina, and the hike in central bank rates to fight inflation around the world have \nall continued to weigh on global output. It is for these reasons that the \nInternational Monetary Fund (IMF) estimated that growth in global output will \nslow down from 3.4 percent in 2022 to 2.9 percent in 2023, before rising to 3.1 \npercent in 2024 (World Economic Outlook, January 2023). \n \nHowever, the performance of the global economy exhibited considerable \nregional variation, with the Advanced Economies (AEs) estimated to have \ngrown by 2.7 percent in 2022 and projected to grow by 1.2 percent in 2023. In \ncontrast, the Emerging Market and Developing Economies (EMDEs) were \nestimated to have grown by 3.9 percent in 2022 and projected to grow by 4.0 \npercent in 2023. Within the AEs, the United States of America (USA) economy, \nwhich after two consecutive quarters of negative growth, grew at an annual \nrate of 3.2 and 2.9 percent in the third and fourth quarters of 2022, respectively, \nprimarily reflecting increases in inventory investment and consumer spending. \nFor the whole 2022, the US economy was estimated to have grown by 2 percent \nand projected to grow by 1.4 percent in 2023. In the Euro Area, quarterly \neconomic growth stood at 0.3 and 0.1 percent in the Q3 and Q4, 2022, \nrespectively. On a yearly basis, however, economic growth slowed to 1.9 \npercent during the fourth quarter in the Eurozone, which was badly affected by \nthe war in Ukraine. \n \nIn the case of the EMDEs, the zero Covid policy in China dampened growth to \n2.9 percent (year-on-year) in Q4, 2022, down from 3.9 percent in Q3. It is \nexpected that the recent lifting of zero Covid policy in China will pave the way \n \n \nfor a faster than expected recovery. For the full year of 2022, the economy grew \nby 3.0 percent, missing the official target of around 5.5 percent and marking \nthe second slowest pace since 1976 (World Economic Output, January 2023). \nIn contrast, Saudi Arabia and India outperformed the rest of the EMDEs by \nrecording GDP growth rate of 8.7 and 6.8 percent, respectively, in 2022. \nHowever, growth in both countries was projected to decelerate to 2.6 and 6.1 \npercent in 2023, respectively. \n \nGlobal inflation remained elevated across AEs and EMDEs although inflation \npressure in the former started to dissipate. Thus, global inflation is predicted to \ndecelerate in 2023 as the monetary policy tightening by central banks across \nthe world begins to rein inflation. It is noteworthy, however, that high energy \nand food prices still pose significant upside risks to global inflation. Thus, inflation \nin EMDES in particular is likely to remain elevated due to additional reasons such \nas declining capital inflows, exchange rate volatility and structural issues. \nDomestic Developments \nAlthough the Nigerian economy had sustained positive output growth for eight \nconsecutive quarters since it exited from recession in 2020, growth has started \nto slow down, for several reasons, including the continued hikes in interest rates \nover the second half of 2022, and revenue challenges. According to the IMF, \nthe Nigerian economy was expected to grow by 3.0 percent in 2022 and \nprojected to improve to 3.2 percent in 2023. It is expected that the observed \nefforts by the security agents to curb oil theft in the Niger Delta would help to \nboost oil production and revenue, thereby promoting economic stability. \n \nIn terms of the general level of prices, headline inflation dipped slightly in \nDecember 2022, but it is still high by the data released by the National Bureau \nof Statistics (NBS), headline inflation declined from 21.47 percent in November \n2022 to 21.34 percent in December 2022. However, average annual headline \ninflation rose to 18.77 percent in 2022 (the highest level since 2001), up from \n16.98 percent in 2021. Some of the factors that contributed to the persistent rise \n \n \nin inflation include the continuous rise in energy and food prices, insecurity, \nincessant flooding, rural road infrastructure deficits, supply chain disruptions, \npost-harvest losses and imported inflation pass-through. Although food inflation \nalso reversed an upward trend from 24.13 percent in November 2022 to 23.75 \npercent in December 2022, such a level is quite unacceptable. \n \nPolicy Decision \nAlthough it is not a good practice to make inferences or generalisations based \non a single episode, the dip in the headline inflation in December 2022 may \nsuggest that the recent monetary policy tightening has started to yield positive \nresults. However, it is too early to start loosening the monetary policy stance. \nMoreover, given the huge gap between inflation rate and the policy rate, there \nis still room for further monetary policy tightening. Furthermore, factors outside \nthe monetary policy environment have also played a key role in influencing the \nperformance of the economy. Thus, there is need to address these non-\nmonetary factors to complement the efforts of the monetary authorities to curb \ninflation in the country. Given the current challenges facing the fiscal \nauthorities, the CBN will have to continue to do whatever it takes within its \npowers to curb inflation in Nigeria. Nonetheless, the pace of monetary policy \nrate tightening should be slowed to provide a boost to economic growth. \n \nAccordingly, I voted to: \n• Raise the MPR by 100 basis points to 17.5% \n• Retain the CRR at 32.5% \n• Retain the Asymmetric Corridor at +100/-700 basis points around the MPR \n• Retain the Liquidity Ratio at 30.0% \n \n \n \n \n \n \n \n10. SANUSI, ALIYU RAFINDADI \n1.0 \nDecision \nMy vote for a raise was informed by the need to sustain the tightening of the \nmonetary policy stance to rein in inflation. Although the year-on-year headline \ninflation declined in December 2022, the underlying dynamics of the core and \nfood sub-components as well as their month-on-month measures, are complex, \nsuggesting that the one-month decline may be a blip. Sustaining the tightening \nwould, therefore, narrow the negative domestic real interest rates margin \nfurther amidst the rising yields in the Advanced Economies and moderate the \nrising domestic foreign exchange market pressure. In addition, tightening is also \nneeded to moderate the effects of election-related spending and the liquidity \nassociated with the proposed Government borrowing in 2023. I, therefore, \nvoted to raise the MPR. \n2.0 \nBackground and Justification \n2.1 \nGlobal Economic Development \nThe global output growth is expected to slow amidst declining but elevated \ninflation due to the heightened uncertainties due to the Russia -Ukraine war and \nunabating COVID-19 pandemic in major Chinese industrial cities as well as the \nsynchronised policy responses of the major central banks. \nThe consequences of the Russia-Ukraine war, the COVID-19 resurgence in \nChina, rising global debt levels and synchronised monetary policy tightening by \nmajor central banks continue to shape the global economic environment. \nAccordingly, the global output is expected to slow down, with a third of the \nglobal economy facing the risk of recession in 2023. The World Bank's forecasts \nfor global output show a decline from 2.9% in 2022 to 1.7% in 2023. In the \nAdvanced Economies (AEs), output growth is also forecasted to decline \nprogressively from the 5.2% achieved in 2021 to 2.5% in 2022 and 0.5% in 2023 \ndue, mainly to the deteriorated economic conditions occasioned by the high \n \n \ninflation and rapid monetary tightening. Quarter-on-Quarter (Q-o-Q) output in \nthe US expanded by 3.2% in Q3 2022, following the second quarterly \ncontraction of -0.6% in 2022Q2. Output in the UK economy contracted by -0.3% \nin 2022Q3 compared to 0.2% in 2022Q1 due to a decline in business investment, \nhousehold expenditure, financial tightening and a rise in energy prices. Output \ngrowth in the Euro area declined from 0.7% in Q2 2022 to 0.3% in Q3 2022 as \nenergy prices continue to weigh down output growth. Japan’s output \ncontracted in Q3 2022 to -0.2% from 0.9% in Q2 2022 due to weak Government \nspending and private investment. \nIn the EMDEs, output growth is projected to slow down from the 6.7% achieved \nin 2021 to 3.4% apiece in 2022 and 2023 due to the tightened global financial \nconditions, supply chain shocks, currency depreciation, high inflation and \nsignificantly weak external demand. Q-o-Q output increased in China to 3.9% \nin Q3 2022, from a negative growth of -2.7% in Q2 2022, due to stimulus \npackages and relaxation of the zero COVID policy and easing of the lockdown \nmeasures. Russia’s output is forecasted to expand by 1.1% in Q4 2022, from the \ncontraction to -0.8% in Q3 2022. In Nigeria, Q-on-Q output expanded by 9.68% \nin Q3 2022 from -0.37% in Q2 2022. The composite Global PMI of JP Morgan also \nindicated an increase in economic activity in December 2022 to 48.2 index \npoints from 48.0 index points in September 2022. The Global Manufacturing \ncomponent, however, declined by -0.2 index points, while the Global Services \ncomponent remained flat between November and December 2022. \nAlthough global inflation is expected to moderate in 2023, it remains elevated \nabove the long-term targets across most AEs and EMDEs, in the AEs, IMF \nforecasted inflation to decline to 3.1% in 2023 from 7.5% in 2022 due to a \nmoderate decline in energy and commodity prices and a slight easing of the \nsupply chain bottlenecks. In the US, inflation has continued to decline since July \n2022 and has dropped to 6.5% in December 2022, while it stood at 10.5% in the \nUK and 9.2% in the Euro area. In the EMDEs, inflation is forecasted to rise to 10.9% \nin 2022 from 6.2% in 2021. In 2023, it is expected to decline to 6.1%. As of \n \n \nDecember 2022, year-on-year inflation has increased in China (1.8%), Egypt \n(21.3%), and Ghana (54.1%) but decreased in India (5.72%), South Africa (7.2%) \nand Nigeria (21.34%) in December 2022. \nMajor central banks have continued to raise their rates in order to rein in \ninflation. The US Fed increased its rate in 2022 by a cumulative 450 basis points, \nthe Bank of England increased its repo rate by cumulative 325 basis points, and \nthe ECB raised its rate by cumulative 250 basis points in 2022, and is expected \nto continue to hike rates in 2023. In the EMDEs, Ghana, Egypt, South Africa, and \nIndonesia have similarly raised their rates. The EMDEs have maintained policy \ntightening in response to the rising inflation due to rising energy and food prices \nand anticipated capital outflows reversals associated with rising yields in the \nmajor Advanced Economies. In 2022, net capital flows to EMDEs declined by \n90% compared to 2021 due to the rising interest rate in the AEs and the strong \nUS dollar. Capital flows to EMDEs are expected to continue to contract in 2023. \nSome key implications of these global developments on the domestic economy \ninclude rising imported inflation, tighter external financing conditions, higher \ndebt service payments, and increased pressure on foreign exchange reserves \nand the foreign exchange market. \n2.2 \nDomestic Economic Developments and their Implications \nAvailable data shows that, in Q3 2022, the domestic output grew by 2.25% (Y-\no-Y) compared with 3.54% achieved in Q2 2022. The growth was driven by the \ngrowth of the non-oil sector (4.27%), particularly Services (7.01%) and \nAgriculture (1.34%). However, the non-oil output contracted by -22.67% due to \noil production challenges. Output growth for 2022 is forecasted at 2.88% down \nfrom 3.43% in 2021. \nDomestic inflation declined (year-on-year) from 21.47% in November 2022 to \n21.34% in December 2022, representing a 13-basis point decrease driven by the \ndecline in food inflation. Food inflation declined to 23.75% in December from \n24.13% in November 2022, representing a 38-basis point decrease. The core \n \n \ninflation, however, increased by 25 basis points from 18.24% in November to \n18.49% in December 2022. On a month-on-month basis, however, the headline \ninflation increased, during the same period, by 32 basis points, while the core \ninflation decreased by 34 basis points. Comparing these changes suggest that \nthe observed decline in the headline measure in December may not indicate \na sustained decline in inflation. Survey estimates of inflation expectations \nshowed that expected inflation declined in December 2022 compared to \nNovember 2022 and was lower than actual inflation since September 2022. \nDevelopments in the monetary sector show that broad money (M3) growth \nincreased to 17.72% in December 2022 compared to 16.29 in November 2022 \nand has continued to be above the benchmark of 15.21% for the year 2022. \nThis increase was driven by Net Domestic Asset (NDA), which grew by 36.46% \n(year-to-date) in December 2022. The key drivers of the NDA was net claims on \nGovernment which grew by 78.15% (y-t-d) in December 2022, which in turn was \ndriven by FGN’s borrowing from the central bank (93.21%), commercial banks \n(44.26%) and non-interest banks (79.13%). This suggests that monetary and fiscal \nfactors have continued to play an important role in the current inflationary \nprocesses. Staff forecasts showed that headline inflation would increase from \n21.09% in October 2022 to 21.29% in November 2022. \nA review of the banking system stability report showed that the Capital \nAdequacy Ratio stood at 13.8% in December 2022, above the regulatory \nminimum of 10%. The Non-Performing Loans (NPLs) ratio was 4.2%, below the \nregulatory maximum of 5%. The industry’s total credit to the economy \ncontinued to trend upward since 2019 following the Bank’s LDR policy, standing \nat N29.49 trillion as of December 2022. It has increased by N5.14 trillion between \nDecember 2021 and December 2022. \n3.0 \nThe Basis for My Policy Choice \nAt 21.34%, the level of inflation is well above that, which is damaging to growth. \nAlthough the data from NBS showed a decline in inflation in December 2022, \nthe underlying dynamics suggest that the decline may not indicate a turning \n \n \npoint of the upward trend in inflation. Although staff forecasts suggest a further \ndecline in inflation in January, the persistent shortages of PMS and AGO are a \nsignificant risk. In addition, election-related spending is expected to add \nsignificant inflationary pressure to the economy. In considering the options to \ntighten, hold or loosen the policy stance, monetary policy should continue to \nbe tightened to rein in inflation and mitigate the rising foreign exchange \npressure. Consequently, I voted to: \nRaise the MPR by 100 basis points to 17.5% per cent; \nRetain the CRR at 32.5 per cent; \nRetain the asymmetric corridor at +100/–700 basis points; and \nRetain the liquidity ratio at 30.0 per cent. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11. SHONUBI, FOLASHODUN A. \nHopes of the global economy returning to full normalcy after the gradual re-\nopening from the COVID-19 pandemic lockdowns was dashed by a \ncombination of events which disrupted the slow recovery that heralded year \n2022. The dragging effect of zero-COVID policy on the Chinese economy and \nelevated global inflation, driven by increase in food and energy prices on \naccount of Russian-Ukraine crisis, combined to precipitate a gloomy global \neconomy throughout 2022. Hence, year 2023 is starting on a shaky note, amidst \nlingering disruptions to global supply chain and a tighter policy environment, \nheightening the fear of severe slowdown and possible recession. \nWhile contending with spillovers from developments in the global economic \nenvironment, Nigeria is also grappling with peculiar happenings in the domestic \neconomic and socio-political environment. The country struggled with high \ninflation, supply chain difficulties and disruptions to domestic production from \ninsecurity. Targeted interventions though helped to keep output at positive \nlevel. Notwithstanding that aggressive monetary policy recalibration may have \naccounted for a marginal moderation in inflation, ensuring synchronized \nactions by fiscal and monetary authorities to address the challenges will help to \npreserve the fragile progress so far made and aid the steady return to normalcy, \nespecially as the usual complications of an election period stares us in the face. \nGlobal Economic Developments \nThe global economic landscape was bedeviled by severe price pressure and \ndisruptive effects of the ongoing Russian-Ukraine crisis in 2022. The impact on \nglobal economy was aggravated by the slowdown in China and tightening \nfinancial condition due to widespread recalibration of monetary policy to tame \ninflation. Elevated prices adversely impacted the purchasing power and living \ncost in the Advanced Economies causing slowdown in economic activities, just \nas growth prospect in Emerging and Developing Economies was subdued by \nthe effect of high inflation, commodity market uncertainties and record level \nsovereign debt. \n \n \nDomestic Economic Developments \nHeadline inflation (year-on-year) declined marginally to 21.34 per cent in \nDecember 2022, from 21.47 per cent in November 2022. On month-on-month \nbasis, headline inflation, however, inched up to 1.71 per cent, compared with \n1.39 per cent in the preceding month. General price increase continued to be \ndriven by rise in food inflation due to production and distribution challenges, as \nwell as upward trend in core inflation, on account of supply shortage and \nexchange rate pass through to production cost and prices. \n \nThe non-oil sector has been the major driver of growth over the last eight (8) \nquarters with contribution to overall GDP at 94.34 per cent in Q3:2022. This \nreflected strong performance of the service sector, especially information & \ntelecommunications subsector, trade, and muted expansion in the agriculture \nsubsector. The trend has more than made up for the dismal performance of the \noil sector, which is plagued by theft, low investment, and production, denying \nthe economy benefits of the current high price regime in the global oil industry. \nThe Nigerian banking system weathered the storm of a challenging 2022, \nending the year on a generally positive note thereby re-emphasizing its \nresilience. Aside from the industry capital adequacy ratio which closed the year \nat 13.80 per cent, lower than 14.50 per cent at the beginning year, but within \nthe prudential range of 10.00 per cent – 15.00 per cent, all other major financial \nsoundness indicators were in a state better than the levels at the beginning of \n2022. In addition, industry asset and deposit grew throughout the year, \nhighlighting the positive impact of CBN’s financial system stability enhancing \nmeasures on the sector. \nTrends in monetary aggregates were elevated, while developments in the \nfinancial markets generally reflected cautious sentiments due to fallouts from \nuncertainties in the global environment. Growth in major monetary aggregates \nsurpassed the benchmark, driven by expansion in claims on both private and \npublic sectors. Money market rates reflected the impact of aggressive \nmonetary policy tightening stance, while the capital market ended the year on \n \n \na positive note, reflective of the better-than-expected fortunes of major \ncompanies on the Exchange. \nIn 2022, dwindling foreign inflow, amidst rising demand and marginal accretion \nto reserves exerted persistent exchange rate pressure in the external sector. \nTrade and current account balances continued to be pressured by high import, \neven as the authority do all it can to promote export. The fiscal space was \nconstantly under pressure in 2022, as the authority contended with the \nchallenges of low revenue and resources to fund huge expenditure \nrequirement for promoting expansion of economic activities, resulting in \nincreased debt burden. \n \nOverall Considerations and Decision \nAs we begin 2023, global growth prospect has been significantly dampened by \nconstrained aggregate demand in the Advanced Economies, due to \nwidespread purchasing power and cost of living crisis. Burden of huge debt in \nEmerging and Developing Economies has locked-up scarce resources required \nto stimulate economic activities. The situation is compounded by projected \nimpact of general monetary policy tightening to tame inflation. consequently, \nstrong probability of inflation remaining above pandemic levels, imminent \nfinancial stress and heightened prospects of extended slowdown are feared \nmight trigger a recession. \nAs we continue with targeted intervention in selected sectors, domestic output \nis expected to remain positive in 2023, though at a slightly moderated rate. CBN \nhas no doubt done its best to promote growth through preservation of the \nbanking system’s resilience and sustained flow of credit to specific areas of the \nreal sector. Marginal rebound in service and industrial Purchasing Manager’s \nIndex, though below 50.0 point, are reflective of some recovery and optimistic \nsentiment in productive activities, on account of improvement in the state of \nsecurity. At this juncture, while I continue to support the preservation of ongoing \n \n \ncollaboration between the Federal Government and the CBN, I must reiterate \nagain the need for state governments to rise to the occasion and play their part \nas critical facilitators of business and productive activities. As I have mentioned \nin my previous statements, synchronized implementation of reforms by states \nwill go a long way to propel productivity, close the output gap and create \nemployment. \nImportantly, despite our many efforts to facilitate and promote improvement in \nthe economy and social-political life of Nigerians, elevated inflation is a major \nobstacle to progress across various sectors. We cannot celebrate the negligible \nslowdown in December 2022, because the present double-digit inflation has \ngrave implications for citizen’s purchasing power and cost of living, as well as \ncost of production and fortunes of businesses. It is indeed a severe drain on \ncitizen’s income and disincentive to investment. \nI admit that we have done much over the last meetings, adjusting the policy \nrate to curb excessive demand. However, from the data we reviewed at this \nmeeting, liquidity in the system remain high and an important driver of \ninflationary pressure. Without doubt currency redesign will go a long way to \naddress the cash aspect of excess liquidity. Also, either on account of the \nfinancial operations and financing/spending dynamics of the fiscal authority or \ndue to unintended consequences of financial market operations, huge non-\ncash liquidity in the system exerts severe inflationary pressure. Cyclical spending \nin an election year is another channel with major impact on liquidity. Clearly, it \nis not yet time for us to relent. We must continue to take stringent actions and \ntighten further to address the challenges of excess liquidity in the system. \nI therefore vote to: \n• Raise MPR by 150 basis points to 18.0 per cent; \n• Retain asymmetric corridor of +100/-700 basis points around the MPR; \n• Retain CRR at 27.5 per cent; and \n• Retain Liquidity Ratio at 30 per cent. \n \n \n \n \n12. EMEFIELE, GODWIN I. \nGOVERNOR OF THE CENTRAL BANK OF NIGERIA AND CHAIRMAN, MONETARY \nPOLICY COMMITTEE \nGlobal conditions remained severely distressed as the year-long war in Ukraine \npersists with no end in sight. Prevailing risks to short-term prospects are \nescalating, reflecting the adverse effects of the conflict on output and \ninflation. Global outlook is rapidly diminishing and broadening across countries \nand regions. Recovery has stalled and growth momentum fallen. Although \ninflation is beginning to moderate in some key economies, profound energy \nsupply bottlenecks is steepening prices to levels that drastically debilitate \nbusiness confidence and erode households’ purchasing power. Yet, \nwidespread monetary tightening to curb inflation is worsening global fragility. \nMassive layoffs in the US, protracted war in Europe that exacerbated \ncommodity and energy supply shortages, and chronic slowdown in China, \njointly portend global recession. Accordingly, IMF projections cap global \ngrowth at 3.2 percent for 2022 and 2.7 percent for 2023, reflecting lower \nestimates for both advanced economies and EMDEs. \nAmidst the dampening effect of global conditions, short-term outlook of the \nNigerian economy remained stable and tilts to the upside. The steady pick-up \nof economic activities observed throughout 2022 is expected to continue in \n2023, keeping recovery on-track. This follows programmed measures to \nmitigate external shocks, curtail domestic constraints, strengthen economic \nfundamentals, elicit structural rebalancing, and boost long-run prosperity. \nRegardless of existing fragilities and relentless exogenous threats, the Nigerian \neconomy has so far largely withstood powerful global pressures. \nWith a 2.25 percent year-on-year growth in 2022q3 vis-à-vis 3.54 percent in \n2022q2, GDP remained on track and could consolidate in 2023. This followed \nthe sustained rebound of business activities, increased labour mobilisation, and \nexpanding productive capacity especially in the non-oil sector. At 4.27 \n \n \npercent, growth in the non-oil sector remained robust in 2022q3 reflecting the \nfaster 7.01 percent expansion in services and 1.34 percent in agriculture. \nHowever, contraction of oil GDP worsened to -22.67 percent due to acute \nimpairments in the sector. In-house analysis projects 2023 growth at 3.01 \npercent vis-à-vis 2.88 percent estimated for 2022 and 3.40 percent recorded in \n2021. This performance was buoyed by continued CBN’s interventions to \nsupport critical economic activities, resolve the long-standing structural \nconstraints, and bolster domestic productivity with favourable effects on \nmarket prices. \nThough year-on-year inflation rate, at 21.34 percent in December 2022, \nremained above medium-term average and the Bank’s tolerant band, it \neased 0.13 percentage points from November. This marginal reduction \nreflected the 0.38 percentage points drop in food inflation to 23.75 percent as \nagainst the 0.25 percentage points rise in core inflation to 18.49 percent. This \nyear-on-year disinflation is feeble, especially as seasonality factors elevated \nmonth-on-month inflation by 0.32 percentage points to 1.71 percent in \nDecember. I noted that headline inflation, at over 21 percent unacceptably \nremained at growth-inhibiting level and must be resolutely tackled. Generally, \nglobal forces, infrastructure and energy drawbacks, security challenges, \nelectioneering cycle, plus logistic and distribution inadequacies are propping \ndomestic inflation. Some of these factors are being tackled through our \ndevelopmental initiatives. Near-term outlook suggests noticeable disinflation in \n2023 if adequate policy measures are timeously undertaken. \nObserved inflation levels also reflected liquidity conditions in December 2022. \nAt 11.61 percent, the 0.85 percentage points (month-on-month) fall in \nweighted average OBB rate implied surfeit of financial market liquidity. \nCorrespondingly, money stock (M3) quickened by 16.52 percent beyond the \n15.21 percent programmed target and 13.92 percent in November 2022. This \nwas attributable to 36.46 percent growth of net domestic assets following the \n20.17 percent rise in banking system credits to the private sector. With a N5.14 \n \n \ntrillion year-on-year rise in December 2022 to N29.72 trillion, gross credit by the \nbanking industry maintained its upward trajectory since 2019 due largely to \nCBN’s LDR directive, increased industry funding base, and business \ncompetition. Satisfyingly, key performance indicators showed wide-ranging \nstability of the banking system with the NPL ratio (4.21 percent), liquidity ratio \n(44.12 percent) and CAR (13.76 percent), all outdoing their prudential limits. \nIn my consideration, I note that the global economy continues to face arduous \nchallenges, which has broadly weakened short-term prospects. The risk of \nglobal downturn is heightened as the Russia-Ukraine war dislocates global \nsupply of energy and commodities. Growth momentum is waning even as the \nenergy crisis keeps inflation at records heights. Widespread monetary \ntightening to curb inflation is further constricting global demand and elevating \nfinancial vulnerabilities. The conflict could protract longer-than-envisaged, \nthus, elongating global economic distress, escalating the stress on households \nand businesses, permanently denting potential output, and further \nundermining vulnerable economies. \nI note that the Nigerian economy has so far weathered global despondence \nand adverse spillovers. But the threat is unrelenting and needs to be \nadequately mitigated with timely macroeconomic measures to strengthen our \nfundamentals, spur structural rebalancing, ensure self-sufficiency, reduce \ndependence on external sector, and diversify our productive base. I note that \nthe various development finance initiatives of the CBN are helpful so far, with \na tangential benefit of lowering structural inflation. I also note that, although, \nthe recent drop in inflation may signal the start of the disinflation cycle, current \ninflation has unsatisfactorily remained at growth-inhibiting levels. Failure to \neffectively tackle inflation will not only entrench it at high levels and \ndetrimentally normalise expectations, but it will also harm long-run growth. \nIt is also imperative to ensure that inflation is at levels that will reverse negative \nreal interest rate and support business decisions productively. I emphasise the \n \n \nneed to decisively curb inflation mindful of the attendant output loss from \ntighter policy. To modulate the sacrifice-ratio, and based on available \nprojections, I am inclined for a reduced pace of tightening at this meeting. \nOverall, I note that global downturn continued to threaten domestic outturns, \nas energy constraints push inflation to harmful heights. Further monetary \ntightening to reverse high inflation expectation is paramount at this moment, \nalthough such hike could be at lesser pace to balance output concerns. I note \nthat earlier tightening measures are yielding desired results as inflation impetus \nis waning. I advocate a cautious action that returns inflation within tolerable \nlevels and minimises output loss. Thus, I vote to: \ni. Raise the MPR by 50 basis points to 17.00 percent; \nii. Retain the asymmetric corridor at +100/–700 basis points \niii. Retain the CRR at 32.50 percent; and \niv. Retain liquidity ratio at 30.00 percent. \n \nGODWIN I. EMEFIELE, CON \nGovernor \n \nJanuary 2023", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No. 146 of the 289th Monetary Policy Committee Meeting Held on Monday 23rd and Tuesday 24th January 2023 and Personal Statements of Members.pdf"}
{"doc_id": "b123604741e3d8b076569bbcbfefad86", "text": "MENU\nB.1.1 Summary of Federal Government Finances\nB.1.2 Federal Government Recurrent Expenditure\nB.1.3 Federal Government Capital Expenditure\nB.1.4 Federal Government’s Domestic Debt Outstanding\nB.1.5 Holdings of Federal Government’s Domestic Debt\nOutstanding\nB.1.6 Nigeria's External Debt Outstanding\nB.2.1 Summary of State Governments' and Federal Capital\nTerritory Finances\nB.3.1 Summary of Local Governments' Finances\nB.3.2 Local Government Total Outstanding Debts\nReturn to\nMenu\nTable B.1.1:\nSummary of\nFederal\nGovernment\nFinances (N'\nBillion)\nItem\n1981\n1982\n1983\nTotal\nFederally\nCollected\nRevenue\n13.2905\n11.4337\n10.5087000\nOil Revenue\n8.5643999999999991\n7.8148999999999997\n7.25300000\nNon- Oil\nRevenue\n4.7261000000000006\n3.6188000000000002\n3.2557\nFederation\nAccount\n10.182799999999999\n9.8849\n9.79860000\nFed Govt\nRetained\nRevenue\n7.5116000000000005\n5.8191000000000006\n6.27200000\nTotal\nExpenditure\n11.4137\n11.923200000000001\n9.63649999\nRecurrent\nExpenditure1\n4.8467000000000002\n5.5060000000000002\n4.75079999\nCapital\nExpenditure2\n6.5670000000000002\n6.4172000000000002\n4.88569999\nCurrent\nSurplus(+)/\nDeficit(-)\n2.6649000000000003\n0.31310000000000004 1.52120000\n% of GDP\n2.8252312553218748\n0.30996554838398899 1.38210454\nOverall\nSurplus(+)/\nDeficit(-)\n-3.9021000000000003 -6.1041000000000007 -3.3645\n% of GDP\n-4.1368662544153576 -6.0429917083701916 -3.05685692\nNominal\nGDP\n94.325021889098139\n101.01122580633641\n110.064032\nFinancing:\n3.9021000000000003\n6.1041000000000007\n3.3645\nForeign (net) 0.46439999999999998 0.26350000000000001 1.1069\nDomestic\n(net)\n4.2008000000000001\n3.4020000000000001\n7.05700000\nBanking\nSystem (net)\nof which:\n3.0179999999999998\n3.9891999999999999\n5.29630000\nCBN\n3.6240999999999999\n2.9891999999999999\n3.27119999\nDeposit\nMoney Banks\n-\n-\n-\nNon Bank\nPublic\n1.1827999999999999\n0.4128\n1.76070000\nPrivatization\nProceed\n0\n0\n0\nOther\nFunds3\n-0.7631\n2.4386000000000001\n-4.79939999\nSources:\nFederal\nMinistry of\nFinance &\nCentral Bank\nof Nigeria\nNotes:\n1Includes\ninterest\npayments on\ndebt service,\nother\ntransfers and\nextra-\nbudgetary\nitems\n2Includes\ncapital\nrepayments\non debt\nservice,\nother\ntransfers and\nnet lending\n3Includes\nPublic,\nSpecial and\nTrust Funds,\nTreasury\nClearance\nFunds,\nexcess\nreserves, etc\nMinus (-)\ndenotes\nincrease;\nPlus (+)\ndenotes\ndecrease\n4Revised\n5Provisional\nReturn to Menu\nTable B.1.2:\nFederal\nGovernment\nRecurrent\nExpenditure (N'\nBillion)\nFunction\n1981\n1982\n1983\nAdministration 0.9149110502031832\n1.0393670419911953\n0.896\n1. General\nadministration\n0.9149110502031832\n1.0393670419911953\n0.896\n2. Defence\n-\n-\n-\n3. Internal\nSecurity\n-\n-\n-\n4. National\nAssembly\n-\n-\n-\nSocial and\nCommunity\nServices\n0.29474654306355119\n0.3348411220228017\n0.288\n5. Education\n0.16542735212777968\n0.1879305508522407\n0.162\n6. Health\n8.4457536121458399E-2 9.594635399029236E-2\n8.278\n7. Other social\nand community\nservices\n4.4861654814313125E-2 5.0964217180268653E-2 4.397\nEconomic\nServices\n0.17565115913195614\n0.19954510949317078\n0.172\n8. Agriculture\n1.3027660430071114E-2 1.4799822214696919E-2 1.276\n9. Construction 9.6664556524438408E-2 0.10981390393949655\n9.475\n10. Transport &\nCommunication\n3.2415281070098202E-2 3.6824754486962409E-2 3.177\n11. Other\neconomic\nservices\n3.3543661107348459E-2 3.81066288520149E-2\n3.287\nTransfers\n3.4613912476013091\n3.9322467264928322\n3.392\n12. Public debt\nservicing\n1.0274071205835871\n1.1671660317191557\n1.007\n13. Pensions\nand gratuities\n0.21039158694547916\n0.2390113020656959\n0.206\n14.\nContingencies/\nsubventions\n8.7193002878428721E-3 9.905392820860141E-3\n8.546\n15. Other/\nOther CFR\ncharges\n2.2148732397844002\n2.5161639998871204\n2.171\nTOTAL*\n4.8467000000000002\n5.5060000000000002\n4.750\nSources:\nFederal\nRepublic of\nNigeria Official\nGazettes and\nthe various\nstates' official\nGazettes\nNote:\n*Excludes\ninterest\npayments on\ndebt service,\nother transfers\nand extra-\nbudgetary\nitems\nReturn to\nMenu\nTable B.1.3:\nFederal\nGovernment\nCapital\nExpenditure\n(N' Billion)\nAdmin-\n% of\nEconomic\nYear\nistration\nTotal\nServices\n1981\n0.72010000000000007 10.96543322673976\n3.6294\n1982\n0.38539999999999996 6.0057345882939597 2.5425\n1983\n1.0982000000000001\n22.477843502466381 2.2906999999\n1984\n0.26269999999999999 6.4071608009560732 0.6562999999\n1985\n0.45960000000000001 8.4103427452559156 0.8927000000\n1986\n0.26480000000000004 3.105502650466764\n1.0999000000\n1987\n1.8162\n28.500588466065125 2.1597\n1988\n1.8985999999999998\n22.764715051378285 2.1286999999\n1989\n2.6175000000000002\n17.410420311159296 3.9263000000\n1990\n2.9199000000000002\n12.141663132157381 3.4857\n1991\n3.3450000000000002\n11.8027303296649\n3.145\n1992\n5.1185\n12.872422560501768 2.3367\n1993\n8.0816999999999997\n14.82831759685001\n18.3447\n1994\n8.7850999999999999\n12.387634785379795 27.102799999\n1995\n13.3378\n11.010390603137074 43.1492\n1996\n14.8636\n6.9806313264260913 117.82910000\n1997\n49.548999999999999\n18.375185470738735 169.6131\n1998\n35.270400000000002\n11.413792701727681 200.86189999\n1999\n42.737199999999994\n8.5812914786248786 323.58080000\n2000\n53.279499999999999\n22.250699412697966 111.5086\n2001\n49.254899999999999\n11.227557092431784 259.75779999\n2002\n73.577399999999997\n22.894341587058982 215.33339999\n2003\n87.9589\n36.393528358633823 97.982100000\n2004\n137.76585\n39.221594306049816 167.7218\n2005\n171.57413523020003\n33.028689862783224 265.03467288\n2006\n185.22425081580002\n33.53168217137371\n262.20729257\n2007\n226.97440434701599\n29.893325505454392 358.37564660\n2008\n287.10358507800368\n29.878920084409621 504.28687361\n2009\n291.66000000000003\n25.300215606136906 506.01\n2010\n260.2\n29.438568484552952 412.2\n2011\n231.8\n25.235455619183693 386.4\n2012\n190.5\n21.775410360751678 321.04000000\n2013 1\n283.649369734\n25.591198990384633 505.76500111\nSources:\nFederal\nMinistry of\nFinance,\nOffice of the\nAccountant-\nGeneral of\nthe\nFederation\nNote:\n1Provisional\nSources:\nFederal\nMinistry of\nFinance,\nOffice of the\nAccountant-\nGeneral of\nthe\nFederation\nReturn to\nMenu\nTable B.1.4:\nFederal\nGovernment's\nDomestic\nDebt\nOutstanding\n(N' Billion)\nYear\nTreasury\nFGN\nTreasury\nBills\nBonds1\nCertificates\n1981\n5.782\n0\n2.0575999999\n1982\n9.782\n0\n1.6685999999\n1983\n13.476000000000001 0\n4.8943999999\n1984\n15.476000000000001 0\n6.4131\n1985\n16.975999999999999 0\n6.6541000000\n1986\n16.975999999999999 0\n6.6547000000\n1987\n25.225999999999999 0\n6.6541000000\n1988\n35.475999999999999 0\n6.7946\n1989\n24.126000000000001 0\n6.9446000000\n1990\n25.475999999999999 0\n34.214599999\n1991\n57.763100000000001 0\n34.214599999\n1992\n119.75280000000001 0\n35.241399999\n1993\n116.38069999999999 0\n36.584300000\n1994\n170.92589999999998 0\n37.342699999\n1995\n276.90520000000004 0\n23.596299999\n1996\n179.62799999999999 0\n0\n1997\n364.52350000000001 0\n0\n1998\n378.5301\n0\n0\n1999\n361.75840000000005 0\n0\n2000\n465.53570000000002 0\n0\n2001\n584.53579999999999 0\n0\n2002\n733.76250000000005 0\n0\n2003\n825.05449999999996 72.56\n0\n2004\n871.577\n72.56\n0\n2005\n854.82839999999999 250.83\n0\n2006\n695\n643.94090000000006 0\n2007\n574.92942999999991 1186.1600000000001 0\n2008\n471.92942800000003 1445.5995819999998 0\n2009\n797.48244599999998 1974.9265700000001 0\n2010\n1277.101559\n2901.6003289999999 0\n2011\n1727.914364\n3541.1988480000005 0\n2012\n2122.9269570000001 4080.0488479999999 0\n2013\n2581.550643\n4222.0377099999996 0\nSource:\nCentral Bank\nof Nigeria\nand Debt\nManagement\nOffice\nNotes:\n1Issuance of\nFGN Bonds\ncommenced\nin 2003.\nReturn to\nMenu\nTable B1.5:\nHoldings of\nFederal\nGovernment's\nDomestic\nDebt\nOutstanding\n(N' Billion)\nYear\nCBN\nCommercial Banks\nMerchant Bank\n1981\n4.5236000000000001 1.7739\n6.9400000000\n1982\n6.4888999999999992 2.8186\n0.1746999999\n1983\n10.402200000000001 5.1403999999999996 0.3855000000\n1984\n9.5317000000000007 8.7261000000000006 0.8940000000\n1985\n9.9055\n10.254899999999999 1.1339000000\n1986\n16.103300000000001 4.4219999999999997 0.1482\n1987\n17.646900000000002 7.5727000000000002 0.2853999999\n1988\n26.635999999999999 7.3096000000000005 0.1678999999\n1989\n15.6477\n3.6139999999999999 8.4599999999\n1990\n27.380800000000001 8.702399999999999\n0.3621000000\n1991\n62.2943\n6.8135000000000003 0.6730000000\n1992\n138.7696\n5.5351000000000008 0.6932999999\n1993\n202.43470000000002 29.535400000000003 9.3439999999\n1994\n308.44081349960999 38.9011\n8.3710000000\n1995\n414.28593392920999 20.5398\n1.7558\n1996\n312.80426257656995 47.243300000000005 8.8218999999\n1997\n403.30154926672003 39.402200000000001 5.6978999999\n1998\n454.91050820316997 48.795300000000005 8.8797000000\n1999\n530.42082642499997 188.16550000000001 13.325299999\n2000\n498.92\n344.89\n0\n2001\n569.51\n386.45\n0\n2002\n519.77080000000001 460.22949999999997 0\n2003\n613.79\n500.43\n0\n2004\n403.46170000000001 669.0702\n0\n2005\n408.42093999999997 726.22663999999997 0\n2006\n335.53469999999999 882.85094000000004 0\n2007\n293.5838\n1410.04251\n0\n2008\n289.37\n1482.16\n0\n2009\n323.18\n1274.58\n0\n2010\n343.14\n2605.0100000000002 0\n2011\n348\n3790.8\n0\n2012 21\n398.26827514500002 3307.5277299999998 0\n2013 32\n544.06518000000005 3865.8877200000002 0\nSource:\nCentral Bank\nof Nigeria\nand Debt\nManagement\nOffice\nNote: 1\nRevised\n2 Provisional\nReturn to\nMenu\nTable B.1.6:\nNigeria's\nExternal\nDebt\nOutstanding\n(N' Billion)\nYears\nMultilateral\nParis Club\nLondon\nClub\n1981\n0.17959999999999998 1.9759\n0\n1982\n0.53039999999999998 5.4743999999999993 1.9817\n1983\n0.56640000000000001 6.0022000000000002 2.7588000000\n1984\n1.2712000000000001\n6.3603999999999994 5.4436999999\n1985\n1.2935000000000001\n7.7263999999999999 6.1642999999\n1986\n4.6707000000000001\n21.725300000000001 8.4447000000\n1987\n8.7814999999999994\n63.205599999999997 6.7664999999\n1988\n9.9917999999999996\n75.445300000000003 14.9861\n1989\n21.473599999999998\n121.2296\n42.84\n1990\n34.606300000000005\n154.5506\n53.431800000\n1991\n39.458300000000001\n173.05120000000002 58.238099999\n1992\n89.274299999999997\n324.72990000000004 41.890599999\n1993\n81.456299999999999\n400.3809\n45.323800000\n1994\n97.056600000000003\n404.21259999999995 45.367899999\n1995\n97.042000000000002\n476.7312\n44.99\n1996\n102.63\n420.00200000000001 44.945999999\n1997\n96.198999999999998\n417.56880000000001 44.945999999\n1998\n93.213999999999999\n458.25779999999997 44.945999999\n1999\n361.19490000000002\n1885.6648\n187.62710000\n2000\n379.04300000000001\n2320.2689999999998 223.83260000\n2001\n313.50470000000001\n2475.5093999999999 228.95020000\n2002\n375.70009999999996\n3220.8235\n182.96449999\n2003\n413.8777\n3737.2799\n196.15690000\n2004\n384.24869999999999\n4196.8445999999994 196.15549999\n2005\n330.65440000000001\n2028.5801000000001 189.76839999\n2006\n332.2192\n0\n0\n2007\n374.30347389999997\n0\n0\n2008\n464.55784560000006\n0\n0\n2009\n524.20460580000008\n0\n0\n2010\n635.44772160000002\n0\n0\n2011\n723.12296839999999\n0\n0\n2012\n727.32243029999995\n0\n0\n2013\n986.83795199999997\n0\n0\nSources:\nCentral\nBank of\nNigeria and\nDebt\nManagement\nOffice\nReturn to\nMenu\nTable B.2.1:\nSummary of\nState\nGovernments'\nand Federal\nCapital\nTerritory\nFinances (N'\nBillion)\n1981\n1982\n1983\nTotal\nRevenue\n4.8748000000000005\n4.5614999999999997\n4.329399\n(i)\nFederation\nAccount1\n3.8256000000000001\n3.2456999999999998\n2.958499\n(ii) Value\nAdded Tax\n-\n-\n-\n(iii) Internal\nRevenue\n0.1426\n7.4900000000000008E-2 3.799999\n(iv) Grants &\nOthers\n0.90660000000000007 1.2409000000000001\n1.332900\n(v)\nStabilization\nFunds\nReceipts\n-\n-\n-\n(vi) Others\n0\n0\n0\nRecurrent\nExpenditure\n4.6109999999999998\n4.7338999999999993\n5.262100\nCurrent\nSurplus (+)/\nDeficit (-)\n0.26380000000000003 -0.1724\n-0.932700\nCapital\nExpenditure\n6.3798999999999992\n5.9466000000000001\n5.828800\nExtra-\nbudgetary\nExpenditure6\n0\n0\n0\nTotal\nExpenditure\n10.9909\n10.6805\n11.0909\nOverall\nSurplus (+)/\nDeficit (-)\n-6.1160999999999994 -6.1189999999999998\n-6.761499\nFinancing\n6.1161000000000003\n6.1189999999999998\n6.761499\n(a) Internal\nLoans2\n0.55889999999999995 0.54679999999999995\n-0.736999\n(b) External\nLoans\n1.1674\n1.3311999999999999\n1.6528\n(c) Opening\nCash Balance\n-\n-\n-\n(d) Other\nFunds3\n4.3898000000000001\n4.2409999999999997\n5.845699\nSources:\nCentral Bank\nof Nigeria/\nOffices of the\nAccountant\nGeneral of\nthe States\nand Federal\nCapital\nTerritory\n(FCT)\nNote: F.C.T.\nfinances are\nincluded as\nfrom 1990\n1Statutory\nAllocations\n(Gross)\n2Internal\nLoans\ninclude\nCapital\nReceipts for\n1986-1989\n3Positive\n(+) sign\nconnotes\ndecrease\nwhile\nnegative (-)\nsign connotes\nincrease in\nOther Funds\n4Revised\n5Provisional\n6 Includes\ncontribution\nto external\ndebt fund\nand other\ndeductions at\nsource\n\"-\" Indicates\n\"Not\nAvailable\"\nReturn to Menu\nTable B.2.2:\nDomestic Debt of\nState Governments\n(N' Million)\nState\n2011\n2012\nAbia\n24202.240000000002 8663.7857495400003\nAdamawa\n25954.2\n24284.06029361\nAkwa-Ibom\n41253.910000000003 108889.39260956\nAnambra\n6403.32\n14299.992428040001\nBauchi\n18345.73\n18807.271224209999\nBayelsa\n162822.65\n222401.77013028\nBenue\n16631.14\n24402.439512360001\nBorno\n1684.56\n24423.19727964\nCross-River\n90750.05\n90872.909453460001\nDelta\n90843.57\n83684.012083549998\nEbonyi\n40239.94\n28895.754999500001\nEdo\n39044.300000000003 62274.74267793\nEkiti\n23667.51\n39587.701580360001\nEnugu\n10887.17\n17354.185792709999\nGombe\n7170.42\n30243.536993379999\nImo\n25419.4\n16700.726473350001\nJigawa\n1590.54\n2081.4256239400002\nKaduna\n34771.71\n22855.929138\nKano\n5867.29\n5867.2905419999997\nKatsina\n2059.88\n918.92588676000003\nKebbi\n7291.05\n2716.0072\nKogi\n34122.120000000003 14979.189827\nKwara\n25254.47\n29776.55897849\nLagos\n157536.16\n230432.88048176002\nNassarawa\n5336.06\n7096.1404742599998\nNiger\n16975.509999999998 17802.495694000001\nOgun\n30143.97\n45726.563647169998\nOndo\n48369.86\n36518.092218010002\nOsun\n5463.64\n38600\nOyo\n4808.3900000000003 11726.21452172\nPlateau\n20908.12\n24117.321248880002\nRivers\n83978.39\n81459.189147149998\nSokoto\n4902.05\n2997.3095195199999\nTaraba\n17974.66\n16701.017997040002\nYobe\n2088.4\n3991.2171091499999\nZamfara\n12968.38\n15508.107216320001\nFCT\n85563.89\n123992.77048351\nTOTAL\n1233294.6499999999 1551650.1262361603\nSource: Debt\nManagement Office\n(DMO)\nReturn to\nMenu\nTable B.3.1:\nSummary of\nLocal\nGovernments'\nFinances (N'\nBillion)\n1993\n1994\n1995\nCURRENT\nREVENUE\n19.874500000000001\n19.223100000000002\n24.412\n(i) Federation\nAccount3\n18.316400000000002\n17.321300000000001\n17.875\n(ii) State\nAllocation\n0.25309999999999999\n0.46639999999999998\n0.6253\n(iii) Value\nAdded Tax\n0\n0\n3.5581\n(iv) Internally\nGenerated\nRevenue\n1.0355999999999999\n1.2059000000000002\n2.1108\n(v) Grants &\nOthers4\n0.26939999999999997\n0.22950000000000001\n0.2429\nRECURRENT\nEXPENDITURE\n13.9665\n14.8842\n16.317\nCurrent\nSurplus(+)/\nDeficit(-)\n5.9080000000000004\n4.3389000000000015\n8.0954\nCAPITAL\nEXPENDITURE\n5.5087999999999999\n4.0829000000000004\n6.1261\nTOTAL\nEXPENDITURE\n19.475300000000001\n18.967100000000002\n22.443\nOverall\nSurplus(+)/\nDeficit(-)\n0.39920000000000072\n0.25600000000000001\n1.9693\nFINANCING\n-0.39920000000000072\n-0.25600000000000001\n-1.969\n(a) Loans\n3.9899999999999998E-2 7.1499999999999994E-2 5.0500\n(b) Opening\nCash Balance\n-\n-\n-\n(c) Other\nFunds5\n-0.43910000000000071\n-0.32749999999999635\n-2.019\nSource:\nCentral Bank\nof Nigeria\nNotes: Local\nGovernment\nSurvey\ncommenced in\n1993\n1Revised\n2Provisional\n3Made up of\nGross\nStatutory\nAllocation,\nExchange\nGain, Share of\nExcess Crude,\nFGN refund to\nLocal\nGovernments\nand\nAugmentation\n4Include\nStabilization\nFund and Gen.\nEcology\n5Positive (+)\nsign connotes\ndecrease while\nnegative (-)\nsign connotes\nincrease in\n'Other Funds'.\nReturn to\nMenu\nTable B3.2\nLocal\nGovernments\nTotal\nOutstanding\nDebts1\n(Naira\nMillion)\nState\nNo\nof\nLGs\n2007\n2008\n2009\nAbia\n17\n152.12988054000002 55.761371349685717\n2718.425\nAdamawa\n21\n1571.624\n64.406475125364381\n1567.951\nAkwa Ibom\n31\n24.2\n12.399019283784234\n303.4430\nAnambra\n21\n1441.2855709999999 21.69143608241837\n410.7\nBauchi\n20\n1348.3146954900001 78.164179697969942\n1567.668\nBayelsa\n8\n149.91\n3.2964573016185619\n103.21\nBenue\n23\n1044.8215867599999 28.811426437935424\n1113.323\nBorno\n27\n833.94215296000004 3.9857287604217921\n9053.555\nCross River\n18\n638.30155790999981 35.049974937046393\n608.3404\nDelta\n25\n1557.7242385100001 80.836144407208195\n2987.528\nEbonyi\n13\n22.644250849999999 9.7373942876690602\n707.9367\nEdo\n18\n292.40859136\n50.450176421426249\n1352.235\nEkiti\n16\n492.95098999999999 1665.6193359326885\n16580.50\nEnugu\n17\n598.45716000000004 24.996056081544516\n1240.210\nGombe\n11\n90.277350589999983 15.897517909805906\n1100.208\nImo\n27\n281.33130299999999 30.423237177467414\n1111.143\nJigawa\n27\n436.99662503000002 4.9834370705266666\n458.0435\nKaduna\n23\n245.5411\n43.889536318227258\n880.8391\nKano\n44\n2380.7992953600001 95.759560120738101\n1920.567\nKatsina\n34\n27.614417920000001 10.446980387684397\n163.0611\nKebbi\n21\n235.24918199999999 30.035941241398703\n3483.128\nKogi\n21\n819.02559697000004 19.270311182367237\n2210.404\nKwara\n16\n1193.5745735800001 16.403036467884942\n839.4515\nLagos\n20\n257.09657098000002 16.568802782770746\n1380.330\nNassarawa\n13\n819.59485672000005 9.7348839342366649\n942.5491\nNiger\n25\n377.57595952000003 7.2004184252301364\n304.4453\nOgun\n20\n0\n15.178834452753295\n496.7896\nOndo\n18\n427.20129125\n23.13687222690633\n460.6548\nOsun\n30\n75.710261220000007 0.97785831807278956 405.6016\nOyo\n33\n557.65612999999996 198.75249442217597\n217.6469\nPlateau\n17\n1026.3882009199999 24.401018568936994\n2549.257\nRivers\n23\n1303.8779906500001 4.7821875225900952\n542.8782\nSokoto\n23\n277.92635999999999 33.520653316295565\n886.9083\nTaraba\n16\n3196.44695\n59.338386033132878\n1330.578\nYobe\n17\n42.802019999999999 56.266327897133394\n71.75104\nZamfara\n14\n581.73396681999998 14.597687894868024\n232.1727\nFct\n6\n540.64189075000002 39.354542969716711\n1442.471\nTotal\n774 25363.77656866\n2906.1257027477009\n63745.91\nSource:\nCentral Bank\nof Nigeria\nAnnual\nSurvey\nNote:\n1Provisional", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Annual_Reports/2013 Statistical Bulletin Public Finance Statistics.pdf"}
{"doc_id": "5c55c12d102b3b4069b54d5f9cbdfa77", "text": "1 \n \n \nDate: Tuesday, 22nd July 2025 \nRef: CBN/MPC/COM/158/301 \nAttention: News Editors/Gentlemen of the Press \n \nMONETARY POLICY RATE RETAINED AT 27.50 PER CENT \n \nThe Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) \nheld its 301st meeting on July 21 and 22, 2025 to review recent economic and \nfinancial developments and the outlook. All twelve (12) members of the \nCommittee were in attendance. \n \nDecision of the MPC \nThe Committee decided to maintain the current monetary policy stance and \nhold all policy parameters constant as follows: \n1. Retain the Monetary Policy Rate (MPR) at 27.50 per cent. \n2. Maintain the asymmetric corridor around the MPR at +500/-100 basis \npoints. \n3. Retain the Cash Reserve Ratio (CRR) for Deposit Money Banks at 50.00 \nper cent and for Merchant Banks at 16.00 per cent. \n4. Keep the Liquidity Ratio unchanged at 30.00 per cent. \nThis decision was premised on the need to sustain the momentum of \ndisinflation and sufficiently contain price pressures. Maintaining the current \npolicy stance will continue to address the existing and emerging inflationary \npressure. The MPC will continue to undertake rigorous assessment of \neconomic conditions, price development and outlook to inform future policy \ndecisions. \n \n \n \n2 \n \nConsiderations \nThe Committee acknowledged the decline in headline inflation in June 2025, \nthe third consecutive month of deceleration. This was largely driven by the \nmoderation in energy prices and stability in the foreign exchange market. \nDespite these positive developments, Members observed the uptick in \nmonth-on-month headline inflation, suggesting the persistence of underlying \nprice pressures. The continued global uncertainties associated with the tariff \nwars and geopolitical tensions could further exacerbate supply chain \ndisruption and exert pressure on the prices of imported items. \nMembers also noted the continued stability in the banking system, evidenced \nby the stable Financial Soundness Indicators (FSIs) which would further be \nsupported by the on-going banking recapitalisation exercise. The MPC noted \nthat eight (8) banks have fully met the recapitalisation requirements, while \nothers are making progress towards meeting the deadline. The Committee \nthus, urged the Management of the Bank to sustain its oversight of the \nbanking system to ensure continued resilience, safety and soundness of the \nfinancial system. \nPrice and Other Domestic Developments \nHeadline inflation (year-on-year) declined to 22.22 per cent in June 2025 from \n22.97 per cent in May, primarily driven by the moderation in energy prices, \nespecially cooking gas, wood charcoal and diesel. Food inflation (year-on-\nyear), however, rose to 21.97 per cent in June 2025 from 21.14 per cent in \nMay, attributed mainly to the increase in the cost of processed food. Core \ninflation, that is, all items less farm produce and energy, also increased to \n22.76 per cent in June 2025 from 22.28 per cent in May, reflecting an uptick in \nthe cost of Information & Communication, Housing & Utilities, and Personal \nCare & Social Services. \nOn a month-on-month basis, headline inflation rose to 1.68 per cent from 1.53 \nper cent, largely due to increases in the price of services and imported food. \nThe Committee acknowledged the efforts of the Federal Government in \nimproving security and its impact on food production. Members thus urged \nthe government to continue its support towards timely provision of high-yield \nseedlings, fertilizers, and other critical inputs for the current farming season. \nThe MPC also noted the sustained stability in the foreign exchange market, \naccentuated by improved capital flows, earnings from increased crude oil \nproduction, rising non-oil exports and significant reduction in aggregate \nimports. \n \n3 \n \nReal GDP in the first quarter of 2025 grew by 3.13 per cent compared with \n2.27 and 3.38 per cent in the corresponding and preceding quarters of 2024, \nrespectively. In addition, recent data on the Purchasing Managers Index \nindicates that the Nigerian economy remains on an expansionary path. The \nexternal sector also remains stable and resilient despite persisting \nuncertainties in the global macroeconomic environment. Gross external \nreserves rose to US$40.11 billion on July 18, 2025, representing about 9.5 \nmonths of import cover for goods. \nGlobal Developments \nAvailable projections suggest that global output recovery continues at a \ngradual pace. However, recent developments, especially the persistent tariff \nwar and geopolitical tensions, may continue to disrupt supply chains and \nexert upward pressure on the prices of imports. \nDisinflation in the Advanced Economies has slowed, prompting major central \nbanks to be cautious of upside risks to inflation. In the Emerging Markets, \ncentral banks continue to calibrate monetary policy to their domestic \nconditions, noting the persisting risks to inflationary pressures. \nOutlook \nStaff projections indicate a further decline in inflation in the coming months, \nunderpinned by the current tight monetary policy stance, stable exchange \nrate, declining PMS prices, and moderation in food prices as the harvest \nseason approaches. \nGiven the persistent uncertainty in the policy environment and underlying \nprice pressures, monetary policy will need to maintain its current stance until \nrisks to inflation recede sufficiently. The Committee remains committed to the \nBank’s price stability mandate and would take appropriate measures to \nfoster stability and confidence in the economy. \nThe next meeting of the Committee is scheduled for Monday, 22nd and \nTuesday, 23rd September 2025. \nThank you. \nOlayemi Cardoso \nGovernor, \nCentral Bank of Nigeria \nJuly 22, 2025. \n \n4 \n \n \nPERSONAL STATEMENTS BY \nTHE MONETARY POLICY COMMITTEE MEMBERS \nMPC MEETING JULY 21 – 22, 2025 \n \n1. AKU PAULINE ODINKEMELU \nI vote to retain the Monetary Policy Rate (MPR) at 27.50 per cent, the \nasymmetric corridor around the MPR at +500/-100 basis points, Cash Reserve \nRatio of Deposit Money Banks at 45.00 per cent and Merchant Banks at 16 \nper cent, and the Liquidity Ratio at 30.00 per cent. My decision is influenced \nby the following developments: \nEconomic and Financial Developments \nSince the May 2025 meeting, global economic conditions have shown little \nmeaningful improvement. Growth prospects remain subdued by persistent \ngeopolitical tensions, particularly, in the Middle East and the ongoing Russia-\nUkraine conflict, alongside policy uncertainty, tight financial conditions, and \nescalating trade restrictions. Notably, the U.S. and its major trading partners \nhave imposed tariffs on critical sectors, pushing global tariff rates to historic \nhighs, as highlighted in the IMF’s April 2025 World Economic Outlook. Trade \nwars, particularly through tariff hikes, act as a negative supply shock that \ncould reduce aggregate productivity by distorting resource allocation. While \nthe latest round of scheduled tariffs is currently paused, the existing measures \nare expected to dampen global output. \nThe IMF projects global growth to slow from 3.3 per cent in 2024 to 2.8 per \ncent in 2025 before a modest recovery to 3.0 per cent in 2026. The Advanced \neconomies will bear the brunt of this slowdown, with growth declining from \n1.8 per cent in 2024 to 1.4 per cent in 2025 and 1.5 per cent in 2026. Growths \nin the emerging markets and developing economies (EMDEs) are also \nexpected to moderate, from 4.3 per cent in 2024 to 3.7 per cent in 2025 and \n3.9 per cent in 2026. Sub-Saharan Africa’s growth has been revised \ndownward to 3.8 per cent in 2025 (from 4.0 per cent in 2024), with a tentative \nrebound to 4.2 per cent in 2026. These challenges underscore the urgent \nneed for coordinated multilateral efforts to address trade restrictions and \ngeopolitical instability. However, progress has been slow, with policy \nresponses remaining either passive or ineffective. \nGlobal inflation is expected to continue its downward trajectory, converging \ntoward advanced-economy central banks’ target (2.2 per cent by 2026), \nsupported by easing supply chain disruptions, lower energy prices, and labor \n \n5 \n \nmarket normalization. The IMF forecasts global inflation to decline from 5.7 \nper cent in 2024 to 4.3 per cent in 2025 and 3.6 per cent in 2026, though \nslightly higher than January 2025 projections due to persistent upside risks. In \nthe advanced economies, inflation is projected to ease from 2.6 per cent in \n2024 to 2.5 per cent in 2025 and 2.2 per cent in 2026. Given lingering \ninflationary concerns, the U.S. Federal Reserve has paused its easing cycle. \nMeanwhile, EMDE inflation is expected to decline from 7.7 per cent in 2024 to \n5.5 per cent in 2025 and 4.6 per cent in 2026, though risks remain elevated \ndue to exchange rate pressures, infrastructure gaps, energy shortages, \ngeopolitical tensions, and climate-related shocks, as previously noted in May \n2025. \nDOMESTIC DEVELOPMENTS \nAt the domestic level, the Nigerian economy grew by 3.84 per cent (year-on-\nyear) in Q4 2024, up from 3.46 per cent in the previous quarter. This expansion \nwas driven by robust performance in the services sector (particularly financial \n& insurance, transport & storage, and information and communication), \nalongside steady contributions from industry and agriculture. While growth \nremains positive, it continues to face fragility risks, including subdued \nconsumer demand and elevated interest rates, which could constrain \neconomic momentum. \nInflation (year-on-year) eased slightly to 22.22 per cent in June 2025, down \nfrom 22.97 per cent in May, primarily due to moderating prices of farm \nproduce and energy. However, core inflation, which excludes volatile food \nand energy prices, rose to 22.76 per cent (from 22.28 per cent in May), \nfuelled by increased costs in transport and ICT services. This divergence \nhighlights persistent underlying inflationary pressures, even as some \ncommodity prices show temporary relief. \nRationale for Vote \nGiven these dynamics, I vote to maintain the current interest rate while urging \nthe Bank to closely monitor the potential spillover effects of trade tensions on \nthe domestic economy, particularly, regarding trade costs and inflationary \npressures. The declining domestic inflation and stable exchange rate has \nafforded the Bank the rare privilege of effectively anchoring inflation \nexpectation and promoting price stability during this period of heightened \nglobal uncertainty. \n1. Policy Implications and Outlook \nDomestic inflation is expected to continue its downward trajectory, \nsupported by the extended 150-day tariff exemption for staple grain imports, \nimproved security conditions enabling better access to key farming \n \n6 \n \ncommunities, favorable economic conditions, exchange rate stability, and \nrelatively stable PMS prices. This positive trend offers a critical opportunity to \nreinforce and accelerate disinflationary momentum. However, significant \nupside risks persist, including potential geopolitical disruptions to crude oil \nmarkets, recent and prospective increases in diesel prices and electricity \ntariffs, the threat of renewed insecurity in agricultural communities, adverse \nweather events such as flooding, and inflationary spillovers from global trade \ntensions. \n2. Conclusion \nGiven this delicate balance between progress and vulnerability, enhanced \ncoordination between monetary and fiscal authorities remains imperative to \ndevelop sustained solutions for food price stability. The current environment \ndemands urgent, decisive policy action to stimulate domestic agricultural \nproduction - the most effective long-term measure for sustaining lower food \nprices. Proactive measures to address these risks now will be crucial for \nconsolidating recent gains and anchoring inflation expectations moving \nforward. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7 \n \n2. ALOYSIUS UCHE ORDU \nIntroduction \nI voted to maintain all the MPC parameters at their current levels: \n• Maintain Monetary Policy Rate (MPR) at 27.50 percent, \n• Maintain Asymmetric corridor around the MPR at +500/-100 basis \npoints, \n• Maintain Cash Reserve Ratio (CRR) for Deposit Money Banks at 50 \npercent and for Merchant Banks at 16 percent, and \n• Maintain the Liquidity Ratio unchanged at 30 percent. \n \nDevelopments in the global economy \nThe July 2025 MPC meeting took place at a time of increased challenge to \nthe status of the US as a “safe haven” resulting from the US trade war, the \nrising fiscal deficit and the attacks on the independence of the US Federal \nReserve. Consequently, there has been a simultaneous decline in the value \nof the dollar and US Treasury prices. Not since the early 1970s has the dollar \nhad such a worst start to the year: Its strength vis-à-vis major rival currencies \ndropped in the last six months. \nUsually, the dollar would appreciate during a crisis as funds from advanced \nand emerging market economies pour into the US on account of its safe-\nhaven status, and partly due to the depth of the US Treasury market. The \nrecent unusual depreciation of the dollar and rising US Treasury yields is \nprompting fresh scrutiny on whether the US might be losing its traditional safe-\nhaven status. \nAs investors seek safer havens, the euro rose by around 14 percent to USD1.18 \nearlier in July. This appreciation contrasts sharply with previous predictions of \neuro-dollar parity earlier this year. If the euro appreciation persists, the ECB \nmay likely cut interest rates further to dampen the effects on inflation and the \neuro area economy. Already, the ECB has lowered borrowing costs to 2 \npercent compared to the Fed’s 4.25 - 4.50 percent. Yet, the euro has \nstrengthened, signaling, perhaps, further erosion of trust in the dollar. \nThere are clearly reasons to be concerned about the US’s haven status. The \nlack of political will to rein in the US budget deficit is evident in the ‘One Big \nBeautiful Bill Act’ signed into law on July 4th. The Act will add over USD3 trillion \nto the deficit over ten years. (Currently, US debt amounts to around USD36 \ntrillion, about 120 percent of GDP.) And President Trump’s continuing attacks \non the Fed’s independence has not receded. \n \n8 \n \nThese concerns may be overstated. As indicated, US Treasuries have \nconsistently acted as a buffer during periods of uncertainty. Even with recent \nvolatility, they continue to provide protection, averaging positive returns \nduring equity market pullbacks. Similarly, despite a 9% year-to-date drop in \nthe dollar, its global dominance remains intact, with over 50% of SWIFT \npayments and nearly 60% of global reserves still denominated in dollars, an \n“exorbitant privilege” vis-à-vis the other 150 currencies used the world over. \nAt present, no other market rivals the size, liquidity, or influence of the US \nTreasury market, which is estimated at USD28.5 trillion and trades over $1 \ntrillion daily. Concerns about foreign selling are not substantiated by recent \ndata, and foreign holdings have continued to grow despite shifting shares. \nWhile Japan and China remain top holders, fears that Treasuries might be \n‘weaponized’ seem exaggerated. The sharp rise in US Treasury yields suggest \ntemporary, not structural, vulnerability. The dollar’s embedded role in global \nfinance thus suggests that an imminent reserve status loss – a wholesale shift \nto an alternative is highly unlikely for the time being. \nThus, while fiscal challenges and geopolitical shifts have created short-term \nuncertainty, the fundamentals underpinning US safe-haven status remain \nstrong. Treasuries and the dollar may wobble in moments such as the current \npolicy stress, but they remain unmatched globally. This outcome clearly has \nimplications for advanced and emerging market economies. The weaker \ndollar will likely mitigate the impact of tariffs, resulting in less damage to the \nglobal economy. For emerging market economies such as Nigeria with dollar-\ndenominated debt, the depreciation makes it cheaper to service \ninternational financial obligations. \nDevelopments in the domestic economy \nInflation: CBN staff presentations show that inflation has continued to trend \ndownwards since the last meeting in May. Headline inflation (year-on-year) \ndeclined to 22.22 percent in June 2025 from 22.9 percent in the preceding \nmonth. Farm produce and energy accounted significantly for the observed \ndecline. However, both core inflation and food inflation recorded increases \nto 22.76 percent and 21.97 percent, respectively. By States, Zamfara \naccounted for the lowest recorded headline inflation versus Borno where \nsecurity continued to keep prices elevated. \nAs regards inflation expectations, the May 2025 survey showed that \nbusinesses are more optimistic about the level of inflation in the next six \nmonths compared to households. Energy costs, exchange rate, interest rates, \ntransportation costs and insecurity were the key drivers of inflation \nexpectations. Overall, the outlook for July 2025 shows a further moderation to \n \n9 \n \n21.62 percent, due to the continued strengthening of the naira among other \nfactors. \nMoney supply: The monetary base continued to reflect CBN’s tightening \npolicy stance with a moderation of the currency in circulation. Also, capital \nmarket developments suggest improved transmission of monetary policy in \nthe system, and investors’ appetite for Nigerian Treasury bills was sustained. \nExternal sector: In the external sector, the naira appreciated and the gap \nbetween the official and BDC rates narrowed and remained stable on \naccount of improved foreign exchange liquidity. Remittances and foreign \nportfolio investments remained strong, and these helped to boost external \nreserves to USD 40.11 billion as of July 18th2025 - over 9 months of import \ncover. \nHowever, inflows of foreign direct investment (FDI) amounted to USD 1 billion \nin 2024 according to the United Nations Center on Trade and Development. \nThis amount is considerably lower than FDI flows to comparable countries -- \nIndonesia (USD24 billion), India (USD28 billion), Egypt (USD46 billion), and Brazil \n(USD59 billion) during the same year. \nClearly, the task of attracting inward investments into Nigeria must not rest on \nCBN alone. A whole-of-government approach is urgently needed, including \nthe Ministries of Trade and Industry, Solid Minerals, Digital Economy, Finance, \nPlanning, Agriculture, etc., and Security Agencies to attract long-lasting FDI to \nboost economic growth and create jobs for the country’s burgeoning \npopulation of unemployed youths. Such a coordinated effort to improve the \ninvestment climate will make it easier to raise Nigeria’s economic size to a \ntrillion-dollar economy in future. \nFiscal developments. The assumptions underpinning the 2025 FGN budget \ninclude crude oil production of 2.06 million barrels per day, crude oil price of \nUSD75 per barrel, exchange rate of naira 1,500 per USD, GDP growth of 4.6 \npercent, and inflation of 15 percent. These optimistic assumptions warrant \ncontinued close monitoring in the light of current developments in the global \nand domestic economy. Already, revenues and expenditures fell short of \ntargets for the period March 2024 to March 2025. \nThe IMF’s 2025 assessment of Nigeria’s fiscal forecasting highlighted persistent \ninaccuracies in the budget projections from 2011 to 2023. The report \nidentified a consistent optimism bias in revenue forecasts, especially for oil \nrevenues, driven by unrealistic assumptions about oil production rather than \nprice. Despite the use of conservative oil price benchmarks, actual \nproduction often fell short due to technical constraints, security issues, and \n \n10 \n \nunbudgeted fuel subsidies. Non-oil revenues were also overestimated, \nhampered by weak collection systems and administrative inefficiencies. \nOn the expenditure side, capital spending was systematically over-projected, \nwith frequent under-execution caused by capacity constraints within \nMinistries, Departments, and Agencies. Recurrent expenditures, while more \naccurately forecasted, were often compressed in response to revenue \nshortfalls, helping to keep fiscal deficit errors relatively contained. \nEfforts to minimize these fiscal forecast errors by strengthening the macro-\nfiscal \nforecasting \nunit, \nconducting \nand \npublishing \nregular \nforecast \nperformance reviews, and fostering political commitment to credible \nbudgeting will greatly improve the credibility of FGN’s budget. \nRationale for my Vote \nOverall, the period May to July 2025 recorded some noteworthy \naccomplishments. Headline inflation declined to 22.22 percent in June – the \nthird consecutive month of decline. The purchasing managers’ index rose to \n52.3 index points with the agriculture sector in pole position. Improvements in \nthe non-oil sector boosted government revenues. The exchange rate \nappreciated and the spread between the NFEM and the BDC remained \nstable. Improved investor sentiments continued to drive FPI inflows, and \npositive assessments by Moody’s rating agency and the IMF Article IV mission \nreflect improved external perceptions. \nAnd as indicated at the outset, the notable dent to the safe-haven status of \nthe US will benefit emerging markets, including Nigeria, in terms of increased \ncapital flows and servicing of dollar-denominated debt. But subdued global \ngrowth could depress the price of crude oil and other commodities. \nNigeria is thus not out of the woods yet. I continue to believe that our current \ntight monetary policy stance remains valid to rein in inflation. There is no such \nthing as double-digit and stable inflation. \nOur tightening stance is thus warranted for as long as it takes until inflation \nexpectation is well anchored. \nAttaining low inflation will help to restore trust in the Naira and deepen \nNigeria’s domestic capital market. It will broaden the market for government \ndebt, allowing the Federal Government to place public debt without having \nto tap dollar markets. Further, a deeper domestic capital market will make it \neasier for producers of non-traded goods, whose revenues are in Naira, to \nborrow in Naira instead of dollars, which will reduce Nigeria’s overall foreign \nexchange risk. \n \n \n11 \n \n3. BALA MOH’D BELLO MoN \nIntroduction \nAt the last two Monetary Policy Committee (MPC) meetings, I voted to retain \nthe stance of monetary policy by holding all parameters at existing levels. The \npositive output trajectory, stable exchange rate, decelerating inflation and \nthe need to allow previous policy measures to fully transmit through the \neconomy, are some of the compelling reasons to retain the same stance. I, \ntherefore, vote to retain all policy parameters at the July 2025 MPC meeting, \nas follows. \n1. Retain the Monetary Policy Rate (MPR) at 27.50 per cent. \n2. Retain the asymmetric corridor around the MPR at +500/-100 basis \npoints. \n3. Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per \ncent and Merchant Banks at 16 per cent. \n4. Retain the Liquidity Ratio at 30.00 per cent. \nRationale \nAs the second half of 2025 unfolds, it has become increasingly evident that \ndespite several global headwinds, including uncertain tariff regimes, \npersistent geopolitical tensions and rising debt levels, the likelihood of a \nglobal recession is diminishing, contrary to earlier projections by some \nanalysts. The International Monetary Fund (IMF) currently forecasts global \noutput growth of 2.8 per cent in 2025 and a moderate improvement to 3.0 \nper cent in 2026. This optimistic outlook though modest, underscores the \ncritical role of sustained and coordinated policy interventions by both \nmonetary and fiscal authorities. These interventions, whether orthodox or \nunconventional, often involve complex trade-offs but remain necessary to \nsupport global economic resilience. \nNonetheless, prevailing global policy uncertainties present the need for \nbalanced and consistent policies to ensure that the seeming economic \nresilience is sustained in view of country specific vulnerabilities. These global \ndynamics, in conjunction with domestic data and developments, informed \nmy policy decision at the July 2025 MPC meeting. \nDomestic Economic Developments \nReflecting on recent developments, I am encouraged by the impact of prior \nMPC decisions, some of which were difficult but essential, as well as \ncomplementary fiscal initiatives that have strengthened the Nigerian \n \n12 \n \neconomy. The positive outcomes of these actions are becoming increasingly \nevident. \nHeadline inflation (year-on-year) declined for the third consecutive month to \n22.22 per cent in June 2025 from 22.97 per cent in May, primarily driven by the \nmoderation in energy prices, especially cooking gas, wood charcoal and \ndiesel. Food inflation (year-on-year), however, rose to 21.97 per cent in June \n2025 from 21.14 per cent in May, attributed mainly to the increase in the cost \nof processed food. Core inflation, that is, all items less farm produce and \nenergy, also increased to 22.76 per cent in June 2025 from 22.28 per cent in \nMay, reflecting an uptick in the cost of Information & Communication, \nHousing & Utilities, and Personal Care & Social Services. On a month-on-\nmonth basis, headline inflation rose to 1.68 per cent from 1.53 per cent, \nlargely due to increases in the price of services and imported food. \nDespite these movements, underlying inflationary pressure continues to ease, \nsupported by monetary tightening, relative exchange rate stability and the \nFederal Government’s effort to improve the security situation and thereby \nboost food production. Forecasts, indicate that headline inflation is expected \nto remain dampened over the medium-term. \nThe improved security situation is also reflected in the overall economic \nperformance with the real GDP growing at 3.13 per cent in the first quarter of \n2025 compared with 2.27 and 3.38 per cent in the corresponding and \npreceding quarters of 2024, respectively. \nIn the external sector, the naira exchange rate has remained relatively \nstable, reflecting the benefits of tighter liquidity conditions, increased investor \nconfidence, and the effective implementation of recent adjustments to the \nforeign exchange (FX) management framework. Speculative activities in the \nFX market have declined significantly, fostering greater transparency and \npromoting market-based price discovery. This stability is expected to persist \nover the medium term, supported by rising external reserves which stood at \nUS$40.11 billion as of July 18, 2025, equivalent to approximately 9.5 months of \nimport cover. \nThe domestic financial system remains sound and resilient. Available data \nindicate that key prudential indicators remain largely within regulatory \nthresholds. Stress test results presented at the meeting also confirm the \nrobustness of the banking system, even amidst a contractionary stance of \nmonetary policy. The Central Bank remains vigilant and proactive, with \ninitiatives such as the ongoing recapitalization of commercial banks designed \nto \nreinforce \nfinancial \nsystem \nstability \nin \nan \nincreasingly \ndynamic \nmacroeconomic environment. \n \n13 \n \nConcluding Remarks \nOverall, the short-to-medium term outlook for the Nigerian economy remains \npositive with key macroeconomic indicators depicting stability. Nonetheless, \nsustained implementation of coordinated and well-balanced policy \nmeasures are imperative to further strengthen macroeconomic fundamentals \nin view of persistent global headwinds. Indeed, ongoing trade tensions, \npersistent conflicts in the Middle East and Ukraine, and climate related shocks \nhave implications for emerging markets. Nigeria is not immune to these risks. \nTherefore, preserving the gains of the previous months and strengthening \neconomic fundamentals remains a priority for monetary policy in my view. \n \n \n \n14 \n \n \n4. BANDELE A.G. AMOO \nIn view of the recent empirical developments in both the domestic and \nexternal economies, I hereby vote as follows: \n(a) \nRetain the Monetary Policy Rate (MPR) at 27.50 per cent. \n(b) \nRetain the asymmetric corridor around the MPR at +500/-\n100 basis points. \n(c) \nRetain the Cash Reserve Ratio (CRR) at 50.0 per cent for \nDeposit Money Banks (DMBs) and 16.0 per cent for Merchant \nBanks. \n(d) \nRetain the Liquidity Ratio (LR) at 30.00 per cent. \n My decision was influenced by the following considerations. \n1. \nGlobal Economic Developments \nThe global environment remains uncertain due to the tainted economic \noutlook in the United States arising from its trade and fiscal policies and their \neffects on the world economy generally. However, the resilience witnessed \nwithin the major economies in the recent past continued. \nConsequently, the behaviour and the volatility of different asset classes have \nbeen impacted, thereby altering global financial and economic conditions. \nTo address these scenarios, many emerging economies exercised lots of \ncaution amidst escalation of existing geopolitical tensions, high global interest \nrates, and trade frictions from the current tariff war. \n Despite the prevailing global uncertainty, however, policy response from \ncentral banks across the world has been mixed. While many opted for a \ncautious accommodative approach by loosening policy rates, others held \nonto their previous positions. For Nigeria, likely impact of the global economic \ndevelopment uncertainty may include decline in fiscal revenue and space; \ndecreased demand for Nigerian exports; rise in capital outflows; reduced \ncapital inflows and high debt overhang. \n2. \nDomestic Macroeconomic Developments and Outlook \nDomestically, economic growth continued to be moderate as expected. \nFollowing a rebasing of the Nigeria’s national accounts to 2019 prices, the \nNational Bureau of \nStatistics (NBS) reported a 3.13 percent year-on-year real GDP growth in Q1 \n2025, a notable increase from 2.27 percent in Q1 2024. The nominal GDP also \nrose to N94.05trillion. \n \n15 \n \nHeadline inflation has declined consecutively in the last three months by 2.84 \npercentage points to 22.22 percent in June 2025, reflecting a slight decrease \nfrom the preceding month - with food inflation at 21.97 percent and core \ninflation at 22.76 percent. However, month on month inflation showed an \nuptick in June 2025 (1.68%) when compared to its May 2025 level (1.53%) \nindicating persistence of some sectoral factors. A confluence of factors, \nincluding reduction in petroleum pump prices, tight monetary policy stance, \npoverty reduction measures implemented by the government, continued \nliquidity sterilization efforts, favourable harvest, minimal flood incidence have \nsupported the gradual deceleration in inflation. Other remote factors include \nimproved security around the farming communities, moderation in transport \ncost, as well as slowdown in processed food imports. \nThe banking sector performance is adjudged to be relatively stable, strong \nand resilient. The Central Bank of Nigeria continues to optimize its pro-market \nmonetary operations to support effective monetary policy transmission \nthrough adequate regulation. Total bank assets, deposits and credit \nrecorded amiable growth as at the end of June 2025 relative to June 2024. \nThe Capital Adequacy Ratio (CAR) and Liquidity Ratio decreased marginally \nto 13.43 and 52.69 percents in June 2025, respectively, compared to their \nlevels in 2024, due to their strong performance in earlier months. \nThe latest banking industry stability index trend indicates industry resilience \nagainst various risks, supported by efficient macro-prudential framework as \nthe CBN continue to strengthen synergy with other regulatory entities in the \nfinancial sector. Overall, the financial soundness indicators (FSI) trend for \nboth banks and other financial institutions showed strong safety levels in terms \nof asset growth, solvency, liquidity, profitability and service efficiency. \nThe improved sector performances in the Nigerian economy engendered \npositive investor sentiments. Naira continues to strengthen at the official \nwindow while holiday dollar demand weighs on the sentiment of the parallel \nmarket. As of June 2025, the Nigerian equities market remains bullish, with the \nNGX All-Share Index up 5.07 percent. This feat emphasized strong investor \nappetite for domestic equities especially in sound corporate stocks \nstimulated by impressive dividend pay-out by blue-chip companies. Also, \nthe Eurobond market may benefit from continued global demand for high \nyield emerging market debt. In the medium term, we expect the bearish \nprevailing trend to persist, as investors continue to realign their portfolios as \nsituation unfold in monetary, fiscal and macroeconomic developments – \nspecifically Nigeria’s new rebased GDP numbers. \nThe external sector performance continued to improve, driven mainly by \nstable crude oil prices and increased production volumes, as well as high \nremittance inflows, helping to build more reserves. Nigeria’s Balance of \n \n16 \n \nPayments (BOP) position remains stable to support our external sector \nstability. Portfolio inflows remain high, recording positive net inflows as at end-\nJune 2025. The exchange rate has remained broadly stable with some minor \nupside and downside movements. External reserves stood at US$40.11 billion \nat mid-July 2025, from US$39.01billion at mid-May 2025, mainly, due to \nimproved crude oil production and stability in the FX market arising from the \nBank’s on-going policy reforms. Other factors include reduction in import \ndemand pressures arising from the full deregulation of the downstream oil \nsector, reduced petroleum products importation regime, increased non-oil \nexport inflows and other subsisting measures deployed by the CBN. \nThe commitment of the government to improvements in basic infrastructure, \nmanaged fiscal balance, provision of energy and electricity stock, social \nsafety programme and poverty reduction, security upgrade, efficient \nmanagement of domestic and foreign debt levels will continue to moderate \ninflation trends. Special attention must be given to more renewable energy \nsources like solar, wind, and hydroelectric power sources to raise productivity \nin all sectors. Lower energy prices would help to fasten the disinflationary \nprocess and further facilitate monetary policy easing soon. \n3. \nMy Concern \nIt’s gladdening to note that the positive macro-economic developments \nwitnessed in the Nigerian economy in recent time across different sectors \ncontinued in July 2025. Some of them include: sector-wide drop in general \nprices, especially food; stability in the foreign exchange market resulting in \nreduced speculative activities; lower premium to the BDC rate; gradual \nmoderation in price of Premium Motor Spirit (PMS) and AGO; increased policy \nsupport by the state governments; planned recapitalisation of the Bank of \nAgriculture; increase in social safety programmes to further boost aggregate \ndemand to reduce the manufacturers’ outcry of unsold stock pile-up; growth \nin the capital market ASI and equity portfolios; improved payment system \ninfrastructure as well as improved coordination between the fiscal and \nmonetary policy authorities. Nevertheless, the economic stability engendered \nby the reforms implemented so far must be supported by reinstating Nigeria’s \nimport substitution strategies which will take the economy to higher growth \npath by boosting our industrial productivity across sectors. \nGiven the above-mentioned, it is my fervent believe that the MPC actions will \ncontinue to contain demand-side pressures and moderate the second-round \neffects coming from supply shocks. I still submit that the current policy rates \nremain appropriate to maintain a tight monetary stance until a significant \nand sustained decline in inflation is achieved. Working with the MPC team, \nthe duration and extent of monetary policy restrictiveness will be monitored, \nand it must be outcome-dependent, and data driven. As inflation becomes \n \n17 \n \nfirmly anchored, the MPC will reassess the possibility for a gradual easing of \nthe current policy stance. \n4. \nConclusion \nThe ongoing positive innovations and outcomes affirm that Nigeria is \ngradually regaining its economic footing. Sustenance of the ongoing \nstructural economic reforms are vital to unlocking fiscal space, promoting \nindustrial productivity, moderating debt vulnerabilities, and engendering \ninclusive growth. \n \n \n \n \n \n \n18 \n \n \n5. EMEM USORO \nAt the Monetary Policy Committee (MPC) held on July 21 – 22, 2025, I voted to: \ni. Retain the MPR at 27.50% \nii. Retain the Asymmetric Corridor at +500/-100 basis points around the MPR. \niii. Retain the CRR at 50% for commercial banks and 16% for merchant banks; \nand \niv. Retain the LR at 30.0%. \nThis decision reflects my conviction that the Nigerian economy is navigating a \ndelicate but promising transition from macroeconomic turbulence to relative \nstability. Thus, the gains made so far must be firmly consolidated prior to any \nconsideration of policy easing. \nRecent domestic indicators highlight a cautiously optimistic trajectory. For \ninstance, headline inflation continued its downward trend for the third \nconsecutive month. This development has been supported by a combination \nof factors: seasonal improvements in food supply, the easing of energy costs \nfollowing increased domestic refining capacity, and the relative appreciation \nof the naira in the official markets. \nExchange rate movements have been notably encouraging, underpinned by \nhigher FX turnover in the market, reforms aimed at enhancing price discovery \nand transparency, and growing investor confidence anchored by rising \nexternal reserves. \nThe interplay between exchange rate stability, broad money growth and \ndisinflation has been particularly important in reducing pass-through effects, \nand this in turn is reinforcing inflation expectations among households and \nfirms. Encouragingly, the deviation of broad money growth (4.98% as at end-\nMay 2025) from its provisional benchmark (15.60%) suggests that monetary \nexpansion is contained. This development is driven by a contraction in net \ndomestic credit, alongside tighter reserve money conditions, reflecting the \nenduring effects of the cash reserve requirements. \nNonetheless, beneath the headline figures, structural vulnerabilities remain as \nfood and core inflation continue to be elevated, largely due to longstanding \nchallenges such as insecurity, inadequate logistics infrastructure, and under-\ninvestment in food processing and distribution systems. Moreover, despite the \nheadline tightening, there have been signs of episodic excess liquidity in the \nbanking system, raising concerns about speculative tendencies in the FX \nmarket and the risk of undermining recent exchange rate gains if left \nunchecked. \n \n19 \n \nThese domestic developments are unfolding in an increasingly complex \nglobal environment. Inflationary pressures have resurfaced in major \neconomies such as the United States, the United Kingdom and China, driven \nby energy price volatility, strong service sector demand, and on-going \nsupply-side disruptions. Central Banks in these climes have embraced \ncautious policy stance by delaying rate cuts or tightening further to anchor \ninflation expectations. \nIn parallel, the modest but persistent strengthening of the U.S. dollar, coupled \nwith renewed uncertainty over trade policy, including the expected tariff \nactions by a potential Trump administration in August, warrants caution for \nemerging and frontier markets, particularly those like Nigeria with open \ncapital accounts and commodity-dependent earnings. \nIt is within this context that I view discussions around monetary easing as \npremature. While we must remain sensitive to growth concerns, especially \ngiven that real GDP growth remains below potential, the overriding priority \nmust be to secure stability and reinforce confidence in the policy framework \nand transmission. Positive real interest rates, which have now been restored, \nprovide us with a more credible anchor to attract capital inflows and support \nnaira-denominated assets. \nA forward-looking risk assessment reveals a broadly supportive domestic \noutlook. Improved oil production and price dynamics, along with reduced \nexternal debt service and resumption of naira-for-crude arrangements, \nshould bolster reserves and strengthen Nigeria’s external position. Fiscal \nreforms and ongoing infrastructure investments are also expected to support \ndomestic activity. However, inflation may remain sticky in the near term, \nowing to base effects, cost-push rigidities, and lingering structural deficiencies \nin the food and energy sectors. \nIn light of the fragile but sustained disinflation path, ongoing external \nuncertainties, and the need to preserve monetary credibility, maintaining the \ncurrent policy stance is prudent, strategic and optimal. A premature pivot to \neasing could jeopardise the hard-earned gains in price and exchange rate \nstability, while the sustenance of the current posture allows the transmission of \npast tightening to permeate fully through the economy. \nThe Committee remains proactive in re-calibrating the policy stance \naccordingly, should conditions evolve more favourably over the coming \nquarters, evidenced by a firmer decline in core inflation and evidence of a \ndurable convergence in the FX market. However, a \"higher-for-longer\" \nposture remains the most appropriate path to guide the economy through \nthis transition phase and ensure that stability is not only achieved but \nsustained. \n \n20 \n \n6. LYDIA SHEHU JAFIYA \nAt the 301st meeting of the Monetary Policy Committee (MPC), I voted to \nmaintain policy parameters at their extant levels, while monitoring the risks \nand uncertainties around domestic price and output developments. \nSpecifically, I voted to: \n1. Retain the MPR at 27.50 per cent. \n2. Retain the asymmetric corridor around the MPR at +500/-100 basis points. \n3. Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per cent \nand Merchant Banks at 16.00 per cent. \n4. Retain the Liquidity Ratio at 30.00 per cent. \nTHE GLOBAL ECONOMY \nGlobal growth has remained positive although April 2025 World Economic \nOutlook projects a deceleration from 3.3 per cent in 2024 to 2.8 per cent in \n2025, with a moderate recovery to 3.0 per cent in 2026. The potential \nslowdown is on account of rising trade barriers, geopolitical tensions and \nincreasing policy uncertainties. Growth in Advanced Economies is expected \nto moderate in 2025 reflecting increasing policy uncertainties and trade \ntensions. Meanwhile, output in Emerging Markets and Developing Economies \n(EMDEs) is projected to decelerate, reflecting persistent inflationary pressures, \nexchange rate pressures, infrastructural deficits, and other macroeconomic \nvulnerabilities. \nGlobal inflation has eased, but the pace of disinflation has slowed, reflecting \nprice stickiness across some categories of goods, as well as the impact of \nnew tariff regimes, alongside structural rigidities such as exchange rate \npressures and infrastructure deficits predominantly observed in EMDEs. \nNonetheless, central banks, especially in Advanced Economies, have \ncontinued with monetary easing, albeit cautiously, which is expected to \ngradually improve financial conditions. Consequently, global headline \ninflation is projected to moderate to 4.3 per cent and 3.6 per cent in 2025 \nand 2026, respectively, from 5.7 per cent in 2024 (April 2025 WEO). \nGlobal trade is projected to decline to 1.7 per cent in 2025, before \nrecovering to 2.5 per cent in 2026 compared to 3.8 per cent in 2024. The \ndowngrade, as reported in April 2025 WEO, reflects escalating trade tensions, \ngeopolitical crisis, weaker growth in major economies and climate related \nshocks. \n \n \n21 \n \nTHE DOMESTIC ECONOMY \nReal Gross Domestic Product (year-on-year) in Q1 2025 increased by 3.13 per \ncent from 2.27 per cent and 3.38 per cent in Q1 2024 and Q4 2024, \nrespectively. The growth performance in the reviewed period is reinforced by \nthe continued expansion, though moderately, in the Composite Purchasing \nManagers' Index (PMI) which rose to 52.3 index points in June 2025 from 52.1 \nindex points in the preceding month. \nHeadline inflation (year-on-year) decelerated to 22.22 per cent in June 2025 \nfrom 22.97 per cent in May, largely driven by the moderation in energy \ncommodities and farm produce. On a month-on-month basis, however, \nheadline inflation increased to 1.68 per cent in June 2025 from 1.53 per cent \nin May. Analysis of components of headline inflation shows that core inflation \nrose to 22.76 per cent in June 2025 from 22.28 percent in May, driven mainly \nby an increase in cost of transportation, while food inflation increased to \n21.97 per cent in June 2025 from 21.14 per cent in May, largely due to an \nincrease in the price of processed food. \nMonetary aggregates increased with Broad Money (M3) rising by 43.65 per \ncent (year-to-date) due to the increase in Net Foreign Assets (NFA). However, \nthis factor has negligible implications for inflationary pressure, compared with \na Net Domestic Assets (NDA) driven M3 growth. \nThe review period witnessed a resilient external sector, despite persisting \nglobal economic fragmentation and macroeconomic uncertainties. Total \nForeign Portfolio Inflows (FPI) increased largely on account of improved \ninvestor sentiment, and high FPI participation in fixed income instruments on \naccount of positive real interest rate. Similarly, the external reserves stood at \nUS$39.01 billion on May 14, 2025, up from the US$38.72 billion attained at end-\nApril 2025. The reserves position could support 7.91 months of import of goods \nand services and 11.64 months of import of goods only. \nFinancial Soundness Indicators (FSIs) of the banking system remained strong, \nfollowing the commitment of the Central Bank of Nigeria (CBN) to a risk-\nfocused supervisory strategy. \nCONSIDERATIONS FOR VOTING \nThe July 2025 MPC meeting held against the backdrop of improved \nmacroeconomic indicators. Headline inflation trended downwards, growth \nremained positive, trade surplus was attained, external reserves maintained a \ncomfortable position, and the foreign exchange market witnessed significant \nstability. \n \n22 \n \nAs economic fundamentals continue to strengthen, future monetary easing \nwill appear to be a prudent action to foster growth, leveraging the multiplier \neffect of increased investment and consumption, enabled by low borrowing \ncosts. Indeed, whilst growth has shown resilience despite the contractionary \nstance of monetary policy, there is need to strengthen its drivers, close output \ngaps and improve the momentum. \nIt is noteworthy that while headline inflation is moderating, the index remains \nelevated at the double-digit level, signifying the imperative to stay the course \nand avoid premature monetary easing. Also, there are indications of \nunderlying price pressures as evidenced by the increase in core and food \ninflation, coupled with indications of liquidity pressures which underscores the \nneed to sustain the current focus on disinflation. \nRelatedly, there is need to strengthen the positive real interest rate to align \nwith global financial conditions leading to improved capital flow and \ncompetitiveness. \nI reiterate my support for the MPCs decisions which have consistently been \nguided by data and aligned with the fiscal and monetary authorities’ \nobjectives. Indeed, the objectives of price stability and growth acceleration \nare mutually inclusive. In my opinion, and based on evidence, monetary and \nstructural factors are largely behind the current price developments. \nAddressing the current spectre of inflation, therefore, requires the sustenance \nof synergy between the fiscal and monetary authorities to address price \nstability and growth challenges and put the economy on an accelerated \nself-sustaining growth path. \nThe fiscal authority remains committed to fiscal sustainability, structural \nreforms, and private sector participation. The reforms have ushered in market \ntransparency, competitiveness, and an improved business environment. \nResources are being attracted in Foreign Direct Investment (FDI) inflows, \nsome targeting the oil and gas sector. \nWhile energy prices have been adduced as a major driver of inflation \nthrough increased transportation costs, Petroleum Motor Spirit (PMS) supply \nand prices have stabilized due to improved domestic production of refined \npetroleum products. The signing of the four (4) tax reform bills is expected to \nbroaden revenue sources of Government, enhance ease of doing business \nand make growth more inclusive. \nThe future path of food inflation will be contingent on the effectiveness of \nongoing Federal Government interventions in the agricultural sector, \nparticularly those aimed at improving access to farm inputs and improving \nsecurity \nconditions \nduring \nthe \ncurrent \nrain-fed \ncultivation \ncycle, \n \n23 \n \ncomplemented by irrigated dry season farming. For core inflation, the \nsustained strengthening of the exchange rate and stable energy prices are \nlikely to be important factors in moderating inflationary pressures. \nNoting the persisting risks to inflationary pressures, there is need to be cautious \nof upside risks to inflation and to continue to adjust monetary policy to \ndomestic conditions. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24 \n \n7. LAMIDO ABUBAKAR YUGUDA \nOn 22nd July 2025 at the 301st Monetary Policy Committee (MPC) meeting, I \nvoted to hold all the policy levers as follows: \n1. Retain the Monetary Policy Rate (MPR) at 27.50 percent; \n2. Retain the asymmetric corridor around the MPR at +500/-100 basis \npoints; \n3. Retain the Cash Reserve Ratio (CRR) at 50 percent for Deposit Money \nBanks and 16 percent for Merchant Banks; and \n4. Retain the Liquidity Ratio at 30 percent. \nThe meeting took place against a backdrop of continuing uncertainty \naround the global economic outlook, lower global growth prospects, and \nincreasingly cautious disinflation by central banks. On the domestic front, \nJune 2025 headline inflation has decreased – the third consecutive monthly \ndecline – but both core and food inflation trended up suggesting the \npersistence of inflationary pressures. \nIn my opinion, the MPC should sustain its focus on fighting inflation by \nmaintaining the current tight monetary policy stance until inflation declines to \na more reasonable level. \nGlobal Macroeconomic Developments \nGlobal inflation has continued to decelerate, with inflation in many \nAdvanced Economies now gradually approaching the long-run policy \ntargets of their respective central banks. However, in the US headline inflation \nhas increased slightly to 2.4 percent in May 2025 against 2.3 percent in April, \nreflecting continuing concerns over the final rollout and impact of tariffs vis-à-\nvis its major trading partners. \nGlobal output increased in the first quarter of 2025 on account of a robust \nexpansion in services and a sharp rise in exports to the US in anticipation of \nthe implementation of the new tariff regime. However, the outlook for the rest \nof the year and 2026 is rather subdued on account of the pervasive \nuncertainty over the evolving international trade environment. Unsurprisingly, \ncommodity prices including oil are expected to continue to soften. This \nunderscores the need for commodity exporters such as Nigeria to have \nadequate fiscal, external and other policy buffers to navigate the emerging \nchallenges and cushion the impact of any adverse external shocks. \nNegative US dollar sentiment continues to weigh on the financial markets, \naccentuated by concerns over the high US budget deficits recently \ncemented into legislation, an unsustainable public debt trajectory, and the \nfuture of the Fed’s independence. The US dollar, long considered a safe-\n \n25 \n \nhaven asset, has lost about 15 per cent of its value since its peak in \nSeptember 2022. The dollar index, which measures the currency’s strength \nagainst a basket of six other currencies, has equally declined by more than \n10 per cent in the first half of 2025. \nOn the other hand, gold, the ultimate safe-haven asset, has hit record levels – \nrising by 26 per cent in the first half of 2025 – as investors fly to quality. The \nBank should continue to monitor these market developments closely with a \nview to taking precautionary measures as may be necessary. \nDomestic Macroeconomic Developments \nDomestic inflation remains high but is coming down gradually. Headline \ninflation decreased to 22.22 percent in June from 22.97 percent in May 2025 \nreflecting easing energy prices and a more stable exchange rate. On the \nother hand, both core and food inflation increased, possibly owing to food \nprice seasonality and a lag in the transmission of exchange rate gains to \ncertain parts of the domestic supply chain. \nRelative to the level in December 2024, Broad Money (M3) grew moderately \nby 3.65 percent in June 2025 driven entirely by an increase in net foreign \nassets (NFA), while net domestic assets (NDA) declined over the same period. \nBoth net claims on Other Sectors and net claims on Government declined \nmarkedly. This growth in broad money driven largely by an increase in NFA – \nrather than NDA – has minimal implications for inflationary pressure. \nThe rebased GDP data from the National Bureau of Statistics (NBS) shows that \noutput grew at 3.38 percent in 2024. The composite Purchasing Managers \nIndex (PMI) rose to 52.3 in June 2025 compared to 52.1 in the preceding \nmonth with agriculture, industry and services all posting increased activity. \nThis is further evidence that despite the tight monetary conditions the Nigerian \neconomy is growing modestly, and domestic investment is responding \npositively to the increasing certainty engendered by a declining inflation rate \nand a more stable exchange rate. \nThe current account surplus moderated in the first quarter of 2025 to $3.73 \nbillion from $3.80 billion in the previous quarter. Gross external reserves rose to \n$40.11 billion on 18 July 2025, enough to cover 9.5 months of imports of \ngoods. The effort to attract more diaspora foreign exchange flows has been \nquite successful and should be strengthened. The progressive growth of both \ngross and net foreign exchange reserves provides the much-needed external \nbuffer to anchor exchange rate stability. \n \n \n26 \n \nThe Nigerian banking sector continues to demonstrate resilience in the face \nof a challenging macroeconomic environment. Capital adequacy in the \nbanking sector has improved as banks raise capital to meet the new \nrecapitalization requirements. The banking industry liquidity ratio and most of \nthe financial soundness indicators remained within regulatory limits during \nJune 2025. A strong, sound and safe banking system is a sine qua non for \nfinancial system stability and the efficient transmission of monetary policy. \nThe Bank should therefore continue to be proactive in its oversight and \nsurveillance of the banking sector. \nFederal Government revenue has recorded a significant increase during the \nfirst quarter of 2025, rising by 28.95 percent over the corresponding period in \n2024, owing to higher oil receipts. Both capital and recurrent expenditure rose \nby 58.89 percent and 93.31 percent respectively over the same period. The \ncorresponding fiscal deficit increased by 78.23 percent. The increasing crude \noil production and associated receipts present an opportunity for the Federal \nGovernment to begin to reduce the fiscal deficit and move the public debt \nand debt service burden onto a more sustainable path. \nConclusion \nThe available data confirms that the current tight monetary policy stance is \nhaving the desired effect on stabilizing prices. This policy stance needs to be \nsustained for a longer period and complemented with adequate supervisory \noversight of the foreign exchange market in order to achieve lower inflation \nand sustain exchange rate stability. \nI remain fully committed to the achievement of the objectives of the \nMonetary Policy Committee and the mandate of the Central Bank of Nigeria. \n \n \n \n \n \n \n \n \n \n \n \n27 \n \n8. MUHAMMAD SANI ABDULLAHI \nMy Vote \nThis July meeting of the Monetary Policy Committee (MPC) provides an \nopportunity and critical platform for in-depth reflection on both historical and \nemerging challenges, as well as an evaluation of the progress made in the \nimplementation of our monetary policy. \nBalancing the Bank’s monetary and price stability mandate, financial system \nstability and economic growth have remained key areas of focus. At the \nsame time, developments in the global and domestic macro environments \nhave remained key drivers of the Committees consideration and decisions. \nThis meeting is unique in several ways. Firstly, the hold stance since the past \ntwo MPCs continues to permeate through the system with significant \noutcomes. Stability has been sustained in the FX market, and the rebased Q1 \n2025 GDP numbers showed a positive 3.11 per cent. Secondly, the myriad \nchallenges that clutter efficient policy transmission have been substantially \naddressed. \nData released by the National Bureau of Statistics (NBS) showed the notable \nprogress around inflation dynamics with the third consecutive month of \nobserved decline in headline inflation. The moderation in headline Inflation \ncontinued in June 2025 but with a mixed outcome. Whilst the headline \ninflation declined to 22.22% in June 2025 from 22.97% in May 2025, both core \nand food inflation increased to 22.76% and 21.97% from 22.28 and 21.14%, \nrespectively. The observed decline in headline inflation, despite the rise in \nboth food and core inflation is primarily attributable to significant a decrease \nin energy prices, underscoring the complex interdependencies between the \nvarious components of the inflation basket. \nIn terms of composition, Core inflation (22.76%) being close to headline \n(22.22%) indicates broad-based inflation, not just food or energy-related (i.e., \nnot purely supply-driven). Food inflation at 21.97% is a slight moderation but \nstill high, showing some cost-push pressures likely from agricultural or supply \nchain issues. This suggest that the persistent core inflation remains a risk to \nwatch, or inflation expectations are de-anchoring. Going forward, the \ntrajectory of core inflation should be a cause for concern. Interbank rates \nremain high in response to our previous tightening actions while market \nsentiments remain positive, and naira assets are gaining traction. \n \nIn my submission at the 300th meeting in May, I noted that the overarching \nobjective of safeguarding long-term macroeconomic stability remains \nparamount. In the current context, my assessment is that additional monetary \ntightening at this stage could generate diminishing returns and potentially \n \n28 \n \nintroduce \nadverse \nsecond-round \neffects, \nthereby \nrendering \nit \ncounterproductive. \n \nWith the transmission lag of previous policy actions still in place, the decision \nat this meeting is to retain existing parameters, thereby providing headroom \nfor a more comprehensive assessment of outcomes over the medium to long \nterm. Thus, again, I voted to hold all parameters constant. This decision is \nsupported by current outlook for the economy, performance of the \nmacroeconomic indicators as well as the inflation forecast, and consumer \nand business expectations. This vote is consistent with my prior position \nadvocating for a policy pause until preliminary signals of macroeconomic \nstabilization become evident. \nSpecifically, I voted to: \n1. Retain the MPR at 27.50 per cent. \n2. Retain the asymmetric corridor around the MPR at +500/-100 basis \npoints. \n3. Retain the Cash Reserve Ratio of Deposit Money Banks at 50.00 per \ncent and Merchant Banks at 16 per cent. \n4. Retain the Liquidity Ratio at 30.00 per cent. \nMy Considerations \nInflation Trends and Dynamics \nThe June 2025, inflation data from the National Bureau of Statistics, using the \n2024 base year, showed a decline in headline inflation (year-on-year) to \n22.22% from 22.97% in May 2025, core and food components rose to 22.76 \nand 21.97 per cent from 22.28 and 21.14 per cent, respectively. This \nenhanced decomposition of the inflation components provides an avenue \nfor a deep dive into the major drivers and for proffering targeted policies to \nanchor inflation expectations effectively. Energy costs are included in the \nheadline measure but excluded from the core measure. Accordingly, \nsustaining the current policy tightening stance will provide the right response \nto rein in aggregate demand and address rising core inflation. On food, \ntargeted and intensified efforts by the fiscal authorities will be required to \naddress supply-side rigidities. In my view, the key risk for monetary policy is \npersistent core inflation which warrants careful monitoring and continued use \nof available policy tools. \nMonth-on-month showed an increase in all measures of inflation. Headline \nincreased to 1.68% in June from 1.53% in May 2025, core to 1.17% in June 2025 \nfrom 0.95% and food to 3.25% in June from 2.19% in May 2025. Nigeria’s \nimported food inflation however, moderated for the sixth consecutive month \n \n29 \n \nto 15.74% in June 2025, down from 16.04% in May, largely reflecting the \ngreater efficiency and relative stability in the foreign exchange (FX) market \nover the past year. In addition, improved domestic productive capacity has \nsupported local demand. \nDespite the moderation in headline inflation recorded in June 2025, findings \nfrom the Staff Household Expectation Survey (HES) indicate an improvement \nin consumer price expectations, with households anticipating a continued \ndeceleration in inflation over the next three to six months. In tandem with the \nHES, results from the June 2025 Business Expectations Survey (BES) reflect \nstrengthening business sentiment across key sectors, reinforced by improving \nconfidence in the macroeconomic outlook. In my view, these forward-\nlooking indicators suggest a gradual consolidation of disinflation expectations \nand sustained optimism regarding macroeconomic conditions over the near \nterm, which could enhance the credibility and effectiveness of the \nCommittee’s policy actions. \nCurrent inflationary pressures are acknowledged to be significantly driven by \nstructural and supply-side constraints, over which conventional monetary \npolicy tools exert limited direct influence. The concerted efforts by fiscal \nauthorities to reduce structural rigidities and address prevailing supply-side \nconstraints is expected to enhance the efficacy of monetary policy \ntransmission, improve aggregate supply responsiveness and reinforce \ndisinflation drive. Accordingly, the monetary policy stance will remain \nanchored on curbing inflation, maintaining exchange rate stability, guiding \ncredit conditions, and managing short-term macroeconomic fluctuations \nprimarily through demand-side channels in the short to medium term. \nNotably, the June Purchasing Managers’ Index (PMI) signals a potential \nrecovery in productive capacity, suggesting incremental improvements in \nsupply side capacity, which if sustained, could support disinflation efforts over \nthe medium term. \nContinued improvements in the domestic supply of food and energy \ncommodities are expected to ease cost-push inflationary pressures, thereby \nreinforcing the Committee’s disinflation strategy. Simultaneously, scaling up \nexport-oriented trade facilitation measures and upstream petroleum sector \ninvestment incentives is projected to augment both oil and non-oil foreign \nexchange inflows. Ultimately, these dynamics are anticipated to support \nexchange rate stability, improve FX market liquidity, and contribute to \nanchoring inflation expectations through enhanced external sector resilience \nand a more credible nominal anchor. \nIt is expected that disinflation drive will continue to remain the key priority \nfocus of the MPC for the remaining part of 2025 and beyond. \n \n30 \n \nGlobal Developments \nThe International Monetary Fund (IMF) has reviewed global growth \nprojections downwards to 2.8% in 2025 and 3% in 2026, from an earlier \nestimate of 3.3% in both 2025 and 2026, compared with 3.2% in 2024, \nreflecting increasing policy uncertainties and trade tensions. Output growth is \nforecast to also moderate in both AEs and EMDEs. Global headline inflation is \nprojected to moderate to 4.3 and 3.6 per cent in 2025 and 2026, respectively, \nfrom 5.7 in 2024. Oil prices have continued to moderate because of U.S. \ntrade policies. A major risk to oil price development is the likely increase in \nsupply by the US. For non-oil commodities, the increased attraction to gold \nunderscores its importance considering heightening global uncertainty and \nthe risk of a rebound of global prices. \nDomestic Economic Developments \nExternal Sector \nThe balance of payments (BOP) recorded a deficit of US$2.77 billion in \nQ12025, against a surplus of US$1.10 billion in Q42024, on account of a \ndepletion in external reserves. Notwithstanding, gross external reserves \nincreased by 2.85 per cent to US$40.11 billion on July 18, 2025, representing \nabout 9.5 months of import cover for goods. Although global economic \nfragmentation presents downside risks to critical foreign exchange inflow \nchannels, the outlook for the naira remains stable notwithstanding swings in \ninternational crude oil prices. \nOther Developments in the Economy \nIn the first quarter of 2025, Nigeria's rebased real GDP expanded by 3.13% \nyear-on-year, down from 3.84% in Q4 2024, primarily driven by the services \nand industry sectors. The services sector grew by 4.33%, contributing 57.5% to \nthe aggregate GDP, while the industry sector experienced a 3.42% growth. \nThe composite Purchasing Managers' Index (PMI) indicated that business \nactivities expanded by 52.30 in June 2025 from 52.10 in May 2025 with respect \nto the benchmark index, indicating six consecutive months of sustained \nexpansion in economic activities and a positive outlook for GDP growth for \nthe rest of 2025. This is attributed majorly to growth in agriculture sectors (55.2) \nindustry (51.4) and services (51.3). Increased activity and liquidity have \nenhanced traction in the foreign exchange market. This is expected to \nsupport business competitiveness and contribute positively to key PMI \nindicators. \n \n31 \n \nMonetary base and Broad Money liabilities rose by 3.65% to ₦17.50 trillion at \nend-June 2025, relative to the level at end-December 2024. The month-on-\nmonth figures showed a general decline in all the measures of the monetary \naggregates. Narrow money M1 showed the most contraction (1.49%) \nindicating the impact of the Bank’s tightening policy. \nThe banking sector remains robust, fostering a more friendly business \nenvironment and supporting economic activities as the data shows that most \nof the indicators are within acceptable thresholds. The Bank will continue to \nremain vigilant in ensuring the banking system’s stability and soundness. \nThe fiscal outlook remains stable, supported by a 3.66% month-on-month \nincrease in gross Federation Account receipts in June 2025 relative to May \n2025. The uptick in revenue reinforces fiscal sustainability and reflects \nimproved government earnings performance. The observed improvement in \noil production would further support efforts to build fiscal buffers and a more \nresilient fiscal framework in 2025 and beyond. \nOn the overall outlook, the uncertainty around the global economic \nlandscape remains elevated, the recent moderation in inflationary pressures \nnotwithstanding. Nonetheless, prevailing uncertainties may continue to exert \nadverse effects on capital flow dynamics, import cost structures, and, by \nextension, key assumptions underlying the domestic inflation outlook. Staff \nmodel simulations incorporated a range of scenarios accounting for both \nupward and downward shocks to international oil prices. Additionally, the \nonset of the harvest season is expected to boost agricultural supply, with \npotential disinflationary effects on food prices. Against this backdrop, the \ndecision to maintain all policy parameters unchanged reflects a data-driven \napproach anchored in the imperative of preserving price stability. \nDomestically, recent inflationary trends reflect a moderation in headline \ninflation, indicative of a potential modulation point. This disinflationary \nmomentum is projected to continue over the short to medium term, \ncontingent upon maintaining extant tightening measures and sustained \nimprovements in supply-side conditions. Consequently, the decision to \nmaintain current policy parameters affords the Monetary Policy Committee \n(MPC) sufficient latitude to evaluate the cumulative effects of previous rate \nhikes and the associated tightening measures on the transmission \nmechanism. Moreover, this hold-phase would enable economic agents to \ninternalize prevailing policy signals and align their spending and investment \ndecisions with the evolving macroeconomic environment. \n \n \n \n32 \n \n9. MURTALA SABO SAGAGI \nContext \nPrevious structural reforms implemented over the last three decades have \nrecorded limited successes in overcoming structural rigidities in Nigeria. \nLimited economic diversification and overreliance on debt by the \ngovernment have worsened the vulnerability of the economy to shocks and \nfluctuations in global commodity prices. Since mid-2023, unlocking \nopportunities \nfor \neconomic \ndiversification \nand \nassociated \nwelfare \nimprovement has remained the ultimate goal of the current structural \nreforms. However, even with the removal of fuel subsidy and liberalization of \nthe exchange rates, the appetite for unfettered spending by the government \nhas grown even stronger. In the first quarter of 2025, the country has \nwitnessed an increase in total public debt from N144.67 trillion as of \nDecember 31, 2024, to N149.39 trillion as of March 31, 2025. The country’s \ndebt profile is deteriorating and thus shrinking the fiscal space due to huge \ndebt service cost. \nWith the recent increase in daily crude oil production, new inflows of capital \nand improved balance of payment, the naira is likely to keep appreciating to \nreach the projected N1400/US$1 before the end of the year. The inflation \nmoderation attained and the doggedness of the Central Bank of Nigeria \n(CBN) to ensuring foreign exchange unification and disciplined liquidity \nmanagement should be further harnessed to speed up growth and improve \nwelfare. To avoid reversal of the gains so far achieved, fiscal discipline and \ndeliberate effort to stimulate local productivity and employment are non-\nnegotiable. \n Global and Domestic Environments \nOpportunity for Nigeria’s economic rejuvenation is feasible considering that \nglobal and local dynamics are gradually becoming increasingly promising. \nThe Israel-Iran conflict is deescalating and thus providing a glimpse of \nregional stability in the Middle East. Even with the ongoing Israeli offensive on \nPalestinians, the likelihood of widespread conflict is minimal because of the \ngrowing international scrutiny. Also, the renewed involvement of the US in the \nRussia-Ukraine conflict provides a glimpse of regional stability in Europe. All \nthese are indications that, even though global tensions persist, the likelihood \nof supply chain disruption is minimal. This coupled with lower average \neffective US tariff, higher than expected Front-loading, and developments in \nother regions informed the revised IMF Global growth projection at 3.0 \npercent for 2025 a better outlook than the 2.8 per cent projected in April \n2025. Also, a lower Global headline inflation is expected at 4.2 percent in \n2025. Global growth prospects and moderation in inflation, including the \n \n33 \n \nneed to stimulate domestic growth informed the further rate cuts by many \nglobal central banks in the Q2 2025. \nThe growing cordial relationship between Nigeria and its neighbours is \naccelerating the implementation of the African Continental Free Trade \nAgreement (ACFTA). Also, the recent relative macroeconomic stability has \nboosted investor confidence and enabling businesses to project and plan. \nThe year-on-year headline inflation has moderated for three consecutive \nmonths, to 23.71, 22.97 and 22.22 per cent in April, May, and June, \nrespectively. Growth in Nigeria is expected to reach 3.2 per cent in 2025 \nmaking it one of the highest in the region. To fast-track inclusive growth, a \npolicy shift is required to restore fiscal space, exercise more discipline, \npromote domestic oil refining, and stimulate non-oil production and exports. \nThis is particularly instructive with the new Finance Act and improved oil and \nnon-oil revenues. \nMajor Considerations \ni. \nCapital importation increased from US$5,089.16 million in Q4 2024 to \nUS$5,642.07 million in Q1 2025 suggesting increased appetite for \nNigerian stocks, bonds and money market instruments. However, \ninsignificant investment went to agriculture and manufacturing. For \nexample, only US$0.85 billion was attracted by the manufacturing \nsector in over 27 months. \nii. \nNon-oil exports, despite limited investments in the first half of 2025, \nreached $3.225 billion, a 19.59% increase from the previous year. \niii. \nOil production has reached an average of 1.78 million bpd suggesting \nmore foreign exchange inflows. \niv. \nThe gross foreign reserve rose above US$40 billion at end-May 2025 \nwhich can effectively cover up to 8 months of imports for goods and \nservices. The reserves will hopefully hit or exceed US$45 billion by the \nfourth quarter. \nv. \nNigeria’s total public debt rose to N149.39 trillion as of March 31, 2025. \nvi. \nInflation has been moderating for most of the year and is likely to \nreduce further in anticipation of good harvest season, declining energy \nprices and exchange rate stability. \nvii. \nThe exchange rate premium between the official and the parallel \nmarket narrows significantly to just about 1 naira suggesting a near end \nto the decades of uncertainty and arbitrage. \n \nConclusions \nSustainable macroeconomic stability and inclusive growth are attainable \nwith renewed fiscal discipline and growth enhancing policies. However, the \npathway and the policy coordination required are blurred. I voted to: \n \n34 \n \n• Retain the Monetary Policy Rate (MPR) at 27.50 per cent \n• Retain Asymmetric Corridor around the MPR to +500-100 basis points. \n• Retain the Cash Reserve Ratio of Deposit Money Banks at 50 per cent. \n• Retain the Cash Reserve Ratio of Merchant Banks at 16.0 per cent. \n• Retain the Liquidity Ratio at 30.0 per cent. \nRecommendations \n1. Renewed growth enhancing adjustments are needed using fiscal-\nmonetary tools to stimulate local productivity, reduce debt and \ncrowding out in private sector investment. \n2. Growth agenda that is focused on promoting high potential and job \ncreating value chains, with strong involvement of states, should be \ndeveloped, legislated and implemented. \n3. Deliberate efforts to attract Greenfield investments from Asia and the \nMiddle-East should be aligned with the growth agenda. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n35 \n \n10. MUSTAPHA AKINKUNMI \nIntroduction \nI hereby reaffirm my firm commitment to maintaining the current monetary \npolicy parameters, specifically, the Monetary Policy Rate (MPR), Cash \nReserve Ratio (CRR), and Liquidity Ratio at their existing levels. This position is \nbased on a thorough evaluation of key macroeconomic indicators, including \neconomic growth trends, inflationary pressures, exchange rate movements, \nand overall financial system stability. \nOver the past year, the sustained implementation of monetary tightening \nmeasures has begun to produce measurable outcomes. While the delayed \neffects of these policy actions have begun to crystalise, it is both prudent and \nnecessary to allow sufficient time for their full transmission throughout the \neconomy. \nPreserving the current policy stance will, therefore, provide a clearer view of \nits impact on moderating inflation, stabilizing the exchange rate, and \nstrengthening the resilience of the financial system. We remain committed to \nclosely monitoring macroeconomic conditions and aligning our actions with \nthe core mandates of the Central Bank of Nigeria. \nGlobal and Domestic Economic Developments \nGlobal GDP growth in Q1 2025 was divergent across major economies. The \nEuro Area (1.2%), the United Kingdom (1.3%), and Japan (1.7%) recorded \nmodest momentum. In contrast, the United States experienced a slight \ndeceleration, with GDP growth easing to 2.0%. Among Emerging Markets and \nDeveloping Economies (EMDEs), India maintained its robust trajectory with a \nstrong 7.4% expansion, while China remained stable, posting 5.4% growth. In \nSub-Saharan Africa, Ghana led with 5.3% growth rate, followed by Kenya at \n4.9%, and Nigeria at 3.13%. Although Nigeria's growth rate is moderate by \ncomparison, the economy has, nevertheless, sustained an upward trajectory \nsince Q1 2024, reflecting a continued expansion. \nGlobally, inflation is trending downward across both advanced and \nemerging economies. Nigeria’s inflation rate fell to 22.22% in June 2025, \ndriven by persistent disinflationary pressures. Egypt and Ghana also recorded \nsignificant declines, with inflation dropping to 14.9% and 13.7%, respectively. \nIn Asia, both China and India experienced continued disinflation, reinforcing \nthe broader global trend of easing price pressures. \nIn Nigeria, sustained monetary tightening throughout 2024 has yielded \ntangible results. Inflation volatility measured by the standard deviation \ndeclined significantly, from 5.24% in 2024 to 0.84% in H1 2025, signalling the \neffectiveness of the monetary transmission mechanism. Monthly data \n \n36 \n \nindicates a consistent disinflationary trend since March 2025, with inflation \nreaching 22.22% by June. \nThis decline was largely attributed to the moderation of energy prices, \nparticularly for cooking gas, charcoal, and diesel. This is consistent with \ncommodity price theory. Additionally, improved exchange rate stability \nplayed a supportive role. However, rising food processing costs continued to \nexert upward pressure on food inflation, which rose slightly to 21.97% in June \nfrom 21.14% in May. This pressure is expected to ease in the coming months \nas the harvest season increases domestic food supply and reduces reliance \non imports, thereby moderating month-on-month headline inflation, which \nrose to 1.68% in June from 1.53% in May. \nDespite global uncertainties such as trade tensions and geopolitical risks, the \nNigerian Naira has demonstrated notable resilience. Exchange rate volatility, \nas measured by standard deviation, dropped significantly from N203/US$ in \n2024 to just N5.34/US$ in H1 2025. Concurrently, Nigeria’s gross external \nreserves grew by 9% year-on-year, reaching US$37.81 billion in June 2025 (up \nfrom US$34.76 billion in June 2024), and further increased to US$40.11 billion by \nJuly 18, 2025. This provides sufficient buffer to cover approximately 9.5 months \nof goods imports, enhancing external sector stability. \nThese positive developments across key macroeconomic indicators suggest \nstrong potential for reversion to long-term equilibrium trends. Moreover, the \neffects of monetary tightening have reinforced stability in the banking sector. \nImprovements in financial soundness indicators point to enhanced resilience, \nsafety, and systemic soundness. \nRational for the Vote \nKey macroeconomic variables, namely, inflation, the exchange rate, and \nexternal reserves demonstrate a strong tendency to revert to their long-term \nequilibrium levels following both internal and external shocks. This mean-\nreverting behaviour supports the case for maintaining current monetary \npolicy measures, as it reflects underlying stability within the existing policy \nframework. \nFurthermore, there is a strong and statistically significant relationship between \nthe Monetary Policy Rate (MPR) and critical macroeconomic indicators such \nas inflation, exchange rate movements, and credit to the private sector. This \nrobust correlation highlights the effectiveness of timely and well-calibrated \npolicy interventions in steering these variables toward their desired outcomes. \nImportantly, the MPR continues to serve as the primary tool for responding to \ninflationary pressures, reinforcing the need to treat inflation dynamics as a \nkey input in shaping future monetary policy actions. \n \n37 \n \nTaken together, these insights are consistent with the positive results observed \nunder the current policy stance. They reaffirm the effectiveness of ongoing \nmonetary policy in fulfilling the Central Bank of Nigeria’s core mandates, \nnamely, maintaining price stability, fostering sustainable economic growth, \nand ensuring the stability of the financial system. Accordingly, the evidence \nsupports a cautious, data-driven, and consistent approach to monetary \npolicy in the current macroeconomic environment. \nPolicy Implications and Outlook \nThe current monetary policy stance has played a pivotal role in significantly \nreducing inflationary and exchange rate pressures, thereby enhancing \nmacroeconomic stability and bolstering investor confidence in the Nigerian \neconomy. Reflecting this improved outlook, the International Monetary Fund \n(IMF), in its July 2025 forecast, revised Nigeria’s economic growth projections \nupward by 0.4 and 0.5 percentage points for 2025 and 2026, respectively. The \neconomy is now expected to grow by 3.4 percent by the end of 2025. \nLooking ahead, further disinflation is anticipated over the coming months, \ndriven by the continued effects of tight monetary policy, sustained exchange \nrate stability, declining petrol (PMS) prices, and a seasonal reduction in food \nprices due to the harvest period. These developments collectively reinforce \nthe effectiveness of the current policy stance and support continued \nprogress toward macroeconomic stability and inclusive growth despite \nprevailing global trade disruptions and geopolitical uncertainties. \nConclusion \nIn light of the evidence-based improvements in reducing volatility across both \ninflation and exchange rates alongside clear signs of strengthened financial \nsystem stability, I advocate for a continued data-driven, forward-looking \npolicy approach. Central to this strategy is a continued emphasis on inflation \nresponsiveness, which remains critical to achieving our primary mandate of \nprice stability. \nAccordingly, I vote to: \n• \nMaintain the Monetary Policy Rate (MPR) at 27.50 percent \n• \nRetain the asymmetric corridor at +500 / –100 basis points around the \nMPR \n• \nMaintain the Cash Reserve Ratio (CRR) at 50.00 percent for Deposit \nMoney Banks and 16.00 percent for Merchant Banks \n• \nRetain the Liquidity Ratio at 30.00 percent. \n \n \n38 \n \n11. PHILIP IKEAZOR \n \nThere has been a gradual deceleration in inflation and stability in the foreign \nexchange market over the past three months in response to the restrictive \nstance of monetary policy. However, food and core inflation are still rising, \nand the global socioeconomic uncertainties are yet to recede. To curb both \nthe direct and the second-round effects of the global uncertainties and \nstabilise longer-term inflation expectations, in my view, it is necessary to \ncontinue with moderation in monetary policy restraint to squeeze out \npersistent inflationary pressures without constraining growth. \nI therefore voted to: \n(1) Retain the MPR at 27.50 per cent. \n(2) Retain the Asymmetric corridor around the MPR at +500/-100 basis \npoints. \n(3) Retain the Cash Reserve Ratio (CRR) of DMBs at 50.00 per cent. \n(4) Retain the Cash Reserve Ratio of Merchant Banks to 16.00 per cent. \n(5) Retain the Liquidity Ratio at 30.00 per cent. \n \nDevelopments in the Global and Domestic Economy \nThe revised outlook for global growth shows prospects for decelerated \ngrowth, even as trade-related distortions wane due to the expected front-\nloading effects of the USA effective tariffs and the extension of pause on \ncountry-specific reciprocal tariffs. \nAccording to the International Monetary Fund (IMF), global growth is \nprojected at 3.0 percent for 2025 and 3.1 percent in 2026, which is 0.2 \npercentage point higher than the forecast for April 2025. Inflation is expected \nto continue to decline, but still out of the tolerable range, with headline \ninflation falling to 4.2 per cent in 2025 and 3.6 percent in 2026, despite the \nexpected rise in US inflation above its target. This is driven by risk of potentially \nhigher tariffs, elevated uncertainty, and the persistence of geopolitical \ntensions. \nAs major central banks (except for the ECB that has recently cut rate), \ncontinued to adopt a wait-and-see policy, to grapple with elevated growth \n \n39 \n \nand inflation uncertainty, the domestic economy remains robust with \nnegative spillover effects of international commodity prices, and exchange \nrate inflationary pressures reaching their turning points. Nonetheless, the \nglobal economic uncertainty continued to pose a threat to Nigeria’s exports \nas disruptions in the global supply chain heightened with attendant effects \non imported inflation and shrinking fiscal space. \nMy Considerations \nIn the last two quarters, the Nigerian economy has undergone a statistical \nrecalibration with the published rebased CPI and domestic output showing \nthat economic growth is improving, while foreign exchange and inflationary \npressures are gradually dissipating. The real gross domestic product grew by \n3.13 per cent (year-on-year) in the first quarter of 2025, representing 0.86 \npercentage point, higher than the 2.27 per cent recorded in the first quarter \nof 2024 but less than the 3.76 per cent recorded in the preceding quarter in \n2024. \nWe have also witnessed a positive macroeconomic development – declining \ninflation and stable foreign exchange rate - reflecting effective stance of our \nmonetary policy which have successfully anchored inflation expectations \nand reduced the volatility in the foreign exchange market. As such, one can \nsay with significant degree of certainty that the economy is on a sustainable \npath. This is also reflected in the moderation in interest spread to 21.99 at \nend-June 2025, down from 22.20 per cent at end-December 2024, increase in \nexternal reserves and capital inflow. \nDespite these positive developments, the dynamics of real growth remained \nstagnated from 1.22 between Q2 and Q1 2024 to -0.63 percentage points \nbetween Q4-2024 and Q1-2025. In terms of inflation, there seems to be an \nimbalanced pattern in inflation rate where major components like food and \ncore inflation rose by 0.83 and 0.48 percentage points, respectively, even \nthough headline inflation declined by -0.75 percentage point from 22.97 in \nMay to 22.22 per cent in June 2025. Similar trend was observed in January \n2005 when inflation declined from 10.6 in December 2004 to 9.8 in January, \nbut food prices increased from 12.1 per cent to 15.1 per cent and core \ninflation increased from -1.78 to 1.28. While these trends seem normal, they \npoint to the effects of structural factors, which also makes it difficult for \nmonetary policy to effectively track inflation trajectory. \nTherefore, to sustain the momentum of the tight stance of monetary policy, \nwhile accommodating the growth path of the economy and managing the \ncomplexities associated with the imbalanced inflation path, I supported \nmonetary moderation, by holding all the monetary policy parameters \n \n40 \n \nunchanged. Moreover, the direction of the fundamentals that will help us to \nproperly align the monetary action are yet to crystallize following the \nrebasing exercise. For me, my support for a wait and see approach is based \non three important reasons: aligning the dynamic path of the rebased CPI vis-\nà-vis the expected direction of the monetary stance; recalibration of the \nmemo items in monetary aggregates like the income velocity of money to \nalign properly with the rebased GDP; and more importantly, raising rate at \nthis time without allowing the market to assimilate the changes in the \neconomy will transmit excess shock to the market and increase exposure to \ncapital flight in the event of financial instability, especially as prices are \nstabilizing. \nIt is concerning that energy prices are falling more rapidly in the urban areas \nrelative to rural areas. This also accounted for a more rapid decline in the \nprices of farm produce in the urban areas compared to rural areas. I think the \nstate and local governments should be concerned. As one can observe, \ninflation has become a rural phenomenon, and from all indications, what is \nmoderating inflation is the prices of farm produce and energy. Farm produce \n(month-on-month) in the rural area declined from 5.0 to -3.1 per cent and \nfrom 31.79 to -17.64 per cent in the urban area. \nThe increase in the price of imported food in the urban areas is also \nconcerning. I think this is pressurizing the foreign exchange rate, which can \nbe seen from foreign exchange utilization by food products. Fiscal authorities \nshould be thinking of strengthening demand management policies to \nredirect consumption to domestic products, especially in highly substitutable \ncommodities. \nThough our projections have shown an expected annual average growth of \n3.9 in real output and a continued moderation in inflation, I am of the view \nthat there needs to be simultaneous expenditure-switching and expenditure-\nchanging policies by both the Bank and the fiscal authorities to manage \naggregate demand and supply disruption, to ensure the stability of the \nforeign exchange market. \nIn conclusion, fiscal authorities around the world are facing pressures as fiscal \nspace shrinks leading to stringent fiscal measures like expenditure prioritization \nand the expansion of tax base. While the monetary-fiscal policy collaboration \nbetween the Bank and fiscal authorities and the ensuing non-inflationary \ngrowth have continued to moderate price pressures and stir growth, the \nnational and sub-national governments must continue to address key growth \nand stable price enablers such as security, agriculture, and legacy \ninfrastructure. However, in doing so, monetary policy needs to be proactive \n \n41 \n \nin terms of policy coordination and making decisions on rate adjustments to \navoid fiscal surprises stemming from global uncertainties. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n42 \n \n12. OLAYEMI CARDOSO \nGovernor of the Central Bank of Nigeria and Chairman, Monetary Policy \nCommittee \nThe July 2025 Monetary Policy Committee (MPC) meeting convened during a \nperiod of increased optimism on the back of generally positive developments \nthat signal improved macroeconomic conditions. The trade balance has \nremained in surplus, the exchange rate is relatively stronger, and FX reserves \ncontinue a steady climb in absolute terms and in the structure and quality of \nbalances. The stable conditions are providing businesses and investors with a \nconducive environment to plan appropriately, and Nigerians now have more \nconfidence in their currency and are choosing to hold less balances in \ndomiciliary accounts. Inflation has sustained a moderating trend and, whilst \nthere is room for further improvement, it is clear that our tight policy stance \nand the adoption of orthodox frameworks are having the desired impact. \nWe must protect these gains, and the credibility of the MPC will be reinforced \nby our ability to reevaluate our positions when confronted with data that \nindicate a changing landscape. \nClouds of uncertainty permeate the global outlook and while inflation \nappears to be generally easing across major economies, recurring price \nshocks, volatile commodity prices, and geopolitical tensions continue to \nshape global markets. \nOn the domestic front, headline inflation has maintained a moderating trend \nfor consecutive months but underlying inflationary pressures remain elevated, \nreflecting persisting structural constraints in the supply chain and the lagged \nimpact of excess liquidity from prior years of extensive monetary \naccommodation. Core inflation also remains sticky, driven by cost-push \nfactors such as transportation and cost of utilities. \nSigns of recovery in output are evident, especially in agriculture and services, \nand business surveys show improving confidence, with manufacturing activity \nfirmly in an expansionary trajectory. These provide an indication of the \nunderlying resilience of the economy. \nThe foreign exchange market continues to benefit from coordinated reforms \nthat promote price discovery and improved liquidity, which have sustained \nthe stability of the market. Capital inflows have shown a notable rebound \nfollowing the slowdown recorded after tariff induced global markets volatility \na few months ago, but investor sentiment remains sensitive to policy clarity \nand external shocks. \n \n43 \n \nThe sustained stabilization of monetary conditions naturally calls for a review \nof our approach to the implementation of our policy stance and the liquidity \nmanagement framework to ensure effective monetary policy transmission. \nThere is growing evidence of the need for the adoption of more market-\nbased instruments to support the development of the yield curve and further \npromote savings and the stability of the financial system. The availability of \nthese tools will be important for the management of the transition from a high \nreserve requirement environment without creating market distortions. This is \nparticularly important given the persistently high demand for government \nsecurities in the primary debt markets, an indication of high liquidity levels in \nthe financial system. \nIn evaluating my stance in the context of the foregoing developments and \ndata driven forecasts, there is enough justification for a sustained tightening \nof monetary policy. The pace of disinflation remains tepid and insufficient to \nwarrant any easing of monetary conditions, and underlying inflation pressures \nand high stock of money supply call for a firm response before price stability is \nthreatened. The negative real yields obtainable in the market also pose a \ndeterrent to savings and investments in the domestic economy, and our \nfocus must remain on lowering inflation levels further, to improve the \nattractiveness of local assets. \nBased on these considerations, I voted to: (i) Retain the Monetary Policy Rate \n(MPR) at 27.50%; (ii) Maintain the asymmetric corridor at +500/-100 basis \npoints; (iii) Hold the Cash Reserve Ratio (CRR) at 50.00% for DMBs and 16.00% \nfor Merchant Banks; and (iv) Retain the Liquidity Ratio at 30.00%. \nTo improve monetary policy effectiveness, transparent engagement is \nessential to strengthening public confidence and ensuring that inflation \nexpectations remain anchored. Coordination with fiscal authorities must also \nbe deepened to ensure alignment in debt management, liquidity \nforecasting, and fiscal consolidation. Thus, we must sustain communication \nefforts to enhance stakeholder understanding of our strategy and expected \noutcomes. \nThe Bank remains committed to achieving a stable macroeconomic \nenvironment that supports inclusive and sustainable growth. Consequently, \navailable monetary tools will continue to be deployed judiciously in pursuit of \nthis goal. \n \nOLAYEMI CARDOSO \nGovernor \nJuly 2025", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/PERSONAL STATEMENTS OF MPC MEMBERS JULY 2025 MEETING AND COMMUNIQUE.pdf"}
{"doc_id": "a80abed30d942310bee04cfcca9d4e54", "text": "CENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 132 OF THE \nMONETARY POLICY COMMITTEE MEETING HELD ON \n21ST AND 22ND SEPTEMBER, 2020 \n \nThe Monetary Policy Committee (MPC) met on Monday, 21st and Tuesday, 22nd \nSeptember, 2020, in the light of lingering uncertainties associated with the \nCOVID-19 pandemic and downturn in crude oil prices. These uncertainties \nwhich centered primarily on when the pandemic will be fully subdued and the \noil market return to normalcy, have resulted in persistent weak aggregate \ndemand, disruptions in global supply chains, mixed price development, volatile \nand downward trending oil prices, as well as rising unemployment. \nThe Committee reviewed these developments and assessed their impact on \nthe domestic economy in the first three quarters of 2020 and noted the outlook \nfor the rest of the year. \nTen (10) members of the Committee were in attendance. \n \nGlobal Economic Developments \n \nThe Committee observed the moderate improvement in global output \nperformance with widespread recession in the second quarter of 2020. This \nfollowed the sharp decline in output growth in the Advanced Economies and \nsome Emerging Markets and Developing Economies (EMDEs), as well as the risk \nof further deterioration in global output growth, associated with the lingering \nshocks from the COVID-19 pandemic. Global exports and international travels, \nhowever, showed signs of gradual, but sluggish recovery, as countries relax \nrestrictions to allow for resumption of economic activities. \nThe International Monetary Fund (IMF), therefore, remained cautious of its \nglobal growth forecast for 2020, which was hinged on the near-term \n \n2 \n \ncontainment of the pandemic. The likelihood of a second-round spike in the \nrate of infection is, however, undermining hopes of an early return to normalcy. \nOil exporting countries are also likely to face further revenue shortfalls as a result \nof the decision by OPEC+ to reduce its production ceiling from 9.6 million barrels \nper day to 7.7 million barrels per day. Due to these headwinds, we suspect that \nthe global economy may suffer a deeper contraction in 2020 than the 4.9 per \ncent projected by the IMF. This may also dampen the projected recovery in \n2021. \nThe MPC observed the huge injection of monetary and fiscal stimulus into the \nglobal economy, noting its medium-term inflationary potential. In major \nadvanced economies, inflation mostly remained below their 2.0 per cent long-\nrun objectives, as the recovery of both global aggregate demand and supply \nremained stalled. Across the group of Emerging Market and Developing \nEconomies, price development remained mixed, reflecting the diverse \nstructure of these economies. The exchange rates of EMDEs continued to be \nunder pressure as global capital flows were subdued, reflecting investor’s \npreference for gold as a safe haven. With the unprecedented and \ncoordinated injection of liquidity by central banks and fiscal authorities \nglobally, the risk of another financial crisis post-COVID-19 can no longer be \noverlooked as this may likely crystalize into a double deep global recession \nwhen central banks across the globe move to normalize monetary policy. \nIn the global financial markets, conditions remain relatively tight reflecting \ncontinued uncertainties. Thus, while markets are showing moderate signs of \nrecovery, financial conditions are yet to ease fully as investors remain cautious \nof the lingering risk of a second-round of lockdown. \nDomestic Economic Developments \nAvailable data from the National Bureau of Statistics (NBS) showed that real \nGross Domestic Product (GDP) contracted by 6.10 per cent in the second \nquarter of 2020 compared with expansions of 1.87 and 2.12 per cent in the \npreceding quarter of 2020 and the corresponding period of 2019, respectively. \nThe development ended, the three-year trend of low, but positive real GDP \n \n3 \n \ngrowth recorded in Nigeria since the end of the 2016/17 recession. The \ncontraction in Q2 2020 was largely driven by the poor performance of both the \noil and non-oil sectors due to the lockdown to contain the spread of the \npandemic in Q1 2020. The oil sector contracted by 6.63 per cent in Q2 2020 \nfrom -5.03 per cent in the previous quarter, while the non-oil sector contracted \nby 6.05 per cent in Q2 2020, compared with an expansion of 1.55 per cent in \nQ1 2020. \nThe MPC noted the continued weakness in economic activities as indicated by \nthe Manufacturing and non-Manufacturing Purchasing Manager’s Indices \n(PMIs), which remained below the 50-index point benchmark. In August 2020, \nthe Manufacturing and non-Manufacturing PMIs were 48.5 and 44.3 index \npoints, respectively, compared with 42.4 and 43.3 index points in July 2020. This \nwas attributed to slower growth in production, business activities, new orders, \nsupply delivery time, employment level, new export orders and raw materials \nand input prices. Similarly, the employment level index component of the \nManufacturing and non-Manufacturing PMIs in August 2020 was 44.6 and 44.3 \nindex points, respectively, compared with 40.0 and 41.1 index points in July \n2020. The Committee was, however, optimistic that with the easing of the \nlockdown and gradual resumption of economic activities, the PMIs will improve \nin the short-to medium term. \nThe Committee expressed deep concern on the continued uptick in inflation \nfor the twelfth consecutive month as headline inflation (year-on-year) rose to \n13.22 per cent in August 2020 from 12.82 per cent in July 2020. The increase in \nheadline inflation was largely driven by the persistent increase in the food \ncomponent, which rose to 16.00 per cent in August 2020 from 15.48 per cent in \nJuly 2020. The core component also rose to 10.52 per cent in August from 10.10 \nper cent in July 2020. These upticks were driven primarily by legacy structural \nfactors such as the inadequate state of critical infrastructure and broad-based \nsecurity challenges across the country, which dampened production activities. \nOther factors include the disruptions to supply chains following restriction to \nmovements to curb the spread of the pandemic; adverse weather conditions, \n \n4 \n \nwhich resulted in flooding of farmlands; as well as the inflation pass-through to \ndomestic prices following the depreciation in the exchange rate. The recent \nincrease in energy cost is also expected to further impact the domestic price \nlevel in the short-term. \nThe Committee, therefore, stressed the urgent need for a combination of \nbroad-based monetary and fiscal policy measures to curb the rise in inflation \nand contraction in output growth. This will involve targeted investment by the \nfiscal authorities to resuscitate critical infrastructure to improve the ease of \ndoing business across the country. In addition, the MPC believes the fiscal \nauthorities can build on earlier efforts and articulate a clear strategy to attract \nprivate sector investment. The Bank will, however, continue to take relevant \nsteps to ensure that the detrimental risk of inflation to the economy is \ncontained. \nThe Committee noted the various interventions by the CBN to reflate the \neconomy, improve aggregate supply and drive down inflation. Recent \ninterventions were largely in the areas of Manufacturing, Agriculture, Electricity \n& Gas, Solar Power and housing constructions among others. It expressed \noptimism that these initiatives will significantly ease the adverse impact of the \nCOVID-19 pandemic and set the economy on a path of recovery. So far, total \ndisbursements from the Bank’s interventions in the wake of the COVID-19 \npandemic amounted to N3.5 trillion including: Real Sector Funds, (N216.87 \nbillion); COVID-19 Targeted Credit Facility (TCF), (N73.69 billion); AGSMEIS, \n(N54.66 billion); Pharmaceutical and Health Care Support Fund, (N44.47 billion); \nand Creative Industry Financing Initiative (N2.93 billion). Under the Real Sector \nFunds, a total of 87 projects that included 53 Manufacturing, 21 Agriculture and \n13 Services projects were funded. In the Health Care sector, 41 projects which \nincluded 16 pharmaceuticals and 25 hospital and health care services were \nfunded. Under the Targeted Credit Facility, 120,074 applicants have received \nfinancial support for investment capital. The Agri-Business/Small and Medium \nEnterprise Investment Scheme (AGSMEIS) intervention has been extended to a \ntotal of 14,638 applicants, while 250 SME businesses, predominantly the youths, \n \n5 \n \nhave benefited from the Creative Industry Financing Initiative. In addition to \nthese initiatives, the CBN is set to contribute over N1.8 trillion of the total sum of \nN2.30 trillion needed for the Federal Government’s 1-year Economic \nSustainability Plan (ESP), through its various financing interventions using the \nchannels of Participating Financial Institutions (PFIs). The MPC is, thus, using this \nmedium to appeal to our important economic stakeholders to take advantage \nof these intervention initiatives to help support a quick rebound in growth. \nThe Bank’s policy on Loan to Deposit ratio also resulted in a significant growth \nin credit to various sectors from N15.57 trillion to N19.33 trillion between end-\nMay 2019 and end-August 2020, an increase of N3.77 trillion. This growth in credit \nwas mainly to manufacturing (N866.27 billion), consumer credit (N527.65 billion), \noil & gas (N477.65 billion), agriculture (N287.11 billion) and construction (N270.97 \nbillion). \nOn Monetary Aggregates, broad money supply (M3) rose to 6.93 per cent \n(year-to-date) in August 2020 from 5.23 per cent in July 2020, reflecting the \nincrease in both Net Foreign Assets and Net Domestic Assets. Similarly, \naggregate domestic credit (net) grew by 6.94 per cent in August 2020 \ncompared with 9.43 per cent in July 2020. \nMoney market rates remained relatively stable in the review period with some \nmild volatility, reflecting the prevailing liquidity conditions in the banking system. \nThe monthly weighted average Inter-bank call rate increased to 7.38 per cent \nin August 2020 from 6.25 per cent July 2020, while the Open Buy Back (OBB) rate \ndecreased to 8.39 per cent in August 2020 from 10.12 per cent in July 2020. \nThe MPC noted the moderate improvement in the equities market in the review \nperiod, as the All-Share Index (ASI) increased by 5.78 per cent from 24,174.75 \non July 21, 2020 to 25,572.57 on September 18, 2020. On a year-to-date basis, \nhowever, the ASI decreased by 4.73 per cent compared with 26,842.07 as at \nDecember 31, 2019. Market Capitalisation (MC) also increased by 5.98 per cent \nfrom N12.61 trillion to N13.36 trillion over the same period. As a lead indicator, \n \n6 \n \ntherefore, this improvement in market indices signposts the commencement of \na broad-based economic recovery. \nThe Committee also noted the decrease in the NPLs ratio to 6.1 per cent at \nend-August 2020 compared with 9.4 per cent in the corresponding period of \n2019 due largely to recoveries, write offs and disposals. \nThe Committee expressed confidence in the overall stability of the banking \nsystem as reflected in the positive performance of the financial soundness \nindicators (FSIs), despite the persistence of the COVID-19 pandemic. It \nhowever, called on the Bank to sustain its regulatory oversight on the industry in \nthe light of the continued fragility of macroeconomic indicators and the \nimpact of the COVID-19 pandemic and the growing risk of cyber-attacks on \nbusiness and economic activities. \nOn the external sector, the Committee noted the resumption of sales to \nBureaux de Change (BDCs) in a bid to improve liquidity and ease demand \npressure in the foreign exchange market. Consequently, the exchange rate \nappreciated at all windows. The MPC observed the recent improvement in \nexternal reserves and urged the Bank to maintain its prudent allocation of \nforeign exchange towards balancing supply and demand. \nOutlook \nThe broad outlook for the global recovery remains uncertain, as the headwinds \nassociated with the COVID-19 pandemic persist, especially due to new \nindications of a second spike in the rate of infections, continues to dampen \nprospects of a near term recovery. \nWith several economies contracting deeper than expected, the global \neconomy may eventually contract beyond the -4.9 per cent earlier projected \nby the IMF, as the second-round spike in the infection rate has resulted in \nwidespread localized lockdowns in some advanced and emerging market \neconomies. In addition, the persisting volatility in global oil prices, which is likely \n \n7 \n \nto continue beyond the end of 2020 as indicated by the deliveries in the oil \nfutures market, signposts the likelihood of a disorderly global recovery. \nThe synchronized monetary policy accommodation by major central banks in \nboth the Advanced and Emerging Market Economies, portends the likelihood \nof a medium-term debt crisis which may set the global economy into another \ndownturn, if not properly managed. \nOn the domestic economy, staff forecast suggests that the economy may \ncontinue to grapple with the effects of the pandemic throughout the rest of \nthe year. With persistent focus on activities meant to reverse the contraction, \nthe MPC projects growth at positive levels in Q4 2020, or at the latest by Q1 \n2021, based on the anticipated positive results from the coordinated and \nsustained interventions by both the monetary and fiscal authorities. These \ninterventions include, the coordinated response of the monetary and fiscal \nauthorities to curtail the spread of the COVID-19 pandemic, reverse the \ndownturn in the economy, improve sources of revenue in the non-oil sector and \nencourage the build-up of fiscal buffers. \n The Committee’s Considerations \nThe Committee’s considerations focused on the major headwinds exerting \ndownward pressure on output growth and upward pressure on domestic \nprices. \nThe key factors considered by the MPC as likely to exert upward pressure on \ndomestic prices in the near term include: the prevalence of security challenges \nin the country; adverse weather conditions causing flooding in some farming \nregions; the increase in petroleum pump price; deregulation in electricity tariff; \nlow crude oil price; and exchange rate adjustment. \nThe Committee noted that available evidence does not support the view that \nthe rise in inflation was due to monetary factors. Rather, there is overwhelming \nevidence that the inflationary pressure reflects the prevalence of structural \nrigidities and supply shocks. Hence, the traditional tools of monetary policy may \nnot be helpful in addressing current inflationary pressures. Instead, the useful \n \n8 \n \npolicies will be the supply-side measures implemented by the Bank. In the light \nof this, reducing MPR will signal to the Deposit Money Banks to lend more to \nstimulate growth, increase aggregate supply, which should dampen prices in \nthe immediate term. \nAlthough the MPC remains committed to its primary mandate of ensuring price \nstability, it however, noted the need to address the structural supply-side issues \nthat are putting upward pressure on production cost and depressing economic \ngrowth. To this end, the Committee supports the various intervention \nprogrammes of the Bank towards stimulating production in the agricultural and \nmanufacturing sectors to increase aggregate output and lower prices. \nOn Financial Markets, the Committee considered the impact of the dwindling \ncapital inflows on yields in the equities, bonds and money markets. It, however, \nobserved the improvement in the equities market from the second quarter of \n2020, indicating prospects of medium-term economic recovery. Members also \ntook cognizance of the prevailing low rates in the money market which are also \nbelow the lower band of the standing facilities corridor, as being a distortion to \nmoney market operations. \nThe Committee noted the increase in aggregate credit and encouraged \nfurther expansion in credit to employment-generating sectors to expedite \ngrowth recovery. It, however, urged the Bank to sustain its regulatory \nsurveillance over the banking system to ensure that Non-Performing Loans \n(NPLs) remain low. \nThe Committee also noted the rising public debt profile and urged the fiscal \nauthority to strengthen its debt management strategy, explore other sources of \nrevenue, as well as enhance efficiency in public expenditure. It commended \nthe combined effort of the Federal Government and the CBN in providing the \nrequired stimulus to contain the pandemic and ease its impact on the Nigerian \neconomy. \nThe Dilemma of Monetary Policy \n \n \n9 \n \nThe MPC was at this meeting confronted by policy dilemma. Whereas MPC \nbelieves in the primacy of its price and monetary stability mandate, it \nnevertheless was confronted with what policy direction to focus on, given the \ncontraction in output growth during the second quarter of 2020, which may \nlead to a recession, if the third quarter of 2020 output growth numbers further \nshow a contraction. It is, therefore, of the view that, if a recession occurs in Q3 \n2020 the Committee would be confronted with proposing policy options in a \nperiod of stagflation. This is because, with the recent removal of subsidy on fuel \nprice, the increase in energy prices, and the adjustment of the exchange rate, \ninflationary pressure will no doubt persist unless MPC consider options that will \ndeal with the pressure aggressively. \nThe Committee was therefore of the view that, to abate the pressure, it had no \nchoice but to pursue an expansionary monetary policy using development \nfinance policy tools, targeted at raising output and aggregate supply to \nmoderate the rate of inflation. \nAt present, fiscal policy is constrained and so cannot, on its own lift the \neconomy out of contraction or recession given the paucity of funds arising from \nweak revenue base, current low crude oil prices, lack of fiscal buffers and high \nburden of debt services. Therefore, monetary policy must continue to provide \nmassive support through its development finance activities to achieve growth \nin the Nigerian economy. This is the reason MPC will continue to play a \ndominant role in the achievement of the goals of the Economic Sustainability \nProgram (ESP) through its interventionist role to navigate the country towards a \ndirection that will boost output growth and moderate the level of inflation. \nSimilarly, given that the currency adjustment was a causal factor in determining \nthe price of petroleum products and energy prices, the MPC believes that the \nCBN management must take bold actions to stabilize the exchange rate. \nManagement was further enjoined by the MPC to continue to provide funding \nto sectors that will resolve the supply constraints in petrol pricing, energy pricing \nand food availability. \n \n10 \n \nTo support household consumption, the MPC enjoined management to \naggressively channel its funding to targeted households, SMEs and consumer \ncredit by further increasing its lending activities through its NIRSAL Microfinance \nBank (NMFB). The Management was also directed to ensure that DMBs respond \nto the reduction in deposit rates by aggressively lowering cost of credit to \nborrowers. \nAs regards output growth, MPC noted that air and road transportation; \nentertainment & accommodation; food services; and education subsectors \nwere adversely affected by the lockdown. It therefore suggested that more \nefforts be put in place to continue to provide relief and funding to these \nsubsectors to catalyse growth and improve the output numbers. \nDealing with The Causal Factors of Inflation \n \nIn the view of the MPC, so far, evidence has not supported the rising inflation to \nmonetary factors but rather, evidence suggests non-monetary factors \n(structural factors) as the overwhelming reasons accounting for the inflationary \npressure. \nAccordingly, the implication is that traditional monetary policy instruments are \nnot helpful in addressing the type of inflationary pressure we are currently \nconfronted with. What is useful is the kind of supply side measures currently \nbeing implemented. MPC also expects that a downward adjustment in MPR \nmay be necessary to further put pressure on our deposit money banks to lower \ncost of credit in aid of growth. \n The Committee’s Decision \nIn the face of declining economic growth and rising inflation, the Committee \nfaced a difficult set of policy choices, requiring trade-offs and sequencing. \nFollowing the above considerations, the Committee reviewed the choices \nbefore it, bearing in mind its primary mandate of price stability and the need \nto support the recovery of output growth. Consequently, the Committee noted \nthat the likely action aimed to addressing the rise in domestic prices would \n \n11 \n \nhave been to tighten the stance of policy, as this will not only moderate the \nupward pressure on prices, but will also attract fresh capital into the economy \nand improve the level of the external reserves. It however, noted that this \ndecision may stifle the recovery of output growth and thus, drive the economy \nfurther into contraction. \nOn easing the stance of policy, the MPC was of the view that this action would \nprovide cheaper credit to improve aggregate demand, stimulate production, \nreduce unemployment and support the recovery of output growth. The \nCommittee, however, observed that with inflation trending upwards, easing of \nthe policy stance may exacerbate the current inflationary pressure through an \nincrease in money supply. In addition, the MPC noted the tendency of an \nasymmetric response to downward price adjustments by ‘Other Depository \nCorporations’, thus undermining the overall beneficial impact of a reduction to \nthe cost of capital. \nIn the Committee’s view, a hold position will allow the economy to adjust to the \nongoing stimulus measures put in place by the monetary and fiscal authorities \nto curb the downturn and allow more time for the MPC to assess their impact \non the economy. \nAfter the consideration of the three policy options, Members were of the \nopinion that the option to loosen will complement the Bank’s commitment to \nsustain the trajectory of the economic recovery and reduce the negative \nimpact of COVID-19. In addition, the liquidity injections are expected to \nstimulate credit expansion to the critically impacted sectors of the economy \nand offer impetus for output growth and economic recovery. \nIn view of the foregoing, the Committee decided to reduce the MPR by 100 \nbasis points to 11.5 per cent and adjust the asymmetric corridor to +100/-700 \naround the MPR. \nSix (6) members voted to reduce the MPR by 100 basis points, one (1) member \nby 50.0 basis points and three (3) voted to hold. Nine (9) members voted to \nchange the asymmetric corridor while one member voted to hold. \n \n12 \n \nAll members voted to hold the Cash Reserve Ratio (CRR) and Liquidity Ratio \n(LR). \nIn summary, the MPC voted to: \nI. Reduce the MPR by 100 basis points from 12.5 to 11.5 per cent; \nII. Adjust the asymmetric corridor from +200/-500 basis points to +100/-700 basis \npoints around the MPR; \nIII. Retain the CRR at 27.5 per cent; and, \nIV. Retain the Liquidity Ratio at 30 per cent. \n \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n \n22nd September, 2020", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No. 132 of the Monetary Policy Committee Meeting Held September 21 and 22 2020.pdf"}
{"doc_id": "4c681686849777720cc2d6f87a778b40", "text": "MENU\nD.1.1\nForeign Trade\nD.1.2.1\nValue of Major Imports Groups by S.I.T.C Sections\nD.1.2.2\nImports by H. S. Section\nD.1.3\nExport Commodity Price Index\nD.1.3.1\nExport Commodity Price Index (Base Period: January\n2018)\nD.1.4\nImport Commodity Price Index\nD.1.4.1\nImport Commodity Price Index (Base Period: January\n2018)\nD.1.5\nCommodity Terms of Trade\nD.1.5.1\nCommodity Terms of Trade (Base Period: January 2018)\nD.2.1.1\nBalance of Payments - Analytical Statement (1981 –\n1993)\nD.2.1.2\nBalance of Payments - Analytical Statement (1994 –\n2004)\nD.2.1.3A Balance of Payments Compilation (2005 – 2018) -Naira\nD.2.1.3B Balance of Payments Compilation (2005 – 2018) - Dollar\nD.2.1.4A Balance of Payments BPM6 Compilation Naira\nD.2.1.4B Balance of Payments BPM6 Compilation US$\nD.2.2.1\nInternational Investment Position (Naira)\nD.2.2.2\nInternational Investment Position (US Dollar)\nD.2.2.3A International Investment Position BPM6 (Naira)\nD.2.2.3B International Investment Position BPM6 (US Dollar)\nD.3.1\nExternal Reserves\nD.3.2\nExternal Reserves Adequacy - Months of Import Cover\nD.4.1\nMonthly Average Official Exchange Rate of the Naira\nD.4.2\nMonthly Average (AFEM/DAS) Exchange Rates of the\nNaira - Central Rate\nD.4.3\nAverage Naira Cross Exchange Rates - Selling\nD.4.4\nAverage AFEM/DAS Naira Cross Exchange Rates - Selling\nD.4.5\nNaira Official Cross Exchange Rates - End Period\nD.4.6\nEnd Period Naira Cross Exchange Rates - Selling\nD.4.7\nMonthly Official Exchange Rate - End Period\nD.4.8\nMonthly Average Exchange Rate Movements at BDC &\nIFEM Segments of the FOREX Market\nD.4.9\nComputed Rleative Purchasing Power Parity (RPPP)\nExchange Rate with Percentage Overvaluation and\nDevaluation\nD.4.10\nBilateral Real Exchange Rate - Interbank\nD.4.10.1 Bilateral Real Exchange Rate - I & E\nD.4.11\nNominal Effective Exchange Rate Indices for Nigeria\nD.4.12\nNominal Effective Exchange Rate Indices for Nigeria\nD.4.12.1 Nominal Effective Exchange Rate Indices for Nigeria - I &\nE\nD.4.13\nReal Effective Exchange Rate Indices for Nigeria\nD.4.13.1 Real Effective Exchange Rate Indices for Nigeria - I & E\nD.5.1\nSectoral Utilization of Foreign Exchange for Transactions\nValid for Foreign Exchange\nD.5.2\nSectoral Utilization of Foreign Exchange for Transactions\nValid for Foreign Exchange – Cont’d\nD.5.3\nSupply of Foreign Exchange\nD.6.1\nCash flow\nD.7.1.1\nCapital Importation by Type of Investment\nD.7.1.2\nCapital Importation By Nature of Business\nD.7.1.3\nCapital Importation By Country\nD.7.2\nCo-ordinated Direct Investment Survey\nReturn to\nMenu\nTable D.1.1:\nForeign\nTrade: Oil\nand Non-Oil\n(₦' Billion)\nImports (cif)\nYear\nOil\nNon-Oil\nTotal\n1981\n0.1198\n12.719799999999999 12.8395999\n1982\n0.22550000000000001\n10.545\n10.7705\n1983\n0.1716\n8.7321000000000009 8.90370000\n1984\n0.28239999999999998\n6.8958999999999993 7.17829999\n1985\n5.1799999999999999E-2 7.0108000000000006 7.06260000\n1986\n0.91389999999999993\n5.0697000000000001 5.98359999\n1987\n3.1700999999999997\n14.691600000000001 17.8616999\n1988\n3.8030999999999997\n17.642599999999998 21.4456999\n1989\n4.6716000000000006\n26.188599999999997 30.8601999\n1990\n6.0731000000000002\n39.644800000000004 45.7179\n1991\n7.7721999999999998\n81.715999999999994 89.4881999\n1992\n19.561499999999999\n123.58969999999999 143.151200\n1993\n41.136099999999999\n124.4933\n165.6294\n1994\n42.349599999999995\n120.4392\n162.788799\n1995\n155.82589999999999\n599.30180000000007 755.127700\n1996\n162.17870000000002\n400.4479\n562.626600\n1997\n166.9025\n678.81409999999994 845.716599\n1998\n175.85420000000002\n661.56449999999995 837.418699\n1999\n211.6618\n650.85390000000007 862.515699\n2000\n220.81769\n764.2047\n985.022389\n2001\n237.10682999999997\n1121.0735\n1358.18033\n2002\n361.71\n1150.98533\n1512.69533\n2003\n398.92230999999998\n1681.31296\n2080.23527\n2004\n318.11471999999998\n1668.93055\n1987.04527\n2005\n797.2989399999999\n2003.5573899999999 2800.85633\n2006\n710.68299999999999\n2397.8363199999999 3108.51931\n2007\n768.22683999999992\n3143.72579\n3911.95262\n2008\n1315.5315442462663\n4277.6489059074647 5593.18045\n2009\n1068.7449213806058\n4411.9112015847386 5480.65612\n2010\n1757.1404001490046\n6406.8341702454727 8163.97457\n2011\n3043.596724420433\n7952.2669016427744 10995.8636\n2012\n3064.2559246165702\n6702.3008106272446 9766.55673\n2013\n2429.3761024227433\n7010.0486048142893 9439.42470\n2014\n2215.0320971703645\n8323.7484791770476 10538.7805\n2015\n1725.2249234312028\n9350.8434202644348 11076.0683\n2016\n2384.412461649757\n7095.9544041932968 9480.36686\n2017\n2615.4543210921088\n8189.391525450902\n10804.8458\n2018 1\n3686.1779345703899\n9758.9348105449408 13445.1127\nSources:\nNational\nBureau of\nStatistics\nand Central\nBank of\nNigeria\nNote: Data\ninclude CBN\nestimates\nfor informal\ncross border\ntrade.\n1Provisional\nReturn\nto Menu\nTable\nD.1.2.1:\nValue of\nMajor\nImports\nGroups\nby\nS.I.T.C.\nSections\n(₦'\nBillion)\nYear\nFood &\nBeverages\nCrude\nLive Animal\n&\nMaterials\nTobacco\nInedible\n1981\n1.8195999999999999\n1.6500000000000001E-2 0.2189000000\n1982\n1.6422999999999999\n1.6399999999999998E-2 0.2072\n1983\n1.7610999999999999\n1.78E-2\n0.2776000000\n1984\n1.3497000000000001\n1.66E-2\n0.3001000000\n1985\n1.1990000000000001\n9.4000000000000004E-3 0.3504999999\n1986\n0.80189999999999995 1.4500000000000001E-2 0.1939000000\n1987\n1.8737999999999999\n3.0699999999999998E-2 0.7995999999\n1988\n1.8915999999999999\n8.5699999999999998E-2 0.5915000000\n1989\n2.1089000000000002\n0.1363\n1.0807\n1990\n3.4744999999999999\n0.22869999999999999\n1.4172\n1991\n3.0456999999999996\n0.2611\n1.5664\n1992\n12.840200000000001\n0.72960000000000003\n3.9396\n1993\n13.952399999999999\n0.49830000000000002\n1.3288\n1994\n13.837\n0.4884\n5.0465\n1995\n88.349899999999991\n3.0205000000000002\n31.715400000\n1996\n75.391999999999996\n2.2505000000000002\n26.4435\n1997\n100.7283\n5.0338000000000003\n38.084600000\n1998\n102.16510000000001\n3.3496999999999999\n37.683900000\n1999\n103.4898\n4.3121\n38.808699999\n2000\n113.6305\n6.7408000000000001\n44.296599999\n2001\n160.20910000000001\n9.5038999999999998\n62.454329999\n2002\n144.29764\n13.670780000000001\n75.763300000\n2003\n201.64829577418502\n18.830149903545841\n105.21155767\n2004\n178.74744145487705\n21.846715458274645\n101.97042067\n2005\n193.25908999999999\n28.008560000000003\n165.25051999\n2006\n214.48767854585719\n31.085198926162377\n183.40265271\n2007\n269.92453685898033\n39.119533486487619\n230.80522120\n2008\n311.38815569605913\n51.898028870813924\n285.43914126\n2009\n446.89565005097546\n28.88074152473482\n77.181110675\n2010\n693.25537031537669\n38.185259143925265\n104.31391286\n2011\n2885.4371485547731\n51.183298903855416\n582.79971426\n2012\n1294.0351823460312\n132.35593698107547\n103.41911628\nSources:\nNational\nBureau\nof\nStatistics\nand\nCentral\nBank of\nNigeria\nReturn to Menu\nTable D.1.2.2 Imports\nby H.S. Section (₦'\nBillion)\nSection\n2013\n2014\n01 - Live animals;\nanimal products\n350.23732949291747\n483.51668918945609\n02 - Vegetable products 414.90044422846728\n650.50088533546955\n03 - Animal or\nvegetable fats and oils\nand their cleavage\nproducts; prepared\nedible\n55.974969803405919\n129.04151045378782\n04 - Prepared\nfoodstuffs; beverages,\nspirits and vinegar;\ntobacco and\nmanufactured\n890.93589730832264\n578.64844919055861\n05 - Mineral products\n1949.912163549433\n1777.2310757935136\n06 - Products of the\nchemical or allied\n675.4277321678353\n833.94583883089047\n07 - Plastics and\narticles thereof; rubber\nand articles thereof\n849.16598851885635\n635.72316737560459\n08 - Raws hides and\nskins, leather, furskins\nand articles thereof;\nsaddlery and\n13.317877996857497\n8.2138089300959649\n09 - Wood and articles\nof wood; wood\ncharcoal; cork and\narticles of cork;\n30.555345105055203\n21.354242714058593\n10 - Pulp of wood or of\nother fibrous cellulosic\nmaterial; waste and\nscrap of paper or\n176.75867732066544\n231.33167926828634\n11 - Textiles and\ntextiles articles\n129.61211132891881\n151.64298480915014\n12 - Footwear,\nheadgear, umbrellas,\nsun umbrellas, walking\nsticks, seat sticks,\nwhips\n35.521142308691523\n37.212565877789835\n13 - Articles of stone,\nplaster,cement,asbestos,\nmica or similar\nmaterials; ceramic\n142.743347366199\n160.10180358779886\n14 - Natural or cultured\npearls, precious or\nsemi-precious stones,\nprecious metals,\n1.6506383312732658\n1.3809393125256479\n15 - Base metals and\narticles of base metal\n746.3011924296294\n968.27672368421815\n16 - Machinery and\nmechanical appliances;\nelectrical equipment;\nparts thereof; sound\n1788.4900051251032\n2441.6272964901113\n17 - Vehicles, aircraft,\nvessels and associated\ntransport equipment\n1030.0314137258638\n1252.6534957040351\n18 - Optical,\nphotographic,\ncinematographic,\nmeasuring, checking,\nprecision, medical\n80.082509038555202\n98.312536722567017\n19 - Arms and\nammunition; parts and\naccessories thereof\n0.23685178606927146 8.28978342847487E-2\n20 - Miscellaneous\nmanufactured articles\n76.884506947798741\n78.018668197631769\n21 - Works of art,\ncollectors pieces and\nantiques\n0.68456335711377547 9.7249469660711296E-2\n9439.4247072370308\n10538.914508771493\nSource: National\nBureau of Statistics\nNotes: 1Provisional\nReturn to\nMenu\nTable\nD.1.3:\nExport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2000\nJan\n66.545077831823704 210.868184989789\n114.1570\nFeb\n103.58945881122656 104.65492992931746 113.6653\nMar\n101.61530209281828 163.6841348286888\n86.40696\nApr\n102.81373826219841 165.61460183013719 87.43238\nMay\n98.544657943170165 200.27698108224203 121.5631\nJun\n98.923509435872603 201.04693893506342 122.0305\nJul\n82.913157603670854 119.13985781881411 97.18022\nAug\n102.55440972409041 159.82015855203196 95.16469\nSep\n99.802541500478611 160.76410070885095 84.86550\nOct\n65.754509097011848 200.8873199692332\n111.4593\nNov\n95.914813190527639 194.93222289070243 111.8604\nDec\n110.33026990793431 142.71100329622615 144.7072\n2001\nJan\n100.13964701688073 112.26302333362524 122.8880\nFeb\n76.672313356028425 114.95413598646768 136.4690\nMar\n103.12237207309983 104.1830389627023\n113.1528\nApr\n100.05431380497025 161.16966100327284 85.07959\nMay\n91.841857540623309 147.74809665916351 80.54389\nJun\n65.293536073797966 403.1408111957648\n112.0100\nJul\n109.67935490247555 131.59771956747176 112.8099\nAug\n96.059045992317891 195.22535405294414 118.4969\nSep\n102.11993797337618 103.17029431021294 112.0528\nOct\n110.45205946829432 142.86853676699977 144.8670\nNov\n83.497441436243506 119.97851824963496 97.86487\nDec\n100.37100933545314 112.52239546186969 123.1719\n2002\nJan\n103.04030259274285 160.57737099678451 95.61557\nFeb\n100.26580254074318 161.51033165058726 85.25943\nMar\n77.019246900625831 115.4742904479449\n137.0865\nApr\n100.50750395305516 161.8996695332323\n85.46496\nMay\n100.4067950312585\n161.73744541546353 85.37932\nJun\n92.165733108776635 148.26912269272222 80.82792\nJul\n65.747923768108791 200.94596983299351 112.7895\nAug\n110.54305906021337 132.6340266978365\n113.6983\nSep\n95.982121831363088 195.06901743308188 118.4020\nOct\n102.08925904147951 103.13929982964709 112.0192\nNov\n100.44142395414907 112.60133480524844 123.2583\nDec\n83.347345337345686 119.76375234112815 97.68912\n2003\nJan\n110.50741835936701 142.94014289007865 144.9396\nFeb\n103.2263892232906\n160.86736725222164 95.78825\nMar\n66.345542366061096 409.63619642910044 113.8147\nApr\n103.51680087418464 104.58152466784401 113.5856\nMay\n105.29091700775642 164.08471459726613 97.70401\nJun\n103.07180487430232 166.03030113191963 87.64547\nJul\n98.881393457749851 200.96134463568887 121.9785\nAug\n97.149951002712399 98.149188424210706 106.5994\nSep\n108.28199093968081 140.0615767666205\n142.0207\nOct\n96.144759121964384 149.83139863590563 89.21689\nNov\n92.652208053544939 149.24618831687067 78.78533\nDec\n97.366175726907926 202.68449667462255 121.0705\nTable\nD.1.3:\nExport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2004\nJan\n35.243735586151224 133.23046096988037 90.15962\nFeb\n110.71618490638063 143.20266554274644 145.2122\nMar\n110.9557709862238\n144.63976152656804 145.6979\nApr\n66.302855190680518 99.40729705582153\n118.0124\nMay\n102.08925904147951 103.13929982964709 112.0192\nJun\n59.926493012472449 183.08208431176254 101.5803\nJul\n78.487782628944188 112.78093287339262 91.99336\nAug\n64.667929822250485 399.27814080533011 110.9368\nSep\n106.55627763051174 129.07041146314032 109.8516\nOct\n96.154934989922978 195.41917808974657 118.6150\nNov\n101.13821214913952 102.17847089636248 110.9756\nDec\n106.30205017912262 127.54549294697406 109.3362\n2005\nJan\n98.413951506837208 100.48298254094124 98.83918\nFeb\n79.166609855166513 116.85270482755385 93.36952\nMar\n88.061035652646368 101.38371206994063 108.5021\nApr\n96.850207023724835 154.06284792160261 90.64702\nMay\n95.19364918471156\n193.46656711443134 111.0194\nJun\n98.779893283877414 100.17954714995733 99.06607\nJul\n97.233072349217281 201.88611001694392 120.8006\nAug\n97.099968971526621 201.08772335926517 120.5308\nSep\n91.867233187715854 151.35290633690713 81.50008\nOct\n91.055302583802856 146.48274772506716 79.85409\nNov\n100.4067950312585\n161.73744541546353 85.37932\nDec\n90.053958775965427 146.16307810423731 79.31429\n2006\nJan\n92.568281580541893 161.24460206778753 84.41146\nFeb\n66.981682416902871 103.47906900998279 119.3886\nMar\n96.671096677077827 202.32865901466465 114.0145\nApr\n108.6274075267909\n130.33555060518907 111.7280\nMay\n99.477447494585519 106.86209193579387 100.9951\nJun\n109.45397950224987 135.29353174937367 113.4036\nJul\n87.602827115918799 98.208437100231507 107.5032\nAug\n102.12249049348794 106.56899357907533 112.6888\nSep\n90.208599312825427 145.12063680872126 79.11155\nOct\n98.585916866956993 102.88582104872032 108.7877\nNov\n97.927150610734088 98.934381931604378 107.4522\nDec\n109.36481084907766 141.46219253428671 143.4409\n2007\nJan\n100\n100\n100\nFeb\n92.535876615237584 148.86458101678943 81.15253\nMar\n110.7313022740793\n132.8598885083006\n113.8919\nApr\n102.26310632222729 103.31493521952029 112.2099\nMay\n83.49764109131003\n119.97971582962148 97.86528\nJun\n103.38146141541371 161.1090307984193\n95.93214\nJul\n100.70892179664845 162.22411776876987 85.63623\nAug\n65.853289030557704 201.1891036246702\n111.6267\nSep\n96.155201193511431 195.42077482777191 112.1408\nOct\n110.71778214544338 143.21224615777845 145.2155\nNov\n100.59231242278327 112.77049054106003 123.4435\nDec\n77.096343243869697 115.58988032827318 137.2237\nTable\nD.1.3:\nExport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2008\nJan\n103.7970529170607\n104.86465924781308 113.8931\nFeb\n100.70892179664845 162.22411776876987 85.63623\nMar\n92.535876615237584 148.86458101678943 81.15253\nApr\n65.853289030557704 406.59688471584946 112.9702\nMay\n110.7313022740793\n132.8598885083006\n113.8919\nJun\n96.155201193511431 195.42077482777191 118.6155\nJul\n102.26310632222729 103.31493521952029 112.2099\nAug\n110.71778214544338 143.21224615777845 145.2155\nSep\n83.49764109131003\n119.97971582962148 97.86528\nOct\n100.59231242278327 112.77049054106003 123.4435\nNov\n103.38146141541371 161.1090307984193\n95.93214\nDec\n100.70892179664845 162.22411776876987 85.63623\n2009\nJan\n77.096343243869697 115.58988032827318 137.2237\nFeb\n100.70892179664845 162.22411776876987 85.63623\nMar\n100.70892179664845 162.22411776876987 85.63623\nApr\n92.535876615237584 148.86458101678943 81.15253\nMay\n65.853289030557704 201.26799863080282 112.9702\nJun\n110.7313022740793\n132.8598885083006\n113.8919\nJul\n96.155201193511431 195.42077482777191 118.6155\nAug\n102.26310632222729 103.31493521952029 112.2099\nSep\n100.59231242278327 112.77049054106003 123.4435\nOct\n83.49764109131003\n119.97971582962148 97.86528\nNov\n110.71778214544338 143.21224615777845 145.2155\nDec\n103.38146141541371 161.1090307984193\n95.93214\n2010\nJan\n66.511821920863269 410.66285356300801 114.0999\nFeb\n103.7970529170607\n104.86465924781308 113.8931\nMar\n105.44909064372196 164.3312114143877\n97.85079\nApr\n103.22664484156466 166.2797207129891\n87.77714\nMay\n99.039857229316766 201.283398072605\n122.1740\nJun\n105.45963555278635 164.34764453552916 97.86057\nJul\n113.53105575378599 299.79200436823834 180.7226\nAug\n106.55616014326067 267.467938309229\n167.6380\nSep\n109.34413962311535 382.20476922441662 167.7461\nOct\n121.4504914913595\n377.21940235895181 168.3092\nNov\n141.55905107769058 345.99248729015318 182.2331\nDec\n134.74383138058744 381.9354338532134\n176.8319\n2011\nJan\n177.57038634153142 174.63799602696702 132.3011\nFeb\n176.27156555112711 192.83063550156689 150.5355\nMar\n209.32145249615991 193.37814027942534 189.4028\nApr\n74.584920694841472 150.33192854523293 113.9568\nMay\n216.41684574504237 188.08693907239268 135.8324\nJun\n450.1035583680528\n250.64816570592828 547.3563\nJul\n120.53158256720128 228.70138800835679 125.1459\nAug\n131.52737351281061 197.82743430111393 146.4193\nSep\n110.48619452918513 105.7410673002545\n183.1979\nOct\n116.92436783594349 151.67297796972727 105.3654\nNov\n132.06936975867865 112.83314612360269 127.5614\nDec\n107.51475169747009 261.88184665928799 173.3675\nTable\nD.1.3:\nExport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2012\nJan\n126.35231573885804 117.33197687252505 105.2282\nFeb\n108.1023484984977\n127.65771797577624 122.6699\nMar\n93.768309370385467 117.21700426510201 95.51438\nApr\n108.10340194100867 130.28210535710281 134.6866\nMay\n110.32719321971705 115.3147483959433\n128.6938\nJun\n106.38168785813035 124.41910913212396 133.5029\nJul\n94.779154315137731 153.987754741587\n129.7864\nAug\n75.16601208912077\n116.22525310541593 124.1675\nSep\n96.887055840494696 222.78730770794979 109.3838\nOct\n106.53591596250658 135.05656457237802 140.4233\nNov\n94.534811067340016 127.58033529656144 137.6309\nDec\n80.200752397830257 114.33992886514388 135.3586\n2013\nJan\n120.68217961123273 241.51559889467384 101.0528\nFeb\n118.27869590060624 179.87112643693155 101.2884\nMar\n113.64995351835904 212.89940197098679 109.1639\nApr\n116.32280610618045 225.7464433368867\n131.3547\nMay\n125.85771205733415 219.70059178103162 145.7263\nJun\n107.63543359401099 174.94915252581904 114.5675\nJul\n107.16244628026031 220.97905237614268 120.8353\nAug\n96.847646084376009 254.47923293843604 129.0126\nSep\n131.01365574551861 292.65684338765345 183.2903\nOct\n94.534811067340016 127.58033529656144 137.6309\nNov\n118.27869590060624 179.87112643693155 101.2884\nDec\n93.768309370385467 117.21700426510201 95.51438\n2014\nJan\n106.54\n135.06\n140.4199\nFeb\n80.2\n114.34\n135.3600\nMar\n75.17\n116.23\n124.17\nApr\n155.72798031320846 120.07906556095229 202.1778\nMay\n93.178075656154675 99.81547273076886\n123.3001\nJun\n179.63252030043799 212.3038882363079\n151.1376\nJul\n109.30054664422858 210.05938471921971 123.8120\nAug\n159.51918177455119 199.70583066140372 147.7050\nSep\n167.19335743687228 189.1264755190706\n143.0592\nOct\n204.66664332134982 310.50572745638431 171.8959\nNov\n196.1036509286954\n308.77638147385477 159.3760\nDec\n162.60421951462919 306.45482060202465 163.3853\nTable\nD.1.3:\nExport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2015\nJan\n404.56334418537449 391.63411260936334 168.2347\nFeb\n362.57400524658158 395.33015813199256 181.2923\nMar\n350.19107940779543 346.9692994866565\n193.3351\nApr\n485.2115314590996\n506.27964322324965 186.1218\nMay\n355.72296628641385 574.89944575745574 185.9336\nJun\n432.44875095513811 574.76682406423038 187.4659\nJul\n514.77412515292963 573.83621131680627 180.9234\nAug\n536.86614387917018 605.14830117586223 191.8044\nSep\n577.9252626914415\n656.26157342052977 196.6126\nOct\n647.29863559322314 807.93527793322369 192.8210\nNov\n662.77984706500956 849.90268922621738 194.0083\nDec\n577.95813886433098 812.14190327576534 194.0083\n2016\nJan\n647.29894729027581 1470.0991586711511 194.0083\nFeb\n662.77984706500956 1426.5659051483324 194.0083\nMar\n577.95813886433098 1324.9781445570522 194.0083\nApr\n704.40293768224558 1560.3577025552161 213.5807\nMay\n852.64742606406082 1790.7132544681992 268.7747\nJun\n1031.3038916784335 2548.1489191339997 311.4679\nJul\n683.11767141790278 1154.2765386023557 375.4259\nAug\n1190.295715015254\n1715.2040620494377 376.2421\nSep\n1186.3149226290766 1712.6025604353292 401.1267\nOct\n954.21840379704224 1047.9982888633424 355.7664\nNov\n1035.98689026391\n1043.2364514682204 323.2363\nDec\n965.02190663845226 1035.0703790394921 354.2688\n2017\nJan\n735.30400956502717 1083.5522312178725 403.0416\nFeb\n500.36130239278788 1003.3679448550245 400.1276\nMar\n595.43427472167934 993.19333091018245 396.8117\nApr\n513.61173983942206 992.23228966786758 391.1252\nMay\n529.867071794033\n1017.4402506074689 401.7077\nJun\n528.59398487670376 1008.6829077096189 388.8643\nJul\n510.73493355411171 1006.3341095527574 372.2343\nAug\n470.22896243184874 977.58234552998829 406.4518\nSep\n551.29047400752631 970.62188480383384 394.0976\nSource:\nCentral\nBank of\nNigeria\nand\nNational\nBureau of\nStatistics\nReturn to\nMenu\nTable\nD.1.3.1:\nExport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2018)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2017\nJan\n156.1412431228359\n127.38626030734984 121.6804\nFeb\n106.25133924182946 117.95950995707253 120.8006\nMar\n126.44001208151329 116.76334609605804 119.7995\nApr\n109.06505948260813 116.65036266403463 118.0827\nMay\n112.5168667701391\n119.61390035197824 121.2777\nJun\n112.2465277385421\n118.58435592408077 117.4002\nJul\n108.45417187181206 118.30822284549063 112.3795\nAug\n99.852759935177573 114.92806304278011 122.7099\nSep\n117.06610981794209 114.10976648413207 118.9801\nOct\n97.602535570188877 114.54554895123621 108.6777\nNov\n98.992823352352104 114.08084763951715 102.3955\nDec\n96.448328257256108 97.928843652110814 97.65845\n2018\nJan\n99.999999999999986 99.999999999999986 100\nFeb\n110.77444532731715 107.03585547066159 105.8249\nMar\n107.11995290351678 103.96613737420526 112.5402\nApr\n109.46991432996101 120.65771897866846 100.5881\nMay\n111.04954753975426 115.26670215553557 97.06139\nJun\n111.27554432673971 111.14405310984344 105.4609\nJul\n103.95163208300163 117.33866702837321 104.7447\nAug\n102.9947524936905\n117.31478799567802 97.70692\nSep\n105.50842527972647 111.83145679849297 104.8330\nOct\n106.5\n109.38\n102.43\nNov\n105.60599999999999 105.78\n102.32\nDec\n107\n106.23\n102.85\nSource:\nCentral\nBank of\nNigeria\nand\nNational\nBureau of\nStatistics\nReturn to\nMenu\nTable\nD.1.4:\nImport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nAnimal a\nfats and o\nother cle\nproducts\n2000\nJan\n111.92351552708652 85.783985756326302 89.67554\nFeb\n157.45066956867598 96.54636974130149\n134.5314\nMar\n98.696510527706394 97.879688077962442 135.7002\nApr\n57.705198220734587 99.576695296431382 137.3950\nMay\n100.80605802008996 99.971154702434021 137.7456\nJun\n76.842341190168341 97.990573967743771 135.8756\nJul\n94.737399215041123 92.791499190027579 142.1462\nAug\n75.845783725796409 89.302930000866354 138.6398\nSep\n76.2575791580079\n91.37674232524509\n140.8021\nOct\n80.194342218704733 92.914330989182886 142.1267\nNov\n187.81671861400105 90.605825703952647 139.9644\nDec\n138.128640919725\n93.710546391568073 142.9254\n2001\nJan\n132.53537515797265 88.726169220916006 138.2502\nFeb\n105.17052810091539 105.17052810091539 138.7119\nMar\n137.03866527019076 137.03866527019076 137.7379\nApr\n123.56964484228369 105.50406743972941 139.2963\nMay\n126.0229385287963\n103.11069236423621 137.1535\nJun\n77.254890668213633 100.81598836372652 134.8159\nJul\n145.80597832576299 103.76645718775171 138.2325\nAug\n149.54008974325649 103.25713271488961 137.6481\nSep\n152.60553353137317 99.895421815224836 134.5313\nOct\n148.30334814630265 99.309622733376855 134.1417\nNov\n142.14643471512505 98.986621164629028 133.5573\nDec\n171.53057051483344 91.512895795846163 137.9702\n2002\nJan\n130.52767774429043 92.521736644867403 139.1390\nFeb\n127.32667053646331 88.401921490894054 135.2430\nMar\n111.71786367622894 86.996621257692226 134.0742\nApr\n133.99316621706046 90.071217783125391 136.8014\nMay\n124.20762178479485 96.754082054024494 140.6454\nJun\n142.03284006487289 98.308841812163763 142.3986\nJul\n77.900817952470462 92.827493597765695 137.1390\nAug\n141.17858589980099 95.94955157493817\n140.0610\nSep\n138.51715975229826 94.549741053743261 138.8922\nOct\n116.56699770093546 86.637222941093128 131.4897\nNov\n124.73363168041635 88.700935554062028 133.4377\nDec\n118.95374319451341 97.557114359993221 142.5924\n2003\nJan\n178.91604035100232 102.84130716498237 190.7396\nFeb\n174.27544919369038 81.823656359076764 201.9011\nMar\n167.49778112465637 624.58716757989339 209.0418\nApr\n180.73055966823452 78.346794441383508 211.3756\nMay\n178.59607239826624 149.84911060294661 120.8214\nJun\n150.01831603433854 82.588451715561533 127.2951\nJul\n159.1996389427087\n76.726031910808885 115.3721\nAug\n179.86767944980909 62.240674221261052 133.7455\nSep\n161.24669191415765 126.63029538416593 133.2812\nOct\n179.40337552053461 129.41432782862361 150.2498\nNov\n193.92249592330225 82.126125673564459 148.4295\nDec\n178.72950925173572 127.4339988122165\n149.8744\n2004\nJan\n216.59303980216498 218.81775211134129 291.5774\nFeb\n161.39898466283199 124.9921857154546\n348.6106\nMar\n160.93454437750245 201.65272812993311 194.7293\nApr\n137.0388185787223\n193.7934908127211\n58.07029\nMay\n132.42375784618937 298.44067297669585 108.6746\nJun\n119.69345686112172 220.44857858769225 118.8563\nJul\n127.72240612805888 221.49331076116877 160.7284\nAug\n136.48475163563387 124.02629718057187 169.8608\nSep\n127.0952859787066\n266.5126666378697\n210.6464\nOct\n212.15321169470363 141.09302345430987 221.8913\nNov\n249.61003838145487 149.69875187371971 179.0325\nDec\n272.18117863076492 249.89952611010696 939.8954\nTable\nD.1.4:\nImport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nAnimal a\nfats and o\nother cle\nproducts\n2005\nJan\n292.9050767026597\n172.86742925700005 123.4450\nFeb\n186.0061414867983\n103.20744193550043 68.88808\nMar\n104.75362262771306 248.37089817501717 1479.225\nApr\n118.54013532560349 138.79491232659123 616.3037\nMay\n150.17650856750691 228.04120835245902 203.2184\nJun\n95.622082324972666 143.02297968395507 254.9915\nJul\n105.41290774149014 114.75434362929866 145.7603\nAug\n107.43719688514994 125.6826992316014\n778.3004\nSep\n109.39230905094153 91.764802756857051 869.8902\nOct\n107.32802128807863 206.80116103294674 148.3297\nNov\n100.20643100966362 125.00701579935077 651.4517\nDec\n91.593666702838917 154.65747748419463 196.3613\n2006\nJan\n96.648876613407026 141.86117946483665 145.4000\nFeb\n115.86934497438796 89.565633307456253 158.5240\nMar\n97.665210944852333 248.59517290399103 152.6717\nApr\n96.368832119497384 73.976094217208185 147.0659\nMay\n88.944105546472372 120.16578821431666 138.3372\nJun\n73.334494738842807 65.555228423261141 137.8813\nJul\n72.419708912532528 74.791204805892733 230.4286\nAug\n76.087400054328313 71.615463123019097 422.7299\nSep\n80.698873126021994 47.465186311132513 379.6569\nOct\n72.074069158030412 67.54309074659777\n191.1546\nNov\n69.926417422495646 61.513681235723972 177.7892\nDec\n78.710330139569422 97.483964828749961 133.5485\n2007\nJan\n100\n100\n100\nFeb\n102.82936294520022 104.99584889350064 139.9859\nMar\n111.66646365507947 98.207295057710439 144.2890\nApr\n113.22165342159359 110.36317584255421 141.2443\nMay\n104.27059678901176 110.36780580804569 141.7389\nJun\n107.54523054346987 97.502322694400263 141.0870\nJul\n131.55268558707235 102.3955155662933\n143.7622\nAug\n114.22808538661825 102.14046397168993 144.7352\nSep\n122.85533268861533 100.86735349263267 144.2024\nOct\n112.44733241601179 103.34453871295364 144.2272\nNov\n131.97537522224789 109.39626810533382 144.0034\nDec\n140.90762402384044 110.08134344484979 177.2062\n2008\nJan\n120.09602596968632 97.511748818864405 141.0870\nFeb\n135.81941414962412 102.36371387682262 143.7622\nMar\n115.89260857157618 102.10917453018898 144.7352\nApr\n121.03508218186452 100.82647373958582 144.2024\nMay\n115.58978501194714 103.60354467972341 144.2272\nJun\n133.01340200921317 107.29677002306799 144.0034\nJul\n141.83848264833017 110.1754309629508\n177.2062\nAug\n114.81297105580039 105.05412741373036 137.4415\nSep\n114.19820548441086 98.20130919621279\n144.2890\nOct\n115.74733177835637 110.26685130762473 141.2443\nNov\n115.72819895111869 110.25266679385793 141.2443\nDec\n104.27059678901176 110.36780580804569 141.7389\nTable\nD.1.4:\nImport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nAnimal a\nfats and o\nother cle\nproducts\n2009\nJan\n126.11273269731984 100.77853833963376 144.2024\nFeb\n116.52282998714935 103.31821554934405 144.2272\nMar\n132.75493035125197 109.53521218225077 144.0034\nApr\n144.34405938416469 110.18029185686696 177.2062\nMay\n119.63301416746738 97.477778070839619 141.0870\nJun\n139.00388601177696 102.33701689554579 143.7622\nJul\n113.75846237587504 102.06776221031934 144.7352\nAug\n115.48770928908205 100.72764016203142 144.2024\nSep\n107.84732537574233 103.37142319091414 144.2272\nOct\n123.4724478289788\n107.36103079896691 144.0034\nNov\n129.07843163753247 107.41667013480924 177.2062\nDec\n124.89920022707476 107.41667013480924 144.0034\n2010\nJan\n112.44733241601179 107.41667013480924 144.2272\nFeb\n107.54523054346987 103.34453871295364 141.0870\nMar\n140.90762402384044 110.08134344484979 177.2062\nApr\n147.42639922633836 121.0408241911592\n173.0429\nMay\n172.91742261197712 139.48580102998832 187.2044\nJun\n176.5578257762478\n141.0726535526274\n201.6157\nJul\n100.60688699858983 122.09296196123339 130.8587\nAug\n108.80949805870461 94.513589771857283 150.8518\nSep\n124.03103230738655 147.5489864085344\n182.9338\nOct\n119.59618726353855 183.44759679652913 153.8449\nNov\n133.67290664791389 142.27924941557919 228.4614\nDec\n124.03102176190897 210.06578275641652 184.7886\n2011\nJan\n188.75010575538795 326.48783278383507 174.6571\nFeb\n179.74977007380278 221.25201720043228 179.9984\nMar\n224.23525648952437 195.68745324879907 190.1138\nApr\n278.47990991913457 202.54497350006412 214.2387\nMay\n236.57473029764287 244.58407443099287 181.0099\nJun\n209.74919051107838 210.33466110032447 194.3656\nJul\n214.11411165124346 281.10945230574367 273.2656\nAug\n271.8874356677909\n256.84990780755476 391.3952\nSep\n243.59051156199453 245.14053939489284 354.6555\nOct\n293.64527214534814 311.10540547339127 363.7511\nNov\n248.09717131625604 280.80761628970873 337.3176\nDec\n223.60203916947958 302.84424057955312 257.2119\n2012\nJan\n201.18507289078391 118.38313549772889 222.5562\nFeb\n249.66942707063697 215.02956100309333 182.5619\nMar\n225.76692393954241 199.30239300326085 199.3992\nApr\n238.59757468916928 163.92590036033343 174.0507\nMay\n202.85980659815414 319.79477755238543 151.5081\nJun\n219.41532732018862 233.12352636858247 155.9579\nJul\n198.73318574840206 197.80687741864301 158.8339\nAug\n215.74567694449738 179.65631449957783 177.2683\nSep\n210.04793309267166 275.82230903518911 150.8072\nOct\n169.89955909764657 242.54785265096541 156.4636\nNov\n199.32176746321022 232.25416943220853 168.1905\nDec\n163.65154777659725 213.48027938365416 187.4031\n2013\nJan\n120.57942168241239 164.540211619649\n170.4023\nFeb\n149.23449288545584 144.37576804184752 178.6701\nMar\n135.94076410928346 152.62312233420363 198.8420\nApr\n136.11030292734188 95.844934165825777 197.0832\nMay\n155.30342824372414 150.45592523886467 172.5387\nJun\n137.98534547919436 154.6589074210689\n140.5690\nJul\n144.17539764512034 157.44641918436338 157.4056\nAug\n155.40855492336499 216.58600297571064 145.9021\nSep\n136.28743075441955 182.32941921963965 134.5233\nOct\n199.32176746321022 232.25416943220853 168.1905\nNov\n149.23449288545584 144.37576804184752 178.6701\nDec\n225.76692393954241 199.30239300326085 199.3992\nTable\nD.1.4:\nImport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nAnimal a\nfats and o\nother cle\nproducts\n2014\nJan\n169.9\n242.55\n156.46\nFeb\n163.65\n213.48\n187.4\nMar\n215.75\n179.66\n177.27\nApr\n126.50608804908559 166.94422161318241 139.5970\nMay\n118.98434380574318 201.25601386324846 146.3430\nJun\n137.45193960259928 269.91550760475184 154.9468\nJul\n126.17198135822211 151.64674530067464 150.3440\nAug\n128.76418065809037 183.07827509012523 150.5079\nSep\n133.76728729338976 221.19634675270231 150.3978\nOct\n155.87652636030379 193.75154807010537 148.6670\nNov\n152.77644566440532 203.16350871668399 182.5070\nDec\n191.06148615977978 245.27409473361433 198.0952\n2015\nJan\n300.62860874391981 285.21430862148799 109.5454\nFeb\n301.93182480574467 256.95942203412676 113.8903\nMar\n251.65244783187543 211.86831527320365 119.1565\nApr\n222.61075618685794 261.662838739439\n123.6513\nMay\n279.94275593333936 272.33001645751904 118.8359\nJun\n250.74216228345443 267.66840427699293 122.1726\nJul\n225.05072080576639 256.00428752421755 155.3444\nAug\n244.72713949795786 238.97595727581495 164.4746\nSep\n243.02545029803076 255.22837726913463 171.5648\nOct\n195.77866209425764 254.98017906455274 157.4320\nNov\n229.30417411554112 247.23337901476552 165.1099\nDec\n254.13950808119031 274.55857132947244 172.0465\n2016\nJan\n196.42674270876364 315.06613600750813 150.7657\nFeb\n231.88548546627146 308.91170652504019 158.7548\nMar\n255.60984744485972 327.00006158694578 168.7050\nApr\n455.44492233285979 408.42361485487191 169.2852\nMay\n463.19709436068797 429.29058393814847 166.4631\nJun\n519.48094924780537 545.5158075578031\n168.8632\nJul\n432.63694086550089 335.10573386891679 174.9043\nAug\n525.68358901575664 376.67289702195916 181.9690\nSep\n529.64633875148286 407.23261277669275 176.8002\nOct\n373.06063296088161 364.02891406132204 176.4149\nNov\n422.93220537898617 307.92025832209259 181.3106\nDec\n465.11352295578064 515.14993047021289 176.3103\n2017\nJan\n509.83698381906584 530.99511715414758 350.0467\nFeb\n481.57043757849488 544.02248051175638 268.8047\nMar\n520.05267806348729 560.22284138492046 395.2358\nApr\n415.07636343282604 531.05768842063651 341.9450\nMay\n419.686548536727\n422.33826931670581 328.0523\nJun\n425.36799504350978 518.99120654109242 347.6092\nJul\n408.31593284124182 531.18512274606724 456.8786\nAug\n408.12903204050451 437.3091011390369\n580.9801\nSep\n402.87209265950963 478.62693563216379 516.8128\nSource:\nCentral\nBank of\nNigeria\nand\nNational\nBureau of\nStatistics\nReturn to\nMenu\nTable\nD.1.4.1:\nImport\nCommodity\nPrice Index\n(Base\nPeriod:\nJanuary\n2018)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nAnimal a\nfats and o\nother cle\nproducts\n2017\nJan\n123.92163624828227 105.90290748838261\nFeb\n116.77626580940078 108.50111529088088\nMar\n125.18920947765582 111.73215313549264\nApr\n102.41612036022667 105.91538684804588\nMay\n103.55363941474266 84.232131745321738\nJun\n104.95548196835514 103.50881949381419\nJul\n100.74804880966077 105.94080264781681\nAug\n100.70193282573572 87.217949441728564\nSep\n99.404833342841371 95.458474942974675\nOct\n100.50434531974111 96.367049571676205\nNov\n98.394168727318885 97.989147896112101\nDec\n99.163244026541562 95.904530032449657\n2018\nJan\n100.00000000000001 100.00000000000006 99.99999\nFeb\n104.83274560853756 105.08334059078281 105.6546\nMar\n101.8548460025566\n109.96689635604554 104.0983\nApr\n100.2444410944296\n114.05667742950271 98.25886\nMay\n107.52377467817108 113.50720444409212 100.5870\nJun\n103.98022315217821 101.21546473120893 101.0427\nJul\n101.22328547373687 105.66163264540342 101.5460\nAug\n101.69143281315164 103.44968685792537 101.6688\nSep\n103.86878158430068 101.75754978600128 105.3057\nOct\n101.95\n104.72\n102.39\nNov\n105\n103.35\n103.72\nDec\n105\n102.45\n101.33\nSource:\nCentral\nBank of\nNigeria\nand\nNational\nBureau of\nStatistics\nReturn to\nMenu\nTable\nD.1.5:\nCommodity\nTerms of\nTrade\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2000\nJan\n59.455850290656024 478.95674392756831 124.0152\nFeb\n65.79169151519136\n108.39861737913405 121.0109\nMar\n102.95734018305795 167.22993099274311 91.39854\nApr\n178.17066994365763 166.31863644110356 88.44076\nMay\n97.756682364794869 200.33476824226963 110.0122\nJun\n128.73567866842853 205.16967172908224 123.7151\nJul\n87.518929473110362 128.39522893668067 96.27186\nAug\n135.21438461873254 114.83879613255186 100.8168\nSep\n130.87557014324423 175.93546959315913 92.46353\nOct\n81.993950293509727 216.20703483580007 110.5321\nNov\n51.068304194820243 215.14314490949843 115.1440\nDec\n79.875013012003777 152.28915932248481 158.6782\n2001\nJan\n75.556919726164779 126.52752205959179 128.2594\nFeb\n72.902850960735151 109.30261363351197 129.3804\nMar\n75.250566597229877 76.024557563583215 109.3495\nApr\n80.969977645135344 152.76156162921691 80.20671\nMay\n72.877095719869601 143.29076187098681 79.37448\nJun\n84.5170260536824\n399.87785443446035 112.6362\nJul\n75.2228105883474\n126.82105868697342 93.19544\nAug\n64.236316934970731 189.06718491980047 115.1894\nSep\n66.917585234471204 103.27830088254252 110.2570\nOct\n74.477117913300461 143.86172541463424 107.3299\nNov\n58.740440169027316 121.20680233149224 96.31494\nDec\n58.514939368649365 122.95796617877015 117.5170\n2002\nJan\n78.941343608827097 173.55637369101683 88.53581\nFeb\n78.746897345461846 182.7000238532415\n82.35770\nMar\n68.940851862184147 132.73422436246014 126.4822\nApr\n75.009425324153739 179.74628690272218 78.70855\nMay\n80.837869358150783 167.16343329592473 70.82440\nJun\n64.890438765204124 150.81972278344639 73.00184\nJul\n84.399529422429808 216.47247172666329 109.5944\nAug\n78.300160293905591 138.23308657596712 106.3278\nSep\n73.701524940331922 206.31364534589491 112.1933\nOct\n87.579899160995751 119.04732899826919 108.5237\nNov\n80.524733065972896 126.94492352520841 120.2625\nDec\n70.067021935624112 122.76270482867169 86.69283\n2003\nJan\n61.764958660257939 138.99098215541741 86.59782\nFeb\n59.2317447471126\n196.60251620419857 54.67108\nMar\n39.60980373625663\n65.585112485792834 71.59102\nApr\n57.276866216875277 133.48539070872704 77.63840\nMay\n58.954777444914598 109.49995895006639 64.49207\nJun\n68.706147088539254 201.03331359659785 46.55531\nJul\n62.111568917147089 261.92068015363918 83.99449\nAug\n54.011899914359809 157.69300325265999 77.88170\nSep\n67.152999949497584 110.60668881937556 103.9293\nOct\n53.591388034368173 115.77651497314829 68.07536\nNov\n47.777957689957518 181.72802758295884 47.11240\nDec\n54.476832692339727 159.05056622549628 93.39577\n2004\nJan\n16.271868947562986 60.886495581075415 84.00532\nFeb\n68.597819953868068 114.5692946507457\n137.8622\nMar\n68.944657851676666 71.727153343232104 137.4792\nApr\n48.382535604386199 51.295477799038736 114.5296\nMay\n77.092857582290122 34.559397953676665 106.1658\nJun\n50.066640720389699 83.049791241422909 97.11635\nJul\n61.451850938550002 50.918437439856476 90.44218\nAug\n47.381065684825394 321.93022760650081 107.9535\nSep\n83.839677301929243 48.429372266391283 100.3972\nOct\n45.323346378698012 138.50378516626594 109.6808\nNov\n40.518487479489821 68.25606066679596\n103.4199\nDec\n39.055621227700563 51.038709409467586 103.0015\nTable\nD.1.5:\nCommodity\nTerms of\nTrade\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2005\nJan\n33.59926451761072\n58.127192018083598 99.47641\nFeb\n42.561288150147085 113.22120056088691 92.86542\nMar\n84.064907201929458 40.819481193203053 110.3526\nApr\n81.702460316667242 111.00035681357339 88.09801\nMay\n63.387842807598894 84.838423946346865 108.6125\nJun\n103.30238673131265 70.044371450887837 100.0621\nJul\n92.240195657696191 175.92894842317682 96.28090\nAug\n90.37835292308138\n159.99634364051283 115.0031\nSep\n83.979608790354135 164.93568534979212 76.67168\nOct\n84.838331584816757 70.832652482898823 75.12320\nNov\n100.19995126018964 129.38269454817552 79.89914\nDec\n98.318979922630646 94.507605116716448 73.89623\n2006\nJan\n95.777917782544534 113.66365532563154 73.44177\nFeb\n57.807940859343489 115.53434636560344 104.2785\nMar\n98.982120390508513 81.388812441987852 91.21552\nApr\n103.22574768908007 176.18603953663541 89.07934\nMay\n111.84265318471228 88.928881942008701 67.58844\nJun\n149.25306282130256 206.38099355835223 112.1582\nJul\n120.96545047111998 131.31014182097218 90.13700\nAug\n134.21734797163515 148.8072392913441\n108.2879\nSep\n111.78421187115306 305.74121390246091 47.76900\nOct\n136.78416942270374 152.32619637546392 101.1124\nNov\n140.0431399467499\n160.83313491267435 105.6084\nDec\n138.94594350595608 145.11329405076341 147.2979\n2007\nJan\n100\n100\n100\nFeb\n89.9897402501188\n141.78139667958274 81.58906\nMar\n99.162540524352295 135.28515211647664 112.9589\nApr\n90.321156096739813 93.613593873839733 108.5166\nMay\n80.077839451005389 108.70897989789981 93.84924\nJun\n96.128355384041726 165.23609525014123 88.18924\nJul\n76.554059954930409 158.42892813381278 80.35313\nAug\n57.650698431711945 196.9729682062472\n100.8843\nSep\n78.267014617283976 193.74036103965531 107.1080\nOct\n98.461901911403515 138.57746905771194 148.3137\nNov\n76.220516329947756 103.08440360367439 127.6420\nDec\n54.714103497214325 105.0040603712137\n140.0600\n2008\nJan\n86.428382687084351 107.5405379536442\n104.8877\nFeb\n74.149135767662386 158.47814779754779 81.74341\nMar\n79.846228120826794 145.78962341212252 74.92634\nApr\n54.408430880897875 403.26401354271911 110.4177\nMay\n95.796788844822515 128.23874792992777 118.8115\nJun\n72.289859323236655 182.13108818257803 124.9671\nJul\n72.098279968050122 93.773116489340069 116.6526\nAug\n96.43316528376684\n136.32234133340765 146.7601\nSep\n73.116421345787472 122.17730782987219 98.00890\nOct\n86.906808889043489 102.27052754635262 120.9378\nNov\n89.331262693442596 146.1271055689281\n92.75655\nDec\n96.584200050595044 146.98499855194541 82.12203\n2009\nJan\n61.132878175676986 114.6969208252691\n134.1100\nFeb\n86.428489427998855 157.01405304594405 89.34914\nMar\n75.860777095197889 148.10225363771823 90.21598\nApr\n64.107852453392525 135.10998973407737 84.37061\nMay\n55.046083632377155 206.47577592970592 105.2648\nJun\n79.660580327011658 129.82583676824305 108.7186\nJul\n84.525756752759378 191.46180007855048 109.5155\nAug\n88.548908755518113 102.56860485694585 109.6686\nSep\n93.272885602232179 109.09252002150245 128.7868\nOct\n67.624512641850501 111.75350584541519 103.0806\nNov\n85.775586781494241 133.32404176935043 150.9556\nDec\n82.771916255235894 149.9851285617265\n101.0581\nTable\nD.1.5:\nCommodity\nTerms of\nTrade\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2010\nJan\n59.149310607738713 382.30830749791545 116.5343\nFeb\n96.514789537882706 101.47092488271845 104.7005\nMar\n74.835617571609063 149.28161873016822 99.87322\nApr\n70.019104708027612 137.37490786611329 70.15602\nMay\n57.275811617641338 144.30386217542724 99.01242\nJun\n59.730932395166455 116.49858452135726 68.73132\nJul\n112.84620679633723 245.54405065824142 119.6005\nAug\n97.92909814341003\n282.99415878167315 44.48184\nSep\n88.158695117627801 259.03584872224474 109.5557\nOct\n101.55047102273826 205.62787899442731 83.45543\nNov\n105.89958326450424 243.17845976229049 65.82961\nDec\n108.637201779441\n181.81706170399474 111.0671\n2011\nJan\n94.076973165596542 53.489894106587855 54.52939\nFeb\n98.064974146421676 87.154294881244653 77.61971\nMar\n93.349036977126204 98.819897274437082 86.17675\nApr\n26.782873032564382 74.221505450089751 56.40992\nMay\n91.479274000549765 76.900730151774326 59.87150\nJun\n214.59132083958127 119.16636297351641 221.1222\nJul\n56.293152112985126 81.356705060068137 44.51859\nAug\n48.375671788496696 77.020636678342314 57.00579\nSep\n45.35734738627783\n43.134875839494654 74.73180\nOct\n39.818236126093126 48.752922739781773 33.86807\nNov\n53.232920415012039 40.181654477346129 45.42663\nDec\n48.083081932888405 86.474105024458979 57.24643\n2012\nJan\n62.80402115491448\n106.73168539388959 80.08749\nFeb\n43.298192240379187 59.367520158746821 93.47205\nMar\n41.533236017998568 58.813646187973355 70.81742\nApr\n45.307837718735975 79.476217651221333 107.5091\nMay\n54.385930396879779 36.058984226862066 99.96039\nJun\n48.484164327722453 53.370464607424381 102.6726\nJul\n47.691659527427369 77.847523175689886 104.3707\nAug\n34.840101156908901 64.693107742499663 78.02509\nSep\n46.126164830076576 80.772040697957763 75.87859\nOct\n62.70523392075259\n55.682440844664583 91.62629\nNov\n47.428242419528395 54.931343367680732 96.14107\nDec\n49.007023451628633 53.559949047873836 92.03396\n2013\nJan\n100.08522012080219 146.78211272327829 89.34251\nFeb\n79.256942288396047 124.58539883562429 87.70171\nMar\n83.602556056691924 139.49354377955544 92.49456\nApr\n85.462160912444403 235.53299431174136 115.0013\nMay\n81.039880111223567 146.02322336739729 77.90610\nJun\n78.004974528429486 113.11935112117962 87.13210\nJul\n74.32783126011185\n140.3519073478484\n85.05319\nAug\n62.318091904357189 117.49569660185981 107.4304\nSep\n96.13040250321842\n160.50994109464582 122.1663\nOct\n47.428242419528395 54.931343367680732 96.14107\nNov\n79.256942288396047 124.58539883562429 87.70171\nDec\n41.533236017998568 58.813646187973355 70.81742\n2014\nJan\n62.71\n55.68\n91.63\nFeb\n49.01\n53.56\n92.03\nMar\n34.840000000000003 64.69\n78.03\nApr\n103.70110687004575 67.139482906967601 127.9225\nMay\n52.972768642957583 41.002489781947617 76.78079\nJun\n110.29934995220898 106.02405805390079 107.7594\nJul\n65.48181391633581\n133.57049177262999 86.73175\nAug\n69.267659810214326 147.90473110403423 86.46581\nSep\n110.49541950090054 162.8096359302362\n98.49034\nOct\n131.30049026642357 160.25974014103548 146.2665\nNov\n128.35987254178193 151.98417443383016 132.9935\nDec\n85.105702244275179 124.94381884677104 129.1314\nTable\nD.1.5:\nCommodity\nTerms of\nTrade\n(Base\nPeriod:\nJanuary\n2007)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2015\nJan\n134.57246995743773 137.31222479763684 132.9641\nFeb\n120.08472623906161 153.84925565387081 138.7491\nMar\n139.15663544101582 163.76648817886738 141.3873\nApr\n217.96410010476598 193.48549670341129 116.5660\nMay\n127.06989509352387 211.10395880548657 115.3998\nJun\n172.467504873102\n214.73091888329145 111.4456\nJul\n228.73693686020835 224.15101593270089 105.0764\nAug\n219.37335801027905 253.22559979430409 111.9661\nSep\n237.80442006494019 257.12719739173497 115.3828\nOct\n330.62777560589376 316.86199331151954 100.9156\nNov\n289.03959102421311 343.76534940917452 102.8762\nDec\n227.41766647304985 295.79914381954904 104.3177\n2016\nJan\n329.53707746913443 466.60018029869076 104.5005\nFeb\n285.82204950529911 461.803769496413\n105.6209\nMar\n226.10949642267144 405.19201682313894 110.5839\nApr\n154.66259544056044 382.04394795087183 85.21510\nMay\n184.07875102085828 417.13313113948993 100.8186\nJun\n198.52583490727315 467.10817245456201 101.1480\nJul\n157.89628829459386 344.45144381023147 123.6321\nAug\n226.42816703558469 455.35637833519127 113.2403\nSep\n223.98246449235089 420.54651486727562 121.7956\nOct\n255.78104991236094 287.8887495971826\n108.3416\nNov\n244.95341737704047 338.80084965925425 106.4979\nDec\n207.48093938567317 200.92604459729074 112.0658\n2017\nJan\n144.22335626910433 204.06067705954402 105.3842\nFeb\n103.90199716344301 184.43501524259926 121.9644\nMar\n114.49499249554668 177.28540458202679 112.7970\nApr\n123.73909600432897 186.8407729146644\n107.5534\nMay\n126.25305091179591 240.90647817768652 116.4079\nJun\n124.26745571740423 194.35452759058529 107.5356\nJul\n125.08327314101936 189.45073317383455 106.4958\nAug\n115.21575911443153 223.54493491759695 110.1547\nSep\n136.8400750640858\n202.79299231704334 109.4937\nSource:\nCentral\nBank of\nNigeria\nand\nNational\nBureau of\nStatistics\nReturn to\nMenu\nTable\nD.1.5.1:\nCommodity\nTerms of\nTrade\n(Base\nPeriod:\nJanuary\n2018)\nYear\nMonth Live animals, animal\nproducts\nVegetable products\nPrepared\nbeverage\nvinegar, \n2017\nJan\n125.9999850308628\n120.28589519256015 100.2934\nFeb\n90.987101278996334 108.71732483194722 116.0725\nMar\n100.99912972457959 104.50290522412497 107.3481\nApr\n106.4920825930481\n110.13542615048931 102.3577\nMay\n108.65563721956484 142.00507321081972 110.7845\nJun\n106.94679842677037 114.56449460441146 102.3408\nJul\n107.64890551549058 111.67389701471993 101.3512\nAug\n99.156746184775173 131.77111337565327 104.8333\nSep\n117.76701985323794 119.53864395204236 104.2043\nOct\n97.112751950852953 118.86381233041605 100.2317\nNov\n100.60842490238653 116.42192027270757 96.17805\nDec\n97.26217531915475\n102.1107591257433\n95.55872\n2018\nJan\n99.999999999999972 99.999999999999929 100\nFeb\n105.66778985353189 101.85806319907766 100.1611\nMar\n105.16922572425078 94.543122357103442 108.1094\nApr\n109.20297737691118 105.78750994499711 102.3705\nMay\n103.27906351142913 97.834800957019084 96.49490\nJun\n107.01606608776417 109.80935907867557 104.3725\nJul\n102.69537448473025 111.05134767523184 103.1499\nAug\n101.28164157440243 113.40274829134529 96.10312\nSep\n101.57857218542132 109.89991114534241 99.55115\nOct\n104.46297204512017 104.44996180290298 100.0390\nNov\n100.57714285714286 102.3512336719884\n98.65021\nDec\n101.9047619047619\n103.68960468521229 101.5000\nSource:\nCentral\nBank of\nNigeria\nand\nNational\nBureau of\nStatistics\nReturn to\nMenu\nTable D.2.1.1:\nBalance of\nPayments -\nAnalytical\nStatement (₦'\nMillion)\n1 9 8 1\nCategory\nOil\nNon-Oil\nTotal*\n(A) CURRENT\nACCOUNT\n10067.200000000001 -14065.600000000002 -3998.4\nMerchandise\n10498.7\n-11202.2\n-703.5\nExports\n(F.O.B.)\n10680.5\n342.8\n11023.3\nImports\n(F.O.B.)\n-181.8\n-11545\n-11726.8\nServices and\nIncome\n-424.7\n-2523.6999999999998 -2948.4\nInvestment\nIncome(Credit)\n-\n431.2\n431.2\nInterest on\nReserves\n-\n-\n-\nOthers\n-\n-\n-\nInvestment\nIncome(Debit)\n-220.9\n-611.5\n-832.4\nInterest on\nLoans\n-\n-\n-\nOthers\n-\n-\n-\nNon-factor\nservices (Net)\n-203.8\n-2343.4\n-2547.19999\nOther Services -\n-\n-\nUnrequited\nTransfers (Net)\n-6.8\n-339.7\n-346.5\n(B) CAPITAL\n149\n780.5\n929.5\nDirect\nInvestment\n141.9\n192.8\n334.7\nPortfolio\nInvestment\n-\n-\n-\nOther Capital\nLong-term\n-\n498.4\n498.4\nOfficial(of\nwhich)\n-\n-480\n-480\nAmortisation\n0\n-\n-\nDisbursement\n-\n-\n-\nOther Official\n-\n-18.399999999999999 -18.3999999\nPrivate (Net)\n-\n-\n-\nOther Capital\nShort-\nterm(Net)\n7.1\n89.3\n96.4\nTotal (A & B)\n10216.200000000001 -13285.100000000002 -3068.9\n(C) NET\nERRORS AND\nOMISSIONS\n0\n0\n48.1\nTOTAL ( A and\nB and C )\n10216.200000000001 -13285.100000000002 -3020.8\n(D)\nEXCEPTIONAL\nFINANCING\n0\n0\n3020.8\n(i) Promissory\nNotes(arrears)\n-\n-\n-\n(ii) Deferred/\nResch. Debt\nService\n-\n-\n-\n(iii) Change in\nReserves**\n-\n-\n3020.8\n(iv) Others\n-\n-\n-\nSource:\nCentral Bank\nof Nigeria\nNotes: Time\nReference\nPeriod refers\nto the Balance\nof Payments\nyear: January -\nDecember\n*Total indicate\nthe net\npositions as in\n1970-1993\n**Minus (-)\nsign indicates\nincrease in\nreserves while\nplus (+) sign\nindicates\ndecrease in\nreserves\nExternal\nreserves\nreported were\nconverted into\nraira using the\ncentral\nexchange rate\nas against\nthe table on\nNigeria's\nexternal\nreserves\nposition which\nused the end-\nperiod\nexchange rate\nThe data in\nthis edition of\nthe Statistical\nBulletin\nfeatures the\nlatest revisions\nto the BOP\ntables for the\nvarious years\nReturn to\nMenu\nTable\nD.2.1.2:\nBalance of\nPayments -\nAnalytical\nStatement (₦'\nBillion)\nCategory\n1994\n1995\n1996\n(A)\nCURRENT\nACCOUNT\n-52.304299999999969\n-186.08479999999997 376.024000\nGoods\n61.335900000000024\n247.17770000000007 678.557200\nExport\n(F.O.B)\n206.0592\n825.66960000000006 1128.24660\nOil\n200.71020000000001\n805.56680000000006 1108.18710\nNon-oil\n5.3490000000000002\n20.102799999999998 20.0595\nImports\n-144.72329999999999\n-578.49189999999999 -449.68940\nOil\n-42.349599999999995\n-135.37090000000001 -139.4872\nNon-oil\n-102.3737\n-443.12099999999998 -310.2022\nServices (net) -58.225199999999994\n-282.27590000000004 -285.959\nServices\n(credit)\n-36.030500000000004\n-119.8158\n-188.13420\nServices\n(debit)\n-22.194700000000001\n-162.46010000000001 -97.824799\nIncome (net)\n-66.367399999999989\n-202.5351\n-211.09220\nInvestment\nincome\n(credit)\n1.0680000000000001\n7.0888\n8.02519999\nInterest on\nreserves and\ninvestments\n1.0680000000000001\n7.0888\n8.02519999\nOthers\n0\n0\n0\nInvestment\nincome\n(debit)\n-67.435399999999987\n-209.62389999999999 -219.11740\nInterest due\non loans\n-36.352800000000002\n-106.2709\n-107.4983\nOthers\n-31.082599999999999\n-103.35299999999999 -111.6191\nCurrent\nTransfers\n(net)\n10.952399999999999\n51.548499999999997 194.518\nGeneral\nGovernment\n0\n0\n-4.8751999\nOther sectors 0\n0\n199.393200\n(B) CAPITAL\nAND\nFINANCIAL\nACCOUNT\n11.252800000000002\n-3.2540000000000071 -423.46269\nCapital\nAccount (net)\n30.698799999999999\n34.627400000000002 0\nCapital\nTransfers\n(net)\n30.698799999999999\n34.627400000000002 0\nAcquisation/\nDisposal of\nnon-financial\nassets\n0\n0\n0\nFinancial\nAccount (net)\n-19.445999999999998\n-37.881400000000006 -423.46269\nDirect\nInvestment\n22.229200000000002\n75.940600000000003 111.290899\nPortfolio\nInvestment\n-0.20349999999999999 -5.7850000000000001 -12.055200\nOther\nInvestment\n-41.471699999999998\n-108.03700000000002 -522.69839\nOfficial (of\nwhich)\n-41.471699999999998\n-108.03700000000002 -212.2587\nAmortisation\n(due)\n-51.355699999999999\n-188.20670000000001 -260.66820\nDisbursement 9.8840000000000003\n80.169699999999992 48.4095000\nPrivate (Net)\n0\n0\n-310.43970\n(C) NET\nERROR AND\nOMISSIONS\n-1.5717999999999999\n-5.8775000000000004 -5.7133000\nOVERALL\nBALANCE\n=Total (A &\nB & C)\n-42.623299999999965\n-195.21629999999996 -53.151999\n0\n0\n0\n(D)\nFINANCING\n42.623299999999993\n195.21630000000002 53.1520000\na.\nExceptional\nFinancing\n49.818199999999997\n179.8912\n237.102499\nPromissory\nnotes\n(arrears)\n0\n0\n0\nDeferred debt\nservice\n49.818199999999997\n179.8912\n237.102499\nOthers\n0\n0\n0\nb. Change in\nReserves*\n-7.1948999999999996\n15.325100000000001 -183.95050\nMemorandum\nItems\n1994\n1995\n1996\nCurrent\nAccount\nBalance as %\nof G.D.P\n-5.7\n-8.5\n13.3\nCapital\nAccount\nBalance as %\nof G.D.P\n1.2\n-10.199999999999999 -15\nOverall\nBalance as %\nof G.D.P\n-4.7\n-1.9\n-1.9\nExternal\nReserves -\nStock (US$'\nbillion)\n1.6588000000000001\n1.4410000000000001 4.0747\nNumber of\nMonths of\nImport\nEquivalent\n3\n2.1\n7.6\nExternal Debt\nStock ( US$'\nbillion)\n29.42886\n32.584800000000001 28.06\nDebt Service\nDue as % of\nExports of\nGoods and\nNon Factor\nServices\n40\n33.9\n31.3\nAverage\nExchange\nRate (N/$)\n21.886099999999999\n70.363200000000006 69.8448000\nSource:\nCentral Bank\nof Nigeria\nNotes:\n*Minus (-)\nsign indicates\nincrease in\nreserves\nwhile plus\n(+) sign\nindicates\ndecrease in\nreserves\nExternal\nreserves\nreported\nwere\nconverted\ninto raira\nusing the\ncentral\nexchange rate\nas against\nthe table on\nNigeria's\nexternal\nreserves\nposition\nwhich used\nthe end-\nperiod\nexchange rate\nData in this\nedition of the\nStatistical\nBulletin\nfeatures the\nlast revisions\nto the BOP\ntables for the\nvarious years\nReturn to Menu\nTable D.2.1.3A:\nBalance of\nPayments (₦'\nBillion)\nCategory\n2005\n2006\n2\nCURRENT\nACCOUNT\n4891.7444499999992\n4698.0470769410595\n3\nGoods\n3832.9957899999999\n4495.9280454720001\n4\nCredit\n7246.5347999999994\n7324.680627576\n8\nDebit\n-3413.53901\n-2828.7525821039999\n-\nExports fob\n7246.5347999999994\n7324.680627576\n8\nCrude oil & gas\n7140.5789199999999\n7191.0856408320005\n8\nCrude oil\n6743.6405599999998\n6538.465485396001\n7\nGas\n396.93835999999999\n652.620155436\n8\nNon-oil\n105.95588000000001\n133.59498674399998\n1\nElectricity\n0\n0\n0\nOther Non-oil\n0\n0\n0\nImports fob\n-3413.53901\n-2828.7525821039999\n-\nCrude oil & gas\n-724.81681999999989\n-646.72153358399999\n-\nNon-oil\n-1821.4161899999999\n-1835.8000522560001\n-\nTrading Partner\nAdjustment\n-867.30600000000004\n-346.230996264\n-\nServices(net)\n-634.17220999999984\n-1495.5836488809409\n-\nCredit\n235.32062000000002\n295.722930942\n1\nDebit\n-869.4928299999998\n-1791.3065798229406\n-\nTransportation(net) -192.16610999999997\n-189.30674332800007\n-\nCredit\n175.58084000000002\n235.02042512999998\n1\nDebit\n-367.74695000000003\n-424.32716845800007\n-\nOf which:\nPassenger\n-23.122909999999997\n-29.864163941999994\n-\nCredit\n11.115969999999999\n3.2362088759999996\n1\nDebit\n-34.238879999999995\n-33.100372817999997\n-\nOf which: Freight\n-319.58386999999999\n-340.06077768600005\n-\nCredit\n9.4851700000000001\n47.900481732000003\n4\nDebit\n-329.06903999999997\n-387.961259418\n-\nOf which: Other\n150.54067000000001\n180.61819829999999\n3\nCredit\n154.97970000000001\n183.883734522\n4\nDebit\n-4.4390299999999998\n-3.2655362219999997\n-\nTravel\n-24.302959999999999\n-398.15442480599995\n-\nCredit\n7.1526499999999995\n23.696495568\n2\nDebit\n-31.45561\n-421.850920374\n-\nBusiness travel\n-11.62453\n-31.039807986\n-\nCredit\n0\n0\n0\nDebit\n-11.62453\n-31.039807986\n-\nPersonal travel\n-0.27464999999999995\n-367.11461681999998\n-\nCredit\n0\n23.696495568\n2\nDebit\n-0.27464999999999995\n-390.81111238800003\n-\nEducation related\nexpenditure\n-11.084430000000001\n-136.82992051799999\n-\nCredit\n0\n0\n0\nDebit\n-11.084430000000001\n-136.82992051799999\n-\nHealth related\nexpenditure\n0\n-127.92843345599999\n-\nCredit\n0\n0\n0\nDebit\n0\n-127.92843345599999\n-\nOther Personal\nTravels\n-1.3193500000000005\n-102.35626284599999\n-\nCredit\n7.1526499999999995\n23.696495568\n2\nDebit\n-8.4719999999999995\n-126.05275841400001\n-\nInsurance services\n-0.46650999999999998\n-35.251469891999996\n-\nCredit\n7.4900000000000008E-2 8.6706935999999998E-2 0\nDebit\n-0.54140999999999995\n-35.338176827999995\n-\nCommunication\nservices\n-18.22118\n-20.800514508047993\n-\nCredit\n2.6539600000000001\n3.0296423520000002\n3\nDebit\n-20.875139999999998\n-23.830156860047992\n-\nConstruction\nservices\n-5.9739700000000004\n-6.8196239462735999\n-\nCredit\n0\n0\n0\nDebit\n-5.9739700000000004\n-6.8196239462735999\n-\nFinancial services\n-1.9271299999999998\n-2.4035672699999999\n0\nCredit\n1.4369700000000001\n1.5492489300000001\n1\nDebit\n-3.3641000000000001\n-3.9528161999999996\n-\nComputer &\ninformation\nservices\n-19.778790000000001\n-22.578611604436801\n-\nCredit\n0\n0\n0\nDebit\n-19.778790000000001\n-22.578611604436801\n-\nRoyalties and\nlicense fees\n-8.8609799999999996\n-10.842192306000001\n-\nCredit\n0\n0\n0\nDebit\n-8.8609799999999996\n-10.842192306000001\n-\nOther business\nservices\n-378.18155000000002\n-607.80414544200005\n-\nCredit\n1.18598\n1.2113469000000001\n1\nDebit\n-379.36752999999999\n-609.01549234200002\n-\nOperational leasing\nservices\n-3.7780399999999998\n-124.633569888\n-\nCredit\n0\n0\n0\nDebit\n-3.7780399999999998\n-124.633569888\n-\nMisc. business,\nprofessional, and\ntechnical services\n-374.40350999999998\n-483.17057555399998\n-\nCredit\n1.18598\n1.2113469000000001\n1\nDebit\n-375.58949000000001\n-484.38192245400001\n-\nPersonal, cultural\n& recreational\nservices\n-3.857E-2\n-4.4030802182399992E-2 -\nCredit\n0\n0\n0\nDebit\n-3.857E-2\n-4.4030802182399992E-2 -\nGovernment\nServices n.i.e\n15.74554\n-201.578324976\n-\nCredit\n47.235320000000002\n31.129065125999997\n4\nDebit\n-31.48978\n-232.70739010200001\n-\nIncome(net)\n-296.21128000000004\n-591.99925615200004\n-\nCredit\n116.90101999999999\n241.24037268600003\n3\nDebit\n-413.1123\n-833.23962883800004\n-\nCompensation of\nemployees\n13.31709\n16.152992135999998\n2\nCredit\n20.364609999999999\n24.701275944000002\n2\nDebit\n-7.0475200000000005\n-8.5482838080000008\n-\nInvestment income -309.52837\n-608.15224828800001\n-\nCredit\n96.536409999999989\n216.539096742\n2\nDebit\n-406.06477999999998\n-824.69134503000009\n-\nDirect investment\n-341.71724999999998\n-740.20818691800002\n-\nCredit\n5.9130000000000002E-2 1.8820505520000002\n2\nDebit\n-341.77638000000002\n-742.09023747000003\n-\nIncome on equity\n-335.86293000000001\n-733.56363039600001\n-\nCredit\n0\n1.7685664740000002\n2\nDebit\n-335.86293000000001\n-735.33219686999996\n-\nDividends and\ndistributed branch\nprofits\n-104.34873999999999\n-498.41824526999994\n-\nCredit\n0.65704999999999991\n1.0200815999999999\n1\nDebit\n-105.00578999999999\n-499.43832686999997\n-\nReinvested\nearnings and\nundistributed\nbranch profit\n-230.74281999999999\n-235.14538512600001\n-\nCredit\n0.11433\n0.74848487399999997\n0\nDebit\n-230.85714999999999\n-235.89386999999999\n-\nIncome on Direct\nInvestment Loans\n(interest)\n-5.8543199999999995\n-6.6445565220000002\n-\nCredit\n5.9130000000000002E-2 0.113484078\n0\nDebit\n-5.9134500000000001\n-6.7580406000000002\n-\nPortfolio\ninvestment\n-33.903779999999998\n-54.956896199999996\n-\nCredit\n6.1762700000000006\n6.8855507999999999\n6\nDebit\n-40.08005\n-61.842447\n-\nOther investment\n66.092660000000009\n187.01283483\n2\nIncome on debt\n(interest)\n66.092660000000009\n187.01283483\n2\nCredit\n90.301009999999991\n207.77149538999998\n2\nDebit\n-24.208349999999999\n-20.758660559999999\n-\nCurrent\ntransfers(net)\n1989.1321499999999\n2289.7019365019996\n2\nCredit\n2006.3797099999999\n2312.4841839359992\n2\nDebit\n-17.24756\n-22.782247434000002\n-\nGeneral\ngovernment\n7.7965600000000004\n125.49298863599999\n9\nCredit\n15.769200000000001\n131.623679052\n1\nDebit\n-7.9726400000000002\n-6.1306904159999993\n-\nOther sectors\n81.715999999999994\n2164.2089478659996\n2\nCredit\n89.107810000000001\n2180.860504884\n2\nDebit\n-7.3918100000000004\n-16.651557017999998\n-\nWorkers'\nremittances\n1899.6195899999998\n2149.1295916140002\n2\nCredit\n1901.5027\n2153.6472779999999\n2\nDebit\n-1.8831099999999998\n-4.5176863860000003\n-\nOther Transfers\n0\n15.079356251999998\n5\nCredit\n0\n27.213226883999997\n5\nDebit\n0\n-12.133870632000001\n-\nCAPITAL AND\nFINANCIAL\nACCOUNT\n-2496.88015\n-2491.5465777278637\n-\nCapital\naccount(net)\n962.97248000000002\n1357.9836299999999\n0\nCredit\n962.97248000000002\n1357.9836299999999\n0\nDebit\n0\n0\n0\nCapital transfers\n962.97248000000002\n1357.9836299999999\n0\nCredit\n962.97248000000002\n1357.9836299999999\n0\nGeneral\nGovernment\n962.97248000000002\n1357.9836299999999\n0\nDebt Forgiveness\n962.97248000000002\n1357.9836299999999\n0\nOther Sector\n0\n0\n0\nDebit\n0\n0\n0\nAcquisition/\ndisposal of\nnonproduced,\nnonfin assets\n0\n0\n0\nCredit\n0\n0\n0\nDebit\n0\n0\n0\nFinancial\naccount(net)\n-3459.8526299999999\n-3849.5302077278634\n-\nAssets\n-1843.86707\n-2820.7603957802403\n-\nDirect investment\n(Abroad)\n-1.9212100000000001\n-41.119489295999998\n-\nEquity capital\n-1.9212100000000001\n-40.371004421999999\n-\nClaims on direct\ninvestment\nenterprises\n-1.9212100000000001\n-40.371004421999999\n-\nLiabilities to direct\ninvestors\n0\n0\n0\nReinvested\nearnings\n0\n-0.74848487399999997\n-\nOther capital\n0\n0\n0\nClaims on direct\ninvestment\nenterprises\n0\n0\n0\nLiabilities to direct\ninvestors\n0\n0\n0\nPortfolio\ninvestment\n-180.09031999999999\n-194.58581862023999\n-\nEquity securities\n-162.80332999999999\n-175.52431882223999\n-\nDebt securities\n-17.286990000000003\n-19.061499798\n-\nLong-term\n0\n0\n0\nShort-term\n-17.286990000000003\n-19.061499798\n-\nOther investment\n-173.76344\n-797.49724467599992\n-\nTrade credits\n-180.61646999999999\n-598.89118246200007\n-\nLoans -DMBs\n-14.583879999999999\n-16.080311322\n-\nCurrency and\ndeposits\n21.436910000000001\n-182.52575089200002\n-\nMonetary\nauthorities\n0\n0\n0\nGeneral\ngovernment\n0\n15.275721959999998\n-\nBanks\n8.8215499999999984\n-180.97012645199999\n-\nOther sectors\n12.615360000000001\n-16.831346399999997\n-\nOther Assets\n0\n0\n0\nReserve assets*\n-1488.0921000000001\n-1787.5578431880001\n-\nMonetary Gold\n0\n0\n0\nSDRs\n0\n0\n0\nReserve Positions\nin the Fund\n0\n0\n0\nForeign exchange\n-1488.0921000000001\n-1787.5578431880001\n-\nOther Claims\n0\n0\n0\nLiabilities\n-1615.9855600000001\n-1028.7698119476229\n1\nDirect Invesment in\nreporting economy\n654.19315000000006\n624.52073266199989\n7\nEquity capital\n423.33600000000001\n388.62686266200001\n4\nClaims on direct\ninvestors\n0\n0\n0\nLiabilities to direct\ninvestors\n423.33600000000001\n388.62686266200001\n4\nReinvested\nearnings\n230.85714999999999\n235.89386999999999\n2\nOther capital\n0\n0\n4\nClaims on direct\ninvestors\n0\n0\n0\nLiabilities to direct\ninvestors\n0\n0\n4\nPortfolio\nInvestment\n116.03502999999999\n360.29154601800002\n3\nEquity securities\n98.557500000000005\n227.605707\n1\nDebt securities\n17.477529999999998\n132.68583901800002\n1\nLong-term\n17.477529999999998\n129.00206933999999\n1\nShort-term\n0\n3.683769678\n1\nOther investment\nliabilities\n-2386.2137400000001\n-2013.5820906276228\n3\nTrade credits\n0\n0\n0\nShort-term\n0\n0\n0\nLong-term\n0\n0\n0\nLoans\n-2391.00495\n-2026.9997926943624\n2\nGeneral\ngovernment\n-1999.9287899999999\n-2094.9925859999998\n-\nLong-term\n-1999.9287899999999\n-2094.9925859999998\n-\nDrawings\n34.692239999999998\n63.882610199999995\n5\nRepayments\n-2034.62103\n-2158.8751962000001\n-\nshort-term\n0\n0\n0\nMonetary\nauthorities\n0\n0\n0\nBanks\n11.43267\n12.653366505637578\n1\nOther sectors\n-402.50882999999999\n55.339426799999998\n1\nLong-term\n-402.50882999999999\n55.339426799999998\n1\nShort-term\n0\n0\n0\nCurrency &\nDeposits\n4.7912100000000004\n13.417702066739665\n1\nMonetary\nAuthority\n0\n0\n0\nBanks\n4.7912100000000004\n13.417702066739665\n1\nOther Liabilities -\nmonetary authority\nSDR allocation\n0\n0\n0\nNET ERRORS AND\nOMISSIONS\n-2394.8642999999993\n-2206.5004992131962\n-\nMemorandum\nItems:\n2005\n2006\n2\nCurrent Account\nBalance as % of\nGDP\n32.842622896018376\n25.306455505049996\n1\nCapital and\nFinancial Account\nBalance as % of\nGDP\n-16.763772921365604\n-13.420940994291531\n-\nOverall Balance as\n% of GDP\n9.9908831877538695\n9.6288420018971621\n5\nExternal Reserves -\nStock (US$' Billion)\n28.279060000000001\n42.298000000000002\n5\nNumber of Months\nof Imports\nEquivalent\n13.063807131514364\n22.879737763088855\n2\nExternal Debt\nStock (US$' Billion)\n20.476199999999999\n3.5444900000000001\n3\nDebt Service Due\nas % of Exports of\nGoods and Non\nFactor Services\nEffective Central\nExchange Rate (N/\n$)\n131.41\n127.5102\n1\nAverage Exchange\nRate (N/$)\n132.15\n128.65\n1\nEnd-Period\nExchange Rate (N/\n$)\n130.29\n128.27000000000001\n1\nSource: Central\nBank of Nigeria\nNotes: 1Revised\n2Provisional\n*Negative sign\nindicates accretion\nto reserves while\npositive sign\nindicates depletion\nof reserves.\nReturn to Menu\nTable D.2.1.3B:\nBalance of\nPayments (US$'\nMillion)\nCategory\n2005\n2006\n2007\nCURRENT\nACCOUNT\n37225.054790350805\n36844.480496000004\n2788\nGoods\n29168.219998478045\n35259.360000000001\n3807\nCredit\n55144.469979453621\n57443.880000000005\n6660\nDebit\n-25976.249980975572\n-22184.52\n-285\nExports fob\n55144.469979453621\n57443.880000000005\n6660\nCrude oil & gas\n54338.170002282932\n56396.160000000003\n6500\nCrude oil\n51317.560003043909\n51277.98\n5816\nGas\n3020.6099992390227\n5118.18\n6844\nNon-oil\n806.29997717068727\n1047.72\n1597\nElectricity\n0\n0\n0\nOther Non-oil\n0\n0\n0\nImports fob\n-25976.249980975572\n-22184.52\n-285\nCrude oil & gas\n-5515.6899779316636\n-5071.92\n-560\nNon-oil\n-13860.560003043909\n-14397.28\n-184\nTrading Partner\nAdjustment\n-6600\n-2715.32\n-449\nServices(net)\n-4825.9052583517223\n-11729.129504\n-170\nCredit\n1790.7360170458871\n2319.21\n1455\nDebit\n-6616.6412753976092\n-14048.339504\n-185\nTransportation(net) -1462.3400806635721\n-1484.6400000000006\n-418\nCredit\n1336.1299748877561\n1843.1499999999999\n836.\nDebit\n-2798.4700555513282\n-3327.7900000000004\n-502\nOf which:\nPassenger\n-175.96004870253404\n-234.20999999999998\n-958\nCredit\n84.589985541435198\n25.38\n125.\nDebit\n-260.55003424396926\n-259.58999999999997\n-108\nOf which: Freight\n-2431.9600487025341\n-2666.9300000000003\n-347\nCredit\n72.179971082870409\n375.66\n378.\nDebit\n-2504.1400197854045\n-3042.59\n-385\nOf which: Other\n1145.5800167414961\n1416.5\n249.\nCredit\n1179.3600182634505\n1442.11\n333.\nDebit\n-33.78000152195419\n-25.61\n-83.7\nTravel\n-184.9399589072369\n-3122.5299999999997\n-542\nCredit\n54.430028156152495\n185.84\n215.\nDebit\n-239.3699870633894\n-3308.37\n-563\nBusiness travel\n-88.460010653679333\n-243.43\n-558\nCredit\n0\n0\n0\nDebit\n-88.460010653679333\n-243.43\n-558\nPersonal travel\n-2.090023590289932\n-2879.1\n-486\nCredit\n0\n185.84\n215.\nDebit\n-2.090023590289932\n-3064.94\n-507\nEducation related\nexpenditure\n-84.349973365801688\n-1073.0899999999999\n-254\nCredit\n0\n0\n0\nDebit\n-84.349973365801688\n-1073.0899999999999\n-254\nHealth related\nexpenditure\n0\n-1003.28\n-107\nCredit\n0\n0\n0\nDebit\n0\n-1003.28\n-107\nOther Personal\nTravels\n-10.039951297465949\n-802.73\n-124\nCredit\n54.430028156152495\n185.84\n215.\nDebit\n-64.46997945361845\n-988.57\n-145\nInsurance services\n-3.5500342439692565\n-276.45999999999998\n-206\nCredit\n0.56997184384750021 0.68\n4.58\nDebit\n-4.1200060878167566\n-277.14\n-211\nCommunication\nservices\n-138.65900616391448\n-163.12823999999995\n-185\nCredit\n20.196027699566244\n23.76\n27\nDebit\n-158.85503386348071\n-186.88823999999994\n-212\nConstruction\nservices\n-45.460543337645539\n-53.482968\n-60.7\nCredit\n0\n0\n0\nDebit\n-45.460543337645539\n-53.482968\n-60.7\nFinancial services\n-14.665017882961722\n-18.850000000000001\n4.66\nCredit\n10.935012556122061\n12.15\n13.5\nDebit\n-25.600030439083785\n-31\n-8.84\nComputer &\ninformation\nservices\n-150.51206148694925\n-177.07298400000002\n-201\nCredit\n0\n0\n0\nDebit\n-150.51206148694925\n-177.07298400000002\n-201\nRoyalties and\nlicense fees\n-67.430028156152503\n-85.03\n-174\nCredit\n0\n0\n0\nDebit\n-67.430028156152503\n-85.03\n-174\nOther business\nservices\n-2877.8749714633591\n-4766.71\n-414\nCredit\n9.0250361464119937\n9.5\n10\nDebit\n-2886.9000076097709\n-4776.21\n-415\nOperational leasing\nservices\n-28.750019024427367\n-977.44\n-824\nCredit\n0\n0\n0\nDebit\n-28.750019024427367\n-977.44\n-824\nMisc. business,\nprofessional, and\ntechnical services\n-2849.1249524389318\n-3789.27\n-332\nCredit\n9.0250361464119937\n9.5\n10\nDebit\n-2858.1499885853436\n-3798.77\n-333\nPersonal, cultural\n& recreational\nservices\n-0.29350886538315196 -0.34531199999999995 -0.39\nCredit\n0\n0\n0\nDebit\n-0.29350886538315196 -0.34531199999999995 -0.39\nGovernment\nServices n.i.e\n119.81995281942015\n-1580.88\n-246\nCredit\n359.44996575603074\n244.13\n348.\nDebit\n-239.6300129366106\n-1825.01\n-281\nIncome(net)\n-2254.0999923902295\n-4642.76\n-118\nCredit\n889.58998554143511\n1891.93\n2585\nDebit\n-3143.6899779316641\n-6534.6900000000005\n-144\nCompensation of\nemployees\n101.34000456586257\n126.67999999999999\n191.\nCredit\n154.97001750247318\n193.72\n219.\nDebit\n-53.630012936610612\n-67.040000000000006\n-28\nInvestment income -2355.4399969560918\n-4769.4400000000005\n-120\nCredit\n734.61996803896193\n1698.21\n2365\nDebit\n-3090.0599649950536\n-6467.6500000000005\n-144\nDirect investment\n-2600.3900007609773\n-5805.09\n-131\nCredit\n0.44996575603074351 14.760000000000002\n21.9\nDebit\n-2600.8399665170077\n-5819.85\n-131\nIncome on equity\n-2555.8399665170077\n-5752.9800000000005\n-130\nCredit\n0\n13.870000000000001\n20.9\nDebit\n-2555.8399665170077\n-5766.85\n-130\nDividends and\ndistributed branch\nprofits\n-794.07000989270216\n-3908.85\n-109\nCredit\n5\n8\n14\nDebit\n-799.07000989270216\n-3916.85\n-109\nReinvested\nearnings and\nundistributed\nbranch profit\n-1755.9000076097711\n-1844.13\n-210\nCredit\n0.87002511224412149 5.87\n6.96\nDebit\n-1756.770032722015\n-1850\n-211\nIncome on Direct\nInvestment Loans\n(interest)\n-44.550034243969257\n-52.11\n-74\nCredit\n0.44996575603074351 0.89\n1\nDebit\n-45\n-53\n-75\nPortfolio\ninvestment\n-258\n-431\n-536\nCredit\n47.000000000000007\n54\n53.3\nDebit\n-305.00000000000006\n-485\n-589\nOther investment\n502.95000380488551\n1466.65\n1642\nIncome on debt\n(interest)\n502.95000380488551\n1466.65\n1642\nCredit\n687.17000228293125\n1629.45\n2290\nDebit\n-184.2199984780458\n-162.80000000000001\n-648\nCurrent\ntransfers(net)\n15136.840042614716\n17957.009999999998\n1870\nCredit\n15268.09002359029\n18135.679999999997\n1885\nDebit\n-131.24998097557264\n-178.67000000000002\n-151\nGeneral\ngovernment\n59.330035765923448\n984.18\n784.\nCredit\n120.00000000000001\n1032.26\n867.\nDebit\n-60.669964234076559\n-48.08\n-83.6\nOther sectors\n621.84004261471728\n16972.829999999998\n1791\nCredit\n678.09002359028989\n17103.419999999998\n1798\nDebit\n-56.24998097557264\n-130.59\n-67.7\nWorkers'\nremittances\n14455.669964234075\n16854.57\n1791\nCredit\n14470\n16890\n1794\nDebit\n-14.330035765923446\n-35.43\n-26.4\nOther Transfers\n0\n118.25999999999999\n0.44\nCredit\n0\n213.41999999999996\n41.7\nDebit\n0\n-95.16\n-41.2\nCAPITAL AND\nFINANCIAL\nACCOUNT\n-19000.686020850771\n-19539.978587813865\n-133\nCapital\naccount(net)\n7328\n10650\n0\nCredit\n7328\n10650\n0\nDebit\n0\n0\n0\nCapital transfers\n7328\n10650\n0\nCredit\n7328\n10650\n0\nGeneral\nGovernment\n7328\n10650\n0\nDebt Forgiveness\n7328\n10650\n0\nOther Sector\n0\n0\n0\nDebit\n0\n0\n0\nAcquisition/\ndisposal of\nnonproduced,\nnonfin assets\n0\n0\n0\nCredit\n0\n0\n0\nDebit\n0\n0\n0\nFinancial\naccount(net)\n-26328.686020850771\n-30189.978587813865\n-133\nAssets\n-14031.406057377673\n-22121.841200000003\n-251\nDirect investment\n(Abroad)\n-14.619968038962028\n-322.48\n-874\nEquity capital\n-14.619968038962028\n-316.61\n-868\nClaims on direct\ninvestment\nenterprises\n-14.619968038962028\n-316.61\n-868\nLiabilities to direct\ninvestors\n0\n0\n0\nReinvested\nearnings\n0\n-5.87\n-6.96\nOther capital\n0\n0\n0\nClaims on direct\ninvestment\nenterprises\n0\n0\n0\nLiabilities to direct\ninvestors\n0\n0\n0\nPortfolio\ninvestment\n-1370.4460847728483\n-1526.0411999999999\n-185\nEquity securities\n-1238.896050528879\n-1376.5511999999999\n-172\nDebt securities\n-131.55003424396926\n-149.49\n-138\nLong-term\n0\n0\n0\nShort-term\n-131.55003424396926\n-149.49\n-138\nOther investment\n-1322.2999771706873\n-6254.38\n-133\nTrade credits\n-1374.4499657560307\n-4696.8100000000004\n-722\nLoans -DMBs\n-110.9799863024123\n-126.11\n-116\nCurrency and\ndeposits\n163.12997488775588\n-1431.46\n-600\nMonetary\nauthorities\n0\n0\n0\nGeneral\ngovernment\n0\n119.8\n-127\nBanks\n67.129974887755878\n-1419.26\n-291\nOther sectors\n96\n-132\n-181\nOther Assets\n0\n0\n0\nReserve assets*\n-11324.040027395176\n-14018.94\n-903\nMonetary Gold\n0\n0\n0\nSDRs\n0\n0\n0\nReserve Positions\nin the Fund\n0\n0\n0\nForeign exchange\n-11324.040027395176\n-14018.94\n-903\nOther Claims\n0\n0\n0\nLiabilities\n-12297.2799634731\n-8068.1373878138593\n1175\nDirect Invesment in\nreporting economy\n4978.2600258732218\n4897.8099999999995\n6086\nEquity capital\n3221.4899931512064\n3047.81\n3936\nClaims on direct\ninvestors\n0\n0\n0\nLiabilities to direct\ninvestors\n3221.4899931512064\n3047.81\n3936\nReinvested\nearnings\n1756.770032722015\n1850\n2112\nOther capital\n0\n0\n38.0\nClaims on direct\ninvestors\n0\n0\n0\nLiabilities to direct\ninvestors\n0\n0\n38.0\nPortfolio\nInvestment\n883\n2825.59\n2665\nEquity securities\n750\n1785\n1459\nDebt securities\n133\n1040.5900000000001\n1206\nLong-term\n133\n1011.7\n1058\nShort-term\n0\n28.89\n147.\nOther investment\nliabilities\n-18158.539989346322\n-15791.53738781386\n3000\nTrade credits\n0\n0\n0\nShort-term\n0\n0\n0\nLong-term\n0\n0\n0\nLoans\n-18195.000000000004\n-15896.765848491825\n2150\nGeneral\ngovernment\n-15219\n-16430\n-513\nLong-term\n-15219\n-16430\n-513\nDrawings\n264\n501\n425\nRepayments\n-15483\n-16931\n-938\nshort-term\n0\n0\n0\nMonetary\nauthorities\n0\n0\n0\nBanks\n87\n99.234151508174079\n1384\nOther sectors\n-3063\n434\n1278\nLong-term\n-3063\n434\n1278\nShort-term\n0\n0\n0\nCurrency &\nDeposits\n36.460010653679326\n105.22846067796667\n850\nMonetary\nAuthority\n0\n0\n0\nBanks\n36.460010653679326\n105.22846067796667\n850\nOther Liabilities -\nmonetary authority\nSDR allocation\n0\n0\n0\nNET ERRORS AND\nOMISSIONS\n-18224.368769500034\n-17304.501908186139\n-145\nMemorandum\nItems:\n2005\n2006\n2007\nCurrent Account\nBalance as % of\nGDP\n32.842622896018376\n25.306455505049996\n16.8\nCapital and\nFinancial Account\nBalance as % of\nGDP\n-16.763772921365604\n-13.420940994291531\n-8.06\nOverall Balance as\n% of GDP\n9.9908831877538695\n9.6288420018971621\n5.45\nExternal Reserves -\nStock (US$' Billion)\n28.279060000000001\n42.298000000000002\n51.3\nNumber of Months\nof Imports\nEquivalent\n13.063807131514364\n22.879737763088855\n21.5\nExternal Debt\nStock (US$' Billion)\n20.476199999999999\n3.5444900000000001\n3.62\nDebt Service Due\nas % of Exports of\nGoods and Non\nFactor Services\nEffective Central\nExchange Rate (N/\n$)\n131.41\n127.5102\n124.\nAverage Exchange\nRate (N/$)\n132.15\n128.65\n125.\nEnd-Period\nExchange Rate (N/\n$)\n130.29\n128.27000000000001\n117.\nSource: Central\nBank of Nigeria\nNotes: 1Revised\n2Provisional\n*Negative sign\nindicates accretion\nto reserves while\npositive sign\nindicates depletion\nof reserves\nReturn to Menu\nTable D.2.1.4A\nBalance of Payments\nBPM6 Compilation\n(₦' Billion)\n2015\n2\nCredits\nDebits\nC\nCurrent Account\n14165.865915063914\n17199.350751313887\n1\n1. Current account\nbalance (+ Surplus;\n- Deficit)\n0\n3033.4848362499702\n6\n1.A Goods and\nservices\n9637.224270240542\n14136.701598773561\n9\nBalance on goods\nand services (+\nSurplus; - Deficit)\n0\n4499.4773285330211\n0\n1.A.a Goods\n9016.3211351267328\n10283.073616492513\n8\nBalance on trade in\ngoods (+ Surplus; -\nDeficit)\n0\n1266.7524813657808\n0\n1.A.a.1 General\nmerchandise on a\nBOP basis\n9016.3211351267328\n10283.073616492513\n8\nOf which: 1.A.a.1.1\nRe-exports\n0\nn.a\n0\n1.A.a.2 Net exports\nof goods under\nmerchanting\n0\nn.a\n0\n1.A.a.2.1 Goods\nacquired under\nmerchanting\n0\nn.a\n0\n1.A.a.2.2 Goods sold\nunder merchanting\n0\nn.a\n0\n1.A.a.3\nNonmonetary gold\n0\n0\n0\n1.A.b Services\n620.90313511380998\n3853.6279822810507\n9\nBalance on trade in\nservices (+ Surplus;\n- Deficit)\n0\n3232.724847167241\n0\n1.A.b.1\nManufacturing\nservices on physical\ninputs owned by\nothers\n0\n0\n0\n1.A.b.1.1 Goods for\nprocessing in\nreporting economy—\nGoods returned ,\nreceived\n0\n0\n0\n1.A.b.1.2 Goods for\nprocessing abroad—\nGoods sent, Goods\nreturned\n0\n0\n0\n1.A.b.2 Maintenance\nand repair services\nn.i.e.\n0\n5.4328517249999999\n0\n1.A.b.3 Transport\n355.25521130995759\n1519.8335705110701\n4\n1.A.b.3.1 Sea\ntransport\n340.27154379295763\n826.22029128012105\n4\n1.A.b.3.1.1\nPassenger\n0.55556557875000012 0.84685681499999999\n0\nOf which:\n1.A.b.3.1.1.1\nPayable by border,\nseasonal and other\nshort-term workers\n0\n0\n0\n1.A.b.3.1.2 Freight\n84.130508894249999\n816.49813926012109\n8\n1.A.b.3.1.3 Other\n255.58546931995764\n8.8752952050000005\n3\n1.A.b.3.2 Air\ntransport\n14.983667517000001\n675.99629964094891\n9\n1.A.b.3.2.1\nPassenger\n10.55574599625\n668.27583501524998\n4\nOf which:\n1.A.b.3.2.1.1\nPayable by border,\nseasonal and other\nshort-term workers\n0\n0\n0\n1.A.b.3.2.2 Freight\n4.4279215207500009\n0.41458651499999999\n4\n1.A.b.3.2.3 Other\n0\n7.3058781106988517\n0\n1.A.b.3.3 Other\nmodes of transport\n0\n14.960482110000001\n0\n1.A.b.3.3.1\nPassenger\n0\n1.2142865700000003\n0\nOf which:\n1.A.b.3.3.1.1\nPayable by border,\nseasonal, and other\nshort-term workers\n0\n0\n0\n1.A.b.3.3.2 Freight\n0\n1.9157433749999999\n0\n1.A.b.3.3.3 Other\n0\n11.830452165000001\n0\n1.A.b.3.4 Postal and\ncourier services ( For\nall modes of\ntransport)\n0\n2.6564974800000001\n0\n1.A.b.3.0.1\nPassenger\n0\n0\n0\nOf which:\n1.A.b.3.0.1.1\nPayable by border,\nseasonal, and other\nshort-term workers\n0\n0\n0\n1.A.b.3.0.2 Freight\n0\n0\n0\n1.A.b.3.0.3 Other\n0\n2.6564974800000001\n0\n1.A.b.4 Travel\n79.364041134000004\n1101.3463408430061\n2\n1.A.b.4.1 Business\n0\n257.52015817981834\n0\n1.A.b.4.1.1\nAcquisition of goods\nand services by\nborder, seasonal,\nand short term\nworkers\n0\n0\n0\n1.A.b.4.1.2 Other\n0\n257.52015817981834\n0\n1.A.b.4.2 Personal\n79.364041134000004\n843.82618266318764\n2\n1.A.b.4.2.1 Health-\nrelated\n0\n146.648436099375\n0\n1.A.b.4.2.2\nEducation-related\n0\n441.60162809109374\n0\n1.A.b.4.2.3 Other\n79.364041134000004\n255.57611847271878\n2\nFor both business\nand personal travel\n0\n0\n0\n1.A.b.4.0.1 Goods\n0\n0\n0\n1.A.b.4.0.2 Local\ntransport services\n0\n0\n0\n1.A.b.4.0.3\nAccommodation\nservices\n0\n0\n0\n1.A.b.4.0.4 Food-\nserving services\n0\n0\n0\n1.A.b.4.0.5 Other\nservices\n0\n0\n0\nOf which:\n1.A.b.4.0.5.1 Health\nservices\n0\n0\n0\n1.A.b.4.0.5.2\nEducation services\n0\n0\n0\n1.A.b.5 Construction 0\n10.119054750000002\n0\n1.A.b.5.1\nConstruction abroad\n0\n0\n0\n1.A.b.5.2\nConstruction in the\nreporting economy\n0\n10.119054750000002\n0\n1.A.b.6 Insurance\nand pension services\n8.4705330149999991\n65.309199231708092\n2\n1.A.b.6.1 Direct\ninsurance\n8.4705330149999991\n64.514195204058097\n2\n1.A.b.6.2\nReinsurance\n0\n0.62052401564999993\n0\n1.A.b.6.3 Auxiliary\ninsurance services\n0\n0.17448001200000002\n0\n1.A.b.6.4 Pension\nand standardized\nguarantee services\n0\n0\n0\n1.A.b.7 Financial\nservices\n49.821059944991404\n219.88607728499997\n6\n1.A.b.7.1 Explicitly\ncharged and other\nfinancial services\n49.821059944991404\n219.88607728499997\n6\n1.A.b.7.2 Financial\nintermediation\nservices indirectly\nmeasured (FISIM)\n0\n0\n0\n1.A.b.8 Charges for\nthe use of\nintellectual property\nn.i.e.\n0\n49.679646659999989\n0\n1.A.b.9\nTelecommunications,\ncomputer, and\ninformation services\n15.165614016000003\n204.82322570850002\n2\n1.A.b.9.1\nTelecommunications\nservices\n15.165614016000003\n138.32963978400002\n2\n1.A.b.9.2 Computer\nservices\n0\n63.892497637500007\n0\n1.A.b.9.3\nInformation services\n0\n2.6010882870000005\n0\nTable D.2.1.4A\nBalance of Payments\nBPM6 Compilation\n(₦' Billion)\n2015\n2\nCredits\nDebits\nC\n1.A.b.10 Other\nbusiness services\n17.198449590944996\n384.96294040233215\n1\n1.A.b.10.1 Research\nand development\nservices\n0\n9.3003610000000014E-2 0\n1.A.b.10.2\nProfessional and\nmanagement\nconsulting services\n0\n181.88288687665161\n0\n1.A.b.10.3\nTechnical, trade-\nrelated, and other\nbusiness services\n17.198449590944996\n202.98704991568056\n1\n1.A.b.11 Personal,\ncultural, and\nrecreational services\n0\n31.584418929000002\n0\n1.A.b.11.1\nAudiovisual and\nrelated services\n0\n0\n0\n1.A.b.11.2 Other\npersonal, cultural,\nand recreational\nservices\n0\n31.584418929000002\n0\n1.A.b.12\nGovernment goods\nand services n.i.e.\n95.62822610291569\n260.65065623543489\n1\n1.A.b.0.1 Tourism-\nrelated services in\ntravel and passenger\ntransport\n0\n0\n0\n1.B Primary income\n182.88390134587118\n2679.7855002836718\n3\nBalance on primary\nincome (+ Surplus; -\nDeficit)\n0\n2496.9015989378013\n0\n1.B.1 Compensation\nof employees\n42.807909364084338\n2.5781288394750002\n4\n1.B.2 Investment\nincome\n140.07599198178684\n2677.2073714441967\n2\n1.B.2.1 Direct\ninvestment\n59.056742242502246\n2448.7479168154996\n8\n1.B.2.1.1 Income on\nequity and\ninvestment fund\nshares\n58.475142202502248\n2438.9906290795698\n8\n1.B.2.1.1.1\nDividends and\nwithdrawals from\nincome of quasi-\ncorporation\n53.052893538527016\n2018.8987588360696\n7\n1.B.2.1.1.1.1 Direct\ninvestor in direct\ninvestment\nenterprises\n53.052893538527016\n2018.8987588360696\n7\n1.B.2.1.1.1.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n1.B.2.1.1.1.3\nBetween fellow\nenterprises\n0\n0\n0\n1.B.2.1.1.1.3.1 if\nultimate controlling\nparent is resident\n0\n0\n0\n1.B.2.1.1.1.3.2 if\nultimate controlling\nparent is nonresident\n0\n0\n0\n1.B.2.1.1.1.3.3 if\nultimate controlling\nparent is unknown\n0\n0\n0\n1.B.2.1.1.2\nReinvested earnings\n5.4222486639752239\n420.09187024350007\n8\nInvestment income\nattributable to\npolicyholders in\ninsurance, pension\n0\n0\n0\nschemes, and\nstandardized\nguarantees, and to\ninvestment fund\nshareholders\n0\n0\n0\nOf which:\nInvestment income\nattributable to\ninvestment fund\nshareholders\n0\n0\n0\n1.B.2.1.2 Interest\n0.58160003999999998 9.7572877359299994\n0\n1.B.2.1.2.1 Direct\ninvestor in direct\ninvestment\nenterprises\n0.58160003999999998 9.7572877359299994\n0\n1.B.2.1.2.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n1.B.2.1.2.3 Between\nfellow enterprises\n0\n0\n0\n1.B.2.1.2.3.1 if\nultimate controlling\nparent is resident\n0\n0\n0\n1.B.2.1.2.3.2 if\nultimate controlling\nparent is nonresident\n0\n0\n0\n1.B.2.1.2.3.3 if\nultimate controlling\nparent is unknown\n0\n0\n0\n1.B.2.1.2M\nMemorandum:\nInterest before FISIM\n0\n0\n0\n1.B.2.2 Portfolio\ninvestment\n4.5450422628584262\n109.01212269777528\n6\n1.B.2.2.1 Investment\nincome on equity\nand investment fund\nshares\n0\n23.964554567099999\n1\n1.B.2.2.1.1\nDividends on equity\nexcluding\ninvestment fund\nshares\n0\n23.964554567099999\n1\n1.B.2.2.1.2\nInvestment income\nattributable to\ninvestment fund\nshareholders\n0\n0\n0\n1.B.2.2.1.2.1\nDividends\n0\n0\n0\n1.B.2.2.1.2.2\nReinvested earnings\n0\n0\n0\n1.B.2.2.2 Interest\n4.5450422628584262\n85.047568130675288\n4\n1.B.2.2.2.1 Short-\nterm\n4.5450422628584262\n62.755037288999993\n4\n1.B.2.2.2.2 Long-\nterm\n0\n22.292530841675287\n0\n1.B.2.3 Other\ninvestment\n44.414409437458644\n119.44733193092215\n6\n1.B.2.3.1\nWithdrawals from\nincome of quasi-\ncorporations\n0\n0\n0\n1.B.2.3.2 Interest\n44.414409437458644\n119.44733193092215\n6\n1.B.2.3.2M\nMemorandum:\nInterest before FISIM\n0\n0\n0\n1.B.2.3.3 Investment\nincome attributable\nto policyholders in\ninsurance, pension\nschemes, and\nstandardized\nguarantee schemes\n0\n0\n0\n1.B.2.4 Reserve\nassets\n32.05979803896755\n0\n5\n1.B.2.4.1 Income on\nequity and\ninvestment fund\nshares\n0\n0\n0\n1.B.2.4.2 Interest\n32.05979803896755\n0\n5\n1.B.2.4.2M\nMemorandum:\nInterest before FISIM\n0\n0\n0\n1.B.3 Other primary\nincome\n0\n0\n0\n1.B.3.1 Taxes on\nproduction and on\nimports\n0\n0\n0\n1.B.3.2 Subsidies\n0\n0\n0\n1.B.3.3 Rent\n0\n0\n0\nBalance on goods,\nservices, and\nprimary income\n9820.1081715864129\n16816.487099057234\n1\nTable D.2.1.4A\nBalance of Payments\nBPM6 Compilation\n(₦' Billion)\n2015\n2\nCredits\nDebits\nC\n1.C Secondary\nincome\n4345.7577434775003\n382.86365225665224\n5\nBalance on\nsecondary income\n(+ Surplus; -\nDeficit)\n3962.8940912208477\n0\n5\n1.C.1 General\ngovernment\n328.62593084474997\n29.601477170999999\n3\n1.C.1.1 Current taxes\non income, wealth,\netc.\n0\nn.a\n0\nOf which:1.C.1.1.1\npayable by border,\nseasonal, and other\nshort-term workers\n0\nn.a\n0\n1.C.1.2 Social\ncontributions\n0\nn.a\n0\nOf which:1.C.1.2.1\npayable by border,\nseasonal, and other\nshort-term workers\n0\nn.a\n0\n1.C.1.3 Social\nbenefits\nn.a\n0\n0\n1.C.1.4 Current\ninternational\ncooperation\n33.302496885000004\n29.601477170999999\n4\n1.C.1.5\nMiscellaneous\ncurrent transfers of\ngeneral government\n295.32343395974999\n0\n3\nOf which: 1.C.1.5.1\nCurrent transfers to\nNPISHs\n0\n0\n0\n1.C.2 Financial\ncorporations,\nnonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n4017.1318126327496\n353.26217508565219\n4\n1.C.2.1 Personal\ntransfers (Current\ntransfers between\nresident and\nnonresident\nhousehold)\n4009.9318595700001\n200.87404354500003\n4\nOf which: 1.C.2.1.1\nWorkers’ remittances\n4009.9318595700001\n200.87404354500003\n4\n1.C.2.2 Other\ncurrent transfers\n0\n0\n0\n1.C.2.0.1 Current\ntaxes on income,\nwealth, etc.\nn.a\n0\nn\n1.C.2.0.2 Social\ncontributions\n0\n0\n0\n1.C.2.0.3 Social\nbenefits\n0\n0\n0\n1.C.2.0.4 Net nonlife\ninsurance premiums\n7.1999530627499997\n152.38813154065221\n7\n1.C.2.0.5 Nonlife\ninsurance claims\n0\n0\n0\n1.C.2.0.6 Current\ninternational\ncooperation\n0\n0\n0\n1.C.2.0.7\nMiscellaneous\ncurrent transfers\n0\n0\n0\nOf which:1.C.2.0.7.1\nCurrent transfers to\nNPISHs\n0\n0\n0\n1.C.3 Adjustment for\nchange in pension\nentitlements\n0\n0\n0\n2 Capital account\n0\n0\n0\nCapital account\nbalance (+ Surplus;\n- Deficit)\n0\n0\n0\n2.1 Gross\nacquisitions /\ndisposals of\nnonproduced\nnonfinancial assets\n0\n0\n0\n2.2 Capital transfers\n0\n0\n0\n2.2.1 General\ngovernment\n0\n0\n0\n2.2.1.1 Debt\nforgiveness\n0\n0\n0\n2.2.1.2 Other capital\ntransfers\n0\n0\n0\nOf which:2.2.1.2.1\nCapital taxes\n0\n0\n0\n2.2.2 Financial\ncorporations,\nnonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n0\n0\n0\n2.2.2.1 Debt\nforgiveness\n0\n0\n0\n2.2.2.2 Other capital\ntransfers\n0\n0\n0\nOf which: 2.2.2.2.1\nCapital taxes\nn.a\n0\nn\nOf which: 2.2.2.0.1\nBetween households\n0\n0\n0\nOf which:\n0\n0\n0\nfor each item in\ncapital transfers:\n0\n0\n0\nTransfers to NPISHs\n0\n0\n0\nNet lending (+) /\nnet borrowing (-)\n(Balance from\ncurrent and capital\naccounts)\n0\n-3033.4848362499747\n6\nNet acquisition of\nfinancial assets\nNet incurrence of\nliabilities\nN\nf\n3 Financial account\n1506.0589585855221\n1304.0878999348565\n8\nNet lending / net\nborrowing (from\nfinancial account)\n(+ net lending; - net\nborrowing)\n201.97105865066558\n0\n0\n3.1 Direct\ninvestment\n281.99813936137525\n602.06782344486987\n3\n3.1.1 Equity and\ninvestment fund\nshares\n281.99813936137525\n601.23865041486988\n3\n3.1.1.1 Equity other\nthan reinvestment of\nearnings\n276.57589069740004\n181.14678017136984\n3\n3.1.1.1.1 Direct\ninvestor in direct\ninvestment\nenterprises\n276.57589069740004\n181.14678017136984\n3\n3.1.1.1.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n3.1.1.1.3 Between\nfellow enterprises\n0\n0\n0\n3.1.1.1.3.1 if\nultimate controlling\nparent is resident\n0\n0\n0\n3.1.1.1.3.2 if\nultimate controlling\nparent is nonresident\n0\n0\n0\n3.1.1.1.3.3 if\nultimate controlling\nparent is unknown\n0\n0\n0\n3.1.1.2 Reinvestment\nof earnings\n5.4222486639752239\n420.09187024350007\n8\nOf which: 3.1.1.0.1\nInvestment fund\nshares/units\n0\n0\n0\nOf which: 3.1.1.0.1.1\nMoney market fund\nshares/units\n0\n0\n0\n3.1.2 Debt\ninstruments\n0\n0.8291730300000002\n0\n3.1.2.1 Direct\ninvestor in direct\ninvestment\nenterprises\n0\n0.8291730300000002\n0\n3.1.2.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n3.1.2.3 Between\nfellow enterprises\n0\n0\n0\n3.1.2.3.1 if ultimate\ncontrolling parent is\nresident\n0\n0\n0\n3.1.2.3.2 if ultimate\ncontrolling parent is\nnonresident\n0\n0\n0\n3.1.2.3.3 if ultimate\ncontrolling parent is\nunknown\n0\n0\n0\nOf which: 3.1.2.0\nDebt securities\n0\n0\n0\n3.1.2.0.1 Direct\ninvestor in direct\ninvestment\nenterprises\n0\n0\n0\n3.1.2.0.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n3.1.2.0.3 Between\nfellow enterprises\n0\n0\n0\n3.1.2.0.3.1 if\nultimate controlling\nparent is resident\n0\n0\n0\n3.1.2.0.3.2 if\nultimate controlling\nparent is nonresident\n0\n0\n0\n3.1.2.0.3.3 if\nultimate controlling\nparent is unknown\n0\n0\n0\nTable D.2.1.4A\nBalance of Payments\nBPM6 Compilation\n(₦' Billion)\n2015\n2\nNet acquisition of\nfinancial assets\nNet incurrence of\nliabilities\nN\nf\n3.2 Portfolio\ninvestment\n329.40912603375\n498.13221591810077\n4\n3.2.1 Equity and\ninvestment fund\nshares\n263.52730082699998\n93.64929738674978\n3\n3.2.1.1 Central bank n.a\n0\nn\n3.2.1.1.9 Monetary\nauthorities\nn.a\n0\nn\n3.2.1.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n0\n0\n3.2.1.3 General\ngovernment\nn.a\n0\nn\n3.2.1.4 Other sectors 263.52730082699998\n93.64929738674978\n3\n3.2.1.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.2.1.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n263.52730082699998\n93.64929738674978\n3\n3.2.1.0.1 Equity\nsecurities other than\ninvestment fund\nshares\n0\n0\n0\n3.2.1.0.1.1 Listed\n0\n0\n0\n3.2.1.0.1.2 Unlisted\n0\n0\n0\n3.2.1.0.2 Investment\nfund shares/units\n0\n0\n0\nOf which: 3.2.1.0.2.1\nReinvestment of\nearnings\n0\n0\n0\nOf which:\n3.2.1.0.2.0.1 Money\nmarket fund shares/\nunits\n0\n0\n0\n3.2.2 Debt securities 65.881825206749994\n591.78151330485059\n8\n3.2.2.1 Central bank 0\n0\n0\n3.2.2.1.1 Short-term\n0\n0\n0\n3.2.2.1.2 Long-term\n0\n0\n0\n3.2.2.1.9 Monetary\nauthorities\n0\n0\n0\n3.2.1.1.9.1 Short-\nterm\n0\n0\n0\n3.2.1.1.9.2 Long-\nterm\n0\n0\n0\n3.2.2.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n112.31364826500001\n0\n3.2.2.2.1 Short-term\n0\n112.31364826500001\n0\n3.2.2.2.2 Long-term\n0\n0\n0\n3.2.2.3 General\ngovernment\n0\n342.9620129488506\n0\n3.2.2.3.1 Short-term\n0\n0\n0\n3.2.2.3.2 Long-term\n0\n342.9620129488506\n0\n3.2.2.4 Other sectors 65.881825206749994\n136.50585209100004\n8\n3.2.2.4.0.1 Short-\nterm\n65.881825206749994\n0\n8\n3.2.2.4.0.2 Long-\nterm\n0\n136.50585209100004\n0\n3.2.2.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.2.2.4.1.1 Short-\nterm\n0\n0\n0\n3.2.2.4.1.2 Long-\nterm\n0\n0\n0\n3.2.2.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n65.881825206749994\n136.50585209100004\n8\n3.2.2.4.2.1 Short-\nterm\n65.881825206749994\n0\n8\n3.2.2.4.2.2 Long-\nterm\n0\n136.50585209100004\n0\n3.3 Financial\nderivatives (other\nthan reserves) and\nemployee stock\noptions\n0\n0\n0\n3.3.1 Central bank\n0\n0\n0\n3.3.1.9 Monetary\nauthorities\n0\n0\n0\n3.3.2 Deposit-taking\ncorporations, except\nthe central bank\n0\n0\n0\n3.3.3 General\ngovernment\n0\n0\n0\n3.3.4 Other sectors\n0\n0\n0\n3.3.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.3.4.2 Nonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n0\n0\n0\n3.3.0.1 Financial\nderivatives\n0\n0\n0\n3.3.0.1.1 Options\n0\n0\n0\n3.3.0.1.2 Forward-\ntype contracts\n0\n0\n0\n3.3.0.2.Employee\nstock options\n0\n0\n0\n3.4 Other investment 2044.7842213510173\n203.88786057188597\n6\n3.4.1 Other equity\n0\n0\n0\n3.4.2 Currency and\ndeposits\n833.38330874660721\n146.58025422675692\n-7\n3.4.2.1 Central bank 0\n0\n0\n3.4.2.1.1 Short-term\n0\n0\n0\n3.4.2.1.2 Long-term\n0\n0\n0\n3.4.2.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.2.1.9.1 Short-\nterm\n0\n0\n0\n3.4.2.1.9.2 Long-\nterm\n0\n0\n0\n3.4.2.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n-877.08527462611664\n146.58025422675692\n-3\n3.4.2.2.0.1 Of which:\nInterbank positions\n0\n0\n0\n3.4.2.2.1 Short-term\n-877.08527462611664\n146.58025422675692\n-3\n3.4.2.2.2 Long-term\n0\n0\n0\n3.4.2.3 General\ngovernment\n-265.42413107563442\n0\n-2\n3.4.2.3.1 Short-term\n-265.42413107563442\n0\n-2\n3.4.2.3.2 Long-term\n0\n0\n0\n3.4.2.4 Other sectors 1975.8927144483584\n0\n-4\n3.4.2.4.0.1 Short-\nterm\n1975.8927144483584\n0\n-4\n3.4.2.4.0.2 Long-\nterm\n0\n0\n0\n3.4.2.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.2.4.1.1 Short-\nterm\n0\n0\n0\n3.4.2.4.1.2 Long-\nterm\n0\n0\n0\n3.4.2.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n1975.8927144483584\nn.a\n-4\n3.4.2.4.2.1 Short-\nterm\n1975.8927144483584\nn.a\n-4\n3.4.2.4.2.2 Long-\nterm\n0\nn.a\n0\nTable D.2.1.4A\nBalance of Payments\nBPM6 Compilation\n(₦' Billion)\n2015\n2\nNet acquisition of\nfinancial assets\nNet incurrence of\nliabilities\nN\nf\n3.4.3 Loans\n-141.04725766460001\n57.307606345129045\n1\n3.4.3.1 Central bank 0\n0\n0\n3.4.3.1.1 Credit and\nloans with the IMF\n(other than reserves)\n0\n0\n0\n3.4.3.1.2 Other\nshort-term\n0\n0\n0\n3.4.3.1.3 Other long-\nterm\n0\n0\n0\n3.4.3.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.3.1.9.1 Credit\nand loans with the\nIMF (other than\nreserves)\n0\n0\n0\n3.4.3.1.9.2 Other\nshort-term\n0\n0\n0\n3.4.3.1.9.3 Other\nlong-term\n0\n0\n0\n3.4.3.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n137.05302777562898\n0\n3.4.3.2.1 Short-term\n0\n137.05302777562898\n0\n3.4.3.2.2 Long-term\n0\n0\n0\n3.4.3.3 General\ngovernment\n0\n198.40813797000001\n0\n3.4.3.3.1 Credit and\nloans with the IMF\n(other than reserves)\n0\n0\n0\n3.4.3.3.2 Other\nshort-term\n0\n0\n0\n3.4.3.3.3 Other long-\nterm\n0\n198.40813797000001\n0\n3.4.3.4 Other sectors -141.04725766460001\n278.1535594005\n1\n3.4.3.4.0.1 Short-\nterm\n0\n0\n0\n3.4.3.4.0.2 Long-\nterm\n-141.04725766460001\n278.1535594005\n1\n3.4.3.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.2.4.1.1 Short-\nterm\n0\n0\n0\n3.4.2.4.1.2 Long-\nterm\n0\n0\n0\n3.4.3.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n-141.04725766460001\n278.1535594005\n1\n3.4.3.4.2.1 Short-\nterm\n0\n0\n0\n3.4.3.4.2.2 Long-\nterm\n-141.04725766460001\n278.1535594005\n1\n3.4.4 Insurance,\npension, and\nstandardized\nguarantee schemes\n0\n0\n0\n3.4.4.1 Central bank 0\n0\n0\n3.4.4.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.4.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n0\n0\n3.4.4.3 General\ngovernment\n0\n0\n0\n3.4.4.4 Other sectors 0\n0\n0\n3.4.4.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.4.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n0\n0\n0\n3.4.4.0.1 Nonlife\ninsurance technical\nreserves\n0\n0\n0\n3.4.4.0.2 Life\ninsurance and\nannuity entitlements\n0\n0\n0\n3.4.4.0.3 Pension\nentitlements\n0\n0\n0\n3.4.4.0.4 Claims of\npension funds on\npension managers\n0\n0\n0\n3.4.4.0.5\nEntitlements to\nnonpension benefits\n0\n0\n0\n3.4.4.0.6 Provisions\nfor calls under\nstandardized\nguarantees\n0\n0\n0\n3.4.5 Trade credit\nand advances\n1352.4481702690105\n0\n1\n3.4.5.1 Central bank 0\n0\n0\n3.4.5.1.1 Short-term\n0\n0\n0\n3.4.5.1.2 Long-term\n0\n0\n0\n3.4.5.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.5.1.9.1 Short-\nterm\n0\n0\n0\n3.4.5.1.9.2 Long-\nterm\n0\n0\n0\n3.4.5.2 General\ngovernment\n743.84649364795575\n0\n7\n3.4.5.2.1 Short-term\n743.84649364795575\n0\n7\n3.4.5.2.2 Long-term\n0\n0\n0\n3.4.5.3 Deposit-\ntaking corporations\n0\n0\n0\n3.4.5.3.1 Short-term\n0\n0\n0\n3.4.5.3.2 Long-term\n0\n0\n0\n3.4.5.4 Other sectors 608.60167662105459\n0\n5\n3.4.5.4.0.1 Short-\nterm\n608.60167662105459\n0\n5\n3.4.5.4.0.2 Long-\nterm\n0\n0\n0\n3.4.5.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.5.4.1.1 Short-\nterm\n0\n0\n0\n3.4.5.4.1.2 Long-\nterm\n0\n0\n0\n3.4.5.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n608.60167662105459\n0\n5\n3.4.5.4.2.1 Short-\nterm\n608.60167662105459\n0\n5\n3.4.5.4.2.2 Long-\nterm\n0\n0\n0\n3.4.6 Other accounts\nreceivable/payable\n—other\n0\n0\n0\n3.4.6.1 Central bank 0\n0\n0\n3.4.6.1.1 Short-term\n0\n0\n0\n3.4.6.1.2 Long-term\n0\n0\n0\n3.4.6.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.6.1.9.1 Short-\nterm\n0\n0\n0\n3.4.6.1.9.2 Long-\nterm\n0\n0\n0\n3.4.6.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n0\n0\n3.4.6.2.1 Short-term\n0\n0\n0\n3.4.6.2.2 Long-term\n0\n0\n0\n3.4.6.3 General\ngovernment\n0\n0\n0\n3.4.6.3.1 Short-term\n0\n0\n0\n3.4.6.3.2 Long-term\n0\n0\n0\n3.4.6.4 Other sectors 0\n0\n0\n3.4.6.4.0.1 Short-\nterm\n0\n0\n0\n3.4.6.4.0.2 Long-\nterm\n0\n0\n0\n3.4.6.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.6.4.1.1 Short-\nterm\n0\n0\n0\n3.4.6.4.1.2 Long-\nterm\n0\n0\n0\n3.4.6.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n0\n0\n0\n3.4.6.4.2.1 Short-\nterm\n0\n0\n0\n3.4.6.4.2.2 Long-\nterm\n0\n0\n0\n3.4.7 Special\ndrawing rights\nn.a\n0\nn\nTable D.2.1.4A\nBalance of Payments\nBPM6 Compilation\n(₦' Billion)\n2015\n2\nNet acquisition of\nfinancial assets\nNet incurrence of\nliabilities\nN\nf\n3.5 Reserve assets\n-1150.1325281606205\nn.a\n-2\n3.5.1 Monetary gold 0\nn.a\n0\n3.5.1.1 Gold bullion\n0\nn.a\n0\n3.5.1.2 Unallocated\ngold accounts\n0\nn.a\n0\n3.5.2 Special\ndrawing rights\n0\nn.a\n0\n3.5.3 Reserve\nposition in the IMF\n0\nn.a\n0\n3.5.4 Other reserve\nassets\n-1150.1325281606205\nn.a\n-2\n3.5.4.1 Currency and\ndeposits\n-1150.1325281606205\nn.a\n-2\n3.5.4.1.1 Claims on\nmonetary authorities\n-1150.1325281606205\nn.a\n-2\n3.5.4.1.2 Claims on\nother entities\n0\nn.a\n0\n3.5.4.2 Securities\n0\nn.a\n0\n3.5.4.2.1 Debt\nsecurities\n0\nn.a\n0\n3.5.4.2.1.1 Short-\nterm\n0\nn.a\n0\n3.5.4.2.1.2 Long-\nterm\n0\nn.a\n0\n3.5.4.2.2 Equity and\ninvestment fund\nshares\n0\nn.a\n0\n3.5.4.3 Financial\nderivatives\n0\nn.a\n0\n3.5.4.4 Other claims 0\n0\n0\n3 Total assets/\nliabilities\n1365.0117009209221\n1361.3955062799857\n9\nOf which: (by\ninstrument):\n0\n0\n0\n3.0.1 Equity and\ninvestment fund\nshares\n0\n0\n0\n3.0.1.1 Equity\n0\n0\n0\n3.0.1.2 Investment\nfund shares\n0\n0\n0\n3.0.2 Debt\ninstruments\n0\n0\n0\n3.0.2.1 Special\ndrawing rights\n0\n0\n0\n3.0.2.2 Currency and\ndeposits\n0\n0\n0\n3.0.2.3 Debt\nsecurities\n0\n0\n0\n3.0.2.4 Loans\n0\n0\n0\n3.0.2.5 Insurance,\npension, and\nstandardized\nguarantee schemes\n0\n0\n0\n3.0.2.6 Other\naccounts receivable/\npayable\n0\n0\n0\n3.0.3 Other financial\nassets and liabilities\n0\n0\n0\n3.0.3.1 Monetary\ngold\n0\nn.a\n0\n3.0.3.2 Financial\nderivatives and ESOs\n0\n0\n0\nCredits\nDebits\nC\nNet errors and\nomissions\n3235.45589490064\n0\n0\nMemorandum Items\n2015 1\n2\nCurrent Account\nBalance as % of GDP\n-3.1871790336018759\n0\nCapital and Financial\nAccount Balance as\n% of GDP\n-0.21220410131390258\n0\nOverall Balance as %\nof GDP\n-1.208405011890088\n-0\nExternal Reserves -\nStock (US$' Billion)\n28.28482\n2\nNumber of Months\nof Imports\nEquivalent\n6.4855145364511992\n9\nExternal Debt Stock\n(US$' Billion)\n10.718431494799999\n1\nEffective Central\nExchange Rate (N/$)\n196.48650000000001\n2\nEnd-Period Exchange\nRate (N/$)\n197\n3\nExceptional\nFinancing\n1. Current and/or\ncapital transfers\n0\n0\n1.1 Debt forgiveness 0\n0\n1.2 Other\nintergovernmental\ngrants\n0\n1.3 Grants received\nfrom IMF subsidy\naccounts\n0\n2. Direct investment\n0\n2.1 Equity\ninvestment\nassociated with debt\nreduction\n0\n2.2 Debt instruments 0\n0\n3. Portfolio\ninvestment—\nliabilities\n0\n0\n4. Other investment\n—liabilities\n0\n0\n4.1 Drawings on new\nloans by authorities\nor by other sectors\non behalf of\nauthorities\n0\n0\n4.2 Rescheduling of\nexisting debt\n0\n0\n5.Arrears\n0\n0\n5.1 Accumulation of\narrears\n0\n0\n5.1.1 Principal on\nshort-term debt\n0\n0\n5.1.2 Principal on\nlong-term debt\n0\n0\n5.1.3 Original\ninterest\n0\n0\n5.1.4 Penalty\ninterest\n0\n0\n5.2 Repayment of\narrears\n0\n0\n5.2.1 Principal\n0\n0\n5.2.2 Interest\n0\n0\n5.3 Rescheduling of\narrears\n0\n0\n5.3.1 Principal\n0\n0\n5.3.2 Interest\n0\n0\n5.4 Cancellation of\narrears\n0\n0\n5.4.1 Principal\n0\n0\n5.4.2 Interest\n0\n0\nSource: Central Bank\nof Nigeria\nNotes: 1Revised\n2Provisional\nReturn to Menu\nTable D.2.1.4B\nBalance of Payments\nBPM6 Compilation\n(US$' Billion)\n2015\n201\nCredits\nDebits\nCre\nCurrent Account\n72095.87383898595\n87534.516372951257\n606\n1. Current account\nbalance (+ Surplus;\n- Deficit)\n0\n15438.642533965307\n272\n1.A Goods and\nservices\n49047.768015820635\n71947.444729147101\n384\nBalance on goods\nand services (+\nSurplus; - Deficit)\n0\n22899.676713326466\n0\n1.A.a Goods\n45887.738522121021\n52334.758960501167\n347\nBalance on trade in\ngoods (+ Surplus; -\nDeficit)\n0\n6447.0204383801465\n0\n1.A.a.1 General\nmerchandise on a\nBOP basis\n45887.738522121021\n52334.758960501167\n347\nOf which: 1.A.a.1.1\nRe-exports\nn.a\n1.A.a.2 Net exports\nof goods under\nmerchanting\n0\nn.a\n0\n1.A.a.2.1 Goods\nacquired under\nmerchanting\n0\nn.a\n0\n1.A.a.2.2 Goods sold\nunder merchanting\n0\nn.a\n0\n1.A.a.3\nNonmonetary gold\n1.A.b Services\n3160.0294936996174\n19612.685768645941\n374\nBalance on trade in\nservices (+ Surplus;\n- Deficit)\n0\n16452.656274946323\n0\n1.A.b.1\nManufacturing\nservices on physical\ninputs owned by\nothers\n0\n0\n0\n1.A.b.1.1 Goods for\nprocessing in\nreporting economy—\nGoods returned ,\nreceived\n0\n0\n0\n1.A.b.1.2 Goods for\nprocessing abroad—\nGoods sent, Goods\nreturned\n0\n0\n0\n1.A.b.2 Maintenance\nand repair services\nn.i.e.\n0\n27.65\n0\n1.A.b.3 Transport\n1808.0387777784103\n7735.0534032163532\n166\n1.A.b.3.1 Sea\ntransport\n1731.7807777784103\n4204.9723074110489\n162\n1.A.b.3.1.1\nPassenger\n2.8275000000000001\n4.3099999999999996\n0.9\nOf which:\n1.A.b.3.1.1.1\nPayable by border,\nseasonal and other\nshort-term workers\n0\n0\n0\n1.A.b.3.1.2 Freight\n428.17449999999997\n4155.4923074110484\n350\n1.A.b.3.1.3 Other\n1300.7787777784104\n45.17\n127\n1.A.b.3.2 Air\ntransport\n76.257999999999996\n3440.421095805304\n36.\n1.A.b.3.2.1\nPassenger\n53.722499999999997\n3401.1284999999998\n17.\nOf which:\n1.A.b.3.2.1.1\nPayable by border,\nseasonal and other\nshort-term workers\n0\n0\n0\n1.A.b.3.2.2 Freight\n22.535500000000003\n2.11\n18.\n1.A.b.3.2.3 Other\n0\n37.182595805303933\n0\n1.A.b.3.3 Other\nmodes of transport\n0\n76.14\n0\n1.A.b.3.3.1\nPassenger\n0\n6.1800000000000006\n0\nOf which:\n1.A.b.3.3.1.1\nPayable by border,\nseasonal, and other\nshort-term workers\n0\n0\n0\n1.A.b.3.3.2 Freight\n0\n9.75\n0\n1.A.b.3.3.3 Other\n0\n60.21\n0\n1.A.b.3.4 Postal and\ncourier services ( For\nall modes of\ntransport)\n0\n13.52\n0\n1.A.b.3.0.1\nPassenger\n0\n0\n0\nOf which:\n1.A.b.3.0.1.1\nPayable by border,\nseasonal, and other\nshort-term workers\n0\n0\n0\n1.A.b.3.0.2 Freight\n0\n0\n0\n1.A.b.3.0.3 Other\n0\n13.52\n0\n1.A.b.4 Travel\n403.916\n5605.2010740840005\n107\n1.A.b.4.1 Business\n0\n1310.6251990839999\n0\n1.A.b.4.1.1\nAcquisition of goods\nand services by\nborder, seasonal,\nand short term\nworkers\n0\n0\n0\n1.A.b.4.1.2 Other\n0\n1310.6251990839999\n0\n1.A.b.4.2 Personal\n403.916\n4294.5758750000005\n107\n1.A.b.4.2.1 Health-\nrelated\n0\n746.3537500000001\n0\n1.A.b.4.2.2\nEducation-related\n0\n2247.4909374999997\n0\n1.A.b.4.2.3 Other\n403.916\n1300.7311875\n107\nFor both business\nand personal travel\n0\n0\n0\n1.A.b.4.0.1 Goods\n0\n0\n0\n1.A.b.4.0.2 Local\ntransport services\n0\n0\n0\n1.A.b.4.0.3\nAccommodation\nservices\n0\n0\n0\n1.A.b.4.0.4 Food-\nserving services\n0\n0\n0\n1.A.b.4.0.5 Other\nservices\n0\n0\n0\nOf which:\n1.A.b.4.0.5.1 Health\nservices\n0\n0\n0\n1.A.b.4.0.5.2\nEducation services\n0\n0\n0\n1.A.b.5 Construction 0\n51.5\n0\n1.A.b.5.1\nConstruction abroad\n0\n0\n0\n1.A.b.5.2\nConstruction in the\nreporting economy\n0\n51.5\n0\n1.A.b.6 Insurance\nand pension services\n43.109999999999992\n332.38517267958912\n79.\n1.A.b.6.1 Direct\ninsurance\n43.109999999999992\n328.33907267958915\n79.\n1.A.b.6.2\nReinsurance\n0\n3.1580999999999997\n0\n1.A.b.6.3 Auxiliary\ninsurance services\n0\n0.88800000000000001 0\n1.A.b.6.4 Pension\nand standardized\nguarantee services\n0\n0\n0\n1.A.b.7 Financial\nservices\n253.55970992913711\n1119.0899999999999\n248\n1.A.b.7.1 Explicitly\ncharged and other\nfinancial services\n253.55970992913711\n1119.0899999999999\n248\n1.A.b.7.2 Financial\nintermediation\nservices indirectly\nmeasured (FISIM)\n0\n0\n0\n1.A.b.8 Charges for\nthe use of\nintellectual property\nn.i.e.\n0\n252.83999999999995\n0\n1.A.b.9\nTelecommunications,\ncomputer, and\ninformation services\n77.184000000000012\n1042.4290000000001\n117\n1.A.b.9.1\nTelecommunications\nservices\n77.184000000000012\n704.01600000000008\n117\n1.A.b.9.2 Computer\nservices\n0\n325.17500000000001\n0\n1.A.b.9.3\nInformation services\n0\n13.238000000000001\n0\nTable D.2.1.4B\nBalance of Payments\nBPM6 Compilation\n(US$' Billion)\n2015\n201\nCredits\nDebits\nCre\n1.A.b.10 Other\nbusiness services\n87.529929999999993\n1959.233537176\n64.\n1.A.b.10.1 Research\nand development\nservices\n0\n0.47333333333333333 0\n1.A.b.10.2\nProfessional and\nmanagement\nconsulting services\n0\n925.67625193919991\n0\n1.A.b.10.3\nTechnical, trade-\nrelated, and other\nbusiness services\n87.529929999999993\n1033.0839519034669\n64.\n1.A.b.11 Personal,\ncultural, and\nrecreational services\n0\n160.74600000000001\n0\n1.A.b.11.1\nAudiovisual and\nrelated services\n0\n0\n0\n1.A.b.11.2 Other\npersonal, cultural,\nand recreational\nservices\n0\n160.74600000000001\n0\n1.A.b.12\nGovernment goods\nand services n.i.e.\n486.6910759920691\n1326.5575814900001\n498\n1.A.b.0.1 Tourism-\nrelated services in\ntravel and passenger\ntransport\n0\n0\n0\n1.B Primary income\n930.77082316531255\n13638.52224088511\n125\nBalance on primary\nincome (+ Surplus; -\nDeficit)\n0\n12707.751417719797\n0\n1.B.1 Compensation\nof employees\n217.866924007931\n13.12115\n191\n1.B.2 Investment\nincome\n712.9038991573816\n13625.401090885109\n105\n1.B.2.1 Direct\ninvestment\n300.5638669450687\n12462.677674117558\n340\n1.B.2.1.1 Income on\nequity and\ninvestment fund\nshares\n297.60386694506872\n12413.018854117558\n336\n1.B.2.1.1.1\nDividends and\nwithdrawals from\nincome of quasi-\ncorporation\n270.00783025056182\n10274.999854117557\n302\n1.B.2.1.1.1.1 Direct\ninvestor in direct\ninvestment\nenterprises\n270.00783025056182\n10274.999854117557\n302\n1.B.2.1.1.1.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n1.B.2.1.1.1.3\nBetween fellow\nenterprises\n0\n0\n0\n1.B.2.1.1.1.3.1 if\nultimate controlling\nparent is resident\n1.B.2.1.1.1.3.2 if\nultimate controlling\nparent is nonresident\n1.B.2.1.1.1.3.3 if\nultimate controlling\nparent is unknown\n1.B.2.1.1.2\nReinvested earnings\n27.596036694506871\n2138.0190000000002\n34.\nInvestment income\nattributable to\npolicyholders in\ninsurance, pension\nschemes, and\nstandardized\nguarantees, and to\ninvestment fund\nshareholders\nOf which:\nInvestment income\nattributable to\ninvestment fund\nshareholders\n1.B.2.1.2 Interest\n2.96\n49.658819999999999\n3.6\n1.B.2.1.2.1 Direct\ninvestor in direct\ninvestment\nenterprises\n2.96\n49.658819999999999\n3.6\n1.B.2.1.2.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n1.B.2.1.2.3 Between\nfellow enterprises\n0\n0\n0\n1.B.2.1.2.3.1 if\nultimate controlling\nparent is resident\n1.B.2.1.2.3.2 if\nultimate controlling\nparent is nonresident\n1.B.2.1.2.3.3 if\nultimate controlling\nparent is unknown\n1.B.2.1.2M\nMemorandum:\nInterest before FISIM\n1.B.2.2 Portfolio\ninvestment\n23.131575262719963\n554.80718877772915\n248\n1.B.2.2.1 Investment\nincome on equity\nand investment fund\nshares\n0\n121.9654\n51.\n1.B.2.2.1.1\nDividends on equity\nexcluding\ninvestment fund\nshares\n0\n121.9654\n51.\n1.B.2.2.1.2\nInvestment income\nattributable to\ninvestment fund\nshareholders\n0\n0\n0\n1.B.2.2.1.2.1\nDividends\n1.B.2.2.1.2.2\nReinvested earnings\n1.B.2.2.2 Interest\n23.131575262719963\n432.84178877772916\n197\n1.B.2.2.2.1 Short-\nterm\n23.131575262719963\n319.38599999999997\n197\n1.B.2.2.2.2 Long-\nterm\n0\n113.4557887777292\n0\n1.B.2.3 Other\ninvestment\n226.0430586195929\n607.91622798982189\n249\n1.B.2.3.1\nWithdrawals from\nincome of quasi-\ncorporations\n0\n0\n0\n1.B.2.3.2 Interest\n226.0430586195929\n607.91622798982189\n249\n1.B.2.3.2M\nMemorandum:\nInterest before FISIM\n0\n0\n0\n1.B.2.3.3 Investment\nincome attributable\nto policyholders in\ninsurance, pension\nschemes, and\nstandardized\nguarantee schemes\n0\n0\n0\n1.B.2.4 Reserve\nassets\n163.16539833000002\n0\n221\n1.B.2.4.1 Income on\nequity and\ninvestment fund\nshares\n0\n0\n0\n1.B.2.4.2 Interest\n163.16539833000002\n0\n221\n1.B.2.4.2M\nMemorandum:\nInterest before FISIM\n0\n0\n0\n1.B.3 Other primary\nincome\n0\n0\n0\n1.B.3.1 Taxes on\nproduction and on\nimports\n0\n0\n0\n1.B.3.2 Subsidies\n0\n0\n0\n1.B.3.3 Rent\n0\n0\n0\nBalance on goods,\nservices, and\nprimary income\n49978.538838985951\n85585.966970032212\n396\nTable D.2.1.4B\nBalance of Payments\nBPM6 Compilation\n(US$' Billion)\n2015\n201\nCredits\nDebits\nCre\n1.C Secondary\nincome\n22117.334999999999\n1948.5494029190413\n209\nBalance on\nsecondary income\n(+ Surplus; -\nDeficit)\n20168.785597080958\n0\n198\n1.C.1 General\ngovernment\n1672.5114999999998\n150.654\n140\n1.C.1.1 Current taxes\non income, wealth,\netc.\n0\nn.a\n0\nOf which:1.C.1.1.1\npayable by border,\nseasonal, and other\nshort-term workers\n0\nn.a\n0\n1.C.1.2 Social\ncontributions\n0\nn.a\n0\nOf which:1.C.1.2.1\npayable by border,\nseasonal, and other\nshort-term workers\n0\nn.a\n0\n1.C.1.3 Social\nbenefits\nn.a\n0\nn.a\n1.C.1.4 Current\ninternational\ncooperation\n169.49\n150.654\n179\n1.C.1.5\nMiscellaneous\ncurrent transfers of\ngeneral government\n1503.0214999999998\n0\n122\nOf which: 1.C.1.5.1\nCurrent transfers to\nNPISHs\n0\n0\n0\n1.C.2 Financial\ncorporations,\nnonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n20444.823499999999\n1797.8954029190413\n195\n1.C.2.1 Personal\ntransfers (Current\ntransfers between\nresident and\nnonresident\nhousehold)\n20408.18\n1022.33\n195\nOf which: 1.C.2.1.1\nWorkers’ remittances\n20408.18\n1022.33\n195\n1.C.2.2 Other\ncurrent transfers\n0\n0\n0\n1.C.2.0.1 Current\ntaxes on income,\nwealth, etc.\nn.a\n0\nn.a\n1.C.2.0.2 Social\ncontributions\n0\n0\n0\n1.C.2.0.3 Social\nbenefits\n0\n0\n0\n1.C.2.0.4 Net nonlife\ninsurance premiums\n36.643499999999996\n775.56540291904139\n29.\n1.C.2.0.5 Nonlife\ninsurance claims\n0\n0\n0\n1.C.2.0.6 Current\ninternational\ncooperation\n0\n0\n0\n1.C.2.0.7\nMiscellaneous\ncurrent transfers\n0\n0\n0\nOf which:1.C.2.0.7.1\nCurrent transfers to\nNPISHs\n0\n0\n0\n1.C.3 Adjustment for\nchange in pension\nentitlements\n0\n0\n0\n2 Capital account\n0\n0\n0\nCapital account\nbalance (+ Surplus;\n- Deficit)\n0\n0\n0\n2.1 Gross\nacquisitions /\ndisposals of\nnonproduced\nnonfinancial assets\n2.2 Capital transfers\n0\n0\n0\n2.2.1 General\ngovernment\n0\n0\n0\n2.2.1.1 Debt\nforgiveness\n2.2.1.2 Other capital\ntransfers\nOf which:2.2.1.2.1\nCapital taxes\n2.2.2 Financial\ncorporations,\nnonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n0\n0\n0\n2.2.2.1 Debt\nforgiveness\n2.2.2.2 Other capital\ntransfers\nOf which: 2.2.2.2.1\nCapital taxes\nn.a\nn.a\nOf which: 2.2.2.0.1\nBetween households\nOf which:\nfor each item in\ncapital transfers:\nTransfers to NPISHs\nNet lending (+) /\nnet borrowing (-)\n(Balance from\ncurrent and capital\naccounts)\n0\n15438.642533965307\n272\nNet acquisition of\nfinancial assets\nNet incurrence of\nliabilities\nNet\nfina\n3 Financial account\n7664.9487806313518\n6637.0356229810013\n326\nNet lending / net\nborrowing (from\nfinancial account)\n(+ net lending; - net\nborrowing)\n1027.9131576503505\n0\n0\n3.1 Direct\ninvestment\n1435.2036366945069\n3064.1689044533332\n130\n3.1.1 Equity and\ninvestment fund\nshares\n1435.2036366945069\n3059.9489044533334\n130\n3.1.1.1 Equity other\nthan reinvestment of\nearnings\n1407.6076\n921.92990445333317\n127\n3.1.1.1.1 Direct\ninvestor in direct\ninvestment\nenterprises\n1407.6076\n921.92990445333317\n127\n3.1.1.1.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n3.1.1.1.3 Between\nfellow enterprises\n0\n0\n0\n3.1.1.1.3.1 if\nultimate controlling\nparent is resident\n0\n0\n0\n3.1.1.1.3.2 if\nultimate controlling\nparent is nonresident\n0\n0\n0\n3.1.1.1.3.3 if\nultimate controlling\nparent is unknown\n0\n0\n0\n3.1.1.2 Reinvestment\nof earnings\n27.596036694506871\n2138.0190000000002\n34.\nOf which: 3.1.1.0.1\nInvestment fund\nshares/units\n0\n0\n0\nOf which: 3.1.1.0.1.1\nMoney market fund\nshares/units\n0\n0\n0\n3.1.2 Debt\ninstruments\n0\n4.2200000000000006\n0\n3.1.2.1 Direct\ninvestor in direct\ninvestment\nenterprises\n0\n4.2200000000000006\n0\n3.1.2.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n3.1.2.3 Between\nfellow enterprises\n0\n0\n0\n3.1.2.3.1 if ultimate\ncontrolling parent is\nresident\n0\n0\n0\n3.1.2.3.2 if ultimate\ncontrolling parent is\nnonresident\n0\n0\n0\n3.1.2.3.3 if ultimate\ncontrolling parent is\nunknown\n0\n0\n0\nOf which: 3.1.2.0\nDebt securities\n0\n0\n0\n3.1.2.0.1 Direct\ninvestor in direct\ninvestment\nenterprises\n0\n0\n0\n3.1.2.0.2 Direct\ninvestment\nenterprises in direct\ninvestor (reverse\ninvestment)\n0\n0\n0\n3.1.2.0.3 Between\nfellow enterprises\n0\n0\n0\n3.1.2.0.3.1 if\nultimate controlling\nparent is resident\n0\n0\n0\n3.1.2.0.3.2 if\nultimate controlling\nparent is nonresident\n0\n0\n0\n3.1.2.0.3.3 if\nultimate controlling\nparent is unknown\n0\n0\n0\nTable D.2.1.4B\nBalance of Payments\nBPM6 Compilation\n(US$' Billion)\n2015\n201\nNet acquisition of\nfinancial assets\nNet incurrence of\nliabilities\nNet\nfina\n3.2 Portfolio\ninvestment\n1676.4974999999999\n2535.198173503527\n177\n3.2.1 Equity and\ninvestment fund\nshares\n1341.1979999999999\n476.61949999999888\n141\n3.2.1.1 Central bank n.a\n0\nn.a\n3.2.1.1.9 Monetary\nauthorities\nn.a\n0\nn.a\n3.2.1.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n0\n0\n3.2.1.3 General\ngovernment\nn.a\n0\nn.a\n3.2.1.4 Other sectors 1341.1979999999999\n476.61949999999888\n141\n3.2.1.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.2.1.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n1341.1979999999999\n476.61949999999888\n141\n3.2.1.0.1 Equity\nsecurities other than\ninvestment fund\nshares\n0\n0\n0\n3.2.1.0.1.1 Listed\n0\n0\n0\n3.2.1.0.1.2 Unlisted\n0\n0\n0\n3.2.1.0.2 Investment\nfund shares/units\n0\n0\n0\nOf which: 3.2.1.0.2.1\nReinvestment of\nearnings\n0\n0\n0\nOf which:\n3.2.1.0.2.0.1 Money\nmarket fund shares/\nunits\n0\n0\n0\n3.2.2 Debt securities 335.29949999999997\n3011.8176735035258\n35.\n3.2.2.1 Central bank 0\n0\n0\n3.2.2.1.1 Short-term\n0\n0\n0\n3.2.2.1.2 Long-term\n0\n0\n0\n3.2.2.1.9 Monetary\nauthorities\n0\n0\n0\n3.2.1.1.9.1 Short-\nterm\n0\n0\n0\n3.2.1.1.9.2 Long-\nterm\n0\n0\n0\n3.2.2.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n571.61\n0\n3.2.2.2.1 Short-term\n0\n571.61\n0\n3.2.2.2.2 Long-term\n0\n0\n0\n3.2.2.3 General\ngovernment\n0\n1745.473673503526\n0\n3.2.2.3.1 Short-term\n0\n0\n0\n3.2.2.3.2 Long-term\n0\n1745.473673503526\n0\n3.2.2.4 Other sectors 335.29949999999997\n694.73400000000015\n35.\n3.2.2.4.0.1 Short-\nterm\n335.29949999999997\n0\n35.\n3.2.2.4.0.2 Long-\nterm\n0\n694.73400000000015\n0\n3.2.2.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.2.2.4.1.1 Short-\nterm\n0\n0\n0\n3.2.2.4.1.2 Long-\nterm\n0\n0\n0\n3.2.2.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n335.29949999999997\n694.73400000000015\n35.\n3.2.2.4.2.1 Short-\nterm\n335.29949999999997\n0\n35.\n3.2.2.4.2.2 Long-\nterm\n0\n694.73400000000015\n0\n3.3 Financial\nderivatives (other\nthan reserves) and\nemployee stock\noptions\n0\n0\n0\n3.3.1 Central bank\n0\n0\n0\n3.3.1.9 Monetary\nauthorities\n0\n0\n0\n3.3.2 Deposit-taking\ncorporations, except\nthe central bank\n0\n0\n0\n3.3.3 General\ngovernment\n0\n0\n0\n3.3.4 Other sectors\n0\n0\n0\n3.3.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.3.4.2 Nonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n0\n0\n0\n3.3.0.1 Financial\nderivatives\n0\n0\n0\n3.3.0.1.1 Options\n0\n0\n0\n3.3.0.1.2 Forward-\ntype contracts\n0\n0\n0\n3.3.0.2.Employee\nstock options\n0\n0\n0\n3.4 Other investment 10406.741538736846\n1037.6685450241414\n275\n3.4.1 Other equity\n0\n0\n0\n3.4.2 Currency and\ndeposits\n4241.4278270853574\n746.00674461989456\n-29\n3.4.2.1 Central bank 0\n0\n0\n3.4.2.1.1 Short-term\n0\n0\n0\n3.4.2.1.2 Long-term\n0\n0\n0\n3.4.2.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.2.1.9.1 Short-\nterm\n0\n0\n0\n3.4.2.1.9.2 Long-\nterm\n0\n0\n0\n3.4.2.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n-4463.8449696346397\n746.00674461989456\n-12\n3.4.2.2.0.1 Of which:\nInterbank positions\n0\n0\n0\n3.4.2.2.1 Short-term\n-4463.8449696346397\n746.00674461989456\n-12\n3.4.2.2.2 Long-term\n0\n0\n0\n3.4.2.3 General\ngovernment\n-1350.8517433800002\n0\n-99\n3.4.2.3.1 Short-term\n-1350.8517433800002\n0\n-99\n3.4.2.3.2 Long-term\n0\n0\n0\n3.4.2.4 Other sectors 10056.124540099998\n0\n-15\n3.4.2.4.0.1 Short-\nterm\n10056.124540099998\n0\n-15\n3.4.2.4.0.2 Long-\nterm\n0\n0\n0\n3.4.2.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.2.4.1.1 Short-\nterm\n0\n0\n0\n3.4.2.4.1.2 Long-\nterm\n0\n0\n0\n3.4.2.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n10056.124540099998\nn.a\n-15\n3.4.2.4.2.1 Short-\nterm\n10056.124540099998\nn.a\n-15\n3.4.2.4.2.2 Long-\nterm\n0\nn.a\n0\n3.4.3 Loans\n-717.84706666666671\n291.66180040424683\n540\n3.4.3.1 Central bank 0\n0\n0\n3.4.3.1.1 Credit and\nloans with the IMF\n(other than reserves)\n0\n0\n0\n3.4.3.1.2 Other\nshort-term\n0\n0\n0\n3.4.3.1.3 Other long-\nterm\n0\n0\n0\nTable D.2.1.4B\nBalance of Payments\nBPM6 Compilation\n(US$' Billion)\n2015\n201\nNet acquisition of\nfinancial assets\nNet incurrence of\nliabilities\nNet\nfina\n3.4.3.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.3.1.9.1 Credit\nand loans with the\nIMF (other than\nreserves)\n0\n0\n0\n3.4.3.1.9.2 Other\nshort-term\n0\n0\n0\n3.4.3.1.9.3 Other\nlong-term\n0\n0\n0\n3.4.3.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n697.51880040424658\n0\n3.4.3.2.1 Short-term\n0\n697.51880040424658\n0\n3.4.3.2.2 Long-term\n0\n0\n0\n3.4.3.3 General\ngovernment\n0\n1009.78\n0\n3.4.3.3.1 Credit and\nloans with the IMF\n(other than reserves)\n0\n0\n0\n3.4.3.3.2 Other\nshort-term\n0\n0\n0\n3.4.3.3.3 Other long-\nterm\n0\n1009.78\n0\n3.4.3.4 Other sectors -717.84706666666671\n1415.6369999999997\n540\n3.4.3.4.0.1 Short-\nterm\n0\n0\n0\n3.4.3.4.0.2 Long-\nterm\n-717.84706666666671\n1415.6369999999997\n540\n3.4.3.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.2.4.1.1 Short-\nterm\n0\n0\n0\n3.4.2.4.1.2 Long-\nterm\n0\n0\n0\n3.4.3.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n-717.84706666666671\n1415.6369999999997\n540\n3.4.3.4.2.1 Short-\nterm\n0\n0\n0\n3.4.3.4.2.2 Long-\nterm\n-717.84706666666671\n1415.6369999999997\n540\n3.4.4 Insurance,\npension, and\nstandardized\nguarantee schemes\n0\n0\n0\n3.4.4.1 Central bank 0\n0\n0\n3.4.4.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.4.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n0\n0\n3.4.4.3 General\ngovernment\n0\n0\n0\n3.4.4.4 Other sectors 0\n0\n0\n3.4.4.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.4.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n0\n0\n0\n3.4.4.0.1 Nonlife\ninsurance technical\nreserves\n0\n0\n0\n3.4.4.0.2 Life\ninsurance and\nannuity entitlements\n0\n0\n0\n3.4.4.0.3 Pension\nentitlements\n0\n0\n0\n3.4.4.0.4 Claims of\npension funds on\npension managers\n0\n0\n0\n3.4.4.0.5\nEntitlements to\nnonpension benefits\n0\n0\n0\n3.4.4.0.6 Provisions\nfor calls under\nstandardized\nguarantees\n0\n0\n0\n3.4.5 Trade credit\nand advances\n6883.1607783181553\n0\n520\n3.4.5.1 Central bank 0\n0\n0\n3.4.5.1.1 Short-term\n0\n0\n0\n3.4.5.1.2 Long-term\n0\n0\n0\n3.4.5.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.5.1.9.1 Short-\nterm\n0\n0\n0\n3.4.5.1.9.2 Long-\nterm\n0\n0\n0\n3.4.5.2 General\ngovernment\n3785.7384280749857\n0\n286\n3.4.5.2.1 Short-term\n3785.7384280749857\n0\n286\n3.4.5.2.2 Long-term\n0\n0\n0\n3.4.5.3 Deposit-\ntaking corporations\n0\n0\n0\n3.4.5.3.1 Short-term\n0\n0\n0\n3.4.5.3.2 Long-term\n0\n0\n0\n3.4.5.4 Other sectors 3097.4223502431701\n0\n234\n3.4.5.4.0.1 Short-\nterm\n3097.4223502431701\n0\n234\n3.4.5.4.0.2 Long-\nterm\n0\n0\n0\n3.4.5.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.5.4.1.1 Short-\nterm\n0\n0\n0\n3.4.5.4.1.2 Long-\nterm\n0\n0\n0\n3.4.5.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n3097.4223502431701\n0\n234\n3.4.5.4.2.1 Short-\nterm\n3097.4223502431701\n0\n234\n3.4.5.4.2.2 Long-\nterm\n0\n0\n0\n3.4.6 Other accounts\nreceivable/payable\n—other\n0\n0\n0\n3.4.6.1 Central bank 0\n0\n0\n3.4.6.1.1 Short-term\n0\n0\n0\n3.4.6.1.2 Long-term\n0\n0\n0\n3.4.6.1.9 Monetary\nauthorities\n0\n0\n0\n3.4.6.1.9.1 Short-\nterm\n0\n0\n0\n3.4.6.1.9.2 Long-\nterm\n0\n0\n0\n3.4.6.2 Deposit-\ntaking corporations,\nexcept the central\nbank\n0\n0\n0\n3.4.6.2.1 Short-term\n0\n0\n0\n3.4.6.2.2 Long-term\n0\n0\n0\n3.4.6.3 General\ngovernment\n0\n0\n0\n3.4.6.3.1 Short-term\n0\n0\n0\n3.4.6.3.2 Long-term\n0\n0\n0\n3.4.6.4 Other sectors 0\n0\n0\n3.4.6.4.0.1 Short-\nterm\n0\n0\n0\n3.4.6.4.0.2 Long-\nterm\n0\n0\n0\n3.4.6.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.6.4.1.1 Short-\nterm\n0\n0\n0\n3.4.6.4.1.2 Long-\nterm\n0\n0\n0\n3.4.6.4.2\nNonfinancial\ncorporations,\nhouseholds, and\nNPISHs\n0\n0\n0\n3.4.6.4.2.1 Short-\nterm\n0\n0\n0\n3.4.6.4.2.2 Long-\nterm\n0\n0\n0\n3.4.7 Special\ndrawing rights\nn.a\nn.a\nTable D.2.1.4B\nBalance of Payments\nBPM6 Compilation\n(US$' Billion)\n2015\n201\nNet acquisition of\nfinancial assets\nNet incurrence of\nliabilities\nNet\nfina\n3.5 Reserve assets\n-5853.4938948000017\nn.a\n-98\n3.5.1 Monetary gold 0\nn.a\n0\n3.5.1.1 Gold bullion\n0\nn.a\n0\n3.5.1.2 Unallocated\ngold accounts\n0\nn.a\n0\n3.5.2 Special\ndrawing rights\n0\nn.a\n0\n3.5.3 Reserve\nposition in the IMF\n0\nn.a\n0\n3.5.4 Other reserve\nassets\n-5853.4938948000017\nn.a\n-98\n3.5.4.1 Currency and\ndeposits\n-5853.4938948000017\nn.a\n-98\n3.5.4.1.1 Claims on\nmonetary authorities\n-5853.4938948000017\nn.a\n-98\n3.5.4.1.2 Claims on\nother entities\n0\nn.a\n0\n3.5.4.2 Securities\n0\nn.a\n0\n3.5.4.2.1 Debt\nsecurities\n0\nn.a\n0\n3.5.4.2.1.1 Short-\nterm\n0\nn.a\n0\n3.5.4.2.1.2 Long-\nterm\n0\nn.a\n0\n3.5.4.2.2 Equity and\ninvestment fund\nshares\n0\nn.a\n0\n3.5.4.3 Financial\nderivatives\n0\nn.a\n0\n3.5.4.4 Other claims 0\n0\n3 Total assets/\nliabilities\n6947.1017139646847\n6928.6974233852479\n380\nOf which: (by\ninstrument):\n0\n0\n0\n3.0.1 Equity and\ninvestment fund\nshares\n0\n0\n0\n3.0.1.1 Equity\n0\n0\n0\n3.0.1.2 Investment\nfund shares\n0\n0\n0\n3.0.2 Debt\ninstruments\n0\n0\n0\n3.0.2.1 Special\ndrawing rights\n0\n0\n0\n3.0.2.2 Currency and\ndeposits\n0\n0\n0\n3.0.2.3 Debt\nsecurities\n0\n0\n0\n3.0.2.4 Loans\n0\n0\n0\n3.0.2.5 Insurance,\npension, and\nstandardized\nguarantee schemes\n0\n0\n0\n3.0.2.6 Other\naccounts receivable/\npayable\n0\n0\n0\n3.0.3 Other financial\nassets and liabilities\n0\n0\n0\n3.0.3.1 Monetary\ngold\n0\nn.a\n0\n3.0.3.2 Financial\nderivatives and ESOs\n0\n0\n0\nCredits\nDebits\nCre\nNet errors and\nomissions\n16466.555691615657\n0\n0\nMemorandum Items\n2015\n201\nCurrent Account\nBalance as % of GDP\n-3.1871790336018759\n0.6\nCapital and Financial\nAccount Balance as\n% of GDP\n-0.21220410131390258\n0.7\nOverall Balance as %\nof GDP\n-1.208405011890088\n-0.2\nExternal Reserves -\nStock (US$' Billion)\n28.28482\n26.\nNumber of Months\nof Imports\nEquivalent\n6.4855145364511992\n9.1\nExternal Debt Stock\n(US$' Billion)\n10.718431494799999\n11.\nEffective Central\nExchange Rate (N/$)\n196.48650000000001\n252\nEnd-Period Exchange\nRate (N/$)\n197\n305\nExceptional\nFinancing\n1. Current and/or\ncapital transfers\n0\n0\n1.1 Debt forgiveness 0\n0\n1.2 Other\nintergovernmental\ngrants\n0\n0\n1.3 Grants received\nfrom IMF subsidy\naccounts\n0\n0\n2. Direct investment\n0\n0\n2.1 Equity\ninvestment\nassociated with debt\nreduction\n0\n0\n2.2 Debt instruments 0\n0\n3. Portfolio\ninvestment—\nliabilities\n0\n0\n4. Other investment\n—liabilities\n0\n0\n4.1 Drawings on new\nloans by authorities\nor by other sectors\non behalf of\nauthorities\n0\n0\n4.2 Rescheduling of\nexisting debt\n0\n0\n5.Arrears\n0\n0\n5.1 Accumulation of\narrears\n0\n0\n5.1.1 Principal on\nshort-term debt\n0\n5.1.2 Principal on\nlong-term debt\n0\n0\n5.1.3 Original\ninterest\n0\n0\n5.1.4 Penalty\ninterest\n0\n0\n5.2 Repayment of\narrears\n0\n0\n5.2.1 Principal\n0\n5.2.2 Interest\n0\n0\n5.3 Rescheduling of\narrears\n0\n0\n5.3.1 Principal\n0\n0\n5.3.2 Interest\n0\n0\n5.4 Cancellation of\narrears\n0\n0\n5.4.1 Principal\n0\n0\n5.4.2 Interest\n0\n0\nSource: Central Bank\nof Nigeria\nNotes: 1Revised\n2Provisional\nReturn to\nMenu\nTable\nD.2.2.1:\nInternational\nInvestment\nPosition of\nNigeria (₦'\nBillion)\nType of\nAsset/\nLiability\n2005\n2006\n2007\nNet\ninternational\ninvestment\nposition of\nNigeria\n-2859.2378615399994\n709.21602053116294\n1036.56\nASSETS\n5396.3313171600003\n7759.720232931164\n8907.35\nDirect\ninvestment\nabroad\n39.347579999999994\n80.102049600000015\n177.712\nEquity\nCapital and\nReinvested\nEarnings\n39.347579999999994\n80.102049600000015\n177.712\nOther\nCapital\n0\n0\n0\nPortfolio\ninvestment\nabroad\n367.83134045999998\n557.87367977999997\n732.395\nEquity\nSecurities\n331.79879407499999\n503.22469522499995\n665.805\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n331.79879407499999\n503.22469522499995\n665.805\nOther Sector 0\n0\n0\nDebt\nSecurities\n36.032546385000003\n54.648984555000013\n66.5901\nBonds and\nNotes\n0\n0\n0\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nMoney\nMarket\n36.032546385000003\n54.648984555000013\n66.5901\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n36.032546385000003\n54.648984555000013\n66.5901\nOther Sector 0\n0\n0\nFinancial\nDerivatives\n0\n0\n0\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nOther Assets 1331.0300333999999\n1696.1659338511631\n1941.47\nTrade Credit 423.0359952\n602.45981870000003\n213.828\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 423.0359952\n602.45981870000003\n213.828\nLoans\n120.49349489999999\n134.80150839999999\n137.752\nMonetary\nAuthority\n0\n0\n0\nLong-term\n0\n0\n0\nShort-term\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nLong-term\n0\n0\n0\nShort-term\n0\n0\n0\nBanks\n120.49349489999999\n134.80150839999999\n137.752\nLong-term\n0\n0\n0\nShort-term\n120.49349489999999\n134.80150839999999\n137.752\nOther Sector 0\n0\n0\nLong-term\n0\n0\n0\nShort-term\n0\n0\n0\nCurrency\nand Deposits\n787.50054329999989\n958.90460675116287\n1589.89\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n112.7425428\n95.627850400000028\n238.223\nBanks\n463.23869999999999\n638.1051848511629\n930.748\nOther Sector 211.51930049999999\n225.17157150000003\n420.919\nReserve\nAssets\n3658.1223633\n5425.578569700001\n6055.77\nGold\n0\n0\n0\nSpecial\nDrawing\nRights\n5.3418899999999991E-2 5.3873400000000002E-2 9.43760\nReserve\nPosition in\nthe Fund\n(IMF)\n0\n0\n0\nForeign\nExchange\n3658.0689444\n5425.5246963000009\n6055.67\n2005\n2006\n2007\nLIABILITIES 8255.5691786999996\n7050.5042124000001\n7870.78\nDirect\ninvestment\nin Reporting\nEconomy\n3432.4900499999999\n4007.5152387000007\n4403.76\nEquity\nCapital and\nReinvested\nEarnings\n3260.8655475\n3838.5515812000003\n4243.88\nOther\nCapital\n171.62450250000001\n168.96365750000001\n159.882\nPortfolio\ninvestment\nin Reporting\nEconomy\n896.08250399999997\n1244.6281812999998\n1459.13\nEquity\nSecurities\n462.52949999999998\n684.32045000000005\n801.545\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 462.52949999999998\n684.32045000000005\n801.545\nDebt\nSecurities\n433.55300399999993\n560.3077313\n657.588\nBonds and\nNotes\n399.07826999999997\n522.66176900000005\n605.515\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n399.07826999999997\n522.66176900000005\n605.515\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nMoney\nMarket\n34.474734000000005\n37.645962300000008\n52.0731\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n34.474734000000005\n37.645962300000008\n52.0731\nOther Sector 0\n0\n0\nFinancial\nDerivatives\n0\n0\n0\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nOther\nLiabilities\n3926.9966246999998\n1798.3607924000003\n2007.88\nTrade Credit 0\n0\n0\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nLoans\n3209.2290146999999\n1078.2235103000003\n1245.30\nMonetary\nAuthority\n0\n0\n0\nLong-term\n0\n0\n0\nShort-term\n0\n0\n0\nGeneral\nGovernment\n2667.8440979999996\n519.00607400000013\n416.811\nLong-term\n2667.8440979999996\n519.00607400000013\n416.811\nShort-term\n0\n0\n0\nBanks\n128.3656167\n139.10368420000003\n291.233\nLong-term\n128.3656167\n139.10368420000003\n291.233\nShort-term\n0\n0\n0\nOther Sector 413.01929999999999\n420.11375210000006\n537.258\nLong-term\n413.01929999999999\n420.11375210000006\n537.258\nShort-term\n0\n0\n0\nCurrency\nand Deposits\n717.76760999999999\n720.13728209999999\n762.585\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n717.76760999999999\n720.13728209999999\n762.585\nOther Sector 0\n0\n0\nSource:\nCentral Bank\nof Nigeria\nNotes:\n1Revised\n2Provisional\nReturn to\nMenu\nTable\nD.2.2.2:\nInternational\nInvestment\nPosition\n(US$'\nMillion)\nType of\nAsset/\nLiability\n2005\n2006\n2007\nNet\ninternational\ninvestment\nposition of\nNigeria\n-21945.182758001378 5529.087241998619\n8786.6672419\nASSETS\n41417.847241998621 60495.207241998622 75505.237241\nDirect\ninvestment\nabroad\n302\n624.48\n1506.42\nEquity\nCapital and\nReinvested\nEarnings\n302\n624.48\n1506.42\nOther\nCapital\n0\n0\n0\nPortfolio\ninvestment\nabroad\n2823.174\n4349.2139999999999 6208.3240000\nEquity\nSecurities\n2546.6174999999998 3923.1674999999996 5643.8575000\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n2546.6174999999998 3923.1674999999996 5643.8575000\nOther Sector 0\n0\n0\nDebt\nSecurities\n276.55650000000003 426.04650000000004 564.4665\nBonds and\nNotes\n0\n0\n0\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nMoney\nMarket\n276.55650000000003 426.04650000000004 564.4665\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n276.55650000000003 426.04650000000004 564.4665\nOther Sector 0\n0\n0\nFinancial\nDerivatives\n0\n0\n0\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nOther Assets 10215.903241998618 13223.40324199862\n16457.343241\nTrade Credit 3246.88\n4696.8100000000004 1812.57\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 3246.88\n4696.8100000000004 1812.57\nLoans\n924.81\n1050.9199999999998 1167.6899999\nMonetary\nAuthority\n0\n0\n0\nLong-term\n0\n0\n0\nShort-term\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nLong-term\n0\n0\n0\nShort-term\n0\n0\n0\nBanks\n924.81\n1050.9199999999998 1167.6899999\nLong-term\n0\n0\n0\nShort-term\n924.81\n1050.9199999999998 1167.6899999\nOther Sector 0\n0\n0\nLong-term\n0\n0\n0\nShort-term\n0\n0\n0\nCurrency\nand Deposits\n6044.2132419986183 7475.6732419986192 13477.083241\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n865.32\n745.5200000000001\n2019.3600000\nBanks\n3555.4432419986188 4974.703241998619\n7889.7032419\nOther Sector 1623.45\n1755.45\n3568.02\nReserve\nAssets\n28076.77\n42298.11\n51333.15\nGold\n0\n0\n0\nSpecial\nDrawing\nRights\n0.41\n0.42\n0.8\nReserve\nPosition in\nthe Fund\n(IMF)\n0\n0\n0\nForeign\nExchange\n28076.36\n42297.69\n51332.35\n2005\n2006\n2007\nLIABILITIES 63363.03\n54966.12\n66718.569999\nDirect\ninvestment\nin Reporting\nEconomy\n26345\n31242.81\n37329.54\nEquity\nCapital and\nReinvested\nEarnings\n25027.75\n29925.56\n35974.26\nOther\nCapital\n1317.25\n1317.25\n1355.28\nPortfolio\ninvestment\nin Reporting\nEconomy\n6877.6\n9703.1899999999987 12368.689999\nEquity\nSecurities\n3550\n5335\n6794.49\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 3550\n5335\n6794.49\nDebt\nSecurities\n3327.6\n4368.1899999999996 5574.2\nBonds and\nNotes\n3063\n4074.7\n5132.79\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n3063\n4074.7\n5132.79\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nMoney\nMarket\n264.60000000000002 293.49\n441.40999999\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n264.60000000000002 293.49\n441.40999999\nOther Sector 0\n0\n0\nFinancial\nDerivatives\n0\n0\n0\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nOther\nLiabilities\n30140.43\n14020.12\n17020.34\nTrade Credit 0\n0\n0\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n0\n0\n0\nOther Sector 0\n0\n0\nLoans\n24631.43\n8405.8900000000012 10556.11\nMonetary\nAuthority\n0\n0\n0\nLong-term\n0\n0\n0\nShort-term\n0\n0\n0\nGeneral\nGovernment\n20476.2\n4046.2000000000007 3533.2000000\nLong-term\n20476.2\n4046.2000000000007 3533.2000000\nShort-term\n0\n0\n0\nBanks\n985.23\n1084.46\n2468.71\nLong-term\n985.23\n1084.46\n2468.71\nShort-term\n0\n0\n0\nOther Sector 3170\n3275.23\n4554.2\nLong-term\n3170\n3275.23\n4554.2\nShort-term\n0\n0\n0\nCurrency\nand Deposits\n5509\n5614.23\n6464.23\nMonetary\nAuthority\n0\n0\n0\nGeneral\nGovernment\n0\n0\n0\nBanks\n5509\n5614.23\n6464.23\nOther Sector 0\n0\n0\nSource:\nCentral Bank\nof Nigeria\nNotes:\n1Revised\n2Provisional\nReturn to\nMenu\nTable D.2.2.3A\nInternational\nInvestment\nPosition -\nBPM6 (US$'\nBillion)\n2015\n2016 1\nAssets\nLiabilities\nAssets\nNet\nInternational\nInvestment\nPosition\n0\n8263.7990244742105 0\n1 Direct\ninvestment\n2297.9000060254702 17633.006748324733 3958.251951\n1.1 Equity and\ninvestment\nfund shares\n2297.9000060254702 12267.655589733577 3958.251951\n1.1.1 Direct\ninvestor in\ndirect\ninvestment\nenterprises\n2297.9000060254702 11493.22459904748\n3958.251951\n1.1.2 Direct\ninvestment\nenterprises in\ndirect investor\n(reverse\ninvestment)\n0\n0\n0\n1.1.3 Between\nfellow\nenterprises\n0\n774.43099068609706 0\n1.1.3.1 if\nultimate\ncontrolling\nparent is\nresident\n0\n0\n0\n1.1.3.2 if\nultimate\ncontrolling\nparent is\nnonresident\n0\n774.43099068609706 0\n1.1.3.3 if\nultimate\ncontrolling\nparent is\nunknown\n0\n0\n0\nOf which:\n1.1.0.1\nInvestment\nfund shares/\nunits\n0\n0\n0\nOf which:\n1.1.0.1.1\nMoney market\nfund shares/\nunits\n0\n0\n0\n1.2 Debt\ninstruments\n0\n5365.3511585911565 0\n1.2.1 Direct\ninvestor in\ndirect\ninvestment\nenterprises\n0\n3173.3946967201132 0\n1.2.2 Direct\ninvestment\nenterprises in\ndirect investor\n(reverse\ninvestment)\n0\n0\n0\n1.2.0.1.3\nBetween fellow\nenterprises\n0\n2191.9564618710433 0\n1.2.3.1 if\nultimate\ncontrolling\nparent is\nresident\n0\n0\n0\n1.2.3.2 if\nultimate\ncontrolling\nparent is\nnonresident\n0\n2191.9564618710433 0\n1.2.3.3 if\nultimate\ncontrolling\nparent is\nunknown\n0\n0\n0\nOf which:\n1.2.0.1 Debt\nsecurities\n0\n0\n0\n1.2.0.1.1\nDirect investor\nin direct\ninvestment\nenterprises\n0\n0\n0\n1.2.0.1.2\nDirect\ninvestment\nenterprises in\ndirect investor\n(reverse\ninvestment)\n0\n0\n0\n1.2.0.1.3\nBetween fellow\nenterprises\n0\n0\n0\n1.2.0.1.3.1 if\nultimate\ncontrolling\nparent is\nresident\n0\n0\n0\n1.2.0.1.3.2 if\nultimate\ncontrolling\nparent is\nnonresident\n0\n0\n0\n1.2.0.1.3.3 if\nultimate\ncontrolling\nparent is\nunknown\n0\n0\n0\n2 Portfolio\ninvestment\n4914.3636143124422 12181.072645251703 7669.412280\n2.1 Equity and\ninvestment\nfund shares\n4245.5743299499536 5361.4319381473915 6622.239275\n2.1.1 Central\nbank\n0\nn.a.\n0\n2.1.1.9\nMonetary\nauthorities\n0\nn.a.\n0\n2.1.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n4245.5743299499536 0\n6622.239275\n2.1.3 General\ngovernment\n0\nn.a.\n0\n2.1.4 Other\nsectors\n0\n5361.4319381473915 0\n2.1.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n2.1.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n5361.4319381473915 0\n2.1.0.1 Equity\nsecurities other\nthan\ninvestment\nfund shares/\nunits\n0\n5361.4319381473915 0\n2.1.0.1.1 Listed 0\n5361.4319381473915 0\n2.1.0.1.2\nUnlisted\n0\n0\n0\n2.1.0.2\nInvestment\nfund shares/\nunits\n0\n0\n0\nOf which:\n2.1.0.2.1\nMoney market\nfund shares/\nunits\n0\n0\n0\n2.2 Debt\nsecurities\n668.78928436248827 6819.6407071043104 1047.173005\n2.2.1 Central\nbank\n0\n0\n0\n2.2.1.1 Short-\nterm\n0\n0\n0\n2.2.1.2 Long-\nterm\n0\n0\n0\n2.2.1.9\nMonetary\nauthorities\n0\n0\n0\n2.1.1.9.1\nShort-term\n0\n0\n0\n2.1.1.9.2 Long-\nterm\n0\n0\n0\n2.2.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n668.78928436248827 1359.3354863145598 1047.173005\n2.2.2.1 Short-\nterm\n668.78928436248827 1359.3354863145598 1047.173005\n2.2.2.2 Long-\nterm\n0\n0\n0\n2.2.3 General\ngovernment\n0\n5460.3052207897508 0\n2.2.3.1 Short-\nterm\n0\n0\n0\n2.2.3.2 Long-\nterm\n0\n5460.3052207897508 0\n2.2.4 Other\nsectors\n0\n0\n0\n2.2.4.0.1\nShort-term\n0\n0\n0\n2.2.4.0.2 Long-\nterm\n0\n0\n0\n2.2.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n2.2.4.1.1\nShort-term\n0\n0\n0\n2.2.4.1.2 Long-\nterm\n0\n0\n0\n2.2.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n0\n0\n2.2.4.2.1\nShort-term\n0\n0\n0\n2.2.4.2.2 Long-\nterm\n0\n0\n0\n3 Financial\nderivatives\n(other than\nreserves) and\nemployee stock\noptions\n0\n0\n0\n3.1 Central\nbank\n0\n0\n0\n3.1.9 Monetary\nauthorities\n0\n0\n0\n3.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n0\n0\n0\n3.3 General\ngovernment\n0\n0\n0\n3.4 Other\nsectors\n0\n0\n0\n3.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n3.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n0\n0\n3.0.1 Financial\nderivatives\n(other than\nreserves)\n0\n0\n0\n3.0.1.1 Options 0\n0\n0\n3.0.1.2\nForward-type\ncontracts\n0\n0\n0\n3.0.2.Employee\nstock options\n0\n0\n0\n4 Other\ninvestment\n16450.171278176491 7300.1172822572053 23596.74294\n4.1 Other\nequity\n0\n0\n0\n4.2 Currency\nand deposits\n12239.235759406913 2371.6053477165169 18056.53431\n4.2.1 Central\nbank\n0\n0\n0\n4.2.1.0.1\nShort-term\n0\n0\n0\n4.2.1.0.2 Long-\nterm\n0\n0\n0\n4.2.1.9\nMonetary\nauthorities\n(where\nrelevant)\n0\n0\n0\n4.2.1.9.1\nShort-term\n0\n0\n0\n4.2.1.9.2 Long-\nterm\n0\n0\n0\n4.2.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n1422.5648236143081 2371.6053477165169 1811.530680\n4.2.2.1 Short-\nterm\n1422.5648236143081 2371.6053477165169 1811.530680\n4.2.2.2 Long-\nterm\n0\n0\n0\n4.2.3 General\ngovernment\n1687.7457486629548 0\n2584.960626\n4.2.3.1 Short-\nterm\n1687.7457486629548 0\n2584.960626\n4.2.3.2 Long-\nterm\n0\n0\n0\n4.2.4 Other\nsectors\n9128.925187129651\n0\n13660.04300\n4.2.4.0.1\nShort-term\n9128.925187129651\n0\n13660.04300\n4.2.4.0.2 Long-\nterm\n0\n0\n0\n4.2.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.2.4.1.1\nShort-term\n0\n0\n0\n4.2.4.1.2 Long-\nterm\n0\n0\n0\n4.2.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\nn.a.\nn.a.\nn.a.\n4.2.4.2.1\nShort-term\nn.a.\nn.a.\nn.a.\n4.2.4.2.2 Long-\nterm\nn.a.\nn.a.\nn.a.\n4.3 Loans\n2728.6987045892852 4928.5119345406883 3803.112271\n4.3.1 Central\nbank\n0\n0\n0\n4.3.1.1 Credit\nand loans with\nthe IMF (other\nthan reserves)\n0\n0\n0\n4.3.1.2 Other\nshort-term\n0\n0\n0\n4.3.1.3 Other\nlong-term\n0\n0\n0\n4.3.1.9\nMonetary\nauthorities\n(where\nrelevant)\n0\n0\n0\n4.3.1.9.1\nCredit and\nloans with the\nIMF (other\nthan reserves)\n0\n0\n0\n4.3.1.9.2 Other\nshort-term\n0\n0\n0\n4.3.1.9.3 Other\nlong-term\n0\n0\n0\n4.3.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n612.87905958928491 1337.8028853124886 785.0328123\n4.3.2.1 Short-\nterm\n0\n0\n0\n4.3.2.2 Long-\nterm\n612.87905958928491 1337.8028853124886 785.0328123\n4.3.3 General\ngovernment\n0\n2106.1717887281998 0\n4.3.3.1 Credit\nand loans with\nthe IMF (other\nthan reserves)\n0\n0\n0\n4.3.3.2 Other\nshort-term\n0\n0\n0\n4.3.3.3 Other\nlong-term\n0\n2106.1717887281998 0\nTable D.2.2.3A\nInternational\nInvestment\nPosition -\nBPM6 (US$'\nBillion)\n2015\n2016 1\nAssets\nLiabilities\nAssets\n4.3.4 Other\nsectors\n2115.819645\n1484.5372605\n3018.079459\n4.3.4.0.1\nShort-term\n0\n0\n0\n4.3.4.0.2 Long-\nterm\n2115.819645\n1484.5372605\n3018.079459\n4.3.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.2.4.1.1\nShort-term\n0\n0\n0\n4.2.4.1.2 Long-\nterm\n0\n0\n0\n4.3.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n1484.5372605\n3018.079459\n4.3.4.2.1\nShort-term\n0\n0\n0\n4.3.4.2.2 Long-\nterm\n0\n1484.5372605\n3018.079459\n4.4 Insurance,\npension, and\nstandardized\nguarantee\nschemes\n0\n0\n0\n4.4.1 Central\nbank\n0\n0\n0\n4.4.1.9\nMonetary\nauthorities\n0\n0\n0\n4.4.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n0\n0\n0\n4.4.3 General\ngovernment\n0\n0\n0\n4.4.4 Other\nsectors\n0\n0\n0\n4.4.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.4.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n0\n0\n4.4.0.1 Nonlife\ninsurance\ntechnical\nreserves\n0\n0\n0\n4.4.0.2 Life\ninsurance and\nannuity\nentitlements\n0\n0\n0\n4.4.0.3 Pension\nentitlements\n0\n0\n0\n4.4.0.4 Claims\nof pension\nfunds on\npension\nmanagers\n0\n0\n0\n4.4.0.5\nEntitlements to\nnonpension\nbenefits\n0\n0\n0\n4.4.0.6\nProvisions for\ncalls under\nstandardized\nguarantees\n0\n0\n0\n4.5 Trade\ncredit and\nadvances\n1482.2368141802931 0\n1737.096355\n4.5.1 Central\nbank\n0\n0\n0\n4.5.1.1 Short-\nterm\n0\n0\n0\n4.5.1.2 Long-\nterm\n0\n0\n0\n4.5.1.9\nMonetary\nauthorities\n0\n0\n0\n4.5.1.9.1\nShort-term\n0\n0\n0\n4.5.1.9.2 Long-\nterm\n0\n0\n0\n4.5.2 General\ngovernment\n0\n0\n0\n4.5.2.1 Short-\nterm\n0\n0\n0\n4.5.2.2 Long-\nterm\n0\n0\n0\n4.5.3 Deposit-\ntaking\ncorporations\n0\n0\n0\n4.5.3.1 Short-\nterm\n0\n0\n0\n4.5.3.2 Long-\nterm\n0\n0\n0\n4.5.4 Other\nsectors\n1482.2368141802931 0\n1737.096355\n4.5.4.0.1\nShort-term\n1482.2368141802931 0\n1737.096355\n4.5.4.0.2 Long-\nterm\n0\n0\n0\n4.5.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.5.4.1.1\nShort-term\n0\n0\n0\n4.5.4.1.2 Long-\nterm\n0\n0\n0\n4.5.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n1482.2368141802931 0\n1737.096355\n4.5.4.2.1\nShort-term\n1482.2368141802931 0\n1737.096355\n4.5.4.2.2 Long-\nterm\n0\n0\n0\n4.6 Other\naccounts\nreceivable/\npayable—other\n0\n0\n0\n4.6.1 Central\nbank\n0\n0\n0\n4.6.1.1 Short-\nterm\n0\n0\n0\n4.6.1.2 Long-\nterm\n0\n0\n0\n4.6.1.9\nMonetary\nauthorities\n0\n0\n0\n4.6.1.9.1\nShort-term\n0\n0\n0\n4.6.1.9.2 Long-\nterm\n0\n0\n0\n4.6.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n0\n0\n0\n4.6.2.1 Short-\nterm\n0\n0\n0\n4.6.2.2 Long-\nterm\n0\n0\n0\n4.6.3 General\ngovernment\n0\n0\n0\n4.6.3.1 Short-\nterm\n0\n0\n0\n4.6.3.2 Long-\nterm\n0\n0\n0\n4.6.4 Other\nsectors\n0\n0\n0\n4.6.4.0.1\nShort-term\n0\n0\n0\n4.6.4.0.2 Long-\nterm\n0\n0\n0\n4.6.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.6.4.1.1\nShort-term\n0\n0\n0\n4.6.4.1.2 Long-\nterm\n0\n0\n0\n4.6.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n0\n0\n4.6.4.2.1\nShort-term\n0\n0\n0\n4.6.4.2.2 Long-\nterm\n0\n0\n0\n4.7 Special\ndrawing rights\nn.a.\n0\nn.a.\n5 Reserve\nassets\n5558.5219563901046\n8218.631065\n5.1 Monetary\ngold\n0\n0\n5.1.1 Gold\nbullion\n0\n0\n5.1.2\nUnallocated\ngold accounts\n0\n0\n5.2 Special\ndrawing rights\n456.48009032820011\n611.9296511\n5.3 Reserve\nposition in the\nIMF\n0\n0\n5.4 Other\nreserve assets\n5102.0418660619043\n7606.701414\n5.4.1 Currency\nand deposits\n4747.5684492164692\n6898.147698\n5.4.1.1 Claims\non monetary\nauthorities\n0\n0\n5.4.1.2 Claims\non other\nentities\n4747.5684492164692\n6898.147698\n5.4.2 Securities 354.47341684543505\n708.5537161\n5.4.2.1 Debt\nsecurities\n354.47341684543505\n708.5537161\n5.4.2.1.1\nShort-term\n0\n0\n5.4.2.1.2 Long-\nterm\n354.47341684543505\n708.5537161\n5.4.2.2 Equity\nand investment\nfund shares\n0\n0\nof which:\n5.4.2.0.1\nSecurities\nunder repo for\ncash collateral\n0\n0\n5.4.3 Financial\nderivatives\n0\n0\n5.4.4 Other\nclaims\n0\n0\nTotal assets/\nliabilities\n28850.397651359432 37114.196675833642 43443.03823\nOf which: (by\ninstrument):\n0\n0\n0\n0.1 Equity and\ninvestment\nfund shares\n0\n0\n0\n0.1.1 Equity\n0\n0\n0\n0.1.2\nInvestment\nfund shares\n0\n0\n0\n0.2 Debt\ninstruments\n0\n0\n0\n0.2.1 Special\ndrawing rights\n0\n0\n0\n0.2.2 Currency\nand deposits\n0\n0\n0\n0.2.3 Debt\nsecurities\n0\n0\n0\n0.2.4 Loans\n0\n0\n0\n0.2.5\nInsurance,\npension, and\nstandardized\nguarantee\nschemes\n0\n0\n0\n0.2.6 Other\naccounts\nreceivable/\npayable\n0\n0\n0\n0.3 Other\nfinancial assets\nand liabilities\n0\n0\n0\n0.3.1 Monetary\ngold\n0\nn.a.\n0\n0.3.2 Financial\nderivatives and\nESOs\n0\n0\n0\nSource: Central\nBank of\nNigeria\nNotes:\n1Revised\n2Provisional\nReturn to\nMenu\nTable D.2.2.3B\nInternational\nInvestment\nPosition -\nBPM6 (₦'\nBillion)\n2015\n2016 1\nAssets\nLiabilities\nAssets\nNet\nInternational\nInvestment\nPosition\n0\n42054.956867553235 0\n1 Direct\ninvestment\n11694.147613361172 89735.403299362515 12999.18539\n1.1 Equity and\ninvestment\nfund shares\n11694.147613361172 62430.817250552551 12999.18539\n1.1.1 Direct\ninvestor in\ndirect\ninvestment\nenterprises\n11694.147613361172 58489.69261601771\n12999.18539\n1.1.2 Direct\ninvestment\nenterprises in\ndirect investor\n(reverse\ninvestment)\n0\n0\n0\n1.1.3 Between\nfellow\nenterprises\n0\n0\n0\n1.1.3.1 if\nultimate\ncontrolling\nparent is\nresident\n0\n0\n0\n1.1.3.2 if\nultimate\ncontrolling\nparent is\nnonresident\n0\n3941.124634534845\n0\n1.1.3.3 if\nultimate\ncontrolling\nparent is\nunknown\n0\n0\n0\nOf which:\n1.1.0.1\nInvestment\nfund shares/\nunits\n0\n0\n0\nOf which:\n1.1.0.1.1\nMoney market\nfund shares/\nunits\n0\n0\n1.2 Debt\ninstruments\n0\n27304.586048809957 0\n1.2.1 Direct\ninvestor in\ndirect\ninvestment\nenterprises\n0\n16149.591331908972\n1.2.2 Direct\ninvestment\nenterprises in\ndirect investor\n(reverse\ninvestment)\n0\n0\n0\n1.2.0.1.3\nBetween fellow\nenterprises\n0\n11154.994716900985 0\n1.2.3.1 if\nultimate\ncontrolling\nparent is\nresident\n0\n0\n0\n1.2.3.2 if\nultimate\ncontrolling\nparent is\nnonresident\n0\n11154.994716900985 0\n1.2.3.3 if\nultimate\ncontrolling\nparent is\nunknown\n0\n0\n0\nOf which:\n1.2.0.1 Debt\nsecurities\n0\n0\n0\n1.2.0.1.1\nDirect investor\nin direct\ninvestment\nenterprises\n0\n0\n0\n1.2.0.1.2\nDirect\ninvestment\nenterprises in\ndirect investor\n(reverse\ninvestment)\n0\n0\n0\n1.2.0.1.3\nBetween fellow\nenterprises\n0\n0\n0\n1.2.0.1.3.1 if\nultimate\ncontrolling\nparent is\nresident\n0\n0\n0\n1.2.0.1.3.2 if\nultimate\ncontrolling\nparent is\nnonresident\n0\n0\n0\n1.2.0.1.3.3 if\nultimate\ncontrolling\nparent is\nunknown\n0\n0\n0\n2 Portfolio\ninvestment\n25009.484042302505 61990.191578889069 25186.90404\n2.1 Equity and\ninvestment\nfund shares\n21605.976233842004 27284.640906602501 21747.91223\n2.1.1 Central\nbank\n0\nn.a.\n2.1.1.9\nMonetary\nauthorities\n0\nn.a.\n0\n2.1.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n21605.976233842004 0\n21747.91223\n2.1.3 General\ngovernment\n0\nn.a.\n0\n2.1.4 Other\nsectors\n0\n27284.640906602501 0\n2.1.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n2.1.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n27284.640906602501 0\n2.1.0.1 Equity\nsecurities other\nthan\ninvestment\nfund shares/\nunits\n0\n27284.640906602501 0\n2.1.0.1.1 Listed 0\n27284.640906602501 0\n2.1.0.1.2\nUnlisted\n0\n0\n0\n2.1.0.2\nInvestment\nfund shares/\nunits\n0\n0\n0\nOf which:\n2.1.0.2.1\nMoney market\nfund shares/\nunits\n0\n0\n0\n2.2 Debt\nsecurities\n3403.5078084605002 34705.550672286568 3438.991808\n2.2.1 Central\nbank\n0\n0\n0\n2.2.1.1 Short-\nterm\n0\n0\n0\n2.2.1.2 Long-\nterm\n0\n0\n0\n2.2.1.9\nMonetary\nauthorities\n0\n0\n0\n2.1.1.9.1\nShort-term\n0\n0\n0\n2.1.1.9.2 Long-\nterm\n0\n0\n0\n2.2.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n3403.5078084605002 6917.7378438399992 3438.991808\n2.2.2.1 Short-\nterm\n3403.5078084605002 6917.7378438399992 3438.991808\n2.2.2.2 Long-\nterm\n0\n0\n0\n2.2.3 General\ngovernment\n0\n27787.812828446571 0\n2.2.3.1 Short-\nterm\n0\n0\n0\n2.2.3.2 Long-\nterm\n0\n27787.812828446571\n2.2.4 Other\nsectors\n0\n0\n0\n2.2.4.0.1\nShort-term\n0\n0\n0\n2.2.4.0.2 Long-\nterm\n0\n0\n0\n2.2.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n2.2.4.1.1\nShort-term\n0\n0\n0\n2.2.4.1.2 Long-\nterm\n0\n0\n0\n2.2.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n0\n0\n2.2.4.2.1\nShort-term\n0\n0\n0\n2.2.4.2.2 Long-\nterm\n0\n0\n0\n3 Financial\nderivatives\n(other than\nreserves) and\nemployee stock\noptions\n3.1 Central\nbank\n3.1.9 Monetary\nauthorities\n3.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n3.3 General\ngovernment\n3.4 Other\nsectors\n3.4.1 Other\nfinancial\ncorporations\n3.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n3.0.1 Financial\nderivatives\n(other than\nreserves)\n3.0.1.1 Options\n3.0.1.2\nForward-type\ncontracts\n3.0.2.Employee\nstock options\n4 Other\ninvestment\n81830.086893798565 37150.724082733868 77493.40867\n4.1 Other\nequity\n4.2 Currency\nand deposits\n62286.187070773092 12069.238410771079 59298.96326\n4.2.1 Central\nbank\n0\n0\n0\n4.2.1.0.1\nShort-term\n0\n0\n0\n4.2.1.0.2 Long-\nterm\n0\n0\n0\n4.2.1.9\nMonetary\nauthorities\n(where\nrelevant)\n0\n0\n0\n4.2.1.9.1\nShort-term\n0\n0\n0\n4.2.1.9.2 Long-\nterm\n0\n0\n0\n4.2.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n7239.5156418030947 12069.238410771079 5949.197635\n4.2.2.1 Short-\nterm\n7239.5156418030947 12069.238410771079 5949.197635\n4.2.2.2 Long-\nterm\n0\n0\n0\n4.2.3 General\ngovernment\n8589.0368888699995 0\n8489.197460\n4.2.3.1 Short-\nterm\n8589.0368888699995 0\n8489.197460\n4.2.3.2 Long-\nterm\n0\n0\n0\n4.2.4 Other\nsectors\n46457.6345401\n0\n44860.56817\n4.2.4.0.1\nShort-term\n46457.6345401\n0\n44860.56817\n4.2.4.0.2 Long-\nterm\n0\n0\n0\n4.2.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.2.4.1.1\nShort-term\n0\n0\n0\n4.2.4.1.2 Long-\nterm\n0\n0\n0\n4.2.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\nn.a.\n0\n4.2.4.2.1\nShort-term\n0\nn.a.\n0\n4.2.4.2.2 Long-\nterm\n0\nn.a.\n0\n4.3 Loans\n13886.50740249\n25081.48567196279\n12489.69547\n4.3.1 Central\nbank\n0\n0\n0\n4.3.1.1 Credit\nand loans with\nthe IMF (other\nthan reserves)\n0\n0\n0\n4.3.1.2 Other\nshort-term\n0\n0\n0\n4.3.1.3 Other\nlong-term\n0\n0\n0\n4.3.1.9\nMonetary\nauthorities\n(where\nrelevant)\n0\n0\n0\n4.3.1.9.1\nCredit and\nloans with the\nIMF (other\nthan reserves)\n0\n0\n0\n4.3.1.9.2 Other\nshort-term\n0\n0\n0\n4.3.1.9.3 Other\nlong-term\n0\n0\n0\n4.3.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n3118.9774024899998 6808.1571771627914 2578.104473\n4.3.2.1 Short-\nterm\n0\n0\n0\n4.3.2.2 Long-\nterm\n3118.9774024899998 6808.1571771627914 2578.104473\n4.3.3 General\ngovernment\n0\n10718.431494799999 0\n4.3.3.1 Credit\nand loans with\nthe IMF (other\nthan reserves)\n0\n0\n0\n4.3.3.2 Other\nshort-term\n0\n0\n0\n4.3.3.3 Other\nlong-term\n0\n10718.431494799999 0\nTable D.2.2.3B\nInternational\nInvestment\nPosition -\nBPM6 (₦'\nBillion)\n2015\n2016 1\nAssets\nLiabilities\nAssets\n4.3.4 Other\nsectors\n10767.53\n7554.8969999999999 9911.591000\n4.3.4.0.1\nShort-term\n0\n0\n0\n4.3.4.0.2 Long-\nterm\n10767.53\n7554.8969999999999 9911.591000\n4.3.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.2.4.1.1\nShort-term\n0\n0\n0\n4.2.4.1.2 Long-\nterm\n0\n0\n0\n4.3.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n7554.8969999999999 9911.591000\n4.3.4.2.1\nShort-term\n0\n0\n0\n4.3.4.2.2 Long-\nterm\n0\n7554.8969999999999 9911.591000\n4.4 Insurance,\npension, and\nstandardized\nguarantee\nschemes\n0\n0\n0\n4.4.1 Central\nbank\n0\n0\n0\n4.4.1.9\nMonetary\nauthorities\n0\n0\n0\n4.4.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n0\n0\n0\n4.4.3 General\ngovernment\n0\n0\n0\n4.4.4 Other\nsectors\n0\n0\n0\n4.4.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.4.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n0\n0\n4.4.0.1 Nonlife\ninsurance\ntechnical\nreserves\n0\n0\n0\n4.4.0.2 Life\ninsurance and\nannuity\nentitlements\n0\n0\n0\n4.4.0.3 Pension\nentitlements\n0\n0\n0\n4.4.0.4 Claims\nof pension\nfunds on\npension\nmanagers\n0\n0\n0\n4.4.0.5\nEntitlements to\nnonpension\nbenefits\n0\n0\n0\n4.4.0.6\nProvisions for\ncalls under\nstandardized\nguarantees\n0\n0\n0\n4.5 Trade\ncredit and\nadvances\n5657.3924205354697 0\n5704.749935\n4.5.1 Central\nbank\n0\n0\n0\n4.5.1.1 Short-\nterm\n0\n0\n0\n4.5.1.2 Long-\nterm\n0\n0\n0\n4.5.1.9\nMonetary\nauthorities\n0\n0\n0\n4.5.1.9.1\nShort-term\n0\n0\n0\n4.5.1.9.2 Long-\nterm\n0\n0\n0\n4.5.2 General\ngovernment\n0\n0\n0\n4.5.2.1 Short-\nterm\n0\n0\n0\n4.5.2.2 Long-\nterm\n0\n0\n0\n4.5.3 Deposit-\ntaking\ncorporations\n0\n0\n0\n4.5.3.1 Short-\nterm\n0\n0\n0\n4.5.3.2 Long-\nterm\n0\n0\n0\n4.5.4 Other\nsectors\n5657.3924205354697 0\n5704.749935\n4.5.4.0.1\nShort-term\n7543.1898940472929 0\n5704.749935\n4.5.4.0.2 Long-\nterm\n0\n0\n0\n4.5.4.1 Other\nfinancial\ncorporations\n0\n0\n4.5.4.1.1\nShort-term\n0\n0\n0\n4.5.4.1.2 Long-\nterm\n0\n0\n0\n4.5.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n7543.1898940472929 0\n5704.749935\n4.5.4.2.1\nShort-term\n7543.1898940472929 0\n5704.749935\n4.5.4.2.2 Long-\nterm\n0\n0\n0\n4.6 Other\naccounts\nreceivable/\npayable—other\n0\n0\n0\n4.6.1 Central\nbank\n0\n0\n0\n4.6.1.1 Short-\nterm\n0\n0\n0\n4.6.1.2 Long-\nterm\n0\n0\n0\n4.6.1.9\nMonetary\nauthorities\n0\n0\n0\n4.6.1.9.1\nShort-term\n0\n0\n0\n4.6.1.9.2 Long-\nterm\n0\n0\n0\n4.6.2 Deposit-\ntaking\ncorporations,\nexcept the\ncentral bank\n0\n0\n0\n4.6.2.1 Short-\nterm\n0\n0\n0\n4.6.2.2 Long-\nterm\n0\n0\n0\n4.6.3 General\ngovernment\n0\n0\n0\n4.6.3.1 Short-\nterm\n0\n0\n0\n4.6.3.2 Long-\nterm\n0\n0\n0\n4.6.4 Other\nsectors\n0\n0\n0\n4.6.4.0.1\nShort-term\n0\n0\n0\n4.6.4.0.2 Long-\nterm\n0\n0\n0\n4.6.4.1 Other\nfinancial\ncorporations\n0\n0\n0\n4.6.4.1.1\nShort-term\n0\n0\n0\n4.6.4.1.2 Long-\nterm\n0\n0\n0\n4.6.4.2\nNonfinancial\ncorporations,\nhouseholds,\nand NPISHs\n0\n0\n0\n4.6.4.2.1\nShort-term\n0\n0\n0\n4.6.4.2.2 Long-\nterm\n0\n0\n0\n4.7 Special\ndrawing rights\nn.a.\nn.a.\nn.a.\n5 Reserve\nassets\n28287.643543969996\n26990.57821\n5.1 Monetary\ngold\n0\n0\n5.1.1 Gold\nbullion\n0\n0\n5.1.2\nUnallocated\ngold accounts\n0\n0\n5.2 Special\ndrawing rights\n2323.0538948000003\n2009.621186\n5.3 Reserve\nposition in the\nIMF\n0\n0\n5.4 Other\nreserve assets\n25964.589649169997\n24980.95702\n5.4.1 Currency\nand deposits\n24160.653685579997\n22654.01542\n5.4.1.1 Claims\non monetary\nauthorities\n0\n0\n5.4.1.2 Claims\non other\nentities\n24160.653685579997\n22654.01542\n5.4.2 Securities 1803.9359635900003\n2326.941596\n5.4.2.1 Debt\nsecurities\n1803.9359635900003\n2326.941596\n5.4.2.1.1\nShort-term\n0\n0\n5.4.2.1.2 Long-\nterm\n1803.9359635900003\n2326.941596\n5.4.2.2 Equity\nand investment\nfund shares\nof which:\n5.4.2.0.1\nSecurities\nunder repo for\ncash collateral\n5.4.3 Financial\nderivatives\n5.4.4 Other\nclaims\nTotal assets/\nliabilities\n146821.36209343222 188876.31896098546 142670.0763\nOf which: (by\ninstrument):\n0.1 Equity and\ninvestment\nfund shares\n0.1.1 Equity\n0.1.2\nInvestment\nfund shares\n0.2 Debt\ninstruments\n0.2.1 Special\ndrawing rights\n0.2.2 Currency\nand deposits\n0.2.3 Debt\nsecurities\n0.2.4 Loans\n0.2.5\nInsurance,\npension, and\nstandardized\nguarantee\nschemes\n0.2.6 Other\naccounts\nreceivable/\npayable\n0.3 Other\nfinancial assets\nand liabilities\n0.3.1 Monetary\ngold\n0.3.2 Financial\nderivatives and\nESOs\nSource: Central\nBank of\nNigeria\nNotes:\n1Revised\n2Provisional\nReturn\nto Menu\nTable\nD.3.1:\nExternal\nReserves\n(US$'\nMillion)\nYear\nJanuary\nFebruary\nMarch\n1981\n5177.8999999999996 5163.6000000000004 5572.1\n1982\n1679.9\n1726.6\n977.4\n1983\n1193.5999999999999 647\n562.200000000000\n1984\n224.4\n210.8\n333.1\n1985\n567.1\n779.4\n804.3\n1986\n1308.9000000000001 1320.3\n1030.8\n1987\n2287.019221\n2558.1\n9449.50514939999\n1988\n7925.6614\n8240.5976934999999 8555.53398700000\n1989\n4310.4602199999999 4769.7824034999994 4540.12131174999\n1990\n3386.7689559999999 3960.7350058112461 3770.02887948993\n1991\n4003.7532310000001 4682.2814850000004 4428.32000700000\n1992\n4109.6457246600003 5517.3574887000004 4109.64572443\n1993\n8365.6910475000004 1016.3623656100001 9505.26121050000\n1994\n7596.1677779000001 8388.8701612000004 9181.57254450000\n1995\n1295.1781232799999 1217.1391484599999 8028.98856059999\n1996\n1002.95246939\n1437.3254842599999 1849.15064486000\n1997\n4480.5192766700002 5352.1762589800001 6180.59157979999\n1998\n7464.7337724199997 8402.3934511900006 8319.59567828999\n1999\n6549.6\n6274.9\n5507.1\n2000\n5789.2\n6494.8\n6682.8\n2001\n9705\n10016.25\n10787.5\n2002\n9668.7800000000007 9768.4699999999993 9546.1\n2003\n7134.42\n7655.06\n8226.16\n2004\n8323.9959999999992 9352.4\n9684.49\n2005\n19592.64\n20554.09\n21807.98\n2006\n31317.94\n34319.11\n36201.54\n2007\n43510.78\n42550.61\n42633.86\n2008\n54215.79\n56908.42\n59756.51\n2009\n50108.65\n48113.06\n47081.9\n2010\n42075.67\n41410.1\n40667.03\n2011\n33131.83\n33246.07\n33221.8000000000\n2012\n34136.57\n33857.370000000003 35197.4400000000\n2013\n45824.443752799998 47295.845573990002 47884.1245184799\n2014\n40667.56\n36923.61\n37399.22\n2015\n32385.71\n29566.99\n29357.21\n2016\n27607.85\n27568.38\n27336.38\n2017\n28592.98\n29975.38\n29996.38\n2018\n41150.28\n45276.58\n46730.54\nSource:\nCentral\nBank of\nNigeria\nReturn to\nMenu\nTable\nD.3.2:\nExternal\nReserves\nAdequacy\n- Months\nof Import\nCover\nYear\n2008\n2009\n2010\nJanuary\n15.738384256382394 19.644548828834367 8.979609852963\nFebruary\n18.984322949226943 20.39503879345634\n10.47961856947\nMarch\n20.834805193454621 18.336926142743646 8.679034179959\nApril\n15.965502773035022 19.401204938999953 11.33212124424\nMay\n15.185164730406214 16.867966066994803 9.925777942641\nJune\n13.66405711972169\n14.708910778312603 9.308188862473\nJuly\n14.055428291992904 13.173435754245466 9.631110958709\nAugust\n17.406673363318596 12.849623814044481 8.554396970654\nSeptember 17.821509011148351 16.705001235145936 6.656658140092\nOctober\n14.972816361145552 14.985504911927269 8.911897187480\nNovember 16.037767351254086 14.588039326673846 7.636644000114\nDecember 19.335483053639024 14.574012506881619 8.400363369666\nAverage\n16.666826204560447 16.352517758188363 9.041285106539\nSource:\nCentral\nBank of\nNigeria\nReturn to\nMenu\nTable\nD.4.1:\nMonthly\nAverage\nOfficial\nExchange\nRate of the\nNaira (N/\nUS$1.00)\nYear\nJanuary\nFebruary\nMarch\n1981\n0.5323\n0.54690000000000005 0.572200000\n1982\n0.64370000000000005 0.65590000000000004 0.6643\n1983\n0.67359999999999998 0.69169999999999998 0.699899999\n1984\n0.74860000000000004 0.74860000000000004 0.748600000\n1985\n0.82030000000000003 0.84770000000000001 0.874600000\n1986\n0.99960000000000004 0.99960000000000004 1.0016\n1987\n3.6471\n3.7014\n3.9213\n1988\n4.1748000000000003\n4.2610999999999999\n4.316900000\n1989\n7.0388999999999999\n7.3822999999999999\n7.587100000\n1990\n7.8620999999999999\n7.9009\n7.938799999\n1991\n9.2120999999999995\n9.6107999999999993\n9.452099999\n1992\n9.5626999999999995\n10.226100000000001\n17.61070000\n1993\n20.107800000000001\n21.999199999999998\n24.88009999\n1994\n21.886099999999999\n21.886099999999999\n21.88609999\n1995\n21.886099999999999\n21.886099999999999\n21.88609999\n1996\n21.886099999999999\n21.886099999999999\n21.88609999\n1997\n21.886099999999999\n21.886099999999999\n21.88609999\n1998\n21.886099999999999\n21.886099999999999\n21.88609999\n1999\n86\n86\n86.96590000\n2000\n98.78\n99.914299999999997\n100.9319\n2001\n110.50449999999999\n110.705\n110.655\n2002\n113.96250000000001\n114.27589999999999\n116.04\n2003\n127.06950000000001\n127.315\n127.164\n2004\n136.0823\n135.16249999999999\n134.4317000\n2005\n132.86000000000001\n132.85\n132.85\n2006\n130.29\n129.59309999999999\n128.7042999\n2007\n128.27719999999999\n128.2687\n128.1512999\n2008\n117.9768\n118.21\n117.9218\n2009\n145.78030000000001\n147.14439999999999\n147.7226\n2010\n149.7792\n150.22239999999999\n149.8284999\n2011\n151.5455\n151.9391\n152.5073999\n2012\n158.38679999999999\n157.8681\n157.5875000\n2013\n157.30124761904761\n157.29941999999997\n157.3115\n2014\n157.2916285714285\n157.30749999999995\n157.3007666\n2015\n169.68\n179.74\n197.07\n2016\n197\n197\n197\n2017\n305.20238095238096\n305.3125\n306.4021739\n2018\n305.77727272727265\n305.89499999999992\n305.7428571\nSource:\nCentral\nBank of\nNigeria\nNotes: The\nDutch\nAuction\nSystem\n(DAS)\ncommenced\non July 22,\n2002\nThe\nWholesale\nDutch\nAuction\nSystem\n(WDAS)\ncommenced\non February\n20, 2006\nThe Retail\nDutch\nAuction\nSystem\n(RDAS)\ncommenced\non October\n2, 2013\nThe\nExchange\nRate from\nAugust\n2005,\nincludes 1%\nCommission\nup to 18th\nFebruary,\n2015.\nThe RDAS\nsegment of\nthe Foreign\nExchange\nMarket was\nclosed on\nFebruary\n18, 2015\nwhile the\nInterbank\nExchange\nRate\nbecame the\nreference\nofficial rate.\nReturn to\nMenu\nTable D.4.2:\nMonthly\nAverage\n(Official/\nAFEM1/\nDAS2)\nExchange\nRate of the\nNaira -\nCentral Rate\n(N/US$1.00)\nPeriod\nJanuary\nFebruary\nMarch\n1995\n79.895499999999998 80.458600000000004 81.59\n1996\n84.575000000000003 83.920400000000001 82.087500000\n1997\n79.599999999999994 79.599999999999994 82.742099999\n1998\n76.510300000000001 82.535300000000007 83.58\n1999\n85.57\n85.57\n86.662300000\n2000\n98.490499999999997 99.627399999999994 100.60809999\n2001\n109.99769999999999 110.1925\n110.15560000\n2002\n113.41589999999999 114.2526\n115.5579\n2003\n126.57181818181817 126.98444444444443 130.35203095\n2004\n135.53569999999999 134.65526\n133.9829\n2005\n132.38\n132.35319999999999 132.35249999\n2006\n129.785\n129.10329999999999 128.23560000\n2007\n127.1408\n127.1335\n127.1335\n2008\n116.89176590909084 116.87538571428571 116.83654166\n2009\n142.37125\n145.90588749999998 146.42745238\n2010\n147.822\n148.23736842105262 147.83500000\n2011\n149.54499999999999 149.93469999999999 150.48259999\n2012\n156.31857142857143 155.83000000000004 155.52727272\n2013\n155.24380952380952 155.24200000000002 155.25399999\n2014\n155.2342857142857\n155.25\n155.24333333\n2015\n167.5\n178.15\n196.57999999\n2016\n196.5\n196.5\n196.5\n2017\n304.70238095238096 304.8125\n305.90217391\n2018\n305.27727272727265 305.39499999999992 305.24047619\nSource:\nCentral Bank\nof Nigeria\nNotes:\n1Autonomous\nForeign\nExchange\nMarket\n(AFEM)\ncommenced\nin 1995\n2The Dutch\nAuction\nSystem (DAS)\nwas re-\nintroduced\non 22nd July,\n2002\nThe Initial\nBuying and\nSelling Rates\nwere\nN81.1800 /\nUS $1.00 and\nN82.0000/\nUS $1.00,\nrespectively\nThe\nWholesale\nDutch\nAuction\nSystem\n(WDAS)\ncommenced\non February\n20, 2006\nThe Retail\nDutch\nAuction\nSystem\n(RDAS)\ncommenced\non October 2,\n2013\nThe RDAS\nsegment of\nthe Foreign\nExchange\nMarket was\nclosed on\nFebruary 18,\n2015 while\nthe Interbank\nExchange\nRate became\nthe reference\nofficial rate.\nReturn to\nMenu\nTable\nD.4.3:\nNaira\nOfficial\nCross\nExchange\nRates -\nSelling\nYear\nUS\nPound\nDeutsche\nDollar\nSterling\nMark\n1981\n0.61\n1.2495000000000001 0.269911504424\n1982\n0.67290000000000005 1.1734\n0.277302716981\n1983\n0.72409999999999997 1.1215999999999999 0.283598223447\n1984\n0.76490000000000002 1.0765\n0.268768842631\n1985\n0.89380000000000004 1.1999\n0.303603637265\n1986\n2.0206\n2.5554000000000001 1.800999999999\n1987\n4.0179\n6.5929000000000002 2.237400000000\n1988\n4.5366999999999997\n8.0894999999999992 2.580099999999\n1989\n7.3916000000000004\n12.0695\n3.934899999999\n1990\n8.0378000000000007\n16.241900000000001 5.562400000000\n1991\n9.9094999999999995\n17.4955\n5.948400000000\n1992\n17.298400000000001\n27.868400000000001 11.1327\n1993\n22.051100000000002\n33.252200000000002 13.3871\n1994\n21.886099999999999\n33.425175000000003 13.523\n1995\n21.886099999999999\n34.524025000000002 15.089475\n1996\n21.886099999999999\n34.122900000000001 14.5962\n1997\n21.886075000000002\n35.769750000000002 12.65105\n1998\n21.885999999999999\n36.216574999999999 12.45872499999\nSource:\nCentral\nBank of\nNigeria\nReturn to\nMenu\nTable D.4.4:\nAverage\n(AFEM1/\nDAS2) Naira\nCross\nExchange\nRates -\nSelling\nYear\nUS\nPound\nDeutsche\nDollar\nSterling\nMark\n1995\n81.022800000000004 128.15610000000001 57.069200000\n1996\n81.252799999999993 126.4165\n53.844999999\n1997\n81.6494\n133.7389\n47.192700000\n1998\n83.807199999999995 142.61410000000001 51.2761\n1999 3\n92.342799999999997 156.43450000000001 50.90231\n2000\n100.80159999999999 149.53630000000001\n2001\n112.025185167299\n161.10488241500369\n2002\n120.97933280005019 182.05777000193441\n2003\n129.43227183929301 211.19989348192203\n2004\n133.50007626980823 244.52375294410265\n2005\n131.63914600000001 238.7723115\n2006\n127.38235069067501 234.73625704921281\n2007\n124.61179331515679 249.42309325218821\n2008\n117.69367934479918 218.24685578597405\n2009\n147.3958325833523\n230.64754672353232\n2010\n148.81266523398418 230.09068432223503\n2011\n152.32966997478326 244.26000961870807\n2012\n155.94017965367968 247.05827696836789\n2013\n155.75372515527951 243.67300419506557\n2014\n156.98281673881675 258.57615681816378\n2015\n192.30156881313133 294.12231111181126\n2016\n253.49225191946158 339.57528349975081\n2017\nQ1\n305.6390182884748\n378.54211251035196\nQ2\n305.76779100529092 391.17831262433873\nQ3\n305.80537939050527 400.67121781010496\nQ4\n305.94741462241456 406.0597636820587\n2018\nQ1\n305.80500000000001 425.66980000000001\nQ2\n305.76909999999998 415.7953\nQ3\n306.048\n398.95330000000001\nQ4\n306.70949999999999 394.71089999999998\nNotes:\n1Autonomous\nForeign\nExchange\nMarket\n(AFEM)\ncommenced\nin 1995\n2The Dutch\nAuction\nSystem (DAS)\nwas re-\nintroduced\non 22nd July,\n2002\n3The Euro\nbecame the\nofficial\ncurrency for\nGermany,\nFrance and\nThe\nNetherlands\neffective 1st\nJanuary\n1999.\nReturn to\nMenu\nTable\nD.4.5:\nNaira\nOfficial\nCross\nExchange\nRates -\nEnd\nPeriod\nYear\nUS\nPound\nDeutsche\nDollar\nSterling\nMark\n1981\n0.63690000000000002 0.82720000000000005 0.28246407663\n1982\n0.67020000000000002 0.91200000000000003 0.28201136124\n1983\n0.74860000000000004 0.92569999999999997 0.27483662530\n1984\n0.80830000000000002 0.91069999999999995 0.25676620076\n1985\n0.99960000000000004 0.69620000000000004 0.40612684353\n1986\n3.3166000000000002\n4.7411000000000003\n1.64640000000\n1987\n4.1916000000000002\n7.6055000000000001\n2.54380000000\n1988\n5.3529999999999998\n9.8496000000000006\n3.03889999999\n1989\n7.65\n12.4542\n4.56310000000\n1990\n9.0000999999999998\n17.0642\n5.92499999999\n1991\n9.7545000000000002\n16.893999999999998\n5.80419999999\n1992\n19.660900000000002\n30.8185\n12.3653999999\n1993\n22.6309\n33.8596\n13.5901999999\n1994\n21.886099999999999\n34.703899999999997\n14.2109000000\n1995\n21.886099999999999\n34.398299999999999\n15.1326\n1996\n21.886099999999999\n34.334000000000003\n14.5328\n1997\n21.886075000000002\n35.831650000000003\n12.610975\n1998\n21.885999999999999\n36.365524999999998\n12.49315\nSource:\nCentral\nBank of\nNigeria\nReturn to\nMenu\nTable D.4.6:\nEnd Period\nNaira Cross\nExchange\nRates -\nSelling\nYear\nUS\nPound\nDeutsche\nDollar\nSterling\nMark\n1995\n84.575000000000003 130.14400000000001 58.8307\n1996\n79.599999999999994 131.9821\n51.2856999999\n1997\n74.625\n124.3402\n42.0516999999\n1998\n84.367900000000006 140.20567500000001 48.1759750000\n1999 1\n92.528375000000011 146.50710000000001 49.7391250000\n2000\n109.55\n163.03229999999999\n2001\n113.45\n164.321\n2002\n126.9\n204.55009999999999\n2003\n137\n244.01070000000001\n2004\n132.85\n256.70609999999999\n2005\n129\n222.4863\n2006\n127\n249.38990000000001\n2007\n116.8\n234.0205\n2008\n131.25\n191.20500000000001\n2009\n148.1\n239.93680000000001\n2010\n148.81266523398418 230.09068432223503\n2011\n156.69999999999999 242.3366\n2012\n155.75666666666666 250.98633333333336\n2013\n155.73750000000001 245.51141625\n2014\n168\n262.24799999999999\n2015\n197\n291.93430000000001\n2016\n305\n375.18049999999999\n2017\nQ1\n306.35000000000002 382.50861000000003\nQ2\n305.89999999999998 397.11937999999998\nQ3\n305.75\n409.307525\nQ4\n306\n413.65079999999995\n2018\nQ1\n305.64999999999998 430.23\nQ2\n305.75\n402.45872500000002\nQ3\n306.35000000000002 399.44976500000007\nQ4\n307\n392.00829999999996\nSource:\nCentral\nBank of\nNigeria\nNotes: 1The\nEuro\nbecame the\nofficial\ncurrency for\nGermany,\nFrance and\nNetherland\neffective 1st\nJanuary\n1999.\nThe Inter\nBank\nForeign\nExchange\nMarket\n(IFEM)\nstarted on\nthe 25th\nOctober,\n1999\nPrevious\nrates were\nAutonomous\nForeign\nExchange\nMarket\n(AFEM)\nrates\nReturn to\nMenu\nTable\nD.4.7:\nMonthly\nOfficial\nExchange\nRate -\nEnd\nPeriod\n(N/\nUS$1.00)\nYear\nJanuary\nFebruary\nMarch\n1999\n90\n86\n90\n2000\n98.15\n100.45\n100.57\n2001\n110.8\n110.6\n110.7\n2002\n114.2\n115.7\n116.1\n2003\n127.27\n127.02\n127.22\n2004\n135.30000000000001 135\n133.69999999999\n2005\n132.86000000000001 132.86000000000001 132.86000000000\n2006\n130.29\n129.28\n128.52250000000\n2007\n128.2801\n128.2801\n128.05789999999\n2008\n117.9781\n117.9478\n117.8973\n2009\n145.95509999999999 147.30850000000001 147.15700000000\n2010\n150.31829999999999 150.09610000000001 149.78\n2011\n151.8535\n152.06559999999999 153.0352\n2012\n158.62049999999999 157.459\n157.5701\n2013\n157.29740000000001 157.3075\n157.3075\n2014\n157.3075\n157.3075\n157.29740000000\n2015\n169.68\n199.8\n197\n2016\n197\n197\n197\n2017\n305.25\n305.5\n306.35000000000\n2018\n305.7\n305.89999999999998 305.64999999999\nSource :\nCentral\nBank of\nNigeria\nReturn to\nMenu\nTable\nD.4.8:\nMonthly\nAverage\nExchange\nRate\nMovements\nat BDC,\nIFEM and I\n& E\nSegments\nof the\nFOREX\nMarket (N/\nUS$1.00)\nBureau-de-Change\nMonth\n2004\n2005\n2006\nJanuary\n147.64769999999999 139.80000000000001 144.09\nFebruary\n142.94999999999999 139.93\n145.4737000000\nMarch\n139.9239\n139.72999999999999 148.4565000000\nApril\n138.85230000000001 141.77000000000001 147.8471999999\nMay\n139.6429\n141.21\n142.3261\nJune\n140\n141.85\n136.8181999999\nJuly\n139.8409\n143.94\n130.119\nAugust\n140.3295\n145.82\n130.4565000000\nSeptember 141.0795\n145.80000000000001 130.21\nOctober\n140.53569999999999 144.99\n130.2955\nNovember\n140.69319999999999 143.94\n129.8181999999\nDecember\n138.71430000000001 141.93\n129.3158\nAverage\n140.85082500000001 142.55916666666667 137.102225\nEnd-Period 138.5\n141.5\n129.5\nSource:\nCentral\nBank of\nNigeria\nTable\nD.4.8:\nMonthly\nAverage\nExchange\nRate\nMovements\nat BDC,\nIFEM and I\n& E\nSegments\nof the\nFOREX\nMarket (N/\nUS$1.00)\nInter-Bank Rate\nMonth\n2004\n2005\n2006\nJanuary\n137.76\n133.11000000000001 129.9273\nFebruary\n136.44\n133.15\n129.3300000000\nMarch\n134.80000000000001 133.09\n128.6760999999\nApril\n137.22999999999999 133.06\n128.5763\nMay\n134.81\n133.37\n128.5696000000\nJune\n133.54\n134.35\n128.5\nJuly\n134.38999999999999 135.35\n128.4333\nAugust\n133.22999999999999 135.94\n128.4250000000\nSeptember 133.77000000000001 132.55000000000001 128.3881000000\nOctober\n133.76\n131.09\n128.4205\nNovember\n133.15\n130.80000000000001 128.4199999999\nDecember\n133.13999999999999 130.08000000000001 128.3947\nAverage\n134.66833333333332 132.99499999999998 128.6717416666\nEnd-Period 132.66999999999999 130.4\n128.5\nSource:\nCentral\nBank of\nNigeria\nNote: *\nOperations\nof the\nInter-Bank\nForeign\nExchange\nMarket\n(IFEM) was\nstopped\nfrom\ntrading\nmid-\nFebruary\n2009 and\nreopened\nfor trading\nin June\n2009\nTable\nD.4.8:\nMonthly\nAverage\nExchange\nRate\nMovements\nat BDC,\nIFEM and I\n& E\nSegments\nof the\nFOREX\nMarket (N/\nUS$1.00)\nMonth\n2017\n2018\nJanuary\n360.53363636363639\nFebruary\n360.35699999999991\nMarch\n360.2061904761905\nApril\n378.10771428571422 360.26900000000006\nMay\n381.86333144368865 361.19190476190482\nJune\n370.46016865079366 361.06052631578956\nJuly\n364.74761904761908 361.81190476190466\nAugust\n362.72608695652178 362.39380952380958\nSeptember 359.98894736842112 364.21900000000005\nOctober\n360.43238095238092 363.976\nNovember\n360.30272727272717 363.91380952380956\nDecember\n360.67944444444441 364.75684210526316\nAverage\n365.58254061624643 362.04947368421074\nEnd-Period 360.33\n364\nSource:\nCentral\nBank of\nNigeria\nReturn to\nMenu\nTable D.4.9:\nComputed\nRelative\nPurchasing\nPower Parity\n(RPPP)\nExchange\nRate with\nPercentage\nOvervaluation\nand\nDevaluation\nPeriod\nExchange Rates\nRPPP\n% Overvalu\nUndervalua\nJan 1981\n0.5323\n0.55981522867432132 5.16912054\nFeb 1981\n0.54690000000000005 0.56819982565174088 3.89464722\nMar 1981\n0.57220000000000004 0.5924172228900727\n3.53324412\nApr 1981\n0.59940000000000004 0.63522617880019994 5.97700680\nMay 1981\n0.59940000000000004 0.6857997304765292\n14.4143694\nJun 1981\n0.59050000000000002 0.68894512360313476 16.6714857\nJul 1981\n0.59919999999999995 0.68601414017037299 14.4883411\nAug 1981\n0.66800000000000004 0.64371834891945146 -3.6349777\nSep 1981\n0.66710000000000003 0.74948698451602636 12.3500201\nOct 1981\n0.66090000000000004 0.7219566591447969\n9.23841112\nNov 1981\n0.64880000000000004 0.71216815857027438 9.76697881\nDec 1981\n0.63560000000000005 0.69238522156148097 8.93411289\nJan 1982\n0.64370000000000005 0.6849665364094274\n6.41083368\nFeb 1982\n0.65590000000000004 0.6729660176991149\n2.60192372\nMar 1982\n0.6643\n0.68148565455427479 2.58703214\nApr 1982\n0.66959999999999997 0.68990073357417947 3.03177024\nMay 1982\n0.66959999999999997 0.67980753062975474 1.52442213\nJun 1982\n0.67559999999999998 0.67832183494447773 0.40287669\nJul 1982\n0.6794\n0.67499227732080413 -0.6487669\nAug 1982\n0.68100000000000005 0.6707004341832854\n-1.5124178\nSep 1982\n0.68430000000000002 0.63621118063687077 -7.0274469\nOct 1982\n0.68979999999999997 0.68348341288771131 -0.9157128\nNov 1982\n0.68920000000000003 0.69482087609990373 0.81556530\nDec 1982\n0.67200000000000004 0.70350685501458587 4.68852009\nJan 1983\n0.67359999999999998 0.69185956681438721 2.71074329\nFeb 1983\n0.69169999999999998 0.70516613700873243 1.94681755\nMar 1983\n0.69989999999999997 0.7320768876634709\n4.59735500\nApr 1983\n0.70479999999999998 0.77055226959709078 9.32920964\nMay 1983\n0.70479999999999998 0.78442878902827817 11.2980688\nJun 1983\n0.72719999999999996 0.80831157748334359 11.1539572\nJul 1983\n0.74470000000000003 0.85869079030574258 15.3069410\nAug 1983\n0.74860000000000004 0.91469827901991985 22.1878545\nSep 1983\n0.74860000000000004 0.94032638352630371 25.6113256\nOct 1983\n0.74860000000000004 0.94264191873837488 25.9206410\nNov 1983\n0.74860000000000004 0.95930744731887352 28.1468671\nDec 1983\n0.74860000000000004 0.97025344677756031 29.6090631\nJan 1984\n0.74860000000000004 1.0008526040602783\n33.6965808\nFeb 1984\n0.74860000000000004 1.0027707096499439\n33.9528065\nMar 1984\n0.74860000000000004 0.98129447573217454 31.0839534\nApr 1984\n0.74860000000000004 0.98203951965570235 31.1834784\nMay 1984\n0.74860000000000004 1.1425164861082686\n52.6204229\nJun 1984\n0.75429999999999997 1.0827565685827498\n43.5445537\nJul 1984\n0.76759999999999995 1.0676089171914493\n39.0840173\nAug 1984\n0.76759999999999995 1.0617097737264813\n38.3154994\nSep 1984\n0.76819999999999999 1.0670866198047531\n38.9073964\nOct 1984\n0.77480000000000004 1.065493688852521\n37.5185452\nNov 1984\n0.79569999999999996 1.0125291223617485\n27.2501096\nDec 1984\n0.80810000000000004 0.99237232969423228 22.8031592\nJan 1985\n0.82030000000000003 0.95327826118316028 16.2109302\nFeb 1985\n0.84770000000000001 0.97117142492102126 14.5654624\nMar 1985\n0.87460000000000004 1.0037586804072309\n14.7677430\nApr 1985\n0.88249999999999995 1.0116609033875852\n14.6357964\nMay 1985\n0.89170000000000005 0.86922472977184706 -2.5204968\nJun 1985\n0.89510000000000001 0.89293680690735122 -0.2416705\nJul 1985\n0.89510000000000001 0.89542924710032723 3.67832756\nAug 1985\n0.89690000000000003 0.86259878497154241 -3.8244191\nSep 1985\n0.91569999999999996 0.84014694819571156 -8.2508520\nTable D.4.9:\nComputed\nRleative\nPurchasing\nPower Parity\n(RPPP)\nExchange\nRate with\nPercentage\nOvervaluation\nand\nDevaluation\nPeriod\nExchange Rates\nRPPP\n% Overvalu\nUndervalua\nOct 1985\n0.92249999999999999 0.843319457833546\n-8.5832566\nNov 1985\n0.9234\n0.87853659917603288 -4.8585012\nDec 1985\n0.95950000000000002 0.89054726892964653 -7.1863190\nJan 1986\n0.99960000000000004 0.93415729364410016 -6.5468893\nFeb 1986\n0.99960000000000004 0.93888257730529889 -6.0741719\nMar 1986\n1.0016\n0.96975318032886648 -3.1795946\nApr 1986\n1.0135000000000001\n0.94567033409270052 -6.6926162\nMay 1986\n1.0341\n0.96213464298602391 -6.9592260\nJun 1986\n1.1249\n1.0322990374839673\n-8.2319283\nJul 1986\n1.2694000000000001\n1.1382726745324661\n-10.329866\nAug 1986\n1.3293999999999999\n1.3502646918316579\n1.56948185\nSep 1986\n4.6406000000000001\n1.4562155420530858\n-68.620102\nOct 1986\n4.1203000000000003\n5.1483508078658424\n24.9508727\nNov 1986\n3.5310999999999999\n4.5243044534795755\n28.1273386\nDec 1986\n3.1827999999999999\n3.9357658502571011\n23.6573410\nJan 1987\n3.6471\n3.5775685071914092\n-1.9064871\nFeb 1987\n3.7014\n4.1602444752522496\n12.3965114\nMar 1987\n3.9213\n4.0978548210942369\n4.50245635\nApr 1987\n3.9054000000000002\n4.3577326895468724\n11.5822371\nMay 1987\n4.1616999999999997\n4.2890592955800262\n3.06027093\nJun 1987\n4.0506000000000002\n4.4223502365423304\n9.17765853\nJul 1987\n3.8081\n4.2555820107916169\n11.7507946\nAug 1987\n4.0808999999999997\n3.9391917859883208\n-3.4724745\nSep 1987\n4.2073\n4.112853355704698\n-2.2448279\nOct 1987\n4.2760999999999996\n4.2929144864538369\n0.39322014\nNov 1987\n4.2889999999999997\n4.4628770178616612\n4.05402233\nDec 1987\n4.1664000000000003\n4.5051311139636567\n8.13006705\nJan 1988\n4.1748000000000003\n4.377771388199629\n4.86182303\nFeb 1988\n4.2610999999999999\n5.2558355567235315\n23.3445719\nMar 1988\n4.3169000000000004\n5.7148966999511499\n32.3842734\nApr 1988\n4.2023000000000001\n5.9457623583759291\n41.4882887\nMay 1988\n4.1102999999999996\n6.2003336728965603\n50.8486892\nJun 1988\n4.1913\n6.297466574969933\n50.2509143\nJul 1988\n4.6086999999999998\n6.5474128566465986\n42.0663713\nAug 1988\n4.5830000000000002\n7.3787867415902877\n61.0034200\nSep 1988\n4.7167000000000003\n7.3850804487070327\n56.5730372\nOct 1988\n4.7747999999999999\n7.5017663532628154\n57.1116351\nNov 1988\n5.1478999999999999\n7.2866463461971334\n41.5459963\nDec 1988\n5.3529999999999998\n7.9504019019251775\n48.5223594\nJan 1989\n7.0388999999999999\n8.2643942248269955\n17.4103087\nFeb 1989\n7.3822999999999999\n10.099000517242255\n36.8001912\nMar 1989\n7.5871000000000004\n10.531847742551175\n38.8125600\nApr 1989\n7.5808\n11.327555167172015\n49.4242714\nMay 1989\n7.5050999999999997\n11.338635728287874\n51.0790759\nJun 1989\n7.3471000000000002\n11.092760738842752\n50.9814857\nJul 1989\n7.1387999999999998\n11.202407232396885\n56.9228334\nAug 1989\n7.2592999999999996\n10.163548837821853\n40.0072849\nSep 1989\n7.3400999999999996\n10.149179643832797\n38.2703184\nOct 1989\n7.3933999999999997\n10.19807727538695\n37.9348780\nNov 1989\n7.5037000000000003\n10.511901288323603\n40.0895729\nDec 1989\n7.6220999999999997\n10.359008693801577\n35.9075411\nJan 1990\n7.8620999999999999\n10.537200322441699\n34.0252645\nFeb 1990\n7.9009\n9.5833474395554497\n21.2943770\nMar 1990\n7.9387999999999996\n9.1938670257510733\n15.8092788\nApr 1990\n7.94\n8.6153056606082892\n8.50510907\nMay 1990\n7.94\n8.1767954440811081\n2.98231037\nJun 1990\n7.9424000000000001\n8.024508417664002\n1.03379857\nJul 1990\n7.9523000000000001\n7.6184007165334808\n-4.1987762\nAug 1990\n7.9622999999999999\n7.8583667219680962\n-1.3053172\nSep 1990\n7.9743000000000004\n7.8793017373175829\n-1.1913053\nOct 1990\n8.0089000000000006\n7.7212607101106405\n-3.5914955\nNov 1990\n8.3246000000000002\n7.73054117813974\n-7.1361845\nDec 1990\n8.7071000000000005\n8.0593340250124932\n-7.4395145\nNote: *In May\n2017, BDC\nand I & E\nrates were\nadopted for\nRPPP\ncompliation\nSource:\nCentral Bank\nof Nigeria\nReturn to\nMenu\nTable\nD.4.10:\nBilateral\nReal\nExchange\nRate -\nInterbank\nChina\nIndia\nUSA\nM1 2008 20.967232461769125 3.0213377032356985 145.52741729192\nM2 2008 21.472359252611525 3.0080710885532693 145.54288366112\nM3 2008 21.500242888518329 2.981744739556369\n145.63743960264\nM4 2008 21.447903565343751 2.9830313926596834 144.32458891332\nM5 2008 20.957607587357472 2.7981862144092138 142.67578086959\nM6 2008 20.335980928313759 2.6748701191684892 139.03135476213\nM7 2008 19.926141075732797 2.6710568737788321 136.68730910264\nM8 2008 19.406822190165851 2.6710583534788572 134.56067074356\nM9 2008 19.346839005786212 2.5059258635808384 132.87346654643\nM10\n2008\n19.370356327782382 2.3951556479566465 132.43397813513\nM11\n2008\n19.141871629781726 2.3791761307331964 129.95622274394\nM12\n2008\n22.095771817685851 2.6587582296712036 143.61337088079\nM1 2009 24.683985255661089 2.9190379041314038 157.93093971197\nM2 2009 24.840967862790553 2.9012514508659608 159.12703901571\nM3 2009 24.50264849719812\n2.7686554459621466 158.30934569091\nM4 2009 24.478608575334068 2.8598728006274019 158.05205640336\nM5 2009 24.171801728147038 2.931675451586468\n156.47910899955\nM6 2009 23.673572893395029 2.9648635612093504 155.07266164504\nM7 2009 23.191891491278\n3.0537066474186796 154.73943122921\nM8 2009 22.83232205956968\n3.0902361803023002 154.53835829475\nM9 2009 22.009714019721791 3.013568167734177\n150.19033099606\nM10\n2009\n22.063096787175663 3.185441791400732\n151.43372071964\nM11\n2009\n21.940022402758625 3.2165839936438405 149.79310000000\nM12\n2009\n21.843075160491534 3.1575085859413474 146.09550902225\nM1 2010 22.087306398686806 3.2477104575061668 146.03368034240\nM2 2010 22.241205935416133 3.1224180158954722 143.22243187850\nM3 2010 22.948039561404343 3.2033526152421321 144.89312908515\nM4 2010 23.26065179003999\n3.2291843505036151 143.10410881727\nM5 2010 24.004813395222836 3.1770106625599079 143.38244761811\nM6 2010 23.99027764709615\n3.0661994009656559 138.89599712730\nM7 2010 24.691114458701769 3.0892303144389568 137.62590048278\nM8 2010 25.168818784470911 3.0657314985596247 135.98386996323\nM9 2010 26.242170562792452 3.1147869861273905 135.96821231142\nM10\n2010\n27.357109725903683 3.2284521485257063 134.54556748088\nM11\n2010\n28.850391624850126 3.2052848079535035 134.70629631893\nM12\n2010\n29.834769370500602 3.2169083456340255 133.66995131945\nM1 2011 19.823513230339316 3.2382932384559191 133.71800689983\nM2 2011 19.969587706544754 3.157908863107131\n133.29931777235\nM3 2011 19.840890619151317 3.166231243587621\n133.62578142473\nM4 2011 20.259880929619246 3.2744112957740885 136.42088975292\nM5 2011 20.288695847866407 3.2394458273976108 136.50974133735\nM6 2011 19.973668996701225 3.2072152097008733 133.41791989914\nM7 2011 19.877712251737858 3.267241078457781\n131.92376219348\nM8 2011 19.824502652960504 3.1780437008645932 130.48987244530\nM9 2011 20.210610844225396 3.0995079148500584 132.06745629180\nM10\n2011\n19.646683033709916 2.9140222533373543 127.47559330266\nM11\n2011\n20.439975178069645 2.9494699610541257 132.39583992611\nM12\n2011\n20.370854786984125 2.7964960664118204 131.02759282458\nM1 2012 20.094957506111701 2.7962950618538782 127.64898748500\nM2 2012 19.932289012355341 2.9070346544639727 126.98242699703\nM3 2012 19.642535207563231 2.8252352164748182 126.00581182594\nM4 2012 19.591791677954863 2.7892806456354218 125.94799093562\nM5 2012 19.370654002220999 2.646436994812523\n124.89276212572\nM6 2012 19.035115351562563 2.5722903226453004 123.48280801927\nM7 2012 18.965797999654271 2.6374721955580611 122.84111457671\nM8 2012 18.909921010506309 2.6411082129700847 122.67390201036\nM9 2012 18.770431760847689 2.6721233776471345 121.95392394116\nM10\n2012\n18.656875703533252 2.7520960450691621 120.80294811771\nM11\n2012\n18.645357759295109 2.6619419513756912 119.58466318199\nM12\n2012\n18.654521525723549 2.6597241238891498 118.33408471931\nTable\nD.4.10:\nBilateral\nReal\nExchange\nRate\nChina\nIndia\nUSA\nM1 2013 18.760599450598058 2.6802608090483044 117.96655957437\nM2 2013 18.808445864022843 2.7053839189163806 118.05126620036\nM3 2013 18.536272802592922 2.6601176235116082 117.52342442298\nM4 2013 18.549219699165555 2.6619864579271071 116.75805240970\nM5 2013 18.469938445208651 2.6332149679196375 116.17686517530\nM6 2013 18.444056508515747 2.521631349068314\n115.77850989347\nM7 2013 18.359716121996144 2.4883357238897643 115.21646872962\nM8 2013 18.400048411618602 2.3769449814698955 115.06959640858\nM9 2013 18.447214474941518 2.3659750822094407 114.32919420023\nM10\n2013\n18.385487049357248 2.4541519745857845 113.22103689051\nM11\n2013\n18.237105407184568 2.4271656911566328 112.13587168984\nM12\n2013\n18.203872090487145 2.398599299095971\n111.24988172902\nM1 2014 18.326753638262282 2.3589416216160175 110.97639407781\nM2 2014 18.304737376121544 2.3405643659568276 110.83935100550\nM3 2014 17.995719834924451 2.3819077193405676 110.67407277598\nM4 2014 17.768649123847634 2.4118448308920599 110.35582318062\nM5 2014 17.62473203547453\n2.4504675357923853 109.88589711856\nM6 2014 17.492449816744859 2.4330990869666294 109.24222106525\nM7 2014 17.348505419706054 2.4557751242646946 108.49956603802\nM8 2014 17.314970513647818 2.4326367426635844 107.79959793463\nM9 2014 17.337651617552744 2.4167775061589443 107.30050582861\nM10\n2014\n17.273472731278865 2.3859840400723291 106.49963592753\nM11\n2014\n18.141302559109132 2.4978562533847737 111.54376103750\nM12\n2014\n18.449239176182083 2.4664065709361505 112.02331999437\nM1 2015 18.332248580057058 2.4683598433623821 110.56162987966\nM2 2015 21.487504520249448 2.8748428955334893 128.71438709725\nM3 2015 21.022875182292005 2.8279019611685263 127.67825440935\nM4 2015 20.876579139012154 2.8041315757231851 126.95010992236\nM5 2015 20.665665094141037 2.7483986374214289 126.21460323359\nM6 2015 20.46407627602575\n2.7512266967343404 125.45961860027\nM7 2015 20.397670215164197 2.7560677483139715 124.63923503448\nM8 2015 19.773385653824082 2.7053888540397115 123.72618256633\nM9 2015 19.469852493642176 2.6546559080279661 122.76049132245\nM10\n2015\n19.387874024838975 2.7064111799514974 122.22284034845\nM11\n2015\n19.215050819680396 2.6559107535271274 121.16508667619\nM12\n2015\n18.862019500420079 2.6006325522012714 119.56006713374\nM1 2016 16.047109148682804 2.5335866859053309 118.73033107052\nM2 2016 16.004362231027685 2.4440975016163811 116.15664985295\nM3 2016 15.780383420461479 2.4743124098289706 114.17124842961\nM4 2016 27.719817554965335 4.2944884394418503 189.31916288314\nM5 2016 27.568366683284324 4.2205943780275188 186.74705870884\nM6 2016 26.263356885161702 4.0072840018102367 177.18845940097\nM7 2016 26.23898305381811\n4.0825609423003213 175.62456622859\nM8 2016 26.036981121158391 3.992370303887133\n170.56740685190\nM9 2016 25.831509982465548 3.8822061618444064 170.48059954314\nM10\n2016\n25.767406799002206 3.9179397654598516 169.28638570579\nM11\n2016\n25.636798436930142 3.9492467800793887 167.89371436677\nM12\n2016\n25.91160048635248\n3.942038966734966\n166.65741331691\nM1 2017 23.593713524854081 3.4150995510186157 158.85521194881\nM2 2017 23.260499394453198 3.4300612590803405 157.15405462307\nM3 2017 22.788435374796645 3.4852582425068426 155.02818241764\nM4 2017 27.719817554965335 4.2944884394418503 189.31916288314\nM5 2017 27.568366683284324 4.2205943780275188 186.74705870884\nM6 2017 26.263356885161702 4.0072840018102367 177.18845940097\nM72017\n26.23898305381811\n4.0825609423003213 175.62456622859\nM8 2017 26.036981121158391 3.992370303887133\n170.56740685190\nM9 2017 25.831509982465548 3.8822061618444064 170.48059954314\nM10\n2017\n25.767406799002206 3.9179397654598516 169.28638570579\nM11\n2017\n25.636798436930142 3.9492467800793887 167.89371436677\nM12\n2017\n25.91160048635248\n3.942038966734966\n166.65741331691\nM1 2018 26.816300533133873 3.9133241736177955 166.08469082341\nM2 2018 26.955736603656163 3.7896642829490736 165.76160909589\nM3 2018 26.494966856031787 3.7611693358683675 164.61710015687\nM4 2018 25.978028979938895 3.6521852469547822 164.04467938993\nM5 2018 25.436024486872338 3.5700561352170523 163.15986135289\nM6 2018 24.303726458384872 3.4743145514601914 161.57930057842\nM7 2018 23.443089569815392 3.5927127238678644 160.25880666377\nM8 2018 23.368065576653724 3.4414917474478313 158.78979566129\nM9 2018 23.239690535364012 3.3484260122484417 158.21234914667\nM10\n2018\n22.789238423887056 3.2663006738008873 157.16444695060\nM11\n2018\n22.650433360082385 3.4473599010234799 155.63269267946\nM12\n2018\n22.795713413585158 3.4016726030963862 153.95542099841\nSource:\nCentral\nBank of\nNigeria\nReturn to\nMenu\nTable\nD.4.10.1:\nBilateral\nReal\nExchange\nRate - I & E\nChina\nIndia\nUSA\nM4 2017\n27.719817554965335 4.2944884394418503\n189.31916288\nM5 2017\n27.568366683284324 4.2205943780275188\n186.74705870\nM6 2017\n26.263356885161702 4.0072840018102367\n177.18845940\nM72017\n26.23898305381811\n4.0825609423003213\n175.62456622\nM8 2017\n26.036981121158391 3.992370303887133\n170.56740685\nM9 2017\n25.831509982465548 3.8822061618444064\n170.48059954\nM10 2017\n25.767406799002206 3.9179397654598516\n169.28638570\nM11 2017\n25.636798436930142 3.9492467800793887\n167.89371436\nM12 2017\n25.91160048635248\n3.942038966734966\n166.65741331\nM1 2018\n26.816300533133873 3.9133241736177955\n166.08469082\nM2 2018\n26.955736603656163 3.7896642829490736\n165.76160909\nM3 2018\n26.494966856031787 3.7611693358683675\n164.61710015\nM4 2018\n25.978028979938895 3.6521852469547822\n164.04467938\nM5 2018\n25.436024486872338 3.5700561352170523\n163.15986135\nM6 2018\n24.303726458384872 3.4743145514601914\n161.57930057\nM7 2018\n23.443089569815392 3.5927127238678644\n160.25880666\nM8 2018\n23.368065576653724 3.4414917474478313\n158.78979566\nM9 2018\n23.239690535364012 3.3484260122484417\n158.21234914\nM10 2018\n22.789238423887056 3.2663006738008873\n157.16444695\nM11 2018\n22.650433360082385 3.4473599010234799\n155.63269267\nM12 2018\n22.795713413585158 3.3941550945812522\n153.95542099\nNote: In\nApril 2017,\nI & E rates\nwere\nadopted for\nBRER\ncompliation\nSource:\nCentral\nBank of\nNigeria\nTable\nD.4.10.1:\nBilateral\nReal\nExchange\nRate - I & E\nJapan\nCote d'Ivoire\nSouth Korea\nM4 2017\n1.5613093498393977 0.3235562404763021\n0.1699030511\nM5 2017\n1.5444811271634804 0.3287938754739404\n0.1704359417\nM6 2017\n1.4482598989619404 0.31999058394249308 0.1578918202\nM72017\n1.4530781847990137 0.32141511716615634 0.1604153983\nM8 2017\n1.4104722903318485 0.31192679192762574 0.1550480118\nM9 2017\n1.3781854280673655 0.30881852334752463 0.1519455416\nM10 2017\n1.3648232407890515 0.3019543619428614\n0.1540623059\nM11 2017\n1.3715383983298872 0.30409208455963005 0.1562777266\nM12 2017\n1.3553983883803851 0.30811439882617964 0.1582761731\nM1 2018\n1.3949118621028673 0.317483308593563\n0.1579005748\nM2 2018\n1.4055427164802017 0.30847525973886636 0.1559195991\nM3 2018\n1.4033407221525691 0.31021363204840019 0.1571465388\nM4 2018\n1.3518263595426523 0.3026479358710949\n0.1555316082\nM5 2018\n1.3483108865094977 0.28833069252682691 0.1527825471\nM6 2018\n1.3102209819982455 0.28630929773741026 0.1458218885\nM72018\n1.2946183975911902 0.28585012356491901 0.1443125167\nM8 2018\n1.2893065801736399 0.28126509892136997 0.1443983341\nM9 2018\n1.2564314219958068 0.27619541843976492 0.1451208337\nM10 2018\n1.252121616185099\n0.26824333278582174 0.1398934874\nM11 2018\n1.2395658867931723 0.26911109048032344 0.1402719417\nM12 2018\n1.2552839427260452 0.26943543287235155 0.1394101046\nNote: In\nApril 2017,\nI & E rates\nwere\nadopted for\nBRER\ncompliation\nSource:\nCentral\nBank of\nNigeria\nReturn to\nMenu\nTable D\n4.11:\nNominal\nEffective\nExchange\nRate\nIndices\nfor\nNigeria1\nPeriod\nJanuary\nFebruary\nMarch April\n1981\n113.7\n115.6\n110.8 107.9\n1982\n107.8\n108.2\n108.2 108.7\n1983\n111.6\n110.2\n109.8 110\n1984\n113.7\n111.4\n108.7 109.9\n1985\n114.5\n113.8\n110.5 104\n1986\n79.400000000000006 77\n75.3\n74.3\n1987\n16.5\n16.100000000000001 15.4\n15.2\n1988\n13.6\n13.6\n13.3\n13.5\n1989\n9.3000000000000007 8.8000000000000007 8.6\n8.69999999\n1990\n8.1999999999999993 8.1\n8.1\n8.1\n1991\n6.4\n6\n6.5\n7.2\n1992\n6.4\n6\n3.6\n3.4\n1993\n3.2\n3\n2.6\n2.8\n1994\n3.1\n3.1\n3\n3\n1995\n0.7\n0.7\n0.7\n0.7\nSource:\nCentral\nBank of\nNigeria\nNotes:\n1Indices\nare\ntrade-\nweighted\nand\nprovided\nat 1985\nbase\nperiod.\nReturn to\nMenu\nTable D\n4.12a:\nNominal\nEffective\nExchange\nRate\nIndices\nfor\nNigeria1\nPeriod\nJanuary\nFebruary\nMarch\n1996\n31.011751549699184 31.245552505709647 30.709470699184\n1997\n28.981104939619012 28.66715540075764\n29.726048162653\n1998\n25.77254706967263\n28.095242599943482 28.106286618315\n1999\n72.126995386603483 68.138156829016424 71.519813969162\n2000\n76.411549024088742 77.926432704555737 77.762953149316\n2001\n82.713113820177099 82.074926322644231 80.564392588254\n2002\n81.496551005036963 82.666666423382011 83.341930523846\n2003\n95.934451973943155 95.653230233461784 96.266966848916\n2004\n108.64488115126018 108.56677444667162 107.67136395763\n2005\n109.48962689738831 109.76904115698792 108.80812981282\n2006\n105.20074134487862 103.98859931067022 103.74237241512\n2007\n106.21892522773322 106.82388064651769 107.29952943606\nTable\nD.4.12b:\nNominal\nEffective\nExchange\nRate\nIndices\nfor\nNigeria2\nPeriod\nJanuary\nFebruary\nMarch\n2008\n80.891867499592436 80.836618152351107 82.266571248087\n2009\n88.624938150607932 87.782365990220626 87.205877590416\n2010\n98.810874466542003 96.596688816698489 96.755616575817\n2011\n99.396982424354803 100.36232765531318 102.32699700839\n2012\n100.42941372630516 101.68266819012054 100.84626699959\n2013\n97.937559355744654 98.078686700892078 96.573787743411\n2014\n93.981626680427951 93.923347901193722 94.846196211870\n2015\n93.413563868566456 107.44080170718699 103.69030824662\n2016\n97.763236290626494 97.871312790667545 101.57725460406\n2017\n153.29259183947147 153.32521170117832 154.53657384409\n2018\n167.13061153346902 165.0192428781661\n165.34861846873\nSource:\nNational\nBureau of\nStatistics\nNote:\n1Base\nperiod:\nMay 2003\n2Base\nperiod:\nNovember\n2009\nReturn to\nMenu\nTable\nD.4.12.1:\nNominal\nEffective\nExchange\nRate\nIndices for\nNigeria - I\n& E\nPeriod\nJanuary\nFebruary\nMarch\n2017\n2018\n196.81720690889378 194.4788729977366 194.85873506441\nSource:\nNational\nBureau of\nStatistics\nNote:\nNEER/\nREER\nCalculation\nis based on\nI&E\nWindows\nRate from\nApril 2017\nReturn to\nMenu\nTable\nD.4.13a:\nReal\nEffective\nExchange\nRate\nIndices\nfor\nNigeria1\nPeriod\nJanuary\nFebruary\nMarch\n1996\n17.925723912487356 18.323343945967615 18.334029937073\n1997\n18.412320684825303 18.351624106434819 19.725042184549\n1998\n17.273086845118851 18.803354551371449 19.044681224164\n1999\n53.058847952961031 50.343951272433493 53.074067863651\n2000\n53.457762451090993 55.050761743289861 55.170650619523\n2001\n65.954432474578667 66.552801699900016 65.616057833312\n2002\n75.026369721815072 77.128491656166602 77.513129732153\n2003\n94.590228592839253 92.408281943792545 91.431754074287\n2004\n127.89845964401209 127.9857235885563\n122.56020716614\n2005\n137.3329614261522\n139.3366926867414\n139.58641029457\n2006\n140.9428213216259\n141.20112121851369 144.24153088107\n2007\n149.41748589802242 150.75525466563349 152.24737485754\nTable\nD.4.13b:\nReal\nEffective\nExchange\nRate\nIndices\nfor\nNigeria2\nPeriod\nJanuary\nFebruary\nMarch\n2008\n95.826218763328185 96.171031267262322 97.857643691009\n2009\n95.795919298820337 94.641686913849881 93.553660555249\n2010\n96.801708385512597 93.400325606964216 95.170532412471\n2011\n89.322328872724739 89.663822546152019 90.636102365254\n2012\n83.142248446465302 84.304149492396803 82.767908668803\n2013\n77.255019132493331 77.275206373417035 75.728935689408\n2014\n70.888854654985039 70.75737303834633\n71.150483498182\n2015\n66.466240380771083 76.353096402162578 73.372332266856\n2016\n65.296754653842271 64.18917490534055\n65.418614506847\n2017\n88.753917165686275 87.70817551026731\n87.026964802562\n2018\n86.118534384849255 84.638103674781675 84.120052319851\nSource:\nNational\nBureau of\nStatistics\nNote:\n1Base\nperiod:\nMay 2003\n2Base\nperiod:\nNovember\n2009\nReturn to\nMenu\nTable\nD.4.13.1:\nReal\nEffective\nExchange\nRate\nIndices for\nNigeria - I\n& E\nPeriod\nJanuary\nFebruary\nMarch\n2017\n2018\n101.39580693101776 99.721122433387166 99.11693810087\nSource:\nNational\nBureau of\nStatistics\nNote:\nNEER/\nREER\nCalculation\nis based on\nI&E\nWindows\nRate from\nApril 2017\nReturn to Menu\nTable D.5.1:\nSectoral\nUtilization of\nForeign\nExchange for\nTransactions\nValid for\nForeign\nExchange (US$'\nMillion)\nCategory\n1997\n1998\n1999\n(A) Imports\n4369.659790239999\n4337.5179665900005\n5142\n1. Industrial\nSetor\n2913.1901721199997\n2304.3297587299999\n2786\n(i) Raw\nMaterials\n1486.3318212199999\n1436.6334569400001\n1685\n(ii) Machinery,\nSpare Parts &\nCKD\n1426.8583509\n867.69630179000001\n1101\n2. Agricultural\nSector\n46.585051450000002\n93.345776010000009\n82.38\n3. Finished\nGoods\n1310.8988659400002\n1801.4203808299999\n2082\n(i) Food\n663.55987161999997\n744.32754595000006\n813.1\n(ii) General\nMerchandise\n647.3389943200001\n1057.0928348800001\n1269\n(a) Drug &\nPharmaceuticals\n72.818122689999996\n96.186120410000001\n140.6\n(b) Books &\nEducational\nMaterials\n37.992400450000005\n51.840158280000004\n78.61\n(c) Cement\n57.274550810000001\n117.96176611\n156.4\n(d) Other\nBuilding\nMaterials\n15.758853050000001\n122.31685889000001\n97.04\n(e) Detergents\n4.5806209000000004\n7.5815097800000002\n6.658\n(f) Alcohol\n12.70863772\n13.29995284\n1.339\n(g) Insecticides\n5.5808219599999997\n14.517646859999999\n33.43\n(h) Lubricants\n26.71794517\n32.09428054\n56.55\n(i) Glass\nProducts\n7.1887641599999998\n9.862019720000001\n17.26\n(j) Furniture/\nWood Products\n10.291301220000001\n14.27266857\n6.284\n(k) Others\n396.42697619\n577.15985288000002\n674.9\n4. Transport\n98.936651519999998\n137.99452849000002\n188.9\n(i) Aircraft/\nShipping\nVessels\n4.8867690799999997\n2.2916080600000002\n12.70\n(ii) Motor\nVehicles (Cars)\n60.002594389999999\n79.362106060000002\n85.63\n(iii) Buses/\nTrucks/Lorries\n22.566540329999999\n34.210695530000002\n71.69\n(iv) Rolling\nStocks\n3.76613591\n2.87596637\n1.823\n(iv) Motorcycles\n& Bicycles\n7.7146118099999992\n19.254152469999998\n17.13\n5. Personal\nEffects\n4.9049209999999996E-2 0.42752253000000001\n2.624\n6. Minerals\n7. Oil Sector\nB. Invisibles\n413.35121801999998\n516.01768069000002\n703.9\n(i) Education\n41.664925070000002\n9.5063249899999995\n14.27\n(ii) Personal\nHome\nRemittances\n3.9966872499999999\n4.6383516500000006\n9.619\n(iii) Airline\nRemittances\n19.890736019999999\n37.235348420000001\n75.84\n(iv) Travels\n(PTA)\n127.06360487000001\n167.31811003999999\n274.4\n(v) Travels\n(BTA)\n0\n0\n0\n(vi) Estacode\n0\n0\n0\n(vii) Re-\nInsurance\n3.8178142899999998\n2.3223239200000001\n3.723\n(viii) Contract\nServices Fees\n8.7442046799999993\n6.5214656799999995\n12.33\n(ix) Technical\nServices Fees\n30.620970070000002\n21.382846609999998\n29.78\n(x) Royalty\n8.1631396800000005\n9.1001763800000006\n14.33\n(xi) License\n0.72519328000000005\n0.14719628000000001\n0.214\n(xii) Trade\nMark\n4.562824E-2\n2.5590999999999999E-2 1.85E\n(xiii)\nConsultancy\nFees\n1.02952515\n0.81907114999999997\n2.158\n(xiv)\nManagement\nServices Fees\n3.5434383700000001\n5.6217101700000001\n1.498\n(xv) Aircraft\nLease &\nMaintenance\nFees\n28.89516266\n5.0517261799999993\n11.52\n(xvi) Shipping\nVessels Charter\n& Maintenance\nFees\n12.940442130000001\n5.1780038600000005\n0.655\n(xvii)\nInvestment\nIncome - Profit\n& Dividend\n43.180706610000001\n66.30328634\n57.74\n(xix)\nRepatration of\nCapital\n6.2117387800000001\n0.60305178000000004\n5.981\n(xx) Others\n72.817300870000011\n174.24309624\n189.8\nTotal (A+ B)\n4783.0110082599986\n4853.5356472800004\n5846\nSource: Central\nBank of Nigeria\nReturn to Menu\nTable D.5.2:\nSectoral\nUtilization of\nForeign\nExchange for\nTransactions\nValid for\nForeign\nExchange (US$'\nMillion) -\nContinued\nCategory\n2008\n2009\n2010\nA. Imports\n30148.793156699994\n23761.042949590003\n23824.98\n1. Industrial\nSector\n10552.50589511\n7378.0856080199992\n6174.059\n2. Food\nProducts\n3974.49984249\n3433.8009534900002\n4381.103\n3.\nManufactured\nProducts\n6810.4167786199987\n6027.5092574999999\n5281.140\n4. Transport\nSector\n1672.0554395700003\n1564.0594766900003\n1471.882\n5. Agricultural\nSector\n364.03508297999991\n271.72199598999998\n314.2300\n6. Minerals\n302.14445004999988\n154.74221347000002\n194.8830\n7. Oil Sector\n6473.1356678799993\n4931.1234444299998\n6007.683\nB. Invisibles\n18176.659245709998\n8835.3720996899992\n9545.882\n1. Business\nServices\n1556.89186509\n1487.4279418100002\n1372.527\n2.\nCommunication\nServices\n839.31638873000009\n345.48715919000006\n287.9556\n3. Construction\n& Related\nEngineering\nServices\n37.413173869999994\n42.385296469999986\n133.7660\n4. Distribution\nServices\n66.544015459999997\n44.498547930000001\n62.62379\n5. Educational\nServices\n714.20274028000006\n192.72564453000001\n158.1176\n6.\nEnvironmental\nServices\n0\n0.13324577999999998 0.107677\n7. Financial\nServices\n14287.01599706\n5882.9528022800005\n6625.504\n8. Health\nRelated &\nSocial Services\n7.008385549999999\n4.3274800900000017\n0.940223\n9. Tourism &\nTravel Related\nServices\n29.663844379999997\n10.489074240000001\n52.52111\n10.\nRecreational,\nCultural &\nSporting\nServices\n0.43529717000000001 0.36969889000000006 0.163139\n11. Transport\nServices\n534.18140650999999\n711.99466669000003\n787.1524\n12. Other\nServices not\nIncluded\nElsewhere\n103.98613160999999\n112.58054179\n64.50257\nTotal (A + B)\n48325.452402409996\n32596.415049280004\n33370.86\nSource: Central\nBank of Nigeria\nReturn to\nMenu\nTable\nD.5.3:\nSupply of\nForeign\nExchange\n(US$'\nMillion)\nMonth\n1995\n1996\n1997\nJanuary\n…\n42.34352286\n137.3609173099\nFebruary\n392.26216225000002 169.67071339\n328.7059362599\nMarch\n…\n203.98954578000001 284.98797507\nApril\n267.95936899999998 187.15035019999999 337.7802877599\nMay\n…\n149.71564111000004 311.8428172200\nJune\n379.92598292999998 160.97252869000002 171.8290312199\nJuly\n…\n241.21896784999998 168.7351103099\nAugust\n…\n196.26084788\n231.0045611699\nSeptember 436.54714124999998 149.73016455999999 267.2939309300\nOctober\n…\n188.35027278000001 307.7383243699\nNovember 199.11732096\n110.07773027\n193.3773423499\nDecember …\n47.555328580000001 198.6784182700\nTable\nD.5.3:\nSupply of\nForeign\nExchange\n(US$'\nMillion)\ncontinued\nMonth\n2007\n2008\n2009\nJanuary\n840.26\n1163.3900000000001 1279.889999999\nFebruary\n1544.59\n707.52\n3191.4\nMarch\n1687.27\n603.16999999999996 3141.31\nApril\n947.76\n826.1\n2622.52\nMay\n1739.67\n1380.79\n3112.08\nJune\n1901.83\n1460.78\n2103.67\nJuly\n1747.32\n2211.7800000000002 1815.81\nAugust\n1110.79\n2046.23\n3065.529999999\nSeptember 1180.17\n1380.3\n2460.83\nOctober\n748.09\n4398.1499999999996 1743.05\nNovember 1175.5\n4357.88\n1788.96\nDecember 1446.7\n957.53\n1206.21\nSource:\nCentral\nBank of\nNigeria\nNotes:\nThe\nsupply\nfigures\ninclude\nforeign\nexchange\nsold to\nBureaux-\nde-Change\nwhich\nstarted\nfrom\nApril,\n2006\nReturn to\nMenu\nTable D.6.1:\nCash Flow\n(US$' Million)\nCATEGORY\n2004\n2005\n2006\nInflow\n35402.19\n51235.969999999994 58715.59\nA. Through\nthe Central\nBank\n24971.74\n35081.42\n36727.160000\n1. Oil\n23527.200000000001 32601.65\n33138.21\n2.Non-oil\n1444.54\n2479.7699999999995 3588.95\nDrawings on\nLoans/Grants\nRDAS/WDAS\nPurchases\n221.48\n865.48\nSwaps\nInterest on\nReserves &\nInvestments\nInterest\nRepatriated\nfrom overseas\nRefund on\nWorld Bank/\nIBRD/IMF\nLoans/SDR\nAllocation\nCash Swap\nIRO BDC\nSales\nEurobond\nproceeds -\nfixed income\nsecurities\nReturned\nPayments\n[Wired/Cash]\nUnutilised\nfunds from\nDAS\nRecovered\nFunds\nOther Official\nReceipts\n1444.54\n2258.29\n2723.47\nCBN\nInterbank\nTransactions\nReturn of\nUnutilised\nIMTO Funds\nTSA and\nThird Party\nFunds\nOthers (FGN\nLoans)\nB. Through\nAutonomous\nSources\n10430.450000000001 16154.550000000001 21988.43\n1. Non-oil\nexports\n699.85000000000014 701.13\n911.05000000\n2. Capital\nInflow\n297.70999999999998 397.56\n145.94999999\n3. Invisibles\n9432.8900000000012 15055.86\n20931.43\n(a) Ordinary\nDomiciliary\nAccounts\n(b) Total OTC\nPurchases\nOil\nCompanies\nCapital\nImportations\nHome\nRemittances\nOther OTC\nPurchases\nOutflow\n15847.160000000002 24843.53\n24716.120000\nA. Through\nthe Central\nBank\n15342.240000000002 24309.83\n24321.56\n1. WDAS/\nRDAS\nUtilisation\n9523.9599999999991 10668.490000000002 12605.67\nWDAS/RDAS\nSales\nInter-bank\nFWD\nBDC Sales\nInter-bank\nSales\nSwaps\nInvisibles\nIFEM\n2. Drawings\non L/C\n140.93\n285.76000000000005 364.24\n3. External\nDebt Service\n1757.1099999999997 8898.4700000000012 6832.01\nPrincipal\n1479.8200000000002 8590.19\n6551.7699999\nInterest\n224.69\n176.88\n143.36000000\nOthers\n52.600000000000009 131.4\n136.88\nProfessional\nfees/\nCommission\n4. Govt and\nInternational\nGrants/\nContributions,\nGrants &\nEquity\nInvests. (AFC\nEquity\nParticipation)\n5. National\nIndpt Priority\nProjects\n(NIPP)\n125.24000000000002 87.16\n84.9\n6. Forex\nSpecial\nPayment\n(Cash Swap/\nFX Advance/\nTo MDAs)\n7. Other\nOfficial\nPayments\n3794.9999999999991 4369.95\n4434.7400000\nInt'l\nOrganisations\n& Embassies\n200.63\n300.3\n210.82999999\nEstacode\n917.8599999999999\n924.79\n1420.3400000\nParastatals\n(Public Sector\nUses)\nJoint Venture\nCompany\n(JVC) Cash\nCalls\n1963.74\n2317.8700000000003 2476.9600000\nMiscellaneous\n(CBN Uses)\n712.77\n826.9899999999999\n326.61\n8. Bank\nCharges\n9. NSIA\nTransfer\n10. Funds\nReturned to\nRemitters\n11. 3RD Party\nMDA Transfer\nB. Through\nAutonomous\nSources\n504.92\n533.70000000000005 394.56\n1. Imports\n460.49000000000012 429.38000000000005 386\n2. Invisibles\n44.429999999999993 104.32\n9.5599999999\nNetflow\nthrough the\nCBN\n9629.4999999999982 10771.590000000002 12405.599999\nNetflow\nthrough\nAutonomous\nSources\n9925.5299999999988 15620.85\n21593.879999\nNetflow\n19555.03\n26392.44\n33999.479999\nSource:\nCentral Bank\nof Nigeria\nReturn to\nMenu\nTable\nD.7.1.1:\nCapital\nImportation\nBy Type of\nInvestment\n(US$'\nMillion)\n2010\nQ1\nQ2\nQ3\nForeign\nDirect\nInvestment\n- Equity\n66.434117900000004\n197.17330512000001\n294.2808\nForeign\nDirect\nInvestment\n- Other\ncapital\n7.4983440000000003\n15.03695752\n5.013195\nPortfolio\nInvestment\n- Equity\n927.58411701\n580.57652567000002\n631.9490\nPortfolio\nInvestment\n- Bonds\n0\n6.8476839999999997E-2 0\nPortfolio\nInvestment\n- Money\nmarket\ninstruments\n124.6\n239.4032473\n271.0600\nOther\nInvestments\n- Trade\ncredits\n0\n0\n0.154875\nOther\nInvestments\n- Loans\n633.26716313999998\n306.53940639999996\n297.3205\nOther\nInvestments\n- Currency\ndeposits\n0\n0\n0\nOther\nInvestments\n- Other\nclaims\n0.69799999999999995\n0.99986600000000003\n0.453392\nTotal\n1760.08174205\n1339.79778485\n1500.232\nTable\nD.7.1.1:\nCapital\nImportation\nBy Type of\nInvestment\n(US$'\nMillion) . . .\nContinued\n2015\nQ1\nQ2\nQ3\nForeign\nDirect\nInvestment\n- Equity\n413.67962117999997\n218.57170336000001\n715.8571\nForeign\nDirect\nInvestment\n- Other\ncapital\n5.0939999999999999E-2 0.12994002000000002\n1.855491\nPortfolio\nInvestment\n- Equity\n1173.37681524\n1846.0783998000002\n879.9687\nPortfolio\nInvestment\n- Bonds\n705.98135761000003\n100.53703966999998\n20.34220\nPortfolio\nInvestment\n- Money\nmarket\ninstruments\n16.144603920000002\n286.89126346\n108.8193\nOther\nInvestments\n- Trade\ncredits\n0\n0\n0\nOther\nInvestments\n- Loans\n406.17933216\n162.56572145999999\n696.3813\nOther\nInvestments\n- Currency\ndeposits\n0\n0.98999000000000004\n7.112667\nOther\nInvestments\n- Other\nclaims\n31.50825073\n117.84878126\n317.7673\nTotal\n2746.9209208400002\n2733.61283903\n2748.104\nSource:\nCentral\nBank of\nNigeria\nReturn to Menu\nTable D.7.1.2: Capital\nImportation By Nature\nof Business (US$'\nMillion)\n2010\nQ1\nQ2\nAGRICULTURE\n0.67\n3.354752\nBANKING\n126.1\n244.88265634999999\nBREWERING\n17.122046999999998\n7.7095140000000004\nCONSTRUCTION\n4.24759741\n3.4106287900000001\nCONSULTANCY\n4.0200000000000001E-3 5.4705749999999997E\nDRILLING\n2.6645809300000001\n2.9999750000000001\nELECTRICAL\n0\n3.3596613999999998\nFINANCING\n43.826546749999999\n91.999334319999988\nFISHING\n4.9844380600000004\n1.2426600000000001\nHOTELS\n0\n0.5\nMARKETING\n12.133334\n0.52693203\nIT SERVICES\n0\n0\nOIL and GAS\n1.8288551000000002\n63.466956140000001\nPRODUCTION/\nMANUFACTURING\n554.37534144999995\n69.662653400000011\nSERVICING\n4.9812770199999994\n23.727125230000002\nSHARES\n931.54455673999996\n587.87603359000002\nTELECOMMUNICATION 52.555470589999999\n224.75634844999999\nTANNING\n0\n0\nTRADING\n2.9747110000000001\n10.151149\nTRANSPORT\n6.8966E-2\n0.1167\nWEAVING\n0\n0\nTOTAL\n1760.08174205\n1339.79778545\nSource: Central Bank of\nNigeria\nReturn to Menu\nTable D.7.1.3:\nCapital\nImportation By\nCountry (US$'\nMillion)\n2010\nQ1\nQ2\nQ3\nAFGHANISTAN\n0\n0\n0\nALBANIA\n0\n0\n0\nANDORRA\n0\n0\n0\nANGUILLA\n0\n0\n0\nANTIGUA AND\nBARBUDA\n0\n0\n0\nARMENIA\n0\n0\n0\nAUSTRALIA\n0\n0.14497499999999999\n0.44\nAUSTRIA\n0\n0\n0\nAZERBAIJAN\n0\n0\n0\nBAHAMAS\n0\n1.0249900000000001\n0\nBAHRAIN\n0\n3\n0\nBANGLADESH\n0\n0\n0\nBARBADOS\n0\n0\n0\nBELGIUM\n33.545295129999992\n15.788272019999999\n9.96\nBELIZE\n0\n0\n0\nBENIN\n0\n0\n0\nBERMUDA\n0\n8.3001299999999993E-3 0\nBHUTAN\n0\n0\n0\nBOTSWANA\n0\n0\n1.99\nBOUVET\nISLAND\n0\n0\n0\nBRAZIL\n0\n0\n0\nBRITISH\nINDIAN OCEAN\nTERRITORY\n0\n0\n0\nBRITISH VIRGIN\nISLANDS\n0.5\n0.805176\n13.0\nBRUNEI\nDARUSSALAM\n0\n0\n0\nBULGARIA\n0\n0\n0\nBURKINA FASO 0\n0\n0\nCAMEROON\n0\n0\n0\nCANADA\n2.999968\n0\n1.19\nCAYMAN\nISLANDS\n1.17\n0\n3.2\nCHINA\n6.5927118\n0.25280903999999998\n2.62\nCONGO\n0\n0\n0\nCOTE D-IVOIRE 0\n0\n0\nCYPRUS\n15.620155489999998\n3.75\n12.1\nCZECH\nREPUBLIC\n0\n0\n0\nDENMARK\n1.95\n0.65\n5.49\nEGYPT\n0.1597624\n0.5627624\n88.4\nFINLAND\n0\n0\n0\nFRANCE\n4.0200000000000001E-3 0.31245023\n55.1\nGABON\n0\n0\n0\nGAMBIA\n0\n0\n0\nGEORGIA\n0\n0\n0\nGERMANY\n0.48958711999999999\n16.295378929999998\n36.1\nGHANA\n1.67987\n1\n1.96\nGIBRALTAR\n0\n3.85E-2\n0\nGREECE\n0.83499999999999996\n0\n0\nGUADELOUPE\n0\n0\n0\nGUINEA\n0\n0\n0\nHONG KONG\n5.1358402000000005\n5.3447245399999996\n12.6\nHUNGARY\n0\n0\n0\nICELAND\n0\n0\n4.99\nINDIA\n2.4980950600000003\n7.1963120599999995\n3.56\nINDONESIA\n0\n0.39034600000000003\n0\nIRELAND\n6.6666000000000003E-2 0\n0\nISLE OF MAN\n0\n0.15495999999999999\n0\nISRAEL\n0.24995800000000001\n3.9965000000000001E-2 0.22\nITALY\n0.62672641000000007\n1.04910777\n3.78\nJAPAN\n3.9471999999999997E-3 10.94935452\n0\nJORDAN\n0\n0\n0\nKENYA\n2.4999549999999999\n0.12\n0\nKIRIBATI\n0\n0\n0\nKOREA,\nREPUBLIC OF\n0\n0\n0\nTable D.7.1.3:\nCapital\nImportation By\nCountry (US$'\nMillion) . . .\nContinued\n2010\nQ1\nQ2\nQ3\nKUWAIT\n0\n0\n0\nLATVIA\n0\n0\n0\nLEBANON\n10.833030410000001\n11.71223779\n2.45\nLIBERIA\n0\n0\n0\nLIBYA\n0\n0\n0\nLIECHTENSTEIN 0\n0.45\n0\nLUXEMBOURG\n1.7417379799999999\n2.4844643900000003\n100.\nMALAYSIA\n2.8000000000000001E-2 1.2E-2\n1.49\nMALTA\n0\n0\n0\nMARSHALL\nISLANDS\n0\n0\n0\nMAURITANIA\n0\n0\n0\nMAURITIUS\n23.384848000000002\n72.59885328\n28.4\nMEXICO\n0.74172183999999997\n0\n0\nMONACO\n0\n0\n0\nMOROCCO\n0\n0\n0\nMOZAMBIQUE\n0\n0\n0\nNAMIBIA\n0\n0\n0\nNETHERLANDS\n17.13420859\n253.75358476999997\n88.0\nNETHERLANDS\nANTILLES\n0\n0.99997499999999995\n0\nNEW ZEALAND\n0\n0\n0\nNIGER\n0\n0\n0\nNIUE\n0\n0\n0\nNORWAY\n0\n0\n0\nOMAN\n0\n0\n0\nPANAMA\n0.82992999999999995\n0.75726300000000002\n0.59\nPHILIPPINES\n0\n0\n0\nPITCAIRN\n0\n0\n0\nPOLAND\n0\n0\n0\nPORTUGAL\n0\n0\n0.17\nPUERTO RICO\n0\n0\n0\nQATAR\n0\n0\n0\nREPUBLIC OF\nSOUTH AFRICA\n382.68033130000003\n83.843251010000003\n44.4\nROMANIA\n4.9999900000000004\n0\n0\nRUSSIAN\nFEDERATION\n0\n0\n0\nRWANDA\n0\n0\n0\nSAINT KITTS\nAND NEVIS\n0\n0\n0\nSAO TOME &\nPRINCIPE\n0\n0\n0\nSAUDI ARABIA\n11\n0\n0\nSENEGAL\n0\n0\n0\nSEYCHELLES\n0\n0\n0\nSIERRA LEONE\n0\n0\n0\nSINGAPORE\n33.135171999999997\n4.7268600000000003\n0.20\nSLOVAKIA\n0\n0\n0\nSLOVENIA\n0\n0\n0\nSPAIN\n0\n1.576079E-2\n6.42\nSRI LANKA\n0\n0\n0\nSWAZILAND\n0\n0\n0\nSWEDEN\n25\n15\n0\nSWAZILAND\n0\n0\n0\nSWITZERLAND\n17.698346810000004\n16.811750299999996\n18.6\nSYRIAN ARAB\nREPUBLIC\n0\n0\n0\nTAIWAN,\nPROVINCE OF\nCHINA\n5.0000000000000001E-3 0.04\n3.18\nTHAILAND\n0\n7.0000000000000007E-2 7.00\nTOGO\n0\n0\n0\nTOKELAU\n0\n0\n0\nTUNISIA\n0\n0\n0\nTURKEY\n2.8476598599999998\n0\n0\nUGANDA\n0\n0\n0\nUKRAINE\n0\n0\n0\nUNITED ARAB\nEMIRATES\n11.719861460000001\n33.382578000000002\n15.8\nUNITED\nKINGDOM\n714.27739445999998\n554.54440597000007\n731.\nUNITED\nREPUBLIC OF\nTANZANIA\n0\n0\n0\nUNITED STATES 425.39695152999997\n218.71641750999999\n227.\nUNITED STATES\nVIRGIN\nISLANDS\n0\n0\n0\nURUGUAY\n0\n0\n0\nVIETNAM\n0\n0\n0\nZAMBIA\n0\n1\n0\nZIMBABWE\n0\n0\n0\nTOTAL\n1760.08174205\n1339.79778545\n1500\nSource: Central\nBank of Nigeria\nReturn to\nMenu\nTable D.7.2:\nCo-ordinated\nDirect\nInvestment\nSurvey (₦'\nMillion)\n2011\nCountry\nTotal Inward Direct\nInvestment\nTotal Equity Inward\n(Net)\nTotal Deb\nAfganistan\n0.01\n0\n0.01\nAlgeria\n6.0919999999999996\n0\n6.091999\nAngola\n9.7219999999999995\n0\n9.721999\nAsia\n94.799000000000007\n0\n94.79900\nAustralia\n13.206\n0\n13.206\nBahamas\n2465.2324199999998\n2465.2324199999998 0\nBahrain\n1.8759999999999999\n0\n1.875999\nBelgium\n7237.4827360000008\n6892.9147360000006 344.5679\nBenin\n133.27500000000001\n0\n133.2750\nBermuda\n1906076.3955399999\n1068626.1409400001 837450.2\nBotswana\n0.04\n0\n0.04\nBrazil\n365.46563000000003\n326.77463\n38.69100\nBritish Virgin\nIsland\n657803.52490600001\n20370.908251999997 637432.6\nBurkina Faso\n0\n0\n0\nCameroun\n40.929000000000002\n0\n40.92900\nCanada\n-3302.9632000000001\n-3756.5912000000003 453.6279\nCayman\nIslands\n38115.471740000001\n7416.8677400000006 30698.60\nChina\n2146298.744224932\n2090333.9339249323 55964.81\nCongo\n0.94499999999999995\n0\n0.944999\nCote D'Ivoire\n2045.6410000000001\n1490.0630000000001 555.5779\nCyprus\n69013.69640999999\n9594.1393599999992 59419.55\nDenmark\n4871.9910999999993\n1975.3711000000001 2896.62\nEgypt\n11.608000000000001\n0\n11.60800\nEquitorial\nGuinea\n-35.015010000000004\n-35.015010000000004 0\nEritrea\n8.0120000000000005\n8.0120000000000005 0\nFinland\n538.24400000000003\n68.257999999999996 469.9859\nFrance\n901831.40334100008\n614804.11516100017 287027.2\nFremley\n0\n0\n0\nGabon\n277.11099999999999\n0\n277.1109\nGambia\n22.574999999999999\n22.574999999999999 0\nGermany\n20072.882595499999\n13190.933595500001 6881.949\nGhana\n19111.285188769994\n16693.064828769999 2418.220\nGibraltar\n2332.3220300000003\n687.89702999999997 1644.425\nGreece\n11327.212\n11327.212\n0\nGuerrsey\n473.077\n473.077\n0\nGuinea\n0.02\n0\n0.02\nGuinea Bissau\n7.2999999999999995E-2 0\n7.299999\nGulf\n209.298\n0\n209.298\nHong Kong\n5455.5082000000002\n5397.2341999999999 58.27400\nHungary\n33.17\n33.17\n0\nIndia\n62669.663827770004\n61352.73282777\n1316.931\nIndonesia\n2.411\n0\n2.411\nIreland\n1789.5885499999999\n209.64155\n1579.946\nIsle of Man\n1674.1961999999999\n1674.1961999999999 0\nIsrael\n133047.77053000001\n133047.77053000001 0\nItaly\n758044.75775679993\n234483.45275680002 523561.3\nJapan\n2130.8524397000001\n1889.7664397000003 241.0860\nJordan\n424.46379999999994\n424.46379999999994 0\nKazakhstan\n1632.4829999999999\n0\n1632.482\nKenya\n82353.799714799999\n82346.897714799998 6.902000\nKuwait\n166.572\n166.572\n0\nLebanon\n909317.95234338997\n721431.11546533997 187886.8\nLiberia\n13472.856800000001\n13472.856800000001 0\nLibya\n1132.9059\n761.04489999999998 371.8609\nLuxemburg\n10999.431919999999\n-125.62408000000008 11125.05\nMadeira Island 337.99599999999998\n337.99599999999998 0\nMalaysia\n117\n0\n117\nMauritius\n141812.773082\n140147.21208199998 1665.560\nMexico\n1.45\n0\n1.45\nMonaco\n4452.0825000000004\n4452.0825000000004 0\nNetherlands\n2298386.0685930001\n1200711.4995929999 1097674\nNorway\n4898.1468399999994\n-3252.2796800000001 8150.426\nOthers\n27285.598752000002\n3748.5987519999999 23537\nPakistan\n401.56299999999999\n374.85399999999998 26.709\nPanama\n141472.39276249998\n141472.39276249998 0\nPeachtree\n0.48599999999999999\n0\n0.485999\nPerth\n2.387\n0\n2.387\nPhilipines\n22.099\n0\n22.099\nPortugal\n644.91899999999998\n644.91899999999998 0\nQatar\n13815.906000000001\n0\n13815.90\nIreland\n0\n0\n0\nRomania\n1841.5374999999999\n1070.7465\n770.7910\nRwanda\n0.223\n0\n0.223\nSaudi Arabia\n50029.892899999999\n49881.649899999997 148.2429\nScandinavia\n119.508\n0\n119.508\nSenegal\n0\n0\n0\nSeychelles\n357.62900000000002\n0\n357.6290\nShagar\n35.226999999999997\n0\n35.22699\nSierra Leone\n1988.9097939999999\n1987.964794\n0.944999\nSingapore\n76101.457618600005\n72922.505028600004 3178.952\nSlovakia\n0\n0\n0\nSouth Africa\n283993.875856\n212941.237376\n71052.63\nSouth Korea\n3749.2976014000001\n3707.7806014000003 41.51700\nSpain\n12000\n12000\n0\nSri Lanka\n552.31700000000001\n552.31700000000001 0\nSudan\n11229.98\n-4397.143\n15627.12\nSwaziland\n4002.4867889000002\n4002.4637889000001 2.3E-2\nSweden\n21718.532415199999\n21635.845415199998 82.68699\nSwitzerland\n499903.15182129998\n495168.26146129996 4734.890\nSyria\n13.430122649999999\n13.101122649999999 0.329000\nTanzania\n0\n0\n0\nThailand\n554.46690000000001\n535.7989\n18.66799\nTogo\n68557.527000000002\n42275.711000000003 26281.81\nTrinidad\n0\n0\n0\nTunisia\n0.67400000000000004\n0\n0.674000\nTurkey\n82.522999999999996\n0\n82.52299\nUAE\n46172.09259\n22494.618589999998 23677.47\nUganda\n0.34799999999999998\n0\n0.347999\nUK\n1493260.2001905402\n1266930.2513505402 226329.9\nUSA\n418770.58185952995\n389342.34865952999 29428.23\nVanuatu\n343.60899999999998\n343.60899999999998 0\nVietnam\n0\n0\n0\nYemen\n0\n0\n0\nZambia\n1518.758\n0\n1518.758\nTotal\n13402369.174122285\n9201587.5181102324 4200781\nSource:\nCentral Bank\nof Nigeria\nTable D.7.2:\nCo-ordinated\nDirect\nInvestment\nSurvey (₦'\nMillion)\n2012\nCountry\nTotal Inward Direct\nInvestment\nTotal Equity Inward\n(Net)\nTotal Deb\nAfganistan\n1.2999999999999999E-2 0\n1.299999\nAlgeria\n1146.6099999999999\n0\n1146.609\nAngola\n4.88\n0\n4.88\nAsia\n8.2219999999999995\n0\n8.221999\nAustralia\n21.725000000000001\n0\n21.72500\nBahamas\n2517.0803999999998\n2517.0803999999998 0\nBahrain\n0\n0\n0\nBelgium\n8860.7251359999991\n8617.8671360000008 242.858\nBenin\n144.01300000000001\n0\n144.0130\nBermuda\n2015792.0628300002\n1051727.24013\n964064.8\nBotswana\n0.191\n0\n0.191\nBrazil\n370.11263000000002\n326.77463\n43.33800\nBritish Virgin\nIsland\n956715.49614499998\n31672.661549999993 925042.8\nBurkina Faso\n1.881\n0\n1.881\nCameroun\n92.343000000000018\n0\n92.34300\nCanada\n8921.3081999999995\n8613.2111999999997 308.0969\nCayman\nIslands\n41196.224139999998\n7702.7401399999999 33493.48\nChina\n2103060.4809249318\n2047670.441624932\n55390.03\nCongo\n6.44\n0\n6.44\nCote D'Ivoire\n2026.36\n1791.1410000000001 235.2189\nCyprus\n76992.922269999995\n7748.7051600000004 69244.21\nDenmark\n2054.4407000000001\n1421.8356999999999 632.6050\nEgypt\n273.24700000000001\n0\n273.2470\nEquitorial\nGuinea\n10.128\n10.128\n0\nEritrea\n8.0120000000000005\n8.0120000000000005 0\nFinland\n449.596\n74.393000000000001 375.2029\nFrance\n917280.55728099984\n642224.61152100004 275055.9\nFremley\n5.6109999999999998\n0\n5.610999\nGabon\n1315.7159999999999\n0\n1315.715\nGambia\n22.574999999999999\n22.574999999999999 0\nGermany\n25193.110995899999\n18286.327995900003 6906.783\nGhana\n44545.029364769995\n23197.26836477\n21347.76\nGibraltar\n685.98291999999992\n114.14191999999998 571.8410\nGreece\n11327.212\n11327.212\n0\nGuerrsey\n614.80799999999999\n614.80799999999999 0\nGuinea\n0.53800000000000003\n0\n0.538000\nGuinea Bissau\n0\n0\n0\nGulf\n5.7510000000000003\n0\n5.751000\nHong Kong\n7265.7439999999997\n5527.7979999999998 1737.945\nHungary\n33.17\n33.17\n0\nIndia\n93883.343987769986\n90527.254987769993 3356.088\nIndonesia\n31.274999999999999\n0\n31.27499\nIreland\n3136.5766600000002\n-524.52833999999996 3661.105\nIsle of Man\n1585.691\n1585.691\n0\nIsrael\n70899.62904\n70899.558040000004 7.099999\nItaly\n761486.35242679995\n239483.61142680002 522002.7\nJapan\n2168.6550397000001\n1978.8980397\n189.7570\nJordan\n527.97648000000004\n527.97648000000004 0\nKazakhstan\n2114.924\n0\n2114.924\nKenya\n91539.420514800018\n91522.064514800019 17.35600\nKuwait\n193.5384\n193.5384\n0\nLebanon\n2030963.3532233902\n738744.85734533996 1292218\nLiberia\n48462.794470000001\n48462.794470000001 0\nLibya\n1309.2501000000002\n876.19309999999996 433.0570\nLuxemburg\n10317.41568\n-590.94732000000033 10908.36\nMadeira Island 314.59199999999998\n314.59199999999998 0\nMalaysia\n78.728999999999999\n0\n78.72899\nMauritius\n156220.15289199995\n134245.05289199998 21975.09\nMonaco\n3385.0496000000003\n3385.0496000000003 0\nNetherlands\n2450075.5133979996\n1359312.5163980001 1090762\nNorway\n5213.7369900000003\n-3128.3150500000002 8342.052\nOthers\n264951.33750200004\n241414.33750200001 23537\nPakistan\n501.60199999999998\n427.673\n73.92900\nPanama\n150256.4667625\n150201.12221999999 0\nPeachtree\n0\n0\n0\nPerth\n0\n0\n0\nPhilipines\n39.695999999999998\n0\n39.69599\nPortugal\n1259.9504999999999\n1259.9504999999999 0\nQatar\n17094.019\n0\n17094.01\nIreland\n0\n0\n0\nRomania\n2390.328\n1164.366\n1225.962\nRwanda\n1.2170000000000001\n0\n1.217000\nSaudi Arabia\n549430.81499999994\n549260.80000000005 170.0149\nScandinavia\n0\n0\n0\nSenegal\n61.19\n0\n61.19\nSeychelles\n813.48500000000001\n0\n813.4850\nShagar\n53.460999999999999\n0\n53.46099\nSierra Leone\n51533.70033\n51522.711329999998 10.98900\nSingapore\n85245.945528599987\n73249.525498599993 11996.42\nSlovakia\n5.9939999999999998\n0\n5.993999\nSouth Africa\n397964.19278600003\n327221.76878600003 70742.42\nSouth Korea\n3802.1804013999999\n3801.8374013999996 0.343000\nSpain\n24500\n24500\n0\nSri Lanka\n867.31600000000003\n867.31600000000003 0\nSudan\n11272.006599999999\n-4382.2974000000004 15654.30\nSwaziland\n0.36099999999999999\n0\n0.360999\nSweden\n4115.6707888999999\n3927.1977889\n188.4730\nSwitzerland\n590837.51352949999\n586132.94021949999 4704.573\nSyria\n1629.99205665\n1628.2730566499999 1.719000\nTanzania\n2.7330000000000001\n0\n2.733000\nThailand\n1216.1342999999999\n1189.5653\n26.56899\nTogo\n68557.527000000002\n42275.711000000003 26281.81\nTrinidad\n1.089\n0\n1.089\nTunisia\n0.67400000000000004\n0\n0.674000\nTurkey\n29.756\n0\n29.756\nUAE\n62258.523309999997\n22985.772309999997 39272.75\nUganda\n0.86099999999999999\n0\n0.860999\nUK\n1580892.5244175401\n1385947.48199754\n194945.0\nUSA\n641946.15175302979\n609852.59869302984 32093.55\nVanuatu\n326.65499999999997\n326.65499999999997 0\nVietnam\n0\n0\n0\nYemen\n4.8000000000000001E-2 0\n4.800000\nZambia\n0.17699999999999999\n0\n0.176999\nTotal\n16476739.584406182\n10723841.308660632 5752842\nSource:\nCentral Bank\nof Nigeria\nTable D.7.2:\nCo-ordinated\nDirect\nInvestment\nSurvey (₦'\nMillion)\n2013\nCountry\nTotal Inward Direct\nInvestment\nTotal Equity Inward\n(Net)\nTotal Deb\nAlgeria\n6.0919999999999996\n0\n6.091999\nAngola\n-167.60838000000001\n0\n-167.608\nAustralia\n-8763.134\n0\n-8763.13\nBahamas\n-4370.8835499999996\n8.0214499999999997 -4378.90\nBarbados\n-32098.999999999996\n0\n-32098.9\nBelgium\n187722.22525999998\n187608.16225999998 114.063\nBenin\n1\n0\n1\nBermuda\n523168.49315540004\n523054.22115539998 114.2720\nBritish Virgin\nIsland\n524828.17968122801\n36638.566681227996 488189.6\nBurundi\n-15\n0\n-15\nCameroon\n-84.531000000000006\n0\n-84.5310\nCanada\n8726.2187589999994\n8219.6797590000006 506.5389\nCayman\nIslands\n41898.844572067799\n6418.8445720677992 35480\nChad\n0.28100000000000003\n0\n0.281000\nChina\n708447.92733675975\n708447.92733675975 0\nCongo\n-33.445999999999998\n0\n-33.4459\nCote D'Ivoire\n525.87194999999997\n1132.0459499999999 -606.173\nCyprus\n6371.5749999999998\n7168.6139999999996 -797.038\nDenmark\n2863.5536175904199\n2782.8496175904202 80.70399\nEgypt\n722.43899999999996\n388.75400000000002 333.685\nEquitorial\nGuinea\n10.128\n10.128\n0\nFinland\n393.87799999999999\n74.393000000000001 319.4850\nFrance\n845398.9385193343\n701457.67851933429 143941.2\nGabon\n-193.209\n0\n-193.209\nGambia\n-1\n0\n-1\nGermany\n32998.150205339996\n32894.50920534\n103.6410\nGhana\n41607.365575600001\n22794.783575599999 18812.58\nGibraltar\n886.46547999999996\n632.94047999999998 253.5250\nGreece\n5501.2628000000004\n5501.2628000000004 0\nGuernsey\n614.80799999999999\n614.80799999999999 0\nGuinea\n-439.88265999999999\n0\n-439.882\nHong Kong\n1050.8081532828999\n1050.8081532828999 0\nIndia\n627044.75289607304\n610584.62189607299 16460.13\nIndonesia\n48.853000000000002\n0\n48.85300\nIsle of Man\n1237.799\n1237.799\n0\nIsrael\n70908.558040000004\n70908.558040000004 0\nItaly\n21077.816167034001\n19164.577667034002 1913.238\nJapan\n5813.506511999999\n5813.506511999999\n0\nJersey\n493.49285520000001\n435.07885519999996 58.41400\nJordan\n719.67899999999997\n340.14800000000002 379.5310\nKenya\n91366.286400000012\n91366.286400000012 0\nLebanon\n516064.84849041956\n512478.47828236956 3586.370\nLiberia\n48315.938719800004\n48319.2597198\n-3.32100\nLiechtenstein\n-185924.9117154268\n2787.0882845732099 -188712\nLuxembourg\n54967.491100600004\n17927.753100600003 37039.73\nMadeira Island 314.59199999999998\n314.59199999999998 0\nMalawi\n-4\n0\n-4\nMalaysia\n12.5\n12.5\n0\nMauritius\n171514.90830540002\n168908.87971040001 2606.028\nMOZAMBIQUE -11.734\n0\n-11.734\nNepal\n14.423\n0\n14.423\nNetherlands\n1927114.3394579079\n1552629.7532631478 374484.5\nNew Zealand\n34.530999999999999\n34.530999999999999 0\nNorway\n150187.46481977002\n11409.21932977\n138778.2\nOthers\n620.93820000000005\n620.93820000000005 0\nPakistan\n427.673\n427.673\n0\nPANAMA\n166194.97098339998\n164980.01198339998 1214.959\nPortugal\n1259.9504999999999\n1259.9504999999999 0\nQatar\n10345.416999999999\n0\n10345.41\nRomania\n1164.366\n1164.366\n0\nSaudi Arabia\n549288.625\n549260.80000000005 27.82499\nSeychelles\n813.48500000000001\n0\n813.4850\nSIERRA\nLEONE\n51510.711329999998\n51510.711329999998 0\nSingapore\n84654.1453912\n61552.954691200001 23101.19\nSouth Africa\n518709.53220709995\n517699.94820709998 1009.584\nSouth Korea\n3789.0747000000001\n3788.5227\n0.552000\nSpain\n3177.6260000000002\n3177.6260000000002 0\nSRI LANKA\n867.31600000000003\n867.31600000000003 0\nSweden\n3927.1977889\n3927.1977889\n0\nSwitzerland\n77107.476999922495\n66640.994999922492 10466.48\nSyria\n2738.877\n2738.877\n0\nThailand\n1189.5653\n1189.5653\n0\nTogo\n166253\n166253\n0\nTurkey\n29.68\n0\n29.68\nUAE\n16913.229950000001\n18481.79895\n-1568.56\nUganda\n-1\n0\n-1\nUK\n1904659.2565627\n1995508.4084927002 -90849.1\nUSA\n652678.36433286499\n638891.46382249997 13786.90\nVanuatu\n111.855744\n111.855744\n0\nZambia\n-4\n0\n-4\nTotal\n10607315.28151447\n9611625.6102862954 995689.6\nSource:\nCentral Bank\nof Nigeria\nTable D.7.2:\nCo-ordinated\nDirect\nInvestment\nSurvey (₦'\nMillion)\n2014\nCountry\nTotal Inward Direct\nInvestment\nTotal Equity Inward\n(Net)\nTotal Deb\nAberdeen\n2410.63\n0\n2410.63\nAfganistan\n1.2999999999999999E-2 0\n1.299999\nAngola\n4.88\n0\n4.88\nAustralia\n984.10799999999995\n962.38300000000004 21.72500\nBahamas\n13.478999999999999\n13.478999999999999 0\nBahrain\n56.4\n0\n56.4\nBelgium\n8926.7882199999985\n7956.5509799999991 970.2372\nBenin\n1579.384\n0\n1579.384\nBermuda\n616075.41745999991\n615382.55245999992 692.8650\nBotswana\n0.191\n0\n0.191\nBrazil\n3494.4659999999999\n0\n3494.465\nBritish Virgin\nIsland\n1106921.634695\n184226.122695\n922695.5\nBurkina Faso\n56.432000000000002\n0\n56.43200\nCameroun\n61.697000000000003\n0\n61.69700\nCanada\n8543.9326671999988\n8234.1206672000008 309.8120\nCayman\nIslands\n475534.51007034699\n433616.738070347\n41917.77\nChad\n144.01300000000001\n0\n144.0130\nChile\n5.7839999999999998\n0\n5.783999\nChina\n1677356.7744117298\n1676176.5824117297 1180.192\nCongo\n204.24\n0\n204.24\nCote D'voire\n10442.0328212\n10316.0378212\n125.995\nCyprus\n31064.611565400002\n11972.906455400002 19091.70\nDenmark\n2832.8604218999999\n2442.1854219000002 390.6750\nEgypt\n9934.6972499999993\n9934.2492500000008 0.448000\nEquatorial\nGuenie\n-38.38364\n-42.01164\n3.628000\nEritrea\n0\n0\n0\nFinland\n449.596\n74.393000000000001 375.2029\nFrance\n939852.8899013435\n761272.35290134349 178580.5\nGabon\n56.999000000000002\n0\n56.99900\nGermany\n9884.2911976999894\n1965.1571976999892 7919.134\nGhana\n19756.538809999998\n9948.9748099999979 9807.564\nGibraltar\n6224.5483647999999\n945.42836479999994 5279.12\nGreece\n38.429934807999999\n10.108934808000001 28.32100\nGuinea Bissau\n0.53800000000000003\n0\n0.538000\nHongkong\n2878.2733006720005\n683.10730067200006 2195.166\nHungary\n0\n0\n0\nIndia\n1782440.6081732179\n1741669.9221732179 40770.68\nIndonesia\n58.734000000000002\n0\n58.73400\nireland\n4298.9950230000004\n4264.1990230000001 34.79599\nIsle of Man\n1356.31639\n1356.31639\n0\nIsrael\n70908.558040000004\n70908.558040000004 0\nItaly\n273031.77631575504\n141462.77787575501 131568.9\nJapan\n11126.881638000001\n11126.881638000001 0\nJordan\n19387.165720799996\n19387.165720799996 0\nKenya\n91826.678400000004\n91366.286400000012 460.392\nKingston and\nGrenadines\n179.55648499999998\n179.55648499999998 0\nKorea\n0\n0\n0\nLebanon\n472539.92612791696\n471563.54724986688 976.3788\nLiberia\n48319.2597198\n48319.2597198\n0\nLiechtenstein\n3467.8139073411899\n3467.8139073411899 0\nLuxembourg\n45378.416530600007\n8338.678530600002\n37039.73\nMadagascar\n5.7910000000000004\n0\n5.791000\nMadeira Island 314.59199999999998\n314.59199999999998 0\nMalawi\n16.805\n0\n16.805\nMalaysia\n103.794\n12.5\n91.29399\nMauritius\n311095.5650756603\n309287.47407566028 1808.090\nNetherlands\n3533318.079388517\n2727914.3868285171 805403.6\nNew Zealand\n872.77440000000001\n872.77440000000001 0\nNiger\n6152.8029999999999\n0\n6152.802\nNorway\n100264.47925943999\n33738.419689439987 66526.05\nPakistan\n484.226\n427.673\n56.55299\nPanama\n15061.516667800001\n9636.3326677999994 5425.184\nPhilipines\n34.667999999999999\n0\n34.66799\nPortugal\n1321.8112599999999\n1321.8112599999999 0\nQatar\n1720.9094731999999\n977.43847319999998 743.471\nRomania\n1225.962\n0\n1225.962\nRussia\n86.54\n0\n86.54\nRwanda\n4.8120000000000003\n0\n4.812000\nSaudi Arabia\n549392.65899999999\n549260.80000000005 131.8590\nSenegal\n21.905999999999999\n0\n21.90599\nSeychelles\n813.55200000000002\n0\n813.5520\nSierra Leone\n1852.2993300000001\n1826.4973300000001 25.802\nSingapore\n70489.667000499991\n61840.637000499999 8649.030\nSouth Africa\n439735.84455759998\n431282.87555759994 8452.968\nSouth Korea\n119131.5827\n9135.8036999999986 109995.7\nSpain\n132.136\n132.136\n0\nSudan\n-81.59\n-115.919\n34.32900\nSwaziland\n0.36099999999999999\n0\n0.360999\nSweden\n4094.2407889000001\n3927.1977889\n167.0430\nSwitzerland\n157199.60967552254\n148816.94387552253 8382.665\nSyria\n1.7190000000000001\n0\n1.719000\nTanzania\n89.894000000000005\n0\n89.89400\nThailand\n2381.5605\n2381.3485000000001 0.211999\nTogo\n212188.54725964952\n212188.54725964952 0\nTurkey\n108.053\n0\n108.053\nUganda\n29.254999999999999\n0\n29.25499\nUK\n2101690.3405981362\n1912197.4874961362 189492.8\nUnallocated\n38664.390115000002\n18.220520000000075 38646.16\nUnited Arab\nEmirates\n111352.9893302\n61597.413330200005 49755.57\nUSA\n967862.84676047252\n719797.89816047251 248064.9\nVanuatu\n-500.53608000000003\n-500.53608000000003 0\nYemen\n4.8000000000000001E-2 0\n4.800000\nZambia\n3.831\n0\n3.831\nTotal\n16508813.718984129\n13547793.136089079 2961020\nSource:\nCentral Bank\nof Nigeria\nTable D.7.2:\nCo-ordinated\nDirect\nInvestment\nSurvey (₦'\nMillion)\n2015\nCountry\nTotal Inward Direct\nInvestment\nTotal Equity Inward\n(Net)\nTotal Deb\nAlgeria\n4.5250000000000004\n0\n4.525000\nAngola\n176.60470764226227\n0\n176.6047\nArgentina\n1059.0853841999999\n1020.3748842\n38.71050\nAustralia\n1273.8295243937055\n0\n1273.829\nBahamas\n2613.9823334999996\n2613.9823334999996 0\nBahrain\n0\n0\n0\nBelgium\n375383.76851332001\n13503.089513320001 361880.6\nBenin\n385.197\n0\n385.197\nBermuda\n2342874.2677789\n1332095.2452789003 1010779\nBrazil\n86234.613281128914\n86131.268834200004 103.3444\nBritish Virgin\nIslands\n115205.017080522\n96409.488080522002 18795.52\nBulgaria\n7.9930000000000003\n0\n7.993000\nBurkina Faso\n5.0179999999999998\n0\n5.017999\nCameroon\n87.361000000000004\n0\n87.36100\nCanada\n576.73737121375848\n470.32081699999998 106.4165\nCayman\nIslands\n797928.19465717743\n562746.79101579997 235181.4\nChina\n693418.90648137941\n679639.78248137934 13779.12\nColumbia\n0\n0\n0\nCongo\n3.0270000000000001\n0\n3.027000\nCongo DR\n4.5720000000000001\n0\n4.572000\nCosta Rica\n1.6040000000000001\n0\n1.604000\nCote D'Ivoire\n23831.779686999998\n8578.635687\n15253.14\nCyprus\n6747.061781418116\n1379.8533031067\n5367.208\nCzech\nRepublic\n2.3290000000000002\n0\n2.329000\nDenmark\n7601.5444446269894\n1847.44944462699\n5754.095\nEgypt\n7539.8035999999993\n7416.1220000000003 123.6816\nEstonia\n1.2829999999999999\n0\n1.282999\nFinland\n62.834540000000004\n54.495539999999998 8.339000\nFrance\n1771233.4821852264\n1675155.2561399064 96078.22\nGabon\n0.59299999999999997\n0\n0.592999\nGambia\n4.38\n0\n4.38\nGermany\n73223.689705688885\n44588.223375899994 28635.46\nGhana\n5484.5755436408035\n2136.655543640803\n3347.92\nGibraltar\n17021.979719999999\n-109.14528\n17131.12\nGreece\n216.14\n0\n216.14\nGuernsey\n5351.3559999999998\n0\n5351.355\nGuinea\n39.756\n0\n39.756\nHong Kong\n2893.79448195036\n1849.3494819503599 1044.444\nHungary\n24.909299999999998\n22.8873\n2.021999\nIndia\n206249.65752516518\n203177.03677516518 3072.620\nIndonesia\n42.8035\n0\n42.8035\nIreland\n5136.2151662338638\n4232.4080532299995 903.8071\nIsle of Man\n76207.511840000006\n4580.9688399999995 71626.54\nIsrael\n80091.487362799991\n80091.487362799991 0\nItaly\n160618.71673428398\n120126.32973428398 40492.38\nJapan\n35774.460009999995\n6592.6970099999999 29181.76\nJersey\n2976.9353987000009\n2976.9353987000009 0\nJordan\n734.82174588000009\n126.20074588000001 608.6209\nKenya\n16315.243\n0\n16315.24\nKuwait\n782.86568219999992\n782.86568219999992 0\nLebanon\n68807.35552648564\n64151.539510443799 4655.816\nLiberia\n57598.429530999994\n57535.653338399999 62.77619\nLiechtenstein\n18.3045747719543\n18.3045747719543\n0\nLuxembourg\n49943.931618423652\n9494.3876686399981 40449.54\nMalaysia\n270.43038642169711\n12.125\n258.3053\nMali\n10.050000000000001\n0\n10.05000\nMalta\n58.933\n0\n58.933\nMauritius\n77191.438755799987\n7289.8863787999953 69901.55\nMexico\n0\n0\n0\nMonaco\n3611.0887499999999\n3611.0887499999999 0\nMorocco\n322.90499999999997\n0\n322.9049\nNepal\n346.12700000000001\n0\n346.1270\nNetherlands\n4537648.4498658786\n3226238.3617479191 1311410\nNorway\n20119.198641517811\n-28189.173169900001 48308.37\nOthers\n15863.76451626\n118.51951625999999 15745.24\nPakistan\n698.55626000000007\n483.27048999999994 215.2857\nPanama\n2215.8992389999999\n1304.6082390000001 911.2910\nPhilippines\n0.91400000000000003\n0\n0.914000\nPoland\n29.715\n0\n29.715\nPortugal\n1026.6042642999998\n1006.8922643\n19.712\nQatar\n10.714\n0\n10.714\nRomania\n4386.5090292055638\n0\n4386.509\nRussia\n16.940000000000001\n0\n16.94000\nSaint Kitts and\nNevis\n884.31299999999999\n884.31299999999999 0\nSaudi Arabia\n28.527000000000001\n0\n28.52700\nSenegal\n0.91200000000000003\n0\n0.912000\nSeychelles\n884.31299999999999\n884.31299999999999 0\nSierra Leone\n2862.5478210000001\n2020.5920000000001 841.9558\nSingapore\n245605.81379767373\n150288.08979767372 95317.72\nSlovakia\n0\n0\n0\nSouth Africa\n313028.86231147812\n297617.36977347813 15411.49\nSouth Korea\n16803.393230999998\n15654.657330999999 1148.735\nSpain\n2.048\n0\n2.048\nSudan\n280.45100000000002\n0\n280.4510\nSweden\n964.85699999999997\n0\n964.8569\nSwitzerland\n172151.86098880536\n132282.59103460141 39869.26\nSyria\n9.0397746285\n9.0397746285\n0\nTanzania\n6\n0\n6\nThailand\n2770.9040749999999\n2677.4420749999999 93.46200\nTogo\n227762.86380000002\n227703.8438\n59.02\nTunisia\n10.808\n0\n10.808\nTurkey\n32.8795\n0\n32.8795\nUganda\n43.204000000000001\n0\n43.20400\nUnited Arab\nEmirates\n332010.0673853\n29017.825385299995 302992.2\nUnited\nKingdom\n1549325.2785414702\n1406711.7318167933 142613.5\nUSA\n702960.32969431055\n117795.73327367906 585164.5\nZambia\n9.4459999999999997\n0\n9.445999\nTotal\n15332091.292947926\n10666860.061748004 4665231\nSource:\nCentral Bank\nof Nigeria\nTable D.7.2:\nCo-ordinated\nDirect\nInvestment\nSurvey (₦'\nMillion)\n2016 1\nCountry\nTotal Inward Direct\nInvestment\nTotal Equity Inward\n(Net)\nTotal Deb\nAlgeria\n0.125\n0\n0.125\nAngola\n2482.4199676422622\n0\n2482.419\nArgentina\n2.4940000000000002\n0\n2.494000\nAustralia\n9782.8366784927057\n9774.5006540989998 8.336024\nAustria\n9.6000000000000002E-2 0\n9.600000\nAzerbaijan\n1671.194\n0\n1671.194\nBahamas\n1168.522062\n1168.522062\n0\nBahrain\n0\n0\n0\nBangladesh\n522.90200000000004\n0\n522.9020\nBelgium\n211221.64103292002\n45616.23927292\n165605.4\nBelize\n1989.4958999999999\n1989.4958999999999 0\nBenin\n1293.4870000000001\n0\n1293.487\nBermuda\n4257800.7201772453\n2343648.048992245\n1914152\nBrazil\n86536.064019128913\n86440.540572200014 95.52344\nBritish Virgin\nIslands\n1644992.5684383484\n896627.57343834825 748364.9\nBulgaria\n0.93300000000000005\n0\n0.933000\nCameroon\n177.22995\n0\n177.2299\nCanada\n1194.9729783137584\n966.25142409999989 228.7215\nCayman\nIslands\n723716.21725517733\n508421.5051138\n215294.7\nChina\n642322.99926337937\n623501.03026337933 18821.96\nCongo\n3.0270000000000001\n0\n3.027000\nCote D'Ivoire\n10767.9232928\n10521.5758128\n246.3474\nCyprus\n9690.9463927400157\n1707.1693144286\n7983.777\nCzech\nRepublic\n4.5860000000000003\n0\n4.586000\nDenmark\n9403.4474740616697\n2625.5864740616698 6777.860\nDR Congo\n18.193000000000001\n0\n18.19300\nEcuador\n1459.8377601999998\n422.35576020000002 1037.482\nEgypt\n19634.881000000001\n7110.2809999999999 12524.6\nFinland\n2309.4485399999999\n54.495539999999998 2254.953\nFrance\n2686532.3739712443\n2634651.1279309243 51881.24\nGabon\n65.224000000000004\n0\n65.22400\nGambia\n14\n0\n14\nGermany\n64195.454863924882\n20447.326638136001 43748.12\nGhana\n20130.85191930323\n2173.0339193032296 17957.81\nGibraltar\n26555.803920000002\n132.24591999999998 26423.55\nGreece\n17569.926849749998\n14526.075849749999 3043.851\nGuernsey\n25043.618999999999\n1560.893\n23482.72\nGuinea\n3.9592399999999999\n0\n3.959239\nHong Kong\n204506.75025175637\n3074.81125175636\n201431.9\nHungary\n505.59429999999998\n22.8873\n482.7069\nIndia\n832639.65342048288\n814516.87229090941 18122.78\nIndonesia\n3144.8409999729033\n270.969999972903\n2873.871\nIran\n8.5690000000000008\n0\n8.569000\nIraq\n8.61\n0\n8.61\nIreland\n6990.5093350038642\n131.46667200000002 6859.042\nIsle of Man\n9954.2681599999996\n-61.368839999999999 10015.63\nIsrael\n80091.487362799991\n80091.487362799991 0\nItaly\n273013.07161565399\n197377.34261565402 75635.72\nJapan\n17031.915399999998\n7401.8283999999994 9630.086\nJersey\n56889.769804199997\n27571.752804200001 29318.01\nJordan\n734.82174359999988\n126.20074359999998 608.6209\nKenya\n25196.212502000002\n355.01050199999997 24841.20\nKuwait\n909.37165306470001\n909.37165306470001 0\nLebanon\n296541.20969441067\n278659.00389836886 17882.20\nLiberia\n59245.0162996\n59229.7662996\n15.25\nLiechtenstein\n18.3045747719543\n18.3045747719543\n0\nLuxembourg\n42668.235129983666\n5652.9411802000004 37015.29\nMadagascar\n4.218\n0\n4.218\nMalaysia\n22531.3076375577\n22161.160851136003 370.1467\nMalta\n237.26499999999999\n0\n237.2649\nMauritania\n11.026999999999999\n0\n11.02699\nMauritius\n252438.02106919998\n7273.0822261999838 245164.9\nMexico\n43.732999999999997\n0\n43.73299\nMonaco\n3696.0697500000001\n3696.0697500000001 0\nMorocco\n2651.4404\n2277.9083999999998 373.5319\nMozambique\n1002.5839999999999\n0\n1002.583\nNepal\n357.74799999999999\n0\n357.7479\nNetherlands\n4063841.2945978376\n2892640.7657248783 1171200\nNorway\n89102.981223336814\n-46592.398268081\n135695.3\nOthers\n35735.151495360005\n22441.054344260003 13294.09\nPakistan\n820.12056599999983\n483.27048999999994 336.8500\nPanama\n47526.604874406992\n28149.980874406996 19376.62\nPoland\n79.606999999999999\n0\n79.60699\nPortugal\n1153.7757111999999\n1000.6907112\n153.0850\nQatar\n11.348100000000001\n0\n11.34810\nRepublic of\nCongo\n3196.2710000000002\n0\n3196.271\nRomania\n4846.9420292055638\n0\n4846.942\nRussia\n30.898\n0\n30.898\nRwanda\n3602.6840000000002\n3602.6840000000002 0\nSaint Kitts and\nNevis\n884.31299999999999\n884.31299999999999 0\nSaudi Arabia\n71.953999999999994\n0\n71.95399\nSenegal\n48.383000000000003\n0\n48.38300\nSeychelles\n884.31299999999999\n884.31299999999999 0\nSierra Leone\n2812.6497580000005\n2511.2378480000002 301.4119\nSingapore\n362796.6838343105\n206876.11752431054 155920.5\nSlovakia\n19.238\n0\n19.238\nSouth Africa\n540081.49843978207\n303458.62606578204 236622.8\nSouth Korea\n62778.161026679991\n-8622.1371783200011 71400.29\nSpain\n100.255\n0\n100.255\nSweden\n865.49300000000005\n0\n865.4930\nSwitzerland\n220042.14121956436\n148332.76416536045 71709.37\nSyria\n444.85060609850007\n435.1136060985001\n9.737000\nTanzania\n2689.8970749999999\n2677.4420749999999 12.455\nThailand\n63.738999999999997\n0\n63.73899\nTogo\n227592.39864\n220726.19219999999 6866.206\nTunisia\n0.47099999999999997\n0\n0.470999\nTurkey\n9.6440000000000001\n0\n9.644000\nUganda\n985.53\n963.8\n21.73\nUnited Arab\nEmirates\n82284.791002890794\n31420.554553890801 50864.23\nUnited\nKingdom\n2802583.1176997023\n1936388.220723826\n866194.8\nUnited States\n2493386.1772513147\n288454.43712368305 2204931\nVenezuela\n18.128\n0\n18.128\nZambia\n13.289\n0\n13.289\nTotal\n23724756.843201425\n14761959.787373224 8962797\nSource:\nCentral Bank\nof Nigeria\nNotes:\n1Revised\nTable D.7.2:\nCo-ordinated\nDirect\nInvestment\nSurvey (₦'\nMillion)\n2017 2\nCountry\nTotal Inward Direct\nInvestment\nTotal Equity Inward\n(Net)\nTotal Deb\nAlgeria\n0.125\n0\n0.125\nAngola\n161.42169764226227\n0\n161.4216\nArgentina\n1.2110000000000001\n0\n1.211000\nAustralia\n13097.569635338707\n13081.561610945002 16.00802\nAustria\n0.53400000000000003\n0\n0.534000\nAzerbaijan\n1324.3422372999999\n1324.3422372999999 0\nBahamas\n3.8460000000000001\n0\n3.846000\nBahrain\n522.90200000000004\n0\n522.9020\nBangladesh\n252793.90681992\n60757.66229991999\n192036.2\nBelgium\n2194.7825004000001\n2194.7825004000001 0\nBelize\n1113.50074\n0\n1113.500\nBenin\n4173465.9803988053\n2330639.7442138051 1842826\nBermuda\n86162.904461128914\n86065.580014200023 97.32444\nBrazil\n1856207.7448862181\n943801.06388621824 912406.6\nBritish Virgin\nIslands\n2.2999999999999998\n0\n2.299999\nBulgaria\n594.66\n0\n594.66\nCameroon\n1877.1281999137589\n1837.9086457000003 39.21955\nCanada\n738458.30065037741\n492136.04050900001 246322.2\nCayman\nIslands\n796887.92746337934\n778435.94646337943 18451.98\nChina\n3.48\n0\n3.48\nCongo\n10927.8087019\n10576.4722119\n351.3364\nCote D'Ivoire\n9405.8623927400149\n1707.1693144286\n7698.693\nCyprus\n5.2729999999999997\n0\n5.272999\nCzech\nRepublic\n10916.84147406167\n3978.8704740616699 6937.970\nDenmark\n11.288\n0\n11.288\nDR Congo\n1759.0776654000001\n583.28766540000004 1175.79\nEcuador\n19536.618999999999\n7110.2809999999999 12426.33\nEgypt\n2308.8595399999999\n54.495539999999998 2254.364\nFinland\n2707032.8733055443\n2638475.9084442244 68556.96\nFrance\n98.695999999999998\n0\n98.69599\nGabon\n18\n0\n18\nGambia\n64758.654379325686\n22684.955653536799 42073.69\nGermany\n18918.66298410323\n2110.0619841032299 16808.60\nGhana\n17414.40256975\n17414.40256975\n0\nGibraltar\n3762.81\n0\n3762.81\nGreece\n41336.97\n2666.0279999999998 38670.94\nGuernsey\n3.24404\n0\n3.24404\nGuinea\n190483.72717375637\n3304.1971737563599 187179.5\nHong Kong\n1113.5063\n22.8873\n1090.618\nHungary\n976727.12414070056\n957868.27710831212 18858.84\nIndia\n5156.6939998268435\n1731.5619998268439 3425.132\nIndonesia\n8.5690000000000008\n0\n8.569000\nIran\n8.61\n0\n8.61\nIraq\n8178.5485680038637\n131.46667200000002 8047.081\nIreland\n10783.829820000001\n616.41881999999998 10167.41\nIsle of Man\n80091.487362799991\n80091.487362799991 0\nIsrael\n241477.077966254\n199147.70796625401 42329.37\nItaly\n13886.043230000001\n9199.0302300000003 4687.012\nJapan\n34398.831538399994\n27271.764038399997 7127.067\nJersey\n734.82174359999988\n126.20074359999998 608.6209\nJordan\n25319.340501999999\n355.01050199999997 24964.33\nKenya\n3072.6160810127994\n3072.6160810127994 0\nKuwait\n295311.85092131066\n273180.85612526879 22130.99\nLebanon\n63535.602757799999\n63517.5857578\n18.01699\nLiberia\n18.3045747719543\n18.3045747719543\n0\nLiechtenstein\n39340.774231983662\n3490.5382822000001 35850.23\nLuxembourg\n4.218\n0\n4.218\nMadagascar\n22042.801390301702\n21740.420013880004 302.3813\nMalaysia\n31.084\n0\n31.084\nMalta\n109.182\n0\n109.182\nMauritania\n289624.13285109994\n-140690.78181190006 430314.9\nMauritius\n76.349000000000004\n0\n76.34900\nMexico\n3727.76775\n3727.76775\n0\nMonaco\n2635.5819999999999\n2262.0500000000002 373.5319\nMorocco\n94.108999999999995\n0\n94.10899\nMozambique\n357.74799999999999\n0\n357.7479\nNepal\n4062935.1842405731\n2996420.7843876141 1066514\nNetherlands\n86649.238697397799\n8743.206995980001\n77906.03\nNorway\n134793.49749036002\n131258.77135926002 3534.726\nOthers\n735.13669899999991\n483.27048999999994 251.8662\nPakistan\n33528.010527489998\n15773.768527490001 17754.24\nPanama\n84.173000000000002\n0\n84.17300\nPoland\n1145.7751436999999\n996.36614370000007 149.4089\nPortugal\n11.348100000000001\n0\n11.34810\nQatar\n3225.5450000000001\n0\n3225.545\nRepublic of\nCongo\n4428.2190292055639\n0\n4428.219\nRomania\n406.44200000000001\n0\n406.4420\nRussia\n3363.7759999999998\n3353.7759999999998 10\nRwanda\n884.31299999999999\n884.31299999999999 0\nSaint Kitts and\nNevis\n253.71299999999999\n0\n253.7129\nSaudi Arabia\n12.289\n0\n12.289\nSenegal\n884.31299999999999\n884.31299999999999 0\nSeychelles\n3085.657381\n2784.6794709999999 300.9779\nSierra Leone\n418876.0679508085\n216305.47719080854 202570.5\nSingapore\n46.665849999999999\n0\n46.66584\nSlovakia\n600158.55370558205\n312952.785291582\n287205.7\nSouth Africa\n146566.3916337307\n43464.788428730695 103101.6\nSouth Korea\n96.26\n0\n96.26\nSpain\n843.28084999999999\n0\n843.2808\nSweden\n203465.23366736443\n151498.94584316044 51966.28\nSwitzerland\n-222.28122563650004\n-232.01822563650006 9.737000\nSyria\n13.603999999999999\n0\n13.60399\nTanzania\n2754.1470749999999\n2677.4420749999999 76.70499\nThailand\n273743.15220000001\n267269.66619999998 6473.485\nTogo\n0.47099999999999997\n0\n0.470999\nTunisia\n12.601000000000001\n0\n12.60100\nTurkey\n984.54300000000001\n963.8\n20.74299\nUganda\n108660.66208036602\n31402.951157365998 77257.71\nUnited Arab\nEmirates\n2446549.8671706151\n1766779.6850647388 679770.1\nUnited\nKingdom\n2286018.1398128555\n309063.76330722403 1976954\nUnited States\n18.545000000000002\n0\n18.54500\nVenezuela\n0\n0\n0\nZambia\n13.289\n0\n13.289\nTotal\n23966466.669726282\n15191552.467636274 8774914\nSource:\nCentral Bank\nof Nigeria\nNotes:\n1Provisional", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Annual_Reports/2018 Statistical Bulletin External Sector Statistics.pdf"}
{"doc_id": "1133d4c62c976375246989a156e3fa04", "text": "Table A.1.1:\nMonetary\nSurvey (N'\nMillion)\nMONETARY\nASSETS/\nLIABILITIES\n1981\n1982\n1983\n1981\n1982\n1983\nFOREIGN\nASSETS\n(NET)\n2585\n888.1\n501.4\nBy Central\nBank\n2403.8000000000002 777.6\n357.3\nBy\nCommercial\nBanks\n143.19999999999999 15.3\n81\nBy\nMerchant\nBanks2\n38\n95.2\n63.1\nDOMESTIC\nCREDIT\n(NET)\n16203.4\n22272\n28687.9\nClaims on\nFederal\nGovt (Net):\n6532.9\n10660.6\n16450.0999999\nBy Central\nBank\n4689.6000000000004 7667.3\n10924.2\nBy\nCommercial\nBanks\n1773.9\n2818.6\n5140.39999999\nBy\nMerchant\nBanks\n69.400000000000006 174.7\n385.5\nClaims on\nPrivate\nSector:\n9670.5\n11611.4\n12237.8\nBy Central\nBank\n265.5\n273.39999999999998 311.399999999\nBy\nCommercial\nBanks\n8818.5\n10459.4\n10849.1\nBy\nMerchant\nBanks\n586.5\n878.6\n1077.3\nClaims on\nState and\nLocal Govts:\n0\n0\n0\nBy Central\nBank\n0\n0\n0\nBy\nCommercial\nBanks\n0\n0\n0\nBy\nMerchant\nBanks\n0\n0\n0\nClaims on\nNon-\nFinancial\nPublic\nEnterprises:\n0\n0\n0\nBy Central\nBank\n0\n0\n0\nBy\nCommercial\nBanks\n0\n0\n0\nBy\nMerchant\nBanks\n0\n0\n0\nClaims on\nOther\nPrivate\nSector:\n9670.5\n11611.4\n12237.8\nBy Central\nBank\n265.5\n273.39999999999998 311.399999999\nBy\nCommercial\nBanks\n8818.5\n10459.4\n10849.1\nBy\nMerchant\nBanks\n586.5\n878.6\n1077.3\nOTHER\nASSETS\n(NET)\n-2626.7\n-5066.5\n-8310.20000000\nTOTAL\nMONETARY\nASSETS\n16161.7\n18093.599999999999 20879.0999999\nMONEY\nSUPPLY\n(M1)\n9915.2999999999993 10291.799999999999 11517.8\nCurrency\nOutside\nBanks:\n3861.9\n4222.5\n4842.8\nCurrency in\nCirculation\n4347.7\n4728.8999999999996 5299.3\nVault cash:\ncurrency\nheld by\ncommercial\nbanks\n-485.8\n-506.4\n-456.5\nVault cash:\ncurrency\nheld by\nmerchant\nbanks\n0\n0\n0\nDemand\nDeposits1\n6053.4\n6069.3\n6675\nPrivate\nSector\nDeposits at\nCBN\n1172.5\n888.6\n819.4\nPrivate\nSector\nDeposits at\nCommercial\nBanks\n4880.8999999999996 5180.7\n5855.6\nQUASI\nMONEY1\n6246.4\n7801.8\n9361.29999999\nTime,\nSavings &\nForeign\nCurrency\nDeposits of:\n6124\n7529.5\n8876.6\nCommercial\nBanks\n5796\n6838.2\n8082.9\nMerchant\nBanks\n328\n691.3\n793.7\nOther\nPrivate\nSector\nDeposits at\nMerchant\nBanks\n122.4\n272.3\n484.7\nTOTAL\nMONETARY\nLIABILITIES\n(M2)\n16161.7\n18093.599999999999 20879.0999999\nSource :\nCentral\nBank of\nNigeria\nNote:\n1excludes\ntakings\nfrom\ndiscount\nhouses\n2Merchant\nBank\nstarted in\n1972\n… means\nnot\napplicable\nUniversal\nBanking\nwas\nadopted in\n2001, hence\nCommercial\n& Merchant\nBanks\nbecame\nDeposit\nMoney\nBanks\n(DMBs)\nTable A.1.2:\nMonetary\nAuthorities'\nAnalytical\nAccounts -\nAssets (N'\nMillion)\nItem\n1981\n1982\n1983\nFOREIGN\nASSETS\n2440.8000000000002 1041.5\n796.999999\nGold\n428\n48.9\n96.4\nIMF Gold\nTranche\n0\n0\n0\nForeign\nCurrencies\n0\n0\n0\nDemand\nDeposits at\nForeign Banks\n0\n0\n0\nTreasury Bills of\nForeign\nGovernments\n1897\n977.5\n685.3\nSDR Holdings\n0\n0\n0\nAttached Assets 0\n0\n0\nRegional\nMonetary\nCooperation\nFunds\n0\n0\n0\nOther Foreign\nAssets\n115.8\n15.1\n15.3\nCLAIMS ON\nFEDERAL\nGOVERNMENT\n6131.9000000000005 8226.6\n12250\nTreasury Bills &\nTB Rediscounts\n3409.9\n5552.9\n6508.20000\nTreasury Bills\n3404.9\n5463.7\n6018.1\nTreasury Bills\nRediscounts\n5\n89.2\n490.1\nNigerian\nConverted\nBonds\n0\n0\n0\nTreasury Bond\nStock\n0\n0\n0\nTreasury Bonds\nSinking Funds\nOverdrawn\nAccount\n0\n0\n0\nTreasury Bonds\nInterest\n0\n0\n0\nOverdrafts to\nFederal\nGovernment\n0\n0\n0\nOverdraft on\nBudgetary\nAccounts\n0\n0\n0\nOther\nOverdrafts to\nFederal\nGovernment\n0\n0\n0\nDevelopment\nStocks\n0\n0\n0\nDevelopment\nStocks Account\n0\n0\n0\nDevelopment\nStocks Sinking\nFunds\nOverdrawn\nAccount\n0\n0\n0\nDevelopment\nStocks Interest\n0\n0\n0\nTreasury\nCertificates\n1113.7\n936\n3894\nOther Claims on\nFederal\nGovernment\n1608.3\n1737.7\n1847.8\nClaims on\nFederal\nGovernment\n(Branch\nPosition)\n0\n0\n0\nCLAIMS ON\nSTATE AND\nLOCAL\nGOVERNMENT\n0\n0\n0\nOverdrafts to\nStates & Local\nGovernments:\n0\n0\n0\nOverdrafts to\nState\nGovernments\n0\n0\n0\nOverdrafts to\nLocal\nGovernments\n0\n0\n0\nClaims on State\n& Local Govt.\n(Branch\nPosition)\n0\n0\n0\nCLAIMS ON\nNONFINANCIAL\nPUBLIC\nENTERPRISES\n0\n0\n0\nOverdrafts to\nNon-Financial\nPublic:\n0\n0\n0\nOverdrafts to\nFederal\nParastatals\n0\n0\n0\nOverdrafts to\nState Parastatals\n0\n0\n0\nClaims on Non-\nfin. Publ. Ent.\n(Branch\nPosition)\n0\n0\n0\nCLAIMS ON\n(NON-\nFINANCIAL)\nPRIVATE\nSECTOR\n0\n0\n0\nCLAIMS ON\nDEPOSIT\nMONEY BANKS\n565.70000000000005 565.4\n672.3\n(Overdrafts to)\nCommercial\nBanks\n0\n0\n0\n(Overdrafts to)\nMerchant\nBanks1\n0\n0\n0\nOther Claims on\nDMBs\n565.70000000000005 565.4\n672.3\nClaims on\nDeposit Money\nBanks (Branch\nPosition)\n0\n0\n0\nCLAIMS ON\nOTHER\nFINANCIAL\nINSTITUTIONS\n(OFI's)\n265.5\n273.39999999999998 311.399999\nDevelopment\nBanks\n0\n0\n0\nOther Claims on\nOFI's:\n265.5\n273.39999999999998 311.399999\nLoans to OFI's1\n0\n0\n0\nInvestment in\nOFI's\n265.5\n273.39999999999998 311.399999\nMiscellaneous\nClaims on OFIs\n0\n0\n0\nUNCLASSIFIED\nASSETS\n305.5\n551.20000000000005 592.1\nParticipation in\nInternational\nOrganisations\n0\n0\n0\nIMF Currency\nSubscriptions:\n0\n0\n0\nIMF Local\nCurrency\nSubscription\n(CBN\nAccounting\nRecords)1\n0\n0\n0\nIMF Non-\nNegotiable\nInterest Bearing\nA/C (CBN acc.\nrecords)\n0\n0\n0\nIMF Securities\nAccount (CBN\nacc. records)\n0\n0\n0\nIMF Accounts\nValuation\nAdjustments\n0\n0\n0\nSDR Allocation\n#1 (rev.\ndescrepancy)\n0\n0\n0\nIMF Gold\nTranche A/C\n(CBN\nAccounting\nRecords)\n0\n0\n0\nHoldings of\nSDRs (CBN\nAccounting\nRecords)\n0\n0\n0\nIBRD\nSubscriptions\n0\n0\n0\nTotal\nReceivables\n0\n0\n0\nReceivables\n0\n0\n0\nIncome\nReceivable:\n0\n0\n0\nAccrued\nEarnings\n0\n0\n0\nImpersonal\nAccounts\n0\n0\n0\nInterest\nReceivables1\n0\n0\n0\nOther Income\nReceivable\n0\n0\n0\nExchange\nDifference on\nPromisory Notes\n0\n0\n0\nSME\nRevaluation\nAccounts\n0\n0\n0\nClaims on\nBranches\n0\n0\n0\nNon-Monetary\nPrecious Metals\n0\n0\n0\nMiscellanoues\nunclassified\nAssets\n0\n0\n0\nOther\nMiscellaneous\nAssets\n0\n0\n0\nExpenses\n0\n0\n0\nHead Office\nExpenses\n0\n0\n0\nBranch\nExpenses1\n0\n0\n0\nZonal Office\nExpenses\n0\n0\n0\nUnclassified\nAssets (Branch\nPosition)\n0\n0\n0\nTOTAL ASSETS\n9709.4000000000015 10658.1\n14622.8\nSource : Central\nBank of Nigeria\nNotes: 1These\nitems were\nreclassified\nfrom the last\nquarter of 2006\n\"-\" indicates not\navailable\nTable A.1.3:\nMonetary\nAuthority's\nAnalytical\nAccounts -\nLiabilities (N'\nMillion)\nItem\n1981\n1982\n1983\nRESERVE\nMONEY\n5026.0999999999995 5784.5\n6109.5\nCurrency in\nCirculation\n4347.7\n4728.8999999999996 5299.3\nHead Office\n0\n0\n0\nBranches\n0\n0\n0\nDeposit Money\nBanks'\nDeposits:\n678.4\n1055.5999999999999 810.2\nCommercial\nBanks\n678.4\n1055.5999999999999 810.2\nCommercial\nBanks Demand\ndeposits\n0\n0\n0\nCommercial\nBanks Special\ndeposits\n0\n0\n0\nCommercial\nBanks\nRequired\nReserves\n0\n0\n0\nMerchant\nBanks\n0\n0\n0\nMerchant\nBanks Demand\ndeposits\n0\n0\n0\nMerchant\nBanks Special\ndeposits\n0\n0\n0\nMerchant\nBanks\nRequired\nReserves\n0\n0\n0\nOther Deposits\nOf DMBs\n0\n0\n0\nDMBs' deposits\n(branch\nposition)\n0\n0\n0\nPrivate Sector\nDeposits\n1172.5\n888.6\n819.4000000\nNon-Financial\nPublic\nEnterprises\n(Parastatals):\n1038.4000000000001 845.9\n743.7\nFederal\nGovernment\nParastatals\n0\n0\n0\nPrivate Sector\nCorporations\nDeposit\n0\n0\n0\nState and Local\nGovernment\nDeposits and\nParastatals\n134.1\n42.7\n75.7\nState\nGovernment\nParastatals\n0\n0\n0\nState\nGovernment\nDeposits\n0\n0\n0\nLocal\nGovernment\nDeposits\n0\n0\n0\nOther\nFinancial\nInstitutions\nDeposits\n0\n0\n0\nDevelopment\nBanks\n0\n0\n0\nOther\nFinancial\nInstitutions\n0\n0\n0\nPrivate Sector\ndeposits\n(branch\nposition)\n0\n0\n0\nFOREIGN\nLIABILITIES\n37\n263.89999999999998 439.7\nNon-Resident\nDeposits of:\n37\n263.89999999999998 439.7\nForeign DMBs\n(Current\nAccounts)\n0\n0\n0\nForeign\nCentral Banks\n0\n0\n0\nOther Foreign\nFinancial\nInstitutions\n0\n0\n0\nOther Foreign\nCustomers\n0\n0\n0\nLiabilities to\nForeign\nMonetary\nAuthorities:\n0\n0\n0\nTreasury Bills\nHeld by\nForeign\nMonetray\nAuthorities\n0\n0\n0\nOther Foreign\nLiabilities\n0\n0\n0\nLONG-TERM\nFOREIGN\nLIABILITIES\n0\n0\n0\nLong-Term\nLiabilities\n0\n0\n0\nTrade Debt\nPromissory\nNotes A/C\n0\n0\n0\nFEDERAL\nGOVERNMENT\nDEPOSITS\n1442.3\n559.29999999999995 1325.8\nBudgetary\nAccounts\n0\n0\n0\nDeposits on\nNigerian\nConverted\nBonds\n0\n0\n0\nDeposits on\nDevelopment\nStocks\n0\n0\n0\nDeposits on\nTreasury\nCertificates\n0\n0\n0\nOther Federal\nGovt Deposit\n0\n0\n0\nFederal Govt\nDeposit\n(Branch\nPosition)\n0\n0\n0\nCAPITAL\nACCOUNTS\n91\n109\n129\nCapital\n0\n0\n0\nReserves\n91\n109\n129\nProvisions\n0\n0\n0\nUndisbursed\nProfits\n0\n0\n0\nRevaluation\nAccounts\n0\n0\n0\nForeign Assets\nRevaluation A/\nC\n0\n0\n0\nFixed Assets\nRevaluation\nUNCLASSIFIED\nLIABILITIES\n1940.5\n3052.8\n5799.4\nIntra-Bank\nAccounts\n(Uncleared\nEffects)\n0\n0\n0\nGovt Lending\nFund\n0\n0\n0\nExpense/\nInterest\nAccount\n0\n0\n0\nLiabilities to\nIMF\n0\n0\n0\nIMF Account\nAdjustments\n0\n0\n0\nOther\nUnclassified\nLiabilities\n0\n0\n0\nOther\nMiscellanoues\nunclassified\nLiabilities\n0\n0\n0\nUnclassified\nLiabilties\n(Branch\nPosition)\n0\n0\n0\nMiscellaneous\nExcess Crude\n0\n0\n0\nFederal\nGovernment\n0\n0\n0\nSubnationals\nGovernment\n0\n0\n0\nTOTAL\nLIABILITIES\n9709.4\n10658.1\n14622.8\nSource :\nCentral Bank\nof Nigeria\nTable\nA.1.3.1:\nQuarterly\nMonetary\nAggregates\n(N' Million)\nNFA\nNCG\nPeriod\nCPS\n1981\nQ1\n5800.3\n1885.6\nQ2\n5770.4\n1836\nQ3\n4358.7\n3760.6\nQ4\n2585\n6532.9\n1982\nQ1\n1061.08\n6182.3\nQ2\n702.2\n6847.4\nQ3\n708.8\n6223.8\nQ4\n866.5\n10660.6\n1983\nQ1\n666.7\n8645\nQ2\n518.4\n11263.2\nQ3\n556.29999999999995 13584.4\nQ4\n501.4\n16450.099999999999\n1984\nQ1\n626.4\n15991.5\nQ2\n905.7\n16524\nQ3\n772.9\n16497.2\nQ4\n1110.7\n19125.3\n1985\nQ1\n1132.2\n16628.5\nQ2\n1043.0999999999999 17553.400000000001\nQ3\n573.20000000000005 20641.599999999999\nQ4\n1418.4\n20323.599999999999\n1986\nQ1\n1170.3\n16972.2\nQ2\n1132.4000000000001 17750\nQ3\n1960.1\n17516.599999999999\nQ4\n5367.8\n19550.599999999999\n1987\nQ1\n4699.1000000000004 20098.900000000001\nQ2\n1341.6\n19039.599999999999\nQ3\n3337.4\n18917\nQ4\n3700.5\n22247.5\n1988\nQ1\n2734.3\n22410.2\nQ2\n4558.3\n19832.599999999999\nQ3\n4549.5\n20114.099999999999\nQ4\n9492.4\n29340.6\n1989\nQ1\n15032.5\n28246.400000000001\nQ2\n15085.6\n20378.2\nQ3\n18900.7\n11422.2\nQ4\n22524.3\n7360.3\n1990\nQ1\n29412.5\n13204.1\nQ2\n32512.6\n2200.1999999999998\nQ3\n35389.4\n2962.8\nQ4\n43909.9\n22772.7\n1991\nQ1\n52512.7\n10501.3\nQ2\n53585.599999999999 20988.6\nQ3\n49911.5\n6318.6999999999935\nQ4\n56045.3\n39626\n1992\nQ1\n83970.5\n45412.4\nQ2\n85271.4\n22302.400000000001\nQ3\n81299\n31384.5\nQ4\n35778.254452560002 91112.177941029993 79958.92037\n1993\nQ1\n46418.27959749\n83980.267907850008 99456.85646\nQ2\n64137.994785390001 71209.247841670003 134264.9807\nQ3\n61685.122250779998 87338.196203759988 154994.4360\nQ4\n63559.128210689996 185167.90864615998 95489.66165\n1994\nQ1\n55002.138001419997 196487.72180619999 137480.3251\nQ2\n52324.039887070001 200380.57354292\n143840.2129\nQ3\n34978.211608490004 201975.97931853001 144977.2514\nQ4\n56220.278973220004 288113.53555272997 151000.2584\n1995\nQ1\n105297.76417024\n183781.43643315\n147074.4177\nQ2\n121273.40783373\n175104.62533886003 180255.1184\nQ3\n110984.23736495001 167317.32313931998 193476.6521\nQ4\n108663.01165378002 263002.77373526996 211358.5980\n1996\nQ1\n119129.05452384999 180252.06006774999 217960.3252\nQ2\n122222.28208609001 216415.04459630998 234837.6951\nQ3\n131925.54633712998 179417.37735082002 251980.4292\nQ4\n237978.47605804997 110465.55059363999 260613.5090\n1997\nQ1\n158240.5667585\n96627.252425689949 284904.6824\nQ2\n226031.53991070998 75624.955832560125 321378.9223\nQ3\n237368.72585434999 38823.871590509982 339468.8390\nQ4\n234015.68380143002 46358.40601206998\n319512.2076\n1998\nQ1\n254473.37588214997 34801.010737800003 327923.9364\nQ2\n275325.78724879003 47150.208454530017 353857.9367\nQ3\n285075.35103017004 34228.128846320047 357824.2650\nQ4\n247041.61239663002 139916.24237582998 372574.1713\n1999\nQ1\n634905.32368301996 -33229.391522390026 401352.2934\nQ2\n608426.92078908009 142759.77518876013 427408.3165\nQ3\n623997.04554158985 91308.820947089916 440983.2520\nQ4\n666271.15772920009 176804.87366981001 455205.2168\n2000\nQ1\n774824.28541749006 20342.750744140078 478189.6373\nQ2\n888657.30402372999 -26413.87530147018\n522327.8034\nQ3\n920402.61677158996 48184.37421485997\n564206.1921\nQ4\n1275016.9141366801 -123989.79177483983 596001.5387\n2001\nQ1\n1263237.9947249598 25849.176732580137 713552.0566\nQ2\n1398377.66601872\n-69914.345498410024 758574.5579\nQ3\n1440539.7\n-27426.20000000007\n832559.7000\nQ4\n1347554.7782653999 -6006.5267363200837 854999.3250\n2002\nQ1\n1326157.2000000002 111973.20000000024 892872.3999\nQ2\n1248916.8999999999 126572.8\n939384.2\nQ3\n1191616.2999999998 211558.10000000009 968625.5000\nQ4\n1282215.5\n373639.19999999995 955762.0999\n2003\nQ1\n1346526.9000000001 430656.4\n1024325.700\nQ2\n1325852.2000000002 605045.69999999995 1066036.8\nQ3\n1173900.5\n625658.70000000007 1065107.100\nQ4\n1388233.8\n591944.69999999995 1211993.379\n2004\nQ1\n1570567.5999999999 499985.60000000003 1321106.400\nQ2\n1829689.9999999998 453804.35583333328 1393780.9\nQ3\n2010641.7999999998 453025.10000000009 1489346.499\nQ4\n2644672.6970083104 485725.53136266989 1534447.778\n2005\nQ1\n3140484.4750000006 593222.99\n1666760.100\nQ2\n3397866.6340000001 341727.82499999984 1840766.4\nQ3\n4003941.5999999996 603058\n1986211.203\nQ4\n4098471.8500000006 306031.89999999991 2007355.82\n2006\nQ1\n5108959.9400000004 471892.32264000003 2126956.628\nQ2\n5568809.9989999998 360789.37300000002 2303700.519\nQ3\n5718702.2857403699 -235144.67443473986 2571678.048\nQ4\n6307859.2621254111 -1936615.7398334397 2650821.454\n2007\nQ1\n6997940.7801675685 -2508626.5831918996 3048942.347\nQ2\n7633412.6287206691 -2615012.0202473397 3503722.968\nQ3\n6977270.8816119991 -2462860.9903952605 4203169.479\nQ4\n7266512.0892413696 -2368484.3898503501 5056720.898\n2008\nQ1\n7991622.795226261\n-2501996.3264524098 5964326.801\nQ2\n8316237.2229435993 -2716445.3121344191 6754681.588\nQ3\n8523480.9670053404 -3230039.2832730096 7474666.378\nQ4\n8550430.3120210711 -3107688.5878986004 8059548.917\n2009\nQ1\n8105332.2178045306 -3405605.1033774791 8226442.555\nQ2\n7643607.1311438996 -2879781.4153399598 8556944.652\nQ3\n6886864.5521917501 -2820157.6907005096 9811363.265\nQ4\n7593321.8175431397 -2302294.6829203302 10219336.11\n2010\nQ1\n7249631.8516228097 -1649471.8410700993 10050671.90\nQ2\n6484759.0065151807 -1489877.5147097702 10102817.50\nQ3\n6453963.9705059491 -1026277.2824700093 10336114.78\nQ4\n6506618.5896335989 -1121798.6274487204 9830344.079\n2011\nQ1\n6988078.1024739295 -1240157.98395412\n9446946.316\nQ2\n6453690.2622074606 -1068311.3299590996 9957949.884\nQ3\n6669766.0504796105 -1148207.624127429\n11110737.01\nQ4\n7138672.7772038607 -496861.61620338075 14183591.81\n2012\nQ1\n7306723.1029554289 -440807.59916966991 14119886.07\nQ2\n7522255.0360213192 -1133629.2849571791 14701058.39\nQ3\n8301526.9739228208 -1377602.6316287601 14753999.50\nQ4\n9043678.6840773299 -2453557.0913491198 15151762.14\nSource :\nCentral Bank\nof Nigeria\nNFA = Net\nForeign\nAssets, NCG\n= Net Credit\nto\nGovernment,\nCPS = Credit\nto Private\nSector, CCP\n= Credit to\nCore Private\nSector, CSLG\n= Credit to\nStates &\nLocal\nGovernments,\nRM =\nReserve\nMoney, M1\n= Narrow\nMoney, M2\n= Broad\nMoney\nSupply, PSDD\n= Private\nSector\nDemand\nDeposits,\nReserves =\nDMBs'\nDeposits with\nCBN, CIC =\nCurrency in\nCirculation\nTable\nA.1.3.2:\nMonetary\nPolicy\nTargets and\nOutcomes\n(Growth\nRates)\nVariables\n1985\n1986\n1987\nM2\nActual\n12.44159178433889\n4.2325022072030958 22.91948097\nTarget\n*\n*\n*\nM1\nActual\n11.04976354514247\n-2.2885141951289838 12.05937877\nTarget\n6.5\n7.8\n11.8\nNDC\nActual\n7.6263405432752673 9.8306570020834219 16.61668934\nTarget\n7.2\n8.6999999999999993 4.400000000\nNCG\nActual\n6.2655226323247186 -3.8034600169261354 13.79446155\nTarget\n7.1\n5.9\n1.5\nCPS\nActual\n9.6445991950555676 29.428531013508746 19.63180126\nTarget\n7.4\n12.8\n8.4\nReal GDP1\nActual\n11.33\n1.89\n-0.69\nTarget\n1\n**\n**\nInflation\nActual\n1.0309278350515483 13.673469387755077 9.694793536\nTarget\n30\n***\n***\nSource:\nCentral Bank\nof Nigeria &\nNational\nBureau of\nStatistics\nNotes: 1Real\nGDP growth\nrates\nbetween\n1985 - 1999\nare from the\nharmonized\nseries on\nGDP\nproduced by\nthe NBS.\n*Quantitative\ntarget for M2\nis not\nspecified.\n**Policy\nstatement is\nspecified as\nstimulate\ngrowth in the\nproductive\nsectors\n***Policy\nstatement is\nspecified as\nsignificantly\nreduce/\nmoderate the\nrate of\ninflation\nTable A.1.4:\nConsolidated\nBankers'\nClearing\nHouse\nStatistics\nNumber of\nNumber\nof\nAmount\nDail\nWorking\nCheques\n(N' Million)\nPeriod\nDays\nCleared\nNo. \nChe\n1981\n243.5\n2561607\n19407.099999999999 105\n1982\n244.79166666666666 2403235\n20345.099999999999 981\n1983\n247.16666666666666 2164534\n18667.3\n875\n1984\n247.75\n2614286\n16281.5\n105\n1985\n247.2833333333333\n2803920\n13778.6\n113\n1986\n248.0333333333333\n3535360\n24958.5\n142\n1987\n246.2\n4951035\n26699.7\n201\n1988\n243.5\n4900697\n56181.4\n201\n1989\n246.91\n4682186\n54832.5\n189\n1990\n244.87\n5066202\n57839.199999999997 206\n1991\n244.72\n5652178\n124891\n230\n1992\n247.41\n7358580\n170235.3\n297\n1993\n225.14\n5151561\n205420.3\n228\n1994\n247.51\n4910565\n310176.59999999998 198\n1995\n247.24\n4826155\n466598.7\n195\n1996\n249.63\n4050401\n406318.2\n162\n1997\n250\n3665107\n391924.1\n146\n1998\n249.25\n7754672\n1198647.8\n311\n1999\n249.76\n8620745\n1413125.5\n345\n2000\n248.88\n10297889 2095478.1\n413\n2001\n250.88\n10193442 2256381.7000000002 406\n2002\n252\n5339419\n2325719.1\n211\n2003\n248\n12526643 8928400\n505\n2004\n256\n13997898 10996044.699999999 546\n2005 1\n248\n14638511 13915416\n590\n2006 1\n247\n14927414 16492064.02\n604\n2007\n246\n19895613 28111190.41\n808\n2008\n251\n30172925 43357416.039999999 120\n2009\n251\n29159780 29390953.149999999 116\n2010\n251\n33973919 19675506.369999997 135\n2011\n249\n37718585 22302646.039999999 151\nQ1\n64\n8111122\n5417761.29\n126\nQ2\n60\n8944203\n5226954.8900000006 149\nQ3\n64\n9732357\n5548609.75\n152\nQ4\n61\n10930903 6109320.1100000003 179\n2012\n248\n12045833 7461634.4921066007 485\nQ1\n63\n2830591\n1995209.7968421299 449\nQ2\n61\n2941867\n1903055.7330567499 482\nQ3\n63\n3268251\n1832847.6596817202 518\nQ4\n61\n3005124\n1730521.302526\n492\nSource:\nCentral Bank\nof Nigeria\nNotes:\n1Revised\nClearing\nHouse\nactivities\ncommenced\nin 1965\nTable A.2.1:\nCommercial\nBanks'\nStatement of\nAssets/\nLiabilities -\nAssets (N'\nMillion)\nASSETS\n1981\n1982\n1983\nRESERVES\n1376.1\n2002\n1266.7\nCurrency\n485.8\n506.4\n456.5\nDeposits with\nCBN:\n890.3\n1495.6\n810.2\nReserve\nRequirements\nCurrent\nAccounts\n890.3\n1495.6\n810.2\nStabilization\nSecurities\n0\n0\n0\nCBN Bills\nShortfall/\nexcess credit/\nothers\nFOREIGN\nASSETS\n259.2\n246.4\n343.5\nClaims on\nNon-resident\nBanks:\n255.7\n242.5\n339.7\nBalances held\nwith banks\noutside Nigeria\n245.5\n238.8\n333.7\nBalances held\nwith offices\nand branches\noutside Nigeria\n9.1999999999999993 3.7\n6\nLoans &\nAdvances to\nBanks outside\nNigeria\n1\n0\n0\nBills\nDiscounted\nPayable\noutside Nigeria\n3.5\n3.9\n3.8\nCLAIMS ON\nCENTRAL\nGOVERNMENT\n1773.9\n2818.6000000000004 5140.399999\nTreasury Bills\n917.5\n2189.8000000000002 4361.7\nTreasury\nCertificates\n856.4\n628.79999999999995 778.7\nDevelopment\nStocks\nLoans &\nAdvances to\nCentral\nGovernment\nBankers Unit\nFund\nCLAIMS ON\nSTATE &\nLOCAL\nGOVERNMENT\n0\n0\n0\nLoans &\nAdvances to\nState\nGovernment\nLoans &\nAdvances to\nLocal\nGovernment\nCLAIMS ON\nOTHER\nPRIVATE\nSECTOR\n8818.5\n10459.4\n10849.1\nLoans &\nAdvances to\nOther\nCustomers\n8242.2000000000007 9869.5\n10259.1\nLoans &\nAdvances to\nNigeria Banks\nSubsidiaries\n0\n1.6\n0\nBills\nDiscounted\nfrom non-bank\nsources\nInvestments:\n576.29999999999995 588.29999999999995 590\nOrdinary\nShares\nPreference\nShares\nDebentures\nSubsidiaries\nOther\ninvestments\n576.29999999999995 588.29999999999995 590\nCommercial\npapers\nBankers\nAcceptances\nFactored Debt\nAdvances\nunder Lease\nCLAIMS ON\nOTHER\nFINANCIAL\nINSTITUTIONS\nUNCLASSIFIED\nASSETS\n7249.8\n7135.5\n9101.799999\nFixed Assets\nDomestic Inter-\nBank Claims:\n972.5\n782.3\n1494.300000\nBills\nDiscounted\nfrom Banks in\nNigeria\n59.3\n69.5\n114.7\nMoney at call\nwith Banks\n297.8\n320.5\n718.4\nInter-bank\nPlacements\nBalances held\nwith banks in\nNigeria\n614.4\n380.3\n657.2\nLoans &\nAdvances to\nother Banks in\nNigeria\n1\n12\n4\nChecks for\nCollection\nMoney at call\noutside banks\nCertificates of\nDeposit\nPlacement\nwith Discount\nHouses\nOther Assets:\n6277.3\n6353.2\n7607.5\nReceivables\nPre-payments\nBills Payable\nSuspense\nSundry\nDebtors\nFEM\nCBN naira\nDepreciation\nNDIC\nMiscellaneous\n6277.3\n6353.2\n7607.5\nTOTAL\nASSETS\n19477.5\n22661.9\n26701.5\nNote:\nFollowing the\nadoption of\nUniversal\nBanking in\nNigeria,\ncommercial\nand merchant\nbanks figures\nwere merged\nfrom 2001\nTables A.2.2:\nCommercial\nBanks'\nStatement of\nAssets/\nLiabilities -\nLiabilities (N'\nMillion)\nLIABILITIES\n1981\n1982\n1983\nDEMAND\nDEPOSITS\n4880.8999999999996 5180.7\n5855.6\nPrivate Sector\nDeposits\n4880.8999999999996 5180.7\n5855.6\nState\nGovernment\nDeposits\n0\n0\n0\nLocal\nGovernment\nDeposits\n0\n0\n0\nTIME, SAVINGS\n& FOREIGN\nCURRENCY\nDEPOSITS\n5796\n6838.2\n8082.90000\nTime Deposits:\n3816.8\n4517\n5203.60000\nPrivate Sector\nDeposits\n3816.8\n4517\n5203.60000\nState\nGovernment\nDeposits\n0\n0\n0\nLocal\nGovernment\nDeposits\n0\n0\n0\nSavings\nDeposits:\n1979.2\n2321.1999999999998 2879.3\nPrivate Sector\nDeposits\n1979.2\n2321.1999999999998 2879.3\nState\nGovernment\nDeposits\n0\n0\n0\nLocal\nGovernment\nDeposits\n0\n0\n0\nForeign\nCurrency\nDeposits:\n0\n0\n0\nDomiciliary\nAccounts\n0\n0\n0\nOther Deposits: 0\n0\n0\nMONEY\nMARKET\nINSTRUMENTS:\n34.4\n116.3\n107.6\nCertificate of\nDeposit Issued\n34.4\n116.3\n107.6\nNotes & Deposit\n(Cash)\ncertificates\n0\n0\n0\nBONDS\n0\n0\n0\nDebentures\n0\n0\n0\nNotes & Deposit\n(Cash)\ncertificates\n0\n0\n0\nFOREIGN\nLIABILITIES:\n116\n231.10000000000002 262.5\nBalance Held\nfor offices and\nbranches\nAbroad\n6.6\n2.8\n0.4\nBalance held\nfor banks\noutside Nigeria\n109.4\n228.3\n262.100000\nMoney at call\nwith foreign\nbanks\n0\n0\n0\nLoans &\nAdvances from\nother banks\noutside Nigeria\n0\n0\n0\nCENTRAL\nGOVERNMENT\nDEPOSITS\n0\n0\n0\nFederal\nGovernment\nTime Deposits\n0\n0\n0\nFederal\nGovernment\nDemand\nDeposits\n0\n0\n0\nFederal\nGovernment\nSavings\nDeposits\n0\n0\n0\nCREDIT FROM\nCENTRAL\nBANK\n0\n0\n0\nLoans &\nAdvances from\nCBN\n0\n0\n0\nCBN Overdrafts\nto banks\n0\n0\n0\nCAPITAL\nACCOUNTS:\n497.4\n667.7\n845.1\nCapital\n497.4\n667.7\n845.1\nReserve Fund\n0\n0\n0\nReserves for\nDepreciation &\nnon-performing\nassets\n0\n0\n0\nLoans &\nAdvances from\nFederal and\nState Govt\n0\n0\n0\nTotal loans /\nlease loss\nprovision\n0\n0\n0\nUNCLASSIFIED\nLIABILITIES:\n8152.8\n9627.9\n11547.8\nInter-bank\nliabilities\n329.1\n349.5\n290.8\nBalances held\nfor banks in\nNigeria\n104.3\n102.1\n148.800000\nMoney at call\nfrom banks in\nNigeria\n135\n132\n66\nInter-bank\ntakings\n0\n0\n0\nUncleared\neffects\n0\n0\n0\nLoans &\nAdvances from\nother banks in\nNigeria\n0\n0\n0\nBankers\npayments\n0\n0\n0\nLoans &\nAdvances from\nOther creditors\n89.8\n115.4\n76\nLetters of\nCredit\n0\n0\n0\nTakings from\nDiscount\nHouses\n0\n0\n0\nOther\nLiabilities:\n7823.7\n9278.4\n11257\nAccounts\nPayables\n0\n0\n0\nSuspense\nAccount\n0\n0\n0\nProvision for\nTax Payments\n0\n0\n0\nSundry\nCreditors\n0\n0\n0\nForex Awaiting\nCover\n0\n0\n0\nExchange\nDifferential\n0\n0\n0\nProvision for\nBad Debt\n0\n0\n0\nFEM\n0\n0\n0\nMiscellaneous\n7823.7\n9278.4\n11257\nTOTAL\nLIABILITIES:\n19477.5\n22661.9\n26701.5\nSource:\nComputed from\nDeposit Money\nBanks' Returns\nNote: Following\nthe adoption of\nUniversal\nBanking in\nNigeria,\ncommercial and\nmerchant banks\nfigures were\nmerged from\n2001\nTable\nA.2.3:\nSectoral\nDistribution\nof\nCommercial\nBanks'\nLoans and\nAdvances1\n(N' Million)\nP r o d u c t i o n\nAgriculture,\nManufac-\nMining\nPeriod\nForestry\nturing\nand Quarying\nand Fishery\n1981\n590.6\n2659.8\n88\n1982\n786.6\n3037.6\n94.3\n1983\n940.4\n3053.1\n118.7\n1984\n1052.0999999999999 3083.5\n165.5\n1985\n1310.2\n3232.2\n236.1\n1986\n1830.3\n4475.2\n208\n1987\n2427.1\n4961.2\n246.3\n1988\n3066.7\n6078\n227.3\n1989\n3470.5\n6671.7\n271.600000000\n1990\n4221.3999999999996 7883.7\n362.4\n1991\n5012.7\n10911.3\n541.799999999\n1992\n6978.9\n15403.9\n759.7\n1993\n10753\n23110.6\n1424.1\n1994\n17757.7\n34823.199999999997 -\n1995\n25278.7\n58090.7\n12071.6\n1996\n33264.1\n72238.100000000006 15049.5\n1997\n27939.3\n82823.100000000006 20611\n1998\n27180.7\n96732.7\n22848.2\n1999\n31045.7\n115759.9\n24683.5999999\n2000\n41028.9\n141294.79999999999 32288.6\n2001\n55846.1\n206889\n70477.1000000\n2002\n59849.7\n233474.7\n70170\n2003\n62102.8\n294309.59999999998 95976.4\n2004\n67738.600000000006 332113.7\n131055.6\n2005\n48561.5\n352038.3\n172532.1\n2006\n49393.4\n445792.6\n251477.1\n2007\n149578.9\n487576\n490712.9\n2008\n106353.84736185\n932799.45334747992 846942.843756\n2009\n135701.30451533\n993456.99962274998 1190731.58303\n2010\n128405.95164552999 987640.99102281989 1178098.63832\n2011\nQ1\n146862.91941388001 1007399.0480592401 1348260.61011\nQ2\n155101.81287011001 910000.42233527009 1308677.95287\nQ3\n234121.71419351999 1087403.3372241298 1361666.35248\nQ4\n255205.29476771\n1053213.32807472\n1295298.86162\n2012\nQ1\n264651.34930798004 1082856.4043797001 1268115.98374\nQ2\n291204.67455460998 1088447.4535449399 1485939.85636\nQ3\n293001.63217933004 1109775.12869103\n1625724.85275\nQ4\n316363.95819060999 1068341.7272808601 1771496.31295\nSource :\nComputed\nfrom\nDeposit\nMoney\nBanks'\nReturns\nNotes:\n1New\nreporting\nformat\ncame into\neffect as\nfrom 1994\n2Revised\nTable\nA.2.4.1:\nMoney\nMarket\nInterest\nRates (Per\ncent)\nCentral Bank\nMinimum\nTreasury\nCertificates1\nRediscount\nTreasury\nOne Year\nTw\nYea\nPeriod\nRates\nBill Rate\nMaturity\nMa\n1981\n6\n5\n5.5\n6\n1982\n8\n7\n7.5\n8\n1983\n8\n7\n7.5\n8\n1984\n10\n8.5\n9\n9.5\n1985\n10\n8.5\n9\n9.5\n1986\n10\n8.5\n9\n9.5\n1987\n12.75\n11.75\n12.25\n12.\n1988\n12.75\n11.75\n12.25\n12.\n1989\n18.5\n17.5\n16.38\n17.\n1990\n18.5\n17.5\n18.2\n18.\n1991\n14.5\n15\n15\n15.\n1992\n17.5\n21\n22\n23\n1993\n26\n26.9\n27.4\n27.\n1994\n13.5\n12.5\n13\n13\n1995\n13.5\n12.5\n13\n13.\n1996\n13.5\n12.25\n…\n…\n1997\n13.5\n12\n…\n…\n1998\n14.308066759388039 12.950834492350486 …\n…\n1999\n18\n17\n…\n…\n2000\n13.5\n12\n…\n…\n2001\n14.308066759388039 12.950834492350486 …\n…\n2002\n19\n18.88\n…\n…\n2003\n15.75\n15.02\n…\n…\n2004\n15\n14.21\n…\n…\n2005\n13\n6.9950000000000001 …\n…\n2006\n12.25\n8.7999999999999989 …\n…\n2007\n8.75\n6.91\n…\n…\n2008\n9.8125\n9.55 - 4.50\n…\n…\n2009\n7.4375\n1.30 - 6.13\n…\n…\n2010\n6.125\n0.95 - 10.25\n…\n…\n2011\n9.1875\n5.56 - 16.75\n…\n…\nQ1\n7.5\n5.56 - 10.23\n…\n…\nQ2\n8\n6.80 - 10.99\n…\n…\nQ3\n9.25\n6.30 - 11.25\n…\n…\nQ4\n12\n10.10 - 16.75\n…\n…\n2012\n12\n10.00 - 17.20\n…\n…\nQ1\n12\n12.00 - 17.20\n…\n…\nQ2\n12\n11.00 - 15.70\n…\n…\nQ3\n12\n10.50 - 15.38\n…\n…\nQ4\n12\n10.00 - 13.39\n…\n…\nSource :\nCentral\nBank of\nNigeria\nNotes:\n1Treasury\nCertificates\nstarted in\n1968 and\nterminated\nin 1995\n… means\nnot\napplicable\nTable\nA.2.4.2:\nWeighted\nAverage\nDeposit and\nLending\nRates of\nCommercial\nBanks\nPeriod\nSavings\nPrime1\nMaximum\n1981\n6\n7.75\n10\n1982\n7.5\n10.25\n11.75\n1983\n7.5\n10\n11.5\n1984\n9.5\n12.5\n13\n1985\n9.5\n9.25\n11.75\n1986\n9.5\n10.5\n12\n1987\n14\n17.5\n19.2\n1988\n14.5\n16.5\n17.6000000000\n1989\n16.399999999999999 26.8\n24.6\n1990\n18.8\n25.5\n27.7\n1991\n14.29\n20.010000000000002 20.8\n1992\n16.100000000000001 29.8\n31.2\n1993\n16.66\n18.32\n36.0900000000\n1994\n13.5\n21\n21\n1995\n12.61\n20.18\n20.79\n1996\n11.69\n19.734999999999999 20.8575000000\n1997\n4.7949999999999999 13.5425\n23.3150000000\n1998\n5.49\n18.2925\n21.3374999999\n1999\n5.33\n21.32\n27.19\n2000\n5.29\n17.98\n21.55\n2001\n5.49\n18.2925\n21.3374999999\n2002\n4.1500000000000004 24.85\n30.19\n2003\n4.1100000000000003 20.71\n22.88\n2004\n4.1900000000000004 19.18\n20.82\n2005\n3.83\n17.95\n19.4899999999\n2006\n3.14\n17.260000000000002 18.7\n2007\n3.5449999999999999 16.9375\n18.3624999999\n2008\n2.8351051735668453 15.135431097964885 18.6974283067\n2009\n2.6758333333333333 18.990833333333335 22.6225000000\n2010\n2.2054760160644169 17.585619776284673 22.5088589011\n2011\n1.410540889601277\n16.021312678181349 22.4159819273\nQ1\n1.4406701674354434 15.778074985108544 21.9986980271\nQ2\n1.3784253451898565 15.776574228119017 22.1093746244\nQ3\n1.4221527735511146 15.841984232431306 22.2611864283\nQ4\n1.4009152722286931 16.68861726706653\n23.2946686295\n2012\n1.6986497418592916 16.790310674021502 23.7875001961\nQ1\n1.5303662999550116 17.100166493473218 23.1436962141\nQ2\n1.7850197380544932 16.935905967416719 23.3961172346\nQ3\n1.7882468509059493 16.617919231364066 23.9582972996\nQ4\n1.6909660785217122 16.507251003831996 24.6518900359\nSource:\nCentral\nBank of\nNigeria\nNotes:\n1Formerly\nreferred to\nas First\nClass\nAdvances\nUniversal\nBanking\nwas\nadopted in\n2001,\nhence\nCommercial\n& Merchant\nBanks\nbecame\nDeposit\nMoney\nBanks\n(DMBs)\nTable A.2.5:\nSelected\nFinancial\nRatios of\nCommercial\nBanks\n(Percentage)\nPeriod\nLiquidity Ratio1\nCash Reserve Ratio2\nLoan\nRati\nActual\nPrescribed\nMinimum\nPrescribed\nActu\n1981\n38.5\n74.5\n1982\n40.5\n84.6\n1983\n54.7\n83.8\n1984\n65.099999999999994\n81.9\n1985\n65\n66.9\n1986\n36.4\n83.2\n1987\n46.5\n72.9\n1988\n45\n66.9\n1989\n40.299999999999997\n80.4\n1990\n44.3\n66.5\n1991\n38.6\n59.8\n1992\n29.1\n55.2\n1993\n42.2\n42.9\n1994\n48.5\n60.9\n1995\n33.1\n73.3\n1996\n43.1\n72.9\n1997\n40.200000000000003\n76.5\n1998\n46.8\n74.4\n1999\n61\n54.6\n2000\n64.099999999999994\n51\n2001\n52.9\n65.6\n2002\n52.45\n62.7\n2003\n50.9\n61.8\n2004\n50.475000000000001\n68.6\n2005\n50.174999999999997\n70.8\n2006\n55.7\n63.6\n2007\n48.75\n40\n70.7\n2008\n44.253875688862223 35\n3\n80.9\n2009\n30.7\n25\n1.25\n85.6\n2010\n30.425000000000001 25\n1\n74.2\n2011\nQ1\n23.307957921142169 30\n1.4930846027446847 48.3\nQ2\n17.899999999999999 30\n3.7514744990374451 44.8\nQ3\n19.957375282733157 30\n4.0033105247290299 43.4\nQ4\n42\n30\n8\n44.7\n2012\nQ1\n46.5\n30\n8\n48\nQ2\n49.232036383828714 30\n8\n46.8\nQ3\n47.586861464329132 30\n12\n44.5\nQ4\n49.718722095003507 30\n12\n42.3\nSource:\nCentral\nBank of\nNigeria\nNotes:\n1Liquidity\nratio is the\nratio of total\nspecified\nliquid assets\nto total\ncurrent\nliabilities\n2Cash\nreserve ratio\nis the ratio\nof cash\nreserve\nrequirement\nto total\ndeposit\nliabilities\n3Loan-to-\nDeposit\nratio is the\nratio of total\nloans and\nadvances to\ntotal deposit\nliabilities\nTable A.2.6:\nDeposits and Loans\nof Rural Branches of\nCommercial Banks\n(N' Million)\nYear/Quarter\nDeposits\nLoans\n1982\n111.7\n35.9\n1983\n131.19999999999999 44.2\n1984\n276.60000000000002 58.2\n1985\n311.39999999999998 114.9\n1986\n873.5\n373.6\n1987\n1229.2\n492.8\n1988\n1378.4\n659.9\n1989\n5722\n3721.1\n1990\n8360.1\n4730.8\n1991\n10580.7\n5962.1\n1992\n4612.2\n1895.3\n1993\n19542.3\n10910.4\n1994\n4855.2\n1602.2\n1995\n8807.1\n8659.2999999999993\n1996\n12442\n4411.2\n1997\n19047.599999999999 11158.6\n1998\n18513.8\n11852.7\n1999\n15860.5\n7498.1\n2000\n20640.900000000001 11150.3\n2001\n16875.900000000001 12341\n2002\n14861.6\n8942.2000000000007\n2003\n20551.8\n11251.9\n2004\n64490\n34118.5\n2005\n18461.900000000001 16105.5\n2006\n3118.6\n24274.6\n2007\n3082.3\n27263.5\n2008\n13411.807559209999 46521.477695000001\n2009\n3296.2273579400003 15590.500285\n2010\n20.79\n16555.98\n2011\nQ1\n24.86\n16919.59\nQ2\n27.36\n16261.67\nQ3\n22.23\n18132.64\nQ4\n20.184072910000001 19980.30255\n2012\nQ1\n19.967823920000001 20257.625102999998\nQ2\n20.645741309999998 23263.324443000001\nQ3\n20.772686030000003 24681.143673999999\nQ4\n19.723217039999998 22579.970439000001\nSource : Central\nBank of Nigeria\nNote: Rural banking\nstarted in 1977\nTable A.2.7.1: Number of\nCommercial Banks\nBranches in Nigeria and\nAbroad\nBranches\nPeriod\nNumber Urban\nRural Abroad1 Total\nof\nBanks\n1981\n20\n622\n240\n7\n869\n1982\n22\n676\n308\n7\n991\n1983\n25\n694\n407\n7\n1108\n1984\n27\n810\n432\n7\n1249\n1985\n28\n839\n451\n7\n1297\n1986\n29\n879\n481\n7\n1367\n1987\n34\n947\n529\n7\n1483\n1988\n42\n1057\n602\n6\n1665\n1989\n47\n1093\n756\n6\n1855\n1990\n58\n1169\n765\n5\n1939\n1991\n65\n1253\n765\n5\n2023\n1992\n65\n1495\n774\n6\n2275\n1993\n66\n1577\n775\n6\n2358\n1994\n65\n1634\n763\n6\n2403\n1995\n64\n1661\n701\n6\n2368\n1996\n64\n1727\n675\n5\n2407\n1997\n64\n1727\n675\n5\n2407\n1998\n54\n1466\n714\n5\n2185\n1999\n54\n1466\n714\n5\n2185\n2000\n54\n1466\n722\n5\n2193\n2001\n90\n1466\n722\n5\n2193\n2002\n90\n2283\n722\n5\n3010\n2003\n90\n2520\n722\n5\n3247\n2004\n89\n2765\n722\n5\n3492\n2005 2\n25\nSource : Central Bank of\nNigeria\nNote: Classification of\nBranches into Urban and\nRural stopped in 2005 due\nto consolidation of banks\n1Abroad comprises\nbranches and subsidiaries\n2The number of banks\nreduced to 25 following\nconsolidation of banks\nTable\nA.2.7.2:\nNumber of\nCommercial\nBanks\nBranches in\nNigeria (by\nStates) and\nAbroad\n2006 2007 2008 2009 2010 2011\nQ4\nQ4\nQ1\nQ2\nQ3\nQ4\nNumber of\nBanks\n25\n24\n24\n24\n24\n16\n21\n24\n24\nBranches\nAbroad2\n2\n7\n8\n2\n2\n2\n2\n2\n2\nNumber of\nDeposit\nMoney\nBanks\nBranches in\nNigeria by\nState1\nAbia\n104\n111\n138\n141\n146\n83\n114\n129\n12\nAbuja(FCT) 163\n219\n283\n361\n398\n232\n323\n372\n35\nAdamawa\n39\n52\n58\n63\n67\n38\n57\n63\n79\nAkwa-Ibom 60\n78\n85\n99\n99\n47\n74\n88\n92\nAnambra\n121\n174\n212\n217\n237\n136\n200\n224\n22\nBauchi\n35\n45\n50\n51\n53\n33\n44\n51\n50\nBayelsa\n28\n31\n37\n38\n37\n26\n32\n38\n37\nBenue\n39\n53\n61\n71\n75\n44\n59\n65\n57\nBorno\n61\n57\n68\n71\n79\n50\n63\n71\n68\nCross-River 36\n52\n63\n71\n79\n39\n61\n70\n76\nDelta\n98\n129\n174\n193\n198\n123\n156\n184\n17\nEbonyi\n15\n22\n28\n32\n35\n19\n30\n32\n45\nEdo\n109\n118\n163\n175\n183\n105\n146\n158\n16\nEkiti\n31\n54\n67\n58\n80\n32\n57\n61\n60\nEnugu\n90\n93\n120\n130\n141\n67\n107\n118\n11\nGombe\n25\n29\n33\n40\n40\n24\n32\n36\n36\nImo\n37\n57\n84\n104\n104\n57\n86\n99\n97\nJigawa\n19\n29\n34\n35\n39\n28\n32\n38\n37\nKaduna\n126\n133\n157\n164\n183\n114\n147\n169\n17\nKano\n130\n130\n160\n183\n193\n133\n164\n184\n18\nKatsina\n33\n41\n50\n57\n62\n31\n46\n56\n55\nKebbi\n21\n31\n35\n36\n40\n30\n36\n40\n40\nKogi\n27\n64\n68\n81\n80\n48\n75\n78\n77\nKwara\n39\n70\n67\n72\n79\n53\n67\n68\n13\nLagos\n1038 1407 1551 1690 1766 981\n1284 1509 14\nNasarawa\n19\n27\n40\n48\n58\n33\n45\n49\n51\nNiger\n46\n51\n69\n75\n80\n49\n69\n76\n76\nOgun\n52\n122\n139\n149\n175\n108\n145\n155\n40\nOndo\n87\n91\n107\n109\n121\n69\n103\n109\n10\nOsun\n38\n81\n93\n92\n105\n69\n92\n95\n11\nOyo\n112\n163\n191\n220\n236\n149\n195\n207\n20\nPlateau\n77\n65\n73\n76\n79\n48\n67\n76\n72\nRivers\n179\n197\n248\n273\n302\n174\n225\n266\n24\nSokoto\n46\n41\n54\n59\n53\n38\n49\n53\n53\nTaraba\n16\n27\n30\n35\n37\n25\n34\n36\n41\nYobe\n22\n32\n33\n32\n35\n19\n31\n33\n35\nZamfara\n15\n24\n29\n35\n35\n23\n30\n34\n33\nTOTAL\n3233 4200 4952 5436 5809 3377 4577 5190 54\nSource :\nCentral\nBank of\nNigeria/\nNigerian\nDeposit\nInsurance\nCorporation\nNotes:\n1This\nincludes\ncash\ncenters\n2Some\nbank\nbranches\nbecame\nsubsidiaries\nTable A.2.8:\nCommercial\nBanks'\nLoans to\nSmall Scale\nEnterprises1\nPeriod\nCommercial Banks\nLoans\nCommercial Banks\nCommercial Ban\nLoans\nTo Small Scale\nTotal Credit to\nPrivate\nTo Small Scale\nEnterprises as\nEnterprises (N'\nMillion)\nSector (N' Million)\nPercentage of T\nCredit (%)\n1992\n20400\n75456.299999999988 27.0355159211\n1993\n15462.9\n88821\n17.4090586685\n1994\n20552.5\n143516.79999999999 14.3206230908\n1995\n32374.5\n204090.59999999998 15.8628079882\n1996\n42302.1\n254853.09999999998 16.5986209310\n1997\n40844.300000000003 311358.40000000002 13.1180979861\n1998\n42260.7\n366544.1\n11.5294994517\n1999\n46824\n449054.3\n10.4272467717\n2000\n44542.3\n587999.9\n7.57522237673\n2001\n52428.4\n844486.2\n6.20831933073\n2002\n82368.399999999994 948464.1\n8.68439828138\n2003\n90176.5\n1203199\n7.49472863591\n2004\n54981.2\n1519242.7\n3.61898727569\n2005\n50672.6\n1991146.42\n2.54489571891\n2006\n25713.7\n2609289.4\n0.98546753763\n2007\n41100.400000000001 4820695.7\n0.85258233578\n2008\n13512.20422159\n7799400.1132610394 0.17324671161\n2009\n16366.485012469999 9667876.6775001772 0.16928727535\n2010\n12550.3\n9198173.0575210787 0.13644339937\n2011\nQ1\n13133.23678616\n9009438.8557658698 0.14610287407\nQ2\n109587.19760191\n9231557.3861079682 1.18709328251\nQ3\n14952.4760971\n10240403.486577002 0.14601452097\nQ4\n15611.7\n9614445.7984891199 0.16237753404\n2012\nQ1\n14875.073296729999 9520551.9726192486 0.15624171097\nQ2\n15065.36516238\n10048406.516823487 0.14992790286\nQ3\n14995.818688610001 10274095.4\n0.14594544416\nQ4\n13863.462939219999 10440956.329526043 0.13277962766\nSource :\nComputed\nfrom\nDeposit\nMoney\nBanks'\nReturns\nNotes: This\ntable\ncontains\nrevised\nfigures\n1The\nabolition of\nmandatory\nbanks'\ncredit\nallocations\nof 20% of\nit's total\ncredit to\nsmall scale\nenterprises\nwholly\nowned\nby\nNigerians\ntook effect\nfrom\nOctober 1,\n1996\nSmall Scale\nEnterprises\nstarted in\n1992\nTable A.3.1:\nSummary of\nAssets &\nLiabilities\nof Primary\nMortgage\nInstitutions\n(N'\nMillions)\nITEM\n1992\n1993\n1994\nASSETS :\n1. Cash\n29.3\n42.5\n30.9\n2. Balance\nheld with\n446.6\n504.1\n811.699999999\n(a) FMBN\n61.3\n84.1\n84.4\n(b) Other\nbanks\n385.3\n420\n727.3\n3. Treasury\nBills/\nCertificate\n0\n135.6\n0\n4.\nPlacements/\nInvestments\n895.5\n1185.3\n611.799999999\n5. Loans\n208.9\n334.7\n560.299999999\n6. Other\nAssets\n662.9\n1408.5\n1055.59999999\nTotal Assets 2243.2000000000003 3610.7\n3070.29999999\nLIABILITIES\n:\n1. Capital\n441.5\n845.7\n1228.59999999\n2. Reserves\n55.2\n-60.3\n-125.4\n3. Savings\n292.10000000000002 326.39999999999998 399.2\n4. Fixed\nDeposits\n626.39999999999964 1249.9000000000001 645\n5. Balance\nheld for\nother Fin.\nInts.\n337.5\n567.9\n213.9\n6. Other\nLiabilities\n490.5\n681.1\n709\nTotal\nLiabilities\n2243.1999999999998 3610.7000000000003 3070.29999999\nNumber of\nReporting\nPMI\n145\n252\n279\nLoans to\ndeposits\nRatio\n3.2\n21.2\n53.7\nLiquidity\nRatio\n6.9\n31.8\n67\nLiquid\nAssets\n475.9\n682.2\n842.6\nCurrent\nLiabilities\n6891.8\n2144.1999999999998 1258.09999999\nDeposits\n6554.3\n1576.3\n1044.2\nSource:\nCentral\nBank of\nNigeria\nNote:\nLiquidity\nRatio =\nLiquid\nAssets/\nCurrent\nLiabilities x\n100\nTable A.3.2:\nSummary of\nAssets/\nLiabilities of\nDiscount Houses\n- Assets (N'\nMillion)\nASSETS\n1993\n1994\n1995 1\nCASH AND\nBALANCES\nWITH BANKS\n6.4\n50.5\n71.3269999\ni) Cash on hand 0.1\n0.2\n0.19800000\nii) Balances\nwith CBN\n0\n15.4\n-2.2549999\niii) Balances\nwith other\nbanks\n6.3\n34.9\n73.384\nCLAIMS ON\nFEDERAL\nGOVERNMENT\n4213.2\n7126.2\n1552.64200\ni) Treasury Bills 4213.2\n7125.9\n1552.64200\na) Pledges\n0\n0\n668.15\nb) Unpledged\n0\n0\n884.491999\nc) Bill with PDO\n(CBN)\n0\n0\n0\nii) Treasury\nCertificate\nMaturing\n0\n0\n0\na) Within 1 year 0\n0\n0\nb) 1-2 years\n0\n0\n0\niii) Treasury\nBonds\n0\n0\n0\na) Pledges\n0\n0\n0\nb) Unpledged\n0\n0\n0\niv) Eligible\nDevelopment\nStock\n0\n0.3\n0\nCLAIMS ON\nSTATE\nGOVERNMENTS\n0\ni) State\nPromissory\nNotes\n0\nii Eligible State\nBonds\n0\nCLAIMS ON\nBANKS\n138.69999999999999 2308.1\n471.074999\ni) Money at Call 0\n232\n0\nii) Loans and\nAdvances\n11\niii) Commercial\nBills:\n460.074999\na) Bankers\nAcceptances\n138.69999999999999 2076.1\n410.074999\nb) Promissory\nNotes\n50\nc) Negotiable\nCertificate of\nDeposit\n0\nd) Stabilisation\nSecurities\n0\niv) Others\n0\nCLAIMS ON\nOTHER\nFINANCIAL\nINSTITUTIONS\n251.95\nMoney at Call\n251.95\nLoans and\nAdvances\n0\nCommercial\nBills:\n0\na) Promissory\nNotes\n0\nb) Negotiable\nCertificate of\nDeposit\n0\nOthers\n0\nCLAIMS ON\nOTHERS\n915.832999\nCommercial\nBills\n915.832999\nLoans and\nAdvances\n0\nOthers (CBN\nCertificate)\n0\nOTHER ASSETS 103.5\n98.4\n89.2840000\nFIXED ASSETS\n79.7420000\nTOTAL ASSETS\n4461.7999999999993 9583.1999999999989 3431.85300\nASSETS ON\nREPURCHASE\nTRANSACTION\n12190.0650\nTreasury Bills\n7012.88900\nTreasury Bills\n(Bonds)\n-\nFixed Buy Back\nRepo\n-\nEligible\nCommercial\nBills\n5177.17600\nTreasury Bills\nRepo with CBN\n-\nTreasury Bills\nRepo with other\nDiscount House\n-\nSource: Central\nBank of Nigeria\nNote: 1A new\nreporting\nformat was\nintroduced in\nJune 1995\nTable A.3.3:\nSummary of\nAssets/Liabilities\nof Discount\nHouses -\nLiabilities (N'\nMillion)\nLIABILITIES\n1993\n1994\n1995 1\n19\nCAPITAL AND\nRESERVES\n436\n565.70000000000005 865.47400000000005 12\ni) Paid-up Capital 385\n437.5\n667.45\n94\nii) Statutory\nReserves\n0.5\n18.5\n51.005000000000003 12\niii) Share\nPremium\n64.918999999999997 37\niv) Other\nReserves\n50.5\n109.7\n82.1\n51\nv) General\nReserve\n0\n85\nMONEY-AT-CALL 3350\n5517.6\n707.93700000000001 76\ni) Commercial\nBanks\n678.86900000000003 61\nii) Merchant\nBanks\n25\n31\niii) Non-Bank\nFinancial\nInstitutions\n4.0679999999999996 12\niv) Others\n0\n0.\nv) Associated\nTreasury Notes\n0\n0\nOTHER AMOUNT\nOWING TO:\n0\n25\ni) Commercial\nBanks\n0\n0\nii) Merchant\nBanks\n0\n0\niii) Non-Bank\nFinancial\nInstitutions\n0\n1.\niv) Others\n0\n25\nBORROWINGS\n2.9\n2347.5\n610\n13\ni) Central Bank of\nNigeria\n2.6\n0\n0\n0\nii) Overdrafts\n0\n13\niii) Other Banks\n0.3\n2347.5\n610\n0\nOTHER\nLIABILITIES\n672.9\n1152.4000000000001 1248.442\n26\nTOTAL\nLIABILITIES\n4461.8 9583.1999999999989 3431.8530000000001 11\nLIABILITIES FOR\nASSETS SUBJECT\nTO\nREPURCHASE\nARRANGEMENTS\n12190.065000000001 32\n- Repo with CBN\n0\n0\n- Repo with\nBanks\n7900.9660000000003 27\n- Fixed Buy Back\nRepo\n0\n0\n- Repo with\nDiscount Houses\n50\n- Repo with\nOthers\n4289.0990000000002 0\nSource: Central\nBank of Nigeria\nNote: 1A new\nreporting format\nwas introduced in\nJune 1995\n2Revised\nTable\nA.3.4:\nSelected\nFinancial\nRatios of\nDiscount\nHouses\nITEM\nTarget 1993\n1994\n1995\nAssets\nStructure\nAssets\n4029614\n7125921\n15526\nTreasury\nBills of\nLess Than\n91 Days\nMaturity\n4029614\n7125921\n15526\nTreasury\nBonds\n0\n0\n0\nLiabilities\n3352974\n7865119\n13179\nMoney at\nCall\n3350050\n5517625\n70793\nBorrowings\n2924\n2347494\n61000\nOther\nAmounts\nOwing\n0\n0\n0\nStructure\nof Assets\nRatio1 (%)\n70\n120.2\n90.6\n117.8\nTotal\nBorrowings\n& Amount\nOwing\n2924\n2347494\n61000\nBorrowings\n2924\n2347494\n61000\nAmount\nOwing\n0\n0\n0\nCapital &\nReserves\n436003\n565672\n86547\nCapital\n385000\n437500\n66745\nReserves\n51003\n128172\n19802\nGearing\nRatio: x:1\nx=50 7.0000000000000001E-3 4.1500000000000004 0.704\nSource:\nCentral\nBank of\nNigeria\nNote:\n1Target for\nStructure\nof Assets\nRatio was\nset and\nretained at\n70%\nbetween\n1993 and\n2002. It\nwas\nchanged to\n60% in\n2003.\nTable A.3.5:\nSummary of\nAssets &\nLiabilities of\nCommunity/\nMicrofinance\nBanks (N'\nMillion)\nITEM\n1992\n1993\n1994\nASSETS :\nCash in hand\n66.7\n190.7\n233.1\nBalance with\nother banks\n245.9\n781.2\n879.8\nMoney at call\n197.7\n695.7\n773.2\nBills Discounted\n23.3\n23.4\n24.7\nLoans &\nAdvances:\n135.80000000000001 654.5\n1220.5999\n(a) Agriculture &\nforestry\n29.5\n123.2\n155.4\n(b) Mining &\nQuarrying\n3.7\n5.7\n32.200000\n(c)\nManufacturing &\nFood Processing\n19.899999999999999 129.6\n201\n(d) Real Estate &\nConstruction\n14.6\n47.5\n34.9\n(e) Transport/\nCommerce\n45.6\n280\n513.79999\n(f) Others\n22.5\n68.5\n283.3\nInvestments\n118.4\n326.60000000000002 491.4\nEquipment on\nLease\n-\n-\n6\nFixed Assets\n124.9\n406.4\n753.7\nOther Assets\n54.5\n120.1\n310.7\nTOTAL ASSETS\n967.2\n3198.6\n4693.2\nLIABILITIES:\nDeposits\n639.6\n2188.2000000000003 3216.7\n(a) Demand\n207.9\n588.5\n836.3\n(b) Savings\n304.2\n1107.9000000000001 1865.7\n(c) Time\n127.5\n491.8\n514.70000\nMoney at Call\nTakings\n0\n-\n5.0999999\nBalances held for\nBanks\n39.5\n63.9\n33.6\nMatching Loans\n36.9\n74.599999999999994 71.099999\nOther Loans1\n0\n-\n108.2\nShareholders\nFunds\n227\n625.29999999999995 935.4\n(a) Paidup\nCapital\n197.9\n417.2\n769\n(b) Reserve\n29.1\n208.1\n166.4\nOther Liabilities\n24.2\n246.60000000000002 323.10000\nTOTAL\nLIABILITIES\n967.2\n3198.6\n4693.2\nNumber of\nReporting Banks\n334\n611\n902\nLoans to Deposit\nRatio2\n23.428066558680609 30.100794813729404 38.253363\nLiquidity Ratio3\n75.143572375202467 74.046445539718476 57.937580\nSource: Central\nBank of Nigeria\nNotes: 1Other\nLoans consists of\ndonations/\ngrants/\nsubventions\n2Loans to Deposit\nratio= (Loans\nand\nadvances+Bills\ndiscounted)*100/\n(deposits+money\nat call Takings\n+balances held\nfor banks)\n3Liquidity Ratio\n= ((Cash in hand\n+ Balance with\nother banks +\nMoney at Call)/\n(Deposits +\nMoney at call\nTakings +\nBalances held for\nbanks))*100\nWith effect from\nDecember 2006,\nall the existing\nCommunity\nBanks were asked\nto transform to\nMicrofinance\nBanks\n4Revised\n5Provisional\nTable A.3.6:\nSummary of Assets\nand Liabilities of\nFinance Houses (N'\nMillion)\nITEM\n1992\n1993\n1994\nASSETS\n1. Liquid Assets\n286\n4446.5\n3655.\nCash in Hand\n40.04\n239.20400000000001 271.1\nBalances with Banks\n245.96\n1469.396\n1665.\nPlacements with\nOther Finance\nCompanies\n0\n2737.9\n1718.\n2. Domestic Credit\n1512.8\n5634\n4787.\nInvestments\n380.7\n1298.5\n1333.\nNet Loans &\nAdvances\n1132.0999999999999 4335.5\n3453.\nEquipment on Lease\n0\n0\n0\n3. Other Assets\n403.1\n1798.1\n1636.\n4. Fixed Assets\n244\n1507.2\n1581.\nTotal Assets\n2445.9\n13385.800000000001 11660\nLIABILITIES\n1. Shareholder' Fund\n576.6\n2668.2\n2111.\nPaid - Up Capital\n554.9\n2668.2\n2111.\nReserves\n21.7\n0\n0\nPublished Current\nYear Profit/Loss\n0\n0\n0\n2. Taking from Other\nFinance Companies\n0\n1592.2\n1434.\n3. Long Term\nLiabilities\n0\n0\n0\n4. Total Borrowings\n1292\n6969.9\n5449.\n5. Other Liabilities\n577.29999999999995 2155.5\n2664.\nTotal Liabilities\n2445.8999999999996 13385.8\n11660\nSource: Central Bank\nof Nigeria\n73232.399999999994\n#REF!\n1622880.6\n1696113\n#REF!\n446760.6\n1452734\n1899494.6\n40.040000000000006\n245.96\n286\nTable A.3.7:\nNumber of\nDevelopment &\nSpecialised\nBanks/\nInstitutions\nBANKS /\nINSTITUTIONS\n1990 1991 1992 1993 1994 1995 1996 1997 1998 1999\nDEVELOPMENT\nBANKS\n1\n2\n2\n2\n3\n4\n4\n4\n4\n4\nEducational\nBank\n-\n-\n-\n-\n-\n1\n1\n1\n1\n1\nUrban\nDevelopment\nBank\n-\n-\n-\n-\n1\n1\n1\n1\n1\n1\nNigerian Export\nand Import\nBank\n-\n1\n1\n1\n1\n1\n1\n1\n1\n1\nBank of\nIndustry\n-\n-\n-\n-\n-\n-\n-\n-\n-\n-\nNigeria Agric.\nCredit Dev.\nBank\n-\n-\n-\n-\n-\n-\n-\n-\n-\n-\nFederal\nMortgage Bank\n1\n1\n1\n1\n1\n1\n1\n1\n1\n1\nSPECIALISED\nBANKS:\n169\n287\n629\n1150 1245 1630 1646 1293 1293 1292\nCommunity\nBanks\n(Microfinance\nBanks)\n0\n66\n401\n879\n970\n1355 1368 1015 1015 1014\nPeoples Bank (\nBranches )\n169\n221\n228\n271\n275\n275\n278\n278\n278\n278\nSPECIALISED\nFINANCIAL\nINSTITUTIONS:\n84\n127\n872\n674\n680\n657\n564\n478\n540\n541\nFinance Houses\n618\n310\n290\n279\n279\n270\n279\n280\nInsurance\nCompanies\n(Reporting)\n80\n100\n105\n105\n103\n90\n90\n83\n57\n57\nDiscount\nHouses\n-\n-\n-\n3\n4\n4\n5\n5\n5\n5\nPrimary\nMortgage\nInstitutions\n-\n23\n145\n252\n279\n280\n186\n115\n194\n194\nNational\nEconomic\nReconstruction\nFund\n(NERFUND)\n1\n1\n1\n1\n1\n1\n1\n1\n1\n1\nNational Social\nInsurance Trust\nFund (NSITF)\n1\n1\n1\n1\n1\n1\n1\n1\n1\n1\nNigeria Deposit\nInsurance\nCompany\n(NDIC)\n1\n1\n1\n1\n1\n1\n1\n1\n1\n1\nSecurities and\nExchange\nCommission\n(NSE)\n1\n1\n1\n1\n1\n1\n1\n1\n1\n1\nNational\nInsurance\nCommission\n(NAICOM)\n1\n1\n1\nNational\nPension\nCommission\n(PENCOM)\nSource: Central\nBank of Nigeria\nNote:\nCommunity\nBanks\ntransformed to\nMicrofinance\nBanks in\nDecember 2006\nTable A.4.1:\nValue of\nMoney\nMarket\nInstruments\nOutstanding\nas at End-\nPeriod (N'\nMillion)\nPeriod\nTreasury\nTreasury\nEligible Develo-\nBills\nCertificates\npment Stocks1\n1981\n5782\n2307.6\n98.9\n1982\n9782\n1668.6\n93.8\n1983\n13476\n4894\n90.5\n1984\n15476\n6413\n87.4\n1985\n16976\n6644\n-\n1986\n16976\n6654.7\n14.6\n1987\n25226\n6664.1\n28.3\n1988\n35476\n6794.6\n5.9\n1989\n24126\n6944.6\n-\n1990\n25476\n34214.6\n-\n1991\n56728.3\n34214.6\n-\n1992\n103326.5\n35241.4\n-\n1993\n103326.5\n36584.300000000003 10\n1994\n103326.5\n37342.699999999997 -\n1995\n103326.5\n23596.3\n-\n1996\n103326.5\n-\n-\n1997\n221800.5\n-\n-\n1998\n221801.5\n-\n790.3\n1999\n361758.4\n-\n952.8\n2000\n465535.8\n-\n2406.30000000\n2001\n584535.80000000005 -\n3704.7\n2002\n584535.80000000005 -\n1128\n2003\n825054.5\n-\n33254.9\n2004\n871577\n-\n32758.7\n2005\n854828\n-\n101361.5\n2006\n701399.8\n-\n319332.3\n2007\n574929.42999999993 -\n694061\n2008\n471929.5\n39705.9\n914106.1\n2009\n797482.48\n52577.2\n1229049.7\n2010 2\n1277100\n0\n1448129.89\n2011\nQ1\n1439591.3149999999 0\n0\nQ2\n1561424.8389999999 0\n0\nQ3\n1607835.017\n0\n0\nQ4\n1727914.3640000001 0\n0\n2012\nQ1\n1947185.098\n0\n0\nQ2\n2084590.382\n0\n0\nQ3\n2132926.9569999999 0\n0\nQ4\n2122926.9569999999 0\n0\nSource:\nCentral\nBank of\nNigeria\nNote:\n1From\n1975 to\n1978\nCertificate\nof Deposits,\nBankers\nUnit Fund\n& Eligible\nDevt Stocks\nwere\nlumped\ntogether\n2Revised\nTable A.4.2:\nTreasury Bills\nIssues and\nSubscriptions\n(N' Million)\nS u b s c r i p t i o n s\nPeriod\nIssues\nCentral\nCommercial\nBank\nBanks\n1981\n11975.999999999998 5890.4\n5438.4\n1982\n26476\n18283.099999999999 7522.1\n1983\n45831.999999999993 28445\n15805.7\n1984\n55904.000000000007 28107.9\n24820.9\n1985\n6875.9999999999991 4372.5\n2099.5\n1986\n65904.000000000015 40626.6\n22415.200000\n1987\n88663.999999999985 70837.399999999994 16573.900000\n1988\n111154.00000000001 89015.2\n20878.8\n1989\n130554\n106569.60000000001 13887.8\n1990\n91903.9\n33020.5\n17116.599999\n1991\n133156\n77729\n25609.7\n1992\n135969.90000000002 123163.3\n4473.8\n1993\n112326.50000000001 97959.6\n7541.6\n1994\n103326.50000000001 92292\n5343.3\n1995\n103326.40000000001 86938.8\n9099.5\n1996\n103326.5\n33856.400000000001 32028.9\n1997\n72930.900000000009 54319.6\n11089\n1998\n88930.9\n61768.7\n12864.7\n1999\n80930.899999999994 17367.099999999999 38568.400000\n2000\n86895.1\n0\n58257.2\n2001\n1985453.2\n1065709.3\n686183\n2002\n2421143.2000000002 929123.2\n998915.2\n2003\n3026347.1\n789158\n1394\n2004\n3467740.5\n811945.2\n1403052.4\n2005\n2521730\n996108.86\n1257194.77\n2006\n1509070\n643210\n771570\nSource:\nCentral Bank\nof Nigeria\nNotes:\n1Savings\nInstitutions\ninclude\nmutual\nsavings and\nloan groups,\ncredit\norganisations,\nco-operative\nsocieties,\ninsurance\ncompanies,\npost office\nsavings\nbank, pension\nand\nprovident\nfunds,\nschools,\nunions, etc.\n2Others\ninclude\nFederal, State\nand Local\ngovernments,\nDiscount\nHouses and\nother\ncompanies\nTable\nA.4.2.1:\nTreasury\nBills Issues,\nSubscriptions\nand\nAllotments 1\n(N' Million)\nAllotments\nPeriod\nIssues\nTotal\nCentral\nSubscriptions\nBank\n2007\n1304182.74\n3141189.05\n25069.847999\nQ1\n343106.56\n850511.90999999992 0\nQ2\n360929.43\n923260.26\n0\nQ3\n328216.70999999996 502476.68000000005 19586.775999\nQ4\n271930.04000000004 864940.2\n5483.0720000\n2008\n916281.6\n2787775.5300000003 7584.3300000\nQ1\n253217\n594467.48\n6376.7400000\nQ2\n241274.33999999997 977616.13000000012 1200.1399999\nQ3\n165217.01\n432583.72000000003 0\nQ4\n256573.25\n783108.2\n7.45\n2009\n1392430\n2541080\n30\nQ1\n275580\n679000\n30\nQ2\n341580\n560000\n0\nQ3\n322230\n493680\n0\nQ4\n453040\n808400\n0\n2010\n2003950\n4324860\n0\nQ1\n315050\n981890\n0\nQ2\n419410\n857240\n0\nQ3\n598640\n1310570\n0\nQ4\n670850\n1175160\n0\n2011\n3048490\n6512720\n0\nQ1\n706570\n1724200\n0\nQ2\n759910\n1938920\n0\nQ3\n709220\n1373590\n0\nQ4\n872790\n1476010\n0\n2012\n3609654.0719999997 8750485.4989999998 163857.24400\nQ1\n947451.321\n1947967.2\n163857.24400\nQ2\n970821.44799999997 2518619.46\n0\nQ3\n822050.723\n2215153.6179999998 0\nQ4\n869330.58\n2068745.2209999999 0\nSource:\nCentral Bank\nof Nigeria\nNotes: 1\nTable\npresents\nrevised\ntemplate and\ndata.\n2Comprises\nallotments to\nMoney\nMarket\nDealers\n(MMDs),\nMandate/\nInternal\nAccounts\nand Brokers.\nTable A.4.3: Holdings\nof Treasury Bills\nOutstanding (N'\nMillion)\nTotal Outstanding1\nHolders\nPeriod\nCentral Bank\nMerch\nincluding Rediscounts Banks\n1981\n5782\n3404.9\n51.1\n1982\n9782\n5463.7\n171.7\n1983\n13476\n6018.1\n374.5\n1984\n15475.400000000001 4860\n876.5\n1985\n16976\n6184.1\n1027.\n1986\n16976\n11585\n98\n1987\n25226\n14215.3\n260.6\n1988\n35475.999999999993 22560.3\n159.1\n1989\n24126\n11164\n84.6\n1990\n25476\n3403.9\n346.1\n1991\n56728.3\n34756\n673\n1992\n103317.5\n81143\n1004.\n1993\n103326.5\n47386.5\n9393.\n1994\n103326.5\n30184.2\n28286\n1995\n103326.5\n41984.1\n2105.\n1996\n103326.5\n9490.9\n8947.\n1997\n221800.5\n141676.6\n6384.\n1998\n221801.5\n132513.4\n8165.\n1999\n361758.4\n79860.5\n12723\n2000\n465535.8\n87355.5\n12439\n2001\n584535.80000000005 325328.5\n-\n2002\n584535.80000000005 134960.70000000001 -\n2003\n825054.5\n255664.6\n-\n2004\n871577\n60807.4\n-\n2005\n854828\n82679\n-\n2006\n701399.8\n24514.93\n21612\n2007\n574929.42999999993 5940.84\n25655\n2008\n471929.5\n410.2\n26529\n2009\n797482.48\n1900.3\n59339\n2010\n1277100.0000000002 24480\n32730\n2011\nQ1\n1439590\n30660\n17351\nQ2\n1561420\n19420\n83750\nQ3\n1607830\n3420\n36899\nQ4\n1727910\n69300\n20036\n2012\nQ1\n1947185.1\n163893.84\n36462\nQ2\n2084590.38\n111734.64\n47703\nQ3\n2132926.9500000002 62323.98\n30148\nQ4\n2122926.96\n62323.58\n31708\nSource: Central Bank\nof Nigeria\nNotes: 1Nominal\nvalue\n2Since the Adoption\nof Universal Banking\nPractice in 2001,\nMerchant Banks and\nCommercial Banks\nfigures are aggregated\nunder Commercial\nBanks\n3Includes statutory\nboards, corporations,\nsavings-type\ninstitutions, local\ngovernments,\ncompanies,individuals\nand public accounts\nwith CBN from 1989\n4The figures from\n2007 are that of\nDiscount Houses\nTable A.4.4:\nHoldings of\nTreasury\nCertificates\nOutstanding\n(N'Million)\nTotal Outstanding1\nHolders\nPeriod\nCentral\nCommercial\nBank\nBanks\n1981\n2301.6\n1112.5999999999999 850.4\n1982\n1665.6\n900.3\n625.79999999\n1983\n4914.3999999999996 3560.7\n798.7\n1984\n6413.0999999999995 4304.2\n1429.5\n1985\n8354.0999999999985 3724.4\n2264\n1986\n6654.7\n4518.3\n1360.8\n1987\n6654.0999999999995 3431.6\n2322.1999999\n1988\n6794.6\n3670.4\n2035.7\n1989\n6944.5999999999995 4483.5\n1095.9000000\n1990 3\n34214.6\n31847.1\n1036.5\n1991\n34214.600000000006 32813.300000000003 559.29999999\n1992\n34214.6\n22896.6\n324.60000000\n1993\n36584.299999999996 35307.699999999997 673.7\n1994\n37342.699999999997 22365.9\n614.29999999\n1995\n35687.1\n30079\n280.8\n1996 4\n37342.700000000004 31142.9\n415.6\nSource:\nCentral Bank\nof Nigeria\nNote:\n1Nominal\nValue\n2Includes\nStatutory\nBoards/\nCorporations,\nSavings -\ntype\nInstitutions,\nLocal\nGovernment,\nCompanies\nand\nIndividuals\n3Includes\nnew issues of\nTC of N27.3\nbillion\n4Total\noutstanding\nTreasury\nCertificates\nwere\nconverted\ninto treasury\nbonds with\neffect from\n16th March,\n1996\nTable.4.5:\nHoldings of\nDevelopment\nStocks (N'\nMillion)\nPeriod\nCentral\nCommercial\nMerchant\nBank1\nBanks\nBank2\n1981\n1529.1\n361.9\n1.5\n1982\n1658.6\n328.8\n1.9\n1983\n1768.6\n301.60000000000002 3.3\n1984\n1536.6\n272.10000000000002 1.1000000000\n1985\n1613.4\n395.7\n33\n1986\n1618.3\n545.70000000000005 11.7\n1987\n1550.3\n537.20000000000005 5.0999999999\n1988\n1450.5\n404.9\n13.6\n1989\n1484.9\n39.5\n6.1\n1990\n1497.8\n156.80000000000001 6.7\n1991\n807.9\n33.5\n6.4\n1992\n121.6\n29.5\n3.6\n1993\n1506.2\n159\n-\n1994\n1207.5\n-\n-\n1995\n918.1\n14.7\n-\n1996\n789\n471.1\n0\n1997\n1193.3\n14\n0\n1998\n494.4\n13\n157.80000000\n1999\n671.6\n4\n0\n2000\n251.3\n0\n0\n2001\n251.3\n0\n0\n2002\n6903.4\n2692.7249999999999 0\n2003\n415\n32504.9\n-\n2004\n230\n32758.7\n-\n2005\n158.57\n0\n0\n2006\n102.50700000000001 0\n0\n2007\n143.88900000000001 0\n0\n2008\n129.19999999999999 0\n0\n2009\n24.645\n0\n0\n2010\n0\n0\n0\n2011 3\n0\n0\n0\nSource:\nCentral Bank\nof Nigeria\nNotes:\n1Exclude 20\nbillion naira\nTreasury\nBonds issued\nin March,\n1990\n2Merchant\nBanks ceased\nafter the\nadoption of\nuniversal\nbanking\npractice in\n2001.\n3The\ndevelopment\nstocks\noutstanding\nas at\nend-2010\nwere fully\nredeemed at\nend-March\n2011.\nForeign\nholdings of\nDevelopment\nStocks are\nnegligible\nTable A.4.6:\nTransactions\nat the\nNigerian\nStock\nExchange\nNumber of Deals\nYear\nIndustrial\nLoan\nETF Bond Equities Total\nGovt.\n1981\n118\n10081\n-\n10199\n1982\n184\n9830\n-\n10014\n1983\n292\n11633\n-\n11925\n1984\n194\n17250\n-\n17444\n1985\n340\n23231\n-\n23571\n1986\n270\n27448\n-\n27718\n1987\n294\n42\n20189\n20525\n1988\n100\n-\n21460\n21560\n1989\n171\n-\n33273\n33444\n1990\n118\n49\n39103\n39270\n1991\n45\n9\n41716\n41770\n1992\n71\n14\n48944\n49029\n1993\n39\n28\n40331\n40398\n1994\n16\n48\n42010\n42074\n1995\n0\n15\n49549\n49564\n1996\n11\n15\n49489\n49515\n1997\n6\n5\n78078\n78089\n1998\n1\n3\n84931\n84935\n1999\n4\n0\n123505\n123509\n2000\n8\n0\n256515\n256523\n2001\n14\n0\n426149\n426163\n2002\n3\n0\n451847\n451850\n2003\n1\n19\n621697\n621717\n2004\n3\n13\n973510\n973526\n2005\n4.4000000000000004 19.2\n1021943 102196\n2006\n5\n1\n1367948 136795\n2007\n0\n37\n2614983 261502\n2008\n0\n138\n3535493 353563\n2009\n0\n15\n1\n1739349 173936\n2010\n5\n0\n2\n1925471 192547\n2011\n0\n0\n33\n0\n1235434 123546\n2012\n44\n0\n452 2\n1147128 114762\nSource:\nNigerian\nStock\nExchange\nNotes:\nIndustrial\nloans figure\nfor\n1961-1986\nincludes\nequities\nActive\nTrading\nStarted in\nJune 1961\nExchange\nTrust Fund\n(ETF) is an\ninvestment\ninstrument\nintroduced\nin 2011\nTable\nA.4.7.1:\nAll Share\nIndex on\nthe\nNigerian\nStock\nExchange\nYear\nJanuary\nFebruary\nMarch\n1985\n111.3\n112.2\n113.4\n1986\n134.6\n139.69999999999999 140.80000000000\n1987\n166.9\n166.2\n161.69999999999\n1988\n190.8\n191.4\n195.5\n1989\n239.7251\n251\n256.89999999999\n1990\n343\n349.3\n356\n1991\n528.70000000000005 557\n601\n1992\n794\n810.7\n839.1\n1993\n1113.4000000000001 1119.9000000000001 1130.5\n1994\n1666.3\n1715.3\n1792.8\n1995\n2285.3000000000002 2379.8000000000002 2551.1\n1996\n5135.1000000000004 5180.3999999999996 5266.2\n1997\n7268.3\n7699.3\n8561.4\n1998\n6435.6\n6426.2\n6298.5\n1999\n5494.8\n5376.5\n5456.2\n2000\n5752.9\n5955.7\n5966.2\n2001\n8794.2000000000007 9180.5\n9159.7999999999\n2002\n10650\n10581.9\n11214.4\n2003\n13298.8\n13668.8\n13531.1\n2004\n22712.880000000001 24797.43\n22896.400000000\n2005\n23078.3\n21953.5\n20682.400000000\n2006\n23679.4\n23843\n23336.6\n2007\n36784.5\n40730.699999999997 43456.1\n2008\n54189.919999999998 65652.38\n63016.56\n2009\n21813.759999999998 23377.14\n19851.89\n2010\n22594.9\n22985\n25966.25\n2011\n26830.7\n26016.799999999999 24621.200000000\n2012\n20875.830000000002 20123.509999999998 20652.47\nSource:\nNigerian\nStock\nExchange\nNote:\n1All\nShare\nIndex\nstarted in\nJanuary,\n1985\nTable\nA.4.7.2: Total\nAnnual\nMarket\nCapitalization\non The\nNigerian\nStock\nExchange (N'\nBillion)\nYear\nGovernment Stocks/\nSecurities\nDebt/Bonds\nETF Equities\n1981\n3.1\n0\n1.9\n1982\n3\n1\n1\n1983\n3.5\n0\n2.200000\n1984\n2.9\n0.2\n2.4\n1985\n3.5\n0.4\n2.7\n1986\n2.7\n0.4\n3.7\n1987\n4.2\n0\n4\n1988\n4.5\n0.4\n5.099999\n1989\n4.2\n0.6\n8\n1990\n3.4\n0.8\n12.1\n1991\n3.3\n1.4\n18.39999\n1992\n3.2\n1.8\n26.2\n1993\n3.6\n2.1\n41.8\n1994\n3.2\n2.1\n61\n1995\n3.2\n2.1\n175.1\n1996\n3\n3\n279.8\n1997\n2.8\n2.8\n276.3\n1998\n2.7\n3.1\n256.8\n1999\n2.4\n3.1\n294.5\n2000\n2.1\n4.0999999999999996\n466.1\n2001\n8.3000000000000007 5.8\n648.4\n2002\n12.7\n3.5\n748.7\n2003\n25.2\n8.4\n1325.7\n2004\n178.1\n7.9\n1926.5\n2005 1\n365.47\n9.83\n2523.5\n2006 1\n902.99\n3.49\n4227.100\n2007 1\n2976.58\n16.98\n10180.29\n2008 1\n2558.96\n16.41\n6957.45\n2009 1\n2030.26\n8\n4989.390\n2010 1\n1939.27\n56.37\n7913.8\n2011 1\n1800.88\n1357.57\n0.9 6532.6\n2012\n4421.04\n1400.433626857\n1\n8974.450\nNote:\nExchange\nTrust Fund\n(ETF) is an\ninvestment\ninstrument\nintroduced in\n2011\nSource:\nNigerian\nStock\nExchange\n1Revised\nTable\nA.4.7.3:\nNigerian\nStock\nExchange\nMarket\nCapitalization\n- Equities\nOnly (N'\nBillion)\nYear\nJanuary\nFebruary\nMarch\n1985\n4.8164972962893895 4.8554447137796011 4.9073746037\n1986\n5.8248026602026224 6.0455046926471496 6.0931070918\n1987\n7.2225821990179622 7.1922897631922424 6.9975526757\n1988\n8.2568525079246697 8.2828174529181418 8.4602445770\n1989\n10.374081725091676 10.862001988936539 11.117323948\n1990\n14.843293554602523 15.115925477033997 15.405867362\n1991\n22.879444030082666 24.104123935608179 26.008219901\n1992\n34.360277208030325 35.082968177015353 36.311975573\n1993\n48.182282926222882 48.463569830318853 48.922283858\n1994\n72.108979737708992 74.229450245509341 77.583255640\n1995\n98.896147989309469 102.98562682578159 110.39861862\n1996\n222.22098172664553 224.18133507365278 227.89432220\n1997\n314.53501616010936 333.18650164708805 370.49380011\n1998\n278.5\n278.2\n272.60000000\n1999\n247.6\n242.7\n246.3\n2000\n321.3\n332.6\n333.2\n2001\n506.1\n542.79999999999995 541.5\n2002\n629.9\n625.9\n663.3\n2003\n841.2\n864.6\n846.9\n2004\n1534.8574121951101 1740.2\n1635\n2005\n1863.6901898864801 1783.1636898278\n1680\n2006\n2566.4\n2574.1\n2510.8000000\n2007\n4976.2997116833794 5510.1517687488795 6150.0491393\n2008\n10692.738058529301 12503.2\n12125.895279\n2009\n4879.1000000000004 5231.8999999999996 4483.5\n2010\n5441.5876318420305 5535.7471679987502 6280.5987499\n2011\n8744.2000000000007 8315.6\n7866.7\n2012\n6579.1049999999996 6342\n6549.8419999\nSource:\nNigerian\nStock\nExchange\nTable\nA.5.1:\nSavings\nStatistics -\nCumulative\n(N' Million)\nPeriod\nSavings and Time\nDeposit with Comm.\nBank\nNational\nProvident\nFund\nFederal Savings Bank Feder\nBank\n1981\n5796.1\n375.3\n7.1\n56\n1982\n6338.2\n411.5\n4\n69.3\n1983\n8082.9\n472.3\n5\n89.9\n1984\n9391.2999999999993 504.1\n8\n114\n1985\n10550.9\n540.5\n8.1\n104\n1986\n11487.7\n577.4\n8.1\n121.1\n1987\n15088.7\n614\n16.899999999999999 133.6\n1988\n18397.2\n651\n22.4\n195.5\n1989\n17813.3\n699.1\n37.5\n213.2\n1990\n23137.1\n723.5\n-\n304.6\n1991\n30359.7\n650\n-\n433.7\n1992\n43438.8\n719.8\n-\n729.4\n1993\n60895.9\n766.8\n-\n819.5\n1994\n76127.8\n757.9\n-\n816.7\n1995\n93327.8\n731.4\n-\n435.7\n1996\n115352.3\n-\n-\n-\n1997\n154055.70000000001 -\n-\n-\n1998\n161931.9\n1365.3\n-\n436.3\n1999\n241604.7\n1365.3\n-\n-\n2000\n343174.1\n1365.3\n-\n-\n2001\n451963.1\n1365.3\n-\n22300\n2002\n556011.69999999995 1365.3\n0\n22300\n2003\n655739.69999999995 -\n-\n-\n2004\n797517.2\n-\n-\n-\n2005\n1316957.3999999999 -\n-\n-\n2006\n1739636.9\n-\n-\n-\n2007\n2693554.3\n-\n-\n-\n2008\n4118172.8\n-\n-\n-\n2009\n5763511.2153961603 -\n-\n-\n2010\n5954260.4522725996 -\n-\n-\n2011\n6531913.0086532207 -\n-\n-\n2012\n8062104.8126581004 -\n-\n-\nSource:\nCentral\nBank of\nNigeria\nNote:\n1Consists\nPeoples\nBank,\nCommunity\nBanks and\nNon\nInterest\nBanks\nTable A.6.1:\nIncome and\nExpenditure\nof Insurance\nCompanies\nin Nigeria (N'\nThousand)\nI n c o m e\nWholly\nJoint\nForeign1 All\nYear\nNigerian\nCom\n1981\n151187\n89479\n0\n2406\n1982\n159560\n99950\n0\n2595\n1983\n171959\n56674\n0\n2286\n1984\n140593\n97002\n0\n2375\n1985\n118622\n86464\n0\n2050\n1986\n148792\n114900\n0\n2636\n1987\n259669\n160289\n0\n4199\n1988\n300351\n206324\n0\n5066\n1989\n507450\n194314\n0\n7017\n1990\n657155\n391288\n0\n1048\n1991\n842364\n491873\n0\n1334\n1992\n1501231\n1016670\n0\n2517\n1993\n5087311\n813946\n0\n5901\n1994\n13649482\n1022193\n0\n1467\n1995\n13520921\n1066728\n0\n1458\n1996\n11202468\n1948095\n0\n1315\n1997\n13405788\n3113230\n0\n1651\n1998\n14756790\n3089681\n0\n1784\n1999 2\n8996087.5283242259 1883542.4716757727 0\n1087\n2000\n11615534.671297198 2431985.3287028004 0\n1404\n2001\n15248142.747829529 3192557.252170471\n0\n1844\n2002\n18131387.630630165 3796232.3693698323 0\n2192\n2003\n30435320.046148058 6372349.953851941\n0\n3680\n2004\n34258357.296997257 7172792.7030027388 0\n4143\n2005\n41631695.546604142 8716574.4533958565 0\n5034\n2006\n42880646.399999999 8978071.6869977321 0\n5185\n2007 3\nN/A\nN/A\nN/A\n1053\n2008 3\nN/A\nN/A\nN/A\n1572\n2009 3\nN/A\nN/A\nN/A\n1899\n2010 3\nN/A\nN/A\nN/A\n2003\n2011 3\nN/A\nN/A\nN/A\n2337\nSources:\nCentral Bank\nof Nigeria\nAnnual\nSurvey and\nNational\nInsurance\nCommission\n(NAICOM)\nAnnual\nReports\nNotes: CBN\nhad not\nconducted\nInsurance\nAnnual\nSurvey since\n1999\n1Wholly\nForeign\nowned\ninsurance\ncompanies\nceased to\nexist in\nNigeria since\nthe\npromulgation\nof the\nNigerian\nEnterprises\nPromotion\nDecree of\n1977\n2From 1999,\nthe\nbreakdown\nof income\nand\nexpendicture\nwere\nextracted\nfrom\nNAICOM\nAnnual\nReport\n3Revised\n(NAICOM\nAnnual\nReport,\n2011)\nTable A.6.2:\nSources of\nIncome of\nInsurance\nCompanies\nin Nigeria -\nAll\nCompanies1\n(N'\nThousand)\nGENERAL\n(NON\nLIFE)\nSub Total\nMotor\nEm\nPremiums\nFire\nAccident\nVehicle\nLia\nYear\n(A)\n1981\n234050\n22109\n27907\n116418\n995\n1982\n248765\n27507\n28430\n121401\n110\n1983\n191801\n26359\n24933\n115737\n665\n1984\n205694\n28337\n28720\n94185\n610\n1985\n195290\n35649\n29420\n99256\n611\n1986\n254158\n41636\n30174\n104722\n580\n1987\n406500\n75087\n47808\n126795\n663\n1988\n486648\n82712\n58385\n151539\n108\n1989\n673089\n154922\n111303\n161895\n131\n1990\n1013674\n194435\n124173\n343864\n116\n1991\n1296243\n233418\n176271\n501760\n381\n1992\n2445691\n839248\n249778\n906282\n241\n1993\n4931918\n543496\n605498\n1907969\n956\n1994\n14519149\n535494\n602822\n2284879\n621\n1995\n13525125\n781963\n763100\n2346806\n994\n1996\n11091331\n1822198\n1832617\n3384708\n160\n1997\n10941579\n2068116\n1286315\n3771245\n565\n1998\n11688251\n2385065\n1717812\n3616410\n514\n1999 2\n14597280\n2920500\n2351910\n6293130\n244\n2000\n22531460\n3449780\n2872570\n7403980\n260\n2001\n28981290\n3807940\n3888020\n10101830 384\n2002\n37765890\n4908300\n4918670\n11715490 402\n2003\n43441810\n5940650\n5812680\n12871620 512\n2004\n50100830\n6965130\n8370930\n15482440 682\n2005\n67465560\n12252550 11050140\n16322630 758\n2006\n81583750\n11970620 15239750\n20734980 912\n2007 3\n89104890\n11458440 16566740.000000002 25771390 992\n2008 3\n126470300 17454900 23208400\n38701200 100\n2009 3\n153127120 19534950 25918890\n43784170 895\n2010 3\n157336810 24249950 27816160\n43925650 143\n2011 3\n175756750 24990020 30706670\n45421770 100\nSources:\nCentral Bank\nof Nigeria\nAnnual\nSurvey and\nNational\nInsurance\nCommission\n(NAICOM)\nAnnual\nReports\nNotes: CBN\nhad not\nconducted\nInsurance\nAnnual\nSurvey since\n1999\nAll\nCompanies\ncomprises\nNigerian,\nForeign and\nJointly\nowned\ncompanies\n1Wholly\nForeign\nowned\ninsurance\ncompanies\nceased to\nexist in\nNigeria since\nthe\npromulgation\nof the\nNigerian\nEnterprises\nPromotion\nDecree of\n1977\n2From 1999,\nthe\nbreakdown\nof income\nwere\nextracted\nfrom\nNAICOM\nAnnual\nReport.\n3Revised\n(NAICOM\nAnnual\nReport,\n2011)\nTable A.6.3:\nBreakdown\nof Total\nExpenditure\nof Insurance\nBusiness -\nAll\nCompanies1\n(N'\nThousand)\nGENERAL\n(NON-\nLIFE)\nClaims\nFire\nAccident\nMotor\nEmpl\nYear\n(A)\nVehicle\nLiabi\n1981\n74208\n6271\n3655\n46951\n1320\n1982\n79173\n6780\n5482\n44651\n1480\n1983\n78580\n6034\n5586\n55641\n1151\n1984\n77704\n5334\n6276\n53710\n1157\n1985\n63999\n-14.0\n6408\n54152\n863\n1986\n86390\n6876\n5884\n54220\n832\n1987\n109430\n16421\n8374\n55637\n8005\n1988\n151143\n16527\n11242\n67825\n831\n1989\n278928\n46954\n28823\n73112\n1974\n1990\n306512\n61513\n30795\n114486\n2284\n1991\n386872\n80415\n42783\n164835\n5612\n1992\n613887\n114795\n66768\n267441\n8304\n1993\n2684105\n1161034\n448731\n607331\n1282\n1994\n1315294\n267396\n193828\n605163\n2203\n1995\n1508882\n194532\n207139\n563644\n9572\n1996\n1654069\n342701\n276877\n712329\n5454\n1997\n1677282\n349106\n376620\n780888\n4196\n1998\n1956214\n388133\n396745\n832866\n3976\n1999 2\n5923180\n890970\n1649040\n1824670\n9379\n2000\n5629520\n1107650\n806330\n1804240\n1123\n2001\n6110520\n1164660\n957820\n2315940\n1324\n2002\n6856145\n1857870\n109284.99999999999 2818650\n1108\n2003\n9415200\n1681740\n2266790\n3040170\n1267\n2004\n12084040 2724430\n2852920\n3476240\n1894\n2005\n12402400 2766710\n3138160\n3733390\n1535\n2006\n76276110 6662980\n15239750\n20734980 9127\n2007\n15843730 1793390\n3829060\n6196120\n2075\n2008\n25864870 6076600\n4467500\n9935500\n3192\n2009 3\n49498930 15124740 6567450\n13040290 3373\n2010 3\n37589560 7794060\n6444450\n13219030 2810\n2011 3\n39389160 8520450\n6820640\n13205620 2710\nSources:\nCentral Bank\nof Nigeria\nAnnual\nSurvey and\nNational\nInsurance\nCommission\n(NAICOM)\nAnnual\nReports\nNotes: CBN\nhad not\nconducted\nInsurance\nAnnual\nSurvey since\n1999\n11970 -\n1998 data\nwere\nsourced\nfrom Central\nBank of\nNigeria\nAnnual\nSurvey\n2From 1999,\nthe\nbreakdown\nof\nexpendicture\nwere\nextracted\nfrom\nNAICOM\nAnnual\nReports\n3Revised\n(NAICOM\nAnnual\nReport,\n2011)\nTable\nA.6.4:\nBreakdown\nof Total\nAssets of\nInsurance\nCompanies\n(N'\nMillion)\nYear\nGeneral Business\nLife\nTotal\n1996\n21332.84\n7602.09\n28934.93\n1997\n29312.5\n8615.68\n37928.18\n1998\n30847.77\n10603.45\n41451.22\n1999\n34616.78\n15514.87\n50131.65\n2000\n41495.519999999997 20104.48\n61600\n2001\n51674.03\n26386.45\n78060.47999999\n2002\n51933.72\n33322.01\n85255.73000000\n2003\n74386.41\n49880.959999999999 124267.37\n2004\n77730.14\n63491.89\n141222.03\n2005\n130402.53\n72710.59\n203113.12\n2006\n219086.67\n88455.94\n307542.61\n2007\n302262.83\n125234.33\n427497.1600000\n2008 1\n386016.4\n187138.06\n573154.46\n2009 1\n388350.69\n198108.85\n586459.54\n2010 1\n391741.6\n193274.19\n585015.79\n2011\n407432.22\n213662.92\n621095.14\nSource:\nNAICOM\nReports\nNote:\n1Revised\n(NAICOM\nAnnual\nReport,\n2011)\nTable A.6.5:\nTotal\nInsurance\nBusiness\nInvestments\n(N' Million)\nYear\nGovernment\nSecurities\nStocks & Bonds\nReal Estate &\nMortgage\n1996\n1546.16\n4047.81\n2523.19999999\n1997\n2012.01\n4095.38\n2683.5\n1998\n4145.88\n3633.17\n211.95\n1999\n2987.21\n4174.04\n332.65\n2000\n3558.95\n4992.87\n282.339999999\n2001 1\n3842.71\n6786.26\n359.33\n2002\n3752.08\n8350.85\n960.31\n2003 1\n4489.21\n11490.31\n14272.79\n2004 1\n4169.09\n20071.86\n21832.18\n2005\n4178.0600000000004 61800.82\n33788.15\n2006\n4858.1000000000004 121813.13\n45186.77\n2007 1\n20914.810000000001 222278.92\n45331.91\n2008 2\n21374.935820000002 227169.05624000001 46329.2120200\n2009 2\n21845.184408040004 232166.77547728\n47348.4546844\n2010 2\n22325.778465016883 237274.44453778016 48390.1206874\n2011 2\n22816.945591247255 242494.48231761134 49454.7033426\nSource:\nNAICOM\nReports\nNote:\n1Revised\n(NAICOM\nAnnual\nReport,\n2011)\n2Provisional\nTable\nA.7.1:\nSelected\nFinancial\nDeepening\nIndicators\nYear\nMoney Supply2 (M2)\n(N' Million)\nCredit to Private\nSector2 (N' Million)\nGDP at Current B\nPrices (N' Million\n1981\n14471.166666666666 8570.0500000000011 94325.02188909\n1982\n15786.741666666669 10668.341666666667 101011.2258063\n1983\n17687.924999999999 11668.041666666666 110064.0325368\n1984\n20105.941666666666 12462.933333333334 116272.1831873\n1985\n22299.241666666665 13070.341666666667 134585.5946864\n1986\n23806.399999999998 15247.450000000003 134603.3212250\n1987\n27573.583333333332 21082.991666666665 193126.2035533\n1988\n38356.799999999996 27326.416666666668 263294.4591011\n1989\n45902.883333333331 30403.216666666671 382261.4860783\n1990\n52857.024999999994 33547.700000000004 472648.7450671\n1991\n75401.175000000003 41352.458333333336 545672.4112709\n1992\n111112.31431586668 58122.946707604184 875342.5183171\n1993\n165338.74903876081 127117.71006025917 1089679.716564\n1994\n230292.59533829082 143424.20840868165 1399703.220237\n1995\n289091.06826094998 180004.75994529083 2907358.180301\n1996\n345853.96302209416 238596.56383301585 4032300.338297\n1997\n413280.12874556083 316207.08122229832 4189249.771037\n1998\n488145.78616809909 351956.19148720079 3989450.282097\n1999\n628952.16046613676 431168.35551063489 4679212.050583\n2000\n878457.27378138236 530373.30355560745 6713574.835460\n2001\n1269321.6122086474 764961.51875191682 6895198.326750\n2002\n1505963.5\n930493.92499999993 7795758.354547\n2003\n1952921.1944166666 1096535.5649999999 9913518.186719\n2004\n2131818.9816774447 1421664.0323878631 11411066.90590\n2005\n2637912.7306666668 1838389.9259166664 14610881.44790\n2006\n3797908.9755059485 2290617.7580883321 18564594.73\n2007\n5127400.702273746\n3668657.823863212\n20657317.66668\n2008\n8008203.9499551719 6920498.7505434304 24296329.28636\n2009\n9411112.2489084415 9102049.1088738423 24794238.65635\n2010\n11034940.929925786 10157021.17683167\n33984754.12956\n2011 1\n12172490.283057844 10660071.836505456 37409860.61058\n2012\n13895389.12757512\n14649276.457122438 40544099.93881\nSources:\nCentral\nBank of\nNigeria\nand\nNational\nBureau of\nStatistics\nNotes:\n1Revised\n2Figures\nare\nannual\naverages", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Annual_Reports/2012 Statistical Bulletin Financial Statistics.pdf"}
{"doc_id": "4bd8d6044a0d024a88fb22f2ec00df5f", "text": "PRESS RELEASE \nCENTRAL BANK OF NIGERIA \nCOMMUNIQUE NO. 35 OF THE MONETARY POLICY \n COMMITTEE IN MAY, 2004 \n \nIn keeping with the Bank’s policy of transparency in the conduct of \nmonetary and financial policies, the Central Bank of Nigeria hereby publishes \nthe summary of the deliberations and decisions of its Monetary Policy \nCommittee meeting, held in May, 2004. The Committee met once to review \ndevelopments in the macroeconomy and financial markets. \n \n2. \nIn April, 2004, the overall performance of the economy was mixed. \nAlthough the growth in money supply (M2) was broadly on target, the rate of \ninflation continued to accelerate. The pressure on the naira, however, \nmoderated, as the level of gross official external reserves rose. Moreover, the \nmoney market remained relatively calm, with both deposit and lending rates \nrising only moderately. \n \n3. \nThe report from the Federal Office of Statistics (FOS) indicated that in \nMarch, 2004, the inflation rate, on moving average basis, rose to 17.8 per \ncent from 16.5 per cent, in the preceding month. The annualized month-on-\nmonth inflation rate was 22.5 per cent, down from 24.8 per cent in the \npreceding month. The continued rise in the inflation rate was traced to \ndevelopments in the non-food index, largely reflecting the lag-effect of the \nderegulation of the down-stream petroleum sector on production cost, as well \nas the import prohibition, among other causes. \n \n \n2\n4. \nThe rapid growth in the monetary aggregates, which commenced in \nFebruary, 2004, moderated slightly in April. In the month under review, the \nbroad money stock (M2) increased by 1.2 per cent, compared with the 1.7 per \ncent growth recorded in the preceding month. The cumulative growth of \nbroad money over the end-December, 2003 level was 7.0 per cent. Narrow \nmoney (M1) and base money rose only marginally by 0.1 and 0.6 per cent, \nrespectively. The main expansionary factor of money supply was the rise in \nthe foreign assets (net) of the banking system, which was moderated by the \nsubstantial fall in bank credit to the domestic economy, especially to \ngovernment. \n \n5. \nAvailable data on money market developments indicated a general \nincrease in bank deposit and lending rates. In the month under review, the \naverage inter-bank call rate rose by 1.07 percentage points to 15.89 per cent, \nover the level in March, 2004. Also, the spread between average savings \ndeposit and maximum lending rates widened only marginally from 15.42 to \n15.45 per cent. \n \n6. \nIn April, 2004, the demand for foreign exchange was moderately higher \nthan in the preceding month, with the daily average sales rising to US$34.54 \nmillion from US$31.00 million in March, 2004. Arising from the increased \nforeign exchange inflow, the naira appreciated in all segments of the foreign \nexchange market. At the Dutch Auction System segment, it appreciated to \nN133.4714 from N134.4200 per US$1.00, while in the Bureaux de Change, \n \n3\nthe naira strengthened from N139.7604 to N138.8523 per US$1.00. The level \nof official external reserves rose further to US$10.88 billion, up from \nUS$10.49 billion at end-March, 2004. \n \n7. \nThe Committee viewed with serious concern, the escalation in the rate \nof inflation and decided to embark on partial withdrawal of public sector funds \nwith the deposit money banks, as a strategy for mopping up excess liquidity in \nthe system. The Committee noted that developments in the macroeconomy \nwill continue to be monitored, with a view to taking further policy action, if the \nneed arises. \n \n \nJames K.A. Olekah, \nSecretary, \nMonetary Policy Committee, \nCentral Bank of Nigeria, \nAbuja. \n \n \n31st May, 2004", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/mpc-05-04.pdf"}
{"doc_id": "5d43359f35fdc1393644ffea1f08f48e", "text": "1 \n \n \n \nCENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 130 OF THE MONETARY \nPOLICY COMMITTEE MEETING HELD ON THURSDAY 28th MAY 2020 \n \nThe Monetary Policy Committee (MPC) met on 28th May, 2020 in an \nenvironment of severe macroeconomic shock caused by the fatal spread of \nthe Novel COVID-19 Pandemic, which first started as a health crisis in \nDecember 2019 in China and quickly morphed into a global economic crisis in \nthe ensuing months. The pandemic induced economic shock is mainly \ncharacterised by disruptions to the global supply chain, on account of the \nmitigating measures put in place by various governments to contain the \nspread of the disease. The effects on the global economy have been \nunprecedented and indeed severe. These include significant stock market \ncrashes; exchange rate volatilities; rising corporate and public debt; rising \nlevels of unemployment; tightening financial conditions; capital flow reversals; \nand negative shocks to commodity prices, to mention a few. \nUnder this period of economic crisis, the Committee assessed the \ndevelopments in the global and domestic economic environments in the first \nfive (5) months of 2020, and the outlook for the rest of the year. Ten (10) \nmembers of the Committee were in attendance. \nGlobal Economic Developments \nThe Committee reviewed developments in the global economy, noting the \nswift and widespread monetary and fiscal stimulus responses to mitigate the \neconomic crisis and avoid economic recession. They observed that since the \nduration of the pandemic is unknown, forecasts for global growth projection \n \n2 \n \n \nfor 2020 differs amongst institutions and central banks. While the IMF output \ngrowth forecast for 2020 was downgraded by 3.0 per cent in 2020, compared \nwith an initial growth projection of 3.3 per cent, the forecast by the \nOrganisation for Economic Co-operation and Development (OECD) showed \na moderation in global output growth from 2.9 per cent in 2019 to 2.4 per cent \nin 2020 and 3.3 per cent in 2021. Most central banks in Emerging and \nDeveloping Economies (EMDEs) have mixed forecasts, reflecting the intensity \nof the demand and supply shocks, as well as the effectiveness of the mitigating \nmeasures and stimulus by their monetary and fiscal authorities. \nThe MPC noted that inflation in most Advanced Economies remained largely \nbelow their 2.0 per cent long-run targets. This was partly due to supressed \naggregate demand, occasioned by the lockdown, with resulting low \nexpectations of future income, forcing spending to be directed to only \nessential goods and services. \nThe Committee, however, noted that, although, recent monetary decisions in \nmost advanced economies had been accommodative, portfolio flow \nreversals from Emerging and Developing Economies had continued, indicating \ngeneral rebalancing of portfolios toward cash and gold as safe assets by \ninvestors. This development has resulted in renewed pressure on exchange \nrates of some Emerging and Developing Economies with a likely pass-through \nto their domestic prices. In addition, a likely medium-term impact of these \nsynchronized liquidity injections and other forms of monetary accommodation \nis the compounding of the already huge global corporate and public debt \nportfolios which may result in a spike in global debt post-COVID-19. \nDomestic Economic Developments \nAvailable output data from the National Bureau of Statistics (NBS) showed that \nreal Gross Domestic Product (GDP) grew by 1.87 per cent in the first quarter of \n2020 compared with 2.55 and 2.10 per cent in the preceding and \ncorresponding quarters of 2019, respectively. This was driven largely by 5.06 per \n \n3 \n \n \ncent growth in the oil sector and 1.55 per cent in the non-oil sector. The \neconomy, however, expanded by 2.27 per cent in 2019, the most since 2015, \ncompared to 1.91 per cent in 2018. \nThe Manufacturing and non-Manufacturing Purchasing Manager’s Indices \n(PMIs) declined significantly to 42.4 and 25.3 index points, respectively, in May \n2020, compared with 51.1 and 49.2 index points in March 2020. The contraction \nin the manufacturing and non-manufacturing PMIs was attributed to slower \ngrowth in production, new orders, employment level, raw materials and input \nprices. The employment level index for the manufacturing and non-\nmanufacturing PMIs also contracted further to 25.5 and 32.0 index points, \nrespectively, in May 2020 compared with 47.1 and 47.3 index points in March \n2020. Generally, the purchasing managers’ activities in May 2020, were largely \naffected by the lockdown of the global economy to curtail the spread of the \nCOVID-19 pandemic. \nIn the light of the above developments, the Monetary Policy Committee \ncommended the Bank’s effort on the recent measures put in place to mitigate \nthe economic impact of the twin shocks on the Nigerian economy. The \nCommittee expressed support for the sustenance of the broad-based stimulus \nand liquidity facilities to curb the adverse effects of the shocks. \nThe Committee also noted with concern the persisting uptick in inflation for the \neighth consecutive month as headline inflation (year-on-year) rose to 12.34 per \ncent in April 2020 from 12.26 per cent in March 2020. The uptick largely \nreflected the increase in both the food and core components, which rose to \n15.03 and 9.98 per cent in April 2020 from 14.98 and 9.73 per cent in March \n2020, respectively. The MPC noted that the recent increase in inflationary \npressure was largely due to a combination of factors including; disruptions in \nsupply chain owing to restrictions on inter-state travels; reduced domestic \nsupply of foreign exchange; continued impact of deteriorating domestic \ninfrastructure; and spillover effects of the Pandemic on global supplies, \namongst others. Against this background, the Committee emphasized the \n \n4 \n \n \nneed to sustain measures already put in place to maintain price stability. It \nnoted that as the supply of goods and services increase, following the gradual \neasing of the lockdown and return of economic activities, there would be \nincrease in aggregate supply. \nOn monetary aggregates, the Committee noted the marginal growth in broad \nmoney (M3) to 2.66 per cent in April 2020 from 2.42 per cent in March 2020, \nlargely due to increases in Net Domestic and Foreign Assets. The growth in M3 \nwas, however, significantly below the indicative benchmark of 13.09 per cent \nfor 2020. Aggregate Net Credit also grew significantly by 8.07 per cent in April \n2020 compared with 4.90 per cent in March 2020, although this remained \nbelow the indicative benchmark of 16.85 per cent for the year. The \nCommittee, therefore, observed that there was relative scope for increased \nmoney supply to fund economic activities and boost output recovery. \nIn the review period, money market rates remained relatively stable reflecting \nthe prevailing high liquidity condition in the banking system. Accordingly, \nweighted average Inter-bank call and Open Buy Back (OBB) rates decreased \nto 7.33 and 5.52 per cent in April from 10.29 and 11.78 per cent in March 2020, \nrespectively. \nThe Committee observed that though the equities market was largely bearish \nin the first quarter of 2020, moderate improvement continued to be recorded \nsince the beginning of the second quarter. Consequently, the All-Share Index \n(ASI) and Market Capitalization (MC) increased by 18.33 per cent a piece, \nbetween end-March 2020 and May 22, 2020. This bullish trend reflected \nimproved investor sentiments in response to the mitigating measures \nintroduced at the onset of the pandemic by the monetary and fiscal \nauthorities and positive outlook in the global oil market. The MPC expressed \nconfidence that the current monetary and fiscal policy measures would further \nstrengthen investor confidence. \nThe Non-Performing Loans (NPLs) ratio decreased to 6.58 per cent at end-April \n2020 compared with 10.95 per cent in the corresponding period of 2019 due \n \n5 \n \n \nlargely to recoveries, write offs and disposals. The development was adjudged \nby the Committee as a sign of reasonable stability in the banking system and \nurged the Bank to maintain its toolkit of prudential and regulatory measures to \nensure that NPLs stay below the prudential benchmark of 5.0 per cent. \nOutlook \nThe overall medium-term outlook for the global economy remains broadly \nuncertain as the COVID-19 pandemic and associated containment measures \ncontinue to disrupt normal economic activities across the globe. The global \neconomy remains largely confronted with several headwinds, some of which \ninclude: weak aggregate demand due to declining consumer and investor \nconfidence; disruption in global supply chains; shocks to oil and other \ncommodity prices; continued lull in global financial markets; adverse shocks to \nglobal capital flows; as well as rising corporate debt in the advanced \neconomies and public debt in some Emerging Market and Developing \nEconomies. \nAvailable data on key macroeconomic variables in the domestic economy \nindicate that the economy achieved a positive output growth during the first \nquarter of 2020. The Committee noted that even if the lag effects of COVID-19 \nresult in a low negative output growth in the second quarter of 2020, it could \nquickly be reversed to avoid a recession by Q3 2020 based on the far-reaching \nmeasures taken by the monetary and fiscal authorities to mitigate the \ncombined effects of the COVID-19 pandemic and oil price shock. Projections \nby both the IMF and Federal Government indicate that the economy would \ncontract in 2020 by -3.40 per cent. Given more recent developments, \nhowever, CBN Staff projections indicate a somewhat less pessimistic range of \ncontraction. This forecast is underlined by the measures to curtail the rapid \nspread of COVID-19; improvement in crude oil prices which stood at about \nUS$34.8 per barrel as at 28th May 2020. The moderate recovery in crude oil \nprices would reduce the pressure on the external reserves and government \n \n6 \n \n \nrevenue. Headwinds to growth, however, remains the legacy issues of the \npersistent infrastructural and security challenges. \nThe Committee’s Considerations \nCentral to the Committee’s considerations were the impact of the COVID-19 \npandemic, the oil price shock and the likely short to medium-term \nconsequences on the Nigerian economy. In particular, the Committee \nacknowledged the gradual improvement in macroeconomic variables \nparticularly the improvement in the equities market, the containment \nmeasures of the COVID-19 induced health crisis, as well as, the impact of the \nincrease in crude oil price on the external reserves. \nThe Committee noted the stability in the banking system shown by the increase \nin total asset by 18.8 per cent and total deposits by 25.52 per cent (year-on-\nyear). The performance of the Loan-to-Deposit Ratio (LDR) policy which was \nintroduced in July 2019 showed that total credits increased by N3.1 trillion or \n20.45 per cent, with manufacturing, retail & consumer loans, general \ncommerce and agriculture as major beneficiaries. \nThe Committee recognised that under the N100 billion Healthcare Sector \nIntervention Fund, the Bank has approved and disbursed N10.15 billion for \nsome projects for the establishment of advanced diagnostic and health \ncentres and the expansion of some pharmaceutical plants for essential drugs \nand intravenous fluids. As part of the N1trillion intervention targeted at \nAgriculture and Manufacturing firms, the Bank has disbursed N93.2bn under \nthe Real Sector Support Fund to boost local manufacturing and production \nacross critical sectors. This consists of over 44 greenfield and brownfield \nprojects. The Bank has also approved N10.9 billion to 14,331 beneficiaries under \nthe N50 billion Targeted Credit Facility for households and SME's, out of which \nN4.1billion has been disbursed to 5,868 successful beneficiaries. The Committee \ndirected Management to reach out to the banks to encourage them to offer \n \n7 \n \n \nand disburse these funds to those priority sectors of the economy so as to \nstimulate aggregate demand and create more jobs. \nThe MPC appraised the Federal Government’s resolve to maintain the core of \nits spending plans for 2020 as this remained vital for the attainment of the \nmuch-needed economic recovery. It also applauded the government’s \nefforts at revising the oil price benchmark downwards to reflect prevailing \nconditions. It reiterated the urgent need for the Government to improve tax \ncollections, through a gradual, but purposeful diversification of the economy’s \nrevenue base. The Committee also urged Government to remain focused on \nthe implementation of the revised 2020 - 2022 Medium Term Expenditure \nFramework (MTEF) as the basis for sustainable fiscal policy. \nThe MPC emphasized the need for Government to work towards a gradual \nreopening of the economy in line with recommendations of the Presidential \nTask Force (PTF) and advice from medical experts, insisting that efforts must be \ndirected at saving not only lives but also livelihoods. This is to enable the \nresumption of economic activities necessary to stimulate growth, accelerate \nthe pace of recovery and restore livelihoods, particularly the vulnerable in our \nsociety. \nOn prices, the MPC expressed concern about the heightened inflationary \npressure attributed to a combination of monetary and structural factors. While \nprice stability remains the Bank’s primary mandate, the Committee expressed \nthe need for a balanced approach in supporting growth in the face of rising \ndomestic prices. \nWith respect to output, the Committee urged the Federal Government to \ncontinue exploring options of partnership with the private sector to fund \ninvestment in infrastructure. This would aid employment generation, support \nproduction and boost output growth. The Committee also reiterated the need \nfor foreign and domestic investments to support growth in key sectors of our \neconomy, including Nigerian auto manufacturing, aviation and rail industries. \n \n8 \n \n \nThe Committee expects that on the backdrop of the various stimulus packages \nand increased credit at lower interest rates, the impact of the COVID-19 \npandemic would be relatively less severe than had earlier been expected and \nthe reversal in growth deceleration would become more optimistic. \nThe Committee commended the Bank’s role in effective oversight of the \nbanking system, as evidenced by the relative stability in key financial \nsoundness indicators and systemic resilience of the banking sector, in the face \nof severe external shocks. \nOn the choice before the Committee, the MPC observed the weakening of \nthe global macroeconomic environment due to the adverse impacts of \nCOVID-19 and drop in crude oil prices, which has resulted in negative output \nin most economies. The MPC also feels that the logical expectation is that to \nensure that the global economy reverses from the recession timely, what policy \nmakers must do is to take actions that will necessarily stimulate growth and \nrecovery. For Nigeria, although the Q1 2020 GDP turned out pleasantly at 1.87 \nper cent and rate of inflation somewhat moderated, Nigeria may escape a \nrecession if concerted efforts are sustained to stimulate output. \nAccordingly, on balance on whether to hold, loosen, or tighten, the MPC was \nof the view that tightening of policy stance is for now inappropriate. This is \nbecause tightening will result in further contraction of aggregate demand, \nleading to decline in output. Tightening will also increase cost of credit and \nreduce investment and impact negatively on output growth. \nAs regards the option of holding previous policy stance, the MPC felt that a \nhold may indicate that the monetary authorities are insensitive to prevailing \nweak economic conditions. There is, therefore, the need to signal a direction \ntowards immediate recovery. The Monetary Policy Committee also feels that \na hold decision may slowdown the trajectory of the weakened economy, \ncompared with a loosening stance, thereby slackening output growth, \n \n9 \n \n \nOn loosening, whereas the Monetary Policy Committee is concerned that \nexcess liquidity engendered by loosening may overshoot the economy’s \nabsorptive capacity and accelerate inflationary pressure, it nevertheless feels \nthat given the slow rate of acceleration of inflation, the accommodative \nstance will stimulate aggregate demand and supply in the short term. This is \nbecause an accommodative stance, through a lowering of the policy rate will \nstimulate credit expansion to critically important sectors that will also stimulate \nemployment and revive economic activity for quick growth recovery. \nThe MPC noted that if all stimulus packages already announced by the Bank \nsuch as concessionary rates, loan restructuring, and targeted loans to \nagriculture, manufacturing and health sector are well utilized, this will produce \nthe desired impetus needed to boost economic recovery in Nigeria. \nThe Committee’s Decision \nAfter reviewing the three options, the MPC noted that the imperative for \nmonetary policy at the May 2020 meeting was to strike a balance between \nsupporting the recovery of output growth while maintaining stable price \ndevelopment across inflation, the exchange rate and market interest rates. To \nthis end, the Committee noted that the Cash Reserve Requirement (CRR) was \nrecently adjusted upwards as a means of tightening the stance of policy. In its \nresponse to the COVID-19 pandemic, however, the Bank reduced interest \nrates associated with all CBN interventions from 9 to 5 per cent. Increasing MPR \nat this stage will thus be counter-intuitive and will result in upward pressure on \nretail market rates. \nThe Committee maintained that although a sharp decline in output growth is \nexpected in Q2 2020 and maybe the third quarter, if the current stimulus \ninitiatives are properly implemented, the economy would reverse to positive \ngrowth by the fourth quarter. Hence the optimism on the part of the \nCommittee that the economy may not slide into recession. \n \n10 \n \n \nIn view of the foregoing, the Committee decided by a unanimous vote to \nreduce the Monetary Policy Rate (MPR) and to hold all other policy parameters \nconstant. Seven (7) members voted for a reduction of the policy rate by 100 \nbasis points, two (2) members by 150 basis points and one (1) member by 200 \nbasis points. \n \nIn summary, the MPC voted to: \nI. Reduce the MPR to 12.5 per cent; \nII. Retain the Asymmetric Corridor of +200/-500 basis points around the MPR; \nIII. Retain the CRR at 27.5 per cent; and \nIV. Retain the Liquidity Ratio at 30 per cent. \n \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n28th May 2020", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No 130 of the Monetary Policy Committee Meeting of May 28 2020.pdf"}
{"doc_id": "692cbb72f05bd4edaf5e53a82e5a4617", "text": "1 \n \n \nCENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 123 OF THE \nMONETARY POLICY COMMITTEE MEETING OF MONDAY 25TH AND \nTUESDAY 26TH MARCH, 2019 \nBackground \nThe Monetary Policy Committee (MPC) met on the 25th and 26th \nMarch, 2019; against the backdrop of developments in the global \nand domestic economic environments in the first quarter of 2019. \nEleven (11) members of the Committee were present. \n \nGlobal Economic Developments \nThe Committee noted with concern the weakening performance \nof global output growth at the end of 2018 and observed that \ndevelopments in the first quarter of 2019 were characterised by \nlegacy headwinds from the second half of 2018. These include: \nthe continued trade war between the US and China, policy \nuncertainty \namongst \nadvanced \neconomy \ncentral \nbanks; \npersisting \nuncertainties \nsurrounding \nBREXIT \nnegotiations; \nvulnerabilities in major financial markets and rising public debt in \nsome Emerging Market and Developing Economies (EMDEs). \nConsequently, global output growth for 2019 was downgraded by \nthe IMF from 3.7 per cent to 3.5 per cent. \n2 \n \nPrice \ndevelopments \nacross \nmajor \nadvanced \neconomies, \ncontinued to moderate in the review period alongside signals of \nweakening output growth. In the light of this development, the US \nFed, the Bank of England and the European Central Bank \nretreated \nfrom \ntheir \nearlier \nstance \nof \nmonetary \npolicy \nnormalisation in favour of a monetary policy accommodation. This \nled to volatilities in the financial markets of the advanced \neconomies as the balancing of portfolios moved capital from the \nequities to the bonds market. \nThe MPC noted the moderate appreciation of the US dollar \nagainst the currencies of most advanced and emerging market \neconomies. It further noted the trend of declining long term yields \nin the US, and the likelihood that capital flows may be redirected \nto EMDEs in the medium term. \nDomestic Output Developments \nOutput data from the National Bureau of Statistics (NBS) indicate \nthat real Gross Domestic Product (GDP) grew by 2.38 per cent in \nQ4 2018 from 1.81 and 2.11 per cent in the previous quarter and \ncorresponding period of 2017. The major impetus for growth came \nfrom the non-oil sector, which grew by 2.7 per cent in Q4 2018, \nwhile the oil sector contracted by 1.62 per cent. \nThe Committee welcomed the continued positive sentiments in \nthe \nManufacturing \nand \nNon-Manufacturing \nPurchasing \nManagers’ Indices (PMIs) for the 24th and 23rd consecutive months \nin March 2019. The manufacturing PMI rose by 57.4 index points \n3 \n \ncompared with 57.1 in the previous month. Similarly, the non-\nmanufacturing PMI increased by 58.5 index points compared with \n58.4 in February 2019. The increase in both measures of PMI was \ndriven by increases in production, employment, raw material \ninventories and new orders. This improved outlook was attributable \nto the continued stability in the foreign exchange market, various \ninterventions by the Bank in the real sector and the effective \nimplementation of the Economic Recovery and Growth Plan \n(ERGP) by the Federal Government. Furthermore, on the current \nmeasure of national output, the MPC noted the need to rebase \nthe GDP, an exercise which was last carried out in 2010. \n \nDevelopments in Money and Prices \nThe Committee noted that broad money supply (M2) contracted \nby 1.98 per cent in February 2019, below its level at end-\nDecember 2018. Net Foreign Assets (NFA) contracted by 7.47 per \ncent in February 2019 relative to its level at end-December 2018. In \ncontrast, M3 grew by 4.31 per cent in February 2019 compared \nwith its level at end-December 2018. Net Domestic Credit also \ngrew by 10.68 per cent in February 2019. The growth in NDC was \naccounted for by the increase in credit to Government which \ngrew by 17.20 per cent in February 2019 over its level at end-\nDecember 2018. Credit to the private sector also rose by 6.41 per \ncent compared with its growth benchmark of 9.41 per cent. Given \nthe positive trajectory, the Committee urged the Management of \nthe CBN, to sustain the various initiatives of the Bank, particularly \n4 \n \nthe partnership between the Bankers Committee and the Nigeria \nIncentive-Based Risk Sharing System for Agricultural Lending \n(NIRSAL) aimed at establishing a national microfinance bank to \ncater for the MSMEs of the economy. \nThe Committee noted the continued moderation in inflation as \nheadline inflation (year-on-year) declined further to 11.31 per cent \nin February 2019 from 11.37 and 11.44 per cent in January 2019 \nand December 2018, respectively. The decrease in headline \ninflation was driven mainly by food inflation, which declined to \n13.47 per cent in February 2019 from 13.51 per cent in January \n2019, while core inflation declined marginally to 9.80 per cent from \n9.91 per cent in the previous month. On a month-on-month basis, \nheadline, food and core inflation declined to 0.73, 0.82 and 0.65 \nper cent in February 2019, respectively, from 0.74, 0.83 and 0.81 \nper cent in January 2019. The Committee noted the upside risks to \ninflation to include; high cost of energy, infrastructure constraints, \ninsecurity in some parts of the country; and anticipated increase \nin liquidity from the late implementation of the 2018 budget, and \nnoted that most of these factors were outside the ambit of \nmonetary policy. The MPC, therefore, urged the Federal \nGovernment to sustain its current effort in stimulating output \ngrowth by executing the policies approved in the ERGP. \nThe net liquidity position reflected the impact of OMO auctions, \nforeign exchange interventions, statutory allocations to states and \nlocal governments, and maturing CBN Bills. Consequently, the \naverage Inter-bank call rate increased to 16.45 per cent in \n5 \n \nFebruary 2019 from 15.00 per cent in January 2019. The Open Buy \nBack (OBB) rate, however, declined marginally to 18.79 per cent in \nFebruary 2019 from 19.71 per cent in January 2019. The interbank \ncall rates, however, closed at 8.0 per cent on March 8, 2019, while \nthe OBB closed at 14.39 on March 22, 2019. \nThe Committee noted that in spite of the recent upsurge in capital \ninflow into the economy, the All-Share Index (ASI) and Market \nCapitalization (MC) continued to decline, reflecting global \nsentiments in portfolio rebalancing from equities to fixed income \nsecurities. This generally reflected the perceived risk at the long \nend of the yield curve. \nThe Committee noted with satisfaction, the continued stability in \nthe foreign exchange market at the Investors’ and Exporters’ (I&E) \nwindow of the market. In particular, it also observed the moderate \nimprovement in oil prices and stable accretion to external \nreserves, which stood at US$45.2 billion as at March 21, 2019, a \n6.73 per cent increase from US$42.35 billion at end-February 2019. \n \n \nThe Overall Outlook and Risks \nThe medium term outlook for the global economy continues to be \nuncertain \nwith \nindications \nof \nincreasing \nmacroeconomic \nvulnerabilities and downward revision of the forecast for global \noutput growth. \n6 \n \nOn \nthe \ndomestic \neconomy, \navailable \ndata \non \nkey \nmacroeconomic indicators for output growth in the first quarter of \n2019, and forecasts for the rest of the year, suggests continued \npositive outcomes. Based on recent projections, the economy is \nexpected to grow by 2.0 per cent (IMF), 2.2 per cent (World Bank) \nand 2.74 per cent (CBN). The projection is hinged on: the \nenhanced flow of credit to the real sector; sustenance of a stable \nexchange \nrate; \nmoderating \ninflation \nrate; \nCBN \nspecial \ninterventions in growth-enhancing sectors, especially, agriculture \nand non-agricultural SMEs; improved growth in the non-oil sector \nand the effective implementation of the ERGP by the Federal \nGovernment, amongst others. The Committee expressed optimism \nthat the establishment of the NIRSAL National Microfinance Bank \nand the enactment of the Secured Transactions in Movable Assets \nAct 2017 will stimulate lending to small and medium enterprises. \n \nCommittee’s Considerations \nThe Committee observed the tepid output growth in 2018, but \nnoted with satisfaction that it strengthened in the last quarter of \n2018 as well as the positive forecast for 2019. It further noted with \ngreat satisfaction, the continued moderation in all measures of \ninflation, sustained stability in the exchange rate and the robust \nlevel of external reserves. It commended the recent upsurge in \ncapital inflows into the economy, noting this to be a \ndemonstration of sustained confidence by the foreign investor \ncommunity in the Nigerian economy. The Committee was, \n7 \n \nhowever, not unmindful of developments in the global economy, \nnoting the recent slowdown in growth in some advanced \neconomies and the dovish stance of some major central banks as \nan early warning sign of broader macroeconomic vulnerabilities. \nIt, therefore, underscored the need to monitor the trend in capital \nflows and the continued downturn in the equities market, noting \nthat the recent surge in portfolio inflows were concentrated in the \nmoney market. \n \nThe Committee noted the relative volatility in oil prices and its \nimpact on accretion to reserves which could easily undermine the \nstability observed in the foreign exchange market. It, however, \nnoted that current developments in the oil futures market indicate \nthat oil prices will remain considerably above the Federal \nGovernment’s \n2019 \nbudget \nbenchmark. \nThe \nCommittee, \ntherefore, urged the Federal Government to strengthen its current \nrevenue mobilization efforts as well as explore additional sources \nof revenue in order to improve fiscal buffers. It further urged the \nFederal Government to sustain its implementation of the ERGP, \nwhile ensuring that growth is all inclusive. It reiterated the need to \nconcentrate effort on addressing the problem of weak power \ninfrastructure, as well as support domestic manufacturing. The \nCommittee also called on all relevant institutions of the \ngovernment to address the menace of smuggling and dumping \nof goods into Nigeria; and encouraged the Bank to continue to \nexplore available scenarios to deal with the activities of economic \nand policy saboteurs, including those involved in dumping and \n8 \n \nsmuggling, in a bid to accelerate domestic production of goods in \nNigeria. \n \nThe MPC noted the positive moderate outlook for growth and the \nrisks in the horizon. The Committee also noted that having \nachieved a relatively stable exchange rate with price stability, it is \nimperative that monetary policy should explore the next steps \nnecessary for enhancing growth, reducing unemployment and \ndiversifying the base of the economy. It further observed that per \ncapita income growth is very negligible, while aggregate \ndemand remains weak. Aggregate output also remains below the \npotential output level, implying sufficient headroom for non-\ninflationary growth. This new direction has, therefore, become \nimperative against the backdrop of the aftermath of the general \nnational elections and strong inflow of foreign direct and portfolio \ninvestments into the economy. \n \nThe Committee urged for the speedy passage of the other \naspects of the Petroleum Industry Bill (PIB) to fast track the \ndevelopment of the value chain in the sector and create \nemployment. It also welcomes the passage of the National \nMinimum Wage Bill by the National Assembly and call for its \nspeedy implementation in order to boost domestic aggregate \ndemand. \n \nThe Committee further observed that the performance of the \nmonetary aggregates were below their benchmarks, indicating \n9 \n \nheadroom \nfor \nmonetary \ngrowth. \nThe \nMPC \nnoted \nthe \nencumbrances and constraints imposed on fiscal policy and the \nassociated vulnerabilities as it has consistently failed to mobilise \nsufficient revenues to support development as enunciated in the \nERGP, leaving room for continued debt financing, not previously \nenvisaged. Against this backdrop, it is imperative for monetary \npolicy to provide the much needed leverage to support output \ngrowth and employment generation in the country. \n \nOn a more cautious note, the Committee expressed concern and \nsympathises with the fiscal authorities, over the growing fiscal \ndeficit, external debt and debt service, and urged the need to \nclosely monitor the public procurement process in order to \nimprove efficiency in public resource management. \n \nOn financial system stability, the MPC noted the improvements in \nkey financial soundness indicators and commended the Federal \nGovernment for the settlement of debt owed to oil marketers, \nwhich has considerably, helped in reducing the non-performing \nloans (NPLs) portfolio of the banking industry. The Committee, \ntherefore, urged the Government to expedite action in settling all \noutstanding contractor-related arrears so as to improve the NPLs \nposition and stabilise the banking system. In addition, the MPC \nreiterated the Bank’s commitment to improve credit delivery, \nespecially to small and medium scale enterprises, while \nacknowledging efforts by the Central Bank of Nigeria in \ncoordinating the de-risking of lending to the private sector \n10 \n \nthrough the collaboration between the Bankers’ Committee and \nNIRSAL. \n \nIn its consideration of the best monetary policy option, the \nCommittee noted the need for all agencies of Government to \nwork hard, not only in consolidating the growth so far achieved, \nbut also in ensuring that appropriate policies are put in place and \nimplemented to create jobs on a mass scale and diversify the \neconomy in a proper direction. In doing this, the policy options \nfacing the MPC at this meeting is a decision between retention of \nthe current stance of monetary policy or a slight loosening of the \npolicy rate, backed by the substantial stability of the major \nmacroeconomic indicators. The Committee felt that given the \nrelative stability in the key macroeconomic variables, there is the \nneed to signal a new direction that is pro-growth. \n \nIn its arguments, the Committee was convinced that doing this \nwould further uphold the Bank’s commitment to promoting strong \ngrowth by way of encouraging credit flow to the productive \nsectors of the economy. The MPC felt that signalling through \nloosening by a marginal reduction would serve to manage the \nsentiments in the capital markets owing to the wider spread in \nyields in the EMDEs, relative to the advanced economies. \nMoreover, the real interest rate in the country would still remain \npositive. \n \n \n11 \n \n \nThe Committee’s Decision \nIn light of the above, the MPC decided by a vote of six out of \neleven members to reduce the Monetary Policy Rate (MPR) by 50 \nbasis points. Two members voted to reduce the MPR by 25 basis \npoints, while one member voted to reduce it by 100 basis points. \nTwo members, however, voted to hold the MPR at its current level. \nTen members voted to hold all other parameters constant, while a \nmember voted to reduce the Cash Reserve Ratio (CRR) by 100 \nbasis points from 22.5 to 21.5 per cent. \nIn summary, the MPC voted to: \nI. Adjust the MPR by 50 basis points from 14.00 to 13.50 per cent; \nII. Retain the asymmetric corridor of +200/-500 basis points around \nthe MPR; \nIII. Retain the CRR at 22.5 per cent; and \nIV. Retain the Liquidity Ratio at 30 per cent. \n \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n25th March 2019", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No. 123 of the Monetary Policy Committee Meeting of Monday 25th and Tuesday 26th March, 2019.pdf"}
{"doc_id": "e40a99bae6ae8289da41d432860b133b", "text": "2014 \n \n \nCENTRAL BANK OF NIGERIA \nECONOMIC REPORT FOR THE FIRST \nHALF OF 2014 \n \n \n \nii \n \n \n \nCentral Bank of Nigeria \nCorporate Head Office \n33 Tafawa Balewa Way \nCentral Business District \nP. M. B. 0187 \nGarki Abuja \nWebsite: www.cbn.gov.ng \n \nTel: \n+234(0)946238707 \n \n+234(0)946238762 \n \n \n \n \n \n \n \n \n \n \n \n© 2014 Central Bank of Nigeria \n \nISSN 1597 - 2976 \n \n \n \n \niii \n \n \n \nVision \n \n“By 2015, be THE MODEL CENTRAL BANK delivering \nPRICE and FINANCIAL SYSTEM STABILITY and promoting \nSUSTAINABLE ECONOMIC DEVELOPMENT”. \n \n \nMission \n \nTo be proactive in providing a stable framework for the \neconomic development of Nigeria, through the \neffective, efficient and transparent implementation of \nmonetary and exchange rate policy, and \nmanagement of the financial sector. \n \n \n \n \niv \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTHE CENTRAL BANK OF NIGERIA \n \n \nEstablished by the Central Bank of Nigeria (CBN) Act of 1958, \nthe Principal objects of the Bank as contained in the new CBN \nAct, 2007 are to: \n ensure monetary and price stability \n issue legal tender currency in Nigeria \n maintain \nexternal \nreserves \nto \nsafeguard \nthe \ninternational value of the legal tender currency \n promote a sound financial system in Nigeria \n act as banker and provide economic and financial \nadvice to the Federal Government of Nigeria \n \n \n \nv \nMEMBERS OF THE BOARD OF DIRECTORS OF THE BANK \nAS AT JUNE 30, 2014 \n \n1. \nGodwin I. Emefiele \n \n- \nGovernor (Chairman) \n2. \nAdebayo A. Adelabu \n- \nDeputy Governor (Corporate Services) \n3. \nSarah O. Alade (Mrs), OON \n- \nDeputy Governor (Economic Policy) \n4. \nKingsley C. Moghalu, OON \n- \nDeputy Governor (Financial System Stability) \n5. \nSuleiman A. Barau, OON \n- \nDeputy Governor (Operations) \n6. \nAnastasia M. Daniel-Nwobia - \nDirector (Permanent Secretary, Federal Ministry of \nFinance) \n7. \nJonah O. Otunla - \nDirector (Accountant General of the Federation) \n8. \nMuhammad M. Kafarati \n- \nDirector \n9. \nCollins C. Chikeluba \n \n- \nDirector \n10. \nAnthony A. Adaba \n \n- \nDirector \n11. \nStephen O. Oronsaye, CFR \n- \nDirector \n12. \nAyuli Jemide \n \n- \nDirector \n \n \nYunusa M. Sanusi \n \n- \nSecretary to the Board \n \n \nMEMBERS OF THE COMMITTEE OF GOVERNORS OF \nTHE BANK AS AT JUNE 30, 2014 \n \n1. \nGodwin I. Emefiele \n \n- \nGovernor (Chairman) \n2. \nAdebayo A. Adelabu \n- \nDeputy Governor (Corporate Services) \n3. \nSarah O. Alade (Mrs), OON \n- \nDeputy Governor (Economic Policy) \n4. \nKingsley C. Moghalu, OON \n- \nDeputy Governor (Financial System stability) \n5. \nSuleiman A. Barau, OON \n- \nDeputy Governor (Operations) \n \n \nYunusa M. Sanusi \n \n- \nSecretary \n \n \n \nvi \nTABLE OF CONTENTS \n \n \n \n \n \n \n \n \n \n PAGE \nSummary \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \nxiv \n \n \n \n \n \n \n \n \n \n1.0 \nINTRODUCTION \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n1 \n \n \n \n2.0 OPERATIONS OF THE CENTRAL BANK OF NIGERIA .. \n.. \n.. \n2 \n \n \n \n2.1 Liquidity Management \n.. \n.. \n.. \n.. \n.. \n.. \n2 \n \n2.2 Monetary Policy Committee (MPC) Decisions \n.. \n.. \n.. \n3 \n2.3 \nDevelopments in the Payments system \n.. \n.. \n.. \n.. \n4 \n \n2.3.1 Retail Payments System \n.. \n.. \n.. \n.. \n.. \n5 \n \n \n2.3.1.1 Cheques \n.. \n.. \n.. \n.. \n.. \n.. \n5 \n \n \n2.3.1.2 Electronic Payments.. \n.. \n.. \n.. \n.. \n5 \n \n \n \n2.3.1.2.1 ATM Transactions .. \n.. \n.. \n.. \n7 \n \n \n \n2.3.1.2.2 Web Transactions. .. \n.. \n.. \n.. \n8 \n \n \n \n2.3.1.2.3 Point of Sale (PoS) Transactions .. \n.. \n9 \n \n \n \n2.3.1.2.4 Mobile Payments .. \n.. \n.. \n.. \n10 \n \n2.3.2 Wholesale Payments System.. \n.. \n.. \n.. \n.. \n11 \n \n2.3.2.1 Real Time Gross Settlement (RTGS) System \n.. \n11 \n \n \n2.3.2.2 Nigeria Interbank Settlement System Instant \nPayment (NIP) \n.. \n.. \n.. \n.. \n.. \n12 \n \n2.3.2.3 Nigeria Interbank Settlement System Electronic \nFund Transfer (NEFT) .. \n.. \n.. \n.. \n.. \n13 \n2.3.3 Currency Operations \n.. \n.. \n.. \n.. \n.. \n14 \n \n2.3.3.1 The Issue of Legal Tender .. \n.. \n.. \n.. \n14 \n \n2.3.3.2 Currency in Circulation (CIC) \n.. \n.. \n.. \n15 \n2.4 \nFinancial Sector Surveillance \n.. \n.. \n.. \n.. \n.. \n17 \n2.4.1 Banking Supervision \n.. \n.. \n.. \n.. \n.. \n17 \n2.4.2 Routine/Target Examination \n.. \n.. \n.. \n.. \n19 \n \n2.4.3 Routine/Special Foreign Exchange Examinations .. \n.. \n20 \n \n2.4.4 Banking Sector Soundness .. \n.. \n.. \n.. \n.. \n21 \n2.4.5 Compliance with the Code of Corporate \n Governance for Banks in Nigeria .. \n.. \n.. \n.. \n21 \n \n \n2.4.6 Financial Literacy and Consumer Protection \n.. \n.. \n21 \n2.4.7 Fraud and Forgeries.. \n.. \n.. \n.. \n.. \n.. \n23 \n2.4.8 Cross Border Activities \n.. \n.. \n.. \n.. \n.. \n23 \n2.4.9 Examination of Other Financial Institutions.. \n.. \n.. \n24 \n2.4.10 Anti-money Laundering/Combating of Financing Terrorism \n/Offsite Risk-Based Supervision (RBS) Assessment Matrix \n25 \n2.5 \nForeign Exchange Market and Management \n.. \n.. \n.. \n26 \n \n2.5.1 Spot Segment of the Market.. \n.. \n.. \n.. \n.. \n26 \n \n2.5.2 Forwards Segment of the Market .. \n.. \n.. \n.. \n27 \n \n2.5.3 Exchange Rate Movements \n.. \n.. \n.. \n.. \n27 \n \n \n2.5.3.1 Spot Exchange Rates \n.. \n.. \n.. \n.. \n28 \n \n2.5.4 Foreign Exchange Flows \n.. \n.. \n.. \n.. \n.. \n29 \n \n2.5.5 Sectoral Utilisation of Foreign Exchange .. \n.. \n.. \n32 \n \n2.5.6 Foreign Exchange Receipts by Top Hundred Exporters .. \n34 \n \n2.5.7 Nominal Effective Exchange Rate (NEER) and Real \n Effective Exchange Rate (REER) Indices .. \n.. \n.. \n34 \n \n \n \n \nvii \n2.6 \nDevelopment Finance Operations \n.. \n.. \n.. \n.. \n36 \n \n2.6.1 Agricultural Credit Guarantee Scheme \nFund (ACGSF) \n.. \n.. \n.. \n.. \n.. \n.. \n36 \n2.6.2 Interest Drawback Programme \n.. \n.. \n.. \n.. \n37 \n2.6.3 The Trust Fund Model (TFM) .. \n.. \n.. \n.. \n.. \n37 \n \n2.6.4 Entrepreneurship Development Centres (EDCs).. \n.. \n37 \n \n2.6.5 N200 Billion Commercial Agricultural Credit Scheme (CACS) 38 \n \n2.6.6 N200 Billion Restructuring and Refinancing Facility (RRF) \n39 \n2.6.7 N200 Billion SME Credit Guarantee Scheme (SMECGS).. \n39 \n2.6.8 N300 Billion Power and Airline Intervention Fund (PAIF) \n Initiative .. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n39 \n2.6.9 Nigeria Incentive-Based Risk Sharing System for \n Agricultural Lending (NIRSAL) .. \n.. \n.. \n.. \n.. \n40 \n2.6.10 Financial Inclusion .. \n.. \n.. \n.. \n.. \n.. \n41 \n \n \n \n \n \n \n \n \n \nECONOMIC REPORT \n \n \n \n \n \n \n \n \n \n3.0 \nGLOBAL ECONOMIC DEVELOPMENTS .. \n.. \n.. \n.. \n.. \n42 \n \n3.1 \nGlobal Output \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n42 \n3.2 \nGlobal Commodity Prices .. \n.. \n.. \n.. \n.. \n.. \n43 \n \n3.3 \nGlobal Inflation.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n43 \n3.4 \nInternational Financial Markets \n.. \n.. \n.. \n.. \n.. \n44 \n \n3.5 \nWorld Economic Outlook for the Rest of 2013 \n.. \n.. \n.. \n49 \n \n \n4.0 \nDEVELOPMENTS IN THE DOMESTIC ECONOMY \n.. \n.. \n.. \n49 \n \n4.1 \nMonetary and Credit Developments \n.. \n.. \n.. \n.. \n49 \n \n4.1.1 Reserve Money \n.. \n.. \n.. \n.. \n.. \n.. \n50 \n \n4.1.2 Broad Money (M2) .. \n.. \n.. \n.. \n.. \n.. \n51 \n \n4.1.3 Narrow Money (M1) .. \n.. \n.. \n.. \n.. \n.. \n52 \n4.1.4 Quasi Money (QM) .. \n.. \n.. \n.. \n.. \n.. \n52 \n4.1.5 Currency-in-Circulation and Deposits at the CBN .. \n.. \n52 \n4.1.6 Currency Outside Bank (COB) \n.. \n.. \n.. \n.. \n52 \n4.1.7 Drivers of Growth in Monetary Supply \n.. \n.. \n.. \n53 \n4.1.7.1 Net Foreign Assets (NFA) .. \n.. \n.. \n.. \n53 \n4.1.7.2 Net Domestic Assets (NDA) .. \n.. \n.. \n.. \n54 \n \n4.1.7.2.1Net Domestic Credit (NDC) .. \n.. \n.. \n54 \n4.1.7.2.1.1 Credit to the Government (Cg) \n54 \n4.1.7.2.1.2 Credit to the Private Sector (Cp) \n54 \n4.1.7.2.2 Other Assets (Net) of the Banking System \n54 \n4.1.8 Sectoral Distribution of Credit.. \n.. \n.. \n.. \n.. \n55 \n4.1.9 Maturity Structure of DMBs’ Outstanding \nLoans and Advances, and Deposit Liabilities.. \n.. \n.. \n57 \n \n \n4.1.10 Market Structure of the Banking Industry .. \n.. \n.. \n58 \n \n \n4.1.11 Consumer Credit \n.. \n.. \n.. \n.. \n.. \n.. \n60 \n \n \n4.1.12 Weighted Effective Average Cost of Funds (WEACF) \nFor Banks.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n60 \n4.1.13 Money Market Developments.. \n.. \n.. \n.. \n.. \n61 \n4.1.13.1 Money Market Assets Outstanding.. \n.. \n.. \n62 \n \n4.1.13.2 Primary Market.. \n.. \n.. \n.. \n.. \n.. \n63 \n \n4.1.13.3 Open Market Operations (OMO).. \n.. \n.. \n65 \n \n \n \nviii \n4.1.13.4 OMO Auctions \n.. \n.. \n.. \n.. \n.. \n65 \n4.1.13.5 The Two-Way Quote Trading in NTBs.. \n.. \n.. \n65 \n4.1.13.6 Repurchase Transactions.. \n.. \n.. \n.. \n65 \n4.1.13.7 Central Bank of Nigeria (CBN) Standing Facilities.. \n66 \n4.1.13.7.1 Standing Lending Facility (SLF). .. \n.. \n66 \n4.1.13.7.2 Standing Deposit Facility (SDF). .. \n.. \n66 \n4.1.13.8 Inter-Bank Funds Market .. \n.. \n.. \n.. \n66 \n4.1.14 Interest Rates Developments.. \n.. \n.. \n.. \n.. \n67 \n \n4.1.14.1 Money Market Rates.. \n.. \n.. \n.. \n.. \n68 \n \n4.1.14.1.1 Deposit Rates.. \n.. \n.. \n.. \n.. \n.. \n68 \n \n4.1.14.1.2 Lending Rates.. .. \n.. \n.. \n.. \n.. \n68 \n \n4.1.15 Yield on Fixed Income Securities .. \n.. \n.. \n.. \n69 \n4.1.16 Institutional Savings .. \n.. \n.. \n.. \n.. \n.. \n70 \n \n4.1.17 Other Financial Institutions .. \n.. \n.. \n.. \n.. \n70 \n \n4.1.17.1 Development Finance Institutions.. \n.. \n.. \n70 \n \n4.1.17.2 Microfinance Banks (MFBs).. \n.. \n.. \n.. \n71 \n \n4.1.17.3 Discount Houses \n.. \n.. \n.. \n.. \n.. \n71 \n \n4.1.17.4 Finance Companies (FCs).. \n.. \n.. \n.. \n72 \n \n4.1.17.5 Primary Mortgage Banks (PMBs) .. \n.. \n.. \n72 \n4.1.17.6 Bureaux-de-Change (BDCs).. \n.. \n.. \n.. \n73 \n4.1.17.7 Asset Management Corporation of Nigeria \n (AMCON).. .. \n.. \n.. \n.. \n.. \n.. \n73 \n4.1.17.8 Nigerian Mortgage Refinancing Company (NMRC) 73 \n4.1.18 Capital Market Developments.. \n.. \n.. \n.. \n.. \n74 \n \n \n4.1.18.1 Institutional Developments.. \n.. \n.. \n.. \n74 \n4.1.18.2 The Nigerian Stock Exchange(NSE).. \n.. \n.. \n75 \n \n4.1.18.3 New Issues Market .. \n.. \n.. \n.. \n.. \n75 \n \n4.1.18.4 The Secondary Market.. .. \n.. \n.. \n.. \n76\n \n4.1.18.5 All-Share Index and Aggregate Market \n Capitalisation \n.. \n.. \n.. \n.. \n.. \n76 \n4.2 Fiscal Operations \n \n \n \n \n \n \n \n78 \n4.2.1 Federation Account Operations.. .. \n.. \n.. \n.. \n78 \n4.2.1.1 Revenue Distribution for First Half, 2014 \n.. \n.. \n80 \n4.2.1.1.1 Federation Account Distribution .. \n.. \n81 \n \n \n \n \n4.2.1.1.2 VAT Pool Account.. \n \n.. \n.. \n81 \n4.2.2 Federal Government Finances.. \n.. \n.. \n.. \n.. \n82 \n \n4.2.2.1 Federal Government Fiscal Balance \n.. \n.. \n82 \n4.2.2.2 Federal Government Retained Revenue .. \n.. \n82 \n \n4.2.2.3 Total Expenditure of the Federal Government .. \n83 \n \n4.2.3 State Governments’ Finances \n.. \n.. \n.. \n.. \n85 \n \n4.2.4 Local Governments’ Finances \n.. \n.. \n.. \n.. \n87 \n \n4.2.5 Public Debt .. \n.. \n.. \n.. \n.. \n.. \n.. \n87 \n \n \n4.2.5.1 Consolidated Government Debt .. \n.. \n.. \n87 \n4.2.5.2 Domestic Debt.. \n.. \n.. \n.. \n.. \n.. \n88 \n \n4.2.5.3 External Debt.. \n.. \n.. \n.. \n.. \n.. \n88 \n \n4.2.5.4 Consolidated Debt Service Payments.. .. \n.. \n89 \n4.3 Real Sector Developments .. \n.. \n.. \n.. \n.. \n.. \n90 \n \n4.3.1 Agriculture.. .. \n.. \n.. \n.. \n.. \n.. \n.. \n91 \n \n4.3.1.1 Agricultural Policies and Institutional Support.. .. \n91 \n \n4.3.1.2 Agricultural Production and Prices.. \n.. \n.. \n93 \n \n4.3.2 Industry.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n94 \n \n \n \n \nix \n4.3.2.1 Industrial Policy and Institutional Support .. \n.. \n94 \n \n4.3.2.2 Industrial Production.. \n.. \n.. \n.. \n.. \n96 \n \n4.3.2.3 Manufacturing.. \n.. \n.. \n.. \n.. \n.. \n97 \n \n4.3.3 Crude Oil \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n98 \n \n4.3.3.1 Crude Oil Production and Demand \n.. \n.. \n98 \n4.3.3.2 Crude Oil Prices.. \n.. \n.. \n.. \n.. \n.. \n99 \n \n4.3.4 Gas \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n100 \n \n4.3.5 Petroleum Products .. \n.. \n.. \n.. \n.. \n.. \n100 \n \n4.3.6 Solid Minerals .. \n.. \n.. \n.. \n.. \n.. \n.. \n101 \n \n4.3.7 Electricity Generation .. \n.. \n.. \n.. \n.. \n.. \n102 \n \n4.3.8 Electricity Consumption.. \n.. \n.. \n.. \n.. \n.. \n102 \n \n4.3.9 Industrial Financing.. \n.. \n.. \n.. \n.. \n.. \n102 \n4.3.9.1 NEXIM .. \n.. \n.. \n.. \n.. \n.. \n.. \n102 \n4.3.10 Telecommunications .. \n.. \n.. \n.. \n.. \n.. \n103 \n \n4.3.11 Consumer Prices \n.. \n.. \n.. \n.. \n.. \n.. \n103 \n4.3.11.1 Headline Inflation .. \n.. \n.. \n.. \n.. \n104 \n \n4.3.11.2 Core Inflation.. \n.. \n.. \n.. \n.. \n.. \n104 \n4.3.11.3 Food Inflation.. \n.. \n.. \n.. \n.. \n.. \n105 \n4.3.11.4 Urban and Rural Consumer Price Indices and \n \n Inflation Rates .. \n.. \n.. \n.. \n.. \n.. \n105 \n4.3.12 Health \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n107 \n4.3.13 Education \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n107 \n4.3.14 Housing and Urban Development .. \n.. \n.. \n.. \n107 \n4.3.15 Aviation Services \n.. \n.. \n.. \n.. \n.. \n.. \n108 \n4.3.15.1 Aviation Policy and Airport Development \n.. \n108 \n4.3.15.2 Domestic Operations \n.. \n.. \n.. \n.. \n108 \n4.3.15.2 International Operations .. \n.. \n.. \n.. \n109 \n4.3.16 Maritime Services .. \n.. \n.. \n.. \n.. \n.. \n109 \n4.3.17 Railway Services \n.. \n.. \n.. \n.. \n.. \n.. \n110 \n4.4 \nExternal Sector Developments \n.. \n.. \n.. \n.. \n.. \n110 \n \n4.4.1 Current Account \n.. \n.. \n.. \n.. \n.. \n.. \n110 \n \n4.4.1.1 Trade .. \n.. \n.. \n.. \n.. \n.. \n.. \n110 \n \n4.4.1.2 Services .. \n.. \n.. \n.. \n.. \n.. \n.. \n113\n \n4.4.1.3 Income .. \n.. \n.. \n.. \n.. \n.. \n.. \n114 \n \n4.4.1.4 Current Transfers.. \n.. \n.. \n.. \n.. \n.. \n114 \n \n4.4.2 Capital and Financial Accounts .. \n.. \n.. \n.. \n114 \n \n \n4.4.2.1 Foreign Direct Investment .. \n.. \n.. \n.. \n115 \n \n \n4.4.2.2 Portfolio Investment .. \n.. \n.. \n.. \n.. \n115 \n \n4.4.3 Capital Importation by Sector and Capital Outflow \n.. \n116 \n4.4.4 Reserve Assets and Months of Import Cover \n.. \n.. \n117 \n \n4.4.5 External Assets of Financial Institutions .. \n.. \n.. \n.. \n118 \n \n \n \n5.0 \nINTERNATIONAL ECONOMIC RELATIONS \n \n \n \n \n119 \n5.1 \nRegional Institutions .. \n.. \n.. \n.. \n.. \n.. \n.. \n119 \n \n5.1.1 Presidential Taskforce Meeting on ECOWAS Monetary \n \nCooperation Programme .. \n.. \n.. \n.. \n.. \n119 \n \n5.1.2 West African Monetary Zone (WAMZ) \n.. \n.. \n.. \n120 \n5.1.3 West African Institute for Financial and Economic \nManagement (WAIFEM) \n.. \n.. \n.. \n.. \n.. \n120 \n5.1.4 West African Monetary Agency (WAMA) .. \n.. \n.. \n121 \n5.1.5 African Union Summit \n.. \n.. \n.. \n.. \n.. \n122 \n \n \n \nx \n5.1.6 Association of African Central Banks (AACB).. .. \n.. \n122 \n5.1.7 African Development Bank (AfDB).. \n.. \n.. \n.. \n122 \n5.1.8 African Union (AU)and Economic Commission for Africa (ECA) \nConference of Ministers of Finance, Planning and Economic \nDevelopment \n.. \n.. \n.. \n.. \n.. \n.. \n123 \n5.2 Multilateral Economic and Financial Institutions.. .. \n.. \n.. \n124 \n5.2.1 G20 Finance Ministers and Central Bank Governors.. \n.. \n124 \n5.2.2 Intergovernmental Group of Twenty Four (G24).. \n.. \n125 \n5.2.3 World Economic Forum on Africa (WEFA) \n.. \n.. \n126 \n \n5.2.4 The World Bank/ IMF Spring Meetings \n.. \n.. \n.. \n126 \n \n5.2.5 The Institute of International Finance (IIF) .. \n.. \n.. \n128 \n5.2.6 International Commodity Organisation .. \n.. \n.. \n129 \n \n \n6.0 \nOUTLOOK FOR THE SECOND HALF OF 2014 .. \n.. \n.. \n.. \n129 \n \n \n \nTABLES \nSelected Macroeconomic Indicators \n.. \n.. \n.. \n.. \n.. \n.. \nxxii \n \n1 \n \nMonetary Policy Benchmarks and Outcomes \n.. \n.. \n.. \n2 \n \n2 \n \nStructure of the CIC .. \n.. \n.. \n.. \n.. \n.. \n.. \n16 \n3 \n \nNominal and the Real Effective Exchange Rate Indices \n.. \n36 \n \n4 \n \nAnalysis of CACS Financed Projects by Value Chain \n.. \n.. \n38 \n5 \n \nIndices of Selected International Stock Markets .. \n.. \n.. \n47 \n6 \n \nExchange Rate of Selected Countries \n.. \n.. \n.. \n.. \n48 \n7 \n \nSources and Uses of Reserve Money \n.. \n.. \n.. \n.. \n50 \n8 \n \nGrowth in Monetary Aggregates .. \n.. \n.. \n.. \n.. \n55 \n9 \n \nCredit to the Core Private Sector .. \n.. \n.. \n.. \n.. \n56 \n \n10 \n \nMaturity Structure of DMBs Assets and Liabilities.. \n.. \n.. \n58 \n11 Weighted Effective Average Cost of DMBs Funds (WEACF) .. \n60 \n12 \n \nComposition as Percentage of EACF.. \n.. \n.. \n.. \n.. \n61 \n13 \n \nBid-Cover Ratios of Selected Securities \n.. \n.. \n.. \n.. \n60 \n14 \n \nMoney Market Rates.. \n.. \n.. \n.. \n.. \n.. \n.. \n64 \n \n15 \n \nDMBs Deposit and Lending Rates. .. \n.. \n.. \n.. \n.. \n65 \n \n16 \n \nOpen Market Operations (OMO) Sessions \n.. \n.. \n.. \n131 \n17 \n \nTreasury Bills: Issues and Subscription \n.. \n.. \n.. \n.. \n132 \n18 \n \nMonetary and Credit Developments.. \n.. \n.. \n.. \n.. \n133 \n19 \n \nValue of Money Market Assets.. \n.. \n.. \n.. \n.. \n.. \n134 \n20 \n \nSelected Interest Rates \n.. \n.. \n.. \n.. \n.. \n.. \n135 \n21 \n \nFederation Account Operations .. \n.. \n.. \n.. \n.. \n136 \n22 \n \nSummary of Federal Government Finances.. \n.. \n.. \n.. \n137 \n23 \n \nFunctional Classification of Federal Government Recurrent and \n \nCapital Expenditure.. \n.. \n.. \n.. \n.. \n.. \n.. \n138 \n24 \n \nSummary of Statutory & VAT Revenue Allocation to \nState Governments.. \n.. \n.. \n.. \n.. \n.. \n.. \n139 \n25 \n \nAllocation to Local Governments from the Federation \n and VAT Pools Accounts \n.. \n.. \n.. \n.. \n.. \n.. \n140 \n26 \n \nDomestic Debt of the Federal Government \n.. \n.. \n.. \n141 \n27 \n \nDomestic Debt Service Payments to the Federal Government \nby Instruments \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n141 \n28 \n \nExternal Debt Outstanding .. \n.. \n.. \n.. \n.. \n.. \n142 \n29 \n \nExternal Debt Service Payments.. .. \n.. \n.. \n.. \n.. \n143 \n \n30 \n \nConsolidated Debt Outstanding .. \n.. \n.. \n.. \n.. \n143 \n \n \n \nxi \n31 \n \nGross Domestic Product at 2010 Constant Basic Prices .. \n.. \n145 \n33 \n \nGross Domestic Product at Current Basic Prices .. \n.. \n.. \n146 \n34 \n \nSelected Real Sector Indicators.. .. \n.. \n.. \n.. \n.. \n147 \n35 \n \nComposite Consumer Price Index .. \n.. \n.. \n.. \n.. \n149 \n36 \n \nUrban and Rural Consumer Price Index .. \n.. \n.. \n.. \n150 \n37 \n \nBalance of Payments Analytic Presentation (US$).. \n.. \n.. \n151 \n38 \n \nBalance of Payments Analytic Presentation (Naira) \n.. \n.. \n152 \n39 \n \nForeign Exchange Flows Through the Economy.. \n.. \n.. \n153 \n40 \n \nNigeria’s Gross External Reserves.. .. \n.. \n.. \n.. \n.. \n154 \n41 \n \nNigeria’s Foreign Exchange Cross Rates.. .. \n.. \n.. \n.. \n155 \n42 \n \nMonthly Average Exchange Rate Movement.. .. \n.. \n.. \n156 \n43 \n \nDemand and Supply of Foreign Exchange \n.. \n.. \n.. \n157 \n44 \n \nSectoral Utilization of Foreign Exchange .. \n.. \n.. \n.. \n158 \n45 \n \nTotal External Assets of Financial Institutions.. \n.. \n.. \n.. \n159 \n \n \nCHARTS \n 1 \n \nVolume of Cheques Cleared.. \n.. \n.. \n.. \n.. \n.. \n5 \n \n 2 \n \nValue of Cheques Cleared.. \n.. \n.. \n.. \n.. \n.. \n5 \n 3 \n \nClassification of Electronic Payments by Volume \n.. \n.. \n6 \n 4 \n \nClassification of Electronic Payments by Value .. \n.. \n.. \n6 \n \n 5 \n \nVolume of Electronic Payments \n.. \n.. \n.. \n.. \n.. \n7 \n \n 6 \n \nValue of Electronic Payments \n.. \n.. \n.. \n.. \n.. \n7 \n \n7 \n \nVolume of ATM Transactions \n.. \n.. \n.. \n.. \n.. \n8 \n \n8 \n \nValue of ATM Transactions.. \n.. \n .. \n.. \n.. \n.. \n8 \n9 \n \nVolume of Web Transactions \n.. \n.. \n.. \n.. \n.. \n9 \n10 \nValue of Web Transactions .. \n.. \n.. \n.. \n.. \n.. \n9 \n11 \nVolume of POS Transactions \n.. \n.. \n.. \n.. \n.. \n10 \n12 \nValue of POS Transactions .. \n.. \n.. \n.. \n.. \n.. \n10 \n13 \nVolume of Mobile Transactions \n.. \n.. \n.. \n.. \n.. \n11 \n14 \nValue of Mobile Transactions \n.. \n.. \n.. \n.. \n.. \n11 \n15 \nVolume of RTGS Transactions \n.. \n.. \n.. \n.. \n.. \n12 \n16 \nValue of RTGS Transactions .. \n.. \n.. \n.. \n.. \n.. \n12 \n17 \nVolume of NIP Transactions .. \n.. \n.. \n.. \n.. \n.. \n13 \n18 \nValue of NIP Transactions .. \n.. \n.. \n.. \n.. \n.. \n13 \n19 \nVolume of NEFT Transactions \n.. \n.. \n.. \n.. \n.. \n14 \n20 \nValue of NEFT Transactions .. \n.. \n.. \n.. \n.. \n.. \n14 \n21 \nCredit Risk Management System (CRMS) Statistics.. \n.. \n.. \n19 \n22 \nDemand, Supply and Net Demand of Foreign Exchange \nSpot Market .. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n27 \n23 \nExchange Rate Movements.. \n.. \n.. \n.. \n.. \n.. \n28 \n \n24 \nrDAS/Bureau-de-Change Foreign Exchange (N/US$) Premium.. \n29 \n \n25 \nForeign Exchange Disbursements Through the CBN.. \n.. \n.. \n31 \n \n26 \nForeign Exchange Transactions Through the CBN.. \n.. \n.. \n32 \n \n27 \nSectoral Utilization of Foreign Exchange (Visibles).. \n.. \n.. \n33 \n \n28 \nSectoral Utilization of Foreign Exchange (Invisibles).. \n.. \n.. \n34 \n \n29 \nNominal (NEER) and Real Effective Exchange Rate (REER) .. .. \n \n \n \nIndices.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n35 \n30 \nSectoral Distribution of ACGSF Loans (By Purpose).. \n.. \n.. \n37 \n \n31 \nAnalysis of CACS Financed Projects by Value Chain \n.. \n.. \n39 \n32 \nNIRSAL Credit Risk Guarantee (CRG) Issued.. \n.. \n.. \n.. \n40 \n \n \n \nxii \n33 \nPerformance of the Naira against Major Currencies \n.. \n.. \n46 \n34 \nPerformance of the Naira against Regional Currencies \n.. \n46 \n35 (a) \nReserve Money and its Components: Sources .. \n.. \n.. \n51 \n35 (b) \nReserve Money and its Components: Uses \n.. \n.. \n.. \n51 \n36 \nRatio of Currency Outside Bank to Money Supply \n.. \n.. \n53 \n37 \nGrowth in Money Supply.. .. \n.. \n.. \n.. \n.. \n.. \n53 \n38 \nDistribution of Net Domestic Credit.. \n.. \n.. \n.. \n.. \n55 \n \n39 \nSectoral Distribution of Banks Credit \n.. \n.. \n.. \n.. \n56 \n \n40 \nMaturity Structure of Deposit Money Banks Loans and Advances \n57 \n41 \nMaturity Structure of Banks Deposits .. \n.. \n.. \n.. \n.. \n57 \n42 \nDistribution of Private Sector Credit.. \n.. \n.. \n.. \n.. \n58 \n43 (a) \nMarket Structure of the Banking Industry .. \n.. \n.. \n.. \n59 \n43 (b) \nMarket Structure of the Banking Industry (Concentration Ratio \nof Largest Firm) \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n59 \n44 \nConsumer Credit of DMBs .. \n.. \n.. \n.. \n.. \n.. \n60 \n45 \nTrends in Weighted Effective Average Cost of Banks Funds.. .. \n61 \n46 \nMoney Market Assets Outstanding.. \n.. \n.. \n.. \n.. \n62 \n47 \nNigerian Treasury Bills Outstanding .. \n.. \n.. \n.. \n.. \n64 \n48 \nDistribution of FGN Bonds.. .. \n.. \n.. \n.. \n.. \n.. \n64 \n49 \nMoney Market Rates.. \n.. \n.. \n.. \n.. \n.. \n.. \n68 \n \n50 \nGovernment Bonds Average Yield Curve \n.. \n.. \n.. \n69 \n51 \nVolume and Value of Transactions at the NSE.. .. \n.. \n.. \n76 \n \n52 \nMarket Capitalization and NSE Value Index.. \n.. \n.. \n.. \n77 \n \n53 \nStructure of Gross Federation Revenue.. .. \n.. \n.. \n.. \n78 \n \n54 \nComposition of Oil Revenue.. \n.. \n.. \n.. \n.. \n.. \n79 \n55 \nComposition of Non-Oil Revenue.. \n.. \n.. \n.. \n.. \n79 \n56 \nFederally-Collected Revenue Distribution.. \n.. \n.. \n.. \n80 \n57 \nDistribution to the tiers of Government.. .. \n.. \n.. \n.. \n81 \n \n58 \nFederal Government Fiscal Balance.. \n.. \n.. \n.. \n.. \n82 \n59 \nComposition of Federal Government Retained Revenue.. \n.. \n83 \n \n60 \nComposition of Federal Government Expenditure.. \n.. \n.. \n83 \n \n61 \nEconomic Classification of Federal Government Recurrent \nExpenditure.. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n84 \n62 \nComposition of Total Allocation to State Governments .. \n.. \n86 \n \n63 \nComposition of Statutory Allocation to Local Governments .. .. \n87 \n64 \nComposition of Federal Government Consolidated Debt \n.. \n88 \n65 \nBreakdown of External Debt Stock \n.. \n.. \n.. \n.. \n89 \n66 \nBreakdown of Extenal Debt Service Payments .. \n.. \n.. \n90 \n \n67 \nGDP Growth Rate.. .. \n.. \n.. \n.. \n.. \n.. \n.. \n91 \n68 \nIndustrial Production Index.. \n.. \n.. \n.. \n.. \n.. \n97 \n69 \nAverage Manufacturing Capacity Utilisation \n.. \n.. \n.. \n97 \n70 \nCrude Oil Production and Exports.. \n.. \n.. \n.. \n.. \n99 \n \n71 \nAverage Spot Prices of Selected Crudes .. \n.. \n.. \n.. \n99 \n72 \nGas Production and Utilization.. \n.. \n.. \n.. \n.. \n.. \n100 \n \n73 \nDistribution of Petroleum Products.. \n.. \n.. \n.. \n.. \n101 \n \n74 \nSectoral Disbursement of NEXIM Loans \n.. \n.. \n.. \n.. \n102 \n75 \nTotal Active Lines and Tele-density.. \n.. \n.. \n.. \n.. \n103 \n \n76 \nConsumer Price Indices.. \n.. \n.. \n.. \n.. \n.. \n.. \n104 \n \n77 \nInflation Rate .. \n.. \n.. \n.. \n.. \n.. \n.. \n.. \n105 \n78 \nUrban and Rural Consumer Price Indices.. \n.. \n.. \n.. \n106 \n \n79 \nExports, Imports and Trade Balance.. \n.. \n.. \n.. \n.. \n111 \n \n \n \n \nxiii \n80 \nNon-Oil Exports by Products.. \n.. \n.. \n.. \n.. \n.. \n112 \n81 \nNon-Oil Imports by Sectors.. \n.. \n.. \n.. \n.. \n.. \n113 \n82 \nShare of Services Out Payments.. .. \n.. \n.. \n.. \n.. \n113 \n83 \nPrivate Home Remittances.. \n.. \n.. \n.. \n.. \n.. \n114 \n84 \nNet FDI and Portfolio Investment Flows.. .. \n.. \n.. \n.. \n116 \n85 \nCapital Importation by Sector.. \n.. \n.. \n.. \n.. \n.. \n117 \n86 \nCapital Outflows and Outward Transfers .. \n.. \n.. \n.. \n117 \n87 \nStock of External Reserves and Months of Import Cover.. \n.. \n118 \n88 \nNigeria’s Total External Assets.. \n.. \n.. \n.. \n.. \n.. \n119 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nxiv \n \nSUMMARY \nPOLICY FRAMEWORK \nThe Central Bank of Nigeria’s (CBN) primary mandate remains \nmonetary and price stability. To achieve the mandate, the Bank in the \nfirst half of 2014, pursued a monetary policy strategy using a \ncombination of approaches. Thus, the Bank employed the open \nmarket operations (OMO), complemented by reserve requirement \n(RR), discount window operations and primary market transactions as \nwell as interventions in the foreign exchange market. The monetary \npolicy rate (MPR) was retained as the major signal of the Bank’s policy \nstance and the anchor for short-term interest rates. The Bank undertook \nsupervisory and surveillance activities through regular review of banks’ \nreturns, spot checks, on-site and off-site monitoring, and special \ninvestigations, among others, to ensure a sound financial system \nstability. \nCBN OPERATIONS: \nDevelopmental \nInitiatives \nThe Bank sustained the implementation of its various developmental \ninitiatives such as; the N200 billion Restructuring and Refinancing Facility \n(RRF), the N200 billion SME Credit Guarantee Scheme Fund (SMECGS), \nand the N300 billion Power and Airline Intervention Fund (PAIF). Others \nincluded the Agricultural Credit Guarantee Scheme (ACGS), the \nCommercial Agricultural Credit Scheme (CACS), Entrepreneurship \nDevelopment Centres and the Nigeria Incentive-Based Risk Sharing \nSystem for Agricultural Lending (NIRSAL). \n \nLiquidity \nManagement \nOpen market operations was sustained as the main tool for liquidity \nmanagement. Other quantity based instruments used alongside the \nOMO were the reserve requirements, discount window operations and \nstanding facilities. Also, primary market transactions in government \nsecurities and interventions in the foreign exchange market under the \nretail Dutch Auction System (rDAS) were employed. \nPayments \n& \nClearing System \nTo enhance the National Payments System, the CBN introduced Bank \nVerification Number (BVN) to address the challenge of absence of a \nunique identifier in the Nigerian banking industry. The BVN would \nenhance the effectiveness of the “Know Your Customer” (KYC) \nprinciple, with its associated benefits, including reduction of fraud and \n \n \n \nxv \ncredit risk; and growth of credit and related products. Other activities \nincluded: Sensitisation campaigns on the cash-less policy initiative in \npreparation for its take-off in the remaining 30 states of the Federation; \nRevision of the guidelines for e-card issuance and usage in Nigeria; and \nImplementation of industry e-reference portal to enhance processing \nof customers’ accounts references. \n \n \n \n \n \n \nFinancial Sector \nSurveillance \n \n \n \n \n \n \n \n \n \nAs part of its supervisory and surveillance activities, the Bank conducted \nthe quarterly review of foreign exchange activities of twenty (20) banks \nto ascertain their compliance with extant foreign exchange laws and \nregulations. \nInstitutions \nwhere \ninfractions \nwere \nidentified \nwere \nappropriately \nsanctioned. \nIn \naddition, \nAnti-Money \nLaundering/ \nCombating the Financing of Terrorism (AML/CFT) spot check on thirteen \n(13) banks was carried out and five (5) banks were sanctioned for \ncontravening various laws and regulations. The Bank also undertook an \non-site examination of one foreign subsidiary of a domestic bank as \npart of its oversight of cross-border activities. \nThe banking sector remained sound at end-June 2014. The industry \nnon-performing loans (NPL) ratio stood at 3.50 per cent, down from 3.65 \nper cent at end-June 2013, following improvement in the risk \nmanagement practices of banks. The industry liquidity ratio stood at \n42.66 per cent at end-June 2014, higher than the threshold of 30.0 per \ncent. \nThe implementation of the 2010 banking reform initiatives continued \nduring the review period. One bank was issued with a commercial \nbanking licence with international authorization, while another \nobtained HoldCo and commercial banking licences with international \nauthorization. In addition, a discount house was granted approval-in-\nprinciple (AIP) to convert to a merchant bank, while a foreign bank was \ngranted final approval to establish a representative office in Nigeria. \nAlso, a parallel-run of the Basel II alongside Basel I minimum capital \nadequacy computation commenced during the first half of 2014, with \nbanks required to also render their returns on Basel II format on monthly \nbasis. In addition, the submissions of DMBs’ Internal Capital Adequacy \nAssessment Process (ICAAP) documents to the Bank commenced in \nthe review period. \nThe Bank issued a revised Code of Corporate Governance for Banks \n \n \n \nxvi \nand Discount Houses to align its provisions with current realities and \nglobal \nbest \npractices; \neliminate \nambiguities \nand \nstrengthen \ngovernance practices in the institutions. To ensure full implementation, \nbanks and discount houses were required to render quarterly returns to \nthe CBN. A compliance examination and spot check on banks was \ncarried out to ascertain compliance with the consumer complaints \nmanagement \nguidelines. \nThe \nexercise \nrevealed \nremarkable \nimprovement in most banks. However, defaulting banks were directed \nto make appropriate refunds and ensure strict compliance henceforth. \nThe Bank also conducted consumer financial literacy sensitization and \nawareness programmes in Enugu and Ibadan in the review period. \n \n \n \n \n \nForeign Exchange \nManagement \nThe Retail Dutch Auction System (rDAS) was retained as the \nmechanism for managing foreign exchange by the Bank. The \nexchange rate of the naira vis-à-vis the US dollar was relatively stable \nat the official window due to interventions by the Bank which \nmoderated demand pressure. The average exchange rate of the \nnaira to the US dollar at the rDAS, interbank and BDC segments were \nN157.29/US$, N162.55/US$ and N169.49/US$, respectively, in the first half \nof 2014. Foreign exchange inflow through the economy increased by \n5.9 and 2.4 per cent to US$75.64 billion above the respective levels in \nthe first and second halves of 2013. Total foreign exchange outflow \nthrough the economy increased by 52.7 and 18.3 per cent to US$29.09 \nbillion, over the levels at end-June and end-December 2013, \nrespectively. Overall, the net foreign exchange inflow through the \neconomy stood at US$46.55 billion, compared with US$52.32 billion and \nUS$49.27 billion in the corresponding period and preceding half year, \nrespectively. \n \nTHE FINANCIAL \nSECTOR \n \n \nThe CBN maintained a tight monetary policy stance in the first half of \n2014, keeping the monetary policy rate at 12.0 per cent throughout the \nperiod. Consequently, major monetary aggregates were significantly \nbelow their indicative benchmarks. Reserve money, at N4, 723.1 billion, \nwas 15.0 per cent below its level at end-December 2013. Broad money \nsupply (M2) grew by 1.7 per cent relative to the level at end-December \n2013, compared with the growth of 0.7 per cent at the end of the \ncorresponding period of 2013. At this rate, M2 growth was lower than \nthe provisional indicative target of 14.5 per cent for fiscal 2014. Both \n \n \n \nxvii \n \n \n \n \n \n \n \n \n \n \n \n \ncurrency-in-circulation and currency outside bank declined at the end \nof the review period. \nAggregate credit to the domestic economy grew marginally as a result \nof the slow growth in claims on the private sector and the decline in net \nclaims on the Federal Government. Net domestic credit (NDC), grew \nby 0.9 per cent to N15,173.6 billion at the end of the first half of 2014, \ncompared with the growth of 3.6 per cent at the end of the \ncorresponding period of 2013. Net claims on government fell by 21.9 \nper cent at the end of the first half of 2014, compared with 3.6 per cent \nat the end of the corresponding half of 2013. The Federal Government, \nas in the preceding half-year, however, remained a net lender to the \nbanking system. Credit to the private sector grew by 2.8 per cent at the \nend of the first half of 2014, compared with 3.6 per cent at the end of \nthe first half of 2013. \nMoney market rates were relatively stable in the first half of 2014. The \nweighted average prime and maximum lending rates stood at 16.7 \nand 25.8 per cent, respectively. The spread between the average term \ndeposit and maximum lending rates narrowed by 0.75 percentage \npoints to 16.92 percentage points. With the year-on-year inflation rate \nat 8.2 per cent in June 2014, most deposit rates were negative in real \nterm. \nAggregate financial savings rose by 5.0 per cent to N9,511.0 billion in \nthe first half of 2014, compared with N9,224.4 billion and N9,085.6 billion \nat end-December 2013 and the corresponding period of 2013, \nrespectively. DMBs remained the dominant depository institutions in the \nfinancial system, accounting for 90.0 per cent of the total financial \nsavings, compared with 95.2 per cent in the preceding half year while \nother savings institutions accounted for the balance. \nThe All-Share Index (ASI) and aggregate market capitalization rose by \n2.8 and 0.1 per cent to close at 42,482.48 and N19.09 trillion, \nrespectively, compared with 41,329.19 and N19.08 trillion at end-\nDecember 2013. \n \n \nProvisional gross federally-collected revenue in the first half of 2014 \nstood at N5,109.04 billion or 12.1 per cent of GDP. This was below the \nproportionate budget estimate by 6.0 per cent, but was above the \n \n \n \nxviii \n \n \n \nTHE \nGOVERNMENT \nSECTOR \nlevel in the corresponding period of 2013 by 6.3 per cent. The shortfall in \nfederally-collected revenue relative to the budget estimate was as a \nresult of the decline in non-oil revenue. Further analysis indicated that \noil revenue constituted 70.5 per cent of total revenue, while non-oil \nrevenue accounted for the balance. \nAt N1,771.27 billion or 4.2 per cent of GDP, the estimated Federal \nGovernment’s retained revenue was lower than both the proportionate \nbudget estimate and the level in the corresponding period of 2013 by \n17.0 and 9.6 per cent, respectively. The decline in retained revenue \nrelative to the proportionate budget estimate was attributed, largely, \nto the drop in both FGN independent revenue and its share from the \nFederation Account. \nThe estimated aggregate expenditure of the Federal Government in \nthe first half of 2014 was N2,096.37 billion or 5.0 per cent of GDP. This fell \nby 19.9 and 11.8 per cent below the budget estimate and the level in \nthe corresponding period of 2013, respectively. The decline in total \nexpenditure relative to the proportionate budget estimate reflected, \nlargely, the delay in capital releases induced by the late passage of \nthe 2014 Appropriation Bill. The fiscal operations of the Federal \nGovernment in the first half of 2014 resulted in overall deficit of N325.11 \nbillion or 0.8 per cent of GDP, as against the proportionate budget \nestimate and corresponding period of 2013 deficit of N482.10 billion \nand N415.40 billion, respectively. The deficit was financed, mainly, from \ndomestic sources, particularly through the issuance of FGN Bonds and \nloans from special account (Development of Natural Resources \nAccount). \nThe stock of Federal Government consolidated debt at end-June 2014 \nwas N8,881.40 billion or 10.5 per cent of GDP This represented an \nincrease of 4.6 per cent over the level at end-December 2013. Of the \ntotal debt stock, domestic debt accounted for N7,421.40 billion or 83.6 \nper cent, while the external debt amounted to N1,460.30 billion \n(US$9.38 billion) or 16.4 per cent of the total. \n \n \nProvisional Data from the National Bureau of Statistics (NBS) showed \nthat the gross domestic product (GDP), at 2010 constant basic prices, \nrose by 6.4 per cent in the first half of 2014, compared with 4.9 per cent \n \n \n \nxix \n \nTHE REAL \nSECTOR \n \n \n \nin the first half of 2013. The growth reflected, largely, the performance \nof the non-oil sector, which grew by 7.4 per cent. Agriculture and \nindustry recorded growth of 4.6 and 5.9 per cent, respectively. Similarly, \nconstruction, services and trade recorded respective growth of 14.0, \n7.2 and 5.7 per cent in the first half of 2014. \nNigeria’s average daily crude oil production stood at 1.91 mbd or \n345.71 million barrels (mb), representing a decline of 4.0 per cent below \nthe level of 1.99 mbd or 360.19 mb attained in the corresponding half \nof 2013. The average spot price of Nigeria’s reference crude, the Bonny \nLight (37o API) increased by 0.9 per cent to US$111.29 per barrel above \nits level in the first half of 2013. \nThe general price level maintained an upward trend in the first half of \n2014. The all-items composite Consumer Price Index (CPI) stood at \n158.6 (November 2009=100) at end-June 2014, compared with 146.6 \nand 152.3 at end-June 2013 and end-December 2013, respectively. \nThe year-on-year headline inflation fluctuated in the first half of 2014 \nand stood at 8.2 per cent at end-June 2014, representing an increase \nof 0.2 percentage point over the level at end-December 2013. The 12-\nmonth moving average inflation rate declined to 8.0 per cent at end-\nJune 2014, from 10.4 and 8.5 per cent at end-June and end-December \n2013, respectively. \n \n \n \n \n \n \n \nEXTERNAL \nSECTOR \nProvisional data showed that the external sector was under pressure \nreflected in the depletion of the external reserves and huge short-term \ncapital reversal in the first half of 2014. Despite this development, the \ncurrent account recorded a surplus equivalent to 2.26 per cent of gross \ndomestic product (GDP), occasioned by robust trade balance and \nincreased home remittances. The capital and financial account also \nregistered a higher net foreign assets position, representing 0.6 per cent \nof GDP in the first half of 2014, compared with 0.5 per cent of GDP in \nthe first half of 2013. External reserves, at US$37.33 billion, declined by \n12.9 per cent from the level at end-December 2013 and could support \n8.0 months of import cover (goods only). External debt increased from \nUS$6.92 billion and US$8.82 billion at end-June and end-December \n2013, respectively, to US$9.38 billion. \nGlobal output expansion was modest, but unbalanced across \neconomies. Policy uncertainties and structural rigidities continued to \n \n \n \nxx \n \n \n \n \n \n \n \n \nimpede overall demand. In the advanced economies, growth was \ngradually gaining traction after a lull due to the harsh weather \nconditions and weak domestic demand, resulting in huge inventory \naccumulation. In the emerging market economies, growth remained \nsluggish, affected by policy uncertainties, structural rigidities and \nprotracted weakness in external demand, which weighed negatively \non domestic demand. The financial markets were susceptible to \nuncertainties \naround \ninterest \nrates \nnormalisation \nin \nadvanced \neconomies. In sub-Saharan Africa, growth remained strong, supported \nby commodity-related factors. Nigeria posted reasonable growth \ndespite domestic challenges. In the Middle East and North Africa \n(MENA), growth was constrained by difficult socio-political and security \nconcerns. Global inflation generally remained subdued, lower than \nhistorical averages, following continued negative output gaps in the \nadvanced economies, weaker domestic demand in many emerging \nmarkets, and falling commodity prices, particularly energy. \n \n \n \nOUTLOOK \nFOR THE REST \nOF 2014 \nDespite the unfavourable global economic environment, Nigeria’s \noutput growth for the second half of 2014 was expected to remain \nresilient amidst disruptions of agricultural activity on account of \ninsecurity. Firmed-up domestic demand would continue to drive the \nservices and manufacturing sectors, while the strengthening of growth \nin advanced economies would bolster external demand. Although \nthere are signs of domestic inflationary pressures, pass-through effect of \nforeign prices on domestic inflation was expected to be dampened as \nglobal inflation expectations have remained well anchored. In \naddition, proactive monetary policy measures would stem the liquidity \nsurfeit from accommodative fiscal policy anticipated in the second half \nof the year. Consequently, domestic inflation would remain reasonably \ncontained within the Bank’s target band of 6.0 – 9.0 per cent. \nThe outlook for the external sector for the rest of 2014 remained \npromising, given the sustained high international crude oil price and \nstable domestic economic conditions. The fiscal outlook is, however, \nmixed. Despite the sustained increase in international oil prices above \nthe FGN budget benchmark price of US$77.5/barrel, the reduction in US \ndemand for Nigeria’s crude due to the discovery of shale oil might \nadversely affect total revenue. However, it was expected that the \n \n \n \nxxi \nrecovery in some emerging markets might boost the demand for \nNigeria’s Brent and, thereby, dampen the effect of the lower crude oil \ndemand from the US on federation revenue and accretion to the \nexcess crude account. It was also expected that capital expenditure \nimplementation would intensify in the second half of the year along \nwith upsurge in recurrent expenditure due to the financial outlay for the \n2015 election activities. \n \n \n \n \n \nxxii \nIndicator\nJun-10 1/\nJun-11 1/\nJun-12 1/\nJun-13 1/\nJun-14 2/\nDomestic Output and Prices\nGDP* at Current Mkt Prices (N' billion)\n25,931.88\n \n29,915.91\n \n34,643.40\n \n38,671.86\n \n42,339.35\nGDP* at Current Mkt Prices (US$' billion)\n172.84\n \n195.26\n \n219.75\n \n245.84\n \n269.17\n \nGDP* per Capita (N)\n163,194.62\n \n182,429.20\n \n204,707.10\n \n224,614.39\n \n242,181.32\n \nGDP* per Capita (US$)\n1,087.70\n \n1,190.71\n \n1,298.50\n \n1,427.90\n \n1,539.67\n \nReal GDP* Growth (Growth Rate %)\n6.62\n \n3.79\n \n4.94\n \n6.38\n \n Oil Sector\n17.31\n \n(9.19)\n \n(13.77)\n \n(1.23)\n \n Non-oil Sector\n4.68\n \n6.43\n \n8.18\n \n7.44\n \nSectoral Classification of GDP* (Growth Rate %)\n Agriculture\n2.58\n \n6.36\n \n2.52\n \n4.55\n \n Industry \n16.14\n \n(0.96)\n \n(0.85)\n \n5.90\n \n Construction\n3.82\n \n24.17\n \n13.96\n \n13.99\n \n Trade\n6.78\n \n1.61\n \n5.91\n \n5.71\n \n Services\n3.27\n \n4.90\n \n8.82\n \n7.21\n \nOil Production (mbd)\n2.07\n2.14\n2.09\n1.99\n1.91\nManufacturing Capacity Utilisation (%) 1/\n54.90\n55.73\n57.03\n57.6\n59.3\nInflation Rate (%) (Year-over-Year)\n14.1\n10.2\n12.9\n8.4\n8.2\nInflation Rate (%) (12-month moving average)\n13.1\n12.3\n11.3\n10.4\n8.0\nCore Inflation Rate (%) (Year-over-Year) 3/\n12.7\n11.5\n15.2\n5.5\n8.1\nCore Inflation Rate (%) (12-month moving average) 3/\n10.9\n12.1\n12.7\n10.7\n7.4\nFederal Government Finance (% of GDP*)\nRetained Revenue\n5.45\n4.43\n5.56\n5.07\n4.18\nTotal Expenditure\n7.13\n6.63\n6.38\n6.14\n4.95\n Recurrent Expenditure\n5.08\n5.23\n4.54\n4.43\n3.73\n Of which: Interest Payments\n0.67\n0.76\n0.90\n1.01\n1.13\n Foreign\n0.08\n0.07\n0.06\n0.08\n0.09\n Domestic\n0.59\n0.69\n0.84\n0.93\n1.04\n Capital Expenditure and Net Lending\n1.74\n1.03\n0.76\n1.29\n0.83\n Transfers\n0.30\n0.37\n1.08\n0.42\n0.39\nCurrent Balance (Deficit(-)/Surplus(+))\n0.36\n-0.81\n1.02\n0.64\n0.46\nPrimary Balance (Deficit(-)/Surplus(+))\n-1.01\n-1.44\n0.09\n-0.06\n0.36\nOverall Fiscal Balance (Deficit(-)/Surplus(+))\n-1.68\n-2.20\n-0.81\n-1.07\n-0.77\nFinancing\n1.97\n2.45\n0.81\n1.07\n0.77\n Foreign\n0.29\n0.25\n0.00\n0.00\n0.00\n Domestic\n1.68\n2.20\n0.81\n1.07\n0.77\n Banking System\n0.00\n0.00\n0.00\n0.00\n0.00\n Non-bank Public\n1.44\n1.61\n0.60\n1.35\n1.19\n Others\n0.24\n0.27\n0.21\n-0.26\n-0.42\nSelected Macroeconomic and Social Indicators\n \n \n \n \nxxiii \nIndicator\nJun-10 1/\nJun-11 1/\nJun-12 1/\nJun-13 1/\nJun-14 2/\nConsolidated Government Debt Stock\n8.63\n10.21\n10.39\n10.48\n10.49\nExternal\n1.25\n1.40\n1.39\n1.70\n1.72\nDomestic\n7.38\n8.81\n9.00\n8.79\n8.76\nMoney and Credit ( Growth Rate %)\nReserve Money\n-7.18\n11.88\n-9.77\n-12.64\n-15.04\nNarrow Money (M1)\n-1.98\n1.18\n-2.54\n-6.49\n-6.07\nBroad Money (M2)\n0.60\n5.61\n1.35\n0.71\n1.66\nNet Foreign Assets\n-14.60\n-0.81\n5.37\n1.34\n-9.63\nNet Domestic Assets\n36.82\n13.94\n-3.31\n-0.18\n15.08\nNet Domestic Credit\n8.79\n2.08\n-0.87\n3.55\n0.88\n Net Credit to Government\n35.29\n4.77\n-128.16\n-3.63\n-21.89\n Credit to Private Sector\n-1.14\n1.30\n3.65\n3.57\n2.75\nMoney Multiplier for M2\n7.06\n5.89\n5.37\n4.82\n3.37\nIncome Velocity of M2\n4.71\n4.86\n5.07\n4.90\n5.26\nInterest Rates (% per annum)\nMonetary Policy Rate (MPR) 4/\n6.00\n8.00\n12.00\n12.00\n12.00\nRepurchase Rate\nReverse Repurchase Rate\nTreasury Bill Rate\n 91-day\n2.29\n8.20\n14.08\n11.60\n \n9.98\n \nInter-bank Call Rate\n2.73\n11.15\n14.92\n11.59\n10.46\nDeposit Rates\n Savings Rate\n1.95\n1.40\n1.76\n2.04\n3.36\n 3-months Fixed\n4.98\n5.14\n7.80\n7.49\n9.30\n 6-months Fixed\n4.85\n5.26\n8.08\n7.07\n9.52\n 12-months Fixed\n4.90\n4.68\n7.51\n5.32\n9.19\nPrime Lending Rate\n17.65\n15.76\n16.93\n16.56\n16.72\nMaximum Lending Rate\n22.03\n22.02\n23.44\n24.58\n25.52\nExternal Sector\nCurrent Account Balance (% of GDP*)\n2.95\n5.21\n3.02\n4.50\n2.26\n Goods Account\n8.06\n10.10\n8.33\n9.48\n6.49\n Services and Income Account\n-10.42\n-10.45\n-10.18\n-9.30\n-8.34\n Current Transfers\n5.31\n5.56\n4.86\n4.32\n4.11\nCapital and Financial Account Balance (% of GDP*)\n-13.28\n-1.23\n0.68\n0.47\n0.59\nOverall Balance (% of GDP*)\n2.87\n0.29\n-1.28\n0.48\n-2.04\nExternal Reserves (US $ million)\n37,468.44\n \n31,890.91\n \n35,412.50\n \n44,957.00\n \n37330.03\nNumber of Months of Import Equivalent\n9.67\n6.90\n6.82\n10.50\n8.60\nDebt Service Due (% of Exports of Goods and Services)\nAverage Crude Oil Price (US$/barrel)\n79.47\n113.86\n115.05\n110.29\n111.29\nAverage AFEM/DAS Rate (N/$1.00) \n150.04\n153.21\n157.65\n157.30\n157.29\nEnd of Period AFEM/DAS Rate (N/$1.00) \n149.99\n153.31\n157.50\n157.31\n157.29\nAverage Bureau de Change Exchange Rate (N/$)\n152.77\n156.95\n161.22\n159.66\n169.49\nEnd of Period Bureau de Change Exchange Rate (N/$)\n153.50\n159.00\n164.00\n162.00\n168.00\nCapital Market\nAll Share Value Index (1984=100)\n25,384.14\n24,980.20\n21,599.57\n36,164.31\n42,482.48\n \nValue of Stocks Traded (Billion Naira)\n437.00\n373.50\n468.17\n591.70\n579.30\n \nAggregate Market Capitalization (Trillion Naira)\n8.22\n11.20\n12.40\n17.43\n19.09\n \nSocial Indicators\nPopulation (million)\n158.90\n163.99\n169.23\n172.17\n174.83\n \nPopulation Growth Rate (%)\n3.20\n3.20\n3.20\n3.20\n3.20\n \nLife Expectancy at Birth (Years)\nNA\nNA\nNA\nNA\nNA\nAdult Literacy Rate (%)\nNA\nNA\nNA\nNA\nNA\nIncidence of Poverty 5/\nNA\nNA\nNA\nNA\nNA\n *Figures and computations for are from/based on newly rebased GDP figures, comprising 44 activity sectors. \nNA indicates not available\n 3/ Core Inflation is measured as the rate of change of all-item Consumer Price Index (CPI) less farm produce.\n 4/ MPR replaced MRR with effect from December 11, 2006.\n 5/ The incidence of poverty in Nigeria was projected to increase from 65.6 per cent in 1996 to 70.0 per cent in 2000.\n However, the result of a Nigeria Living Standard Survey of 2003/2004 from NBS (former FOS), \n 1/ Revised\n 2/ Provisional\nSelected Macroeconomic and Social Indicators (Cont...)\n showed that the incidence of poverty declined to 54.4 per cent in 2003/2004.\n \n \n \n1 \n CENTRAL BANK OF NIGERIA \nREPORT FOR THE FIRST HALF OF 2014 \n \n1.0 \nIntroduction \nThe focus of monetary policy in the first half of 2014 remained the sustenance \nof monetary and price stability. Consequently, the framework for monetary \nmanagement remained an eclectic approach, involving a combination of \ninterest rate and monetary aggregate, with the monetary policy Rate (MPR) \nserving as the anchor for short-term interest rates. To address liquidity surfeit \nin the banking system, the Bank strengthened and sustained its tight \nmonetary policy measures in the first half of 2014 to achieve the objectives of \nmonetary policy consistent with the real gross domestic product growth \ntarget of 7.02 per cent for fiscal 2014. The strengthening of the policy stance \nwas intended to stem the likely inflationary pressures from the huge injection \nfrom the 2014 Federal Government budget of N4.96 trillion, which resulted in \na sizeable deficit of N325.11 billion in the review half year. In addition, liquidity \ninjections into the banking system from AMCOM operations, matured \nsecurities, and monthly statutory revenue releases exerted pressure on the \nforeign exchange market, thus warranting the sustenance of a tight \nmonetary policy stance to stabilize the naira. As in previous periods, the main \ninstrument of monetary management was open market operations (OMO) \ncomplemented by discount window operations, reserve requirements, \nprimary market transactions and interventions in the foreign exchange. \nThe major monetary policy benchmarks for 2014 and the provisional \noutcome as at the end of the first half are shown below: \n \n \n \n \n2 \nTable 1 \nMonetary Policy Benchmarks and Outcomes \n(Growth in % except otherwise stated) \nKey Variables \n2011 \n2012 \n2013 \nJune, 2014 \n \nBench\nmark \nOutcome \nBench\nmark \nOutcome \nBench\nmark \nOutcome \nBench\nmark \nOutcome \nBroad Money Growth \n(M2) \n13.75 \n15.40 \n24.64 \n16.39 \n18.38 \n1.42 \n14.5 \n1.7 \nNarrow Money \nGrowth (M1) \n \n21.49 \n34.71 \n19.07 \n18.38 \n-12.98 \n11.0 \n-6.1 \nBase Money \n(Reserve) Growth \n12.67 \n50.85 \n8.23 \n33.06 \n8.69 \n-25.28 \n16.7 \n-15.0 \nAggregate credit to \nthe domestic \neconomy \nGrowth (Net) \n27.69 \n42.43 \n52.17 \n-7.22 \n47.57 \n9.40 \n28.5 \n0.9 \nCredit to \nGovernment \nGrowth (Net) \n \n52.65 \n61.47 \n-393.81 \n66.59 \n4.56 \n58.54 \n-21.9 \nCredit to the private \nsector Growth \n29.09 \n31.58 \n47.50 \n6.83 \n46.20 \n7.14 \n15.85 \n2.8 \nInflation rate \n10.10 \n10.30 \n11.20 \n12.00 \n9.58 \n8.40*** \n7.5 \n8.2 \nReal GDP Growth \n7.20 \n7.69 \n7.33 \n6.58 \n7.44 \n6.72** \n7.02 \n6.38 \n*Monetary aggregates annualized as at June, 2013; **2nd Quarter growth rate; ***June 2013 inflation rate. \n \n2.0 OPERATIONS OF THE CENTRAL BANK OF NIGERIA \n2.1 \nLiquidity Management \nThe Bank maintained a tight monetary policy stance during the first half of \n2014, focused at achieving the objectives of monetary and price stability. \nAccordingly, the Bank employed a range of instruments to manage the \nliquidity arising from fiscal injections into the banking system and its effects on \nthe general price level. The measures included: retention of the MPR at 12.0 \nper cent with a symmetric corridor of +/-200 basis points; LR at 30.0 per cent; \na band of +/- 3.0 per cent; mid-point of the exchange rate at N155/US$ and \nincrease in the CRR on public sector deposits from 50.0 to 75.0 per cent, and \nprivate sector deposits from 12.0 to 15.0 per cent. Consequently, reserve \nmoney, which stood at N5, 558.92 billion at end- December 2013, contracted \nby 15.0 per cent to N4, 723.07 billion at end-June 2014. This was, however, \nN383.80 billion or 7.5 per cent above the second quarter indicative \nbenchmark of N5,106.87 billion. \n \n \n \n3 \nOpen market operations (OMO) remained the Bank’s primary tool of liquidity \nmanagement. This was complemented by reserve requirements, discount \nwindow operations, standing facilities, and CBN bills. Also, the Bank \nintervened in the foreign exchange market under the retail Dutch Auction \nSystem (rDAS) (spot, forwards, BDCs), at the inter-bank segments. In addition, \nprimary market transactions in government securities continued to be \ndeployed in monetary management. \n2.2 \nMonetary Policy Committee (MPC) Decisions \nThe Monetary Policy Committee (MPC) held three (3) regular meetings in the \nfirst half of 2014, specifically in January, March and May. A summary of the \nkey decisions of the Committee are presented hereunder: \nDate of Meeting \nType of Meeting \nDecisions \nJanuary 20 - 21, 2014 \nRegular \n \nRetained MPR at 12.0 per cent with interest rate \ncorridor of +/- 200 basis points \n \nRetained Liquidity Ratio at 30.0 per cent \n \nIncreased public sector CRR from 50.0 to 75.0 per \ncent \n \nRetained private sector CRR at 12.0 per cent \n \nTook immediate steps to redress the supply-demand \nimbalance in the BDC segment while maintaining \nfocus on anti-money laundering (AML) activities. \nMarch 24 – 25, 2014 \nRegular \n \nRetained MPR at 12.0 per cent with interest rate \ncorridor of +/- 200 basis points \n \nIncreased CRR on private sector deposits by 300 basis \npoints to 15.0 per cent. \nMay 19 – 20, 2014 \nRegular \n \nRetained MPR at 12.0 per cent with interest rate \ncorridor of +/- 200 basis points \n \nRetained public sector CRR at 75.0 per cent and \nprivate sector CRR at 15.0 per cent \n \n \n \n \n \n4 \n2.3 \nDevelopments in the Payments System \nTo further improve the National Payments System, the Bank carried out the \nfollowing activities: \n Introduced Bank Verification Number (BVN) to address the challenge of \nabsence of a unique identifier in the Nigerian banking industry. The BVN \nwould enhance the effectiveness of the “Know Your Customer” (KYC) \nprinciple, with its associated benefits in the reduction of fraud and credit \nrisk; and growth of credit and related products; \n Sensitisation campaigns on the cash-less policy initiative in preparation for \nits take-off in the remaining 30 states of the Federation; \n Revision of the guidelines for e-card issuance and usage in Nigeria; and \n Implementation of industry e-reference portal to enhance processing of \ncustomers’ accounts references. \nBox 1: Bank Verification Number \nThe CBN in collaboration with the Bankers’ Committee, introduced the Bank Verification \nNumber (BVN) with biometric solution, as a unique identifier for all bank customers and is \naimed at revolutionizing the payments system in the country. The BVN authentication is \ntargeted at addressing absence of a unique identifier in the banking industry; check \ncybercrime, ATM and other related financial frauds; and avoid losses of customers’ funds \nthrough compromise of Personal Identification Numbers (PIN) and identity theft. The BVN \nwould also ensure accountability, enhance credit supply as borrowers’ identity is easily \ntractable, and encourage financial inclusion. \nThe BVN enables one person to have a single identity within the financial system irrespective \nof the number of accounts within multiple banks and the enrolment process would be done \nonly once. \nThe enrolment of bank customers for BVN would commence in the second half of 2014 with \nend-December as the deadline. Thereafter, customers would no longer be able to operate \ntheir bank accounts without the BVN. \n \n \n \n \n5 \n2.3.1 Retail Payments System \n2.3.1.1 Cheques \nIn the first half of 2014, the volume and value of cheques cleared decreased \nby 13.5 and 8.9 per cent to 7,144,340 and N3,710.7 billion, respectively, from \n8,257,330 and N4,073.2 billion in the second half of 2013. The development \nwas attributed to the steady rise in the use of e-payment channels. \nFigure 1 \nVolume of Cheques Cleared \n(Million) \n21.1 \n8.3 \n7.1 \n -\n 5.0\n 10.0\n 15.0\n 20.0\n 25.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nMillion\n \n \nFigure 2 \nValue of Cheques Cleared \n(N’ Billion) \n11,492.5 \n4,073.2 \n3,710.7 \n -\n 2,000.0\n 4,000.0\n 6,000.0\n 8,000.0\n 10,000.0\n 12,000.0\n 14,000.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nN'Billion\n \n2.3.1.2 \nElectronic Payments \nThe volume and value of electronic payments rose by 13.0 and 10.2 per cent \nto 199,324,309 and N1,944.6 billion, respectively, in the first half of 2014, from \n176,446,592 and N1,764.0 billion in the second half of 2013. A breakdown of \ne-payment channels indicated that ATM remained the most patronised, \naccounting for 88.1 per cent, followed by mobile payments and PoS \nterminal, with 6.3 and 4.5 per cent, respectively. The web (internet) was the \n \n \n \n6 \nleast patronised, accounting for 1.1 per cent of the total. In terms of value, \nATM accounted for 84.5 per cent; mobile payments, 7.2 per cent; PoS, 7.1 \nper cent; and the web (Internet), 1.2 per cent. \n \nFigure 3 \nClassification of Electronic Payments by Volume \n(First Half 2014) \nATM\n88.1%\nPoS\n4.5%\nWeb \n(Internet)\n1.1%\nMobile\n6.3%\n \nFigure 4 \nClassification of Electronic Payments by Value \n(First Half 2014) \nATM\n84.5%\nPoS\n7.1%\nWeb (Internet)\n1.2%\nMobile\n7.2%\n \n \n \n \n7 \nFigure 5 \nVolume of Electronic Payments \n(Million) \n147.0 \n176.4 \n199.3 \n -\n 50.0\n 100.0\n 150.0\n 200.0\n 250.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nMillion\n \n \nFigure 6 \nValue of Electronic Payments \n(N’Billion) \n1,416.1 \n1,764.0 \n1,944.6 \n -\n 500.0\n 1,000.0\n 1,500.0\n 2,000.0\n 2,500.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nN' Billion\n \n \n2.3.1.2.1 ATM Transactions \nThe number of ATMs deployed stood at 14,764 at end-June 2014, \nrepresenting 15.8 per cent increase above 12,755 at end-December 2013. \nATM transactions increased in both volume and value by 10.6 and 6.1 per \ncent to 175,506,932 and N1,636.4 billion in the first half of 2014, from \n158,629,927 and N1,542.6 billion in the second half of 2013, respectively. \n \n \n \n8 \nFigure 7 \nVolume of ATM Transactions \n(Million) \n136.7 \n158.6 \n175.5 \n -\n 20.0\n 40.0\n 60.0\n 80.0\n 100.0\n 120.0\n 140.0\n 160.0\n 180.0\n 200.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nMillion\n \n \nFigure 8 \nValue of ATM Transactions \n(N’ Billion) \n1,286.3 \n1,542.6 \n1,636.4 \n -\n 200.0\n 400.0\n 600.0\n 800.0\n 1,000.0\n 1,200.0\n 1,400.0\n 1,600.0\n 1,800.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nN' Billion\n \n2.3.1.2.2 Web Transactions \nThe volume and value of web (internet) transactions in the first half of 2014 \nincreased by 24.5 and 15.6 per cent to 2,230,353 and N30.7 billion, from \n1,791,988 and N26.6 billion in the second half of 2013, respectively. The \ndevelopment was as a result of increased awareness and acceptance of \nthis mode of payment. \n \n \n \n9 \nFigure 9 \nVolume of Web Transactions \n(Million) \n1.1 \n1.8 \n2.2 \n -\n 0.5\n 1.0\n 1.5\n 2.0\n 2.5\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nMillion\n \n \nFigure 10 \nValue of Web Transactions \n(N’Billion) \n20.7 \n26.6 \n30.7 \n -\n 5.0\n 10.0\n 15.0\n 20.0\n 25.0\n 30.0\n 35.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nN'Billion\n \n \n2.3.1.2.3 Point of Sale (PoS) Transactions \nThe number of PoS terminals deployed increased slightly by 1.4 per cent to \n121,886 at end-June 2014 from 120,191 at end-December 2013. PoS \ntransactions increased in both volume and value by 44.8 and 32.7 per cent \nto 8,971,501 and N137.7 billion in the first half of 2014, from 6,194,467 and \nN103.8 billion in the second half of 2013, respectively. The development was \nattributed to increased public awareness and usage of the channel. \n \n \n \n10 \nFigure 11 \nVolume of PoS Transactions \n(Million) \n3.2 \n6.2 \n9.0 \n -\n 2.0\n 4.0\n 6.0\n 8.0\n 10.0\nFirst Half 2013\nSecond Half 2013\nFirst Harf 2014\nMillion\n \n \nFigure 12 \nValue of PoS Transactions \n(N’Billion) \n57.2 \n103.8 \n137.7 \n -\n 50.0\n 100.0\n 150.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nN'Billion\n \n2.3.1.2.4 Mobile Payments \nThe volume of mobile payments increased by 27.9 per cent to 12,575,523 in \nthe first half of 2014 over the level in the second half of 2013. Also, the value \nrose by 53.5 per cent to N139.7 billion above the level in the preceding \nperiod. The increase was due to the effect of the sensitisation on the use of \nmobile payments as alternative and easier mode of payment. \n \n \n \n11 \nFigure 13 \nVolume of Mobile Transactions \n(Million) \n6.0 \n9.8 \n12.6 \n -\n 2.0\n 4.0\n 6.0\n 8.0\n 10.0\n 12.0\n 14.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nMillion\n \nFigure 14 \nValue of Mobile Transactions \n(N’ Billion) \n51.8 \n91.0 \n139.7 \n -\n 20.0\n 40.0\n 60.0\n 80.0\n 100.0\n 120.0\n 140.0\n 160.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nN'Billion\n \n \n2.3.2 Wholesale Payments System \n2.3.2.1 Real Time Gross Settlement (RTGS) System \nThe volume and value of inter-bank transfers through the Real-Time Gross \nSettlement (RTGS) system increased by 61.0 and 37.8 per cent to 323,414 and \nN78,011.7 billion, respectively, at end-June 2014, from 200,918 and N56,610.7 \nbillion in the second half of 2013. This indicated enhanced efficiency in the \nsystem following the upgrade of the RTGS in December 2013. \n \n \n \n \n12 \nFigure 15 \nVolume of RTGS Transactions \n(Million) \n \n197,220.0 \n200,918.0 \n323,414.0 \n -\n 100,000.0\n 200,000.0\n 300,000.0\n 400,000.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\n \n \n \nFigure 16 \nValue of RTGS Transactions \n(N’ Billion) \n55,005.3 \n56,610.7 \n78,011.7 \n -\n 20,000.0\n 40,000.0\n 60,000.0\n 80,000.0\n 100,000.0\nFirst Half 2012\nSecond Half 2012\nFirst Half 2013\nN'Billion\n \n \n \n2.3.2.2 \nNigeria Interbank Settlement System Instant Payment (NIP) \nThe volume and value of NIP transactions rose by 50.5 and 37.1 per cent, to \n16,839,648 and N9,137.8 billion, respectively, in the first half of 2014, from \n11,186,930 and N6,666.2 billion in the second half of 2013. The increased \npatronage was attributed to users’ preference for instant settlement. \n \n \n \n13 \nFigure 17 \nVolume of NIP Transactions \n(Million) \n5.9 \n11.2 \n16.8 \n -\n 5.0\n 10.0\n 15.0\n 20.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nMillion\n \nFigure 18 \nValue of NIP Transactions \n(N’Billion) \n4,178.8 \n6,666.2 \n9,137.8 \n -\n 1,000.0\n 2,000.0\n 3,000.0\n 4,000.0\n 5,000.0\n 6,000.0\n 7,000.0\n 8,000.0\n 9,000.0\n 10,000.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nN'Billion\n \n \n2.3.2.3 Nigeria Interbank Settlement System Electronic Fund Transfer \n(NEFT) \nIn the review period, the volume and value of NEFT transactions decreased \nby 11.5 and 2.8 per cent to 14,260,732 and N7,356.9 billion, from 16,115,171 \nand N7,569.2 billion, respectively, in the second half of 2013. The decline was \nattributed to users’ preference for NIP and RTGS platforms which were real-\ntime online. \n \n \n \n \n14 \nFigure 19 \nVolume of NEFT Transactions \n(Million) \n13.9 \n16.1 \n14.3 \n 12.5\n 13.0\n 13.5\n 14.0\n 14.5\n 15.0\n 15.5\n 16.0\n 16.5\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\nMillion\n \n \nFigure 20 \nValue of NEFT Transactions \n(N’Billion) \n \n \n \n2.3.3 CURRENCY OPERATIONS \n2.3.3.1 The Issue of Legal Tender \nThe Bank approved an indent of 1,760.1 million, 29.6 per cent lower than the \n2,501.72 ordered in 2013. This was expected to meet the currency needs of \nthe economy in 2014. The entire indent of 1,760.1 million pieces of banknotes \nwas ordered from the Nigerian Security Printing and Minting (NSPM) Plc, 5.5 \nper cent below the 1,861.7 pieces for 2013. \n \n \n \n15 \nIn the first half of 2014, NSPM Plc delivered 229.8 million pieces or 13.1 per \ncent of the total ordered, compared with 149.2 million pieces or 8.0 per cent \ndelivered in the corresponding half of 2013. Of the total 620 million pieces of \nbanknotes awarded to foreign printers in December 2013, 330.8 million \npieces or 53.3 per cent were received, while 8.98 million pieces of good-\novers of N100, N20 and N10 notes were from various foreign printers at end-\nJune 2014. \nThe Bank continued the clean notes policy in the first half of 2014 through the \nsorting and withdrawal of old and used banknotes activities, replacing them \nwith new ones. A total of 150,445 boxes valued at N965.8 billion were \nprocessed, while 144,313 boxes valued at N4,054.9 million were audited. Thus, \nthe number of boxes processed and audited increased by 50.3 and 53.7 per \ncent, respectively, over the levels in the corresponding half of 2013. \nFurthermore, 147,987 boxes of unfit notes, valued at N608.4 billion, consisting \nof various denominations, were withdrawn and destroyed in the first half of \n2014, compared with 25,913 boxes, valued at N329.3 billion in the first half of \n2013. \nTo ensure the successful implementation of the Nigerian Cash Holding \nScheme, the Bank finalized arrangements to commence engagement with \nstakeholders, including DMBs, NIBSS, cash-in-transit (CIT) and sorting \ncompanies. The exercise was to revalidate the implementation model and \nelicit stakeholders’ commitment to the project. Also, as part of the \nimplementation plan, the procedures for custody of CBN cash with third-\nparty companies were being reviewed. Upon completion, the Scheme \nwould reduce the cost of cash management; improve on demand planning \nand supply forecasting; and enhance efficiency in processing and \ndistribution on shared services through an integrated cash management \nplatform. \n2.3.3.2 Currency-in-Circulation (CIC) \nCurrency-in-circulation (CIC) at end-June 2014 stood at N1,497.14 billion, \nrepresenting an increase of 5.0 per cent over the level at end-June 2013. \n \n \n \n16 \nSpecifically, there were 4,914.3 billion pieces of banknotes and 1,998.7 pieces \nof coins worth N1,495.90 billion and N1.24 billion, respectively. This showed an \nincrease in the value of banknotes and coins in circulation by 5.0 and 0.2 per \ncent over the levels in the corresponding first half of 2013. The growth in CIC \nreflected the dominance of cash in the economy and increase in economic \nactivities consistent with its historical trend. \nThe N5, N10, N20 and N50 banknotes accounted for 55.2 per cent of the \nnumber of banknotes in circulation and represented 3.7 per cent of the \nvalue of banknotes in circulation. At end-June 2014, the N200 and N20 \nbanknotes in circulation fell by 48.9 and 5.3 per cent, respectively, while the \nN1000, N500, N100, N50, N10 and N5 denominations rose by 10.5, 3.0, 4.9, \n19.3, 32.1 and 13.6 per cent, respectively, over the levels in the first half of \n2013. \nTable 2 \nStructure of the CIC \nVolume\nValue\nVolume\nValue\nVolume\nValue\nVolume\nValue\nVolume\nValue\n(million)\n(N billion)\n(million)\n(N billion)\n(million)\n(N billion)\n(million)\n(N billion)\n(million)\n(N billion)\nN2\n107.83\n0.22\n107.87\n0.22\n107.82\n0.22\n107.68\n0.21\n107.49\n0.21\nN 1\n530.11\n0.53\n581.23\n0.58\n616.31\n0.62\n616.24\n0.62\n616.37\n0.62\n50k\n434.48\n0.22\n529.72\n0.26\n581.07\n0.29\n579.50\n0.29\n579.77\n0.29\n25k\n196.53\n0.049\n339.12\n0.08\n347.80\n0.087\n347.80\n0.087\n348.23\n0.087\n10k\n212.82\n0.021\n302.89\n0.03\n315.31\n0.032\n315.31\n0.031\n315.55\n0.032\n1k\n48.74\n0.0048\n12.75\n0.08\n16.70\n0.0017\n16.70\n0.0017\n31.24\n0.0031\nSub Total\n1,530.51\n1.04\n1,873.58\n1.26\n1,985.01\n1.25\n1,983.23\n1.24\n1,998.65\n1.24\nNotes\nN1000\n663.76\n663.7\n959.45\n959.45\n1,071.32\n1,071.32\n954.72\n954.72\n1,055.14\n1,055.14\nN500\n1,027.78\n513.89\n726.22\n363.10\n714.98\n357.49\n599.75\n299.87\n617.86\n308.93\nN200\n501.27\n100.25\n621.75\n124.31\n605.34\n121.07\n449.90\n90.00\n229.86\n45.97\nN100\n341.12\n34.11\n507.90\n50.77\n355.92\n35.59\n286.20\n28.62\n300.12\n30.01\nN50\n782.27\n39.11\n777.94\n38.89\n351.63\n17.58\n433.07\n21.65\n516.55\n25.83\nN20\n752.65\n15.1\n788.67\n15.77\n974.93\n19.50\n1,125.14\n22.50\n1,065.56\n21.31\nN10\n680.61\n6.81\n789.13\n7.89\n546.91\n5.47\n463.81\n4.64\n612.53\n6.13\nN5\n837.93\n4.19\n865.38\n4.33\n490.37\n2.45\n455.03\n2.27\n516.72\n2.58\nSub-Total\n5,587.39\n1,377.16\n6,036.43\n1,564.50\n5,111.40\n1,630.47\n4,767.62\n1,424.27\n4,914.34\n1,495.90\nTotal\n7,117.90\n1,378.20\n7,910.01\n1,565.76\n7,096.41\n1,631.72\n6,750.85\n1,425.51\n6,912.99\n1,497.14\n Table 2 :Currency Structure, 2010 - June 2014\nJun-14\nJun-13\n2012\n2011\nCoins\n2010\nSource: CBN \n \n \n \n \n17 \n2.4 Financial Sector Surveillance \n2.4.1 Banking Supervision \nDuring the review period, the CBN intensified its supervisory and surveillance \nactivities on the banking sector with the overall objective of promoting the \nhealth of the financial institutions. To this end, the Bank adopted various \napproaches, including regular review of banks’ periodic returns, spot checks, \non-site monitoring and special investigations. \nThe Bank concluded an on-site examination of a foreign subsidiary of a bank \nas part of its oversight of cross-border activities. In addition, AML/CFT spot \ncheck on thirteen (13) banks was carried out to ascertain their compliance \nwith the extant laws and regulations. Sequel to the exercise, five (5) banks \nwere sanctioned for contravening various AML/CFT laws and regulations. \nThe CBN continued its effort to enhance capacity and information sharing \namong supervisors during the review period. The Bank hosted officials of the \nBank of Tanzania on a study tour on regulation and supervision of \ndevelopment finance institutions. It also hosted officials of the Bank of \nUganda to discuss avenues for enhancing oversight of cross-border \noperations of banking groups. Furthermore, the CBN hosted the inaugural \nmeeting of the College of Supervisors on the United Bank for Africa Group in \nAbuja, Nigeria. The College of Supervisors for the West African Monetary Zone \n(CSWAMZ) also held two (2) meetings in January and April in The Gambia \nand Ghana, respectively, to review supervisory practices and health of the \nfinancial institutions in the sub-region. \nThe CBN, in collaboration with Enhancing Financial Innovation and Access \n(EFInA), a non-governmental organization; and the Islamic Finance Council, \nUK, organized a 4-day capacity building programme for Nigerian sharia \nscholars. The objective of the programme was to develop skills of Sharia \nscholars on conventional banking and finance practices and of Islamic \nfinance. In addition, the CBN participated in several other meetings of the \nInternational Islamic Liquidity Management Corporation (IILM) and the \nIslamic Financial Services Board (IFSB). The meetings resolved to develop \n \n \n \n18 \nguidance notes to the adoption of Basel III liquidity standards and the revised \ncore-principles for Islamic finance regulation, among others. \nThe implementation of the 2010 banking reform initiatives continued during \nthe review period. Access Bank Plc was issued with a commercial banking \nlicence with international authorization, while First Bank Plc obtained HoldCo \nand commercial banking licences with international authorization. In \naddition, Associated Discount House was granted approval-in-principle (AIP) \nto convert to a merchant bank. Also, Union Bank of Switzerland AG (UBS AG) \nwas granted final approval to establish a representative office in Nigeria. In \nthe other financial institutions sub-sector, 18 and 28 microfinance banks were \ngranted AIP and final licences, respectively. \nThe Bank’s Credit Risk Management System (CRMS) continued to provide a \nsupportive platform for the management of credit risk in the banking industry. \nAt end-June 2014, the number of registered borrowers in the CRMS database \nincreased by 21.64 per cent to 115,980, compared with 95,347 at end-\nDecember 2013. The number of borrowers with outstanding facilities rose by \n37.59 per cent to 46,027 during the review period compared with 33,452 at \nend-December 2013. Similarly, the total number of credits in the database \nrose by 58.79 per cent to 72,541 at end-June 2014 compared with 45,682 at \nend-December 2013. During the review period, forty-three (43) requests on \ncustomers’ credit records in the CRMS were processed, compared with fifty-\nthree (53) at end-December 2013. The developments were attributed to the \nintensified effort on the part of the Bank to ensure compliance with CRMS \nguidelines. \nThe number of private credit bureaux (PCBs) remained at three (3) at end-\nJune 2014, and continued to complement the CRMS in the credit \nadministration process. The activities of the PCBs were buoyed by increased \npatronage by both financial and non-financial institutions during the review \nperiod. \n \n \n \n19 \nFigure 21 \nCredit Risk Management System (CRMS) Statistics \n(First Half 2014) \n95,347\n115,980\n33,452\n46,027\n45,682\n72,541\nEnd-Dec 2013\nEnd-June 2014\nNo of Registered Borrowers\nNo of Borrowers with Outstanding Facilities\nNo of Credits\n \nThe Bank commenced a parallel-run of the Basel II alongside Basel I minimum \ncapital adequacy computation during the first half of 2014. Consequently, \nbanks were required to render their returns on Basel II format on a monthly \nbasis. In addition, the submission of DMBs’ Internal Capital Adequacy \nAssessment Process (ICAAP) documents to the Bank commenced in the \nreview period. \n2.4.2 Routine/Target Examination \nA joint CBN/NDIC risk assets assessment examination of all banks was \nconducted to ascertain the quality of their risk assets and adequacy of loan \nloss provisioning for the approval of their 2013 annual accounts. Having met \nthe required provisioning, the 2013 annual accounts of all the banks were \napproved. Also in the review period, twenty-three (23) banks were visited in \norder to monitor the implementation of recommendations made in the RBS \nExamination Reports as at September 30, 2013. The review showed that over \neighty (80) per cent of the recommendations had been implemented by the \nbanks, while the rest were at various stages of implementation. \nFurthermore, a risk asset assessment of two (2) discount houses was carried \nout in the first half of 2014 to verify compliance with CBN guidelines. The \noutcome of the exercise led to the sanctioning of one institution for \nbreaching the extant guidelines. A routine examination of the three (3) \n \n \n \n20 \nprivate credit bureaux was also conducted during the period to ascertain \nthe level of compliance with the guidelines for the sub-sector. The major \nobservations bordered on issues related to board and management \nstructure, customer dispute resolution, data exchange agreements, and \ninternal audit. Supervisory letters were issued to two (2) institutions to \nimplement the recommendations. \n2.4.3 Routine/Special Foreign Exchange Examinations \nThe Bank conducted the quarterly review of the foreign exchange activities \nof twenty (20) banks to ascertain their compliance with extant foreign \nexchange laws and regulations. The review covered foreign exchange \noperations for the period, October 1, 2013 to March 31, 2014. The major \ninfractions by banks were: failure to issue certificates of capital importation to \nbeneficiaries within the stipulated 24 hours of receipt; incomplete \ndocumentation for visible and invisible import trade transactions; rendition of \ninaccurate returns; and non-compliance with approved net open position \nlimits. The CBN obtained responses from banks with respect to the infractions \nand imposed appropriate penalties. \nA special investigation on the foreign exchange sales by banks to bureaux-\nde-change (BDCs) was carried out between January and May 2014. The \nfocus of the exercise was to determine the aggregate foreign exchange \npurchase of BDCs and ascertain if they operated in accordance with \nsubsisting foreign exchange rules and guidelines. The investigation revealed \nthat the BDCs utilised a significant proportion of total foreign exchange \nsourced by banks from the official and autonomous markets. The affected \ninstitutions were sanctioned accordingly. \nTo enhance the skills of on-site Examiners, particularly in the area of the \napplication of IT Audit tools, a special in-house training on ACL, SQL and \nadvanced Excel (code named iSight Project) was carried out. Twenty- four \n(24) bank examiners were trained. The benefits of the training exercise were \nevident in recent foreign exchange examinations with the speedy, detailed \nand incisive analysis of spooled banks’ operational backup data. \n \n \n \n21 \n2.4.4 Banking Sector Soundness \nAt end-June 2014, the industry non-performing loans (NPL) ratio stood at 3.50 \nper cent, compared with 3.23 and 3.65 per cent at end-December 2013 and \nend-June 2013, respectively. The reduction in the NPL ratio relative to the \ncorresponding period of 2013 was attributed to the improved risk \nmanagement practices of banks. The industry liquidity ratio stood at 42.66 \nper cent at end-June 2014, compared with 50.6 and 67.8 per cent at end-\nDecember 2013 and end-June 2013, respectively. The decline was attributed \nto increase in CRR on both public and private sector deposits in the review \nperiod. \n2.4.5 Compliance with the Code of Corporate Governance for Banks in \n Nigeria \nThe Revised Code of Corporate Governance for Banks and Discount Houses \nwas issued by the CBN to align its provisions with current realities and global \nbest practice, eliminate ambiguities and strengthen governance practices in \nthe institutions. To ensure full implementation, banks and discount houses \nwere required to render quarterly returns to the CBN. Also, as part of \ngovernance structure, non-interest banks (NIBs) were required to submit \napplications for approval of products and advertisement materials to the \nFinancial Regulation Advisory Council of Experts (FRACE) on NIBs. \nConsequently, sixteen (16) applications from Jaiz Bank, Sterling Bank and \nStanbic IBTC Bank non-interest banking windows as well as Tijara Micro \nFinance Bank (proposed) were approved by the Council in the review \nperiod. \n2.4.6 Financial Literacy and Consumer Protection \nDuring the review period, four hundred and twenty eight (428) new \ncomplaints \nwere \nreceived \non \nexcess \ncharges, \nfrauds, \ndishonored \nguarantees, unauthorized deductions, card related and other electronic \nchannels, compared with 759 complaints in the corresponding period of \n2013. Overall, a total of 497 complaints, including those outstanding from the \nprevious periods were resolved, compared with 88 in the corresponding \n \n \n \n22 \nperiod of 2013. Total claims against the banks during the period in local and \nforeign currencies amounted to N7.38 billion and US$311,359.00, respectively, \ncompared with N5.73 billion and US $1.05 million at end-June 2013. Total \nrefunds by banks stood at N3.87 billion and US$176,358, compared with N1.45 \nbillion and US$829.22 at end-June 2013. \nTo strengthen the consumer complaints management and resolution process \nof the Bank, an automated consumer complaints management system was \ndeployed in ten (10) selected banks for the processing of complaints. Also, a \nnew circular reviewing the timeline from 14 to 30 days for the resolution of \ncomplaints on excess charges on loans was issued during the review period. \nThe extension became necessary to address concerns by banks that the \ninitial resolution time was insufficient. \nThe Bank conducted a compliance examination and spot check on banks \nto ensure compliance with the complaint management guidelines and \nascertain the effectiveness of banks’ complaints management systems \nduring the review period. The exercise revealed remarkable improvements in \nthe complaints management system of most of banks. The Bank directed \ndefaulting banks to make appropriate refunds to affected customers \neffective from the date of the revised Guide to Bank Charges (GBC) and \nensure strict compliance henceforth. \nThe Bank conducted consumer financial literacy sensitization and awareness \nprogrammes in Enugu and Ibadan in the review period. In addition, a \nNational Baseline Survey was conducted to determine the current levels of \nfinancial literacy in the country. The outcome of the exercise was being \nawaited and would serve as a basis for assessing the impact of the various \nfinancial literacy initiatives on the economy. \n \n \n \n \n23 \n2.4.7 Fraud and Forgery \nThe number of reported cases of fraud and forgeries was 5,197, involving \nN16.82 billion in the first half of 2014. This was higher than the 2,478 cases, \ninvolving N22.4 billion in the corresponding period of 2013. Of this amount, \nthe actual loss incurred by banks was N1.72 billion, compared with N3.82 \nbillion in the corresponding period of 2013. The frauds were executed \nthrough diverse means, including fraudulent withdrawals from customers’ \naccount, suppression and conversion of customers’ deposit, theft, illegal \nfunds transfer, cheque defalcations, and fraudulent ATM withdrawals. In most \ncases, these frauds were perpetrated by outsiders, although there were \ninstances where bank employees were also culpable. \nThere was a significant decrease in the amount involved and the actual \nlosses to the banking industry, when compared with the corresponding \nperiod in the previous year. This is the result of increased supervisory oversight, \nstronger internal control measures adopted by banks, and improved use of \ntechnology and a more thorough approach towards hiring employees in \nhighly sensitive areas of banks’ operations. \n2.4.8 Cross Border Activities \nAt end-June 2014, the number of foreign subsidiaries of Nigerian banks stood \nat sixty-two (62), compared with sixty-five (65) at end-December 2013. \nSimilarly, the number of representative offices of Nigerian banks abroad \ndeclined to seven (7) from eight (8) at end-December 2013. The \ndevelopment was due to Keystone Bank’s divestment of its subsidiaries in \nLiberia, Sierra Leone and The Gambia. \nAt the end of June 2014, the Bank had conducted one (1) on-site \nexamination of ICB Ghana, a foreign subsidiary of First Bank of Nigeria, and \nthe report was yet to be issued. The on-site examinations of foreign \nsubsidiaries of other banks were scheduled to take place in the second half \nof the year. \n \n \n \n24 \n2.4.9 Examination of Other Financial Institutions \nDuring the first half of 2014, on-site examination was conducted on 367 \nmicrofinance banks (MFBs), representing 43.0 per cent of the 854 existing \nMFBs. The examination report revealed improvement in the practice of \nmicrofinance banking business by operators and higher levels of risk \nmanagement practices among the institutions. \nAnalysis of the reports on examination conducted in the fourth quarter of \n2013 was made in the review period. The exercise revealed that the \ninstitutions had varying operational/financial challenges. Consequently, \nsupervisory letters were issued to the institutions as follows: \n Three (3) FCs were adjudged marginal and were required to take \nnecessary corrective actions to restore their prudential ratios to the \nprescribed minimum; \n Thirty (30) FCs were adjudged as unsound/insolvent and were directed \nto recapitalize to meet within 90 days, the adjusted minimum capital of \nN20 million stipulated in the Guidelines and take necessary actions to \nmeet other prudential requirements; and \n Two (2) FCs undergoing restructuring were given 180 days to complete \nthe restructuring exercise, failing which their licences would be revoked. \nFollowing the setting up of a task force for regular monitoring of foreign \nexchange utilization by BDCs, spot-checks were conducted on 68 BDCs \nduring the review period by the task force. The exercise revealed that most \nBDCs were operating in disregard for their operational rules and guidelines. It \nalso showed other severe regulatory concerns in the operation of BDCs, \nincluding weak and ineffective operational structures with negative \nconsequences on the conduct of monetary policy. Consequently, \nappropriate sanctions were meted to the erring institutions. \n \n \n \n25 \nRoutine examinations were also conducted on the three (3) private credit \nbureaux and two (2) discount houses in operation to verify compliance with \nextant CBN guidelines. \n2.4.10 Anti-Money Laundering/Combating of Financing of Terriorism/Off-Site \n Risk Based Supervision (RBS) Assessment Matrix \nDuring the review period, the Bank, with technical assistance from the \nInternational Monetary Fund (IMF), concluded the development of the Off-\nsite Risk Assessment Methodology (ORAM). In order to finalise the framework, \na pilot-test would be conducted on three selected banks, based on their size \n(small, medium and large), in the second half of the year. The ORAM when \nfully deployed would validate and streamline how the input data (Form 001) \nwas generated as well as validate the authenticity of the AML/CFT mitigants \nput in place by financial institutions. \nAlso, a letter was issued to all banks and discount houses in the review period \nto re-emphasize provisions of an earlier circular on the status and reporting \nlines of Chief Compliance Officers of banks and discount houses. \nConsequently, all banks and discount houses were directed to ensure the \nfollowing: \n Chief Compliance Officers (CCOs) in these institutions should have a \nminimum grade of General Manager in their institutions; \n The CCO should report to the Board of Directors with dotted reporting \nlines to the MD/CEO, without interlocking roles; and \n The compulsory attendance by the Chief Compliance Officer at the \nmonthly meetings of the Committee of Chief Compliance Officers of \nBanks in Nigeria (CCCOBIN). \nThe primary intention of these directives was to ensure that the CCOs of \nbanks and discount houses have sufficient authority to apply the provisions of \nthe relevant Acts and Circulars on money laundering at all levels of their \ninstitutions. \n \n \n \n26 \n2.5 \nForeign Exchange Market and Management \nThe Retail Dutch Auction System (rDAS) remained the mechanism for \nmanaging foreign exchange by the Bank within a band of N155/US$ ± 3%. \nDuring the review period, aggregate demand for foreign exchange grew \nsignificantly by 27.4 and 115.3 per cent to US$28.01 billion, above the levels in \nthe preceding half year and the corresponding period of 2013, respectively. \nThe total sales of foreign exchange to the market edged-up by 63.0 and 27.2 \nper cent to US$25.2 billion above the respective levels in the first and second \nhalves of 2013. The exchange rate of the naira per US dollar at the official \nwindow remained stable, while the Bureau-de-Change (BDC) and interbank \nrates depreciated relative to the levels in the first and second halves of 2013. \n2.5.1. Spot Segment \nA total of fifty (50) auctions were held at the spot segment of the foreign \nexchange market, as against forty-seven (47) in the corresponding period of \n2013. Aggregate demand for foreign exchange increased to US$28.01 billion \nin the period under review, from US$13.01 billion and US$21.99 billion in the \nfirst and second halves of 2013, respectively. The development was due to \ndividend repatriation by foreign firms, particularly in the first quarter of the \nyear. A disaggregation of total demand showed that rDAS-spot amounted \nto US$23.91 billion (85.4%), and BDCs, US$3.52 billion (12.6%). On the supply \nside, the total foreign exchange sold spot was US$25.17 billion, an increase of \n63.0 and 27.2 per cent, over the respective levels in the first and second \nhalves of 2013. Of total sales, spot rDAS constituted US$17.23 billion (68.4%); \nBDCs, US$3.52 billion (14.0%); interbank, US$3.35 billion (13.3%). The balance \nwas accounted for by matured rDAS forward. There was no swap transaction \nin the review period. \n \n \n \n27 \nFigure 22 \nDemand, Supply and Net Demand of Foreign Exchange Spot Market \n(US$ Million) \n-4.00\n-2.00\n0.00\n2.00\n4.00\n6.00\n8.00\nForeign Exchange Demand\nForeign Exchange Supply\nNet Foreign Exchange Demand\n \n2.5.2. Forwards Segment \nA total of nine (9) auctions were held at the rDAS-forwards segment of the \nforeign exchange market for 1-, 2- and 3-month forwards contracts. \nAuthorised dealers did not patronise the window in the last two months of the \nfirst half of 2014 owing to stable and favourable rates at the spot segment. \nThe aggregate demand for rDAS-forwards in the review period amounted to \nUS$0.58 billion, compared with US$0.21billion in the second half of 2013. The \ndemand for 1-, 2- and 3-month tenors were US$0.30 billion, US$0.22 billion and \nUS$0.06 billion, representing 51.4, 38.1 and 10.5 per cent of the total, \nrespectively. The growth in demand at the rDAS-forwards window signified \nincreased hedging activities within the review period. The Bank sold a \ncumulative of US$0.57 billion forwards contracts that comprised 1-month \ntenor, US$0.30 billion (53.3%); 2-month tenor, US$0.22 billion (39.3%); and 3-\nmonth tenor, US$0.04 billion (7.4%). In the first half of 2014, forwards contract \namounting to US$1.08 billion was disbursed at maturity. The performance in \nthe rDAS-forwards segment showed preference for the 1-month tenor due to \nexpectation of low exchange rate risk. \n2.5.3. Exchange Rate Movements \nThe exchange rate of the naira vis-à-vis the US dollar was relatively stable at \nthe official window due to increased intervention by the Bank to stem \n \n \n \n28 \ndemand pressure. However, the rates depreciated at the other segments of \nthe market. \n2.5.3.1. Spot Exchange Rates \nThe average exchange rate of the naira to the US dollar at the rDAS segment \naveraged N157.29/US$ in the first half of 2014. This represented a marginal \nappreciation of the naira per US dollar by 0.01 and 0.02 per cent relative to \nthe levels in the first and second halves of 2013, respectively. However, at the \ninterbank and BDC segments, the average exchange rate depreciated by \n2.7 and 5.8 per cent to N162.55 and N169.49 per US dollar, respectively, \nrelative to the levels in the first half of 2013. Compared with the second half \nof 2013, the naira fell by 1.4 and 2.5 per cent to the US dollar at the interbank \nand BDC segments, respectively. Consequently, the premium between the \naverage rDAS and BDC rates widened from 5.0 per cent in the second half of \n2013 to 7.8 per cent and exceeded the international benchmark of 5.0 per \ncent. The premium between the average interbank and rDAS rates also \nwidened to 3.3 per cent from 0.6 and 1.9 per cent in the first half of 2013 and \nthe preceding half year, respectively. \nFigure 23 \nExchange Rate Movements \n(N/US$) \n145.00\n150.00\n155.00\n160.00\n165.00\n170.00\n175.00\nJan-13\nFeb-13\nMar-13\nApr-13\nMay-13\nJune-13\nJuly-13\nAug-13\nSep-13\nOct-13\nNov-13\nDec-13\nJan-14\nFeb-14\nMar-14\nApr-14\nMay-14\nJun-14\nN/US$\nInterbank\nBDC\nrDAS/wDAS\n \n \n \n \n \n29 \nFigure 24 \nrDAS/Bureau-de-Change Foreign Exchange (N/US$) Premium \n(Per cent) \n0.00\n1.00\n2.00\n3.00\n4.00\n5.00\n6.00\n7.00\n8.00\n9.00\n10.00\nJan-13\nFeb-13\nMar-13\nApr-13\nMay-13\nJune-13\nJul-13\nAug-13\nSep-13\nOct-13\nNov-13\nDec-13\nJan-14\nFeb-14\nMar-14\nApr-14\nMay-14\nJun-14\nPer cent\n \nThe end-period exchange rate of the naira against the US dollar depreciated \nby 0.02 and 1.9 per cent to N157.29/US$ and N162.95/US$ at the rDAS and \ninterbank segments, respectively. It, however, appreciated by 2.4 per cent at \nthe BDC segment to N168.00/US$, relative to the level at end-December \n2013. In comparison with the corresponding period of 2013, the naira, at the \nrDAS segment, appreciated by 0.01 per cent, but depreciated by 0.2 and 3.6 \nper cent at the interbank and BDC segments, respectively. \n2.5.4. Foreign Exchange Flows \nForeign exchange inflow through the economy grew by 6.0 and 2.4 per cent \nto US$75.64 billion over the respective levels in the first and second halves of \n2013. Of this, inflow through autonomous sources accounted for 69.7 per \ncent of the total, while the balance of 30.3 per cent was through the CBN. \nAutonomous inflow rose by 2.2 and 0.4 per cent to US$52.75 billion above the \nrespective levels in the first and second halves of 2013. A disaggregation of \ninflow showed that invisibles accounted for US$48.83 billion; non-oil export \nreceipts by banks, US$3.65 billion; and external accounts purchases, US$0.27 \nbillion. Invisibles comprised over-the-counter (OTC) purchases (by banks from \noil companies, capital importations, home remittances and other purchases) \nand ordinary domiciliary account purchases accounted for US$29.65 billion \nand US$19.18 billion of the total, respectively. \n \n \n \n30 \nTotal foreign exchange outflow through the economy increased by 52.7 and \n18.3 per cent to US$29.09 billion, over the levels at end-June and end-\nDecember 2013, respectively. \nOverall, the net foreign exchange inflow through the economy stood at \nUS$46.55 billion, compared with US$52.32 billion and US$49.27 billion in the \ncorresponding period and second half of 2013, respectively. \nForeign exchange inflow through the CBN grew by 15.9 and 7.3 per cent to \nUS$22.89 billion above the levels in the corresponding and preceding half \nyear, respectively. This was attributed to enhanced earnings from crude oil \nexports occasioned by favourable international crude oil prices. Of the total, \nreceipts from crude oil sales rose by 10.8 and 16.8 per cent to US$21.03 billion \nabove the levels in the first and second halves of 2013, respectively. The non-\noil component increased by 139.9 per cent to US$1.86 billion, compared with \nUS$0.78 billion and US$3.31 billion at end-June and end-December 2013, \nrespectively. \nThe cumulative foreign exchange outflow through the Bank rose by 51.2 and \n21.5 per cent to US$28.50 billion above the levels in the corresponding and \nthe preceding half year, respectively. The development was attributed, \nlargely, to the growth in rDAS utilisation by 63.0 and 27.2 per cent to US$25.17 \nbillion relative to the respective levels in the first and second halves of 2013. \nA disaggregation of rDAS utilisation showed that sales to rDAS-spot stood at \nUS$17.23 billion (60.5%); interbank, US$3.34 billion (11.7%); BDCs, US$3.52 billion \n(12.3%); and rDAS-forwards, US$1.08 billion (3.8%). \nOutflow through other official payments fell by 12.4 per cent to US$2.56 billion \nbelow the level in the first half of 2013. Of this, payments to international \norganisations and embassies, US$0.18 billion; parastatals and estacode, \nUS$0.60 billion; NNPC/joint venture cash (JVC) calls, US$1.56 billion; \ncontributions/grants, US$0.14 billion and miscellaneous items, US$0.08 billion. \nFurthermore, outflow through drawings on letters of credit (L/Cs) and national \n \n \n \n31 \npriority projects in the review period tapered by 4.6 and 27.6 per cent to \nUS$0.19 billion and US$0.04 billion, respectively. \n \nFigure 25 \nForeign Exchange Disbursements through the CBN \n(First Half 2014) \nEurobond Proceed \nTransfers\n1.2%\nDrawings on L/Cs\n0.7%\nExternal Debt \nServices\n0.6%\nInterbank \n11.7%\nOther Official \nPayments\n9.0%\nNational Priority \nProjects\n0.2%\nBDCs\n12.3%\nrDAS-Spot\n60.5%\nrDAS-Forwards\n3.8%\n \nExternal debt service rose by 25.0 and 18.7 per cent to US$0.18 billion above \nthe respective levels in the preceding and corresponding periods of 2013. \nThe Bank also transferred Eurobond proceeds of US$0.35 billion to the Debt \nManagement Office (DMO) during the review period. \nThe total foreign exchange transactions through the Bank resulted in a net \noutflow of US$5.61 billion in the review period, compared with a net inflow of \nUS$0.89 billion in the first half of 2013 and a net outflow of US$2.14 billion in the \npreceding half year. \nFigure 26 \nForeign Exchange Transactions through the CBN \n19.75 \n21.32 \n22.89 \n18.86 \n23.46 \n28.50 \n0.89 \n(2.14)\n(5.61)\n-10\n0\n10\n20\n30\n40\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nUS$ billion\nInflow\nOutflow\nNetflow\n \n \n \n \n32 \n2.5.5. Sectoral Utilisation of Foreign Exchange \nAggregate foreign exchange utilisation in the first half of 2014 increased by \n16.3 and 22.1 per cent to US$32.91 billion, over the levels at end-June and \nend-December 2013, respectively. A disaggregation showed that import \n(visible) rose by 14.5 and 15.0 per cent to US$16.63 billion, compared with the \nrespective levels in the preceding period and corresponding period of 2013. \nUnder this category, foreign exchange utilisation for oil sector imports, \nmanufactured \nproducts \nand \nagricultural \nsector, \nwhich \nrespectively \naccounted for 15.7, 8.5 and 0.7 per cent of the total, rose by 16.6, 29.6 and \n53.6 per cent to US$5.16 billion, US$2.78 billion and US$0.24 billion above the \nrespective levels in the corresponding period of 2013. The amount of foreign \nexchange utilised for the importation in the industrial, transport and minerals \nsub-sectors also increased by 15.4, 24.6 and 9.5 per cent to US$4.66 billion, \nUS$0.94 billion and US$0.18 billion, respectively. However, foreign exchange \nutilisation for food products fell by 3.9 per cent to US$2.66 billion from the level \nin the first half of 2013, and accounted for 8.1 per cent of total utilisation. \nTotal utilisation of foreign exchange for invisible (services) increased by 30.4 \nand 18.1 per cent to US$16.27 billion, compared with the levels in the \ncorresponding period and second half of 2013, respectively. This was driven, \nlargely, by the financial services sub-sector, which grew by 15.2 and 22.2 per \ncent to US$13.21 billion, over the levels at end-December 2013 and end-June \n2013, respectively, and accounted for 40.2 per cent of the total. The sector \nwas driven largely by banking and other financial services, which was 98.6 \nper cent of the total. The major components of the latter were asset \nmanagement, (US$7.67 billion); payments and money transmission services, \n(US$3.17 billion); and lending, (US$1.04 billion). Deposits, guarantees and \ncommitments, trading on own account, settlement and clearing services for \nfinancial assets, advisory and financial information accounted for the \nbalance. As a component of financial services, insurance services (life; non-\nlife; reinsurance and retrocession; and auxiliary services) fell by 41.9 and 37.9 \nper cent to US$8.66 million. \n \n \n \n33 \nPayment for business services increased by 161.5 and 110.7 per cent to \nUS$1.54 billion, over the levels in the corresponding period and preceding \nperiods in 2013, respectively. \nFurther analysis of invisibles showed that payments for education, transport, \ncommunication, distribution, construction and engineering, and other \nservices grew by 34.7, 32.1, 42.4, 173.5, 281.8 and 44.9 per cent to US$0.14 \nbillion, US$0.72 billion, US$0.37 billion, US$0.05 billion, US$0.05 billion and \nUS$0.17 billion, respectively. These accounted for 0.4, 2.2, 1.1, 0.2, 0.1 and 0.5 \nper cent of total utilisation, respectively. Foreign exchange payment for \nhealth related and social services, however, fell by 76.1 and 13.7 per cent \nbelow the levels in the corresponding period of 2013 and end-December \n2013 to US$0.33 million. \n \nFigure 27 \nSectoral Utilisation of Foreign Exchange (Visibles) \n(First Half 2014) \nIndustrial Sector\n28.0%\nFood Products Sector\n16.0%\nManufactured \nProducts Sector\n16.7%\nTransport Sector\n5.6%\nAgricultural Sector\n1.5%\nMinerals Sector\n1.1%\nOil Sector\n31.1%\n \n \n \n \n34 \nFigure 28 \nSectoral Utilisation of Foreign Exchange (Invisibles) \n(First Half 2014) \nBusiness Services\n9.5%\nCommunication \nServices\n2.3%\nEducational Services\n0.9%\nOther Services\n1.0%\nFinancial Services\n81.2%\nTransport Services\n4.4%\nConstruction and \nRelated Engineering \nServices\n0.3%\nDistribution Services\n0.3%\nTourism and Travel \nRelated Services\n0.1%\n \n2.5.6. Foreign Exchange Receipts by Top Hundred (100) Exporters \nAnalysis of export receipts by the top 100 exporters in the country during the \nfirst half of 2014 showed that Olam Nigeria Limited retained the first ranking as \nthe top exporter with proceeds valued at US$178.44 million from the export of \nsesame seeds and cocoa beans to Europe, Asia and the United States. \nMamuda Industries Nigeria Limited ranked second with exports valued at \nUS$89.53 million through the sale of leather to Italy and Hong Kong. Unique \nLeather Finishing Limited and Bolawole Enterprises Nigeria Limited were the \nthird and fourth largest exporters, respectively, with the proceeds amounted \nto US$73.24 million and US$55.76 million realised from leather exports to \nEurope and cotton and cocoa beans exports to Canada, respectively. Sun \nand Sand Industries Africa Limited and British American Tobacco Nigeria \nLimited ranked fifth and sixth largest with earnings of US$47.48 million and \nUS$46.60 million from exports of tin and aluminum alloy to Japan and \ntobacco products to Ivory Coast, respectively. \n2.5.7 Nominal Effective Exchange Rate (NEER) and Real Effective Exchange \n Rate (REER) Indices \nThe Nominal Effective Exchange Rate (NEER) and the Real Effective \nExchange Rate (REER) indices were computed based on a 13-country \n \n \n \n35 \ncurrency basket of Nigeria’s major trading partners. In the review period, the \nNEER index fell by 0.07 percentage point, compared with the level at end-\nDecember 2013, while it rose by 0.44 percentage point over the level at end-\nJune 2013. The movement in the index reflected the stability of the exchange \nrate and the marginal appreciation recorded at the official window during \nthe review period. \nThe REER index fell by 12.22 and 13.93 per cent, compared with the level at \nend-December and end-June 2013. This reflected the fall in inflation in the \nreporting period relative to the level in the corresponding period of 2013. \nFigure 29 \nNominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate \n(REER) \n60.00\n70.00\n80.00\n90.00\n100.00\n110.00\nJan-13\nFeb-13\nMar-13\nApr-13\nMay-13\nJun-13\nJul-13\nAug-13\nSep-13\nOct-13\nNov-13\nDec-13\nJan-14\nFeb-14\nMar-14\nApr-14\nMay-14\nJun-14\nNominal Effective Exchange Rate\nReal Effective Exchange Rate\n \n \n \n \n36 \nTable 3 \nNominal and the Real Effective Exchange Rate indices \n(November 2009=100) \n2013 \nNominal Effective \nExchange Rate \nReal Effective \nExchange Rate \nJan \n99.05 \n77.84 \nFeb \n98.12 \n77.08 \nMar \n97.16 \n76.10 \nApr \n97.88 \n76.34 \nMay \n96.56 \n75.02 \nJun \n95.78 \n74.15 \nJul \n95.83 \n74.00 \nAug \n94.50 \n72.96 \nSep \n96.08 \n73.71 \nOct \n96.85 \n73.79 \nNov \n96.14 \n72.74 \nDec \n96.34 \n72.34 \n2014 \n \n \nJan \n94.96 \n60.43 \nFeb \n95.87 \n60.96 \nMar \n96.24 \n61.05 \nApr \n96.42 \n61.05 \nMay \n96.29 \n60.07 \nJun \n96.27 \n60.22 \n \n2.6 \nDevelopment Finance Operations \n2.6.1 Agricultural Credit Guarantee Scheme Fund (ACGSF) \nDuring the first half of 2014, the volume and value of guaranteed loans under \nthe ACGSF increased by 56.6 and 65.2 per cent to 35,413 and N5.93 billion, \nrespectively, over the levels in the corresponding period of 2013. Of the total \nvolume of loans guaranteed by purpose, food crops accounted for 24, 223 \n(68.0%); livestock, 3,660 (10.0%); fisheries, 1,397 (4.0%); cash crops, 1,925 \n(5.0%); mixed farming, 3,593 (10.0%); and others, 915 (3.0%). \nAlso, of the total value of loans guaranteed by category, individuals \naccounted for N5.65 billion, (95.3%); informal groups, N0.12 billion (2.0%); \ncooperatives, N0.056 billion (1.0%); and companies, N0.10 billion (1.7%). \nFrom inception of the Scheme in 1978 to end-June 2014, the cumulative \nnumber of loans guaranteed was 894,954, valued at N77.40 billion. A total of \n \n \n \n37 \n454 claims valued at N92.75 million was settled during the review period, \nbringing the total claims settled from inception to 14,691 valued at N546.93 \nmillion. \nFigure 30 \nSectoral Distribution of ACGSF Loans (By Purpose) \n(First Half 2014) \nFood Crop\n68.0%\nMixed Farming\n10.0%\nLivestock\n10.0%\nFisheries\n4.0%\nCash Crops\n5.0%\nOthers\n3.0%\n \n2.6.2 Interest Drawback Programme (IDP) \nThe number and value of IDP claims settled in the first half of 2014 fell by 37.4 \nand 14.8 per cent, to 13,097 and N171.20 million from the levels of 20,907 and \nN201.1 million, respectively, in the corresponding period of 2013. This brought \nthe cumulative number and value of IDP claims settled from inception to \n246,426 and N1.94 billion, respectively. \n2.6.3 The Trust Fund Model (TFM) \nDuring the first half of 2014, no new Memorandum of Understanding (MoU) \nwas signed. Thus, from inception in 2002 to date, the number of MoUs stood \nat 58, consisting of state governments, multinational agencies, local \ngovernment councils (LGCs), non-governmental organisations (NGOs) and \nindividuals with pledged sum of N5.56 billion. \n2.6.4 Entrepreneurship Development Centres (EDCs) \nThree (3) new EDCs in Maiduguri (for North East), Makurdi (for North Central) \nand Calabar (for South South), respectively, trained 937; 1,120; and 1,044 \nentrepreneurs, totalling 3,101, above the target of 3,000 for the first half of \n2014. Of the trained entrepreneurs, 1,872 (60.4%) were males, while 1,229 \n \n \n \n38 \n(39.6%) were females. In addition, 904 accessed credit from banks for start-\nups/ expansion of businesses, while 2,703 new jobs were created. \n2.6.5 N200 Billion Commercial Agriculture Credit Scheme (CACS) \nIn the review period, the sum of N8.18 billion was released to eight (8) banks \nfor on-lending to eleven (11) privately-sponsored projects, one (1) state \ngovernment and four (4) enhancements for private projects. Analysis of the \nnumber of projects financed showed that processing accounted for 36.4 per \ncent, while production and marketing accounted for 54.5 and 9.1 per cent, \nrespectively. \nTable 4 \nAnalysis of CACS Financed Privately-Sponsored Projects by Value Chain \n(First Half 2014) \nCategory \n \nNumber of \nProjects \nPer cent \nValue \n{N’ billion } \nPer cent \nProduction \n6 \n54.5 \n1.055 \n38.0 \nProcessing \n4 \n36.4 \n1.197 \n43.0 \nMarketing \n1 \n9.1 \n0.550 \n19.0 \n Total \n11 \n100.0 \n2.802 \n100.0 \n \nAnalysis by value indicated that processing accounted for N1.20 billion \n(43.0%); production, N1.06 billion, (38.0%); and marketing, N0.56 billion \n(19.0%). \nAt end-June 2014, N234.29 billion was disbursed to 307 projects, compared \nwith N119.37 billion disbursed to 273 projects in the corresponding period in \n2013. The sum of N40.34 billion was repaid by banks in respect of seventy-six \n(76) projects in the review period. \n \n \n \n \n39 \nFigure 31 \nAnalysis of CACS Financed Privately-Sponsored Projects by Value Chain \n(First Half 2014) \n \nProduction\n54.5%\nProcessing\n36.4%\nMarketing\n9.1%\n \n2.6.6 N200 Billion Restructuring and Refinancing Facility (RRF) \nIn the first half of 2014, N17.8 billion was released to the Bank of Industry (BOI) \nfor disbursement, as against the corresponding period of 2013 when no fund \nwas released. Thus, the cumulative amount disbursed from inception to date \namounted to N305.2 billion for 600 projects, while cumulative repayments \nunder the SME RRF stood at N80.9 billion in the first half of 2014. \n2.6.7 N200 Billion SME Credit Guarantee Scheme (SMECGS) \nUnder the Scheme, four (4) applications valued at N155.23 million were \nguaranteed during the first half of 2014, compared with eight (8) applications \nvalued at N279.2 million in the corresponding period of 2013. The total \nnumber of projects guaranteed from inception to date was 76 valued at \nN3.37 billion, while N1.80 billion for 29 projects had been fully repaid. \n2.6.8 N300 Billion Power and Airline Intervention Fund (PAIF) Initiative \nIn the first half of 2014, N0.51 billion was released to the BOI for one (1) airline \nproject, compared with five (5) projects valued at N39.6 billion in the \ncorresponding period of 2013. The number and value of projects funded from \ninception stood at 51 and N233.16 billion, comprising 15 airline and 36 power \nprojects, valued at N117.43 billion and N115.73 billion, respectively. The 36 \npower projects had a potential generating capacity of 847.4MW, out of \nwhich 440.1 had been added to the National Grid. Also, the Fund’s 7% \n \n \n \n40 \nconcessionary interest rate with the 10 – 15 years long tenor had created a \nstabilising effect on the capital structure of the refinanced airline projects, \nthereby, making them more viable. It has saved the projects about 12% of \nthe cost of capital if they borrowed at the average market rate (19%). Since \ninception, in 2010, a total of N32.36 billion had been repaid by the \nbeneficiaries. \n2.6.9 Nigeria Incentive-Based Risk Sharing System for Agricultural Lending \n \n (NIRSAL) \nDuring the period under review, the Nigeria Incentive-Based Risk Sharing \nSystem for Agricultural Lending (NIRSAL) programme continued to improve \non its activities as it issued four (4) credit risk guarantees (CRGs) valued at \nN2.06 billion to various counterparties. The programme also obtained CRGs \nfor twenty- four (24) new growth enhancement support scheme (GES) valued \nat N5.66 billion through eight (8) banks under the 2014 NIRSAL GES \nFramework. \nFigure 32 \nNIRSAL Credit Risk Guarantees (CRG) Issued \nJanuary – June 2014 \nCrop Production\n1.8%\nAgro Processing\n98.2%\n \nIn addition, the sum of N163.83 million was paid to 116 projects as IDB claims \nunder the GES/NIRSAL Interest Draw Back (IDB), through fifteen (15) banks, \nthus, bringing the cumulative IDB payments to N198.90 million. \n \n \n \n41 \n2.6.10 Financial Inclusion \nThe Bank’s effort at achieving the objective of raising financial inclusion to \n80.0 per cent by 2020 was sustained during the review period. It held \nworkshops on the National Financial Inclusion Strategy for banks from January \n22 – 24, 2014 and for microfinance banks located in Lagos from March 12 - \n13, 2014. Following the workshops, it was resolved that the banks should \nprepare three years (2014 to 2016) financial inclusion plans for their \norganizations, focusing on products, channels and details of the marketing \nstrategies for realizing them. The microfinance banks were directed to \nmaintain a close working relationship for information sharing on regulatory \nchanges that support financial inclusion. \nPursuant to securing the buy-in of external stakeholders in implementing the \nStrategy, the Bank held meetings with various relevant financial services \nregulators in the review period. The meetings assessed the level of progress \ntowards promoting financial inclusion by the agencies and how they could \nencourage the institutions they regulate to perform their roles better. The \nmeetings also resolved that there was need for joint effort amongst the \nregulators to undertake nationwide sensitization campaigns on financial \ninclusion matters while effort should be made to set up financial inclusion \nunits in the various agencies. \nIn a related development, the Bank held a meeting with the Bill and Melinda \nGates Foundation to deliberate on efforts at arranging for the 2014 edition of \nthe Geospatial Mapping of financial access points across the nation on June \n6, 2014. In addition, the Bank attended the Financial Inclusion Strategy Peer \nLearning workshop in Nadi, Fiji from March 26 - 28, 2014. The programme \nshared perspectives on the: methodology involved in developing and \nimplementing financial inclusion strategies; need to liaise with state \ngovernments across a country to explore the adoption of appropriate social \nsafety programmes; and need to ensure continuous dialogue with private \nsector to enable a hitch-free implementation of a proposed strategy. \n \n \n \n42 \nECONOMIC REPORT \n3.0 \nGlobal Economic Developments \n3.1 \nGlobal Output \nGlobal output growth was modest in the first half of 2014. According to the \nInternational Monetary Fund (IMF) World Economic Outlook (WEO, July 2014), \nglobal growth was projected at 3.4 per cent, up from 3.2 per cent in 2013. \nThe key growth drivers were moderating fiscal consolidation and highly \naccommodative monetary policy in most advanced economies. Growth in \nthe review period, however, faced several downside risks including: the \nlarger-than -expected inventory accumulation in the US at end-2013; a harsh \nwinter that further dampened exports; weaker domestic demand in China,; \ngrowing geopolitical tensions in Eastern Europe; and slower growth in other \nemerging market economies. \nIn the advanced economies, output growth strengthened to 1.8 from 1.3 per \ncent in 2013, despite the deceleration witnessed in the US in the first half of \n2014. Growth in the euro area strengthened to 1.1 per cent, but with uneven \ngrowth prospects across the region, reflecting continuing financial \nfragmentation, weakened private and public sectors’ balance sheets, and \nhigh unemployment rates in some countries. Japan recorded a stronger than \nexpected performance in the first half of 2014, which may decelerate \nsubsequently, owing to the planned unwinding of fiscal stimulus. \nIn emerging market and developing economies, growth was projected to \ndecelerate to 4.6 per cent in 2014 from 4.7 per cent in 2013, due mainly to; \nweak external and domestic demand, tighter financial conditions, and \ndampness in business and consumer confidence. \nDeveloping economies continued to show signs of vulnerabilities largely on \naccount of: weak export performance; softer external demand from sluggish \ngrowth in the advanced economies; and moderating foreign direct \ninvestment, leading to a decline in foreign exchange inflows and the risk of a \nbuild-up of external and public debts. \n \n \n \n43 \nGrowth in sub-Saharan Africa remained strong, supported by commodity-\nrelated factors and substantial depreciation of some currencies in the region. \nLeading economies in the region, including Nigeria, posted reasonable \ngrowth rates, despite struggling with domestic challenges of insurgency, \nelectricity and labour conflicts. \nIn the Middle East and North Africa (MENA), growth was projected to rise \nmoderately to about 3.1 per cent from 2.5 per cent in 2013, driven largely by \nthe oil-exporting economies, where high public spending contributed to \nincreased non-oil activity. Many of the region’s oil-importing countries \ncontinued to grapple with difficult sociopolitical and security concerns, \nwhich undoubtedly, weighed on confidence and economic activity. \n3.2 \nGlobal Commodity Prices \nDevelopments in the global commodity markets were mixed. Some \ncommodity prices broadly remained flat, while others softened. The \ndevelopment was attributed mainly to the slowdown in emerging markets, \nespecially, China, the increased crude oil supplies from the U.S., the build-up \nof base metals, the rising grain supplies, and the uncertainties in global \neconomic outlook. With increase in supplies outpacing tepid demand in \nmost commodity markets, the IMF commodity price indices declined. Some \ncommodity prices, however, firmed-up following signs of strengthening \nglobal activity, though with increased price volatility. Gold gained 10.0 per \ncent in the first half of the year, as the escalating violence in Iraq and tension \nbetween Ukraine and Russia boosted demand for hedging assets. \n3.3 \nGlobal Inflation \nGlobal inflation generally remained subdued in the review period following \ncontinued negative output gaps in the advanced economies, weaker \ndomestic demand in most emerging markets, and falling commodity prices. \nGlobal inflation was projected at 2.7 per cent in 2014, representing an \nincrease of about 40 basis points relative to the estimate for 2013. In the \nadvanced economies, inflation was below target and with long-term \ninflation expectation at about 1.5 per cent, the projected return to target \n \n \n \n44 \nwould be gradual. In emerging market and developing economies, inflation \ndeclined to 5.2 per cent from 6.0 per cent on the backdrop of weak \ncommodity prices and sustained tight monetary policy. \nHeadline inflation in the OECD area picked up slightly in the first quarter of \n2014 following a decrease in the last quarter of 2013. The upward trend \ncontinued to the beginning of the second quarter, with OECD headline \nconsumer price inflation at 2.1 per cent in May and June, 2014, up from 2.0 \nper cent year–on-year in April 2014. \nDevelopments in Eurozone inflation were mixed. There were concerns that \nthe Eurozone could fall into deflation, raising fears that consumers might \nspend even less as they would expect prices to fall in future months. Figures \nfrom Eurostat indicated that in June 2014, the highest annual inflation rates \nwere in the United Kingdom (1.9%), Austria (1.7%) and Luxembourg (1.2%). \nHowever, negative annual rates were observed in Bulgaria (-1.8%), Greece (-\n1.5%), Portugal (-0.2%), Hungary and Slovakia (both -0.1%). Thus, in June 2014, \nannual inflation rates fell in ten member states, remained stable in four, and \nrose in fourteen. \n3.4 \nInternational Financial Markets \nDevelopments in the international financial markets during the first half of \n2014 were affected by uncertainties surrounding geopolitical tensions and \nthe tapering of the quantitative easing measures of the US Fed. In the \nadvanced economies, especially the US, monetary conditions continued to \nremain largely supportive, than in the euro area and Japan. Policy rates \nremained around the zero lower bound, and were expected to rise from \n2015, particularly in the US, where some signs of recovery were beginning to \nemerge. Credit to the private sector in the euro area continued to decline, \nindicating weak demand. Despite the tapering of the Fed’s QE since May \n2013, long term interest rates were still lower than what would have prevailed \nif the term premium were to reverse to pre-crisis levels. Consequently, \nfinancial conditions remained broadly accommodating, leading to rallies in \nequities market and low bond risk spreads. Markets continued to expect \n \n \n \n45 \nprolonged period of low interest rates and supportive monetary policy in the \neuro area and Japan. \nIn emerging markets, financial and monetary conditions tightened in \nresponse to more difficult external financial environment since the tapering \nof the Fed’s QE. With the re-pricing of emerging market assets and risks, \nbond rates and spreads increased. Accordingly, gross capital inflow \ndeclined, as exchange rates depreciated. Generally, the cost of capital in \nemerging markets increased, thereby dampening investment and growth. \nMonetary authorities around the world largely sustained their policy rates in \nthe review period, with a few exceptions. Ghana and Brazil raised their \npolicy rates from 16.0 and 10.5 per cent to 18.0 and 11.0 per cent, \nrespectively, to tame mounting inflationary concerns. Russia lowered her \npolicy rate by 100 basis points to 7.5 per cent to address growth concerns, \nstemming from weak domestic demand and economic sanctions. The ECB \nlowered \nher \nkey \npolicy \nrate \nto \nprovide \nadditional \nmonetary \naccommodation to support lending to the real economy. \nThe performance of international stock markets was positive during the \nreview period, with the indices for the developed and some emerging \nmarkets rising. In the U.S., increase in stock prices was due largely to \nimproved corporate deals and faster-than-expected rise in industrial output. \nAlso, growth in the Asian and European stock markets was as a result of \nsurge in Purchasing Managers’ Indices, although at a slower pace in the \neuro area. \nIn Africa, the Nigerian, South African and Egyptian stock market indices rose \nby 2.8, 10.1 and 20.3 per cent, respectively, while the Kenyan index declined \nby 0.9 per cent. In Nigeria, the rise in share prices was attributed to improved \nperformance of quoted blue chip. \nThe exchange rate of the naira relative to other major international \ncurrencies indicated that the naira depreciated against the pound sterling, \nJapanese yen and Swiss Franc by 3.0, 3.4 and 0.6 per cent, respectively, at \n \n \n \n46 \nend-June 2014. It, however, appreciated against the Euro by 0.85 per cent. \nAt the regional level, the naira depreciated by 0.3 and 0.1 per cent against \nthe WAUA and CFA franc, respectively, in the same period. \n \n \nFigure 33 \nPerformance of the Naira against Major Currencies \n1.4\n1.4\n1.5\n1.5\n1.6\n1.6\n1.7\n1.7\n0.0\n50.0\n100.0\n150.0\n200.0\n250.0\n300.0\n3/1/2013\n3/18/2013\n4/4/2013\n19/4/2013\n7/5/2013\n22/5/2013\n7/6/2013\n24/6/2013\n7/9/2013\n7/24/2013\n8/12/2013\n8/27/2013\n9/11/2013\n10/2/2013\n21/10/2013\n11/5/2013\n20/11/2013\n12/5/2013\n20/12/2013\n09/01/2014\n1/27/2014\n2/11/2014\n2/26/2014\n3/13/2014\n3/28/2014\n4/11/2014\n4/30/2014\n5/16/2014\n3/6/2014\n18/6/2014\nUSD\nGBP\nEUR\nJPY\n \n \n \nFigure 34 \nPerformance of the Naira against Regional Currencies \n0.2850\n0.2900\n0.2950\n0.3000\n0.3050\n0.3100\n0.3150\n0.3200\n0.3250\n0.3300\n0.3350\n224.0000\n226.0000\n228.0000\n230.0000\n232.0000\n234.0000\n236.0000\n238.0000\n240.0000\n242.0000\n244.0000\n3/1/2013\n3/20/2013\n10/4/2013\n29/4/2013\n17/5/2013\n6/6/2013\n25/6/2013\n7/12/2013\n7/31/2013\n8/21/2013\n9/9/2013\n10/2/2013\n23/10/2013\n11/11/2013\n28/11/2013\n17/12/2013\n1/8/2014\n1/28/2014\n2/14/2014\n3/5/2014\n3/24/2014\n4/9/2014\n4/30/2014\n5/20/2014\n6/9/2014\n26/6/2014\nN/CFA\nN/WAUA\nWAUA\nCFA\n \n \n \n \n47 \nTable 5 \nIndices of Selected International Stock Markets \n (Dec 31, 2013 – Jun 30, 2014) \n \nAt the international foreign exchange market, most currencies depreciated \nagainst the US dollar during the period under review. Among African \ncurrencies, the Nigerian naira remained stable while the South African, \nEgyptian, Kenyan, and Ghanaian currencies depreciated. \nCountry\nIndex\n31-Dec-13\n31-Mar-14\n30-Jun-14\nYTD \n% Change\nMar 31, 2014 - \nJun 30, 2014 % \nChange\nAFRICA\nNigeria\nASI\n41,329.10\n38,748.01\n42,482.48\n2.8\n9.6\nSouth Africa\nJSE African AS\n46,256.23\n47,770.92\n50,945.26\n10.1\n6.6\nKenya\nNairobi NSE 20 \n4,926.97\n4,945.78\n4,885.04\n-0.9\n-1.2\nEgypt\nEGX CSE 30\n6,782.84\n7,805.03\n8,162.20\n20.3\n4.6\nGhana\nGSE All Share\n2,145.20\n2,387.30\n2,373.38\n10.6\n-0.6\nNORTH AMERICA\nUS\nS&P 500\n1,848.36\n1,872.34\n1,960.23\n6.1\n4.7\nCanada\nS&P/TSX Composite\n13,621.55\n14,335.31\n15,146.01\n11.2\n5.7\nMexico\nMexico Bolsa (IPC)\n42,727.09\n40,461.80\n42,737.17\n0.0\n5.6\nSOUTH AMERICA\nBrazil\nBovespa Stock \n51,507.16\n50,414.92\n53,168.22\n3.2\n5.5\nArgentina\nMerval \n4,275.98\n5,134.74\n6,537.61\n52.9\n27.3\nColombia\nIGBC General \n13,071.27\n13,827.01\nNA\nNA\nNA\nEUROPE\nUK\nFTSE 100\n6,749.09\n6,598.37\n6,743.94\n-0.1\n2.2\nFrance\nCAC 40\n4,295.95\n4,391.50\n4,422.84\n3.0\n0.7\nGermany\nDAX \n9,552.16\n9,555.91\n9,833.07\n2.9\n2.90\nRussia\nMICEX\n1,503.39\n1,369.29\n1,476.38\n-1.8\n7.8\nASIA\nJapan\nNIKKEI 225\n16,291.13\n14,827.83\n15,162.10\n-6.9\n2.3\nChina\nShanghai SE A \n2,214.49\n2,128.78\n2,144.74\n-3.1\n0.7\nIndia\nBSE Sensex\n21,170.68\n22,386.27\n25,413.78\n20.0\n13.5\nSource: Bloomberg\n \n \n \n48 \nTable 6 \nExchange Rates of Selected Countries \n(Value in Currency Units to US$) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCurrency\n31-Dec-13\n30-Apr-14\n30-Jun-14\nApr -June % \nApp/Dep\nYTD % \nApp/Dep\nAFRICA \nNigeria \nNaira\n157.27\n157.29\n157.29\n0.00\n-0.01\nSouth Africa \nRand\n10.52\n10.48\n10.64\n-1.50\n-1.13\nKenya \nShilling\n86.30\n86.90\n87.60\n-0.80\n-1.48\nEgypt \nPound\n6.95\n7.01\n7.15\n-1.96\n-2.80\nGhana\nCedi\n2.38\n2.83\n3.34\n-15.27\n-28.74\nNORTH \nAMERICA \nCanada \nDollar\n1.06\n1.09\n1.07\n1.87\n-0.93\nMexico \nPeso\n13.10\n13.09\n12.97\n0.93\n1.00\nSOUTH \nAMERICA \nBrazil \nReal\n2.36\n2.23\n2.21\n0.90\n6.79\nArgentina \nPeso\n6.52\n8.00\n8.13\n-1.60\n-19.80\nColombia \nPeso\n1929.51\n1936.40\n1877.44\n3.14\n2.77\nEUROPE \nUK \nPound\n0.60\n0.59\n0.58\n1.72\n3.45\nEuro Area \nEuro\n0.73\n0.72\n0.73\n-1.37\n0.00\nRussia \nRuble\n32.87\n35.66\n33.98\n4.94\n-3.27\nASIA \nJapan \nYen\n105.26\n102.14\n101.33\n0.80\n3.88\nChina \nYuan\n6.05\n6.26\n6.20\n0.97\n-2.42\nIndia \nRupee\n61.80\n60.34\n60.19\n0.25\n2.67\nSource: bloomberg \nMTM= Month to Month\nYTD = Year to Date\n \n \n \n49 \n3.5 \nWorld Economic Outlook for the Rest of 2014 \nThe strengthening of global growth towards the end of the first half of 2014 \nwould be sustained for the rest of the year, as leading indicators were \npositive in key advanced economies and China. The IMF projects a rise in \nglobal growth to 3.4 per cent for the rest of the year. The US was expected to \ngrow by 1.7 per cent at year end. The euro area would emerge from \nrecession to grow by 1.1 per cent. Japan would expand by 1.6 per cent; as \nChina and the emerging markets (including China) were projected to grow \nby 7.4 and 4.6 per cent at year end, respectively. \nThe outlook for global inflation would remain reasonably contained, \nparticularly in advanced economies, against the backdrop of moderate \ncommodity prices and weak demand. In most advanced economies, \nheadline inflation was below their central bank’s targets, inflation \nexpectation, as reported in survey data and financial market indicators over \nthe medium term, has remained well anchored. \nWith the European Central Bank lowering its policy rate in June, capital flows \nto emerging markets was likely to recover, raising the prospects of currency \nappreciation pressures in these economies. With these developments, stock \nmarkets were likely to sustain their positive performance globally. \n4.0 DEVELOPMENTS IN THE DOMESTIC ECONOMY \n4.1 Monetary and Credit Developments \nThe CBN maintained a restrictive monetary policy stance in the first half of \n2014, keeping the monetary policy rate at 12.0 per cent throughout the \nperiod. Consequently, the growth of major monetary aggregates fell \nsignificantly below their indicative benchmarks. Reserve money, broad and \nnarrow money supply declined relative to their indicative benchmarks for the \nperiod and their respective levels at the end of the corresponding period of \n2013. Both currency-in-circulation and currency outside bank declined at the \nend of the review period. Aggregate credit to the domestic economy grew \nmarginally as a result of the moderate growth in claims on the private sector \nand the decline in net claims on the Federal Government. Similarly, growth in \n \n \n \n50 \nconsumer credit slowed in tandem with credit to the private sector. \n4.1.1 Reserve Money \nReserve money, at N4,723.1 billion, fell by 15.0 per cent at end-June 2014 \nbelow its level at end-December 2013, compared with the decline of 12.6 \nper cent at the end of the corresponding period of 2013. The development \nrelative to the level at end-December 2013 reflected the respective decline \nof 10.1 and 33.1 per cent in net foreign and net domestic assets of the CBN. \nThe corresponding decline in the uses of reserve money was attributed to the \nfall in both bank reserves and currency-in-circulation by 14.7 and 15.7 per \ncent, respectively. \nTable 7 \nSources and Uses of Reserve Money \nJun 11\nDec '11\nJun 12\nDec 12\nJun-13\nDec 13\nJun-14\nForeing assets (net)\n4,922,626.64\n \n5,823,794.26\n \n6,025,336.84\n \n7,393,557.68\n \n7,561,183.53\n \n6,898,546.52\n \n6,200,004.89\n \n Foreign Assets\n5,004,384.4\n \n5,829,819.7\n \n6,025,436.9\n \n7,395,331.5\n \n7,614,112.5\n \n7,034,368.8\n \n6,580,954.2\n \n Long-term Foreign Liabilities\n0.0\n \n-\n \n-\n \n311.5\n \n311.5\n \n311.5\n \n311.5\n \n Short-term foreign Liabilities\n81,757.7\n \n6,025.5\n \n100.0\n \n1,462.2\n \n52,617.4\n \n135,510.7\n \n380,637.8\n \n Net credit to Government\n(2,733,579.8)\n \n(3,514,447.1)\n \n(3,723,009.9)\n \n(3,574,376.4)\n \n(3,519,920.5)\n \n(2,101,616.1)\n \n(2,730,498.8)\n \n Claims on Government\n798,851.0\n \n680,601.7\n \n738,017.8\n \n733,354.5\n \n451,404.9\n \n746,938.3\n \n640,782.7\n \n Fed. Government Deposits\n3,532,430.8\n \n4,195,048.7\n \n4,461,027.8\n \n4,307,730.9\n \n3,971,325.4\n \n2,848,554.4\n \n3,371,281.5\n \nNet credit to Private Sector\n229,755.4\n \n3,963,550.1\n \n4,045,673.7\n \n3,661,512.3\n \n4,223,762.4\n \n4,520,790.0\n \n4,395,507.2\n \n Claims on private sector\n726,392.5\n \n4,569,146.0\n \n4,652,650.4\n \n4,708,311.8\n \n4,703,313.2\n \n4,917,493.1\n \n4,684,233.8\n \n Private sector deposits\n496,637.1\n \n605,595.9\n \n606,976.7\n \n1,046,799.6\n \n479,550.8\n \n396,703.1\n \n288,726.6\n \n Net claims on DMBS\n564,905.6\n \n(744,210.9)\n \n(1,014,301.3)\n \n(1,583,300.3)\n \n(3,380,269.2)\n \n(2,437,707.6)\n \n(2,488,066.9)\n \n Claims on DMBS\n748,162.9\n \n793,049.0\n \n1,110,570.2\n \n1,052,556.0\n \n915,469.7\n \n1,259,320.3\n \n772,362.4\n \n CBN Securities\n183,257.3\n \n1,537,259.9\n \n2,124,871.5\n \n2,635,856.3\n \n4,295,738.9\n \n3,697,027.9\n \n3,260,429.4\n \nOther Assets Net\n(918,651.5)\n \n(2,744,621.0)\n \n(2,821,724.0)\n \n(2,192,909.7)\n \n(1,648,603.4)\n \n(1,321,090.2)\n \n(653,874.6)\n \n Other Assets\n3,469,322.3\n \n4,878,098.4\n \n6,031,460.4\n \n6,790,896.4\n \n7,182,339.6\n \n1,914,118.5\n \n1,506,392.0\n \n Other liabilities\n4,387,973.8\n \n7,622,719.3\n \n8,853,184.4\n \n8,983,806.1\n \n8,830,943.0\n \n3,235,208.7\n \n2,160,266.6\n \nRESERVE MONEY\n2,065,056.3\n \n2,784,065.4\n \n2,511,975.3\n \n3,704,483.6\n \n3,236,152.9\n \n5,558,922.6\n \n4,723,071.7\n \nCurrency in Circulation\n1,353,982.6\n \n1,566,046.4\n \n1,363,730.7\n \n1,631,717.2\n \n1,425,507.8\n \n1,776,813.2\n \n1,497,142.1\n \nBanks' Deposit with CBN \n711,073.7\n \n1,218,019.0\n \n1,148,244.6\n \n2,072,766.4\n \n1,810,645.1\n \n3,782,109.5\n \n3,225,929.6\n \n \n \n \n \n51 \nFigure 35 (a) \nReserve Money and its Components: Sources \n(N’ Billion) \n (8,000.00)\n (6,000.00)\n (4,000.00)\n (2,000.00)\n -\n 2,000.00\n 4,000.00\n 6,000.00\n 8,000.00\n 10,000.00\nDec-10\nJun-11\nDec-11\nJun-12\nDec-12\nJun-13\nDec-13\nJun - 14\nN'billion\nNFA\nNDA\nOAN\nRM\n \n \nFigure 35 (b) \nReserve Money and its Components: Uses \n(N’ Billion) \n \n4.1.2 Broad Money (M2) \nGrowth of money supply was modest in the first half of 2014. Broad money \nsupply (M2) grew by 1.7 per cent relative to the level at end-December 2013, \ncompared with 0.7 per cent at the end of the corresponding period of 2013. \nAt this level, M2 growth was lower than the provisional indicative target of \n14.5 per cent for fiscal 2014. The modest growth in money supply reflected \nthe decline in net foreign assets and other assets (net) of the banking system, \nwhich effects suppressed the impact of the 0.9 per cent growth in net \ndomestic credit. \n \n \n \n52 \n4.1.3 Narrow Money (M1) \nNarrow money (M1) fell by 6.1 per cent to N6,587.3 billion at end-June 2014, \ncompared with the decline of 6.5 per cent at the end of the corresponding \nhalf of 2013. The development was due to the respective decline of 19.7 and \n2.5 per cent in its currency and demand deposit components. The decline in \ncurrency outside bank reflected the growing confidence in e-payments in \nthe economy following the success of the cash-less policy of the Bank. \n4.1.4 Quasi Money (QM) \nQuasi-money grew by 7.9 per cent to N9, 341.1 billion at the end of the \nreview period, compared with 7.3 per cent recorded at the end of the \ncorresponding half of 2013. The growth in quasi money was attributed to the \nrise in savings and time deposits, particularly the 19.8 per cent growth in \nforeign currency deposits with banks. \n4.1.5 Currency-in–Circulation (CIC) and Deposits at the CBN \nCurrency-in-circulation fell by 15.7 per cent to N1,497.1 billion and constituted \n31.7 per cent of the uses of reserve money at the end of the first half of 2014, \ncompared with the decline of 12.6 per cent at the end of the corresponding \nperiod of 2013. Similarly, banks’ deposit with the CBN fell by 14.7 per cent, \ncompared with 12.6 per cent at the end of the corresponding period of 2013. \n4.1.6 Currency Outside Bank (COB) \nCurrency outside bank fell by 19.7 per cent in the first half of 2014, compared \nwith the decline of 13.3 per cent at the end of the corresponding half of \n2013. At that level, COB constituted 7.3 per cent of M2 and 17.6 per cent of \nM1, which were 0.1 and 1.4 percentage points above their respective levels \nin the corresponding period of 2013. The development reflected increased \nconfidence in the use of e-payments in the economy. \n \n \n \n53 \nFigure 36 \nRatio of Currency Outside Bank to Money Supply \n8.6\n7.3\n9.4\n8.4\n9.4\n8.1\n8.4\n7.2\n9.2\n7.3\n18.5\n16.2\n19.4\n18.0\n18.4\n16.5\n17.5\n16.3\n20.6\n17.6\n0.0\n5.0\n10.0\n15.0\n20.0\n25.0\n9-Dec\n10-Jun\n10-Dec\n11-Jun\n11-Dec\n12-Jun\n12-Dec\n13-Jun\n Dec 13\n14-Jun\nRatio\n COB/M2\n COB/M1\nFigure 37 \nGrowth in Money Supply \n(Per cent) \n (10)\n (5)\n -\n 5\n 10\n 15\n 20\n 25\nJun-10\nDec 10\nJun 11\nDec 11\nJun 12\nDec 12\nJun 13\nDec 13\nJun 14\nM2\nM1\nPer cent\n \n4.1.7. Drivers of Growth in Money Supply \n4.1.7.1. Net Foreign Assets (NFA) \nForeign assets (net) of the banking system declined at the end of the review \nperiod. Relative to the level at end-December 2013, NFA fell by 9.6 per cent \nto N7,693.3 billion, as against the growth of 1.3 per cent at the end of the \ncorresponding half of 2013. The development reflected the respective \ndecline of 10.1 and 7.5 per cent in CBN and banks’ net foreign assets \nholdings. As a percentage of M2, NFA constituted 48.3 per cent, compared \nwith 58.8 per cent at the end of the corresponding period of 2013. \n \n \n \n54 \n4.1.7.2 Net Domestic Assets (NDA) \nNet domestic assets grew by 15.1 per cent to N8,235.1 billion, in contrast to \nthe decline of 0.2 per cent at the end of the first half of 2013. The \ndevelopment was attributed to the respective increase of 0.9 and 12.0 per \ncent in domestic credit (net) and other assets (net) of the banking system. \n4.1.7.2.1 Net Domestic Credit (NDC) \nNet domestic credit grew by 0.9 per cent to N15,173.6 billion at the end of \nthe first half of 2014, compared with the growth of 3.6 per cent at the end of \nthe corresponding period of 2013. The development reflected, wholly, the \nincrease in claims on the private sector as net claims on Federal Government \nfell at the end of the review period. \n4.1.7.2.1.1 Credit to the Government (Cg) \nNet claims on government fell by 21.9 per cent at the end of the first half of \n2014, compared with the 3.6 per cent decline at the end of the \ncorresponding half of 2013. This reflected the decline in banking system’s \nholding of government securities such as treasury bills and FGN Bonds, which \nfell by 16.2 and 24.8 per cent, respectively, from their levels at end-\nDecember 2013. The Federal Government, as in the preceding half-year, \nremained a net lender to the banking system. \n4.1.7.2.1.2 Credit to the Private Sector (Cp) \nCredit to the private sector grew by 2.8 per cent at the end of the first half of \n2014, compared with 3.6 per cent recorded at the end of first half of 2013. \nThe development reflected, wholly, the 3.2 per cent increase in claims on the \ncore private sector as claims on states and local government declined by 5.9 \nper cent. \n4.1.7.2.2 \nOther Assets (net) (OAN) \nOther Assets (net) of the banking system grew at the end of first half of 2014. \nRelative to the level at end-December 2013, OAN grew by 12.0 per cent, as \nagainst the decline of 7.4 per cent recorded at the end of the corresponding \nperiod of 2013. The development relative to the level at end-December 2013 \n \n \n \n55 \nwas attributed to the increase in unclassified assets of both the CBN and \nbanks during the review period. \nTable 8 \nGrowth in Monetary Aggregates \n(Per cent) \n \n \nJune ‘12 \nDec ‘12 \nJune ‘13 \nDec ‘13 \nJune ‘14 \nNet Foreign Asset (NFA) \n5.37 \n26.69 \n1.34 \n(5.86) \n(9.63) \nNet Domestic Credit \n(0.87) \n(7.22) \n3.55 \n18.45 \n0.88 \nCredit to Federal Government (Cg) \n(128.16) \n(393.81) \n(3.63) \n40.14 \n(21.89) \nCredit to Private Sector(Cp) \n3.65 \n6.83 \n3.57 \n8.96 \n2.75 \nQuasi Money (QM) \n5.39 \n23.44 \n7.33 \n7.36 \n7.91 \nNarrow Money (M1) \n(2.54) \n9.59 \n(6.49) \n(5.50) \n(6.07) \nBroad Money (M2) \n1.35 \n16.39 \n0.71 \n1.20 \n1.66 \nOther Assets (net) (OAN) \n(1.13) \n16.80 \n(7.35) \n(26.00) \n12.00 \n \nFigure 38 \nDistribution of Net Domestic Credit \n(N’ Billion) \n-5,000.00\n0.00\n5,000.00\n10,000.00\n15,000.00\n20,000.00\nJun 11\nJune 12\nJune 13\nJune 14\nN Billion\nClaims on Federal Government (Net)\n Claims on Private Sector\n \n4.1.8 Sectoral Distribution of Credit \nOf the total outstanding credit to the core private sector, N4,083.8 billion was \ngiven to the priority sectors, which comprised agriculture, solid minerals, \nexports and manufacturing sub-sectors. This accounted for 37.9 per cent of \nthe total, compared with 37.2 per cent in the corresponding half of 2013. The \nless \npreferred \nsectors \n(real \nestate, \npublic \nutilities, \ntransport \nand \ncommunications, finance and insurance and government) accounted for \n \n \n \n56 \n43.1 per cent of the total, while the unclassified sectors accounted for the \nbalance. \nTable 9 \nCredit to the Core Private Sector: \n(Percentage Share) \n \nShare in Outstanding (per cent) \n \n \nJun 12 \nDec 12 \nJun 13 \n \nDec 13 \n \n Jun 14 \n1. Preferred Sectors \n37.1 \n39.5 \n37.2 \n36.8 \n37.9 \n Agriculture \n3.7 \n3.9 \n4.2 \n3.4 \n4.0 \n Solid Minerals \n18.9 \n21.7 \n20.6 \n21.5 \n22.0 \n Exports \n0.7 \n0.8 \n0.1 \n0.04 \n0.10 \n Manufacturing \n13.8 \n13.1 \n12.3 \n11.8 \n11.9 \n2. Less Preferred Sectors \n39.8 \n38.3 \n40.2 \n41.4 \n43.1 \n Real Estate \n6.8 \n6.6 \n7.3 \n7.3 \n7.6 \n Public Utilities \n0.3 \n0.4 \n0.7 \n2.2 \n2.3 \n Transport and Communications \n11.6 \n11.9 \n13.5 \n13.9 \n14.8 \n Finance & Insurance \n3.9 \n3.1 \n3.2 \n3.2 \n3.1 \n Government \n7.4 \n7.8 \n6.9 \n7.2 \n6.9 \nImport & Dom. Trade (General Comm.) \n9.8 \n8.5 \n8.6 \n7.6 \n8.3 \n3. Unclassified \n23.1 \n22.2 \n22.6 \n21.8 \n19.0 \nTotal (1+2+3) \n100 \n100 \n100 \n100 \n100 \n \n \nFigure 39 \nSectoral Distribution of Banks’ Credit \n (Per cent) \n \n \n \n \n \n \n \n \n \n0\n10\n20\n30\n40\n50\nH1 2012\nH2 2012\nH1 2013\nH2 2013\nH1 2014\nPer cent\nPriority\nLess Preferred\nUnclassified\n \n \n \n57 \n4.1.9 Maturity Structure of DMBs’ Outstanding Loans and Advances, and \n Deposit Liabilities \nThe credit market remained dominated by short-term maturities in the first \nhalf of 2014. Outstanding credit maturing within one year accounted for 56.6 \nper cent, compared with 56.0 per cent at the end of the second half of 2013. \nThe proportion of the medium-term (≥1yr and < 3yrs) and long-term (3yrs and \nabove) maturities stood at 16.8 and 26.6 per cent, compared with 19.8 and \n24.2 per cent, respectively, at the end of the first half of 2013. Similarly, \ndeposits below one year constituted 95.6 per cent of the total, of which 72.7 \nper cent had maturity of less than 30 days. Long-term deposits constituted 1.1 \nper cent and exceeded the 0.003 per cent recorded at the end of the first \nhalf of 2013. As in the preceding period, the near-absence of long-term \ndeposits continued to constrain the ability of banks to create long-tenored \nrisk assets crucial for economic development and transformation. \nFigure 40 \nMaturity Structure of Deposit Money Banks (DMBs) Loans and Advances \n \nFigure 41 \nMaturity Structure of Banks Deposits \n0.00\n0.50\n1.00\n1.50\n2.00\n2.50\n3.00\n3.50\n4.00\n94.00\n94.50\n95.00\n95.50\n96.00\n96.50\n97.00\n97.50\n98.00\n98.50\n99.00\nH1 10\nH2 10\nH1 11\nH2 11\nH1 12\nH2 12\nH1 13\nH2 13\nH1 14\nPer cent\nPer cent\nShort term\nMedium-term - (Above 1 year and Below 3 Years) rhs\nLong-Term (3 Years and Above) rhs\n \n0\n10\n20\n30\n40\n50\n60\n70\nJun 12\nDec 12\nJun 13\nDec 13\nJun 14\nPer cent\nShort term\nMedium term\nLong term\n \n \n \n58 \nTable 10 \nMaturity Structure of Banks Assets and Liabilities \nAssets (Loans and Advances) \nJun 12 \nDec 12 \nJun 13 \nDec 13 \nJun 14 \nTenor \n \n \n \n \n \n0-30 days \n31.3 \n35.6 \n31.1 \n27.5 \n31.5 \n31-90 days \n12.3 \n11.6 \n10.7 \n12.7 \n11.0 \n91-181 days \n7.9 \n6.1 \n7.7 \n4.9 \n6.7 \n181-365 days \n7.4 \n6.4 \n6.6 \n7.5 \n7.4 \nShort term \n59.1 \n57.4 \n56.0 \n52.6 \n56.6 \nMedium Term (Above 1yr and \nbelow 3yrs) \n14.8 \n17.9 \n19.8 \n19.1 \n16.8 \nLong-Term (3 Years and Above) \n26.1 \n24.7 \n24.2 \n28.3 \n26.6 \nLiabilities \n \n \n \n \n \n0-30 days \n77.3 \n77.0 \n77.5 \n74.51 \n72.72 \n31-90 days \n11.5 \n13.8 \n11.4 \n14.33 \n13.59 \n91-181 days \n4.8 \n3.7 \n4.5 \n4.69 \n5.48 \n181-365 days \n3.9 \n3.3 \n3.8 \n3.62 \n3.76 \nShort term \n97.6 \n97.8 \n97.2 \n97.15 \n95.55 \nMedium Term (Above 1yr and \nbelow 3yrs) \n2.4 \n2.2 \n2.8 \n2.84 \n3.38 \nLong-Term (3 Years and Above) \n0.012 \n0.009 \n0.003 \n0.01 \n1.07 \nTotal \n100 \n100 \n100 \n100 \n100 \n \nFigure 42 \nDistribution of Private Sector Credit \n(End-June 2014) \nCredit to core \nprivate sector\n95.7%\nCredit to State \nand Local \nGovernment\n4.3%\n4.1.10 Market Structure of the Banking Industry \nThe banking industry remained oligopolistic in the first half of 2014. Available \ndata showed that the average market share of assets and deposits of the \nfive largest banks (concentration ratio, CR5) stood at 51.5 and 52.9 per cent, \nrespectively, compared with 51.0 and 52.7 per cent at the end of the first half \nof 2013. The market share of the largest bank with respect to assets and \ndeposits, stood at 13.7 and 14.8 per cent, respectively, at the end of the \nreview period, compared with 13.6 and 15.2 per cent at the end of the \n \n \n \n59 \ncorresponding half of 2013. However, the banking sector remained \ncompetitive in both deposits and assets as revealed by the respective \nHerfindahl-Hirschman Index (HHI) of 789.2 and 752.1 on a scale of 1000, \ncompared with 797.4 and 748.6, respectively, in the corresponding period of \n2013. \nFigure 43a \nMarket Structure of the Banking Industry \n0.00\n100.00\n200.00\n300.00\n400.00\n500.00\n600.00\n700.00\n800.00\n900.00\n48.00\n49.00\n50.00\n51.00\n52.00\n53.00\n54.00\n55.00\n56.00\nHY1 09\nHy2 09\nHy 110\nHy2 10\nHy1 12\nHy2 12\nHy2 12\nHy1 12 Hy 1 13 Hy 2 13 Hy1 14\nHHI\nCR 5\nCR(Deposits)\nCR( Assets)\nHHI (Deposits) rhs\nHHI (Assets) rhs\n \nFigure 43b \nMarket Structure of the Banking Industry: Concentration Ratio of Largest Firm \n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\n14.00\n16.00\n18.00\nHY1 09\nHy2 09\nHy 110\nHy2 10\nHy1 12\nHy2 12\nHy2 12\nHy1 12\nHy 1 13\nHy 2 13\nHy1 14\nCR\nCR( Largest-Deposits)\nCR (Largets-Assets)\n \n \n \n \n \n \n60 \n4.1.11 Consumer Credit \nConsumer credit grew by 3.5 per cent to N809.78 billion in the first half of \n2014, compared with 0.8 per cent recorded at the end of the corresponding \nperiod of 2013. At that level, consumer credit constituted 5.0 per cent of total \noutstanding credit to the core private sector, up from 4.2 per cent at end-\nDecember 2013. \nFigure 44 \nConsumer Credit of DMBs \n(N’ Billion) \n-10.00\n-5.00\n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\n30.00\n -\n 2,000.00\n 4,000.00\n 6,000.00\n 8,000.00\n 10,000.00\n 12,000.00\n 14,000.00\n 16,000.00\n 18,000.00\nH1 2011\nH2 2011\nH1 2012\nH2 2012\nH1 2013\nH2 2013\nH1 2014\nPe r cent\nN Billion\nClaims on the core provate sector\nConsumer Credit\nGrowth over preceding December (%) rhs\nRatio of claims on core private sector (%) rhs\n \n4.1.12 Weighted Effective Average Cost of Funds (WEACF) for Banks \nThe weighted effective average cost of funds for banks stood at 12.0 per \ncent (without overhead costs) in the first half of 2014, the same as in the \ncorresponding period of 2013. The computed WEACF without overheads \nstood at 5.1 per cent, compared with 5.9 per cent in the first half of 2013. \n Table 11 \nWeighted Effective Average Cost of DMBs Funds (WEACF) (Per cent) \n \nH2 10 \nH1 11 \nH2 11 \nH1 12 \nH2 12 \nH1 13 \nH2 13 \nH1 14 \nInterest expense \n5.82 \n6.33 \n5.30 \n5.66 \n4.88 \n5.25 \n4.95 \n4.53 \nDeposit Insurance \npremium \n0.69 \n0.72 \n0.69 \n0.71 \n0.72 \n0.69 \n0.70 \n0.58 \nOverheads \n7.34 \n6.63 \n7.23 \n8.83 \n5.93 \n6.10 \n6.85 \n6.93 \nSalaries and Wages \n3.43 \n2.97 \n3.12 \n4.05 \n4.21 \n3.82 \n3.53 \n3.97 \nOthers \n3.90 \n3.61 \n4.24 \n4.73 \n4.56 \n5.22 \n4.10 \n4.54 \nEACF with overheads \n13.85 \n13.68 \n13.22 \n15.20 \n11.52 \n12.04 \n12.50 \n12.04 \nEACF without \noverheads \n6.51 \n7.05 \n5.99 \n6.37 \n5.59 \n5.94 \n5.65 \n5.10 \n \n \n \n \n61 \nIn terms of contribution to WEACF, interest expense contributed 37.3 per \ncent, while overheads and insurance premium contributed 57.8 and 4.9 per \ncent, respectively. Consequently, interest expense and overheads remained \nthe main drivers of banks cost of funds. \n \nTable 12 \nComposition as Percentage of WEACF \n \nHY1 11 \nHY2 11 \nHY1 12 \nHY2 12 \nHY1 13 \nHY2 13 \nHY1 14 \nInterest expense (2) \n44.91 \n39.13 \n37.16 \n45.30 \n43.94 \n42.27 \n37.29 \nDeposit insurance premium (3) \n5.39 \n5.30 \n4.80 \n7.27 \n6.13 \n6.73 \n4.88 \nOverhead cost (4) \n49.70 \n55.57 \n58.04 \n47.43 \n49.93 \n50.99 \n57.83 \n \nFigure 45 \nTrends in Weighted Effective Average Cost of Banks Funds \n0.0\n2.0\n4.0\n6.0\n8.0\n10.0\n12.0\n14.0\n16.0\n1st half 2012\n2nd half 2012\n1st half 2013\n2nd half 2013\n1st half 2014\nPer cent\nEACOF ( with over heads)\nEACOF (without over heads)\n \n4.1.13 Money Market Developments \nIn the first half of 2014, activities in the money market were influenced by the \nliquidity flow in the banking system. The redemption of AMCON bonds in \nDecember 2013, repayment of matured CBN bills and FGN Bonds, payment \nof Joint Venture Cash (JVC) calls to oil partners, as well as the periodic \nstatutory revenue allocation (SRA) boosted the level of liquidity in the system. \nIn addition, the attractive yields on fixed income securities and the \ncomparative edge in interest rates arising from sustained tight monetary \npolicy attracted foreign direct investment and bolstered liquidity. Patronage \nfor the CBN’s Standing Deposit Facility (SDF) remained high, while that for the \n \n \n \n62 \nStanding Lending Facility (SLF) was minimal. Open market operations were \ncomplemented with the upward review of CRR on both private and public \nsector deposits, which resulted in the withdrawal of N806.75 billion during the \nreview period. Consequently, money market rates were relatively stable \nduring the review period. \nThe Monetary Policy Committee (MPC) at its three (3) meetings in the review \nperiod retained the Monetary Policy Rate (MPR) at 12.00 per cent with the \nsymmetric corridor of ± 200 basis points. The liquidity ratio and net open \nposition (NOP) limit were also retained at 30.00 and 1.00 per cent, \nrespectively. The Bank increased the cash reserve requirement (CRR) on \npublic sector deposits from 50.0 per cent to 75.0 per cent, in the first half of \n2014, while CRR on private sector deposits was raised to 15.0 per cent from \n12.0 per cent within the review period. \n 4.1.13.1 Money Market Assets Outstanding \nProvisional data indicated that money market assets outstanding at the end \nof the first half of 2014 stood at N7,195.99 billion, showing increase of 4.9 and \n9.6 per cent above the levels at end-December 2013 and the corresponding \nhalf year, respectively. The development relative to the preceding half year \nreflected, mainly, the increase of N147.8 billion (8.4%) and N154.32 billion \n(10.2%) in FGN Bonds and Nigerian Treasury Bills outstanding, respectively. \nFigure 46 \nMoney Market Assets Outstanding \n(End-June 2014) \nNTBs\n38.04%\nFGN Bond\n60.75%\nCommercial Paper\n0.15%\nBankers Acceptance\n0.35%\nCertificate of \nDepsosits\n0.71%\n \n \n \n \n63 \nA breakdown of the money market assets outstanding at the end of the first \nhalf of 2014 showed that 60.75 per cent of the assets were held in FGN Bond, \nwhile 38.04, 0.35, 0.71 and 0.15 per cent were NTBs, Bankers Acceptance, \nCertificate of Deposits and Commercial Paper, respectively. \n4.1.13.2 Primary Market \nAt the Nigerian Treasury Bills auction, N399.05 billion worth of 91-day bills was \noffered and sold with bid rates ranging from 9.20 to 14.0 per cent, and stop \nrates ranging from 9.2 to 11.6 per cent. At the 182- and 364-day auction, bills \nworth N567.82 billion and N1,262.84 billion were offered and sold at the rates \nof 9.5 to 12.8 per cent and 9.5 to13.0 per cent, respectively. Total subscription \nstood at N5,607.36 billion, compared with N4,268.72 billion in the \ncorresponding half year of 2013. The huge subscription in the review period \nwas attributed to the growing demand for government securities owing to \nattractive yields. \nTable 13 \n Bid-Cover Ratios of Selected Securities \nTENOR (DAY) \n91-day \n182-day \n364-day \nTOTAL (Nbn) \nOFFER AMOUNT (Nbn) \n399.05 \n567.82 \n1262.84 \n2229.71 \nTOTAL SUBSCRIPTION (Nbn) \n656.72 \n1368.01 \n3582.63 \n5607.36 \nALLOTMENT (Nbn) \n399.05 \n567.82 \n1262.84 \n2229.71 \nBID COVER RATIO \n1.65 \n2.41 \n2.84 \n \nBID RANGE \n9.20-11.62 \n9.45-12.75 \n9.54-12.99 \n \n \nThe bid-cover ratios for the various tenors were 1.7, 2.4 and 2.8 for the 91, 182- \nand 364-day, respectively. The high (above 2.0) bid-to-cover ratio for 182- \nand 364-day tenors indicated investors’ preference for longer maturities. \nThus, total NTBs outstanding at end-June 2014 stood at N2,735.87 billion, \nshowing an increase of 10.2 per cent over the N2,483.29 billion at the end of \nthe first half of 2013. \n \n \n \n64 \nFigure 47 \nNigerian Treasury Bills Outstanding \n (N’ Billion) \n1,561.42 \n1,727.91 \n2,084.59 \n2,483.29 \n2,735.86 \n -\n 250.0\n 500.0\n 750.0\n 1,000.0\n 1,250.0\n 1,500.0\n 1,750.0\n 2,000.0\n1st Half 2010\n1st Half 2011\n1st Half 2012\n1st Half 2013\n1st Half 2014\nN' Billion\n \nDuring the review period, the CBN, in collaboration with the Debt \nManagement Office, issued a new tranche of the 10-year FGN Bond, while 3, \n10- and 20-year tranches were reopened. The term to maturity of the bonds \nranged from 2 years 2 months to 16 years 5 months. Total value of FGN Bonds \noffered was N460.10 billion, while public subscription and sale stood at \nN1,161.50 billion and N465.00 billion, respectively. The increased demand for \nthe securities was attributed to the high level of liquidity in the banking \nsystem, investors’ preference for risk-free long-term instruments, and \nattractive coupons. A total of N380.0 billion matured FGN Bond was repaid, \nculminating to an injection of N85.0 billion into the banking system. \n \nFigure 48 \nDistribution of FGN Bonds \n(End-June 2014, per cent) \nBanks and Discount \nHouses\n46.0%\nOthers\n54.0%\n \n \n \n \n65 \nThus, the total value of bonds outstanding at end-June 2014 stood at \nN4,369.84 billion, compared with N4,032.90 billion at end-June 2013, \nrepresenting an increase of N336.94 billion or 8.4 per cent. \n4.1.13.3 Open Market Operations (OMO) \nIn line with the monetary policy stance of the Bank to rein in inflation and \nmaintain rates at target levels, open market operations continued to be \nemployed for liquidity management in the first half of 2014. \n4.1.13.4 OMO Auctions \nOMO auctions were conducted during the first half of the year to deepen \nthe secondary market, boost tradable securities and to mop-up excess \nliquidity in the banking system. Direct OMO auctions were conducted \nseventy-one (71) times to mop-up excess liquidity using CBN bills ranging from \n39 to 147 days. Total subscription amounted to N5,454.46 billion, while total \nCBN bills sold were N4,484.94 billion. The bid rates ranged from 9.95 to 13.4 \nper cent. The upward review of CRR on both public and private sector \ndeposit resulted in the withdrawal of N806.8 billion during the review period. \nIn the corresponding period of 2013, the amount sold was N7,099.5 billion, \nwhile total subscription was N11,532.8 billion. The sum of N181.4 billion was \nexpended in the conduct of OMO, compared with N360.4 billion in the \ncorresponding half of 2013. CBN bills valued at N5,065.6 billion matured and \nwere repaid in the review period, translating to a net injection of N580.7 \nbillion in the first half of 2014. \n4.1.13.5 \nThe Two-Way Quote Trading in NTBs \nThe two-way quote trading platform remained inactive in the review period, \nsame as in the corresponding half year of 2013. \n4.1.13.6 \nRepurchase Transactions \nThere was no request for repurchase transactions in the review period as in \nthe corresponding half year of 2013. \n \n \n \n66 \n4.1.13.7 \nCentral Bank of Nigeria (CBN) Standing Facilities \nIn the first half of 2014, the Bank continued to provide standing facilities to \ndeposit money banks and discount houses to enable them meet their short-\nterm liquidity needs and surpluses. The rates for SDF and SLF remained at 10.0 \nper cent and 14.0 per cent, respectively, throughout the review period as the \nanchor rate (Monetary Policy Rate) remained at 12.0 per cent. \n4.1.13.7.1 Standing Lending Facility (SLF) \nOn request, Standing Lending Facility were availed to banks and discount \nhouses that were in need to offset their negative closing balances at the end \nof each business day. The total request for the SLF granted in the first half of \n2014 was N3,487.9 billion, out of which N1,641.7 billion was the automated \nconversion of Intra-day Facility to overnight repo. The daily average request \nwas N29.7 billion in 94 working days, while the interest earned amounted to \nN196.51 million. In comparison with the corresponding period of 2013, the \ntotal SLF demanded stood at N5,341.5 billion, depicting a daily average of \nN43.6 billion. The development in the review period could be attributed to \nthe inflow from matured FGN Bonds and NTBs. \n4.1.13.7.2 Standing Deposit Facility (SDF) \nStrong patronage at the SDF window reflected the liquidity surfeit in the \nsystem. The daily average deposit at the SDF window in the first half of 2014 \nwas N376.1billion, compared with N142.3 billion in the corresponding period \nof 2013. The average interest paid on SDF in the review period stood at N0.15 \nbillion, compared with N57.70 million in the corresponding period of 2013. \n4.1.13.8 Inter-Bank Funds Market \nThe value of Inter-bank transactions stood at N3,646.3 billion, down from \nN13,192.9 billion in the first half of 2013. The unsecured call and tenored \nsegments amounted to N87.5 billion, compared with N4,548.7 billion in the \nfirst half of 2013. At the Open-Buy-Back (OBB) segment, the value of \ntransactions declined to N3,558.8 billion, from N8,643.9 billion in the first half of \n2013. The lower level of transactions at the unsecured segment was \nattributed, largely, to the launching of new real time gross settlement (RTGS) \n \n \n \n67 \nand Scripless Security Settlement System (S4), both of which facilitated the \ntransfer of securities and settlement. \n4.1.14 Interest Rate Developments \nMoney market rates were relatively stable in the first half of 2014. Short-term \nrates in all the segments of the money market were lower than the levels in \nthe corresponding period of 2013. The monthly weighted average inter-bank \nand OBB rates ranged from 10.00 to 10.63 per cent and 10.38 to 12.25 per \ncent, respectively. Weighted average inter-bank rate in the first half of 2014 \nstood at 10.46 per cent, down from 11.52 per cent in the corresponding half \nof 2013. The OBB average rate declined to 10.93 per cent from 11.27 per cent \nin the corresponding period of 2013. \n \nTable 14 \nMoney Market Rates \n (Per cent) \nWEIGHTED AVERAGE \nMonth \nMPR \nCall \nRate \nOBB \nNIBOR 7-\ndays \nNIBOR 30-\ndays \nJan-14 \n12.0 \n10.00 \n10.48 \n10.85 \n11.18 \nFeb-14 \n12.0 \n10.50 \n11.25 \n12.02 \n12.37 \nMar-14 \n12.0 \n10.50 \n12.25 \n12.77 \n13.11 \nApr-14 \n12.0 \n10.50 \n10.61 \n11.41 \n11.80 \nMay-14 \n12.0 \n10.63 \n10.38 \n10.66 \n12.41 \nJun-14 \n12.0 \n10.63 \n10.60 \n10.66 \n12.21 \nAverage 2014 \nFirst Half \n12.0 \n10.46 \n10.93 \n11.40 \n12.18 \nAverage 2013 \nFirst Half \n12.0 \n11.52 \n11.27 \n12.01 \n12.42 \n \nThe weighted average of the Nigeria Inter-bank Offered Rate (NIBOR) for the \n7- and 30-day tenors were 11.40 and 12.01 per cent, respectively, compared \nwith the 12.01 and 12.42 per cent recorded in the corresponding half of 2013. \n \n \n \n \n68 \nFigure 49 \nMoney Market Rates \n(per cent) \n8\n10\n12\n14\n16\nJun'12\nJun'13\n14-Jan\n14-Feb\n14-Mar\n14-Apr\n14-May\n14-Jun\nPer cent\nMPR\nCall Rate\nOBB\n \n4.1.14.1 Money Market Rates \n4.1.14.1.1 Deposit Rates \nDeposit rates rose in the first half of 2014. Average term deposit rate rose by \n1.7 percentage points to 8.6 per cent above the level in the corresponding \nhalf of 2013. All other rates on deposits of various maturities rose from a range \nof 4.90 – 8.10 per cent in the first half of 2013 to a range of 4.80 – 8.99 per \ncent in the review period. The developments in interest rates were attributed \nto the tight monetary policy stance of the Bank. With the year-on-year inflation \nrate at 8.2 per cent in June 2014, most deposit rates were negative in real term. \n4.1.14.1.2 Lending Rates \nIn the first half of 2014, the weighted average prime and maximum lending \nrates rose by 0.1 and 1.0 percentage points to 16.72 and 25.52 per cent, \nrespectively, above the rates in the corresponding period of 2013. \nConsequently, the spread between the average term deposits and \nmaximum lending rates narrowed to 16.92 from 17.67 percentage points. \n \n \n \n69 \nTable 15 \nDMBs Deposits and Lending Rates \n(Per cent) \nMonth \nSavings \nAverage \nTerm \nDeposit \nPrime \nLending \nMaximum \nLending \nJan-14 \n3.27 \n8.43 \n16.95 \n25.52 \nFeb-14 \n3.26 \n8.49 \n16.93 \n25.83 \nMar-14 \n3.38 \n8.73 \n16.69 \n25.80 \nApr-14 \n3.42 \n8.69 \n16.70 \n25.63 \nMay-14 \n3.41 \n8.66 \n16.50 \n25.76 \nJun-14 \n3.42 \n8.57 \n16.50 \n24.58 \nAverage 2014 H1 \n3.36 \n8.60 \n16.72 \n25.52 \nAverage 2013 H1 \n1.88 \n6.88 \n16.60 \n24.55 \n \n4.1.15 Yields on Fixed Income Securities \nYields on fixed income securities were generally higher in the first half of 2014 \nthan in the corresponding period of the preceding year. Yields were more \nvolatile at the shorter end than the medium and the long-term segments of \nthe curve. \nFigure 50 \nGovernment Bonds Average Yield Curve \n(Per cent) \n \n \n \nThe yield curve remained normal with the average spread (the difference \nbetween the longest and shortest maturities) at 0.3 percentage point from \n1.4 percentage point in the corresponding period of the preceding year. The \n \n \n \n70 \ndevelopment during the review period could be attributed to the overall \nmarket stability. It might also be signaling investors’ optimism about the \nmedium to long-term expectation of economic activities. \n4.1.16 Institutional Savings \nAggregate financial savings rose by 5.0 per cent to N9,511.0 billion in the first \nhalf of 2014, compared with N9,224.4 billion and N9,085.6 billion at end-\nDecember 2013 and the corresponding period of 2013, respectively. DMBs \nremained the dominant depository institutions in the financial system, \naccounting for 90.0 per cent of the total financial savings, compared with \n95.2 per cent in the preceding half year. Other savings institutions, namely \nPMBs, life insurance companies, pension fund custodians, the Nigerian Social \nInsurance Trust Fund (NSITF), and microfinance banks (MFBs) accounted for \nthe balance. \n4.1.17 Other Financial Institutions \n4.1.17.1 Development Finance Institutions \nProvisional data indicated that total assets of the six (6) Development Finance \nInstitutions (DFIs) namely: Bank of Agriculture (BOA); Bank of Industry (BOI); \nFederal Mortgage Bank of Nigeria (FMBN); Nigerian Export-Import Bank \n(NEXIM); \nThe Infrastructure \nBank \n(TIB); \nand \nthe \nNational Economic \nReconstruction Fund (NERFUND) declined by 2.0 per cent to N575.10 billion at \nend-June 2014, from N586.7 billion at end-December 2013. Similarly, the \naggregate net loans and advances declined by 3.5 per cent to N345.60 \nbillion, from N358.20 billion at end-December 2013. The decline relative to the \npreceding half year was attributed to the deterioration in the financial \nperformance of NERFUND. A disaggregation of the asset base of the \ninstitutions indicated that BOI, FMBN, BOA, NEXIM, TIB and NERFUND \naccounted for 51.5, 24.5, 9.1, 9.0, 5.3 and 0.6 per cent, respectively, of the \ntotal. \n \n \n \n71 \n4.1.17.2 Microfinance Banks (MFBs) \nTotal assets/liabilities of the reporting microfinance banks (MFBs) stood at \nN280.80 billion at the end of the first half of 2014, representing an increase of \n3.6 per cent over the level at end- December 2013. Similarly, the paid-up \nshare capital, shareholders’ funds and net loans/advances increased by 7.7, \n16.2 and 0.4 per cent to N72.60 billion, N84.80 billion and N129.50 billion, \nrespectively, over the levels at end-December 2013. Aggregate reserves also \nrose to N12.10 billion at the end of the review period, compared with N5.6 \nbillion at end-December 2013. The developments were due, mainly, to \nincreased capitalisation, which resulted in significant improvement in the \noperational performance of the institutions. Investible funds available to the \nsub-sector during the review period amounted to N39.30 billion. The funds \nwere sourced mainly, from a reduction in other assets (N13.40 billion) and \nincrease in deposit liabilities (N8.5 billion), accumulated reserves (N6.50 \nbillion) and paid-up capital (N5.20 billion). The funds were utilised, mainly, to \nincrease bank balances (N14.90 billion), reduce other liabilities (N11.60 billion) \nand increase placements with banks (N6.60 billion). \n4.1.17.3 Discount Houses \nTotal assets/liabilities of the two (2) discount houses (DHs) in operation during \nthe review period increased by 29.4 per cent to N173.20 billion at the end of \nthe first half of 2014, compared with N133.80 billion and N344.20 billion at \nend-December 2013 and the corresponding period of 2013, respectively. \nAggregate funds sourced amounted to N23.40 billion in the first half of 2014, \ncompared with N11.30 billion and N43.00 billion at end-December 2013 and \nthe corresponding period of 2013, respectively. The funds were mainly, from \nreduction in claims on the Federal Government (N11.80 billion), claims on \nbanks (N8.90 billion) and increase in other liabilities (N1.20 billion). The funds \nwere utilized, largely, to reduce borrowings (N9.00 billion), other amount \nowed to customers (N7.70 billion) and increased claims on others (N6.10 \nbillion). Discount houses’ investment in Federal Government securities of less \nthan 91-day maturity, amounted to N63.90 billion in the review period, \n \n \n \n72 \nrepresenting 50.2 per cent of their total liabilities. This was 9.8 percentage \npoints below the prescribed minimum level of 60.0 per cent for fiscal 2014. \n4.1.17.4 Finance Companies (FCs) \nTotal assets/liabilities of the 61 reporting finance companies (FCs) declined \nby 0. 3 per cent to N102.73 billion at end-June 2014, compared with N103.05 \nbillion at end-December 2013. Similarly, total borrowings decreased by 2.4 \nper cent to N57.78 billion at end-June 2014, below N59.22 billion recorded at \nend-December 2013. However, the paid-up capital increased by 7.6 per \ncent to N15.81 billion at end-June 2014, compared with N14.69 billion at end-\nDecember 2013. Aggregate loans/advances and reserves also increased by \n8.3 and 20.3 per cent to N50.60 billion and N4.30 billion, respectively, \nreflecting improved operational performance of the FCs. Investible funds \navailable to the institutions during the period amounted to N6.34 billion. The \nfunds were sourced, mainly, from reductions in placements with banks (N3.24 \nbillion), fixed assets (N0.59 billion), increase in paid-up capital (N1.12 billion) \nand reserves (N0.73 billion). The funds were utilized mainly to increase \nloans/advances (N3.87 billion) and reduction in borrowings (N1.44 billion). \n4.1.17.5 Primary Mortgage Banks (PMBs) \nTotal assets/liabilities of primary mortgage banks (PMBs) decreased by 14.5 \nper cent to N413.70 billion at end-June 2014, compared with N484.00 billion \nat end-December 2013. The development was attributed to the delisting of \nsixteen (16) PMBs that applied for conversion to other categories of OFIs. The \npaid-up capital, deposit liabilities and loans/advances also decreased by \n14.1, 11.2 and 12.5 per cent to N129.00 billion, N146.30 billion and N137.80 \nbillion, respectively, at end-June 2014. Aggregate reserves, however, \nimproved from negative N5.70 billion at end-December 2013 to N26.80 billion \nat end-June 2014; and shareholders’ funds also increased by 7.7 per cent to \nN155.80 billion at the end of the first half of 2014. Investible funds available to \nthe sub-sector during the review period amounted to N102.70 billion. The \nfunds were sourced, mainly, from the respective reduction of N43.50 billion \nand N19.60 billion in investments and loans/advances, and the N32.40 billion \n \n \n \n73 \nincrease in aggregate reserves. The funds were utilized primarily to reduce \nother liabilities (N51.8 billion), paid-up capital (N21.30 billion), and deposit \nliabilities (N18.40 billion). \n4.1.17.6 Bureaux-De-Change (BDCs) \nThere were 3,256 licensed BDCs in operation in the first half of 2014, \ncompared with 2,890 at end-December 2013, indicating a 12.7 per cent \nincrease. The development reflected the issuance of additional 366 licences \nduring the first half of 2014. \n4.1.17.7 Asset Management Corporation of Nigeria (AMCON) \nDuring the half year, AMCON’s total bond liability to private investors and \ndeposit money banks, was N866.00 billion, redeemable on October 31, 2014. \nThe balance of Eligible Bank Assets (EBAs) purchased by the Corporation \nstood at N1.61 trillion at end-June 2014, compared with N2.37 trillion and \nN2.72 trillion at end-December 2013 and end-June 2013, respectively. \nRestructured loans of the Corporation amounted to N428.65 billion at end-\nJune 2014, compared with N374.35 billion at end-December 2013. The \ndevelopment was an indication that borrowers were finding it difficult to \nmeet their obligations to the Corporation. \nThe AMCON continued the process of divestment from Enterprise Bank Ltd \nand Mainstreet Bank Ltd. At the end of the first half of 2014, the seven (7) \npreferred bidders for Enterprise Bank Ltd were at the point of completing their \ndue diligence, while qualified parties had been shortlisted for the execution \nof Non-Disclosure Agreements in the divestment process from Mainstreet \nBank Ltd. Furthermore, a second public hearing on the proposed \namendment of the AMCON Act 2010 was held on February 17, 2014 by the \nSenate. \n4.1.17.8 Nigerian Mortgage Refinancing Company (NMRC) \nThe Nigerian Mortgage Refinance Company (NMRC) was launched by the \nPresident on January 16, 2014. Although the Company was yet to meet the \nconditions for grant of final approval by the CBN at end-June 2014, it was \n \n \n \n74 \nfocused at fulfilling the conditions and disbursing its first set of mortgage \nrefinance loans in the second half of 2014. \n4.1.18 Capital Market Developments \n4.1.18.1 Institutional Developments \nDuring the first half of 2014, the capital market regulatory authorities \ncontinued to implement various measures towards sustaining investors’ \nconfidence and engendering market efficiency. A major initiative of the \nSecurities and Exchange Commission (SEC) in the review period was the \ninauguration of the pilot Warehouse Receipt Scheme. The Scheme was \nexpected to provide a centralised market place for commodity producers \nand address the persistent problems of limited access to credit by farmers. \nThe Scheme, when fully operational, would facilitate price discovery, reduce \nrisk and costs, and improve market efficiency. Also, in the review period, the \nCommission introduced electronic filling for the market and, thus, \ncommenced e-review and e-filling process of transactions through \ndedicated e-mail process. \nAs part of its efforts at sanitizing the market, the SEC successfully concluded \nthe review of database of capital market operators (CMO), deregistered \ndormant CMOs, registered fresh CMOs and implemented a regular database \nvalidation exercise. The Commission also produced a surveillance manual for \nthe market. Similarly, a capital adequacy assessment exercise of all \nregistered fund managers was conducted by the SEC. The exercise revealed \nthat: fifty-three (53) firms had adequate capital; nine (9) inadequate capital; \nthirty-one (31) grossly inadequate; while there was no information on thirty-six \n(36) fund managers. Also, the Commission conducted a review of nine (9) \nbanks’ divestment from non-permissible banking businesses in line with the \nCBN’s guidelines. Other regulatory activities carried out included: receipt \nand resolution of complaints against capital market operators; and off-site \ninspection of operations of CMOs, among others. \nIn line with its policy of continuous monitoring and improvement to sustain the \nvibrancy of the market, the Nigerian Stock Exchange Council carried out its \n \n \n \n75 \nbiannual review of the NSE Indices. Having considered mergers, takeovers, \nsuspension or resumption of trading or any other changes in company \nstructure, which may have taken place during the period, the Council \nreconstituted the stocks that make up the indices, including the NSE-30, NSE-\nBanking, NSE-Consumer Goods, NSE-Oil & Gas, NSE-Industrial, NSE-Lotus \nIslamic and NSE-Insurance. \n4.1.18.2 The Nigerian Stock Exchange (NSE) \nDevelopments in the Nigerian stock market were mixed in the first half of \n2014. In the primary market segment, there were a total of six (6) new issues, \ncomprising two (2) rights issues and one (1) each of Private Placement, \nGlobal Equity Offering, Special Placement and Corporate Bond. In addition, \nthe SEC approved applications for thirty eight (38) equity offers, ten (10) \nbond issues and twenty five (25) allotments. In the secondary segment of the \nmarket, the aggregate volume and value of securities traded fell by 9.5 and \n2.1 per cent to close at 52.8 billion shares valued at N579.30 billion, in 619,318 \ndeals, compared with 58.3 billion shares valued at N591.70 billion, in 764,560 \ndeals recorded in the corresponding period of 2013, respectively. The All-\nShare Index (ASI) and aggregate market capitalization, however, rose by 2.8 \nand 0.1 per cent to close at 42,482.48 and N19.09 trillion, respectively, \ncompared with 41,329.19 and N19.08 trillion at end-December 2013. \n4.1.18.3 New Issues Market \nThe Exchange recorded six (6) new listings, consisting of five (5) equities and \none (1) debt issue in the first half of 2014. The new equity issues comprised \ntwo (2) rights issue, and one (1) each of Private Placement, Special \nPlacement and Global Equity Offering. One (1) Corporate Bond issue was \nalso made in the review period. A total of N134.10 billion was raised from all \nthe new listings, with the bulk, N129.60 billion (96.6 per cent) from equities, \nwhile the debt issuance accounted for the balance of N4.50 billion (3.4 per \ncent). \n \n \n \n76 \n4.1.18.4 The Secondary Market \nAvailable data indicated that transactions on the secondary segment of the \nNigerian Stock market declined in the first half of 2014. Aggregate volume \nand value of securities traded fell by 9.5 and 2.1 per cent to close at 52.8 \nbillion shares valued at N579.30 billion, respectively in 619,318 deals, \ncompared with 58.3 billion shares valued at N591.70 billion, in 764,560 deals \nrecorded in the corresponding period of 2013, respectively. The equities sub-\nsector sustained its dominance in the secondary segment of the market as it \naccounted for 99.9 per cent of the aggregate trade transactions, while the \ndebt market accounted for the balance. Sectoral analysis of the \ndevelopments in the market indicated that the financial services sector \n(driven largely by activities in the banking sub-sector) remained the most \nactive on the Exchange with a traded volume of 39.4 billion shares, valued at \nN305.80 billion in 335,956 deals, compared with 42.5 billion shares, valued at \nN327.70 billion in 446,996 deals in the first half of 2013. \nProvisional data on cumulative transactions on the Over-the-Counter (OTC) \nbond segment of the market, showed a turnover of 21.08 million units worth \nN20.45 billion in 40 deals in the first half of 2014, compared with a turnover of \n4.74 billion units worth N5.59 trillion in 27,895 deals in the corresponding period \nof 2013. \nFigure 51 \nVolume and Value of Transactions at the NSE \n0\n200\n400\n600\n800\n0\n20\n40\n60\n80\nFirst half 2011\nFirst half 2012\nFirst half 2013\nFirst half 2014\nValue in Naira (billion)\nVolume in Numer (Billion)\nVolume of traded securities (LHS)\nValue of securities (RHS)\n \n4.1.18.5 All-Share Index and Aggregate Market Capitalisation \nThe All-Share Index (ASI) recorded moderate performance relative to the \nlevel at end-December 2013. The NSE ASI rose by 2.8 per cent to 42,482.48 at \n \n \n \n77 \nthe end of the first half of 2014, compared with 41,329.19 at end-December \n2013. It indicated a 17.5 per cent increase, compared with the level at the \nend of the first half of 2013. Aggregate market capitalisation of all the listed \nsecurities closed at N19.09 trillion, indicating increase of 0.1 and 20.9 per cent \nover the levels at end-December 2013 and the corresponding period of \n2013, respectively. Listed equities accounted for 73.5 per cent of the \naggregate market capitalization (N14.03 trillion), while the debt component \naccounted for the balance of 26.5 per cent (N5.06 trillion). The top twenty \n(20) most capitalized companies on the Exchange accounted for 84.5 per \ncent (N11.90 trillion) of the total equity capitalization and 62.3 per cent of the \naggregate (equity plus debt) market capitalisation. Six (6) banks, \nrepresenting 30.0 per cent, made the list of the top twenty (20) most \ncapitalized companies and accounted for N2.60 trillion (18.2 per cent) of the \ntotal equity market capitalization, compared with eight (8) banks in the \ncorresponding period of 2013. \nAs \na \npercentage \nof \nestimated \nnominal \nGDP, \naggregate \nmarket \ncapitalization stood at 45.1 per cent, compared with 40.8 per cent recorded \nat end of the first half of 2013. \nFigure 52 \nMarket Capitalisation and NSE Value Index \n0\n5\n10\n15\n20\n0\n15000\n30000\n45000\n60000\n2008:H1\n2009:H1\n2010:H1\n2011:H1\n2012:H1\n2013:H1\n2014:H1\nNaira Trillion\nIndex\nNSE Index\nAggregate Market Capitalisation\n \n \n \n \n \n78 \n4.2 \nFISCAL OPERATIONS \n4.2.1 Federation Account Operations \nProvisional gross federally-collected revenue in the first half of 2014 stood at \nN5,109.03 billion or 12.1 per cent of GDP. This was below the proportionate \nbudget estimate by 6.0 per cent, but above the level in the corresponding \nperiod of 2013 by 6.3 per cent. The decrease in federally-collected revenue \nrelative to the proportionate budget estimate was as a result of the decline \nin non-oil revenue. Oil revenue constituted 70.5 per cent of total revenue, \nwhile non-oil revenue accounted for the balance. \n \nFigure 53 \nStructure of Gross Federation Revenue \n(First Half 2014, N’ Billion) \n2,445.42 \n3,828.05 \n4,357.61 \n3,648.04 \n3,604.39 \n830.45\n930.91\n1,219.61 \n1,158.46 \n1,504.64 \n -\n 2,000.00\n 4,000.00\n 6,000.00\n2010\n2011\n2012\n2013\n2014\nOil Revenue\nNon-Oil Revenue\n \nAt N3,604.39 billion or 8.5 per cent of GDP, gross oil revenue grew by 0.6 per \ncent above the proportionate budget estimate, but was 1.2 per cent below \nthe level in the first half of 2013. The improvement in oil revenue relative to the \nbudget estimate was attributed largely to the sustained high price of crude \noil in international market, despite the incessant pipeline vandalism and oil \ntheft in the Niger Delta region, which constrained crude oil/gas production \nand exports during the period. \n \n \n \n \n79 \nFigure 54 \nComposition of Oil Revenue \n(First Half 2014) \nCrude Oil / Gas \nExports\n30.4%\nPPT & Royalties\n47.5%\nDomestic Crude \nOil / Gas Sales\n20.8%\nOthers\n1.3%\n \nThe sums of N684.05 billion and N440.67 billion were deducted from the gross \noil receipts for Joint Venture Cash Calls; and Excess Crude Oil, Excess \nPPT/Royalty Accounts, and “Others”, respectively, leaving a net balance of \nN2,479.67 billion that was transferred to the Federation Account. \nGross revenue from non-oil sources, at N1,504.64 billion or 3.6 per cent of \nGDP, fell below the proportionate budget estimate by 18.9 per cent, but rose \nby 29.9 per cent, compared with the level in the corresponding period of \n2013. The fall in non-oil revenue relative to the budget estimate was \nattributed mainly to the decline in receipts from customs duties arising from \nreduced volume of imports. \nFigure 55 \nComposition of Non-Oil Revenue \n(First Half 2014) \nCorporate Tax\n38.7%\nEducation Tax\n1.3%\nCustoms & Excise\n17.1%\nVAT\n27.1%\nCustoms Levies \n(Fed. Accountt.)\n2.9%\nFG Indep. Rev.\n9.0%\nNITDF\n0.1%\nCustoms Levies \n(Non-Fed. \nAccountt.)\n3.8%\n \n \n \n \n \n80 \nThe sum of N217.35 billion was deducted from the non-oil revenue as cost of \ncollection, leaving a net distributable balance of N1,287.29 billion. \nOverall, the federally-collected revenue (net) amounted to N3,766.96 billion. \nOf this amount, the sums of N3,118.87 billion (82.8%), N134.01 billion (3.6%), \nN391.63 billion (10.4%) and N122.45 billion (3.2%) were transferred to the \nFederation Account, FG Independent Revenue, VAT Pool Account and \n“Other transfers”1, respectively. \nFigure 56 \nFederally Collected Revenue Distribution \n(First Half 2014) \nFederation \nAccount\n82.8%\nFG Indep. Rev.\n3.6%\nVAT\n10.4%\nOther Transfers\n3.2%\n \n \n4.2.1.1 \nRevenue Distribution for First Half, 2014 \nStatutory revenue to the three tiers of government and the 13% Derivation \nFund2 from the Federation Account (including SURE-P3 and NNPC Refunds) \nand VAT Pool Account was N3,754.26 billion in the first half of 2014. The \namount was below both the proportionate budget estimate and the level in \nthe first half of 2013 by 10.4 and 15.3 per cent, respectively. A breakdown \nshowed that the Federation Account amounted to N3,118.87 billion (83.1%); \nNNPC Refunds, N30.47 billion (0.8%); SURE-P, N213.29 billion (5.7%) and VAT \nPool Account, N391.63 billion (10.4%). \n \n1Includes Education Tax Fund, Customs Special Levies (Federation and Non-Federation) and National \nInformation Technology Development Fund. \n2 Amount shared among the oil producing states from the total oil revenue. \n3Subsidy Re-investment and Empowerment Programme, is the additional revenue to government from \nthe partial removal of petroleum subsidy. \n \n \n \n81 \n4.2.1.1.1 \nFederation Account Distribution \nDistribution from the Federation Account to the three tiers of government in \nthe first half of 2014 was as follows: Federal Government, N1,473.20 billion; \nwhile states and local governments received N747.23 billion and N576.08 \nbillion, respectively. The balance of N322.36 billion was shared as the 13% \nDerivation Fund among the oil producing states. \nIn addition, the Federal Government received N97.75 billion, while states and \nlocal governments as well as the 13% Derivation Fund got N49.58 billion, \nN38.23 billion and N27.73 billion, respectively, from the SURE-P. Furthermore, \nstates and local governments received N14.97 billion and N11.54 billion, while \nthe 13% Derivation Fund got N3.96 billion from NNPC Refunds. \n4.2.1.1.2 VAT Pool Account \nThe sum of N391.63 billion accrued to the VAT Pool Account in the first half of \n2014, representing a decrease of 3.5 per cent below the proportionate \nbudget estimate for the fiscal year. The distribution among the three tiers of \ngovernment was as follows: Federal Government, N58.74 billion; state \ngovernments, N195.82 billion; and local governments, N137.07 billion. \nOverall, the total federation revenue distribution for the period fell below the \n2014 proportionate budget estimate by 10.4 per cent. \nFigure 57 \nDistributions to the Tiers of Government \n(First Half 2014, N’ Billion) \n1,629.69\n1,007.60\n762.92\n354.05\n0\n200\n400\n600\n800\n1000\n1200\n1400\n1600\n1800\nFederal Government\nState Governments\nLocal Governments\n13% Derivation Fund\n \n \n \n \n \n82 \n4.2.2 Federal Government Finances \n4.2.2.1 Federal Government Fiscal Balance \nThe fiscal operations of the Federal Government in the first half of 2014 \nresulted in overall deficit of N325.11 billion or 0.8 per cent of GDP as against \nthe proportionate budget estimate and corresponding period of 2013 deficit \nof N482.10 billion and N415.40 billion, respectively. The deficit was financed \nmainly from domestic sources through the issuance of FGN Bonds and loans \nfrom the Special Fund (Development of Natural Resources). \nFigure 58 \nFGN Fiscal Balance \n(First Half 2014, N’ Billion) \n \n4.2.2.2 Federal Government Retained Revenue \nAt N1,771.27 billion or 4.2 per cent of GDP, the estimated retained revenue of \nFederal Government was lower than both the proportionate budget \nestimate and the level in the corresponding period of 2013 by 17.0 and 9.6 \nper cent, respectively. The decline in retained revenue, relative to the \nproportionate budget estimate, was attributed largely to the drop in the FGN \nindependent revenue and the share from the Federation Account. Analysis \nof the retained revenue revealed that the share from the Federation \nAccount was N1,473.20 billion (83.2%); VAT Pool Account, N58.75 billion \n(3.3%); Federal Government Independent Revenue, N134.01 billion (7.6%); \nSURE-P, N97.75 billion (5.5%); and “Others”, N7.56 billion (0.4%). \n \n \n \n \n83 \nFigure 59 \nComposition of Federal Government Retained Revenue \n(First Half 2014) \nFederation \nAccount\n83.2%\nFGN IR\n7.6%\nVAT\n3.3%\nSURE-P\n5.5%\n\"Others\"\n0.4%\n \n4.2.2.3 Total Expenditure of the Federal Government \nThe estimated aggregate expenditure of the Federal Government in the first \nhalf of 2014 was N2,096.37 billion or 5.0 per cent of GDP. This fell by 19.9 and \n11.8 per cent below the proportionate budget estimate and the level in the \ncorresponding period of 2013, respectively. The decline in total expenditure \nrelative to the proportionate budget estimate was accounted for, largely by \ndelay in capital releases induced by the late passage of the 2014 \nAppropriation Bill. Non-debt expenditure fell below the proportionate budget \nestimate by 28.4 per cent and constituted 77.2 per cent of total expenditure. \nTotal debt service amounted to N477.80 billion, representing 22.8 per cent of \nthe total. \nFigure 60 \nComposition of Federal Government Expenditure \n(First Half 2014) \nRecurrent \nExpenditure\n75.3%\nCapital \nExpenditure\n16.8%\nStatutory \nTransfers\n7.9%\n \n \n \n \n84 \nAt N1,577.88 billion, recurrent expenditure fell by 8.1 per cent below the \nproportionate budget estimate and accounted for 75.3 per cent of the total. \nThe reduction was due to the decline in outlay on goods and services. As a \npercentage of GDP, it contracted to 3.7 per cent, from the 4.4 per cent \nrecorded in the first half of 2013. A breakdown of the recurrent expenditure \nshowed that the goods and services component, at N979.27 billion (62.1%) of \nthe total, fell by 20.2 per cent below the half year budget estimate. This was \nlargely due to the reduction in overhead cost and pension payments. \nAnalysis of the goods and services component revealed that personnel cost \nand pensions amounted to N827.01 billion (84.5%), while overhead cost was \nN152.26 billion (15.5%). \nFurthermore, interest payments4 which was 30.3 per cent of the total or 1.1 \nper cent of GDP, rose to N477.80 billion (34.2%), relative to the proportionate \nbudget estimate for 2014. Of the amount, the sum of N36.36 billion was \nexpended on external debt service and N441.44 billion on domestic debt \nservice. Transfers to the Special Funds (FCT, Stabilization Fund, Development \nof Natural Resources and Ecology Funds) and “Others” explained N120.81 \nbillion or 7.6 per cent of the recurrent expenditure. \n \nFigure 61 \nEconomic Classification of FG Recurrent Expenditure, 2014 \n(First Half 2014) \n \nProvisional data on functional classification of recurrent expenditure showed \nthat the outlay on administration was N460.13 billion and accounted for 29.2 \n \n4This includes interest payments on overdraft. \n \n \n \n85 \nper cent of the total. When compared with the level in the corresponding \nperiod of 2013, it fell by 26.5 per cent due mainly to the reduction in \nallocations to general administration. Also, spending on social and \ncommunity services declined by 17.2 per cent and explained 15.8 per cent \nof the total. However, “Transfers” rose by 9.4 per cent to N666.52 billion, and \nconstituting 42.2 per cent of the total. In addition, expenditure on the \neconomic sector, at N202.19 billion, increased by 13.4 per cent and \naccounted for 12.8 per cent of total recurrent expenditure. \nCapital expenditure, at N353.15 billion or 0.8 per cent of GDP, was lower than \nthe proportionate budget estimate by 49.1 per cent, reflecting the slow pace \nof capital releases during the period. It also accounted for 16.8 per cent of \nthe total expenditure. As a proportion of Federal Government revenue, \ncapital expenditure, at 19.9 per cent was close to the stipulated minimum \ntarget of 20.0 per cent under the WAMZ secondary convergence criteria. \nFunctional analysis of capital expenditure showed that outlays in the \neconomic sector represented N90.42 billion or 25.6 per cent of the total, \ncompared with 44.3 per cent in the preceding period. Public investment in \nsocial and community services accounted for 12.3 per cent, while \nadministration and transfers were 34.6 and 27.5 per cent of capital outlay, \nrespectively. \nStatutory transfers at N165.34 billion or 0.4 per cent of GDP, was lower than \nthe proportionate budget estimate by 19.1 per cent and accounted for 7.9 \nper cent of the total expenditure. \n4.2.3 State Government Finances \nAggregate statutory allocations (gross) to state governments from the \nFederation Account (SURE-P and NNPC Refunds) and VAT Pool Account \ntotalled N1,361.64 billion in the first half of 2014. This was 6.4 and 15.9 per cent \nbelow the proportionate budget estimate and the level in the corresponding \nperiod of 2013, respectively. A breakdown showed that allocation from the \nFederation Account was N1,101.27 billion (80.9%); NNPC Refunds, N14.97 \n \n \n \n86 \nbillion (1.1%); SURE-P, N49.58 billion (3.6%); and VAT Pool Account, N195.82 \nbillion (14.4%). \nFigure 62 \nComposition of Total Allocations to State Governments \n(First Half 2014) \nFederation Account\n80.9%\nVAT\n14.4%\nSURE-P\n3.6%\nNNPC Refunds\n1.1%\n \nThe sum of N107.50 billion was deducted as state governments’ contractual \nobligations5 from their share of the Federation Account, leaving a net \ndistributable balance of N993.77 billion. Of the net sum, N354.05 billion was \nallocated to the oil-producing states as 13% Derivation Fund and the \nbalance to the 36 states. \nThe allocations to the states from the VAT Pool Account, represented an \nincrease of 7.6 per cent over the level in the first half of 2013, while that of \nNNPC Refunds showed a decrease of 33.3 per cent as refunds were \ncompleted in April 2014. Allocation from SURE-P remained at the same level \nas in the first half of 2013. Consequently, the net statutory allocation to states \n(including 13% Derivation) was 19.2 per cent below the level in the first half of \n2013. Further analysis of the state governments’ allocation showed that Akwa \nIbom, Delta and Rivers received 9.7, 7.4, and 7.2 per cent of the total, \nrespectively. Conversely, Kwara, Ebonyi and Ekiti got the least with \napproximately 1.7 per cent each. \n \n5 Includes contribution to external debt service fund, payments for fertilizer, State Agricultural Project, National \nFadama Project and the National Agricultural Technology Support Programme. \n \n \n \n87 \n4.2.4 Local Government Finances \nAggregate statutory allocation to the 774 local governments from the \nFederation Account (including SURE-P and NNPC Refunds) and VAT Pool \nAccount was N762.92 billion in the first half of 2014, indicating a decline of \n13.3 per cent from the level in half year of 2013. A breakdown revealed that \nallocation from the Federation Account was N576.08 billion (75.5%); NNPC \nRefunds, N11.54 billion (1.5%); SURE-P, N38.23 billion (5.0%) and VAT Pool \nAccount, N137.07 billion (18.0%). A further breakdown on state basis \nindicated that Lagos, Kano and Katsina received 5.7, 5.6 and 4.2 per cent of \nthe total, respectively, while FCT, Gombe and Bayelsa got the least with 1.6, \n1.5 and 1.2 per cent, respectively. \nFigure 63 \nComposition of Statutory Allocations to Local Governments \n(First Half 2014) \nSURE-P\n5.0%\nVAT\n18.0%\nNNPC Refunds\n1.5%\nFederation Account\n75.5%\n \n \n4.2.5 \nPublic Debt \n4.2.5.1 \nConsolidated Federal Government Debt \nThe consolidated debt stock of the Federal Government at end-June 2014 \nwas N8,881.40 billion or 10.5 per cent of GDP6. This represented an increase of \n4.6 per cent over the level at end-December 2013. Of the total debt stock, \ndomestic debt accounted for N7421.40 billion or 83.6 per cent, while external \ndebt amounted to N1,460.30 billion (US$9.38 billion) or 16.4 per cent of the \ntotal. \n \n6 Estimated 2014 GDP. \n \n \n \n88 \nFigure 64 \nComposition of Federal Government Consolidated Debt \n(First Half 2014) \nExternal Debt\n14.0%\nDomestic debt\n86.0%\n \n4.2.5.2 Domestic Debt \nAt N7421.40 billion or 8.8 per cent of estimated GDP, the Federal Government \nsecuritised domestic debt at end-June 2014 was above the level at end- \nDecember 2013 by 4.2 per cent. The increase was due to the issuance of \nadditional FGN Bonds and Nigerian Treasury Bills during the period. \nFurther analysis showed that the banking system remained the dominant \nholder of the Federal Government outstanding domestic debt with N4,694.35 \nbillion or 63.3 per cent, the non-bank public accounted for N2,542.68 billion \nor 34.3 per cent and Sinking Fund accounted for the balance of N184.07 \nbillion or 2.4 per cent. \n4.2.5.3 External Debt \nTotal external debt stock (Federal and States, including the Federal Capital \nTerritory (FCT)) at end-June 2014 was US$9.38 billion or 1.7 per cent of \nestimated GDP. This represented an increase of 6.3 per cent above the level \nat end-December 2013, reflecting additional multilateral loans of US$0.46 \nbillion. A breakdown by holders indicated that 71.8 per cent was owed to the \nmultilateral creditors, while the balance of 28.2 per cent was non-Paris Club \nBilateral and Commercial debt. \n \n \n \n89 \nFigure 65 \nBreakdown of External Debt Stock \n(First Half 2014, US$ Billion) \n3.86\n4.56\n4.95\n5.54\n6.28\n6.73\n0.41\n0.83\n1.09\n1.38\n2.55\n2.65\n0.00\n1.00\n2.00\n3.00\n4.00\n5.00\n6.00\n7.00\n8.00\nEnd-Jun 2010\nEnd-Jun 2011\nEnd-Jun 2012\nEnd-Jun 2013\nEnd-Dec 2013\nEnd-Jun 2014\nMultilateral\nOthers\n \nFurther analysis of the external debt stock showed that US$6.36 billion or 67.9 \nper cent of the total was owed by the Federal Government, while the \nbalance of US$3.02 billion or 32.1 per cent was by states and the FCT. \n4.2.5.4 \nTotal Debt Service Payments \nThe consolidated debt service payment by the Federal Government at end-\nJune 2014 stood at N467.21 billion or 1.1 per cent of GDP, representing an \nincrease of 92.2 per cent above the level at end-December 2013. Principal \nrepayment (amortisation on external debt) accounted for N11.40 billion or \n2.4 per cent, while the balance of N455.80 billion or 97.6 per cent was for \ninterest payments. A further breakdown showed that N28.03 billion (US$178.18 \nmillion) or 6.0 per cent of total debt service was expended on external debt, \nwhile the balance of N439.18 billion or 94.0 per cent went to domestic debt. \n \n \n \n90 \nFigure 66 \nBreakdown of External Debt Service Payments \n(First Half 2014) \n177.60 \n176.47 \n152.16 \n150.08 \n50.15 \n178.18 \n145.18 \n228.61 \n348.90 \n423.22 \n235.20 \n439.18 \n -\n 20.00\n 40.00\n 60.00\n 80.00\n 100.00\n 120.00\n 140.00\n 160.00\n 180.00\n 200.00\n0.00\n50.00\n100.00\n150.00\n200.00\n250.00\n300.00\n350.00\n400.00\n450.00\n500.00\nEnd-June 2010End-June 2011 End-June 2012 End-June 2013 End-Dec 2013End-June 2014\nDomestic Debt (N' Billion)\nExternal ($US Million)\n \n4.3 \nREAL SECTOR DEVELOPMENTS \nProvisional data from the National Bureau of Statistics (NBS) showed that the \ngross domestic product (GDP), at 2010 constant basic prices, rose by 6.4 per \ncent in the first half of 2014, relative to 4.9 per cent in the first half of 2013. The \ndevelopment reflected, largely, the growth in the non-oil sector, which rose \nby 7.4 per cent. Conversely, growth in the oil sector fell by 1.2 per cent, due \nto the decline in crude oil production, arising from recurrent theft and closure \nof oil installations. The agricultural sector recorded a growth rate of 4.6 per \ncent, while industry grew by 5.9 per cent. Similarly, construction, services and \ntrade recorded respective growth rates of 14.0, 7.2 and 5.7 per cent in the \nfirst half of 2014. In terms of relative contribution to GDP, services, industry, \ntrade, agriculture and construction contributed 2.6, 1.3, 1.0, 0.9 and 0.6 per \ncent, respectively. \n \n \n \n \n91 \nFigure 67 \nGDP Growth Rate \n (per cent) \n4.9\n6.0\n6.4\n8.2\n8.6\n7.4\n-13.8\n-12.3\n-1.2\n-20\n-10\n0\n10\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nTotal GDP\nNon-Oil GDP\n \n4.3.1 Agriculture \n4.3.1.1 Agricultural Policies and Institutional Support \nThe Federal Government developed a National Agricultural Resilience \nFramework (NARF) to enhance food security and create social stability, in the \nfirst half of 2014. The Framework formed the basis for the national policy on \nstrategies to reduce Nigeria’s food vulnerability through enhanced \nproductivity and attainment of environmental resilience. The objectives of \nthe Framework include: \n Strengthening the overall policy/ institutional framework for improved \nresilience and adaptation to climate variability and change in the \nagricultural sector; \n \n Evaluating and introducing climate risk management and transfer \nstrategies \nin \nthe \nagricultural \nsector \nplanning \nand \nproject \nimplementation; as well as widespread deployment of same through \ncommunication technologies; \n Improving productivity through training of community and grass root \nfarmers on land and water management strategies, modern farming \npractices and using policy instruments such as economic incentives, \nregulations and communication; \n \n \n \n \n92 \n Reinforcing social safety nets through support systems that reduce \nvulnerability and improve livelihood conditions for the vulnerable, \nespecially women and children; \n \n Improving research capacity in farming systems within the National \nAgricultural Research System (NARS) to enable climate friendly \nagriculture in Nigeria; and \n \n Revamping extension services, including building new capacity for \nevidence-based assessment and management of climate risk. \nAs part of effort to encourage domestic production and investment in rice \nvalue chain through backward integration, government approved the 2014 – \n2017 fiscal policy measure on rice with effect from May 26, 2014. The Policy \nwas designed to reduce the levy on husked brown, semi-milled and wholly-\nmilled rice from 100.0 per cent to 20.0 per cent plus a 10.0 per cent duty rate \nfor investors. Also, a reduction in levy from 100.0 per cent to 60.0 per cent plus \na 10.0 per cent duty rate was approved for traders of the commodity. The \nsustained support of the government for private sector participation in the \nrice sub-sector continued to manifest with the completion of the US$900.0 \nmillion integrated rice project by Olam Farms Nigeria Limited. The project has \na processing capacity of 210,000 tonnes of rice per annum and a farm size of \n10,000 hectares. \nUnder the Growth Enhancement Scheme (GES) component of the \nAgricultural Transformation Agenda (ATA), the number of registered farmers \nexceeded the 10 million mark in the review period. The registration of \nartisanal fishermen and fishing canoes commenced during the period. The \nfisheries sub-sector received a boost with the establishment of fingerlings \nproduction centres in the 36 states of the Federation under the Fish Seed \nDevelopment Programme. Furthermore, a deep sea fishing vessel was \nacquired by the Federal Government for the exploitation of lantern and drift \nfish used for compounding fish meal. \n \n \n \n93 \nIn the crop sub-sector, 966.5 tonnes of certified seeds were produced and \ndistributed to farmers under the West Africa Agricultural Productivity \nProgramme (WAAPP – Nigeria), in collaboration with research institutes during \nthe period. Six staple crop processing zones (SPZ) were established in Kogi, \nNiger, Kano, Enugu/ Anambra, Lagos and Rivers states, to process fresh \ncassava tubers into starch, sweeteners and sorbitol. \nTo bridge the financing gap for agribusinesses, government established the \nFund for Agricultural Financing (FAFIN) in collaboration with the German \nDevelopment Bank (KFW). The Fund is a private and quasi equity debt fund, \nwhich would deploy US$100.0 million in long-term finance to agribusinesses \nand provide equity financing, ranging from US$2.0 million to US$5.0 million to \nqualified agribusinesses. The World Bank approved a US$495.3 million credit \nfor improving farmers’ access to irrigation and drainage services, \nstrengthening institutional arrangements for integrated water resources \nmanagement and improving the delivery of agricultural services in selected \nlarge scale public schemes in Northern Nigeria. \n4.3.1.2 Agricultural Production and Prices \nAgricultural output recorded modest growth in the first half of 2014. At 271.1 \n(2010=100), the estimated index of agricultural production increased by 5.5 \nper cent, compared with the 2.5 per cent growth recorded in the same \nperiod of 2013. The growth in agricultural output, during the review period \nwas attributed mainly to favourable weather condition and sustained \nimplementation of various policy measures. \nAll the sub-sectors of agriculture contributed to its growth in the review \nperiod. The output of crops rose by 5.4 per cent, compared with 1.9 per cent \nrecorded in the first half of 2013, with staples rising by 5.5 per cent, compared \nwith 1.9 per cent in the same period. The output of other crops also \nincreased by 4.3 per cent, compared with 8.4 per cent in the corresponding \nperiod of 2013. The output of livestock, forestry and fishery grew by 5.6, 6.5, \n \n \n \n94 \nand 8.4 per cent, compared with 6.7, 5.9 and 9.6 per cent, respectively, in \nthe first half of 2013. \nA survey by the CBN indicated that the domestic retail price of selected \nagricultural commodities trended upward over the level in the first half of \n2013. The price increase ranged from 0.6 per cent for white maize to 30.4 per \ncent for cocoa. The price increase, particularly for food commodities, was \nattributed largely to distribution constraints arising from the incessant security \nchallenges in some parts of the country. However, cocoa price rose due to \nfavourable developments in the world commodity market. \nThe dollar-based all-commodities price index of Nigeria’s major agricultural \nexport commodities at the London market increased during the first half of \n2014. At 408.9 (1990=100), it rose by 30.7 per cent in contrast to a decrease of \n5.5 per cent in the corresponding period of 2013. Five of the six commodities \nmonitored namely; cotton, palm oil, coffee, cocoa and copra, recorded \nprice increase of 2.2, 4.4, 29.6, 33.7 and 63.4 per cent, respectively. The \nincrease in commodity prices was attributed largely to speculative activities \nby traders and unfavourable weather conditions, which affected the supply \nof the commodities. However, soya bean recorded a price decrease of 3.2 \nper cent, compared with an increase of 8.3 per cent in the corresponding \nperiod of 2013. This was due to increased supply arising from favourable \nweather conditions in key producing countries. \n4.3.2 Industry \n4.3.2.1 Industrial Policy and Institutional Support \nThe Federal Government’s effort to ensure steady power supply in the \ncountry received further boost during the period under review. A \nMemorandum of Understanding (MoU) was signed with the Democratic \nRepublic of Congo for the importation of electricity from the Inga Dam \nPower Plants, for both local consumption and export to other countries. The \nPlants would provide 40,000mw on full exploitation. Also, the World Bank \nGroup confirmed its support for the power sector reforms by providing Nigeria \n \n \n \n95 \nwith loans and guarantees worth US$1.2 billion to fund electricity projects. The \nprojects being supported are a 459MW power station (Azura Edo Power \nPlant) in Edo State and a 533-MW facility in Akwa Ibom State (Qua Iboe \nPower Plant). \nTo boost skilled manpower in the power sector, the National Power Training \nInstitute of Nigeria (NAPTIN) signed an MoU with Schneider Electric, for the \ntraining of Nigerian electrical engineers. Schneider would train instructors \nwho would in-turn train technicians involved in professional electrical wirings. \nThe Institute is also partnering with the University of Lagos, Lagos; Bayero \nUniversity, Kano; Federal University of Technology, Minna and the University of \nScience and Technology, Owerri for post-graduate training of engineers in \nthe sector. \nFurthermore, the Federal Government set aside US$300.0 million within the \nperiod as a partial risk guarantee to protect investors in the power sector. The \npartial risk guarantee is a risk-sharing mechanism that provides banks with a \npartial coverage of risk exposure against loans made for energy efficient \nprojects. The fund was domiciled with the CBN. \nGovernment also approved the preferred bidders for seven of the ten power \nplants owned by the Niger Delta Power Holding Company (NDPHC), under \nthe National Integrated Power Plants (NIPP). The NIPP assets sale entailed a \ndivestment of 80.0 per cent equity and was expected to generate about \nUS$6.0 billion for the government. EMA Consortium was confirmed as the \npreferred bidder for the Benin and Calabar generation companies with a bid \nof US$580.0 million and US$625.0 million, respectively. Dozzy Integrated Power \nLimited was confirmed the preferred bidder for Egbema generation \ncompany with a bid of US$415.7 million. \nSeoul Electric Power Limited, was confirmed the preferred bidder for Geregu \ngeneration company with a bid of US$690.2 million, while Ogorode and \nOlorunsogo generation companies had Daniel Power Consortium and ENL \nConsortium Limited as their preferred bidder with a bid of US$532.8 million \nand US$751.2 million, respectively. Omotosho Electric Power also emerged as \n \n \n \n96 \nthe preferred bidder for Omotosho Generation Company with a bid of \nUS$659.9 million. The sale of Alaoji, Omoku and Gbarain generation \ncompanies were stepped down, pending the resolution of outstanding \nlitigation. \nThe auto industry also received a boost in the period under review, following \nthe various incentives in the National Automotive Industry Development Plan \n(NAIDP). Sixteen (16) companies were at various stages of establishing \nassembly plants in the country. In addition, Peugeot Automobile Nigeria \nLimited, Leyland, Fiat, Volkswagen and Mercedes, which businesses waned \nas a result of unfavourable operational environment, had commenced \nrehabilitation work to resume business operations in the country. Also, the \nStallion Group, a West African conglomerate, successfully rolled out its first \nNissan-branded vehicle from its Lagos assembly plant in the period. The feat \nfollowed the signing of an MoU on local assembly between the Renault-\nNissan Alliance and the Stallion Group in 2013. \nTo sustain these positive developments and put the nation on a sustainable \neconomic path, the Federal Government approved new tariff regime of zero \nper cent on completely knocked down units to support local assemblies. \nAlso, the duty and levy on imported new and used cars were raised from 20.0 \nto 70.0 per cent, to be implemented in phases. The first phase of the policy \ninvolving 35.0 per cent duty increase, came into effect in the period under \nreview, while the second phase of 35.0 per cent increase in levy would \ncommence in January 2015. \n4.3.2.2 Industrial Production \nProvisional data showed improved activities in the industrial sector in the first \nhalf of 2014. At 140.1 (1990=100), estimated index of industrial production \nincreased by 1.9 per cent over the level in the corresponding period of 2013. \nThis was attributed to increased activities in the manufacturing and electricity \nsub-sectors. \n \n \n \n97 \nFigure 68 \nIndustrial Production Index \n(First Half 2014, 1990=100) \n106.1\n108.5\n114.2\n146.3\n146.4\n145.6\n206.3\n206.4\n208.2\n136.3\n137.5\n140.1\n0\n50\n100\n150\n200\n250\n1st Half 2012\n1st Half 2013\n1st Half 2014\nManufacturing\nMining\nElectricity\nIndustry\n \n4.3.2.3 Manufacturing \nAt 114.2 (1990=100), estimated data indicated a 5.3 per cent increase in the \nindex of manufacturing above the level in the corresponding period of 2013. \nSimilarly, capacity utilisation rose by 1.7 percentage points to 59.3 per cent. \nThe improvement in the manufacturing sub-sector was attributed to \nincreased \nactivities \nin \nchemical \nand \npharmaceuticals, \nnon-metallic \nproducts, textile and apparel, occasioned by macroeconomic stability. \nFigure 69 \nAverage Manufacturing Capacity Utilisation \n(First Half 2014, Per cent) \n57.4\n57.6\n59.3\n56.0\n56.5\n57.0\n57.5\n58.0\n58.5\n59.0\n59.5\n1st Half 2012\n1st Half 2013\n1st Half 2014\n \n \n \n \n98 \n4.3.3 Crude Oil \n4.3.3.1 Crude Oil Production and Demand \nTotal crude oil production, including natural gas liquids (NGLs) and \ncondensates by the Organization of Petroleum Exporting Countries (OPEC) \nwas projected at an average of 35.9 million barrels per day (mbd) in the first \nhalf of 2014. This represented a decrease of 0.1 and 1.3 per cent from the \nlevels in the preceding and corresponding periods of 2013, respectively. The \nfall in output was largely accounted for by production decline from Nigeria, \nIraq and Libya. Non-OPEC supply was estimated at an average of 56.45 \nmbd, indicating an increase of 6.6 per cent above the level in the \ncorresponding half of 2013. Total world supply was estimated at an average \nof 92.35 mbd, reflecting a 3.4 per cent increase over the level in the first half \nof 2013. \nWorld crude oil demand was estimated at at an average of 90.93 mbd in the \nfirst half of 2014, compared with 89.72 mbd in the corresponding half of 2013, \nshowing an increase of 1.4 per cent. The breakdown showed that daily \naverage demand from the Organization for Economic Co-operation and \nDevelopment (OECD) countries was estimated at 45.6 mbd, while that of \nnon-OECD was 45.3 mbd. High demand, especially, from OECD Americas, \nChina and the Middle East accounted for more than half of the growth in \ntotal demand. \nNigeria’s average daily crude oil production stood at 1.91 mbd or 345.71 \nmillion barrels (mb), representing a drop of 4.0 per cent below the level of \n1.99 mbd or 360.19 mb attained in the first half of 2013. The drop in output \nwas attributed to the incessant theft and closure of oil installations in the \nNiger Delta region. Aggregate export of crude oil for the period under review \nwas estimated at 278.7 mb or 1.46 mbd, compared with 264.3 mb or 1.54 \nmbd in the corresponding half of 2013. \n \n \n \n99 \nFigure 70 \nCrude Oil Production and Exports \n0\n0.5\n1\n1.5\n2\n2.5\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nMillion barrels per day\nOutput\nExports\nDomestic Consumption\n \n \n4.3.3.2 Crude Oil Prices \nThe average spot price of Nigeria’s reference crude, the Bonny Light (37o API) \nincreased by 0.9 per cent above its level in the first half of 2013 to US$111.29 \nper barrel. The average prices of the UK Brent, Forcados and West Texas \nIntermediate also rose, by 0.8, 0.5 and 5.3 per cent, to US$109.38, US$112.26 \nand US$97.40 per barrel, respectively, in the review period. Increased world \ndemand for crude and the escalating violence in Libya and Ukraine, which \nexacerbated supply concerns, largely accounted for the rise in crude oil \nprices. The average price of the OPEC basket of twelve crude streams was \nUS$105.30 per barrel, compared with US$105.09 per barrel in the same period \nof 2013. \nFigure 71 \nAverage Spot Prices of Selected Crudes \n108.5\n110.63\n109.38\n92.52\n100.17\n97.4\n110.29\n111.91\n111.29\n111.68\n113.4\n112.26\n105.09\n106.56\n105.3\n0\n20\n40\n60\n80\n100\n120\n1st half 2013\n2nd half 2013\n1st half 2014\nUS Dollar per barrel\nU.K. BRENT\nWEST TEXAS INTERMEDIATE\nBONNY LIGHT\nFORCADOS\nOPEC BASKET\n \nSource: Reuters \n \n \n \n \n100 \n4.3.4 Gas \nThe Nigerian Content Development and Monitoring Board (NCDMB) \nrecorded a landmark achievement during the review period. An indigenous \noil servicing company, PEM Offshore Limited, began the test run of the first \nphase of the West Africa’s 1st Offshore Simulation and Innovation Centre. On \ncompletion, the Centre would have a full suite of Offshore Anchor Handling \nSimulation Equipment, Dynamic Positioning, Power Management and Crane \nSimulation Systems. Also, the Centre would support the training of local and \nforeign offshore personnel involved in oil and gas operation. \nTotal associated gas production was estimated at 1,286,592.81 million \nstandard cubic feet (mmscf) in the first half of 2014, indicating an increase of \n25.7 per cent above the level in the corresponding period of 2013. Total \nvolume of gas utilized and flared during the period was estimated at \n1,046,099.91 mmscf and 240,492.90 mmscf, indicating an increase of 30.1 and \n9.5 per cent above the respective levels in the first half of 2013. \n \nFigure 72 \nGas Production and Utilisation \n1,023,568.16\n1,212,944.4\n1,286,592.8\n803,980.50\n980,282.09\n1,046,099.91\n219,587.66\n232,662.53\n240,492.90\n -\n 200,000.00\n 400,000.00\n 600,000.00\n 800,000.00\n 1,000,000.00\n 1,200,000.00\n 1,400,000.00\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nMillion Standard Cubic Feet (mmscf)\nGas Produced\nGas Utilised\nGas Flared\n \n4.3.5 Petroleum Products \nThe estimated quantity of petroleum products distributed by the major and \nindependent marketing companies in the review period was 3,169.9 million \nlitres. These included: 2,359.8 million litres (74.4%) of Premium Motor Spirit \n(PMS); 293.5 million litres (9.3%) of Dual Purpose Kerosene (DPK); 325.5 million \n \n \n \n101 \nlitres (10.3%) of Automotive Gas Oil (AGO); and 184.1 million litres (5.8%) of \nLow Pour Fuel Oil (LPFO), while others was 7.0 million litres. \n \nFigure 73 \nDistribution of Petroleum Products \n (First Half 2014) \nPMS\n74.4%\nDPK\n9.3%\nAGO\n10.3%\nLPFO\n5.8%\nOthers\n0.2%\n \n4.3.6 Solid Minerals \nThe Solid Mineral Sector received a boost during the period under review, \nfollowing the commissioning of the National Geosciences Research \nLaboratories located in Zaria and Ministry of Solid Minerals, for public and \ncommercial operations. This was achieved through the collaborative efforts \nof Nigeria Geological Survey Agency (NGSA), Cargo Defense Fund (CDF) \nand NEXIM Bank. The laboratories would provide operators in the sector with \nworld class mineral services in solid minerals analysis and estimation. This \nwould reduce cost for miners and give credence to minerals mined in \nNigeria. \nSolid minerals production in the first half of 2014 from provisional data of the \nMinistry of Mines and Steel Development increased by 6.9 per cent from the \nlevel in the corresponding period of 2013 to 25.27 million tonnes. Increase in \nthe production of some principal minerals such as clay, coal, lead/zinc and \nlaterite accounted for this development. \n \n \n \n \n102 \n4.3.7 Electricity Generation \nEstimated average electricity generation in the first half of 2014 rose by 1.8 \nper cent, compared with 3,488 MW/h in first half of 2013. The marginal \nincrease was attributed to improved generation from hydro power plants. \n4.3.8 Electricity Consumption \nAt 3,133.77 MW/h, average estimated electricity consumed increased by 2.7 \nper cent, relative to the level in the same period of 2013. The improvement in \nelectricity consumption was due to the increase in electricity delivered to the \ndistribution companies. \n4.3.9 Industrial Financing \n4.3.9.1 NEXIM \nThe total disbursement the Nigeria Export Import Bank (NEXIM) to various \nbeneficiaries in the period under review was N5.49 billion. This amount was \n41.1 per cent higher than the level of disbursement in the corresponding \nperiod of 2013. Of the total disbursement, Manufacturing and Agriculture \nsub-sectors received 57.2 per cent and 28.0 per cent, respectively, while \nServices and Solid Minerals sub-sectors received 12.2 per cent and 2.6 per \ncent, respectively. \n \nFigure 74 \nSectoral Disbursement of NEXIM Loans, First Half 2013 \n \nAgric and Agro \nAllied\n18.4%\nManufacturing\n22.8%\nSolid Minerals\n3.9%\nServices\n54.9%\n \n \n \nSource: NEXIM Bank \n \n \n \n103 \n4.3.10 Telecommunications \nTelecommunications recorded considerable growth in the first half of 2014 \nowing to robust activities within the sub-sector. Available data from the \nNigerian Communications Commission (NCC) indicated that the total \nnumber of active telephone lines rose from 120.4 million at end-June 2013 to \n130.8 million at end-June 2014, indicating an increase of 8.6 per cent. \nAccordingly, teledensity increased to 93.4 per 100 inhabitants at end-June \n2014 from 86.0 per 100 inhabitants at end-June 2013, exceeding the \nInternational Telecommunication Union (ITU) minimum standard of 1:100. The \ngrowth in the sector was driven mainly by an 8.8 per cent increase in the \nnumber of active lines in the mobile telephony sub-sector, which grew from \n120.0 million at end-June 2013 to 130.6 million at end-June 2014. The \ndevelopment was as a result of relatively cheaper call tariffs, arising from \nincreased competition and product innovation. \n \nFigure 75 \nTotal Active Lines and Teledensity \n85.97\n91.15\n93.41\n119.98\n127.25\n130.78\n0.38\n0.36\n0.18\n0.00\n0.05\n0.10\n0.15\n0.20\n0.25\n0.30\n0.35\n0.40\n0.00\n20.00\n40.00\n60.00\n80.00\n100.00\n120.00\n140.00\n1st Half 2013\n2nd Half 2013\nJun-14\nNo. of Active Mobile Lines (Millions) \nand \nTeledensity per 100 Inhabitants\nTeledensity\nMobile\nFixed\n4.3.11 Consumer Prices \nThe general price level maintained a moderate upward trend in the first half \nof 2014. The all-items composite Consumer Price Index (CPI) stood at 158.6 \n(November 2009=100), at end-June 2014, compared with 146.6 and 152.3 at \nend-June and end-December 2013, respectively. Food CPI was 161.9 in the \nperiod under review, compared with 147.5 and 154.3 at end-June and end-\n \n \n \n104 \nDecember 2013, respectively. The all-items less farm produce CPI, which \nstood at 145.5 and 153.0 at end-June and end-December 2013, respectively, \nincreased to 157.4 at end-June 2014. \n \nFigure 76 \nConsumer Price Indices \n(November 2009 = 100) \n135\n140\n145\n150\n155\n160\n165\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nCPI\nComposite\nCore\nFood\n \n \n4.3.11.1 Headline Inflation \nThe year-on-year headline inflation fluctuated in the first half of 2014 and \nstood at 8.2 per cent at end-June 2014, representing a decrease of 0.2 and \nan increase of 0.2 percentage point, compared with the levels at end-June \nand end-December 2013, respectively. The 12-month moving average \ninflation rate declined to 8.0 per cent at end-June 2014, from 10.4 and 8.5 \nper cent at end-June and end-December 2013, respectively. The decline in \nheadline inflation was attributed mainly to the fall in the prices of some items \nin the consumption basket, especially non-farm produce. \n4.3.11.2 Core Inflation \nCore inflation (all-items less farm produce), on a year-on-year basis, \nincreased gradually to 8.1 per cent at end-June 2014, compared with 5.5 per \ncent at end-June 2013 and 7.9 per cent at end-December 2013. The 12-\nmonth moving average, core inflation stood at 7.4 per cent, relative to 10.7 \nand 7.7 per cent, at end-June and end-December 2013, respectively. Core \ninflation accelerated at a faster rate towards the end of the first half of 2014. \nThe increase was attributed largely by rise in prices across various groups of \nitems, especially electricity/gas and other fuels, processed food, housing, \n \n \n \n105 \nclothing and footwear, household equipment and maintenance, furniture \nrepairs, transport, and education. \n4.3.11.3 Food Inflation \nThe year-on-year food inflation fluctuated in the first half of 2014. It stood at \n9.8 per cent at end-June 2014, compared with 9.6 and 9.3 per cent at end-\nJune and end-December 2013, respectively. The 12-month moving average \nfood inflation was 9.5 per cent at end-June 2014, compared with10.4 per \ncent at end-June 2013 and 9.7 per cent at end-December 2013. The \nincrease in food inflation was as a result of the rise in the prices of \ncommodities owing to distribution constraints arising from the unresolved \nsecurity challenges in some parts of the country, especially the North-East. \n \nFigure 77 \nInflation Rate \n(Year-on-Year, Per cent) \n \n0\n2\n4\n6\n8\n10\n12\n14\n16\n1st Half 2012\n2nd Half 2012\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nHeadline\nFood\nCore\n \n4.3.11.4 Urban and Rural Consumer Price Indices and Inflation Rates \nThe all-items Urban CPI, which stood at 145.5 at end-June and 151.4 at end-\nDecember 2013, increased to 157.6 at end-June 2014. The increase was \nattributed mainly to the increase in the contributions of food and non-\nalcoholic beverages, tobacco and narcotics; clothing and footwear; \nfurnishing and household equipment maintenance; health; communication; \neducation, restaurants and hotels; and miscellaneous goods and services. \nConsequently, the year-on-year urban inflation rate stood at 8.4 per cent at \n \n \n \n106 \nend-June 2014, compared with 8.4 per cent at end-June and 8.1 per cent at \nend-December 2013. \nAll-items Rural and Urban CPI exhibited similar trend during the review period. \nIt increased from 147.9 and 153.3 at end-June and end-December 2013 to \n159.7 per cent at the end of June 2014. The increase was largely accounted \nfor, largely, by the contributions of transport; communication; recreation and \nculture; restaurants and hotels; education; and miscellaneous goods and \nservices. As a result, the year-on-year rural inflation rate stood at 8.0 per cent \nat end-June 2014, compared with 8.3 per cent at end-June and 7.9 per cent \nat end-December 2013. \nUrban core inflation increased to 8.0 per cent at end-June 2014, compared \nwith 5.4 and 7.6 per cent at end-June and end-December 2013, respectively. \nSimilarly, Urban food inflation rose to 10.4 per cent, compared with 9.5 at \nend-June 2013 and 9.8 per cent at end-December 2013. \nRural core inflation rate stood at 8.2 per cent at end-June 2014, compared \nwith 5.6 and 8.1 per cent at end-June and end-December 2013, respectively. \nRural food inflation rate stood at 9.4 per cent at end-June 2014, compared \nwith 9.8 and 8.9 per cent at end-June and end-December 2013, respectively. \nThe rural food inflation rate at end-June 2014 represented a decrease of 0.4 \npercentage point below the level at end-June 2013, but was an increase of \n0.5 percentage point above the level at end-December 2013. \nFigure 78 \nUrban and Rural Consumer Price Indices \n(First Half, November 2009 = 100) \n \n \n \n \n \n \n \n \n \n134.1\n140.0\n145.5\n151.4\n157.6\n136.5\n142.1\n147.9\n153.3\n159.7\n120\n125\n130\n135\n140\n145\n150\n155\n160\n165\n1st Half 2012\n2nd Half 2012\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nUrban Consumer Price Index\nRural Consumer Price Index\n \n \n \n107 \n4.3.12 Health \nThe National Health Bill 2014 was passed by the Nigerian Senate during the \nreview period. The Bill sought to establish a framework for the regulation, \nmanagement and development of the nation's health system. The Bill \nprovides for government contribution of 1 per cent from the Consolidated \nRevenue Fund for the development of Primary Health Care (PHC) in the \ncountry. \nTo further boost the health sector, the governments of Nigeria and Japan \nsigned an MoU during the period under review for a loan facility of US$85.0 \nmillion to eradicate polio in Nigeria. The Government also launched new \nnational guidelines for the implementation of interventions to eliminate \nmalaria and lymphatic filariasis (elephantiasis) in the country. \n \n4.3.13 Housing and Urban Development \nDuring the period under review, the Nigerian Mortgage Refinance Company \n(NMRC) opened business to provide secondary mortgage market services for \nprimary mortgage lenders for on-lending to teeming Nigerian hosuing loan \napplicants. The NMRC, a Public Private Partnership agreement between the \nFederal Government of Nigeria and the private sector was established to \ncreate access to affordable funds by mortgage finance companies. The \nNMRC is expected to reduce Nigeria’s current housing deficit by raising \nmortgages from an annual average of 20,000 mortgages to at least 200,000 \nin the next three years. \nThe World Banka pproved a concessional US$300.0 million 40 years \nInternational Development Association (IDA) loan at 0.75%, to facilitate the \nexecution of the Housing Finance Programme. US$250.0 million of the IDA \nloan will be disbursed in installments to NMRC as Tier 2 Capital, based on key \nperformance indicators. The amount will be retained on NMRC’s balance \nsheet to provide credit support for NMRC’s bond issuances. The balance of \nUS$50.0 million will be allocated to other components of the Housing Finance \nProgramme as follows: US$25 million for the establishment of a Mortgage \n \n \n \n108 \nGuarantee Facility for lower income borrowers and US$25 million to support \nthe development and piloting of Housing Microfinance Products. \n4.3.14 Aviation Services \n4.3.14.1 Policy and Airport Development \nThe upgrading of twenty-two (22) Federal airports across the country \ncontinued through the first half of 2014. \nIn a bid to ensure accurate data, security and easy facilitation of passengers \nat the Nigerian international airports, the Federal Government, through the \nNigerian Immigration Service (NIS), introduced machine-readable cards at \nthe country’s five international airports in Lagos, Kano, Enugu, Abuja and \nPort-Harcourt in the first half of 2014. The machine would seamlessly enhance \nthe facilitation of passengers and security checks at airports, thereby \nensuring faster airport processes while creating a database for movement of \npersons across borders. \nThe Nigerian Airspace Management Agency (NAMA) completed the \ninstallation of solar powered airfield lighting systems at the Lagos and Port \nHarcourt international airports in the first half of 2014. The installed lighting \nsystem was expected to increase the progression of night/low visibility \noperations and reduce operational cost to the airlines. Other expected \nbenefits include low maintenance and running cost due to the elimination of \npower generation and cabling. \n4.3.14.2 Domestic Operations \nA total of 5,673,899 passengers were airlifted by domestic airlines in the first \nhalf of 2014. This represented a 27.5 per cent growth over the 4,449,026 \npassengers airlifted in the corresponding period of 2013. Total aircraft \nmovement for the first half of 2014 was 135,087, a 54.0 per cent growth over \nthe movement of 87,713 recorded in the corresponding period of 2013. \n \n \n \n109 \n4.3.14.3 International Operations \nThe number of passengers airlifted by airlines on international routes in the first \nhalf of 2014 rose by 4.8 per cent to 2,165,985, compared with 2,067,352 million \nin the first half of 2013. Aircraft movement also rose by 4.4 per cent to 23,007 \nin the review period, compared with 22,042 in the corresponding period of \nthe preceding year. \nCargo movement at designated airports rose by 1.0 per cent to 88.54 million \nkg over 87.65 million kg recorded in the first half of 2013. Mail movement also \nrose by 52.8 per cent to 3.04 million kg in the first half of 2014, compared with \n1.99 million kg recorded in the corresponding period of 2013. \n4.3.15 Maritime Services \nEfforts to raise security level of ships and port facilities in Nigeria continued \nduring the first half of 2014 as thirteen (13) more port facilities were fully \ncompliant with the International Ships and Ports Facility Security (ISPS) Code. \nThis brought the number of compliant port facilities in the country to twenty-\ntwo (22). \nThe level of operations at Nigerian ports witnessed positive change in the first \nhalf of 2014. Cargo throughput stood at 41,317,962 tonnes in the first half of \n2014, compared with 35,812,858 tonnes recorded in the corresponding \nperiod of 2013, representing a 15.4 per cent \nincrease. \nA total of 2,719 ocean going vessels with a \ntotal gross registered tonnage (GRT) of \n70,659,820 \nberthed \nat \nNigerian \nports, \ncompared with 2,427 vessels with GRT of \n60,096,179 recorded in the corresponding period of 2013. This represented a \n12.0 and 17.6 per cent growth in the number of vessels and GRT, respectively. \nThe \nachievements \nin \nthe \nsector \nwere \nattributed, \nlargely, \nto \nthe \nimplementation of e-payment in January 2014 which, tremendously reduced \nthe turn-around time of vessels from 5.3 days to 4.6 days, following faster \nThe maritime services witnessed enhanced \nefficiency and reduced cost of doing business \nat the nation’s sea ports due to the \nimplementation of e-payment. \n \n \n \n110 \npayment means for business dealings and prompt confirmation of payments. \nA significant increase in LNG shipment resulting from the European economic \nrecovery effort after the debt crisis also contributed significantly to the \nincrease in cargo traffic. \n4.3.16 Railway Services \nConcerted efforts at resuscitating and revitalizing the Nigerian railway \ncontinued in the review period. The Nigerian Railway Corporation (NRC) \ninaugurated and released two Diesel Multiple Units (DMUs) train sets with \npassenger-carrying capacity of about 540 on Lagos mass transit routes. There \nwas also the delivery of 68-seater first class air-conditioned passenger \ncoaches for Lagos and Kano express routes. A total of 2,020,943 passengers \nand 69,032 tonnes of freight were moved by the NRC. \n4.4. EXTERNAL SECTOR DEVELOPMENTS \nProvisional data showed that the external sector was under pressure \nreflecting the depletion of the external reserves and huge short term capital \nreversal in the first half of 2014. Despite the development, the current \naccount sustained a surplus equivalent to 2.3 per cent of gross domestic \nproduct (GDP) occasioned by robust trade balance and increased home \nremittances. The capital and financial account also registered a net liability \nposition, representing 0.6 per cent of GDP in the first half of 2014, compared \nwith 0.5 per cent of GDP in the first half of 2013. The external reserves, at \nUS$37.33 billion, declined by 12.9 per cent from the level at end-December \n2013 and could support 8.0 months import cover (goods only) or 5.6 months \nof imports of goods and services. The external debt, however, increased to \nUS$9.17 billion from US$6.92 billion and US$8.82 billion in the first and second \nhalves of 2013, respectively. \n4.4.1 Current Account \n4.4.1.1 Trade \nThe estimated value of external trade at N11,540.53 billion constituted 27.3 \nper cent of GDP. The oil component of total trade accounted for 68.2 per \ncent and constituted 18.6 per cent of GDP, while the non-oil at 8.8 per cent \n \n \n \n111 \nof GDP accounted for the balance. Despite the sustained increase in the \ninternational crude oil price, the value of crude oil exports declined by 8.7 \nper cent owing to the fall in domestic crude oil production from an average \nof 1.99 million barrels per day in the first half of 2013 to 1.91 million barrels per \nday in the review period. However, gas export, at 2.0 per cent of GDP, \nincreased by 17.4 per cent to N841.41 billion over the level in the first half of \n2013. The dismal performance of the non-oil export sector, at 0.8 per cent of \nGDP in the reporting period, reflected the lingering structural rigidities in the \neconomy. \n \nFigure 79 \nExports, Imports and Trade Balance \n(N’ Billion) \n7,671.96 \n7,171.97 \n7,144.40 \n4,006.54 \n4,007.19 \n4,396.13 \n -\n 2,000.00\n 4,000.00\n 6,000.00\n 8,000.00\n 10,000.00\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nN billion\nExports\nImports\nTrade Balance\n \nA disaggregation of non-oil exports by product, revealed that agricultural \nproduce accounted for 46.0 per cent of the total, while semi-manufactured \ngoods, manufactured goods, “others” and minerals accounted for 36.1, 15.1, \n2.3 and 0.5 per cent, respectively. \n \n \n \n \n112 \nFigure 80 \nNon-Oil Exports by Products \n(First Half 2014) \n \nFurther analysis showed that aggregate imports, which represented 10.4 per \ncent of GDP increased by 9.7 per cent, compared with the level in the \ncorresponding period in 2013. The development resulted from increased \ndomestic demand for raw materials and finished goods as non-oil imports \nrose by 28.7 per cent above the level in the first half of 2013. Its share in total \nimports rose to 76.3 per cent, while oil sector imports fell to 23.7 per cent due \nto the positive effects of the on-going reforms in the petroleum sub-sector. \nSectoral breakdown of non-oil imports showed that, finished goods (food \nand manufactured products) accounted for 47.4 per cent; industrial sector, \n40.7 per cent; transport sector, 8.2 per cent; and other sectors 3.7 per cent of \nthe total. \n \n \n \n \n113 \nFigure 81 \nNon-Oil Imports by Sector \n(First Half 2014) \n \n \n \n4.4.1.2 Services \nTransactions in the services account resulted in a net deficit position of \nN1,846.78 billion, equivalent to 4.4 per cent of GDP. The deficit widened by \n20.7 per cent over the level in the corresponding period due, largely, to \nhigher net out-payments in respect of transportation (N581.05 billion), travels \n(N543.52 billion) and other business services (N331.93 billion). Transportation \nservices were the highest with 31.5 per cent share of the total. The share of \ntravels accounted for 29.4 per cent of the total, other business services, 18.0 \nper cent; government services, 4.1 per cent; and other services accounted \nfor the balance. \n \nFigure 82 \nShare of Services Out-Payments \n(First Half 2014) \nTransport\n31.5%\nTravel\n29.4%\nOther Bussiness \n18.0%\nGovernment\n4.1%\nOthers\n17.0%\n \n \n \n \n114 \n4.4.1.3 \nIncome \nThe income account posted a lower deficit of N1,682.54 billion or 4.0 per cent \nof GDP, compared with the level recorded in the corresponding period in \n2013 as a result of enhanced investment income abroad, and lower \nrepatriation of profit and dividends. Projected out-payments with respect to \ndividends and distributed branch profits by foreign investors declined by 16.3 \nper cent, while inflow of investment income grew by 44.8 per cent over the \nlevel in the first half of 2013. \n4.4.1.4 \nCurrent Transfers \nThe estimated current transfers (net) recorded a surplus equivalent to 4.1 per \ncent of GDP, compared with 4.3 per cent of GDP in the corresponding \nperiod of 2013. The development was driven mainly by inflow of personal \nhome \nremittances \nby \nnon-resident \nNigerians. \nWorkers’ \nremittances \naccounted for 92.5 per cent of total inward transfers; while general \ngovernment transfers (net), comprising payments to foreign embassies and \ninternational organizations increased by 8.5 per cent to N138.50 billion from \nN127.61 billion. \nFigure 83 \nPrivate Home Remittances \n (US$ billion) \n10.0\n10.7\n10.3\n9.5\n10.0\n10.5\n11.0\nFirst Half 2013\nSecond Half 2013\nFirst Half 2014\n \n4.4.2 Capital and Financial Account \nThe capital and financial account registered a net liability of N249.74 billion in \nthe first half of 2014, as against N183.55 billion recorded in the corresponding \nperiod of 2013. This was attributed largely to inflow of other investment \nliabilities in form of loans drawn by the general government, which increased \nby 30.5 per cent from N77.88 billion in the first half of 2013 to N101.61 billion in \n \n \n \n115 \nthe review period \nThe aggregate foreign financial assets, however, declined by 19.7 per cent \nto N1,602.86 billion in the review period due to the sharp drop in direct \ninvestment (abroad) by 84.3 per cent. The outcome was influenced largely \nby the 86.8 per cent decline in equity capital from N77.28 billion in the first \nhalf of 2013 to N10.23 billion in the review period. However, trade credits, \nwhich represented 2.5 per cent of GDP increased by 28.7 per cent, relative \nto the level at end-June 2013. \nProvisional data on foreign financial liabilities showed a decline of 15.0 per \ncent to N1,852.60 billion due largely to huge short-term capital reversal from \nN1,626.95 billion at end-June 2013 to N890.47 billion in the review period. This \nreflected improved conditions in other global financial centres. In the other \ninvestment liability account, loans to general government, banks and other \nsectors amounted to N454.47 billion, compared with N13.82 billion in the first \nhalf of 2013. The stock of external debt rose to US$9.38 billion from US$8.8 \nbillion in the preceding half of 2013. \n4.4.2.1 Foreign Direct Investment \nForeign direct investment (FDI) inflow, which comprised equity capital, re-\ninvested earnings and other capital inflow declined by 52.4 per cent to \nN258.33 billion from the level in the corresponding period of 2013. This was \nlargely due to the 74.4 per cent decline in equity capital to N85.43 billion in \nthe review period. Similarly, reinvested earnings and other capital declined \nby 16.6 and 42.4 per cent from their respective levels in the corresponding \nperiod of 2013. Direct investment abroad also declined by 84.3 per cent \nbelow the level recorded in the first half of 2013. \n4.4.2.2 Portfolio Investment \nPortfolio investment inflow decreased by 45.3 per cent to N890.47 billion \nbelow the level recorded in the corresponding half of 2013. The divestment \nwas attributed to improved conditions in other financial centres. Despite the \ndevelopment, the inflow of portfolio investment accounted for 48.1 per cent \n \n \n \n116 \nof total investment inflow. In contrast, outward portfolio investment increased \nto N706.52 billion in the first half of 2014, induced by increased risk appetite \nfor foreign assets by resident investors. \nFigure 84 \nForeign Direct Investment and Portfolio Investment Inflows \n542.3\n333.0\n258.3\n1627.0\n503.4\n890.5\n0.0\n500.0\n1000.0\n1500.0\n2000.0\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nN billion\nFDI Inflows\nPortfolio Inflows\n \n4.4.3 Capital Importation by Sector and Capital Outflow \nThe total value of new capital imported into the economy amounted to \nUS$9.73 billion in the review period. A sectoral analysis indicated that the \ninflow was mainly directed at the capital market (shares), which accounted \nfor 77.0 per cent, while financing, servicing and trading were 14.4, 3.3 and 2.0 \nper cent, respectively. “Others” sector accounted for the balance. \nOn the other hand, capital outflow amounted to US$4.24 billion, of which, \ncapital transfers stood at US$2.43 billion or 57.7 per cent of the total. \nRemittance of dividends by foreign investors was US$1.53 billion, and \naccounting for 36.2 per cent, while “Others” accounted for the balance. \n \n \n \n \n117 \nFigure 85 \nCapital Importation by Sector \n(First Half 2014) \nShares\n77.0%\nOthers\n3.3%\nServicing\n3.3%\nTrading\n2.0%\nFinancing\n14.4%\nShares\nOthers\nServicing\nTrading\nFinancing\n \nFigure 86 \nCapital Outflow and Outward Transfers \n(First Half 2014) \nCapital Transfers\n57.7%\nDividends\n36.2%\nOthers\n6.1%\n \n4.4.4 Reserve Assets and Months of Import Cover \nThe stock of external reserves at end-June 2014 stood at US$37.33 billion, \ncompared with US$42.85 billion and US$44.96 billion at end-December 2013 \nand the corresponding period of 2013, respectively. The development arose \nmainly from increased rDAS utilisation in the review period. \nA breakdown of the external reserves by composition showed that of the \ntotal, federation reserves was US$3.80 billion (10.2%); Federal Government \nreserves, US$3.66 billion (9.8%); and CBN reserves, US$29.85 billion (80.0%). The \nincrease in federation reserves reflected growing excess crude savings, while \nthe FGN portion grew largely from the Federal Government’s funding of the \nJVC cash calls account and receipts of recovered sovereign looted funds. \n \n \n \n118 \nThe external reserves could support 8.0 months of import cover (goods), \ncompared with 10.0 months and 10.5 months in the second and the \ncorresponding halves of 2013, respectively. \nOf the discretionary component of the CBN portion of external reserves, the \nliquidity tranche stood at US$5.03 billion; investment tranche, US$10.55 billion; \nand the stable tranche, US$10.67 billion. The latter comprised interbank bond \nportfolio (US$0.51 billion) and external fund portfolio, (US$10.16 billion). The \nnon-discretionary component on the other hand, comprised the Special \nDrawing Rights (SDR) and LC collateral funds, which amounted to US$2.59 \nbillion and US $1.03 billion, respectively, in the review period. \nThe Bank earned the sum of US$44.82 million on US$500.00 million from the \nexternal reserves invested in Chinese renminbi since December 2011. A loss of \nN3.96 billion was, however, incurred on the external reserves portfolio in the \nfirst half of 2014 due to the current low coupons on bonds and the damping \neffect of likely interest rate rise in the US and other advanced economies. \nFigure 87 \nStock of External Reserves and Months of Import Cover \n44.96\n42.85\n37.31\n10.5\n10.0\n8.6\n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\n10\n11\n12\n30.00\n32.00\n34.00\n36.00\n38.00\n40.00\n42.00\n44.00\n46.00\n1st Half 2013\n2nd Half 2013\n1st Half 2014\nMonths\nUS$ Billion\nExternal Reserves\nMonths of import Cover\n \n4.4.5 External Assets of Financial Institutions \nProvisional data on the total external assets of the banking system in the first \nhalf of 2014 stood at N7,693.27 billion, compared with N9,164.43 billion and \nN8,513.27 billion in the first and second halves of 2013, respectively. Of the \ntotal, CBN’s holdings fell by 18.0 per cent to N6,200.00 billion, accounting for \n80.6 per cent of total assets, compared with 82.5 and 81.0 per cent in the first \n \n \n \n119 \nand second halves of 2013, respectively. Banks’ holdings of foreign assets, \nsimilarly, decreased by 6.9 per cent to N1,493.27 billion and accounted for \n19.4 per cent of the total, compared with 17.5 and 19.0 per cent, at end-\nJune and end-December 2013, respectively. \n \nFigure 88 \nTotal External Assets, \n(First Half 2014) \nBanks\n19.4%\nCBN\n80.6%\n \n5.0 \nINTERNATIONAL ECONOMIC RELATIONS \n5.1 \nRegional Institutions \n5.1.1 Presidential Taskforce Meeting on ECOWAS Monetary Cooperation \n \nProgramme \nThe inaugural meeting of the Presidential Task Force on the ECOWAS \nMonetary Cooperation Programme (EMCP) was held in Niamey, Republic of \nNiger, from February 20-21, 2014. The purpose of the meeting was to \ndeliberate on the status of implementation of the convergence criteria by \nmember countries towards attaining a single currency union in the sub-\nregion. \nThe meeting was attended by the governors of central banks of ECOWAS \nmember states, Union Economique et Monetaire Ouest Africaine (UMEOA), \nand the ECOWAS Commission. At the meeting, member countries expressed \nconcerns on the constraints which inhibited their progress, and also proffered \nsolutions on accelerating the process of convergence towards a common \ncurrency. The meeting concluded that member states should continue to \nwork towards the deadline of 2020 for the monetary union project. \n \n \n \n120 \n5.1.2 West African Monetary Zone (WAMZ) \nThe West African Monetary Institute (WAMI) and the West African Institute for \nFinancial and Economic Management (WAIFEM) were held in Banjul, The \nGambia from January 8 - 17, 2014. The WAMZ Committee of Governors \n(COG): \n Directed the standardization of the computation of non-performing \nloans (NPLs) across the Zone based on Basel core principles reporting \ntemplates to ensure a uniform reporting format by member states; \n Directed the presentation of report showing the extent of member \nstates implementation of the recommendations of the roadmap of the \nEMCP at its next meeting; \n Directed a review of the budgetary contributions of member countries \nin line with the relevant ECOWAS protocol to be applied with effect \nfrom 2015; \n Noted the interim report on the “State of Preparedness of WAMZ \ncountries for a Monetary Union in January 2015” and endorsed the \npresentation of the final report at the next meeting; \n Accepted the proposal for a fast-track approach to monetary \nintegration whereby two countries (Nigeria and Ghana) would drive \nthe single currency programme before other members follow; and \n Approved the report of the College of Supervisors of the WAMZ \n(CSWAMZ) and directed the college to undertake studies on \n“Dollarization in the Zone” and “GAP analysis on prudential guidelines \nin the Zone”. \n5.1.3 West African Institute for Financial and Economic Management \n(WAIFEM) \nThe meeting of the Board of Governors of WAIFEM approved: \n A five-year strategic plan for the sustainability of WAIFEM. The \nprogramme would enable WAIFEM to run Diploma and Master’s \nDegree courses in areas of the Institute’s niche, such as Banking \nSupervision, Risk and Portfolio Management, etc; and \n \n \n \n121 \n The proposal for Visiting Scholar Scheme. \n5.1.4 West African Monetary Agency (WAMA) \nThe 2013 Statutory Meeting of WAMA was held in Banjul, The Gambia, from \nJanuary 8 - 17, 2014. Also, the 46th Ordinary Meeting of the Committee of \nGovernors of Central Banks of ECOWAS Member States was held in Dakar, \nSenegal on June 30, 2014. At the two meetings, the ECOWAS Committee of \nGovernors (COG): \n Urged member states to ensure speedy ratification and domestication \nof regional protocols, conventions and legal instruments relating to \nmonetary integration; \n Encouraged member states to effectively implement the ECOWAS \nTrade Liberalization Scheme (ETLS); \n Urged member states to integrate the macroeconomic convergence \ncriteria into their national macroeconomic frameworks; \n Appealed to the ECOWAS Commission to accelerate the process of \nharmonization \nof \npublic \nfinance \nframeworks, \nand \nstatistical \nmethodologies in the region; \n Approved the revised matrix on the Roadmap for the ECOWAS Single \nCurrency Programme; \n Urged member states to strengthen the modernization of revenue \ncollection mechanism and improve the governance structures for tax \nadministration to minimize revenue leakages; \n Encouraged members to rationalize public expenditure, especially \nwage bill, transfers, interest payments and subsidies to contain \nincreasing budget deficits; \n Urged members to accelerate export diversification to sustain foreign \nexchange earnings; and \n Urged the consolidation efforts to resolve the security concerns in the \nsub-region to enhance economic activities. \n \n \n \n122 \n5.1.5 African Union Summit \nThe 22nd Assembly of Heads of State and Government of the AU was held in \nAddis Ababa, Ethiopia from January 21 – 31, 2014. The theme of the Summit \nwas “Transforming Africa’s Agriculture: Harnessing Opportunities for Inclusive \nGrowth and Sustainable Development”. The leaders discussed issues relating \nto agricultural development and transformation in Africa. The Summit also \nmarked the 10th anniversary of the Comprehensive Africa Agriculture \nDevelopment Programme (CAADP). The programme is a pan-African \nframework for revitalizing agriculture, food security and nutrition, and assisting \nAfrican countries attain a higher path of economic development. Under \nCAADP, African governments have made a commitment to allocate at least \n10 per cent of their national budgets to the agricultural sector yearly. \n5.1.6 Association of African Central Banks (AACB) \nThe 1st 2014 Ordinary Meeting of the Bureau of the Association of African \nCentral Banks (AACB) was held on February 26, 2014, in Dakar, Senegal. It \nwas preceded by the Technical Committee Meeting, held on February 24 - \n25, 2014. At the meeting, the implementation of the African Monetary \nCooperation Program (AMCP) and the decisions of the Assembly of \nGovernors at the 37th Ordinary Meeting held in Mauritius in August, 2013 were \nreviewed. The Meeting approved the: \n Report of the Joint AUC-AACB Study and the Strategy for the creation \nof the African Central Bank; \n Draft terms of reference for the 2014 Continental Seminar on the \ntheme, “The Imperatives for Improvement and Integration of Payment \nSystems in Africa”, to be hosted by Banque d’Algérie; and \n Work plan for 2014-2016, budget, and internal rules for the Community \nof African Banking Supervisors. \n5.1.7 African Development Bank (AfDB) \nThe 49th Annual Meetings of the Board of Governors of the AfDB and the 40th \nAnnual meeting of African Development Fund were held in Kigali, Rwanda \n \n \n \n123 \nfrom May 19 – 23, 2014. The theme of the meeting was “The Next 50 Years – \nThe Africa We Want”. The theme focused on Africa’s transformation agenda \nand how the continent could grow its economy through diversification, \nexport \ncompetitiveness, \nincreased \nproductivity, \nintegration \nand \ntechnological innovation by broader collaboration between the public and \nthe private sectors. \nThe meetings discussed several issues including: Enterprising Africa; \nFacilitating Africa’s trade; The economic benefits of investing in women; \nReducing \nperceived \nriskiness \nof \ninvesting \nin \nAfrica’s \ninfrastructure; \nInternational bonds markets; Capital market development in Africa; What \nAfrica needs to do to develop global value chains (GVC); among others. The \nmeeting \nidentified \nharnessing \nnatural \nresources \nand \nemployment \nopportunities, particularly the extractive industries; and agro-business as \nAfrica’s potential entry points into the GVC. The report on MoU signed \nbetween the Government of India and the African Development Bank \nGroup on the public-private partnership (PPP) model of infrastructure delivery \nto facilitate its implementation in African countries was presented. \nThe meeting also emphasized the opportunity in the concept of the Africa50 \nFund, adopted to mobilize African savings to finance infrastructure in the \ncontinent. It was agreed that the time for the AfDB to mobilise African savings \n– currently estimated at US$1,000 trillion – to build the Africa of tomorrow is \nnow. The AfDB Governors approved the creation of the Fund and the release \nof US$30 million for its feasibility studies. \n5.1.8 African Union (AU) and Economic Commission for Africa (ECA) \n \nConference \nof \nMinisters \nof \nFinance, \nPlanning \nand \nEconomic \n \nDevelopment \nThe 7th Joint Annual Meetings of AU/ECA Conference of Ministers of Finance, \nPlanning & Economic Development was held in Abuja, Nigeria from March \n29 – 30, 2014, on the theme, “Industrialization for Inclusive and Transformative \nDevelopment in Africa”. A caucus meeting of African central bank \nGovernors was held on the sidelines, to deliberate on key issues that were \n \n \n \n124 \nrelevant to central bank’s role in fostering industrialization for structural \ntransformation and inclusive development in Africa through appropriate \nmacroeconomic management. The Ministerial Conference elected Dr. (Mrs.) \nNgozi Okonjo Iweala, Coordinating Minister of the Economy and Minister of \nFinance of Nigeria, as the Chair of the Bureau for the next one year. The \nplenary entailed high-level ministerial policy dialogues focused on the \ntheme. The major recommendations were: \n Strategies that will aid industrialization at sub-regional level should be \nstrengthened for regional cooperation; \n African capital should be made to work for Africa’s development; \n Expansion of central banks’ mandates to include development \nfinancing and involvement of central banks in credit facilitation to \ndevelopment finance institutions; \n Development of small and medium enterprises and micro finance \ninstitutions to encourage talents and improve skills acquisition; \n Government budget should be targeted at stimulating private sector \ndevelopment; \n Sensitization of all governments globally on the need to stem illicit \nfinancial flows; and, \n African ministers to ensure credibility of data and statistics generated \nby institutions and agencies of government. \n5.2 Multilateral Economic and Financial Institutions \n5.2.1 G20 Finance Ministers and Central Bank Governors \nThe G-20 Finance Ministers and Central Bank Governors met in Sydney, \nAustralia, from February 22-23, 2014. The meeting focused on global growth, \nespecially as it affected G20 countries. Coordinating policies to maximize \ngrowth and minimize unintended effects remained a central focus of the \nG20 in 2014. Also, new approaches to ensure sustainable growth were \ndiscussed as the only way to bolster confidence, create employment \n \n \n \n125 \nopportunities, lift people out of poverty and build national prosperity. The \nmeeting welcomed recent signs of improvement in the global economy, in \nparticular, growth strengthening in the United States, the United Kingdom \nand Japan alongside continued robust growth in China and many emerging \nmarket economies, and the resumption of growth in the euro area. \nIt was also noted that despite these recent improvements, the global \neconomy remained far from achieving strong, sustainable, and balanced \ngrowth. The meeting agreed that the global economy faced weaknesses in \nsome areas of demand, and growth was still below the rates needed to get \ncitizens back into jobs and meet their aspirations for development. \nRecent volatilities in financial markets, high levels of public debt, continuing \nglobal imbalances and remaining vulnerabilities within some economies \nwere identified as major challenges. The G20 primary response was to further \nstrengthen and refine their domestic macroeconomic, structural and \nfinancial policy frameworks. \n5.2.2 Intergovernmental Group of Twenty Four (G24) \nThe G24 Meeting was held in Luxor, Egypt from March 10 – 11, 2014. Four \nsessions were held on the global economy, development finance, debt and \ndebt sustainability, and administrative matters. The following were the \nhighlights of the meeting: \n World economic recovery was still in a parlous state with crisis \nmanagement in the US and Europe being handled in a poor manner, \nwhile China’s response was seen to have created excess capacity \nand debt overhang; \n Most developing countries mismanaged the revenue derived from \nhigh commodity prices and/or capital flows; \n Recoveries from financial crises were sluggish as it takes time to repair \nbalance sheets, reduce/ restructure debt overhang and rationalize \nexcessive and unviable investment; and, \n \n \n \n126 \n The huge infrastructure gaps in developing countries show that there \nwas need for long-term financing. \n5.2.3 World Economic Forum on Africa (WEFA) \nThe World Economic Forum on Africa was held in Abuja, Nigeria from May 7 – \n9, 2014. The Forum was attended by about 1,000 regional and global leaders \nand participants on the theme, “Forging Inclusive Growth, Creating Jobs”. \nThe Forum discussed innovative structural reforms and investments that could \nsustain the continent’s growth while creating jobs and prosperity for all \ncitizens. About 40 sessions were held covering issues such as private sector, \npublic works; engaging in energy; Africa growth outlook; Industries for \nImpact; Africa Rising; Unlocking Job-Creating Growth; and sustaining \nbusiness in Africa. \nThe Forum ended with over $68 billion investment commitment to boost \neconomic growth in Africa. The funds would come from FDI as well as public \nand private investments across countries in the continent. The funds would \nbe used for projects to foster growth in the agriculture sector, and improve \ninfrastructure such as railways, roads, education, hospitals, ICT and skill \ndevelopment. The Forum revealed that global investors were beginning to \nrecognise the vast opportunities in the continent, while FDI in several African \ncountries and private investments were on the increase. \nIn addition, the ‘Safe Schools Initiative’ was launched by the Nigerian \ncoalition in collaboration with the United Nations and UN Special Envoy to \nprotect young people’s right to education in Nigeria and ensure safer \nlearning environment. \n5.2.4 The World Bank/ IMF Spring Meetings \nThe 2014 Spring Meetings of the Board of Governors of the World Bank Group \nand the International Monetary Fund (IMF) were held in Washington D.C., \nUSA from April 7 – 13, 2014. Other meetings, seminars, conferences and \nevents were also held on the fringe of the Spring Meetings. The G-24 Ministers, \n \n \n \n127 \nthe International Monetary and Finance Committee (IMFC) and the \nDevelopment Committee held their respective meetings. \nThe G-24 Ministers: \n Observed the strengthening recovery in major advanced economies \n(AEs), but noted that growth remained tepid and subject to \nconsiderable risk; \n Expressed concern about the adverse impact of disruptive capital flow \nand exchange rate volatility resulting from abrupt changes in monetary \npolicy in a few major AEs; \n Urged policymakers, especially in countries that issue reserve currencies, \nto pursue multilaterally coordinated actions to mitigate adverse spillover \neffects of monetary policy, \n Urged AEs to do more to stimulate global demand and facilitate \nrebalancing; and \n Emphasized the necessity of ensuring that Emerging Markets and \nDeveloping Countries (EMDCs) have adequate access to financial \nsafety nets, including those from the international financial institutions \n(IFIs). \nThe IMFC: \n Called for carefully calibrated and communicated monetary policy \nactions in major countries, with cooperation among policymakers to \nmanage spillovers and spillbacks; \n Noted that the continued tapering of asset purchases by the Federal \nReserve remained appropriate, while the European Central Bank had \nmaintained accommodative monetary conditions and should consider \nfurther action if low inflation becomes persistent; \n Urged the euro area to build on recent progress by completing its \nbanking union; \n \n \n \n128 \n Encouraged emerging markets and frontier low-income countries not \nfacing inflationary pressures and have credible policy frameworks to use \naccommodative monetary policies in response to growth slowdowns; \nand \n Urged removal of structural impediments to inclusive growth to address \nhigh unemployment, especially among the youth, and rising inequality. \nThe Development Committee: \n Noted that economic recovery in high-income countries showed signs of \nstrengthening with growth continuing in many emerging market \neconomies, although risks remained; \n Observed that fostering strong, inclusive and sustainable growth in the \ninterconnected \nglobal \neconomy \nrequired \npolicy \nadjustments, \nappropriate coordination, and communication; and \n Encouraged the World Bank Group and the IMF to work jointly with all \nmember countries in pursuing sound and responsive economic policies \nto \naddress \nunderlying \nmacroeconomic \nvulnerabilities; \nrebuild \nmacroeconomic buffers; and strengthen prudential management of the \nfinancial system. \n5.2.5 The Institute of International Finance (IIF) \nThe Institute of International Finance (IIF) Outreach Event was held on June \n10, 2014 in Lagos, Nigeria. The event brought together senior-level bank \nexecutives, experts from banks, other financial institutions, and the Central \nBank of Nigeria and covered topics on IIFs activities. Participants were \nacquainted with the offers of IIF and how to harness it’s expertise for the \nbenefit of their institutions. These bordered on enabling access to off-shore \nfunding, improved corporate governance and attracting capital flows, \ninvestment in risk and control structures, upgrading the quality of local \nregulation and good risk appetite setting, among others. \n \n \n \n129 \n5.2.6 International Commodity Organisation \nThe 89th Regular Session of the International Cocoa Organisation (ICCO) \nwas held in Zurich, Switzerland from March 10 – 14, 2014, with the following \nhighlights: \n Nigeria’s suspension was lifted and her voting rights restored after \npaying contribution for 2012/2013; and \n Nigeria and Togo were urged to provide statistics on their output and \nexport of cocoa beans. \n6.0 \nOUTLOOK FOR THE SECOND HALF OF 2014 \nDespite the unfavourable global economic environment, Nigeria’s output \ngrowth for the second half of 2014 was expected to remain resilient amidst \ndisruptions of agricultural activity on account of insecurity. Firmed-up \ndomestic demand would continue to drive the services and manufacturing \nsectors, while the strengthening of growth in advanced economies would \nbolster external demand. Although there are signs of domestic inflationary \npressures, pass-through effect of foreign prices on domestic inflation was \nexpected to be dampened as global inflation expectations have remained \nwell anchored. In addition, proactive monetary policy measures would stem \nthe liquidity surfeit from accommodative fiscal policy anticipated in the \nsecond half of the year. Consequently, domestic inflation would remain \nreasonably contained within its recent historical average. \nThe outlook for the external sector for the rest of 2014 remained promising, \ngiven the sustained high international crude oil price and stable domestic \neconomic conditions. The fiscal outlook is, however, mixed. Despite the \nsustained increase in international oil prices above the FGN budget \nbenchmark price of US$77.5/barrel, the reduction in US demand for Nigeria’s \ncrude due to the discovery of shale oil might adversely affect total revenue. \nHowever, it was expected that the recovery in some emerging markets might \nboost the demand for Nigeria’s Brent and, thereby, dampen the effect of the \nreduced crude oil demand from the US on federation revenue and \naccretion to the excess crude account. It was also expected that capital \n \n \n \n130 \nexpenditure implementation would intensify in the second half of the year \nalong with upsurge in recurrent expenditure due to the financial outlay for \nthe 2015 election activities. \n \n \n \n131 \nTable 16 \nOpen Market Operations (OMO) Sessions \nTotal\nAmount \nAverage\nAverage Yield\nBids\nSold\nTenor (Days)\n(%)\n(N' Million)\n(N' Million)\n2010\nJanuary\n0.00\n0.00\n0\n0.00\nFebruary\n0.00\n0.00\n0\n0.00\nMarch\n0.00\n0.00\n0\n0.00\nApril\n275,500.00\n120,000.00\n186\n2.41\nMay\n116,942.00\n40,000.00\n130\n2.45\nJune\n0.00\n0.00\n0\n0.00\nTotal\n392,442.00\n160,000.00\nAverage\n196,221.00\n80,000.00\n158\n2.43\nJuly\n0.00\n0.00\n0\n0.00\nAugust\n0.00\n0.00\n0\n0.00\nSeptember\n70,250.00\n24,000.00\n79\n5.10\nOctober\n2,000.00\n2,000.00\n181\n8.60\nNovember\n47,250.00\n29,500.00\n240\n10.00\nDecember\n99,181.00\n53,250.00\n148\n7.40\nTotal\n218,681.00\n108,750.00\nAverage\n54,670.25\n27,187.50\n162\n7.78\n2011\nJanuary\n255,939.22\n140,539.22\n146\n9.30\nFebruary\n0.00\n0.00\n0\n0.00\nMarch\n123,421.18\n69,918.18\n33\n6.78\nApril\n142,516.59\n23,387.18\n37\n9.27\nMay\n119,335.12\n48,607.55\n150\n9.61\nJune\n80,450.00\n25,470.00\n157\n9.08\nTotal\n721,662.11\n307,922.13\nAverage\n120,277.02\n51,320.36\n105\n8.81\nJuly\n227,418.50\n97,815.50\n258\n8.55\nAugust\n590,156.17\n351,676.17\n207\n8.91\nSeptember\n327,028.16\n170,997.21\n43\n10.90\nOctober\n652,222.53\n465,381.71\n159\n16.25\nNovember\n811,607.10\n343,676.63\n132\n16.58\nDecember\n731,097.91\n428,815.76\n202\n18.03\nTotal\n3,339,530.37\n1,858,362.98\nAverage\n556,588.40\n309,727.16\n167\n13.20\n2012\nJanuary\n799,840.00\n246,660.00\n173\n16.36\nFebruary\n1,124,220.00\n297,000.00\n238\n15.89\nMarch\n1,150,240.00\n491,600.00\n297\n15.27\nApril\n973,640.00\n304,180.00\n289\n14.57\nMay\n956,240.00\n363,130.00\n69\n13.99\nJune\n48,220.00\n14,110.00\n62\n14.50\nTotal\n5,052,400.00\n1,716,680.00\nAverage\n842,066.67\n286,113.33\n188\n15.10\nJuly\n17,320.00\n50.00\n48\n14.10\nAugust\n137,790.00\n4,500.00\n69\n14.00\nSeptember\n714,000.00\n318,420.00\n64\n14.25\nOctober\n1,330,810.00\n882,800.00\n75\n14.03\nNovember\n1,525,360.00\n939,540.00\n90\n13.77\nDecember\n952,950.00\n650,270.00\n112\n13.40\nTotal\n4,678,230.00\n2,795,580.00\nAverage\n779,705.00\n465,930.00\n76\n13.92\n2013\nJanuary\n2,958,460.00\n \n1,756,660.00\n \n77\n13.73\nFebruary\n2,302,710.00\n \n1,351,600.00\n \n105\n12.54\nMarch\n2,061,290.00\n \n1,265,240.00\n \n118\n13.30\nApril\n2,228,780.00\n \n1,516,690.00\n \n169\n13.55\nMay\n1,476,320.00\n \n1,127,400.00\n \n159\n13.22\nJune\n505,190.00\n \n81,950.00\n \n156\n14.09\nTotal\n11,532,750.00\n7,099,540.00\nAverage\n1,922,125.00\n1,183,256.67\n131\n13.40\nJuly\n1,078,590.00\n \n508,740.00\n \n161\n14.02\nAugust\n96,480.00\n \n91,730.00\n \n132\n13.37\nSeptember\n337,350.00\n \n150,510.00\n \n141\n13.41\nOctober\n1,956,950.00\n \n1,206,860.00\n \n127\n12.80\nNovember\n1,109,670.00\n \n791,090.00\n \n102\n12.52\nDecember\n797,960.00\n \n599,470.00\n \n125\n12.51\nTotal\n5,377,000.00\n3,348,400.00\nAverage\n896,166.67\n558,066.67\n131\n13.10\n2014\nJanuary\n1,271,958.85\n1,091,488.65\n118\n12.47\nFebruary\n405,786.77\n307,403.51\n130\n13.17\nMarch\n836,869.23\n714,571.36\n133\n13.76\nApril\n359,329.93\n285,940.65\n125\n12.87\nMay\n1,229,507.61\n905,994.13\n121\n11.29\nJune\n1,351,007.15\n1,179,539.92\n122\n11.20\nTotal\n5,454,459.54\n4,484,938.22\nAverage\n909,076.59\n747,489.70\n125\n12.46\nSource: Central Bank of Nigeria\nPeriod\n \n \n \n \n132 \nTable 17 \nTreasury Bills: Issues and Allotments \n(Naira Million) \nDeposit Money \nBanks\nNon-Bank \nPublic\n2010\nJune\n158,700.00\n0.00\n114,343.96\n44,356.04\nDecember\n297,909.82\n0.00\n222,498.29\n75,411.53\nAnnual Total\n2,003,952.93\n24,485.00\n1,378,658.34\n600,809.59\nAnnual Average\n166,996.08\n114,888.19\n50,067.47\n2011\nJune\n340,233.10\n0.00\n206,187.59\n134,045.51\nDecember\n317,714.17\n0.00\n172,438.46\n145,275.72\nAnnual Total\n3,046,262.94\n1,999,006.25\n1,047,256.69\nAnnual Average\n253,855.24\n166,583.85\n87,271.39\n2012\nJune\n373,163.33\n0.00\n249,121.86\n124,041.48\nDecember\n340,192.60\n0.00\n162,991.20\n177,201.40\nAnnual Total\n3,625,060.16\n163,857.24\n2,026,752.46\n1,419,047.31\nAnnual Average\n302,088.35\n13,654.77\n168,896.04\n118,253.94\n2013\nJune\n397,845.75\n0.00\n152,626.18\n245,219.57\nDecember\n400,605.12\n0.00\n139,214.85\n261,390.28\nAnnual Total\n3,650,881.21\n0.00\n1,853,716.30\n1,797,164.91\nAnnual Average\n304,240.10\n0.00\n154,476.36\n149,763.74\n2014\nJanuary\n357,296.66\n0.00\n291,278.36\n68,018.31\nFebruary\n319,924.18\n0.00\n256,520.53\n63,403.65\nMarch\n497,005.48\n0.00\n341,448.54\n155,556.94\nApril\n334,269.40\n0.00\n228,427.87\n105,841.52\nMay\n278,509.28\n0.00\n195,099.35\n83,409.93\nJune\n440,713.48\n0.00\n165,215.22\n275,498.26\nHalf Year Total\n2,227,718.47\n0.00\n1,477,989.87\n751,728.60\nHalf Year Average\n371,286.41\n0.00\n246,331.64\n125,288.10\nSource: Central Bank of Nigeria\nPeriod \nIssues\nCentral \nBank\nAllotment to Subscriber \n \n \n \n \n133 \nTable 18 \nMonetary and Credit Developments \n(N’ Million) \nItem\nJun 2010\nDec 2010\nJun 2011\nDec 2011\nJun 2012 /3\nDec 2012\nJun 2013 /3\nDec 2013\nJun 2014 \n(1) Domestic Credit (Net)\n8,612,939.99\n8,708,545.45\n \n8,889,638.55\n \n13,686,730.20\n \n13,567,429.11\n \n12,698,205.05\n \n13,149,382.49\n \n15,040,696.01\n \n15,173,560.61\n \n(a) Claims on Federal Government (Net)\n-1,489,877.51\n(1,121,798.63)\n \n(1,068,311.33)\n \n(496,861.62)\n \n(1,133,629.28)\n \n(2,453,557.09)\n \n(2,542,654.43)\n \n(1,468,776.49)\n \n(1,790,219.61)\n \n By Central Bank\n-3,272,806.06\n(2,884,013.44)\n \n(2,733,579.77)\n \n(3,514,447.09)\n \n(3,723,009.95)\n \n(3,574,376.40)\n \n(3,519,920.52)\n \n(2,101,616.08)\n \n(2,730,498.83)\n \n By Commecial Banks\n1,782,928.55\n1,762,214.81\n \n1,665,268.44\n \n3,017,585.48\n \n2,584,468.21\n \n1,120,543.34\n \n937,527.48\n \n596,989.86\n \n904,620.71\n \n By Merchant Banks\n-\n \n39,738.60\n \n36,606.47\n \n36,414.13\n \n By Non Interest Banks\n0.00\n-\n \n-\n \n-\n \n4,912.46\n \n275.98\n \n-\n \n(756.74)\n \n(755.62)\n \n(b) Claims on Private Sector \n10,102,817.50\n9,830,344.08\n \n9,957,949.88\n \n14,183,591.82\n \n14,701,058.40\n \n15,151,762.15\n \n15,692,036.93\n \n16,509,472.50\n \n16,963,780.23\n \n By Central Bank\n396,545.27\n632,171.02\n \n726,392.50\n \n4,569,146.02\n \n4,652,650.38\n \n4,708,311.82\n \n4,703,313.19\n \n4,917,493.06\n \n4,684,233.83\n \n By Commercial Banks\n9,706,272.23\n9,198,173.06\n \n9,231,557.39\n \n9,614,445.80\n \n10,048,406.52\n \n10,440,956.33\n \n10,949,139.46\n \n11,543,649.93\n \n12,223,369.91\n \n By Merchant Banks\n-\n \n32,218.12\n \n37,919.13\n \n41,171.58\n \n By Non Interest Banks\n-\n \n-\n \n1.50\n \n2,493.99\n \n7,366.15\n \n10,410.38\n \n15,004.91\n \n (i) Claims on State and Local Govts\n319,167.11\n369,809.82\n \n420,237.95\n \n513,218.66\n \n586,273.65\n \n665,879.27\n \n661,034.92\n \n779,126.93\n \n733,441.16\n \n By Central Bank\n0.00\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n By Commercial Banks\n319,167.11\n369,809.82\n \n420,237.95\n \n513,218.66\n \n586,273.65\n \n665,879.27\n \n660,341.02\n \n776,698.03\n \n731,041.16\n \n By Merchant Banks\n-\n \n693.90\n \n1,428.90\n \n-\n \n By Non Interest Banks\n-\n \n-\n \n-\n \n1,000.00\n \n2,400.00\n \n (ii) Claims on Non-Financial Public Ent's\n0.00\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n23,578.28\n \n23,574.95\n \n By Central Bank\n0.00\n0.0\n0.0\n0.0\n0.0\n0.0\n0.0\n23,578.28\n \n23,574.95\n \n By Commercial Banks\n0.0\n0.0\n-\n \n-\n \n By Merchant Banks\n0.0\n0.0\n-\n \n-\n \n By Non Interest Banks\n0.0\n0.0\n-\n \n-\n \n (iii) Claims on Other Private Sector \n9,783,650.39\n9,460,534.26\n \n9,537,711.94\n \n13,670,373.16\n \n14,114,784.74\n \n14,485,882.87\n \n15,031,002.01\n \n15,706,767.28\n \n16,206,764.12\n \n By Central Bank\n396,545.27\n632,171.02\n \n726,392.50\n \n4,569,146.02\n \n4,652,650.38\n \n4,708,311.82\n \n4,703,313.19\n \n4,893,914.78\n \n4,660,658.88\n \n By Commercial Banks\n9,387,105.12\n8,828,363.23\n \n8,811,319.44\n \n9,101,227.14\n \n9,462,132.86\n \n9,775,077.06\n \n10,288,798.44\n \n10,766,951.89\n \n11,492,328.75\n \n By Merchant Banks\n-\n \n31,524.22\n \n36,490.23\n \n41,171.58\n \n By Non Interest Banks\n1.50\n \n2,493.99\n \n7,366.15\n \n9,410.38\n \n12,604.91\n \n(2) Foreign Assets (Net)\n6,484,759.01\n6,506,618.59\n \n6,453,690.26\n \n7,138,672.78\n \n7,522,255.04\n \n9,043,678.68\n \n9,164,430.15\n \n8,513,268.89\n \n7,693,274.34\n \n By Central Bank\n5,401,021.13\n5,372,285.81\n \n4,922,626.64\n \n5,823,794.26\n \n6,025,336.84\n \n7,393,557.68\n \n7,561,183.53\n \n6,898,546.52\n \n6,200,004.89\n \n By Commecial Banks\n1,083,737.87\n1,134,332.78\n \n1,531,063.63\n \n1,314,878.51\n \n1,496,918.19\n \n1,647,936.45\n \n1,599,504.06\n \n1,611,727.94\n \n1,482,366.77\n \n By Merchant Banks\n-\n \n1,936.05\n \n1,089.63\n \n8,419.57\n \n By Non Interest Banks\n-\n \n2,184.56\n \n1,806.50\n \n1,904.80\n \n2,483.10\n \n(3) Other Assets (Net)\n-4,252,200.90\n(3,689,633.70)\n \n(3,171,232.11)\n \n(7,521,908.48)\n \n(7,606,624.73)\n \n(6,258,036.21)\n \n(6,720,640.13)\n \n(7,885,012.61)\n \n(6,938,457.25)\n \nTotal Monetary Assets\n10,845,498.10\n11,525,530.34\n \n12,172,096.71\n \n13,303,494.50\n \n13,483,059.41\n \n15,483,847.53\n \n15,593,172.51\n \n15,668,952.29\n \n15,928,377.70\n \nQuasi-Money /1\n5,927,508.17\n5,954,260.45\n \n6,534,832.17\n \n6,531,913.01\n \n6,883,664.88\n \n8,062,901.35\n \n8,653,623.30\n \n8,656,124.80\n \n9,341,094.52\n \nMoney Supply\n4,917,989.92\n5,571,269.89\n \n5,637,264.54\n \n6,771,581.49\n \n6,599,394.54\n \n7,420,946.18\n \n6,939,549.21\n \n7,012,827.49\n \n6,587,283.17\n \n Currency Outside Banks\n795,412.07\n1,082,295.07\n \n1,016,449.92\n \n1,245,135.35\n \n1,088,325.98\n \n1,301,160.63\n \n1,127,804.88\n \n1,447,060.44\n \n1,162,380.36\n \n Demand Deposits /2\n4,122,577.85\n4,488,974.82\n \n4,620,814.62\n \n5,526,446.14\n \n5,511,068.56\n \n6,119,785.55\n \n5,811,744.33\n \n5,565,767.05\n \n5,424,902.81\n \nTotal Monetary Liabilities\n10,845,498.10\n11,525,530.34\n \n12,172,096.71\n \n13,303,494.50\n \n13,483,059.41\n \n15,483,847.53\n \n15,593,172.51\n \n15,668,952.29\n \n15,928,377.70\n \nGROWTH RATE OVER THE PRECEDING \nDECEMBER (In Percentages)\nCredit to the Domestic Economy (Net)\n8.79\n10.00\n2.08\n57.16\n-0.87\n-7.22\n3.55\n18.45\n0.88\nCredit to the Private Sector\n-1.14\n-3.81\n1.30\n44.28\n3.65\n6.83\n3.57\n8.96\n2.75\nClaims on Federal Government (Net)\n35.29\n51.27\n4.77\n55.71\n-128.16\n-393.81\n-3.63\n40.14\n-21.89\n By Central Bank\n12.29\n22.71\n5.22\n-21.86\n-5.93\n-1.71\n1.52\n41.20\n-29.92\nClaims on State and Local Governments\n2.85\n19.17\n13.64\n38.78\n14.23\n29.75\n-0.73\n17.01\n-5.86\n Claims on Non-Financial Public Enterprises\nClaims on Other Private Sector\n-1.13\n-4.40\n0.82\n44.50\n3.25\n5.97\n3.76\n8.43\n3.18\n Foreign Assets (Net)\n-14.60\n-14.31\n-0.81\n9.71\n5.37\n26.69\n1.34\n-5.86\n-9.63\nQuasi-Money \n2.85\n3.31\n9.75\n9.70\n5.39\n23.44\n7.33\n7.36\n7.91\nMoney Supply (M1)\n-1.98\n11.05\n1.18\n21.54\n-2.54\n9.59\n-6.49\n-5.50\n-6.07\nBroad Money (M2)\n0.60\n6.91\n5.61\n15.43\n1.35\n16.39\n0.71\n1.20\n1.66\nOther Assets (Net)\n10.10\n21.99\n14.05\n-103.87\n-1.13\n16.80\n-7.35\n-26.00\n12.00\nSource: Central Bank of Nigeria\n/1 Quasi-Money consists of Time, Savings and Foreign Currency Deposits of Deposit Money Banks excluding takings from Discount Houses.\n/2 Demand Deposits consist of state and local government as well as parastatals deposits at the CBN on the one hand and state and local government and private sector deposits\n as well as demand deposits of non-financial public enterprises at the Deposit Money Banks.\n/3 Revised\n \n \n \n \n134 \nTable 19 \nValue of Money Market Assets \n(Naira Million) \n2014\nJune\nDec\nJune\nDec\nJune\nDec\nJune\nDec\nJune\nTreasury Bills\n901,016.62\n1,277,101.60\n1,561,424.00\n1,727,910.00\n2,084,590.38\n2,122,926.96\n2,483,285.11\n2,581,550.64\n2,735,869.09\nTreasury Certificates\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nDevelopment Stocks\n220.00\n220.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nCertificates of Deposits\n60,000.00\n0.00\n0.00\n0.00\n0.00\n34,000.00\n23,000.00\n20,500.00\n51,500.00\nCommercial Papers\n188,204.28\n189,216.42\n199,469.24\n203,008.29\n2,039.06\n1,050.36\n6,466.85\n9,324.80\n10,630.95\nBankers' Acceptances\n41,312.04\n79,172.31\n62,258.27\n73,406.10\n23,722.34\n9,863.82\n16,012.34\n20,469.96\n28,151.69\nFGN Bonds\n2,408,426.59\n2,901,600.30\n3,276,111.00\n3,541,200.00\n3,714,553.86\n4,080,048.85\n4,032,903.13\n4,222,037.71\n4,369,837.71\nTotal\n3,599,179.53\n4,447,310.63\n5,099,262.52\n5,545,524.39\n5,824,905.64\n6,247,889.99\n6,570,202.67\n6,853,883.10\n7,195,989.44\nTreasury Bills\n12.98\n60.14\n22.26\n35.30\n20.64\n22.86\n16.97\n21.60\n5.98\nTreasury Certificates\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\nEligible Development Stocks\n-57.69\n-57.69\n-100.00\n-100.00\n0.00\n0.00\n0.00\n0.00\n0.00\nCertificates of Deposits\n18.81\n-100.00\n0.00\n0.00\n0.00\n0.00\n-32.35\n-39.71\n151.22\nCommercial Papers\n-63.03\n-62.83\n5.42\n7.29\n-99.00\n-99.48\n515.68\n787.77\n14.01\nBankers' Acceptances\n-33.63\n27.20\n-21.36\n-7.28\n-67.68\n-86.56\n62.33\n107.53\n37.53\nFGN Bonds\n21.95\n46.92\n12.91\n22.04\n4.90\n15.22\n-1.16\n3.48\n3.50\nPercentage Change of Total\n6.02\n31.01\n14.66\n24.69\n5.04\n12.67\n5.16\n9.70\n4.99\nSource: Central Bank of Nigeria\n1/ Provisional\nPercentage Change Over Preceding December\n2010\n2011\nInstrument\n2013\n2012\n \n \n135 \nTable 20 \nSelected Interest Rates \n(End-Period Rate) \n2014\nJun\nDec\nJun\nDec\nJun\nDec\nJun\nDec\nJun\nEnd-Period Rates\nMonetary Policy Rate\n6.00\n6.25\n8.00\n12.00\n12.00\n12.00\n12.00\n12.00\n12.00\nTreasury Bills Issue Rate\n2.38\n7.47\n8.35\n14.23\n14.08\n11.77\n11.60\n10.97\n9.98\nInter-bank Call Rate \n1.18\n \n8.83\n \n10.92\n \n14.10\n \n15.26\n \n10.56\n \n10.42\n \n10.50\n \n10.50\n \nOpen Buy Back (OBB)\n1.09\n \n8.25\n \n9.11\n \n13.57\n \n14.46\n \n10.29\n \n10.29\n \n11.50\n \n10.25\n \nNIBOR 7-days\n2.43\n \n9.67\n \n11.75\n \n14.63\n \n15.58\n \n11.38\n \n10.75\n \n10.88\n \nNIBOR 30-days\n5.17\n \n12.17\n \n12.83\n \n15.25\n \n16.04\n \n12.96\n \n11.00\n \n11.13\n \n12.07\n \nDeposit Money Banks (DMBs) \n(Weighted Average Rates)\nSavings Deposit Rate\n1.95\n1.51\n1.40\n1.41\n1.76\n1.66\n2.04\n2.53\n3.42\nTime Deposit Rate (3 months)\n4.98\n4.63\n5.14\n6.80\n7.80\n9.15\n7.49\n7.96\n9.30\nPrime Lending Rate\n17.65\n15.74\n15.76\n16.75\n16.93\n16.54\n16.56\n17.01\n16.50\nMaximum Lending Rate\n22.03\n21.86\n22.02\n23.21\n23.44\n24.61\n24.58\n24.90\n26.07\nSources: Financial Market Dealers Association (FMDA) and Central Bank of Nigeria\n2013\n2010\n2011\n2012\n \n \n \n136 \nTable 21 \nFederation Account Operations /1 \n(N’ Billion) \n1st Half\n1st Half\n1st Half\n1st Half\n2nd Half\n 1st Half \nBudget \nTotal Revenue (Gross)\n3,275.88\n \n4,758.96\n \n5,577.22\n \n4,806.50\n \n5,109.03\n \n5,437.75\n \nOil Revenue (Gross)\n2,445.42\n \n3,828.05\n \n4,357.61\n \n3,648.04\n \n3,604.39\n \n3,582.40\n \n Crude oil / Gas Exports\n834.31\n \n1,007.66\n \n959.01\n \n842.94\n \n1,094.04\n \n1,920.37\n \n PPT and Royalties etc.\n813.25\n \n1,698.91\n \n2,160.16\n \n2,003.29\n \n1,713.36\n \n1,335.54\n \n Domestic Crude Oil / Gas Sales\n793.74\n \n1,119.63\n \n1,190.62\n \n785.17\n \n748.21\n \n323.28\n \n Other Oil Revenue\n4.13\n \n1.86\n \n47.82\n \n16.64\n \n48.78\n \n3.22\n \n Less:\n Deductions\n1,141.34\n \n2,136.53\n \n2,214.56\n \n1,281.47\n \n1,124.72\n \n1,076.73\n \n \n Oil Revenue (Net)\n1,304.08\n \n1,691.53\n \n2,143.05\n \n2,366.57\n \n2,479.67\n \n2,505.67\n \nNon-oil Revenue\n830.45\n \n930.91\n \n1,219.61\n \n1,158.46\n \n1,504.64\n \n1,855.35\n \n Corporate Tax\n261.50\n \n243.26\n \n281.82\n \n341.37\n \n582.31\n \n493.13\n \n Customs & Excise Duties\n140.70\n \n210.57\n \n226.97\n \n207.20\n \n257.91\n \n391.19\n \n Value-Added Tax (VAT)\n282.38\n \n307.11\n \n352.75\n \n379.18\n \n407.95\n \n422.72\n \n Independent Revenue of Fed. Govt.\n65.21\n \n92.93\n \n226.70\n \n82.20\n \n134.01\n \n226.02\n \n Education Tax\n31.57\n \n14.57\n \n48.71\n \n51.80\n \n18.57\n \n81.01\n \n Customs Special Levies (Federation Account)\n44.92\n \n61.82\n \n79.10\n \n92.91\n \n44.93\n \n111.23\n \n National Information Technology Development Fund (NITDF)\n4.17\n \n0.64\n \n3.57\n \n3.80\n \n2.04\n \n4.70\n \n Customs Special Levies (Non-Federation Account)\n0.00\n0.00\n0.00\n0.00\n56.91\n125.35\nLess:\n Cost of Collection\n31.60\n \n36.27\n \n41.27\n \n43.33\n \n217.35\n \n88.81\n \nNon-Oil Revenue (Net)\n798.85\n \n894.64\n \n1,178.34\n \n1,115.14\n \n1,287.29\n \n1,766.54\n \nEstimated Balances in Special Accounts for the previous year\n0.00\n0.00\n0.00\n0.00\n0.00\n1.39\nFederally-collected revenue (Net)\n2,102.93\n \n2,586.16\n \n3,321.39\n \n3,481.71\n \n3,766.96\n \n4,273.60\n \nFederation Account Allocation:\n2,102.93\n \n2,586.16\n \n3,321.39\n \n3,481.71\n \n3,766.96\n \n4,273.60\n \nTransfer to Federal Govt. Ind. Revenue\n65.21\n \n92.93\n \n226.70\n \n82.20\n \n134.01\n \n226.02\n \nTransfer to VAT Pool Account\n271.08\n \n294.82\n \n338.64\n \n364.01\n \n391.63\n \n405.82\n \nOther Tranfers 3/\n80.66\n \n77.03\n \n131.37\n \n148.51\n \n122.45\n \n198.85\n \nDistributable Amount\nAmount Distributed\n1,685.98\n \n2,121.38\n \n2,624.68\n \n2,886.98\n \n3,118.87\n \n3,442.91\n \n Federal Government\n795.99\n \n1,001.70\n \n1,235.91\n \n1,358.79\n \n1,473.20\n \n1,642.13\n \n State Government\n403.74\n \n508.08\n \n626.87\n \n689.20\n \n747.23\n \n832.91\n \n Local Government\n311.26\n \n391.70\n \n483.29\n \n531.34\n \n576.08\n \n642.14\n \n 13% Derivation\n174.99\n \n219.90\n \n278.60\n \n307.65\n \n322.36\n \n325.74\n \nVat Pool Account\n271.08\n \n294.82\n \n338.64\n \n364.01\n \n391.63\n \n405.82\n \n FG\n40.66\n \n44.22\n \n50.79\n \n54.60\n \n58.74\n \n60.87\n \n SG\n135.54\n \n147.41\n \n169.32\n \n182.00\n \n195.82\n \n202.91\n \n LG\n94.88\n \n103.19\n \n118.52\n \n127.40\n \n137.07\n \n142.04\n \nSpecial Funds (FGN)\n61.60\n \n77.80\n \n96.55\n \n107.49\n \n116.89\n \n130.30\n \n Federal Capital Territory \n14.74\n \n18.61\n \n23.10\n \n25.71\n \n27.97\n \n31.17\n \n Ecology \n14.74\n \n18.61\n \n23.10\n \n25.71\n \n27.97\n \n31.17\n \n Statutory Stabilization\n7.37\n \n9.31\n \n11.55\n \n12.86\n \n13.98\n \n15.59\n \n Natural Resources\n24.76\n \n31.27\n \n38.81\n \n43.20\n \n46.98\n \n52.37\n \n FCT VAT\n2.71\n \n2.95\n \n3.39\n \n3.64\n \n3.92\n \n4.06\n \nOverall Balance\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n \n Deductions\n1,141.34\n \n2,136.53\n \n2,214.56\n1,281.47\n1,124.72\n1,076.73\n JVC Cash calls\n488.82\n \n499.35\n \n562.65\n571.43\n684.05\n429.29\n Excess Crude Proceeds\n391.64\n \n548.29\n \n428.45\n0.00\n182.50\n0.00\n Excess PPT & Royalty\n27.24\n \n819.83\n \n886.33\n674.07\n206.85\n0.00\n Domestic Subsidy\n233.64\n269.07\n77.14\n0.00\n0.00\n485.57\n Others\n0.00\n-\n \n260.00\n35.96\n51.33\n161.87\nDistribution from Excess Crude\n442.82\n \n0.00\n75.00\n309.48\n0.00\n341.67\n Federal Government\n202.95\n \n0.00\n34.37\n141.84\n0.00\n177.03\n State Government\n102.94\n \n0.00\n17.44\n71.94\n0.00\n92.97\n Local Government\n79.36\n \n0.00\n13.44\n55.46\n0.00\n71.68\n 13% Derivation\n57.57\n \n0.00\n9.75\n40.23\n0.00\n0.00\n Provisional Dist & Actual Budget (Diff)\n39.87\n \n162.90\n \n0.00\n0.00\n0.00\n0.00\n Federal Government\n18.27\n \n74.66\n \n0.00\n0.00\n0.00\n0.00\n State Government\n9.27\n \n37.87\n \n0.00\n0.00\n0.00\n0.00\n Local Government\n7.15\n \n29.20\n \n0.00\n0.00\n0.00\n0.00\n 13% Derivation\n5.18\n \n21.18\n \n0.00\n0.00\n0.00\n0.00\nExchange Rate Gain\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Federal Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n State Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Local Government\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n 13% Derivation\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n SURE-P 6/\n0.00\n0.00\n71.10\n213.30\n213.29\n0.00\n Federal Government\n0.00\n0.00\n32.59\n97.76\n97.75\n0.00\n State Government\n0.00\n0.00\n16.53\n49.58\n49.58\n0.00\n Local Government\n0.00\n0.00\n12.74\n38.23\n38.23\n0.00\n 13% Derivation\n0.00\n0.00\n9.24\n27.73\n27.73\n0.00\nNNPC Refund\n0.00\n0.00\n72.15\n45.70\n30.47\n0.00\n Federal Government\n State Government\n0.00\n0.00\n33.80\n22.45\n14.97\n0.00\n Local Government\n0.00\n0.00\n26.06\n17.31\n11.54\n0.00\n 13% Derivation\n0.00\n0.00\n12.29\n5.94\n3.96\n0.00\nFederation Revenue Augmentation\n414.22\n \n145.95\n \n462.02\n \n613.88\n \n0.00\n0.00\n Federal Government\n189.84\n \n66.89\n \n211.75\n \n281.35\n \n0.00\n0.00\n State Government\n96.29\n \n33.93\n \n107.40\n \n142.71\n \n0.00\n0.00\n Local Government\n74.24\n \n26.16\n \n82.80\n \n110.02\n \n0.00\n0.00\n 13% Derivation\n53.85\n \n18.97\n \n60.06\n \n79.80\n \n0.00\n0.00\nTotal Excluding VAT\n2,582.88\n \n2,430.23\n \n3,304.94\n \n4,069.34\n \n3,362.63\n \n3,784.58\n \n Federal Government\n1,207.06\n \n1,143.25\n \n1,514.63\n \n1,879.74\n \n1,570.95\n \n1,819.15\n \n State Government\n612.23\n \n579.87\n \n802.04\n \n975.88\n \n811.78\n \n925.88\n \n Local Government\n472.01\n \n447.06\n \n618.34\n \n752.36\n \n625.85\n \n713.81\n \n 13% Derivation\n291.59\n \n260.05\n \n369.94\n \n461.36\n \n354.05\n \n325.74\n \nTotal Statutory Revenue and VAT Distribution 3/\n2,853.97\n \n2,725.06\n \n3,643.58\n \n4,433.35\n \n3,754.26\n \n4,190.40\n \n Federal Government\n1,247.72\n \n1,187.48\n \n1,565.42\n \n1,934.34\n \n1,629.69\n \n1,880.03\n \n State Government\n747.78\n \n727.29\n \n971.36\n \n1,157.89\n \n1,007.60\n \n1,128.79\n \n Local Government\n566.89\n \n550.25\n \n736.86\n \n879.76\n \n762.92\n \n855.85\n \n 13% Derivation\n291.59\n \n260.05\n \n369.94\n \n461.36\n \n354.05\n \n325.74\n \nSource: Office of the Accountant-General of the Federation (OAGF)\n1/ Revised\n2/Provisional\n3/ Includes Education Tax, Customs Levies and NITDF\nMemorandum Items\n \n \n137 \nTable 22 \nSummary of Federal Government Finances \nFirst Half, 2014 \n(N’ Billion) \n \n2010 First Half\n2011 First Half\n2012 First Half\n2013 1/ First Half 2014 2/ First Half\n 2014 First Half \nBudget \nTotal Federal Government Retained Revenue\n1,390.24\n1,308.10\n1,902.01\n1,960.17\n1,771.27\n2,134.04\n Share of Federation Account (Gross)\n795.99\n \n1,001.70\n \n1,235.91\n \n1,358.79\n \n1,473.20\n \n1,642.13\n \n Share of VAT Pool Account\n40.66\n \n44.22\n \n50.79\n \n54.60\n \n58.75\n \n60.87\n \n Federal Government Independent Revenue\n65.20\n \n92.93\n \n128.56\n \n82.20\n \n134.01\n \n226.02\n \n Revenue Augmentation\n289.26\n141.55\n211.75\n281.35\n0.00\n0.00\n Share of Excess Crude Account \n0.00\n0.00\n106.75\n141.84\n0.00\n0.00\n SURE-P\n199.12\n27.70\n32.59\n97.76\n97.75\n134.19\n Others 3/\n0.00\n0.00\n135.66\n(56.38)\n \n7.56\n70.84\nTotal Expenditure\n1,818.16\n1,958.34\n2,180.56\n2,375.56\n2,096.37\n2,616.14\n Recurrent Expenditure \n1,297.22\n1,546.61\n1,553.24\n1,714.39\n1,577.88\n1,717.80\n Goods and Services\n1,062.35\n1,235.19\n1,109.68\n1,080.61\n979.27\n1,227.44\n Personnel Cost\n540.21\n \n832.42\n \n869.78\n \n775.06\n \n753.13\n \n884.52\n \n Pension\n97.73\n \n54.76\n \n76.92\n \n66.27\n \n73.88\n \n93.73\n \n Overhead Cost\n424.40\n \n348.01\n \n162.98\n \n239.28\n152.26\n249.20\n Interest Payments\n170.56\n225.15\n308.87\n390.61\n477.80\n356.00\n Foreign \n19.62\n \n20.90\n \n21.97\n \n29.59\n \n36.37\n \n24.20\n \n Domestic 4/\n150.95\n \n204.25\n \n286.90\n \n361.02\n \n441.43\n \n331.81\n \n Transfers\n64.31\n86.28\n134.69\n243.17\n120.81\n134.36\n FCT & Others (Special Funds)\n64.31\n \n86.28\n \n134.69\n \n152.38\n \n120.81\n \n134.36\n \n Others\n0.00\n0.00\n0.00\n90.79\n0.00\n0.00\n Capital Expenditure & Net Lending 5/\n445.11\n303.62\n259.25\n499.69\n353.15\n693.99\n Domestic Financed Budgets\n445.11\n303.62\n259.25\n499.69\n353.15\n693.99\n Budgetary\n445.11\n303.62\n259.25\n401.93\n255.40\n559.81\n SURE-P\n0.00\n0.00\n32.59\n97.76\n97.76\n134.19\nTransfers\n75.83\n108.10\n368.06\n161.49\n165.34\n204.34\n NDDC\n0.00\n28.04\n0.00\n0.00\n15.49\n30.97\n NJC\n45.50\n47.50\n \n39.17\n33.50\n27.92\n36.50\n UBE\n22.16\n23.04\n \n31.80\n38.99\n29.36\n35.24\n Refund of Signature Bonuses/Others\n8.17\n9.52\n \n297.10\n89.01\n92.58\n101.64\nBalance Of Revenue And Expenditure\nPrimary Surplus (+)/Deficit (-)\n(257.36)\n \n(425.09)\n \n30.32\n \n(24.79)\n \n152.70\n \n(126.10)\n \nCurrent Surplus(+)/Deficit(-)\n93.02\n \n(238.51)\n \n348.77\n \n245.78\n \n193.39\n \n416.24\n \nOverall Surplus(+)/Deficit(-)\n(427.93)\n \n(650.23)\n \n(278.55)\n \n(415.40)\n \n(325.11)\n \n(482.10)\n \nFinancing:\n502.95\n \n723.56\n \n278.55\n \n415.40\n \n325.11\n \n482.10\n \n Foreign(Net)\n75.03\n73.33\n \n0.00\n0.00\n0.00\n0.00\n Domestic(Net)\n427.93\n \n650.23\n \n278.55\n \n415.40\n \n325.11\n \n482.10\n \n Banking System\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n CBN\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n DMBs\n0.00\n0.00\n0.00\n0.00\n0.00\n0.00\n Non Bank Public\n366.87\n476.00\n204.00\n521.43\n504.00\n312.11\n Privatization Proceeds\n0.00\n0.00\n3.50\n0.00\n0.00\n7.50\n Loans from Special Accts\n0.00\n95.00\n0.00\n151.26\n114.15\n0.00\n Excess Crude \n0.00\n0.00\n0.00\n0.00\n0.00\n162.48\n Other Funds\n61.06\n79.23\n71.05\n(257.30)\n \n(293.04)\n \n0.00\nSource: Office of the Accountant-General of the Federation (OAGF)\n1/ Revised\n2/ Provisional\n3/ Includes FG's share of Federation Revenue Augmentation and Share of Difference between Provisonal and Approved Budget.\n4/ Include Ways and Means Advances\n5/ Includes net deductions for loans on lent to State,local governments and Federal parastatals/companies.\n \n \n \n138 \nTable 23 \nFunctional Classification of Federal Government Recurrent and Capital \nExpenditure \nFirst Half, 2014 \n(Naira Billion) \n2010 \nHalf - Year\n2011 \nHalf - Year\n2012 \nHalf - Year\n2013 \nHalf - Year\n2014 \nHalf - Year 1/\nTOTAL EXPENDITURE\n1,818.16\n \n1,958.34\n \n2,180.56\n \n2,375.56\n \n2,096.37\n \nA. RECURRENT EXPENDITURE\n1,297.22\n \n1,546.61\n \n1,553.24\n \n1,714.39\n \n1,577.88\n \n A1. ADMINISTRATION\n498.45\n \n600.99\n \n601.91\n \n626.12\n \n460.13\n \nGeneral Administration\n257.79\n \n281.14\n \n310.89\n \n313.47\n \n140.61\n \nDefence\n98.80\n \n109.47\n \n109.88\n \n117.52\n \n119.89\n \nInternal Security\n141.86\n \n210.38\n \n181.14\n \n195.14\n \n199.63\n \nA2. ECONOMIC SERVICES\n155.62\n \n195.35\n \n172.59\n \n178.34\n \n202.19\n \nAgriculture\n13.37\n \n15.99\n \n22.09\n \n19.01\n \n18.91\n \nRoads & Construction\n17.89\n \n20.57\n \n19.21\n \n21.31\n \n25.88\n \nTransport & Communications\n35.96\n \n43.33\n \n47.29\n \n46.72\n \n53.99\n \nOthers\n88.41\n \n115.46\n \n84.00\n \n91.30\n \n103.41\n \nA3. SOCIAL & COMMUNITY SERVICES\n240.99\n \n287.08\n \n288.70\n \n300.67\n \n249.04\n \nEducation\n107.17\n \n130.42\n \n138.57\n \n138.21\n \n103.65\n \nHealth\n48.76\n \n57.63\n \n70.29\n \n64.80\n \n63.76\n \nOthers\n85.07\n \n99.02\n \n79.83\n \n97.66\n \n81.62\n \nA4. TRANSFERS\n402.15\n \n463.20\n \n490.05\n \n609.26\n \n666.52\n \nPublic Debt Charges (Int)\n170.56\n \n225.15\n \n308.87\n \n390.61\n \n477.80\n \nDomestic\n150.95\n \n204.25\n \n286.90\n \n361.02\n \n441.43\n \nForeign\n19.62\n \n20.90\n \n21.97\n \n29.59\n \n36.37\n \nPensions & Gratuities\n97.73\n \n54.76\n \n76.92\n \n66.27\n \n67.91\n \nFCT & Others\n64.31\n \n86.28\n \n134.69\n \n152.38\n \n120.81\n \nContingencies (Others)\n-\n \n-\n \n-\n \n-\n \n-\n \nExternal Obligations\n-\n \n-\n \n-\n \n-\n \n-\n \nExtra-Budgetary Expenditure\n-\n \n-\n \n-\n \n-\n \n-\n \nDeferred Customs Duties\n-\n \n-\n \n-\n \n-\n \n-\n \nUnspecified Expenditure\n-\n \n-\n \n-\n \n-\n \n-\n \nOthers\n69.54\n \n97.02\n \n(30.44)\n \n-\n \n-\n \nB. CAPITAL EXPENDITURE\n445.11\n \n303.62\n \n259.25\n \n499.69\n \n353.15\n \nB1. ADMINISTRATION\n111.06\n \n116.13\n \n110.38\n \n176.19\n \n122.34\n \nGeneral Administration\n69.12\n \n75.05\n \n68.16\n \n110.77\n \n64.61\n \nDefence\n18.09\n \n15.99\n \n16.45\n \n26.41\n \n22.76\n \nInternal Security\n23.85\n \n25.09\n \n25.77\n \n39.01\n \n34.96\n \nB2 ECONOMIC SERVICES\n249.50\n \n118.89\n \n97.82\n \n221.44\n \n90.42\n \nAgriculture & Natural Resources\n35.67\n \n19.30\n \n20.79\n \n38.22\n \n29.79\n \nManuf., Mining & Quarrying\n10.35\n \n7.81\n \n5.72\n \n12.23\n \n-\n \nTransport & Communications\n41.99\n \n28.21\n \n29.21\n \n51.97\n \n26.93\n \nHousing\n-\n \n-\n \n-\n \n-\n \n-\n \nRoads & Construction \n72.01\n \n36.08\n \n36.38\n \n71.15\n \n33.70\n \nNational Priority Projects\n-\n \n-\n \n-\n \n-\n \n-\n \nJVC Calls/NNPC Priority Projects\n-\n \n-\n \n-\n \n-\n \n-\n \nPTF\n-\n \n-\n \n-\n \n-\n \n-\n \nCounterpart Funding\n-\n \n-\n \n-\n \n-\n \n-\n \nOthers\n89.49\n \n27.50\n \n5.72\n \n47.86\n \n-\n \nB3 SOCIAL & COMMUNITY SERVICES\n62.98\n \n54.85\n \n39.62\n \n79.11\n \n43.26\n \nEducation\n20.76\n \n17.90\n \n19.57\n \n30.32\n \n21.57\n \nHealth\n17.15\n \n14.97\n \n15.68\n \n24.82\n \n21.69\n \nOthers\n25.06\n \n21.98\n \n4.37\n \n23.97\n \n-\n \nB4 TRANSFERS\n21.57\n \n13.75\n \n11.43\n \n22.94\n \n97.13\n \nFinancial Obligations\n-\n \n-\n \n-\n \n-\n \n-\n \nCapital Repayments\n-\n \n-\n \n-\n \n-\n \n-\n \nDomestic\n-\n \n-\n \n-\n \n-\n \n-\n \nForeign\n-\n \n-\n \n-\n \n-\n \n-\n \nExternal Obligations\n-\n \n-\n \n-\n \n-\n \n-\n \nContingencies 2/\n-\n \n-\n \n-\n \n-\n \n-\n \nCapital Supplementation\n18.47\n \n10.60\n \n8.19\n \n17.99\n \n97.13\n \nNet Lending to States/L.G.s/Parast.\n-\n \n-\n \n-\n \n-\n \n-\n \nGrants to States\n-\n \n-\n \n-\n \n-\n \n-\n \nOthers\n3.10\n \n3.15\n \n3.23\n \n4.95\n \n-\n \nC. STATUTORY TRANSFERS\n75.83\n \n108.10\n \n368.06\n \n161.49\n \n165.34\n \nNDDC\n0.00\n28.04\n \n0.00\n0.00\n15.49\nNJC\n45.50\n \n47.50\n \n39.17\n \n33.50\n \n27.92\n \nUBE\n22.16\n \n23.04\n \n31.80\n \n38.99\n \n29.36\n \nOthers\n8.17\n \n9.52\n \n297.10\n \n89.01\n \n92.58\n \n1/ Provisional\nSources: Federal Ministry of Finance, Office of the Accountant-General of the Federation\n Central Bank of Nigeria\n \n \n \nTable 24 \n \n \nSummary of Statutory & VAT Revenue Allocation to State Governments \nFirst Half, 2014 \n(Naira Billion) \nGross Stat. Alloc.\nDeductions 13% Derivation\nTotal Net Stat. \nAlloc.\nAugmentation\nExchange Gain Excess Crude 2/\nVAT\nTotal Gross \nAllocation\nTotal Net Alloc.\nGross Stat. Alloc.\nDeductions 13% Derivation\nTotal Net Stat. \nAlloc.\nAugmentation\nExchange Gain Excess Crude 2/\nVAT\nTotal Gross Alloc.\nTotal Net Alloc.\nGross Stat. Alloc. Deductions 13% Derivation\nTotal Net Stat. \nAlloc.\nAugmentation\nExchange Gain Excess Crude 2/ NNPC Refund SURE-P\nVAT\nTotal Gross Alloc.\nTotal Net Alloc.\nGross Stat. Alloc. Deductions 13% Derivation\nTotal Net Stat. \nAlloc.\nAugmentation\nExchange Gain Excess Crude 2/ NNPC Refund SURE-P\nVAT\nTotal Gross Alloc.\nTotal Net Alloc.\nGross Stat. Alloc.\n1\nAbia\n9.73\n \n0.53\n \n2.75\n \n11.95\n \n3.17\n \n0.30\n \n3.28\n \n2.79\n \n22.02\n \n21.49\n \n12.25\n \n0.24\n \n2.29\n \n14.29\n \n2.14\n \n3.01\n \n19.67\n \n19.43\n \n15.11\n \n0.30\n \n2.30\n \n17.11\n \n2.59\n \n0.27\n \n0.42\n \n0.55\n \n0.40\n \n3.48\n \n25.12\n \n24.82\n \n16.61\n \n0.46\n \n4.94\n \n21.09\n \n3.44\n \n-\n \n1.73\n \n0.55\n \n1.20\n \n3.76\n \n32.23\n \n31.76\n \n18.45\n \n2\nAdamawa\n10.86\n \n1.01\n \n-\n \n9.86\n \n2.59\n \n0.25\n \n2.65\n \n2.92\n \n19.28\n \n18.27\n \n13.67\n \n0.72\n \n-\n \n12.96\n \n1.93\n \n3.17\n \n18.77\n \n18.06\n \n16.87\n \n1.97\n \n-\n \n14.90\n \n2.89\n \n0.31\n \n0.47\n \n0.62\n \n0.44\n \n3.63\n \n25.22\n \n23.25\n \n18.54\n \n0.05\n \n-\n \n18.49\n \n3.84\n \n-\n \n1.94\n \n0.62\n \n1.33\n \n3.91\n \n30.18\n \n30.12\n \n19.63\n \n3\nAkwa Ibom\n10.99\n \n1.26\n \n49.09\n \n58.82\n \n17.73\n \n1.71\n \n18.84\n \n3.53\n \n101.88\n \n100.62\n \n13.83\n \n(0.87)\n \n55.39\n \n70.09\n \n11.08\n \n4.08\n \n84.38\n \n85.25\n \n17.06\n \n6.17\n \n99.61\n \n110.50\n \n2.92\n \n0.31\n \n0.47\n \n0.61\n \n0.45\n \n4.44\n \n125.88\n \n119.70\n \n18.76\n \n4.93\n \n121.52\n \n135.35\n \n3.88\n \n-\n \n1.96\n \n0.61\n \n1.35\n \n4.74\n \n152.82\n \n147.89\n \n19.81\n \n4\nAnambra\n10.97\n \n0.32\n \n-\n \n10.65\n \n2.62\n \n0.25\n \n2.68\n \n3.24\n \n19.76\n \n19.44\n \n13.81\n \n0.30\n \n-\n \n13.51\n \n1.95\n \n3.53\n \n19.29\n \n18.99\n \n17.04\n \n0.10\n \n-\n \n16.93\n \n2.92\n \n0.31\n \n0.47\n \n0.62\n \n0.45\n \n4.04\n \n25.84\n \n25.74\n \n18.73\n \n0.23\n \n-\n \n18.50\n \n3.88\n \n-\n \n1.96\n \n0.62\n \n1.35\n \n4.34\n \n30.87\n \n30.64\n \n19.59\n \n5\nBauchi\n12.73\n \n0.87\n \n-\n \n11.86\n \n3.04\n \n0.29\n \n3.11\n \n3.33\n \n22.49\n \n21.62\n \n16.02\n \n1.39\n \n-\n \n14.63\n \n2.26\n \n3.62\n \n21.90\n \n20.51\n \n19.76\n \n2.45\n \n-\n \n17.31\n \n3.39\n \n0.36\n \n0.55\n \n0.69\n \n0.52\n \n4.13\n \n29.40\n \n26.94\n \n21.73\n \n1.44\n \n-\n \n20.28\n \n4.50\n \n-\n \n2.27\n \n0.69\n \n1.56\n \n4.47\n \n35.22\n \n33.78\n \n23.57\n \n6\nBayelsa\n8.72\n \n5.83\n \n20.27\n \n23.15\n \n8.32\n \n0.80\n \n8.80\n \n2.51\n \n49.41\n \n43.58\n \n10.97\n \n12.48\n \n42.77\n \n41.26\n \n9.12\n \n2.78\n \n65.64\n \n53.16\n \n13.52\n \n14.53\n \n69.26\n \n68.26\n \n2.32\n \n0.24\n \n0.38\n \n0.48\n \n0.36\n \n3.29\n \n89.85\n \n75.32\n \n14.88\n \n11.43\n \n95.92\n \n99.36\n \n3.08\n \n-\n \n1.55\n \n0.48\n \n1.07\n \n3.76\n \n120.74\n \n109.30\n \n17.44\n \n7\nBenue\n11.73\n \n0.77\n \n-\n \n10.96\n \n2.80\n \n0.27\n \n2.87\n \n3.18\n \n20.84\n \n20.07\n \n14.76\n \n2.18\n \n-\n \n12.58\n \n2.09\n \n3.47\n \n20.32\n \n18.14\n \n18.21\n \n2.31\n \n-\n \n15.90\n \n3.12\n \n0.33\n \n0.51\n \n0.66\n \n0.48\n \n4.08\n \n27.40\n \n25.09\n \n20.03\n \n2.12\n \n-\n \n17.90\n \n4.15\n \n-\n \n2.09\n \n0.66\n \n1.44\n \n4.27\n \n32.64\n \n30.51\n \n22.10\n \n8\nBorno\n12.94\n \n0.11\n \n-\n \n12.83\n \n3.09\n \n0.30\n \n3.16\n \n3.23\n \n22.72\n \n22.61\n \n16.29\n \n0.07\n \n-\n \n16.21\n \n2.30\n \n3.50\n \n22.09\n \n22.02\n \n20.10\n \n1.37\n \n-\n \n18.73\n \n3.44\n \n0.36\n \n0.56\n \n0.70\n \n0.53\n \n4.05\n \n29.75\n \n28.39\n \n22.10\n \n0.20\n \n-\n \n21.89\n \n4.58\n \n-\n \n2.31\n \n0.70\n \n1.59\n \n4.25\n \n35.52\n \n35.32\n \n24.48\n \n9\nCross River\n10.20\n \n2.29\n \n-\n \n7.91\n \n2.43\n \n0.23\n \n2.49\n \n2.83\n \n18.18\n \n15.89\n \n12.83\n \n0.40\n \n2.27\n \n14.71\n \n2.20\n \n3.05\n \n20.35\n \n19.96\n \n15.83\n \n1.60\n \n2.86\n \n17.10\n \n2.71\n \n0.29\n \n0.44\n \n0.58\n \n0.42\n \n3.54\n \n26.67\n \n25.07\n \n17.41\n \n0.92\n \n0.32\n \n16.81\n \n3.60\n \n-\n \n1.82\n \n0.58\n \n1.25\n \n3.85\n \n28.83\n \n27.91\n \n19.82\n \n10\nDelta\n10.98\n \n2.24\n \n42.74\n \n51.49\n \n15.77\n \n1.52\n \n16.74\n \n3.80\n \n91.56\n \n89.32\n \n13.82\n \n2.03\n \n44.56\n \n56.35\n \n10.79\n \n4.09\n \n73.26\n \n71.23\n \n17.05\n \n9.51\n \n80.23\n \n87.77\n \n2.92\n \n0.31\n \n0.47\n \n0.62\n \n0.45\n \n4.99\n \n107.05\n \n97.54\n \n18.75\n \n7.81\n \n95.47\n \n106.40\n \n3.88\n \n-\n \n1.96\n \n0.62\n \n1.35\n \n4.72\n \n126.74\n \n118.92\n \n20.01\n \n11\nEbonyi\n9.01\n \n0.22\n \n-\n \n8.78\n \n2.15\n \n0.21\n \n2.20\n \n2.63\n \n16.20\n \n15.97\n \n11.33\n \n3.50\n \n-\n \n7.84\n \n1.60\n \n2.90\n \n15.83\n \n12.34\n \n13.98\n \n3.65\n \n-\n \n10.34\n \n1.92\n \n0.25\n \n0.39\n \n0.52\n \n0.37\n \n3.34\n \n20.77\n \n17.13\n \n15.37\n \n2.93\n \n-\n \n12.45\n \n3.18\n \n-\n \n1.60\n \n0.52\n \n1.11\n \n3.54\n \n25.33\n \n22.40\n \n17.63\n \n12\nEdo\n10.25\n \n0.96\n \n3.15\n \n12.45\n \n3.42\n \n0.33\n \n3.54\n \n3.22\n \n23.91\n \n22.96\n \n12.90\n \n0.96\n \n3.88\n \n15.82\n \n2.65\n \n3.38\n \n22.81\n \n21.85\n \n15.92\n \n3.98\n \n6.90\n \n18.84\n \n3.20\n \n0.29\n \n0.44\n \n0.61\n \n0.42\n \n4.01\n \n31.79\n \n27.81\n \n17.50\n \n3.49\n \n9.35\n \n23.36\n \n3.62\n \n-\n \n1.83\n \n0.61\n \n1.26\n \n4.14\n \n38.31\n \n34.82\n \n18.43\n \n13\nEkiti\n9.08\n \n0.18\n \n-\n \n8.90\n \n2.17\n \n0.21\n \n2.22\n \n2.65\n \n16.33\n \n16.15\n \n11.43\n \n0.14\n \n-\n \n11.29\n \n1.62\n \n2.89\n \n15.94\n \n15.79\n \n14.11\n \n2.94\n \n-\n \n11.17\n \n2.42\n \n0.26\n \n0.39\n \n0.52\n \n0.37\n \n3.35\n \n21.41\n \n18.47\n \n15.51\n \n2.22\n \n-\n \n13.29\n \n3.21\n \n-\n \n1.62\n \n0.52\n \n1.12\n \n3.62\n \n25.59\n \n23.37\n \n17.62\n \n14\nEnugu\n10.25\n \n0.47\n \n-\n \n9.78\n \n2.44\n \n0.24\n \n2.50\n \n2.95\n \n18.39\n \n17.91\n \n12.90\n \n0.17\n \n-\n \n12.73\n \n1.82\n \n3.23\n \n17.95\n \n17.78\n \n15.91\n \n0.62\n \n-\n \n15.30\n \n2.73\n \n0.29\n \n0.44\n \n0.57\n \n0.42\n \n3.72\n \n24.08\n \n23.47\n \n17.50\n \n0.08\n \n-\n \n17.42\n \n3.62\n \n-\n \n1.83\n \n0.57\n \n1.26\n \n3.98\n \n28.75\n \n28.68\n \n19.82\n \n15\nGombe\n9.64\n \n0.66\n \n-\n \n8.97\n \n2.30\n \n0.22\n \n2.35\n \n2.68\n \n17.18\n \n16.52\n \n12.13\n \n0.42\n \n-\n \n11.70\n \n1.71\n \n2.90\n \n16.74\n \n16.31\n \n14.96\n \n3.14\n \n-\n \n11.82\n \n2.30\n \n0.27\n \n0.42\n \n0.53\n \n0.39\n \n3.35\n \n22.22\n \n19.07\n \n16.45\n \n2.43\n \n-\n \n14.01\n \n3.41\n \n-\n \n1.72\n \n0.53\n \n1.18\n \n3.58\n \n26.86\n \n24.43\n \n18.56\n \n16\nImo\n10.94\n \n2.76\n \n2.69\n \n10.87\n \n3.44\n \n0.33\n \n3.56\n \n3.11\n \n24.07\n \n21.31\n \n13.77\n \n3.12\n \n2.51\n \n13.16\n \n2.36\n \n3.42\n \n22.06\n \n18.95\n \n16.99\n \n2.75\n \n4.04\n \n18.28\n \n3.17\n \n0.31\n \n0.47\n \n0.61\n \n0.45\n \n3.93\n \n29.97\n \n27.22\n \n18.68\n \n2.22\n \n5.09\n \n21.56\n \n3.87\n \n-\n \n1.95\n \n0.61\n \n1.34\n \n4.27\n \n35.81\n \n33.59\n \n20.49\n \n17\nJigawa\n12.02\n \n0.82\n \n-\n \n11.20\n \n2.87\n \n0.28\n \n2.94\n \n3.28\n \n21.38\n \n20.56\n \n15.13\n \n0.15\n \n-\n \n14.98\n \n2.14\n \n3.63\n \n20.90\n \n20.75\n \n18.66\n \n1.04\n \n-\n \n17.63\n \n3.20\n \n0.34\n \n0.52\n \n0.67\n \n0.49\n \n4.10\n \n27.98\n \n26.95\n \n20.52\n \n0.36\n \n-\n \n20.16\n \n4.25\n \n-\n \n2.14\n \n0.67\n \n1.48\n \n4.47\n \n33.53\n \n33.17\n \n22.04\n \n18\nKaduna\n13.70\n \n0.87\n \n-\n \n12.83\n \n3.27\n \n0.31\n \n3.35\n \n3.86\n \n24.49\n \n23.62\n \n17.24\n \n1.81\n \n-\n \n15.43\n \n2.44\n \n4.20\n \n23.87\n \n22.07\n \n21.27\n \n1.82\n \n-\n \n19.45\n \n3.64\n \n0.39\n \n0.59\n \n0.75\n \n0.56\n \n4.97\n \n32.18\n \n30.36\n \n23.38\n \n1.94\n \n-\n \n21.45\n \n4.84\n \n-\n \n2.44\n \n0.75\n \n1.68\n \n5.17\n \n38.27\n \n36.33\n \n25.82\n \n19\nKano\n17.17\n \n0.52\n \n-\n \n16.65\n \n4.09\n \n0.39\n \n4.20\n \n5.32\n \n31.18\n \n30.66\n \n21.61\n \n0.44\n \n-\n \n21.17\n \n3.05\n \n5.62\n \n30.28\n \n29.84\n \n26.66\n \n1.95\n \n-\n \n24.71\n \n4.57\n \n0.48\n \n0.74\n \n0.92\n \n0.70\n \n6.47\n \n40.54\n \n38.59\n \n29.31\n \n0.58\n \n-\n \n28.73\n \n6.07\n \n-\n \n3.06\n \n0.92\n \n2.11\n \n6.92\n \n48.38\n \n47.81\n \n31.26\n \n20\nKatsina\n13.06\n \n0.77\n \n-\n \n12.29\n \n3.11\n \n0.30\n \n3.19\n \n3.72\n \n23.38\n \n22.62\n \n16.43\n \n0.67\n \n-\n \n15.76\n \n2.32\n \n4.03\n \n22.78\n \n22.11\n \n20.27\n \n0.22\n \n-\n \n20.05\n \n3.47\n \n0.37\n \n0.56\n \n0.72\n \n0.53\n \n4.63\n \n30.56\n \n30.34\n \n22.29\n \n0.53\n \n-\n \n21.76\n \n4.62\n \n-\n \n2.33\n \n0.72\n \n1.60\n \n4.92\n \n36.47\n \n35.94\n \n24.22\n \n21\nKebbi\n10.92\n \n1.58\n \n-\n \n9.34\n \n2.60\n \n0.25\n \n2.67\n \n2.94\n \n19.39\n \n17.80\n \n13.74\n \n0.24\n \n-\n \n13.51\n \n1.94\n \n3.21\n \n18.89\n \n18.66\n \n16.96\n \n2.02\n \n-\n \n14.93\n \n2.91\n \n0.31\n \n0.47\n \n0.60\n \n0.45\n \n3.73\n \n25.41\n \n23.39\n \n18.64\n \n0.21\n \n-\n \n18.43\n \n3.86\n \n-\n \n1.95\n \n0.60\n \n1.34\n \n3.98\n \n30.37\n \n30.15\n \n20.81\n \n22\nKogi\n10.89\n \n0.77\n \n-\n \n10.13\n \n2.60\n \n0.25\n \n2.66\n \n3.14\n \n19.54\n \n18.78\n \n13.71\n \n0.91\n \n-\n \n12.80\n \n1.94\n \n3.30\n \n18.95\n \n18.04\n \n16.92\n \n1.21\n \n-\n \n15.71\n \n2.90\n \n0.31\n \n0.47\n \n0.60\n \n0.45\n \n3.82\n \n25.46\n \n24.25\n \n18.60\n \n0.09\n \n-\n \n18.51\n \n3.85\n \n-\n \n1.94\n \n0.60\n \n1.34\n \n3.97\n \n30.29\n \n30.20\n \n21.78\n \n23\nKwara\n9.93\n \n0.19\n \n-\n \n9.74\n \n2.37\n \n0.23\n \n2.43\n \n2.71\n \n17.66\n \n17.48\n \n12.49\n \n0.10\n \n-\n \n12.39\n \n1.77\n \n2.93\n \n17.19\n \n17.09\n \n15.41\n \n0.09\n \n-\n \n15.32\n \n2.64\n \n0.28\n \n0.43\n \n0.55\n \n0.41\n \n3.35\n \n23.07\n \n22.98\n \n16.95\n \n0.09\n \n-\n \n16.85\n \n3.51\n \n-\n \n1.77\n \n0.55\n \n1.22\n \n3.58\n \n27.57\n \n27.48\n \n17.54\n \n24\nLagos\n15.51\n \n3.75\n \n-\n \n11.76\n \n3.70\n \n0.36\n \n3.79\n \n23.74\n \n47.09\n \n43.34\n \n19.52\n \n3.63\n \n-\n \n15.89\n \n2.76\n \n26.34\n \n48.62\n \n44.99\n \n24.08\n \n3.77\n \n-\n \n20.31\n \n4.13\n \n0.44\n \n0.67\n \n0.87\n \n0.63\n \n30.01\n \n60.82\n \n57.06\n \n26.47\n \n8.93\n \n-\n \n17.54\n \n5.48\n \n-\n \n2.76\n \n0.87\n \n1.90\n \n32.69\n \n70.18\n \n61.24\n \n26.40\n \n25\nNasarawa\n9.30\n \n0.63\n \n-\n \n8.67\n \n2.22\n \n0.21\n \n2.27\n \n2.50\n \n16.50\n \n15.87\n \n11.71\n \n1.48\n \n-\n \n10.22\n \n1.65\n \n2.69\n \n16.05\n \n14.56\n \n14.44\n \n2.17\n \n-\n \n12.27\n \n2.47\n \n0.26\n \n0.40\n \n0.52\n \n0.38\n \n3.07\n \n21.55\n \n19.38\n \n15.88\n \n1.79\n \n-\n \n14.09\n \n3.29\n \n-\n \n1.66\n \n0.52\n \n1.14\n \n3.34\n \n25.83\n \n24.04\n \n18.17\n \n26\nNiger\n12.70\n \n1.57\n \n-\n \n11.14\n \n3.03\n \n0.29\n \n3.10\n \n3.15\n \n22.28\n \n20.71\n \n15.99\n \n2.17\n \n-\n \n13.82\n \n2.26\n \n3.39\n \n21.63\n \n19.46\n \n19.73\n \n2.99\n \n-\n \n16.74\n \n3.38\n \n0.36\n \n0.55\n \n0.70\n \n0.52\n \n3.91\n \n29.13\n \n26.15\n \n21.69\n \n1.88\n \n-\n \n19.81\n \n4.49\n \n-\n \n2.26\n \n0.70\n \n1.56\n \n4.19\n \n34.89\n \n33.01\n \n23.34\n \n27\nOgun\n10.62\n \n0.21\n \n-\n \n10.41\n \n2.53\n \n0.24\n \n2.59\n \n3.08\n \n19.07\n \n18.86\n \n13.36\n \n0.26\n \n-\n \n13.10\n \n1.89\n \n3.39\n \n18.64\n \n18.39\n \n16.49\n \n0.13\n \n-\n \n16.36\n \n2.82\n \n0.30\n \n0.46\n \n0.59\n \n0.43\n \n3.95\n \n25.04\n \n24.91\n \n18.12\n \n0.11\n \n-\n \n18.01\n \n3.75\n \n-\n \n1.89\n \n0.59\n \n1.30\n \n4.20\n \n29.86\n \n29.74\n \n18.31\n \n28\nOndo\n10.18\n \n0.42\n \n9.83\n \n19.59\n \n5.45\n \n0.52\n \n5.72\n \n3.05\n \n34.76\n \n34.34\n \n12.81\n \n0.78\n \n7.52\n \n19.55\n \n3.25\n \n3.27\n \n26.85\n \n26.06\n \n15.81\n \n3.32\n \n13.50\n \n25.99\n \n2.71\n \n0.29\n \n0.44\n \n0.58\n \n0.42\n \n3.88\n \n37.62\n \n34.30\n \n17.38\n \n2.71\n \n18.02\n \n32.69\n \n3.60\n \n-\n \n1.81\n \n0.58\n \n1.25\n \n4.03\n \n46.67\n \n43.96\n \n18.34\n \n29\nOsun\n10.07\n \n0.48\n \n-\n \n9.59\n \n2.40\n \n0.23\n \n2.46\n \n3.00\n \n18.17\n \n17.69\n \n12.67\n \n0.26\n \n-\n \n12.41\n \n1.79\n \n3.25\n \n17.71\n \n17.45\n \n15.64\n \n0.36\n \n-\n \n15.28\n \n2.68\n \n0.28\n \n0.43\n \n0.56\n \n0.41\n \n3.73\n \n23.74\n \n23.38\n \n17.19\n \n2.69\n \n-\n \n14.50\n \n3.56\n \n-\n \n1.79\n \n0.56\n \n1.24\n \n4.01\n \n28.36\n \n25.67\n \n17.97\n \n30\nOyo\n12.69\n \n1.46\n \n-\n \n11.23\n \n3.03\n \n0.29\n \n3.10\n \n3.84\n \n22.95\n \n21.49\n \n15.97\n \n1.09\n \n-\n \n14.88\n \n2.26\n \n4.17\n \n22.39\n \n21.30\n \n19.70\n \n0.64\n \n-\n \n19.05\n \n3.38\n \n0.36\n \n0.55\n \n0.70\n \n0.52\n \n4.60\n \n29.80\n \n29.16\n \n21.66\n \n0.38\n \n-\n \n21.28\n \n4.48\n \n-\n \n2.26\n \n0.70\n \n1.56\n \n4.97\n \n35.64\n \n35.25\n \n22.10\n \n31\nPlateau\n10.65\n \n1.00\n \n-\n \n9.65\n \n2.54\n \n0.24\n \n2.60\n \n2.94\n \n18.99\n \n17.98\n \n13.41\n \n0.60\n \n-\n \n12.80\n \n1.89\n \n3.18\n \n18.49\n \n17.88\n \n16.54\n \n0.40\n \n2.20\n \n18.34\n \n2.83\n \n0.30\n \n0.46\n \n0.60\n \n0.44\n \n3.71\n \n27.08\n \n26.68\n \n18.19\n \n0.48\n \n6.60\n \n24.31\n \n3.77\n \n-\n \n1.90\n \n0.60\n \n1.31\n \n4.08\n \n36.44\n \n35.96\n \n20.58\n \n32\nRivers\n11.91\n \n0.62\n \n44.47\n \n55.76\n \n16.52\n \n1.59\n \n17.54\n \n5.42\n \n97.45\n \n96.83\n \n14.99\n \n2.16\n \n55.98\n \n68.81\n \n12.03\n \n5.46\n \n88.47\n \n86.30\n \n18.49\n \n1.58\n \n88.99\n \n105.89\n \n3.17\n \n0.33\n \n0.51\n \n0.66\n \n0.49\n \n5.74\n \n118.38\n \n116.79\n \n20.33\n \n0.80\n \n104.06\n \n123.59\n \n4.21\n \n-\n \n2.12\n \n0.66\n \n1.46\n \n7.01\n \n139.87\n \n139.06\n \n21.25\n \n33\nSokoto\n11.33\n \n0.15\n \n-\n \n11.18\n \n2.70\n \n0.26\n \n2.77\n \n3.05\n \n20.11\n \n19.96\n \n14.25\n \n0.14\n \n-\n \n14.12\n \n2.01\n \n3.41\n \n19.68\n \n19.54\n \n17.59\n \n1.03\n \n-\n \n16.56\n \n3.01\n \n0.32\n \n0.49\n \n0.63\n \n0.46\n \n3.88\n \n26.39\n \n25.36\n \n19.34\n \n0.26\n \n-\n \n19.08\n \n4.00\n \n-\n \n2.02\n \n0.63\n \n1.39\n \n4.19\n \n31.57\n \n31.31\n \n21.72\n \n34\nTaraba\n10.73\n \n0.07\n \n-\n \n10.66\n \n2.56\n \n0.25\n \n2.62\n \n2.63\n \n18.78\n \n18.71\n \n13.50\n \n0.05\n \n-\n \n13.45\n \n1.91\n \n2.86\n \n18.27\n \n18.22\n \n16.66\n \n0.03\n \n-\n \n16.63\n \n2.85\n \n0.30\n \n0.46\n \n0.59\n \n0.44\n \n3.33\n \n24.64\n \n24.61\n \n18.31\n \n0.29\n \n-\n \n18.03\n \n3.79\n \n-\n \n1.91\n \n0.59\n \n1.32\n \n3.54\n \n29.46\n \n29.17\n \n18.98\n \n35\nYobe\n10.65\n \n0.22\n \n-\n \n10.43\n \n2.54\n \n0.24\n \n2.60\n \n2.66\n \n18.69\n \n18.47\n \n13.40\n \n0.23\n \n-\n \n13.17\n \n1.89\n \n2.95\n \n18.24\n \n18.01\n \n16.53\n \n0.57\n \n-\n \n15.96\n \n2.83\n \n0.30\n \n0.46\n \n0.58\n \n0.44\n \n3.37\n \n24.51\n \n23.94\n \n18.18\n \n0.11\n \n-\n \n18.07\n \n3.76\n \n-\n \n1.90\n \n0.58\n \n1.31\n \n3.57\n \n29.29\n \n29.18\n \n19.57\n \n36\nZamfara\n10.68\n \n0.72\n \n-\n \n9.96\n \n2.55\n \n0.25\n \n2.61\n \n2.90\n \n18.98\n \n18.26\n \n13.44\n \n0.93\n \n-\n \n12.51\n \n1.90\n \n3.12\n \n18.46\n \n17.53\n \n16.58\n \n3.59\n \n-\n \n12.99\n \n2.84\n \n0.30\n \n0.46\n \n0.60\n \n0.44\n \n3.70\n \n24.91\n \n21.32\n \n18.23\n \n0.37\n \n-\n \n17.86\n \n3.78\n \n-\n \n1.90\n \n0.60\n \n1.31\n \n4.01\n \n29.83\n \n29.46\n \n19.61\n \n37\nDisputed Deriv.\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n0.05\n \n0.05\n \n-\n \n0.05\n \n0.05\n \n-\n \n-\n \n0.05\n \n0.05\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n0.05\n \n0.05\n \n-\n \nRivers/Akwa Disputed Fund\n-\n \n-\n \n-\n \n2.73\n \n2.73\n \n1.24\n \n3.97\n \n3.97\n \n-\n \n-\n \n0.01\n \n0.01\n \n-\n \n0.01\n \n0.01\n \n-\n \n-\n \n0.01\n \n0.01\n \n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n0.01\n \n0.01\n \n-\n \n403.74\n \n37.29\n \n174.99\n \n541.43\n \n150.14\n \n14.45\n \n156.22\n \n135.54\n \n1,035.08\n \n997.79\n \n508.08\n \n45.35\n \n219.90\n \n682.63\n \n111.95\n \n-\n \n-\n \n147.41\n \n987.33\n \n941.99\n \n626.86\n \n86.33\n \n369.95\n \n910.48\n \n107.40\n \n11.35\n \n17.44\n \n22.45\n \n16.53\n \n169.32\n \n1,341.30\n \n1,254.97\n \n689.20\n \n67.60\n \n461.36\n \n1,082.96\n \n142.71\n \n-\n \n71.94\n \n22.45\n \n49.58\n \n182.00\n \n1,619.25\n \n1,551.65\n \n747.23\n \n2/ Includes the share of Oil-producing states from the excess crude\nSource: Federation Account Allocation, Federal Ministry of Finance\n1/ Provisional\nTOTAL\nS/N\nStates\nFirst Half 2010\nFirst Half 2011\nFirst Half 2012\nFirst Half 2013\n \n \n \nTable 25 \nAllocation to Local Governments from the Federation and VAT Pools Accounts \nFirst Half, 2014 \n (Naira Billion) \nFed. Acct.\nExcess \nCrude\nBudget \nAugmentat\nion\nExchange \nGain\nNNPC \nRefunds\nSURE-P\nVAT\nTotal\nFed. Acct.\nExcess \nCrude\nBudget \nAugmentat\nion\nExchange \nGain\nNNPC \nRefunds\nSURE-P\nVAT\nTotal\nFed. Acct.\nExcess \nCrude\nBudget \nAugmentat\nion\nExchange \nGain\nNNPC \nRefunds\nSURE-P\nVAT\nTotal\nFed. Acct.\nExcess \nCrude\nBudget \nAugmentat\nion\nExchange \nGain\nNNPC \nRefunds\nSURE-P\nVAT\nTotal\nFed. Acct.\nExcess \nCrude\nBudget \nAugmentat\nion\nExchange \nGain\nNNPC \nRefunds\nSURE-P\nVAT\nTotal\n1 Abia\n6.75\n \n1.65\n \n1.55\n \n0.15\n \n-\n \n-\n \n1.66\n \n11.77\n \n8.17\n \n-\n \n1.15\n \n-\n \n-\n \n1.79\n \n11.11\n \n10.08\n \n0.28\n \n1.73\n \n0.18\n \n0.36\n \n0.27\n \n2.07\n \n14.96\n \n11.08\n \n1.15\n \n2.28\n \n-\n \n0.36\n \n0.80\n \n2.24\n \n17.90\n \n11.96\n \n-\n \n-\n \n-\n \n0.24\n \n0.80\n \n2.42\n \n15.41\n \n2 Adamawa\n8.09\n \n2.13\n \n1.99\n \n0.19\n \n-\n \n-\n \n2.00\n \n14.40\n \n10.51\n \n-\n \n1.49\n \n-\n \n-\n \n2.16\n \n14.16\n \n12.97\n \n0.36\n \n2.22\n \n0.23\n \n0.48\n \n0.34\n \n2.47\n \n19.08\n \n14.26\n \n1.45\n \n2.88\n \n-\n \n0.48\n \n1.03\n \n2.67\n \n22.76\n \n15.08\n \n-\n \n-\n \n-\n \n0.32\n \n1.03\n \n2.84\n \n19.27\n \n3 Akwa-Ibom\n11.02\n \n2.81\n \n2.63\n \n0.25\n \n-\n \n-\n \n2.98\n \n19.68\n \n13.86\n \n-\n \n1.96\n \n-\n \n-\n \n3.39\n \n19.21\n \n17.10\n \n0.48\n \n2.93\n \n0.31\n \n0.58\n \n0.45\n \n3.74\n \n25.60\n \n18.80\n \n1.93\n \n3.84\n \n-\n \n0.58\n \n1.35\n \n4.00\n \n30.51\n \n20.09\n \n-\n \n-\n \n-\n \n0.39\n \n1.35\n \n3.92\n \n25.75\n \n4 Anambra\n8.28\n \n2.11\n \n1.97\n \n0.19\n \n-\n \n-\n \n2.21\n \n14.77\n \n10.42\n \n-\n \n1.47\n \n-\n \n-\n \n2.41\n \n14.30\n \n12.86\n \n0.36\n \n2.20\n \n0.23\n \n0.50\n \n0.34\n \n2.76\n \n19.25\n \n14.13\n \n1.46\n \n2.90\n \n-\n \n0.50\n \n1.02\n \n2.96\n \n22.97\n \n15.16\n \n-\n \n-\n \n-\n \n0.33\n \n1.02\n \n3.23\n \n19.74\n \n5 Bauchi\n9.58\n \n2.44\n \n2.28\n \n0.22\n \n-\n \n-\n \n2.22\n \n16.74\n \n12.05\n \n-\n \n1.70\n \n-\n \n-\n \n2.41\n \n16.17\n \n14.87\n \n0.41\n \n2.55\n \n0.27\n \n0.49\n \n0.39\n \n2.75\n \n21.74\n \n16.35\n \n1.66\n \n3.29\n \n-\n \n0.49\n \n1.18\n \n2.98\n \n25.94\n \n17.21\n \n-\n \n-\n \n-\n \n0.33\n \n1.18\n \n3.21\n \n21.93\n \n6 Bayelsa\n3.52\n \n0.90\n \n0.84\n \n0.08\n \n-\n \n-\n \n0.91\n \n6.26\n \n4.43\n \n-\n \n0.63\n \n-\n \n-\n \n1.02\n \n6.08\n \n5.47\n \n0.15\n \n0.94\n \n0.10\n \n0.19\n \n0.14\n \n1.22\n \n8.22\n \n6.01\n \n0.67\n \n1.34\n \n-\n \n0.19\n \n0.43\n \n1.44\n \n10.09\n \n7.01\n \n-\n \n-\n \n-\n \n0.13\n \n0.43\n \n1.47\n \n9.04\n \n7 Benue\n9.74\n \n2.48\n \n2.32\n \n0.22\n \n-\n \n-\n \n2.30\n \n17.07\n \n12.25\n \n-\n \n1.73\n \n-\n \n-\n \n2.51\n \n16.50\n \n15.12\n \n0.42\n \n2.59\n \n0.27\n \n0.55\n \n0.40\n \n2.94\n \n22.30\n \n16.62\n \n1.80\n \n3.58\n \n-\n \n0.55\n \n1.20\n \n3.09\n \n26.84\n \n18.73\n \n-\n \n-\n \n-\n \n0.37\n \n1.20\n \n3.35\n \n23.65\n \n8 Borno\n11.19\n \n2.85\n \n2.67\n \n0.26\n \n-\n \n-\n \n2.58\n \n19.55\n \n14.08\n \n-\n \n1.99\n \n-\n \n-\n \n2.79\n \n18.86\n \n17.38\n \n0.48\n \n2.98\n \n0.31\n \n0.61\n \n0.46\n \n3.23\n \n25.44\n \n19.10\n \n1.96\n \n3.88\n \n-\n \n0.61\n \n1.37\n \n3.41\n \n30.33\n \n20.34\n \n-\n \n-\n \n-\n \n0.40\n \n1.37\n \n3.68\n \n25.79\n \n9 Cross-River\n6.95\n \n1.77\n \n1.66\n \n0.16\n \n-\n \n-\n \n1.75\n \n12.29\n \n8.75\n \n-\n \n1.24\n \n-\n \n-\n \n1.88\n \n11.87\n \n10.80\n \n0.30\n \n1.85\n \n0.20\n \n0.40\n \n0.28\n \n2.19\n \n16.02\n \n11.87\n \n1.26\n \n2.50\n \n-\n \n0.40\n \n0.85\n \n2.37\n \n19.27\n \n13.11\n \n-\n \n-\n \n-\n \n0.27\n \n0.85\n \n2.58\n \n16.81\n \n10 Delta\n9.19\n \n2.34\n \n2.19\n \n0.21\n \n-\n \n-\n \n2.78\n \n16.72\n \n11.57\n \n-\n \n1.63\n \n-\n \n-\n \n2.98\n \n16.18\n \n14.27\n \n0.40\n \n2.45\n \n0.26\n \n0.53\n \n0.38\n \n3.61\n \n21.90\n \n15.69\n \n1.62\n \n3.21\n \n-\n \n0.53\n \n1.13\n \n3.50\n \n25.68\n \n16.80\n \n-\n \n-\n \n-\n \n0.36\n \n1.13\n \n3.66\n \n21.95\n \n11 Ebonyi\n4.95\n \n1.26\n \n1.18\n \n0.11\n \n-\n \n-\n \n1.30\n \n8.82\n \n6.24\n \n-\n \n0.88\n \n-\n \n-\n \n1.44\n \n8.55\n \n7.69\n \n0.21\n \n1.32\n \n0.14\n \n0.28\n \n0.20\n \n1.65\n \n11.50\n \n8.46\n \n0.93\n \n1.85\n \n-\n \n0.28\n \n0.61\n \n1.75\n \n13.88\n \n9.70\n \n-\n \n-\n \n-\n \n0.18\n \n0.61\n \n1.87\n \n12.36\n \n12 Edo\n6.96\n \n1.77\n \n1.66\n \n0.16\n \n-\n \n-\n \n1.98\n \n12.54\n \n8.76\n \n-\n \n1.24\n \n-\n \n-\n \n2.08\n \n12.08\n \n10.81\n \n0.30\n \n1.85\n \n0.20\n \n0.43\n \n0.28\n \n2.47\n \n16.34\n \n11.88\n \n1.24\n \n2.45\n \n-\n \n0.43\n \n0.85\n \n2.55\n \n19.41\n \n12.85\n \n-\n \n-\n \n-\n \n0.29\n \n0.85\n \n2.67\n \n16.67\n \n13 Ekiti\n5.66\n \n1.44\n \n1.35\n \n0.13\n \n-\n \n-\n \n1.51\n \n10.09\n \n7.13\n \n-\n \n1.01\n \n-\n \n-\n \n1.64\n \n9.77\n \n8.79\n \n0.24\n \n1.51\n \n0.16\n \n0.32\n \n0.23\n \n1.90\n \n13.15\n \n9.67\n \n0.98\n \n1.95\n \n-\n \n0.32\n \n0.70\n \n2.05\n \n15.67\n \n10.21\n \n-\n \n-\n \n-\n \n0.21\n \n0.70\n \n2.15\n \n13.26\n \n14 Enugu\n6.71\n \n1.71\n \n1.60\n \n0.15\n \n-\n \n-\n \n1.77\n \n11.94\n \n8.44\n \n-\n \n1.19\n \n-\n \n-\n \n1.93\n \n11.57\n \n10.42\n \n0.29\n \n1.78\n \n0.19\n \n0.37\n \n0.27\n \n2.23\n \n15.55\n \n11.45\n \n1.26\n \n2.49\n \n-\n \n0.37\n \n0.82\n \n2.38\n \n18.78\n \n13.06\n \n-\n \n-\n \n-\n \n0.24\n \n0.82\n \n2.56\n \n16.69\n \n15 Gombe\n4.90\n \n1.25\n \n1.17\n \n0.11\n \n-\n \n-\n \n1.21\n \n8.64\n \n6.16\n \n-\n \n0.87\n \n-\n \n-\n \n1.31\n \n8.34\n \n7.60\n \n0.21\n \n1.30\n \n0.14\n \n0.26\n \n0.20\n \n1.51\n \n11.23\n \n8.36\n \n0.86\n \n1.71\n \n-\n \n0.26\n \n0.60\n \n1.62\n \n13.41\n \n8.95\n \n-\n \n-\n \n-\n \n0.17\n \n0.60\n \n1.69\n \n11.41\n \n16 Imo\n9.71\n \n2.48\n \n2.32\n \n0.22\n \n-\n \n-\n \n2.50\n \n17.23\n \n12.22\n \n-\n \n1.73\n \n-\n \n-\n \n2.74\n \n16.69\n \n15.08\n \n0.42\n \n2.58\n \n0.27\n \n0.52\n \n0.40\n \n3.15\n \n22.42\n \n16.58\n \n1.69\n \n3.34\n \n-\n \n0.52\n \n1.19\n \n3.40\n \n26.72\n \n17.50\n \n-\n \n-\n \n-\n \n0.35\n \n1.19\n \n3.60\n \n22.64\n \n17 Jigawa\n10.19\n \n2.60\n \n2.43\n \n0.23\n \n-\n \n-\n \n2.61\n \n18.06\n \n12.82\n \n-\n \n1.81\n \n-\n \n-\n \n2.87\n \n17.51\n \n15.82\n \n0.44\n \n2.71\n \n0.29\n \n0.56\n \n0.42\n \n3.26\n \n23.49\n \n17.40\n \n1.77\n \n3.51\n \n-\n \n0.56\n \n1.25\n \n3.54\n \n28.03\n \n18.39\n \n-\n \n-\n \n-\n \n0.37\n \n1.25\n \n3.87\n \n23.88\n \n18 Kaduna\n10.93\n \n2.79\n \n2.61\n \n0.25\n \n-\n \n-\n \n2.76\n \n19.33\n \n13.76\n \n-\n \n1.94\n \n-\n \n-\n \n3.00\n \n18.69\n \n16.97\n \n0.47\n \n2.91\n \n0.31\n \n0.61\n \n0.45\n \n3.53\n \n25.25\n \n18.66\n \n1.99\n \n3.95\n \n-\n \n0.61\n \n1.34\n \n3.69\n \n30.24\n \n20.68\n \n-\n \n-\n \n-\n \n0.41\n \n1.34\n \n3.96\n \n26.39\n \n19 Kano\n17.94\n \n4.57\n \n4.28\n \n0.41\n \n-\n \n-\n \n5.01\n \n32.21\n \n22.57\n \n-\n \n3.19\n \n-\n \n-\n \n5.34\n \n31.10\n \n27.85\n \n0.77\n \n4.77\n \n0.50\n \n0.97\n \n0.73\n \n6.14\n \n41.75\n \n30.62\n \n3.17\n \n6.29\n \n-\n \n0.97\n \n2.20\n \n6.58\n \n49.83\n \n32.92\n \n-\n \n-\n \n-\n \n0.64\n \n2.20\n \n7.07\n \n42.84\n \n20 Katsina\n13.12\n \n3.34\n \n3.13\n \n0.30\n \n-\n \n-\n \n3.34\n \n23.23\n \n16.50\n \n-\n \n2.33\n \n-\n \n-\n \n3.62\n \n22.46\n \n20.36\n \n0.57\n \n3.49\n \n0.37\n \n0.73\n \n0.54\n \n4.16\n \n30.21\n \n22.39\n \n2.41\n \n4.79\n \n-\n \n0.73\n \n1.61\n \n4.44\n \n36.37\n \n25.06\n \n-\n \n-\n \n-\n \n0.48\n \n1.61\n \n4.82\n \n31.98\n \n21 Kebbi\n8.15\n \n2.08\n \n1.94\n \n0.19\n \n-\n \n-\n \n2.01\n \n14.36\n \n10.25\n \n-\n \n1.45\n \n-\n \n-\n \n2.19\n \n13.89\n \n12.65\n \n0.35\n \n2.17\n \n0.23\n \n0.45\n \n0.33\n \n2.54\n \n18.72\n \n13.91\n \n1.52\n \n3.02\n \n-\n \n0.45\n \n1.00\n \n2.71\n \n22.61\n \n15.82\n \n-\n \n-\n \n-\n \n0.30\n \n1.00\n \n2.96\n \n20.08\n \n22 Kogi\n8.44\n \n2.15\n \n2.01\n \n0.19\n \n-\n \n-\n \n2.13\n \n14.93\n \n10.63\n \n-\n \n1.50\n \n-\n \n-\n \n2.24\n \n14.37\n \n13.11\n \n0.36\n \n2.25\n \n0.24\n \n0.45\n \n0.35\n \n2.59\n \n19.34\n \n14.41\n \n1.57\n \n3.12\n \n-\n \n0.45\n \n1.04\n \n2.71\n \n23.30\n \n16.35\n \n-\n \n-\n \n-\n \n0.30\n \n1.04\n \n2.88\n \n20.56\n \n23 Kwara\n6.48\n \n1.65\n \n1.55\n \n0.15\n \n-\n \n-\n \n1.54\n \n11.37\n \n8.16\n \n-\n \n1.15\n \n-\n \n-\n \n1.66\n \n10.98\n \n10.07\n \n0.28\n \n1.73\n \n0.18\n \n0.37\n \n0.27\n \n1.90\n \n14.79\n \n11.07\n \n1.11\n \n2.21\n \n-\n \n0.37\n \n0.80\n \n2.03\n \n17.59\n \n11.57\n \n-\n \n-\n \n-\n \n0.25\n \n0.80\n \n2.17\n \n14.78\n \n24 Lagos\n10.90\n \n2.78\n \n2.60\n \n0.25\n \n-\n \n-\n \n14.22\n \n30.75\n \n13.71\n \n-\n \n1.94\n \n-\n \n-\n \n15.40\n \n31.05\n \n16.92\n \n0.47\n \n2.90\n \n0.31\n \n0.65\n \n0.45\n \n17.82\n \n39.51\n \n18.60\n \n1.90\n \n3.76\n \n-\n \n0.65\n \n1.34\n \n19.27\n \n45.51\n \n19.71\n \n-\n \n-\n \n-\n \n0.43\n \n1.34\n \n21.68\n \n43.16\n \n25 Nassarawa\n5.19\n \n1.32\n \n1.24\n \n0.12\n \n-\n \n-\n \n1.22\n \n9.08\n \n6.53\n \n-\n \n0.92\n \n-\n \n-\n \n1.30\n \n8.76\n \n8.06\n \n0.22\n \n1.38\n \n0.15\n \n0.29\n \n0.21\n \n1.49\n \n11.80\n \n8.86\n \n0.99\n \n1.97\n \n-\n \n0.29\n \n0.64\n \n1.63\n \n14.37\n \n10.32\n \n-\n \n-\n \n-\n \n0.19\n \n0.64\n \n1.75\n \n12.90\n \n26 Niger\n10.52\n \n2.68\n \n2.51\n \n0.24\n \n-\n \n-\n \n2.40\n \n18.34\n \n13.23\n \n-\n \n1.87\n \n-\n \n-\n \n2.59\n \n17.69\n \n16.33\n \n0.45\n \n2.80\n \n0.30\n \n0.58\n \n0.43\n \n2.98\n \n23.87\n \n17.95\n \n1.84\n \n3.65\n \n-\n \n0.58\n \n1.29\n \n3.20\n \n28.51\n \n19.10\n \n-\n \n-\n \n-\n \n0.39\n \n1.29\n \n3.44\n \n24.22\n \n27 Ogun\n7.78\n \n1.98\n \n1.86\n \n0.18\n \n-\n \n-\n \n2.05\n \n13.84\n \n9.79\n \n-\n \n1.38\n \n-\n \n-\n \n2.25\n \n13.42\n \n12.08\n \n0.34\n \n2.07\n \n0.22\n \n0.44\n \n0.32\n \n2.61\n \n18.08\n \n13.28\n \n1.31\n \n2.60\n \n-\n \n0.44\n \n0.96\n \n2.78\n \n21.37\n \n13.63\n \n-\n \n-\n \n-\n \n0.30\n \n0.96\n \n2.95\n \n17.83\n \n28 Ondo\n7.18\n \n1.83\n \n1.71\n \n0.16\n \n-\n \n-\n \n1.89\n \n12.79\n \n9.04\n \n-\n \n1.28\n \n-\n \n-\n \n2.03\n \n12.34\n \n11.15\n \n0.31\n \n1.91\n \n0.20\n \n0.40\n \n0.29\n \n2.41\n \n16.68\n \n12.26\n \n1.25\n \n2.49\n \n-\n \n0.40\n \n0.88\n \n2.50\n \n19.78\n \n13.02\n \n-\n \n-\n \n-\n \n0.27\n \n0.88\n \n2.66\n \n16.83\n \n29 Osun\n9.79\n \n2.50\n \n2.33\n \n0.22\n \n-\n \n-\n \n2.60\n \n17.44\n \n12.32\n \n-\n \n1.74\n \n-\n \n-\n \n2.82\n \n16.88\n \n15.20\n \n0.42\n \n2.60\n \n0.28\n \n0.58\n \n0.40\n \n3.24\n \n22.72\n \n16.71\n \n1.70\n \n3.37\n \n-\n \n0.58\n \n1.20\n \n3.48\n \n27.04\n \n17.63\n \n-\n \n-\n \n-\n \n0.39\n \n1.20\n \n3.79\n \n23.01\n \n30 Oyo\n12.52\n \n3.19\n \n2.99\n \n0.29\n \n-\n \n-\n \n3.35\n \n22.33\n \n15.75\n \n-\n \n2.23\n \n-\n \n-\n \n3.63\n \n21.60\n \n19.43\n \n0.54\n \n3.33\n \n0.35\n \n0.70\n \n0.51\n \n4.06\n \n28.93\n \n21.37\n \n2.14\n \n4.25\n \n-\n \n0.70\n \n1.54\n \n4.38\n \n34.37\n \n22.24\n \n-\n \n-\n \n-\n \n0.46\n \n1.54\n \n4.75\n \n28.99\n \n31 Plateau\n7.16\n \n1.83\n \n1.71\n \n0.16\n \n-\n \n-\n \n1.76\n \n12.63\n \n9.02\n \n-\n \n1.27\n \n-\n \n-\n \n1.91\n \n12.20\n \n11.12\n \n0.31\n \n1.91\n \n0.20\n \n0.39\n \n0.29\n \n2.22\n \n16.45\n \n12.23\n \n1.34\n \n2.66\n \n-\n \n0.39\n \n0.88\n \n2.44\n \n19.95\n \n13.94\n \n-\n \n-\n \n-\n \n0.26\n \n0.88\n \n2.57\n \n17.65\n \n32 Rivers\n9.38\n \n2.39\n \n2.24\n \n0.22\n \n-\n \n-\n \n3.64\n \n17.87\n \n11.81\n \n-\n \n1.67\n \n-\n \n-\n \n3.68\n \n17.15\n \n14.57\n \n0.41\n \n2.50\n \n0.26\n \n0.51\n \n0.38\n \n3.94\n \n22.57\n \n16.02\n \n1.66\n \n3.30\n \n-\n \n0.51\n \n1.15\n \n4.70\n \n27.34\n \n17.28\n \n-\n \n-\n \n-\n \n0.34\n \n1.15\n \n4.48\n \n23.25\n \n33 Sokoto\n8.99\n \n2.29\n \n2.14\n \n0.21\n \n-\n \n-\n \n2.21\n \n15.85\n \n11.32\n \n-\n \n1.60\n \n-\n \n-\n \n2.45\n \n15.37\n \n13.96\n \n0.39\n \n2.39\n \n0.25\n \n0.50\n \n0.37\n \n2.80\n \n20.67\n \n15.35\n \n1.68\n \n3.32\n \n-\n \n0.50\n \n1.10\n \n3.02\n \n24.98\n \n17.41\n \n-\n \n-\n \n-\n \n0.34\n \n1.10\n \n3.27\n \n22.12\n \n34 Taraba\n7.16\n \n1.83\n \n1.71\n \n0.16\n \n-\n \n-\n \n1.49\n \n12.34\n \n9.01\n \n-\n \n1.27\n \n-\n \n-\n \n1.62\n \n11.91\n \n11.12\n \n0.31\n \n1.90\n \n0.20\n \n0.39\n \n0.29\n \n1.89\n \n16.11\n \n12.22\n \n1.26\n \n2.49\n \n-\n \n0.39\n \n0.88\n \n2.00\n \n19.24\n \n13.05\n \n-\n \n-\n \n-\n \n0.26\n \n0.88\n \n2.15\n \n16.33\n \n35 Yobe\n6.94\n \n1.77\n \n1.66\n \n0.16\n \n-\n \n-\n \n1.57\n \n12.10\n \n8.74\n \n-\n \n1.23\n \n-\n \n-\n \n1.74\n \n11.71\n \n10.78\n \n0.30\n \n1.85\n \n0.20\n \n0.39\n \n0.28\n \n1.99\n \n15.78\n \n11.85\n \n1.26\n \n2.50\n \n-\n \n0.39\n \n0.85\n \n2.11\n \n18.97\n \n13.12\n \n-\n \n-\n \n-\n \n0.26\n \n0.85\n \n2.24\n \n16.47\n \n36 Zamfara\n6.52\n \n1.66\n \n1.55\n \n0.15\n \n-\n \n-\n \n1.55\n \n11.44\n \n8.20\n \n-\n \n1.16\n \n-\n \n-\n \n1.67\n \n11.03\n \n10.12\n \n0.28\n \n1.73\n \n0.18\n \n0.34\n \n0.27\n \n1.98\n \n14.91\n \n11.13\n \n1.14\n \n2.26\n \n-\n \n0.34\n \n0.80\n \n2.15\n \n17.83\n \n11.85\n \n-\n \n-\n \n-\n \n0.23\n \n0.80\n \n2.24\n \n15.12\n \n37 FCT Abuja\n2.77\n \n0.71\n \n0.66\n \n0.06\n \n-\n \n-\n \n3.89\n \n8.09\n \n3.49\n \n-\n \n0.49\n \n-\n \n-\n \n4.70\n \n8.68\n \n4.31\n \n0.12\n \n0.74\n \n0.08\n \n0.14\n \n0.11\n \n5.07\n \n10.56\n \n4.73\n \n0.50\n \n1.00\n \n-\n \n0.14\n \n0.34\n \n5.62\n \n12.34\n \n5.23\n \n-\n \n-\n \n-\n \n0.09\n \n0.34\n \n6.49\n \n12.16\n \n-\n \n-\n \n-\n \n311.26\n \n79.36\n \n74.24\n \n7.15\n \n-\n \n-\n \n94.88\n \n566.89\n \n391.70\n \n-\n \n55.35\n \n-\n \n-\n \n-\n \n103.19\n \n550.25\n \n483.29\n \n13.44\n \n82.81\n \n8.75\n \n17.31\n \n12.74\n \n118.51\n \n736.86\n \n531.34\n \n55.46\n \n110.02\n \n-\n \n17.31\n \n38.23\n \n127.40\n \n879.76\n \n576.08\n \n-\n \n-\n \n-\n \n11.54\n \n38.23\n \n137.07\n \n762.92\n \nSource: Federation Account Allocation, Federal Ministry of Finance.\n1/ Revised\n2/ Provisional\nVAT: Value Added Tax\nLGA: Local Governments Areas\nS/N\nTOTAL\n First Half 2010\nFirst Half 2011\nFirst Half 2012\n First Half 2013 1/\n First Half 2014 2/\nState\n \n \n141 \nTable 26 \nDomestic Debt of the Federal Government \nFirst Half, 2014 \n(Naira Billion) \nFirst Half 2010\nFirst Half 2011\nFirst Half 2012\nFirst Half 2013 1/\nEnd-Dec 2013 \nFirst Half 2014 2/\n1. Composition of Debt\n i Treasury Bills\n901.02\n \n1,561.42\n \n2,084.59\n \n2,483.29\n \n2,581.55\n \n2,735.87\n \n ii Treasury Bonds \n392.07\n \n372.90\n \n353.73\n \n334.56\n \n315.39\n \n315.39\n \n iii Development Stocks \n0.22\n \n0.00\n0.00\n0.00\n0.00\n0.00\n iv FGN Bonds\n2,408.43\n \n3,276.11\n \n3,714.55\n4,032.90\n4,222.04\n \n4,369.84\n v Promissory Note\n63.03\n \n0.00\n0.00\n0.00\n0.00\n0.00\nTotal\n3,764.76\n \n5,210.44\n \n6,152.87\n \n6,850.75\n \n7,118.98\n \n7,421.10\n \n2. Holders\n i Banking System\n2,690.50\n \n3,917.38\n \n3,824.81\n \n3,928.45\n \n3,762.69\n \n4,694.35\n \n a. Central Bank\n311.80\n \n313.32\n \n439.62\n \n243.74\n \n468.86\n \n466.83\n \n b. Deposit Money Banks /3\n2,378.70\n \n3,604.06\n \n3,385.19\n \n3,684.71\n \n3,293.83\n \n4,227.52\n \nii Non-Bank Public\n928.12\n \n1,141.75\n \n2,166.11\n \n2,760.05\n \n3,197.69\n \n2,542.68\n \niii Sinking Fund\n146.14\n \n151.30\n \n161.95\n \n162.25\n \n158.59\n \n184.07\n \nTotal Debt Outstanding\n3,764.76\n \n5,210.43\n \n6,152.87\n \n6,850.75\n \n7,118.97\n \n7,421.10\n \nSource: Debt Management Office\n1/ Revised\n2/ Provisional\n3/ Includes holdings of Discount Houses\n \n \n \nTable 27 \nDomestic Debt Service Payments of the Federal Government By Instruments \nFirst Half, 2014 \n(Naira Billion) \n1st Half 2010\n1st Half 2011 \n1st Half 2012\n1st Half 2013 \n2nd Half 2013\n1st Half 2014 1/\n i Treasury Bills\n14.23\n \n73.38\n \n173.60\n \n170.34\n \n85.11\n \n173.08\n \n ii Treasury Bonds\n18.75\n \n18.75\n \n18.75\n \n18.75\n \n7.43\n \n18.75\n \n iv Development Stocks\n0.33\n \n0.23\n \n-\n \n-\n \n-\n \n-\n \n v FGN Bonds\n111.87\n \n136.24\n \n156.55\n \n234.13\n \n142.67\n \n247.35\n \nTotal\n145.18\n \n228.61\n \n348.90\n \n423.22\n \n235.20\n \n439.18\n \nSource: Debt Management Office\nNote: Debt Service excludes sinking fund charges\n 1/ Provisional\n \n \n \n142 \nTable 28 \nExternal Debt Outstanding \nFirst Half, 2014 \n(US$ Million) \nHolders\nEnd-June 2010\nEnd-June 2011 \nEnd-June 2012 \nEnd-June 2013 \nEnd-December 2013\nEnd-June 2014 /1\n1. Multilateral\n3,860.68\n \n4,563.39\n \n4,950.66\n \n5,538.70\n \n6,275.21\n \n6,730.45\n \n2. Paris Club\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n3. London Club\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n4. Promissory Notes\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n5. Others 2/\n409.03\n \n834.65\n \n1,085.00\n \n1,381.40\n \n2,546.61\n \n2,646.66\n \nTotal Debt Outstanding\n4,269.71\n \n5,398.04\n \n6,035.66\n \n6,920.10\n \n8,821.82\n \n9,377.11\n \n \n \n \n \nTable 28 Continued \nExternal Debt Stock /1 \nFirst Half, 2014 \n(US$ Million) \nHolders\nEnd-June 2010\nEnd-June 2011 \nEnd-June 2012 \nEnd-June 2013 \nEnd-December 2013\nEnd-June 2014 /1\nFederal \n4,269.71\n \n5,398.04\n \n6,035.66\n \n6,920.10\n \n6,005.80\n \n6,363.90\n \n1. Multilateral\n3,860.68\n \n4,563.39\n \n4,950.66\n \n5,538.70\n \n3,518.19\n \n3,826.18\n \n2. Others 2/\n409.03\n \n834.65\n \n1,085.00\n \n1,381.40\n \n2,487.61\n \n2,537.72\n \nStates and FCT\n-\n \n-\n \n-\n \n-\n \n2,816.02\n \n3,013.22\n \n1. Multilateral\n-\n \n-\n \n-\n \n-\n \n2,757.02\n \n2,904.26\n \n2. Others 2/\n-\n \n-\n \n-\n \n-\n \n59.00\n \n108.95\n \nTotal Consolidated Debt \n4,269.71\n \n5,398.04\n \n6,035.66\n \n6,920.10\n \n8,821.82\n \n9,377.11\n \nSource: Debt Management Office (DMO)\n1/ Provisional\n2/ Includes Non-Paris Bilateral, Commercial debts and Euro bond\n \n \n143 \nTable 29 \nExternal Debt Service Payments \nFirst Half, 2014 \n(US$ Billion) \nFirst Half 2010\nFirst Half 2011\nFirst Half 2012\nFirst Half 2013 /1\nSecond Half 2013\nFirst Half 2014 2/\nLondon Club\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nParis Club\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nMultilateral\n113.40\n \n95.51\n \n63.81\n \n70.91\n \n24.70\n \n82.43\n \n (i) I. B. R.D.\n43.74\n \n27.82\n \n6.89\n \n-\n \n-\n \n-\n \n (ii) E. I. B.\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \n (iii) A.D.B. & Others\n69.66\n \n67.69\n \n56.92\n \n70.91\n \n24.70\n \n82.43\n \nPromissory Notes\n-\n \n-\n \n-\n \n-\n \n-\n \n-\n \nOthers 3/\n64.20\n \n80.96\n \n88.35\n \n79.17\n \n25.45\n \n95.75\n \nTotal \n177.60\n \n176.47\n \n152.16\n \n150.08\n \n50.15\n \n178.18\n \nSource: Debt Management Office\n1/ Revised\n2/ Provisional\n3/ Also includes Oil Warrant, Euro Bond, Non-Paris Bilateral and Non-Paris Commercial Debts\n \n \nTable 30 \nConsolidated Debt Outstanding /1 \nFirst Half, 2014 \n(Naira Billion) \nHolders\nEnd-June 2010\nEnd-June 2011 \nEnd-June 2012 \nEnd-June 2013 \nEnd-December 2013\nEnd-June 2014 \nExternal Debt \n640.41\n \n827.56\n \n950.61\n \n1,088.58\n \n1,373.57\n \n1,460.30\n \nFederal\n640.41\n \n827.56\n \n950.61\n \n1,088.58\n \n935.11\n \n991.05\n \nStates and FCT\n-\n \n-\n \n-\n \n-\n \n438.45\n \n469.25\n \nDomestic Debt\n3,764.76\n \n5,210.44\n \n6,152.87\n \n6,850.75\n \n7,118.98\n \n7,421.10\n \nFederal\n3,764.76\n \n5,210.44\n \n6,152.87\n \n6,850.75\n \n7,118.98\n \n7,421.10\n \nTotal Consolidated Debt \n4,405.18\n \n6,038.00\n \n7,103.48\n \n7,939.33\n \n8,492.55\n \n8,881.40\n \n \n \n \n \n \n144 \nTable 30 Continued \nConsolidated Debt Service Payment /1 \nFirst Half, 2014 \n(Naira Billion) \n \nHolders\nEnd-June 2010\nEnd-June 2011 \nEnd-June 2012 \nEnd-June 2013 \nEnd-December 2013\nEnd-June 2014 \nExternal Debt\n177.60\n \n176.47\n \n23.94\n \n23.61\n \n7.89\n \n28.03\n \nDomestic Debt\n145.18\n \n228.61\n \n348.90\n \n423.22\n \n235.20\n \n439.18\n \nTotal Consolidated Debt \n322.78\n \n405.08\n \n372.84\n \n446.83\n \n243.09\n \n467.21\n \nSource: Debt Management Office (DMO)\n1/ Provisional\n \n \n \nTable 32 \nGross Domestic Product at 2010 Constant Basic Prices /1 \n(Naira Billion unless otherwise stated) \nFirst Half 2012\nFirst Half 2013 /2\nFirst Half 2014 2/\n1. Agriculture\n5,965.90\n \n6,116.03\n \n6,394.42\n \n21.13\n20.64\n20.28\n (a) Crop Production\n5,287.53\n5,388.69\n5,627.04\n18.72\n18.19\n17.85\n (b) Livestock\n459.83\n490.42\n515.37\n1.63\n1.66\n1.63\n (c) Forestry\n69.53\n73.62\n77.85\n0.25\n0.25\n0.25\n (d) Fishing\n149.00\n163.29\n174.17\n0.53\n0.55\n0.55\n2. Industry\n6,558.68\n \n6,503.08\n \n6,886.47\n \n23.23\n21.95\n21.85\n (a) Crude Petroleum & Natural Gas\n4,177.52\n3,602.43\n3,558.05\n14.79\n12.16\n11.29\n (b) Solid Minerals\n33.02\n38.44\n45.12\n0.12\n0.13\n0.14\n (c) Manufacturing\n2,348.15\n2,862.22\n3,283.30\n8.32\n9.66\n10.42\n3. Construction\n1,018.34\n1,160.50\n1,322.85\n3.61\n3.92\n4.20\n4. Trade\n4,801.83\n5,085.72\n5,376.27\n17.00\n17.16\n17.05\n5. Services\n9,893.80\n \n10,766.85\n \n11,543.29\n \n35.04\n36.33\n36.62\n (a) Transport\n326.28\n339.25\n351.05\n1.16\n1.14\n1.11\n (b) Information and Communication\n3,093.52\n3,333.06\n3,579.50\n10.95\n11.25\n11.36\n (c) Utilities\n177.26\n196.38\n189.15\n0.63\n0.66\n0.60\n (d) Accommodation and Food Services\n135.41\n228.37\n282.12\n0.48\n0.77\n0.89\n (e) Finance & Insurance\n882.84\n959.31\n1,035.35\n3.13\n3.24\n3.28\n (f) Real Estate\n1,968.18\n2,212.39\n2,303.72\n6.97\n7.47\n7.31\n (g) Professional, Scientific & Technical Services\n1,005.16\n1,027.77\n1,091.53\n3.56\n3.47\n3.46\n (h) Administrative and Support Services Bussiness Servic\n6.50\n6.73\n6.68\n0.02\n0.02\n0.02\n (i) Public Administration\n895.15\n881.25\n915.64\n3.17\n2.97\n2.90\n (j) Education\n473.78\n542.95\n582.10\n1.68\n1.83\n1.85\n (k) Human Health & Social Services\n204.56\n218.77\n228.84\n0.72\n0.74\n0.73\n (l) Arts, Entertainment & Recreation\n51.23\n58.83\n67.32\n0.18\n0.20\n0.21\n (m) Other Services\n673.94\n761.78\n910.29\n2.39\n2.57\n2.89\nTOTAL (GDP)\n28,238.55\n \n29,632.18\n \n31,523.30\n \n100.00\n100.00\n100.00\nNON-OIL (GDP)\n24,061.03\n \n26,029.75\n \n27,965.26\n \n85.21\n87.84\n88.71\nTOTAL GDP GROWTH RATE (%)\n3.79\n \n4.94\n \n6.38\n \n OIL GDP GROWTH RATE (%)\n(9.19)\n \n(13.77)\n \n(1.23)\n \n NON-OIL GDP GROWTH RATE (%)\n6.43\n \n8.18\n \n7.44\n \nGrowth in Total GDP\n Agriculture (%)\n6.36\n \n2.52\n \n4.55\n \n Industry (%)\n(0.96)\n \n(0.85)\n \n5.90\n \n Construction (%)\n24.17\n \n13.96\n \n13.99\n \n Trade (%)\n1.61\n \n5.91\n \n5.71\n \n Services (%)\n4.90\n \n8.82\n \n7.21\n \nSource: National Bureau of Statistics\n1/ Revised\n2/ Provisional\nActivity Sector\nFirst Half 2012\nFirst Half 2013 /2\nFirst Half 2014 2/\nShare of Total GDP (Per Cent)\n \n \n \nTable 33 \nGross Domestic Product at Current Basic Prices /1 \n(Naira Billion unless otherwise stated) \nFirst Half 2012\nFirst Half 2013 /2\nFirst Half 2014 2/\n1. Agriculture\n6,417.37\n \n6,797.24\n \n7,225.24\n \n18.77\n17.78\n17.24\n (a) Crop Production\n5,589.70\n5,864.29\n6,173.67\n16.35\n15.34\n14.73\n (b) Livestock\n582.89\n655.92\n736.22\n1.70\n1.72\n1.76\n (c) Forestry\n81.10\n89.35\n98.77\n0.24\n0.23\n0.24\n (d) Fishing\n163.69\n187.69\n216.58\n0.48\n0.49\n0.52\n2. Industry\n8,499.02\n \n8,660.49\n \n9,530.21\n \n24.86\n22.66\n22.74\n (a) Crude Petroleum & Natural Gas\n5,735.58\n5,083.90\n5,245.39\n16.77\n13.30\n12.52\n (b) Solid Minerals\n33.18\n39.20\n47.37\n0.10\n0.10\n0.11\n (c) Manufacturing\n2,730.26\n3,537.38\n4,237.45\n7.98\n9.25\n10.11\n3. Construction\n1,112.74\n1,358.09\n1,625.22\n3.25\n3.55\n3.88\n4. Trade\n6,100.80\n7,043.20\n7,431.15\n17.84\n18.42\n17.73\n5. Services\n12,064.06\n \n14,367.62\n \n16,092.79\n \n35.28\n37.59\n38.40\n (a) Transport\n420.36\n475.68\n550.71\n1.23\n1.24\n1.31\n (b) Information and Communication\n3,795.02\n4,462.88\n4,986.20\n11.10\n11.67\n11.90\n (c) Utilities\n204.00\n274.25\n279.71\n0.60\n0.72\n0.67\n (d) Accommodation and Food Services\n152.19\n304.84\n355.21\n0.45\n0.80\n0.85\n (e) Finance & Insurance\n1,045.14\n1,229.69\n1,431.02\n3.06\n3.22\n3.41\n (f) Real Estate\n2,498.22\n3,006.07\n3,278.91\n7.31\n7.86\n7.82\n (g) Professional, Scientific & Technical Services\n1,252.38\n1,394.69\n1,558.71\n3.66\n3.65\n3.72\n (h) Administrative and Support Services Bussiness Servic\n7.65\n8.45\n9.24\n0.02\n0.02\n0.02\n (i) Public Administration\n1,051.79\n1,127.86\n1,265.91\n3.08\n2.95\n3.02\n (j) Education\n537.16\n643.59\n738.40\n1.57\n1.68\n1.76\n (k) Human Health & Social Services\n224.74\n261.15\n291.62\n0.66\n0.68\n0.70\n (l) Arts, Entertainment & Recreation\n60.31\n73.96\n90.25\n0.18\n0.19\n0.22\n (m) Other Services\n815.09\n1,104.52\n1,256.90\n2.38\n2.89\n3.00\nTOTAL (GDP)\n34,193.99\n \n38,226.65\n \n41,904.61\n \n100.00\n100.00\n100.00\nNON-OIL (GDP)\n28,458.41\n \n33,142.75\n \n36,659.21\n \n83.23\n86.70\n87.48\nTOTAL GDP GROWTH RATE (%)\n15.69\n11.79\n \n9.62\n \n OIL GDP GROWTH RATE (%)\n0.38\n(11.36)\n \n3.18\n \n NON-OIL GDP GROWTH RATE (%)\n19.36\n16.46\n \n10.61\n \nGrowth in Total GDP\n Agriculture (%)\n11.24\n5.92\n \n6.30\n \n Industry (%)\n8.00\n1.90\n \n10.04\n \n Construction (%)\n28.48\n22.05\n \n19.67\n \n Trade (%)\n20.58\n15.45\n \n5.51\n \n Services (%)\n20.73\n19.09\n \n12.01\n \nSource: National Bureau of Statistics\n1/ Revised\n2/ Provisional\nActivity Sector\nFirst Half 2012\nFirst Half 2013 /2\nFirst Half 2014 2/\nShare of Total GDP (Per Cent)\n \n \n147 \nTable 34 \nSelected Real Sector Indicators \n(Per cent, except otherwise indicated) \n2010\n2011\n2012\n2013 /1\n2014 /2\nFirst Half\nFirst Half\nFirst Half\nFirst Half\nFirst Half\nAgricultural Production Index (1990 = 100)\nAggregate\n228.0\n240.8\n250.7\n257.0\n271.1\nCrops\n267.5\n282.2\n292.9\n298.5\n314.6\nStaples\n290.9\n307.2\n319.8\n325.9\n343.8\nOther Crops\n198.9\n209.8\n218.2\n236.5\n246.7\nLivestock\n160.7\n171.1\n181.5\n193.7\n204.5\nFishery\n109.3\n115.9\n122.9\n134.7\n146.0\nForestry\n171.6\n181.0\n191.7\n203.0\n216.2\nIndices of Average World Prices of Nigeria's Major Agricultural Export \nCommodities (1990 = 100) (Dollar Based)\nAll Commodities\n435.9\n448.8\n331.2\n312.9\n408.9\nCocoa\n470.8\n464.3\n334.5\n326.8\n436.8\nCoffee\n235.3\n396.6\n280.0\n206.8\n268.1\nCotton\n103.5\n235.5\n295.2\n110.2\n112.6\nPalm Oil\n240.6\n362.3\n369.3\n240.2\n250.7\nCopra\n258.7\n591.2\n280.0\n241.9\n395.3\nSoya Bean\n142.3\n203.9\n200.5\n217.1\n210.2\nGROWTH RATE OVER THE PRECEDING PERIOD (%)\nAgricultural Production Index (1990 = 100)\nAggregate\n5.9\n5.6\n4.1\n2.5\n5.5\nCrops\n5.8\n5.5\n3.8\n1.9\n5.4\nStaples\n5.9\n5.6\n4.1\n1.9\n5.5\nOther Crops\n5.7\n5.5\n4.0\n8.4\n4.3\nLivestock\n6.4\n6.4\n6.1\n6.7\n5.6\nFishery\n8.5\n6.1\n6.0\n9.6\n8.4\nForestry\n4.2\n5.5\n5.9\n5.9\n6.5\nIndices of Average World Prices of Nigeria's Major Agricultural Export \nCommodities (1990 = 100) (Dollar Based)\nAll Commodities\n25.7\n3.0\n-26.2\n-5.5\n30.7\nCocoa\n26.0\n-1.4\n-28.0\n-2.3\n33.7\nCoffee\n23.5\n68.5\n-29.4\n-26.1\n29.6\nCotton\n49.3\n127.6\n25.4\n-62.7\n2.2\nPalm Oil\n23.0\n50.6\n1.9\n-34.9\n4.4\nCopra\n24.1\n128.5\n-52.6\n-13.6\n63.4\nSoya Bean\n-7.5\n43.3\n-1.6\n8.3\n-3.2\nIndustrial Production Index (1990 = 100)\nIndustrial Production Index\n121.0\n128.8\n136.3\n137.5\n140.1\nManufacturing Production Index\n93.5\n98.9\n106.1\n108.5\n114.2\nMining Production Index\n129.8\n140.6\n146.3\n146.4\n145.6\nElectricity Production Index\n205.8\n202.7\n206.3\n206.4\n208.2\nCapacity Utilization Rate (%)\n54.9\n57.0\n57.0\n57.6\n59.3\nInflation Rate (12-Month Moving Average)\n13.1\n12.3\n11.3\n10.4\n8.0\nInflation Rate (Year-on-Year)\n14.1\n10.2\n12.9\n8.4\n8.2\nFood Inflation Rate (Year-on-Year)\n15.1\n9.2\n12.0\n9.6\n9.8\nNon-Food Inflation Rate (Year-on-Year)\n12.7\n11.5\n12.7\n5.5\n8.1\n1/Revised\n2/Provisional\nItem\n \n \n \n148 \nTable 34 cont’d \nSelected Real Sector Indicators \n(Per cent, except otherwise indicated) \n2014 2/\nFirst Half\nSecond Half\nFirst Half\nSecond Half\nFirst Half\n(1)\n(2)\n(3)\n(1) & (3)\n(2) & (3)\n(1) & (3)\n(2) & (3)\nWorld Crude Oil Production\nmillion barrels per day (mbd)\nOPEC\n37.11\n36.81\n36.36\n35.94\n35.90\n-0.46\n-0.04\n-1.27\n-0.11\nCrudes\n31.49\n30.94\n30.12\n29.71\n29.62\n-0.50\n-0.09\n-1.66\n-0.30\nNGLs and condensates\n5.62\n5.87\n6.24\n6.23\n6.28\n0.04\n0.05\n0.64\n0.80\nTotal non-OPEC\n52.94\n53.03\n52.97\n54.98\n56.45\n3.48\n1.47\n6.57\n2.67\nTotal World Supply\n90.05\n89.84\n89.33\n90.92\n92.35\n3.02\n1.43\n3.38\n1.57\nDemand\nOECD\n45.95\n46.27\n45.68\n46.38\n45.59\n-0.09\n-0.79\n-0.20\n-1.70\nNon-OECD\n42.02\n43.34\n44.04\n44.88\n45.34\n1.30\n0.46\n2.95\n1.02\nTotal World Demand\n87.97\n89.61\n89.72\n91.26\n90.93\n1.21\n-0.33\n1.35\n-0.36\nNigeria\nOutput\n2.09\n2.10\n1.99\n1.88\n1.91\n-0.08\n0.03\n-4.02\n1.60\nExports\n1.64\n1.65\n1.54\n1.43\n1.46\n-0.08\n0.03\n-5.19\n2.10\nDomestic Consumption\n0.45\n0.45\n0.45\n0.45\n0.45\n0.00\n0.00\n0.00\n0.00\nAverage Spot Price of Selected Crude Oil\nat the International Oil Market (US$)\nUK Brent\n113.73\n110.89\n108.50\n110.63\n109.38\n0.88\n-1.25\n0.81\n-1.13\nWest Texas Intermediate (WTI)\n95.06\n86.68\n92.52\n100.17\n97.40\n4.88\n-2.77\n5.27\n-2.77\nBonny Light\n115.05\n111.89\n110.29\n111.91\n111.29\n1.00\n-0.62\n0.91\n-0.55\nForcados\n116.80\n113.12\n111.68\n113.40\n112.26\n0.58\n-1.14\n0.52\n-1.01\nOPEC Basket\n112.52\n107.25\n105.09\n106.56\n105.30\n0.21\n-1.26\n0.20\n-1.18\nGas Activities\n(MMm\n3)\nGas Produced\n33.95\n30.73\n28.98\n34.35\n36.43\n7.45\n2.09\n25.70\n6.07\nGas sold to Industries\nGas sold for LNG\nGas used as Fuel\nGas Reinjected\nGas Lift\nGas Converted to NGLs\nTotal Gas Utilised\n27.92\n25.66\n22.77\n27.76\n29.62\n6.86\n1.86\n30.12\n6.71\nGas Utilised as % of Gas Produced\n82.23\n83.50\n78.55\n80.82\n81.31\n2.76\n0.49\n3.52\n0.61\nGas Flared\n6.03\n5.07\n6.22\n6.59\n6.81\n0.59\n0.22\n9.52\n3.37\nGas Flared as % Gas Produced\n17.77\n16.50\n21.45\n19.18\n18.69\n-2.76\n-0.49\n-12.87\n-2.55\nSources: OPEC, NNPC, Reuters & CBN Estimates\n1/ Revised\n2/ Provisional\nItem\n2012\nAbsolute Change \nBetween\nPercentage \nChange Between\n2013 1/\n \n \n \n149 \nTable 35 \nComposite Consumer Price Index \n(November 2009=100) \nMonthly\nIndex\nInflation\ny-o-y(%)\n12-Month\nAverage\nIndex\nInflation\n12-Month\nAverage(%)\nMonthly\nIndex\nInflation\ny-o-y(%)\nInflation\n12-Month\nAverage(%)\nMonthly\nIndex\nInflation\ny-o-y(%)\nInflation\n12-Month\nAverage(%)\n2010\nJanuary\n103.1\n14.4\n96.9\n12.6\n102.1\n12.1\n9.6\n103.7\n15.9\n14.7\nFebruary\n105.0\n15.6\n98.0\n12.7\n104.5\n14.0\n10.1\n104.8\n16.2\n14.4\nMarch\n104.9\n14.8\n99.2\n12.8\n104.1\n13.2\n10.3\n105.3\n15.8\n14.4\nApril\n105.7\n15.0\n100.3\n12.9\n104.4\n12.8\n10.4\n106.6\n16.3\n14.5\nMay\n105.7\n12.9\n101.3\n12.9\n105.2\n11.7\n10.6\n105.7\n13.0\n14.3\nJune\n108.8\n14.1\n102.4\n13.1\n107.4\n12.7\n10.9\n110.0\n15.1\n14.4\nJuly\n109.9\n13.0\n103.5\n13.3\n107.7\n11.3\n11.2\n111.6\n14.0\n14.5\nAugust\n111.9\n13.7\n104.6\n13.5\n109.3\n12.4\n11.5\n113.8\n15.1\n14.7\nSeptember\n112.4\n13.6\n105.7\n13.8\n110.7\n12.8\n12.0\n114.0\n14.6\n14.9\nOctober\n112.7\n13.4\n106.9\n13.9\n111.9\n13.2\n12.3\n114.0\n14.1\n14.9\nNovember\n112.8\n12.8\n107.9\n13.9\n111.7\n11.7\n12.4\n114.4\n14.4\n15.0\nDecember\n114.2\n11.8\n108.9\n13.7\n112.6\n10.9\n12.4\n115.4\n12.7\n14.7\n2011\nJanuary\n115.6\n12.1\n110.0\n13.5\n114.5\n12.1\n12.4\n114.3\n10.3\n14.2\nFebruary\n116.7\n11.1\n110.9\n13.2\n115.5\n10.6\n12.1\n117.7\n12.2\n13.9\nMarch\n118.3\n12.8\n112.1\n13.0\n117.5\n12.8\n12.1\n118.1\n12.2\n13.6\nApril\n117.7\n11.3\n113.0\n12.7\n117.9\n12.9\n12.1\n119.0\n11.6\n13.2\nMay\n118.7\n12.4\n114.1\n12.6\n118.9\n13.0\n12.2\n118.5\n12.2\n13.2\nJune\n119.9\n10.2\n115.1\n12.3\n119.8\n11.5\n12.1\n120.1\n9.2\n12.7\nJuly\n120.3\n9.4\n115.9\n12.0\n120.1\n11.5\n12.1\n120.4\n7.9\n12.1\nAugust\n122.3\n9.3\n116.8\n11.6\n121.2\n10.9\n12.0\n123.7\n8.7\n11.6\nSeptember\n124.0\n10.3\n117.8\n11.4\n123.5\n11.6\n11.9\n124.8\n9.5\n11.2\nOctober\n124.6\n10.5\n118.8\n11.1\n124.8\n11.5\n11.7\n125.0\n9.7\n10.8\nNovember\n124.7\n10.5\n119.7\n11.0\n124.6\n11.5\n11.7\n125.4\n9.6\n10.4\nDecember\n126.0\n10.3\n120.7\n10.8\n124.8\n10.8\n11.7\n128.1\n11.0\n10.3\n2012\nJanuary\n130.2\n12.6\n121.9\n10.9\n129.1\n12.7\n11.8\n129.3\n13.1\n10.5\nFebruary\n130.5\n11.9\n123.1\n11.0\n129.3\n11.9\n11.9\n129.1\n9.7\n10.3\nMarch\n132.6\n12.1\n124.3\n10.9\n135.1\n15.0\n12.1\n132.1\n11.8\n10.3\nApril\n132.8\n12.9\n125.5\n11.1\n135.2\n14.7\n12.2\n132.3\n11.2\n10.3\nMay\n133.8\n12.7\n126.8\n11.1\n136.7\n14.9\n12.4\n133.9\n12.9\n10.4\nJune\n135.3\n12.9\n128.1\n11.3\n138.0\n15.2\n12.7\n134.5\n12.0\n10.6\nJuly\n135.7\n12.8\n129.4\n11.6\n138.1\n15.0\n13.0\n135.0\n12.1\n11.0\nAugust\n136.6\n11.7\n130.6\n11.8\n139.0\n14.7\n13.3\n135.9\n9.9\n11.1\nSeptember\n138.0\n11.3\n131.7\n11.9\n139.7\n13.1\n13.5\n137.5\n10.2\n11.1\nOctober\n139.2\n11.7\n132.9\n11.9\n140.3\n12.4\n13.5\n138.8\n11.1\n11.2\nNovember\n140.0\n12.3\n134.2\n12.1\n140.9\n13.1\n13.6\n139.8\n11.6\n11.4\nDecember\n141.1\n12.0\n135.5\n12.2\n141.8\n13.7\n13.9\n141.2\n10.2\n11.3\n2013\nJanuary\n141.9\n9.0\n136.5\n11.9\n143.8\n11.3\n13.7\n142.3\n10.1\n11.1\nFebruary\n143.0\n9.5\n137.5\n11.7\n143.8\n11.2\n13.7\n143.3\n11.0\n11.2\nMarch\n144.0\n8.6\n138.4\n11.4\n144.8\n7.2\n13.0\n144.6\n9.5\n11.0\nApril\n144.8\n9.1\n139.4\n11.1\n144.5\n6.9\n12.3\n145.6\n10.0\n10.8\nMay\n145.8\n9.0\n140.4\n10.8\n145.2\n6.2\n11.5\n146.4\n9.3\n10.5\nJune\n146.6\n8.4\n141.4\n10.4\n145.5\n5.5\n10.7\n147.5\n9.6\n10.4\nJuly\n147.4\n8.7\n142.4\n10.0\n147.2\n6.6\n10.0\n148.4\n10.0\n10.2\nAugust\n147.8\n8.2\n143.3\n9.8\n149.1\n7.2\n9.4\n149.2\n9.7\n10.2\nSeptember\n148.9\n8.0\n144.2\n9.5\n150.0\n7.4\n8.9\n150.4\n9.4\n10.1\nOctober\n150.0\n7.8\n145.1\n9.2\n150.9\n7.6\n8.6\n151.6\n9.2\n10.0\nNovember\n151.1\n7.9\n146.1\n8.8\n151.8\n7.8\n8.1\n152.9\n9.3\n9.8\nDecember\n152.3\n8.0\n147.0\n8.5\n153.0\n7.9\n7.7\n154.3\n9.3\n9.7\n2014\nJanuary\n153.3\n8.0\n147.9\n8.4\n153.3\n6.6\n7.3\n155.5\n9.3\n9.6\nFebruary\n154.0\n7.7\n148.8\n8.3\n154.1\n7.2\n7.0\n156.5\n9.2\n9.5\nMarch\n155.2\n7.8\n149.8\n8.2\n154.7\n6.8\n7.0\n158.0\n9.3\n9.5\nApril\n156.2\n7.9\n150.7\n8.1\n155.3\n7.5\n7.0\n159.3\n9.4\n9.4\nMay\n157.4\n8.0\n151.7\n8.0\n156.3\n7.7\n7.2\n160.6\n9.7\n9.4\nJune\n158.6\n8.2\n152.7\n8.0\n157.4\n8.1\n7.4\n161.9\n9.8\n9.5\nSource: National Bureau of Statistics (NBS)\nYear\n&\nMonth\nAll Item (Headline)\nAll Items less Farm Produce (Core)\nFood\n \n \n \n150 \nTable 36 \nUrban and Rural Consumer Price Index \n(November 2009=100) \nAll Items\n(Headline) \nMonthly Index\nHeadline\nInflation\ny-o-y(%)\nAll Items less Farm\nProduce (Core) \nMonthly Index\nCore\nInflation\ny-o-y(%)\nFood \nMonthly\nIndex\nFood\nInflation\ny-o-y(%)\nAll Items\n(Headline) \nMonthly Index\nHeadline\nInflation\ny-o-y(%)\nAll Items less Farm\nProduce (Core) \nMonthly Index\nCore\nInflation\ny-o-y(%)\nFood \nMonthly\nIndex\nFood\nInflation\ny-o-y(%)\n2010\nJanuary\n102.6\n10.5\n102.5\n6.1\n102.8\n13.6\n103.6\n16.5\n101.9\n15.1\n104.4\n17.2\nFebruary\n104.4\n11.6\n105.4\n9.4\n102.9\n11.9\n105.6\n17.9\n103.8\n16.0\n106.4\n18.8\nMarch\n106.0\n12.9\n105.7\n9.6\n106.1\n14.9\n104.0\n15.3\n102.8\n14.4\n104.6\n15.6\nApril\n105.9\n12.2\n105.4\n8.3\n106.3\n14.9\n105.6\n16.4\n103.6\n14.8\n106.8\n16.9\nMay\n103.8\n8.5\n103.7\n5.6\n103.8\n10.4\n107.2\n15.8\n106.5\n15.4\n107.2\n14.9\nJune\n107.7\n10.8\n107.0\n8.3\n108.5\n12.7\n109.6\n16.1\n107.8\n15.0\n111.2\n16.6\nJuly\n109.1\n10.3\n107.9\n8.5\n110.4\n12.2\n110.7\n14.6\n107.6\n12.6\n112.6\n15.3\nAugust\n110.5\n10.9\n109.0\n9.3\n112.8\n13.6\n113.0\n15.6\n109.6\n14.0\n114.7\n16.1\nSeptember\n110.6\n10.9\n109.4\n10.0\n112.6\n12.8\n113.8\n15.6\n111.7\n14.7\n115.1\n15.8\nOctober\n111.2\n11.5\n110.0\n10.2\n113.5\n13.9\n114.0\n15.0\n113.5\n15.3\n114.4\n14.4\nNovember\n111.7\n11.7\n111.3\n11.3\n112.8\n12.8\n113.6\n13.6\n112.1\n12.1\n115.7\n15.7\nDecember\n112.2\n10.7\n111.2\n9.7\n113.4\n11.6\n115.9\n12.7\n113.8\n11.9\n117.1\n13.6\n2011\nJanuary\n110.7\n7.9\n108.5\n5.9\n111.7\n8.6\n119.7\n15.6\n119.5\n17.3\n116.5\n11.6\nFebruary\n114.2\n9.4\n114.1\n8.3\n115.5\n12.2\n118.8\n12.5\n116.7\n12.5\n119.4\n12.2\nMarch\n115.0\n8.5\n114.9\n8.6\n116.0\n9.3\n121.1\n16.4\n119.6\n16.4\n119.9\n14.6\nApril\n115.5\n9.1\n116.3\n10.3\n116.4\n9.5\n119.4\n13.1\n119.2\n15.1\n121.1\n13.4\nMay\n115.8\n11.5\n116.8\n12.7\n116.7\n12.4\n121.2\n13.0\n120.6\n13.3\n120.1\n12.0\nJune\n116.6\n8.3\n116.6\n9.0\n118.0\n8.7\n122.6\n11.8\n122.4\n13.6\n121.9\n9.6\nJuly\n116.3\n6.6\n116.8\n8.2\n118.0\n6.9\n123.6\n11.7\n122.8\n14.2\n122.4\n8.6\nAugust\n118.3\n7.1\n118.7\n8.9\n119.9\n6.3\n125.6\n11.1\n123.3\n12.5\n126.9\n10.6\nSeptember\n120.0\n8.4\n121.3\n10.9\n120.7\n7.2\n127.4\n11.9\n125.3\n12.1\n128.2\n11.4\nOctober\n119.9\n7.8\n121.2\n10.2\n120.9\n6.6\n128.6\n12.8\n127.8\n12.7\n128.4\n12.2\nNovember\n120.0\n7.4\n121.1\n8.8\n120.8\n7.2\n128.6\n13.1\n127.4\n13.6\n129.1\n11.6\nDecember\n122.3\n9.0\n122.0\n9.7\n124.5\n9.8\n129.0\n11.3\n127.1\n11.7\n131.1\n12.0\n2012\nJanuary\n128.9\n16.4\n128.2\n18.2\n125.5\n12.3\n131.3\n9.7\n129.9\n8.7\n132.4\n13.6\nFebruary\n129.2\n13.1\n128.4\n12.5\n126.3\n9.3\n131.6\n10.9\n130.0\n11.4\n131.8\n10.3\nMarch\n130.7\n13.7\n132.6\n15.4\n129.1\n11.3\n134.4\n11.0\n137.1\n14.7\n134.9\n12.5\nApril\n131.1\n13.4\n133.0\n14.4\n129.4\n11.2\n134.4\n12.5\n137.0\n15.0\n135.0\n11.5\nMay\n132.1\n14.1\n134.0\n14.7\n131.1\n12.4\n135.4\n11.7\n138.9\n15.1\n136.5\n13.7\nJune\n134.1\n15.0\n135.8\n16.5\n131.4\n11.4\n136.5\n11.4\n139.8\n14.2\n137.4\n12.7\nJuly\n134.5\n15.6\n135.5\n16.0\n131.7\n11.6\n136.9\n10.7\n140.4\n14.3\n138.0\n12.8\nAugust\n135.4\n14.5\n136.7\n15.2\n132.5\n10.6\n137.8\n9.7\n140.9\n14.3\n139.1\n9.6\nSeptember\n137.0\n14.2\n137.7\n13.5\n134.2\n11.2\n139.0\n9.1\n141.3\n12.8\n140.6\n9.6\nOctober\n138.2\n15.3\n138.3\n14.1\n135.3\n11.9\n140.2\n9.1\n141.9\n11.0\n142.0\n10.6\nNovember\n139.0\n15.8\n138.9\n14.7\n136.2\n12.7\n141.1\n9.8\n142.5\n11.8\n143.2\n10.9\nDecember\n140.0\n14.5\n139.8\n14.6\n137.6\n10.5\n142.1\n10.2\n143.5\n13.0\n144.5\n10.2\n2013\nJanuary\n140.8\n9.2\n142.3\n11.0\n138.6\n10.5\n143.2\n9.1\n144.9\n11.6\n145.7\n10.0\nFebruary\n142.0\n9.8\n142.3\n10.9\n139.9\n10.8\n144.1\n9.5\n144.9\n11.5\n146.4\n11.1\nMarch\n142.8\n9.3\n142.0\n7.1\n140.7\n9.0\n145.3\n8.1\n147.1\n7.2\n148.2\n9.9\nApril\n143.7\n9.7\n142.6\n7.2\n142.0\n9.7\n146.4\n8.9\n146.5\n6.9\n149.2\n10.5\nMay\n144.5\n9.4\n142.7\n6.5\n142.7\n8.9\n147.1\n8.6\n147.2\n6.0\n149.8\n9.7\nJune\n145.5\n8.4\n143.1\n5.4\n143.9\n9.5\n147.9\n8.3\n147.6\n5.6\n150.8\n9.7\nJuly\n146.3\n8.8\n145.4\n7.3\n145.0\n10.1\n148.6\n8.6\n148.8\n6.0\n151.7\n10.0\nAugust\n146.8\n8.4\n147.7\n8.0\n145.8\n10.0\n148.9\n8.1\n150.2\n6.6\n152.3\n9.5\nSeptember\n147.9\n8.0\n147.7\n7.3\n147.1\n9.6\n150.0\n8.0\n151.9\n7.5\n153.6\n9.3\nOctober\n149.1\n7.9\n148.6\n7.5\n148.3\n9.6\n151.1\n7.8\n152.8\n7.7\n154.8\n9.0\nNovember\n150.2\n8.1\n149.4\n7.6\n149.6\n9.8\n152.2\n7.8\n153.8\n7.9\n156.0\n8.9\nDecember\n151.4\n8.1\n150.4\n7.6\n151.0\n9.8\n153.3\n7.9\n155.2\n8.1\n157.4\n8.9\n2014\nJanuary\n152.2\n8.2\n150.7\n5.8\n152.3\n9.8\n154.4\n7.8\n155.5\n7.3\n158.6\n8.8\nFebruary\n153.0\n7.8\n151.6\n6.5\n153.2\n9.5\n155.1\n7.7\n156.1\n7.7\n159.5\n9.0\nMarch\n154.2\n7.9\n152.1\n7.1\n154.7\n10.0\n156.4\n7.6\n156.8\n6.6\n161.2\n8.7\nApril\n155.1\n7.9\n152.6\n7.0\n156.1\n9.9\n157.3\n7.5\n157.6\n7.5\n162.3\n8.8\nMay\n156.4\n8.2\n153.6\n7.7\n157.4\n10.3\n158.5\n7.8\n158.6\n7.7\n163.6\n9.2\nJune\n157.6\n8.4\n154.6\n8.0\n158.8\n10.3\n159.7\n8.0\n159.7\n8.2\n164.9\n9.3\nSource: National Bureau of Statistics (NBS)\nYear\n&\nMonth\nUrban\nRural\n \n \n \n151 \nTable 37 \nBalance of Payments Analytic Presentation \n(US$ Million) \n1st Half 2013 /1\n2nd Half 2013 /1\n1st Half 2014 /2\nCURRENT ACCOUNT\n11,149.42\n \n8,998.77\n \n6,136.80\n \n Goods \n23,491.39\n \n20,275.69\n \n17,613.41\n \n Exports (fob) \n49,169.95\n \n45,948.10\n \n45,787.80\n \nOil and Gas\n46,602.41\n \n43,972.28\n \n43,739.50\n \nNon-oil\n2,567.54\n \n1,975.82\n \n2,048.30\n \n Imports (fob) \n(25,678.56)\n \n(25,672.42)\n \n(28,174.39)\n \nOil\n(8,977.21)\n \n(6,166.21)\n \n(6,685.68)\n \nNon-oil\n(16,701.35)\n \n(19,506.21)\n \n(21,488.71)\n \nUnrecorded(TPAdj)\n-\n \n-\n \n-\n \n Services(net) \n(9,802.23)\n \n(10,306.58)\n \n(11,835.84)\n \n Credit \n1,043.44\n \n1,372.36\n \n1,034.04\n \nTransportation\n460.02\n \n648.25\n \n425.97\n \nTravel \n274.76\n \n267.63\n \n275.15\n \nInsurance Services\n2.13\n \n1.99\n \n19.35\n \nCommunication Services\n24.24\n \n27.84\n \n26.64\n \nConstruction Services\n-\n \n-\n \n-\n \nFinancial Services\n10.53\n \n11.67\n \n6.73\n \nComputer & information Services\n-\n \n-\n \n-\n \nRoyalties and License Fees\n-\n \n-\n \n-\n \nGovernment Services\n241.91\n \n241.75\n \n242.03\n \nPersonal, cultural & recreational services\n-\n \n-\n \n-\n \nOther Bussiness Services\n29.85\n \n173.24\n \n38.17\n \n Debit \n(10,845.67)\n \n(11,678.95)\n \n(12,869.88)\n \nTransportation\n(4,392.64)\n \n(4,191.87)\n \n(4,149.84)\n \nTravel \n(2,554.80)\n \n(3,357.17)\n \n(3,758.51)\n \nInsurance Services\n(330.82)\n \n(382.81)\n \n(474.94)\n \nCommunication Services\n(262.71)\n \n(309.76)\n \n(372.12)\n \nConstruction Services\n(11.83)\n \n(75.48)\n \n(45.17)\n \nFinancial Services\n(293.30)\n \n(455.07)\n \n(559.58)\n \nComputer & information Services\n(36.91)\n \n(278.72)\n \n(465.95)\n \nRoyalties and License Fees\n(132.00)\n \n(128.70)\n \n(126.42)\n \nGovernment Services\n(952.83)\n \n(785.48)\n \n(729.16)\n \nPersonal, cultural & recreational services\n(16.34)\n \n(4.38)\n \n(22.73)\n \nOther Bussiness Services\n(1,861.49)\n \n(1,709.52)\n \n(2,165.47)\n \n Income(net) \n(13,238.72)\n \n(12,491.05)\n \n(10,783.25)\n \n Credit \n422.00\n \n466.06\n \n567.10\n \nInvestment Income\n323.11\n \n373.70\n \n467.86\n \nCompensation of employees\n98.89\n \n92.36\n \n99.24\n \n Debit \n(13,660.72)\n \n(12,957.11)\n \n(11,350.34)\n \nInvestment Income\n(13,649.53)\n \n(12,945.01)\n \n(11,343.59)\n \nCompensation of employees\n(11.20)\n \n(12.10)\n \n(6.76)\n \nCurrent transfers(net) \n10,698.98\n \n11,520.72\n \n11,142.48\n \n Credit \n10,935.87\n \n11,776.05\n \n11,315.89\n \nGeneral Government\n902.91\n \n1,009.37\n \n887.67\n \nOther Sectors\n10,032.96\n \n10,766.68\n \n10,428.22\n \nWorkers Remittance\n10,020.89\n \n10,755.43\n \n10,318.59\n \n Debit \n(236.89)\n \n(255.34)\n \n(173.41)\n \nGeneral Government\n(85.03)\n \n(96.33)\n \n(0.05)\n \nOther Sectors\n(151.86)\n \n(159.01)\n \n(173.36)\n \nWorkers Remittance\n(13.80)\n \n(13.80)\n \n(13.80)\n \nCAPITAL AND FINANCIAL ACCOUNT \n1,176.46\n \n6,572.38\n \n1,600.54\n \n Capital account(net) \n-\n \n-\n \n-\n \n Credit \n-\n \n-\n \n-\n \n Capital Transfers(Debt Forgiveness)\n-\n \n-\n \n-\n \n Debit \n-\n \n-\n \n-\n \nCapital Transfers\n-\n \n-\n \n-\n \n Financial account(net) \n1,176.46\n \n6,572.38\n \n1,600.54\n \n Assets \n(12,800.30)\n \n(1,054.09)\n \n(10,272.59)\n \nDirect investment (Abroad)\n(509.56)\n \n(727.93)\n \n(79.95)\n \nPortfolio investment \n(1,577.23)\n \n(1,669.39)\n \n(4,528.00)\n \nOther investment \n(9,531.80)\n \n(826.61)\n \n(11,191.95)\n \nChange in Reserve \n(1,181.71)\n \n2,169.83\n \n5,527.31\n \n Liabilities \n13,976.76\n \n7,626.47\n \n11,873.14\n \n Direct Invesment in reporting economy \n3,475.38\n \n2,133.09\n \n1,655.60\n \nPortfolio Investment\n10,427.18\n \n3,224.97\n \n5,706.93\n \nOther investment liabilities\n74.20\n \n2,268.41\n \n4,510.61\n \n NET ERRORS AND OMISSIONS \n(12,325.87)\n \n(15,571.15)\n \n(7,737.35)\n \nMemorandum Items:\n1st Half 2013 /1\n2nd Half 2013 /1\n1st Half 2014 /2\nCurrent Account Balance as % of G.D.P\n4.50\n3.32\n2.26\nCapital and Financial Account Balance as % of G.D.P\n0.47\n2.42\n0.59\nOverall Balance as % of G.D.P\n0.48\n-0.80\n-2.04\nExternal Reserves - Stock (US $ million)\n44957.00\n42847.31\n37330.03\nNumber of Months of Imports Equivalent\n10.50\n10.01\n7.95\nExternal Debt Stock (US$ million)\n6920.10\n8821.90\n9377.11\nDebt Service Due as % of Exports of Goods Non Factor Services \nEffective Central Exchange Rate (N/$)\n156.03\n156.04\n156.02\nAverage Exchange Rate (N/$)\n157.30\n157.32\n157.29\nEnd-Period Exchange Rate (N/$)\n157.31\n \n157.26\n157.29\nSource: Central Bank of Nigeria\n1/ Revised\n2/ Provisional\n \n \n \n152 \nTable 38 \nBalance of Payments Analytic Presentation \n(N’ Million) \n1st Half 2013 /1\n2nd Half 2013 /1\n1st Half 2014 /2\nCURRENT ACCOUNT\n1,739,645.70\n \n1,404,512.82\n \n957,542.65\n \n Goods \n3,665,350.98\n \n3,164,776.33\n \n2,748,268.52\n \n Exports (fob) \n7,671,959.96\n \n7,171,970.53\n \n7,144,396.56\n \nOil and Gas\n7,271,346.92\n \n6,863,578.62\n \n6,824,794.38\n \nNon-oil\n400,613.03\n \n308,391.91\n \n319,602.17\n \n Imports (fob) \n(4,006,608.98)\n \n(4,007,194.20)\n \n(4,396,128.03)\n \nOil\n(1,400,705.48)\n \n(962,530.38)\n \n(1,043,185.41)\n \nNon-oil\n(2,605,903.50)\n \n(3,044,663.82)\n \n(3,352,942.62)\n \nUnrecorded(TPAdj)\n-\n \n-\n \n-\n \n Services(net) \n(1,529,438.42)\n \n(1,608,708.86)\n \n(1,846,778.60)\n \n Credit \n162,807.22\n \n214,221.88\n \n161,344.40\n \nTransportation\n71,776.85\n \n101,190.37\n \n66,465.16\n \nTravel \n42,870.73\n \n41,773.55\n \n42,931.96\n \nInsurance Services\n332.46\n \n309.98\n \n3,018.76\n \nCommunication Services\n3,782.16\n \n4,345.43\n \n4,156.71\n \nConstruction Services\n-\n \n-\n \n-\n \nFinancial Services\n1,642.28\n \n1,820.93\n \n1,050.73\n \nComputer & information Services\n-\n \n-\n \n-\n \nRoyalties and License Fees\n-\n \n-\n \n-\n \nGovernment Services\n37,745.13\n \n37,734.17\n \n37,764.67\n \nPersonal, cultural & recreational services\n-\n \n-\n \n-\n \nOther Bussiness Services\n4,657.61\n \n27,047.46\n \n5,956.41\n \n Debit \n(1,692,245.64)\n \n(1,822,930.74)\n \n(2,008,123.01)\n \nTransportation\n(685,383.80)\n \n(654,299.12)\n \n(647,510.58)\n \nTravel \n(398,623.49)\n \n(524,012.91)\n \n(586,450.78)\n \nInsurance Services\n(51,617.54)\n \n(59,754.66)\n \n(74,106.17)\n \nCommunication Services\n(40,991.13)\n \n(48,349.91)\n \n(58,063.11)\n \nConstruction Services\n(1,845.33)\n \n(11,781.15)\n \n(7,047.25)\n \nFinancial Services\n(45,763.43)\n \n(71,027.08)\n \n(87,313.24)\n \nComputer & information Services\n(5,758.31)\n \n(43,498.84)\n \n(72,703.03)\n \nRoyalties and License Fees\n(20,595.92)\n \n(20,088.30)\n \n(19,725.66)\n \nGovernment Services\n(148,670.13)\n \n(122,608.37)\n \n(113,773.50)\n \nPersonal, cultural & recreational services\n(2,549.56)\n \n(683.93)\n \n(3,545.94)\n \nOther Bussiness Services\n(290,446.99)\n \n(266,826.47)\n \n(337,883.74)\n \n Income(net) \n(2,065,625.21)\n \n(1,949,764.48)\n \n(1,682,539.31)\n \n Credit \n65,844.53\n \n72,748.10\n \n88,485.92\n \nInvestment Income\n50,414.78\n \n58,331.62\n \n73,001.13\n \nCompensation of employees\n15,429.74\n \n14,416.47\n \n15,484.78\n \n Debit \n(2,131,469.74)\n \n(2,022,512.58)\n \n(1,771,025.22)\n \nInvestment Income\n(2,129,722.77)\n \n(2,020,623.81)\n \n(1,769,970.88)\n \nCompensation of employees\n(1,746.97)\n \n(1,888.77)\n \n(1,054.35)\n \nCurrent transfers(net) \n1,669,358.36\n \n1,798,209.83\n \n1,738,592.04\n \n Credit \n1,706,320.58\n \n1,838,070.35\n \n1,765,649.22\n \nGeneral Government\n140,880.61\n \n157,551.62\n \n138,505.66\n \nOther Sectors\n1,565,439.97\n \n1,680,518.73\n \n1,627,143.55\n \nWorkers Remittance\n1,563,556.03\n \n1,678,762.18\n \n1,610,037.22\n \n Debit \n(36,962.23)\n \n(39,860.52)\n \n(27,057.17)\n \nGeneral Government\n(13,267.44)\n \n(15,040.79)\n \n(7.03)\n \nOther Sectors\n(23,694.79)\n \n(24,819.74)\n \n(27,050.15)\n \nWorkers Remittance\n(2,153.21)\n \n(2,154.01)\n \n(2,153.25)\n \nCAPITAL AND FINANCIAL ACCOUNT \n183,545.01\n \n1,026,287.84\n \n249,737.08\n \n Capital account(net) \n-\n \n-\n \n-\n \n Credit \n-\n \n-\n \n-\n \n Capital Transfers(Debt Forgiveness)\n-\n \n-\n \n-\n \n Debit \n-\n \n-\n \n-\n \nCapital Transfers\n-\n \n-\n \n-\n \n Financial account(net) \n183,545.01\n \n1,026,287.84\n \n249,737.08\n \n Assets \n(1,997,244.43)\n \n(164,043.95)\n \n(1,602,860.77)\n \nDirect investment (Abroad)\n(79,507.80)\n \n(113,561.44)\n \n(12,475.25)\n \nPortfolio investment \n(246,092.11)\n \n(260,576.41)\n \n(706,516.30)\n \nOther investment \n(1,487,240.53)\n \n(128,570.52)\n \n(1,746,310.16)\n \nChange in Reserve \n(184,403.99)\n \n338,664.43\n \n862,440.94\n \n Liabilities \n2,180,789.44\n \n1,190,331.78\n \n1,852,597.85\n \n Direct Invesment in reporting economy \n542,260.60\n \n332,955.06\n \n258,327.96\n \nPortfolio Investment\n1,626,954.16\n \n503,357.82\n \n890,467.54\n \nOther investment liabilities\n11,574.68\n \n354,018.90\n \n703,802.35\n \n NET ERRORS AND OMISSIONS \n(1,923,190.71)\n \n(2,430,800.65)\n \n(1,207,279.73)\n \nMemorandum Items:\n1st Half 2013 /1\n2nd Half 2013 /1\n1st Half 2014 /2\nCurrent Account Balance as % of G.D.P\n4.50\n3.32\n2.26\nCapital and Financial Account Balance as % of G.D.P\n0.47\n2.42\n0.59\nOverall Balance as % of G.D.P\n0.48\n-0.80\n-2.04\nExternal Reserves - Stock (US $ million)\n44,957.00\n \n42,847.31\n \n37,330.03\n \nNumber of Months of Imports Equivalent\n10.50\n \n10.01\n \n7.95\n \nExternal Debt Stock (US$ million)\n6,920.10\n \n8,821.90\n \n9,377.11\n \nDebt Service Due as % of Exports of Goods Non Factor Services \nEffective Central Exchange Rate (N/$)\n156.03\n \n156.04\n \n156.02\n \nAverage Exchange Rate (N/$)\n157.30\n157.32\n157.29\nEnd-Period Exchange Rate (N/$)\n157.31\n \n157.26\n157.29\nSource: Central Bank of Nigeria\n1/ Revised\n2/ Provisional\n \n \n \n153 \nTable 39 \nForeign Exchange Flows Through the Economy \n(US$ Million) \n1st Half\n1st Half\n1st Half\n1st Half\n2nd Half\nCATEGORY\n2010\n2011\n2012\n2013 /2\n2014 /3\nINFLOW\n39,297.43\n \n50,257.07\n \n55,548.08\n \n72,277.13\n \n75,643.39\n \nA. Through the Central Bank\n12,982.08\n \n19,574.33\n \n22,170.74\n \n19,747.39\n \n22,888.76\n \n1. Oil \n12,159.31\n \n18,140.18\n21,298.36\n \n18,971.59\n \n21,027.88\n \n2.Non-oil\n822.77\n \n1,434.14\n \n872.37\n \n775.80\n \n1,860.88\n \n(i) Drawings on Loans/Grants\n-\n \n-\n \n-\n \n-\n \n-\n \n(ii) RDAS/WDAS Purchases\n9.30\n \n-\n \n-\n \n20.00\n \n270.00\n \n(iii) Swaps\n-\n \n-\n \n-\n \n-\n \n500.00\n \n(iv) Interest on Reserves & Investments\n375.98\n \n112.56\n \n89.19\n \n30.32\n \n79.07\n \n(v) Interest Repatriated from overseas\n-\n \n-\n \n0.72\n \n0.29\n \n0.12\n \n(vi) Refund on World Bank/IBRD/IMF Loans/SDR Allocation\n0.00\n0.0\n-\n \n-\n \n-\n \n(vii) Eurobond proceeds -fixed income securities) \n7.40\n \n(viii) Returned Payments [Wired/Cash]\n11.21\n \n(ix) Untilised funds from DAS\n134.02\n \n(x) Recovered Funds\n226.39\n \n(xi) Other official Receipts\n437.49\n1,321.59\n782.46\n \n725.19\n \n632.67\n \nB. Through Autonomous Sources\n26,315.35\n \n30,682.74\n \n33,377.34\n \n52,529.74\n \n52,754.63\n \n1. Non-oil exports\n977.56\n \n1,355.60\n \n2,007.62\n \n1,898.23\n \n3,650.25\n \n2. Capital Inflow\n30.06\n \n9.83\n \n110.57\n \n151.82\n \n271.85\n \n3. Invisibles\n25,307.73\n \n29,317.31\n \n31,259.15\n \n50,479.70\n \n48,832.53\n \nOUTFLOW\n17,594.67\n \n21,402.28\n \n20,204.63\n \n18,964.82\n \n29,092.93\n \nA. Through the Central Bank \n17,027.91\n \n20,530.52\n \n19,355.49\n \n18,763.71\n \n28,501.99\n \n1. WDAS/RDAS Utilisation \n14,146.35\n \n17,002.27\n \n16,687.61\n \n15,440.47\n \n25,172.86\n \n(i) WDAS/RDAS Sales\n11,715.11\n \n14,638.04\n \n10,414.10\n \n10,711.04\n \n17,233.85\n \n(ii) WDAS Forward\n-\n \n536.51\n \n679.99\n \n-\n \n1,075.86\n \n(iii) BDC Sales\n2431.24\n1,827.72\n \n3,455.82\n \n2,263.61\n \n3,518.15\n \n(iv) Inter-bank Sales\n-\n \n-\n \n1,612.70\n \n2,461.50\n \n3,345.00\n \n(v) Swaps\n-\n \n-\n \n525.00\n \n4.33\n \n-\n \n(vi) Invisibles IFEM\n-\n \n-\n \n-\n \n-\n \n-\n \n2. Drawings on L/C\n406.83\n \n902.43\n \n291.63\n \n204.13\n \n194.70\n \n3. External Debt Service \n178.71\n \n176.46\n \n152.16\n \n150.09\n \n178.18\n \n(i) Principal \n137.42\n \n127.63\n \n118.26\n \n94.35\n \n95.88\n \n(ii) Interest \n2.80\n \n8.49\n \n5.38\n \n5.25\n \n5.21\n \n(iii) Others 1/\n38.49\n \n40.34\n \n28.52\n \n50.49\n \n77.09\n \n4. Professional fees/Commission\n-\n \n-\n \n0.06\n \n-\n \n5. Contributions, Grants & Equities Invests. (AFC Equity Participation)\n-\n \n-\n \n-\n \n-\n \n135.55\n \n6. National Priority Projects (Niger-Delta Payments)\n0.00\n35.85\n \n50.64\n \n33.33\n \n42.52\n \n7. Other Official Payments\n2,296.01\n \n2,413.51\n \n2,173.38\n \n2,885.14\n \n2,427.90\n \n(i) Int'l Organisations & Embassies /4\n280.45\n \n244.32\n \n126.47\n \n308.03\n \n176.51\n \n(ii) Estacode\n-\n \n-\n \n42.85\n \n57.62\n \n106.26\n \n(iii) Parastatals\n195.80\n \n592.42\n \n350.58\n \n545.56\n \n458.29\n \n(iv) NNPC/JV Cash Calls\n1,789.14\n \n1,475.16\n \n1,628.69\n \n1,932.07\n \n1,564.81\n \n(v) Miscellaneous (CBN Uses)\n30.62\n \n101.61\n \n24.79\n \n41.85\n \n122.02\n \n8. Bank Charges\n-\n \n-\n \n-\n \n0.55\n \n0.05\n \n9. NSIA Transfer\n50.00\n \n-\n \n10. Funds returned to remitters\n0.23\n \n11. 3rd Party MDA Transfer\n350.00\n \nB. Through Autonomous Sources\n566.76\n \n871.76\n \n849.14\n \n201.11\n \n590.94\n \n1. Imports\n498.00\n \n847.53\n \n837.48\n \n179.91\n \n577.23\n \n2. Invisibles\n1.61\n24.24\n \n11.66\n \n21.21\n \n13.71\n \nNETFLOW THROUGH THE CBN\n(4,045.82)\n \n(956.19)\n \n2,815.25\n \n983.68\n \n(5,613.23)\n \nNETFLOW\n21,702.77\n \n28,854.79\n \n35,343.45\n \n53,312.31\n \n46,550.46\n \nSource: Central Bank of Nigeria\n1/ Includes penalty and service charges\n2/ Revised\n3/ Provisional\n4/ Includes IMF (SDR charges)\n \n \n \nTable 40 \nNigeria’s Gross External Reserves \n(US$ Million) \nMonth\n2010\n2011\n2012\n2013\n2014\nJanuary \n42,075.67\n \n33,131.83\n \n34,136.57\n \n45,824.44\n \n40,667.56\n \nFebruary\n41,410.10\n \n33,246.07\n \n33,857.37\n \n47,295.85\n \n36,923.61\n \nMarch\n40,667.03\n \n33,221.80\n \n35,197.44\n \n47,884.12\n \n37,399.22\n \nApril\n40,322.01\n \n32,835.33\n \n36,660.89\n \n47,903.09\n \n37,105.27\n \nMay\n38,815.79\n \n32,100.81\n \n36,839.53\n \n47,702.88\n \n35,398.10\n \nJune\n37,468.44\n \n31,890.91\n \n35,412.50\n \n44,957.00\n \n37,330.03\n \nJuly\n37,155.19\n \n32,521.71\n \n36,285.32\n \n45,834.11\n \nAugust\n36,769.65\n \n32,914.97\n \n39,509.81\n \n45,428.84\n \nSeptember\n34,589.01\n \n31,740.23\n \n40,640.40\n \n44,108.48\n \nOctober\n33,597.02\n \n32,594.69\n \n42,167.41\n \n44,155.11\n \nNovember\n33,059.30\n \n32,125.22\n \n42,568.26\n \n43,414.20\n \nDecember\n32,339.25\n \n32,639.78\n \n43,830.42\n \n42,847.31\n \nSource: Central Bank of Nigeria\n \n \n \n155 \nTable 41 \nNigeria Foreign Exchange Cross Rates \nNaira per Unit of Foreign Currency (Monthly Average) \n2010\nPounds\nEuro\nCFAFr\nUS$ (DAS/WDAS)\nUS$ (BDC)\nJan\n239.96\n211.72\n0.32\n149.78\n153.55\nFeb\n232.66\n203.67\n0.31\n150.22\n152.08\nMar\n223.26\n201.38\n0.31\n149.83\n151.85\nApr\n227.55\n199.09\n0.30\n149.89\n152.00\nMay\n217.36\n186.52\n0.28\n150.31\n153.26\nJun\n219.42\n181.65\n0.28\n150.19\n153.87\n1st Half Average\n226.70\n197.34\n0.30\n150.04\n152.77\nJul\n227.02\n189.83\n0.29\n150.10\n152.41\nAug\n233.10\n192.01\n0.29\n150.27\n152.23\nSep\n232.86\n195.91\n0.30\n151.03\n153.85\nOct\n237.51\n208.34\n0.32\n151.25\n153.98\nNov\n237.62\n203.64\n0.31\n150.22\n153.13\nDec\n232.78\n197.27\n0.30\n150.48\n154.57\n2nd Half Average\n233.48\n197.83\n0.30\n150.56\n153.36\n2011\nPounds\nEuro\nCFAFr\nUS$ (DAS/WDAS)\nUS$ (BDC)\nJan\n236.92\n200.57\n0.30\n151.55\n156.13\nFeb\n242.81\n205.58\n0.31\n151.94\n155.11\nMar\n243.95\n211.17\n0.32\n152.51\n157.09\nApr\n249.16\n220.08\n0.33\n153.97\n157.05\nMay\n250.11\n219.66\n0.33\n154.80\n158.05\nJun\n248.13\n220.21\n0.34\n154.50\n158.32\n1st Half Average\n245.18\n212.88\n0.32\n153.21\n156.95\nJul\n242.51\n216.08\n0.33\n151.86\n163.71\nAug\n247.53\n216.79\n0.33\n152.72\n163.10\nSep\n242.88\n211.73\n0.32\n155.26\n158.23\nOct\n239.15\n208.22\n0.32\n153.26\n161.25\nNov\n243.45\n208.78\n0.32\n155.77\n160.35\nDec\n244.53\n206.52\n0.31\n158.21\n163.30\n2nd Half Average\n243.34\n211.35\n0.32\n154.51\n161.66\n2012\nPounds\nEuro\nCFAFr\nUS$ (DAS/WDAS)\nUS$ (BDC)\nJan\n243.27\n202.52\n0.31\n158.39\n164.62\nFeb\n246.98\n206.71\n0.31\n157.87\n160.85\nMar\n246.92\n206.05\n0.31\n157.59\n159.41\nApr\n249.34\n205.00\n0.31\n157.33\n159.37\nMay\n248.03\n199.42\n0.30\n157.28\n159.67\nJun\n242.42\n193.92\n0.30\n157.44\n163.43\n1st Half Average\n246.16\n202.27\n0.31\n157.65\n161.22\nJul\n243.06\n191.56\n0.29\n157.43\n163.32\nAug\n244.87\n193.28\n0.29\n157.38\n162.24\nSep\n250.88\n200.27\n0.30\n157.34\n159.80\nOct\n250.45\n202.21\n0.31\n157.32\n159.00\nNov\n248.69\n199.91\n0.30\n157.31\n159.32\nDec\n251.56\n204.30\n0.31\n157.32\n159.26\n2nd Half Average\n248.25\n198.59\n0.30\n157.35\n160.49\n2013\nPounds\nEuro\nCFAFr\nUS$ (DAS/WDAS)\nUS$ (BDC)\nJan\n248.72\n206.97\n0.31\n157.30\n159.12\nFeb\n241.10\n208.16\n0.32\n157.30\n158.70\nMar\n234.75\n201.95\n0.31\n157.31\n159.80\nApr\n238.49\n202.88\n0.31\n157.31\n159.81\nMay\n238.34\n202.34\n0.31\n157.30\n159.57\nJun\n241.11\n205.47\n0.31\n157.31\n160.98\n1st Half Average\n240.42\n204.63\n0.31\n157.30\n159.66\nJul\n236.40\n203.77\n0.31\n157.32\n162.43\nAug\n241.35\n207.23\n0.31\n157.31\n162.28\nSep\n246.97\n207.95\n0.32\n157.32\n163.14\nOct\n250.86\n212.74\n0.32\n157.42\n165.00\nNov\n250.76\n210.17\n0.32\n157.27\n167.14\nDec\n255.13\n213.41\n0.32\n157.27\n171.40\n2nd Half Average\n246.91\n209.21\n0.32\n157.32\n165.23\n2014\nPounds\nEuro\nCFAFr\nUS$ (DAS/RDAS)\nUS$ (BDC)\nJan\n256.59\n212.10\n0.32\n157.29\n171.71\nFeb\n257.81\n212.72\n0.32\n157.31\n169.45\nMar\n258.95\n215.39\n0.33\n157.30\n171.50\nApr\n260.67\n215.14\n0.33\n157.29\n170.25\nMay\n262.41\n213.98\n0.33\n157.29\n166.85\nJun\n263.29\n211.68\n0.32\n157.29\n167.17\n1st Half Average\n259.95\n213.50\n0.32\n157.29\n169.49\nSource: Central Bank of Nigeria\n \n \n \n156 \nTable 42 \nMonthly Average Exchange Rate Movements \n(N/US$ 1.00) \n2010\nWDAS\nInterbank\nBDC\nJan\n149.78\n150.33\n153.55\nFeb\n150.22\n150.97\n152.08\nMar\n149.83\n150.08\n151.85\nApr\n149.89\n150.38\n152.00\nMay\n150.31\n151.49\n153.26\nJun\n150.19\n151.28\n153.87\n1st Half\n150.04\n150.75\n152.77\nEnd-Period\n149.99\n150.00\n153.50\nJul\n150.10\n150.27\n152.41\nAug\n150.27\n150.70\n152.23\nSep\n151.03\n152.62\n153.85\nOct\n151.25\n151.78\n153.98\nNov\n150.22\n150.55\n153.13\nDec\n150.48\n152.63\n154.57\n2nd Half\n150.56\n151.42\n153.36\nEnd-Period\n150.66\n152.00\n156.00\n2011\nWDAS\nInterbank\nBDC\nJan\n151.55\n152.47\n156.13\nFeb\n151.94\n152.86\n155.11\nMar\n152.51\n155.21\n157.09\nApr\n153.97\n154.60\n157.05\nMay\n154.80\n156.17\n158.05\nJun\n154.50\n155.65\n158.32\n1st Half\n153.21\n154.49\n156.95\nEnd-Period\n153.31\n152.52\n159.00\nJul\n151.86\n152.41\n163.71\nAug\n152.72\n153.79\n163.10\nSep\n155.26\n156.70\n158.23\nOct\n153.26\n159.82\n161.25\nNov\n155.77\n158.83\n160.35\nDec\n158.21\n162.17\n163.30\n2nd Half\n154.51\n157.29\n161.66\nEnd-Period\n158.27\n159.70\n165.00\n2012\nWDAS\nInterbank\nBDC\nJan\n158.39\n161.31\n164.62\nFeb\n157.87\n158.59\n160.85\nMar\n157.59\n157.72\n159.41\nApr\n157.33\n157.44\n159.37\nMay\n157.28\n158.46\n159.67\nJun\n157.44\n162.33\n163.43\n1st Half\n157.65\n159.31\n161.22\nEnd-Period\n157.50\n162.85\n164.00\nJul\n157.43\n161.33\n163.32\nAug\n157.38\n158.97\n162.24\nSep\n157.34\n157.78\n159.80\nOct\n157.32\n157.24\n159.00\nNov\n157.31\n157.58\n159.32\nDec\n157.32\n157.33\n159.26\n2nd Half\n157.35\n158.37\n160.49\nEnd-Period\n157.33\n157.25\n159.50\n2013\nW/RDAS\nInterbank\nBDC\nJan\n157.30\n156.96\n159.12\nFeb\n157.30\n157.52\n158.70\nMar\n157.31\n158.38\n159.80\nApr\n157.31\n158.20\n159.81\nMay\n157.30\n158.02\n159.57\nJun\n157.31\n160.02\n160.98\n1st Half\n157.30\n158.18\n159.66\nEnd-Period\n157.31\n162.60\n162.00\nJul\n157.32\n161.12\n162.43\nAug\n157.31\n161.15\n162.28\nSep\n157.32\n161.96\n163.14\nOct\n157.42\n159.83\n165.00\nNov\n157.27\n158.79\n167.14\nDec\n157.27\n159.05\n171.40\n2nd Half\n157.32\n160.32\n165.23\nEnd-Period\n157.26\n159.90\n172.00\n2014\nRDAS\nInterbank\nBDC\nJan\n157.29\n160.23\n171.71\nFeb\n157.31\n163.62\n169.45\nMar\n157.30\n164.61\n171.50\nApr\n157.29\n162.19\n170.25\nMay\n157.29\n161.86\n166.85\nJun\n157.29\n162.82\n167.17\n1st Half\n157.29\n162.55\n169.49\nEnd-Period\n157.29\n162.95\n168.00\nSource: Central Bank of Nigeria\n \n \nTable 43 \nDemand and Supply of Foreign Exchange \n(US$ Million) \nYear/Month\nW/R DAS \nBDC\nW/R DAS - \nW/R DAS-\nInterbank\nW/R DAS - Forward\nTotal \nSupply**\nRDAS \nBDC\nRDAS - \nDemand\nDemand\nForward \nDemand\nForward \nSales\nSales\nSwaps\n(Disbursement\non Maturity)\nDemand\nDemand\nForward \nDemand\nJanuary\n836.39\n303.48\n0.00\n1,139.87\n713.50\n303.48\n0.00\n0.00\n0.00\n0.00\n1,016.98\n1,016.98\n6,236.67\n556.30\n31.15\n6,824.12\n2,989.43\n556.30\n0.00\n728.00\n0.00\n493.00\n4,273.73\n4,766.73\nFebruary\n1,164.28\n299.25\n0.00\n1,463.53\n1,072.82\n299.25\n0.00\n0.00\n0.00\n0.00\n1,372.07\n1,372.07\n4,096.46\n567.05\n140.26\n4,803.77\n3,101.87\n567.05\n10.50\n2,279.00\n0.00\n2,575.00\n5,958.42\n8,522.92\nMarch\n1,911.29\n365.00\n0.00\n2,276.29\n1,801.54\n365.00\n0.00\n110.00\n0.00\n0.00\n2,276.54\n2,276.54\n4,320.04\n560.95\n333.33\n5,214.32\n3,151.59\n560.95\n101.96\n56.00\n0.00\n277.00\n3,870.50\n4,045.54\nApril\n2,156.22\n381.04\n0.00\n2,537.26\n2,154.47\n381.04\n0.00\n310.50\n0.00\n0.00\n2,846.01\n2,846.01\n3,045.49\n712.80\n81.87\n3,840.16\n2,663.92\n712.80\n261.11\n0.00\n0.00\n0.00\n3,637.83\n3,376.72\nMay\n2,019.20\n487.62\n0.00\n2,506.81\n2,318.70\n487.62\n0.00\n75.00\n0.00\n0.00\n2,881.32\n2,881.32\n2,805.74\n619.84\n0.00\n3,425.58\n2,928.49\n619.84\n271.31\n0.00\n0.00\n0.00\n3,819.63\n3,548.32\nJune\n2,661.33\n427.23\n0.00\n3,088.56\n2,650.00\n427.23\n0.00\n1,966.00\n0.00\n0.00\n5,043.23\n5,043.23\n3,401.41\n501.22\n0.00\n3,902.63\n2,398.55\n501.22\n430.98\n0.00\n0.00\n0.00\n3,330.75\n2,899.77\nFirst Half\n10,748.70\n2,263.61\n0.00\n13,012.31\n10,711.04\n2,263.61\n0.00\n2,461.50\n0.00\n0.00\n15,436.15\n15,436.15\n23,905.82\n3,518.15\n586.61\n28,010.59\n17,233.85\n3,518.15\n1,075.86\n3,063.00\n0.00\n3,345.00\n24,890.86\n27,160.00\nJuly\n3,325.56\n575.36\n136.31\n4,037.23\n3,000.00\n575.36\n41.00\n161.00\n252.21\n0.00\n4,029.57\n3,988.57\nAugust\n2,179.38\n466.52\n0.00\n2,645.90\n2,437.08\n466.52\n55.03\n0.00\n0.00\n41.00\n \n2,958.64\n2,944.60\nSeptember\n2,660.13\n480.45\n0.00\n3,140.58\n2,297.82\n480.45\n56.28\n902.00\n0.00\n76.60\n \n3,736.55\n3,756.87\nOctober\n3,541.93\n598.35\n0.00\n4,140.28\n2,274.38\n598.35\n0.00\n0.00\n0.00\n68.78\n \n2,872.73\n2,941.51\nNovember\n3,095.32\n522.70\n16.47\n3,634.49\n2,796.47\n522.70\n0.00\n0.00\n0.00\n16.47\n \n3,319.17\n3,335.64\nDecember\n3,925.53\n404.80\n3.94\n4,334.27\n2,007.76\n404.80\n0.00\n414.00\n0.00\n3.94\n \n2,826.56\n2,830.50\nSecond Half\n18,727.85\n3,048.18\n156.72\n21,932.75\n14,813.51\n3,048.18\n152.32\n1,477.00\n252.21\n206.79\n19,743.21\n19,797.69\nSource: Central Bank of Nigeria\nTotal supply* includes W/R DAS sales (spot and forward), BDC and Interbank sales as well as Swaps.\nTotal supply** includes W/R DAS spot sales, W/R DAS forward disbursement at maturity, BDC and Interbank sales as well as Swaps.\nTotal \nDemand\n2013\nRDAS-\nInterbank \nSales\nSwaps\nRDAS - Forward \n(Disbursement on \nMaturity)\nRDAS \nSales\nBDC \nSales\nTotal \nSupply*\nTotal \nSupply**\n2014\nTotal \nDemand\nW/R DAS \nSales\nBDC \nSales\nTotal \nSupply\n \n \n \nTable 44 \nSectoral Utilization of Foreign Exchange \n(US Dollar) \n(1)\n(2)\n(3)\n (1) & (3)\n(2) & (3)\n (1) & (3)\n(2) & (3)\n A. Imports\n15,895,662,183.19\n12,884,049,540.16\n14,462,883,365.74\n14,523,652,340.45\n \n16,631,013,170.43\n \n2,168,129,804.69\n2,107,360,829.98\n14.99\n14.51\n Industrial Sector\n4,016,347,536.71\n3,560,402,445.60\n4,041,448,121.96 4,637,106,615.09 4,661,644,212.04 \n620,196,090.08\n24,537,596.95\n15.35\n0.53\n Food Products\n2,991,855,972.79\n2,468,105,833.59\n2,767,756,161.15 2,476,874,436.37 2,658,782,598.59 \n-108,973,562.56\n181,908,162.22\n-3.94\n7.34\n Manufactured \nProducts\n2,471,400,781.23\n2,221,313,336.31\n2,147,236,827.27 2,198,642,063.17 2,783,304,773.17 \n636,067,945.90\n584,662,710.00\n29.62\n26.59\n Transport Sector\n1,004,052,243.78\n814,916,250.16\n755,204,035.53 854,349,155.45 940,834,300.06 \n185,630,264.53\n86,485,144.61\n24.58\n10.12\nAgricultural Sector\n145,610,478.23\n96,230,503.87\n157,895,155.41 159,110,217.03 242,451,389.17 \n84,556,233.76\n83,341,172.14\n53.55\n52.38\nMinerals\n253,016,835.36\n101,407,631.24\n164,617,930.38 252,092,780.74 180,202,551.19 \n15,584,620.81\n-71,890,229.55\n9.47\n-28.52\n Oil Sector\n5,013,378,335.09\n3,621,673,539.39\n4,428,725,134.04 3,945,477,072.60 5,163,793,346.21 \n735,068,212.17\n1,218,316,273.61\n16.60\n30.88\n B. Invisibles\n6,264,363,074.93\n7,030,622,094.86\n12,478,677,753.36 13,776,673,837.80 16,274,798,516.97 \n3,796,120,763.61\n2,498,124,679.17\n30.42\n18.13\n Business Services\n563,682,416.06\n498,182,624.12\n589,753,886.55 731,983,492.06 1,542,253,118.81 \n952,499,232.26\n810,269,626.75\n161.51\n110.70\n Communication \nServices\n178,507,891.40\n234,667,147.80 262,706,450.30 309,754,825.63 374,076,738.67 \n111,370,288.37\n64,321,913.04\n42.39\n20.77\n Construction and \nEngineering\n35,443,834.65\n76,543,901.20 11,829,909.11 75,481,705.52 45,162,720.93 \n33,332,811.82\n-30,318,984.59\n281.77\n-40.17\n Distribution \nServices\n24,035,583.92\n39,578,249.09 18,186,729.88 54,709,121.42 49,743,988.82 \n31,557,258.94\n-4,965,132.60\n173.52\n-9.08\n Educational \nServices\n89,902,725.08\n135,581,731.71 104,526,083.34 160,971,327.81 140,778,938.66 \n36,252,855.32\n-20,192,389.15\n34.68\n-12.54\n Environmental \nServices\n0.00\n91,013.00 - - \n0.00\n0.00\n Financial Services\n4,832,258,728.49\n5,116,051,518.47 10,811,773,101.58 11,470,494,899.21 13,210,340,603.21 \n2,398,567,501.63\n1,739,845,704.00\n22.18\n15.17\n Health Related and \nSocial Services\n1,273,521.80\n735,287.18\n1,394,662.89 385,906.15 333,168.32 \n-1,061,494.57\n-52,737.83\n-76.11\n-13.67\n Tourism and Travel \nRelated Services\n26,649,479.86\n47,350,208.45\n16,344,055.52 3,356,338.12 21,363,448.93 \n5,019,393.41\n18,007,110.81\n30.71\n536.51\n Recreational, \nCultural and \nSporting Services\n66,597.50\n1,923.15\n0.00 1,021,500.00 1,366,685.32 \n1,366,685.32\n345,185.32\n33.79\n Transport Services\n427,729,919.69\n728,562,831.45\n546,843,850.74 817,013,716.29 722,244,970.80 \n175,401,120.06\n-94,768,745.49\n32.08\n-11.60\nOther Services not \nIncluded Elsewhere\n84,812,376.48\n153,275,659.24\n115,319,023.45 151,501,005.59 167,134,134.50 \n51,815,111.05\n15,633,128.91\n44.93\n10.32\nTOTAL (A+B)\n22,160,025,258.12\n19,914,671,635.02\n26,941,561,119.10\n28,300,326,178.25\n \n32,905,811,687.40\n \n5,964,250,568.30\n4,605,485,509.15\n22.14\n16.27\nSource: Central Bank of Nigeria\n1/ Revised\n2/ Provisional\nPercentage Change\n2nd Half 2013\n1st Half 2014 /2\nSECTORS\n1st Half 2012/1\n2nd Half 2012\n1st Half 2013/2\nAbsolute Change\n \n \n159 \nTable 45 \nTotal External Assets of Financial Institutions \n(Naira Million) \nFirst Half 2013 1/\nFirst Half 2014 2/\n1. Monetary Authorities\n7,614,112.49\n6,580,954.19\nForeign Assets\n7,614,112.49\n6,580,954.19\nGold\n19.01\n19.01\n \nIMF Tranche\n22.62\n22.62\n \nForeign Currencies\n34,538.05\n57,913.74\n \nDemand Deposits at Foreign Banks\n7,188,388.24\n6,120,961.56\n \nof which: Domicilliary Accounts\n683,696.66\n716,973.32\n \nTreasury Bills of Foreign Governments\n1.05\n51.36\n \nSDR Holdings\n391,143.51\n401,985.90\n \n2. Semi Official Institutions\n-\n \n-\n \ni) BOI\n-\n \n-\n \nii) Others\n-\n \n-\n \n3. Deposit Money Banks\n1,986,111.81\n2,234,406.82\nTotal Assets\n9,600,224.30\n8,815,361.01\nTotal Assets (US$' Million)\n61,028.40\n56,046.24\nExchange Rate (End-period)\n157.31\n157.29\nSource: Central Bank of Nigeria\n1/ Revised\n2/ Provisional", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Quarterly_Economic_Reports/CBN 2014 Half Year Report.pdf"}
{"doc_id": "d211457625cd301df33505bd7f93e106", "text": "1 \n \nClassified as Confidential \n \nCENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 135 OF THE MONETARY POLICY \nCOMMITTEE MEETING HELD ON MONDAY 22ND AND TUESDAY 23RD MARCH 2021 \nThe Monetary Policy Committee (MPC) met on the 22nd and 23rd of March 2021 \nconfronted with downside risks to the optimism for significant improvement in \nglobal output recovery in 2021. The risks stem largely from the uncertainty \nsurrounding the efficacy of the COVID-19 vaccines in surmounting the new \nvariants of the novel coronavirus, as well as speedy deployment of the \nvaccines across the globe. In the domestic economy, the exit from recession \nin the fourth quarter of 2020 brought about a renewed hope for full recovery \nin 2021, notwithstanding the obvious downside risks to the entire global \neconomy. The Committee appraised the developments in both the global and \ndomestic economic and financial environments in the first quarter of 2021 and \nthe outlook for the rest of the year. \nNine (9) members of the Committee were in attendance. \nGlobal Economic Developments \nThe Committee noted that while vaccination against COVID-19 had gained \nsignificant grounds in major advanced economies, some emerging market \nand developing economies were yet to commence any form of vaccination. \nThis development portends an uneven recovery to global growth, as barriers \nto trade and the global supply chain are likely to remain in place much longer \nthan anticipated to prevent re-infection in countries that have achieved \nsignificant vaccination and some form of herd immunity. The growing concerns \nassociated with the efficacy of these vaccines, especially in the face of new \nvariants of the virus, however, poses a significant threat to the overall recovery \nof the global economy. The broad direction of the expected rebound in global \n \n2 \n \nClassified as Confidential \noutput recovery, therefore, varies across countries depending on the \nheadwinds confronting individual economies. \nConsequently, the International Monetary Fund (IMF) projects a growth rate of \n4.3 per cent for the advanced economies and 6.3 per cent for the emerging \nand developing economies, with a global growth rate of 5.5 per cent in 2021. \nThe downside risks to this projection are associated with concerns that the \nexisting vaccines being deployed may not effectively subdue the new and \nexisting variants of the virus and thus, restrictions may remain in place which \nmay hamper the speed of the expected recovery globally. \nPrice developments across major advanced economies remain subdued \nalongside the expectation that output gaps will remain negative into the \nmedium term. In the Emerging Market and Developing Economies (EMDEs), \nprice development was, on average, mixed, with some economies recording \ninflation rates that were significantly higher than those seen in the Advanced \nEconomies. This was mostly due to continued capital outflows, poor accretion \nto reserves and exchange rate depreciation, which has a pass-through effect \nto domestic prices. \nIn the global financial markets, conditions remain relatively stable, as central \nbanks continue to maintain expansionary monetary policy and sizeable \nstimulus packages. The huge level of monetary and fiscal injections may \nheighten the risk of financial instability, especially when central banks \ncommence adjustment of policy rates. \n \nDomestic Economic Developments \nReal Gross Domestic Product (GDP), according to the National Bureau of \nStatistics (NBS), recorded a growth rate of 0.11 per cent (year-on-year) in the \nfourth quarter of 2020, in contrast to -3.62 per cent in Q3 2020 and 2.55 per cent \nin the corresponding period of 2019. The Q4 2020 performance, was a sharp \nrebound in contrast to the two previous quarters of negative growth (-3.62 per \n \n3 \n \nClassified as Confidential \ncent in the third quarter and -6.10 per cent in the second quarter). The \nimproved performance was driven by the non-oil sector, which grew by 1.69 \nper cent in Q4 2020 from -2.51 and -6.05 per cent in Q3 and Q2 2020, \nrespectively. The major drivers were Quarrying and Other Minerals, which grew \nby 48.42 per cent and the ICT subsector, which grew by 17.64 per cent. The oil \nsector, however, contracted further by -19.76 per cent in Q4 2020, from -13.89 \nand -6.63 per cent in Q3 and Q2 2020, respectively. This was attributed largely \nto the decrease in oil production in compliance with the OPEC+ production \ncut agreement. \n \nThe Committee noted the moderation in the Manufacturing, and Non-\nmanufacturing Purchasing Managers’ Indices (PMI), which, however, \nremained below the 50 index points in February 2021, but improved to 48.70 \nindex points apiece, compared with 44.9 and 43.3 index points, respectively, \nin January 2021. The GDP growth in the fourth quarter of 2020 and expected \nrecovery in Q1 2021, were signposted by this observed improvement in the \nPMIs. \n \nThe employment level index component of the manufacturing and non-\nmanufacturing PMIs also improved moderately in February 2021 to 45.6 and \n48.0 index points, compared with 44.2 and 45.0 index points, respectively, in \nthe previous month. The Committee, however, expressed some optimism that \nthe legacy growth headwinds, attributed largely to the resurgence in infection \nrate of COVID-19 pandemic, may likely recede in the short-to-medium term, \nas the successful deployment of the COVID-19 vaccines and the various \nstimulus packages to revamp the domestic economy are sustained. \nThe Committee noted with concerns the continued uptick in inflationary \npressure for the eighteenth-consecutive month, as headline inflation (year-on-\nyear) continued on an upward trend, to 17.33 per cent at end-February 2021 \nfrom 16.47 per cent in January 2021. This increase continued to be attributed \nto the increase in both the food and core components of inflation which rose \n \n4 \n \nClassified as Confidential \nto 21.79 and 12.38 per cent in February 2021, respectively, from 20.57 and 11.85 \nper cent in January 2021. This persisting uptick in food inflation, however, was \nthe major driving factor to the uptick in headline inflation. This was due to the \nworsening security situation in many parts of the country, particularly, the food \nproducing areas, where farmers face frequent attacks by herdsmen and \nbandits in their farms. While the Bank is intervening significantly in the \nagricultural sector, the rising insecurity in some food producing areas, is limiting \nthe expected outcomes in terms of supply to the market, thus contributing to \nthe rise in food prices. The Committee further noted that the key drivers of the \nincrease in core inflation included, the hike in the price of Premium Motor Spirit \n(PMS), upward adjustment in electricity tariffs and the depreciation of the \ndomestic currency (naira). \nThe Committee observed that broad money supply (M3) grew marginally by \n0.30 per cent in February 2021, following a substantial growth of 13.54 per cent \nin December 2020. This was driven largely by the contraction in Net Foreign \nAssets (NFA). The Committee also noted that Net Domestic Assets (NDA) grew \nby 3.02 per cent in February 2021, from 2.22 per cent in December 2020. \nProvisional data showed that banking system credit to the economy increased \nby 1.75 per cent to N43.67 trillion in February 2021 from N42.92 trillion in January \n2021, reflecting the ongoing broad-based monetary and fiscal stimulus to \nvarious sectors of the economy. The Committee thus, enjoined the Bank to \nmaintain its current drive to improve access to credit to the private sector, \nwhile exploring other initiatives with the fiscal authorities to improve funding to \ncritical sectors of the economy. \nConscious of the persisting inflationary pressure fuelled largely by continued \nuptick in food prices, the Committee noted the Bank’s interventions to boost \nfood production particularly through its various Agricultural programmes. Other \ncomplementary measures included, increase in disbursement for the dry \nseason agricultural programme to increase output, the adoption of high yield \nseeds to improve productivity and the adoption of harvested produce as a \n \n5 \n \nClassified as Confidential \nmeans of loan repayment, which has stemmed hoarding and the activities of \nmiddlemen and rent seekers. The establishment of the strategic grain reserves \nfor staple crops has also helped in addressing seasonality of agricultural \ncommodities. \nIn terms of funding, the Committee noted that the Bank has disbursed funds \nunder its various agricultural interventions towards improving food supply in \nNigeira. The Committee noted the disbursement of ₦107.60 billion to 548,109 \nfarmers cultivating 703,619 hectares of land between Q4 2020 and Q1 2021 to \nboost dry season output in support of agricultural value chain development. \nTotal disbursements as at end-February 2021 amounted to ₦1.487 trillion under \nthe various agricultural programmes, of which N686.59 billion was disbursed \nunder the Commercial Agricultural Credit Scheme (CACS) and ₦601.75 billion \nunder the Anchor Borrowers Programmes (ABP) to 3,038,649 farmers to support \nfood supply and dampen inflationary pressures. \nUnder the Targeted Credit Facility, the Bank has disbursed N218.16 billion to \n475,376 beneficiaries, of which 34 per cent of beneficiaries are SMEs. Under \nAGSMEIS, N111.62 billion has been disbursed to 28,961 beneficiaries, 70 percent \nof which are in the agricultural sector. Under the Creative Industry Financing \nInitiatives mainly targeted at youths, N3.19 billion has been disbursed to 341 \nbeneficiaries, of which 53 percent is to the movie industry. \nUnder the National Mass Metering Programme, N33.45 billion has been \ndisbursed to 9 distribution companies for the procurement of 605,852 meters, \nwhile N89.89 billion has been disbursed under the Nigeria Electricity Market \nStabilisation Facility (NEMSF 2) to 11 distribution companies to improve the \nelectricity supply industry in Nigeria. \nUnder the N100 billion Health Care intervention Fund, the Bank has disbursed \nN94.34 billion, and is willing to expand the facility, to 85 projects in the \npharmaceutical industry, hospitals and State governments for both brown field \nand green field projects, mostly to expand pharmaceutical drug lines, acquire \n \n6 \n \nClassified as Confidential \nMRI and other equipment and upgrade laboratories and other hospital \nservices. \nUnder the N1.0 trillion Manufacturing Intervention Stimulus, the total of N803.36 \nbillion has been disbursed to 228 projects across various sectors in agro-allied, \nmining, steel production and packaging industries, amongst others. \nThe monthly weighted average Inter-bank call and Open Buy Back (OBB) rates \nfell to 1.80 and 1.50 per cent in February 2021 from 3.50 and 2.30 per cent in \nJanuary 2020, respectively, reflecting the continued liquidity surfeit in the \nbanking system. \nThe Committee noted the weak performance in the equities market despite \nthe recent increased patronage by domestic investors. The All-Share Index \n(ASI) and Market Capitalization (MC) continued to decline due to portfolio \nswitching from equities to fixed income securities, reflecting the perception of \nimproved yields at the long end of the yield curve. \nAll-Share Index (ASI) decreased by 1.17 per cent to 39,799.89 points on \nFebruary 26, 2021 from 40,270.72 on December 31, 2020. Similarly, Market \nCapitalization (MC) fell by 1.11 per cent to N20.82 trillion on February 26, 2021 \nfrom N21.06 trillion on December 31, 2020. This was attributed largely to investor \nsell-off, which continued to cause price depreciation of large and medium \ncapitalized stocks. \nThe MPC noted the performance of the Financial Soundness Indicators (FSIs) of \nthe DMBs which showed a Capital Adequacy Ratio (CAR) of 15.2 per cent, \nNon-Performing Loans (NPL) ratio of 6.3 per cent and Liquidity Ratio (LR) of 40.5 \nper cent, as at February 2020. On non-performing loans (NPLs), the MPC noted \nthat the ratio remained above the prudential benchmark of 5.0 per cent and \nurged the Bank to sustain its regulatory measures to bring it below the \nprudential benchmark. \nThe Committee noted with satisfaction the improvement in the level of external \nreserves, which stood at US$36.46 billion at end-February 2021, compared with \n \n7 \n \nClassified as Confidential \nUS$34.94 billion at end-January 2021. This reflects the recent upsurge in crude \noil prices on the backdrop of the renewed optimism on the successful \ndeployment of COVID-19 vaccines across the globe. \nOutlook \nThe medium-term outlook for both the domestic and global economies \nindicates cautious optimism. This is premised on the expectation of sustained \npolicy support and successful deployment of the COVID-19 vaccines around \nthe globe and its effectiveness in ensuring herd immunity. \nAvailable data and forecasts for key macroeconomic variables for the \nNigerian economy suggest further rebound in output growth for the rest of \n2021. This is predicated on the sustained, as well as additional interventions by \nthe monetary and fiscal authorities to keep up the recovery momentum in the \neconomy, favourable upsurge in crude oil prices, foreign exchange market \nstability and successful deployment of the new COVID-19 vaccines that could \nfurther stimulate economic activities and ultimately boost output growth. \nGiven the potential rebound in output growth, bolstered by the resumption of \neconomic activities post COVID-19, inflationary pressure in the economy is \nprojected to moderate in short-to-medium term. The underlying risks of the \nefficacy of the COVID-19 vaccines against known and newly emerging strains \nof the virus, the uncertainty that the existing vaccines could lead to herd \nimmunity and unequal access to COVID-19 vaccine, however, are some of the \nheadwinds that could undermine this forecast. \nThe Committee’s Considerations \nThe Committee noted the moderate recovery in output growth in the fourth \nquarter of 2020, associated mainly to the positive impacts of the several \nmonetary and fiscal measures implemented to reflate the economy, following \nthe negative consequences of the Covid-19 pandemic. This, in the \nCommittee’s consideration, provides an opportunity for further consolidation \nas most projections suggest substantial recovery in several economies across \n \n8 \n \nClassified as Confidential \nthe globe. However, the Committee was not oblivious of the downside risks to \nthe broad outlook for recovery in 2021, as efforts to achieve herd immunity \ncontinued to face significant headwinds. \nThe Committee welcomed the current efforts by the government and other \nsupport agencies in procuring vaccines and thus, urged the quick and efficient \ndeployment of the vaccines to support ongoing monetary and fiscal stimulus \ntowards full recovery of the economy in 2021 and into 2022. \nMembers expressed concerns about the unabated rising trend of domestic \nprices and re-emphasized the exigency for monetary and fiscal policy \ncollaboration to finance productive ventures, improve aggregate supply and \npush down prices. \nThe MPC reiterated its concerns on the activities of persons and groups causing \nsecurity challenges in the food producing areas of the country, as this has \ncontributed to the major uptick in food prices across the country. The \nCommittee, thus called for a collaborative and coordinated efforts by all the \nrelevant agencies and stakeholders towards addressing the prevailing \ninsecurity issues and social challenges. The Committee also called on the \ngovernment to explore the option of effective partnership with the private \nsector to improve funding sources necessary to address the huge \ninfrastructural financing deficit. \nConsidering the foregoing, the MPC noted that fiscal headroom remained \nconstrained and fragile, following the twin shocks of the pandemic and oil \nprice volatility and the continued build-up of public debt. \nThe MPC noted the Bank’s innovative efforts towards maintaining exchange \nrate stability. It also impressed on the Management to remain focused on its \ndrive to increase accretion to reserves, especially in its recent incentives to \nattract diaspora remittances into the country. \nThe Committee welcomed the relative strengthening of the money market \ncompared from its position at the end of the lockdown. Mindful of the risks \n \n9 \n \nClassified as Confidential \nconfronting the economy, it emphasised the need for the fiscal authority to \nimprove the investment climate towards attracting sustainable Foreign Direct \nInvestment (FDI). \nThe Committee commended the Bank for maintaining a robust regulatory \nenvironment despite these challenging times by ensuring that non-performing \nloans (NPL) ratio is driven down to prudential level, even as aggregate credit \ncontinue to grow in a market confronted with relative uncertainties. \nIn summary, the MPC noted the overarching need to address the twin major \nchallenges of taming the rising inflation and sustaining growth recovery in the \neconomy, while focusing on the downside risks associated with the injections. \nThe Committee’s Decision \nAt this meeting, the dilemma that confronted the MPC relates to whether to \ncontinue to focus on efforts to stimulate outputs or whether to focus on reining \nin inflation, which(at 17.33 per cent) is almost attaining the January 2017 \ninflation level of 18.72 per cent. MPC was also worried that the level of \nunemployment must be addressed swiftly to moderate the restiveness among \nthe populace. Again, members were generally of the view that given that the \nexit from recession is fragile, any decision to tighten or rein-in inflation, may \nreverse the fragile recovery and return the economy into recession. \nIn the light of the foregoing, the consensus among MPC members was that, \ngiven that inflation is substantially a supply side phenomenon, there is need to \ncontinue to focus on consolidation o the recovery process, by taking those \nactions that would continue to stimulate output growth, create employment, \nbut at the same time have an eye on effort to moderate the inflationary \npressure; using the current administrative measures being adopted by the \nBank in controlling monetary aggregates in the banking system. \nIn its consideration of whether to tighten, hold or loosen, therefore, the \nCommittee felt that with inflation at a 3-year high and price stability being the \nBank’s core mandate, a contractionary policy stance may be required to \n \n10 \n \nClassified as Confidential \ntame the rising trend. It nevertheless feels that tightening will hike the cost of \ncapital and hamper investments required to create employment and \ncontinue to boost recovery. \nOn the other hand, MPC thinks that whereas loosening would lower rate and \nimprove access to credit which will drive investment, reduce unemployment \nand stimulate aggregate demand, it feels that loosening will create excess \nliquidity, which will intensify demand pressure on the foreign exchange market, \nthereby leading to further depreciation in the currency. \nIt, therefore, feels that a hold position which encourages Management to \ncontinue to use its various intervention mechanisms to deploy liquidity into \nemployment generation and output stimulating sectors of the economy would \nbe desirable as this would help consolidate the country’s recovery process. \nThe Committee, therefore, decided by a vote of 3 members to increase MPR \nby 50, 75 and 50 basis points respectively, and 6 members voted to hold all \nparameters constant. \nIn summary, the MPC voted to: \nI. Retain the MPR at 11.5 per cent; \nII. Retain the asymmetric corridor of +100/-700 basis points around the MPR; \nIII. Retain the CRR at 27.5 per cent; and \nIV. Retain the Liquidity Ratio at 30 per cent. \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n23rd March 2021", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/MPC COMMUNIQUE NO 135 -March 22 - 23 2021.pdf"}
{"doc_id": "c95152506fea99bcfdec22484131fcf8", "text": "1 \n \nClassified as Confidential \n \n \nCENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 135 OF THE MONETARY POLICY \nCOMMITTEE MEETING HELD ON MONDAY 22ND AND TUESDAY 23RD MARCH 2021 \nThe Monetary Policy Committee (MPC) met on the 22nd and 23rd of March 2021 \nconfronted with downside risks to the optimism for significant improvement in \nglobal output recovery in 2021. The risks stem largely from the uncertainty \nsurrounding the efficacy of the COVID-19 vaccines in surmounting the new \nvariants of the novel coronavirus, as well as speedy deployment of the \nvaccines across the globe. In the domestic economy, the exit from recession \nin the fourth quarter of 2020 brought about a renewed hope for full recovery \nin 2021, notwithstanding the obvious downside risks to the entire global \neconomy. The Committee appraised the developments in both the global and \ndomestic economic and financial environments in the first quarter of 2021 and \nthe outlook for the rest of the year. \nNine (9) members of the Committee were in attendance. \nGlobal Economic Developments \nThe Committee noted that while vaccination against COVID-19 had gained \nsignificant grounds in major advanced economies, some emerging market \nand developing economies were yet to commence any form of vaccination. \nThis development portends an uneven recovery to global growth, as barriers \nto trade and the global supply chain are likely to remain in place much longer \nthan anticipated to prevent re-infection in countries that have achieved \nsignificant vaccination and some form of herd immunity. The growing concerns \nassociated with the efficacy of these vaccines, especially in the face of new \nvariants of the virus, however, poses a significant threat to the overall recovery \nof the global economy. The broad direction of the expected rebound in global \noutput recovery, therefore, varies across countries depending on the \nheadwinds confronting individual economies. \nConsequently, the International Monetary Fund (IMF) projects a growth rate of \n4.3 per cent for the advanced economies and 6.3 per cent for the emerging \nand developing economies, with a global growth rate of 5.5 per cent in 2021. \n2 \n \nClassified as Confidential \n \nThe downside risks to this projection are associated with concerns that the \nexisting vaccines being deployed may not effectively subdue the new and \nexisting variants of the virus and thus, restrictions may remain in place which \nmay hamper the speed of the expected recovery globally. \nPrice developments across major advanced economies remain subdued \nalongside the expectation that output gaps will remain negative into the \nmedium term. In the Emerging Market and Developing Economies (EMDEs), \nprice development was, on average, mixed, with some economies recording \ninflation rates that were significantly higher than those seen in the Advanced \nEconomies. This was mostly due to continued capital outflows, poor accretion \nto reserves and exchange rate depreciation, which has a pass-through effect \nto domestic prices. \nIn the global financial markets, conditions remain relatively stable, as central \nbanks continue to maintain expansionary monetary policy and sizeable \nstimulus packages. The huge level of monetary and fiscal injections may \nheighten the risk of financial instability, especially when central banks \ncommence adjustment of policy rates. \n \nDomestic Economic Developments \nReal Gross Domestic Product (GDP), according to the National Bureau of \nStatistics (NBS), recorded a growth rate of 0.11 per cent (year-on-year) in the \nfourth quarter of 2020, in contrast to -3.62 per cent in Q3 2020 and 2.55 per cent \nin the corresponding period of 2019. The Q4 2020 performance, was a sharp \nrebound in contrast to the two previous quarters of negative growth (-3.62 per \ncent in the third quarter and -6.10 per cent in the second quarter). The \nimproved performance was driven by the non-oil sector, which grew by 1.69 \nper cent in Q4 2020 from -2.51 and -6.05 per cent in Q3 and Q2 2020, \nrespectively. The major drivers were Quarrying and Other Minerals, which grew \nby 48.42 per cent and the ICT subsector, which grew by 17.64 per cent. The oil \nsector, however, contracted further by -19.76 per cent in Q4 2020, from -13.89 \nand -6.63 per cent in Q3 and Q2 2020, respectively. This was attributed largely \nto the decrease in oil production in compliance with the OPEC+ production \ncut agreement. \n \nThe Committee noted the moderation in the Manufacturing, and \nNonmanufacturing Purchasing Managers’ Indices (PMI), which, however, \nremained below the 50 index points in February 2021, but improved to 48.70 \nindex points apiece, compared with 44.9 and 43.3 index points, respectively, \n3 \n \nClassified as Confidential \n \nin January 2021. The GDP growth in the fourth quarter of 2020 and expected \nrecovery in Q1 2021, were signposted by this observed improvement in the \nPMIs. \n \nThe employment level index component of the manufacturing and \nnonmanufacturing PMIs also improved moderately in February 2021 to 45.6 \nand 48.0 index points, compared with 44.2 and 45.0 index points, respectively, \nin the previous month. The Committee, however, expressed some optimism \nthat the legacy growth headwinds, attributed largely to the resurgence in \ninfection rate of COVID-19 pandemic, may likely recede in the short-to-\nmedium term, as the successful deployment of the COVID-19 vaccines and \nthe various stimulus packages to revamp the domestic economy are \nsustained. \nThe Committee noted with concerns the continued uptick in inflationary \npressure for the eighteenth-consecutive month, as headline inflation (year-on-\nyear) continued on an upward trend, to 17.33 per cent at end-February 2021 \nfrom 16.47 per cent in January 2021. This increase continued to be attributed \nto the increase in both the food and core components of inflation which rose \nto 21.79 and 12.38 per cent in February 2021, respectively, from 20.57 and 11.85 \nper cent in January 2021. This persisting uptick in food inflation, however, was \nthe major driving factor to the uptick in headline inflation. This was due to the \nworsening security situation in many parts of the country, particularly, the food \nproducing areas, where farmers face frequent attacks by herdsmen and \nbandits in their farms. While the Bank is intervening significantly in the \nagricultural sector, the rising insecurity in some food producing areas, is limiting \nthe expected outcomes in terms of supply to the market, thus contributing to \nthe rise in food prices. The Committee further noted that the key drivers of the \nincrease in core inflation included, the hike in the price of Premium Motor Spirit \n(PMS), upward adjustment in electricity tariffs and the depreciation of the \ndomestic currency (naira). \nThe Committee observed that broad money supply (M3) grew marginally by \n0.30 per cent in February 2021, following a substantial growth of 13.54 per cent \nin December 2020. This was driven largely by the contraction in Net Foreign \nAssets (NFA). The Committee also noted that Net Domestic Assets (NDA) grew \nby 3.02 per cent in February 2021, from 2.22 per cent in December 2020. \nProvisional data showed that banking system credit to the economy increased \nby 1.75 per cent to N43.67 trillion in February 2021 from N42.92 trillion in January \n2021, reflecting the ongoing broad-based monetary and fiscal stimulus to \n4 \n \nClassified as Confidential \n \nvarious sectors of the economy. The Committee thus, enjoined the Bank to \nmaintain its current drive to improve access to credit to the private sector, \nwhile exploring other initiatives with the fiscal authorities to improve funding to \ncritical sectors of the economy. \nConscious of the persisting inflationary pressure fuelled largely by continued \nuptick in food prices, the Committee noted the Bank’s interventions to boost \nfood production particularly through its various Agricultural programmes. Other \ncomplementary measures included, increase in disbursement for the dry \nseason agricultural programme to increase output, the adoption of high yield \nseeds to improve productivity and the adoption of harvested produce as a \nmeans of loan repayment, which has stemmed hoarding and the activities of \nmiddlemen and rent seekers. The establishment of the strategic grain reserves \nfor staple crops has also helped in addressing seasonality of agricultural \ncommodities. \nIn terms of funding, the Committee noted that the Bank has disbursed funds \nunder its various agricultural interventions towards improving food supply in \nNigeria. The Committee noted the disbursement of ₦107.60 billion to 548,109 \nfarmers cultivating 703,619 hectares of land between Q4 2020 and Q1 2021 to \nboost dry season output in support of agricultural value chain development. \nTotal disbursements as at end-February 2021 amounted to ₦1.487 trillion under \nthe various agricultural programmes, of which N686.59 billion was disbursed \nunder the Commercial Agricultural Credit Scheme (CACS) and ₦601.75 billion \nunder the Anchor Borrowers Programmes (ABP) to 3,038,649 farmers to support \nfood supply and dampen inflationary pressures. \nUnder the Targeted Credit Facility, the Bank has disbursed N218.16 billion to \n475,376 beneficiaries, of which 34 per cent of beneficiaries are SMEs. Under \nAGSMEIS, N111.62 billion has been disbursed to 28,961 beneficiaries, 70 percent \nof which are in the agricultural sector. Under the Creative Industry Financing \nInitiatives mainly targeted at youths, N3.19 billion has been disbursed to 341 \nbeneficiaries, of which 53 percent is to the movie industry. \nUnder the National Mass Metering Programme, N33.45 billion has been \ndisbursed to 9 distribution companies for the procurement of 605,852 meters, \nwhile N89.89 billion has been disbursed under the Nigeria Electricity Market \nStabilisation Facility (NEMSF 2) to 11 distribution companies to improve the \nelectricity supply industry in Nigeria. \nUnder the N100 billion Health Care Intervention Fund, the Bank has disbursed \nN94.34 billion, and is willing to expand the facility, to 85 projects in the \npharmaceutical industry, hospitals and State governments for both brown field \n5 \n \nClassified as Confidential \n \nand green field projects, mostly to expand pharmaceutical drug lines, acquire \nMRI and other equipment and upgrade laboratories and other hospital \nservices. \nUnder the N1.0 trillion Manufacturing Intervention Stimulus, the total of N803.36 \nbillion has been disbursed to 228 projects across various sectors in agro-allied, \nmining, steel production and packaging industries, amongst others. \nThe monthly weighted average Inter-bank call and Open Buy Back (OBB) rates \nfell to 1.80 and 1.50 per cent in February 2021 from 3.50 and 2.30 per cent in \nJanuary 2020, respectively, reflecting the continued liquidity surfeit in the \nbanking system. \nThe Committee noted the weak performance in the equities market despite \nthe recent increased patronage by domestic investors. The All-Share Index \n(ASI) and Market Capitalization (MC) continued to decline due to portfolio \nswitching from equities to fixed income securities, reflecting the perception of \nimproved yields at the long end of the yield curve. \nAll-Share Index (ASI) decreased by 1.17 per cent to 39,799.89 points on \nFebruary 26, 2021 from 40,270.72 on December 31, 2020. Similarly, Market \nCapitalization (MC) fell by 1.11 per cent to N20.82 trillion on February 26, 2021 \nfrom N21.06 trillion on December 31, 2020. This was attributed largely to investor \nsell-off, which continued to cause price depreciation of large and medium \ncapitalized stocks. \nThe MPC noted the performance of the Financial Soundness Indicators (FSIs) of \nthe DMBs which showed a Capital Adequacy Ratio (CAR) of 15.2 per cent, \nNon-Performing Loans (NPL) ratio of 6.3 per cent and Liquidity Ratio (LR) of 40.5 \nper cent, as at February 2020. On non-performing loans (NPLs), the MPC noted \nthat the ratio remained above the prudential benchmark of 5.0 per cent and \nurged the Bank to sustain its regulatory measures to bring it below the \nprudential benchmark. \nThe Committee noted with satisfaction the improvement in the level of external \nreserves, which stood at US$36.46 billion at end-February 2021, compared with \nUS$34.94 billion at end-January 2021. This reflects the recent upsurge in crude \noil prices on the backdrop of the renewed optimism on the successful \ndeployment of COVID-19 vaccines across the globe. \n6 \n \nClassified as Confidential \n \nOutlook \nThe medium-term outlook for both the domestic and global economies \nindicates cautious optimism. This is premised on the expectation of sustained \npolicy support and successful deployment of the COVID-19 vaccines around \nthe globe and its effectiveness in ensuring herd immunity. \nAvailable data and forecasts for key macroeconomic variables for the \nNigerian economy suggest further rebound in output growth for the rest of \n2021. This is predicated on the sustained, as well as additional interventions by \nthe monetary and fiscal authorities to keep up the recovery momentum in the \neconomy, favourable upsurge in crude oil prices, foreign exchange market \nstability and successful deployment of the new COVID-19 vaccines that could \nfurther stimulate economic activities and ultimately boost output growth. \nGiven the potential rebound in output growth, bolstered by the resumption of \neconomic activities post COVID-19, inflationary pressure in the economy is \nprojected to moderate in short-to-medium term. The underlying risks of the \nefficacy of the COVID-19 vaccines against known and newly emerging strains \nof the virus, the uncertainty that the existing vaccines could lead to herd \nimmunity and unequal access to COVID-19 vaccine, however, are some of the \nheadwinds that could undermine this forecast. \nThe Committee’s Considerations \nThe Committee noted the moderate recovery in output growth in the fourth \nquarter of 2020, associated mainly to the positive impacts of the several \nmonetary and fiscal measures implemented to reflate the economy, following \nthe negative consequences of the Covid-19 pandemic. This, in the \nCommittee’s consideration, provides an opportunity for further consolidation \nas most projections suggest substantial recovery in several economies across \nthe globe. However, the Committee was not oblivious of the downside risks to \nthe broad outlook for recovery in 2021, as efforts to achieve herd immunity \ncontinued to face significant headwinds. \nThe Committee welcomed the current efforts by the government and other \nsupport agencies in procuring vaccines and thus, urged the quick and efficient \ndeployment of the vaccines to support ongoing monetary and fiscal stimulus \ntowards full recovery of the economy in 2021 and into 2022. \nMembers expressed concerns about the unabated rising trend of domestic \nprices and re-emphasized the exigency for monetary and fiscal policy \n7 \n \nClassified as Confidential \n \ncollaboration to finance productive ventures, improve aggregate supply and \npush down prices. \nThe MPC reiterated its concerns on the activities of persons and groups causing \nsecurity challenges in the food producing areas of the country, as this has \ncontributed to the major uptick in food prices across the country. The \nCommittee, thus called for a collaborative and coordinated efforts by all the \nrelevant agencies and stakeholders towards addressing the prevailing \ninsecurity issues and social challenges. The Committee also called on the \ngovernment to explore the option of effective partnership with the private \nsector to improve funding sources necessary to address the huge infrastructural \nfinancing deficit. \nConsidering the foregoing, the MPC noted that fiscal headroom remained \nconstrained and fragile, following the twin shocks of the pandemic and oil \nprice volatility and the continued build-up of public debt. \nThe MPC noted the Bank’s innovative efforts towards maintaining exchange \nrate stability. It also impressed on the Management to remain focused on its \ndrive to increase accretion to reserves, especially in its recent incentives to \nattract diaspora remittances into the country. \nThe Committee welcomed the relative strengthening of the money market \ncompared from its position at the end of the lockdown. Mindful of the risks \nconfronting the economy, it emphasised the need for the fiscal authority to \nimprove the investment climate towards attracting sustainable Foreign Direct \nInvestment (FDI). \nThe Committee commended the Bank for maintaining a robust regulatory \nenvironment despite these challenging times by ensuring that non-performing \nloans (NPL) ratio is driven down to prudential level, even as aggregate credit \ncontinue to grow in a market confronted with relative uncertainties. \nIn summary, the MPC noted the overarching need to address the twin major \nchallenges of taming the rising inflation and sustaining growth recovery in the \neconomy, while focusing on the downside risks associated with the injections. \nThe Committee’s Decision \nAt this meeting, the dilemma that confronted the MPC relates to whether to \ncontinue to focus on efforts to stimulate outputs or whether to focus on reining \nin inflation, which(at 17.33 per cent) is almost attaining the January 2017 \ninflation level of 18.72 per cent. MPC was also worried that the level of \n8 \n \nClassified as Confidential \n \nunemployment must be addressed swiftly to moderate the restiveness among \nthe populace. Again, members were generally of the view that given that the \nexit from recession is fragile, any decision to tighten or rein-in inflation, may \nreverse the fragile recovery and return the economy into recession. \nIn the light of the foregoing, the consensus among MPC members was that, \ngiven that inflation is substantially a supply side phenomenon, there is need to \ncontinue to focus on consolidation of the recovery process, by taking those \nactions that would continue to stimulate output growth, create employment, \nbut at the same time have an eye on effort to moderate the inflationary \npressure; using the current administrative measures being adopted by the Bank \nin controlling monetary aggregates in the banking system. \nIn its consideration of whether to tighten, hold or loosen, therefore, the \nCommittee felt that with inflation at a 3-year high and price stability being the \nBank’s core mandate, a contractionary policy stance may be required to \ntame the rising trend. It nevertheless feels that tightening will hike the cost of \ncapital and hamper investments required to create employment and continue \nto boost recovery. \nOn the other hand, MPC thinks that whereas loosening would lower rate and \nimprove access to credit which will drive investment, reduce unemployment \nand stimulate aggregate demand, it feels that loosening will create excess \nliquidity, which will intensify demand pressure on the foreign exchange market, \nthereby leading to further depreciation in the currency. \nIt, therefore, feels that a hold position which encourages Management to \ncontinue to use its various intervention mechanisms to deploy liquidity into \nemployment generation and output stimulating sectors of the economy would \nbe desirable as this would help consolidate the country’s recovery process. \nThe Committee, therefore, decided by a vote of 3 members to increase MPR \nby 50, 75 and 50 basis points respectively, and 6 members voted to hold all \nparameters constant. \nIn summary, the MPC voted to: \nI. Retain the MPR at 11.5 per cent; \nII. Retain the asymmetric corridor of +100/-700 basis points around the MPR; \nIII. Retain the CRR at 27.5 per cent; and \nIV. Retain the Liquidity Ratio at 30 per cent. \n9 \n \nClassified as Confidential \n \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n23rd March 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10 \n \nClassified as Confidential \n \nPERSONAL STATEMENTS BY THE MONETARY POLICY COMMITTEE MEMBERS \n1. ADAMU, EDWARD LAMETEK \nThe global economy continues to show prospects of recovery underpinned by \nprogress with COVID-19 vaccination which has been ramped up especially in \nadvanced economies in the last 3 months. Mass vaccination is expected to \nreduce disease transmission and result in herd immunity. Progress with \nvaccination has further emboldened governments around the world to allow \nmuch wider ranges of economic activity, supported by massive stimulus \npackages. From a contraction of about 4.0 per cent in 2020 attributable mainly \nto the fallouts of the COVID-19 pandemic and commodity price volatility, \nglobal output growth for 2021 was upgraded to 5.5 per cent by the \nInternational Monetary Fund (IMF) in January 2021. The World Bank is equally \noptimistic, though slightly less than the IMF, in their projection of 4.0. per cent \nglobal growth in 2021. \n \nThere has however continued to be wide disparities between countries in terms \nof progress with vaccination. This has resonated in disparities in the prospects \nof economic recovery with the advanced economies showing very strong \nrecovery outlook. The growth outlook for emerging markets and developing \neconomies (EMDEs) appears similarly good on the average at around 6.0 per \ncent for 2021. This is however largely anchored on Emerging and Developing \nAsia with over 8.0 per cent growth in view. Sub-Saharan Africa and Middle East \nare not showing as much prospects with 3.2 and 3.0 per cent growth \nprojections, respectively, given their poor access/progress with vaccination \nand other structural challenges. \n \nOptimism around global output recovery continues to grow despite the \nuncertainty arising from renewed waves and new variants of the corona virus. \nOther downside risks include adjustment cost of the pandemic on the global \neconomy as well as financial fragilities in many countries. In EMDEs in particular, \neconomic policy faces extra challenges of rising inflation and exchange rate \ninstability. On their part, central banks and fiscal authorities around the world \nhave continued to intensify stimulus injections to spur economic activity. And \nso, across the world, policy rates remained generally low in Q1 2021 even as \ninflation rates had started to crawl up. \n \nAs nearly all countries race to vaccinate against COVID-19, we expect the \nvaccination divide between the advanced economies and other economies \nto close soon enough. In the end, the quality of economic policy support to \n11 \n \nClassified as Confidential \n \nactivity will be the most important determinant of variations in recovery \noutcomes among countries. At 1.1 – 1.5 per cent (January 2021) growth \nprojection, Nigeria’s economic recovery outlook was not favourably \ncomparable to those of some of her peers, whether EMDEs generally or \ncommodity-exporting EMDEs. I could see the continued relevance of the \ndevelopment finance interventions by the CBN and other growth-promoting \nfiscal actions aimed at strengthening output recovery. \n \nDespite growth in Q4 2020, overall real GDP for the year contracted relative to \n2019. It is however relieving that Agriculture posted 3.42 per cent expansion in \nthe quarter from 1.39 per cent in Q3, which goes to show that the Bank’s focus \non, and investment in the sector had started to show concrete results. \nHowever, the overall output horizon continues to be uncertain. First, the \nunemployment rate rose to 33.0 per cent in Q4 2020, from 27.0 per cent in Q2 \n2020, reflecting tighter labour market conditions. Second, both manufacturing \nand non-manufacturing Purchasing Manager’s Indexes (PMIs) remained \nbelow the 50 index points at 48.70 index points apiece, in February 2021, \nthough improved slightly relative to January 2021. These indicators broadly \nunderscore the fragility of recent improvements in economic activity. It \nappears, the economic damage caused by the COVID-19 pandemic has \nbeen magnified by long-standing structural weaknesses in the economy. The \nprojected level of real output growth for 2021 can neither significantly ease the \nemployment crisis nor the domestic supply gap. As such, economic policy must \ncontinue to prioritise production to improve the growth outlook. In addition to \nproviding stimulus for growth, incentivizing private investment in key sectors \nincluding infrastructure will aid faster and stronger recovery of domestic \noutput. \n \nI noted also the challenges posed by sustained inflation buildup. Headline \ninflation (year-on-year) rose to 17.33 per cent in February 2021 from 16.47 per \ncent in January 2021, reflecting largely the impact of sustained acceleration in \nfood prices, driven mainly by supply-side factors – high transportation costs, \nsecurity challenges and the lingering impact of the pandemic-induced \nlockdown. Generally, dealing concurrently with rising inflation and slack \neconomic activity can be challenging for monetary policy because policy \ninstruments work more often on the basis of trade-off between output and \ninflation. Yet, the available data up to mid-March 2021 do not really suggest \na feasible trade-off between inflation and economic growth in the short-term. \n \nThe current episode of high inflation has its most important roots in supply \nconstraints and exchange rate pass-through to domestic prices. In the \n12 \n \nClassified as Confidential \n \ncircumstance, tightening the stance of monetary policy may not rein-in the \npressure on consumer prices; it could instead stall the fragile output recovery. \nTherefore, policy responses at this time must aim in part at increasing output \nand freeing supply chains. This and other considerations, which I have \nhighlighted below, informed my choice of a hold position at the March 2021 \nMonetary Policy Committee (MPC) meeting. \n \nVery much like I have argued in my previous statements, a double-dip \nrecession or even a low-growth trap (post-recession) must be avoided. The risks \nare quite palpable. Rising production costs, slowing foreign exchange inflow, \ninsecurity and the second wave of COVID-19 are some of the immediate \ndownside risks to domestic economic growth. These same conditions have \ntended to aggravate consumer price pressures in recent months. Although, \nthe economy exited recession in Q4 2020, some of the key growth pillars – \nmanufacturing and services especially - continued to struggle against the \nheadwinds noted earlier. \n \nI believe that the prospects of improved domestic output in 2021 hinge mainly \non effective liquidity support, robust private credit and confidence building \nthrough predictable policy actions. On liquidity support, the current stance of \nmonetary policy, complemented by the development finance interventions \nshould suffice. Meanwhile, credit to the private sector remains robust due to \nsome of the administrative actions around the cash reserve requirement (CRR) \nas well as the loan-to-deposit ratio (LDR) policy. As industry funding grows, the \nshort- to-medium term outlook for new credit should continue to be positive. \nImportantly, the banking industry fundamentals - particularly, CAR, NPLs and \nliquidity ratio – were impressive in Q1 2021. Barring any major shock, the industry \nis expected to remain resilient and supportive of economic expansion in the \nrest of the year. \n \nViewed holistically, I am persuaded that the extant monetary policy course is \noptimal and should be allowed some time to fully evolve in terms of impact on \ndomestic production and prices. I therefore voted to: \nI. \nRetain the MPR at 11.5 per cent; \nII. \nRetain the Asymmetric Corridor at +100/-700 basis points around the \nMPR; \nIII. \nRetain the CRR at 27.5 per cent; and \nIV. \n Retain the Liquidity Ratio at 30 per cent. \n13 \n \nClassified as Confidential \n \n2. ADENIKINJU, ADEOLA FESTUS \nInternational Economic Environment \nThe international economic environment continues to improve as the world \novercomes the effects of the pandemic and vaccines become increasingly \naccessible. Global output growth for 2021 is expected to improve to 5.5% from \n-3.5% in 2020. Advanced and emerging economies are projected by the IMF \nto grow by 4.3% and 6.3% respectively in 2021. Global trade is projected to \nrebound strongly to 7.2% in 2021 from -9.2% in 2020. Global commodity prices, \nincluding oil, are all projected to show strong recovery. Global inflation will \nremain muted in the near future suggesting that fiscal consolidation in the \nadvanced economy may not occur in the near term. \nHowever, there are several headwinds to the Nigerian economy from the \nglobal economy: the rise in commodity prices implies rising imported inflation \nto Nigeria. The rising oil prices occur amidst declining output in compliance \nwith OPEC agreements. It also means high costs of financing imports of refined \nproducts to Nigeria. In addition, the problems associated with vaccines \ndistribution, vaccines hesitancy and spread of new variants of the virus will \nimpact on the pace of global economy recovery. The uncertainty about \nCOVID-19 pandemic will affect global capital flows in 2021. \nDomestic Economy \nThe Banking Stability Report shows that the banking industry remains stable and \nresilient. The Capital Adequacy Ratio, Non-Performing Loans Ratio and the \nLiquidity Ratio remain quite encouraging and not significantly different from \nwhere they were at the January meeting of the MPC. However, there were \nmoderate declines in Returns on Equity and Returns on Assets and a significant \nrise in the share of operating incomes in total interest incomes of Deposit \nMoney Banks. All measures of Bank Size, Total Assets, Credit and Deposits \nsignificantly rose year-on-year. Over N4.56 trillion additional credit was created \nin the last one year, N300 billion in the last one month and N6.95 trillion of \nadditional deposits. The Other Financial Institutions have also expanded credit \nappreciably, thereby providing credit support to women, workers, and informal \nsector operators, those that are discriminated against by the traditional banks. \nData on the industry’s credit disbursement shows that 83.04% of banking \ncreditors were able to access credit at below 15% lending rates. \nThe Economic Report shows mixed performance of the Nigerian economy. \nAlthough Nigeria took an early exit from economic recession in 2020Q4, the \noverall GDP growth for the year was negative and the recovery is tepid. \n14 \n \nClassified as Confidential \n \nGrowth forecast for Nigeria for 2021 ranged from 1.1% by the World Bank to \n3.0% by the Federal Ministry of Finance, Budget, and National Planning. The \ncurrent growth recovery is led by agriculture and services. Oil refining and air \ntransport are the major laggard sub-sectors. Data released by the NBS for 2020 \nshow that unemployment and underemployment and invariably poverty rates \nhave worsened in the last one year due to the pandemic. \nInflation rose to 17.33% in February 2021, fueled primarily by food inflation. Food \ninflation rose to 20.57% in February 2021 from 12.29% in February 2020. The prices \nof both locally produced and imported food rose between January and \nFebruary 2021. Naira exchange rate depreciated across the various windows, \nthe I&E and BDC. External reserves also declined from US$36.6 billion in \nDecember 2020 to US$34.46 billion in February 2021. The CBN has spent over \nUS$1.3billion to defend the naira between January and February 2021. It is early \nin the day to know the extent to which the new policy of CBN to boost \nremittances will impact on pressures in the foreign exchange market. Capital \nimports, though have picked up in recent months is still far below the level it \nwas in January 2020. \n \nMy Concern \nThe rising inflationary pressure seems to be unabated. Bank Staff projection \nshows that inflation will remain above 17.9% by 2021M04. This is also fueling \ninflation expectation by economic agents. Nigeria has one of the highest \ninflation rates in the world. High inflation induces macroeconomic instability. It \nwill negatively affect the welfare of households and fixed income earners. \nI fully support the direction of current policy of the MPC which is to support \ngrowth and in the medium to long term, expand aggregate supply curve of \nthe economy and eventually lower aggregate price level. Empirical studies \nshow that the Bank’s interventions contributed significantly to the country’s \nearly exit from recession in 2020 and the better-than-expected real GDP \ngrowth in 2020. \nHowever, the persistent high inflation figure, which is largely driven by structural \nfactors, including insecurity all over the country, also has elements of monetary \nphenomenon, as Staff estimates show that broad money (M3) and net \ndomestic credits were above their provisional levels in December 2020. \nThe liquidity in the economy is contributing to the pressures in the foreign \nexchange market as rational economic agents flee to safer currency amid low \n15 \n \nClassified as Confidential \n \nreturns on fixed income assets and rising inflation rate. The planned huge \nbudget deficit for 2021 Fiscal Year, will further fuel local inflation rate. \nAdded to these, the rising global commodity prices, plus the depreciating \nexchange rates and relatively high costs of shipping and clearing of goods at \nthe Nigerian ports have all contributed to high imported inflation and reduce \nthe extent to which imports could have mitigated the impacts of high domestic \nfood prices in the short term. \nHowever, the weak economic growth, rising unemployment and poverty also \nmean that we cannot aggressively pursue strict price stability at a time we are \nslowly crawling out of recession. I see the CBN intervention credit as \ncomplementary and not substitution to credit from the deposit money banks. \nAlso given the focus of capital expenditure of the government this year, it then \nmeans that we can focus on growth and tackle inflation at the same time. \nHowever, I believe the persistent high inflation rate is concerning enough for \nCBN to start shifting its focus to address it. A signaling to economic agents that \nprice stability remains the focus of the CBN will also curb some of the excesses \nin the foreign exchange market and reduce the liquidity induced inflationary \npressures on the economy and protect fixed income earners. \n \nMy Vote \nConsidering the above, I cast my vote to: \ni) \nIncrease MPR by 75 basis points to 12.25% \nii) \nRetain CRR at 27.5% \niii) \nMaintain Liquidity ratio at 30% \niv) \nRetain Asymmetric Corridor around the MPR at +100/-700 basis \npoints. \n \n \n \n \n \n \n \n \n \n \n16 \n \nClassified as Confidential \n \n3. AHMAD, AISHAH N. \nThe March 2021 Monetary Policy Committee (MPC) meeting held amidst \nrenewed optimism for global recovery buoyed by significant fiscal and \nmonetary policy stimulus deployed across the world. These hopes are however, \nmoderated by recent surge in infections in some parts of the world which \nsparked fresh round of lockdowns, uncertainty about side-effects of the \nvaccines and their efficacy in preventing new strains of the corona virus and \nslow roll-out of vaccination programmes, especially in developing countries. \nGrowth expectations have thus been varied across jurisdictions - the IMF \nprojects that while Emerging Markets and Developing Economies will grow at \n6.30 per cent in 2021, Advanced Economies are projected to grow at 4.30 per \ncent. Global output growth is projected at 5.5 per cent in 2021 and 4.20 per \ncent in 2022. Continued monetary and fiscal stimulus and seamless \nadministration of vaccines will be required to maintain the positive momentum \nof global output growth. \nOn a positive note, the domestic economy rebounded in Q4 2020 exceeding \nanalysts’ expectations. Nigeria exited recession in Q4 2020 with output growth \nof 0.11 per cent compared with contraction of 3.62 and 6.10 per cent in Q3 \nand Q2 2020, respectively. It is further gratifying to note that output growth was \ndriven by the non-oil sector which grew by 1.69 per cent in Q4 from -2.51 and \n-6.05 per cent in Q3 and Q2, respectively. The major sectors driving growth \nincluded Quarrying and Other Minerals which grew by 48.42 per cent, ICT \nwhich grew by 17.64 per cent and Agriculture which grew by 3.42 per cent. \nExpansion in domestic output in Q4 2020 moderated the negative output gap \nto -2.80 per cent of GDP from -5.50 per cent in Q3. Nonetheless, business \nsentiments remained weak as Manufacturing and Non-Manufacturing \nPurchasing Managers’ Indices (PMIs) both stayed below the 50 points \nbenchmark at 48.70 per cent in February 2021. Unemployment rate also \nworsened to 33.30 per cent in Q3 2020 from 27.10 per cent in Q2 2020, thus \nhighlighting the need to intensify measures aimed at boosting economic \nactivities, particularly in labour intensive sectors. \nPersistent high inflation remains a key concern for monetary policy that will \nrequire active policy response. Headline inflation rose for the 18th consecutive \nmonth to 17.33 per cent in February 2021 from 16.47 per cent in January 2021, \ndriven mainly by increases in food prices. Structural bottlenecks such as security \nchallenges, which prevented farmers in major food producing regions from \naccessing their farms, and infrastructural gaps that hampered movement of \n17 \n \nClassified as Confidential \n \nfood crops from farm to market, exacerbated inflationary pressures thus \nreversing the decelerating trend of inflation observed in previous months. \nThere is an urgent need to address the structural rigidities fueling inflationary \npressures to ramp up productive capacity in the agricultural sector and reduce \nsupply side impact on food prices. In this regard, efforts at tackling security \nchallenges faced in various geo-political regions must be intensified, so also is \nthe execution of fiscal initiatives to improve transportation and logistics \ninfrastructure. \nRelative stability recorded in the I & E segment of the foreign exchange market. \nThis is expected to be maintained given increase in international price of crude \noil to US$66.22 per barrel in February 2021 (December 2020; US$51.27) above \nbudget benchmark of US$40 per barrel. Continued implementation of policies \naimed at improving foreign exchange receipts (diaspora remittances and \nnon-oil exports) and eliminating spurious and speculative demand will help \nreduce volatility in the parallel market. \nThe Nigerian payment and financial system continued to be resilient supporting \nthe economy recovery, whilst sustaining sound financial soundness indicators. \nBanking industry capital adequacy increased to 15.20 per cent in February \n2021 from 15.10 per cent in December 2020 as a result of capitalization of year-\nend earnings. Liquidity remained robust at 40.50 per cent, which is above the \nprudential minimum of 30.0 per cent whilst the Bank also has at its disposal \nsufficient Cash Reserve Requirement buffers to provide liquidity backstops to \nthe industry as required. Non-performing loan ratio deteriorated marginally \nfrom 6.10 per cent in December 2020 to 6.30 per cent in February 2021 in line \nwith growth in the loan portfolio. Most importantly, credit to the economy grew \nby N642.19 billion from N20,484.71 billion at end-December 2020 to N21,126.90 \nbillion as at end-February 2021, with significant increases recorded in major \nsectors driving domestic GDP growth-manufacturing, agriculture, construction \nand general commerce. Gross credit increased by N5,559.24 billion between \nend-May 2019 and end-February 2021 due to the success of the Loan-to-\nDeposit Ratio policy which also helped to moderate loan pricing. Maintaining \nthe positive trajectory of credit growth, especially in critical sectors \n(manufacturing, retail & SMEs) will be instrumental to accelerating output \ngrowth in the short to medium term. Whilst the financial system has been crucial \nin propelling the economy out of recession, the Bank must remain vigilant and \nproactively anticipate and mitigate macroeconomic risks which may \nnegatively impact the industry. This is particularly important as the Bank reviews \nthe status of regulatory forbearance granted to restructure credit exposures in \nsectors adversely impacted by COVID-19. It is imperative that the banking \n18 \n \nClassified as Confidential \n \nsector builds adequate capital buffers to preserve resilience and enable it \ncontinuously deliver on its intermediation role in the economy on a sustainable \nbasis. \nPolicy Considerations and Decision \nEnsuring that the economy successfully navigates out of stagflation (low \ngrowth, accelerating inflation and high unemployment) is the principal \nchallenge faced by monetary policy at this time. Whilst the primary mandate \nof the monetary authority remains maintaining price stability, tightening \nmonetary policy stance to rein in inflation may have unintended \nconsequences for monetary aggregates and may reverse positive trend of \noutput growth. \nIt is important to note that underlying factors driving domestic prices are \nstructural and supply side related, and addressing these fundamental issues is \noutside the purview of traditional monetary policy tools. Accordingly, efforts \nshould be focused on increasing the level of output as a means to driving down \nprices. Holding policy parameters at present levels is the current plausible \npolicy option that will help support the trajectory of output growth which \nremains paramount to consolidate on the fragile recovery. \nThus, I vote to hold all parameters at existing levels, i.e; Retain the MPR at 11.5 \nper cent; Retain the Asymmetric Corridor of +100/-700 basis points around the \nMPR; Retain the CRR at 27.5 per cent; and Retain the Liquidity Ratio at 30 per \ncent. \n \n \n \n \n \n \n \n \n \n19 \n \nClassified as Confidential \n \n4. ALIYU, AHMED \nINTERNATIONAL AND DOMESTIC ECONOMIC DEVELOPMENTS \nThe global economic recovery remains challenged by the persistence of the \nCOVID-19 pandemic, despite the widespread distribution of vaccines. The \noptimism for a rebound in economic activities is dampened by the uneven \nand delayed access to vaccines, especially in the Emerging Market and \nDeveloping Economies (EMDEs), creating prospects of a partial and \nimbalanced global economic recovery. It is important, therefore, that relevant \ninstitutions provide the required support to ensure timely and more even \ndistribution of vaccines across the globe, even though, the emergence of new \nstrains of the virus particularly in some parts of Europe, Africa and South \nAmerica raise concerns about the efficacy of ongoing vaccinations. \nThe IMF forecast global output growth at 5.5% from -3.5% in 2020. This, however, \nis dependent on increased contact-intensive activity enabled by continued \nand coordinated fiscal and monetary interventions, improvements in \naggregate demand, household consumption, investment and trade, as well \nas vaccines rollouts. \nIn light of the deployment of the COVID-19 vaccines across countries and \nregions, global activity has begun to pick up, with salutary impact on trade \nvolumes. The World Trade Organization forecasts a rebound in global trade to \n7.2% in 2021 from -9.2% in 2020. While the possibility of prolonged lockdowns \nloom, following new surge in COVID-19 cases, it is believed that ample fiscal \nand monetary support in the Advanced Economies is likely to have a positive \nspillover effect on their trading partners. \nSubsequent to the gradual resumption of economic activities in several \ncountries, there has been a reasonable increase in the international price of \ncrude oil compared with the pre-pandemic period when oil prices \nexperienced a rapid downturn following the price war between Saudi Arabia \nand Russia. For instance, in February 2021, the OPEC reference basket monthly \naverage crude oil price increased by US$6.50 or 11.95% (m-o-m), to an \naverage of US$60.88 from US$54.38 recorded in January 2021.Although the \ndownside risks confronting the crude oil market appear to have moderated, \nthereby raising expectations that prices will remain around the mid-50s per \nbarrel in the near to medium term, there is no better time to reset the economy \nand reduce the excessive reliance on the commodity as the mainstay. This is \nbecause the transition to the new climate economy has gathered momentum \n20 \n \nClassified as Confidential \n \nand poses a serious downside risk to the future of crude oil demand and \nproduction. \nNigeria exited economic recession following a positive output growth of 0.11% \nin Q4 from -3.62% in Q3 2020. Growth was led by the Agricultural and Services \nSectors which grew by 3.42% and 1.31%, respectively, in Q4 2020 from 1.39% \nand -5.49%, respectively, in Q3 2020.The major drivers of growth included the \nexpansion in crop production by 3.68%, increased demand for food items \nduring year-end festivities, increased economic activities following the \nreopening of the economy, and the growth in ICT by 17.64%. Industrial growth \nperformance contracted for the third consecutive quarter. \nGrowth performance was validated by the performance of the Manufacturing \nand Non-Manufacturing Purchasing Managers Indices, which at 48.7 index \npoints apiece were a remarkable improvement from the 44.9 and 43.3 index \npoints, respectively, recorded in January 2021. The month-on-month \nimprovements in the Manufacturing and Non-manufacturing PMIs, signals the \nresumption and gradual recovery in economic activities. \nData from the National Bureau of Statistics revealed a worrisome \nunemployment rate of 33.0% in Q4 2020. Increased unemployment was driven \nlargely by persistent structural inadequacies, worsened by a challenging \noperating business environment during the Pandemic. Notwithstanding, \ncurrent fiscal and monetary interventions should target both low and middle \nincome groups to drive aggregate demand, output and employment. \nInflationary pressure persisted for the eighteenth consecutive month. Headline \ninflation rose to 17.33% at end February 2021, well above the implicit target \ncorridor of 6 - 9%. Headline inflation was mainly driven by the rise in food \ninflation, which increased to 21.79% in February 2021 from 20.57% in January \n2021. Core inflation (y-o-y) grew to 12.38% in February 2021 from 11.85% in \nJanuary 2021. On a month-on-month basis, Headline, food and core inflation \ngrew to 1.54%, 1.89%, and 1.21% in February 2021, from 1.49%. 1.83% and 1.26%, \nin January 2021, respectively. \nBroad Money (M3) contracted by -0.59% in January 2021 from 13.54 percent in \nDecember 2020. The annualized growth rate at -7.08 percent was below the \n2021 provisional benchmark of 4.66%. Credit continued an upward trajectory \nsince the inception of the Loan to Deposit Ratio (LDR) policy. Credit to the \nprivate sector grew by 1.36% to N30,558.79 billion in January 2021 from \nN30,149.60 billion in December 2020. At an annualized rate of 16.32 percent, \ngrowth in credit to the private sector shot above the benchmark of 14.14 %. To \nimprove prospects of continuing credit growth in the near future, commercial \n21 \n \nClassified as Confidential \n \nbanks should be encouraged to show greater commitment and compliance \nwith the LDR policy. \nFinancial soundness indicators remained stable and resilient. NPLs ratio which \nstood at 6.38% at end-February 2021, have over the past twelve months \nremained relatively flat and moderately above the prudential maximum of \n5.0%.On the other hand, the stock market witnessed a bearish performance \nlargely due to profit taking activities of investors, uncertainty surrounding \neconomic activities, and higher yields on some financial instruments. \nCONSIDERATIONS FOR VOTING \nIt is cheering to note that Nigeria has exited the recession it entered in Q3:2020. \nWhat is more encouraging is the fact that the recovery is V-shaped, signaling \nthe rapid and positive impact of the sustained expansionary fiscal and \nmonetary policy interventions since the outbreak of the COVID-19 pandemic \non output. But at the same time the recovery at 0.11% is quite fragile just as \nthe economy is suffering from persistent inflationary pressure which is at an \neighteenth month high of 17.33% in February 2021. Having attained a positive \ngrowth, albeit fragile, with inflation and unemployment rising, the dilemma the \nCommittee faced at its March meeting is whether to tighten policy parameters \nto rein in inflation, loosen, or to leave them unchanged to strengthen growth. \nAs shown earlier, the current inflationary pressure is driven by the rise in food \nprices, largely attributed to a combination of non-monetary factors which \nhave led to disruptions to the supply chain, particularly insecurity in food \nproducing regions and infrastructural gaps. \nI do not subscribe to a tightening regime at this time, as there is need to sustain \nongoing interventions in critical sectors of the economy to improve the current \noutput growth. My opinion is without prejudice to the fact that a key mandate \nof the Bank is: ensure price and monetary stability. Indeed, with eighteen \nmonths of rising price level, price stability does matter. But, since the current \nprice hikes are not demand driven as such, tightening may be \ncounterproductive as it could stifle credit growth, rollback the current output \nlevel, create more unemployment and exacerbate inflationary pressure. \nAlso, a slight upward adjustment of the Monetary Policy Rate may neither \nproduce a positive real interest rate to attract foreign portfolio investors, in light \nof the current rate of inflation, nor improve inflation rate as may be desired. I, \ntherefore, urge the Bank to continue to explore alternative policies, particularly \nthose measures to improve diaspora remittances to enhance foreign \nexchange inflow and accretion to external reserves. \n22 \n \nClassified as Confidential \n \nSince the factors currently affecting inflation in Nigeria are largely outside the \ncontrol of the central bank, a practical option in my view will be to \nconcentrate on output growth, while focusing on the structural impediments \nto distribution and storage, which in the near to medium term would have a \ncalming effect on the domestic price level. Current interventions should \ntherefore be aggressive and properly targeted to have the expected impact \non output growth and inflation. The fiscal authority will continue to work with \nthe central bank to ensure stable prices, real GDP growth and low \nunemployment. \nI am convinced that what is required now is to allow more time for existing \npolicy directions to fully permeate the economy. Therefore, I vote to maintain \nthe values of all policy parameters as follows: \n▪ MPR at 11.5% \n▪ The Asymmetric Corridor at +100/700 basis points around the MPR \n▪ Liquidity Ratio at 30.0 per cent \n▪ CRR at 27.5 per cent \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23 \n \nClassified as Confidential \n \n5. ASOGWA, ROBERT CHIKWENDU \nBackground: \nSince the previous MPC’s meeting, progress on economic activities has been \ngenerally positive and a growing optimism now exists about global growth \nreturning to pre-pandemic levels in the near term. Activities in many sectors \nhave considerably picked up as at early 2021, but the pace of recovery varies \nacross regions and countries reflecting largely the differences in the speed of \nvaccine rollout and the degree of economic stimulus support. Despite \nimprovements on several counts, significant uncertainty still persists on the path \nof economic recovery, especially with concerns of the possibility of a third \nwave of the pandemic and delays in vaccine distribution across the globe. \nBesides, some financial market uncertainties still exist including the soaring \nglobal public debt which is currently presenting difficult trade-offs for policy \nmakers. On the domestic front, the current inflation trajectory adds uncertainty \nto the growth outlook even when the prospects of economic recovery to pre-\npandemic levels are brighter. Analysed information however suggests that the \nrise in domestic inflation reflect largely the temporary effect of supply-side \ndisruptions. As such, monetary policy decisions at this meeting tried to balance \nrisks around the outlook for growth and inflation, but placing considerable \nweight on the path for a continuation of economic recovery in line with other \nglobal strategies for getting back to normal output levels. \nGlobal Economic Developments: \nGlobal growth is now expected to recover faster as from the first quarter of \n2021, supported by COVID-19 vaccination drives, sustained fiscal stimulus and \naccommodative monetary policies in many countries. Earlier forecasts were \nthat global growth would expand by about 4 percent per year in 2021 with \npossible moderation in 2022 to 3.8 percent. With improvements in economic \nprospects, the revised projection is that by the end of 2021 or early 2022, the \nglobal economy will revert to its pre-pandemic levels with forecasts at 5.5 \npercent (2021) and 4.2 percent (2022). The change in prediction for 2021 and \n2022 is anchored on the revival in manufacturing and the strong momentum \nin consumer spending. \n \nAs at 2020 fourth quarter, the GDP growth numbers for many countries looked \nsomewhat weak as compared to quarter three. CBN staff report show that \noutput growth in the USA in the fourth quarter of 2020 expanded by only 4.1 \npercent which is low compared to the previous quarter, while the Euro Area \n24 \n \nClassified as Confidential \n \neconomy contracted by 0.6 percent in the fourth quarter of 2020 after growing \nby 12.7 percent in the third quarter. Similarly, output growth in the fourth quarter \nof 2020 for the UK economy was 1.0 percent as compared to the 15.5 percent \nexpansion in the third quarter. There are however expectations of a strong \nturnaround early in 2021 and the current outlook in USA, Euro Area, UK, Japan \nand in several emerging economies appear slightly stronger than in the fourth \nquarter of 2020. The Eurozone manufacturing PMI increased to a three year \nhigh in February 2021 at 57.9 percent, while industrial production has also risen \nconsiderably. In the USA, the manufacturing PMI increased to 60.8 percent in \nFebruary 2021, while unemployment rate edged lower to 6.2 percent, both \ncontinuing to suggest positive growth in 2021 quarter one. In China, official \nmanufacturing and non-manufacturing PMIs had fallen in February, but with \nindustrial production and trade flows accelerating at this same time, there are \ngood indications that China’s GDP growth in 2021 first quarter will remain \nstrong. In other emerging market economies, recent activity indicators also \npoint to recovery continuing into the first quarter of 2021, although there seems \nto be variations across sectors, with manufacturing PMI significantly stronger \nthan non-manufacturing PMI especially services. \nThere are however emerging downside risks including upward inflationary \npressures which seem to be evolving in many advanced and emerging market \neconomies as well as some financial market vulnerabilities. In the USA for \ninstance, CBN staff report show that month-on-month inflation rose marginally \nto 0.3 percent in January compared with 0.2 percent in the preceding month, \nwhile in Japan month-on-month inflation rose in January 2021 to 0.6 percent \ncompared with -0.1 percent in the previous month. There also similar inflation \nincreases in such emerging economies as China and South Africa. \nInternational financial conditions were broadly favourable amid high levels of \nglobal liquidity, but since mid-February 2021, global financial markets appear \nto have turned volatile partly driven by the surge in sovereign bond yields in \nsome advanced countries over inflationary expectations. A key concern for \nemerging economies is that such bond market volatility could trigger a \nretrenchment of portfolio flows and also possibly higher currency volatility. A \nbroader concern however, is the high level of public debt which was also a \nkey issue raised in the January 2021 MPC meeting with debt service burdens \nnow at or above the levels during the last global financial crisis. \nIn terms of policy outlook, both an accommodative monetary policy and \nexpanded fiscal stimulus have underpinned recent economic recovery efforts \nfor many countries and the balance of risks would imply a continuation of such \nstance. The European Central Bank has been significantly accelerating the \n25 \n \nClassified as Confidential \n \npace of asset purchases since the first quarter of 2021 as compared to the last \nquarter of 2020 while in the USA, President Biden has recently pushed through \nhis USD 1.9 trillion fiscal support plan. Looking ahead, one would expect that \nonce there are clear signs that economic conditions are normalising at least \nto pre-pandemic levels, it may then be appropriate in many countries to \nreview their monetary policy stance. \nDomestic Macroeconomic Situation: \nGrowth and inflation are the key domestic indicators that shaped monetary \npolicy discussion at this meeting, but their trajectory present mixed signals. In \nterms of growth, Nigeria’s real GDP increased by 0.11 percent in the fourth \nquarter of 2020, exceeding expectations when compared with -3.62 and -6.10 \npercent in 2020 third and second quarters, respectively. Direct data on the \nperformance of both GDP and aggregate demand for the first quarter of 2021 \nare not yet available, but indirect data suggests improvements in February and \nhopefully stronger quarterly outcomes for the rest of 2021. CBN staff report \nshowed that both the manufacturing and non-manufacturing PMIs increased \nto 48.70 index points in February 2021, compared with 44.9 and 43.3 index \npoints respectively in January 2021. Also, the recent expansion in both exports \nand imports are signals for a better performance of the economy in 2021. \nUnfortunately, despite the relative improvement in the growth outlook in the \nfourth quarter of 2020, weakness in the labour market has persisted as \nunemployment rose to 33.3 percent in the fourth quarter of 2020 from 23.1 \npercent in the second quarter of 2020. However, a confluence of recent \nfactors including the growth in private investment and government \nexpenditure may imply that unemployment conditions on the margin may \nhave improved somewhat since the beginning of 2021. \nInflation is perhaps the key factor damaging the outlook of the Nigerian \neconomy. With headline inflation accelerating from 15.75 percent in \nDecember 2020 to 16.47 percent in January 2021 and further to 17.33 percent \nin February 2021, above the tolerance band, the effect on output recovery will \nlargely be disruptive. In terms of drivers, statistics show that the rise in headline \ninflation (year-on-year) was largely due to elevated food prices which have \nsurged to historical highs across most food and alcoholic beverage \ncomponents. The inflation risk at this point is still more related to supply side \nvolatilities rather than demand pressures and addressing the supply disruptions \nare more likely to result in deflationary pressures. An appreciating nominal \nexchange rate in recent months and generally low pass-through is also \nexpected to contribute to moderating future inflationary pressures. \n26 \n \nClassified as Confidential \n \nAn evaluation of the financial market conditions since the last MPC meeting \nevokes some minor concerns as some domestic financial market indicators \nrecorded weak performance. The Equity market increasingly turned volatile \nsince February with market capitalization and the All-share index swinging \nlately, but driven by weak investment sentiment stemming from uncertainty in \neconomic activities. In addition, there is an observed weakness in bank \nperformance indicators especially the rise in non-performing loans ratio from \n6.1 percent in December 2020 to 6.3 percent in February 2021 as well as some \ndecline in bank profitability within the same period. While these marginal \ndeclines in bank performance indicators poses no threat to bank stability, it \nrather calls for more regulatory vigilance. Banking Sector credit however \ngathered pace in February 2021 with a total of 95,583 new credits, thus \nexpanding the total banking sector credit by over 4.0 percent compared to \nthe level in December 2020. This momentum is expected to continue in 2021, \nsupported by strong liquidity in the domestic money market and the rise in \nlending to micro, small and medium enterprise (MSME) sector. Of the total \nbanking sector credit to the economy, net credit to Central Government \ncontinued to grow in February resulting in a notable acceleration of broad \nmoney. \nIn balance, economic activity on the domestic front has been improving \ngradually in the past few months despite the rise in inflation which as earlier \nnoted, reflect the temporary effect of supply-side fluctuations. The increase in \nbank lending is providing the desired impact in bolstering aggregate demand \nand economic recovery. While the debt build- up remains a key issue, the \nnature of this pandemic has warranted a debt surge in many emerging and \ndeveloped economies, but with the speed of ongoing recovery efforts, debt \ndecline will be imminent soon. \n \nMonetary Policy Decision: \nIn consideration of the current and expected macroeconomic developments \nhighlighted above, the balance of risks would imply a continued expansionary \nand accommodating monetary policy stance without overlooking the \nworsening inflation trend. Additional monetary stimulus including CBN targeted \ninterventions that would address the supply bottlenecks in agriculture and \nsupport bank lending to firms and households should be sustained at a \nsignificantly higher pace so as to nurture the expected full recovery in 2021. \nThere is however need to monitor the situation closely and once there are clear \nsigns that economic conditions are normalizing, it may then be appropriate to \n27 \n \nClassified as Confidential \n \nraise policy rates gradually from the current levels so as to tame any inflationary \npressures arising from demand developments. Undoubtedly, there is still \nsubstantial uncertainty surrounding the path of recovery ahead especially with \nthe volatile oil prices, but there are strong prospects that economic activity will \napproach a normal level by end 2021. \n I will thus vote to: \n• Retain the MPR at 11.5 % \n• Retain the CRR at 27.5% \n• Retain the Asymmetric Corridor at +100/-700 basis points \n• Retain the Liquidity Ratio at 30.0% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28 \n \nClassified as Confidential \n \n6. OBADAN, MIKE IDIAHI \nThe 278th meeting of the Monetary Policy Committee was held after some \ngood news about the Nigerian economy had been received and the \nprospects of global economic developments portrayed optimism. The gross \ndomestic product (GDP) data released by the National Bureau of Statistics \nshowed that the Nigerian economy had exited recession in the last quarter of \n2020 and achieved a V-shaped economic recovery, though weak. The \nachievement was due to the sustained easing of the containment measures \non economic activities, improvement in oil prices and sustained fiscal and \nmonetary interventions by the government. Similar factors propelled the \nrecovery of global economies. The coronavirus-induced twin health and \neconomic crises adversely affected the smooth running of several economies, \nseriously disrupted global supply chains and weakened aggregate demand. \nBarring downside risks, including the fear of a third wave of new coronavirus \ninfections, forecasts point to significant recovery of the global economy in \n2021. If actualised, this could have a salutary effect on the Nigerian economy. \nGLOBAL GROWTH PROSPECTS \nThere are indications in the global environment of a gradual recovery of output \ngrowth following the exit of various economies from the coronavirus-induced \nrecessions in 2020. Underlying the output recovery prospects are the following: \nthe successful roll-out and administration of the anti-coronavirus vaccines in a \nnumber of countries, especially the advanced countries; recovery in oil prices; \nuptick in global commodity prices; signs of recovery of the financial markets; \nand continued robust fiscal and monetary policy accommodation to support \neconomic recovery, employment generation and improved aggregate \ndemand. \nThe prospects for significantly improved growth in the advanced economies \nand industrialising Emerging Markets and Developing Economies (EMDEs) in \n2021 reflect optimism. According to the IMF, the real GDP growth rates in 2020 \nin the three groups of economies – Global Economy, Advanced Economies \nand EMDEs – are: -3.5%, -4.9% and -2.4%, respectively. In 2021, the Organisation \nhas optimistic estimates of real GDP as follows: Global economy, 5.5%, \nAdvanced Economies, 4.3% and EMDEs, 6.3%. Specifically, the countries’ \nperformance and projected performance in 2020 and 2021 are as follows: \n \n \n29 \n \nClassified as Confidential \n \n \n \n \n \n2020 \n2021 \nAdvanced Economies \n-3.5% \n5.5% \nUnited States \n \n-4.9 \n \n4.3 \nEuro Area \n \n \n-7.2 \n \n4.2 \nUnited Kingdom \n \n-10.0 \n4.5 \nJapan \n \n \n-5.1 \n \n3.1 \nEMDEs \n \n \n-2.4 \n \n6.3 \nSouth Africa \n \n-7.5 \n \n2.8 \n \n \n \nChina \n \n \n+2.3 \n8.1 \nIndia \n \n \n-8.0 \n \n11.5 \nRussia \n \n \n-3.6 \n \n3.0 \nBrazil \n \n \n-4.5 \n \n3.6 \n \nThe 2021 forecast growth rates, if realised, will represent good performance \nrelative to 2020. An important point that must be borne in mind is that these \neconomies, like Nigeria’s, did not fall into recession because of a fundamental \nshock relating to a business cycle downturn. Rather, they experienced a \nsudden negative health shock – the coronavirus pandemic - which the \ncountries strived to contain through widespread/partial economic lockdowns \nand other containment measures. But unlike Nigeria, the advanced \neconomies and EMDEs have well-developed production structures and robust \ncapacities to respond to increased output demand. In other words, they have \nhigh supply elasticities. \nThe virus containment measures resulted in production line closures, supply-\nchain disruptions, trade restrictions, domestic and international travel \nrestrictions, widespread unemployment and loss of means of livelihood. In the \nadvanced economies and EMDEs, the fiscal and monetary responses to the \nhealth and economic crisis was robust. Then, the search for anti-coronavirus \nvaccine was swift and intense with successes achieved in the last quarter of \n2020. Gradually, the containment measures began to ease, economic \nactivities revived and international travel and trade resumed. The response of \nthe economies has been swift. The idle or dampened production engines went \ninto action restoring supply chains with the aid of fiscal and monetary stimulus \nwhich also buoyed aggregate demand. It is thus not surprising that most of \nthese economies achieved V-shaped economic recoveries which is likely to \nbe sustained barring downside risks. \nIn the face of the twin shocks, inflation has not reached worrisome level \nglobally. Global inflation is only expected to hit the long-run objectives of \ncentral banks towards the end of 2022 when the negative output gaps begin \n30 \n \nClassified as Confidential \n \nto narrow. Thus, in most of the advanced economies, inflation has remained \nlow, remaining below their long-term targets, generally 2.0%. The economies \nhave not experienced stagflation. And so the policy choice to combat the \ntwin crisis and, specifically, exit recession was straightforward – expansionary \nfiscal and monetary policies. This was the basis of the huge stimulus packages \nimplemented by the advanced economies and some EMDEs. \nThe above scenario sharply contrasts with Nigeria’s economy which similarly \nexperienced the twin crisis, but hobbled by stagflation at the same time. This \nhas created a policy dilemma for the government because of the trade-offs \ninvolved in attempts to address the problem of stagflation with fiscal and \nmonetary policies. An expansionary monetary policy, for example, to address \ngrowth challenges tends to worsen inflation, while any attempt to tighten \nmonetary policy to contain inflation would hurt growth. This policy dilemma has \nremained even though the country has exited recession; the growth rate \nremains very low and fragile with high level of unemployment, while inflation \nhas accelerated furiously. And so, doing what the advanced countries have \ndone to exit recession and hoping to achieve robust growth in 2021 will not be \nadequate in the case of the Nigerian economy, largely because inflation is \nalso a challenge to contend with. The Nigerian economy exhibits peculiarities \nwhich continue to challenge the ingenuity of policy makers. \n \nKEY DOMESTIC ECONOMIC CHALLENGES \nVery limited diversification of the economy. \nThis is such that the country relies on oil for the bulk of its foreign exchange \nearnings and government revenue. But these are very vulnerable to frequent \nshocks in the global oil market. Because of absence of savings, the country is \nconfronted with very limited fiscal space to effectively address the twin \neconomic crisis. Also, because of uncomfortable public debt accumulation, \nthere is very limited headroom for further borrowing. Consequently, fiscal policy \nremains weak and this puts significant pressure on monetary policy in \naddressing the economic challenges. Also, unlike in the advanced countries, \nNigeria’s industry, in particular, manufacturing, is comatose making the \neconomy to be heavily dependent on imported manufactured goods. Serious \nefforts were made by the government in the 1970s to encourage \nindustrialisation through import-substitution policies, but the manufacturing \nfactories developed were not sustained in the absence of enabling \nenvironments. Many factory spaces/warehouses were used for other purposes \naside manufacturing. And so, the country remains unable to build a strong \n31 \n \nClassified as Confidential \n \nnon-oil revenue base nor use manufacturing as a pivot for growth, \nemployment and income generation. \nLow and fragile growth rates and worrisome unemployment \nThe national output recovered weakly in Q4 2020 with a real growth rate of \n0.11% (year-on-year) compared to -3.6% in the previous quarter because of \nthe gradual reopening of economic activities and the fiscal and monetary \npolicy support. The latter especially through the Central Bank interventions \nwhich deliver credit to priority sectors of agriculture, manufacturing and MSMEs \nat single digit interest rates. There has also been the Targeted Credit Facility \naimed at individuals and households adversely affected by covid-19. But the \nfiscal response is understandably relatively weak. The growth rate attained is \nfragile and the employment associated with it is low such that unemployment \nsharply increased from 27.1% in Q2 2020 to 33.3% in Q3 2020. Because of \nunderlying constraints, the growth rate estimates by reputable institutions for \n2021 are relatively low: 1.10% (World Bank); 1.7% (IMF); 2.15% (CBN); and 3.0% \n(Federal Ministry of Finance, Budget and National Planning). Thus, a growth \nproblem remains. And how a quantum leap in growth can be achieved under \nthe present circumstances remains an issue. \nFluctuating, sometimes very low, oil prices \nOil Price has recently rebounded strongly with the price of Bonny Light standing \nat US$ 66.0 per barrel as at March 18, 2021 (compared to US$ 51.27 in \nDecember 2020), far above the budget benchmark of US$ 40.0 per barrel. But \nit was as low as US$ 14.00 per barrel in April 2020. However, unless the current \nuptick in oil prices is sustained, it may not improve the fiscal position and \nexternal reserves significantly because of Nigeria’s reduced OPEC quota of \nabout 1.4 million barrels per day. And a significant part of the earnings is used \nto import refined petroleum products in the absence of local refining capacity. \nIt is not in doubt that the government has serious revenue challenges. \nNevertheless, there is need for government to muster the political will to save, \nno matter how small, from increased earnings arising from high oil prices. Any \nargument that the country has huge indebtedness or that it needs to spend all \nthe earnings to overcome the infrastructure deficits or pay salaries, will not be \nhelpful to the economy now and in the future. \nAccelerating inflation \nHeadline inflation has persistently increased for the eighteenth consecutive \nmonth with the rate of escalation being much higher and worrisome in recent \nmonths. Yes, because of the stimulus packages entailing relatively sizable fiscal \n32 \n \nClassified as Confidential \n \nand monetary injections into the economy, the impression could easily be \ngiven that the rise in inflation rate is due to monetary expansion. This could \nhave been so under normal circumstances. But in practice, the monetary \ninfluence is there to a limited extent because of the phenomena of weak \naggregate demand, wide negative output gap, rising unemployment rate \nand poverty incidence. Hence, the factors to worry about mostly are the \ndisruptions in agricultural supply chains occasioned by bandits and herdsmen \nin the food producing areas of the country, policy induced factors of \nexchange rate depreciation, deregulation of petroleum product prices and \nthe associated price hikes, increases in electricity tariffs, and infrastructural \nbottlenecks, especially road transport, and general atmosphere of insecurity \nin the country. Policy will need to focus more on these factors with a limited \nrole for monetary expansion. Some of them have tended to undermine the \neffectiveness of the CBN’s development finance interventions aimed at \nsupporting growth, boosting aggregate supply and reducing the inflation rate. \nOther sources of worry \nThese emanate from the developments in the external and fiscal sectors. The \nexternal sector reflects increased pressures and is characterised by worsening \ncurrent and capital account deficits, foreign exchange demand/exchange \nrate pressure, low accretion to external reserves, low foreign capital inflows \nand heightened capital flows reversal. In the fiscal sector, the government is \nincreasingly confronted with low domestic revenue mobilization / declining \nrevenue in the face of increasing public expenditure, rising fiscal deficit and \nrising public debt and rising public debt/revenue ratio with consequent \nincreasing pressure on monetary accommodation. \nThe external sector challenge can be addressed by laying a solid foundation \nfor non-oil exports growth to provide a fairly more stable source of foreign \nexchange earnings and reserves accumulation. To this end, provision of a \nconducive macroeconomic environment is indispensable. On the fiscal front, \nthe challenge is from both revenue and expenditure sides. The political will to \naggressively mobilise tax revenue is of the essence, while the government \nneeds to take a hard look at the cost of governance with a view to rationalising \nit. This is already a source of public concern, yet government organs continue \nto make suspect policy decisions that could increase the already worrisome \nhigh cost of governance. \nOPINION \nWe are faced with the dilemma of low and fragile growth that needs to be \nreversed and accelerating inflation that also needs to be tamed because of \n33 \n \nClassified as Confidential \n \nits negative impact on people’s welfare and macroeconomic stability which \nis required for enhanced investment and production. Orthodox policy \ninstruments available to the Bank are not capable of achieving the desired \ntwo goals of strong growth and inflation control simultaneously without \nsacrificing one for the other. \nTherefore, at this point in time, it is important for the Bank to continue to support \nthe growth objective through the development finance interventions, perhaps \nmore intensely, in the hope that the fiscal authority will have a good handle on \nthe factors that tend to undermine the interventions, in particular, flooding and \ninsecurity in the food producing areas and all over the country. \nStability needs to be brought to bear on the policy-induced drivers of the \ncurrent inflation acceleration, while the MPR can be raised marginally with \nthree objectives in mind: to signal the sensitivity of the Bank to addressing any \npossible monetary influence on inflation. The factor of monetary influence on \ninflation cannot be ruled out completely. It interacts with other factors to drive \ninflation, perhaps, in a limited role. Against the backdrop of the Loan-to-\nDeposit Ratio (LDR) policy, I do not expect the MPR adjustment to adversely \naffect the volume of lending significantly. To this end, we should put more \npressure on the deposit money banks to comply with the LDR policy. Marginal \nupward adjustment of the MPR can also signal the desire of the Bank to tackle \nthe phenomenon of negative real interest rate. Finally, in the short term, it could \nbe a signal to foreign private investors while we implement measures to ensure \nstable sources of external reserves accretion in the medium term. Yes, it is true \nthat foreign portfolio investment flows are hot monies which tend to be very \nvolatile. However, under conditions of improving growth, such flows could play \na stabilising role in the economy. \nSo, my vote is: raise MPR by 50 basis points and leave the other parameters as \nthey are. \n \n \n \n \n \n \n \n \n \n34 \n \nClassified as Confidential \n \n7. SANUSI, ALIYU RAFINDADI \n1.0 \nDecision: \nI have voted to hold all the policy parameters in today’s meeting amidst a \nstrong desire to tighten, given the rising inflation and exchange rate pressures. \nHowever, in the context of an economy barely exiting one of the worst \nrecessions in recent history, with huge job losses that are yet to be regained, \ntightening could reverse the fragile recovery. In addition, I was persuaded by \nthe conviction that the current inflationary episode has predominantly \noriginated from the supply-side and structural factors, hence, tightening may \ncurb inflation only at a disproportionately large output cost. These output costs \nare unbearable in the context of the weak, albeit better-than-expected \noutput recovery, and significant job losses following the deep recession \ninspired by the COVID-19 containment measures. I, therefore, voted to hold \ndespite the threat of rising inflation in order to allow for stronger output \nrecovery. \n2.0 \nBackground and Justification \n2.1 \nGlobal Economic Developments \nThe continued synchronized fiscal and monetary stimulus as well as the massive \nadministration of the COVID-19 vaccines in both Advanced Economies and \nEmerging Market & Developing Economies (EDMEs) are expected to drive \nglobal economic recovery. \nThe approvals and successful roll-out of vaccines across the globe, coupled \nwith announcements of substantial additional fiscal and monetary injections \nby several countries to support recovery, a strong global recovery is forecasted \nin 2021. This is notwithstanding the discovery of new variants of the virus – the \nSouth African and Brazilian variants - that are more fatal. Recently, a Nigerian \nvariant was also discovered in small quantities across the globe. Although the \neffectiveness of the current vaccines against these new variants remain \nuncertain, the wide-spread success of the vaccine roll-out raises hope for \nrecovery of global merchandize trade thereby further opening up the global \nsupply chain. The continuation of fiscal policy accommodation by major \nadvanced economies in 2021, aimed at saving jobs and supporting \nconsumption and output, is expected to support a strong global recovery in \n2021. \n \n35 \n \nClassified as Confidential \n \nGlobal output growth, which contracted by -3.5% as a result of the various \nmeasures to curb the spread of the COVID-19 pandemic, is forecasted to grow \nby 5.5% and 4.2% in 2021 and 2022, respectively. The downside risks to this \nforecast include the emergence of new variants of the coronavirus against \nwhich the existing vaccines may not be effective. Owing to the low coverage \nof the vaccines as well as uneven distribution across the globe, the economic \neffect of the pandemic is expected to continue in 2021. In the 4th quarter of \n2020, most of the Advanced Economies, continued to recorded output \nexpansions except the Euro Area which recorded contraction for the year \n2020. The US economy, for instance, grew by an annualized (q-o-q) rate of 4.1% \ncompared with 33.1% recorded in 2020Q3. For the year 2020, however, a \ncontraction of -3.5% (y-o-y) was recorded. The Euro area contracted by -0.6% \n(q-o-q) in 2020Q4 compared with an expansion of 12.7% in 2020Q3. For the \nyear 2020, the Euro area contracted (y-o-y) by -5.0%. The UK economy grew \nby 1% (q-o-q) on 2020Q4 compared with 15.5% in 2020Q3. For the year 2020, \nthe UK economy contracted by -9.9%. In Japan, the economy expanded by \n3% (q-o-q) compared with 5% in 202Q3 but contracted (y-o-y) by -4.8% in 2020. \nIn the Emerging Markets and Developing Economies (EMDEs), China recorded \na (slower, but) positive growth of 2.6% in 2020Q4, but expanded by 2.3% in the \nyear 2020. Brazil’s output expanded by 3.2% (q-o-q) in 2020Q4 compared with \n7.7% in 2020Q3. In India, output expanded by 7.9% (q-o-q) in 2020Q4 \ncompared with 12.9% (q-on-q) in 2020Q3. South Africa grew by 6.3% (q-o-q) in \n2020Q4 compared with the sharp rebound of 67.3% observed in the third \nquarter of 2020. For the year 2020, however, the economy contracted by -7.0%. \nIn Nigeria, a positive q-o-q expansion of 9.7% was recorded in the fourth \nquarter of 2020 compared with 12.1% in 2020Q3. This better-than-expected \ngrowth in 2020Q4 implies a year-on-year output growth of 0.11%, which marked \nthe economy’s exit from the technical recession. \nThere are optimisms that global trade would recover significantly in 2021 \nfollowing the ministration of the coronavirus vaccines across countries. World \ntrade, led by trade in merchandize, is forecasted to grow by 8.0% in 2021 and \n6.0% in 2022. The steady increase in the global demand for crude oil, coupled \nwith the OPEC+ production cuts have supported the rise in the crude prices. In \nFebruary 2021, the monthly average price of the OPEC reference basket rose \nto US$60.88 from US$54.38 in January 2021. \n \nInflation in the Advanced Economies is expected to rise to 1.3% in 2021 from \n0.7% in 2020, while that of Emerging Market and Developing Economies \n(EMDEs) is expected to decline to 4.2% in 2021 from 5.0% in 2020. In the Euro \n36 \n \nClassified as Confidential \n \nArea, inflation remained at -0.9% between January and February 2021. In the \nUS, inflation increased (year-on-year) to 1.7% in February 2021 from 1.4% in \nJanuary 2021. In the UK, inflation increased to 0.7% in January 2021 from 0.6% \nin December 2020. In Japan, deflation continued with the inflation rate \ndeclining to -0.4% in February from -0.6% in January 2021. In the EMDEs, inflation \nincreased across many economies between January 2021 and February 2021, \nincluding China (-0.3% to -0.2%), Kenya (5.69% to 5.78%), Egypt (4.3% to 4.5%), \nGhana (9.9% to 10.3%). In Nigeria, inflation rose for the 18th consecutive month \nfrom 16.47% in January 2021 to 17.33% in February 2021, driven by COVID-19 \nrelated supply chain disruptions, exchange rate pressure and security \nchallenges in food producing areas. \n2.2 \nDomestic Economic Developments and their Implications \nAvailable data from the National Bureau of Statistics show that Nigeria has \nexited the recession having recorded a positive output growth (year-on-year) \nof 0.11% in the fourth quarter of 2020. Although marginal and fragile, this v-\nshaped recovery, which was the aim of the sustained unprecedented fiscal \nand monetary policy support, is a welcome development. The output recovery \nwas driven by the agricultural and service sectors, which grew by 3.4% and \n1.31% in 2020Q4 from 1.39% and -5.49% in 2020Q3, respectively. Industry, \nhowever, contracted for the third consecutive quarter by 7.3% in 2020Q4, thus, \nreflecting the fragility of the recovery. While the growth of agriculture was \ndriven by crop production which grew by 3.68%, that of the service sector was \ndriven by ICT, which grew by 14.7% in 2020Q4. This positive economic \nperformance was supported by the availability of liquidity as economic \nactivities resumed following the re-opening of the economy from the COVID-\n19 lockdown. The CBN’s Purchasing Managers Indices (PMIs) suggests that \nthere are improvements in both manufacturing and non-manufacturing \nactivities between January 2021 and February 2021. For instance, the \nManufacturing PMI increased from 44.9 in January 2021 to 48.7 index points in \nFebruary 2021. The Non-Manufacturing PMI, which stood at 43.3 in January \n2021, increased to 48.7 index points in February 2021. These increases in the \nPMIs reflect increased economic activities as the COVID-19 restrictions were \neased, as well as increases in client demand and sales. \nLatest labour market data shows that the rate of unemployment worsened, but \nthat of under-employment improved in 2020Q3. In 2020Q4, the rate of \nunemployment continued to increase from 27.1% in 2020Q2 to 33.3%. \nUnderemployment rate, however, declined from 30.5% in 2020Q2 to 15.12% in \n2020Q4. The total labour force, which was about 80.3 million in 2020Q2 \ndeclined to about 69.7 million in 2020Q4, a decline of about 10.6 million people \n37 \n \nClassified as Confidential \n \nduring the period. The rise in the number of unemployment amidst declining \nlabour force indicates that there were actual job losses during the period, \nwhich can be attributed to the COVID-19 restrictions. This, further, underscores \nthe fragility of the recovery. Further analysis of the age structure of the \nunemployed suggest that youths (15-34years olds) are the worst hit, as their \nrate of unemployment was highest amongst 15-24 years (which stood at 53.4%) \nand 25-34 years (which stood at 37.2%). This highlights the urgency of the social \nproblems we now face as a fallout of the COVID-19 pandemic. \nInflation, as was forecasted, continued on an upward trajectory in February \n2021, driven by the food and core components. Data from the NBS shows that, \nin February 2021, the headline has risen to 17.33% (y-o-y) from 16.47% in January \n2021. Food inflation (y-o-y) rose to 21.79% in February 2021, from 20.57% in \nJanuary 2021, driven by increases in the prices of processed foods especially \ngarri, meat, fish & sea food; and farm produce such as yam, potatoes and \nother tubers, vegetable and rice (local). Core inflation (y-o-y) rose from 11.85% \nin January 2021, to 12.38% in February 2021 due to increase in the prices of \nprocessed food, housing, water, gas & other fuels, clothing & footwear. Staff \nforecasts suggest that inflation would rise in March and moderate in April \ndepending on the evolution of exchange rate and PMS. The forecasts reflect \nthe food supply shocks associated with insecurity, rising exchange rate \npressure, rising price of PMS and rising electricity tariff. \nMonetary data shows that money supply expanded (year-to-date) in February \n2021. Broad money supply (M3) increased by 0.3% in February 2021 relative to \nFebruary 2020, but was below the provisional benchmark for 2021. The low \ngrowth was as a result of the fall in the Net Domestic Assets (NDA). However, \ndomestic credit expanded by 1.55% in February 2021 reflecting the continued \neffects of the various CBN’s credit policies as well as the on-going \ndevelopment finance interventions. Available data shows that Prime Lending \nand Maximum Lending rates continued to decline in February 2021. \n \n3.0 \nThe Basis for My Policy Choice \nIn today’s meeting, the choice between tightening to curb the rising inflation, \nand holding on the current stance to prevent the reversal of the fragile output \nrecovery was a difficult one for me. On the one hand, I am convinced that \ntightening at this point, given the fragile state of the output recovery, would \nraise the cost of capital and hamper investment that is needed to create jobs \nand reduce the raging unemployment rate. Although the inflation rate has \nreached an unacceptably high level, given that the key drivers of the current \n38 \n \nClassified as Confidential \n \ninflationary episode lie more on the supply side, the output cost of a tightening \nwould be large, thereby risking a reversal of the v-shaped recovery achieved. \nOn the other hand, it is difficult of consider holding on to the current policy \nstance when inflation has risen to 17.33% and threatening to continue. \nHowever, considering that the economy is just emerging from the lockdown \nand other restrictions associated with the COVID-19 pandemic, and the global \nuncertainties associated with the efficacy of the vaccines on the several strains \nof the virus, I have voted for a hold. \n \nConsequently, I voted to: \nRetain the MPR at 11.50 per cent; \nRetain the CRR at 27.5 per cent; \nRetain the Asymmetric Corridor at +100/–700 basis points; and \nRetain Liquidity Ratio at 30.0 per cent. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39 \n \nClassified as Confidential \n \n8. SHONUBI, FOLASHODUN A. \nOptimism about further global economic recovery in 2021, on account of \nsteady progress in the vaccination rate and prospects of new vaccines is \ndampened by gaps in vaccine distribution, risks of more transmissible strains of \nthe Covid-19 virus and significant time required to reach herd immunity. \nNotably, the pace of recovery has been determined, largely, by record-level \nfiscal and monetary stimuli, though tourism-based economies and low income \nnations continued to face more challenging situations as a result of low \nprospects for cross-border travels and vaccine supply imbalance. \nAmidst euphoria over the quick but fragile exit from recession, the domestic \neconomy remains challenged by elevated general prices, prevalent \ninsecurity, high unemployment and underemployment, over stretched fiscal \nspace, and heightened external sector vulnerabilities. With the delivery of \nvaccines, immediate and systematic commencement of vaccination, as well \nas, improvement in security will enhance positive sentiments towards further \nopening up of the economy. Though significant part of the inflationary pressure \nis attributed to food prices, driven by structural rigidity, as well as, insecurity \ninduced disruptions to farming activities and products distribution, the Bank \nmust at this time consider ingenious ways of taming inflationary pressures, \nwithout jeopardizing the marginal gains in production and output growth. \nGlobal and Domestic Economic Developments \nPositive performance recorded by most developed economies in Q3 2020 \neither moderated significantly or were reversed in Q4 2020. In the United States, \ndespite the huge direct payment and unemployment benefits stimuli, the \neconomy was estimated to have contracted by -3.5 per cent in 2020. Similarly, \non account of protracted restrictions to deal with increasing infection rate, \neconomies of the euro-area and United Kingdom shrank by -5.0 and -9.9 per \ncent, respectively, in 2020. In the emerging markets and developing \neconomies (EMDEs), India, South Africa, Brazil and Russia, contracted by -8.0, -\n7.5, -4.5 and -3.6 per cent, respectively, while China grew by 2.3 per cent. \nInflation remained below target in advanced economies due to weak \naggregate demand, while exchange rate pass through and disruptions to \ndistribution continued to fuel rising prices in EMDEs. Global trade declined by -\n9.2 per cent due to persisting barriers to trade. \n \nDomestic headline inflation rose further to 17.33 per cent (year-on-year) in \nFebruary 2021, from 16.47 per cent in the previous month. This reflected \nincrease in both food and core inflation to 21.79 and 12.38 per cent in February \n2021, respectively. On month-on-month basis, rise in general prices picked up \n40 \n \nClassified as Confidential \n \nfurther by 1.54 per cent in February 2021, after it dropped to 1.49 per cent in \nJanuary 2021, from 1.61 per cent in December 2020. The persistent rise in food \nprices was attributed to impact of disruptions to farming activities and \ndistribution, on account of pervasive insecurity, as well as, rising cost of imports. \n \nThe economy pleasantly exited recession in the fourth quarter of 2020 with GDP \ngrowth of 0.11 per cent (year-on-year) after two consecutive contractions of -\n6.10 per cent in Q3 2020 and -3.62 per cent in Q4 2020. The growth was driven \nentirely by 1.69 per cent expansion in the non-oil sector in Q4 2020, which \noverturned the effect of further -19.76 per cent contraction in the oil sector in \nQ4 2020. Oil sector contraction reflected OPEC+ production cut agreement \ninduced decline in oil production. \nThe Nigerian banking system continued to show signs of resilience, even as it \nremained the major channel for sustaining the economy during the crisis and \nbeyond. Industry asset, deposit and credit grew further at end-February 2021. \nThe average capital adequacy ratio improved to 15.2 per cent, against 15.0 \nper cent regulatory threshold, while industry liquidity ratio, at 44.5 per cent in \nFebruary 2021, remained above regulatory threshold of 30.0 per cent. \nMeasures of profitability were positive, though the NPL ratio deteriorated \nmarginally to 6.3 per cent, above the regulatory minimum of 5.0 per cent. \nGrowth in credit to the Government, domestic claims and credit to private \nsector reflected impact of various measures by the Bank to promote flow of \ncredit to drive economic activities. Money market rates were moderated by \nample banking system liquidity, buoyed mainly by inflow from maturing bills. \nThe capital market closed on a bearish note in February 2021 due to switch by \ninvestors to take advantage of the higher yields in the fixed income market \nand profit taking sell-off. \nThough the fiscal space remained tight, performance of the major fiscal \nmeasures moderated in February 2021. Retained and total distributed revenue \nincreased over the levels in January 2021, while overall deficit was lower than \nthe level in the previous month. Decline in Government expenditure reflected \nweak capacity of the fiscal authority in a period that requires aggressive \nspending to boost economic activities. The external sector was characterised \nby persisting demand pressure in the foreign exchange market and \ndeteriorating balance of payments position. Foreign direct and portfolio \ninvestments remained low, though international remittances picked up in the \nreview period. \n \n41 \n \nClassified as Confidential \n \nOverall Considerations and Decision \nProspects of global economic growth in 2021 is anchored, largely, on the \nvaccination rate, effectiveness of controls to curb spread of new variants of \nthe virus and preservation of the already stretched fiscal and monetary policy \nstimuli measures. Recurring lockdowns, in many advanced economies of \nEurope and Asia in particular, however, cast doubt on the pace of global \neconomic recovery, with implications for the rest of the world. Though recent \nsurge in global oil prices provides some respite for Nigeria, the likely return of \nshale oil production and increasing sentiments away from fossil fuel, portends \nrisk to future oil demand. Again, this trend underscores the need to further \nreinforce ongoing recalibration of the domestic economic structure. \nHaving sluggishly exited recession in the fourth quarter of 2020, the Bank faces \na major policy dilemma of how best to further strengthen growth, and at the \nsame tame spiraling inflation. The need to enhance output remains pertinent \nto effectively deal with high unemployment and rising underemployment, as \nwell as, address increasing poverty among the populace. High inflation on the \nother hand continues to erode purchasing power, negatively impact welfare \nof the people and precipitate macroeconomic instability. \nWithout doubt, the Bank’s policy of facilitating aggressive expansion of credit \nto promote output growth has had significant impact on the economy. In this \nregard, the banking system has continued to be a veritable channel for \nsupporting the expansion of economic activities through provision of easy and \ncheap credit. Sustained resilience of the banking system, on account of \neffective regulation and supervision by the Bank provides assurance that the \nsector will continue to play this important role, without jeopardizing stability of \nthe system. Of course, the Bank must not take its eyes away from ensuring \ngeneral compliance. \nThe Bank’s effort at improving external sector conditions through its various \npolicies to promote non-oil exports and remittances is commendable. \nSustained implementation of the measures is expected to yield desired \noutcomes in the coming months. Recent moderation in fiscal deficit, \nimprovement in retained revenue due to modest rise in crude sales and \ndecline in debt-service-to-revenue ratio, on account of Covid-19 Relief-loan \nrepayment deferment concession, are envisaged to provide some head room \nfor the fiscal authority. \nRising food prices, as the major driver of inflation, has been attributed largely, \nto insecurity induced disruptions to food farming and distribution, as well as, \nother rigidities affecting availability and cost of essentials. In addition, subtle \n42 \n \nClassified as Confidential \n \nmonetary drivers of inflation may be attributed to rising credit and money \nsupply, high liquidity etc. it is therefore pertinent that as the fiscal authority takes \npragmatic steps to resolve the structural bottlenecks, the Bank, must in addition \nto supporting growth, act to preserve price stability, especially since inflation is \nseen more as a monetary phenomenon. \nClearly, not doing anything will portray the Bank as abandoning its mandate \nof price stability. In as much as growth remains weak and fragile, we cannot \nafford to pull the brake to avert more damaging reversal of the trend in output \ngrowth. Notwithstanding that the present inflationary pressure is largely \nattributed to non-monetary factors, its persistence, and reversal of the \nmoderation in month-on-month growth stresses the need for the Bank to take \nimmediate action. Whereas it may appear unfeasible to deploy conventional \nmonetary policy to pursue growth and tame inflation simultaneously, the Bank \ncannot abandon either of the objectives at this time. \nI believe the Bank’s interventions through aggressive provision of credit should \ncontinue as a complement to ongoing effort by the fiscal authority to boost \neconomic activities. As the Government act, more decisively to discourage \nbad behaviour and restore orderliness, we must collectively work to overcome \nthe insecurity challenges. At the same time, we must begin to tighten to deal \nwith the subtle monetary component of inflationary pressure and curb spiraling \ninflation, without suffocating economic growth. \nI therefore vote to: \n• Raise MPR by 50 basis points to 12.0 per cent; \n• Retain Asymmetric Corridor of +100/-700 basis points around the MPR; \n• Retain CRR at 27.5 per cent; and \nRetain Liquidity Ratio at 30.0 per cent. \n \n \n \n \n \n \n \n \n \n \n43 \n \nClassified as Confidential \n \n9. EMEFIELE, GODWIN I. \nGOVERNOR OF THE CENTRAL BANK OF NIGERIA AND CHAIRMAN, MONETARY \nPOLICY COMMITTEE \nOutlook of the domestic economy improved as growth trajectory turned the \ncorner in 2020q4, behind unsavoury contractions in the preceding two \nquarters. At 0.1 percent, the positive growth is indeed satisfying but fragile. \nAnalyses of domestic developments show the inherence of downside risks to \ngrowth especially as adverse structural shocks remain proximate. I recognise \nthe need to consolidate recovery at this time in order to avert a w-shaped \ntraverse. I am mindful that inflation outcome stayed unsatisfactory with 18 \nconsecutive months of uptick and note the policy dilemma for us, given the \nneed to balance our inflation objective with a growth desire. As global \nrebound is expected to accelerate in the short-term, Nigeria’s growth \nprospect must not be forestalled and the currently tepid growth requires \nstrengthening. \nGlobal economic recovery remains weak, but outlook is brightening following \nincreased vaccine rollout in many countries. The prospect of wider re-opening \nof economic activities and continued stimulus measures by various \ngovernments is expected to quicken growth in the short-term. Growth in \nglobal GDP could reach pre-pandemic levels by mid-2021, rebounding from \n–3.5 percent in 2020 to about 5.5 percent in 2021, if vaccines become more \nevenly distributed across the world. Monetary policy stance stayed \naccommodative in many central banks, so as to stimulate aggregate \ndemand and bolster output following the continued distortions by Covid-19. \nAccordingly, a near-zero level of interest rates is expected to remain in major \neconomies for a prolonged period to prop financial conditions and aid ample \nliquidity build-up. Global inflation rate was muted, remaining largely below the \n2 percent target in many advanced economies, while the outcome among \nEMDEs was uneven. \nWith an increasingly well-synchronised fiscal and monetary stimulus, short-term \noutlook of the domestic economy continued to improve, although key \nfundamentals remained fragile. The sizable expansionary policy to strengthen \nconsumer spending, bolster business confidence and curtail the adverse \nshocks from Covid-19 led to a swift exit from recession, but at a cost to inflation. \nReal GDP grew by 0.1 percent in 2020q4 from –3.6 percent in 2020q3 and –6.1 \npercent in 2020q2. For the whole year, GDP growth fell from 2.3 percent in \n2019 to –1.9 percent in 2020, a far better outcome than the projected \ncontraction of –4.5 percent. Even as crude oil price rallied globally, oil GDP \n44 \n \nClassified as Confidential \n \ngrowth rate remained significantly negative with the non-oil sector (especially \nmining, telecoms, health, and agriculture) driving recent trends. The domestic \neconomy is envisaged to consolidate its recovery over the next four to five \nquarters across many non-oil sectors, if appropriate supports are instituted. \nOn a balance of judgement and evidence, recent decisions to spur growth \nwas cognisant of the immanent inflation trade-off. Inflation rate, thus, \ncontinued its uptick to 17.3 percent in February 2021 from 16.5 percent in \nJanuary. This reflected the 21.8 percent rise in food inflation and 12.4 percent \nincrease in core inflation. In addition to the effect of the deliberately \naccommodative macroeconomic policies aimed at reversing the adverse \neffects of the Covid-19 shocks on real output, the pace of inflation was \naggravated by supply factors including energy price hikes, climate (and other \ndisruptions) induced food shortages, transport and distribution logistics \ndrawbacks, exchange market pressure, etc. The tailwind to food inflation is \nconsiderably the critical security situations in many food-producing areas of \nthe country. In-house analysis, however, indicates that inflationary pressures \nmay begin to ease by mid-2021 with the harvest season. Recognising the \nimportance of adequate food production, storage, distribution and supply to \nboth GDP and inflation outcomes, the Bank will invigorate its development \nfinance initiatives aimed at boosting the agricultural value-chain. \nReview of financial markets condition indicates a modest monetary \nexpansion, as annualised M3 growth of 1.8 percent in February 2021 undershot \nthe programmed target of 4.7 percent and the 13.5 percent recorded in \nDecember 2020. This reflected the 18.1 percent annualised expansion in net \ndomestic assets due to the 19.2 percent annualised increase in credit to core \nprivate sector. The observed growth in private sector credit follows our various \ninterventions aimed at spurring aggregate demand, stimulating output, and \nde-risking the productive activities. Regardless of the increase in credit, the \nbanking system remained relatively resilient with industry averages of the CAR \nat 15.2 percent, NPLs ratio at 6.3 percent, and liquidity ratio at 40.5 percent. \nThe Bank will sustain its regulatory measures to foster banking system stability. \nWe will also continue to use all means available to us to engage and \nencourage banks to increase credit to the productive private sector. \nIn my consideration, I note that the short-term prospect of the domestic \neconomy is tepid and vulnerable. A speedy and even rollout of the Covid-19 \nvaccines could bolster global growth with a positive spill-over to the domestic \nconditions. I note also that growth is below potential and inflationary pressures \n45 \n \nClassified as Confidential \n \npersist. Per capita income, household purchasing power, incidence of \npoverty, labour productivity, business confidence, and unemployment rate \nremain outside tolerable levels. Tensions around food production belts \nheighten \nmacroeconomic \nfragilities, \nworsen \nstructural \nimbalances, \naggravate supply-side constraints and threaten the long-term objective of \nprice stability. I note that inflation is creeping to unacceptable levels. Yet, this \nmust be balanced with the need to ensure that recovery of the economy is \nat a sustainable level. Supply constraints remain the key driver of both the \ninflationary pressure and the weak growth that we observe today. \nThe weak GDP recovery provides an argument for further policy ease to \nsupport growth, but rising inflationary expectations justify a tightening. My \ninclination today is for a more balanced and cautious approach to monetary \nimpulses. I reiterate the imperatives of targeted lending to productive sectors \nto sustain growth without undermining our core objective of price stability. \nBased on the near-term inflation expectations and growth outlook, my \nposition is to maintain the current stance of monetary policy and intensify our \ninterventions. An adjustment today could in my view, destabilise the fragile \nrecovery and worsen domestic conditions. Therefore, with abundance of \ncaution, I vote to: \n1. Retain the MPR at 11.5 percent; \n2. Retain the Asymmetric Corridor at +100/–700 basis points; \n3. Retain the CRR at 27.5 percent; and \n4. Retain liquidity ratio at 30.0 percent \n \nGODWIN I. EMEFIELE, CON \nGovernor \n \nMarch 2021", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria COMMUNIQUE NO 135 of Monetary Policy Committee of March 22 and 23 2021, with Personnal Statements of Members.pdf"}
{"doc_id": "75e67936b5959cdda97367a0c21c7f06", "text": "1 \n \n \nClassified as Confidential \n \n \n \nCENTRAL BANK OF NIGERIA COMMUNIQUE NO. 121 OF THE MONETARY POLICY COMMITTEE \nMEETING OF WEDNESDAY 21ST AND THURSDAY 22ND NOVEMBER, 2018 \n \n \nBackground \n \nThe Monetary Policy Committee (MPC) met on the 21st and 22nd of November, 2018, amidst a \nresurgence of global inflationary pressures, increased fragilities in the global financial markets, \nweakening crude oil prices, continuous capital flow reversal and moderate currency \ndepreciations, especially in the emerging markets as well as a strengthening US dollar and \nsubdued global economic growth outlook. The Committee appraised recent developments in the \nglobal and domestic macroeconomic and financial environments, as well as the economic outlook \nfor the first half of 2019. In attendance were eleven (11) members of the Committee. \nGlobal Economic Developments \n \nThe Committee noted the contraction in global output, underpinned largely by escalating trade \ntensions resulting in widespread uncertainty and waning investor confidence. Consequently, \nglobal growth in 2018 has been downgraded to 3.7 per cent from the earlier projection of 3.9 per \ncent. Growth softened in major advanced economies in the third quarter of 2018. In the \n2 \n \n \nClassified as Confidential \nEmerging Markets and Developing Economies (EMDEs), growth remained divergent, reflecting a \ncombination of country-specific factors. \nThus, growth in the advanced economies is expected to remain at 2.4 per cent in 2018, supported \nby strong output growth in the US projected at 2.9 per cent. The U.S. expansionary fiscal stance, \nstrong wage growth and continued inflow of capital into U.S. dollar denominated assets, are \nexpected to provide the impetus for growth. In the United Kingdom, growth remained weak, \nhampered by uncertainties around Brexit negotiations. Growth in the Euro Area, projected at 2.0 \nper cent, appears to be subdued by low domestic aggregate demand amidst relatively high \nunemployment and reduced global trade. In the Emerging Markets and Developing Economies, \ngrowth was revised downwards to 4.7 per cent from the earlier projection of 4.9 per cent, largely \nin anticipation of a slowdown in China as the country is confronted with an adverse external trade \nenvironment. \nOverall, the downside risks to global economic activity remained: elevated financial fragilities and \npolicy uncertainties, the gradual erosion of rule-based multilateral trading system, tighter \nfinancial conditions with latent disruptive portfolio adjustments, increased capital flow reversals \nwith potentials for heightened exchange rate depreciation and some volatility, fiscal fragilities \nand increased debt burden, geo-political tensions and increasingly depressed aggregate demand \nin some countries. These factors will continue to shape developments for the rest of 2018 and \ninto 2019. \nThe MPC also noted that monetary policy in most advanced economies, particularly the US, \ncontinued on a path of normalisation in view of strong wage growth and declining \nunemployment. The Bank of England hiked its policy rate in August 2018, while the European \nCentral Bank (ECB) has given guidance to terminate its asset purchase programme in December \n2018. The Committee was concerned that these developments will in the medium term, \naccentuate \n3 \n \n \nClassified as Confidential \ncapital flow reversals from emerging and developing economies, including Nigeria. \nDomestic Output Developments \n \nThe Committee noted the positive outlook for output growth, evidenced by the Manufacturing \nand Non-manufacturing Purchasing Managers Indexes (PMI), which stood at 56.8 and 57.0 index \npoints, respectively, in October 2018, indicating expansion for the 19th and 18th consecutive \nmonths. This was attributed to the stability in the foreign exchange market, implementation of \nthe 2018 capital budget and the on-going intervention of the Central Bank of Nigeria (CBN) in the \nreal sector of the economy. However, the recent incidence of flooding across the country and the \nimpact of herdsmen attack on farming communities could affect output growth for the rest of \nthe year. \nOverall, the Committee believes that, even though output recovery remains fragile, the effective \nimplementation of the 2018 capital budget, relative improvements in power supply, progress \nwith counter-insurgency in the North- East and sustained intervention by the CBN in the real \nsector, will improve the investment climate and reduce unemployment. Consequently, the MPC \nreaffirmed its support for all initiatives designed to stimulate domestic output growth. \nDevelopments in Money and Prices \n \nThe Committee noted that broad money (M2) grew by 6.52 per cent in October 2018 over its \nlevel at the end-December 2017; and annualised to a growth rate of 7.82 per cent, which was \nbelow the provisional benchmark of 10.48 per cent for 2018. The growth in M2 was largely due \nto the significant growth in Net Foreign Assets (NFA) which grew by 20.71 per cent in October \n2018, annualised to 24.85 per cent which is above the 2018 provisional growth benchmark \nof \n14.50 per cent. Credit to Government and Net Domestic Credit (NDC) \n4 \n \n \nClassified as Confidential \nexpanded by 7.43 and 2.71 per cent, annualized to 8.92 and 3.26 per cent, respectively; but below \nthe annual benchmark of 13.10 and 17.40 per cent, respectively. Credit to the private sector \ngrossly underperformed as it grew by \n1.94 per cent, annualised to 2.33 per cent, below the 2018 benchmark of 12.40 per cent. The \nunderperformance of the monetary aggregates was of concern to the MPC, which urged the CBN \nto ensure improved credit delivery to the small and medium scale industries, particularly to the \nunbanked urban and rural populations. \nThe Committee noted the benign performance of inflation, as headline inflation (year-on-year) \ndecreased to 11.26 per cent in October 2018 from 11.28 per cent in September 2018 after two \nconsecutive months of marginal increases. The drop in headline inflation was driven by food \ninflation, which moderated to \n13.28 per cent in October from 13.31 per cent in September 2018. Core inflation, however, \ninched up marginally to 9.9 per cent in October 2018 from 9.8 per cent in the previous month. \nOn a month-on-month basis, headline and food inflation also moderated to 0.74 and 0.82 per \ncent in October from 0.84 and 1.0 per cent in September 2018, respectively, while core inflation \nincreased from \n0.64 per cent in September 2018 to 0.80 per cent in October 2018. \n \nThe Committee noted that the moderation in inflation was largely seasonally driven and was \ntherefore, unsustainable as prices were expected to pick towards the end of the year. However, \nthe MPC observed that the near-term upside risks to inflation remained; the disruption to \nagricultural production and distribution arising from flooding, insurgency in the North-East, \nherdsmen-farmer crisis, high cost of energy, anticipated spending in the run-up to Christmas \nfestivities and campaign-related spending towards the upcoming 2019 general elections. \nAccordingly, the Committee enjoined the appropriate authorities to continue to address these \nchallenges and to sustain the implementation of the \n5 \n \n \nClassified as Confidential \n2018 budget and the Economic Recovery and Growth Plan of the Federal Government to \nameliorate the supply side constraints. \nMoney market interest rates oscillated throughout the review period, reflecting fluctuations in \nbanking system liquidity. Inter-bank call and Open Buy Back (OBB) rates, which stood at 16.00 \nand 17.08 per cent, respectively, on September 26, 2018, declined moderately to 14.00 and 16.31 \nper cent, respectively, on October 24, 2018. On average, interbank call and OBB rates rose from \n8.68 and \n7.64 per cent in September 2018 to 14.18 and 13.93 per cent, respectively, in October 2018, \nclosing at 10.00 and 9.72 per cent, respectively, on November 21, 2018. The developments in net \nliquidity position and flows which culminated in higher market rates reflected the impact of \nhigher risk perception in the market, withdrawals from the banking system for monthly statutory \ndisbursements to states and local governments; OMO sales and foreign exchange interventions. \nThe average naira exchange rate remained relatively stable and converging at both the Bureau-\nde-Change (BDC) and the Investors’ and Exporters’ (I&E) window segments of \nthe foreign exchange market during the review period. The exchange rate at the I&E window \nopened at N364.00/US$ and closed at N363.90/US$ with a daily average of N363.87/US$ \nbetween September 26 and November 16, 2018. At the BDC segment, the exchange rate opened \nat N360.00/US$ and closed at N361.85/US$, with a daily average of N360.98/US$, over the same \nperiod. The relative stability in the foreign exchange market, the MPC noted, was attributable to \nthe sustained policies of the Bank to increase the supply of foreign exchange from autonomous \nsources. Gross official reserves decreased from US$42.60 billion at end-September, 2018 to \nUS$41.53 billion on 16th November, 2018. \n \nThe Committee noted the bearish trend in the equities segment of the capital market during the \nreview period. Thus, All-Share Index (ASI) decreased by 8.70 per cent from 34,848.45 on August \n31, 2018 to 32,058.28 on November 16, 2018. \n6 \n \n \nClassified as Confidential \nSimilarly, Market Capitalization (MC) decreased by 8.72 per cent from N12.72 trillion to N11.70 \ntrillion during the same period. Relative to the end-December 2017, the indices decreased by \n19.29 and 16.32 per cent, respectively. These developments largely reflect the sustained profit \ntaking activities by portfolio investors as foreign yields become increasingly more attractive \nabroad. The MPC, however, believes that this trend will reverse in the medium term given the \ncurrent efforts at further improving investor confidence and the relative stability in the Investors \nand Exporters (I&E) window of the foreign exchange market. \n \nThe Overall Outlook and Risks \n \nForecasts of key macroeconomic variables indicate a positive outlook for the economy in Q4 of \n2018. The Committee expects that the effective implementation of the Economic Recovery and \nGrowth Plan (ERGP) and the 2018 budget, improvements in the security challenges, enhanced \nflow of credit to the real sector and stability in the foreign exchange market will redirect the \neconomy on a path of inclusive and sustainable growth. Increased production in the oil and the \nnon-oil sectors are also expected to drive output growth in the medium term. The Committee, \nhowever, acknowledged the downside risks to this outlook to include: reduced portfolio inflows, \nweak of fiscal buffers, low domestic credit, and sluggish aggregate demand. \nThe inflation outlook suggests continued but moderate inflationary pressure to the end of 2018, \nbased largely on increased consumer spending for the Christmas festivities, election-related \nexpenditure and increased pace of implementation of the 2018 Federal government budget. \nImprovements in the security, increased harvests as well as a stable exchange rate are expected \nto moderate the rise in inflation. \nOverall, the outlook for the economy remains positive with a growth projection of 1.75 per cent \nin 2018. \n7 \n \n \nClassified as Confidential \nCommittee’s Considerations \n \nThe Committee assessed the macroeconomic environment in 2018 and noted the modest \nstability thus far achieved in domestic prices, output growth and the financial system. The \nCommittee noted that the economy was on the right path but some key sectors continued to \nexperience significant challenges. The MPC, however, expressed concern about the tepid growth \nexpectations and growing uncertainty in the global financial markets arising from the poor \nreception of the Brexit deal by British politicians, continuing trade war between the US and her \nmajor trading partners, as well as the commencement of US sanctions on Iran. \nThe Committee believed that although the domestic economy was recovering modestly from \nrecession, however, the recovery was tepid and efforts should be stepped up to strengthen \naggregate output and demand. In this regard, the Committee urged the CBN to deepen and \nbroaden access to finance to high employment elastic sectors with particular emphasis on small \nand medium scale enterprises. The Committee called on the CBN to extend the success recorded \nunder the Anchor Borrowers Programme to other items including fish and palm oil, etc. by \nintroducing more stringent measures to curb access to foreign exchange for products that can be \nproduced within Nigeria. \nThe MPC welcomed the moderation in inflation in October, reflecting declining food prices. The \nCommittee believes that given the negative output gap, the proposed increase in the national \nminimum wage would stimulate output growth due to prolonged weak aggregate demand arising \nfrom salary arrears and contractor debt. Consequently, its impact on the aggregate price level \nwould be largely muted, given that the monetary aggregates have largely underperformed in \nfiscal 2018. In addition, the prevailing stability in the foreign exchange market would continue to \nmoderate pressures on the domestic price level. \n8 \n \n \nClassified as Confidential \nThe MPC noted the improvements in the financial stability indicators, including non-performing \nloans, capital adequacy and liquidity ratios of the Deposit Money Banks (DMBs). It urged the Bank \nto sustain its surveillance over the Banking industry by taking prompt corrective measures to \nfurther improve stability in the system. The Committee also called on the fiscal authorities to \nbuild significant buffers to strengthen the efficacy of monetary policy. \nOverall, the MPC considered the options to loosen, hold or tighten. The Committee continues to \nhold the view that although loosening would encourage the flow of credit to the real sector, help \nin reduction of the aggregate cost of credit and spur business spending and investment, thereby \nreinforcing the CBN’s support for output growth and economic recovery, it, however, believed \nthat doing so will reverse more rapidly, the gains of price and exchange rate stability achieved so \nfar given the liquidity impact that would entail. The ensuing liquidity will exert pressure on the \nexchange rate in the light of increased capital flow reversals arising from monetary policy \nnormalization by the US Fed. This would further depress the capital market. \n \nAs for tightening, The MPC hold the view that, while tightening will strengthen the stability of the \nforeign exchange market because of its dampening effect on the demand for foreign exchange, \nit was however convinced that this would simultaneously dampen investment growth, widen the \noutput gap, depress aggregate demand and weaken output growth. \n \nThe MPC recognizes the fact that it had held the policy rate and other policy parameters constant \nover the last several meetings. The Committee underscores that by holding its policy position \nconstant, it has confidence in the various policies and administrative measures deployed by the \nBank which have resulted in the moderation in domestic price levels and stability in the foreign \nexchange rate. Thus, a hold position is an expression of confidence in the policy regime, \n9 \n \n \nClassified as Confidential \ngiven the gradual improvements in both output growth and price stability. On this premise, the \ndownside risks to growth and upside risks to inflation appears contained. \nThe Committee’s Decision \n \nIn light of the above, the MPC decided by a vote of all eleven (11) members present to HOLD. \nIn summary, the MPC voted to: \n \n1. Retain the MPR at 14 per cent; \n2. Retain the asymmetric corridor of +200/-500 basis points around the MPR; \n3. Retain the CRR at 22.5 per cent; and \n4. Retain the Liquidity Ratio at 30 per cent. \n \n \nThank you. \n \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n22nd November, 2018 \n10 \n \n \nClassified as Confidential \nPERSONAL STATEMENTS BY THE MONETARY POLICY COMMITTEE MEMBERS \n \n1. \nADAMU, EDWARD LAMETEK \n \nAfter two consecutive mild increases, headline inflation slowed, albeit weakly, in October 2018, \nreflecting a slight moderation in food inflation. The decline in food inflation more than compensated \nfor the marginal increase in core inflation to produce the observed decline in the headline inflation. \nNotwithstanding the decline, the underlying threats to consumer price stability have remained active, \ngiving fillip to a hazy medium-term outlook for inflation. The sources of this outlook include \nuncertainties around the path of fiscal policy and liquidity on the domestic front; and risks to external \nreserves accretion and exchange rate, coming from the global economic environment. \nOwing mainly to developments like monetary policy normalization in the advanced economies, trade \ndisputes and softening commodity prices, local currencies and capital markets in emerging markets \nand developing economies (EMDEs) have come under intense pressure in recent months. Although \nthe naira has fared better than most (other) currencies, the capital market has not been as resilient. \nIn the first ten (10) months of 2018, the NSE All-Share Index (ASI) declined by about 15 per cent, a \ndirect consequence of increased outflow of capital. Those conditions in the global economy spilling \nvulnerabilities are not likely to give way; instead, they could intensify going into 2019. This is reflected \nin the downward revision in October 2018 of the global output growth projection for 2018 and 2019 \nfrom 3.9 to 3.7 per cent by the IMF. The Organisation for Economic Cooperation and Development \n(OECD) is less optimistic about 2019 with its current global growth projection of 3.5 per cent. \nJuxtaposing the signals from the global environment with the country-specific vulnerabilities and the \noutlook for key economic concerns (further elaborated below) leads me to the conclusion that the \nrisks to price stability and economic \n11 \n \n \nClassified as Confidential \ngrowth have remained balanced. I, therefore, voted at the November 2018 meeting of the Monetary \nPolicy committee (MPC) to hold all policy parameters. \nFirst, it is important to note that at 11.26 percent, we cannot assume that inflation pressures have \nfully receded. The outlook does not offer any such assurance. On the contrary, the expected increase \nin private spending due to year-end festivities and the forthcoming general elections combining with \nthe more aggressive implementation of the capital side of the FGN budget for 2018 as well as payment \nin-part of the debt owed to contractors by Government could rapidly expand domestic liquidity. \nThough marginal, the increase in core inflation in October, being the first since November 2017, leaves \nno one in doubt about what could happen in the short- to medium-term if proactive steps are not \ntaken to rein-in domestic liquidity. \nThe challenge for economic policy on the side of economic activity is not by any means lighter. In Q2 \n2018, the growth (recovery) momentum slowed as oil output contracted and importantly, \ncontribution from agriculture slowed. The economy appears to be risking a low-growth trap which \nmust be averted. Meanwhile, the fiscal levers needed to mitigate this risk do not seem to be readily \navailable. Given the already high public debt, low revenue and buffers as well as rising yields, the \nscope for using fiscal policy to sufficiently push growth is narrowing. In effect, monetary policy could \ncontinue to be overburdened. \nAmong others, improving domestic credit continues to be a key imperative towards growing the \neconomy and creating jobs. In addition to the real sector interventions by the Bank, the current state \nof economic activity demands a marked improvement in commercial bank credit to shore up private \ninvestment. A resilient banking system is needed to ensure this. And so, it is heartwarming that key \nfinancial soundness indicators (FSIs) of the banking industry improved in October 2018 - industry \ncapital adequacy rose, while Non-Performing Loans (NPLs) moderated, amongst others. Sustaining \nthese improvements remains a key imperative for policy and partly argues for a non-hawkish \napproach to monetary policy at this time even though inflation remains a concern. \nGiven the weak growth outlook, financial system fragilities and inflation, some kind of policy trade-\noff is inevitable. However, in doing so, I recognize the primacy of the price stability mandate of the \n12 \n \n \nClassified as Confidential \nBank; as such, the decision to hold which implies sustaining the current fairly tight stance of policy is, \nin my view, consistent with the need to strike a balance between the competing imperatives of \nkeeping inflation in check, while not hurting growth and employment prospects. It is important to \nemphasize that the Bank has all along relied on sterilization actions using open market operations \n(OMO) and FX interventions which explains in part the relative exchange rate stability and the \nremarkable slowing of inflation from over 15 percent in 2017 to about 11 per cent in October 2018. I \nbelieve that the sterilization actions of the Bank are effective and should be sustained. \nAs I have observed previously, monetary policy cannot mitigate all of the current risks to economic \nstability. It can only complement sector policies and mostly crucially, fiscal policy. Given the \nindications coming from oil prices especially and the potential ramifications of a prolonged low crude \nprices for the entire economy, all macroeconomic policy levers will need to be engaged at this time \nto forestall a low growth trap. In voting for a hold, I have factored its various implications including, \nquite importantly, continuation of monetary sterilization and other administrative measures and \ninnovations like the real sector interventions and the provision of access to part of the cash reserves \nrequirement (CRR) for targeted credit to specific sectors of the economy by deposit money banks \n(DMBs). \n13 \n \n \nClassified as Confidential \n2. ADENIKINJU, ADEOLA FESTUS \nBackground \nThe fundamental factors driving the international and domestic economies as presented in the \nStaff Reports at the November MPC Meeting did not show significant departure from the last \nmeeting of the MPC in September. Nevertheless, some positive developments were clearly \ndiscernible that assuage some of the concerns that influenced the direction of my decision at the \nSeptember meeting. \nIn particular, the report on the banking system stability shows some improvements across major \nfinancial soundness indicators, like the capital adequacy ratio, liquidity ratio, returns on equity \nand assets as well as the non- performing loans (NPLs) ratios. This is an indication that the \nmeasures taken by the Bank have started to yield some positive results. I am also pleased about \nadditional measures being considered by the Bank to ensure the continuous soundness of the \nbanking and financial sector. This is critical to address the incidence of NPLs, improve credit flow \nto the economy and perhaps more importantly, boost confidence of the banking public on the \noverall soundness of the financial sector. The Bank cannot afford to shift its attention away from \neffective monitoring of the operations and conduct of the banking sector. \nIn the medium to long term, the performance of the banking system is tied to growth of the \neconomy and fiscal sector performance. Higher economic growth will boost domestic economic \nactivities, and reduce incidence of debt default. The latter outcome would also be achieved if \ngovernments at all levels pay contractors’ debts, as well as improvement in credit administration \nby the banking sector. \nThe report on the performance of the SMEs and micro-finance institutions is quite encouraging. \nThe Bank must find creative ways to boost credit to SMEs to support their employment \ngeneration capacity, productivity and economic growth. The capacity of the SMEs to transform \nthe economy is quite high and they deserve all the support they can get in order to overcome \ntheir current constraints, especially access to timely and affordable credit. \n14 \n \n \nClassified as Confidential \nThe Economic Report sounded a more ominous signs for the country going forward. Global \neconomic growth is facing significant headwinds with potential negative effects on the Nigerian \neconomy. The downward revision of global economic growth for 2018 to 3.7 from 3.9 per cent \nby the IMF may affect demand for oil and threaten global oil price. In fact, oil prices seem to have \nsettled at lower levels in recent weeks, and current projections against the background in the oil \nmarket fundamentals may not support a quick return to its previous high levels. The continuous \nuncertainty around the BREXIT, the unresolved America-China trade tensions, US sanctions on \nIran, the high volatilities in global financial markets, the rise of inflation in the US from 2.3 per \ncent in September 2018 to 2.5 per cent in October 2018, means the Federal Reserve monetary \nrates normalization would be sustained, continuous capital flow reversals in several emerging \nand frontier countries, the buffeting of the foreign exchange markets in several emerging \ncountries, are all creating uncertainties around the global economy. Nigeria is not immune from \nthese developments. Some of the effects are already showing in the economy as seen in stock \nmarket prices, the reduction in the level of foreign reserves and slower rate of foreign reserves \naccretion, and weak fiscal performance, Hence, domestic policy response must be proactive to \nmitigate their effects on the economy. \nHowever, on the flipside, the economy continues to show some resilience, and imbue confidence \nfrom foreign investors. The success recorded with the euro bond issue to fund capital projects if \neffectively used would improve state of infrastructure and boost private sector GDP, the \nPurchasing Manager’s Index continues to rise for the 19th consecutive months, the negative \noutput gap shows that there is some slack in the economy that can absorb expected demand \nshocks such as national minimum wage increase and increased electoral spending. GDP growth \nin the second quarter remains positive at 1.50 per cent, compared with 1.95 per cent in the first \nquarter. However, the GDP growth rate is far below the level anticipated in the ERGP. It is also \nnot strong enough to cut poverty and unemployment rates. The contraction of the industrial \nsector in the second quarter, is a source of concern given industrial sector’s potential for direct, \nindirect and induced employment and income multipliers. \nData released by the National Bureau of Statistics showed that inflation moderated slightly \n15 \n \n \nClassified as Confidential \nbetween September and October 2018. Headline inflation declined marginally from 11.28 per \ncent in September to 11.26 per cent in October, due to decrease in food & non-alcoholic \nbeverages and transport components. Similarly, food inflation reduced from 13.31 per cent in \nSeptember to 13.28 per cent in October. However, core inflation rose from 9.84 to 9.88 per cent \nbetween September and October, 2018 respectively. Monetary aggregates like M1 and M2 \ncontinue to grow at annualized rates lower than their provisional benchmarks. The significant \ndifference between average lending and deposit rates is not showing sign of narrowing. This is \nindicative of lack of competition in the banking sector as well as high operational costs by the \nbanks. Reducing the operations costs through infrastructural sharing wherever possible, and \nother deliberate efforts by the banks will go a long way to reduce the lending deposit gaps, which \nis one of the highest in Africa. The high retail lending rates is shutting out SMEs from credit and \ncontributes to the current levels of NPLs in a slow growing economy. \nI still have strong concern about the fiscal side of the economy. The relatively under performance \nof non-oil revenue, the high costs of governance, the slow and overlapping budget operations, \nhigh budget deficits, the increasing share of foreign debts in total debt stocks, the share of budget \nallocated to debt servicing, the high infrastructural deficit that impairs competitiveness and \nproductivities of the economy, lack of fiscal buffers, the uncertain state of the Petroleum Industry \nGovernance Bill (PIGB), the long run impacts of fuel subsidy, the poor power sector performance \nthat unnecessarily increases operational costs of firms and households, have to be addressed \nurgently as they impact on the long term trend of the economy. \nDecision \n \nWhile a number of economic and political uncertainties continue to weigh on my mind at both \ninternational and domestic economic levels: the low economic growth rate, the declining foreign \nreserves, slow credit growth, low tax/gdp ratio, the continuous high fiscal dependence on oil, the \nhigh lending- deposit interest rate gap, the volatility in the stock market, uncertainty in the \nrelease of the capital budget, the uncertain state of the global economy, the fluidity of the global \noil market, the uncertainty surrounding the 2019 election, the continuous outflow of portfolio \n16 \n \n \nClassified as Confidential \ninvestment, etc, are some of the major issues that will weigh on the economy. I am partially \nmollified by the efforts being taken by the Bank and by the government to address some of these \nissues and mitigate their impacts on the economy. For instance, the decision of the government \nto allocate the euro loans exclusively to fund capital budget, as well as decision to avoid the \nlabour industrial crisis, are steps in the right direction. \nSecond, the negative output gap shows that there are some buffers to accommodate the final \ndecision on the national minimum wage and expected electoral expenses in the run up to the \n2019 elections. \nFinally, the inflation rate has moderated since the last meeting. The upbeat in the performance \nof the SMEs, and large number of the micro-finance banks, and some of the Bank’s non-\nconventional measures to stimulate the economy have been encouraging, and yielding some \ndesired results. The positive trend in key indicators of the banking and financial sectors \nperformance has also raised positive expectations about the economy. The Bank must continue \nto be proactive and monitor the performance of these non-conventional measures, which at best \nis temporary in my view in order to move the economy into the path of sustainable growth. The \nfiscal side must play its role in balancing the economy to ensure that the Bank returns to its \nprimary roles of monetary and exchange rate stability. \nIt is on the basis of the above that I cast my vote to: \n \ni. Maintain the MPR at 14.0 Per cent \nii. maintain CRR at 22.5 Per cent \niii. Maintain existing asymmetric corridor around the MPR \n17 \n \n \nClassified as Confidential \n3. \nAHMAD, AISHAH N. \n \nIntroduction \nAt this last MPC meeting of the year, it is vital to reflect on economic developments thus far and \nhow well we have achieved our monetary and price stability remit in the face of rising risks. The \nCommittee has remained vigilant, forward looking and braced to weather the storms; which, \nthankfully, have been generally slow to manifest. \nGlobal economic activities in 2018 commenced on a broadly optimistic note. The strong \nheadwinds which confronted the global economy in 2017 moderated, giving way to prospects for \nstronger growth in 2018. Halfway into the year, however, downside risks to global growth \nbecame more evident- faster pace of the US policy normalization, a developing global trade war, \nrising public debts and increasing financial vulnerabilities, emerging markets’ capital reversals \nand volatile crude oil prices. These developments resulted - as anticipated in my July personal \nstatement - in tempered optimism and a downward review of global growth projections by the \nInternational Monetary Fund (IMF) to 3.7 percent from its earlier projection of 3.9 percent. \n \nThese emerging risks had mixed impact on emerging market economies ranging from currency \ndepreciations to slowing growth and rising price levels. The Central Bank’s sustained tight \nmonetary policy stance, and other initiatives aimed at stabilizing the exchange rate and \nmaintaining confidence of foreign investors, which have been widely commended, tempered the \neffect of these shocks. In addition, tailwinds, most significantly, high crude oil prices, averaging \nabout US$70p/b for most of the year, also helped strengthen prospects for fiscal consolidation \nand build strong external reserve buffers. \n \nAs a result, exchange rate remained relatively stable with improved convergence across all \nmarket segments. For instance, it recorded a daily average of N363.87/US$ between September 26 \nand November 16, 2018 at the Investors’ and Exporters’ (I&E) window and averaged \nN360.98/US$ at the Bureau De Change (BDC) segment over the same period. \nMaintaining exchange rate stability has not been without cost. External reserves have slowly \n18 \n \n \nClassified as Confidential \ndepleted over the last six months in the face of portfolio flow reversals in response to US policy \nnormalization and rising geopolitical uncertainties. However, the Bank’s interventions and use of \nheterodox policy measures to attract and retain foreign exchange inflows and deepen the \nmarket, have ensured that Nigeria remained a relatively competitive investment destination, \ncontinuing to attract new portfolio investors. \nTight monetary policy stance coupled with stability in exchange rate helped to moderate \ninflation; headline inflation which had risen to 18.72 percent in January 2017, declined to 11.26 \npercent as at October 2018. Although economic activity lost some momentum in Q2 2018, \nrecording 1.50 percent growth compared with Q1 numbers at 1.95 percent, GDP growth remains \non a positive trajectory, projected to average about 1.90 percent in 2018 according to the IMF. \nIt is quite gratifying that key prudential ratios (capital adequacy, liquidity and non-performing \nloans) and other performance indicators in the banking system have improved compared with \nearlier in the year and the August 2018 position. Of particular interest is the recent growth in \ncredit to the private sector (August 2018; 0.81 percent and October 2018; 1.94 percent) following \nmonths of contraction. These are indications that, among other measures, the CBN’s efforts at \nenhancing access to finance for employment elastic sectors are yielding fruit. For this reason, I \nsupport the Bank’s continued interventions in the real sector to ensure continued growth in \ncredit to, and output of, key sectors like Agriculture and Manufacturing. A critical headwind to \nwatch, however, is the recent downward trend in oil prices. Given portfolio concentrations in \noil and gas, this will require banks to build robust capital buffers to remain resilient to any shocks. \nOn the whole, the imminent settlement of Federal government contractual obligations to the \nprivate sector and relatively positive domestic GDP growth prospects is expected to further \nstrengthen asset quality, solvency ratios and sustain financial system stability. \n \nAs we approach 2019, new downside risks are emerging as existing risks continue to intensify. \nSlowing global demand and growth projections, volatile oil prices, and sustained monetary policy \nnormalization in the US, have implications for exchange rate stability and by extension, price and \n19 \n \n \nClassified as Confidential \nmonetary stability. In addition, the upcoming general elections and unintended but largely \ncontractionary fiscal environment due to the delays in passing the 2018 budget, also have \nimplications for sustained economic recovery and growth. \nIt is safe to say that, based on data from NBS, which shows moderated headline inflation (year-\non-year) in October 2018 compared to the previous month, there seems to be no significant near \nterm threat of rising prices. Even in the face of the planned minimum wage increase, it appears \nthat its inflationary effects may be largely benign given existing low aggregate demand. \nAs we brace ourselves for a tough year ahead, it is imperative to consolidate on the price stability \ngains on the monetary side by stimulating stronger and more resilient GDP growth. This calls for \na policy stance that achieves price stability conducive to economic growth and it is my considered \nview that the current policy rate is appropriately placed to achieve this objective. \nTherefore, I vote to retain the current tight monetary policy stance, by keeping MPR at 14%; Cash \nReserve Ratio at 22.5%; Liquidity Ratio at 30% and Asymmetric corridor at +200 and -500 basis \npoints around the MPR. \n20 \n \n \nClassified as Confidential \n4. \nASOGWA, ROBERT CHIKWENDU \nBackground: \nThe domestic macroeconomic outlook preceding the November 2018 MPC meeting showed signs \nof improvement eventhough surrounded by rising downside risks and vulnerabilities. The 2018 \nthird quarter GDP figures were yet to be released at the meeting time, but there are general \nindications of economic strengthening. The downsides risks are generally the same as identified \nin the last meeting, including the turbulent oil prices, spending pressure in the run-up to the 2019 \nelections and volatility in capital flows especially the portfolio instruments. At the international \nlevel, elevated periods of policy uncertainty persist with economic growth slowing down in \nseveral advanced economies by the third quarter of 2018 and with possibilities of even further \ndownslide as trade tensions escalate and global financial vulnerabilities increase. Monetary \npolicy decision at this November meeting should therefore avoid any attempts to derail the \ndomestic recovery efforts whilst maintaining a consistent response to the evolving international \neconomic scenario. \nFragile and Uncertain International Economic Outlook: \n \nThe global economy remains fragile and world growth forecasts for 2018 and the early parts of \n2019 present evidence of some underlying challenges in several key economies. There have been \nrepeated downgrades of growth forecasts in the past six months which suggests that the risks \nand headwinds facing most of the advanced economies as well as emerging markets and \ndeveloping economies (EMDEs) may just be structural in nature. With global growth in 2018 \ndowngraded to 3.7 per cent from an earlier projection of 3.9 per cent and against the backdrop \nof current uncertainties stalling global trade, growth momentum may further be weakened in \n2019. \nCBN staff report show that output growth disappointed in many strong economies since the trade \ntensions heightened and energy prices somewhat soared. In the US, the Euro Area, China and \nIndia growth deteriorated in the third quarter of 2018, but there were marginal growth upticks \n21 \n \n \nClassified as Confidential \nin Japan and UK in the second quarter of 2018. In Sub-Sahara Africa, growth remained under \npressure in both commodity and non-commodity exporting countries. While growth in the \nsecond quarter of 2018 slowed in Kenya, it was flat in Ghana while it remained in the negative \nterritory in South Africa as the recession continued. \nAlthough the sentiments for possible growth have remained strong despite the recent \nheightening of trade disputes, emerging data suggests that the challenges remain unresolved. \nRecent Purchasing Managers Index in key advanced economies such as China, the Euro Area, \nJapan and USA still show softer growth for the export market. In Germany, manufacturing orders \nhave fallen by about 4 percent on a monthly basis since June 2018. \nPolicy interest rates for many global economies remained unchanged between September and \nNovember 2018 due to rising uncertainty and the lack-lustre economic growth. The USA, UK, Euro \nArea, Brazil and India all retained policy rates at the September 2018 levels. In China, policy rates \nhave remained the same since late 2017 as the rebalancing towards more domestically-oriented \nsectors continues in the country. Although monetary policy tightening in the USA appeared to \nhave slowed after the third policy rate increase in September 2018, expectations of more \nsurprises by the Federal Reserve have continued to generate financial market disruptions with \ncapital flows triggering currency depreciations in many emerging and developing economies. CBN \nstaff report show that the US dollar appreciated against many international currencies. In Europe, \nthe British pound, euro and the Russian rubble all depreciated against the US dollar eventhough \nthey look broadly unchanged in real effective terms. \nSimilarly, the currencies of China, India, Canada, Mexico, Nigeria, South Africa and Kenya all \ndepreciated against the US dollars. \nHigher oil prices lifted headline inflation moderately in many emerging market and developing \neconomies over the past few months. While there were mild declines in headline inflation in the \nUS, UK and Japan, there were marginal upticks in the Euro area, Brazil, Egypt, China. In many of \nthese countries, core inflation (excluding all food and energy items) actually declined. For \ninstance, core inflation declined in Brazil, Mexico, Russia suggesting lower pass through effects \n22 \n \n \nClassified as Confidential \nfrom higher oil prices and exchange rate depreciations. \nRecovery Signs on the Domestic Economic Front. \n \nThe Nigeria 2018 third quarter GDP is expected to be released by mid – December but there are \nalready signs of slight improvement. In the second quarter of 2018, output lowered to 1.50 per \ncent from the first quarter level of \n1.95 per cent which was considered temporary. The manufacturing PMI in November 2018 was \n57.9 index points which is an expansion and also grew faster than the Index in October which \nstood at 56.8 index points and that of September at 56.2 index points. The November PMI also \nshows that 13 of the 14 manufacturing sub-sectors recorded increases in production levels. The \ncomposite PMI for the non-manufacturing sector in November 2018 at 58.4 index points also \ngrew faster than the 57.0 points recorded in October and the 56.5 points in September 2018. The \nhigh PMI reading in November signals that the economic growth moderation witnessed in the \nsecond quarter of 2018 may have been abated and private sector growth is actually picking up. \nThe October 2018 Inflation Report also shows some encouraging signs as well. The year-on-year \nheadline Inflation which had increased marginally for two consecutive months from 11.14 per \ncent in July to 11.23 per cent in August and further to 11.28 per cent in September declined \nmarginally to 11.26 per cent in October. The month-on month decline has been consistent for \nsome time, from 1.13 and 1.05 per cent in July and August, respectively, to 0.84 and 0.74 per \ncent in September and October, respectively. Similarly, the food inflation (year on year) which \nhad increased from 12.85 per cent in July to 13.16 per cent in August and further to 13.31 per \ncent in September, declined to 13.28 per cent in October 2018, while on a month by month \nbasis, food inflation declined from \n1.42 per cent in August to 1.00 per cent in September and further down to 0.82 per cent in \nOctober 2018. \nThe marginal declines in both headline inflation and food inflation (year-on-year and month-on-\nmonth) shows that agricultural prices may have moderated slightly very recently and the earlier \nconcerns raised at the September 2018 MPC meeting about the cost push nature of the July and \n23 \n \n \nClassified as Confidential \nAugust Inflation arising mainly from scarcity of farm produce seems to have abated. \nOn the financial soundness indicators, there are encouraging signs as reported in the November \nMPC meeting which is attributed partly to the current regulatory efforts at reducing the volume \nof Non-performing loans. CBN staff report show that the NPL ratio which has risen to 14.70 per \ncent in August 2018 had declined to 14.05 per cent in October which signals improvement even \nthough it is still above the allowed prudential maximum thus requiring comprehensive NPL \nreduction strategies from the banks and the regulators. In addition, the modest improvement in \nthe Capital Adequacy Ratio (CAR) and the Profitability Indicators (ROE and ROA) in October as \ncompared to August shows that the financial sector weaknesses which was a key concern at the \nlast MPC meeting of September are partly being halted. \n24 \n \n \nClassified as Confidential \nMounting Vulnerabilities: \n \nCapital inflows have declined consistently especially since 2018, while outflows have more than \ndoubled during this same period, thus making external financing more challenging in Nigeria. \nThere have been sharp declines in inflows especially for portfolio investments and FDI. Between \nJuly and September 2018, foreign portfolio investors withdrew more than N94. 4 billion Naira \nfrom the Nigerian Stock market alone. These movements have been attributed to the monetary \npolicy normalization process in some advanced economies which has seen interest rates in places \nlike the USA increased for three times in 2018. Besides, the usual investors fear about the 2019 \ngeneral elections may have also been a contributing factor. \nGiven that monetary policy forecasts for 2019 in many advanced economies suggests policy rate \nincreases, the capital flow position in Nigeria may possibly worsen in the near future. For \ninstance, the US Federal Funds rate is expected to reach 3.5 per cent by end of 2019, while the \nprevailing zero rates in the Euro Areas is expected to move a bit higher by mid-2019. \nFurthermore, the return of frequent volatility in the oil market is already putting pressure on \ncommodity exporting countries like Nigeria. Oil prices which had reached a high of $79. 4 per \nbarrel in October 2018 (which is the highest level since November 2014) from $77.2 per barrel in \nSeptember 2018 had suddenly dropped to $62.60 in late November. There are still expectations \nthat prices may drop further in the early months of 2019. \nThis fall in oil prices contributed to a weakening of the external reserve positon which declined \nfrom $47.15 billion in June 2018 to $40.61 billion in October. Generally, weaker reserve positons \nmean less room for the monetary authorities to respond to foreign currency pressures which is \na threat to the relative stability in Nigeria’s foreign exchange market. While the CBN’s current \napproach has helped maintain stability in the market for several months, a continued decline of \ninternational oil prices in the current context of limited domestic fiscal buffers will certainly \ndistort the foreign exchange stability which the country enjoys now. \nIn addition, the recurring issue of pressure on government finances because of the depressed oil \n25 \n \n \nClassified as Confidential \nrevenue and the consequent widening of fiscal deficits is now an over flogged phenomenon. The \ndebt levels (external and domestic) are currently deemed unsustainable and only recently, the \ncountry returned to the international bond market with new Eurobond issuance while there are \nalso plans for the second SUKUK bonds at the domestic market in December 2018. The prospects \nof tighter monetary policy can however be counterproductive at this time as it may expose the \ncountry to higher borrowing costs and heavy debt servicing schedule. An outright fiscal tightening \nmay not be the best panacea for now given its limiting role on the growth momentum, but \nincreasing domestic revenue to GDP ratio while re-orienting the composition of expenditures will \nbe key to reducing the fiscal deficits. \nWhile the trend of financial soundness indicators (Non-performing loans ratio, the Capital \nAdequacy ratio and profitability) look positive and improved in November as compared to the \nstatistics presented in the MPC September meeting, the volatility and frequent swings in these \ncore indicators are all signs of unresolved financial sector weaknesses. For instance, the non-\nperforming loans ratio although decreased in October, remains high and heavily concentrated in \nthe key sectors which contribute more than two thirds of the country’s national revenues. With \nmany of these firms relying more on bank financing rather than market financing, a surprise \ntightening of monetary policy could further expose these vulnerabilities thus derailing the \nrecovery process. Identifying the primary obstacles to the non-performing loans resolution will \nbe critical for a complete balance sheet clean-up which will structurally address the financial \nsector weaknesses in Nigeria. \nDecision: \n \nAt this time of heightened uncertainties at the international economic levels, and with domestic \noutput growth improving moderately amidst lowering inflation levels, a further tightening of \nmonetary policy may not be warranted. On the other hand, lowering of policy rates will in itself \nbe counterproductive. I am therefore disposed to keeping the policy parameters as they are. This \ncautionary approach will prevent the economy from overheating while we monitor \ndevelopments in the near-term. \n26 \n \n \nClassified as Confidential \nI will thus vote to: \n \n• Retain the MPR at 14.0 % \n• Retain the CRR at 22.5% \n• Retain the Asymmetric Corridor at +200/-500 basis points \n• Retain the Liquidity Ratio at 30.0%. \n27 \n \n \nClassified as Confidential \n5. \nBALAMI, DAHIRU HASSAN At \nThe Global Level \nGlobally, the major development that have implications on the Nigerian economy during the \n2018 include the following: tension and uncertainty associated with Brexit deal, U.S - China trade \nwars, U.S sanctions on Iran, volatility of oil market price, deepening crisis in Venezuela and \nconcerns over Italy’s 2019 budget etc. These events slowed down the momentum of global \neconomic activities and are of concern to the Nigerian economy and its trading partners such as \nU.S, Euro Area, China, Japan, South Africa, Kenya etc. In terms of prices, the global inflation has \nbeen projected to rise to 3.2 percent in 2018 as against 3.1 percent in 2017. In the commodity \nmarket, price of the following commodities such as gold and agriculture products have risen. \nThese have implications on global output growth, estimated at 3.7percent in 2018 against 3.9 \npercent as earlier projected. \n \nAt the Domestic level \n \nGenerally, the outlook of the Nigerian economy in 2018 is positive, but the growth of the \ndomestic output is still low. The output gap is about 1.50 percent as against population growth \nrate of 2.62 percent. The actual output is below potential productive output, which means a \nsignificant improvement in output supply will tame inflation. The critical question is how can we \nstimulate output growth in the economy? Domestic output growth can be stimulated by \ndeploying more credit to the real sector of the economy. This can be achieved through the use \nof unconventional monetary policies to assist the fiscal side of the economy and making sure \ncredit create value chains across board. \nAlthough, inflation rate moderated in October 2018, there is need for further moderation, \nbecause there is a possibility of an uptick in inflation in the economy in 2019. It should be noted \nthat inflation in Nigeria to some extent is largely structurally driven rather than monetary. \nTherefore, the structural factors need to be addressed so that money supply in the economy \nwould drive growth in real sector of the economy (agricultural sector, manufacturing sector and \n28 \n \n \nClassified as Confidential \nSMEs Inflation can be reined in by correcting the shortcomings of the exchange rate regime. In \nattacking addressing, open market operation (OMO) is a good instrument to continue to be \nemployed by the Bank taking into consideration the level of liquidity in the system. \nThe growth in money supply and liquidity in from banking sector have not been very effective \nbecause of a number of interventions and under performance to the benchmark is not driving \nthe needed monumental growth in the economy. However, there is some improvement in the \nperformance of the banking sector, as indicated by various indices such as the capital adequacy \nratio (CAR), non- performing loans (NPLs), liquidity ratio, return on asset (ROA) and return on \nequity (ROE). With regard to the high NPLs of the deposit money banks (DBMs), action needs to \nbe expedited to recover loans from the oil and gas sub-sector of the economy, which accounts \nfor the larger share of the NPLs. Though the NPLs deteriorated largely because of low economic \nactivity affected the ability of the sectors to create value adding production lines. \nChallenges at the Domestic Level \n \ni. \nForeign Exchange Market \n \nThere is threat to exchange rate stability due to the pressure on external reserves as well as \nincrease in capital outflow. It should be noted that capital outflows are accelerated due to lack \nof instruments for foreigners to invest in. Price stability is better achieved if we can prevent \nexchange rate volatility through proper management of external reserves. The exchange rate \nmarket is largely affected by the volatility of the oil price and the level of domestic production. \nCapital outflow can be reduced by creating more attractive instruments at the capital while \ndecline in reserve can be stemmed with significant diversification of the economy through \nincreasing production of commodities such as palm oil, fish and oil and gas export. \nAlso of importance is the drive to increase SMEs access to finance as well as other sectors that \nhave employment generation potentials. The continuation of the anchor borrowers programme \n(ABP), discriminate cash reserve requirement and effective performance of the Investors and \nExporters window introduced in April 2017 would go a long way to achieve diversification of the \n29 \n \n \nClassified as Confidential \neconomy. \nii. \nPerformance of the Banking Sector \nThe financial soundness indicators in terms of Capital Adequacy Ratio (CAR), Non-Performing \nLoans (NPLs), Liquidity Ratio, Return on Equity (ROE) and Return on Assets (ROA) have improved \nover the levels at the last MPC. The improvement in the capital adequacy ratio is due to \nregulatory actions of the CBN. It should be noted that NPLs have also shown slight improvement. \nCurrently, the economy does not have problem with liquidity. Without the outlier banks, Nigerian \nbanks can favourably compare with its pears. \niii Low Level of Credit to the Real Sector of the Economy \n \nThe ratio of credit to gross domestic product (GDP) is low. Credit to other sectors of the economy, \nparticularly when Deposit Money Banks (DMBs) are not willing to do so is weak, therefore, we \ncan encourage the establishment of more micro-finance banks and strengthen the existing ones \nso as to improve access to credit to poor. However, this may result into conflict of interest to the \nCBN. \niv. Cyber Security \n \nAnother challenge observed at this meeting is related to cyber security, a frame-work therefore \nneed to be deployed to deal with cyber security to reduce the level of cybercrime through the \ncreation of security operation centres. Trained ethical hackers can be employed by banks while \ninformation must be shared among peers to protect the industry. As we approach 2019, it is \nexpected that MPC should identify the variables affecting the economy, formulate appropriate \npolices as well as the strategy for their implementation, monitoring and evaluation within the \nCBN’s statutory mandate. \nPolicy Choice \n \nOn the basis of the above analysis, I voted for a hold on earlier MPC decisions which have resulted \nin dampening inflation pressures both on year-on-year as well as month-on-month basis. It has \nalso promoted exchange rate stability and positive growth. Loosening may give a wrong signal to \n30 \n \n \nClassified as Confidential \nthe public. On the other hand, tightening will stifle growth. MPC decisions in the past have been \ncomplimented by the clarity of reasoning and the direction we are heading, for example \nconvergence in the foreign exchange market has been achieved. \nI therefore vote to retain the following: \n \ni. \nRetain the MPR at 14.00 percent, \n \nii. \nRetain the CRR at 22.50 percent, \n \niii. \nRetain the liquidity ratio at 30.00 percent, and \n \niv. \nRetain the Asymmetric corridor at + 200 and -500 basis points around the MPR. \n31 \n \n \nClassified as Confidential \n6. \nISA-DUTSE, MAHMOUD \nA. INTRODUCTION \n \nThe world economy continues to grapple with several key issues that engender under-\nperformance, such as, the US-China trade war, US sanctions on Iran, the lingering BREXIT deal, \ntightening financial conditions in major advanced economies, geo-political concerns and political \ntensions. These developments have resulted in mounting policy uncertainties, disruption in \nglobal trade flows, currency depreciations and huge capital outflows from vulnerable \nemerging/developing economies. On the domestic front, there is a plethora of risks that threaten \nthe attainment of desirable economic outcomes. \nB. EXTERNAL ECONOMIC CONDITIONS \n \nThe un-abating headwinds to economic activities necessitated the downgrading of the global \ngrowth forecast by 0.2 percentage point from the earlier 3.9 per cent for 2018 to 3.7 per cent. In \nbroad terms, the slowdown in global output has potential negative implications for oil exporting \ncountries like Nigeria as weaker demand for oil will translate into reduced oil revenue. Already, \ncrude oil prices have started softening following rising supply and dimmer prospects for demand. \nThis is against the background of US sanctions on Iran which did not result in the expected oil \nprice gains as waivers were granted to some countries to continue importing Iranian oil. Thus, \nNigeria must brace up to avoid diminution of foreign reserves. \nA major development in the world economy that has impacted negatively on Nigeria and some \nother emerging/developing economies is the continued tightening of monetary policy in \nadvanced economies. Apart from the US Fed and the Bank of England (BoE) who are pushing \nforward with their guidance on monetary policy normalization, the on-going monetary \naccommodation in the Euro Area may come to a halt by December 2018 with the expectation \nthat policy rate will begin an upward trajectory. However, recent growth data shows a slowdown \nin the US economy as real GDP growth fell to 3.5 per cent in Q3 2018 from 4.2 per cent in the \nprevious quarter on account of declining consumption, investment and government spending. \nGrowth in the Euro Area also decelerated in Q3 2018. These developments imply a reduction in \n32 \n \n \nClassified as Confidential \nthe forces contributing to capital outflows from Nigeria. \nC. DOMESTIC ECONOMIC CONDITIONS \n \nThe current statistics indicate that real GDP growth rate stood at 1.5 per cent in Q2 2018 as \ncompared with 1.9 per cent in the previous quarter. In the absence of GDP data for Q3 2018, the \nPurchasing Manager’s Index (PMI), provides a rough approximation of economic performance. \nThe PMI for both manufacturing and non-manufacturing sectors in October 2018 portrays \nconsistent expansion for the 19th and 18th consecutive months, respectively. The implication is \nthat the economy is unlikely to slide into recession in the near term, even though, growth outlook \nremains weak. Moreover, downside risks such as the late passage and implementation of the \n2018 budget, security challenges, 2019 election spending, inadequate real sector financing and \nmultiplicity of structural problems may affect growth outcomes. Thus, it becomes imperative to \ntake cognizance of output growth in any policy framework to curtail pervasive high level of \nunemployment. \nHeadline inflation (year-on-year) declined marginally in October 2018 to 11.26 per cent from \n11.28 per cent in the previous month. On a month-on-month basis, headline inflation also \ndecelerated to 0.74 per cent from 0.84 per cent in the review period. Further month-on-month \nanalysis indicates that while food inflation fell from 1.0 to 0.82 per cent, core inflation rose from \n0.64 to 0.80 per cent between September and October 2018. Although overall, prices moderated, \nthe rise in the core inflation component is a source of concern. Moreover, inflation uptick may \noccur when the new minimum wage takes effect in line with historical experience. This is against \nthe backdrop of reserve money exceeding the Q4 2018 provisional quarterly benchmark – a \nreflection of increased money supply and warning against inflationary pressures in the medium \nterm. \nMonetary conditions in the domestic economy witnessed some improvement as maximum and \nprime lending rates moderated in October 2018 but remained high. Private sector credit grew by \na paltry 1.94 per cent and fell below the benchmark of 12.40 per cent. Any rate hike at this time \nwill further stifle credit extensions to the real sector. Capital market indices have continued to \n33 \n \n \nClassified as Confidential \ndeteriorate on account of several factors including gradual tightening of financial conditions in \nadvanced economies and the rising price of gold in the international market. These developments \nhave negative implications for the accretion of foreign reserves, naira-dollar exchange rate \nstability and price stability. Therefore, monetary policy should be targeted at guiding market \nsentiments in a favourable direction. \nGiven that a strong banking system is a necessary condition for sustained economic growth, it is \nencouraging to observe noticeable improvements in key banking stability indicators such as \ncapital adequacy ratio, non performing loans and profitability ratios during the review period. Of \nnote is the point that the increasing resilience of the banking system is occurring within the ambit \nof an appropriate monetary policy mix, which should be sustained. \nC. VOTING DECISION \nTaking into account the downside risks to growth and possible inflationary pressures in the short \nto medium term, I voted for maintenance of the current policy stance. \n• MPR should remain at 14.0% per annum \n• The asymmetric corridor at +200/-500 basis points \n• Retain liquidity ratio at 30.0% per annum \n• Maintain the CRR at 22.5% per annum \n34 \n \n \nClassified as Confidential \n7. \nNNANNA, OKWU JOSEPH \n \nGrowth was lower than projected, reflecting weak aggregate demand on account of weak \npurchasing power and lagged implementation of the capital budget. Available data showed that \nReal GDP growth declined to 1.50 per cent in the second quarter relative to 1.95 per cent in the \nfirst quarter of 2018 (NBS, 2018). The change was attributed to the tepid growth in the non-oil \nand oil sectors. Specifically, construction, services and agriculture sectors grew by 7.66, \n4.19 and 1.19 per cent, respectively. The oil sector fell by 3.95 per cent during the period, in \ncontrast to a growth rate of 14.77 per cent in the first quarter. Key PMI indicators showed that \nmanufacturing and non-manufacturing PMI stood at \n56.2 and 56.5 index points in September, respectively, indicating a gradual momentum in the \nsector. \nInflationary pressures moderated due to positive supply shocks associated with improved post-\nharvest food supplies. Headline inflation declined marginally in October to 11.26 per cent \ncompared with 11.28 per cent in the previous month. Similarly, food inflation fell to 13.28 per \ncent at end-October 2018, from 13.31 per cent in the preceding month. However, core inflation \nrose slightly by 0.1 percentage point to 9.9 per cent relative to 9.8 per cent recorded at end- \nSeptember 2018. On month-on-month basis, headline and food inflation moderated, while core \ninflation, increased marginally in the month of October, due, mainly, to cost-push factors. Upside \nrisks to the inflation outlook in the near- term remain the anticipated 2019 election spending, \nhigh energy cost, protracted herder-farmer problem and the poor transport infrastructure. Given \nthe current out-put gap, I do not expect the implementation of the expected general wage \nincrease to trigger inflation in the near term. \nDespite the growth in the monetary aggregates, it was however, insufficient to significantly \ntrigger demand-pull concerns. Relative to the level at end- December 2017, broad money supply \n(M2) grew by 4.71 per cent at end-September 2018, annualised to 6.28 per cent. Money market rates \nreflected liquidity conditions in the banking system, indicating the relative effectiveness of CBN liquidity \nmanagement strategy. The monthly average inter-bank call and OBB rates were 14.07 and 14.05 per cent, \nrespectively for October 2018, vis-à-vis the monetary policy rate of 14.0 per cent. \n35 \n \n \nClassified as Confidential \nDespite significant pressure from non-performing loans (NPLs), systemically important top-five \nbanks in the banking industry, which account for over 50.0 per cent of total banking sector \nassets, reveal soundness of the financial system. Broad rebalancing of the industry is expected \nto be sustained, consistent with the pace of economic recovery, supported by: continuous \nimprovement in oil prices and production volume; and sustained regulatory oversight. Overall, \ncredit to the core private sector has leveraged on the emerging positive sentiments, and the lull \nin government borrowing, to increase by 2.20 per cent in September 2018 and 2.93 per cent \nannualized. Net credit to the government contracted by 6.25 per cent in September 2018 over \nthe level at end-December 2017, representing an annualized decline of 8.34 per cent. \nLingering monetary policy normalisation in some advanced economies and the uncertainty in \nthe domestic environment has continued to weigh in negatively on the financial markets, \nleading to a sell-off of highly capitalized stocks. Consequently, equities market indicators were \nnegative in the review period. The All-Share Index (ASI) decreased by 6.84 per cent from \n34.848.45 on August 31, 2018 to 32.466.27 on October 31, 2018. Similarly, Market Capitalization \n(MC) decreased by 6.84 per cent from N12.72 trillion on August 31, 2018 to N11.85 trillion on \nOctober 31, 2018. A reversal of the bearish trend is, however, expected in the medium term all \nthings being equal. \nI hold the view, that, expectation of expansionary fiscal policy in the near-term driven by the \ndesire to address the infrastructure deficit, and satisfy labour union wage demands remain a \nconcern to macroeconomic stability, but should help the already fragile growth if the expenditure \nis well targeted. As it is evident, the Federal government fiscal deficit has continued to widen and \nconcomitantly, the debt burden is on the rise, narrowing the fiscal space for the implementation of growth \nrelated programmes. The government can build fiscal buffer through the privatisation of some \ninefficiently managed national assets, particularly, the refineries and elimination of subsidy in PMS \nconsumption. \nIn the foreign exchange market, I note the effectiveness of the current flexible exchange rate \npolicy regime, the emergent organic convergence and exchange rate stability. Consistent with \nthe improved FX liquidity and a healthy external reserve buffers, the external sector prospect \n36 \n \n \nClassified as Confidential \nremains positive. The current account surplus observed in recent times will be sustained on \naccount of recovery in oil prices and high export revenues. The exchange rate at the I&E window, \nwhich recorded a weighted average of ₦362.38/US$ at end-August 2018, was ₦363.93/US$ in \nOctober 2018. The naira exchange rate at the retail SMIS window and the BDC segment remained \nat an average of ₦330.00/US$ and ₦359.0/US$, respectively. These rates are relatively aligned \nwith the relative purchasing power parity rates of the naira. \nAgainst the backdrop of continued stability in the key macroeconomic fundamentals and \nconcerns about emerging fiscal surprises, and palpable political risks, I vote to keep all the policy \nmetrics at their contemporaneous levels. \n37 \n \n \nClassified as Confidential \n8. \nOBADAN, MIKE IDIAHI \nIntroduction \nIn the globalized world, increased trade and capital flows is a major feature. However, policy \nmaking in individual countries has also become globalized in the sense that policy directions in \nsuch countries have become responsive to developments in global commodity and financial \nmarkets. Also, the policies of international financial institutions and leading countries in the \nadvanced world are also important drivers of policies in the emerging and developing countries \n(EADCs). Consequently, this personal statement on the monetary policy direction in Nigeria is \ninformed by key developments in the global economy and the domestic economy. \nGlobal developments and implications for the Nigerian Economy \n \nWorld trade has continued to witness uncertainties as a result of the trade policy actions of the \nUnited States government and unstable global growth trends. The United States’ trade war with \nChina and other major trading partners, reflecting the imposition of tariffs and counter-tariffs \nagainst each other, has produced uncertainty as to the full effect on the volume of trade and \nglobal output. One of the reasons for downgrading global growth for 2018 from the 3.9 percent \nearlier projected to 3.7 percent is the persisting trade war between China and its major trading \npartners in Europe and North America. The continued use of trade policies in the United States \nis one of the growth-mitigating factors. Amid the tariff war, China’s economy has further \nweakened with growth slowing to 1.6 percent in the third quarter from 1.7 percent in the second \nquarter of 2018. This, amid its current re-balancing programme could affect its trade with Nigeria. \nHowever, the Currency Swap agreement may ameliorate the situation and it should therefore be \nsustained. \nWeak global growth is not good for the sale of Nigeria’s major commodity export – crude oil. To \nworsen matters current developments in the oil market are not cheering. The price of Bonny light \ncrude which stood at US$ 79.03 per barrel on September 14, 2018 dropped to US$ 67.02 per \nbarrel on November 5. The price further dropped to US$ 62.6 per barrel on November 20 due to \nrising supply and a weaker demand for crude oil. Although US’ sanctions against Iran went into \n38 \n \n \nClassified as Confidential \neffect on November 5, 2018, the government has, however, granted sanction waivers to eight \ncountries to continue importing Iranian oil over a period of six months, thereby easing fears of \nimpending shortages that could shore up the price of oil. Besides, Saudi Arabia has signaled its \nreadiness to cover any production shortfalls that may arise from US’ sanctions on Iran. In \naddition, the increasing investment in shale oil production by the US remains a significant threat \nto future oil price increases. Even though OPEC / non-OPEC countries plan to extend oil \ncooperation agreement which will allow OPEC intervention in the market to address market \nuncertainties from January, 2019, the regime of much higher oil prices may not be feasible in the \nforeseeable period. This poses a notable threat to the Nigerian economy whose performance \ndepends delicately on robust prices in the global oil market. If the market for oil continues to \nshow weakness, Nigeria’s growth performance is at risk while the gains in external reserves \naccumulation, exchange rate and macroeconomic stability will be threatened. The policy \nimplication relates to the advice that has been given to the government time and time again: use \noil resources to diversify the economy and build fiscal buffers in periods of high oil prices. It is \nregrettable that state governments have continued to reject suggestions to save out of high oil \nearnings. They insist on all monies available being shared at Federation Account Allocation \nmeetings. \nMonetary policy stances in the advanced countries have important implications for international \ncapital flows. Nigeria has been experiencing the negative consequences of the current monetary \npolicy directions in the US and Europe. For example, the continued monetary policy \nnormalization, entailing hikes in the policy rate, has contributed significantly to capital flows \nreversal in Nigeria, and consequently bleeding the nation’s external reserves, weakening the \nstock market, and threatening exchange rate stability, among others. So far in 2018, the United \nStates has hiked its benchmark policy rate three times to the range of 2.0 – 2.25 percent. There \nis the likelihood of at least one more rate hike during the rest of the year. In the Euro area, \nmonetary accommodation has continued at a reduced rate while the European Central Bank \nplans to end its bond-buying programme and raise interest rates in 2019. These monetary actions \nof the advanced countries coupled with weak crude oil market prospects threaten the stability \n39 \n \n \nClassified as Confidential \nof the Nigerian economy. They suggest prudent management of available foreign exchange \nresources, effective diversification of the economy to increase non-oil export earnings, and \naggressive domestic revenue mobilization. \nBasis of Opinion on Monetary Policy Direction \n \nAgainst the backdrop of the above developments in the global economy, my opinion is informed \nby various specific developments in the Nigerian economy, especially since the last Monetary \nPolicy Committee Meeting. Although the economy has continued to face many risks / challenges \nto macroeconomic stability, there have been some positive developments. These and some of \nthe challenges inform my opinion on the direction of monetary policy in the next few months. \nDomestic output. This needs to be strengthened with the support of monetary policy. Although \npleasantly, the domestic economy had exited recession since \nthe second quarter of 2017, the growth achieved remains weak and fragile. From Q2 2017 to Q2 \n2018, the economic growth rate averaged 1.49 percent. In the second quarter of 2018, the GDP \ngrew by 1.5 percent compared to 1.95 percent in the first quarter, representing a decline of 0.45 \npercent. Although agriculture was one of the three major drivers of growth during the period, its \ncontribution to growth at 0.27 percent showed highly reduced significance in relation to previous \nquarters. The sector thus needs to be further stimulated beyond what the Central Bank of Nigeria \n(CBN) is currently doing. Overall, aggregate output has remained below its potential for quite \nsome time and the outlook for growth will remain fragile unless greater efforts go into stimulating \nthe production sectors with various forms of fiscal and monetary support. There is thus need to \nensure that more credit is directed to the real sector of the economy. Further monetary policy \ntightening will not advance this goal. But for the stagflation in the country which has made policy \nchoices difficult, the normal policy response to low growth and high unemployment would be \nmonetary accommodation. \nModerating rate of inflation. There is some good news on the inflation front. After two months \nof successive uptick in inflation, inflationary pressures eased in October. Year-on-year headline \ninflation reduced marginally from 11.28 percent in September to 11.26 percent in October. Year-\non-year and month-on-month headline inflation reflected declines. The prices of four items \n40 \n \n \nClassified as Confidential \nincluding Food and Non-alcoholic beverages declined while all the other items have their prices \nunchanged. Food inflation declined from 13.31 percent in September to 13.28 percent in October \nwhile imported food inflation declined from 15.66 to 15.57 percent during the same period. \nImported food inflation declined perhaps due to the relative stability of the exchange rate. \nHowever, core inflation inched up to 9.88 percent in October from 9.84 percent in September \ndue largely to increases in the prices of processed food, transport, communication, education, \namong others. \nFor some time now, inflation has largely been structurally driven rather than monetary. Hence, \nthe threats to inflation control in the short-term are poor transportation infrastructure, high cost \nof energy, especially diesel, recurring incidence of herdsmen/farmers’ clashes, and anticipated \nelection spending. Implementation of the new minimum wage may take some time while its \nimpact on inflation may not be substantial when implemented. A sustainable solution is required \nfor the herdsmen attacks on farmers and farmlands which have negatively impacted agricultural \noutput. \nMoney supply growth and banking system liquidity. Although the banking system witnessed a \nsurge in liquidity surfeit from September to October, 2018, due to fiscal injections from central \nrevenue sharing, Value Added Tax (VAT), sustained foreign exchange purchases by the Central Bank and \nmaturing Nigerian Treasury Bills and Open Market Operations (OMO) Bills, the effects of the injections \nwere moderated by the sale of CBN bills at the OMO auctions, provisioning for and settlement of foreign \nexchange purchases and auctioning of FGN Bonds as well as Nigerian Treasury Bills. Importantly, broad \nmoney and other money aggregates underperformed during the period; they remained below the \nbenchmarks. For example, the annualized growth of M1 is -0.49 percent compared to the 2018 benchmark \nof 7.3 percent. Similarly, M2’s annualized growth is 7.82 percent compared to the benchmark of 10.48 \npercent. Generally, as the Monetary Policy Department has observed, money supply remains weak to \ndrive growth momentum in the economy. Risky investment environment is one factor that undermines \nthe flow of credit to the real economy. Enhanced credit to the real sector, especially the small and medium \nenterprises, is thus imperative. \nEncouraging news from the financial system. Generally, there is improvement in most financial \nindicators due to the high oil prices, action of the National Assembly to ensure payment of \ngovernment debt, and effectiveness of CBN’s corrective measures including enforcement of \nprudential regulations since the last MPC meeting. Of note here are improvements in the capital \n41 \n \n \nClassified as Confidential \nadequacy ratio, reduction in number of banks that failed the minimum liquidity ratio test from \nfive a year ago to one as at October, 2018, reduction in the number of banks that recorded unaudited \nlosses to three between January and October 2018 from five in the corresponding period in 2017. The \nnon-performing loans (NPLs) ratio improved, albeit, marginally. Since it is still far above the prudential \nmaximum, special attention would need to be paid to loan recovery from the oil and gas sector which \naccounts for 30 percent of aggregate credit and about 45.0 percent of NPLs. Importantly, there is need to \nsustain implementation of the CBN’s corrective measures/actions that contributed to the improved \nfinancial soundness indicators. \nGovernment’s fiscal operations. The government’s fiscal operations have continued to impact \nliquidity management and make it difficult. The fiscal operations have resulted in widening fiscal \ndeficit and concurrently increasing debt level and debt service payments. From January to September, \n2018 a cumulative deficit of N2,491.21 billion was recorded arising from revenue underperformance and \nhigh cost of governance. The high debt level is influenced by an increase in deficit financing through bond \nissuing, and high interest rates that fuel the high cost of debt servicing. What seems to be obvious is that \nfiscal policy has been lagging in the effective performance of its roles, especially in the area of domestic \nrevenue mobilization, thus making the designing of monetary policy more difficult. It is thus important \nthat fiscal policy should play its complementary role. If the fiscal authorities intensify revenue mobilization \nas they are currently attempting to do, and effectively build fiscal buffers, then the Central Bank’s use of \nnon-conventional monetary policy tools would not be overburdened. \nPolicy rates in other climes. Across the globe, inflation picked up moderately in some countries \nas oil prices moved up over the last few months. In several emerging markets and developing \neconomies, inflation showed signs of moving in the upward direction. Yet, most of the countries \nmaintained the policy rate because of concerns relating to growth and employment. In the case \nof Nigeria, the need to strengthen growth and reduce unemployment should be factored into \nany decision on the monetary policy rate. Achieving robust and inclusive growth is crucial at this \npoint in time when various reports suggest a worsening of the incidence of poverty. Making \nmonetary policy tighter and, in particular, raising the policy rate will not help growth and \nemployment. It will increase the cost of borrowing both for firms and government, especially \nagainst the backdrop of widening government fiscal deficit, debt accumulation and rising debt \nservice. \nIn light of the foregoing, especially the observed downturn of inflation and its structural nature, \nthe behavior of policy rates in some other countries, underperformance of monetary aggregates, \n42 \n \n \nClassified as Confidential \nand need to strengthen output growth, I vote to maintain the monetary policy instruments at \ntheir current levels: MPR, 14.0%; CRR, 22.5% and Liquidity Ratio, 30.0%. \n43 \n \n \nClassified as Confidential \n9. \nSANUSI, ALIYU RAFINDADI \n \n1. Decision: \n \nMy decision to vote for a hold on all the policy parameters, today, was informed by the balance \nof risks to both inflation and output recovery occasioned by the increased uncertainties in the \nglobal and domestic economic environments. For instance, a number of global economic events \nhave significant consequences on the evolution of both domestic output, inflation and exchange \nrate stability in the medium term. These events include the commencement of the US economic \nsanctions on Iran; the economic consequences of the dynamics of the diplomatic relations \nbetween the US and Saudi Arabia; the normalization of monetary policy in the advanced \neconomies; the Chinese-US trade war; and the likely outcomes of the Brexit negotiations. \nDomestic economic developments, including the delays in the much expected fiscal injections, \nelection spending, implementation of the minimum wage increase, have implications on output \nand inflation in the near term. My analysis of the available data, staff forecasts and estimates \nsuggest that sustaining the decline in inflation and positive growth in output require a cautionary \napproach to policy. I, therefore, voted to maintain the current monetary policy stance, which is \ntight enough to support further disinflation, without hurting the positive output growth. \n \n2. Background and Justification \n \n2.1. Global Economic Developments \nThe global economy is shrouded in policy uncertainties with ambiguous consequences on \ndomestic inflation and output. The expected rise in oil prices may not crystalise because of the \nrelaxation of the US secondary sanctions on the buyers of Iranian oil, as well as the unfolding \nuncertainties around the BREXIT negotiations. These have important implications for Nigeria’s \noutput and price stability. \n \nDevelopments, following the commencement of the US sanctions on Iran, suggest that the oil \nprices may not rise, and the demand for Nigeria's oil may not increase as earlier anticipated. This \nis because of the partial suspension of the sanctions earlier imposed by the US on buyers of \nIranian oil such as India, China, Italy, and Japan. Investment in the US Shale gas has been \n44 \n \n \nClassified as Confidential \nincreasing, thereby raising US oil production from 10.9 million barrels per day in July 2018 to an \naverage of 11.475 million barrels per day in September 2018. Although OPEC and allied producers \nmay cut output, Saudi Arabia, which had earlier indicated its readiness to cover any shortfalls \narising from the US Sanctions on Iran, has been facing pressure from the US to sustain its supply \nlevels. Despite the uncertainty, indications from the crude oil futures market show that the \nmarket expects crude prices to fall in 2019. The futures price for crude deliveries in April 2019, \nwhich was quoted at US$ 75 per barrel on 3rd October, 2018, has dropped to US$ 53.82 per barrel \non 20th November, 2018. The likely consequences of these developments on the domestic \neconomy are also uncertain. Should the oil market slump, for instance, the possible adverse \neffect on foreign exchange earnings is lower reserve accretion and, if exchange rate stability is \nadversely affected, higher inflationary pressure. However, the adverse effects of the slump on \ngovernment oil revenue may affect the implementation of the ERGP, reduce the expected fiscal \ninjections and, therefore, through aggregate demand, have moderating effect on inflation and \noutput. Despite the agreement reached between the EU and UK’s Prime Minister for the \ncontinuation of Customs Union after the 29th March, 2019 when the UK finally leaves the EU, \nthere are political uncertainties because the House of Commons has to vote on the agreement in \nDecember 2018. There are also some uncertainties around the magnitude of effects of the \ncontinued policy normalisation in the US on the impending capital flow reversals. For instance, \nthe decline in US inflation from the peak of 2.9% in July, 2018 to 2.7% in August and further to \n2.3% in September has reduced the likelihood of the US Feds going ahead with its forward \nguidance of more rate hikes before the end of 2018. The possible halt to further Feds rate hikes, \ncoupled with the effects of uncertainties surrounding BREXIT may have moderating effects on \ncapital reversals from Emerging Market Economies. These uncertainties, in my opinion, call for a \ncautionary approach to policy. \n2.2. Domestic Economic Developments \n \nWhile available data indicate that headline inflation has declined in October 2018 and output \ngrowth has continued to be positive, domestic economic conditions and staff forecasts suggest \nthat there are threats of inflation in the medium term, while output recovery is weak. \n \n45 \n \n \nClassified as Confidential \nData suggest that the dis-inflationary process that started since January 2017 has resumed after \na two-month interruption in August and September 2018. Both the Year-on-Year and Month-on-\nMonth measures have moderated in October 2018. The Year-on-Year headline inflation has \ndeclined to 11.26 per cent in October 2018 from 11.28 percent in the previous month. The decline \nis due to the moderation in the prices of food & non-alcoholic beverages; Housing, Water, \nElectricity, Gas & Other fuels; and Transport. The Month-on-Month headline inflation declined \nfrom 0.84 percent in September 2018 to 0.74 percent in October 2018 due to the decline in Food \nInflation from 1.0 percent in September 2018 to 0.82 per cent in October 2018. Core Inflation, \nhowever, increased year-on-year from 9.84 per cent in September 2018 to 9.88 per cent in \nOctober 2018. \nDomestic output grew at a lower rate of 1.5 per cent in the second quarter of 2018 compared \nwith 1.95 per cent growth in the first quarter. The increase was driven by the activities in the non-\noil sector, which grew by 2.05 per cent. The oil sector contracted by 3.95 per cent during the \nquarter. The Industrial Production Index (IPI) rose by 0.6 per cent in Q3 2018 relative to the \npreceding quarter. Manufacturing activities also marginally increased in the third quarter of 2018 \nby 0.1 per cent relative to the preceding quarter. There are also indications of marginal \nimprovement (of 0.2%) in manufacturing capacity utilization during the third quarter. The \nPurchasing Managers Index (PMI) indicates expansion of manufacturing and non-manufacturing \nactivities in the month of October 2018, supported by stability in the foreign exchange market. \nAlthough the outlook for output recovery is fragile, staff estimates suggest that given the \nnegative output gap, the anticipated fiscal injections, election-related spending and the \nimplementation of the agreed minimum wage are expected to boost effective demand further. \nMonetary aggregate, measured by M2, grew at an annualized rate of 7.82 per cent in October \n2018, which was below its programmed target of 10.48 per cent. Credit flows to the private sector \nremained weak but were marginally higher in September 2018 at an annualized growth rate of \n2.33 per cent compared with the 1.12 per cent achieved in August 2018. Naira continues to \nremain stable in the foreign exchange market, trading at an average rate of US$360.25 at the BDC \nsegment, and US$ 363.93 at the Investors & Exporters’ window. This stability was achieved \nthrough the various policies of CBN, including the implementation of the Bilateral Currency Swap \n46 \n \n \nClassified as Confidential \nAgreement with China. The banking sector remained stable, with the marginally improved NPL \nratio expected to further improve. \n3. The basis for My Policy Choice \n \nThe basis for my vote to maintain the status quo in today’s meeting is the uncertainty in the \ndirection of the possible effects of the global and domestic economic developments on the \nevolution of inflation and output, and exchange rate stability. With fragile output recovery, \ntherefore, further tightening would raise the cost of credit and reduce investment thereby \nfurther weakening the recovery process. Loosening the policy stance would reverse the gains \nachieved in price and endanger exchange rate stability. Loosening may not lead to lower lending \nrate. I, therefore, choose to retain the current policy stance, under which most of the price and \noutput gains were achieved. \nConsequently, I voted to: \n \n• Retain the MPR at 14.00 per cent; \n• Retain the CRR at 22.5 per cent; \n• Retain the asymmetric corridor at +200/–500 basis points; and \n• Retain liquidity ratio at 30.0 per cent. \n47 \n \n \nClassified as Confidential \n10. \nSHONUBI, FOLASHODUN A. \nGlobal Economic Developments \nDespite the steadiness in the expansion of the global economy in the last two years, downside \nrisks have heightened over the last two quarters. The October 2018 edition of the World \nEconomic Outlook projected growth at 3.7 per cent in 2018, from 3.9 per cent in April, on account \nof the potential effects of disputes in trade relationships among some of the world major \neconomies, tighter global financial conditions and other country-specific factors. Recent rapid fall \nin the international crude oil price, due to lesser than expected scope and toughness of the \nsanctions on Iran, again exposed the vulnerability of oil-dependent economies. These \ndevelopments portends pertinent implications for monetary policy in emerging and developing \neconomies, including Nigeria. \nTrends in Domestic Output and Inflation \nSubsisting data from the National Bureau of Statistics (NBS) indicate that growth in national \noutput, at 1.5 per cent in 2018Q2 was below the projected level. Though the non-oil sector was \nthe major driver, lower than expected growth in targeted sectors of agriculture, manufacturing \nand solid minerals is a major concern for policy. The October 2018 composite Purchasing \nManagers’ Index (PMI) for manufacturing and non-manufacturing sectors showed some \ngeneral expansion, however, contraction in critical enabler sub-sectors of electricity, \ntransportation and warehousing may limit future growth. Overall, growth remained weak and \nfragile, highlighting the need for further growth enhancing measures. \nAgainst the uptick in inflation in the last two months, latest data from the NBS showed waning \ninflationary pressure, as headline inflation fell, both on month- on-month and year-on-year \nbases, to 11.26 per cent in October. This further underscores the continued efficacy of the suit \nof measures by the Bank, including retaining a generally non-expansionary monetary policy \nstance and \n48 \n \n \nClassified as Confidential \ndeployment of other complementing tools, like open market operations to ensure optimal \nliquidity, as well as, the use of unconventional monetary policy measures. \nMonetary and Credit Developments \nDespite the generally non-expansionary stance of monetary policy, broad money supply (M2) \ngrew by 6.52 per cent at end-October 2018, annualised to \n7.82 per cent, below the 10.48 per cent benchmark growth for fiscal 2018. The growth in \nmonetary aggregates did not, however, translate to the domestic economy, as credit to the \nprivate sector grew marginally by 1.94 per cent, annualised to 2.33 per cent, below the \nbenchmark growth of 12.40 per cent. Net Foreign Assets (NFA), grew significantly by 20.71 per \ncent, annualised to 24.85 per cent, above the 2018 target growth of 14.50 per cent. \nOn the average, money market rates in October 2018 were above the levels in September 2018 \nand remained around the monetary policy rate, reflecting the liquidity condition and risk \nperceptions in the market. Though the maximum and prime lending rates fell in October 2018, \nthey remained high. The consolidated demand, savings and term deposit rates also fell, relative \nto their levels in September 2018. The spread between maximum lending and average deposit \nrates, however, widened, signifying high borrowing cost for economic agents, while low savings \nrate constitute a disincentive to savings. \n \nFinancial System Stability Concerns \nThe key prudential ratios in the banking sector showed improvement in the health and soundness \nof the institutions, as well as, the overall banking industry. Banks’ capital and liquidity \nratios remained above the regulatory minimum, reflecting mainly the positive impact \nof some of the measures implemented by the Bank. Asset quality also improved, as the non-\nperforming loans (NPLS) ratio fell below the level in September 2018, though it remained above \nthe regulatory maximum. Sustained surveillance and intensified prudential monitoring, including \ndecisive regulatory actions will further strengthen the resilience of the industry. \nExternal Sector Vulnerabilities \n49 \n \n \nClassified as Confidential \nOverall balance of payment surplus in the second quarter of 2018, supported by increased non-\noil export earnings, portends positivity in the external sector. Despite the slight depreciation at \nthe Investors’ and Exporters’ window, due to demand pressure, the average exchange rate \nappreciated at the BDC segment of the foreign exchange market, with the relative stability \nholding in the market, as rates convergence intensifies. Initial worry about gradual outflow of \nforeign capital is waning, as developed economies are expected to reduce the speed of \nnormalisation to address recent slowdown in their economies. Besides, inflow from the recent \nsixth Eurobond offering by Nigeria is expected to further enhance foreign exchange reserves and \nimprove external sector viability. \n \nOverall Considerations and Decision \nThough, high possibility of market correction of the recent fall in oil prices in the very near term \ndampens the need for urgent actions, the trend re-emphasises the imperative for aggressive \nbuild-up of fiscal buffers to easily accommodate the effects of any sudden and significant decline \nin the international crude oil price. \nOn financial system stability, strong prospects of fiscal measures to facilitate settlement of \noutstanding contractual obligations and debts to businesses, especially in the oil and gas sector \nis expected to further improve the banking system conditions. Also, build-up in the positive \noutcome of the various unconventional monetary policy measures by the Bank in the real sector \nwill improve businesses and enhance their capacity to defray obligations to the banking system. \nMore importantly, considering the drag on credit flow and waning willingness of banks to offer \ncredit, measures to drastically reduce bad assets in banks will enhance their health, strengthen \nresilience of the industry and promote intermediation. \nThe recent decline in inflation and possibility of further decline in food prices as harvest \nintensifies, aided by the aggressive intervention programmes of the Bank in the agricultural \nsector has reduced the likelihood of increased inflationary pressure in the very near-term. \nMoreover, supported by anecdotal indication of historically weak relationship between wage \nincrease and inflation in Nigeria, the proposed increase in the national minimum wage is \n50 \n \n \nClassified as Confidential \nexpected to have muted impact on inflation, owing to the prolonged weak aggregate demand \nand negative output gap. Thus, while the receding inflationary pressure provides the Bank with \nsome respite on price stability, the weak and fragile growth underscores the urgent need for the \nintensification of growth enhancing measures. \nGiven the aforementioned, I believe that while the Central Bank cannot lose sight of the primary \nmandate to achieve price stability, it must keep maintaining the delicate balance of ensuring low \nand stable inflation conducive to growth. Evidently, the present monetary policy regime has \nproduced generally positive outcomes, in terms of waning pressure on domestic prices and \nsustained exchange rate stability, while engendering investor confidence and steady net inflow \nof foreign investments. It is, therefore, imperative that maintaining this regime will allow more \ntime for the effects and benefits to fully mature into greater economic prosperity. \nIn this regard, I recommend that the Bank intensifies implementation of its ongoing intervention \nprogrammes and new initiatives in the real sector to sustain the impact of the positive outcomes \non the macroeconomy. I also propose a more aggressive implementation of the differentiated \nCRR scheme, through improved turn-around-time for application processing and increased \nadvocacy. \nI therefore vote to retain: \n• MPR at 14.0 per cent; \n• The asymmetric corridor of +200/-500 basis points around the MPR \n• Cash Reserve Ratio (CRR) at 22.5 per cent; and \n• Liquidity Ratio at 30.0 per cent. \n51 \n \n \nClassified as Confidential \n11. \nEMEFIELE, GODWIN I. \nGOVERNOR OF THE CENTRAL BANK OF NIGERIA AND CHAIRMAN, MONETARY POLICY \nCOMMITTEE \nShort-term growth outlook of the Nigerian economy, though positive, indicates diminished \nmomentum amidst rising downside risks, persistent vulnerabilities, and depressed demand. Yet, \ninflationary pressures are projected to slowly levitate within the short-term as the country \nenters into an election year. Concerns around rising yields and protectionism in some advanced \neconomies have combined to cause disruptive portfolio adjustments. Thus, growth prospects in \nmany emerging markets economies have weakened with heightened fragilities, imbalances and \nvulnerabilities in their financial markets. This is pushing global interest rates upward and \n(alongside rising trade tensions) is debilitating global demand. \n \nGlobal growth projection for both 2018 and 2019 have, therefore, been marked down by 0.2 \npercentage point to the 2017 level of 3.7 percent; and is expected to remain uneven across \ncountries. While the pace of the US economy remains strong, growth in the Euro area, the UK \nand Japan are projected to decelerate. Among emerging markets, China is expected to further \nslowdown just as growth prospects for Brazil, Argentina, and Turkey declined. Though recoveries \nare ongoing, short-term growth outlook in sub-Saharan Africa remain generally subdued. Global \ninflation is projected to rise both in advance economies and in emerging markets and developing \neconomies thus reinforcing the prospects of further tightening of global monetary conditions. \nFor the domestic economy, short-term outlook remains positive but significantly fragile due to \nweak effective demand. Compared to the pre-recession average of about 6.0 percent, 2018 \ngrowth is projected at nearly 1.8 percent. The subdued but positive outlook is underlain by oil \nprice trends, continued stability in the foreign exchange market, sustained non-conventional \n52 \n \n \nClassified as Confidential \ndevelopment financing by the CBN, expected implementation of the 2018 capital budget, as well \nas the likely aggregate demand boost from elections related spending. \n \nThere is also a foreseeable knock-on effect on domestic prices, with short-term outlook \nsuggesting a slight build-up of inflationary pressure by mid-2019. Regardless, year-on-year \noutcome for October 2018 headline inflation showed a marginal decline of 0.02 percentage \npoint to 11.26 percent relative to the preceding month. The observed decline largely reflected \nthe 0.03 percentage point decline in food inflation to 13.28 percent even as core inflation rose \nby 0.1 percentage point to 9.9 percent. This pattern was also discerned in month-over- month \nestimates as core inflation ascended slightly while other definitions fell, thus indicating \nsubstantial seasonal undercurrents. \n \nAnalyses of liquidity conditions in October 2018 showed an annualised contraction of 0.5 \npercent in M1 along with a subpar expansion of 7.8 percent (annualised) in M2. Breakdown of \nnet domestic credit indicate an annualised expansion of 8.9 percent in government credits vis-\nà-vis 2.3 percent growth in private sector credit (PSC). I note that whilst the expansion in PSC is \nwelcomed, it remained significantly below the 2018 target of 5.6 percent. Reflecting the risk \naversion of banks in the face of high NPLs, the underperformance of PSC continues to undermine \ndomestic investment, household demand, and aggregate productivity. Consequently, I reiterate \nthe need to innovatively de- risk PSC in order to brighten its risk perception, strengthen financial \nsystem soundness, accelerate economic diversification, and ensure strong and inclusive growth. \n \nIn my consideration, I note the continued stability at the foreign exchange market and \ndiscernible convergence of rates at the BDC and I&E segments during the review period. I note \nalso that the prevailing macroeconomic stability and short-term prospects remain cautious due \nto multifaceted global and domestic risks. On the global scene, the rising yields in the US and \nthe concomitant capital flow reversals threaten our FX reserves, exchange rate, and inflation. \nThis is further exacerbated by the anticipated fiscal and political spending over the next few \nmonths and its prospective impact on inflations expectations. While the cyclical recovery of \n53 \n \n \nClassified as Confidential \nNigerian economy is still fragile, it is important that inflation expectations are adequately \nanchored. As oil prices begin to soften, the expected cushion from oil receipts for FX reserves \nand exchange rate looks to be weakening. It is critically important to ensure that we protect the \neconomy from oil related volatilities. At this time, given the rising inflation expectations and \nlikely exchange market pressures, the postulated policy response is to tighten our stance further \nso as to stabilise domestic prices. The dilemma arises from the trade-off between inflation and \noutput. A rate hike could impinge on the already weak domestic demand and further enfeeble \nour recovery. Short-term outlook indicate tepid growth forecasts in the next few quarters and \nunderscores the need to urgently stimulate demand and domestic productivity, and grow the \neconomy. Nonetheless, loosening is not an option as it would undermine price stability and \npotentially disrupt foreign exchange markets. As I have always mentioned, I am generally \ninclined towards a cautious, practical, and well-balanced decision that promotes price stability, \nwhile being mindful of output and unemployment considerations. \n \nI continue to recognize and emphasize the need to strengthen aggregate demand and bolster \ndomestic factor productivity. In-house analysis shows that our potential output is depressed, \npulling long-term aggregate demand with it. In the face of underperforming private sector credit \nby DMBs, I maintain my determination for forceful financial stimulus for high-impact and \nproductive real sector activities especially in agriculture, manufacturing, and MSMEs. The \nrecently announced programme of a strategic release of portions of banks’ CRR for real sector \nlending is a step in the right direction. This will stimulate productivity in qualifying high-impact \nsectors while helping to diversify economic growth. I am of the opinion that the aggregate supply \nboost from this policy would considerably moderate inflation trajectory. Since the key mandate \nof the CBN remains price, monetary and exchange rate stability, I am committed to driving \ninflation to single-digit levels and building sufficient reserves buffers to defend the naira. \n \nI recognize that the relative stability enjoyed by the Nigerian economy reflects the combined \nand individual potency of our past policy decisions. Overall, I am of the view that the current \nlevels of key policy parameters are sufficiently tight. An adjustment at this time could \n54 \n \n \nClassified as Confidential \nsignificantly disrupt on-going permeation of past decisions. The current level of real policy rate \nremains appropriate to balance the objectives of exchange rate stability, price stability and \noutput stabilization without introducing disruptive policy shocks. Therefore, I vote to: \n \n• Retain the MPR at 14.0 percent; \n• Retain the CRR at 22.5 percent; \n• Retain the asymmetric corridor at +200/–500 basis points; and \n• Retain liquidity ratio at 30.0 percent. \n \n \nGODWIN I. EMEFIELE, CON \nGovernor \nNovember 2018", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No 121 of the Monetary Policy Committee Meeting of Wednesday 21st and Thursday 22nd November, 2018, with Personal Statements of Members.pdf"}
{"doc_id": "d962888a01c2fc40b35237aba0cb60df", "text": "1 \n \nCentral Bank of Nigeria Communiqué No. 72 of the Monetary Policy Committee \nMeeting, September 21, 2010 \n \nThe Monetary Policy Committee (MPC) met on 21st September, 2010 to review \ndomestic economic conditions during the first eight months of 2010 and the \nchallenges \nfacing \nthe \nNigerian \neconomy \nagainst \nthe \nbackdrop \nof \ndevelopments in the international economic and financial environments in \norder to reassess the options for monetary policy for the rest of the year. \n \nOn the global scene, the Committee noted that there had been a marked \nsoftening of the global economic recovery, with developments in the US and \nChina giving cause for concern. While the US economy declined in the third \nquarter, reflecting the renewed deterioration in the housing market and the \nlackluster labor market performance with private sector job creation still weak, \nChina’s massive official stimulus packages, estimated at 14 per cent of GDP and \nfocused on infrastructure and housing, did not only boost aggregate demand \nbut also fed into a property bubble which the government is battling to contain. \nAs a result, growth in China, which overtook that of Japan in the second quarter \nof 2010 to making the former, the world’s second-largest economy, is now \ndeclining. \nIn the Euro Zone, a degree of calmness had returned to the debt market \nfollowing the approval of a €750 billion (US$925 billon) European Financial \nStability Facility (EFSF). However, fresh concerns have emerged regarding the \nhigh risk aversion in the market, as reflected in the widening of spreads between \nGerman bonds and those of weaker peripheral countries, such as Greece, \nIreland and Portugal. In addition, many of the region’s banks remained fragile \nand vulnerable to funding constraints due to their dependence on the \n2 \n \nwholesale markets. However, Greece whose fiscal problems ignited the Euro-\nzone crisis continues to make better than expected progress in fiscal reforms. \nNotwithstanding the recent weakening of growth globally, the possibility of a \ndouble-dip recession is not very likely. The softening of growth could be seen as \na natural adjustment from a period of unsustainably rapid stimulus-driven activity \nfrom mid-2009, to a slowing phase of consolidation. \n \nOn the domestic front, the MPC noted the relative stability achieved in the \nfinancial markets, while urging greater efforts in accelerating reforms in the other \nsectors of the economy, to attain self-sustaining growth. The MPC welcomed the \ncontinuing rebound in commodity prices which is helping to support growth in \ncommodity producing regions, including Nigeria, but reiterated the need to \ndiversify the economy to protect the country from the vagaries of oil price \nvolatility. The Committee believes that the inflation risk of the rebound in energy \nprices appears mitigated by the continuing weak private demand, good \nharvest, and well-anchored inflation expectations. \n \nKey Domestic Macroeconomic and Financial Developments \n \nOutput and Prices: \n \nThe Committee observed that the impressive output growth recorded in 2009 \ncontinued in 2010. Provisional data from the National Bureau of Statistics (NBS) \nindicates that real Gross Domestic Product (GDP) grew by 7.69 per cent in the \nsecond quarter of 2010 up from 7.36 per cent recorded in the first quarter. GDP \nhas been projected to grow by 7.72 and 8.19 per cent in the third and fourth \nquarters of 2010, respectively. Overall GDP growth for 2010 is projected at 7.78 \n3 \n \nper cent which is higher than the 6.96 per cent recorded in 2009. The non-oil \nsector is expected to remain the main driver of overall growth, with agriculture, \nwholesale and retail trade, and services contributing 2.40, 2.04 and 2.08 per \ncent, respectively. \n \nThe Committee believes that the impressive growth forecasts reflect prospects \nfor continuing favourable rainfall in the remaining months of the rainy season to \nsupport the production of major crops across the country, coupled with the \ncurrent peace in the Niger-Delta, which has boosted crude oil and natural gas \nproduction. Crude oil prices are expected to remain fairly stable at their current \nlevels in the international market following the slow but steady economic \nrecovery being recorded in most advanced economies. The MPC, however, \ncautioned that the projected slowdown in economic activity in some major \nadvanced economies, including the US and emerging Asia poses a clear threat \nto the economies of commodity-producing countries like Nigeria. While urging \ngreater efforts at diversifying the economy, the Committee stressed the need for \npolicy reforms to address the binding growth constraints on the domestic \neconomy, especially, infrastructural inadequacy. \n \nThe MPC welcomes the recent revision and rebasing of the Consumer Price \nIndex (CPI) by the National Bureau of Statistics (NBS) to reflect the current \nstructure of consumption in the economy. Based on the revised and rebased \nCPI, the year-on-year headline inflation rose to 13.7 per cent in August 2010 \nfrom 13.0 per cent in July 2010. Similarly, core inflation increased to 12.4 per cent \nin August from 11.3 per cent in July 2010. Food inflation also trended upward to \n15.1 per cent from 14.0 per cent in July 2010. The upward trend in the domestic \nprice level could be attributed to the late commencement of rains in some food \nproducing regions in the northern part of the country, which may have affected \n4 \n \nthe production/supply of some staple food items, while some non-food \ncomponents of the new CPI basket also recorded price increases. \n \nThe MPC reiterated its earlier position on the threat of inflationary pressure arising \nfrom several other factors including implementation of the new salary structure \nin the civil service, expected fiscal injections arising from electioneering \nexpenses and the injections relating to AMCON purchase of non-performing \nloans of DMBs, spillover effects of the rising food prices from famine in \nneighboring Niger Republic and floods in Asia, deregulation of energy prices as \nwell as the expected increase in household-spending toward year-end \nfestivities. The Committee supports the deregulation policy of the Federal \nGovernment but would, continue to monitor price developments with a view to \ntaking appropriate policy measures to stem any inflationary threat and ensure \nthat the upside risk of inflation to growth is minimized. \n \nMonetary, Credit and Financial Market Developments: \nProvisional data showed that relative to end-December 2009, broad money \n(M2) grew by 7.0 per cent in August 2010, which, when annualized represented \na growth of 10.50 per cent. Reserve money (RM), which stood at N1,653.86 \nbillion at end-December 2009, fluctuated downward and by September 13, \n2010, stood at N1,407.51 billion. \n \nAvailable data showed that in August 2010, aggregate domestic credit (net) \ngrew by 18.0 per cent over the December 2009 level, and by 27.0 per cent \nwhen annualized. Credit to government (net), which grew substantially by 65.81 \nper cent over end-December 2009 (or 98.72 per cent on annualized basis), was \nthe major contributor. Credit to the private sector, on the other hand, declined \nby 0.91 per cent (or 1.37 per cent on an annualized basis). The Committee \nbelieves that in order to provide the private sector with the necessary credit to \n5 \n \ngrow the economy, further efforts were needed to restore confidence to the \ncredit market and to unlock the flow of credit to the real economy. In general \nmonetary aggregates are growing but remain below indicative benchmarks for \nthe year. \n \nThe rates at the interbank segment of the money market remained stable and \nlow, owing to the prevailing banking system liquidity and the de-risking of the \nmarket through the CBN guarantee of the interbank transactions. Consequently, \nin August 2010, the average inter-bank call and open-buy-back (OBB) rates fell \nsignificantly to 1.26 and 1.25 per cent, respectively, representing decreases of \n233 and 195 basis points from the 3.59 and 3.20 per cent recorded in the \npreceding month. In line with the decrease in rates at the inter-bank call and \nOBB segments, the 7- and 30- day NIBOR rates decreased by 62 and 196 basis \npoints to 3.85 and 4.55 per cent, respectively, from 4.47 and 6.51 per cent in July. \nAs at September, 17, 2010, inter-bank call and OBB rates increased averaging \n3.56 and 2.91 per cent, respectively. \n \nDevelopments in retail market interest rates indicated that the retail lending \nrates were still relatively high. The average maximum lending rate rose to 22.31 \nper cent in August 2010 from 22.27 per cent in July. However, the average prime \nlending rate declined to 16.89 per cent in August 2010, from 17.40 per cent in \nJuly. \n \nThe weighted average savings rate dropped to 1.41 per cent in August 2010 \nfrom 1.62 per cent in July. The consolidated deposit rates declined to 2.27 per \ncent in August 2010 from 2.40 per cent in July. Thus, the spread between the \naverage maximum lending rate and the consolidated deposit rate rose \nmarginally to 20.04 per cent in August 2010 from 19.87 per cent in July. \n \n6 \n \nThe Committee noted that the key policy challenges remained the continuing \nsub-optimal growth in money supply coupled with the negative growth in \nprivate sector credit as well as the subsisting high retail lending rates in the face \nof substantially low wholesale inter-bank and retail deposit rates. \n \nThe Nigerian capital market, which was showing signs of recovery, recently \nturned bearish. The All-Share Index (ASI) decreased from 25,384.14 at end-June \n2010 to 22,993.77 as at 17th September, 2010, or by 9.4 per cent. Market \ncapitalization (MC) - equities only, decreased by 8.7 per cent from N6.17 trillion \nto N5.63 trillion over the same period. The number of deals, volume and value of \nshares traded decreased by 4.6, 14.8 and 6.1 per cent, respectively. The \ndecrease in ASI and MC was principally due to the share price decreases in the \nBanking, Food & Beverage, insurance and Oil/Gas sectors. The Committee \nbelieves that an early resolution of the leadership impasse at the NSE and \neffective take-off of the Asset Management Corporation (AMCON) would \nfacilitate the return of the stock market to the path of recovery. \n \nExternal Sector Developments: \nThe foreign exchange market remained relatively stable over the review period. \nThe total foreign exchange inflow in July 2010 was US$2.25 billion, representing \nan increase of US$0.19 billion or 9.22 per cent over the US$2.06 billion recorded in \nthe preceding month. Of this inflow, crude oil/gas revenue was US$2.16 billion or \n93.97 per cent while other inflows represented the balance of US$0.09 billion or \n6.03 per cent. \nTotal outflows or payment in July 2010 amounted to US$4.03 billion, representing \nan increase of US$0.15 billion or 3.78 per cent above the US$3.88 billion recorded \nin the preceding month. Consequently, the net outflow during the review period \nwas US$1.78 billion. \n7 \n \nInflows from autonomous sources for the months of July and August 2010 were \nUS$5.3 billion and US$4.7 billion, respectively. Over the period January to August \n2010, total foreign exchange inflows to the market amounted to US$ 52.00 billion \ncomprising funds from the CBN amounting to US$14.09 billion or 27.1 percent, \nwhile the balance of US$37.91 billion (or 72.91 percent) came from autonomous \nforeign exchange sources such as oil companies, international institutions and \nhome remittances. The Committee noted with satisfaction that the autonomous \ninflows had helped in moderating demand pressure for foreign exchange in the \nWDAS segment of the foreign exchange market. Thus, the autonomous inflows \ncontinue to augment the official inflow to ensure steady supply of foreign \nexchange to the market. \n \nIn August 2010, the WDAS rate opened at N150.01/US$1 (inclusive of 1% \ncommission) and closed at N150.78/US$1, at an average exchange rate of \nN150.27/US$1 for the month. This represented a depreciation of 17 kobo (0.11 \nper cent) when compared with the average closing rate of N150.10/US$1 \nrecorded in July 2010. As at 17th September, 2010 the exchange rate \ndepreciated by 18k to N150.96/US$1 (plus 1% commission) from N150.78/US$1 \nrecorded on August 31, 2010. \n \nThe BDC segment of the market recorded average selling rates of N152.23/US$1 \nand N152.41/US$1 in the months of August and July 2010 respectively, \nrepresenting an appreciation of 0.11 per cent. At the inter-bank market, the \naverage selling rates for August and July 2010 were N150.70/US$ and \nN150.27/US$ respectively, and represented a 0.3 per cent depreciation. As at \nSeptember 17, 2010 the interbank and BDC rates were N152.05/US$1 and \nN153.50/US$1 respectively. The WDAS, interbank and BDC segments of the \nforeign exchange market witnessed mild naira exchange rate depreciation. \n8 \n \nThus, the stability of the naira exchange rate attained in the foreign exchange \nmarket since the first half of 2009 continued into the third quarter of 2010. \n \nThe Committee observed that the naira exchange rate had remained stable in \nall segments of the market during the review period, reflecting increased \nconfidence and the efficacy of the current exchange rate policy stance. The \nMPC believes that the relative stability in the foreign exchange market was likely \nto be sustained in the near term. The Committee would continue to monitor \ndevelopments in the market to ensure that measures are taken to eliminate \nspeculative demand and exchange rate volatility. \n \nThe gross external reserves stood at US$36.636 billion on 13th September, 2010 \nand represented a decrease of US$0.50 billion or 1.3 per cent when compared \nwith the level of US$37.16 billion as at end-July 2010. The Committee, however, \nnoted that the current external reserves level is still adequate and is expected to \nremain robust in view of the favorable outlook for oil price and output. \nConsequently, there is no compelling reason to alter the existing exchange rate \nregime stability will remain a priority. \n \nThe Committee’s Considerations \nThe Committee, after a review of the domestic and international financial and \neconomic developments, noted with satisfaction the sustained macroeconomic \nstability and welcomed the explicit commitment of the federal government to \nresume implementation of power sector reforms in line with the committee’s \nrecommendations at prior meeting. The Committee, however, sounded a note \nof caution on the possibility of inflationary build up arising from several other \nsources as has been highlighted earlier. \n \n9 \n \nThe Committee noted that the resumption of growth in M2 is a welcome \ndevelopment, as it has reversed the stagnation recorded from January through \nJune 2010. The Committee also observed the gradual restoration of financial \nstability and anticipated repair of banks’ balance sheets when the Asset \nManagement Corporation of Nigeria becomes operational. In view of the \nforegoing the MPC underscored the importance of balancing the inflation risk \nwith financial sector stability objective. \n \nThe MPC observed that the large demand for foreign exchange noticed during \nthe review period resulted from among others, remittance of dividends by some \ncompanies and enhanced importation of refined petroleum products due to \nthe Federal Government sovereign debt instruments. Thus there was no \nevidence of speculative demand or capital flight observed in the foreign \nexchange market. \n \nThe Committee noted the federal government’s efforts to raise funds from the \ndomestic capital market to execute vital infrastructural projects and urged for \ncontinuous coordination of monetary and fiscal policy as well as underscored \nthe need for fiscal consolidation so as to ensure macroeconomic stability. The \nCommittee commended the commitment of the Federal Ministry of \nFinance/Securities and Exchange Commission to the reforms in the capital \nmarket and efforts to get the oil/gas and telecommunication companies listed \non the Exchange. The MPC further observed that the declining share of the \nbanking sector in market capitalization is a positive development, which is good \nfor rebalancing the market to reduce the overwhelming influence of the \nbanking sub-sector. \n \nThe MPC commended the government for resuming the power sector reforms \nand its decision to fast track them, which it believes will impact positively on the \n10 \n \ncost structure of the economy. Furthermore, the MPC commended and \nendorsed the CBN discussion with PENCOM aimed at realizing part of the \naccumulated pension funds to finance power sector projects on a long term \nbasis. It noted that this initiative will assist in shielding the power sector funding \nfrom the vagaries of the volatility of the international capital market, and \nexchange and interest rate risks. \n \nConclusion \nHaving considered the above factors, the Committee considered it imperative \nto commence policy actions aimed at moderating the inflationary pressures in \nthe economy, particularly given the outlook for government spending in an \nelection year and the liquidity implications of the purchase of non-performing \nloans (NPLs) by AMCON. The Committee is satisfied that sufficient progress has \nbeen made in banking sector reforms to mitigate the risk of moderate tightening \nin financial institutions. \nDecisions \nIn the light of the above, the MPC took the following decisions: \n1. The Resumption of active Open Market Operations for the purpose of \ntargeted liquidity management; \n2. An increase in MPR by 25 basis points from 6.0 to 6.25 per cent ; and \n3. Adjustment of asymmetric corridor to 200 basis points above and 300 basis \npoints below the MPR for the Standing Lending Facility and Standing \nDeposit, respectively. This effectively increases interest payable on \nstanding deposits with the CBN by 225 basis points forthwith. \nSanusi Lamido Sanusi \nGovernor, \nCentral Bank of Nigeria \nAbuja \nSeptember 21, 2010", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Communique for September 21 MPC Meeting.pdf"}
{"doc_id": "fcd7263433597a953d81831962995b53", "text": "1 \n \n \n \n \n \nCentral Bank of Nigeria Communique No 107 of the Monetary Policy \nCommittee Meeting of Monday and Tuesday 23rd and 24th May 2016 \nThe Monetary Policy Committee met on 23rd and 24th May 2016 against a \nbackdrop of challenging global and domestic economic and financial \nconditions. \nThe \nCommittee \nassessed \nthe \nglobal \nand \ndomestic \nmacroeconomic and financial developments, the short-to medium-term \nprospects for the domestic economy and the outlook for the rest of the \nyear. In attendance were 9 out of the 12 members. \nInternational Economic Developments \nThe Committee noted with concern, the tapered growth and continued \ndecline in global output since 2014. At an estimated 3.2 per cent, global \noutput in 2016 was only 0.1 percentage point below the 3.1 per cent in the \ncorresponding period of 2015. The sluggish global output was traced to \nweak fundamentals in both the advanced economies and Emerging \nMarkets and Developing Economies (EMDEs), including increased volatility \nin global financial markets, sustained softness in commodity prices, \nsluggish global trade, resulting in persistent fragility, particularly in the \nEMDEs. \n \nThe United States (US) economy slowed to 0.5 per cent in Q1 2016, a \nsteep decline compared with the 1.4 per cent growth recorded in the last \n \n2 \n \nquarter of 2015. The deceleration in US growth was attributed to \ncontraction in non-residential fixed investment and energy businesses, a \nstrong dollar which harmed exports, slowdown in government spending and \nmoderation in private consumption expenditure (PCE). Japan which is \ncurrently in deflation is projected to grow by 0.5 per cent in 2016, the same \nas in 2015, on the back of persistently weak aggregate demand. The Bank \nof Japan’s (BoJ) monthly asset purchase of ¥6.7 trillion (US$61.73 billion) \nresulted in the Bank holding about one-third of outstanding government \nbonds, while the economy remained largely intractable with a credit crunch, \nindicating that the programmme may have lost its steam. In response to the \ncontraction in credit, BoJ since January 2016, adopted a negative interest \nrate policy. \n \nReal GDP growth in the Euro area at 0.6 per cent in Q1, 2016 was a \nphenomenal improvement compared with the 0.3 per cent achieved in Q4 \n2015. The European Central Bank (ECB), at its meeting of 21st April, 2016 \nmaintained the soft policy stance by holding its refinancing rate at 0.0 per \ncent, lending rate at 0.25 per cent and deposit rate at -0.4 per cent. The \nBank also maintained its monthly asset purchase program of €80 billion \n(US$87.2 billion), hoping to further stimulate output growth and achieve its \n2 per cent inflation target. \n \nThe Bank of England (BoE) also retained its monthly assets purchase \nprogramme, financed through the issuance of reserves at ₤375 billion \n(US$543.75 billion). At the end of its April 13, 2016 meeting, BoE retained \n \n3 \n \nits policy rate at 0.5 per cent, with a commitment to raise inflation to its 2.0 \nper cent long run path. \n \nWeaknesses in major EMDEs, including low capital inflows, rising costs of \nfunds and continuing geopolitical factors, have been identified as key \nconstraints to growth. Adverse commodity prices continued to provide \nstrong headwinds against growth, defining other economic and financial \nconditions in the EMDEs. Consequently, the IMF (WEO April 2016 Update) \ndowngraded the 2016 growth forecast for this group of countries from 4.3 to \n4.1 per cent. \n \nDisruptions to oil supply in Canada, Nigeria and Kuwait and, demand \nspikes following expectations of a US interest rate hike and buildup of \ncrude oil inventories, contributed to mild oil price recovery in April 2016. \nInflation remains largely suppressed in the advanced countries but tepid \nconsumption spending and vulnerabilities in the financial markets continue \nto hamper financial intermediation and growth. Consequently, the monetary \npolicy \nstance \nin \nmost \nadvanced \neconomies \nremained \nlargely \naccommodative and most likely to be maintained throughout 2016. On the \ncontrary, monetary policy in the EMDEs could continue to diverge \nsubstantially, reflecting the diversity of shocks confronting them. \n \n \n \n \n \n \n4 \n \nDomestic Economic and Financial Developments \nOutput \nIn the first quarter of 2016, the economy suffered from severe shocks \nrelated to energy shortages and price hikes, scarcity of foreign exchange \nand depressed consumer demand, among others. Consequently economic \nagents could not undertake new investments or procure needed raw \nmaterials. Shortage of foreign exchange arising from low crude oil prices \nmanifested in low replacement levels for raw materials, other inputs as well \nas new investments. In addition, the energy crisis experienced in the first \nfive months of the year, resulted in increased power outages and higher \nelectricity tariffs, as well as fuel shortages; which led to factory closures in \nsome cases. The prolonged budget impasse denied the economy the \ntimely intervention of complementary fiscal policy to stimulate economic \nactivity in the face of dwindling foreign capital inflows. Aggregate credit to \nthe private sector remained highly tapered while credit to government grew \nbeyond the programmed benchmark for the period. The Committee, \nhowever, noted that many of the prevailing conditions in the economy \nduring the review period were outside the direct control of monetary policy, \nbut hopes that the implementation of the 2016 Federal Budget, supported \nby relevant sectoral policies and easing supply shocks in energy and \ncritical inputs, would provide the needed boost to the economy. \nAgainst this backdrop, data from the National Bureau of Statistics (NBS) for \nMay 2016, indicated that domestic output in Q1, 2016 contracted by 0.36 \nper cent, the first negative growth in many years. This represents a drop of \n2.47 percentage points in output from the 2.11 per cent reported in the last \n \n5 \n \nquarter of 2015, and 4.32 percentage point lower than the 3.96 per cent \nrecorded in the corresponding period of 2015. Aggregate output contracted \nin almost all sectors of the economy, with the non-oil sector declining by \nabout 0.18 per cent in Q1 2016, compared with 3.14 per cent expansion in \nthe preceding quarter. Only agriculture and trade grew by 0.68 per cent and \n0.40 per cent, respectively, while Industry, Construction and Services \nrecorded negative growth of -0.93, -0.26 and -0.08 percentage point, \nrespectively. \n \nPrices \nThe Committee noted a further increase in year-on-year headline inflation \nto 12.77 per cent and 13.72 percent in March and April 2016, respectively, \nfrom 11.38 per cent in February 2016. The increase in headline inflation in \nApril reflected increases in both food and core components of inflation. \nCore inflation rose sharply for the third time in a row to 13.35 per cent in \nApril from 12.17 per cent in March, 11.00 per cent in February and 8.80 per \ncent in January having stayed at 8.70 per cent for three consecutive \nmonths through December, 2015. Food inflation also rose to 13.19 per cent \nfrom 12.74 per cent in March, 11.35 per cent in February, 10.64 per cent in \nJanuary and 10.59 per cent in December, 2015. The rising inflationary \npressure continued to be traced to legacy factors including energy crisis \nreflected in incessant scarcity of refined petroleum products, exchange rate \npass through from imported goods, high cost of electricity, high transport \ncost, reduction in food output, high cost of inputs and low industrial output. \n \n6 \n \nThe Committee observed that in an economy characterized by high import \ndependence, the shortage of foreign exchange provided some basis for \nprice increases as currently being experienced. The Committee noted that \nthe economy needed to aggressively earn and build up its stock of foreign \nreserves in order to avoid distortions when faced with severe shocks. The \nCommittee further noted that the current inflation trend, being largely a \nproduct of structural rigidities and inadequate foreign exchange earnings \nwould continue to be closely monitored, and in coordination with fiscal \npolicy, with a view to addressing the underlying drivers of the upward price \nmovements. \n \nMonetary, Credit and Financial Markets Developments \nBroad money supply (M2) grew by 3.49 per cent in April 2016, a 1.29 \npercentage growth from the March level of 2.20 per cent and compared \nwith the 3.67 per cent in April 2015. When annualized, M2 grew by 10.47 \nper cent in April 2016 against the provisional growth benchmark of 10.98 \nper cent for 2016. Net domestic credit (NDC) grew by 7.87 per cent in the \nsame period and annualized at 23.61 per cent. At this rate, the growth rate \nof NDC was above the provisional benchmark of 17.94 per cent for 2016. \nThe development in NDC essentially reflected the significant growth in \ncredit to government of 35.97 per cent in the month, annualized to 107.91 \nper cent. Credit to the private sector grew by 3.52 per cent in April 2016, \nwhich annualized to a growth of 10.56 per cent, below the benchmark \ngrowth of 13.28 per cent. \n \n7 \n \nThe Committee observed with concern, the continuous dismal performance \nof growth in credit to the private sector, noting that in spite of the Bank’s \nefforts, DMBs continued to direct credit largely to low employment elastic \nsectors of the economy, a phenomenon that had significantly contributed to \nthe low performance of the economy. \nMoney market interest rates reflected the continuing liquidity surfeit in the \nbanking system. Average inter-bank call rate, which stood at 4.50 per cent \non 21st March 2016, closed at 8.67 per cent on March 18, 2016. Between \nMarch 25th and 14th April 2016, interbank call rate averaged 2.00 per cent. \nThe Committee noted a decline in activity in the inter-bank market in the \nperiod under review, which was due to the payment of FAAC statutory \nallocations and the maturity of CBN securities. \nThe Committee also noted a further improvement in the equities segment \nof the capital market as the All-Share Index (ASI) rose by 3.34 per cent \nfrom 25,899.91 on March 24, 2016 to 26,763.86 on May 18, 2016. \nSimilarly, Market Capitalization (MC) rose by 3.14 per cent from N8.91 \ntrillion to N9.19 trillion during the same period. However, relative to end-\nDecember 2015, the indices declined by 6.56 per cent and 6.70 per cent, \nrespectively. Globally, however, the equities markets were generally \nbearish. \n \nExternal Sector Developments \nThe average naira exchange rate remained stable at the inter-bank \nsegment of the foreign exchange market during the review period. The \nexchange rate at the interbank market opened at N197.00/US$ and closed \n \n8 \n \nat N197.00/US$, with a daily average of N197/US$ between March 25 and \nMay 13, 2016. The Committee, therefore, remains committed to its \nmandate of maintaining a stable naira exchange rate. The MPC noted the \nlevel of activity in the autonomous foreign exchange market especially, \nfollowing the deregulation of the downstream petroleum sector with \nattendant increased demand in the interbank market, thus further exerting \npressure on the naira. \n \nThe Committee recalls that over the last two consecutive meetings, it had \nsignaled the imperative of reform of the foreign exchange market. In the \nintervening period, the Committee interrogated the issues around the \ncurrent foreign exchange market regime, tracing them to the low foreign \nexchange earnings of the economy. Consequently, in the Committee’s \nopinion, the key issue remains how to increase the supply of foreign \nexchange to the economy. The Committee observed that while the Bank \nhas been working on a menu of options to ensure increased supply of \nforeign exchange, there was no easy and quick fix to the foreign exchange \nscarcity problem as supply remained essentially a function of exports and \nthe investment climate. \nThe Committee is aware that a dynamic foreign exchange management \nframework that guarantees flexibility could not replace the imperative for \nthe economy to increase its stock of foreign exchange through enhanced \nexport earnings. Consequently, such a structure must evolve to provide \nbasis for radically improved investment climate to attract new investments. \nThe Committee recognizes the exchange rate as a very important \nmacroeconomic variable, which must be earned by increased productive \n \n9 \n \nactivity and exports, noting with satisfaction that the Bank had made very \nsignificant and satisfactory progress with the reforms framework. \nThe Committee was of the view that the current adverse global and \ndomestic economic and financial conditions and the imperative imposed by \nthe demand and supply shocks to the domestic economy and considering \nthe express intensions of Government as enunciated in the 2016 budget, \npolicy must respond appropriately as the market continues to demonstrate \nconfidence in the Bank’s ability to deliver a credible foreign exchange \nmarket. Accordingly, the MPC decided that the Bank should embrace some \nlevel of flexibility in the foreign exchange market. Given the imperative for \ngrowth, the Management of the Bank has been given the mandate to work \nout the modalities for achieving the desired flexibility that is in the overall \ninterest of the Nigerian economy and when the implementation of the new \nframework would begin. \n \nThe Committee’s Considerations \nThe Committee acknowledged the severely weakened macroeconomic \nenvironment, as reflected particularly in increased inflationary pressure, \ncontraction in real output and rising unemployment. The Committee recalls \nthat in July 2015, it had hinted on the possibility of the economy falling into \nrecession unless appropriate complementary measures were taken by the \nmonetary and fiscal authorities. Unfortunately the delayed passage of the \n2016 budget constrained the much desired fiscal stimulus, thus edging the \neconomy towards contractionary output. As a stop-gap measure, the \nCentral Bank continued to deploy all the instruments within its control in the \nhope of keeping the economy afloat. The actions, however, proved \n \n10 \n \ninsufficient to fully avert the impending economic contraction. With some of \nthe conditions that led to the contraction in Q1, 2016 still largely \nunresolved, the weak outlook for growth which was signaled in July 2015 \ncould extend to Q2. To this effect, today’s policy actions have to be \npredicated on a less optimistic outlook for the economy in the short term, \ngiven that, even after the delayed budgetary passage in May 2016, the \ninitial monetary injection approved by the Federal Government may not \nimpact the economy soon, as the processes involved in MDAs finalizing \nprocurement contracts before the disbursement of funds may further delay \nthe much needed financial stimulus to restart growth. \n \nThe Committee noted that the CBN had implemented accommodative \nmonetary policy from July 2015, with the hope of achieving growth, up until \nMarch 2016, when the MPC switched into a tightening mode. However, \nwhile the underlying conditions necessitating tight monetary policy \nremained largely in place, sundry administrative measures implemented by \nthe Bank and recent macroeconomic conditions on the back of the 2016 \nBudget are expected to significantly dictate a key policy preference in the \ndilemma now faced by monetary policy - stagflation. Given the current \nlimited policy space, it is imperative to balance stability with growth stance \nwhile working on options that in the short term, are certain to isolate \nseasonal and transient factors fuelling the current price spiral. \n \nOther than credit to government, growth in all monetary aggregates \nremained largely below their indicative benchmarks, yet; headline inflation \nspiked in April 2016, far above the upper limit of the policy reference band. \n \n11 \n \nInflation has continued to be driven mainly by supply side factors such as \nfuel scarcity, increase in tariff and deterioration in electricity supply, \nincrease in the price of petrol, higher input costs as a result of scarcity of \nforeign exchange, persistent security challenges and exchange rate pass-\nthrough to domestic prices of import. While the Committee believed that the \nrecent deregulation of the downstream sector of the petroleum sector was \nin the right direction and would lead to increased supply, the pass-through \neffect of prices to other products has to be factored in policy \nconsiderations. Mindful of the limitations of monetary policy in influencing \nstructural imbalances in the economy, the Committee stressed the need for \npolicy coordination with the fiscal authorities in order to effectively address \nthe identified pressure points. \nThe Committee noted that the continued excess liquidity in the banking \nsystem was responsible for the low level of activity in the interbank market. \nThis is in addition to contributing to the sustained pressure in the foreign \nexchange market. The Committee expressed hope that efficient \nimplementation of the recently passed 2016 Federal Budget, especially; the \ncapital expenditure portion, would help invigorate growth in the economy as \nbusiness confidence rejuvenates. \nThe Committee expressed concern over sustained pressure in the foreign \nexchange market and the necessity of implementing reforms to engender \ngreater flexibility of rate and transparency in the operation of the inter-bank \nforeign exchange market. Accordingly, the Committee noted that it was \ntime to introduce greater flexibility in the management of the foreign \nexchange market. The Committee reaffirmed commitment towards \n \n12 \n \nmaintenance of price stability and reiterated the need to reappraise the \ncoordination mechanism between monetary and fiscal policy and initiate \nreforms, for the purpose of more efficient policy synchronization and \nmanagement. \nThe Committee’s Decisions \nThe Committee, in its assessment of the relevant risk profiles, came to the \nconclusion that although, the balance of risks remains tilted against growth; \nprevious decisions need time to crystalize. Consequently, in a period of \nstagflation, the policy options are very limited. To avoid complicating the \nconditions, the Committee decided on the least risky option to hold. The \nforeign exchange market framework, now ready, the MPC voted \nunanimously to adopt greater flexibility in exchange rate policy to restore \nthe automatic adjustment properties of the exchange rate. Consequently, \nall 9 members voted to hold and introduce greater flexibility in managing \nthe foreign exchange rate. The Bank would however, retain a small window \nfor funding critical transactions. Details of operation of the market would be \nreleased by the Bank at an appropriate time. \n \nIn summary, the MPC voted to: \n(i) Retain the MPR at 12.00 per cent; \n(ii) \nRetain the CRR at 22.50 per cent; \n(iii) Retain the Liquidity Ratio at 30.00 per cent; and \n(iv) Retain the Asymmetric Window at +200 and -500 basis points \naround the MPR \n \n13 \n \n(v) Introduce greater flexibility in the inter-bank foreign exchange \nmarket structure and to retain a small window for critical \ntransactions. \n \nThank you for listening. \n \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n24th May 2016", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/CBN MPC Communique No 107 of the Meeting held on May 23 and 24, 2016.pdf"}
{"doc_id": "c52c1916e931e86d8cb5b64570654c17", "text": "1 \n \nClassified as Confidential \nClassified as Confidential \n \nCENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 146 OF THE MONETARY POLICY \nCOMMITTEE MEETING HELD ON MONDAY 23rd AND TUESDAY 24th JANUARY 2023 \nThe Monetary Policy Committee (MPC) held its first meeting for 2023 on the 23rd \nand 24th January, 2023, as optimism of a rebound in global output recovery \nwaned considerably, giving room for increased concerns of a likely global \nrecession in 2023. This is driven by several global shocks impacting negatively \non growth and price development. Major headwinds to global growth include: \nongoing geopolitical tensions in some regions; intensified disruptions to the \nenergy market; persisting supply bottlenecks; resurgence of the COVID-19 \npandemic in major industrial cities in China; and tightening external financial \nconditions. In addition to these, the slow growth in global trade, continued \nvolatility in the oil market and growing private and public debt portfolios, are \nclear signals of increasing uncertainty, imposing a drag on growth. \nIn the domestic economy, output growth recovery was subdued in the third \nquarter of 2022, but expected to recover moderately in the fourth quarter on \nthe back of continued support of both monetary and fiscal policy through \nvarious interventions in growth-enhancing sectors. At this meeting, the \nCommittee reviewed these and other developments in the global and \ndomestic economic and financial environments in 2022, as well as the outlook \nand risks for 2023. \nTwelve (12) members of the Committee attended this meeting. \nGlobal Economic Developments \nThe Committee noted with concern, the growing evidence of increased \nmilitarization of the war in Ukraine and the consequence of a prolonged war \n \n2 \n \nClassified as Confidential \nClassified as Confidential \non the recovery of the global economy. It also noted the renewed concern of \nthe possibility of yet another Pandemic reverberating the global economy in \n2023, as infection rates rise in China, following its lifting of COVID-19 restrictions. \nThese two factors alongside the tightening of global financial conditions remain \nmajor headwinds to global economic growth. The combined impact of these \nshocks on the global economy could result in further disruptions to commodity \nand energy markets as well as the efficient functioning of global supply chains. \nIn the Advanced Economies, fiscal policy retreated to give way to monetary \nadjustment, while in the Emerging Markets and Developing Economies, fiscal \ncapacity is being greatly undermined by the array of shock spillovers from the \nglobal economy. The International Monetary Fund (IMF), in its October 2022 \nWorld Economic Outlook, retained its global output growth projection for 2022 \nat 3.2 per cent, but further downgraded in the 2023 forecast to 2.7 per cent \ncompared with 2.9 per cent in its July 2022 forecast. The World Bank in its latest \nforecast, indicated a much lower global growth expectation of 1.7 per cent for \n2023. \nOn price development, the MPC observed that inflation, in most Advanced \nEconomies, although trending downwards, remained significantly above their \nlong-run objectives and is expected to remain elevated throughout 2023. This is \ndriven by the continued high price of food and energy, a fallout of the war in \nUkraine, lagged impact of the massive liquidity support rolled out to douse the \nimpact of the COVID-19 pandemic, and persisting disruptions to the global \nsupply chain as China faces a renewed surge of the Pandemic. Fears that \nRussia may renege on its commitment to the Black Sea grains deal is also \nbuilding expectations of possible rise in short-term price levels. In the Emerging \nMarkets and Developing Economies, inflation is expected to moderate \nmarginally in 2023, but remain broadly elevated due to a combination of \nfactors such as the persisting high price of grains and other commodities; \ncontinued exchange rate pressures; and other legacy structural factors. \nIn the global financial markets, the continued normalisation of monetary policy \nhas led to the tightening of external financial conditions and increased volatility \n \n3 \n \nClassified as Confidential \nClassified as Confidential \nin the equities market. With the increased fears of a likely global recession in \n2023, investors have commenced a move towards safe-haven assets such as \ngold and silver to safeguard their investments. \nIn the Advanced Economies, corporate debt levels remain considerably high \nas pressure builds to avoid default scenarios with the continued hike of \nmonetary policy rates. In the Emerging Market and Developing Economies, the \npersistence of rising public debt profiles and capital flow reversals are putting \nsevere pressure on exchange rates, posing a challenge to external \nsustainability. \nDomestic Economic Developments \nAvailable data from the National Bureau of Statistics (NBS) revealed that Real \nGross Domestic Product (GDP) grew by 2.25 per cent (year-on-year) in the third \nquarter of 2022, compared with 3.54 per cent in the second quarter of 2022 and \n4.03 per cent in the corresponding period of 2021. The economy has continued \non a path of positive growth for eight consecutive quarters. This is driven largely \nby support by the Bank and the fiscal authority to growth enhancing sectors. \nStaff projections showed that output growth recovery is expected to continue \nreasonably in 2023, given the expected sustained positive performance during \nthe fourth quarter of 2022 and steady rebound in economic activities. \nThe MPC welcomed the moderation in inflation following ten consecutive \nmonths of uptick, as headline inflation (year-on-year) declined marginally to \n21.34 per cent in December 2022 from 21.47 per cent in November 2022. Month-\non-month headline inflation however, increased to 1.71 per cent in December \n2022 from 1.39 per cent in the preceding month, due to a rise in consumer \nspending during the festive period. \nThe Committee observed the continued growth in money supply with broad \nmoney (M3) growth exceeding the 2022 provisional benchmark of 15.21 per \ncent at 16.52 per cent (year-to-date) in December 2022, compared with 13.92 \nper cent in November 2022. This was largely driven by increased claims on other \n \n4 \n \nClassified as Confidential \nClassified as Confidential \nsectors (other financial corporations, state and local governments, public \nnonfinancial corporations, and the private sector). \nMoney market rates oscillated below and within the asymmetric corridor of the \nstanding facilities window, reflecting changing liquidity conditions in the \nbanking system. Accordingly, the monthly weighted average Open Buyback \n(OBB) rate decreased to 11.61 per cent in December 2022 from 12.56 per cent \nin November 2022, while the monthly average inter-bank rate, increased to \n12.08 per cent in December 2022 from 11.89 per cent in November 2022. \nThe MPC noted the continued resilience of the banking system, evidenced by \nthe progressive improvement in the Non-Performing Loans (NPLs) ratio from 4.9 \nper cent in November 2022 to 4.2 per cent in December 2022. The Committee \nalso noted that the liquidity ratio was well above its prudential limit at 44.1 per \ncent, while the Capital Adequacy Ratio (CAR) remained at 13.8 per cent in \nDecember 2022 compared with the preceding month, staying within its \nprudential range of 10.0 -15.0 per cent. \nThe equities market was bullish in the review period, as the All-Share Index (ASI) \nand Market Capitalization (MC) increased to 51,251.06 and N27.92 trillion on \nDecember 30, 2022, from 43,839.08 and N23.88 trillion respectively, on October \n31, 2022. This reflected better-than-expected corporate earnings and improved \ninvestor confidence in the country. \nThe Committee noted the marginal decline in the external reserves, as gross \nexternal reserves decreased by 0.95 per cent at end-December 2022 to \nUS$36.55 billion, from US$36.9 billion at end-November 2022. This reflects the \nexchange rate pressure accentuated by a combination of heightened \ndemand and slow accretion to reserves. \nThe Committee reviewed the performance of the Bank’s various interventions \naimed at stimulating production and productivity across the real sector. \nBetween September and October 2022, under the Anchor Borrowers’ \nProgramme (ABP), the Bank disbursed N41.02 billion to several agricultural \n \n5 \n \nClassified as Confidential \nClassified as Confidential \nprojects, bringing the cumulative disbursements under the Programme to \n₦1,067.29 billion to over 4.6 million smallholder farmers cultivating or rearing 21 \ncommodities across the country. The Bank also released N300 million to finance \nlarge-scale agricultural projects under the Commercial Agriculture Credit \nScheme (CACS), bringing the total disbursements under the Scheme to ₦745.31 \nbillion for 680 projects in agro-production and agro-processing. \nIn addition, the Bank released the sum of ₦48.30 billion under the ₦1.0 trillion \nReal Sector Facility to seven (7) new real sector projects in agriculture, \nmanufacturing, and services. Cumulative disbursements under the Real Sector \nFacility currently stood at ₦2.15 trillion disbursed to 437 projects across the \ncountry, comprising 240 in manufacturing, 91 in agriculture, 93 in services and \n13 mining sector projects. Furthermore, under the 100 for 100 Policy on \nProduction and Productivity (PPP), the Bank has disbursed the sum of ₦20.78 \nbillion to nine (9) projects in healthcare, manufacturing, and services. This brings \nthe cumulative disbursements under the facility to ₦114.17 billion to 71 projects \nacross healthcare, manufacturing, services and agriculture. The Bank released \n₦4.00 billion under the Intervention Facility for the National Gas Expansion \nProgramme (IFNGEP) to promote the adoption of compressed natural gas \n(CNG) as the preferred fuel for transportation and liquefied petroleum gas \n(LPG) as the preferred cooking fuel. \nIn the MSME sector, the Bank supported entrepreneurship development with \nthe disbursement of the sums of N1.33 billion and N10.00 million under the \nAgribusiness/Small and Medium Enterprise Investment Scheme (AgSMEIS) and \nMicro, Small, and Medium Enterprise Development Fund (MSMEDF), \nrespectively, to support entrepreneurship development in the country, bringing \nthe total disbursement under the interventions to N150.22 billion and N96.08 \nbillion, respectively. Under the Export Facilitation Initiative (EFI), the Bank funded \nexport-oriented projects with the sum of N5.34 billion, bringing the cumulative \ndisbursement under the intervention to N44.58 billion. \n \n6 \n \nClassified as Confidential \nClassified as Confidential \nOutlook \nThe broad outlook for the recovery of both the global and domestic economies \nremain uncertain with the path to full recovery clouded by significant downside \nrisks. The key risks remain the lingering headwinds from the Russian-Ukraine war, \nheightened inflationary pressure across several economies and sharp slowdown \nof economic activities in China with the resurgence of COVID-19 pandemic \nacross its major cities. Others include: the tightening of external financial \nconditions, as monetary policy normalization continues; increasing risk of a \nglobal debt crisis, as both corporate and public debt levels burgeon; and the \nincreasing likelihood of a global recession in 2023. \nAvailable data and forecasts for key macroeconomic indicators for Nigeria \nsuggest that the economy will continue to grow through 2023, but at a subdued \npace. The continued high level of insecurity; perennial scarcity of Premium \nMotor Spirit (PMS) and high cost of other energy sources; increased spending \ntowards the 2023 general elections; rising cost of debt servicing; and \ndeteriorating fiscal balances, remain the key sources of shocks to the Nigerian \neconomy. Accordingly, the economy is forecast to grow in 2023 by 2.88 per cent \nby the CBN estimate. \n \nThe Committee’s Considerations \nAt this meeting, although the MPC was delighted that inflation (year-on-year) \nhad started to moderate, it was not convinced that a marginal 13 basis points \ndip in inflation was enough to begin to celebrate. The Committee was \ntherefore not of the opinion that a hold or loosen option was desirable. This is \nbecause loosening under a double-digit inflationary condition will be \ntantamount to an immediate reversal of the expected further downward trend \nin inflation. Committee also felt that loosening will negate the objective of \ndampening the pent-up aggregate demand that fueled the rise in inflation \npost-COVID-19 pandemic. \n \n7 \n \nClassified as Confidential \nClassified as Confidential \nAs for hold, the Committee was reluctant in considering this option because a \nhold option would signal MPC’s quick adjustment of its policy stance due to a \none-time, marginal decline in inflation, suggesting a weak confidence in its \nprevious policy stance at taming inflation. \nThe MPC was therefore unanimous in its position to continue to tighten. \nHowever, the dilemma at this meeting was whether to continue tightening \naggressively or moderately. To the Committee, a moderate tightening may \nslow the rate of deceleration in inflation without necessarily hurting output. For \nthose members who felt that an aggressive stance was needed, they were of \nthe view that Nigeria’s inflation at a rate above 20 per cent, was already a \nthreat to growth and among the highest in the world. To this group of members, \naggressively raising the policy rate was paramount to reining in inflation \nbecause an aggressive tightening stance would further narrow the negative \nreal interest rate margin. MPC also feels that a tightening stance would signal \nconfidence in the effectiveness of its Monetary Policy direction to rein in \ninflation, improve financial system stability, and moderate exchange rate. \nThe Committee’s Decision \nMembers welcomed the recent deceleration in year-on-year headline inflation, \nnoting that the persistence in policy rate hikes over the last few meetings of the \nCommittee had started to yield the expected decline in inflation. \nThe Committee thus deliberated on either to hike rates further or hold for the \nimpact of the last four rate hikes to continue to feed through. At this MPC, \ntherefore, the options considered were primarily to hold the policy rate or \ntighten further to consolidate the gains of previous rate hikes. Loosening, in the \nview of members, would gravely undermine the gains of the last four rate hikes. \nThe MPC noted the continued upward risk to price development characterized \nby the forthcoming 2023 general elections; perennial scarcity of PMS; continued \nrise in other energy prices; exchange rate pressure; as well as rising insecurity. \nMembers, however, noted that the current naira redesign and cash withdrawal \n \n8 \n \nClassified as Confidential \nClassified as Confidential \nlimit policies are huge moderating factors to price development as Currency-\nOutside-Banks \nis \nexpected \nto \ncontinue \nto \nmoderate \nbeyond \nthe \nimplementation stage of these policies. \nThe MPC was of the view that although the inflation rate moderated marginally \nin December, the economy remained confronted with the risk of high inflation \nwith adverse consequences on the general standard of living. The Committee, \ntherefore, decided to sustain the current stance of policy at this point in time to \nfurther rein in inflation. \nOne (1) member voted to increase the MPR by 150 basis points, Four (4) \nmembers by 50 basis points, and Seven (7) members by 100 basis points, \n In summary, the MPC voted to: \nI. \nRaise the MPR by 100 basis points to 17.5 per cent; \nII. \nRetain the asymmetric corridor of +100/-700 basis points around the MPR; \nIII. \nRetain the CRR at 32.5 per cent; and \nIV. \nRetain the Liquidity Ratio at 30 per cent. \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n24th January 2023 \n \n \n \n \n \n \n9 \n \nClassified as Confidential \nClassified as Confidential", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/COMMUNIQUE NO 146 OF THE MONETARY POLICY COMMITTEE Jan23_24 2023.docx.pdf"}
{"doc_id": "a99878aab3f313ea1bc733f14c9d45a3", "text": "This document is for CBN internal consumption \n5 \n \n \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nECONOMIC REPORT \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nSecond Quarter \n2023 \n \n \ni \n \nThis document is for CBN internal consumption \nABOUT THE REPORT \n \nThe Central Bank of Nigeria (CBN) Economic Report presents economic \ndevelopments in Nigeria, for dissemination to the public. The Report, which \nis published on a monthly and quarterly basis, provides insights on current \ndevelopments in the real; fiscal; monetary & financial; and external sectors \nof the Nigerian economy, as well as, on global issues that impact the \ndomestic economy. In addition, it reflects the policy initiatives of the CBN \nin pursuit of its mandate. \n \nThe Report is targeted at a wide range of readers, including economists, \npolicymakers, financial analysts in the government and private sectors, \nand the public. Free download of the Report, including current and past \nissues is available at the CBN website: www.cbn.gov.ng. All inquiries \nconcerning the Report should be directed to the Director, Research \nDepartment, Central Bank of Nigeria, P.M.B. 187, Garki, Abuja, Nigeria. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nii \n \nThis document is for CBN internal consumption \nContents \n \nABOUT THE REPORT ........................................................................................ i \nEXECUTIVE SUMMARY ...................................................................................1 \n1.0 GLOBAL ECONOMIC DEVELOPMENTS ....................................................3 \n1.1 \nGlobal Economic Activity ..................................................................3 \n1.2 Global Inflation ..................................................................................6 \n1.3 \nGlobal Financial Markets Development ...........................................8 \n1.4 \nGlobal Commodity Market Developments ................................... 11 \n1.5 \nMonetary Policy Stance ................................................................. 14 \n2.0 DOMESTIC ECONOMIC DEVELOPMENTS ............................................ 16 \n2.1 \nReal Sector Developments ............................................................ 16 \n2.1.1 Sectoral Performance .................................................................... 17 \n2.1.2 Consumer Prices ............................................................................ 19 \n2.1.3 Socio-Economic Developments ..................................................... 20 \n2.1.4 Domestic Crude Oil Market Developments .................................. 20 \n2.2 \nFiscal Sector Developments........................................................... 22 \n2.2.1 Federation Account Operations .................................................... 22 \n2.2.2 Fiscal Operations of the Federal Government ............................. 24 \n2.3 \nMonetary and Financial Developments ........................................ 27 \n2.3.1 Monetary Developments ............................................................... 28 \n2.3.2 Sectoral Credit Utilisation .............................................................. 31 \n2.3.3 Financial Developments................................................................. 33 \n2.3.3.1 Money Market Developments ....................................................... 33 \n2.3.4 Capital Market Developments ....................................................... 36 \n2.3.5 Financial Soundness Indicators ..................................................... 39 \n2.4 \nExternal Sector Developments ...................................................... 41 \n2.4.1 Current and Capital Accounts........................................................ 41 \n2.4.2 Financial Account ........................................................................... 46 \n2.4.3 External Debt .................................................................................. 47 \n2.4.4 International Investment Position (IIP) ......................................... 47 \n2.4.5. International Reserves ................................................................... 48 \n2.4.6 Foreign Exchange Flows through the Economy ........................... 50 \n2.4.7 Developments in the Foreign Exchange Market ......................... 50 \n3.0 ECONOMIC OUTLOOK .......................................................................... 52 \n3.1 \n Global Outlook .............................................................................. 52 \n3.2 \n Domestic Outlook ......................................................................... 52 \n \n \niii \n \nThis document is for CBN internal consumption \nTables \n \n \nTable 1: Global Purchasing Managers' Index (PMI)............................................. 4 \nTable 2: Currencies of Selected Emerging Markets Economies (EMEs) to the US \nDollar ............................................................................................... 11 \nTable 3: Indices of Average World Prices of Nigeria's Major Agricultural Export \nCommodities in Q22023 (Dollar Based) (Jan. 2010=100) ..................... 13 \nTable 4: Policy Rates of Selected Central Banks in Per cent ............................... 15 \nTable 5: Federally Collected Revenue and Distribution (N Billion) ...................... 23 \nTable 6: FGN Retained Revenue (₦ Billion) ....................................................... 24 \nTable 7: Fiscal Balance (N Billion).................................................................... 25 \nTable 8: Components of Reserve Money (N Billion) ........................................... 28 \nTable 9: Money and Credit Growth over preceding December in Per cent.......... 30 \nTable 10: Sectoral Credit Allocation to Agriculture, Industry and Services .......... 31 \nTable 11: Nigerian Exchange (NGX) Limited Sectoral Indices ............................. 37 \nTable 12: Listings on the Nigerian Exchange Limited in Q22023 ........................ 39 \n \nFigures \nFigure 1: Composite Purchasing Manufacturing Indices (PMIs) in Selected \nAdvanced Economies ........................................................................ 5 \nFigure 2: Selected Emerging Markets and Developing Economies’ Composite \nPurchasing Manufacturing Indices (PMIs) ............................................ 6 \nFigure 3: Headline Inflation in Selected Advanced Economies in Per cent ............ 7 \nFigure 4: Headline Inflation (year-on-year) in Selected EMDEs in Per cent ........... 8 \nFigure 5: Key Global Stock Indices ...................................................................... 9 \nFigure 6: 10-year Government Bond Yields for Selected Countries ..................... 10 \nFigure 7: Unit of Currencies of Selected EMEs to the US Dollar .......................... 10 \nFigure 8: Quarterly Crude Oil Prices (US$ per barrel) ........................................ 12 \nFigure 9: Price Changes in Selected Metals (%) for Q22023 .............................. 14 \nFigure 10: Real GDP Growth Rate (year-on- year)............................................. 16 \nFigure 11: Sectoral Growth Rate of Real GDP in Per cent .................................. 17 \nFigure 12: Top 13 Subsectors with the Largest Contribution (Percentage point) to \nGDP Growth and their Growth Rates (%) in Q22023 ......................... 18 \nFigure 13: Subsectors with the Least Contributions (Percentage point) to GDP \nGrowth and their Growth Rates (%) in Q22023 ................................ 19 \nFigure 14: Headline, Food and Core Inflation (year-on-year) in Per cent ............ 19 \nFigure 15: Federal Government Expenditure (N Billion)..................................... 25 \nFigure 16: FGN External and Domestic Debt (N Billion) ..................................... 26 \nFigure 17: Composition of Domestic Debt Stock in Per cent .............................. 27 \nFigure 18: Composition of External Debt Stock in Per cent ................................ 27 \nFigure 19: Composition of Currency-in-Circulation (₦ Billion) ............................ 29 \nFigure 20: Consumer Credit Outstanding (₦Billion) and Share of sectoral \nCredit in Per cent ............................................................................ 32 \nFigure 21: Composition of Consumer Credit in Per cent .................................... 32 \nFigure 22: Transactions at the CBN Standing Facility Window (N Billion) ........... 33 \nFigure 23: Primary Market NTBs (N Billion) ...................................................... 34 \nFigure 24: Primary Market Auctions of FGN Bond (N Billion) ............................. 34 \nFigure 25: Developments in Short-term Interest Rates in Per cent ..................... 35 \nFigure 26: Trend in Average Term Deposit and Lending Rates in Per cent .......... 36 \nFigure 27: Aggregate Market Capitalisation and All-Share Index ...................... 37 \n \n \niv \n \nThis document is for CBN internal consumption \nFigure 28: Volume and Value of Traded Securities on the Nigerian Exchange \n(NGX) ............................................................................................. 38 \nFigure 29: Current Account Balance (US$ Billion) ............................................. 41 \nFigure 30: Import by Sector (US$ Billion) .......................................................... 43 \nFigure 31: Share of Service Out-Payments in Per cent ....................................... 44 \nFigure 32: Share of Services Receipts in Per cent .............................................. 44 \nFigure 33: Primary Income Balance (US$ Billion) .............................................. 45 \nFigure 34: Secondary Income Balance and Remittances Inflow (US$ Billion) ...... 46 \nFigure 35: External Reserves in US$ Billion and Months of Import Cover ........... 48 \nFigure 36: External Reserves by Ownership in Per cent ..................................... 49 \nFigure 37: Currency Composition of External Reserves in Per cent ..................... 49 \nFigure 38: Foreign Exchange Transactions through the Economy in the ............ 50 \nFigure 39: Turnover in the Investors’ and Exporters’ (I&E) Foreign Exchange ..... 51 \n \n \n1 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nEXECUTIVE SUMMARY \nThe rebound in global economic activities was sustained in Q22023, driven by \nthe services sector and improvement in global supply chains. This development \nwas reflected in the average J.P. Morgan’s Global Composite Purchasing \nManager’s Index (PMI), which expanded to 53.77 index points from 51.73 \nindex points in Q12023. Consumer prices across most economies moderated \non account of the tight monetary policy stance, declining energy prices, and \nbase period effects. The performance of the stock and bond markets was \nmixed, as investors move from higher- to lower- risk assets. \nThe domestic economy sustained the growth momentum, propelled by \nactivities in the non-oil sector. Real GDP grew by 2.51 per cent (year-on-year), \ncompared with 2.31 per cent in Q12023, reflecting broad based improvement \nin economic activities, particularly in the services and agriculture sub-sectors. \nThe non-oil sector grew by 3.58 per cent and contributed 3.36 percentage \npoints to overall GDP growth. The oil sector however, dragged growth and \ncontracted by 13.43 per cent, with a negative contribution of 0.85 percentage \npoint. The contraction in the oil GDP was due to legacy challenges confronting \nthe oil sector. Inflation remained elevated, driven largely by recent market-\nbased reforms such as the fuel subsidy removal and the introduction of \nmarket-determined exchange rate, which impacted negatively on production, \ntransportation, and logistics cost. In addition, expectations of further rise in \nprices contributed to inflationary pressures. Thus, headline inflation (year-on-\nyear) rose to 22.79 per cent in Q22023 from 22.04 per cent in Q12023 as core \nand food inflation rose to 20.27 and 25.25 per cent, from 19.86 and \n24. 45 per cent, respectively. \nFiscal, federally collected revenue declined by 8.4 and 39.7 per cent relative to \nthe level in the preceding quarter and the budget benchmark, respectively. \nAlthough, FGN retained revenue improved by 8.2 per cent compared with the \nlevel in Q12023, it was below the quarterly target by 45.3 per cent. Provisional \nFGN expenditure dipped by 26.6 per cent relative to the level in Q12023 and \nfell short of the target by 23.5 per cent. Consequently, overall deficit \ncontracted by 37.9 per cent relative to the preceding quarter. At \n₦49,853.69 billion (25.0 per cent of GDP), total public debt, at end-March \n2023, remained within the 40.0 per cent domestic threshold. \nThe financial system was resilient on the back of sustained hawkish policy \nstance, consistent supervision, and the implementation of prudential \nguidelines. Broad money supply (M3) grew by 24.4 per cent at end-June 2023, \nowing to increase in both net foreign and domestic assets, as well as, the effect \nof exchange rate reforms. The combined effect of the decline in banking \n \n2 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nsystem liquidity and the hike in the monetary policy rate resulted in a mixed \ntrend in key short-term interest rates. The removal of fuel subsidy and the \nBank’s exchange rate reforms engendered positive sentiments and triggered \nbullish activities in the capital market. Investors engaged in bargain-hunting, \nleading to increased market activity. \n \nThrough lower than the preceding period, the current account maintained a \nsurplus position in the review period, due to significant decline in the \nimportation of petroleum products and higher inflow of diaspora remittances. \nThe financial account recorded a net incurrence of financial liabilities, driven \nby increased inflow of portfolio capital. The international reserves at \nUS$33.71 billion could finance 6.5 months of import for goods and services or \n8.9 months for goods only. The average exchange rate of the naira to US dollar \nat the I&E window depreciated by 9.8 per cent to ₦511.23/US$, compared \nwith ₦460.93/US$ in 2023Q1. The international investment position recorded \na lower net financial liability of US$53.13billion. Public sector external debt \nstock and external debt service payment at end-June 2023 stood at \nUS$43.16 billion and US$0.37 billion, respectively. \nGlobal growth outlook remains blurry, on account of tight financial conditions, \ngeo-economic fragmentation, and macroeconomic uncertainties that \ncontinue to trail the Russia-Ukraine War. Thus, the IMF revised global growth \nprojection to 2.8 per cent in 2023, from an estimated 3.4 per cent in 2022. \nDespite some downside risks, Nigeria's economic growth prospects remains \npositive. The optimism is contingent upon the continuation of the current trend \nin crude oil prices and production, and the successful execution of the Medium-\nTerm National Development Plan (MTNDP). Additionally, the pro-market \npolicy reforms of the government such as the removal of fuel subsidy, and the \nexpansion of credit by development finance institutions to growth-enhancing \nsectors, are expected to spur growth in the medium term. The headwind to the \ngrowth outlook includes a potential contraction in global demand, ongoing \nsecurity issues, and critical infrastructure deficit. \n \n \n \n \n \n3 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \n1.0 GLOBAL ECONOMIC DEVELOPMENTS \nGlobal economic activity rebounded in Q22023, propelled by the easing of \nsupply-chain and inflationary pressure, and the reopening of Chinese \neconomy, resulting in marked expansion in services and employment levels \nacross regions. Also, inflationary pressure moderated in most economies on \nthe back of easing food and energy costs, as well as, the crystallisation of tight \nmonetary policy stance. The cooling off of inflation and receding fears of a \npossible recession in the Advanced Economies (AEs) led to improvement across \nfinancial market segments, with the strong performance of technology and \nenergy sectors outweighing the slump in the US banking sector. Crude oil \nprices fell, due to increased crude oil supply and investors’ pessimism owing to \nuncertainties in the US banking sector. \n1.1 Global Economic Activity \nThe rebound in global economic activities was sustained in the second quarter \nof 2023, driven by the services sector, and improvement in global supply chains. \nThe average global composite Purchasing Managers’ Index (PMI) rose to 53.77 \nindex points from 51.73 index points in Q12023. This growth was fuelled by \nthe rising consumer demand that sustained the services sector on a growth \ntrajectory, as inflationary pressures eased further during the quarter. \nSpecifically, the input prices index declined to 57.40 index points from 59.80 \nindex points, with a concomitant reduction of the output prices index to 54.27 \nindex points from 55.07 index points in Q12023. \nThe services sector outperformed the manufacturing sector with a notable \nexpansion as the PMI increased to 54.97 index points, above \n52.33 index points in the preceding quarter. All categories of activity covered \nnamely, business, consumer, and financial services, experienced a broad-\nbased expansion. Also, employment levels in the services sector rose to \n52.77 index points from 51.57 index points in the preceding quarter, \nindicating improved employment opportunities in the labour market. These \npositive economic indicators led to increased optimism for future business \nactivity. This was reflected in the rise in the future activity index to \n65.27 index points in Q22023 from 65.00 index points in the preceding \nquarter. \nThe manufacturing sector, on the other hand, remained below the \nbenchmark, with the average manufacturing PMI at 49.53 index points. \n \nSummary \nGlobal Economic \nConditions \n \n4 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nTable 1: Global Purchasing Managers' Index (PMI) \n \nQ22022 \nQ12023 \nQ22023 \nComposite \n52.00 \n51.73 \n53.77 \nEmployment Level \n53.27 \n51.30 \n52.07 \nNew Business Orders \n51.90 \n51.23 \n53.10 \nNew Export Business Orders \n48.93 \n48.37 \n48.80 \nFuture Output \n63.03 \n64.33 \n64.17 \nInput Prices \n70.70 \n59.80 \n57.40 \nOutput Prices \n61.50 \n55.07 \n54.27 \n \n \n \n \nManufacturing \n51.87 \n49.53 \n49.53 \nServices (Business Activity) \n52.67 \n52.33 \n54.97 \nNew Business \n52.40 \n52.13 \n54.67 \nNew Export Business \n50.20 \n50.20 \n52.77 \nFuture Activity \n63.90 \n65.00 \n65.27 \nEmployment \n53.90 \n51.57 \n52.77 \nOutstanding Business \n52.37 \n50.33 \n50.57 \nInput Prices \n70.93 \n61.40 \n60.07 \nPrices Charged \n61.33 \n55.37 \n55.73 \n Source: J.P Morgan. \n \n \nThe improvement in global supply-chains and moderation in inflation supported \neconomic activities in the Advanced Economies. Most AEs recorded upticks in \ntheir output levels in Q22023. For instance, the US PMI rose to 53.63 index \npoints from 49.73 index points in the preceding quarter. This reflected \nimprovement in both services and manufacturing activities, as well as, \nimproved business optimism. Economic activities in Europe was strong during \nthe quarter, supported by increased consumer demand, job expansion and \nwaning input prices. Also, PMI levels rose to 54.70 index points, 53.90 index \npoints, 53.27 index points, and 52.90 index points in Spain, UK, Italy, and \nGermany, respectively. In Japan, PMI rose to 52.43 index points in Q22023, \ndriven majorly by the services sector as the recovery from the COVID-19 \npandemic disruptions gained more momentum. In France, a slower expansion \nin output was recorded as the PMI which stood at 50.33 index points from \n51.60 index points in the preceding quarter, could be attributed to the series \nof protests and strikes witnessed during the quarter. \nIn Canada, economic activities contracted on account of high interest rates \nand an uncertain economic outlook which induced a reduction in consumer \ndemand. Consequently, the PMI declined to 49.33 index points in Q22023 \ncompared with 50.67 index points in the preceding quarter. \n \n \n \nEconomic activity in \nAdvanced \nEconomies \n \n5 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 1: Composite Purchasing Manufacturing Indices (PMIs) in Selected \nAdvanced Economies \n \n Source: Trading Economics/Various countries’ websites. \n \nEconomic activity in most Emerging Markets and Developing Economies \n(EMDEs) remained resilient. Specifically, in \nIndia, \nPMI \nrose \nto \n60.87 index points in Q22023 from 58.30 index points in the preceding quarter \nunderpinned by robust domestic and foreign demand, which spurred growth \nin both services and manufacturing sectors. In China, falling exports, weak \nretail sales and drawbacks in the property sector weighed on growth, resulting \nin a softer expansion, as the PMI stood at 53.2 index points from 55.43 index \npoints in the previous quarter. In Indonesia, improved factory activities, \nbolstered \ndomestic \ndemand, \nalbeit \nweakening \nforeign \ndemand. \nConsequently, PMI rose to 51.83 index points from 51.47 index points in the \npreceding quarter. Similarly, Russia and Turkey witnessed expansions in their \neconomic activities with PMI of 55.10 index points and 51.50 index points, \nrespectively. The developments in Russia were driven by sharper uptick in \nservices output, while sustained improvements in domestic demand and a \nrebound in economic activity, following the earthquake in February 2023 and \nthe election period, contributed to the expansion in Turkey during the \nquarter. \nIn Brazil, economic expansion was driven primarily by the services sector, as \nPMI inched up to 51.87 index points from 50.10 index points in the preceding \nquarter. In Mexico, PMI rose moderately to 50.83 index points from \n50.30 index points in the previous quarter, buoyed by an improvement in \nunderlying demand for natural gas pipeline and liquefaction projects. \nConversely, business activity contracted in South Africa, owing to idiosyncratic \nshocks such as, power cuts, supply shortages, and price pressures. Thus, PMI \n54.0\n55.3\n53.9\n53.3\n52.6\n55.7\n55.0\n55.7\n49.73\n51.27\n51.07\n52.87\n51.57\n50.67\n55.2\n51.6\n53.6\n53.9\n52.9\n53.3\n52.4\n49.3\n54.7\n50.3\n46\n48\n50\n52\n54\n56\n58\nUNITED\nSTATES\nUNITED\nKINGDOM\nGERMANY\nITALY\nJAPAN\nCANADA\nSPAIN\nFRANCE\nQ22022\nQ12023\nQ22023\n50-point Benchmark\nEconomic activity in \nEMDEs \n \n6 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nfell to index 48.73 index points from 49.63 index points in the preceding \nquarter. \n \nFigure 2: Selected Emerging Markets and Developing Economies’ \nComposite Purchasing Manufacturing Indices (PMIs) \nSource: Trading Economics/Various countries’ websites. \n \n1.2 Global Inflation \nConsumer prices across most AEs moderated, in response to the tight monetary \npolicy stance, declining energy prices and base effects. The effect of monetary \ntightening by most countries, which started manifesting in the first quarter of \n2023, became more pronounced in the second quarter. Lower crude oil \nprices, reduced consumer demand, reduction in global supply chain \ndisruptions, and the rate hikes cushioned inflationary pressures in most AEs. \nSpecifically, in the US, average inflation declined to 3.97 per cent from 5.81 \nper cent in the preceding quarter, due to the decline in energy prices, and the \nbase year effect. In Canada, average headline inflation fell to 3.53 per cent \nfrom 5.59 per cent in Q12023, as gasoline prices further declined, coupled \nwith base year effects. \nIn the euro area, inflationary pressures eased as average inflation fell in Spain, \nFrance, Germany, and Italy to 3.07, 4.70, 6.57, and 7.40 per cent in Q22023, \nrespectively, from 5.96, 6.00, 8.24, and 9.56 per cent in Q12023, due mainly \nto the slowdown in both energy and food prices, and base year effects. In the \nUK, consumer prices moderated to 8.43 per cent from 9.00 per cent in \nQ12023, due to a slump in energy prices. Inflationary pressures also \nmoderated in Japan, falling marginally to 3.30 per cent from 3.80 per cent in \nthe preceding quarter. \n44.4\n58.6\n48.8\n51.2\n51.0\n50.7\n58.6\n55.1\n55.43\n58.3\n50.37\n49.63\n51.47\n50.3\n50.1\n53.2\n53.2\n60.9\n51.5\n48.7\n51.8\n50.8\n51.9\n55.1\n0\n10\n20\n30\n40\n50\n60\n70\nCHINA\nINDIA\nTURKEY\nSOUTH\nAFRICA\nINDONESIA\nMEXICO\nBRAZIL\nRUSSIA\nQ22022\nQ12023\nQ22023\n50-point Benchmark\nAdvanced \nEconomies \n \n7 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nFigure 3: Headline Inflation in Selected Advanced Economies in Per cent \n \nSource: OECD, Trading Economics. \n \nInflationary pressures further moderated in most EMDEs, due to the fall in \ntransport, and energy costs and food prices. Notably, headline inflation in China \nfell to 0.10 per cent from 1.55 per cent in the preceding quarter, mainly driven \nby a decline in non-food prices. In Indonesia, consumer prices moderated to \n3.95 per cent from 5.24 per cent in the preceding quarter, settling at the \ncentral bank’s target due to a major drop in food prices. Similarly, in Brazil, \nheadline inflation fell to 3.76 per cent from 5.34 per cent in the previous \nquarter, falling below the central bank’s upper tolerance band of 4.75 per \ncent. The decline was primarily driven by a sharp fall in transportation costs. \nThe deceleration in energy costs, food prices, and non-alcoholic beverages \nreined in headline inflation in Mexico down to 5.72 per cent in Q22023 from \n7.46 per cent in the preceding quarter. In India, inflation fell to 4.59 per cent \nfrom 6.16 per cent in the preceding quarter as food prices eased. \nIn Turkey, inflation declined to 40.50 per cent from 54.46 per cent in Q12023, \nfollowing the implementation of unlimited free natural gas for all households \nfor a year. In Russia, the base year effects of the initial economic impact of \nRussia’s invasion of Ukraine pushed consumer prices down to 2.67 per cent \nfrom 8.77 per cent in Q12023. Similarly headline inflation in South Africa, fell \nto 6.17 per cent in Q22023, from 7.27 per cent in the previous quarter, with \nmoderate increase in the prices of food and non-alcoholic beverages and \ntransportation costs. \n \n \n8.57\n9.17\n2.47\n7.53\n7.63\n5.27\n7.10\n9.07\n5.81\n9.00\n3.8\n5.59\n8.24\n6.00\n9.56\n5.96\n3.97\n8.…\n3.30\n3.53\n6.57\n4.70\n7.40\n3.07\n0\n2\n4\n6\n8\n10\n12\nUnited\nStates\nUnited\nKingdom\nJapan\nCanada Germany France\nItaly\nSpain\nQ22022\nQ12023\nQ22023\nEmerging Markets \nand Developing \nEconomies \n \n8 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 4: Headline Inflation (year-on-year) in Selected EMDEs in Per cent \n \nSource: OECD, Trading Economics and Staff Computations. \n \n1.3 \nGlobal Financial Markets Development \nGlobal stocks and bonds markets experienced significant fluctuations in the \nsecond quarter, due to economic fundamentals and geopolitical tensions. \nSpecifically, shares gained in the quarter under review with the improvement \ndriven by the Advanced Economies, notably the US, while stocks of Emerging \nMarket Economies lagged. In the US, the S&P 500 and NASDAQ increased by \n7.6 and 3.4 per cent, respectively, compared to the preceding quarter, \nbenefiting from strong corporate earnings, fiscal stimulus measures and \nmoderating inflation. European markets displayed mixed trends, as the UK's \nFTSE 100 decreased by 2.0 per cent due to declines in the stock prices of \nenergy and basic materials groups, amid broad-based weakness in commodity \nprices and concerns over the outlook for the Chinese economy. \nStock indices in other European economies increased approximately by \n4.0 per cent, supported by improving economic indicators. Eurozone shares \nposted gains in Q22023, with the main gainers in the financial and IT sectors: \nthe financial sector performance was mainly driven by banks, following \nincreased near-term earnings, while IT was mainly boosted by semiconductor \nstocks demonstrating the growth potential stemming from Artificial \nIntelligence (AI). The strong momentum for Japanese shares accelerated in \nJune and the TOPIX index rose by 20.5 per cent within the review period as \nyen weakness, coupled with ongoing expectations of corporate governance \nreforms and structural shifts in the Japanese macroeconomy, supported a \nrisk-on mode particularly from foreign investors. \n2.23\n6.34\n74.02\n6.60\n3.79\n7.77\n11.92\n16.93\n1.55\n6.16\n54.46\n7.27\n5.24\n7.46\n5.34\n8.77\n0.10\n4.59\n40.50\n6.17\n3.95\n5.72\n3.76\n2.67\n0\n10\n20\n30\n40\n50\n60\n70\n80\nChina\nIndia\nTurkey\nSouth\nAfrica\nIndonesia Mexico\nBrazil\nRussia\nQ22022\nQ12023\nQ22023\n \n9 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nData from Reuters showed that EMDEs stocks exhibited mixed movements, \nas stocks performance improved in China and Mexico, but declined in Brazil, \nRussia, and India. The tension between the US and China, as well as China’s \nsluggish economic recovery, were contributory factors behind the \nunderperformance in EMDEs. Uncertainty surrounding the US debt ceiling \ncontributed to the negative sentiments at the beginning of the quarter, \nalthough this was resolved in early June 2023. Nevertheless, Chinese stocks \nsurged in Q22023 following the pledge by the government to support China’s \nrecovering economy. \n \nFigure 5: Key Global Stock Indices \n \nSource: Reuters Refinitiv Eikon. \n \nThe global bond market exhibited mixed movements, underpinned by risk-off \nsentiments. Government bond yields in the US surged by approximately 0.8 \npercentage point compared with the preceding quarter, reflecting concerns \nover inflation and expectations of tighter monetary policies by the Federal \nReserve (the Fed). European government bonds experienced mixed trends, \nwith safe-haven assets like German Bunds witnessing an increase in prices due \nto risk-off sentiment. In contrast, peripheral Eurozone bonds faced selling \npressure, leading to a decrease in their prices. Emerging market bonds \nexperienced volatility due to uncertainties surrounding economic \nfundamentals and geopolitical risks. Average yield on these bonds increased \nby 1.2 percentage points, leading to price decline. Specifically, Russian bond \nyield increased, following the dependence of the government on bonds to \nfinance its budget deficit. Bond yield, similarly, increased in Turkey following \nthe increase of policy rate. \n-10\n-5\n0\n5\n10\n15\n20\n25\nUS - S&P 500\nUS - Dow Jones\nUS - Nasdaq-100\nUK - FTSE100\nJapan - NIKKEI 225\nJapan - TOPIX\nCanada -\nEuro Area - EUROSTOCKS 50\nGermany - DAX\nFrance -\nItaly - FTSEMIB Index\nSpain - IBEX Index\nBrazil - BOVA11 BZ Equity\nRussia - MOEX RX\nIndia - BSE IN\nChina - shangai se\nSouth Africa - JALSH\nMexico - MEXBOL Index\nIndonesia - JCI Index\nTurkey - XU100\nPer cent (%)\nPercent change (2023Q1)\nPercent change (Q22023)\n \n10 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nFigure 6: 10-year Government Bond Yields for Selected Countries \n \nSource: Reuters Refinitiv Eikon. \n \nSelected emerging market currencies depreciated against the US dollar during \nthe review period. The Russian ruble and South African rand depreciated by \n9.7 and 5.0 per cent, respectively, relative to the levels in the preceding \nquarter. The depreciation of the Russian ruble was due to trade deficit, falling \nexport proceeds, and heightened foreign capital outflow, while the \ndepreciation of the South African rand was due to risk-off sentiments \nemanating from high volatility and idiosyncratic shocks. The Chinese RMB also \ndepreciated by 2.4 per cent due to global market sentiment, domestic factors \nlike shrinking current account surplus, and the expectation of continued two-\nway volatility in the yuan exchange rate. \n \nFigure 7: Unit of Currencies of Selected EMEs to the US Dollar \nSources: Central Bank Nigeria & Reuters. \n-2.00\n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\n14.00\nBrazil\nRussia\nIndia\nChina\nSouth Africa\nMexico\nIndonesia\nTurkey\nUnited States\nUnited Kingdom\nJapan\nCanada\nEuro Area\nGermany\nFrance\nItaly\nSpain\nEmerging and Developing Economies\nAdvanced Economies\nDec-22\nMar-23\n-20.00\n-10.00\n0.00\n10.00\n20.00\n30.00\n40.00\nChinese RMB\nNigerian Naira\nSouth African\nRand\nRussian Ruble\nDepreciation/Appreciation\nQ22022\nQ32022\nQ42022\nQ12023\nQ22023\nNaira against Emerging \nMarket Currencies \n \n11 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nTable 2: Currencies of Selected Emerging Markets Economies (EMEs) to the \nUS Dollar \nSources: Central Bank of Nigeria & Reuters. \n \n1.4 \nGlobal Commodity Market Developments \nWorld crude oil supply rose due to increased production from OECD and other \nnon-OECD countries. Total world crude oil supply increased by 0.3 per cent \nto 101.34 million barrels per day (mbpd), from 101.06 mbpd in the preceding \nquarter. This rise was driven, largely, by increased supply from OECD \ncountries, particularly in Mexico, where supply rose by 0.05 mbpd to \n2.12 mbpd, on account of increased offshore oil drilling. In addition, other \nnon-OECD’s supply also increased by 0.63 mbpd to 14.96 mbpd in Q22023. \nOPEC’s crude oil supply fell by 0.2 per cent to 28.40 mbpd in Q22023, from \n28.46 mbpd in the preceding quarter. The decline was due, mainly, to the \nvoluntary production adjustment by Saudi Arabia, Iraq, United Arab Emirates \n(UAE), Kuwait, Algeria and Gabon. \nOn the demand side, total world demand rose by 0.8 per cent to 100.81 \nmbpd in Q22023, from 99.98 mbpd in the preceding quarter, which was \nmainly from China, following the rebound in economic activities. \nCrude oil spot prices fell, as uncertainties surrounding global economic \nslowdown, as well as, higher global supply, particularly, from the US and \nMexico. The average spot price of Nigeria’s reference crude oil, the Bonny \nLight (34.9° API), fell by 4.9 per cent to US$79.78 per barrel (pb) from \nUS$83.86pb in the preceding quarter. The prices of Brent stood at \nUS$78.93pb, Forcados US$80.13 pb; WTI US$74.39pb; and OPEC Reference \nBasket US$78.17pb; indicative of similar trends as the Bonny Light. \n \n \n \n \n \nPeriod \nChinese \nRMB \nNigerian \nNaira \nSouth \nAfrican \nRand \nRussian \nRuble \nQ2 2022 \n6.62 \n415.71 \n15.57 \n67.59 \nQ1 2023 \n6.85 \n460.93 \n17.76 \n73.30 \nQ2 2023 \n7.01 \n511.23 \n18.70 \n81.20 \nWorld Crude Supply and \nDemand \nCrude Oil Prices \n \n12 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 8: Quarterly Crude Oil Prices (US$ per barrel) \n \nSource: Reuters Data, CBN Staff Compilation. \n \nThe all-commodity price index increased, due primarily to weather conditions \nand supply bottlenecks. Consequently, the average price index of all monitored \ncommodities was 125.5 points, reflecting a 1.6 per cent rise, compared with \nthe 123.6 points recorded in the preceding quarter, but a decline of 16.9 per \ncent, compared with the 150.9 recorded in the corresponding period of 2022. \nThe rise in the index was driven by the increase in the prices of coffee, cocoa, \nand groundnut which rose by 20.8, 12.3, and 3.5 per cent, respectively. \nOn the other hand, the prices of soya beans, wheat, palm oil, and rubber \ndecreased by 5.5, 5.0, 4.7, 3.8, and 3.4 per cent, respectively, largely on the \nback of adequate supply of these commodities. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0\n20\n40\n60\n80\n100\n120\n140\nQ22022\nQ32022\nQ42022\nQ12023\nQ22023\nBonny Light\nBrent\nForcados\nWTI\nOpec Basket\nAgricultural \nCommodity Prices \n \n13 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nTable 3: Indices of Average World Prices of Nigeria's Major Agricultural Export \nCommodities in Q22023 (Dollar Based) (Jan. 2010=100) \nCOMMODITY \nQ22022 \nQ12023 \nQ22023 \n% Change \n(1) & (3) \n(2) & (3) \n \n1 \n2 \n3 \n4 \n5 \nAll Commodities \n150.9 \n123.6 \n125.5 \n-16.9 \n1.6 \nCocoa \n67.6 \n75.9 \n85.2 \n26.2 \n12.3 \nCotton \n203.8 \n127.1 \n120.7 \n-40.8 \n-5.0 \nCoffee \n147.8 \n145.7 \n176.1 \n19.1 \n20.8 \nWheat \n244.7 \n189.7 \n180.8 \n-26.1 \n-4.7 \nRubber \n54.4 \n45.8 \n44.2 \n-18.7 \n-3.4 \nGroundnut \n125.7 \n143.6 \n148.6 \n18.2 \n3.5 \nPalm Oil \n196.6 \n114.9 \n110.6 \n-43.8 \n-3.8 \nSoya Beans \n166.9 \n145.8 \n137.8 \n-17.4 \n-5.5 \nSources: (1 & 2) World Bank Pink Sheet (3) Staff Estimates. \n \nAverage spot prices of gold, silver, platinum, and palladium decreased in \nQ22023 as demand for precious metals fell. The average spot prices of gold \nand silver declined by 0.3 and 5.9 per cent, quarter-on-quarter, to \nUS$1,872.98 per ounce and US$22.61 per ounce, compared with \nUS$1,878.12 per ounce and US$24.02 per ounce, respectively, recorded in the \npreceding quarter. The decline was due to interest rate hike by major central \nbanks to combat inflation, which made treasury bonds more attractive as an \ninvestment asset. \n \nThe prices of platinum and palladium fell by 6.8 and 10.2 per cent to \nUS$957.26 per ounce and US$2,088.12 per ounce in Q22023, from \nUS$1,026.61 per ounce and US$2,325.43 per ounce, respectively, recorded in \nthe preceding quarter. The prices declined due to falling demand from the \nauto industry, where both metals are used as auto catalyst to reduce pollution \nin automobiles. \n \n \n \n \n \n \n \n \n \nOther Mineral \nCommodity Prices \n \n14 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 9: Price Changes in Selected Metals (%) for Q22023 \nSource: Refinitiv Eikon (Reuters). \n \n1.5 \nMonetary Policy Stance \nIn Q22023, central banks around the world sustained efforts to strike a \nbalance between supporting economic growth and managing inflationary \npressures. Among the Advanced Economies, the European Central Bank (ECB) \nand the Bank of Japan kept the policy rate unchanged, while the US Federal \nReserve (Fed), the Bank of Canada and the Bank of England increased rates \nwithin the reporting period. Specifically, the retention of the policy rate at \n3.75 per cent by the ECB was to sustain its emerging economic trends. \nSimilarly, the Bank of Japan maintained its negative interest rate to support \neconomic recovery and prop-up inflation. The US Fed hiked the policy rates \nby 8 basis points to 5.17 per cent to address inflationary pressures. Also, the \nincrease in the interest rates in UK and Canada by 0.08 and 0.25 percentage \npoint, respectively, were in a bid to address surging inflation and concerns \nabout rising housing prices. \nIn EMDEs, several economies such as Indonesia, India, Mexico, Brazil, and \nGhana held their policy rates at 5.75, 6.50, 11.50, 13.75, and 29.5 per cent, \nrespectively. The People’s Bank of China slightly reduced policy rate to \nstimulate economic growth, amid external and domestic challenges. Central \nbanks in Turkey, Russia and Kenya raised their rates to contain surging \ninflation and stabilise the local currency. The South African Reserve Bank \nreduced rates by 0.17 percentage point from Q12023 to 8.08 per cent in \nQ22023, to support the economy. \n \n \n-0.3\n-5.9\n-6.8\n-10.2\n-5.2\n-6.5\n-6.4\n45.0\nGold\nSilver\nPlatinum\nPalladium\nWith corresponding quarter\nWith preceding quarter\n \n15 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nTable 4: Policy Rates of Selected Central Banks in Per cent \nCountry \nQ42022 \nQ12023 \nQ22023 \nUnited States \n5.00 \n5.25 \n5.17 \nCanada \n4.50 \n4.50 \n4.75 \nEuro Area \n3.50 \n3.75 \n3.75 \nUnited Kingdom \n4.25 \n4.50 \n4.58 \nJapan \n-0.10 \n-0.10 \n-0.10 \nBrazil \n13.75 \n13.75 \n13.75 \nRussia \n7.50 \n7.50 \n7.83 \nIndia \n6.50 \n6.50 \n6.50 \nChina \n3.65 \n3.65 \n3.62 \nSouth Africa \n7.75 \n8.25 \n8.08 \nMexico \n11.25 \n11.25 \n11.25 \nIndonesia \n5.75 \n5.75 \n5.75 \nTurkey \n8.50 \n8.50 \n13.67 \nKenya \n9.50 \n9.50 \n9.83 \nGhana \n29.50 \n29.50 \n29.50 \nSource: Various Central Banks’ websites, Trading Economics. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n16 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n2.0 DOMESTIC ECONOMIC DEVELOPMENTS \n2.1 Real Sector Developments \nThe country witnessed sustained growth in Q22023, due mainly to the \ncontribution from the non-oil sector, following sustained investment in \ninformation and communication, and financial services. Consequently, real \nGDP grew by 2.51 per cent (year-on-year) to ₦17.72 trillion, from \n2.31 per cent recorded in the preceding quarter. Headline inflation rose \nfurther to 23.79 per cent from 22.04 per cent in the preceding quarter on \naccount of recent market-based reforms namely, the fuel subsidy removal \nand introduction of market determined exchange rate which impacted \nnegatively on production, transport and logistics cost. Also, expectations of \nfurther rise in prices contributed to inflationary pressures. \n \nEconomic growth was sustained in Q22023, driven mainly, by the activities in \nthe non-oil sector. The growth momentum was supported by increased \ninvestments, especially, in information & communication, and financial \nservices. Consequently, real GDP grew by 2.51 per cent in Q22023 y-o-y \ncompared with 2.31 per cent in Q12023, driven by the non-oil sector, which \ngrew by 3.58 per cent and contributed 3.36 percentage points to overall GDP \ngrowth. The oil sector, however, dragged overall growth, with a negative \ncontribution of 0.85 percentage points and contracted further by \n13.43 per cent, compared with the growth of 4.21 per cent recorded in the \npreceding quarter. The contraction was on account of the decline in crude oil \nproduction to 1.14 million barrels per day (mbpd) from 1.28 mbpd produced \nin 2023Q1. Moreso, subsisting infrastructural and security challenges \ncontinued to weigh on the sector’s output. \n \nFigure 10: Real GDP Growth Rate (year-on- year) \nSource: National Bureau of Statistics. \n \n-30\n-25\n-20\n-15\n-10\n-5\n0\n5\n10\nQ22021 Q32021 Q42021 Q12022 Q22022 Q32022 Q42022 Q12023 Q22023\nPercent (%)\nOil GDP\nNon-oil GDP\nTotal GDP\nDomestic Output and \nEconomic Activities \nSummary \n \n17 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n2.1.1 Sectoral Performance \nThe Services and Agriculture sectors grew, while the industry sector contracted \nin Q22023. The services sector continued to drive growth, contributing \n2.54 percentage points to the realised growth. The sector grew at a faster \npace by 4.42 per cent in Q22023, compared with 4.35 per cent in Q12023. It \nalso remained the most dominant sector, accounting for 58.42 per cent of \naggregate GDP. \n \nFigure 11: Sectoral Growth Rate of Real GDP in Per cent \nSource: National Bureau of Statistics. \n \nWithin the Services sector, Information & Communications, Financial & \nInsurance and Trade subsectors, grew by 8.60, 26.84 and 2.41 per cent, \ncontributing 1.59, 1.14 and 0.41 percentage points, respectively, to the \ngrowth outcome. The growth witnessed in the ICT subsector was due majorly \nto the continued investment in deploying the fifth generation (5G) broadband \nservices by telecom companies nationwide. Although, its contribution to \ngrowth was slower compared with the preceding quarter owing to a drop \nin active subscribers by 6,074,762, or 2.69 per cent, due to the continuous \nimplementation of the Nigeria Communication Commission’s (NCC) policy on \nthe integration of phone lines to National Identity Numbers (NINs). Also, the \nincreased patronage of fintech services following improvement in the \npayments ecosystem continued to contribute to the growth in the services \nsector. \nThe agriculture sector grew by 1.50 per cent, compared with a contraction \nof 0.90 per cent witnessed in the preceding quarter, contributing 0.35 \npercentage points to the overall growth. This was occasioned by the \ncontinued improvement in crop production and the rebound in fishing \nactivities. Crop production, forestry and fishery subsectors grew by 1.82, 1.88, \n1.30\n1.22\n3.58\n3.16\n1.20\n1.34\n2.05\n-0.90\n1.50\n-1.23\n-1.63\n-0.05\n-6.81\n-2.30\n-8.00\n-0.94\n0.31\n-1.94\n9.27\n8.41\n5.58\n7.45\n6.70\n7.01\n5.69\n4.35\n4.42\n-10.00\n-8.00\n-6.00\n-4.00\n-2.00\n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\nQ22021 Q32021 Q42021 Q12022 Q22022 Q32022 Q42022 Q12023 Q22023\nAgriculture\nIndustry\nServices\nTotal GDP\n \n18 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nand 0.29 per cent, compared with a growth of 1.93, 1.24, and a contraction of \n2.92 per cent in Q12023, respectively. The livestock subsector, however, \ncontracted by 2.30 per cent compared with a contraction of 30.57 per cent \nin Q12023. \nThe industry sector contracted by 1.94 per cent in Q22023, compared with a \ngrowth of 0.31 per cent in Q12023. The dwindling performance in the \nindustrial sector was mirrored the index of industrial production (IIP), which \ndecreased by 9.7 per cent to 91.9 points (2010=100) in Q22023, from \n101.8 index points in the previous quarter. The overall performance of the \nsector was impeded by the contraction in the mining and quarrying subsector \n(-12.16 %). This is also mirrored by the Index of mining production, which fell \nto 49.6 index points in Q22023, indicating a decline of 13.0 per cent, \ncompared with 57.0 index points in the preceding quarter. This was attributed \nlargely to decrease in crude oil production, due to the shutdown of production \nactivities following the industrial action embarked upon by Exxon Mobil \nworkers. The manufacturing subsector grew by 2.20 per cent, y-o-y, as shown \nin the rise in Index of Manufacturing Production by 2.2 per cent (year-on-year) \nto 173.5 index points in Q22023, from 164.8 points in the preceding period. \nLikewise, the estimated average manufacturing capacity utilisation increased \nby 0.2 percentage points to 54.9 per cent in Q22023, from 54.7 per cent in \nthe preceding period. Growth was also recorded in electricity (6.10 %), \nwater supply (20.56 %) and construction (3.42 %) subsectors. \n \nFigure 12: Top 13 Subsectors with the Largest Contribution (Percentage point) \nto GDP Growth and their Growth Rates (%) in Q22023 \n \nSource: National Bureau of Statistic. \n \n0.02\n0.04\n0.05\n0.05\n0.07\n0.09\n0.10\n0.11\n0.19\n0.38\n0.41\n1.14\n1.59\n(1.42%) Education\n (6.10%) Electricity,Gas,Steam & Air…\n(1.69%) Other Services\n (2.18%) Public Administration\n (20.58%) Water supply, sewage, waste…\n(2.89%) Professional, Scientific &…\n(1.87%) Real Estate\n(3.42%) Construction\n(2.20) Manufacturing\n(1.82%) Crop Production\n(2.41%) Trade\n(26.84%) Financial and Insurance\n (8.60%) Information and Communication\n \n19 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nFigure 13: Subsectors with the Least Contributions (Percentage point) to GDP \nGrowth and their Growth Rates (%) in Q22023 \nSource: National Bureau of Statistics. \n \n2.1.2 Consumer Prices \nHeadline inflation rose further in Q22023, on the back of the removal of \nPMS subsidy, and the exchange rate reform policy. The increase was due \nto the recent market-based reforms such as the fuel subsidy removal and \nintrodution of market determined exchange rate which impacted negatively \non production, transport and logistics cost. Also, expectations of a further rise \nin prices contributed to inflationary pressures. Thus, headline inflation rose y-\no-y to 22.79 per cent in Q22023 compared with 22.04 per cent in Q12023. \n \nFigure 14: Headline, Food and Core Inflation (year-on-year) in Per cent \n \nSource: National Bureau of Statistics. \n \nCore inflation inched up to 20.27 per cent compared with 19.86 per cent in \nthe preceding quarter. The rise was due to accompanying increase in the \n-0.04\n-0.79\n-0.93\nLivestock (-2.30%)\n Mining and Quarrying (-12.16%)\nTransportation and Storage (-50.64%)\n0.00\n5.00\n10.00\n15.00\n20.00\n25.00\n30.00\nPercent (%)\nHeadline\nCore\nFood\nHeadline \nInflation \nCore \nInflation \n \n20 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nprices of imported items, following the recent reform in foreign exchange \nmarket and other subsisting structural factors such as insecurity and \ninfrastructural deficit. \nFood inflation similarly rose to 25.25 per cent in Q22023 from 24.45 per cent \nin the preceding quarter. This rise was largely due to seasonal effects and the \nripple effects of fuel subsidy removal reflected in high transportation/logistics \ncosts. \n \n2.1.3 Socio-Economic Developments \nIn a bid to encourage easy access to education and provide succour to \nstudents that are less privileged, a legislation which seeks to provide a soft \nloan to Nigerian students in tertiary institutions was signed into law by the \nFederal Government. The legislation provides for the establishment of the \nNigerian Education Loan Fund, which will have the power to administer, \nsupervise, coordinate, and monitor the management of student loans in the \ncountry. The legislation allows Nigerian students in tertiary institutions to \naccess interest-free loans from the Nigerian Education Loan Fund. \nAs a way of improving the business environment and promoting seamless \ntransaction and financial inclusion, a legal framework for data protection was \nsigned into law by the President. The Data Protection Act would help in the \nregulation and processing of personal data, promoting data processing \npractices that safeguard the security of personal data and privacy of data \nsubjects, that ensured that personal data is processed in a fair, lawful and \naccountable manner. \n \n2.1.4 Domestic Crude Oil Market Developments \nThe energy sector witnessed a decline in electricity and crude oil production \ndue to legacy infrastructure challenges in the upstream sector. Electricity \ngeneration fell resulting from limited gas supply and low water level from \nhydrogeneration plants, higher costs for upgrade and the beaurocratic \nmaintenance of generation network. There was, however, an increase in \nelectricity consumption due to improvement in transmission network as \nenergy loss declined. The average electricity consumption at 3,601.44, \nincreased by 3.1 per cent in Q22023, relative to 3,494.16 MW/h in the \npreceding quarter. Contrastingly, the average electricity generation in \nQ22023 at 4,058.93 MW/h, decreased by 6.2 per cent, compared with \n4,327.77 MW/h in Q12023. \n \nFood \nInflation \nEducation \nConsumer \nProtection \nElectricity Generation and \nConsumption \n \n21 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nCrude oil export declined, quarter-on-quarter, as a result of reduced \nproduction and force majeure on crude oil liftings by Exxon Mobil, following \nan industrial action by its in-house workers union. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCrude Oil Production \nand Export \nBox Information 1☹) \nThe average price of monitored domestic farm produce increased in Q22023 \nrelative to their levels in the previous quarter. The price spike varied between 3.4 \nper cent for onions and 9.7 per cent for white garri. This increase was primarily \ninfluenced by two factors: the high cost of energy (PMS), which intensified \npressure on transportation and logistics, and the ongoing security challenges, \nparticularly in the producing regions. \n \n \nDomestic Prices of Selected Agricultural Commodity Prices in Second Quarter \n2023 \n \n \n \n \n \n \n \n \n \nQ22022 \nQ12023 \nQ22023 \n% \nChange \n% \nChange \n \nUNIT \n1 \n2 \n3 \n(1) & (3) \n(2) & (3) \nAgric eggs medium size \n1kg \n690.9 \n870.3 \n945.2 \n36.8 \n8.6 \nBeans: brown, sold loose \n\" \n539.6 \n595.0 \n632.2 \n17.1 \n6.2 \nBeans: white black eye, sold loose \n\" \n526.6 \n575.2 \n602.3 \n14.4 \n4.7 \nGari white, sold loose \n\" \n326.0 \n345.5 \n379.0 \n16.3 \n9.7 \nGari yellow, sold loose \n\" \n344.6 \n382.7 \n410.2 \n19.0 \n7.2 \nGroundnut oil: 1 bottle, specify bottle \n\" \n1037.2 \n1273.4 \n1345.2 \n29.7 \n5.6 \nIrish potato \n\" \n460.7 \n550.6 \n592.0 \n28.5 \n7.5 \nMaize grain white, sold loose \n\" \n314.9 \n337.5 \n358.7 \n13.9 \n6.3 \nMaize grain yellow, sold loose \n\" \n312.6 \n343.0 \n365.7 \n17.0 \n6.6 \nOnion bulb \n\" \n387.3 \n447.0 \n462.1 \n19.3 \n3.4 \nPalm oil: 1 bottle, specify bottle \n\" \n853.7 \n1065.6 \n1130.2 \n32.4 \n6.1 \nRice agric, sold loose \n\" \n507.1 \n604.7 \n649.7 \n28.1 \n7.4 \nRice local, sold loose \n\" \n458.8 \n521.9 \n570.0 \n24.2 \n9.2 \nRice, medium grained \n\" \n501.3 \n586.8 \n630.8 \n25.8 \n7.5 \nRice, imported high quality, sold \nloose \n\" \n622.7 \n751.7 \n804.8 \n29.2 \n7.1 \nSweet potato \n\" \n236.8 \n277.0 \n300.7 \n27.0 \n8.6 \nTomato \n\" \n429.5 \n467.2 \n510.2 \n18.8 \n9.2 \nVegetable oil: 1 bottle, specify bottle \n\" \n998.6 \n1200.3 \n1274.9 \n27.7 \n6.2 \nWheat flour: prepackaged (Golden \nPenny) \n2kg \n1065.0 \n1253.0 \n1330.3 \n24.9 \n6.2 \nYam tuber \n1kg \n372.6 \n436.9 \n470.9 \n26.4 \n7.8 \nSources: National Bureau of Statistics \n \n \n22 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n2.2 \nFiscal Sector Developments \nThe fiscal performance improved following a contraction in the overall deficit, \ndue to improved revenue outturns and lower expenditure. Federally collected \nrevenue in Q22023, fell by 8.4 per cent relative to the level in the preceding \nquarter and was lower than the benchmark by 39.7 per cent. Though, FGN \nretained revenue improved by 8.2 per cent compared with Q12023, it was below \nthe quarterly target by 45.3 per cent. Provisional FGN expenditure dipped by \n26.6 per cent relative to the level in Q12023 and fell short of the target by 23.5 \nper cent. Consequently, overall deficit contracted by 37.9 per cent relative to the \npreceding quarter. At ₦87,379.40 billion or 42.3 per cent of GDP, total public \ndebt, at end-June 2023, remained within the 40.0 per cent domestic threshold. \n2.2.1 Federation Account Operations \nFederation Account earnings declined, due to the shortfall in earnings from oil \nsources. At N3,192.47 billion, gross federation revenue was below the level in \n2023Q1 by 8.4 per cent. Similarly, it fell short of the budget benchmark of \nN5,293.66 billion by 39.7 per cent. Non-oil revenue continued to dominate \ngovernment revenue, accounting for 74.7 per cent, while oil receipts \naccounted for 25.3 per cent. \nA disaggregation of Federation Account Revenue indicates that oil revenue, at \nN809.02 billion, fell by 39.7 per cent relative to Q12023 and was below the \nquarterly target by 66.4 per cent. The sub-optimal performance was indicative \nof revenue shortfalls from Petroleum Profit Tax and Royalties, following lower \ndomestic crude oil production. \nConversely, at N2,383.45 billion, non-oil receipts improved by 11.1 per cent \nrelative to the preceding quarter but was 17.3 per cent short of the quarterly \ntarget of N2,882.76 billion. The improvement was attributed to strong \nperformance of receipts from Corporate Tax and FGN Independent Revenue, \nwhich exceeded collections in the preceding quarter by 15.4 and \n42.9 per cent, respectively. Generally, non-oil revenue performance in the \nquarter, mirrored seasonality in tax returns. \n \n \n \n \n \n \n \nSummary \nDrivers of Federation \nRevenue \n \n23 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nTable 5: Federally Collected Revenue and Distribution (N Billion) \n \nQ22022 \nQ12023 1/ \nQ22023 1/ \nBudget \nFederation Revenue (Gross) \n3,245.97 \n3,485.86 \n3,417.45 \n5,293.66 \nOil \n1,296.24 \n1,341.12 \n809.02 \n2,410.89 \nCrude Oil & Gas Exports \n0.00 \n0.00 \n0.00 \n122.71 \nPPT & Royalties \n1,096.70 \n1,324.70 \n779.41 \n2,060.26 \nDomestic Crude Oil/Gas Sales \n176.42 \n0.00 \n0.00 \n25.15 \nOthers \n23.11 \n16.42 \n29.61 \n202.78 \nNon-oil \n1,949.73 \n2,144.74 \n2,608.43 \n2,882.77 \n Corporate Tax \n625.94 \n546.20 \n630.40 \n523.17 \n Customs & Excise Duties \n403.65 \n389.67 \n381.82 \n528.97 \n Value-Added Tax (VAT) \n611.51 \n741.32 \n706.73 \n738.44 \n Independent Revenue of Fed. Govt. \n299.84 \n458.75 \n880.68 \n792.27 \nOthers* \n8.79 \n8.80 \n8.80 \n299.92 \nTotal Deductions/Transfers** \n1,309.17 \n1,331.87 \n1,395.43 \n2,058.22 \nFederally Collected Revenue \n1,936.80 \n2,153.99 \n2,022.03 \n3,235.44 \nLess Deductions & Transfers \nplus: \n \n \n \n \nAdditional Revenue \n106.16 \n309.05 \n164.69 \n34.09 \n Balance in Special Account from 2019 \n0.00 \n0.00 \n0.00 \n0.00 \nExcess Crude Revenue \n0.00 \n0.00 \n0.00 \n0.00 \nNon-oil Excess Revenue \n106.16 \n164.21 \n94.05 \n34.09 \nExchange Gain \n0.00 \n144.84 \n70.64 \n0.00 \nTotal Distributed Balance \n2,042.96 \n2,463.04 \n2,186.72 \n3,269.53 \n Federal Government \n753.74 \n929.60 \n837.50 \n1291.10 \n Statutory \n668.33 \n826.06 \n738.94 \n1188.49 \n VAT \n85.42 \n103.55 \n98.56 \n102.61 \n State Government \n800.23 \n954.47 \n812.80 \n1264.32 \n Statutory \n380.22 \n439.85 \n400.26 \n617.27 \n VAT \n284.72 \n345.16 \n328.53 \n342.05 \n 13% Derivation \n135.30 \n169.46 \n84.01 \n305.00 \n Local Government \n488.98 \n578.97 \n536.42 \n714.11 \n Statutory \n289.68 \n337.36 \n306.45 \n474.68 \n VAT \n199.30 \n241.61 \n229.97 \n239.43 \nSource: OAGF and CBN Staff Estimates. \n Note: * Includes Education Tax, Customs Special Levies (Federation Account), National Technology \nDevelopment, Customs Special Levies, Solid Mineral & Other Mining revenue, and other non-regular \nearnings; ** Deductions include cost of revenue collections and JVC cash calls; while transfers entail \nprovisions for FGN Independent revenue and other Non-Federation revenue. \n \n24 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nA net distributable balance of ₦2,186.72 billion was disbursed to the three \ntiers of government, after accounting for statutory deductions and transfers. \nOf this amount, the Federal Government got ₦837.50 billion, while State and \nLocal governments received ₦728.79 billion and ₦536.42 billion, respectively. \nThe balance of ₦84.01 billion was distributed to oil-producing states as \n13.0 per cent Derivation Fund. Total disbursement to the federating units was \n11.2 and 33.1 per cent, below the sharing in Q12023 and the quarterly target, \nrespectively. \n \n2.2.2 Fiscal Operations of the Federal Government \nThe retained revenue of the FGN improved, largely, on account of higher \nreceipts from FGN Independent Revenue. Estimated retained revenue of the \nFGN, at ₦1,510.89 billion, was 8.2 per cent above receipts in Q12023, but \n45.3 per cent below the quarterly target. The development was attributed to \nthe 42.9 per cent increase in collections from the FGN Independent Revenue \non account of higher receipts of Internally Generated Revenue (IGR) from \nMinistries, Departments and Agencies (MDAs), relative to the preceding \nquarter. \n \nTable 6: FGN Retained Revenue (₦ Billion) \n \n \nQ22022 \nQ12023 \nQ22023 \nBudget \n FGN Retained Revenue \n \n1,225.79 \n1,395.24 \n1,510.89 \n2,761.28 \nFederation Account \n649.05 \n691.53 \n678.26 \n1070.84 \nVAT Pool Account \n85.42 \n103.55 \n98.56 \n95.77 \nFGN IR \n \n299.84 \n458.75 \n880.68 \n792.27 \nExcess Oil Revenue \n0.00 \n0.00 \n0.00 \n0.00 \nExcess Non-Oil \n19.27 \n67.96 \n26.92 \n0.00 \nExchange Gain \n0.00 \n66.56 \n33.76 \n0.00 \nOthers* \n \n172.21 \n6.89 \n14.88 \n802.40 \nSource: Office of the Accountant-General of the Federation (OAGF). \nNote: * Others include revenue from Special Accounts, Special Levies and share of dividend. \nThe Budget figures are provisional, IR = Independent Revenue. \n \nProvisional aggregate expenditure of the FGN fell following a decline in capital \nexpenditure and transfers. The provisional aggregate expenditure of the FGN \nin Q22023, at ₦4,174.79 billion was below the level in the preceding quarter \nby 26.6 per cent and also fell short of the quarterly target by 23.5 per cent. A \ndecomposition of FGN spending revealed that recurrent expenditure, capital \nFederal Government \nRetained Revenue \nFederal Government \nExpenditure \n \n25 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nexpenditure, and transfers accounted for 74.0, 21.0 and 5.0 per cent, \nrespectively. \n \nFigure 15: Federal Government Expenditure (N Billion) \nSource: Office of the Accountant-General of the Federation (OAGF) and CBN Staff Estimates. \n \nThe fiscal operations of the FGN, resulted in a contraction in the overall deficit, \non account of improved revenue outturns and lower expenditure. At ₦2,664.70 \nbillion, the provisional fiscal deficit of the FGN in Q22023 was 37.9 per cent \nlower than the level in the preceding quarter and 1.1per cent below the \nquarterly target. \n \nTable 7: Fiscal Balance (N Billion) \n \nQ22022 \nQ12023 \nQ22023 \nBudget \nRetained revenue \n1,225.79 \n1,395.24 \n1,733.06 \n2,761.28 \nAggregate expenditure \n3,467.17 \n5,688.39 \n4,511.09 \n5,456.80 \n Recurrent \n2,691.99 \n3,620.41 \n3,727.57 \n3,721.74 \n Non-debt \n1,340.08 \n1,303.67 \n1,599.40 \n2,082.34 \n Debt Service \n1,351.90 \n2,316.74 \n2,128.17 \n1,639.40 \n Capital \n572.62 \n1,798.95 \n577.61 \n1493.18 \n Transfers \n202.57 \n269.03 \n205.91 \n241.87 \nPrimary balance \n-889.48 \n-1,976.41 \n-649.85 \n-1,056.12 \nOverall balance \n-2,241.38 \n-4,293.15 \n-2,778.02 \n-2,695.52 \nSource: Office of the Accountant-General of the Federation (OAGF) and CBN Staff Estimates \nNote: The figures are provisional. \n \n3,467.17 \n5,688.39 \n4,511.09 \n5,456.80 \n2,691.99 \n3,620.41 \n3,727.57 \n3,721.74 \n572.62 \n1,798.95 \n577.61 \n1,493.18 \n202.57 \n269.03 \n205.91 \n241.87 \n0\n1,000\n2,000\n3,000\n4,000\n5,000\n6,000\n2022Q2\n2023Q1\n2023Q2\nBudget\nAggregate Expenditure\nRecurrent\nCapital\nTransfers\nOverall Fiscal Balance \n \n26 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nThe public debt profile of the FGN remained anchored on the 2020-2023 MTDS1. \nTotal public debt outstanding, which comprises of the obligations of Federal \nand state governments, at end-June 2023, stood at ₦87,379.40 billion or 42.3 \nper cent of the GDP, representing an increase of 103.9 and 75.3 per cent, \nabove the levels at end-June 2022 and end-March 2023, respectively. The \nincrease was attributed to exchange rate revaluation and restructuring of FGN \nWays and Means Advances. The consolidated debt stock of the Federal \nGovernment (including state governments’ external debt - a contingent \nliability of the FGN) was ₦81,563.72 billion or 39.5 per cent of the GDP, while \nstate governments’ domestic debt stock accounted for the balance of \n₦5,815.68 billion or 2.8 per cent of the GDP. \nA breakdown of the FGN debt showed that domestic debt was \n₦48,314.74billion (59.2%), while external debt stood at ₦33,248.98 billion \n(40.8%) or US$43.16 billion. FGN Bond maintained dominance in domestic \ndebt portfolio, accounting for 86.9 per cent, followed by Treasury Bills (9.8%), \nPromissory Notes (1.6%), FGN Sukuk (1.5%), and others2 (0.2%). \n \nFigure 16: FGN External and Domestic Debt (N Billion) \nSource: Debt Management Office (DMO). \nHoldings of Nigeria’s external debt showed that Multilateral, Commercial and \nBilateral loans accounted for 48.2, 36.2 and 12.8 per cent, respectively, while \n‘other’ loans3 constituted 2.8 per cent. \n \n \n1 The MTDS stipulates a debt-to-GDP threshold of 40.0 per cent, and 70:30 domestic-external debt \nportfolio mix, among other sustainability considerations \n2 Composed of Treasury Bonds (0.11 %), Green Bonds (0.03 %) and FGN Savings Bond (0.06 %) \n3 Includes Promissory notes (2.1 %) and Syndicated loans, arranged by the AFC (0.7 %). \n33,805.8 35,097.8 36,761.2 37,564.6 38,700.5 40,912.6 \n44,374.7 \n81,563.7 \n -\n 10,000.0\n 20,000.0\n 30,000.0\n 40,000.0\n 50,000.0\n 60,000.0\n 70,000.0\n 80,000.0\n 90,000.0\nQ32021 Q42021 Q12022 Q22022 Q32022 Q42022 Q12023 Q22023\nExternal Debt\nDomestic Debt\nTotal Debt\nFederal \nGovernment Debt \n \n27 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nDebt service obligations in Q22023, amounted to ₦754.15 billion, compared \nwith ₦1,243.50 billion in Q12023. The decrease was attributed to refinancing \nof matured FGN Bonds and Treasury Bills. \n \nFigure 17: Composition of Domestic Debt Stock in Per cent \nSource: Debt Management Office. \n \n \n \n \n Figure 18: Composition of External Debt Stock in Per cent \nSource: Debt Management Office. \n \n2.3 \nMonetary and Financial Developments \nThe Bank's hawkish policy stance, coupled with consistent supervision and \nimplementation of prudential guidelines, ensured the safety, stability, and \nresilience of the financial sector. Key monetary aggregates grew significantly \nabove the levels in the preceding quarter, driven by increased credit expansion \nto key sectors of the economy and the effect of exchange rate reforms. The \ntrend in key short-term interest rates was influenced by both the hike in the \nMultilateral\n48.2%\nCommercial\n36.2%\nBilateral \n12.8%\nOthers\n2.8%\nSummary \nFGN Bonds\n86.9%\nTreasury Bills\n9.8%\nPromisory Notes\n1.6%\nFGN Sukuk\n1.5%\nOthers\n0.2%\n \n28 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nmonetary policy rate (MPR) and the relative decline in liquidity. Banking \nsystem liquidity moderated, leading to reduced subscription in NTBs and FGN \nbonds. Furthermore, the removal of fuel subsidy and the exchange rate \nreforms generated positive sentiments and triggered bullish activities in the \ncapital market. \n \n2.3.1 Monetary Developments \n Reserve money grew by 8.2 per cent in Q22023, due to the rise in liabilities to \nthe other depository corporations (ODCs) which outweighed the moderation in \ncurrency-in-circulation (CIC). Liabilities to ODCs rose by 13.2 per cent, \npropelled by the 18.9 per cent growth in required reserves as deposit liabilities \nincreased. Currency-in-circulation on the other hand fell by 13.6 per cent. \nConsequently, reserve money grew to ₦17,339.25 billion in the second \nquarter of 2023, compared with ₦15,975.74 billion recorded in the first \nquarter of 2023. \n \nTable 8: Components of Reserve Money (N Billion) \n \n \nJun-22 \nSep-22 \nDec-22 \nMar-23 \nJun-23 \nReserve Money \n \n13,860.26 \n15,007.59 \n16,032.96 \n15,975.74 \n17,339.25 \nCurrency-in-Circulation \n \n3,255.56 \n3,228.75 \n3,012.05 \n1,683.50 \n2,603.27 \n of which: \n \n \n \n \n \n \n Notes and Coins \n \n3,254.21 \n3,227.27 \n3,009.50 \n1,678.66 \n2,596.11 \n eNaira \n \n1.35 \n1.48 \n2.55 \n4.84 \n7.16 \n Liabilities to ODCs \n \n10,604.70 \n11,778.84 \n13,020.91 \n14,292.24 \n14,735.98 \nReserve Money (% \nGrowth over Preceding \nDecember) \n \n \n4.25 \n \n12.88 \n \n20.59 \n \n -0.36 \n \n 8.15 \nBroad Money Multiplier \n(M3) \n \n \n3.53 \n \n3.29 \n \n3.26 \n \n3.42 \n \n3.74 \nSource: Central Bank of Nigeria. \n \nThe increase in broad money multiplier to 3.74 triggered the growth of \n24.4 per cent in broad money supply (M3) to ₦64,906.93 billion compared \nwith ₦54,628.23 billion at the end of the preceding quarter. On an annualised \nbasis, the 24.4 per cent growth in M3 translated to 48.7 per cent, \nsurpassing the 2023 benchmark of 28.21 per cent. \nReserve Money \n \n29 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nFigure 19: Composition of Currency-in-Circulation (₦ Billion) \nSource: Central Bank of Nigeria. \n \nThe analysis of the components of M3 revealed that both net foreign assets \n(NFA) and net domestic assets (NDA) grew significantly during the period, \ncontributing to the overall expansion of M3. NFA and NDA grew by 59.6 and \n18.9 per cent, contributing 8.0 percentage points and 16.4 percentage points, \nrespectively, to the M3 growth. The increase in NFA was due to the 22.6 per \ncent rise in claims on non-residents by depository corporations, owing to the \nrevaluation effect of the assets, following the reforms in the foreign exchange \nmarket. The main drivers of NDA were the growth in net claims on the central \ngovernment (39.6%) and claims on other sectors (26.6%). \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.00\n2,000.00\n4,000.00\n6,000.00\n8,000.00\n10,000.00\n12,000.00\n14,000.00\n16,000.00\n0.0\n1.0\n2.0\n3.0\n4.0\n5.0\n6.0\n7.0\n8.0\nJun.-22\nSep-22\nDec-22\nMar-23\nJun-23\nN Billion\nN Billion\nNotes & Coins (RHS)\nLODCs (RHS)\neNaira (LHS)\n \n30 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nTable 9: Money and Credit Growth over preceding December in Per cent \n \nJun-\n22 \nSep-\n22 \nDec-\n22 \nMar-\n23 \nJun-23 \nContributio\nn to M3 \ngrowth \n(Jun-23) \nAnnualised \nGrowth \n(Jun-23) \n2023 \nProvisional \nBenchmark \nNet Foreign Assets \n-34.68 \n-52.04 \n-25.57 \n-13.93 \n59.64 \n7.95 \n119.28 \n95.57 \nClaims on Non-\nresidents \n0.63 \n1.64 \n9.64 \n-6.40 \n51.81 \n22.63 \n103.62 \n \nLiabilities to Non-\nresidents \n29.51 \n45.54 \n38.43 \n-3.09 \n48.37 \n14.67 \n96.74 \n \nNet Domestic \nAssets \n21.94 \n27.80 \n28.90 \n7.52 \n18.09 \n16.40 \n36.18 \n \nDomestic Claims \n17.82 \n29.90 \n31.42 \n10.08 \n31.22 \n38.25 \n62.44 \n49.16 \nNet Claims on \nCentral \nGovernment \n31.61 \n64.93 \n61.61 \n23.08 \n39.64 \n16.99 \n79.28 \n58.63 \nClaims on Central \nGovernment \n23.61 \n39.62 \n34.57 \n15.33 \n30.71 \n19.40 \n61.42 \n \nLiabilities to Central \nGovernment \n13.23 \n6.76 \n-0.53 \n-1.02 \n11.88 \n2.41 \n23.76 \n \nClaims on Other \nSectors \n12.35 \n16.02 \n19.46 \n3.11 \n26.60 \n21.26 \n53.20 \n44.09 \nClaims on Other \nFinancial Corporations \n2.91 \n7.76 \n11.69 \n6.83 \n26.86 \n4.53 \n53.72 \n \nClaims on State and \nLocal Government \n29.85 \n29.28 \n32.47 \n4.26 \n-8.51 \n-0.54 \n-17.02 \n \nClaims on Public \nNonfinancial \nCorporations \n42.37 \n34.27 \n40.89 \n-0.45 \n4.55 \n0.10 \n9.10 \n \nClaims on Private \nSector \n12.64 \n16.76 \n19.95 \n1.96 \n31.47 \n17.17 \n62.94 \n \nTotal Monetary \nAssets (M3) \n10.02 \n11.00 \n17.44 \n4.66 \n24.39 \n24.35 \n48.78 \n28.21 \nCurrency Outside \nDepository Corporations \n-7.46 \n-7.10 \n-12.57 \n-43.74 \n-11.91 \n-0.59 \n-23.82 \n \nTransferable Deposits \n16.61 \n22.16 \n20.34 \n9.68 \n22.20 \n7.74 \n44.40 \n \nNarrow Money \n(M1) \n12.70 \n17.40 \n14.98 \n3.07 \n17.98 \n7.15 \n35.96 \n \nOther Deposits \n8.19 \n6.62 \n17.63 \n5.63 \n28.49 \n16.90 \n56.98 \n \nBroad Money (M2) \n10.02 \n11.00 \n16.56 \n4.60 \n24.28 \n24.06 \n48.48 \n29.18 \nSecurities Other than \nShares \n100.0\n0 \n100.00 \n100.00 \n12.38 \n26.13 \n0.30 \n52.26 \n \nTotal Monetary \nLiabilities(M3) \n10.02 \n11.00 \n17.44 \n4.66 \n24.39 \n24.35 \n48.78 \n28.21 \nSource: Central Bank of Nigeria. \n \n \n31 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nOn the liabilities side, the growth in M3 was traceable to the 22.2 and \n28.5 per cent growth in transferable deposits and other deposits, respectively. \nThe growth in ‘other deposits’ was largely, driven by the modification of \noperations in the domestic foreign exchange market, which increased the \nstock of foreign currency deposits. Transferable deposits sustained an upward \ntrajectory and contributed 7.7 percentage points to the overall growth in M3. \nOn the contrary, currency outside depository corporations (CODC) recorded \na decline of 11.9 per cent in the review quarter, reflecting increased adoption \nand usage of electronic payments channels. \n \n2.3.2 Sectoral Credit Utilisation \nCredit utilisation by the critical sectors of the economy increased considerably \nduring the review period. The increase was largely on account of the Bank's \ninitiatives, particularly the continued implementation of the Loan-to-Deposit \nRatio (LDR) policy and revaluation effect of foreign currency denominated \ncredit. Total credit utilised by key sectors of the economy grew significantly \nby 24.2 per cent to N37,479.37 billion, from N30,346.13 billion in the \npreceding quarter. Among the key sectors, the services sector remained the \ndominant recipient of credit, accounting for the largest share at 51.6 per cent. \nThe industry sector was next at 43.5 per cent, while agriculture accounted \nfor 4.9 per cent. \nTable 10: Sectoral Credit Allocation to Agriculture, Industry and Services \n \nin N Billion \nITEM \nJun-22 \nMar-23 \nJun-23 \n \nPercentage Share \nin Total \n₦'Bn \n₦'Bn \n₦'Bn \nJun-22 \n Mar-23 \nJun-23 \n(1) \n(2) \n(3) \n(4) \n(5) \n(6) \n[a] Agriculture \n1,630.38 \n1,887.95 \n1,839.43 \n6.08 \n6.22 \n4.91 \n[b] Industry \n10,591.87 \n12,334.84 \n16,313.8\n5 \n39.45 \n40.65 \n43.53 \n of which \nConstruction \n1,177.24 \n1,163.72 \n1,512.67 \n4.39 \n3.83 \n4.04 \n[c] Services \n14,624.15 \n16,123.34 \n19,326.0\n9 \n54.47 \n53.13 \n51.56 \n of which Finance, Insurance \n& Capital Market \n2,050.19 \n2,639.25 \n3,475.75 \n7.64 \n8.70 \n9.27 \nTrade/General Commerce \n1,913.39 \n2,333.42 \n2,884.66 \n7.12 \n7.69 \n7.70 \nTOTAL PRIVATE SECTOR CREDIT \n26,846.40 \n30,346.13 \n37,479.3\n7 \n100.0 \n100.0 \n100.0 \nSource: Central Bank of Nigeria. \n \nConsumer credit improved owing to increased demand for personal loans and \nstrengthened enforcement of the Loan-to-Deposit Ratio (LDR) policy. \nConsequently, total consumer credit increased significantly by 12.2 per cent, \nto ₦2,637.31 billion in the second quarter of 2023, compared with ₦2,349.88 \nbillion at the end of the preceding quarter. As a share of total credit by ODCs, \nconsumer credit declined to 7.0 per cent, this was below the 7.7 and \n7.8 per cent recorded in the preceding quarter and corresponding period of \n2022, respectively. The components of consumer credit revealed that \nConsumer Credit \nSectoral Credit \nUtilisation \n \n \n32 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \npersonal loans accounted for the larger share, totaling ₦1,922.20 billion, \nrepresenting 72.9 per cent of the total, while retail loans accounted for 27.1 \nper cent, equivalent to ₦715.10 billion. \n \nFigure 20: Consumer Credit Outstanding (₦Billion) and Share of sectoral \nCredit in Per cent \n \n Source: Central Bank of Nigeria. \n \nFigure 21: Composition of Consumer Credit in Per cent \n \n Source: Central Bank of Nigeria. \n6.50\n7.00\n7.50\n8.00\n8.50\n9.00\n9.50\n500.00\n1,000.00\n1,500.00\n2,000.00\n2,500.00\n3,000.00\nMar.-22\nJun-22\nSep-22\nDec-22\nMar-23\nJun-23\nPer cent\nBillion\nConsumer Credit\nShare of sectoral credit\n73.49\n76.94\n75.59\n74.54\n72.88\n26.51\n23.06\n24.41\n25.46\n27.12\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\nJun.-22\nSep-22\nDec-22\nMar-23\nJun-23\nPer cent\nPersonal\nRetail\n \n33 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n2.3.3 Financial Developments \n2.3.3.1 Money Market Developments \nBanking system liquidity moderated on the back of the net effect of fiscal and \nmonetary operations. Average net industry liquidity balance declined by \n21.9 per cent to N384.54 billion from N492.57 billion in the preceding quarter. \nDaily average request at the standing deposit facility (SDF) declined to \nN23.15 billion in the review quarter compared with N30.07 billion in the \npreceding quarter. Contrastingly, daily average request at the standing \nlending facility (SLF) window increased to N97.43 billion in the review quarter, \ncompared with N78.67 billion in the preceding quarter. The increase in daily \naverage activities at the SLF window and decreased daily average activities at \nthe SDF window reflected the lower average liquidity level in the banking \nsystem. \n \nFigure 22: Transactions at the CBN Standing Facility Window (N Billion) \n \nSource: Central Bank of Nigeria. \n \nThe value of transactions for NTBs and FGN bond declined, swayed by investors’ \nsentiments as it was anchored on inflation expectations. Across the different \ntenors (91-, 182- and 364- days), NTBs worth ₦1,010.04 billion, ₦4,601.50 \nbillion, and ₦1,010.04 billion were offered, subscribed, and allotted, \nrespectively, in the review period, relative to ₦1,289.87 billion, ₦4,892.10 \nbillion, and ₦1,589.87 billion in the preceding quarter. The development \ncould be attributed to investors’ preference for longer-tenored securities \n(364-day), which accounted for ₦4,384.92 billion (95.3%) of total \nsubscription. Their preference rode on the back of more attractive yields and \ninflation expectation. \n \n \n0.00\n20.00\n40.00\n60.00\n80.00\n100.00\n120.00\nJun.-22\nMar-23\nJun-23\nSLF\nSDF\nPrimary Market \nIndustry Liquidity \nCondition \n \n34 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nFigure 23: Primary Market NTBs (N Billion) \n \n Source: Central Bank of Nigeria. \n \nThe FGN bond of 10-, 10-, 15-, and 30-years trenches exhibited downward \ntrend with total amount offered, subscribed, and allotted at N1,080.00 billion, \nN1,460.79 billion and ₦1,163.98 billion in the review quarter, compared with \n₦1,080.00 billion, ₦2,605.88 billion and ₦1,996.53 billion, respectively, in the \npreceding quarter. The bid and marginal rates stood at 14.8 (±2.3) and \n14.9 (±1.0) per cent, compared with 14.3 (±3.3) and 15.0 (±1.0) per cent, \nrespectively, in the preceding quarter. \n \nFigure 24: Primary Market Auctions of FGN Bond (N Billion) \n \n Source: Central Bank of Nigeria. \n \n \n \n0.00\n1,000.00\n2,000.00\n3,000.00\n4,000.00\n5,000.00\n6,000.00\n500.00\n700.00\n900.00\n1,100.00\n1,300.00\n1,500.00\n1,700.00\nJun.-22\nMar-23\nJun-23\nOffered (LHS)\nAllotment (LHS)\nSubscription (RHS)\n0.00\n500.00\n1000.00\n1500.00\n2000.00\n2500.00\n3000.00\nJun.-22\nMar-23\nJun-23\nOffered\nSubscription\nAllotment\n \n35 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n Key money market rates experienced a mixed trend in tandem with the level of \nbanking system liquidity and the hike in monetary policy rate (MPR) in the \nreview period. The average Interbank call and Open Buy Back (OBB) rates \nincreased to 12.8 and 12.7 per cent, compared with 12.1 and 12.0 per cent, \nrespectively, in the preceding quarter. The Nigeria Interbank Offered Rate \n(NIBOR 30-day and 90-day) increased to 13.0 and 13.8 per cent, from 12.5 and \n13.3 per cent, respectively, in the preceding quarter. \n \nFigure 25: Developments in Short-term Interest Rates in Per cent \n \nSource: Central Bank of Nigeria. \n \nAverage prime and maximum lending rates inched up marginally by 0.8 and \n0.4 percentage points to 14.0 and 28.6 per cent compared with 13.8 and \n28.2 per cent, respectively, in the preceding quarter. The weighted average \nterm deposit (WAVTD), however, fell to 6.9 per cent, from 7.1 per cent in the \npreceding quarter. Consequently, the average spread between the weighted \naverage term deposit and maximum lending rates widened to \n21.8 percentage points, from 21.1 percentage points recorded in the \npreceding quarter. \n \n \n \n \n \n \n \n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n20\nPer cent (%)\nInterbank call\nOBB\nNIBOR-30\nNIBOR-90\nMPR\nInterest Rate \nDevelopment \n \n36 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nFigure 26: Trend in Average Term Deposit and Lending Rates in Per cent \n \nSource: Central Bank of Nigeria. \nNote: PLR= Prime lending rate; MLR= Maximum lending rate; WAVTD= Weighted Average term deposit \nrate; and SPRD= Spread. \n \n2.3.4 Capital Market Developments \nIn the review quarter, activities on the Nigerian Exchange (NGX) Limited were \nbullish, driven by investors’ bargain-hunting activity and positive sentiments \nfollowing the removal of fuel subsidy by the government and the adoption of a \nmarket determined exchange rate policy by the Bank. Aggregate market \ncapitalisation increased by 12.3 per cent to ₦59,916.22 billion, from the \nN53,326.29 billion recorded in the preceding quarter. A disaggregation of the \ncomponents of the aggregate market capitalisation showed that, the equities, \ndebts, and Exchange Traded Funds (ETF) components rose by 12.4, 12.4 and \n13.3 per cent, respectively, to close at N33,203.45 billion, N26,702.50 billion \nand N10.30 billion, respectively. The equities, debt, and ETF components \nconstituted 55.4, 44.5 and 0.1 per cent, respectively, of the aggregate market \ncapitalisation. \nThe All-Share Index (ASI), rose by 12.4 per cent to 60,968.27 points in the \nreview quarter, relative to the 54,232.34 points recorded in the preceding \nquarter. The improved performance was driven by the positive Q12023 \ncorporate earnings results, which drove strong buying interest in blue chip \nstocks. \n \n \n \n \nMar.-22\nJun-22\nSep-22\nDec-22\nMar-23\nJun-23\nPRL (LHS)\n11.77\n12.03\n12.19\n13.25\n13.75\n13.99\nMXLR (LHS)\n28.33\n27.59\n27.99\n28.53\n28.15\n28.61\nWAVTD (LHS)\n3.37\n3.44\n5.21\n7.21\n7.1\n6.86\nSPRD (RHS)\n24.96\n24.15\n22.78\n21.33\n21.05\n21.76\n19\n20\n21\n22\n23\n24\n25\n26\n0\n5\n10\n15\n20\n25\n30\n35\nPercentage points\nPer cent (%)\nMarket \nCapitalisation \nNGX All-Share \nIndex \n \n37 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 27: Aggregate Market Capitalisation and All-Share Index \n \nSource: Nigerian Exchange (NGX) Limited. \n \nThe performances of all the major indices tracked were bullish, except for the \nNGX-Sovereign bond and NGX-Growth, which trended downward, while the \nNGX-ASeM remained flat relative to the levels in the preceding quarter. The \nimproved performances of the major indices reflected the bullish stance of \nthe capital market. \n \nTable 11: Nigerian Exchange (NGX) Limited Sectoral Indices \nSectoral Indices \nQ12023 \nQ22023 \nChange (%) \nNGX-Insurance \n177.51 \n277.07 \n56.1 \nNGX-Oil/Gas \n510.83 \n775.85 \n51.9 \nNGX- \nAFR \nBank \nValue \n1,081.54 \n1,570.77 \n45.2 \nNGX- MERI Growth \n2,351.76 \n3,396.92 \n44.4 \nNGX- MERI Value \n2,484.30 \n3,543.64 \n42.6 \nNGX-Bank \n452.97 \n645.42 \n42.5 \nNGX- AFR Div Yield \n3,591.60 \n5,064.38 \n41.0 \nNGX-Pension \n1,906.49 \n2,581.82 \n35.4 \nNGX-CG \n1,363.74 \n1,788.36 \n31.1 \nNGX-Consumer \nGoods \n702.74 \n894.76 \n27.3 \n -\n 5,000.00\n 10,000.00\n 15,000.00\n 20,000.00\n 25,000.00\n 30,000.00\n 35,000.00\n 40,000.00\n 45,000.00\n 50,000.00\n 55,000.00\n 60,000.00\n 65,000.00\n -\n 5,000.00\n 10,000.00\n 15,000.00\n 20,000.00\n 25,000.00\n 30,000.00\n 35,000.00\n 40,000.00\n 45,000.00\n 50,000.00\n 55,000.00\n 60,000.00\n 65,000.00\n2022Q2\n2022Q3\n2022Q4\n2023Q1\n2023Q2\nIndex Points\nN'Billion\nAggregate Market Cap (N' Billion)\nAll-Share Index (Index points)\n \n38 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nTable 11 Cont: Nigeria Exchange (NGX) Limited Sectoral Indices \nSectoral Indices \nQ12023 \nQ22023 \nChange (%) \nNGX-Premium \n5,280.16 \n6,256.51 \n18.5 \nNGX-Lotus II \n3,525.80 \n4,039.16 \n14.6 \nNGX-30 \n1,933.29 \n2,201.23 \n13.9 \nNGX-Mainboard \n2,440.45 \n2,675.20 \n9.6 \nNGX-Industrial \nGoods \n2,456.45 \n2,491.31 \n1.4 \nNGX-ASeM \n659.42 \n659.42 \n0.0 \nNGX-Sovereign \nBond \n802.08 \n762.86 \n-4.9 \nNGX-Growth \n2,799.23 \n2,493.13 \n-10.9 \nSource: Nigerian Exchange (NGX) Limited. \n \nThe level of trading activities increased significantly in the second quarter of \n2023, as both the value and volume of traded securities increased by 77.2 and \n168.3 per cent, respectively, to N460.77 billion, and 48.41 billion shares, in \n398,744 deals relative to the N260.02 billion and 18.04 billion shares in 230, \n629 deals recorded in the preceding quarter. The total deals in the review \nquarter reflected an increase of 72.9 per cent, relative to the level in the \npreceding quarter. \n \nFigure 28: Volume and Value of Traded Securities on the Nigerian \nExchange (NGX) \nSource: Nigerian Exchange (NGX) Limited. \n0\n10\n20\n30\n40\n50\n60\n0\n100\n200\n300\n400\n500\n600\nQ22022\nQ32022\nQ42022\nQ12023\nQ22023\nBillion Shares\nN Billion\nValue of Traded Securities\nVolume of Traded Securities\n \n39 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nIn the review quarter, there were three (3) new listings and two (2) delistings \non the Exchange, compared with the 25 new listings and no delisting in the \nprevious quarter. The new listings in the review quarter comprised 2 savings \nbonds and 1 rights issue. \n \nTable 12: Listings on the Nigerian Exchange Limited in Q22023 \nCompany/Security \nShares Units/Price \nRemarks \nListing \n11.032% FGS APR \n2026 \n643,204 Units \nSavings \nBonds \nNew \n10.032% FGS APR \n2025 \n436,012 Units \nSavings \nBonds \nNew \nGlobal \nSpectrum \nEnergy Services Plc \nEntire Issued Shares \nDelisting \nDelisting \n \nSterling \nFinancial \nHoldings Company \nPlc’s \n(Sterling \nHoldCo) \n28,790,418,124 \nat \nN1.60 per share. \nRights Issue \nNew \nSterling Bank Plc \n28,790,418,126 \nShares at 50 Kobo \neach. \nDelisting \nDelisting \nSource: Nigerian Exchange (NGX) Limited. \nNotes: FGS=Federal Government of Nigeria Saving Bond; Plc=Public Limited Liability Company; and \nAPR=April. \n \n2.3.5 Financial Soundness Indicators \nThe banking industry remained resilient in the review quarter as key financial \nsoundness indicators were within the regulatory thresholds. The banking \nsystem Capital Adequacy Ratio (CAR) fell by 3.0 percentage points to 11.2 per \ncent, relative to the 14.2 per cent recorded in the preceding quarter. The ratio \nwas above the 10.0 per cent benchmark for banks with national/regional \nauthorisation, but below the 15.0 per cent threshold for banks with \ninternational authorisation. The development reflected a decline in the banks’ \ntotal qualifying capital relative to the increase in risk weighted assets due to \nthe depreciation of the naira exchange rate, as a result of the adoption of a \nmarket determined exchange rate policy by the Bank. \nThe banks’ asset quality, measured by the ratio of Non-Performing Loans \n(NPLs) fell marginally by 0.4 percentage point to 4.1 per cent in the second \nquarter of 2023 from 4.5 per cent in the previous quarter, reflecting sustained \nimprovement in loan recoveries by banks. The ratio was below the prudential \n \n40 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nbenchmark of 5.0 per cent. The Industry Liquidity Ratio (LR) rose significantly \nby 10.9 percentage points to 62.2 per cent in the review quarter, compared \nwith 51.4 per cent, recorded in the preceding quarter. The LR was above the \nminimum regulatory benchmark of 30.0 per cent, showing the ability of the \nbanks to meet their obligations. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n41 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n2.4 \nExternal Sector Developments \n Nigeria's current account recorded a surplus position in the review period, from \na deficit in the preceding period, due to a significant decline in importation of \npetroleum products and higher inflow of diaspora remittances. The financial \naccount recorded a net incurrence of financial liabilities, driven by increased \ninflow of portfolio capital. The international reserves at US$33.71 billion was \nequivalent to 6.5 months of import for goods and services or 8.9 months for \ngoods only. The average exchange rate of the naira at the I&E window \ndepreciated by 9.8 per cent to ₦511.23/US$, compared with ₦460.93/US$ in \nQ12023. The international investment position (IIP) recorded a lower net \nfinancial liability of US$53.13 billion. Public sector external debt stock and \nexternal debt service payment at end-June 2023 stood at US$43.16 billion and \nUS$0.37 billion, respectively. \n \n2.4.1 Current and Capital Accounts \nThe current account recorded a surplus position in the second quarter of 2023 \nfrom a deficit in the preceding quarter. The current account posted a surplus \nof US$2.87 billion (2.8 per cent of GDP), in contrast to a deficit of US$0.41 \nbillion (0.4 per cent of GDP) in Q12023, due to a significant decline in \nimportation of petroleum products and higher inflow of diaspora remittances. \n \nFigure 29: Current Account Balance (US$ Billion) \n \nSource: Central Bank of Nigeria. \n \nEarnings from merchandise export decreased on account of lower commodity \nprices and a drop in domestic crude oil production. Aggregate export earnings \ndeclined by 3.3 per cent to US$13.91 billion, from US$14.38 billion in Q12023. \nThe development was as result of declines in both oil and non-oil export, due \nto lower commodity prices and domestic crude oil production. \n-1.69\n2.43\n-2.06\n2.35\n-0.41\n2.87 \n-3.00\n-2.00\n-1.00\n0.00\n1.00\n2.00\n3.00\n4.00\nQ12022\nQ22022\nQ32022\nQ42022\nQ12023\n2023Q2\nUS$ Billion\nExport \nPerformance \nSummary \n \n42 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nA breakdown showed that earnings from crude oil and gas export fell by \n3.3 per cent to US$12.24 billion, from US$12.66 billion in Q12023, on account \nof a dip in both the price and production of Nigeria’s reference crude, bonny \nlight. Crude oil price declined to an average of US$79.78pb, from US$83.86pb \nin Q12023, reflecting increased supply at the international market, while \ndomestic crude oil production fell to 1.14mbpd, from 1.28mbpd in Q12023, \narising from force majeure on some domestic export terminals. \nNon-oil export receipts also decreased by 2.9 per cent to US$1.67 billion, from \nUS$1.72 billion in the preceding quarter. The development was on account of \ndecline in the export of cocoa beans, sesame seeds, cement and urea during \nthe review period. \nIn terms of share, crude oil and gas export constituted 88.0 per cent of total \nexport, while non-oil export accounted for the remaining 12.0 per cent. \n \nMerchandise import bills decreased due to lower importation of petroleum \nproducts. Merchandise import fell by 20.1 per cent to US$11.39 billion, from \nUS$14.25 billion in Q12023, due to lower importation of petroleum products, \nparticularly premium motor spirit as a result of sustained stockpile. \nImportation of non-oil products increased by 8.4 per cent to US$8.11 billion, \nfrom US$7.48 billion in Q12023. Petroleum products import, however, \ndeclined significantly by 51.6 per cent to US$3.28 billion, from US$6.77 billion \nin Q12023. Analysis by share showed that non-oil import remained dominant, \naccounting for 71.2 per cent of the total, while petroleum products \nconstituted the balance of 28.8 per cent. \nA breakdown of import by sector revealed that raw materials and machinery \nimport accounted for the largest share of 53.1 per cent, encouraged by the \nBank’s drive to ease the availability of foreign exchange to industrial sector. \nOther sectoral import shares were: manufactured products, 17.0 per cent; \nfood products, 11.0 per cent; petroleum products, 6.6 per cent; minerals, \n6.3 per cent; transport, 4.0 per cent; and agricultural products, 2.0 per cent. \n \n \n \n \n \n \n \n \n \n \nMerchandise \nImport \n \n43 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 30: Import by Sector (US$ Billion) \nSource: Central Bank of Nigeria. \n \nThe deficit in the services account decreased due to lower payments for \ntransportation and travel. The deficit in the services account narrowed by \n1.7 per cent to US$3.13 billion, from US$3.18 billion in Q12023 on account for \nlower payments for freight as merchandise import declined, and decreased \npayments for travels. \nAn analysis of trade in services revealed that the total payments for services \ndecreased marginally to US$4.23 billion, compared with US$4.26 billion in the \nprevious quarter. Payments for transportation, travel, insurance and pension \nservices and personal, cultural, and recreation services decreased by 16.0, \n19.3, 11.3, and 59.3 per cent, respectively, to US$1.76 billion, US$0.80 billion, \nUS$0.15 billion, and US$0.03 billion. On the other hand, payments for other \nbusiness services, telecommunications, computer, and information services, \nfinancial services and government services rose by 87.3, 22.9, 48.4 and 4.3 \nper cent, to US$1.11 billion, US$0.17 billion, US$0.07 billion, and \nUS$0.08 billion, respectively. \nIn terms of the share, transportation accounted for the largest portion of \n41.5 per cent, followed by other business services with 26.2 per cent. Travels, \ntelecommunications, insurance, government, and \nfinancial services \naccounted for 18.9, 3.9, 3.5, 2.0, and 1.7 per cent, respectively. Other \ncategories of services accounted for the balance of 2.3 per cent. \n \n \n \n \n \n \n \nRaw Materials 53.1%\nManufactured \nProducts\n17.0%\nFood Products\n11.0%\nPetroleum Products, \n6.6%\nMinerals\n6.3%\nTransport\n4.0%\nAgricultural Products\n2.0%\nServices \n \n44 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 31: Share of Service Out-Payments in Per cent \n \n Source: Central Bank of Nigeria. \n \nReceipts from services increased by 2.9 per cent to US$1.10 billion, from \nUS$1.07 billion in the preceding quarter. This was due, mainly, to higher \nreceipts from financial services, which rose by 42.8 per cent to US$0.22 billion. \nTransportation services, however, declined by 1.3 per cent to US$0.47 billion, \nrelative to the level in the preceding quarter, due to lower receipts from sea \ntransportation services. Similarly, receipts from travel services decreased by \n12.6 per cent to US$0.19 billion, compared with US$0.22 billion in the \npreceding quarter, as personal related travels fell. \nIn terms of share, receipts from transportation services was 42.7 per cent; \nfinancial services, 20.0 per cent; travels, 17.7 per cent; government services, \n10.2 per cent; and telecommunication services, 5.0 per cent. “Others” \nservices accounted for the balance of 4.4 per cent. \n \nFigure 32: Share of Services Receipts in Per cent \n \nSource: Central Bank of Nigeria. \n \nTransportation\n42.7%\nTravels\n17.7%\nFinancial\n20.0%\nCommunications\n5.0%\nGovernment \n10.2%\nOthers\n4.4%\nTransportation 41.5%\nTravels\n18.9%\nInsurance\n3.5%\nCommunications, 3.9%\nGovernment \n2.0%\nOther business\n26.2%\nFinancial\n1.7%\nOthers\n2.3%\n \n45 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nThe deficit in the primary income account narrowed due to lower investment \nincome claims by non-resident investors as some companies declared losses. \nThe deficit in the primary income account fell by 26.4 per cent to \nUS$2.10 billion in Q22023. This was primarily driven by a 19.7 per cent decline \nin investment income payments, which amounted to US$2.57 billion, from \nUS$3.20 billion in Q12023. Dividend payments declined by 24.3 per cent to \nUS$1.84 billion, from US$2.43 billion in the preceding quarter. Similarly, \ninterest payments on portfolio investments decreased to US$0.08 billion, \nfrom US$0.10 billion in Q12023, while interest payments on loans reduced by \n2.3 per cent to US$0.65 billion. Interest earnings on external reserves \ninvestments increased by 23.4 per cent to US$0.25 billion, from \nUS$0.20 billion in the preceding quarter. \nOn the other hand, the compensation of employees account maintained a \nsurplus position, though lower by 4.2 per cent to US$0.06 billion, compared \nwith the level in the first quarter of 2023. \n \nFigure 33: Primary Income Balance (US$ Billion) \n \n Source: Central Bank of Nigeria. \n \nThe surplus in the secondary income account rose, due to higher inflow of \npersonal transfers, particularly remittances. The secondary income account \nrecorded a higher surplus position, increasing by 1.7 per cent to \nUS$5.58billion in Q22023, from US$5.49 billion in Q12023. The development \nwas attributed to higher inflow of personal transfers, which rose by 2.0 per \ncent to US$4.95 billion, from US$4.85 billion in Q12023, as migrant host \ncountries, particularly the United States and parts of Europe increased labour \nwage earnings. On the other hand, general government transfers, decreased \nby 1.7 per cent to US$0.71 billion, from US$0.73 billion in the preceding \nquarter, as inflow of grants declined. \n \n \n-2.94\n-3.43\n-2.26\n-2.85\n-2.1\nQ2 2 0 2 2\nQ3 2 0 2 2\nQ4 2 0 2 2\nQ1 2 0 2 3\nQ2 2 0 2 3\nUS$ BILLION\nPrimary Income \nSecondary Income \n \n46 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 34: Secondary Income Balance and Remittances Inflow (US$ Billion) \n \nSource: Central Bank of Nigeria. \n \n2.4.2 Financial Account \nA significant increase in portfolio investment inflow, particularly for the \npurchase of fixed income securities resulted in a higher net incurrence of \nfinancial liabilities position. The financial account recorded a net incurrence of \nfinancial liabilities of US$1.44 billion (1.4 per cent of GDP), in contrast to a net \nreduction of financial liabilities of US$0.04 billion in Q12023. This reflected \nincreased inflow of portfolio investment capital, on account of favourable \ninvestor sentiments, as the uncertainties surrounding the 2023 elections \ndissipated. \nInflow into the economy improved as uncertainties waned, following the \nsuccessful completion of the general elections, favourable returns on \ninvestments and ongoing reforms, especially, in the foreign exchange market. \nAn inflow of US$1.97 billion was recorded, against a capital reversal of \nUS$1.00 billion in the preceding quarter. The development emanated from \nimproved inflow of portfolio capital for the purchase of debt securities, \nparticularly, government bonds. Portfolio investment recorded an inflow of \nUS$1.95 billion, in contrast to a reversal of US$1.17 billion in Q12023, \noccasioned by increased investments in bonds by non-resident investors. In \ncontrast, FDI inflow recorded a divestment of US$0.07 billion, against an \ninflow of US$1.12 billion in Q12023, owing to negative reinvested earnings, as \nsome companies declared losses during the review period. Similarly, ‘Other \nInvestment’ inflow dipped to US$0.25 billion, as against an inflow of \nUS$0.07 billion in Q12023, due to withdrawal of currency and deposits placed \nin the Nigerian banks by non-residents and higher loan repayments by deposit \ntaking corporations. \n5.56 \n5.46 \n4.95 \n5.49 \n5.58 \n4.95 \n4.80 \n4.95 \n4.85 \n4.95 \n0.72 \n0.77 \n0.49 \n0.73 \n0.71 \n -\n 1.00\n 2.00\n 3.00\n 4.00\n 5.00\n 6.00\nQ2 2022\nQ3 2022\nQ4 2022\nQ1 2023\nQ2 2023\nUS$ Billion\nSecondary Income Balance\nRemittances\nGovernment Transfers\nNet Incurrence of \nLiability \nFinancial Account \nDevelopments \n \n47 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nAggregate financial assets recorded an acquisition of US$0.53 billion, in \ncontrast to a disposal of US$1.04 billion in Q12023. The development \nreflected an improvement in the acquisition of other investment assets, \nparticularly, the increase in foreign currency and deposits holdings by \nhouseholds. Direct investment assets recorded a net acquisition of US$0.001 \nbillion, against a disposal of US$0.02 billion in Q12023. Portfolio investments \ninflow recorded a net acquisition of US$0.05 billion, against a disposal of \nUS$0.03 billion in 2023Q1. Following the Bank's continued effort to enhance \nliquidity in the foreign exchange market and also to meet balance of payments \nneeds, reserve assets were depleted by US$1.34 billion, relative to \nUS$1.62 billion in Q12023. \n \n2.4.3 External Debt \nNigeria’s public sector external debt stock and external debt service payment \nat end-June 2023 stood at US$43.16 billion or 10.4 per cent of GDP and \nUS$0.37 billion, respectively. A breakdown showed that the multilateral loans, \nfrom the World Bank, International Monetary Fund, and African Development \nBank Groups, amounted to US$20.79 billion, accounting for 48.1 per cent of \nthe total. Loans from commercial sources in the form of Euro bonds was \nUS$15.62 billion or 36.2 per cent. Loans from bilateral sources was \nUS$5.52 billion, or 12.8 per cent of the total, promissory notes were \nUS$0.93 billion, or 2.2 per cent of the total, while syndicated loan (arranged \nby African Finance Corporation) stood at US$0.30 billion or 0.6 per cent of the \ntotal debt stock. \n \nThe external debt service payment stood at US$0.37 billion at end-June 2023, \nrelative to US$0.80 billion in the preceding quarter. A breakdown showed that \nthe interest payment was to the tune of US$0.21 billion, accounting for 56.8 \nper cent of the entire debt service payment. Principal repayment was US$0.13 \nbillion, or 35.1 per cent of the total, while other payments made up the \nbalance. An analysis of interest payments showed that interest the total \npayment on commercial borrowings accounted for 76.2 per cent of the total \nat US$0.21 billion, while interest on multilateral loans amounted to \nUS$0.04 billion or 19.1 per cent of the total. Interest payments to bilateral \ninstitutions accounted for the balance. \n \n2.4.4 International Investment Position (IIP) \nNigeria's International Investment Position recorded a lower net financial \nliability of US$53.13 billion. The stock of financial assets decreased to \nUS$108.77 billion at end-June 2023, compared with US$108.85 billion, \nin the preceding quarter, due, largely to the 5.1 per cent decline in portfolio \nInternational \nInvestment Position \nPublic Sector \nExternal Debt \nNet Acquisition of \nAsset \n \n48 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \ninvestment assets to US$3.85 billion, relative to the value in the preceding \nquarter. The stock of other investment assets increased by 2.9 per cent to \nUS$54.80 billion, relative to the preceding quarter, while direct investment \nassets rose slightly to US$13.65 billion, from the level at end-March 2023, due \nto higher investments in equity by residents. \nThe total stock of financial liabilities decreased by 11.1 per cent to \nUS$161.90 billion, from US$182.22 billion at end-March 2023, due, largely to \nthe decrease in the stock of direct investment liabilities. The stock of portfolio \ninvestment and direct investment liabilities wereUS$72.08 billion and \nUS$28.46 billion, compared with US$85.86 billion and US$34.95 billion, \nrespectively. Similarly, the stock of other investment liabilities decreased \nslightly by 0.5 per cent to US$57.98 billion, from the level at end-March \n2023. \n \n2.4.5. International Reserves \nThe international reserves remained above the standard benchmark of 3.0 \nmonths of import cover. It stood at US$33.71billion, relative to US$34.39 \nbillion at end-March 2023. The level of external reserves could cover 6.5 \nmonths of import for goods and services or 8.9 months of import for goods \nonly. \n \nFigure 35: External Reserves in US$ Billion and Months of Import Cover \n \nSource: Central Bank of Nigeria. \n \nA breakdown of the external reserves showed that the share of CBN was \nUS$28.98 billion; Federal Government, US$4.73 billion; while the Federation \naccounted for the balance of US$0.001 billion. \n \n \n0.00\n1.00\n2.00\n3.00\n4.00\n5.00\n6.00\n7.00\n8.00\n9.00\n10.00\n 31.00\n 32.00\n 33.00\n 34.00\n 35.00\n 36.00\n 37.00\n 38.00\n 39.00\n 40.00\nUS$ Billion\nExternal Reserves - LHS\nMonths of Import (Goods only)\nMonths of Import (Goods and Services)\n \n49 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 36: External Reserves by Ownership in Per cent \nSource: Central Bank of Nigeria. \n \nIn terms of currency composition, the US dollar was US$25.11 billion, \n(74.5 %); Special Drawing Rights US$5.02 billion (14.9 %); Chinese Yuan \nUS$3.16 billion (9.4 %); British Pounds US$0.20 billion (0.6%); Euro \nUS$0.21 billion (0.6 %); while other currencies accounted for the balance. \n \nFigure 37: Currency Composition of External Reserves in Per cent \n \nSource: Central Bank of Nigeria. \n84.3%\n13.8%\n1.9%\nCBN\nFederation\nFGN\n74.5%\n14.9%\n9.4%\n0.6%\n0.6%\nUSD\nSDR\nCNY\nGBP\nEUR\n \n50 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n2.4.6 Foreign Exchange Flows through the Economy \nForeign exchange flows through the economy resulted in a higher net inflow in \nthe second quarter of 2023. Net foreign exchange inflow through the economy \nincreased by 20.6 per cent to US$8.69 billion from US$7.20 billion in the \npreceding quarter. Net inflow through autonomous sources, similarly, rose to \nUS$9.64 billion from US$8.89 billion in the preceding quarter. A net outflow \nof US$0.96 billion was, however, recorded through the Bank, compared with \na net outflow of US$1.69 billion in the preceding quarter. \nForeign exchange inflow to the economy fell by 6.3 per cent to \nUS$16.09billion from US$17.18 billion in the Q12023. Foreign exchange \ninflow through the Bank declined to US$5.41 billion, from US$7.17 billion in \nthe preceding quarter. Foreign exchange inflow through autonomous \nsources, however, increased to US$10.68 billion from US$10.01 billion in the \npreceding quarter. \nForeign exchange outflow from the economy decreased by 25.8 per cent to \nUS$7.40 billion, relative to US$9.98 billion in the Q12023. Outflow through \nthe Bank decreased by 28.1 per cent to US$6.37 billion from US$8.86 billion \nin the preceding quarter. Similarly, autonomous outflow fell by 7.4 per cent \nto US$1.04 billion from US$1.12 billion in the preceding quarter. \n \nFigure 38: Foreign Exchange Transactions through the Economy in the \nSecond Quarter of 2023 (US$ Million) \n \n Source: Central Bank of Nigeria. \n \n2.4.7 Developments in the Foreign Exchange Market \nThe average turnover at the Investors’ and Exporters’ (I & E) window of the \nforeign exchange market increased by 23.2 per cent to US$0.13 billion, \nrelative to US$0.10 billion in Q12023. \nQ2 2022\nQ1 2023\nQ2 2023\nInflow\n20.08\n17.18\n16.09\nOutflow\n10.83\n9.98\n7.40\nNetflow\n9.25\n7.20\n8.69\n -\n 5.00\n 10.00\n 15.00\n 20.00\n 25.00\nInflow\nOutflow\nNetflow\nTurnover in the \nForeign Exchange \nMarket \n \n51 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n \nFigure 39: Turnover in the Investors’ and Exporters’ (I&E) Foreign Exchange \nMarket (US$ Million) \n \nSource: Central Bank of Nigeria. \n \nThe average exchange rate of the naira per US dollar at the I & E window was \n₦511.23/US$, compared with ₦460.93US$ in Q12023.The 9.8 per cent \ndepreciation was attributed to the adoption of a market driven exchange rate \nregime in June 2023. \n \n \n \n \n \n \n \n \n \n \n \n \n \n16.38 \n(25.04)\n11.69 \n(12.66)\n23.22 \n (40.00)\n (20.00)\n -\n 20.00\n 40.00\n -\n 50.00\n 100.00\n 150.00\nQ2 2022\nQ3 2022\nQ4 2022\nQ1 2023\nQ2 2023\nPERCENT\nUS $ (M) \n Average Turnover(LHS)\nRate of Turnover(RHS)\nExchange Rate \nMovement \n \n52 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \n3.0 ECONOMIC OUTLOOK \n3.1 Global Outlook \nThe Global economic expansion is expected to decelerate to 2.8 per cent in \n2023, from 3.4 per cent in 2024. This projection hinges on the assumption \nthat the recent financial sector turbulence will be effectively contained, \nthereby avoiding any disruptions to global economic activity that could lead \nto a global recession. There are, however, several downside risks to this \noutlook, such as the possibility of crisis in the banking system, resulting in \ntighter global financial conditions. Moreover, the combination of increasing \nlevels of public and private sector debts, coupled with central banks rate \nhikes, poses additional concerns. Potential faltering in China's post-COVID-19 \nrecovery, and an escalation of the war in Ukraine could also contribute to the \nslower expansion in economic activity. \nGrowth in AEs is expected to slow down significantly in 2023, decelerating to \n1.3 per cent from 2.7 per cent growth in 2022. This is as a result of the tight \npolicy stances aimed at curbing inflation, repercussions of the recent \ndeterioration in financial conditions, the ongoing Russia-Ukraine war, and the \nincreasingly noticeable impacts of climate change. \nEconomic prospects in EMDEs show a stronger outlook, though at varying \nlevels across different regions within EMDEs. Nevertheless, based on the \nexpectation of robust domestic demand in India and some Latin American \ncountries, even in the face of external challenges such as the escalation of the \nRussia-Ukraine war and the deterioration in financial conditions, output \ngrowth is anticipated to remain unchanged at 3.9 per cent in 2023. \nThough global headline inflation is projected to remain above the targets of \nmost central banks and higher than the pre-pandemic level of 3.5 per cent. It \nis, however, expected to decrease to 7.0 per cent in 2023 from 8.7 per cent in \n2022, owing to continued monetary policy tightening and decrease in global \ncommodity prices. \n \n3.2 Domestic Outlook \nDespite some downside risks, Nigeria's economic growth prospects remains \npositive. This optimism is contingent upon the continuation of the current \ntrend in crude oil prices and production and the successful execution of the \nMedium-Term National Development Plan (MTNDP). \nAdditionally, the pro-market policy reforms of the government such as the \nremoval of fuel subsidy and the implementation of market-determined \n \n4 IMF WEO (April 2023) \n \n53 | P a g e Central Bank of Nigeria Economic Report \nSecond Quarter 2023 \nECONOMIC REPORT, SECOND QUARTER 2023 \nThis document is for CBN internal consumption \nexchange rate, and the expansion of credit by development finance \ninstitutions to growth-enhancing sectors, are expected to spur growth in the \nmedium-term. Potential challenges could be precipitated through likely \ncontraction in global demand, ongoing security issues, and subsisting \ninfrastructural deficit, still pose as downside risks to the economic growth. \nInflationary pressures may subsist in the near-term on account of the removal \nof fuel subsidies and subsequent higher prices of premium motor spirit, and \nthe depreciation of the naira. Moreover, the anticipated upward review of \nwages and electricity tariffs, alongside the adverse effects of climate change \non agricultural output, are likely to induce further inflationary pressures. \nNotwithstanding, the sustained tight monetary policy stance, coupled with \nimprovements in global supply chains are both expected to help dampen \ninflation. \nThe financial sector is expected to remain resilient in the second half of 2023. \nThe outlook mirrors the efforts of the CBN in continuously monitoring \nemerging vulnerabilities and risks in the system, including periodic stress-tests \nand examination exercises, and the provision of risk mitigants. \nThe outlook for Nigeria’s external position is optimistic, on the expectation of \nfavourable terms of trade, occasioned by sustained rally in crude oil prices and \nan improvement in domestic crude oil production. The positive outlook is \nsupported by the sustenance of crude oil price, propelled by the decision to \ncut production from May 2023, and gains from capital flows and remittances. \nLower crude oil earnings, abolishing of fuel subsidy removal, rising import bills \nand increased external debt servicing obligations could pose downside risks \nto the accretion of external reserves. In addition, the sustained monetary \npolicy tightening by central banks across the Advanced Economies increases \nthe risk of capital outflow.", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Quarterly_Economic_Reports/2nd Quarter ECR 2023,,.pdf"}
{"doc_id": "6dec74e38bd10f039a23d8d2388e4737", "text": "1\n \n \n \n \n \nCentral Bank of Nigeria Communiqué No. 71 of the Monetary Policy Committee \nMeeting, July 5, 2010 \n \nThe Monetary Policy Committee (MPC) met on 5th July, 2010 to review domestic \neconomic conditions during the first half of 2010 and the challenges facing the Nigerian \neconomy against the backdrop of developments in the international economic and \nfinancial environments in order to reassess the options for monetary policy for the \nremainder of the year. \n \nOn the global scene, the Committee noted that market anxiety over the fiscal positions of \nseveral Euro Area countries was posing new challenges for the world economy even as \nglobal economic recovery remained fragile. In order to address the weak fiscal position, \ngovernments in these countries have started unwinding the fiscal stimuli by cutting \ngovernment spending. Such cuts in public spending may have serious implications for \ngrowth and employment and may lead to a double dip recession with possible contagion \neffects on the global economy. If this were to happen, there may be an impact on global \ncommodity prices, including prices of oil, with knock-on effects on the government’s \nfiscal position and the foreign sector. However, recovery remained robust in most \ndeveloping and developed countries, with the exception of high-income European \ncountries where it stagnated. In this regard, the Committee commended the recent \ncommitment of the G-20 Summit in Toronto, Canada, which agreed to safeguard and \nstrengthen the recovery process to lay the foundation for strong, sustainable and balanced \ngrowth, as well as strengthen the financial systems against risks. The G-20 leaders of the \nworld’s major industrialized and emerging market economies welcomed measures so far \ntaken to sustain global recovery and strengthen the financial systems, while agreeing to \nwork together to curb public deficits, enhance economic growth and job creation as well \nas global prosperity. The Committee believes that the decision of the G-20 Summit \nwould refocus and galvanize global strategies towards the recovery process. \n \n \n2\nOn the domestic scene, the MPC observed that financial markets, though still fragile, \nhave recovered faster than expected, urging greater efforts in accelerating reforms in the \nother sectors of the economy. This is critical for economic growth. \n \nThe MPC also noted the sustained rebound in commodity prices which is helping to \nsupport growth in commodity producing regions, including Nigeria. However, it \nunderscored the need to diversify the economy to protect the country from the vagaries of \noil price volatility. The Committee believes that the inflation risk of the rebound in \nenergy prices appears mitigated by the continuing low levels of capacity utilization, weak \nprivate demand, good harvest, and well-anchored inflation expectations. In addition, as \nmentioned above, the European fiscal crisis and the recent slowdown in manufacturing \noutput in China and other Asian countries may moderate the robustness of the markets. \n \nKey Domestic Macroeconomic and Financial Developments \n \nOutput and Prices: \nThe Committee observed that the impressive output growth recorded in 2009 continued \nin 2010. Provisional data from the National Bureau of Statistics (NBS) indicates that real \nGross Domestic Product (GDP) grew by 7.23 per cent in the first quarter of 2010 up from \n4.50 per cent recorded in the first quarter of 2009. GDP was projected to grow by 7.68, \n7.76 and 8.13 per cent in the second, third and fourth quarters of 2010, respectively. \nOverall GDP growth for 2010 is projected at 7.74 per cent which is higher than the \nrevised figure of 6.66 per cent recorded in 2009. The non-oil sector is expected to \nremain the main driver of overall growth, with agriculture, wholesale and retail trade, and \nservices contributing 2.49, 2.03 and 2.11 per cent, respectively. \n \nThe Committee believes that the impressive growth forecasts reflected prospects for \nmoderate rainfall in 2010, which is expected to support the production of major crops \nacross the country, coupled with the current peace in the Niger-Delta, which has led to an \nincrease in crude oil and natural gas production. It, however, cautioned that there is a \nthick cloud hanging over commodity producing countries because of the current crisis \nfacing the Euro Area and emerging slowdown in manufacturing in major Asian countries \n \n3\nand the US as indicated above. In addition, the Committee highlighted the binding \nconstraints on the domestic economy namely; infrastructure inadequacy, lack of access to \nfinance, lack of requisite skills, unfavourable trade policy and a poor investment climate \nall of which have the potential to constrain economic growth. The MPC, therefore, \nstressed the need for government to pursue macroeconomic, structural and institutional \nreforms that appear to have slowed down in the past few years. \n \nThe year-on-year headline inflation declined to 11.0 per cent in May 2010 from 12.5 per \ncent in April and 11.8 per cent in March. Similarly, core inflation fell to 8.8 per cent in \nMay 2010 from 9.8 per cent in April and 9.5 per cent in March. The downward trend in \nthe domestic price level could be attributed to a number of factors, including the \ncontinuing underperformance of monetary aggregates, with the associated constrained \ndemand, adequate food supply, stable exchange rates and improvement in the availability \nof petroleum products, amongst others. Notwithstanding these developments, the MPC \nreiterated its earlier position on the threat of inflationary pressure arising from several \nfactors including the announcement effect of salary increase in the civil service and the \nrising food prices against the backdrop of the famine in neighboring Niger Republic. The \nCommittee restated its commitment to continue to monitor price developments with a \nview to taking appropriate measures to stem any inflationary threat and ensure that the \ndownside risk of inflation to growth is minimized. \n \nMonetary, Credit and Financial Market Developments: \nProvisional data showed that relative to end-December 2009, broad money (M2) declined \nby 0.2 per cent in May 2010, which, when annualized represented a contraction of 0.48 \nper cent, compared with the indicative growth target of 29.26 per cent for 2010. Reserve \nmoney (RM), which stood at N1,668.50 billion at end-December 2009, declined to \nN1,516.55 billion at end-April and N1,534.79 billion at end-May 2010. As at June 23, \n2010, the RM level of N1,618.02 billion was below the provisional 2010 second quarter \nindicative benchmark of N1,872.80 billion by 13.6 per cent. \n \n \n4\nAvailable data showed that in May 2010, aggregate domestic credit (net) grew by 12.38 \nper cent over the December 2009 level, and by 29.72 per cent when annualized, which \nwas still below the 2010 indicative target of 55.54 per cent. Credit to government (net), \nwhich grew substantially by 50.87 per cent over end-December 2009 (or 122.1 per cent \non annualized basis), was the major contributor. Credit to the private sector declined by \n1.88 per cent \n(or 4.51 per cent on annualized basis), in contrast to the growth benchmark of 31.54 per \ncent for 2010. The substantial growth of credit to government (net) against the backdrop \nof declining private sector credit reflected the risk aversion of the DMBs to lending to \nnon-government borrowers. The Committee believes that in order to provide the private \nsector with the necessary credit to grow the economy, further efforts are needed to unlock \nthe credit market in order to enhance the flow of credit to the real economy. \n \nThe rates at the inter-bank segments of the money market were much higher than what \nobtained in the preceding period owing to the short-lived tight liquidity conditions in \nMay 2010. Consequently, in May 2010, the average inter-bank call and Open-Buy-Back \n(OBB) rates rose significantly to 5.97 and 4.92 per cent, respectively, representing \nincreases of 470 and 381 basis points above the 1.27 and 1.11 per cent recorded in the \npreceding month. In line with the increase in rates at the inter-bank call and OBB \nsegments, the 7- and 30- day NIBOR rates increased by 397 and 311 basis points to 6.43 \nand 8.24 per cent, respectively, from 2.46 and 5.13 per cent in April. However, with the \nrelease of statutory revenue in the last week of May, the banking system became liquid. \nAs a result, the average inter-bank call and OBB rates declined from 7.71 and 7.07 per \ncent, respectively on May 25, 2010 to 1.17 and 1.10 per cent on June 1, 2010. Thereafter, \nrates remained stable and low, hovering around an average of 1.20 per cent. \nDevelopments in interest rates structure indicated that the retail lending rates were still \nrelatively high even though they were declining. The average maximum lending rate \ndropped to 22.56 per cent in May 2010, from 23.45 percent in December, 2009. Also, the \naverage prime lending rate dropped to 18.77 per cent in May 2010, from 19.03 per cent in \nDecember 2009. \n \n \n5\nSimilarly, the weighted average savings rate dropped marginally to 2.92 per cent in May \n2010 from 3.36 per cent in December 2009. The consolidated deposit rates declined to \n3.30 per cent in May 2010 from 6.13 per cent in December 2009. Thus, the spread \nbetween the average maximum lending rate and the consolidated deposit rate widened to \n19.27 per cent in May 2010 from 17.34 per cent in December, 2009. The Committee \nnoted that the key policy challenges remained the negative growth in money supply and \nprivate sector credit as well as the subsisting high lending rates in the face of declining \ninter-bank rates. \n \nThe Nigerian capital market is still showing some signs of recovery. The All-Share Index \n(ASI) increased from 20,827.17 at end-December 2009 to 25,554.35 as at 23rd June, \n2010, or by 20.70 per cent. Market capitalization (MC)—equities only, increased by 24.9 \nper cent from N4.98 trillion to N6.28 trillion over the same period. The number of deals, \nvolume and value of shares traded increased by 16.34, 19.23 and 100.00 per cent, \nrespectively. The increase in ASI and MC was principally due to share price increases in \nthe Banking, Food & Beverage and Oil/Gas sectors. The Committee welcomed the \ncontinuing improvement in the stock market, and noted the potentials for further recovery \ngiven the passage of the harmonized Asset Management Corporation (AMCON) Bill by \nboth chambers of the National Assembly. \n \n \n \nExternal Sector Developments: \nThe foreign exchange market remained relatively stable in the first half the year. During \nthe period- January 01 - June 16, 2010, total sales at 45 bi-weekly WDAS auctions \namounted to US$11,155.10 million, equivalent to an average of US$247.89 million per \nauction. In the corresponding period of 2009, the sum of US$12,995.48 million was sold \nat 70 daily and bi-weekly RDAS auctions, equivalent to an average of US$185.65 million \nper auction. \nIn May 2010, the average foreign exchange demand of US$459.26 million per auction \nwas recorded against the average sales of US$394.45 million, representing sales as a \n \n6\npercentage of demand of 85.89. As at June 23, 2010 average demand for the month \ndropped to US$315.73 million and, correspondingly, the average sales also declined, to \nUS$297.69 million, representing sales as a percentage of demand of 94.29 \n \nIn June 2010, the WDAS rate opened at N150.27US$1 (inclusive of 1% commission) and \nclosed at N150.09/US$1, at an average exchange rate of N150.24/US$1 for the month. \nThis represented an appreciation of 6 kobo (0.04 per cent) compared with the average \nclosing rate of N150.30/US$1 recorded in May 2010. The BDC segment of the market \nrecorded average selling rates of N153.26/US$1 and N153.86/US$1 in the months of \nMay and June 2010 respectively, representing a depreciation of 0.4 per cent. \n \nAt the inter-bank market, the average selling rates for May and June 2010 were \nN151.48/US$ and N151.35 respectively, representing a 0.09 per cent appreciation. The \nWDAS and interbank segments of the foreign exchange market witnessed mild naira \nexchange rate appreciation while the BDC segment experienced mild depreciation. Thus, \nthe stability of the naira exchange rate attained in the foreign exchange market since the \nfirst half of 2009 continued in the first half of 2010. The Committee observed that the \nnaira exchange rate has remained stable in all segments of the market during the review \nperiod, reflecting increased confidence in the Naira and the efficacy of the current \nexchange rate policy stance. It believes that the relative stability in the foreign exchange \nmarket is likely to be sustained in the near term. The Committee will, however, continue \nto monitor developments in the market to ensure that measures are taken to eliminate \nspeculative demand and volatility in the market. \n \nThe Gross external reserves stood at US$37.63 billion on 23rd June, 2010 representing a \ndecrease of US$1.19 billion or 3.06 per cent when compared with the level of US$38.82 \nbillion as at 31st May 2010. The Committee, however, noted that the current external \nreserves level is still adequate as it would finance 16 months of import, compared to the \ninternationally recommended benchmark of 3 months of import cover for a country’s \nexternal reserves. \n \n \n7\nThe Committee’s Considerations \n \nAgainst the backdrop of the foregoing, the MPC noted with satisfaction the continued \nmacroeconomic stability. It, however, stressed the need to grow the real sector on a \nsustainable basis. It also reiterated the possible inflation risks highlighted at the last MPC \nmeeting, in the light of the anticipated budget deficit and the operationalisation of the \nproposed Asset Management Corporation. However, monetary aggregates are still under-\nperforming and the Asset Management Corporation is yet to take-off. On balance, \ntherefore, the inflation threat remained subdued in the short to medium term. In addition, \nsome of the approved quantitative easing measures are yet to be completely implemented. \nThe Committee, therefore, considered it appropriate to continue to monitor developments \nwith a view to intervening as the need arises. \n \nDecisions \nIn the light of the above, the Committee decided that : \n \n \n1. No changes are made to the current policy stance viz: the MPR should remain \nunchanged at 6.0 per cent; and \n \n2. The asymmetric corridor of 200 basis points above and 500 basis points below the \nMPR, respectively, are to be retained. \n \n \n \n \nSanusi Lamido Sanusi \nGovernor, \nCentral Bank of Nigeria \nAbuja \n \nJuly 5, 2010", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/central bank of nigeria communiqué no. 71 of the monetary policy committee.pdf"}
{"doc_id": "5fcbf7cebfb2b0ecb58ad060d8ae845f", "text": "1\nCentral Bank of Nigeria Communiqué No. 69 of the Special Monetary \nPolicy Committee Meeting, April 15, 2010 \n \nThe Monetary Policy Committee (MPC) held a special meeting on April 15, \n2010 to, among other things, consider the modalities for the injection of \nN500 billion into the real economy in continuation of the current \nquantitative easing policy. It also reviewed domestic economic conditions \nduring the first quarter of 2010 against the backdrop of the global economic \nand financial developments with a view to guiding monetary and financial \nsector policies for the rest of 2010. \n \nThe MPC noted the persisting tight credit conditions and the continuing \nunder-performance of key monetary aggregates which had informed its \nearlier decision to embark on a quantitative easing policy to be implemented \nthrough investment in debentures to be issued by the Bank of Industry \n(BOI). The Committee commended the co-operation of key stakeholders in \npreparing the modalities for the injection of the N500 billion financing \nfacility for the emergency power projects dedicated to industrial clusters and \nrestructuring/refinancing of DMBs’ exposures to the manufacturing sector \nand SMEs. It stressed the need for even greater co-operation in fast-tracking \non-going reform efforts in the banking sector to ensure the smooth flow of \ncredit to the real sector of the economy as well as energizing reforms in the \npower and other economic infrastructure sectors, to promote private \nsector/foreign investment and employment-generating growth. In this regard, \nthe MPC welcomes the attention to the power sector by the Federal \nGovernment. The Committee emphasized that while economic reforms and \nhuman capital development remain key ingredients for economic growth, \n \n2\nthe Bank is mindful of the supportive role that macroeconomic and \nfinancial stability plays in achieving sustainable growth and, will continue to \nfocus attention on these two areas. \n \nOn the global scene, the Committee noted that the rebound in global \neconomic activity which started in the second half of 2009, has been \nsustained. The rebound was driven largely by the fiscal policy stimuli \nundertaken in both the developed and emerging market economies in \nresponse to the global financial crisis and the ensuing economic slowdown. \nIn the wake of the financial and economic crises, monetary policy was \nconsiderably eased with interest rates down to record levels in most \nadvanced and emerging markets, and central bank balance sheets expanded \nconsiderably to accommodate the stimulus packages. The key concerns, \nhowever, remain the speed and sustainability of the recovery process which \nis progressing at varying degrees across the different regions. \n \nThe recovery in the advanced economies is still weak with real output \nprojected to remain below its pre-crisis level until late 2011. However, \ngrowth in the emerging and developing economies is expected to recover \nfaster given their stronger initial economic conditions and swift policy \nresponses. \n \nThe MPC also noted the continuing rebound in commodity prices, \nparticularly crude oil prices, which is helping to support growth in \ncommodity producing regions, including Nigeria. However, the inflation risk \nof the rebound in energy prices appears to be mitigated by the subsisting low \n \n3\nlevels of capacity utilization, weak private demand and well-anchored \ninflation expectations. \n \nThe MPC further observed that while financial markets have recovered \nremarkably faster than expected, financing conditions, especially for \nbusinesses and firms, were likely to remain weak in the near-term as \nfinancial institutions continue to maintain a cautious approach to credit \nextension. It noted the relative stability prevailing in most segments of the \nmarket and the need for policies to ensure their sustenance. \n \n Key Domestic Macroeconomic and Financial Developments \n \nOutput and Prices: \nThe robust output growth recorded in 2009 continued in 2010. Provisional \ndata from the National Bureau of Statistics (NBS) indicates that real Gross \nDomestic Product (GDP) grew by 6.68 percent in the first quarter of 2010, \ndown from 7.44 per cent in the fourth quarter of 2009, but up from the 4.50 \nper cent recorded in the first quarter of 2009. The growth was largely driven \nby the non-oil sector. Overall GDP growth for 2010 was projected at 7.53 \nper cent which is higher than the revised estimate of 6.66 per cent recorded \nin 2009. Quarterly GDP growth rates of 7.24, 7.36 and 8.51 per cent was \nprojected for the second, third and fourth quarters of 2010, respectively. \n The non-oil sector was expected to remain the main driver of overall \neconomic growth, with agriculture, wholesale and retail trade, and services \ncontributing 2.01 per cent, 2.10 per cent and 2.09 per cent, respectively. The \nCommittee noted that the impressive growth forecasts reflected prospects for \nmoderate rainfall in 2010, which would boost crop production and the \n \n4\nrelative peace in the Niger-Delta, which could enhance crude oil and natural \ngas production. \n \nThe year-on-year headline inflation rose from 12.0 per cent in the last \nquarter of 2009 to stabilize at 12.3 per cent in January and February 2010. \nSimilarly, core inflation stabilized at 10.1 per cent in January and February \n2010, up from 9.7 per cent recorded in the last quarter of 2009. The stability \nin the domestic price level could be attributed to a number of factors, \nnamely, the continuing monetary contraction, the delay in the passage of the \n2010 federal budget and the improvement in the supply of petroleum \nproducts, amongst others. Notwithstanding these developments, the \nCommittee restated its earlier position that the threat of inflationary pressure \nin the near-to-medium term remains real, but that it will continue to monitor \nprice developments in the months ahead with a view to creating an enabling \nenvironment for sustainable growth and employment. \n \nMonetary, Credit and Financial Market Developments: \nProvisional data showed that relative to end-December 2009, broad money \n(M2) declined by 0.23 per cent at end-February 2010, which, when \nannualized represented a decline of 1.38 per cent, compared to the indicative \ngrowth target of 29.26 per cent for 2010 and the annualized M2 decline of \n5.16 per cent in the corresponding February of 2009. The reserve money \n(RM), which stood at N1,668.50 at end-December 2009, declined to \nN1,574.33 and N 1,636.60 billion in January and February 2010, \nrespectively, but rose to N 1, 782.21 billion in March 2010. As at April 8, \n2010, the RM level of N1, 710.0 billion was just below the provisional 2010 \n \n5\nsecond quarter indicative benchmark of N1, 872.80 billion by N162.76 \nbillion or 8.69 per cent. \n \nAvailable data showed that in February 2010, aggregate domestic credit \n(net) grew by 2.66 per cent over the December 2009 level, and by 15.96 per \ncent when annualized, which is higher than the annualized decline of 55.6 \nper cent recorded in the corresponding period of 2009, but below the 2010 \nindicative target of 55.54 per cent. Credit to government (net), which grew \nby 17.84 per cent, was the major contributor to the growth in aggregate \ncredit (net) in February 2010, as credit to the private sector declined, by 1.97 \nper cent. The annualized growth rate of credit to the private sector as at \nFebruary 2010, was -11.82 per cent, as against the provisional benchmark of \n31.54 per cent for 2010. The substantial growth of credit to government \n(net) reflects the risk aversion of the DMBs and suggests the possible \ncrowding out of private sector credit. \n \nDuring the first quarter of 2010, the downward slide in interest rates in the \ndomestic money market, which began in July 2009, following the Bank’s \ndecision to guarantee interbank transactions, continued. The low rates \nprovide ample evidence of the surplus funds in the banking system that \nresulted from the huge volume of funds injected through fiscal operations. \nThe weighted average interbank call rate, which was 2.89 per cent as at end-\nDecember 2009, declined to 2.48, 2.17, and 1.50 per cent in January, \nFebruary, and March, 2010, respectively. Similarly, the securitized open-\nbuy-back (OBB) rate, which was 2.64 per cent at end-December 2009, \ndeclined to 2.46, 2.20, and 1.31 per cent in January, February, and March \n \n6\n2010, respectively, compared with the monetary policy rate (MPR) of 6.00 \nper cent and Standing Deposit Facility rate of 1.0 per cent. \n \nNotwithstanding the falling interbank rates, the DMBs’ interest rates \nstructure failed to reflect this trend as the high retail lending rates persisted. \nThe average maximum lending rate increased to 23.32 percent in February, \n2010 from 23.18 per cent in the preceding month compared with 23.45 and \n23.1 per cent in December and November 2009, respectively. The average \nprime lending rate, on the other hand, declined marginally to 18.28 per cent \nin February 2010 from 18.38 per cent in January. It was 19.03 and 18.93 per \ncent, respectively, in December and November, 2009. \n \nThe weighted average savings rate rose to 3.38 per cent in February 2010 \nfrom 3.33, 3.36 and 3.35 per cent in January 2010, December and November \n2009, respectively. The consolidated deposit rate, which remained \nunchanged at 6.13 per cent in December 2009 and January 2010 dropped to \n5.53 percent in February 2010. Thus, the spread between the average \nmaximum lending rate and the average consolidated deposit rate widened to \n17.79 per cent in February 2010 from 17.05 per cent in January 2010 and \n17.34 per cent in December, 2009. The Committee noted that the key policy \nchallenges remain the negative growth in credit to the private sector, high \nlending rates and widening interest rate spread despite the declining \ninterbank rates and relative surplus liquidity in the banking system. \n \nCompared to the last quarter of 2009, the Nigerian capital market is showing \nsigns of recovery. The All-Share Index (ASI) increased by 30.7 per cent \nfrom 20,827.17 as at end-December 2009 to 27,216.03 on 7th April, 2010. \n \n7\nMarket Capitalization (MC) also increased, by 32.1 per cent, from N4.98 \ntrillion at end-December 2009 to N6.58 trillion on 7th April 2010. The \nnumber of deals, volume and value of shares traded increased by 115.6, \n134.6 and 326.1 per cent, respectively, during the review period. The \nincrease in ASI and MC was partly due to share price increases in the \nBanking, Food & Beverage and Oil/Gas sectors. \n \nThe Committee welcomed the improvements in the stock market, and noted \nfurther prospects for continuing recovery with the passage of the Asset \nManagement Corporation Bill. It, however, emphasized that the recovery of \nthe capital market does not necessarily translate to economic recovery as the \nreforms initiated in the other sectors of the economy needed to be carried \nthrough in order to grow the economy. The Committee, therefore, called for \nthe political will and commitment to see these reforms through. \n \nExternal Sector Developments: \nThe foreign exchange market remained relatively stable in the first \nthree months of 2010. At the WDAS, the review period opened with an \nexchange rate of N149.08/US$1 (1% commission inclusive) and closed at \nN149.78/US$1, with an average closing rate of N149.94/US$1 for the \nquarter. When compared with the average closing rate of N146.87/US$1 \nrecorded during the first quarter of 2009, this represented a depreciation of \nN3.07 (2.05 percent). The average exchange rate depreciated marginally at \nthe inter-bank market from N150.35/$ in the fourth quarter of 2009 to \nN150.43/$ in the first quarter of 2010. In the same vein, the premium \nbetween the WDAS average exchange rate and the inter-bank market rate \n \n8\nremained low at N1.98/$ (1.31%) in the first quarter of 2010, while that \nbetween the WDAS average exchange rate and the BDCs rate narrowed \nfrom N4.58 (3.0%) in the fourth quarter of 2009 to N4.02 (2.63%) in the \nfirst quarter of 2010. \n \nThe Committee observed that the naira exchange rate has remained stable in \nall segments of the market during the first quarter and believes that if the \ncurrent exchange rate policy stance of liberalizing the foreign exchange \nmarket, with a view to enhancing foreign exchange supply, remains in place, \nthe relative stability in the foreign exchange market and the exchange rate, is \nlikely to be sustained in the near term. The Committee will, however, \ncontinue to monitor developments in the market to ensure that measures are \ntaken to eliminate speculative demand. \n \nThe gross external reserves stood at US$40.68 billion as at 31st March, 2010, \nrepresenting a decrease of US$0.71 billion or 1.71 per cent relative to the \nlevel of US$41.39 billion as at 28th February 2010. Although the \nCommittee noted that the external reserves were sufficient to finance 17 \nmonths of imports, which were well above the internationally recommended \n3-months import cover, it believed that with the rising price of crude oil in \nthe international market in recent months, coupled with the improvement in \noutput with peace in the Niger Delta, there is likely to be an improvement in \nthe level of foreign exchange reserves in the near term. \n \nThe Committee’s Considerations \nThe principal concerns of policy at this point in time were identified as the \nfollowing: \n \n9\n1. Ensuring that the quantitative easing adopted by the Committee \nactually translate to injection of credit to the private sector players in \nthe real economy; \n2. Establishing some correspondence between the monetary policy rate \n(MPR) and prime and maximum lending rates of DMBs in order to \nestablish a proper transmission channel from policy rate movements \nto market interest rates; and \n3. Maintaining macroeconomic stability and stimulating growth while \nremaining vigilant with respect to inflation and capital market asset \nprice bubbles. \n \nIn considering the modalities for the restructuring/refinancing programme, \nthe Committee was concerned about the need for a proper definition of \nSMEs that will not exclude many potential beneficiaries thereby limiting the \neffectiveness/impact of the intervention. In this regard, the MPC noted the \nexistence of several definitions of SMEs, but felt that by providing a limit to \nthe size of the loan per borrower from an institution more potential \nborrowers would be covered. \n \nThe Committee also reviewed developments in the economy during the first \nquarter of 2010. The MPC noted with concern the persisting high lending \nrates despite the current low inter-bank and deposit rates, and as a \nconsequence the wide spread between lending and deposit rates. This, the \nCommittee attributed to inefficiency in cost management and unrealistic \nprofit expectations and targets. It believed that promoting transparency in the \npricing and setting of rates by DMBs could help to drive down lending rates. \nIn this regard, DMBs would be required to regularly publish and submit their \n \n10\nrisk-based interest rate pricing model to the CBN. In addition, the banks \nwould be required to provide a statement showing the relationship between \nthe MPR and their prime and maximum lending rates. \n \nFor the avoidance of doubt, the MPC will not fix lending and deposit rates \nby fiat. However, every bank will be required to disclose the maximum \nspread it charges above the MPR to its prime customers and the risk \npremium it charges between prime and maximum lending rates. The pricing \nmodel would also disclose the basis for the spread and principal components \ncovered. \n \nThe articulation of the pricing model in this mode and its disclosure to the \ngeneral public will serve two purposes. First, by providing visibility on \nrelative efficiency of financial institutions, banks will be encouraged to seek \nprofitability by driving down costs and charging competitive rates rather \nthan charging excessive rates of interest. Second, by explicitly stating prime \nand maximum lending rates as a fixed spread over MPR, the policy rate \nbecomes an effective tool for driving lending rates up or down as policy \nstance dictates. \n \nThe MPC noted with satisfaction the existing macroeconomic conditions. In \nthis regard, the Committee restated its commitment to monitoring \ndevelopments in the economy and stands ready to take appropriate action \nwhen the need arises. \n \n \n \n11\nDecisions \nIn the light of the above, the MPC: \n \n1. Approved the technical committee’s recommendations with respect to \nmodalities for the Refinancing/Restructuring of DMBs facilities to \nmanufacturers with N1Billion as the maximum loan size a bank may \nrefinance for a single borrower. The guidelines will be released \nshortly. \n \n2. Directed that banks be required to submit their Risk-based Interest \nRate Pricing Model to the Central Bank of Nigeria on a monthly basis \nwhich will be published. A circular to this effect will be issued \nshortly. Loan pricing, henceforth be stated as fixed spread above \nMPR, and shall be adjusted along with MPR movements. \n \n3. Retained the MPR at 6 per cent and existing asymmetric corridor \naround the MPR at +2.0 per cent and -5.0 per cent. \n \n4. Endorsed complementary policies being put in place by the Board of \nthe CBN, especially the revised guidelines for loan loss provisioning \nfor preferred sectors, the N200 billion guarantee for real sector credit \nand regulations governing margin lending. \n \n5. Noted with satisfaction the progress of the AMCON Bill through the \nNational legislature and urged the CBN to continue in its effort \ntowards expedited passage of the Bill and speedy implementation. \n \n \n \n \nSanusi Lamido Sanusi \nGovernor, \nCentral Bank of Nigeria \nAbuja \n \nApril 15, 2010", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/central bank of nigeria communiqué no  69 issued on april 15, 2010.pdf"}
{"doc_id": "a6e2e74cb5c37a44a09fb163919744b1", "text": "1 \n \nCentral Bank of Nigeria Communiqué No. 89 of the Monetary Policy Committee \nMeeting of Monday and Tuesday, May 20 and 21, 2013 \n \nThe Monetary Policy Committee met on May 20 and 21, 2013 with 10 out of the \n11 members in attendance. The Committee reviewed the conditions and \nchallenges that confronted the domestic economy in the first five months of \n2013, and reassessed the short-to-medium term monetary policy options in the \nlight of the fragile global economic and financial environment. The Committee \nnoted that one of the members, Professor Sam Olofin has left the Board of the \nCentral Bank and, therefore, ceases to be a member of the MPC. The \nCommittee recognized his tremendous contributions to its deliberations over the \nyears and thanked him for his services. \n \nInternational Economic Developments \nGlobal economic recovery continues to be fragile due to suppressed growth \nand weakness in key financial markets, including the euro area and Japan. \nHowever, the emerging market economies and Sub-Sahara African (SSA) \ncountries continued to show resilience. \n \nGlobal growth outlook remains subdued but promising. It is forecast to average \n3.2 per cent in 2013. In the advanced economies, output is estimated to grow \nby 1.2 per cent in 2013 compared with 1.3 per cent in 2012. In the US, budget \ndeficit figures are better than projections due to automatic spending cuts and \nimproved revenues boosted by dividend payments to the Treasury from \nmortgage banks bailed out during the crisis. Unemployment figures are also \nimproving. Although the European Central Bank has commenced a wave of \nmonetary easing, the euro area is expected to remain in recession with output \ncontracting by 0.3 per cent compared with a contraction of 0.6 per cent in \n2012. The EU made steady progress in establishing a Banking Union, pursuing a \n2 \n \nthree-pronged \ninitiative \nof \nthe \nSingle Supervisory \nMechanism; \nDeposit \nGuarantee System; and a Recovery and Resolution Scheme. The development \nhas been adjudged as an important step towards recovery. The regime of \nquantitative easing commenced by the Bank of Japan holds prospects for \nJapanese recovery arising from a weaker Yen and improved competitiveness of \nJapanese exports. However, the downside risk lies in Japan‟s demographics \nwhose key feature is a low propensity to consume, given its large population of \npensioners-about 30 per cent. With slowing growth momentum in the emerging \nmarkets, global output is forecast to remain around the 2012 level. \n \nThe emerging and developing economies as a group are forecast to grow by \n5.3 per cent in 2013, with SSA growing at 5.6 per cent. These economies have \ncontinued to face the challenge of adjusting macroeconomic policy to \ncompensate for the weak external environment, particularly shocks induced by \ndevelopments in the advanced economies. The IMF suggests that with the \nprospects of improvements in the global economy, policy recalibration in a \nnumber of emerging market economies should address risks from sustained \nrapid credit expansion and high asset prices. Growth in these economies has \nsomewhat moderated compared with last year. The strong GDP growth rate of \n7.7 per cent recorded in the first quarter of 2013 for China was countered by \nweaker rates in the other economies. \nDomestic Economic and Financial Developments \nOutput \nThe National Bureau of Statistics (NBS) forecasts real GDP growth rate of 6.72 per \ncent for Q2, 2013, an improvement over the Q1 estimate of 6.58 per cent. The \nmajor driver of overall growth remains the non-oil sector led by services; \nagriculture; and wholesale and retail trade. The Committee noted that the \nrelatively robust output growth projection for 2013 was hinged on expected \n3 \n \nfavourable conditions for increased agricultural production and other policy \ninitiatives aimed at stimulating the economy. However, the Committee noted \nwith caution, the high GDP growth projection in view of the extant risk factors \nsuch as widespread insecurity, weak infrastructure and probable flooding from \nthe projected heavy rains in some parts of the country. In addition, the state of \nemergency in the North East and the accompanying military operations in that \naxis have the potential to adversely affect economic activities generally, \nincluding agricultural production and food prices, as well as consumer demand. \nThe Committee also noted that although most sectors of the economy showed \nimproved growth performance in Q1 of 2013 when compared with Q1 2012, this \nwas not the case with respect to the key sectors like agriculture, \ntelecommunications and distributive trade. Concern was also expressed over \nshort-term prospects in the oil sector, mainly around possible reduction in oil \nprices and continuing leakages in oil production due to bunkering and other \nillegal activities. \n \nPrices \nHeadline inflation increased from 8.6 per cent in March to 9.1 per cent in April, \nremaining within the target range for the fourth consecutive month. Food \ninflation was 10.0 per cent year-on-year in April compared with 9.5 per cent in \nMarch, while core inflation declined further to 6.9 per cent from 7.2 per cent in \nMarch. On a month-on-month basis, inflation showed broad-based moderation \nacross almost all components with the exception of imported food which may \nbe largely a reflection of the new tariff regime. \n \nThe inflation outlook remains relatively benign with projections of headline \ninflation remaining in the single digit range for the next six months. This result \nreflects a combination of base effect and the success of tight monetary policy \nleading to muted growth in the monetary aggregates and exchange rate \n4 \n \nstability. The principal risks to the outlook remain fiscal spending and possible \npressures on the exchange rate from any attrition to reserves caused by \ndeclining revenues as a result of output leakages. \n \nMonetary, Credit and Financial Market Developments \nBroad money supply (M2) grew by 4.44 per cent in April 2013 over the level at \nend-December 2012. When annualised, M2 grew by 13.3 per cent, compared \nwith the contraction of 0.03 per cent in the corresponding period of 2012. The \ngrowth in M2 was slightly below the growth benchmark of 15.2 per cent for 2013. \nAggregate domestic credit (net) grew by 17.46 per cent in April 2013 which \nannualized to a growth rate of 52.38 per cent over the end-December 2012 \nlevel, compared with the contraction of 6.12 per cent recorded in the \ncorresponding period of 2012. \nInterest rates in the interbank money market moved in tandem with the level of \nliquidity in the banking system. The average inter-bank call and OBB rates which \nopened at 10.21 and 10.23 per cent on March 19 closed at 10.86 and 10.91 per \ncent, respectively, on May 16, 2013. The average maximum lending rate rose \nmarginally to 24.53 per cent in April, 2013 from 24.49 per cent in March, 2013. \nSimilarly, the average prime lending rate, rose to 16.65 per cent in April 2013, \nfrom 16.61 per cent in March. \nThe Committee noted the continued recovery in the Nigerian capital market as \nequities market indicators were positive in the review period. The All-Share Index \n(ASI) increased by 31.4 per cent from 28,078.81 on December 31, 2012 to \n36,907.81 on May 17, 2013. Market Capitalization (MC) also increased by 31.5 \nper cent from N8.97 trillion to N11.80 trillion during the same period. Improved \nearnings, increased capital inflow and portfolio investments as well as investor \nconfidence in the economy contributed to the up-swing in stock prices. The \nCommittee also noted the reported increase in the share of domestic players in \n5 \n \nthe capital market, thus reducing the risk of major shocks due to slowdown in \nforeign participation. \n \nExternal Sector Developments \nAt the Wholesale Dutch Auction System (wDAS), interbank and the BDC \nsegments of the foreign exchange market, the exchange rate opened at \nN157.32/US$, N158.70/US$, and N160.00/US$ on 20th March 2013 and closed at \nN157.30/US$, N158.33/US$, and N159.50/US$, respectively, on May 18, 2013. In all \nthree segments, the naira exchange rate appreciated in the review period. This \ndevelopment reflected the effects of improved supply of foreign exchange to \nthe market. Both the average and monthly premia for the review period \nremained insignificant, indicating the effectiveness of current policy measures. \nThe Committee also expressed satisfaction with the significant accretion to \nexternal reserves which stood at US$49.13 billion as at May 16, 2013. This \nrepresents an increase of US$5.3 billion or 12.1 per cent above the level of \nUS$43.83 billion at end-December 2012. This level of reserves could finance \napproximately 13 months of import. \n \nThe Committee’s Considerations \nThe Committee was pleased with the prevailing macroeconomic stability-\nmoderation in all measures of inflation on month-on-month basis; stable banking \nsystem and exchange rate and robust external reserves. It commended the \nagreement reached between the CBN and AMCON on the settlement of \noutstanding AMCON obligations to all private sector investors by December \n2014 and to repay the N3.6 trillion debts held by the CBN under a new \nrefinancing and restructuring arrangement within a period not exceeding ten \nyears at single-digit interest rate. The Committee noted that the repayments and \nrefinancing arrangements would have no adverse monetary policy implications; \n6 \n \nbut rather increase confidence in the financial system. Also, under this \narrangement, it is unlikely that banks will be required to contribute more than 0.5 \nper cent of their Balance Sheets annually to the sinking fund. By October 2014, \nthe CBN will be the sole creditor to AMCON, holding bonds guaranteed by the \nFederal Government of Nigeria. The Federal Government will therefore have no \ncontingent liability to any party other than the CBN, and the Bank will recover its \ndebt from AMCON recoveries and contributions to the Sinking Fund by the \nbanks. Since the CBN supervises and regulates the banks and AMCON, this \nexposure is considered a fair risk. \n \nThe Committee was concerned about the threat posed by developments in the \noil sector arising from uncertain oil market environment, high output leakages \narising from oil theft which has negatively affected the oil sector‟s contribution \nto GDP and the prospects for declining output if the state of affairs continues. \nThe Committee observed that the accretion to reserves resulted principally from \nincreased portfolio capital inflows. The Committee noted the potential effect of \nthis development on exchange rates, reserves and the capital account in the \nevent of capital flow reversal, and thus stressed the need to maintain stability \nand retain confidence of investors in the consistency of monetary policy. \n \nThe Committee also expressed concern over the low level of credit growth to \nthe private sector and traced this to the crowding out effect of high growth in \ncredit to the public sector. The Committee noted the N1.02 trillion increase in \nclaims on government and the N1.11 trillion drawdown on savings between \nJanuary and April 2013 and particularly the monetization of US$1 billion in April \n2013, being proceeds of the Excess Crude Account. The combined effect of \nnew borrowings and reduced savings was an increase in net credit to the \ncentral government of over N2 trillion in the first four months of 2013. The \nevidence points to an increase in the rate of government expenditure in 2013 \n7 \n \nwhen compared with 2012. In addition, the recent military action in the North-\nEast will result in additional spending. Although the Government has announced \nthat there will be no supplementary budget, the Coordinating Minister for the \nEconomy and Honorable Minister of Finance has already announced that there \nwill be a drawdown on a Contingency Vote embedded in the 2013 Budget to \ncover emergencies. Overall, the Committee is of the view that government \nspending will constitute a major risk to the inflation and exchange rate outlook, \nthus advising prudence in monetary policy action at this time. \n \nThe Committee further noted that in spite of increased borrowings, yields on \nFGN bonds have been declining steadily, signaling the impact of increased \ninflows while equity prices have been trending upwards. The evidence does not, \ntherefore, support claims of monetary policy being too tight. The Committee \nwas of the view that the principal risks to long-term stability can be addressed \nthrough diligent implementation of sound policies of fiscal consolidation and \nefficient sectoral policies underpinned by structural reforms. These are required \nto attract long term foreign capital inflow that would make the gains of \nmonetary policy sustainable, and also support credit extension to the private \nsector players. \n \nConsequently, the Committee weighed the following options: \n \n(i) A reduction in rates in view of declining core inflation, stable exchange rates \nand relative reserve accretion. Against the backdrop of sustained pressure to \nease the stance of monetary policy, the Committee considered the imperative \nof signaling its sensitivity to the concerns expressed about high lending rates in \nthe economy; \n \n8 \n \n(ii) Retaining current monetary policy stance to sustain the macroeconomic \ngains of tight monetary policy and to continue to rein-in inflationary \nexpectations. \n \nThe Committee’s Decisions \nThe Committee considered and acknowledged the merits of option 1 but \nrejected it as being premature in view of the potential risk factors in the horizon \nposed by recent developments which would necessitate increased fiscal \nexpenditure in the short-to-medium term, resulting in a resurgence of inflationary \npressures. The Committee considered and decided by a majority of 7 votes to \nhold and 3 votes to reduce the MPR by 50 basis points. Thus, by a majority vote \nof 7 members to 3, the MPC voted to maintain the current policy stance i.e. \nretain the MPR at 12 per cent with a corridor of +/-200 basis points around the \nMPR; retain the Cash Reserve Requirement at 12 per cent and Liquidity Ratio at \n30 per cent; with the Net Open Position at 1.0 per cent. \n \nIn the final analysis, the Committee was convinced that in view of the successes \nachieved in all fronts - banking stability, low inflation, exchange rate stability, \nstrong reserve buffers and recovery in the equities market, there is no reason at \nthis point to change a policy that has worked so well. \n \nThank you. \n \nSanusi Lamido Sanusi, CON \nGovernor \nCentral Bank of Nigeria \n21st May 2013 \n \n9 \n \nPERSONAL STATEMENTS BY MPC MEMBERS \n \n1.0 ALADE, SARAH \nHeadline inflation increased to 9.1 percent in April from 8.6 percent recorded in \nMarch, 2013. This increase is due to a combination of base effect of the partial oil \nsubsidy removal in 2012; and the dwindling of local food supply as planting season \ncommence, suggesting that inflation may be expected to stay elevated in the \ncoming months. In the international scene, there are some bright spots, but overall, \ngrowth remains subdued with implication for spillover on the Nigeria economy in terms \nof export earnings, exchange rate stability and reserve build-up. On the domestic \nfront, first quarter GDP grew by 6.6 percent compared to 6.9 percent recorded in the \nlast quarter of 2012. Based on this mixed developments, I am inclined to support a hold \nin Monetary Policy Rate (MPR) and Cash Reserve Requirement (CRR). \n \nThere are some bright spots in the global scene, but some weaknesses remain. The \nEurozone economies are in the longest recession since record began in 1995. Gross \nDomestic Product (GDP) for seventeen countries using the euro fell for the sixth straight \nquarters in a row to -0.2 percent, although it is an improvement from -0.6 percent \nrecorded in last quarter of 2012, but it is still a 1 percent annual contraction in GDP \ngrowth. This is as a result of reduced government expenditure and tax increases. \nGermany which contribute more than a third of euro zone‟s economic output grew by \na weaker than expected 0.1 percent in the first quarter. As a major trading partner, this \nhas implication for the Nigeria economy in terms of export earnings and reserve build-\nup. Although the European Central Bank predicts slow recovery in the coming months, \nthere are still many risks to this prediction. In the United States, the effect of fiscal \nconsolidation is being felt in many areas, although latest unemployment data is \npositive. These mixed development calls for a cautious approach to monetary policy \nuntil condition stabilizes. \n \n10 \n \nThe achievement of single digit inflation should be taken with cautious optimism. The \ndecrease in inflation numbers to single digit in four straight months is a laudable \nachievement. This is a welcoming development, signifying the benefit of past \nmonetary policy actions and overall policy coordination that has helped sustain the \nimproved macroeconomic environment. While this development coupled with high \nreserve build-up present a strong argument for monetary easing at this point, \nespecially to aid credit creation and flows to real sector of the economy, there are \nalso compelling arguments for retaining the current stance given that inflation edged \nup to 9.1 percent in April from 8.6 percent in March, suggesting that the threat of \ninflationary pressure still looms on the horizon. In addition, it is important to recognize \nthat there is a limit to the efficacy of monetary policy in terms of credit flow to the real \nsector, since structural imbalance in the economy plays a major role. In addition, with \ndownside risks such as depressed global growth and uncertainties in the domestic \neconomy, a rushed monetary easing may not be in the interest of economic stability. \nFurthermore, the start of the planting season is expected to further put upward \npressure on domestic food prices and overall headline inflation in the coming months, \nas consumable supplies dwindle, suggesting that the inflation outlook in the coming \nmonths may not be completely benign. \n \nDomestic output is trending downwards. The 2013 first quarter GDP grew by 6.6 percent \nas against 6.99 percent recorded in the fourth quarter of 2012. Non-oil sector grew by \n7.9 percent compared to its contribution of 8.2 percent in the fourth quarter of 2012. \nThe oil sector‟s contribution to GDP declined by -0.5 percent in the first quarter as \nagainst a decline of -0.2 percent decline in the last quarter of 2012. These \ndevelopments can be attributed to a combination of insecurity in the northern part of \nthe country that has affected agricultural production and oil theft and pipeline \nvandalism in the Niger Delta. Although National Bureau of Statistics (NBS) projections \nsuggest a GDP growth of 6.75 percent for the year, however, the achievement of this \n11 \n \ngoal will require careful planning and maintenance of stable macroeconomic \nenvironment. \n \nMoney market conditions suggest ample liquidity in the banking system. While money \nmarket rates have increased form the rates obtainable before the last Monetary Policy \nCommittee (MPC) meeting of March, 2013, great effort have been employed by the \nCentral Bank to achieve these rates through frequent Open Market Operations (OMO) \nauctions. CBN securities worth N8.830.00 billion were offered between January 2 and \nMay 17, 2013, and this amount was substantially oversubscribed, suggesting excess \nliquidity in the system. Growth in aggregate money resulted in a decline in maximum \nlending rate to 22.3 percent in April from an average of 25 percent in the first three \nmonths of the year. This development coupled with anticipated upward inflationary \npressure would suggest that monetary easing at this time may be counterproductive. \n \nOil output and production are hovering below projections while international oil price \nis starting to trend downwards. The continued slow-down in global growth and \nincreased domestic oil production in the United States is affecting global oil prices and \ndemand. Oil output in the 2013 is lower than budgeted as a result of pipeline \nvandalism and oil theft, in addition to downward trend in oil prices in recent months. \nOverall production in the first quarter of 2013 remained below 2012 average \nproduction. According to WEO, April 2013 report, average crude oil prices fell by 3.7 \npercent in April to $98.9 per barrel on weak demand, higher stocks and continued \ngains in supply. If this trend persist, it would have far reaching implications for the \nNigeria economy in terms of decreased oil revenue, increased debt and adverse \nconsequences for external reserve build up and volatility in exchange rate. In the face \nsuch risk, monetary policy should do all it can to dampen the adverse effects on the \neconomy. \n12 \n \nBase on the above, I recommend a hold on Monetary Policy Rate and Cash Reserve \nRequirement (CRR), to consolidate on the macroeconomic gains. \n \n2.0 BARAU, SULEIMAN \n1.0 \nReview of Developments \n1.1 \nYear-on-Year (YoY) Headline Inflation increased marginally to 9.1 per cent \nin April from 8.6 per cent in March on account of declining food \ninventories. It gives comfort that this is the fourth consecutive month of \nsingle digit in the all-items measure of inflation in several years. However, \none should also observe that the marginal increase may indicate a trend \ntoward double digit. YoY Food Inflation also trended marginally upward \nto 10.01 from 9.48 per cent in April and March, respectively. Core Inflation \ntrended downward to 6.9 from 7.2 per cent over the same period. \n1.2 \nMoney Market rates have been stable albeit showing a marginal decline \nin April due largely to the sustained liquidity in the banking system. The \nspread between deposit and lending rates remain high; estimated at an \naverage of 19 per cent. \n1.3 \nThe Naira exchange rate remained stable, while showing marginal \nappreciation in the three market segments. The wholesale Dutch Auction \nSystem (wDAS) rate appreciated marginally by 0.01 per cent to \nN157.20/US Dollar (17/5/13) from N157.32 (18/3/13). \n1.4 \nEstimated GDP growth at 6.56 per cent remains robust though it trended \ndownward compared with Q4 of 2013 of 6.99 per cent. This level of \ngrowth is however high when compared to Q1 of 2012 (6.34%). Besides, \ncurrent GDP estimates and outlook is impressive when compared with \nSub-Saharan African average. \n13 \n \n1.5 \nOil prices are trending downwards. Nigeria‟s Bonny Light at $105/pb as at \nend April is dangerously trending towards the $100 resistance level. This is \nlower than the average of $113.7 in 2012. The days of rally in oil prices is \nnow somewhat over. \n1.6 \nForeign Reserves is stable at $$47.9billion in April. This is inspite of the slow-\ndown of foreign portfolio inflows, a reduction in oil price and oil \nproduction and export levels. Foreign Reserve level as at 13/4/13 is higher \nthan the average for Q2. \n1.7 \nOil production levels have trended downward to an average of 1.9 million \nbarrels per day (mbpd) in March and April compared to the average of \n2.0mbpd in 2012 due largely to increased production leakages. \n1.8 \nThe banking industry has remained substantially liquid. Average liquidity \nratio stood at 72.4 per cent as at end-April compared with 60.8 per cent \nas at end-December, 2012 \n1.9 \nIn the area of public finance, at Federal level, we have seen remarkable \nreduction in revenues accruing to government due to reduction in oil \nproduction. But we have also seen remarkable increase in expenditure \nwhich translated into higher deficit of N236 billion which is 6.4 per cent \nhigher than budgeted deficit of N222 billion. \n1.10 There was remarkable growth in the banking industry balance sheet to \nN21.2 trillion as at 13th April, 2013 compared to N18.61 trillion as at April 12, \n2012. There was corresponding increase in gross credit of 14.2 Year-on-\nYear in April, 2013. \n1.11 In summary we have seen the monetary and financial stability due to the \nfollowing key developments since the last MPC. \n14 \n \n \nStability in prices – interest and foreign exchange \n \nStable (Headline) inflation in the last four months with mild increase \nin inflation from March to April \n \nStable but increasing foreign exchange reserve levels \n \nDeclining oil price, government revenue and increase in Federal \nGovernment deficits relative to budgeted levels. \n \nRobust but declining GDP growth rate for Q1 2013 when compared \nwith Q4 2012. GDP growth rate for Q1 2013 is however higher than \nthat of Q1 2012. \n \nDecline in lending to the manufacturing sector in 2013 compared to \n2012 but we have also seen increased overall lending to private \nsector. We have seen crowding out of private sector by public \nsector borrowing. \n \nSubstantial liquidity in the banking system \n2.0 \nOutlook/Risk/Considerations \n2.1 \nFiscal spending. I clearly see elevated risk to inflation and exchange rate \ndue to the possibility of increased Government spending particularly as \nwe seek to resolve the security challenges in the North-Eastern part of the \ncountry. We are also likely to see increased spending in the second part \nof 2013 as we head into the pre-election year. \n2.2 \nSustained liquidity in the banking system which will support the potential \nincrease in Government spending. This would pose further risk to inflation \nand exchange rate management. \n15 \n \n2.3 \nGDP growth continued to be robust as a result of the observed weak link \nbetween interest rate and private sector credit growth. This may continue \nuntil we see fundamental structural reforms in the real sector. \n2.4 \nDeclining oil price and export volumes is a major threat to foreign reserves \naccretion, exchange rate and government revenues. Lower government \nrevenues would potentially translate into increased borrowing (and \nfurther) crowding out of the private sector and increase in borrowing \nrates. Declining oil price has the potential, if not managed, in reducing \nforeign reserves. This will negatively impact our exchange rate \nmanagement \n3.0 \nMonetary policy decisions should necessarily be forward looking. The \ncurrent clamour for easing monetary policy is based on the gains made in \ntackling inflation, stability in interest rate and exchange rate, and \naccretion to reserves, amongst others. The clamour does not take into \naccount the risks to these modest gains in changing policy stance to \nthese variables. I am convinced that what we need is stability, to enable \nus to build on these gains rather than risk loosing them by changing \nstance of monetary policy. The need to see increase in lending to the \nreal sector is strongly desired but the risk of easing may appear even \nhigher. Besides, we have witnessed strong growth inspite of the current \ntight stance in policy. It is yet to be proven that without structural reforms, \nwe would elicit increased lending to the private sector and higher growth \nlevel, if we ease policy. \n4.0 \nIt is in view of the foregoing that I vote to hold current stance in policy by; \n \nMaintaining MPR at 12% \n \nMaintaining the corridor at + and -2% around MPR \n16 \n \n \nMaintaining Cash Reserve Ratio (CRR) at 12% \n \nMaintaining Net Open Position (NOP) at 1% of Shareholders Funds \n \n3.0 GARBA, ABDUL-GANIYU \nDecision \n1. I vote to: \ni. Reduce the MPR by 0.50% to 11.50%. \nii. Maintain the asymmetric corridors at ±2.0% around the MPR. \niii. Maintain CRR at 12%. \n \nThe Context of the Decision \n2. I have consistently voted for a rate cut since January, 2013. My vote for \ncutting MPR in January was to signal “a commitment to macroeconomic \nstability now and, in the future and, to avoid history repeating itself at an even \ngreater cost” also, to “begin the process of stimulating the economy in the \nlight of the well-established evidence of consistent slowing down since the \nthird quarter of 2010 and, of a consistent growth in unemployment.” \n \n3. My conviction then (January and March) and now is that price stability must \nbe conducive to job creating growth. \n \n4. My key concerns then and now include (a) the co-existence of record stock \nmarket indexes, record growth in sovereign debts and persistent high \nunemployment; (b) the rising economic costs of achieving price stability \nthrough sustained tightening under an expansionary fiscal regime; (c) the \ninfectious/competitive rounds of quantitative easing by the US Federal \nReserve Board, the European Central Bank, the Bank of England and the \nBank of Japan and the exports of short to medium term costs to Nigeria \n17 \n \n(inflation through depreciation of the US$, volatile financial flows and costly \npolicy trade-offs) and, (d) the risks of currency wars, asset price bubbles, \nexportation of inflation and new rounds of financial and macroeconomic \ncrisis as the major Central Banks persist in printing their way to growth and \nlower levels of unemployment. \n \n5. I am still convinced that the global economy is fragile given (a) the \nfundamentals of the global economy, (b) the medium to long term costs of \nquantitative easing by the main Central Bankers and (c) the dis-equilibriums, \nasymmetries and inefficiencies in the dominant global financial games. As I \nargued in my personal statement in March, in a strategic, asymmetrical and \nvolatile interdependent situation, the best strategy for public policy makers is \na forward looking one empowered by continuous monitoring and analysis of \neconomies, of financial games and of strategic players. Nigeria‟s urgent \nneeds give such a strategy much supports and make creative and \nharmonious monetary and fiscal reaction functions critically important. \n \n6. The comprehensive analysis of available data (inflation, interest rates, money \nsurvey, fiscal deficit, public debt, banking system and corporate financials, \ncapital importation, All Share Index, Market Capitalization) for the period \n2000-2013 preparatory to the meeting convinced me more than ever that a \nforward looking strategy is the best for these times. \n \nThe Basis for Decision \n7. In weighing the arguments for holding against the argument for rate cuts, I \nasked myself if (a) the basis for my decisions in January and March have \nchanged and (2) if my decisions were wrong. On both counts I have not \nestablished new facts that cause me to alter my decision. \n \n18 \n \n8. Reserves are improving, the exchange rate remains stable and staff estimates \nforecast inflations to trend downwards. Obviously, the argument for rate cuts \nis strengthening not weakening. It is true that tightening has worked to \nproduce these results. It is also true that the costs in investment, output and \nproductivity growth and in higher levels of unemployment are significant. Post \n2007, it has become clear that a Central Bank cannot pursue price stability at \nall costs. \n \n9. The evidence of asset price bubbles in Nigeria and globally and it is axiomatic \nthat the asset price bubbles are driving the quantitative easing by major \nCentral Banks. As with all speculative bubbles, a bust is inevitable unless \nforward looking policies are taken to ensure a soft landing. Given the \ncommitment of the Central Banks to quantitative easing through to 2015 and \ngiven the scope and size of the bubbles, the scope and size of the \n“contagion effects” that may result will be significant and the cost for passive \ncountries may be catastrophic. \n \n10. Although, some portfolio flows adjusted downwards in March and April, there \nis need for further adjustments to levels that would not threaten the financial \nand economic stability of Nigeria. Human history and Nigeria‟s recent history \nprovides strong foundation to expect that the flows are reversible while sound \ntheoretical and empirical analysis provides sound foundations in support of a \nclaim that the net flows are non-positive in the medium term. \n \n11. The theory and the evidence anchor two main points. First, future stability of \nprices, of the exchange rate, of the financial system and of the economy is at \nrisk if volatile financial flows grow unchecked. Second, following from the first, \nthe real choice is between short term stability and, medium to long term \nstability. \n19 \n \n \n12. In voting for a rate cut therefore, I am voting clearly for medium to long term \nstability and, for minimizing short to long term costs of instability. I am also \nvoting implicitly for a strengthening of the transmission mechanism of \nmonetary policy, for a forward looking strategy and for institutional changes \nthat limits the depth and scope of the “inverted intermediation” that has \nbecome a distinct feature of the Nigerian financial system. \n \n13. Finally, as I have argued before, the tightening phase would have been far \nmore successful at much lower costs also, of a much shorter duration had \nfiscal policy been substantially more efficient and effective in enhancing the \ncompetitiveness of the Nigerian economy through upgrades in infrastructures \nand in the delivery of sound public services. To reiterate a point the MPC has \nalways made, there is a limit to the set of economic outputs and economic \noutcomes that monetary policy could deliver without the support of fiscal \npolicy to engineer the necessary structural transformations of the economy. It \nis important now more than ever that fiscal policy complements monetary \npolicy to deliver price stability, growth and employment given the fragility of \nthe global economy and its susceptibility to volatilities and financial crisis. It is \nimportant that government resists the strong domestic/international lobby \nand, temptation to expand sovereign debt on a ratio or threshold argument \nwhich is logically and empirically unsound and totally lacking in wisdom or \nunderstanding. The paths of Nigeria in 1978-2006, Greece, Ireland, Portugal, \nSpain, Italy, Cyprus and, the Euro-zone post 2007 are indicative of what lies \nahead if growth in public debt is not aligned to the long term stability of the \neconomy. \n \n \n \n20 \n \n4.0 \nLEMO, TUNDE \nArriving at policy decision at this meeting seems a little bit complex. Current \nmacroeconomic \nconditions \nsuggest \na \nbenign \nenvironment, \nincluding \nmoderation in inflation with all the measures now in single digit. The foreign \nreserve level has increased to a fairly comfortable level with demand pressure in \nthe foreign exchange market fairly subdued. In addition, the money market \nrates have shown good degree of stability while investors‟ confidence in the \neconomy has increased, evidenced by the declining yields on long term bonds. \nThe important question, however, is whether the economy has reached a \nsteady state that could allow relaxation of the current tight stance. I am a little \nbit cautious to affirm this. Although inflation has moderated, the path is less \ndiscernible as it has shown fair degree of swings since January 2013, although still \nin single digit. \nIt could also be observed that there are some latent underlying inflationary push \nfactors which should be properly managed before the effects fully crystallize. \nThe likelihood of an increase in public expenditure in the remaining quarters of \nthe year may result in the projected fiscal deficit level being exceeded with \nimplication for further government borrowing as well as depletion of excess \ncrude account. On a related note, weakness in the euro area may weigh on \nexternal demand for crude oil with implication for crash in the price of crude oil. \nWhen this precarious condition is combined with declining oil output at home, \nthe impact would not only be felt on government revenue but also in the \nforeign exchange market and accretion to reserves. Invariably, widening fiscal \ndeficit and pressure on exchange rate could still stoke inflationary pressure. \nThe structure of the broad money supply (M2) further revealed the salutary \neffects of the subsisting tightening stance on inflation environment. Provisional \ndata show that narrow money (M1) declined by 1.90 per cent between end-\n21 \n \nDecember 2012 and end-April 2013 while quasi money grew by 9.86 per cent \nduring the same period or 29.58 per cent on annualized basis. This development, \nif sustained, implies that a reasonable portion of aggregate money supply \nwould not be immediately available to fuel demand pressure but retained \nwithin the banking system to support its stability. \nWith respect to real output, current level of growth, in the face of various \nchallenges, could be adjudged impressive as the economy recovers from flood \nrelated disruptions of 2012. This notwithstanding, the space for monetary policy \nto stimulate output growth seems diminished as the binding constraints on \ngrowth; \nsupply \nbottlenecks, \nweak \ninfrastructural \ncondition, \nand \nmulti-\ndimensional threats to security have persisted. Except a broad measure of \nreform that addresses these concerns are urgently put in place, sole reliance on \nmonetary policy as a tool of macroeconomic stabilization may be less effective \nby the day. \nIn the light of the above, the monetary policy measures outlined in the March \n2013 meeting still remain relevant. In other words, I propose that both the MPR \nand the CRR be retained at 12 per cent. \n \n5.0 MOGHALU, KINGSLEY CHIEDU \nThe question before the Monetary Policy Committee is whether the time has \ncome to start easing monetary policy. The answer is that, considering all the \ncircumstances, not yet. It is true that, although headline inflation increased from \n8.60 per cent in March 2013 to 9.05 per cent in April 2013, it is still in the single \ndigits, and stable inflation is projected over the next six months. The argument \nhas also been made about the need to reduce rates in order to spur growth. \n \nBut there are still some risks in the horizon, and strong arguments for the MPC to \n22 \n \nhold rates steady at this time. First, with overall GDP growth for 2013 projected at \n6.91 per cent, growth has remained rather robust and thus is not a factor that \nshould outweigh all the other risks that remain the horizon. \n \nSecond, the monetary policy stance of the MPC over the past one year has \ndelivered strong results. These include reduced inflation, a stable exchange rate, \nand real interest rates, in short, price stability overall. If that policy has worked \nthus far, it may not be helpful to reduce rates prematurely and risk a rise in \ninflationary trends that have not diminished to an extent that establishes a clear \ntrend and argues for a rate cut. It is important to note that price stability is the \nprimary mandate of the MPC. I have in previous statements addressed the \nnotion that a reduced Monetary Policy rate will bring about increased lending \nto small and medium enterprises and other parts of the real economy. The \nevidence of the lending behaviour of banks does not support this position, and I \nhave continued to emphasize the importance of the success of structural \neconomic reforms that are underway before we can see a real behaviour \nchange in the lending profile of banks. \n \nThird, there remains a continuing threat of falling oil revenues, especially as a \nresult of reduced oil output from crude oil theft. This poses a continuing threat to \nthe stability of the exchange rate and the foreign reserves. \n \nFourth, the security situation in the Northeast region of the country has resulted in \nthe declaration of a state of emergency which, while undoubtedly necessary \nand appears to have the broad support of opinion across the country, \nnevertheless has implications for monetary policy that the MPC must factor in. \nFor one, it has led to reported price increases in parts of the country. For \nanother, it may lead to significantly increased spending by the Federal \n23 \n \nGovernment, increasing liquidity pressures. Moreover, there have been\nsignificant drawdowns on the excess crude account and further claims on the \nFederal government since December 2012. Together, these two factors account \nfor about 2 trillion naira, posing a clear continuing liquidity risk. \n \nA consumer expectations survey conducted for the MPC indicates that, while \ninflation \nis \ntrending \ndownward \nfrom \na \nstatistical perspective, \ninflation \nexpectations remain high. Over 50 per cent of Nigerians surveyed expect price \nincreases in the next 12 months. Asked in a survey whether they would rather \nhave interest rates high and inflation down, over 43 per cent of respondents \nwould rather have rates high and inflation down if faced with a choice, while \n16.8 per cent would prefer higher prices with lower rates. \n \nIn conclusion, it is welcome that inflation appears to be trending down, precisely \nbecause of the tight monetary policy formulated by the MPC. If this is the case, \nit appears necessary to avoid a reversal of the inflation trends at this time. It \nwould be better to continue to maintain a tight monetary stance at this time in \na forward looking manner that factors in the threats indicated above. It is also \nnecessary to maintain real interest rates. \n \nFor all these reasons, I vote to maintain the MPR at 12 per cent and all the other \nmonetary aggregates at their present level. \n \n6.0 OSHILAJA, JOHN \nI voted that the CBN continues to maintain its current Policy stance, leaving all \noperating instruments unchanged. The MPC‟s latest decision means that the \nCBN‟s Monetary Policy Rate (MPR) remains unchanged at 12% p.a., with a 2% \np.a. symmetry around its Deposit and Lending Rates. The Reserve Requirement \n24 \n \nalso remains unchanged (i.e. CRR, at 12% flat), as do the Liquidity Ratio (30%), \nand the Net Open FX Position limit of Nigeria‟s banks (1%). \n \nKeen observers of recent price trends will pretty much parse available data as \nwe did and note, with relief, the continuing decline in inflation at Headline and \nCore levels. Current Bank forecasts suggest that these trends can be \nmaintained over the next two quarters at least. At this stage, we could begin \narguing that the MPC merits high marks for the role it‟s playing in promoting \nmacroeconomic stability. \n \nWe have gotten our Policy Transmission functions back to normal working \ncondition (with the CBN having broadly stabilized the banking system). We are \nalso maintaining suitable monetary conditions for attracting and nurturing \ninbound investment flows. This is most directly observable in the relative stability \nof Naira exchange rates. And, while we freely acknowledge that the \ncomposition and structure of these flows should be better, Foreign Portfolio \nInvestment (FPI) flows are helping to rebuild the nation‟s currency reserve \nbuffers. Furthermore, unlike counterparts in Heavily Indebted Developed \nCountries (HIDC), Nigerian portfolio investors no longer have to contemplate \ndiverse ways of escaping financial repression. Real rates of return are \nincreasingly available through marketable fixed income securities. \n \nPrice stability appears within sight, in addition to which the economy‟s growth \nrates are moderating; reflecting continuing weaknesses in the economies of \nmajor trading partners – China, the EU, and the US. So why is the MPC, which \nlooks like it‟s taming inflation, not signaling intentions to begin loosening Policy? \n \n25 \n \nFor me, the pressing concern is the emerging possibility of continuing erosions in \ngrowth, with steadfast high unemployment, accompanied by rebounds in \ninflation. In a word, stagflation. \n \nToday‟s voting pattern reflected two broad issues. First, was the desire – given \nsub-optimal real sector conditions – to signal continuing awareness and concern \nabout the composition of the Capital Accounts. Especially when viewed \nagainst voluntary, but inherently transient, FPI flows as the dominant source of \nfunding. Second, were perceived threats of Fiscal Risks signaled by run-rates in \nGovernment spending to date. The rate and character of financing operations \nraises concerns when viewed against backgrounds of elevated oil export \nperformance and market risks. The majority of members believed the weight of \nFiscal Risks be significant enough to warrant further caution; particularly given \nwhat appear to be increasingly political dimensions around oil theft. \n \nUpon evaluating aggregate stocks and flows of credit in the economy, we \nfound a striking shift in financing operations of the Federal Government (FGN). \nFor much of 2012, with improved export performance, high oil prices, and its \nenactment of Fiscal Consolidation measures, the FGN was a net creditor to the \neconomy. Today, we find the FGN becoming a net debtor. \n \nAt the end of last year the government had gross credit balances vis-à-vis the \neconomy totaling N 4.1 Trillion. As roughly N 2.8 Trillion of this amount constituted \nborrowed monies, the Government‟s net position vis-à-vis the economy, by \nDecember 2012, was a net credit balance of N 1.3 Trillion. Fast-forward to the \nend of last month and we find the gross credit balance falling to N 2.7 Trillion; of \nwhich borrowed monies (notably via Treasury bill and bond markets) constituted \nN 3.5 Trillion. Thus, according to the CBN‟s provisional calculations for April 2013, \n26 \n \nthe FGN became “overdrawn” with respect to the economy by approximately \nN 800 billion; i.e. a net debtor. \n \nFrom the difference in net credit balances, it is clear that approximately N 2.1 \nTrillion, or 42% of the Government‟s roughly N 5.0 Trillion Budget for 2013 has \nbeen expended. Is this improved Budget Execution? Or is this accelerating \nFiscal Expansion? I am most concerned with the latter because of its likely \ndetrimental impact as surges of fiscally sponsored liquidity. Such developments \nwould upset the somewhat delicate macroeconomic balances the MPC tries to \ninfluence. In this event, the CBN would have to vigorously attempt to restore \nequilibrium, using interest and exchange rates. \n \nIt may be argued that there are seasonal patterns to annual government \nspending; in which case borrowing, to smoothen out uneven but expected cash \nflows, is reasonable. The FGN‟s normal expenditure profile may be seasonal in \nnature but (unless Nigeria now farms oil fields) government revenues are most \ndefinitely not. However, the financing of recent flows against prevailing and \nanticipated economic and political backdrops raises concerns. \n \nThe bulk of the funds (N 1.1 Trillion) were drawn from Federation revenue \naccounts, suggesting that the covered expenditures were recurrent in nature. A \nfurther N 0.7 Trillion of new debt was incurred for purposes we presently do not \nknow (covering petroleum subsidies, perhaps), and the balance of N 0.3 trillion \nmay likely have been raised from asset sales or other non-debt sources. \nNonetheless, the FGN‟s revenue trajectory shows clear signs of sliding, while that \nof its expenditures does not. A continuation of this trend would make the \napproved Budget more expansionary than it was designed to be. Factor in \nrequired further spending to address deepening National Security issues, and \nthen add likely extra-Budgetary spending relating to the upcoming Election \n27 \n \nCycle; which is expected to begin by the end of this year at the earliest. These \nwere calculations I made to arrive at my voting decision. \n \nThe latest MPC decision could also be taken constructively, as a desire to not \nstore up problems for the future. I see little value in the Committee encouraging \npremature notions of a likely easing in Policy, only to have us abruptly reverse \ncourse, as events threatened to overtake us. The available evidence on \nbalance suggested that if we started easing today, well before the government \nspending picture is clarified, we would likely have to reinstate tightening policies \nsooner, rather than later. \n \n7.0 SALAMI, ADEDOYIN \nThough inflation rose slightly, its rate of increase has, for the fourth consecutive \nmonth, remained within its „single digit‟ target band. Furthermore, Staff forecasts \nfor the rate of price rises over the next six months show Headline inflation \ncontinuing to fall – declining from 8.9percent in May, 2013 to 7.2percent in \nOctober. Indeed the outlook for inflation provided by Bank staff also shows Core \ninflation steadily falling from 7percent in May to 6.1percent six months later. \nCredit continues to grow relatively slowly whilst external reserves have continued \nto increase – albeit slower than at the same period a year ago. \n \nIn addition, aggregate activity growth, at 6.6percent, appears robust even \nthough growth in two key sectors ‐ distribution and Telecoms – slowed relative to \nthe same period last year. Corporate sales performance is perhaps the only „fly \nin the ointment‟. Compared to what it had been in the first quarter of the \npreceding year, turnover of 49 NSE‐listed firms outside the banking sector, which \nhad published performance, shrank by 3.2percent in Q1 2013. Time perhaps, to \ncommence easing monetary conditions. Finally all the „ducks are lined up‟! \n \n28 \n \nGiven the forward looking nature of monetary policy, a more relevant \nconsideration is the nature of threats to the current conditions. In my view, two \nbroad risks cannot be ignored –fiscal challenges arising from oil sector \nconditions coupled with increasing banking liquidity could bring pressure to bear \non the currency with adverse consequences for inflation. \n \nThe import of oil sector developments and their implications for fiscal and \ncurrency risks continue to cast a shadow over monetary policy especially in \nrelation to inflation management. Even though oil prices have eased, \nproduction and export volumes pose a more significant threat to revenues with \npossible implications for currency risk. According to a recent Reuters report \n“Nigeria looks set for its lowest crude oil exports in nearly four years in June, \nshipping lists showed on Tuesday, highlighting how badly theft from pipelines is \naffecting Africa's largest economy. The lists indicate that Nigeria will export 1.76 \nmillion barrels per day (bpd), the lowest level since August 2009, Reuters data \nshowed”. Should this position continue, the adverse implications for the Current \nAccount of the Balance of Payments are clear. The impact of a significant \nweakening of the Current Account for our currency and thus for inflation \nmanagement are obvious. \n \nA more immediate concern for the inflation outlook is the changing nature of \nthe relationship between the government and the banking system. In the first 4 \nmonths of this year, the Federal Government has transformed from being a net \ncreditor to being a borrower from the banking system. The size of the swing is \nespecially noteworthy – from providing savings of NGN1.353trn in Dec., 2012, the \ngovernment, by April 2013, had borrowed NGN780bn. A review of its revenue \nand spending performance in Q1 2013 sheds light on this transformation. \nRelative to Q1 2012, its actual revenues were 12.6 per cent lower while spending \nrose by slightly over 15percent. \n29 \n \n \nAvailable figures continue to show significant liquidity in the banking system. At \nthe end of April, liquidity stood at 70.4percent – higher than 2012 year end of \n68percent. By contrast, lending to the private sector has expanded 1.7percent \nin the same period. Stagnant nongovernment lending by the banks in the face \nof growing liquidity reiterates the need to urgently find market mechanisms \nwhich encourage intermediation in favour of the private sector. \n \nBeyond these, but undoubtedly related to them, is the continuing trend of rising \nproportion of holdings of Domiciliary Account Deposits in aggregate deposits \nheld by Deposit Money Banks. I track these deposits because, depending on \nownership, they just may (and I stress may) provide an indication of the private \nsector appreciation of risks to the currency. Latest data show this category of \ndeposits have continued to rise and now constitute one‐fifth of bank deposits. If \nthese holdings were predominantly government holdings, there may be little to \nbe concerned about. However, with individuals and private companies holding \n80percent, it is worth paying attention to developments in that space. \nGiven the risks on the horizon, I am not convinced that it is appropriate at this \ntime to ease monetary conditions. I thus voted to maintain the current policy \nparameters. \n \n8.0 UCHE, CHIBUIKE \nSince the beginning of this year, I have consistently but unsuccessfully argued \nthat the time has come for MPC to signal an end to its current tight monetary \npolicy stance. The economic trends we have reviewed in this meeting have \nfurther strengthened my position on the subject matter. The main essence of our \n30 \n \nprice stability mandate is to encourage the growth of the real sector of our \neconomy. This remains my overriding concern. \nOur current tight monetary policy stance is clearly one of the factors responsible \nfor the high interest rates Nigerian banks charge borrowers. Admittedly reducing \nMPR alone will not be the sole solution to this problem. We must find creative \nways of addressing the issue of the rising spread between deposit and lending \nrates. It is for instance no exaggeration to conclude that our current policy of \nrelying on moral suasion to attain the above objective has failed. The \nexploitative and predatory nature of our banking system is further highlighted by \nthe impunity with which some banks defraud the public through fraudulent \nschemes like the overcharging of interest rates. Thankfully, the CBN has already \nstarted to expose such schemes. I however believe that the time has come for \nus to create a regulatory regime that will provide a strong economic \ndisincentive against such practices. \nMy above position is no doubt supported by the fact that the health of our real \nsector is entwined with that of our banking system. The resolution of the banking \ncrisis without growing the real sector is not sustainable in the long run. The need \nto bring down interest rates is further supported by the recent slowdown in our \nGDP growth rate. Such a policy move will no doubt ameliorate some of the \nfactors responsible for the slowdown in our economy including the sluggish \nlending to the real sector. Furthermore, the increasing level of our oil theft is \nexplicit evidence that our current oil rent dependent economy is not \nsustainable. We must therefore do all in our power to promote economic \ndiversification. Thankfully, we are in a relatively strong position to begin to at \nleast signal a change in direction. The current single digit inflation rate and our \nrelatively strong reserve position are all favorable pointers to this. \n31 \n \nIn arriving at a decision, I have carefully considered the concerns of my \ncolleagues who argue that our fiscal future is beclouded with uncertainty thus \nmaking monetary easing premature at the present time. One such argument is \nthat in the run up to the 2015 elections, politicians must find ways of increasing \npublic expenditures in other to fund the said elections. This could be done \ndirectly through the monetization of the excess crude account or indirectly \nthrough increased oil thefts, the bloating of oil subsidy expenditures and \nindiscriminate award of duty waivers. Another argument is that the country is \ncurrently at war and that there is likely going to be increased fiscal pressures as \na consequence of this. \nIn my view, the above concerns are exaggerated. I am for instance unable to \ncomprehend the implied assertion that real sector development should be \nsacrificed because of expected increases in government spending associated \nwith an election that will take place in 18 months‟ time. This is even more so \ngiven the fact that some of the schemes being speculated are clearly \nfraudulent. Our increased autonomy as a central bank also comes with the \nincreased responsibility to politely but explicitly point out such abuses and their \nimplications in our communiqué. We should never underestimate the corrective \npressure such explicit assertions by an autonomous central bank can bring on \nthe fiscal system. Furthermore, I am also not convinced that the state of \nemergency declared in three states and the issue of excess crude monetization \nwill materially change our fiscal landscape. These are no new terminologies or \npractices in our recent history. The fiscal policy difference that these policies \nwould cause will therefore be in degree not in kind. \nAt another level, I am fairly convinced that the current positive noises being \nmade by the leadership of the national assemble with respect to the need for \nthe strict implementation of the approved budget and against extra budgetary \n32 \n \nexpenditures and fiscal abuses will lead to improved fiscal discipline on the part \nof Government. It is our duty as a central bank to add fodder to such genuine \npressures. \nFinally, as I made explicit in the last MPC meeting I have always disagreed with \nthe “popular view” that maintaining high MPR makes Nigeria competitive with \nrespect to attracting Foreign Direct Investments. This is because most of these so \ncalled FDIs are simply speculative capital looking for short term profit outlets. This \nkind of capital does not develop economies. Admittedly, attracting such monies \nusually help central banks to curtail exchange rate pressures. This however \nhappens only in the short run. History has shown that speculative capital is \nalways volatile and economically destructive in the long run. The reverse flow of \nsuch capital can easily put pressure on both currency exchange rates and the \ncapital market. FDI makes sense only when it is applied to real sector economic \ndevelopment. I therefore believe that the time has come for a rethink of our FDI \npolicies. As a start, we must formulate policies that discourage the inflow of short \nterm FDI. The possible disruptive impact of such a policy would be minimized if \nthis is done in a responsible way. \nIt is in the light of the above I hereby vote as follows: (1) to reduce MPR by 50 \nbasis points to 11.50 per cent with interest rate corridor of +/- 200 basis points; (2) \nto retain CRR at 12 per cent; and (3) to retain Liquidity Ratio at 30 per cent. \n \n9.0 YAHAYA, SHEHU \nThe international economic climate is characterised by persisting recession in \nthe Eurozone countries, including France and increasing dark clouds for \nGermany. The US is showing some signs of recovery in GDP growth, employment \nand business confidence. The recovery is however, still tentative. China still \nprovides a major impetus for global demand, while India and South East Asia \n33 \n \nmaintain respectable rates of growth. On the whole therefore, global growth is \nstill anaemic. \nGiven the weak growth prospects of the global economy, the demand for \ncrude oil is also weakening at a time when there is a rapid expansion in oil and \ngas production in the US and Canada, and production is due to come on \nstream in some African countries. The combination of weak demand and \nincreasing supplies in the oil and gas market obviously have important \nimplications for the price of crude oil and for the Nigerian economy. \nOn the other hand, these developments mean that global prices for \nmanufactured commodities as well as for food are trending downwards in \nadvanced economies, emerging economies and the global economy as a \nwhole. \nIn Nigeria, GDP growth rate of 6.56% in Q1 of 2013, though a bit lower than the \nannualized level of growth in Q4 2012, maybe due to seasonal factors, is still \nrobust and is forecast to increase in the next two quarters of 2013. \nOne of the major challenges facing the Nigerian economy is the prospect of \nsignificant declines in oil earnings in the medium term, both due to weakening \noil prices and declines in official domestic production occasioned by \nproduction disruptions and leakages. Already, this year, actual retained revenue \nof the federal government has been about 24% lower that budgeted. Yet, there \nare some concerns that development imperatives and the security situation in \nthe North Eastern part of the country might lead to substantial fiscal deficits, \nnecessitate increased government borrowing and generate inflationary \npressures. \nOn the other hand, the current trend in headline inflation, although showing a \nslow upward increase to 9.05% year- on- year in April 2013 as compared to 8.6% \n34 \n \nin March, is still lower than in February 2013. Headline inflation has been below \n10% for the whole of the year so far. Core inflation is lower in April as compared \nto March, while food inflation has risen to about 10% year-on-year in April, \nlargely driven by imported food inflation. Even more important for monetary \npolicy is that headline inflation is forecast to be under 9% in the next six months. \nThe Naira exchange rate has been quite stable and is expected to remain so in \nthe near term due to the healthy levels of external reserves and active open \nmarket operations by the monetary authorities. Concerns remain however that \ndeclines in oil earnings may exert a downward pressure on the external reserves, \nwhich may trigger reverse portfolio flows and thereby put some downward \npressure on the value of the Naira. These twin pressures may point in the \ndirection of maintaining a tight monetary policy stance. However, should they \nmaterialize, it would be necessary for the government to make adjustments in \nexpenditure. The Central Bank would also need to, in that case, be compelled \nto deploy instruments to mop up excess liquidity and dampen threats to price \nstability. \nTaking all these factors into accounts, we consider the relative weight of the \narguments to favour a slight easing of the monetary policy stance with a view to \ninfluencing a reduction in lending rates. This will align with initiatives being \ndeployed by the Government and the Central Bank to increase financial access \nto SMEs, manufacturing and agricultural sectors and thereby strengthen growth, \ngenerate jobs and provide a stronger basis for financial and price stability. \nWe therefore vote to reduce the MPR by 50 basis points and to maintain the \nCRR at its current level. \n \n \n \n35 \n \n10.0 SANUSI, LAMIDO SANUSI, GOVERNOR OF THE CENTRAL BANK OF NIGERIA \nAND CHAIRMAN OF THE MONETARY POLICY COMMITTEE \n \nThe principal discussions leading up to our Monetary Policy Committee Meeting \nby economists, analysts, the business community and Government revolve \naround the advocacy in many quarters for monetary easing. Those who make \nthese proposals point out, with good reason, the fact that inflation has remained \non target for four consecutive months, the sluggish growth in credit to the \nprivate sector and very high intermediation spreads in the credit markets. \nThe merit in these arguments notwithstanding, I am not convinced that \nmonetary conditions are at the moment too tight, and am also concerned \nabout the outlook in the short – to- medium term. The principal driver of liquidity \nappears to be Government spending. With the increased rate of monetization \nof oil revenues and Excess crude savings we have pumped in over N2 trillion \nthrough the three tiers of Government. At the level of the Central Government \nalone, fiscal deficit at end of Q1:2013 was about N235b compared with about \nN85b in Q1:2012. Also, we have seen a huge reduction in savings and deposits \nof Central Government and its agencies with the CBN and the Banking System \nbetween December and April. All indicators studied suggest that, while the \nofficial stance of a commitment to fiscal consolidation remains, the fiscal stance \nin 2013 is in reality less tight than in 2012. \nIn addition, there are other factors which increase the risk of even higher \nspending. There is an on-going military operation in the North-East of the \ncountry aimed at bringing to an end the uprising and terrorist attacks of radical \ngroups. The prosecution of the war, and the consequent need to invest in \nreconstruction and rehabilitation as the country deals with the humanitarian \nsituation, are likely to be costly. Secondly, as we approach 2014 and the \nnationwide election, political spending is bound to rise. While, to some, it may \nseem too early to worry about election spending, it is clear to me that \n36 \n \ndevelopments such as the Nigerian Governor‟s Forum Chairmanship fiasco and \nthe forging of alliances among opposition parties are indicative of the earnest \ncommencement of horse-trading and grand-standing among politicians. The \nprocess has therefore commenced. \nThe Global environment does not appear to pose a higher risk now than it did \ntwo months ago. The fundamentals of a three-speed global recovery remain, \nwith Europe continuing to make tortuous progress towards resolving its crisis. The \nprincipal risk to oil revenues seems to be the theft of oil, production closures and \nother domestic leakages rather than external developments, even though a \ngradual decline in oil price is projected into the medium term. The output and \nrevenue shock will have an impact on reserve accretion and add pressure to \nthe exchange rate. \nConclusion \nI am of the view that in terms of what we set out to achieve, Monetary Policy \nhas thus far been extremely successful. Principal risks to inflation on a forward \nlooking basis lie in increased Government spending and a weaker currency due \nto oil revenue shocks. Easing money at this point will add impetus to these \ninflationary impulses. Indeed, we need to monitor these two risks and be \ncourageous enough to tighten money if they materialize and threaten to \nundermine stability. \nIn the light of the above considerations, my vote is to hold.", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique No  89 of the MPC (with Personal Statements of Members) of Monday and Tuesday May 19 and 20 2013 (2) (1).pdf"}
{"doc_id": "99d21bb07b95466a2dfa54cdaf32a5cd", "text": "1 \n \n \n \n \nCENTRAL BANK OF NIGERIA COMMUNIQUÉ NO 113 OF THE \nMONETARY POLICY COMMITTEE MEETING OF 22ND AND 23RD MAY \n2017 \nBackground \nThe Monetary Policy Committee (MPC) met on the 22nd and 23rd \nof May, 2017, against the backdrop of slowly improving global \ngrowth prospects even as international cooperation continues to \nbe \nthreatened \nby \nanti-globalization \nsentiments \nin \nmajor \nadvanced economies. On the domestic front, the economy has \nshown greater resilience in the intervening period since the last \nmeeting of the Committee, anchored on more focused \nmacroeconomic policies and improvements in oil prices. While the \ngeneral economic outlook seems cautiously optimistic for the \nremainder of fiscal 2017, emerging indicators suggest that \neconomic policy must remain circumspect. \nIn attendance were 8 out of 12 members of the Committee. The \nMPC assessed the global and domestic economic and financial \nenvironments in the first five months of 2017 and the outlook for \nthe rest of the year. \n \n \n2 \n \nExternal Developments \nThe global economy continued to gather momentum in Q1, 2017, \naided by gradual recovery in the emerging markets on the back \nof a pick-up in global demand and higher commodity prices, \ncoupled with fairly robust domestic demand in the advanced \neconomies. Accordingly, global output growth in Q1 2017 is \nestimated to expand by 2.8 per cent annualized. In spite of the \nfairly optimistic global economic outlook, uncertainty surrounding \nthe direction of macroeconomic policy in the advanced \neconomies continues to cloud the prospects of sustained \nrecovery. Global inflation appears to be upward trending on the \nback of improved commodity prices and depreciated currencies \nin several emerging markets. \n \nDomestic Output Developments \nData from the National Bureau of Statistics (NBS) showed that the \neconomy contracted marginally by 0.52 per cent in Q1 2017, a \nmuch more positive development since Q1 2016. The data also \nshows that about eighteen (18) economic activities recorded \npositive growth in Q1 2017; indicating that the economy was firmly \non the path of recovery. The key growth activities were led by \nquarrying (52.54%), metal ores (40.79%), road transportation \n(12.35%), water supply and sewage (12.63%), fishing (5.49%), crop \nproduction (3.5%), oil refining 93.01%), motion pictures (2.95%), \ntelecommunication (2.89%), forestry (2.59%), amongst others. The \n3 \n \nCommittee noted the positive effects of improved foreign \nexchange \nmanagement \non \nthe \nperformance \nof \nthe \nmanufacturing sector and other economic activities. The non-oil \nsector grew by 0.72 per cent in Q1 2017, largely reflecting the \ngrowth recorded in agriculture and solid minerals, and recovery in \nmanufacturing, construction and services sectors. The Committee \nurged the fiscal authorities to expeditiously commence the \nimplementation \nof \nthe \nrecently \napproved \n2017 \nbudget, \nespecially, the capital expenditure portion, in order to sustain the \nmomentum of recovery, engender employment and restore \nconfidence in the Nigerian economy. \n \nDevelopments in Money and Prices \nThe committee noted that money supply (M2) contracted by 8.48 \nper cent in April 2017, annualized to a contraction of 25.44 per \ncent in contrast to the provisional growth benchmark of 10.29 per \ncent for 2017. Net Domestic Credit (NDC) grew by 1.40 per cent in \nApril, 2017, annualized to 4.21 per cent, which is significantly below \nthe 17.93 per cent provisional growth benchmark for 2017. \nHowever, net credit to government grew by 24.08 per cent over \nend-December 2016, representing an annualized growth of 72.0 \nper cent. The Committee was concerned that credit to \ngovernment continued to outpace the programmed target of \n33.12 per cent for fiscal 2017, while credit to the private sector \n4 \n \ndeclined considerably far below the programmed target of 14.88 \nper cent. \nHeadline inflation (year-on-year) moderated for the third \nconsecutive month, falling to 17.24 per cent in April, from 17.26 per \ncent in March, 17.78 per cent in February and 18.72 per cent in \nJanuary \n2017, \neffectively \nreversing \nthe \nmonthly \nupward \nmomentum since January, 2016. The food index component, \nhowever, rose to 19.30 per cent in April, from 18.44 per cent in \nMarch and 18.53 per cent in February, 2017. The moderation in \nheadline inflation in April, 2017 thus reflected the decline in the \ncore component to 14.80 per cent in April from 15.40, 16.01, and \n17.87 per cent, respectively in March, February and January, 2017. \nSimilarly, month-on-month inflation moderated to 1.60 per cent in \nApril from 1.72 per cent in March, 2017. \nThe Committee attributed these developments in part to the \neffects of the recent gains in the naira exchange rate, brought \nabout by the Bank‟s interventions in the foreign exchange market \nand the resulting downward price adjustments on imported items \nand their derivatives. Against this background, the Committee \nemphasized the need to sustain and deepen the Bank‟s foreign \nexchange management policies and measures in order to reap \nthe benefits of the pass-through to consumer prices. The MPC \nrecognized the continued influence of structural factors such as \nhigh energy and transportation costs, production bottlenecks on \nprices and hoped that the ongoing reforms by the Government \nwould address some of these constraints. \n5 \n \nMoney market interest rates moved in tandem with the level of \nliquidity in the banking system. Rates were relatively stable during \nthe review period. The interbank call rate opened at 11.40 per \ncent on March 22, 2017 and closed at 38.94 per cent on May 18. \nThe movement in net liquidity position was influenced by sales at \nthe Open Market Operations, foreign exchange interventions, the \npayment of statutory revenues to States and Local Governments \nas well as maturing CBN Bills. \nThe MPC noted the bullish trend in the equities segment of the \ncapital market as the All-Share Index (ASI) rose by 10.20 per cent \nfrom 25,516.34 on March 31, 2017, to 28,113.38 on May 19, 2017. \nSimilarly, Market Capitalization (MC) increased by 10.10 per cent \nfrom N8.83 to N9.72 trillion during the same period. Relative to \nend-December 2016, the capital market indices rose by 4.60 and \n5.10 per cent, respectively, reflecting growing investor confidence \nfollowing improvements in foreign exchange supplies reflected in \nthe over US$1 billion injected through the investor window and \nexchange rate management. Total foreign exchange inflows \nthrough the CBN increased by 69.77 per cent in April, 2017 \ncompared with the previous month. Total outflows, however, rose, \nbut less significantly, at 29.35 per cent during the same period. \nConsequently, the Committee observed that the average naira \nexchange rate remained stable at the inter-bank segment of the \nforeign exchange market in the review period. \n \n6 \n \n2.0. Overall Outlook and Risks \nAvailable data and various forecasts of key economic variables \nas well as assessment of government initiatives, including the \nrecently released Federal Government Economic Recovery and \nGrowth Plan (ERGP), all point to prospects of recovery in 2017. The \nCommittee expects that the timely implementation of this plan, \njudicious execution of the approved 2017 Budget and sustenance \nof the new foreign exchange implementation regime supported \nby the restoration of security in different parts of the country, \nespecially, in the Niger Delta region, would help accelerate \ngrowth and restore confidence in the economy. The MPC \nhowever, identified the downside risks to this outlook to include \nthe possibility of low oil prices due to renewed investments in shale \noil exploration and production, continuing monetary policy \nnormalization by the U.S. Fed which may result in strengthening of \nthe U.S dollar, and consequent capital reversal from Nigeria and \nother emerging market economies. Also, the MPC believes that \nthe inflation outlook does not appear benign as the limit of the \nbase effect driving the current moderation in prices may have \nbeen reached. \n \n3.0. The Considerations of the Committee \nNotwithstanding the improved outlook for the economy, the \nCommittee weighed the implications of continuing global \nuncertainties arising from the dwindling commitment to global \n7 \n \ncooperation, the strengthening of the U.S. dollar, and the \nunsteady commodity prices. The Committee similarly evaluated \nother challenges confronting the domestic economy and the \nopportunities for achieving economic growth and price stability in \n2017. The MPC was of the view that whereas the downward trend \nin inflation in April 2017 is a welcomed development; the rate was \nstill significantly above the policy reference band. \nThe MPC is particularly pleased with the gradual retreat in \ninflation, the relative stability in the Naira exchange rate across all \nsegments of the foreign exchange market and the improved \nprospects of foreign investment inflow. The Committee also \nwelcomes the passage of the 2017 Budget and called on the \nrelevant authorities to ensure its judicious implementation, \nespecially, the capital budget in line with the Economic Recovery \nand Growth Plan. It, however, noted the associated risks to \nbanking system liquidity of the envisaged fiscal injections during \nthe remainder of the year. Against this risk, the Committee \ncontemplated the prospects of further tightening of monetary \npolicy should the need arise. The MPC however, noted that further \ntightening would widen the income gap, depress aggregate \nconsumption and adversely affect credit to the real sector of the \neconomy. \nNevertheless, against the backdrop of the rather unclear outlook \naround key economic activities (food production especially) and \nsome optimism about current deceleration in inflation as well as \nrelative stability in the naira exchange rate, the MPC was \n8 \n \nreluctant to alter the current policy configuration in any \nfundamental manner. This is intended to allow the existing policies \nto fully achieve their intended goals and objectives. On the other \nhand, the Committee noted that the cost of capital in the \neconomy remains high and not helpful to growth. The MPC was \nhowever, \nconcerned \nthat \nloosening \nwould \nexacerbate \ninflationary pressures and worsen the gains so far achieved in the \nexchange rate of the naira. It was also convinced that loosening \nwould further increase the negative real interest rate as the gap \nbetween the nominal interest rate and inflation widens. \nOn the financial stability outlook, the Committee noted that in \nspite of the banking sector‟s resilience, the weak macroeconomic \nenvironment has continued to exert pressure on the banking \nsystem. The MPC urged the CBN to intensify its surveillance, in \norder to address emerging vulnerabilities. The Committee also \ncalled on the DMBs to step up credit to the private sector to \nsupport economic recovery and convey a positive feedback to \nthe financial system. \n \n4.0. The Committee’s Decisions \nIn consideration of the challenges weighing down the domestic \neconomy and the uncertainties in the global environment, the \nCommittee decided by a unanimous vote of the 8 members in \nattendance to retain the MPR at 14.0 per cent alongside all other \n9 \n \npolicy parameters. One member was absent at the meeting. In \nsummary, the MPC decided to: \n(i) Retain the MPR at 14 per cent; \n(ii) Retain the CRR at 22.5 per cent; \n(iii) Retain the Liquidity Ratio at 30.00 per cent; and \n(iv) Retain the Asymmetric corridor at +200 and -500 basis points \naround the MPR \nThank you for listening. \n \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n23rd May, 2017 \n \n \n \n \n \n \n \n10 \n \nPERSONAL STATEMENT BY THE MONETARY POLICY COMMITTEE \nMEMBERS \n1. ADELABU, ADEBAYO \n The imbalances in the macroeconomic environment are \nbeginning to show gradual correction particularly with the \nrestoration of a fair degree of stability in the foreign exchange \nmarket. The last two months have seen naira stabilizing around \nN305/US$ at the interbank market while the stability at the BDCs‟ \nsegment \nwas \nfurther \naccompanied \nby \nsome \nlevel \nof \nappreciation. In other word, the hitherto wide margin between \nthe rates in the two markets has narrowed considerably. In \naddition, the episodes of contraction in GDP which commenced \nin 2016:Q2 appears to be moving towards a halt as the statistics \nfor 2017:Q1 revealed a very modest dip in output, compared to \nthe size of contraction in the previous three quarters. Headline \ninflation at 17.24 percent in April is still reasonably high but the \nestimate represents two consecutive months of deceleration. \nThese achievements, no doubt, are the outcome of the various \nmonetary policy measures in the last couple of months. Among \nothers, the recent decision to improve the liquidity condition in the \nforeign exchange market has positively impacted on confidence \nin the market and therefore reduced demand pressure. The major \nissue at this period, logically, is to strengthen the evolving stability. \nStrengthening the stability, however, is confronted with significant \nrisk factors from both the global and domestic environments. \n11 \n \nWithin the domestic environment, one of the key issues is the \nprotracted delay in the commencement of implementation of the \n2017 Fiscal Budget. The Budget has just been passed by the \nNational Assembly and awaiting Presidential assent, at almost the \nend of the first half of the year. This, invariably, has constrained \ncapital expenditure which is very critical in reducing the binding \nsupply side constraint. Given that recurrent expenditure could \ncontinue unabated under this scenario, the implication is that \naggregate demand could increase while expansion in aggregate \nsupply is constrained, putting pressure on domestic price. Against \nthis perspective, it is expedient that all the necessary processes to \nformalize the budget be swiftly completed to avert the likelihood \nof inflation resuming on the upward trajectory. Moreover, a strong \ncommitment to the economic recovery and growth plan of the \ngovernment implicitly assumes a timely implementation of the \nbudget particularly the capital expenditure component. \n Another key issue in the domestic environment is the evolving \nfragility of the banking system, being the direct consequence of \nthe negative growth in output and the depreciation of the \ndomestic currency. The contraction in output has reduced \nprofitability of firms and business outfits, leading to escalation of \nNPLs in the banking industry while depreciation of the naira, on \nthe other hand, has reduced the asset base of the banking sector \nin real term, thereby constraining their intermediation capacity. \nThe banking industry has been reacting to this adverse \ndevelopments through a gradual cut in credit, particularly, credit \n12 \n \nto the private sector. This development is not expected to show \nimprovement within the near term given that the shocks appear \nto be permanent in nature. As a result, further tightening of \nmonetary policy stance, though could help to address the \nimbalance in price level, may not be the preferred option under \nthe present circumstances. \nBeside the challenges in the domestic environment, there are \nsome thorny issues in the global environment. One of the global \nissues with far reaching implication is the commencement of \nmonetary tightening by the US Federal Reserve (Fed). In response \nto this development, most currencies particularly, emerging \ncountries‟ currencies have started shedding weight against the US \ndollar. For example, the Euro, Pound Sterling, Japanese Yen, and \nChinese Renminbi depreciated by 0.23, 4.67, 2.26, and 3.0 \npercent, respectively against the US dollar in 2016. Economic \nagents can suspect that the domestic currency would follow \nsimilar route with other emerging countries‟ currencies and such \nsuspicion would weigh on confidence with the ultimate effect of \nspeculative attack on the currency. Given that further tightening is \nnot appropriate at this period based on output concern, the \ncurrent flexible exchange rate regime should be appropriately \nmanaged to avoid appreciation that does not align with key \nfundamentals which could be detrimental to the stock of external \nreserves \nand \ncompetitiveness \nof \nnon-oil \nexports. \nThis \nnotwithstanding a careful analysis would be required to maintain \noptimum liquidity in the foreign exchange market to sustain \n13 \n \nconfidence. Furthermore, the ongoing hike in interest rate by the \nFed has the potential of tightening external financing condition, \nimplying that support for the budget through external financing \nmay remain elusive. Consequently, there is a need to strengthen \nall available means for mobilizing domestic resources. \n The other key issue within the global environment with \nconsiderable implication is the unsteady nature of oil price. There \nhas been some rally in crude oil prices since the beginning of the \nyear on account of cut in supply like the output freeze deal by the \nOPEC and host of other factors. The challenge is that the drivers of \nthe price increases have little to do with improvement in global \nfundamentals. Perhaps more disturbing is the renewed interest in \nshale oil exploration in the US with considerable potential to \nincrease global supply of crude and thereby exert downward \npressure on price. Latest information indicates that three major oil \ncompanies are pumping a whopping investment in the \nneighborhood of US$10 billion into shale oil exploration in an \nadventure that could make shale oil production profitable at \nUS$20/barrel. In essence, the current rally in the prices of crude oil \nappears vulnerable to setback with far reaching consequence on \nnot only the external sector but with equal degree of severity on \nthe fiscal sector as well as other sectors. \nPerhaps more importantly, there is the issue of rising economic \nnationalism and waning support for global trade in advanced \neconomies, \nwhich \nis \nfurther \ncomplicated \nby \nheightened \n14 \n \nuncertainty in the euro area. It is without controversy that many \nemerging markets (EMs), including Nigeria, have been able to \ntransit from low to middle-income status by integrating into the \nglobal economy. It is, however, becoming clearer that inward \nlooking economic strategies could become the preferred global \nframework as the rebalancing model is gaining momentum in \nChina while the US, under the new dispensation, is shifting towards \nprotectionism. The point here is that net export may still be driving \ngrowth process but the prospects over the long term appears \ndiminished. For Nigeria, the balance of payment account \nwitnessed considerable challenge from mid-2014 to the end of first \nhalf of 2016. The improvement in the latter half of 2016 resulted \nmainly from drastic reduction in imports which initially was due to \nforeign exchange constraint but later due to substitution of some \nimported items with domestically produced ones. Viewed within \nthis prism, emerging economies such as Nigeria should start re-\nexamining their economic model to avoid being caught napping. \nIt is commendable that the country has recorded significant \nmilestone in rice production such that it has taken over imported \nrice within a space of two years. This initiative should be sustained \nby extending the success story on rice to other critical products \nlike refined petroleum products. Put succinctly, there is a \ncompelling need to strengthen structural policies particularly in \nthe area of encouraging the consumption of home made goods \nin line with the thrust of economic recovery and growth plan \n15 \n \nAgainst the perspectives of the issues highlighted above, it is very \nclear that concern for growth is important but at the same time \none must be conscious that growth is not a zero-sum game. Efforts \nmust be devoted to strengthening the fledgling stability in the \nmacroeconomic environment. In this regard I vote for the \nretention of all the existing measures of monetary policy. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n16 \n \n2. BALAMI, DAHIRU HASSAN \nThe global challenges likely to affect the Nigerian economy \ninclude the following: slowdown in global recovery; low \ncommodity prices and weak fiscal buffers; weak demand and \nconsumer spending; terrorism and geopolitical tensions; significant \nexchange rate volatility and widening global imbalances. \nHowever, at the domestic level, the banking sector level of \nresilience is becoming weaker as shown by the stress tests result. \nThe May 2017 MPC meeting met a deteriorating situation of the \nNigerian financial sector. The result of the stress tests showed that \ncapital adequacy ratio had deteriorated from 13.6 per cent in \nFebruary to 12.81 per cent in April, which is below the prudential \nrequirement of 15 per cent for banks with international \nauthorisation. The NPLs have also risen to 15.18 per cent from 13.59 \nper cent in February 2017 which is far above the prudential limit of \n5 per cent. The liquidity ratio has also registered a decline from \n46.61 per cent to 44.60 per cent. When compared with the \nprudential limits of 30 per cent, it can be seen that the interbank \nmarket has not been active, reflecting the fact that banks have \nnot been trading among themselves which is not a desirable \nsituation. Some of the banks are making use of the SLF which \nunder normal circumstances are meant for weaker banks. This \nneeds to be discouraged. Even with the bad ratios, banks are still \nmaking profit. It should be noted that the three previous outlier \nbanks have now become four. If adjustments are made for foreign \nexchange, the banks will be making lower levels of profit. \n17 \n \nTo move the economy forward, the MPC would have preferred to \nhave low interest rates, stable exchange rate, low inflation and \nhigh GDP growth. However, the current low level of reserve due \nto low commodity prices and output, pressure on the Naira and \nstrengthening of the dollar, low agricultural output, and terrorism in \nthe North-East as well as low energy supply and broken down \ninfrastructural facilities and risen cost of transportation, does not \npermit the quick reversing of the situation. The critical question is \nwhat can be done to bring down interest rates and as well \nincrease the rate of economic growth without affecting inflation? \nThe relationship between the Government and the CBN in terms \nof financing through ways and means need to be guarded \nbecause of the likely negative implications on the economy if not \nhandled with care. The case study of other countries should be \nreviewed so that we do not fall into the Zimbabwean situation. \nI vote to retain the existing stance in its entirety to allow previous \npolicy measures taken to work through the economy. Currently, \ninflation is trending downwards from 17.24 per cent in April to 16.13 \nper cent in May 2017. This however, needs to be watched \nbecause the downward trend may be as a result of base effect, \nand the negative level of growth is trending downward which is \nan improvement. The Purchase Manager‟s Index (PMI) also signals \nrecovery of the Nigerian economy. It is hoped that the effective \nand holistic implementation of the 2017 budget will assist in \nmoving the frontiers of growth to support the economy„s gradual \nrecovery from recession. \n18 \n \nI therefore decide as follows: \nRetain the MPR at 14 percent \nRetain the CRR at 22.5 percent \nRetain the liquidity ratio at 30 per cent; and \nRetain the asymmetric corridor at +200 and -500 basis points \naround the MPR. \n \n \n \n \n \n \n \n \n \n \n \n \n \n19 \n \n3. BARAU, SULEIMAN \nBackground \nThe imbalances in key macroeconomic sectors are gradually \nwaning in response to various monetary policy as well as \nadministrative measures enunciated in the last couple of \nmeetings. Of significant importance is the reduction in the \nfinancial market volatility with the achievement of a fair degree of \nstability in the exchange rate while the margin in rates between \nthe two markets equally narrowed considerably. Furthermore, the \nlatest statistical estimates indicate that the trough on real GDP is \non the verge of bottoming-out as real output contracted by 0.52 \npercent in 2017:Q1, a modest shrinkage relative to the magnitude \nrecorded in the previous three quarters. Although inflation remains \nelevated, it is comforting that it is equally decelerating. \nThe key issue at this period revolves around strengthening the \nnascent stability in the macroeconomic environment in the \nexpectation of a positive spillover to the real sector. Towards this, \nsome key challenges are still glaring, notably the evolving fragility \nof the banking sector and the unsteady nature of commodity \nprices which could trigger volatility in the foreign exchange \nmarket. Within the context of strengthening the macroeconomic \nenvironment particularly with inflation and exchange rate stability \nin focus, it may not be expedient to commence loosening of \nmonetary policy stance at this period while concern for output \nrecovery may not support further tightening. Consequently, I opt \n20 \n \nto vote for a hold on key monetary policy measures, a decision \nthat is further reinforced by the need to allow for full transmission \nof various measures in place. \nPressure Points \nExternal Environment \nThe latest projection by the IMF shows that global output would \nexpand by 3.5 percent in 2017, a significant improvement over 3.1 \npercent recorded in 2016, anchored on buoyant financial market \ncondition and cyclical recovery in manufacturing, particularly in \nthe advanced countries. These developments portend the \ncapacity to improve external demand for emerging market \neconomies including Nigeria but not without some downside risks. \nAmong others, the near to medium term stance of policy by the \nUS Federal Reserve is an issue most monetary authorities in the \nemerging market economies must contend with. Rate was hiked \nin their last meeting which was held in March but it is not unlikely \nthat the sequence of interest rate hikes may proceed at a faster \npace than anticipated. My view is premised on the body \nlanguage of some top officials of the US Fed as well as recently \nreleased statistics, which revealed that inflation is getting close to \nthe natural rate of 2 percent. Given that the US dollar has rallied \nagainst most currencies since the beginning of the year, it could \ntherefore \nbe \nexpected \nthat \nmost \ncurrencies \nparticularly \ndeveloping and emerging economies currencies could still shed \nmore weight against the US dollar. Outside the advanced nations, \n21 \n \nit is widely expected that some leading emerging economies like \nChina could also tighten financial market condition on the \nbacklash of rapid credit growth. These developments could \ntrigger financial market volatility in other emerging market \neconomies with potential spillover to the real sector. \nOn another dimension, global recovery over the medium term \nwould continue to be weighed down by certain structural \nconstraints including the lingering challenges of low productivity, \nhigh income inequality, and the evolving stance of nationalism \nand protectionism, which is a marked deviation from economic \nintegration and globalization that have propelled global output in \nrecent times. The evolving economic architecture would in the first \nround act as a drag on global volume of trade and ultimately \nreinforces the downside risk to growth with the emerging and \ndeveloping economies being at the receiving end. \nAnother key issue is the rising level of uncertainty heightened by \ndevelopments in global political arena. France has just concluded \nan election that produced the youngest president in the history of \nthe country while a number of countries in the euro area are still \nheading for the poll during the course of the year. Under this \ncondition, business confidence may be hurt as investors take a \ncautious approach to clearly discern the direction of policies of \nnew governments. For euro area that is just exiting from recession, \nsuch a move may likely weigh on growth prospects with a spillover \nto the entire global economic landscape. The channels of \ntransmission of these developments to the domestic economy \n22 \n \nremain the commodity and financial markets. From the \ncommodity market, oil prices have shown some rally since \nDecember 2015 as global demand strengthened in the face of \ntight supply condition. The complex interaction of strengthening \nUS dollar with possible downward revision of global output growth \ncould weaken oil price with pronounced negative impact on both \naccretion to external reserves and fiscal revenue in Nigeria. \nThe last issue is the commencement of uptick in global inflation. \nHeadline inflation is projected to increase in the US from 1.3 \npercent in 2016 to 2.7 percent in 2017. Similar trend is also \nexpected in most of the advanced and a number of emerging \nmarket economies. This, in essence, implies that as domestic \nupside risks to inflation recede, the contagion from the global \nenvironment is being activated. \nDomestic Environment \nDelay in Budget Process: The 2017 Appropriation Bill has just being \npassed by the National Assembly, five months into the current \nfiscal year, while it is yet to receive Presidential assent. Given a lot \nof controversy that is still ongoing around the document, it is not \nunlikely that the final presidential assent may take a while. In light \nof the fact that the constitution permits expenditure on only \nrecurrent component under this scenario, it implies that the \ncapacity to improve the supply base is constrained while pressure \nfrom the demand side could increase with the obvious implication \nof heightening inflation risk, notably structural inflation. \n23 \n \nReduced Capacity of the Banking Sector: The banking sector has \nbeen highly challenged by the adverse developments in both the \nfinancial and real sectors of the economy. The contraction in real \nGDP contributed substantially to elevated NPLs in the industry, \nwhich has, invariably, elicited cutback in the level of credit \nexposure by the banks since the latter half of 2016.From the \nfinancial sector development, the depreciation of the domestic \ncurrency has reduced the value of banking asset in real terms. \nRecent statistics showed that total banking assets denominated in \nUS dollar reduced by 27.4 percent in 2016 compared to the level \nin 2015 on account of currency depreciation of about 55 percent \nduring the period. The reduction in asset in real term coupled with \nthe elevated NPLs would therefore weigh on the capacity of the \nbanks to support the recovery process. \nUnsteady Nature of Commodity Prices: Crude oil prices rallied in \nthe last couple of months mainly due to transitory supply \nrestraining forces including supply outage in Libya, production cut \ndeal by OPEC, geo-political tension in the Middle East due to \nSyria, and the intention by Russia to extend major producers \nproduction cut agreement. In essence, upturn in prices was not \ndue to strong fundamentals in the global economy. Some of these \nupward driving forces can easily be resolved which invariably \nimplies that the current rally in price is vulnerable to set back. My \nposition is further informed by the renewed interest in shale oil \nproduction in the US with significant capacity to boost global \nsupply of crude oil. \n24 \n \nElevated Margin in the Forex Markets: As pointed out in my last \nstatement, the Bank has made giant stride in narrowing the \nmargin between the rates at the interbank and the BDCs‟ markets \nfrom as high as over 150 per cent in the last quarter of 2015 to the \ncurrent \nlevel \nof \nabout \n23 \nper \ncent. \nThe \nachievement \nnotwithstanding, the current margin is still fairly elevated as it is \nconsiderably higher than the threshold of 5 per cent in most \njurisdictions. The margin, therefore is a potential source of \narbitrage which could distort monetary policy implementation. \nWay Forward \nImprove Confidence in the Forex Market: The ability to sustain the \ngain recorded so far is critically hinged on stability in the foreign \nexchange market. With the ongoing appreciation of US dollar \nagainst most currencies, there may be tendency on the part of \neconomic agents to express doubt on the capacity of the Bank to \nsustain the current trend in rates. This, invariably, would fuel \nspeculative demand and self-reinforcing depreciation. Towards \nthis, there is a need to sustain the current tempo of liquidity in the \nforex market while equally fine-tuning the administrative measures \nthat could narrow the margin in the two markets. \nQuick Implementation of the Budget: Fiscal policy must play a \npivotal role in driving economic progress in the face of the rapidly \nemerging anti-benign global economic condition. The instrument \nof budget in particular is very crucial in staving off downside risks \nto growth and therefore offers the necessary support for the \n25 \n \nongoing recovery process. On this note, I want to commend the \nNational Assembly \nfor the recent passage of \nthe 2017 \nAppropriation Bill but it needs to be equally stressed that the \npassage of the Bill at five months into the fiscal year is grossly short \nof the urgency required to address the current macroeconomic \nimbalance. This notwithstanding, it is expected that the ongoing \nreconciliation and verification as well other issues surrounding the \n2017 Appropriation Bill would be swiftly completed such that the \ndocument would receive Presidential assent and implementation \ncommence in earnest. \nSupport for the Banking Sector: Net domestic credit, on annualized \nbasis, grew by mere 4.2 per cent at the end of the first quarter, \nsignificantly lower that the target of 32 percent per cent. This low \nlevel of growth in credit, obviously, cannot drive the anticipated \nrecovery process. The abysmal performance was largely due to \nthe strains on the banking sector from the imbalances in the \nmacroeconomic environment. The Central Bank, under its \ndevelopmental mandate, has put in place a number of credit \ninitiatives to support the recovery process but it needs to be borne \nin mind that the task of channeling financial resources to the \nprivate sector lies primarily with the commercial banks. To this end, \nI would like to emphasize, as contained in my last statement, the \nneed to provide necessary support that could repair the balance \nsheet of the banks in order to help them resume credit delivery to \nthe critical sectors. \n \n26 \n \nDecision \nInflation is decelerating but still elevated, while the stability in the \nforeign exchange market is not completely free from potential \nheadwinds, hence loosening of monetary policy stance may not \nbe a preferred option at the moment. Similarly, the need to \nsupport the ongoing recovery makes further tightening less \nattractive. Consequently, I vote for retention of all monetary \npolicy measures in place. \n \n \n \n \n \n \n \n \n \n \n \n \n \n27 \n \n4. GARBA, ABDUL-GANIYU \nDecision and Context \nI vote to hold. \nAt the March meeting of the MPC, I considered voting for \nloosening the monetary policy stance as I did at the two previous \nMPC meetings in November 2016 and January 2017. At the May \n2017 meeting, I did not consider a loosening stand. \nMy consideration of loosening in the three meetings from \nNovember 2016 to March 2017 was to ensure consistency and \ncredibility of the monetary policy stand. I was concerned at (i) the \ncontradiction between a 70 per cent growth in money supply \nbetween October 2015 and December 2016 and raising interest \nrates and (ii) the sharp depreciation of the Naira by between 36 \nper cent (interbank) and 51 per cent (Bureau De Change) and rise \nin inflation from 9.3 per cent to 18.5 per cent (100 per cent \nincrease) in the same period. The excellent tracking between \nmonthly money supply (M1), exchange rate and inflation in the \nperiod is remarkable. This was why in last personal statement, I \ncautioned against the usual generalization that Nigerian inflation \nis structural. \nThe contradiction problem arose because when money supply is \nincreased, it is expected that interest rate will fall. To grow money \nsupply and raise rates at the same time is a contradiction. So is \nloosening only to tighten. The tracking of M1 by the exchange \n28 \n \nrates (Interbank and BDC) and inflation indicates that the \ndepreciation and inflation were driven by the strong positive \nmoney supply shock. When liquidity created chase after a \ndeclining supply of dollars and goods, it is inevitable that the value \nof the Naira will fall and the cost of goods and services rise. \nWith the slowdown in the inflow of forex and, the negative \neconomic growth in the five quarters since the end of 2015, it is \neasy to see how a strong positive money supply shock could fuel \nboth currency depreciation and domestic prices directly (quantity \neffects) and indirectly (exchange rate effects) and amplify the \nslowdown in the economy into a negative growth. It was clear to \nme that the excess liquidity was a key problem not only because \nof the size of the expansion, but also, because of its sources \n(AMCON, “mop-up liquidity” mop-up and “accommodation \nliquidity”) and structure of debt growth. \nRaising MPR given the size of liquidity growth and its negative \nconsequences on exchange rate and inflation is contra-intuitive \nand contra-positive. Even without the adverse effects on private \ninvestment, employment and growth and financial system stability \nthe expected rise in “mop-up liquidity” will simply compound the \nliquidity problem and impact adversely on fiscal operations of all \ntiers of government through rise in cost of public debt and size of \ndebt service and, the crowding-out of the expenditure that will \nraise consumption (recurrent) and investment (capital) by debt \nservice. \n29 \n \nThe sharp expansion in public debt in 2016 exemplifies the \nproblem. In 2016, total public debt of the Federal government \nrose by N3.6 Trillion or 32 per cent to a total of 14.54 Trillion! [In \nComparison, before Nigeria started the process of exiting the Paris \nClub, total federal debt was N6.3 Trillion in third quarter of 2004. At \nthe exit point in the third quarter of 2006, total federal debt was \nN2.3 Trillion or just 64 per cent of the increase in 2016). \nMy vote to hold at the March 2017 MPC was “based on the \nconsensus to work out a clear path to price stability conducive to \ngrowth which is the goal of MPC consistent with its mandate.” We \nagreed that this “requires a cap on money supply, a resolution of \nthe “AMCON liquidity” problem, a reduction in “mop-up liquidity” \nand end to monetization of the crude export income as well as \nmoderation of “FAAC effects” on the stability of Call rate and \nOBB.” \nMy vote to hold at this meeting is to support a further movement \nalong the paths of return to price stability conducive to growth, \nfinancial system stability and prudent fiscal operations. This \ninevitable requires a deepening of coordination between \nmonetary and fiscal authorities. \nI have observed a significant reduction in “accommodation \nliquidity” and the moderating effects the reduction in liquidity has \nhad on inflation and to some extent on the value of the Naira. \nMuch works needs to be done in reducing “mop-up liquidity” and \nin integrating the foreign exchange market and in enhancing the \n30 \n \ninterbank money market to minimize the volumes in the Special \nLending Facility (SLF) and Special Deposit Facility (SDF). \nUnresolved Issues \nThese are the longer term issues that we must not lose sight of. I \nkeep them in my personal statement because we cannot wish \nthem away. They are: (a) the need for a clearer forward looking \nmedium to long term strategic macroeconomic management \nframework for Nigeria as the context for policy analysis and \nchoice; (b) the need to improve the functioning of the credit \nmarket to allocate resources to sectors with highest output and \nemployment elasticities and with lower default rates; (c) the \nconversion of rent havens in both the real and financial sectors to \nefficiency and effectiveness centres; (d) a shift from a present \nhedonistic orientation to a longer term commonwealth-oriented \nperspective; and (e) the elimination of strategic vacuums for \npolicy analysis and choice that increase costs of policy failures. \nI am still convinced of the need (i) to harness and put to effective \nuse the best Nigerian minds and talents in the analysis of national \nand global political economy from a diverse set of perspectives \nand skills sets to arrive at the best dynamic strategic context for \nmacroeconomic management in Nigeria compatible with our \nnational aspirations and (ii) of a continuous engagement \nbetween fiscal and monetary authorities on mutually agreed \nprinciples for fiscal-monetary policy coordination: humility, sincerity \nand integrity. \n31 \n \n5. NNANNA, OKWU JOSEPH \nSince the MPC meeting in March 2017, indicators of economic \nactivity suggest a gradual rebound in growth. The index of \nindustrial production rose by 1.38 per cent in Q1 of 2017 relative to \nthe level in 2016 with manufacturing and mining indices rising by \n0.01 per cent and 1.28 per cent, respectively. At -0.52 per cent \ngrowth in 2017Q1, compared with -1.51 per cent at end-\nDecember 2016, the negative growth is contracting, and \nultimately expected to turn positive by end-December 2017. I am \ncautiously optimistic that further investments in critical sectors \nthrough the implementation of the ERGP would shore up \neconomic activity and reduce unemployment. \n \nInflation dynamics also showed improvement on account of \npositive supply shocks and reduced exchange rate volatility. \nHeadline inflation slowed from 17.26 per cent in March to 17.24 per \ncent in April 2017 given the negative supply shock of food inflation. \nFood inflation remained sticky downward, rising from 18.44 per \ncent in March to 19.30 per cent in April 2017 arising from higher \nenergy cost, transportation cost and prolonged disruption of \nfarming activities due to insecurity. Core inflation, however, stood \nat 14.75 per cent down from 15.40 per cent in March 2017. I expect \nthe deceleration in the inflation trajectory to be sustained, as a \nresult \nof \npositive \npublic \nsentiments \nand \nexpected \nfiscal \nconsolidation, and less expansionary monetary policy. \n \n32 \n \nIt is apparent that the flexible exchange rate policy supported by \nimproved crude oil export receipt is yielding relative stability in the \nforeign exchange market. Despite the distortions in the foreign \nexchange market caused by multiple rates, a near-term \nconvergence in the rates and gradual normalisation is being \nachieved. Noticeably too, from the sharp depreciation of the \nexchange rate to near N500/$US towards the end of 2016, it \nappreciated by about 28.94 per cent to N380/$US (BDC segment \nof the market) as at May 19, 2017. At that level, the rate show \nsome degree of undervaluation, compared with the relative \npurchasing power parity exchange rate estimate of about \nN350/$US. In my opinion the current exchange rate policy regime \nincluding all the access windows to foreign exchange should be \nretained. \n \nDespite the rebound in global growth, outlook remains uncertain. \nUncertainty surrounds the stability of commodity prices and effects \nof monetary normalisation in the United States. I anticipate the \npass-through impact on domestic economic conditions to remain \nbenign as the economy has self-corrected the distortions from \nrecent portfolio capital reversals. \n \nFiscal reforms should be expedited in areas such as building of \nfiscal buffers. The authorities should cautiously execute its \nplanned fiscal deficit in the 2017 budget, in order not to spoke \ninflation and significantly, crowd-out private sector credit. \n33 \n \nEffective reforms would allow inflation deceleration and low \ninterest rate regime. \n \nOverall, in the future, keeping a tab on eliminating second-round \neffects of negative supply shocks due to food inflation is key. On \naccount of the recent macroeconomic trends and the balance \nof risks based on available information, I vote to retain the current \npolicies. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n34 \n \n \n6. UCHE, CHIBUIKE U \nAlthough inflation has continued to inch downwards, it remains in \nsolid double digit territory. At the present time, the inflation rate is \nalso above MPR. With Government currently borrowing at double \ndigit interest rates, the pressure to reduce MPR is meaningless. In \nother words, it is unlikely that the cost of credit for businesses will \ncome down when the interest rates on Government securities, \nwhich are risk free, are in double digit territory. Bluntly put, the \nGovernment is increasingly crowding out the private sector from \naccessing bank credit. \n \nAlthough economic history has shown that it is possible for \ncountries to borrow and spend their way out of recession, this \ncannot happen when recurrent expenditure continues to \ndominate government spending. Based on the above, I personally \nfind it frustrating when Government officials who are supposed to \nmonitor our debt profile consistently argue that Nigeria is yet to \nreach its optimum debt capacity. Surely such views are arrived \nout without taking into consideration, the peculiar nature of our \neconomy. Although Nigeria drastically reduced its debt burden \nduring the Obasanjo era, our debt profile is now rising at an \nalarming rate. Unfortunately, very little of such cash inflow is being \ninvested in projects that can boost our country‟s income in the \nfuture. Recently, the World Bank expressed concern about our \nability to generate enough cash flows to repay our rising debt in \n35 \n \nthe future. Our chances of being able to come out of this \ndeepening debt hole is increasingly dependent on the sole \nexpectation that oil prices will soon miraculously recover and then \nsustained at $100+ per barrel range. \n \nThe above scenario is however relatively minor especially when \ncompared with the unrelenting demands on the CBN to fund/ \nintervene in all manner of government expenditure. In my policy \nstatement submitted after the March 2017 MPC meeting, I \naddressed this subject matter thus: \n \nOne can fully understand the pressure on the management of \nthe CBN to intervene in diverse sectors of our national economy \nincluding paying salaries on behalf of government entities some \nof which are very poorly run and lack financial transparency. The \nreality however is that there is little the CBN can do in the above \ndirection without either contravening the legal instrument that \nestablished it or flouting national appropriation rules or \nsabotaging its own balance sheet. Perhaps more dangerous is \nthe fact that the action of the CBN can actually undermine its \nmonetary policy role and weaken the efficacy of its monetary \npolicy tools. It is therefore, in my humble opinion, prudent for the \nCBN to do all within its power to resist any pressure to intervene in \ndiverse sectors of our economy. \n \n36 \n \nBefore the ink used in penning the above advice could dry, it was \nbrought to my notice that the Federal Executive Council has \nmandated the CBN to fund the power sector to the tune of N701 \nbillion. The fact that the CBN has in the recent past intervened \nhandsomely in the said sector is of no consequence. Interestingly, \nthe Nigerian Electricity Regulatory Commission (NERC) has already \nmade it clear that the approved intervention fund will not be \nsufficient. Furthermore, the schism between the electricity \ndistribution companies and the Federal Ministry of Power, Works \nand Housing over the nature and structure of debts owned has \ncontinued to widen, at least in the public space. Based on the \nabove, it is safe to predict that the said intervention fund, like the \nfirst one, is unlikely to meaningfully address the problems of the \npower sector. Intervention pressures for the power sector, if \nunchecked, can thus only increase in the future. \n \nIt is however important to reiterate that such interventions can \nonly worsen our very fragile monetary policy environment. An \ninjection of such high powered money into our economy will \ndefinitely impact inflation. It will also impact the exchange rate of \nthe Naira. Aside from the above, I will like to emphasize that it is \nimportant for the CBN to check whether it indeed has the powers \nto do what it has been asked to do in a country where all \nappropriations are supposed to be sanctioned by the National \nAssembly. \n \n37 \n \nI am also fairly convinced that such a huge injection will impact \non the health of our banking system which is currently struggling \nunder the current harsh economic environment. With aggregate \nbank NPLs already in double digit territory, we should all join hands \nto ensure that policies and directives that are bound to \nunnecessarily put pressure on interest and exchange rates are \navoided. Surely, we cannot at the present time afford another \nbanking crisis. This is even more so given the fact that the fallouts \nof the last one are yet to be satisfactorily resolved. \n \nIn conclusion, the reality is that our economy is in dire straits and \nthe space for effective monetary policy intervention is fast \ndisappearing. Our current over dependence on oil rents and \ndebts is simply not sustainable. There is thus an urgent need to \nmeaningfully diversify our economy and rethink our recurrent \nexpenditure profile. Until this is done, maintaining price stability will \nbe an uphill task. Tightening monetary policy at the present time, \nfor instance, can only exacerbate the financial system risks in our \ncountry while loosening will be meaningless. \n \nI therefore vote as follows: (i) to retain the MPR at 14.00 per cent; \n(ii) to retain the CRR at 22.50 per cent; (iii) to retain the Liquidity \nRatio at 30.00 per cent; and (iv) to retain the Asymmetric Window \nat +200 and -500 basis points around the MPR. \n \n \n38 \n \n7. YAHAYA, SHEHU \nI vote to maintain the current monetary stance, due to the reasons \nprovided below \nDevelopments in the Global Economy \nThe prospects for growth in the world economy are looking a little \nbetter this year, except in some key countries such as the US and \nthe UK. In China, the growth rate is still trending slightly \ndownwards. For most of the other countries and regions, including \nthe EU area, Brazil, Russia, Japan, South Africa and Africa \ngenerally, the growth prognosis for 2017 is positive, even if modest. \nIndia is expected to regain its growth momentum. \nGlobal price levels are expected to inch upwards in the Euro area, \nChina and India. Commodity prices in the meantime are easing \ndown. \nAs far as oil prices are concerned, although the futures market is \nindicating a slight trend rise, this is unlikely to be sustained. OPEC \nhas indicated that it will extend its production management \nagreements for nine months. However, a sustained rise in prices \nwill certainly lead to substantial increases in shale oil production in \nthe US and other countries, thereby exerting downward pressure \non price levels. This, combined with the modest prospects for \ngrowth in the global economy, puts considerable uncertainty on \nthe market situation. \n \n39 \n \nThe Domestic Economy \nOverall GDP growth rate in Q1 2017, although still in the negative \nzone at -0.52 per cent, has experienced a decrease in the rate of \ndecline (it was -1.73 in Q4 2016). It is worrying though that the \nrecovery in the agricultural sector appears to be faltering, except \nthe fishing sector, which is booming, but constitutes less than 1 per \ncent of GDP output. This may partly be attributable to seasonal \nfactors. Crude Petroleum and natural gas is still falling. The solid \nminerals sub-sector is booming, with an increase in output of more \nthan 50 per cent in Q1 2017, although this may partly due to the \nexchange rate effect. The manufacturing sector is also, at last, \nshowing a positive growth rate, led by food, beverages and \ntobacco. The transport sector, led by road transport, is showing a \nsharp recovery. Construction and services are, at last, showing \npositive, albeit modest growth. The picture emerging is that of a \nslow, tentative, uneven and fragile recovery. Careful thought and \neffort is needed to support and sustain the recovery. \nHeadline inflation, at 17.24 per cent in April is only marginally lower \nthan in March. This was mainly due to the rise of 0.86 per cent in \nfood prices (processed food and farm produce), whereas \nimported food prices decelerated. Core inflation also moderated \nslightly. Headline inflation is forecast to trend downwards over the \nnext three months. However, this expectation may not be realized \nif electricity tariffs are raised, which would appear to be inevitable \nat some point, since the power sector appears to suffer from a \nstructural crisis. \n40 \n \nThe exchange rate has remained stable and the gap between \nthe inter-bank and BDC rates have continued to narrow due to \nthe steady increase in reserves and Central Bank management. \nThis should help moderate the inflationary pressure going forward \nand help provide some comfort to foreign investors. The major \nchallenge is to prudently manage fiscal policy to raise tax revenue \nand limit debt within the Growth and Recovery program targets. \nThis will obviously be a tough challenge, given pressures such as \ncontinuing salary and pension arrears in many states, the \ndemands for supporting the power sector and the agitations for \nsalary increases. Yet this is needed to help attenuate pressures on \nthe interest rate and price levels. \nThe financial sector is facing some headwinds. CAR is on a \ndownward trend, NPLs are still rising, total assets, deposits and total \ncredit are declining or slowing down in real terms (excluding the \nexchange rate effect), although there appear to be some \npositive signs in April. ROE and ROA though still declining a bit, are \nstill at a reasonable level. The performance of the commercial \nbanks is however unduly affected by the relatively poor \nperformance of a few of the Banks. The matter is being vigorously \naddressed by the CBN. \nYet, excess liquidity appears to be a challenge in the system. This \nneeds to be addressed to avoid generating additional pressures \non the exchange rate and via money supply, to prices. \n \n41 \n \nConclusion and Recommendations \nDespite a number of changes in the macro-environment, the \nmajor challenge facing the economy remains the same: how to \nachieve economic recovery, promote inclusive growth and \nmitigate inflationary pressures. \nA steady build-up of reserves and careful management of the \nexchange rate is an important ingredient. Effective management \nof the money supply, containing excess liquidity and supporting \nthe financial sector are other important tasks of the monetary \nauthorities. It is also crucial for the fiscal authorities to develop and \neffectively implement the EGRP and be fiscally prudent. It is \nunlikely that oil prices shall rise substantially. Nigeria therefore has \nto focus more on increasing oil output within the bounds that can \nbe accommodated by the OPEC production strategy. More \nimportant is therefore the implementation of the plan for \nincreased non-oil production, value addition in agriculture, \nmanufacturing, \nenergy, \nsolid \nminerals \nand \na \nsupporting \ninfrastructure. \nAs indicated above, GDP growth is still negative and recovering \nonly slowly and tentatively. It is therefore not appropriate to \ntighten monetary policy. Nor is it wise to add to the burden of the \nfinancial sector at this moment. However, it cannot be loosened \neither, given the high level of inflation, the only slight reduction in \ninflationary pressure in March and the excessive liquidity. I \n42 \n \ntherefore vote to hold the current monetary stance, while \naddressing the challenge of excess liquidity. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n43 \n \n8. EMEFIELE, I. GODWIN, GOVERNOR OF THE CENTRAL BANK OF \nNIGERIA AND CHAIRMAN, MONETARY POLICY COMMITTEE \nDevelopments in the domestic economy, year-to-date, signal \nprobable upturn in macroeconomic conditions and prospects. \nThough growth outcome stayed negative, the discernible gradual \nimprovement is reassuring. Recently released GDP growth for \n2017q1, at -0.5 percent, represented the smallest contraction \nsince 2016q1. Having turned the corner during the last quarter of \n2016, the new data suggests that recovery is imminent. \nCongruently, inflation rate slowed for a third successive month in \nApril 2107 to 17.2 percent. The downward convergence of the \nexchange rates in all market segments is also satisfying. Likewise, \nimproved metrics subsisted in the capital market alongside \nrelative stability of money market interest rates –even as M2 \nslowed. \nThough these developments are heartening, it is important to note \nthat the economy is not entirely out of the woods. As such, we \nmust remain cautiously optimistic about near-term prospects for \nbalanced growth. Nonetheless, the emergent recovery could \nsustain into the short-term amidst moderate global headwinds. \nFollowing the slight rebound in global demand and commodity \nprices, near-term global macroeconomic outlook improved \nmodestly as growth impetus picked-up in 2017q1. Annualised at \n2.8 percent, the estimated growth enhanced the prospect for \nshort-term recovery. The sustainability of this is, however, \n44 \n \nthreatened by lingering uncertainties in the political-economies of \nkey G7 countries and continued vulnerabilities in the financial \nmarkets of prominent emerging market economies. \nOn the domestic scene, the modest recovery of crude oil price, \nimproving global condition and effective macroeconomic \npolicies are having benign effects on macroeconomic conditions. \nExternal reserves rose from US$25.8 billion in December 2016 to \nUS$30.4 billion as at 19th May 2017 while exchange rates \nconverged downwards with positive knock-on effects on prices \nand output. Analyses indicate that the -0.5 percent GDP growth \nrate for 2017q1 vis-à-vis -2.1 and -1.3 percent in 2016q3 and \n2016q4, respectively, was driven by resurgence in thirteen distinct \nsectors. This recovery was attributable, not to improved domestic \ndemand in those sectors, but to declining costs traceable to the \npositive outcomes in the FX market. Similarly, the continued \nappreciation of the naira in various segments of the FX market \nhad a favourable pass-through effect as it ensured, in conjunction \nwith base-effect, that inflation rate slowed for a third consecutive \nmonth. \nI note that regardless of the salutary developments recorded \nyear-to-date, the need to correct the imbalances in the Nigerian \neconomy remains sacrosanct. Though monetary policy will \ncontinue to do its part, I emphasise again that Nigeria‟s economic \nchallenges are fundamentally due to structural factors including: \nforeign exchange scarcity (due to low crude oil receipts and \ninadequately diversified economy); constrained fiscal space; high \n45 \n \nenergy \nprices; \nand \ndepressed \ndomestic \ndemand \n(partly \nattributable to sizeable salary arrears owed to some civil servants). \nI note that the recently released Economic Recovery and Growth \nPlan (ERGP), if diligently implemented could largely correct the \nimmanent rigidities. More also, a fast-tracked and judicious \nexecution of the 2017 fiscal budget would quicken recovery. \nIn the money and credit market, available data showed liquidity \ntightness except for public sector borrowing. Annualised M2 \ngrowth as at April 2017 was 35.7 percentage points below its 10.3 \npercent benchmark. At 4.2 percent, annualised growth rate of \nNDC fell short of the 17.9 percent growth target for 2017. However, \nannualised at 72.0 percent, credit to government overshot the \nprogrammed growth rate of 33.1 percent. This inadvertently \nculminated to a less than impressive performance of private \nsector credit, which considerably under-achieved its target. The \ncontingent crowding-out of private sector credits, as more \nloanable funds are directed towards government, undermines the \nproductive investment required for accelerated rebound. \nIn general, I note that regardless of a fifth consecutive contraction \nof the GDP, analysis of the trajectory suggests that the Nigerian \neconomy is on the path of recovery. Given that the prospect \nremains fragile, it is important that efforts are coordinated at \nensuring that the underlying structural challenges are holistically \ndismantled. I continue to stress that macroeconomic policies \nshould not be parochially limited to short-term goals of \novercoming the current quagmire. Policy objective should \n46 \n \ndecisively be to correct the structural imbalances that debilitate \nthe economy. I reiterate that the CBN will continue to ensure that \nits short-term policies do not undermine the long-term prospects of \nthe economy considering the trade-off between growth and \nprice stability. I must note that the current level of inflation in \nNigeria is a threat to sustainable growth. Our in-house analysis \nindicates that prevailing inflation rate is significantly above the \nthreshold at which it could be deemed beneficial to growth. In this \nregard, if we must achieve the growth objective it behoves us to \ncurb inflation at this time. \nIn considering my position at this MPC Meetings, I note the modest \nbut gratifying improvements in the economy during the year \nespecially reducing inflation, upturn in GDP growth, and \nexchange rate convergence among others. I also note that these \nmetrics, nonetheless, are outside their preferred levels. Besides, \nunemployment and poverty remain visibly present as domestic \ndemand stays depressed. Private sector credit and investment are \ngrossly underperforming. While I personally desire that interest \nrates and monetary conditions ease, the fundamentals show such \naction would be sub-optimal at this time. There is need to ensure \nthat liquidity conditions are appropriate to deter undue exchange \nmarket pressure and contain inflation. We must, also, always \nensure that our decisions do not distort the recovery of the \nNigerian economy. Given the archetypal lengthy lag of monetary \npolicies, I note that the effects of our previous decisions are still \npermeating the system. In my view, policy tweaking today may be \n47 \n \nsomewhat impetuous and could unwarrantedly derail the \nimminent recovery. \nBased on the foregoing, I vote to: \n1. Retain the MPR at 14.0 percent; \n2. Retain the CRR at 22.5 percent; \n3. Retain the asymmetric corridor at +200/–500 basis points; and \n4. Retain liquidity ratio at 30.0 percent", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Central Bank of Nigeria Communique N0 113 of the Monetary Policy Committee with Personal Statement at the meeting held on May 22 and 23, 2017 (1).pdf"}
{"doc_id": "8c15342fce71ccb6be5ca9f3967a98ff", "text": "CENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 64 OF THE \nMONETARY POLICY COMMITTEE MEETING, JULY 7, 2009 \n \nThe Monetary Policy Committee (MPC) met today to review and discuss the \nlatest domestic and international developments and their implications for the \nNigerian economy. The Committee noted the continued adverse effects of \nweak global demand and falling crude oil production on Nigeria’s external \nand fiscal performance during the second quarter of the year. The MPC \nnoted the reported prospects of economic recovery in some emerging market \neconomies. However, this development is not likely to offset the continued \nweak economic performance in advanced economies. In view of the \nopenness of the Nigerian economy, the Committee observed that the growth \nprospects may weaken in the remainder of 2009, more so that inflationary \ntendencies appear to be persisting. \n \nKey Economic and Financial Developments \n \nDomestic Output \nProvisional data from the National Bureau of Statistics (NBS) indicated that \nthe Gross Domestic Product (GDP) at 1990 constant basic prices grew by \n4.85 per cent in the first quarter of 2009. It is estimated to grow by 5.13 per \ncent in the second quarter of 2009 compared with 5.20 per cent in the \ncorresponding period of 2008. The non-oil sector is estimated to grow by \n8.03 per cent in the second quarter of 2009 mainly as a result of the \nperformance of agriculture (2.84 per cent); wholesale and retail trade (2.20 \nper cent); and services (2.28 per cent). \n \n \n2\nThe NBS forecast showed a lower growth of 5.75 per cent in overall real \nGDP for 2009, compared with 6.41 per cent in 2008, notwithstanding the \nprojected weak performance of the global economy. \n \nPrice Developments \nInflation \nThe Committee noted the marginal decline in headline year-on-year inflation \nrate to 13.2 per cent in May from 13.3 per cent in April 2009. The \npersistence of high food inflation at 15.7 per cent in May compared with \n15.3 per cent in April remains a matter of serious concern given its \noverwhelming weight in the consumer price index (CPI) basket. It is, \nhowever, expected that the headline inflation would slow down in the \ncoming months on account of slack demand and the likely improvement in \nthe supplies of agricultural produce. \n \nMonetary Developments \nProvisional data indicated that broad money (M2) decelerated sharply by 4.9 \nper cent in the first five months of 2009 in contrast with the growth of 29.9 \nper cent during the corresponding period of 2008. On a year-on-year basis, \nM2 grew by 15.6 per cent, mainly on account of the decline in net foreign \nassets and slowdown in credit to private sector. The decline in net foreign \nassets reflected the fall in oil export receipts and deceleration in other \ninflows, calling for policy initiatives to improve the availability of foreign \nexchange in the system. The slowdown in credit to private sector is not \nunconnected with the slack domestic demand as well as financial squeeze, \nrequiring a combination of credit and structural measures to ensure that there \n \n3\nare no enduring adverse effects of credit slowdown on growth and \nemployment. \n \nInterest Rates \nKey interest rates at the inter-bank market rose in May and June 2009. The \nweighted average inter-bank call rate on unsecured transactions stood at 12.5 \nper cent in April, 13.2 per cent in May and 18.6 per cent in June. In the first \nfew days of July, the inter-bank call rate ranged from 21 to 22 per cent. The \nweighted average open buy back rates in April, May and June were 7.1, 7.2 \nand 7.7 per cent, respectively. The average spread between the call rates and \nthe rates on secured transactions has been very high at 1090 basis points in \nJune, 600 basis points in May and 540 basis points in April. \nThe average prime lending rate rose from 19.34 per cent in April to 19.53 \nper cent in May 2009 while the average maximum lending rate declined \nfrom 23.17 per cent in April to 22.86 per cent in May. The weighted average \nrate on all categories of deposits rose from 5.98 per cent in April to 6.13 per \ncent in May 2009. Thus, the spread between the two rates is higher than the \ncurrent inflation rate, which provides a unique opportunity to banks to \nimprove efficiency and reduce lending rates. \n \nExchange Rates \nThe MPC noted with satisfaction that recent measures to stabilize the Naira \nexchange rate have posted some positive outcomes. The Naira exchange rate \nhas stabilized at the rDAS in recent weeks while in the other segments, the \nrates have appreciated, thereby narrowing the arbitrage opportunities. \n \n4\nHowever, the premium over the rDAS rate has remained significant. The \npresent situation offers an opportunity to further narrow the gap between the \ntwo rates by measures aimed at further liberalizing the inter-bank foreign \nexchange market. \n \nExternal Reserves \nForeign exchange reserves as at July 03, 2009 amounted to US$43.19 billion \n(provisional) compared with US$53 billion at end December 2008. The \ndecline in reserves mirrored mainly the relative downward drift in \ninternational crude oil prices from the levels reached in mid-2008 and the \nslowdown of other foreign exchange inflows. However, the decline in \nreserves is likely to moderate in the next two quarters owing to the expected \nrise in international crude oil demand arising from recent reports of \nimprovement in the recovery prospects in the US and other developed \ncountries and in the relatively favorable outlook for growth in some \nimportant emerging economies. \n \nThe Stance of Policy \nThe Committee noted that the recent economic and financial developments \npoint to the need for policies to be focused on growth, exchange rate and \nfinancial market dynamics. Monetary and credit policies have to be \ntherefore properly integrated with exchange rate policies. The stance of \nmonetary policy in the coming months would be assure that liquidity, both \ndomestic and foreign currency, is adequate to meet genuine demand and that \nreal lending rates are moderated. To match these forces for bringing about \nstability in foreign exchange and domestic money markets, the CBN would \n \n5\nundertake suitable foreign exchange and domestic open market operations in \na coordinated manner in the coming months. For this purpose, the CBN \nwould announce an advance calendar of its operations for each week so that \nmarket expectations are formed in a manner that is conducive to the \nrealization of the objectives of policy. The CBN also proposes to have in \nplace firm consultation procedures with bank executives prior to and after \nthe policy meetings as a condition for bringing about a more open and \ntransparent monetary policy. \n \nDecisions: \nIn the light of the above, the Monetary Policy Committee decided as \nfollows: \n \nA. \nInterest Rate Policy \n1) \nThe Committee affirms the clearly established empirical \nevidence of a strong nexus between low real interest rates and \neconomic growth. However, the strategy for achieving low \ninterest rates will need to be based on market forces and involve \na deliberate and painstaking effort aimed at addressing \nstructural problems that had lead to high interest rates. All caps \nand floors imposed thus far by the Bankers’ Committee have \nturned out to be unenforceable and counter-productive. Only a \nminority of banks are fully compliant. The Committee has, \ntherefore, removed those caps. \n \n2) \nThe wide divergence between inter-bank rates and the \nMonetary Policy Rate (MPR) exerts pressures on lending rates. \n \n6\nAs part of the strategy for achieving convergence, the Monetary \nPolicy Framework which has the interest rate corridor as an \nimportant component is hereby restored. Consequently, the \nMPR would be reduced from 8.00 per cent to 6.00 per cent per \nannum. The corridor of interest rates would be +/- 200 basis \npoints, with the rate on the standing lending facility at 8.00 per \ncent and the rate on the standing deposit facility at 4.00 per \ncent. \n3) \nIt is recognized that high inter-bank rates are substantially \ndriven by the refusal of banks to lend to each other because of \nperceived counter-party risk. Whereas steps are being taken by \nthe CBN to address this problem through proper bank audits, \nappropriate resolution frameworks and enhanced disclosure and \ntransparency in financial statements, these will take some time \nbefore finalization and full restoration of confidence in the \nsystem. In view of the dire consequences to the real sector and \nthe banks themselves of a sustained regime of excessively high \ninterest rates, it is important to de-risk the inter-bank market \nand address the concerns of lenders and investors while the \nregulatory reforms are in progress. \n \nConsequently, the CBN shall provide a guarantee on all inter-\nbank placements from July 2009 to March 31, 2010. This \nguarantee is also extended to placements with banks by pension \nfunds. Details of operational modalities will be discussed at the \nBankers’ Committee meeting. However, a condition for this \nguarantee is that pricing must reflect the credit enhancement it \n \n7\nprovides. Overnight placements shall not be priced higher than \nMPR + 2%. A maximum spread of 300, 400 and 500 basis \npoints above the MPR shall be maintained for tenors up to 30, \n60 and 90 days, respectively. This will lay the foundation for \nevolving a risk-free yield curve at the short end. The CBN \nexpects to conclude its work on diagnosis, resolution and \ndisclosure policy in the banking system, latest by March 31, \n2010. \n4) \nIn view of the CBN guarantee of the interbank market \ntransactions, there will be no new loans on the Expanded \nDiscount Window (EDW) and no extension of maturing \nobligations. Furthermore, all banks are required to liquidate \ntheir obligations under the EDW facility at maturity. \n \nB. \nForeign Exchange Market \n1) \nThe inter-bank foreign exchange will be liberalized with \nimmediate effect and wDAS replaces rDAS. \n2) \nAll other restrictions imposed recently are removed and the net \nopen position limit for banks is increased to 5% of banks’ \ncapital base. \n3) \nAll Class ‘B’ Bureaux-de-Change may now participate directly \nin the CBN window. Only those with valid licences are \neligible. However, they will make a caution deposit of \n$20,000.00 each. \n \n4) \nClass ‘A’ BDCs capital requirement is hereby reduced from \n \nN500 million to N250 million. \n \n8\n5) \nAllocation of foreign exchange will differ in magnitude \nbetween Class ‘A’ and ‘B’ BDCs, given the different levels of \ncapitalization. \n \n \n \nSanusi Lamido Sanusi \nGovernor, \nCentral Bank of Nigeria \nAbuja \nJuly 7, 2009", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/central bank of nigeria mpc communiqué no 64, july 7, 2009.pdf"}
{"doc_id": "9206b7cc7ff696f82dfa746f4028e187", "text": "1 \n \nCentral Bank of Nigeria Communiqué No. 62 of the Monetary \nPolicy Committee Meeting, April 08, 2009 \n \nThe Monetary Policy Committee (MPC) met today to review the challenges posed \nto the Nigerian economy by the complex mix of external and domestic economic \nand financial developments. The Committee recognized at the outset that external \nforces have had a severe impact on the Nigerian economy through trade, finance \nand confidence channels. The Committee, however, noted that the severity of the \nimpact could be alleviated by undertaking appropriate economic and financial \npolicies, taking into account the evolving international economic situation. \n \nThe Committee noted that movements in crude oil prices play a critical role in the \nNigerian economy. This has limited the macroeconomic and external performance \nof the economy since October 2008. During the first quarter of 2009, the outcomes \nhave been mixed. \n \n \n \n \n \n \n \n \n \nKey Economic and Financial Developments \n \nThe Committee reviewed the recent policy initiatives by the CBN to stabilize the \nforeign exchange market and to improve liquidity conditions in the domestic \nmoney market. It welcomed the staff assessment of the positive impact of these \ninitiatives on the domestic economy, given the market view of the outlook in the \ncontext of the global economic and financial crisis. \n \nDomestic Output \n \nProvisional aggregate output growth in the first quarter of 2009 was estimated at \n6.32 per cent by the National Bureau of Statistics (NBS) compared with 5.78 per \n \n2 \n \ncent in the corresponding quarter of 2008. For 2009 as a whole, the NBS estimate \nof real output growth is 5.75 per cent. Compared with the growth outlook of the \nrest of the world, the projected domestic output growth is robust. \n \nPrice Developments \n \nInflation \n \nInflation has been high and a matter of concern. The Committee noted the upward \nswing of the year-on-year headline inflation from 14.0 per cent in January to 14.6 \nper cent in February 2009. Core inflation, however, decelerated to 7.2 per cent in \nFebruary from 8.0 per cent in January whereas food inflation rose from 18.4 per \ncent in January to 20.0 per cent in February. The outlook for inflation in the near \nterm remains uncertain. Nonetheless, the staff estimates indicate that inflation \ncould decelerate to single digit by mid-2009, in response to subdued aggregate \ndemand, lower impact of imported inflation and the near-completion of the pass-\nthrough effect of the depreciation of the Naira. \n \nInterest Rates \n \nThe domestic money market rates have been under pressure since February 2009. \nThe weighted average inter-bank call rate went up from 17.62 per cent in February \nto 22.15 per cent in March. The collateralized Open Buy Back (OBB) rate \nhowever was lower than the Monetary Policy Rate (MPR). The deposit and \nlending rates too have inched up. The staff expects that in the near-term, interest \nrates are likely to moderate in response to expected subdued inflation and \n \n3 \n \nimprovements in the liquidity conditions facilitated by the CBN initiatives in this \nregard. \n \nExchange Rate \n \nThe MPC noted with satisfaction the positive outcomes of measures taken recently \nin stabilizing the exchange rates in all the segments of the market. The demand for \nforeign exchange has moderated significantly in the retail Dutch Auction System \nand will continue to be sustained in the near term. \n \nMonetary and External Developments \n \nProvisional data indicates that broad money (M2) declined by 1.14 per cent in \nFebruary 2009 over the end-December 2008 level. However, on a year-on-year \nbasis (February 2009 over February 2008) M2 grew by approximately 30 per cent. \nThis was mainly on account of 44 per cent (on annualized basis) growth in credit to \nthe private sector by end-February 2009. The order of expansion in M2 on a year-\non-year basis is in line with long term trends and could be sustained in the short to \nmedium term. \n \nThe Committee noted that financial conditions in the country remain robust. There \nare no apparent systemic threats to the banking system. Regulatory practices and \nguidelines are generally in line with best practice. The Committee further noted \nwith satisfaction the efforts being made to continuously improve upon the \nregulatory framework. \n \n \n4 \n \nForeign exchange reserves position has continued to support external \nsustainability, facilitated by the downward movement in the overall world trade \nand financial flows. \n \nPolicy Coordination \n \nThe Committee is of the view that for monetary policy to be credible and effective, \nit should have the support of appropriate fiscal policy and structural reforms. The \nCommittee therefore reaffirmed its commitment to coordinate monetary policy \nactions with those of fiscal and other institutional and regulatory policies. The \nMPC underscored the importance of the CBN acting in concert with the fiscal \nauthorities in the efforts at addressing the global economic and financial crisis. \n \nConclusion: \nIn conclusion, the MPC observed the relative tight monetary conditions in the \neconomy, and hence the need for monetary easing. The major pressure points for \nmonetary policy in the short term include: \n• Liquidity tightness and hence relatively higher interbank interest rates, and \nalso pressures on other interest rates \n• Lower growth rate of credit to the private sector compared to the trend in the \nlast three years \n• Rising food price inflation, and need for increased agricultural output \n• Ensuring the continuation of banking and financial sector stability and \nsoundness \n \n \n \n5 \n \n \nDecisions \nIn view of the above, the MPC decided to: \ni) \nReduce MPR from 9.75 per cent to 8.0 per cent; \nii) \nReduce the liquidity ratio from 30.0 per cent to 25.0 per cent with effect \nfrom April 14, 2009; and \niii) \nReduce the Cash Reserve Requirement (CRR) from 2.0 per cent to 1.0 \nper cent with effect from April 14, 2009. \n \nThe MPC also commended the earlier CBN Board’s decision and Mr. \nPresident’s approval in respect of the N200 billion special agricultural fund for \nlarge scale agriculture. The CBN will fully underwrite the cost of the fund, and \nensure immediate implementation. This initiative will significantly reduce food \nprice inflation, and assist the CBN in achieving its core mandate of price \nstability. \n \n \n \n \n \nProfessor Chukwuma C. Soludo, CFR \nGovernor, Central Bank of Nigeria \nApril 8, 2009", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/mpc communiqueapril 2009.pdf"}
{"doc_id": "d7a738c928d04d9557709ba1d5882353", "text": "1 \n \n \n \n \nCENTRAL BANK OF NIGERIA COMMUNIQUÉ NO. 138 OF THE 281ST MONETARY \nPOLICY COMMITTEE MEETING HELD ON THURSDAY, 16th AND FRIDAY, 17th \nSEPTEMBER 2021 \nThe Monetary Policy Committee (MPC) met on the 16th and 17th September, \n2021, on a relatively comforting note of a moderate global output growth \nrecovery and improved global trade. The performance of the global economy \nin the first two quarters of the year and into the third quarter, remained \nfavourable with positive outlook for the rest of the year. However, cautious \noptimism persists, driven primarily by mutating and more fatal strains of the \nCOVID-19 virus and disparities in the progress of vaccinations across several \ncountries. In the domestic economy, output growth performance continued to \nimprove, signposting the positive impact of the unwavering fiscal and monetary \nsupport by both the fiscal and monetary authorities to revive and sustain \neconomic growth, post pandemic. The Committee reviewed the developments \nin the global and domestic economic environments in the third quarter of 2021, \nas well as the outlook for the rest of the year. \nTen (10) members of the Committee attended this meeting. \nGlobal Economic Developments \nThe Committee noted the continuing rebound in the global recovery as several \nadvanced and emerging market economies posted promising second quarter \noutput growth figures, despite the uneven progress in vaccination coverage. \nThe MPC noted that the uncontained spread of the COVID-19 virus continues to \npose downside risks to global recovery in 2021 and into 2022. The MPC further \nnoted that despite the strong output growth identified in some Advanced \nEconomies, several developing economies were still lagging in vaccination \nprogress. Members, emphasized that the widespread availability of vaccines, \nremained vital to surmounting the Pandemic and attaining full and all-inclusive \n2 \n \n \nrecovery of the global economy. Despite the challenges posed by the ongoing \nmutation of the coronavirus, governments across the globe remain focused on \neasing business restrictions and resuscitating economic activities. Consequently, \nthe International Monetary Fund (IMF), maintained its aggregate projection for \nglobal growth in 2021 at 6.0 per cent, but increased its projection for the \nAdvanced Economies to 5.6 per cent from a previous 5.1 per cent, while that for \nthe Emerging Markets and Developing Economies (EMDEs) was downgraded to \n6.3 per cent from 6.7 per cent. \nPrice development across several Advanced Economies has remained on a \nsustained uptrend and exceeding their long run objectives. This is expected to \ncontinue in the short to medium term as against earlier forecasts that the upward \nshift was transient. Consequently, several central banks of advanced economies \nare \ncurrently \nconsidering \nearly \ncommencement \nof \nmonetary \npolicy \nnormalization, even though policy rate adjustments are not expected in the \nmedium term. Across several Emerging Market and Developing Economies, \ninflationary pressures remained mixed, as some economies had much higher \nrates than their peers, due to lingering exchange rate pressures, capital flow \nreversals, high energy costs, supply chain disruptions and poor response to policy \nstimulus resulting from structural bottlenecks. \nIn the global financial markets, the Committee noted that while demand for \nequities remained strong, an indication of renewed market confidence, gold \nprice still maintained its post-Pandemic high, reflecting the hedging by investors \nagainst a possible rebound of the Pandemic. Long-term sovereign bond yields \nare expected to improve with the commencement of monetary policy \nnormalization by central banks of advanced economy. Committee members, \nhowever, expressed cautious optimism for a gradual normalization of monetary \npolicy by these central banks, as a sharp retreat of policy stimulus may plunge \nthe global economy into a financial crisis again. This may also increase the \nuncertainty around the full recovery of several Emerging Market and Developing \nEconomies. The MPC, therefore, called on the Bank to put in place measures to \n3 \n \n \nmoderate the likely impact of the normalization of monetary policy on the \ndomestic economy. \nDomestic Economic Developments \nIn the second quarter of 2021, there was a significant improvement in the real \nGross Domestic Product (GDP), which grew by 5.01 per cent compared with 0.51 \nand -6.10 per cent in the previous quarter and corresponding quarter of 2020, \nrespectively. This recovery was attributed to the non-oil sector, driven by a \nrebound in services sector and continued growth in agriculture sector. The oil \nsector contracted further by -12.65 per cent (year-on year) in the second quarter \nof 2021, compared with -2.21 per cent in the previous quarter. This deeper \ncontraction, was attributed to several factors: including declining crude oil \nproduction at two crude streams in the country, associated with leakages in two \nmajor pipelines; deteriorating oil production infrastructure; poor pipeline \nmaintenance; and the need to comply with OPEC+ production ceiling. \nThe Committee noted the moderate improvement in both the Manufacturing \nand Non-Manufacturing Purchasing Manager’s Indices (PMIs), though still below \nthe 50-index point benchmark, showed a marked improvement over time. In \nAugust 2021, the Manufacturing and non-Manufacturing PMIs improved to 46.9 \nindex points apiece, compared with 46.6 and 44.8 index points, respectively, in \nJuly 2021. This was attributed to an increase in new orders, driven largely by rising \ndemand, uptrend in business activity and further normalization of economic \nactivities. \nSimilarly, \nthe \nemployment \nlevel \nindex \ncomponent \nof \nthe \nManufacturing and non-Manufacturing PMIs in August 2021 improved to 49.4 \nand 48.8 index points, respectively, compared with 46.5 and 47.0 index points in \nJuly 2021. The Committee expressed optimism that with the current level of \nmonetary and fiscal stimuli, as well as efforts to increase vaccination and \ncontain the Pandemic, the economy will continue to improve in the short-to \nmedium term. \nThe Committee reviewed the performance of the Bank’s interventions to sustain \nthe recovery of output growth and address the downside risks to other external \n4 \n \n \nand domestic shocks to the economy. Interventions continued largely in \nManufacturing, Agriculture, Energy/infrastructure and Micro, Small, and Medium \nEnterprises (MSMEs). \nThe Bank under its Anchor Borrowers Programme (ABP) has cumulatively \nreleased the sum of N798.09 billion to 3.9 million smallholder farmers cultivating \n4.9 million hectares of land across the country. Out of this for the 2021 wet season \nfarming, the Bank released the sum of ₦161.18 billion to 770,000 small-holder \nfarmers cultivating seven (7) commodities on 1.10 million hectares across the \ncountry. While harvesting for the 2020 dry season under the Programme is \nrounding up, harvesting activities have commenced for the 2021 wet season \ncultivation. The Strategic Maize Reserve Programme of the CBN has been useful \nin moderating maize prices by directly targeting large feed mill producers. Under \nits Commercial Agriculture Credit Scheme (CACS), the CBN has supported 657 \nlarge-scale agricultural projects, to the tune of N708.39 billion. \nTo support MSMEs across the country, the Bank disbursed N134.57 billion to 38,140 \nbeneficiaries under the Agribusiness/Small and Medium Enterprise Investment \nScheme (AGSMEIS), and for the Targeted Credit Facility (TCF), the sum of N343.21 \nbillion has been released to 726,198 beneficiaries, comprising 602,730 \nhouseholds and 123,468 Small and Medium Enterprises. \nUnder the Real Sector Facility, the Bank released the sum of N1.00 trillion to 269 \nreal sector projects, of which 140 are in light manufacturing, 71 in agro-based \nindustry, 47 in services and 11 in mining. Under the Healthcare Sector Intervention \nFacility (HSIF), N103.02 billion has been disbursed for 110 healthcare projects, of \nwhich 27 are pharmaceutical, 77 hospitals and 6 other healthcare service \nprojects. The Bank has also disbursed a total of N145.99 billion under its Non-Oil \nExport Stimulation Facility (NESF). The CBN has revised the guidelines, working \nwith Nigerian Export-Import Bank to improve access to the intervention and \nstimulate non-oil export growth in Nigeria. \nUnder the National Mass Metering Programme (NMMP), N41.06 billion has been \ndisbursed to ten (10) DisCos, for the procurement and installation of 759,748 \n5 \n \n \nelectricity meters. Under the Nigerian Electricity Market Stabilization Facility - 2 \n(NEMSF-2), the Bank has released the sum of N145.66 billion to 11 DisCos as loans \nto provide liquidity support and stimulate critical infrastructure investment to \nimprove service delivery and collection efficiency. \nIn furtherance of its intervention in the energy sector, the Bank has disbursed \nN39.20 billion to six (6) beneficiaries to improve gas-based infrastructure to \nsupport the Federal Government’s Auto-Gas Conversion Programme. The Bank \nhas also encouraged Deposit Money Banks (DMBs) to participate in the Solar \nConnection Facility (SCF) to improve energy access in the rural areas. \nTo promote entrepreneurship development among Nigerian youth, the Bank \nrecently \napproved \nthe \nimplementation \nof \nthe \nTertiary \nInstitutions \nEntrepreneurship Scheme (TIES). The Scheme is designed to promote \nentrepreneurial activities and foster job creation among Nigerian youths. \nThe Committee applauded the continued moderation in headline inflation for \nthe fifth consecutive month to 17.01 per cent (year-on-year) in August 2021 from \n17.38 per cent in July 2021. The continued decrease was attributed to a marginal \ndecline in the food component to 20.30 per cent in August 2021 from 21.03 per \ncent in July 2021. The core component, also, declined to 13.41 per cent in August \n2021 from 13.72 per cent in July 2021. The MPC noted that headline inflation \nremained well above the Bank’s benchmark corridor of 6 – 9 per cent, but \nexpressed optimism that with sustained interventions by the Bank, food \nproduction will continue to improve, thus moderating headline inflation further. \nThe Committee, thus, urged the fiscal authority to build on earlier efforts to \narticulate a clear strategy to attract private sector investment while resuscitating \ncritical infrastructure to improve the ease of doing business in the country. \nMembers observed that broad money supply (M3) rose to 5.83 per cent in \nAugust 2021, compared with 2.91 per cent in July 2021. This was largely driven by \nthe growth of Net Foreign Assets and Net Domestic Assets by 12.35 and 4.30 per \ncent in August 2021, compared with 1.84 and 3.17 per cent in July 2021, \nrespectively. The growth in Net Foreign Assets was largely driven by increase in \nforeign asset holdings of commercial and merchant banks. The increase in Net \n6 \n \n \nDomestic Assets reflects the boost to aggregate credit net, which increased to \n8.14 per cent in August 2021, from 5.71 per cent in July 2021. \nIn the money market, the monthly weighted average Inter-Bank Call and Open \nBuyback (OBB) rates increased to 13.45 and 12.97 per cent in August 2021 from \n10.72 and 11.60 per cent in July 2021, respectively. This increase reflected the \ntight liquidity conditions in the banking system during the review period as the \nBank curtailed excess system liquidity. \nThe MPC noted the moderate improvement in the equities market in the review \nperiod, as the All-Share Index (ASI) increased by 2.67 per cent from 37,907.28 on \nJune 30, 2021, to 38,920.50 on September 14, 2021. Market Capitalization (MC) \nalso increased by 2.63 per cent from N19.76 trillion to N20.28 trillion over the same \nperiod, \nreflecting \nimprovement \nin \ninvestor \nconfidence \nfollowing \nthe \nstrengthening of output growth. \nThe MPC noted that the Capital Adequacy Ratio (CAR) and the Liquidity Ratio \n(LR) both remained above the prudential limits at 15.2 and 41.7 per cent, \nrespectively at end-July 2021. The Committee, also, welcomed the improvement \nin the Non-Performing Loans (NPLs) ratio at 5.4 per cent in July 2021, compared \nwith 5.7 per cent in June 2021. The Committee thus, urged the Bank to sustain \ncurrent efforts to bring NPLs below the 5.0 per cent prudential benchmark. \nThe Committee noted the improvement in lending to the real sector following \nthe introduction of the Loans-to-Deposit Ratio (LDR) in 2019. Industry gross credit \nincreased by N6.63 trillion from N15.57 trillion at end-May, 2019 to N22.20 trillion \nat end-July, 2021. The credit growth was largely recorded in manufacturing, oil \nand gas and agriculture sectors. \nThe Committee noted the significant increase in the external reserves which rose \nto US$35.97 billion at end-August 2021 from US$33.49 billion at end-July 2021, \nrepresenting an increase of 7.41per cent. It also welcomed the further increase \nto US$36.03 billion on September 13, 2021. \n7 \n \n \nOutlook \nThe outlook for both the global and domestic economies appears mixed. This is \ndue to lingering uncertainties over the end of the COVID-19 pandemic as well \nas continued mutation of the virus. The slow and uneven pace of vaccination in \ndeveloping economies is also compromising the achievement of global herd \nimmunity, thus imposing a considerable headwind to the attainment of the \nglobal growth forecast. \nSome central banks in advanced economies have given guidance of intended \ncommencement of monetary policy normalization as monetary and fiscal policy \nacross major advanced and emerging market economies have remained \nrobust. This would constitute a further headwind to the full and inclusive recovery \nof the global economy due to the likely rise in cost of capital. The global \neconomy is confronted with more headwinds than tailwinds, evidenced by the \nmultitude of conflicting signals emerging from various major economies. \nAvailable data and forecasts for key macroeconomic variables for the Nigerian \neconomy, suggest further rebound in output growth for the rest of the year. This \nwill however be hinged on the continued stability in oil price and robust \nvaccination in Nigeria and across other countries. Foreign exchange market \nstability, further reduction in inflationary pressure in the economy and continued \ninterventions by the monetary and fiscal authorities are very important factors to \nsustain the recovery momentum. Consequently, the Nigerian economy is \nforecast to grow in 2021 by 2.86 per cent (CBN), 3.0 per cent (FGN) and 2.5 per \ncent (IMF). \n \nThe Committee’s Considerations \nThe Committee noted the recovery in output growth and improving PMIs in the \nsecond quarter and urged the Bank to maintain the momentum of its current \npolicy measures to sustain positive and inclusive real GDP growth. \nThe increasing level of insecurity in parts of the country remained a crucial point \nof concern for the MPC as its persistence could adversely impact business \n8 \n \n \nconfidence and derail the recovery. It continued to call on the Federal \nGovernment to prioritize security surveillance in farming communities as the \nincreased supply of food would play a significant role in stabilizing \nmacroeconomic fundamentals. \nThe Committee applauded the steady but moderate decline in domestic prices \nas inflation decelerated for the fifth consecutive month with forecast indicating \na continued downward trend. The Committee also welcomed ongoing efforts \ntowards revitalising the Nigeria Commodity Exchange (NCX) to improve the \nsupply value chain, curtail the speculative activities of middlemen in the \nagricultural sector, and consequently drive down prices of key commodities \nsuch as paddy rice, maize, wheat and sorghum, amongst others. \nMembers applauded the relentless effort by the Bank and other collaborators in \nensuring the eventual take off of the Nigerian Infrastructure Corporation \n(INFRACORP), as this will improve the business environment, attract new \ninvestment and create new jobs in the Nigerian economy. The MPC further \nemphasised the importance of investment in transportation networks, power \nsupply and telecommunication as these have a multiplier effect on other sectors \nof the economy. In addition to the INFRACORP initiative, Members urged the \nfiscal authority not to relent on other complementary infrastructure initiatives \nsuch as Public-Private-Partnerships and engagement of Nigeria’s huge diaspora \nthrough the issuance of diaspora bonds to fund specific projects. \nThe MPC noted the moderate improvement in the equities market and \ncommended the sustained investor confidence in the Nigerian economy. The \nCommittee however called on the Federal Government to continue to improve \nthe ease of doing business in Nigeria to retain the current patronage of the \nNigerian economy by foreign investors. \nMembers applauded the continued resilience of the banking system, noting the \nprogressive decline in the non-performing loans ratio, and broad improvement \nin all banking system parameters, despite the downside risks posed by the \nPandemic to the smooth running of businesses. While the Committee was \n9 \n \n \ncognizant of the credit risks associated with lending in the current economic \nclimate, it urged Nigerian banks to extend more credit to businesses and \nconsumers to facilitate a seamless recovery of output growth, reduce \nunemployment and stabilize prices. \nOn the management of the exchange rate, the Committee applauded the \nBank for improving foreign exchange supply in the economy to meet legitimate \nbusiness and consumer demand. Members thus, urged the Bank to take further \nsteps to restrict the activities of unauthorised and illegal dealers in the foreign \nexchange market, stating that all foreign exchange transactions must be \nconducted at the I&E window to ensure transparency and stability. The \nCommittee, thus, called on the Bank to intensify surveillance over foreign \nexchange sales and utilisation by commercial banks and customers, to ensure \nthat operators adhere to stipulated guidelines set by the CBN. The Bank thus, \nmaintains its resolve to continue to restructure the foreign exchange market and \nwill pursue all recent policies targeted at sanitizing the market to improve \ntransparency and proper functioning to eliminate illegal foreign exchange \ndealers in the economy. \nOn Government revenues, members urged the Federal Government to improve \nits tax collection in order to reduce its dependence on oil revenues and reduce \nits exposure to counter-cyclical shocks. \nThe Committee emphasised the growing need to improve the agricultural value \nchain, particularly in key commodity products like cocoa, palm oil and cashew \nto diversify the country’s export receipts. It, therefore, called on the Bank to \nsupport manufacturing initiatives that could achieve this objective. \nThe Committee applauded the Bank for its resilience and robust efforts in \nmanaging the downside risks to growth and the upside risks to inflation since the \noutbreak of the Pandemic, while charting a stable path for the economy to \ncontinue to expand its potential capacity through investment in infrastructure. \nOverall, the MPC assessed the headwinds and tailwinds to growth, as well as, \nthe upside risks to inflation, noting the immense effort by both the monetary and \n10 \n \n \nfiscal authorities to achieve a substantial recovery in output growth and \ndecrease in inflation. The Committee urged the Presidential Task Force on \nCOVID-19 to intensify efforts toward procurement of more vaccines and the \nvaccination of more people to ensure that herd immunity is achieved. \nThe Committee’s Decision \nThe MPC expressed delight at the robust recovery of output growth during the \nsecond quarter and the continued decline in inflation. Members, however, re-\niterated the need to put in place further measures to drive down inflation and \nimprove real returns on investment. The MPC noted the unequivocal importance \nof credit growth to the sustained recovery of output and the moderation in price \ndevelopment as supply improves. It thus, called on the Bank to maintain \nadequate surveillance on banks to ensure compliance with its extant credit \npolicy, while ensuring that they are not unduly exposed to credit risks. \nThe Committee also noted the relevance of the Bank’s suite of interventions to \nthe overall system credit, urging its continued use to fund sectors with high \nemployment-generating capacity. \nMPC weighed the pros and cons of tightening, holding or loosening the stance \nof policy, noting the impact on output growth, price development, \nunemployment and exchange rate. \nMembers felt that tightening will contract the current level of system liquidity, \nand thus reduce demand pressure in the foreign exchange market, given that \nthe current MPR at 11.5 per cent, CRR at 27.5 per cent and liquidity ratio at 30.0 \nper cent is already a tightening stance. This will, however, raise the cost of credit \nand reduce the volume of credit to the private sector. \nOn loosening, the Committee felt that this would lower retail interest rates and \nimprove the ability of obligors to repay their obligations, with a complementary \nreduction in NPLs. The gradual downward movement of inflation may, however, \nbe compromised if policy accommodation is increased, leading to a further \n11 \n \n \nwidening of the negative real interest rate and thus exacerbating capital \noutflows as investment in naira denominated assets become less attractive. \nMembers considered that a hold stance would allow the current recovery of \noutput growth and decline in inflation to continue smoothly, thus gradually \nmoving the economy to a sustainable path before adjustments are made to the \nstance of policy. \nBased on the above considerations, the MPC made the decision to hold all \npolicy parameters constant; believing that a hold stance will enable the \ncontinued permeation of current policy measures in supporting the recorded \ngrowth recovery and macro-economic stability. \nThe Committee thus decided by a unanimous vote to retain the Monetary Policy \nRate (MPR) at 11.5 per cent. \nIn summary, the MPC voted to: \ni. \nRetain the MPR at 11.5 per cent; \nii. \nRetain the Asymmetric Corridor of +100/-700 basis points around the MPR; \niii. \nRetain the CRR at 27.5 per cent; \niv. \nRetain the Liquidity Ratio at 30 per cent. \nThank you. \nGodwin I. Emefiele \nGovernor, Central Bank of Nigeria \n17th September, 2021", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/MPC_Communiques/Communique No 138 of the Monetary Policy Committee.pdf"}
{"doc_id": "1af945ac174d0ce15c8fee9c370d27e7", "text": "CENTRAL BANK OF NIGERIA\nJUNE 2011\nJUNE 2011\nFINANCIAL \nSTABILITY\nREPORT\nFINANCIAL \nSTABILITY\nREPORT\n CBN FINANCIAL STABILITY REPORT JUNE 2011\niii\nThe Financial Stability Report (FSR) is published semi-annually by \nthe Central Bank of Nigeria (CBN). Copies of this edition may be \nobtained from the Director, Financial Policy and Regulation \nDepartment, Central Bank of Nigeria, Abuja, Nigeria or from the \nCBN website: www.cbn.gov.ng.\nISSN: 2141-9396\nFor comments and feedback, please email us at FSR@cbn.gov.ng\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nDeputy Governor\n(Operations)\nDeputy Governor\n(Corporate Service)\nDeputy Governor\n(Economic Policy)\nDeputy Governor\n(Fin. System Stability)\nThe Board\nDirectorates \nDepartments \nHuman \nResources\nProcurement & \nSupport Services\nFinance\nMedical\nServices\nSecurity \nServices\nLegal \nServices\nMonetary \nPolicy\nFinancial \nMarkets\nTrade & \nExchange\nResearch\nStatistics \nFinancial Policy \n& Regulation\nBanking \nSupervision\nOFI \nSupervision\nDevelopment \nFinance\nBanking & \nPayment System\nCurrency \nOperations\nBranch \nOperations\nInformation\nTechnology\nReserve \nManagement\nGovernor\nCorporate \nSecretariat\nStrategy & \nPerformance Mgt\nGovernors’ \nDepartment\nRisk \nManagement\nInternal \nAudit\nBoard of Directors\niv\nCBN's Organogram\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n \nT a b l e o f C o n t e n t s\nv\nLIST OF FIGURES\nviii\nLIST OF TABLES\nix\nLIST OF BOXES\nx\nAPPENDIX..\nx\nLIST OF ABBREVIATIONS AND ACRONYMS\nxi\nGOVERNOR'S STATEMENT\nxiii\nKEYNOTE REMARKS\nxv\n1.0 \nOVERVIEW\n1\n2.0 \nTHE STRUCTURE OF THE NIGERIAN FINANCIAL SYSTEM\n3\n2.1\nMajor Stakeholders\n5\n2.2\nOther Stakeholders in the Nigerian Financial System..\n5\n2.2.1\nThe Financial Services Regulation Coordinating\nCommittee (FSRCC) ..\n5\n2.2.2\nSelf-Regulatory Organisations (SROs)\n5\n2.2.3\nAdvisory Fora\n5\n3.0 \nMACROECONOMIC AND FINANCIAL DEVELOPMENTS..\n7\n3.1\nGlobal Macroeconomic and Financial Developments..\n7\n3.1.1\nGlobal Output\n8\n3.1.2\nGlobal Inflation\n8\n3.1.3\nGlobal Energy Prices..\n9\n3.1.4\nPolicy Interest Rates\n9\n3.1.5\nExchange Rates\n10\n3.1.6\nStock Markets\n11\n3.2\nDomestic Macroeconomic and Financial Developments\n13\n3.2.1\nThe Real Sector\n14\n3.2.2\nInflation..\n15\n3.2.3\nThe Fiscal Sector..\n15\n3.2.4\nThe Financial Sector\n16\n3.3\nThe External Sector\n23\n3.3.1\nExternal Reserves Management\n23\n3.3.2\nMovements in External Reserves\n24\n3.3.3\nForeign Exchange Flows\n24\n3.3.4 \nDemand for and Supply of Foreign Exchange\n24\n3.3.5\nExchange Rate Movements\n25\n3.4\nKey Risks in the Nigerian Financial System\n26\n3.4.1\nCredit Risk\n26\n3.4.2\nLiquidity Risk\n27\n3.4.3\nMarket Risk\n27\n3.4.4\nOperational Risk\n28\n3.4.5\nReputational Risk\n28\n3.5\nOutlook for the Second Half of 2011\n28\n4.0 \nDEVELOPMENTS IN THE FINANCIAL SECTOR\n31\n4.1\nPromoting Financial System Stability\n31\n4.2\nThe Revised Microfinance Policy, Regulatory and \nSupervisory Framework\n32\n4.3\nInstitutional Capacity Building\n33\n4.4\nInternational Economic Relations and Cooperation\n33\n4.4.1\nThe WAMZ Committee of Experts Deliberated on the \nReport of Financial Sector Assessment and Development\n33\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n \n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nvi\n4.4.2\nAfDB's Cooperation with Nigeria for the Development \nof SMEs\n33\n4.4.3\nCooperation with other African Central Banks\n34\n4.5\nAccess to Finance\n35\n4.5.1\nThe Agricultural Credit Guarantee Scheme \nFund (ACGSF)\n35\n4.5.2\nThe Agricultural Credit Support Scheme (ACSS) ..\n35\n4.5.3\nThe Commercial Agricultural Credit Scheme (CACS)\n35\n4.5.4\nThe Refinancing/Restructuring Small and Medium \nEnterprises Manufacturing Fund\n35\n4.5.5\nThe Small and Medium Enterprises Credit \nGuarantee Scheme (SMECGS)\n36\n4.5.6\nThe Power and Aviation Intervention Fund (PAIF)\n36\n4.5.7\nThe Nigerian Incentive-Based Risk Sharing System \nfor Agricultural Lending (NIRSAL)\n36\n4.5.8\nMicrofinance Banking Activities ..\n36\n4.5.9\nPrimary Mortgage Institutions' Activities\n36\n4.6\nNon-Interest Banking\n37\n4.7\nAnti-Money Laundering/Combating the Financing of \nTerrorism (AML/CFT)\n37\n5.0\nREGULATORY AND SUPERVISORY ACTIVITIES\n39\n5.1\nMacro-Prudential Supervision\n39\n5.1.1\nFinancial Soundness Indicators (FSIs)\n39\n5.1.2\nThe Banking Sector Stress Test\n43\n5.2\nLicensing and Approvals\n44\n5.2.1\nBureaux-de-Change\n44\n5.2.2\nMicrofinance Banks\n44\n5.2.3\nFinance Companies\n44\n5.2.4\nThe New Banking Model Compliance Plan\n44\n5.3\nSupervision of Banks and Other Financial Institutions\n44\n5.3.1\nDeposit Money Banks (DMBs)\n44\n5.3.2\nDiscount Houses\n45\n5.3.3\nOther Financial Institutions\n45\n5.4\nCross-border Supervision\n47\n5.4.1\nClosure of Foreign Subsidiaries\n47\n5.4.3\nThe College of Supervisors of the West African \nMonetary Zone (CSWAMZ)\n47\n5.4.4\nMemoranda of Understanding (MoUs)\n48\n5.5\nThe Financial Services Regulation Coordinating \nCommittee (FSRCC)\n48\n5.6\nSupervisory Challenges\n48\n5.6.1\nTowards Recovery from the Global Economic \nand Financial Crises\n48\n5.6.2\nWeak Corporate Governance\n49\n5.6.3\nInadequate Legal Framework\n49\n5.6.4\nData Integrity\n49\n5.6.5\nInadequate Supervisory Capacity\n49\n5.6.6\nGrowing Complexity in the Operations of \nFinancial Institutions\n50\n5.6.7\nThe Activities of Illegal Finance Operators in the Economy\n50\n5.7\nConsumer Protection\n50\n5.8\nThe Focus of Supervision\n51\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nvii\n6.0 \nTHE NIGERIAN PAYMENTS SYSTEM\n53\n6.1\nThe Payments System Vision 2020 (PSV 2020)\n53\n6.2\nDevelopments in the Payments System\n53\n6.2.1\nThe Real-Time Gross Settlement (RTGS) System\n54\n6.2.2\nCheque Clearing\n55\n6.2.3\nElectronic Card Payments\n55\n6.2.4\nAutomated Teller Machine (ATM) Transactions\n57\n6.2.5\nMobile Banking ..\n57\n6.3\nPayments System Challenges\n57\n7.0\nPRESERVING THE INTEGRITY OF THE FINANCIAL SYSTEM\n59\n7.1\nThe Asset Management Corporation of Nigeria (AMCON)\n59\n7.2\nThe Implementation of International Financial Reporting\nStandards (IFRS)\n59\n7.3\nUpdate on Credit Information Bureaux\n59\n7.3.1\nCBN's Credit Risk Management System (CRMS)\n59\n7.3.2\nPrivate Credit Bureaux (PCBs)\n60\n7.4\nThe Financial System Strategy 2020 (FSS 2020)\n61\n8.0 \nCONCLUSION\n63\nGLOSSARY\n65\nAppendix 1: Result of the Banking Sector Stress Test at end-June 2011\n69\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n \n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n \n \nviii\nL i s t o f F i g u r e s\nFigure 1: Structure of the Nigerian Financial System at end-June 2011\n4\nFigure 2: Percentage Growth Rate of Non-Oil GDP\n14\nFigure 3: Contribution of Oil and Non-oil GDP to Total Output\n14\nFigure 4: Inflationary Trend (Year-on-Year)\n15\nFigure 5: Federal Government's Fiscal Operations\n15\nFigure 6: Trends in Major Monetary Aggregates..\n16\nFigure 7: Trends in Net Domestic Credit\n16\nFigure 8: Distribution of Deposit Money Banks (DMBs) Loans and \n Advances by Maturity\n17\nFigure 9: Distribution of MB's Deposit Structure..\n17\nFigure 10: Market Concentration Ratios of DMBs (Assets)\n18\nFigure 11: Money Market Rates Between First Half of 2008 and First Half of 2011\n19\nFigure 12: Lending and Deposit Rates Between First Half of 2008 and \n First Half of 2011\n19\nFigure 13: FGN Bond Auctions\n21\nFigure 14: OTC Trades in FGN Bonds\n23\nFigure 15: WDAS-SPT Demand and Supply in US$ Million\n25\nFigure 16: WDAS, Inter-Bank and BDC Rates for July 2010 - June 2011\n26\nFigure 17: Selected Credit Ratios, Dec. 2010 June 2011\n27\nFigure 18: Banking Sector Capital Adequacy Ratios, 2010 - 2011\n41\nFigure 19: Banking Industry NPLs to Total Loans, 2010 - 2011\n41\nFigure 20: Selected Profitability Ratios of the Nigerian Banking Industry, \n 2010 - 2011\n42\nFigure 21: Banking Industry Liquidity Ratios\n43\nFigure 22: CBN's RTGS Transactions, July 2010 - June 2011\n55\nFigure 23: Volume and Value of Cheques Cleared, July 2010 - June 2011\n55\nFigure 24: Electronic Card Transactions, July 2010 - July 2011\n56\nFigure 25: Volume of Electronic Card Transactions, January - June 2011\n56\nFigure 26: Value of Electronic Card Transactions, January - June 2011\n57\nFigure 27: Selected CRMS Statistics, 2010 2011\n60\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n...\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n \nix\n \nL i s t o f T a b l e s\nTable 1: Global Output, Prices and Projections for 2011 and 2012\n9\nTable 2: Monetary Policy Rates for Selected Countries, Jan 2010 - June 2011\n10\nTable 3: End-Period Exchange Rates of Selected Countries \n(Values in currency units to US$)\n11\nTable 4: Global Stock Indices\n13\nTable 5: Transactions on the Nigerian Stock Exchange\n20\nTable 6: NSE Sectoral Performance in the First Half of 2011\n20\nTable 7: FGN Bond Auctions, January - June 2011\n21\nTable 8: Corporate Bonds Issued, January - June 2011\n22\nTable 9: Outstanding Corporate Bonds\n22\nTable 10: Selected Financial Soundness Indicators in the Nigerian Banking Sector\n40\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n..\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n \n \nL i s t o f B o x e s\nBox 1: Summary of Stress Test Result\n43\n..\n..\n..\n..\n..\n..\n \nA p p e n d i x\nAppendix 1: Result of the Banking Sector Stress Test at end-June 2011\n69\n..\n..\nx\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n \nList of Abbreviations and Acronyms\nxi\nAACBs\nAADFIs\nACGSF\nACSS\nAFC\nAGRA \nAIPs\nAMCON\nAML/CFT\nASCE\nASI\nATMs\nAU\nBCEAO\nBDCs\nBOA\nBOFIA\nBOI\nBSE Sensex\nCAC 40\nCACS\nCAR\nCBN\nCIBN\nCIFTS\nCR6\nCRMS\nCSWAMZ\nD-8 \nDAX\nDFIs\nDMBs\nDMO\nEGX CASE 30 \nEBAs\nEMV\nFATF\nFCs\nFCT\nFGN\nFMBN\nFMF\nFSIs\nFSRCC\nFTSE 100\nGDP\nGSE \nHHI\n-\nAssociation of African Central Banks \n-\nAssociation of African Development Finance Institutions\n-\nAgricultural Credit Guarantee Scheme Fund \n-\nAgricultural Credit Support Scheme \n-\nAfrican Finance Corporation \n-\nAlliance for a Green Revolution in Africa \n-\nApproval in Principles\n-\nAsset Management Corporation of Nigeria \n-\nAnti-Money Laundering and Combating the Financing of Terrorism \n-\nAbuja Securities and Commodity Exchange\n-\nAll Share Index (Nigerian Stock Exchange Index)\n-\nAutomated Teller Machines\n-\nThe African Union\n-\nBanque Centrale des Etats de l'Afrique de l'Ouest \n(Central Bank of West African States)\n-\nBureaux de Change\n-\nBank of Agriculture\n-\nBanks and Other Financial Institutions Act 1991 (as amended)\n-\nBank of Industry \n-\nBombay Stock Exchange (Indian Stock Index)\n-\nCotation Assisteé en Continu (French Stock Index)\n-\nCommercial Agricultural Credit Scheme \n-\nCapital Adequacy Ratio\n-\nCentral Bank of Nigeria\n-\nChartered Institute of Bankers of Nigeria\n-\nCBN Interbank Fund Transfer System\n-\nConcentration Ratio (of the six largest banks)\n-\nCredit Risk Management System\n-\nCollege of Supervisors of the West African Monetary Zone\n-\nGroup of Eight Developing Countries \n-\nDeutscherAktien Index (German Stock Index)\n-\nDevelopment Finance Institutions \n-\nDeposit Money Banks\n-\nDebt Management Office\n-\nEgyptian Stock Index (Cairo and Alexandria Stock Exchange)\n-\nEligible Bank Assets\n-\nEuro MasterCard Visa\n-\nFinancial Action Task Force\n-\nFinance Companies\n-\nFederal Capital Territory \n-\nFederal Government of Nigeria \n-\nFederal Mortgage Bank of Nigeria\n-\nFederal Ministry of Finance \n-\nFinancial Soundness Indicators\n-\nFinancial Services Regulation Coordinating Committee\n-\nFinancial Times Stock Exchange Index (UK Stock Index)\n-\nGross Domestic Product\n-\nGhanaian Stock Exchange Index\n-\nHerfindahl-Hirschman Index\nIFC\n-\nIslamic Finance Council \n CBN FINANCIAL STABILITY REPORT JUNE 2011\nIFRS\nIFSB\nIGBC \nIILMC\nIMF\nJSE\nKYC\nL/C\nM1\nM2\nMCP\nMDAs\nMENA\nMFBs\nMFIs\nMICEX\nML/FT\nMoUs\nMPR\nNACRDB\nNAICOM\nNASB\nNDIC\nNEXIM\nNFIU\nNGAAP+\nNikkei 225\nNIBSS\nNIRSAL\nNPLs\nNSE\nNSE 20\nOBB\nOFIs\nPAIF\nPCBs\nPENCOM\nPFAs\nPFCs\nPMIs\nPOS\nPSV 2020\nROSCAs\nRTGS\nS&P \nSEC\nSMEs\nSMECGS\nSROs\nTSX \nWAMZ\nWDAS\nWEO\n-\nInternational Financial Reporting Standards \n-\nIslamic Financial Services Board \n-\nIndice de la Bolsa de Valores de Columbia (Columbian Stock Index)\n-\nInternational Islamic Liquidity Management Corporation\n-\nInternational Monetary Fund\n-\nJohannesburg Stock Exchange (South African Stock Index)\n-\nKnow Your Customer\n-\nLetter of Credit \n-\nNarrow Money Supply\n-\nBroad Money Supply\n-\nMicrofinance Certification Programme\n-\nMinistries, Departments and Agencies\n-\nMiddle East and North African countries\n-\nMicrofinance Banks \n-\nMicrofinance Institutions\n-\nMoscow Inter-Bank Currency Exchange (Russian Stock Index)\n-\nMoney Laundering and Financing of Terrorism \n-\nMemoranda of Understanding \n-\nMonetary Policy Rate\n-\nNigerian Agricultural Co-operative and Rural Development Bank\n-\nNational Insurance Commission\n- Nigerian Accounting Standards Board\n-\nNigeria Deposit Insurance Corporation\n-\nNigerian Export-Import Bank \n-\nNigeria Financial Intelligence Unit\n-\nNigerian Generally Accepted Accounting Principle\n-\nJapanese Stock Index\n-\nNigerian Interbank Settlement System\n-\nNigerian Incentive-based Risk Sharing System for \nAgricultural Lending \n-\nNon-Performing Loans \n-\nNigerian Stock Exchange\n-\nNairobi Stock Exchange (Kenyan Stock Index)\n-\nOpen Buy Back \n-\nOther Financial Institutions\n-\nPower and Aviation Infrastructure Fund \n-\nPrivate Credit Bureaux\n-\nNational Pension Commission of Nigeria\n-\nPension Fund Administrators \n-\nPension Fund Custodians \n-\nPrimary Mortgage Institutions \n-\nPoint of Sale\n-\nPayments System Vision 2020 \n-\nRotating Savings and Credit Associations \n-\nReal-Time Gross Settlement System\n-\nStandard and Poor's \n-\nSecurities and Exchange Commission\n-\nSmall and Medium Enterprises \n-\nSmall and Medium Enterprises Credit Guarantee Scheme \n-\nSelf- Regulatory Organisations\n-\nToronto Stock Exchange\n-\nWest African Monetary Zone \n-\nWholesale Dutch Auction System \n-\nWorld Economic Outlook\nxii\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nxiii\nGovernor’s Statement\nThe Financial Stability Report (FSR) is a bi-annual publication of the Bank that focuses \non developments in the financial system and highlights measures taken to address \nvulnerabilities. The Bank commenced this publication in June 2010 and this edition is \nthe third in the series. We are encouraged by stakeholder comments on previous editions \nas well as the growing interest in the publication.\nThe global economy is going through a number of challenges in the aftermath of the \nrecent global economic and financial crises. The major concern has been the rising debt \nprofile, especially in the Euro zone, particularly Greece, Ireland, and Portugal; as well as \nuncertainties in Italy and Spain. The earthquake and tsunami in Japan triggered certain \nevents, some of which were of global concern, such as the use of nuclear energy for \npower generation. The crises in the Middle East and North African (MENA) countries \naffected oil supplies and positively impacted Nigeria's/African oil exports.\nOn the domestic front, the country continued to experience numerous challenges, such \nas poor infrastructure, inflationary pressures and unemployment. Also, the over-\ndependence on oil as the major foreign exchange earner and the import-dependent \nnature of the economy exerted significant pressure on foreign reserves. The financial \nsystem also witnessed a number of challenges, arising mainly from weak corporate \ngovernance, undercapitalisation of some banks and low credit growth to the real sector. \nThe global financial crisis also compounded some of these challenges. \nNotwithstanding the above, the smooth conduct of the April 2011 elections instilled \nconfidence in the system, with potential for an improved business environment and \nincreased Foreign Direct Investment (FDI). Also, the newly enacted National Sovereign \nInvestment Authority (NSIA) Act, 2011, is expected to lead to a more efficient \nmanagement of the nation's excess earnings from crude oil. \nDuring the review period, the Bank continued monetary tightening, the implementation \nof risk-based and consolidated supervision, and the new banking model as well as and \nthe International Financial Reporting Standards (IFRS). The Bank also re-introduced \ncross-border and on-site supervision of subsidiaries of Nigerian banks. \n CBN FINANCIAL STABILITY REPORT JUNE 2011\nxiv\n Thus, like the previous editions, this edition of FSR, provides readers with information \non developments in the Nigerian financial system and the measures taken by the Bank \nwith a view to enhancing market discipline, transparency and accountability. I, \ntherefore, commend this Report to all stakeholders in the Nigerian financial system and \nthe general public.\nSanusi Lamido Sanusi (CON)\nGovernor, Central Bank of Nigeria \n CBN FINANCIAL STABILITY REPORT JUNE 2011\nKeynote Remarks\nThe global economic and financial crises, which slowed growth in the global economy in \nthe past few years, also affected the stability of the financial markets. The global \nfinancial system has continued to witness slow recovery from the impact of the crises. \nThe uncoordinated unwinding of the stimulus packages has further slowed the recovery. \nHowever, as the world economy gradually recovers from the effects of the crises, there is \nneed for more proactive and effective supervisory and regulatory measures to strengthen \nthe recovery and safeguard the soundness and stability of the financial system. \nIn this regard, the CBN continued to pursue initiatives and policies aimed at \nstrengthening the financial system. In addition, it continued to provide incentives to \nother sectors of the economy such as agriculture, aviation and power. It is believed that \nthe outcome of these initiatives will result in a more stable financial system and higher \nstandards of living. As the Nigerian banking system recovers from the global economic \nand financial crises, the Bank's focus remains the recapitalisation of the eight rescued \nbanks, ring-fencing all deposit money banks (DMBs) from risky non-banking business, \nand promoting a safe and sound financial system.\nThis edition of Financial Stability Report highlights the Bank's assessment of key risks \nin the financial system and vulnerabilities to financial stability emanating from \ndevelopments in the domestic and international environment, as well as measures taken \nby the Bank to ensure the efficiency and soundness of the financial system. Hence, this \nReport is designed to provide a medium for informed discussion and understanding into \nthe management of the risks inherent in the financial system and the economy at large.\nDr. Kingsley Chiedu Moghalu\nDeputy Governor, Financial System Stability\nxv\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nOVERVIEW\n1.0\nThis edition of CBN's Financial Stability Report (FSR), which covers the period of \nJanuary to June 2011, reviews developments in the global and domestic economic scene \nand their impact on the Nigerian financial system. It discusses the various interventions \nby the Central Bank of Nigeria (CBN) in response to identified and potential challenges.\nSection 2 presents the structure of the Nigerian financial system. The section identifies \nthe major stakeholders and highlights the reporting relationships in the system. Section 3 \ncontains reviews of the global and domestic macroeconomic and financial \ndevelopments. This section notes that the debt crisis in the Euro Zone, the escalating \ncrisis in the MENA countries, and rising commodity prices affected the rate of global \neconomic recovery across regions. While growth was largely subdued in the industrial \ncountries, the emerging and developing economies recorded a high growth performance. \nThe depreciation of the US dollar led to currency appreciation in most countries, while \nthe performance of global stock markets remained largely mixed, with the Nigerian \nStock Market recording a marginal rise in the All-Share Index. The domestic economy \ngrew by 7.93 per cent, driven by the non-oil sector. Tight monetary policy moderated \nexpansion in money supply and aggregate credit and constrained inflationary pressures, \nespecially in the second quarter. Domestic interest rates, generally, trended upwards \nwhile the Naira exchange rate was under severe pressure from heightened demand for \nforeign exchange. \nSection 4 of the report discusses the actions taken by the DMBs in compliance with the \nrequirements of the new banking model with respect to a new operating structure and \nminimum capitalization levels. Furthermore, developments encompassing the adoption \nof new policy frameworks for MFBs and non-interest (Islamic) banking, and the \nimplementation of the IFRS, are also analysed. The Bank's engagement with \ninternational financial and regional institutions is also discussed here. \nSection 5 presents highlights of the regulatory and supervisory activities in the Nigerian \nfinancial system. The Nigerian banking sector was relatively sound during the review \nperiod, as most of the financial soundness indicators revealed an improvement over the \nlevels at end-December 2010, with the exception of earnings and profitability which \ndropped sharply. The improved capital adequacy level, which stood at 9.9 per cent, was \n1\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n1.9 percentage points higher than the Basel II minimum requirement. The ratio of non-\nperforming loans to total risk assets also improved significantly.\nIn order to identify and measure the vulnerabilities and resilience of the banking sector to \nshocks, a stress test was conducted during the period. The result revealed that credit risk \nwas the most significant, followed by exchange rate risk. The Bank also conducted an \nexamination/special examination of 5 discount houses, 119 microfinance banks and 101 \nPMIs to determine their financial health and capital adequacy. The outcomes of these \nexercises are also analysed in this section.\nSection 6 contains discussion on the developments in the implementation of the \nPayments System Vision 2020 (PSV 2020) initiative whose overarching objective is to \nensure a payments system that is nationally utilized and internationally recognized. \nEmphasis was on encouraging the usage of electronic payments channels as against \ncash-based transactions, in order to enhance efficiency, reliability and availability, as \nwell as facilitate transactions at minimal cost and risk.\nSection 7 presents highlights of some on-going initiatives aimed at safeguarding \nstability of the financial system. These include AMCON, IFRS, CRMS, PCBs and FSS \n2020. \nSection 8 concludes the Report and reiterates the point that promotion of a sound and \nstable financial system remained a core mandate of the CBN, given the critical role of \nfinancial stability in the achievement of government's macroeconomic objectives. This \nsection recapitulates the various measures taken by the Bank during the review period \npursuant to that mandate, the challenges faced, and the focus of macro-prudential \nactivities in the second half of 2011. \n2\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nSTRUCTURE OF THE NIGERIAN FINANCIAL \nSYSTEM\n2.0\n2.1\nMajor Stakeholders\nThere were no significant changes in the structure of the Nigerian financial system \nduring the reporting period. At end-June 2011, the regulatory/supervisory institutions in \nthe financial system were the Central Bank of Nigeria, the Nigeria Deposit Insurance \nCorporation, the Securities and Exchange Commission, the National Insurance \nCommission and the National Pension Commission. The operators were 24 deposit \nmoney banks (DMBs), five (5) discount houses (DHs), 866 Microfinance Banks \n(MFBs), 108 finance companies (FCs), 101 primary mortgage institutions (PMIs), 31 \npension fund administrators (PFAs) - including seven (7) closed PFAs, - five (5) pension \nfund custodians (PFCs), one (1) Stock Exchange, one (1) Securities and Commodities \nExchange, 1,997 bureaux de change (BDCs), 690 securities brokerage firms, five (5) \ndevelopment finance institutions (DFIs), 1 public credit bureau, 3 private credit bureaux, \n49 registered insurance companies and the Asset Management Corporation of Nigeria \n(Figure 1).\nIn addition to these formal institutions, a number of informal institutions continued to \nplay a vital role in the financial system. These include NGO-MFIs, community-based \norganisations, such as financial cooperatives, rotating savings and credit associations \n(ROSCAS), and self-help groups. \nThe Presidency and the National Assembly exercise statutory oversight over the Federal \nMinistry of Finance (FMF) and the CBN, while the FMF supervises the NDIC, SEC and \nNAICOM.\n3\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nFigure 1: Structure of the Nigerian Financial System at end-June 2011\n \n \n \nPresidency/National Assembly\n \nFederal Ministry of \nFinance\n \nCentral Bank of Nigeria\n \nNAICOM\nNDIC\n \nSEC\n \nDMO\nAMCON\n \nASCE\n \nNSE\n \nFederal MortgageBank of Nigeria\nUrban Development Bank\nNigeria Export-Import Bank\nBank of Agriculture\nBankof Industry\nPension Fund Custodians\nInsurance Brokers & Adjusters\nReinsurance Companies\nInsurance Companies\nRegistrars\nSecurities Brokerage Firms\nIssuing Houses\nMicrofinance Banks\nDeposit Money Banks\nDiscount Houses\nFinance Companies\nPrimary Mortgage Institutions\nBureaux–de-Change\nPension Fund Administrators\n \nPENCOM\n \n4\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n2.2\nOther Stakeholders in the Nigerian Financial System\n2.2.1\nThe Financial Services Regulation Coordinating Committee (FSRCC)\n2.2.2\nSelf-Regulatory Organisations (SROs)\n2.2.3\nAdvisory Fora\nThe FSRCC coordinates and harmonises regulatory activities in the Nigerian financial \nsystem. The Committee is chaired by the CBN with the FMF, the NDIC, SEC, \nNAICOM, and CAC as members, while PENCOM, the NSE, Abuja Securities and \nCommodities Exchange and the Federal Inland Revenue Service (FIRS) are observer-\nmembers.\nThe SROs provide training and advocacy and enforce codes of ethics and standards for \nmembers. They include: the Association of Corporate Trustees, the Association of \nBureaux-de-Change Operators of Nigeria, the Association of Stock-broking Houses of \nNigeria, the Association of Issuing Houses of Nigeria, the Bankers Committee, the \nCapital Market Solicitors Association, the Financial Markets Dealers Association, the \nFinance Houses Association of Nigeria, the Equipment Leasing Association of Nigeria, \nthe Mortgage Banking Association of Nigeria, and the National Association of \nMicrofinance Banks. \nOther self-regulatory professional bodies also operate in the financial system. These \ninclude the Association of National Accountants of Nigeria (ANAN), the Chartered \nInstitute of Bankers of Nigeria (CIBN), the Chartered Institute of Stockbrokers (CIS), \nand the Institute of Chartered Accountants of Nigeria (ICAN).\nDifferent fora exist where regulators in the financial system formally meet with \noperators in the various segments of the financial system. These include the Bankers \nCommittee, the Committee of Microfinance Banks of Nigeria, the Committee of \nMortgage Institutions of Nigeria, the Clearing House Committee, the Institute of Capital \nMarket Registrars, and the National Payments System Committee.\n5\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n3.0\nMACROECONOMIC AND FINANCIAL \nDEVELOPMENTS \n3.1\nGlobal Macroeconomic and Financial Developments\n3.1.1\nGlobal Output\nThe pace of global economic recovery in the first half of 2011 slowed as downside risks \ngrew amidst weaknesses in the US economy, heightened concerns over the sovereign \ndebt crisis in the Euro zone and the devastating effect of the tsunami in Japanese. These \ndevelopments increased the risks associated with economic recovery and kept the global \nfinancial system fragile. The IMF World Economic Outlook (WEO) Update, June 2011, \nindicated that the advanced economies recorded weak growth owing to low aggregate \ndemand, while the emerging and developing economies had strong growth arising from \nhigh commodity prices and strong domestic demand. Consequently, global output grew \nat an annualized rate of 4.3 per cent in the first quarter of 2011, and was projected to \nremain at that level in June 2011.\nGrowth in global output decelerated in the first half of 2011 to 4.3 per cent, from 4.7 per \ncent in the second half of 2010. In the advanced economies, output grew by 2.2 per cent, \ncompared with the projection of 2.7 per cent. The subdued growth was attributed to \nsupply disruptions owing to the earthquake in Japan and increases in global oil prices, \nwhich reduced household real incomes and private consumption. This trend was \nprojected to be reversed and growth to improve to 2.5 per cent in the second half of 2011. \nIn the US, real GDP grew at an average of 2.3 per cent in the first half of 2011. This was \nprojected to improve to 2.5 per cent in the second half of 2011 due to expected strong \ngrowth in household domestic demand and a declining unemployment rate as a result of \nthe positive impact of the fiscal stimulus packages implemented in 2010. \nIn the emerging and developing economies, output growth averaged 6.5 per cent in the \nfirst half of 2011 and was projected to improve to 6.6 per cent in the second half of 2011, \nlargely due to increased demand for primary commodities by the emerging economies in \nAsia. In Developing Asia and Latin America, and the Caribbean, growth decelerated \nfrom 9.6 and 6.1per cent in the second half of 2010 to 8.4 and 4.6 per cent, respectively, \nin the first half of 2011 (Table 1). \n1IMF, World Economic Outlook, January 25, 2011\n7\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nOutput growth in the Middle East and North African (MENA) countries dwindled \nduring the first quarter of 2011 as economic activities were hampered by political and \nsocial unrest. However, estimates for the second quarter of 2011 indicated \nimprovements, as some of the oil and mineral producing states in the region were \nexpected to resume full operations. Consequently, growth in the MENA countries in the \nfirst half of 2011 was projected to average 4.0 per cent, compared with 5.5 per cent in \nSub-Saharan Africa where growth continued to strengthen, with robust domestic \ndemand and exporters benefiting from rising commodity prices.\nGlobal inflation accelerated in the first half of 2011 arising from the more-than-expected \nincreases in commodity prices. According to the WEO June 2011Update, inflation in \nadvanced economies averaged 2.6 per cent in the first half of 2011, indicating an upward \nchange from the 1.5 per cent in the second half of 2010. Similarly, US inflation rose to a \nmonthly average of 2.4 per cent in the first half of 2011, from 1.0 per cent during the \nsecond half of 2010. \nInflation in the emerging and developing economies declined to an estimated 6.0 per cent \nin June 2011, from the 6.3 per cent recorded in the second half of 2010. On the other \nhand, inflationary pressure in Sub-Saharan Africa persisted during the first half of 2011 \nowing to strong domestic demand and exchange rate misalignment. Overall, inflation is \nlikely to remain high for the rest of 2011.\nWorld crude oil prices averaged US$116.90 per barrel in the first half of 2011, \nrepresenting an increase of 46.50 per cent over the average price of US$79.80 per barrel \nrecorded in the second half of 2010. Oil prices were estimated to remain above US$100 \nper barrel for the rest of 2011 in anticipation of a rebound in Japan's output and a sluggish \nsupply response. The lingering political crisis in the MENA countries is also expected to \nsustain prices at that level.\n3.1.2\nGlobal Inflation\n3.1.3\nGlobal Energy Prices\n8\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n   \n2009 2010 2011\n2012\n2011\n2012\n2010 2011 2012\nWorld output\n1 \n-0.6 5.1\n4.3\n4.5\n-0.1\n0.0\n4.7\n4.3\n4.4\nAdvanced economies -3.4 3.0\n2.2\n2.6\n-0.2\n0.0\n2.7\n2.3 2.6\n  United States \n-2.6\n2.9\n2.5\n2.7\n-0.3\n-0.2\n2.8\n2.6\n2.5\n  Euro area \n-4.1\n1.8\n2.0\n1.7\n0.4\n-0.1\n1.2\n1.8\n2.0\n    Germany \n-4.7\n3.5\n3.2\n2.0\n0.7\n-0.4\n3.8\n2.6\n2.4\n    France \n-2.6\n1.4\n2.1\n1.9\n0.5\n0.1\n1.4\n2.0\n2.1\n    Italy \n-6.2\n1.3\n1.0\n1.3\n-0.1\n0.0\n1.5\n1.3\n1.2\nJapan \n-6.3\n4.0\n-0.7\n2.9\n-2.1\n0.8\n2.4\n0.8\n2.2\nUnited Kingdom \n-4.9\n1.3\n1.5\n2.3\n-0.2\n0.0\n1.5\n2.0\n2.4\n2.8\n7.4\n6.6\n6.4\n0.1\n-0.1\n7.5\n6.9 6.6\nDeveloping Asia\n7.2\n9.6\n8.4\n8.4\n0.0\n0.0\n9.2\n8.4\n8.6\n    China \n9.2\n10.3\n9.6\n9.5\n0.0\n0.0\n9.8\n9.4\n9.5\n    India \n6.8\n10.4\n8.2\n9.5\n0.0\n0.0\n9.7\n7.7\n8.0\nLatin America and Carribean -1.7\n6.1\n4.5\n9.5\n-0.1\n-0.1\n5.4\n4.3\n4.0\n    Brazil \n-0.8\n7.5\n4.1\n9.5\n-0.4\n-0.5\n5.0\n4.3\n3.7\n    Mexico \n-6.1\n5.5\n4.7\n9.5\n0.1\n0.0\n4.4\n4.4\n1.7\nMiddle East and North Africa 2.5\n4.4\n4.2\n9.5\n0.1\n0.2\nNA\nNA\nNA\n    Sub-Sahara Africa\n2.8\n5.1\n5.5\n9.5\n0.0\n0.0\nNA\nNA\nNA\nConsumer prices \nAdvanced economies \n0.1\n1.6\n2.6\n1.7\n0.4\n0.0\n1.6\n2.6\n1.6\nEmerging and Developing \n3 \nEconomies\n5.2\n6.1\n6.9\n5.6\n0.0\n0.3\n6.2\n5.8\n5.0\n3The quarterly estimates and projections account for approximately 76 percent of the emerging and developing economies. \n  \nSource: World Economic Outlook Update June 2011\nNote: Country weights used to construct aggregate growth rates for groups of countries were revised. \n1The quarterly estimates and projections account for 90 percent of the world purchasing-power-parity weights. \n2The quarterly estimates and projections account for approximately 77 percent of the emerging and developing economies. \nTable 1: Global Output, Prices Projections for 2011 and 2012\n3.1.4\nPolicy Interest Rates\nIn most advanced and emerging economies, policy interest rates remained largely \nunchanged. In the US, the Federal Funds rate was left at 0.25 per cent, while Japan \nmaintained its zero interest rate policy. In China, the monetary authorities favoured \nmonetary tightening in the first quarter of 2011. In April 2011, the rate was further \ntightened to 6.31 per cent, from 6.06 per cent in March, and remained unchanged \nthroughout the second quarter (Table 2). In the UK and South Africa, the Bank of \n9\nEmerging and Developing \n2 \nEconomies\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nEngland and the Reserve Bank of South Africa retained their rates at 0.5 and 5.5 per cent, \nrespectively, during the first half of 2011. \nAlthough the Euro Zone was faced with a debt crisis, the primary concern of the \nEuropean Central Bank (ECB) remained the maintenance of price stability. \nConsequently, the ECB policy rate remained unchanged at 1.0 per cent during the first \nquarter of 2011, but was raised to 1.25 per cent in the second quarter. \nOn the other hand, Nigeria, Brazil, Chile, Kenya, and India adopted a tight monetary \npolicy stance during the period under review (Table 2).\n \nSource: From their Respective Central Bank Websites\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.1\n \n0.1\n \n0.1\n \n0.5\n \n0.5\n \n0.5\n \n3.1.5\nExchange Rates\nThe U.S. Dollar depreciated against most major currencies in the period under review. \nIn North America, the Canadian Dollar and Mexican Peso appreciated against the U.S. \nDollar by 0.59 and 1.51 per cent, respectively. Similarly, in South America, the Brazilian \nReal and Colombian Peso appreciated against the U.S. Dollar by 4.27 and 6.22 per cent, \nrespectively, while the Argentine Peso depreciated against the U.S. Dollar by 1.42 per \ncent (Table 3).\nIn Europe, the British Pound depreciated against the U.S Dollar by 0.48 per cent, while \nthe Euro and Russian Ruble appreciated against the U.S. Dollar by 2.96 and 2.01 per \nTable 2: Monetary Policy Rates for Selected Countries, Jan 2010 - June 2011\n10\n CBN FINANCIAL STABILITY REPORT JUNE 2011\ncent, respectively. In Asia, the Japanese Yen and Chinese Renminbi appreciated against \nthe U.S. Dollar by 3.26 and 1.33 per cent, respectively, while the Indian Rupee \ndepreciated against the U.S Dollar by 0.51 per cent.\nIn Africa, the Nigerian Naira and the Kenyan Shilling depreciated against the U.S. \nDollar by 0.17 and 6.97 per cent, respectively, while the South African Rand, Egyptian \nPound and Ghanaian Cedi appreciated against the U.S. Dollar by 0.01, 0.04 and 0.08 per \ncent, respectively. \nCurrency\n2010:Q1\n2010:Q2\n2010:Q3\n2010:Q4\n2011:Q1\n2011:Q2\n2011Q1 and \nQ2 % Change\nYTD % Change\nAFRICA \nNigeria \nNaira\n149.783\n149.985\n151.35\n150.66\n153.04\n153.31\n-0.17\nSouth Africa \nRand\n7.285\n7.671\n6.96\n6.63\n6.77\n6.77\n0.01\nKenya \nShilling\n77.31\n81.63\n80.75\n80.70\n83.10\n89.33\n-6.97\nEgypt \nPound\n5.5045\n5.6955\n5.75\n5.80\n5.97\n5.97\n0.04\nGhana\nCedi\n1.4208\n1.4425\n1.42\n1.49\n1.52\n1.52\n0.08\nNORTH \nAMERICA \nCanada \nDollar\n1.0153\n1.0639\n1.03\n1.00\n0.97\n0.96\n0.59\nMexico \nPeso\n12.365\n12.9409\n12.59\n12.34\n11.89\n11.71\n1.51\nSOUTH \nAMERICA \nBrazil \nReal\n1.7813\n1.8047\n1.69\n1.66\n1.63\n1.56\n4.27\nArgentina \nPeso\n3.8788\n3.9305\n3.96\n3.98\n4.05\n4.11\n-1.42\nColombia \nPeso\n1920.35\n1900.11\n1802.18\n1907.70\n1880.87\n1770.78\n6.22\nEUROPE \nUK \nPound \nSterling\n0.6586\n0.6691\n0.64\n0.64\n0.62\n0.62\n-0.48\nEuro Area \nEuro\n0.7402\n0.8172\n0.73\n0.75\n0.71\n0.69\n2.96\nRussia \nRuble\n29.4205\n31.2095\n30.54\n30.54\n28.43\n27.87\n2.01\nASIA \nJapan \nYen\n93.47\n88.43\n83.53\n81.12\n83.19\n80.56\n3.26\nChina \nRemnibi\n6.8259\n6.7818\n6.69\n6.61\n6.55\n6.46\n1.33\nIndia \nRupee\n44.9175\n46.45\n44.95\n44.71\n44.47\n44.70\n-0.51\nSource: Bloomberg \n-2.73\n-3.16\n6.27\n9.57\n2.81\n7.73\n5.35\n0.70\n2.21\n8.34\nYTD = Year to Date\n-1.73\n-9.66\n3.49\n-2.07\n0.02\n-1.97\nTable 3: End-Period Exchange Rates of Selected Countries \n(Values in currency units to US$)\n3.1.6\nStock Markets\nStock markets across the world recorded mixed performance in the first half of 2011, \narising from an uneven economic recovery, persistent high levels of unemployment, the \nsovereign debt crisis, rising commodity prices and geopolitical tensions.\nIn Africa, the stock markets followed the global trend during the period under review. \nThe Nigerian Stock Exchange (NSE) All-Share Index (ASI) and the Ghanaian GSE All-\nShare Index rose by 0.85 and 18.89 per cent to 24,980.20 and 1,188.91 respectively at \nend-June 2011, from 24,770.50 and 1,000.00, at end-December 2010, respectively. The \n11\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nNSE ASI rose owing to improved liquidity, while the rise in the GSE All-Share index was \nlargely attributable to rising commodity prices which boosted share prices of mining \ncompanies. However, the South African JSE, the Kenyan NSE 20 and the Egyptian EGX \nCASE 30 indices declined by 0.79, 9.34 and 24.77 per cent to 31,864.54, 70.50 and \n5,373.00 at end-June 2011, from 32,118.89, 77.76 and 7,142.14, at end-December 2010, \nrespectively. The South African JSE, declined, despite rising commodity prices, \nfollowing investors' divestment as a result of speculation that South African stocks were \novervalued. On the other hand, the Kenyan NSE 20 declined owing to uncertainty driven \nby political concerns, high inflation, rising interest rates and a depreciating Kenyan \nshilling, while Egypt's EGX CASE 30 decline was attributed to political crisis which \neroded investor confidence. \nIn North America, positive economic indicators in the US and the bail-out loan to Greece \nby the ECB and the IMF, which temporarily restored confidence in the Euro zone, \nboosted the U.S index, as the S&P 500 rose by 5.01 per cent to 1,320.64 at end-June \n2011, from 1,257.64 at end-December 2010. However, the Canadian S&P/TSX \nComposite and Mexican Bolsa indices declined by 1.06 and 5.17 per cent to 13,300.87 \nand 36,558.07 at end-June 2011, from 13,443.22 and 38,550.79, respectively at end-\nDecember 2010. \nIn South America, the equities market declined in the first half of 2011 amid speculations \nthat a number of countries in the region would introduce measures aimed at curbing \ninflation, thus limiting economic growth. Consequently, the Brazilian Bovespa, the \nArgentine Merval and the Columbian IGBC indices declined by 9.95, 4.62 and 9.22 per \ncent, to 62,403.64, 3,360.64 and 14,067.73 at end-June 2011, from 69,304.81, 3,523.59 \nand 15,496.77, respectively at end-December 2010. \nIn Europe, stock market indices trended upwards in the first half of 2011, except the \nRussian MICEX which declined. The United Kingdom's FTSE 100, the French CAC 40 \nand the German M-DAX rose by 0.78, 4.66 and 6.68 per cent to 5,945.71, 3,982.21 and \n7,376.24 at end-June 2011, from 5,899.94, 3,804.78 and 6,914.19, respectively at end-\nDecember 2010. The Russian MICEX declined by 4.12 per cent to 100.06 at end-June \n2011, from 104.36 at end-December 2010. Rising crude oil prices were not sufficient to \nsupport growth on the MICEX as the decline in domestic growth and the credit \nenvironment dragged the index down. \n12\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nAll the indices in the Asian market declined. The Japanese Nikkei 225, the Chinese \nShanghai A and the Indian BSE Sensex declined by 4.04, 1.64 and 8.11 per cent to \n9,816.09, 2,762.08 and 18,845.87 at end-June 2011, from 10,228.92, 2,808.08 and \n20,509.09, respectively at end-December 2010. The development was attributed to the \nfall in manufacturing output in China resulting from sluggish recovery in industrialized \ncountries. The decline in the Japanese index, on the other hand, was attributed to the \ncombined effects of the Tsunami and nuclear crises which impacted adversely on \nmanufacturing output (Table 4). \n% Change\nCountry\nIndex\n30-Jun-11\n31-Mar-11\n31-Dec-10\n30-Jun-10\n31-Dec-10 \nto 30-June-\n11\n30-Jun-10 to \n31-Dec-10\nAfrica\nNigeria\nAll Share Index\n24,980.20\n \n24,621.21\n \n24,770.52\n \n25,409.00\n \n0.85%\n-2.51%\nSouth Africa\nJSE African ASI\n31,864.54\n \n32,204.06\n \n32,118.89\n \n26,258.82\n \n-0.79%\n22.32%\nKenya\nNairobi NSE 20\n70.50\n \n72.56\n \n77.76\n \n74.40\n \n-9.34%\n4.52%\nEgypt\nEGX CASE 30\n5,373.00\n \n5,463.72\n \n7,142.14\n \n6,033.09\n \n-24.77%\n18.38%\nGhana\nGSE All Share\n1,188.91\n \n1,071.50\n \n1,000.00\n \n1,162.78\n \n18.89%\n-14.00%\nNorth America\nUS\nS&P 500\n1,320.64\n \n1,325.83\n \n1,257.64\n \n1,030.71\n \n5.01%\n22.02%\nCanada\nS&P/TSX Comp.\n13,300.87\n \n14,116.10\n \n13,443.22\n \n11,294.42\n \n-1.06%\n19.03%\nMexico\nBolsa\n36,558.07\n \n37,440.51\n \n38,550.79\n \n31,156.97\n \n-5.17%\n23.73%\nSouth America\nBrazil\nBovespa Stock \n62,403.64\n \n68,586.70\n \n69,304.81\n \n60,935.90\n \n-9.96%\n13.73%\nArgentina\nMerval \n3,360.64\n \n3,388.03\n \n3,523.59\n \n2,185.01\n \n-4.62%\n61.26%\nColumbia\nIGBC General \n14,067.73\n \n14,469.66\n \n15,496.77\n \n12,449.90\n \n-9.22%\n24.47%\nEurope\nUK\nFTSE 100\n5,945.71\n \n5,908.76\n \n5,899.94\n \n4,916.87\n \n0.78%\n19.99%\nFrance\nCAC 40\n3,982.21\n \n3,989.18\n \n3,804.78\n \n3,442.89\n \n4.66%\n10.51%\nGermany\nDAX \n7,376.24\n \n7,041.31\n \n6,914.19\n \n5,965.52\n \n6.68%\n15.90%\nRussia\nMICEX\n100.06\n \n106.79\n \n104.36\n \n76.68\n \n-4.12%\n36.10%\nAsia\nJapan\nNIKKEI 225\n9,816.09\n \n9,755.10\n \n10,228.92\n \n9,382.64\n \n-4.04%\n9.02%\nChina\nShanghai SE A \n2,762.08\n2,928.11\n2,808.08\n2,398.37\n-1.64%\n17.08%\n3.2\nDomestic Macroeconomic and Financial Developments\nDomestic macroeconomic performance was strong in the first half of 2011. Gross \nDomestic Product (GDP) growth rate was 7.3 per cent in the first half of 2011, driven \nlargely by the non-oil sector. Money supply grew moderately during the review period. \nHeadline year-on-year inflation moderated to 10.20 per cent at end-June 2011, from \n11.80 per cent at end-December 2010. Interest rates rose consistently with the upward \nreview of the monetary policy rate during the review period. However, the effects of the \n13\nTable 4: Global Stock Indices\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nrise in interest rates were cushioned by CBN's interventions, which enhanced the flow of \ncredit to the real sector, particularly agriculture, SMEs and infrastructure. The exchange \nrate was relatively stable, although it marginally depreciated in all segments of the \nmarket. At the WDAS, interbank and BDC segments, it depreciated by 2.1, 2.4 and 2.7 \nper cent, respectively, when compared with the levels in the first half of 2010. External \nreserves declined to US$31.89 billion at end-June 2011, from US$32.34 billion at end-\nDecember 2010, but remained above the international minimum benchmark of three \nmonths import cover. \nGDP growth was projected at 7.98 per cent for 2011, which is 0.13 percentage point \nabove the actual growth rate of 7.85 per cent recorded in 2010. The growth rate in the \nsecond quarter of 2011 was estimated at 7.93 per cent, compared with 7.43 per cent in the \nfirst quarter of the year and 8.29 per cent in the fourth quarter of 2010. The outcome was \ndriven mainly by the non-oil sector, particularly agriculture, which grew, respectively, \nby 5.39 and 5.79 per cent in the first and second quarters of 2011, and constituted 35.0 \nand 41.48 per cent, respectively of the total GDP. Oil GDP grewby 2.9 and 3.4 per cent in \nthe first and second quarters of 2011, respectively.\n3.2.1\nThe Real Sector\nFigure 2: Percentage Growth Rate of Non-Oil GDP\nFigure 3: Contribution of Oil and Non-oil GDP to Total Output\n14\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n3.2.2\nInflation\nDomestic inflation moderated slightly in the first half of 2011, but remained at a double-\ndigit level in the period. Headline inflation stood at 10.2 per cent at end-June 2011, \ncompared with 11.8 per cent at end-December 2010, representing a 1.6 percentage points \ndecline. The decline was due largely to the stability in the supply of petroleum products. \n3.2.3\nThe Fiscal Sector\nFiscal Operations\nThe retained revenue and aggregate expenditure of the Federal Government stood at \nN1,307.33 billion and N1,997.85 billion, respectively, at end-June 2011 (Figures 6). At \nthat level, Federal Government-retained revenue fell by 22.46 per cent below the level at \nend-December 2010. Consequently, the fiscal operations of the Federal Government \nresulted in an overall deficit of N690.52 billion at end-June 2011, compared with the \nactual deficit of N427.93 billion recorded in the second half of 2010. \nFigure 5: Federal Government's Fiscal Operations\nFigure4: Inflationary Trend (Year-on-Year)\n15\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n3.2.4\nThe Financial Sector\n3.2.4.1 Monetary and Credit Developments\nGrowth in money supply was modest in the first half of 2011. Broad money supply (M2), \nrose by 5.7 per cent to N12,177.4 billion at end-June 2011, compared with 6.9 per cent or \nN11,488.7 billion at end-December 2010 and the indicative benchmark of 13.75 per \ncent, or N17,710.00 billion, for fiscal 2011. The development reflected the respective \n13.7 and 2.3 per cent growth in other assets (net) and domestic credit (net) of the banking \nsystem. \nAggregate bank credit to the domestic economy (net) rose by 2.3 per cent to N8,908.5 \nbillion at end-June 2011, compared with the revised 8.8 per cent growth recorded at end-\nJune 2010. The development reflected the respective 5.1 and 1.5 per cent growth in credit \nto the Federal Government and the private sector. \nReserve money grew by 11.9 per cent to N2,065.1 billion at end-June 2011, from 11.6 per \ncent or N1,845.7 billion at end-December 2010. At that level, reserve money was 16.6 \nper cent higher than the indicative benchmark of N1,771.4 billion for 2011fiscal year.\nFigure6: Trends in Major Monetary Aggregates\nFigure 7: Trends in Net Domestic Credit\n16\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n3.2.4.2 The Maturity Structure of DMBs' Loans &Advances and Deposits\nAnalysis of the structure of DMBs' outstanding credits at end-June 2011 indicated that \nshort-term maturities remained dominant in the credit market. Outstanding loans and \nadvances maturing one year and below accounted for 62.2 per cent of the total, which \nwas a slight improvement over the 65.3 per cent at end-December 2010. The medium-\nterm (≥1yr and < 3yrs) and long-term maturities (3yrs and above) stood at 14.6 and 23.2 \nper cent, respectively, compared with 12.6 and 14.1 per cent, respectively at end-June \n2010, (Figure 9). Deposits of below one year constituted 96.6 per cent of the total. \nFurther analysis showed that 73.3 per cent of the deposits had a maturity of less than 30 \ndays, while long-term deposits of more than three (3) years constituted only 1.0 per cent \nat end-June 2011 (Figure 10).\nFigure 3: Distribution of Deposit Money Banks (DMBs) \nLoans and Advances by Maturity\nFigure 4: Distribution of DMB's Deposit Structure\n17\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n3.2.4.3 The Market Structure of the Banking Industry\nThe oligopolistic structure of the banking industry persisted in the first half of 2011. \nBased on total assets and market share of total deposits, the concentration ratios of the \nlargest six banks stood at 55.22 and 53.85 per cent, respectively, compared with 52.36 \nand 53.90 per cent at end-December 2010. The market share of the largest bank, with \nrespect to assets and deposits, stood at 13.79 and 14.31 per cent, respectively, at end-June \n2011. The oligopolistic structure of the banking sector was further confirmed by the \nrespective Herfindahl-Hirschman Index (HHI) of 699.1 and 690.1 for total deposits and \nassets respectively (Figure 11).\nFigure 10: Market Concentration Ratios of DMBs (Assets)\n3.2.4.4 Interest Rates\nRates at all segments of the money market rose in tandem with the upward reviews of the \nMPR in March and May 2011. Consequently, the average inter-bank call rate stood at \n9.21 per cent for the first half of 2011, compared with 2.52 per cent in the second half of \n2010. At the Open-Buy-Back (OBB) segment, the average rate rose to 8.24 per cent at \nend-June 2011, from 2.29 per cent in the second half of 2010. The OBB 7- and 30-day \nNIBOR rates also moved in tandem with the inter-bank call rates. The symmetric \ncorridor of +/- 200 basis points around the MPR for lending and deposit facilities was \nmaintained during the review period. \nAvailable data showed that the average term deposit rate rose marginally by 0.06 \npercentage point to 4.40 per cent in the first half of 2011. The maximum lending rate rose \nby 0.16 percentage point to 22.00 per cent, while the average prime lending rate declined \nby 0.96 percentage point to 15.77 per cent. Consequently, the spread between the \naverage term deposit and maximum lending rates narrowed by 0.92 percentage points to \n17.40 per cent in the first half of 2011, from 18.32 per cent in the second half of 2010. \n18 \n CBN FINANCIAL STABILITY REPORT JUNE 2011\nFigure 11: Money Market Rates Between \nFirst Half of 2008 and First Half of 2011\nFigure 12: Lending and Deposit Rates Between \nFirst Half of 2008 and First Half of 2011\n3.2.4.5 The Capital Market\n3.2.4.5.1 The Nigerian Stock Market\nActivities in the stock market were influenced by improved liquidity and the successful \nconduct of the 2011 general elections. Consequently, ASI rose by 0.85 per cent to close \nat 24,980.20 at end-June 2011, from 24,770.52 at end-December 2010. Market \ncapitalization also rose by 1.01 per cent to N7.99 trillion at end-June 2011, from N7.91 \ntrillion at end-December 2010. This was mainly attributed to capital appreciation and \nadditional listings.\nThe volume and value of transactions increased by 31.75 and 1.78 per cent to 50.46 \nbillion and N367.60 billion at end-June 2011, from 38.30 billion and N361.16 billion at \nend-December 2010, respectively. However, the number of deals declined by 1.97 per \ncent to 729,365 at end-June 2011, from 744,028 at end-December 2010 (Table 5).\n19\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nPeriod \nVolume \nValue \n \nMarket Cap. \nNo. of \nIndex\nJanuary–June 2011\n \n50.46\n \n367.60\n \n7.99\n 729,365\n \n24,980.20\nJuly–December \n38.30\n \n361.16\n \n7.91\n \n744,028\n \n24,770.52\nPercentage Change\n \n31.75\n \n1.78\n \n1.01\n \n(1.97)\n \n0.85\nTable 5: Transactions on the Nigerian Stock Exchange\nSource: NSE Monthly Statistics and Annual Report 2010.\nThe banking sector accounted for 52.73 per cent of the volume of equities traded in the \nreview period, compared with 58.37 per cent in the second half of 2010. The five most \nactive sectors: banking, conglomerates, insurance, mortgage, and food/beverages and \ntobacco, accounted for 84.02 per cent of the volume traded during the review period, \ncompared with 79.7 per cent in the second half of 2010 in which the banking, insurance, \nfood/beverages and tobacco, ICT, and mortgage sectors were the major contributors. \nThe increase was attributed to renewed investor confidence in the conglomerate sector, \nwhich was not among the top five (5) most active sectors in the second half of 2010, but \nranked second in the period under review.\n \nSector\nVolume \nValue ( N)\nDeals\nBanking\n26,582,601,439\n \n228,172,228,568.19\n \n412,233\n \nConglomerates\n8,453,857,810\n \n21,004,735,560.03\n \n21,091\n \nInsurance\n4,197,201,243\n \n3,984,906,089.61\n \n34,799\n \nMortage Companies\n1,883,045,540\n \n1,244,999,913.58\n \n4,146\n \nFood/Beverages & \nTobacco\n1,236,550,802\n \n31,416,160,143.09\n \n60,431\n \nSub-Total\n42,353,256,834\n \n285,823,030,274.50\n \n532,700\n \nOthers\n8,057,700,502\n \n87,832,656,306\n \n201,063\n \nEquity Traded\n50,410,957,336\n \n373,655,686,580.32\n \n733,763\n \nTable 6: NSE Sectoral Performance in the First Half of 2011\n3.2.4.5.2 The Bond Market\nA.\nPrimary Market Auctions\na.\nFederal Government of Nigeria (FGN) Bonds\nThe value of FGN Bonds increased by 13.10 per cent to N3.28 trillion at end-June 2011, \nfrom N2.90 trillion at end-December 2010. It remained the dominant instrument in the \nbond market, constituting 60.41 per cent of the total outstanding bonds of N5.43 trillion \nat end-June 2011, and accounted for 62.96 per cent of Federal Government's outstanding \n20\n CBN FINANCIAL STABILITY REPORT JUNE 2011\ndomestic debt stock of N5.21 trillion at end-June 2011.\nDuring the first half of 2011, a new 3-year 10.50 per cent FGN 2014 bond was issued, \nwhile existing 3- and 5-year FGN Bonds were reopened. The total amount on offer stood \nat N396.50 billion with public subscription of N861.11 billion and allotment of N396.50 \nbillion (Figure 14 and Table 7).The bid rates ranged from 5.50 to 15.00 per cent for the 3-\nyear tenor and 8.75 to 15.50 per cent for the 5-year tenor, while the average stop rates \nwere 10.84 per cent for the 3-year tenor and 12.05 per cent for the 5-year tenor. The over-\nsubscription was attributed to investor appetite for the short end of the yield curve, as it \nhad higher returns with a lower risk. \nFigure 13: FGN Bond Auctions\nBOND \nTRANCHES\nTENOR\nISSUE \n(BILLION=N=)\nSUBSCRIPTION(BI\nLLION=N=)\nALLOTMENT \n(BILLION=N=)\nRANGE OF BIDS\nCUTOFF \nRATE\nMATURITY \nDATE\nJANUARY 19,2011\n5.5%FGN2013\n3YEAR\n30.00\n80.95\n30.00\n5.50-13.00\n10.4000\n19/02/2013\n4.00%FGN 2015\n5YEAR\n30.00\n56.50\n30.00\n9.00-14.00\n11.1300\n23/04/2015\nSub-Total\n60.00\n137.45\n60.00\nFEBRUARY 16,2011\n5.5%FGN2013\n3YEAR\n36.50\n83.11\n36.50\n5.50-12.24\n9.2500\n19/02/2013\n4.00%FGN 2015\n5YEAR\n30.00\n56.90\n30.00\n8.75-12.78\n11.0000\n23/04/2015\nSub-Total\n66.50\n140.01\n66.50\nMARCH 16,2011\n10.5%FGN2014\n3YEAR (New issue)\n30.00\n55.89\n30.00\n8.00-12.25\n10.5000\n18/3/2014\n4.00%FGN 2015\n5YEAR\n30.00\n46.38\n30.00\n9.98-13.2867\n12.0000\n23/4/2015\nSub-Total\n60.00\n102.27\n60.00\nAPRIL 20,2011\n10.5%FGN2014\n3YEAR \n35.00\n65.89\n35.00\n10.00-15.00\n12.1490\n18/03/2014\n4.00%FGN 2015\n5YEAR\n35.00\n63.33\n35.00\n11.75-15.00\n13.1989\n23/04/2015\nSub-Total\n70.00\n129.22\n70.00\nMAY 18,2011\n10.5%FGN2014\n3YEAR \n35.00\n100.21\n35.00\n9.20-15.00\n11.0390\n18/05/2014\n4.00%FGN 2015\n5YEAR\n35.00\n98.80\n35.00\n10.50-15.00\n12.2300\n23/04/2015\nSub-Total\n70.00\n199.01\n70.00\nJUNE 15,2011\n10.5%FGN2014\n3YEAR \n35.00\n62.52\n35.00\n9.00-15.00\n11.6900\n18/03/2014\n4.00%FGN 2015\n5YEAR\n35.00\n90.63\n35.00\n10.00-15.50\n12.7500\n23/04/2015\nSub-Total\n70.00\n153.15\n70.00\nTOTAL\n396.50\n861.11\n396.50\nTable 7: FGN Bond Auctions, January - June 2011\n21\n CBN FINANCIAL STABILITY REPORT JUNE 2011\na.\nSub-National Bonds\nb.\nCorporate Bonds\nThe sub-national bonds segment was not active in the first half of 2011 as there was no \nissue during the period, compared with N50 billion issued in the second half of 2010. At \nend-June 2011, total sub-national bonds outstanding were N248.50 billion, representing \n4.60 per cent of total bonds outstanding.\nThere was one issue of corporate bonds during the review period, compared with three in \nthe second half of 2010. The total value of corporate bonds offered declined by 97.06 per \ncent to N2.50 billion in the first half of 2011, from N85.00 billion in the second half of \n2010. The total amount allotted was N1.50 billion, compared with N72.50 billion in the \nsecond half of 2010. Total outstanding corporate bonds stood at N93.17 billion, \nrepresenting 1.71 per cent of the outstanding bonds of N5.43 trillion (Tables 8 and 9).\nIssuer\n \nIssue Date \n \nMaturity \nDate \nOffer \n(N\nAllotment\n \n(N\nTenor\n(Years)\nChellaramsPlc \n6-Jan-11 \n6-Jan-16 \n2.50 \n1.50 \n5\nTable 8: Corporate Bonds Issued, January - June 2011\n \n \nCrusader Nigeria \nPlc\n30-Sep-08\n \n30-Sep-13\n \nListed\n \n4.00\n \n4.00\n \n5\nGuaranty Trust \nBank Plc\n18-Dec-09\n \n18-Dec-14\n \nListed \n100.00\n \n13.17\n 5\nNGC Sterile Ltd\n \n1-Apr-10\n \n31-Dec-14\n \nPrivate \nPlacement \n2.00\n \n2.00\n \n5\nUACN Property \nDev. Co. Plc\n \n17-Aug-10\n \n17-Aug-15\n \n \n15.00\n \n15.00\n 5\nUnited Bank for \nAfrica Plc\n30-Sep-10\n \n30-Sep-17\n \n \n35.00\n \n20.00\n \n7\nFlourmills of \nNigeria Plc\n \n9-Dec-10\n \n9-Dec-15\n \n \n35.00\n \n37.50\n \n5\nChellarams PLC\n \n6-Jan-11\n \n6-Jan-16\n \n \n2.50\n \n1.50\n \n5\nTable 9: Outstanding Corporate Bonds\n22\n CBN FINANCIAL STABILITY REPORT JUNE 2011\na.\nAsset Management Corporation of Nigeria (AMCON) Bonds\nA.\nSecondary Market Activities\na.\nOver-the-Counter (OTC) Trading in FGN Bonds\nThe AMCON issued two 3-year zero-coupon consideration bonds with a total face value \nof N534.48 billion to 22 banks in the first half of 2011, in exchange for their Eligible \nBank Assets (EBAs). The total face value of bonds issued by AMCON since its \ninception stood at N1.81 trillion at end-June 2011. This represented 33.28 per cent of the \ntotal outstanding bonds.\nThe OTC trading in FGN bonds declined by 25.53 per cent to N4.20 trillion in 35,374 \ndeals in the first half of 2011, from N5.64 trillion in 48,686 deals recorded in the second \nhalf of 2010 (Figure 15). This development was attributed to the decline in bond prices, \nfollowing the increase in the Monetary Policy Rate to 8.00 per cent in May 2011, \ncompared with 6.25 per cent at end-December 2010. The decline in prices informed \ninvestor preference to hold onto the bonds to avoid capital losses on disposal.\nFigure 14: OTC Trades in FGN Bonds\n3.3\nThe External Sector\n3.3.1\nExternal Reserves Management\nNigeria's external reserve management is largely driven by the need to safeguard the \ninternational value of the Naira. To achieve this objective, the Bank continued the \nimplementation of its Strategic Asset Allocation initiative which classifies the CBN's \nportion of the foreign reserves into Liquidity, Investment and Stable tranches. The other \nportions of the reserves are the Federation and the Federal Government. Meanwhile, the \n23\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nproportion of external reserves under the control of the CBN is expected to drop as the \nExcess Crude Account would be transferred to the Nigeria Sovereign Investment \nAuthority (NSIA) following the enactment of the Nigeria Sovereign Investment \nAuthority Act in April 2011.\nThe gross external reserves at end-June 2011 stood at US$31.89 billion, representing a \ndecrease of US$0.45 billion, or 1.39 per cent, from the level of US$32.34 billion at end-\nDecember 2010. A breakdown of the external reserves by currency shows that 79.29 per \ncent were held in US Dollars, 2.59 per cent in Pounds Sterling, 9.58 per cent in Euro and \n8.54 per cent in other currencies.\nTotal foreign exchange inflow during the first half of 2011 was US$19.57 billion, \ncompared with US$14.87 billion in the second half of 2010, representing an increase of \n31.61 per cent. This was due to increases in oil receipts and other government revenues.\nTotal outflow in the review period was US$20.53 billion, made up of foreign direct \npayments, drawings on letters of credit and external debt service, among others. The \ntotal outflow was lower than the US$20.89 billion recorded in the second half of 2010 by \n1.72 per cent. Outflows during the period were largely in respect of market interventions \nthrough the WDAS and BDC windows, which accounted for US$17.00 billion or 82.80 \nper cent. Others included public sector uses and debt servicing which amounted to \nUS$3.53 billion or 17.20 per cent. The net outflow during the review period was \nUS$0.96 billion, compared with US$6.00 billion in the second half of 2010.\nThe Bank conducted 48 auctions in the first half of 2011 at the Wholesale Dutch Auction \nSystem Spot (WDAS-SPT) window. The total amount of foreign exchange demanded \nstood at US$17.91 billion, while amounts offered and sold were US$15.37 billion and \nUS$14.99 billion respectively, during the period. In the second half of 2010, total \ndemand for and sales of foreign exchange stood at US$15.37 billion and US$12.99 \nbillion, respectively, while the amount on offer was US$13.01 billion. \nThe foreign exchange Wholesale Dutch Auction System Forward (WDAS-FWD) \ncommenced on Wednesday, March 23, 2011. The WDAS-FWD was introduced with the \naim of deepening the foreign exchange market in order to minimise distortions in \n3.3.2\nMovements in External Reserves\n3.3.3\nForeign Exchange Flows\n3.3.4 Demand for and Supply of Foreign Exchange\n24 \n CBN FINANCIAL STABILITY REPORT JUNE 2011\nexchange rate pricing and smoothen demand for foreign exchange. The forward auctions \nare conducted weekly and offered in tenors of 1-, 2- and 3-months. \nThe total amount demanded at the WDAS-FWD window was US$1.12 billion, while \nUS$953.52 million was sold during the period under review. The difference, therefore, \nrepresented bids below the Bank's reserve rate. The sum of US$547.43 million matured \nat the WDAS-FWD segment in the first half of 2011. \nIn addition to the WDAS auctions, special allocations of US$1.60 billion were made to \nBDCs on a non-competitive basis in the first half of 2011. This represented a decrease of \n42.03 per cent from the US$2.76 billion sold to BDCs in the second half of 2010. The \ndecrease was traceable to the withdrawal of the operating licences of class 'A' BDCs in \nNovember 2010.\nFigure 15: WDAS-SPT Demand and Supply in US$ Million\n3.3.5\nExchange Rate Movements\nThe average exchange rate of the Naira at the WDAS-SPT window depreciated by 1.76 \nper cent to N153.31/US$ at end-June 2011, from N150.66/US$ in the second half of \n2010. At the inter-bank segment of the market, the average exchange rate of the Naira \ndepreciated by 2.02 per cent to close at N154.47/US$, from N151.42/US$ at end-\nDecember 2010. Similarly, the exchange rate at the BDC segment depreciated by 2.35 \nper cent to close at N156.95/US$, from N153.35/US$ at end-December 2010 (Figure \n17). \nThe premium between the WDAS-SPT and BDC exchange rates increased by 33.69 per \ncent to N3.73 in the first half of 2011, from N2.79 in the second half of 2010. The \npremium between WDAS-SPT and inter-bank exchange rates also increased by 45.34 \n25\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nFigure 16: WDAS, Inter-Bank and BDC Rates for \nJuly 2010 - June 2011\n3.4\nKey Risks in the Nigerian Financial System\n3.4.1\nCredit Risk\nThe risks in the Nigerian financial system eased during the review period. This was due \nto the impact of AMCON's activities, effective regulatory interventions and gradual \nglobal economic recovery, driven by the economies of BRICS (Brazil, Russia, India, \nChina, and South Africa) and other emerging economies. However, given the current \nstate of the intervened banks and the prolonged recapitalisation process, the risks \nhighlighted below continued to pose threats to the stability of the financial system.\nThe banking industry risk assets quality continued its modest improvement as the non-\nperforming loans (NPLs) to total loans ratio declined by 4.69 percentage points to 10.81 \nper cent at end-June 2011, from 15.5 per cent at end-December 2010. The decrease in \nNPLs was driven largely by the acquisition of eligible bank assets by AMCON. In \nabsolute terms, the NPLs declined by 44.68 per cent from N1,413.63 billion at end-\nDecember 2010 to N782.06 billion at end-June 2011,. Sub-standard, doubtful and lost \nloans stood at N236.57 billion, N107.53 billion and N437.96 billion or 30.25, 13.75 and \n56.00 per cent of total NPLs, respectively, at end-June 2011. Loan loss provisions \ndeclined from N822.59 billion at end-December 2010 to N585.15 billion at end-June \n2011. \n26\nper cent to N1.25 in the first half of 2011, compared with N0.86 in the second half of \n2010.\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nFigure 17: Selected Credit Ratios, Dec. 2010 June 2011\nThe total credit of N7,706.43 billion at end-December 2010 decreased to N7,231.29 \nbillion at end-June 2011. The top 10, 20, 50 and 100 obligors accounted for 15.12, 20.92, \n31.72 and 40.29 per cent, respectively, of the industry gross credit of N7,231.29 billion, \nindicating a high concentration. \nLiquidity in the banking sector improved marginally as the average liquidity ratio rose \nby 2.79 percentage points to 50.25 per cent at end-June 2011, from 47.46 per cent at end-\nDecember 2010. This was driven by the increase in total deposits to N9.424 trillion at \nend-June 2011 from N9.368 trillion at end-December 2010. Other factors included low \nvolatility of deposits, significant reduction in the assets/liabilities mismatch, and the \nCBN guarantees of inter-bank market transactions and foreign credit lines to banks.\nBanking industry trading books' sensitivity to movements in interest rates, measured by \ncomposite volatility in interest rates, increased from +0.01286 in December 2010 to \n+0.03286 in June 2011. This indicated that a one percentage point parallel change in \ninterest rates would have resulted in a 3.29 per cent increase or decrease in net interest \nincome. Thus, interest rate risk, based on sensitivity of banking trading books to interest \nrates volatility, increased by 200 basis points which was within tolerable limits. \nSimilarly, interest rate risk from the re-pricing of interest-sensitive financial \nassets/liabilities was low, owing to the large spread between deposit and lending rates, \nwhich stood at an average of 19.22 percentage points.\n3.4.2\nLiquidity Risk\n3.4.3\nMarket Risk\n3.4.3.1 Interest Rate Risk \n27\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n3.4.3.2 Exchange Rate Risks\n3.4.4\nOperational Risk\n3.4.5\nReputational Risk\n3.5\nOutlook for the Second Half of 2011\nExchange rates remained stable at the WDAS, interbank and BDC markets during the \nperiod under review. However, given the huge net FX position, the banking industry \nremained vulnerable to exchange rate volatility occasioned by persistent demand \npressure.\nDuring the review period, 1,379 fraud and forgery cases involving a total of N6.50 \nbillion, with a loss of N1.93 billion occurred in the banking industry, as against 2,841 \ncases involving a total of N11.57 billion with a loss of N8.04 billion at end-December \n2010. Similarly, 116 ATM-related cases valued at N17.16 million were reported in the \nfirst half of 2011, as against 411 cases amounting to N82.17 million recorded in the \nsecond half of 2010.\nAt end-June 2011, 2,652 complaints were processed out of a total of 2,742 received by \nthe CBN. The processed complaints resulted in the refund of N3.96 billion, \nUS$198,118.75 and EUR10,000.00, to customers, arising from excess charges and other \nunethical actions. These efforts mitigated reputational risk in the industry. However, the \nspate of litigations against the Bank's effort at recapitalizing intervened banks exposed \nthe financial system to increasing reputational risk. \nThe GDP is projected to grow by 7.98 per cent in 2011, compared with 7.85 per cent in \n2010, while growth rates in the third and fourth quarters of 2011 are projected to be 7.92 \nand 8.46 per cent, as against 7.86 and 8.36 per cent, respectively, recorded in the \ncorresponding periods of 2010. The major drivers of the projected growth in GDP are \nagriculture, wholesale and retail trade, and the telecommunications sectors of the \neconomy. However, growth prospects might be constrained by the slow economic \nrecovery and debt concerns in the developed economies, as well as rising inflation in \nsome emerging economies.\nA tight monetary policy stance is expected to further dampen inflationary pressures, \nwhile the exchange rate should remain relatively stable. The current initiatives aimed at \nincreasing productivity in the real sector as well as sustained reforms in other sectors are \nexpected to yield a positive impact on GDP growth.\n28\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nThe introduction of a Central Securities Depository in the second half of the year, should \nenhance securities and collateral management, and the planned issuance of N1.33 \ntrillion NTB would further deepen the money market. The demand for repo is projected \nto range from N150 billion to N230 billion in the second half of the year as market \nplayers may utilise their AMCON Bonds for accessing the CBN window.\nThe capital market might experience increased activity, following the projected issuance \nof FGN bonds (3-, 5- and 10-year tenors) worth N420.00 billion in the second half of \n2011. \n29\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n4.0\nDEVELOPMENTS IN THE FINANCIAL SECTOR\n4.1\nPromoting Financial System Stability\nThe new banking model which was introduced in 2010 provided, among others, for the \nfollowing:\nClassification of banks into Commercial, Merchant, and Specialised;\nClassification of their operations into International, National, and Regional; \nBanks' divestment from non-bank subsidiaries or the transfer of such \nsubsidiaries to Holding Companies, latest by May 2012; and\nBanks with real estate subsidiaries to divest from such subsidiaries, latest by June \n2013.\nConsequently, Approvals-in-Principle (AIPs) were granted to 17 deposit money banks \n(DMBs) during the review period to pursue their respective compliance plans. Of the 17 \nDMBs, 9 opted for “International”, 6 “National” and 2 “Regional” bank status. Also, 13 \nDMBs opted to divest from their non-bank subsidiaries, while four (4) chose the Holding \nCompany (HoldCo) structure. The processing of the applications of the remaining 7 \nDMBs was deferred pending the conclusion of their recapitalisation plans. It is \nenvisaged that the emerging structure would elicit ownership interest in the industry, \nwith good prospects for attracting Foreign Direct Investment (FDI). \nThe capital requirements for banks and other financial institutions at end-June 2011 were \nprescribed as follows:\nCommercial bank:\no\nInternational\n-\nN50 billion\no\nNational\n-\nN25 billion\no\nRegional\n-\nN10 billion\nMerchant bank\n-\nN15 billion\nNon-interest bank:\no\nNational\n-\nN10 billion\no\nRegional\n-\nN5 billion\nPrimary Mortgage Institution\n-\nN5 billion\nMicrofinance bank:\no\nNational\n-\nN2 billion\no\nState\n-\nN100 million\no\nUnit\n-\nN20 million\n\n\n\n\n\n\n\n\n\n31\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nDuring the review period, the CBN sustained its support for the recapitalization drive of \nthe eight banks in which it had intervened in order to contain systemic distress. \nFollowing the delay in the recapitalization process arising from litigations instituted by \nsome shareholders, the deadline was extended to September 30, 2011, from June 30, \n2011. It was expected that the litigations would have been resolved before the deadline to \nenable the affected banks conclude their recapitalization programmes.\nMeanwhile, AMCON expressed its readiness to bail out the affected banks, through \nacquisition, while it continued to impact positively on the financial system by acquiring \neligible bank assets (EBAs) to enhance liquidity and deepen the capital market. \nThe Revised Microfinance Policy, Regulatory and Supervisory Framework was \napproved in April, 2011. The revision was informed by the challenges encountered in the \nimplementation of the 2005 Microfinance Framework. \nThe new policy regime categorised MFBs and prescribed their minimum capital \nrequirements as follows:\nUnit MFBs: \no\nMinimum paid-up capital of N20 million,\no\nAuthorized to operate in one location only;\nState MFBs: \no\nMinimum paid-up capital of N100 million, \no\nTo operate within a State or the Federal Capital Territory (FCT); and\nNational MFBs: \no\nMinimum paid-up capital of N2 billion, and\no\nTo operate in more than one State, including the FCT. \nThe new policy recognised the need for the establishment of a Microfinance \nDevelopment Fund to provide for the wholesale funding of MFBs/MFIs. Furthermore, \nthe Fund will support the growth of the subsector by providing a refinancing/guarantee \nfacility, capacity building, financial education, and other promotional activities. It would \nbe financed by government and facilities from international development finance \ninstitutions.\nThe policy also provides for the extension of the Interest Drawback Programme (IDP) to \n4.2\nThe Revised Microfinance Policy, Regulatory and Supervisory Framework\n\n\n\n32\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nMFB clients in agriculture-related businesses. In addition, subsidized training/capacity \nbuilding programmes would be made available to staff of MFBs.\nIn line with its commitment to entrench a sound financial system, the Bank continued to \nbuild capacity through targeted training of staff in the following areas: \nSensitisation training on IFRS and its implementation;\nTraining of supervisors from the Bank and the NDIC on the risk-based \nsupervisory methodology;\nPilot training on the utilization of Financial Institutions' Application Processing \nSystem (FIAPS);\nMicrofinance training programme for supervisors from the Bank and the NDIC, \nco-sponsored by the German Technical Corporation (GTZ);\nInitiation of the Microfinance Certification Examination (MFCE) by the Bank in \ncollaboration with the Chartered Institute of Bankers of Nigeria (CIBN). A total \nof 319 candidates completed the certification examination in the period; and\nTraining of staff on the financial markets and Non-interest (Islamic) Banking.\nThe meeting of the West African Monetary Zone Experts Committee held in Accra, \nGhana, from May 25 to 27, 2011 discussed the results of studies on: \nA Framework for the Harmonizing \nForeign Exchange Markets and the \nPooling of Reserves in the WACB; \nFinancial Sector Assessment and Development of an Appropriate Architecture in \nthe WAMZ: Design of the ECO Unit of Account; and\nImpact of Electoral Cycles on Macroeconomic Convergence and the Twin \nDeficits Hypothesis in the WAMZ. \nThe Board of Directors of the African Development Bank (AfDB) Group, on May 26, \n2011, approved two sovereign-guaranteed programmes, totaling US$200 million to the \nNigerian Export-Import Bank (NEXIM) for financing export-oriented Small and \nMedium-sized Enterprises (SMEs), and US$500 million to the Bank of Industry (BOI) \nfor financing domestic SMEs in Nigeria. The funds were to be channelled through \n4.3\nInstitutional Capacity Building\n4.4\nInternational Economic Relations and Cooperation\n4.4.1\nThe WAMZ Committee of Experts Deliberated on the Report of Financial \nSector Assessment and Development\n4.4.2\nAfDB's Cooperation with Nigeria for the Development of SMEs\n\n\n\n\n\n\n\n\n\nof \n33\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nNEXIM and the BOI by way of multi-tranche Lines of Credit. A portion of the proceeds \nof the programmes was to be used to pay for Technical Assistance and capacity building \nin NEXIM, BOI, and the SMEs. \nThe NEXIM programme was designed to mobilize significant financial resources for \nNigeria's export-oriented SMEs operating in various sectors of the economy and \ncontributing to economic development through increased employment opportunities, \nforeign exchange earnings and regional trade integration. NEXIM envisages significant \neconomic outcomes through this programme, including creating about 55,000 new jobs \nfor its SME clients, US$ 1.6 billion in new foreign exchange inflows, an estimated 7.0 \nper cent increase in non-oil exports, and a 10.0 per cent increase in the country's share of \nECOWAS exports. \nThe funds for the BOI were to be deployed towards systematic poverty reduction; \nemployment generation; and wealth creation through entrepreneurial, social and \neconomic development. The programme was to cover for loans to SMEs and financing \nof capital projects in the form of cluster and infrastructure development. \nThe associated Technical Assistance packages were designed to strengthen capacity at \nNEXIM, BOI and the SMEs. In summary, the programmes were expected to generate \nsignificant additional lending to export-oriented SMEs at a time when lending by \ncommercial banks to these schemes was grossly inadequate.\nThe Association of African Central Banks (AACB) held its 2011 Seminar on, “Financing \nDevelopment in Africa: What Role for Central Banks?” at the National Bank of \nRwanda, Kigali, from 30th May to 1st June 2011, in which the central bankers defined a \nrole for central banks in financing development in Africa. Nigeria was one of the five (5) \nAfrican central banks that shared their experiences with participants at the Seminar. The \nobjective of the seminar was to identify alternative sources of financing development in \nAfrica and to further strengthen AACBs goal of promoting the exchange of ideas and \nexperiences on monetary, financial and banking matters. \nAt the end of the Seminar, participants agreed that central banks had a key role to play in \nfinancing development. A central bank's role could be in the form of direct intervention \nto address a specific development issue and/or indirectly, given that development is \n4.4.3\nCooperation with other African Central Banks\n34\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nlargely a long-term phenomenon. A key recommendation of the Seminar was that \nAfrican central banks revisit their laws to include financing development especially \nwhere financing development had not been explicitly provided for in existing \nlegislation. Members expressed their desire to leverage on the experiences of Nigeria, \nThe Gambia and Egypt in their efforts to finance development in their respective \ncountries. The recommendations of the Seminar were to be submitted to the Assembly of \nGovernors of the AACB at their next meeting later in the year.\nA total of 11,410 loans, valued at N2.19 billion were guaranteed in the first half of 2011, \nbringing the total loans guaranteed under the Scheme since its inception in 1978 to \n709,610, valued at N44.34 billion.\nUnder the Interest Drawback Programme (IDP), 7,430 claims valued at N68.93 million \nwere settled during the review period. This reflected a decline of 41.53 and 42.77 per \ncent in volume and value, respectively, when compared with 12,552 claims valued at \nN120.43 million settled in the second half of 2010. The cumulative IDP claims settled \nsince its inception to June 30, 2011 were 127,902, valued at N720.64 million. \nAt end-June 2011, total disbursements under the Scheme remained unchanged at N19.43 \nbillion to 103 agricultural projects as was recorded at end-December 2010. The total \namount paid by the Bank as interest rebate since the inception of the Scheme was \nN844.28 million. \nThe sum of N34.68 billion was disbursed to 45 projects during the period under review, \ncompared with N38.59 billion disbursed to 44 projects in the second half of 2010. This \nreflected a decline of 40.5 and 23.7 percent in value and volume, respectively. A total of \nN131.5 billion had been disbursed to 14 DMBs in respect of 148 projects at end June \n2011. \nThe sum of N199.67 billion, out of the N200 billion earmarked for the Scheme, had been \nreleased to the Bank of Industry (BOI) for disbursement to 539 projects by June 2011. \n4.5\nAccess to Finance\n4.5.1\nThe Agricultural Credit Guarantee Scheme Fund (ACGSF)\n4.5.2\nThe Agricultural Credit Support Scheme (ACSS)\n4.5.3\nThe Commercial Agricultural Credit Scheme (CACS)\n4.5.4\nThe Refinancing/Restructuring Small and Medium Enterprises \nManufacturing Fund\n35\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n4.5.5\nThe Small and Medium Enterprises Credit Guarantee Scheme (SMECGS)\n4.5.6\nThe Power and Aviation Intervention Fund (PAIF)\n4.5.7\nThe Nigerian Incentive-Based Risk Sharing System for Agricultural \nLending (NIRSAL)\n4.5.8\nMicrofinance Banking Activities\n4.5.9\nPrimary Mortgage Institutions' Activities\nTwo (2) projects valued at N120 million were guaranteed under the Scheme during the \nreview period, bringing the total amount guaranteed at end-June 2011 to N227.5 million \nfor 4 projects. \nAt end-June 2011, N41.9 billion had been disbursed for eight (8) airline projects out of \nthe N300 billion earmarked for the Scheme. No disbursements had yet been made with \nrespect to the power sector. \nThe Bank commenced the implementation of NIRSAL, aimed at encouraging banks to \nlend to the agricultural and agricultural finance value chain by offering them incentives \nand technical assistance.\nProvisional data indicated that total assets of MFBs increased to N187.17 billion at end-\nJune 2011 from the revised figure of N170.34 billion at end-December 2010, \nrepresenting a growth of 9.88 per cent. Paid-up share capital and shareholders' funds \nincreased by 7.22 and 7.77 per cent to N44.54 billion and N47.42 billion respectively at \nend-June 2011, from N41.54 billion and a revised figure of N44.00 billion respectively at \nend-December 2010. The deposit liabilities increased by 12.31 per cent to N85.06 billion \nin June, 2011, from the revised figure of N75.74 billion in December 2010. The net loans \nand advances also increased by 23.81 per cent to N65.46 billion at end-June 2011, \ncompared with the revised figure of N52.87 billion at end-December 2010. \nProvisional data showed that the total assets increased marginally to N360.02 billion at \nend-June 2011, from N358.81 billion at end-December 2010, representing a growth of \n0.34 per cent. Net loans and advances increased by 1.63 per cent to N135.05 billion at \nend-June 2011, from N132.88 billion at end-December 2010. The paid-up share capital \nand shareholders' funds also increased by 2.87 and 6.77 per cent to N64.18 billion and \nN89.21 billion, from N62.39 billion and N83.55 billion, respectively. However, deposit \nliabilities decreased by 4.90 per cent to N177.79 billion at end-June 2011, from N186.95 \nbillion at end-December2010.\n36\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n4.6\nNon-Interest Banking\n4.7\nAnti-Money Laundering/Combating the Financing of Terrorism \n(AML/CFT)\nThe CBN released the Framework and Guidelines for the Regulation and Supervision of \nNon-Interest (Islamic) Banking in Nigeria. Subsequently, the Bank granted Approvals-\nIn-Principle (AIPs) to one applicant for a full-fledged non-interest (Islamic) bank and a \nwindow to a DMB to offer non-interest (Islamic) banking products. The AIPs require the \ninstitutions to meet the prescribed conditions for the granting of a banking licence within \nsix (6) months.\nIn continuation of the Bank's efforts at combating money laundering and financing of \nterrorism, the following activities were undertaken during the period under review: \nVerification of banks' compliance with the Know-Your-Customer (KYC) \nrequirement; \nPreparation of a draft AML/CFT Risk-Based Examination and Regulation \nManuals for financial institutions;\nReview of the Intergovernmental Action Group Against Money Laundering in \nWest Africa (GIABA)'s Country Report on Nigeria for the year 2010; and \nEstablishment of an Enforcement Unit responsible for monitoring compliance.\nThe Anti-Terrorism Bill (ATB) was passed into law in the first half of 2011, while the \nMoney Laundering Prohibition Act (MLPA) was amended during the period. The Acts \ncriminalised terrorist financing and addressed issues of freezing, seizure and \nconfiscation of both laundered money and terrorist funds. \n\n\n\n\n37\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nREGULATORY AND SUPERVISORY \nACTIVITIES\n5.0\n5.1\nMacro-Prudential Supervision\n5.1.1\nFinancial Soundness Indicators (FSIs)\n5.1.1.1 Capital Adequacy\nThe Nigerian banking sector remained relatively sound as financial soundness indicators \nrevealed a sustained improvement since January 2010 (Table 10).\nThe ratio of regulatory capital to risk weighted assets was 9.9 per cent at end-June 2011, \nreflecting an increase of 2.9 percentage points above the level at end-December 2010 \nand 1.9 percentage points higher than the Basel II minimum requirement of 8.0 per cent. \nHowever, the end-June 2011 level was slightly lower than the country's benchmark of \n10.0 per cent. The ratio of tier 1 capital to risk weighted assets of 6.3 per cent at end-June \n2011 was 2.2 percentage points higher than the 4.1 per cent achieved at end-December \n2010. \n39\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nS/N\n2010 (Revised)\n2011 (Provisional)\n \n \n(1)\n(2)\n(3)\n1\n \nCapital Adequacy\n \n \nRegulatory capital to risk-weighted assets\n6.9\n7.0\n9.9\n \nTier 1 capital to risk-weighted assets\n4.4\n4.1\n6.3\n2\n \nAsset Quality\n \n \nNPLs to total loans\n \n38.3\n20.1\n11.6\n \nNPLs net provision to capital\n \n147.1\n64.2\n34.7\n3\n \nSectoral Distribution of Loans to Total \nCredits\n \n \nDeposit takers\n \n0.1\n0.1\n0.0\n \nOther financial corporation\n \n2.9\n2.8\n2.0\nOther domestic sectors\n93.4\n92.2\n92.2\nGovernment\n3.6\n4.9\n5.8\n4\nEarnings/Profitability\nReturn on equity (ROE)\n11.8\n65.4\n4.5\nReturn on assets (ROA)\n0.4\n2.1\n0.2\nInterest margin to gross income\n50.6\n46.8\n53.8\nNon-interest expenses to gross income\n60.9\n33.8\n71.3\nPersonnel expenses to non-interest expenses\n40.8\n40.8\n53.8\nForeign exchange trading gains (losses) to \ngross income\n2.1\n0.7\n3.2\n5\nLiquidity\nLiquid assets (core) to total assets\n17.7\n18.0\n23.3\nLiquid assets (core) to short-term liabilities\n19.4\n19.8\n25.7\nTable 10: Selected Financial Soundness Indicators in the Nigerian Banking Sector\n The FSIs are computed based on IMF Guidelines\n40\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nFigure 18: Banking Sector Capital Adequacy Ratios, 2010 - 2011\n5.1.1.2 Asset Quality\nThe quality of risk assets in the sector improved in the second half of 2011 as revealed by \nthe ratio of non-performing loans to total loans, which reduced to 11.6 per cent at end-\nJune 2011, from 20.1 per cent at end-December 2010. Also, the ratio of non-performing \nloans net of provisions to capital declined to 34.7 per cent at end-June 2011, from 64.2 \nper cent at end-December 2010. The improvement was mainly attributed to the purchase \nof EBAs by AMCON and improved risk management practices by banks.\nFigure 19: Banking Industry NPLs to Total Loans, 2010 - 2011\n41 \n CBN FINANCIAL STABILITY REPORT JUNE 2011\n5.1.1.3 Earnings and Profitability\nThe return on equity (ROE) dropped sharply to 4.5 per cent in the review period from \n65.4 per cent in December 2010 (Figure 21). The unusually high ROE recorded in \nDecember 2010 was as a result of the sale of EBAs to AMCON that necessitated the \nwrite-back of provisions made on those assets. Similarly, the return on assets (ROA) \ndecreased to 0.2 per cent in June 2011 from 2.1 per cent in December 2010. This decline \nwas corroborated by the rising ratio of expenses: at 71.3 and 53.8 per cent, the ratios of \nnon-interest expenses to gross income and personnel expenses to non-interest expenses \nrose by 37.5 and 13.0 percentage points, respectively, over their levels in the preceding \nhalf year.\nFigure 20: Selected Profitability Ratios of the \nNigerian Banking Industry, 2010 - 2011\n5.1.1.4 Liquidity\nIndicators revealed a sustained improvement in liquidity in the system since 2010. The \nratio of core liquid assets to total assets increased by 5.3 percentage points to 23.3 per \ncent at end-June 2011, from 18.0 per cent at end-December 2010. Similarly, the ratio of \nliquid assets to short-term liabilities increased by 5.9 percentage points to 25.7 per cent at \nend-June 2011 (Figure 22).\n42\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n5.1.2\nThe Banking Industry Stress Test\nIn accordance with a key objective of macro-prudential supervision, a stress test was \nconducted as at June 30, 2011 to identify and measure the vulnerability and resilience of \nthe industry to shocks. \nThe test result indicated that credit risk was the most significant risk faced by the banking \nindustry, followed by exchange rate risk. The industry was adjudged to be less \nvulnerable to liquidity and interest rate risks (Appendix 1) than in the previous six (6) \nmonths.\nIt is expected that the on-going reforms in the industry would address the identified \nweaknesses in the short to medium term.\nFigure 21: Banking Industry Liquidity Ratios\nCredit Risk\nLiquidity Risk\nInterest Rate Risk\nThe main vulnerability of the banks stemmed from credit risk, particularly their \nexposure to the Financial sector, the General sub-sector, and Oil & Gas Sub-sector. \nThe ratio of banking industry NPLs to gross loans stood at 14.5 per cent, while those \nof the large, medium and the small banks were 11.0, 14.9 and 26.9 per cent, \nrespectively. These figures are relatively high and any further deterioration in asset \nquality would lead to significant capital impairment.\nLiquidity risk was rated low in the banking industry as only a few banks showed \nsignificant vulnerability to liquidity shocks.\nThe results of the sensitivity analysis on “returns on assets”, and “returns on \nequity” revealed that the entire banking industry , categorised banks and individual \nbanks are less vulnerable to interest rate risk as their pre-shock positions (in terms of \ncapital impairment, ROA and ROE) declined only marginally, even after the most \nstrained shocks applied.\n43\nBox 1: Summary of Stress Test Result\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nExchange Rate Risk\nFX Trading Risk\nThe banking industry (the big, medium and small banks), was exposed to \nconsiderable foreign exchange rate risk. The impact was higher with the \ndepreciation of the Naira. The depreciation of the Naira had significant impact on \nmost banks. This was due largely to a high FX asset position relative to total risk \nweighted assets and total qualifying capital, which stood at 13.72% and 296.85%, \nrespectively. The entire banking industry, categorised and individual banks, were \nexposed to considerable exchange rate risk.\nThe banking industry showed less vulnerability to FX trading risk. The banks' \npre-shock positions, both in terms of impact on ROA and ROE changed only \nmarginally even after an induced 100% decline in FX trading income. This was \ndue mainly to the high net profit positions of the banks relative to size of the FX \ntrading income.\n5.2\nLicensing and Approvals\n5.2.1\nBureaux-de-Change\n5.2.2\nMicrofinance Banks\n5.2.3\nFinance Companies\n5.2.4\nThe New Banking Model Compliance Plan\n5.3\nSupervision of Banks and Other Financial Institutions\n5.3.1\nDeposit Money Banks (DMBs)\nIn the first half of 2011, 38 new BDCs were granted licences, bringing the total number to \n1,997.\nA total of 123 applications were received of which 28 were granted licences, while the \nremaining 95 were being processed. \nTwo (2) applications were received. One (1) was issued a licence, while the other was \ngranted an AIP status.\nApproval in Principles (AIPs) were granted to seventeen (17) of the twenty four (24) \nDMBs that submitted their compliance plans as required in the new banking model. The \nprocessing of the applications of the remaining seven (7) DMBs was deferred, pending \nthe conclusion of their recapitalisation plans. \nA Target Examination of DMBs, as at December 31, 2010, was conducted during the \n44\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nreview period to assess their asset quality and ascertain the levels of provision required in \ntheir 2010 audited financial statements. The reports noted that most of the banks had sold \nsubstantial portions of their non-performing loans (NPLs) to AMCON, thereby \nsignificantly reducing their required provisions at end-December 2010.\nExamination of the five discount houses revealed that three of them had a composite risk \nrating of “above average”, while two were rated “moderate”.\nThe risk management functions in the discount houses were rated as “needs \nimprovement” owing to weaknesses in risk management and poor corporate governance \npractices arising from weak board oversight and non-appointment of independent \ndirectors.\nThe capital of four of the discount houses was above the minimum regulatory \nrequirement. However, one discount house did not meet the minimum capital adequacy \nrequirement of 10% for the level of its operations for most of the examination period. Its \ncapital was, therefore, rated “weak”, while the capital ratings of the other four discount \nhouses were “acceptable”.\nThe earnings of three discount houses were rated as “acceptable” and two as “needs \nimprovement”. \nFollowing the revocation of the banking licences of 224 MFBs on September 24, 2010, \n121 of these were granted provisional licences as a result of fresh injection of capital and \nrecoveries of bad loans. Special examination was conducted to verify fresh capital \ninjections and compliance with the conditions for the granting of licences. The exercise \nwas carried on 119 of the 121 MFBs during the review period, while 2 were exempted \nbecause one had been acquired and the other was holding an AIP.\n \nHighlights of the examination reports include the following:\n74 or 62.2 per cent of the 119 MFBs had injected fresh capital to shore-up their \nshareholders' funds, unimpaired by losses, to meet the minimum requirement of \nN20 million;\n5.3.2\nDiscount Houses\n5.3.3\nOther Financial Institutions\n5.3.3.1 Microfinance Banks (MFBs)\n\n45\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n\n\n\n\n\n11 or 9.2 per cent of the MFBs injected additional capital which were, however, \ninsufficient to bring the shareholders' funds, unimpaired by losses, to the \nregulatory minimum level; and\n34 or 28.6 per cent of the MFBs were “technically insolvent” and “terminally \ndistressed” owing to the failure of their shareholders to inject additional capital \nnecessary to increase the shareholders' funds, unimpaired by losses, to the \nregulatory minimum of N20 million.\nFollowing the non-issuance of provisional licences to 103 of the 224 MFBs whose \nlicences were revoked in September 2010, the Nigeria Deposit Insurance Corporation \n(NDIC) commenced their liquidation and payment of insured deposits.\nDuring the review period, the Bank also commenced special examination of MFBs that \nwere classified “marginal” and “unsound”, based on the CBN/NDIC joint target \nexamination in 2010.\nThe analysis of the operational status of the licensed 101 PMIs was concluded within the \nreview period. The review led to the classification of 29 PMIs as 'sound', five (5) as \n'marginal', 18 as 'unsound' and 22 as 'insolvent'. One (1) PMI was newly licensed and not \ndue for a regulatory performance review, nine (9) were undergoing restructuring, while \n17 had closed shop. Consequently, the institutions were notified of the following \nregulatory decisions:\nPMIs classified as “marginal” were required to inject fresh capital or liquid assets \nnecessary to bring their prudential ratios within the acceptable limits.\nPMIs classified as “unsound” were, in addition to the requirement specified \nabove: prohibited from paying dividends; restricted from making new \ninvestments in fixed assets and subsidiaries without the prior approval of the \nCBN; advised to embark on aggressive loan recovery; and placed on the \nCBN/NDIC watch list.\nPMIs classified as “technically insolvent” were, in addition to the requirements \nspecified above, restricted from any new lending except to the extent of \nrecoveries made; and given a month's deadline to submit their turnaround \nbusiness plans outlining, inter alia, how fresh funds would be injected into the \ninstitutions. \nThe PMIs were required to fulfil the above conditions within six months, while a joint \nCBN/NDIC special examination was to be carried out on the technically insolvent PMIs \n5.3.3.2 Primary Mortgage Institutions (PMIs)\n46\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nat the expiration of the deadline. The examination was programmed preparatory to the \nrevocation of the licence and takeover for NDIC liquidation of the institutions that failed \nto actualize their turn-around plans. \nNotice of intent to revoke the licences of the PMIs that had closed shop would be \npublished, while members of the public would be allowed to express objections within a \nperiod of 90 days, as specified by the relevant banking laws of Nigeria.\nIn order to stabilise and reduce overheads as well as comply with the new banking model, \nthree (3) Nigerian banks were granted approval to either divest or close their foreign \nsubsidiaries, while one other was granted approval to discontinue the process of \nestablishing a foreign subsidiary. \nSome central banks in the region increased the minimum capital requirement of banks in \ntheir jurisdictions during the review period. As a result, Nigerian banks with subsidiaries \nin the zone were granted approval to comply with the new capital requirements. \nThe third meeting of the College was held at the Central Bank of Nigeria, Abuja, from 8th \nto 9th February 2011, while the fourth meeting was held at the Central Bank of The \nGambia, Banjul, from 1st to 3rd June 2011. Some of the decisions reached at the \nmeetings include the following:\nThe decision of the Committee of Governors of ECOWAS at its meeting held in \nDakar, to admit BCEAO and Cape Verde to join the CSWAMZ on an observer \nstatus was noted and adopted;\nRegulatory reports should be standardised;\nSupervisory processes in the Zone should be harmonised to prevent regulatory \narbitrage;\nMembers should adopt the electronic Financial Analysis and Surveillance \nSystem (e-FASS) as a supervisory tool; \nMembers were urged to implement the RBS, the IFRS, the Basel II and the Basel \nCore Principles for Effective Banking Supervision; and\nFinancial Stability Report should be produced for the Zone.\n5.4\nCross-border Supervision\n5.4.1\nClosure of Foreign Subsidiaries\n5.4.2\nCapital Augmentation for Banks in West Africa\n5.4.3\nThe College of Supervisors of the West African Monetary Zone (CSWAMZ)\n\n\n\n\n\n\n47\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nThe achievements of the College during the review period include the following:\nCapacity building initiatives on IFRS and a Foundation Course on Banking \nSupervision held in April and June 2011, respectively;\nCreation of a portal by WAMI for information-sharing among supervisors;\nDevelopment of a framework on corporate governance for banks and other \nfinancial institutions to strengthen supervisory standards; and\nApproval for the conduct of joint examinations in The Gambia, Ghana, Guinea \nand Sierra Leone by Nigeria and the host supervisors in order to further \nstrengthen cross-border supervision.\nDuring the review period, the CBN signed four MoUs with the Central Bank of Kenya, \nthe National Bank of Rwanda, the Bank of Zambia and Banking Commission of the West \nAfrican Monetary Union (BCEAO), bringing the total number of such memoranda to 12.\nThe FSRCC embarked on a number of initiatives, including the following:\nDeveloping a website, www.fsrcc.gov.ng, to create public awareness of the \ncollaborative efforts of member agencies;\nDrafting a framework for consolidated supervision and examination of financial \nconglomerates; and\nCommissioning studies on the effect of the bond market on the financial \nsoundness of investing banks and the impact of AMCON on the performance of \nbanks and the capital market.\nThe supervisory challenges that were faced during the period centred on the efforts to \nmanage the lingering effects of the global economic and financial crises and the Bank's \nsubsequent intervention in some deposit money banks. The challenges are highlighted \nhereunder, in sub-sections 5.6.1 to 5.6.7. \nDespite various interventions by governments and central banks to address the effects of \nthe global financial and economic crises, recovery had been slow. In Nigeria, the \nchallenges to achieve sustained recovery included the following: \nContaining inflation exacerbated by the quantitative easing and an \n\n\n\n\n\n\n\n\n5.4.4\nMemoranda of Understanding (MoUs)\n5.5\nThe Financial Services Regulation Coordinating Committee (FSRCC)\n5.6\nSupervisory Challenges\n5.6.1\nTowards Recovery from the Global Economic and Financial Crises\n48\n CBN FINANCIAL STABILITY REPORT JUNE 2011\naccommodating monetary policy stance adopted in response to the global \nfinancial crisis;\nRecovery of credits granted for capital market transactions and to the oil and \ngas sector;\nEncouraging banks to lend to the real sector of the economy;\nAttracting foreign investment; and \nMaintaining exchange rate stability in the face of negative real interest rates and \npersistent demand pressure.\nThe challenges faced in the area of corporate governance persisted, although they were \nless serious. The observed improvement was due largely to the resolute enforcement of \nthe provisions of the Code of Corporate Governance for Banks in Nigeria, with the \nstrong cooperation of other stakeholders, including the law enforcement agencies and \nthe judiciary. \nThe inadequacy of the legal framework constituted a major factor which undermined the \neffectiveness of supervision, especially in the area of regulatory interventions. \nMeanwhile, an Anti-Terrorism Act was enacted while the Money Laundering \n(Prohibition) Act of 2004 was amended during the period under review. Efforts are also \nbeing intensified to amend the Banks and Other Financial Institutions Act, 1991.\nIn order to promote data integrity, a proposal to design and install a system that would be \nused to carry out forensic checks on banks' applications was being considered. \nMeanwhile the Approved Persons' Regime in Banks was approved and is being \nimplemented. Furthermore, the electronic Financial Analysis and Surveillance System \n(eFASS), the main platform used by Financial Institutions for the rendition of returns to \nthe supervisory authorities is being reviewed with the support of the developers to bring \non stream identified user requirement modules. \nThe adoption of the RBS and Consolidated Supervision methods in the supervision of \nfinancial institutions has faced some challenges in terms of the skills required for their \nsuccessful implementation. The CBN, therefore, has embarked on the training and \n\n\n\n\n5.6.2\nWeak Corporate Governance\n5.6.3\nInadequate Legal Framework\n5.6.4\nData Integrity\n5.6.5\nInadequate Supervisory Capacity\n49 \n CBN FINANCIAL STABILITY REPORT JUNE 2011\nretraining of staff, especially in the areas of risk-based supervision and consolidated \nsupervision to address the challenges. \nIn order to address concerns over the growing complexity in the products and operations \nof financial institutions in Nigeria, a number of initiatives have been adopted and are \nbeing implemented. These include: the new banking model to ring-fence banks from \nrisks arising from non-bank businesses; the strengthening of the supervisory processes \nthrough the RBS and consolidated supervision; intensification of efforts aimed at \nimproving corporate governance and risk management practices in supervised \ninstitutions; and the signing of MoUs with some countries to streamline areas of \ncooperation for effective supervision. \nThe CBN intensified efforts to check the menace of illegal Fund Managers, otherwise \nknown as “wonder banks”, which continued to pose a challenge to the financial sector \nduring the review period. In this regard, the CBN sustained its extensive media campaign \nembarked upon since December 2010, using the print and electronic media as well as \nmobile telephony to caution the public on the activities of illegal Fund Managers. Banks \nwere also made to refund the amounts illegally withdrawn from the accounts of “wonder \nbanks” maintained with them after the judgment of the Investment and Securities \nTribunal and to transfer same to an escrow account in the CBN. In addition, a \nsurveillance team was constituted to monitor and close down offices of illegal Fund \nManagers once they are identified. Also, the consent of the Attorney General of the \nFederation was obtained for the courts to appoint Liquidators for the 30 “wonder banks” \nthat accounted for about 50 per cent of the total deposits illegally mobilized from the \npublic. Furthermore, the EFCC/SFU commenced criminal proceedings against some \noperators of “wonder banks”.\n During the review period, the Bank received 682 complaints, bringing the total to 2,742 \nfrom March 1, 2010 to end-June 2011. The complaints are mostly on excess charges, \nfraudulent withdrawals, non-crediting of accounts, cheque conversions, among others. \nOf the complaints received in the review period, 610 or 89.44 per cent had been \nprocessed, resulting in the refund of N1.68 billion. The total number of complaints \n5.6.6\nGrowing Complexity in the Operations of Financial Institutions\n5.6.7\nThe Activities of Illegal Finance Operators in the Economy\n5.7\nConsumer Protection\n50 \n CBN FINANCIAL STABILITY REPORT JUNE 2011\nprocessed, so far stood at 2,652 or 96.72 per cent, while total refunds, so far amounted to \nN3.96 billion, US$198,118.75, and €10,000. \nWith the planned adoption of the International Financial Reporting Standards (IFRS) by \nNigerian banks in 2012, the CBN issued a Guidance Document on the IFRS during the \nreview period. Banks were required to submit quarterly progress reports on their IFRS \nimplementation efforts. Surveillance activities would, therefore, focus on ensuring a \nseamless transition from the NGAAP+ to the IFRS.\nIn order to promote financial stability, supervisory activities in the second half of 2011 \nwill focus on strengthening the Financial Stability Committee (FSC), in conjunction \nwith other bodies through the FSRCC, on the identification of early warning signals on \nsystemic distress. The implementation of the revised banking model that requires banks \nto divest from their non-banking subsidiaries and the framework for the regulation of the \nCredit Bureau will also be in focus and be closely monitored.\nThe activities of the AMCON will aim at ensuring that banks' NPL ratios are kept below \nthe prudential maximum of 5.0 per cent. The CBN will also ensure that strategic \ninvestors in the intervened banks entrench good corporate governance and risk \nmanagement practices.\n5.8\nThe Focus of Supervision\n51\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nTHE NIGERIAN PAYMENTS SYSTEM\n6.0\nConsistent with the objectives of the Payments System Vision 2020, the Bank adopted \npayment policies that focused on migration from a cash-based to an e-payment-driven \nsystem. In addition, circulars and guidelines were issued towards promoting the \nefficiency, safety and reliability of the payments system.\nThe implementation of the PSV 2020 recorded additional achievements in the first half \nof 2011, as the CBN took the following measures:\nCommissioned an independent audit of 16 mobile payment schemes which were \non a pilot run, pursuant to the issuance of final operating licences;\nSensitised stakeholders on the Approved Direct Debit rules to facilitate the use of \nelectronic consumer bill payments; \nIssued guidelines on the initiatives listed below to improve public confidence in \nthe payments system:\no\nElectronic payment of taxes,\no\nElectronic payment of salaries and pensions by organizations with more \nthan 50 employees, and\no\nElectronic payment of government suppliers;\nCommenced the upgrade of the Real-Time Gross Settlement (RTGS) System to \nmeet the requirements of FSS 2020;\nDirected banks to implement the 10-digit Nigeria Uniform Bank Account \nNumber (NUBAN) with a transition period of one year ending June 1, 2012. The \nNUBAN is expected to reduce the:\no\nVolume of unprocessed transactions due to wrong account numbers,\no\nNumber of postings to wrong accounts by receiving banks, and\no\nIncidence of delayed presentation of Automated Clearing House (ACH) \nitems. \nThe CBN adopted the following initiatives to enhance the Nigerian Payments System: \nFixed a daily cumulative limit of N150,000 for individual customers and \nN1,000,000 for corporate customers on cash withdrawals effective June 1, 2012. \nHowever, withdrawals above these limits would attract charges. The pilot run \n6.1\nThe Payments System Vision 2020 (PSV 2020)\n6.2\nDevelopments in the Payments System\n\n\n\n\n\n\n53\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nwould commence in Lagos State, the Federal Capital Territory (FCT), Kano, \nPort-Harcourt, and Aba from January 2, 2012. The above measure was \nintroduced to reduce the high dominance of cash in payments transactions and \nthe concomitant high and unsustainable currency issue and management \nexpenses, thereby promoting the use of more cost-effective non-cash payment \nmodes: \nOver-the-counter encashment of third party cheques above N150,000 would be \ndisallowed, with effect from June 1, 2012 when value for such cheques shall only \nbe received through clearing;\nCash-in-transit (CIT) lodgement services rendered to merchant customers by \nbanks shall cease from June 1, 2012. However, customers could engage the \nservices of CBN-licensed CIT companies to facilitate cash movements to and \nfrom their banks at mutually agreed terms and conditions;\nProhibited exclusive acquirer contracts for card schemes to enhance \ninteroperability, with effect from June 2011; \nMassive deployment of Point of Sale (POS) terminals under the shared service \nproject with a view to reducing the cost of operations; and\nApproved, in principle, a strategic alliance with the Nigerian Postal Service \n(NIPOST) to integrate the Post into the payments system by offering branchless \nbanking to reach the remote parts of the country. \nThese initiatives were expected to promote confidence in the system, enhance efficiency, \nimprove customer convenience and facilitate financial inclusion.\nThe volume and value of inter-bank transactions through CBN's RTGS System (CBN \nInter-bank Funds Transfer System - CIFTS) increased to 223,959 and N53,146.82 \nbillion, respectively, in the first half of 2011, from 190,138 and N49,640 billion in the \nsecond half of 2010, reflecting growth rates of 17.79 and 7.06 per cent, respectively \n(Figure 23).\n\n\n\n\n\n6.2.1\nThe Real-Time Gross Settlement (RTGS) System\n54 \n CBN FINANCIAL STABILITY REPORT JUNE 2011\n0\n50,000\n \n100,000\n \n150,000 \n200,000\n \n250,000\nDec\n-2010\nJune\n- 2011\nValue (N\nVolume\nFigure 22: CBN's RTGS Transactions, July 2010 - June 2011\n6.2.2\nCheque Clearing\nIn the first half of 2011, the volume and value of cheques cleared declined by 12.30 and \n4.74 per cent to 16,188,775 and N9,919.05 billion, respectively, from 18,458,480 and \nN10,412.12 billion recorded in the second half of 2010 (Figure 23). The decline was \nattributed to increased use of other modes of payment, such as RTGS, NIBSS Inter-bank \nFunds Transfer (NEFT), Automated Teller Machines (ATMs), mobile banking, and \ninternet payments, among others.\n \n \n0\n \n2,000,000\n \n4,000,000\n \n6,000,000\n \n8,000,000\n \n10,000,000\n \n12,000,000\n \n14,000,000\n \n16,000,000\n \n18,000,000\n \n20,000,000\nDec\n- 2010\nJune\n- 2011\nValue\n \n(N\nVolume\n \nFigure 23: Volume and Value of Cheques Cleared, July 2010 - June 2011\nThe volume and value of electronic card (e-card) transactions increased to 167,962,665 \nand N764.14 billion during the first half of 2011, from 106,739,822 and N610.22 \nbillion, respectively, during the second half of 2010, reflecting increases of 57.36 and \n25.22 per cent, respectively (Figure 24). The growth was attributed to enhanced public \nconfidence in card payments, following the enhanced security features in the cards and \nadoption of stringent measures to combat fraud and deepen the use of electronic \npayments. \n55\n6.2.3 Electronic Card Payments\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nFigure 24: Electronic Card Transactions, July 2010 - July 2011\nAvailable data on various e-payment channels for the period under review indicated that \nATMs remained the most patronized, accounting for 98.09 per cent of the number of \ntransactions, followed by the Web (Internet) 0.72 per cent, and Mobile 0.71 per cent. The \nPoint-of-Sale (POS) terminal was the least patronised, accounting for 0.48 per cent of \ntotal e-payment transactions (Figure 25).\nFigure 25: Volume of Electronic Card Transactions, January - June 2011\nSimilarly, in value terms, ATMs accounted for 91.37 per cent, the Web (Internet) 6.04 per \ncent, POS 1.67 per cent, while Mobile payments accounted for 0.92 per cent (Figure 26).\n56\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nFigure 26: Value of Electronic Card Transactions, January - June 2011\n6.2.4\nAutomated Teller Machine (ATM) Transactions\n6.2.5\nMobile Banking\n6.3\nPayments System Challenges\nThe number of ATMs deployed stood at 9,443 at end-June 2011. The increase in the use \nof ATMs continued during the first half of 2011, with the volume and value of \ntransactions amounting to 164,755,055 and N698.19 billion, respectively. These figures \nreflected increases of 60.57 and 27.74 per cent over the volume and value of \n102,608,918 and N546.55 billion, respectively, recorded in the second half of 2010.\nThe volume and value of payments through the mobile banking channel increased by \n60.96 and 60.09 per cent to 1,195,459 and N7.06 billion, respectively, in the period \nunder review, from 742,694 and N4.41 billion in the second half of 2010. \nDespite the progress recorded so far, the following challenges persisted, among others:\nHigh transaction costs,\nHigh dependence on cash transactions,\nHigh level of illiteracy,\nLow level of nternet access,\nInadequate inter-connectivity and inter-operability,\nLow level of public awareness of the existence of some non-cash payment \nproducts, resulting in under-utilisation of e-payments solutions, \nHigh concentration of e-payment facilities in urban centres,\nPoor state of infrastructure,\nHigh incidence of electronic fraud, \nLarge informal sector where cash is the only acceptable means of payment and \nlack of transparency and audit trail associated with cash transactions, and\nHigh level of money laundering risks and vulnerabilities.\nIt is expected that the full implementation of the PSV 2020 project and other on-going \nreforms would significantly address these challenges.\n\n\n\n\n\n\n\n\n\n\n\n i\n57\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n7.0\nPRESERVING THE INTEGRITY OF THE \nFINANCIAL SYSTEM\n7.1\nThe Asset Management Corporation of Nigeria (AMCON)\n7.2\nThe Implementation of International Financial Reporting Standards \n(IFRS)\n7.3\nUpdate on Credit Information Bureaux\n7.3.1\nCBN's Credit Risk Management System (CRMS)\nThe Corporation continued to play significant roles in stabilizing the financial system \nthrough the acquisition of EBAs. At end-June 2011, three tranches of bonds amounting \nto N1,811 billion had been issued in exchange for EBAs valued at N2,827 billion. These \nresulted in:\nImproved NPL/TL ratio\nImproved liquidity to the banking industry\nImproved banks' capital\nIncreased lending by banks\nEnhanced earning opportunities to the banks through the bond income; and\nImproved confidence in the banking industry\nDuring the period under review, a number of actions were taken by the CBN towards the \nimplementation of the IFRS. These included:\nIssuance of a circular on the conversion of end-2010 financial statements to the \nIFRS-based figures;\nSetting up of six workgroups on Gap/Impact Analysis, Information Technology, \nInternal Reporting, Mobilisation, Sensitisation & Administration, Capacity \nBuilding, and Legal & Legislative Review; and\nReview of the IFRS implementation plan.\nAlthough appreciable progress has been made to prepare the sector for the IFRS \nadoption, additional work is required to meet the target reporting date of January 2012.\nThe CBN, through its CRMS, recorded a remarkable improvement in the management \nof basic credit information on customers, thereby enhancing credit administration and \nthe quality of risk assets.\nThe number of registered borrowers in the CRMS database grew by 2.20 per cent, from \n\n\n\n\n\n\n\n\n\n59\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n73,189 in December 2010 to 74,786 at end-June 2011. Similarly, the number of \nborrowers with outstanding credit facilities of N1 million and above grew by 1.8 per \ncent, from 26,367 in December 2010 to 26,854 in June 2011, while the number of \noutstanding credit facilities rose by 4.4 per cent, from 32,557 to 33,975 in the same \nperiod. However, the value of total outstanding credits declined by 0.25 per cent, from \nN5,240 billion at end-December 2010 to N5,227 billion at end-June 2011(Figure 27).\nFigure 27: Selected CRMS Statistics, 2010 2011\nThe growth in the number of registered borrowers and credit facilities was largely driven \nby two factors: \nImproved appreciation among banks and their customers on the critical role of \nthe CRMS; and\nIncreased co-operation among stakeholders.\nThe decrease in total outstanding credit is attributed to the sale of non-performing loans \nto AMCON.\nThe number of private credit bureaux remained at three during the period under review, \nand their activities continued to complement CBN's Credit Bureau (CRMS). Their \nactivities were buoyed by increased demand for borrower/customer credit information \nand status enquiries by financial and non-financial entities.\nThe range of products and services provided by the PCBs were:\nCustomer identity verification,\nCredit reports,\nSelf-enquiry,\nBulk portfolio review,\n\n\n\n\n\n\n7.3.2\nPrivate Credit Bureaux (PCBs)\n60\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n\n\n\n\n\n\n\n\n\nCredit scoring and rating, and\nReferencing and credit risk assessment.\nThe challenges faced by the PCBs included:\nLow public awareness on the importance of their operations;\nLack of an acceptable unique identifier;\nInadequate skilled manpower; and\nLong turnaround time for the resolution of disputes.\nThe Financial System Strategy 2020 (FSS 2020) was initiated to make Nigeria's \nfinancial services industry serve as a catalyst for the growth and development of Nigeria \ninto an international financial centre and the transformation of Nigeria into one of the \nworld's 20 largest economies by 2020.\nThe activities of the FSS 2020 included the following:\nLegislative Engagement: The FSS 2020 Secretariat intensified its legislative \nengagement for the consideration of the following bills by the National \nAssembly the Nigeria International Financial Centre Bill, the Financial \nOmbudsman Bill, the Electronic Transactions Bill and the Alternative Dispute \nResolution Commission Bill. These bills seek to enhance the legal framework \nfor the sustenance of financial stability in Nigeria.\nRisk-Based Supervision (RBS): The Secretariat facilitated the formation of a \nProject Management Group for the implementation of RBS in the financial \nsystem.\nInternational Financial Reporting Standards (IFRS): The FSS 2020 Secretariat \nestablished the Regulators' Forum for the harmonization and standardization of \ninstitutional roadmaps on the implementation of IFRS in Nigeria. \nThe Secretariat will continue to provide a platform for the successful implementation of \nthe FSS 2020.\n7.4\nThe Financial System Strategy 2020 (FSS 2020)\n61\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n8.0\nCONCLUSION \nThe promotion of a sound and stable financial system remained a core mandate of the \nCBN. This mandate is critical to the achievement of government's broad macroeconomic \nobjectives of maintaining price stability, a favourable balance of payments, low \nunemployment, and sustainable economic growth and development.\nIn order to ensure the effectiveness and efficiency of the financial system, the CBN \ncontinued to embark on a systematic review of relevant regulations, guidelines and \nsupervisory methodologies towards addressing the challenges of data integrity, \nregulatory enforcement, corporate governance, and risk management. The Bank also \npursued the amendment or enactment of related enabling legislation to strengthen the \nregulatory and supervisory framework for the financial system.\nThe state of the intervened banks and their prolonged recapitalisation process gave rise \nto a number of vulnerabilities and weaknesses which posed threats to the stability of the \nfinancial system. Despite these challenges, the quality of banking industry risk assets \nimproved modestly, owing mainly to the activities of AMCON, the implementation of a \nrisk-based supervision framework, improved risk management practices in the DMBs, \nand the provision of real sector intervention funds by the Bank. Activities in the capital \nmarket were also influenced positively by improved liquidity and the successful conduct \nof the 2011 general elections.\nAs part of the efforts to enhance transparency in financial reporting, the CBN issued a \nGuidance Document on IFRS during the review period, requiring banks to submit \nquarterly progress reports of their IFRS implementation efforts towards the adoption of \nthe Standards by 2012. \nIn promoting financial stability, supervisory activities in the second half of 2011 will \nfocus on the implementation of the revised banking model and the framework for the \nregulation of the credit bureaux; re-capitalization of the intervened banks; good \ncorporate governance and risk management practices; and strengthening the Financial \nStability Committee (FSC) with the FSRCC for the identification of systemic distress \nearly warning signals. \n63\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nIn view of the commitment of the Federal Government to the on-going economic and \nfinancial reforms, the economy is expected to record modest growth in the second half of \n2011. Inflationary pressure is also expected to be contained, in view of the tight monetary \npolicy stance of the Bank, while the exchange rate would be expected to remain \nrelatively stable. \nOverall, the current initiatives aimed at increased productivity in the real sector and \nreforms in the other sectors are expected to impact positively on the economy.\n64\n CBN FINANCIAL STABILITY REPORT JUNE 2011\na)\nTechnical Terms\nConcentration Ratio (CR)\nCredit Risk \nCredit risk \nHerfindahl-Hirschman Index (HHI)\nLiquidity Risk\nLiquidity risk \nMarket Capitalization\nMarket Risk\nMarket risk\nMoney Supply \nOperational Risk\nOperational risk \nThis is the percentage market share attributable to a given number of firms in an industry, \ne.g., CR6 means the market share of the largest six firms.\nis an investor's risk of loss arising from a borrower who does not make \npayments as promised. Another name for credit risk is 'default risk'.\nThis is a measure of market concentration. It is calculated by squaring the market share \nof each firm competing in the market and then summing up the resulting numbers.\nis the risk that a given security or asset cannot be traded quickly enough in \nthe market to prevent a loss (or make the desired profit).\nThis is the total market value of a company's issued shares. Market capitalization is \ncalculated by multiplying number of a company's shares outstanding by the current \nmarket price of the shares. \n is the risk that the value of an investment portfolio, or a trading portfolio, \nwill decrease as a result of changes in either rates or prices or a combination of rates and \nprices.\nThe total money in circulation in an economy of a given country at a given time. \nis the risk arising from the execution of a company's business \nfunctions. It is a very broad concept which focuses on risks arising from the people, \nsystems and processes through which a company operates.\nGLOSSARY\n65\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nReputational Risk\nReputational risk \nb)\nOrganizations in Nigeria's Financial Sector\nThe Asset Management Corporation of Nigeria (AMCON)\nThe Central Bank of Nigeria\nThe Debt Management Office (DMO)\nThe National Insurance Commission (NAICOM) \nThe National Pension Commission (PENCOM)\nThe Nigeria Deposit Insurance Corporation (NDIC)\nThe Nigerian Stock Exchange (NSE) and the Abuja Securities and Commodities \nExchange (ASCE)\nis any risk to an organization's reputation that is likely to destroy \nshareholder value.\nAMCON was established through the AMCON Act of 2010, with responsibility for the \nacquisition, management and disposal of the non-performing assets of Nigerian banks.\nThe CBN regulates deposit money banks (DMBs) and other financial institutions \n(OFIs), namely, primary mortgage institutions (PMIs), bureaux-de-change (BDCs), \nmicrofinance banks (MFBs), finance companies (FCs), discount houses (DHs), and \ndevelopment finance institutions (DFIs). \nThe DMO is responsible for the management of public debt in Nigeria. \nNAICOM is responsible for the regulation and supervision of the insurance sub-sector. \nPENCOM is the regulatory agency charged with the oversight responsibility for pension \nfund custodians and pension fund administrators in Nigeria, under the Pension Reform \nAct of 2004. \nThe primary responsibility of the NDIC is the insurance of depositors' funds in DMBs \nand other insured financial institutions. In addition to complementing the supervisory \nefforts of the CBN, the Corporation liquidates failed financial institutions. \nThese are the two exchanges in the Nigerian capital market. The NSE has authority over \nthe securities' trading rules and regulations, while the ASCE superintends commodities \ntrading.\n66\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nThe Securities and Exchange Commission (SEC)\nThe Securities and Exchange Commission is the regulator of the Nigerian capital \nmarket. \n67\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nAppendix 1: Result of the Banking Industry Stress Test at end-June 2011\nMinimum Regulatory CAR :10%\n \nAll banks \n(24)\n \nLarge \nbanks \n(6)\n \nMedium-\nsized \nbanks(8)\n \nSmall \nbanks \n(10)\nPre-shock CAR \n4.62\n \n11.93\n \n4.05\n \n-17.32\n \nShock 1ai (10%NPLs increase)\n \n3.95\n \n11.45\n \n3.32\n \n-18.61\n \nShock 1aiii (20% NPLs \nincrease) \n \n3.28\n \n10.97\n \n2.58\n \n-19.92\n \nShock 1av (50% NPLs increase) \n \n1.19\n \n9.50\n \n0.29\n \n-24.06\n \nShock 1avii (200% NPLs \nincrease) \n \n-10.78\n \n1.37\n \n-12.99\n \n-49.88\n \nShock 1bi (shift 20%)\n \n4.03\n \n11.49\n \n3.28\n \n-18.11\nShock 1biii (shift 100%)\n \n2.08\n \n10.10\n \n0.95\n \n-21.33\n \n2ai -\n \nSingle biggest corporate \nobligor credit facilities shifted \nfrom Pass -through to Sub -\nstandard (10%)\n \n4.17\n \n11.48\n \n3.60\n \n-17.77\n69\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n2aiii- Single biggest corporate obligor \ncredit facilities shifted from Doubtful \nto Lost (100%)\n \n-0.08\n7.30\n-0.67\n-21.98\n2bii-\n \nFive biggest corporate obligor \ncredit facilities shifted from Sub -\nstandard to Doubtful (50%)\n \n-3.02\n \n4.70\n \n-3.68\n \n-25.86\n \n \n \n \nShock 3aii (Oil & Gas) 50% \n3.97 \n11.34 \n3.41\n -18.21\n \n \n \n \nShock 3bii (Public Utilities 20% \ndefault) \n \n4.62\n \n11.93\n \n4.05\n \n-17.33\nShock 3biv (Public Utilities 100% \ndefault) \n \n4.61\n \n11.93\n \n4.05\n \n-17.36\nShock 3ci (General sector 20% \ndefault)\n \n4.38\n \n11.74\n \n3.86\n \n-17.88\n70\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nShock 3ciii (General sector 100% \ndefault)\n \n3.42\n11.01\n3.09\n-20.17\nShock 3di (100% Gen com becomes \nNPLs)\n \n4.11\n \n11.62\n \n3.35\n \n-18.21\nShock 3diii (100% Gen com becomes \nNPLs)\n \n2.00\n \n11.93\n \n0.45\n \n-21.92\nShock 3ei (Fin services 20%) \n4.04 \n11.50 \n3.19\n -19.12\nShock 3eiii (Fin services 100%) \n1.64 \n9.73 \n2.28\n -26.56\nShock 3fi (10% default in exposure to \nReal Estate)\n \n4.33 \n11.73 \n3.35\n -18.21\nShock 3fiii (30% default in exposure \nto Real Estate)\n \n3.17\n \n10.94\n \n2.82\n \n-21.18\nShock 3fv (100% default in exposure \nto Real Estate)\n \n3.17\n \n10.94\n \n2.82\n \n-21.18\nShock 3gi (10% default in exposure \nto Aviation)\n \n4.56\n \n11.84\n \n4.04\n \n-17.39\n71\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nShock 3giii (50% default in exposure \nto Aviation)\n \n4.31\n \n11.49\n \n4.01\n \n-17.69\n \n \n \n \nShock 3hii (50% default in exposure \nto Information and Communication) \n2.55\n \n10.35\n \n1.37\n \n-19.88\n \n \n \n \nShock 3kii (20% default in exposure \nto Power and Energy)\n \n4.51 \n11.83 \n3.87\n -17.36\nShock 3kiii (50% default i n exposure \nto Power and Energy)\n \n4.04\n \n11.45\n \n3.16\n \n-17.53\n \n \n \n \nShock 3lii (20% default in exposure \n4.39\n11.77\n3.92\n-18.07\n72\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nShock 3lii (20% default in ex\nposure \nto Capital Market)\n \n4.39\n11.77\n3.92\n-18.07\nShock 3liv (100% default in exposure \nto Capital Market)\n \n3.46\n \n11.15\n \n3.36\n \n-21.21\nShock 3mi (20% default in exposure \nto Government)\n \n4.33\n \n11.67\n \n3.85\n \n-17.97\nShock 3miii (100% default in \nexposure to Government) \n3.13 \n10.62 \n3.05\n -20.63\nShocks/Impact on CAR \n \n \n \n \nShock 4aii (20% depreciation against \nthe Naira)\n \n7.24 \n15.47 \n5.68\n -15.70\nShock 4bi (10% appreciation against \nthe Naira)\n \n3.31\n \n10.15\n \n3.24\n \n-18.13\nShock 4biii (50% appreciation against \nthe Naira)\n-1.92\n \n3.06\n \n-0.01\n \n-21.36\n73\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n \nInterest Rate\n \n \n \n \n \nShock 5ai (200bps upward parallel \nshift in yield curve)\n \n4.61\n \n12.04\n \n3.90\n \n-17.45\nShock 5aiii (500bps upward parallel \nshift in yield curve)\n \n4.59\n \n12.21\n \n3.66\n \n-17.65\nShock 5bi (200bps downward parallel \nshift in yield curve)\n \n4.63 \n11.81\n \n4.21\n -17.18\nShock 5biii (500bps downward \nparallel shift in yield curve) \n4.65 \n11.64 \n4.44\n -16.98\nInitial ROA \n \n6.17\n \n6.01\n \n6.04\n \n6.96\nImpact of Parallel Shift in Yield Curve \nShocks on ROA\n \n \n \n \n \nROA after:\n \n \n \n \n \nShock 5ai (200bps upward parallel shift \nin yield curve)\n \n6.16\n \n6.09\n \n5.92\n \n6.86\nShock 5aii (400bps upward parallel shift \nin yield curve)\n6.16\n \n6.17\n \n5.88\n \n5.93\n74\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nShock 5aiii (500bps upward parallel shift \nin yield curve)\n \n6.15\n6.21\n5.74\n6.72\nShock 5aiv (1000bps upward parallel \nshift in yield curve)\n \n6.13\n \n6.41\n \n5.43\n \n6.47\nShock 5bi (200bps downward parallel \nshift in yield curve)\n \n6.18\n \n5.93\n \n6.16\n \n7.06\nShock 5bii (400bps downward parallel \nshift in yield curve)\n \n6.19\n \n5.85\n \n6.28\n \n7.15\nShock 5biii (500bps downward parallel \nshift in yield curve)\n \n6.20\n \n5.81\n \n6.34\n \n7.20\nShock 5biv (1000bps downward parallel \nshift in yield curve)\n \n6.22\n \n5.61\n \n6.64\n \n7.45\nShock 5biv (1000bps downward parallel \nshift in yield curve)\n379.83\n \n575.90\n \n430.85\n \n186.96\n75\n CBN FINANCIAL STABILITY REPORT JUNE 2011\n \n \n \nInitial LR\n \n47.9%\n \n52.9%\n \n43%\n \n54.4%\n \nShock 6ai (Gen run 10 %)\n \n29.83%\n \n34.98%\n \n14.43%\n \n42.85%\nShock 6aiv (Gen run 25%)\n \n13.86%\n \n19.15%\n \n-3.36%\n \n30.37%\nShock 6bi (Run on ST Dep 20%) \n31.26% \n35.86%\n \n16.39%\n \n44.86%\nShock 6biii (Run on ST Dep 50%) \n19.03% \n22.44%\n \n3.50%\n 37.33%\nShock 6ci (Run on LT Dep 20%) \n28.34% \n34.08%\n \n34.08%\n 40.68%\nShock 6ciii (Run on LT Dep 50%) \n7.99% \n15.56%\n \n15.56%\n 21.65%\nShock 6di (10% Run on LT and 20% on ST \nDep)\n \n26.03%\n \n30.95%\n \n10.34%\n \n40.37%\nShock 6diii (20% Run on LT and 50% on \nST Dep)\n \n2.84%\n \n6.32%\n \n-14.32%\n \n24.40%\nShock 6eii (50% Run on largest Deposit)\n35.10%\n40.17%\n21.98%\n \n44.88%\n76\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nShock 6fi (5% Run on 5 largest Deposits)\n \n37.09%\n \n42.09%\n \n22.86%\n \n48.28%\nShock 6fiii (15% Run on largest Deposits)\n \n36.15%\n \n41.26%\n \n22.12%\n \n46.90%\nShock 6gi (5% Run on 10 largest \nDeposits)\n \n31.93%\n \n37.53%\n \n16.12%\n \n44.05%\nShock 6gii (10% Run on 10 largest \nDeposits)\n \n25.20% \n31.63%\n \n7.56%\n \n38.12%\nShock 6giii (15% Run on 10 largest \nDeposits)\n \n17.00% \n24.50%\n \n-2.95%\n 30.78%\nShock 6hi (5% Run on 20 largest \nDeposits)\n \n30.95% \n36.82%\n \n14.87%\n 42.79%\nShock 6hii (10% Run on 20 largest \nDeposits)\n \n22.80% \n29.92%\n \n4.46%\n 34.93%\nShock 6hiii (15% Run on 20 largest \nDeposits)\n \n12.46% \n21.32%\n \n-8.84%\n \n24.58%\n \n \n \nImpact of FX Trading Shocks on ROA\n \n \n \n \nInitial ROA\n \n6.17\n \n6.01\n \n6.04\n \n6.96\n \nFX Trading Income Volatility\n \n \n \n \n \nShock 7ai (10% decline in FX trading \nIncome)\n \n6.15\n \n5.99\n \n6.02\n \n6.92\nShock 7aii (20% decline in FX trading \nIncome)\n6.12\n \n5.96\n \n5.99\n \n6.89\n77\n CBN FINANCIAL STABILITY REPORT JUNE 2011\nShock 7aii (20% decline in FX trading \nIncome)\n \n6.12\n \n5.96\n \n5.99\n \n6.89\nShock 7aiii (50% decline in FX trading \nIncome)\n \n6.04\n \n5.88\n \n5.93\n \n6.78\nShock 7aiv (100% decline in FX trading \nIncome)\n \n5.91\n \n5.75\n \n5.82\n \n6.61\n \n \n \nImpact of FX Trading Shocks on ROE \n \n \n \nInitial ROE\n \n376.95 \n617.13 \n391.66\n 174.70\nFX Trading Income Volatility \n \n \n \n \nShock 7ai (10% decline in FX trading \nIncome)\n \n375.36 \n614.48 \n390.23\n 173.82\nShock 7aii (20% decline in FX trading \nIncome)\n \n373.76 \n611.84 \n388.81\n 172.95\nShock 7aiii (50% decline in FX trading \nIncome)\n \n368.98\n \n603.90\n \n384.54\n \n170.32\nShock 7aiv (100% decline in FX trading \nIncome)\n \n361.01\n \n590.67\n \n377.42\n \n165.93\n78", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Financial_Stability_Reports/financial stability report 2011.pdf"}
{"doc_id": "8797ab3afbedd30c3a3db77a0a4c855a", "text": "CENTRAL BANK OF KENYA\nOpening Remarks\nby\nPROF. NJUGUNA NDUNG’U\nGOVERNOR, CCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA aanndd\nCCHHAAIIRRMMAANN,, MMOONNEETTAARRYY PPOOLLIICCYY CCOOMMMMIITTTTEEEE\ndduurriinngg tthhee\nMMOONNEETTAARRYY PPOOLLIICCYY CCOOMMMMIITTTTEEEE SSEEMMIINNAARR OONN ““TTAAMMIINNGG\nIINNFFLLAATTIIOONN AANNDD FFOOOODD SSEECCUURRIITTYY””\nThe Kenya School of Monetary Studies, Nairobi, Kenya\nAugust 14, 2009\n\nOpening Remarks during the MPC Seminar on “Taming Inflation and Food Security”, August 14, 2009\nPermanent Secretaries: Ministry of Finance; Ministry of Planning,\nNational Development and Vision 2030; Ministry of Agriculture;\nMinistry of Trade; Ministry of Special Programmes;\nRepresentatives of our Development Partners;\nChairmen and Heads of Government Parastatals;\nRepresentatives of the Private Sector;\nDistinguished Guests;\nLadies and Gentlemen;\n•\nIt gives me great pleasure to be with you today during this important seminar on\n‘Taming Inflation and Food Security’. Let me take this opportunity\nfrom the onset to warmly welcome you all to the Kenya School of Monetary\nStudies (KSMS).\n• As you may all be aware, the Bank’s principal objective is to formulate and\nimplement monetary policy directed at achieving and maintaining stability\nin the general level of prices, as well as supporting the economic policy of\nthe Government including its objectives of growth and employment. Price\nstability is an important signal to the economy and provides a stable\nplanning horizon to predict future prices and perhaps returns. Most\ncoordination failures occur due to the inability to forecast future prices or\ncalculate, for example, return on investment.\n• This seminar comes at a time when the country is just recovering from the\neffects of high inflation arising from supply side factors caused by several\nshocks. These shocks have an international as well as domestic dimension.\nThey include volatile oil prices, commodity prices and drought conditions\nwhich continue to pose a challenge to the achievement of the Bank’s core\nmandate of price stability.\n• Given these outcomes – that shocks tend to affect domestic prices upwards\nand domestic output downwards, simultaneously – we have to rethink the\nappropriate measure of inflation and how to target or contain it.\n• But also, appropriately computing and reporting inflation becomes very\ncritical - the information processed from the reported numbers on inflation\nleads directly to cost of living adjustment (COLA) requests even at CBK!\n• Usually, the CBK must have some inflation target. But also this has to be\nconsistent with inflation experience or profile for the general public as well\n2\n\nOpening Remarks during the MPC Seminar on “Taming Inflation and Food Security”, August 14, 2009\nas create the required consistency of the monetary framework and\neconomic growth profile.\n• This workshop should help in defining the appropriate inflation indicator.\n• The emphasis that seems to converge is to come up with a single measure\nof inflation that can be easily explained, analyzed and related to economic\noutcomes. But of course different economic constituencies will understand\nthis in terms of how it affects them.\n• Alternatively we may want to focus on measures that will say exactly what\nthey mean. These include:\na) Food inflation\nb) ‘Core’ inflation – (define what is core)\nc) Inflation (takes care of all the above) - National inflation indicator\nd) For CBK, we would prefer a non-tradable goods price index to\ncompute our inflation index that responds or is affected by\nmonetary policy directly and also links to the exchange rate and\nthe issues of competitiveness. For your information Ladies and\nGentleman, many countries are currently publishing statistics on\ntradable and non-tradable inflation as part of their dissemination\nof inflation data. This allows central banks to easily compute the\nprofile of real exchange rate.\ne) Finally, we want an inflation index that comes close to measuring\nor reflecting the cost of living. The question is, how can this be\ndone and at least cost by KNBS and how other players in this\nprocess can partner.\n• But why do we want several indicators of inflation to be developed? At the\noutset, money or the demand side is just one factor or driving force on\ninflation. The other one is on the supply side. Monetary policy becomes\npassive when supply side factors drive the domestic prices and so inflation.\nThis means that several indicators can also bring in a wealth of information\nto be processed.\n• The experience; the achievement of the inflation target has been\nconstrained by increased volatility in food prices and other exogenous\nshocks. In particular, the overall month-on-month inflation increased from\n9.67 percent in January 2007 to 11.1 percent in June 2007, and to 31.5\npercent in May 2008 before declining gradually to 17.79 percent in July\n3\n\nOpening Remarks during the MPC Seminar on “Taming Inflation and Food Security”, August 14, 2009\n2009. On the other hand, CBK underlying inflation declined from 5.15\npercent in January 2007 to 4.90 percent in June 2007 before rising to 7.90\npercent in July 2009. The issues and questions raised by such volatility in\none measure of inflation thus attract policy debate and action.\n• It is important to note that the rising overall inflation rate during the period\nwas attributed mainly to food prices which account for 50.5 percent of the\noverall consumer price index basket. The rising food prices have been\nattributed mainly to drought, supply constraints and lack of cultivation by\nfarmers in Kenya’s grain basket in the Rift Valley who were displaced\nfollowing the post poll crisis in January 2008.\n• Food inflation has been quite volatile and erratic since January 2007,\nincreasing from 11.8 percent to 15.9 percent in December 2007, 44.2\npercent in May 2008 and declining to 24.4 percent in July 2009. The\nvolatility of food inflation was the highest during the period and using a\nmeasure of volatility stood at 10.72 percent compared with 8.98 percent\nand 6.19 percent for fuel and transport & communication inflation rates,\nrespectively.\n• The Monetary Policy Committee of the Bank is concerned that the\nprevailing famine and drought in the country will result in a spike in\ninflation and so an appropriate policy response is required.\n• The solution; most studies have advocated for improved agricultural\nproductivity as the most effective way of addressing food crises associated\nwith higher international prices and food security concerns. But this has to\nbe supported by an appropriate infrastructure for processing, storage and\ntransportation of food.\n• In this regard, it is our hope that this seminar will seek to achieve the\nfollowing objectives :\na) Agree on how best to report inflation.\nb) Review the sources, magnitude and structure of inflation in\nKenya, to gain a better understanding of its dynamics.\nc) Come up with feasible solutions to the food supply problem.\nd) Deliberate on possible action plans among key stakeholders\nto keep inflation low and stable.\n• This seminar is therefore expected to come up with resolutions that would\nform a basis for a long term policy on domestic prices and food security in\n4\n\nOpening Remarks during the MPC Seminar on “Taming Inflation and Food Security”, August 14, 2009\nKenya. We still have to contend ourselves with a three-dimensional\nsolution: food production; food processing; food storage and transportation.\n• Let me underscore the important role of partnership between the\nstakeholder-institutions represented here today in addressing the challenges\nof inflation. It is my hope that such partnerships will involve regular\nconsultations, sharing information and strategies geared towards seeking\nsolutions to supply constraints or challenges to food production and\ndistribution with the overall objective of achieving price stability. This\nworkshop should re-define and strengthen future partnership and the\nresponsibility for each institution.\nOn behalf of the Central Bank of Kenya and the Monetary Policy Committee,\nlet me express my sincere gratitude to the presenters, discussants and all\nparticipants who responded to our invitation and have graced us with their\npresence at this seminar. I am sure they will provide a good platform to share\ninformation and discuss feasible solutions.\nLadies and Gentlemen, I now take this opportunity to declare this seminar\nofficially open.\nI wish you all fruitful deliberations.\nThank you.\n5", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2009/Opening%20Remarks%20during%20the%20MPC%20Seminar%20on%20Taming%20Inflation%20and%20Food%20Security.pdf"}
{"doc_id": "07c95c95803593d4cbec07819c99d1bb", "text": "CENTRAL BANK OF KENYA\nClosing Remarks by\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\nAAtt tthhee\nJOINT WORKSHOP FOR THE DOMESTIC FINANCIAL\nSECTOR REGULATORS ON RISK CONTROL AND\nCOMPLIANCE\nGreat Rift Valley Lodge and Golf Resort, Naivasha\n21st – 22nd October 2010\n\nJoint Workshop for the Domestic Financial Sector Regulators on Risk 2010\nControl and Compliance , 21st – 22nd October 2010\nDirectors of Financial Sector Regulators present;\nMr. Sammy Makove, Chief Executive Officer, Insurance Regulatory\nAuthority (IRA);\nFacilitators from Quantum Global Wealth Management Ltd;\nParticipants;\nLadies and Gentlemen:\nI am honoured to have been invited to give the closing remarks at this joint forum\norganised by the Financial Sector Regulators. This is yet another significant step\nin our collective efforts as domestic financial sector regulators to execute our\nrespective mandates in a coordinated manner. Indeed, this workshop has offered\nus invaluable opportunities for further knowledge exchange and networking,\nwhich I believe will facilitate the necessary collaboration in our endeavours. At the\noutset, I would like to sincerely appreciate the efforts of all of those who have\ncontributed towards making this workshop a success.\nLadies and Gentlemen: The focus of this workshop has been risk and its\neffects on the financial sector. I am informed that the facilitators have done a\ncommendable job in detailing aspects of the different types of risks. In business, as\nin life itself, risk is a reality, an inescapable factor accompanying every productive\nendeavour. Fortunately, risk can be significantly reduced if well managed and also\nexpected. For us as regulators, our task is then to ensure that risks in our daily\noperations and in the business of the institutions we regulate are identified,\nquantified and managed within safe limits.\nThe key to effective financial regulation, then, is in proper risk identification,\nmeasurement, assessment and mitigation. All types of risks will involve\ndiscernible relationships between various variables, and it is our duty as\nregulators to constantly monitor these variables, their trends and relationships\nover time. This makes our collection of quality data, its processing and reporting\nan indispensable function of our mandate. The availability of quality data makes it\npossible to generate appropriate information for effective regulation. One\noutcome of this course is also that we need to re-examine our database and its\ngeneration and processing to support effective management of risks.\nLadies and Gentlemen: As financial sector regulators, risk identification and\nmonitoring is a critical mandate. Effective regulation entails keeping business risk\n2\n\nJoint Workshop for the Domestic Financial Sector Regulators on Risk 2010\nControl and Compliance , 21st – 22nd October 2010\nwithin acceptable limits, while simultaneously leaving service providers free to\nmake their operational and investment choices as they deem fit. In other words,\nour role as regulators in a liberalized economy such as ours is to facilitate, not\nstifle, business innovations. We, however, must understand the business\nenvironment and risk management to be able to regulate.\nIn conclusion, ladies and gentlemen, our journey towards regulatory harmony,\nas envisaged in our signed MoU, continues. By our discussions here, I hope our\nunderstanding of risk as a business and regulatory concern has been renewed;\nenabling us carry out our responsibilities in a more informed manner. We should\naccordingly continue our information sharing, both at technical and board level,\non risk and other areas of mutual concern as we strive towards regulatory and\nsupervisory harmony. But more importantly, we should continue to search for\ncourses that update our knowledge base and push us to the knowledge frontiers.\nThis is the only sure road for our success as regulators. Remember we have a\nfour-dimensional approach to our duty – always emphasized at the Domestic\nRegulators Platform: Advice, Cultivate Partnership, Development the\nMarket and finally, Regulate the Market.\nThank you for your attention.\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2010/Governor%27s%20Remarks%20-%20Joint%20Workshop%20Domestic%20Regulators.pdf"}
{"doc_id": "db4dde22d11cb6d69716fd13eeee8401", "text": "CENTRAL BANK OF KENYA\nCENTRAL BANKS’ 2016 FORUM PREPARATORY ROUND TABLE MEETING\nKenya School of Monetary Studies, Nairobi\nSpeech by Dr. Patrick Njoroge\nGovernor of the Central Bank of Kenya\nNovember 9, 2015\nAs Prepared for Delivery (751 words)\nLadies and Gentlemen, It is with great pleasure that I welcome you to Nairobi for\nthe Round Table meeting. Let me at the outset express my gratitude to AFRACA\nfor organising this meeting as well as the Technical Centre for Agricultural and\nRural Co-operation (CTA) for their continued support. I am aware that this is an\nagenda-setting meeting, which is supposed to be a precursor to the upcoming 2016\nCentral Banks Forum. This planning meeting is therefore very necessary by virtue\nof the different regions represented here today.\nIt is indisputable that the support of regulators is key in the success of agricultural\nFinancing. Without appropriate rules, regulations and guidelines from the Central\nBanks, commercial banks and other investors are not likely to come to the\nagricultural commodities market and it is therefore imperative that Central banks\nare on board early in facilitating process and procedures that embed within\nrespective country statutes.\nPoverty remains is still a universal situation in the African continent and living\nstandards need to improve further. Whereas most countries in Africa have\nimproved macro-economic conditions and infrastructure, the low productivity in\nagriculture has left most of the workforce still underemployed in this sector.\n\nThe IMF 2014 Regional Economic Outlook Report for Sub-Sahara Africa\nobserved that increasing agricultural productivity delivers significant social\ndividends to the population living in the continent.\nFirst: Agriculture employs by far the most individuals and gains in agriculture are\nimportant because many workers will remain in the sector for a long time as\nagriculture is more labor intensive than other sectors.\nSecond: Compared to the Formal Job Market, the skills needed for agricultural\nactivities are less specialized and require less training.\nThird: evidence from the Sub-Sahara Africa suggest that growth in agriculture in\nthe last few decades has been among the most important contributors to poverty\nmore decisively than growth in cash crops.\nLadies and Gentlemen: Access to finance remains a major constraint to\nagricultural development. Whereas African countries have focussed on providing\nlarger access to credit to the poor, through special credit lines or specialized credit\ninstitutions, including state-owned banks and microfinance institutions, empirical\nevidence on the impact of these interventions have had mixed results.\nIndeed, Kenya’s financial legal landscape has seen significant changes. The\nCentral Bank of Kenya has made significant strides in promoting financial\ninclusion which extends to rural and agricultural communities as well. Mobile\nBanking Technologies and agency banking models have ensured that rural\ncommunities can easily access finance within their localities.\nThe central Bank of Kenya Act and Banking Act have been amended, national\nPayment Systems Act enacted and a host of regulations and Prudential guidelines\nadopted to provide for the development of robust legal, regulatory and supervisory\nframeworks for both mobile financial services and agency banking to thrive.\n\nSACCOs are equally important institutions in rural and agricultural economies and\nCBK has instigated appropriate reforms in the SACCO sector to ensure sound\nmanagement practices are in place for effective financing of rural communities.\nLadies and Gentlemen, as we commence these deliberations today, we also need to\nremain cognizant of new challenges that keep emerging in the various regions that\nwe come from. Food Security, Climate Change as well as Ebola and Political\nInsurgencies/conflicts remained a threat to Agricultural communities and need to\nbe addressed, concertedly.\nNonetheless, we certainly need to take a long and serious look at our agricultural\nsituation in the continent and see what role the Central Bank can actively play in\ndeveloping solutions for agricultural communities in Africa. I am very encouraged\nto see various stakeholders participating in this Round Table Meeting. Central\nBanks can play a crucial role of ensuring the success in agriculture by capturing\nthe views of all the stakeholders to shape appropriate policies\nAFRACA has, and continues to play a crucial role as a lead advocate in providing\ninternational platforms, such as this one, to bring both public and private sector\nplayers together to deliberate on how we can increase investments in Agriculture.\nThe AFRACA Central Banks Forum is an important event in our Calendar and we\nwant to give it special focus. I sincerely hope that your interest will be sustained\nthroughout the two days of discussions and deliberations. I am very optimistic that\nthe 2016 Central Bank’s forum will stimulate new thoughts for policy and\npractical actions in rural and agricultural finance in Africa.\nWith these remarks, Ladies and Gentlemen, it is my pleasure to declare the\n‘Central Banks 2016 Forum Preparatory RoundTable Meeting’ in Nairobi\nofficially opened.\nThank You", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2015/CentralBanks2016ForumPreparatoryRoundTableMeeting.pdf"}
{"doc_id": "ac127073cfa8a146adecaf4c230e7ebf", "text": "CENTRAL BANK OF KENYA\nOpening Remarks By\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\naatt tthhee\nREGIONAL CREDIT REPORTING\nCONFERENCE\nKKeennyyaattttaa IInntteerrnnaattiioonnaall CCoonnffeerreennccee CCeennttrree,, NNaaiirroobbii\nJuly 7, 2011\n\nGovernor’s Remarks at the Regional Credit Reporting Conference – July 7, 2011\nMr. Joseph Kinyua, Permanent Secretary, Office of the Deputy Prime\nMinister and Ministry of Finance;\nHon. Nderitu Murithi, Assistant Minister, Ministry of\nIndustrialization\nMr. Melchior Wagara, First Deputy Governor, Bank of the Republic of\nBurundi;\nAll East Africa Community Central Banks\nRepresentative of the World Bank Country Director;\nDistinguished Guests and Participants;\nLadies and Gentlemen:\nI am delighted to be here today to make some brief remarks at this very\nauspicious Regional Conference. I am here to welcome the Permanent Secretary,\nOffice of the Deputy Prime Minister and Ministry of Finance to officially open\nthis Conference on Credit Information Sharing, but before doing that I wish to\nmake some few remarks. On behalf of the Central Bank of Kenya which is co-\nhosting this Conference with the Kenya Bankers Association, let me extend a very\nwarm welcome to all delegates to Kenya. It is my sincere hope that you will enjoy\nyour stay in Kenya.\nI would also like to take this opportunity to thank FLSTAP, FSD Kenya, IFC,\nUSAID and all other development partners who have given us financial and\ntechnical support towards this Conference. We also appreciate their\ncontributions towards the development and rollout of credit information sharing\nin Kenya.\nLadies and Gentlemen: This Regional Conference is one of a kind for the East\nAfrican Community (EAC) and Kenya in particular. It presents an opportunity\nfor EAC member countries to share their experiences on credit information\nsharing as an avenue for up-scaling the efficiency and effectiveness of our credit\nmarkets. It will also present us with an opportunity to acquaint ourselves with\nthe global best practices on credit information sharing.\nLadies and Gentlemen: The role of credit markets, as a source of financing\ninvestment, in the promotion of economic growth and development is not in\ndoubt. However, inefficiencies in the credit markets limit the level of their\ncontribution. It is with this in mind that most EAC countries have embraced\n2\n\nGovernor’s Remarks at the Regional Credit Reporting Conference – July 7, 2011\ncredit information sharing as a means of tackling some of the inefficiencies in\nour credit markets. Key among these inefficiencies is the cost imposed by\ninformation asymmetry, which results in an overload of the risk premium and\nhence high costs of credit as well as a means of credit rationing.\nSince the rollout of Credit Information Sharing (CIS) in Kenya in July 2010, CBK\nand KBA have continued to review the mechanism to ensure that the potential\nbenefits are realized within a reasonable timeframe. I believe that our efforts will\ngreatly benefit from the global best practices, which are part of the agenda of this\nconference. The key concerns of our current CIS mechanism is the need to\nexpand its scope beyond institutions licensed under the Banking Act as well as\nachieving full file reporting by the participating institutions. The global\nexperiences to be shared in the conference by the facilitators from the World\nBank and South Africa, complemented by our varied regional CIS approaches\nwill be pivotal in scaling up our credit information sharing mechanisms.\nLadies and Gentlemen: The co-hosting of this conference by CBK and KBA\nattests to the new approach in the development of the regional financial markets.\nRegulators have realized the mutual benefits that accrue when they partner with\nstakeholders. This approach enhances the rates of success of development\ninitiatives.\nTo conclude my remarks, Ladies and Gentlemen, let me take this opportunity\nto reiterate the commitment of the Central Bank of Kenya towards the successful\nintegration of the EAC and more so when we building information capital for our\ncredit markets.\nWith those few remarks, ladies and gentlemen, it is now my honour and\npleasure to welcome Mr. Joseph Kinyua, Permanent Secretary, Office of the\nDeputy Prime Minister and Ministry of Finance to deliver his keynote address\nand to officially open this Credit Information Sharing Conference.\nThank you\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2011/Governor%27s%20Remarks%20at%20Regional%20Credit%20Reporting%20Conference.pdf"}
{"doc_id": "859ce3d02c2ba708a36d68f10d89e04d", "text": "CENTRAL BANK OF KENYA\nRemarks by\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\naatt tthhee\nWORKSHOP ON DEVELOPING KENYA’S\nMORTGAGE MARKET\nCrowne Plaza, Nairobi\nFebruary 17, 2011\nMr. Joseph Kinyua, the Permanent Secretary, Ministry of Finance;\nMr. Johannes Zutt, the World Bank Country Director;\n\nGovernor’s Remarks at the Workshop on Developing Kenya’s Mortgage Market – February 17, 2011\nDistinguished Guests;\nLadies and Gentlemen:\nIt is my great pleasure to warmly welcome you all to this important workshop\non developing Kenya’s mortgage market. This is indeed an important market\nto develop and focus on. The mortgage market and financing programs are\ncritical in facilitating the realization of decent housing and expanding cities\nin Kenya.\nFirst, I wish to thank the World Bank Group for partnering with the Central\nBank of Kenya in conducting this important study that is informative on the\nappropriate policy options geared towards strengthening the mortgage\nmarket in Kenya. Further, I wish to acknowledge our Financial Institutions\nfor their timely response to the baseline questionnaire survey on mortgage\nfinance. The survey was intended to provide a snapshot of Kenya’s mortgage\nfinance market and it has formed a critical input into the report being\nreleased today.\nLadies and Gentlemen: the Kenyan banking system through its\nintermediation role remains the key pillar in providing mortgage financing.\nAlthough there is evidently enormous opportunity in the sector, lending to\nthe building and construction and real estate sector stands at 14.4 percent\n(Ksh.133.6 billion as at end of 2010) of the total credit by banks and\nmortgage finance companies. The bulk of long-term mortgage financing is\ncurrently funded mainly through short-term savings. The traditional\nmismatch constraint therefore comes into play. This requires a well\ndeveloped mortgage market to address the long-term funding requirements\nof the sector.\nDeveloping mechanisms for long-term finance is also good for monetary\npolicy transmission. The Monetary Policy Committee has been trying to\n2\n\nGovernor’s Remarks at the Workshop on Developing Kenya’s Mortgage Market – February 17, 2011\naddress the issue of long-term finance and we do hope that the\nrecommendations from this study together with your contributions will help\nformulate solutions to move the mortgage market in Kenya to a higher level\nof development.\nIn 2010, the Central Bank made some policy proposals geared towards\nempowering commercial banks to extend more credit to the real estate\nsector. The Government accepted these proposals, which resulted to\namendment of the Banking Act and with effect from January 2011. Two\naspects of it are:\ni) Mortgage finance companies are now allowed to operate current\naccounts, a measure intended to enable them mobilize additional\ndeposits; and\nii) Banks have been allowed to advance up to 40 percent of their total\ndeposit liabilities up from 25 percent for purchase, improvement or\nalteration of land.\nThese measures will unlock the sector’s potential by availing funding\nrequired to finance growth of real estate in Kenya. The Central Bank will\ncontinue to work with the sector to improve the operating environment.\nLadies and Gentlemen: The housing sector has a critical role to play in\nthe achievement of the goals envisaged by Vision 2030. Housing construction\nis a labour-intensive activity that will create jobs for the youth and the\nunemployed. Construction boom has upstream and downstream activities\nand strong linkages with other sectors of the economy. In addition, mortgage\nmarket development supports expanding cities with the accompanying\nproductivity gains.\n3\n\nGovernor’s Remarks at the Workshop on Developing Kenya’s Mortgage Market – February 17, 2011\nIt is equally important for the players in this niche market to design\ninnovative ways of securing funds to exploit opportunities available. For\ninstance, pension funds are needed for guaranteeing members’ mortgages.\nThis is happening in Kenya, but still at a low scale. Leveraging on such long-\nterm funds will lower costs and make decent and low cost housing available\nand affordable to potential borrowers. Also, other investment vehicles such\nas unit trusts have the potential of pooling funds required for specific\nprojects.\nThe other source of long term finance is the bond market. The success of the\nKenya Government infrastructure bond as well as other corporate bonds that\nhave followed, demonstrate the enormous potential of this bond market. In\n2010 alone the Government mobilized a total of Ksh.179.9 billion through\nbond issues, and the infrastructure bonds were oversubscribed every time.\nThis is a clear testimony of the market’s ability to provide cheaper source of\nfunding for long-term projects such as mortgages. To further deepen the\nbond market, the Central Bank has implemented a number of measures,\nincluding introduction of benchmark bonds and re-opening of these\nbenchmark bonds to create liquidity and facilitate trading.\nThis month, the Central Bank has as fiscal agent of the Ministry of Finance,\nissued a 30 year Savings Development Bond which is a landmark in the\nregion. Long-dated Government bonds create a benchmark for issuance of\nlong-term mortgage bonds. I am encouraged by recent moves by some\nplayers in this market to issue mortgage bonds, but much more potential\nremains to be tapped.\nDistinguished Guests, Ladies and Gentlemen; With these remarks, it\nis now my pleasure to welcome Mr. Joseph Kinyua, the Permanent Secretary,\nMinistry of Finance, to make his remarks and officially open this workshop.\nThank you\n4", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2011/Governor%27s%20Remarks%20at%20Mortgage%20Finance%20Workshop.pdf"}
{"doc_id": "1eafa3c68ee4e2f95dcd777d24ab4823", "text": "CENTRAL BANK OF KENYA\nLAUNCH OF THE PERSONS WITH DISABILITY DIGITAL ACCESSIBILITY\nREPORT\nRemarks by Dr. Patrick Njoroge\nGovernor, Central Bank of Kenya\nWednesday, December 2, 2020\nAs Prepared for Delivery\nGood morning, Good afternoon, Good evening! I am delighted to join you today for the\nlaunch of the Persons with Disability Digital Access Report. Let me express my\nappreciation to the Kenya Bankers Association (KBA) for the invite. The timing of this\nevent is indeed apt coming on the eve of the International Day of Disabled Persons which\naims to promote an understanding of disability issues and mobilize support for the dignity,\nrights and well-being of persons with disabilities.\nAccording to the World Bank1, 15 percent of the world population experience some form\nof disability with high prevalence in the developing countries. In Kenya, as per the 2019\ncensus statistics, 2.2 percent of Kenyans are living with some form of disability. Of this\npopulation, only 0.5 percent are included within the financial system.2 This is a significant\nlevel of financial exclusion that needs to be urgently addressed.\nOn a broader front, the United Nations (UN) 2030 Agenda for Sustainable Development\nthat seeks to ensure shared prosperity for all global citizens is disability inclusive. The\nAgenda that will be realized through the Sustainable Development Goals (SDGs) aspires\nthat the disabled will not be left behind in shared prosperity. In particular, the SDGs call\nfor nations to work towards including the disabled in education, employment and more\nbroadly ensuring their social, economic and political inclusion.\n1 https://www.worldbank.org/en/topic/disability\n2 WHO World Report on Disability (2011) http://www.handicap-international.org/uploads/media/goodpractices-GB-\n2coul.PDF\n\nTurning to the Kenyan banking sector, the Central Bank of Kenya (CBK) has set a vision\nof a banking sector that works for and with Kenyans. The vision is operationalized\nthrough the Kenya Banking Sector Charter issued in February 2019. The charter is\nanchored on four pillars: customer centricity, risk based pricing, transparency, and ethical\nbanking. While all the four pillars strive towards all Kenyans being included in the\nbanking sector, two of them are particularly pertinent for our discussions today—in our\nview they encompass the expectations with regard to the inclusion in the banking sector of\npersons with disabilities.\nThe first is customer centricity. Banks should ensure that their products and services are\ntailored to the needs of their customers. This applies to all segments of their customers of\nwhom the disabled are an important component. Banks must therefore clearly understand\nthe needs of the disabled as they design products and services for them. More importantly\nis how the disabled access these products and services. Advances in technology and\ninnovations present us with opportunities to ensure convenient ‘anytime anywhere’\nservices on digital platforms. However, physical channels still remain important and every\neffort must be made to make brick-and-mortar facilities accessible by the disabled.\nThe second pillar is ethical banking, which is about doing the right thing. This is\nencapsulated in the shift towards sustainability aptly captured in the 3Ps acronym, People,\nPurpose and Planet. The Kenyan banking sector to its merit established the Sustainable\nFinance Initiative in 2015. Some of our banks have signed up to global sustainability\ninitiatives most notably, the UN Principles for Responsible Banking unveiled on the\nmargins of the UN General Assembly in September 2019. As the Kenyan banking sector\nwalks the 3Ps path, it must carry along the disabled, an integral part of our society.\nOn our part as the Central Bank, we are also working through our mandate to the Kenyan\npopulace to ensure that the disabled are not left behind. Most notably, the new generation\nnotes issued in June 2019 incorporated features to enable ease of use by the visually\nimpaired. These include use of large prints, tactile bands to identify the denomination and\nsize differentiation of the various denominations of the notes. These features were\nincorporated based on feedback from the visually impaired. While these are significant\nmilestones, we are still on a journey listening to all Kenyans to ensure they are able to use\nthe notes and coins we issue.\n2\n\nAs I draw to a close, today’s event should be the beginning of a journey for Kenya’s\nbanking sector in walking more closely with the disabled. I am sure that this will not just\nbe another webinar, but we shall all be challenged to take action and make a difference to\nsociety. We cannot prosper as a society if any of us is left behind. I therefore challenge the\nKenyan banking sector to walk the talk and truly serve our disabled compatriots. Let us be\nchallenged to design suitable products and services for them and ensure our premises and\nphysical channels are easily accessible to them. At this time next year, we should celebrate\ntoday as the beginning of a year of tremendous progress in incorporating the disabled in\nthe Kenyan banking sector.\nI wish you fruitful deliberations and look forward to the outcomes of this event.\nThank you!\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke/uploads/speeches/930909904_Governor's Remarks-KBA Disability Report Remarks-December 2020.pdf"}
{"doc_id": "808b83f613b5d7e59d4d870a0acb0e24", "text": "REMARKS\nby\nPPRROOFF.. NNJJUUGGUUNNAA NNDDUUNNGG’’UU\nGOVERNOR\nCENTRAL BANK OF KENYA\naatt tthhee\nOOFFFFIICCIIAALL OOPPEENNIINNGG CCEERREEMMOONNYY OOFF TTHHEE\nRRAAMMPP WWOORRKKSSHHOOPP OONN FFUUNNDDAAMMEENNTTAALLSS OOFF\nFFIIXXEEDD IINNCCOOMMEE RRIISSKK MMAANNAAGGEEMMEENNTT\nFairmont Norfolk Hotel, Nairobi\nMonday, January 20, 2014\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\n1. Ladies and Gentlemen, it is my great\npleasure to be here this morning at\nthe commencement of this RAMP\nworkshop on Fundamentals of Fixed\nincome risk management. I would\nlike to thank the World Bank RAMP\nteam for inviting me. May I, first and\nforemost, take this opportunity to\nwelcome you all to Nairobi and wish\nyou Happy 2014. The weather is\nnormally quite pleasant in Nairobi\nat this time of the year and I hope\nyou will enjoy your stay. If you get\ntime, you may wish to visit different\n2\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\nplaces exhibiting our heritage which\ninclude the Nairobi National Park,\nwhich is not far from here, and other\nimportant places like the National\nMuseum, the National Archives, etc.\n2. Ladies and gentlemen, we are greatly\nhonoured as a country and thankful\nto the workshop organizing team for\nchoosing to hold a RAMP workshop\nfor a third time here in Kenya since\nCentral Bank of Kenya joined RAMP\nalmost five years ago.\n3\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\n3. Official foreign exchange reserves,\nladies and gentlemen, as you are all\naware are in many countries a major\nnational asset. Even in the rich and\ndeveloped economies, foreign\nexchange reserves are considered\nimportant. First, for us they form the\nappropriate buffer to cushion\nourselves from shocks as well as to\nsupport the market in such periods.\nSecond, in a country with a floating\nexchange rate and an open capital\naccount, foreign exchange reserves are\n4\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\nan important tool of monetary policy.\n4. In recent decades, foreign exchange\nreserves held by central banks have\nsurged to record levels. But there are\nchallenges of holding and managing\nforeign exchange reserves. The risks\nmostly relate to fluctuating value of\nthe base currencies and so alter the\nbalance sheet of central banks. The\nforeign exchange reserves management\nand investment has been hampered\nby the aftermath of the global\nfinancial crisis – with negative real\n5\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\ninterest rates for a prolonged period of\ntime.\n5. Prior to the global financial crisis,\nthe compensation structure and\nincentives in the financial sector\ncreated strong motives for excessive\nrisk-taking during boom years.\nDerivatives created a room where risk\nassessment and risk pricing were not\n6\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\nappropriately followed. Modern risk\nmanagement methods may also have\nintensified the cycle because of their\nreliance on metrics such as value at\nrisk that are highly sensitive to recent\nperformance, especially volatility. In\ngood times, volatility declined, and\nvalue at risk along with it. This\npattern generated a pro-cyclical\nwillingness to take on risk and\nleverage, amplifying and propagating\nthe boom-bust cycles.\n7\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\n6. Ladies and gentlemen, the\nconsequences of this excessive risk-\ntaking as you all know, was a vicious\ncycle of a collapse of confidence, asset\nfire sales, evaporation of liquidity,\nand a deleveraging free fall that\nfollowed, which was the mirror\nimage of the vibrant mortgage market\nthat preceded it. Governments and\ncentral banks around the world took\nextraordinary actions to prevent a\nfull collapse of the global financial\nsystem and markets.\n8\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\nBut what we have witnessed was bad\nenough - the deepest and most\nprolonged recession in generations,\nwith recovery being agonizingly slow,\nheld back, in part, by the ongoing\nefforts of overleveraged households\nand financial institutions to repair\ntheir balance sheets. The governments’\nbanks bailout and economic stimulus\npackages led to huge budget deficits\nin sovereigns balance sheets which\nculminated in the sovereign debt\ncrises, which were experienced in the\nmajor economies, with the Euro zone\n9\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\ndebt crisis threatening to get out of\nhand.\n7. Ladies and gentlemen, safeguarding\nthe foreign exchange reserves requires\nprudence in their management, and\nprudence can only be achieved if\ncentral banks have well-trained and\nhighly skilled staff who understand\nthe risks inherent in investment\nassets and how to mitigate those risks.\nThe World Bank’s Reserves Advisory\nand Management Programme (RAMP)\nhas played an important role to this\n10\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\nend, by assisting central banks in\nbuilding and enhancing capacity in\nforeign exchange reserves management\nin central banks. Building a strong\ntalent base with deep risk expertise\nin central banks through\nrecruitments and retention of the\nnecessary expertise continues to be a\ncritical challenge for most central\nbanks. However, I must hasten to say\nthat central banks participating in\nthe RAMP program have greatly\nbenefited from the advice, training\nand capacity building imparted by\n11\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\nexperts and practitioners in the\nworld of investment, from the World\nBank Treasury.\n8. This workshop is worthwhile as it\nseeks to provide a solid foundation and\nframework for fixed income risk\nmanagement that allows the\nparticipants to measure, monitor, and\nreport portfolio risk and performance.\n12\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\nThe objective of this workshop is to\nprovide a strong understanding and\nanalytical capacity for risk and\nperformance measurement and\nreporting for fixed income portfolios.\nIt’s my sincere hope that the knowledge\nto be gained in this workshop will be\nput to good use in our day to day\noperations of central banks’ work in\nforeign exchange reserves management.\n9. Finally, it is now my great honour and\nhumble duty to declare this workshop\nofficially opened\n13\n\nGovernor’s Remarks at RAMP Workshop- Fundamentals of Risk Mgt –\nJanuary 20, 2014\nThank you.\n14", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/Opening_of_RAMP_Workshop.pdf"}
{"doc_id": "5f6849d1a07bc1eda8298d50aa241d84", "text": "CENTRAL BANK OF KENYA\nRemarks by\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCENTRAL BANK OF KENYA\nat\nA COCKTAIL HOSTED DURING THE SUPERVISORY COLLEGE\nMEETINGS FOR KENYA COMMERCIAL BANK, EQUITY BANK AND\nDIAMOND TRUST BANK\nHotel InterContinental Nairobi\nFriday, 25th October 2013\n\nChairmen and Board Members of Kenya Commercial Bank\nGroup, Equity Bank and Diamond Trust Bank;\nThe Chief Executives of Kenya Commercial Bank Group, Equity\nBank and Diamond Trust Bank;\nHeads of Bank Supervision from the EAC Central Banks and\nBank of South Sudan;\nMr. Dirk Jan Grolleman, East AFRITAC’s Bank Supervision\nAdvisor;\nMr. Mike Andrews, East AFRITAC Consultant;\nDistinguished Delegates;\nLadies and Gentlemen:\n1. It is with great pleasure that I welcome you to this auspicious\ncocktail which marks the end of the Concurrent Supervisory\nCollege Meetings for three significant regional banking groups\n- Kenya Commercial Bank, Equity Bank and Diamond Trust\nBank Limited. On behalf of the Central Bank of Kenya (CBK),\nI appreciate each one of you for your participation and\ncontributions during the Supervisory College Meetings. I was\nnot able to join you for the meetings, however, from the brief\ngiven to me, the meetings were very fruitful and I thank you\nall for your valuable participation.\n2\n\n2. Ladies and Gentlemen: The success of the three concurrent\nsupervisory college meetings attests to the value of team spirit.\nThe decision to consider concurrent supervisory college\nmeetings, to optimise on time and other resources, was mooted\nduring the inaugural supervisory college meeting for Kenya\nCommercial Bank in October 2012. In addition to the\nconcurrent supervisory college meetings, CBK in conjunction\nwith IMF’s East AFRITAC organised a five day training on\nconsolidated supervision for technical officers from all the six\nparticipating Central Banks.\nIt is only when information symmetry on regional banking\ngroups exists among the regional regulators that effective\nsupervision of the banking groups can be achieved. That is\nwhy supervisory colleges are necessary for knowledge and\ninformation sharing. To support and complement knowledge\nand information sharing, joint capacity building initiatives\nare necessary. In this regard, allow me to appreciate IMF’s East\nAFRITAC and in particular, Mike Andrews who has\nunreservedly continued to impart knowledge to the EAC\nCentral Bankers on consolidated supervision since 2006. I\nchallenge the technical officers who have benefitted from East\n3\n\nAFRITAC’s capacity building to start taking over the training\nand capacity building efforts as the partnership with East\nAFRITAC continues.\n3. Ladies and Gentlemen: Supervisory colleges present valuable\nforums through which regulators (and the regulated) are able\nto compare notes on a continuous basis. The annual\nsupervisory college meetings are just but part of the forum. The\npresence of 6 Central Banks here today reaffirms their\ncommitment to the spirit of continued coordination and\ncollaboration. With the continued regional expansion of our\nbanks, no one regulator can be able to determine with\ncertainty the compliance status of a banking group. That is\nwhy supervisory colleges are very valuable. Timely sharing of\nsupervisory information can make a difference in deciding\nthe relevant supervisory actions to be taken.\nWith the draft East African Monetary Union (EAMU) Protocol\nat its final stages of negotiation, our continued collaboration\nis a good stepping stone in readiness for a fully integrated\nfinancial sector for the region.\n4. Ladies and Gentlemen: Let me now focus on the commercial\nbanks present. As we appreciate the important role you play\nin mobilising and allocating resources across the region, the\n4\n\nprints of the 2007/2008 global financial crisis are still fresh.\nAs you expand and innovate, it behoves you to ensure that\nadequate risk management is employed. It is with this in\nmind that the Central Banks have continuously adapted\ninternational best practices to ensure that financial stability\nis maintained.\nThe outcome of an effective partnership among the regulators\nand the regulated cannot be overemphasized. However, such a\npartnership should be within agreed boundaries. That is why\nI always emphasize the need to build strong partnerships and\ninstitutions. This will guard the rules of the game and avoid\nfrequent alterations of the rules.\n5. Finally, Ladies and Gentlemen, this cocktail presents an\nopportunity for you to unwind after three days of rigorous\ndiscussions. It also creates a conducive atmosphere for informal\ninteractions between the supervisors and representatives of the\nbanks. Without further ado therefore, I wish you an enjoyable\nevening.\nThank you for listening.\n5", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/Supervisory_College_Meetings_for_KCB_Equity_and_DTB.pdf"}
{"doc_id": "fdee6afc2200f1ec881cffb880e54471", "text": "CENTRAL BANK OF KENYA\n30TH INSURANCE INSTITUTE OF KENYA (IIK) ANNUAL CONFERENCE 2015\nIntercontinental Hotel, Nairobi\nOpening Remarks by Dr. Patrick Njoroge\nGovernor of the Central Bank of Kenya\nOctober 23, 2015\nAs Prepared for Delivery\nGood morning! I am very pleased to join you at this auspicious occasion, the 30th\nAnnual Conference of the Insurance Institute of Kenya (IIK). I am particularly\ngrateful to the IIK for inviting me, and I would like to commend the IIK’s\nExecutive Council for organizing the conference. This is a useful forum to discuss\npertinent issues relevant to the insurance industry, as well as the broader financial\nsector and the economy at large.\nThe theme for this year’s conference “Enhancing Stakeholders’ Value for\nSustainable Business” is very timely, as it resonates with the evolving global\ndynamics. At the outset, the subject of sustainability has increasingly gained\nimportance in modern-day business the world over—businesses can no longer\nconsider themselves successful if they do not take into account the environmental\nand social impact of their activities. It is also clear that businesses prosper as the\nsociety and the environment they operate in also prosper.\nMore recently, the importance of another aspect of sustainability was captured in\nGoal 8 of the United Nations Sustainable Development Goals (SDGs) that were\nlaunched last September, which is “to promote sustained, inclusive and\nsustainable economic growth, full and productive employment and decent work for\nall.”\n\nOf particular relevance is the critical issue of achieving sustainable financing, as\ncountries strive to attain and sustain positive economic outcomes. To this end, one\nof the targets for Goal 8 of the SDGs is to strengthen the capacity of domestic\nfinancial institutions to foster greater access to banking, insurance and financial\nservices. For Kenya, these policies are elaborated in Vision 2030, our development\nblueprint, with the aspiration of a vibrant and globally competitive financial sector\nthat promotes high level of savings to finance Kenya’s investment needs, which is\nin turn informed by the objectives of enhancing financial stability, efficiency and\naccessibility to all Kenyans.\nLadies and Gentlemen, we are all aware of the transformative change that has\nbeen witnessed in Kenya’s financial and economic landscape, with increased\nfinancial inclusion driven by the mobile-banking revolution. Access to financial\nservices had increased from 27.4 percent in 2006 to 66.7 percent in 2013. This\nincrease is testimony to the success of the reforms and initiatives implemented by\nthe players in the financial sector. The Central Bank of Kenya too, in partnership\nwith financial sector players, has facilitated these reforms and initiatives to\nenhance financial stability, efficiency, and access. But much more remains to be\ndone.\nA natural question at this forum is whether a similar transformative change can\ntake place in Kenya’s insurance sector. What constrains such a change? For\ninstance, can ways be found to expand access to affordable insurance services, or\nprovide more innovative contracts that are more suitable for different segments of\nthe population? Or for different types of risks? How can we shorten the time it\ntakes to make payments to claimants? Ladies and Gentlemen, I want to challenge\nyou to a greater vision, to innovations in the insurance sector that will be truly\ntransformative.\nIt is encouraging to note that Kenya’s insurance sector has experienced rapid\ngrowth over the past decade, which is likely to continue over the medium term.\nHowever, there has continued to be low penetration rates and low uptake of\ninsurance products over the years. The FinAccess Survey for 2013 showed that\nonly about 7 percent of adults in Kenya access insurance products, even as the\nWorld Bank trumpets the insurance sector in Kenya as one of the more developed\n2\n\nin Sub-Saharan Africa. One factor that has contributed to this low access is poor\nperceptions and lack of awareness of the existence and importance of insurance\nproducts. The lack of suitable, affordable and accessible insurance products is seen\nas another constraint. The insurance industry also faces a particularly acute\nchallenge of reaching the lower-income groups.\nFor the balanced development of the financial sector, financial literacy and\nconsumer protection are also essential. Consequently players in the insurance\nindustry have a responsibility to educate consumers on the importance of\ninsurance services and the alternative products. Although consumer education does\nnot translate immediately to the bottom line, it is critical for the sustainable growth\nof businesses and the industry.\nFinally, I must emphasize that the resilience of our financial sector is attributable\nlargely to the invaluable collaboration between the private and public sector over\nthe years. These collaborative efforts have been critical in facilitating key reforms\nin the pensions sector, insurance industry, the capital markets, SACCOs, and the\nbanking sector. The Central Bank of Kenya and the other financial sector\nregulators, will continue working with the private sector to ensure that the sector\nremains stable, efficient, and accessible.\nThe growth potential and opportunities for the insurance industry are vast. We can\nalso embrace a greater vision that supports innovations in the insurance sector that\ncan be truly transformative.\nWith these remarks, Ladies and Gentlemen, I declare the 30th Annual Conference\nof the Insurance Institute of Kenya officially opened. I wish you all fruitful\ndeliberations.\nThank you.\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2015/30thAnnualIIKConference2015APD.pdf"}
{"doc_id": "75aa0598bd823d87651eb6d5b9981b83", "text": "CENTRAL BANK OF KENYA\nRemarks by\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\naatt tthhee\nANTI MONEY LAUNDERING (AML) NATIONAL\nSTAKEHOLDERS FORUM\nKenya School of Monetary Studies\nOctober 4, 2012\n\nHon. Oburu Odinga, Assistant Minister for Finance\nChief Executives of Commercial Banks\nMr. John Wanyela, Chairman, Anti-Money Laundering Advisory Board;\nEminent Ambassadors;\nOur Development Partners;\nDistinguished Guests;\nLadies and Gentlemen:\nI feel honoured and privileged to be with you at the start of this important interactive\nforum that brings together financial sector stakeholders to deliberate on the\nimportant subject of Anti-Money Laundering and Combating of Financing of\nTerrorism (AML/CFT) with an aim of creating awareness on AML issues.\nToday I have a humble undertaking, namely of inviting our Chief Guest; the Hon.\nAssistant Minister for Finance to deliver the keynote address and officially open the\nForum. But before I invite him to the podium, I wish to make a few remarks to bring\ndelegates to speed on the status of Kenya on AML/CFT issues.\nLadies and Gentlemen; let me begin by extending a very warm welcome to all our\nparticipants to the Kenya School of Monetary Studies. The School is working together\nwith the Financial Reporting Centre (FRC) with the support of the Danish\nGovernment to create an extensive AML/CFT programme for the next two years to\nraise awareness as well as train Reporting Entities, Law enforcement Authorities and\npersonnel in the FRC on Anti-Money Laundering initiatives. As such, today’s forum\nmarks the start of the Danish funded project which will run over the next 24 months.\nThe project includes activities whose objectives are to raise awareness amongst key\nstakeholders engaged in the fight against money laundering and terrorism financing.\nAs you are all well aware, Kenya has made significant strides in protecting the\nintegrity of its financial sector from illicit financial crimes. The Government has not\nonly shown a high level of political commitment in overseeing the stability of the\ncountry’s financial sector but has also been actively engaged in overseeing the\nimplementation of requisite laws and measures to ensure that our financial systems\nare adequately protected against the financial crimes of money laundering and the\nfinancing of terrorism (AML/CFT).\nAt the Beirut review meeting last month, we argued that Kenya is caught up in a\ntriple problem of implementing a new constitution and formulating accompanying\nbills, building and safeguarding strong institutions and moving fast on FATF\ndeficiencies. The fourth dimension is that Kenya had to go to war to fight terrorism;\nthis is beyond financial risks but also national sovereignty.\nWe need:\n(a) Time to finalize all these interlinked issues.\n(b) Capacity building support.\n(c) To adopt, replicate and build a strong FRC and the best model in the world.\nAnd with these Kenya will succeed.\n2\n\nWhilst the focus of this Forum today will be to raise awareness and sensitize you on\nupcoming programs on issues surrounding AML/CFT, allow me to briefly touch on a\nnumber of initiatives that have been undertaken by the Central Bank to address some\nof these issues.\nLadies and Gentlemen; The Central Bank of Kenya is mandated to foster the\nfinancial integrity of the financial system in the country. The Bank has continually\nenhanced the regulation and supervision of the financial system in order to improve\nthe sector’s integrity. As part of our efforts in ensuring appropriate and effective\noversight, the central bank first issued AML Guidelines in 2000. These Guidelines\nwere revised in 2006 and are currently in the process of being reviewed to reflect the\nprevailing international best practice and to align them with the proceeds of Crime\nand Anti-Money Laundering Act, 2009 (POCAMLA).\nOver the last two years, the Central Bank has issued regular AML/CFT guidelines to\nfinancial institutions to further support and enhance the implementation of\nPOCAMLA. The guidance has covered various issues such as the operationalization\nof the AML Act, Suspicious Transaction Reporting and measures to be adopted by\nfinancial institutions to combat the financing of terrorism. The Central Bank has also\nrevised the Forex Bureau Guidelines so as to align these guidelines to POCAMLA. On\nthe Microfinance front, the Microfinance Regulations and the Agency Guidelines\nrequire Deposit Taking Microfinance institutions and their agents to implement\nAML/CFT measures. All these measures are aimed at ensuring the integrity of the\nfinancial sector.\nAs you may be aware, Kenya is now a leading light in financial inclusion. The systems\nand practices we have put in place to deepen financial inclusion are now considered\nas acceptable best practices and are being emulated by other jurisdictions. The\nchallenge before us on this front is to maintain the delicate balance between financial\ninclusion and financial integrity. By putting in place the required measures to\naddress money laundering and terrorism financing in the financial sector while at the\nsame time deepening our financial markets will therefore enable us maintain this\ncritical balance.\nKenya like other developing economies is quite vulnerable to money laundering and\nterrorism financing due to a number of displacement factors; key amongst them\nbeing a high volume of cash based transactions, lack of an adequate legal framework\nand the existence of alternative remittance avenues. I am glad to note that the\nGovernment of Kenya has taken a keen interest on these issues and has, and is\ncontinuing to undertake a number of initiatives towards addressing these challenges.\nThe Central Bank, in addition to the initiatives I have just mentioned, is developing\nRegulations to strengthen the money remittance sector.\n3\n\nLadies and Gentlemen; It is my sincere hope that this forum will contribute to a\nbetter understanding of the AML/CFT issues affecting the Country and will generate\nideas that will bring the fight against the organized crimes up to international\nstandards.\nIt is now my pleasure to invite the Hon. Assistant Minister, Ministry of Finance, Dr.\nOburu Odinga, to address you and to officially open this forum.\nThank You All.\n4", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2012/aml%20stakeholders%20forum.pdf"}
{"doc_id": "dd0deaaa5ad5793136fb1ee08dc5cd0e", "text": "CENTRAL BANK OF KENYA\nAddress by\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\naatt tthhee\nLAUNCH OF THE FIRST AND NEW CURRENCY\nOF THE REPUBLIC OF SOUTH SUDAN\nMonday, July 18, 2011\n\nYour Excellency, Salva Kiir, President of the Republic of South Sudan;\nHonourable Minister of Finance of the Republic of South Sudan (ROSS);\nAll Honourable Ministers of the ROSS;\nHonourable the Governor of the Bank of South Sudan (BOSS);\nAll invited guests;\nLadies and gentlemen,\nIt gives me great pleasure, honour and priviledge to be part of this historic ceremony\nof launching the first Currency for the newly born Republic of South Sudan. Indeed I\nwish to congratulate the Republic of South Sudan for being able to introduce new\nCurrency hardly ten days after the Country’s Independence Day. This is by all\nstandards no mean achievement.\nI watched with great delight the recent celebrations that marked the birth of the\nRepublic of South Sudan and consider it a great honour to have been invited to this\nequally important milestone event in the history of this new nation.\nThis event is extremely important for the Central Bank of Kenya as it signifies the\nstrong relationship that the South Sudan has had with the Central Bank of Kenya\nover the years. The Central Bank of Kenya hosted his Excellency the Governor of\nBank of South Sudan some years back. This paved the way for the continued\nfriendship the two institutions have enjoyed to date.\nLadies and Gentlemen, I am also glad to note that recent consultations have\nidentified additional areas in which technical assistance can be offered to the Bank of\nSouth Sudan by the Central Bank of Kenya.\nYour Excellency Mr. President, we recognize the enormous but not insurmountable\ntask that the Bank of South Sudan has in transforming itself from a Branch to a fully\nfledged Central Bank and assure you of the Central Bank of Kenya’s commitment and\nsupport in this transformation process.\n\nComing to the wider network of the Eastern African region, Leap frog with ease for\nBank of South Sudan:\n1. Payment Systems\n2. Currency convertibility.\n3. Facilitate trade with the rest of the East African Community Region.\nWith these few remarks, I wish to once again congratulate the Republic of South\nSudan and the Bank of South Sudan for launching its new Currency.\nThank you and God bless.", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2011/Bank%20of%20South%20Sudan.pdf"}
{"doc_id": "b607c89371e29735e2d63eb89a1f5491", "text": "MASTER REPURCHASE AGREEMENT - KENYA\nBetween:\n_____________________ (\"Party A\")\nOf Post Office Box Number ___________________, __________________________\nand\n______________________ (\"Party B”)\nOf Post Office Box Number __________________________, ___________________________\n1) Applicability\na) From time to time the parties hereto may enter into transactions in which one\nparty, acting through a Designated Office, (\"Seller\") agrees to sell to the other,\nacting through a Designated Office, (\"Buyer\") securities and financial instruments\n(\"Securities\") (subject to paragraph 1(c), other than equities and Net Paying\nSecurities) against the payment of the purchase price by Buyer to Seller, with a\nsimultaneous agreement by Buyer to sell to Seller Securities equivalent to such\nSecurities at a date certain or on demand against the payment of the repurchase\nprice by Seller to Buyer.\nb) Each such transaction (which may be a repurchase transaction (\"Repurchase\nTransaction\") or a buy and sell back transaction (\"Buy/Sell Back Transaction\"))\nshall be referred to herein as a \"Transaction\" and shall be governed by this\nAgreement, including any supplemental terms or conditions contained in Annex 2\nhereto, unless otherwise agreed in writing.\nc) If this Agreement may be applied to –\ni) Buy/Sell Back Transactions, this shall be specified in Annex 2 hereto, and\nthe provisions of the Buy/Sell Back Annex shall apply to such Buy/Sell\nBack Transactions;\nii) Net Paying Securities, this shall be specified in Annex 2 hereto and the\nprovisions of Annex 2 , paragraph 1(b) shall apply to Transactions\ninvolving Net Paying Securities.\nd) If Transactions are to be effected under this Agreement by either party as an\nagent, this shall be specified in Annex 2 hereto, and the provisions of the Agency\nAnnex shall apply to such Agency Transactions.\n\n2) Definitions\na) \"Act of Insolvency\" shall occur with respect to any party hereto upon -\ni) its making a general assignment for the benefit of, entering into a\nreorganisation, arrangement, or composition with creditors; or\nii) its admitting in writing that it is unable to pay its debts as they become due;\nor\niii) its seeking, consenting to or acquiescing in the appointment of any trustee,\nadministrator, receiver or liquidator or analogous officer of it or any\nmaterial part of its property; or\niv) the presentation or filing of a petition in respect of it (other than by the\ncounterparty to this Agreement in respect of any obligation under this\nAgreement) in any court or before any agency alleging or for the\nbankruptcy, winding-up or insolvency of such party (or any analogous\nproceeding) or seeking any reorganisation, arrangement, composition, re-\nadjustment, administration, liquidation, dissolution or similar relief under\nany present or future statute, law or regulation, such petition (except in the\ncase of a petition for winding-up or any analogous proceeding, in respect\nof which no such 30 day period shall apply) not having been stayed or\ndismissed within 30 days of its filing; or\nv) the appointment of a receiver, administrator, liquidator or trustee or\nanalogous officer of such party or over all or any material part of such\nparty's property; or\nvi) the convening of any meeting of its creditors for the purposes of\nconsidering a voluntary winding up of and by such (or any analogous\nproceeding);\nb) \"Agency Transaction\", the meaning specified in paragraph 1 of the Agency\nAnnex;\nc) \"Appropriate Market\", the meaning specified in paragraph 10;\nd) \"Base Currency\", shall mean the Kenya Shilling.\ne) “Bank” for the purposes of this Agreement means the Central Bank of Kenya\nestablished under Article 231 of The Constitution of Kenya, 2010.\n2\n\nf) \"Business Day\" means a day which participant banks and the Bank are open for\ngeneral banking business in Kenya and on which the KEPSS is operating to\nprocess Payment Instructions and Account Transfers.\ng) “Cash Margin\", a cash sum paid to Buyer or Seller in accordance with paragraph\n4;\nh) “Central Bank Rate” (CBR), means the lowest rate of interest the Bank shall\ncharge on loans to banks as lender of last resort:\ni) \"CDS”, the Central Depository System which means a depository system for\nGovernment securities;\nj) \"Confirmation\", the meaning specified in paragraph 3(b);\nk) \"Contractual Currency\", the meaning specified in paragraph 7(a);\nl) \"Defaulting Party\", the meaning specified in paragraph 10;\nm) \"Default Market Value\", the meaning specified in paragraph 10;\nn) \"Default Notice\", a written notice served by the non-Defaulting Party on the\nDefaulting Party under paragraph 10 stating that an event shall be treated as an\nEvent of Default for the purposes of this Agreement;\no) \"Default Valuation Notice\", the meaning specified in paragraph 10;\np) \"Default Valuation Time\", the meaning specified in paragraph 10;\nq) \"Deliverable Securities\", the meaning specified in paragraph 10;\nr) \"Designated Office\", with respect to a party, a branch or office of that party which\nis specified as such in Annex 2 hereto or such other branch or office as may be\nagreed to by the parties;\ns) \"Distributions\", the meaning specified in sub-paragraph (w) below;\nt) \"Equivalent Margin Securities\", Securities equivalent to Securities previously\ntransferred as Margin Securities;\nu) \"Equivalent Securities\", with respect to a Transaction, Securities equivalent to\nPurchased Securities under that Transaction. If and to the extent that such\nPurchased Securities have been redeemed, the expression shall mean a sum of\nmoney equivalent to the proceeds of the redemption;\n3\n\nv) Securities are \"equivalent to\" other Securities for the purposes of this Agreement\nif they are: (i) of the same issuer; (ii) part of the same issue; and (iii) of an\nidentical type, nominal value, description and (except where otherwise stated)\namount as those other Securities, provided that –\nA) Securities will be equivalent to other Securities notwithstanding that those\nSecurities have been redenominated into any other currency or that the\nnominal value of those Securities has changed in connection with such\nredenomination; and\nB) where Securities have been converted, subdivided or consolidated or\nhave become the subject of a takeover or the holders of Securities have\nbecome entitled to receive or acquire other Securities or other property or\nthe Securities have become subject to any similar event, the expression\n\"equivalent to\" shall mean Securities equivalent to (as defined in the\nprovisions of this definition preceding the proviso) the original Securities\ntogether with or replaced by a sum of money or Securities or other\nproperty equivalent to (as so defined) that receivable by holders of such\noriginal Securities resulting from such event;\nw) \"Event of Default\", the meaning specified in paragraph 10;\nx) \"Income\", with respect to any Security at any time, all interest, dividends or other\ndistributions thereon, but excluding distributions which are a payment or\nrepayment of principal in respect of the relevant securities (\"Distributions\");\ny) \"Income Payment Date\", with respect to any Securities, the date on which\nIncome is paid in respect of such Securities or, in the case of registered\nSecurities, the date by reference to which particular registered holders are\nidentified as being entitled to payment of Income;\nz) “KEPSS”, the Kenya Electronic Payments and Settlement System.\naa) \"Register”, means the Domestic Debt Register that contains a record of all\nGovernment securities.\nbb) \"Margin Ratio\", with respect to a Transaction, the Market Value of the Purchased\nSecurities at the time when the Transaction was entered into divided by the\nPurchase Price (and so that, where a Transaction relates to Securities of\ndifferent descriptions and the Purchase Price is apportioned by the parties\namong Purchased Securities of each such description, a separate Margin Ratio\nshall apply in respect of Securities of each such description), or such other\nproportion as the parties may agree with respect to that Transaction;\n4\n\ncc) \"Margin Securities\", in relation to a Margin Transfer, Securities reasonably\nacceptable to the party calling for such Margin Transfer;\ndd) \"Margin Transfer\", any, or any combination of, the payment or repayment of\nCash Margin and the transfer of Margin Securities or Equivalent Margin\nSecurities;\nee) \"Market Value\", with respect to any Securities as of any time on any date, the\nprice for such Securities at such time on such date obtained from a generally\nrecognized source agreed to by the parties (and where different prices are\nobtained for different delivery dates, the price so obtainable for the earliest\navailable such delivery date) (provided that the price of Securities that are\nsuspended shall (for the purposes of paragraph 4) be nil unless the parties\notherwise agree and (for all other purposes) shall be the price of those Securities\nas of close of business on the dealing day in the relevant market last preceding\nthe date of suspension) plus the aggregate amount of Income which, as of such\ndate, has accrued but not yet been paid in respect of the Securities to the extent\nnot included in such price as of such date, and for these purposes any sum in a\ncurrency other than the Contractual Currency for the Transaction in question\nshall be converted into such Contractual Currency at the Spot Rate prevailing at\nthe relevant time;\nff) \"Net Exposure\", the meaning specified in paragraph 4(c);\ngg) the \"Net Margin\" provided to a party at any time, the excess (if any) at that time\nof (i) the sum of the amount of Cash Margin paid to that party (including accrued\ninterest on such Cash Margin which has not been paid to the other party) and the\nMarket Value of Margin Securities transferred to that party under paragraph 4(a)\n(excluding any Cash Margin which has been repaid to the other party and any\nMargin Securities in respect of which Equivalent Margin Securities have been\ntransferred to the other party) over (ii) the sum of the amount of Cash Margin\npaid to the other party (including accrued interest on such Cash Margin which\nhas not been paid by the other party) and the Market Value of Margin Securities\ntransferred to the other party under paragraph 4(a) (excluding any Cash Margin\nwhich has been repaid by the other party and any Margin Securities in respect of\nwhich Equivalent Margin Securities have been transferred by the other party) and\nfor this purpose any amounts not denominated in the Base Currency shall be\nconverted into the Base Currency at the Spot Rate prevailing at the relevant time;\nhh) \"Net Paying Securities\", Securities which are of a kind such that, were they to be\nthe subject of a Transaction to which paragraph 5 applies, any payment made by\nBuyer under paragraph 5 would be one in respect of which either Buyer would or\nmight be required to make a withholding or deduction for or on account of taxes\nor duties or Seller might be required to make or account for a payment for or on\naccount of taxes or duties (in each case other than tax on overall net income) by\nreference to such payment;\n5\n\nii) \"Net Value\", the meaning specified in paragraph 10;\njj) \"New Purchased Securities\", the meaning specified in paragraph 8(a);\nkk) \"Price Differential\", with respect to any Transaction as of any date, the aggregate\namount obtained by daily application of the Pricing Rate for such Transaction to\nthe Purchase Price for such Transaction (on a 360 day basis or 365 day basis in\naccordance with the applicable ISMA convention, unless otherwise agreed\nbetween the parties for the Transaction), for the actual number of days during the\nperiod commencing on (and including) the Purchase Date for such Transaction\nand ending on (but excluding) the date of calculation or, if earlier, the\nRepurchase Date;\nll) \"Pricing Rate\", with respect to any Transaction, the per annum percentage rate\nfor calculation of the Price Differential agreed to by Buyer and Seller in relation to\nthat Transaction;\nmm) \"Purchase Date\", with respect to any Transaction, the date on which Purchased\nSecurities are to be sold by Seller to Buyer in relation to that Transaction;\nnn) \"Purchase Price\", on the Purchase Date, the price at which Purchased Securities\nare sold or are to be sold by Seller to Buyer;\noo) \"Purchased Securities\", with respect to any Transaction, the Securities sold or to\nbe sold by Seller to Buyer under that Transaction, and any New Purchased\nSecurities transferred by Seller to Buyer under paragraph 8 in respect of that\nTransaction;\npp) \"Receivable Securities\", the meaning specified in paragraph 10;\nqq) \"Repurchase Date\", with respect to any Transaction, the date on which Buyer is\nto sell Equivalent Securities to Seller in relation to that Transaction;\nrr) \"Repurchase Price\", with respect to any Transaction and as of any date, the sum\nof the Purchase Price and the Price Differential as of such date;\nss) \"Special Default Notice\", the meaning specified in paragraph 14;\ntt) \"Spot Rate\", where an amount in one currency is to be converted into a second\ncurrency on any date, unless the parties otherwise agree, the foreign currency\nindicative rate for the day quoted by the Bank for the sale by it of such second\ncurrency against a purchase by it of such first currency;\nuu) \"Term\", with respect to any Transaction, the interval of time commencing with the\nPurchase Date and ending with the Repurchase Date;\n6\n\nvv) \"Termination\", with respect to any Transaction, refers to the requirement with\nrespect to such Transaction for Buyer to sell Equivalent Securities against\npayment by Seller of the Repurchase Price in accordance with paragraph 3(f),\nand reference to a Transaction having a \"fixed term\" or being \"terminable upon\ndemand\" shall be construed accordingly;\nww) \"Transaction Costs\", the meaning specified in paragraph 10;\nxx) \"Transaction Exposure\", with respect to any Transaction at any time during the\nperiod from the Purchase Date to the Repurchase Date (or, if later, the date on\nwhich Equivalent Securities are delivered to Seller or the Transaction is\nterminated under paragraph 10(g) or 10(h)), the difference between (i) the\nRepurchase Price at such time multiplied by the applicable Margin Ratio (or,\nwhere the Transaction relates to Securities of more than one description to which\ndifferent Margin Ratios apply, the amount produced by multiplying the\nRepurchase Price attributable to Equivalent Securities of each such description\nby the applicable Margin Ratio and aggregating the resulting amounts, the\nRepurchase Price being for this purpose attributed to Equivalent Securities of\neach such description in the same proportions as those in which the Purchase\nPrice was apportioned among the Purchased Securities) and (ii) the Market\nValue of Equivalent Securities at such time. If (i) is greater than (ii), Buyer has a\nTransaction Exposure for that Transaction equal to that excess. If (ii) is greater\nthan (i), Seller has a Transaction Exposure for that Transaction equal to that\nexcess; and\nyy) except in paragraphs 14(b)(i) and 18, references in this Agreement to \"written\"\ncommunications and communications \"in writing\" include communications made\nthrough any electronic system agreed between the parties which is capable of\nreproducing such communication in hard copy form.\n3) Initiation; Confirmation; Termination\na) A Transaction may be entered into orally or in writing at the initiation of either\nBuyer or Seller.\nb) Upon agreeing to enter into a Transaction hereunder Buyer or Seller (or both), as\nshall have been agreed, shall promptly deliver to the other party written\nconfirmation of such Transaction (a \"Confirmation\").\nThe Confirmation shall describe the Purchased Securities (including CUSIP\nNumber ie. Committee on Uniform Securities Identification Procedures Number\nor ISIN ie. International Securities Identification Number or other identifying\nnumber or numbers, if any), identify Buyer and Seller and set forth –\n(i) the Purchase Date;\n7\n\n(ii) the Purchase Price;\n(iii) the Repurchase Date, unless the Transaction is to be terminable on\ndemand (in which case the Confirmation shall state that it is terminable on\ndemand);\n(iv) the Pricing Rate applicable to the Transaction;\n(v) in respect of each party the details of the bank account[s] to which\npayments to be made hereunder are to be credited;\n(vi) where the Buy/Sell Back Annex applies, whether the Transaction is a\nRepurchase Transaction or a Buy/Sell Back Transaction;\n(vii) where the Agency Annex applies, whether the Transaction is an Agency\nTransaction and, if so, the identity of the party which is acting as agent\nand the name, code or identifier of the Principal; and\n(viii) any additional terms or conditions of the Transaction; and may be in the\nform of Annex II hereto or may be in any other form to which the parties\nagree.\nThe Confirmation relating to a Transaction shall, together with this Agreement,\nconstitute prima facie evidence of the terms agreed between Buyer and Seller for\nthat Transaction, unless objection is made with respect to the Confirmation promptly\nafter receipt thereof. In the event of any conflict between the terms of such\nConfirmation and this Agreement, the Confirmation shall prevail in respect of that\nTransaction and those terms only.\nc) On the Purchase Date for a Transaction, Seller shall transfer the Purchased\nSecurities to Buyer or its agent against the payment of the Purchase Price by\nBuyer.\nd) Termination of a Transaction will be effected, in the case of on demand\nTransactions, on the date specified for Termination in such demand, and, in\nthe case of fixed term Transactions, on the date fixed for Termination.\ne) In the case of on demand Transactions, demand for Termination shall be\nmade by Buyer or Seller, by telephone or otherwise, and shall provide for\nTermination to occur after not less than the minimum period as is customarily\nrequired for the settlement or delivery of money or Equivalent Securities of\nthe relevant kind.\nf) On the Repurchase Date, Buyer shall transfer to Seller or its agent Equivalent\nSecurities against the payment of the Repurchase Price by Seller (less any\namount then payable and unpaid by Buyer to Seller pursuant to paragraph 5).\n8\n\n4) Margin Maintenance\na) If at any time either party has a Net Exposure in respect of the other party it\nmay by notice to the other party require the other party to make a Margin\nTransfer to it of an aggregate amount or value at least equal to that Net\nExposure.\nb) A notice under sub-paragraph (a) above may be given orally or in writing.\nc) For the purposes of this Agreement a party has a Net Exposure in respect of\nthe other party if the aggregate of all the first party's Transaction Exposures\nplus any amount payable to the first party under paragraph 5 but unpaid less\nthe amount of any Net Margin provided to the first party exceeds the\naggregate of all the other party's Transaction Exposures plus any amount\npayable to the other party under paragraph 5 but unpaid less the amount of\nany Net Margin provided to the other party; and the amount of the Net\nExposure is the amount of the excess. For this purpose any amounts not\ndenominated in the Base Currency shall be converted into the Base Currency\nat the Spot Rate prevailing at the relevant time.\nd) To the extent that a party calling for a Margin Transfer has previously paid\nCash Margin which has not been repaid or delivered Margin Securities in\nrespect of which Equivalent Margin Securities have not been delivered to it,\nthat party shall be entitled to require that such Margin Transfer be satisfied\nfirst by the repayment of such Cash Margin or the delivery of Equivalent\nMargin Securities but, subject to this, the composition of a Margin Transfer\nshall be at the option of the party making such Margin Transfer.\ne) Any Cash Margin transferred shall be in the Base Currency or such other\ncurrency as the parties may agree.\nf) A payment of Cash Margin shall give rise to a debt owing from the party\nreceiving such payment to the party making such payment. Such debt shall\nbear interest at such rate, payable at such times, as may be specified in\nAnnex 2 hereto in respect of the relevant currency or otherwise agreed\nbetween the parties, and shall be repayable subject to the terms of this\nAgreement.\ng) Where Seller or Buyer becomes obliged under sub-paragraph (a) above to\nmake a Margin Transfer, it shall transfer Cash Margin or Margin Securities or\nEquivalent Margin Securities within the minimum period specified in Annex 2\nhereto or, if no period is there specified, such minimum period as is\ncustomarily required for the settlement or delivery of money, Margin\nSecurities or Equivalent Margin Securities of the relevant kind.\n9\n\nh) The parties may agree that, with respect to any Transaction, the provisions of\nsubparagraphs (a) to (g) above shall not apply but instead that margin may be\nprovided separately in respect of that Transaction in which case –\n(i) that Transaction shall not be taken into account when calculating\nwhether either party has a Net Exposure;\n(ii) margin shall be provided in respect of that Transaction in such manner\nas the parties may agree; and\n(iii) margin provided in respect of that Transaction shall not be taken into\naccount for the purposes of sub-paragraphs (a) to (g) above.\ni) The parties may agree that any Net Exposure which may arise shall be\neliminated not by Margin Transfers under the preceding provisions of this\nparagraph but by the repricing of Transactions under sub-paragraph (j) below,\nthe adjustment of Transactions under sub-paragraph (k) below or a\ncombination of both these methods.\nj) Where the parties agree that a Transaction is to be repriced under this sub-\nparagraph, such repricing shall be effected as follows –\n(i) the Repurchase Date under the relevant Transaction (the \"Original\nTransaction\") shall be deemed to occur on the date on which the\nrepricing is to be effected (the \"Repricing Date\");\n(ii) the parties shall be deemed to have entered into a new Transaction\n(the \"Repriced Transaction\") on the terms set out in (iii) to (vi) below;\n(iii) the Purchased Securities under the Repriced Transaction shall be\nSecurities equivalent to the Purchased Securities under the Original\nTransaction;\n(iv) the Purchase Date under the Repriced Transaction shall be the\nRepricing Date;\n(v) the Purchase Price under the Repriced Transaction shall be such\namount as shall, when multiplied by the Margin Ratio applicable to the\nOriginal Transaction, be equal to the Market Value of such Securities\non the Repricing Date;\n(vi) the Repurchase Date, the Pricing Rate, the Margin Ratio and, subject\nas aforesaid, the other terms of the Repriced Transaction shall be\nidentical to those of the Original Transaction; (vii) the obligations of the\nparties with respect to the delivery of the Purchased Securities and the\npayment of the Purchase Price under the Repriced Transaction shall\n10\n\nbe set off against their obligations with respect to the delivery of\nEquivalent Securities and payment of the Repurchase Price under the\nOriginal Transaction and accordingly only a net cash sum shall be paid\nby one party to the other. Such net cash sum shall be paid within the\nperiod specified in sub-paragraph (g) above.\nk) The adjustment of a Transaction (the \"Original Transaction\") under this sub-\nparagraph shall be effected by the parties agreeing that on the date on which\nthe adjustment is to be made (the \"Adjustment Date\") the Original Transaction\nshall be terminated and they shall enter into a new Transaction (the\n\"Replacement Transaction\") in accordance with the following provisions –\n(i) the Original Transaction shall be terminated on the Adjustment Date on\nsuch terms as the parties shall agree on or before the Adjustment Date;\n(ii) the Purchased Securities under the Replacement Transaction shall be\nsuch Securities as the parties shall agree on or before the Adjustment\nDate (being Securities the aggregate Market Value of which at the\nAdjustment Date is substantially equal to the Repurchase Price under\nthe Original Transaction at the Adjustment Date multiplied by the\nMargin Ratio applicable to the Original Transaction);\n(iii) the Purchase Date under the Replacement Transaction shall be the\nAdjustment Date;\n(iv) the other terms of the Replacement Transaction shall be such as the\nparties shall agree on or before the Adjustment Date; and\n(v) the obligations of the parties with respect to payment and delivery of\nSecurities on the Adjustment Date under the Original Transaction and\nthe Replacement Transaction shall be settled in accordance with\nparagraph 6 within the minimum period specified in sub-paragraph (g)\nabove.\n5) Income Payments\nUnless otherwise agreed –\ni) where the Term of a particular Transaction extends over an Income Payment\nDate in respect of any Securities subject to that Transaction, Buyer shall on the\ndate such Income is paid by the issuer transfer to or credit to the account of\nSeller an amount equal to (and in the same currency as) the amount paid by the\nissuer;\nii) where Margin Securities are transferred from one party (\"the first party\") to the\nother party (\"the second party\") and an Income Payment Date in respect of such\n11\n\nSecurities occurs before Equivalent Margin Securities are transferred by the\nsecond party to the first party, the second party shall on the date such Income is\npaid by the issuer transfer to or credit to the account of the first party an amount\nequal to (and in the same currency as) the amount paid by the issuer;\nand for the avoidance of doubt references in this paragraph to the amount of any\nIncome paid by the issuer of any Securities shall be to an amount paid without any\nwithholding or deduction for or on account of taxes or duties notwithstanding that a\npayment of such Income made in certain circumstances may be subject to such a\nwithholding or deduction.\n6) Payment and Transfer\na) Unless otherwise agreed, all money paid hereunder shall be in immediately\navailable freely convertible funds of the relevant currency. All Securities to be\ntransferred hereunder (i) shall be in suitable form for transfer and shall be\naccompanied by duly executed instruments of transfer or assignment in blank\n(where required for transfer) and such other documentation as the transferee\nmay reasonably request, or (ii) shall be transferred through the Register, or (iii)\nshall be transferred through any other agreed securities clearance system or (iv)\nshall be transferred by any other method mutually acceptable to Seller and Buyer.\nb) Unless otherwise agreed, all money payable by one party to the other in respect\nof any Transaction shall be paid free and clear of, and without withholding or\ndeduction for, any taxes or duties of whatsoever nature imposed, levied,\ncollected, withheld or assessed by any authority having power to tax, unless the\nwithholding or deduction of such taxes or duties is required by law. In that event,\nunless otherwise agreed, the paying party shall pay such additional amounts as\nwill result in the net amounts receivable by the other party (after taking account of\nsuch withholding or deduction) being equal to such amounts as would have been\nreceived by it had no such taxes or duties been required to be withheld or\ndeducted.\nc) Unless otherwise agreed in writing between the parties, under each Transaction\ntransfer of Purchased Securities by Seller and payment of Purchase Price by\nBuyer against the transfer of such Purchased Securities shall be made\nsimultaneously and transfer of Equivalent Securities by Buyer and payment of\nRepurchase Price payable by Seller against the transfer of such Equivalent\nSecurities shall be made simultaneously.\nd) Subject to and without prejudice to the provisions of sub-paragraph 6(c), either\nparty may from time to time in accordance with market practice and in recognition\nof the practical difficulties in arranging simultaneous delivery of Securities and\nmoney waive in relation to any Transaction its rights under this Agreement to\nreceive simultaneous transfer and/or payment provided that transfer and/or\npayment shall, notwithstanding such waiver, be made on the same day and\n12\n\nprovided also that no such waiver in respect of one Transaction shall affect or\nbind it in respect of any other Transaction.\ne) The parties shall execute and deliver all necessary documents and take all\nnecessary steps to procure that all right, title and interest in any Purchased\nSecurities, any Equivalent Securities, any Margin Securities and any Equivalent\nMargin Securities shall pass to the party to which transfer is being made upon\ntransfer of the same in accordance with this Agreement, free from all liens,\nclaims, charges and encumbrances.\nf) Notwithstanding the use of expressions such as \"Repurchase Date\",\n\"Repurchase Price\", \"margin\", \"Net Margin\", \"Margin Ratio\" and \"substitution\",\nwhich are used to reflect terminology used in the market for transactions of the\nkind provided for in this Agreement, all right, title and interest in and to Securities\nand money transferred or paid under this Agreement shall pass to the transferee\nupon transfer or payment, the obligation of the party receiving Purchased\nSecurities or Margin Securities being an obligation to transfer Equivalent\nSecurities or Equivalent Margin Securities.\ng) Time shall be of the essence in this Agreement.\nh) Subject to paragraph 10, all amounts in the same currency payable by each party\nto the other under any Transaction or otherwise under this Agreement on the\nsame date shall be combined in a single calculation of a net sum payable by one\nparty to the other and the obligation to pay that sum shall be the only obligation\nof either party in respect of those amounts.\ni) Subject to paragraph 10, all Securities of the same issue, denomination, currency\nand series, transferable by each party to the other under any Transaction or\nhereunder on the same date shall be combined in a single calculation of a net\nquantity of Securities transferable by one party to the other and the obligation to\ntransfer the net quantity of Securities shall be the only obligation of either party in\nrespect of the Securities so transferable and receivable.\nj) If the parties have specified in Annex 2 hereto that this paragraph 6(j) shall apply,\neach obligation of a party under this Agreement (other than an obligation arising\nunder paragraph 10) is subject to the condition precedent that none of those\nevents specified in paragraph 10(a) which are identified in Annex 2 hereto for the\npurposes of this paragraph 6(j) (being events which, upon the serving of a\nDefault Notice, would be an Event of Default with respect to the other party) shall\nhave occurred and be continuing with respect to the other party.\n13\n\n7) Contractual Currency\na) All the payments made in respect of the Purchase Price or the Repurchase Price\nof any Transaction shall be made in the currency of the Purchase Price (the\n\"Contractual Currency\") save as provided in paragraph 10(c)(ii). Notwithstanding\nthe foregoing, the payee of any money may, at its option, accept tender thereof in\nany other currency, provided, however, that, to the extent permitted by applicable\nlaw, the obligation of the payer to pay such money will be discharged only to the\nextent of the amount of the Contractual Currency that such payee may,\nconsistent with normal banking procedures, purchase with such other currency\n(after deduction of any premium and costs of exchange) for delivery within the\ncustomary delivery period for spot transactions in respect of the relevant\ncurrency.\nb) If for any reason the amount in the Contractual Currency received by a party,\nincluding amounts received after conversion of any recovery under any judgment\nor order expressed in a currency other than the Contractual Currency, falls short\nof the amount in the Contractual Currency due and payable, the party required to\nmake the payment will, as a separate and independent obligation, to the extent\npermitted by applicable law, immediately transfer such additional amount in the\nContractual Currency as may be necessary to compensate for the shortfall.\nc) If for any reason the amount in the Contractual Currency received by a party\nexceeds the amount of the Contractual Currency due and payable, the party\nreceiving the transfer will refund promptly the amount of such excess.\n8) Substitution\na) A Transaction may at any time between the Purchase Date and Repurchase\nDate, if Seller so requests and Buyer so agrees and with the concurrence of the\nBank, be varied by the transfer by Buyer to Seller of Securities equivalent to the\nPurchased Securities, or to such of the Purchased Securities as shall be agreed,\nin exchange for the transfer by Seller to Buyer of other Securities of such amount\nand description as shall be agreed (\"New Purchased Securities\") (being\nSecurities having a Market Value at the date of the variation at least equal to the\nMarket Value of the Equivalent Securities transferred to Seller).\nb) Any variation under sub-paragraph (a) above shall be effected, subject to\nparagraph 6(d), by the simultaneous transfer of the Equivalent Securities and\nNew Purchased Securities concerned.\nc) A Transaction which is varied under sub-paragraph (a) above shall thereafter\ncontinue in effect as though the Purchased Securities under that Transaction\nconsisted of or included the New Purchased Securities instead of the Securities\nin respect of which Equivalent Securities have been transferred to Seller.\n14\n\nd) Where either party has transferred Margin Securities to the other party it may at\nany time before Equivalent Margin Securities are transferred to it under\nparagraph 4 request the other party to transfer Equivalent Margin Securities to it\nin exchange for the transfer to the other party of new Margin Securities having a\nMarket Value at the time of transfer at least equal to that of such Equivalent\nMargin Securities. If the other party agrees to the request, the exchange shall be\neffected, subject to paragraph 6(d), by the simultaneous transfer of the\nEquivalent Margin Securities and new Margin Securities concerned. Where either\nor both of such transfers is or are effected through a settlement system in\ncircumstances which under the rules and procedures of that settlement system\ngive rise to a payment by or for the account of one party to or for the account of\nthe other party, the parties shall cause such payment or payments to be made\noutside that settlement system, for value the same day as the payments made\nthrough that settlement system, as shall ensure that the exchange of Equivalent\nMargin Securities and new Margin Securities effected under this sub-paragraph\ndoes not give rise to any net payment of cash by either party to the other.\n9) Representations\nEach party represents and warrants to the other that –\na) it is duly authorised to execute and deliver this Agreement, to enter into the\nTransactions contemplated hereunder and to perform its obligations hereunder\nand thereunder and has taken all necessary action to authorise such execution,\ndelivery and performance;\nb) it will engage in this Agreement and the Transactions contemplated hereunder\n(other than Agency Transactions) as principal;\nc) the person signing this Agreement on its behalf is, and any person representing it\nin entering into a Transaction will be, duly authorised to do so on its behalf;\nd) it has obtained all authorisations of any governmental or regulatory body required\nin connection with this Agreement and the Transactions contemplated hereunder\nand such authorisations are in full force and effect;\ne) the execution, delivery and performance of this Agreement and the Transactions\ncontemplated hereunder will not violate any law, ordinance, charter, by-law or\nrule applicable to it or any agreement by which it is bound or by which any of its\nassets are affected;\nf) it has satisfied itself and will continue to satisfy itself as to the tax implications of\nthe Transactions contemplated hereunder;\ng) in connection with this Agreement and each Transaction –\n15\n\ni) unless there is a written agreement with the other party to the contrary, it\nis not relying on any advice (whether written or oral) of the other party,\nother than the representations expressly set out in this Agreement;\nii) it has made and will make its own decisions regarding the entering into of\nany Transaction based upon its own judgment and upon advice from such\nprofessional advisers as it has deemed it necessary to consult;\niii) it understands the terms, conditions and risks of each Transaction and is\nwilling to assume (financially and otherwise) those risks; and\nh) at the time of transfer to the other party of any Securities it will have the full and\nunqualified right to make such transfer and that upon such transfer of Securities\nthe other party will receive all right, title and interest in and to those Securities\nfree of any lien, claim, charge or encumbrance.\nOn the date on which any Transaction is entered into pursuant hereto, and on\neach day on which Securities, Equivalent Securities, Margin Securities or\nEquivalent Margin Securities are to be transferred under any Transaction, Buyer\nand Seller shall each be deemed to repeat all the foregoing representations. For\nthe avoidance of doubt and notwithstanding any arrangements which Seller or\nBuyer may have with any third party, each party will be liable as a principal for its\nobligations under this Agreement and each Transaction.\n10) Events of Default\na) If any of the following events (each an \"Event of Default\") occurs in relation to\neither party (the \"Defaulting Party\", the other party being the \"non-Defaulting\nParty\") whether acting as Seller or Buyer –\ni) Buyer fails to pay the Purchase Price upon the applicable Purchase Date\nor Seller fails to pay the Repurchase Price upon the applicable\nRepurchase Date, and the non-Defaulting Party serves a Default Notice\non the Defaulting Party; or\nii) if the parties have specified in Annex 2 hereto that this sub-paragraph\nshall apply, Seller fails to deliver Purchased Securities on the Purchase\nDate or Buyer fails to deliver Equivalent Securities on the Repurchase\nDate, and the non-Defaulting Party serves a Default Notice on the\nDefaulting Party; or\niii) Seller or Buyer fails to pay when due any sum payable under sub-\nparagraph (g) or (h) below, and the non-Defaulting Party serves a Default\nNotice on the Defaulting Party; or\n16\n\niv) Seller or Buyer fails to comply with paragraph 4 and the non-Defaulting\nParty serves a Default Notice on the Defaulting Party; or\nv) Seller or Buyer fails to comply with paragraph 5 and the non-Defaulting\nParty serves a Default Notice on the Defaulting Party; or\nvi) an Act of Insolvency occurs with respect to Seller or Buyer and (except in\nthe case of an Act of Insolvency which is the presentation of a petition for\nwinding-up or any analogous proceeding or the appointment of a liquidator\nor analogous officer of the Defaulting Party in which case no such notice\nshall be required) the non-Defaulting Party serves a Default Notice on the\nDefaulting Party; or\nvii) any representations made by Seller or Buyer are incorrect or untrue in any\nmaterial respect when made or repeated or deemed to have been made\nor repeated, and the non-Defaulting Party serves a Default Notice on the\nDefaulting Party; or\nviii) Seller or Buyer admits to the other that it is unable to, or intends not to,\nperform any of its obligations hereunder and/or in respect of any\nTransaction and the non-Defaulting Party serves a Default Notice on the\nDefaulting Party; or\nix) Seller or Buyer is suspended or expelled from membership of or\nparticipation in any securities exchange or association or other self\nregulating organization, or suspended from dealing in securities by any\ngovernment agency, or any of the assets of either Seller or Buyer or the\nassets of investors held by, or to the order of, Seller or Buyer are\ntransferred or ordered to be transferred to a trustee by a regulatory\nauthority pursuant to any securities regulating legislation and the non-\nDefaulting Party serves a Default Notice on the Defaulting Party; or\nx) Seller or Buyer fails to perform any other of its obligations hereunder and\ndoes not remedy such failure within 30 days after notice is given by the\nnon- Defaulting Party requiring it to do so, and the non-Defaulting Party\nserves a Default Notice on the Defaulting Party;\nthen sub-paragraphs (b) to (f) below shall apply.\nb) The Repurchase Date for each Transaction hereunder shall be deemed\nimmediately to occur and, subject to the following provisions, all Cash Margin\n(including interest accrued) shall be immediately repayable and Equivalent\nMargin Securities shall be immediately deliverable (and so that, where this sub-\nparagraph applies, performance of the respective obligations of the parties with\nrespect to the delivery of Securities, the payment of the Repurchase Prices for\n17\n\nany Equivalent Securities and the repayment of any Cash Margin shall be\neffected only in accordance with the provisions of sub-paragraph (c) below).\nc) i) The Default Market Values of the Equivalent Securities and any\nEquivalent Margin Securities to be transferred, the amount of any Cash\nMargin (including the amount of interest accrued) to be transferred and the\nRepurchase Prices to be paid by each party shall be established by the\nnon-Defaulting Party for all Transactions as at the Repurchase Date; and\nii) on the basis of the sums so established, an account shall be taken (as at\nthe Repurchase Date) of what is due from each party to the other under\nthis Agreement (on the basis that each party's claim against the other in\nrespect of the transfer to it of Equivalent Securities or Equivalent Margin\nSecurities under this Agreement equals the Default Market Value therefor)\nand the sums due from one party shall be set off against the sums due\nfrom the other and only the balance of the account shall be payable (by\nthe party having the claim valued at the lower amount pursuant to the\nforegoing) and such balance shall be due and payable on the next\nfollowing Business Day. For the purposes of this calculation, all sums not\ndenominated in the Base Currency shall be converted into the Base\nCurrency on the relevant date at the Spot Rate prevailing at the relevant\ntime.\nd) For the purposes of this Agreement, the \"Default Market Value\" of any Equivalent\nSecurities or Equivalent Margin Securities shall be determined in accordance\nwith sub-paragraph (e) below, and for this purpose –\ni) the \"Appropriate Market\" means, in relation to Securities of any description,\nthe market which is the most appropriate market for Securities of that\ndescription, as determined by the non-Defaulting Party;\nii) the \"Default Valuation Time\" means, in relation to an Event of Default, the\nclose of business in the Appropriate Market on the fifth dealing day after\nthe day on which that Event of Default occurs or, where that Event of\nDefault is the occurrence of an Act of Insolvency in respect of which under\nparagraph 10(a) no notice is required from the non-Defaulting Party in\norder for such event to constitute an Event of Default, the close of\nbusiness on the fifth dealing day after the day on which the non-Defaulting\nParty first became aware of the occurrence of such Event of Default;\niii) \"Deliverable Securities\" means Equivalent Securities or Equivalent Margin\nSecurities to be delivered by the Defaulting Party;\niv) \"Net Value\" means at any time, in relation to any Deliverable Securities or\nReceivable Securities, the amount which, in the reasonable opinion of the\nnon-Defaulting Party, represents their fair market value, having regard to\n18\n\nsuch pricing sources and methods (which may include, without limitation,\navailable prices for Securities with similar maturities, terms and credit\ncharacteristics as the relevant Equivalent Securities or Equivalent Margin\nSecurities) as the non-Defaulting Party considers appropriate, less, in the\ncase of Receivable Securities, or plus, in the case of Deliverable\nSecurities, all Transaction Costs which would be incurred in connection\nwith the purchase or sale of such Securities;\nv) \"Receivable Securities\" means Equivalent Securities or Equivalent Margin\nSecurities to be delivered to the Defaulting Party; and\nvi) \"Transaction Costs\" in relation to any transaction contemplated in\nparagraph 10(d) or (e) means the reasonable costs, commission, fees and\nexpenses (including any mark-up or mark-down) that would be incurred in\nconnection with the purchase of Deliverable Securities or sale of\nReceivable Securities, calculated on the assumption that the aggregate\nthereof is the least that could reasonably be expected to be paid in order\nto carry out the transaction;\ne) i) If between the occurrence of the relevant Event of Default and the Default\nValuation Time the non-Defaulting Party gives to the Defaulting Party a\nwritten notice (a \"Default Valuation Notice\") which –\nA) states that, since the occurrence of the relevant Event of Default, the non-\nDefaulting Party has sold, in the case of Receivable Securities, or\npurchased, in the case of Deliverable Securities, Securities which form\npart of the same issue and are of an identical type and description as\nthose Equivalent Securities or Equivalent Margin Securities, and that the\nnon-Defaulting Party elects to treat as the Default Market Value -\naa in the case of Receivable Securities, the net proceeds of such sale\nafter deducting all reasonable costs, fees and expenses incurred in\nconnection therewith (provided that, where the Securities sold are\nnot identical in amount to the Equivalent Securities or Equivalent\nMargin Securities, the non-Defaulting Party may either (x) elect to\ntreat such net proceeds of sale divided by the amount of Securities\nsold and multiplied by the amount of the Equivalent Securities or\nEquivalent Margin Securities as the Default Market Value or (y)\nelect to treat such net proceeds of sale of the Equivalent Securities\nor Equivalent Margin Securities actually sold as the Default Market\nValue of that proportion of the Equivalent Securities or Equivalent\nMargin Securities, and, in the case of (y), the Default Market Value\nof the balance of the Equivalent Securities or Equivalent Margin\nSecurities shall be determined separately in accordance with the\nprovisions of this paragraph 10(e) and accordingly may be the\n19\n\nsubject of a separate notice (or notices) under this paragraph\n10(e)(i)); or\nbb in the case of Deliverable Securities, the aggregate cost of such\npurchase, including all reasonable costs, fees and expenses\nincurred in connection therewith (provided that, where the\nSecurities purchased are not identical in amount to the Equivalent\nSecurities or Equivalent Margin Securities, the non-Defaulting Party\nmay either (x) elect to treat such aggregate cost divided by the\namount of Securities sold and multiplied by the amount of the\nEquivalent Securities or Equivalent Margin Securities as the Default\nMarket Value or (y) elect to treat the aggregate cost of purchasing\nthe Equivalent Securities or Equivalent Margin Securities actually\npurchased as the Default Market Value of that proportion of the\nEquivalent Securities or Equivalent Margin Securities, and, in the\ncase of (y), the Default Market Value of the balance of the\nEquivalent Securities or Equivalent Margin Securities shall be\ndetermined separately in accordance with the provisions of this\nparagraph 10(e) and accordingly may be the subject of a separate\nnotice (or notices) under this paragraph 10(e)(i));\nB) states that the non-Defaulting Party has received, in the case of\nDeliverable Securities, offer quotations or, in the case of Receivable\nSecurities, bid quotations in respect of Securities of the relevant\ndescription from two or more market makers or regular dealers in the\nAppropriate Market in a commercially reasonable size (as determined by\nthe non-Defaulting Party) and specifies –\naa the price or prices quoted by each of them for, in the case of\nDeliverable Securities, the sale by the relevant market marker or\ndealer of such Securities or, in the case of Receivable Securities,\nthe purchase by the relevant market maker or dealer of such\nSecurities;\nbb the Transaction Costs which would be incurred in connection with\nsuch a transaction; and\ncc that the non-Defaulting Party elects to treat the price so quoted (or,\nwhere more than one price is so quoted, the arithmetic mean of the\nprices so quoted), after deducting, in the case of Receivable\nSecurities, or adding, in the case of Deliverable Securities, such\nTransaction Costs, as the Default Market Value of the relevant\nEquivalent Securities or Equivalent Margin Securities; or\nC) states –\n20\n\naa that either (x) acting in good faith, the non-Defaulting Party has\nendeavored but has been unable to sell or purchase Securities in\naccordance with sub-paragraph (i)(A) above or to obtain quotations\nin accordance with sub-paragraph (i)(B) above (or both) or (y) the\nnon-Defaulting Party has determined that it would not be\ncommercially reasonable to obtain such quotations, or that it would\nnot be commercially reasonable to use any quotations which it has\nobtained under sub-paragraph (i)(B) above; and\nbb that the non-Defaulting Party has determined the Net Value of the\nrelevant Equivalent Securities or Equivalent Margin Securities\n(which shall be specified) and that the non- Defaulting Party elects\nto treat such Net Value as the Default Market Value of the relevant\nEquivalent Securities or Equivalent Margin Securities,\nthen the Default Market Value of the relevant Equivalent Securities or\nEquivalent Margin Securities shall be an amount equal to the Default\nMarket Value specified in accordance with (A), (B)(cc) or, as the case may\nbe, (C)(bb) above.\nii) If by the Default Valuation Time the non-Defaulting Party has not given a\nDefault Valuation Notice, the Default Market Value of the relevant\nEquivalent Securities or Equivalent Margin Securities shall be an amount\nequal to their Net Value at the Default Valuation Time; provided that, if at\nthe Default Valuation Time the non-Defaulting Party reasonably\ndetermines that, owing to circumstances affecting the market in the\nEquivalent Securities or Equivalent Margin Securities in question, it is not\npossible for the non-Defaulting Party to determine a Net Value of such\nEquivalent Securities or Equivalent Margin Securities which is\ncommercially reasonable, the Default Market Value of such Equivalent\nSecurities or Equivalent Margin Securities shall be an amount equal to\ntheir Net Value as determined by the non-Defaulting Party as soon as\nreasonably practicable after the Default Valuation Time.\nf) The Defaulting Party shall be liable to the non-Defaulting Party for the amount of\nall reasonable legal and other professional expenses incurred by the non-\nDefaulting Party in connection with or as a consequence of an Event of Default,\ntogether with interest thereon at the Central Bank Rate or, in the case of an\nexpense attributable to a particular Transaction, the Pricing Rate for the relevant\nTransaction if that Pricing Rate is greater than the Central Bank Rate.\ng) If Seller fails to deliver Purchased Securities to Buyer on the applicable Purchase\nDate Buyer may –\ni) if it has paid the Purchase Price to Seller, require Seller immediately to\nrepay the sum so paid;\n21\n\nii) if Buyer has a Transaction Exposure to Seller in respect of the relevant\nTransaction, require Seller from time to time to pay Cash Margin at least\nequal to such Transaction Exposure;\niii) at any time while such failure continues, terminate the Transaction by\ngiving written notice to Seller. On such termination the obligations of Seller\nand Buyer with respect to delivery of Purchased Securities and Equivalent\nSecurities shall terminate and Seller shall pay to Buyer an amount equal\nto the excess of the Repurchase Price at the date of Termination over the\nPurchase Price.\nh) If Buyer fails to deliver Equivalent Securities to Seller on the applicable\nRepurchase Date Seller may –\ni) if it has paid the Repurchase Price to Buyer, require Buyer immediately to\nrepay the sum so paid;\nii) if Seller has a Transaction Exposure to Buyer in respect of the relevant\nTransaction, require Buyer from time to time to pay Cash Margin at least\nequal to such Transaction Exposure;\niii) at any time while such failure continues, by written notice to Buyer declare\nthat that Transaction (but only that Transaction) shall be terminated\nimmediately in accordance with sub-paragraph (c) above (disregarding for\nthis purpose references in that sub-paragraph to transfer of Cash Margin\nand delivery of Equivalent Margin Securities and as if references to the\nRepurchase Date were to the date on which notice was given under this\nsubparagraph).\ni) The provisions of this Agreement constitute a complete statement of the\nremedies available to each party in respect of any Event of Default.\nj) Subject to paragraph 10(k), neither party may claim any sum by way of\nconsequential loss or damage in the event of a failure by the other party to\nperform any of its obligations under this Agreement.\nk) i) Subject to sub-paragraph (ii) below, if as a result of a Transaction\nterminating before its agreed Repurchase Date under paragraphs 10(b),\n10(g)(iii) or 10(h)(iii), the non-Defaulting Party, in the case of paragraph\n10(b), Buyer, in the case of paragraph 10(g)(iii), or Seller, in the case of\nparagraph 10(h)(iii), (in each case the \"first party\") incurs any loss or\nexpense in entering into replacement transactions, the other party shall be\nrequired to pay to the first party the amount determined by the first party in\ngood faith to be equal to the loss or expense incurred in connection with\nsuch replacement transactions (including all fees, costs and other\n22\n\nexpenses) less the amount of any profit or gain made by that party in\nconnection with such replacement transactions; provided that if that\ncalculation results in a negative number, an amount equal to that number\nshall be payable by the first party to the other party.\nii) If the first party reasonably decides, instead of entering into such\nreplacement transactions, to replace or unwind any hedging transactions\nwhich the first party entered into in connection with the Transaction so\nterminating, or to enter into any replacement hedging transactions, the\nother party shall be required to pay to the first party the amount\ndetermined by the first party in good faith to be equal to the loss or\nexpense incurred in connection with entering into such replacement or\nunwinding (including all fees, costs and other expenses) less the amount\nof any profit or gain made by that party in connection with such\nreplacement or unwinding; provided that if that calculation results in a\nnegative number, an amount equal to that number shall be payable by the\nfirst party to the other party.\nl) Each party shall immediately notify the other if an Event of Default, or an event\nwhich, upon the serving of a Default Notice, would be an Event of Default, occurs\nin relation to it.\n11) Tax Event\na) This paragraph shall apply if either party notifies the other that –\ni) any action taken by a taxing authority or brought in a court of\ncompetent jurisdiction (regardless of whether such action is taken or\nbrought with respect to a party to this Agreement); or\nii) a change in the fiscal or regulatory regime (including, but not limited to,\na change in law or in the general interpretation of law but excluding\nany change in any rate of tax),\nhas or will, in the notifying party's reasonable opinion, have a material adverse\neffect on that party in the context of a Transaction.\nb) If so requested by the other party, the notifying party will furnish the other with\nan opinion of a suitably qualified adviser that an event referred to in sub-\nparagraph (a)(i) or (ii) above has occurred and affects the notifying party.\nc) Where this paragraph applies, the party giving the notice referred to in sub-\nparagraph (a) may, subject to sub-paragraph (d) below, terminate the\nTransaction with effect from a date specified in the notice, not being earlier\n(unless so agreed by the other party) than 30 days after the date of the notice,\nby nominating that date as the Repurchase Date.\n23\n\nd) If the party receiving the notice referred to in sub-paragraph (a) so elects, it\nmay override that notice by giving a counter-notice to the other party. If a\ncounter-notice is given, the party which gives the counter-notice will be\ndeemed to have agreed to indemnify the other party against the adverse\neffect referred to in sub-paragraph (a) so far as relates to the relevant\nTransaction and the original Repurchase Date will continue to apply.\ne) Where a Transaction is terminated as described in this paragraph, the party\nwhich has given the notice to terminate shall indemnify the other party against\nany reasonable legal and other professional expenses incurred by the other\nparty by reason of the termination, but the other party may not claim any sum\nby way of consequential loss or damage in respect of a termination in\naccordance with this paragraph.\nf) This paragraph is without prejudice to paragraph 6(b) (obligation to pay\nadditional amounts if withholding or deduction required); but an obligation to\npay such additional amounts may, where appropriate, be a circumstance\nwhich causes this paragraph to apply.\n12) Interest\nTo the extent permitted by applicable law, if any sum of money payable hereunder or\nunder any Transaction is not paid when due, interest shall accrue on the unpaid sum as\na separate debt at the greater of the Pricing Rate for the Transaction to which such sum\nrelates (where such sum is referable to a Transaction) and the Central Bank Rate on a\n360 day basis or 365 day basis in accordance with the applicable ISMA convention, for\nthe actual number of days during the period from and including the date on which\npayment was due to, but excluding, the date of payment.\n13) Single Agreement\nEach party acknowledges that, and has entered into this Agreement and will enter into\neach Transaction hereunder in consideration of and in reliance upon the fact that all\nTransactions hereunder constitute a single business and contractual relationship and\nare made in consideration of each other. Accordingly, each party agrees (i) to perform\nall of its obligations in respect of each Transaction hereunder, and that a default in the\nperformance of any such obligations shall constitute a default by it in respect of all\nTransactions hereunder, and (ii) that payments, deliveries and other transfers made by\neither of them in respect of any Transaction shall be deemed to have been made in\nconsideration of payments, deliveries and other transfers in respect of any other\nTransactions hereunder.\n14) Notices and Other Communications\na) Any notice or other communication to be given under this Agreement –\n24\n\ni) shall be in the English language, and except where expressly otherwise\nprovided in this Agreement, shall be in writing;\nii) may be given in any manner described in sub-paragraphs (b) and (c)\nbelow;\niii) shall be sent to the party to whom it is to be given at the address or\nnumber, or in accordance with the electronic messaging details, set out in\nAnnex 2 hereto.\nb) Subject to sub-paragraph (c) below, any such notice or other communication\nshall be effective –\ni) if in writing and delivered in person or by courier, at the time when it is\ndelivered;\nii) if sent by telex, at the time when the recipient's answerback is received;\niii) if sent by facsimile transmission, at the time when the transmission is\nreceived by a responsible employee of the recipient in legible form (it\nbeing agreed that the burden of proving receipt will be on the sender and\nwill not be met by a transmission report generated by the sender's\nfacsimile machine);\niv) if sent by certified or registered mail (airmail, if overseas) or the equivalent\n(return receipt requested), at the time when that mail is delivered or its\ndelivery is attempted;\nv) if sent by electronic messaging system, at the time that electronic\nmessage is received;\nexcept that any notice or communication which is received, or delivery of which is\nattempted, after close of business on the date of receipt or attempted delivery or\non a day which is not a day on which commercial banks are open for business in\nthe place where that notice or other communication is to be given shall be treated\nas given at the opening of business on the next following day which is such a day.\nc) If –\ni) there occurs in relation to either party an event which, upon the service of\na Default Notice, would be an Event of Default; and\nii) the non-Defaulting Party, having made all practicable efforts to do so,\nincluding having attempted to use at least two of the methods specified in\nsub-paragraph (b)(ii), (iii) or (v), has been unable to serve a Default Notice\n25\n\nby one of the methods specified in those sub-paragraphs (or such of those\nmethods as are normally used by the non-Defaulting Party when\ncommunicating with the Defaulting Party),\nthe non-Defaulting Party may sign a written notice (a \"Special Default Notice\")\nwhich –\naa specifies the relevant event referred to in paragraph 10(a) which has\noccurred in relation to the Defaulting Party;\nbb states that the non-Defaulting Party, having made all practicable\nefforts to do so, including having attempted to use at least two of the\nmethods specified in sub-paragraph (b)(ii), (iii) or (v), has been\nunable to serve a Default Notice by one of the methods specified in\nthose sub-paragraphs (or such of those methods as are normally\nused by the non-Defaulting Party when communicating with the\nDefaulting Party);\ncc specifies the date on which, and the time at which, the Special\nDefault Notice is signed by the non-Defaulting Party; and\ndd states that the event specified in accordance with sub-paragraph (aa)\nabove shall be treated as an Event of Default with effect from the\ndate and time so specified.\nOn the signature of a Special Default Notice the relevant event shall be\ntreated with effect from the date and time so specified as an Event of\nDefault in relation to the Defaulting Party, and accordingly references in\nparagraph 10 to a Default Notice shall be treated as including a Special\nDefault Notice. A Special Default Notice shall be given to the Defaulting\nParty as soon as practicable after it is signed.\nd) Either party may by notice to the other change the address, telex or facsimile\nnumber or electronic messaging system details at which notices or other\ncommunications are to be given to it.\n15) Entire Agreement; Severability\nThis Agreement shall supersede any existing agreements between the parties\ncontaining general terms and conditions for Transactions. Each provision and\nagreement herein shall be treated as separate from any other provision or agreement\nherein and shall be enforceable notwithstanding the unenforceability of any such other\nprovision or agreement. This Agreement may not be modified, amended or changed\nwithout the written consent of both parties\n26\n\n16) Non-assignability; Termination\n(a) Subject to sub-paragraph (b) below, neither party may assign, charge or\notherwise deal with (including without limitation any dealing with any interest in or\nthe creation of any interest in) its rights or obligations under this Agreement or\nunder any Transaction without the prior written consent of the other party.\nSubject to the foregoing, this Agreement and any Transactions shall be binding\nupon and shall inure to the benefit of the parties and their respective successors\nand assigns.\n(b) Sub-paragraph (a) above shall not preclude a party from assigning, charging or\notherwise dealing with all or any part of its interest in any sum payable to it under\nparagraph 10(c) or (f) above.\n(c) Either party may terminate this Agreement by giving written notice to the other,\nexcept that this Agreement shall, notwithstanding such notice, remain applicable\nto any Transactions then outstanding.\n(d) All remedies hereunder shall survive Termination in respect of the relevant\nTransaction and termination of this Agreement.\n17) Governing Law\nThis Agreement shall be governed by and construed in accordance with the laws of\nKenya (including any governmental acts, orders, decrees and regulations) and shall be\nexcused by laws, act of war or civil strife or other events beyond the control of the\naffected Party which prevents its performance. Buyer and Seller hereby irrevocably\nsubmit for all purposes of or in connection with this Agreement and each Transaction to\nthe jurisdiction of the Courts of Kenya.\nParty A hereby appoints the person identified in Annex 2 hereto as its agent to receive\non its behalf service of process in such courts. If such agent ceases to be its agent,\nParty A shall promptly appoint, and notify Party B of the identity of, a new agent in\nKenya.\nParty B hereby appoints the person identified in Annex 2 hereto as its agent to receive\non its behalf service of process in such courts. If such agent ceases to be its agent,\nParty B shall promptly appoint, and notify Party A of the identity of, a new agent in\nKenya.\nEach party shall deliver to the other, within 30 days of the date of this Agreement in the\ncase of the appointment of a person identified in Annex 2 or of the date of the\nappointment of the relevant agent in any other case, evidence of the acceptance by the\nagent appointed by it pursuant to this paragraph of such appointment.\n27\n\nNothing in this paragraph shall limit the right of any party to take proceedings in the\ncourts of any other country of competent jurisdiction.\n18) No Waivers, etc.\nNo express or implied waiver of any Event of Default by either party shall constitute a\nwaiver of any other Event of Default and no exercise of any remedy hereunder by any\nparty shall constitute a waiver of its right to exercise any other remedy hereunder. No\nmodification or waiver of any provision of this Agreement and no consent by any party\nto a departure herefrom shall be effective unless and until such modification, waiver or\nconsent shall be in writing and duly executed by both of the parties hereto. Without\nlimitation on any of the foregoing, the failure to give a notice pursuant to paragraph 4(a)\nhereof will not constitute a waiver of any right to do so at a later date.\n19) Waiver of Immunity\nEach party hereto hereby waives, to the fullest extent permitted by applicable law, all\nimmunity (whether on the basis of sovereignty or otherwise) from jurisdiction,\nattachment (both before and after judgment) and execution to which it might otherwise\nbe entitled in any action or proceeding in the Courts of Kenya or of any other country or\njurisdiction, relating in any way to this Agreement or any Transaction, and agrees that it\nwill not raise, claim or cause to be pleaded any such immunity at or in respect of any\nsuch action or proceeding.\n20) Recording\nThe parties agree that each may electronically record all telephone conversations\nbetween them.\n28\n\n21) Execution\nThis Agreement has been signed on ____________\nSIGNED and SEALED WITH THE COMMON SEAL OF}\n………………………………………………… )\nIn the presence of )\n)\n)\nDIRECTOR )\n)\n)\n)\nDIRECTOR/SECRETARY ) AFFIX COMMON SEAL\nSIGNED and SEALED WITH THE COMMON SEAL OF}\n………………………………………………… )\nIn the presence of )\n)\n)\nDIRECTOR )\n)\n)\n)\nDIRECTOR/SECRETARY ) AFFIX COMMON SEAL\n29\n\nANNEX 1\nSupplementary Annex to the Horizontal Master Repurchase Agreement\nThe following Clauses of the MRA are amended as enumerated hereunder:\n1. Clause 1: Applicability. It is hereby agreed that the ‘Securities’ eligible for utilization\nunder this Agreement shall be Government of Kenya securities. It is further agreed that\nunder this phase:\n(i) The MRA will not be utilized by counterparties, for transactions involving\nany other securities or financial instruments; and\n(ii) The counterparties that will execute the MRA shall only be ‘institutions’ as\ndefined in the Banking Act, Chapter 488 of the Laws of Kenya.\n2 Payment and Transfer.\na. Clause 6(e) and (f): It is hereby agreed that securities transferred under Clause 6e)\nand 6f) shall become absolute and unencumbered in the event of default and that\nevery transfer of listed securities in default cases shall be effected through the\nsecurities exchange viz. The Nairobi Stock Exchange as provided for under the\nCapital Markets Act.\nb) Clause 6h) and 6i): It is agreed that paragraph 6h) and 6i) shall not apply to this\nAgreement.\nRationale: The GMRA is structured as a master netting agreement. Accordingly,\nClauses 6h) and i) replace gross payment or delivery obligations in respect of one or\nmore transactions between parties with a net payment or delivery. The existing payment\nand settlement systems at the Central Bank of Kenya are however configured for gross\npayment and settlement. It is therefore necessary to set aside application of the above\nClauses until the requisite payment and settlement system infrastructure is in place.\n3 Clause 10: Events of Default and close out netting. It is agreed, that the provisions of\nthe Agreement that provide for ‘close out netting’ shall, in so far as they conflict with the\nprevailing laws in Kenya on statutory management and insolvency, not apply to this Agreement.\nRationale: Close out netting provisions seek to reduce credit exposure both within and\nwithout the insolvency context. Within insolvency, close out netting provisions ease\ncredit exposure by reducing the risk of a statutory manager or liquidator of a party under\nstatutory management or insolvency insisting that the solvent party performs his\nobligations in full in respect of the transactions which are profitable to the insolvent party\nand require that the solvent party claims as an unsecured creditor for the transactions\nthat are onerous to the insolvent party. Netting provisions/ agreements are not\nrecognized under the current Kenyan laws on insolvency or statutory management.\nInitiatives are however underway to seek to recognize netting agreements under\nKenyan insolvency legislation. Until these laws are finalized and enacted, current laws\nwill apply to this Agreement.\n4. Annex 2: Clause 1f): is standardized as follows:\n30\n\n(f) Paragraph 2(ee). The pricing source for calculation of Market Value shall\nbe based on pricing data disseminated on a daily basis by the Department\nwithin the Bank, responsible for Monetary Operations and Debt Market\nOperations.\n31\n\nANNEX 2\nSupplemental Terms or Conditions\nParagraph references are to paragraphs in the Agreement.\n1. The following elections shall apply -\n[(a) paragraph 1(c)(i). Buy/Sell Back Transactions [ may/ may not] be effected under this\nAgreement, and accordingly the Buy/Sell Back Annex [ shall/ shall not] apply.]*\n[(b) paragraph 1(c)(ii). Transactions in Net Paying Securities [may/may not] be effected\nunder this Agreement, and accordingly the provisions of sub-paragraphs (i) and (ii)\nbelow [ shall/ shall not] apply.\n(i) The phrase \"other than equities and Net Paying Securities\" shall be replaced by\nthe phrase \"other than equities\".\n(ii) In the Buy/Sell Back Annex the following words shall be added to the end of the\ndefinition of the expression \"IR\": \"and for the avoidance of doubt the reference to\nthe amount of Income for these purposes shall be to an amount paid without\nwithholding or deduction for or on account of taxes or duties notwithstanding that\na payment of such Income made in certain circumstances may be subject to\nsuch a withholding or deduction\".]*\n[(c) paragraph 1(d). Agency Transactions [ may/ may not] be effected under this Agreement,\nand accordingly the Agency Annex [ shall/ shall not] apply.]*\n(d) paragraph 2(d). The Base Currency shall mean the Kenya Shilling.\n(e) paragraph 2(r). [list Buyer’s and Seller’s Designated Offices]\n(f) paragraph 2(ee). The pricing source for calculation of Market Value shall be: _____.\n(g) paragraph 2(tt). Spot rate to be: _____.\n(h) paragraph 3(b). [Seller/Buyer/both Seller and Buyer]* to deliver Confirmation.\n(i) paragraph 4(f). Interest rate on Cash Margin to be [ ]% for _____ currency.\n[ ]% for _____ currency.\nInterest to be payable [payment intervals and dates].\n(j) paragraph 4(g). Delivery period for margin calls to be: _____.\n32\n\n* * Delete as appropriate\n[(k) paragraph 6(j). Paragraph 6(j) shall apply and the events specified in paragraph 10(a)\nidentified for the purposes of paragraph 6(j) shall be those set out in sub paragraphs [ ]\nof paragraph 10(a) of the Agreement.]*\n[(l) paragraph 10(a)(ii). Paragraph 10(a)(ii) shall apply.]*\n(m) paragraph 14. For the purposes of paragraph 14 of this Agreement –\n(i) Address for notices and other communications for Party A –\nAddress: (Address should contain both physical and postal details)\nAttention: Authorized dealers of (insert name of commercial bank)\nTelephone:\nFacsimile:\nSwift Address:\n:\nOther : Kenya Electronic Payment Settlement System (KEPSS)\n: Any other communication system that may from time to time be approved\nby the Bank.\n(ii) Address for notices and other communications for Party B –\nAddress: (Address should contain both physical and postal details)\nAttention: Authorized dealers of (insert name of commercial bank)\nTelephone:\nFacsimile:\nTelex: Swift Address:\nOther : Kenya Electronic Payment Settlement System (KEPSS)\n: Any other communication system that may from time to time be approved\nby the Bank\n[(n) paragraph 17. For the purposes of paragraph 17 of this Agreement –\n(i) Party A appoints [ ] as its agent for service of process;\n(ii) Party B appoints [ ] as its agent for service of process.]* *\n2. The following supplemental terms and conditions shall apply –\n[Existing Transactions\n(a) The parties agree that this Agreement shall apply to all transactions which are subject to\nthe Master Repurchase Agreement between them dated _____ and which are\noutstanding as at the date of this Agreement so that such transactions shall be treated\nas if they had been entered into under this Agreement, and the terms of such\ntransactions are amended accordingly with effect from the date of this Agreement.]*\n* * Delete as appropriate\n33\n\n[Forward Transactions\n(b) The parties agree that Forward Transactions (as defined in sub-paragraph (i)(A) below)\nmay be effected under this Agreement and accordingly the provisions of sub-\nparagraphs (i) to (iv) below shall apply.\n(i) The following definitions shall apply –\n(A) \"Forward Transaction\", a Transaction in respect of which the Purchase Date\nis at least [three] Business Days after the date on which the Transaction was\nentered into and has not yet occurred;\n(B) \"Forward Repricing Date\", with respect to any Forward Transaction the date\nwhich is such number of Business Days before the Purchase Date as is equal to\nthe minimum period for the delivery of margin applicable under paragraph 4(g). (ii\n(ii) The Confirmation relating to any Forward Transaction may describe the\nPurchased Securities by reference to a type or class of Securities, which, without\nlimitation, may be identified by issuer or class of issuers and a maturity or range\nof maturities. Where this paragraph applies, the parties shall agree the actual\nPurchased Securities not less than two Business Days before the Purchase Date\nand Buyer or Seller (or both), as shall have been agreed, shall promptly deliver to\nthe other party a Confirmation which shall describe such Purchased Securities. *\n(iii) At any time between the Forward Repricing Date and the Purchase Date for any\nForward Transaction the parties may agree either –\n(A) to adjust the Purchase Price under that Forward Transaction; or\n(B) to adjust the number of Purchased Securities to be sold by Seller to Buyer\nunder that Forward Transaction.\n(iv) Where the parties agree to an adjustment under paragraph (iii) above, Buyer or\nSeller (or both), as shall have been agreed, shall promptly deliver to the other\nparty a Confirmation of the Forward Transaction, as adjusted under paragraph (iii)\nabove.\n(c) Where the parties agree that this paragraph shall apply, paragraphs 2 and 4 of the\nAgreement are amended as follows.\n(i) Paragraph 2(xx) is deleted and replaced by the following –\n\"(xx) \"Transaction Exposure\" means –\n* Delete as appropriate\n34\n\n(i) with respect to any Forward Transaction at any time between the Forward\nRepricing Date and the Purchase Date, the difference between (A) the\nMarket Value of the Purchased Securities at the relevant time and (B) the\nPurchase Price;\n(ii) with respect to any Transaction at any time during the period (if any) from\nthe Purchase Date to the date on which the Purchased Securities are\ndelivered to Buyer or, if earlier, the date on which the Transaction is\nterminated under paragraph 10(g), the difference between (A) the Market\nValue of the Purchased Securities at the relevant time and (B) the\nRepurchase Price at the relevant time;\n(iii) with respect to any Transaction at any time during the period from the\nPurchase Date (or, if later, the date on which the Purchased Securities are\ndelivered to Buyer or the Transaction is terminated under paragraph 10(g))\nto the Repurchase Date (or, if later, the date on which Equivalent\nSecurities are delivered to Seller or the Transaction is terminated under\nparagraph 10(h)), the difference between (A) the Repurchase Price at the\nrelevant time multiplied by the applicable Margin Ratio (or, where the\nTransaction relates to Securities of more than one description to which\ndifferent Margin Ratios apply, the amount produced by multiplying the\nRepurchase Price attributable to Equivalent Securities of each such\ndescription by the applicable Margin Ratio and aggregating the resulting\namounts, the Repurchase Price being for this purpose attributed to\nEquivalent Securities of each such description in the same proportions as\nthose in which the Purchase Price was apportioned among the Purchased\nSecurities) and (B) the Market Value of Equivalent Securities at the\nrelevant time.\nIn each case, if (A) is greater than (B), Buyer has a Transaction Exposure for that\nTransaction equal to the excess, and if (B) is greater than (A), Seller has a Transaction\nExposure to Buyer equal to the excess.\"\n(ii) In paragraph 4(c) –\n(aa) the words \"any amount payable to the first party under paragraph 5 but\nunpaid\" are deleted and replaced by \"any amount which will become payable to\nthe first party under paragraph 5 during the period after the time at which the\ncalculation is made which is equal to the minimum period for the delivery of\nmargin applicable under paragraph 4(g) or which is payable to the first party\nunder paragraph 5 but unpaid\"; and\n(bb) the words \"any amount payable to the other party under paragraph 5 but\nunpaid\" are deleted and replaced by \"any amount which will become payable to\nthe other party under paragraph 5 during the period after the time at which the\ncalculation is made which is equal to the minimum period for the delivery of\nmargin applicable under paragraph 4(g) or which is payable to the other party\nunder paragraph 5 but unpaid\".]*\n35\n\nANNEX 3\nForm of Confirmation\nTo: ____________________________\nFrom: __________________________\nDate: ___________________________\nSubject: [ Repurchase][ Buy/Sell Back]* Transaction\n(Reference Number: )\nDear Sirs,\nThe purpose of this [ letter]/ facsimile]/ telex], a \"Confirmation\" for the purposes of the\nAgreement, is to set forth the terms and conditions of the above repurchase transaction\nentered into between us on the Contract Date referred to below.\nThis Confirmation supplements and forms part of, and is subject to, the Master Repurchase\nAgreement as entered into between us as of [ ] as the same may be amended from time to\ntime (the \"Agreement\"). All provisions contained in the Agreement govern this Confirmation\nexcept as expressly modified below. Words and phrases defined in the Agreement and used in\nthis Confirmation shall have the same meaning herein as in the\nAgreement.\n1. Contract Date:\n2. Purchased Securities [state type[s] and nominal value[s]]:\n3. CUSIP, ISIN or other identifying number[s]:\n4. Buyer:\n5. Seller:\n6. Purchase Date:\n7. Purchase Price:\n8. Contractual Currency:\n* * Delete as appropriate\n[9. Repurchase Date]:*\n36\n\n[10. Terminable on demand]:*\n11. Pricing Rate:\n[12. Sell Back Price:]*\n13. Buyer's Bank Account[s] Details:\n14. Seller's Bank Account[s] Details:\n[15. The Transaction is an Agency Transaction. [Name of Agent] is acting as agent for\n[name or identifier of Principal]]:*\n16. Additional Terms]:*\nYours faithfully,\n* Delete as appropriate\n37", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke/wp-content/uploads/2023/09/Kenya-Master-Repurchase-Agreement.pdf"}
{"doc_id": "de77286de2a0dc990dd8ddf7cf01afc9", "text": "INTERNATIONAL DAY OF FRANCOPHONIE\nKenya School of Monetary Studies on March 20, 2016\nSpeech by\nDr. Patrick Njoroge\nGOVERNOR, CENTRAL BANK OF KENYA\nAs Prepared for Delivery (623 words)\nHis Excellency, Abdoul Wahab Haidara, Ambassador of Senegal and Honorary\nPresident of the Committee for Francophonie;\nHer Excellency, Béatrice Kankindi, Ambassador of Burundi;\nAmbassadors and Representatives of French speaking countries here present;\nMr. Jean-Pierre Tutin, Cultural Counsellor of the French Embassy;\nThe Executive Director, Kenya School of Monetary Studies;\nFaculty Members and Students;\nAll Invited Guests, Ladies and Gentlemen:\nIt is an honor for me, on behalf of the Central Bank of Kenya Family, to welcome you to\nthe Kenya School of Monetary Studies on this auspicious occasion of the International\nDay of Francophonie, a special day in the Calendar of French speakers globally when\nthe French Language and Culture is celebrated.\nLadies and Gentlemen, I am informed that the International Day of Francophonie\ncelebrated every 20th day of March, marks the signing of the Niamey Convention in\nNiger in the year 1970 and is a day celebrated to create space for solidarity, based on\nprinciples of humanity, democracy and respect for cultural and linguistic diversity of all.\nWe are glad to be associated with this great event because we recognize that with well\nover 270 million speakers globally, French is the 9th most widely spoken language on the\nplanet earth and just like English, it is spoken on all the five continents. Closer Home,\nFrench speakers are estimated at 96 million.\n\nLadies and Gentlemen, we all acknowledge that mastering a foreign language is an\nimportant skill which enhances capacity to work within a multilingual environment.\nLearning a second foreign language obviously broadens one’s chances of competing\neffectively in the international labour market and getting employed by multinational\norganizations in the NGO world, banking and the hospitality industries, amongst others.\nDue to globalization, it is becoming increasingly important that we are able to integrate\nand work in multilingual environments. For the Kenyan companies and human capital to\nexpand and compete into new markets, in Africa and around the world, they will need to\novercome the language barrier.\nLadies & Gentlemen, it is in recognition of this that Kenya School of Monetary Studies\n(KSMS), which is a Department of the Central of Kenya, made a strategic decision to\noffer French to its students in its continuing effort to fill the gap for the increasing need\nfor French speakers in the labor market; not only in the Eastern African region but\nglobally.\nDistinguished Guests, Excellences, allow me to take this opportunity to speak more\nspecifically to students who have come in large numbers from all over the country and\nother parts of the region to attend this event. I presume that some of you are looking\nforward to working in International Organizations.\nAs students, you chose French language for many reasons; maybe because it is a fancy\nlanguage, or because you wish to travel to France someday, or maybe just to read French\nwriters in their own language. But the first reason should be the practical utility of this\nlanguage. Indeed, thanks to those of you who have chosen to learn French language,\nbecause this will certainly help you develop abilities to overcome language barriers and\naccord you an opportunity to compete on the international labour market.\nToday, Ladies and Gentlemen, the fast growing economy of Kenya and the rest of\nrepresent the promise of a better future for us and for the next generations. This\neconomic growth should be strengthened in the next few years by the intensification of\nthe exchanges between our country and those of the region. Foreign languages will\neliminate the language and communication barrier and will definitely play a key role in\nthis forecast.\n2\n\nDistinguished Guests, I wish you God’s Blessing and Favour in all your scheduled\nactivities and look forward to meeting you again.\nThank you for your attention.\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2016/InternationalDayofFrancophonie.pdf"}
{"doc_id": "c5693b2d02977f681952c9e68d3f84dc", "text": "CENTRAL BANK OF KENYA\nRemarks by\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\nAT THE\nLAUNCH OF THE DRAFT ELECTRONIC RETAIL TRANSFERS AND\nDRAFT ELECTRONIC MONEY ISSUERS REGULATIONS\nKKeennyyaa SScchhooooll ooff MMoonneettaarryy SSttuuddiieess,, NNaaiirroobbii\nThursday, February 03, 2011\n\nThe Communications Secretary, Ministry of Information and\nCommunication;\nThe Chief Executive Officers of Mobile Phone Companies;\nOfficials from the Communications Commission of Kenya;\nOfficials from the Financial and Legal Sector Technical Assistance Project;\nThe Consultants, Bankable Frontiers Associates;\nHeads of Department, Central Bank of Kenya;\nDistinguished Guests;\nLadies and Gentlemen:\nIt gives me great pleasure to join you all at this important moment in the\ncalendar of our financial sector to mark yet another milestone in our National\nPayments System reform and modernization process. Central Bank of Kenya\ncontinues to receive requests to authorise innovative electronic payment\nservices. These requests which benefit the public, and for that reason, the\neconomy requires Central Bank to ensure adequate risk mitigation. In this\nregard, the formulation and implementation of regulatory and oversight\npolicies that govern this fast expanding sphere of mobile phone and mobile\nbanking services is therefore highly desirable.\nFurther, and as you may be aware, in the area of retail payments, Central Bank\nof Kenya has deliberately taken a “test and learn” approach, as is referred\ntoday by the G20 in the Principles for Innovative Financial Inclusion issued\nin 2010. While this is true, we have engaged widely and monitored closely the\nprogress of payment service providers with a view to enhancing good practices\nin the Kenyan market and to understand trends in the regulation of payment\nproviders internationally as a way of benchmarking our efforts.\nLadies and Gentlemen: Effective regulation requires prudential guidelines\nin policy and oversight activities of relevant payment system operators and\nregulators. In this regard, I am glad to inform you that the Bank has drafted\nregulations for the retail payments sub-sector of our National Payments\nSystem. These regulations, which are the subject of this workshop, will go a\nlong way in ensuring that E-Money Issuers and Payment Service Providers\n2\n\nconduct their businesses prudently and in accordance with the provisions of\nthe Central Bank of Kenya Act.\nThe development of these regulations has required extensive consultations\nincluding the workshop which some of you attended on September 1, 2010 at\nthe Serena Hotel. As a result of these consultations, the Bank came up with\ntwo sets of regulations; electronic retail transfers and e-money issuers\nregulations. The purpose of these two sets of regulations will be;\na). To define retail transfers and provide for the delivery of retail transfers\nby banks and financial institutions as well as persons who are not\nlicensed as banks or financial institutions;\nb). To facilitate the provision of electronic payment services without\ncompromising the safety and efficiency of the National Payment System;\nc). To provide minimum standards for consumer protection and risk\nmanagement to be adhered to by all providers of retail transfers;\nd). To provide for the authorization of e-money issuers and the conduct of\nthe business of e-money issuing;\ne). To provide for the appointment of agents by e-money issuers and the\nregistration of such agents as well as rules of engagement; and,\nf). To provide for the appropriate measures to protect the interest of the\nclients of e-money issuers.\nLadies and Gentlemen: The mobile phone money transfer technology has\nin a few years of its existence demonstrated how financial services can be\nprovided to a large number with least cost using appropriate technological\nplatforms. This is how our financial inclusion efforts have borne some fruits.\nIn only four years of the existence of mobile phone money transfer services,\nfour mobile phone operators have launched the services and have enrolled\nover 15.4 million customers and recruited 39,449 agents. Total transactions\nhave now reached Ksh.2.45 billion a day and Ksh.76 billion a month using\nDecember figures. This has created many opportunities for Kenyans including\nemployment, access to financial services, and an effective tool for channelling\ncurrency to the banking system.\n3\n\nBut when a sector is booming, rules are forgotten or misinterpreted. We have\nto safeguard the rules and the business.\nLadies and Gentlemen: The phenomenal success of mobile phone money\ntransfers has put Kenya at the centre stage globally in matters of financial\ninclusion and innovation. But sustaining success has its challenges. We have\nto be ready to modify our businesses to cope and rules to contain the main\nactors and new entrants to the business.\nIn this regard, I would like on behalf of the Central Bank of Kenya, to thank\nthe Government through the Financial and Legal Sector Technical Assistance\nProject (FLSTAP) and all other stakeholders for the support they have\naccorded the Bank in the Payment Systems reform and modernization\nprocess. In particular, I wish to commend the Government for supporting the\nBank in drafting regulations which we are about to launch today. I wish\nfurther, to assure the industry that Central Bank will continue to play its role\nin promoting a stable and conducive environment for financial innovation to\nthrive.\nImportantly, I wish at this point to inform you that the Central Bank has,\ntogether with the Government, developed the National Payments System Bill\nwhich when enacted will enhance further the regulation and supervision of\npayment systems and payment service providers. These regulations are\ntherefore meant for use by the industry and to streamline activities while the\nNational Payments System Bill will come in to reinforce them. This will enable\nKenya’s payment system to comply with the Bank for International\nSettlements (BIS) Core Principles and Central Bank responsibilities while at\nthe same time giving CBK specific and enhanced powers over payment\nsystems in Kenya.\nFinally, I would like to most sincerely thank all the stakeholders and especially\nBankable Frontiers Associates for successfully working with the Bank to draft\nthese important policy documents which we believe will guide our activities in\n4\n\ncoming years. With these remarks, I wish to officially launch the draft\nelectronic retail transfers and draft electronic money issuers regulations.\nTHANK YOU\n5", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2011/Launch%20of%20Draft%20Electronic%20Payment%20Regulations.pdf"}
{"doc_id": "3bc6715f298badae2049b01f93919f11", "text": "CENTRAL BANK OF KENYA\nRemarks by\nPPRROOFF.. NNJJUUGGUUNNAA NNDDUUNNGG’’UU\nGGOOVVEERRNNOORR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\naatt tthhee\nBBEELLLL RRIINNGGIINNGG CCEERREEMMOONNYY OOFF TTRRAANNCCHHEE IIII OOFF TTHHEE\nHHOOUUSSIINNGG FFIINNAANNCCEE CCOOMMPPAANNYY OOFF KKEENNYYAA LLIIMMIITTEEDD BBOONNDD IISSSSUUEE\nThe Nairobi Securities Exchange, Nation Centre\nWednesday, November 14, 2012\n\nMr. Steve Mainda, HFCK Chairman\nMr. Frank Ireri, Managing Director, HFCK\nBoard Members of Housing Finance here present\nChair of Capital Markets Authority\nChairman and Chief Executive Officer, NSE\nDistinguished Guests\nLadies and Gentlemen\nI am very delighted to join you this morning for the bell ringing ceremony to mark\nthe commencement of trading of Housing Finance Company of Kenya (HFCK)\nTranche II Bond at the Nairobi Securities Exchange (NSE). It is important to note\nthat the Debut Issue of the Notes, in the third quarter of 2010, sought to raise an\naggregate value of KShs. 5b but successfully managed to raise ksh 7.1b thus recording\n41% oversubscription. Again the second Issue in October 2012, seeking to raise the\nbalance of Kshs 2.1b, returned kshs 5.2b, an oversubscription of 76%.\nLadies and Gentlemen, allow me first to commend the board, management and\nstaff of Housing Finance for the steps taken towards realising the organisation long-\nterm goals. It is noteworthy that since its local incorporation in September 1992, the\nbank has progressively grown its branch network to 12 branches and 3 sales/services\ncentres. I also note that as at September 30, 2012, HFCK had an impressive 5,178\nmortgage accounts worth Kshs.29.5b and customer deposits of Ksh.24b, supported\nby a strong capital base of Ksh.6.1b. This indeed shows great effort put in by the\nboard and staff of Housing Finance.\nThe major constraints facing the mortgage market in Kenya remain the lack of access\nto long term funds, credit risk due to absence of historical information, relatively\nhigh interest rates, difficulties with property registration and high incidental costs of\nborrowing. However, various initiatives are under way to tackle these obstacles.\nThese initiatives include issuance of corporate bonds by institutions with the aim of\nmobilizing long term resources to match the long-term nature of mortgages and the\nuse of credit information sharing mechanism to enable financial institutions enhance\ntheir credit risk management processes.\nLadies and Gentlemen, Kenya has been seen rapid urbanization over the last\ndecade with the proportion of the Kenyan population living in urban areas forecasted\nto reach 60% by the year 2030 from about 20% in 2005. However, the Kenyan\nhousing sector is currently characterized by inadequacy of affordable and decent\nhousing and low-level of urban home ownership.\nDespite the challenges, the housing sector plays a critical role in the achievement of\nkey goals envisaged by Vision 2030. Housing construction, being labour intensive\n2\n\nand having strong linkages with other sectors of the economy remains one of the\nprincipal levers for creating jobs among the youth and driving economic growth. The\nmortgage market development will be required to support the expanding cities and\ncounties with the accompanying productivity gains.\nThe Central Bank of Kenya in partnership with the banking sector is currently\nfocusing on initiatives aimed at reducing costs of doing business for institutions with\nthe main aim of bringing down costs of financial services. In addition to developing\ninnovative products, the other major initiative towards cost reduction and financial\ninclusion has been the Agent Banking. To this end the HFCK rolled out its agent\nframework by engaging Post Bank as its agent in August 2012. The rollout of the\nagent banking model is mainly aimed at addressing the challenges of high\ntransaction costs arising from the lack of proximity of financial services and putting\nup brick and mortar branches where they may not be economical.\nFinally, let me reiterate that the Central Bank will continue to facilitate an\nenvironment that allows for a diverse way of raising capital for institution to thrive\nand compete. Specifically, the Central Bank remains committed to working with the\nrelevant stakeholders to create an enabling environment for the mortgage sector to\nplay its’ rightful role in achieving the aspirations of the country’s blueprint, the vision\n2030, specifically the provision of adequate and decent housing.\nWith these few remarks, ladies and gentlemen, it is now my honour and privilege\nto declare trading of HFCK Tranche II medium term bond officially launched and\nwish HFCK success in their business expansion plan.\nThank You\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2012/HousingFinanceRingingCeremony.pdf"}
{"doc_id": "177920cda5631a3741944888a24d86af", "text": "CENTRAL BANK OF KENYA\nRemarks by\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCENTRAL BANK OF KENYA\nat the\nLAUNCH OF THE KENYA COMMERCIAL BANK SUPERVISORY\nCOLLEGE\nKenya School of Monetary Studies\nWednesday, 3rd October 2012\n\nThe IMF East AFRITAC Officials here present;\nDistinguished delegates from the EAC Partner States Central Banks\nhere present;\nDr. Martin Oduor Otieno, Kenya Commercial Bank Group Chief\nExecutive Officer;\nDistinguished Participants;\nLadies and Gentlemen:\nThe Central Bank of Kenya is delighted to host this inaugural meeting of a\nSupervisory College in the East African region. This is a great milestone for the\nregion’s Central Banks in enhancing the existing mechanisms for information\nsharing and collaboration.\nAt the onset, let me commend the IMF’s East AFRITAC for their unwavering\nsupport towards enhanced stability of the banking sector in the region. Today’s\nlaunch of the pioneering supervisory college has been made possible through the\ntechnical assistance and capacity building by the East AFRITAC. I would like to\nthank all those who have contributed to the organisation of this meeting. Let me\nalso extend a warm welcome to all participants.\nLadies and Gentlemen: The requirement for enhanced information sharing and\ncollaboration among financial sector supervisors has gained more prominence\nrecently. This is informed by the continued cross-border expansion of financial\nsector players as well as the convergence of their cross-sector operations. As a\nresult, for us to be able to adequately address all potential risks from the continued\nconvergence of players and their cross-border expansion, the time to embrace\nconsolidated supervision within and across our borders is at hand.\nAs you may be aware the importance of cooperation between home and host\nregulators of banking groups dates back three to four decades ago. The Basel\nCommittee for Banking Supervision developed guidelines in 1975 to guide\ncooperation between national authorities in the supervision of banks with cross-\nborder establishments. These guidelines were enhanced with the issuance of the\nBasel Core Principles on Effective Supervision in 1997, in particular, Basel Core\nPrinciple 24 on Consolidated Supervision which requires that supervisors should\nregulate banking groups on a consolidated basis, and Basel Core Principle 25 on\nHome-host Relationships (Cross-border consolidated supervision) which requires\ncooperation and information exchange between home supervisors and the host\nsupervisors.\n2\n\nLadies and Gentlemen: Following financial crises experienced from 2007, the\nimportance of information sharing and collaboration between banking group\nsupervisors, especially through supervisory colleges, was re-emphasised by the\nG20 Leaders and Financial Stability Board Forum held in 2008. To actualise the\nForum’s declaration the Basel Committee for Banking Supervision released a paper\non Good Practice Principles on Supervisory Colleges in October 2010. The paper\nsupplemented the existing guidance on cross-border cooperation and information-\nsharing. It outlined expectations for both home and host supervisors in relation to\nsupervisory college objectives, governance, communication and information\nsharing as well as potential areas for collaborative work.\nLadies and Gentlemen: Currently, 10 Kenyan banks have established presence\nacross the Eastern Africa region including two in South Sudan and one in\nMauritius. As at 30th June 2012, the 10 Kenyan banks had 240 branches outside\nKenya, an increase of 34 branches from 204 in December 2011. It is worth noting\nthat it is not only Kenyan banks that are expanding across the borders but banks in\nthe other East African countries have also embraced the opportunity. A case in\npoint is the application by Bank of Kigali to establish a Representative Office in\nKenya. I envisage that more banks will consider cross-border expansion once the\non-going harmonisation of the legal, supervisory and regulatory frameworks\namong the EAC Central Banks is completed.\nLadies and Gentlemen: Effectiveness of consolidated supervision and in\nparticular a supervisory college depends on how it is structured. The structure of a\nsupervisory college to be adopted depends on the unique characteristics of the\nbanking group being considered. In this regard, CBK as the home supervisor of\nKenya Commercial Bank (KCB) Group, and with the technical assistance of East\nAFRITAC, has designed this supervisory college to reflect the nature and\ncomplexity of operations of KCB. The structure is expected to promote timely\ninformation sharing and closer collaborations amongst the KCB Group\nsupervisors.\nLadies and Gentlemen: As we hold this supervisory college meeting for KCB, it\nis worth noting that KCB has made great progress since its predecessor; the\nNational Bank of India opened an outlet in Mombasa in 1896. I take note that as at\n30th June 2012, KCB had a branch network of 226 branches; 56 of which were\noutside Kenya. Further, as at 31st July 2012, KCB’s total assets were valued at\nKsh.295 billion (USD3.5 billion) while its total loans and gross deposits amounted\nto Ksh.190 billion (USD2.26 billion) and Ksh.213 billion (USD2.53 billion)\nrespectively.\n3\n\nLadies and Gentlemen: Despite the commendable efforts towards full\nintegration in the East African Community, banks with cross border operations\ncontinue to report operational challenges. The major operational challenge is the\nneed for a huge capital outlay, which could otherwise be minimised through\ncentralisation of some operations and decision making. With the advancements in\ninformation technology, centralisation of some operational processes is being\nembraced globally based on the resultant cost savings as along as adequate risk\nmitigating measures are assured. In this regard, I urge regulators in the Eastern\nAfrica region to always embrace a developmental mindset as they consider\nproposals by market players. As long as adequate risk mitigation measures are\ndemonstrated, innovations should be facilitated. It is only through this that our\nbanking sectors will effectively play their roles of resource mobilisation, allocation\nand deepen the market. More importantly, innovations will reduce the cost of\nbanking services and products. Lower costs are critical to tapping the vast\nunbanked populace in our region.\nLadies and Gentlemen: The output from this meeting will provide a framework\nto enhance effective supervision of the KCB Group. It will also set precedence for\nthe supervision of other banking groups with cross border operations. I\nacknowledge the presence of KCB Management who I am informed will showcase\ntheir strategy and operational plans. It is through a clear understanding of\ninstitutional strategies and plans that supervisors are able to proactively discharge\ntheir supervisory mandates.\nLadies and Gentlemen: I believe that there is a great wealth of supervisory\ninformation and ideas to be shared in this supervisory college. As the East African\nCentral Banks, there is need to be steadfast in supervision of institutions with cross\nborder operations to minimise the likelihood of systemic effects in case of failure. I\ntherefore wish to reiterate the importance of seizing this opportunity to discuss\nmechanisms of enhancing regional coordination in supervision as well as crisis\nmanagement/mitigation.\nWith these few remarks Ladies and Gentlemen, it is now my honour and\npleasure to declare this inaugural supervisory college meeting officially opened and\nI wish you fruitful deliberations.\nThank You\n4", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2012/launch%20of%20kcb%20supervisory%20college.pdf"}
{"doc_id": "078e6ddccd6d5cc374c2ae117066b65a", "text": "SPEAKING POINTS FOR BANKING AND FINANCE PANEL-AFRICA LEGAL\nNETWORK CONFERENCE-21-22 OCTOBER 2015\n1. The challenges faced in the role of a central banker in ensuring systemic stability\n Traditional role of central banks is to foster price stability but they are also increasingly\ntaking up financial stability mandates.\n Price and financial stability are interlinked but can also conflict.\n Ensuring price stability through raising interest rates and tightening liquidity increase\nparticularly credit and liquidity risks for financial sector players.\n Usually central banks only have jurisdiction over banks and must collaborate with other\nregulators with oversight over capital markets, insurance and pensions.\n2. The possible impact of the introduction of Basel II and III in your jurisdiction and\nacross Africa.\n Basel II and III capital accords were formulated to promote global financial stability by\nstrengthening capital and liquidity of banks.\n The accords seek to align banks’ capital holdings to their risk profile, strengthen\nsupervision, market disclosures and ensure banks’ have sufficient liquidity to meet their\nobligations.\n However Basel II and III also introduced complexities through the use of credit ratings\nand models to assess capital adequacy.\n Basel III has also introduced the use of high quality liquid assets that may not be available\nin the shallow financial markets that characterise most of Africa.\n This will be compounded by capacity and resource constraints on the part of banks and\nregulators.\n African countries therefore are opting to adopt aspects of Basel II and III that are suited to\ntheir local circumstances as the necessary financial infrastructure is developed for full\nadoption of the accords.\n3. The possible importance of depositor insurance schemes in the event of the default\nof a regulated bank.\n Deposit insurance is a safeguard mechanism to assure depositors that they will not lose\ntheir funds in case of a bank failure.\n Critical in building confidence in banking sector after various bank failures that have\noccurred in Africa over the last thirty years.\n1\n\n Coverage of deposit insurance limited e.g. in Kenya, it is Ksh. 100,000(USD 970) per\ndepositor.\n Need to ensure prudent investment of funds held by deposit insurance schemes and also\nsafeguard against moral hazard problem where banks may engage in risky behaviour\ndrawing comfort that depositors are protected in case of failure.\n2", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke/uploads/speeches/854434225_Chairs' Speaking Notes ALN DXB 21 - 22 October 2015.pdf"}
{"doc_id": "77741eef8ecd8fcdca0ee8fce25d06e1", "text": "CENTRAL BANK OF KENYA\nRemarks by\nPPRROOFF.. NNJJUUGGUUNNAA NNDDUUNNGG’’UU\nGOVERNOR\nCENTRAL BANK OF KENYA\naatt tthhee\nFFOORRUUMM OONN GGRROOWWIINNGG RREEAALL EESSTTAATTEE\nTTHHRROOUUGGHH FFIINNAANNCCEE\nKenya School of Monetary Studies\nWednesday, June 23, 2010\n\nThe Permanent Secretary, Ministry of Housing, Mr. Tirop Kosgey\nThe Counsellors of Real Estate\nDistinguished Guests\nLadies and Gentlemen\nIt is my great pleasure to warmly welcome you all to this important interactive forum\non “Growing Real Estate through Finance”. I thank all present for accepting our\ninvitation. In particular, I wish to thank the Counsellors of Real Estate represented\nhere for joining us to deliberate on growth and financing of such an important sector\nin the Kenyan economy.\nLadies and Gentlemen: In any economy, long-term finance is one of the key drivers\nof economic growth. Long-term finance allows for the provision of affordable and\nadequate housing which is a major thrust of Kenya’s Vision 2030. Indeed, in line\nwith the objective of this forum, one of the flagship projects under the “Housing and\nurbanization” as stipulated in the Vision 2030 is ‘Mortgage Financing Initiatives’. At\nan estimated annual demand of about 150,000 housing unit, the supply is barely at\n35,000 leaving a gap of 115,000. The sector thus portends enormous opportunity\nand a major market; appropriate and innovative financing mechanisms are therefore\nabsolutely essential.\nThis forum brings together bankers, regulators, practitioners, researchers, academics\nand senior government policy makers to discuss this vital agenda – Real Estate\nFinancing in Kenya, but I do believe that one of the solutions is not only the source of\nlong-term finance but also the collateral technology and its process must be improved\nand simplified. The outcomes and policy conclusions of this interactive forum are,\ntherefore, an important input into policy responses in addressing the binding\nconstraints in this sector and the economy.\nThe Kenyan financial system through its intermediation role remains the key pillar in\nproviding mortgage financing. Although there is evidently enormous opportunity in\nthe sector, lending to the building and construction and real estate sector stands at\n12.2% (Ksh 92.5 billion as at end of 2009) of the total credit by banks and mortgage\nfinance companies. The bulk of financing, it does appear, is through household\nsavings. This is a clear indication that financing is one of the major constraints. While\n2\n\nmost deposits are of short term nature, mortgage finance is long-term. The traditional\nmismatch constraint therefore comes into play. This requires a well developed\nmortgage market to address long-term funding requirements of the sector.\nDeveloping mechanisms for long-term finance is good for monetary policy\ntransmission as well. The MPC has been trying to address the issue of long-term\nfinance; we do hope this forum can provide some viable and feasible options.\nLadies and Gentlemen: The Government’s commitment to growth of real estate sector\nis in our blueprint for Vision 2030 and is also well articulated in the Finance Bill,\n2010. The Finance Bill outlines a number of measures to spur growth in the property\nmarket. In particular, in order to facilitate provision of adequate housing to Kenya’s\ngrowing population, The Finance Bill, 2010 contains proposals to amend the Banking\nAct:\n(i) To allow mortgage finance companies to operate current accounts; and\n(ii) To allow banks to advance up to 40% of their total deposit liabilities up from\n25% for purchase, improvement or alterations of land.\nThese measures will unlock the sector’s potentials by availing funding required to\nfinance growth of real estate in Kenya. The Central Bank will continue to work with\nthe sector to improve the operating environment.\nIt is equally important for the players in the real estate sector to design innovative\nways of securing funds to exploit opportunities available. For instance, pension funds\nare needed for guaranteeing members’ mortgages. This is happening in Kenya, but\nstill at a low scale. Leveraging on such long-term instruments will lower costs and\nmake decent and low cost housing available to potential borrowers. Also, other\ninvestment vehicles such as unit trusts have the potential of pooling funds required for\nspecific projects.\nIn addition, the success of the Kenya Government infrastructure bond as well as other\ncorporate bonds that have followed, demonstrates enormous potential of the bond\nmarket. In 2009 alone the Government raised a total of Ksh 54.7 billion through\nbonds issues, and the infrastructure bonds were oversubscribed every time. This is a\nclear testimony of the market’s ability to provide cheaper source of funding for long-\nterm projects such as mortgages. To further deepen the bond market, the Central\n3\n\nBank has implemented a number of measures, including introduction of benchmark\nbonds and re-opening of these benchmark bonds to create liquidity and facilitate\ntrading. We can then use this infrastructure bond platform to develop housing bonds.\nLadies and Gentlemen: In all this, a vibrant financial sector with adequate and\ndynamic human capital is a vital component. The Kenya School of Monetary Studies\nas the capacity building institution of the Central Bank of Kenya and the region is well\nplaced to develop and implement a curriculum that fits 21st century Real Estate\nFinancing. This curriculum is expected to be broad and multi-disciplinary cutting\nacross various fields in demand for capacity building. Such a multi-faceted capacity\nbuilding program will provide the requisite skill sets to unlock potentials of the real\nestate sector in Kenya.\nDistinguished Guests, Ladies and Gentlemen, with these remarks on the future of this\nmarket, it is my pleasure to declare this interactive forum officially open.\nI wish you all fruitful deliberations.\nThank you.\n4", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2010/KSMS%20Growing%20Real%20Estate%20through%20Finance.pdf"}
{"doc_id": "d1aa7ccf616c31d6df67dbcb41d032b0", "text": "CENTRAL BANK OF KENYA\nGROUNDBREAKING CEREMONY\nNATIONAL POLICE LEADERSHIP ACADEMY\nRemarks by Dr. Patrick Njoroge\nGovernor, Central Bank of Kenya\nTuesday, January 26, 2021\nNgong Township, Kajiado County\nAs prepared for delivery\nYour Excellency; Distinguished Guests:\nToday we are witnessing a milestone in the unlikely relationship between the\nNational Police and the Central Bank. It is much more than a friendship—of the\n1,681 staff at the Central Bank, 325 are police officers, all united in the vision of a\nWorld-Class Modern Central Bank. These officers are expected to be exemplary in\ntheir discipline and professionalism, and I confirm, Your Excellency, that they\ncontinue to meet that standard. As an example, the first Police officers in the history\nof the National Police Service to conquer Mt. Kilimanjaro were two CBK women\nofficers in June 2018, Corporal Linda Kathambi and Police Constable Evelyne\nKasyoki. They continue to make us proud.\nYour Excellency, in keeping with the blossoming collaboration, the immediate\nobjective is to build in this space where lions once roamed, a Leadership Academy\nfor the National Police. This will be a significant milestone for them, also because\nthere is a real need to build leaders in the Police force. According to a proverb, “An\narmy of sheep led by a lion can defeat an army of lions led by a sheep.”\nYour Excellency, this project has brought together Kenyan expertise and will source\nmaterial locally. Of the total project cost of about Ksh.1 billion, you will be pleased\nto know that the local content is more than 90 percent! About 35 percent of the\nproject cost is labor, all local. The value of imports is less than 9 percent, and 56\npercent is local material. I would add that we have gone out of our way to source\n1\n\nstones from quarries in Kajiado County, tiles from the neighboring counties, etc.\nAdditionally, the facility is designed to be eco-friendly, for instance, a water\nrecycling plant will lead to more efficient use of fresh water.\nUnfortunately the label “Built in Kenya” is not yet synonymous with “Built well in\nKenya” and quality concerns have bedeviled our competitiveness in the global\narena. Your Excellency, we want to change that narrative—tujivunie ujuzi wetu—\nand all involved in this project are out to prove that we can do it! The project is to\nbe completed by December 30, 2021, within budget, and without compromising\nquality or workmanship. I am sure the IG and I will be delighted to welcome you\nback to open the World-Class facility on Monday, January 3, 2022.\nYour Excellency, this project will allow us to achieve another important objective,\nof building adequate accommodation for the CBK Police officers in Nairobi. I am\npleased to announce that we have finalized plans for a modern gated-community in\nthe Industrial Area with 210 units. This will solve permanently a long-standing\nproblem, of providing suitable living quarters for our officers and their families.\nBefore I finish, I want to thank all those that have worked hard to bring us to this\npoint. While these are many, I want to single out Cabinet Secretary Matiang’i and\nthe former IG Joseph Boinett for starting the ball rolling, IG Mutyambai who has\nbeen enthusiastic in his support, the DIG, the National Lands Commission (NLC),\nthe Chair of the National Police Service Commission, and of course the CBK\nBoard. Your Excellency, I also remember your pointed questions about both these\nprojects at various times, and I want to thank you most sincerely for your support in\nmaking this day a reality.\nThank you very much, and it is now my pleasure to hand back to you, Bwana IG!\n2", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke/uploads/speeches/1020268431_Governor’s Remarks - Groundbreaking Ceremony National Police Leadership Academy.pdf"}
{"doc_id": "3994c2c15078207d239f0a0934f26660", "text": "CENTRAL BANK OF KENYA\nAddress by\nPPRROOFF.. NNJJUUGGUUNNAA NNDDUUNNGG’’UU\nGGOOVVEERRNNOORR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\naatt tthhee\nLLAAUUNNCCHH OOFF TTHHEE\nEEQQUUIITTYY BBAANNKK MMOOBBIILLEE PPHHOONNEE BBAANNKKIINNGG SSEERRVVIICCEE\nKKEENNYYAATTTTAA IINNTTEERRNNAATTIIOONNAALL CCOONNFFEERREENNCCEE CCEENNTTRREE\nWednesday, September 3rd, 2008\n\nMr. Peter Munga, Chairman of the Board of Directors\nof Equity Bank Ltd.;\nDr. James Mwangi, Managing Director and Chief Executive Officer\nof Equity Bank Ltd.;\nBoard Members here present;\nDistinguished Guests;\nLadies and Gentlemen:\nI am delighted to be here this afternoon on the occasion of the launch of\nEquity Bank’s mobile phone banking service. Today indeed marks yet another\nlandmark event on Equity’s chequered path. I am therefore grateful for the\ninvitation to share in this occasion.\nLet me at this early juncture commend the Board, management and staff of\nEquity on the introduction of the mobile phone banking service that I will be\nlaunching shortly. The service provides an EAZZY 24/7 Mobile Phone Banking\nsolution to your customers as they shall literally be carrying their accounts in\ntheir hands (‘’Benki Yangu Mkononi’’). This is indeed a revolutionary solution\nthat will provide the following four key benefits:-\n1. Convenience: The launch of mobile phone banking is a step towards\nmaking financial services accessible to all Kenyans who have access to a\nmobile phone. This is a revolutionary mobile solution that delivers\nmobility, convenience and security to the bank’s existing as well as\nprospective customers. It will leverage on the strong mobile penetration\nboth locally as well as globally and essentially the affinity of mobile devices\nto the consumer. Customers will be able to generate value from wireless\ntransactions anytime anywhere.\n2. Banking the unbanked: With 11 million Kenyans having access to a\nmobile phone, and only approximately 4.5 million banked, the new solution\noffers an avenue to push forward the access frontier in Kenya. This effort\nwill bring more Kenyans into banking solutions.\n3. Beyond banking; financial solution: This banking solution will allow\nfor the use of a mobile phone to perform various other services beyond\nfunds transfer. Customers will be able to pay for services, manage their\naccounts, provide airtime top-ups and execute other service requests.\n4. Opening new economic frontiers and supporting Vision 2030:\nThis service will contribute to economic expansion for Kenyans, especially\nthe small and medium enterprises. By accessing financial services easily\nand affordably, Kenyans will be better equipped to support their\n2\n\nenterprises. The success of the small and medium enterprise sector\nundoubtedly lies at the heart of the realisation of Vision 2030.\nThe four benefits provide us with a solution to Kenyans who view banks as\nexpensive, have barriers to entry and have high transaction costs of\nmaintaining accounts. What Kenyans need is access to bank accounts where\nthey can save and transact easily. This move by Equity indeed answers to that\nchallenge.\nThe Central Bank welcomes such innovations by the banking sector and is\ncommitted to the creation of an enabling regulatory environment towards this\nend. I would therefore urge the banking sector to seek innovative ways of\nleveraging on existing technologies and infrastructures to provide affordable\nand inclusive financial services to Kenyans.\nMr. Chairman, Kenya can not develop, or even realize the aspirations of vision\n2030, if the majority of Kenyans at the bottom of the economic pyramid lack\naccess to financial services such as savings, credit, payment/remittance\nsystems, money transfers, insurance and pension. The example Equity Bank\nhas shown here today takes us steps towards realization of this goal. These are\nsteps to emulate for the growth and development of our financial sector.\nLadies and Gentlemen: It is now my honour and pleasure to declare\nthe Equity Bank Mobile Phone Banking Service Officially\nLaunched.\nThank You.\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2008/Launch_Equity_Mobile.pdf"}
{"doc_id": "1a1aec8d7312ab48de2888842002de64", "text": "3RD ANNUAL KENYA DIASPORA HOMECOMING CONVENTION\nCatholic University, Nairobi\nRemarks by Dr. Patrick Njoroge\nGovernor, Central Bank of Kenya\nDecember 14, 2016\nAs Prepared for Delivery\nGood afternoon! I am indeed honored to speak before this distinguished diaspora\nhomecoming convention.\nI would like to express my thanks to the Kenya Diaspora Alliance for the invitation to\nparticipate in this session as a Keynote Speaker. Let me begin by acknowledging the\nimportant role of the Kenyan diaspora in economic development mainly through\nremittances. Diaspora remittances are currently one of the main sources of foreign\nexchange for the country, amounting to USD1.7 billion in the 12 months to October 2016,\nup from USD1.4 billion in 2015. Apart from remittances, which are an alternative\ninvestment financing channel in key sectors of our economy such as real estate, diaspora\nentrepreneurs are helping create jobs and stimulate trade.\nAs you are aware, the Government has been implementing measures to tap the enormous\npotential of our diaspora’s knowledge and expertise in order to enhance their contribution\nto economic development. I also understand that diaspora diplomacy has been main-\nstreamed in our foreign policy, thereby providing the necessary framework for dialogue\nbetween the Government and diaspora on pertinent issues to the economy.\nThe theme of this conference – Diaspora Voting and Youth Empowerment – underscores\nthe importance of the diaspora and youth participation in the overall development of our\ncountry. Given this theme, and borrowing from my recent experience as a diaspora\nreturnee, I would like to highlight measures that have been put in place to enhance the\neconomic environment, and the economic opportunities that are available to the diaspora.\nFirst, macroeconomic stability remains paramount. The achievement and maintenance of a\nlow and stable inflation facilitates predictability in the economic environment thereby\npromoting investment and a sustainable growth. Prudent monetary policy has kept\ninflation within the government target range, and ensured stability in the foreign exchange\nmarket. In this regard, the CBK moved decisively in the second half of 2015 to deal with\n1\n\nrising inflation expectations largely due to increases in food prices, and pressures in the\nforeign exchange market reflecting developments in the global financial markets. As a\nresult, overall inflation declined to stand at 6.7 percent in November 2016 from 8.0\npercent in December 2015. However, we are closely monitoring developments in the\ndomestic and global economies which could have implications on the price stability\nobjective. Uncertainties remain with respect to the impact of Brexit, potential resumption\nof tightening of U.S. monetary policy, and the future U.S. policy following the recent\npolitical developments.\nSecondly, other measures are being implemented to improve the business environment,\nincluding investments in infrastructure such as the Standard Gauge Railway, advancing\nthe use of information technology in doing business, and ensuring security, among others.\nThese initiatives are key to promoting competitiveness in the economy. In addition, the\ngrowing youthful and entrepreneurial population is a boon to the business environment.\nKenya is ranked the World’s third most reformed country in the World Bank 2017 Doing\nBusiness Report. The performance of the economy has remained strong, with growth\nexpected at 6.0 percent in 2016 from 5.6 percent in 2015. On the contrary, growth in the\nmajor African economies has been weighed down in 2016 largely due to the slump in\ncommodity prices.\nThirdly, the diversification of the Kenyan economy in terms of export products and\nexternal markets is a major source of resilience against adverse external shocks. About 40\npercent of Kenya’s exports are to Africa, while the economy is not reliant on\ncommodities. The current account deficit has been narrowing, and is projected at 5.5\npercent of GDP in 2016 from 6.8 percent in 2015 and 9.8 percent in 2014. The\nimprovement in the current account balance reflects improved earnings from exports of\ntea, coffee, and horticulture. Diaspora remittances and receipts from tourism have also\nbeen resilient. The CBK foreign exchange reserves, which stand at 4.8 months of import\ncover, together with the Precautionary Arrangements with the IMF totalling USD1.5\nbillion continue to provide buffers against short term shocks.\nFourthly, as you may be aware, the banking sector has continued to play a key role in the\neconomy through mobilisation of savings and allocation of the resources to key sectors.\nThe CBK is strengthening the banking sector to ensure greater transparency and stronger\ngovernance, and also to promote effective business models and innovation. The Central\nBank continues to engage with financial service providers to introduce innovative\nsolutions or products in the market in order to boost financial inclusion and lower the cost\nof financial services. The CBK is also closely monitoring the impact of the recent\n2\n\nlegislation to cap bank interest rates on the economy, while implementing additional\nmeasures to lower the cost of credit on a sustainable basis.\nLet me now turn to some of the available investment opportunities, which in my view\nprovide the diaspora with an opportunity to participate in the development of our\neconomy. I am happy that these products leverage on mobile financial services thereby\nmaking it easier for investors to place their investments. The Treasury Mobile Direct\n(TMD), which was rolled out in December 2015, offers a channel to access small\ndenomination government securities through the mobile phone. The TMD has improved\nthe efficiency of the existing domestic debt issuance operations, while also increasing\nretail investors’ participation in the primary auctions for government securities.\nAdditionally, the M-Akiba initiative seeks to increase the public’s participation in\ngovernment securities through the existing mobile-phone money transfer services, and\nwith a low minimum investment amount of USD30. Plans are underway for the launch of\nthe first M-Akiba infrastructure bond.\nAdditional investment channels in government securities, including diaspora bonds, are\nalso being considered. In particular, infrastructure bonds are a very popular investment\nchannel, tied to the financing of the Government’s long-term infrastructure projects. These\nbonds were introduced in February 2009, and their success has signaled the launch of\nsimilar bonds by corporates.\nThe diaspora youth and women also have an opportunity to participate in the Government\ngender and youth empowerment programs. Currently, 30 percent of all Government\nprocurements are allocated to the youth, women, and persons living with disabilities. The\nGovernment has indicated its intentions to expand the opportunities for the youth in\nprocurement through the Access to Government Procurement Opportunities platform.\nAs I close, I would like to challenge the Kenyan diaspora to take advantage of the\nimproved business environment and the increasing investment opportunities in the country\nas a way of participating in the macro-management of the economy. Let me once again\ncongratulate the Kenya Diaspora Alliance for organizing this forum.\nThank you!\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke/uploads/speeches/633643830_Governor's Remarks - 3rd Annual Kenya Diaspora Homecoming 2016.pdf"}
{"doc_id": "9a1b0619d3fdb9536ec2c42dd5eb2eaa", "text": "CENTRAL BANK OF KENYA\nAFRO-ASIA FINTECH FESTIVAL NAIROBI ONLINE CITY\nIn partnership with the 2020 Singapore Fintech Festival\nOpening Remarks by Dr. Patrick Njoroge\nGovernor, Central Bank of Kenya\nDecember 7, 2020\nAs Prepared for Delivery\nGood Morning, Good Afternoon, Good evening! It is a great honour for the Central\nBank of Kenya (CBK) to host the Nairobi Online City, an iteration of the Afro-Asia\nFintech Festival (AAFF) launched in 2019. The AAFF Nairobi Online City is part of the\n2020 Singapore Fintech Festival (SFF). CBK is therefore honoured to join the global\ncommunity of Central Banks, governments, financial institutions, fintechs, and other\nplayers to deliberate and reflect on the theme of “People and Talent: Harnessing\nCollaboration in Pursuit of Resilience and Growth Post COVID-19.’’\nAt the outset, let me express CBK’s gratitude to the Monetary Authority of Singapore\n(MAS) for allowing CBK and almost 40 other cities to partner in expanding the reach of\nthe virtual 2020 SFF. I also appreciate all our partners and service providers who have\nworked with us to make this event a reality.\n2020 has been an exceptional year dominated by the coronavirus (COVID-19) pandemic.\nOur lives and livelihoods have dramatically changed as Governments, businesses and\ncitizens globally sought to contain the pandemic. There have been significant adverse\nhealth and economic effects that have rolled back global progress in efforts towards the\nshared prosperity of our citizens. As significant progress begins to be made on the\nmedical front in developing vaccines and therapeutic drugs, the conversation must shift\nto building back better.\n\nWhile the pandemic has been devastating, it has also accelerated digitalization that\nshould stand us in good stead as we transition to the post COVID-19 recovery. Digital\nplatforms have been the lifelines in accessing essential financial, health, education,\nmedical, entertainment and other services. We must embed these gains and leverage\nthem as we pursue global resilience and growth post COVID-19. Towards this end, we\nshall over the next few days, deliberate on various strategies. Let me highlight three\nbroad themes to set the stage.\nFirst, is restoring Small and Medium Enterprises (SMEs). SMEs are the engines of\neconomies globally and more particularly in Africa. However, they have borne the brunt\nof COVID-19 containment measures including movement restrictions and curfews. Their\nbusinesses have been disrupted causing adverse impact on lives and livelihoods. We will\nneed to accelerate digital ecosystems that will enable the SMEs to reconnect with their\ncustomers, markets and access the much needed finance for recovery.\nI therefore look forward to the panel discussions later today on reinventing SMEs\nthrough digital ecosystems that will provide an African perspective. I am sure that this\nwill be supplemented by the global perspectives from the United Nations Development\nProgram on Wednesday on inclusive digital finance for SMEs. However, we must\nremember that it is not just about digital platforms or finance, we also need to consider\nhow to retool the skills and business models of SMEs as they pivot to the post\nCOVID-19 era.\nSecond, is partnerships and collaborations. As we move forward, agility will be\nimperative particularly for incumbent institutions as they respond to changing customer\npreferences for anytime anywhere services. Even before the pandemic, incumbent banks\nand telecommunication companies had started to develop partnerships with agile fintech\ncompanies. This trend will have to be accelerated in a safe and sustainable manner as we\nbuild back.\nWe will this week hear from eminent leaders in the banking, telecommunication and\ntechnology sectors on their partnership and collaboration strategies. More interestingly,\nwe will also hear from fintechs and start-ups on their journeys through the pandemic and\nthe value proposition that they bring to building an inclusive ecosystem.\n2\n\nThird, is sustainable finance. At the heart of post COVID-19 recovery will be a\nrenewed focus on People, Purpose and Planet (3Ps). For resilience, finance must take\ninto account environmental, social and governance considerations. This is an area that\nthe Kenyan banking sector is setting the pace on. In 2015, Kenyan banks established the\nSustainable Finance Initiative to embed sustainability in their values and processes. It is\ntherefore befitting that some of the leading Kenyan banks in these areas will be sharing\ntheir sustainable finance experiences and strategies going forward later this week.\nAs we explore the opportunities of digitalization, we must remain seized of the risks. In\nparticular, cybersecurity and data governance pose a risk particularly for the increased\nnumber of our citizens who are accessing digital systems for the first time. We must\ntherefore ensure that we reflect on how to build cyber resilience in the new normal.\nEqually important is the protection of data on digital platforms that increasingly\ntranscend national borders. We need to urgently explore ways of ensuring our citizens\nare digitally literate and all participants in the digital ecosystem exercise responsible\ndigital leadership and governance.\nThe overarching theme in our discussions all through this week must be about People.\nWe must constantly ask ourselves, what are their needs? How does technology and\ninnovation meet these needs? Most importantly, how do we place People at the centre?\nIn closing, let me once again reiterate what a privilege it is for CBK to be hosting you.\nThe journey of building back better cannot be undertaken alone. Platforms such as the\nNairobi Online City provide opportunities for many more of us to come together. Let us\nwalk together, as we collectively work towards restoring the lives, livelihoods and\ndignity of our citizens.\nIt is now my distinct honour and pleasure to declare the Afro-Asia Fintech Festival\nNairobi Online City officially opened. I wish you all a fruitful virtual journey as you\ntraverse the World over the next three days.\nThank you!\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke/uploads/speeches/513370449_Opening Remarks by the Governor - Afro-Asia Fintech Festival Nairobi Online City.pdf"}
{"doc_id": "399e5612cf3ba782cbbea82b5ea2a98d", "text": "CENTRAL BANK OF KENYA\nRemarks by\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\naatt tthhee\nLLAAUUNNCCHH OOFF FFTTSSEE--NNSSEE TTHHEE KKEENNYYAA GGOOVVEERRNNMMEENNTT BBOONNDD IINNDDEEXX\nWednesday, October 3, 2012\n\nGround Breaking Launch of Kenya Government Bond Index, October 3rd 2012\nThe Chairman of the Nairobi Securities Exchange (NSE);\nChief Executive, NSE, Mr. Peter Mwangi;\nOfficials of the FTSE Group;\nCapital and Financial Market Executives;\nMembers of the Media;\nLadies and Gentlemen:\nAt the outset let me thank the Nairobi Securities Exchange Chief Executive for\ninviting me to participate in this auspicious moment of the launch of the FTSE-NSE\nKenya Government Bonds Index. This achievement is indeed critical for the\ndevelopment of a robust domestic financial market in Kenya. Today’s event comes at\na time when we as market players take pride in the success of our efforts in\nspearheading market development. This collaboration among market players has\nbeen instrumental in developing one of the fastest growing Bond Markets in Africa as\nthe Kenyan Bond Market is ranked among the top in Africa.\nLadies and Gentlemen: let me take a few minutes to make some remarks on the\ninitiatives and developments that have underlined the achievements of Kenya\nGovernment Securities Market. Over the last one decade, the Central Bank of Kenya\nin liaison with stakeholders in the financial sector has contributed significantly to the\nfollowing successes:\n1. Longer Maturity Profile of Domestic Debt Instruments: average\nmaturity profile of government securities rose from 8 months or ratio of 76:24\nin Treasury bills to Bonds in June 2001 to 5 years 5 months or ratio 20:80\ncurrently. With a well-functioning secondary bond market in place, the\nGovernment no longer faces rollover risks associated with short term debt\ninstruments.\n2. Benchmark Bonds Implementation: successful implementation of\nTreasury Bonds benchmarks and reopening to increase their liquidity since\nApril 2009 was a critical step towards addressing the Bond market\nfragmentation problem and in the development of a reliable yield curve in our\nmarket. About 16 benchmark bonds have so far been reopened bringing into\nthe market more than Ksh.138 billion and providing critical financing for the\nnational recurrent and development budget as per Government’s fiscal policy.\n2\n\nGround Breaking Launch of Kenya Government Bond Index, October 3rd 2012\n3. Project-Specific (Infrastructure) Bonds – The Government of Kenya\ntook a bold step in February 2009 to issue the first project/sector specific bond\nwith an aim to fund key infrastructure projects and set pace for public, private\nas well as supranational agencies to tap the market for long term funding\nthrough bond issuance. Five infrastructure bonds worth Ksh.130.85bn have so\nfar been issued thereby increasing the range of products in the market for\npurposes of diversification.\n4. Creating More Investment Opportunities to Spur National Savings\n– The issuance of a 30-year Savings Development Bond in 2011 and the\nreduction of minimum entry into Treasury bills market from Ksh.1,000,000 to\nKsh.100,000 in January 2009 were key milestones towards promoting a\nsavings culture among the populace and in widening the investor base for the\nGovernment Securities market.\n5. Putting in Place the Automated Trading System (ATS) – The\nintroduction of the ATS at the NSE in November 2009 was a great step towards\nachieving bond trading efficiency, effective pricing, increased market\nconfidence and transparency as well as enhanced reliability and firming of the\nyield curve.\nLadies and gentlemen, a well-developed and functioning financial market is\nregarded as the lubricant for the economy. In order to further enhance the proper\nfunctioning of the financial market, the Central Bank together with other market\nstakeholders has been working on a number of initiatives to further enhance the bond\nmarket so as to support the country’s development agenda under Vision 2030. These\nreforms include:\n Development of the Over The Counter trading platform,\n Introduction of online bidding for government securities,\n Implementation of government securities market makers.\nThe step taken by the Nairobi Securities Exchange to introduce the FTSE NSE\nGovernment Bond Index is a welcome initiative for this market as the index will play\n3\n\nGround Breaking Launch of Kenya Government Bond Index, October 3rd 2012\na key role in providing a benchmark tool for measuring market performance. It will\nalso facilitate diversification through emergence of new financial products and\nmarket participants thereby encouraging foreign investors. Finally, it will have the\nbenefit of opening up the market to the rest of the world and increasing Kenya’s\nfinancial sector competitiveness in the region and across the world. It surely does set\nthe pace for the regional market. I wish therefore to congratulate the Nairobi\nSecurities Exchange for the foresight of developing the bond index.\nWith these remarks, ladies and gentlemen, I now declare the FTSE NSE Kenya\nShilling Government Bond Index formerly launched.\nThank you all for your listening\n4", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2012/launch%20of%20the%20ftse%20nse%20kenya%20govt%20bond%20index.pdf"}
{"doc_id": "756dc5afe0ac3d01bd08d4c024694eef", "text": "CENTRAL BANK OF KENYA\nSPEECH\nBY\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCCEENNTTRRAALL BBAANNKK OOFF KKEENNYYAA\naatt tthhee\n88TTHH AASSSSOOCCIIAATTIIOONN OOFF SSAAVVIINNGGSS BBAANNKKSS OOFF EEAASSTT AAFFRRIICCAA ((AASSBBEEAA))\nMMEEEETTIINNGG\nPanafric Hotel, Nairobi\n23rd November 2010\n\nMr. Stephen Mukweli, the Chairman of ASBEA;\nMr. Chris de Noose, Managing Director, World Savings Banks Institute\n(WSBI);\nMr. Wilson Kinyua, Chairman, Kenya Post Office Savings Bank;\nMrs. Nyambura Koigi, Managing Director, Kenya Post Office Savings\nBank;\nChairpersons and Chief Executives of ASBEA Member Institutions here\npresent;\nDistinguished Guests;\nLadies and Gentlemen:\nIt is my distinct pleasure to join ABSEA members at this important meeting. I am\ngrateful for the invitation to join you as you commence your deliberations. Allow\nme to also welcome participants from our sister EAC states and those from beyond\nthe EAC. I urge you all to enjoy both the meeting and its content and above all, the\nhospitality that Nairobi offers.\nThis meeting is indeed timely given the current global focus on financial inclusion.\nOne and half weeks ago, the G20 Leaders meeting in Seoul, Korea mainstreamed\nfinancial inclusion in the G20 Agenda. The G20 adopted a financial inclusion\naction plan; announced the establishment of the Global Partnership for Financial\nInclusion and an SME Finance Framework. These actions are expected to\nsignificantly contribute to improving access to financial services and expanding\nopportunities for poor households and small and medium enterprises. Last week, a\nGlobal Savings Forum was convened in Seattle, USA by the Bill and Melinda\nGates Foundation. The Forum, at which Savings Banks Institutions were well\nrepresented, focused on building a new financial infrastructure to bring financial\nservices to the poor.\nLadies and Gentlemen: One of the factors that sustains and drives poverty is\naccess to markets. Financial market access is important for the poor to support\nsavings, build up and accumulate assets. The poor need safe havens for their\nsavings that they can use to build assets, smoothen their consumption and protect\nthem from periodic shocks. Closer home in the EAC, a significant proportion of\n2\n\nthe population, over 50% in most of the countries, lacks access to any form of\nformal or informal financial services. We therefore face a considerable but\nsurmountable task of pushing forward the financial inclusion frontiers. Savings\nBanks certainly have a critical role to play in this regard given their long history in\nthe region. Indeed, yesterday saw the centenary celebrations of the Kenya Post\nOffice Savings Bank. For most East Africans, the Postal Banks were their first\nintroduction to the world of financial services through the iconic “passbook”. Over\nthe years, the passbook has been phased out and replaced by “paperless”\ntransactions.\nBut against all odds, the EAC countries have set ambitious targets to move to new\ndevelopment frontiers. For instance, Kenya in its Vision 2030 seeks to raise the\nSavings to GDP ratio from 14 to 32%. To achieve this target, barriers to savings\nneed to be identified and addressed. These barriers include costs of operating\nsavings accounts and even distance to access financial services points. In this\nregard, the Central Bank of Kenya continues to promote innovation, adoption of\nnew models and creation of new institutions to promote financial inclusion. But\nabove all, we need to reduce costs of doing business for financial institutions to\nprovide these services and the incentives they carry.\nLadies and Gentlemen: Innovation is a critical component of the Central Bank’s\nreform agenda. The Bank has promoted the uptake of mobile financial services in\nKenya that have led to rapid and massive up-scaling of financial services in Kenya.\nWell over 15 million Kenyans now enjoy mobile financial services that picked up in\n2007 with the introduction of mobile money transfers. There is now a growing\nintegration of the platforms of telecommunication companies and banks. This year\nhas seen the launch of integrated and co-branded telecommunication and banking\nsavings products that have already recruited over 700,000 customers and\nmobilized over 5 million US Dollars in deposits. In the category of micro accounts\nin Kenya, we have seen in the last three years a great expansion; from about 4\n3\n\nmillion accounts to 11.25 million accounts currently. It means we are slowly\nsucceeding in our efforts on financial inclusion.\nWith regard to adoption of new models of financial inclusion, the Central Bank\nrolled out the Agent Banking model for commercial banks in May of this year. This\nmodel will enable banks to expand their outreach cost effectively through use of\nthird parties. We have so far approved over 8,000 agents. This model provides\nopportunities for banks to also partner with Savings Banks who traditionally have\nhad extensive outreach particularly through the postal system.\nLadies and Gentlemen: To promote financial reach and access, particularly to\nrural and peri-urban areas, the Central Bank has since 2009 licensed three Deposit\nTaking Microfinance Institutions. Microfinance institutions target low income\nsegments of the population and operate close to where these market niches are\nlocated. The three institutions have in their short period of existence already\nmobilized over 90 million US Dollars in deposits.\nThe most recent institutional reform carried out by CBK was the introduction of\nCredit Information Sharing in July of this year. This is intended to facilitate sharing\nof credit information, initially by commercial banks and later by other financial and\nnon financial institutions. Credit Information Sharing is expected to facilitate access\nto affordable credit through the building of information capital. This is particularly\npertinent to small and medium size enterprises and individuals in the informal\nsector who lack physical collateral to access credit. We believe even in the EAC\nregion Credit Reference Bureaus will facilitate change and adoption of new\ncollateral technologies.\nLadies and Gentlemen, as I draw to a close, I challenge ABSEA members to rise\nto the moment and reclaim their pride of place in the financial ecosystem. I note\nyour efforts to embrace technology, but more must be done if you are to stay\nrelevant in a fast evolving financial world. You must seek to grow partnerships with\nother financial institutions and emerging market players like telecommunication\n4\n\ncompanies to survive in the new financial ecosystem. I am confident that Savings\nBanks can leverage on their long standing history in the EAC and their extensive\ndelivery channel networks to play their role in promoting financial inclusion for the\nbenefit of the East African citizenry.\nLadies and Gentlemen: With these remarks, it is now my pleasure and honour\nto declare the 8th Association of Savings Banks of East Africa Meeting officially\nopen and wish you fruitful deliberations.\nThank you.\n5", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2010/Governor%27s%20Remarks%20at%208th%20ASBEA%20Meeting.pdf"}
{"doc_id": "70cf73a73fc6cbd71efd424fd09c01ad", "text": "CENTRAL BANK OF KENYA\nSPEECH\nBY\nPROF. NJUGUNA NDUNG’U\nGOVERNOR\nCENTRAL BANK OF KENYA\nAT THE\nAFRICAN WOMEN’S ECONOMIC SUMMIT\nWindsor Golf Hotel and Country Club, Nairobi\n18th to 20th March, 2010\nThe Right Hon. Raila Odinga, Prime Minister of the Republic of\nKenya;\n\nHon. Uhuru Kenyatta, Deputy Prime Minister and Minister for\nFinance of the Republic of Kenya;\nMrs. Graca Machel, Founder, New Faces, New Voices Network;\nDr. Donald Kaberuka, President, African Development Bank;\nDistinguished Guests;\nLadies and Gentlemen:\nFirst, Rt. Hon. Prime Minister, may I take this opportunity to thank\nyou most sincerely for finding time from your busy schedule to grace this\nimportant Forum whose theme is Investing Differently in Women. Your\npresence demonstrates the seriousness with which the Government of\nKenya embraces the role of women and participation in the development\nprocess and more importantly their role in the financial sector.\nMay I also heartily thank the New Faces, New Voices Network (NFNV), the\nFounder Madame Graca Machel and the African Development Bank (AfDB)\nrepresented by the President, Dr. Donald Kaberuka for choosing to host the\ninaugural African Women’s Economic Summit (AWES) in Nairobi. This is a\ngreat honour to us in Kenya. I also warmly welcome all international\ndelegates represented here including fellow central bankers from the region.\nThe Rt. Hon. Prime Minister, the Central Bank of Kenya is delighted to\npartner with AfDB and NFVN in this Summit especially when the Central\nBank and indeed the Government of Kenya is in the process of promoting\nmore inclusive financial policies.\nIn the recent past, the Government has introduced new institutions to\nsupport, shape and deepen the financial sector. Examples include:\n• Licensing and supervision of Deposit Taking Microfinance Institutions\n• Savings and Credit Co-operatives (SACCOs) and the SACCOs Regulatory\nAuthority\n2\n\n• Amendment of the Banking Act to allow Shariah Compliant Banking\nproducts.\n• Licensing of Credit Reference Bureaus to facilitate credit information\nsharing\n• Agent Banking for cost effective financial outreach\nSince we have seen commercial bank branch expansion by over 100\nbranches in three years, deposits have increased from KSh.800 billion on to\nKSh.1.01 trillion and accounts from 2.4m to 8.4m in the same period.\nThe Rt. Hon. Prime Minister, as we commence deliberations at this\nimportant summit, it is prudent to identify the issues that limit women’s\naccess to financial products and services and explore innovations to expand\nthe access to affordable financial services to women at all income levels.\nLadies and Gentlemen, ultimately this Summit offers us the opportunity\nto identify and propagate key actions that financial sector market players\nand policy makers need to take to invest differently in women and towards\nbuilding stronger financial sectors and competitive economies in Africa that\nare inclusive. We should therefore identify the policy drive expected in this\nregard and be the agents of the change required towards this end.\nThe Rt. Hon. Prime Minister, with these few remarks, it is now my\npleasure and duty to welcome your Rt. Hon. Raila Odinga of the Republic of\nKenya to make a few remarks and to welcome you to address this Forum.\nRt. Hon. Prime Minister, you have the floor.\n3", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2010/African%20Women%27s%20Economic%20Summit.pdf"}
{"doc_id": "92d7d1ed84f840788f93acaf0d1b8ddc", "text": "CENTRAL BANK OF KENYA\nKeynote Speech by\nPROF. NJUGUNA NDUNG’U, CBS\nGOVERNOR\nCENTRAL BANK OF KENYA\nduring the\nLAUNCH OF THE FINACCESS SURVEY REPORT, 2013\nSerena Hotel, Nairobi\n31st October, 2013\n- 1 -\n\nHon. Henry Rotich, the Cabinet Secretary to the National Treasury;\nHon. Aden Mohamed, the Cabinet Secretary to the Ministry of Industrialization and\nEnterprise development;\nThe Chief Executive Officers of the Domestic Financial Sector Regulators;\nDistinguished Ladies and Gentlemen:\nIt is my honour and pleasure to join you this morning to formally launch the results of\nour third national survey on access to financial services in Kenya. Before making my\nremarks, let me take this opportunity to thank all the collaborating partners under the\nFinancial Access Partnership (FAP), FinAccess Management comprising of Central\nBank of Kenya (CBK) and the Financial Sector Deepening (FSD) Kenya as well as the\nFinAccess Secretariat based at the Research and Policy Analysis Department of the\nCentral Bank of Kenya for making today’s launch possible. Let me also appreciate our\ntechnical partner, the Kenya National Bureau of Statistics (KNBS), for providing\ncritical support to the initiative.\nOn a solemn note, we recall the loss of Mr. Ravindra Ramrattan of FSD Kenya,\nfollowing the terrorist attack at the West Gate Mall on 21st September 2013. Ravi was\na devoted member of the FinAccess Secretariat and contributed immensely to the\nsurvey. Let us observe a minute of silence in honour of those we lost in the West Gate\nMall Tragedy.\nLadies and Gentlemen: The Government recognizes the vital role the financial system\nplays in the economy. In this regard Kenya’s development blue print, Vision 2030,\ncovering the period 2008 - 2030, envisages the financial services sector being\ntransformed into a vibrant and globally competitive sector that will drive high levels of\nsavings to finance the country’s investment needs. The transformation entails\ndoubling deposits mobilization from 44% to 80% of GDP and enhancing growth of\nsavings channelled into productive investments from 14% to over 30%. This goal can\nbe achieved by addressing the Vision’s three core objectives, namely: enhancing\nfinancial system stability, efficiency, and expanding financial access and usage.\n Regarding the objective of Expanding Access to Financial Services, which is our\nmain theme this morning, there would be no meaningful financial sector\ndevelopment, if it is not accessible. There is, therefore, a case for expanding\naccess of quality and affordable financial services and products to majority of\nthe population. Access to finance will encourage savings and credit. This will\neffect savings/investments cycle, allowing for capital accumulation and asset\nbuilding which enables the poor to escape poverty. Safe havens for savings by\nthe poor reduce their vulnerability to periodic economic and social shocks.\nAccess to finance will expand the level of participants and so lower unit costs.\n- 2 -\n\nLadies and Gentlemen: Our efforts to ensure expanded financial access have been\nmeasured by three national financial access surveys for 2006, 2009 and 2013.\nThese surveys have clearly demonstrated that Kenya’s financial landscape has\nconsiderably changed over the period 2006-2013. The financial system is now\noffering a wider range of financial services and products to more Kenyans,\ncovering a wider geographical spread, and even going beyond Kenyan borders.\nThis has strengthened the banks and created a wider market. These\ndevelopments are a testimony to the strength and vibrancy of our banking sector it\nhas contributed to Kenya’s financial development.\n Enhancing the Efficiency of the financial system has an immediate impact on the\nwelfare of its customers and the wider real economy through the consequent\nreduction of costs of financial services. Competition is essential in ensuring that\nfinancial institutions are incentivised to invest in improving productivity, efficiency\nand cost effectiveness. The CBK has acted to encourage greater transparency in\npricing of financial services and products to foster effective competition and\ndelivery of services to majority of Kenyans.\n On the Financial Stability Front, the Government has continued to implement\nnecessary reforms designed to strengthen the legal, regulatory and supervisory\nframework in to ensure stability of the financial system. Lessons from the 2008 -\n2009 global financial crisis call for regulators to invest in better regulation. Better\nregulations is characterised by a regulatory framework with ability to:\n readily identify weaknesses and emerging vulnerabilities;\n analyse and price risks;\n provide appropriate incentives (and penalties) to induce prudent behaviour in\nthe market place; and\n encourage innovations and develop strong institutions of the regulators and\nthe regulated – strong institutions enforce the rules of the game and define\nappropriate incentives.\nLadies and Gentlemen: I am delighted to note that the FinAccess Survey, 2013 results\nbears witness to the above gains made in enhancing the reach and coverage of\nfinancial services to Kenyans. It shows that the proportion of the adult population\nusing formal financial services rose to 66.7% in 2013 from 27.4% and 41.3% in 2006\nand 2009, respectively. The proportion of the financially excluded on the other hand\nhas been falling steadily from 39.3% in 2006 to 31.4% in 2009 and now stands at\n25.4% of the adult population. Equally and more striking, the proportion of the\npopulation using informed financial services has declined to 7.8% from 35.2% in\n2006 and 26.8% in 2009. These findings demonstrate impressive achievements and\nvindicate policy strategies and reforms undertaken by Government and initiatives and\ninnovations by the financial sector players’ as having helped expand financial\ninclusion. It is even more interesting to note from the results that many more people\nare now accessing and using financial services and products supplied by diverse\n- 3 -\n\nproviders. This shows that people are now moving towards using a broader portfolio\nof financial services and products to satisfy their needs. The use of combinations of all\nformal prudential, formal non-prudential, other formal and informal financial services\nexcept the excluded has been rising from 16% in 2006 to 25% in 2009 and to 29% in\n2013. These patterns demonstrate that financial sector participants require choices\nand therefore the need to maintain diversity and encourage competition amongst\nproviders of the different financial products in different market segments.\nLadies and Gentlemen: The survey results we are releasing today are as a result of\ndevelopments in the wider economy, policy and regulatory reforms, increased\ncompetition and innovation and advances in information and communication\ntechnology. These developments have set off a dramatic shift away from the\ntraditional delivery of financial services. In the banking industry, the introduction of\nAutomatic Teller Machines (ATM) a few years ago already moved customers out of\nthe physical branches. And now more than ever, access through point-of-sale (POS)\ndevices, the internet and mostly through mobile phones platforms have accelerated\nand are still poised to accelerate the swing to branchless banking. We, however, still\nhave some ground to cover in expanding access to financial services, given that about\n25% of the population remains totally excluded.\nLadies and Gentlemen: The information generated by the past three FinAccess\nsurveys will help financial service providers identify where opportunities exist. I am\ndelighted that the sector now has such useful information resource at its disposal.\nIn conclusion, Ladies and Gentlemen, let me also observe that the FinAccess studies\nhave been championed and driven by a partnership between public and private\ninstitutions. I commend and support such initiatives and hope that this lays the\nfoundation for a deeper and sustained partnership between the public and private\nsector in tackling the challenges and taking advantage of opportunities that arise. In\nthis regard, I thank all the institutions under the FAP that have contributed in various\nways towards these FinAccess surveys, particularly the 2013 survey – notably the\nFSD, Kenya, Kenya National Bureau of Statistics (KNBS), Kenya Bankers Association,\nthe research house TNS-RMS, Kenya Institute for Public Policy Research and Analysis\n(KIPPRA), Kenya Commercial Bank (KCB), Development Alternative International\n(DAI) and the CBK.\nLadies and Gentlemen: Beside the FinAccess studies that provide us all with valuable\ninformation as to where we should focus our efforts most in order to achieve our goal\nof providing affordable and accessible financial services and products to majority\nKenyans. I wish to inform you that FAP is also working with CBK, FSD, Kenya and\nBill and Melinda Gates Foundation on the spatial mapping of all financial access\ntouch points, the findings of which will improve our understanding on how to\nenhance financial inclusion.\n- 4 -\n\nWith these few remarks, Ladies and Gentlemen, I welcome you to this breakfast event\nand look forward to the Launch.\nTHANK YOU.\n- 5 -", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke//images/docs/speeches/2013/FINACCESS%202013%20Launch%20Speech.pdf"}
{"doc_id": "96c5b55b18d68f4adcc649fe6af78239", "text": "CENTRAL BANK OF KENYA\nEmerging and Frontier Economies at a Crossroads\nDr. Patrick Njoroge\nGovernor, Central Bank of Kenya\nNovember 2022\n(777 words)\nThe cheery global outlook of a year ago has turned to impending gloom. Central bankers in\nadvanced economies finally found their resolve to deal decisively with record-high inflation,\nno matter if the global recovery stalls. Their earlier indecisiveness drew the ire of the\nfinancial markets and citizens braced for further blows to their livelihoods. These actions\nhave also had wider spillovers, particularly the frontier and emerging market economies,\nwhich if ignored would imperil all economies.\nThese recent policy moves have amplified—not reduced—three global concerns:\nunanchoring of inflation; the marked strengthening of the US dollar; and turbulence in the\nleading financial markets. These winds have combined to a perfect storm for Emerging\nMarket and Developing Economies (EMDEs). However, there is little effort to capture these\nspillovers in the policy choices of advanced economies, even as the spillbacks include\nmaterial financial stability risks.\nThe current conjuncture arises from diverse factors, with excess liquidity from the pandemic\nresponse measures and supply chain disruptions as the early triggers. The war in Ukraine and\nthe resultant disruptions to energy supplies and global food chains have exacerbated the\nsituation. Escalating inflation everywhere is elevating the cost of living, crushing the\neconomic recovery, and made a global recession virtually certain. For low- and middle-\nincome countries, the high prices and shortage of food products, fuel, and fertilizers are\nparticularly damaging. The United Nations has warned of “a global emergency of\nunprecedented magnitude” with up to 345 million people at risk of starvation.\nMonetary authorities in advanced economies led by the US Fed are now playing catch-up\nand raising interest rates sharply. This has generated significant volatility and movements in\nthe financial markets with substantial spillovers. The US dollar has surged to a 20-year high\nagainst a basket of major currencies, pushing the euro, sterling pound, Japanese yen and\nseveral emerging markets currencies to historic lows. Further, with the resultant flight of\ncapital to the safety of the US dollar, financing from the global capital markets has dried up\nfor EMDEs and particularly for the frontier economies. This has made it difficult to close the\nfiscal and external financing gaps in those countries.\n\nIn the wake of more volatile markets and a global recession, EMDEs will bear the brunt\nthrough no fault of their own. In designing the emergency policies to protect their\npopulations, policymakers in low- and middle-income countries are severely constrained by\nthe limited fiscal space and high debt levels post-COVID. The drying up of external\ncommercial and concessional financing has only served to worsen the situation.\nUnfortunately, the traditional safety nets do not appear to be ready for the impending storm.\nThey remain small, ineffective, and unable to take up the slack. Concerns about debt levels\nhave severely limited the scope for additional borrowing from International Financial\nInstitutions (IFIs). This state of affairs calls for urgent action.\nFirst, policy makers in advanced economies should place more weight on the spillovers of\ntheir policies on EMDEs. A useful starting point would be considering the spillbacks from\nfinancial stability risks in EMDEs. The just concluded IMF/World Bank meetings in\nWashington DC provided a platform to reaffirm a stronger solidarity among nations. The\njury is still out on whether this message was received with the appropriate urgency.\nSecond, the global economy needs rebuilding, starting with eradicating the food shortages.\nResolving the fundamental supply chain constraints particularly for oil, food and other\nessential commodities is imperative. Availability of food is critical especially in the Horn of\nAfrica, where famine is imminent, and millions more staring at hunger. A related important\ncomponent will be addressing climate change and accelerating the transition to a low carbon-\nclimate resilient global economy. Significant public and private sector finances will be\nrequired in the transition.\nThird, policy makers in advanced economies should support the immediate strengthening of\nsafety nets for EMDEs from the IFIs. As an immediate step, the level of support from the\nbilateral and multilateral development partners to frontier economies should be increased,\nsped up, and made more flexible. This could also be in the form of debt management\noperations that increase fiscal space and ease the debt constraints. These are especially\ncritical in this cycle.\nFourth, EMDEs will need to sustain strong macro-economic policies and strengthen the\nstructure of their economies, as a basis for their resilience. This includes diversifying their\neconomies for greater protection against shocks and to spur inclusive growth.\nFinally, EMDEs bearing the brunt of actions of the advanced economies should stand\ntogether. They should raise their collective voices at the IFIs and other international bodies\non the acute difficulties that they face. They should also learn from each other, and lean on\neach other.\nDr. Patrick Njoroge is Governor of the Central Bank of Kenya", "source": "CBK", "stratum": "cb_requests", "fetch_date": "2026-04-26", "url": "https://www.centralbank.go.ke/uploads/speeches/1992282997_Emerging and Frontier Economies at a Crossroads.pdf"}
{"doc_id": "0c62a632c9952308743b87cb1ad80068", "text": "Many South African parents are falling under the burden of the rising cost of living and providing for their children’s education and basic needs. The cost of education, stationery, and other necessities like school uniforms can be particularly high, making it difficult for many families to cover these costs, leading to financial stress and strain on parents, as well as difficulties for children in terms of accessing the resources they need to succeed in school.\nThere is no doubt that the cost of living crisis is having a massive impact on people across all income levels around the world. According to the UN Development Programme, soaring food and energy prices have seen 71 million people in developing countries fall into poverty. In South Africa, economists believe the country is at a high risk of entering a recession this year amidst the ongoing scourge of load shedding, rising interest rates, and unemployment.\nOne of the most effective ways of breaking the cycle of poverty that is leaving millions of children, youth, and adults behind is that of education.\nCost of education\nAccording to Old Mutual, education inflation is outpacing the Consumer Price Index by up to 3%. Further statistics show that if a child starts Grade 1 this year, parents can expect to pay between R651 000 and R1.9 million for public or private education respectively over their school career. Realistically, this means that most parents, regardless of income levels, will be unable to save the full cost of their child’s school and tertiary education fees.\nOf course, the escalating cost of education also impacts the economic growth of a country. Limited access to quality education may lead to a reduced talent pool, stifling innovation. Additionally, growing inequality in educational opportunities can exacerbate social divisions and contribute to political instability, affecting market prospects.\nWhen factoring in the most recent inflation figures that have seen consumer prices in December rise by 0.4%, following a 0.3% rise the previous month, it has become vital for parents to look at alternative ways of saving for their children’s education.\nTraditional limitations\nSome people may think that their life insurance or funeral policies will provide enough money for their children to continue attending the same schools in the event of their untimely death. Unfortunately, the amount of money provided by these policies may not be sufficient to cover the full cost of education, particularly for private schools or expensive state-run institutions.\nAdditionally, it is not a common practice for life insurance policies to be specifically designated for educational expenses. In most cases, the beneficiaries of the policy can use the funds as they see fit, which may not necessarily be for the children’s education. Of course, there are also funeral costs, outstanding debts, and other expenses to consider beyond school and other educational fees.\nCaregivers must also keep in mind that lump sum insurance payments received on the death of the parents should be invested. This creates additional uncertainty especially when it comes to the return on investment. And then there is the administrative burden with funds having to be withdrawn at regular intervals to pay for school fees and other educational expenses.\nSpecialised cover\nIt is against this backdrop that a dedicated education insurance policy becomes crucial - one that is designed to cover the cost of a child’s education in the event of the death or disability of a parent or guardian. The best education insurance policies allow for the fees to be paid directly to the school or education institution via a trust that is ring-fenced to only cater for the educational needs of the child.\nFactors such as tuition, uniforms, books, and other educational expenses must all be considered. They must also make sure that the policy covers the local and international schools the child will likely consider. Another caveat is whether the policy will cover private or public schools, or both.\nBuilt-for-purpose education insurance policies provide parents with the peace of mind they need to invest in and provide a launchpad for them to grow. It is also important from a broader societal perspective. Education is key to personal and societal development, economic growth, reducing inequality, human rights, and preparing for the future. It is an investment that has a long-term impact and benefits for individuals, society, and the economy as a whole.\nInvesting in education equips the new generation with the skills and knowledge needed to adapt to rapidly changing economic, social, and technological environments. Education insurance is therefore a fundamental building block for parents to enable their children to continue their education journey when they are no longer around.\nBraudo is the CEO of Futurewise, an affordable education insurance provider", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/opinion/education-insurance-a-non-negotiable-in-tough-times-49781f94-31df-454e-81aa-4b144da63f31"}
{"doc_id": "5f7d47f3e3d87e5c514ac120381c1fc2", "text": "Advertisement\nSubstitution funding key to cutting tomato import bill\nLately, the conversation in my kitchen revolves around the soaring prices of tomatoes.\nEvery time the shoppers in my family return from the market, they can't help but comment on the exorbitant cost of this red fruit, which happens to be an essential ingredient in many of our meals.\nGhana is a country that is heavily dependent on imports to meet its domestic needs.\nOne of the areas in which this is most apparent is in the agriculture sector, where the country imports a significant amount of its food products.\nIn particular, Ghana is heavily reliant on imported tomatoes from a Sahelian country, Burkina Faso, to meet the demands of its population.\nData from the Ministry of Trade and Industry pegs the import from Burkina Faso alone at $400 million.\nThe recent insurgence in the Sahelian country meant that we are in the middle of a tomato famine.\nWhile tomato production in Ghana has the potential to meet local demand, the country's tomato farmers face a range of challenges that have hampered their ability to produce enough tomatoes to meet domestic needs.\nOne of the key solutions to this problem is the provision of import substitution funding from the government.\nImport substitution\nThe first step in addressing Ghana's reliance on imported tomatoes is to understand the factors that have led to this situation.\nOne of the key factors is the lack of investment in the country's tomato industry.\nGhana's tomato farmers lack the resources and support they need to produce enough tomatoes to meet the demands of the country's population.\nIn addition, the country's tomato farmers are facing increasing competition from imports, which are often cheaper than locally produced tomatoes.\nAlthough tomato was part of the vegetables that received attention from the Planting for Food and Jobs (1D1F) policy, it appears the needed impact in the value chain has not been made and felt in the markets and in our pockets.\nGiven these challenges, import substitution funding from the government could play a critical role in supporting Ghana's tomato farmers.\nSuch funding would provide financial support to farmers, enabling them to purchase the equipment, fertilisers, and other inputs they need to produce enough tomatoes to meet domestic demand.\nAdditionally, such funding could be used to support research and development efforts that would help to improve the quality and yield of locally produced tomatoes.\nBenefits of import substitution\nImport substitution funding from the government could have a range of benefits for Ghana's economy and its population.\nOne of the key benefits is the potential to create jobs and stimulate economic growth.\nBy supporting local tomato farmers, the government could create new employment opportunities in the agriculture sector.\nThis would not only benefit the farmers themselves but also other businesses that support the sector, such as transport companies and fertiliser suppliers.\nAnother potential benefit of import substitution funding is the reduction of Ghana's trade deficit.\nThe country's reliance on imported tomatoes is contributing to a significant trade deficit, as Ghana is forced to spend large sums of money importing tomatoes from other countries.\nBy supporting local tomato farmers, the government could reduce this deficit, saving valuable foreign exchange reserves that could be used to support other areas of the economy.\nFurthermore, import substitution funding could also have a positive impact on Ghana's food security.\nThe country's dependence on imported tomatoes has left it vulnerable to external shocks, such as changes in global market prices or disruptions to global supply chains.\nBy supporting local tomato farmers, the government could help to ensure that the country has a reliable and secure source of tomatoes, reducing the risk of food shortages or price spikes.\nChallenges\nWhile import substitution funding could be an effective solution to Ghana's reliance on imported tomatoes, there are several challenges that must be addressed to make this a reality.\nOne of the biggest challenges is ensuring that the funding reaches the farmers who need it most.\nThis will require effective coordination between the government, financial institutions, and other stakeholders in the agriculture sector.\nAnother challenge is ensuring that the funding is used effectively.\nThe success of the funding will depend on the ability of farmers to use it to increase their productivity and produce high-quality tomatoes that meet domestic demand.\nThis will require effective training and education programmes that help farmers to improve their farming practices and access new markets.\nSustainable\nFinally, there is the challenge of ensuring that the funding is sustainable over the long term.\nWhile import substitution funding can provide a boost to Ghana's tomato industry, it is not a long-term solution in and of itself.\nTo achieve sustainable growth, the government will need to implement policies that support the continued development of the sector and encourage private investment in the industry.\nWhich soup or stew in Ghana doesn’t require tomatoes?\nWe can’t do without it so we must do all we can to make it cheaper and affordable.\nThe author is Founder & Chancellor of the Wisconsin International University College and the immediate past President-General of the West Africa Nobles Forum.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.graphic.com.gh/features/opinion/ghana-news-substitution-funding-key-to-cutting-tomato-import-bill.html"}
{"doc_id": "df73f77c2d7c6a2be2da8bfb64960d9d", "text": "Afrobeats has reached a new height in the global world.\nThe music genre, which has become a worldwide phenomenon following its rapid growth in the last few years, is finally getting its own Billboard music chart.\nIn collaboration with Afro Nation, Billboard, on Tuesday, March 22, announced the launch of the first-ever United States chart for Afrobeats music.\nThe Afrobeats Songs Chart would rank the 50 most popular Afrobeats songs in the United States. The chart is expected to go live on Billboard.com on March 29.\nThe ranking would be based on a weighted formula incorporating official streams on both subscription and ad-supported tiers of leading audio and video music services, plus download sales from top music retailers.\nThis news follows the growth of Afrobeats from the shores of Africa to the world. In the past few years, the genre has yielded some of the biggest success stories of the young decade.\nAfrobeats have seen a push with the nomination of Afrobeats albums like Made In Lagos (Grammy 2022), Twice as Tall (won Best Global Music Album category in 2021) and African Giant.\nThe popularity of songs like Wizkid‘s “Essence” featuring Tems, CKay’s “Love Nwantiti (Ah Ah Ah)” and Fireboy DML‘s “Peru\" have also pushed the genre to new heights.\nIn a press release, Afro Nation founder Obi Asika noted that \"I am humbled to have made a contribution to growing the genre alongside many talented, passionate people.\"\n\"There is still so much more potential within the scene and the community that has grown around it and I believe it is vital that with Billboard we now have a U.S. chart that reflects this growth,\" he continued.\nHe added that this chart would provide a platform on which emerging artistes can win over new audiences while showcasing their talents to the world.\nMeanwhile, Billboard stated that they are excited to launch the Billboard U.S. Afrobeats Songs Chart.\n“As with much of the world, Afrobeats has grown tremendously as a genre in America and we are proud to showcase the top songs and artists with this new weekly ranking.”\nPrior to this, Afrobeats songs made appearances on other billboard Charts including Top Triller, Billboard Hot 100, Reggae Albums chart, and others.\nThis, however, is not the first chart to project Afrobeats. In 2020, The Official Charts Company in the UK launched the 'Official Afrobeats Chart'. This came after Afrobeats artists collectively spent 86 weeks in the Official Chart Top 40 in 2019.\nLatest Stories\n-\nParis 2024Q: Nora Hauptle confident Black Queens can overturn Zambia first leg deficit\n-\nAfrican Games 2023: LOC to spend GHS 33.4 million a day on ‘operational expenses’\n-\nAfrican Games: Abdulai Mukarama & Stella Nyamekye join Black Princesses as late call ups\n-\nElection 2024: I intend to keep my promises – Mahama assures Ghanaians\n-\nBawku conflict: NCA, NMC to be petitioned over closure of 4 radio stations\n-\nMinisterial reshuffle: Akufo-Addo names caretaker ministers\n-\nUK-Ghana Science, Technology & Innovation Strategy: Ghanaian delegation arrives in London to explore opportunities for implementation\n-\nFGR to recapitalize Bogoso Prestea Mine as part of planned restructuring\n-\n”Some people are bringing Hearts of Oak to a lower level; I won’t accept that” – Hearts Coach\n-\nUniversity of Ghana revises plagiarism policy to include AI\n-\nPrivate tertiary institutions must charter before August 31 – GTEC warns\n-\nKenneth Mitchell: ‘Star Trek’ and ‘Marvel’ actor dead at 49\n-\nBawumia lauds Ahmadiyya Muslim Mission for contributions to Ghana’s development\n-\nIf I can do it, you can too – Adekunle Gold to sickle cell survivors\n-\nReview BoG’s Inflation Targeting framework – US-based economist", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/billboard-in-collboration-with-afro-nation-to-launch-new-u-s-afrobeats-songs-chart/"}
{"doc_id": "ffa7ced70d70bb44e0c465df3b2b29da", "text": "Advertisement\nStrategies for SME managers to survive in a high-tax environment\nGhana, like many growing economies, faces a high tax burden that impacts all enterprises. Small and medium-sized enterprises, which are the backbone of the economy, are frequently disproportionately affected by fiscal constraints.\nGhana's tax landscape is characterized by a myriad of levies, ranging from corporate income taxes to value-added taxes (VAT) on household electricity bills, as well as the Emissions Levy Act of 2023 (Act 1112), which imposes significant taxes on vehicle owners, ranging from GH¢75 for motorcycles and tricycles to GH¢300 for cargo trucks and articulated trucks.\nThis makes it critical for SME managers to design clever strategies to retain competitiveness and long-term growth. Understanding the complexities of the tax system and taking proactive actions are critical for SMEs to not only satisfy their financial commitments but also build resilience and profitability.\nTo thrive in Ghana's high-tax economy, SME managers must take a thorough and strategic strategy. I've discussed practical techniques for SME managers in Ghana to successfully navigate and optimise their operations within the constraints of a high-tax environment.\nComprehensive tax planning\nAdopting a thorough tax planning approach is critical for SMEs operating in high-tax nations like Ghana.\nHigh taxes can have a substantial impact on the cash flow of SMEs. A well-designed tax planning strategy addresses the timing of tax payments, allowing firms to properly manage their cash flow. By properly organising tax payments, SMEs may avoid liquidity issues and retain financial stability.\nA thorough tax planning approach ensures that SMEs stay up to date on these developments and comply with growing tax rules. In today's competitive business climate, effectively managing tax responsibilities can provide SMEs with an advantage.\nBy improving their tax situation, SMEs may provide more competitive pricing, engage in innovation, and attract investors, thus strengthening their entire market position. A proactive tax preparation approach helps SMEs remain viable in the long run.\nTax planning includes maximizing the timing of income and spending, claiming appropriate tax credits, and carefully exploiting deductions.\nWorking with tax specialists or consultants may give significant insights and ensure that the company takes advantage of all chances to reduce tax bills.\nStrategic business structure\nA strategic business structure allows SME managers to establish an organizational framework that decreases tax liabilities. SMEs can legally reduce their overall tax burden by using proper business structures, such as forming tax-efficient companies while preserving critical resources for operational and growth needs.\nA well-planned company structure enhances SMEs' credibility in the eyes of investors and financial institutions. Investors usually prefer companies with robust and strategic structures, making it easier for SMEs to generate capital and get investment for expansion or innovation projects.\nStrategic firm structuring is critical for SMEs planning for the long term. It ensures a smooth transition of ownership and management while also outlining a clear succession plan.\nThis not only ensures the business's longevity but also allows for effective inheritance planning. Different company formations offer varying degrees of operational independence.\nSME managers may adapt more effectively to changing market conditions, industry trends, and economic volatility by carefully adopting a structure that is appropriate for the organization's needs, boosting resilience and sustainability. Various company models may be eligible for certain tax incentives and credits.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.graphic.com.gh/business/business-news/strategies-for-sme-managers-to-survive-in-a-high-tax-environment.html"}
{"doc_id": "3f42ce79fa1f6fd34746462367456cb0", "text": "Zimbabwe’s Minister of Finance Patrick Chinamasa has just unveiled the country’s 2017 National Budget which has outlined some of the proposals for fiscal management in the coming year.\nOne of the proposals presented in the address is the introduction of a 5% levy on all mobile phone airtime and mobile broadband. This is expected to go towards a Health Fund.\nThis becomes the latest form of taxation levied on telecommunications services. In 2014 the government introduced a 5% levy on all airtime purchases for mobile telecoms.\nLocal mobile operators ended up assuming the 5% levy as a way of ensuring that the cost of airtime for the end consumer wouldn’t be affected. However, all operators have since expressed concerns about the impact that the tax had on their already falling revenues.\nIt’s likely that this new health levy will also put a dent on telecoms revenues and put further strain on service providers in both voice and broadband services.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2016/12/another-burden-zimbabwen-telecoms-government-proposes-5-health-fund-levy-airtime-broadband/"}
{"doc_id": "06ed0571e5d245578cd8efc2051c96a2", "text": "JOHANNESBURG - South African shoppers made the most of discounts offered by retailers on Black Friday, with TVs, toilet papers, nappies flying off the shelves.\nBut experts quickly described the discounts as ingenuine.\nBrand and marketing expert, Chris Moerdyk said despite the euphoria, discounts offered in South Africa were not as massive as those in the US where the Black Friday concept originated.\nMoerdyk said prices remained on the high with Cyber Monday - which is directed at online shoppers - not expected to make much of a difference when it starts.\nMoerdyk said, \"Unfortunately, South African consumers are being duped,” Moerdyk said. “Only a few retailers are offering genuine discounts, and most retailers raised prices in October only to bring them down ahead of Black Friday.\"\nBlack Friday began in the US to mark the beginning of the Christmas shopping season.\nLocally, marketers used billboards, radio, television, the internet and print media to promote the fad, leading to thousands flocking the malls for specials.\nOthers opted for online shopping despite the country dipping into a technical recession and fuel price increases.\nDiscount retailer Game went as far as opening its doors at midnight to lure customers while Makro introduced an online drive-thru for its Riversands store in Johannesburg for customers to collect their selected online items.\nMakro also rolled out a new mobile pay-point system to consumers to pay for purchases while standing in queues.\nMost retailers were better prepared to deal with the large volumes of shoppers this year.\nThe focus was on crowd control, parking, and safety after chaos last year.\nEven the SA Reserve Bank’s decision to hike the repo rate by 25-basis points could not dissuade potential bargain hunters.\nThe Black-Friday.Global Analysis Team analysed Black Friday statistics around the world estimated that at least 66 percent of South Africans participated in Black Friday this year.\nThe group said up to 64 percent of consumers shopped both online and offline with the rest either opting for traditional offline-only or online-only.\nIt said clothes, and not electronics, were favourite bargains.\nBankservAfrica, the continent’s largest automated payments clearing house, said last year South Africans spent R2.5 billion on Black Friday. BankservAfrica said it cleared 4.7 million card transactions in 2017 - more than double the national daily average.\nDawie Roodt, chief economist at the Efficient Group said the decision by the central bank’s decision to hike the cost of borrowing to 6.75 percent on Thursday failed to dampen the shopping frenzy.\n“The increase was not much, it will not have a major impact. If you budgeted for Black Friday go ahead and spend your money. However, if you overextend yourself you will be in trouble. South Africa is good on spending not manufacturing and Black Friday is a good example as the Chinese and not the South African economy benefits from Black Friday,”Roodt said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/pretoria-news/business-report/south-african-consumers-duped-on-blackfriday-18266078"}
{"doc_id": "aee044b58d224b7849ebc510fbfab715", "text": "Shortly after Hamas militants took hostages during their deadly assault on southern Israel on October 7, the government of Qatar contacted the White House with a request: Form a small team of advisers to help work to get the captives freed.\nThat work, begun in the days after the hostages were taken, finally bore fruit with the announcement of a prisoner swap deal mediated by Qatar and Egypt and agreed by Israel, Hamas and the United States.\nThe secretive effort included tense personal diplomatic engagement by U.S. President Joe Biden, who held a number of urgent conversations with emir of Qatar and Israeli Prime Minister Benjamin Netanyahu in the weeks leading up to the deal.\nIt also involved hours of painstaking negotiations including Secretary of State Antony Blinken, CIA Director Bill Burns, national security adviser Jake Sullivan and his deputy Jon Finer, and US Middle East envoy Brett McGurk, among others.\nTwo officials involved in the effort provided extensive details of the work that led to an agreement in which 50 hostages are to be freed in exchange for 150 Palestinian prisoners during a four-day pause in fighting.\nShortly after October 7, Qatar - a long-established mediator in a volatile region - approached the White House with sensitive information regarding the hostages and the potential for their release, the officials said. The Qataris asked that a small team, which they called a \"cell,\" be established to work the issue privately with the Israelis.\nSullivan directed McGurk and another National Security Council official, Josh Geltzer, to establish the team. This was done without telling other relevant U.S. agencies because Qatar and Israel demanded extreme secrecy with only a few people to be in the know, the officials said.\nMcGurk, a seasoned diplomat with deep experience in the Middle East, held daily morning calls with the prime minister of Qatar, Mohammed bin Abdulrahman bin Jassim Al Thani. He reported back to Sullivan and Biden was briefed daily on the process.\nBiden got an upfront look at what the victims of the Hamas attack endured when he held an emotional, lengthy meeting on Oct. 13 with the families of Americans who were either being held hostage or were unaccounted for.\nDays later, Biden traveled to Tel Aviv for Oct. 18 talks with Netanyahu. The official said securing the release of hostages was a central focus of his discussions with Netanyahu and his war cabinet, as well as humanitarian assistance.\nFive days later, on Oct. 23, the White House team's work helped yield the release of two American hostages, Natalie and Judith Raanan.\nFrom outside Sullivan’s West Wing office McGurk, Sullivan and Finer tracked in real time the captives' difficult, multi-hour journey out of Gaza.\nThe return of the two Americans proved it was possible to gain freedom for hostages and gave confidence to Biden that Qatar could deliver through the small team that had been established, the officials said.\nNow, an intensified process started to get more hostages out. When this happened, Burns began speaking regularly with Mossad director David Barnea.\nBiden saw an opportunity to gain the release of a large number of hostages and that a deal for prisoners was the only realistic path to securing a pause in the fighting, the officials said.\nOn Oct. 24, with Israel poised to launch a ground offensive in Gaza, the U.S. side got word that Hamas had agreed to the parameters of a deal to release women and children, which would mean a pause and a delay in the ground invasion.\nU.S. officials debated with the Israelis whether or not the ground offensive should be delayed.\nThe Israelis argued that terms were not firm enough to delay, since there was no proof of life for the hostages. Hamas claimed they could not determine who was being held until a pause in fighting began.\nAmericans and Israelis viewed the Hamas position as disingenuous. The official said Israel's invasion plan was adapted to support a pause if a deal came together.\nBiden then engaged over the next three weeks in detailed talks as proposals about a potential hostage release were traded back and forth. Demands were made that Hamas produce the lists of hostages it was holding, their identifying information, and guarantees of release.\nThe process was long and cumbersome - communication was difficult and messages had to be passed from Doha or Cairo into Gaza and back, the officials said.\nBiden held a previously undisclosed phone call with the Qatari prime minister when the phasing of releases began to take shape, the official said.\nUnder the agreement that was taking shape, women and children hostages would be freed in a first phase, together with a commensurate release of Palestinian prisoners from the Israelis.\nThe Israelis insisted Hamas ensure all women and children come out in this phase. The U.S. side agreed, and demanded through Qatar proof of life or identifying information for women and children held by Hamas.\nHamas said it could guarantee 50 in the first phase, but refused to produce a list of identifying criteria. On November 9, Burns met in Doha with the Qatari leader and the Mossad's Barnea to go through the texts of the emerging arrangement.\nThe key obstacle at that point was that Hamas had not clearly identified who it was holding.\nThree days later, Biden called the emir of Qatar, Sheikh Tamim bin Hamad Al Thani, and demanded to know the names or clear identifying information for the 50 hostages including ages, gender and nationalities. Without the information, the official said, there was no basis to move forward.\nShortly after Biden's call, Hamas produced details for the 50 hostages it said would be released in the first phase of any deal.\nBiden in a November 14 call urged Netanyahu to take the deal - Netanyahu agreed.\nMcGurk saw Netanyahu that same day in Israel. Walking out of a meeting, Netanyahu grabbed McGurk’s arm and said “we need this deal” and urged Biden call the emir of Qatar on the final terms, one of the officials said.\nTalks stalled as communications went dark in Gaza.\nWhen they resumed, Biden was in San Francisco attending an Asia-Pacific summit. He called the emir of Qatar and told him this was the last chance, and the emir pledged to apply pressure to close the deal, the officials said.\n\"The president insisted the deal had to close, now. Time was up,\" one official said.\nOn November 18, McGurk met in Doha with the Qatari prime minister. Burns was dialed in after he spoke with Mossad. The meeting identified the last remaining gaps toward a deal.\nThe agreement was now structured for women and children to be freed in the first phase, but with an expectation for future releases and the aim to bring all hostages home to their families.\nIn Cairo the next morning, McGurk met with Egypt intelligence chief Abbas Kamil. Word came from Hamas leaders in Gaza that they had accepted nearly all the agreements worked out the day before in Doha.\nOnly one issue remained, tied to the number of hostages to be released in the first phase and the ultimate structure of the deal to incentivize releases beyond the 50 known women and children, the officials said.\nA flurry of additional contacts ensued, and the deal finally came together.\nReuters", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/news/world/the-secret-negotiations-that-led-to-the-gaza-hostages-deal-4be29079-0369-493a-b13b-47d9d5cd82cd"}
{"doc_id": "10f29fb65951460b1edf1499835c21f2", "text": "South Africans are often guilty of being insular and inward-looking. After talking to Morgan Stanley's Ruchir Sharma, CHRIS GIBBONS believes it can be a very bad - and costly - habit.\nAs cheeses go, Ruchir Sharma is a big one. Based in New York, he’s head of emerging market equities and global macro at Morgan Stanley Investment Management. Sharma has what many would consider a dream job: he spends his life on an airliner, travelling the world, examining those global markets in intimate detail, and deciding where to invest the billions entrusted to him by Morgan Stanley and its clients.\nThis means Sharma cares very deeply about what happens in places like Moscow, Beijing, Bangkok, Jakarta – and Johannesburg. He’s visited each one many times and assembled his observations in a new book, Breakout Nations – In Pursuit of the Next Economic Miracles. He looks at which of the emerging markets have done consistently well over the past 50 years, explains why, and then uses the historical observations as a basis for forecasting whether or not their success – or lack thereof – is likely to continue.\nOn that basis, Sharma makes his investment decisions. A billion here, five billion there. Dollars, that is.\nHe is completely dispassionate. That’s because he has to be: a wrong decision would not only cost the bank a great deal of money and reputation, but would doubtless also see Sharma cast into outer darkness, far away from New York and luxury international hotels. He might even have to fly economy.\nThe bad news is, Sharma is not impressed with South Africa.\nThe chapter on this country in Breakout Nations is bitingly called The Endless Honeymoon, and Sharma’s opinions flow thick and fast: “So much stability and such modest progress…” or “…the new South Africa looks too much like the old South Africa…”\nWhen I spoke to him earlier this week in his Manhattan office, he told me that he has “a strange relationship with South Africa…” When asked which is his favourite country to visit, he always says “South Africa ranks right up there… it has always been very close to my heart.” But the health warning for investors, he cautions, is “that you can’t let your heart rule your head.”\nOn an earlier visit 10 years ago, Sharma was “quite impressed”. Sentiment on Wall Street had been that the country would blow up because of the racial divide and its history in the 1970s and 1980s. “But when I came to South Africa and saw the mood of reconciliation and the peace that existed despite the fears on Wall Street, that was a very positive sign.” It showed him that this was “a very positive economy in the way that it had progressed”.\nIt’s different now, though. “What I’m seeing now is that there has been very little progress beyond that stability. It’s great that you achieved stability after a long period of all sorts of conflict, but now I see a period where economic growth really appears to be disappointing and not much progress is being made. There is a limit to how much you can keep banking on stability to take you forward.”\nIn his book, Sharma goes into more detail about South Africa’s problems. One key observation is that “South Africa has powerful private companies that still steer clear of South Africa.” He’s referring, of course, to the likes of Anglo American, Old Mutual, SABMiller – the long, familiar list of companies that have divested and see their future far away from their Johannesburg or Cape Town roots. Sharma observes acutely that this kind of external, international growth can be interpreted as either a mark of great corporate strength or a vote of no confidence in the home market by those same strong corporates. In our case, he’s in no doubt that it’s the latter.\nSharma is scrupulously polite and when we talk I can hear that he is trying not to give offence. But after reading The Endless Honeymoon chapter of his book, the tone of disappointment in his voice is plain: he thinks we have missed a major opportunity.\nWe need to add to this his bearish view on the commodities cycle – “two decades down, one decade up and we’ve just had the ‘up’ decade.” He calls it “commodity.com” and believes that, like investors at the turn of the century who were burnt when the dot.com bubble burst, those who think commodities will run forever – the so-called “super-cycle” – are also destined to end up with singed fingers. (South Africa is heavily reliant on commodities so don’t say you haven’t been warned.)\nA country of missed opportunities that is over-dependent on commodities? It’s a fair bet that we’re not high on Sharma’s must-invest-there list.\nOkay, so if Sharma is not keen on South Africa, what is his top pick? He says his “Gold Medallists” are South Korea and Taiwan, the only emerging markets to have achieved five consecutive decades of +5% GDP growth. Of the two, he much prefers South Korea’s “rare ability to stay at the cutting edge of fast-changing industries (which) has put it in a class by itself.”\nSharma is at Morgan Stanley. He’ll have counterparts at JP Morgan, Goldman Sachs, Citigroup, HSBC, Barclays, Standard Chartered and… well, you get the picture. They all spend their lives in the sharp end of airliners, jetting about, looking, searching, sniffing, assessing, deciding. A billion here, five billion there. Line them all up and it quickly becomes 10 billion or 50 billion or more. Or not.\nThose are the billions that Transnet and Eskom will be trying to access for their big new build programmes, that government would like to borrow for its financing requirements, hat our larger corporations – those that are still based here – use for their expansion plans. But if Ruchir Sharma and his colleagues decide that South Africa is no longer likely to be a breakout nation, the price of that money increases accordingly.\nWe’ll still get it – don’t worry about that. Governments, unless they are Zimbabwe or North Korea, can almost always raise money, as can government-backed enterprises. It’s just the cost that goes up. It’s no different from your overdraft at the bank, really. If the bank manager likes you and likes your balance sheet, you might get prime. If not, then it will be prime-plus-one or two or more. In both examples, you also know who pays that additional price, don’t you? It’s your overdraft and you’re a taxpayer, so you’ll foot the bill both ways.\nConsider Sharma as a sort of super bank manager then. And in that case, yes, it certainly does matter what he thinks of us and our country. DM\n*Breakout Nations – In Pursuit of the Next Economic Miracles by Ruchir Sharma, published by Allen Lane.\nPhoto: Morgan Stanley’s New York headquarters are seen at the corner of 48th Street and Broadway in New York May 22, 2012. REUTERS/Andrew Burton", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2012-07-11-analysis-south-africa-the-world-is-looking-and-its-not-liking/"}
{"doc_id": "b4bb17ff5651c76ea8e8595bc1364f68", "text": "Cottco targets large-scale farmers\nMartin Kadzere and Patrick Chitumba\nThe Cotton Company of Zimbabwe has started engaging commercial farmers as it seeks to grow production of cotton, managing director Mr Pious Manamike said.\nCurrently, the majority of growers are small-scale, producing an average of a hectare.\nSpeaking during Midlands Provincial Devolution Conference organised by Business Weekly last Friday, Mr Manamike said the project has since started in the Mashonaland West Province and would soon be introduced to other provinces.\n“We are also looking at increasing production not necessarily focusing on communal farmers. We are engaging commercial farmers . . . the A2 farmers to join in and produce cotton. This year, we are registering commercial farmers to produce cotton on a larger scale . . . five to 10 hectares. This project has already started in Mashonaland West and we want to ensure that we also bring it to Midlands,” he said.\nMr Manamike said there was need to increase cotton production in order to attract investment along the value chain.\n“I also want to highlight that because of instability that we have at primary production level, we cannot at the moment attract investment in the value addition stage. So we need to underpin the supply of the raw materials so that we can attract required investment,” said Mr Manamike.\nHe said Midlands province used to produce 150 000 tonnes per year earning the province around US$90 million. Of the 400 000 farmers supported by Cottco, which is administering the Presidential Free Inputs Scheme, half of them are from Midlands.\n“So we are pushing to get where the province and the nation used to be. We are (also) working to introduce cotton in areas around Kwekwe, Mvuma and Mberengwa,” he said.\nMr Manamike said the company had completed field trials for its new hybrid seed. He said the hybrid can yield a minimum of 80 balls per plant, from an average 24 balls.\n“Cottco has completed field trials for hybrid seed from India in collaboration with Quton Seed Company. With all the farmers on this seed, the country could earn over US$2 billion in foreign currency. The company is working on a phased three-year programme to get the bulk of the farmers grow the hybrid seed. This requires considerable investment in new ginneries at community level,” said Mr Manamike.\nThe Cottco MD also highlighted on various opportunities in the cotton value chain from the Midlands Province including increasing ginning capacity, setting up of edible oil and textile factories in areas such as Gokwe, where most of the cotton is grown.\nThe devolution conferences will be held in all the country’s 10 provinces, where various stakeholders including the Government, private sector, churches, academia, and civil society dialogue on the critical matters pertaining the implementation of devolution. The themes of the conferences will be centred around major economic activities or resource endowments in the specific provinces.\nThe Midlands conference was attended by senior Government officials including Local Government, Public Works and National Housing Minister July Moyo, the host Minister of State for Midlands Provincial Affairs Larry Mavhima and his counterpart Minister of State for Mashonaland West Provincial Affairs Mary Mliswa, deputy minister for Mines and Mining Development Polite Kambamura and a senior director in the Ministry of Finance and Economic Development.\nSpeakers were also drawn from the country’s leading business organisations including the Confederation of Zimbabwe Industries, Zimbabwe National Chamber of Commerce, National Business Council of Zimbabwe and the Chamber of Mines.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/cottco-targets-large-scale-farmers/"}
{"doc_id": "ad96291fde604a6e8e151fbffc2022a9", "text": "To curb youth restiveness, oil theft and even unemployment while achieving fuel sufficiency, Chiemelie Ezeobi writes that the Ministry of Petroleum Resources has intensified the drive to encourage modular refineries\nIn some Niger Delta communities, illegal refineries are gold mines. During a recent operation where THISDAY was embedded with naval forces in the Niger Delta, these illegal refineries have pipes running through the backyards of some houses close to the jetties from where they load these products into waiting boats.\nThere were underground pipes connecting crude oil reservoirs suspected to have been siphoned from wellheads along Trans-Forcados by the criminals, who run other pipes to various tanks and dugout pits, such that diesel, kerosene and the waste products go into different channels from their heat ovens through hoses and metal pipes.\nAsides the economic sabotage, the consequences on the environment is hazardous. In those communities, it was miles and miles of deforestation caused by the illegal disposal of distilled crude remnants. Also synonymous with those communities were crude oil on the surface of the rivers, polluting the entire environment.\nAs such, the federal government, had amongst other measures, approved the establishment of modula refineries as a way to checkmate such crude oil theft and its attendant consequences.\nModular Refineries\nA modular refinery generally refers to a simple or complex refinery whose parts are fabricated or constructed in several component parts or units called modules. These modules can then be assembled easily to form the plant. Furthermore, they can be transported in modules across distances and put together at the location desired.\nThis is an advantage over larger refineries. It can also commence production with a small capacity of 5,000BPSD or 10,000BPSD, and grow its capacity over time by adding more modules. A modular refinery may therefore be composed from skid-mounted modules of small capacities, put together to achieve a refinery of even up to 100,000BPSD.\nThis government has been quick to support moves to establish modular refineries as a way to boost the country’s refining capacity.\nAs part of its strategy to reposition the oil & gas industry, President Muhammadu Buhari in 2016 launched a roadmap of short and medium term priorities aimed at developing a stable and enabling the oil and gas landscape with improved transparency, efficiency, stable investment climate and a well-protected environment, tagged “7big wins”.\nThe fourth initiative in the roadmap, “Refineries and Local Production Capacity” seeks to transit Nigeria from being an import dependent nation into a net exporter of refined petroleum products.\nAccording to Sylva, the key objectives of the modular refinery initiative include to promote availability of petroleum products in the country, conserve foreign exchange utilisation for the importation of Petroleum Products, promote socio economic development in order to stop restiveness, criminal and illegal refinery activities thereby sustaining peaceful coexistence in the Niger Delta Region and mitigate or eliminate environmental degradation associated with illegal refinery activities, crude oil theft and pipelines vandalism.\nCurbing Youth Restiveness\nAside crude oil theft, youth restiveness is another challenge beguiling the region. To tackle this, the Minister of Petroleum Resources, Timipre Sylva, who spoke at the ground-breaking ceremony of an Energy Infrastructure Park at Okpoama in Brass Local Government Area of Bayelsa, believes the best strategies are to create jobs and opportunities for youths, adding that part of his mandate is to collaborate with players in the private sector to establish oil and gas facilities, including modular refineries.\nIt is noteworthy that a modular refinery of 2,000 barrels per day is also about to start as part of the aforementioned park. This modular refinery is the fourth under the federal government’s plan to use modular refineries to drive the development of the region.\nMore Investment\nAlready, the Ministry of Petroleum Resources had injected equity capital funds in three modular refineries with the Waltersmith 5000 bpd modular refinery at Ibigwe, Imo already in operation. Others are the 12,000 bpd Hydroskimming modular refinery being constructed by Azikel Petroleum Limited at Obunagha, Gbarain, Bayelsa and the 2,500 bpd modular refinery being developed by Duport Midstream Company as part of its Energy Park in Egbokor, Edo.\nOne of the agencies under the ministry, the Department of Petroleum Resources (DPR), is seeking more investment in modular refineries in the country, warning businessmen who are supporting illegal refining activities to desist and channel their resources to legitimate transactions in the oil and gas industry.\nThe Director of the DPR, Mr. Sarki Auwalu, who spoke in Rivers State, said the agency was not averse to licencing more modular refineries to encourage local in-country refining. The DPR chief stated that rather than going into illegal refining for lack of capacity to do proper refining, private concerns should consider setting up modular refineries. There are 38 proposed modular refineries with capacity ranging from 5,000 barrels per day to 30,000bpd and six conventional plants with a total capacity of 1.35 million bpd.\nSelf- sufficiency\nThe director added that Nigeria was capable of attaining self-sufficiency in gas processing and refining, stressing that the agency was more interested in monies from royalties, as opposed to funds from penalties meted on players in the industry.\n“I urge investors to start small and grow gradually, just like what we have seen today in Niger Delta Petroleum Resources with practically less than one per cent foreign input. Indeed enormous employment and capacity has been harnessed locally.\n“DPR is a business enabler and opportunity provider in the oil and gas sector, and we also ensure that the business is sustained, that’s why we’re calling on Nigerians to come and invest in the oil and gas sector rather than indulge in illegal refineries. Invest with the support of the DPR and you will have no reason to be afraid of business failure,” he said.\nAuwalu said Nigeria has about seven private refineries and 20 processed investors’ licences, saying that if a local production company like the NDPR has the capacity of producing, refining and marketing 11,000 barrels per day of petroleum products, then other willing investors could achieve the same feat.\nPhases\nWhen President Muhammadu Buhari performed the virtual inauguration of the National Oil and Gas Excellence Centre on January 21, 2021, on one of the issues he spoke about was modular refinery. He mentioned the completion of the 5,000 barrels per day Waltersmith Modular Refinery.\nThe refinery is near the Ibigwe marginal field flowstation in Imo State. It is the biggest commissioned modular refinery in Nigeria. The African refinery project is being developed in phases by Waltersmith Refining and Petrochemical Company.\nAccording to reports, the phase one of the refinery started operations in November 2020. The company was granted a license by the DPR to establish the refinery in June 2015 and received the construction approval in March 2017. The final investment decision (FID) on the phase one refinery project was reached in September 2018.\nThe ground-breaking ceremony for the expansion of the refinery to 50,000bpd capacity took place in November 2020. The modular refinery is intended to reduce Nigeria’s import of petroleum products.\nThe Waltersmith modular refinery comprises a crude distillation unit, tank farm, and other related facilities.\nThe modular refinery is expected to deliver 271 million litres of refined petroleum products a year. The crude oil storage capacity of the refinery is approximately 60,000 barrels.\nThe refinery is planned to be expanded in phases to have a 20,000bpd crude oil refining facility and a 25,000bpd standalone condensate refining facility taking the total processing capacity to 50,000bpd.\nThe refinery receives feedstock from the Waltersmith-operated Ibigwe marginal field. The petroleum products produced in the refinery include diesel, naphtha, heavy fuel oil, and kerosene.\nAfrica Finance Corporation agreed to provide debt finance of approximately £26.5m ($35m) for phase one refinery development in July 2018.\nVelem, a joint venture between US-based VFuels and Nigeria-based Lambert Electromec, was awarded an engineering, procurement, and construction (EPC) contract for the initial 5,000bpd modular refinery project in April 2018.\nThere are indications that the project will be a success. Already, President Buhari has instructed the Ministry of Petroleum Resources, DPR and Nigerian National Petroleum Corp. (NNPC) to provide all necessary support in securing oil and condensate feedstock for the second phase.\nThe commissioning of the refinery also received the support of other stakeholders. Imo State Governor Hope Uzodinma and Ministry of State for Petroleum Resources Timipre Sylva cut the tape on the President’s behalf. Also in attendance at the ceremony was NNPC’s head Mele Kyari, Nigerian Content Development & Monitoring Board (NCDMB)’s executive secretary Simbi Wabote and Waltersmith chairman Abdulrazaq Isa. Commercial operations began on November 3, last year. Seplat Petroleum has a working agreement with Waltersmith on processing.\nThe company will build the second phase in two parts. One is a 25,000 bpd standalone condensate refinery. The company aims to complete this by 2023. The second part will be another 20,000 bpd crude processing plant.\nAnother example of Nigeria’s strides in modular refining is the Edo Modular Energy refinery which is set to increase crude oil production from 6,000 barrels per day (bpd) to 60,000 bpd. The project, being developed by two Chinese firms; AIPCC Energy Limited and the Peiyang Chemical Equipment Company Ltd, is expected to commence operations between September and mid-October. The first phase will produce 1,000 bpd, while the second phase will produce 6,000 bpd; with a long-term goal of producing 60,000 bpd.\nPhase one – which is almost complete – will target a production ratio comprising 55 per cent diesel, 38 per cent fuel oil and less than 10 per cent naphtha. If the firm’s projections are anything to go by, some of its products will be exported to boost foreign exchange earnings and by the time it extends operations into different phases, the firm would be able to take care of more than 80 per cent of diesel requirement in Nigeria. The investment is also expected to benefit Edo people through job creation, increased revenue and ease of pressure on other refineries.\nAlthough many argue that profit margins in the oil and gas drilling industry are so low that most modular refineries may not be economically viable as competition from shale oil, excessive supply, generous financial markets and the coronavirus pandemic also have a deleterious effect on the sector’s net profit margins,\nNigeria makes the case for modular refineries easy to argue given that Africa currently has a deficit of 87 million metric tonnes per annum between demand and refining capacity in Africa.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2021/03/02/curbing-youth-restiveness-oil-theft-unemployment-in-niger-delta"}
{"doc_id": "77583b5c786f22a69b191f19e09c7435", "text": "Last week was difficult. Standard Bank was once again publicly accused of currency manipulation, of being opposed to the South African government, and – in some quarters – even of treason.\nStandard Bank has not manipulated the value of the Rand.\nStandard Bank has not engaged in any anti-competitive or criminal conduct. Standard Bank is committed to always behaving with complete integrity.\nHowever, in a strange and painful way, last week was also a very good one for those of us who care about South Africa’s rule of law, democracy, and economic performance. Here’s why.\nUnder our rule of law, the relevant legal and administrative processes are not thrown off course by dramatic statements and viral social media messages. The Competition Appeal Court continues to hear evidence on the alleged Rand fixing case, with one of the judges asking, in relation to Standard Bank ‘What is the point of pursuing this? And, surely there's massive injustice to a bank to be hauled in front of the Tribunal on a cartel case, where in fact there's plausible evidence – more than plausible, incontrovertible evidence, that they're not part of the deal?’\nThe Reserve Bank, too, continues to exercise its mandate. Relatively soon after these allegations were first made, in 2015, the Reserve Bank found ‘no evidence of malpractice or serious misconduct in the South African foreign exchange market… [and that] the foreign exchange market in South Africa is competitive.’ This month, the SARB released a technical paper showing that convergence in Rand markets is ‘in the main, a rational response to public information, indicating central bank credibility.’ and the lack of collusion in being able to manipulate the Rand. These kinds of legal and technical processes don’t make the headlines. But, in the end, they are what counts. In South Africa, rationality will prevail.\nThe week demonstrated the health of our democracy in general – and of our free media and social media in particular. Voices alleging illegal and unpatriotic behavior by the banks were robustly challenged. Nobody was silenced. Nobody will be silenced. As befits our democracy, vigorous debate continues. As an additional benefit, curious South Africans were given a very comprehensive crash course in how foreign exchange markets work. It wasn’t pretty, but we all emerge with our rights reconfirmed, and better informed about these complex markets.\nThis controversy also gives Standard Bank another very welcome chance to explain to our fellow South Africans how we think and what we do.\nThe first thing to emphasise is that Standard Bank never hides behind legal tactics or claims of confidentiality, unless any particular matter is before the courts and is sub judice. When we discovered in 2015 that some employees of our subsidiary in Tanzania had committed crimes, we immediately self-reported this and accepted the fines and sanctions. When we discovered that some employees had opened accounts unethically (but not illegally) in South Africa in 2020, we were transparent while the matter was being investigated and informed all the affected parties. Our track record shows that if we had done anything illegal in the foreign exchange market, we would have admitted and reported it immediately.\nWe’re not playing for time or looking for a deal. When we say that we are innocent of currency manipulation, we mean it. We will not settle. Where we find that our people have engaged in wrongful conduct, we will act swiftly and will work with the relevant authorities. Where we find no evidence of wrongdoing, we will protect and defend our people - our most valuable assets.\nNext, we put a lot of time and resources into promoting more investment and faster growth in South Africa. Standard Bank’s long term performance depends on the success of the economy and on the economic wellbeing of our clients.\nAs several cabinet ministers will be able to confirm, last month alone, we were among the main sponsors and main speakers at two major conferences – SA Tomorrow and the AGOA Forum - devoted to encouraging investment in South Africa. We do this by emphasising South Africa’s fundamental stability, strong rule of law, economic resilience, competitiveness, and improving prospects - thanks in large part to structural reforms that the government is implementing.\nWe’re patriots who would never undermine this country. But we won’t sit back idly either or toe the line. As South Africa – and Africa’s – largest private sector financial institution, we believe we have a right and a duty to comment on economic and financial sector policy. When we see errors, or opportunities to do better, in these areas we call them out. For instance, we will continue to argue vigorously for the reforms needed to improve South Africa’s competitive advantages, to reduce the cost of capital, and so to accelerate growth and job creation. Right now, for instance, faster reforms to the transport sector, far wider use of public-private partnerships across the public sector, and more effective law enforcement are top of our list. Since banks depend on trust and on contracts, a strong rule of law is absolutely vital to us.\nBut we will never comment outside our mandate. And we will never make a statement for, or against, any political party or individual politician. We exist to serve the economic development of South Africa and to help South Africans flourish. All South Africans. We don’t take sides. We stand on the side of sound universal principles that seek to advance the cause of ordinary people, the Constitution and the rule of law.\nWe do everything in our power to support our clients through good times and bad. We are always looking for ways to increase the financial and economic inclusion of our fellow South Africans and Africans. Everything we do emerges from this perspective, and all our activities aim to create sustainable growth and inclusive value.\nFor example, over the first half of this year, we kept R1.8 trillion in deposits safe for our clients, and we paid R45 billion in interest on those deposits to the individuals, corporates and governments who entrusted their savings to us. We managed R1.4 trillion in assets – which is mostly money that people are saving for their pensions or that they are relying on in retirement. Over the first half of the year, we also paid out more than R11 billion to clients in annuities and for death and disability claims.\nAt the end of the first half of 2023, we held a stock of R1.4 trillion in loans. Our aim is that each loan brings people closer to realising their aspirations. For instance, we lent R22 billion to small and medium enterprises across Africa to grow their businesses, and we registered R1.4 billion of affordable housing loans in South Africa, bringing the number of clients we have provided loans to for affordable homes to more than 98 000.\nLast year, we spent R12.5 billion with black-owned suppliers, and paid R6.5 billion in tax to the South African government. Through our membership of the Banking Association and Business Unity South Africa, we are strong supporters of the government-business collaborations on energy, logistics and tackling crime and corruption. Many of our colleagues lend their skills and time to improve the performance of SOEs and other important public entities.\nFinally, as I write this during a weekend of stage 6 loadshedding, I’m pleased to say that Standard Bank has so far funded nearly 4000 MWh of new electricity generation in South Africa – that’s equivalent to four stages of loadshedding once it all comes online. Far from undermining South Africa we are, literally, helping to keep the lights on.\nNo matter what anybody says or thinks about us, that’s not going to change. As proud and committed South Africans, we will always uphold our Constitutional obligation to ensure that our country ‘improves the quality of life of all citizens.’ We will continue to seek out opportunities to work with all stakeholders to fulfil this obligation.\nSim Tshabalala is the CEO of Standard Bank.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/banking-on-the-rule-of-law-sim-tshabalala-be47b5e9-51d3-49ef-a0cb-8538845c47df"}
{"doc_id": "35506d2fcb12eb2ea295d67d850bda18", "text": "Earnings in DRDGold for the half-year period to end December 2023 are expected to spring up by between 5% and 15% after beating inflationary pressures and benefiting from higher gold prices that muzzled the impact of temporary mine delays.\nDRDGold reported in a trading update yesterday that its earnings per share and headline earnings per share for the period under review are likely to amount to between 65.3 cents and 71.5c compared with 62.3c over the same period a year earlier.\nMarket analysts said yesterday that DRDGold’s performance for the half year was “overall positive, with double-digit earnings growth expected despite inflationary” pressures. They added: “Higher gold prices are benefiting DRDGold’s top line, cushioning the impact of temporary mine delays.”\nInterim revenues quickened 12%, or by R319.9 million, to almost R3 billion. There was R234.5m more in revenue from DRDGold’s Ergo mine at R2.1bn mainly due to a 22% increase in the rand gold price received.\nThe higher gold price for the period beat an 8% decrease in gold volumes sold at 1 872kg as a result of decreased throughput tonnage.\nThe decrease has been attributed to “ongoing delays in the regulatory approval for 4L3 and community interference in respect of 5L27, and Ergo having to rely on legacy and clean-up sites” to make up tons.\n“The impact of the decrease in throughput tonnage was offset by a 15% increase in yield to 0.233g/t from 0.203g/t in 2022,” the company said.\nRevenue from its Far West Gold Recoveries Proprietary Limited unit increased by R85.4m to R781.2m. The 22% firming in the rand gold price during the period offset the mine’s 8% decrease in gold sold to 663kg.\nDRDGold has attributed the lower gold sales volumes for the period from the operation to lower head grades from the new Driefontein 3 site than that of the depleted Driefontein 5 site. This resulted in a 12% decrease in yield from 0.245g per ton in 2022 to 0.215g per ton.\nWhile the company overall had an increase in revenue, its impact on earnings and headline earnings was moderated by an increase in group cash operating costs of R257.5m, which are 14% above prior year period at about R2bn.\nAt Ergo, cash operating costs increased by R197.8m, or 12%, to R1.8bn due to double-digit increases in machine hire costs and contract reclamation costs. Increased diesel prices also had a weighing impact.\nAt Far West Gold Recoveries, cash operating costs increased by R59.8 million, or by about 24%, to R305.1m due mainly to increases in reagent usage, especially lime and steel balls. These had been used in response to the increased acidity and coarser material reclaimed from Driefontein.\nElectricity costs also increased as a result of the reclamation of Driefontein 3 and the installation of a high shear agitator at the Driefontein 2 Plant to release more gold. Machine hire costs also crept up because of the continued clean-up of Driefontein 5 and increased diesel prices.\nThis meant that cash expenditure on capital projects increased by a massive 177% to R1bn during the interim period to December. DRDGold established a solar power plant at Ergo which is scheduled for completion next month.\nThe rising input costs, especially energy, were “weighing on cash margins” for the company, analysts said. “The solar plant investment, while weighing on free cash flow now, should boost cost savings and sustainability later,” they added.\nNonetheless, by the end of the period under review, DRDGold had R1.5bn in cash and cash equivalents compared to R2.4bn a year ago. It also operated on a free cash outflow of R370.8m after a R685.7m increase to R1.1bn in investing activities and paying cash dividends of R559.4 million.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/drdgold-expects-earnings-to-beat-inflation-lower-gold-sales-908d5d82-ecc1-40c2-a501-a080c0e99fb7"}
{"doc_id": "076241af0b70c63f57af12a38bb5520f", "text": "After years of what we thought were unfounded conspiracy theories, today the Reserve Bank of Zimbabwe Governor, Dr. Mangudya has confirmed your worst nightmare. Dr. Mangudya has confirmed that a secret group of people is making the black market flourish. And he went on to question the competence of the Financial Intelligence Unit (FIU) and the Central Intelligence Organisation (CIO) in failing to catch these “influential people”. The Governor said;\nThose figures of foreign currency being bought or sold for up to six times its value were computer-generated…The people moving money onto the black market, the people behind the money changers are not your ordinary Zimbabwean…These are influential people with access to huge sums of cash. It has been discovered that one character has been pushing onto the black market as much as $48 million in foreign currency. This person has access to cash and it is difficult to understand how this could have happened without the knowledge of the CIO, the FIU, the police as well as the commercial bank. The meeting called by the President could trigger a nasty fall-out and there is already gnashing of teeth. Some people have a lot of explaining to do and heads will roll…The bank does not participate in parallel market practices…we have been investigating and if you have any information, please bring it to us.\nWhilst I don’t really know what part the CIO has to play in stemming black markets, FIU seem to have been incompetent on this score (that’s if it’s ever competent at all). Since cash burning resurrected a couple of years ago just a measly number of moneychangers have been arrested for illegal money changing activities. Yet in the Central Business District, I see money changers standing at corners with a bunch of monies.\nI need not even talk about the police, the police are ever-present in town chasing vendors, kombies but I have never seen money changers being chased. No wonder people develop some conspiracy theories that elite people are running the black market.\nBeyond the due diligence that banks conduct through their Know-Your-Customer policy, I don’t think banks have any other way of stemming black markets. That’s for FIU and the police. Surely if banks are not practicing due diligence within its scope, the RBZ would notice it under its Bank Supervision function, isn’t it? Unless the RBZ itself is not competent and just playing the blame game.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2018/10/rbz-confirms-influential-people-are-running-black-markets-blames-the-central-intelligence-organisation-police-and-banks-for-this/"}
{"doc_id": "ba74c3c7b5b4743e85755f3fea6b2eda", "text": "Last week National Treasury announced that it was postponing the the implementation of the proposed two-pot pension fund system by a year, following public consultations in September regarding the proposed system. Initiation is now set for 1 March 2025.\nIt makes sense as the final legislation has yet to be issued, and parliamentary approval is still required before the industry will have total certainty of what it all entails. And industry players who Personal Finance spoke with on this very podcast in the past, have said that there was no way they would be ready for implementation by March next year.\nThere is an extensive legislative process which still needs to unfold. The revised Revenue Laws Amendment Bill and amendments to the Pension Funds Act were only issued in June this year and pension fund players are still awaiting a final response document from Treasury before it can further clarify matters raised as part of industry submissions and through the parliamentary process.\nFinal legislation may only be available in early 2024, and much more engagement between industry and the Treasury, the Financial Sector Conduct Authority (FSCA), and the South African Revenue Service (SARS) are still required bodies throughout the process.\nBased on draft legislation, some of the big changes in store for the financial services sector include administration systems, processes, digital solutions and applications, member experience and communication, advice and guidance to trustees and management committees, advice and guidance to members, as well as legal and regulatory matters, including rule amendments, solutions and services.\nWhether organised labour will accept the delayed access to savings in an election year is a story for another day.\nIn the interim, we have Vickie Lange, Head of Best Practice at Alexforbes in studio today, to take us through the other key announcements made during the recent parliamentary briefing.\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/podcasts/listen-the-two-pot-pension-system-was-delayed-by-a-year-but-what-else-changed-275be50e-3098-480c-b325-73cdb7415342"}
{"doc_id": "71b9e493265e922d2361419ba38c4d65", "text": "Silence descended upon the group. The journalists looked at me in bewilderment. Some shook their heads in disbelief. Then one stood up, threw his hands in the air and said: \"Mwalimu, I am a Kalenjin and I swear in the name of God that William Ruto will never become President of Kenya.\"\nI smiled as I watched him walk away. He had uttered the words I had cautioned the group against. It was June 2022. I was training journalists on election reporting. The session focused on probable emergencies in the election cycle. We found ourselves analysing the conduct of a Cabinet Secretary and his PS who had given Ruto a tongue lashing.\nI told the journalists that it was unwise, for anyone to write off a Deputy President because he could easily become the next president.\nIn 2001, the late Dr Julius Gikonyo Kiano engaged me as his official biographer. Then in 2002, Daniel Moi was humiliated at Uhuru Park while handing over power to Mwai Kibaki.\nKiano's book project made me take a keener interest in the history of Kenya's politics. I started talking to elders from different communities. I spoke with men and women who had formed groups of intercessors praying for the country's leadership. I engaged in academic and spiritual analysis of our leadership.\nWhen Ruto was barely three years old, an event that some church leaders describe as demonic in proportion was taking place. The Kiambu mafia mobilised a blood-oathing process that would engulf the country spiritually. The ceremonies were meant to ensure that in the spiritual and physical realms, power remained in the hands of one community and under the watch of one family. For months, men, women and children were assembled in the Ichaweri home of Mzee Jomo Kenyatta for oathing.\n- Community health workers boost counties universal healthcare bid\n- Inside UON's digital health facility\n- Cabinet okays NHIF scrapping if four bills get MPs nod\n- Ruto to launch UHC on Mashujaa Day\nIn his book, Fan into Flame, Rev John Gatu of the Presbyterian Church of East Africa (PCEA), narrates how he and another clergyman Rev Crispus Kiongo, were summoned to Ichaweri in June 1969. When the two reached the Gatundu home of Kenya's first president, they were shocked when they realised the intention of the summons: \"We were expected to take a Gikuyu oath which was administered to \"all Gikuyu of good will\" to solidify the unity of the tribe.\" He writes\nThe oathing ceremonies were orchestrated by Kenyatta's inner circle. The objective was to mobilise Gema communities against Jaramogi Oginga Odinga's Kenya People's Union, ahead of elections planned for later that year. The clergy declined to take the oath. Gatu's life turned into a nightmare. His wife and children were kidnapped by State agents and forced to take the oath. His wife, Rahabbu went into depression and trauma.\nGatu reveals that the mass oathing involved detention of scores of people. They involved extortions, kidnappings and cold-blooded killing of those who resisted or defied the oathing. Those who took the oath were asked to vow that they would never allow the presidency to leave the House of Mumbi. The killing of Thomas Joseph Mboya in July of 1969 instigated more oathing. Mboya was killed at the height of the oathing ceremonies. His death deepened the divisions between the Luo and Kikuyu communities.\nApart from the traumatic beatings, they would be stripped naked, chew some mucky stuff, and forced to pledge loyalty to Mzee Kenyatta, and his government. They also vowed that the presidency would never go beyond River Chania, meaning it would never leave Kiambu. It is intriguing, however, that when Mwai Kibaki was ascending to the presidency, the Chania River issue never came up. Some argue that it probably didn't because being Uhuru's godfather, Kibaki, was simply holding brief for the Kenyatta's. The oath was still binding.\nIt is also curious that after 24 years in power, Moi suddenly told Kenyans that Uhuru Kenyatta, Jomo's son, was his preferred successor. His preference never made much political sense. Symbolically, however, he was returning power to the House of Mumbi.\nDuring the interviews for Kiano's book, Kikuyu elders told me that before flying to London in 1929 to lobby for Kikuyu land rights, he underwent a spiritual cleansing ceremony on top of Mount Kenya.\n\"For 40 days, he stayed atop the mountain where he joined 12 elders in prayer and fasting. Every African community has its own 12 elders chosen by the gods. These are men who have attained the age of no desire. By the time Kenyatta completed the ceremony, he had been transformed into a smooth charismatic orator. The elders asked him to work for the greater good of the country and not personal greed,\" said an elder.\nIt is during my engagement in the project that it clearly emerged that after independence, some wealthy families conspired to rule Kenya 'forever' and had entered into a covenant.\nThe ascendance to the presidency by Ruto stirred in me a historical and spiritual fire that was already burning quietly. During the initial days of the Building Bridges Initiative (BBI) campaigns, some leaders were cheered while others were jeered. There was drama at the launch of the BBI report.\nWith a sense of foreboding, I watched the events unfold at the Bomas of Kenya, which has become our home of Constitution-making. It is here that we spend months on end working on the Kenyan constitution during the wee hours of Mwai Kibaki's presidency. It is at Bomas that vulnerable groups and small communities told their heart-rending tales and shed tears as they sought to be formally incorporated into the Republic of Kenya. It is at Bomas that back-stabbing and betrayal reigned supreme with some high-jacking the constitution-making process. It is at Bomas where constitutional bridges were built and destroyed. The event meant to launch the BBI was being used to set other bridges ablaze. Sadly, this seems to be the story of Kenya.\nHistorical similarities\nThe event, however, reminded me of the sneaky nature of history. In 1976, while Mzee Kenyatta was quietly struggling with ill health, some leaders from his Kikuyu community were plotting to change the Constitution to bar Moi from ascending to power in the event of Mzee's demise. Some of these leaders had taken the 1969 oath. Jomo Kenyatta, a man known to love beer and smoking had a deputy who professed the Christian faith and was a teetotaller. The deputy hailed from the Kalenjin community. When Jomo died in 1978, his Vice President stepped into his shoes.\nThe year 2018 marked the 40th anniversary of Jomo Kenyatta's death. 40 is Biblically a powerful and symbolic number. In terms of time, 40 can represent a period of probation, trial, and chastisement. It can also represent a time for generational change. Was it therefore accidental that on the 40th anniversary of his demise, we removed his image from the Kenyan currency? There are those who believe that symbolically, with the removal of his face, power left the House of Mumbi. The oathing was losing its grip. Meanwhile, Jomo's son was firmly in the seat of power. Uhuru had a deputy who professes the Christian faith, is a teetotaller and hails from the Kalenjin community. William Ruto also happens to have been Moi's political student.\nThree prominent families, the; Kenyatta, Moi and Odinga, have since independence shared economic and political power. Then, in 2007, Ruto the son of a peasant, sneaked into the palace. The BBI wave was the 1976 history replaying itself. Ruto's supporters believe it was meant to stop him from ascending to State House.\nIn Jomo's time, the Change the Constitution movement was spearheaded by the late Kihika Kimani and Njenga Karume. Karume is among the leaders who took the oath.\nIn his unpublished memoir, Cool Under Fire, former Head of Civil Service Geoffrey Kareithi says after failing to change the constitution, the group initiated a plan to kill Moi.\n\"A senior officer from the air force came to see me. He had attended a meeting with where a plan to stop the VP from being sworn in as acting president had been mooted. I told him to continue attending those meetings and keep me briefed. There commenced the Ngoroko affair. The plotters thought it was possible to wipe out all the leaders of Kenya and take over the country through the use of a small band of commandos. We decided to remain alert to their every move,\" Recalls Kareithi\nJomo's ill health\nIt is during Jomo's ill health that he realised only Moi could protect his young family. His tribesmen were only interested in power. Kareithi says that sometime in 1968, President Kenyatta suffered a stroke while in Mombasa and was in a coma for three days.\nThe close shave with death made Kareithi start preparing for the inevitable: \"Not known to many, as we held our breath and the president lay unconscious at his private residence at the Coast in 1968, we had put in contingency measures for his burial and smooth transition.\" It is the same measures they would dust up and implement a decade later when the curtain fell on Jomo.\nWhen Kenyatta died, Kareithi quickly moved to secure Moi's safety, who by virtue of the Constitution was now the acting president. \"Moi was in Nairobi in 55 minutes. He escaped James Mungai's road block at Lanet by 20 minutes. Next, I called GSU commandant Ben Gethi with instructions that he takes responsibility for Moi's security,\" says Kareithi.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/health/politics/article/2001456020/same-script-in-intrigues-that-thrust-ruto-and-moi-into-power"}
{"doc_id": "ad1e3d60061016be0509956a790bc09f", "text": "Standard Bank group chief executive Sim Tshabalala has warned that South Africa’s greylisting by the Paris-based Financial Action Task Force would be worse than a credit rating downgrade and risks the country being kicked out of the global financial system.\nSouth Africa has previously been found wanting in all 11 of the task force’s effectiveness measures to combat money laundering and the financing of terrorism.\nThe central bank has previously warned the classification could have wide-reaching consequences for South Africa’s financial system. Besides causing reputational damage, it could lead to capital and currency outflows, and transactional, administrative and funding costs for banks could increase, it said.\nSpeaking to radio station 702, Tshabalala said being flagged by the task force would effectively lead to South Africa being blacklisted by both the United Kingdom and the European Union, which would kick the country out of the global financial system.\nNot only would this make borrowing more expensive, it will likely also have several knock-on effects, he said.\n“The rand will weaken, inflation will spike, interest rates will go up, it will be more expensive to buy food, pay for petrol, buy homes, buy cars. The country can’t afford it.”\nThese concerns were echoed by Business Leadership South Africa chief executive Busisiwe Mavuso, who warned that South Africa is running out of time to avoid being greylisted.\n“South Africa will find out early next year whether the FATF will place it on a list of countries considered to be performing poorly in the fight against major financial crimes,” she wrote in a News24 column on Friday (15 July).\n“In other words, if we don’t get our act together by improving our ability to proactively pursue and prosecute money laundering and terrorist financing by February 2023, we could find ourselves on the FATF’s grey list – with highly negative consequences.\n“These include enhanced scrutiny in relation to cross-border transactions that would harm imports and exports, reputational damage to our financial system as well as adverse effects on our banks in maintaining correspondent banking relationships with their offshore counterparts. This is the last thing we need right now.”\nThe head of South Africa’s National Treasury said he is “pretty confident” the country will have addressed regulatory weaknesses in its money-laundering controls by year-end.\n“Changing our laws and regulations will be tough, but that’s the easy part,” Ismail Momoniat, the National Treasury’s acting director-general said in an interview at the start of July.\n“The tough part comes in that six of those measures are related to how we investigate such crimes – whether we have enough prosecutions on money laundering, whether we deal with terror financing when people are designated by the United Nations or by other measures – and so in our criminal justice sector, we have to have a significant turnaround in terms of effectiveness.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/606914/a-top-banking-ceo-has-sent-a-stern-warning-to-south-africa/"}
{"doc_id": "b5b284333fe32794b905a1bb0bab1a81", "text": "Saudiproleague\n2 Jul 2023\nHuman trafficking in sports is easily one of the most subdued talking points in the order of social vices in Africa. In this episode, we explore more on this topic and elaborate on how to curb the situation.\n27 Jun 2023\nAyomide SotuboI talks about one of the key mistakes that the Saudis must avoid if their football revolution must prevail on this week's The Nutmeg on Guardian TV.\nDon't get it twisted what is happening in the Saudi Pro League is a massive football revolution and it looks pretty much unassailable on paper when you consider the wild money reserves that can be invested in that league.\nLatest\n5 mins ago\nSince February 24, 2022, Russia's full-scale invasion has had a huge impact on Ukraine, but also the European Union. To tackle inflation and other economic consequences, the EU has taken measures to try to shield its inhabitants from the cost-of-living crisis. We take a closer look.\n5 mins ago\nEurope Now brings you a special programme from Kyiv to mark the second anniversary of full-scale war in Ukraine. The fighting has killed and injured hundreds of thousands of people and left around a fifth of Ukrainian territory under Russian control, but this has not deterred Kyiv from seeking full membership of the European Union. In this first part of the show, we focus on Ukraine's reforms and its cultural heritage.\n1 hour ago\nLina Soualem's latest film looks back at four generations of Palestinian women, with her mother, actress Hiam Abbass, serving as a guide to their family history. \"Bye Bye Tiberias\" charts their displacement from the shores of the Sea of Galilee to the village of Deir Hanna, using home videos and archive footage to place this very personal story within its larger historical context.\n1 hour ago\nNorwegian Prime Minister Jonas Gahr Støre spoke to FRANCE 24 about the war in Ukraine ahead of the second anniversary this week of Russia's full-scale invasion.\n2 hours ago\nLocated one hour from Madrid, the Toledo Training Command centre is one of the largest military training centres in Europe. Hundreds of Ukrainian civilians who have volunteered to head to the front are training there as part of the EU Military Assistance Mission in support of Ukraine (EUMAM), set up in October 2022. Spain is one of the EU's key training providers, having already trained 4,000 Ukrainian soldiers.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/saudiproleague/"}
{"doc_id": "ac219be1676906809ae4147f21809c15", "text": "BGFIBank allegedly played a central role in a years-long scam that allowed former DRC leader Joseph Kabila’s family and close associates to launder $243-million in public and suspect funds\nIt is a short walk from the stately Palais de la Nation, the official residence of the Democratic Republic of Congo’s head of state, to the gleaming, modern Kinshasa headquarters of BGFIBank.\nWe don’t know if Joseph Kabila, during his 18 years as president, ever visited the bank’s offices in person. We do know that the bank was owned and run by several of his closest family members; and that the proximity between the bank and the presidency is far more than just geographic.\nThe Continent can reveal that the bank allegedly played a central role in a years-long scam that allowed Kabila’s family and close associates to launder at least $243-million in public and suspect funds, and make multimillion-dollar cash withdrawals.\nOn one occasion, $6-million was withdrawn – in cash – from an account linked to the Kabila family. To put this in perspective: 60-million Congolese citizens live below the international poverty line of $1.90 per day.\nThese startling figures come from the biggest-ever leak of African bank records: some 3.5-million statements, emails and documents that give an unprecedented insight into the inner workings of BGFIBank, the largest bank in central Africa.\nThe leak was obtained by PPLAAF, the Platform to Protect Whistleblowers in Africa, and the French investigative unit Mediapart, and shared with the European Investigative Collaborations network. The documents were trawled through by a consortium of investigators representing 19 different media houses across 18 countries, including The Continent, as well as five NGOs.\nThis investigation, known as Congo Hold-Up, offers the most convincing evidence yet of widespread corruption during Kabila’s tenure as president, which lasted from 2001 to 2019. It also paints a damning picture of a bank which flouted rules and regulations – both its own and those imposed by national and international authorities – to enable looting on a grand scale.\n“For me, BGFI is a mafia bank,” said Jules Alingete, the head of the inspectorate general of finance, who was appointed last year by Kabila’s successor, President Félix Tshisekedi. “It is unacceptable what happened.”\nThe consortium made repeated and sustained attempts over the past month to obtain comment from senior executives at BGFIBank, including from the holding company’s headquarters in Libreville, and its offices in Kinshasa and Paris. The bank did not respond in any way.\nThe oil company that wasn’t\nIt is another short walk, along Kinshasa’s wide, colonial-era avenues, from the BGFIBank offices to 43 Avenue Tombalbaye, where an office block has been built in the heart of Kinshasa’s upmarket commercial district. The story of this land’s ownership is a case study in how money was siphoned from the Congolese public purse into the hands of Kabila’s inner circle – with the bank playing a central role in allowing it to happen.\nUntil 2013, the land was owned by Philippe de Moerloose, a wealthy Belgian businessman with ties to President Kabila. Then he agreed to sell it to Sud Oil – a shell company with no ties to the oil business, and no evidence of having conducted any commercial activity at all. At the time, Sud Oil did not appear to have any assets orfunds in its account at BGFIBank.\nSud Oil was, however, very well connected to the then-Congolese president. Gloria Mteyu, Kabila’s sister, owned 20% of the company; Aneth Lutale, Kabila’s sister-in-law, owned the rest. Sud Oil agreed to pay $5-million upfront for the building, with another $7-million to be paid in instalments over the next year. Before agreeing to the deal, De Moerloose demanded a bank guarantee for the outstanding amount. Despite the complete lack of security offered by Sud Oil, BGFIBank provided that guarantee.\nIn other words, if Sud Oil failed to pay, the bank itself would be liable for the debt. An unusual commitment, given that Sud Oil had no assets.\nThe man who agreed to these terms was Francis Selemani, who was then the chief executive of BGFIBank’s Congolese operations. Selemani also happens to be President Kabila’s foster brother, and is married to Aneth Lutale – the majority owner of Sud Oil. Kabila’s sister Gloria, who owned the rest of Sud Oil, at the time also owned 40% of BGFIBank in the DRC.\nBut Sud Oil still needed to find the $5-million for the initial payment. Just before it was due, the Banque Centrale du Congo – the DRC’s central bank, the keeper of the country’s treasury – transferred $5.5-million from state coffers into Sud Oil’s account at the BGFIBank. This appears to be a brazen violation of Congolese banking laws, which prevent the central bank from funding private companies. Typically, central banks formulate a country’s monetary policy and provide financial services for the government and commercial banking system.\nSome $5-million was then transferred from the Sud Oil account to De Moerloose’s bank in Switzerland. In the time it took to complete these transfers, the Congolese state became poorer to the tune of $5.5-million, while the Kabila family gained ownership of a luxury multimillion dollar property – with all these transactions facilitated by BGFIBank.\nExtensive attempts were made through various different channels by the consortium to contact the people named in this investigation, including Kabila, Selemani, Mteyu, Lutale, and De Moerloose. Detailed questions were sent to the current and former governors of the Banque Centrale du Congo.\nNo one responded to these requests for comment, with the exception of De Moerloose, who said that he had corresponded with Selemani over the “payment guarantee” granted by BGFI, and that he “at the time demanded a copy of the register of shareholders” from Sud Oil and there was no reference to any member of the Kabila family.\nIn the absence of any other official comment, the documents must speak for themselves. What they show is that this pattern of dubious transactions, riddled with conflicts of interest and apparent violations of both Congolese law and international banking regulations, was repeated again and again.\nA close analysis of the leaked documents conducted by the Congo Hold-Up consortium shows that $51.4-million was wired directly from the central bank into Sud Oil’s account at BGFIBank. A further $42.5-million came in from other state entities. Tens of millions more came from payments linked to the Chinese owners of copper and cobalt mines in the country.\nThe documents also show that at least $80-million was withdrawn in cash from Sud Oil and related accounts between 2013 and 2018, including several multi-million dollar withdrawals. Congolese law limits dollar withdrawals to a maximum of $10 000 per day.\nFamily business\nBGFIBank’s close links with the central African region’s ruling elite have attracted scandal before. The bank began life as the Gabonese branch of the Banque de Paris et des Pays-Bas (better known today as BNP Paribas). It was renamed in 1996 as Banque Gabonaise et Française Internationale – BGFIBank – due to its increasingly close links with the Gabonese state. As of today, at least 10% of the bank’s holding company is owned by companies linked to the family of Gabon’s President Ali Bongo.\nPascaline Bongo, the president’s sister, is on the board of the holding company; and, until last year, so was former finance minister Emile Doumba.\nSure enough, when the Bongo family purchased 12 luxury properties in France between 1996 and 2008, they did so via an account at BGFIBank. These deals are at the heart of a major corruption case in France, with French prosecutors saying that the late President Omar Bongo’s salary cannot account for the vast sums of money that were spent.\nAnd in the neighbouring Republic of Congo, the local subsidiary is run by Jean-Dominique Okemba, the country’s much-feared intelligence chief who also happens to be the nephew of President Denis Sassou Nguesso.\nThe president’s son, Denis Christel Sassou Nguesso, is currently under investigation by authorities in the United States for allegedly using funds embezzled from the state petroleum company to buy two luxury apartments in Florida, three Range Rovers, a Patek Philippe watch worth €110 000, and jewellery to the value of $1.4-million, as well as a number of private plane trips for himself and his entourage. These funds were channelled through shell companies with accounts at BGFIBank, according to a Global Witness investigation.\nOverexposed\nThe world of international finance is supposed to be tightly controlled. There are regulations in place to prevent the flow of suspicious money from one country to another, and banks play a central role in enforcing these regulations.\nWhen high-profile politicians (known in the industry as “politically exposed persons”) are involved, the rules are even stricter. Those rules were poorly enforced at BGFIBank, as even its own audit in 2017 concluded: “The sum of the weaknesses described creates for the bank a very high exposure to operational, litigation, money laundering and reputation risks,” concluded auditors KPMG.\nThat internal audit was triggered by another, much smaller leak of documents, which again suggested widespread corruption by Kabila’s inner circle. The whistleblower on that occasion was Jean-Jacques Lumumba, grand-nephew of Congo’s liberation hero Patrice Lumumba.\nLumumba joined BGFIBank in Kinshasa as the head of the credit department in February 2016. It didn’t take him long to notice that something was badly wrong. When he confronted Selemani – the chief executive and Kabila’s adopted brother – with evidence of suspicious transactions, he claims that Selemani threatened him with a gun (Selemani has not responded to this claim).\n“The bank effectively exists to facilitate corruption, and there have been no consequences,” Lumumba told The Continent. “You know, Patrice Lumumba was the first Congolese to really fight against corruption. He would have been devastated to see his country exposed to so much of it.”\nMeanwhile, the DRC remains one of the poorest countries in the world, with 73% of its population living in extreme poverty. With the help of a friendly bank, Kabila and his family became considerably richer during his 18 years in office. The people that the former president was supposed to be serving did not.\nThis is an edited version of an article that first appeared in The Continent, the award-winning pan-African newspaper, published by Adamela Trust with the Mail & Guardian. Download your free copy here.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/africa/2021-11-24-the-dirty-secrets-of-the-dictators-favourite-bank/"}
{"doc_id": "4f31d3912b85aa61dc2ac80e028a2092", "text": "In a dynamic move to revitalise Kenya’s economic landscape, over 13 counties have embarked on the establishment of County Aggregation and Industrial Parks (CAIPs). Spearheaded by the Ministry of Investment, Trade, and Industry, this collaborative effort aims to propel manufacturing in counties. The signing of the Intergovernmental Partnership Agreement on November 22 between the ministry and Governors marked a milestone in enhancing collaboration between counties and the national government in realising the CAIPs vision.\nThe first CAIP was launched in Nyamira County by President William Ruto in August and similar ones have since been started in other counties. The CAIPs hold immense potential for fostering economic growth, particularly in counties heavily reliant on agriculture.\nOne of their primary benefits lies in the creation of a ready market for farmers. The processing section of the CAIPs is crucial for value addition, opening up opportunities for branding and direct connections to both local and international markets. For example, avocados, bananas, pineapples, and value-added products like processed coffee and tea can find a lucrative market through these industrial hubs.\nThe ripple effect on youth employment is equally noteworthy. As industrial parks flourish, housing, schools, and hospitals become imperative, leading to increased demand for local products and services. This surge in purchasing power, coupled with increased farmers’ earnings, is poised to create a thriving economic ecosystem.\nThe timely completion of CAIPs is paramount to unlocking their economic potential. County governments must prioritise the selection of competent contractors, and ensure adherence to construction schedules and timelines within the stipulated three-year timeframe. The incorporation of green energy such as the use of solar should be considered to mitigate the high cost of operation upon completion.\nCounties should create a conducive regulatory environment such as streamlined licensing processes, and other financial incentives to make investments in CAIPs more appealing.\nCounty governments, working hand in hand with the ministry should proactively create platforms for local and international investors to explore opportunities within these industrial hubs. Dedicated local and international forums and investment conferences can serve as powerful tools to attract potential investors, fostering collaboration that transcends geographical boundaries.\nCounty governments must prioritise comprehensive engagement strategies to ensure that the benefits of the CAIPs are widely distributed by involving farmers, local businesses, and other stakeholders from the planning phase.\nIn conclusion, Kenya’s CAIPs can serve as beacons of economic growth, job creation, and sustainable development, setting the stage for a prosperous future for the nation and its people.\nThe writer is Nyamira Governor. [email protected]", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/health/opinion/article/2001486940/industrial-parks-key-to-spurring-counties-economic-potential"}
{"doc_id": "83d95b89524575cdbe9bb4f75e2d360f", "text": "JOHANNESBURG – International rating agency Fitch on Wednesday left South Africa open to a further downgrade after it reaffirmed the country’s credit rating at one notch below investment grade and maintained its negative outlook.\nFitch said the country’s long-term foreign and local currency debt ratings remained worrisome at BB+, with low growth potential, high and rising government debt, large contingent liabilities and the risk of rising social tensions due to extremely high levels of inequality.\nThe agency said the negative outlook reflected the uncertainty over the government’s ability to stabilise public debt in the medium term. Fitch said contingent liabilities remained a significant rating weakness, with liabilities of non-financial public corporations at 15.9 percent of gross domestic product (GDP) at the end of March.\nWATCH:\nVideo by: Chelsea Lotz, Business Report TV\nIt said additional contingent liabilities related to public financial corporations and independent power producers were less sizeable and less likely to materialise.\n“The biggest risk is Eskom, which at end-March had debt of 9 percent of GDP, and has been granted government support of R138 billion (2.7 percent of 2019 GDP) for FY19/20 to FY21/22,” Fitch said. “Debt relief for Eskom, for example through a transfer of debt to the government, is under discussion, but this is not included in our debt projections, as it is unlikely to materialise in the near term.”\nFitch said Eskom’s turnaround strategy was likely to remain slow and partly stifled by trade union resistance against measures with potential implications for payrolls.\nThe review comes months before Moody’s is due to give its outlook in February. Last month, S&P and Moody’s revised the country’s investment-grade credit rating to negative.\nFitch said the Medium-Term Budget Policy Statement in October confirmed a significant deterioration of the country’s finances and it took only limited adjustment measures.\nSouth Africa’s fiscal framework has weakened substantially since February, with the national debt exceeding R3 trillion and a budget deficit projected at 5.9 percent of GDP.\nFitch said the ratings, however, remained supported by strong macroeconomic institutions, a favourable government debt structure and deep local capital markets.\nThe National Treasury said the government remained committed to the stabilisation and improvement of its fiscal position.\n“The agency acknowledges government’s plans to stabilise its finances in order to achieve a balanced primary budget balance,” the Treasury said.\n“Further, government will continue to work hand-in-hand with unions to manage the growth of the public sector wage bill in order to reduce government’s debt burden.”\nThe Treasury also said that the government was cognisant of the pressures and risks that state owned companies, particularly Eskom, present to the fiscal framework.\n“The government is providing medium-term support to Eskom to secure energy supply and to honour the state’s contractual obligations,” the Treasury said. “National Treasury, in partnership with the Department of Public Enterprises, is instituting a series of measures to bring discipline to the utility’s finances, and to step up the timeline for restructuring.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/watch-fitch-leaves-sa-hanging-over-the-precipice-39433165"}
{"doc_id": "23119dc1f7b0bf11a28eeac9cbec2a56", "text": "President Akufo-Addo has directed the Customs Division of the Ghana Revenue Authority to pull the breaks on the implementation of the reversal of discounts on benchmark values.\nAccording to reports from Accra-based Asaase Radio, the President’s directive is to create more room for broader stakeholder consultations on the subject. The decision is also to enable the concerns of traders to be adequately heard, before a final decision is taken on the matter.\nIndications from Asaase Radio further reveal that the consultations have begun in earnest, with a consensus to be reached by January 17, 2021.\nOn January 2, 2022, the Ghana Revenue Authority (GRA) issued a directive which stated that from January 4, 2022, the Customs Division of the Ghana Revenue Authority will begin the effective implementation of the reversal of discounts on some specified category of goods.\nFollowing this development, scores of aggrieved individuals decried the policy and called on government to rescind the decision accordingly. In this regard, the opposition National Democratic Congress organized a press conference addressed by the party’s National Communication Officer, Sammy Gyamfi, and called on the GRA to reverse its decision.\n“Any policy that seeks to increase import duties and ultimately the prices of goods, will lead to more hardships in the country. The sensible thing for government to do under the circumstances if they are genuinely minded to support AGI and boost local production is to reduce the cost of doing business and the factors of production by stabilizing the Ghana cedi, reducing the tax burden on businesses and by ensuring that businesses have access to cheaper credit, low utility tariffs and subsidized inputs. This is the surest and sustainable way of boosting local production without necessarily increasing the level of hardships in the country.\nIn conclusion, we wish to make the point, that Ghanaians have had enough of the deception and callousness of the Akufo-Addo/Bawumia/NPP government.\nThe NDC holds the view, that this is not the time for more taxes and draconian revenue measures such as the reversal of benchmark value discounts. We share in the view expoused by GUTA that the GRA withdraws the statement announcing this measure which will only go a long way to stifle the already burdened businesses in the country”, Mr. Sammy Gyamfi said.\nIn an apparent reaction to the disagreement with the policy by stakeholders, government has directed its reversal for the concerns of traders to be “sufficiently considered before a decision on implementation and its timing is finally taken”; Asaase Radio reports.\nLatest Stories\n-\nThe Roll Call of Biblical Financial Evangelists\n-\nMahama accuses Bawumia of dubbing NDC’s policy promises\n-\nMahama echoes vision for resilient governance and economic recovery at NDC LAB Policy Dialogue\n-\nGSE’s Abena Amoah not on Bawumia’s economy committee\n-\nNDC’s Policy Dialogue marks milestone in pre-election strategy – Mahama\n-\nEOCO to launch lifestyle audits targeting celebrities and individuals with suspected unexplained wealth\n-\nUpper West Akim MP cuts sod for the construction of Mepom to Esaaso Road\n-\nEngineers urged to embrace preview of their works\n-\nParis 2024Q: Zambia edges Ghana 1-0 for crucial first-leg advantage\n-\nDr. Christian Sewordor Mensah: The Role of Sector Skill Bodies in using ESG and CSR Principles in shaping Sustainable Education and Training\n-\nTyler Perry halts $800 film studio build over AI fears\n-\nAkufo-Addo appoints Ofori-Atta as Senior Presidential Advisor\n-\nMIIF aims to position Ghana as electric vehicle hub in Africa\n-\nAvatar: The Last Airbender receives mixed reviews from critics\n-\nMahama slams Police’s decision to dissociate itself from DCOP Waabu’s comments on election security", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/akufo-addo-directs-gra-to-suspend-reversal-of-discounts-on-benchmark-values-for-broader-consultations/"}
{"doc_id": "4f47d1810acfdc3616c9384db790f2e5", "text": "Nigeria’s top 5 banks; First Bank, UBA, GT Bank, Access Bank, and Zenith Bank suffered a N1.9 trillion debit in CRR sequesters in the second quarter of 2020 (April – June).\nThis is according to information in the financial statements of the banks tracked by Nairalytics the research arm of Nairametrics.\nNigeria’s central bank has since 2019 debited Nigerian banks a chunk of their deposits as part of a mutually inclusive cash reserve requirement (CRR) and Loan to Deposit Ratio policy that is targeted at coercing banks to lend more to the private sector.\nIn total, the CBN now holds a total of N6.57 trillion in CRR debits from the nation’s top 5 banks a whopping 43% higher than the N4.58 trillion held in March and more than double the N3.5 trillion CRR debits as at December 2020.\nAccording to our records, the top 5 banks have a total customer deposit (excluding subsidiary balances) of N18.26 trillion thus CRR debits represent about 35.9% of total customer deposits as of June 2020.\nFirst Bank, Nigeria’s oldest bank suffered N576 billion debit in the second quarter of the year alone. First Bank now has a total CRR debit of N1.6 trillion kept with the CBN.\nUBA, the Nigerian bank with the most African presence suffered a CRR debit of N521.7 billion in the quarter ending June 2020. The bank’s total deposit with the CBN is now N1.5 trillion.\nGT Bank, Nigeria’s largest bank by market capitalization reported a CRR debit of N251.5 billion in the quarter under review representing about 8.4% of its N2.49 trillion customer deposits. The bank now has a total of N881.6 billion in CRR debits held by the CBN.\nAccess Bank reported a CRR debit of N158.6 billion, the lowest of the FUGAZ banks in the quarter under review. A total of N1.1 trillion in the bank’s customer deposits has now been sequestered by the CBN.\nZenith Bank, Nigeria’s largest bank by profits suffered a CRR debit of 472.9 billion in the second quarter of 2020 taking its total CRR haul to N1.4 trillion. About 9.6% of the bank’s customer deposits are held by the CBN.\nUpshots: The central bank is likely to continue with this controversial policy as it continues to mount pressure on banks to lend. In August, Nairametrics reported the CBN debited banks with about N321 billion from commercial banks.\nArticle contributions from Samuel Oyekanmi, John Nwokolo, and Ugo Obi-Chukwu\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/09/06/fugaz-banks-suffer-n1-9-trillion-in-crr-debits-in-q2/"}
{"doc_id": "94158e1f2f4da6410d15394ab905ecb4", "text": "Nigerian economy may not recover as soon as several people expect it to, as some economic and financial analysts have projected that it may take a longer period for it to survive the lull, which was birthed by 2016 recession and worsened by the Coronavirus pandemic.\nThis was disclosed by some experts at the just-concluded third quarter Economic Outlook organised by Nairametrics tagged ‘Projecting Nigeria’s Economic Recovery.’\nAt the webinar, the experts argued that the recession would take a longer time to fizzle out, as it has a less-clearly defined shape. According to them, the recovery will take a U-shape. The panelists were Partner & Chief Economist, PwC Nigeria, Andrew Nevin; Group Executive, Energy & Infrastructure, FirstBank, BashiratOdunewu; Head of Research, Coronation Asset Management, Guy Czartoryski; Chief Commercial Officer, Mixta Africa, RolakeAkinkugbe-Filani, and Senior Vice President & Head of Financial Advisory at Africa Finance Corporation, Fola Fagbule.\nThe V, U, W and, L shapes are the major recession shapes that are used by economists to describe different types of recessions. They are informal shorthand to characterize recessions and their recoveries. The shapes take their names from the approximate shape economic data make in graphs during recessions.\nWhile the V-shaped recession means the economy suffers a sharp but brief period of decline with a clearly defined trough, followed by a strong recovery, a U-shaped recession is longer than the former and has a less-clearly defined trough.\nThe W-shaped recession, which is also known as a double-dip recession, means the economy falls into recession, recovers with a short period of growth, then falls back into recession before finally recovering, giving a “down up down up” pattern.\nAn L-shaped recession or depression occurs when an economy has a severe recession and does not return to trend line growth for many years, if ever.\nNevin projected that there will be a lot of pressure on the economy due to states taking over the responsibilities of their economic destiny and the forced nature of the COVID-19 disaster. To break forth, the PwC boss insisted that a great level of investment, unlocking of idle assets must be considered.\n“I am not trying to be an alarmist but if the country does not take advantage of the period to accept some truth, there will be pressure. So, I will call it a U shape recovery or Rocket shape,” he added.\nFor Odunewu, some factors would hinder the nation’s recovery as desired by the government. Some of them are oil price that hovers around N$40-$45 PB, 90% of the national revenue still comes from the commodity and low compliance of Nigeria to the OPEC cut deal, which forced the nation to reduce oil production for the next few months.\nShe said, “If you look at the combination and the fact that the economy is also opening up now globally and by the end of September, we believe Nigerian economy will be better. I will say it is a U-shape recovery. But the second wave of COVID-19 could be a threat. I hope that never happens but if it does, we may end up in a W shape, which will be worse. If vaccines are available as promised by some nations by the end of October, the recovery may change from U to V shape.”\nAkinkugbe-Filani chose a different part. According to her, the reality is that the nation will run out of the letters of the alphabets of the recovery. Why? It is because she sees the nation as one that lives above its means like seeking to borrow in a way that is not sustainable and seeking an economic construct that may not be sustainable.\nShe said, “I wonder the type of recovery we are looking at when the fundamentals of the economy have not changed. Regardless of the pandemic, we have always been a cyclical economy because of the oil price and the export-driven oil and the lack of value creation.\n“The recovery for me, in order to be sustainable, we have to learn from the past. The overall spending of the nation is about 7% of the GDP. There is still a lack of integration and focus strategy in terms of infrastructure. For recovery from the pandemic, we need to create local demand for our consumption, so that we are not so vulnerable. I will love to see a U-shape recovery but the reality on the ground will lead me to say that the recovery is between U-shape and W-shape.”\nIn his own case, Czartoryski is an optimist. He voted for a U-shape recovery. His reasons: “On the foreign exchange, it is not as bad as it was in 2016. By the beginning of 2017, we had an official rate of N317 and a parallel rate of over N500 but today is not so bad with an interbank rate of about N388 and the parallel rate was N477 last week. That is not even 30% away. The forex distortions are not as large as they were.\n“There is light at the end of the tunnel though with some complications. Foreign Portfolio Investment is massively down due to the oil price and we should not have to rely on the FPI at all. We are also living beyond our means. We need to create domestic savings like looking into the pension funds, money market, and fixed income funds.”\nTo Fagbule, AFC is optimistic about Nigeria’s recovery. “I would love to be on U-shape. Based on fact, Nigeria never came out of the last recession, as it was only at the beginning of recovery, which never held.”\nAccording to the Senior Vice President of AFC, the nation cannot recover without working on her Trade and investment, as it is the only way out from the economic lull. He emphasized that government expenditure is never going to be sufficient to take Nigeria out of the woods and it is time for the West African nation to emulate countries like Gabon, China and India, whose Investments contribute 30%, 40% and 31% to their GDPs when Nigeria only does 14%.\nClick here to watch the 3rd quarter Economic Outlook\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/09/08/why-nigerian-economy-may-not-recover-soon-experts/"}
{"doc_id": "9368bd5234d1742287b420e2e42640b6", "text": "If you were holding out hope for cryptocurrencies to be involved in the RBZ Fintech Sandbox then as the title suggests we have some very bad news for you. According to the document published by the Reserve Bank of Zimbabwe, the following are eligible and non-eligible for the Fintech Sandbox:\nThe exclusion of cryptocurrencies from the sandbox is massive especially when the rest of the world is beginning to take them as a viable asset. We have seen over the months the leaps and bounds that Bitcoin has made. It might have receded of late to trading from at over US$50k to now trading at around US$46K. But that hasn’t deterred the market from seeing its value.\nTraditional financial players like Wall Street and payments services like PayPal, Visa and Mastercard are all legitimising the once-fringe set of digital currencies.\nFor the Reserve Bank not to include cryptos shows that the mood over at the central bank has not change when it comes to digital currencies and assets.\nNigeria moved against cryptos and now they have a black market\nLast month Nigeria’s Central Bank issued a directive that called a cease and desist to all financial institutions from dealing with cryptocurrency companies and exchanges. This move was to stop the adoption of cryptocurrencies like Bitcoin after the Nigerian authorities made it difficult for the #EndSars protests to receive funding through traditional channels and currencies. The directive has had the unfortunate consequence of a now thriving cryptocurrency black market taking hold in Nigeria.\nSouth Africa seems to have the right idea (as usual)\nThe Financial Sector Conduct Authority (FSCA) in South Africa early last month issued a warning that there were going to be more regulations for cryptocurrencies coming. This followed a slew of complaints about the number of crypto scams that had been praying on those who were entering and not familiar with cryptocurrencies.\n“The high risks already inherent in crypto assets is further being compounded by scam activity, as well as unregulated firms targeting consumers with marketing material that highlights the rewards, but not the potential downside, of investing in crypto assets\nFSCA via Business Tech\nSouth Africa is looking to put more regulations to protect it’s citizens from the number of schemes out there that are praying on the uninitiated. The RBZ Fintech Sandbox could have, if it allowed cryptocurrencies and exchanges in, put those regulations from the ground up.\nWithout the RBZ’s further proliferating the laws that govern cryptos (as well as education on cryptos) this could see a number of scams take hold in Zimbabwe (if they haven’t already). And with the Fintech Sandbox already underway (scheduled commencement date 1/03/2021), I can’t see any wiggle room to convince the authorities otherwise.\nYou can read the rest of the Fintech Sandbox requirements for application and the program’s outline with the link below:", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2021/03/cryptocurrencies-are-not-eligible-for-rbz-fintech-sandbox/?amp=1"}
{"doc_id": "4c510ef377ae83c2a9382c4607aab13c", "text": "The Ghana cedi registered a record weekly decline in trading in the interbank market after sovereign debt downgrade by rating agency, Fitch.\nAnalysts say the local unit posted heavy losses on the interbank market as unrelenting foreign exchange demand continued to weigh down the cedi against the dollar.\nThe Bank of Ghana allotted $25 million against total bids of $109.25 million during last week's forex forward auction. The resultant bid-to-cover ratio of 4.37x vs 4.31x in the previous auction highlights the demand-supply disparity as demand for foreign exchange increases.\nThe cedi on the interbank market, lost 13.12% week-on-week against the US dollar (-35.01% year-to-date).\nOn the retail foreign exchange market, it was relatively stable, losing 0.49% week-on-week with a bid/offer quote of ¢10.10/10.45, extending its year-to-date depreciation to about 36.84%.\nLast week, Fitxh downgraded Ghana's sovereign Issuer Default Rating from 'CCC' to 'CC', citing an increased probability of debt restructuring, high debt service, constrained financing, and continued foreign exchange reserve pressure, among others.\nThis, coupled with a US Fed hike by 75 basis points, has dampened foreign investor sentiment as investors seek safe-haven US dollar.\nDatabank Research said “we expect FX inflow from the $1.3 billion syndicated loan to supplement FX supply, although market sentiments continue to be dulled with talks of debt restructuring yet to be confirmed by the government”.\nLatest Stories\n-\nCultivate the spirit of discipline – Asenso-Boakye urges Bantama Islamic SHS students\n-\nWe must fish out employers who sack pregnant employees – Francis Sosu\n-\nUniversal Music buys majority stake in Don Jazzy’s Mavin\n-\nFIFA Series international friendlies pilot project to commence in March 2024\n-\nTrigmatic reveals he’s been divorced for 3 years\n-\nNEDCo announces revenue mobilisation drive\n-\nKwaw Kese mulls $1m damages against the State for 2015 marijuana arrest and conviction\n-\nFamily seeks justice for Ghanaian immigrant shot dead by unknown assailant in Toronto\n-\nPleasures Magazine Announces Name Change to ‘The Affluenz’ as Part of its Rebranding Efforts\n-\nHow Dotmount Communications revolutionizes world Public Relations (PR) with rapid global publicity\n-\nWhy should NCA, National Security lead closure of radio stations? – MFWA quizzes\n-\nJoy FM to open Ghana Month with re-enactment of Nkrumah’s Independence speech\n-\nAn egg-size banku is not all that one can eat\n-\nInternational community has become meaner; build the economy – Pianim tells government\n-\nNDC accuses NPP forebears of derailing Nkrumah’s industrialisation vision", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/cedi-registers-unprecedented-weekly-decline-in-trading-as-dollar-demand-surges/"}
{"doc_id": "59e6d9b991e6fff61f5da226c781ef40", "text": "Asia’s political spectrum ranges from the brutal despotism of North Korea to the enlightened constitutional monarchy of Bhutan (so enlightened that it developed Gross National Happiness as an alternative measure to Gross Domestic Product), with many shades in between. But the old charge that Asia is ill-suited for Western-style democracy is being leveled again. Are the skeptics right?\nIn South and East Asia, democracies outnumber dictatorships by 17 to six. But democracies are facing turbulent times. Thailand’s political impasse, amid massive anti-democracy demonstrations, has hit world headlines, and elections have also been violently contested in Bangladesh. There have been widespread human-rights abuses in Sri Lanka. Cambodians have suffered a brutal political clampdown. And political life in the world’s largest democracy, India, is raucous and unruly.\nNonetheless, the notion of democratic exclusivity is both wrong and historically short-sighted. Although almost all Western countries are currently democracies, this has only been the case since the 1990’s. Just a half-century earlier, one could count the number of Western democracies on one’s fingers. And even these were imperfect: using the most basic democratic yardstick – universal suffrage – the United States could not be seen as truly democratic until the civil-rights victories of the 1960’s.\nAlthough Britain was a beacon of democracy in the twentieth century, it did not extend this principle to an empire that held sway over more people and territory than any previous world power. It suppressed independence movements in India and across the Middle East and Africa (though many of these movements’ members willingly fought for Britain during both World Wars).\nSimilarly, the Dutch did not extend their democracy to Indonesia. Nor did France support free and fair elections in Indochina or in its Middle Eastern and African colonies. The Belgians were particularly brutal in Congo. The Spanish and Portuguese ravaged Latin America. And the Germans were not much better in Southwest Africa. Indeed, two of history’s most terrifying ideologies, fascism and communism, were devised and embraced in continental Europe.\nThe fact that the word “democracy” derives from ancient Greek, and that one can discern the kernel of democratic thought in Greek philosophy, by no means implies that democracy is embedded in the West’s political DNA. Only after centuries of absolutist rule, extremism, war, revolution, and oppression can the West as a whole reasonably claim to be free, democratic, peaceful, and prosperous – and even now there are exceptions. It is also debatable whether this so-called Western democracy was a cause or a consequence of peace and prosperity.\nThe West was not always the world’s most politically advanced region. When Jesuit missionaries came to China in the seventeenth century, they enthused about how much Europeans could learn from the country’s enlightened political philosophy, Confucianism. The enlightenment philosophers Voltaire and Kant did just that.\nConfucian concepts such as the “mandate of heaven” seemed infinitely more just than that of Europe’s “divine right of kings.” The Nobel laureate economist Amartya Sen traces the origins of Indian democratic dialogue to the third-century BC Buddhist Emperor Ashoka. He also contrasts the religious tolerance preached and practiced by the Muslim Emperor Akbar in the 1590’s with the Inquisition, which was hounding heretics in Europe at around the same time.\nOur assumptions about the relative prosperity of Asia and the West should also be reconsidered. As recently as 200 years ago, Asia accounted for 60% of global GDP. However, following the industrial revolution in northwestern Europe, the colonization of much of Asia, and the Opium Wars in China, their relative positions switched. By the 1950’s, Asia’s share of global GDP had fallen to less than 20%.\nIn his 1968 work Asian Drama: An Inquiry into the Poverty of Nations, Swedish economist and Nobel laureate Gunnar Myrdal considered the words “Asian” and “poor” to be synonymous. But, over the past three decades, Asian prosperity appears to be within reach once more.\nIt is of course impossible to say how Asia might have developed had Western imperial powers stayed away. There is no reason to suppose that the region could not have found its own path to peace, prosperity, and democracy. Socially and economically, Asia now stands roughly where Europe was at the start of the twentieth century; and one can only hope that its democratic journey will be shorter and less violent.\nCrucially, that path has already been taken by South Korea. Despite 35 years of brutal Japanese colonization, three years of civil war, military dictatorship, and a lack of natural resources, the country has emerged from extreme poverty to become – in a volatile neighborhood – a stable, prosperous, and vibrant democracy. Its neighbors could surely follow in its footsteps.\nDemocracy is not a Western product; nor is it for Western citizens alone. Asia has enough historical experience to suggest that even its six remaining dictatorships could, in time, embrace a fairer system of government – and the peace and prosperity that come with it.\nBy: Jean-Pierre Lehmann", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/asias-democratic-drama/"}
{"doc_id": "45b9485a11d4cd69d01c16316f55e8ac", "text": "Sixty per cent of Agenda 111 projects are almost completed, according to Government spokesperson, Palgrave Boakye-Danquah.\nSpeaking on JoyNews’ AM Show, on Tuesday, Boakye-Danquah said although the initiative was not a campaign promise by President Akufo-Addo ahead of the 2016 election, it was necessitated by the havoc Covid-19 brought.\nThe Agenda 111 project includes 101 district hospitals, six regional hospitals in the newly created regions, two specialised hospitals in the middle and northern belts, as well as a regional hospital in the Western Region and renovation of the Effia-Nkwanta Regional Hospital.\nThe intervention, according to Boakye-Danquah, is a pragmatic solution to the deficiencies plaguing the country’s health sector.\n“The President did not speak about Agenda 111 in the 2016 election, you will recall. But as a result of the fact that we didn’t predict that the world was going to face such a major pandemic, the president saw the deficiency in the health infrastructure and decided that he was going to build 111 hospitals.\n“And I can tell you today that 60 per cent of them are close to completion,” he revealed on Tuesday.\nPresident Akufo-Addo announced the Agenda 111 project in April, 2020 and performed the ground-breaking ceremony on Tuesday, August 17, 2021 at the Atwima Kwanwoma District of the Ashanti Region.\nThe objective was to increase quality health care delivery at the district level and to accelerate access to healthcare services for every citizen.\nEach unit was projected to cost US$17 million and all the hospitals were expected to be completed within 12 months.\nHowever, for over two years, none of the promised hospitals have been completed.\nLatest Stories\n-\nThe Roll Call of Biblical Financial Evangelists\n-\nMahama accuses Bawumia of dubbing NDC’s policy promises\n-\nMahama echoes vision for resilient governance and economic recovery at NDC LAB Policy Dialogue\n-\nGSE’s Abena Amoah not on Bawumia’s economy committee\n-\nNDC’s Policy Dialogue marks milestone in pre-election strategy – Mahama\n-\nEOCO to launch lifestyle audits targeting celebrities and individuals with suspected unexplained wealth\n-\nUpper West Akim MP cuts sod for the construction of Mepom to Esaaso Road\n-\nEngineers urged to embrace preview of their works\n-\nParis 2024Q: Zambia edges Ghana 1-0 for crucial first-leg advantage\n-\nDr. Christian Sewordor Mensah: The Role of Sector Skill Bodies in using ESG and CSR Principles in shaping Sustainable Education and Training\n-\nTyler Perry halts $800 film studio build over AI fears\n-\nAkufo-Addo appoints Ofori-Atta as Senior Presidential Advisor\n-\nMIIF aims to position Ghana as electric vehicle hub in Africa\n-\nAvatar: The Last Airbender receives mixed reviews from critics\n-\nMahama slams Police’s decision to dissociate itself from DCOP Waabu’s comments on election security", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/60-of-agenda-111-projects-almost-complete-government-spokesperson/"}
{"doc_id": "5848a7a88991cc03ac209d2cff05c12b", "text": "Strathmore University has partnered with a technology firm to offer training on cybersecurity as the number of attacks and need for skilled individuals increases.\nStrathmore’s iLabAfrica centre, which spearheads Research and Innovation, is the first academic institution in Kenya to join the Security Academy Program, part of Fortinet’s Network Security Expert (NSE) Training Institute.\nThe rising number of attacks and sophistication of cybercriminals has created a skills gap in Kenya which the two institutions are leveraging on.\n“In this hyper-connected world, numerous security attacks are leading organisations to increase their demand for cybersecurity professionals,” said Richard Otolo, @iLabAfrica IT Security Centre manager.\n“The courses that Fortinet and Strathmore will offer will help develop the cybersecurity skills needed to overcome the security challenges we face as a region.”\nImran Chaudhrey, country manager, East Africa at Fortinet, said the current challenge facing firms is lack of cybersecurity skills. “We are committed to address the cybersecurity skills shortage, which is a major challenge facing organisations in Kenya today,” said Mr Imran.\n“By partnering with Strathmore University, we prepare students for a career in network security through the Security Academy Program, providing industry-recognised Fortinet training and certifications.”\nThrough the Security Academy Program, participating academies can leverage on cybersecurity curriculum to equip their students with the knowledge and skills needed for their career. Students who go on to pass their Network Security Expert Certification exam are recognised in the industry among security professionals who are skilled in Fortinet’s network security products and solutions.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/strathmore-training-to-boost-fight-on-hacking-2297166"}
{"doc_id": "031938b9a3810de4d51738b00f541fc3", "text": "Commercial banks have set in motion plans to set up a mobile money transfer platform, taking the battle for the fast-growing transaction revenues to the doorsteps of telecoms operator Safaricom’s M-pesa.\nThe Kenya Bankers Association (KBA) yesterday unveiled Integrated Payments Service Limited (IPSL) — the company that will facilitate direct transfer of money between banks without going through M-Pesa.\nKBA chief executive Officer Habil Olaka described the platform’s launch as a key step towards creating an inter-operable mobile money transfer platform for all banks.\n“The switch is exploiting a gap that has existed in the bank-to-bank payment system. It enables a P2P (person to person) funds transfer in real time where a customer in a bank can ‘push’ funds to the bank account of another in a different bank in real time,” Mr Olaka said.\nKBA has been registered as the owner of IPSL on behalf of all 43 banks and will remain the key driver of the Kenya Interbank Transaction Switch that will facilitate money transfer from bank to bank.\nFounded under the Central Bank of Kenya’s (CBK) National Payment System (NPS) guidelines, IPSL is expected to interconnect all banks, cutting the transaction costs to customers while keeping the revenue earned among the banks.\nThe switch company will be in charge of receiving any new bank/branch registrations, monitor connectivity between banks and the switch as well as act as an arbiter in case of any disputes.\nThe company will also be in charge of registering users for P2P service (account-based transactions), setting up online interface configuration parameters (IP address, port) for customer connection with banks as well as providing routing switch for P2P transactions (authorisation process).\nThe switch will also maintain the look-up table, provide guidance for processing fees and set up SMS and e-mail notification template preparation for alerts.\nMr Olaka said the firm will inform policy direction and manage risks associated with electronic payment systems in the market, while providing technical and related guidance to KBA member banks.\nIPSL is also expected to drive financial inclusion efforts by opening diversified commercial banking delivery channels, including mobile and Internet-based platforms as Kenya gears to become a cash-lite economy in line with the global digitisation trends.\nThe launch of the joint switch plan has been suspended twice — the last timeline having elapsed last month.\nRare show of unity\nCommercial banks hatched a plan to established a mobile phone-based direct money transfer system more than three years ago in the heat of financial pressure from growing mobile money service providers, who have been eating into their transaction fees revenue.\nIn a rare show of unity, the local lenders resolved to set up their own money transfer switch that will enable any mobile phone owner to send and receive money without relying on any mobile money service owned by the telecoms operators.\nThe recipient of money transferred through the new platform will receive a code from the sender and use the code to make payments to another person’s bank account or withdraw the cash from the banking agents.\nA key plank of the commercial banks’ plan is to open the cash by code service even to customers with no bank accounts. Users will be able to bypass mobile money accounts such as M-Pesa or Airtel Money and deliver the text directly to individual mobile phone numbers. Both the sender and the receiver will get a code.\nThe recipient will get an SMS with a numeric code, reading, for example, “You have received money. Kindly go to any bank agent, ATM or branch to withdraw using this 873921. Request the Sender for the additional 3-digit code.”\nThe sender will on the other hand receive a three-digit code which they will forward to the receiver for use to withdraw the money from a bank branch, bank agent or ATM. The code can also be used at a merchant location to pay for goods and services.\nKBA believes the new service will cut e-money transaction fees, relieving customers of the financial burden.\n“The plan should yield lower transaction fees. Currently it costs Sh55 to move Sh2,700 through Safaricom’s M-Pesa,” KBA said, adding that it aims to fix its transactions fees at Sh20 for a similar amount.\nThe price per transaction based on the business case is estimated at Sh2.50. This will gradually decline at an annual average of 10 per cent and by year six to Sh1. The SMS will cost Sh2.\nCBK data show that Sh2.312 trillion was transacted through mobile phones in the 10 months to October 2015 and the figure is expected to rise with increased mobile money subscriptions and the entry of Equity Bank in the mobile money market.\nThe establishment of a company to run the new money transfer platform adds yet another feather to Kenya’s financial innovation cap after M-Pesa.\nLast year, Safaricom corporate affairs director Stephen Chege reckoned that the bankers’ plan would not shake the telcoms operator’s M-Pesa service, describing Kenya’s payment market as “nascent and still growing”.\n“This is an expected development as it is provided for in the National Payments Systems Act and the Regulations thereunder.\nSafaricom believes that there is room for more innovative solutions in the payments space,” Mr Chege said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/Banks-launch-firm-to-take-on-M-Pesa-s-mobile-cash-dominance/539552-3227358-fed4wtz/index.html"}
{"doc_id": "6679ca9c7e586e1aa8d77124603cfca0", "text": "Finance Minister, Ken Ofori-Atta, has challenged all Ghanaians not to lose sight of the greatest strength of being Ghanaian despite the challenges facing the country.\nHe is therefore asking all of us to play a constructive role in getting the nation fully back on track.\nPresenting the 2023 Budget and Economic Policy, Mr. Ofori-Atta said the country has real prospects and will rise again despite the challenges.\n“The challenges we face are daunting but we must not lose sight of the greatest strength of being Ghanaian: resilience, entrepreneurial zeal, faith, courage, solidarity and hope. I, therefore, ask all of us to play a constructive role in getting our nation fully back on track”.\n“Ours is a country with real prospects and the challenges notwithstanding, Ghana will rise again, and my faith is premised on the fact that a lot has already been achieved, especially over the course of the Fourth Republic and our policy, as outlined in this budget to reset the economy, if supported will ensure that, indeed, we have not wasted the current global crisis”, he explained.\nHe assured that the economy will bounce back stronger and the progress and prosperity of the people even more assured.\nLatest Stories\n-\n9 awkward but completely normal things that happen during sex\n-\nSexy gift ideas for her any time of the year\n-\n4 fun & simple ways to upgrade your date night\n-\nOnion Sellers Association allays fears of price hikes\n-\nBanking sector clean-up served as a shock absorber during Covid-19, economic crisis – John Awuah\n-\nNorth Tongu Assembly members fail to elect PM after 4th attempt; DCE fumes\n-\nDigital industry players must shape digital landscape in Africa – Minister\n-\nAssociation of Sports Betting Operators presents learning materials to 939 pupils in flood-affected communities\n-\nMan, 30, dies in alleged attempt to steal ECG cables\n-\nAklakpanu bridge will be reconstructed to boost economic growth – North Tongu DCE assures\n-\nAwutu Senya West Assembly members reject President’s nominee\n-\nConsider the use of local rice for school feeding – Rice farmers\n-\nKyei-Mensa-Bonsu to address resignation issues today\n-\nCyber-attack hits Malawi’s immigration service\n-\nKenya scraps entry fee for South Africans and several other foreign nationals", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/challenges-daunting-but-we-will-overcome-finance-minister/"}
{"doc_id": "5720a20b0a82febe0020cbf618efdccf", "text": "Vodacom’s long-running legal battle with the man behind the ‘Please Call Me’ idea took a turn yesterday after The Supreme Court of Appeal (SCA) in South Africa dismissed an appeal made by the telecommunications giant and ruled in favour of Nkosana Makate.\n“This Court found that the aforementioned must be considered in the context of the duration of the agreement between Makate and the applicant,” the SCA said.\n“This Court emphasised that it would have been an eminently un-businesslike and an unreasonable decision by the CEO not to have extended the contract it made with Makate. As such, this Court determined that the valuation was flawed and inequitable,” the SCA further stated.\nInitially, Vodacom offered Makate a payout of R47 million, however, his legal team rejected this offer.\nAfter various court battles, the case ended up at the SCA and yesterday, it ordered that Vodacom, must use the models Makate’s team submitted to calculate the monies owed.\nWith this model, Makate’s legal team calculated that based on a 5% share of an estimated R205 billion in revenue over 18 years equates to R20 billion in compensation.\nThis is double what Vodacom invests in its South African network every year in the form of capital expenditure.\nVodacom on Thursday released a statement on the JSE news service, SENS.\nThe company said, “Vodacom notes the judgment of the SCA which was handed down on 6 February 2024. The judgment of the Supreme Court dismissed Vodacom's appeal. Vodacom is surprised and disappointed with the judgment and will bring an application for leave to appeal before the Constitutional Court of South Africa (\"Constitutional Court\"), within the prescribed period.”\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/sca-orders-vodacom-to-payout-almost-r20-billion-to-please-call-me-creator-a7a8c6a6-5b8d-4cea-bf00-dee80ddc242e"}
{"doc_id": "2586d4c1347a51f6cc612cb8e7306ed7", "text": "South African companies listed on the JSE have performed exceptionally well over the past few years, with the 25 largest companies now worth over R10 trillion, combined.\nLooking at how these companies have placed since 2013, it is clear that there has not been much movement in terms of which companies make up the top 25, with the likes of British American Tobacco, BHP Billiton, Richemont and Naspers retaining their titles as SA’s biggest companies.\nReflecting the slowing global demand for commodities over the period, a number of mining and resource companies have fallen out of the top 25 – such as Exxaro, Anglo Platinum and Impala Platinum – giving way for newer entries, such as Steinhoff, Discovery and Tiger Brands.\nWhile big mining groups such as Anglo American have made massive gains over the past year or so – with the group’s share price jumping 200% in 2016 alone – market capitalisation reveals the extent of the sector’s decline.\nAnglo Platinum’s market capitalisation was at R337 billion in 2013, and has clawed its way back to a level of R248 billion in 2017.\nOther companies have shown extraordinary growth – most notably Naspers, which saw its market cap breach through R1 trillion in 2016, though it is now just under that level at R954 billion. In 2013, its market cap was just R360 billion – growth of 165%.\nThe biggest loser in the current top 25 is mobile group MTN, which suffered a huge knock in the past 12 months in the form of a massive fine in Nigeria that wiped nearly half the value of the company.\nWhile MTN has since recovered from the knock, it has still lost 36% of its market value since 2013, pushing it from being the 5th largest listed company on the JSE, to the 11th largest, out of the top 10.\nThe top 25 JSE listed companies by market cap carry a combined value of just under R10.4 trillion – this is 40% higher than the combined value of R7.4 trillion in 2013.\nThe biggest difference, and contributor to this change is the local listing of global beverages group, AB InBev, which replaced SABMiller on the local bourse when the latter group was acquired.\n25 biggest companies on the JSE\nMarket cap from Bloomberg, taken 15 March 2017", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/164635/the-biggest-companies-in-south-africa-by-market-cap/"}
{"doc_id": "1468c9d936b03f32fbc4e5740880bc13", "text": "Over the next ten years, the prices of food and commodities are expected to remain low across the world, at least on the average, as agricultural output is projected to increase, absorbing any increase in future demands that may even be driven by population growths.\nThis was a major finding contained in an annual report, the ‘Agricultural Outlook 2019-2028’, a collaborative effort of the Organisation for Economic Co-operation and Development (OECD) and Food and Agriculture Organization of the United Nations (FAO), prepared with input from the experts of their member governments and from specialist commodity organisations.\nThe report noted that several years of strong supplies have reduced the international prices of most agricultural commodities, with cereal, beef and sheep meat prices showing short-term rebounds. For nearly all commodities covered in the Outlook, real prices are projected to remain at or below current levels over the coming decade, as productivity improvements continue to outpace demand growth.\nGlobal demand for agricultural products is projected to grow by 15 percent over the coming decade, while agricultural productivity growth is expected to increase slightly faster, causing inflation-adjusted prices of the major agricultural commodities to remain at or below their current levels.\n“Global agriculture has evolved into a highly diverse sector, with operations ranging from small subsistence farms to large multinational holdings,” José Graziano da Silva, FAO Director-General and Angel Gurría, OECD Secretary-General wrote in the Foreword of the report. Along with providing food, they added, today’s farmers “are important custodians of the natural environment and have become producers of renewable energy.”\nThey also noted that; in order to meet the high expectations society places on agriculture, public and private decision makers require reliable information on the likely trends of global demand, supply, trade and prices and the factors driving them.\nThe Outlook projects that yield improvements and higher production intensity, driven by technological innovation, will result in higher output even as global agricultural land use remains broadly constant. Direct greenhouse gas emissions from agriculture, meanwhile, are expected to grow by some 0.5 percent annually over the coming decade, below the 0.7 percent rate of the past 10 years and below the projected output growth rate – indicating declining carbon intensity.\nAt the same time, new uncertainties are emerging on top of the usual risks facing agriculture. These include disruptions from trade tensions, the spread of crop and animal diseases, growing resistance to antimicrobial substances, regulatory responses to new plant-breeding techniques, and increasingly extreme climatic events. Uncertainties also include evolving dietary preferences in light of health and sustainability issues and policy responses to alarming worldwide trends in obesity.\nWorldwide, the use of cereals for food is projected to grow by about 150 million tonnes over the outlook period – amounting to a 13 percent increase – with rice and wheat accounting for the bulk of the expansion. The most significant factor behind the projected growth in food use of staple products is population growth, which is expected to rise fastest in Sub-Saharan Africa and South Asia.\n“The Outlook makes abundantly clear that trade is critical for global food security,” said Ken Ash, OECD Director for Trade and Agriculture. “Regions that are experiencing rapid population growth are not necessarily those where food production can be increased sustainably, so it is essential that all governments support open, transparent and predictable agro-food markets.”\nCALEB OJEWALE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/agriculture/article/global-food-commodity-prices-to-remain-low-as-agricultural-output-increases/"}
{"doc_id": "ffc8e3213344530465db4ae243179ce2", "text": "By Martin Hesse\nWhen one weighs up his giving with the one hand and taking with the other, it’s difficult to assess whether South Africans will benefit overall from tax changes announced by Finance Minister Enoch Godongwana in his Budget Speech last week. However, at least he didn't seek to increase the tax burden on financially-stressed South Africans for the 2022/23 tax year.\nOn the relief side, the personal income tax brackets, medical tax credits, rebates and tax thresholds will be adjusted by an “inflation-related” 4.5%. There will be no increase in the fuel levy, as many analysts predicted. However, sin taxes – excise duties on alcohol and tobacco products – will increase by between 5.5% and 6.5%, a more substantial hike. There are also no inflation-linked increases to such things as annual contributions to tax-free savings accounts and exemptions on interest income.\nThe adjustments to the tax brackets are 4.5%, based on Treasury's inflation projections of 4.8% this year, dropping to 4.4% next year. But are these projections realistic, considering the steep rise in global inflation over the past few months and the January year-on-year Consumer Price Index inflation figure coming in at 5.7%?\nHannes van den Berg, chief executive at Consult by Momentum, believes that when everything is taken into consideration, the relief may be less than one thinks. “Citizens in general perceive inflation to be much higher than the basket used to measure inflation, and although the government did announce relief in the personal tax scales, I think there is a certain amount of ‘creep’ in there where the full extent of inflation is not going through to consumers. So although the amount going back to consumers is in the billions (see below), it doesn’t fully match real inflation given a forward-looking view. Coupled with that are the lack of inflation-linked adjustments to, say, the maximum deductible retirement fund contributions of R350 000 a year or to the exemptions on interest. Those things, if you take everything into consideration, will result in an overall benefit much lower than the inflation rate,” he says.\nVan den Berg also notes that tax concessions for working from home were not really addressed in the Budget. “That’s an added expense that people are incurring,” he says.\nIncome tax\nIn the past, the government has on occasion allowed for a certain amount of bracket creep (also known as “fiscal drag”) by not adjusting the tax brackets. This is advantageous to the government. In this scenario if your salary increases by the inflation rate but the tax brackets remain the same, you end up paying a slightly higher percentage of your salary to the taxman.\nSo by increasing the brackets by the inflation rate, the percentage of your salary going to the taxman ‒ if it also increases by the inflation rate ‒ will be roughly the same. If you did not receive a salary increase this year ‒ which applies to many employees owing to the adverse economic climate ‒d your income tax will decrease slightly.\nIn fact, in its 2022 Budget Review document, which accompanied the Minister’s Budget presentation, the government estimates that adjusting the tax brackets will cost it about R13.5 billion in revenue, which translates into money in your pocket.\nLet's take an example:\nYou are a salaried employee who earned R240 000 in taxable income in the 2021/22 tax year. On that amount, you paid tax of R45 104, less the primary rebate of R15 714 = R29 390 (12.25% of your income).\nIf your salary stays the same, for the 2022/23 tax year you will pay R44 320, less the primary rebate of R16 425 = R27 895 (11.62% of your income).\nIf your salary increases by 4.5% in line with the government's projected inflation rate, you will earn R250 800. On this amount you will pay R47 128, less the primary rebate of R16 425 = R30 703 (12.24% of your income).\nWhat is not changing\nNo mention was made, in Minister Godongwana’s Budget Speech or the accompanying Budget Review document of any changes to the following taxes or exemptions, which will remain at their present levels:\n- Interest income exemptions: These remain at R23 800 a year for individuals under 65 years of age and at R34 500 a year for individuals of 65 and older.\n- Capital gains tax: The inclusion rate (the percentage of the gain taxed as income) remains at 40% for individuals, with a R40 000 annual exclusion.\n- Dividend withholding tax: This remains at 20% on dividends from South African companies (withheld by the company concerned, not the responsibility of the shareholder).\n- Donations tax: This remains at 20% on amounts over R100 000, taxed in the hands of the donor, except when the donations are to a spouse or to an approved public benefit organisation. Amounts over R30 million are taxed at 25%.\n- Tax-free savings accounts: The annual contribution limit remains R36 000 and the lifetime limit R500 000.\n- Estate duty: The rate remains at 20% on the first R30 million and 25% on amounts over that. The first R3.5 million is not taxed, and for the second-dying spouse the threshold is R7 million less any exemption used by the first-dying spouse.\n- Retirement fund contributions: The limit for deductible contributions to retirement funds remains at 27.5% of the greater of remuneration or taxable income, to a maximum of R350 000 a year.\n- Tax on trusts: for trusts other than special trusts, the flat rate of 45% of income remains.\n- Transfer duty on property: Rates remain the same according to the SARS\n- Tax on retirement fund lump-sum withdrawals: Rates remain the same for pre-retirement withdrawals and for withdrawals at retirement, according to the SARS\nSocial grants\nNo mention was made in the Budget about a mooted Basic Income Grant for South Africans. Carmen Nel, economist and macro strategist at Matrix Fund Managers, says: “The Budget does not allow for a Basic Income Grant, as the finance minister rightly notes that a structural increase in spending would require a structural increase in revenues, which would mean a personal income tax or VAT rate hike. This would be a notable risk to spending in the medium term, given socio-economic and political pressures.”\nHowever, the Budget has provisioned R44 billion in 2022/23 to continue the special Covid-19 social relief of distress grant (R350 per beneficiary per month) for another 12 months.\nThe existing social grants will all be increased by 5% except for the foster care grant (1.9% increase) and the child support grant (4.3% increase).\nHannes van den Berg, chief executive at Consult by Momentum, says that while tackling inequality is necessary, it will become increasingly challenging considering that South Africa already spends 3.3% of its GDP on social expenditure. “Social grants are going to 46% of South African citizens! The ruling party is creating a dependency on social grants among their voters – as opposed to creating meaningful employment opportunities,” Van den Berg says.\nTargeting the wealthy\nThe Budget re-emphasised the government's intention to ensure that wealthy South Africans pay Caesar what is due to Caesar. To this end, provisional taxpayers with assets over R50 million will be required to declare specified assets and liabilities at market values in their 2023 tax returns.\nIn a Cliffe Dekker Hofmeyr presentation on the Budget on Wednesday, Emil Brincker, director and head of the firm’s tax and exchange control practice, pointed out that there was already a heavy tax burden on upper-middle-class and wealthy citizens.\nBrincker said that, as a portion of total revenue, personal income tax is increasing each year, from 37.2% in 2016/17 to 39.1% this year. “When you look at who is actually paying the taxes, 20% of taxpayers ‒ those with an annual income of over R500 000 ‒ contribute over 70% of personal income tax.”\nBrincker said that SARS were expecting to collect more from high-net-worth (HNW) individuals, “but I am not sure that will be the case”. He said many of these individuals were emigrating, with SARS ‒ and the country ‒ losing out as a result.\nPension fund reform\nThe Budget speech touched on the government's proposed “two-pot” system for retirement savings, saying more work needed to be done.\nMichelle Acton, key account manager at Old Mutual Corporate Consultants, says the fact that the Minister has given the green light to the restructuring of the retirement system for individuals to allow for greater preservation and partial access to funds via the two-pot system is welcome.\n“More detail is required in terms of understanding the parameters that would allow for early access. This will need to be provided in the draft legislation that will be published for comment towards the middle of the year,” she says.\nActon says more information on how National Treasury plans to tax contributions is also critical to reform. “Our current retirement fund tax dispensation is a significant incentive to encourage retirement savings, so we do not believe that this should be amended due to the proposed two-pot system.”\nA change welcomed by the investment industry was the “harmonisation” of offshore investment limits across investment products.\nAndrew Davison, head of advice at Old Mutual Corporate Consultants, says: “One of the unexpected but welcome changes in the Budget was the announcement that the offshore limit for all insurance, retirement and savings funds will be harmonised at 45%, inclusive of the 10% African allowance. This implies that the current Regulation 28 offshore limit of 30% will increase to 35% with a further 10% in Africa outside South Africa. This will provide greater flexibility for retirement funds to access a wider set of opportunities for growth as well as diversification.\n“The Minister also provided an update on the changes to Regulation 28 to enable greater investment in infrastructure by retirement funds with this expected to be gazetted into law by March.”\nImplications for investors\nCasey Delport, investment analyst at Anchor Capital, says that, overall, the Budget was largely neutral but somewhat positive for bonds and the rand. “Investors will likely be pleased with deficits that are moderately smaller over the medium term than the consensus economist forecasts had expected, though they may still be concerned about downside risks to growth and the inevitable end to the current strong commodity cycle and what that will mean for tax revenues going forward.\n“Furthermore, investors will be encouraged by the government’s continued rhetoric around its commitment to fiscal consolidation, wage bill curbs, disciplined support for state-owned enterprises, and permanent increases in social grants if accompanied by a sustainable funding plan.”\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/my-money/budget-2022-genuine-tax-relief-or-smoke-and-mirrors-b4bc78f3-38b5-4477-b9b0-ebdbce2485a2"}
{"doc_id": "bd9f58c18647cdd0529fc85e2e116320", "text": "The Portfolio Committees on Co-operative Governance and Traditional Affairs, Water and Sanitation, and Agriculture, held a meeting in Parliament on Wednesday to discuss progress thus far in avoiding failure of the Western Cape’s water supply system following a devastating drought. Officials spoke bracingly. You should still be very concerned. By MARELISE VAN DER MERWE.\nMinister of Water and Sanitation Nomvula Mokonyane on Wednesday joined the chorus of officials vowing not to let the Cape run dry during its one-in-a-thousand-year drought event.\nAt the same time, however, she was at pains to remind the Western Cape that it is not the only province in the country experiencing a water shortage.\nMokonyane – affectionately referred to as “hashtag Noma-action” – was addressing a joint sitting of three committees of Parliament. “The city of Cape Town, like any other province, has been affected by the drought,” she said. “Of importance here is the fact that whilst we will primarily be dealing with the Western Cape, we need to appreciate that we are where we are in the Western Cape because of the national drought.”\nLimpopo was battling severe drought and boreholes were drying up in northern regions of the country, for example in Zeerust, she added. Nationally, there had also been a devastating impact on the agricultural sector.\nAsked whether – given the national severity of the problem – the drought would be declared a national disaster, however, the minister said that was up to Co-operative Governance and Traditional Affairs (Cogta). Cogta, for its part, said it would not be possible to declare the drought a national disaster as there were several very strict and specific processes that would need to be followed in order to do so.\nDA Shadow Minister for Water and Sanitation, Leon Basson, who had asked the question, argued that the express purpose of declaring a national disaster would be to release funds immediately and therefore to cut through unnecessary red tape. DA Shadow Minister of Agriculture, Forestry and Fisheries, Annette Steyn, pointed out that R380-million budgeted for disaster relief had not been spent on the drought.\n“That money is sitting in your budget, Minister,” she said. “Councillor [Xanthea] Limberg is waiting for that money.”\nThe Portfolio Committee on Water and Sanitation, for its part, threw the ball back in citizens’ court, saying the Western Cape’s water usage was “still relatively high” at an average daily use of around 600 megalitres per day, “not showing any progress towards their stated goal of no more than 500ML”.\nNonetheless, they reminded the sitting they had signed a seven-point declaration with the Premier, provincial ministers and mayors at the Water Indaba in June, pledging to enhance water conservation efforts, reduce water leakages, recognise the need to manage groundwater wisely, diversify water supply, protect the quality and integrity of water resources, drive legislative overhaul where needed, and drive water innovation.\nThis water-sport version of Parliamentary pass-the-parcel may be of concern to readers who are still coming to terms with water shedding, throttling and midday cut-offs. Not to mention recent news that the City of Cape Town will only be able to augment water supply by approximately half the amount it predicted previously.\nThe Western Cape has been declared a disaster area since May. Mokonyane said officials in the Department of Water and Sanitation were sitting on the national disaster management forum and one of the advisers on strategic and emergency projects, Trevor Balzer, had been seconded to the Western Cape to work alongside Cape Town Executive Mayor Patricia de Lille.\n“We are quite excited that we will now find a space to collaborate at provincial level,” she said brightly, crediting De Lille and MEC for Local Government, Environmental Affairs and Development Planning Anton Bredell. “Speaking openly… even though they come from different parties, what has brought us together is the issue of water. We must appreciate that.”\nMokonyane will probably have ample time for joyful teamwork ahead of her, as chances of the water shortage abating any time soon are slim. Balzer presented a grim forecast. At the best of times, he said, South Africa is characterised by low and variable rainfall, and water security is one of the biggest challenges facing the country in the 21st century.\n“Water scarcity could get rapidly worse as our supply contracts and demand escalates due to growth, urbanisation, unsustainable use, degradation of wetlands, water losses and a decrease in rainfall due to climate change,” he said.\nBelzer said the most recent Seasonal Climate Watch outlook by the South African Weather Service, issued at the end of September, was “not very optimistic”.\nCurrent indications gave a high likelihood for a weak La Niña to develop during the early and mid-summer months, meaning summer rainfall areas could expect above-normal rainfall. The late spring period, however, would receive below-normal rainfall. Warmer temperatures could be expected across the country during late spring. “Although above-normal rainfall is predicted over the south-western parts of the country, it is not expected to be significant and the current drought conditions are expected to deteriorate further during the summer months,” he said.\n“There is still no predicted relief from the drought for the Western Cape as the winter rainfall season has drawn to an end.”\nRainfall was its lowest in 95 years and during the height of the drought water reservoir levels were their lowest in a decade, he added. It was likely that reservoirs would take several seasons to recover.\nAs at 16 October, of 215 dams monitored weekly, 32 dams were below 40% and 13 dams had fallen to below 10%.\nThe Portfolio Committee on Water and Sanitation gave an update on short- and long-term drought interventions and strategies in the Western Cape. They, too, reminded the sitting that the Western Cape was not alone in facing a drought. The Northern and Eastern Cape provinces were being closely monitored.\nAs a result of additional local authorities declaring states of local disaster following the declaration of provincial disaster, the National Disaster Management Centre conducted a drought assessment from 18-20 October, they said. Ensuring support for these municipalities would follow the impact assessment.\nFurther, they said a reprioritisation process had been facilitated to address the effects of drought, and significant contributions had been made by both civil society and the private sector to respond to needs of communities. The Department of Co-operative Governance provided technical support and monitored projects to be implemented in the affected municipalities.\n“Accordingly, drought is treated as an emergency due to its far-reaching socio-economic impact to the lives of the people and the environment,” the committee said in its written statement.\nOther concrete measures included the drilling and equipping of boreholes, borehole repairs, the implementation of water restriction systems, awareness campaigns, and the facilitation of disaster funding through National Treasury by the Department of Co-operative Governance.\nLong-term interventions would include water harvesting in urban and rural areas, including static tanks; preservation, rehabilitation and protection of ecological infrastructure such as wetlands and estuaries; eradication of illegal water use, and de-silting of dams and canals. Other strategies would be the building of dams, water buffering through land management, and the review of non-potable water usage, such as grey water systems. DM\nPhoto: A general view of the critically low Theewaterskloof Dam in Villiersdorp, South Africa, 25 January 2017. Theewaterskloof Dam is the single biggest dam supplying water to the metropole of Cape Town. Photo: EPA/NIC BOTHMA", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2017-10-25-water-water-nowhere-update-on-the-western-capes-drought-interventions/"}
{"doc_id": "56ad2d1b71e69d05492b93a467425b49", "text": "3 days ago\nBritain's Prince William, whose wife Catherine is recovering from surgery and father King Charles III is undergoing cancer treatment, on Tuesday pulled out of attending a memorial service, citing a \"personal matter\".\n13 Jan\nBritain has been faced with addressing issues around legal migration as it runs concurrently with the controversial efforts in tackling illegal migration amid diplomatic complexities.\n13 Dec\nThe United States and Britain on Wednesday announced a fresh round of sanctions on Hamas over its deadly October 7 attack on Israel. The measure \"targets key officials who perpetuate Hamas's violent agenda by representing the group's interests abroad and managing its finances,\" the US Treasury Department said. The United States has been ratcheting up…\n23 Nov\nA total of 141,000 Nigerians migrated to the United Kingdom (UK) between June 2022 and the year ending June 2023, latest figures published by the UK authorities showed.\n23 Nov\nBritish Prime Minister, Rishi Sunak, is under pressure to adopt more radical measures to slash immigration after the Office for Budget Responsibility (OBR) said his conservative policies would not reduce migrant flows to pre-pandemic levels before 2027.\n20 Oct\nBritain's Conservative Party lost two parliamentary seats to Labour on Friday, another ominous setback for Prime Minister Rishi Sunak and his ruling party ahead of a general election expected next year.\n12 Oct\nBritain said Thursday that it was \"temporarily\" removing the families of staff at its embassy and consulate in Israel from the country amid ongoing unrest.\n12 Oct\nBritain's King Charles III faced calls Wednesday to apologise for colonial-era atrocities in Kenya when he visits the country later this month.\n18 Sep\nCharles III finally makes it across the Channel from Britain to France this week, six months after rioting and strikes forced the last-minute postponement of his first state visit as king.\n6 Sep\nBritain is to ban Russian mercenary outfit the Wagner Group as a terrorist organisation, Defence Secretary Grant Shapps confirmed Wednesday.\n31 Aug 2023\nBritain's Defence Secretary Ben Wallace, who last month announced he would step down in the next UK government cabinet reshuffle, has resigned, the prime minister's office said Thursday.\n21 Jul 2023\nA Cypriot court convicted a retired British miner of manslaughter Friday, instead of the more serious charge of premeditated murder, after he killed his wife to relieve her suffering from blood cancer.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/britain/"}
{"doc_id": "e9d47eb9728dcf875f1846911491d687", "text": "With a single runway, London Gatwick Airport served 32.8 million passengers in the fiscal year ending December 31, 2022.\nThe passenger numbers at Gatwick Airport increased by over 420 percent from 6.3 million in 2021.\nOn the other hand, the Nnamdi Azikiwe Airport recorded slightly over five million passengers last year, comprising 2,530,372 arrivals and 2,499,471 departures.\nThis was an increase of 8.6 per cent when compared to the previous year.\nIn the short-haul market, the Gatwick Airport’s recovery was slightly higher at 92 percent of flights flown pre-pandemic and serving 156 destinations in 2022.\nWith the world’s most efficient single runway, Gatwick Airport has achieved 55 aircraft movements an hour.\nAbuja airport serves less than 20 states in Nigeria and achieves less than 10 aircraft movements in an hour.\nDespite the wide disparity in aircraft movements and passenger traffic between both airports, Gatwick Airport efficiently manages and maintains a single runway, while Abuja Airport is at the verge of constructing a second runway.\nStakeholders argue that Abuja Airport has not been used to optimal capacity to require a second runway and there are alternate airports such as Kaduna and Kano to use when there are incidents that require Abuja Airport to be temporarily shut down.\nThey also argue that if Abuja Airport has\nequipment to evacuate aircraft during incidents and accidents and follow the maintenance manual of the airport as Gatwick Airport does, there won’t be a need to divert flights during incidents and accidents nor think of constructing a second runway.\nAs a result of these concerns, the fresh approval of N3.4 billion as consultancy fee for the second runway of Abuja Airport has been met with criticism.\nOlumide Ohunayo, an aviation analyst, told BusinessDay that people are using the incidents and accidents at the runway of Abuja Airport, leading to its closure, to justify a second runway.\nRead also: IMF approves $3 billion bailout for Ghana to revive economy\nAccording to Ohunayo, Gatwick Airport operates for 24 hours and the runway is always being maintained.\nHe said it is just the efficiency for people to do their jobs and understand the assignments given to them.\nHe said: “If the single runway in Abuja is being maintained, it can take care of Abuja Airport for the next five years. We have not used the runway to its optimal capacity before we begin to run into a second runway. What we are seeing now is an opportunity to cash out on a last-minute contract.\n“A single runway is the best for Abuja Airport right now. What we need is to get equipment to evacuate aircraft during incidents and accidents and follow the maintenance manual of the airport. You don’t have to close an airport to maintain its runway. You can do this in midnight and early hours of the morning when flight traffic is low.”\nHe also said there are alternate airports that can be used during repairs, describing the amount approved for the contract as scandalous.\nThe second runway was initially estimated to gulp N67b billion but it was last year revised to N92 billion.\nFrom 2017 to 2022, a total sum of N65 billion has been allocated to the project in the annual budget though it was unclear if releases were made.\nIn the 2017 budget, N10 billion was voted for the project and in 2018, N8 billion was proposed while N13 billion was voted for the project in 2019 and N14 billion in 2021.\nLast year, the Federal Capital Territory allocated land for the construction of the second runway.\nJohn Ojikutu, security expert and former military commandant at the Murtala Muhammed International Airport, argued that Abuja Airport does not need a second runway.\nOjikutu said: “Gatwick Airport now processes 32.8 million passengers annually and so is Johannesburg in South Africa with 22 million passengers annually but the over 30 airports in Nigeria have less than 20 million passengers in a year.\n“None of our airports has the traffic to have a need for a second runway. I said this much to the Uzodinma’s Committee on Aviation that neither Abuja nor Lagos has the traffic to be considered for a second runway.\n“There is no economic sense in building a second runway. Our problem is prodigal spending and the lack of or the neglect of the periodic maintenance of the necessary airport safety system and infrastructure which the runways are the most critical part of,” he added.\nSindy Foster, principal managing partner at Avaero Capital Partners, said Abuja Airport does not need a second runway based on the level of flights’ arrivals and departures.\nFoster also argued that the runway now needs one due to poor processes and policies which has led to inefficiency.\nShe said: “You could really argue all steps should be taken to improve efficiency before any decision is taken to add a new runway. We will end up with two inefficient runways; so will they just add a third?\n“Proper runway management strategies should be utilised to maximise the overall efficiency for arrival and departure operations. Proper coordination of runway usage, traffic management and improving operational performance are key.”\nAccording to her, Gatwick Airport has capacity planning, and slot management, airport configuration management, and runway scheduling, among others, which all help improve runway performance.\nShe said managing an airport with multiple runways in complex conditions requires additional expertise and attentiveness to avoid catastrophic accidents.\n“If Nigeria is struggling to manage single runway airports, is it ready for more complications?”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/aviation/article/gatwick-airport-lessons-for-nigeria-on-single-runway/"}
{"doc_id": "d85112c637e4de04399ad6c26567f945", "text": "Sierra Leone has cut its 2014 economic growth forecast to 7 or 8 percent as an Ebola outbreak cripples business in the iron ore-exporting West African country, the government said on Wednesday.\nThe economic outlooks for Guinea and Liberia, two other mining-dependent West African countries also fighting Ebola, were lowered by Standard Chartered Bank.\nSierra Leone, Guinea and Liberia are among the poorest countries in the region and the hardest-hit by the worst Ebola epidemic on record, which has killed nearly 2,300 people.\nSierra Leone Finance Minister Kaifala Marah told Reuters that a previous target of 11.5 percent economic growth this year was “unachievable in the face of the Ebola outbreak”.\n“Revenue is dropping many of the big businesses are folding up,” he said, estimating that the government had lost $60 million in revenue in the last three months as activity in the mining and tourism sectors dried up.\nThe end of Sierra Leone’s war just over a decade ago led to large scale investment from mining companies like African Minerals and London Mining, spurring rapid economic growth even if development lagged.\nPeace and pristine beaches brought nearly 60,000 visitors last year through the country’s nascent tourist industry.\nBut in the face of the deadly disease, miners have reduced activity, airline flights have been suspended and the government’s weak health system is struggling to contain a disease that has killed 509 people so far in the country.\nIn a Sept. 8 report, Standard Chartered slashed its forecast for Sierra Leone’s economic growth this year to 7 percent from a forecast of 12 percent.\n“Iron-ore production, which accounted for more than two-thirds of Sierra Leone’s 20 percent real GDP growth in 2013, is expected to take a significant hit in 2014,” Standard Chartered said.\nCases in this Ebola outbreak were first confirmed in Guinea in March. The disease has since spread to Liberia and Sierra Leone, and cases have also been reported in Nigeria and Senegal.\nBut the impact of the disease and restrictions imposed to fight it are being felt across the region.\nStandard Chartered said Liberia’s economy was expected to grow at 4 percent, missing a 5.9 percent target, largely due to mining companies suspending operations and delaying investment.\nIt said Ebola would add to political uncertainty and power cuts in Guinea, where economic growth was likely to slip to 2.5 percent from a forecast 4.5 percent.\n“As these countries are mining-dependent, growth revisions come on the back of expected production shortfalls,” Standard Chartered said.\n“Disruptions to agricultural value chains are also considerations. The consequent price pressures could accelerate inflation into double digits by year-end,” Standard Chartered said.\nThe World Health Organisation has warned that Ebola may infect up to 20,000 people in West Africa.\nThe Bill & Melinda Gates Foundation said on Wednesday that it would spend $50 million to support emergency efforts to help contain the epidemic.\nReuters", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/africa/article/economic-growth-forecasts-cut-for-ebola-hit-west-african-nations/"}
{"doc_id": "310f547d6057a409b69ec77b0f0d424a", "text": "Let me take you back into time today, far back into time - to AD 536. If you are a scholar of history or science, you may have heard of the Latin term annus horribilis, literally meaning: \"horrible year!\"\nFrom the research done by scientists, it is said that AD 536 was the coldest year in the last 2300 years, which made the winter season a survival season for most cultures. Contemporary scholars also tell us that it is not only the fact that it was a really cold winter that made it a bad year but the climate changed all of a sudden.\nSome scholars have noted that they saw heavy snow in China during the peak period of summer. Besides the Chinese culture not being used to very cold weather, the main problem was that most crops were killed due to the harsh climate, therefore creating a famine. This did not only happen in China but in many other parts of the world where snow never fell. Some scientists argue that this was due to the sun not offering the same level of heat during that particular year.\nSouth America would suffer from three long months of heavy rain followed by three months of drought; this would, once again, affect the agriculture within the continent, not only killing the main source of the economy but also creating a famine.\nWhat impacted agriculture and the well-being of humans during this year were the multiple volcanic eruptions in the northern hemisphere of the globe. This led to the engulfment in darkness of half of the world due to a massive dark cloud that didn’t allow the sun’s heat to reach the earth’s ground, therefore lowering temperatures. This also explains why this was the coldest year.\nBesides not having much natural heat, agriculture once again suffered enormously due to the lack of sunlight which was vital to the growth of plants. Just imagine not being able to discern between night and day as it was always dark - and all this while starving to death and freezing cold. This darkness lasted 18 months, so most of the year AD 536 was lived in complete obscurity.\nAround the same time, though not in the same year (that is about 541 AD to 549 AD), the Bubonic Plague, caused by the bacteria \"Yersinia pestis,\" also broke out through transmission from rats to humans and was carried on ships to the rest of the world. In less than a year, the pandemic had spread worldwide, covering most of Europe, Asia, North Africa, and the Far East. Scientists estimate that almost 50% of the world's population was wiped out in the nine years the pandemic took place. I could go on and on about the year 536 AD, considered the worst year in history, but let me cap it off here. I'm sure you get my drift, right?\nIn this 4th Republic, and I am open to contestation on this, this year, 2022, could very well be our own annus horribilis: a year of extremely bad events, or, to be more exact, a horrible year!\nBut just how bad is a horrible year? It depends on whom you're talking to. Queen Elizabeth II of blessed memory, for example, used this expression in a speech in 1992 to describe that year, when there was a serious fire at Windsor Castle, the Princess Royal got divorced, the Duke of York separated from his wife and the Prince of Wales had marital problems. That was a horrible year for her.\nFor us here, in Ghana, I suppose we are more concerned about the bread and butter matters that affect our daily lives - which, upon reflection, makes me believe that 2022 has, in fact, been a horrible year for Ghanaians - if not the worst in our 4th Republican history!\nYes, we've had to deal with the global crises of Covid-19 and the Russo-Ukrainian war - but we are not alone in this enterprise - so why do we find ourselves on the cusp of becoming (if we have not already become, that is) another Sri Lanka - when even our much poorer neighbours are hale, hearty and living appreciably well - even in the eye of the storm?\nFrom the highest fuel prices I have witnessed in my life here in Ghana - to some of the worst prices I have seen for food and drink and everything in-between - to the imposition of the Elevy - against the popular will of the people - to the abysmal management of our economy which is fast-crumbling.\nThis, indeed, has been a horrible year! I shall get down to the economic data a little later, but let me just say this: it is said that he who pays the piper calls the tune. Ghanaians, through their votes, paid the piper, this NPP administration; yet when we called the tune, expressing our opposition to the Elevy, the piper failed to play the tune. The piper wasn't playing fair - and not just in that instance alone - so we had to show the piper where power lay - and we did, considering the pathetic showing of that levy. I ask: why heap misery upon an already suffering people? Why must it come to this?\nBefore we get into the economy, let’s take a quick look at our agriculture and how it's been impacted by galamsey. Our Lands and Natural Resources Minister is on record to have said that small-scale mining contributes 40% of our revenue from gold extraction. I ask: how much exactly is that? And at what cost to our environment?\nHow come a few years ago we stayed such mining and still sold more ounces of gold than we had for decades?\nOur waters, today, are looking very colourful - like something out of the milky way galaxy, in which our solar system can be found. From different shades of beige to brown, we have turned our cherished water bodies into POOLS OF DEATH! Behold, Ghanafu), your water bodies - at least, what has become of them…\nWe've been told that even if we stopped doing in Galamsey today and brought all those activities to a grinding halt, it would take about a 100 years to restore our water bodies to anything close to what they were before.\nDo you see why it was highly irresponsible for the Agric Minister to talk about \"just 2 percent of cocoa farmland that has been lost to galamsey\" and that 2% was \"nothing\"?\nThat, coupled with the chemical issues of mercury and cyanide contamination and other longstanding problems like farmers selling off cocoa land for rubber tree planting and other cash-crop production for fast money means we are looking at fast-dwindling levels of production. In simple terms, we could slip badly and lose not just our spot, but, our reputation as producing the best-quality cocoa worldwide! But do our misleaders care? Have they shown the leadership we need in this respect? Take another look at these water bodies and give me an answer!\nContemplate the unprecedented damage to our landscape through illegal mining activities in which some members of the ruling administration have been found complicit - and I'm not just talking about now - I'm talking about all that was revealed through the Anas exposé on the likes of Charles Bissue, then later the Ekow Ewusi saga, among many others.\nBefore any proper investigations could be conducted, didn't the system rush to clear them and allow them to enjoy their booty? The Aisha Huang case, itself, is a critical example - especially when her disappearance or purported deportation, which our President said he wasn't even certain of, was managed, or stage-managed in the way it was - with political elements telling us, the masses she has stolen from, that we stood to gain nothing through her incarceration.\nWell, we emboldened her - and now, she's back - and we're putting on a show - to save face! If we'd acted the first time and shown good faith, we would have no need to save face, Mr. President.\nAkonta mining, owned by your Party's Ashanti Regional Chairman, has been singled out for blame. But what has your administration done to punish him personally? Nothing! His outfit engaged in criminality by operating without a licence - in a restricted area - a forest reserve of all places! But have the long arms of the law caught up with him? No! Will they ever do so? I doubt it!\nBut wait! Lest I forget! Even Sir John willed part of the Achimota Forest, another forest reserve, to his family members. Add Atewa and I can say the NPP has quite an uncanny interest in our forest reserves! As it is, Mr. President, your administration has failed to rein in those destroying our land and water bodies in this manner - and in many other respects - which is why we are where we are today!\nOur cocoa and coffee risk being banned. Also considering the fact that cocoa production is based on land size, Indonesia could soon overtake us on the global production log. Add to that the fact that cyanide and meecury are polluting our land and water bodies because of galamsey and we could also lose out on producing the world’s highest-quality cocoa beans - all because our leader failed to lead - failed to act!\nAnd just when you thought things couldn't get any worse, they actually do! Let's focus on the economy now. The World Bank now says our debt to GDP is set to hit 104.6% by end of year. That puts us in very ignominious company; we are rubbing shoulders with countries like Eritrea, Sudan, Cape Verde and Mozambique. Can you imagine that?\nThis, Ghanafu), is the very first time we find ourselves in this territory where our Debt to GDP is crossing a 100%! It also means our economy is facing severe debt distress as is evinced by the Fitch and Moody's downgrades we have seen recently! The World Bank blames our Central Bank, which we would have counted on to see the writing on the wall and act quickly to protect us, for looking on till inflation skyrocketed before tweaking our monetary policy rates.\nEven worse, our currency, the Ghana Cedi, has slumped a whopping 60% this year alone! 60%! For context, the Ghana Cedi had lost just 2% of its value around this time last year. The Cedi, Ghanafu), remains the worst-performing currency in Africa - and the second worst in the world!\nHow do we get out of this foul rut? What do we do? Where do we turn? What should be our stance? Our posturing? Definitely not one of parrying blame but of accepting responsibility and of being practical. Of being honest with the people and humbly engaging all so we can avert even worse.\nAfter all, is anyone happy when things go bad? It affects us all: thick, thin, short, tall, rich and poor. We need all of us - all hands on deck - to remedy the situation, I agree. But first, our misleaders must act like leaders and show true leadership! Without that, God help us but this could be far worse than anything we've ever known.\nMost of all, voices of conscience must speak up, loud and clear, so our leaders, too, will wake up from their slumber - just as some of us have - lest disaster overtake us! Like the Osagyefo, Dr. Kwame Nkrumah said in his speech on Independence Day: \"We have awakened. We will not sleep anymore. Today, from now on, there is a new African in the world!\"\nToday, from now on, let there be a new Ghanaian mindset, a new kind of leadership mentality, a new kind of patriotism, that love for God and country, to propel our Motherland to the heights she deserves to be at.\nGhana deserves better!\nMy name is Benjamin Akakpo. These are my Blunt Thoughts served to you raw, unedited and undiluted. God richly bless Ghana and make her great and strong!\nLatest Stories\n-\nWe must fish out employers who sack pregnant employees – Francis Sosu\n-\nUniversal Music buys majority stake in Don Jazzy’s Mavin\n-\nFIFA Series international friendlies pilot project to commence in March 2024\n-\nTrigmatic reveals he’s been divorced for 3 years\n-\nNEDCo announces revenue mobilisation drive\n-\nKwaw Kese mulls $1m damages against the State for 2015 marijuana arrest and conviction\n-\nFamily seeks justice for Ghanaian immigrant shot dead by unknown assailant in Toronto\n-\nPleasures Magazine Announces Name Change to ‘The Affluenz’ as Part of its Rebranding Efforts\n-\nHow Dotmount Communications revolutionizes world Public Relations (PR) with rapid global publicity\n-\nWhy should NCA, National Security lead closure of radio stations? – MFWA quizzes\n-\nJoy FM to open Ghana Month with re-enactment of Nkrumah’s Independence speech\n-\nAn egg-size banku is not all that one can eat\n-\nInternational community has become meaner; build the economy – Pianim tells government\n-\nNDC accuses NPP forebears of derailing Nkrumah’s industrialisation vision\n-\nChief Justice assures private ADR institutions of partnership", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/blunt-thoughts-losing-from-both-ends-our-natural-resources-in-crisis-and-our-economy-in-tatters/"}
{"doc_id": "89b8af4180ad2b70ce009ab6a98b8ac4", "text": "How Busy Accounting Software Is Useful For SME's In Ghana\nTraning Program Information\nWhat is Busy Software?\nBusy Infotech Pvt. Ltd. is a software company that provides an integrated business accounting and management solution for Micro, Small & Medium Enterprises (MSMEs). Busy accounting software helps its customers in their financial, VAT filing, and payroll needs.\n- Busy serves as the best tool for the Accounting Department of SMEs. And which also helps in managing their payroll management needs. BUSY is best for Purchase, Sales, Inventory and other departments that need information that Busy offers. And it is the best software which serves as a medium for information flow from one of these departments to other. As it is easy to use and requires no extra learning to use it.\nAn integrated bussing accounting and management solution, BUSY is a one-stop solution for your financial and payroll needs. It offers multi-location inventory, multi-currency support, order processing capabilities, and helps you make informed decisions.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessghana.com/site/events/traning-program/474360/How-Busy-Accounting-Software-is-Useful-for-SME-s-in-Ghana"}
{"doc_id": "3944ebf67243f46b0cec67cd8afda34f", "text": "South Africans have faced a difficult period, but relief could soon be on the way.\nOver the last 18 months, South Africa – like several nations across the globe – has fought high inflation, a protracted economic downturn and high-interest rates.\nHowever, Jeremy Gardiner from Ninety One said that several improvements have occurred across the global economy.\nIn South Africa, despite the significant mismanagement of the nation’s state-owned enterprises, the private sector has stepped in – especially when it comes to energy and the mass imports of solar panels.\nThe USA also looks likely to avoid a recession, and with signals from the US Federal Reserve that it is done hiking interest rates, global sentiment has improved.\n“Across the pond in both Europe and the UK, the growth picture, however, remains challenging. While rates have probably peaked, inflation remains too high, and growth is stuttering, so the ‘hard landing’ possibility remains real,” Gardiner said.\nThere are also other risks to the global outlook, such as Iran joining the conflict in Palestine and Israel, which could push oil above $100 per barrel – resulting in inflation and interest rates growing.\nPolitical chaos\nSouth Africa is also entering election season, with analysts expecting the ANC to get just under or over 50% – increasing the chances of a coalition government.\nAlthough a coalition between the DA and the ANC would be seen as a positive by the markets, it is unlikely, given that the ANC won’t come in below 40% of the vote.\n“Even more unlikely, according to analysts, is a potential ANC-EFF tie‑up – fortunately, as the economic carnage a populist government would wreak on SA would be devastating. One need only look at Argentina as a case in point,” Gardiner said.\nBig challenges\nAlthough heightened periods of load shedding are still possible, the outlook is improving due to further effort, expertise, and money put into fixing the problem – much of which is coming from the private sector.\nIn terms of logistics, mining companies – a major taxpayer – would have exported R150 billion more if the nation’s ports and railways were working optimally.\n“Similarly, and hopefully, the private sector is coming to the rescue of our railways and ports, which also, having been left in state hands, have more or less collapsed,” Gardiner said.\n“This, together with tough economic times, has seen the government forced to make some hard decisions, in other words, allow business/private sector involvement. Durban has selected a partner to develop and upgrade the container terminal, and the others are headed the same way.”\n“Partial privatisation is not ideal. There will still be difficult and sometimes obstructive government officials involved. For instance, the Durban deal has apparently not been signed off yet, with bureaucratic officials holding the final signature back.”\nHowever, looking ahead, growing private sector involvement would certainly be seen as an improvement, with working electricity and logistics infrastructure essential to the nation’s growth over the next 3-5 years.\nIn addition, the decline in global interest rates from next year should see the dollar softening, boosting emerging market economies and currencies, and improving the global outlook – even if oil prices remain a threat.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business-opinion/730949/things-are-looking-up-for-south-africa-2/"}
{"doc_id": "18aa6ab63a319836401ee972eab200f4", "text": "Currency Managers in West Africa are exploring innovative ways to safeguard the value of their respective currencies by reducing activities of money laundering and counterfeiting.\nCurrency Management is one of the critical functions in central banks operations. The integrity of a currency and its efficient supply are clear indicators of a well-functioning central bank.\nOf particular concern within the sub-region is the issue of counterfeiting and money laundering which continue to pose significant threat to financial systems.\nIn light of this, the West African Institute for Financial and Economic Management (WIAFEM) organized a workshop for currency managers within West Africa on currency management and forecasting to brainstorm and map out innovative policies to minimise the menace.\nDelivering the keynote address on behalf of the Governor of the Bank of Ghana, Head, Centre for Capacity Development at the Bank of Ghana, Emmanuel Quao, urged central banks to incorporate and embrace requisite security features to deter counterfeiting and enhance durability.\n“Central Banks also need to safeguard the value of the currency through various measures such as initiating policies relating to the issue and redemption of currency, initiatives to prevent and minimise money laundering and counterfeiting”.\nHe added that it is imperative to build the capacity of Currency Managers to foster financial stability within the region.\nSpeaking to Joy Business, Director in charge of Research and Macroeconomic Management at WAIFEM, Dr. Emmanuel Owusu Afriyie said the role of currency management is an integral part of overall economic management.\n“Currency management is one of the critical functions in central bank’s operations. Indeed the integrity of a currency and its efficient supply are clear indicators of a well-functioning central bank”.\nThe regional workshop is designed to explore key challenges that confront central banks in currency management and how they can be confronted.\nLatest Stories\n-\nBurkina Faso says 170 dead in village ‘executions’\n-\nPakistan: Shehbaz Sharif wins second term as prime minister\n-\nGunfire near Haiti airport disrupts flights for second day\n-\nAkufo-Addo, wife, bid farewell to Gertrude Quashigah\n-\nMinistry of Education reacts to JoyNews’ upcoming documentary ‘Empty Plates’\n-\nSocial media users mourn Mr Ibu\n-\nUniversity of Ghana Stadium: Bawumia eulogises Kufuor for facility\n-\nMr Ibu suffered a cardiac arrest – Actors Guild of Nigeria\n-\n2024 Elections: Martin Amidu reacts to NDC’s running mate choice\n-\nHundreds of prisoners escape Port-au-Prince prison as violence escalates in Haitian capital\n-\nFIFA hails International Football Association Board (IFAB) decision on permanent concussion substitutes\n-\nBinance: Nigeria orders cryptocurrency firm to pay $10bn\n-\n3 dead following clash between Tontokrom residents and Asanko Mines security\n-\nHow luxury African fashion has wowed Europe’s catwalks\n-\nRespect term-limits to ensure survival of democracy – Nitiwul to to ECOWAS Presidents", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/currency-managers-in-west-africa-explore-innovative-ways-to-safeguard-value-of-currencies/"}
{"doc_id": "2a987e5ed3458354d276e261ec280b84", "text": "China-US trade war: Zero-sum game, a loss-loss confrontation\nSpecial Correspondent\nThe United States of America’s administration wielded tariffs as a “big stick” and coerced other countries into accepting its demands in the name of “America First”.\nThe US has launched investigations under the long-unused Sections 201 and 232 against its main trading partners, causing disruption to the global economy against the trend of multilateralism.\nSince August, 2017, it has launched a unilateral investigation under Section 301, accusing China of not being able to properly protect intellectual property and forcing foreign enterprises to transfer their technologies, which is totally unfounded. Though China is willing to resolve trade disputes with the US through dialogue and consultation, which is conducive to the interests and expectations from both sides, the US administration, however, has once and again breached the consensus reached in previous consultations, and imposed additional tariffs on Chinese goods exported to the US, upgrading the trade friction to a degree in no one’s favour.\nNeither side shall be the winner in the prolonged trade friction. International landscape today is no longer governed by zero-sum game. On the contrary, in a world where all countries’ interests are more intertwined than ever before, any party’s loss will impact the global economy as a whole. Given the large volume of intermediary goods and components from other countries in Chinese end-products exported to the US, US tariff hikes will hurt all the multinationals that work with Chinese companies, US companies included.\nTariffs hike is not a solution but a weapon, a weapon not to enemies, but to partners. Researchers found that, to avoid loss of customers, some enterprises have to afford part of the tariffs themselves, some others will do their best to reduce tariffs by way of entrepôt and processing trade or readjust their global supply chains at the expense of optimal resource allocation. Ultimately, customers and enterprises in both countries will suffer, slowing down bilateral trade and investment as a result since profits are shrinking.\nAccording to the research by the US National Retail Federation, the 25 percent additional tariffs the US imposed on furniture alone will cost the US consumer an additional US$4,6 billion per year.\nAccording to a joint report by the US Chamber of Commerce and the Rhodium Group in March 2019, due to the impact of China-US trade friction, US GDP in 2019 and the following four years could decrease by US$64-91 billion per year, about 0,3-0,5 percent of its total GDP. The International Monetary Fund also lowered its projection of 2019 world economic growth down to 3,3 percent from the 2018 estimate of 3,6 percent in its World Economic Outlook report published in April 2019, suggesting an even sagging world economy caused by the trade fiction.\nSo why is the US administration determined to launch the trade war at the cost of a possible recession of its own economy and pose threat to a looming world economy? Is it true that an emerging China will endanger US economic interests or world trade order? Economy and trade between China and US is not the main cause for China’s growth, nor is it the cause weakening US’s national power, but a driver for a balanced world economy instead.\nEric Fishwick, CLSA’s head of economic research, said that the China-US tariff battle isn’t just about Americans buying too many Chinese goods. This is really because China is the next geo-economic and geopolitical rival to the US, and the US is uncomfortable with that. China US trade war is not simply a war in trade or economical volume, but a war in political strength and influence.\nLooking back at US geopolitical strategic foreign policy, containmentism and cold war mentality remains as the features till today. The US policy-makers hold the view that only by keeping finding a rival and defeating it, could the US stay in absolute advantage and security till it reaches hegemony, its final goal.\nThe rival might not only mean a “hard power” giant in either military or economy, but also indicates a “soft power” threat who doesn’t buy in US value. Being a superpower for decades in post-Cold War era, US holds that its national interests is at risk if they fail to curb a potential hegemony, namely China, before it becomes too strong.\nThe pursuit of the ultimate power is uncompromising, thus a zero-sum game is inevitable. In its new National Security Strategy issued in December 2017, it addresses key challenges and trends that affect US world status, including revisionist powers, such as China, that use technology, propaganda, and coercion to shape a world antithetical to US interests and values, and to succeed in geopolitical competition, the US will protect its national security innovation base from intellectual property plagiarism and unfair innovation exploiting, to ensure its leading role in those fields. Uncertainty and insecurity by seeing a growing China touched the nerves of US, and they decided to resort to a trade war as the first step ahead.\nWith such a mindset, the US neglects the close partnership and complementarity in two-way trade and investment, while regards all China’s development as dangerous, arbitrarily interfering in normal economic activities. The current US administration is owing its domestic issues to the unbalanced trade with other countries, internationalising and politicising economic problems.\nChina became the primary target as the biggest source of US trade deficit. Trying to solve domestic problems and bring the manufacturing sector back home, the US adopted technological and industrial development policies whereas making unwarranted accusations against other countries’ industrial policies, attacking China’s “Made in China 2025” plan, accusing China of “stealing” IPR and violating world trade order, curbing China’s high-tech development by imposing sanctions on Chinese private owned technology companies, and using protectionist measures to unilaterally claim normal contractual technological cooperation as forced technology transfer.\nTo guard its own interests, the US adopted unilateralism in the name of America First. By using proactive expansive measures the US assorted to “long-arm jurisdiction” based on its domestic law, asserting influence on transnational corporations or even containing other countries’ economic development by impeding the free flow of goods, services and capital.\nThe US, as the biggest economy in the world, however, refused to shoulder its due responsibility in international community. It denies the trend of globalisation and defies multilateral mechanisms by withdrawing from JCPOA, the Paris Agreement on climate change, UNESCO and UNHRC. It is because the US deems that a fair and cooperative multilateralised world will constrain it from realising its selfish and aggressive aim, which is to keep its position as the one and only global leader.\nHistory has witnessed the vicissitudes of the changing world. China is not the only target the US attempted to contain. In the 1980s, the US administration launched 24 investigations under the auspices of Section 301 towards Japan, holding Japan responsible for the unbalanced bilateral trade, coercing the Japanese government to accept almost all demands and forcing Japan into signing the Plazza Accord, which led to the Japanese asset price bubble of the late 1980s.\nToday’s China is not Japan in the 1980s, but a dynamic economy second biggest in the world with a large market, a low degree of dependence on export, and a strong momentum of technological innovation. China does not want a trade war, but it is not afraid of one and it will fight one if necessary.\nActually speaking, the trade war ignited by the US also brought with it opportunities to China, in that China saw clearly of its own shortages in innovation and high-tech development, and realised the importance of a development path of self-independence.\nThe trade war comes when the world is at a crossroad, with one direction leading to the pursuit of hegemony, the other leading to cooperation for common development. No matter how far China develops, it will never seek hegemony.\nChina will never pursue development at the expense of others’ interests and China’s development does not pose a threat to any other country. China is a firm believer of multilateralism and a strong promoter and defender of globalisation. As the biggest developing country, China is devoted to its own development and is selflessly sharing its experience with other developing countries.\nThe Belt and Road Initiative initiated by China will continuously serve as an open platform to enhance connectivity between countries for a more prosperous world, and China’s gate for international cooperation will only open even wider, never shall it be deterred by any forms of deterrence.\nA Chinese proverb goes that “a just cause enjoys abundant support, while an unjust cause finds little”. Dialogue and consultation is the only correct choice for China and the US, and win-win cooperation is the only path to a better future. When the US and China work together, they can be the anchor of world stability and the propeller of world peace.\nChina doesn’t believe in the Thucydides Trap, nor did China be a self-fulfilling prophecy through a peaceful development path. China and the US should have confidence in each other and stick to cooperation on mutual interests.\nIt is hoped that the US, in the spirit of no conflict or confrontation, mutual respect, and win-win cooperation, pull in the same direction with China to strengthen trade and economic cooperation, work together on a new way of harmonious coexistence, healthy competition and cooperative win-win results, without being disturbed by disputes or differences, jointly advancing the sound development of China-US relations. — Chinese Embassy in Zimbabwe.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/china-us-trade-war-zero-sum-game-a-loss-loss-confrontation/"}
{"doc_id": "c066f68f02b6933f9bf4939d584cb536", "text": "The African Development Bank (AfDB) has introduced its first sustainable US dollar-denominated 750 million perpetual subordinated hybrid capital notes.\nRated Aaa/AAA/AAA/AAA by Moody’s/S&P/Fitch/Japan Credit Rating, all stable, the transaction marks a significant step for the institution in optimising its balance sheet in line with the G20 Capital Adequacy Framework (CAF) recommendations to boost lending capacity.\nLaunched on January 30, 2024, with a coupon of 5.75 percent until August 2034 and a 10.5-year first call date, the transaction garnered immense interest, reaching a peak order book of over USD 6 billion.\nOver 275 investors participated, with a majority being allocated shares. Hedge/Specialized funds dominated the allocation (54.8%), followed by Asset Managers (27.8%), Central Banks/Official Institutions (6.7%), and Pension Funds/Insurance (6.6%).\nHassatou N’Sele, Vice President for Finance and CFO of the AfDB, highlighted the significance of the move: “This landmark transaction was received with marked enthusiasm by a broad range of investors. It paves the way for the African Development Bank and other AAA-rated Multilateral Development Banks to further leverage their capital base and increase their support to Africa and the developing world.”\nOmar Sefiani, Bank Group Treasurer, expressed satisfaction with the overwhelming response from investors: “We saw tremendous interest from over 275 investors resulting in a record order book for the AfDB. The outstanding success of this transaction allows the African Development Bank to demonstrate that MDBs can tap the private investor market to supplement their capital base and therefore allow incremental sustainable lending to their clients.”\nThe AfDB mandated BNP Paribas and Goldman Sachs International as Joint Structuring Agents and Barclays, BNP Paris, BofA Securities, and Goldman Sachs International as Joint Bookrunners to lead manage its new Perpetual Non-call (PerpNC) 10.5-year inaugural USD Global SEC-exempt Sustainable Hybrid transaction.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/africa/article/afdb-sells-hybrid-note-in-development-finance-first-says-reuters/"}
{"doc_id": "106972ceaa9fd9369c76c300e77d8f6d", "text": "What you need to know:\n- With health now devolved, inadequate funding of counties imposes further financial constraints on the system.\n- We must streamline the cost of healthcare provision to curb exploitation of patients by unscrupulous health providers.\nUniversal healthcare being one of the pillars of President Uhuru Kenyatta’s ‘Big Four’ agenda, the political will to achieve quality, affordable health coverage is not in doubt.\nThe right to health is entrenched in the Constitution.\nArticle 43 states that every person has the right to the highest standard of health and no one should be denied emergency medical treatment.\nVision 2030, Kenya’s roadmap to a middle-income economy, prioritises health as a major component of the social pillar.\nAn analysis of the system reveals a cocktail of challenges hindering optimal delivery of universal healthcare despite it being so strongly anchored in law and policy.\nPOVERTY\nFirst, most Kenyans cannot afford treatment and medication and the rising high cost of doctor consultations and medical procedures have pushed healthcare beyond their reach.\nResearch shows 32 per cent of households’ health budget is financed out of pocket as State and non-governmental actors account for 31 per cent and 32 per cent, respectively. Health insurers finance 13 per cent.\nGiven that Kenyans pay directly for a larger chunk of medical expenses, the surging cost of healthcare has had a direct adverse effect on households.\nThe high prevalence of poverty aggravates barriers to healthcare access by the majority.\nREGULATION\nSecond, there is lack of a clear legal framework on computation of the cost of treatment and medicines.\nHealthcare value chain actors — including hospitals, pharmacies and drug suppliers — are not effectively regulated regarding fees and prices.\nThis opacity makes it difficult to ascertain the reasonable cost of healthcare in Kenya.\nThird, public health facilities are underfunded. Government spending on healthcare is just six per cent of gross domestic product (GDP).\nThis is low compared, for instance, to education or infrastructure.\nDEVOLUTION\nWith health now devolved, inadequate funding of counties imposes further financial constraints on the system.\nThrow in recurrent strikes by health personnel and one begins to fathom the enormity of the crisis in the system.\nInadequate funding compromises quality and availability of health services.\nDue to dilapidated public health facilities, many Kenyans resort to the more expensive private health outlets.\nIn addition, most public hospitals suffer a chronic lack of drugs, forcing patients to turn to private pharmacies.\nFUNDING\nThe rising prevalence of non-communicable diseases such as cancer has further strained the health system and impoverished many families.\nThese diseases are expensive to treat and involve protracted medical procedures and care.\nThese challenges undermine the ability of our health system to deliver universal healthcare.\nWe must streamline the cost of healthcare provision, including consultation fees and medicines, to ensure predictability and curb exploitation of patients by unscrupulous health providers.\nA well-managed cost regime also encourages health insurers to lower premiums, enhancing coverage, directly reducing the burden on households.\nThe government should also increase public health funding at county and national levels and expand and modernise our healthcare infrastructure.\nCAPITATION\nFinally, we need to create incentives for service providers to tame the escalating costs.\nCapitation for service providers in lieu of the fee for service would allow for patients to pay for only what they need and reduce the tendency of health providers to prescribe unnecessary medical procedures and medication.\nThese measures, taken in totality, will certainly make universal health coverage an attainable goal for Kenya.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nation.africa/oped/opinion/How-Kenya-can-attain-universal-healthcare/440808-4361990-4ts828/index.html"}
{"doc_id": "f271a843e406751b7d454dea06810f53", "text": "China has submitted genome sequence data from hundreds of recently sampled Covid-19 cases across the country to international database GISAID ahead of a meeting with the World Health Organization.\nAn increasing number of countries have imposed new controls on travellers from China as a result of their concerns about the current outbreak and the risk that new variants will emerge as a result.\nThe WHO said on Friday that it had invited Chinese scientists to present detailed data on viral sequencing ahead of a meeting of a technical advisory group on the evolution of the virus on Tuesday.\nThe data – collected from different areas of the country, including Beijing, Shanghai, Fujian, Guangzhou, Sichuan, Zhejiang and Inner Mongolia – was submitted over the new year holiday period.\nA statement posted on GISAID’s homepage said no new variants of the virus had been detected, and the dominant strains were the Omicron subvariants BA. 5.2, BF. 7, BA. 2.75, and BQ. 1.1.\nMoreover, the data indicated that BF. 7 outbreaks in Beijing and Fujian had a potential origin in Inner Mongolia, while the data from Shanghai showed a number of additional known lineages from multiple separate introductions.\nThe Chinese Centre for Disease Control and Prevention said last week that the BA. 5.2 and BF. 7 variants accounted for 80 per cent of China’s current cases.\nThe WHO has asked Chinese health officials to regularly share specific and real-time data on the country’s outbreak, including more genetic sequencing data, as well as data on hospitalisations, intensive care unit admissions, deaths and vaccinations.\nThe global health body has also urged it to strengthen viral sequencing, clinical management, and impact assessment.\nThe WHO’s director general Tedros Adhanom Ghebreyesus said more detailed information was needed to make a comprehensive risk assessment of the situation in China.\n“We remain concerned about the evolving situation and we continue encouraging #China to track the #COVID19 virus and vaccinate the highest risk people. We continue to offer our support for clinical care and protecting its health system,” he posted on Twitter on Friday.\nChinese officials have had two meetings with the WHO since the country lifted its strict zero-Covid controls last month, Mi Feng, a spokesman for the National Health Commission, said on Tuesday.\n“China is willing to continue to work with the international community, including the WHO, to help end the Covid-19 pandemic,” Mi said.\nHe said China had maintained close communication with the WHO over the past three years and the two sides had conducted more than 60 technical exchanges in areas such as epidemic control, medical treatment, vaccine research and Covid-19 origin-tracing.\nAs China reopens after three years of Covid isolation, a number of countries have announced new entry restrictions on travellers from China, while others such as Italy and Japan require a negative test on arrival.\nSome countries, including the United States, attributed the change to China’s lack of information on genome sequencing and Covid-19 variants.\n“Variants of the Sars-CoV-2 virus continue to emerge in countries around the world. However, reduced testing and case reporting in [China] and minimal sharing of viral genomic sequence data could delay the identification of new variants of concern if they arise,” the US Centres for Disease Control and Prevention said.\nLatest Stories\n-\nKenneth Mitchell: ‘Star Trek’ and ‘Marvel’ actor dead at 49\n-\nBawumia lauds Ahmadiyya Muslim Mission for contributions to Ghana’s development\n-\nIf I can do it, you can too – Adekunle Gold to sickle cell survivors\n-\nReview BoG’s Inflation Targeting framework – US-based economist\n-\nBright Simons’ full argument against Agyapa Deal\n-\n2024 Elections: More pink-slime websites to outnumber legitimate news sites – Research\n-\nParis 2024Q: ‘We showed we are able to play amazing football’ – Nora Hauptle on performance against Zambia\n-\nBlame government for increasing unemployment and not universities – Gatsi\n-\nUkraine war: Indians ‘duped’ by agents into fighting for Russia\n-\nPublish sanctions imposed on Sentuo Oil Refinery – IES and COPEC to NPA\n-\nAkufo-Addo to deliver SONA tomorrow\n-\nI’ve no plans of becoming Bawumia’s running mate – Kennedy Agyapong\n-\nE Vibes to host US-based DJ and musician Ratchet Rome\n-\nPrices of foodstuff to remain high until June 2024 – GAWU\n-\nFranklin Cudjoe accuses NPP of sacrificing Osei Kyei-Mensah-Bonsu for political expediency", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/china-sends-covid-data-to-international-database-ahead-of-world-health-organization-meeting/"}
{"doc_id": "a7ffe2403268c02e6cfb0cebbe2e1dbe", "text": "The Central Bank of Nigeria(CBN) has issueda fresh circular mandating commercial banks operating in the country to lend out up to 65% of their customer deposits.\nIn a new circular addressed to all banks obtained by Nairametrics, the CBN disclosed that the minimum Loan to Deposit Ratio (LDR) target for all Deposit Money Banks (DMBs) has been reviewed upward from the initial 60% to 65%.\nA new LDR: According to the information contained in the circular titled: ‘Regulatory measures to improve lending to the real sector of the Nigerian economy’, the major reason cited by the CBN for the newly revised LDR is the noticeable “growth in the level of the industry gross credit”.\nFor instance, the apex bank stated that the industry gross credit increased by N829.4 billion or 5.33% from 15.5 trillion at the end of May 2019 to N16.3 trillion as at September 26, 2019.\nThe CBN, therefore, disclosed that the LDR was reviewed upward in line with provisions of the earlier circular and in order to sustain the momentum.\nThe Deadline: Also, the CBN has set a new date as the ultimatum for banks to comply with the new 65% LDR. Recall the initial target set by the apex bank was September 30th, however, it stated that all DMBs are to now attain a minimum LDR of 65% by December 31 2019.\nAccording to the circular, to encourage SMEs, Retail, Mortgage and Consumer Lending, these sectors shall be assigned a weight of 150% in computing the LDR for this purpose.\nIt was further disclosed that failure to meet the new minimum LDR by December 31st shall result in a levy of additional Cash Reserve Requirement equal to 50% of the lending shortfall implied by the target LDR.\nThe CBNalso stated it shall continue to review developments in the market with a view to facilitating greater investment in the real sector of the Nigerian economy whilst promoting a safe, sound and resilient financial system.\nA quick check: In an article published on Nairametrics in July, the CBN, through a circular, mandated commercial banks operating in the country to lend out up to 60% of their customer deposits.\nNairametrics also stated that with the new policy, anyone could get a loan at this rate.\nAt the same time, Non-Performing Loans stood at N1.69 trillion as of March 2019. The data also revealed that commercial banks had a total deposit of about N27 trillion out of which about N15 trillion or 55.5% was money lent to the private sector.\nHowever, the latest banking sector data released by the Nigerian Bureau of Statistics (NBS) shows that Non-Performing Loans dropped to a 4-year low in June 2019 (N1.44 trillion). Also, credit to the private sector rose to N15.4 trillion.\nExperts have raised concerns that initial 60% LDR would expose banks and skyrocket the Non-Performing Loans. Despite this, the CBN has revised LDR to 65% and banks are expected to brace up.\nFollowing the latest development, while companies and businesses with strong cash flows and collateral will have significantly higher chances of obtaining loans, banks will also have to invest heavily on strategies that can help mitigate against lending risk.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2019/10/01/cbn-increases-ldr-to-65-sets-december-deadline/"}
{"doc_id": "2b0a705fcdf479eef79c8b57acd69855", "text": "The government’s austerity fiscal plan of slashing of budgets across departments has seen Public Works and Infrastructure (DPWI), particularly the Property Management Trading Entity (PMTE), being hard put to maintain the more than 80 000 properties portfolio worth more than R638 billion in accumulated surplus.\nThe PMTE is responsible for the development of government precincts, construction work, estate management, maintaining the asset register and management of state facilities.\nThe PMTE faces a R1.5bn deficit and has racked up more than R1.8bn from R851 million in bank overdrafts due to fellow client departments and municipalities not paying on time, citing budget cuts.\nIn the 2022/2023 financial year the PMTE has only been paid R2.9bn of the projected R5.1bn by municipalities, with the major reason for lack of payment cited being the budget cuts.\nDPWI chief financial officer Mandla Sithole said: “The revenue has not ever been 50% of what we have projected. We have a maintenance backlog of R33bn. We have to spend money to deliver services that are not paid for on time. Which is why we say we have to work harder at sweating our assets.“\nThis was at the presentation of the DPWI annual report for the 2022/2023 financial year to Parliament’s select committee on transport, public service and administration.\nSithole said state properties leased out for accommodation had a more than 70% take-up rate of the portfolio, but that the revenue did not amount to a quarter of what was expected with more than R1.7bn outstanding, principally by Correctional Services, which was in the red for R158m.\nThe PMTE has immovable assets of R149bn and current asset liabilities of R3.5bn.\nIn the reporting period, the DPWI received an R8.1bn allocation, down from R8.4bn in the previous year, and spent R7.9bn with a variance of R242m.\nA high vacancy rate, which the department is urgently attempting to fill in more than 243 senior posts, resulted in an R83m underspending in the compensation of employees.\nRecovery of arrears from municipalities is at 66%, far lower than the 91% recovery the entity realises from private sector leases and other claims which netted R5.1bn from a projected R5.4bn, a 94% recovery.\n\"If they (client departments) paid a quarter of what we are owed, we would not have to run a bank overdraft,\" Sithole said.\nThe department had come under attack from parliamentarians on the maintenance of the parliamentary villages as well as the ongoing reconstruction of the parliamentary building, which has been turned over to a private company instead of the department.\nDPWI director-general Lwazi Mahlangu said in support: “Those (departments) that complain should give us the money to be able to do wonders. Most of our clients are not paying because of the budget cuts.”\nAnother financial blunder was the DPWI’s more than R800m purchase of the Telkom Twin Towers building, which Mahlangu defended, was intended for the SAPS to collapse 15 properties and occupy one centre.\nMahlangu said the DPWI’s construction project management had been hampered by factors including interruptions by the construction mafia, late approval of funding by client departments, cancellation of bids due to bidders being unresponsive, slow progress by contractors due to poor planning and financial difficulties as well as requests for time extensions.\nMahlangu said through the expanded work programme and other initiatives, the department had created 4.6 million work opportunities, falling short of its 5 million target.\nIt had released more than 120 000 hectares in 110 plots to the land reform programme.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/austerity-budget-bites-at-states-property-portfolio-a2de990c-087e-4d9c-a747-c6e6295c48ba"}
{"doc_id": "ca771d2e574cb4f8bd73a86db73d7942", "text": "The woes of the Ghana cedi continued this morning as the local currency depreciated further to sell at ¢15.20 to one US dollar.\nThis is about 3.4% depreciation in less than a day, after trading this morning, October 24, 2022, at ¢14.70.\nIndeed, some analysts and economists had projected a ¢15 to one US dollar by the end of 2022.\nIt appears the depreciation pressures are unending, as demand for the US dollars far outstrips supply. On the Forex Forward Auction Market, the Bank of Ghana has since the beginning of the year been supply $25 million every fortnight, though demand exceeds over $100 million.\nChecks by Joy Business at some leading forex bureaus across the capital city Accra indicate that the cedi is hovering around ¢15.20.\nHowever, the rate of deprecation against the pound and the euro have slowdown considerably. A pound and euro are going for ¢16 and ¢14 respectively.\nGlobal leader in financial services and US firm, JP Morgan, had said in its recent report on Ghana that the Bank of Ghana’s decision to purchase dollars from mining and oil companies, inadvertently reducing forex availability within the inter-bank market is one of the reasons behind the falling value of the cedi.\nIt also pointed out that the loss of confidence domestically has resulted in a significant drain from the financial account, even though portfolio outflows have been relatively limited.\nThe cedi depreciated by more than 20% in nominal term the whole of last week.\nIn terms of the year-to-date depreciation, it is hovering around over 50% to the American 'greenback'.\nLatest Stories\n-\nWater Technology Certificate introduced at St Paul’s School in Kukurantumi\n-\nShowing of JoyNews’ ‘Sick Hospitals’ documentary causes stir in Parliament\n-\nGaza receives first airdrop of US humanitarian aid\n-\nAkatsi: Man in police custody found dead\n-\nVanuatu parliament welcomes Vanuatu Trade Commissioner to Ghana Prof. Hugh Keku Aryee in historic visit\n-\nGhana has become a ‘no-action, talk only’ country – Theo Acheampong\n-\nMan convicted over water meter theft\n-\nAnti-LGBTQ Bill: Parliament did not go against the constitution – Sam George\n-\nAnti-LGBTQ+ bill: All arguments remain personal opinions until SC makes pronouncement – Joseph Kpemka\n-\nAnti-LGBTQ Bill: Provisions in the bill do not impose a cap, gag the media – Sam George\n-\nNo regrets over move to Swansea in 2015 – Andre Ayew\n-\nAnti-LGBTQ+ bill: Ghana has done the right thing by passing the bill – Bokpin\n-\nAnti-LGBTQ+ bill is flawed and unconstitutional – Prof Audrey Gadzekpo\n-\n15 resolutions, 2 decisions and a ministerial declaration agreed at UNEA-6\n-\nChief Imam is pleased with the passage of the anti-LGBTQ+ bill", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/1-now-15-20-rate-of-depreciation-to-pound-euro-slow-down/"}
{"doc_id": "4cf32f0c76a0c8791b27285fcc16854b", "text": "On September 25, 2013, the Governor of Central Bank of Nigeria (CBN) wrote a letter to the President of the Federal Republic of Nigeria. The central subject of that memorandum was “Non-Repatriation to the Federation Account by Nigerian National Petroleum Corporation (NNPC) of N49.8 Billion representing 76% of the value of Crude Oil liftings in 2012 and 2013”. But the letter also contains complaints about “Failure of NNPC to pay N22 billion Nigerian Export Supervision Scheme (NESS) Levy”, and “Other Related Matters”. On the whole, the CBN Governor raised, in the memorandum, several issues of urgent national importance which he wanted the President to intervene on and address. A close reading of the letter reveals about ten such issues.\nLet me briefly list them. The first is the exact quantity of crude oil lifted by the NNPC from January 2012 to July 2013. The second is its true monetary value. The third is the monetary value of the crude oil exports by the NNPC within the same period. The fourth is the quantum of revenue swept into the Federation Account by the NNPC in the same period. The fifth is the shortfalls in remittances by the NNPC to the Federation Account between January 2012 and July 2013. These five issues are hard core economic questions which the President, to whom the memo was directly sent, should demand answers to, from the Minister of Petroleum Resources, the Accountant –General of the Federation and the Minister of Finance/Coordinating Minister for the Economy. They require a factual response, not a resort to diatribe, recriminations, or ad hominem verbal-stone throwing.\nThe second set of issues is more loaded and not all of them are directed at the NNPC. There is, first, a call by the CBN Governor for an investigation into the activities of Bureaux De Change (BDC) with a view to prosecuting them for violating Nigeria’s anti-money-laundering laws. Then, second, the CBN Governor suggested an investigation of companies that sell private jets to Nigeria, accusing them of also violating Nigeria’s anti-money laundering laws. Third, the CBN Governor alleges, in a direct and pointed manner, that the NNPC has refused to keep up with payment of its levies under the Nigerian Export Supervision Scheme (NESS); and that the NNPC currently owes the Federal Government of Nigeria a sum of N22 billion. Fourth, the letter raises an issue which bothers on reconciliation of physical volumetric data and revenue flow data pertaining to crude oil lifting and tax payments. As the CBN Governor puts it, between January 2012 and July 2013, NNPC crude oil lifting amounted to 46% of total lifting from Nigeria; yet remittances represented one third of taxes paid by the oil companies that exported the balance of 54%. That implies that the tax remitted by the NNPC should be commensurate with its oil lifting, and should therefore approach a proportion higher than 33.3% of the taxes paid by oil companies. The fifth issue raised in this category is also a reconciliation problem. The CBN believes that the quantum of revenue received and swept into the Federation Account, as Crude Oil sale proceeds, should normally be higher than the amount paid into the Federation Account as Petroleum Profit Tax and other related taxes and charges. It was therefore surprised that in 2012 and 2013, this normal trend was reversed. The Federation Account received, instead, a higher figure of US$28.51 billion as Petroleum Profit Tax and related taxes and charges and only US$10.13 billion as revenue from crude Oil sales. And in 2013 (January to July) taxes brought in US$16.65 billion, while crude oil sales yielded only US$5.39billion to the Federation Account.\nThe CBN levied two other serious allegations against the NNPC way beyond the accusations of non-repatriation of funds to the Federation Account and non-payment of NESS levy. The CBN charged the NNPC of acting in a manner that is tantamount to violation of certain constitutional provisions; and also of violating both the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act No.17 of 1995; and the Pre-Shipment Inspection of Exports Act No. 10 of 1996.\nIt then proceeded to demand for some action to be taken by the President of the Federal Republic of Nigeria to address the problems raised in the memorandum. The first prayer by the CBN is that the President should require the NNPC to provide evidence for its disposal of all proceeds of crude oil sales “diverted from the CBN and the Federation Account”. The second is for the President to order an investigation into crude oil lifting and swap contract as well as the financial transactions of counter-parties for equity, fairness and transparency. The third is that the President should authorize the prosecution of suspects in money laundering transactions, including but not limited to BDCs who are unable to account for hundreds of millions of dollars.\nReaction by the NNPC\nThe NNPC responded by stating that the allegation by the CBN was borne out of a misunderstanding, by the Governor of the Central Bank, of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue to the Federation Account. It explained this modality pointing out that the Department of Petroleum Resources (DPR) and the Federal Inland Revenue Service were saddled with responsibility for royalty and petroleum profit tax, respectively. It then asserted that the major contributor into the federation from crude oil sales is royalty and PPT. This being the case, a significant proportion of the revenue generated from crude oil sales is expected to be paid into the federation account through the DPR and FIRS. The NNPC went even further to claim that it “is an established fact globally that royalty and PPT contribute over 75 per cent of the total government revenue(especially of the JV arrangements in all jurisdictions) derived from the proceeds of crude oil sales while the balance represents cost of production and profit oil”. The NNPC explained that the 24 per cent of the crude oil revenue receipts, which the published letter by the CBN Governor acknowledged as partial remittance represents the proceeds from the equity lifting which the NNPC was directly responsible for in line with global trends. The NNPC then stated categorically, with a note of finality, that the “alleged unremitted 76 per cent [of total crude oil revenue] was paid through the agencies that are statutorily empowered to receive them for onward remittance into the federation account”. Further, the NNPC claimed that “the entire federation equity in JV is about 58 per cent, hence only such equity and revenue derived from crude oil sales belongs to the federation”. Curiously, in listing the upstream petroleum revenue flow streams, the NNPC was silent on domestic crude.\nThe NNPC also denied being indebted to the NESS.\nA Comment\nIn commenting on this letter, its implications for the economy, the response of the NNPC, and the reaction of some Nigerians, I shall first broaden the issues involved and then address concrete and specific matters of oil revenue management. The broad issues pertain to the fundamental principles of petroleum revenue governance as reflected in the principles and criteria of the Extractive Industries Transparency Initiative (EITI) and the Precepts of the Natural Resource Charter (NRC). And the concrete and specific issues I shall address will be drawn from the work of the Nigeria Extractive Industries Transparency Initiative, especially its financial, physical and process audits of the Nigeria oil and gas industry, covering the period, 1999-2011.\nThe CBN Letter in the Context of the EITI and the NRC\nThe over-arching governance philosophy guiding good oil revenue management in countries implementing the EITI, or associated with the attempt to apply NRC precepts, is captured by the twin concepts of transparency and accountability. Let us start with the Natural Resource Charter and then go on to the EITI Principles.\nPrecept 2 of the Natural Resource Charter NRC) deals with the governance principles of transparency and accountability. It assesses the extent to which a government is accountable to an informed public in its management of the nation’s natural resources. It states that a nation in which the quality of public information about natural resources is low and its timeliness is poor, it is difficult to hold government and companies to account. And in a nation where transparency is lacking and accountability weak, it is very hard to achieve sustainable development.\nThe relevant clauses of the EITI rules are Principles 4,5,8 and 9. These are reinforced by the very first of the six EITI Criteria. EITI Principle 4 speaks to recognition, by all EITI implementing countries, that a public understanding of government revenue and expenditure over time could help public debate and inform choice of appropriate options for sustainable development. EITI Principle 5 is an emphasis on the importance attached by all EITI implementing countries to transparency by governments and companies in the extractive industries and the need to enhance public financial management and accountability. Principle 8 is an affirmation, by EITI implementing countries, of their belief in the principle and practice of accountability by government to all citizens for the stewardship of the revenue streams and public expenditure. And Principle 9 is a declaration that all EITI implementing countries are committed to encouraging high standards of transparency and accountability in public life, government operations and business. We should note that to be transparent is to be open, clear, unambiguous, precise, and simple. And to be accountable is to be answerable, responsible and liable.\nThe four EITI Principles highlighted above as part and parcel of global EITI Rules are reinforced, and clothed with both concreteness and mandatory force, by the first of the EITI Criteria. The first EITI Criterion, or Requirement, in EITI implementation is: Regular publication of all material oil, gas, and mining payments by companies to governments (“payments”) and all material revenues received by governments from oil, gas and mining companies (“revenues”) to a wide audience in a publicly accessible, comprehensive and comprehensible manner.\nNigeria subscribes to the NRC precepts and is an EITI implementing country; indeed, it is designated an EITI-Compliant country (2011-2016). It follows that the Nigerian people, government, ministries, departments and agencies subscribe to the EITI Principles (20 in all) and are bound by the EITI Criteria. Therefore, the throwing into the public domain of the data and information on revenues received by the Nigerian government from the oil and gas sector is in consonance with the spirit and philosophy of the EITI. No one should be embarrassed about the act, especially when one of the issues being canvassed is that the precise amount received should be determined and what is not paid into the Federation Account be “repatriated” and paid into that account in accordance with the provisions of the 1999 Constitution of the Federal Republic of Nigeria (section 80) and other extant laws of Nigeria.\nDetermining the Accuracy or Authenticity of the Revenues Received by the Government\nOnce more, let us begin with a general point. In the context of the implementation of the EITI in Nigeria, no data, on revenues received from the oil and gas companies as royalty, taxes, or other charges released by either one agency (be it the CBN or the NNPC) or by all of them acting together, even after reconciliation, can be regarded as accurate, authentic and final. Such figures need to be subjected to audits conducted in accordance with international standards and then made available to the NEITI independent auditors for reconciliation with figures from oil companies and for a thorough validation of the data and information. This is the whole point about the utility of Nigeria signing on to the EITI ten years ago. We shall return to this point later.\nLet us also say for the benefit of the public that the CBN, from the experience of the NEITI audits, appears to be the institution of government from which comprehensive data bout upstream petroleum revenue streams can be easily got. Unfortunately, its records are not always accurate. Indeed, the CBN is ‘famous’ for its misclassification of data. Any in doubt of this should look at the NEITI financial audit report for the year 2005, especially the section dealing with royalty and PPT data, much of which emanated from the CBN. But the problem is not that of the CBN alone. In age if great advance in information and communication technology, much of recording of information and data in the upstream oil and gas industry is still paper-based, done manually, and reconciliation requires face-to-face meeting of officials. It is incredible.\nMeanwhile, let us nevertheless, examine critically some of the information and data provided by the CBN. We shall begin with the items listed above as the first set of issues, all of which need to be addressed by the NNPC. According to the CBN, from January to December 2012 and from January to July 2013,, total lifting of crude oil by the NNPC amounted to 594,024,107 (i.e. roughly 594.024 million) barrels. This, it claims, represents 46% of total lifting by all stakeholders, which it put at 1,287,742,641 (i.e. about 1.288 billion) barrels, during the period under review. If the data on lifting are correct, then NNPC’s proportion represents 46.129% of total lifting by all stakeholders, as stated. The trend of lifting by NNPC in the years immediately preceding the period under review would tend to give credence to the figures quoted by the CBN. According to NEITI physical and process audits, NNPC’s crude oil lifting, peer annum, (i.e. 12 months) in the years 2006-2011 was as follows:\nTotal Nigerian federation crude oil lifting or entitlement is received through the NNPC. For six years immediately preceding 2012, average proportion of the total lifting of crude oil that was taken by the NNPC, on behalf of the federation, was 46.52 per cent. That total consists of equity crude (arising from joint venture agreements); profit oil (arising from production sharing contracts); and domestic crude (meant for the refineries and domestic consumption but much of which NNPC actually exports and earns foreign exchange from).\nThe data supplied by the CBN is also lent some credibility by the historical trend in the structure of the revenue streams in the petroleum upstream subsector. Data published by the NEITI on financial flows from the sector covering the period 1999-2011 present the picture very graphically. The underlying assumption of the CBN position is that proceeds from oil and gas sales are usually much higher in value than the financial proceeds from royalty, petroleum profit tax and other charges. Therefore, when you have a situation where the value of the royalty, taxes and other charges is higher than the value of oil and gas sales, then there is need to interrogate the figures. The table below clearly validates the argument of the CBN.\nThe table above shows that between 2006 and 2011, the average contribution of proceeds from oil and gas sales to the total flows to the Federation Account was 65.38 per cent. The average contribution of royalty, petroleum profit tax, and other charges to the Federation Account was smaller, at 34.62 per cent. If we take a long view of the situation, the picture that emerges is similar. A publication by the NEITI titled “10 Years of NEITI Reports-What Have We Learnt?” states: “the Government of Nigeria through the Federation [Account] has received a total of US$269 billion from the oil sector between 1999 and 2008. Over the ten year period US$92 billion has been received from oil-specific taxes. US$5 billion from non-oil specific taxes from oil companies and US$172 billion has been received from the sale of government equity oil”. The term “equity oil” was used for simplicity to cover equity crude oil; profit oil; and domestic crude. The proportion of its contribution is 63.94 per cent; and that of the taxes is 36.06 per cent.\nYes, we know that in more recent years, the quantum of proceeds yielded through the Joint Venture Operations is diminishing while that from Production Sharing Contracts is increasing. The Federal Inland Revenue Service has also become more competent in the extraction of petroleum profit tax. Consequently, the value of PPT is rising relative to the value of Royalty. We know too that as a result of the more prominent position occupied by PSCs and Carry Agreements, the value of what goes to the operators as cost oil is rising while the value of equity crude may be decreasing vis a vis what accrues to the Federation as profit oil. Thanks to unequal and unfair agreements and contracts between oil companies and the Nigerian federation. These developments are not, in my view, sufficient to completely reverse, in 2012 and 2013, the historical (1999-2011)trend in the structure of financial flows into the Federation Account delineated above. In 2011, a period of twelve months, the total amount swept into the Federation Account was US$63. 139 billion. Of this amount, proceeds from oil and gas sales accounted for US$36.724 billion (58 %), while royalty and taxes contributed US36.724 billion (42%). Then in 2012-2013, a period of 19 months, there was a dramatic and drastic reversal: a mere US$15.528 billion from oil and gas sales out of a total of US$65.332 billion (or even the post-bellum revised figure of US43 billion). Both the total amount and the proportions contributed by different revenue streams need to be interrogated, in the light of the historical trend observed.\nEpilogue\nJust as we were rounding off the writing of this article, another scene in the alleged US$49.8 billion non-repatriated oil revenue drama unfolded. During a joint press conference involving, among others, the Minister of Finance/Coordinating Minister for the Economy, the Minister of Petroleum Resources and the Governor of Central Bank, Nigerians were informed that half the amount allegedly un-repatriated, previously, had been identified: it was not missing; it was not unremitted; it was not non-repatriated; it was in fact in the national Federation Account. The CBN Governor was reported to have admitted that he made a mistake in his letter to the President; that, in the course of a reconciliation meeting, only about US$12 billion was found to be a short-fall in the remittances of the NNPC to the Federation Account. He explained that, actually, the NNPC shipped out crude oil worth a little above US$67 billion during the period under review. However, out of this amount, US$24 billion worth of crude oil shipment was made on behalf of third parties, to defray obligations like oil companies’ tax on crude and also third party financing. He declared that, the discovery had, already, addressed half of the amount under question. (Well, US$67billion—US$24billion=US$43billion—US$15billion=US$28 billion).\nAccording to the CBN Governor, the second part of the issue pertained to the lifting of “Domestic Crude” by the NNPC, to the tune of US$28 billion. It is here that the CBN felt that there was a short-fall in remittances to the Federation Account by the NNPC, amounting to US$12 billion. The Finance Minister, at this point, countered the position of the CNB Governor, stating that the un-reconciled figure was US$10.8 billion. So the reconciliation exercise would continue among the relevant agencies.\nFrom the analysis made above, the issues raised in the letter by the CBN governor are larger and weightier than the narrow focus of the inter-agency reconciliation meeting. The public should insist that answers should be found for them, even if, or when the CBN that raised decides to make a tactical retreat—at least in public.\nThe Way Forward\nThe first set of issues identified above is within the jurisdictional competence of the Office of the Accountant-General of the Federation. He is the constitutional boss of the Federation Account and should be raising the issues interrogated by the CBN (which is the OAGF’s banker) in this category. To get to the root of the matter, the OAGF should work closely with the Revenue Mobilization Allocation and Fiscal Commission, the Office of the Auditor-General for the Federation and the NEITI. The matter is too important to be left to the CBN and the NNPC, under the auspices of the Ministry of Finance. In the medium term, the recommendations contained in NEITI financial, physical and process audit reports, especially those pertaining to revenue-flow interface, capacity building for regulatory agencies in the oil and gas sector, and overall governance of the sector, will help to address the problem and prevent a future occurrence.\nThe second set of issues about money-laundering should involve the Economic and Financial Crimes Commission. Some of those that need to be interrogated are the so-called “Politically Exposed Persons (PEPs)”, who should more appropriately be described as Politically Protected Persons, because they are protected not only by the immunity clause of the 1999 Constitution, but also by their high political offices, positions or influence, their politically-derived wealth, and their politically sourced social status. Because of this, the ICPC and the Code of Conduct Bureau need to assist the EFCC; their enabling laws empower them better to deal with such persons.\nThe ultimate solution is to make the institutions established by law to deal with the problems identified by the CBN to work effectively. It is also to take more seriously our commitment to relevant international associations, like the EITI, and employ fully the transparency and accountability tools which they have fashioned, such as the audit process of the NEITI and the benchmarking exercise of the Nigeria Natural Resource Charter. The institutions need to adequately and regularly funded; allowed to operate independent of political interference; and taken seriously by having the recommendations in their reports faithfully implemented. Where the government of the day fails to discharge any of these obligations, then the people should organize and mount pressure on government to fulfil its responsibility towards these institutions and the citizens at large.\nProfessor Asobie was the Chairman of the Governing Board of NEITI, former head of the Academic Staff Union of Nigerian Universities, and currently the Co-chairman of the Nigerian Natural Resource Charter.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/transparency-in-the-management-of-nigerias-oil-revenue-2/"}
{"doc_id": "43c0031bbff69146a6d5f41e96db38e9", "text": "This is the summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and FGN Bonds.\nThis report is dated July 29th.\n***FG spends N851.4bn on JV oil assets***\nBonds: The FGN Bond market traded on a slightly weaker note, as spreads widened on the short end of the curve, following a slowdown in client demand interests. We, however, witnessed renewed interests for the long-tenured bonds, with significant demand witnessed especially on the 2037 bonds which declined by c.20bps on the day. Overall, yields were marginally higher by c.4bps on the day.\nWe expect yields to remain relatively stable in the near term, as investors maintain hunt for yields on the long end of the sovereign curve.\nTreasury Bills: The T-bills market opened on a weaker note, as the depressed system liquidity levels forced some selloffs on the short end of the curve. The Market however improved slightly towards the close of the session, as inflows from FAAC payments during the session bolstered system liquidity into positive territory.\nWe expect yields to trend lower tomorrow, due to the improved system liquidity in the money market.\nMoney Market: Rates in the money fell by c.9pct as inflows from FAAC payments bolstered system liquidity. The OBB and OVN rates consequently ended the session at 13.14% and 14.29%, with system liquidity now estimated at c.N220bn positive.\nWe expect rates to trend lower tomorrow, due to the improved system liquidity levels.\nFX Market: At the interbank, the Naira/USD rate declined by 5k to N306.85/$ at the spot market and by 2k to N357.68/$ in the SMIS window. The NAFEX closing rate at the I&E window declined by 10k to N361.87/$, whilst the cash and transfer rates at the parallel market remained stable at N357.50/$ and N362.00/$ respectively.\nDisclaimer: Whilst proper and reasonable care has been taken in the preparation and accuracy of the facts and figures presented in this report, no responsibility or liability is accepted by Zedcrest Capital or its employees for any error, omission or opinion expressed herein. This report is not an investment advice or a research recommendation and should not be regarded as such. The information provided herein is by no means intended to provide a sufficient basis on which to make an investment decision.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2019/07/30/investors-renew-demand-for-long-tenured-fgn-bonds/"}
{"doc_id": "4cbb9a06911515019e1e16b55e414cd8", "text": "Market optimism is spurring a rush of investments into Zambia’s agriculture and mining sectors, giving the economy new growth impetus.\nInvestors include Kobold, a consortium linked to tech titans Bill Gates, Jeff Bezos and Richard Branson, tipped to stir up Zambia’s foreign direct investment (FDI) scene with planned investments into its mining sector.\nThe California-based mineral exploration firm is eyeing the country’s mines for electric vehicle components, leveraging reformist president Hakainde Hichilema’s efforts to revitalise the economy.\nOn his landslide poll victory in 2021, part of Hichilema’s economic blueprint entailed placing an electric vehicle battery and components supply chain at the centre of Zambia’s economic transformation architecture.\nBattery technology, critical to improving electric vehicles’ driving range, is heavily dependent on minerals buried beneath the surface of Africa, with the Democratic Republic of the Congo and Zambia possessing about 70% of the world’s cobalt reserves.\nKobold uses artificial intelligence and machine learning to identify battery metal deposits. Efficient discovery of reserves will be critical as Hichilema plans to boost the country’s copper production to three million tonnes by 2032, up from 850 000 tonnes.\nMeanwhile, agricultural output is also benefiting from renewed investor confidence. In January, Munkotachi, a modest-sized business in the Chongwe district of Lusaka province, was due to start raking in profits from agricultural exports to the European Union.\nThis follows certification from GlobalG.A.P, a farm assurance programme, paving the way for Zambia’s Hass avocados and avocado oils to be sold in the European Union and other foreign markets.\nAccording to Mining Weekly, Zambia is also on course to expand its poultry farms. Munkotachi Investments managing director Christopher Lesa told Mining Weekly that plans are underway to create more than 90 agricultural cooperatives, all with at least 20 members each.\nLesa, who aspires to create an “avocado belt”, said the project had government support.\n“The government is trying to support SMEs [small and medium enterprises] in so many ways, as well as cooperatives so that people out there can benefit and improve their livelihoods,” he said.\nAccording to the World Bank, the Zambian economy began to rebound in 2021 following Hichilema’s election as president, with GDP growing at 4.6%, from a contraction of 2.8% during the pandemic in 2020.\nHigh copper prices, post-election market confidence and a continued recovery in the agriculture sector have driven wider economic recovery.\nFitch Solutions forecasts that while real GDP growth in Zambia slowed to 2.5% in 2022, growth will accelerate again in 2023, driven by a recovery in mining exports and strong private investment. — bird story agency", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/africa/2023-01-30-global-tech-billionaires-eye-zambias-electric-vehicle-battery-mines/"}
{"doc_id": "cb7d3acded3dcca6228ab669fcd2c34e", "text": "Nigeria’s consumer environment\nOver 10-12 February, Renaissance Capital hosted its 5th Annual Pan-Africa 1:1 Investor Conference, in Lagos. Most of the Nigerian consumer companies we spoke to at the event continued to complain of a constrained consumer environment in the country – citing the familiar reasons of the removal of the fuel subsidy in 2012, unrest in the north, increased import tariffs on grains, flooding in 2H12 and slowing governmentspending growth. That said, volume growth appears robust although consumer price-sensitivity is the key challenge. The companies remain upbeat about the longer-term potential of the Nigerian consumer. Nestlé Nigeria remains our top pick in the sector, given what we regard as its superior execution in the market, its consistent profit growth and its longer-term growth potential from the infrastructure it has built in the country.\n• Nestlé Nigeria predicts YoY revenue growth of 14-15% in FY13. In 1H13, the increased the price of its Maggi stock cube, which resulted in a decline in the margin distributors could earn on the product. As a result, volumes came under pressure in the product. Nestlé reacted quickly to correct the situation, and it reports that volume growth has normalised in 2H13. Revenue growth in 2H was 18-19%. It appears Nestlé does not believe consumer income is shrinking in Nigeria, given that it has awarded above-inflation salary increases.\nIt maintains a very positive outlook for the Nigerian consumer, believing annual volume-growth potential of 10-15% is achievable over the next 10 years. Nestlé Nigeria is prepared to sacrifice operating margin in order to ensure volume growth and market-share maintenance. We note that it will not have to increase marketing spend to the same extent as Unilever has, as it is already ahead of the latter in this regard. The company’s biggest concern in the short term is potential naira depreciation, specifically given rand and Turkish lira depreciation and the approaching appointment of a new governor at the Central Bank of Nigeria. In the company’s view, currency weakness will likely result in interestrate hikes, which could have a negative impact on suppliers and distributors. In our view, Nestlé Nigeria’s competitive strength lies in distribution, where it provides its distributors with credit and other support.\n• Unilever Nigeria sees the consumer environment in the country as very challenging at present. It notes an increase in unrest in the north in 2012 that hampered its business in the region. In addition, it cites a number of smaller players that are very competitive; and that it is losing market share in home and personal-care products (HPC), due to customers trading down to cheaper alternative products and competitive activity from Procter & Gamble. Unilever’s new distribution warehouse at its manufacturing facility is now operational, and it expects cost savings in 2014 of EUR2.5mn. The company has 75 activedistributors. It does not provide credit to these, although discussions around trade rebates are on the table. Unilever sees Nigeria as its second-fastestgrowing region, behind Bangladesh, expecting double-digit volume growth over the next few years. Further penetration in the north of Nigeria and the recruitment of distributors in white spots are seen as its main growth opportunities. It regards unrest in the north as its biggest threat.\n• Renaissance Capital", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/nigerian-consumer-postcard-from-lagos/"}
{"doc_id": "c92ca4e78b7a47da0ece13dcc038df27", "text": "Co-operative Bank #ticker:COOP is seeking Sh123.3 million ($1.19 million) funding to develop more loan products for small and medium-sized enterprises (SMEs) in a project financed by the International Finance Corporation (IFC).\nIn disclosures made on Friday, the IFC said the project, which will run until December 2018, will also train bank employees on serving SMEs.\n“The 12-month project is expected to increase access to finance for the Co-operative Banks (sic) SME and Women markets clients through strengthening the Banks (sic) capacity to serve them,” said the IFC.\nUnder its Africa Micro, Small and Medium Enterprise (AMSME) programme the IFC provides cheap credit for onward lending to African banks.\nIt also makes available its experts to guide financial institutions on developing affordable products for this segment.\nREAD: Co-operative Bank gets Sh10.7bn for long-term lending\nThe IFC, World Bank’s private lending arm, says it has so far disbursed Sh14 billion ($140 million) under the AMSME programme to 18 banks in 13 African countries.\nLast year, Co-op received Sh10.7 billion ($105 million) from the IFC for lending to SMEs, women and housing sector investors. The IFC has also extended financing to other lenders including the Diamond Trust Bank #ticker:DTK, Equity Bank #ticker:EQTY, and NIC Bank #ticker:NIC.\nCo-operative Bank saw its loan book post a year-on-year growth of 15 per cent at the end of March, the highest jump among listed banks.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/co-op-bank-in-sh123-3m-ifc-backed-funding-deal-2158344"}
{"doc_id": "85b15228789c80eba9b0fb019ef8eb85", "text": "JOHANNESBURG - The Black Business Council (BBC) on Friday said it was concerned about the low levels of compliance with the Broad-Based Black Economic Empowerment Act.\nThis follows the release of the B-BBEE Commission National Status and Trends Transformation Report for 2018, showing that 43 percent of JSE listed entities and 10 percent of organs of state submitted their reports as required, with the majority failing to comply.\nJSE listed companies are required to report their B-BBEE compliance as per Section 13G of the B-BBEE Act and the JSE Listings Requirements in terms of the King IV Report on Corporate Governance, but only 43 percent of companies reported during the reporting period.\n\"This means that the private sector is not taking B-BBEE serious or is selective about which laws to obey and comply with and it seems that B-BBEE is certainly not one of those laws,\" said Kganki Matabane, BBC chief executive.\nMatabane said what was even more worrying was that only 10 percent of all organs of state and public entities submitted reports while 90 percent did not bother to report.\nOf those that reported 41 percent were either on B-BBEE status level 8 or non-compliant.\n\"This is very concerning to the BBC. We need the Auditor General to prioritise reporting non-compliance to the B-BBEE Act,\" she said.\n\"We expect government to set an example for the private sector and the general public in obeying laws. If government doesn’t comply with the laws of the land, who will? We also call on the B-BBEE Commission to start taking those who don't comply to court.\"", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/black-business-council-slams-companies-bee-non-compliance-28718849"}
{"doc_id": "838563f1ae6e3401de2c2a8e67276a95", "text": "Trade Cabinet Secretary Moses Kuria is now proposing the removal of the 35 per cent duty on edible oils as a way of supporting local manufacturers.\nKuria, in a statement on Tuesday, June 20, 2023, wants the tax on imported crude oil substituted with 10 per cent export and investment promotion levy.\nIn a letter addressed to his Treasury counterpart Njuguna Ndung'u, Kuria said if implemented, the move will greatly support local manufacturing in the edible oils value chain.\n\"It is proposed that we remove the 35 per cent duty on crude oil and instead introduce 10 per cent exports and investment promotion levy on imported crude oil. This levy, introduced on selected goods which local manufacturing industries have the capacity to produce, is meant to incentivize investments in local manufacturing,\" according to Kuria's letter.\nAccording to the Trade CS, the introduction of the levy on edible oils will also create a more level pricing of the basic food commodity.\nThe CS also recommended the proposed substitution to be effected once the exports and investment promotion levy comes into effect stating that it will contribute to the growth of palm, soya and sunflower farming.\nKuria said despite measures created by the government to stabilise prices of essential household goods, the importation of crude oil into Kenya which is estimated at Sh102 billion continues to hold back local manufacturing of basic food commodities.\nKuria's statement comes on the backdrop of an edible oils importation scandal, which revealed how private firms import oil tax-free, and sell the commodity to State agencies at a higher fee.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001475650/edible-oils-deal-trade-cs-kuria-wants-tax-removed"}
{"doc_id": "6b11cd70145de55d582b6b8b729de5f3", "text": "Nigeria’s agricultural investment has dipped in the third quarter of 2023, hitting its lowest in nine years, data from the National Bureau of Statistics (NBS) show.\nAccording to data from the NBS Capital Importation report, foreign direct investment in the agricultural sector hit a nine-year low with $4.64 million in Q3 2023, a 95 percent decline from $95.10 million recorded in the corresponding quarter of 2015.\nNigeria’s agricultural capital investment has been fluctuating on a high and low basis, but maintained a consistent decline since 2019, hitting its lowest nine-year period figure in Q3 2023.\nOn a year-on-year basis, foreign investment into the sector declined 84 percent from $29.68 million in the third quarter of 2022.\nIn July 2023, president Tinubu declared a state of emergency in the agricultural sector owing to the level of insecurity that has plagued the country and prevented foreign investors from investing in agriculture.\nExperts have attributed the investment decline to the worsening insecurity in the country.\n“Insecurity issues affecting distributors of agro products have been a challenge. Investors saw that they were not getting rewards for their investments into the sector, so they let it go altogether,” Abiodun Olorundero, operation manager at Aquashoots Limited said.\nAbiodun went further to explain how much farmers have spent employing security personnel to safeguard cattle on their farms.\nHe also said that “fluctuation of naira value has not helped the situation either. Instability of the naira has discouraged foreign investors from investing as the naira to dollar rate is not what it used to be.”\nAccording to the NBS report, the agricultural sector remains in dire need of increased interventions as food continues to be a major driver of inflation, contributing about 50 percent to the headline inflation rate.\nOn a quarter-on-quarter basis, investment into the sector declined 53.6 percent to $4.64 million in the third quarter of 2023 from $10.01 million in the previous quarter.\nAlso, Nigeria’s agricultural sector faces many challenges that impact its productivity.\nThe industry was disrupted by the COVID-19 pandemic which forced many farmers to halt their activities, and this tampered with food productivity.\nSimilarly, high insecurity has impacted farming activities in the country, and the situation intensified in 2023, forcing many farmers to abandon their farmlands.\nAccording to the Food and Agriculture Organisation, Nigeria is expected to see about 26.5 million people in 2024 grapple with high levels of food insecurity.\nWith more investors lacking in the agricultural industry, its foreign direct investment might continue to decline, experts say.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/agriculture/article/nigerias-agric-investment-hits-lowest-in-9yrs/"}
{"doc_id": "4a77315cf2b1ff834d1575d4e4742d46", "text": "AngloGold Ashanti registered US$203 million profit in the first quarter of this year, driven by the higher gold price, as the company continued its reinvestment programme aimed at completing the redevelopment of the Obuasi gold mine.\nThis will add new gold reserves across its portfolio.\nThe US$203 million earnings or 48 cents a share is compared to US$143m, or 34 US cents per share, in the first quarter of 2020.\nAdjusted net debt declined by 43% year-on-year to US$908m in the first quarter of 202, from $1.60 billion in the first quarter of 2020.\n“We continue to make progress in delivering on our strategy,” Interim Chief Executive Officer, Christine Ramon said.\n“Our balance sheet remains in a solid position and Obuasi is making steady progress to completion”\nThis year and next will be key investment years for AngloGold Ashanti as it increases production from brownfields projects and builds on strong reserve additions from exploration in 2020, to increase its overall reserve base and the life of its mines.\nThe company currently expects to meet its guidance for 2021.\nConstruction at the Obuasi Redevelopment Project, which will transform the 20 million ounces highgrade gold ore body, initially placed on care and maintenance in 2016, into a top-tier gold producer, achieved 97% completion by the end of March this year.\nProduction from the mine rose 53% to 46,000 ounces in the first quarter of 2021, from 30,000 ounces the prior quarter.\nProduction for the first quarter of 2021 was 588,000 ounces at a total cash cost of $999 per ounce, compared with 630,000 ounces at a total cash cost of $773 per ounce from continuing operations in the same period in 2020.\nThe company said solid production performances at AGA Mineração, Serra Grande, Siguiri and Obuasi were offset by declines at other mines in the portfolio.\nIn the first quarter of 2021, covid-19 accounted for an estimated 4,000 ounces of lost production and an estimated $29 per ounce of all-in sustaining costs.\nThe Brazilian operations and Obuasi mine were most affected by the pandemic during the first quarter, with high rates of absenteeism affecting productivity in Brazil and ongoing challenges encountered in the rotation of expatriate workers from Australia to Ghana.\nIn the first quarter of 2021, total cash costs increased mainly as a result of lower grades and the drawing down on ore stockpiles at some of the operations while waste stripping and underground development progressed, as well as inflationary pressures recorded across most of the portfolio.\nSafety\nRegrettably, one fatality occurred in February 2021 when a miner at the Serra Grande mine in Brazil was fatally injured in a fall-of-ground related incident during blasting preparation activities.\nAngloGold extended its heartfelt condolences to the family and loved ones.\nThe company has been implementing a revitalised safety strategy across the business, with particular focus on the critical controls needed to eliminate what are called ‘high consequence, low frequency’ events.\nLatest Stories\n-\nParis 2024Q: 21 players involved in Black Queens second training session ahead of Zambia qualifier\n-\nSpintex Medical Centre begins Virtual Reality treatment to alleviate patients’ pains\n-\nGhana’s LNG Project on target for year-end completion – NPA\n-\nAsantehene asks new Finance Minister to work closely with MoF staff to address economic hardships\n-\nThe essential guide to run rate analysis\n-\nPhotos: Ghana hold eventful opening ceremony for 2024 Africa Zone 3 IHF Male Championship\n-\nSouth Africa headteacher shooting: Arrested pupil may be tried as adult\n-\nLion kills zookeeper at Nigeria’s Obafemi Awolowo University\n-\nSeamlessHR: ¢4 Billion payroll processed for customers, enhancing business efficiency\n-\nHow some countries are restoring wetlands for improved livelihoods\n-\nWAEC releases provisional results for 2023 WASSCE private candidates\n-\nFinance Minister pledges swift completion of Ashanti Region projects\n-\nCOCOBOD claims loss of 150,000 metric tonnes of cocoa in 2023 due to smuggling\n-\nYaw Nsarkoh – Understanding why the Free SHS scheme seems not to have made a drastic impact on literacy levels\n-\nThomas Partey returns to training after long injury lay off", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/anglogold-ashanti-earnings-rise-to-203m-obuasi-moves-toward-completion/"}
{"doc_id": "0397bf2c8a815d3ce80f2771a69f12da", "text": "South Africa has one of the highest rates of absentee fathers in the world. But one group of local (present) fathers has designed an award-winning application that will incentivise dads in the rest of the country to be more involved in their children’s lives from early on, stimulating children’s emotional and intellectual development and providing support to both fathers and mothers along the way. By MARELISE VAN DER MERWE.\nNappiDaddi, the mobile application (app) in question, walked away with the top innovation award and was designed under enormous pressure in a 24-hour period at the recent South African Innovation Summit 2015 hackathon for early childhood development (ECD). It was one of a number of innovative designs that aimed to tackle pervasive problems facing South Africa’s children.\nOther winners included Music Garden, a mobile app designed to incorporate music into the development of young children, teaching them dance, sing, and learn words, letters and numbers; Project Enable, a concept which would allow ECD practitioners to adapt toys and games for use by children with various disabilities via an idea-sharing platform; and HearScreen, an already fully-functional mobile app that converts smartphones into hearing screening devices using off-the shelf headphones. HearScreen was developed by audiologist De Wet Swanepoel.\nFor the uninitiated, a hackathon – also known as a hack day, hackfest or codefest – is an event at which computer programmers and others involved in software development and hardware development, including graphic designers, interface designers and project managers, collaborate intensively on software projects. At this particular event, which was held on the last weekend in August and developed by the Silicon Cape Initiative for tech entrepreneurship and the Innovation Edge, participants were challenged with a number of questions, such as: How can we use technology to encourage fathers of young children to be more involved in their children’s early care and development? How do we use technology to stimulate problem solving or adaptation skills in parents? How can we use technology to promote reading and storytelling to young children? There were seven questions in all, but the NappiDaddi team focused on the first.\n“All the team members are fathers,” team member Sello Lehong told Daily Maverick. “We were naturally drawn to the question as fathers, and as such, understanding of some of the challenges fathers face when raising their children.”\nNappiDaddi gives fathers a platform on which to engage with each other and share ideas, information, frustrations and victories; even – according to team member Kanya Msila – “bragging rights”. It’s essentially a facilitated network targeted at millennials and Generation X, and includes an integrated gaming element as extra motivation, relying on the competitive instincts of participants to engage them further. Features include milestones (with achievement unlocking), challenges (with leaderboards – the ‘bragging rights’ mentioned earlier, which are vetted by mothers), an ‘adopt’ feature for immediate families and relatives, automatically generated programmes according to proximity to the child – which are shared with mothers – and a number of sharing and sharing/exchanging support features including peer-to-peer, group support and support from mothers.\nJudging by the response received in the few days since winning the prize, says Lehong, there is a major need for more engagement with fathers, and since South Africa’s mobile penetration is so high, a mobile app is a useful tool. “From the feedback we have received thus far it seems as though there is a definite need for this sort of app, which was a bit of a surprise for us. Fathers are clueless out there and it seems this app might make a difference in fathers contributing positively towards their children’s upbringing,” he says. “The opportunity to build connected communities through technology is a definitely within our grasp. We are of the view that a powerful African concept such as Ubuntu can find resonance through technology.”\n“NappiDaddi will encourage dads with various child care challenges,” Msila adds, explaining that the leaderboards, bragging rights and sharing and knowledge exchange were geared specifically towards encouraging friendly competition, which he believes will be very motivating.\n“NappiDaddi eases the transitioning into parenthood through clear pattern recognition and rule-based guidance, as well as democratising the process of raising cognitively strong and healthy children through a facilitated network,” he explains.\nThe app’s design is not a minute too soon. South Africa is facing a crisis in terms of absent fathers. Just a third of our children live with both parents. Children from fatherless homes are more likely to face poverty, become involved in substance abuse, drop out of school, and suffer from health and emotional problems. Boys are more likely to become involved in crime, and girls are more likely to face teenage pregnancy. Female-headed households typically earn lower incomes. In a 2012 study by Linda Richter et al, entitled Fathers and other men in the lives of children and families, the authors point out that often circumstances exacerbate the problem: where employment and other conditions are favourable, they write, engagement by fathers tends to be higher. Where conditions are not favourable, the reverse is true.\n“International research and some studies from South Africa indicate that children whose fathers are present achieve better at school, have higher self-esteem and are more secure in their relationships with partners of the opposite sex,” the authors write. “Women who are supported in stable bonds with men experience lower levels of family stress, are less likely to suffer mental health problems and derive greater satisfaction from their roles as mothers … Importantly, men not only contribute to women’s wellbeing and happiness, but in several studies men have also been found to buffer children against neglectful or harsh parenting by a distant, demoralised or overburdened mother.”\nA 2013 study by Mazembo Mavungu Eddy, Hayley Thomson-de Boor, and Karabo Mphaka entitled So We Are the ATM Fathers notes that around half the country’s children live without daily contact with their fathers and that this presents serious social and developmental challenges. “Although a father’s physical presence alone is not necessarily a positive outcome in itself, widespread father absence has detrimental consequences for families and for society as a whole,” they write. “Responsible and engaged fathers, who do their share of parenting work, are beneficial to the development of children and to building families and societies that better reflect gender equity and protect child rights.” The abovementioned study differs from most other studies in that it actually gives voice to the absent fathers themselves, giving perspective to their feelings, viewpoints, and the reasons for their absences. The study found that in many cases, there was “acute awareness of the detrimental consequences of their absence, […] concern over their estrangement from their child/ren, as well as their readiness to participate in the restoration of broken ties and the prevention of the repetition of similar harmful parental behaviour by their children.”\nA 2013 policy brief by the Human Sciences Research Council (HSRC) suggests that “fathers want to be active parents” and “have a strong sense of responsibility towards their children” but experience a number of barriers. The policy brief contradicts stereotypes that portray fathers as negligent, and typically choosing to be absent and uninvolved. Barriers, the authors found, were often financial, cultural or relational (for instance, a bad relationship with the child’s mother).\nThis suggests, then, that given the opening, some assistance, and a point of contact, there is in a number of cases the possibility that relationships can be repaired – that in the above sample group, at any rate, there is a fairly large portion of fathers who are willing to work at their relationships with their families. But of course, that is only the first step.\n“Any programme seeking to address the widespread absence of fathers will have to tackle both the predominant restrictive notions of masculinity and fatherhood, and the current problematic dynamics that exist between men and women,” the study notes.\nCertainly, it is far-fetched to imagine that a completely absent father will come home and reform after simply downloading an app. But it is also far-fetched to imagine that this is what the designers of the app are saying. It is rather, one imagines, that they would like to place a tool in the hands of fathers whose spirits are willing, but who feel they are lacking support or knowledge, and don’t know where to start. The HSRC policy brief, as a matter of fact, recommends that national legislation focus on defining fatherhood beyond simply providing for children, and drive the education of fathers in other areas such as physical and emotional support, much like the areas of education and engagement targeted by NappiDaddi. It also suggests driving interaction with, and support from, other members of the family – much like the peer and family support networks provided by the app. It’s not a solution, no, but as a support tool, there may be many a father who will find it useful.\nAsked what motivated them to enter the competition, Lehong simply says: “The opportunity to use technology to alleviate some of the challenges within early childhood development.” There’s a sense that he and his team, as fathers, want to do what they can to help as many children as possible; and as their field is technology, they’re going to give that all they’ve got.\nThe team are going to spend their prize money on development, and aim to have a viable product within six months, Lehong says. The next phase is to test both market feedback and the most efficient way to make it available. Ultimately, they wish to rope in as partners ECD practitioners, healthcare professionals, social workers, other parenting groups, and key figures from the retail sector, such as baby-product retailers. Until then, it’s eyes on the future. DM\n* NappiDaddi was designed by Kanya Msila, Batandwa Baba, Sello Lehong and Samuel Molahlo, all pictured. (Photo: ITWeb)", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2015-09-03-nappidaddi-smart-child-rearing-for-dads-is-heading-this-way/"}
{"doc_id": "7446a39dda081f564ed83b34a4b3d81d", "text": "It's not all doom and gloom.\nEven as the crypto sector shivers in the bleak winter, venture capitalists are pouring money into digital currency and blockchain startups at a pace that's set to outstrip last year's record.\nIn the first half of the year, VCs bet $17.5 billion on such firms, according to data from PitchBook. That puts investment on course to top the record $26.9 billion raised last year, a warmer and happier time for bitcoin and co.\n\"The current market conditions - I don't think they faze investors,\" said Roderik van der Graf, founder of Hong Kong investment firm Lemniscap, which focuses on crypto and blockchain. \"The capital available is massive.\"\nVC funds offer financing to young companies they believe have strong growth prospects. The data suggests a solid faith in the future of crypto and blockchain tech, despite a bruising six months for the industry.\nA double whammy of macroeconomic headwinds and blow-ups at major projects this year have seen bitcoin plummet about 65% from its November record of $69,000, with the overall value of the crypto market tumbling by two-thirds to $1 trillion.\nCompanies have shuddered as prices fall, with major U.S. exchange Coinbase Global (COIN.O) and NFT platform OpenSea among those to lay off hundreds of workers.\nYet some VCs are shrugging off the gloom, with many deploying substantial war chests as their faith in the underlying tech behind crypto coins remains strong.\nThough not all investors are so bullish in the face of the crypto carnage, not by any means.\nDavid Siemer, CEO of California crypto management firm Wave Financial, said there were signs of a pullback from the sky-high valuations of crypto firms last year.\n\"This will get a lot worse - we're a couple of months into this cycle. In the last cycle the pain for those looking for funding was about 12 months.\"\nAMERICAN HOTSPOT\nNorth America, long the hotspot for VC deals, has again been the focus of activity with about $11.4 billion in the six months to June, versus $15.6 billion for the whole of last year.\nThe numbers contrast with general VC activity in United States, where deals fell to $144.2 billion in the first half from $158.2 billion in the same period last year as macro conditions and market turmoil chill investment.\nRumi Morales, director of investments at Digital Currency Group, a major U.S. crypto investor, said the data reflected increasingly robust faith in the crypto and blockchain sector.\n\"There used to be existential risk being in the space - that the whole industry was just going to go away, it was all a dream. That is not the case anymore.\"\nAdoption of crypto as an investment tool mushroomed last year, with the use of blockchain also gaining ground - even if the revolutionary changes from the technology promised to industries such as finance and commodities remain elusive.\nAmong the mega U.S. crypto deals in 2022: $400 million raised by the U.S. arm of crypto exchange FTX in January; a $450 million fundraising round by blockchain developer ConsenSys in March; and $400 million raised by stablecoin issuer Circle a month later.\nActivity is strong in Europe too, with $2.2 billion of VC investment in the first half of the year.\nLisbon-based Fedi, an app designed to help people receive, hold and spend bitcoin, said this month it had raised $4.2 million in seed financing.\n\"Within seven days we had all of the investment commitments,\" Obi Nwosu, one of its founders, told Reuters. \"And within less than a month and a half we had the initial fundraise target in the bank. Done.\"\nALSO READ: UN urges Kenya to tax crypto sector players and outlaw ads", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/cryptoverse-what-crisis-venture-capitalists-on-crypto-3893674"}
{"doc_id": "5b7b0743760ec54c75aa860d622745be", "text": "35 wards to miss out on roads fund\nMore than 35 wards could miss out on road construction kitty because they are yet to submit their priority road projects to the County Government.\nOnly 47 out of the total 85 County Reps have submitted their lists of projects to be funded by a Sh2 billion kitty from the National Government.\nA total of 290 roads have so far been approved for this year, with Cord dominated areas getting the lion’s share at 200 roads.\nWards represented by the Opposition, Jubilee County Reps, have 90 roads in the list obtained by Nairobi News this week.\nOut of the 47 wards, only 16 are represented by TNA Reps.\nAmong the leaders who are yet to submit their lists are Majority leader Elias Otieno (Kileleshwa), Minority leader Abdi Guyo (Matopeni/Spring Valley), Deputy Speaker Ken Ng’ondi (Kware), Jubilee Chief whip Hashim Kamau (California), Budget and Finance Committee chairman Michael Ogada (Embakasi) and Labour and Social Services chairman Wilson Ochola(Utalii).\nSome of the roads are only 100 metres long, but act as links to other major roads meaning they will open up the estates. Others are dilapidated tarmac roads with poor drainage making access to the estates a nightmare.\nAt 10 roads, Kayole South and Ngando Ward in Dagoretti North had the highest number. They were followed by Njiru and Korogocho, which had eight each.\nUpper Savannah submitted four roads, the least so far in the list.\nRoads and Transport Executive member Evans Ondieki said the submission was open.\n“We have sent several reminders even through the Speaker’s office. But as you know, people do not work with equal speed,” he said.\nThe upcoming projects will be financed by a joint cooperation between the County Government and the Ministry of Roads, Transport and Infrastructure.\n“We are going to tarmac them. It will take about three years to have them done,” Mr Ondiek said.\nIn a letter to Treasury Cabinet Secretary Henry Rotich dated December 19 last year, Mr Ondiek requested for Sh 2 billion funding in form of Stimulus due to the city’s strategic position in the economy of the county.\nThe funds will construct 8 roads in all the 85 wards. This will greatly enhance security, create employment and promote businesses due to accessibility,” Mr Ondiek wrote.\nLast week, Mr Rotich wrote back giving the Department of Roads a go ahead to work with the ministry of Infrastructure and Transport on the projects.\nOn Monday, County Reps whose wards are not in the list claimed they had done so. Mutu ini County Rep Martin Karanja said, “I gave my list long time. I will need to check with the Roads department.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairobinews.nation.africa/35-wards-to-miss-out-on-roads-fund/"}
{"doc_id": "05a743ff0481e3cbf6bae4f2d1d55832", "text": "A Goldman Sachs-backed South African financial services start-up has appointed former ICT Cabinet secretary Joe Mucheru as the president of the company to rev up its expansion plans on the continent.\nJumo, founded in 2015, said in a statement that Mr Mucheru will support the company to deliver its growth goals, navigate the regulatory landscape, and build the firm’s presence across the African continent.\nThe firm, which is valued at Sh49.7 billion ($400 million), offers financial services to entrepreneurs and businesses in emerging markets. It offers credit and saving products to customers as well as infrastructure for telcos, banks, fintech and e-commerce platforms.\n“We are honoured to be able to welcome Joe to JUMO. He brings an invaluable perspective given his experience as an entrepreneur, Google executive and regulator,” Jumo founder Andrew Watkins-Ball said.\nFormer top officials in government are expected to cash in on their time in office by picking up lucrative jobs in the private sectors, who are attracted to the honchos’ networks and information.\nFormer President Uhuru Kenyatta tapped Mr Mucheru to head ICT ministry from Google where he was serving as the regional lead for sub-Sahara Africa and country manager for Kenya in 2015.\nJumo in December announced its plans to launch in Cameroon in the first quarter of 2023, followed by Nigeria and Benin in the second quarter. It has also lined up new products for Ghana and Uganda markets.\nThe former CS held different positions in the corporate world, especially in the tech industry, before he joined the former administration.\nHe was previously the head of Sub-Saharan Africa (SSA) for Google, based in Nairobi, serving as Google’s first SSA employee. He joined Google in 2007 where he led the delivery of strategy, business planning and operations and was key to setting up Google’s presence on the continent.\nPrior to Google, he worked at Wananchi Online, the parent company of internet service provider Zuku, a company he co-founded in 1999.\nHe has held board positions at the M-Pesa Foundation Academy, Bitpesa (now Aza Group), an international money transfer platform, and GiveDirectly, a non-profit allowing donors to provide direct cash transfers to those in need. He is also the former Chairman of the African Telecommunications Union.\nJumo has raised more than $200 million in equity and debt rounds from backers such as Goldman Sachs, Brook Asset Management, Finnfund, Gemcorp, Proparco and Leapfrog since founder and CEO Andrew Watkins-Ball launched the company in 2015.\nThe fintech is present in six African markets — Ghana, Tanzania, Kenya, Uganda, Zambia and Ivory Coast — and South Asian country Pakistan with Cape Town, Nairobi, Porto and London serving as its main tech hubs.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/goldman-sachs-backed-fintech-jumo-joe-mucheru-as-president-4103162"}
{"doc_id": "d7072c6f0a6a28beb2b936660317de10", "text": "If you were looking for a fantastic investment opportunity which is easy to understand and yet offers attractive return then look no further. You can invest right from your mobile money account too.\nUntu Capital recently announced a retail note you can invest in which guarantees 9% interest per year. Do not be intimidated by the term ‘retail note.’ What simply happens is that you loan Untu Capital money and they will pay you back what you lent them and give you interest on top of that,\nSo the retail note is called U-Gain and as mentioned above it offers 9% per 12 months. The interest offered is fixed which means it won’t be changed during the loan period. That means you can accurately predict your total interest receipts over the loan period and easily too.\nUntu Capital had this to say about what U-Gain is,\nThis note is a financial contract between the Note Issuer (Untu Capital) and the Note Investor (you or me.) The Note Issuer promises to pay the Note Investor interest after every six months for the 12 month investment period. The Note Issuer also promises to repay the principal given by the Note Investor at the end of the agreed period of 12 months. The Note is issued by the Note Issuer to raise funds for a specific purpose.\nSo the interest rate is 9% but the interest is payable every six months, that is twice a year. Then Untu will then pay back the principal, which is the money you invested in U-Gain originally.\nThe minimum you can invest in the U-Gain is $50 and there is no maximum. You do not need a bank account though as your mobile money account will do just fine. At launch only EcoCash and telecash users will be able to buy U-Gain from their mobile money accounts. At the moment only telecash is live and EcoCash will be momentarily up.\nYou will be able to buy U-Gain during the offer period (primary market) at no cost but the mobile money charges. The offer period is that time you will be able to buy U-Gain directly from Untu Capital. The offer period ends on the 31st of December so do not be confused when you visit their website say the offer period ends on the 30th of November.\nThe U-Gain notes will be listed on the Financial Securities Exchange (FINSEC.) FINSEC is one of Zimbabwe’s two stock exchanges, the other one being the Zimbabwe Stock Exchange (ZSE.) So after the offer period you will be able to trade the U-Gain notes like you would shares.\nInterest is earned daily and so if you sell your notes before the 12 months are up you will receive the interest earned up to that date of sale immediately. The price you can sell the U-Gain note on the FINSEC stock market will be determined by market forces. So you could sell your $50 note for more than the face value.\nFor example you could buy your $100 U-Gain note and sell it after only 6 months. Depending on the going price on FINSEC you could sell the note for $102 but the interest of $4.5 (100*9%*6/12) would still be paid out. This will then mean you will have gained $6.50 (6.5%) after 6 months.\nIf you have looked around looking for money market opportunities then you know that 9% is rather attractive. If you were to just keep that money in a bank account, you wouldn’t get interest on that money as good as the 9%.\nSo if you have some extra funds you might as well buy some U-Gain notes since you will be able to sell the note for cash as and when needed.\nTo get started if you are on telecash, dial *707# to register. On EcoCash you will need to dial *905#, but remember it is not yet live.\nOn EcoCash once registered you will then have to dial *151# then you will find the U-Gain notes on the regular payments page. On telecash that same *707# will do.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2017/12/can-get-9-interest-per-annum-invest-u-gain/"}
{"doc_id": "843719ca540a52182c0caf61ef58926e", "text": "While spending time in Cape Town this past week, one of the weirder manifestations of Barack Obama’s victory caught this writer’s eye. The confluence of the two things got him thinking about the sanctity and continuity of nation states as they are now – or may become so in the future. By J BROOKS SPECTOR.\nAbout a year ago, virtually unnoticed outside America, the Obama administration launched a public outreach effort to American citizens – a kind of electronic, cyber-lekgotla to bring people closer to their government. The idea was that anyone over the age of 13 could initiate a citizens’ petition to call for presidential action. If they could get 25,000 fellow citizens in a single American state to sign on the White House would receive it and would, at the very least, give the proposal a hearing and then produce a formal response within a month. Really.\nSo far at least, most of the petitions submitted only have a few thousand electronic signatures affixed to them, way below the threshold for action – and most of those petitions have only been able to collect signatures from across the entire nation, rather than from within a single state as the initiative requires. Not surprisingly, during the life of this programme especially popular petitions have demanded the White House’s secret beer-making formula and national legalization of marijuana. The White House answered the first one in the affirmative. The second one – no, not now, not yet.\nIn the wake of the recent presidential election, petitions have poured in from more than 30 states, mostly those that went for Mitt Romney in the South, Midwest and Rocky Mountain regions, to allow their respective states to secede from the United States. Really. On the face of this, one might think this question has already been answered decisively in the negative. In fact, the country is in the midst of the 150th anniversary of the war that settled that issue rather definitively. Or, put another way, henceforth, the phrase would be, “the United States is”, not “are.”\nRegardless of that result in 1865, sometimes the idea comes back to some politicians. The Washington Post noted the other day that then-Tennessee Rep. Zach Wamp, a Republican, “suggested in 2010 that some states might have to ‘consider separation from this government’ should the leadership in Washington not change. ‘I hope that the American people will go to the ballot box in 2010 and 2012 so that states are not forced to consider separation from this government,’ he said.”\nHopes also seem to spring eternal among some human breasts that the results of 6 November can be rolled back, despite that fairly definitive result as well. But, if not for the whole country, then perhaps it might just for places like Montana, the Dakotas, Idaho, Alabama, Mississippi and the like. But, now, here’s the thing, the citizens of such states don’t seem to realize that one of the benefits of being in that larger nation is that it is a genuine financial bonanza for them. They are, in fact, the ultimate moochers – while those dreaded blue states that voted for Obama are the makers.\nIn almost every case, the states where these secession petitions are coming from are states where they receive significantly more in the way of federal largesse (in the way of payments to individuals and spending on everything a country buys and pays for) than they actually pay in taxes in the aggregate.\nLouisiana, with more than 28,000 petitioners by Tuesday this week gets about $1.45 in federal funds for every $1 it pays in taxes. Alabama, meanwhile, rakes in $1.71 for each dollar paid over; South Carolina gets $1.38 for its dollar; and Missouri gains $1.29 for each dollar paid. On the other hand, New York (a typical blue state) only gets $.79 for each dollar it pays to Washington, while Michigan receives $.85 per dollar and the swing state of Colorado has the same bad fiscal luck as New York.\nAs a result, if a swathe of Southern or Plains states actually did break away, taxes on the rest of the country could go down, the national debt could get paid off more effectively, and the country would eventually owe less to those dreaded puppet masters over in Beijing than it does now. Come to think of it, Mitt Romney’s economic plan (or at least one of them) could actually be put into effect for the remaining states.\nOf course, on the other hand, the new country would increasingly look like a candidate for foreign aid and would probably have to petition the Chinese to build the next new football stadium that was needed – let alone paying for health care and old age pensions or national defence expenditures. Maybe the citizens of the various blue states should petition the president to expel all those red states as a way of getting a grip on the country’s financial problems. The biggest expenditure might be replacing all those 50 star flags with ones that have fewer stars on them.\nMeanwhile, in Europe, there are similar – rather more serious – efforts afoot to shift those boundaries and borders. As the Financial Times reported the other day, “Catalans favour a vote on independence despite Madrid’s warnings it would be illegal. Under the pressures of recession, fragile public finances and political grievances that have smouldered for decades, if not centuries, Europe is witnessing a rise in separatism and regionalism that is testing the resilience of well-established states. Independence movements in Scotland, Catalonia and Flanders are capturing votes and the public imagination as they seek to break away or gain more autonomy from Spain, Belgium and the UK.”\nAnd in fact, Scotland is due to have a referendum on changing its status as part of the United Kingdom of Great Britain and Northern Ireland, while the Catalan region of Spain, the Flanders half of Belgium and the German-speaking region of Alto-Adige in Northern Italy are all angling for renegotiations of their respective statuses in some way. Depending on whom one asks, the goal is full independence, local sovereignty or a new, as-yet-undefined association with another neighbouring nation, as in the case of that one northern Italian province in a movement towards Austria. (Austria did in fact rule the region for many centuries as part of the Habsburg Empire.)\nSome political scientists and international lawyers have argued that by being in the EU and benefitting from that giant tariff-free market, regions like these should have more options than simply falling into place in accordance with the boundaries that are the inheritance of centuries of European conflict. Belgium is an artificial country expressly designed as a neutral zone between the perpetually warring nations of France and Germany/Prussia, while Catalonia is part of Spain because Ferdinand and Isabella married and then fought the Moorish kingdom of Granada together at the end of the 15th century rather than any inevitable sociological, historical, political, linguistic, cultural logic that makes them one state, rather than two. And as for Scotland, just ask Alex Salmond or Sean Connery.\nAnd, in fact, this is no small, academic notion. Even as recently as at the collapse of the Soviet system, there came to be 15 successor states in the geographical space once occupied by the Soviet Union (and even more if one listens credulously to the murmuring coming from Tatars and would-be citizens of the Republic of Transnistria). One will look long and hard to find Yugoslavia or Czechoslovakia on a map anymore – and all of these major geographical and political changes are less than 25 years old.\nOn the African continent, of course, the principle of the inviolability of the national borders was adopted shortly after independence came to most of the continent’s states. With few exceptions, it has been adhered to ever since the 1960s. The exceptions are what are particularly interesting of course. Eritrea was finally allowed to split from Ethiopia, but maybe that was simply because the two had only shared a common colonial status for a few years under the Italians in the run-up to World War II.\nOn the other hand, when Nigeria and the Cameroons became independent, the British mandated portion – in two non-contiguous sections – was allowed to be divided, as part joined Nigeria and the other part joined Cameroon. Tanzania was allowed to assimilate the colony of Zanzibar, but Morocco and Mauritania have not been allowed to peaceably absorb Spanish Sahara even until now (Mauritania eventually ceded its claim so as to be let alone by the territory’s rebels). South Sudan was allowed to split off from Sudan, although Biafra was not accepted as a separate nation from Nigeria.\nOf course, southern Africa is also an amalgam of areas with different histories, and with pieces added or subtracted in accord with the whims of Clio. It wasn’t until 1910 that the old Transvaal, Orange Free State, Natal and Cape Colony (along with Pondoland) were actually joined together as one state, and the temporary association of Swaziland as part of the Transvaal’s remit was rescinded. Some years after that, some local (white) politicians had their eye on a greater Union of South Africa that would have stretched as far north as Northern Rhodesia – producing an economic giant but a geopolitical and sociological nightmare.\nBut what holds the Western Cape to the rest of the current country of South Africa these days? It probably isn’t tax and budget equity. Just like the blue states in the United States, the Western Cape gets less from government spending than its population would seem to argue for. Moreover, it can even be argued that its political traditions seem to be diverging from that of the rest of the nation. In fact, for the greater part of its existence, it was a separate political entity as the Cape Colony, something that became especially noticeable after it effectively gained the kind of home rule the settler dominions of Canada, New Zealand and Australia were heading towards in the late 19th century. Although it certainly was not an egalitarian, non-racial society by any stretch of the imagination, it did have a qualified voting franchise that did have some Africans and many more Coloured citizens allowed to vote – with the last tattered residues of that franchise only being abolished in the 1960s.\nAnd so, is it possible to speculate what might happen if the economic and political circumstances in the rest of the nation became much more difficult: if the economy soured; unemployment soared; the mines began to be shuttered for lack of demand for their output; service protests multiplied dramatically; the rand started to tumble; and political life took a distinct turn for the starkly dramatic? This conversation has happened before. Even before the National Party took power, University of the Witwatersrand historian Arthur Keppel-Jones wrote a short, dystopic novel back in 1947, When Smuts Goes, that predicted the eventual partition of the country as the result of bitter civil war and a UN intervention. Think of that novel as a kind of academic paper tarted out in Nadine Gordimer’s July’s People or JM Coetzee’s Waiting for the Barbarians or The Life and Times of Michael K.\nBut, the thing of it is, what would be the critical threshold that could drive the people of the Cape into opting for independence, as it has already happened in the cases of Slovenia, Croatia, Slovakia – and perhaps will in Scotland? Rather than the constant excoriation of the people in that sun-dappled, wine-rich, ocean-kissed region that seems to go on among too many politicians north of the Cape these days, perhaps a bit more energy might still be spent on thinking through how to draw upon the Cape’s successes and in bringing all the disparate parts of the country together for the future – before clever people look to the folks in Texas, Montana and Louisiana for their political inspiration. DM\nRead more:\n- “Secession petitions filed on White House Web site,” on The Washington Post\n- “U.S. Secession Petitions Now Collecting Signatures in 34 States,” on Slate\n- “US election: Unhappy Americans ask to secede from US,” on the BBC\n- “The Confederacy of Takers,” on The Washington Post\n- Petition for Texas to secede from US reaches threshold for White House response at US News\n- Census 2011: Anomalies could disadvantage some provinces at the Mail and Guardian\nPhoto: Table Mountain looms over Cape Town’s Waterfront district, September 30, 2010. REUTERS/Steve James", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2012-11-15-the-state-of-being-in-the-cape/"}
{"doc_id": "c3becfa7db8f5184d955d049c38b240f", "text": "Africa50 Group, the pan-African infrastructure investment platform, proudly announced the successful first close of the Africa50 Infrastructure Acceleration Fund (Africa50-IAF) on December 29th, 2023, amassing $222.5 million in commitments.\nThis achievement is marked by an African first, with participation from 16 African institutional investors, which include sovereign wealth funds, pension funds, social security funds, insurance companies, banks, and Development Finance Institutions (DFIs), showcasing the commitment of regional stakeholders to drive transformative change across the continent.\nIn a press statement available on its website, the organisation stated that among the noteworthy first close investors are the African Development Bank (AfDB) and the International Finance Corporation (IFC).\nThe 12-year closed-ended infrastructure private equity fund, Africa50-IAF, aims to invest in life-changing infrastructure assets that will create jobs and speed up Africa’s green industrial revolution.\nAfrica50-IAF also seeks to mobilise large-scale and long-term institutional capital from both African and international investors, focusing on diversified and sustainable infrastructure sectors across the continent.\nThe statement part read, “The first close of the Fund marks a significant step towards capitalising on Africa’s infrastructure opportunities and fostering sustainable development across the continent.”\nAfrica50-IAF presented some of the highlights from the first close, which include, “The fund has secured a total of $222.5 million from a diverse group of African institutional investors, plus a global investor.\n“Backed by several prominent African institutions, the first close showcases a strong commitment to the continent’s self-reliance and the Africa50-IAF’s potential to catalyse infrastructure investment and drive economic growth on the continent.\n“The participation of a leading international institutional investor reflects the global recognition of African infrastructure as a rising asset class.\n“The capital raised will be deployed into a pipeline of transformative infrastructure projects spanning power and energy, transportation and logistics, water and sanitation, and digital and social infrastructure. The fund is led by Vincent Le Guennou and supported by a team of talented private equity practitioners with extensive Africa and international exposure.”\nAlain Ebobisse, CEO of Africa50 Group, expressed excitement about the strong support from African institutional investors, highlighting the increasing role they play in financing the real economy.\nEbobisse said, “We are thrilled to see such strong support from African institutional investors for the Africa50 Infrastructure Acceleration Fund. This achievement is a testament to the increasing role that African institutional investors are playing in financing the real economy and being at the forefront of unlocking Africa’s potential.\n“The Africa50-IAF is the first of a suite of new investment vehicles and instruments that the Africa50 Group plans to raise as we seek to mobilise further private sector capital from within Africa and globally into African infrastructure.”\nVincent Le Guennou, CEO of Africa50 Infrastructure Acceleration Fund, added that the successful first close is a significant milestone, positioning the fund to make a lasting impact on the development of key infrastructure projects across Africa.\nGuennou said, “The successful first close is a significant milestone, and we are grateful for the trust and commitment of our investors. The fund is well-positioned to make a lasting impact, accelerating the development of key infrastructure projects that will benefit communities and economies across Africa.”\nThe Africa50 Infrastructure Acceleration Fund is expected to play a crucial role in addressing Africa’s infrastructure deficit, with a target final close of $500 million.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/africa/article/africa50s-infrastructure-acceleration-fund-secures-222-5m-in-first-close/"}
{"doc_id": "260925c229e81fcbe0ed88fbb455b762", "text": "It was reported few days back that the Securities and Exchange Commission (SEC) expressed worry that credit to agriculture sector in the last 10 years remains as low as 5%, severely hampering the sector’s growth.\nAccording to the report, the Acting Director-General, SEC, Mary Uduk noted that only the capital market has the capacity to unlock better access to credit and finance for the sector through innovative financing structures and products.\nThe CBN had at various times dedicated funds to agricultural financing through various schemes with the aim of resuscitating the agricultural sub-sector which is a major contributor to GDP and employs a high percentage of the labour force.\nOne of such schemes is the Commercial Agricultural Credit Scheme (CACS) established in 2009. The scheme is financed through a N200 billion Bond raised by the Debt Management Office (DMO). Loans are given to qualifying companies at a maximum interest rate of 9%.\nAnother such scheme is the Anchor Borrowers’ Program (ABP). The Program was launched in 2015 to create a link between anchor companies involved in agricultural processing and smallholder farmers (SHFs) of the required key agricultural commodities. The SHFs are provided with farm inputs in kind and cash to boost production of these commodities and ensure stability of these inputs supply to agro-processors.\nAt harvest, the SHFs supply these produce to the Agro-processors and are paid for the products. There have also been World Bank assisted Agricultural Development Programmes (ADPs) and the States’ Agricultural Credit Programmes. However, not much seems to have been achieved through these schemes.\nThough financing the agricultural sector via capital market type funding may be a clearly better approach, growth in the agric sector is dependent on more than availability of finance in our view. Adequate infrastructure, re-establishment of the commodity boards, efficient storage facilities etc are structures that need to be in place to accelerate growth in the sector.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/03/14/agricultural-financing/"}
{"doc_id": "4c62098f837e09542151919d169d902f", "text": "GTBank, Access Bank, Zenith Bank, FBN Holding, and 9 other banks listed on the Nigeria Stock Exchange (NSE) spent N271.64 billion on personnel expenses in the first half of 2020, compared to the N254.06 billion recorded in same period in 2019. Interestingly, this accrued increase occurred at a time several companies were cutting down on their costs.\nAccording to checks by Nairametrics Research, the banks increased their expenses by over N17 billion during the period under review and this shows a 6.92% increase.\nBackstory: Nairametrics had reported, in Q1 2020 alone, that 13 banks collectively spent more than N178 billion as personnel expenses during the first quarter of the year.\nThis showed a 9.5% increase when compared to N162.6 billion, which the thirteen banks recorded during the comparable period in Q1 2019.\nIt should be noted that personnel expenses encompass all of a company’s expenditures in relation to its staff’s remuneration and welfare, albeit within a specific financial reporting period. In other words, such expenses may include salaries/wages, other benefits including health insurance costs, pension, and training among others.\nComparing how much various banks paid their workers in H1 2020\nFrom the available data, FBN Holdings recorded the biggest personnel expense in H1 2020. As much as N49.53 billion was spent on workers across the nation, compared to the N46.77 billion spent in H1 2019. FBN Holdings Plc is a holding company for First Bank of Nigeria Ltd and other subsidiaries such as FBNQuest, and FBN Merchant Bank.\nWhat this means: The figure above represents personnel expenses for all the subsidiaries across the FBN Holdings group of companies. Further checks by Nairametrics Research revealed that FBN Holdings has a total of 9,016 employees as of December 2019.\nUBA Plc followed closely with N44.56 billion for its staff’s remuneration during the first six months of the year, compared to the N37.17 billion in H1 2019. UBA had about 11,200 employees, according to information gleaned from its full-year 2019 financial statement.\nZenith Bank came third with about N38.86 billion as personnel expenses. Interestingly, this is just 0.37% higher than its expenses in H1 2019. The bank has 6,521 employees.\nAccess Bank Plc witnessed a 16% increase in its personnel expenses from N31.24 billion in H1 2019 to N36.25 billion in H1 2020. This can be attributed to an increase in its staff strength from 4,273 in FY 2018 to 6,898 as of December 2019 but stands at 5,576 at the end of Q2 2020.\nGuaranty Trust Bank, Nigeria’s second most profitable bank, experienced a 1.1% rise in its expenses from N18.57 billion to N18.77 billion in the period under review. The tier-1 bank is known for its very minimal operating cost approach. This probably explains why its staff strength as of June 2020 stood at 3,482.\nSurprisingly, Jaiz bank had the highest percentage increase in expenses among the 13 banks listed on the NSE. With a 71% increase, its expenses grew to N2.12 billion from N1.24 billion in the period under review.\nIt is obvious that the COVID-19 pandemic did not have any impact on how much the bank workers earned and there is a slim chance it would for the rest of the year, considering the relaxation of lockdown measures.\nRecall that after the pandemic hit, the Central Bank of Nigeria (CBN) had warned all banks against laying off any staff, as Nairametrics earlier reported.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/09/10/gtbank-access-bank-11-others-pay-workers-n271-64-billion-in-h1-2020/"}
{"doc_id": "a3e3886a2880d758d89fc475d9bc7a76", "text": "It has been six months since auditing firm KPMG handed a report (sorry, make that a draft report) to SARS commissioner Tom Moyane containing the findings/recommendations of a forensic investigation (sorry, make that a documentary review) into allegations that a “rogue unit” existed in SARS. It’s quite a tidy sum for a document that has not yet been publicly released and possibly never will be and that KPMG itself has said may not be used to resolve disputes or controversies. By MARIANNE THAMM.\nIt was the EFF’s Floyd Shivambu who, in a written question to Parliament, asked accidental Minister of Finance Pravin Gordhan how much the controversial and seemingly compromised KPMG “probe” into the alleged SARS “rogue unit” had cost, whether the firm had been appointed in an open tender and what exactly its terms of reference were.\nShivambu’s actual words were:\n“What was the cost incurred by the SA Revenue Service (SARS) for the services of a certain company in their investigations into (a) a certain person and (b) other former employees of SARS?”\nThe reply was published in March, a terrible month for a certain person, Pravin Gordhan: you might recall when he finally replied to 27 questions personally sent in February by Hawks head bully Mthandazo Ntlemeza. The written reply has only just surfaced in the real world but still leaves many unanswered questions and traces of unfinished nasty business.\nThe reply read: “The South African Revenue Service has submitted the following information. Please note that the Minister is unable to verify the content (code for, “You’ll have to take Com Tom’s word for it”) and then, “The cost incurred for the mandated work was; KPMG R23, 131, 265.30. The KPMG investigated the allegations made in respect of an investigative unit within the SARS.”\nGordhan’s reply continued that “an already existing panel was utilised for this purpose that was previously appointed through an open tender process in terms of paragraph 4.9 of the National Treasury Supply Chain Management – A guide for accounting officers/authorities – February 2004”.\nGordhan says SARS submitted that “the Terms of Reference of the mentioned company was to perform a forensic investigation based on the recommendations of the Sikhakhane report to institute a more detailed investigation and to provide evidential support to the findings made”.\nBut here’s the thing, who should we believe?\nWhile SARS clearly states that KPMG was contracted to perform a “forensic investigation”, KPMG CEO, Trevor Hoole, in a press statement released in January, contradicts this. In the statement Hoole says “our mandate was to undertake a documentary review and did not include interviewing individuals named in the report, nor were they given sight of our findings by us”.\nSo, if KPMG was not mandated to interview those individuals (or alleged suspects) named in the report it would not be illogical to ask why on earth SARS spent R23-million of public funds on a “report” that is, to all intents and purposes, useless and in some ways a mere repetition or replication of three other reports?\nThe report, which was delivered by KPMG auditor Johan van der Walt to SARS Commissioner Tom Moyane on 4 December 2015, contained an explicit disclaimer that it had not been prepared “for the resolution or disposition of any disputes or controversies thereto and is not to be disclosed, quoted or referenced, in whole or in part”.\nWhat then is its purpose? We still don’t know.\nAs it is, the version of the report that Daily Maverick has seen is not thick enough to use as a door stop, so essentially taxpayers paid for a blunt political instrument that is now being kept in a drawer in Moyane’s office, no doubt.\nThe SARS reply also does not reveal (and perhaps this is a question someone else in Parliament could ask) just how much additional public money was spent on SARS legal firm Mashiane, Moodley and Monama who essentially wrote a large chunk of the “recommendations” in the Executive Findings and Conclusions of what is supposed to be an independent KPMG report. (See: SARS Wars: KPMG report compromised by interference, undeclared conflicts of interest and press leaks in Daily Maverick.)\nDaily Maverick questions to SARS about the above have still not been answered.\nSARS has also not made public how much it paid Advocates Nadine Fourie and Martin van As, who assisted SARS investigators, under the guidance of KPMG, in another investigation prior to the draft/final December report.\nIt would be safe to assume that the actual amount SARS has spent chasing its own shadow is probably way more than R23-million, with little to show for it.\nSo far KMPG has managed to fly under the radar with regard to its involvement in this matter of national importance even though there are serious questions that have been asked (but not answered) around the firm’s obvious conflict of interest, that it also represents British American Tobacco (BAT) which is implicated in the entire “rogue unit” saga. (See SARS Wars, season two: How can we trust the KPMG report? in Daily Maverick)\nIn their submissions to SARS and the Sikhakane panel, former deputy commissioner Ivan Pillay and group executive Johann van Loggerenberg provided evidence implicating BAT UK (British American Tobacco), BAT SA and their attorney Belinda Walter in corruption and money-laundering, but the KPMG report into the “rogue unit”, Draft 3, completely ignores this and in fact does not even name BAT, while it names other firms.\nKPMG also failed, it appears, to inform SARS that in March 2015 it was appointed as auditors for BAT. The firm was working for two bosses at the same time while one boss should have been investigating the other.\nThe question that KPMG has not answered (and which Daily Maverick asked months ago) is whether it complied with the statutory provisions of the Poca (Prevention of Organised Crime Act), Fica (Financial Intelligence Centre Act) and PCCA (Prevention and Combatting of Corrupt Activities Act) in reporting corrupt practices and money-laundering to the Hawks and the FIC (Financial Intelligence Centre) and specifically under Section 34 of the PCCA in respect of Pretoria attorney Belinda Walter, British American Tobacco SA, British American Tobacco UK and her declared involvement with BAT UK and BAT SA.\nPerhaps it is time for the Independent Regulatory Board for Auditors (IRBA) to look into the matter, as no one else seems concerned about this apparent ethical breach.\nThe IRBA functions in terms of the Public Accountants’ and Auditors’ Act, 1991 and its members are appointed by the Minister of Finance. Its core mission, is “to protect the financial interests of the people of South Africa, and other stakeholders, through services rendered by registered accountants and auditors”.\nInvestigations can be initiated by any member of the public and perhaps this is a route that will bring to an end a saga that has dragged on for two years and has cost several people their reputations, jobs and livelihoods.\nEither Commissioner Tom Moyane must make public the KPMG report so the citizens of South Africa can see what truths it has uncovered, or he must be called to account for initiating the “investigation”/ “documentary review”, call it what you will, in the first place. Apart from the R23-million spend, the damage to the reputation of SARS may be just too great. DM", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2016-06-20-op-ed-time-to-release-kpmg-sars-rogue-unit-report/"}
{"doc_id": "6af71bc52a72bd220a949f6c0d30f401", "text": "A litre of petrol might in the coming weeks hit Sh200 if new tax proposals by the National Treasury sail through.\nTreasury has in the Finance Bill 2023 proposed an increase on the value-added tax (VAT) levied on petroleum products to the standard rate of 16 per cent from the current rate of eight per cent.\nThis is among the new tax measures that President William Ruto's administration has pinned its hopes on to grow tax revenues.\nOnce in place, the new taxes across different products and services including fuel are expected to generate an additional Sh289.3 billion.\nOil marketing companies, however, warn that this could see the price of super petrol increase to Sh200 per litre on July 1 should the 16 per cent VAT get the backing of MPs.\nThe Petroleum Outlets Association of Kenya (Poak) warned that this would be the wrong time to increase taxes on fuel.\nThe Kenyan economy, the lobby noted, heavily relies on petroleum whose cost is already at historical highs and pushed up the cost of living.\n\"This will cause an immediate rise in the cost of living, which is already very high,\" said Poak at a forum called on Thursday to give its views on the Bill.\n\"It should not be lost to all that the inflation of fuel prices has been the main cause of the rise of the cost of living.\n\"An additional tax on petroleum borders on immorality. This proposal would see Kenyans buy petrol at almost Sh200 per litre.\"\nInject capital\nOther than the cost to consumers, the association also noted that higher VAT would hit their businesses as it would require them to inject more capital.\nThis is at a time they are grappling with other challenges including high cost of acquiring products owing to the depreciation of the shilling and a general rise in operational costs.\nThe marketers also said they have been hit by the subsidy programme in which they would forego their margins at the pump to keep prices stable, but would later be compensated by the government, albeit at a slow pace.\n\"Now, the petroleum business operates under thin margins that are also regulated by the Energy and Petroleum Regulatory Authority,\" said Poak.\nStay informed. Subscribe to our newsletter", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001472783/petrol-price-could-hit-sh200-per-litre-oil-marketers-warn"}
{"doc_id": "f05d079af3cf1f05c5a48f53b95120a1", "text": "The former Eskom chief executive believes the answer lies in nuclear power\nIt is imperative that South Africa explore alternatives beyond privatisation\nThe Energy One Stop Shop and Energy Resilience Fund is aimed at cutting red tape and accelerating regulatory processes in renewable projects\nFinancial conditions are tight but demand for credit has remained robust in the face of interest rate hikes\nThe president has been burned before by his administration setting expectations too high. The past five years has put the country’s real prospects into focus\nChanges to the law and subsidies for solar, are steps in the right direction\nThe ANC’s economic transformation committee deputy chair said the party would have difficulty justifying why it should return to power if load-shedding continued\nThe majority of the relief comes in the form of incentives given to businesses and households investing in alternative energy\nBut widespread, destructive flooding does qualify as a disaster\nWith the country’s economy on the brink, the president assured the nation that ending load-shedding is his government’s top priority", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/?s=energy+crisis&submit="}
{"doc_id": "c7e995cc41244237852cb791931ebcab", "text": "Although the new administration is still in its infancy, the President has already pronounced himself boldly on the matter of small businesses. He is spot-on.\nAfter all, SMEs create 80 per cent of employment in Kenya. During his speech to the joint session of Parliament last Thursday, he said his government would allocate Sh50 billion every year to the Hustlers Fund for MSMEs.\nThere is no doubt that the Hustlers Fund, if well executed, can provide much-needed affordable credit for small businesses. Currently, such credit is virtually impossible to come across.\nThe Youth Enterprise Development Fund provides a business loan product that attracts a single-digit interest of 6 per cent.\nBut there is a catch - the loan can only be secured through conventional security, which is a challenge for many youth.\nBanks are worse. Some of the cheapest loan rates in the banking sector are at 13 per cent interest rate. This effectively knocks out many small businesses as they simply can't afford to service such high-interest loans.\nTo make matters worse for them, last Thursday the Central Bank of Kenya (CBK) raised the key lending rate from 7.50 to 8.25 per cent. This will likely lead to higher-interest bank loans, further marginalising small businesses.\nIn developed countries, affordable credit is often the norm, not the exception. Back in 2013, Britain's Sainsbury's Bank launched a personal loan rate of a mere 4.8 per cent for three years. Despite this low rate, customers were allowed to borrow up to Sh2 million! It would be amazing for small businesses in Kenya, wouldn't it?\nThe Hustlers fund seems intended to fill a gap currently not met by existing financial institutions. To ensure its success, transparency and accountability must be the norm. We must also be intentional in training to eradicate the culture of entitlement of free money.\nDirect partnerships between the government and renown manufacturers of tools of business that Kenyans regularly borrow to buy, may provide one of the possible fool-proof measures in Hustler Fund loan disbursements. In this bargain, the government in a well thought out arrangement that involves umbrella associations would directly pay manufacturers of popular products like motorbikes, posho mills, tillers and water pumps.\nUsing existing systems of recovery to reduce risk of default, the manufacturers would then supply the products of choice to Hustler fund loanees. Both parties will get value for money.\nIn addition, local manufacturing will be boosted, which will create more jobs for Kenyans. Further, this arrangement would save the fund from the high default rate that have plagued previous such funds.\nIn most businesses, it takes time for a Return on Investment (ROI) to be realised. It is therefore unrealistic to expect that small businesses will within weeks break even and afford paying back loans, however, low the interest may be.\nStay informed. Subscribe to our newsletter\nThe Hustler fund, therefore, ought to provide sufficient grace period before the loan repayment commences. Further to this and perhaps even more important, the government should consider enrolling select small business owners into business incubation programmes.\nThis is what green money entails - it tackles the bigger picture in a sustainable manner. Think green, act green!", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001457173/hustlers-fund-must-avoid-pitfalls-of-similar-well-intentioned-plans"}
{"doc_id": "dc110d3bd1f1243a72297f94573c6aba", "text": "If South Africa wants to enjoy sustained economic growth, we must address our woeful savings culture.\nThere are three contributors to national savings: households, companies and the government, but each saves for different reasons.\nHouseholds save to meet future expenses and for retirement, companies save after-tax profit for future expansion and the government needs surplus funds to meet its social and infrastructure commitments.\nIf we save too little as a nation we seriously undermine our ability to invest in infrastructure, such as roads, bridges, ports and power stations — the assets essential for long-term gross domestic product (GDP) growth.\nRight now South Africa Inc is struggling to maintain a gross savings- to-GDP ratio of just 15.4% and households, which are included in that figure, are guilty of not saving. If South Africa hopes to return to the savings and investment boom of the late 1960s and early 1970s, it has to encourage individuals to save. To this end, various organisations and companies in the domestic financial services industry dedicated July to instilling a savings culture.\nNational Savings Month is about educating individuals about the importance of saving and encouraging households to provide adequately for both short-term emergencies and long-term retirement needs.\n“At the individual or household level, saving has to do with risk management,” says Elias Masilela, a board member at the South African Savings Institute (Sasi). “Someone who is sufficiently ‘saved’ will be better prepared to deal with unforeseen circumstances than one who is not.”\nWilhelm Janse van Vuuren, a wealth manager at FNB Private Clients, agrees: “One of the most important reasons to save is to prevent your family from suffering financial hardship.” Short-term savings also make it easier to engage in financial transactions. “Someone who is cash flush tends to get a better deal than somebody with nothing to his name,” says Masilela.\nCash is a fantastic bargaining chip for big-ticket purchases such as motor vehicles and houses. The strict application of the National Credit Act, for example, means that banks now favour mortgage applications by prospective buyers with significant cash deposits.\n“We need to get the message across to people that the immediate, visible benefit of saving money is their own financial security,” says Leon Campher, chief executive of the Association of Savings and Investments SA (Asisa). ‘However, another crucial benefit of a strong household savings rate is a stronger economy, job creation and ultimately a lowering of interest rates and inflation.”\nOne of the most neglected aspects of personal financial planning is saving for retirement. The July 2010 Old Mutual Savings Monitor laments the lack of financial discipline, including the preference of employees to spend their retirement benefits when changing jobs. “This creates a time bomb of individuals who haven’t provided for their retirement,” it says.\nThe government has a number of incentives in place to encourage savers, including tax exemptions on the first R22 300 (R32 000 if you’re over 65) of interest income in the 2010-11 tax year and concessions for contributions to pension funds, provident funds and retirement annuities. But the financial services community is in two minds about whether these rebates are sufficient to encourage saving.\n“In the past eight to 10 years, the government has ‘returned’ approximately R8-billion per annum to individual taxpayers,” says Masilela. But that extra cash hasn’t found its way into savings accounts. Instead, we’ve seen a decline in household savings over the period.\nThe government has to go beyond incentives to encourage savings. “As the savings institute, we’re asking government to join us in various training and education exercises to change the savings mind-set of South Africans,” he says.\nEducation is of particular importance because of the shift from defined benefit retirement funds to defined contribution funds. In the past the employer was responsible for meeting stringent financial conditions to provide its pension fund members with a “salary for life”.\nNow this responsibility rests on the employee and to a lesser degree the trustees of the pension fund. Another area in which the government hopes to bolster saving among households is through the long overdue national social security system.\nThe financial services industry is behind any solution that will improve the social well-being of households, provided it is properly researched and sensibly implemented.\nA practical and flexible solution could run alongside the country’s already established retirement industry. “If we are forced [through regulation] to contribute a percentage of our income to a central retirement fund, it will definitely contribute to an improved savings pool,” says Janse van Vuuren.\nThe Old Mutual Savings Monitor reveals, particularly among lower-income groups, an expectation that children or the state will provide support for retirement. This persists despite the desperate plight of old-age-pension grant recipients. South Africa is already cracking under the pressure of paying 12-million welfare grants from the income taxes collected from just five million taxpayers.\nThis prompted economist Mike Schussler — during a postbudget speech at an event hosted by Absa and the South African Institute of Tax Practitioners earlier this year — to say: “Look at South Africa’s dependency ratio — there are three recipients to one taxpayer and it’s unsustainable.”\n“Another of the major problems is our high unemployment rate,” says Janse van Vuuren. There are far too many individuals who are unable to contribute to the national savings pool or provide much-needed revenue to the state.\nRian le Roux, chief economist at Old Mutual Investment Group SA, says: “The burden on future generations of taxpayers is going to go through the roof, especially if we combine the poor savings situation with the bizarre decision to lower retirement ages.\nWhile economies across Europe wrestle with hiking the official retirement age to 70 years, South Africa is forcing this target down from 65 years to 60. “Governments around the world are focused on reducing budget shortfalls and containing debt.”\nPeople worldwide are learning the hard way that governments aren’t going to be able to support them through their retirement. “People will have to care for themselves and this will likely require much higher savings during their working years,” Le Roux says. The plea from organisations such as Asisa and Sasi is for all South Africans to ‘save today and own tomorrow”.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/article/2010-07-23-save-now-and-secure-the-future/"}
{"doc_id": "c1a91ea84b1f1fadf29feaf5f99363a2", "text": "Robert Brand and Mike Cohen\nFIRMs funding R47 billion of local wind and solar energy projects are driving up prices to lock in long-term borrowing costs as they seek protection from fluctuating interest rates.\nPayments to secure 10-year rates jumped 69 basis points to a four-month high of 7.13 percent on Monday from a record low in July. The premium of 10-year swaps over two-year contracts widened 18 basis points since October, indicating that demand for the longer-term contracts outstripped shorter-dated swaps. The spread for similar contracts in Russia has declined 32 basis points.\nThe Department of Energy signed agreements for 28 renewable energy projects this week, opening the way for bank financing deals to be struck. Borrowers are using swaps to convert floating rates to fixed payments to reduce the risk of rising repayments should interest rates increase. Higher swap prices may boost hedging costs for other local companies.\n“The market is positioning itself ahead of the deals, which are expected to be done in the next week,” said Brigid Taylor of Nedbank investment banking. “You’ve seen a rally in the swap curve” amid speculation that as much as R12bn of swaps need to be hedged, she said.\nSouth Africa has embarked on a renewable energy drive to lessen the country’s reliance on coal as it boosts generation capacity to avoid a repeat of power outages in 2008 that shut mines and plants. Eskom’s generation capacity is 40 000 megawatts (MW), mostly from coal. Eskom supplies 95 percent of the nation’s power.\nThe nation plans to generate 18 800MW more electricity from alternative energy sources by 2030. Forty-seven projects worth R73bn were approved in the first two bidding rounds that began last year.\n“Most projects want to secure fixed interest rates,” Chris Hall of the SA Photovoltaic Industry Association said this week. “You want to try to bed down the cost as much as possible.” Hedging plans were being made by banks financing the projects, with the costs borne by developers, he added.\nMost firms use debt funding to cover 75 percent of costs of projects at rates of 350 basis points to 425 basis points more than the Johannesburg interbank agreed rate, data show.\nLoans to fund the projects, which stretch up to 15 years, were usually rated lower than asset-backed debt because of high risks with construction and delivery, Andrew Canter of Futuregrowth said last week.\nLenders “are forcing a minimum hedge from the project side”, pushing up swap rates relative to bond yields, he added.\nThe yield difference between 10-year swaps and government bonds of similar maturity had widened by 34 basis points since October 1 to 44 basis points on Monday. The swaps offer firms the opportunity to fix borrowing costs as investors reverse bets on further rate cuts.\nReserve Bank governor Gill Marcus said last week that investors should not assume that policymakers would “automatically” cut rates again to spur economic growth. The central bank’s primary responsibility was to control inflation.\nThe cost of insuring South African dollar debt over five years using credit-default swaps rose 1 basis point to 154 yesterday, indicating a deterioration in risk perceptions. The credit default swaps have climbed 27 points since mining strikes began at Lonmin on August 10, before spreading to other platinum mines and gold and iron ore plants. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower breaks debt deals.\nThe renewable energy projects were “brilliant long-term savings assets in that they have a natural inflation hedge”, Jurie Swart of Old Mutual Investment Group said this week.\nThe tariffs that plant owners are paid for their electricity would probably escalate by inflation-related levels, offering protection, he added.\nSwap rates will probably continue to rise as the energy deals are closed.\n“You’re going to see increased flow” in the swap market on the back of the energy deals, Quinten Bertenshaw of ETM Analytics said on Monday. “It definitely is going to increase the cost of corporate hedging if these swaps move up too aggressively.” – Bloomberg", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/clean-energy-derby-stokes-hedging-costs-1418702"}
{"doc_id": "2bd925c8f854ba8d964dc0ba1bc3b9e2", "text": "Kenya risks losing funding from the Global Fund due to poor accountability and suspected quality in HIV testing, condoms and medicines.\nAn audit report by the Office of the Auditor General of Global Fund covering 2016 and 2017 tells of massive irregular payment to workers and project activities.\nMost worrying, the report says, up to a quarter of healthworkers are not following the required HIV testing procedures. This could mean a significant number of Kenyans may be getting false HIV results.\n“About 24 per cent of the 21 facilities visited do not consistently follow the national standardised HIV testing procedures or algorithms,” says the audit report published in November.\nNot tested for quality\nThe auditors found none of the testers had attended the annual refresher course as required and no supervision was being done.\nThe auditors found condoms worth ($6 million) Sh600 million procured by the Kenya Medical Supplies Authority (Kemsa) had not been tested for quality at the National Quality Control Laboratory as required.\nThey also report finding medicines worth ($3.8 million) Sh380 million stored by Kemsa in leaking warehouses along Commercial Street in Industrial Area.\nThe storage facilities at Commercial Street, the report says are sub-optimal: ‘the roof leaks and the warehouse floods during the rainy season.’\n“At the time of the audit, Global Fund commodities worth ($3.8 million) Sh380 million were stored in these sub-optimal conditions.”\nThis is despite Global Fund having allocated ($9.5 million) Sh950 million in 2016 for construction of a new warehouse which had not commenced by June 2018.\nThe auditors say they could not reconcile stocks worth ($1.9 million) Sh190 million at Kemsa because some of the expired medicines had been destroyed without adequate records.\nFor instance, the report says some destruction certificates issued only indicated that assorted items were destroyed without detailing the name of the medicines, quantities or the donor.\n“Kenya thus risks losing funds in line with Global Fund guidelines,” warns the audit.\nKenya Red Cross Society also a recipient of substantial funding from Global Fund is reported to be procuring defective needles and syringes worth ($470,000) Sh47 million.\nThe report says appropriate quality assurance had not been carried out before the devices were distributed to users.\n“The users reported defects and the devices had to be withdrawn,” says the report which has been shared with government.\nGlobal Fund, Kenya Government and other stakeholders, the report says have agreed on a course of actions to be implemented by December 2019 otherwise Kenya risks losing substantial funding.\nThe audit also unearthed cases where several donors are unknowingly funding the same project through the same implementor and getting the same reports.\nThere was also a case where Global Fund and another donor were unknowingly paying the same Community HealthVolunteers to perform the same activities and reported the same results to the different partners.\n“Further, over 400 community health workers receive multiple payments at different rates for the same activities under different Global Fund grants,” says the report.\nThe audit report also tells of another instance where the fund and another two donors are financing same 26 implementors for same work in same area.\nThe auditors also expressed disappointment with Kenya’s efforts in controlling tuberculosis (TB) having missed set targets for three years.\nThe auditors say although the fund has supported the procurement and roll out of GeneXpert machines for TB diagnosis less than half of their capacity is being utilised.\nThis, the report says is due to poor maintenance of machines and lack of diagnostic cartridges. Forty seven per cent of the machines were not functioning when the auditors visited hosting facilities.\n“In addition, the cartridges required by the machines were not consistently available in 18 of the 21 facilities visited by the auditors.”\nThough Global Fund had helped the country acquire additional 30 GeneXpert machines in mid-2017 these had not been installed a year later in 2018. In many cases the report found some machines, which require uninterruptible power supply had been delivered to facilities without power.\nOut of four performance indicators the audit shows Kenya to have performed poorly. Apart from procurement of medical commodities, Kenya scored poorly in quality and service delivery, governance and oversight within devolution and grant performance.\nThe national government is also blamed for poor funds absorption and programme delays of upto eight months. Because of these delays the report warns that Kenya risks losing some grants from Global Fund. In 2015 and 2016 the report shows about Sh1.8 billion was returned to the Treasury due to non utilisation despite funding gaps, says the report.\nSince 2003 Global Fund has signed over (S$1.4 billion) about Sh140 billion for Kenya and so far disbursed ($1 billion) Sh100 billion including an active grant for up to June 2021.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/health/reproductive-health/article/2001309972/health-workers-may-be-giving-you-false-hivaids-results"}
{"doc_id": "b3d958c82c2605f65601c7f3dca8260f", "text": "SABC’s Motsoeneng ‘lied’ his way to the top (Techcentral)\nIt appears the scenes similar to our own Salarygate at ZBC are playing out at South African state broadcaster SABC. This time, SABC COO Hlaudi Mostoeneng is accused of lying about his qualifications which not only brought him to the top, but also “qualified” him for a hefty salary increase. Apparently Mostoeneng does not have a Metric certificate and there are no details whether he has any other legit qualifications.\nChina’s Mobile payments turnover reached $1.59 trillion in 2013 (TechNode)\nThe staggering figures released by the People Bank of China show that China’s mobile payments sector is growing at an unprecedented rate. The $1.59 trillion turnover represents a 317% year on year increase in 2013. If we can use these figures to speculate, there is no doubt that mobile payments services represent the future of payments, a future that’s not far off now.\nBitcoin for idiots: An introductory guide (VentureBeat)\nIf you are like most people out there, then this guide will help you understand what Bitcoins are and how they work. The crypto-currency has been a bit shaky falling and rising at will but the general view is that it’s hear to stay. Recently, one of the biggest banks in Africa, Standard Charted started testing a portal for trading in this internet currency in South Africa. So Bitcoin is no longer far from our borders now and this guide will help you understand it better.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2014/02/regional-global-round-mobile-payments-soar-china-sabc-boss-trouble/"}
{"doc_id": "9f232b5f1f7cbbcc2f5447f306e8298b", "text": "Global North\n23 Jun 2023\nWith four African countries at the bottom of the ranking of progress towards key development indicators, we speak to South Africa's international affairs minister about her hopes for a crucial Paris summit aimed at ushering in a new financial world order. Also, Ghanaians tell us about daily life amidst an economic crisis and Sierra Leone is days away from electing its next president.\nLatest\n6 hours ago\nAides to the late Russian opposition leader Alexei Navalny say Moscow has set an ultimatum for his mother to agree to a secret funeral. Russian authorities have threatened to bury him in the penal colony where he died. Vladimir Ashurkov, Executive Director of the Anti-Corruption Foundation, and close friend of Alexei Navalny talked to DW about the circumstances of Navalny’s life and death.\n6 hours ago\nRussian President Vladimir Putin needs to ensure his country remains in a permanent state of war. That's the premise of a new book, published by a French political scientist as the world has been marking the second anniversary of Russia's full-scale invasion of Ukraine.\n6 hours ago\nRussian President Vladimir Putin has claimed that Western weapons deliveries to Ukraine have ended up in the hands of Hamas and other terror groups in the Middle East. Russian television has been quick to exploit the Israel-Hamas conflict for propaganda purposes.\n7 hours ago\nWhy \"Gone with the Wind\" made movie history, \"Asphalt Cowboy\" exorcised prudery from Hollywood and Bong Joon-ho's \"Parasite\" catapulted the Oscars into the 21st century. Arts Unveiled journeys through nine decades of the Academy Awards.\n7 hours ago\nProtesters in Argentina have demanded that President Javier Milei scrap the reforms, arguing that they will only benefit the wealthy. The reform bill contains hundreds of articles including privatization and cutting state subsidies.\n8 hours ago\nSince February 24, 2022, Russia's full-scale invasion has had a huge impact on Ukraine, but also the European Union. To tackle inflation and other economic consequences, the EU has taken measures to try to shield its inhabitants from the cost-of-living crisis. We take a closer look.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/global-north/"}
{"doc_id": "53442a9b6bcb69e47db99609c9269b0c", "text": "Confidence amongst South African business leaders remains incredibly low amid the challenging economic environment, which is likely to translate to slow economic growth and further strain on the economy for the remainder of the year.\nThe RMB/BER Business Confidence Index (BCI) dropped by two points to 31 in Q4 2023, meaning less than a third of respondents were happy with the overall business conditions.\nAlthough there was a 15-point rise in retail confidence, it was outweighed by a major 24-point drop in the confidence of new vehicle dealers, pushing the overall index down.\n“The business environment remained difficult in the fourth quarter, as business conditions deteriorated against expectations. In addition, activity ticked down somewhat despite an ease in load shedding relative to the third quarter,” the RMB said.\n“Sluggish demand means that there is likely increased pressure on turnover and profitability, with purchasing prices reaccelerating but selling prices slowing for a fourth consecutive quarter.”\n“While this is good news for the consumer as it may translate into lower consumer price inflation, this would have weighed on the confidence of businesspeople as they struggle to pass on higher input costs.”\nFollowing the 24-point drop amongst new vehicle dealers, confidence declined to just 6 index points – the lowest level since Q2 2020 when the Covid-19 lockdown kickstarted.\nThe sector is struggling due to the weak local demand caused by high borrowing costs, with traders reporting high inventory levels.\nWholesale was the only other sector to report a decline in confidence – falling from 38 to 36 index points – as sales volumes continued to drop.\nConfidence among building contractors was unchanged at 41 in Q4, following a two-point drop in Q3.\n“The activity indicator suggests that the growth momentum is still going, albeit somewhat slower compared to the last few quarters. There is a risk that confidence in the residential sector could fade in coming quarters as high borrowing costs hurt demand in the residential property sector,” RMB said.\nMore positively, manufacturing business confidence increased to 26 index points. Nevertheless, this was subdued compared to other sectors, even if it was the highest level this year, following 19 points in the first three quarters.\n“The increase was supported by an improvement in domestic and particularly export demand, as well as higher production volumes amid less frequent and less intense load-shedding,” RMB said.\n“Manufacturers remain pessimistic about business conditions going forward and scaled back investment outlays further.”\nFollowing declines in Q1 and Q32, the retail sector’s 15-point surge in Q4 has made it end the year at 47 index points – the average reading in 2022.\n“However, the underlying survey results warrant some caution as overall sales volumes slowed, with the non-durable retailers reporting the steepest decline. Some non-durable goods have seen steep price increases of late, which tends to depress volume growth,” RMB said.\nWhat this means\nSouth Africa’s Real GDP is expected to slow in Q3, and the low confidence amongst businesses in Q4 does not indicate a significant reacceleration in momentum.\nBesides poor activity growth, the business environment remained challenging, and trading conditions did not improve as respondents had initially hoped for.\nRespondents noted the nation’s logistical challenges – port delays to potholes – with crime and corruption remaining key issues. Others said that they struggled to receive payment for goods delivered, which has knock-on effects on the whole production process.\n“Structural supply constraints around infrastructure and electricity remain a key challenge to operating in\nthe South African business environment,” said Isaah Mhlanga, Chief Economist and Head of Research at RMB.\n“However, the decline in the RMB/BER Business Confidence Index also reflects underlying demand weakness. The best example being the depressing outcomes for the interest-rate-sensitive new vehicle dealers this quarter, but local sales volumes remained sluggish across the board”.\nIf there is no pickup in demand, production growth is unlikely to accelerate, which is required to stimulate (non-energy) investment and employment growth.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/732573/storm-clouds-gather-for-south-africa-3/"}
{"doc_id": "6da7080db4cb21fe830be36f8784f68e", "text": "There was never going to be a Cabinet announcement in the press conference after the ANC’s national executive committee meeting on Sunday – President Cyril Ramaphosa is much too aware of the separation between party and state to allow that. But the party’s latest deployments give a clue as to the shake-up Ramaphosa is expected to announce this week. One surprise is that it puts National Assembly Speaker Baleka Mbete right in line to become deputy president – or will it be ANC deputy president David Mabuza? By CARIEN DU PLESSIS.\nAs the weekend started, a speculative story appeared on the Mail & Guardian website regarding who would be given which tasks in the ANC’s national executive committee.\nThere’s some comfort in the fact that much of the story was true, at least as far as some of the positions within the party are concerned. This shows a measure of predictability could be returning to political appointments in the ANC (at least for now), which points to consultation taking place, as well as the fact that we’ll be spared the surprises of the relatively obscure executive appointments of the Jacob Zuma years. Think Des van Rooyen, David Mahlobo, Bongani Bongo, Mosebenzi Zwane.\nANC insiders reckon President Cyril Ramaphosa will delay the reshuffle (of a Cabinet slimmed down from 35 portfolios to a rumoured 25) until just after Wednesday’s Cabinet meeting, to give ministers a chance to say goodbye. This will also show that he’s measured, and careful not to humiliate anyone.\nOf course, this information could also be wrong, as many insiders expected Ramaphosa to do the reshuffle a weekend ago already, shortly after he took over as Number One, and then the expectations were moved forward to Thursday, to allow Malusi Gigaba to deliver at least one Budget Speech as finance minister. If Ramaphosa wishes to get on with the business of government, however, he probably knowa that he needs to shuffle sooner rather than later, at least so that the ANC would have something to show to lure the urbanites and middle classes back to the polls in next year’s general elections.\nThe Mail & Guardian speculated that former KwaZulu-Natal premier Senzo Mchunu – him who lost out to ANC secretary general Ace Magashule in December by two dozen votes – was pushed by Ramaphosa’s supporters to head the party’s organising and campaigns, while Dakota Legoete, North West provincial secretary but elected as NEC member in December, was Magashule’s first choice.\nAs it happened, they both got it and will be working full-time from Magashule’s office to ensure that the ANC win the elections – Mchunu as chairperson and Legoete as deputy chair (this division of roles wasn’t clear in Magashule’s rendition during the press conference on Sunday, but is reflected on the party’s statement).\nThis rules them out from possible Cabinet positions (Mchunu has featured on a number of speculative lists) because they would be working at the ANC’s Luthuli House headquarters full time. This is also in line with a conference resolution (resolutions are expected to be released formally soon as the NEC had to do some “language” checks first) that there should be a limit on the number of NEC members who also serve in Cabinet – and that the party should have more full-time staff. Magashule said 50% maximum, which is revised down from the 65% the policy discussion document from last year prescribed.\nAnother correct prediction was the deployment of former party spokesperson Zizi Kodwa into the office of the ANC president. He was there about a decade before, when he still had enthusiasm for former president Jacob Zuma. Counter to the prediction that ANC presidential wannabe Nkosazana Dlamini-Zuma would be responsible for monitoring and evaluation, Kodwa himself is responsible for this.\nMagashule told journalists in Sunday evening’s press conference, straight after the NEC meeting, that Kodwa was in charge because “we decided we need to be evaluating the resolutions of congress, we need to be monitoring cadres and service delivery, making sure that all of us will be working together to deliver quality services”.\nThis is a different position to the monitoring and evaluation portfolio in Cabinet, which is government- rather than party-focused.\nDlamini-Zuma will be heading the party’s education, health, science and technology subcommittee, which may put her in line for a Cabinet position in one of these fields – or this is a way of freeing her up to do something altogether different.\nLooking at National Assembly Speaker Baleka Mbete’s deployment, reports about Dlamini-Zuma not getting the deputy presidency are likely to prove correct.\nAfter a weekend of frantic speculation that Mpumalanga premier and ANC deputy president David Mabuza is the latest in line for the deputy presidency – confidential sources would even have it that he was put on Mpumalanga’s list to Parliament to be sworn in as soon as possible this week – Mbete was the one named to head the party’s political committee.\nAs Speaker, who isn’t supposed to get too involved in party politics, it would be slightly unusual for her to occupy this position, but also not impossible. Ramaphosa was chair of this committee when he was deputy president, and the brief of this committee, according to the ANC’s parliamentary caucus website is to be “responsible for the overall political guidance” of the party caucus and the office of the chief whip. Could it therefore be that Mbete, who was the first to congratulate Ramaphosa with effusive kisses on his election as president in Parliament 11 days ago, will be deputy president again, like she was in former (caretaker) president Kgalema Motlanthe’s Cabinet? Or will she continue to straddle between party and Parliament, as she did formerly as ANC chairperson?\nOr is Mabuza’s appointment as head of the deployment committee, an important position also previously occupied by Ramaphosa, an indication that he will, in fact, be the one to be announced deputy president this week?\n(And with Zuma loyalist and party deputy secretary general Jessie Duarte as the co-ordinator of the deployment, WHAT was Ramaphosa thinking?)\nThere is an argument that Mabuza should only move into the country’s deputy presidency after next year’s general elections to allow him a chance to wrap up his provincial work and get settled in as ANC deputy president. Many in the party are also, however, saying that it would only be correct for the party’s deputy president to be the country’s deputy president. Appointing Mabuza would, however, reflect really badly on Ramaphosa’s commitment to the gender issue, and Dlamini-Zuma’s campaigners would wag their fingers at him and say “we told you so”.\nA possible solution suggested on a Cabinet lobbying list that’s been doing the rounds this weekend, is to have two deputy presidents to settle this issue. The Constitution in its current form, however, only suggests one deputy president, and changing this would require a two-thirds majority vote in Parliament and an amendment act, which could take a while.\nOne of the notable absences from these deployments is ANC chairperson Gwede Mantashe, who was previously rumoured to be wanting to go to the National Assembly as Speaker – or who might just have decided that living on his farm in the Eastern Cape is what he wants to do full-time after all.\nThe full list of the ANC’s new appointments is below. Being chairperson of a committee may or may not indicate that that NEC member is destined for a ministry, as these in the past have sometimes but not necessarily corresponded to ministries (international relations, for example, generally always has a different head in the party than in government because the party’s activism is not always in line with the diplomacy required in a ministerial portfolio).\nDeployment Committee: David Mabuza (chair), Jessie Duarte (co-ordinator)\nDrafting Committee: Barbara Creecy\nConstitutional and Legal Affairs: Zweli Mkhize\nInformation & Publicity: Nkenke Kekana\nEducation, Health, Science & Technology: Nkosazana Dlamini-Zuma (there wasn’t previously a committee for science and technology, so this might point to this portfolio perhaps being merged with higher education on the Cabinet, as has been suggested)\nEconomic Transformation: Enoch Godongwana\nInternational Relations: Lindiwe Zulu\nNational Disciplinary Committee: Edna Molewa\nNational Disciplinary Committee of Appeal: Nomvula Mokonyane\nOrganising & Campaigns: Senzo Mchunu (chair) Dakota Legoete (deputy chair)\nNational Elections Committee: Fikile Mbalula\nPolitical Education: Nathi Mthethwa (chair) David Masondo (deputy chair)\nPeace & Stability: Tony Yengeni\nSocial Transformation: Lindiwe Sisulu\nArchives Committee: Baleka Mbete (she previously headed this in her position as party chair, and seems to have retained this despite not being in the top six anymore)\nPolicy Monitoring & Evaluation: Jeff Radebe\nCultural & Religious Affairs: Mathole Motshekga\nLegislature & Governance: Phumulo Masualle\nNational Dispute Resolution Committee (new): Jessie Duarte\nGender & Equity: Thandi Modise\nPolitical Committee: Baleka Mbete\nThe following NEC members will convene deployees to provinces:\nEastern Cape: Hlengiwe Mkhize\nFree State: Siyabonga Cwele\nGauteng: Joe Maswanganyi\nKwaZulu-Natal: Nocawe Mafu\nLimpopo: Thoko Didiza\nMpumalanga: Gwen Ramokgopa\nNorthern Cape: Collen Maine\nNorth West: Obed Bapela\nWestern Cape: Bheki Cele DM\nPhoto: David Mabuza and Cyril Ramaphosa exchange congratulations after being voted deputy president and President of the ANC at Nasrec, 18 December 2017. (Daily Maverick photo)", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2018-02-25-analysis-cabinet-shake-up-predictions-intensify-with-both-mabuza-and-mbete-a-shoo-in-for-deputy-presidency/"}
{"doc_id": "c1ab68de37df7a01d21073a2fd51cb6e", "text": "Ugo Aliogo\nBusiness leaders have been urged to build trust-based processes across their systems in order to thrive in the post-COVID-19 economy.\nThe advice was given yesterday in a statement by the Chief Executive Officer, VerifyMe Nigeria, Esigie Aguele, against the background of instability and risks confronting businesses as they adapt to the realities of a pandemic driven environment.\nAccording to Aguele: “Trust is the new currency of business in the post-COVID-19 era and it has become increasingly clear that it is a major economic driver that enables faster and more cost-effective transactions. This makes it imperative for businesses to consciously invest in processes and systems that establish trust in every action, relationship and transaction.”\nHe also stated that trust would enable businesses attract the right kind of partners in order to achieve their goals.\nHe noted that it would be a grave mistake for organisations to continue to view trust from the lens of a token social virtue.\nAccording to him, “In the past few weeks, Nigeria has seen most businesses adapt their processes to work remotely in response to the repeated lockdowns. As this becomes the new normal, identity authentication and fraud solutions must become the competitive differentiator for organisations if users are to put their faith and money in them.\n“In financial service industries such as banking, insurance and credit-lending institutions, businesses have statutory and reputational-risk mandates to ensure that new customers are adequately vetted during onboarding. They need to verify that customer’s match who they claim to be even without physical interaction.”\nAguele further remarked that establishing a digital identity and Know-Your-Customer (KYC) infrastructure would help organisations within the sector protect their ecosystems as they grapple with the expected increase in demand for their services, especially with approving customers for loans and other forms of credit.\nHe maintained that organisations can balance customer needs while reducing risks and maintaining regulatory standards.\nAguele said: “Most customers are frustrated by lengthy and cumbersome onboarding processes which affect their trust in a company even before the relationship has started. However, businesses are also concerned about fraud prevention and regulatory compliance. For most organisations, digital identity verification offers a solution to this problem.\nThe statement affirmed that digital ID solutions offered by the group allow businesses to create simple and streamlined onboarding experiences for trusted KYC data through API for corporates and an online portal for individuals.\nContinuing, Aguele added: “With Anti-Money Laundering (AML) and the Central Bank of Nigeria (CBN) Tier III compliance, VerifyMe’s products give decision-makers the tools to assess customer suitability for financial and other services.\n“With over 1,000 corporate organisations, including banks and government agencies, currently using VerifyMe products, the company has emerged as a leading technology company pioneering innovative and secure ID solutions in the African market. VerifyMe’s ID verification capabilities leverage the most trusted databases such as the Nigerian Identity Management Commission (NIMC), Bank Verification Number (BVN) and Drivers’ License verification.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2020/06/16/trust-would-be-vital-for-business-recovery"}
{"doc_id": "a5695229e31395de9e699442bf8f13eb", "text": "Director of the Faculty of Academic Affairs and Research at the Kofi Annan International Peacekeeping Training Centre (KAIPTC) has likened corruption to a glue that binds the country together.\nProf. Emmanuel Kwesi Aning said without corruption, the \"edifice called Ghana Enterprise will collapse.\"\nHis comment comes after the Ghana Statistical Service (GSS) unearthed the extent of corruption in the country in its latest survey.\nTitled ‘2021 Ghana Integrity of Public Services Survey’, GSS revealed that Ghana lost ¢5 billion in cash through the payment of bribes to both private and public officials in 2021 in order to access basic services.\nThe latest report also indicated that 26.7% of public sector officials were engaged in bribery acts, whilst 9.1% were officials from the private sector.\nAlthough Prof Aning said he is not surprised by the findings, he decried the extent of the canker.\nSpeaking on JoyNews’ Newsfile on Saturday, the security analyst noted that corruption creates a serious threat to national security.\n\"And I think the critical aspect is that this is a problem; we’ve quantified it and we have brought it and we’ve brought it down to developmental terms. How many schools, roads, clinics can we build with this money.\n“Also the fact that, this cuts across different shades of individuals and institutions. So yes, Corruption creates insecurity and creates a sense of social injustice. It creates inequality in societies,\" he noted.\nProf Aning further commended the Statistical Service for providing such a scientific data for reference as far as graft is concerned.\n“I think this report quantifies in a very practical commonsensical manner what corruption means and what bribery means. The extent of the problem, the category or categories of individuals and institutions involved.\n“So for me, this is one of the few times that a state agent is bold enough to scientifically prove this allegation that people have been engaging in,” he noted.\nPrevalence of bribery in Ghana\nThe report also showed that the prevalence of bribery in Ghana is 26.7%, meaning one out of four people who had contact with a public official in the 12 months prior to the survey, had been asked to pay a bribe by a public official, or asked to pay bribe but refused to do so.\nThe report also showed that the prevalence of bribery in Ghana is 26.7%, meaning one out of four people who had contact with a public official in the 12 months prior to the survey, had been asked to pay a bribe by a public official, or asked to pay bribe but refused to do so.\nThe survey revealed that, on average, there is no difference in the prevalence of bribery in rural and urban areas of Ghana. There are, however, sizable variations across the 16 regions of the country.\nOn regional basis, the prevalence of bribery in the Bono East, Savannah and Volta regions, for example, were substantially lower than the national rate. The three regions recorded corruption cases of 11.8%, 14.5% and 19.1% respectively.\nIn the Western North, Ahafo and North East regions, the corrupt cases reported were substantially higher, at 53.4%, 47.0% and 41.9% respectively.\nLatest Stories\n-\nToday’s front pages: Friday, February 23, 2024\n-\nKPMG to submit its audit report of GRA/SML contract today\n-\nIt’s incorrect to say we’re playing soft with Sentuo Oil Refinery – NPA replies IES, COPEC\n-\n9 awkward but completely normal things that happen during sex\n-\nSexy gift ideas for her any time of the year\n-\n4 fun & simple ways to upgrade your date night\n-\nOnion Sellers Association allays fears of price hikes\n-\nBanking sector clean-up served as a shock absorber during Covid-19, economic crisis – John Awuah\n-\nNorth Tongu Assembly members fail to elect PM after 4th attempt; DCE fumes\n-\nDigital industry players must shape digital landscape in Africa – Minister\n-\nAssociation of Sports Betting Operators presents learning materials to 939 pupils in flood-affected communities\n-\nMan, 30, dies in alleged attempt to steal ECG cables\n-\nAklakpanu bridge will be reconstructed to boost economic growth – North Tongu DCE assures\n-\nAwutu Senya West Assembly members reject President’s nominee\n-\nConsider the use of local rice for school feeding – Rice farmers", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/corruption-is-the-glue-that-binds-this-country-together-kwesi-aning-decries-impunity/"}
{"doc_id": "4ba8b5cea8b313e99740dd2ddd58d4cc", "text": "International advocacy organisation Global Citizen has announced more artists are set to participate in the 10th anniversary Global Citizen Festival.\nThe organisers announced that award-winning actor known for her iconic Black Panther role, playwright and activist Danai Gurira is expected to host Global Citizen Festival: Accra.\nAlso, South African DJ Uncle Waffles will join the lineup of performers at Global Citizen Festival: Accra.\nMeanwhile, joining Miss Gurira as presenters is Ghanaian personalities Berla Mundi and Joselyn Dumas, Bristish actress Michaela Coel, South African actress Nomzamo Mbatha, and the wife of actor Idris Elba Sabrina Dhowre Elba.\nPerforming for the first time in Ghana at the festival is RnB legend Usher Raymond joined by singer/songwriter SZA, Grammy award-winning artiste H.E.R and Nigeria’s Tems.\nAlso joining the lineup is Ghanaian rapper Sarkodie, Reggae/Dancehall artiste Stoenwboy, English rapper Stormzy, and musician Gyakie.\nThe 2022 Global Festival is taking place on Saturday, September 24, 2022, at Black Star Square in Accra, Ghana, presented by Harith General Partners and in New York City’s Central Park, presented by Citi and Cisco simultaneously.\nAngélique Kidjo and Billy Porter will join the lineup of performers at Global Citizen Festival: NYC, with Amber Ruffin, Antoni Porowski, Bill Nye, Chris Redd, Connie Britton, Jay Shetty, Katie Holmes, Misty Copeland, Rachel Brosnahan, Scott Evans, Tamron Hall, and Van Jones also joining as presenters.\nThey join previously announced performers, including Metallica, Charlie Puth, Jonas Brothers, MÅNESKIN, Mariah Carey, Mickey Guyton, and Rosalía in New York City, Usher, SZA, Stormzy, Gyakie, Sarkodie, Stonebwoy, and TEMS in Accra.\nAdditionally, activists including recipients of the 2022 Global Citizen Prize will take the stage alongside other international changemakers to inspire urgent action from the festival audience.\nKhanyisile Motsa and ‘Yemi Adamolekun will participate in Accra’s Black Star Square.\nAnuscheh Amir-Khalili, Barbie Izquierdo, Brianna Fruean, Mitzy Cortés, Payzee Mahmod, and the 2022 Cisco Youth Leadership Award winner Nidhi Pant will address Central Park’s Great Lawn in line with Global Citizen’s commitment to elevate the voices and challenges faced by those on the front lines of activism around the world.\nThe 2022 Global Citizen Festival will be broadcast and streamed worldwide on TimesLive in Africa, YouTube, Twitter, Amazon Music, the Amazon Music channel on Twitch, and Apple Music.\nTickets to the festivals can be earned by downloading the Global Citizen app or visiting www.globalcitizen.org to take action on the campaign’s issues. For each action taken, users earn points that can be redeemed for tickets to the festivals.\nMeanwhile, reacting to the news, Mayor of Accra, Elizabeth Kwatsoe Tawiah Sackey said \"as the first female Mayor of the City of Accra, after one hundred and twenty-four years of a male-dominated office, it is a pleasure to be hosting the Global Citizen Festival – a spectacular event that will bring together incredible artists, world leaders, and everyday citizens to help empower girls and women, defend the planet and create lasting, positive change.\"\n\"The City of Accra is excited to join millions of global citizens around the world, and the President of Ghana, to add our voices to address these world issues and take action to alleviate poverty. We are committed to empowering women and girls through various initiatives and working endlessly to mitigate the impacts of climate change, which disproportionately affect women and have severe implications for the city’s essential services, infrastructure, housing, health and human livelihoods.\"\n\"We are dedicated to this fight and to forging a climate-resilient path towards a significant reduction in greenhouse gas emissions, achieving climate resilience and carbon neutrality by 2050. We believe this is our only pathway to create a more inclusive society, improving quality of life, creating green jobs, address inequalities, and safeguard and empower marginalized communities. Together, we can all make an impact. See you on September 24th.”\nAlso, artiste and singer/songwriter Angélique Kidjo stated that she was proud to join Global Citizen to send a message to leaders and governments to listen to the next generation.\n“The future of the continent of Africa, and indeed the planet, depends on the empowerment of women and girls. The young women and girls of Africa are not silent – they deserve to be heard. It's time for the world to take notice,\" she said.\nKatie Hill, SVP, Head of Music, Entertainment & Artist Relations, Global Citizen said \"the impact the Global Citizen movement has had on the most pressing issues facing humanity over the last 10 years would not be possible without the ongoing support of the world’s biggest artists and entertainers.\"\n\"Seeing artists including Usher, Metallica, Danai Gurira, Priyanka Chopra Jonas, Billy Porter and Rachel Brosnahan returning to the Global Citizen stage and continuing to use their platforms and energy to drive impact for the mission to end extreme poverty is truly inspiring,\" she added.\nAgain, actor Billy Porter noted that it has been an extraordinary privilege to work with Global Citizen over the past few years.\n\"I want to keep changing the world in as many ways as I can, and this year we’re taking it to the next level. It’s been. I’m so excited to be joining the incredible lineup performing in Central Park for the festival’s 10th anniversary,\" he noted.\nGlobal Citizen is calling on world leaders gathered at the United Nations General Assembly, as well as major corporations and philanthropic foundations, to take to the Global Citizen Festival stages and announce new commitments to End Extreme Poverty NOW, including: investing $600 million into the future of women and girls; closing the annual $10 billion climate financing shortfall; delivering $500 million to help African farmers respond to the global food crisis; and reallocating IMF Special Drawing Rights to provide urgent economic support, while explicitly acknowledging that sustainable change is only possible with the people and activists who advocate for change on the ground, who should never have to risk their lives because of doing so.\nLatest Stories\n-\nI bet Bawumia will choose Opoku Prempeh as his running mate – Ben Ephson\n-\nFinance Ministry fears losing $3.8bn in World Bank financing if Anti-LGBTQ+ bill becomes law\n-\nRainstorm destroys VIP stands of Sunyani Coronation Park\n-\nGovernment borrowed GH¢24bn via T-bills in February 2024\n-\nEdna Obiri: Unraveling the threads of unseasonable warmth: A climate wake-up call\n-\nAnti-LGBTQ+ Bill: Akufo-Addo won’t assent – Security Analyst\n-\nNollywood grieves as Kate Henshaw mourns loss of mother\n-\nInflation to inch up to 23.9% in February 2024 – Report\n-\nI was shocked – Former Oti Regional Minister speaks after reshuffle\n-\nDon’t assent to Anti-LGBTQ+ Bill – Finance Ministry tells Akufo-Addo\n-\nTributes pour in for Nollywood star Mr Ibu\n-\nGhana at 67: Centre seems to be shattering, breaking hearts and minds\n-\nCanon to spotlight sustainability champions at Global Good Awards 2024\n-\nGulf Cooperation Council countries reaffirm unwavering support for Morocco’s sovereignty over Sahara\n-\nBaba Rahman scores for PAOK in Greece Super League win against Lamia", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/danai-gurira-to-host-global-citizen-festival-in-accra/"}
{"doc_id": "2da6c242510a0f41950c1a5b55a03af7", "text": "The Chief Executive Officer of Pan African Towers Limited, an indigenous infrastructure company, Mr. Wole Abu, speaks about the need for government to support additional deployment of telecoms masts and towers, to bridge Nigeria’s infrastructure gap and enhance access to telecoms services in underserved communities. Emma Okonji presents the excerpts:\nWhat’s your general assessment of the infrastructure segment of the African telecoms market, where you currently operate?\nThe infrastructure segment of the African telecoms market has actually seen a lot of growth since the entrance of major players at the global level into Africa around 2012. From then, infrastructure and tower deals have grown year on year. Also, it is beginning to see cloud and fibre deployment at an increasing rate in Africa. So, infrastructure for telecommunication is growing and this is being driven by demand. In terms of adequacy, off course, there is still a demand-supply gap. Infrastructure is still not adequate. We still have a huge gap in that space. In Nigeria, filling the gap will demand an estimated investment worth $136 billion, according to the Ministry of Communication and Digital Economy, and the Nigerian Communications Commission (NCC) .\nOver the years, and even before the coming of Pan-African Towers, deploying infrastructure has been faced with some bottlenecks. What are those challenges you have identified since you commenced operation?\nTruly, many challenges are bedeviling the sector. There are social challenges like theft, vandalism, community issues and so on. And also, there are the business environment issues like multiple taxation, unfavourable or harsh government policies, forex scarcity and lack of long-term capital for investment in infrastructure in local currency. All these are the issues. Then of course, you also look at failure in power supply. Availability of power is important since all telecoms infrastructure, which are distributed across the country, rely on energy. So, we have to make additional investments in providing energy for our customers. This actually drives up the cost and it makes us susceptible to all the shocks in the energy market and that, sometimes, makes our business difficult. If you look at it, the environment of doing business, capital inadequacy, and poor power infrastructure, those are the things that are really affecting the growth of our sector.\nFocusing on the power challenge as you have just mentioned, how much of the cost of operation do you expend on providing power to run telecoms infrastructure?\nLet me say that power is both a challenge and an opportunity. It is a challenge in the sense that we are currently relying on a grid that is epileptic and non-available in certain areas; and on diesel generators which make us susceptible to volatility of diesel supply and off course, all the issues around constant maintenance of generators, noise pollution, environmental pollution and everything that is associated with running the generator for 24 hours. It is a challenge. In terms of capital expenditure (CAPEX), we are talking about putting in probably 50 per cent of your CAPEX into power equipment, which you would otherwise have saved. On the other hand, even in operating expenditure (OPEX), you will also see that you are spending a lot of money, say another 50 per cent on your OPEX. The cost is a significant part of our operations, both CAPEX and OPEX, which is the challenging part.\nHowever, the opportunity is that with the rise in and reliability on renewable energy, you can provide that power service at a lower rate than using diesel generators. The opportunity there is to save cost.\nIn the face of the current accelerated migration of businesses to the online space, experts have observed that there will be increasing pressure on available telecoms infrastructure. What can be done to avoid service breakdown in this situation?\nThe mobile network operators (MNOs), who are the people that deliver the last-mile service to customers, are experts and they always know how to handle the situation.\nRemember, we just serve them and they are the ones that serve the customers. The MNOs are global experts and they know how to plan demand and uptime very easily.\nThey have tools for all that. So, the uptake in data traffic, for example, is not unanticipated. You know that people are going to use more data. It has been rising for a long time. What has just happened is a shift in usage. For instance, people working more from home means that residential areas during the day will see more data traffic than they would have normally seen. Those people ideally would have been in the office. So that capacity is there, it is just that it is in a different place. An example is that if you shut down the markets in some areas, what you are going to see is that because the businesses are not working there, the traffic will reduce there. But the people are still doing something and they are working from home. The tendency is that you now see the traffic go up in areas where people live.\nBut it is still the same Internet and everything will still aggregate. For the MNOs, they have a way of shifting capacity. The challenge now lies on us that provides the infrastructure.\nInfrastructure cannot be shifted over the internet. Infrastructure is hard and you must dig up something. If it is fibre, you must put the physical duct, put the cable inside and terminate it somewhere. It is not something you can do overnight. It is not software-driven. If you are going to build a tower, the process is the same thing. You have to secure a location, construct the mast and get the work done.\nSo for me as an infrastructure provider, the solution is to deal with what is slowing us down to deploy infrastructure more speedily. It boils down to key government policy implementation like government’s permit to a right of Way (RoW), attitude of landlord, and attitude of estate agents.\nAnother challenge to quick deployment of telecoms infrastructure, is the government angle. We can work quickly and fast but you have government offices that do not work at the same pace.\nHow is the non-approval of RoW permit by some state governments, affecting the growth of the sector?\nThe issue of RoW permit has been an issue to deal with, but early this year, the federal government reminded state governors of the agreement they earlier had to reduce RoW charges to a flat rate of N145/per linear metre, and this has been a very welcome development. I think six states or so have aligned with the charges recommended by the federal government. At least, prima facie, addressing the RoW charges brings down the cost. But as I told you, there is a plan. If you are going to run fibre from the landing point in Lagos to Abuja, you will probably pass through eight to ten states. Along that road, maybe it is just only one state that has reduced RoW charges to the N145 per linear metre stipulated by the federal government. But you cannot fly to avoid other states that have not aligned with the price. You still have to deal with other people that have not done it. That is one thing about the fibre infrastructure. Fibre is a point to point connection. If I am running from Lagos through Ogun State, through Oyo State, to Osun and to Ekiti; even if Ekiti has done the needful, what about these other ones? If I am running, let say, a 300 kilometre fibre, it is over the 50 kilometres inside Ekiti that I will enjoy reduced charges; the remaining 250 kilometres will still be at high rates. In this kind of arrangement, Ekiti State may still not reap that reward internally. That is why all the state governors have to align with the agreed charges. That is the challenge.\nHowever, there are other hidden charges; the RoW is just one charge. If you really look at what goes into it, there are many other hidden charges that are not spoken about. It came up at the last meeting and we need to consider that. When you say the charges is N145, then it should be N145, without any hidden charges.\nThe NCC introduced infrastructure sharing as a policy to help in broadening deployment of telecoms infrastructure. What opportunity has this created for operators such as the Pan African Towers?\nInfrastructure sharing is a global trend and the NCC has done very well by bringing it to the country so that people can be served better. First, it is good for the environment and it is also good for the business because with it, one tower can now serve various operators. You do not need four or five towers again. To build about four towers in Nigeria is money but with the policy, the amount of forex we use to get tower equipment would be diligently utilised. What the policy also means is that most of the services have significantly improved because of the efficiency around infrastructure sharing. It has also created an industry for some operators, which is widening the telecoms value chain. So, instead of just having the MNOs, we now have the tower companies (Towercos) and also the infrastructure companies (Infracos). And if you look at the collective investment that each of them has done in these areas, it is very significant. This will also make our telecoms industry more resilient from shocks, unlike if you have concentrated all the investments, resources and risks in one leg, the way it used to be when the MNOs were the telcos, the infracos and they have to do everything. Now, it has been broken down into more efficient work streams. People who are focused on infrastructure are there; we have the ones who are focusing on customer service qualities, and many other divisions that are also there. So, that is how it should be. Infrastructure sharing is a welcome development and we hope to see more in that area.\nThe 5G network is not yet available in Nigeria but obviously, efforts are being made towards its deployment in the country. What new demands does this put on you as an infrastructure company?\nLike every other technology, 5G is going to come. It has already been deployed in some part of the world and even in some African countries. If you look at it, Nigeria is the largest market in Africa, and definitely, 5G is going to take off here. If it can work in South Africa, it can work here. What we need to start looking at is that 5G is not just a technology, 5G is a complete disruptive technology because the reason why you are having 5G is because of Internet of Things (IoT); it is being driven by the shared amount of devices that are internet enabled that are coming into the market. You have street lights that are Intelligent and smart. You do not just have passive street cameras that are just there anymore, they are connected to the internet. Also, you have autonomous vehicle that is coming. The mobile industry is changing. 5G is actually all about smart cities. I know that Lagos state even has a smart city plan, what this means is that you will have to restructure your entire community and regulatory systems for 5G to take its root. It is not just for us building stuff using the current model. We are going to look at the entire ecosystem. During the initial stage of Coronavirus pandemic, out of fear and mischief, certain people started spreading rumours that the virus was being caused by communications equipment. This is not the first time they have said it. In the past, they have linked communications to cancer. There are people who believe that anything technology is to be suspected. Although, there are legitimate concerns about a disruptive technology but the truth is that artificial intelligence did not just start today. Machine learning has started about 40 years ago; it is just getting better. You now have robots that can do different tasks. As a country, we must compete with people who are using technology to fight our industry because that is our job and we are supposed to make it available. So, 5G must be done. For me, it is a golden opportunity for Nigeria. In fact, I am an apostle of 5G because I believe that technology, especially this technology that have evolved in the past 10 years – blockchain, fibre, security, artificial intelligence, cloud and co – they are all sitting on top of this 5G. Things are being able to talk to each other. We have seen Towercos in China, laying their fibres and towers along expressways in anticipation of autonomous vehicles, driverless cars. You can now imagine Nigeria, if we really want to have a smart city and you have Ikorodu road with all these vehicles that are usually on the road. It will be a serious work for use and we have to really think ahead.\nSo, it is not me or the infrastructure company alone that will do it, it is a collaborative effort. Where the government should come in is that they should not see 5G as another opportunity for them to rake in money. 5G is much more than that.\nPan African Towers entered the Nigerian market in 2018, how has the journey been?\nWell, the journey has been challenging and rewarding at the same time. We have tried to prove that Nigerian companies can also compete in the space and we have been able to win the confidence of the market. We have been able to put together a team that can deliver world class services in this area. The journey has really been interesting for us, we just celebrated two years of business operations in Africa and we have been able to make some strides in the industry despite the challenges we face. There are also huge opportunities as we move and we have come this far because of our mission to provide broadband penetration and other telecom services across Africa especially to remote areas. There are people who do not have the network to make a phone call and so they do not have GSM phones. They have no access to quality education, healthcare services, and other critical infrastructural services that foster their livelihoods. Imagine these people being completely cut off from the global world. This is why we do what we do. We need to build more towers in these remote areas so these people can access life-enhancing services and get connected to the global community. Technology makes the world better and erecting towers in these areas, could be a life-changing moment for a whole community. So, the journey has been really interesting for us at Pan African Towers.\nWhat informed your decision to go into telecoms masts and towers installation and not other categories of telecoms business?\nWell, there are opportunities everywhere in the industry and its various segments.\nHowever, based on the vision of the founders, this is an area that needed the most attention and it is a good sustainable asset class. So, it is not something that you do and go away. It requires long term planning and it has long term rewards. If you look at the environment of business, people who build infrastructure have long term vision. As I said earlier, in Africa and Nigeria, there is huge infrastructure gap and this makes this segment as an area that has not really been tapped and it is an underserved area. There are many areas where you still do not have telecoms service coverage today and there are areas where you have capacity deficit that someone has to build up. For us, it is a good business opportunity and it also resonates with us as citizens where we do not just do short end trading type of activities, which most people try and do because they do not have long term fate in the country. We are just like Dangote and other indigenous companies, once they put a factory down, you know they are not going anywhere. But when you see someone who is just importing containers, the moment they see there is a problem, they stop and ship their containers to the next city. But this is infrastructure and we are building it in every part of the country. So, we all have to join our hands and build the country together. We have both nationalistic and African business orientation. It is a good business and our vision is to help fill that $136 billion telecommunication infrastructure gap that already exists in Nigeria\nFor indigenous companies like you, what do you think the government can do to further strengthen you in the face of competition with foreign counterparts?\nWell, it is expected that foreign companies will have an advantage because if you look at the kind of company that come to Nigeria, they have access to long term funds. They have access to expertise. They probably are also coming in as a global partnership with companies they want to serve in Nigeria. So, when they buy a portfolio, Nigeria just happens to be one of the places they are coming to. That is welcomed frankly because most Nigerian companies do not have what it takes here to cease the whole opportunities in Nigeria. So, we would always need them. And if you look at our particular sector, the technology sector has no colour, it has no country; it just has to do with the resource.\nRegardless, where the government should look at, first and foremost, is helping with the right policies for the Nigerian companies who want to do this to grow. For instance, we have got funds earmarked for certain sectors of the economy to cushion Coronavirus pandemic effects. Government should earmark for infrastructure companies as well. The Central Bank of Nigeria (CBN) is intervening in almost everywhere but in a key sector like this, they expect us to go and be looking for dollars. One of the risks that have happened here is that long term funding at dollar rate is a problem but the CBN, I think based on what they have been doing recently, is trying to drive the interest rate down in local currency. Hopefully, a lot of local long term lending will start happening and that is a good thing. But the other issue is around cohesion around government agencies, so that the issue of taxation, stoppage of works, should be eliminated so that people can actually deploy this infrastructure quickly. That is for everybody though, not just for Nigerian companies. And there should be some incentives for people who are willing to deploy their time and capital into this area to grow. For example, government should increase resources for the Universal Service Provision Fund (USPF) to increase funding so that the rural connectivity target can be met. People in the rural areas also need access to the internet, and access to telephone. But what is earmarked for them is just too small.\nCOVID-19 has come and it is still here. As everyone keeps the hope to see a post pandemic era, what opportunities have you seen as the bright side of the situation?\nWe thank God that we are alive and that is first and foremost. Nobody saw the pandemic coming. No analysts forewarned us about it. It is quite unfortunate that quite a number of people have paid the ultimate price. However, there are many lessons to be learned from it. One is that our health infrastructure in Nigeria and transportation infrastructure have no resilience at all. People were unable to really keep themselves going during the period of the pandemic. Technology cannot replace all those things, and neither can the towercos do all those things. Also, the government cannot do everything. It is expected to create an enabling environment so that people can come in and build all this infrastructure that is missing. For our own industry, we are negatively correlated to the pandemic in the sense that people now realise what essential service really is. They want to talk and be able to communicate with people and the way it is done today, that is where the services that we render come in. So, we are part of essential service. Again, the government needs to look at what they have been classifying as essential service using this pandemic as a case study. If you know that when you were locked down at home and you had nowhere to go, you needed a telephone, you needed to talk to the external world as you could not fly down there but you were able to talk to them via telephone, that should let you know the importance you should attach to the sector that is making that possible. For example, if you have $30 million and you are thinking of investing in aviation, because you think it is essential, maybe you should think twice and divide it into two and put some in the telecoms sector. Even if you remove telecoms from other sectors, including aviation, there will be problem. Telecoms contribution to the GDP has been growing year after year. In Q2 of 2020, it grew by 18.10 per cent according to the National Bureau of Statistics, helping the ICT sector to contribute 17.83 per cent to Nigeria’s GDP. So, I am happy that there is a dynamic Minister of Communication and Digital Economy. He has been engaging with the industry and we believe the government is listening to him. If he is able to win the heart of the government, governors and the private sector, I believe the telecoms sector will continue to be better.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2020/10/08/abu-adequate-telecoms-towers-will-bridge-infrastructure-gap"}
{"doc_id": "7d56bae2c97d84d08ae70df2253346d2", "text": "African Bank has recorded a profit for the financial year ended September 2023 – rescuing itself from a challenging start to the year.\nOver the financial year, the group said that it saw a successful acquisition and integration of Grindrod Bank and Ubank assets, liabilities and operations.\nWith the more extensive operations, the group is now servicing 4 million active customers across its platforms, a massive 158% increase (FY22: 1.5 million).\nOver the period, the net advances book grew by 41% to R32.0 billion (FY22: R22.6 billion), with secured business banking loans totalling over one-third of the group’s loans.\nThe funding base has also been diversified, with business and retail deposits making up 87% (FY22: 76%) of the total funding of R34.6 billion (FY22: R16.6 billion).\nDespite the two acquisitions, the group said that it has sufficient liquidity and cash reserves totalling R9.9 billion (FY22: R2.8 billion).\nWith the larger balance sheet, the group saw its interest income on the advances book grow by 30% to R7.3 billion (FY22: R5.7 billion), with a net interest margin of 11.0% (FY22: 14.0%).\nDiversification also saw the cost of funding reduced to 7.3% (FY22: 7.7%), notwithstanding the 200 basis points increase in the repo rate over the same period.\nNon-interest income also grew by 144% to R1.6 billion (FY22: R0.7 billion) as more customers transacted on their MyWORLD and Credit Card accounts and purchased other value-added services.\nInsurance profits from cell captive arrangements skyrocketed by 92% to R670 million (FY22: R349 million) as claims normalised,\nBusiness banking also contributed R682 million in total net revenue for the 11 months from the date of acquisition of Grdindrod (1st November 2022).\nThe group’s total net revenue before impairments jumped by 40% to R8.1 billion (FY22: R5.8 billion)\nThe group’s operating expenditure did, however, increase, with a cost-to-income ratio of 58.7% (FY22: 56.3%), as the group is in an investment phase while integrating its new businesses.\n“Negative economic environment affected Consumer Banking’s customers resulting in rising credit impairment charge and a group credit loss ratio of 8.0% (FY22: 4.9%),” it said.\nIt added that it reported a net profit after tax of R505 million (FY22: R736 million profit).\nThe group’s performance in the second half of the financial year was mainly responsible for the overall profit – after it recorded a loss after tax of R44.4 million in H1 2024.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/732695/african-bank-hits-4-million-customers/"}
{"doc_id": "45fcf4aead943c346efcb350f05570a2", "text": "How could Muammar Gaddafi remake his career? Is there a deal big enough to make Jacob Zuma notice Duduzane? What could Bheki Cele’s natty dress sense do for your leadership style? What is the secret to Juju’s spin arsenal? Eminent marketing-supremo-come-business-advisor and author-by-proxy turned public speaker, Lucien Dunlop Fantasia, answers all this and more as he launches his new self-help book, Empire. By MANDY DE WAAL.\nWho is Lucien Dunlop Fantasia? How did he get to be so fabulously fabulous? How can others emulate his success? These are the questions that will soon flood the minds of aspirants across South Africa following the launch of the marketing magnate and trustafarian’s first book “Empire: How to succeed with nothing but passion, great ideas and a wealthy family”.\nWhile the big kahuna, who says “I’m just the simple offspring of a rich man”, openly credits his father’s money as his source of success, Fantasia’s tell-all book spills family secrets along with the inside track on his ad agency, wealth, ideas, wealth, hovercrafts, wealth and gritty optimism.\nStudded with self-help nuggets like “If you want to increase productivity, ban something”, and “As Samson demonstrated, going bald ruins lives”; Fantasia’s book is likely to be an illuminating classic in the improvement literature genre.\nWritten by Brendan Jack, who bears an uncanny resemblance to Fantasia but is in no way connected or related to him, Empire is destined to rank right up there alongside “Why moved my iPhone 5”; “The Tipping Plunge”; “Rich Dad, Poor Proletariat” and “The Seven Deadly Habits of Highly Effective Dictators”.\nIn between handling the government’s PR strategy for the Dalai Lama’s visa issues and jetting off to Libya for a dictator’s round table on post-revolution personal brand makeovers, Fantasia shared his thoughts on the Gladwell phenomenon, father-to-son wisdoms for the Zumas, his thoughts on Kenny Kunene and his views on Dickie Murdoch.\nDaily Maverick: Who is Lucien Dunlop Fantasia?\nLucien Dunlop Fantasia: A lover of quality, the product of a successful family, fan of custom-built hovercrafts, brand assassin who is currently handcrafting his advertising empire.\nDaily Maverick: What are the biggest lessons you’ve learned?\nFantasia: If you can dream it, you can do it – if you have enough financial backing. Also, eating roughage is a waste of time.\nDaily Maverick: Are you destined for motivational speaker greatness?\nFantasia: I enjoy speaking. When I create a bespoke presentation, you’ll know that you’ve been bespoken to.\nDaily Maverick: Malcolm Gladwell earns a fortune for public speaking. Will you be able to scale the same giddy heights?\nFantasia: $100k an hour barely covers my private Gulfstream flights. But never turn your nose up at money, even if it’s only six figures.\nDaily Maverick: What wisdom can you offer big business?\nFantasia: There’s nothing wrong with failure, as long as it’s someone else’s failure. Always hire young, passionate staff. They cost next to nothing.\nDaily Maverick: What are your business values?\nFantasia: The customer is always right – just until they’ve paid.\nDaily Maverick: What’s the best advice anyone’s ever given you?\nFantasia: You’d better get out of here, the police are coming.\nDaily Maverick: Who are your business gurus?\nFantasia: Roman Abramovich, Bernie Ecclestone, Adnan Khashoggi, J.R. Ewing, CNN’s Anderson “Vanderbilt” Cooper. Now that’s a party.\nDaily Maverick: What’s the best business book you’ve ever read.\nFantasia:\na) My own.\nb) The real Wizard of Omaha: Harry Potter. His books did great business – more than $15 billion in merchandising.\nc) Bernie Madoff’s prison manuscript. Working title is “History of Pyramids”\nDaily Maverick: Your business and self-help advice for politicians, business people and other notables?\nFantasia:\na) Dickie Branson: Get some fire extinguishers on your next summer island. (I did warn him)\nb) Politicians: Don’t bother covering up wrongdoing, it’s not like you’re going to be prosecuted. Pretending to care about public opinion is a waste of personal spending time.\nc) Banks: You’re doing a great job, but let’s get more credit card machines to the Third World. Huge gap for additional revenue.\nDaily Maverick: How could Muammar Gaddafi remake his career?\nFantasia: I discussed this with MuMu the other day. Three words: Reality TV Show. Like Ozzy in The Osbournes, portray him as a quirky father who dresses strangely and talks nonsense. Catchphrase: “I’m the king of Africa!” Delete scenes where enemies get buried in the garden after dinner parties.\nDaily Maverick: You’ve dealt with parental abandonment. Given how busy President Zuma is, do you think there’s a business deal big enough to make Zuma Snr take notice of Zuma Jnr?\nFantasia: Firstly, your dad’s not THAT busy. Duduzane, take advantage of the power (parked in your driveway) and remember to send birthday cards to the Guptas.\nDaily Maverick: National Police Commissioner General Bheki Cele is a pretty natty dresser. Do you think how you look is as important as what you do and say when it comes to leadership?\nFantasia: Looking good is paramount. No one says, “You’ve got such beautiful governance” or “your leadership totally matches your shoes”. Style beats content. It’s a philosophy I use when making adverts.\nDaily Maverick: Do you think Julian Assange’s move to start selling coffee on eBay to make a few bucks is a good move? What else could he be doing to monetise Wikileaks?\nFantasia: Coffee is an essential fuel to keep your robots (employees) moving. How about WikiLeeks, selling organic leeks? People love vegetables. Add nudity to WikiLeaks. Every time you correctly guess a file’s origin, Julian sheds an item of clothing. Never underestimate nudity when it comes to monetising business.\nDaily Maverick: What’s your view on Rupert Murdoch?\nFantasia: I’m a bit biased as we co-own a timeshare micro-nation. Anyway, who cares about opinions? Would Napoleon or Stalin have achieved so much if they cared about bitchy online comments.\nDaily Maverick: Mark Esterhuysen’s F-bombs on air saw him frog marched out the 702 building. Do you think he could still cut it as a motivational speaker?\nFantasia: Yes, even for kid’s parties in places they don’t mind strong language – Carletonville and parts of the Eastern Cape.\nDaily Maverick: Who’s your favourite motivational speaker and why?\nFantasia: John Edwards. Not the disgraced US politician, the one who talks to dead people. It motives me to avoid embarrassing my forefathers.\nDaily Maverick: What’s your view on Kenny Kunene?\nFantasia: Mostly from a rear view mirror… My McLaren F1 blows his clunky Lambo into the weeds after a night at ZAR.\nDaily Maverick: Patrice Motsepe, who tops the Sunday Times Rich List for the first time, has JSE-listed investments worth R22.99 billion, up from R19.91 billion the previous year. What’s your advice to him for dealing with such heady success?\nFantasia: Look, it’s only rands, but congrats… I mean what recession? Am I right? Pat, I left you a voicemail about buying DSTV and replacing Derek Watts with a friend of mine. Call me.\nDaily Maverick: What’s the secret to Malema’s spin machine. How can someone possibly get quite that much publicity? Is all publicity good publicity?\nFantasia: Malema uses the Spinal Tap approach: Turning the volume up to 11 to bamboozle crowds. My agency made street pole ads to advertise his hearing but, ironically, his supporters ripped them down and littered.\nDaily Maverick: What is your advice on balance?\nFantasia: Water always picks the shortest route to flow downhill. Water may be lazy, but it’s also powerful. Find this balance. DM\nResources:\n- “Empire: How to Succeed with Nothing but Passion, Great Ideas and a Wealthy Family”. Free chapters, signed paperback or eBook (for the price of a cappuccino) available here;\n- Follow Brendan Jack on Twitter.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2011-10-06-lucien-dunlop-fantasias-empire-state-of-mind/"}
{"doc_id": "b8b18012c0cf993a53e25d2b73ec63a1", "text": "By Scott Picken\nInvestors currently have two main options to pool funds together with people or businesses to invest in real estate. Whether it’s a stokvel or crowdfunding, this is based on a principle that uses the collective buying power of a group to ensure that each participating individual can attain ownership of a property. This levels the playing field for investors, especially in circumstances where a lack of funds limits an individual's ability to invest in private or commercial real estate.\nSince the 19th century in South Africa, stokvels originally came about to give people options at cattle auctions, as it may be unaffordable for one individual but by using a community’s power to fund the purchase, then it becomes affordable. While both stokvels and crowdfunding are based on similar principles, the main difference is how the group funding is administered and the cash custody when pledging specific amounts.\nThe main differences between stokvels and crowdfunded investments\nAll investors need to do their own due diligence before committing to these forms of financial savings, especially as a stokvel is considered a more informal method. Stokvels are self-regulated when it comes to forming rules, the responsibilities of each member, the set amount to be pledged, and how the group fund is affected when an individual can’t meet their financial obligations or leaves the group. “Online crowdfunding allows for expanded access to larger communities and networks as well as the beauty of the power of collective buying”, says Riaan van der Vyver, Chief Investment Officer of Wealth Migrate.\nHere’s an example of how this equity crowdfunding method works on the online marketplace, funds are collected to purchase a large property like an apartment block. Investors then receive pay-outs each quarter based on the revenue generated by the property and the amounts that were individually pledged. While there is a minimum investment amount, each individual is left to decide whether they can invest more and potentially receive larger returns.\nThe benefits of crowdfunding to investors\nCrowdfunding gives a South African investor more options in the local and global property market, through the evolution of an online savings scheme into private and commercial real estate investments.\nWhile a stokvel’s reach may be limited due to its self-regulation, crowdfunding is given a wider reach through its digital approach. More potential investors are able to see it, share it and can choose to participate. In terms of risk and diversification, crowdfunded deals also tend to have a lower risk as since it's not tied to fluctuations in the stock market, and investors have direct control over the diversity of their investment portfolios.\nWhat is exciting... is how closely online crowdfunding relates to the behaviours and practices we, as South Africans, already adopt in our lives: stokvels, burial societies, church fundraising, school raffles.\nScott Picken is the CEO and Founder Wealth Migrate\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/investments/the-different-ways-of-using-collective-investing-in-real-estate-badf4b16-867e-4b5c-9b40-a9e9d35eb40c"}
{"doc_id": "508cab16d1ad195ac057f5f9deb60398", "text": "By: Brett Ladouce\nIt has now finally been confirmed that the two-component retirement savings system, widely known as the two-pot system, will come into effect on September 1 this year\nTo recap, the retirement fund contributions of all employees joining a retirement fund in which their employer participates after September 1 will be split into two components, or pots. One third of the fund contribution will go into a Savings Pot and two-thirds will go into a Retirement Pot.\nYou will be able to withdraw all the money (contributions and investment income) in your Savings Pot on an annual basis and your withdrawals will be added to your taxable income and taxed as part of your taxable income for that tax year. Alternatively, you will have the option of taking the balance of your accumulated savings in the Savings Pot as a lump sum retirement benefit (with the possibility of receiving the first R550 000 as a tax-free benefit) or using that amount to buy an annuity income stream at retirement. You will, however, not have access to the money in your Retirement Pot until your retirement, at which time that money must be used to buy an annuity income and cannot be taken as a lump sum.\nIt sounds great to have access to a portion of your retirement savings on an annual basis to make provision for unforeseen expenses or for foreseen luxuries, such as giving yourself a “Christmas bonus” at the end of each year or for having a “Janu-worry expense account” that can carry you through a long and (financially) dry January each year. It is easy not to consider what the true cost of these annual withdrawals from your Savings Pot will be over the lifespan of your career.\nThe example below will illustrate how these annual withdrawals can have an enormous negative effect on the amount that we have at retirement.\nJohn and Jane\nJohn and Jane are twins who are employed at the same company on January 1, 2025. They both earn R500 000 a year and are taxed at an income tax rate of 20%. They both decide to contribute R10 000 a month (R120 000 a year) to their retirement fund for a period of 30 years until they reach their normal retirement date. They both attain an investment return of 10% annually for 30 years. For the sake of simplicity, we will assume that the inflation rate is 0% for the next 30 years and that their annual income and fund contribution level remain the same for the 30-year period.\nJane decides to never withdraw any money from her Savings Pot and to let her contributions to the Savings Pot accumulate and grow until her retirement date. This is to give herself the opportunity to have the option of taking a substantial lump-sum retirement benefit in addition to the money in the Retirement Pot that she must use to obtain an annuity income stream.\nJohn, on the other hand, decides to use his Savings Pot as his “Janu-worry expense account” to cover his expenses in January each year after overspending during his annual December holiday. John believes that the problems of January must be sorted out in January and retirement must take care of itself. Each year, he therefore withdraws the contributions he made to the Savings Pot as well as the investment income he earned during that year. This means that he is effectively only contributing R80 000 towards retirement each year and not R120 000 each year, like Jane\nThe different approaches John and Jane follow in regard to their Savings Pot lead to significantly different retirement outcomes. After two years and after John has made one withdrawal of R44 000 from his Savings Pot, Jane has total retirement savings of R277 200 of which R92 400 is in her Savings Pot while John has total retirement savings of only R228 800 of which R44 000 is in the savings account. At the end of five years, Jane has saved more than R805 000 for retirement while John has only saved about R580 000. After 10 years this picture has changed to about R2 100 000 in retirement savings for Jane and about R1 440 000 for John. At retirement, Jane has accumulated a total amount of R21 713 211 (with R7 237 737 in her Savings Pot) for retirement while John has only accumulated R14 519 474 (with only R44 000 in his Savings Pot).\nBy only withdrawing R44 000 per year for 29 years from his Savings Pot, John has lost R7 193 737 in retirement savings over the span of his 30-year career. If John did not withdraw the R40 000 (and growth thereon) that he contributed in 2025 in January 2026 and left that amount in the Savings Pot until the end of 2054 (30 years), the R40 000 would have grown to R697 976 due to the effect of compound investment growth.\nFrom the above, it is clear that we must carefully consider making annual withdrawals from our Savings Pots. Just because you are allowed to do something does not mean that it is a good idea to do so, especially if you compare the immediate benefit of the withdrawal from your Savings Pot against the future loss of compound investment income.\nThe question that you should ask yourself before you make a withdrawal from your Savings Pot is: “Am I a John or a Jane?”\n* Ladouce is a pension funds lawyer and the author of the book, Pensions for Palookas.\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/financial-planning/pension-plain-two-pot-system-do-not-eat-from-your-savings-pot-89d4ef08-1338-4e2c-8750-444e243939bc"}
{"doc_id": "5daa4aab7c0e69dc28996da1f11be365", "text": "Five large emerging markets (EMs) needed to sustain significant medium-term primary fiscal surpluses to stabilise the debt-to-GDP ratio – Brazil, Egypt, South Africa, Colombia, and Mexico, Oxford Economics said in a note yesterday.\nMost had scope to tackle ongoing fiscal challenges, but policies needed to be stiffened, the note said.\n“Our comprehensive survey of our country economists covering 21 large EMs reveals fiscal risks are partially mitigated because those with the most urgent need for fiscal cuts also tend to be the ones with greater scope and the ability to implement them. Of the five with sustainability issues, only Brazil and Mexico have major obstacles to consolidation in 2024, in the form of elections.”\nOxford Economics said most EMs had budgeted fiscal consolidation in 2024, but of these consolidators, outcomes would likely disappoint markets in Colombia, India, Peru, and South Africa.\n“Alarmingly, we find the budgets for Mexico, Peru, and Turkey to be expansionary, yet we predict fiscal overshoots.”\nThe legacy of the supply-shock era was still playing a major role on fiscal outcomes in several EMs, particularly Poland, Turkey, South Africa, Indonesia and Hungary, with transmission channels including the impact on interest payments, subsidies and other expenditures, and revenues.\nProgress on longer-term fiscal issues such as fiscal rules and pension reform had tended to go backwards over the last few years, in the context of the social challenges of the supply-shock era.\nMexico and Brazil looked to have the most vulnerable combination of fiscal sustainability metrics and expansionary policies, though in Mexico’s case the election may be a temporary position after years of fiscal conservatism.\n“In the next risk tier are those with adverse sustainability metrics, and policies that only partially address them – Egypt, Colombia, and South Africa. We have concerns over those with reasonable sustainability metrics but lax policies – Peru, Hungary, and Poland, whose new government may act to reduce fiscal risks,” the organisation said.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/emerging-market-fiscal-policies-versus-sustainability-issues-b3690495-3614-4327-a135-351960a47ac4"}
{"doc_id": "fcd500852a78ca8acfe7ee343984d305", "text": "The cumulative fuel price increase has added significantly to overall consumer price inflation, and a further increase in June will sustain this pressure, says John Loos, property sector strategist at FNB Commercial Property Finance.\nWhile the Department of Energy has not announced the official petrol price for June 2022, data from the Central Energy Fund and the end of government interventions indicate the cost of petrol could increase by more than R4/litre. This would push the country’s petrol price above R25/litre in June for both grades.\nFor many consumers, fuel spending is difficult to avoid, meaning that many have to reprioritise their expenditures and likely reduce more non-essential spending items, as well as delay ‘postpone-able’ low-frequency purchases, Loos said.\n“We believe that this impact could be felt more on larger super-regional and regional shopping centres, which are more significantly focused on such purchases, including entertainment, eating out and clothing and footwear retail.\n“Smaller convenience and neighbourhood centres focused more heavily on essential food and grocery shopping are likely to feel this indirect impact of fuel inflation to a lesser degree.\n“We believe that ongoing fuel price increases are a negative for an already-battling office property market. The office market is challenged by a lot of underutilised space due to a far higher working from home level compared to prior Covid-19 lockdowns.”\nNow, as fuel prices become exorbitant, FNB expects many commuters, who are able to work from home to an even greater extent to contain their fuel bills, Loos said.\n“This can be an additional source of encouragement to certain employers to reduce their office space needs, if the success of the lockdown work from home ‘experiment’ wasn’t enough encouragement already. So it’s an additional potential source of pressure on the office market.”\nHe added that commercial property is interest-rate sensitive, as fuel prices have been driving overall inflation and thus interest rates higher, and indirectly impact in containing credit-driven property buying via their impact on interest rates.\n“We anticipate that sales activity in the commercial property market will start to slow in the second half of 2022, after a recent period of strengthening, the ongoing interest rate hiking being a key driver of this expected slowdown.\n“The fourth commercial property sub-sector that is challenged by high costs of fuel of late must surely be hotel property. Already challenged by revenues and occupancy rates still well-down on pre-lockdown days, high petrol prices are a negative for holiday and business travel, and thus for overnight accommodation demand.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/592034/fuel-price-increase-to-hit-property-in-south-africa-and-stop-people-going-into-the-office-fnb/"}
{"doc_id": "cd82ab9c8e04051cff13aee2122efd57", "text": "-\nGeorge Maponga–Masvingo Bureau A lot has been achieved by the Second Republic under President Mnangagwa’s leadership for information to be accessible to Zimbabweans, including those in rural areas, in schools and in various Government departments, Information, Publicity and Broadcasting Services Minister Dr Jenfan Muswere has said. He was speaking at Chivi Growth Point in Masvingo […]\n-\nUrbanites benefiting from the Presidential Borehole Scheme will now be connected directly to the boreholes so the water comes through their taps, as President Mnangagwa’s initiative continues to deliver potable water across the country.\n-\nMukudzei Chingwere-Herald Reporter PARTNERSHIPS with local companies have been approved by Government to upgrade, rehabilitate, widen and construct the 352km Harare-Chirundu Road, the other part of the major North-South Corridor that will see work on the Harare-Masvingo-Beitbridge Highway moving towards conclusion. The project is in line with the Second Republic’s vision of providing state-of-the-art road […]\n-\nHerald Reporters THE policies being implemented by the Government to stabilise the economy and strengthen the local currency by removing large sums from circulation and promoting its desirability, have started bearing fruit, with the Zimbabwe dollar becoming scarce as predicted by President Mnangagwa. The Zimbabwe dollar is now firming against the US dollar on the […]\n-\n-\nBulawayo Bureau THE construction of the massive Lake Gwayi-Shangani in Matabeleland North province has led to the establishment of downstream industries, which have widened the economic impact of the project through job creation and reducing cost of implementation. On the sidelines of the lake construction site is a new metal fabrication business unit, quarry making […]\n-\nPatrick Chitumba Midlands Bureau Chief DEVOLUTION funds have transformed education, health and social amenities with a new clinic, class-room blocks and rehabilitated roads emerging in the six wards making up Gokwe Town Council as the Second Republic continues pushing development all corners of the country by channelling funds to local councils. According to Gokwe Town […]\n-\nAfrica Moyo in BEITBRIDGE MOTORISTS, commuters and Beitbridge residents, yesterday welcomed the directive by President Mnangagwa for the immediate construction of the 760km Beitbridge-Bulawayo-Victoria Falls highway. In his keynote address while commissioning the Beitbridge Border Post upgrade and modernisation project on Wednesday, President Mnangagwa directed Transport and Infrastructural Development Minister Felix Mhona to immediately ensure […]\n-\nAfrica Moyo in BEITBRIDGE President Mnangagwa yesterday commissioned the modernised Beitbridge Border Post and said all border posts would be upgraded to improve the quality of services in the transport sub-sector. He directed Transport and Infrastructural Development Minister Felix Mhona to ensure the speedy upgrading of the Beitbridge-Bulawayo-Victoria Falls highway. President Mnangagwa, who arrived in […]\n-\n-\nThupeyo Muleya Beitbridge Bureau Zimbabweans yesterday hailed the Second Republic for delivering on its pre-election promises to accelerate infrastructure development, especially the modernisation and transformation of the Beitbridge Border Post and the county’s southern border town. Civil works on the border post began last year under the US$300 million Private Public Partnership (PPP) between the […]\n-\nBulawayo Bureau DEVOLUTION funds have transformed the health sector with new clinics emerging in several districts in Matabeleland as the Second Republic steps up the inclusive developmental philosophy of leaving no one and no place behind. The programme has helped local authorities in Matabeleland and other parts of the country boost health service delivery, particularly […]\n-\nLesego Valela and Trust Freddy The 112th edition of the Zimbabwe Agricultural Show started yesterday at the Exhibition Park in Harare, with high expectations from exhibitors on unique business and networking opportunities. A few exhibitors were still putting last touches to their stands yesterday. As expected on the first day every year, there was a […]\n-\nTrust Freddy Herald Correspondent The Government is targeting to plant three million orange trees across the country to improve nutrition and pollinator species which are declining, posing a threat to the country’s food security. Chief director for Agricultural Advisory and Rural Development Services, Professor Obert Jiri, recently told a beekeepers’ symposium that was held at […]\n-\n-\nConrad Mupesa Mashonaland West Bureau A NEW mining technique to address Muriel Mine’s receding gold levels through extracting the metal from slime dumps has the potential to boost the company revenue and contribute towards the attainment of a US$12 billion economy by 2023. The Zvimba-based Pan African Mining’s (PAM) Pvt Ltd operating mine is expected […]\n-\nZvamaida Murwira in KWEKWE ZIMBABWE is poised to be at the apex of development given its rich pool of talented youths in various fields like engineering who have put shoulders to the wheel in transforming the country towards an upper middle class economy by 2030, President Mnangagwa has said. Taking advantage of the conducive business […]\n-\nMidlands Bureau There has been growing hope among the Redcliff community as the revival of former Steel giant, Zisco Steel takes shape. Closed for over a decade, Zisco Steel in Redcliff was once one of the largest steel giant in Southern Africa, producing over one million tonnes of steel annually with around 8 000 workers. […]", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/category/vision-2030/"}
{"doc_id": "1cb1f00c8ca2196663982c7fabbbd11a", "text": "Finance Minister Njeru Githae is seeking to tax ‘free’ services offered in Kenya’s telecoms market on the strength that the government is losing millions of shillings in revenues.\nAlso read: Treasury’s capital gains tax to raise house prices\nThe minister is targeting operators like Essar Kenya and Airtel that have launched free services in a bid to grow their share of voice business and mobile money transfer service.\nEssar, owner of the yu brand, and Airtel charge for sending money on their money transfer services, but their subscribers pay for withdrawals. Yu subscribers also call within the network for free after paying a daily fee Sh5.\nNow, the finance minister wants to charge the operators for the free services as part of plans to raise tax receipts to meet additional expenses like the recent salary increases for teachers, lecturers and doctors. “Companies that are giving free airtime minutes (calls) can give it for free but they have to pay tax on it,” said Mr Githae.\n“We are going to put in a minimum for example 10 per cent of the transfer charge or say Sh50 per transaction (mobile money transfer). By saying that you are not going to charge anything, what that means is that the taxman is going to lose.”\nTreasury says the Kenya Revenue Authority will be expected to collect Sh1 trillion in the next financial year, up 15 per cent compared to this year’s Sh870 billion target.\nThe government plans to introduce a 10 per cent excise tax on fees earned from mobile cash transfer while airtime attracts the 16 per cent VAT charge and excise tax of 10 per cent.\nMadhur Taneja , the country manager of yuMobile reckons that Treasury’s attempts to levy fresh taxes will strengthen the dominance of Safaricom in the market place.\n“By offering transfer services at low cost or for free, we are trying to make our services more attractive to the consumer giving them more options and enhance competition in our operating environment, “ said Mr Taneja in an e-mail response to the Business Daily.\n“As investors, stability in policy-making is crucial in planning our future investment programmes and a move like this (charging the ‘free’ services) will impact negatively on our plans that are already in place.”\nSafaricom controls 80.7 per cent market share in terms of voice traffic while Airtel and Essar have 10.9 per cent and 7.7 per cent respectively. It is also dominant in the money transfer business through its M-Pesa brand.\nIt has nearly 40,000 M-Pesa agents, leaving the rest of the service providers with a paltry 9,000 agents across Kenya.\nAirtel says it has 6, 000 agents.\nBy eliminating cash transfer fees, Airtel wants to get a piece of this business while riding on Safaricom’s network through cross-network transfers. But since Airtel charges withdrawals which range between Sh15 and Sh300, tax experts reckon that the service is not free.\nDeloitte says government tax is charged on the overall revenue that Airtel draws from the service and added that zero fee had been approved by the banking and communication regulators.\n“Airtel is committed to complying with the laws of the countries in which it operates and it is no different on this issue. The proposed tax will impact all players in the mobile money space and not just Airtel,” said Airtel in a statement yesterday.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/githae-seeks-new-tax-on-telcos-free-services--2018070"}
{"doc_id": "ab5c5059f1d956e2e6b5054d1041cd17", "text": "Mwalimu Sacco will pay Equity Group up to Sh510 million for taking over the troubled Spire Bank in a deal that will see the teachers-backed lender lay off all its workers.\nThe deal backed by the Central Bank of Kenya (CBK) is modelled as an asset purchase transaction. Equity will take over the assets and liabilities of Spire Bank rather than inject money into the acquisition.\nEquity will be paid for the difference between the assets and liabilities, meaning that Spire Bank has zero value and teachers have lost billions of shillings after buying a majority stake in the bank from late tycoon Naushad Merali in 2014.\nMwalimu Sacco CEO Kenneth Odhiambo told the Business Daily that Sh510.7 million has been kept in an escrow account that will be used to pay Equity.\nHe reckons that the payout to Equity could be lower at the time of concluding the deal, which is in line with the CBK’s preferred mode of letting big banks acquire smaller and struggling ones instead of letting them collapse.\nThere are 38 banks competing in Kenya’s banking sector, which has seen several mergers and acquisitions since 2016, sparked by the failure of three mid-sized and small lenders, as well as a cap on commercial lending rates.\nSpire bankThe rates cap was removed in 2019.\nFor Spire Bank, the takeover was initiated under the insolvency rule, where a quick acquisition was sought before bankruptcy and collapse.\n“On an annual basis, the bank makes losses of approximately Sh1.1 billion. Its entire capital would be wiped out within the next two years hence a more painful loss should the liquidation process stall,” said Mr Odhiambo.\n“The key prudence consideration is stopping this bleeding, which affects the sacco bottom line and denies its members the rightful return on their savings, once and for all.”\nMwalimu Sacco has lost billions of shillings at Spire Bank, prompting teachers to call for offloading the lender and withdrawing their letter of support to the credit union.\nSpire Bank has been unable to access cash from peer banks due to its financial challenges.\nThe bank has been begging for additional support from its majority shareholders, Mwalimu Sacco, and the CBK to allow it to earn money to meet expenses and recover losses.\nThe CBK has been providing short-term liquidity of up to Sh1.3 billion through Reverse Repo (repurchase agreements), which is short-term and not enough to revive the lender.\nThe teachers have also been constrained by sacco laws to limit their exposure after they pumped billions of shillings into the bank over the years.\nA parliamentary probe revealed that the Sacco Societies Regulatory Authority (Sasra) stopped Mwalimu Sacco from pumping additional money into the bank after they sank billions into the lender.\nMwalimu Sacco has been supporting Spire Bank with funds after the lender accumulated losses of nearly Sh10 billion, including a Sh3.4 billion conversion of teachers’ deposits into equity.\nSpire Bank had attracted over seven potential buyers, including a local bank that confirmed interest in the lender’s good books and teachers’ membership, but the regulator turned down most of the suitors on conflict of interest and credibility issues.\nDespite uncertainties about its future, Spire Bank has pursued a turnaround on lower costs, loan recoveries and conversion of shareholder deposits into equity.\nThe bank cut its half-year net loss by 21 percent to Sh403 million despite constrained lending due to low capital and delayed resolution through the sale or finding a strategic investor.\nRead: High Court freezes Equity acquisition of Spire Bank\nIt reduced losses from Sh512.8 million in June last year on drastic cost-cutting measures that reduced interest and operational expenditure.\nInterest expense declined from Sh221 million to Sh85 million on the conversion of Sh3.4 billion deposits to equity while operating expenses declined 7.0 percent to Sh470 million.\nThe teachers’ bank has been unable to lend due to low capital ratios that have seen its loan book shrink from Sh2.3 billion to Sh1.7 billion.\nThe bank whose capital ratios are below the mandatory CBK requirements has, however, seen an improvement in its core capital from negative Sh4.1 billion in June last year to negative Sh1.7 billion currently due to the deposit to equity conversion.\nEquity becomes the latest tier-one bank to buy a struggling lender in search of new growth opportunities after KCB, which recently acquired the National Bank of Kenya (NBK). Co-operative Bank of Kenya also bought struggling microlender Jamii Bora Bank.\nSpire Bank’s non-performing loans stood at Sh2.63 billion, signalling that part of Equity’s immediate task will be to step up collections and recoveries.\nEquity has bargained for a deal that will see Mwalimu Sacco, which has been the sole shareholder in Spire Bank, settle all the redundancy costs of over 100 employees who will lose jobs following the deal.\nCBK governor Patrick Njoroge said Friday through a Kenya Gazette notice that the Spire Bank’s acquisition takes effect Tuesday.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/equity-will-get-up-to-sh510m-for-acquisition-of-spire-bank--4103612"}
{"doc_id": "51757d2873e7b40c0396be6a896618e7", "text": "Despite having the worst year of load shedding in 2023, and many analysts noting it is firmly here to stay in 2024, South Africans must prepare for another double-digit Eskom tariff increase this year.\nIn December 2023, the High Court of South Africa rejected the requests for a judicial review on the revenue decision and tariff approval made by The National Energy Regulator of South Africa (Nersa) regarding Eskom’s fifth MultiYear Price Determination (MYPD5) application for the 2023/24 and 2024/25 fiscal years.\nThe judgement followed applications by the Democratic Alliance (DA) and the South African Local Government Association (Salga) to review the Nersa decision on Eskom’s MYPD5 revenue application.\nThe High Court found that “when all is considered and the detailed and extensive reasons furnished by Nersa is compared with the attacks on its decisions, none of the review grounds pass muster,” the court said.\n“All relevant factors have properly and in detail been considered, the conclusions reached were neither arbitrary nor irrational, and the issue of cross-subsidisation was considered at the appropriate stage,” it added.\nTherefore, The High Court found that both the DA and Salga review applications must fail.\nThis means Nersa’s approved 18.65% increase in electricity prices for 2023 and 12.74% hike effective April 2024 will stand.\nThis is even though Eskom has failed to meet key conditions placed on it by Nersa aligned with its MYPD5, according to independent energy analyst Pieter Jordaan.\nDue to the high cost of the diesel fuel used in Open Cycle Gas Turbines (OCGTs), an average utilisation rate – also called a load factor – of 1% is typically regarded as the utility-scale standard for this energy supply.\nIn Eskom’s price determination, due to the worsening power situation in South Africa, Nersa relaxed the 2023/24 load factor to 6%. This relaxation was conditional on Eskom reducing its breakdowns (UCLF) from 31% (2022/23 FY) to 20% and improving plant availability (EAF) from 57% (2022/23 FY) to 65%.\nHowever, Eskom has failed to meet these conditions for the 2023/24 financial year to date, with UCLF averages at 33% and EAF at 55%. Meanwhile, the OCGT load factor stands at 20%.\nEskom in dangerous territory\nFormer Eskom CEO Andre de Ruyter noted last month that while the R254 billion debt-relief package is essential for Eskom’s recovery, it alone would not be enough.\nHe mentioned that he would have included one more requirement in the debt relief package: that Eskom obtains cost-reflective tariffs from Nersa, which has often granted Eskom less than what it has asked for.\n“If we do not get them, Eskom doesn’t get cost-reflective tariffs, then in three to four years’ time, the entity will be back at Treasury’s door with a begging bowl, asking for more, because its costs will be higher than its revenues,” he said.\nHowever, on the flip side, De Ruyter said that Eskom’s current path would see an end-point where the utility will eventually be left with a customer base of people who cannot afford electricity and, therefore, don’t pay for it.\nEchoing similar sentiments, Jordaan said the recent democratisation and decarbonisation of electricity production, driven by the private sector, means that future price hikes will price Eskom out of the market – as many would simply move to alternative sources of energy.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/energy/742375/another-massive-electricity-price-hike-hitting-south-africans-soon/"}
{"doc_id": "25f768b338811ef6297915c74028eb79", "text": "Are you about to start a new business? Well, congratulations in advance. Now, you’ll have to put a lot of thought into how you are going to price your products and/or services. It takes more than calculating your costs to set a price. It requires research and understanding consumers and the market.\nTo fix an effective price, you have to consider the following:\nThe production and distribution costs\nWhat consumers are willing and able to pay for your product\nWhat competitors are doing\nMarket conditions\nYour profit margin\nThere are different pricing strategies available to you. Each one depends on the factors mentioned above. Knowing what you want to achieve either as a startup or as a growing business will help you choose the right one.\nWant to get those goods off the shelf? Then you need a pricing strategy. This simply has to the different methods with which you can fix a competitive price for your goods and services. With the right pricing strategy, you can attract and retain customers, and be able to maximize your profit. Here are 10 you can choose from:\nPricing for market penetration\nPsychological pricing\nPremium pricing\nValue-based pricing\nPromotional pricing\nGeographical pricing\nCaptive pricing\nEconomy pricing\nPrice skimming\nBundle/product line pricing\nLet’s get right to it, shall we?\nPricing for market penetration\nAs a new business, the biggest challenge you might face is convincing consumers to patronize you. They already have established businesses they’ve been buying from. In such a scenario, you can use market penetration pricing to create brand awareness and gain market share. It involves setting a lower price than your competitors or providing some free services until you earn a considerable customer base.\nFor instance, if competitors sell for 100 naira, you can sell yours for 95 naira. You could also do a giveaway or offer free delivery as a way of introducing yourself to the market. Adopting this pricing strategy may mean you have to endure some initial income loss but it will help you draw attention to your product, set up a customer base, and gain consumer loyalty. It may even boost your profit over time due to an increase in sales.\nAfter you’ve succeeded in penetrating the market, you can then increase your price to reflect the value of your product.\nThis type of pricing is meant to trigger an emotional, rather than a logical response in a buyer.\nFor instance, setting a price of 199 naira instead of 200 naira will create an illusion of a cheaper price, although the difference is only 1 naira. This often works because buyers notice the first number on a price tag more than the last.\nPsychological pricing makes consumers feel like they’ve saved money or received greater value.\nAnother example of psychological pricing is when competitors are increasing their price (perhaps because of an increase in production cost) but you reduce your quantity/quality and keep price the same.\nPremium pricing\nYou can use this pricing technique when you have a unique product or service no one can compete with. It has to do with setting a high price for your offers, which creates an impression of value in the minds of consumers.\nBut to ensure that buyers perceive your offer to be worth the price, a lot of factors such as high quality, fresh experience, packaging, and marketing strategy all have to combine to support the premium price.\nThis type of pricing is often used for luxury cars, 5-star hotels, precious stones and jewelry, fancy restaurants, pleasure cruises, etc. The higher the price set for such products and services, the higher the perceived value amongst consumers.\nValue-based pricing\nWhat people are willing to pay for your product or service has a lot to do with what it’s worth in their eyes. Recognizing this and setting a commensurate price is known as value-based pricing.\nThe perceived value to a consumer depends on how the product or service meets their wants and needs.\nPromotional pricing\nPromotional pricing is a very popular pricing technique. Though it’s an old concept, it remains successful to date.\nIt involves promoting a new or existing product or service by offering discounts, buy one and get one free deals, attaching a gift, etc. It is very effective in driving sales.\nThis strategy works best with a deadline or offering a limited stock. It motivates buyers to act fast by playing on their fear of missing out.\nYou can use promotional pricing to create excitement for your product/service. It may even lend you customer loyalty.\nYou can change the price of your product when you expand your business to a new state or country. Location affects price due to factors like shipping costs, market demand, cost of raw materials, tax, currency exchange rate, and so on.\nLet’s take some examples, if you sell sweaters during harmattan season, the price tag will be lower in the east than in the north. Why? People will still be willing to buy despite the high price due to the much colder climate in the north.\nSupply and demand also determine geographical pricing. If you move to an area where your product is scarce, it is expected that your price will go up.\nAlso when the government in an area imposes high tax so as to generate revenue, the product will be more expensive than in other areas where tax is low.\nCaptive pricing\nIf you sell products that customers have to update or renew regularly, then you should consider captive pricing.\nLet’s take an inkjet printer as an example. When you buy the printer, you’ll need to replace the ink cartridge once in a while. Without the cartridge, the printer cannot be used.\nThe buyer has no other option than to keep purchasing the cartridge. Thus, the manufacturer holds customers “captive” unless they decide to stop using the printer.\nThey can keep increasing the price of the secondary product as long as it does not exceed the point where the customer is forced to purchase a new printer from another manufacturer.\nAnother example is when car owners have to get a driver’s license.\nEconomy pricing\nThis pricing strategy involves keeping your production and marketing costs as low as possible with the intention of selling at a comparatively lower price and still be able to make profit. It is used to attract price-conscious consumers.\nEconomy pricing can be adopted by large businesses but is not advisable for startups and small businesses. The reason is that the latter lack the sales volume which bigger companies enjoy. Also, producing on a large scale helps lower costs and small businesses won’t be able to do that. Another reason is that economy pricing often involves forgoing branding. As a startup or small business, branding is important to create awareness and differentiation for your product.\nPrice skimming\nPrice skimming is used when a new product is released in the market. It has to do with setting an initial high price and reducing it gradually as more people adopt the product and competitors begin to enter the market.\nThis pricing strategy can be seen with the introduction of new models of smart phones, TVs, cars, and so on.\nIt provides the benefit of maximizing profit on early adopters, enabling you to recoup the cost of developing the product. You can then lower the price subsequently so as to attract more price-sensitive consumers.\nPrice skimming creates a sense of exclusivity and quality when the product first enters the market.\nBundle/ product line pricing\nTo push out inventory fast, you can offer a bundle of products at a cheaper price than what it would cost the consumer to purchase each item alone. For instance, if you sell hair cream and hair brushes, you can offer both together at a lower total price than if the buyer was to purchase the cream alone or the hair brush alone.\nThis pricing strategy helps improve the perceived value of your offers since customers will feel like they are getting more for their money. It is also helpful in increasing sales for a slow-selling product by offering it alongside another that sells fast.\nBottom line\nDepending on your business goals, there are a number of factors you should consider before setting a price for your product or service. A good pricing strategy is essential in ensuring you make adequate returns and keep your business afloat or ahead of the competition.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2019/08/08/10-pricing-strategies-you-need-to-know-as-a-small-business-owner/"}
{"doc_id": "7017b298edac43d9bf1d6b1d7540bdb1", "text": "The current concern surrounding ‘fake news’ may be mostly centered on its influence on political outcomes, including elections; but there are also consequences for consumers and investors.\nThis sentiment is shared by the Governor of the Reserve Bank of Zimbabwe, Dr. John Mangudya who is lamenting the negative impact of fake news on the economy. Unsuspecting people are being led to make decisions they would not have made had they known that whatever information they are using to make decisions is fake. Dr. John Mangudya said;\nThe cost of fake social media articles is horrendous in terms of economic, financial, social and political costs to the economy. The cost to the economy of such unfortunate messages far exceeds the explicit cost of around $800 per advert that we place in the media. Wrong decisions that people make due to fake news is beyond measure\nThe Governor may have been saying this with reference to the recent fake article which said that the central bank was going to reintroduce a new currency last week. Yes, fake news has horrendous effects in the social and political sphere. But I wouldn’t go as far as to say the same (horrendous) in the financial or economic sphere.\nThe average consumer could be affected by the fake news since they make day to day decisions which are routine and hardly need too much consideration. However, in many ways, fake news has made consumers smarter. They are more skeptical of the reliability of the information they receive, especially online. Hence, they end up not making buying decisions based on fake news.\nAlso, I hardly think investors who usually commit a lot of money are hardly victims of fakes news as they have to exercise ‘extra due diligence’ before committing their money.\nFinancial gains through fake news\nSometimes fake news is intentional. This kind of news can get so much traffic it trends, and earn thousands in advertisement revenue. What’s worse, fake news is sneaked into our everyday lives with such subtlety most people don’t know it’s there. Adverts published by media outlets and social networks warn everyone to watch out for fake news, but when the mediums themselves are used to facilitate misleading information, things start to get confusing.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2018/07/the-cost-of-social-media-fake-news-to-the-economy-is-horrendous-says-rbz-governor-john-mangudya/"}
{"doc_id": "bdc78a73e61b11d88d2f6fa1e441037f", "text": "Dr Patrick Njoroge, the Governor of the Central Bank of Kenya (CBK) was named the African Central Bank Governor of the Year at the 10th African Banker Awards.\nNjoroge was lauded for cleaning up the country’s banking sector through improved supervision.\nThe CBK Governor emerged top for his integrity and the Judges at the fete praised him for re-establishing order in Kenya’s banking industry.\nThe awards, which are held annually as part of the Annual Meetings of the African Development Bank, celebrate the continent’s excellence in banking and finance. Winners of this year’s awards were selected from over 200 entries from across the continent.\nGovernor Njoroge, who was appointed CBK Governor last year, had dedicated the award he won to the youth of Africa.\n“FSD Kenya is proud to work with the Central Bank of Kenya and would like to congratulate Governor Njoroge on this award,” indicated AfDB statement.\nThe AfDB termed him an exceptional leader. The award is given to governors who successfully reform the financial sectors of their countries through proper regulation and policies.\nNjoroge has taken lead role in pushing banks to lower borrowing costs and has since taking office also stepped up scrutiny of lenders to protect depositors’ interests.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2000219054/central-bank-governor-dr-patrick-njoroge-wins-top-honours"}
{"doc_id": "69fcbf2d8e7cc8d2dfe269e7abe972c5", "text": "Nigeria’s health sector can match that of other developed countries in the coming political dispensation if advises by the country’s best brains in the sector are followed. In this sequel, Martin’s Ifijeh, who spoke to high powered healthcare stakeholders shared their various advisory templates which if implemented, would put the country’s healthcare on the global map\nWith improved healthcare the future of the Nigerian child is guaranteed\nA former Minister for Public Health, Ecuador, Carina Vance Mafla, in one of the Early Childhood Development programmes held in Columbia University, New York, United States, which THISDAY attended, emphasised that the level of development and economic strength of countries were no longer determined based on how much money they have in their reserves, or how many roads they have built or how much modern structures they have in place, but by how much the people were living in good health, as well as their level of human capital development.\nWhat this means is that countries who are solely pushing for economic development without prioritising their healthcare and the human capital of their people have no business projecting to become developed nations, as only a healthy people can truly learn, then improve the economy of their nation.\nThis is one reason countries like Nigeria, despite their continuous push for a better economy, better security and a stronger nation, have made little progress because the core of the challenge has not been given priority.\nFor instance, a country which ritually proposes for a better economy every single year would not have over 11 million of its child population grow in malnutrition and by consequence have a reduced brain capacity. Such a country would not allow children who can change the country’s narrative for the better die before their fifth birthday because of lack of proper healthcare. It would also not allow youths who should contribute to the economy die due to pregnancy complications, Human Immuno-Virus (HIV), cholera, Lassa fever, and the likes.\nUnfortunately, this has been the case with Nigeria since 1999 when the country returned to a democratic government; a scenario that portends stagnation and a clear danger to every leader that strives to govern the nation of over 200 million people.\nBut as the country again choose its leaders that would run the affairs of the nation and the various states for the next four years, best brains in the Nigerian health sector have volunteered to share advisory templates on how best to put the country on the global map and in a push towards becoming a developed nation.\nThey are unanimous in one thing: ‘To fix Nigeria, fix healthcare and improve the human capital of the people’. They believe that no matter what a new government does, if healthcare is not given the priority it deserves, the country will remain in stagnation.\nBut they are also quick to warn that these templates can only be feasible in the face of an enabling policy environment driven by committed leadership and a government that is sincere about its human capital agenda.\nThey are also of the opinion that Nigerians, armed with their Permanent Voters Cards (PVCs) should vote in leaders with interest in their health and human capital development, right from presidency up to their local government representatives.\nNational Nutrition Agenda\nEver wondered why some countries are developed and economically stable with everything working for them, while others continue to labour to gain the same established economy without success? Wonder no further. Some nations address the root cause of poor economy right from the childhood of their citizens through proper and adequate nutrition, while others focus on other areas that have no direct bearing on the mental and physical development of their young citizens.\nThis is because several studies, including a report by the American Society of Nutrition, have established a link between adequate nutrition before a child’s fifth birthday and the child’s high intelligent quotient and his ability to contribute meaningfully to the society around him.\nThe study shows that a well nourished under-five year old child would develop a high cognitive prowess and physical capacity to add to a country’s Gross Domestic Product (GDP) through proper learning and decision making abilities, while a malnourished child may grow up to become suboptimal adult with under-performing economic abilities later in life, which on the long run would affect the economic strength of the country negatively.\nTejuoso is Nigeria’s Chairman, Senate Committee on Health\nFor instance, global childhood development experts believed the economy of the United States continue to maintain consistency largely because chronic malnutrition, otherwise known as stunting, which alters the mental and physical health developmental process of children under five is hardly associated with the country, hence children grow into adults with full potential to learn and add their quota to the country’s economy.\nBut the same cannot be said of most developing countries, especially in Africa and Asia where over 90 per cent of the approximately 170 million stunted children of under five years come from.\nWhile Asia accounts for 56 per cent of stunted children globally, Africa accounts for 36 per cent, according to the WHO; a fact which experts have used to argue that most Asian and African countries remain the less economically strong nations of the world because of chronic malnutrition.\nSadly in Africa, Nigeria, which prides itself as the giant of the continent has the highest burden of the condition with over 11 million children said to be stunted with little or no attention by stakeholders and the government to address the scourge.\nExperts say with the level of stunting in the country, if not tackled as quickly as possible, Nigeria may never grow into a developed country as envisaged.\nNo wonder the Chairman, Senate Committee on Health, Dr. Lanre Tejuoso, in sharing his nutrition template with THISDAY, predicted an economic boom for the country in the incoming political year, if malnutrition is tackled head on across the country.\nHe said the future of the country lies in its children, and that malnutrition, over the years, has continued to hamper the the future, survival and development of these children.\nTejuoso, said, “We need to take the issue of malnutrition more seriously now. Malnutrition has a high economic and health cost and a return of $16 for every $1 invested. Making nutrition a priority requires more attention and more funding.\nThus, if Nigeria is to reverse the current trend of malnutrition, we need to consider a lot of things.\nStrengthen Leadership and Accountability for Nutrition\nFor Tejuoso, who has championed a number of causes in the red chamber to ensure malnutrition is eradicated from Nigeria, nutrition is coordinated through the Ministry of Budget and National Planning and by the food and nutrition committees at state levels, but noted that there was inadequate capacity and leadership in these entities to effectively mobilize and coordinate nutrition actors around the national nutrition policy.\nHe said the incoming government should look towards the area of reform as this was needed in increasing the national and state leadership for nutrition.\n“Such reform should aim for a unified coordination entity, placed in the right institution with enough capacity and power and a clear link with the National Council for Nutrition. A coordinated and multi-sectoral approach is needed for Nigeria to address all forms of malnutrition in an integrated manner across the life cycle,” he said.\nEnsure Pre-visible and Sustained Funding\nThe senator said: “Addressing malnutrition in Nigeria requires long term significant investment of financial resources from both the federal and state levels of government. For this to happen, the government, through the National Council of Nutrition, needs to ensure line ministries whose actions impact on nutrition and states; have budget lines for nutrition; allocate and release adequate budget every year; and then use the funds to contribute to the implementation of the national strategy plan for Nutrition.\nStrengthen System for Service Delivery of Nutrition Interventions\nOn his advisory template, Tejuoso calls on the incoming government to approve for full implementation of multi-sectoral strategic plan of action for food and nutrition in Nigeria at all levels.\nHe said: “For nutrition specific interventions to be delivered at scale, it is critical to ensure that they are mainstreamed in the health system with a strong community component and appropriately motivated and skilled personnel. The federal government recently included most of the nutrition commodities in the Essential Medicine Lists (EMLs) and launched the CHIPS initiative. These are promising steps, however, States especially those most affected by malnutrition, still need to adopt and quickly roll out the CHIPS programme and ensure that the nutrition commodities (Ready-to-use Therapeutic foods; vitamin A, iron folate, micronutrients powder, etc.) form part of their procurement planning and implementation,” he added.\nMulti-Stakeholder Engagement and Partnerships\nThe senate committee chairman on health the new government should address the underlying causes of malnutrition with integrated, multisectoral programming that supports the overall health and wellbeing of families and communities.\nHe said the federal government, as well as states should collaborate with relevant stakeholders active in nutrition, including the civil society sector and community-based organisations for demand creation for nutrition services.\n“Government should also partner with the private sector and businesses to support nutrition related interventions as part of efforts to prevent and treat under-nutrition, such as food fortification, agricultural value chain development, access to water, sanitation and hygiene etc.”\nNutrition Information System\n“The nutrition information system must be in place across relevant ministries, departments and agencies to regularly collect, analyses and impact level indicators to assess the implementation of the national nutrition plan, track progress toward the reduction of all forms of malnutrition and guide the development of evidence based policies and strategies,” he said.\nStrengthen Community Nutrition Services\nEstablish a mechanism to ensure access and delivery of nutrition services (both preventive and curative services) through the community platform.\nHe said the various governments at all levels should increase partnership and engagement with the gate keepers, option leaders, religious and traditional institutions as change agents using the social behavioral change communication strategies to influence community members to improve knowledge, attitude, beliefs, behaviors and practices that are favorable to improving nutrition outcomes of the citizens\nHe also said for Nigeria to be malnutrition-free post 2019, the government should make full appropriation for the funding of nutrition commodities for the millions of children suffering from acute malnutrition as a matter of urgency.\nPharma Sector Agenda\nNigeria’s pharmaceutical sector is one of the least harnessed areas of healthcare the Nigerian government is yet to fully tap into considering the return on investment this would bring into the country. Many have regarded it as a multi-billion dollar investment Nigeria hasn’t harnessed.\nSharing the pharmaceutical sector agenda for the incoming governments at all levels, the Director General, Chief Executive Officer, National Institute for Pharmaceutical Research and Development (NIPRD), Dr. Obi Peter Adigwe believes the sector has all it takes to address some of the healthcare challenges in the country, as well as boost Nigeria’s economy to a high margin if well harnessed.\nAdigwe is a pharma sector expert and DG NIPRD\nLocal Production of Essential Medicines\nAdigwe said on local production of essential medicines, the Nigeria’s National Drug Policy stipulates that the nation should aim to produce at least two thirds of its essential drug needs through local manufacturing of drugs and commodities, adding that unfortunately, this target has not been achieved.\n“Currently, local manufacture of drugs produces only about a third of the nation’s drug requirements. There is now a desperate need for policy coherence if the country is to achieve this target. A robust and comprehensive incentive framework will also expedite local production of essential medicines.\n“Recently, significant effort was made by government’s partnership with a local company, to improve local capacity in the local production of vaccines and biologicals.”\nHe said to build on this, the incoming government should have a proactive strategy which will be adopted to ensure that this development results in sustainable access to safe, affordable and high quality healthcare. He said research and development activities will need to be prioritised, especially with respect to capacity building, policymaking, data collation and the development of contextual partnerships that can expedite local production of products for diseases and conditions prevalent in our setting.\nThe DG said the National Institute for Pharmaceutical Research and Development has now begun to develop capacities and competencies to spearhead this.\nAggressive and Contextual Research and Development Strategy\nAdigwe emphasised that an evidence based approach has been proven to be the most effective and efficient means of addressing the complexities that characterise healthcare provision, noting that currently, research and development agencies struggle with the funding inadequacies required to undertake statutory functions and responsibilities.\nHe said this was therefore of critical importance to develop sustainable funding strategies, emphasising that decisions in the healthcare setting should also be routinely underpinned by appropriate evidence generated by contextual research.\nGovernment Patronage and Supportive Regulatory Regime\nAdigwe said: “Although Executive Order number three section 4F specifically directs that locally produced drugs and medicaments are given priority in procurement of drugs by the public sector. There is little evidence to indicate that this is being faithfully implemented. Instituting a more robust and comprehensive monitoring mechanism which includes all relevant stakeholders will enable the achievement of this policy. Regulatory Agencies also need to be more responsive to the needs of the sector so as to improve the ease of doing business\nCover Leakages in National Drug Distribution System\nAdigwe also pointed out that weaknesses and leakages in the national drug distribution architecture was one of the key reasons why there was now a widespread misuse and abuse of opioids and other substances with potential for abuse.\nHe said: “If left unchecked, the emergent drug abuse epidemic will result in detrimental effects for national healthcare, together with negative socioeconomic implications especially with respect to security and criminality. Government has now begun to develop a comprehensive National strategy to address this menace. It is however important that policies and initiatives that are instituted be underpinned by the relevant contextual evidence.”\nEncourage Local Production of APIs and Excipients\nAdigwe, who was the former executive secretary of PMGMAN, said currently, despite the significant potential, there was still no Active Pharmaceutical Ingredient (API) produced anywhere in Nigeria, noting that NIPRD has therefore started engaging key stakeholders in the Petroleum Upstream Industry to enable the local production of APIs and other relevant excipients.\n“It is now of critical importance that other stakeholders dovetail their efforts with this initiative to help achieve this objective that will confirm Nigeria as the hub for pharmaceutical manufacturing on the continent,” he said.\nHarness Value Chain Creation Potential\nHe called on the incoming government to harness the value chain creation potential of the country’s pharmaceutical sector. “There is evidence that suggests that the pharmaceutical sector is associated with some of the highest value addition chains, in terms of backwards integration and ancillary sector development. Research has shown that for every job created in the pharmaceutical manufacturing sector, between five to 10 corresponding jobs are created in the wider economy. If properly harnessed, this can catalyse relevant national development in various relevant areas such as employment generation, human capacity building and knowledge transfer.”\nHarnessing Natural Resources with Ethnopharmaceutical Potential\nAdigwe said “Close to 10,000 plants with ethno-medicinal and ethno-pharmaceutical potential have been documented in Nigeria. However, despite the significant potential benefit to national healthcare and socioeconomic development, not enough effort has been put in to harness these natural resources. On our part in NIPRD, we have now developed the Contextual Processing Protocol that aims at harnessing these natural resources for improved healthcare access, while at the same time improving socioeconomic indices such as job creation, income generation and capacity building for the state, stakeholders and participants.”\nIndustrial Harmony in the Healthcare Sector\nThe DG is also of the opinion that a significant amount of resources is wasted every year when healthcare professionals go on strike actions, adding that more importantly, access to medicines and healthcare greatly diminishes during these industrial actions.\nHe said: “All these contribute to a loss of confidence in the system. A proactive strategy needs to be developed to engage all key stakeholders in a bid to come to a lasting solution,” he advised.\nAddress Threat of Non Communicable Diseases\nAdigwe believes Nigeria now has one of the highest obesity figures in this part of the world. This, he said was in turn spurring a growing incidence of non-communicable diseases, amidst the still significant communicable disease burden in the country.\n“Unless a contextual national proactive strategy is developed and religiously implemented, this double disease burden can potentially worsen national healthcare together with associated human development indices. Effort should be made to enable the rapid development of innovative preventative Public Health strategies together with the relevant Medicines and Commodities component. Some areas of focus include nutrition, maternal and child health,” he said.\nSustainable Provision of Safe, Affordable High Quality Medicines\nHe also called for a robust and comprehensive framework requiring multi-stakeholder engagement and contribution, as this was necessary to enable expedited improvement of the quality of medicines available in Nigeria. This, he said includes better regulation and surveillance of imported products, alongside Good Manufacturing Practices (GMP) in medicines’ and commodities’ production.\nAdigwe said if all these are judiciously implemented as the country moves into another political dispensation, Nigeria’s pharmaceutical sector will be the envy of many countries including developed nations.\nDevelopment Partners’ Expectations\nThe Co-chair, Health Development Partners Group, Dr. Chris Lewis said as the country moves into another political dispensation, the group would continue to push for a number of priorities they have been pushing for a number of years, which they believed would address healthcare issues in the country.\nHe said one of the areas is the Basic Healthcare Provisions Fund (BHCPF) which is critical in the provision of basic healthcare to Nigerians. “We pushed for it in the 2018 budget, and we will continue to push for its implementation even with the incoming administration.\n“We will also continue to push for increase in health budget in both federal and state levels. For that to happen, there needs to be domestic mobilisation of resources as well as regular releases of health budgets which we are also advocating for.”\nLewis is an advocate for better healthcare\nHe said the other area they would continue to push for is that government improves the efficiency of health services, as well as the prioritisation of health budget towards the lower cost and high impact areas of healthcare, such as primary health care, among others.\nNational Template on Non Communicable Disease\nAs different experts continue to proffer advices on how best to run the health sector in the next political dispensation, a Public Health Physician and Health Systems Specialist, United States, Dr. Ekpenyong Ekanem says a comprehensive advisory templates will not be complete without an agenda for addressing non communicable disease, which is now on the rise on Nigeria.\nHe said for government to effectively fight NCDs, the new government should ensure a sustained funding of the one per cent consolidated revenue fund to enable it improve health coverage, adding that this in turn will help NCD epidemiology since many of which is handled at the primary health care center.\nHe said: “We should also ensure benefit packages at state level health insurance schemes are robust enough to cover the common neglected tropical diseases and NCDs, such as hypertension and non-complicated diabetes.\n“We should also ensure we put in place functional primary healthcare centers which will improve service delivery at the grassroot level, and reduce burden of these illnesses,” he added.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2019/02/28/setting-healthcare-agenda-for-nigeria-2"}
{"doc_id": "7f8cad5ae0645cfa680f0263540fe3ee", "text": "Irregular and changing rainfall patterns are causing widespread fear amongst farmers as farmers gather in groups to seek spiritual assistance, Businessday investigation shows.\nThe investigation showed that most of the farms in the South-West, especially those farmers that planted early in the year are worst affected as the crops are wilting away even as some are already drying due to irregular and changing rainfall patterns.\nMichael Adenigbagbe a cucumber farmer, in an interview with BusinessDay, said “I have being going to the church to pray for rainfall. I farm cucumber and it needs a lot of water for my plant to grow well and it has not been raining since July.”\n“If I knew the rains will not be falling I would have done irrigation farming. Since I did not farm with irrigation, I will prayerfully wait for the rains,” he adds.\nAnother farmer, Africanfarmer Mogaji, chief executive officer, X-Ray Farms , said, “Yam farmers gather in their cluster for community prayers to pray for rainfall in Sepeteri, Oyo state recently.”\nMogaji further stated “It is a very serious matter when you see farmers gather in their clusters to pray for rainfall. The last corn planting for the year is usually in July but now, it did not rain properly in July and now we are in August which is August break, most of the farmers are praying for rains.”\nThis is the case of most farmers across the country who did not farm using irrigation. Food prices have also been on the increase across the country and it may even increase further at the end of the year due to poor harvest farmers are likely experience as irregular rainfalls continues, according to industry watchers. “Tomatoes reached an all time high this year selling between N30, 000 to N34, 000 for a 50kg basket and climate change is part of the problem,” Mogaji said.\nConsumer inflation rose to 9.2 percent year- on- year in July at the same rate for the second consecutive month as a result of muted rises in the food and non alcoholic beverages, according to the National Bureau of Statistics (NBS).\nFood inflation remained at 10 per cent year-on-year in July, unchanged from June, as slower increases in the some food categories such as meat and fruits weighed on the index, it said.\nA total of N738 billion worth of agricultural products was imported into the country in the first quarter 2015, NBS said in its latest foreign trade reports.\nJosephine Okojie", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/agriculture/article/farmers-explore-alternatives-as-irregular-rainfall-threatens-production/"}
{"doc_id": "dd0926291574de25ffd5eb045a34bd27", "text": "Bennett Oghifo\nA new report by the UN Environment Programme (UNEP) finds that green pandemic recovery could cut up to 25 per cent off predicted 2030 greenhouse gas emissions and bring the world closer to meeting the 2°C goal of the Paris Agreement on Climate Change,.\nUNEP’s annual Emissions Gap Report 2020, released late December, finds that, despite a dip in 2020 carbon dioxide emissions caused by the COVID-19 pandemic, the world is still heading for a temperature rise in excess of 3°C this century.\nHowever, if governments invest in climate action as part of pandemic recovery and solidify emerging net-zero commitments with strengthened pledges at the next climate meeting – taking place in Glasgow in November 2021 – they can bring emissions to levels broadly consistent with the 2°C goal.\nBy combining a green pandemic recovery with swift moves to include new net-zero commitments in updated Nationally Determined Contributions (NDCs) under the Paris Agreement, and following up with rapid, stronger action, governments could still attain the more-ambitious 1.5°C goal.\n“The year 2020 is on course to be one of the warmest on record, while wildfires, storms and droughts continue to wreak havoc,” said Inger Andersen, UNEP’s Executive Director. “However, UNEP’s Emissions Gap report shows that a green pandemic recovery can take a huge slice out of greenhouse gas emissions and help slow climate change. I urge governments to back a green recovery in the next stage of COVID-19 fiscal interventions and raise significantly their climate ambitions in 2021.”\nEach year, the Emissions Gap Report assesses the gap between anticipated emissions and levels consistent with the Paris Agreement goals of limiting global warming this century to well below 2°C and pursuing 1.5°C. The report finds that in 2019 total greenhouse gas emissions, including land-use change, reached a new high of 59.1 gigatonnes of CO2 equivalent (GtCO2e). Global greenhouse gas emissions have grown 1.4 per cent per year since 2010 on average, with a more rapid increase of 2.6 per cent in 2019 due to a large increase in forest fires.\nAs a result of reduced travel, lower industrial activity and lower electricity generation this year due to the pandemic, carbon dioxide emissions are predicted to fall up to 7 per cent in 2020. However, this dip only translates to a 0.01°C reduction of global warming by 2050. Meanwhile, NDCs remain inadequate.\nGreen recovery critical\nA green pandemic recovery, however, can cut up to 25 per cent off the emissions we would expect to see in 2030 based on policies in place before COVID-19. A green recovery would put emissions in 2030 at 44 GtCO2e, instead of the predicted 59 GtCO2e – far outstripping emission reductions foreseen in unconditional NDCs, which leave the world on track for a 3.2°C temperature rise.\nSuch a green recovery would put emissions within the range that gives a 66 per cent chance of holding temperatures to below 2°C, but would still be insufficient to achieve the 1.5°C goal.\nMeasures to prioritise in green fiscal recovery include direct support for zero-emissions technologies and infrastructure, reducing fossil fuel subsidies, no new coal plants, and promoting nature-based solutions – including large-scale landscape restoration and reforestation.\nSo far, the report finds, action on a green fiscal recovery has been limited. Around one-quarter of G20 members have dedicated shares of their spending, up to 3 per cent of GDP, to low-carbon measures.\nThere nonetheless remains a significant opportunity for countries to implement green policies and programmes. Governments must take this opportunity in the next stage of COVID-19 fiscal interventions, the report finds.\nThe report also finds that the growing number of countries committing to net-zero emissions goals by mid-century is a “significant and encouraging development”. At the time of report completion, 126 countries covering 51 per cent of global greenhouse gas emissions had adopted, announced or were considering net-zero goals.\nTo remain feasible and credible, however, these commitments must be urgently translated into strong near-term policies and action and reflected in NDCs. The levels of ambition in the Paris Agreement still must be roughly tripled for the 2°C pathway and increased at least fivefold for the 1.5°C pathway.\nReforming consumption behaviour critical\nEach year the report also looks at the potential of specific sectors. In 2020, it considers consumer behaviour and the shipping and aviation sectors.\nThe shipping and aviation sectors, which account for 5 per cent of global emissions, also require attention. Improvements in technology and operations can increase fuel efficiency, but projected increases in demand mean this will not result in decarbonisation and absolute reductions of CO2. Both sectors need to combine energy efficiency with a rapid transition away from fossil fuel, the report finds.\nThe report finds that stronger climate action must include changes in consumption behaviour by the private sector and individuals. Around two-thirds of global emissions are linked to private households, when using consumption-based accounting.\nThe wealthy bear greatest responsibility: the emissions of the richest one per cent of the global population account for more than twice the combined share of the poorest 50 per cent. This group will need to reduce its footprint by a factor of 30 to stay in line with the Paris Agreement targets.\nPossible actions to support and enable lower carbon consumption include replacing domestic short haul flights with rail, incentives and infrastructure to enable cycling and car-sharing, improving the energy efficiency of housing and policies to reduce food waste.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2021/01/05/green-pandemic-recovery-essential-to-close-climate-action-gap-says-un-report"}
{"doc_id": "dd8966e4b64971ac1922cfcc9d995236", "text": "What you need to know:\n- In 2014, container traffic volumes at the port of Mombasa surpassed the one million mark, signalling robust economic performance for Kenya and other countries in the region. This feat is testimony to the remarkable journey the port has made since 1975, when it recorded its first sizeable container volumes at 1,278 TEUs.\n- This historic milestone, like many others, makes it even more poignant that the port of Mombasa, the gateway to the region, could build on the growth of the past five years to handle one million TEUs in 2014.\n- The upshot is that actual performance in 2014 was aligned with the underlying economic fundamentals. In crossing the one-million mark, Mombasa has firmly cemented its place among the world’s leading ports.\nThe transportation of goods in standardised steel containers commonly known as twenty-foot-equivalent units (TEUs) is a relatively recent phenomenon in maritime trade.\nWhereas TEUs gained global currency in the late 1950s, it was not until the 1970s that Kenya registered sizeable volumes of container traffic.\nContainer volumes, and indeed port traffic, is a useful barometer of a country’s or geographical region’s economic performance. As the domestic or regional economy grows, so does the volume of goods passing through the port.\nIn 2014, container traffic volumes at the port of Mombasa surpassed the one million mark, signalling robust economic performance for Kenya and other countries in the region. This feat is testimony to the remarkable journey the port has made since 1975, when it recorded its first sizeable container volumes at 1,278 TEUs.\nThis historic milestone, like many others, makes it even more poignant that the port of Mombasa, the gateway to the region, could build on the growth of the past five years to handle one million TEUs in 2014.\nTo get a clearer picture of the port’s growth, one needs to go back to the underlying trends. The past decade has seen Mombasa register exponential growth in container volumes. In 2002, it recorded 305,427 TEUs, rising to 615,733 in 2008 and 894,000 in 2013, an annual growth rate of 10.8 per cent. In 2012, the projected growth rate was surpassed, reaching 903,463 TEUs.\nOne reason for this is that 2012 was a pre-election year. One sees a similar trend in 2006 and 2007, when container traffic increased by 22 per cent, only to drop to 5.8 per cent in 2008 following the post-election violence.\nECONOMIC FORTUNES\nApplying the estimated 7.1 per cent increase, container traffic for 2014 should have been 959,616 TEUs, but it shot past the one-million mark as a result of the upswing in the country’s economic fortunes following the peaceful 2013 General Election.\nThe port defied predictions by moving 1,004,500 TEUs, representing 12.1 per cent growth compared to 894,000 TEUs in 2013, a rate that is almost 1.5 times the global maritime container traffic growth for that year.\nThis “over-heating” is indicative of the immense activity generated by the (regional) economy served by the port of Mombasa. The 44,500 TEUs above the expected throughput of 2014 can be attributed to confidence in the prevailing economic climate. This is further underscored by accelerated regional integration resulting in increased growth and development.\nThe upshot is that actual performance in 2014 was aligned with the underlying economic fundamentals. In crossing the one-million mark, Mombasa has firmly cemented its place among the world’s leading ports.\nTo match this new reality, pressure should be managed systematically through harmonised interventions in the port hinterland that stretches all the way to the Great Lakes Region. One such intervention is to eliminate or minimise non-tariff barriers. Also, road and rail infrastructure will need to be in good shape and incidental statutory interventions optimised on the Northern Corridor.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nation.africa/oped/Opinion/Mombasa-port-has-finally-come-of-age/440808-2594948-blcvjy/index.html"}
{"doc_id": "7d19605ab73abfafafcb50d948ffa024", "text": "There has been a lot of talk about Africa’s rising economic prosperity and whether it is sustainable and deeply rooted in reducing extreme poverty across the continent. So, I sat down to answer some basic fundamental questions that I often get asked about Africa’s growth and development.\nWhy does Africa show the highest growth prospects out of any continent in the world?\nThere is no doubt that favorable commodity prices have and will be a key driver of growth for sub-Sahara Africa. The so-called commodity super-cycle has benefited traditional oil exporters, such as Nigeria and Angola, and new ones, like Ghana. Demand for natural resources from emerging markets, especially China, has increased in the last decade and remains important. As noted in the BP Energy Outlook 2035, Africa will remain an important producer of oil and natural gas, accounting for 10 percent of global oil and 9 percent of natural gas production in 2035.\nIn addition, the continuation of good medium-term policies and structural reforms bodes well for future growth in the region. Africa has “democratized” to some extent, and violence and armed conflicts have decreased in spite of a few hot spots. Half of the world’s future population growth will be driven by Africa (not because of higher fertility, which is declining, but because of longer life expectancy). This trend could lead to a “demographic dividend” of an adult population of 800 million by 2030 (compared to 460 million in 2010). Africa’s rapid urbanization and burgeoning middle class could generate hundreds of millions of consumers.\nTo sustain its growth, however, Africa will need to continue reducing poverty and inequality, and step up the transformation of its economy. As noted by Dani Rodrik, African countries, unlike East Asian countries, have not yet been able to turn their farmers into manufacturing workers, diversify their economies, and export a range of increasingly sophisticated goods. Moreover, many African countries are joining the resource-rich country club and with it come not only opportunities but also challenges. Good governance will be needed to enable future generations of Africans to benefit from this new wealth. Low global interest rates and high commodity prices have opened a window of opportunity for African countries to reform. This window will not always remain opened, and reform is needed now.\nWhat role does China play in Africa’s economic development?\nChina’s economic performance shows that a transformational agenda can succeed and lift a large segment of the population out of poverty. Beyond being a benchmark, China has become the largest single trading partner for sub-Saharan Africa, with a 17 percent share of total trade. In comparison, India has a 6 percent share and Brazil, a 3 percent share. The so-called Group of Five (Indonesia, Malaysia, Saudi Arabia, Thailand and the United Arab Emirates) accounts for only 5 percent of sub-Saharan Africa’s total trade.\nChina also accounts for 16 percent of total foreign direct investment to sub-Saharan Africa and has become a key investor and provider of aid. There is no doubt that China is interested in Africa’s natural resources (such as copper in Zambia and oil in Nigeria and Sudan), but it is expanding its focus. Over 2,000 Chinese enterprises are investing and developing in more than 50 African countries, and South Africa is the leading recipient of Chinese foreign direct investment.\nThe key advantage of China in Africa is speed. Chinese firms are able to deliver quickly and work in close coordination with their financial and other national partners. Speed is a big comparative advantage in Africa. For instance, the continent has large infrastructure needs and African policymakers are under pressure to deliver. They are tempted to agree to an offer to build a coal-generated power plant in a couple of years when their population and businesses are getting increasingly disgruntled by sometimes daily power outages. They agree to this at the expense of adopting less polluting technologies.\nWhat are the African countries to which we should being paying close attention?\nSouth Africa has always been a key recipient of foreign investment given the sophistication of its economy.\nIn addition, natural resource-rich countries in Africa such as Angola and Nigeria will remain a key destination of foreign investment, especially given that the number of resource-rich countries will only increase with recent advancements in offshore oil exploration and extraction. In fact, Japanese Prime Minister Shinzo Abe recently visited Mozambique to secure natural gas contracts. Countries in the East African Community, such as Kenya, Uganda and Tanzania, are now discovering oil. Metal-exporting countries such as Burkina Faso, Ghana and Tanzania are also attractive.\nAs a non-natural resource-rich country, Ethiopia has a large population of more than 80 million people, high GDP growth, and a government-led strategy to attract foreign investment in some sectors. Rwanda is a smaller economy but it is growing rapidly and is trying to leverage its membership to the East African Community. In West Africa, Côte d’Ivoire is fast recovering from armed conflict, and Ghana remains a darling of foreign investors.\nWhat are key areas of opportunity to capitalize on for Africa’s development?\nLarge infrastructure projects in Africa need foreign partners. Infrastructure spending in Africa is estimated to reach $93 billion per year, and tax revenues and other domestic resources will not be enough to fill the financing gap for infrastructure projects.\nInformation and communications technology (ICT) needs remain high in spite of the rapid growth in mobile phones and mobile banking. Major companies, including Google, Microsoft, Huawei and GE, are betting on the continent and investing in research and development.\nThe rising African middle class is also attracting investors in the retail sector. For instance, French supermarket chain Carrefour and American big box store Walmart have expanded their operations to Africa. Banking is also attractive given the low financial depth in Africa. Foreign investors are now innovating to focus on urban centers with a high potential for consumer spending. In 2020, the household spending of Alexandria, Cairo, Cape Town, Johannesburg and Lagos will total $25 billion dollars.\nOne untapped area is agriculture for major investment. Africa has about half of the planet’s arable land and there are potentially large expected returns from this sector, especially if its infrastructure gap is reduced.\nFinally, portfolio investments in equity markets, domestic bond markets, and Eurobond markets are increasing and private equity firms are increasingly investing in the region. In 2013, the MSCI African Frontier Market (equity) index was up 28.5 percent and $10.7 billion of sovereign bonds were issued by capital markets in Africa. There are now five times more sovereign ratings in Africa than there were in 2000.\nIs the whole continent progressing or are only a few countries?\nThe extent to which overall growth is shared by the 54 countries in Africa is quite impressive. This being said, some trouble spots remain. While some fragile countries like Liberia, Sierra Leone and especially Rwanda have been able to move forward from unfortunate legacies of violence and in some cases even genocide, the situation in other countries is worsening, particularly in the Central African Republic and South Sudan (which is oil-rich). In spite of recent progress, the situation also remains fragile in the east of the Democratic Republic of the Congo and in Mali, and press reports often remind us of the piracy situation in Somalia’s Gulf of Aden and terrorist acts by al-Shabab. Even in the north of Nigeria there is violence attributed to Boko Haram as well as piracy in the Gulf of Guinea. There is a need to build an African-owned framework and response mechanism to prevent and resolve violent conflict and crises in the continent.\nAfrican efforts to increase economic integration are helping to strengthen regional growth as well. Economic and trade integration across Africa will help foreign investors access larger markets and reduce transaction costs, including costs associated with regional infrastructure projects. African countries are trying to strengthen regional integration through regional economic communities and are negotiating free trade agreements and customs unions with the goal of ultimately having common currencies. We are far from one common African currency for the continent but we are beginning to some steps forward in this area. The East African Community—which includes Burundi, Kenya, Rwanda, Tanzania and Uganda—is a market of 150 million people and is set to become a monetary union soon. The former French colonies in Africa all use the same currency, which is pegged to the euro and have common institutions.\nWhat is striking is that there is a consensus in African policy circles that we are witnessing Africa’s moment. The challenge will be in implementing the policy roadmap quickly as there is little time left for transformation. The World Bank notes that half of the region’s population is under 25 years of age. Each year between 2015 and 2035, there will be 500,000 more 15-year-olds than the year before. The challenge will be to transform this youth bulge into an opportunity.\nSource: The Brookings Institution\nAmadou Sy", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/five-questions-answered-on-africas-rising-economic-growth/"}
{"doc_id": "bf2b5654e192bbc8122e98094557d733", "text": "The consumer goods sector, one of the largest employers in South Africa, says the nation can not survive any more shocks from infrastructure bottlenecks, load shedding and poor municipal service delivery.\nSpeaking at the annual summit of the Consumer Goods Council of South Africa (CGCSA), co-chairs Pick n Pay’s Gareth Ackerman and Clover’s Johann Vorster said that the cost of doing business has skyrocketed amid the challenging economic environment.\nThis has limited the ability of companies to operate profitability, create value, and invest for growth and employment creation.\n“The challenge is that the government is not doing its job properly, and we now have to help it in doing things for which we are paying tax for it to be done,” Ackerman said.\n“We need to ensure water, electricity, potholes and sewerage are repaired and work. We have to deal with crime and poor service delivery. These are unbelievably depressing things, yet they are basics.”\nHe noted that the port and rail infrastructure is incredibly ineffective, forcing the consumer goods sector to use expensive road freight, damaging roads.\nBusiness insurance has also increased nearly twofold following the 2021 riots, whilst salary and wage increases have not improved with the rising cost of living.\n“It has become a lethal cocktail which needs to be adequately addressed by the government, working together with business to get things going on to grow the economy,” said Ackerman.\nVorster added that businesses should help their localities by cleaning the environment and partnering with municipalities to repair broken infrastructure. He noted that local authorities are willing to work with the private sector in areas where they need help.\n“We need as businesses and every company to put its own pressure in its own community and municipality, and we can win as a nation. We need to realise that we need to take responsibility and accountability in business and government,” Vorster said.\n“There is place for policy and government, and I think as businesses, we can also add something. To create jobs and get the economy moving, we need to work together.”\nCGCSA CEO Zinhle Tyikwe noted that the consumer goods sector is one of the biggest sectors in the country, with more than 2.5 formal jobs.\nIt is also a serious contributor to GDP and plays a significant role in ensuring food security.\n“We are therefore advocating for the government to improve economic conditions, attract investment and allow businesses to make profits, enabling them to reinvest and create employment. We need to work together to make the economy grow for the good of the country,” Tyikwe noted.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/724318/alarm-bells-for-one-of-south-africas-largest-employers/"}
{"doc_id": "a98412a0300dde9d9f07557419f1a31d", "text": "A day after I joined THISDAY from Concord Press in February 1999 as deputy editor of The Sunday newspaper, I was directed to proceed to Kaduna to cover the presidential primaries of the All Peoples Party (APP) then chaired by the late Senator Mahmud Waziri. As I recall, some of the aspirants jostling for the party’s ticket were Chief Arthur Nzeribe, Chief Emmanuel Iwuanyanwu, the late Dr Abubakar Olusola Saraki, Dr Ogbonaya Onu, Dr Bode Olajumoke and Chief Harry Akande who added razzmatazz to the occasion by flying into the city in his private aircraft which was parked at the airport and said to be loaded to the brim with bundles of new naira notes!\nHowever, for three days in Kaduna, we were treated to a most bizarre political drama. From Hamdallah Hotel to Airforce Club to the Ahmadu Bello Stadium, the party leadership took us (journalists, party delegates and aspirants) on a merry-go-round as to when the convention would hold and where. At a point, a frustrated Saraki accused Waziri of attempting to rig the process and in turn, the APP chairman called a press conference where he displayed the copy of a cheque for N30 million with which he said Saraki tried to bribe him.\nAt the end of all the shenanigans, we witnessed no primaries but that is no problem for Nigerian politicians. The name of Onu was announced as having secured the party’s presidential ticket. Barely 24 hours later, the same APP leadership announced in Abuja the name of Chief Olu Falae—who had earlier been picked as the Alliance for Democracy (AD) presidential candidate by a conclave of 21 Yoruba elders who sat in Ibadan after administering an oath of secrecy—as their joint presidential flag-bearer for the election.\nMeanwhile, when the local government elections were held two months earlier on 5th December 1998, the electoral guidelines had clearly stipulated that for any party to be registered, it must score at least a minimum of five percent of the total number of votes in no fewer than 24 states. Yet, despite the fact that the AD did not meet this particular threshold, it was registered as one of the three parties by the Independent National Electoral Commission (INEC), essentially to secure the buy-in of the South-west in the political transition programme to which many Nigerians were very suspicious. It was against this background that Onu ceded the APP presidential candidacy to Falae and it became very clear that some forces, especially within the military establishment, were pulling strings along a predetermined direction.\nThat became even more evident when a certain General Olusegun Obasanjo, who ordinarily should not have been allowed to contest the primaries if there was strict adherence to the provisions of his party’s constitution, became the candidate of the majority Peoples Democratic Party (PDP). The party’s guidelines had specifically stated that anybody who failed to secure his ward for the party would be disqualified from contesting. Not only did Obasanjo lose his ward, he lost the polling booth where he voted in all the elections. And for the first time in the history of our country, the two candidates for a presidential election were from the same ethnic group (Yoruba) and both were Christians.\nNobody needed to be told that the 1999 presidential election was contrived to appease the Yoruba people for the injustice done to the late Chief M.K.O. Abiola, the acclaimed winner of the 12th June 1993 presidential election. But the trouble with the arrangement was that, with all the cards stacked in favour of Obasanjo, majority of the political elite in the Southwest saw the 1999 election as a deliberate act of provocation, especially where June 12 and the memory of Abiola were concerned. And it proved to be so because if there was anything Obasanjo never wanted to hear throughout his period in office, it was Abiola and June 12. For him and his enablers from the north who helped him to power, both Abiola and June 12 should be consigned to the dustbin of history.\nWhat the foregoing says clearly is that there have been some cynical attempts in the past to deal with the June 12 challenge by those who misread history and its varied lessons, even though some find convenient excuses in the contradictions in the social, political and business life of Abiola (and there were many). Then came President Muhammadu Buhari, the last person you would imagine could honour Abiola or remember June 12, given what transpired after that election in the north aside from the fact that he had made some uncomplimentary remarks about Abiola in the past. But, in a way, it is also providential because Buhari is perhaps the only northern leader with sufficient clout for such a decision without any serious political backlash within his traditional support base. The question is: Why did he do it?\nBefore I go further, let me say very quickly that drawing up a list of those to honour for June 12 is a delicate business since it is now very sexy to be associated with the date. In the past, it was not so. On Tuesday, Falae said those Buhari invited to Aso Rock were more his party members than heroes of democracy or June 12. “Where is Alani Akinrinade whose house was burnt? Where is Dr. Amos Akingba? Where is Chief Ayo Adebanjo? My house was the headquarters where NADECO meetings were held; Abiola’s speech was written in my house. What are they talking about? I was in detention for 20 months, Akinrinade was in exile. They are only recognising as heroes of June 12, those who participated in the struggle and are members of their party.â€\nFalae has a point. Why, for instance, was Mr Olisa Agbakoba, SAN, not invited to Aso Rock on Tuesday? On the day the late General Sani Abacha, then as Chief of Army Staff but based in Lagos, ordered troops to mow down hundreds of citizens protesting the annulment of June 12 on the streets of Lagos, Agbakoba was the poster boy for the resistance with an iconic photograph of his bloodied face (after he was brutalized by the military) taken by the AP published in several newspapers across the world. How can we forget Colonel Abubakar Dangiwa Umar, one of Nigeria’s most respected officers with a glittering career, who resigned his commission because of June 12, a decision that could jolly well have cost him his life under a different circumstance?\nAnd then we have the patrons of the National Democratic Coalition (NADECO). Chief Cornelius Adebayo and the late Chief Anthony Enahoro were arrested and detained for years before their release after which they fled to exile to join others. What about Prof Bolaji Akinyemi, Admiral Ndubuisi Kanu, Ms Gloria Kilanko, Chom Bagu, Joe Okei-Odumakin, Chima Ubani, Festus Iyayi and several others who risked their lives confronting the military over June 12?\nEven within the armed forces, there were heroes. Both Admiral Alison Madueke, then Chief of Naval Staff and General Mohammed Chris Ali, Chief of Army Staff, were removed by Abacha following a tense Provisional Ruling Council (PRC) meeting where they broached the issue of Abiola’s continued detention. Chief Ajibola Ogunsola revived PUNCH newspaper after the death of the late Chief Olu Aboderin yet on June 12, he put everything on the line. In fact, on the day Abacha was proscribing Concord and PUNCH to render many of us redundant for several months, his anger was directed at the latter. “Concord I can understand since it is owned by Abiola so it is human that his boys would be attacking me but PUNCH; what is their own?†asked Abacha that day.\nWhile there will be a day to remember those who fought for our democracy, including some upwardly mobile men and women then in their thirties and forties who acted as ‘Concerned Professionals’ (Atedo Peterside, Pat Utomi, Oby Ezekwesili et al), let us deal with the speculations as to why Buhari honoured Abiola and make June 12 Democracy Day.\nAs much as I subscribe to the notion that given the timing, the action is very political, even opportunistic, I am also aware that Buhari is not the kind of man who would take this sort of action without conviction, no matter the political implications. So, I believe he took the decision because he feels it is the right thing to do and he deserves to be commended for it. Besides, the ‘Not too young to run’ generation in the Southwest who now constitute the electoral majority may admire the spirit of June 12 based on the stories they are told by their parents but if you follow them on Twitter, they are more concerned about issues that directly impact on their lives. So, nobody should overplay the vote issue to diminish the significance of what President Buhari has done just as I abhor any recourse to provincial triumphalism that can only be counterproductive in a diverse society like ours.\nIn the 12th July edition of the Mohammed Haruna-led CITIZEN magazine (which was then the voice of the Northern political elite), Mallam Adamu Adamu, the current Minister of Education and one of the finest writers in Nigeria, had reviewed the transition programme of General Babangida and the fiasco created by the annulment of the June 12 election and concluded: “We are today stuck at the crossroads with eight years wasted; small problems have become bigger problems, mist on the tracks has turned into a thick fog. From here moving back is impossible without terrible costs and moving forward extremely difficult.â€\nPresident Buhari has found a way around that problem by going for justice rather than expediency on what has for 25 years been a tricky situation. While conferring the posthumous award On Abiola on Tuesday, the president admitted: “We cannot rewind the past but we can at least assuage our feelings, recognise that a wrong has been committed and resolve to stand firm now and ease the future for the sanctity of free elections.†He then added, “this retrospective and posthumous recognition is only a symbolic token of redress and recompense for the grievous injury done to the peace and unity of our country.â€\nThat precisely is the point many of the commentators miss. June 12 goes beyond the person of Abiola and what he may have represented in the past. It is not even about what happened that day, as significant as the voting pattern (Muslim-Muslim ticket securing the votes of Christians) was. It is about what happened afterwards, when several Nigerians stood up to the military and paid heavy price for demanding that the votes they lawfully cast could not be so cynically taken away. Of course I am well aware that at that period, there were also those who bought into the divisive politics of the military and decided to accept the peace of the graveyard.\nThose who have always imputed ethnic motive to that principled stand taken by Yoruba people for the stubborn refusal to abandon June 12 forget that Chief Ernest Shonekan, like Abiola, is an Egba man yet he was rejected and so was Obasanjo in 1999. Therefore, the issue was never about having a Yoruba man in Aso Rock; it was/is about righting the wrong of June 12 in a manner that would take into cognizance the supreme sacrifice paid by Abiola and several people without which the military would never have returned to the barracks. That is why the symbolism of upstaging May 29 for June 12 as Democracy Day in Nigeria should not be lost: It is an affirmation of the supremacy of the ballot over bullet!\nThe damage inflicted on the psyche of Nigeria by the annulment of the June 12 election was enormous and to understand how divided the country had become just a few weeks after ordinary citizens had cast their votes for a united nation, I reproduce below an abridged version of a chapter in my book, ’POLITRICKS: National Assembly under Military Dictatorship’ which captures the debate that followed the annulment of the election in the Senate that had at time been inaugurated under a curious political arrangement.\nGeneral Babangida had on 17th August 1993 addressed a joint session of the National Assembly to propose an interim government to with the aim of conducting yet another presidential election, following a ‘tripartite agreement between the military and representatives of the two political parties, the defeated National Republican Convention (NRC) and the SDP whose leaders were trading away their victory without Abiola’s support.\nIn a speech designed to incite the National Assembly members against June 12, Babangida said, “The present negotiated choice of an Interim National Government by the Nigerian political elites is once again an imaginative and peaceful solution to the inevitable dilemma of democratization†before he added that the pro-democracy agitators were “disrespectful of your mandate and seize on the attraction of populist rhetoric to unleash vicious attack on the political leadership. They are after you, not me. They do not want to operate through the two party system. Please, invite them to join your parties; and work their way up from the grassroots as you did.â€\nAt that period, the Senate, presided by Dr Iyorchia Ayu, had such members as Hamman Bello Mohammed, Chuba Okadigbo, Uba Ahmed, Paul Ukpo, Bola Ahmed Tinubu, Sunday Bolorunduro Awoniyi, Rasheed Ladoja, Ahmadu Idah Ali, Benneth Birabi, Ebenezer Ikeyina, Kanti Bello, Wande Abimbola, Magaji Abdullahi, Kofo Buckor Akerele, Idris Kuta, Aniete Okon, Paul Wampana and several others while the House led by Agunwa Anaekwe had Tehemba Shija, Lazarus Unaogu, Nicholas Agbo, Tokunbo Afikuyomi, Florence Ita Giwa and others. I am sure readers will find the debate that followed Babangida’s speech very instructive.\nAll said, what President Buhari has done on June 12 is not only significant, it has shown very clearly that he has the capacity to rise above certain narrow and clannish interests to do the right things, including rallying the entire country for the healing and reconciliation that is very much needed across board, if we must attain peace and prosperity. It is therefore my hope that the president can apply the same disposition to deal with the economic/lifestyle problems that now endanger inter-group relations in the North Central with dire implications for sectarian divisiveness as well as the ‘five percent versus 97 percent’ mindset that has almost alienated the entire South-east from his administration.\nWhile these issues belong to another day and we will deal with them appropriately, President Buhari made the right call on June 12. But can he seize the moment or is it already too late in the day?\nWaziri Adio @ 50\n‘Everybody needs a friend like you’. That is something I often tell Mr Waziri Onibiyo Adio, the current Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI). That is because true friendship, the kind that comforts and inspires, is one of life’s greatest gifts. It is, according to a writer, “a safe place where we can share with another human being just about anything and know that our thoughts and challenges, our pain, joy, and deepest realizations will be received and respected.â€\nI owe so much to Waziri, who clocked 50 only yesterday but far wiser than his age. He is a friend in a million. Happy birthday, my brother!\n- You can follow me on my Twitter handle, @Olusegunverdict and on www.olusegunadeniyi.com\nCHAPTER FIVE\nThe Great Debate\nTwo days after General Ibrahim Babangida’s address the committee of the whole Senate on 19th August 1993 deliberated and took a decision at a session presided over by Dr. Iyorchia Ayu as chairman. Excerpted below is an edited version of the session.\nThe Chairman (Senate President Iyorchia Ayu): Well, distinguished colleagues, we are now at the Committee Stage, and the Floor is now open for deliberations from every Member of the Senate.\nSenator D.K. Azinge (Delta North): The distinguished chairman, and the committee, I will like to make a little observation. We are now in committee; and in my view, we are all here to deliberate on a very sensitive issue. While respecting the efforts of the press so far in assisting us to develop and air our views to the general public, I wonder whether we would not enjoy a frank deliberations if we clear the gallery.\nSeveral Senators: No! No!\nThe Chairman: I beg to rule that we cannot clear the gallery. This is because this address was presented in full view of the people of this country, and I believe that our deliberations should equally be public. It is a matter of intense public interest. I therefore, do not see anything that is too sensitive that the press cannot cover. I think we would have even appreciated it if there were more people in the gallery to listen to our deliberations.\nSenator S.O. Iyahen (Edo State): Mr. Chairman, distinguished Senators, I join in thanking the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria, General Ibrahim Badamosi Babangida, for his address on the Senate of the nation on August 17, 1993. The focus of his address is on a very serious problem we are facing today as a nation. That is, the problem of getting an elected President together with a civilian administration to take over from this military administration. The problem arose from the annulment of June 12 election. The address of Mr. President and Commander-in-Chief also includes the federal military government thinking in terms of a solution to the problem by the idea of an Interim National Government. For myself, I look forward to getting details of this, including the enabling decree, as promised, so that we can discuss and make decisive recommendations.\nThe availability of such information is very necessary for one to be able to make any serious comment. My senatorial district contains very simple people. They are not complicated at all. Maybe this is part of the problem. I have mentioned earlier on that the main problem we have in my constituency is about understanding the reason for the annulment of the June 12 election. About a year ago, the presidential primaries were cancelled and we were asked to repeat the primaries. Everybody agreed with that decision because the reasons were clear. My constituents find it difficult to understand why this particular one happened. Despite serious efforts made to explain the situation to my people, the most serious thing I have heard is that this was a coup. My people do not want a coup. We do not want a coup from military to military, how much less from military to civilian or civilian to civilian. As I said, my people do not want a coup and they find it difficult to understand. I am sure many people have this problem. The military has annulled the June 12 presidential election, asking us to move forward. But it is difficult. We have tried our best to explain, but I want to assure you that up till now my people cannot understand the basis of that action.\nThe Chairman: Please, this matter is of great public interest, and I would like as many Senators as possible to contribute.\nSeveral Distinguished Senators: All of us!!\nÂ\nSenator Hamman Bello Mohammed (Adamawa Central): Mr. Chairman, distinguished colleagues, in the speech that was made by my distinguished colleagues so far, I have noticed a contradiction. Senators were bringing up the question of the June 12 election and indicating that they do not understand or that their constituencies do not understand the annulment of this election and indicating as if they do not agree with the annulment but at the same time, asking that certain provisions of the constitution be invoked and our president be made the president of Nigeria during the interim period, how could that be? Our president cannot be made the President of Nigeria during the interim administration unless we accept that the June 12 election has been annulled. (Laughter) Mr. Chairman, distinguished colleagues, we are the Senators of the Federal Republic of Nigeria, we are elderly people in this country. We are leaders of people in this country. We are also politicians. I think that in whatever we do, we own responsibility to this country and also since we are leaders and elderly people, we must tread the path of realism when important and serious national issues are concerned. June 12 was not the first time that that the military intervened in this country.\nThe military intervened in this country in 1966 and our people did not understand why they did. I will tell you that my people did not understand why the military intervened in 1966 and killed the Sardauna of Sokoto. It is a fact and we accepted it. We accepted it and we moved on from there. Further to that, the military intervened in 1974 or 1975 and removed General Yakubu Gowon. A large section of this country also did not understand but moved on. But before then General Ironsi was removed and killed, and a large section of this country did not understand why he was removed and we had to regard it as a fact that it happened. We fought a civil war and after the war, we came together as one people with common destiny and we moved forward. These are facts that happened. General Gowon was removed, a large section of this country did not understand why. (Interruptions).\nSenator M. Babatunde Osholake (Ogun Central): Point of Order.\nThe Chairman: Senator… (Interruptions). Where are the Whips – the Majority and Minority Whips? What is the order? Order 73 deals with the election of the committee, so what order are you referring to?\nSenator M. Babatunde Osholake: Order 37 (3), in the committee of the whole senate, contributions shall be very brief and must be relevant to the subject. What Senator Mohammed is doing is trying to whip us sentiment. We are not here to talk about war.\nThe Chairman: Point of order overruled. Senator Hamman Mohammed should proceed.\nSenator Mohammed: Similarly, Mr. Chairman, General Gowon was removed in this country and a large section of the people in this country particularly from the Middle Belt, were unhappy. They did not understand why; we forget about it and we moved forward as one nation with a single destiny. Alhaji Shehu Shargari was removed, General Murtala Mohammed was removed and killed. A lot of the Northerners did not understand why it was done. But it was accepted and we put it behind us and moved as one nation with one destiny. The political transition programme came. The presidential election came. We had elections at the local government level, state level and federal level with decrees which were carried out by the military. When we came to the presidential election, we went all the way from the primaries et cetera and certain people were elected. In the case of SDP, the highest policy making body in the party endorsed Major General Shehu Yar’Adua (rtd) and in the NRC, we had Alhaji Adamu Ciroma and Alhaji Umaru Shinkafi and we were ready to go on run-off. The election of 23 leading Nigerian politicians was annulled. They said nothing and nothing happened and we put it behind us and we moved on as a nation. In June 1993 the military allowed us to go for election.\nWe had the election but only a fraction of the results were declared before the military stepped in and annulled the election. The people from a section of this country who are our brothers, some of my best friends are from that section of the country who feel aggrieved. My heart bleeds with them and I sympathize with that section of the country because this is something which their leaders have been looking forward to for nearly half a century. But now, when it is almost within their hands, the military stepped in and they did not get it. Obviously, it is normal; it is natural for them to feel aggrieved. It is normal and natural for them to feel offended and it may even be normal and natural for them to feel rejected in this country, but I want to beg them and I want to pray that they should please forgive the military and forget about the military, and think about Nigeria as a nation (Applause) What has happened to them has also happened to various sections of the nation. I plead with them, I beg them, I beseech them, for the destiny of our country because this country is a country of high destiny and we are people of destiny. For this reason, I beg them to please contain themselves. Let us, as leaders of this country, forget about June 12 election. It has been annulled; let us forget about it. There is no going back. Let us look forward; let us not look backwards and let us move with our people. This country will stay for thousands and thousands of years, and as Chief Awolowo once said, this country is going to become one tribe very soon and it is moving towards that direction, with people working together and people living together in this country. This country is going to be one tribe very soon. That was what Chief Awolowo said. So, please, Mr. Chairman, distinguished Senators for the good of this country, let us forget about June 12 election; let us move along. We have all come together, the majority of us have accepted the interim government. Let us accept it and let us see how it could be brought in place for the good of our country before we get an elected civilian president. If it happens that the President of this distinguished House is made the President of the Interim Government, I will feel very honoured and every member of this Senate will feel very honoured. So, let us forget about the June 12 election and let us move forward. This is my plea, Mr. Chairman.\nSenator Ahmadu Idah Ali (Kogi East): Point of order, Sir. My point of order is Order 5 (7) and it reads as follows: On Mondays, Tuesdays, Wednesdays and Thursday, motion may be moved at the commencement of public business or before 5.45 p.m. to the effect that the proceedings on any specified business be exempted from the provisions of these Standing Rules, and if such motion be agreed to the business so specified shall not be interrupted if it is under discussion at 5.45 p.m. until such business has been disposed of.\nThe Chairman: So?\nSenator Ahmadu Ali: So, Mr. Chairman, the implication here is that we shall continue this debate till even 9.00p.m.\nSenator Mohammed Ubale Shittu Magama (Jigawa East): Mr. Chairman, distinguished colleagues, as much as we would like to go on beyond six o’clock or until tomorrow, if you like, I do not know whether Nigeria is sinking tomorrow or what. Why can we not adjourn and if we like, we can go on tomorrow. We can always convene tomorrow, if we like, and if not, we can continue on Monday. The matter is so crucial that some of us will get tired.\nThe Chairman: Distinguished Senators, let us understand ourselves. The motion itself has an in-built counter. If it is carried, it is carried, and if it is not carried, we will follow our Rules. So, there is no need for any counter motion. I therefore, overrule the distinguished Senator from Lagos East (Senator Adefuye). He should sit down, and please allow the Senate to proceed. If you defeat the motion, fine, but I shall proceed to put the question on Senator Ali’s motion that we continue deliberations until 9 o’clock. Question put.\nThe Chairman: I think the Ayes have it.\nResolved: That the Senate continues its deliberations beyond 5.45pm until 9 pm; pursuant to Order 5 (7).\nSenator A.J. Ukpanah (Akwa Ibom North West): Mr. President, distinguished Senators, I am very thankful to God who has made it possible for me to reach this esteemed position in the Senate whereby I join all true compatriots to eulogise, even to sing sonnet upon the person of General Ibrahim Badamasi Babangida, President and Commander-in-Chief of the Armed Forces for the state of the nation address that he made to the joint session of the National Assembly. Sir, here is a man; here is a military person who has done so much for the ordinary people of this country. He created more States; he created more Local Government Areas. He established DFRRI and I know what DFRRI has done for my people. Now, the time has come for him to take an exit from the public affairs of this country and he came and addressed this distinguished Senate. With regard to the establishment of an Interim National Government, Sir, there can be no going back. The political parties have cooperated to come out of the state of confrontation in the interest of this great country. With the ultimate desire of maintaining the corporate existence of Nigeria as an indivisible entity and the strengthening of the body polity which is all what we are here about. For now, individual ego does not count. I urge those who have taken extreme positions to reconsider their stand. This is not the time for that because most of the Senators here were born before Aburi. We heard of Aburi – ‘On Aburi We Stand’ and we sometime now hear of ‘On June 12 We Stand’. All that should go to history because ‘On Aburi We Stand’ had disastrous consequences and we do not want a repeat performance. Mr. Chairman, what all that had happened mean is that Nigerians have been weary of military government and are prepared to move, one, two or three steps forward by coming together to accept an Interim National Government. By returning to the National Assembly the power that belongs to the National Assembly all that should concern this distinguished audience Sir, is to bring in input as to the modalities. I want to say, that I welcome by whatever name, a law that is going to be presented to us that will make all other laws irrelevant. That means that we will have a supreme law to work on which is entirely what the National Assembly should concern itself about.\nThe Chairman: Thank you very much, distinguished Senator Ukpanah. May I just interject slightly by saying that those who are making important reference to history should also bear in mind that may be because our people did not say No when these interventions took place, things have continued to repeat itself with disastrous consequences and that now our people are beginning to say No to military rule. That point, too, should be emphasized as history is cited. (Applause).\nSenator Benneth Birabi (Rivers East): Mr. Chairman and distinguished Senators, I am happy that we are beginning to take cognizance of history because there can never be a today if there was no yesterday. I do not want us to lose sight of the fact that the compromise situation that Nigeria has found herself in vis-à -vis military intervention and military rule did not start from the life of this Senate. We have come to meet this situation and we are only going to do what is humanly possible to resolve the situation so long as we do that without compromising, the integrity, unity and peaceful co-existence of Nigeria. Having said that, I do not know if we have lost sight of the fact that a proposition is not necessarily a reality; there is a proposition that the military will be handing over power. It has not happened yet. The reason why we have gone through this last couple of weeks of discourse and discussions, negotiations and consensus of all sort is to achieve peace. In fact, I must say at this moment that I commend the two political parties in this country because never in the history of Africa have I seen such co-operation between two opposing political parties like it has happened in this case. All that has been borne out of the fact that Nigerians have come to learn the saying of Churchill: ‘It is better to jaw-jaw than to war-war.’ The common man in the street puts it this way: ‘I no gree – I no gree, na im dey tear cloth.’ And that is a fact. If both of you are dragging for something and nobody is ready to give in, definitely that thing is going to be destroyed. So, I do not want us to lose sight of the fact that whatever the military themselves had done may be wrong, but each time they did it in the past, a section of Nigerians rallied round them and supported them. Some sections, like the distinguished Senator from Adamawa Central (Senator Hamman Mohammed) said, never actually understood what they were doing and it came to pass that today we are under military rule. Now, the alternative to accepting the situation we have on hand is that we are going to have a situation where both parties of the divide refuse to agree. Let us not forget that the only weapon that we as civilians have are our brains and our hands, and perhaps the population behinds us. The military have guns. You can say that civil power is popular power, yes. There is popular power; we can use it against the military, but you need to mobilize them. Even when you do mobilize them I would like us to cast our minds back to countries where popular power had removed dictatorial government from power. What has happened to these countries? Look at Sudan: What is the state of Sudan today? You will remove the military from power all right, but what happens to the country thereafter? Look at Somalia. What is the state of Somalia today? What is the state of Liberia today? This is not to talk of Ethiopia. Eventually, Ethiopia is cracking up. These countries, I do not think by any stretch of imagination, are as diverse in ethnicity or in tribal differences like Nigeria is. And if they could not hold, I wonder what is going to happen to Nigeria. Therefore, I want us to address the end, not the means. So as long as we achieve the end, the means will justify that, and in this case, if we want to go on an ego-trip of making a fuss about how you do this or who is getting what and so on, this is not going to help us. Therefore, I will like to suggest that what we now have on hand is a State-of-the-Nation address from the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria; who we did not put in power, and we cannot remove from power unless by negotiation. He has opted to step aside, and I think it is only just proper if we do not want to deceive ourselves, for us to recognize that fact and say: Thank you very much. (Applause). We also must not sight of the fact that for the past eight or nine months since we have been here, we have been unable to discuss anything. Infact, sometimes I am embarrassed to be called a Senator, because I actually cannot say what I am doing here. And then suddenly in this state-of-the-nation address, the man says he is handing over to you full constitutional powers; he did not give any exceptions. So how can we sit down here and, could not at the very least, say: Thank you very much? (Applause) And, we being representatives of the nation should look at this and say; well, this is a way forward from the status quo. That in itself is progress and so we should adopt it while we wait for the instrument of the interim government. At that time, we can now examine that instrument in detail vis-à -vis this address and then we can debate it for two weeks if possible. After seeing the instrument which is a decree, we can debate for even one month until we arrive at a consensus. That will bring our problems to an end. So, Mr. Chairman, I want to propose that we take a step-by-step approach to this problem. And, if we do agree that we should, we can defer detailed discussion on the address till we obtain the decree on the Interim National Government. If you do agree, I so move, Mr. Chairman.\nThe Chairman: Please, distinguished colleagues, I like the orderly manner in which we are now conducting the discussion. It is a serious issue that requires very sober reflections and serious contributions. I would like, before I call other colleagues, distinguished senators to take serious note of three key points raised by the Minority Leader that: (i) the president has offered to voluntarily step aside; (ii) need may be, to defer and wait for the legal instrument before detailed positions could be taken. This is not to say that it is a summary of what we are discussing. But I think they are important points which need to be underlined while we continue with the debate. Minority Leader, did you put it as a motion?\nSenator Bennett Birabi: Yes\nThe Chairman: Alright. It is a motion. There is no Rule which says that a motion may be put only at the last part. It can be right from the beginning. So, I am not stopping anybody form moving a motion. Any seconder?\nSenator Chuba Okadigbo (Anambra North): Yes.\nThe Chairman: There is an amendment from Senator Chuba Okadigbo. Minority Leader, may be you will like to phrase your motion properly. You can go on Senator Okadigbo.\nSenator Chuba Okadigbo: Mr. Chairman, distinguished Senators, I beg to amend the motion moved by Senator Birabi as follows: In pursuance of his motion, the Senate shall proceed to the motion on the Order Paper which intends to have the Senate pass a motion on Interim National Government vis-à -vis the powers of the National Assembly, as in the Order Paper provided. I beg to amend. Thank you very much.\nThe Chairman: Senator Birabi, do you accept the amendment?\nSenator Birabi: No, Mr. Chairman, I think my motion should carry if it is so popular; and subsequently, we can look into it on its own merit.\nThe Chairman: Please, may we allow the distinguished Senator for Rivers East (Senator Birabi) to drop the motion if there are no further amendments so that it can be read out to us. From there, maybe we can proceed to counter motion. May I call on distinguished Senator Birabi to read out the written version of his motion.\nSenator Bennett Birabi (River East): Mr. Chairman, distinguished Senators, the motion reads thus: That this Senate express its gratitude to the President and Commander-in-Chief of the Armed Forces of Nigeria and accept: The Interim National Government as a step forward. That the military has voluntarily accepted to step aside. That the Senate without prejudice to further debate on this issue awaits the instrument of the Interim National Government before further detailed debate can continue.\nSenator Chuba Okadigbo (Anambra North): Counter-motion, Sir.\nThe Chairman: Any further amendment?\nSenator Chuba Okadigbo: Counter-motion, sir.\nThe Chairman: It was seconded by Senator Kanti Bello. I want to draw the attention of Senator Birabi to the fact that it was the President and Commander-in-Chief who offered to step aside. So, it has been corrected. Any counter motion?\nSenator Chuba Okadigbo: Yes, Mr. Chairman, I have a counter motion.\nThe Chairman: Let us have the amendments first.\nSenator Anthony O Adefuye (Lagos East): Have I been given the floor?\nThe Chairman: Yes.\nSenator Anthony O. Adefuye: Mr. Chairman, distinguished Senators, I just want to delete the first item which says that we accept the principle of the Interim National Government. This is because the last paragraph says we want the instrument before we further deliberate on the Interim National Government, and that is very contradictory. Now, we are a Senate and we are democratically elected Senators. I do not think it is to our advantage to start accepting the principles of Interim National Government here. I think the way the thing has been put before has protected us from the people who put us here, and it says that, well, we accept his offer to step aside. Secondly, we accept that he is giving us back full powers. Thirdly, he should put the instrument before us for further deliberation on the principles of Interim National Government. I think we should keep to that.\nThe Chairman: Minority Leader, do you accept the amendment?\nSenator Bennett Birabi (River East): Mr. Chairman, distinguished Senators, I do not want to accept the amendment for the following reasons. We are talking of negotiations. We are discussing and we are talking to somebody who is in a position of strength in his own rights. What is happening here, even in the text of the speech, is that he made no pretences about the fact that we are the weaker party. If we have the power to remove him from office, he probably would not be here. He said he has offered to step aside. They have not given us much options but we are aware of the process of arrival at the option of Interim National Government. We have been there, we were turned back, and we went back with the option, and they returned to us the option of Interim National Government. They have not given us many options, but I want us to address our minds to the fact that if we insist on what we think is right, then we are not likely to go any further. If we have to make progress, I think that we should accept what has been offered. Then we can go for discussion to see how things can get better until such a time when we are in a position to define the issue.\nThe Chairman: Are you accepting the principle of Interim National Government or are you accepting the Interim National Government?\nSenator Bennett Birabi: We are accepting the principle of Interim National Government for now.\nThe Chairman: Thank you very much. There are now two motions on the floor and before we vote on them, there may be people who may want to speak on their motions. Beginning with the counter-motion, I call on Senator Okadigbo to lead discussion on this counter-motion. Please, may you go through your motion very carefully, after which you can then highlight the salient points of the motion.\nSenator Chuba Okadigbo: Mr. Chairman, distinguished Senators of the Federal Republic of Nigeria, my motion reads as follows: I will take permission to explain it in paragraph I as I go along.  The Senate of the Federal Republic of Nigeria thanks the President Commander-in-Chief of the Armed Forces, General Ibrahim Badamasi Babangida, for his presidential address to the National Assembly at its joint session which took place at the new wing of the International Conference Centre of the 17th August, 1993. All these are matters of facts. He did address us and consistent with international standard, this Senate appreciates that address to us by Mr. President. Every single Speaker here today, for whatever motion or counter-motion, has expressed gratitude to Mr. President for that speech. (b) The Senate has been honoured and privileged to be addressed on the decisions of the federal military government on the manner for the resolution of the current political impasse, as anchored on Interim National Government. Here, Mr. Chairman, I remember that not too long ago, the Senators had the opportunity to visit Mr. President at Aso Rock and I do remember that we did remind Mr. President that we, members of the National Assembly, especially the Senate, are those who by the people and by the constitution are supposed to work with the government at the centre. We did implore the President to allow provincial administrators to operate provincially. (c) In this regard, the Senate has taken due and legislative notice of the pledge of the President to the effect that “together with the Interim Federal Executive, the National Assembly will take the leadership in steering the ship of State during the Interim period for the good governance of our nation†and also that “the legislature should be the basis of the democratic legitimacy of the new Interim National Government.†With respect to this matter, I believe that every single one of us here is a leader in his own right; that we are statesmen; that we have come with the mandate of thousands and millions of people across the length and breadth of this nation. We did not come here to fight; we come to work together with the executive in the centre and to do so, with due deference to the leadership qualities expected of the people. Now, what is leadership? It is critical to talk of leadership in this item in order to clarify some of the issues which have been on the floor here. I did distinguish carefully, in my book Power and Leadership that power is specifically defined by the authoritative monopoly of the instrument of our land as opposed to leadership which carry with it influence. We have had leaders in this country such as Chief Obafemi Awolowo who was not a President, Mallam Aminu Kano who was not a president, Herbert Macaulay and the rest of them, whose influence and encouragement to millions of Nigerians have given us the freedom that we now enjoy, and inspired us to come to places as esteemed as this distinguished Senate. While we Senators do not have executive powers as our Governors do, or as our Local Government Chairman do, we exert sufficient influence nationally and internationally. In clear distinction to those powers which the executive have, that concert between the Executive and the Legislature under the rule of law is the basis of democracy, and I suppose that is the meaning and intent of item © in that notice. (d) The Senate also notes, with a deep sense of responsibility and patriotism, the pronouncement of the President that “the Legislative Arm of Government at the Federal level must exercise its power under the rule of law as a necessary complement and balance to the executive powers of the interim government.â€\nExplanation given when dealing with item (c) applies mutatis mutandis to item (d). With respect to item (e), it says: The Senate appreciates the restoration of the full powers of the National Assembly, and hereby reaffirms the will of Senators to use such powers in accordance with our solemn oath of office. We want our powers in their fullest, and as given in bodies of laws in the Social Contract and in the Constitution. The supreme law of the land is the Constitution, which unfortunately, is at the moment in abeyance, according to the Attorney-General of the Federation. May that abeyance cease as soon as possible so that this country shall move on the path of freedom and democracy to enable us do what we are expected to do, namely, to contribute our positive quota to the maximization of the general welfare for the good people of the Federal Republic of Nigeria.\nThe Chairman: We are now speaking on the counter motion, so we are not moving or seconding any motion again. We have gone beyond the issue of moving or countering motions. We are strictly speaking on the first counter motion by Senator Okadigbo. After we have concluded debate on that, we will vote on it, if it is not carried, then you know the obvious decision.\nSenator Jubril Martins-Kuye (Ogun East): Mr. Chairman and my distinguished Colleagues, I had wanted to resist the temptation to shower encomiums on Senator Chuba Okadigbo on his motion, but because Senator Ahmadu Ali has succeeded in his bid that we all sit here, talking till 9 p.m., I can as well begin by paying him due compliments. Mr. Chairman and my distinguished colleagues, if you read the counter motion very well, you will pay due compliments to Dr. Chuba Okadigbo, a distinguished Senator, for his conception and presentation. He had thanked Mr. President. It is conventional to thank the head of the executive arm of government whenever such a head interacts positively with the legislature. But I am much more touched by what he has to say in item (b) of the motion. He says: The Senate has been honoured and privileged to be addressed on the decisions….What the distinguished Senator Okadigbo is saying or acknowledging is that we were never consulted to make any input into the Interim National Government idea, and we have no business debating the merit of it. Nevertheless, the President and Commander-in-Chief of the Armed Forces had deferred to our right to know what is going on. So, he had also acknowledged that any statement made in the regard is duly noted, and I think that that is very proper. All that this item (b) is saying here is that, well, it is duly noted, I am very happy, personally, to go along with that – it is noted. Finally, Mr. Chairman, when we look at item, (c) that is also merely saying that we are happy to receive our powers. I congratulate distinguished Senator Chuba Okadigbo on the note of caution. The statement by Mr. President and Commander-in-Chief of the Armed Forces, as being quoted, just merely talks about the Legislature playing crucial roles. But what these roles are going to be, nobody knows. When we read that in conjunction with what he had to say on page 23, he is talking of an omnibus decree in which the powers and responsibilities of the judiciary, the legislature and the executive arms of government would be incorporated. Until we know what the omnibus decree, a kind of miniature constitution, is saying we cannot properly assimilate the scope of our powers. So, this item (b) is talking about being cautious. It is not comforting; it is merely noting the information passed to us. I am very happy to note such information. On the Interim National Government, this Senate should not make extensive comment on it by way of approval. This is because every segment of Nigerian society was consulted, but the Senate, as an institutional body, was not consulted. It was merely foisted on us. Since we do not want to cause confusion, and since we do not promote disorder, all we can do is to live with the idea, or to say that we note the fact that that is the mode of resolution of the political impasse. So, this is merely a matter of noting. It shows the genius in Senator Chuba Okadigbo as an accomplished political scientist. I think I want to go along with this, and I want to implore everybody to go along with it. Thank you, Mr. Chairman. (Applause).\nSenator Idris Kuta Ibrahim (Niger East): Mr. Chairman, my distinguished Colleagues, I would like to crave your indulgence just to comment on the motion of Senator Chuba Okadigbo, and what Senator Martin-Kuye has given a rider to. We should not look at the address in isolation, we should look at it with the Report of the Tripartite Committee.\nSome Senators: We have no copy of the Report.\nSenator Kuta: Fortunately, it has been circulated, and I think I got a copy in my pigeon hole.\nThe Chairman: No, that is not before the Senate.\nSenator Kuta: If it is an extraneous matter… (Interruption)\nThe Chairman: Yes, it is an extraneous matter, and please may you confine yourself to the matter before us.\nSenator Kuta: Alright, Sir, Mr. Chairman, it is a fact that the political parties and some of the former presidential aspirants plus some members of the armed forces sat together to arrive at the decision which Mr. President communicated to us in his presidential address. Obviously, the Senate or the National Assembly was never a party with those that sat and arrived at the decision on the Interim National Government. The much we have read about it was that the National Assembly, and in fact, the political structures that have been put in place by the Babangida administration, that is from the Local Government to the State Assemblies, to the Governors and to the National Assembly, were supposed to have been dismantled. The two political parties that were requested to be re-structured, in actual fact, would have necessitated the dissolution of the present House of Representatives, because the recommendation, which I believe Mr. President rejected, was that the size of the House of Representatives was large and cumbersome and the number should be reduced by half. This means that two Local Government Areas are to produce one member each in the House of Representatives. If that were to happen, it would have meant the dissolution of the House. Now, I do not know the position of the Senate; I believe that the Senate was not regarded to be cumbersome and that the number of the members of the Senate could remain as it is today, that is 91. Now, if that is the case, Mr. Chairman, I believe the president took us into confidence by divulging how his mind is working for the first time on the 17th of August, 1993; to the Joint Session of the National Assembly. I believe what the president has done was to bring us into realizing that we have an important role to play in the current political impasse. Mr. Chairman, as we are sitting here today, the most important point which the president brought about and which this National Assembly should take seriously, is that there are people who are trying to take up political leadership through the back door. It has been said that anybody who wants to lead this country must go to the grassroots to start from there before he comes up to either the Local Government Council or the State Assembly or to be the Governor or a member of the National Assembly and then the president of Nigeria. If we are going to have an Interim National Government and that the president has offered to step aside, what I expect of this Senate is that this Senate should guide and advise on how the head of that Interim National Government and those executives who are to serve with the head of the Interim National Government will be elected or selected. And I believe, Mr. Chairman, with due respect, that the president is telling us that there are people who had given suggestions of names of those who should fit into the Interim National Government and none of the names that had been suggested by those people included any of the elected representatives of the people either from the Local Government, the State Level, the Governors or members of the National Assembly.\nChairman: Please, Senator Kuta, that may be a very privileged information to you. As far as this august body is concerned, we do not know the details of the Interim National Government and the motion and counter-motion on the floor carefully avoids that. Once you try to bring it in, it will constitute an irrelevance and I may be forced to overrule you on that.\nSenator Kuta: Mr. Chairman, I regard this Senate to be the apex of legislature in the country and I regard every Senate here as a responsible person and I think that it will be criminal on my part if I received an information and kept that information to myself. I think we would be doing a disservice to this nation. As a Senator, one should be open to listen and to hear and to sound the minds of a lot of people. Therefore, Mr. Chairman, whether this information is privileged or you are not aware of it, I believe that as a Second Republic senator and a senior Senator for that matter as well as the only Senator returned unopposed in the whole federation, I am giving you the benefit of my knowledge and experience because I told you even before you were addressed by the president and Commander-in-Chief of the country that I believe and I continue to believe that the president of the Federal Republic of Nigeria is going to come out from the National Assembly. So, Mr. Chairman and members of the Senate, you have to grease your palms because we are ready to face the battle. As an interim measure I will only be too happy if the chairman will now as a start, begin to head the Interim National Government. Thank you, Mr. Chairman.\nThe Chairman: Again, let me remind distinguished colleagues that by necessary implication, by debating the counter motion you are debating the substantive motion. So, what we are doing is by implication debating two motions. So do not imagine that there is a separate time for you to come and debate the substantive motion.\nSenator Anthony O. Adefuye (Lagos East): Mr. Chairman, distinguished Senators, as some of my colleagues have said, we were never brought into the discussion of the Interim National Government. Interim National Government is not democratic at all. That was why we were never invited into the discussion. We went on break because our hotel bills were never paid while the discussion on Interim National Government was going on; and I think that was deliberate. They never wanted us to participate because they knew it is undemocratic. They know that the Senate is democratic. We were all elected to come here and serve our people. Now suddenly, the hotel bills were cleared, and we were invited here. I think the fact that somebody has said that he will give our full powers back to us is making some of us to be excited. Before you are excited, look at the instrument; it has happened to us before. When we were being inaugurated, we all came here; we brought all our families here. We all dressed gallantly. What happened? The second day, we were greeted by Decree 53. This will happen again. Once beaten, twice shy. Now, before I go on, I must first of all commend our colleagues from the National Republican Convention. They have the right to defend the position of Interim National Government because it favours them. (Interruptions). I am still on my feet, please. We can speak from now till tomorrow morning, if a party has lost an election and it is being given another chance to try it again, I think members of such a party must be excited. But what I cannot understand is that here we have Senators with the mandate of our party, the SDP and they are now speaking as if nothing happened on June 12. The 41 page document of Mr. President’s address on June 12 election problems has of course, paragraph 46 which says and I quote: “After consultations with my Service Chiefs; not with you (pointing to Senators). I offer as my own personal sacrifice to voluntarily step aside as the President and Commander-in-Chief of he Armed Force of the Federal Republic of Nigeria.†It is not by your might. Now, if the necessity for the Interim Government does exist at all, the right thing to do is to hand over to the National Assembly whose members were democratically elected. We were democratically elected and we have been here. I said if it does exist; I did not say it exists. Now let me quote from the speech again. The second sentence of paragraph 18 reads as follows, and please note the word ‘negotiated’ there: “The present negotiated choice of an Interim National Government by the Nigerian political elites is once again an imaginative and peaceful solution to the inevitable dilemma of democratization. This contradicts the statement of paragraph 52, form the third sentence which says as follows: They are disrespectful of your mandate and seize on the attraction of populist rhetoric to unleash vicious attack on the political leadership. They are after you, not me. They do not want to operate through the two party system. Please, invite them to join your parties; and work their way up from the grassroots as you did.†Now, this is a bundle of contradictions. On one hand, he condemned public rhetoric and advised them to work their way up from the grassroots. On the other hand, he negotiated the Interim National Government with the same people. On one hand, he was telling us that those people are after us, that we are the democratically elected people, but on the other hand, he spent a whole month consulting chiefs, oracles and whoever it is to arrive at sanity. (Interruptions). To arrive at the Interim National Government, I think it is better for him to revisit the June 12 election or hand over to the National Assembly, as stipulated in our constitution. Now, let me quote from paragraph 31 of the historic speech again. I quote as follows: “The legislature should be the basis of the democratic legitimacy…â€\nSenator Fidelis C. Okoro (Enugu East): Point of Order, Mr. Chairman.\nThe Chairman: What order please?\nSenator Fidelis C. Okoro: Mr. Chairman, with due respect, my point of order is Order 37(3). I remember that the Chairman did draw the attention of all of us to this order. In other words, he did advocate that we should as much as possible be brief to contribute. The fact that we have agreed to stay till 9pm does not mean that one Senator should take the floor for the whole day. So, I am advocating that we should keep strictly to Order 37 (3), as has been referred to by the Chairman.\nThe Chairman: The point of order is upheld. Our rules state that no senator should speak for more than 40 minutes and where we say people should be brief, I run short of fixing time because it is an important issue. But I do not think it is proper that people should take 20 minutes which is half of that 40 minutes. So, Senator Adefuye, I am giving you only one more minute to round up your contribution or I will stop you whenever I think it is appropriate.\nSenator Anthony Adefuye: Mr. Chairman, if you do not want us to contribute…\nThe Chairman: The chairman is final. I think we must follow the Rules of Procedure.\nSenator Anthony Adefuye: I know the Chairman is final, but some Senators have spoken here for 20 minutes. I have only spoken for 10 minutes. If you do not want us to continue, we can leave.\nThe Chairman: Senator Adefuye should sit down.\nSenator Anietie Udo Okon (Akwa Ibom North East): Thank you, Mr. Chairman, I would like to crave your assistance in following me refer to some short notes that I have made for guidance purposes. Thank you.\nThe Chairman: The distinguished Senator for Akwa Ibom North East (Senator Anietie Okon) should please sit down while the distinguished Senator for Lagos East (Senator Adefuye) should please complete his presentation.  I had earlier given him one minute. It is the point of arguing with the Chair that I did not take kindly to.\nSenator Anthony Adefuye: Mr. Chairman, let me quote General Babangida again:\n“This is because in this last stage of our drive towards the full realization of the third Republic, the National Assembly is that body at the Federal level which has the grassroots constituency; and therefore, the anchor for popular rule. Being popularly elected, you should now provide the link between the Interim National Government and the representative will of our people.’ It is not proper to use the legitimacy of the National Assembly to back up the illegitimacy of an appointed Interim National Government.†It is not done anywhere in the world. The proper thing to do is to hand over to the National Assembly which will then provide an Interim Government for the people as specified by law, unless there are other reasons for not wanting to hand over to the National Assembly, probably because it is the same party which won the presidential election purported to have been annulled that is also controlling the National Assembly. Distinguished Senators, the result of the June 12 presidential election has already been released at the polling booths, at the ward level, at the local government level and at the state level. At the federal level, the results of 29 states and Abuja have already been collated and accepted by the National Electoral Commission. (Interruptions). Mr. Chairman, please protect me. There remained only the result from Taraba State. This election was conducted in the glare of the whole world which was invited to witness the historic occasion. Now, the election was adjudged free, fair and peaceful, and the best ever conducted in the history of Nigeria. From nowhere, somebody obtained a court injunction to stop the release of the election results. The federal government quickly, without any valid reason, annulled the result of the election. Now, the reason given for the annulment was that too much money was spent at the election and that an injunction was earlier obtained. One thing was clear however, that the candidate of the Social Democratic Party, Chief M.K.O Abiola, was leading comfortably with a majority of over two million votes from the result of the 14 States that were released. From the result released by the 30 State Electoral Commissioners and signed by the agents of the two candidates, Chief M.K.O Abiola won convincingly. He won more than one-third of the total votes cast in 28 states and he won with clear majority in 19 States and Abuja. The government’s statement on June 12 presidential election, therefore, does not reflect the judgment of most Nigerians and the international community. The nullification of the June 12 presidential election is, therefore, illegal and must not be allowed to stand. We are the custodians of the democratic principles of the collective mandate of Nigerians. We must, therefore, uphold that mandate and refuse to be intimidated, by anybody; no matter how highly placed. The whole world awaits our decision and the decision will also reflect if we are mature for democratic rule. We are at a crossroads. The amber light is on. Our decision will decide whether it should turn green or red. We must shun any form of government which is not democratically elected. The Interim National Government is a bait. We were not part of the decision for the Interim National Government, neither were we during the national consultation of all interest groups. Now, we are expected to give legality to illegality. (Interruption).\nThe Chairman: Senator Adefuye, please conclude your contribution.\nSenator Adefuye: In view of the provisions of Decree 53 which has not been abrogated or annulled, whatever opinion the Senate, therefore, expresses on this issue would be illegal, null and void and, therefore, of no effect. Even though the President and Commander-in-Chief has promised to give us back our full legislative powers, that does not restore the power for us to confer legitimacy on any Interim Government, except as contained in Section 144, paragraph 2 of the 1989 Constitution. We are yet to be informed to the details of the Interim National Government. Who will approve the list of those to serve on the Interim Government? Even if there is need for this government, should we not receive the details first before now, as we did during our inauguration after which gigantic Decree 53 surfaced. There are decrees being prepared now for the Interim Government. Should these decrees not be made available first before we consider the position of the Interim National Government? Distinguished senators, once bitten twice shy, we should not be rushed into taking any decision that will make us look stupid in the eyes of the whole world. There is a popular saying: look before your leap. If we are taking any decision today, the decision would be that we justify the people’s mandate as demonstrated on June 12, 1993. Any arrangement not based on June 12 will make us unpopular with our people and will ridicule our respected National Assembly in the eyes of the world.\nSenator Uba Ahmed (Bauchi East): Mr. Chairman, I have a very important information Sir.\nThe Chairman: It should be very brief, Senator Uba Ahmed.\nSenator Uba Ahmed: Yes, Sir, I will be as brief as my distinguished colleague, Senator Adefuye (Laughter). Sir, my respected and distinguished colleagues, as a very senior legislative house, I think it is very important that we take decisions based on correct information. And where the Senate is being misinformed, I think the duty rests on us to raise this point of information. My good friend, Senator Adefuye has referred to the June 12 election which I believe he accepts was conducted on the basis of Decree 13 of 1993. If we accept that all the parties contested election on the basis of the provisions of Decree 13 of 1993, the application of that decree must not be selective. The decree says an election of the president has to be done, which was done. But a clause of the decree went further to say that an election is only valid if the results of this election are declared within seven days by National Electoral Commission (NEC). That result had not been declared within 7 days by NEC. Therefore, legally, an election was never conducted on June 12, 1993. So, since there is no election there is not, therefore any question of mandate being given to any person much less to talk of acceptance or defending a mandate thereof. So, Mr. Chairman, Sir, I wish my colleagues and the citizens of this country to know that if we go by speculative results, I can even tell you, and this is a true and hones story, that the information we have now got which is very valid from very reliable sources is that, in fact, Bashir Tofa won this election (Applause).\nThe Chairman: Order! May I request Senator Paul Wampana Vintim to pass his walking-stick which can easily become a weapon to the Sergeant-at-Arms, and when he wants to go out, it can always be returned to him. Thank you very much. Please Senator Uba Ahmed you may continue (Senator Vintin compliers).\nSenator Uba Ahmed: Thank you, Sir, Mr. Chairman, I admire your democratic nature and that is why I will ever be loyal to your Chairmanship. The truth of the matter, my colleagues is that the valid information on the ground today is that Tofa won that election. But as I have told you earlier on, the current provision of Decree 13 accepts and provides for the result of the election to be declared within seven days by NEC, and since NEC has not so declared Tofa the winner we are not accepting that claim here. (Interruptions). So, Mr. Chairman, I think it is important for the Hansard of the Senate to record Bashir Tofa’s success at the June 12 poll. Thank you very much. Mr. Chairman.\nThe Chairman: We are not going to debate indefinitely, but as the ground is thinning I will take only a very few more contributions, summaries and then ultimately, we will return to the Senate. Senator Tinubu, are you ready to speak now?\nSenator Ahmed Bola Tinubu (Lagos West): Yes, Mr. Chairman. Mr. Chairman, distinguished members, we have sincerely heard a lot being said about peace, stability and unity of this country; sincerely speaking, every Nigerian, every citizen of this country will not argue in adverse direction other than support the need for peace, stability and unity of the country. However, could there be sincere peace, stability and unity without justice, fair play and fundamental rights of the citizens being protected? We have gone through the path of history of various successful governments in this country, the coups not being challenged, the denials and the killings. Sincerely speaking, for every action there must be a reaction. Today, we can pretend there was no June 12, but are we very sincere? Today we can pretend that there is another coup and there is nothing we can do about it. Are we very sincere? As distinguished and elected members of this August body, and the conscience of the people of this country, have we actually examined the president’s address of 17th August 1993, while discussing the two motions on the ground? These two motions assume that we have already accepted an Interim Government by implication, but for sure, we need every method and principle that would assure this country peace, unity and a way forward. However, should we as distinguished members of the Senate discuss and endorse such a principle in vacuum without having the details of the tenure, the principle and the composition of such government? Again, we are debating the implication of Senator Okadigbo’s Item (c). I will read as follows: “In this regard, the Senate has taken due and legislative notice of the pledge of the president to the effect that together with the Interim Federal Executive, the National Assembly will take the leadership in steering the ship of the state during the interim period for the good government of our nation while the legislature should be the basis of the democratic legitimacy of the new Interim National Government.â€\nWhat this implies is that, yes, you have accepted. It is all right that we are searching for a way forward but should we not again ask for a lot of details before we start to commit our people? Interim National Government in accordance with the constitution might be a way forward; Interim National Government by a plebiscite or any other means might be a way forward. But as distinguished Senators, I appeal to you to wait and see (and be) cautious, and also get the details of this proposal Interim National Government. Also, we expect the restoration of our powers. However, according to the promise on hand, we have no details of those conditions associated with them. As distinguished Senators, should we accept or be implied to have accepted, in vacuum, the promise by the military given the fact that everything that this legislative body is about to endorse today will one day stand the judgment of history? Finally, I believe that the distinguished Senate will also require further information on the legal status of the National Assembly vis-à -vis the proposed Interim National Government. Distinguished Senators we have looked and made several efforts for a sustained unity and united country. We have heard so many stories today about coups and counter coups that we could do nothing about…\nSenator Bennett Birabi (River East): Point of Order, Mr. Chairman, I rely on order 31 (6) which says: No Senator shall impute improper motives to any other Senator. I want to say that the relevant section of this motion which Senator Tinubu is making reference to, that is section (c), does not in any way imply that Senator Okadigbo has accepted the Interim National Government. He only noted it, and he quoted what he noted. It was just a quotation; it does not decide in any way. So, I want to request that that motion be corrected. Thank you.\nThe Chairman: I have taken due and legislative notice: Does that imply acceptance? Senator Azinge can you help me?\nSenator D.K. Azinge (Delta North): No, Mr. Chairman, Sir, it is just noted.\nThe Chairman: What is legislative notice?\nSenator Azinge: Legislative notice implies that we are noting the paper being laid on the Table, and reserving our position until the ingredients are received by this august Senate.\nThe Chairman: So, what is clear is that this Senate is not endorsing any Interim National Government because we do not know what it contains. Point of Order upheld. Senator Tinubu, you may continue.\nSenator Tinubu: Thank you, Mr. Chairman. Also we have seen the agony of our people always being punished by the military, according to the scenarios that we have heard described today. Distinguished Senators, we have a situation today that suggests that the abortion of June 12 election is another coup d’etat; it can be termed as another coup d’etat. My question is, when are we going to stop tolerating injustices, coup d’etat and abuse by the people on whom we invested so much resources – the public funds of this country? The highest portion of Nigerian budgets since independence is being invested on the military, from their barracks to the ammunitions purchased for them and up to their uniforms. The oath of office taken by the military is to protect the citizens and the sovereignty of this country. It is a matter of conscience. Should we continue to tolerate the situation where the military turn that investment against us, to abuse, to restrict and to prevent justice taking place? Yes, it is true that we have a crisis, but to every action there must be a reaction. This is a self-inflicted crisis because without the abortion or annulment of the June 12 election, there would be no crisis like this. We have a government that made law and abused its own law. Therefore, the present military administration, by virtue of abrogation and violation of its own decree has committed a crime. Be that as it may, we are now looking for the restoration of our powers. I wish this distinguished Senate to pay attention and seek clarification. I have seen another booby-trap in the present speech. The booby trap is the offer by Mr. President to step aside. The president should give us a decisive position. This request should also be in the letter requesting for other details. We welcome his decision to step aside, but we want decisive details to show as he promised that this is the final military government that will ever emerge in the governance of this country.\nSenator Sunday Bolorunduro Awoniyi (Kogi West): Mr. Chairman, distinguished Senators, I speak here as a Senator of the Federal Republic of Nigeria and not as a Senator of my senatorial district. We are passing through a very difficult time and I want to hinge my contribution to what the Senator from Adamawa Central (Senator Hamman Bello Muhammad) said: appealing to those who are aggrieved by the decision to annul the 12 June election to think of a tomorrow. Our situation in Nigeria today demands the patience of a Job and the wisdom of a Solomon and it is my prayer that God will give us both.\nSome Senators: Amen.\nSenator Awoniyi: That great ruler of Israel, David had moments of joy and moments of great sorrow. The story is told that he called the wise men of his court to go and find a simple statement that would be useful in times of joy and in times of sorrow. They tried for days and did not succeed until they approached his son, Solomon, who gave them the answer. Very simple, he said, it should be inscribed on the ring these four words: ‘This too, shall pass.’ In times of sorrow, and in times of disagreement, if we can only realize that such moments too will pass or that there is a future, it will be heart lifting. In moments of great joy, ‘this too shall pass’ makes it possible for one to remember not to over rejoice because there may be those who are in sorrow. I commend this to this Senate. As for wisdom, it is a story too that I am going to tell you, related to those great men of Israel. Alexander the Great, the Macedonian prince, with his army swept through Asia Minor and into the Palestine and saw the beautiful temple built by the Jews to the glorification of the holy name of their God. He loved it and decided that the temple had to be named after him. Naturally, to the Jews this was sacrilege and the high priest was in great difficulty: how could he refuse the conqueror of the world this request? It could mean execution for him and his people. He therefore prayed for inspiration and wisdom. So he told Alexander the Great: ‘We would do better than just naming a building after you: we would not name this building after you, we would name every male born throughout that year after you Alexander.’ He agreed. Today, some people would have wished to be Martyrs and would have resisted Alexander and would have been destroyed, the temple along with them. To those who are still aggrieved, I give you those two stories that please act as there is a future as Senator Hamman Bello Muhammed told you, and let us have the wisdom of a Solomon in what we say and in what we do. For me as a person, June 12 up to now has been a wonderful experience because it is very interesting that those who stand on it most of whom I knew in the past happen to have been men who are the greatest autocrats, unreasonable rulers as chief executives of their states. Also, what people tell me in private about their feeling regarding June 12 election is quite different from what I see them advocate on the pages of newspapers a couple of days later. Gentlemen, there is fear. People are afraid that they could be attacked personally, their family wrecked and their businesses destroyed if they did not stand by the June 12 election. We can appreciate that type of fear and to deal with it calls for the courage of a peculiar type which is not easy when your families and your livelihood are in danger. I accept that we do not want to be traduced: we want to be praised, but you do not appear in a posture of intransigence more in public than you do in a private discussion and this needs a little bit of balancing. In conclusion, I just want to suggest that from my little experience and the reading of history, it is not always wise to start a battle which you cannot win. I will just give you something which is a matter of record. You should look into any averagely reasonable Who’s Who for the details about General Babangida. Here is a man who is an armoured officer trained in the best armoured schools and armoured centres, in Britain and in the United States; Here is a man who in his career won a civil honour of Commander of the Federal Republic and who in his military career wears the Defence Service Medal, the National Service Medal, the Royal Service Medal; The Forces’ Service Star, the General Service Medal and the first set of graduates of the Institute of Policy and Strategic Studies in Kuru, Jos. This is the man whom some people say they want to take on. If you saw him read the address annulling this election are you not really throwing your supporters and innocent people into danger? If you say you are going to be intransigent, what have you really got?\nA Senator: What about David and Goliath?\nSenator Awoniyi: You would find out that David had a sling but you have nothing. (Laughter) Mr. Chairman, Sir, distinguished Senators, what I fear most is crisis. And, as we listened to the Minority Leader giving examples of countries which have witnessed crises at different times, you would see that these countries’ leaders were tolerable and when they would not yield they went into negotiations. Six months later, distinguished Senators those leaders wish that they were more tolerable six months earlier. That is the nature of crisis. Mr. Chairman, Sir, I hope that with this little contribution, I have tried to be brief.\nThe Chairman: I will allow only two more contributions. For today, Senator Ladoja and Senator Oboro will end the discussion – (Laughter).\nSenator R.A. Ladoja (Oyo South): Mr. Chairman, distinguished Senators, I have listened to everything being said by my colleagues, and adequate notes have been… (Applause) But there is one aspect that has not been taken. The President came here and told us something which we have not touched. I will tell you what he said. He said this programme is not marketable enough. Do you believe it is marketable enough? Today, we have to let the government know that we are going democratic. For us to go democratic the only way forward is to do away with the decree and that is the situation. If the President wants this thing to be sold, he must make it the more detailed for us by presenting to us the details of the Interim Government, and also assuring us that the constitution will be the supreme law of this country. Thank you (Applause).\nSenator Felix O. Oboro (River West): Mr. Chairman, my colleagues, I thank you very much that I am going to conclude this discussion today. I want to bring this debate back to the main topic. And the main topic is the motion by Senator Chuba Okadigbo based on the president’s address; and I do not want to repeat what other Senators had earlier said. But I want to make brief comments on those who are still very steadfast on the June 12 election. We would bear in mind that the last time we met the President; our Senate President was asked by the press what he felt on the Interim Government and June 12. I rightly appreciated the response of our Senate President when he said that the press should go to the spokesmen for the parties. I do not want us to comment further on the issue of June 12 here, it is a matter that has to be handled by the party authorities. We accepted to be inaugurated by the president on 5th December, 1992; that is we accepted to be sworn in by a military government. And what we are passing through now is what we envisaged. (Interruptions) So, for somebody to stand here and say that because we were elected, the man has no right to do what he wants to do, I think we need to be patient, and I want everybody to be patient a bit.\nThe Chairman: Thank you very much. For the motions on the floor, I want only a few more contributions before I put the question.\nSome Distinguished Senators: No! No!!\nThe Chairman: Senator Ahmadu Ali, if you all recall, I tried at the beginning to make some proposals on the motions and the counter motions. I have good reasons for making that proposal, but it was objected to and we carried on with the discussion. I will indicate that when I tried to reconcile the two I discovered that it was only in two paragraphs that there was any difference. Out of five paragraphs the differences were very minor but important. The first difference has to do with the inclusion in the original motion that the Senate notes that the President and Commander-in-Chief has voluntarily offered to step aside. The significance of that incidentally was drawn up by the distinguished colleagues in their own debate, when a number of them made reference to the fact that the president actually is very courageous. If you go through paragraph 29 of the speech, there are areas where the president has indicated that Nigerians now seem to have the general perception that General Ibrahim Babangida is the issue and hence the focus of all possible lead to the solution of the present impasse. On page 28 he again refers to the fact that many and varied attacks which hit him personally and his family have now been concentrated on him. I think there are several other passages which refer to various darts thrown at him and of the situation where he has been able to manage the crisis and survive. I may not be a military person, but when this type of strong wording comes from a military person, and of the day such a courageous person submits that he voluntarily has offered to step aside after exhaustive consultations with Service Chiefs, I think it is something to read very carefully. They are pregnant with meaning and they are not words to be ignored in our consideration of this very important speech. Secondly, that is the significance of the import of the original motion which included that bit which is not covered by Senator Okadigbo’s counter motion. The second difference is the need to wait for details before we can continue a detailed debate on the subject. That is the only difference in that particular paragraph. So, apart from these two differences, I personally did not see any difference between the motion and counter-motion. I was quite pleased to learn from Senator Okadigbo’s submission that they had actually discussed and put together one common motion. However, since that suggestion was not accepted by Senator Okadigbo, I then allowed the debate to continue on the motion and the counter-motion. At this point I have nothing else to say but to put the question and allow you to vote, firstly on the counter-motion. Once that is adopted or whatever we adopt, we can then proceed by summarizing what we have discussed at the Committee stage so that time permitting, we should return this night to the level of the Senate and report back to Senate. Based on that, I now proceed to put the question on the counter-motion as proposed by Senator Okadigbo. I do not think there is any need to read everything.\nSome distinguished Senators: No.\nQuestion put\nThe Chairman: I think the Ayes have it.\nÂ\nThe Chairman: At this point, I think we have finished our work at the committee stage and the summary of it is obvious. We cannot bring the resolution in place of the motion sponsored by Senator Chuba Okadigbo. Other issues are the anxieties expressed about the fears in the country, about the unity, stability and progress of the country and of the need to move forward in a peaceful atmosphere. So, after very exhaustive deliberations on various issues affecting the country based on the president’s address, those are some of the issues which we have noted. After discussion on the issue of the Interim Government, there is need to uphold the constitution, then return of powers to the National Assembly and the role of the Armed Forces to defend the country both internally and externally as provided for in the Constitution. We will now return to the Senate and report back as briefly as possible.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2018/06/14/june-12-a-complicated-story-2"}
{"doc_id": "dbe84b9d2626a74173c73b2fe099f1f3", "text": "An unbiased examination of the 2014 budget proposal presently under consideration of the National Assembly will reveal that it is not doomed after all, as those opposing it would have us believe. From all indications, the budget has a potential to lay a great foundation for the growth of the Nigerian economy.\nBeing one of those who become upset about the negative headlines and op-eds that tend to portray the Finance Minister as incompetent in the preparation of this budget, I decided to go online and download the budget. After dissecting it, I came to the realisation that those opposing it are making much ado about nothing. This is a budget that is comprehensive and detailed down to how much is spent on buying cutleries.\nI was awed and motivated to write this piece by the level of thought that must have gone into preparing the budget. I will attempt to look at some of the budget’s highlights. But before that, it is imperative that we understand that the budget is not simply a set of revenue and expenditure plans by government. Rather, it is a statement about government’s fiscal and related policies which are intended to move the economy forward. Therefore, the budget is not only about the resources being allocated to various sectors alone, but also about fiscal policies aimed at stimulating growth across various strata of the economy.\nFrom this context, an informed analyst will understand that for any budget to be given a pass mark, some fundamentals must be present. Fundamental questions such as what are the fiscal policies and related polices being put forward to advance the economy? Of course, we must look at the figures; but it is equally important to look at the policies. The 2014 budget scored a great point in both counts.\nMortgage\nFor an average Nigerian, owning a house is a tall dream that seems unattainable. It is like climbing Mount Everest on an empty stomach. Understanding the magnitude of this challenge, the Jonathan administration initiated a policy that collaborates with the private sector as well as World Bank’s setoff loan of $300 million for this purpose. The money is to be used to set up a Mortgage Refinance Company to cater to the affordable housing needs of the Nigerian masses.\nAt the inauguration of the mortgage firm by President Jonathan in Abuja three weeks ago, the Finance Minister was reported to have assured that this scheme will be driven by integrity.\nThe government has also put in place supportive policies for the housing sector, whilst aiming to catalyse eight times more than what is allocated for housing in the budget by supporting the private sector to be the deliverer and creator of jobs.\nThe Nigerian Mortgage Refinance Institution will have $250 million as seed capital. It will float bonds for another N50 billion. That is already almost N100 billion in capitalisation. Juxtapose that with the N12.9 billion that sits in the 2014 budget, it reveals that these are catalysts to bigger government policies that liberate more resources and create jobs. Now, I see reason why the 2014 budget is termed budget for job creation and inclusive growth.\nAgriculture & Reinforced Sectorial Initiatives\nIn Agriculture, the government has affirmed that it will continue to focus on sectoral initiative with a plan to empower 750,000 young Nigerians to become Nagropreneurs. In addition to the establishment of a wholesale development finance institution aimed at granting Nigerian entrepreneurs access to affordable financing, the budget holds hope for the producing sectors of the economy, including agriculture.\nThe government is establishing a Fund for Agricultural Finance in Nigeria (FAFIN) with $100 million. It will focus on SMEs and boost manufacturing in these SMEs by implementing the Nigerian Enterprise Development Programme (NEDEP) to help SMEs with business development support, provision of access to finance and training. This will support young people who are involved in the SMEs sector.\nInfrastructure\nA closer look at the budget also reveals that it beefs up investments towards completion of critical infrastructure projects including those in the power, rail, roads and aviation sectors.\nUndeniably, the 2014 budget presents a ray of hope for the Nigerian people. It is a budget that is building the foundation for a robust economy that provides good jobs and wealth for the Nigerian people. As a nation, we need to examine things by ourselves and not act solely based on what people say.\nWhat people say are often garnished with agenda, opinions and political leanings! I have read it for myself; the 2014 budget is not as bad as we are being made to believe by the opposition politicians.\nThere is hope in the 2014 budget.\nBy: Olusola Daniel", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/affordable-housing-for-nigerians/"}
{"doc_id": "e42f182f477893b71e6aba5b9da95f4e", "text": "Beta Glass, Cornerstone Insurance, Glaxosmith, Forte Oil and Transcorp made the ranks of stocks that recorded positive growth on the floor of the Nigerian Stock Exchange (NSE) on Wednesday.\nThe major market indicator, the All-Share index recorded a decline of 0.75% to close at 29,062.5 index points leaving the equity market capitalisation at N14.99 trillion.\nTop gainers\nBeta Glass was the best performing stock on the bourse with 10% gain to close at N64.9 followed by Cornerstone Insurance Plc which gained 9.43% to close at N0.58. Glaxosmithkline gained 7.14% having closed at N6 with Forte oil also recording 6.44% gain to close at N19 while Transnational Corporation rounded off the list with 4.85% gain to close at N1.08.\nLivestock Feeds and Sovereign Trust Insurance lost the most today with 9.09% decline to close at N0.5 and N0.2 respectively. Meyer Plc recorded 8% loss to close at N0.46 while Etisalat Transnational lost 7.69% to close at N7.2. Fidson Healthcare rounded off the list with 5.45% loss to close at N2.6.\nTop trades by volume\nMorison Industries recorded the highest trade of shares today on the stock exchange market with trades in 126.77 million units valued at N57.05 million across 3 deals followed by Access Bank, which traded in 52.47 million shares at N536.58 million across 413 deals.\nUBA traded 31.97 million units of shares at N274.1 million across 431 deals, Zenith Bank traded 31.55 million units of shares valued at N674.03 million across 572 deals while Transnational Corporation closed the list with trades in 17.86 million units of shares at N19.01 million in 75 deals.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/01/15/beta-glass-forte-oil-transcorp-lead-gainers-chart-on-wednesday/"}
{"doc_id": "279ccf74bd24fbf7213eb6ad5063ad75", "text": "NASS pass 2018 budget, raise spending to N9.1 trillion, oil benchmark to $51\nKEY INDICATORS\nBonds\nThe bond market traded on a relatively quiet note, with yields ticking slightly higher by c.1bp due to slight sell on the 2036s and 2027s towards close of trading. We expect some price recovery in the near term, as the yield premium on inflation is relatively attractive especially to the local institutional clients.\nThis view would be strengthened by a further moderation in T-bill yields, especially if the CBN decides to relax its current liquidity tightening posture.\nSource: Zedcrest Dealing Desk\nTreasury Bills\nYields in the T-bills Space moderated further downwards by c.10bps as market players began to price in their OMO auction expectations for tomorrow, with the auction largely expected to clear at +5bps (11.10/12.20) based on prior trends. The PMA auction by the CBN was fairly subscribed, mostly from non-competitive client bids.\nThe auction stop rates consequently cleared at about 150bps below their secondary market levels. We expect a relatively quiet trading session tomorrow, as market players shift focus to the OMO T-bill auction, which we do not expect to be heavily subscribed due to the liquidity strain in the market.\nSource: Zedcrest Dealing Desk\nSource: CBN\nMoney Market\nThe OBB and OVN rates rose to 23.33% and 24.67%, as system liquidity still remained tight at c.N63bn negative. We expect rates to decline slightly tomorrow on the back of expected inflows OMO T-bill and net PMA repayments (N296bn). This is however baring a significant OMO T-bill sale by the CBN.\nSource: FMDQ, Zedcrest Research\nFX Market\nThe Interbank rate depreciated by 0.02% to N305.85/$ from its previous rate of N305.80/$. This was just as the CBN’s external reserves posted a 2-day decretion of $72m down to $47.79bn as at 14-May. The NAFEX closing rate appreciated by 0.23% to N360.77/$, while rates in the Unofficial market remained stable at N362.00/ $.\nSource: CBN, FMDQ, REXEL BDC\nEurobonds:\nThe NGERIA Sovereigns remained slightly bearish with yields inching slightly higher by c.3bps on average. The 27s and 47s were the most traded and lost about –0.15pt on average.\nThe NGERIA Corps were also bearish across all traded tickers except for the ACCESS 21s Snr which posted a marginal gain of +0.10pt. The Zenith 19s and 22s recorded the highest loses of about -0.15pt.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2018/05/17/interbank-fx-rate-rises-amid-slowdown-in-reserve-accretion/"}
{"doc_id": "aa16c10f23d905859865a61175ed8a8b", "text": "Investing in property is usually done to earn a return through rental. One may even want to sell the property in the future, receiving a significant return, considering that land and buildings do not depreciate in the same way that other assets do.\nLast week I visited one of my favourite clients in the property development space. As I was about to leave, the managing director’s secretary and I got into a candid conversation about how most developers have a network of investors they invite for the initial phase of a new development. She explained that these investors would buy into the development before even the first brick is laid. They believed in the company, but most importantly they understood the investment upturn.\nThis reminded me of the sales of my first book, “What’s your move”. We sold over 1000 copies as pre-orders. The book had not even been printed at that moment. The difference is that there is an immediate appreciation in value when the first phase of a building is completed.\nIn my experience as a property investor, I ferociously dislike the idea of tenants, but also dislike buying property shares. The secretary had just given me an idea worth looking at. But there was the icing on the cake. She vaguely went into a tax incentive for investors with five or more new development properties. When I got home, I did some digging. I found that: “The South African Revenue Service permits a significant tax benefit on residential property under section 13sex of the Income Tax Act. This allows purchasers of residential units to ‘write-off ’ a percentage of the cost of buildings, or improvements thereof, acquired or built after 21 October 2008.”\nProperty is an exciting asset to invest in when you genuinely understand it. Most people think investing in property is buying a massive chunk of land or a building. But it’s not necessarily the only way to do it.\nThere are different forms of property investment:\n- Buy-to-let: you buy a property and rent it out to tenants. This form of investing provides you with high capital growth, especially in and near city areas where people are not looking to settle down to buy their own house. You may also want to consider renting to commercial tenants, as they may be more stable, sign a lease agreement for a longer term, and pay higher rent.\n- Indirect Investing: using real estate investment trusts (Reits), unit trust funds, property company shares or land banking schemes allows you to invest in property through shares and stocks instead of holding actual physical property.\n- Property flipping: you can buy an old, damaged property that may not sell on the market for a high amount and renovate it inexpensively. After that, the property can be sold for profit.\n- Rent out a room: one of the most accessible investment strategies for a quick, lower amount of income for your everyday needs would be to rent a room in your house or an outside cottage, as done on Airbnb. You could even rent your entire home when you and the family are away on holiday.\nFor any sort of physical property investment, there are always additional costs involved. These include tax on rental income, bond repayments, insurance, administration and agent fees, so be prepared. Always ensure that the rental yield or selling price factors in all these costs.\nFinding a tenant is not always easy; you may need to start the first few months on the market without tenants. Make sure your finances can stomach paying certain costs until then.\nIn choosing a property, remember “location, location, location”. Look for areas that are on the rise. Think about areas where youth may want to start their adult life, places where families may wish to settle down. Think about areas where old people may wish to retire. The location of your property will determine the degree of success of your investment.\nNothing is guaranteed in this life, but one thing you can count on is that the ground under your feet is not going anywhere unless there is some earth shapeshifting. Investing in property with its risk remains a better bet compared with others if done correctly. Yes, depending on the market, economic indicators, interest rates, certain investment factors may vary. Still, you can count on a tangible asset that, if taken care of, will take care of you.\nNicolette Mashile is the co-host of the SABC1 talk show Daily Thetha, an actress on Generations and the founder of Financial Bunny, a financial literacy platform. She has now written a book, What’s Your Move? A Collection of Ordinary Financial Lessons.\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/investments/property-is-a-tangible-asset-you-can-count-on-9582e667-b622-4abc-bc1b-25f0bb168287"}
{"doc_id": "c2d17d52797dcd2d2544c4c25e3b2e96", "text": "Ethereum (ETH), the world’s second most valuable cryptocurrency by market value, has more than doubled in value over the last four months. This has left BTC, the world’s flagship currency, in the dust.\nData from Coinmarketcap showed that Ether was trading around $293 at the time of this report, representing about 262% gain since March 12th, 2020, when it traded at $112. It’s market capitalization presently at $32 billion.\nIn addition, ETH miners are smiling to the bank as data feed obtained from Glasscode has shown revenue from fees surging to an all-time high. On the hourly chart, Nairametrics observed that more than a third of the ETH miner revenue currently comes from fees rather than blocks; up from less than 5% in April.\n#Ethereum miner revenue from fees is surging and at an all-time high (7d MA).\nOn the hourly chart, we're seeing that currently more than a third of the #ETH miner revenue comes from fees rather than block subsidy – up from less than 5% in April.\nRecall that Nairametrics had earlier given valuable insight about Ethereum’s price action, revealing ETH was finally breaking out of its long $200-$250 daily close range, and that it was time to revisit its historical model that illustrated the number of times a daily close transition had occurred between psychological support levels.\nETH is sitting in its “sweet spot” where the most polarization has historically unfolded (between the $200 and $300 levels) during its five-year history. A close above $300 in the near future would be the 42nd instance of the price closing above or below it.\nETH is a cryptocurrency designed for decentralized applications and deployment of smart contracts, which are created and operated without any fraud, interruption, control or interference from a third party. It is a decentralized system, fully independent, and is not under anyone’s authority. It has no pivotal point, and its platform is connected to thousands of its users through their computing system around the world, which means it’s almost impossible for ETH to go offline.\nLike with many other crypto assets, speculating with Ethereum can be highly profitable and has had a good history of giving its investors huge returns. However, there are also many other options to make income from Ethereum. These options include Ethereum mining, Ethereum faucets, and ETH staking.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/07/25/investors-are-now-rushing-into-ethereum-as-gains-surge-by-262-in-4-months/"}
{"doc_id": "2220d7a576a899b84fca5c85aa9fda5b", "text": "With his Comic Opera House, the tenor Joseph Oparamanuike, a. k. a. Mr Tenor, is set on turning around the fortunes of opera productions and appreciation in Nigeria, he tells Okechukwu Uwaezuoke\nOf course, nature couldn’t have possibly stood still. But, to the awestruck audience, it may appeared to have done so. All eyes were riveted on the slender ebony-complexioned tenor, whose age was somewhere in the early 20s. He was effortlessly and flawlessly belting out the familiar Neapolitan song, “O Sole Mio” to the delight of the decorous gathering.\nThis was at a private concert, organised by a music-loving entrepreneur at his residence in the upscale leafy Lagos mainland neighbourhood, known as Ikeja G. R. A. And the young tenor, who was holding court from a corner of the two-storey building’s living room, was Joseph Oparamanuike.\nSo much has happened since then. The profile of the Federal University of Technology, Owerri (FUTO) graduate of chemical engineering has grown enough to make him one of the leading figures in the local classical music scene. Soon after parting ways with his engineering job to concentrate on music in 2007, he decided to sit for the Musical Society of Nigeria (MUSON) and Associated Board of Royal Schools of Music (A. B. R. S. M.) graded examination. This was from Grade 8 until he got to the Licentiate of the Royal Schools of Music (L. R. S. M.) level. In 2008 and 2009, he made the best result in West Africa in both Grade 8 and the A. B. R. S. M. diploma in singing and became the first Nigerian to sit for the A. B. R. S. M. diploma in vocal teaching and licentiate in singing in the sub-region. Thus, he was able to secure the Royal Conservatoire of Scotland (R. C. S.) Trust Fund Scholarship with the intention of studying for an M. Mus in performance singing and ended up studying for an M. Mus in opera. This was after an PGDip in performance singing.\nWhile in Scotland, he had the opportunity to regale his audience with Nigerian songs which he performed at his recitals.\nOparamanuike, who in the classical music circles is called Mr Tenor, likens embracing music to answering to the call of the essence of his existence. Passion, he adds, is what eggs him on. Now, he can say with a sense of fulfilment and pride: “I am a full-time musician. And I am currently the MUSON head of opera, singing teacher in both MUSON Basic School and Diploma School and the founder of Comic Opera House.”\nFast-forward to 2016. He registered an opera company, which he named the Comic Opera House. This outfit, which is commonly abbreviated as C. O. H., was launched with an opera performance, titled Don Pasquale. With the company, he hopes to train more opera singers and create more awareness for the genre in Nigeria. This would be possible with adequate training given to those who are interested and gifted with operatic voices.\nEven after having travelled far and wide for the cause of classical music, he is not discouraged by the fact that Nigeria still has a long way to go. He is rather consoled by the fact that “the gap has been reduced a bit with many people seeking proper music education.”\n“If we can create more awareness on grass root music eduction and, also, if the government can come in, I will say the gap can be closed up more,” he adds.\nStill on the government’s support, he continues: “Yes, the government has an immense role to play in music. A lot of subsidies can be put in place to help the classical music industries, the government should look more into the music departments in our universities and help equip them with good facilities and bring more qualified lecturers to add to the ones we have.”\nTalking about facilities, he says that there are “very few good concert halls in Nigeria and the standard are quite good but can be better.”\nBesides, he believes his efforts so far are beginning to yield fruits. “On the scale of 1 to 10, I would say we are on 7. We still have more to do in the area of having full orchestra for our productions.”\nOn this note, he sees a brighter future for classical music in Nigeria, declaring that “things are actually changing and I am so hopeful that things will definitely come up well.”\nAlready, since 2016, he has organised about 10 opera productions so far. Among the highlights of these productions was his featuring at The Switzerland Consulate General 2018 Opera Performance with the MUSON as Rodolfo in Puccini’s La Boheme and his singing as Tonio in Donizetti’s La Fille Du Regiment for the MUSON. He also sang as Tamino in Mozart’s Die Zauberflöte for Opera Abuja in December 2016 and as Nemorino in L’Elisir D’Amore for MUSON in April 2016.\nAt the launch of the C. O. H. in September 2016, he appeared as Ernesto in Donizetti’s Don Pasquale. This was after singing, about two years earlier, the concert version of Edgardo in Donizetti’s Lucia Di Lammermoor with the Scottish Opera Orchestra in February 2014.\nIn January 2018, he toured with the Chorakademie Lübeck and Bamberg Choir to Hong Kong for the production of Wagner’s Götterdämmerung with Hong Kong Philharmonic Company. Later in July that year, he conducted and directed Sullivan’s The Yeomen of the Guard. Earlier, he had conducted and directed two opera productions for MTNF/MUSON School of Music: Sullivan’s Patience in July 2016 and Mozart’s Magic Flute in July 2017.\nIn addition, he had made two performance tours with the Chorakademie Lübeck. These tours saw him hop-scotching through Europe to Asia and to North America in 2015. This was a year after his performance at the Commonwealth Week as part of the 2014 Games held in Glasgow (Scotland) in the presence of Her Majesty, Queen Elizabeth II and His Royal Highness The Duke of Edinburgh. He was subsequently invited to sing again at the 2014 Commonwealth Broadcasting Association Conference.\nOparamanuike’s first exposure to music dates way back to when, as an impressionable child, he would listen and watch his late father sing along in an enchanting tenor voice to the LPs of a singers like Jim Reeves. Later, in 1988, he joined the school choir of St. Peter Claver Seminary, Okpala, Imo State. “I was an alto singer,” he recalls. “In 1995, I started singing tenor and this was my first time of singing solo as a tenor with the St. Joseph Catholic Youth Choir, Ulakwo, Imo State.”\nHe would later become the choirmaster of both the youth and parish choirs. When he gained admission into the Federal University of Technology Owerri (FUTO) to study chemical engineering, he became a member of St. Thomas Aquinas Catholic Chaplaincy Choir (now called Golden Voices) at the tertiary institution. Three years later, he took over the reins as the choirmaster and held the first ever concert in FUTO. “I must also say I had a good musical moment with Cororosa as a member and one of the conductors.”\nIt was after his graduation from the university that he moved to Lagos for his National Youth Service Corps in 2002. He joined the Sir Emeka Nwokedi-led MUSON Choir the following year and later won the MUSON Talent Hunt Competition, which gave him a new breakthrough in his musical career.\nAs his sources of inspiration, he names Maria Aseeva (a former MUSON resident pianist), Professor Laz Ekwueme as well as the three tenors: Andrea Bocelli, Juan Diego Florez and Lawrence Brownlee, among others.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2019/06/23/a-tenor-egged-on-by-his-passion"}
{"doc_id": "50e23e045741e4bb0ec1c9fec72f91bf", "text": "The President of Venezuela, Hugo Chavez, has signed into law a new bill which bars brokers in Venezuela from trading the local bolivar currency as well as public-sector dollar-dominated debt. The bill means that private brokers will only be able to trade in local equities and private sectors securities. The move is mostly symbolic, as there was almost no initial public offering or investment banking in Venezuela last year. Chavez faces legislative elections in September, and he's blaming private brokers for country's inflationary and currency woes. Read more: Reuters\n0", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2010-08-18-chavez-restricts-brokers/"}
{"doc_id": "82dd82ac880bd43f6000683c64895863", "text": "With many farmers scampering for safety because of rising insecurity coupled with storage challenges crimping output, the relentless rise in food prices has shown no signs of abating.\nNigeria must fix its structural deficiencies limiting productivity and address the worsening insecurity hindering farmers from returning to farms in its bid to stabilise food prices and attain security, industry experts have said.\nFarmers who spoke to BusinessDay say the country has lost 60 percent of its food production in key-producing states owing to rising insecurity and structural deficiencies.\nThey said apart from unveiling an immediate, short and long term plan, the provision of critical infrastructure across the agricultural value chain is a prerequisite to enable the country to feed its 200 million people and reduce post-harvest losses.\nKabiru Ibrahim, national president of the All Farmers Association of Nigeria, said the right infrastructure to support food production and distribution is lacking in the country’s agricultural sector.\n“The government must work to provide sufficient storage to minimise post-harvest losses and good transportation for efficient distribution of goods and services,” Ibrahim said in a response to questions.\nCritical infrastructures such as motorable rural roads and storage facilities, among others, are still absent in Nigeria’s food supply chain, hence reducing farmers’ earnings as high costs of production filter through to prices.\nA stakeholder who declined to be identified called on the government to adopt a short term strategy to reduce post-harvest losses to boost food supply.\n“Nigeria losses 50 to 60 percent of its food production to post-harvest losses and eliminating or reducing it helps increase food supply without necessarily increasing production,” he said.\nPost-harvest losses in Africa’s most populous nation have been estimated to range between five and 20 percent for grains; 20 percent for fish and as high as between 50 and 60 percent for tubers, fruits, and vegetables, according to experts.\nNigeria needs to spend $3 trillion and five percent of its GDP annually to bridge the infrastructure gap, according to the National Infrastructure Master Plan.\n“The government of the day is out saying all sorts of things on how it intends to stabilise food prices and boost food production, yet no one is looking at the entire value chain,” said AfricanFarmer Mogaji, chief executive officer of X-Ray Consulting.\n“No one is looking at addressing the challenges of transportation and storage which render most agricultural produce useless,” he said.\nHe added that the country must leverage technology in creating innovative solutions that would boost agric productivity and enable farmers to gain access to wider markets and scale.\n“If we must feed ourselves and drive economic growth, then it is time the government takes the issue of technology and innovation seriously in the agric sector,” Mogaji said.\n“We must be innovative in our design, implementation, and execution of agricultural programmes, projects, and activities in agriculture now because it is technology that drives today’s agriculture,” he added\nGlobally, innovation and technology are positively impacting crop production as farmers deploy farm machines, tractors, drones and artificial intelligence to aid farming.\nBut Nigeria is lagging far behind in the adoption of mechanisation and tractors.\nAbiodun Olorundenro, managing partners at Prasinos, urged government at all levels to make investments in long-term solutions to fixing the structural problems in the sector, stressing the need for an effective rail transportation system across the country to move agric products from farms to markets.\nAccording to him, apart from infrastructure, weak financing and market information have continued to limit market access to agricultural commodities.\nNigeria’s food inflation quickened to 33.93 percent in December 2023 from 23.75 percent a year earlier, according to the National Bureau of Statistics. Headline inflation quickened to 28.92 percent in December, its highest in more than 18 years.\nA source who does not want his name in print urged the government to identify the top 10 or 20 items in the country’s food basket and tackle their respective issues to stabilise prices rather than using a general approach. “Focusing on specifics would make a significant difference,” he said.\nJude Obi, president of the Association of Organic Agriculture Practitioners of Nigeria, said lots of farmers do not cultivate in places where they usually grow food owing to the worsening insecurity in the country.\n“The government must address the issue of insecurity if it is serious about food security and diversifying the economy through agriculture,” Obi, who is also the general secretary of the Soil Science Society of Nigeria, said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/agriculture/article/farmers-safety-to-storage-food-prices-in-nigeria-under-tension/"}
{"doc_id": "f7895f509b2fee5b1533c4b4384ec41d", "text": "South Africa forecast higher debt and wider fiscal deficits over the next three years, heightening the risk of further credit ratings downgrades as a fight for control of the ruling party limits policy choices. The nation’s currency and bonds weakened.\nFinance Minister Malusi Gigaba painted a bleak picture of the state of the country’s finances in his first mid-term budget on Wednesday, with growth and revenue set to fall well short of projections made in February. He warned there was little scope to raise taxes or cut spending.\n“It is not in the public interest, nor is it in the interests of government, to sugarcoat the state of our economy and the challenges we are facing,” Gigaba said in a written copy of a speech to lawmakers in Cape Town. “Improving our economic growth outlook over the period ahead remains our biggest challenge.”\nThe deteriorating debt trajectory threatens to trigger a downgrade of the country’s local-currency debt rating to junk by S&P Global Ratings and Moody’s Investors Service, which could spur massive capital outflows. S&P and Fitch Ratings Ltd. stripped South Africa of its investment-grade foreign-currency assessment in April, citing concerns about policy uncertainty and lackluster growth, just days after Gigaba replaced Pravin Gordhan as finance minister.\nThe rand weakened 1.4% against the dollar to R13.94 as of 2:58 p.m. in Johannesburg. The last weakest level was in April 2017, when it reached R13.90 to the dollar.\nEfforts to put Africa’s most-industrialized economy back on track have been hamstrung as leaders of the ruling African National Congress wrangle over who will replace President Jacob Zuma as party leader in December.\nZuma’s implication in a succession of scandals, including allegations that he allowed members of the wealthy Gupta family, who are in business with his son, to loot billions of rand from state companies have further dented investor confidence.\nZuma and the Guptas deny wrongdoing.\nSlow Growth\nThe Treasury expects the economy to expand 0.7% this year, down from 1.3% predicted in the February budget, and trimmed its growth forecasts for the next three years. Tax revenue for this fiscal year will fall R50.8 billion ($3.7 billion) short of the initial forecast.\nLower growth and revenue will feed through to a higher budget deficit. The gap is expected to jump to 4.3% of gross domestic product in the current fiscal year, up from a projected 3.1%.\nThe gap will probably stay at 3.9% of GDP for the next three years. That’s a break from the Treasury’s past pledges to steadily narrow the deficit.\nGross government debt is projected to mount to about 60% of GDP by 2021.\n“Government is acutely aware of the dangers of unchecked debt accumulation,” Gigaba said. “Debt-service costs are the fastest-growing category of expenditure, crowding out social and economic spending. Our resolve is to remain on course and not to deviate from the fiscal consolidation agenda we embarked on a few years ago.”\nSpending Priorities\nAny new spending priorities will have to be redirected from other projects, he said.\nThe government intends dipping into its contingency reserves and selling part of its stake in telecommunications company Telkom to help plug the budget gap and avoid a breach of its expenditure ceiling. Other steps to curb spending and bolster revenue will be announced in next year’s budget.\nMeanwhile, a team of cabinet ministers reporting to the president has been set up to find ways to stabilize debt, narrow the deficit, stimulate growth and build investor confidence over the next few years. Measures under consideration include further asset sales and reducing state companies’ reliance on government debt guarantees.\n“Hard choices are required to return the public finances to a sustainable position,” the Treasury said. “Unless decisive action is taken to chart a new course, the country could remain caught in a cycle of weak growth, mounting government debt, shrinking budgets and rising unemployment.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/207517/rand-sinks-to-lowest-point-in-2017-on-junk-status-fears/"}
{"doc_id": "5b6815dc28d5c64b842678387bcddfbb", "text": "Equity Group #ticker:EQTY has committed not to lend to any coal-related projects, with the policy prompted by the International Finance Corporation (IFC) that has just acquired a 6.71 percent in the country’s largest bank.\nThe international financier is leveraging its capital to fund environment-friendly ventures and block financing of polluting industries in an effort to counter climate change.\nEquity’s new anti-coal policy comes as the country prepares to exploit the commodity, with major quantities discovered in Kitui County’s Mui Basin.\n“Through this equity investment, Equity Group commits to zero lending for coal-related projects such as the development or expansion of coal-fired power plants, coal mines, transportation assets used exclusively for coal,” IFC and Equity said in a joint statement.\nThe bank will also refrain from funding any utility company that generates more than 20 percent of energy or revenues from coal, or have an annual coal production of 10 million tonnes or more, or have an installed coal-fired capacity of 5,000 megawatts or more.\nBurning coal is estimated to account for nearly half of carbon dioxide emissions and 72 percent of greenhouse gas emissions from the electricity sector worldwide.\nBamburi Cement #ticker:BAMB is among the major manufacturers that use coal to fuel production.\nEquity joins other African banks that have developed anti-coal policies on request from shareholders and investors, a trend that started in the developed economies.\nStandard Bank of South Africa earlier adopted a policy that made it more selective in the coal projects it can finance, with a focus on limiting emissions.\nKenya’s proposed 1,050MW coal power plant in Lamu collapsed after critical partners, including financial institutions and General Electric withdrew their support.\nIFC acquired its Equity stake from Britam #ticker:BRIT and has tightened its commercial ties with the bank by mobilising major loans to be on-lent through its subsidiaries in the region.\nThe global financier and its partners on Tuesday announced it has signed a deal to lend a total of $165 million (Sh19.1 billion) to the bank.\nIFC will provide $50 million while UK fund British International Investment will provide $65 million. Another $65 million will come from Symbiotic, Responsibility, and FMO.\nThe new loans bring total credit marshalled from IFC to $300 million (Sh34.7 billion).", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/equity-bans-loans-to-coal-projects-after-ifc-entry-3811066"}
{"doc_id": "c5c5d24a8f45750c84138211b2b823ff", "text": "Finding Fela\n30 May 2023\nJune promises to be super exciting with numerous thrilling movies and series hitting Netflix in June 2023. The month will begin on a very high note with The Days hitting the platform on the first. Here, those involved with Fukushima Daiichi face a deadly, invisible threat, an unprecedented nuclear disaster. On the second, Passport will…\nLatest\n1 day ago\nTwo women who filed lawsuits against singer Trey Songz alleging sexual assault in 2015 have voluntarily dismissed their cases, according to court documents obtained by TMZ. The lawsuits, filed in October 2023, accused Songz of non-consensual sexual acts at a party at his home. Neither party has provided a reason for dropping the lawsuits. Songz…\n1 day ago\nThe Central Bank of Nigeria (CBN) on Friday said it is considering raising the minimum capital requirements for Bureau De Change (BDC) operators to N2 billion for Tier 1 licenses while it would be N500 million for Tier 2 licenses.\n1 day ago\nApple has officially debunked the age-old myth of using uncooked rice to rescue waterlogged iPhones. The company’s advice? Don’t put your iPhone in a bag of rice. Here’s why. For years, desperate iPhone users have turned to a bowl of uncooked rice as a last effort to save their water-damaged devices. The idea was that…\n1 day ago\nSuper Falcons of Nigeria held Cameroon's Indomitable Lionesses to a 0-0 draw in Douala, in the first leg of the Paris 2024 Olympic qualifiers on Friday. The Falcons are targeting a first Olympic appearance since Beijing 2008. Since the 2008 games, the former African champions have missed three consecutive editions (2012, 2016, 2020). Friday's game…\n1 day ago\nAfrica’s top ten songs to hit their peak have been carefully curated for you, with each topping the charts at different times of the week. they are the most streamed on major platforms like Spotify and Billboard. Tyla’s grammy winning “Water” caps it on the Billboard dominating Nigeria's Grammy nominees, Ayra Star, Tems and Burnaboy.…\n1 day ago\nTo some extent, the Office of the National Security Adviser (ONSA) and the Defence Headquarters (DHQ) play strategic roles in ensuring that the public is adequately informed about the efforts and accomplishments of the security services, especially ongoing military operations. Behind the scenes, the National Security Adviser (NSA), Mallam Nuhu Ribadu, facilitates inter-agency collaboration and…\n1 day ago\nThe Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the government is implementing solutions to ease the hardship being experienced by citizens. Edun in an interview with Channels TV addressed several issues impacting Nigeria's economy, including rising inflation, food insecurity, and support for vulnerable groups. He acknowledged the rising cost of…\n1 day ago\nThe Economic and Financial Crimes Commission (EFCC) has arrested 46 suspected internet fraudsters in Bauchi and Ibadan.\n1 day ago\nCalvin Bassey said Fulham will head to Old Trafford with a positive mindset that they can defeat Manchester United in an English Premier League encounter on Saturday. Bassey who recently returned from the 2023 African Cup of Nations (AFCON) in Ivory Coast said this during an interview with the official Fulham website on Thursday. “We…", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/finding-fela/"}
{"doc_id": "9b775513262cffbcb368f5613d764369", "text": "JOHANNESBURG - Mercedes-Benz South Africa (MBSA) yesterday launched a R9.47bn ex-\npansion of its East London plant, describing the investment as a vote of confidence in the country’s new direction.\nMBSA said the expansion of the plant was a sign of the carmaker’s commitment to South Africa and efforts to revive economic growth.\nDivisional board member Markus Schäfer said that the expansion would involve the construction of a new paint shop and a new body shop, an upgrade of the assembly shop and new logistic warehouses.\n“With the investment of 600m, we are significantly expanding our plant in East London and equipping it for the future,” Schäfer said.\n“The decision to have the new generation of the C-Class built in East London reaffirms the plant and Mercedes-Benz South Africa. The investment is also a sign of our commitment to South Africa and efforts to revive economic growth as well as the socio-economic development of the East London region.”\nPresident Ramaphosa tour the Mercedes-Benz Learning Academy in East London. The facility is a locally based skills and artisans development Centre and a Public Private Partnership (PPP) between Mercedes-Benz, the National Treasury and the Jobs Fund.\nThe visit to the Mercedes-Benz manufacturing plant is in line with the country’s drive to raise $100bn in new investment over the next five years to create jobs and for development as announced by the President in April this year. A key milestone in this drive will be the Investment Conference to be held in October 2018 in Gauteng. 26/06/2018, Elmond Jiyane, GCIS\nThe expansion is the first major investment since President Cyril Ramaphosa announced his drive to lure $100bn (R1.35trillion) worth of investments to South Africa.\nRamaphosa attended the launch accompanied by Finance Minister Nhlanhla Nene and his Trade and Industry counterpart, Rob Davies.\nHe welcomed the investment by Mercedes-Benz Cars, saying a central priority for the government this year had been to encourage significant new investment in the economy.\nRamaphosa said this was necessary to realise economic growth, employment and reduce inequality.\nHe said it was an endorsement of the government’s determination to work with all social partners to seize the opportunities that are opening up for greater investment and faster growth.\n“A central priority for the government this year has been to encourage significant new investment in our economy, necessary to realise economic growth, employment and reduce inequality,” Ramaphosa said.\n“The announcement by Mercedes-Benz Cars to inject R10bn in the South African economy signals the positive momentum we are making to realise the ambitious target of raising R1.35trln in new investment.”\nMBSA said the expansion would add to existing buildings for the plant’s passenger vehicle production. The new workshops would incorporate environmentally friendly and state-of-the-art technologies.\nPresident Ramaphosa virtual spraypainting during the tour of the Mercedes-Benz Learning Academy in East London. The facility is a locally based skills and artisans development Centre and a Public Private Partnership (PPP) between Mercedes-Benz, the National Treasury and the Jobs Fund.\nThe visit to the Mercedes-Benz manufacturing plant is in line with the country’s drive to raise $100bn in new investment over the next five years to create jobs and for development as announced by the President in April this year. A key milestone in this drive will be the Investment Conference to be held in October 2018 in Gauteng. 26/06/2018, Elmond Jiyane, GCIS\nSA Institute of Race Relations chief economist Ian Cruickshanks said the investment by the carmaker was substantial. Cruickshanks said it would also benefit the country’s battered economy.\nEfficient Group chief economist Dawie Roodt said the investment was as a result of government subsidies that carmakers were getting in South Africa.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/pretoria-news/business-report/mercedes-benz-sa-in-r947bn-plant-expansion-plan-15711721"}
{"doc_id": "5f7f1d590dd6df67eb23c2b7106f8dbc", "text": "Sentiment around South Africa’s economic future may be somewhat dubious and uncertain, but the country offers a myriad of opportunities for innovation and resourcefulness.\nThis is the opinion of Gerrie Fourie, CEO of Capitec, who believes in the potential that South Africa holds for individuals and businesses who are able to reach beyond the nation’s challenges and identify the gaps that exist for progress.\nFourie discussed these opportunities during PSG’s latest Think Big Series webinar – a collection of dialogues with high-profile personalities that address burning issues.\n“I am a strong believer in looking for opportunities. You can go to Switzerland where everything works but there are no opportunities, or work within the South African market where not everything works but there are lots of opportunities,” said Fourie.\nHe also reflected on some of the fundamental points of differentiation that Capitec used to win its substantial market share and provided his outlook for the future of the South African banking sector.\nHaving joined the bank in 2000 as head of operations, Fourie was amongst the founding contingent. Today, he is the CEO of Capitec – the third largest bank in the country – despite its traditional counterparts having had a 100-year head start.\nWhen discussing the outlook for the local banking sector, he said that the future of banking is cashless.\n“Capitec invests largely in travel and collecting insights from around the world. We’ve seen the extensive use of QR codes and blockchain technology coming to the fore as the new future of the payments sector. In South Africa, we need to leapfrog from a cash-based way of operating to more digitised methods.”\nWhen asked about how aspiring bankers and innovators can steer the future of banking, Fourie is a big proponent of not “following the crowd,” which is a big part of what makes any new player in the banking industry stand out.\nHe said that the key is not to copy and paste what competitors are doing but to focus on what clients want and need, then find the competitive gap and build a product offering around those factors.\n“Differentiation and innovation are essentially at the heart of what industry disruption is and together, these two principles present a substantial opportunity for the sector.”\nAnother opportunity that tomorrow’s bankers can leverage is the unparalleled level of measurability that exists due to advancements in technology and the advent of big data. This is a factor that Capitec continues to leverage as it expands its product offering.\nBut at the heart of its operations is an understanding and appreciation of the fact that human connection is irreplaceable, and the future of banking rests on the harmonious hybrid of technology and human ingenuity. Capitec’s people-first philosophy – both externally and internally – is central to the way it does business:\n“You don’t learn by giving a committee the responsibility for making tough decisions, you learn by being immersed in the problem, dedicated to finding a solution and applying a trial-and-error approach.”\nIn the near future, Capitec will be setting its sights on the informal business sector where there are opportunities to serve the underserved. “Mercantile banking is something we’re very excited about,” says Fourie.\nFinding opportunities is a long-time theme for the bank. Looking back at the early days, Capitec set itself apart in the market by ‘banking the unbanked.’\n“Our entry strategy and the way we tackled the established banks was to set our sights on the areas that weren’t being serviced. We started in the rural areas, where no one expected a new bank to start. Nobody paid attention to us in the beginning, so we began the first phase of our development out of sight in a sense.\n“We gradually moved into urban areas and today, we’re proud to say that we can serve 95% of South Africans. Our goal was always to build a bank that could serve every type of South African because we didn’t believe in the private banking system. We answered a need in a practical way,” said Fourie.\nSimilarly, another gap identified was the industry’s banking hours. “We thought of ourselves more as retailers than as bankers. Therefore, we found no reason to open later than 08h00 and close earlier than 17h00. We challenged the private banking system that services a select few and developed strategies to serve everyday South Africans with their unique lifestyles and needs,” Fourie said.\nThose who are familiar with Capitec’s brand messaging will know that “simplicity” is one of the bank’s cornerstones. Fourie explains that it is in fact one of four fundamental propositions upon which Capitec was founded, namely: “affordability, accessibility, simplicity and service.”\nIts founding members shared a mutual disdain for the asterisk – a punctuation mark that has come to characterise endless and complex terms and conditions. The bank of the future breaks through this complexity and is, as he describes – “simple at the front but complex at the back.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/509240/capitec-boss-gerrie-fourie-on-the-future-of-south-africas-banking-sector/"}
{"doc_id": "b06133fa6db6051e9e5a5b3d1dbf40ee", "text": "The National Council of Provinces has passed the Employment Equity Amendment Bill, with the draft legislation now in its final stage of promulgation as it has been sent to the president for signing.\nAccording to legal firm Cliffe Dekker Hofmeyr, two of the major changes brought about by the bill is that:\n- The definition of ‘designated employer’ has been narrowed;\n- The minister of employment and labour has been empowered to determine sectoral numerical targets.\nDesignated employers\nIn the current Act, an employer that employs fewer than 50 employees (small businesses), but has a total annual turnover that is equal to or above the applicable annual turnover contained in Schedule 4 of the Act, is deemed to be a ‘designated employer’ and falls within the scope of application of Chapter 3 of the Act (which deals with affirmative action measures).\n“The aforementioned inclusion of small businesses has been removed in the bill, having the effect that Chapter 3 of the Act will no longer apply to small business regardless of their turnover.\n“Accordingly, these employers will not be required to have an employment equity plan, submit reports, and the like,” Cliffe Dekker Hofmeyr.\nTargets\nThe second major amendment, is that of the newly created section 15A, with the key aspects being:\n- The minister may identify national economic sectors, which in terms of the bill are defined as ‘an industry or service or part of any industry’.\n- For any economic sector that has been identified, the minister may set numerical targets to ensure equitable representation of suitably qualified people from designated groups at all occupational levels in the workplace.\nThe sectoral targets shall be published in the Government Gazette, allowing interested parties at least 30 days to comment on them. There is a likelihood that substantial litigation will flow from the setting of such targets.\nIt is envisaged by the director of employment equity that all current employment equity plans will fall away and be replaced with new employment equity plans in terms of the bill.\n“The essence of these amendments would result in less onerous compliance for small businesses and more onerous provisions for larger businesses,” Cliffe Dekker Hofmeyr said.\nCommentary by Hugo Pienaar and Gabby Schafer of Cliffe Dekker Hofmeyr.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/589428/stricter-transformation-rules-for-south-africa-get-the-green-light/"}
{"doc_id": "1a4b11e6d6401c4e2972d9c910792914", "text": "My years in financial journalism have taught me a few things about the financial services industry, and one thing I realised early on was that everyone is in it for their own interests, and the best you can hope for is that your interests and their interests are aligned.\nThere is no such thing as altruism in the world of money. Industry players need to justify their place in the lucrative sector. Don’t be fooled into thinking they’re in it for you. Their products may indeed offer worthwhile benefits (where would we be without car insurance or life cover, for example?), but the fact is that their upmarket lifestyle is at stake if they don’t succeed in convincing you that you need what they have to sell, and this bias underpins 99% of consumer-directed media content that, on the surface, appears informative and objective.\nThe profit motive is, of course, basic to any business. But in other lines of consumer goods, to my mind, the motive to sell and make a profit is more overt and unambiguous. In the financial sector, the marketing emphasis is more on “advice” and “thought leadership” than on in-your-face advertising, although there is that too, some of which is misleading in the extreme.\nAnother difference is the nature of the product. If you get tired of one brand of breakfast cereal, you can simply try something else the next time you go shopping. That is not the case with most financial products. Once you are committed to one, it’s difficult to extricate yourself from it and choose something else, and if you do, there may be a hefty price to pay, either to the provider in the form of administration costs or contractual penalties, or to the taxman if, for example, you trigger a capital gains event when switching investments.\nLife insurance policies are the worst in this respect. This is one financial product where you cannot afford to chop and change; you have to get it right the first time. The older you get, the more you pay for cover; it’s as simple as that.\nA further difference, which stems from the previous one, is the persistence of outdated distribution models. Distribution networks of commission-driven advisers selling insurance and investment products have not changed perceptibly in the past three decades, despite the evolution of financial products, regulations governing the industry becoming increasingly consumer-focused, and technological advancements. Why? Because there are tens of thousands of older South Africans who are stuck in products sold to them 20 or 30 years ago – so-called “legacy” products – and advisers that service them.\nResistance to change\nVested interests in financial products and business models are directly proportional to assets under management. Take the unit trust fund industry. Unit trusts have been around for decades, although it is only in the past 30 years or so that the industry has mushroomed.\nThe funds have traditionally been actively managed, meaning that a fund manager actively researches and selects the underlying investments. The model proved extremely lucrative for asset management companies – they were charging annual investment management fees of up to 3% of assets plus a performance fee if they surpassed a benchmark.\nThen along came passive exchange-traded funds (ETFs), which merely replicate an index, negating the need for highly paid investment analysts. They didn’t promise anything other than the performance of the index, at a fraction of the cost. (The first ETF in South Africa, the Satrix Top40, which invested in the top 40 companies on the JSE, was launched in 2000.)\nThis precipitated a shake-up for the active managers, most of whom cannot outperform passive ETFs over longer periods. They drastically cut the fees they were charging, for a start.\nYet the active fund industry is very much the dominant investment player in South Africa today – according to the Association for Savings and Investment South Africa, total assets under management in local collective investment schemes are about R3.3 trillion. Of that only R129 billion (according to Satrix) is invested in ETFs – that’s about 4%. Admittedly, there are many passive unit trusts on the market, but it’s safe to say that the vast bulk of South Africans’ savings is in actively managed funds. Compare that with the US, where in 2022, assets under management in passive index-tracking funds exceeded those in active funds (again according to Satrix).\nThe point I’m making, perhaps somewhat circuitously, is that there are vested interests in keeping assets where they are and resisting change, on the one hand, and attempts by new kids on the block to grab a slice of the pie, on the other.\nIf you keep this in mind, you will become more healthily sceptical of the arguments of thought leaders and the objectivity of media content. Much of what financial experts say may be relevant and useful to you; just know where they are coming from.\n* Hesse is the former content editor of PF.\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/financial-planning/words-on-wealth-beware-hidden-biases-in-consumer-content-5de32051-32f5-415e-a164-a520f9342929"}
{"doc_id": "989136093f6f61cf0b960de2afb80043", "text": "BULAWAYO Progressive Residents Association (Bpra) has joined parents and police in the country’s second largest city to fight drug abuse and rowdy…\nA LUPANE community organisation has called on the government to give preference to disadvantaged students from the region when enrolling students at…\nINDUSTRY and Commerce minister Mangaliso Ndlovu, pictured, has allayed fears government is interfering with the interbank market exchange rate saying such accusations…\nZIMBABWE’s biggest labour federation the Zimbabwe Congress of Trade Unions (ZCTU) has given the theme for the 2019 Workers Day commemorations as…\nHARARE residents are threatening to sue Harare City Council and government over the worsening water situation and arbitrary disconnections. Community Water Alliance…\nFORMER Energy and Power Development minister Elton Mangoma and two Zesa Holding bosses’ trial was yesterday postponed again because the State witness…\nSCORES of Rwandese refugees currently residing in Zimbabwe have approached the High Court seeking to challenge the government’s decision to repatriate them…", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://dailynews.co.zw/2019/04/"}
{"doc_id": "040852f3c0cfb976d931c587bc1f70aa", "text": "COMPETITION commissions in South Africa, Namibia and Botswana have given the go-ahead for financial technology company, Net1 UEPS Technology’s acquisition of Connect Group, cementing its comeback from financial losses emanating from the cancellation of its contract to process social grants.\nThe value of the merger by Net1, which has a primary listing in New York and a secondary listing on the JSE, has been put at R3.7 billion and described as transformational for both the industry and the company.\nNet1 had nosedived into loss making, but has been clawing out of the red in the past few months. In May last year, Net1 reported that it had narrowed its March quarterly loss from $35 million (R526.6m) in the same period in 2020 to $6.2m.\nIt blamed lower hardware and prepaid airtime sales for the 17 percent decline in revenues to $28.8m for the quarter to end March, 2021.\nNow the company is expanding, and on Friday announced that competition authorities in Botswana and Namibia had approved its acquisition of a100 percent shareholding in Connect Group in January and February 2022.\nThe South African competition authority approved the acquisition this month on public interest conditions “relating to employment, increasing the spread of ownership by historically disadvantaged people and workers, and investing in supplier and enterprise development” by the company.\nFurther to increasing the spread of ownership by the previously disadvantaged persons in South Africa, Net1 is also required to establish an employee share ownership scheme that complies with principles for the benefit of the workers of the merged entity.\nSaid Chris Meyer, Net1 chief executive, “The approval (of the acquisition) is a major milestone towards the completion of the transaction, and we are looking forward to integrating Connect Group into Net1.”\nHe said the acquisition of Connect Group was aimed at advancing financial inclusion by offering “payment processing and financial services to underserved” merchants and consumers.\nThe deal would also help “drive significant growth and create a truly unique entity that will advance greater financial inclusion,” said Steven Heilbron, chief executive for Connect Group.\nThis transaction feeds into Net1’s previously announced strategy “to transform into a leading fintech platform”. The merged entity would have additional clout through combining complementary product offerings from the two companies, which will “drive stronger” unit economics, the company said.\nThe acquisition allows Net1 to expand into digitised cash management, merchant acquiring and merchant lending. This will complement the company’s insurance, and consumer financial services infrastructure.\n“Offering multiple products to a single customer reduces churn, increases take-rate, and improves unit economics,” Heilbron said.\nBUSINESS REPORT ONLINE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/net1-on-comeback-trail-as-r37bn-acquisition-gets-competition-authorities-nod-e01baefd-e64a-4787-81f0-5b8c3a6df2a6"}
{"doc_id": "f83311eb090c8bd84340dd29f8edfb91", "text": "What you need to know:\n- Kagame’s administration intervened directly in the economy in a process of state directed development.\n- There are also serious questions about how sustainable the model really is.\nRwanda is often touted as an example of what African states could achieve if only they were better governed. Out of the ashes of a horrific genocide, President Paul Kagame has resuscitated the economy, curtailed corruption and maintained political stability.\nThis is a record that many other leaders can only dream of, and it has won him praise around the world.\nIn 2011, the International Olympic Committee awarded Kagame the 2010 IOC prize for “Inspiring Young People” around the world. Two years later, the Said Business School of the University of Oxford presented him with the Oxford African Growth Award. Partly as a result, Rwanda has often been cited as an economic success story that the rest of Africa would do well to follow.\nIn response, critics have sought to puncture the image of Kagame as a progressive reformer by pointing to the human rights violations committed under his leadership. But while these are important concerns, the notion that the Rwandan model should be exported also suffers from a more fundamental flaw: It would not work almost anywhere else on the continent.\nTHE MODEL\nMany of the achievements of President Kagame and his Rwandan Patriotic Front (RPF) party are genuinely impressive.\nSince taking control of a deeply divided nation in desperate need of economic and political reconstruction in 1994, the tight personal control that Kagame has established over Rwandan politics has enabled him to maintain political stability and to build a platform for economic renewal.\nSignificantly, the new government did not sit back and wait for foreign investors and the “market” to inspire growth.\nInstead, Kagame’s administration intervened directly in the economy in a process of state directed development.\nMost notably, his government kick started economic activity in areas that had previously been stagnating by investing heavily in key sectors through party-owned holding companies such as Tri-Star Investments.\nThe telecommunication sector provides a good example of how this worked. According to a 2012 paper written by David Booth and Frederick Golooba-Mutebi, having been told the mobile phone market was too small to be of interest to foreign investors, Tri-Star “largely funded the initial establishment of the MTN cellphone network” as part of the formation of MTN Rwanda in the late 1990s.\nMOBILE PHONE\nThis move significantly decreased the costs of entry facing MTN, and Tri-Star also helped the company to minimise financial risk by taking a 65 per cent share, with MTN South Africa only holding 26 per cent of the equity.\nOver the next decade, the mobile phone sector proved to be one of the country’s most compelling success stories.\nAs the market grew, and its profitability was demonstrated and Tri-Star was able to transfer its holdings to the South African parent company until the point that it became the majority shareholder in 2007.\nTaken together with the careful management of agriculture – which makes up around 40 per cent of GDP — these policies resulted in economic growth of around 8 per cent between 2001 and 2013.\nPartly as a result, the percentage of people living below the poverty line fell from 57 per cent in 2005 to 45 per cent in 2010, while other indicators of human development such as life expectancy and literacy also improved.\nAn example for the region?\nDespite the impressive headline figures, a number of criticisms have been levelled at the strategy pursued by the Kagame government.\nMost obviously, the Rwandan model sacrifices basic human rights — such as freedom of expression and freedom of association — in order to sustain the RPF’s political hegemony and economic model. It therefore requires both political leaders and their citizens to compromise democracy for the sake of development.\nOPPOSITION\nThat decision may be an easy one to make for those who enjoy political power, but is likely to sit less well with the opposition.\nLess obviously, the use of party-owned enterprises to kick start business activity places the ruling party at the heart of the economy, and means when the economy does well it strengthens the position of the already dominant RPF.\nFor example, Booth and Golooba-Mutebi estimate that Tri-Star realised five to ten times its initial stake when it transferred control of MTN-Rwanda to its parent company. In turn, this empowers Kagame to determine who is allowed to accumulate economic power, and hence to cut off potential sources of funding for opposition leaders and critics.\nThere are also serious questions about how sustainable the model really is. Despite Kagame’s penchant for anti-Western and anti-aid rhetoric, Rwanda remains heavily aid dependent, with around 30 to 40 per cent of the budget coming from international donors.\nWhen foreign aid was cut in 2013 following the publication of a UN report in 2012 that showed the Rwandan government was arming rebels in the Democratic Republic of Congo, growth fell to 4.7 per cent.\nYet although these arguments have been around for some time, they have done little to dampen the allure of the Rwandan model for many commentators and leaders.\nWEAKER OPPOSITION\nIn Kenya, the political instability generated from a prolonged electoral crisis led some of President Uhuru Kenyatta’s advisors to argue that the country would do better if its political system was more like Rwanda’s — by which they meant a stronger presidency and weaker opposition.\nDuring recent visits to Zimbabwe I have also heard people arguing that it would not necessarily be a bad thing if the new government of Emmerson Mnangagwa followed Kagame’s example, on the basis that job creation and poverty alleviation are more important than competitive politics and free and fair elections.\nIn these contexts, in which people are willing to embrace the negative aspects of the Rwandan model, the strongest argument against exporting it elsewhere is not that it is undemocratic, or that it centralises economic power in the hands of the ruling party, but that it will not actually work.\nWhy it can’t work everywhere\nOne of the most rigorous efforts to conceptualise the political conditions that made the Rwandan model possible has emerged from the African Power and Politics research project led by David Booth, Tim Kelsall and others. They argue that Kagame’s government is an example of “developmental patrimonialism”, in which the potentially damaging aspects of patrimonial politics — jobs for the boys, waste and inefficiency — are held in check by a leader who is able to secure tight control over patronage networks.\nCORRUPTION\nThis authority needs to be established both internally and externally.\nExternal political control is needed because the threat of electoral defeat by a strong opposition party is likely to encourage governments to prioritise short-term survival over long-term investments in the country’s future. Internal control is needed because otherwise the lack of checks and balances on the ruling party is likely to exacerbate corruption.\nWhen these conditions hold, elements of patrimonialism may be economically productive by generating resources that can be channelled back into the system.\nIn the Rwandan case, Kagame’s political dominance and the extension of ruling party control over the economy have not undermined development because the funds generated through party-owned enterprises have mainly been reinvested in the economy.\nThus, making the Rwandan model work requires a political leader and a ruling party that is able to a) establish tight central control over the political system, b) use that control to limit corruption and c) ensure that the proceeds of patrimonialism are used to strengthen national infrastructure and promote economic growth.\nThe problem is that these conditions don’t hold in most African states. Although transfers of power remain relatively rare on the continent, there are only a small number of states in which the ruling party enjoys the level of control witnessed in Rwanda: Cameroon, Chad, Equatorial Guinea, and Namibia, and possibly a few others such as Angola and Botswana.\nCONTRAST\nBy contrast, in most of the continent the opposition is too strong for this degree of political control to be sustained. In Kenya, for example, the opposition has consistently won 40-50per cent of the seats in parliament and the same proportion of the presidential vote.\nSimilarly, in Zimbabwe, Morgan Tsvangirai’s Movement for Democratic Change has been weakened in recent years, but is still a considerable political force in urban areas.\nAt the same time, even some of the states that feature more dominant ruling parties have consistently failed to impose economic discipline on their governments.\nInstead, entrenched clientelism and internal factionalism has typically undermined anti-corruption efforts in countries such as Angola and Chad, with negative consequences for poverty reduction and economic growth.\nECONOMY\nShorn of the internal and external political control required to make it work, the application of the Rwandan model is likely to lead to very different results.\nOn the one hand, extending the control of the ruling party over the economy is more likely to increase graft and waste than to spur economic activity.\nOn the other, efforts to establish political hegemony by reducing opposition parties to just a few seats in parliament are likely to be strongly resisted, leading to the kind of political instability that undermines the economy.\nPut another way, if other countries on the continent try to implement the Rwandan model, they are likely to experience all of its costs while realising few of its benefits.\nNic Cheeseman (@fromagehomme) is Professor of Democracy at the University of Birmingham and the author of Democracy in Africa: Successes, failures, and the struggle for political reform.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nation.africa/oped/opinion/Africa-should-not--follow-the-Rwandan-economic-model/440808-4253762-iwqd5hz/index.html"}
{"doc_id": "04b44fd01ef2540778caad483ec632e3", "text": "Earlier this week, ZIMBOCASH – a local decentralised cryptocurrency- listed their token ZASH on Bithumb Global (a cryptocurrency exchange headquartered in South Korea).\nIn marketing material, ZIMBOCASH is marketing the ZASH token as a replacement alternative to Zimbabwe’s flailing Zimbabwe Dollar. A total of 4.5 billion ZASH tokens have been created with 950 million currently in circulation.\nThe Zimbabwe dollar was already collapsing with 500% inflation, before this crisis dealt a debilitating blow. We believe that ZIMBOCASH is perfectly positioned to solve this problem by fixing the amount of money in the country using blockchain technology. Our aim is to provide sound-money.\nPhilip Haslam, Head of Communications at ZIMBOCASH\nI believe Philip’s comments about ZIMBOCASH being perfectly positioned to solve the Zimbabwe’s economic turmoil are a bit premature. We reached out to ZIMBOCASH to understand where Zimbos in possession of the ZASH token will be able to use it and Philip explained to me that they are developing that network and expect “organic use of the ZASH network to grow as the currency environment deteriorates in the country.”\nWhy list with Bithumb?\nFor ZIMBOCASH, listing with Bithumb offers the digital currency an opportunity to start making the ZASH token more valuable;\nOur first step in establishing value is in getting it listed on an international exchange (Bithumb Global), where there is a market of buyers and sellers. On the basis that there is value – derived from a market price – it can become something that is used in trade\nPhilip Haslam\nSecurity fears\nIt is important to note however that Bithumb the exchange in question has been hacked a number of times;\n- In June 2017 hackers stole user information from a Bithumb employee’s personal computer.\n- In June 2018 about $32 million of cryptocurrency was stolen from Bithumb in a hack.\n- On March 29, 2019, Bithumb said that it was hacked. It pointed its fingers at insiders. Nearly $20 million worth of EOS and Ripple tokens were estimated to have been stolen.\nHurdles\nA concern I had after going through ZIMBOCASH’s marketing material was how they were going to communicate the concept of digital currencies to the ordinary Zimbabwean – something they’ll have to do if ZASH is to become a compelling alternative to the Zim dollar.\nPhilip explained that they have been doing some work on that front but believes ultimately “the pain that people experience in a collapsing monetary system will cause people to naturally find alternatives that work.”\nRight now the clearest incentive to get the token is the fact upon signing up for the token you’ll get 3125 tokens. The issue with that is the value of those tokens will depend largely on the network in which you can use them. If there’s nowhere to use them 3 or 4 months down the line – are they valuable?\nThe elephant in the crypto-shaped room has been regulation or lack thereof. Interested parties would want to know what guarantees there are that the tokens would be safe. If they get the token, will ZIMBOCASH turn out to be another Golix? The expectation is that it won’t be a problem since they are currently not regulated locally and not making use of local banks at the moment:\nWe are not operating through the banking system in Zimbabwe. There is no “cash-out” or “cash in”. Zimbabweans are allocated the token directly by signing up at our website www.zimbo.cash. There is no charge for signing up. It is similar to signing up for Facebook.\nPhilip Haslam\nCryptocurrency and volatility\nFor those who have fears regarding volatility, Philip explained that volatility is to be expected with any currency however they belive that as their network grows stability will increase alongside;\nThere may be volatility in the price – however, all currencies have some level of volatility. Ultimately, as a network of scale grows, the price is likely to become more stable. This is why a reference price on a market is used in trade.\nHowever, with Zimbabwean history, people are used to changing their prices to the market rate. With the current system, people need to mark their prices to a market rate regularly. Our concern isn’t what the price will be – our concern is that there is a price. If we get a price, we would have added value to a whole lot of Zimbabweans who have been allocated ZIMBOCASH, who can use it in daily trade.\nPhilip Haslam\nThat has been one of the biggest knocks when it comes to cryptocurrencies. The lack of centralisation seems to come at the price of security and accountability when things go wrong.\nDistribution\nAt the time of writing ZASH is being distributed solely via internet channels (Bithumb and the ZIMBOCASH website). If ZIMBOCASH is to realize their dream of dethroning the ZW$ as the local currency that’s another aspect they’ll have to improve to ensure that the Zimbabweans who aren’t on the internet are also included among those who can transact.\nOnce you have the currency where will you be able to use it? Right now beyond trading, your options are limited at the time being. In future, ZIMBOCASH will be more useful;\nUltimately, we would like to see people being able to pay for imports denominated in ZIMBOCASH. This last step would require a very liquid international exchange where there isn’t price slippage when there is a cash-out. This is something that needs to develop over time.\nPhilip Haslam\nUpdate: An earlier version of this article claimed that ZIMBOCASH was looking to replace the ZW$. This was inaccurate and the intention of ZIMBOCASH is to offer an alternative, NOT a replacement. We apologise to ZIMBOCASH and our readers for the misinterpretation.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2020/05/zimbocash-lists-cryptocurrency-token-sets-sights-on-the-crumbling-zw/?amp=1"}
{"doc_id": "0f5372f2e9ba6fb940b704a912834551", "text": "Karachi\n26 Sep\nKarachi was once home to thousands of Parsis, followers of Zoroaster (Zarathustra), the spiritual founder of Zoroastrianism. Some of them still live in the city, but the future for their community seems grim.\nLatest\n1 day ago\nAs tensions escalate in the Gaza Strip, many displaced Palestinians are now gripped with fear about Israeli forces launching a relentless assault on the city of Rafah.\n1 day ago\nIn an interview with FRANCE 24, NATO Secretary-General Jens Stoltenberg said he expected that \"regardless of the outcome of the US elections\", Washington \"will continue to be a committed NATO ally\".\n1 day ago\nDoctors in the U.S. are struggling to contend with burnout, staffing shortages and overwhelming administrative workloads, according to a new survey. Despite these challenges, 83% of doctors in the survey said they believe AI could eventually help. More than 1,000 doctors were surveyed between Oct. 23 and Nov. 8 in the study, commissioned by Athenahealth.\n1 day ago\nOn January 6, the US aviation regulator FAA ordered the temporary grounding of certain Boeing 737-9 MAX aircraft operated by US airlines or in US territory, affecting 171 planes.\n1 day ago\nRussian investigators have said they are carrying out a 14-day forensic \"investigation\" of the opposition leader's body. Navalny's family has so far been refused access to his remains.\n1 day ago\nIsrael's GDP fell by 19.4 percent in the last quarter of 2023, according to preliminary figures published by the country's Central Bureau of Statistics on Monday. It's the biggest contraction the economy has seen since the early days of the Covid pandemic, and can be attributed to the impact of the war on Gaza following the October 7 Hamas attacks.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/karachi/"}
{"doc_id": "5a9ae745db4fb31a4a37e52265486c1f", "text": "What you need to know:\n- To boost production, revert the farm extension services function to the relevant department of national or county government dealing with agriculture.\n- There is need for active stakeholder involvement in these reforms. This will result in a win-win outcome in the tea value chain.\nTea is indisputably one of the leading foreign exchange earners in Kenya.\nRecent estimates aver to the fact that tea exports contribute 23 per cent of country’s total foreign exchange earnings. In addition, the tea sub-sector gives well over five million Kenyans a livelihood.\nRecent data from the Ministry of Agriculture show that last year, the tea industry earned the country Sh117 billion in export earnings and Sh22 billion in domestic sales.\nIn terms of supplies, the local sales value also increased from Sh15 billion in 2018 to Sh18 billion last year.\nIn addition to the regulations for the sub-sector recently announced by Agriculture Cabinet Secretary Peter Munya, there is a need to fine-tune the proposed reforms. This is primarily to buttress key concerns raised by small-scale tea farmers over the years.\nFirst is the critical issue of governance of tea factory companies. The rules governing the election of directors were drawn by the then Kenya Tea Development Authority (KTDA).\nClearly a gerrymandering exercise with no input by farmers, they were designed to lock out directors who championed farmers' interests.\nCRITERIA\nTo address this key concern and chart the way forward, redraw all the boundaries to ensure equitable and fair representation of farmer shareholder representatives based on shareholding, acreage and crop yield or production.\nSet minimum qualifications based on education because of the complexity of matters involved in tea governance.\nThe qualification for a nominee for the position of director should be a university graduate from a recognised institution, besides a threshold in shareholding and acreage production.\nSecondly, conduct a forensic audit to determine all payments to farmers over the past 20 years. In addition, track and verify shares held by farmers in current and former factory companies where they delivered their produce.\nThirdly, to increase farmers' earnings, ensure that 70 per cent of the tea exported is in value-added form.\nIn this regard, benchmark with top tea producers locally in the large-scale tea sector and internationally, such as Sri Lanka. This would require, among others, examining how their tea brands find their way to supermarkets in the West.\nRESERVE FUND\nFourthly, establish an online auction where all teas will be sold. Buyers would collect teas from their respective companies.\nExplore the establishment of tea trading in derivatives to mitigate price fluctuations, just like with oil.\nFifthly, start a reserve fund for marketing Kenyan tea as a quality global brand. The fund should receive 1.25 per cent of gross sales of all teas.\nThe drafters can borrow the model of the Tourism Trust Fund, which is used to market Kenya as a tourism destination.\nFinally, to boost production, revert the farm extension services function to the relevant department of national or county government dealing with agriculture.\nTo address the perennial issue of labour shortages, introduce tea plucking machines. The oft-cited compromised quality as a result of mechanisation will be effectively addressed through value addition.\nThese proposed reforms are, no doubt, the most radical since independence. To ensure they are implemented, only a legally mandated body should oversee the process. To achieve this, establish the Tea Reforms Transition Authority (TRTA).\nThe authority would, among other key functions, design a structure to replace the current model of the small-scale tea sub-sector under the Kenya Tea Development Agency (KTDA).\nLastly, there is need for active stakeholder involvement in these reforms. This will result in a win-win outcome in the tea value chain, especially for the hardworking tea farmer.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nation.africa/oped/opinion/Reforms-in-tea-sector-necessary/440808-5565706-iq30myz/index.html"}
{"doc_id": "ace76a79ad4fc8c71ee28d739e5b2c95", "text": "South Africa remains vulnerable to spillover effects of global events, particularly the Russia-Ukraine war and global stagflation concerns, says the South African Reserve Bank (SARB).\nPresenting its latest financial stability review on Wednesday (25 May), the central bank noted that the most likely channels through which South African financial stability could be impacted are the macroeconomic impact of global stagflation.\nStagflation is defined as persistently high inflation combined with high unemployment and stagnant demand in a country’s economy.\nThis stagflation could contribute to continuing slow and inequitable domestic growth and rising inflation, putting pressure on some sectors of the financial system, the SARB said.\nSocial stability\nThe Reserve Bank also noted rising oil and food prices which could have negative implications for social stability, while heightened volatility in global and domestic financial markets could also weigh on investor sentiment, it said. South Africa reported its worst\nSouth Africa experienced its worst riots since the end of apartheid in July 2021, with the violence in Gauteng and KwaZulu-Natal claiming 354 lives.\nIt also led to heavy criticism of president Cyril Ramphosa’s government and its ability to respond to major security issues. The perceived lack of response from the government subsequently led to a cabinet reshuffle and the axing of the national police commissioner.\nThe Reserve Bank added that the localised flooding in KwaZulu-Natal during April 2022 has caused significant damage to infrastructure, with the KwaZulu-Natal provincial government estimating the cost of repair to be in the region of R17 billion.\n“The flooding is another shock to the domestic insurance industry that is still recovering from the lingering impact of Covid-19-related claims and the July 2021 unrest,” it said.\nCovid flare-ups\n“The South African financial cycle continues to recover, primarily due to rising house and equity prices, but remains in a downward phase,” the Reserve Bank said.\n“Although the national state of disaster was lifted in April 2022, South Africa remains vulnerable to the risk of further Covid-19 flare-ups impacting negatively on economic activity.”\nBond market\nThe Reserve Bank also flagged the ‘unprecedentedly low levels of liquidity’ in the South African government bond (SAGB) market since the start of the Covid-19 pandemic.\n“Although the SARB has taken various steps to restore and maintain smooth market functioning since the onset of the COVID-19-induced shock, the decline in SAGB market liquidity has prevailed beyond the initial shock.\n“Should such illiquidity persist, it could make the domestic financial system vulnerable to high volatility, sharp price adjustments and an increased cost of funding.”\nWhen considered alongside the bank-sovereign nexus, as discussed in detail in the first edition of the 2021 FSR, liquidity in the SAGB market will be the subject of closer monitoring from a financial stability perspective going forward.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/590316/these-are-the-biggest-risks-to-south-africa-right-now-reserve-bank/"}
{"doc_id": "9dd7193562fbf9b3078436d04f6e2b4b", "text": "Most vehicle insurance policies contain exclusions, which entitle insurers to decline liability where an incident driver is under the influence of alcohol, or where a driver’s blood-alcohol level is over the legal limit, or where a driver fails a breathalyser test.\nNew rules, under the National Road Traffic Amendment Act, will effectively introduce the total prohibition on the use and consumption of alcohol by all motor vehicle operators on South African public roads. The bill was introduced to National Assembly in May 2020, and is currently being deliberated by lawmakers.\nFor now, however, drivers are still able to operate a vehicle in South Africa if they’ve been drinking, as long as their blood alcohol content is below 0.05 grams per 100 millilitres, and breath alcohol concentration below 0.24g/1,000ml.\nDespite this, insurers include very explicit exemptions in policies stating that motorists are not covered for incidents where the driver is clearly under the influence of alcohol and drugs, has a concentration of alcohol in their blood exceeding the legal limit or fails a breathalyser test.\nWhen rejecting insurance claims, the insurer bears the burden of proving the exclusion.\nWith the onset of the Covid-19 pandemic, the use of breathalyser tests has dropped off the list of tests officers can administer on the scene of an accident. This had led to insurers having to rely on circumstantial or witness evidence to make determinations in claims.\nThe Ombudsman for Short-Term Insurers has highlighted two case studies in the last year, where it had to step in and iron out the process and make a call based on the more limited evidence at its disposal.\nBoth cases involved car accidents where the driver’s claims were rejected by their insurance companies and were sent to the ombud for assessment. Without hard evidence to go on, the ombud had to rely on witness accounts and interviews to determine the truth.\nCase 1\nIn the first case, a motorist was involved in a car accident, where they changed lanes at the same time the car in front of them did, causing them to return to their previous position. However, it was at this point that they were rear-ended by a car behind them, leading to an accident.\nWith the insurance claim, the driver said they had not consumed alcohol. A breathalyser test could not be performed due to Covid-19.\nThe insurer rejected the claim, saying the driver was in fact under the influence of alcohol. The insurer appointed an assessor to the case who interviewed four witnesses, all of whom said they could either smell alcohol on the driver’s breath or saw them exhibit drunken behaviour. They also claimed they saw the driver throw alcohol bottles into the nearby veld.\nThe insurer also had an expert assess the scene and determined that the driver was speeding – going as fast as 190km/h.\nWith only witness accounts and the insurer’s assessment to go on, the ombudsman determined that, on the balance of probabilities, the driver was indeed under the influence of alcohol and that this was the cause of their behaviour leading to the accident.\nIt upheld the insurer’s rejection of the claim.\nCase 2\nIn the second case, a driver stopped at an intersection and proceeded to cross after determining it was safe to do so. They were then hit by another vehicle crossing through the intersection.\nWith the insurance claim, the driver said they had not consumed alcohol. A breathalyser test could not be performed due to Covid-19.\nThe insurer rejected the claim, saying the driver was in fact under the influence of alcohol. The insurer relied on three witness testimonies from the scene, including the passenger of the other vehicle and two police officers who responded.\nThe passenger of the vehicle said that the driver ‘seemed intoxicated’, was confrontational and that they smelled of alcohol. The police officers said that the driver did not smell of alcohol, but was confrontational, and seemed ‘tipsy’, with a slight sway – though they remained steady on their feet. The officers conceded it may have been due to shock.\nThe insurer argued that the driver did not stop at the stop street, thus, the alleged alcohol consumption had affected their driving ability.\nIn dealing with the case, the ombudsman sought further information from the driver and the insurer. The driver managed to submit a signed affidavit from the passenger witness, retracting their claim of smelling alcohol on the driver’s breath. The passenger said their false testimony was based on the belief that insurance would pay out for their injuries sustained in the accident.\nThe driver also said that they had hit their head during the accident, which had dazed them, explaining their behaviour.\nReviewing the assessment recordings with the police officers, the ombud also found that the insurer’s assessor repeatedly asked both police officers leading questions that were entangled with presupposed and suggestive answers.\nThe police officers did not provide their own explanations about why they thought the driver was under the influence of alcohol, the ombud found, but rather led to the conclusion by the assessor.\nThe ombud overturned the insurer’s rejection of the claim.\nHow the ombud deals with these cases\nThe ombud said that with both cases, it had to rely on witnesses in lieu of hard evidence to help determine the outcome – but a lot goes into the investigations.\n“The OSTI considers all the evidence presented by both parties to the dispute as well as the specific policy terms and conditions,” it said.\nThe insurer must prove the following:\n- That the incident driver was under the influence of alcohol when the accident occurred.\n- That the incident driver’s level of intoxication influenced or impaired his/ her driving ability.\n“Evidence, such as blood or breathalyser test results, may be submitted by the insurer. Where the insurer is unable to provide such test results, it may rely on circumstantial evidence which can include, amongst other evidence, hospital records, witnesses’ and/or attending police officers’ statements describing the driver’s demeanour.”\nThe OSTI pointed out that the considerations of fairness and equity only have application in exceptional and warranted cases. Often, the applicable legal principles are adequate to resolve disputes.\n“Where applied, the considerations of fairness and equity must be balanced, in favour of both parties. OSTI is not supposed to approach matters from a consumer-favouring perspective, as is often erroneously believed,” it said.\nThe ombud stressed that each matter is dealt with on its own merits and no precedent is created by the findings in highlighted cases. “These case studies are intended to provide guidance and insight into the manner in which the OSTI deals with complaints,” it said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/545188/two-drunk-driving-insurance-cases-in-south-africa-that-had-two-very-different-outcomes/"}
{"doc_id": "64a47e0934975404a14159a831b99ea6", "text": "African football makes inroads in women recognition\nRuth Butaumocho African Agenda\nThe capital of Cameroon, Yaounde on Sunday broke into song and dance when thousands of fans convened at the Olembé Stadium for the 33rd edition of the African Cup of Nations ceremony.\nElsewhere, millions of football fans were also glued to their television sets as the much revered continental football fête finally kicked off in Central Africa, after a long sabbatical owing to Covid-19.\nThe opening ceremony was an assemblage of events that was spiced up with a good musical performance by one of Africa’s best, Congolese singer, Fally Ipupa, who enthralled fans with his rhumba dances.\nUnknown to the legions of football fans, the celebrations were also a harbinger of a novel experience, which was to unfold two days later, when Salima Rhadia Mukansanga made history by becoming the first ever woman to officiate in a match at the tournament.\nThe 33-year-old Rwandese was the fourth official on Monday as Guinea took on Malawi at the Bafoussam Omnisport Stadium in Kouekong.\nWhile that may not amount to much for some, the grand entry of Mukansanga in continental football, considered a male domain, affirms the long held principle that women are as capable as men, if given the necessary support.\nHer selection to officiate such a high level football match was meritocratic, and an affirmation that women can compete on the same pedestal with men, if there are supporting systems and structures for their ascendancy.\nAccording to several online reports, Mukansanga has a rich history in football officiating, having also taken charge of games in other major tournaments before, including the Women’s World Cup, Africa Women’s Cup of Nations, and the CAF Women’s Champions League.\nGetting such an opportunity did not come cheap, but she had to prove her mettle to meet the grade needed to officiate at such revered platforms, which are often reserved for highly seasoned match officials and men of integrity.\nIt is heartening to note that the Confederation of Africa Football, (CAF) is following in the footsteps of FIFA which appointed a female secretary-general, Senegalese Fatma Samba Diouf Samoura.\nThe decision to elect Samoura affirmed the assertion of former FIFA president Sepp Blatter that the future of soccer is feminine. He said this back in 2013, when he was still at the helm of the world governing body.\nWhile Blatter’s comment was in reference to participation of women in women’s football, quite a number of women have taken a keen interest in football refereeing at global level.\nBlatter’s assertion was neither ill-conceived nor parochial, but it was grounded on the global trends where there was a growing interest in football and promotion of gender equality in different spaces back then in 2013.\nNearly 10 years later, the pace to include women in decision making has hastened, if ongoing developments are anything to go by.\nFrom 1917, when Loretta Walsh became the first woman to join the army and became the first American Marine woman in active service, the gender equality discourse is shaping up, albeit with challenges.\nAlthough the discourse is sometimes steered off the course by a few people for self-serving interests, it is clear that the world is slowly moving towards gendered leadership.\nGlobally, women are getting much space and recognition to prove their worth than what was the case four decades or so ago.\nIn politics, business and governance, a few women are now on the powerful tables that were once reserved for men. Such developments, though slow, are an affirmation of the hard work women are putting in to get recognition and walk alongside men.\nAfrica has not been left behind, but it is also now enjoying the benefits of gender equality and equity, although a lot would need to be done to open more spaces for women.\nThe swearing-in of President Samia Suluhu Hassan as Tanzania’s first female leader last year in March, becoming the third female president in Africa, is one of the rare, but exciting news the continent should celebrate and use it as basis for the ascendancy of women.\nMs Hassan joined Sahle-Work Zewde, the first elected President of Ethiopia, and Ellen Sirleaf Johnson, the 24 President of Liberia (2006 – 2018).Their election gives hope to nearly 700 million female voices across the continent, whose aspirations and expectations were not equally captured due to the gender dynamics in the leadership, that equality can be achieved.\nOf course, the election of the three might be considered as insignificant, compared to the numerical significance of women in Africa, but the acknowledgment of their capabilities is what counts most.\nIt remains crucial for the African leadership to promote systems and structures that promote gender equality and gender equity, not as a privilege, accorded to women, but actually as a human right.\nGlobal organisations and leaders are calling for inclusive leadership, where women are given opportunities in governance and decision-making. If anything, female leaders have qualities that are now being recognised as critical to the new leadership of the decade — empathy and collaboration.\nDepending on which side of the fence one sits, both qualities are more admirable, in addition to vision, confidence and honesty.\nIn a world reeling under the effects of corruption, women have been found to be less corrupt than men, and have always strived to serve diligently, something that existing leadership badly needs for countries to move forward.\nWomen have also proved to be saleable brands in corporate organisations and surely they have proved their worthy in political leadership as well, if given the necessary support structures.\nThe onset of the New Year, should create an enabling environment for capable women to thrive in different spaces.\nWith so much talent, ingenuity and competence among close to 700 million women in Africa, the continent should be the bastion of gender equality.\nThe selection of Mukansanga to officiate at such a highly revered continental football platform speaks to the ingenuity that Africa has among its women. It is that ingenuity that Africa would to safeguard against brain drain to bolster human resource across the continent.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/african-football-makes-inroads-in-women-recognition/"}
{"doc_id": "ac3dcca13ee4e6c25644e3f66f3f5a5c", "text": "The suspension of Nigeria’s central bank governor, Lamido Sanusi, has led to increased market volatility within the country (Figure 1 and Table 1). Bloomberg reported on Friday that the Nigerian naira slumped to its lowest level since 1999 after reaching 168.9 per dollar on Wednesday. That day, trading in the domestic bond market was halted, and the benchmark stock index fell to its weakest level in three months. However, eurobond yields were little changed at 6.32 percent after jumping the most on record by 12 basis points. The current event is reminiscent of the financial turmoil in Indonesia in 2010: In that case, the local stock exchange fell 3.8 percent (the sharpest in 17 months), and the rupiah lost 1 percent against the dollar following the resignation of Finance Minister Sri Mulyani.\nMr. Sanusi’s sacking has come after he submitted to the Senate a report detailing the failure of the Nigerian National Petroleum Corporation (NNCP) to transfer $20 billion to the government. Although the NNPC dismissed the governor’s claims, there has been increased criticism of President Goodluck Jonathan’s resolve to fight corruption. The former governor was a darling of foreign investors who liked his solid track record fighting inflation and safeguarding financial stability. It is therefore no surprise that market participants are being unnerved by his dismissal. Furthermore, market participants are questioning the independence of the central bank, now that its governor has been dismissed by politicians.\nThe timing of Governor Sanusi’s sacking could not be worse, as Nigeria was already battling the spillover effects of the tapering of the United States Federal Reserve. The central bank is now facing additional pressure on its currency. So far, central bank intervention has helped slow the fall of the naira, but that has been at the cost of losing foreign currency reserves. It is therefore not surprising that Finance Minister Okonjo-Iweala has made statements to reassure the markets, and the president quickly announced a replacement to Governor Sanusi.\nLate last year, the International Monetary Fund warned that, although Nigeria’s outlook is positive with growth projected to increase to about 7 percent in 2014, the country could be affected by a number of risks. IMF economists identified potential shocks such as a decline in oil prices, the pace of recovery in global economic and financial conditions, capital outflows, continued losses in oil production, and increased security concerns. It also cautioned against the temptation of procyclical election spending (elections are scheduled to take place next year). The IMF statement now appears to be prescient.\nWhether the extent of the market effect of the dismissal will be short- or long-lived is not clear. But what is clear is that it does not augur well for Nigeria. In the end, what really matters will be how strong Nigeria’s fundamentals will be. The country relies heavily on oil exports (70 percent of government revenues) and is riding on current high oil prices. But the Nigerian government should realize that a central bank not subordinated to political demands is a key tool in establishing strong economic fundamentals. An independent central bank can help fight inflation effectively, ensure predictability, anchor investors’ expectations, and, in bad times, resist printing money to fund the budget. Moreover, if Nigeria is to play a leading role in fostering regional economic integration, it has to continue leading the way in building an effective monetary institution.\nBy: Amadou Sy Letmathe\nSource: Brookings Institution", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/how-much-will-it-cost-to-sack-nigerian-central-bank-governor-sanusi-2/"}
{"doc_id": "576a93514ed6f45077d924f3f773b0e0", "text": "Members of Parliament have vowed to continue paralysing House business until the billions of shillings owed to them under the National Government Constituency Development Funds (NG-CDF) are released.\nThe lawmakers are also agitating for the release of funds for the National Government Affirmative Action Fund (NGAAF).\nYesterday, the members staged a walk out of the National Assembly chambers lamenting the lack of transparency from the Treasury on what had led to the delay in remittance of the funds and the subsequent remedial action.\nIt all started after Minority Leader Opiyo Wandayi rose on a point of order seeking guidance on the NG-CDF and NGAAF issue from Deputy Speaker Gladys Boss Shollei, who was the session Speaker.\nMr Wandayi said members had not been given any justification by the Treasury for not releasing the funds.\n“We are now in the tenth month of the 2023/24 financial year and since this House disbursed funds, no single cent has hit the accounts of the constituencies. This House is going for a long recess yet we know that school children are opening school in the first school of January. Those who sat KCPE are joining Form One in that same period yet the counties have no funds,” said Wandayi.\n“Without NG-CDF bursaries and NGAAF, more than three-quarters of the students will not go back to school. The House would also be in order not to handle any other business in sympathy with the children of hustlers suffering out there and not knowing how they are going back to school,” he added.\nMajority Leader Kimani Ichung'wah, while agreeing that the funds release was a pressing issue, told the House that he had engaged the Treasury and the NG-CDF CEO over the matter and assured members that the funds would be released soon.\n“I agree that this is a matter that ought to be treated with special attention. We have taken up this matter with the National Treasury which must deal with the twin issues of money to Parliament and money towards NG-CDF through the State Department for Planning.\n“I have engaged with the CS, NG-CDF CEO and State Department Cabinet Secretary. They have indicated that they are working on ensuring there will be disbursements of the funds by the time we break,” he said.\nHowever, Azimio and Kenya Kwanza lawmakers stormed out chanting “no CDF, no recess!”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/health/politics/article/2001486773/mps-disrupt-sitting-over-ng-cdf-cash"}
{"doc_id": "3a02f418a991c7673ac5c5ff1bda0004", "text": "Ratings agency, S&P Global Ratings, has revised Ghana’s rating from B-/B to CCC+/C, putting the country’s creditworthiness into junk status.\nIt also reviewed the country’s economic outlook to negative, reflecting “Ghana’s limited commercial financing options, and constrained external and fiscal buffers.”\nAccording to Marketwatch, the American based credit rating agency argued that the COVID-19 pandemic and the Russian invasion of Ukraine has complicated Ghana’s fiscal and external imbalances.\n“Demand for foreign currency has been driven higher by several factors, including nonresident outflows from domestic government bond markets, dividend payments to foreign investors and higher costs for refined petroleum products”.\nAlready, the local currency has seen a sharp depreciation in recent times. It’s nearing GH¢9 to one US dollar.\nThe CCC+ is the worst since 2003.\nS&P added that Ghana has also been affected by lack of access to the Eurobond markets.\n“Local authorities have passed a levy on electronic transactions and legislation to tighten exemptions on tax payments including for VAT, among other moves. While these changes could improve the tax take going forward, the situation remains challenging, and over the first half of 2022, the fiscal deficit has exceeded the government’s ambitious target,” S&P pointed out.\nS&P had affirmed Ghana’s ratings in February 2022, as Moody’s downgraded the African nation to Caa1 with a stable outlook. Fitch also downgraded Ghana to B- with negative outlook.\nIn February 2022, S&P affirmed Ghana’s Long and short-term foreign and local currency ratings at B- and maintained the outlook at Stable.\nIt identified some constraints that prevented an upgrade of Ghana Sovereign ratings which included: the continuous uncertainty surrounding fiscal correction, including the delayed approval of the e-levy bill to give assurances to the 2022 budget. Other concerns such as high-interest cost and greater dependence on domestic financing sources given the worsening external financing conditions facing Ghana were also highlighted.\nGhana has already began discussions with the International Monetary Fund for economic support.\nAn economic programme is expected to be created in this regard to return the country into a stable territory.\nA team from the fund that visited the country in July 2022 said it will continue to monitor the challenging economic and social situation in Ghana closely in the coming weeks and engage authorities in the formulation of Enhanced Domestic Programme that could be supported by a fund arrangement.\n“We reaffirm our commitment to support Ghana at this difficult time, consistent with the IMF’s policies.”\nBut, investment bank, IC Securities, stated that Ghana will not default in its Eurobond repayment.\nAccording to one of the leading investment firms in the country, a $750.0 million loan from the African Export-Import Bank, the $1.3 billion cocoa syndicated loan and the windfall from petroleum revenue will help shore up the country’s reserves, and prevent any default.\nThe country has a $16 million out of the $1billion Eurobond issued on August 7, 2012 to mature. This is coming after it was initially issued with a principal amount to $750 million, due to reprofiling of some of the country’s debt.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessghana.com/site/news/Business/268161/S-P-revises-Ghana-s-rating-to-CCC-outlook-negative"}
{"doc_id": "38a230ff0a9b82b45de41f7804c4d720", "text": "The percentage of accumulated savings that a retiree withdraws annually to live on, known in the retirement industry as the “drawdown rate”, has long been a subject of concern. A large proportion of retirees with living annuities are drawing too much each year for their retirement capital to sustain them if they live to their late eighties or early nineties. To put it bluntly, they are likely to run out of money before running out of life.\nA living annuity, for the uninitiated, is a type of pension you buy with your retirement savings in which you determine the underlying investments and your drawdown rate, which must be between 2.5% and 17.5% a year.\nThe big drawback of a living annuity is longevity risk. For married couples, the risk is higher – the probability rises of at least one of you reaching an advanced age.\nA few weeks ago in this column, I focused on the retirement lump-sum you should aim for, reckoning that, if retiring at 65, you need to plan for a retirement of 30 years. On an assumed, consistent annual real (after-inflation) return of 3%, after costs, and allowing for an inflation-linked annual increase, I calculated an initial drawdown of 4.76%.\nThis is fairly consistent with drawdown recommendations from the Association of Savings and Investment SA (Asisa), which say that, assuming a 4% real, after-costs return, an initial drawdown of 5% would provide an inflation-matching income for 33 years.\nLet’s look at some research and see how the theoretical figures measure up.\nDrawdown statistics\nFirst, we turn to a paper published this week, “Optimal retirement income strategies – insights into the key drivers”, compiled by Bjorn Ladewig, the head of distribution at Just SA. It confirms what other studies have shown: that too many retirees with living annuities are drawing down unsustainably.\nFirst, it looks at age expectancy.\nFor men who reach the age of 65:\n• 75% will reach 75 years.\n• 50% will reach 82 years (the average life expectancy for men at 65).\n• 25% will reach 89 years.\n• 10% will be alive at age 92.\nWomen live longer. If they reach 65:\n• 75% will reach 80 years.\n• 50% will reach 87 years (the average life expectancy for women at 65).\n• 25% will reach 92 years.\n• 10% will live to celebrate their 100th birthday.\nIf, as suggested, couples need to base their calculations on a woman’s life expectancy, the figures show that planning for even a 30-year retirement might be insufficient.\nOn studying about 20 000 retirees in all stages of retirement, Just SA found that only about a third of them were drawing down sustainably.\n• 32% had a safe, sustainable drawdown rate (below 5% at age 60 and below 7.5% at age 80).\n• 34% had a dangerously high drawdown rate (above 7% at age 60 and above 15% at age 80).\n• 34% had a risky drawdown rate that fell between the safe and dangerous rates.\nIt found that the average drawdown rate across ages (50 to 85 years) was 8.5%. “Considering the respective ages of this group of both men and women, the average safe drawdown rate should be 5.3%. This means that, on average, the income shortfall will be more than 15 years,” the report says.\nInvestment performance\nWe look at how retirees’ living annuity investments have performed against their drawdowns. This was research done on Stanlib Multi-Manager funds by Joao Frasco, the chief investment officer at Stanlib Multi-Manager and INN8 Invest, and his team.\nThe problem, it appears, is that although the average return of an investment might be sufficient, the volatility of the return year in and year out makes a difference.\nLooking at the return statistics of different types of funds over different periods, Frasco found that, over 30 years, for a 5% initial drawdown, the probability of success (the annuity lasting the distance) for different types of funds was:\n• Pure South African equity (JSE All-Share Index): 86.2%\n• Multi-asset high-equity: 92.4%\n• Multi-asset low-equity: 90.0%\n• Short-term bond fund: 53.1%\nTaking mortality into account (people dying before their money ran out), the probability of a 65-year-old’s annuity lasting the distance was:\n• All-Share Index: 95.9% on a 5% drawdown, 83.1% on a 7.5% drawdown\n• Multi-asset high-equity: 98.3% and 82.8%\n• Multi-asset low-equity: 98.0% and 69.6%\n• Short-term bond fund: 93.9% and 57.5%\nCosts were factored into the fund performance but not the index performance, so pure equity investments may have a lower success rate than indicated.\nThe multi-asset high-equity (“balanced”) fund gives the best success rate over the period we are looking at. Its diversification into asset classes other than equities gives it a slightly lower volatility.\nIt seems you’re fairly safe beginning with a 5% drawdown if you have enough invested in equities to push up your average return but with some diversification to take the edge off the volatility. The typical balanced fund portfolio has around 70% in equities, 20% in bonds, 5% in listed property and 5% in cash. Importantly, it can invest up to 40% offshore, diversifying away from the South African market.\n* Disclaimer: the research was based on past performance, which is no indicator of future performance.\n** Hesse is the former editor of Personal Finance\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/opinion/words-on-wealth-will-your-drawdown-strategy-let-you-down-ff3e6796-cb6b-4a33-971b-34dbabd02487"}
{"doc_id": "94bd617e49ad7edf9b6d54bd462ead54", "text": "Edo Assembly\n6 Dec\nEdo State Governor, Godwin Obaseki, yesterday, presented a N325.3 billion budget to Edo State House of Assembly for the 2024 fiscal year, which is a slight increase from the N320 billion budgeted for 2023.\n17 Oct\nThe Edo State House of Assembly on Tuesday passed a bill to enact the Edo State College of health sciences and technology law 2023. The passage of the bill is sequel to the presentation and consideration of the report of the house committee on health. At the committee of the whole house, the lawmakers considered…\nLatest\n43 mins ago\nA \"general search\" of vehicles and passersby was underway late Wednesday in Chad's capital after gunfire erupted near an opposition party's headquarters. The sound of automatic weapons fire earlier in the day prompted people to leave the area in the centre of N'Djamena where the Socialist Party Without Borders' (PSF) main office had been surrounded…\n1 hour ago\nAt least over 50 per cent of what Nigeria earns from the sale of crude oil and gas is going into crude production. That translates to an average of $1.7 billion monthly for a country that is in economic mess.\n1 hour ago\nAfter taking the wind off the sail of a well-mobilised protest with an abrupt suspension, president of the Nigeria Labour Congress (NLC), Joe Ajaero, yesterday said that they could not proceed with the two-day nationwide protest due to intimidation and threats.\n1 hour ago\nThe deadline for the linkage of subscribers Identification module (SIM) cards to National Identification Number (NIN) ended yesterday as directed by the Federal Government through the Nigerian Communications Commission (NCC).\n1 hour ago\nContinued spread of Lassa fever in the country has raised concerns among stakeholders on measures to contain it, citing the need to intensify campaigns about personal and environmental hygiene.\n1 hour ago\nNigeria, yesterday, said about $17.64 billion worth of oil field development plan was approved last year to deliver oil and gas recovery estimated at 2.12 billion barrels and 13.13 trillion cubic feet respectively in the next five years.\n1 hour ago\nIt seems that Heartland of Owerri is doomed for relegation this season as the Naze Millionaires continue their woeful performance in the 22-week-old Nigerian Premier Football League (NPFL) games yesterday.\n1 hour ago\nA handful of crypto companies in Nigeria, including Binance, one of the world’s biggest exchanges, will no longer allow users to buy the USDT and USDC stablecoins with naira after a renewed scrutiny from the Central Bank of Nigeria (CBN).", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/edo-assembly/"}
{"doc_id": "6ad15dc705f6452e5dfd8ea267cfb511", "text": "Emira Property Fund said yesterday it had finalised a scheme of arrangement that will result in residential-focused Transcend Residential Property Fund becoming wholly owned by Emira.\nIn 2018, Emira took its first 34.9% stake in the then JSE-listed REIT Transcend, thereby diversifying to include the value suburban multifamily residential rental property segment.\nEmira CEO Geoff Jennett said their journey with Transcend was a success story for Emira.\n“We partnered with the right asset management team to advance our diversification and earn good returns,” he said in a statement.\nSince the initial investment, shifts in the market saw the appetite for small-cap stocks dry up and, being illiquid, there was no longer value in Transcend remaining listed. Emira responded by increasing its ownership in Transcend and bring it in-house.\nEmira grew its holding in Transcend to 68%, eventually reaching 100% late last year. Subsequently, Transcend has been delisted from the JSE.\n“We have converted a good indirect equity investment into a wholly owned subsidiary, adding another powerful lever to Emira’s diversified strategy,” he said.\nResidential property now represents about 16% of Emira’s South African portfolio, although this would likely to change in line with market opportunities.\nThe transaction continued Emira’s track record of advancing its strategies incrementally, starting by taking an initial position in opportune investments.\nThis approach had played out advantageously in its take-up and subsequent sale of a stake in Growthpoint Properties Australia, and in its co-founding and sale of its stake in specialist retail fund Enyuka.\nThis tactic was also driving Emira’s incremental investment into the US, where its asset-by-asset capital allocation approach with in-country specialist co-investment partner, The Rainier Companies, had secured a 19% stake of Emira’s asset base offshore in equity investments of R2.8 billion comprising 12 open-air convenience shopping centres.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/emira-finalises-scheme-to-make-transcend-its-own-5b8d829c-7f21-48b1-84d9-d0fe1639e653"}
{"doc_id": "71f3bf37f4bd8ac9255898e1b0080568", "text": "“Success is no accident. It is hard work, perseverance, learning, studying, sacrifice, and most of all, love of what you are learning to do.”\n– Pele\nWow! It is a new year,2024 and we are part and parcel of it. Are we not truly lucky? Yes,we are. So, big congratulations to you all-my fondly beloved family members, fantastic friends and faithful fans; for you to be alive, hale and hearty at this challenging moment in time. We must admit that it is not by our power, wisdom or might but by the sheer grace of our almighty maker,God. But the critical questions remain: How do we make the best of this new year? How do we bring out the best in us and succeed against all odds? The answers are not far-fetched.\nTalking about odds, we must first and foremost swallow our base, primordial sentiments of both ethnicity and religion and admit that the harsh economic realities on ground could all have been prevented, with selfless leadership.It is indeed worrisome that after eight odd years of the Muhammadu Buhari-led administration of Sorrows,Tears and Blood, STB (apologies to the great Afrobeat icon, Fela Anikulapo Kuti) we are are currently battling with a debatable “Renewed Hope”. Indeed, the pertinent questions remain.\nIs it that of insecurity, characterized by the wanton wasting of precious human lives as evidenced by the spate of blood-letting in Plateau state? Or, is it the high inflation rate, including that of food, fuel, school fees, rent and sundry consumables? These were worsened of course,by the sudden removal of the fuel subsidy by Mister President back in May 2023, without adequate plan for meaningful palliatives to ameliorate the suffering of the 133 million multi-dimensionally poor citizens? No matter how concerned he is about our suffering by the increase in the salaries of federal government workers, it does make adequate impact by throwing money at self-cteated problems. Rather, you come up with sustainable policies to create an enabling environment for businesses to thrive. That might perhaps, explain why not a few multi-national manufacturing companies are exiting the country and the well woven web of the ‘Japa’ Syndrome has become an alternative to some concerned citizens. One can go on and on.\nBut for those of us who still strongly believe in the great potentials inherent in the vast and varied resources that God has graciously blessed Nigeria with, how do we bring out the best in us? The answers are deep down there inside each and everyone of us, like the precious pearls of gold and diamond buried within the earth.\nAs yours truly has kept highlighting one year after another, this moment is that for sober reflection. Each of us is like an artist with an open canvas right before him. The pictures we paint on it, with the different colours and strokes would largely depend on the individual’s experiences. Whatever our ambition and projection for the year might be, they would be influenced and informed by what we see, hear, smell, eat as well as the people and places we have encountered over the years. The hard fact is that we have under utilized the huge potentials God has endowed us with. Put simply, each and everyone of us can do much better than we have been doing. According to experts on psychology, none of us has used more than 25% of the enormous powers God has deposited within us.\nThat brings into focus Bryan Adams inspirational note that:”Your potential is unlimited.Aspire to a higher place.Believe in your abilities, in your tasks, in your judgement”. But do we really know all the goodies lying within us? No, we do not. And even the ones we are able to identify, we do not believe in them, with some of us underrating what they can do for us. So, where do we begin from?\nWhere else but from God, our all-wise, all-powerful, and all-gracious creator? He alone knows the all-important reasons for creating each and everyone of us and what attributes He has built in us. Whatever religion we practise, it is therefore, significant for us to go to our maker with praises and supplication for all He has done for us and ask Him to reveal what treasures He has blessed us with. It is important also to: “Know thyself and to thyself be true” as the wise ones have rightly admonished.\nGoing further, it is easy for us to know what these attributes are by answering the pertinent questions. What good things do I love to do, and do them so effortlessly that they bring me inner joy, satisfaction and fulfillment? What are my skills, talents, and hobbies?What do others find difficult to actualize but I find it as easy as dotting the ‘Is’ and crossing the ‘Ts’? What do other people quickly identify me with, once my name is mentioned? Whatever it is, never look down on them because that is the key to open your doors of divine Destiny.\nIt could be to draw, to paint, to design clothes, shoes and bags. It could be to farm, to repair broken down gadgets or to build houses. It could be to crack other people’s ribs, as a jester or comedian. That is your calling. Never look down on your God-given gifts. For instance, ace comedian, Ali Baba once trekked all the way from Ikorodu to Victoria Island, VI, Lagos in search of a white-collar job which he did not get. But once he identified his ability to make others laugh and honed it, his life trajectory changed for good! That is it.\nWork on your talents. It all starts with your mindset. Control it. Your subconscious mind is a fertile field. Sow life-giving seeds in it. Develop a Positive Mental Attitude, PMA. Do away with all negative thoughts. It takes absolute belief or faith in God and the abilities He has given you. It takes character, confidence, and self discipline. It takes hard work, humility, and honesty of purpose. It takes perseverance, learning and sacrifice, as the late Brazilian soccer genius and legend, Pele rightly mentioned.\nInterestingly, all these sterling qualities the world has seen exhibited year after year, by unarguably one of the most consistent footballers the world has ever been blessed with, Cristiano Ronaldo. He keeps shattering most soccer records, by not only bagging the most international goals ever scored by an individual, as well as achieving feats across different leagues but by being the highest goal scorer for the year 2023, even at 38 years of age!\nAll these bring to the fore, Benjamin Franklin’s beautiful admonition, that: “Without continual growth and progress, such words as improvement, achievement and success have no meaning”. That shows us the significance of the power of creativity. It simply means the ability to bring out new, unique and valuable perspectives to either existing products and conditions, or coming up with new ones. We all need this attribute at this trying time of economic hardship. As ace music producer, Kenny Ogungbe wisely stated, when you are holding up a partly filled cup of water you view it as either half-filled or half-drained. The choice is yours.\nTo underscore this point, Charles Darwin, brought the idea of the ‘Origin of Species’ with the ‘ Evolution Theory’ to the public sphere back in 1859. He explained that through the law of natural selection, as it favours only those who can easily adapt to changes. To do so we have to deploy our sense of creative ingenuity. And that is what the inventors of electric cars have done to gradually phase out fossil fuel-powered vehicles. In a similar scenario, solar- powered panels have come to gradually take over other sources of electric power supply. To survive the excruciating economic situation in the country, several Nigerians should refuse to give up against all odds.\nAs Ray Kroc, the man who bought over the Mc Donald’s franchise aptly stated:”Persistence pays”. We are all familiar with the inspiring story of the American, Abraham Lincoln who failed in business twice,lost in politics several times and suffered personal tragedies but eventually clinched the much elusive post of the president as he was elected in 1860. What about the scientists who came up with the first cloned mammal, Dolly the sheep in 1996? Did you know how many times they tried before succeeding? 277 times! What would have happened if they had given up at the 276th trial? The answer is yours.\nMy dear brother, sister, friend and fan, if Mercy Johnson did not give up hope as a pure water seller, Victor Osimhen saw the sun smiling behind the dark clouds as a street hawker in Lagos, Patoranking did not lose focus as a rat-killer seller and Funke Akindele was not discouraged by the Nollywood movie makers, who wrongly described her as lacking the attributes of a blockbuster movie artist, why should you?\nBut wait awhile. What was the common aptitude amongst the five of them? They believed in their abilities, in their dreams, in their tasks and in their judgement, as Bryan Adams wisely stated. So should you.\nWelcome to 2024, your best year ever!", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/backpage/article/to-be-your-best-in-2024/"}
{"doc_id": "b0b5f306156daf41a1b0c73fcc423923", "text": "It is not a secret that Kenya has been suffering the consequences of a ravaging drought for more than a year now.\nFirst quarter 2017 GDP growth stood at 4.7 per cent largely due to a notable contraction in agriculture. The 1.1 per cent contraction in the sector is obviously informed by the drought.\nFor example, the drought has decimated the production of tea—one of Kenya’s key exports; production is expected to drop by 12 to 30 per cent.\nLivestock production has also been devastated with estimated losses of 40 to 60 per cent of livestock assets particularly in the North East and Coast. Maize farmers in Uasin Gishu continue to generate measly yields from their farms.\nHow did we get there?\nThis is the first major drought to affect the country since the advent of devolution.\nAre there issues that have emerged in the context of devolution that allowed the drought to grip the country to the extent it has? The answer seems to be yes.\nPaltry budget allocations\nThe first issue is budget allocations to agriculture. According to the International Budget Partnership (IBP), national government allocated the sector as follows: Two per cent in 2015/16, 1.3 per cent in 2016/2017 and 1.8 per cent in 2017/18.\nAs IBP points out, the Maputo Declaration 2003 calls for allocation of at least 10 per cent of total national budget towards agriculture.\nThe average in Africa is 4.5 per cent; Kenya’s national allocations are sub-par.\nThese paltry allocations may be due to the fact that agriculture isn’t an attractive sector to finance.\nInfrastructure remains a priority for national and (it seems) county governments because physical assets can be pointed to as proof of ‘development’. The same cannot be done with agriculture; it seems to be wallowing in neglect.\nWork together\nSecond concern is the lack of coordination between county and national government.\nIt is still not clear who is responsible for what in agriculture. While it has been devolved, the truth is that the national government through the Ministry of Agriculture, is still a key player in the sector.\nThe work I have done at county level makes it clear that neither county nor national government are of the view that they are in charge of the sector.\nAs a result, the sector is wallowing in a lack of ownership riddled by a lack of collaboration and coordination between the two levels of government. This allowed the drought to reach the scale it did.\nSupport farmers\nThe third is a breakdown in support services to small-holder farmers and poor early warning systems; both should sit in the county government.\nIt has been noted that extension services that rural farmers used to enjoy are gone.\nAside from fertiliser subsidies, smallholder farmers on whom we rely for food, need continuous support to make farms more productive, limit post-harvest loss and make sure their products reach markets.\nCounty governments also seem to have failed in the early warning systems that should have signalled the crisis. The governments seem to be having difficulty in playing their role in the sector and it is not clear why.\nIt may be a combination of lack of technical capacity as well as limited financial allocations. What is clear is this cannot continue to happen.\nNational and county governments need to not only prioritise agriculture in terms of budget allocations, but also solve the coordination problem that is so clear.\nMs Were is a development economist", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/analysis/Blame-devolution-for-Kenya-s-falling-food-production/539548-4017372-q5ptcnz/index.html"}
{"doc_id": "472dd86d05401f68cf182dd85a0d8e95", "text": "Global search giant Google will invest Sh110 billion in Africa’s innovation journey over the next five years, chief executive Sundar Pichai has announced.\nDuring this year’s Google4Africa event held Wednesday virtually, Mr Pichai said the funds would be utilised to make technology accessible to more users in the continent.\n“We’ve made huge strides together over the past decade, but there’s more work to do to make the internet accessible, affordable and useful for every African,” he said.\nAfrica remains at the bottom of the global digital economy value chain despite commanding a market of 1.2 billion people due to the high cost of mobile and fixed Internet as expensive smartphones lock more than half of the population out of web services.\nGoogle said the investment would focus to bridge this gap by offering faster Internet to more people at lower connectivity costs. A new subsea cable Equiano is planned to run through South Africa, Namibia, Nigeria and St Helena and connect the continent with Europe.\nThis will add to the already existing 40,000-kilometre 4G and 5G subsea cable by the 2Africa consortium, that connects 19 African countries to Europe and the Middle East.\nIn efforts to help make smartphones more affordable to Africans, Google has partnered with Safaricom in a device financing plan to make Android devices more accessible.\nThe company is moving the initiative to partners like Airtel, MTN, Orange, Transsion Holdings and Vodacom to help “millions of first-time smartphone users gain access to quality, affordable Android smartphones”.\nThe company also announced Plus Codes on Google Maps, a free and open-source addressing system to provide online addresses for millions of people without physical addresses. It is already working in the Gambia, but plans are underway to launch it in Kenya, Nigeria and South Africa.\nThrough what it calls a ‘Black Founders Fund’, Google said it will invest in African-led startups by providing cash awards and hands-on support, in addition to the already existing Google for Startups Accelerator programme, which has helped “more than 80 African startups with equity-free finance, working space and access to expert advisors over the last three years”.\nNitin Gajria, managing director for Google in Africa said during the Covid-19 pandemic, there has been more need for investment rounds in tech startups than ever before.\n“I am of the firm belief that no one is better placed to solve Africa’s biggest problems than Africa’s young developers and startup founders. We look forward to deepening our partnership with, and support for, Africa’s innovators and entrepreneurs,” he said.\nThrough the Africa Investment Fund, the company said it would invest Sh5 billion in startups and provide them with access to Google employees, networks, and technologies to help them build products for their communities.\nSmall businesses in Kenya, Ghana, Nigeria and South Africa will also benefit from the company, with Sh1 billion set aside to afford them low-interest loans.\nTo date, Google said it has trained more than six million people across 25 African countries, with over 60 percent of participants experiencing growth in their business.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/googleinvest-sh110bn-africa-digital-economy-3575128"}
{"doc_id": "986f5e7f52c72e73a93140363183ef40", "text": "Standard Bank has acquired a 35% equity stake in fintech TradeSafe Escrow – the platform underpinning its recently-launched escrow service.\nEstablished in 2013, TradeSafe aims to safeguard the buyer’s funds in trust in a transaction involving two or more parties.\nEscrow services allow for a third-party, in this case Standard Bank, to collect s buyer’s money, which is then held in a bank managed account until all specified requirements and conditions agreed to between both parties are met.\nThe funds are only released to the seller, and other approved beneficiaries once the buyer receives the goods or services in the agreed condition.\nAs part of the investment into TradeSafe, Standard Bank has appointed two non-executive directors to the TradeSafe board. Standard Bank also has management oversight of TradeSafe’s escrow account and is fully involved in the process for payment instructions that TradeSafe initiates.\nThe bank will also provide a second release payment function, with the platform now able to target commodity and M&A transactions greater than R25 million.\nThe acquisition comes just three months after Standard Bank launched its own escrow service leveraging the TradeSafe platform.\nThe service works with clients opening an escrow account in just a few clicks.\n- The buyer in the transaction will have to be a Standard Bank client and fund the proceeds of the transaction from their transactional account using digital banking channels.\n- Non-Standard Bank clients will only be able to perform the role of seller.\n- The client creates a transaction and specifies the terms and conditions. After inviting the seller of the product, that individual can either accept the terms or re-negotiate.\n- Once both parties are happy, the buyer can deposit the funds for the transaction into the Standard Bank Escrow account, that is independent of both parties.\n- The funds are safeguarded and only released upon successful completion of the transaction, as agreed by both parties.\nThere is a fee for facilitating the escrow transaction and this fee can be covered by either the buyer or seller, alternatively there is an option to take on a 50/50 split between both parties. This is the type of terms negotiated ahead of accepting the transaction, Standard Bank said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/428392/standard-bank-buys-stake-in-escrow-fintech-tradesafe/?ref=thisweekinfintech.com"}
{"doc_id": "e1e5da2ce6105718d966140b61767630", "text": "The application of Artificial Intelligence (AI) in the provision of financial services matters now more than ever, and banks of the future will have to keep improving their systems if they are to adapt to the emerging dynamics of customer preferences in the future.\nThis, according to fintech experts who spoke during the inaugural Leap 2022 global tech summit in Riyadh, Saudi Arabia, could make the difference in profitability in the global banking sector.\n“The combination of intelligent propositions and personalised experiences will set an AI bank apart from traditional incumbents,” said Rana Gujral, chief executive officer of Behavioral Signals, an enterprise software company that unravels behavioural signals from speech data.\nNoting that banks across the world are struggling to connect with their customers in the current era of the Fourth Industrial Revolution, Mr Gujral stressed the need for personalising banking experience using AI.\nAn AI-based loan and credit system can look into the behaviour and patterns of customers with limited credit history to determine their creditworthiness. Also, the system sends warnings to banks about specific behaviours that may increase the chances of default.\nWith a major industry shift occurring and the existing practices such as optimising for the first available customer care agent based on routing becoming increasingly ineffective, banks were urged to focus not only on what customers say but also how they say it and “the tonal variations” in their speeches.\n“Banks need to use AI to understand human emotions, deduce speaking styles, assess human behaviours and predict interval signals generated from the tone of voices,” Mr Gujrat said\nBy deploying Natural Language Processing (NLP), a subset of AI, banks could reach every customer in the language they best understand, even if it is vernacular, further boosting financial inclusion in countries with huge unbanked or underbanked populations.\nPetr Stransky, founder and chief executive of British dispute recovery platform iCEIBA, told financial institutions to do more in leading the way in implementing innovations towards the future of digital finance.\n“We are entering an era where everything can be priced and traded in real-time. This will change how we think and act about finance,” he said.\nBanks, according to him, will need to use frontier technologies to segregate most functions and gatekeepers for different types of assets and transactions, as customers now jump into Decentralised Finance (DeFi) products such as Non-Fungible Tokens (NFTs).\nTo achieve this, banks were asked to use modern software in analysing real-time data on every single detail in their banking operations while observing market trends and the changing customer preferences occasioned by the Covid-19 pandemic.\nAI-driven analytics can give a reasonably clear picture of future expectations and help banks stay prepared, especially by analysing data from external global factors such as currency fluctuations, natural disasters or political unrest which have serious impacts on banking and financial industries.\nChief executive of fintech research company Burnmark, Devie Mohan underscored the need for insurance companies to make data-driven predictions to remain in profitable business and rethink their business models.\n“Insurers will need to deliver a better digital experience for both panic buyers and long-term customers,” she said.\nIf banks fail to adapt fast to AI and mobile banking, Ms Mohan warned, bigtech companies could soon take control of the global banking sector, with Google Pay, Apple Pay, Facebook Pay, WhatsApp Pay, Amazon Pay and Alipay all unleashing the power of Big Data analytics to create successful payment across their social networks.\n“Big technology companies may become quasi banks,” she said.\nIBM’s global head of strategy in banking and finance Anthony Lipp says financial services are now so digital that it's easy to embed them in other offers, and it's easy to enhance those offers in markets outside of banking.\n“So the model that banks need to build to be competitive is one of hyper-efficiency — very low cost, extreme scale. That means financial institutions have to come up with alternatives to expensive existing processes.”\nAI-based systems can help banks reduce costs by increasing productivity and making decisions based on information unfathomable to a human agent. Also, intelligent algorithms are able to spot anomalies and fraudulent information in a matter of seconds.\nBanks were also urged to deploy robotic process automation algorithms to increase operational efficiency and accuracy whilst boosting transaction speed.\nA report by Business Insider suggests that nearly 80 percent of banks are aware of the potential benefits that AI presents to their sector.\nAnother report suggests that by 2023, banks are projected to save Sh45 trillion by using AI apps, an indicator that the banking and finance sector is majorly relying on AI to improve efficiency, service, productivity and digital Return on Investment.\nThe Leap 2022 event has brought together tech leaders from across the world, making it a tech information-sharing ecosystem by global players in 5G, fintech, AI, blockchain, Virtual Reality, robotics, green energy, cloud management, edtech, medtech, autonomous mobility and 4D printing.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/why-data-driven-solutions-are-critical-for-banks-survival-3710680"}
{"doc_id": "2079a1557f50c75a08f81e7b39834eee", "text": "Advertisement\nSee BoG's list of 97 unlicensed entities providing loans through mobile apps\nThe Bank of Ghana has cautioned unlicensed entities that are engaged in the provision of loans through mobile applications to the Ghanaian public.\nThe central bank said this was in contravention of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).\nIn a notice, the BoG said it would continue to take action against these entities in collaboration with relevant state agencies to promote the integrity of financial service delivery.\n“The general public is therefore advised to desist from doing business with all unlicensed loan providers. Banks, Specialised Deposit-Taking Institutions and Payment Service Providers are cautioned not to facilitate the illegal transactions of unlicensed loan applications.\n“The Bank reiterates that the activities of these entities significantly breach customer data and privacy laws, as well as consumer protection requirements and norms, with unfavourable implications on the integrity and wellbeing of their patrons,” the notice pointed out.\nThe BoG also encouraged the public to patronise the various types of digital credit products approved by Bank of Ghana and delivered by banks and specialised deposit-taking institutions in partnership with mobile money operators.\n“The general public is advised to consult the Bank’s website using the link below for the approved list of licensed institutions, before transacting any business with an institution,” it stated.\nBelow is a list of loan applications offered on the market without a licence or authorisation from Bank of Ghana.\nFlash Cash\nAccra\nGhLending\nMoLoan\nRapidcedi\n100 Cedi\nCedi Help\nMascedi Consult\nCediboom\nCashLoanPro\nAircash\nAkwaaba Payment\nFourCredy\nGhanalending\nAcornCredit\nGana Loan\nMach Loans Ghana\nMbose\nSika Bus\nUltra Loan FundCedi Ghana\nLoan App\nMika Cash Loan App\nNew Loan Ghana\nZip Loan Onloan/WantCAsh\nCredit Ghana App\nBloomcash\nHome Credit\nAkwaaba Cash Agyenkwasika-\nPersonal loan\nCash Way\nMomo cash loans\nPrime Loans\nEasy Access Loans\nCashpal Online Loan\nHappy Loan\nMoney Loan App\nPlus Loan\nMega Credit\nBoeing Cash\nLemon Wallet\nKoko Cash\nCola Cash/Cash Cola\nRapid money\nCash Star\nLoan Galaxy\nBitcash\nUkash\nFuncash\nHelloCedi Sunny Cash/Sunny\nLoan\nGoldminer\nEnjoy Credit\nCedi Wallet\nPro Kash\nCedi Fie\nHelaCash\nDaily Cash\nFiCash\nSikadua\nPK Loans\nQuick Cash\nTrue Cedi\nRobin Personal Loan\nKudi Credit\n1 Rapid cedi\nCedistory\nSteadycash\nSoft kash\nEasy Kash\nDatesCash\nBoseapa\nYooCash\nFufucredit\nTopCredit\nDeriveCash\nEagle Cash\nCash wave\ncud loan\nsmatloan\nLoanPapa\nCoolCash\nMoLoan\nRapid Cedi\ncedifie\nMOCO\nSikakasa\nChasteloan\nJoy Cash\nCocoaloan\nPopcash\nLoan hub\nCreditmall\ncedipros\nMomcash\nGETwallet\nKeeploan\nCashCocoa", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.graphic.com.gh/business/business-news/see-bogs-list-of-unlicensed-entities-providing-loans-through-mobile-apps.html"}
{"doc_id": "dab34831065081cbf01e0d822ff4f2a9", "text": "Toyota Motors South Africa (TMSA) CEO Andrew Kirby said yesterday that South Africa was seen as a very competitive car market as evidenced by the number of new entrants that entered the market last year.\nKirby said South Africa was becoming one of the most competitive markets in the world in terms of the number of derivatives, models and brands compared to the total size of the market.\nKirby was talking at a TMSA event yesterday, which was hosting the seventh instalment of the State of the Motor Industry (Somi) report.\nHe said there was a 65% increase in new energy vehicle sales sold in South Africa in 2023 compared to 2022, with most of them being battery electric vehicles (BEV).\n“The total volumes are still fairly small, but the trajectory is quite interesting. So from 40 models, we now have 66 models, hybrids making up the majority of new engine vehicle sales at 84%, 4% plug-in hybrids, and 12% battery electric vehicles,” Kirby said.\n“And if we look at the percentage increases, the biggest increase in the number of models is actually plug-in hybrids. So plug-in hybrids going from eight to 17, followed by battery electric from 17 to 31, and hybrids from 15 to 18 models.\n“So substantial change in the market. And if we keep going this trajectory, it’s gonna be interesting to see what the next five years will look like.”\nTMSA said the South African market would likely be buoyed by low-base effects and the continued arrival of various models of new energy vehicles (EVs).\nThe Somi report was released at a time when South Africa’s automotive industry has remained cautiously optimistic that elevated interest rates will not prevent new vehicle sales volumes from surging above pre-pandemic levels in 2024 following a disappointing year in 2023.\nThe new vehicle market’s prolonged recovery from the Covid-19 pandemic stuttered towards the second half of 2023, following two previous years of sound rebound.\nThe market was well on track to recover to the pre-pandemic level of 2019, but new vehicle sales were undermined by pressure from major logistical challenges at the country’s ports towards year-end.\nNew vehicle sales in 2023 increased by only 0.5% year-on-year to 532 098 units compared with the 529 556 units sold in 2022 amid a depressed economy, elevated cost of living increases and power outages.\nKirby said interest rates stayed high for all of 2023 as inflation was high, while structural issues such as logistics bottlenecks and load shedding also compounded the challenges.\nHe said the 532 098 cars sold last year were well below the forecast he had given around this time a year ago, but the volume was 0.5% larger than 2022 and represented four years of growth.\n“But we need to keep this in perspective. It’s still a fairly soft market compared to what we’ve experienced in the last 10 years, over 600 even over 700 000. It’s a good way to go,” Kirby said.\n“And quite honestly, in the first quarter of 2023, we were still on track for 570 000 units.”\nToyota was hosting its annual State of the Motor Industry (SOMI) where it announced that it broke all sales records at over 142 612 total vehicles in southern Africa.\nHowever, the overall passenger segment vehicles manufactured in South Africa has declined by 1% compared to 2019.\nCurrently, 24% of all passenger cars sold in South Africa are sourced in South Africa.\nHowever, India now makes up 42% of all vehicles sold in South Africa – up from 28% in 2022 – with 44 models, while China has grown from a 3% share of the imported market to 9% over the last five years, from 10 to 15 models.\nThere has also been a little decline in the vehicles sourced from Germany, Japan and South Korea.\nAutomotive Business Council CEO Mikel Mabasa echoed Kirby’s sentiments about 2023 being a tough year, but said they were “very cautiously optimistic” that 2024 was going to be a better year than the last.\n“Our outlook for this year is not as down as Andrew’s, who is projecting 540 000. We are currently at around 565 000, which we think is an achievable number,” Mabasa said.\n“We are going to rally quite a number of activities to also be able to stimulate the demand for vehicles. And also, when you look at new energy vehicles, we know for an example that a lot of brands are introducing new products this year.\n“The last count was at the end of last year. We were looking at about 11 new different models that are going to come into South Africa.\n“Since the current fleet of EVs that we have are still at a premium level, we really want to start seeing more of your entry-level models coming into the market so that we can socialise this technology.\n“We are very optimistic because at least as more brands are introduced in the market, it will also help those customers who are still brand loyal to their brands because those brands will be introducing products in that category or segment of the market.”\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/sa-is-seen-as-a-very-competitive-car-market-says-tmsas-kirby-d6b8cf8a-e9e0-45c6-a462-1d73cac299cd"}
{"doc_id": "7f8de325eb1b1cbc9a949421a4f1ea66", "text": "China drives Zim tobacco exports\nLivingstone Marufu\nZIMBABWE has earned $113 million from 25,2 million kilogrammes of tobacco exports, mainly to Indonesia and China, since January this year.\nHowever, the tobacco export proceeds are $80 million less than the amount of tobacco Zimbabwe exported in the same period last year.\nStatistics from the Tobacco Industry Marketing Board’s latest weekly bulletin show that of the country’s total exports, China accounted for over 6,9 million kg valued at $47,02 million while Indonesia bought 3 million kg for $14,6 million.\nWith an estimated 350 million smokers, China has been spending over $200 million a year on Zimbabwean tobacco.\n“As of last week March 28, 25,2 million kg were exported to more than 39 countries so far, generating $131,1 million into the local economy,” TIMB said.\n“During the same period last year tobacco exports generated $193 million from 39,1 million kg. The golden leaf is presently being exported to these countries at an average price of $4,48 a kg compared to $4,93 (during) the same period last year.”\nBelgium bought 3 million kg for $8,3 million at an average price of $2,69 per kg.\nZimbabwe’s neighbour, South Africa has since January bought 2,3 million kg worth $6,7 million at average price of $2,83/kg, followed by Russia, which has spent $4,4 million on 1,5 million kg, while exports to Sudan stand at 1,5 million kg worth $4,4 million.\nOther buyers include Bulgaria, Vietnam, Hong Kong, France, Netherlands, Germany, Holland, Nigeria, Taiwan, Spain and Tanzania.\nTobacco is Zimbabwe’s single largest foreign currency earner followed by gold.\nLast year tobacco export earned Zimbabwe about $900 million compared to $933 million achieved the previous season.\nAcross the country, hectarage put under tobacco slightly decreased from 110 518 hectares last year to 104 397 hectares this year.\nMashonaland Central now has about 29 117 hectares under tobacco, while Mashonaland East and West have 34 956ha and 18 674ha, respectively.\nMidlands, Masvingo and Matabeleland South have the least number of hectares under the golden leaf at 298ha, 48ha and 2ha, respectively.\nAccording to the TIMB bulletin, the total number of new tobacco growers went up to 34 550 this season from 16 462 in the last season.\nMashonaland Central registered a 232 percent increase in new registrations from 13 690 in the 2016 /17 season to 6744 this season.\nPreviously, a preserve for commercial farmers, tobacco has become an attractive source of livelihood for many of Zimbabwe’s communal and small scale farmers.\nThe number of communal farmers taking up tobacco farming had grown to 58 434 as at the review period. The opening of floors late last month is expected to improve foreign currency inflows.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/china-drives-zim-tobacco-exports/"}
{"doc_id": "324e7ad1d2287daad9f38cab239528be", "text": "Sparklight unveils ‘affordable’ FMBN RockView Estate in Abeokuta\nAN alliance struck between the federal authorities and a private developer, Messrs Sparklight Property Development Company Limited has brought succor to contributors to the National Housing Fund (NHF) scheme and increased the housing stock by 196 housing units in Ogun State capital, Abeokuta.\nThe scheme known as Rockview Housing Estate, close to Obasanjo Hilltop, adds to the total of about 3,000 housing units delivered through the NHF Scheme in Ogun State in 17 respective residential housing estates developed in conjunction with public and private estate developers.\nSpeaking at the commissioning of Rockview Estate and tour of Gateway-Sparklight Estate, Ibafo, last week, Minister of Lands, Housing and Urban Development, Dr. (Mrs) Akon Eyakenyi workers in Ogun State to avail themselves the opportunities presented by the NHF, which is fully subscribed to by 30 states of the Federation and the FCT. “It is on record that Ogun State has benefitted immensely by way of the investments of the Federal Mortgage Bank of Nigeria in terms of estate development loans as well as the very pocket-friendly NHF mortgage loans,” she said.\n“While home acquisition remains a highly capital-intensive endeavour, Nigerians of all income brackets can find confidence in the fact that contributing just 2.5per cent of monthly income opens access to a mortgage facility of a maximum of N15 million for a 30 year tenor that attracts just a 6 per cent interest rate. The NHF Scheme is product is specifically designed for low and medium income earners in the formal sector and has been expanded to integrate the informal sector through cooperative societies in order to place affordable housing within the reach of all Nigerians,” Eyakenyi said.\nTo sustain the legacy of the NHF, she disclosed that her ministry has taken drastic steps to overcome the major hindrances to increasing Nigeria’s housing stock with the adoption of the National Policy on Housing and National Policies of Urban Development which prescribes a private sector-driven framework for housing delivery.\nUnder this policy regime, Government provides the enabling environment to facilitate entrepreneurial participation for transformational housing delivery. The minister implored on Nigerians yet to join in participating in the NHF Scheme to begin soonest in order to own their own homes.\nOgun State governor, Senator Ibikunle Amosun enjoined private developers to turn the State into an investment hub through massive provision of housing units for the people.\nThe Governor, represented by the Commissioner for Housing, Mr. Daniel Adejobi pointed out that the policy thrust of the present administration is to stimulate investment in real estate and improve the standard of living of the people by providing enabling environment for private sector participation in housing delivery.\nGovernor Amosun noted that housing serves important function as an economic centre where essential commercial activities are performed, noting that this had led to remarkable increase in economic activities and human population in the last three years. This development he noted had accentuated the challenges of inadequate accommodation in the State, particularly in urban communities.\nThe Chairman of Sparklight Property Development Company Limited, Chief Toyin Adeyinka revealed that the aspect of the project being commissioned were funded through estate developer loan of Federal Mortgage Bank of Nigeria (FMBN), has 86 family dwelling, comprising of 48 units of three bedroom bungalows and 38 units of two bedroom bungalows while Gateway-Sparklight Estate, Ibafo has over 600 family dwellings. About 350 units was commissioned in 2009 and 108 units are at various levels of construction and infrastructural development.\nAccording to Adeyinka, the land for Rockview estate was provided by the then Federal Ministry of Works and Housing under the Public Private Partnership (PPP) arrangement and the MoU was executed on the March 17, 2009, while construction work commenced in 2011.\n“The architectural and engineering designs of our projects are usually carried out in- house by A & A Design Limited also our sister company. The synergy developed in all these companies is what has made our mass affordable housing objective achievable, “ he noted.\nHe sought for the minister’s intervention to grant an application on work out loan, which will allow the company complete the project within two months and fulfill our obligation to FMBN. “Our present EDL has been quite challenging as a result of high inflation and delay in disbursement of the loan. We in Sparklight will continue to explore ways of adopting local materials and technology for the purpose of coming up with moderately priced houses for the working class in Nigeria,” he added.\nGet the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/property/sparklight-unveils-affordable-fmbn-rockview-estate-in-abeokuta/"}
{"doc_id": "5c8fe904962f14993d80ea4756403959", "text": "A recent paper by scholars from Johns Hopkins University, however said the Auditor General may have been wrong in interpreting the SGR loan agreements between the government and the Chinese lenders and that the Port of Mombasa was not used as collateral.\nThe authors of the paper argued that instead of serving as collateral or security for the loans, the profitable Mombasa port was linked to the SGR project as its major customer.\n\"The port's only role was to help Kenya Port Authority (KPA), its owner, ensure that a set level of cargo would be transported between Mombasa and Kenya's inland capital of Nairobi. If cargo levels dropped below that level, KPA agreed to draw on its own revenues to make up the difference,\" reads the report in part, which is titled \"How Africa Borrows From China: And Why Mombasa Port is Not Collateral for Kenya's Standard Gauge Railway.\"\nThe report goes on to say, \"the SGR project was carefully and creatively constructed to reduce the risks of a sovereign default and enhance the bankability of a project with significant benefits to Kenyans, now and in the future.\"\nOpaque details of the SGR contract\nFormer President Uhuru Kenyatta had promised to make the SGR contract public, while speaking on live TV. He however did not live up to the promise and left office last month with the contents of the contract still unknown to the public.\nState House would later note that the president had been advised by the Attorney General against making public the document, noting that the institutions that signed the agreement are bound by confidentiality and disclosure of the content must be guided by certain processes.\nThe promise of making public the contract is spilling into President William Ruto's administration.\nTransport Cabinet Secretary Kipchumba Murkomen last week told Parliament's committee on vetting that he would make public the SGR contract if he was approved.\n\"If approved, I will look for the SGR agreement and make it available to the public because no one knows the contents of that agreement,\" Mr Murkomen told the National Assembly Speaker Moses Wetang'ula-led Committee on Appointments, which vets Cabinet Secretaries. Transport Cabinet Secretary Kipchumba Murkomen. [Boniface Okendo, Standard]\nForced to use SGR\nCargo importers have for more than four years been forced to use the railway, even in instances when it was more expensive and inconvenient than other forms of transport.\nThe freight service, which started operations in January 2018, struggled to attract business and to give it a boost, the government in June 2018 issued directives requiring cargo importers to use SGR.\nCargo destined for Mombasa required KPA's prior approval for it to be cleared at the port Mombasa otherwise all other cargo would be moved by train to the Inland Container Depots in Nairobi or Naivasha. The directives were challenged in court, which declared them illegal, but the government appealed the ruling at the time.\nStay informed. Subscribe to our newsletter\nCoast-based businesses had been fighting the directive, noting that the economy of the coastal city deteriorated on account of the directives as it heavily relied on the port.\nThe directive has however been vacated following the order by President William Ruto that all port operations revert to the Port in Mombasa.\nThe move could be detrimental to SGR, which has relied on cargo owners being forced to use the railway to grow its earnings to Sh15.2 billion last year, from zero five years ago when it started operations.\nDid Kenya get value for money?\nIt is always in question whether Kenya got the best possible deal in SGR. Kenya constructed its 472 kilometre Mombasa-Nairobi line at $3.2 billion (Sh384 billion at current exchange rates), which is in comparison to the 756 kilometre Addis Ababa-Djibouti railway line that was build at a cost of $3.4 billion (Sh408 billion). While the government has defended the Kenya line as having had its unique challenges and features, many have seen Kenya's spending as having been inflated.\nThe critics include Jimi Wanjigi, who said he is among those who mooted the SGR during former President Mwai Kibaki's last term in office.\nWanjigi criticised how the project was implemented. He noted that the initial plan was to use private capital and have the railway run from Mombasa to Malaba.\nHe also noted that the cost was inflated by over 10 times.\n\"SGR was a project birthed by me in 2008 with the same company called China Road and Bridge. We birthed it. We spent a lot of money doing feasibility and technical studies. The intention, when we began, was that the rail was going to be a private rail, nothing to do with government. In fact, government was just supposed to provide the land, which we were prepared to lease. It was like a real estate project,\" said Wanjigi in an interview on Sunday night.\n\"It was Sh55 billion from Mombasa all the way to Kisumu, in fact Malaba... What we wanted to do was straighten up the line and because we know who carries cargo, get them to invest in the wagons rolling stock and pay us real estate value.\"\nAnother harsh critic of the project has been economist David Ndii, who has recently been appointed President Ruto's economic advisor.\nBefore construction works began, Ndii had noted that the country could refurbish the old line - the metre gauge railway - at a fraction of what was to be spent on the new SGR and get more of less the same value that the new railway would offer.\n\"We could have gotten the same service (we will get from SGR) by upgrading the existing one for a quarter of the money,\" he said in the past.\nHe had also noted that the high cost of the new railway would hamper Kenya's efforts to borrow externally,\n\"Our ability to borrow would be significantly compromised and it might mean borrowing at higher interest rates,\" he said.\n\"The consequences of the project will outlive the (Jubilee) Government for many years. The terms of the borrowing, including the interest rate and the currency in which the loan will be issued and the grace period are not clear.\"\nKenya railways still not in charge of SGR\nIt is still in doubt how much skills transfer the operators of the SGR have undertaken to ensure that locals can run the railway.\nWhen the SGR operations were launched, it appeared that Kenyans were in control of the new line and locomotive operations. It later emerged the Chinese were very much in control of the operations including driving the locomotives.\nIt was expected that Afristar - a subsidiary of CRBC which built the railway - would train and equip Kenyans with knowledge and skills to run the new line. Things appear not to have moved and a plan by Kenya Railways Corporation (KRC) to take over operations from the company by May of this year failed to materialise.\nAfristar had a contract to operate the railways for 10 years, but Kenya railways said there were exit clauses that it could exercise half way through the contract. In mid 2021, it said that it had started to take over some of the functions and expected to complete the take over of operations by May 2022, which would coincide with SGR's fifth anniversary.\nThis however did not happen and the Chinese firm is still in control of SGR.\nKRC and Afristar have had difficult relations which is seen in allegations of fraud in ticketing by senior Afristar officials, claims of Afristar hiding information from KRC and at some point KRC considering terminating the operations and maintenance contract, even seeking a legal opinion from the State Law Office.\nData by the Kenya National Bureau of Statistics (KNBS) shows that that revenue from SGR cargo service went up 24 per cent last year to Sh13 billion, up from Sh10.5 billion in 2020.\nRevenues from the passenger service increase to Sh2.2 billion in 2021 from Sh896 million in 2020 - although in 2020 travel was hit by Covid-19. During the year, the passenger service halted operations at some point while passengers generally stayed away.\nSGR has been making losses, spending more on operation and maintenance than the revenues. The government however defends it noting that it is an enabler.\nHow the SGR increased your cost of living\nTo enable the government keep up with SGR loan repayments, the National Treasury imposed the Railway Development Levy (RDL) on Kenyans in 2013.\nThe levy, which was initially pegged at 1.5 per cent, was later raised to two per cent in the Finance Act of 2019.\nBetween Financial Year 2013-2014 and June last year, the taxman had collected at least Sh163.4 billion from the levy. The levy, which was imposed imposed on all imports, has played part in making imports costly and in turn pushed up the cost of living.\nDefaulting on SGR loan repayments\nThere have been reports that the government defaulted on repaying the SGR loans in July and the Exim Bank of China penalised Kenya Sh1.31 billion.\nTreasury however denied reports and said that it remained in good standing with other lenders. The loans repayments are made semi-annually on January 21 and July 21,\n\"We wish to state categorically, that Kenya has never defaulted on its settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claimed of default on debt service payments on facilities extend to the government of Kenya,\" said Ukur Yatani cabinet secretary Treasury in an October 13 statement.\n\"Furthermore, Kenya has noted accumulated any debt arrears in decades to suggest difficult in debt servicing.\"\nThere has been concern about Kenya's debt sustainability but Treasury has over time tried to allay fears that the country has procured too much debt.\nTotal public debt stood at Sh8.58 trillion at the end of June this year, according to Central Bank data.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001460085/knowledge-and-skills-transfer-china-is-still-in-driving-seat-of-sgr-operations"}
{"doc_id": "39465aa54bf5fbb42f1ea6b30f943db2", "text": "Kenya plans to roll out the first consignment of one million locally-assembled smartphones in two months at a unit price of Sh5,484 ($40), in a bid to foster digital access and inclusion.\nICT Cabinet Secretary Eliud Owalo said the affordability of smart devices has been a major hindrance to digital inclusion, hence the need to produce the gadgets locally.\nHe said the low-cost smartphones are being assembled at the Konza Technopolis in Malili, Machakos County and will retail at $40 (Sh5,484 at the current exchange rate).\n“Based on feasibility studies undertaken, we can locally assemble smartphones at a unit cost of about $40. We’ve partnered with the private sector to ensure in the next two months, we can roll out our first consignment of low-cost smartphones,” said Mr Owalo during the official launch of the Information Communication and Technology (ICT) week at the Nairobi Safari Park on Wednesday.\n“We are aware of the affordability crisis of smart devices as a potential hindrance to the ability of citizens to tap the full potential that this sector presents and we have actively engaged stakeholders in private and manufacturing to produce low-cost smartphones.”\nThe Business Daily has asked for access to the assembling plant to independently verify the operations and have access to prototypes, but the ICT officials are yet to grant the request.\nThe CS also declined to reveal the exact firms assembling the phones.\nThe CS also did not disclose the companies the government has partnered with. The only firms the state has direct control of are Telkom and Safaricom.\nIf the deal goes as planned, then the State will have found a way to rekindle hopes in the Konza City dream which has failed to attract enough investors to support its take-off.\nIn 2013, 14 firms expressed interest in the first stage of the Konza City project, dubbed the African Silicon Savannah, which was set to be carried out in four phases of five years each.\nThese firms included Safaricom and Wananchi Online- a Kenyan internet service provider.\nForeign companies were Chinese firm Huawei Technologies, Korean electronics giant Samsung and Telemac of the US among others.\nAttempts to reach the Principal Secretary for Telecommunication Prof Edward Kisiang’ani to respond to our questions on the firms behind the local assembly of smartphones failed.\nIn March 2022, Kenya inked a three-year deal, dubbed the Economic Innovation Partnership Program, with the Korean government to fast-track the actualisation of the Konza City dream.\nOfficial data from the Communications Authority of Kenya (CAK) show that penetration of feature phones or non-smartphones is 68.1 percent as of the end of December 2022.\nSmartphone penetration in the country stands at 60.2 per cent.\n“The number of mobile subscriptions increased from 65.5 million reported last quarter to 65.7 million during the reference period, representing a penetration rate of 133.1 percent,” said CAK in the latest quarterly report.\nThe low uptake of smartphones, Mr Owalo said, has hindered the uptake of other government and financial services.\nThe government also plans to accelerate digital inclusion through an initial 5,000km of the planned 100,000km of fibre optic cable by June this year, a project partially funded by the World Bank.\nThe CS said Sh68.5 billion ($500m) from the World Bank is meant for digital inclusion for fibre connection across the country.\n“We have received $500 million from the World Bank towards the digital transformation agenda, under the Kenya digital economy acceleration programme,\" said Mr Owalo.\n“We have a target of rolling out 5000km of optic fibre by June 30. We have onboarded contractors and reached out to other government agencies including the Kenya Power and Lighting Company, Kenya Pipeline Company, Kenya Railways Corporation, Kenya Electricity Transmission Company and we’re good to go.\"\nRead: Mobile phone sales up 6pc in defiance of excise tax\nUnder the infrastructure pillar of the country’s digital transformation agenda, the five-year plan to lay an additional 100,000km of the national fibre optic cable was first announced by President Ruto in October last year, a month after he assumed office.\nSome 52 per cent of the proposed 100,000km of the optic cable will be laid by the government while the rest will be done by the private sector.\nThe project is aimed at hastening internet connectivity across the country, as well as making its access stable and reliable.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/kenya-to-roll-out-1m-locally-assembled-smartphones--4238630"}
{"doc_id": "945d8913bfb95ad89ec1de460b56207c", "text": "Sasfin has recorded a significant drop in profits as customers struggle to pay back loans.\nAccording to the group’s delayed financial results for the year ended 30 June 2023 (FY23), headline earnings plunged 19.4% to 366.18 cents from 454.43 cents per share in FY22 due to rising costs and higher impairments.\nDespite seeing total income growth of 7.3%, this was offset by cost growth of 10.6% and a higher credit loss ratio of 125 bps (2022: 25 bps).\nThe group’s credit impairments rose from R18.2 million in FY22 to R77.44 million in FY23.\nSasfin is not alone in this, as several other banks have seen a substantial increase in credit impairments.\nIn its interim results for the six months ended August 2023, Capitec said that its credit impairments increased by 62% to R4.7 billion (August 2022: R2.9 billion).\nNedbank’s credit impairments also increased by 57% in the first half of the year due to high-interest rates, increased inflation and heightened load shedding.\nLooking at specific areas, Sasfin’s Asset Finance Headline earnings dropped by 12.25% to R143.7 million (2022 restated: R163.8 million), primarily due to higher impairments. This will shift to a focused Rental Finance Business next year.\n“Our strong distribution channels, excellent client service and long-standing relationships in Rental Finance, underpinned by an understanding of our clients’ needs continues to position us as a market leader in this sector,” said CEO Michael Sassoon.\nBusiness and Commercial Banking saw a headline earnings loss of R104.3 million (2022 restated: R40.3 million loss) due to higher costs and impairments.\nWealth, on the other hand, saw an increase in headline earnings to R94.2 million (2022: R45.5 million) following strong income growth due to growth in AUM and income from associates.\nAmidst the current and forecast challenging economic conditions and the disappointing financial performance, the group declared no final dividend for the period (2022: 120.90 cents).\nOutlook\nCEO Michael Sassoon said that the group has started a strategic reset focused on its core Wealth, Rental Fiance and Banking activities, with the group selling its Capital Equipment Finance and Commercial Property Finance businesses to African Bank for roughly R3.26 billion.\nThe group added that an internal investigation uncovered a criminal syndicate that conspired to circumvent its internal controls. All implicated employees are now facing criminal charges.\nThe SARB did its own investigation, which resulted in allegations of non-compliance in which the group may have potential sanctions. PwC, the group’s auditors, said that the reported irregularity relating to the matter is no longer ongoing.\n“All banks are under constant threat of attack from criminals, and vigilance remains critical. Sasfin has zero tolerance towards any unethical behaviour, and we have taken decisive action in this regard to tackle financial crime head-on,” said Sassoon.\n“We are confident in the prospects of our core activities, both in terms of financial returns and competitive positioning. We continue to strategically review our business to ensure that the outcome lends itself to leaner focused activities, driving positive earnings, thereby enhancing sustainable stakeholder value.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/728321/sasfin-sounds-the-alarm-as-profits-drop/"}
{"doc_id": "f7d913fb1c91b59ef6c96f5bd0c4d3f4", "text": "Another day of violence in South Africa’s Parliament, another session with President Jacob Zuma offering puzzling answers to questions on Nkandla. It could perhaps be just another day in paradise if you were deaf to the alarm bells being rung by Pravin Gordhan, Robert McBride, Anwa Dramat and Ivan Pillay about the menacing threat to our democracy. In a worrying statement, Gordhan appealed to South Africans to “protect” National Treasury staff. Meanwhile Economic Freedom Fighters (EFF) leader Julius Malema has warned there will be no peace until Zuma leaves office. By RANJENI MUNUSAMY.\nAs a large group of burly men who make up the parliamentary protection services filed into the National Assembly on Tuesday afternoon to muscle EFF members out of the House, another group of security officers stepped into the chamber to surround President Jacob Zuma. Although the president was not under any threat, a protection force assembled around him just in case. Again Zuma sat impassively, shielded by this group of armed men, as elected representatives were beaten and carried out of the chamber.\nIt is a sign of the times. Upheaval and violence, now the essence of South African life, while the elite remain cocooned. Zuma, in particular, remains fortified while the onslaught on democracy intensifies.\nAs fighting and scenes of pandemonium played out in the corridors, Zuma took to the podium chuckling. Once again he seemed unperturbed by the violence that occurred, even when a Democratic Alliance (DA) MP shouted at him, “This happened because of you!”\nThere was a time after the Constitutional Court delivered judgment on the Nkandla matter when Zuma seemed to be on the back foot. He appeared under pressure from the chorus of voices speaking out against his violation of the Constitution and calling for him to step down.\nBut Zuma has clearly bounced back. When asked by DA leader Mmusi Maimane to provide proof of his bond for the Nkandla homestead, Zuma was back in performance mode, explaining that he had done nothing wrong and that he and his family paid for the buildings. He told MPs to “just keep quiet and listen”, saying the only problems identified by the public protector were the five non-security features.\n“These items, they represent the kraal‚ fowl run‚ swimming pool … um‚ yebo … fire pool, yes fire pool‚ and a waiting room and the amphitheatre. Five. They are not talking about a house that people live in with bedrooms and living rooms,” Zuma said.\nWhen asked by DA MP James Selfe what collateral he had used to get a bond, Zuma said he used a “PTO” (Permission to Occupy). It is not clear how a lease agreement was used as surety to get a bond.\nZuma regained his political footing in the ANC on the basis of the “apology” he offered the nation following the Constitutional Court judgment on Nkandla. Judging by what he said in Parliament on Tuesday, Zuma is still not apologetic about the Nkandla fiasco or the amount of taxpayers’ money blown on his personal home.\nAnd when asked about the dodgy dealings of his friends, the Guptas, Zuma was even more dismissive. “I know nothing about the business dealings of the Guptas. Why should I have a view?” he asked.\nWhile Zuma is back in top form, seemingly impervious to the turmoil around him, the strain on Finance Minister Pravin Gordhan is intensifying. Gordhan issued a statement on Tuesday evening saying media reports about the Hawks’ plans to arrest him had been “extremely distressing for my family and me”.\n“I cannot believe that I am being investigated and could possibly be charged for something I am completely innocent of. I have answered the questions submitted by the Hawks, and have not heard from them,” Gordhan said. “It is indeed true that no one is above the law. But no one should be subjected to the manipulation of the law and agencies for ulterior motives.”\nThe emotional toll on Gordhan was evident: “Throughout my 45 years of activism, I have worked for the advancement of the ANC, our Constitution and our democratic government. I would never have thought that individuals within the very agencies of this government would now conspire to intimidate and harass me and my family.”\nHe said his lawyers would be approaching the Hawks and the National Prosecuting Authority for further information and clarity about the case against him.\n“The malicious rumours and accusations about ‘espionage’ activities are false and manufactured for other motives,” Gordhan said.\nHe also referred to a Daily Maverick report that one of the Gupta brothers had revealed at a business meeting that Gordhan was to be arrested and replaced as finance minister.\n“There have also been reports of businesspeople claiming inside knowledge of or influence over state institutions. If such reports are true, that alleged conduct will undermine the integrity and honesty within the Treasury or other key institutions,” Gordhan said.\nHe issued a dire warning about the “unrestrained attack on honest and hardworking people and the institutions meant to strengthen our democracy.\n“Millions of people will pay the price (there will be less money to relieve poverty and support job creation programmes) if this subversion of democracy is left unrestrained and unchallenged,” Gordhan said.\nIn the most revealing statement about the onslaught against his department, Gordhan said:\n“I appeal to all South Africans to protect the National Treasury staff, who have diligently, honestly and skilfully served the national interest to the best of their ability.”\nA strong declaration of support came from his former comrades Robert McBride, Anwa Dramat and Ivan Pillay. In a detailed statement on the attack against state institutions, McBride, Dramat and Pillay said there appeared to be a pattern in which government officials are removed from their positions using baseless allegations, media leaks and investigations against them.\n“It appears that the pattern of questionable processes has also been applied to the recent interactions of the Hawks with the Minister of Finance,” they said.\n“Corruption is the biggest threat to our constitutional democracy. This cancer has turned former comrades against each other. People who shared the same trenches in the fight for liberation are now at each other’s throats for the sake of protecting corrupt activities,” McBride, Dramat and Pillay said.\n“We will continue to use our experience and expertise to investigate, fight and expose corrupt activities in the private and public sector.”\nThey too made a public appeal:\n“We call on those in business, civil society, organised labour, NGOs and the general public who value and want to defend our constitutional democracy, to assist our efforts with legal advice and expertise and legal and financial resources.”\nEFF leader Julius Malema is signalling a different method to defend South Africa’s democracy. Speaking outside Parliament after being forcibly ejected and violent bouts with parliamentary security, an enraged Malema said Zuma should never see peace for the remainder of his term.\n“Zuma is not our president. The day he breached the Constitution, that’s the day he kissed the office of president goodbye… The only thing that will bring peace here is when Zuma resigns as a sign of respect to Constitutional Court and Constitution‚” Malema said.\nHe said Zuma should not be allowed to address Parliament because he had broken his oath of office.\n“You will thank us once we restore the dignity of this Parliament by removing Zuma,” Malema said. “These bouncers must know that if they bring violence‚ we will respond with violence. We are not scared… Anyone who manhandles us must know we have got the same capacity. No one has monopoly on violence.”\nIn a time of social and economic turmoil, where schools are burnt down by angry communities and violence has become routine in the House of Parliament, the warning lights are flashing about the state of our nation. Gordhan’s warning should not be treated lightly: if the subversion of our democracy is left “unrestrained and unchallenged”, millions will indeed pay the price.\nThis is no longer about the individuals caught in the vortex; it is about rescuing our nation before it becomes yet another tragic story on a continent constantly being destroyed and reborn. Our rebirth too is possible and hopefully it will come before so much more is destroyed. DM\nPhoto: South African President Jacob Zuma looks on before delivering an address in Polokwane, South Africa, December 20, 2007. REUTERS/Siphiwe Sibeko/File Photo", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2016-05-18-stop-subversion-of-democracy-gordhans-warning-as-zumocracy-picks-up-pace/"}
{"doc_id": "5f0af3434696ab2a52052d5a912a2608", "text": "Ghana's economic future looks positive as 31 envoys have assured of their preparedness to woo top businessmen from their respective countries to invest in the country in order to expand the economy and create wealth for the people.\nVirtually all the ambassadors, who attended the World Meets Ghana Investors’ Forum and Executive Dinner Ball at the Golden Tulip Kumasi City and the Manhyia Palace, respectively, promised to use their revered positions to help boost Ghana’s economy.\nThe historic programme, which had international touch, was organised to honour the Asantehene, Otumfuo Osei Tutu II, as part of activities marking his 20 years of excellent leadership upon his ascension on the Golden Stool of Asanteman.\nEnvoys from the United States of America (USA), the United Kingdom (UK), Canada, India, Netherlands, France, Turkey, Japan, Zambia, Nigeria, Cote D’Ivoire and Niger, just to mention a few, were there to make the two-day, forum memorable.\nThe programme was organised by the E ON 3 Group, headed by young Ghanaian entrepreneur, Richard Ofori Atta, affectionately known in business circles as ‘Tom, Tom’ and the Manhyia Palace, the official seat of the Asante King.\nDuring the two days, the Minister of Finance, Ken Ofori Atta and top businessmen from Ghana and abroad, sat under one roof as they brainstormed about what is needed to be done to help accelerate national growth, especially the business sector.\nGhana need bridges\nGroup Executive Chairman of GBSH Consult Group Worldwide, Ambassador Prof. Tal Edgars, who was the keynote speaker, said Ghana is currently well positioned to develop at a lightning speed, stressing the need for the state to work to attract more investors.\nProf. Edgars also tasked leaders of the country to put more energy into marketing the business opportunities that abound in the country to the world so that businessmen from all over the globe would travel to Ghana and invest in shovel ready opportunities that drive into the Ghanaian economy to create wealth.\n“So far, from geographical wealth, Ghana needs to give a compelling narrative to the world,” the famous public speaker, remarked and asked “Is it Ghana’s time?” and “Are we building more walls instead of bridges?”\nCalls for quality FDI\nAccording to him, “Progress in developing countries can be achieved without either substantial levels of protection and large amounts of direct support, but through focusing on quality Foreign Direct Investment (FDI), Foreign Institutional Investments (FII) and non-resident Ghanaian investment,” adding, there is hope for Ghana.\nIn this regard, the international speaker, implored countries like Ghana to focus on proper strategies that would enable to them attract FDI’s so that their countries would become strong economically in order to rub shoulders equally with developed countries.\nAgain, he also recommended for the immediate “setting up of an Investment Promotion Agency (IPA) to target foreign investors and serve as a link between them and domestic economy, adding “provide access to credit by reforming domestic financial markets.”\nAmbassador Prof. Tal Edgars also suggested to Ghana to implement policies such as “open markets to allow FDI inflows; reduce restrictions on FDIs and provide open, transparent and dependable conditions for all kinds of firms, whether foreign or domestic to attract FDI”.\nBright Future for Ghana\nHe predicted that Ghana would soon emerge as a mighty economic force in the world in the next 10 to 20 years time, saying “Ghana’s tax code is replete with tax concessions that considerably reduce the effective tax rate for both foreign and local firms.”\n“Just purely looking at the demographic trends and the recent policies would merit a certain allowance of belief that for the next 10-20 years, Ghana could be, and one could argue, should be, a productive, sustainable investment return economy, at a time when the rest of the world is regressing”.\nSlams corruption\nAmbassador Tal Edgars admonished Ghanaians to be patriotic by sacrificing for the state by doing away with all forms of illegal practices, notably corruption, which has the potential of drawing the country back from the path of growth and prosperity.\nQuoting from a famous Ghanaian patriotic song ‘Y\nÉ›n Ara Asaase Ni’, he said “Whether or not this nation prospers, clearly depends on the character of the citizens of the nation,” warning “This idea of theft and corruption in accordance with the law, is what we must deal against,”\nHe entreated the citizenry to love, cherish and work tirelessly to transform the country at all times, stating categorically that “We must attend to Ghana in earnest,” attracting applause from the crowd, which included top dignitaries.\nAsantehene\nThe Asantehene, Otumfuo Osei Tutu II, described the government’s ‘Ghana Beyond Aid’ policy as one of the ambitious policies that the country has adopted in recent times, calling for active support from Ghanaians and the international community for the positive programme to succeed.\n“It is in this vein that we have welcomed the vision of the president for Ghana Beyond Aid. It is not a vision for the faint-hearted. It is bold. It is brave. But it is a vision that deserves support, not only from Ghanaians but from all her friends across the globe”, the Asante King said.\nHe noted “the economy may not have performed to the optimum of expectations but even with all the shifts and turns on the political landscape, it has remained relatively resilient. It tells you that we have what it takes to break the mold of dependency and achieve the goal our leaders have set for us.”\nOtumfuo appealed to foreign investors to do business in the manufacturing sector of the state so as to help provide jobs for the unemployed and also expand Ghana’s economy, adding that the mass importation of food into the shops and shopping malls is not helping the Ghana currency so it must be checked.\nAccording to him, Ghana boasts of vast fertile lands, especially in the Sekyere Afram Plains, that can be used for farming to help the country to become the main supplier of food in the West African sub-region, assuring of his support for any genuine potential investor.\nFinance Minister\nThe Finance Minister, Ken Ofori Atta, speaking during the Investors’ Forum, enumerated the numerous positive policies that government had implemented within its short stay in political office to improve the economy and also attract investors to do business in the country.\nOn his part, the Ashanti Regional Minister, Simon Osei Mensah, highlighted the key areas that businessmen can invest in the Ashanti region and make profit in return. He said the region is fertile for all forms of businesses, especially the agricultural sector.\nDISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/31-envoys-strategise-for-ghanaaes-growth-at-otumfuoaes-investorsae-forum/"}
{"doc_id": "b5a7e8fd168dd6f7ff81140cbe292249", "text": "Jason Njoku and iROKO are names that have earned a solid reputation in African tech entrepreneurship, content distribution and the definition of building a business dependent on the internet.\nOne of the reasons behind this is, of course, the way iROKO is playing apart in molding models around the distribution of content.\niROKO, which is in attendance the ongoing filmmakers meet and conference, DISCOP, officially launched its global content distribution and licensing division, iROKO Global.\nUnder the direction of a seasoned broadcast and media professional, Justine Powell, it will handle the licensing of iROKO’s library of Nollywood films and TV series to online and offline platforms, across Pay TV, Internet TV, Inflight and YouTube channels.\nThis is a follow through on iROKO’s movement into linear TV earlier this year through two new TV channels on Africa’s StarTimes. According to the formal statement from iROKO, the new division is already generating seven-figure revenues for the company thanks to deals such as the TV channel distribution route.\nDoes this mean that a consumer focused business for VOD isn’t that lucrative in our market just yet? It’s hard to not look at the birth of iROKO Global and not draw such conclusions.\nOn his blog, Jason Njoku has pointed to the huge earning potential of a distribution model. According to him, this B2B type of distribution (which has to be set up in London because of technical and likewise financial limitations in Lagos) has become the largest revenue generator for iROKO, experiencing 397% growth between 2014 and 2015.\nThe earnings won’t dissuade #TeamiROKO form Africa though. Njoku has gone on to reiterate his commitment to the building of a large consumer business based in Africa, or in short, has said that iROKO won’t abandon the potentially huge market.\nFor now, the massive growth of B2B distribution however, seems to leave it at just that – a potentially huge market, with the wholesome returns coming from a distribution or selling of content to business clients.\nIn a sense, that is what content curators chasing the iROKO model might have to consider as well. The real revenues that warrant praise for a growing demand for African content are yet to be realised from a subscription based model in our environment.\nAs Njoku and iROKO have proved once again, they are now crafting a new approach to the model of monetising content.\nRather than pinning all ambitions for revenue on a sVOD (subscription Video on Demand) model that is choked by a host of African realities (limited broadband access, strained disposable income, power shortages, device and console modalities, competition against monsters with economies of scale) why not sell the content to enterprises that handle the distribution themselves?\nAs has been highlighted by iROKO’s portfolio so far, these aren’t just Pay TV merchants. It’s easy to think that way when you notice all the loud efforts made by well-heeled veterans of the game like MultiChoice.\nHowever, one can consider brokers of in flight entertainment and, because of the internet, we now have buyers of content for Internet TV and even YouTube channels.\nAs a VOD platform with a clearly crafted identity and a growing momentum created by understanding digital trends and what the market really likes, you then source licensing and distribution arrangements on behalf of the right producers, then broker deals with the end buyer.\nThis would transform your African VOD platform into a verification point for measurable interest in types of content, while ensuring that your business doesn’t focus on the gut wrenching exercise of trying to squeeze whatever limited revenue you can from a fragmented market.\nTo be clear, iROKO hasn’t crafted the same sort of model outright. It’s route has other cul-de-sacs that make it iROKO, but some of the key elements hold true here.\nLet’s also not forget how iROKO has expressed an undying commitment to distribution of content via consumer channels in Africa. One thing to keep in mind, though, is how they have the advantage of Nigerian type market numbers at their disposal.\nVOD services that do not have a Nollywood type niche or aggregated numbers of potential subscribers (I’m looking at creators outside Nollywood territory or the culturally knit East African bloc) don’t have that sort of privilege. So perhaps, going B2B just might be the magic needed after all.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2015/11/advantages-of-b2b-model-for-vod-startups-more-apparent-as-iroko-goes-global/"}
{"doc_id": "978cfdb58723a5e9a0aea3c99eadf48c", "text": "Edo LG elections\nLatest\n8 mins ago\nInmates at the Correctional Center in Jos, Plateau State, on Friday, staged a protest due to a reduction in their food supply. The head of the Jos Correctional Center, Raphael Ibinuhi confirmed the incident. Ibinuhi said the problem has to do with the high cost of goods in the market. He stated that the contractor…\n16 mins ago\nA man was discovered in his home with his penis severed, and authorities suspect his dog may be the perpetrator. The local authorities in Germany are investigating the bizarre and unsettling incident after a 66-year-old man was found with a severe genital injury in his home in Herne, North Rhine-Westphalia. According to reports from German…\n16 mins ago\nP President Bola Ahmed Tinubu on Friday approved the appointment of new members of the management team of the FGN Power Company Limited. Presidential spokesman Ajuri Ngelale announced the appointments in a statement. Ngelale said Kenny Osebi Anuwe has been reappointed as Managing Director/Chief Executive Officer (CEO) of the FGN Power Company Limited. Prof Mamman…\n36 mins ago\nRetired Bri-Gen. Bubs Marwa, the Chairman of the National Drug Law Enforcement Agency (NDLEA) says drug abuse among Nigerians is the main driver of insecurity in the country.\n1 hour ago\nThe Central Bank of Nigeria (CBN) on Friday revoked the license of 4,173 bureaux de change (BDC) operators. CBN's spokesperson Hakama Sidi Ali announced this in a statement. Sidi Ali said the affected institutions listed on the CBN website failed to comply with regulations, including the \"payment of all necessary fees, including license renewal, within…\n1 hour ago\nBinance, a cryptocurrency giant, has refuted the Nigerian government's claims that they are negotiating to pay a $10 billion fine. A Binance official stated it had no discussions regarding a $10 billion fine with the Nigerian government but hopes to resume services \"very soon.\" “We recently discussed ways to resolve issues with Nigeria, but we…\n2 hours ago\nChelsea has sent an invitation to Hafiz Umar Ibrahim to train with them with the possibility of signing the Nigerian youngster. Germany-based Nigerian sports journalist, Lolade Adewuyi confirmed Chelsea's invitation to Ibrahim on Friday through a post on X. \"English Premier League (EPL) giants, Chelsea have invited Hafiz Umar Ibrahim to train with them with…\n2 hours ago\nNollywood actor, sisi Quadri is dead, aged 44, according to his colleagues in the film industry. Actor Femi Adebayo, in an Instagram post, acknowledged the sad news by posting on his page; “It's a sad day when good people get taken away from us, by the cold hands of death!! My prayers and condolences remain…\n3 hours ago\nPope Francis launched a fresh critique Friday of gender ideology, saying it was \"the worst danger\" which \"erases differences\".", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/edo-lg-elections/"}
{"doc_id": "a2a2d88f9396e943f40ae3debe0dc934", "text": "JOHANNESBURG – SOUTH Africa’s economic woes worsened yesterday with the National Energy Regulator of SA (Nersa) giving Eskom permission to hike tariffs in April next year in a move that analysts said could see electricity rising by between 10 and 19.4 percent increase next year.\nNersa said it had approved Eskom’s liquidation of the Third Multi-Year Price Determination (MYPD3) Regulatory Clearing Account (RCA) balances for the 2014/15, 2015/16 and 2017/18 financial years over a four-year period.\nNersa has granted Eskom a 4.1 percent increase effective April next year under the regulatory clearing account. Eskom has also applied for a 15 percent tariff increase, which Nersa is considering, although the actual increase – which will come into effect in April next year – could be higher or lower.\nThe move comes as the cost of fuel, one of the major factors stalling economic growth, went up yesterday, heralding a litany of other associated price increases in the food basket, energy mix and inflationary pressures.\n“The impact will be very significant; consumers can expect at least a double inflation increase next year, it will certainly tip over the inflation rate,” energy analyst Chris Yelland said.\nNersa awarded Eskom the green light to raise tariffs and to recover R31.1 billion of the R66.6bn the power utility applied for, to recover its costs for the period in the next four years.\nWarned\nThe Energy Intensive Users Group of Southern Africa (EIUGSA), whose members account for about 40 percent of electrical energy consumed in the country warned that increases in electricity tariffs would exacerbate Eskom’s “death spiral”.\nIn submissions to Nersa on the regulatory clearing account, EIUGSA chief executive Xolani Mbanga said the applications were a result of Eskom’s inability to complete and put into commercial operation the new power stations and its inferior maintenance on the existing generation fleet.\nHe said the demand for electricity during this period was far less than the installed capacity of Eskom and had the generation fleet been optimally performing there would have been no need to purchase additional power on short-term contracts and from international utilities.\n“From whichever angle or perspective this is considered, it is unfair to electricity consumers,” Mbanga added.\nEskom deputy spokesperson Dikatso Mothae said yesterday that the utility had noted Nersa’s decision on the liquidation of the MYPD3 regulatory clearing account balance for the three years.\n“This means that Eskom is required to add a further R8.1bn to the revenue decision for each year of MYPD4 period that is being considered by Nersa,” she said.\nTed Blom, a partner at Mining and Energy Advisors, said the decision would burden an already overloaded consumer with additional costs prematurely.\nBlom said the recovery period included the “Gupta years” under former president Jacob Zuma’s administration, when confidence was low and there was reportedly looting at state-owned enterprises, more especially Eskom.\n“There should first have been a forensic audit into Eskom’s expenditure during that period so it is clear where the money being recovered went to.\n“There is also the ongoing state capture inquiry, which is likely to come up with findings for that period,” Blom said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/sa-woes-continue-as-nersa-allows-eskom-tariff-hike-17332011"}
{"doc_id": "17dadf3b34440d501e9f8e5ba1911888", "text": "In a clear demonstration of its strong market share in Nigeria’s banking space, Zenith Bank Plc has posted a Profit After Tax (PAT) of N103.826 billion in its half year 2020 result, up from N88.882 billion recorded in H1 2019. This showed an increase of 16.8%.\nThis was announced by the financial institution in a statement sent to the Nigerian Stock Exchange on Thursday.\nDespite the negative disruption of economic activities caused by the COVID-19 pandemic, the Tier-1 bank’s gross earnings grew by 4.4 % from N332 billion in H1,2019 to N346 billion in H1,2020\nThe bank also recorded positive growth across key financial metrics as follows, Profit Before Tax (PBT) increased to N114.124 billion in H1,2020 as against N111.677 billion reported in H1 2019.\nAs a testament to its commitment to its shareholders, Zenith bank also announced a proposed interim dividend 30 kobo per ordinary share.\nAbout a week ago, Mr. Ebenezer Onyeagwu the Group Managing Director/Chief Executive of Zenith Bank, urged players in the non-oil export value-chain including exporters and financial institutions to play their part in the drive towards expanding the nation’s non-oil export base.\nZenith Bank stock price recorded a significant gain in its share price after the release of this impressive H1,2020 result, gaining 1.47% to close at N17.20.\nZenith Bank also prints a dividend yield of 16.28%, with earnings per share presently standing at 7.12 and a market capitalization of over N540 billion.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/09/03/zenith-banks-profit-after-tax-in-h12020-rises-by-16-8-to-n103-8-billion/"}
{"doc_id": "8642ab15acfd2cba68b65918012dd57b", "text": "N12b new fire trucks in line with safety recommendations, says Olateru\nDirector General of the Nigeria Safety Investigation Bureau (NSIB), Akin Olateru, has said that the Federal Government’s recent purchase of 10 brand new fire trucks was in line with the safety recommendation of the bureau.\nNotwithstanding the backlash of the N12 billion worth of purchase, Olateru said the Federal Government has succeeded in boosting aviation safety nationwide.\nThe Federal Government’s investment of a whopping N12 billion in 10 Lion Volkan 6×6 Brand of aerodrome rescue and fire fighting vehicles has caused a stir in the aviation community and beyond. According to the official estimate, the landing cost of each vehicle is N1.2 billion or $2.6 million (at N460/$1 current exchange rate) – making the purchase some of the most expensive in the world.\nHowever, receiving the executive members of the Nigeria Aviation Fire and Safety Association (NAFSA) in Abuja, recently, Olateru, said via the gesture, the Federal Government, through the Ministry of Aviation, demonstrated her commitment to air safety and underlined the critical place of firefighters in the safety of air travelers.\nHe recalled the Sosoliso crash of 2005 in which passengers, including school children, died in a most tragic manner, and commended the Aviation Minister for taking the bull by the horn to correct the error in the system.\nOlateru said: “Sosoliso crash is an occurrence, which nobody prays to experience again because it was not just that the aircraft crashed, not just that people were burnt to death, but that parents watched while their children were burnt to death. They were helpless. That memory will be with any parent for life.”\nHe commended the aviation minister and Federal Airports Authority of Nigeria (FAAN) for implementing the recommendation, adding that although it is coming more than 15 years after, “it is better than never.”\nThe NSIB boss lauded the critical role of aviation firefighters in air safety and urged them to assist NSIB in preserving the evidence at the crash sites.\nEarlier, the president of NAFSA, Sunday Ugbeikwu, lauded NSIB and its leadership for a good job of promoting aviation safety in Nigeria.\nWhile acknowledging the importance of firefighters as first responders during occurrences, the NAFSA president sought collaboration between NAFSA and NSIB, to further boost aviation safety in the country.\nThis partnership, according to him, will ensure an interface between firefighters as first responders during air occurrences and NSIB as investigators, which will assist in delivering thorough investigations.\nThe two organisations agreed to sign a Memorandum of Understanding (MoU) as soon as possible, to strengthen the relationship.\nA committee to draft the MoU, which includes the NAFSA president, the NSIB Company Secretary, Dalhatu Kakangi, and General Manager, Safety and Security, Olumide Osineye, was constituted.\nGet the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/saturday-magazine/travel-a-tourism/n12b-new-fire-trucks-in-line-with-safety-recommendations-says-olateru/"}
{"doc_id": "f40311c1c06ed7c1466682607a898eb6", "text": "1 million new housing units on target\nMukudzei Chingwere-Herald Reporter\nTHE country’s target of building one million flats and houses by 2025 is well on course and the private sector is keen to play a part in this regard, the mid-term review of the National Development Strategy 1 (NDS1) has shown.\nNDS 1 is the first five-year National Development Plan towards Vision 2030, of an empowered upper middle-income economy envisioned by President Mnangagwa, which leaves no one and no place behind.\nThe NDS1 mid-term review for January 2021-June 2023 showed that 344 068 flats and houses were completed or stands fully serviced by December 2022, giving hope for achieving the one million target by 2025.\nDespite pushing for the housing target, Government is not compromising on some key elements like provision of safe drinking water with a lot of progress having been recorded on this front.\nBy the end of December last year, 153 308 flats and houses had been built and 190 760 stands fully serviced, giving a total delivery of 344 068 across all provinces, reads the review.\n“During the second half of NDS 1 implementation, efforts by central Government, local authorities, businesses and individual home builders will see a total 1 million flats, houses and serviced stands delivered by 2025, in line with the Second Republic’s thrust of achieving a prosperous and empowered upper middle-income society by 2030.\n“Government interventions saw a commendable increase in the percentage of households accessing basic water and sanitation services during the first half of NDS 1.\n“In terms of access to water and sanitation services, 96 percent of the urban population and 64 percent of rural population had access to basic water services during the first half of NDS 1, while 51,1 percent of the urban population and 54 percent of the rural population had access to basic sanitation services.”\n“Government interventions in support of households’ access to basic water and sanitation services during the first half of NDS 1 included the Presidential Borehole Drilling Scheme launched by His Excellency E.D. Mnangagwa, among other development initiatives.\n“These saw more than 1 000 boreholes having been drilled across the country during the first half of NDS 1.”\nAlso, private players say the economy is undergoing a silent construction boom on the back of increased business activity occasioned by the Second Republic’s emphasis and deliberate strategies to grow the economy and are keen to play their part.\nThe growth, said the players, is however not getting deserved attention as focus remains trained on project completion while spin-offs go unnoticed.\nSpeaking to The Herald yesterday, Zimbabwe Building Contractors Association senior vice president Dr Tinashe Manzungu said they are on board to achieve Government’s targets.\nHe said several capital intensive projects are taking shape and construction companies are lurching onto the infrastructure development activity with different start-ups and operations taking advantage.\n“The target is achievable. It has since been revised upwards, us in the private sector are on-board to meet the targets set out by Government because of the business friendly policies in place that allow for investment.\n“The housing target is achievable and in fact it will be surpassed because Government has guaranteed an environment that is conducive for investment,” said Dr Manzungu.\n“As private contractors we are geared up to be in public private partnerships with our local authorities, we shall not only wait for tenders.\n“You see the proposed budget of $320 billion will hardly meet the target without us private contractors playing a part and we are ready to put in our equity such as equipment and expertise whilst financial institutions put in the running costs and councils or ministries put in the land.\n“This is what we are going to do in assisting our Government to reach the one million housing mark which is achievable”.\nSince his inauguration in 2017, President Mnangagwa has emphasised the need to grow the economy and has along the way implemented practical steps anchored on the “Zimbabwe is open for business” strategy meant to attract Foreign Direct Investment and drive the economy towards upper middle income status by 2030.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/1-million-new-housing-units-on-target/"}
{"doc_id": "faa5e668501d3deae01b5793abe91661", "text": "The poor cannot sleep, because they are hungry,” the Nigerian economist Sam Aluko famously said in 1999, “and the rich cannot sleep, because the poor are awake and hungry.” We are all affected by deep disparities of income and wealth, because the political and economic system on which our prosperity depends cannot continue enriching some while it impoverishes others.\nDuring hard times, the poor lose faith in their leaders and the economic system; and when times are good, too few enjoy the benefits. The GINI coefficient, a measure of economic inequality, has been rising for many years in developing as well as developed countries, including the United States. In Europe, inequalities have intensified as a result of rapidly rising unemployment, especially among young people. Some have reacted by rioting; others have backed far-right xenophobic political parties; many more seethe quietly, growing ever more resentful of politicians and the system they represent.\nThe problem is starkest in the world’s megacities, which account for around 80% of global GDP. But even in the most developed cities, disparities can be marked. For example, as you travel on the London Underground just six miles (or 14 stops) east from the heart of government at Westminster to Canning Town, the life expectancy of the inhabitants at each successive stop falls by six months.\nBut inequality is most acute in emerging economies where urbanization has been fastest.\nBy 2030, an estimated 2.7 billion more people will have migrated to cities, almost entirely in developing countries. Many will encounter hopelessness and exclusion there, rather than the good jobs and better life for which they came.\nMegacities like Mumbai, Nairobi, and Kinshasa are essentially small cities surrounded by huge slums – pockets of wealth in a sea of despair. None resembles the likes of Tokyo, New York, or London, which, despite areas of deprivation, are notable for a more equitable distribution of wealth.\nSuch disparities are equally apparent at the national level, especially in some of Africa’s resource-rich countries. While demand for private jets is booming, 60% of the population lives on less than $1.25 a day. As the world overall grows richer, the benefits continue to flow overwhelmingly to a tiny elite.\nAs a result, efforts to promote more inclusive growth have become crucial, not only for moral reasons, but also to ensure the survival of the global economic system.\nThis involves more than wealth distribution. It means bringing people – or representatives of specific ethnic, religious, or regional groups – into public-policy decision-making, in order to allay their sense of marginalization or perpetual failure. It means creating real jobs to draw workers away from the informal economy, so they can benefit from workplace protections (and pay taxes).\nAnd it means framing policies that are appropriate to conditions on the ground.\nEvery country will have its own specific priorities, and the range of possible policy measures is quite broad. It might include a social safety net, promotion of gender equality, support for farmers, improvement of access to financial services, or countless other initiatives. Apply in almost all cases, according to a recent World Economic Forum debate on how best to spread the wealth. The first seeks to ensure that poor children have access to a reasonably good education as a means to reduce intergenerational poverty. The second set of policies, which are particularly relevant in resource-rich countries, aims at guaranteeing all citizens – and especially the poorest – a share of revenues from what are unquestionably national assets.\nSuch policies have been shown to work in places like Brazil, whose pioneering Bolsa Familia (or family allowance) policy provides cash transfers to poor families on the condition that their children attend school, eat properly, and fulfill other criteria to improve well-being.\nMexico’s “Opportunity” program performs a similar function. Oil-rich Alaska pays dividends from its resource revenues to all of its citizens, a model that several developing countries are seeking to emulate.\nAlthough economists continue to debate the advantages and disadvantages of such schemes, they are not particularly complicated to set up.\nThe challenge lies in forging partnerships and agreeing goals. Governments, businesses, non-governmental organizations, and individual citizens, rich or poor, all have a role to play. If we ignore the dangers of wealth disparities for much longer, the consequences will be far more distressing than a few sleepless nights.\nBy: Donald Kaberuka", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/the-inequality-nightmare/"}
{"doc_id": "610120ac0e563139dd1e8fd0c1629480", "text": "The National Health Insurance Fund (NHIF) nearly doubled its cash surplus in its financial year ended June, helped by a sharp rise in premiums that eclipsed a jump in medical payouts and other costs.\nNHIF’s unaudited results for the period show that the scheme had Sh800.97 million in surplus, representing a 78 percent jump from Sh449.9 million held a year earlier.\nThe health fund’s premiums grew 29.4 percent to Sh80.43 billion, while medical payouts jumped 31.9 percent to Sh71.34 billion. Other costs increased by 10.3 percent to Sh7.78 billion.\nThe jump in NHIF’s cash reserves represents a turnaround for the State-backed insurer that had sunk to a negative cash surplus of Sh3.65 billion in the year ended June 2019.\nNHIF’s Chief Executive Officer Peter Kamunyo said a spike in the cost of drugs and other medical inputs dampened the impact of a record collection in premiums.\n“In June 2021, our payouts ratio was at 87 percent, and in June 2022 slightly increased to 89 percent. In this period we saw a massive increase in the cost of healthcare inputs due to dollar hitches,” Dr Kamunyo told Business Daily in an interview.\nThe cost of medical drugs and procedures has been on the increase in the wake of the shilling’s decline against the dollar forcing healthcare providers to pass the increased cost to insurers and patients who pay out of pocket.\nHealth inflation was at 3.85 percent in July last year— the start of the financial year under review— as medical services like other sectors were not spared from the soaring cost of living.\nThe increase in cash surplus strengthened NHIF’s financial state at a time the State-backed insurer is set to spearhead the roll-out of Universal Healthcare Coverage (UHC) in line with new rules that have made membership to the scheme compulsory—pending regulations to give effect to the law change.\nThe law was early this year changed compelling all Kenyans aged above 18 to register and pay monthly premiums of Sh500 per month as part of the UHC. The NHIF (Amendment) Act, 2022 made membership compulsory for all Kenyan adults while the national and county governments will pay premiums for households that are classified as vulnerable.\nThe two levels of government piloted the model of paying NHIF premiums for poor households last year and have spent over Sh1 billion.\nDr Kamunyo says that NHIF is bracing for a spike in medical claims under the UHC given the increase in members, adding there is need to ensure the scheme significantly grows its revenues from premiums.\n“We must ensure we increase the retention level and also address other sustainability measures like contribution rates including those earning more than Sh100,000 a month to pay more,” Dr Kamunyo added.\nMandatory membership to the NHIF is an upgrade of the previous scheme where only workers in the formal sector are compelled to join.\nWorkers in the informal sector had a choice to join or drop the NHIF membership with their monthly contributions set at Sh500.\nNHIF estimates that it will raise Sh81 billion annually under the compulsory listing, helping it to remain financially stable even in the face of the anticipated rise in medical claims.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/health/nhif-cash-surplus-rises-78pc-on-high-premiums-3938066"}
{"doc_id": "524061e952cf253497efc800f0ad98a2", "text": "Africa must tap from India\nDr Nkosazana Dhlamini-Zuma\nIf we consider the evolving geopolitics of our times, according to the last Human Development Report titled “The Rise of the South”, it is believed that by 2020, the joint GDP of Brazil, China and India will overtake the combined economies of the UK, the USA,\nIt is clear from the above that emerging economies are here to stay. Their influence on the world economy is not only significant today, but it will also continue to grow in the future.\nSimilarly, Africa represents a frontier for global economic growth and stability, now and in the future. The resources of Africa have been the driving force upon which the world economic engine has depended. This situation is likely to continue long into the future but this time with Africa having a greater say and benefiting from its resources.\nAfrican leaders have initiated and embarked upon ambitious and far-reaching strategies and plans that will have a transformative impact on the continent.\nThese include a plan to industrialise the continent through the Accelerated Industrial Development of Africa, a plan to increase trade between African countries through the Boosting Intra-Africa Trade and a plan to eliminate trade barriers and deepen the integration of the African market through the establishment of the Continental Free Trade Area as well as the Programme for Infrastructure Development in Africa and Agro-Industry Development Initiatives among others.\nIn this regard, we urge the Government of India to support these initiatives. Africa and India have had, since times immemorial, historic trade relations. The Indian Ocean, which lies between us, not only provides us valuable links of blue highways and optic fibre highways, but it is rich in marine resources that are vital to Africa’s and India’s blue economies and trade relations.\nIt is encouraging to note that trade between India and Africa has grown exponentially during the past decade and is expected to reach US$90 billion by 2015. As of 2011, India has emerged as Africa’s fourth largest trade partner behind China, EU and USA while Africa has emerged as India’s sixth largest trading partner behind EU, China, UAE, USA and Asean. More than 20 percent of India’s oil and gas imports are from Africa.\nTrade is not the only sector growing in the relations between Africa and India. India has begun investing in the energy sector in Africa as well as in mining, including uranium and hydrocarbons, precious metals and gemstones, especially gold and diamonds. We look forward to these investments contributing to Africa’s agenda of promoting industrialisation and value addition to its raw materials within the continent prior to their exportation and to the development of African skills and know-how.\nThis will ensure inclusive growth that translates into sustainable and decent job creation and retention as well as poverty eradication. In addition, while calling for more Indian foreign direct investment in Africa, such investment should be diversified and encourage local private sector participation, particularly for women and Africa’s growing youthful population.\nAfrican governments have adopted a joint Plan of Action with India for enhanced co-operation including trade. But we rely heavily on the private sector and on public private partnership to concretise this agreement. We therefore expect a lot from the Africa-India Business Council.\nThere is no doubt that both Africa and India have much to gain through South-South co-operation. In this regard, human resource development, investment in infrastructure development and institutional capacity building will be critical to ensure successful South–South co-operation, based on mutual and equal benefit.\nWe therefore wish to express deep appreciation to India for the number of capacity building institutions and various training programmes it is offering to African citizens. I am urging our member states who have offered to host those institutions to move with speed in the operationalisation of these institutions and programmes.\nWe must assess the state of play with all of the institutions, see where we can assist those countries that offered to host to move forward, and if not possible, to then identify other countries where these can be established in the shortest possible time.\nAt the recent Conference of Ministers of Industry as well as at a meeting of the African Women Entrepreneurship Programme, the need for business incubators was raised to enable women and youth to be better trained and equipped with the necessary skills so as to graduate from micro-enterprises to medium and larger enterprises with a view to satisfying both national and export demands and contribute to their respective countries’ economies.\nAs we prepare for the 9th WTO Ministerial Conference in Bali, we need to ensure that the interests of developing and least developed countries are safeguarded, particularly in agriculture and food security.\nWe must ensure that this process is used to push for greater policy space for all developing countries to pursue national and regional policies that allow them to industrialise and develop their economies, eradicate poverty and build shared prosperity.\nAs much as trade facilitation in itself is a necessary action for boosting intra-African trade and increasing our competitiveness, the proposed text could create supplementary challenges to our weak technical, administrative and financial capacities.\nIt is therefore important to ensure that the negotiation outcomes strike the right balance in ensuring that African priorities are reflected without African countries incurring crippling costs to meet WTO trade facilitation obligations. Thus, it is important to ensure adequate financial and technical support for African countries to meet the binding obligation that may be agreed upon.\nThe priorities for Africa are clear: we must industrialise, grow our manufacturing sectors, expand intra-Africa trade, develop our skills and human resources, grow our agriculture and agro-processing sectors and develop our infrastructure. We encourage our Indian partners to support us on this issue.\nAs we start reflecting on areas of co-operation for the next Africa-India Forum, it is fortunate that the period of the next Programme of Action coincides with that of the AUC’s Strategic Plan and therefore will facilitate harmonisation and follow-up action.\nDr Nkosazana Dlamini Zuma is Chairperson of the African Union Commission.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/africa-must-tap-from-india/"}
{"doc_id": "9883d2310f338a37b9fd2d8a861b07f4", "text": "Dike Onwuamaeze\nBrazil said it has set aside $100 million for the promotion of agribusiness finance in Nigeria and is ready to increase it to $1 billion in the next three years.\nThis was disclosed wednesday by Brazil’s Ambassador to Nigeria, Mr. Francisco Carlos Soares Luz, during a symposium on agribusiness finance, with the theme: “Making Agribusiness Bankable: Lenders and Investors Expectations,” which was organised by the Financial Services Group (FSG) of the Lagos Chamber of Commerce and Industry (LCCI).\nLuz, said the fund was meant to enable Nigerian farmers to access agro machineries from Brazil.\nHe said Brazil would assist Nigeria in cassava and sugar cane production.\n“These are more than food products. We generate 8000 megawatts of electricity and ethanol for fuel from sugar cane in Brazil,” he added.\nThe Nigerian agriculture sector, according to President of LCCI, Mr. Babatunde Paul Ruwase, attracted$169.37 million foreign direct investment between April and June 2019.\nHe said: “Research conducted locally and internationally confirmed a positive correlation between agriculture finance and agriculture development. Nigeria need to scale up investments in improving agriculture yield and integrating the value chain over the next decade to effectively capture a significant share of the market.”\nAlso, the Chairperson of the FSG, Mrs Mojisola Bakare, said the focus of the symposium was to discuss the issue of providing sustainable financing for agribusiness in across the entire value chains and to come up with practical outcomes.\nBakare said: “Agriculture holds the key to the economic transformation and diversification of the Nigerian economy and given the current state of the Nigerian economy, at no other time is the handshake between financial industry and the agriculture sector more appropriate than now as we work to move our economy from being import dependent on agricultural products including staple food to a non-oil export one.”\nIn his contribution, the Managing Director of NIRSAL Plc, Mr Aliyu Abdulhameed, said NIRSAL was established to de-risk agriculture lending in the country and encourage the flow of finance to the sector.\nHe said Nigeria was suitable for agribusiness finance due to its 84 million hectares of arable land, favourable government policies and rapid growing population.\nHe also said the Nigerian agriculture was in need of finance capital, technology capital, equipment capital and human capital to translate its potentials to reality.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2019/11/21/brazil-proposes-1bn-support-for-nigerias-agribusiness"}
{"doc_id": "43471a08ad1d6ac209221f9e21ffdf3c", "text": "Johannesburg - Platinum producer Lonmin is running an unsustainable operation, according to a report released on Tuesday.\nIn a study, the Bench Marks Foundation (BMF) said Lonmin claimed to be the \"best in class\" in sustainability, but that if this were true, platinum mining in South Africa was not environmentally, socially or politically sustainable.\nThe BMF is an independent organisation monitoring corporate performance in the field of corporate social responsibility.\nLonmin spokeswoman Natascha Viljoen said that although Lonmin had been given a copy of the report, it did not participate in its compilation.\n\"We have started going through the detailed analysis to understand the context and veracity of the assumptions properly, but given the 10 year span and the changes in reporting methodology we need more time,\" Viljoen said.\nOnce Lonmin had completed the review it would engage Bench Marks to discuss its interpretation of the data.\nThe study on corporate social responsibility and mining focused specifically on Lonmin.\nIt looked at Lonmin's reporting of itself over a period of about 10 years, between 2003 and 2012, in its corporate social development reports, the BMF said in a statement.\nThe report focused on a limited number of areas, including the use of contract workers, wages, \"social capital\" reporting, and housing programmes.\nAccording to the report, the country's platinum mining industry had rapidly grown to 30 percent of the whole mining industry's contribution to GDP from 10 percent 15 years ago.\n\"After the 1990s, it experienced an extended period of extreme profitability,\" BMF said.\n\"Since 2008, profitability has been significantly lower, prompting cuts in Lonmin's social labour plans and retrenchment plans at Anglo American Platinum.\"\nContract workers in the sector numbered around 30 percent of the workforce. The gold mining sector, by comparison, used between 10 and 15 percent contract labour.\n\"Since 2002, 20 to 25 percent of Lonmin's workforce has been contract workers, and the proportion grew to over 30 percent in response to the 2008-2009 crisis,\" the report found.\n\"In the platinum industry, there is no accurate reporting of contract worker numbers and their wages. This is in breach of the legislation.\"\nRegarding wages, the last year had shown that mineworker income was crucial towards social and political sustainability.\n\"The wordy SDRs (sustainable development reports) are completely silent on this issue.\n\"Rough calculations based on total employment and total labour cost per year reported by Lonmin give an erratic curve, but indicate successful cuts in average pay increases per Lonmin employee between 2009 and 2011, probably as a result of the contract worker strategy.\"\nLonmin SDRs displayed value added tables to show the distribution of new income every year to different stakeholders.\n\"During the good times for shareholders, 30 percent of value added accrued to wages. In times when new value production decreased, the wage share increased to 70 percent.\"\nThe generally higher and fluctuating wage share at the three big platinum mining companies indicated a stronger position for labour there than in the rest of the platinum industry.\nThe report noted that, according to StatsSA, the wage share of value added for the whole industry had been stable at a low 30 percent since 2002.\nFrom 2003 to 2012, around R6 billion had been paid out as dividends to Lonmin shareholders, including in 2012.\nNo dividends were paid in 2009 or 2010, and the 2012 level of three percent of value added was low compared to pre-crisis levels.\nThe portion of the value added paid to the state in corporate taxes dropped from over 16 percent in 2007 to less than four percent in 2010, and to just over two percent in 2011.\nThe study found that Lonmin was not a leader in executive pay, but it would take an average worker 325 years to earn the value of the CEO's remuneration.\nThe amount spent by the company on \"social capital\", as reported in the SDRs, was less than what was paid to its directors until 2010.\nThere were between nine and 12 directors, but the community targeted by the \"social capital\" numbered tens of thousands of people.\nThe company's SDRs contained many commitments to the provision of housing, including being involved in two RDP projects, and it had also repeatedly committed to its own housing projects.\nHowever it had not met its commitments under the Mining Charter, the study found.\nSapa", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/report-says-lonmin-unsustainable-1592473"}
{"doc_id": "1fa768925548614d01cf096afe530913", "text": "The International Monetary Fund should be helping impoverished Swaziland, not calling for budget cuts, the Southern African country’s embattled king said on Wednesday.\nMswati III, who critics accuse of living lavishly, complained in a speech about IMF calls for cutting civil service salaries.\n“When they come to visit us, they do not come in the same spirit and that is a cause for concern,” he said at the opening of a two-day “dialogue” that the palace is promoting as a step out of its crippling financial crisis.\nMswati, who arrived at the meeting in a luxury car, admitted that his country’s economy was “not a good sight to see”.\nIMF officials in Washington said they would not comment beyond a statement issued after fund experts visited sub-Saharan Africa’s last absolute monarchy in August. The experts expressed concern about the kingdom’s deepening crisis and its failure to meet IMF targets to stop borrowing from the central bank and cut wage, travel and defence spending in favour of funding education and health.\n“We are given timelines that are difficult to meet,” Mswati complained of the recommendations.\n“I am quite confused as to which advice to take. The IMF has its own advice, the ILO [International Labour Organisation] has its own advice and the UN has its own advice. This puts us in a predicament, knowing the state of the economy,” he said.\nBut the king said cutting public workers’ wages was difficult when “some of the civil servants are bread winners for large families”. He added such cuts also would require consultations with unions.\n“It is lies that we refuse to embrace IMF programmes,” he said. “What we want is that the IMF hear our side of the story as a country. Something which it refuses to do.”\nMswati complained that countries such as Greece and Portugal have received bailouts. But he did not mention that Greece has taken such steps as cutting its public sector and shutting down state enterprises.\nThe IMF said consultations with Swaziland would continue.\nSwaziland is several months into a financial crisis that forced it to stop paying to treat cancer patients and close its university for a time. Public school principals say they are unable to pay secretaries’ wages or utility bills or buy chalk and other supplies.\nThe cuts have led to protests by civil servants and others, with some Swazis saying the king should rein in the lifestyle enjoyed by his family, which includes 13 wives. Pro-democracy activists have tried to exploit popular anger over the budget crisis, but many Swazis remain attached to the idea of a monarchy, if not to the current monarch.\nMswati has ruled this nation of about 1.2-million since 1986.\nSouth Africa last month agreed to give Swaziland a R2.4-billion loan contingent on economic and political reform. South Africa has yet to begin paying out the money.\nAs a condition for the loan, Pretoria insisted that Mswati open a “national dialogue”, which the meeting on Wednesday was intended to address.\nAbout 1 000 people attended the talks, including students, business leaders, academics and government officials. – Sapa-AP, AFP", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/article/2011-09-15-swazi-king-moans-about-the-imf/"}
{"doc_id": "fa04738a82fa1516756a9b98f6f22589", "text": "The Constitutional Court has ordered the South African Social Security Agency to consider paying grants through the banking system. By Barbara Maregele for GROUNDUP.\nFirst published by GroundUp\nThe Constitutional Court has ordered the South African Social Security Agency (Sassa) to take another look at paying social grants through the banking system.\nThis method of payment was recommended by the panel of experts set up by the court to monitor changes to the grant payment system on the expiry of the current contract with Cash Paymaster Services. In its second report, on 20 November, the Panel suggested that Sassa pay grants directly into the personal commercial bank accounts of beneficiaries. The panel argued that low banking fees could be negotiated.\nIn a directive on Wednesday, Chief Justice Mogoeng Mogoeng ordered Sassa and Social Development Minister Bathabile Dlamini to explain why this payment method is not feasible.\nHe also asked the panel of experts to examine whether National Treasury should investigate Sassa officials to decide whether they should be prosecuted for malpractice or obstruction.\nThis directive by the court comes a few days after Jeff Radebe, chair of the Interministerial Committee (IMC) on Comprehensive Social Security, announced that a deal between Sassa and the Post Office would be finalised by last Monday subject to its cost-effectiveness. But Radebe’s office has remained mum this week, missing yet another deadline to secure a new service provider to pay grants.\nThe panel of experts said in their report that paying grants into beneficiaries’ accounts would be at a “fraction of the cost” of doing so at cash payment points. The panel also said that of the approximately 16-million social grant-related transactions per month, 79% were processed through South Africa’s “efficient and secure” National Payment System.\nUnder specific conditions, cash payments could continue to be made by CPS to beneficiaries living more than five kilometres from banks.\nMogoeng said if the panel’s recommendations were feasible, Sassa should report back to the Court by 15 January 2018 on how it planned to pay grants through the National Payment System.\nHe also ordered that the panel “in the national interest” arrange meetings between the Reserve Bank, National Treasury and other parties involved in paying grants directly into beneficiaries’ accounts. The panel must report back to the court on these meetings by 29 January 2018.\nOn 8 December, Sassa is to submit its detailed contingency plan to the court on whether completely phasing out CPS by 1 April next year is possible.\nWith less than four months until the CPS contract is meant to end, it is still not clear who will be paying millions of social grants to beneficiaries across the country. DM\nPhoto: Chief Justice Mogoeng Mogoeng has ordered Sassa to consider paying social grants through the banking system. Archive photo: Barbara Maregele", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2017-11-30-groundup-mogoeng-tells-sassa-to-go-back-to-the-drawing-board/"}
{"doc_id": "001528ab3973c9792f6a7dfb471f4191", "text": "AFTER shutting down its long steel manufacturing at Newcastle and Vereeniging, ArcelorMittal South Africa said yesterday it would grow its flat steel business through import replacement and localisation as Steel and Engineering Industries Federation of Southern Africa (Seifsa) called on President Cyril Ramaphosa to reverse South Africa’s scrap metal policies.\nArcelorMittal South Africa on Tuesday announced that it was axing 3 500 jobs at its long steel businesses, citing weaker economic growth, poor logistics and erratic infrastructure.\nAmid widespread concern over the closure of the Vereeniging and Newcastle long steel operations, ArcelorMittal South Africa CEO Kobus Verster insisted yesterday that the issues that had contributed to the winding down of the long steel business were difficult to address in the short term.\nVerster told journalists during a virtual press briefing yesterday: “We are quite clear the logic for this is the slow economic growth and hence negative steel demand. These are complex issues that would be difficult to fix in the short term.”\nLabour union Solidarity on Tuesday blamed Ramaphosa’s government for the collapse of ArcelorMittal South Africa’s long steel business although it also blamed the company for not following through on procedures before announcing the winding down of the operations.\nBusiness Report understands that unions and government officials will push for ways to avert the complete closure of the company’s operations. This is in addition to lobbying policymakers to create a favourable environment for the steel manufacturing industry in South Africa at a time competition from cheaper imports is growing.\nSeifsa said yesterday that the logistics challenges facing South Africa “raise serious questions whether port and rail infrastructure can get products” to the end manufacturers.\nSeifsa CEO Lucio Trentini said: “Downstream industries are heavily reliant on the long products that come from these (ArcelorMittal) plants to which a switch-over will not happen overnight. Even where these products can be imported this will result in the exporting of jobs that are desperately needed in South Africa.”\nHe added that the Department of Trade, Industry and Competition (DTIC) was also failing to “create an enabling environment conducive to growth, stability and job security” in South Africa.\nSeifsa, which represents 18 independent employer associations in the metals and engineering industries, has long warned that the decisions relating to the scrap metal policy and its industrial policy consequences would yield casualties across the industry, he added.\nSeifsa is now urgently lobbying for policy issues in the metals and engineering sectors to be escalated to the Economic Cluster of Ministries, arguing that the DTIC does not have the capacity nor the grasp of the broader implications of developments affecting the sectors.\nSeifsa said: “The matter is now beyond urgent and we urge the president and key Ministers in the Economic Cluster to treat it as such, if we are to avoid a socio-economic catastrophe of gigantic proportions in the metals and engineering industry which will reverberate throughout the economy and the continent, impacting the auto, motor, construction and mining sub-sectors of the economy and all who work in it.”\nArcelorMittal said that beyond the closure of the Newcastle and Vereeniging long steel operations, it was now planning to “grow our volumes in the flat business through localisation and import” replacement.\nVerster said: “Without our long business going forward, we have to find alternatives for products metal of a certain specific size and quality, special profiles, the complete seamless tube range and the heavy section and rail modes, as well as special processing capabilities like hollow drawers, which are only produced in Vereeniging.”\nThe cash-generating potential of the flat business would now be directed “towards re-establishing ArcelorMittal as the champion of the SA steel-based” industrialisation. The company would also be focusing on implementing its decarbonisation programme.\nVerster added ArcelorMittal South Africa was also weighing its options on a large steel plant being built in Zimbabwe. Verster last year visited Zimbabwe and met President Emerson Mnangagwa to explore business opportunities in the neighbouring country which also suffers from poor rail and electricity infrastructure.\n“Zimbabwe is busy erecting an integrated facility, almost the same as Newcastle, with coke batteries, blast furnace (and) they have future aspirations to do, you know, rolling facilities, so the part of the business, or parts of long business, can theoretically fit into that. It’s options that we will look at, but has not really progressed far,” said Verster.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/steel-industry-appeals-to-have-scrap-metal-policy-reversed-a5885a92-36e5-4e62-9394-aac6337ad148"}
{"doc_id": "6f6cb35df04ddfc9dbac365cd160dd08", "text": "This is the summary of the daily performance of major economic indicators and highlights from trading sessions and key statistics such as Treasury Bills and FGN Bonds.\nThis report is dated July 25th.\n***MAN, LCCI kick against CBN forex restriction on milk import***\nBonds: Yields in the FGN Bond market declined significantly by c.17bps, as market players reacted to the strong demand and relative undersupply of bonds at the auction in the previous session. The most impact was felt on the short and mid-end of the curve due, to the significant amount of unsuccessful bids and lower clearing rates on those tenors.\nWe expect yields to remain depressed in the interim, due to the paucity of offers in the market.\nTreasury Bills: The T-bills market traded with mixed sentiments during the session, with inflows from OMO T-bill maturities spurring slight interests on the long end of the curve, whilst we witnessed more profit-taking around the mid tenors as market players sought to raise liquidity for their funding obligations.\nWe expect yields to remain slightly pressured tomorrow, with outflows for bond auction settlement expected to further impact on system liquidity levels.\nMoney Market: Rates in the money market remained elevated, despite the OMO T-bill inflows of c.N90bn. The OBB and OVN rates consequently ended the session at 14.29% and 15.00%, with system liquidity currently estimated at c.N30bn.\nWe expect rates to trend higher tomorrow, due to expected outflows for the FGN bond auction settlement (N86bn).\nFX Market: At the interbank, the Naira/USD rate remained stable at N306.90/$ (Spot) and N357.70/$ (SMIS). The NAFEX closing rate at the I&E window rose further by 16k to N361.91/$, whilst the market turnover dipped by 55% to $173m. At the parallel market, the cash and transfer rates rose by 20k and 50k to N357.70/$ and N362.00/$ respectively.\nEurobonds: The NIGERIA Sovereigns sustained gains in today’s session, with yields lower by c.7bps on the day.\nThe NIGERIA Corps were relatively stable, but with slight gains witnessed on the ACCESS 21s, ZENITH 22s and UBANL 22s.\nDisclaimer: Whilst proper and reasonable care has been taken in the preparation and accuracy of the facts and figures presented in this report, no responsibility or liability is accepted by Zedcrest Capital or its employees for any error, omission or opinion expressed herein. This report is not an investment advice or a research recommendation and should not be regarded as such. The information provided herein is by no means intended to provide a sufficient basis on which to make an investment decision.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2019/07/26/fgn-bond-yields-compress-following-robust-auction-demand/"}
{"doc_id": "b2e9224b9f702c2ef48a8f76f6e57917", "text": "A new report has called on African countries to give priority to sustainable farming practices in their national policies and budgets to ensure food and nutrition security and build resilience against climate shocks.\nThe report by the Global Alliance for the Future of Food warns that the promotion of industrialised food systems at the expense of environment-friendly agricultural production systems like agroecology is aggravating biodiversity loss, deforestation and greenhouse gas emissions.\n“The industrialised food system is one of the greatest stressors to the health of the planet, causing 80 percent of biodiversity loss and generating almost a quarter of global greenhouse gas emissions. Alternatively, agroecology, regenerative practices and indigenous knowledge are avenues that can lead to sustainable food systems and repair the relationship between people and nature,” the alliance says.\n“However, the evidence supporting these practices, although abundant, is not prioritised in government policies or budgets, due to the limited frames of traditional analysis. Scepticism ends up holding back the urgent transformation of food systems.”\nThe report is compiled from studies of agroecology practices and programmes in Kenya, Malawi and Senegal.\nThe agricultural sector is the largest contributor of Kenya’s GDP and employs the highest population.\nIn 2022, the economy is projected to stabilise at 6.0 percent supported by recovery in agriculture, industry and services sectors.\nHowever, globally it is already one of the economic sectors with the largest environmental impact.\nIn line with growing population, global demand for food and changes in dietary habits, there has been additional pressure on agricultural activities, making them unsustainable.\nGlobal Alliance for the Future of Food is calling for better practices such as efficient application of fertilisers and better manure management without causing any food shortage.\nA study of the Soil, Food and Healthy Communities (SFHC) programme in Malawi showed that the agroecological practices used by farmers have increased household food security and nutrition.\nThe report also seeks to debunk the notion that indicators used in traditional agriculture such as yield per hectare or scalability are insufficient to prove the capacity of agroecology to feed the community through sustainable food systems based on equity and not just large-scale food production.\nAnother study done in Senegal found that agroecology was as productive as conventional agriculture once soil fertility is restored.\nThe Kenyan pastoral system of leaving the grazing land to regenerate and the government's move to secure customary land tenure rights have been cited as one of the practices aimed at enhancing sustainable natural resource management.\nThe report cautions that countries will be unable to respond to the major global challenges if they do not take into account such evidence in their decision-making about the future of food and solutions.\n“Agroecology, regenerative approaches, and indigenous foodways are systemic solutions that are already delivering positive health and nutrition outcomes, a sense of purpose and dignity, social justice and climate action, across Africa and for millions of people worldwide,” says Lauren Baker, senior director of programmes at the Global Alliance for the Future of Food.\n“With this new material in hand, donors and researchers alike will be able to leverage the transformative power of agroecology, indigenous and regenerative practices and accelerate change at a time when it is needed more than ever.”\nThe report coincides with the proposal by Kenya’s Treasury in its 2022/2023 budget statement to issue Sh147 million for the Climate Smart Agricultural Productivity Project and Sh850 million to enhance drought resilience and sustainable livelihood.\nAbout Sh1.5 billion will be given for the small-scale irrigation and value addition project.\nThe food and nutrition sector will receive Sh46.7 billion in the budget.\nThe initiatives are aimed at increasing agricultural productivity and enhancing resilience to climate change risks in targeted smallholder farming and pastoral communities in Kenya, and support smallholder farmers to sustainably produce and market various commodities.\n“As part of the Big Four Agenda, the government is implementing measures and interventions to achieve food and nutritional security for all Kenyans. These measures include: supporting large-scale production of staple food; expanding irrigation schemes; increasing access to agricultural inputs; and supporting small-holder farmers to sustainably produce and market commodities,” Treasury Cabinet Secretary Ukur Yatani said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/data-hub/new-report-makes-a-case-for-sustainable-farming-3781368"}
{"doc_id": "05d52b6101741d051882a5e922525a64", "text": "The Executive Board of the International Monetary Board (IMF) has completed the third review of Guinea’s performance under programmes supported by the Extended Credit Facility (ECF).\nA report of the executive board on Monday in Abidjan said it also approved the immediate disbursement of 28.2 million dollars to Guinea.\nAccording to the report, the latest approval brings the total disbursement to Guinea under the ECF arrangement to about 112.8 million dollars.\nThe report said that Guinea’s economy went through a difficult period in 2013 due to the fragile socio-political situation and a sharp slowdown in investment in the mining sector.\n“As a result, growth is estimated to have slowed to 2.5 per cent, sharply below the programmed 4.5 per cent expansion. Inflation fell to 10.5 per cent at the end of 2013, international reserves were maintained at a satisfactory level, and the exchange rate remained broadly stable,’’ it said.\nThe report further said that Guinea’s performance under the ECF facility was satisfactory in spite of the shortfall in government revenue and increase in energy subsidy.\n“Strong adjustment measures have kept the fiscal deficit on track. Guinea’s macro-economic prospects for 2014 remain positive. Real GDP growth has tendency to rebound to 4.5 per cent, also assuming a gradual acceleration of investment in the mining sector,’’ the report said.\nIt said that Inflation is projected to further decline to 8.5 per cent, adding that fiscal targets should include increase in public investment and external assistance.\nIt called on the authorities to focus structural reforms on public financial management, civil service reform, the mining sector, the business climate, agriculture and the electricity sector.\nNAN", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/africa/article/imf-approves-disbursement-of-28-million-to-guinea/"}
{"doc_id": "b3cb873a22ff634b952d60fda047816b", "text": "The observations of the Public Protector's state capture report are full of statements like laws “may” have been broken in regard to the Gupta family’s influence on Cabinet appointments, state-owned entities’ boards and tenders. Thuli Madonsela’s key recommendation is that a judicial commission of inquiry be appointed. It doesn’t sound like much, but she recommends the inquiry have more independence than those in the past. By GREG NICOLSON.\nIn her final report as Public Protector, “State of Capture”, former Public Protector Thuli Madonsela highlighted an issue she had constantly raised throughout her term: money.\n“The investigation has proven that the extent of issues it needs to traverse and resources necessary to execute it is incapable of being executed fully by the Public Protector,” writes Madonsela. She didn’t have enough money to investigate all of the allegations involving the Guptas’ influence over the state within a short time.\nThe report was released on Wednesday after President Jacob Zuma withdrew his interdict application in the North Gauteng High Court to prevent the report’s release. Thousands of people marched outside the court demanding that Zuma resign.\nA lack of time and money is probably why Madonsela’s observations suggest violations of the law, rather than stating findings that the law was broken. It’s also why the key recommendation is, in fact, a President Zuma go-to: a commission of inquiry.\nBut Madonsela’s idea of an inquiry differs from the president’s usual process. Essentially, her report ensures, barring a review, that someone will do the investigation she had hoped to do all along.\nShe recommended that the president appoint a commission headed by a judge chosen solely by Chief Justice Mogoeng Mogoeng and adequately funded by Treasury. The judge can appoint the commission’s staff and the inquiry would have powers of evidence collection equal to those of the Public Protector. The inquiry should complete its work and present its report to the president within 180 days, around May 2017.\nIn her summary, Madonsela worked through each of the key allegations, laid by three complainants and merged into one investigation. All of the dodgy media reports about the Guptas and Zuma, his Cabinet and SOEs’ preference for them, was what she was investigating.\n“It is worrying that the Gupta family was aware or may have been aware that Minister (Nhlanhla) Nene was removed six weeks after Deputy Minister (Mcebisi) Jonas advised him that he had been allegedly offered a job by the Gupta family in exchange for extending favours to their family business,” reads the report. “Equally worrying is that Minister (Des) Van Rooyen who replaced Minister Nene can be placed at the Saxonwold area (where the Guptas live) on at least seven occasions including on the day before he was announced as minister. This looks anomalous given that at the time he was a Member of Parliament based in Cape Town.”\nIf the Guptas knew of the intended appointment it would violate the Executive Ethics Code.\nMadonsela said the state’s failure to verify allegations by Jonas that the Guptas said the position of finance minister would require him to extend them favours “may infringe” on the Combating of Corrupt Activities Act “which places a duty on persons in positions of authority who knows or ought reasonably to have known or suspected that any other person has committed an offence under the Act must report such knowledge or suspicion or cause such knowledge or suspicion to be reported to any police official”. No action was taken on Vytjie Mentor’s allegations that she was offered a Cabinet post by the Guptas, which could be a violation of the Constitution.\nThe report goes into detail on Eskom’s dealings with the Guptas. Madonsela said it’s a “source of concern that nothing seems to have been done” regarding Eskom chair Brian Molefe’s “alleged cozy relationship” with the family, which is backed by evidence. The Eskom board apparently was appointed improperly, she said, and little was done to deal with perceived biases.\nThe report said Mineral Resources Minister Mosebenzi Zwane’s trip to Switzerland, where the Gupta family was negotiating to buy a mine from Glencore, its Optimum Coal Holdings, might have been irregular. Eskom’s decision to award contracts to Tegeta, a Gupta-owned company, was also a possible breach of law.\n“In light of the extensive financial analysis conducted, it appears that the sole purpose of awarding contracts to Tegeta to supply Arnot Power Station was made solely for the purposes of funding Tegeta and enabling Tegeta to purchase all shares in (Optimum Coal Holdings). The only entity which appears to have benefited from Eskom’s decisions with regards to OCM/OCH was Tegeta which appears to have been enabled to purchase all shares held in OCH,” the report reads. “The favourable payment terms given to Tegeta (seven days) need to be examined further. OCM clearly had 30 day payment terms with Tegeta for the supply of coal to Arnot Power Station, and Eskom appears to have been aware of this. It also appears that Tegeta did not meet all its obligations to OCM as OCM was owed R148,027,783.91 by Tegeta as at 31 July 2016 and an amount of R289,842,376.00 as at 31 August 2016.”\nEskom’s R600-million prepayment to Tegeta might also violate the law and the company’s public explanations could constitute fraud. Eskom’s actions, which led to Glencore selling the Optimum mine to the Guptas, “severely prejudiced” Glencore, Madonsela found. “It appears that the conduct of Eskom was solely to the benefit of Tegeta,” she said.\nRegarding the large South African banks’ decision to refuse the Guptas as clients, Madonsela said Cabinet appeared to have taken “an extraordinary and unprecedented step regarding intervention into what appears to be a dispute between a private company co owned by the President’s friends and his son”. The conflict of interest should be looked at, the report continued. It also found possible violations of the law in regards to the Guptas’ new bank, Bank of Baroda.\nIn a statement on Wednesday, the Presidency said Zuma will consider the report “in order to ascertain whether it should be a subject of a court challenge”. While ruling on the Public Protector’s Nkandla report the Constitutional Court said if there’s disagreement with the office’s findings, they should be taken on judicial review.\nIf Madonsela’s recommendations, however, are implemented, “state capture” won’t go away. Her report will be the beginning of a public process expanding on what we already know. DM\nPhoto: Former Public Prosecutor Thuli Madonsela (Photo: Sobantu Mzwakali)", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2016-11-02-state-of-capture-report-passing-thuli-madonselas-legacy-to-the-future/"}
{"doc_id": "02a2112963e1cad3be239268b61b7a02", "text": "Kenya Airways will be split into various subsidiaries in a State-backed restructuring plan that is aimed at returning the lossmaking national carrier to profitability.\nRoads, Transport and Public Works Cabinet Secretary nominee Kipchumba Murkomen told a parliamentary vetting panel Wednesday that the reforms will lead to the breaking of Kenya Airways along its main business lines of cargo and passenger.\nIts other subsidiaries envisaged by the new administration are charter services and new businesses like drone services.\nMr Murkomen said President William Ruto was working with Kenya Airways and other players to restructure the airline and return it to profitability.\nThe fresh restructuring plan comes after the State dropped the favoured long-term solution that was anchored on nationalisation of the airline.\nThe plan approved by lawmakers in July 2019 would have led to the delisting of the airline from the Nairobi Securities Exchange (NSE).\nThe national carrier has received multi-billion shilling State bailouts amid delayed recovery from a travel slump following Covid-19.\nMr Murkomen told MPs that Nairobi is the leading cargo destination in the region yet KQ, as it is known by its international code, controls only 10 percent of cargo market share.\n“We need to separate cargo from passenger services so that KQ benefits from the business,” Mr Murkomen said.\n“We intend to create subsidiaries in KQ. We need to have a passenger airline, cargo airline and charter airline. We might also need KQ to have other businesses on the side like drone services and surveying services as one way of raising revenue,” he added.\nHe did not offer details how the breakup of KQ will help turn around the carrier that has been in losses for over a decade. KQ’s main business lines—cargo, passenger and handling—are all in losses. Passenger service returned an operating loss of Sh4.5 billion, cargo Sh1.74 billion and handling Sh166 million.\nThis marks a departure from the Treasury’s earlier position to pursue a turnaround under the plan to nationalise KQ. A law to pave the way for the nationalisation of the airline, which had been proposed before the pandemic, is before Parliament.\nKenya wanted to emulate countries like Ethiopia which run air transport assets — from airports to fuelling operations —under a single company, using funds from the more profitable parts to support others.\nAlso read: How Ethiopian-Nigeria Air deal will hit Kenya Airways\nUnder the model approved by MPs, KQ would become one of four subsidiaries in an aviation holding company.\nThe others would be Jomo Kenyatta International Airport, an aviation college and the Kenya Airports Authority operating all other airports.\nThe previous administration, which was replaced by Dr Ruto’s on September 13, pushed for the restructuring of the carrier on the back of the multi-billion shilling bailout after dropping the nationalisation plan.\nMr Murkomen Wednesday told Parliament that the State would not convert its debts or bailout cash into shares. “We do not want to cross the 50 percent shareholding because we want KQ to remain a privately owned company,” he said. The government owns 48.9 percent of KQ shares.\n“We have to ask ourselves why KQ is in the situation it is currently. It is because of mismanagement of project Mawingu, but there is a restructuring process currently underway led by President Ruto,” he said.\nRead: Kenya Airways takes new Sh11bn short term loans\nKQ recorded a ninth consecutive half-year loss, sinking it Sh15 billion deeper into a negative equity position.\nThe airline, which has been surviving on State bailouts since the Covid-19 pandemic, reported a Sh9.8 billion loss in August — a better performance than the Sh11.48 billion loss it recorded in the same period a year earlier.\nIt booked a further Sh5.3 billion loss on hedged foreign exchange differences, driving its total comprehensive loss to Sh14.9 billion.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/ruto-wants-kenya-airways-split-after-collapse-of-state-takeover-3991208"}
{"doc_id": "3000337441478013c6a444ee392b921c", "text": "The South African Reserve Bank (SARB) and the People’s Bank of China (PBoC) have announce the signing of a Memorandum of Understanding (MoU) for the purposes of clearing and settlement of Renminbi in South Africa.\nRenminbi is the official name of the Communist People’s Republic of China and means “the people’s currency” while the Yuan is the name of a unit of the Renminbi currency.\nBoth central banks have agreed to coordinate and cooperate on the supervision, oversight and clearing of Renminbi in South Africa, “and also to exchange information in order to facilitate the continuous improvement and development of bi-lateral trade,” a statement released by the SA Reserve Bank said.\n“The MoU signifies another important milestone reached in the continuous joint effort to build capabilities in the South African financial markets to better serve bilateral trade, investment and financial flows between China and South Africa,” the statement said.\n“China has become South Africa’s largest export partner and consequently, Renminbi clearing in South Africa will be immensely valuable as corporates will benefit greatly from trading and settling in Renminbi.”\nThe department said that opening a clearing centre in the country should boost trading in the Rand/Renminbi, which could make it easier and cheaper to trade in goods and services with China.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/92570/south-africa-and-china-in-currency-clearing-deal/"}
{"doc_id": "85aa909ab78f8a5e9f15e4791e7d8056", "text": "estimated\n12 Jun 2023\nNigeria, with an estimated population of about 200 million people, celebrates 22 years of returning to democratic rule on what is now known as Democracy Day today June 12. GuardianTV takes a look at how far and how well the Nigerian democracy has come after 22 years.\nLatest\n28 mins ago\nAides to the late Russian opposition leader Alexei Navalny say Moscow has set an ultimatum for his mother to agree to a secret funeral. Russian authorities have threatened to bury him in the penal colony where he died. Vladimir Ashurkov, Executive Director of the Anti-Corruption Foundation, and close friend of Alexei Navalny talked to DW about the circumstances of Navalny’s life and death.\n29 mins ago\nRussian President Vladimir Putin needs to ensure his country remains in a permanent state of war. That's the premise of a new book, published by a French political scientist as the world has been marking the second anniversary of Russia's full-scale invasion of Ukraine.\n29 mins ago\nRussian President Vladimir Putin has claimed that Western weapons deliveries to Ukraine have ended up in the hands of Hamas and other terror groups in the Middle East. Russian television has been quick to exploit the Israel-Hamas conflict for propaganda purposes.\n1 hour ago\nWhy \"Gone with the Wind\" made movie history, \"Asphalt Cowboy\" exorcised prudery from Hollywood and Bong Joon-ho's \"Parasite\" catapulted the Oscars into the 21st century. Arts Unveiled journeys through nine decades of the Academy Awards.\n1 hour ago\nProtesters in Argentina have demanded that President Javier Milei scrap the reforms, arguing that they will only benefit the wealthy. The reform bill contains hundreds of articles including privatization and cutting state subsidies.\n2 hours ago\nSince February 24, 2022, Russia's full-scale invasion has had a huge impact on Ukraine, but also the European Union. To tackle inflation and other economic consequences, the EU has taken measures to try to shield its inhabitants from the cost-of-living crisis. We take a closer look.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/estimated/"}
{"doc_id": "a791f4d2704c368d566ff6baf6edfe8c", "text": "Obinna Chima\nDutch textile and design company, Vlisco Group on Tuesday held a high-level discussion with the Minister of Finance, Mrs. Kemi Adeosun, over the former’s proposed investment in the Nigerian cotton textile industry.\nThe Chief Executive Officer of Vlisco Group, Mr. David Suddens, who led the group’s delegation to the meeting with the minister, said the investment would boost growth and jobs in Nigeria across the entire value-chain from cotton to fashion.\nThe Group plan to invest across the sector’s value chain from sourcing of cotton, textile printing, wholesale, retail and e-commerce distribution, garment manufacturing and supporting and training of Nigerian fashion designers.\nSuddens said: “Vlisco foresees an end-to-end involvement in the Nigerian textile industry from cotton sourcing to retail. We are expecting this investment to yield benefits for the Nigerian economy in terms of economic diversification and job creation in line with the country’s Industrial Revolution strategy.\n“Vlisco Group’s activities are expected to generate more than 10,000 jobs in Nigeria in the medium term. We also envisage a Vlisco printing factory in Nigeria using Nigerian designs for the Nigerian consumer, retail outlets selling Vlisco products and trained tailors sewing Vlisco fabric into garmet.â€\nSuddens further noted that the group had formed partnership with two spinning and weaving companies based in China and Pakistan in order to help build the Nigerian cotton textile industry.\n“The two partners are very serious industrialists with first-class operations in their own countries. Both are prepared to move quickly if Vlisco guarantees the purchase of their output, and if agreement can be reached on the details of the Nigerian operation,†a statement further quoted him to have said.\nThe two partners, according to him, would be expected to start operations with a weaving mill of between 120 and 140 looms, with each mill producing approximately 12 to 15 million metres of cotton fabric annually.\n“Once success is established, both partners will integrate backwards into spinning. The first spinning mills will be for 25,000 spindles, producing yarn for approximately 20 million metres of fabric.\n“These mills will then be doubled in size to 50,000 spindles and the weaving mills will also be doubled to 240-280 looms for each factory,†the foreign investor explained.\nAdeosun, who expressed delight at Vlisco’s proposed investment in the cotton textile industry, said the federal hovernment was committed to the revitalisation of the industry.\nShe disclosed that the government would stimulate and support sustainable value addition along the entire cotton, textile and garment sub-sector in order to create jobs and wealth for Nigerians and enable technology transfer.\nShe urged the investor to take advantage of the Nigerian Government’s incentives for the cotton, textile and garment sub-sector to expand its brand portfolio in Nigeria.\nThe Vlisco Group designs, produces and distributes fashion fabrics for the West and Central African market and African consumers in global metropolitan cities.\nFounded in Helmond, the Netherlands, in 1846, the Vlisco Group and their fabrics have grown into an essential part of African culture, receiving widespread attention from the art, design and fashion worlds.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com:443/index.php/2017/11/15/adeosun-foreign-investor-hold-talks-on-textile-industry"}
{"doc_id": "1ce2209751930110927421f9415ed1fa", "text": "Dr. Bosun Tijani\n20 Feb\nThe Federal Government has unveiled a new initiative targeted at connecting the entire country with Internet facilities.\n24 Jan\nWith some months away from Nigeria’s 70 per cent broadband penetration target set for 2025, about 31 states remain unserved and underserved, a consequence of a sluggish investment in fibre optic cable deployment .\n3 Jan\nRemarkably, the information and communications technology sector has remained a major pillar of Nigeria’s economy, contributing significantly to the country’s gross domestic product (GDP).\n8 Nov\n•Tijani seeks more investments in fibre optic cables to boost telephony services • Minister seeks Nigeria’s participation in global AI revolution For improved quality of telephony services across the country, Nigeria needs fresh investments in fibre optics cables of about 95,000km. The Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, stated this on…\n27 Oct\nMinister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, has said that Nigeria has become Africa’s top destination for tech startups\n24 Oct\nThe Federal Government, through the Ministry of Communications, Innovation and Digital Economy, has sealed a N1 billion deal with IHS Towers to build learning communities across the federation for the 3 Million Technical Talent (3MTT) programme\n13 Oct\n.To explore hardware opportunities at Aba industrial cluster .Promises regulations won’t stifle service providers The Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, has said that the full implementation of the Ministry’s blueprint recently released, should see Nigeria become a net exporter of technology in another four years. Tijani said everything is being…\n10 Oct\n•Tells DMBs services not free, asks telcos to be more innovative •Operators lament fall in CAPEX, foreign direct investments The Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, has sought the understanding of Deposit Money Banks (DMBs) in resolving the N120 billion Unstructured Supplementary Service Data (USSD) debt impasse. Tijani stated this when…\n4 Oct\n• Ministry eyes 500% rise in broadband investment The Ministry of Communications, Innovation and Digital Economy is considering enacting the National Digital Economy Law, which is expected to see a drastic reduction in paper-based processes in the country in two years. According to the ministry, the National Digital Economy Bill will be designed as an…\n4 Oct\nThe Cloud Network Foundation (CNF), a non-government organisation (NGO) devoted to the growth, development and emergence of telecommunications and ICT as the chief driver of the economy has congratulated Dr Bosun Tijani on his appointment as the minister in charge of the newly re-designated Ministry of Communications, Innovation and Digital Economy. The foundation, while welcoming…\n4 Oct\nThe Federal Government has said it will work to ensure that the telecommunications sector sees 15 per cent yearly increase in investment flow into the industry. The Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, made this known in his ministry’s draft strategic blueprint for the next four years. Recall that foreign direct…\n16 Aug 2023\nSir: President Bola Tinubu is indeed a product of gifted insults! Tinubu is providentially and undoubtedly fulfilling the envisioned progressive agendas of the late Chief MKO Abiola and Chief Obafemi Awolowo.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/dr-bosun-tijani/"}
{"doc_id": "45190dda69a568b17d21c08a9cf9cb5d", "text": "Omololu Ogunmade\nPresident Muhammadu Buhari saturday paid tribute to Nigeria’s late foremost social critic and selfless legal luminary, Chief Gani Fawehinmi, on today’s occasion of his posthumous 80th birthday, describing the late legal icon “as a true conscience of the nation, defender of democracy and people’s rights advocate.â€\nIn a statement, Senior Special Assistant to the President on Media and Publicity, Malam Garba Shehu, said as the world posthumously marks the 80th birthday of Fawehinmi today, the president fondly remembers Gani, whom he described as the legendary patriot for his altruistic services to the nation, which he said continued to be sorely missed.\nHe added: ‘The late Senior Advocate of the Masses was not an arm chair-critic, nor a rabble rouser who fomented trouble for its sake; but a serious minded, articulate, cerebral and compassionate promoter of fundamental human rights, social justice, equity, fair play and national development.\n“Gani was an extraordinary human being and a great reference for all progressive elements in society. He dared death and incarceration and was forced into prison 40 times without bowing to intimidation and molestation. He fought for and stood by democracy with every ounce of his blood and immense intellect. He deserves a lingering respect,†the president was quoted as saying.\nThe statement also said Buhari admonished Nigerians, young and old, to imbibe the good deeds of the Ondo State born, detribalised, learned man and Muslim leader (the Seriki Musulimi of Ondo town), “for his doggedness, incorruptibility and fervent belief in the unity and progress of Nigeria as an entity.â€\nIt also said the president noted that Fawehinmi who would have been 80 years old today, would never be forgotten as a committed pace setter and pathfinder for the democracy that is practised today.\n“The president therefore urges contemporary civil rights activists and human rights advocates in the country to emulate the late icon, through constructive criticism and useful suggestions as partners in the pursuit of national peace, unity and development,†the statement added.\nMeanwhile, the Lagos State Government is to unveil today a new statue of Fawehinmi, SAN sited at the beautiful park in Ojota which is named after the late legal luminary and human rights advocate.\nState Governor, Mr. Akinwunmi Ambode, with members of the Fawehinmi family, leading voices in human rights and other dignitaries across the state, will unveil the edifying statue in commemoration of the late activist’s 80th posthumous birthday.\nCommissioner for Tourism, Arts and Culture, Mr. Steve Ayorinde in a statement, said the remodelling of the magnificent Gani Fawehinmi statue was part of the State’s strategy to enhance the aesthetic beauty of open public spaces and parks across the state and to celebrate and immortalise worthy icons that contributed immensely to the development of Lagos State.\nAccording to the Commissioner, the new statue was also informed by the desire of Lagos State government to project and entrench the enduring legacy of the country’s foremost human right lawyer, activist, philanthropist and one of the icons of pro-democracy movement in Nigeria.\nThe 34-feet high statue will serve as one of the many iconic edifices that highlight the Akinwunmi Ambode-led administration’s quest to transform the landscape of the state with artistic aesthetics, while also signposting the belief in giving honour to whom honour is due.\nThe commissioner quoted Governor Ambode as saying that the relevance of Gani’s struggle for transparent and responsive governance remains the pillar of our progressive leadership in Lagos State in particular and Nigeria in general.\nSunday’s unveiling is expected to be witnessed by members of Gani’s family, friends, protégés and loyalists that have sustained the legacy of the late legal icon by keeping the flag of human rights advocacy, fairness and justice flying.\nThe Commissioner added that adequate security measures and traffic control have been put in place to ensure that the two-hour ceremony is orderly and befitting of Gani Fawehinmi’s legacy.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2018/04/22/buhari-eulogises-gani-on-80th-posthumous-birthday-as-lagos-unveils-new-statue-sunday"}
{"doc_id": "fd8b2068f6df3d0a3cfe46aaa77a78e7", "text": "President Uhuru Kenyatta has created the Nairobi Metropolitan Services (NMS) office headed by Major General Mohamed Badi (pictured) of the Kenya Air Force.\nThe new Director-General will be deputised by Enosh Momanyi, whose term begins today, March 18.\nThe NMS is now in charge of some functions of the Nairobi County which have been transferred to the National Government.\nUhuru asked the general to end the rampant corruption in the county and cartels who run important functions, rendering slow growth in the county.\n“I have tasked the Nairobi Metropolitan Services to bring an end to the corruption and dismantle the cartels that have slowed growth in the county,” the president said.\nUhuru also pledged full support from the government towards achieving this goal.\nThe two have also been tasked with streamlining urban renewal projects, for example, those along Jevanjee and Pangani areas in Nairobi.\nThe president was speaking during the official hand-over of some functions of the County Government to the National Government at State House, Nairobi.\nHe said that the biggest problem the county faced were corruption and cartels.\n“In recent weeks, we have witnessed a lot of uncollected garbage in some streets in the CBD. These cartels either controlling water supply or issuance of permits have made service delivery almost impossible,” he said.\n“Forty per cent of the country’s GDP is produced in Nairobi, hence for the county to continue as such, it is paramount that services are provided timely,” Uhuru added.\nIt was at the State House function that Nairobi Governor Mike Sonko officially transferred some functions of the county to the National Government, 21 days after the execution of the deal on February 25.\nStay informed. Subscribe to our newsletter\nKenya Revenue Authority (KRA) will now oversee revenue collection in the county while the Public Service Board takes over the county’s affairs.\nThe transferred services include Health, Transport, Planning and Development, and Public Works.\nThe signing was witnessed by Nairobi Senator Johnson Sakaja, County Speaker Beatrice Elachi, Devolution CS Eugene Wamalwa, Senate Speaker Kenneth Lusaka. Attorney-General Paul Kihara read out the contents of the deed.\nThe decision by Sonko to surrender key county functions to the national government last month was considered the least disruptive of the options available to address the leadership crisis at City Hall.\nThis means the county will surrender substantial revenues generated by these key dockets as well as forego billions of shillings allocated from the county’s share of national revenue as corresponding resources must be taken back to the national government- which essentially leaves the governor with a shell.\nArticle 187 of the Constitution provides that a function or power of government at one level may be transferred to a higher level of government.\nSonko signed away the city’s devolved functions to the national government, effectively losing his grip on his chaotic reign at City Hall.\nState House described the decision as a breakthrough that will ensure Nairobi residents receive services efficiently.?", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001364748/take-over-uhuru-creates-nairobi-metropolitan-services-office"}
{"doc_id": "7c9b6717d1b91c7d8e67333d0c4f5907", "text": "Oshiomhole urges Labour to revisit management of Contributory Pension funds\nSenator Adams Oshiomhole has called on organised Labour to revisit the management of the Contributory Pension Funds.\nOshiomhole said this at the 8th Quadrennial National Delegates Conference of the Academic Staff Union of Educational and Associated Institutions (NASU) on Tuesday in Abuja.\nThe theme of the conference was “Trade Unionism in the Era of Economic Crisis: Addressing the Increasing Poverty Level of Nigerian Workers”.\nThe former Governor of Edo State alleged that Federal and State Governments were borrowing from the contributory pension funds at a low interest rate, thereby breaching the concept of establishing the contributory pension scheme.\nAccording to him, “I know I resisted the idea of contributory pension to be managed by Pension Fund Administrators (PFAs), when I was the NLC president.\n“These PFAs are profit seekers. You cannot give me 6 per cent return on my pension savings at an interest rate of 25 per cent.\n“This is unfair. It means the worker is getting poorer. You must not accept that because you are the greatest contributors to the economy.\n“Today, the pension scheme is over N11 trillion deducted and ought to go into mortgage investments for workers who had retired.\n“If the N11 trillion is put into mass housing, workers, upon their retirement, would not be homeless.\n“I want to urge you all to revisit these monies that PENCOM is managing, who is borrowing and what are they doing with the money,” he said.\nHe added that the scheme was supposed to address workers social capital needs.\nOshiomhole also condemned the recent brutalisation of the NLC President, Joe Ajaero.\nHe, however, faulted the nationwide strike which temporarily grounded social and economic activities in the country for two days.\n“Often times, Iabour leaders seek implementation of their demands from governments with biased positions that are not well articulated, giving the government officials upper hand in their negotiations.\nHe said the labour movement must always approach issues in a united front, even though the capitalists will always find ways to break or fragment them.\nOn the fuel subsidy policy of the government, Oshiomhole urged workers not to lament their sorry situation but to put on their thinking cap and wriggle out of the dire situation.\nHe said rather than spend time agonising over government policies that are not working in their favour, they should engage as a united front to press home their demands to those in authority.\nGet the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/news/oshiomhole-urges-labour-to-revisit-management-of-contributory-pension-funds/"}
{"doc_id": "dec714d8fef836e34747841dfc431a28", "text": "Johannesburg - Cell C had raised $530 million (about R4.2 billion) to expand its network through a project finance deal arranged by US-based investment bank Citigroup, Paul Doany, a director of the mobile operator, said yesterday.\nIncluded in the deal was a $100 million facility for Cell C's black empowerment partner, CellSAf, making it one of the largest empowerment funding deals in the telecoms sector, Doany said.\nCell C is wholly owned by 3C Telecommunications, which is 60 percent owned by Oger Telecom South Africa, a division of Saudi Oger, and 40 percent by CellSAf.\nThe facility will be used by CellSAf to pay for its equity which, Doany said, was in excess of government's requirement of 30 percent black economic empowerment for the telecoms sector.\nCell C has 1.4 million active subscribers since its official launch in November 2001, 1 400 staff and 6 500 distribution points.\nThe funds would be used to roll out the network, meet its working capital and capital expenditure needs, and cover the costs of acquiring new subscribers, Doany said.\nSebastian Paredes, the chief executive of Citigroup in sub-Saharan Africa, said the money was raised through a mix of equity and debt.\n\"This is a landmark transaction for South Africa both in terms of its size and participation. The fact that the deal was successfully completed at a time when global markets were slow, provides evidence of the strength of the project and the South African borrowers.\" he said.\nIt included a nine-year senior debt facility of $252 million (one of the longest terms yet achieved in the region), a $178 million subordinated facility and the $100 million facility for CellSAf.\nThe financing included $165 million in export credit agency facilities from foreign trade insurance funds Hermes of Germany and Sace of Italy, which meant it was the first project finance deal in South Africa to carry commercial and political risk cover from both agencies, Paredes said.\n\"A further $50 million was provided by the Development Bank of Southern Africa and the Industrial Development Corporation, marking the first time these two governmental agencies have jointly supported a telecoms transaction in sub-Saharan Africa,\" Paredes said.\nThe financing was supported by Siemens and was partially used to redeem an existing dual currency bridging advance of $270 million the firm had made to Cell C. Nine institutions participated in the financing of the Cell C deal, including local players Absa, Investec and Nedbank.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/cell-c-raises-530m-through-citigroup-770153"}
{"doc_id": "ed55ddfe2e03e95000bfc68943a0d220", "text": "Bitcoin plunged more than 20 percent to fall below $6,000 on Tuesday, its latest sharp loss following a series of setbacks, with a global stock market collapse fuelling the selling.\nThe virtual currency fell to $5,992 for the first time since mid-November, according to Bloomberg News, the latest hammering for the cryptocurrency that saw a stratospheric 26-fold rise last year.\nTuesday’s collapse comes just six weeks after bitcoin hit a record high of $19,511, fuelled by a flood of speculators looking to make a quick buck.\nSince those heady days the cryptomarket — which includes dozens of other units — has been pounded by news of crackdowns by governments including in China, Russia and South Korea, one of the biggest markets for the sector.\nOn Thursday, India said it would “take all measures to eliminate” cryptocurrencies’ use as part of a payment system and in funding illegitimate activities, while Japanese authorities raided a virtual currency exchange after it lost $530 million to hackers.\nCentral banks in Europe, Japan and the United States have also flagged concerns about the unit. This week several commercial lenders said they would stop allowing their customers to buy bitcoin through their credit cards owing to debt concerns.\nStephen Innes, head of trading for Asia Pacific at Oanda, said “the dynamics behind the moves are regulatory clampdowns and investors losing confidence in crypto”.\nThe sell-off on Tuesday was exacerbated by crushing losses on world stock markets, with the Dow on Wall Street suffering its biggest one-day points loss and wiping out all its 2018 gains.\nPanicked investors are fretting over rising US borrowing costs, leading them to cash in profits after a stellar couple of months that have seen many indexes hit record or all-time highs.\nEquities have enjoyed months of surges fuelled by optimism over the US economy, corporate earnings and the global outlook.\nBut while traders have been piling into equities, pushing many global indexes to record or multi-year highs, there has been growing concern on trading floors about elevated US Treasury bond yields — at four-year highs — and the likelihood of fresh Federal Reserve interest rate rises.\n“The risk-off tone is hitting Bitcoin almost as hard as a global regulator and bank scrutiny,” said Greg McKenna, chief market strategist at AxiTrader. “The latest dent to the Cryptospace has been banks saying they are shutting down the ability of clients to buy bitcoin with their cards.”\n“This could end up a full round trip back into the $1,850/$2,966 region.” DM", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2018-02-06-bitcoin-drops-below-6000-for-first-time-in-three-months/"}
{"doc_id": "6e06965209bb10d7239ecf1e7c5d1ec5", "text": "Geoffrey Odundo is exiting the Nairobi Securities Exchange (NSE) after nine years at the corner office, at a time when the bourse is facing one of its worst capital outflows as investors exit to take their money back to the US and UK. Its lowest moment was when it was ranked as the worst-performing African bourse in the first nine months of last year in dollar returns, highlighting the impact of foreign exits and global shocks on East Africa’s biggest stock market.\nMr Odundo sat down with the Business Daily to explain what is ailing the NSE and what it will take to bounce back.\nWhat is ailing the NSE and do you see it performing any better in 2024 given its rocky start?\nSo what has happened is that with the rising interest rates in developing markets, the allocation to frontier markets has declined, almost nil. So we have lost an international investor in this market, the capital has left us and moved to the US and UK because the bonds there are providing better returns.\nWe have rising interest rates in Kenya, today the 91-day treasury bill is offering 18 percent so investors are saying let me go for a quick return instead of a slow return in the equity markets, again local investors are not active in the market. Two of our main sources of capital are not there. We are relying on a few retail investors and that has led to price devaluation over time. That valuation has been unattractive for investors to come in thus the market's valuation has gone down.\nPeople’s purchasing powers have gone down due to the rising inflation. The macroeconomic effects have been a big factor.\nIs there an end to this?\nAs a country, the IMF has gone back to a funding programme with us albeit the fact that it has got conditions. But the fact that the IMF has ranked us favourably based on certain things we are doing means that it opens doors for other lenders to come to Kenya. The IMF endorses you, it’s a like a cousin you rely on heavily for decisions, so we do expect more lending into the country and what that will do is turn down interest rates. Once interest rates start coming down, exchange rates start coming down then the markets will rebound.\nAlso, investors have started to see that the market is so cheap, for instance, today you can buy a share in this market at an average multiple of less than five, it’s incredible. Markets should trade in multiples of ten and above. People are placing bets and saying let’s start going in slowly. So we have started seeing turnovers, last year we were doing 40 to 60 million a day, no we are doing 120/140.\nJust how much is Kenya’s market connected to the global markets?\nWe are taking a position where, as Kenya, we are not a market that is just isolated in Africa, but we are a global market. The Nairobi Securities Exchange and some of its constituent companies are members of the international indices like we are members of the Morgan Stanley markets index that ranks markets according to their positioning and criteria that is required, for instance, market capitalization, liquidity and several products on offer. So Kenya is in that frontier market index, and among the few markets that are ranked globally.\nBeing a global market you get capital from investors, and when they want to invest they look at the indices and gauge how for instance, Kenya is performing in the frontier markets, I will give them this percentage and if the market is not performing well, I reduce my allocation.\nWhere are we with the listings that President William Ruto promised when his administration took over?\nThe critical part that had to be opened was the privatization bill, which has been reformed and now we have a privatization bill and there is going to be a privatization authority. That was the big hurdle, the reason is there were very many steps before you sell even a single share of the government.\nRecently the government identified the companies to be listed and that was a big discourse and it is also in place. However, there is a court issue and the matter was taken to court on certain grounds so the privatization process has sort of halted from the government’s side. Until that’s unlocked, we cannot expect the government program to proceed.\nBut then you are introducing the Sh100 monthly charge on stock market accounts despite the opposition.\nI think we did not possibly engage the stockholders more and there was a very big reaction to that, so it was not implemented. So maintaining an account is free notwithstanding the company still incurs costs of software and management, and that’s a matter that has been shelved for now.\nMore than 5 years and Kenya Airways remains suspended, isn’t this unfair to its investors considering the exchange still has firms that have no revenue but are still trading?\nWhenever there’s a material issue affecting a company, we have to engage the company on what the plans are, because one of the roles we have at the capital markets is to ensure sound trading and protection of shareholders’ rights. One of the ways to protect shareholder rights, and one of the ways to protect a shareholder’s rights is to ensure that if something is going on in a company we have to suspend the share to give the company time to realise whatever they are trying to do. We were approached by KQ then that they were undertaking some strategic changes in the company that would require their suspension, to avoid providing risks to shareholders. The risk you have when there are certain changes ongoing in a company and you let the shares trade, you expose it to investor risk.\nNow that you are exiting, NSE CEO what are the succession plans?\nI have been in this role for 9 years, my term comes to an end at the end of February, it’s been an exciting journey. The NSE has a very clear succession process, it doesn’t start at the end of the term it starts a long time before that and that’s been going on. The exchange is very well institutionalized, it’s not a case of it’s the CEO that carries everything, no. We have very good structures and a strong support team.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/boss-talk/geoffrey-odundo-exits-nse-as-it-battles-its-worst-market-rout--4511358"}
{"doc_id": "0c386e1667cd1c9696b882e23c43f5a0", "text": "All banks met the minimum regulatory liquidity ratio (LR) of 30 percent at end-June 2013, according to the Central Bank of Nigeria (CBN). The industry liquidity ratio at the end of June 2013, stood at 67.8 percent, compared with 62.7 percent at end-June 2012.\nConsequently, the industry ratio of non-performing loans (NPLs) to total loans at end-June 2013, stood at 3.7 percent, compared with 4.3 percent at end-June 2012. This was within the maximum threshold of 5 percent set by the CBN. The reduction in the NPL ratio was attributed to the intervention of Asset Management Corporation of Nigeria (AMCON) in the industry and improved risk management practices by deposit money banks (DMBs).\nThe CBN’s 2013 half year Economic Report revealed that the health of banks in the system further improved in the first half of 2013. All the banks, with the exception of one, met the regulatory minimum capital adequacy ratio (CAR) of 10 percent in the first half of 2013. The affected bank had commenced a private placement of new shares aimed at raising N20 billion fresh capital and an additional capital injection of N20 billion from a core investor. Overall, the average CAR in the industry was 19.1 percent, compared with 8 and 17.7 percent minimum international standard and the level at the end of the corresponding period of 2012, respectively.\nHowever, the report shows that the total credit to the priority sectors of the economy, comprising agriculture, solid minerals, exports and manufacturing, was N3,266.2 billion at the end of the first half of 2013, accounting for 37.2 percent of the total, compared with 37.1 percent in the corresponding half of 2012. The less priority sectors (real estate, public utilities, transport and communications, finance and insurance, and government) accounted for 40.2 percent of total claims on the private sector, while the unclassified sectors accounted for the balance.\nAccording to the report, short-term maturities continued to dominate the credit market in the first half of 2013. Outstanding credits maturing within one year accounted for 57.1 percent, compared with 57.4 percent at the end of the second half of 2012. The proportion of the medium-term (≥1yr and < 3yrs) and long-term (3yrs and above) maturities stood at 19.7 and 23.2 percent, compared with 17.9 and 24.7 percent, respectively, at the end of the second half of 2012.\nSimilarly, deposits below one year constituted 96.9 percent of the total, of which 75.9 percent had maturities of less than 30 days. Long-term deposits constituted only 3.1 percent, slightly higher than the 2.6 percent recorded at the end of the second half of 2012. The near-absence of long-term deposits continued to constrain the ability of banks to create long-tenored risk assets crucial for economic development.\nThe AMCON continued to discharge its function as a multipurpose resolution vehicle empowered to purchase toxic assets from banks and inject needed funds through the issuance of appropriate securities. At the end of the first half of 2013, the Corporation had a total bond liability of N5,410.0 billion (face value), the first tranch was due on December 31, 2013.\nDuring the first half of the year, the Corporation commenced the process of divestment from Enterprise Bank, Keystone Bank and Mainstreet Bank, with the placement of a public notice in the dailies; and the engagement of a financial adviser to oversee the process of divestment from Enterprise Bank. Furthermore, a Resolution Cost Trust Fund Deed, which would replace the existing MoU on the Banking Sector Resolution Cost Sinking Fund was drawn up for execution by the CBN and DMBs during the review period. A key provision of the Deed was the increase in the annual contribution of the DMBs from 30 basis points of their total assets (per audited annual financial statements of the previous year) to 50 basis points of total assets and 33.33 percent of off-balance sheet items.\nIn addition, the Corporation proposed amendment to its enabling Act to the National Assembly, to include the Sinking Fund contribution and its management in the Act.\nBy: HOPE MOSES-ASHIKE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/banking/article/banks-npl-reduction-linked-to-amcon-improved-risk-management/"}
{"doc_id": "7bbf034246c266a55c7aa45791aa8b41", "text": "Serious question here – how come Zimbabwean startups do not pull in as much funding as their African counterparts? Is that even a fair question to ask? Let’s talk about it.\nThere are various reasons why Zimbabwean startups struggle to raise funding from international investors.\nIt may sound crazy to say that when just a week ago we were talking about Jamboo raising over $1m in just over a month. By the end, we will all understand why Jamboo stands out and why on the African continent, million dollar deals are more commonplace.\nSmall market\nThere is no getting around it, Zimbabwe is a small market. There are about 15 million of us in this teapot and that sounds like a lot until you realise that Cell C, the fourth largest mobile network operator in South Africa reports having more than 16 million subscribers.\nSo, the big gun in this country, Econet, has way less subscribers than the fourth largest in South Africa.\nConsider that most business ideas will have addressable markets much less than 15 million. We have talked a lot about Starlink but if we’re being honest, with kits costing above $600 and subscriptions close to $40, there’s probably less than 50,000 people that can afford that.\nThose are not do-whatever-it-takes-to-get-in kind of numbers. Whatever crazy gatekeeping may be going on, I would bet if we had a market the size of Nigeria’s, Starlink would have found a way by now.\nSo, when someone starts a ride-hailing business in Bulawayo for example, we’re talking really small numbers.\nBulawayo province has 666,000 people and if we’re generous and say 10% of the population would use the ride-hailing service, that’s 66,000 people. That’s not making a venture capitalist in Silicon Valley salivate.\nPoor population\nSee, those of us fortunate to be reading this sometimes find it hard to believe the level of poverty in this country.\nWe think we’re struggling but when Zimstat, the government agency, says 61% of Zimbabweans make less than Z$100,000 a month (US$13 at the time), we scream, “That’s not possible, it can’t be that bad, can it?”\nOh yes, it is that bad. So sometimes when a startup finds a problem worth solving, the business model falls apart when they realise although the people need a solution, they can’t pay what’s needed to warrant the business.\nInvestors are aware of this. In our talks with startups, we hear of how how some investors pulled out after googling Zimbabwe and realising we have a small poor market. All this after being excited by the projections pitched to them.\nCurrency stuff\nOur national currency is a disgrace. You know they say inflation is akin to taxation because it has the exact same effect – it reduces the spending power of the population.\nThe loss in value of the Zimbabwe dollar is a deterrent for would-be investors. Aren’t we a dual/multicurrency economy though?\nYes, but in practice, as our mobile network operators will tell you, you will still find yourself saddled with Z$ and wishing on the government to allow you to convert it to the USD.\nCountry profile\nWe have a reputation as a tough economy to operate in – high inflation, iffy political situation, high taxes etc.\nWe have a government that believes in Nicodemously legislating through Statutory Instruments so as to ensure the public has no chance to think of loopholes beforehand.\nThat makes it hard to plan and we have seen some businesses fold following some of those overnight statutory instruments.\nThen there is the whole sanctions issue. As much as they are targeted, the country has still lost out on potential investment as investors fear accidentally working with companies that may have a sanctioned individual as a shadow director.\nNot a death sentence\nThe above does not mean no startup can get funding in Zimbabwe. It just means it is much harder and a Zimbabwean startup needs to pitch like their lives depended on it.\nThey have bias to work against and they have to demonstrate that despite the above, their business model is solid. So, it has to be more solid than some of their African counterparts’.\nWe have seen the likes of Entry raise tens of thousands from international investors and so it can happen. Again, not significant amounts compared to other African countries but huge in Zimbabwe.\nThen comes Jamboo which raised over a million in a month’s time. Well, they may be Zimbabwean in that the founders are Zimbabwean and that the app will serve Zimbabwe, but Jamboo is actually a UK company. That helps.\nAlso, we find that both investors who pumped in the mil are Zimbabweans. So, not really international investors. However, one might argue that’s even more impressive than getting international investors because Zimbabweans do not have a culture of investing in startups.\nWith this said, let us talk about…\nAfrica Tech Summit Nairobi 2024\nAfrica Tech Summit Nairobi has announced ten African tech ventures that will showcase their solutions to a diverse audience of industry experts, investors and fellow innovators on February 14th and 15th.\nWhile African startup funding declined in 2023, the investment showcase continues to foster collaborations and stimulate investment opportunities to bridge the funding gap in the ecosystem. According to data from Africa: The Big Deal, African startup funding experienced a 39 per cent decline, falling to $2.9bn in 2023 from $4.6bn recorded in the previous year.\nThe 250+ entries received from various countries across Africa, including Kenya, Egypt, Tanzania, Nigeria, Ghana, South Sudan, Malawi, Angola, Morocco, Botswana, Benin, Congo, Uganda, South Africa, Sierra Leone and more, highlight the immense potential for innovation and partnerships in the continent. The ten selected ventures, spanning fintech, agritech, e-commerce, Web3, and climate-tech sectors, are looking to raise funding ranging from $500,000 to $15mn. They include:\nNode Bio (Kenya) is utilizing cutting-edge plant science to develop crop treatment that effectively combat the adverse effects of climate change. Their innovative solution, Farmchef, enables plants to withstand drought, extreme heat, and other water-related stressors.\nValu (Egypt) is MENA’ s leading Buy Now Pay Later (BNPL) lifestyle-enabling fintech platform, offering customers and businesses convenient and comprehensive financial solutions.\nBingtellar (Nigeria) is building payment infrastructure for global citizens including freelancers, remote workers, contractors, businesses. Their ramp product simplifies the process of buying and selling crypto and facilitates swift money transfer across Africa.\nDukka (Nigeria) is digitizing payments and bookkeeping solutions to assist small businesses across Africa to accept all digital payment methods.\nFutureLink Technologies (Uganda) is a digital marketplace that is simplifying financial access for individuals and facilitating payments for financial cooperatives. FutureLink Technologies is the first African company to win the Global SME Finance Platinum Award for Product Innovation of the year 2022.\nTausi App (Kenya) is a beauty tech company that is leveraging technology to link beauticians to potential customers. Tausi has registered over 6000 beauticians so far.\nFeegor (Nigeria) is a B2B e-commerce company that is connecting Small and Medium Enterprises (SMEs) to manufacturers and major wholesalers.\nPeercarbon (Kenya) is a climate fintech startup leveraging granular emissions data and cutting-edge sustainable finance technology to empower African SMEs. Peercarbon’s Software as a Service (SaaS) platform provides real-time insights, making it easy for businesses to track their carbon footprint.\nRegxta (Nigeria) is making financial services accessible to underserved communities and micro-businesses in rural and peri-urban areas across Africa, including internally displaced persons and refugees.\nURBANET (Kenya) promotes international dialogue on development activities worldwide, providing insights on municipal and local governance, sustainable urban development, and decentralization.\nHenry Umunnakwe, Ecosystems & Sales Manager of Africa Tech Summit shared: “Amidst the challenging backdrop of decreased funding for African startups in 2023, the resilient spirit of entrepreneurship continues to thrive across the continent, and we are delighted to introduce these 10 pioneering ventures for this edition of the Investment Showcase. Our main objective of the Showcase is to spotlight and foster connections for these ventures with both local and global investors. We look forward to welcoming over 1000 delegates to the summit to catalyse collaborative efforts and propel investments to further fuel innovation and growth throughout the continent.”\nRegister for passes to Africa Tech Summit Nairobi, Feb 14th & 15th here.\nWe will keep looking at some of these events to get a better idea of which business solutions are funded. We want to see Zimbabwean startups on these lists and we can all share what they need to do to make that happen.\nSo, if you a startup founder, pay attention to the chosen few, analyse their models, websites, pitching techniques and the like.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2024/01/why-zim-startups-struggle-to-raise-capital-from-international-investors/"}
{"doc_id": "b5003decb2e4afa290722c71ad5754ea", "text": "Mid-month data from the Central Energy Fund (CEF) points to another big month for petrol and diesel price relief in December 2023.\nThe CEF’s data points to a drop in petrol prices of around R1.05 per litre, while diesel is lining up for a cut of up to R2.14 cents per litre.\nIf these over-recoveries carry through to the end of the month, motorists and other fuel users will catch a much-needed break ahead of their travels for the festive season.\nThese are the expected changes:\n- Petrol 93: decrease of 105 cents per litre\n- Petrol 95: decrease of 107 cents per litre\n- Diesel 0.05% (wholesale): decrease of 209 cents per litre\n- Diesel 0.005% (wholesale): decrease of 214 cents per litre\n- Illuminating paraffin: decrease of 175 cents per litre\nDaily snapshot data for LP Gas is not presented by the CEF.\nThe Department of Mineral Resources and Energy (DMRE) has noted that its daily snapshots are not predictive and do not encompass other possible modifications, such as slate levy adjustments or retail margin changes. The department determines these adjustments, considering various factors, at the end of the month.\nDomestic fuel costs are primarily governed by the rand/dollar exchange rate and international oil prices. In South Africa, the fuel price is adjusted on the first Wednesday of every month based on these two factors.\nFor December, lower oil prices have been working in the favour of lower prices, while a moderately stronger rand has also been adding to the over-recovery.\nRand\nThe rand has experienced some relatively wild swings in recent weeks, having been sustained below R19 to the dollar for much of the month.\nThe local unit got a strong boost from the wider risk-on environment in the markets following US economic data pointing to the prolonged hiking cycle of interest rates coming to an end.\nHowever, this was later tempered by hawkish comments from US Federal Reserve Chair Jerome Powell, saying that inflation was still too high and that future hikes could not be discounted.\nOn Wednesday (15 November), the rand made another swing as markets awaited retail data from the States. The rand is currently trading at R18.20 to the dollar, down from the R18.80 levels hit earlier in the week.\nGiven the rand’s journey over the past week or so, it is apparent that local market movements are being driven by non-local data, and much of the rand’s fortunes are tied to the US and related events\nSouth African problems – like load shedding, infrastructure woes and the fight to close the budget gap – are taking a back seat and are likely already priced into the rand and have been for some time.\nAccording to Investec chief economist Annabel Bishop, the rand is likely to remain volatile as market risk-taking rises and weakens as sentiment wanes.\nOil\nOil prices have seen a sharp drop in November, following a rapid rise after war erupted between Hamas and Israel in October.\nThe war in the Middle East stirred fears that more countries would get pulled into the conflict, sending oil prices surging to over $95 a barrel, with markets eyeing a move above $100.\nHowever, as the escalation did not happen, and the reality of China’s lower demand (and ample supplies in the US) fed through, the oil price fell back down and even dropped below the $80 a barrel mark last week.\nGiven the turn in pricing, this is reflected in the international cost of petroleum products, which is working in motorists’ favour in current forecasts.\nHowever, economists have warned that this is not the end of the oil price stresses, with the risk of escalation in the Middle East ever-present, threatening to send prices surging once again.\nWhile this may not feed through in the immediate term (ie, December 2023), it may be a reality motorists will have to face in 2024.\nWith global benchmark Brent trading near $83 a barrel, analysis from Bloomberg noted that oil markets will be kept on edge for some time.\n“Oil has fallen sharply since mid-October as the Israel-Hamas war risk premium evaporated and doubts set in about the demand outlook before rising in the three days through Monday,” the group said.\n“It’s lacked direction since then, with worries over the health of the global economy balanced by indicators that still show the market is in deficit.”\nHere is how the expected prices could reflect at the pumps.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/energy/731257/here-is-the-expected-petrol-price-for-december-6/"}
{"doc_id": "d13ccb9ca26b241de1e60c3668d24d15", "text": "The Confederation of African Football (CAF) has rescheduled the 2022/23 CAF Champions League first preliminary round fixture between Burkinabe side R.C Kadiogo and Asante Kotoko.\nThe first leg encounter will now be played on Monday, September 12, 2022, at the Friendship Stadium in Cotonou, Benin.\nThe game was initially scheduled to take place at the Stade de Yamoussoukro in Ivory Coast on Friday, September 9. Ivorian authorities say they have planned renovation works at the venue after the 2022 WAFU B CAF Women’s Champions League qualifiers.\nBurkinabe teams cannot play international games on home soil because facilities in the country do not meet the standards set by CAF.\nThe Porcupine Warriors departed Ghana today for Benin via land for the about seven-hour journey with a 22-man squad.\nCameroonian forward Georges Mfegue, who missed the Sudan preseason trip because of injury, has been passed fit and travelled with the team.\nCaptain Richard Boadu, goalkeeper Ibrahim Danlad, and Ugandan import Steven Mukwala have also travelled with the Ghanaian champions.\nCoach Seydou Zerbo will face his former side without the club’s top scorer last season, Franck Mbella, who is sitting out because of injury alongside right-back Augustine Agyapong, and new signing Eric Zeze.\nFull squad:\nLatest Stories\n-\nThe Roll Call of Biblical Financial Evangelists\n-\nMahama accuses Bawumia of dubbing NDC’s policy promises\n-\nMahama echoes vision for resilient governance and economic recovery at NDC LAB Policy Dialogue\n-\nGSE’s Abena Amoah not on Bawumia’s economy committee\n-\nNDC’s Policy Dialogue marks milestone in pre-election strategy – Mahama\n-\nEOCO to launch lifestyle audits targeting celebrities and individuals with suspected unexplained wealth\n-\nUpper West Akim MP cuts sod for the construction of Mepom to Esaaso Road\n-\nEngineers urged to embrace preview of their works\n-\nParis 2024Q: Zambia edges Ghana 1-0 for crucial first-leg advantage\n-\nDr. Christian Sewordor Mensah: The Role of Sector Skill Bodies in using ESG and CSR Principles in shaping Sustainable Education and Training\n-\nTyler Perry halts $800 film studio build over AI fears\n-\nAkufo-Addo appoints Ofori-Atta as Senior Presidential Advisor\n-\nMIIF aims to position Ghana as electric vehicle hub in Africa\n-\nAvatar: The Last Airbender receives mixed reviews from critics\n-\nMahama slams Police’s decision to dissociate itself from DCOP Waabu’s comments on election security", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/caf-cl-kotokos-game-against-r-c-kadiogo-rescheduled-to-september-12/"}
{"doc_id": "ff1a4878e13d6eb07536593b90b792b8", "text": "At least 26 people have died after they were electrocuted by a falling power cable at a market in the Democratic Republic of Congo, police say.\nThe high-voltage cable snapped and fell onto houses and people shopping near the capital Kinshasa on Wednesday.\nUnverified footage posted to social media appeared to show the aftermath of the incident, with several motionless bodies in puddles of water.\nIt is not yet clear what caused the power cable to break.\nPolice said the collapse happened at the Matadi-Kibala district on the outskirts of Kinshasa and that a number of people died on the spot.\n\"The cable snapped and the live end of it fell into a ditch that was filled with water after morning rain,\" Charles Mbutamuntu, spokesman for the Kinshasa provincial government, told AFP news agency.\nLocal media report that the majority of the victims are female market traders.\nLatest Stories\n-\n9 awkward but completely normal things that happen during sex\n-\nSexy gift ideas for her any time of the year\n-\n4 fun & simple ways to upgrade your date night\n-\nOnion Sellers Association allays fears of price hikes\n-\nBanking sector clean-up served as a shock absorber during Covid-19, economic crisis – John Awuah\n-\nNorth Tongu Assembly members fail to elect PM after 4th attempt; DCE fumes\n-\nDigital industry players must shape digital landscape in Africa – Minister\n-\nAssociation of Sports Betting Operators presents learning materials to 939 pupils in flood-affected communities\n-\nMan, 30, dies in alleged attempt to steal ECG cables\n-\nAklakpanu bridge will be reconstructed to boost economic growth – North Tongu DCE assures\n-\nAwutu Senya West Assembly members reject President’s nominee\n-\nConsider the use of local rice for school feeding – Rice farmers\n-\nKyei-Mensa-Bonsu to address resignation issues today\n-\nCyber-attack hits Malawi’s immigration service\n-\nKenya scraps entry fee for South Africans and several other foreign nationals", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/26-dead-after-power-cable-collapsed-in-a-market/"}
{"doc_id": "9f4e992a32feaa1008314f4a78276cd3", "text": "In its effort to combat poverty and empower rural communities, the Investing In Impact (3i) initiative has empowered 655 underserved rural livestock farmers in the North-Eastern part of Nigeria with N540 million.\nGbenga Ariyo, CEO of 3i, said this at a recent press briefing, shedding light on the groundbreaking impact the project has had on the region.\n“Our direct beneficiaries, numbering 655, have benefited from a total disbursement of N540 million. This has extended to impacting over 1,200 households in rural communities,” Ariyo said.\nRead also: Food security: Supporting the role of women livestock farmers\n“Our initiative addresses funding shortages and enhances production skills, narrowing the gap between urban and rural prosperity.\n“We have reached four states, collaborated with 62 small business owners, providing essential resources such as feed, poultry birds, and medication.\n“Our initiative addresses funding shortages and enhances production skills, narrowing the gap between urban and rural prosperity,” he added.\nLivestock production in Nigeria ranks the second-largest agricultural sub-sector, contributing 5 percent to the agricultural GDP. It serves as a vital support for rural households, especially small-scale crop producers, acting as a “safety net” during challenges.\nDespite its crucial role, the livestock sector faces underdevelopment, impacting smallholders and food security. In rural areas, 85 percent of households rear poultry and 81 percent raise small ruminants, with an average flock size of 6 small ruminants, 6 birds, and one large ruminant per household in the Northeast.\nFor 80 percent of the Nigerian farming population, mostly rural smallholders, livestock serves as a source of nutrition and a means to trade for essential agricultural inputs during lean farming periods.\nFor women particularly, managing backyard livestock offers financial stability and flexibility within cultural constraints, a report by Ikore, an international development organisation, revealed.\nHighlighting the importance of livestock in enhancing food security, Eva Dan-Yusuf, program manager for 3i, emphasised the initiative’s aim to empower rural women in North-East Nigeria.\n“By providing training in poultry and livestock production, we target poverty, limited skills, and lack of financing, contributing to both local livelihoods and global food security,” she said.\nExplaining the distinctive aspects of the initiative, Ariyo highlighted an innovative in-kind financing model. “Our program offers resources for the breeding period. Once income is generated, these resources are refunded, allowing reinvestment to support other women in the program,” Ariyo said.\nRead also: FG mulls Catastrophe Insurance for 11million farmers\n“The project’s core aim is to equip rural women with entrepreneurial skills, fostering sustainable income generation,” the CEO continued, stating the significance of supporting rural livestock farmers, and acknowledging their pivotal role in ensuring food security and economic growth in communities.\n“Our vision is to reach 75,000 women in the next decade, promote inclusive growth and contribute to achieving Sustainable Development Goal 5,” Ariyo said, reiterating that focus remained on empowering rural women economically, and shaping a more sustainable agricultural landscape in Nigeria.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/agriculture/article/investing-in-impact-empowers-655-livestock-farmers-with-n540m/"}
{"doc_id": "6e8effe544bc135d097a793b48f902b6", "text": "The Centre for Democratic Development Ghana (CDD-Ghana) has conducted a survey on citizens' preference for the election of Metropolitan, Municipal and District Chief Executives (MMDCEs).\nThe survey, which was carried out from May to June 2021 found that 76% of the sampled population would like MMDCEs to be elected while 20% supported their appointment.\nIt also revealed that 71% of Ghanaians, who wanted MMDCEs elected, preferred a non-partisan election while 20% opted for a partisan election.\nFindings from the survey were presented at the opening of a two-day consultative forum in Tamale jointly organised and funded by the Ghana Developing Communities Association (GDCA) and Norsaac in partnership with CDD-Ghana.\nThe forum was attended by traditional leaders, civil society organisations, citizen groups, the media and other stakeholders, who deliberated on the findings of the research and the way forward.\nIt was dubbed: “The Election of MMDCEs and Complimentary Reforms: Opportunities for Transforming Local Governance in Ghana\".\nThere were other presentations on building consensus on local government reforms and the state of local administrative structures including committee systems, sub-district structures and the local parliament.\nThe survey also showed that citizens’ preference for a non-partisan-based election of MMDCEs increased by 12%. Again, a preference for a partisan-based format declined by 20% between 2017 to 2021.\nA total of 2,400 citizens were randomly sampled for the survey with samples distributed across regions, urban and rural areas proportional to their share in the national adult population and interviewed face-to-face.\nIn 2019, President Nana Addo Dankwa Akufo-Addo began a process to carry out a referendum on the election of MMDCEs on partisan basis, which was cancelled at the eleventh hour due to “lack of consensus”.\nThe findings, however, were contrary to the President’s proposal to have the election of MMDCEs on a partisan basis.\nMr Paul Osei Kuffour, Programmes Manager at CDD-Ghana, who presented the research findings, said CDD-Ghana conducted the survey objectively to confirm citizens’ thought on the conversation surrounding local government reforms.\nHe said the findings of the study were disaggregated to check whether they were in tandem with demographics such as gender, political parties, age among others to ensure that results were not a representation of a section of demographics.\nHe reiterated that all demographics seemed to support the election of MMDCEs on a non-partisan basis when disaggregated.\nMr Kuffour stated that the coalition held multi-stakeholder meetings at regional and national levels to complement development efforts, saying “Local governance reforms may not be the panacea as our local governance system is dysfunctional.\"\nHe noted that memos and proposals were being put together taking into consideration the advantages and disadvantages associated with electing MMDCEs on either partisan or non-partisan basis, which would be presented to the government for further consideration.\nProfessor Yakubu Nantogmah, Chief of Zugu, said it was essential to work towards achieving a national goal through partnerships amidst honesty. He added that equity must be applied at all decision-making levels giving equal opportunities to women.\nThe Chief of Sagnarigu, Sagnar-Naa Yakubu Abdulai, expressed the need to uphold rule of law in the country to ensure that people had what was due them by virtue of being citizens.\nHe urged CSOs to give keen attention to the impact of both partisan and non-partisan ways of electing MMDCEs.\nLatest Stories\n-\nAlleged breach of contract: Court declines Davido’s application for stay of proceedings\n-\nHe’s been a fantastic leader – Joe Wise on Osei Kyei-Mensah-Bonsu’s resignation\n-\nAvail your experience to MPs as you step down – Ato Forson urges Kyei-Mensah-Bonsu\n-\nEvent companies are folding up due to lack of corporate support – Ashis\n-\nBanks to blacklist borrowers with bad credit history\n-\nTony Tetuila hints at ‘My Car’ remix with Burna Boy\n-\nGhana could produce 492,000MT of cocoa beans in 2023/24 crop season, 27% lower than previous season\n-\nGhana Culture Forum outlines activities for 2024 culture week celebration\n-\nOsei Kyei-Mensah-Bonsu formally announces resignation as Majority Leader\n-\nRastafari Council announces keynote speaker for conference\n-\nAlarming number of youth reporting to facilities with stroke – Ghana Society of Cardiology\n-\nCocoa output for 2023/24 season drops by 40%, driving record-high prices\n-\nHenry Kanor\n-\nOsei Kyei-Mensah-Bonsu resigned voluntarily – NPP insists\n-\nParis 2024Q: ‘First leg against Zambia is a must-win’ – Nora Hauptle", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/cdd-ghana-survey-shows-citizens-prefer-electing-mmdces-on-non-partisan-basis/"}
{"doc_id": "0a7955c350f489f67bd6c95408eec1fa", "text": "On the lighter side of social discourse, there is a longstanding debate about whether bald men are more attractive than those with hair.\nWhile some feel men who wear a clean-shaven head are more appealing, others say their haired counterparts have far more inviting looks.\nThis difference in opinion was expressed on Joy FM's Super Morning Show on Friday, when listeners were asked to call in and share their views on the issue.\nSpeaking to hosts, Kojo Yankson and Winston Amoah, the audibly excited callers offered very interesting perspectives on the matter.\nA caller, in expressing her views intimated that, as far as she is concerned, she is not only intrigued by bald men, but also bald men who possess the Ghana Card.\nIn stating her unique angle, she said bald men with Ghana Card are the \"new deal\".\nApart from the callers, an invited guest, Bernice Esinam Batali, who also shared her thoughts noted that as far as she is concerned, bald men are as attractive as those with hair on the scalp.\nFor Esinam, her choice of a man is not based on whether they have hair or not; but rather whether the man in question possesses other good qualities.\nMeanwhile, the Chief Executive Officer of the Vinci Hair Clinic, Ayo Otubanju, says baldness is not a defect as many assume.\nAdding to the discussions, the expert said it is natural for men to be born bald.\nHe however explained that men who are bald can resort to special arrangements to grow their hair if they wish to do so.\nLatest Stories\n-\nThe Roll Call of Biblical Financial Evangelists\n-\nMahama accuses Bawumia of dubbing NDC’s policy promises\n-\nMahama echoes vision for resilient governance and economic recovery at NDC LAB Policy Dialogue\n-\nGSE’s Abena Amoah not on Bawumia’s economy committee\n-\nNDC’s Policy Dialogue marks milestone in pre-election strategy – Mahama\n-\nEOCO to launch lifestyle audits targeting celebrities and individuals with suspected unexplained wealth\n-\nUpper West Akim MP cuts sod for the construction of Mepom to Esaaso Road\n-\nEngineers urged to embrace preview of their works\n-\nParis 2024Q: Zambia edges Ghana 1-0 for crucial first-leg advantage\n-\nDr. Christian Sewordor Mensah: The Role of Sector Skill Bodies in using ESG and CSR Principles in shaping Sustainable Education and Training\n-\nTyler Perry halts $800 film studio build over AI fears\n-\nAkufo-Addo appoints Ofori-Atta as Senior Presidential Advisor\n-\nMIIF aims to position Ghana as electric vehicle hub in Africa\n-\nAvatar: The Last Airbender receives mixed reviews from critics\n-\nMahama slams Police’s decision to dissociate itself from DCOP Waabu’s comments on election security", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/bald-men-with-ghana-card-is-the-new-deal-joy-fm-caller/"}
{"doc_id": "01fe4d6cc63b653ebc2404a25c0d8b0d", "text": "The Government is back to the global money market asking for loans between Sh150 billion and Sh300 billion to refinance existing loans.\nBorrowing for worthwhile projects must be encouraged. However, certain quarters have cautioned Treasury’s rate of borrowing, pointing out it is damaging Kenya’s credit rating.\nThe Government could be more transparent about the use of the borrowed funds. The moment citizens question the use of loan proceeds, then there is doubt as to whether it is a worthwhile exercise.\nIt is almost certain that the Eurobond issue will be successful because investors always look for borrowers. In any case, financial institutions whether local or global are in the business of generating income by lending money to businesses, government and individuals. The advantage of lending to the State, unlike to individuals and business is that they are unlikely to default.\nThe principal economic function of banks in any economy is to finance consumption and investment. However, even at an individual level, if you keep on borrowing, then you risk losing your borrowing capacity.\nYou are also likely to be denied credit in future or made to pay higher interest on the same amount borrowed.\nThe analogy can be found in the credit arrangement between banks and Central Bank. A bank that keeps on borrowing at higher discount rates is likely to face investigations.\nThe assumption is that those who borrow to repay earlier loans are in financial difficulties and are likely to default.\nKenya is an emerging economy and unlike developed economies, the lending process is subject to careful monitoring.\nGRADE SECURITIES\nIt appears Kenya is entering a stage where its creditworthiness is being questioned. This is derived from the lack of agreement about her credit rating by three agencies - Fitch, Moody’s and SRP. Banks in developed economies do not lend to countries that have a history of defaulting.\nSuch banks are allowed by their governments to only invest in investment grade securities rated at least BAA or BBB to protect depositors from excessive risk.\nBanks are particular about credit risk and rely on credit-rating agencies such as Moody’s. A credit-rating agency rates the borrower’s ability pay back debt, making timely interest payments while determining the likelihood of default.\nIn terms of market share, Moody’s Investors Service and Standard & Poor (S&P) together control 80 per cent of the global market while Fitch’s ratings control around 15 per cent.\nMoody’s is the bond credit rating wing of Moody’s Corporation, a firm that tells investors their potential losses on lending to a particular institution, private or government.\nStay informed. Subscribe to our newsletter\nMoody’s measures the expected losses in case there is a default, but S&P and Fitch advise the investors whether the borrower will default or not. Moody is the opinion that our credit rating has declined; they are questioning the impact of current borrowing on Kenya’s debt capacity.\nMoody’s has downgraded Kenya’s credit rating from B1 grade to B2; and if that is the actual position, then Kenya will have to pay higher interest on future loans.\nHowever, Treasury ignored Moody’s rating and turned to Standard & Poor (S&P) and Fitch that rated Kenya’s debt capacity favourably. The danger to Treasury is that they have solicited for the services of S&P and Fitch, paid them, setting the platform for conflict of interest because both must choose between rating securities accurately and serving their customer.\nIn this case, it is the Government that needs high ratings to be able to sell bonds to investors to raise the required funds.\nInvestors appear to be wary of solicited credit ratings as they might not be as objective as they ought to be.\nThe US leans more towards unsolicited credit rating. S&P issues credit rating of private institutions and governments and is a nationally recognised.\nIt is not unusual for S&P to downgrade government bonds. In 2011 the firm lowered the US’s sovereign long-term credit rating from 3 A’s to 2A’s due to their dissatisfaction with the Budget Control Act of 2011.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001270366/why-the-jury-is-still-out-on-kenyas-latest-credit-rating"}
{"doc_id": "45f8d109616691d19de8e4bb0b91edb1", "text": "Energy Secretary Monicah Juma has said that the government will discontinue the fuel subsidy programme pointing to costly petrol and a further increase in the cost of basic goods and services in the coming months.\nDr Juma said on Thursday that the spike in global prices of crude past the $100 per barrel has strained the fuel stabilisation fund due to the sharp rise in compensation to oil majors to keep pump prices low.\nKenya has spent Sh67 billion to stabilise pump prices in the current financial year and the amount is projected to hit Sh84 billion by end of this month.\nALSO READ: Fuel prices hit record high despite subsidy\n“It is difficult to sustain it (subsidy) to the extent that we would have liked. So far we have spent Sh67 billion and this will rise to Sh84 billion by end of the current fiscal year,” Dr Juma said.\nThe developlment just comes days after pump prices rose by Sh9 pushing the cost of diesel, super and kerosene to new highs.\nA litre of super and diesel now costs Sh159.12 and Sh140 in Nairobi respectively while a litre of kerosene rose to Sh127.94.\nWithout the subsidy, prices would have been Sh184.68 and Sh188.19 per litre of super and diesel respectively while kerosene would be selling at Sh170.37 per litre.\nPrices of crude in the global market have been on sustained rally since start of the year in the wake of the Russia-Ukraine war that disrupted supplies.\nThe current fuel prices are pegged on the price of crude per barrel at $112.48 and further increase in the cost of commodity will see diesel and super prices hit record highs by end of the year.\nThe subsidy kitty that is supported by the Petroleum Development Levy has been depleted several times since last year due to sharp increase in compensation margins to oil marketers.\nDepletion of the kitty has forced the government to allocate funds for the subsidy through supplementary budgets in the current financial year.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/economy/-state-to-end-subsidy-further-increase-in-fuel-prices-3850580"}
{"doc_id": "b7143f3991df3c5516d61b1acb26fbae", "text": "I dwelt extensively on two of the major business relationships that existed between the NPA and Integrated Logistics Limited otherwise known as Intels in previous chapters.\nI explained that the company.\nbecame concessionaires operating some of the terminals owned by the NPA in Onne, Port Harcourt, Warri and Calabar following the Port Reforms in 2006.\nI also explained the service boat management operations for which the company monitored and collected revenues on behalf of the Authority from 1997 until 2020 when the contract expired.\nAt the expiration of the contract, the Authority placed advertisements requesting for expression of interests for provision of service boat operation agency for the Nigerian Ports Authority.\nIntels joined other companies to submit bids for the contract. They were however disqualified for flouting some of the regulations guiding the process.\nUpon disqualification from the process however, the company instituted legal proceedings seeking to stop the NPA from completing the procurement process.\nIt raised the issue of the construction of Onne 4B as one of the reasons it should continue to monitor service boats’ operations for the NPA.\nUpon completion of the tenders process, the Authority, in a letter dated 9 November 2020, presented the four companies recommended by the Parastatal Tenders Board for the consideration of the Ministerial Tenders Board.\nAfter this, it was to be presented to the Bureau of Public Procurement, to issue a certificate of “No Objection” and ultimately, the recommendations would be presented to the Federal Executive Council (FEC) for approval.\nIn the letter, we provided the Minister with details of the process that produced the recommended companies.\nWe also explained that we now provided an agent for each of the pilotage districts thereby removing the monopoly of one company managing all four. The contract would also be for a period of ten years during which agents would earn a commission of 15% as opposed to the previous situation where Intels handled the operation in four pilotage districts at 28% commission.\nThe Minister held on to the letter without declining the Authority’s request or taking any step towards completing the process. On 22 January 2021 however, he wrote to the President asking for the restoration of suspended contracts between Intels and the NPA.\nIn the letter, entitled: “restoration of suspended contracts between Integrated Logistics Services Limited and the Nigerian Ports Authority,” the Minister reminded the President of the “long-running issue of contractual disputes” between the two parties and how it has resulted in protracted legal disputes at the instance of the company.\nHe explained that court orders as a result of litigation had affected the financial projections of the NPA and the national treasury negatively. On the strength of this, he requested the President to approve:\n‘The restoration of all contracts between NPA and Intels currently suspended or purportedly terminated by NPA which are now the subject of legal disputes between the parties.’\nIn addition, he sought a directive for the withdrawal of all cases in court or at arbitration by all parties with a view to administrative resolution by his office.\nUpon sighting the approval, the COS to the President contacted me and requested that I provide details of all NPA’s contractual relationship with Intels.\nI felt the minister’s recommendation were awkward as no contract between NPA and Intels was terminated.\nWhile it is possible to withdraw cases in court and seek amicable resolution to all conflicts, the service boat operations contract had ended as a matter of effluxion of time in August 2020. It was not terminated.\nIn other words, at the time that we were asked to restore this contract, no contract existed. It was, therefore, impossible to restore something that did not exist!\nMore than that, however, was the flurry of court actions that would undoubtedly ensue because of the latest directive.\nTens of companies went through the bid process for these contracts. At the end, the best four were selected and recommended to the Minister. These companies were already waiting to receive final approval from the government and were not likely to take this policy shift with equanimity.\nThe floodgates of litigation would be opened with the attendant negative optics in the light of attracting foreign investment.\nThe disruptive effect of the directive on our efforts to sanitise the sector and ensure that the country gets the best of its resources, preoccupied my mind for the next few days. I ventilated on a few occasions during discussions with my colleagues on the Executive Management Team of the NPA.\nOn 25 January 2021, I responded to the Chief of Staff and forwarded a letter with the heading: ‘details of the respective contractual relationships between Nigerian Ports Authority and Intels Nigeria Limited.’\nThis letter started as follows: “In line with your request for the Authority to provide details of its respective contractual relationships with Intels Nigeria Limited, please find below as requested…”\nThe letter listed the following contracts with short notes that provided information on their import and guiding terms and conditions.\nConcession agreement for Onne Terminal A and B in Rivers Ports, Rivers State\nConcession agreement for Calabar Terminal A in Calabarorts, Rivers State\nConcession for Warri New and Old Terminal, Delta Port, Delta State\nService Boat Operations Managing Agent, where I highlighted the following: “It is important to note that the agreement with Intels on this service was not terminated but it reached the end of its contractual period in August 2020.”\nConstruction of Onne 4\nConstruction of Onne 4B\nUtilisation of berths 9,10,11\nManaging Agent for the maintenance and operations of water supply at Onne.\nConcluding the letter, I wrote: “based on the above, the Chief of Staff is invited to note the following:\n1. Note the above listed 1 to 8 contractual relationships between the Authority and Intels.\n2. Note that the Authority has not terminated any contract with Intels\n3. Note that in the case of the service boat operations managing agent, Intels filed a suit against the Authority for a contract that expired but was not terminated.\n4. Note that in the case of berth 9, 10, 11, Intels filed a suit against the Authority for the withdrawal of an offer letter not the termination of an agreement as no agreement was signed for the use of the berths.\nUpon the review of the information provided by the NPA, the Chief of Staff sought advice from the Attorney-General of the Federation and Minister of Justice, the Director General of the Bureau of Public of Procurement (BPP) and Director General of the Infrastructure Concession and Regulatory Commission (ICRC).\nIn a letter dated 23 February 2021, Prof. Gambari informed the recipients of this correspondence that although the President had earlier approved the restoration of all Intels’ contracts and the withdrawal of all court cases, additional information from the NPA made it necessary to seek counsel in assessing the legal and procurement related issues involved.\nHe directed an expeditious review of the submissions provided with a deadline of 9 March 2021.\nIn its letter on 9 March 2021, the BPP agreed with the NPA that the concession agreements for the Terminals in Warri, Port Harcourt and Calabar were subsisting and not terminated. It also agreed that the contract for service boat operation expired rather than being terminated.\nThe letter said about the service boat contract in part: ‘the effective date for the contract for the service boat operations management agent was 9 August 2010 and it was to continue in force for Ten (10) years until 8 August 2020.\nThis supports the NPA’s position that the contract naturally expired and was not terminated.’\nIt noted that Intels initiated the court case against the NPA to stall the procurement process for the engagement of a new service boat operation agent, which will negatively affect the Authority’s revenue.\nOn the construction of Onne 4B, which Intels uses as basis for the case, the BPP wrote: ‘Messrs. Intels and Deep Offshore Nigeria Ltd are recognised as separate entities under the law and as such, any perceived contractual issue between NPA and Messrs.\nDeep Offshore Nigeria Ltd on the Onne 4B project should not form the basis for Messrs. Intels to institute a lawsuit against the NPA to stall a procurement process for a separate service. This is particularly so, as the NPA has already committed to Messrs. Intels that it remains committed to discharging its debt obligations on the Onne 4B project and will do so irrespective of the expiration of the Intels contract as service boat operations management agent.‘\nIt said further that the NPA’s decision to initiate a procurement process ahead of the expiration of the contract for service boat operation management was in order, and that it was important for the Authority to conclude the process expeditiously since a public tender had been issued and the country was already losing revenue from the stalled process.\nIn the final analysis, the Director General of the BPP, Mr. Mamman Ahmadu, who signed the letter, stated that while seeking amicable settlement of contractual issues like the one in question was desirable, ‘the correct procedure is that contracts should be won through a proper procurement process that complies with the provisions of PPA, 2007.\nFurthermore, there is need to need to avoid the kind of monopoly being enjoyed by Messrs. Intels, which has cascaded into the entitlement mentality being demonstrated by the firm.’\nBefore this, the Federal Ministry of Transportation wrote the Authority on 17 February 2021. The letter, signed by the Director of Maritime Services, Mr. A.D. Suleiman, conveyed the President’s approval of the restoration of all Intel’s contracts and withdrawal of all cases. It informed the Authority that a committee headed by the Permanent Secretary supported by three directors in the ministry had been set up to engage with the company and Intels.\nA meeting of this committee held on 15 March 2021, and I used the opportunity to explain that the Authority had suspended action on the issue pending the review advice sought by the President from the AGF, DG BPP and DG, ICRC. I pointed out that the FMOT and NPA were copied in the letter written by the Chief of Staff to the President for this purpose.\nNevertheless, the Minister directed the Authority to forward the agreement with Intels on the service boat operation.\nOn 18 March 2021, I sent the agreements to the Minister with a cover letter reiterating my submission at the meeting three days earlier and suggesting that the Authority was awaiting this review.\nThis situation subsisted until 5 May 2021, when I was asked to step aside from office for the investigation of the management of the Authority since 2016. It turned out that one of the allegations against me was “failure to obey presidential directive,” despite all the explanations I offered on the issue of restoration of Intels pilotage contract.\nThe issue, however, came to an end in November 2021 when the President was reported to have followed the advice of the AGF, DG BPP, Acting DG ICRC, who were unanimous in their conclusion that the NPA was justified in its handling of the matter.\nThe lead report in THISDAY, on 11 November 2021 had the headline; ‘Buhari Cancels Restoration of Intels’ Pilotage Contract.’\nIt had two kickers: ‘AGF, BPP back Bala Usman,’ and ‘President orders conclusion of the procurement process within 60 days.’\nTHISDAY quoted the AGF as having written to the President as follows: ‘…There is certainty in the duration of the contract and the position of the law remains clear that a written contract freely entered by the parties is binding on them.\nAccordingly, the contract for Managing Agent awarded to Messrs Intels in 2007 validly came to an end and extinguished pursuant to the terms of agreement between the parties, which specified an end date of August 2020.\nThe agreement did not provide for any further extension of the contract in favour of Intels.\nRead also: Chapter 14: The Channel management contract\n“It is also to be noted that NPA, pursuant to the expiration of the contract, kick-started the procurement process to appoint another managing agent to forestall any break in the service being rendered. NPA submitted that it concluded the tender /bidding process and forwarded the result to the Minister of Transportation for same to be presented for FEC’s approval.”\nThe report said that: ‘Intels, the AGF added, resorted to litigation to frustrate the conclusion of the procurement process based on its grievance on a different subject-matter.\n‘The development, the AGF added, had created a vacuum in the provision of this critical service in the maritime sector with its attendant loss of revenue from service boat operation to the Federal Government.\n‘The AGF also stressed that the approval granted to the minister by the president in January last year (2021), which Bala-Usman was said to have disobeyed, was based on insufficient information at the time.\n‘The purported termination, he concluded, could not have occurred since the contract came to an end in 2020 based on the agreement by the parties.’\nAlthough it took a while before the truth about the conflict between Intels and the management of the NPA under my watch came to light, it was gratifying that Nigerians and the global maritime community eventually saw the justification for the stance that we took.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/arts-and-life/article/chapter-15-directive-to-reinstate-an-expired-contract/?utm_source=auto-read-also&utm_medium=web"}
{"doc_id": "3e125eab2c89d58521c60c7822aa2333", "text": "Earnings in Pepkor, the owner of household brands PEP, Ackermans, Tekkie Town, Buco and Incredible, took a knock for the year ended September 30, 2023 amid a challenging operating environment in South Africa with consumers under severe financial strain.\nHeadline earnings per share fell 8.7% to 149.1c. Headline earnings of R5.5 billion was in line with expectations, negatively impacted by elevated debtors’ costs and net finance costs.\nDespite this, the board declared a cash dividend of 48.1 cents per ordinary share payable to shareholders on January 22, 2024. This was down nearly 13% from the prior year’s 55.2c per share dividend.\nPepkor CEO Pieter Erasmus said, “Consumers in South Africa have continued to experience severe economic and social challenges during this reporting period. The result is extreme financial strain. Unemployment remains high, particularly among the youth, which impacts their ability to earn an income. The continued disruption in social grant payments further compounds these challenges as does electricity load shedding, which affects customer movement, activity and spending power.”\nAcross the Pepkor group, lost trading hours more than doubled this year, reaching 845 000 hours, and diesel costs surged by 69% to R141 million for the year.\nDebtors’ costs increased by 57.3% to R1.7bn based on increased credit granting and recognition of expected credit loss provisions. Bad debts amounted to R1.2bn compared to R990 million in the prior year.\nNormalised operating profit decreased by 8% to R9.1bn, mainly impacted by increased debtors’ costs, while net finance costs increased by 27.1% to R2.8 bn due to higher interest rates and a higher level of net debt, following the acquisition of Brazilian group Avenida.\nHowever, the retailer increased its sales 7.9% and saw market gains across several of its brands and despite the constraints, trading remained resilient and robust during periods when money was injected into the market, such as payment days for social grants, salaries and wages.\nThe JSE-listed company posted 7.7% growth in annual revenue to R87.4 billion and said it had a stronger sales performance in the second half of 2023, which drove market share gains.\nBased on 12-month moving average RLC (Retailers' Liaison Committee) data to September 2023, PEP achieved gains in the Babies, Adult and Home categories, and Speciality expanded market share in the Adult category.\nThe group’s operations generated R13bn in cash this year, reflecting an increase of 15.9% on the prior year.\nPepkor lifted group cash sales by 5.6% and credit sales increased by 35.6%, driven by the opening of 794 000 A+ accounts and the implementation of the group’s credit interoperability strategy in the South Africa-based clothing and general merchandise retail brands.\nPEP achieved pleasing results with strong like-for-like sales growth of 9.0% in the second half of the year and market share gains across key categories. PEP opened 96 new stores during the year, mostly driven by the PEP HOME format, and expanded its retail base to 2 602 stores.\nPEP HOME achieved strong sales growth of 21.9%. The PAXI parcel distribution service, which leverages the retail footprint of PEP and other Pepkor brands over 2 800 locations, increased volumes by 20% to 4.9 million during the year.\nAckermans reported a marked improvement in the second half of the year, with like-for-like sales declining by 1.1% compared to a decline of 8.3% reported in the first half. Improved inventory levels were achieved following successful clearance of underperforming merchandise through markdowns.\nThe Avenida business in Brazil, which was acquired in February 2022, increased its contribution to group revenue to 4.3% in FY23 from 2.4% in the prior year – in line with prior guidance.\nPepkor said 324 new stores were opened during the year with the group’s store base comprising 5 917 stores at year-end.\nLooking to the festive season and beyond, Erasmus said substantial disruption in local port operations was adversely affecting stock inflows.\nThe success of the first quarter of 2024 would rely on the performance of festive and back-to-school trade. In 2024, it was anticipated that product inflation would ease to mid-single-digit levels, which will enhance customer affordability and boost sales volumes.\nPepkor’s shares have gained 37.4% over three years. In midday trade, Pepkor’s shares were 2.02% lower at R18.43.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/pepkors-annual-earnings-take-strain-amid-challenging-sa-environment-d8239356-9333-442d-94fc-5d09e2ccf17b"}
{"doc_id": "8d5bc48426b4571af6c0f31ee66ca2df", "text": "By Nume Ekeghe\nMembers of the Bank Directors Association of Nigeria (BDAN) are soliciting the corporation of the Chartered Institute of Bankers of Nigeria (CIBN) in the area of professionalism and ethics in the industry.\nBDAN is planning to hold its conference by the second quarter of 2019, where new directors would be inducted.\nLeading her new team during a visit to the governing council of the CIBN in Lagos, Osaretin Demuren, president of BDAN, explained that the aim of the induction would be to enlighten new directors on their roles and responsibilities as directors, thereby complementing the efforts of the executive directors and also the CIBN.\nDemuren, disclosed that the association was working to establish an alumni group for bank directors.\nThe theme for the conference is, ‘Cyber security and performance of banks -the role of the board.’\nSpeaking further, Demuren said: “The experience I have, I can always advocate for integrity, honesty, which is why we are here. Whatever CIBN is doing, we are only complementing it.\n“What am I bringing on, just to guide the association to know their roles and responsibilities and work by rules of the banking industry and it is all about ethics and professionalism in the banking system.”\nIn his response, the President/Chairman of council, CIBN, Mr. Uche Olowu, said the institute would give BDAN all the necessary support.\nOlowu commended BDAN for its successful AGM and also on the theme of the conference.\nWhile noting the efforts of the institute in the cyber security space, the CIBN president stressed that banking sector remains vital for the growth of the Nigerian economy.\nHe emphasised the need for promoting ethics and professionalism in the sector, while assuring BDAN of the Institutes support in awareness creation and capacity building of the directors.\n“CIBN would give you all the necessary support. Banking is a very important sector and we should find a way of collaborating more to ensure that the non-executives directors are properly trained.\n“We would be entering an alliance with you to making sure our directors are properly trained in fintech because the structures in the industry especially because banking is changing.”\nOlowu further added: “We are going to work with you to make sure our financial systems are stable.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2018/12/10/bank-directors-calls-for-measures-to-enhance-professionalism-ethics"}
{"doc_id": "6aa29b234a2f81b712ea1eec461064dd", "text": "Drafting service contracts\nGodknows Hofisi\nThe use of contracts for the provision of commercial services is used widely in business. Some of the services include engineering, maintenance, information technology (IT), human resources, legal, accounting and auditing and healthcare services.\nSome professionals have standard or specific contract templates, for example, engagement letters in the case of legal practitioners, accountants, and auditors.\nIn the construction industry there are construction contracts which are guided by the standards used in the industry.\nGeneric or universal service contracts\nIn this article, I explain generic or universal contracts, which parties may then vary or tailor-make to suit their situation. Key provisions in such contracts include those explained below.\nParties\nThe parties to the contract have to be legal persons in the form of natural or juristic persons. Where trade names are used it is important to include the official or registered name and then indicate “trading as”.\nTheir contact details have to be included as well.\nPreamble\nThis is important to give context or background to the contract. This may include a description of the parties, the intentions of the parties and any relevant background.\nDefinitions and interpretation\nThese are necessary in the case of complex contracts to eliminate or reduce ambiguity or differences in understanding keywords or terms.\nTenure\nThe duration of the contract ought to be agreed upon and stated clearly. This may include a renewal option.\nServices to be offered\nThe services that the service provider will provide under the contract have to be captured correctly and in sufficient detail. In the case of a company a representative with sufficient knowledge and instructions has to represent the business, for example, an IT or maintenance person. Input from procurement may also be important.\nPerformance standards\nStandards required for the service are usually specified in the contract. In some situations, this may be done through service level agreements (SLA). It is normal to find standards such as a reasonable degree of care or skill. Industry or professional standards may also be set.\nFees\nIn most deals, pricing can easily be a deal breaker. In contracts, it is important to agree on the currency to be used. Determination of fees is of utmost importance, for example, whether fees are based on hourly or daily rates or they are agreed upon per assignment or activity.\nWarranties and guarantees\nIt is standard for the service provider and client to give each other warranties and guarantees such as availability, turnaround, skills, equipment, staff, payments, etc.\nLiability\nIt is advisable for parties to agree on who is responsible for what in the event of delays, extended timeframes, or a mishap such as an accident or damage to equipment.\nConfidentiality\nThis is a normal clause in most contracts. It is meant to protect the confidentiality of the parties and the contract.\nTermination\nConditions for termination have to be stated clearly. I have been confronted with agreements with no provision for termination of contracts as if they were drafted by a young couple on honeymoon where the idea of a divorce is foreign or never imagined.\nForce majeure\nThis clause provides for situations such as acts of God, natural disasters, war, civil unrest, etc.\nConclusion\nServices are used widely in business. Their provision has to be documented properly in the form of service contracts or as per the standards in specific situations or industries.\nDisclaimer\nThis simplified article is for general information purposes only and does not constitute the writer’s professional advice. It is not targeted at anybody.\nGodknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deal and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted on +263 772 246 900 or [email protected]", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/drafting-service-contracts/"}
{"doc_id": "ae0f2a42fc6edc57318f1e0d466f83b5", "text": "Commercial sex workers and other con artists who used to flock to tea-growing counties such as Kericho and Bomet are now finding it harder to lure tea farmers due to increased financial literacy.\nJoel “Maendelo” Chepkwony, a prominent farmer in Kericho county, recalls that back in the '80s and 90s when the Kenya Tea Development Agency (KTDA) released tea bonuses, twilight girls would take over bars and restaurants as well as Kericho town's streets.\n\"I know of a farmer who was lured by a prostitute into a lodging in the town where he was drugged and conned over Sh100,000. He is one of the many farmers who were conned in a similar fashion,\" he said.\nJames Cheruiyot added that when it wasn't the commercial sex workers having a field day, it was a con artist who would defraud gullible farmers' non-existence properties such as land or motor vehicles.\n\"Such criminals would for instance walk around with fake title deeds posing as land sellers only to vanish into thin air after swindling a farmer leaving him or her holding fake land documents,\" said Cheruiyot.\nBut such incidents are now rare.\nFinancial literacy and the rise of Saving and Savings and Credit Co-operative Societies (Saccos) have made tea farmers wiser and they are no longer easy prey to twilight girls and other cons.\nOne of the leading Sacco in safeguarding tea farmers and their earnings is Kenya Highlands Sacco.\nThe Chief Executive Officer (CEO) Alice Koskei said the Sacco was registered in 1991 to address the financial challenges tea farmers were grappling with.\nThe Sacco has around 70,000 tea farmers who channel their tea proceeds through it.\n\"The Sacco is a brainchild of small-holder tea farmers under Kenya Tea Development Agency (KTDA) who supply green leaf to Tegat tea factory. They were thereafter joined by their counterparts from Momul and Toror satellite factories,\" she said.\nThe CEO said after the establishment of the Sacco what followed was financial training and investment advice to the farmers.\n\"The first thing was to advise the farmers to draw up sound financial plans for the money and withdraw it in instalments,\" said Koskei.\nShe added, \"This was a change of approach from the days they were left by commercial banks to withdraw all the tea bonus from their accounts leading to misuse of the tea bonus and exposure to commercial sex workers and conmen,\" she said.\nKoskei indicated that Sh200 million of tea proceeds is channelled monthly through the Sacco which has five branches; Kapsoit (Headquarters), Kericho, Kabianga, Litein, and Silibwet in the neighbouring Bomet county.\n\"The branches were opened to take services closer to our members. We also have 21 agents spread across Kericho and Bomet county,\" she said.\nKoskei said this was a masterstroke against the criminal elements who used to prey on the tea farmers during bonus payout in Sacco's loan advance products.\n\"Based on a farmer's tea production and projected earning, a farmer can take school fees, farm or development loan product. The amount can be as little as Sh20,000 to as high Sh4 million at an interest rate of 12 per cent on reducing balance,\" she said.\nAt the end of the year, the Sacco members also earn dividends, which is also another reason which made them ditch conventional commercial banks.\n\"After deducting the Sacco's recurrent expenditure, the surplus money is released to the members at not less than 13 per cent,\" said Koskei.\nOn the other hand, Imarisha Sacco which in 2014 rebranded from Kipsigis Saving and Credit Cooperative Society (Sacco), has 7,000 tea farmers drawn from Kericho, Bomet, and Nandi as its members.\nChanging farmers' fortunes\nThe Sacco's Deputy Chief Executive Officer (CEO) Ernest Langat argued that since the Saccos took root in the county, the farmers' fortunes had taken an award curve due to financial literacy training, saving plans, and low-interest loans.\n\"Even if a farmer doesn't have an immediate plan for the tea bonus, they can earn a good sum by opting for our saving plan or buy the Sacco's shares whereby they can earn dividends at 12 per cent,\" he said.\nLangat added that tea bonuses nowadays end up paying the financial advance farmers have taken.\n\"As any salaried remember, we advance money to farmers and apply standing orders to deduct the money from their tea proceeds,\" he said.\nThe farmers are eligible for the Kilimo advance loan product which attracts a 12 per cent interest rate on reducing balance.\nThe product allows farmers to reinvest in their farms a contrast to the era they would wait for the tea bonus to for instance plough and expand their tea farms.\n\"The farmers are now wiser. You will hardly find a farmer misusing tea bonus anymore through impulse expenditure,\" he said.\nThe success of Kericho's Sacco recently saw 16 Ghana's Savings and Credit Co-operative Society (Sacco) to benchmark with ImarishaDr. Bernard Bingab the President and the Board Chair of Ghana Sacco's said they were impressed by Sacco's phenomenal growth having which hit Sh14.1B at the height of Covid-19.\n\"In Ghana, Saving and Credit Society (Sacco) membership is around 1 million people which is too low compared to Kenya where millions are registered members of various Saccos,\" he said.\nDr Bingab said cooperative societies play a key role in creating wealth for members and offering services where big financial institutions can't be found.\nImarisha Sacco CEO Mathew Rotich attributed the institution's growth to the vision of providing efficient financial services to its customers through continuous innovation.\n\"We continue to align ourselves to the vision of being a Sacco with a customer-centric experience,\" he said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/health/rift-valley/article/2001439323/sacco-saves-tea-farmers-from-twilight-girls-criminals"}
{"doc_id": "b4ab21cb6696ffc3947caef1c8ba895d", "text": "Part two of our discussion on the benefits of cryptocurrencies and blockchain technology is a more focused one. In this episode, we look at the use cases for the blockchain and cryptos that go beyond financial services. And I was joined yet again by Financial Services Lawyer and Blockchain Technology Analyst, Prosper Mwedzi.\nYou can download or play the podcast with the link below. Alternatively, you can send the word “Podcast” on WhatsApp to 0717 684 274 for a copy.\nYou can subscribe & listen to Technikari on these podcast sites & apps\nYou should also check these Technikari episodes\nFormer member of the Reserve Bank of Zimbabwe’s MPC Eddie Cross joined us to talk about SI 127, the Forex Auction and the Zim economy in general.\nThe reluctance of the financial authorities to test out blockchain technology and cryptos is setting Zimbabwe back decades.\nIf you deposit USD into a local foreign currency account, that money is not covered by the Deposit Protection Corporation (DPC). This means if a bank goes belly up there are few guarantees that your forex could be recovered.\nZIMRA recently gave a grace period for the importation of cars that are 10 years or older. Now, this comes after the ban the govt instituted in April 2021 which leads us to believe it’s all about the revenue dip ZIMRA was experiencing on its end.\nZimbabwe’s Cannabis grower’s licence is priced way too high and this is keeping the country from a rapidly expanding and lucrative industry.\nCover Image Credit, Hacker Noon", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2021/07/election-integrity-music-royalties-other-use-cases-for-cryptos-and-blockchain-technology/?amp=1"}
{"doc_id": "804085dda13dc41346c1a7af1ac84cd6", "text": "Harare - Zimbabwean police on Wednesday used batons, tear gas and water cannon to beat up and disperse supporters of the main opposition party who had gathered outside its building in the capital to listen to a speech by their leader.\nThe latest police action comes as the opposition Movement for Democratic Change (MDC) accuses President Emmerson Mnangagwa of adopting the heavy-handed tactics of his predecessor, Robert Mugabe who died on September 5.\nOn Sunday, Mnangagwa defended his record in an opinion piece carried by CNBC Africa, saying his administration was opening up political and media space.\nBut police have this year banned several MDC gatherings, saying they feared the events would turn violent.\nHundreds of police blocked roads leading to MDC headquarters in Harare but supporters continued to gather, singing and chanting before the arrival of party leader Nelson Chamisa, who was set to address them.\nA few minutes after Chamisa entered the party building, police charged the crowd with batons and fired tear gas, causing a stampede, according to Reuters witnesses.\nPolice officers declined to comment.\nMDC officials said the skirmishes once again showed that the opposition party was a victim of government brutality.\n\"The MDC strongly condemns that violent attack by the police on the citizens who had peacefully gathered outside our (headquarters). This kind of barbaric brutality is totally unacceptable in Zimbabwe,\" MDC national spokesman Daniel Molokelo said in a statement.\nPolitical tension is rising in Zimbabwe, where the population is grappling with a severe economic crisis that has seen rolling power cuts lasting up to 18 hours a day and shortages of foreign currency, fuel and medicines.\nMost public sector doctors have been on a strike over pay since September, which has paralysed government hospitals where the poor seek treatment. Other public sector workers are demanding US dollar-indexed salaries to protect them from soaring inflation.\nCritics say Mnangagwa has failed to keep promises he made during last year's election campaign to revive the economy by pushing through economic reforms, attracting foreign investment to create jobs and rebuilding collapsing infrastructure.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/news/water-canons-batons-mdc-condemns-police-brutality-on-zimbabweans-37637669"}
{"doc_id": "d859560fccfd2d45a6983ecae5e5a267", "text": "Quramo Festival of Words\n1 Oct\nThe Nigerian literary space will from October 4 to 8 come aglow as Quramo Festival of Words (QFest) takes centre stage, entertaining, educating and holding discussions around books, art and culture and the entertainment industry. Holding in Eko Hotels and Suites, Victoria Island, Lagos, the five-day celebration will feature 10 creative workshops, eight panel discussions,…\n10 Sep\nThe Quramo Festival of Words (QFEST), presented by Quramo Publishing Ltd., has announced that the 7th edition of the highly anticipated literary arts festival will hold from October 4 to 8, 2023 in Victoria Island, Lagos.\nLatest\n7 mins ago\nAtletico Madrid striker Antoine Griezmann is out injured after sustaining a \"moderate\" ankle sprain, the Spanish club said Wednesday.\n43 mins ago\nSporting a black cap and shaking hands with his fans, Khalifa Sall, one of the main contenders for Senegal's delayed presidential poll, rallied supporters in a working-class district of the capital Dakar.\n55 mins ago\nJailed Russian opposition figures have been reacting to the death of Alexei Navalny from their prison cells this week, with his former regional aide saying Wednesday that she was in \"mourning\".\n1 hour ago\nVeteran musician Daddy Showkey has expressed his opinion concerning how he stopped DMX and Eedris Abdulkareem from engaging in fisticuffs, during the all African games in 2003. The Afropop singer revealed this during an interview with Daddy Freeze; “The same thing Eedris did with 50 Cent is what he did with DMX at Transcorp. DMX…\n1 hour ago\nIt is true that most of the members of the highly revered Kaduna Elders’ Forum are well aware of the uncommon intellect of the young and the level-headed Governor of Kaduna State, Senator Uba Sani. Not a few of the elders were however confounded, albeit positively, on Monday February 5, when the governor hosted the…\n1 hour ago\nThe Ebonyi State Ministry of Health said on Wednesday that Lassa fever had claimed 14 lives in the state.\n2 hours ago\nThe German government slashed its growth forecast for 2024 on Wednesday, warning that Europe's largest economy was in \"difficult waters\" as it faced a series of headwinds.\n2 hours ago\nThe National Bureau of Statistics (NBS) says the average price of a litre of kerosene dropped from N1,362.27 in December 2023 to N1,329.53 in January 2024.\n2 hours ago\nA former governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, has threatened legal action against the senate president, Godswill Akpabio, for alleged defamation of character.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/quramo-festival-of-words/"}
{"doc_id": "aa6e40eca01e69723962e17bff0ccccf", "text": "The Budget Justice Coalition (BJC) has noted with great concern the communication by National Treasury in late August to all government departments instructing them to implement austerity measures as part of its policy of fiscal consolidation. This is an unprecedented directive that undermines democratic processes.\nCivic organisations that are part of the Budget Justice Coalition include the Alternative Information and Development Centre (AIDC), the Children’s Institute at UCT, Corruption Watch, the Dullah Omar Institute at UWC, Equal Education, Equal Education Law Centre, the Institute for Economic Justice, Oxfam SA, Pietermaritzburg Economic Justice and Dignity Group, the Public Service Accountability Monitor, the Rural Health Advocacy Project and SECTION27.\nThe group said in a media release that “these sudden, immediate measures will only serve to widen the gap between those who are hungry and live below the food poverty line and those who are wealthy. We caution that these budget cuts will have long-term detrimental effects on the economy and the progressive realisation of socio-economic rights protected by the South African Constitution. Moreover, the measures will further impede the state’s ability to increase much-needed capacity in key areas, such as crime prevention, health, education, social development and early childhood services.”\n“While these budget cuts are likely to be felt by all, the gendered nature of poverty, inequality and unemployment means that this approach to the budget will further entrench gender inequality in a context where women already fill the gap caused by austerity measures with their unpaid care work,” it added.\nFurthermore, it said that The National Treasury has led a fear campaign regarding an immediate fiscal crisis. This serves to create an environment of panic in order to ram through these unpopular and unnecessary budget cuts. As a result, stifling progress on key policy reforms such as, among others, National Health Insurance and a universal basic income.\nBJC has called for greater transparency from the National Treasury about the government's financial situation. They also call on the Treasury to acknowledge the true cost of austerity and how they have been weighed these against the options of raising additional revenue. It is not addressed in the 30 August 2023 Statement how the proposed cuts will deepen the country's socio-economic crisis.\nThe BJC has recommended that Treasury implement the following measures:\nTable of all available measures to raise additional revenue, including increasing taxes on wealth, removing tax breaks on high-income earners, and adjustments to corporate income tax.\nCreate a framework that includes participatory human rights impact assessments, including child-centred and gendered analyses of spending allocations to public services so that if cuts are made, there is sufficient reflection on how access to these services will be protected, particularly for the most vulnerable in an economic crisis.\nEngage in further dialogue with members of the public on all fiscal challenges identified, with the aim of receiving and implementing proposed policy changes;\nIt also urged Treasury to engage publicly on all proposed budgetary options for Parliament to exercise appropriate oversight. Where budget adjustments are to be made, they must advance development objectives and rights realisation. Legislators have a constitutional duty to examine and offer possible alternatives to the current financial situation, and such decisions should not be taken unilaterally.\n“As the government prepares for the upcoming Medium Term Budget Policy Statement (MTBPS), it is an opportunity to consider alternatives to cost containment measures that disproportionately impact the most vulnerable sectors of society. Furthermore, the upcoming 2024 elections should serve as a strong reminder that the public requires a government that works for and not against the realisation of constitutional rights and one that stimulates the economy,” it concluded.\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/news/politics/cost-cutting-measures-widely-impacts-poverty-line-cddf14d8-94bc-4467-971b-321d353e622f"}
{"doc_id": "22cff9a8067620a19d67be66c75f1f4e", "text": "Fela\n22 Jan\nNigerian producer extraordinaire, Sarz, has become the latest voice to sing the praises of Afrobeat legend Fela Kuti, highlighting his enduring influence on contemporary artists like Wizkid, Burna Boy, and Rema. In a recent interview with ARZ, Sarz not only acknowledged Fela's impact but also revealed his own artistic engagement with the icon's vast musical…\nLatest\n8 mins ago\nA former governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, has threatened legal action against the senate president, Godswill Akpabio, for alleged defamation of character.\n35 mins ago\nA governorship aspirant on the platform of the Labour Party (LP), Martins Okoukoni on Wednesday said he has withdrawn from the Edo governorship race and would not be participating in the LP primaries scheduled for Friday, February 23rd. Okoukoni made this known in a letter of withdrawal he signed and addressed to Barrister Julius Abure,…\n39 mins ago\nNigeria Customs Service says it is determined to intensify efforts to curtail the menace of illegal exportation of Nigeria’s grains to other African countries, to ensure adequate food security for citizens.\n50 mins ago\nAdult film star Kagney Linn Karter, aged 36, has tragically passed away by suicide in her residence as reported by a GoFundMe page created by friends on behalf of Kagney's mother to fund her funeral. Kagney’s friends Rachel and Megan revealed that despite Kagney’s numerous accomplishments and talents, she had been dealing with mental health…\n50 mins ago\nThe Department of State Services (DSS) has revealed that there are plans by certain elements to use the planned protest by the Nigeria Labour Congress (NLC) to cause crisis in the country. Last Friday, the NLC announced that it would hold a two-day nationwide protest over the hardship being experienced by Nigerians. NLC President, Joe…\n54 mins ago\nThe House of Representatives has resolved to investigate the privatisation and concession of federal government silos across the country.\n58 mins ago\nThe Economic and Financial Crimes Commission (EFCC) has declared Leno Adesanya, promoter of Sunrise Power and Transmission Limited, wanted in connection with an alleged \"conspiracy and corrupt offer to public officers\" related to the $6 billion Mambilla hydropower contract.\n1 hour ago\nThe Nigerian government should address \"arbitrary and ever-increasing\" customs duties, as they are crippling businesses and posing danger to the economy, Peter Obi said.\n1 hour ago\nThe Nigerian government has revealed that the Zungeru hydropower project will produce 2.64bn kWh of electricity annually in the country.\n1 hour ago\nGlobal Pop star Beyoncé has hit a major milestone by landing two new songs on Billboard's Hot Country Songs chart. Her tracks \"Texas Hold ‘Em\" and \"16 Carriages\" debuted at No. 1 and No. 9 respectively. These songs, released on Feb. 11, also made waves on the overall Billboard Hot 100 chart, ranking at No.…", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/fela/"}
{"doc_id": "3f5382f38dab88e2f4c4fae1516d7a3b", "text": "Higher diamond production from Petra Diamonds’ South African mines and a weaker rand helped lift its output and provided financial support for operations in the half-year period to the end of December although revenues declined to $188 million (R3.6 billion).\nProduction for the period was 2% stronger at 1.43 million carats mainly as a result of stronger contribution from the Cullinan and Finsch mines in South Africa, the company said yesterday. However, lower grades at Cullinan “partially offset” the contribution to overall productivity.\n“We continue to make good progress on the CC1E development project at Cullinan Mine and the 78-Level Phase II development project at Finsch, and the resumption of the deferred capital programmes remains on target for July 2024. The re-planning and value-engineering work associated with the deferred capital projects continues,” said Richard Duffy, CEO for Petra.\nThe diamond miner had also been aided by “support from a weaker South African rand (which) continued” throughout the period. The rand had averaged R18.69 to the dollar compared with R17.32 to the greenback in the same period a year earlier.\nDuffy added that there were currently some “encouraging indications of price recovery and some stabilisation in the rough diamond market” globally. However, the company is continuing to “adopt a cautious approach to the market” in the near-term.\nIt expects that once completed, additional headroom from its increased revolving credit facility will enable Petra Diamonds to continue on its “flexible sales approach and position” to take advantage of any pricing and market improvements.\nDuring the period under review, there had also been notable stabilisation in operations at the Finsch and Cullinan Mines in South Africa. The Williamson in Tanzania had continued to ramp up to full production.\nAs a result of this stronger production for the first-half period under review, Petra Diamonds said it is on track to meet its full-year guidance of 2.9 million to 3.2 million carats. However, in November it announced that it expected to meet the lower end of its guided production.\nRevenue for the period under review lowered to $187.8m from the $208.5m in the year earlier same period. This was on the back of a 13.3% lowering in diamond prices realised for the period.\nThe company’s consolidated net debt increased to $212.3m as at December 31, 2023, from $176.8m.\nPetra Diamonds has attributed this to “the timing of closing the company’s sales tenders, the continued lower diamond pricing environment, working capital funding for the resumption of mining at Williamson and the increasing capex spend profile”.\nThere has been stronger demand for capex to fund the life of mine at the company’s South African mines.\nPetra Diamonds missed its production targets for 2023 on the back of weaker demand which muzzled sales. Its output for 2023 was 20% lower compared with the previous year at 2.67 million carats and missed its projected guidance of between 2.75 million carats and 2.85 million carats.\n“With an operational turnaround under way at Finsch, the restart of Williamson ahead of schedule and our capital projects on track to deliver incremental growth, we are reiterating guidance for annual group production to increase by up to one million carats in fiscal 2025 and issuing further guidance of up to an additional 300 000 carat increase for fiscal 2026,” the company said in July.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/interim-revenues-in-petra-diamonds-slump-despite-strong-output-from-sa-mines-3d8fd9b1-85dd-423d-a292-662a47f4ad23"}
{"doc_id": "6f7232855fdc7c36290060970aaeab8d", "text": "Chinese Premier Li Qiang said Tuesday the country's economy was expected to have grown by around 5.2% in 2023, as he addressed an annual meeting of global elites in Davos.\nThe figure would represent an improvement on the three percent recorded in 2022, when tight zero-Covid curbs hammered business activity.\nBut it would still mean the lowest growth since 1990, excluding the years of the pandemic.\n“The Chinese economy generally rebounded and improved last year,” Li said in a speech at the World Economic Forum.\n“Our GDP (gross domestic product) growth is expected to be around 5.2 percent, higher than the target of around five percent that we set at the beginning of last year,” Li said.\nDespite lifting health restrictions, the world's number two economy is still weighed down by a lack of business confidence and sluggish consumption.\nA debt crisis in the crucial property sector and soaring youth unemployment have added to the malaise.\n“No matter how the world situation changes, China will adhere to its basic national policy of opening up to the outside world,” Li said.\nHe added that “the door to opening up will only get wider and wider”.\n“Choosing the Chinese market is not a risk but an opportunity,” he told the audience.\nChinese condemns trade 'barriers'\nQiang also told the world's political and business elites in Davos that “discriminatory” trade barriers were a threat to the global economy - in a not-so-subtle dig at the US.\nLi's remarks came as the World Economic Forum's 54th annual conference is preoccupied with a slew of global risks, including wars in Ukraine and Gaza, climate change and the rapid rise of artificial intelligence.\nUkrainian President Volodymyr Zelensky, who is attending the forum in person for the first time, will speak later as he seeks to shore up support from allies after nearly two years of war with Russia.\nLi spoke just days after tense presidential elections at the weekend in Taiwan, the democratic island that Beijing claims as part of China.\nBut the most senior Chinese official to attend the WEF since 2017 did not address the election and instead focused on trade, his country's economy and AI.\nHe said “new discriminatory trade and investment measures” have been appearing every year and that “any obstacles or disruptions can slow down or block the flow of lifeblood of the world economy“.\nLi did not name any countries but Beijing has tussled with the US and the European Union over trade in recent years, particularly on high-tech and clean energy.\nUS-China trade tensions soared under the presidency of Donald Trump and have continued under President Joe Biden.\nIn October, the US announced tighter export curbs on state-of-the-art artificial intelligence chips, sparking fury in Beijing.\nThe EU, meanwhile, has launched a probe into Chinese electric car subsidies.\nWithout naming a country, Li said that “there are many examples where one side's capriciousness undermines mutual trust with others.”\nBut US and European companies have long complained that of obstacles to doing business on a level-playing field in China.\nUkraine support\nLi was sharing the spotlight with Zelensky, who met with the “CEOs for Ukraine” group and US Secretary of State Antony Blinken.\nKyiv is scrambling to ensure that support from allies does not waver during the biggest war in Europe since World War II, as the world's attention has swayed to the Middle East amid fears of a spillover from the conflict in Gaza.\n“We are determined to sustain our support for Ukraine,” Blinken said after the talks.\nWearing a dark sweater and olive green trousers, Zelensky was greeted with a standing ovation as he entered a closed-door meeting of “CEOs for Ukraine”.\nAI fears\nArtificial intelligence also dominated discussions after last year's flurry of examples demonstrating the technology's dizzying advances.\nDespite the excitement, there are worries about the threats posed by AI.\nMisinformation and disinformation driven by AI ahead of elections in countries, including the US, are the biggest global risks this year and next, the WEF said last week.\nLi said a “red line” must be drawn in the development of AI to ensure that the technology benefits society and not just “small group of people“.\nHe said, “good governance” was needed for the technology and that the world must avoid “camp-based division or confrontation” over AI.\nPresident of the European Commission Ursula Von der Leyen warned that “Europe must up its game” on the technology and “show the way to responsible use of AI”.\nAFP", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/china-economy-grew-around-52-in-2023-premier-b771e0d4-2aa0-46a0-b0fd-c0fec7f8d6d1"}
{"doc_id": "d121bce0ae7083eb1197692ee5e91835", "text": "I&M Bank has become the latest lender to win a tax dispute with the Kenya Revenue Authority following a long-standing confusion that has dogged imposition of excise duty on financial services in August 2012.\nThe lender’s parent firm I&M Group Plc has disclosed that the Tax Appeals Tribunal in March ruled in the subsidiary’s favour over a Sh231.22 million excise duty dispute for the period between January 2014 and September 2018.\nALSO READ: Subsidiaries help lift I&M Q1 profit to Sh2.7 billion\nKRA first hit I&M with a Sh283.51 million tax demand on January 17, 2019 — an assessment which was objected by the bank’s directors as “erroneous”.\nThe taxman lowered the demand to Sh231.22 million on April 15 that year following a review, but I&M challenged the decision before the tax tribunal.\n“The matter was heard on February 16, 2021, and the tribunal ruled in favour of the bank on March 4, 2022,” I&M Group Plc said in its latest annual report.\nKenya became one of the first countries in Africa to enforce excise duty on earnings from financial services in August 2012 amid confusion on what constituted “other fees”.\nThe confusion persisted until 2015 when the Excise Duty Act 2015 excluded interest or return from loans and insurance premiums from “other fees” on which the lenders were to pay duty, but the ambiguity persisted.\nALSO READ: I&M gets Sh227m dividend from Mauritius subsidiary\nBut the confusion between the lenders and the taxman over the definition of interest or return persisted.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/i-m-bank-wins-sh231m-tax-dispute-of-a-decade-3831428"}
{"doc_id": "53cbb31de06c28b31b4e7c1e618667e0", "text": "The embassy of the People’s Republic of China in South Africa kicked-off its Chinese Lunar New Year celebrations, with revelries also knows as the Spring Festival hosted at Time Square in Pretoria, in accordance with the lunar calendar.\nThis year, the Chinese New Year falls on February 10.\nThe year 2024 has been marked as the Year of the Dragon, according to the Chinese zodiac, which features a 12-year cycle, with each year represented by a specific animal.\nThe event was attended by several senior South African government officials and diplomats including Minister of Tourism Patricia de Lille, South Africa’s Ambassador to China, Siyabonga Cwele; and the new Consulate-General of China in Joburg Pan Qingjiang.\nAddressing hundreds of attendees at the glitzy event punctuated by breathtaking performances and cultural performances, Ambassador of China to South Africa Chen Xiaodong said Pretoria-Beijing ties will be bolstered in the new era.\n“This year marks the 75th anniversary of the founding of the People’s Republic of China. It is a key year in the implementation of China’s 14th Five-Year Plan. In the new era, China will continue to stride forward through a Chinese path to modernisation,” said Chen.\n“This year also marks the beginning of the Golden Era of China-South Africa relations. China will host a new Forum on China-Africa Cooperation meeting. These occasions bring new opportunities for China-South Africa relations and China-Africa cooperation,” he said.\n“In the coming new year, we look forward to working with the South African side to better implement our two presidents’ important consensus, strengthen dialogue, exchanges and cooperation, and actively build stronger partnerships.”\nThe senior Chinese diplomat said in the past year, his Chinese compatriots based in South China worked tirelessly to supported China's national advancement and reunification, carrying forward the nation’s fine traditional culture, and actively engaged in the two countries’ exchanges and cooperation in various fields to promote friendship.\n“Many of us also participated in the reception of President Xi Jinping’s state visit to South Africa and made positive contributions to the success of the visit. We not only built a good life for ourselves in South Africa, but also made new contributions to China’s development and China-South Africa relations,” he said.\n“On behalf of the Chinese Embassy in South Africa, I would like to express my heartfelt appreciation to all of our fellow compatriots. Thank you for the dedication.”\nChina has for 15 years in a row been South Africa’s biggest trading partner.\n“In 2023, our bilateral trade volume was US$55.6 billion,” said the ambassador.\n“China-South Africa relations today have gone beyond the bilateral spheres and are carrying stronger strategic significance and global reach. Our relations have set a fine example for China-Africa and South-South cooperation.”\nLooking back, Chen said 2023 was a year in which China forged ahead and made great achievements.\n“Under the strong leadership of the Communist Party of China’s Central Committee, with Comrade (President) Xi Jinping at its core, China made solid strides in building a modern socialist country in all respects and the Chinese economy enjoyed high-quality development,” he said.\n“China’s GDP last year was over 126 trillion RMB, up by 5.2% year-on0year. This growth rate is the fastest among all major economies in the world and China contributes more to global growth than the US, Europe and Japan combined.”\nThe electric vehicles, lithium batteries and solar cells that China exported to the world last year are worth over 1 trillion RMB.\nChen said China also produced nearly one-fourth of the world’s grains, one-third of vehicles, over half of steel and nearly 60% of home appliances.\nIOL", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/news/south-africa/year-of-the-dragon-chinese-ambassador-chen-xiaodong-promises-new-opportunities-in-south-africa-china-relations-244a4f9c-9fb9-40ec-a97c-7c9857530bfc"}
{"doc_id": "6f6125f046089b670997acf409f5f010", "text": "Now that Day Zero has been pushed back to 2019, it is possible to take a step back, draw breath, and consider Cape Town’s water crisis anew. In particular: what was the Day Zero messaging actually about? What role did Tony Leon’s communications agency play in the end? And what does the City of Cape Town wish it had done differently in trying to get Capetonians to get on board? (Spoiler alert: nothing.) By REBECCA DAVIS.\n17 January 2018, and 7 March 2018\nThose have been the two red letter days of the Cape water crisis. It was on 17 January that Cape Town Mayor Patricia de Lille announced that the city had reached “a point of no return” in its water supplies, and Day Zero was now virtually guaranteed in a matter of weeks.\nAnd it was on 7 March that DA leader Mmusi Maimane broke the glad news that Day Zero had been pushed out to 2019.\nComing less than two months apart, the difference in these statements has understandably caused some public confusion. Conspiracy theories now abound, and reached fever pitch in the National Assembly last week when a National Freedom Party MP suggested that Day Zero had been an invention to justify the signing of a R6-billion contract with the Israeli government.\nA more measured but no less irate response was delivered by Janse Rabie, AgriSA’s head of natural resources, who wrote in an op-ed that Western Cape farmers were left feeling “let down and betrayed by government” as a result of the decision to scrap Day Zero as an imminent possibility.\n“Nothing much has changed in the City. The prevailing drought continues unabated. None of the City’s augmentation schemes are up and running yet. The City’s consumption target of 450 Ml/day has never been met. There is no guarantee of the coming winter season’s rainfall being sufficient to break the drought,” wrote Rabie.\nHe suggested that the City “appears to have cried wolf too soon and now needs to backtrack on its expedient Day Zero predictions”.\nOn the other side of the debate, DA MPs have suggested on Twitter that anyone who believes that Day Zero was a myth “needs to get their head read”.\nBut Day Zero was a myth in one sense: in that it was largely a communications tool designed to focus Capetonians’ minds on the severity of the water crisis.\nTaking a look at a year’s worth of communications from the City on the topic of the water crisis, one can separate it into three periods: Ineffectual, Punitive, and Congratulatory.\nIneffectual\nFormal campaigning from the City of Cape Town about the water crisis began in November 2016 with the launch of the “ThinkWater” campaign, with its slogan: “Care a little. Save a lot”.\n“The insight behind this slogan was the fact that many people who have easy access to water take it and its availability for granted and without a second thought,” City of Cape Town Communications Director Priya Reddy told Daily Maverick on Wednesday.\nAt this stage, it’s important to note that Day Zero did not yet exist as a formal concept within the City’s lexicon. On 14 February 2017, the City warned: “We could be looking at about 135 days of usable water left.” There was no indication as to what would happen after that.\nLater that month, Mayor Patricia de Lille did sketch a worst-case scenario – but a wholesale “switching off the taps and queuing for water” was not mentioned.\n“At between 10 and 15% storage levels in the dams, we will implement intermittent supply in some areas, with stringent restriction measures,” De Lille said in a statement. “At below 10% storage levels in the dams, we will be providing a ‘lifeline’ water supply, which would involve minimal supply pressures, intermittent supply, and very stringent restriction measures.”\nIn May 2017, De Lille would host inter-faith prayers for rain on Table Mountain.\nIt was only on 19 June 2017 that the City of Cape Town released an RFI (request for information) for water augmentation schemes, stating: “It is envisaged that the first plants would be available for production towards the end of August 2017.” This was to prove wildly optimistic.\nTwo months later, De Lille would tell the media that it was impossible for water rates to be raised for the remainder of the financial year – concluding at the end of June 2018.\n“Tariffs, inclusive of water and rates, are already established for 2017/2018 and cannot be adjusted,” De Lille said.\n“For this reason, consumers will not face any new costs for the remainder of the financial year.”\nYet, by February 2018, consumers were hit with steep new water tariffs.\nDuring the same press briefing, on 16 August 2017, the mayor would pay tribute to “the extraordinary contribution by the vast majority of our residents to conserving and using water more efficiently”.\nThat friendly tone was soon to change.\nPunitive\nWhat can be thought of as the second phase of the City’s communications strategy around water began in November 2017, when Day Zero was first formally put on the table as a concept.\nOn 15 November 2017, De Lille gave details to the public for the first time as to what Day Zero was and when it was estimated to take place: at that stage, 13 May 2018.\nThis timeline coincides with the arrival of former DA leader Tony Leon’s communications agency, Resolve Communications, which was contracted by the City’s creative agency to work on the strategy.\nReddy told Daily Maverick: “They were brought on board because they offered specific skills and vast experience in government crisis communication strategies and behaviour change.”\nReddy confirmed that it was Resolve who pushed for the adoption of Day Zero as a means to induce Capetonians to change their attitudes towards the crisis.\n“The term was used by members of the public for some time before it was adopted into a formal campaign,” Reddy said.\n“It was Resolve Communications who suggested using the term to mobilise residents to reduce their water use.”\nA weekly water dashboard was launched by the City, offering residents a fluctuating date for Day Zero based on dam storage and water consumption. Over the next four months, the date for Day Zero would vary by as much as five months: from 18 March 2018 to 27 August 2018.\nBy December, the tone taken with Cape Town’s residents had shifted from cajoling to stern, with references to “stubborn” residents “behaving badly”.\nIn mid-January 2018, the City released a water map, enabling people to monitor water usage at residential addresses. The implicit suggestion was that residents police one another. The City said: “Neighbourhoods should have constructive engagements with one another to ensure that their neighbourhood is painted green.”\nIt was on 17 January, however, that things took a decidedly dramatic turn. This was the occasion of De Lille’s now famous “point of no return” statement, announcing that Day Zero was now virtually certain.\n“It is quite unbelievable that a majority of people do not seem to care and are sending all of us headlong towards Day Zero,” said De Lille.\n“We can no longer ask people to stop wasting water. We must force them.”\nIn addition to invoking Day Zero as an inevitability, the mayor announced a raft of punitive new water tariffs in combination with Level 6B water restrictions.\nThis approach, in combination with De Lille’s other political troubles, appears not to have pleased the DA. Exactly a week later, DA leader Mmusi Maimane announced that he was taking the “unprecedented” step of taking control of the water crisis, relieving De Lille of her duties.\nSignificantly, Resolve Communications’ contract with the City also did not extend beyond the end of January 2018.\nCynics might suggest that it was a good time for the DA to seize control of the issue. At the end of January, as a number of water experts had pointed out, the agricultural sector was due to complete its water allocations for the year. This would instantly relieve almost half the demand on the Western Cape water supply. The DA, then, was stepping into a situation which was guaranteed to look a lot rosier in a matter of days.\nCongratulatory\nIndeed, from early February onwards, the situation began to look a lot more positive, and communications from both the City and the DA started to reflect this.\n“Team Cape Town, we are getting there,” was the headline of a statement from deputy Mayor Ian Neilsen – by this stage heading up the water task team – on 12 February. “It is absolutely clear that when we need to pull together in this city, we can do so,” said Neilsen.\nIn fact, a tone of pride began to creep into communications – suggesting that Cape Town would not just prevail, but set an example to the rest of the world.\nCape Town could “become known as one of the most resilient cities in the world”, proposed Neilsen.\nHis second-in-command Xanthea Limberg subsequently declared: “We are confident that Team Cape Town will show South Africa and the rest of the world how to beat a drought.”\nBut Neilsen sounded a word of caution, too. On 19 February, he warned: “We cannot afford to slow down when the estimated Day Zero moves out, simply because we cannot accurately predict the volume of rainfall still to come or when it will come.”\nThe fact that nobody could predict winter rainfall was one stressed by City water officials and meteorologists. Yet just over a fortnight later, without any further indication of impending rains, the DA’s Maimane officially took Day Zero off the table for 2018.\n“This means the taps will stay open in 2018!” Maimane said.\nAmid widespread relief from Capetonians, there was also a sense of confusion. This extended to water experts too, who seemed taken aback by Maimane’s confidence.\nThe WWF’s Christine Colvin was quoted as saying: “We have definitely not defeated Day Zero. It is still as likely to happen as it was a week ago.”\nThe DA’s assertion that Day Zero will not happen has largely been ignored by other bodies; which is to say, in other respects, the prognosis remains unchanged for Cape Town. Ratings agency Moody’s warned on Monday of potentially dire effects of the water crisis on the city and province’s economic situation.\nOn Tuesday, national government finally declared the drought a national crisis, allowing it to access disaster funds from Treasury.\nWriting for Daily Maverick this week, Western Cape Premier Helen Zille explained that the factors which removed Day Zero from the 2018 calendar were fourfold: reduced water consumption; farmers reaching the end of their allocations; donations of private water from farmers; and the coming on board of augmented water sources.\nBut Zille also seemed to acknowledge that Day Zero as a concept was becoming a destructive strategy.\n“While the Day Zero messaging helped us achieve our water saving targets, it also had some seriously negative consequences, especially for the economy,” Zille wrote.\n“The idea of Day Zero hovering on the horizon has had a major effect on the big pillar of our economy, tourism. Visitors stay away from a city at risk of running out of water. Many also cancel their bookings. And this has a knock-on effect through the entire pipeline of tourism offerings.”\nAgriSA’s Rabie also suggested that the Day Zero campaign had had unintended effects.\n“Panicked persons (who could afford to do so) began buying and stockpiling both raw and treated water in anticipation of Day Zero coming about,” he wrote.\n“This disruption of normal consumption patterns created enormous difficulties for City water planners as well as the Department of Water and Sanitation.”\nThe City of Cape Town’s Reddy, however, says the City has nothing to regret in its approach.\n“Of course there are learnings that we will take on board but, by and large, we have had a very successful campaign that has seen perhaps millions of Capetonians changing the way they treat and use water.” DM\nPhoto: Residents of Cape Town collect drinking water in the dark early hours of the morning from a mountain spring collection point in Cape Town, South Africa, 31 January 2018. EPA-EFE/NIC BOTHMA", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2018-03-14-capewatergate-in-the-end-what-was-day-zero-all-about/"}
{"doc_id": "ca75f0da59f1f06a46ff25bd94141cd7", "text": "THE ANC could lose its majority in the general election as a result of government’s failure to resolve persistent socio-economic challenges.\nThis was the warning from Fitch Ratings agency on Friday as it left South Africa's credit rating unchanged at “BB-” with a stable outlook.\nIf the ANC declined to less than 50% and there was no outright winner at the polls slated for May 2024, investors feared this would result in instability as the country would be governed through a coalition of two or more political parties.\nFitch said South Africa’s long-term foreign-currency issuer default rating was constrained by low real economic growth, a high level of inequality, a high and a rising government debt-to-GDP ratio amid a modest path of fiscal consolidation.\nIn a report by Fitch’s senior analysts, the ratings agency said growth in South Africa was hampered by power shortages that were expected to continue in the near to medium term, although at a lower magnitude than in recent months, and by a struggling logistic sector.\nFitch said the ratings were supported by a favourable debt structure with long maturities and mostly local-currency-denominated, strong institutions, as well as a credible monetary policy framework.\nFitch noted the elevated socio-political risks in the country, saying that unemployment moderately declined to 32.2% in the third quarter of 2023 from a record high of 35.4% in the fourth quarter of 2021, but remained much higher than pre-pandemic.\nIt said the high unemployment rate, in conjunction with an exceptionally high level of income inequality, would continue to constrain fiscal consolidation and pose a risk to socio-political stability, with frequent strikes and protests.\n“The African National Congress's dominance over the political landscape has been challenged since the party's poor performance in the November 2021 municipal elections,” Fitch said.\n“We believe the party could lose its majority in the May 2024 general election, but this would be unlikely to result in major changes in economic policy.”\nLast week, the ANC concluded a week-long celebration of its 112th birthday with President Cyril Ramaphosa delivering the party's annual January 8th statement at a packed Mbombela Stadium where he promised an “outright victory”.\nOxford Africa Economics head of macro Jaques Nel said: “The ANC-led government may be bereft of ideas to tackle the country's many challenges, but the party has a plan for winning the elections.\n“Re-election remains the party’s top priority, but disenchanted voters, funding issues and a growing number of alternative parties mean it will be the ANC’s toughest electoral assignment yet.”\nMeanwhile, Fitch is forecasting that real GDP growth will accelerate to 0.9% in 2024 and 1.3% in 2025 from an estimated 0.5% in 2023.\nIt said the economy remained severely troubled by the impact of electricity capacity constraints, a struggling logistics sector and a high level of inequality.\n“Further incremental progress on the 35 priority reforms identified by the government under Operation Vulindlela, launched in 2020, was recorded in the second half of 2023, mainly in the energy and logistics sectors,” it said.\nIn response to Fitch, the National Treasury said the government would focus on raising GDP growth by improving the provision of electricity, logistics and enhancing the delivery of infrastructure over the medium term.\n“Fiscal policy continues to support this approach by stabilising debt and debt-service costs,” the Treasury said.\n“Government reiterates that fiscal consolidation will be implemented through spending reductions, efficiency measures across government and moderate tax revenue measures.”\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/anc-could-lose-its-majority-in-poll-fitch-2ba288bb-4c9a-4a99-974c-519341b196cb"}
{"doc_id": "6cff678a650346ebf96ac80df11cd027", "text": "Zimbabwean President Robert Mugabe on Wednesday accused Britain of trying to seize control of resources in the devastated African nation.\nZimbabwean President Robert Mugabe on Wednesday accused Britain of trying to seize control of resources in the devastated African nation, as his government announced inflation had risen to 2,2-million percent.\nRe-elected last month in a widely condemned vote boycotted by the opposition, Mugabe regularly blames his country’s economic collapse on former colonial ruler Britain and accuses it of plotting to overthrow his government.\nThe 84-year-old leader, in power for 28 years, has branded the opposition Movement for Democratic Change (MDC) a British and American puppet.\n”What is Zimbabwe to Britain? The answer has not been provided, but we know what they want. It’s regime change, so the resources of our country can come under their control,” Mugabe said at the televised launch of a food subsidy programme.\nZimbabweans are suffering chronic shortages of meat, maize, fuel and other basic commodities due to the collapse of the once-prosperous economy, which critics blame on Mugabe’s policies, including his violent seizure of white-owned farms.\nCentral bank Governor Gideon Gono announced on Wednesday that inflation had surpassed two million percent, a figure already calculated by economists, some of whom now put it much higher.\nOfficials in February calculated Zimbabwe inflation at 164 900%, already the highest in the world.\nThe worsening economy could add to pressure on the ruling Zanu-PF party to make concessions to the MDC, which refused to recognise Mugabe’s victory in the June 27 presidential run-off.\nMDC leader Morgan Tsvangirai won the March 29 first round election but was short of an absolute majority. He pulled out of the second round, citing violence by pro-Mugabe militia.\nThe MDC says 120 supporters have been killed since March. Mugabe blames the opposition for the bloodshed.\nAt the urging of African nations, the MDC and Zanu-PF began preliminary negotiations talks last week under South African mediation to seek a framework for more substantial talks on a government of national unity, seen as the only way to avert further violence and a total meltdown of the economy.\nThe talks have made no progress. Tsvangirai demands Mugabe recognise his victory in the March poll and halts violence. Mugabe insists the opposition accept his re-election.\nInflation dragon\nMugabe’s efforts to stop hyperinflation and prevent the devaluation of the Zimbabwean dollar have been a dismal failure.\nHis government imposed a draconian price freeze last year in a bid to ease the plight of consumers, prompting stores to stop restocking their shelves. The move worsened shortages of basic items for millions of Zimbabweans.\nThe central bank also introduced a new dollar, forcing people to exchange their old notes in a process rife with corruption. The currency trades at 300-billion to the US dollar on the black market, over 10 times the official rate.\nMugabe said on Wednesday that the new food subsidy programme, which will issue coupons to buy food, was part of a renewed bid to tackle inflation and control pricing practices.\n”The government is broadening its fight against the inflation dragon, as well as amply demonstrating to the private sector that those who do not cooperate risk pricing themselves completely out of the market,” he said.\nIt was ”a strong message to the corporate sector that the era of unjust price increases has come to an end”. — Reuters", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/article/2008-07-16-mugabe-lashes-out-at-uk-as-inflation-soars/"}
{"doc_id": "06cdb6e18435bc63c3c598334bcee071", "text": "Wycliffe Musalia Mudavadi is credited with saving the country from runaway inflation and resumption of aid when he became Minister for Finance after the 1992 multiparty elections. Mudavadi was the seventh and last Vice President of Kenya – appointed three months before the 2002 General Election after Vice President George Saitoti left KANU for the Opposition.\nWithin KANU the soft-spoken politician came across as more refined and youthful than the older members of the party. He preferred to concentrate on his Cabinet docket and rarely held public rallies like his party colleagues.\nMudavadi’s performance in all the ministries gave him national appeal and the experience required to run Government. When he took over the Finance docket in 1993, the economy was in tatters. There was excess money circulating in the country and the Government had borrowed too much from the local market. The Government had also printed money to use for the election campaigns the previous year, causing hyperinflation. The prices of food and other essential commodities skyrocketed.\nThe country did not have enough money left for individual and business borrowing, precipitating a sharp rise in bank interest rates – as high as 45 per cent in some banks. Mudavadi admitted to Parliament that the Government had printed more money than the country needed during the 1992 elections. At the National Treasury, the Minister began to mop up the currency in circulation. This move won him admiration from the Opposition and the international community.\nMudavadi oversaw the privatisation of local State corporations, won back donor confidence to resume foreign aid and established a strong banking industry. He also resisted pressure to honour payments for contracts the Government had signed. He received support for this move from a former Cabinet colleague, Simeon Nyachae, who argued the Government would collapse if that money was paid.\nAlthough his time as VP was too short for him to leave a mark, two notable things happened during his tenure. First, soon after his appointment, there was a terrorist attack at a hotel in Kikambala on the Kenyan coast. Mudavadi promptly travelled to the area to assess the situation. Second, Ugenya MP James Orengo moved a motion of no-confidence against the Government. Mudavadi defended the Government, saying there was no evidence of the claims and that it was unfair to subject Kenyans to another election. He successfully lobbied MPs to vote against the motion.\nLAZARUS KIPKURUI SUMBEIYWO: Army commander-turned-peace broker\nOne of the watershed moments of President Daniel arap Moi’s presidency was the 1982 attempted coup d’état. Rumours about a coup attempt had started to circulate in June. Occupying the rank of Major at the time, Lazarus Kipkurui Sumbeiywo had tried unsuccessfully to verify the rumours with Director of Special Branch, James Kanyotu. On 1 August the mutiny took place. The President was at his home in Kabarak and Sumbeiywo was instructed to drive to State House Nakuru with some soldiers, guns cocked, ready to shoot anyone who tried to stop them.\nTogether with Rift Valley Provincial Commissioner Hezekiah Oyugi, he was able to convince the reluctant President to leave his house, just in case it was ambushed or bombed. They wanted Moi to travel to the capital, but his Aide-de-Camp (ADC) advised against the idea, as two aircraft were unaccounted for at the Nanyuki Air Base. It wasn’t until the planes had been located and secured that they started for Nairobi, where Moi would address enthusiastic, cheering crowds in Rironi, 15 kilometres before reaching Nairobi.\nIn the aftermath of the attempted coup, Sumbeiywo would be entrusted with the responsibility of writing instructions on how to deal with arrested coup plotters. In appreciation of his efforts, he was promoted to Lieutenant Colonel in charge of personnel at the Air Force.\nHe became Commander at a time when the military was going down a precipice, according to his biography; he had to introduce new regulations that restored discipline in the forces. Servicemen were not permitted to leave the forces without serving for a set period. In addition, he clamped down on officers taking allowances for work they had not done. He also put a stop to the misappropriation of funds, restored the mess hall where officers could assemble, and reinstated written and practical examinations for those seeking promotions. He also stopped the practice of soldiers who had been court-martialled challenging their cases in civilian courts and ensured that soldiers were given better quality uniforms.\n-Moi Cabinets is published in two volumes by the Kenya Yearbook Editorial Board", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001389487/musalia-mudavadi-the-young-minister-who-won-national-recognition"}
{"doc_id": "7c6a367d84278c2eac52f1772f54c8cf", "text": "A month ago, ZIMBOCASH (ZASH) listed their cryptocurrency on Bithumb Global. In our article on the listing, one of the questions we raised was where people getting the crypto would actually use the currency.\nA press release from ZASH yesterday suggests they are taking strides to address that. On Monday, ZIMBOCASH enabled peer-to-peer payments using the token and they claim since doing so they have had 13 000 transactions and 2 400 account activations.\nSeveral ZASH marketplaces have already opened up with goods such as food and personal services being sold peer-to-peer using ZASH. Business all over Zimbabwe may soon be pricing their goods and services and even paying their staff in ZASH.\nZIMBOCASH press release\nThe statement above is exciting but the only issue is it’s not clear where these marketplaces are at the moment. I tried searching online to see if these are online retailers and all I could find was this one group on Facebook and a WhatsApp group.\nWe’ve reached out to ZIMBOCASH so they can share more details regarding the marketplaces and how they will actually work.\nIt would be wise to hold your horses on transacting until you are actually aware of how exactly ZASH is being valued and which marketplaces and sellers are legit.\nThe DStv seller in the above pictures is one example of what seems like a dodgy seller – the seller is promising lifetime access to DStv for 20 000 Zash which is about US$60. Sounds too good to be true if you ask me.\nInterestingly, we’ve also seen people already seen demand for the currency and offering to trade the currency for EcoCash;\nIf ZASH is indeed gaining as much traction as the company is saying they have started off strongly. ZIMBOCASH will need to figure out how to take the network offline since users need an internet connection to send to others on ZASH.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2020/06/zimbocash-activates-payment-platform-claims-to-reach-13-000-transactions-in-48hrs/?amp=1"}
{"doc_id": "359cb04d856a70cdf2370beaca47501a", "text": "Africa's dream of thriving e-commerce is taking shape following the rollout of an online trade platform.\nThe initiative, launched on Monday, is part of the continent’s plan to accelerate its move towards plugging into, and reaping the rewards of, the global digital economy.\nInnovators and businesses across the continent will now enjoy a one-stop platform from the African Continental Free Trade Area (AfCFTA), which eliminates hurdles in cross-border transactions while also reducing tariffs on 90 percent of all goods traded.\nAfCFTA secretariat told Digital Business that the project also seeks to help business owners find funding for their innovations, an initiative it believes will boost trade across the continent ahead and after the January 1, 2021 timeline for the commencement of the free-trade programme.\n\"The quick launch of the AfCFTA group of apps and the Vision Challenge to resource our innovators and entrepreneurs with the key instruments to drive trade on the continent shows the unique passion being invested in this enterprise,\" said Francis Mangeni, director of trade promotion and programs at the AfCFTA Secretariat.\nThe same app is also meant to issue every organisation or business interested in benefiting from the initiative a \"trusted identity\" so that it can find partners across Africa, export and import goods under the low duty regime, and satisfy some digital identity requirements at banks and financial institutions.\nThe AfCFTA App which can be downloaded online is also a knowledge creation and sharing platform and a bridge to the upcoming African Trade Observatory.\nThis comes barely two weeks to the extraordinary Summit of the African Union Heads of State slated for December 5, 2020 that will take many critical decisions about the direction of AfCFTA.\nThe project could be Africa's \"biggest opportunity\" to transform its economy into a global powerhouse since it is now the world's biggest free trade area in terms of participating countries, with a combined population of 1.3 billion people.\nThe secretariat hopes that the app will be the enabler of its broader vision.\nThe platform is an African Union initiative in partnership with Sankoree Institute, an affiliate of AfroChampions. The two said they intend to propel the project to success with the backing of the continent's development finance institutions.\n\"It is true that Africa has seen a number of trade agreements at regional level, but AfCFTA is different because it is being set up as the ultimate programme to fulfill the dreams of the founders of the African Union: a truly single market big and strong enough to compete for the biggest of global opportunities,\" added Mr Mangeni.\nOnce fully operational, economists say AfCFTA would considerably expand intra-Africa trade whilst helping the continent move up the value chain in multiple industries, helping achieve the vision of Agenda 2063 of a united, prosperous continent relating on equal footing with its peers on the global stage.\nFounder of Harare-based technology and energy company Econet, Strive Masiyiwa acknowledges the power of digital technologies in growing businesses and African economies.\nHowever, according to him, to attain inclusive benefit from the new technologies, where all 54 nations walk at the same pace, African governments must design a workable plan.\n\"Digital tools have enabled entrepreneurs access markets and have also supported governments to deliver services more efficiently to citizens. But without visionary planning and 21st century skills training for everyone, these same technologies over time could lead to job losses and escalate financial inclusion snags,\" he cautions.\nHe gives the example of the global Artificial Intelligence (AI) market which is estimated to be worth over Sh1.8 quadrillion and this money, it emerges, will be split between the United States and China who will take up 70 percent of it.\n\"Of the remaining 30 percent, the African bloc should strive to get at least 10 percent. Let's create our own version of Silicon Valley, our own platforms whilst including everyone,\" he remarks.\nAU commissioner for Trade and Industry, Albert Muchanga recently pledged AU's commitment in utilising AfCFTA to foster digital sovereignty through innovation harnessing digital technologies but said internet penetration is still way below the global average.\n\"We have prioritised creating an enabling environment for the digital platforms to adopt the digital transformation strategy. A plan is in place for September 2021 to provide a platform to 150 youth across the continent on a competitive basis to interact with professional tech players and probably have their start-ups funded by the partners,\" he noted.\nProf Bitange Ndemo of the University of Nairobi's Business School calls for more commitment towards the actualisation of the trade bloc, to ward off vulnerability to technological manipulation by the developed world, as African states remain stuck in disjointed progress in the Fourth Industrial Revolution.\n\"Time is running out for the unification of all 55 nations. We need to enhance efforts of strengthening AfCFTA which will be a 1.3 billion people digital single market for Africa to negotiate in the global digital economy. We cannot compete as independent nations, we have to unite so that the world can listen to us,\" he remarks.\nA recent research study, E-conomy Africa 2020, released by Google and the International Finance Corporation, estimates that by 2025 the internet economy will contribute Sh19.5 trillion to the Africa's GDP, with a projection of Sh77.5 trillion by 2050.\nDriving the continent's digital transformation is a combination of modern innovations in the fields of fintech, e-commerce, telemedicine, edtech, entertainment, transport, food delivery and e-logistics.\nSince 2000, the number of people with internet access has grown to over 520 million, which is 40 per cent of the population; with 60 per cent of them accessing the internet via mobile phones.\n\"Increasing internet access to reach 75 per cent of the population could create 44 million jobs. By 2025, 167 million more people from Africa will have subscribed to mobile services, reaching 623 million users, and smartphone connections in the region will more than double,\" the report projects.\nSome 144 mobile money services are available across Sub-Saharan Africa, serving more than 469 million registered accounts, with daily transactions amounting to over Sh130 billion by the end of 2019, compared with 298 million registered accounts for traditional bank accounts in 2017.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/inside-africa-new-plan-to-tap-power-of-e-commerce-3210002"}
{"doc_id": "446c285702f61a633570537075cba8d0", "text": "Advertisement\nEconomy shrank by 5% — Report\nInvestment firm C-nergy Ghana says even though the economy has doubled in nominal cedi terms since 2017 to 2023, in dollar terms, the economy shrank by 5 per cent.\n“In cedi terms, nominal GDP has grown at a compounded rate of 19 per cent year-on-year between 2017 and 2022. In USD terms, however, Ghana’s nominal GDP has grown by less than 5 per cent year-on-year. In 2022, nominal GDP in USD terms actually decreased from USD 79.14bn to USD 72.84 bn”.\nThis was contained in its 2024 Budget Review Document made available to the Graphic Business.\nReviewing the economy over the past 7 years, C-nergy said nominal GDP has certainly more than doubled from GH₵262 bn in 2017 to over GH₵610 bn in 2022 in nominal terms and was projected to grow to over GH₵850 bn by the end of 2023.\nEqually worrying, according to the investment firm, is that the “rapid growth in the country’s Gross Domestic Product (GDP) is on the back of the wholesale and retail trading which gives an indication of the dominance of imports in the country’s economic activity.\nThe forecast is that Ghana’s GDP will hit the GH₵1 trillion mark in 2024 on the back of a modest 2.8 per cent growth during the year.\nGhana’s nominal GDP in value terms has grown from GH¢262 billion in 2017 and projected to grow at GH¢1 trillion by the end of 2024, Finance Minister, Ken Ofori-Atta, said recently during the Budget reading on November 15.\nAccording to the investment firm, Ghana’s GDP growth forecast of 2.8 per cent for 2023 – 2024 that takes us to the GH₵1 trillion mark is still significantly lower than the forecast for our peers such as Cote d’Ivoire (7.1%), DRC (7.1%), Benin (6.1%), Kenya (5.8%).\nSome analysts have suggested that the talk of GH¢ 1 trillion economy should be inclusive; this was echoed by C-nergy, saying “we can only celebrate this as a milestone if it is an improvement in productive activity driven by an expansion in industrial, agricultural or services activity which drives employment, macroeconomic stability, greater equality in income distribution and above all a better standard of living for the ordinary Ghanaian”.\nIn addition, the GH¢1 trillion can be trumpeted as an achievement if it puts Ghana on the pedestal of the league of flourishing developing countries.\nIn essence, attaining the GH₵1 trillion mark is worth mentioning, but may not necessarily represent any remarkable growth in domestic output.\nIt may not necessarily reflect an improvement in standard of living (from a per capita GDP growth perspective) or better purchasing power for the ordinary Ghanaian.\nSectoral Analysis\nTouching on government flagship programmes, the investment firm noted for instance that while there have been tremendous achievements under the Free Senior High School (Free SHS) policy over the past seven years, expenditure on education was still far below our peers in the sub-region.\nGhana’s expenditure on education is 2.9 per cent of GDP as compared to 3.6 per cent in the sub-region.\nTo this the investment firm recommended additional funding to the educational sector to make the country a net exporter of human resources in the sub-region,\nIt also called for investment in the basic level as investments in that sector has slowed since the advent of the Free SHS policy.\nRoads Infrastructure\nC-nergy noted the investments in the road sector was commendable.\nIt, however, suggested that the completion of the three major roads, the Accra-Tema Motorway, the Accra-Takoradi and the Accra-Kumasi highway would have significant impact on the cost of doing business and food prices in the country.\n“Perennial delays in issuing payment to road contractors for completed work is the most cited factor dampening appetite for road investments in Ghana. Interventions such as road bonds, road tolls and aggressive Public Private Partnership hunting are needed,” it stated among other recommendations.\n1D1F\nC-nergy analysis recommended that the 1D1F must focus on manufacturing products for which Ghana has a competitive advantage.\n“Our abundant arable land, youthful population and agriculture-friendly climate to name but a few make the case for why our industrialisation strategy must revolve around the agriculture sector,” it said.\nLeveraging the agro-processing industry would be prudent as the majority of our agricultural exports are unprocessed. The hurdles to successful industrialisation centred on agro-processing are fewer than those of the many other industries under the 1D1F (e.g. steel and aluminium fabrication) for which feedstock remains a challenge.\nProcessing staple foods such as rice, tomatoes, cassava would easily lead to import substitution and increased exports in due course.\nThe success of local fruit juice brands Ekumfi Juice and Blue Skies in export markets is evidence of the huge potential for the agro-processing industry to spearhead industrialisation, the investment concluded.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.graphic.com.gh/business/business-news/economy-shrank-by-5-report.html"}
{"doc_id": "dc5c3d79690a02bd798901e92e7cd095", "text": "South African fashion retailer The Foschini Group (TFG), through its Labs division, has acquired digital shopping platform and last-mile delivery provider, Quench.\nThe Quench acquisition, TFGLabs said, will enhance the company’s existing capabilities across the fulfilment network through proprietary software and engineering, “bringing a scientific approach to planning, least-cost routing and asset utilisation”.\n“With this acquisition, we gain access to fast, reliable delivery across South Africa while achieving superior delivery unit economics. With 75% of orders currently fulfilled from stores, Quench’s network of micro-carriers will become an essential enabler for our ‘ship-from-store’ strategy,” said Claude Hanan, co-head of TFGLabs.\nTFG is a leading retail group in South Africa with 29 retail brands that trade in fashion, value, jewellery, accessories, sporting apparel, cellular, homeware and furniture. the group has over 4,300 outlets in 26 countries and employs more than 34,800 people with over 26.4 million customers.\nFinancial results\nIn November, TFG reported a headline loss for the six months ended September 2020, citing store closures as a result of the Covid-19 pandemic.\nThe group reported a headline loss per share of 91 cents, down 117.1% from headline earnings per share of 531.2 cents per share previously.\nIt also highlighted the dilution impact of its R3.95 billion rights offer, and the acquisition of 382 stores and selected assets of Jet from Edcon as reasons for its earnings drag.\nThe big shift to online shopping and the growth of its mobile sector were among the few highlights for TFG.\nIt said that while trading conditions remain uncertain during the Covid-19 pandemic, it is able to leverage growing demand in e-commerce and is continuing to invest in that segment. Online turnover, it said, now contributes 14.4% to group retail turnover.\n“Our continued investment in our brands, digital transformation initiatives, e-commerce platforms and vertical quick response supply chain capacity, will continue to benefit the group.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/543612/tfg-acquires-digital-shopping-and-delivery-group-quench/"}
{"doc_id": "1d291ed7c50124a8f5b64563e835bc64", "text": "South Africa’s finance minister will honour an over-budget wage increase for public servants despite fiscal constraints while also looking at proposals to cut down the size of government.\nThe government won’t renege on a two-year wage agreement struck in March to give employees a 7.5% increase, though it had budgeted for a 4.5% raise, Finance Minister Enoch Godongwana told lawmakers when he tabled his mid-term budget statement on Wednesday.\nThe deal will come at an additional cost to the Treasury of R23.6 billion, Godongwana said. Government departments will have to find the remaining 10.1 billion rand through reprioritization of budgeted funds.\nCompensation accounts for almost a third of state expenditure after rising by an annual average of two percentage points above the inflation rate for the past decade, contributing to widening budget deficits.\nThe government plans to contain the wage bill by encouraging employees to take early retirement and placing restrictions on the filling of non-critical posts.\nThe government remains committed to plans to “reconfigure” the state by reducing the number of government departments and cabinet positions, Godongwana said.\nThat would realise savings previously projected at around R30 billion. The actual figure will be determined by how long it takes to implement the changes and the cost of retrenchments.\nLabour unions have argued that the wage bill is not responsible for high expenditure but rather the size of President Cyril Ramaphosa’s executive.\nSince he came into office in 2018, Ramaphosa has committed to shrinking the cabinet, but it has instead grown with the addition of new departments in order to accommodate his political allies.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/budget-speech/728785/r24-billion-allocated-for-over-budget-public-worker-wage-increase-2/"}
{"doc_id": "09c018f1c9efe6425586df203e8b33bd", "text": "“I am in favour of reducing all budget items. But the item I don’t want to reduce is the pension expenditure because it affects the weakest part of the society”\n– Mariano Rajoy\nPresident Muhammadu Buhari on August 3rd 2015 directed the National Planning Commission (NPC) to review the framework for the 2016 national budget with a view to reducing recurrent expenditure and prioritizing developmental projects. It is not clear the role that the Ministry of Finance will play given that it has hitherto been producing the Medium Term Expenditure Framework (MTEF) and the annual budget.\nParticularly, the Budget Office of the Federation, a division the Finance Ministry, designs and produces the MTEF and the Annual Budget. Section 13(1) of the Fiscal Responsibility Act (2007) empowers the Minister of Finance to prepare the MTEF and in doing this, shall seek inputs from other agencies including the NPC. Furthermore, section 18(1) of the Act provides that the MTEF shall be the basis on which the annual budget is prepared.\nAlthough the federal cabinet is yet to be constituted and a finance minister not in place, directing the NPC to work with the Finance Ministry would have been more appropriate. However, the objective of this piece is not to discuss the intrigues that have characterized operations of the NPC and the Finance Ministry over the years as it concerns the budget; rather, it is argued that changing the composition of the federal budget will require difficult and unpopular choices. These decisions cannot be taken by either the NPC or the Finance Ministry.\nThe structure of the federal budget, like any financial plan, comprises projected revenues and proposed expenditures. The revenues used to fund the federal budget come from the share of proceeds accruing to the Federation Account (oil revenues, Customs & Excise revenue, and Corporate Income Tax), the share from the Value Added Tax Pool and the independent revenues like remittances by revenue-generating agencies, dividends from investments, proceeds from privatization, etc.\nOn the expenditure side, spending comprises statutory transfers, debt service and expenditures by the Ministries, Departments and Agencies (MDAs). Statutory transfers are the mandatory expenditures to the National Judicial Council, Niger Delta Development Commission (NDDC), Universal Basic Education Commission, Independent National Electoral Commission, National Assembly, and National Human Rights Commission. The debt service is the interest and principal that government pays on its debts while the MDA outlays are monies spent on recurrent and capital projects. While recurrent expenditure comprises personnel costs, overheads, pensions and other service wide votes, capital spending is used to provide infrastructure such as roads, water and power, etc.\nA review of the Appropriation Acts between 2000 and 2014 shows that the Federal Government expended a total of N39.8 trillion of which N19.8 trillion was on recurrent expenditure, N12.7 trillion on capital expenditure and the remaining N7.3 trillion on other issues such as the statutory transfers. This means that on average about 32 per cent of the total expenditure between 2000 and 2014 was for capital expenditure. If the supplementary appropriations as well as capital components of statutory transfers and SURE-P are taken into consideration, then the ratio of capital spending to total budget will increase for the period.\nLooking at the breakdown of the 2014 budget, the total expenditure of N4.642 trillion comprises statutory transfers of N399.69 billion (of which N166.23 billion was for capital spending), debt service of N712 billion (15.3 per cent of the budget), recurrent non-debt expenditure N2,430.66 billion (52.4 per cent of total budget) and capital expenditure of N1,100.61 billion. The breakdown of the recurrent non-debt expenditure shows that personnel cost was N1,723.31 billion (37.1 per cent of total budget), overheads of N216.77 billion (4.7 per cent of total budget), pensions of N187.45 billion (4 per cent of total budget) and other service wide votes of N303.14 billion (6.5 per cent of total budget).\nFrom the breakdown of the 2014, it is obvious that the wage bill (including pensions) is huge. But why is this so? This is so because between 2009 and 2011, government wage bill increased significantly due to pressures by labour unions and the enactment of the National Minimum Wage (Amendment) Act of 2011. When juxtaposed against increases in pension obligations which are linked to the wage increases, then the federal wage bill obviously had to go up. To address the challenge of the enormous wage bill (excluding pensions), the government will need to take the hard and unpopular choice of salaries reduction and/or downsizing.\nPensions of senior citizens must continue to be paid as at when due, but the process has unfortunately been abused in the past. The setting up of the Pension Transition Arrangement Department (PTAD) by the previous administration is helping to address the problem. On debt service, government must continue to meet its contractual obligations without which the country runs the risk of ratings downgrade. The best that can be done here is seeking restructuring and rescheduling of matured obligations. Government can certainly rein-in on overheads and the service wide votes components of recurrent non-debt expenditure, both of which sum up to N519.91 billion or 11.2 per cent of the 2014 Budget. Most MDAs repeat same line items like computers, photocopiers, etc., in every year’s budget, thereby increasing overheads. Also, the line items in the service wide votes should be reviewed so as to remove unjustifiable expenses.\nIn close, it will be erroneous to think that Nigeria will get out of the woods by merely reducing recurrent expenditure component of the federal budget. The question to ask is: does the state of infrastructure in Nigeria today reflect the N12.7 trillion capital votes (excluding supplementary budgets and capital component of statutory transfers) between 2000 and 2014?\nPresident Buhari should not only be interested in reducing recurrent expenditure, but must also scrutinize how capital expenditures are expended. Tanzi and Davoodi (1998), in their IMF publication titled ‘Roads to Nowhere: How Corruption in Public Investment Hurts Growth’, show that there is a link between capital expenditure and corruption. Nigeria should and must increase its capital spending given its infrastructure deficit. However, increasing capital outlays without putting in place appropriate measures to improve the quality of spending will result in increased corruption.\nMaxwell Ekor", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/buhari-and-the-directive-on-recurrent-expenditure/"}
{"doc_id": "767fb6cd9ba2d41d2c35b3bee11a101a", "text": "RealityTV\n5 Nov\nBig Brother Naija Reality Television star and actress Dorothy Bachor was in the GuardianTV studio last week and was engaged in a 'This or That' game with Lois Ogunniyi.\nLatest\n15 mins ago\nWhy \"Gone with the Wind\" made movie history, \"Asphalt Cowboy\" exorcised prudery from Hollywood and Bong Joon-ho's \"Parasite\" catapulted the Oscars into the 21st century. Arts Unveiled journeys through nine decades of the Academy Awards.\n15 mins ago\nProtesters in Argentina have demanded that President Javier Milei scrap the reforms, arguing that they will only benefit the wealthy. The reform bill contains hundreds of articles including privatization and cutting state subsidies.\n1 hour ago\nSince February 24, 2022, Russia's full-scale invasion has had a huge impact on Ukraine, but also the European Union. To tackle inflation and other economic consequences, the EU has taken measures to try to shield its inhabitants from the cost-of-living crisis. We take a closer look.\n1 hour ago\nEurope Now brings you a special programme from Kyiv to mark the second anniversary of full-scale war in Ukraine. The fighting has killed and injured hundreds of thousands of people and left around a fifth of Ukrainian territory under Russian control, but this has not deterred Kyiv from seeking full membership of the European Union. In this first part of the show, we focus on Ukraine's reforms and its cultural heritage.\n2 hours ago\nLina Soualem's latest film looks back at four generations of Palestinian women, with her mother, actress Hiam Abbass, serving as a guide to their family history. \"Bye Bye Tiberias\" charts their displacement from the shores of the Sea of Galilee to the village of Deir Hanna, using home videos and archive footage to place this very personal story within its larger historical context.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/realitytv/"}
{"doc_id": "639c587d0d219c07494f78fbd3fe17ef", "text": "Global food prices began the year on a buoyant note, as the Food And Agriculture Organisation (FAO) Food Price Index averaged 164.8 points in January 2019, up 1.8 percent from the previous month.\nA sharp rebound in dairy price quotations and firmer prices of palm and soy oils drove the increase, the United Nations agency said this week. The Food Price Index, an indicator of the monthly changes in international prices of a basket of food commodities, was still 2.2 percent below its January 2018 level.\nThe FAO Cereal Price Index averaged 168.1 points in January, up marginally from December. Prices of the major grains were generally firm amid tightening export supplies and robust world demand.\nThe FAO Vegetable Oil Price Index rose 4.3 percent from the previous month, led by palm oil values responding to a seasonal production decline in the major producing countries. International soy oil prices also rose on the back of robust import demand for South American supplies.\nThe FAO Dairy Price Index rose 7.2 percent from December, reversing seven months of falling prices. Limited export supplies – due to strong internal demand – form Europe were the primary factor behind this, along with anticipated seasonal tightening of export availability from Oceania in the coming months.\nThe FAO Sugar Price Index rose 1.3 percent, a move largely influenced by the appreciation of the currency (Real) of Brazil, the world’s largest exporter, against the U.S. dollar.\nThe FAO Meat Price Index was almost unchanged from December. The January value was calculated assuming stable meat prices in the United States of America, where official data were not available due to the government shutdown. Elsewhere, international price quotations for bovine, pig and poultry meat remained steady, while ovine meat prices declined in step with ample exportable supplies in Oceania.\nOutput trends going forward\nIn its latest Cereal Supply and Demand Brief, also published this week, FAO lifted the world’s 2018 cereal production estimate to 2 611 million tonnes, reflecting upward revisions of maize, wheat and rice.\nProduction prospects for wheat are positive for 2019, with the early outlook pointing to significant rebounds in the European Union and the Russian Federation.\nProspects for maize, soon to be harvested in the Southern Hemisphere, are generally strong in Argentina and Brazil, while dry weather has adversely affected plantings and yield prospects in South Africa.\nFAO raised its estimate of world cereal utilization in the 2018/19 season to 2 657 million tonnes, which would represent a 1.7 percent increase from the 2017/18 level. The use of grains to feed livestock is expected to increase, with Australia needing more wheat due to the impact of dry weather on grazing pastures and China, Mexico and the U.S. expanding the use of coarse grains to an all-time high.\nAs utilization is foreseen to outpace output, world cereal stocks are projected to fall by 45 million tonnes, or 5.6 percent, from their record-high opening levels. This would result in the world stocks-to-use ratio for cereals declining to 28.5 percent, down from a nearly two-decade high of 30.8 percent in 2017/18.\nInternational trade in all cereals will likely approach 416 million tonnes in the 2018/19 marketing season, marginally below the 2017/18 record volume, according to FAO’s latest forecast.\nCALEB OJEWALE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/agriculture/article/fao-food-price-index-rises-in-january/"}
{"doc_id": "7275f6a7f72e87a0672060e41e7fead6", "text": "The concept of Life Rights in real estate has become a popular retirement model across the globe. This approach to retirement, often referred to as the ‘right of occupation,’ is achieving significant acclaim in the United States, Australia, and New Zealand, and according to some local industry players, South Africa is on the same trajectory.\nGenerally speaking, life rights in property developments are supposed to offer a supported retirement lifestyle within a maintained and managed environment, which is what seems to be attracting the older guard. Upon the death of a life rights holder, the right to use the unit reverts back to the owner of the complex, who can then resell it. In life, it remains an inalienable right, which means it cannot be transferred to another person and is impossible to take away. But that being said, investors need to keep in mind that there are strict rules on occupancy, and only the life rights owner and their spouse may live in the unit, and it cannot be passed or endowed to someone else on the death of the unit holder.\n“Unlike full title property ownership, life rights ownership entails purchasing the right to use the property for the remainder of your life, with the security of tenure forming the foundation of this type of contract,” said Sue Torr, managing director at Crue Invest. “Life rights ownership in a retirement village is an attractive and affordable option for many seeking community, security, and peace of mind, although it is important to understand the financial consequences of buying into such a scheme.”\nAccording to John Chapman, Director at Rabie, the fundamental distinction between life rights and sectional title offerings hinges on the form of ownership. When you invest in a life right, you are securing a leasehold over a property, managed by the developer, which allows you to reside in your home for the entirety of your life or your partner’s life and you are fully protected by the Retired Persons Act.\nThe Rabie Property Group launched its brand, Oasis Life, in 2018, and it exclusively adopts the life rights model.\n“One of the primary differences between investing in life rights rather than traditional property ownership is the management structure,” said Chapman.\n“In a sectional title development, homeowners manage the scheme themselves, which can lead to challenges as residents become less inclined to invest in infrastructural improvements and property maintenance as they age, resulting in disputes among body corporate members, particularly when unforeseen special levies are tabled. In contrast, with the life right model, the developer takes responsibility for the property in terms of common area management and facilitates the process of structural maintenance and repairs needed in your home. This affords residents multifaceted benefits as the life right holder simply bears the responsibility for interior maintenance of the home. “\nHe added that a reputable developer adopting the life right model, should take a long-term view of profitability and take full responsibility for the success of the estate, ensuring the interests of the developer and Life Right holders are aligned. “This is different from the view in a Sectional Title scheme where the developer sells out the development and hands it over to a Body Corporate or Home Owners’ Association. You’ll find that a reputable developer takes a committed and involved approach to a Life rights-based retirement village. “\n“The majority of retirees seek financial security, as unforeseen expenses become a burden. The life rights model is financially beneficial to the retiree market due to its predictability, allowing purchasers to meticulously plan for their future financial needs. As a life right holder, you should enjoy the reliability of predictable costs, including upfront fee savings with no VAT or transfer duty applicable on sale or resale, predictable levy increases of CPI or 6% (whichever is greater), as well as freedom from the financial burden of unexpected special levies,” he added.\nThe emphasis on reputability is key, as one reader wrote to Personal Finance recently about the development of a Retirement Village in Umkomaas in KZN. It is also about getting the right advice from a trusted financial planner. But here is his story.\nA new unit was priced at R1 395 000.00, and he was obliged to pay a deposit of 25% in January 2018. This village was being built in stages, and the builders are in the process of completing phase 4, making a total of approximately 350 completed units. “There will ultimately be 6 or 7 Phases,” the reader said.\n“Our unit was finally completed in June 2019, and the keys were handed over to us on 27 June, when the outstanding balance became due, but as we had not as yet sold our house we were unable to pay this amount. We finally sold it in October of that year but only received the money in February 2020 and paid the balance of R1 131 896.69, which included interest, on 12 February 2020. The interest rate which we were charged, was increased every month that this money remained outstanding. I then realised that I had not been paid any interest on the deposit, which they had held for 18 months. When I queried this, I was told that they did not pay any interest on any of the units in Phase 1, as this Phase was under construction.\nBy not paying interest on this deposit, it means that they dishonestly, and in my opinion, illegally increased the price. We had to draw the money for the deposit out of our investment thus losing 18 months' worth of interest, while they had the benefit of this money. I must also point out that there is nothing in the Sales Agreement saying that we would not be paid interest, and we were never advised of this fact.”\nPersonal Finance confirmed with industry experts that a legal obligation to pay interest on a deposit of any sort does exist and advised the reader to contact the Community Schemes Ombud Service (CSOS). He is waiting for their reply.\nThe crux of the matter is that no matter where your funds are vested when it comes to lump payments in any form, it is best to contact your financial adviser to assist you in the transition in or out of any form of asset.\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/property/the-life-rights-experiment-property-retirement-model-uncovered-3e4bbfd9-6311-414e-89b3-c9251dc0806c"}
{"doc_id": "4e13222563d83bf6aed4c6cbd1f772f3", "text": "The family of Peter Mukuha Kago, the founder of Naivas, is set to sell an extra 11 percent stake in the company for an estimated $41.7 million (Sh5.8 billion) in a deal that will see foreign investors take controlling ownership of Kenya’s largest supermarket chain.\nThis will be the third time the Mukuhas will be selling their shares in Naivas, which has become an investors’ magnet on the back of profitability and market share growth.\nThe latest proposed deal has been disclosed by Mauritian conglomerate IBL Group, which is part of a consortium that bought a combined 40 percent stake in Naivas last year for $151.97 million (Sh21.4 billion at current exchange rates).\nThe deal, if concluded, means that Kenya’s three largest supermarkets will now be controlled by foreigners.\n“The … company will subscribe to additional shares in Mambo Retail Ltd,” IBL said in a disclosure to its investors.\n“The proceeds of the subscription of shares will be utilised by Mambo Retail Ltd to acquire an additional 11 percent in Naivas International … the leading retail chain in Kenya which will result in Mambo Retail Ltd holding 51 percent of the shares in Naivas International Ltd.”\nMambo Retail is the investment vehicle through which IBL, French fund Proparco and German fund DEG currently hold a 40 percent stake in Naivas International, which in turn fully owns the operating subsidiary Naivas Limited.\nThe proposed transaction will see the Mukuhas’ interest in the supermarket chain drop from the current 60 percent to 49 percent, making them minority shareholders.\nThe family’s investment vehicle –Gakiwawa Family Investments— has been offloading its shares in recent years in multi-billion shilling deals bucking the trend of local founders of other retail giants such as Nakumatt Holdings and Tuskys holding onto their stakes only to see their fortunes evaporate with the collapse of those ventures.\nThe Mukuhas used to own 100 percent of Naivas until 2020 when they sold a 31.5 percent stake for Sh6 billion to a consortium comprising the International Finance Corporation (IFC), DEG and private equity firms Amethis and MCB Equity Fund.\nThe money was spent on fuelling the retailer’s growth across the country, with the ownership of the Mukuhas falling to 68.5 percent but becoming more valuable as the supermarket operator witnessed a profitable expansion.\nIn June last year, the IBL-led group reached a deal to buy the 31.5 percent stake held by IFC and its co-investors at a cost of $119.68 million (Sh16.8 billion).\nThe group also acquired an additional 8.5 percent stake from the Mukuhas for $32.29 million (Sh4.5 billion), marking the first time the family cashed out of its investment through sale of shares.\nThe family stands to receive at least Sh5.8 billion from the new deal, based on last year’s transaction which valued the retailer at $379.9 million (Sh53.5 billion at current exchange rates).\nThis makes it one of the most valuable privately held companies in Kenya, with its valuation exceeding the market capitalisation of publicly traded BAT Kenya (Sh44 billion) and Stanbic Holdings (Sh46.6 billion).\nIt was not immediately clear whether IBL’s partners DEG and Proparco will also provide new capital that will be used to buy the extra shares from the Mukuhas.\nIBL currently holds an effective stake of 26.32 percent in Naivas through its majority ownership of 65.8 percent in Mambo Retail.\nIt is followed by Proparco and DEG whose indirect interest in the retailer stands at 8.29 percent and 5.39 percent respectively.\nDEG reinvested in Naivas alongside IBL immediately after being bought out along with the earlier investors –IFC and the PE funds.\nThe deal underlines IBL’s confidence about Naivas’ future prospects, with the retailer being the most important among a string of investments it has made in Kenya, including buyouts of a solar firm (Equator Energy) and a pharmaceutical distributor (Harley’s).\nNaivas grew its profit to Sh2 billion in the nine months ended March, according to disclosures by IBL.\nPrevious disclosures showed that the retailer reported sales of Sh65.1 billion in the year ended June 2021 when its net profit stood at Sh2 billion, representing a net margin of 3.18 percent.\nThis was an improvement from the prior year when it made a net income of Sh1 billion on sales of Sh54 billion, amounting to a net margin of Sh1.9 percent.\nEstablished in 1990, Naivas has grown to become the largest supermarket chain in the country with more than 84 stores and employing 8,000 people as of June 2022.\nIts growth came amid stumbles by its rivals such as Nakumatt Holdings, Uchumi Supermarkets and Tuskys, which went bankrupt due to large debt or mismanagement.\nOther recent challengers such as Massmart and Shoprite of South Africa closed their operations after failing to gain traction in the competitive formal retail market.\nCarrefour and Quickmart are among the supermarket chains that have continued to expand alongside the dominant Naivas.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/naivas-founders-eye-sh5-8bn-as-foreigners-seize-control--4295594"}
{"doc_id": "b0a53dd5df36472b42616241574fef02", "text": "By Harry Scherzer\nAs any South African investment adviser worth their salt will tell you, everyone should hold at least a portion of their portfolio offshore. That’s because a combination of factors – a weak rand, low economic growth, and underperformance from the JSE, among other things – have meant that anyone investing solely in South Africa isn’t getting the returns they should be. In fact, according to a 2022 investment note from Allan Gray, investors would have been worse off by 8% a year if they’d invested exclusively in South African equities than if they’d invested entirely offshore.\nOf course, there are several other reasons why you should hold some of your portfolio offshore. These include diversification, access to investment opportunities and the greater stability offered in some markets. No matter what reasons you have for investing offshore, however, it’s important to remember that you will be taxed on any returns you make.\nDividends received by shareholders in foreign companies, for instance, are taxable at a maximum effective rate of 20%. But South Africans also have to pay tax on foreign interest, interest from Real Estate Investment Trusts, and capital gains. While you can’t avoid the taxes, you can at least mitigate their impact when you send money offshore for investment purposes and when you bring your returns back into the country.\nBanks hinder DIY approach to investing\nThat’s particularly true for the growing number of investors who prefer to look after their investment choices rather than relying on institutional investment houses. Several South African banks, for example, allow their customers to set up UK bank accounts. Money can then be disbursed from those accounts to offshore investment products of their choosing. Others may have taken the time to set up an offshore account while visiting a foreign country for the same purposes.\nWhile the growing ease with which people can take a DIY approach to offshore investing is undoubtedly a good thing, there are obstacles that must be overcome. Ironically, some of the biggest of them come from the self-same banks, whose offerings purport to make it easier to move money internationally.\nAnyone who’s ever tried to move significant amounts of money (a necessity when investing offshore) between various countries will tell you that it can be a massive headache. That’s especially true if you struggle to navigate the complexities of a bank’s forex offering through its website or app and have to turn to its contact centre for help. Something that should be quick and easy can stretch into hours, days or even weeks.\nPerhaps even more pernicious, however, is that most banks display a profound lack of transparency when it comes to the fees they charge for such transactions. In the most extreme cases, this means an investor will end up with a lot less money to invest on the other side, as well as reduced returns when they draw from their investments.\nA more pleasant, transparent alternative\nThis lack of transparency ultimately means that, unlike with taxes, investors can’t plan for the fees they’ll be charged on each transaction. But it doesn’t have to be that way. By working with a forex provider that prioritises customer service and transparency, investors can save themselves a lot of hassle when it comes to forex transactions. This holds particularly true if they can find a partner that provides a dedicated account manager, a specialist who will seamlessly manage the entire process on their behalf and ensure they never have to deal with a call centre again.\nEven more importantly, however, they can make the transactions necessary for their investments at a lower cost than if they went through their bank, while also receiving complementary regulatory assistance. With the prevailing investing challenges in South Africa, the small differences can be incredibly important.\n* Scherzer is the CEO of Future Forex.\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/tax/sars-will-tax-you-on-overseas-investments-but-you-can-mitigate-its-impact-42e84459-b5e1-4952-ad21-281697b0802b"}
{"doc_id": "a844a54665bcfd4a59a3622eda51fab4", "text": "Inequality in South Africa is high, whether measured by income or wealth. One of the results is that there’s acute public scrutiny of executive compensation.\nThis is understandable given that the skew in rewards for executives compared with wages of workers is one of the key drivers of rising inequality – in South Africa and across the globe.\nDrawing on recent publicly available data, we undertook a preliminary analysis comparing chief executive officer (CEO) pay with average monthly pay ratios in the country.\nIn our analysis CEO pay included a base salary and a variety of benefits. We then compared the CEO’s pay to the overall average monthly earning provided by the country’s statistics agency, StatsSA.\nStatsSA estimates show that the average monthly pay for all workers, regardless of their sector of employment, was R23,640 (about US$1,280).\nWe acknowledge this number is a high figure, no doubt driven up by the dynamics of South Africa’s labour market – high unemployment levels and high income inequality. The high figure had the effect of lowering the pay ratios, making them look better than they might actually be.\nUsing a sample of companies across various sectors of the economy our analysis showed that CEOs earn between 150 and 949 times more than the average pay of all South African workers.\nOur findings are important because they shed light on inequality within firms – a key component of inequality in society in general.\nWe submitted our findings to hearings in parliament on two bills tabled earlier this year – the Companies Amendment Bill and the Companies Second Amendment Bill. If passed, the bills would make it compulsory for companies to disclose their pay gap ratios.\nThe aim is to encourage adequate disclosure so that all stakeholders have sufficient data to make informed decisions.\nWe are in favour of the bills because it will mean that companies can’t go on ignoring inequalities in earnings and wealth in South Africa. Disclosures will also provide other social actors with evidence to question inequalities within firms, and demand changes.\nOur analysis differs from previous work. For example, one analysis focused only on pay ratios of companies in consumer products and services and another only on state-owned entities. There’s also a study that describes the relationship between corporate performance and CEO pay.\nWe saw a divergence between the earnings of CEOs employed at locally owned compared to transnational firms. There was also a difference between CEOs in privately owned companies and those at the helm of state-owned entities. We also found differences in earnings across and within sectors.\nAnd we found there was a weak correlation between the CEO’s pay and their sector’s overall contribution to economic growth and employment share. For example, the remuneration gap in the mining sector is high yet the sector’s contribution to GDP and employment share has declined in the post-1994 period.\nChanges to the law\nThe purpose of the bills tabled by trade and industry minister Ebrahim Patel is to improve the ease of doing business, clarify uncertainty and reduce bureaucratic red tape.\nThe changes also include clauses that would make remuneration disclosures mandatory for public companies and state-owned entities.\nIf the bills are passed, companies will be required to list the remuneration and total benefits received by the highest earning individual and the lowest earning employee.\nAdditionally, companies will be required to calculate a remuneration gap, defined as the ratio between the total remuneration of the top 5% highest paid individuals and that of the lowest paid 5%. This must be calculated at both the median and mean to avoid any distortion by outliers.\nWhat’s missing\nBased on our findings and the research we’re involved in, we argue that the bills don’t go far enough. There are gaps that need to be plugged for them to be truly effective.\nThe law should require firms to report the wages of the lowest paid person regardless of whether they are employed internally or outsourced. This isn’t the case at the moment.\nThis is important because employment growth in South Africa over the past 30 years has largely been in temporary employment services.\nPay disclosures in the US allow for both categories of workers by recommending that firms with more than 100 employees hired through a labour contractor should file two separate reports, one for individuals paid via the firm’s payroll and a separate one to include outsourced workers. South Africa should adopt a similar threshold.\nSecondly, the current version of the amendment is a missed opportunity to legislate reporting on gender pay gaps at the firm level. This is already in place in Germany, the UK, Australia and New Zealand.\nDespite an increase in female participation rates in the labour markets, female workers continue to face discrimination.\nFemale workers earn R70 on average for every R100 earned by male workers. These pay disparities along gender lines persist even when we account for worker characteristics by including age, educational attainment levels, experience, sector or industry and occupational characteristics.\nWe recommend the inclusion of payment disclosures along gender lines.\nThirdly, it is important to include the base pay made to the highest and lowest earning individual together with any short- and long-term benefits. This is because in some industries the base pay is low relative to the total package earned by executives.\nWhile it is important to include both base pay and other short- and long-term benefits, we believe that the listed payments are not exhaustive. We propose the inclusion of the following:\n- any tax-deductible expenses paid by the company on behalf of the highest and lowest paid individuals\n- compensation for loss of office paid to or received by any individual together with any other payments relating to termination of services.\nThe proposed amendments do not specifically state whether in addition an individual remuneration gap will be calculated between the highest and lowest earning individuals. We recommend that this calculation is specifically included.\n- By Imraan Valodia, Pro Vice-Chancellor: Climate, Sustainability and Inequality and Director: Southern Centre for Inequality Studies., University of the Witwatersrand, and\n- Arabo K. Ewinyu, Researcher, Southern Centre for Inequality Studies, University of the Witwatersrand\n- This article was first published by The Coversation, read the original here", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business-opinion/730549/south-africas-ceo-wage-gap-is-huge/"}
{"doc_id": "9f65d50d53fdc7cd4779a9f9243172f4", "text": "Mauritian SBM Holdings will fully acquire Kenya’s Fidelity Commercial Bank (FCB) before end of the year in a deal valued at Sh100.\nIn a cautionary announcement posted on the Stock Exchange of Mauritius, the group said it intends to pump in Sh1.46 billion in additional equity once all regulatory approvals have been granted.\n“SBM Holdings wishes to inform its shareholders and the public in general that, subject to regulatory approval, it has resolved to proceed with the acquisition of FCB. SBM will acquire the entire share capital of FCB for Sh100 and will inject addition equity Sh1.455 billion,” read the message in part.\nFurther developments on the deal are expected to be made by the group even as it informed its shareholders and the investing public that intends to seal the deal before the end of December 2016.\nThe completion of the deal will see the group, which is the second largest company listed on the Stock Exchange of Mauritius, enter Kenyan market as it eyes other markets in the Eastern African region.\nCentral Bank of Kenya (CBK) has welcomed the move saying that the interest of foreign banks in Kenya will contribute to the emergence of a world-class financial sector.\nBOLSTER OPERATIONS\n“SBM Group will bring its experience and expertise from Mauritius and other markets, to enhance competitiveness and the resilience of Kenya’s banking sector,” said CBK in an emailed statement.\nWith an asset base of about Sh417 billion as at end of September, the entry of SBM is expected to bolster the operations of FCB, whose assets are valued at below Sh14 billion. FCB started operating in Kenya as a non-bank financial institution in June 1992 before converting into a commercial bank in April 1996.\nKenya’s banking sector has been tipped by analysts to be ripe for consolidation, especially with the revelation that just about seven lenders were commanding the market’s liquidity.\nAs at March 2016, FCB’s liquidity ratio had dropped to 11 per cent, which is below the minimum statutory ratio of 20 per cent.\nIn its Supervisory Report covering up to December 2015, CBK ranked it 31 of 41 banks in terms of market share. It has 14 branches around the country.\nSBM Group’s banking arm, SBM Bank (Mauritius) Ltd, is a leading bank in Mauritius with footprints in India, Madagascar, and a representative office in Myanmar. The entry into Kenya is a continuation of its international expansion strategy.\nIn August, the group had announced plans to establish presence in Seychelles and Kenya as well as grow footprints in India in the medium term.\nThe deal comes at a time the banking sector is readjusting to the regime of capped interest rates and heightened supervision from CBK\nStay informed. Subscribe to our newsletter", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2000224424/mauritian-lender-to-acquire-kenyas-fidelity-bank"}
{"doc_id": "0b2ce95049109bc5500d16ff837950eb", "text": "KamPay is a company that was founded in 2018 as a financial inclusion avenue for the unbanked. The firm created a digital currency called Kamari which is akin to what we accustomed to with mobile money but it is based on blockchain technology. Users can transfer, buy and sell but also lend and save through the KamPay wallet.\nSeeing as Africa has one of the fastest-growing populations which is expected to hit 2 billion over the next several decades. As well as the current population being made up of individuals under 24, financial services and innovations in the space are more vital than ever.\nIn line with its mission statement, KamPay has announced that it is targeting one of the continent’s biggest sectors. KamPay and Africa Grain and Seed (AGS) have partnered up to offer the KamPay wallet to farmers in Zimbabwe and Cameroon. The roll-out according to KamPay is going to involve 50,000 farmers.\nThe folks over at KamPay say that they are offering lower merchant and consumer fees than the traditional providers. What those figures are exactly was not expounded on, however, the solution is said to have automated settlement using smart contacts. On top of that, it will also enable the government with tax collection.\nAs I am sure you are well aware, blockchain tech has a decent record when it comes to managing information. The solution is much like the blockchain livestock tracking system that was launched last week by Mastercard and E-livestock in that respect. Additionally, KamPay’s payments system allows for cross-border payments and transactions.\nAnother ZIMBOCASH?\nKamPay’s payment solution sounds similar to ZIMBOCASH, the only difference here looks like the former is targetted at (for the moment) agriculture. Now, at this point, many will be sceptical because ZIMBOCASH left just as quickly as it came. but, it is encouraging to see that there are firms who are testing the waters in Zimbabwe where alternative payments are concerned.\nHopefully, KamPay sticks around for a good long while and it coming into Zimbabwe with the provision for tax collection will be music to the government’s ears.\nYou can check out KamPay for yourself with the link here", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2021/06/a-digital-currency-is-coming-into-zim-to-help-out-farmers/"}
{"doc_id": "0d073fc8ed0581e6dfce23e6d2844d9c", "text": "Nigerian President Goodluck Jonathan suspended respected central bank governor Lamido Sanusi on Thursday.\nSanusi, who was due to end his term in June, had been an increasingly outspoken critic of Jonathan’s government and its record on tackling endemic corruption in Africa’s biggest oil producer.\nFollowing are analysts’ reactions:\nANGUS DOWNIE, HEAD OF ECONOMIC RESEARCH, ECOBANK\n“Sanusi did a fantastic job as governor and it will be very difficult to find someone that can continue his line of eff\nort in restructuring the banking sector and strengthening monetary policy to the next phase.\n“He was due to step down in June but when something unexpected like this happens it does raise concerns about what is happening with the direction of policy in Nigeria.\n“The immediate reaction to Sanusi’s dismissal is a knee jerk reaction. This immediate fall in the naira would be expected in any emerging market or frontier market. Fundamentally there’s no reason for the naira to fall further.\n“You’ve got a very safe pair of hands that are taking over in the immediate period, Sarah Alade. In terms of the economic policy agenda, that’s her remit. She’s the deputy governor responsible for economic policy.”\nALAN CAMERON, ECONOMIST AT NIGERIAN STOCKBROKER CSL\n“It’s not so much what it does to the CBN (Central Bank of Nigeria), which we believe had a strong institutional foundation and skilled leaders, but what it says about the Presidency itself.\n“If the Jonathan administration is willing to discard a safe pair of hands at a time when the currency is being tested anyway, it shows more political motivation than economic awareness.\n“Speaking from the perspective of international investors, this is likely to go down badly.”\nMELISSA VERREYNE, ECONOMIST, NKC ECONOMISTS IN CAPE TOWN\n“This is very worring for the central bank’s independence, and creates uncertainty about the future monetary policy direction.\n“The strange allegations made against Mr Sanusi, and the fact that the government was not content with simply letting his term expire, appear to be aimed at sending a warning to outspoken central bank officials.\n“The ability of the central bank to criticise fiscal policy and the remittance of oil revenue is important, as it improves the accountability of the public sector.\n“Any reversal of this will jeopardise the central bank’s ability to maintain price and exchange rate stability, due to the pressure on foreign exchange reserves caused by corruption and government withdrawals.”\nYVONNE MHANGO, AFRICA ANALYST, RENCAP\n“His suspension does raise concern among investors about the ability to sustain the naira at present levels. We will see more pressure on the currency between now and June, and more weakness than we had anticipated prior to this news.\n“You’re going to get a much more conservative CBN governor.\nThe impression from the statement is that he (Jonathan) thought the governor had gone above and beyond his mandate. It suggests that whoever he selects going forward will toe the line and be more conservative.”\nRAZIA KHAN, HEAD OF AFRICA RESEARCH, STANDARD CHARTERED\n“The nature of the suspension will come as a significant shock to foreign portfolio investors, whose willingness to invest in Nigeria was very much influenced by the transparency and anti-inflation credibility associated with Sanusi’s policies.\n“This will be a significant negative for the Nigerian naira and Nigerian financial markets. Investors will pay attention to whichever successor is announced, but this is unlikely to sit comfortably.”\nSAMIR GADIO, EMERGING MARKET STRATEGIST, STANDARD BANK\n“This is a disruptive move which indicates that the CBN has de facto lost much of its independence.\n“Clearly it is driven by political motives given Sanusi’s vocal criticism of oil revenue leakages and the opaque fiscal system in Nigeria.\n“If anything, this development will compound upside risks to USD/NGN by precipitating the foreign exit and a negative domestic positioning against the naira.\n“Foreign investors are likely to be active sellers of Nigerian assets in coming days subject to market liquidity constraints.”\nReuters", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/africa/article/sanusis-suspension-the-world-reacts/"}
{"doc_id": "d93a19efecd06403577581f489b33183", "text": "What you need to know:\n- Business reforms are intended to increase efficiency, local and foreign direct investments (FDI) to boost job creation.\n- The manufacturing base has not produced to its potential, and has been outpaced by the services sector but remains a key employer.\nWe have always known this to be true. Kenya represents a bright spot in sub-Saharan Africa as an investment hub for local and foreign investors.\nBacked by recent data on global economic activity and global surveys, the government is committed to converting these into gains.\nWith our ultimate ambition to pursue an inclusive model of growth that will provide more than 1.3 million new jobs annually, the government understands the need to create a conducive environment for the private sector.\nIt has worked hard over the past 48 months to make Kenya an easy place to do business.\nREFORMS\nThrough a multiinstitutional Business Environment Delivery Unit under the Ministry of Industry, Trade and Cooperatives, government agencies, the Kenya Private Sector Alliance, and the World Bank Group/International Finance Bank (IFC), we’ve undertaken reforms; as a matter of fact, amongst the highest on the continent.\nBenchmarking on competitive global best practice, Kenya diagnosed its regulatory business environment and found the need to get rid it of the red-tape that hinders entrepreneurship and creativity among citizens.\nThe just-released World Bank Group’s Doing Business 2018 Report that places Kenya at position 80 out of 190, from 92 last year, is a vindication of the quest to create proficient and all-encompassing ethos for growth.\nBUSINESS\nOverall, for two consecutive years (2016 & 2017 reports), Kenya emerged as the third most reformed country in the world, and in the 2018 report, as the third best in sub-Saharan Africa.\nOut of the 11 indicators of ease of doing business, Kenya made six reforms during the year.\nThese include ease of starting a business by merging formal procedures that small businesses need to comply with to register; reducing the cost of construction permits by eliminating clearance fees from the National Environment Management Authority (Nema) and the National Construction Authority (NCA); enhancing electricity reliability through investment in distribution infrastructure and establishment of power restoration squads in case of outages.\nOthers are improving access to credit information; easier payment of taxes through the iTax platform; and reduction of the time for import documentary compliance through a single window system.\nPERFORMANCE\nWe have eliminated the need for the SMEs to have lawyers register their firms, eliminated the need for company secretaries for small businesses as well as the need to hold AGMs, saving them form regulatory compliance and operational costs!\nOur ambition is to be among the top 50 nations by 2020 - at 80.\nBusiness reforms are intended to increase efficiency, local and foreign direct investments (FDI) to boost job creation.\nFDI levels have risen from $390 million in 2013 to $2 billion last year, making Kenya one of the most preferred investment destinations in Africa.\nEconomists see a correlation, though not causal, between business regulatory environments and a country’s economic fortune.\nThey point to an existing parallel between GDP per capita, as measured by its natural logarithm, and the World Bank’s “distance to frontier” (DTF) index - which helps to assess the absolute level of regulatory performance over time of an economy.\nPRIVATE SECTOR\nThe manufacturing base has not produced to its potential, and has been outpaced by the services sector but remains a key employer.\nBurdensome regulation has been a big culprit that we have dealt.\nWith 200 businesses registered daily, we are certainly on the rise.\nEventually, the sequence of expected results is to trigger an increase in the registration of start-ups, ensuring their smooth operation and further investments and direct increase in sales/turnover or net income.\nAll in all, the results are a true harbinger of change and testimony that the government is keen to create a conducive environment for the private sector to prosper.\nMr Adan Mohamed is the Cabinet Secretary, Ministry of Industry, Trade and Cooperatives", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nation.africa/oped/opinion/business-environment-is-good-news-for-local-investors/440808-4187262-67l5vqz/index.html"}
{"doc_id": "7447a054d2d5baa46983625ce8692cdf", "text": "June 18, 2019 – Big Announcement\nFacebook announces its new cryptocurrency, Libra, headed by David Marcus former Paypal President. Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people. The Libra Association has 28 founding members.\nJuly 02, 2019 – First Major Challenge\nDemocrats Call on Facebook to Halt Cryptocurrency Plans. A letter is written to Facebook requesting an immediate moratorium on the implementation of Facebook’s proposed cryptocurrency and digital wallet.\nJuly 17, 2019 – First Major Hearing\nDavid Marcus, testifies before the US Congress to answer questions about Libra’s design, privacy measures, and potential impact on the US economy. The hearing is titled, “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations”. David assures the audience that Libra will not launch without the necessary approvals from regulators.\nSeptember 11, 2019 – Facebook engages Swiss Regulator for Payment Licence\nLibra Association pursues Payment System License Under FINMA Lead Supervision. In this context, the Libra Association has submitted a request for a ruling to clarify the regulatory status of the Libra Association and the Libra coin and intends to file an application for a license as a payment system.\nSeptember 13, 2019 – European countries Move to Block Libra\nFrance and Germany agree to block Facebook’s Libra cryptocurrency. In a joint statement, the two governments affirm that “no private entity can claim monetary power, which is inherent to the sovereignty of nations”.\nSeptember 17, 2019 – Libra moves the launch date\nLibra confirms plans to launch in the second half of 2020 instead of initially communicated first half of 2020.\nOctober 4, 2019 – Paypal jumps ship\nPayPal says it “[remained] supportive of Libra’s aspirations” but had chosen to focus on its own core businesses.\nOctober 8, 2019 – Senators caution MasterCard and Visa\nMasterCard and Visa warned in letters to “expect a high level of scrutiny” if they take on the risks of Libra.\nOctober 11, 2019 – MasterCard, Visa, Stripe, eBay, Mercado Pago, jump ship\nStripe comment – “Stripe is supportive of projects that aim to make online commerce more accessible for people around the world.” Stripe will “remain open to working with the Libra Association at a later stage,” the spokesperson said.\nVisa comment – “Visa will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations. “\nOctober 11, 2019 – Head of Calibra responds to the dropouts\nDavid responds on twitter, “Special thanks to Visa and Mastercard for sticking it out until the 11th hour. The pressure has been intense (understatement), and I respect their decision to wait until there’s regulatory clarity for Libra to proceed, vs. the invoked threats (by many) on their biz. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”\nOctober 14, 2019 – Libra Council Meeting\nLibra council members meet in Geneva, Switzerland. Libra signs on 21 founding members, appoints executives and board members. Ex- PayPal director Bertrand Perez remains Libra’s permanent COO, interim MD, and newly appointed Libra’s council and board chairperson.\nBooking Holdings pulls out.\nOctober 23, 2019 – Mark Zuckerburg’s grilled by Congress on Libra\nZuckerberg is the sole witness at the hearing, titled, “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors.” “If at the end of the day we don’t receive the clearances,” Zuckerberg said, “we will not be a part of the association. I believe that this is something that needs to get built, but I get that I’m not the ideal messenger for this right now,” Zuckerberg said.\nNovember 15, 2019 – Libra growing stronger as they focus on their strength – writing code\n34 projects in just seven weeks since the launch of the testing network mid-September: 10 wallets, 11 blockchain explorers, 2 IDEs, 1 API, 11 clients\nMy opinion\nI would like to echo a statement by Deng Jianpeng, a professor at Central University of Finance and Economics in Beijing, “Regardless of whether Libra ends up thwarted by regulators, Facebook has set something unstoppable in motion.” The regulators will have to capacitate and equip themselves to keep up with the exponential growth of technology in financial services. If you are in the Fintech space, it will be worth your while to keep a close eye on the developments on Libra.\nAbout Author\nMy name is Yemurayi Chinyande, I’m passionate about making payments simpler, cheaper, convenient and accessible to everyone. I am currently an IS Business Analyst managing payments products at Cassava Smartech.\nFollow me on LinkedIn, Twitter for payment trends and insights:\n- Twitter: @yemuraic\n- https://www.linkedin.com/in/yemurayichinyande", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2019/11/quick-catchup-on-facebooks-cryptocurrency-libra-since-its-big-announcement/?amp=1"}
{"doc_id": "03e1a4591d3f61479ed81d98cbc80065", "text": "Sadio Mané is set to be crowned Men's African Player of the Year 2022 tonight in Morocco, Joy Sports understands.\nThe Bayern Munich forward is expected to beat former club teammate, Mohamed Salah and national colleague, Edouard Mendy to the award after an impressive year which saw him impress for both club and country.\nMané led Senegal to win their first-ever Africa Cup of Nations title in February when the competition was held in Cameroon, beating Egypt in the final.\nHe also guided the Teranga Lions as they secured a World Cup spot ahead of Salah's Egypt a month later.\nMané scored 23 times and provided five assists for Liverpool during the 2021/22 season and won the FA Cup before joining Bayern at the end of the season.\nMore to follow...\nLatest Stories\n-\n9 awkward but completely normal things that happen during sex\n-\nSexy gift ideas for her any time of the year\n-\n4 fun & simple ways to upgrade your date night\n-\nOnion Sellers Association allays fears of price hikes\n-\nBanking sector clean-up served as a shock absorber during Covid-19, economic crisis – John Awuah\n-\nNorth Tongu Assembly members fail to elect PM after 4th attempt; DCE fumes\n-\nDigital industry players must shape digital landscape in Africa – Minister\n-\nAssociation of Sports Betting Operators presents learning materials to 939 pupils in flood-affected communities\n-\nMan, 30, dies in alleged attempt to steal ECG cables\n-\nAklakpanu bridge will be reconstructed to boost economic growth – North Tongu DCE assures\n-\nAwutu Senya West Assembly members reject President’s nominee\n-\nConsider the use of local rice for school feeding – Rice farmers\n-\nKyei-Mensa-Bonsu to address resignation issues today\n-\nCyber-attack hits Malawi’s immigration service\n-\nKenya scraps entry fee for South Africans and several other foreign nationals", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/2022-caf-awards-sadio-mane-set-to-win-african-player-of-the-year/"}
{"doc_id": "2621f2221c2cd411369626851650bca4", "text": "JOHANNESBURG - The mining industry on the African continent has a bad history when it comes to exploitation of workers and the mineral wealth of countries and South Africa is no exception.\nHowever, at the South African Human Rights Commission’s two-day seminar Business and Human Rights Dialogue in Sandton, Gauteng, Chamber of Mines senior executive for public affairs and transformation Tebello Chabana pointed out that not only was his organisation aware of the problems but was actively involved in making the mining business more ethical.\nChabana explained that the Chamber was aware of alleged involvement of the mining industry in illicit flows and that the South African Parliament has had numerous deliberations in the past two years on the matter.\n“Illicit financial flows could be in the form of base erosion and profit shifting (BEPS), mis-invoicing and criminal activities of illegal product trading,” said Chabana.\nIn 2015, an African Union high level panel headed by former President Thabo Mbeki stated that some $50bn a year is lost to Africa through illicit flows.\nIn 2016, the United Nations Conference on Trade and Development (UNCTAD) issued a report also alleging widespread mis-invoicing in the mining industry in Africa, including in South Africa.\nCurrently the Chamber is working with parliament towards improving transparency through information sharing and improving data collection.\nIn 2017, the Chamber commissioned an independent review by Eunomix Research regarding the 2016 UNCTAD report on trade mis-invoicing.\n“We are also aware of the Recommendations of the Davies Tax Committee (published in November 2017) to the Treasury, in response to the Organisation for Economic Cooperation and Development’s Base Erosion and Profit Shifting (BEPS) Report,” said Chabana.\n“Some recommendations might culminate into legislation. We await to be consulted on possible legislative proposals,” he added.\n“In line with our Membership Compact, our members have committed to implement and maintain ethical business practices and sound systems of corporate governance.”\nChabana also pointed out how the mining industry had contributed to the SA economy last year.\nDespite all its ills the mining industry is the backbone of the SA economy, with:\n-- 7 percent of GDP with another 11 percent in indirect contributions;\n-- It paid R5.8 billion in royalties, and taxes of some R16 billion;\n-- Exports of R307 billion representing 27 percent of the country’s R 1,1 trillion total;\n-- Mining sector employment rose to 464,667 or 6,1 percent of private non-agricultural employment;\n-- Those employees’ earnings amounted to R126 billion;\n-- The industry is responsible for another 1.4 million jobs – people employed by suppliers to the industry;\n-- Gross fixed investment in mining of R93 billion representing 18,2 percent of private and 10,8 percent of total fixed investment in the economy, asserted Chabana.\nThe chamber also supports wealth distribution with its mining charter designed to contribute to the broader country agenda of transformation and inclusion.\nThe elements include but are not limited to ownership; employment equity; community development; skills development; enterprise and supplier development.\nSocial and Labour Plans (SLPs) detail how a mining company will contribute towards development of mine host communities and labour-sending areas.\nAccording to Chabana, mining companies are spending approximately R2bn per year on mine community development through SLPs and other resources, such as technical skills secondments to municipalities, skills training of communities and general CSI expenditure.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/changing-the-face-of-mining-in-sa-13814300"}
{"doc_id": "1a2d1b63c0811397ddaf1cb0564f0b83", "text": "The three-member committee set up to investigate the circumstances leading to the explosion at Apeatse has presented its report to the Lands Minister, Samuel Jinapor.\nThe document contains findings and recommendations, among other things, to avert the recurrence of the incident in mining communities.\nThe presentation of the report followed the completion of work by the three-member committee chaired by Benjamin Aryee.\nHanding over the document on Tuesday, Mr Aryee expressed confidence in the outcome of the investigation.\nAccording to him, the committee worked earnestly due to how delicate and important the assignment was.\n“We were able to cover the period visit the relevant stakeholders. We were able to talk to witnesses to the various incidents. We have come out with this report through the interviews and our observations.\n“We believe this report fairly represents the facts of the case. However, we will not preempt what the\nMeanwhile, the sector minister, Samuel Abu Jinapor, says his interest is ensuring that the committee's recommendations are implemented to the latter.\nHe further noted that the terms of reference of the Aryee Committee is not a criminal investigation; thus, the explosion case is within the remit of the Ghana Police Service.\n“What I have been interested in as the Minister responsible for Lands and Natural Resources and for that matter mining, is whether or not, the regulatory regime of the mining as it relates to explosives was adhered to or not,” he emphasised.\nLatest Stories\n-\n9 awkward but completely normal things that happen during sex\n-\nSexy gift ideas for her any time of the year\n-\n4 fun & simple ways to upgrade your date night\n-\nOnion Sellers Association allays fears of price hikes\n-\nBanking sector clean-up served as a shock absorber during Covid-19, economic crisis – John Awuah\n-\nNorth Tongu Assembly members fail to elect PM after 4th attempt; DCE fumes\n-\nDigital industry players must shape digital landscape in Africa – Minister\n-\nAssociation of Sports Betting Operators presents learning materials to 939 pupils in flood-affected communities\n-\nMan, 30, dies in alleged attempt to steal ECG cables\n-\nAklakpanu bridge will be reconstructed to boost economic growth – North Tongu DCE assures\n-\nAwutu Senya West Assembly members reject President’s nominee\n-\nConsider the use of local rice for school feeding – Rice farmers\n-\nKyei-Mensa-Bonsu to address resignation issues today\n-\nCyber-attack hits Malawi’s immigration service\n-\nKenya scraps entry fee for South Africans and several other foreign nationals", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/apeatse-explosion-3-member-committee-completes-fact-finding-presents-document-to-lands-minister/"}
{"doc_id": "6106220fa89eaea64e72a43f6b6f185c", "text": "Duty-free boost for agric\nElita Chikwati and Precious Manomano\nThe Zimbabwe Revenue Authority (Zimra) has listed import duty and Value Added Tax (VAT)-free agricultural equipment while the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development has introduced a crop insurance product for Pfumvudza/Intwasa beneficiaries as the Government continues to implement a cocktail of measures to boost agricultural production.\nZimra this week said machinery such as manure spreaders, fertiliser distributors, hay balers, combine harvesters, machines for sorting eggs, machines for preparing animal feed, tractors and poultry incubators would be imported duty and VAT-free.\nStakeholders hailed the move as critical to transforming the agricultural sector for economic growth and prosperity.\nZimra said importers were required to engage clearing agents registered with the tax collector.\n“The goods are treated as commercial importations. Clearance is to be done through a bill of entry and a tax clearance certificate is needed in order to be exempted from payment of presumptive tax. Failure to produce such attracts a presumptive tax of 10 percent of the value for duty purposes,” said Zimra.\nThe decision was greatly welcomed by farmers who said it supported their efforts to grow the agricultural sector by easing the means of production and lowering the burden on most farmers who desperately needed modern equipment and technology.\nMrs Martha Macheke from Banket said it gave relief to those who were importing machinery aimed at improving farming.\n“Value addition as well as mechanisation are both critical for us to be sustainable. This type of equipment industrialises and modernises our agriculture through innovation development.\n“Mechanisation, for example, leads to precision farming which maximises efficiencies, lowers post-harvest losses, and increases the profits that a farmer can make,” she said.\nAnother farmer from Raffingora, Mr Tendai Masocha said the scrapping of duty on some equipment would enable them to access machinery at a lower cost and boost the mechanisation programme.\n“It has been expensive for farmers to buy machinery, but without duty, it becomes affordable. This is a good move, especially on machinery,’ he said.\nMr Albert Mumanikidzwa of Chinhoyi echoed similar sentiments.\n“Our challenge is that sometimes we do not have access to foreign currency. Hopefully, we will have easy access to foreign currency so that we can import machinery and boost production and alleviate poverty,” he said.\nThe Government had been making huge efforts to revive the agriculture sector by incentivising the importation of machinery.\nOn the other hand, the area yield index crop insurance, which will be technically directed by Pula Advisors, is meant to protect Pfumvudza farmers from heavy impact of climate change vagaries.\nBeginning in the 2021/22 agricultural season, the Ministry will implement a pilot exercise with financial support from development partner, Mercy Corps Zimbabwe.\nPula Advisors has been contracted by Mercy Corps’ AgriFin Digital Farmer (ADF) to provide technical assistance for the design and implementation of a comprehensive area yield index insurance on the inputs distributed under the Pfumvudza initiative in Zimbabwe.\nMercy Corps’ AgriFin Digital Farmer (ADF) is a two-year, $5 million initiative that aims to support the expansion of high-impact, digitally-enabled services to at least one million farmers and to expand the services to a further five million smallholder farmers in partnership with Gates and Bayer foundation.\nThe expansion efforts will be delivered by growing ecosystems of diverse service providers and building farmer income, productivity and resilience by 50 percent while reaching 40 percent women.\nPermanent Secretary in the Ministry of Agriculture, Dr John Basera said the ministry established a team chaired by the Agricultural Finance Corporation (AFC) Insurance to collectively model out piloting of the Area Yield Index Crop Insurance.\n“The task team, which comprises the ministry and relevant stakeholders, is being technically advised by Pula Advisors and they have so far green-ticked a number of key elements and are ready to roll the trial run during this 2021/22 agricultural production season covering farmers under the Pfumvudza/Intwasa Programme,” he said.\n“The piloting of the area yield index crop insurance will this season be undertaken in Rushinga and Mwenezi Districts covering about 30 000 smallholder farmers under the Pfumvudza programme for a sum insured of over USD1 million.\n“Recognizing the value likely to be created, the Ministry commits itself to fully supporting the associated activities and has activated its structures and institutions to ensure the piloting exercise is a success,” he said.\nDr Basera commended FBC Insurance (Pvt) Ltd for coming on board as the insurer for the pilot exercise.\nMinistry chief director, strategic policy planning and business development Mr Clemence Bwenje said the pilot exercise would be exciting as it was premised on the objective of providing proof of concept, showing the benefits, costs, relevance and possibility of scaling out the area yield index crop Insurance next season.\n“The evaluation to be produced by the task team will be instrumental in informing policy to the farming community, stakeholders and Government as it will highlight on the quality and scalability of the insurance product,” he said.\nMr Bwenje emphasized that the overaching impact of rolling out such insurance products was to sustainably and affordably protect smallholder farmers from key agricultural risks through the use of insured inputs, which in turn encouraged better farming practices, raised yields while providing compensation (payouts) to support farmer resilience when losses occurred.\n“The assurance is that the project will be highly technology and data-driven, enhancing Government’s delivery capabilities and introducing innovations in digital insurance to the sector.\n“Insurance in agriculture has been the missing link also given its ability to create opportunities for agricultural investments”, Mr Bwenje said.\nPula Advisors, regional manager for Anglophone Africa, Ms Cynthia Tapera, said the area yield index crop insurance would insure farmers’ harvest.\n“It is an insurance cover that insures farmers against a pre-set historical benchmark. The perils covered in this product are windstorm, frost, excessive rainfall, heatwave, hail, floods, drought, pests and diseases. The pilot will focus on the maize value chain.\n“Climate change is upon the whole world and the results are clear for everyone to see. The damaging impact is felt by the smallholder communities with no other sources of income other than agriculture,” she said.\nSmallholder farmers in Zimbabwe are increasingly exposed to systemic climate change risks such as droughts, dry spells, delayed seasons, floods, hailstorms, pests, diseases and many more hence the need for insurance service.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/duty-free-boost-for-agric/"}
{"doc_id": "de3ddabe5c0387b3e116e1ecee87a620", "text": "While Cape Town’s water shortages continue to make headline news, a nationwide water crisis may also be on the horizon. However the threat and better management of this critical resource may actually be the economic savior of the country.\nThis is according to Dr Anthony Turton, professor in the Center for Environmental Management at the University of the Free State who was speaking at a recent water seminar, hosted by law firm Webber Wentzel.\nTurton explained that South Africa’s population growth and the increased draw on the country’s supplies, will see it needing 1.6 times the amount of water than will naturally be available by 2030.\nBut, rather than looking at the uphill battle to secure our water future, Turton stressed that ensuring an adequate supply, together with new infrastructure and upgrading of existing infrastructure, could actually present untold opportunities for the country in terms of innovation, investment and job creation.\n“In other words this crisis could be a growth opportunity,” said Turton.\n“Realistically, however, innovation in the water space is unlikely to come from government, so the charge is going to have to be led by the private sector.”\n“Make no mistake, there is nothing philanthropic about business investing into large-scale water projects, rather it may become a strategic imperative if business wishes to continue operating effectively in this country.”\nBig business\n“A case study that business should be looking to as the potential future of water in South Africa is the eMalahleni Recycling Water Project, on the outskirts of Witbank in Mpumalanga,” said Turton.\nIn 2007 Anglo American made a R300 million investment into a state-of-the-art, world-first, mine acid drainage recycling plant.\nThe plant, which processes 30 million cubic meters of mine drainage per day (to be upgraded to 50 million cubic meters in the near future), not only ensures that participating mines are self-sufficient in terms of their water supply, but also sees them supplying drinking water to the local municipality.\nIn addition, one of the bi-products of the recycling process – gypsum – has been used to build housing for mine workers and their families.\n“The success of this project has being heralded globally and, at grass roots level, it has not only proved invaluable to Anglo American’s Mpumalanga coal mine operations but is also giving the mine a healthy return on investment,” said Turton.\n“What beggars belief, however, that such a progressive and innovative project – which was commissioned over a decade ago – has never been replicated. Why?\n“One reason may be around financing. But given the enormity of the country’s impending water crisis, business is simply going to have to make the investment, be it alone or via private equity avenues,” he said.\nEncouragingly, there is an appetite for this type of project. Marc Immerman, principal at Metier Sustainable Capital Fund, said that although they are not involved in the research and development side of things, the financer is more than willing to help companies secure funds and they are willing to invest in innovative water projects.\nCatherine-Candice Koffman, head of infrastructure and telecommunications project finance for Nedbank, also stressed that South Africa’s banks are looking for developmental opportunities.\nKoffman noted that banks are looking for development opportunities and to put structures together to alleviate the problem. This needed to happen sooner, rather than later, before government red tape made innovating in the sector a challenge.\nPrivatising water\nFor business to proceed with these types of projects requires an in-depth understanding of national, provincial and local law surrounding water, and the ability to navigate all these respective departments, said Garyn Rapson, a partner at Webber Wentzel.\n“Regulation around water and the supply of water is very complicated, and it is very intricate in terms of the approvals needed to set up these types of projects. You are going to need a suite of environmental approvals, water services consents and municipal approvals.”\n“The arduous process of getting all the legal and municipal clearances can take up to 18 months for environmental impact studies and longer for municipal buy-in,” he said.\nWebber Wentzel further urged government to address the issue of overly complex regulation, especially when it comes to South Africa’s water ecosystem.\n“Government simply has to acknowledge that the enormity of the potential water crisis in 2030 means it will have to engage the private sector – just as the energy sector had to – to ensure the efficient supply of water,” Rapson said.\nTurton believes the type of projects South Africa needs to focus on include upgrades to all of the country’s water treatment plants, building desalination plants at all major coastal cities in South Africa, as well as creating effective and efficient sewage and waste water recycling solutions.\n“The bottom line is if South African wants to have water security for the future, then all stakeholders must start taking collective responsibility for the country’s water supply, ” said Turton.\n“This starts with the individual home owner installing rain water tanks and grey water systems, and extends to businesses innovating around sustainable water supply options for their operations.\n“Large-scale public-private partnerships will play a vital role in the future of water in South Africa, and how we enable these collaborations today will determine our water security for generations to come.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/218319/heres-when-south-africa-is-set-to-run-out-of-water-and-why-it-could-be-good-for-our-economy/"}
{"doc_id": "f531bc3c2d54ba902c1edbbf79347f46", "text": "Trade union Solidarity has published an “Impact Study” detailing what would need to happen in South Africa’s economy to make the government’s new BEE targets a reality.\nThe study is in response to the Department of Employment and Labour’s proposed sectoral targets for employment equity, which aims to push all designated businesses in South Africa to transform their employee makeup to be demographically representative.\nDesignated businesses are all those that employ 50 or more workers in the country.\nThe minister has been empowered to set the targets through the new Employment Equity Amendment Act, which was assented to by President Cyril Ramaphosa in April. The Act is not yet in effect, with the department expecting to promulgate the laws in September.\nFailure to meet the targets could result in hefty penalties, including millions of rands in fines.\nDespite not yet being in effect, the laws and proposed targets have drawn the ire of business organisations and unions like Solidarity, which have warned that the measures will effectively force businesses to implement racial quotas.\nThe government has argued that the targets are not quotas, because they are flexible, only have to be met over a five-year period, and are open to exemptions based on various reasoning.\nHowever, groups like Solidarity say that there is no other way to interpret the new laws – simply because the reality of South Africa’s job landscape and dwindling economy make it impossible for any business to meet them in a natural way.\nTwo options to meet the targets\nAccording to Solidarity, there are only two ways businesses can meet the targets: either they have to expand and grow so that new hires can build up the employee profile to match the targets, or they have to find another way to replace the employees they currently have with the required racial groups to meet them.\nFor example, looking at a national company operating in the agriculture sector, a company would have to adjust its skilled employee base so that it is made up of:\n- 68% black workers\n- 8% coloured workers\n- 2% Indian workers\n- 8% white workers\n- (The remaining 14% is not accounted for in the new regulations, which is another huge problem legal experts have identified)\nAccording to the Department of Labour, the current makeup for this sector is 51% black, 18% coloured, 2% Indian and 26% white (3% unaccounted for).\nTo ensure the targets are represented, a company of 100 people would have to grow to 325 people – growing by 225%.\nIt would have to hire five Indian workers, eight coloured workers and 170 black employees to match the targets (an additional 45 workers would be present to account for the fact the target figures don’t add up).\nIn South Africa’s economic environment – excluding all the other pitfalls, red tape, and anti-business legislation in effect – such growth for any business over a period of five years is highly unlikely, Solidarity said.\nThis leaves option two: lean into following rigid racial quotas with the employee base you have. Instead of hiring workers, it’s far easier for a business to simply get rid of their white and coloured employees and replace them with black workers.\nFollowing this method would be unlawful, legal experts warn.\nHitting all sectors\nWhile the example above is a rudimentary assessment of one category in one sector, Solidarity’s Impact Study looked at and extrapolated the targets across all sectors.\nThe union said that huge – and impossible – levels of growth are required across every sector in every skill category to make the growth option viable for businesses in the country. The table below outlines the growth requirements just for the skilled workforce (which represents the bulk of hires).\n“Given South Africa’s enormous economic challenges, it already is tough for a sector to basically achieve any growth at all.”\n“Expecting sustained double-digit growth is exceedingly unrealistic, and expecting sectors to more than double over the next five years is nothing but wishful thinking. For virtually all sectors, it is impossible at this level to grow into the ministerial targets without people having to vacate their posts,” it said.\nUnderpinning the entire study, however, is the macroeconomic reality. As South Africa grapples with a possible full year recession, the required levels of economic growth to make the employment targets work is unimaginable.\nAccording to Solidarity, the country would need to hit 11% growth per annum is an absolute minimum requirement to hit the targets, with the more realistic growth figure per annum closer to 25% per annum.\nSouth Africa’s GDP over the past ten years has struggled to achieve growth of more than 1%.\n“It, therefore, is painfully obvious that it is impossible for the national economy, as well as for individual sectors, to grow into the minister’s targets,” it said.\nInstead, it appears the only option left to businesses is to replace their workforces, which would result in massive job losses for racial groups other than black South Africans.\nSolidarity said that analysis shows that the targets are completely detached from reality, and has sent warnings and formal messages to the department to this effect.\nMeanwhile, legal challenges to the new laws and targets loom large, as business groups start organising to push back against them.\nThe full report can be accessed below:", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business-opinion/695017/south-africas-new-bee-targets-the-massive-dilemma-for-businesses/"}
{"doc_id": "32d41334761c77e54c018c746922944e", "text": "You should know by now that African economies are growing. Almost every continental analysis leads with impressive data: economic growth rates hover at an impressive 6%; combined GDP will hit $2.6-trillion by 2020; foreign direct investment is flocking in to areas that were once no-go zones for the average international investor. It’s a compelling, feel-good story – and it just might be true. By SIMON ALLISON.\nThis week, the Institute for International Finance (IIF) issued its report on the state of sub-Saharan Africa. The IIF, while not well-known outside specialist circles, is one of the most influential financial bodies in the world. An association of over 450 of the world’s biggest banks and financial institutions, it does everything from in-depth research and analysis to negotiating, alongside the European Union, a solution to Greece’s debt crisis (not, so far, its most successful project).\nAfter noting the high levels of interest in Africa from their members, they’ve added up the figures, crunched the numbers and reached a conclusion: the African growth story is no mirage. It’s the real thing.\n“After emerging Asia, Africa is the fastest-growing region in today’s world,” said George Abed, head of the IIF’s Africa and Middle East division. “Many countries on the African continent have achieved great progress in stabilizing their economies and consolidating their rates of growth. What is remarkable about this outcome is that it has been achieved during a period of unprecedented global financial turbulence. There are challenges ahead for Africa, but the trend of solid growth of the past decade looks sustainable over the medium term.”\nThis announcement is a big deal. It tells more than 450 of the world’s richest organisations that Africa is a decent bet, that it’s a safe place to put their money. It has the potential, too, to be a self-fulfilling prophecy: confidence in Africa’s economic future will encourage investment in that future, which in turn improves the chances of that future being as rosy as predicted.\nThe IIF is guilty, however – and it is not alone in this – of making sweeping pronouncements based on the relative success of just a handful of countries. Drill into the details of their report, and it is revealed that its research focuses on just seven countries: Cote d’Ivoire, Ghana, Kenya, Nigeria, South Africa, Tanzania and Zambia, which together account for 65% of Africa’s economy. Since 2007, the seven have achieved a growth rate of 4.7%, which balloons to 6.5% as soon as South Africa’s grim decline is removed from the equation.\nIt’s an interesting mix of countries. South Africa and Ghana are considered models of democracy compared to their continental peers, and both enjoy significant resource wealth (South Africa in minerals, of course, and Ghana with its new-found oil). Nigeria is the most populous country, but is marred by the vices that so badly stunted Africa’s growth in the 20th century: corruption, mismanagement and poor governance. Tanzania and Zambia are both poor countries showing tentative but encouraging signs of economic and political stabilization. Kenya and Cote D’Ivoire, meanwhile, have both experienced severe conflict in the last few years and unstable governments; despite this, Kenya boasts one of Africa’s most dynamic economies.\nIt’s a small sample, but it is a good one and relatively representative of Africa as a whole: there’s good government and bad, there’s stability and conflict, there’s poverty and great resource wealth. Maybe it is Africa’s time after all.\nThis emerging positive narrative is doing a lot to change negative perceptions around doing business in Africa – which, in its own right, has hampered outside investment in Africa’s growth.\nThis is illustrated in another report released this year, Ernst & Young’s Attractiveness Survey, which found that Africa’s dubious reputation precedes it among big investors and corporations. “While awareness of its qualities is generally improving, Africa is still viewed as a relatively unattractive investment destination compared to most other geographical regions,” the report said. “Those already doing business on the continent were overwhelmingly positive, ranking Africa’s relative attractiveness above every other region except Asia (and even then, only marginally so). In stark contrast, respondents with no business presence in Africa were overwhelmingly negative.…This represents not so much a gap, as a chasm between perception and reality. The facts tell a different story — one of reform, progress and growth.”\nIt is this story that investors are increasingly buying into. South Africa, despite its sluggish growth, remains the favourite destination for foreign money. In 2011, for example, South Africa hoovered up nearly half of the estimated $12.5-billion in foreign direct investment aimed at sub-Saharan Africa. This overall figure is growing, to the tune of billions every year.\nA few warning notes should be sounded, however. It’s never all good news. There are legitimate concerns that the African growth story is not sustainable, because it is reliant on an extended resource boom that can’t last forever. It’s also true that the numbers are skewed by big oil countries like Angola and Nigeria; take these countries away, and it’s likely the statistics would look very different – and not nearly so encouraging. Still, with some valuable resource being discovered in a new African country seemingly every few months (oil in Kenya, for example, or natural gas in Tanzania) there’s still life in the resource boom – and time for African leaders to use the money to create more reliable industries (unlike Nigeria, which declared last week that it had squandered upwards of $35 billion of oil money in mismanagement and bad practice).\nThe narrative of the African growth success story has a lot going for it – and so does Africa. DM\nRead more:\n- “African growth no mirage say banks, as optimism grows,” on AFP\nPhoto: A construction worker erects a scaffolding on a tunnel along the Nairobi-Thika highway project, under construction near Kenya’s capital Nairobi, September 23, 2011. REUTERS/Thomas Mukoya", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2012-11-09-africas-economic-growth-miracle-its-the-real-thing/"}
{"doc_id": "31f6770777eedad3ad433e73844a3cf9", "text": "Finance minister Enoch Godongwana will deliver the 2023 budget speech on Wednesday at 14h00.\nThe budget speech can be viewed through several channels, including TV services like DStv (channel 408), news channels, and live-streaming sources like YouTube.\nYou can watch the Budget Speech from the following sources:\nThe speech can also be streamed below:\nThe 2023 budget speeches expected to be tense and eventful, with the finance minister in the hot-seat to address South Africa’s mounting issues.\nAt the top of the list of concerns will be Eskom.\nInvestors in South Africa’s cash-strapped power utility are on high alert for Godongwana’s plan to reorganise its mountain of debt.\nBetween one- and two-thirds of Eskom’s liabilities of about R400 billion are expected to be transferred to the state’s balance sheet, with the amount and some of the transfer terms likely to be announced in the speech.\nThe government guarantees about 80% of Eskom’s loans, and 13 of 17 economists surveyed by Bloomberg say it can take on at least half of the utility’s obligations without compromising efforts to reduce state debt and budget deficits.\nReducing Eskom’s obligations will free up funds for the utility to carry out plant maintenance and strengthen the power grid, which could lessen the severity of daily power outages. It will also add to the state’s debt burden of almost R5 trillion and to its repayment costs, which consume about 18% of main budget revenue.\nThe National Treasury is expected to make the relief contingent on Eskom meeting performance targets. Godongwana has previously said the transfer of funds to the state’s balance sheet will be staggered and that Eskom’s bondholders won’t be asked to accept losses, which would be tantamount to a default.\nBeyond Eskom’s woes, the minister is also expected to deliver on the hopes and expectations of various sectors of society, including following through on announcements promised by president Cyril Ramaphosa during his State of the Nation Address.\nThis includes tax relief for the rollout of rooftop solar in the country, as well as inflation-linked hikes in social grants.\nThe government wage bill will also become a sharp focus, with public service unions banging on the treasury doors for a more significant cut. Godongwana is widely expected to hold the line and keep spending tight – however, social pressures are mounting as the ongoing cost of living crisis is exacerbated by the energy crisis.\nWith Bloomberg", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/budget-speech/667055/where-you-can-watch-the-2023-budget-speech-live/"}
{"doc_id": "23d471598442232b217803d90b8dfc71", "text": "Advertisement\nGood infrastructure and investment opportunities\nThe Royal La Palm and Labadi Beach hotels are no doubt among the best hospitality facilities in Accra and for that matter the country.\nThe two have hosted and continue to host major international events apart from serving the domestic market.\nPatrons who visit these places would admit that the facilities are first class as compared to any of their kind in any part of the world - and service delivery is superb.\nThese notwithstanding, there are many who, if given the option, may prefer an alternative. The reason is simple; the beach road leading to these magnificent hotels from all directions is not customer-friendly, to put it mildly.\nFrom the Osu side, the road has developed huge potholes - some cutting across the road and leaving no room to manoeuvre.\nWhen coming from the Teshie end, the story is not different. Motorists have to indulge in acrobatics, weaving their way in a zigzag manner after crossing the bridge over Kpeshie Lagoon in order to avoid the craters in the middle of the road.\nBeachfronts in all major cities are prime zones that are developed to yield maximum returns. Unfortunately ours are not so and have rather become refuse dumps and places for open defecation.\nThe siting of Labadi Beach and Royal La Palm Beach hotels, I believe, are pioneering attempts to upgrade our coastlines and turn them into recreational and money spinning zones.\nAn addition to this effort is the high-rise apartment building under construction which will beautify the beachfront of the capital city and bring it closer to what is common in other cities of other countries.\nOne would expect that for a country that is making strenuous efforts to attract global attention for the much-needed foreign investment, such bold private initiatives would be backed by state support in the form of good road network.\nLocation and accessibility are two factors that drive the hotel industry. Therefore, no matter the quality of facilities and services, a hotel is likely to lose a big chunk of clientele if accessibility becomes a problem. I, as an individual, am disappointed by the neglect of this important road in the capital.\nIncidentally, along this same road could be found the Military Academy and Training School (MATS), the Ghana Armed Forces Staff and Command College and the Kofi Annan International Peacekeeping Training Centre (KAIPTC).\nThese are very important national institutions that require that visitors to these places should not have any doubt about the importance we ourselves attach to them. If there is any programme to give this road a major facelift, I dare say it is slow in coming.\nI have decided to use the Beach Road to illustrate the point that we cannot claim to be courting foreign investors when we fail to do some of the most basic things that would send the signal that we mean business.\nA good road network opens enormous opportunities to not only foreign investors but to local entrepreneurs and industry that will rely on good roads to access raw materials and to reach their potential markets.\nA lot of the country's tourism potentials have remained largely untapped or woefully underutilised because of bad roads or a complete lack of them.\nKotoka is the only airport in the country which links us to the outside world. It may come nowhere near those in Dubai, Istanbul, Heathrow (London), JFK (New York) and many others that are in a class of their own. But this is what we have for now and the last thing we could do is not to take good care of it.\nFor more than a week now the Cargo Village has been exuding a powerful stench which has become unbearable for workers and customers who go to transact business there.\nThe information I got was that the unfriendly odour was coming from a burst sewage pipe. Whatever the cause, this should not have been allowed to last for more than a day.\nAs if we have not shown enough disinterest in the functioning of our only international airport, livestock from the nearby police barracks have found the inner perimeter of the airport a free-range grazing ground. This cannot be the gateway to West Africa!\nGhana, our beloved country, has a lot of competitive advantage in the sub-region which it could exploit to maximum advantage but which, unfortunately, it is not able to do. Apart from the proverbial hospitality, we have a stable, if even sometimes acrimonious, political climate.\nWe have been spared almost all the misfortunes of others which include civil and religious strife. Even Ebola has passed over us (I strongly believe so). So what is our problem?\nLet us all think seriously about this. In a race, you do not look backwards to see those behind you. Instead of taking consolation by looking at those behind us, let us do the most prudent thing by aiming at those ahead of us with determination to overtake or at least be at par with them.\nWriter's email:", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.graphic.com.gh/features/from-my-roof-top/good-infrastructure-and-investment-opportunities.html"}
{"doc_id": "5a9d8a1845709f68d4b61a81d1f5c033", "text": "If there is any network that has grown with its audience in Nigeria, it is MTN. With its most active users covering a demography of age 18 to 27, it is the network for the tech-age youth. From keeping them up all night with friends for Extra Cool calls to the nostalgic adverts, the network has had its fair share of growth – and signals show no sign of it slowing down.\nJust like its brand, the company has strategically positioneditself and made expansionary decisions to get it to where it is – the second most capitalized stock in the NSE. MTN Nigeria’s (MTNN) Q1 2020 financials show that the company has it good and we’re not surprised.\nIts results reveal a great quarter for the telecommunications giant with a16.7% gain in revenue, making ₦329.1 billion in the first quarter of this year in comparison to the ₦282.1 billion it made in the comparative quarter, Q1 2019.The telecommunication industry has naturally enjoyed a spike in usage since the last month of the quarter owing to the enforced lockdown, and its streak is still in motion.\nWith a ₦51.1 billion profit for the period in comparison to Q1 2019 of ₦48.4 billion, it disclosed profits 5.9% higher than last year – even with increased finance costs of 25.3% percent revealing the capital-raising measures taken by the group to stimulate its operations. It was also in line with this that the company recorded a jump of 103.5% in interest expense on borrowings from ₦7.9 billion in Q1 2019 to ₦16.1 billion in Q1 2020. Total value also recorded a jump as there was a 35.3% growth in the group’s net assetfrom Q1 2019’s ₦145 billion to Q1 2020’s ₦196 billion.\nIts revenue figure is defined by a jump in voice calls of 6.14% from the ₦182.8 billion earned in Q1 2019, to its Q1 2020 ₦194 billion turnovers. However, it is nothing compared to the 58.84% increase in revenue derived from local data usage (excluding roaming data) in the quarter from Q1 2019. Value-added service and digital servicesalso witnessed a jump of 33.93% and 12.11% respectively.Having settled the $2 billion claim for back taxes it was plagued with last year that swayed investor confidence, it certainly came back strong this year.\nNaturally, the lockdown has contributed its fair share to the performance of the stock though most of this will reflect in its second-quarter results. With more people using their phones, we expected a spike in revenue governed by increased data usage. This trend is bound to be higher in the second quarter as more Nigerians choose to work from home relying on internet data to power their tasks. And for those without jobs, the internet serves as a perfect companion in both times of need and despair.\nThe telecommunication industry itself is a growing one; Nigerian Communications Commission (NCC)reveals that as at Q4 2019, the telecoms industry contributed 10.60% to the GDP of the country and the total active telephone subscribers in Nigeria as at January stood at 185.7 million.With MTNN holding the largest market share of active telephone subscribers – 38% of GSM subscribers and 43% of internet subscribers, there is no doubting its growth trajectory.\nCovid-19 does posses some risk for the company, particularly in the Nigerian context. In times past, the government looks for who to prey when its revenues are faltering. MTN was once a prey and it paid a huge price for falling into the government’s trap. As the economy falters more eyes will focus on organisations that are posting monstrous profits. Taxes, penalties, donations should interest the government and MTN would be careful to protect investor interest while giving to Ceasar its due.\nMTNN’s share price has had a turbulent 2020. The stock is up 6.6% YTD and fell to a year low of N90 in March. At a price-earnings ratio of 11.3x investors are bullish about its ability to continue to deliver impressive growth. MTN has had a nice ride since its listing about a year ago. The first wave was observed within 48 hours of its being listed on the NSE for the first time in May 2019 when it was immediately ranked amongst the NSE top 5. It also didn’t take a couple of months before it shook the market by becoming the first on the NSE, temporarily surpassing Dangote Cement.\nHaving settled its tax disputes, its shares hit an all-time high of N159 per share before pulling back as investors worried about the faltering economy. MTN share price is still a bit off its 2020 high of 127 and could well be on its way there.\nThe price closed at ₦112 on Monday 11th May with a 52-week range of ₦90 and ₦159.3.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/05/12/analysis-mtns-blow-out-q1-profit-vs-covid-19-headwinds/"}
{"doc_id": "331b75280d1fad08b87c062ea506a0ec", "text": "The Nigerian hospitality sector saw a strong rebound in the first half of this year, after two years of pandemic-related disruptions.\nThe sector recorded 70 percent average occupancy in H1, according to stakeholders, on the back of improved business activities, boosted by the return of foreign guests and business travellers as well as increased corporate and government patronage across both independent and foreign brands.\nIn the period under review, business activities recovered to almost 2019 levels, especially across the major international brands, with Transcorp Hilton Hotel Abuja, leading in revenue growth.\nThe half-year witnessed sustained occupancy rate of between 70-80 percent across most international brands and 50-60 percent across some independent hotels, a pointer to the fast recovery of the sector from the lingering impact of the COVID-19 pandemic.\nComparing the H1 2022 with results from the same period in the two previous years, the sector witnessed the worst H1 result in history in 2020, with zero revenue during the three-month lockdown due to the pandemic that saw all hotels shut down, resulting in over N50 billion revenue losses.\nThe sector barely recovered in H1 2021 as it continued to battle the fallout of the pandemic, travel restrictions, health and safety concerns and low purchasing power to stay afloat, leaving earnings below the N20 billion mark set by industry stakeholders for the first phase of recovery in the H1 of 2021.\nHowever, the sector earned more in H1 2022 with over N30 billion revenue, almost double of H1 2021 earnings, yet the figure fell short of the 2019 levels of over N60 billion, which was adjudged the highest before the pandemic disruption.\nSpeaking on the H1 2022 result, Owen Omogiafo, president/group CEO, Transnational Corporation Plc, said the group recorded strong performance in its power and hospitality businesses, which continued to perform excellently despite the tough operating environment.\nTranscorp’s half-year results for the year ended June 30, 2022, showed an improved performance across all its major investment lines.\n“Our hospitality arm, Transcorp Hotels Plc recorded a revenue growth of 173 percent over the same period last year, demonstrating a strong and sustained recovery from the impact of COVID-19 pandemic, leveraging innovative strategies and superior customer experience,” Omogiafo said.\nRadisson Hotel Group in Nigeria also said it saw an improvement in its performance in H1 2022.\nAccording to Christophe Noel, general manager at Radisson Blu Hotel Ikeja, Lagos, business was good in the first half of the year with sustained occupancy. “So far, I cannot tell you that we have been badly affected. We have good occupancy,” he said.\nAccording to him, the flexibility in their approach, and the ability to adapt, respond, and implement measures swiftly, coupled with the Radisson Hotel Group’s five-year plan on significant investments, new brand architecture, new IT systems, new revenue management systems, and a new loyalty programme, have helped to keep guests coming and the hotel focused and afloat despite the economic headwinds in H1 2022.\nWellington Mpofu, executive assistant manager, commercial at Radisson Blu Anchorage, Lagos, said H1 2022 was good with occupancy sustained between 60-70 percent, almost the same as pre-pandemic level of 2019.\nHe attributed the improvement to “the return of normalcy in the system and the personalised service and world-class facility offerings at the hotel, which has the best waterfront in Nigeria”.\nEmmanuel Ele, CEO of Six Regions Hotel, a hospitality consulting firm, said hoteliers were back on track, opening a few hotels within the period, while some of those shut down during COVID-19 reopened in the first half of this year.\nRead also: Economy in focus as banks, organised private sector brainstorm\nBut many hoteliers are concerned that the rising operating costs, soaring inflation in the country and political risks ahead of the 2023 elections could dim the sector’s growth prospects in the second half.\nOluomo Jamiu Talabi, president of Lagos Hoteliers Association and CEO of Bosede Talabi Guest House, Ojota, Lagos, decried that the high cost of operation is impacting the business negatively, leaving many with the options of increasing rates, shutting down or converting hotels to real estate.\nFor him, the increasing cost of operation puts operators in a tight corner, while making the rest of the year uncertain because there seems to be no control over costs, especially that of diesel.\nBrain Efe, general manager of Victoria Crown Plaza Hotel, Victoria Island, Lagos, also lamented that the sector would likely face a harsher situation in H2 than the COVID-19 lockdown on the back of the sky-high price of diesel.\n“Hotels were shut down during the lockdown and the sector managed the unfortunate situation, but it will be worse when your cost of operation is so high and you cannot transfer it to the customers who are also impacted by low purchasing power,” Efa said.\nHe is worried that many suggest that increasing rates is the only way out for hotels, and wondered how much hotels will increase rates to and not lose guests.\nFor him, the second half of the year is not looking bright, considering the mounting number of economic headwinds.\nIn order to stay afloat and ensure that the guests continue to enjoy the best of hospitality offerings during their stay at any of its hotels in Nigeria, the Radisson Hotel Group plans to respond to the economic situations accordingly.\nThe Transcorp boss, however, sees a better second-half result, saying: “We do not plan to rest on our laurels, and we will continue to surpass past performances.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/arts-and-life/article/hotels-rebound-to-pre-pandemic-levels/"}
{"doc_id": "815dca3860088be8c8c026789927cd6b", "text": "Kenya’s gross domestic product (GDP) growth rate has been ticking along steadily at between four to five per cent over the past five years. At no point has it hit the Vision 2030 target of 10 per cent.\nWhy not? Was Vision 2030 a pipe dream littered with deliberately illusory goals and targets? Why has the 10 per cent target not been reached, and how can this be changed?\nThere are three factors that can unlock the country’s economic growth at a fundamental level in both the long and short-term.\nThe first is the long-term issue of agriculture. The agriculture sector is a conundrum; on one hand Kenya’s agricultural sector is very efficient and profitable.\nKenya is one of the leading exporters of black tea in the world and the country’s floriculture and horticulture sector are important economic players in the sector.\nOn the other hand, the country continues to struggle with food security as the maize price dynamic has illustrated. The International Labour Organisation (ILO) makes the point that the agricultural sector employs 61 per cent of workforce, yet only contributes 30 per cent to GDP.\nThis conundrum can be rectified through a multi-pronged approach that links productive sectors to less productive ones, more effective deployment of agricultural subsidies to farmers (particularly small holder farmers) and the revival of technical skills transfer programmes to farmers at county and ward levels.\nDoing so will allow the labour locked in the sector to enter profitable activity either in agriculture or other sectors.\nThe second factor is the interest rate cap which is an overarching, hopefully short-term, constraint to meeting the 10 per cent target. Earlier this year the World Bank made the point that Kenya faces a marked slowdown in credit growth to the private sector.\nAt 3.3 per cent growth, this remains well below the ten-year average of 19 per cent and is weighing on private investment and household consumption.\nThe interest rate cap has compromised two fundamental levers that support economic growth: access to credit and monetary policy.\nThe interest rate cap has engendered a contraction in liquidity to SMEs in particular, essentially slowing down the country’s economic engine.\nDue to the cap, SMEs are unable to get the liquidity they need to expand and generate more jobs as well as income.\nVolatility\nA lever severely compromised by the interest rate cap is monetary policy, reducing its ability to buffer Kenyans from economic volatility.\nWith inflation standing at 11.7 per cent in May, the cap has made it almost impossible for the CBK to step in with remedial measures such as raising interest rates as the consequences of doing so are unclear.\nThus, in the short- term, the interest rate should be reversed so that monetary policy can play the role it ought to, and robust credit access is restored to Kenyans.\nThe third factor is the informal economy, which is not only important for economic growth, but also engendering equitable growth.\nSome 90 per cent of employed Kenyans earn a living in the informal sector, yet it continues to be neglected.\nToo much of the country’s labour is locked in micro-businesses with low levels of productivity and too inadequately skilled and resourced to drive the country’s equitable growth.\nThus financial, skills and technological resources ought to be directed to the sector to catalyse the ability of informal businesses to graduate into authentic profitability, sustainable job creation and robust income growth.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/analysis/How-to-fire-Kenya-s-growth-to-Vision-2030-ideal-level/539548-3996482-nxtdp7/index.html"}
{"doc_id": "a9921e351d63f1a11693bc1c3277640f", "text": "The Central Bank of Nigeria (CBN) recently adjusted the rate in the Investors and Exporters Foreign exchange window to N380/USD from the N364 to N370 range it had been trading for some time now, as portfolio outflows increased depreciation pressure on the currency given the material reduction in oil prices.\nThe currency was also trading at the N377 to N379 range in the parallel market, after reaching a high of N410 – N415 levels at the parallel market. Overall, moving forward, the FX devaluation of the naira will broadly be positive for some Nigerian banks assuming it does not result in further deterioration in the macros fundamentals of the Nigerian economy.\nTop tier 1 banks like Zenith Bank and Guaranty Trust Bank are likely to benefit the most from the recent development.\nWhat it means to banks: Currency adjustment net-positive will likely earn foreign currency revaluation gains for Zenith Bank with its N698 billion net positive foreign currency balance sheet position.\nGuaranty Trust Bank too with its N532 billion net positive foreign currency balance sheet position, First Bank of Nigeria’s N166 billion net positive foreign currency balance sheet position, and FCMB with N79 billion net positive foreign currency balance sheet position. These banks have more assets than liabilities in their foreign currency book.\nThe numbers also suggest that we are likely to see foreign currency losses in Access bank with N1.2 trillion net negative balance sheet position followed by UBA with N281 billion net negative balance sheet position and finally Fidelity Bank with N30 billion net negative balance sheet position.\nBefore now, GTBank and First Bank made the most foreign currency revaluation gains of N87.3 billion and N80.2 billion during the last currency devaluation in 2016, accounting for 59% and 48% of non-interest revenues respectively, and 21% and 14% of gross earnings respectively. At that time too, no bank reported FX revaluation losses.\nFrom a balance sheet growth perspective, It’s observed that the highest adjustment in net loans and advances are GTB (3.2%), FBNH (3.2%), FCMB (3.2%) and Zenith (2.4%) when adjusting the foreign currency net loans to N380/USD from N360/USD based on their latest audited financial records released.\nWhile on the customer deposit side, records show the highest adjustment in Zenith (4%), FCMB (4%), FBNH (3.9%) and Access (3.8%).\nConsequently, asset quality deterioration concerns could be minimal for now: while awaiting disclosure from banks on the foreign currency components of non-performing loans, it’s expected that 5.6% devaluation of the naira will result to a 5.6% deterioration in non-performing loans at a worst-case scenario, assuming that all the non-performing loans are in foreign currency.\nFurthermore, the continuous spread of COVID-19, its impact on the global economy and Nigeria remains a key risk to the banks currently, as company-specific issues take a back burner.\nNevertheless, Nigerian banks with resilient and robust balance sheet and high efficiency as it places them in a better position to weather the storm. Hence Guaranty Trust Bank and Zenith Bank remain on top as most likely to gain from the recent devaluation of the naira.\nHowever a weaker naira also increases Nigerian banks’ risk-weighted assets related to their foreign currency loans, putting negative pressure on their capital metrics, but, the banks hold good capital buffers.\nDownload Nairametrics App for breaking news and market intelligence.\nThanks once again for fhe beautifully researched and insightful write up. I have visited this blog almost every day for more than 4 years now and am always quick to refer and share your articles.\nKindly shed some light on the components used in arriving at the foreign currency assets and liabilities. The article only identified fx loans on d asset side.\nWhat makes up the fx liabilities and what other fx assets are considered in arriving at the net position.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/03/31/nigerian-banks-broadly-positive-after-naira-devaluation/"}
{"doc_id": "71854897c105250505ac606fcf0fe388", "text": "Fidelity Investments is launching a pair of crypto-focused exchange-traded funds in a bid to grab flows from rivals that have swooped into the nascent space.\nThe Fidelity Metaverse ETF (ticker FMET) and the Fidelity Crypto Industry and Digital Payments ETF (FDIG) will begin trading Thursday. FMET will primarily invest in companies involved in building out the “future state of the Internet.”\nFDIG will track blockchain and digital payment processing companies, according to a statement.\nFidelity steps into an increasingly crowded market with more than a dozen crypto-themed equity ETFs already trading. The firm had hoped to launch a spot Bitcoin ETF, but the Securities and Exchange Commission rejected its application this year and has not approved of proposals by other firms for similar products.\nFidelity faces tough competition in the thematic arena as well, as billions pour into such funds across the industry and firms such as BlackRock Inc. build out teams. However, the firm’s scale will likely give the issuer a leg up in the crypto space, said Jennica Ross, managing director at WallachBeth Capital.\n“People are increasingly becoming familiar with what the metaverse is, and what it could be in the future. Naturally, investors are looking for ways to play this,” Ross said.\n“The question of success is often a combination of first-mover advantage – like we saw with Roundhill’s METV fund – along with access to distribution, which Fidelity and other larger issuers have.”\nThe Roundhill Ball Metaverse ETF (METV) is a front-runner among other metaverse ETFs, with $705 million in assets under management less than a year after it launched, according to data compiled by Bloomberg.\nNow, FMET is coming in with the lowest fee among the four other ETFs that track the metaverse: 39 basis points. FDIG also charges 39 basis points.\nFMET isn’t Fidelity’s only foray into the metaverse. Also on Thursday, the firm is launching a metaverse experience called “The Fidelity Stack,” aimed at teaching retail traders the basics of investing.\nIt will be built in Decentraland, a browser-based metaverse backed by the Digital Currency Group. And, it will be accessible to any user via computer, including those without Fidelity trading accounts.\n“We are very focused on reaching the next generation of customers to Fidelity,” said David Dintenfass, chief marketing officer and head of emerging customers at the firm.\nFidelity joins other major financial institutions launching their own metaverse experiences. JPMorgan Chase & Co., for instance, also has a lounge in Decentraland where visitors are greeted by a digital portrait of Jamie Dimon and a roaming tiger.\nAnd HSBC Holdings Plc debuted in the metaverse in March by acquiring a space in The Sandbox, a blockchain-based mobile game consisting of a map of virtual lands which can be bought, sold and built upon.\nIn addition to the crypto-focused ETFs, Fidelity is also launching five sustainable fixed-income mutual funds and ETFs on Thursday. The new offerings expand Fidelity’s ETF lineup to 51 products with more than $33 billion in assets, a spokesperson said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/cloud-hosting/579698/fidelity-joins-other-major-financial-institutions-inside-the-metaverse/"}
{"doc_id": "deceea08b8c6f34b5a948a3006f05f2e", "text": "Longhorn Publishers is betting on digital books to reach a wider audience and grow its revenue.\nThe only Nairobi Securities Exchange (NSE)- listed publisher in an interview with the Business Daily said it has digitised all its books available on hardcopy and are currently available on Amazon and Worldreader.\nThe firm has also signed a partnership with Samsung to avail its digitised content on its devices and is also seeking partnership with local mobile telecommunication firms to offer the same.\nSimon Ngigi, Longhorn managing director said that other than reducing the printing costs, digital content is easy and faster to distribute.\nThe publisher is also targeting to capture the tech savvy and the youth who prefer interacting with computer devices as opposed to hardcopy books.\n“What we see in the coming years is that more and more revenue will be generated from the digital books,” Mr Ngigi said.\n“By availing all our books in digital formats, this is not only a win to us but also to our customers since the pricing of the digital books is almost half the cost of the hardcopies which offers quite some savings to our clients,” he added.\nTo mitigate the chances of copyright infringement of the digitised books he said that all the books are encrypted by the IT platform providers they have partnered with.\n“As a matter of fact we are experiencing more abuse of copyright infringement on our hardcopy books compared to the digitised versions,” Mr Ngigi said.\nThe firm which recorded a 24.4 per cent drop in net profit following reduced sales in the year ended June 30, is also targeting county governments with its digitised content .\nThe company registered Sh71.7 million in profit after tax compared to Sh94.9 million made in the previous year.\nDuring the same period, the firm’s revenues dipped by 39.3 per cent to Sh848.4 million compared to Sh1.4 billion in the same period last year.\nThe book-selling company, suffered from low sales that was also reflected in the decline in the gross profit by 30.1 per cent to stand at Sh474.6 million.\n“The reduction in the turnover was mitigated by significant saving in the company’s selling and distribution costs in the exports markets,” the firm said in a statement issued last week.\nReap big\nLonghorn’s push for digital books comes on the backdrop of a government initiative to avail all pupils with computer devices starting January. That means reading materials to be used must be provided in the digital format.\nPublishers, animators and local universities are among those tipped to reap big from Kenya’s Sh17 billion Digital Literacy Programme.\nVictor Kyalo, the ICT Authority chief executive said time was long overdue for Kenya’s education sector to go digital, adding that opportunities presented by the shift far outweigh the costs.\n“The next phase of the knowledge economy will require a smart society where people can exploit their talents, identify opportunities and be able to grow with those opportunities,” he said.\nLast week David Waweru the Kenya Publishers Association chairman pointed out that the initiative will only pay off provided that, among other things, freedom of the Press is preserved by stakeholders.\n“The spirit of digital is to provide more opportunities to readers, writers, and content creators; not limiting options. It is about greater liberalisation of content creation and provision, not about consolidation,” he said during the launch of the 18th Nairobi International Book Fair at Nairobi’s Sarit Centre.\n“As publishers, we must engage top gear in creating digital content. Having said that, we believe that the digital book will coexist with the physical book; the two are not mutually exclusive,” he added.\nThe Kenya Institute of Curriculum Development (KICD) also organised a conference from yesterday to October 2 that features renowned researchers, innovators, and practitioners across all levels of education in Kenya, providing delegate’s with insights on the latest trends and practical tools for the advancement of mobile and online learning.\n“Advancements in technology are not limited to just improving how processes or machines work, but are now taking centre stage in how teaching and learning occur,” KICD said in a statement.\nOther than the publishers’ computing device manufacturers have recently unveiled devices targeting e- learning.\nLast week BRCK Education, a division of BRCK - a Nairobi based technology firm –launched its BRCK KioKit into the market.\nThe tablet, a component of a portable kit made up 40 ruggedised BRCK Kio tablets that cost Sh524,497 ($5,000) will be running web-based content and locally cached videos that will offer the pupils exposure to educational information.\nA piece cost Sh10,385 ($99). The firm has also entered into partnership with several international and local organisations such as Pearson, Intel- Education, e-Limu, Know-Zone, and e-Kitabu in an effort to refine learners’ experience of accessing digital content.\n“We wanted to take a holistic approach to education, hence the design of an easy to use digital solution that is uniquely tailored for the African environment. We are deploying a content-agnostic solution that allows us to curate localised and culturally relevant digital content that will improve the learning experience and give a digital edge to millions of children across the continent,” said Erik Hersman, BRCK CEO during the launch.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/longhorn-bets-on-digital-books-to-open-new-revenue-chapter-2097614"}
{"doc_id": "263d2cc54da8e1449146745f7c50534f", "text": "Johannesburg - South African sheep farmers are set to reap benefits of risk protection against prices volatility after the JSE last week launched the lamb carcass futures contract on its Commodity Derivatives Market.\nThe JSE said the move would allow farmers and abattoirs to protect themselves against the risk created through movements in the price of mutton.\nIt said the creation of the lamb carcass contract followed a similar move on beef in December 2015.\nJSE director for commodity derivatives Chris Sturgess said the value commodity market could assist farmers in protecting themselves against price volatility.\n“We have built a strong relationship with the agricultural community and are privileged to now be able to respond to the needs of the livestock sector in managing their price risks.”\nThe price of lamb has always been driven by consumer sentiment with mutton remaining the most expensive meat consumed in South Africa. Prices rise when consumers buy more meat.\nSturgess said the lamb carcass contracts would allow farmers to hedge against the risk created by such price movements. He said the contracts would also provide farmers and abattoirs with greater certainty about the income they would receive for the meat they produce.\n“This can help to support the mutton industry, which is well-positioned over the medium term to benefit from South Africa’s growing middle class.”\nWandile Sihlobo, head of Agribusiness research at the Agricultural Business Chamber said prices in the red meat market were expected to remain solid.\nSihlobo said the tougher economic environment would not have an immediate effect on the red meat market but could start weighing on prices later in the year. “The consumer and economic conditions will become very important within the red meat market this year, because as consumers become more squeezed they tend to shift away from anything that is more expensive.”\nSihlobo said farmers were benefiting from lower feed costs to rebuild their herds after last year’s drought.\nHe said as a result of promising rains, farmers have held on to their stocks and have slaughtered 11.5 percent less sheep by March, compared to a similar period last year.\n“The drought increased the cost of feed and also forced farmers to slaughter more, because they couldn’t afford to keep more of their stock. This means that farmers have been slaughtering less this year.”\nAbsa agricultural economist Karabo Takadi said the latest agri trends report on livestock last week showed that 6.4 percent fewer cattle were slaughtered during March compared to March last year.\n“As more cattle were slaughtered during the past drought, there is supply tightness in the market.\n\"This season’s good rainfall has improved growing conditions and subsequently triggered herd building This ultimately adds to the reduction in cattle supplies.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/pretoria-news/business-report/risk-protection-for-sa-sheep-farmers-9273785"}
{"doc_id": "74fa799fca90994511c2ae81c787b910", "text": "Sasol shareholders approved its controversial climate-change resolution on Friday after the first meeting had to be postponed due to activist protest, but fewer voted in favour than they did last year.\nSasol said yesterday that all the resolutions were passed by the requisite majority of voting rights at the shareholders’ meeting on Friday. The first scheduled meeting in November had to be postponed after environmental activists disrupted the proceedings.\nThe chemical and fuel from coal group said its remuneration policy was approved by 84.67% of voting shareholders, significant considering many listed companies fail to get enough shareholder support on this resolution.\nThe resolution on Sasol's climate change management approach, and its commitment to a decarbonisation pathway towards achieving its 2030 target and 2050 net zero ambition, was approved by 77.36% of shareholders.\nJust Share, the environmental, social and governance focused not-for-profit organisation, said yesterday that once the absentia votes were taken into account, Sasol received only 71% support for its climate vote this year.\nIn 2022, the percentage that voted for Sasol’s climate plan, excluding the abstentions, was about 92.5%; and in 2021, the first year that Sasol offered a non-binding advisory vote on its climate change approach, this percentage was 95%.\n“This demonstrates that support from Sasol’s shareholders for its climate change management approach has dropped more than 24% since Sasol launched its updated strategy and targets,” Just Share said in response to “Business Report” questions.\nIt said that this also indicated that as the time neared for Sasol to achieve a 30% cut in its greenhouse gas emission, shareholders were increasingly unconvinced that the group had a credible plan to do so.\n“The lack of confidence in Sasol’s strategy is supported by the fact that Sasol’s emissions increased over the past year, and its reporting confirms that these will increase again in ‘coming years’. This means it will have to achieve ever greater emission reductions in a rapidly diminishing period of time,” Just Share said.\nSasol said in an earlier notice to shareholders that it had sought shareholder approval for the resolution to endorse its commitment and progress on its decarbonisation pathway, which in turned supported the company’s ability to generate long-term value.\nSasol also wished to confirm its reporting consistency with the Task Force on Climate-related Financial Disclosure (TCFD) requirements, as a basis to report on progress and challenges faced along the company’s decarbonisation and just transition journey.\n“Since 2019, the company has been reporting in line with TCFD recommendations. Going forward, (it) will be subject to mandatory reporting requirements and is preparing for such disclosures. In 2023, the company started incorporating… disclosure requirements from the recommended International Sustainability Standards Board (ISSB). “\n“This year… there have been no material changes to Sasol’s ambition and strategy,” it said in the notice to shareholders.\nSasol’s share price traded 3.99% lower at R154.86 on the JSE yesterday afternoon, well down from R302.54 on the same day a year previously.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/sasol-shareholders-approve-climate-change-resolutions-just-fewer-of-them-e1a720af-3b78-4b59-a00c-854fd080728d"}
{"doc_id": "63a71e85c917e27e639347f37396b8a8", "text": "Curro Holdings said a creditable operating performance and strong cash flows saw headline earnings per share (Heps) increase between 14.1% and 23.1% for the year to December 31.\n“The group's high schools continue to grow in line with expectations but the challenging effects of higher interest rates on constrained consumers impacted young families particularly negatively and resulted in a reduction in enrolments of learners in the youngest grades of primary schools,” the group said in a trading statement yesterday.\nCurro had 73 159 learners on February 5, 1.9% more from the 71 809 learners on November 30, 2023. The group had 73 047 learners on February 20, 2023.\nEarnings per share figure for the year was expected to fall due in the main to the need to make impairments on schools. The charge was a non-cash item, which does not impact the prospects to generate free cash flows ahead of its capital expenditure requirements.\nHeps was expected to be between 70 cents and 76 cents, compared with 61.4 cents a year before.\nRecurring headline earnings per share (Reps), upon which the decision to declare dividends is made, would likely increase between 26.3% and 37.2% to between 70 cents and 76 cents from 55.4 cents, the group said.\nEarnings per share was expected to decline between 83.6% and 66.4% to between 6.6 cents and 13.5 cents from 40.1 cents previously.\nImpairments of between R340 million and R380m would be recognised following the impairment assessment review of its schools.\nAbout a third of the charge was due to a 1.1% increase in the cost of capital in the impairment calculations, which in turn arose from the increase in interest rates.\nCurro had 182 schools of which 28 had lower than anticipated growth over the last two years, and the company was reducing the book value of these schools relative to muted medium-term prospects.\nIn the previous financial year, non-recurring subsidy income of R25m and a reduction in deferred tax by R23m were included in the calculation of eps and Heps, but were removed for purposes of Rheps.\nThe company repurchased and cancelled 11.5 million Curro shares for R100.9m during the year. The annual results are expected to be published on March 5, 2024.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/curros-annual-earnings-grow-but-school-enrolments-are-taking-strain-2de9c43f-817e-47a7-90c8-1247eadac445"}
{"doc_id": "4f4132af2f22b500a187dee9677622f5", "text": "The new National Health Insurance (NHI) Bill, tabled in parliament on 8 August, sheds some light on the new universal health coverage will be funded.\nThe main question for medical aid members and other taxpayers is whether they can still belong to medical aids and if so, whether they will be forced to pay not only their medical aid contributions, but to also contribute towards the NHI.\nAccording to Aneria Bouwer, partner at law firm Bowmans, the answer to both questions is ‘yes’, although the details have not yet been released.\nBouwer said that the NHI will be funded by way of:\n- General tax revenue, which will include transferring funds from provincial health budgets to the NHI Fund;\n- A payroll tax (employer and employee); and\n- A surcharge on personal income tax.\n- Taxpayers’ medical scheme fees tax credit will be reallocated to the NHI Fund;\nTax credits\nThe proposal that Taxpayers’ medical scheme fees tax credit be reallocated to the NHI Fund has previously been mooted as a way for funding the NHI.\n“However, it seems more certain that taxpayers will no longer receive medical scheme fees tax credits, which for a family of four, currently provides relief of just more than R12,000 per year,” Bouwer said.\nThis amount is determined annually by SARS which states that the taxpayer who paid the medical scheme contributions is entitled to R310 per month in rebates.\nThis rises to R620 per month for the taxpayer and one dependant; or R620 in respect of two dependants.\nTaxpayers are also entitled to R209 per month for each additional dependant on the scheme.\nTotal cost to taxpayers?\n“There is as yet no indication as to how much this will cost taxpayers,” Bouwer said.\n“The taxes will be imposed by a money Bill to be introduced by the minister of Finance. According to the memorandum, these tax options will only be evaluated as part of the 6th and final stage of implementation, which will presumably not be before 2022.\n“Interestingly, it refers to the evaluation of the new tax options ‘in a favourable economic environment’,”.\nBouwer said that the NHI bill also envisages that the payroll tax will be ‘small’ although there is no indication as to what this means.\n“In the part of the memorandum dealing with the financial implications for the state, it refers to the various financing options, and then states that ‘due to the current fiscal conditions, tax increases may come at a later stage of NHI implications’,” she said.\n“It thus appears that further taxes will only be imposed at a later stage after evaluation of the potential impact thereof, taking into account the economic and fiscal environment.\n“There is no doubt that taxpayers will find the additional tax burden a bitter pill to swallow,” she said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/334237/you-could-lose-as-much-as-r12000-year-from-the-nhi-taking-your-medical-aid-tax-credits/"}
{"doc_id": "6d8fc17ddc41c4b102c16b1c37cbd98c", "text": "12 positives of the Jubilee government so far\nThe Jubilee administration recently marked two years in power and there were mixed reactions among Kenyans on its successes and failures.\nLast week, we brought you the blunders of both President Uhuru Kenyatta and his government.\nToday, we dug for their successes and this is what we came up with. Do you agree?\n1. Free maternity\nFree maternity services has been issued in all public hospitals. As a result, the government says, the number of women seeking the services has risen by 50 per cent.\nThe President signed an agreement worth Sh38 billion that will see 98 county hospitals equipped with cancer and dialysis machines. However, governors have refused to sign up to the programme saying they were not consulted.\n2. Opening JKIA terminal\nThe Jomo Kenyatta International Airport (JKIA) Terminal 2 was opened after an upgrade. The upgrade has raised the number of passengers from 2.5 million to 7.5 million, a 200 per cent increase, according to the government.\n3. Slum clean up\nThrough the Ministry of Devolution and Planning and in partnership with resident communities, the government has embarked on slum upgrading in Kibra, Korogocho, Mathare and Nyalenda in Kisumu. The programme has employed over 3,000 community youths on casual basis and established 15 village committees to spearhead the programme.\nThis has sen some 812 housing units being constructed at Kibera Soweto East–Zone “A”, alongside construction of classrooms, offices, and sanitary facilities at Mukhaweli Primary School in Bungoma County, construction of high mast flood lighting structures in various slums, construction of 3.5km access road in Kibera Phase II, among others.\n4. Beyond Zero Campaign\nFirst Lady Margaret Kenyatta launched the campaign as a way of promoting the right to health of Kenyan women. So far, the Beyond Zero Campaign has distributed fully kitted mobile clinics to 21 counties.\nBesides promoting safe motherhood, the initiative also aims at reducing mother to child HIV infections to zero. There is a national marathon to that effect.\n5. Digitization of records\nThe Teachers Service Commission has so far digitized 6,000 teachers’ files, while the Ministry of Lands, Housing and Urban Development is currently digitizing and developing the National Land Information Management Systems.\nTo date, the government says, 13 land registries have been reorganized in readiness for digitization and tender for automation has been awarded.\n6. Use of social media\nMore than ever before, the Government has adopted the use of social media as mechanisms for easy access to information and feedback collection tools amongst citizens, business community and the diaspora.\nHowever, there has not been a clear checklist on the direct benefits this move has had on Kenyans.\n7. Huduma Centres\nThe Government through the Ministry of Devolution has established 11 Huduma Centres to take services closer to the people. The idea of a one-stop shop has brought all Government services under one roof thereby increasing efficiency in service delivery.\nThe centres, it is hoped, have also reduced corruption by increasing transparency and accountability through institutionalization of the open office concept.\n8. Electricity\nSome 325 megawatts of power have been injected into the national grid in the last two years. About 280MW of this energy was generated from Olkaria I and IV; 25MW from geothermal well heads and 20MW of wind at Ngong Hills.\nAs at December 2014, Kengen’s installed capacity was at 1,575MW. The Government has also embarked on an ambitious plan to connect 22,000 primary schools to the national grid and solar energy.\n9. Roads\nThe Government embarked on the tarmacking of 10,000km road network to be implemented through the Annuity Financing program, which is designed to make Kenya a low-cost investment and trading destination, promote national integration, and improve security due to connectivity of regions and communities.\nSo far, contracts for the construction of the initial 3000km have been awarded to the private sector.\n10. Standard Gauge Railway\nThe construction of Phase I (Mombasa-Nairobi) of the SGR was commissioned in April, 2014. The project, when completed, will reduce freight costs by as much as 60 per cent, reduce road haulage and associated costs, and increase speed and efficiency.\nThe project has so far employed about 5,377 Kenyans out of the projected 30,000 jobs.\n11. Euro Bond\nKenya successfully launched the Sh180 billion ($2billion) Euro Bond in 2014 which was oversubscribed. The proceeds of the bond were used on some of the flagship projects.\nBesides, the bond proceeds are expected to stabilize the foreign exchange, reduce interest rates in the local economy and spur growth and investments.\n12. Economy rebased\nIn 2013, the country rebased its GDP culminating in a rise from Sh3.8 trillion ($43 billion) to Sh5 trillion ($55 billion). The rebasing, economists say, boosted the country making it the ninth largest economy in the continent and made it a lower middle-income country.\nThe Gross National Income (GNI) per capita also increased to Sh104,400 ($1,160)above the current World Bank’s threshold of Sh93,240 ($1,036) to qualify for middle income country status.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairobinews.nation.africa/12-positives-of-the-jubilee-government-so-far/"}
{"doc_id": "d29317a40308afa15b5b67537665e1d4", "text": "By Damilola Oyedele in Abuja and Christopher Isiguzo in Enugu   Â\nTwo weeks after the transmission of the amended Electoral Act to President Muhammadu Buhari for assent, the presidency has intensified efforts to defeat the plan by the National Assembly to override the anticipated presidential veto of the Act.\nThe lobby is intended to ensure that the required two-thirds majority votes of the 469 federal lawmakers, comprising 109 senators and 360 members of the House of Representatives, is not secured.\nThis is just as a stalwart of the All Progressives Congress (APC) has dragged the federal legislature to court in Enugu challenging the Electoral Act passed by the National Assembly altering the election sequence.\nThe lawmakers on February 14 had voted in both legislative houses to change the sequencing of general elections for the presidential election to be conducted last, instead of first, as is the current practice.\nThe amendment, which is expected to weaken the bandwagon effect of presidential elections on the governorship and state Houses of Assembly elections, has allegedly not been well received by President Muhammadu Buhari, who believes it is targeted at weakening him in the 2019 presidential polls.\nIt is therefore widely anticipated that the president would withhold his assent to the amendment of Section 25 of the Electoral Act, which provides for the National Assembly elections to be conducted first, followed by the governorship and state assemblies, while the presidential poll will be conducted last, all on separate days.\nThe president, who is required to give reasons for withholding his assent to any bill, is expected to state that the amendment to the Electoral Act, is in conflict with Sections 76(1), 132(1) and 178(1) of the Constitution, which specifically empowers the Independent National Electoral Commission (INEC) to set the dates for the elections into the National Assembly, Office of Governor, and President.Â\nThe Senate and House spokespersons, Senator Aliyu Sabi Abdullahi and Hon. Abdulrazak Namdas have, however, indicated the readiness of both legislatures to override the president, if he declines assent.Â\nThe president, according to Section 58(4) of the Constitution, has 30 days, from the time a bill is presented to him, to give assent or indicate that he is withholding his assent.Â\nSection 58(5), however, provides that “where the president withholds his assent and the bill is again passed by both Houses by two-thirds majority, the bill shall become law and the assent of the president shall not be requiredâ€.\nBut THISDAY gathered that the backlash that followed some of the lawmakers, who vocally criticised the amendment of the Electoral Act in the Senate, was also worrisome for the presidency, as the lobby was expected to be more successful in the Senate as opposed to the House where the amendment originated from.Â\nSenator Adamu Abdullahi was suddenly removed as chairman of the influential Northern Senators’ Forum, while Senator Ovie Omo-Agege was mandated to appear before the Committee on Ethics and Privileges over his comments that the amendment was targeted at the president.Â\nLawmakers who spoke with THISDAY off record at the weekend, however, believe that the requisite two-thirds votes would be secured, despite the efforts of the presidency.\n“It is two-thirds of the 469 that is required, not two-thirds of each chamber. So it is possible. We would simply call a joint session. It has been done before when the legislature overrode the veto of the President Olusegun Obasanjo on the NDDC (Niger Delta Development Commission) Bill in year 2000,†a lawmaker explained.Â\n“It is likely to pass as long as the House of Representatives is in support of overriding the veto. And this current House is willing, I can assure you.\n“Many of the members are really angry and they have reasons to be. So, even if we are unable to get many Senators on board, as we expect the EFCC to go after some senators in the coming days over past corruption cases when they were governors, we will get to override the veto,†he said.Â\nThe lawmaker further pointed out that the opposition to the president was not really about the Electoral Act, but about his perceived hostility to the legislature and his manner of governance generally.Â\nA lawmaker from one of the North-central states also disclosed that chieftains of the APC were being enlisted to lobby their “people†in both legislative chambers.\n“Unfortunately for those (chieftains) deployed from our area, the president has lost the confidence of North-central zone. The manner he has handled the Benue killings and attacks by herdsmen in other states, show that he is isolated from reality. Defeating his veto on any bill, not just the Electoral Act, would show him that he has no base in this parliament, which he does not have good relations with anyway.\n“He has refused to release the zonal intervention funds, which has killed the re-election bid of some lawmakers in 2019. So such lawmakers already know they have nothing to lose,†he said.Â\nAnother lawmaker from the North-west explained that the president has remained aloof in the face of governors on the platform of the party battling federal lawmakers from their states, and has refused to intervene in several internal crises which had deeply polarised the party.\n“If he asks my state governor to speak to me and the other members, how can that work when we do not see eye to eye. There is hardly any APC state where the party is not in disarray, how would any emergency fence mending work?†the lawmaker wondered.Â\nAnother lawmaker added that the gloves were completely off in the hostile relations between the two arms of government, then proceeded to enumerate the missteps of the president.\n“We told the president to call his overzealous and disrespectful aides to order, yet there was no action; we refused to confirm someone, yet no action; we asked for constituency funds, that one is a tussle completely ignored. We are tired of this hot and cold relationship, it is enough.\n“We were elected by our people, not by the president. So, when they try to remind us that some people here (in the legislature) rode on the back of the president in the 2015 APC tsunami, we tell them it is not necessarily a bad thing for everyone to independently test his popularity. It is better for our democracy,†he said.Â\nÂ\nN’Assembly Dragged to Court\nÂ\nBut just as the National Assembly appeared to be set on overriding Buhari’s anticipated veto of the Electoral Act, a stalwart of the APC, Chief Anike Nwoga at the weekend filed a suit at the Federal High Court, Enugu, challenging the bill passed by the National Assembly.\nThe party chieftain also prayed the court for an interlocutory injunction restraining the president from assenting to the bill.\nNwoga, who is the zonal vice chairman of the APC in Enugu East senatorial district, filed the suit on Friday through his lawyer, Godwin Onwusi.\nNo date has been fixed for hearing of the suit.\nIn his motion on notice, supported by a 25-paragraph affidavit, Nwoga is insisting that no action should be taken on the bill, pending the determination of the substantive suit.\nThe motion on notice was brought pursuant to Orders 26 and 28 of the Federal High Court (Civil Procedure) Rules 2009 and under the inherent jurisdiction of the court.\nAside the National Assembly, which was listed as the 1st defendant/respondent, others listed as 2nd to 4th defendants/respondents in the suit numbered: FHC/EN/CS/28/2018, were the Independent National Electoral Commission (INEC), the president and the Attorney General of the Federation (AGF).\nApart from the prayer for interlocutory injunction restraining the president from assenting to the bill re-ordering the election sequence, Nwoga is also praying for an order of interlocutory injunction, restraining the National Assembly from overriding the president’s veto, should he decide to veto the bill, and re-ordering the sequence of the elections, pending the determination of the substantive suit.\nThe plaintiff equally asked for an order of interlocutory injunction restraining INEC from complying with the sequence of elections contained in the bill passed by the National Assembly and such further orders as the court may deem fit to make in the circumstances, pending the determination of the substantive suit.Â\nSpecifically, the plaintiff is asking the court to among other things to determine: “Whether the National Assembly in exercise of its lawmaking powers can make laws to compel INEC to exercise the powers to organise, undertake and supervise elections conferred on it by the constitution in a particular sequence.\n“Whether the National Assembly, in exercise of her law making powers, can make a law to change the sequence of elections already adopted and published by INEC, pursuant to the powers conferred on it by the Constitution.\n“Upon the determination of the questions, the plaintiff urged the court to make the following orders: A declaration that the National Assembly cannot make laws to compel INEC to exercise the powers conferred on it by the Constitution to conduct elections in a particular order.\n“A declaration that the bill passed by the two chambers of the National Assembly, which altered the sequence of the 2019 elections, already adopted and published by INEC pursuant to the powers conferred on it by the Constitution, is a usurpation of the constitutional powers of INEC and hence unconstitutional.\n“An order of perpetual injunction restraining the 3rd defendant from assenting to the bill changing the sequence of elections, already adopted and published by the 2nd defendant, when it is presented to him for assent.\n“An order restraining the 2nd defendant from complying with the sequence contained in the bill or the law, if assented to by the 2nd respondent.\n“Any further or other orders or consequential orders that the court may deem fit to make in the circumstances of the case.â€\nÂ\nNFI Bill for Passage\nÂ\nMeanwhile, in a bid to avert Nigeria’s explosion from the Egmont Group and save the financial sector from being blacklisted in the international community, the National Assembly is set to pass the Nigeria Financial Intelligence (NFI) Bill this week.Â\nThis was confirmed by the President of the Senate, Dr. Bukola Saraki, on his twitter handle on yesterday evening.Â\nThe bill is expected to be passed on Tuesday and transmitted immediately to Buhari for his assent ahead of the next plenary meeting of the Egmont Group coming up on March 12, 2018.\nThe bill had been delayed over a disagreement at the conference committee level when the Senate and House Committees on Financial Crimes and Anti-Corruption failed to agree on the domiciliation of the Nigeria Financial Intelligence Unit (NFIU), which is currently in the Economic and Financial Crimes Commission (EFCC).Â\nHowever, following the intervention of Saraki and the Speaker of the House, Hon. Yakubu Dogara, it was agreed that the unit would be domiciled in the Central Bank of Nigeria (CBN).\nThe chairman of the Senate Committee on Anti-Corruption, Senator Chukwuka Utazi last Thursday had accused his House counterpart, Hon. Kayode Oladele, of frustrating efforts of the conference committee to conclude work on the bill, an allegation which the latter refuted.Â\nSaraki, however, assured that the leadership of the legislature would intervene in the matter.Â\nOn his twitter handle Sunday, he said: “Following my meeting on Thursday with Speaker @YakubDogara, the chairman @NGRSenate Committee on Anti-Corruption and @HouseNGR Chairman on Financial Crimes, the conference committee meeting for the NFIU Bill will hold tomorrow (Monday) and the report presented in both chambers on Tuesday.\n“I am confident that we will pass the NFIU Bill this week,†Saraki said.Â\nNigeria was suspended from the Egmont Group, a network of the financial intelligence units of 152 countries, following the nation’s failure to grant operational and financial autonomy to the NFIU.Â\nThe country has a deadline until the next meeting of the group to meet the requirements, or be expelled from the group.Â\nThe Egmont Group provides a platform for sharing criminal intelligence and financial information bordering on money laundering, terrorism financing, proliferation of arms, corruption, financial crimes, economic crimes and similar offences geared towards the support of local and international investigations, prosecutions and asset recovery.\nNigeria was fully admitted into the body in 2007 after operational admittance in 2005.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2018/03/05/electoral-act-presidency-intensifies-lobby-to-defeat-na-vote-to-override-veto"}
{"doc_id": "766f5d8a17bc029420a55cdecaea1046", "text": "The National Social Security Fund (NSSF) is set to earn a Sh5.9 million dividend from its investment in MTN Uganda after the telco declared a final payout equivalent to Sh0.149 per share.\nThe State-controlled pension fund acquired 39.18 million shares in the telecommunications firm last year when it went public through an initial public offering (IPO).\nThe dividend will be paid on June 24 through electronic bank transfers to shareholders who will be on the May 26 register.\nNSSF, which made the investment through asset manager Sanlam, was the highest-profile Kenyan investor to participate in the transaction which did not meet the target of reducing MTN Group’s ownership by 20 percent.\nThe South African multinational managed to sell a 12.96 percent stake to individuals and institutions in an offer that featured a significant discount for East African investors.\nThis is the first time MTN Uganda is publishing its results as a publicly-traded firm listed on the Uganda Securities Exchange (USE).\nNet income for the year ended December increased 5.8 percent to Sh10.8 billion, helped by a 9.7 percent jump in total revenue to Sh65.3 billion.\nThe company says the earnings would have been higher under normal trading conditions, noting that it paid a total of $17.1 million (Sh1.9 billion) in licence fees and costs of terminating a services agreement with Invesco Uganda Limited.\n“The adjusted profit after tax of Sh12.2 billion results into a 20.4 percent year-on-year increase if the above is excluded and an increase of [net] margins by 1.7 percentage points,” the telco said of the impact of the non-recurring payments.\nMTN Uganda saw its customer numbers rise 10.7 percent to 15.7 million, with active data subscribers jumping 16 percent to 5.3 million.\nIts financial service subsidiary MTN Mobile Money Uganda paid the parent company a dividend of Sh1.9 billion in the review period.\n“We see a significant opportunity for data growth in fixed connectivity through MTN WakaNet, fibre to home and fibre to business, and will continue our investment programme in that segment,” the telco said in a statement.\n“We are currently progressing with the implementation of a new pricing framework for the fixed data connectivity services to widen our customer catchment area.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/industry/nssf-set-to-earn-sh5-9m-dividend-from-mtn-uganda-3740172"}
{"doc_id": "35e7879409fcc63f181d35e334e752f1", "text": "By: Tyrone Lowther\nJANUWORRY, the toughest financial month of the year for most South Africans, is soon approaching. Thanks to a combination of Christmas overspending and the long wait for payday, many will start 2024 with a financial hangover, stretching already bursting budgets past breaking point.\nIt is possible to have a festive December and a worry-free January without relying on credit and 2-minute noodles. All it takes is some smart money management, a few minor adjustments, and an iron-clad budget.\nLowther offers the following tips for a money-smart festive season:\n· Budget like a boss – To draw up the December/January budget, start with a list of fixed expenditures and other essential monthly deductions. Ensure that you have enough funds to cover these expenses, plus a bit extra for savings and for any unexpected expenses. What remains is what you can afford to spend on festive fun.\n· Be bonus savvy – Not many South Africans will be fortunate enough to receive extra pay this year in the form of a bonus, but for those who are this is the most important budget-wise tip: don’t blow it. It might be fun to have some extra cash, but it’s smart to use your bonus to pay off your debt (starting with debt with the highest interest rate first), to invest it, or to put it into a savings account.\nEntertain smartly – If you are hosting family and friends over the festive season, make it a “bring and share”. Co-ordinate the different dishes guests bring so that you don’t end up with three roast chickens and no dessert.\n· Cut down on gifts – Quality time with loved ones and hand-written, thoughtful cards are worth more than any gift, so speak to your family about keeping gifts low-key.\n· Smart shopping – Don’t get taken in by the festive season hype. Do your research, shop around, and compare offers to make sure that you get the best deal. Buy in bulk, where possible, and use your loyalty cards to get a discount. Beware of too-good-to-be-true deals – online fraud is rife and criminals are always out to make a quick buck.\n· Beware of being too busy – Making the most of your break doesn’t mean you need to break the bank. Rather plan for fewer activities and budget for these properly. For the rest of the time, look for less expensive or free entertainment alternatives.\nRoad trip – If you are planning a holiday, make sure that your car is road trip-ready before you leave to avoid costly repairs or even an accident. Plot your route. Plan your stops, set aside cash for any tolls, and save on fuel by having your car serviced.\nRemember that making some minor adjustments to your driving style can boost your car’s fuel efficiency by as much as 40%. This includes checking the wheel alignment and air pressure, switching off the air con, removing unnecessary items from the car, driving smoothly and not stop-starting, and driving at a lower speed but in a higher gear.\nThe festive season can be all about spending time with your friends and family rather than spending large amounts of money. The small sacrifices you make, and the restraint you exercise now, will serve you well in the long run and set you up for a money-savvy, successful 2024.\n* Lowther is the head of Budget Insurance.\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/financial-planning/budget-your-december-for-a-worry-free-january-ce5fb98c-58f4-457d-8b3c-1a9f229a3270"}
{"doc_id": "6bb382117724297ee8b5af3561f9789e", "text": "Many young Nigerians are abandoning farming and rural communities, choosing to migrate to urban centers in search of white-collar jobs.\nBut Femi Eniola, founder and chief executive officer of Osky Catfish Hatchery – an aquaculture business based in Ondo has decided to stay in the rural area and venture into the agricultural sector to tap farming opportunities.\nEniola, an inspiration for many youths, is leveraging opportunities across the country’s catfish value chain.\nHe was inspired by his craving for dried catfish and upon his return to Nigeria after living in Australia, the United Kingdom, and the United States, he established his business.\n“While abroad, I craved a lot for catfish but would always find it difficult to get African Catfish. Most of the ones I find on most shelves are from Thailand and the Philippines,” he says.\n“In my curiosity, I researched why most African stores abroad stocked more of East Asian catfish than those from Africa despite producing it as well,” he explains.\n“In my quest, I decided to enroll in catfish production training in the Philippines to know what the Philippines are doing differently to become top exporters of catfish,” he adds.\nDuring his training in the Philippines, he discovers that they were cultivating a catfish of African origin – Nigeria to train participants.\nAccording to him, it was shameful and disappointing to come from Nigeria to the Philippines to learn how to breed catfish that originally came from his own country.\nRead also: Food inflation to worsen as insecurity bars farmers from harvest\nAll this inspired Eniola to establish Osky Catfish Hatchery. Since starting the business has grown steadily and currently has 28 employees.\nOsky has expanded its production into catfish sausage, burger patty, and fish nuggets. Weekly, his hatchery processes four tons of fresh catfish to a ton of dried catfish.\nEniola says he has gotten recognition from the Federal Government, the Ondo State Government, the Central Bank of Nigeria, and the Ooni of Ife for his achievements in the agricultural sector.\nResponding to questions on major challenges confronting the country, he says finance has remained the major challenge facing his business.\nHe notes that it has been difficult to access finance from commercial banks, adding that inadequate finance has prevented youths with innovative ideas from kick-starting their businesses.\nHe identifies the impact of climate change on his business and the quick-get-rich syndrome among youths. “A lot of people you work with want to take advantage of you. They want to make money overnight without going through the process.”\nHe states that dedication, passion, resilience, and self-belief among others is what have helped him to become profitable in the business.\nHe urges youths to be resilient in their pursuit, noting that there are loads of opportunities in the agricultural value chain yet to be tapped.\nHe advises youths to leverage every form of training to unlearn and relearn. “Be very hard-working, stay consistent and take advantage of social media to do business beyond their current environment.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/agriculture/article/how-femi-eniola-gives-glamour-to-agriculture/"}
{"doc_id": "334631806db4fdc8b2f0481d91dd81e8", "text": "African Equity Empowerment Investments (AEEI) increased revenue 27% in the year to August mainly due to better squid catches and improved prices in the fishing division, but the group bottom line was affected by losses and impairments in the technology division.\nA loss before tax was due to accounting adjustments for impairment of the investment in an associate held for sale, and the unbundling loss from the disposal of AYO Group from the technology division.\nRevenue from continuing operations increased 27% to R734.25 million. Net asset value per share was down 75% to 246.07 cents. The dividend was passed.\nThe fishing and brands division reported a solid performance, with revenue up 19% to R566m, primarily due to an increase in the squid catch rates and volumes sold in the squid sector, compared with the prior year.\nThe export demand for squid was “very strong” with selling prices improving, and the group was able to sell at better exchange rates than expected. Operating profit for this segment increased to R74m from R14m.\nOther sectors that did well included South Coast rock lobster, pelagic, hake and Seagro. The West Coast rock lobster and abalone has had tough years, but due to cost-cutting, their earnings before interest, tax, depreciation and amortisation broke even.\nIn the Technology division, the 49.36% stake in AYO was disposed of on July 31. AYO contributed R2.1bn revenue and losses of R512m for the 11 months to July 31.\nGlobal Command and Control Technologies for the first time reported a positive annual operating profit, and a R1.4m net profit compared with a prior year R21.8m loss.\n“As the only original equipment manufacturer on the African continent, the company was able to experience revenue growth while reducing and maintaining a low-cost base,” a statement said.\nIn the Health and Beauty segment, Orleans Cosmetics increased revenue 10% to R38m as it continued to recover from the Covid-19 pandemic, with customer sales improving.\nGlobal supply chain issues that led to delayed deliveries affected sales. Nuxe traded well with sales up 16.7% and it now represented 40% of the company’s sales.\nAfriNat increased revenue to R12.1m compared with R11.8m the prior year.\nThis was based on a shift from the depressed citrus market from the previous year. Revenue was derived from new clients which AfriNat was expanding to, and from new territories in the northern provinces.\nThe research and development division was doing product development at different stages, including developmental work on the dendritic cell vaccine for cancer immunotherapy and communicable diseases such as extreme drug-resistant tuberculosis.\nThere was minimal progress in this division owing to funding challenges and management was seeking alternative funding partners.\nIn the events and tourism division, revenue from ESP Afrika increased to R7m from no revenue the prior year, indicating a recovery from Covid-19 restrictions, which also led to the cancellation of events and large public gatherings, including the division’s flagship event, the annual Cape Town International Jazz Festival.\nThe company anticipated a further revenue increase due to the planned hosting of the Cape Town International Jazz Festival.\nThe corporate division holds strategic investments including BT Communications Services South Africa (BTSA). On September 26, AEEI subsidiary Kilomix Investments entered into a share repurchase agreement with BTSA, for it to acquire 30% of the share capital of BTSA owned by Kilomix, for R290m.\nThe corporate division incurred losses of R1.1bn from a profit of R5.7m the prior year, mainly due to the impairment of the BTSA investment of R702m.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/aeei-revenues-boosted-by-better-squid-fishing-984e9cc0-a22c-4e31-b28b-9baa0021531c"}
{"doc_id": "b31c0c4a9a8e743175878d9fb33f4634", "text": "Directors of the Betting Control and Licensing Board (BCLB) and principals of gambling firm Milestone Games risk jail and fines for defying the High Court in the continued use of SportPesa brand in Kenya’s gaming business.\nBusinesswoman Asenath Wachera Maina has petitioned the court to punish BCLB board members and Milestone Games principals -- Ronald Karauri and Bernard Chauro—for failing to terminate the use of SportPesa brand in line with court orders issued last month.\nThe High Court last month froze the licence issued to Milestone Games in August by the BCLB to use the SportPesa brand for the year to June 2023.\nThe freeze followed a petition by Ms Maina who has a 21 percent stake in Pevans East Africa that pioneered the sports gaming business in the country with the SportPesa brand.\nPevans East Africa ceased operations after losing its licence in 2019, partly due to allegations of non-payment of taxes that the Kenya Revenue Authority last computed at Sh95 billion.\nBut the brand got its first approval from BCLB in August, triggering the court fight for the key assets of the gaming firm, including the trademark and web domains.\nAlso read: Betting board split over new SportPesa licence\n“The cited contemnors herein do stand committed to jail for a period as this court may determine and or pay a punitive fine for contempt of court in that being aware of the orders issued by the High Court on September 19,” Ms Maina said in affidavits filed in court last week.\n“On September 19, the court issued an order suspending the operation and use of the bookmakers licence number 0000448 pending hearing and determination of the judicial review application.”\nThe High Court on September 19 said it was prudent to suspend the licence pending the determination of the dispute over the ownership of SportPesa.\nThe judgment, he said, might be rendered useless because Ms Maina may not recoup earnings made by Milestone Games for using the brand should her case be successful.\nMs Maina and tycoon Paul Wanderi Ndung’u, who has a 17 percent stake in Pevans East Africa, have accused Milestone Games of procuring the licence under circumstances shrouded in mystery while the country was focused on the August 9 elections.\nRead: Billionaire joins fight for SportPesa assets\nShe has faulted the BCLB for allowing Milestone Games to use the SportPesa brand, saying it acted unreasonably and in breach of laws governing betting.\nShe added that Milestone Games was previously licensed to trade as Milestone Bet and that a deal of May 26, 2022 that allowed the current use of SportPesa brand was not backed by Pevans East Africa’s board.\nThe award of the SportPesa licence has split the board of BCLB, with some directors denying knowledge of the deal and court consent.\nTwo BCLB board members Sabrina Kanini and Joy Masinde told the court that they were not part of the decision that reached a consent, which was filed in court on May 22, allowing Milestone Games to renew its licence and use the SportPesa brand in betting activities.\nMs Masinde said that lawyers representing Milestone Games and a State counsel later reached an agreement on the matter but the board was never informed of the deal for approval.\n“Just like the consent, the board was not involved at all in the process leading to the issuance of licence number 000448 to the interested party,” she told the court last week.\n“The board last held a meeting in April 2022 and I do not recall sitting in a duly convened meeting to evaluate and approve any licence including number 00048.”\nMilestone Games has in the past two years relied on a temporary court order to operate amid battles over ownership of the SportPesa trademark.\nThe key assets are listed as the SportPesa trademark, websites bearing the same name, shortcodes 79079 and paybill numbers 9555700 and 955100.\nSportPesa is the most popular gaming brand in the country, enjoying a loyal customer base of over 12 million.\nThe brand was built through heavy marketing and sponsorship of sports by Pevans East Africa at a cost of more than Sh5 billion, Mr Ndung’u said in court papers.\nPunters resumed betting on the SportPesa platforms, indifferent to the ownership wrangles which do not appear to have affected the customer experience. The fallout among the sports betting pioneers is pitting a group led by Mr Karauri against Mr Ndung’u’s and Ms Maina’s side.\nBesides being sidelined in the ownership of Milestone Games, the two entrepreneurs have also been diluted in the multinational Sportpesa Global Holdings Limited (SPGHL) which owns gaming subsidiaries in Tanzania and the United Kingdom among other markets.\nAt stake are billions of shillings in profits and dividends.\nBefore the fallout, the partners pocketed dividends totalling Sh7.6 billion from Pevans East Africa in the four and a half years to June 2019.\nOver the same period, the company reported a cumulative profit of Sh12.9 billion.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/ronald-karauri-risks-jail-over-sportpesa-brand-court-order-3995450"}
{"doc_id": "8e6706a6e86fc836070af7222db3be06", "text": "Some of Kenya’s leading companies have made it to the final list of a prestigious continental award that recognises the best use of technology to deliver business value.\nThe award, organised by a leading African technology driver, dx5, received over 600 applications from across the continent for this year’s CIO100 Awards.\nThe shortlisted Kenyan companies include the Kenya Tea Development Agency (KTDA), Sarova Hotels & Resorts, and Absa Bank Kenya, which represent a diverse range of sectors, such as agriculture, hospitality, and banking.\nThey will compete with other top companies from different African countries in various categories.\n“We are delighted to showcase the best of African technology and innovation through this award. Technology is the ultimate winner here, and it’s inspiring to witness our continent’s technological evolution,” said Harry Hare, the Chairman and Co-Founder of dx5.\nThe CIO100 Awards, which has been dubbed as The Oscars of Tech in Africa, will honour the leaders of tech in different categories, with the most coveted prize being CIO of the Year for the individual who has led the most compelling project that not only successfully incorporated technology but also merged business strategy with the organisation’s vision.\nLast year’s winner, Moses Okundi of Absa Bank Kenya, has been nominated for the second year in a row and will face stiff competition from 10 other outstanding nominees, including James Nyakomitta of APA Insurance, Martin Mwarangu of KTDA, and Debra Ngina of Sarova Hotels & Resorts.\nThe winners will be announced at a gala dinner at a beach resort in Diani on November 24, 2023.Other award categories are the Education Sector Award, Health Sector Award, Manufacturing Sector Award, SACCO Sector Award, Insurance Sector Award, and Banking Sector Award.\nNoteworthy accolades to watch out for are the dxNova Woman of the Year Award, Company of the Year Award and the CXO Influencer of the Year Award.\nThe winners will be announced at a gala dinner at the Diamonds Leisure Beach and Golf Resort in Diani on November 24, 2023.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/health/tech-innovation/article/2001484590/kenyan-companies-among-africas-top-tech-innovators"}
{"doc_id": "e36c6f15b6f10075fbb07c4a83ba95d6", "text": "$20 notes legal tender: Govt\nHerald Reporter\nPublic transport operators and traders must accept $20 notes as they are legal tender and failure to accept legal tender in transactions is outside the law, the Finance Ministry warned this week.\nSome public transport operators and informal traders in the capital are no longer accepting the $20 notes as legal tender, months after they also rejected $10 and $5 notes, effectively taking them out of circulation.\nThe rebuff has left travellers stranded as many kombi operators and tuckshop owners are not accepting the $20 notes, only $50 and $100 notes.\nSupermarkets and other big furniture shops are accepting all local notes in circulation including $5, $10, $20, $50 and $100 notes.\nHowever, Government yesterday said the rejection of local bank notes was illegal and the Reserve Bank of Zimbabwe would inquire into the matter.\n“The rejection of bond notes is illegal and we will do an inquiry with the RBZ. The $20 notes are legal tender and no one has reason to refuse the currency,” said chief director of communications and advocacy in the Ministry of Finance and Economic Development Mr Clive Mphambela.\nTransport associations also blasted operators who are rejecting notes, saying urgent action will be taken against those refusing to accept the bond notes.\nZimbabwe Passenger Transporters Organisation chairman Dr Sam Nanhanga said it was an offence for public transporters to refuse bond notes.\n“As long as it is legal tender we accept it. We also accept all forms of payment be it in local currency or foreign currency,” he said.\nMr Ngoni Katsvairo, the Greater Harare Association of Commuter Omnibus Operators secretary-general echoed the same sentiments, saying action would be taken against those who were not accepting local currency.\n“As an association, we have not ordered any operator to reject bond notes. If the operators are rejecting local currency, the passengers must get the code inscribed at the back of the kombi and urgent action will be taken against the driver and the conductor and eventually the owner of the vehicle,” he said.\nZimbabwe Union of Drivers and Conductors president Mr Frederick Maguramhinga concurred with his counterparts and said: “To be honest, we do not allow what is not allowed by the Government, that is to reject the legal tender of this country.”\n“This is our policy and we are we do not allow any driver or conductor to refuse the bond notes. We are accepting every form of payment and we are not selecting the types of notes to be paid.\n“If the passengers see any of our members refuse to collect the $20 notes, they should call us and proper action will be taken against the driver or the operator of the kombi,” Mr Maguramhinga said.\nPassengers have also raised an outcry over the rejection of the $20 notes saying it has greatly affected their transport from their homes to the city centre and back.\nThey have urged Government to act against informal businesses that were rejecting $20 notes, a situation that is now adding pressure on the cash crisis.\nMiss Nyaradzo Chibukwa from Warren Park said Government should intervene and resolve the situation as bond notes were legal tender.\n“What the conductors are doing is not fair because we would have received the money from the bank in $20 notes so they have no right to refuse the money. They are saying the money is not accepted in the tuckshops in the downtown of the city centre so they cannot accept the money. Police should arrest them because it is legal tender and no one should refuse it,” she said.\nMr Bornwise Jacha from Tynwald had no kind words for the public transport operators and calls for the banning of kombis on the road.\n“I think Government has made a good move when they banned kombis during the lockdown period. These people are not human because how can a driver or a conductor refuse to accept $20 notes? Where do they think we can get the money from? This is totally absurd,” Mr Jacha said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/20-notes-legal-tender-govt/"}
{"doc_id": "3530a6dd15a33f9b1ad1701b2d8ff36f", "text": "Microsoft Corp’s cloud-based software helped drive robust sales and profit growth, which topped analysts’ estimates for an 11th straight quarter.\nRevenue in the first quarter, ended Sept. 30, climbed 22% to $45.3 billion, the Redmond, Washington-based software maker said Tuesday in a statement. That exceeded the $43.9 billion average estimate of analysts polled by Bloomberg. Profit excluding a tax gain rose to $2.27 a share, compared with predictions for $2.07.\nSales forecasts by division for the current period also topped projections.\nChief executive officer Satya Nadella has extended the company’s success in cloud computing by lining up a steady stream of deals for Azure software, which stores data and runs applications for corporations. Internet-based Office programs also keep growing as Microsoft persuades customers to pay up for high-end versions and expanded contracts.\nSales of Azure and other cloud services increased 50% in the recent period, just shy of the 51% rate in the prior quarter. Sales of Office 365 to business customers rose 23%, as demand for advanced features pushed more customers to the pricier subscriptions.\n“We used to say, ‘We’re going to have a huge party if they could do greater than 10% revenue growth’ and now they’re about double that,” said Dan Morgan, a senior portfolio manager at Synovus Trust Co., which owns shares of Microsoft. “It seems like Azure more recently has been kind of grabbing a little bit more market share.”\nMicrosoft shares gained about 1.6% in extended trading, after rising to $310.11 in New York. The stock increased 4.1% in the fiscal first quarter, while the S&P 500 Index was unchanged in the same period.\nOn a conference call, Microsoft said it sees Intelligent Cloud sales in the fiscal second quarter of as much as $18.4 billion, above the $17.9 billion average estimate of analysts. Chief Financial Officer Amy Hood forecast revenue in the More Personal Computing division to be as high as $16.8 billion, more than $1 billion above estimates.\nIn the past week, the software giant’s shares have hit all-time highs, reflecting investor optimism about growth prospects for Azure, Office, artificial intelligence and gaming. The company’s market capitalization sits above $2.3 trillion.\nMicrosoft revenues across product lines rise led by cloud\nIncluding the tax benefit, first-quarter net income rose to $20.5 billion, or $2.71 per share, Microsoft said. The benefit relates to Microsoft bringing some intellectual property back to the U.S., which will result in a higher overall tax rate later, Hood said in an interview.\nCloud sales to businesses in the recent quarter rose 36% to $20.7 billion, topping $20 billion for the first time, Microsoft said. Gross margin, or the percentage of sales left after subtracting production costs, in that area narrowed “slightly” to 71%, the company said in slides posted on its website. Without the impact of an accounting change, gross margin would have widened by 4 percentage points.\nIn Office software tapped via the cloud, customers are expanding the number of user subscription they’re buying and paying more for premium product tiers to get features like added security and voice controls, Hood said. She also noted strength in corporate PCs, which carry higher-priced versions of Windows.\nThe Azure business faces stiff competition from market leader Amazon.com Inc’s Amazon Web Services and No. 3 Google. While Azure revenue has been growing at a pace above 40% a quarter, investors have sometimes been disappointed when those gains slowed in certain periods.\nAzure’s growth rate has been fluctuating in recent quarters because of currency exchange rates. In the first quarter, revenue in that business increased by 48% in constant currency, compared with a constant-currency rate of 45% in the previous period.\n“Whether we’re talking about the infrastructure layer or the data layer or adopting of some of the Azure AI technologies, we’re seeing good, strong consumption growth in a broad portfolio,” Hood said.\nThe solid gains overall allayed some investor and analyst concerns that the company might not be able to keep up the pace after a strong performance in the last fiscal year, when total sales jumped 18%.\nIn the first quarter, sales by division broke down as follows:\n- Revenue in Intelligent Cloud, made up of Azure and server software, rose to $17 billion, above the $16.6 billion average estimate of analysts polled by Bloomberg.\n- In the Productivity division, mostly Office software, sales were $15 billion. Analysts had expected $14.7 billion.\n- For More Personal Computing, made up of Windows, Surface and Xbox, sales were $13.3 billion. That compares with the $12.7 billion analysts estimated.\nThe company’s Xbox business, in particular, has been held back by supply-chain snags that have meant there aren’t enough chips to keep up with console demand. Shipping slowdowns also have made it harder to get the devices, which are transported from Asia. Microsoft is working with its supply-chain partners and trying to rush delivery, Xbox chief Phil Spencer told a Wall Street Journal conference earlier this month, but the issues will persist into the coming year.\nRevenue from Xbox hardware more than doubled, though comparable sales from the year-ago period were low ahead of the release of a new version of the console, Microsoft said. Overall gaming revenue climbed 16%.\nHood said the company continues to expect Xbox demand to outpace supply as chips remain scarce.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/cloud-hosting/532444/microsofts-cloud-computing-strength-fuels-revenue-profit/"}
{"doc_id": "534442509b705cc3e8598a42112411b0", "text": "KCB Group has launched a mobile phone-based loan repayable at a fixed interest rate of between four and 12 per cent in what is set to rival Commercial Bank of Africa’s highly successful M-Shwari and intensify the battle for mobile banking with other lenders.\nKCB M-Pesa was unveiled Tuesday in partnership with Safaricom, giving subscribers of the telecom’s mobile money platform access to loans of between Sh50 and Sh1 million repayable for between one and six months.\nMobile banking has become a competitive edge for Kenyan lenders, giving them easier and broader access to customers.\n“In the last one year KCB has seen its customer transactions with M-Pesa triple to Sh125 billion, while the volume of transactions has grown from 10,000 a day to 100,000,” said Joshua Oigara, KCB’s chief executive officer at Tuesday’s launch.\n“Now, with a dedicated product with the most comprehensive offering, the partnership will widen the possibilities of what customers can do using their phones,” he added.\nKCB is banking on its interest rates and the more flexible repayment periods to attract even non-customers and possibly replicate the runaway success of M-Shwari, a partnership between Safaricom and CBA.\nREAD: M-Shwari lending more than triples to Sh24bn\nThe newly-launched product will also compete for customers with Equity Bank’s Eazzy Loan which the bank is providing through Equitel, the lender’s six-month old mobile platform.\nKCB M-Pesa borrowers will repay the loans at interest rates of four, nine and 12 per cent over periods of one, three and six months respectively.\nThis interest is deducted during loan processing, meaning that the funds deposited into a user’s KCB M-Pesa account, for onward transfer to their M-Pesa account, will be less this facilitation charge.\nCustomers’ credit limits are calculated based on their M-Pesa transaction activity and their savings with KCB, in the event that they are account holders.\nSubscribers can also place money in a fixed deposit accounts that will earn them interest of between three and six per cent per annum for savings periods of between one and 12 months.\n“Once a customer has subscribed to the new product, their credit worthiness will be further affected by their loan uptake and repayment history as well as their savings,” said Bob Collymore, Safaricom’s chief executive officer. CBA offers their M-Shwari loans at a flat rate of 7.5 per cent.\nThe loans are repayable within a month. Fixed deposits, on the other hand, attract an interest earning of six per cent per year.\nThe maximum M-Shwari loan offered through the phone was initially capped at Sh5,000; but CBA now allows customers with good repayment records to borrow in excess of Sh8,000.\nCBA says M-Shwari, which recently signed up its 10th million customer, processes approximately 50,000 loans every day, an uptake which has grown its savings and loans accounts to Sh153 billion and Sh29 billion respectively.\nREAD: CBA now biggest retail bank with 10 million customers\nEquity Bank’s Eazzy Loan is provided at a flat rate of two per cent per month. The bank Tuesday said that it has 3.4 million customers on its mobile platform and 416,000 on Equitel who have borrowed Sh19.6 million.\n“With the dynamic industry and growing competitor environment, the customer is seeking more choice in mobile banking. The customer is seeking for more value and affordable mobile banking solutions in the market,” said Mr Oigara.\nThe launch of KCB M-Pesa is a significant moment for Safaricom since this product will be in direct competition with another of its partners who are also offering credit and savings packages.\nBanks have over the years preferred to partner with the telecom when launching mobile money products in order to ride on its huge subscription base to grow their numbers.\nMr Collymore yesterday told the Business Daily that the exclusivity contract that the telecom had signed with CBA lapsed last year, giving them the greenlight to ink other deals.\nThe Central Bank of Kenya (CBK) had also allowed the two companies to launch M-Shwari on condition that the product would eventually be rolled out to other willing banks, he said.\n“The agreement with CBA when we launched M-Shwari was they would have at least two exclusive years to recoup their investment after which both partners would be free to sign other deals,” said Mr Collymore.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/kcb-signs-m-pesa-loans-deal-to-drive-mobile-banking-2082002"}
{"doc_id": "98bc80386a49df218bb66458679a6f04", "text": "President William Ruto is expected to outline broad measures his new administration will take to grow tax compliance levels, which will be key in his plan to gradually wean Kenya off costly external debts.\nDr Ruto will in his inauguration speech today (Tuesday) announce measures to tackle the food crisis and bring down the cost of living -- perhaps the most pressing challenge of his administration in the first 100 days -- including slashing fertiliser prices.\nBut the heavier task ahead for the new President, as he settles down to work, will be dealing with the mountain of debt, the wage bill crisis, pending bills, and unemployment.\nALSO READ: Poll jitters pull output down to a 16-month low\nDr Ruto has already directed the Kenya Revenue Authority (KRA) to adopt a friendlier but more efficient tax administration system as part of his strategy to increase compliance levels in an economy dominated by the informal sector.\n“As we work together to get our economy out of the mud, I am asking every Kenyan that we must do two very important things [paying taxes and savings]. Each and every one of us must pay their taxes and I have said I am going to lead from the front, making sure I pay my taxes,” Dr Ruto said Sunday.\n“I have already talked to the KRA, they are going to be disciplined, professional and they will work with every Kenyan.”\nDr Ruto has said tax compliance is key in expanding programmes aimed at empowering the economically underprivileged groups through what he calls the “bottom-up economic model”.\nThe model, which featured prominently in his campaign platform for the August 9 closely-contested presidential poll, is anchored on “deliberately promoting investment and financial instruments targeting the millions who are unemployed, hustler [micro] enterprises, and the farmer groups”.\nThe outgoing administration of President Uhuru Kenyatta grew taxes — excluding levies, building rents, fines and forfeiture levies— from below Sh1 trillion to Sh1.84 trillion in June 2022.\nThe Kenyatta administration has, however, faced criticism from business leaders who have over the years complained of a tax regime that is largely unpredictable and one that overburdens a few persons and firms in the formal sector with increased taxes.\nALSO READ: Treasury extends job freeze into the new administration\nFor example, less than seven million taxpayers are estimated to have been registered on the electronic tax payment and filing platform, iTax, by June 2022 in a country of more than 22 million registered voters.\nThe compliance levels amongst companies was a modest 11.12 percent of 759,164 registered firms at the end of June, according to the KRA.\nThe Kenyatta administration has also been under scrutiny for spending more than half of taxes on debt repayments, eating into cash for development projects.\nDr Ruto has pledged to cut down on borrowing from rich countries like China by growing savings from a measly 7.0 percent of gross domestic product (GDP) — a measure of economic output— towards 30 percent envisioned in the country’s long-term development blueprint, the Vision 2030.\n“I am looking forward to the day, soon enough, when we borrow from the savings of the people of Kenya to run our development instead of borrowing from other countries, and that is what holds the future for us,” Dr Ruto said.\nThe outgoing administration, in which Dr Ruto served as Deputy President, relied on loans to build much-needed roads, bridges, power plants and the standard gauge railway (SGR), largely funded by Chinese state-run lenders — Exim Bank of China and China Development Bank.\nDr Ruto’s plan appears to be in line with the recent reform journey the Treasury and the KRA had embarked on.\nTreasury Cabinet Secretary Ukur Yatani has proposed an amendment to the law to rebrand the KRA to Kenya Revenue Service (KRA) in a move aimed at transforming “its public image thus enhancing tax compliance through improved public relations and maintaining a clear focus on taxpayers’ needs”.\nALSO READ: Kenyans battle sharpest cost of living spike in five years\n“The term ‘Authority’ sometimes has a connotation of a command… and commanding is not the real role of KRA. Our role is of service delivery to the people,” KRA board chairman Francis Muthaura told the Business Daily last October.\n“We have geared up towards expansion of the tax base as a tool for establishing a stable equilibrium in the taxation equation.”\nIn a bid to ensure predictability in the tax administration, the Treasury has further drafted a National Tax Policy.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/economy/bumpy-economic-ride-for-william-rutos-first-100-days-3946452"}
{"doc_id": "691b7f0f12e5ee1f9d43584f2c21196e", "text": "Advertisement\nTransforming economy through agriculture: Tree Crops Development Authority leads charge\nOn September 19, 2020, when President Nana Addo-Dankwa Akufo-Addo inaugurated the Tree Crops Development Authority (TCDA) in Kumasi, he foresaw Ghana’s economic transformation hinging on agriculture.\nHis belief in the agricultural sector as the surest way to transform the economy led to the rollout of the agricultural flagship policy, Planting for Food and Jobs (PFJ), which covered five broad areas.\nThese are the Planting for Food and Jobs (Crops), the Rearing for Food and Jobs, the Planting for Export and Rural Development (PERD), the Greenhouse Technology and Mechanisation.\nTCDA Act, 2019 ( Act 1010)\nThe TCDA, a legal institution established by an act of Parliament, Tree Crops Development Authority Act, 2019 ( Act 1010), is projected to lead the charge in using six tree crops to generate a minimum of $6 billion annually starting from the year 2028.\nThe TCDA, an offshoot of the PERD, is, thus, tasked to regulate and develop in a sustainable environment; the production, processing, pricing and marketing of six tree crops, namely Oil Palm, Rubber, Shea, Coconut, Cashew and Mango.\nThe authority was, therefore, set up to lead the agenda for the diversification of Ghana's agriculture by putting in place policies and programmes to guide research, production, processing, pricing and marketing of the six stated tree crops with enormous agricultural, economic, export and forex earning potential for Ghana.\nThe TCDA, with the Chief Executive Officer (CEO), William Quaittoo, is undoubtedly the unnoticed gold mine and the panacea for the country permanently weaning itself from this perennial phenomenon of going back to seek funding support in terms of loans from the International Monetary Fund (IMF), the World Bank or any of those international financial agencies.\nPotentials of TCDA\nThis is because of the potential the six tree crops have in posting between $6 billion and $12 billion annually for the country as each one is expected to give the country a maximum of $2billion.\nCurrently, there is an overreliance on cocoa, as the main foreign exchange earner, which is said to have even lost steam because available information suggests that this year, we are likely to earn less than $1 billion.\nThat is why the government must be committed to supporting the TCDA to stabilise.\nOil Palm tree with truits\nIt is therefore disturbing to learn that out of the $15 million seed money for the authority, so far, only $1.3 million has been released.\nThis is unacceptable, considering the potential of the TCDA.\nThere are best practices in other jurisdictions and one is just our neighbour, Côte d'Ivoire, which is currently doing it so well.\nMajor task\nOne major task that the new Agriculture Minister, Dr Bryan Acheampong, will face is to find ways to ensure that the TCDA is stabilised to enable it to stand on its feet and have the capacity to borrow money based on its balance sheets.\nAs a country, we cannot sit down and see TCDA crumbles down. TCDA has come to stay and everything possible should be done to put it on its feet to enable it to realise the purpose for which it has been set up.\nEven before its third anniversary, the TCDA has achieved some modest successes. For instance, as of December 2022, the authority has been able to supply 3.7 million elite seedlings of Coconut, Oil Palm, Rubber, Mango, Shea and Cashew freely to farmers.\nIt has also developed and launched a five-year strategic framework (2022–2027) to improve policy and regulatory environments conducive to leveraging both public and private sector investments to stimulate inclusive and sustainable growth in the tree crop sub-sector.\nIt has also established a digital framework for traceable supply chains and sustainable financing mechanisms to enhance the operational capacity of TCDA and the value chain actors of the six tree crops.\nThe authority is tasked to develop pricing mechanisms for cashew, oil palm and rubber with the objective of incentivising producers to sustainably increase production.\nConsequently, the authority had already started last year with the monthly minimum producer price for cashew and starting from January this year, it has added oil palm fresh fruits bunch (FFB) and raw rubber (Cup-lumps).\nProducer price\nThe monthly minimum producer price per tonne of FFB for January 2023 was GHȻ 1,252. 92 while the minimum producer price for raw rubber cup lumps for the same month stood at GHȻ 4.9167 per kilogramme.\nFor February, the price per tonne of FFB was GH¢1,157.27, while the raw rubber was GH¢5.0911 per kilogramme.\nIn March, the monthly minimum producer price per tonne of FFB was GH¢1,433.70 and that of the raw rubber is fixed at 5.5200/kg.\nThe advantage of the monthly minimum producer price is that it informs the producers, how much their product will cost to make.\nThis ultimately encourages the producers to supply more as prices are high.\nAs there will be more competitors, it gives the customers more choices in the market.\nThe monthly minimum producer price ensures that the farmer is not unduly cheated by middlemen or the market women.\nIt is clear that with the political will to stabilise the TCDA, Ghana is on its way to being truly FREE FOREVER from relying on international donor support to meet our developmental challenges.\nWriter’s Email:", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.graphic.com.gh/features/opinion/ghana-news-transforming-economy-through-agriculture-tree-crops-development-authority-leads-charge.html"}
{"doc_id": "e9108355d3e38bd66c62b654edd86b9e", "text": "Advertisement\nE-cedi to bridge gap between banked and unbanked — Dr Addison\nTHE Governor of the Bank of Ghana, Dr Ernest Addison, has said the introduction of the electronic version of the E-cedi will help bridge the gap between the banked and unbanked in the country.\nHe said when fully implemented, the E-cedi would have products and services that would make that happen.\nSince 2019 when Libra (a digital currency backed by Facebook) was unveiled, there has been a deliberate effort by several central banks to explore the option of digital currency, commonly known as the Central Bank Digital Currency (CBDC).\nIn June 2021, the Bank of Ghana announced the development of its CBDC known as the E-Cedi. The pilot stage of the E-Cedi began in September 2021.\nIn a speech that was read on his behalf at the opening of a regional course on Currency Management and Forecasting organised by the West African Institute for Financial and Economic Management (WAIFEM), Dr Addison said the E-cedi would help increase cross-border trade, accelerate financial inclusion, and offer cheaper and faster remittance inflows.\nHe said it would also help in targeted social interventions, as well as improvements in monetary policy effectiveness, payment systems efficiency and tax collection.\n“The E-Cedi will serve as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments,” he stated.\nCurrency management\nDr Addison noted that effective currency management depended on excellent information and insightful analysis.\nHe said efficient and effective currency management commenced with a strategic analysis of the currency life cycle, adding that strategic management of currency was impossible without accurate forecasts of the demand for banknotes.\n“The long lead time involved in banknote production makes it vital from a cost and reputational point of view that central banks forecast the demand for banknotes as accurately as possible. Indeed, the benefits of accurate forecasting are obvious. It encourages more efficient procurement and reduces stockholding costs,” he stated.\nHe said a disciplined, balanced approach to currency management reduced opportunity losses and thus enhanced the smooth functioning of the banking system.\nHe urged central banks to also safeguard the value of the currency through various measures such as initiating policies relating to the issue and redemption of currency, initiatives to prevent and minimise money laundering and counterfeiting, and adequately meeting the demand for money by the public.\nClear indicators\nIn his opening remarks, the Director General of WAIFEM, Dr Baba Y. Musa, said the integrity of a currency and its efficient supply were clear indicators of a well-functioning central bank.\nHe said due to the sensitive nature and relevance of that fundamental function, central banks must be effective and efficient, and present no issues that may hurt the reputation of a country's financial system.\nHe said of particular concern was the issue of counterfeiting, which was as old as money itself, and continues to pose a significant threat to financial systems.\n“Generally, effort towards protecting currencies from counterfeiters has increasingly become more dependent on cooperation/collaboration among law enforcement agencies, financial institutions and central banks, the security printing industry and the high-grade supplier's community.”\n“Cooperation/ collaboration bridges geographic, jurisdictional, cultural and organisational divisions, which were once impediments to providing comprehensive and co-coordinated solutions for combating modern financial crimes,” he stated.\nDr Musa also added that in recent times, the issue of how central banks could leverage emerging technology in the digital space to enhance the efficiency of the payments system with its potential benefits on the macroeconomic and financial stability had been studied under the introduction of the CBDC.“These issues will be covered in detail during the five-day workshop and I am certain that participants will benefit from the discussions,” he noted.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.graphic.com.gh/business/business-news/e-cedi-to-bridge-gap-between-banked-and-unbanked-dr-addison.html"}
{"doc_id": "d294e5765e4abbc1fc3fcd0d4a2b9191", "text": "Adedayo Akinwale in Abuja\nThe federal government has raised the alarm that the country’s unemployment rate would reach 33.5 per cent by 2020.\nMinister of Labour and Employment, Senator Chris Ngige, said this Thursday in Abuja while declaring open a two-day workshop on “Breaking the Resilience of High Unemployment Rate in the Country.”\nHe said that the increase in the rate of unemployment in the country was alarming.\nAccording to him, the high unemployment rate of 23.1 per cent, and underemployment of 16.6 per cent by the National Bureau of Statistics (NBS) of 2019 report was worrisome.\nHe said: “It is a worrisome status as the global poverty capital (World Bank, 2018); and concomitant high prevalence rate of crimes and criminality, including mass murders, insurgency, militancy, armed robbery, kidnappings and drug abuse, among others.\n“As if this situation is not scary enough, it is projected that the unemployment rate for this country will reach 33.5 per cent by 2020, with consequences that are better imagined, if the trend is not urgently reversed.\n“It is a thing of joy to note that Nigeria has not been resting on her oars over the years in terms of dedicated efforts to curb the unemployment problem.”\nNgige said that various government social intervention programmes targeted at reducing youth unemployment and eradicating poverty, have been implemented by different administrations since Nigeria gained independence.\nThe minister also said that available records showed that between 1972 to date, about 14 different programmes have been implemented.\nHe said that these programmes included the National Accelerated Food Production Programme (NAFPP), implemented between 1972 and 1973; the current National Social Investment Programme (NSIP), which has been ongoing since 2017, and embedded in the National Economic Recovery and Growth Plan (ERGP) 2017-2020.\nHe noted that yet, the unemployment rate and poverty levels are on steady paths of growth, indicating high resilience against the intervention efforts.\nThe minister wondered why some of the intervention efforts were not yielding expected results.\n“What is the government and other stakeholders not doing right? What changes are needed in the policies, plans and strategies?\n“What action areas need priority attention? What roles should different stakeholders play and what other options are not being exploited?\n“Why do we employ expatriates for jobs Nigerians can do or why can´t Nigerians do these jobs? Why do we have deficits in housing, water, sanitation, food, entertainment facilities, health care, and education, among others?\n“How do we deploy our population of productive age to fill the skills gaps needed for our national development?\n“How do we break the resilience of high unemployment rate in the country?” Ngige queried.\nHe said these were some of the questions that triggered new thoughts and concepts that led to series of activities that preceded the workshop.\nNgige said the workshop was aimed at presenting the outcome of some of government efforts and the commencement of another phase of the processes.\nHe, however, called for a collaborative mechanism that would yield desired results, while assuring that the recommendations from the workshop would receive prompt and sustained attention.\nIn his speech, the Permanent Secretary, Ministry of Labour and Employment, Mr. William Alo, said the workshop was aimed at examining issues around the persistent high unemployment rate in Nigeria.\nAlo said this was with a view to making concrete recommendations on how to tackle the menace.\n“This workshop is very important to the Ministry of Labour and Employment due to the direct relevance of the theme to the ministry’s mandate.\n“However, the fact remains that the consequences of high unemployment rate in Nigeria affect each and every one of us as individuals and as members of the Nigerian society.\n“The objectives of this workshop are, therefore, to present the findings of the survey on how to break the resilience of high unemployment rate in Nigeria to the peer community.\n“To stimulate actions towards exploiting untapped available options for massive job creations; to chart way forward on immediate next steps that would yield measurable results”.\nOn his part, the Country Director, International Labour Organisation (ILO) in Nigeria, Dr. Dennis Zulu, said unemployment was a major concern to the organisation, especially in Nigeria.\n“So, we believe, therefore, that if Nigeria addresses the issue of unemployment, it will go a long way to address the whole problem that is faced in Africa to that extent.\n“Let me say that over the years, we have recognised the commitment of the Federal Government of Nigeria, where it has approved various initiatives including the adoption of Employment Policy of 2017.\n“This was approved by the National Executive Council that provides a blueprint for strategies as far as the creation of jobs for Nigerians are concerned.\n“We have also taken note of the different programmes that have been implemented by the Office of the Vice President, Prof. Yemi Osinbajo.\n“These are the N-Power programme, SURE- P programme some years ago and many other ongoing programmes, ultimately supposed to contribute to the creation of jobs for young people in Nigeria,’’ Zulu said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2019/05/03/fg-nigerias-unemployment-rate-reaches-33-5-by-2020"}
{"doc_id": "b59567596ceae3759e141e6704b45904", "text": "language\n5 Nov\nSports commentator Aderonke Adesola is not the voice most Nigerians expect to hear on the radio. She is 25 years old, a woman and hosts her sports show in the local Yoruba language instead of English, which dominates most programming in Nigeria.\nLatest\n30 mins ago\nDiscover the hidden masterpieces of female artists spanning centuries, from Hildegard of Bingen's mystical illustrations to Sonia Delaunay's vibrant abstracts.\n31 mins ago\nCooling inflation, sound economic growth and low unemployment over the past year should ordinarily be helping US President Joe Biden in what is shaping up to be a rematch with former President Donald Trump. But so far, this hasn't been reflected in the polls.\n5 hours ago\nFollowing the fire outbreak at Agbado Road, Toyin Bus Stop, Iju Ishaga on Tuesday night, GuardianTV decided to visit the scene to get more information. Here's what people had to say.\n5 hours ago\nThe Al Ula event saw individual men and women, as well as teams of up to four, spend 8 hours running, jumping, climbing, crawling, and swinging over a trail in the middle of the desert. British athlete Jon Albon took the men's individual honors with Australian Ryan Atkins finishing second and American Mark Batres third.\n5 hours ago\nAs shoppers await price cuts, retailers like Home Depot say their prices have stabilized and some national consumer brands have paused price increases or announced more modest ones. Yet some industry watchers predict deflation for food at home later this year.\n1 day ago\nGerman bishops are concerned about right-wing extremism and have explicitly positioned themselves against the populist Alternative for Germany. An unusual move, as they are usually loath to comment on political parties.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/language/"}
{"doc_id": "e5d07b136dccd5d45373696113a810f7", "text": "Seven of the world’s top 10 economies by 2030 will likely be current emerging markets.\nThe prediction for a shake-up of the world’s gross domestic product rankings comes in new long-term forecasts by Standard Chartered Plc, which includes a projection for China to become the largest economy by 2020, using purchasing power parity exchange rates and nominal GDP.\nIndia will likely be larger than the US in the same time period while Indonesia will break into the top 5 economies.\nNote: Estimates are in trillions of international dollars, using purchasing power parity measures\n“Our long-term growth forecasts are underpinned by one key principle: countries’ share of world GDP should eventually converge with their share of the world’s population, driven by the convergence of per-capita GDP between advanced and emerging economies,” Standard Chartered economists led by David Mann wrote in a note.\nThey project trend growth for India to accelerate to 7.8 percent by the 2020s while China’s will moderate to 5 percent by 2030 reflecting a natural slowdown given the economy’s size.\nAsia’s share of global GDP, which rose to 28 percent last year from 20 percent in 2010, will likely reach 35 percent by 2030 — matching that of the euro area and U.S. combined.\nHere are some other findings from Standard Chartered’s economists:\n- Waning reform momentum in emerging markets weighs on productivity growth\n- The end of the quantitative easing era may mean more pressure on economies to reform and revive productivity trends\n- The middle-class is at a tipping point, with a majority of the world’s population entering that income group by 2020\n- Middle-class growth driven by urbanisation and education should help counter the effects of the rapid population ageing trend in many economies, including China", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/finance/293030/these-could-be-the-10-biggest-economies-in-the-world-by-2030/"}
{"doc_id": "9ca2e06400e31d28947615a999f1a110", "text": "Agriculture professionals are working smarter, not harder, than ever before. Smart farming technologies have enabled them to reduce costs, maximize yields and profits, and still be incredibly efficient in the process. And there is perhaps a no better example of smart farming than with the mobile app.\nAn app by Seedco is just what Zim farmers need to work smarter. Seedco’s Agronomy app has an array of services which I thought to be useful for farmers.\nWhat the app offers\nInformation about various crops\nThe Seedco Agronomy app give detailed information about crops seeds that range from maize to wheat to soya to sugar beans to soya. What kind of information? The Agronomy app lists and gives short but delayed information about different types of seeds and their benefits. For instance, on the maize seed, there are over 10 types of seeds along with useful information about the optimum conditions for each type to thrive.\nThe Growers Guide\nThis is perhaps the best feature in the Seedco Agronomy app. Growers guide is, in a nutshell, a library. You find information about how to grow various crops, various insects that attack crops, various diseases, planting time, application of fertilizer and manure. You can manage your farm from the app with this feature.\nDepot locations\nAfter you harvest, you need not have a headache to know where to take your crops. The Seedco Agronomy app list all the depots in Zimbabwe for your ease.\nYield Forecasting Calculator and others\nOkay wait, before you even harvest, you need to calculate the probable yield of your farming activities. The Agronomy app comes with a Yield Forecasting Calculator that enables you to forecast the harvest that you will likely get. Besides the Forecasting Calculator, the Seedco Agronomy app gives you access to Yield Correction to moisture content Calculator and the population Density Calculator.\nPests and Diseases\nTalk about Bacterial Stalk Rot, Fall Armyworm, Aspergillus Ear Rot etc., this Agronomy app has information about many diseases. The symptoms and the remedies of the diseases are all transcribed in this app.\nWeather Forecasts\nIf you miss watching the weather on the 8 o’clock news, the Seedco Agronomy app will have you sorted out. The app gives you weather forecasts for 5 days, which gives you time to make decisions for your farming activities. You don’t want the fertilizer to be washed away just after you finish putting it.\nYou can download the app by clicking this link.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2018/10/seedcos-new-app-is-probably-the-best-app-for-agriculture-in-zimbabwe-right-now/"}
{"doc_id": "af960e9195f7b08236f4630e90a9907d", "text": "Mexicans\n28 Jun 2023\nThe four men were allegedly part of a \"patchwork association\" of smugglers. In July 2022, 53 migrants from Latin American countries were found dead in Texas after they were shut inside a truck amid hot temperatures.\nLatest\n5 hours ago\nAs tensions escalate in the Gaza Strip, many displaced Palestinians are now gripped with fear about Israeli forces launching a relentless assault on the city of Rafah.\n5 hours ago\nIn an interview with FRANCE 24, NATO Secretary-General Jens Stoltenberg said he expected that \"regardless of the outcome of the US elections\", Washington \"will continue to be a committed NATO ally\".\n6 hours ago\nDoctors in the U.S. are struggling to contend with burnout, staffing shortages and overwhelming administrative workloads, according to a new survey. Despite these challenges, 83% of doctors in the survey said they believe AI could eventually help. More than 1,000 doctors were surveyed between Oct. 23 and Nov. 8 in the study, commissioned by Athenahealth.\n6 hours ago\nOn January 6, the US aviation regulator FAA ordered the temporary grounding of certain Boeing 737-9 MAX aircraft operated by US airlines or in US territory, affecting 171 planes.\n7 hours ago\nRussian investigators have said they are carrying out a 14-day forensic \"investigation\" of the opposition leader's body. Navalny's family has so far been refused access to his remains.\n7 hours ago\nIsrael's GDP fell by 19.4 percent in the last quarter of 2023, according to preliminary figures published by the country's Central Bureau of Statistics on Monday. It's the biggest contraction the economy has seen since the early days of the Covid pandemic, and can be attributed to the impact of the war on Gaza following the October 7 Hamas attacks.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/mexicans/"}
{"doc_id": "0832e2247adc8c447656275bf4d7e15c", "text": "Difficult market conditions as well as funding hitches have wiped out at least six Kenyan tech start-ups this year alone, hurting the country's vision to become the Silicon Savanah of Africa.\nKune Foods, Notify Logistics, WeFarm, BRCK, Sendy and Sky-Garden have shut down either in full or part of their business in quick succession in just four months to October.\nThis comes months after other startups among them BRCK, which was providing free WiFi in public transport and had funding from Facebook, were wiped out by the Covid-19 wave.\nThis month alone has seen two tech firms bow out of the Kenyan market, pointing to continuing deterioration of the sector.\nAnza Now CEO Bobby Gadhia, whose initial tech firm PC World Limited collapsed in 2016 after being in the game for 21 years, blames entrepreneurs’ above-average ambitions when starting for the rapid collapses.\n“Most start-ups and entrepreneurs are emotional and over-optimistic about their business ideas. They start these ideas without proper planning and they are disillusioned by the success of Silicon Valley,” says Mr Gadhia.\nRead: How serial entrepreneur reinvented after downfall\nIn his view, the majority of tech investors are driven by greed for quick money and hence do not make proper cases for their businesses before starting.\n“The tech sector is one of the most stressful and demanding that one can ever venture into. You have to possess balls of steel to navigate and survive. It is not for the faint-hearted.”\nOnline e-commerce platform SkyGarden is the latest casualty in this growing list.\nSkyGarden earlier last week sent termination notices to staff ahead of the planned shutdown after five years of business.\n“Five years after launching, Kenyan e-commerce platform Sky.Garden, may have to stop operations following a failed funding round,” the company announced.\nThe revelation came shortly after Sendy’s announcement to close down its retail and supplier platform known as Sendy Supply in a move that saw 20 percent of its workforce axed. The firm attributed the move to a funding drought that had hit Kenyan start-ups, blaming developed economies for raising the cost of lending.\n“We have paused the Sendy Supply services, our solution that provides a platform for general retailers to purchase stock at competitive prices from multiple suppliers and manufacturers,” said Sendy founder and CEO Mesh Alloys.\nNotify Logistics and WeFarm called it a day in July, with the former citing inability to continue breaking even due to high operation costs while the latter attributed its decision to tough market conditions that had made it difficult to scale.\nNotify was running a rent-a-shelf model which leveraged on leasing space before renting it out to a stream of small enterprises that were unable to afford a physical outlet on their own. The business had run for barely five years.\n“It has become extremely hard to maintain, and the thing is we were getting unsustainable with the vendors,” one of the firm’s directors, Helen Nyambura, had said.\nRead: Startup Notify Logistics shuts down on high costs\nWeFarm was running a shop in the form of a mobile application which had been developed to help farmers buy products online as well as share reviews and information with each other.\n“We have taken the difficult decision to discontinue one of our services: WeFarm shop. While our shop has seen incredible demand and growth over the past nine months, current market conditions make this avenue a difficult one to set up and to scale,” WeFarm’s Director of Growth Sofie Mala told media outlet CIO Africa at the time of closure.\nThe business had been in operation for eight years having been founded in 2014.\nThe first to close down in June was the food-tech venture Kune, founded by Frenchman Robin Reecht. The start-up bowed out after failure to raise Sh30 million in investor funds at the height of rising operational costs.\n\"With the current economic downturn and investment markets tightening up, we were unable to raise our next round,\" Mr Reecht had said in a statement.\nKune also revealed that it had failed to raise finances from investors to boost its operations, signifying a lacklustre tendency by venture capitalists especially from the developed world to push forth investments due to fears of recession and interest hikes.\nAn FT annual ranking of Africa’s fastest-growing companies conducted in March showed that Kenyan firms, leveraging on technology to offer products and services posted a thriving record, with two making it to the top of the continent.\nWasoko was then ranked the fastest-growing business in Africa in the FT survey trailed closely by yet another Kenyan brand known as Flocash.\nMultinational tech giants including Microsoft, Amazon and Google have also raided local firms, offering fat salaries and attractive employment terms.\nThe continued bullish strengthening of the dollar has had devastating effects on earnings by local companies, as it makes it expensive for firms to make hard currency payouts.\n*Story revised", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/why-six-kenyan-promising-tech-start-ups-fell-3987374"}
{"doc_id": "bf00b101c31c554962489fa56737ff42", "text": "SARS commissioner Edward Kieswetter says that the revenue service is engaging with National Treasury to find ways to provide relief to consumers and businesses who turn to solar and own generation to get off Eskom’s grid.\nSpeaking on the latest episode of PSG’s Think Big, Kieswetter said that he was “aligned with the principle” that people and businesses should be incentivised to alleviate pressure on the national power utility’s grid by turning to private generation.\nHe was asked whether private producers should be given tax incentives or rebates for solar, generators, inverters and batteries in light of the ongoing electricity crisis in the country.\nWhile SARS is not in charge of setting financial policy – it only collects taxes – the commissioner said that he was actively engaging with the national government around this.\nHe said that the last amendment for policies on renewable energy was made in 2016, where a long-term incentive was given that equated to an effective 28% discount on investments in renewable energy at the time.\n“Back then, we were not aware of how the crisis would grow by today,” he said.\nKieswetter said that SARS is engaging with National Treasury to review the policy to find ways to provide relief and incentivise the adoption of private and own generation.\nHowever, he cautioned that using tax is not always the most effective route to correct behaviour.\nThe commissioner’s comments come as South Africa waits on president Cyril Ramaphosa to lay out the government’s plans to boost rooftop solar in South Africa. The president recently noted that rooftop solar could become a major source of generation capacity in the country as Eskom continues to struggle to keep the lights on.\nRamaphosa said that work would soon be completed on a pricing structure that will allow customers to sell surplus electricity from rooftop solar panels into the grid.\n“To incentivise greater uptake of rooftop solar, Eskom will develop rules and a pricing structure – known as a feed-in tariff – for all commercial and residential installations on its network.”\nDesignated local content for solar panels has also been reduced from 100% to 30% to alleviate constraints. The president is expected to deliver more details on these plans during his State of the Nation Address on Thursday (9 February).\nThe City of Cape Town already has a head-start with the plan, having recently announced that it will be buying electricity from commercial solar installations from June 2023, with plans to apply the same to residential customers from 2024.\nThe push for solar comes off a big year for the energy source in South Africa, with research from PwC showing that over R5 billion worth of panels were imported in 2022.\nEskom hitting SARS\nAccording to Kieswetter, the ongoing Eskom crisis has had a huge impact on economic activity and crippled many companies – from small to large – and it will undoubtedly have a material impact on SARS’ ability to collect revenue.\nHe said that during times of crisis, taxpayers become more conservative and are often tempted to withhold tax. As such, the group’s debt book has grown significantly, prompting a more aggressive stance from the revenue service.\n“It is definitely harder (to collect), but we will leave no stone unturned,” he said.\nHe stressed that SARS is not acting out of desperation or trying to bully taxpayers during a tough time – the service is just doing its mandated job.\n“We will continue to do everything we can to fulfil our mandate. Every additional rand we collect is a rand the Treasury doesn’t have to borrow from an expensive market,” he said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/energy/662591/sars-on-tax-breaks-and-other-incentives-for-solar-in-south-africa/"}
{"doc_id": "4eae993ac5edf6af254efb9a82117199", "text": "Chelsea's £4.25bn sale to a consortium led by American investor Todd Boehly has been completed.\nThe club was put up for sale in March before previous owner Roman Abramovich was sanctioned over his links to Russian president Vladimir Putin.\nChelsea had been operating under a special government licence which would have expired on 31 May.\nBoehly said in a statement that he was \"honoured\" and \"wanted to make fans proud\".\nHis consortium fought off 11 serious rivals to become the new owners, in a sale process that started on 2 March and comprised more than 250 enquiries.\n\"We are honoured to become the new custodians of Chelsea Football Club,\" he said.\n\"We're all in - 100% - every minute of every match. Our vision as owners is clear: we want to make the fans proud.\n\"Along with our commitment to developing the youth squad and acquiring the best talent, our plan of action is to invest in the club for the long term and build on Chelsea's remarkable history of success.\n\"I personally want to thank ministers and officials in the British government, and the Premier League, for all their work in making this happen.\"\nThe UK government - which said last Wednesday it could issue a licence for the sale of the club - does not want Abramovich to receive any of the proceeds from the sale, which will instead go into a frozen bank account to be donated to charities supporting victims of the war in Ukraine.\nVery pleased @ChelseaFC is under new ownership, securing the future of the club.\n— Nadine Dorries (@NadineDorries) May 30, 2022\nSanctioning Roman Abramovich for his links to Putin was right and necessary, but it did create profound uncertainty for the club. We have worked tirelessly to ensure Chelsea FC could survive. (1/2)\nWho are Chelsea's new owners?\nSeveral parties expressed an interest, but Chelsea agreed to sell to the Boehly-led consortium earlier in May, with Californian private equity firm Clearlake Capital owning a majority of the shares as it makes its first foray into sport.\nBoehly, 48, is also a part-owner of seven-time baseball World Series champions the LA Dodgers, US women's basketball team the Los Angeles Sparks and NBA franchise the Los Angeles Lakers.\nHe has also invested in Bruce Springsteen's song rights, a sports betting firm and restaurant chains.\nOther investors include US billionaire Mark Walter, a co-owner of the LA Dodgers with a stake in the Lakers like Boehly, and Swiss billionaire Hansjorg Wyss.\nEnd of an era\nAbramovich bought Chelsea for £140m in 2003.\nUnder his ownership, the club won every major trophy - two Champions Leagues, five Premier Leagues, five FA Cups, two Europa Leagues and three EFL Cups.\nIn August 2021 they won the Uefa Super Cup and in February their first Club World Cup.\nAbramovich has appointed 13 managers and the club has spent more than £2bn in the transfer market under his ownership.\nChelsea's women's team, who became affiliated to Chelsea FC in 2004, have won five Women's Super League titles and four FA Cups under Abramovich.\nWhen an agreement for the sale was reached, he said: \"As I hand over Chelsea to its new custodians, I would like to wish them the best of success, both on and off the pitch.\n\"It has been an honour of a lifetime to be a part of this club - I would like to thank all the club's past and current players, staff, and of course fans for these incredible years.\"\nChelsea's sale - the key moments\n24 February: Russia invades Ukraine\n26 February: Abramovich gives \"stewardship and care\" of club to charitable foundation\n2 March: Abramovich says he plans to sell the club\n10 March: The UK government sanctions Abramovich\n5 May: Abramovich denies he has requested a £1.5bn loan he made to Chelsea is repaid\n7 May: Boehly agrees a £4.25bn deal for the club\n16 May: Government insider says the deal is close to collapse\n24 May: Premier League approves takeover\n25 May: Government approves takeover\n28 May: Final agreement reached with Boehly-led consortium\n30 May: Sale completed\nLatest Stories\n-\nArtists should pay particular attention to the contents of their story – Tulenkey\n-\nHajia4Reall pleads guilty in $2m romance scam case\n-\nLet’s leverage on expertise to save Ghana sports – Asamoah Gyan to sporting greats\n-\nNDC holds Policy Dialogue ahead of 2024 Elections\n-\nZambian player passes away days before Olympics 2024 qualifier against Ghana\n-\nFailure to pay 2016 bonuses retired some players – Exiled Black Queens star reveals\n-\nI’m ready for change, to stay off the street – ‘Homeless’ rapper Agbeko pleads for help\n-\nBeyoncé becomes first black woman to top Billboard country chart\n-\nRDA to work with OPEC, others to deliver robust intra-African oil and gas industry – Dr. Abdul-Hamid\n-\nCaucuses in Parliament cannot appoint leaders independent of parties – Bagbin\n-\nIES, COPEC accuse Sentuo Oil Refinery of selling unwholesome products; threaten to drag NPA, GSA to court\n-\nUBA Group MD pays a working visit to BoG Governor\n-\nECG restores power to Barekese, Owabi dams: GWL assures of water supply\n-\nReplace National Identification cards of victims of the Akosombo Dam spillage – Bedzrah\n-\nBlack Sherif billed for Rolling Stone’s Future of Music festival in the US", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/chelseas-4-25bn-sale-to-todd-boehly-led-consortium-completed/"}
{"doc_id": "28fd3db5e3e57d5cfd7f8ddd4a875978", "text": "Banks flock to Gikomba\nBooming business at Gikomba market is attracting financial institutions.\nSeveral banks are opening branches near the market and offering services to traders.\nGikomba market hosts many businesses including those dealing in clothes, furniture, food and curios.\nSo far, the market has attracted seven banks with possibility of more being opened. The ones that have opened branches there include Barclays, Cooperative, Equity KCB, Family, CFC, Stanbic and Fina.\nJeremiah Mutiso, who has been running a furniture business for more than five years in the area, said scarcity of banks meant many traders kept money in their houses.\n“Many thought one could only qualify to have a bank account if they were formally employed. Almost everyone here now has an account,” he said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairobinews.nation.africa/banks-flock-to-gikomba/"}
{"doc_id": "20a4ed4ca40d778ffbf251fe3af8229f", "text": "Its the season of goodwill and cheer, but if you live in Zimbabwe price increases are part of the festivities. The country’s largest mobile network operator Econet Wireless is set to increase the prices of bundles by 20%.\nForgive me for sounding a little salty at the beginning there, but the state of things in this country tends to bring that out of me. Prices are just galloping away from what ordinary Zimbabweans are making.\nNow, this isn’t to say that I can’t understand the reasons why Econet is doing this. They are also subject to the unstable nature of the Zimbabwean economy. Operational costs for them have increased significantly, for example, the price of electricity went up by 50% back to back in no time at all.\nEconet also incurred exchange losses of ZWL$10.3 billion in the half-year ending August 2020. This is because they have certain aspects of their operations that need to be paid for in forex. With the way the local currency’s value is eroding this is an enormous burden on their business.\nThe last time Econet adjusted their bundles prices was in September. I am sure we are all aware that in terms of the value of goods and services, September is a very long time ago.\nSo… How much will you be paying for bundles now?\nWell, we’ll know more on the 10th of December as to what the prices will be exactly. But Econet did share what some of the new prices would be, for example, a 20 MB data bundle is going up from ZWL$13 to ZWL$17. A monthly 100 MB bundle was priced at ZWL$67 but will be ZWL$84. SMSes which cost ZWL$0.34 will now cost the customer ZWL$0.36.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2020/12/econet-data-voice-sms-bundles-to-go-up-by-20/"}
{"doc_id": "37dde24eb6d4e317f4f43f260db81732", "text": "Oil is more than gold as the most important commodity in the world.\nIt’s the engine of modern economies and industries. Its underlying role in our affairs is too costly to overlook.\nWe all remember the infamous 'dumsor' and the misery and darkness our country endured because of the energy crisis. Also, the extreme hardship we are facing now because of the high prices of goods due to the high price of Oil.\nThis emphasises the all importance of oil to our lives. And when are we going to learn that without oil, our economy will grind to a halt? The nation is facing a major energy and economic crisis due to high oil prices.\nIs there something government can do to bring stability to petrol prices?\nThis is what some governments are doing to respond to the situation.\n- As a result of the war in Ukraine, the US government for the first time has ordered the release of 1 million barrels per day of oil from its Strategic Petroleum Reserve (SPR) for 6 months. This makes it the largest release in the history of the SPR- 180 million barrels of oil. This measure is to help stabilize the price of oil and control inflation.\nUnlike the US, the government of Ghana has only 3 weeks of Strategic Petroleum stock which is too limited to make any impact. - Some governments are removing the petrol tax to help reduce the burden on their citizens.\nBut the Ghanaian government is unwilling to miss GHC4 billion in revenue if petroleum taxes are removed.\nMy opinion is that the government of Ghana has no actual emergency response plan to the high petrol prices.\n******\nAuthor B.A. Mensah, An Energy Expert and Member of IES ( Institute for Energy Security).\nLatest Stories\n-\nParis 2024Q: Nora Hauptle confident Black Queens can overturn Zambia first leg deficit\n-\nAfrican Games 2023: LOC to spend GHS 33.4 million a day on ‘operational expenses’\n-\nAfrican Games: Abdulai Mukarama & Stella Nyamekye join Black Princesses as late call ups\n-\nElection 2024: I intend to keep my promises – Mahama assures Ghanaians\n-\nBawku conflict: NCA, NMC to be petitioned over closure of 4 radio stations\n-\nMinisterial reshuffle: Akufo-Addo names caretaker ministers\n-\nUK-Ghana Science, Technology & Innovation Strategy: Ghanaian delegation arrives in London to explore opportunities for implementation\n-\nFGR to recapitalize Bogoso Prestea Mine as part of planned restructuring\n-\n”Some people are bringing Hearts of Oak to a lower level; I won’t accept that” – Hearts Coach\n-\nUniversity of Ghana revises plagiarism policy to include AI\n-\nPrivate tertiary institutions must charter before August 31 – GTEC warns\n-\nKenneth Mitchell: ‘Star Trek’ and ‘Marvel’ actor dead at 49\n-\nBawumia lauds Ahmadiyya Muslim Mission for contributions to Ghana’s development\n-\nIf I can do it, you can too – Adekunle Gold to sickle cell survivors\n-\nReview BoG’s Inflation Targeting framework – US-based economist", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/b-a-mensah-government-that-successfully-manages-nations-energy-needs-will-flourish-economically/"}
{"doc_id": "d9b2e33fec65a2168502a26007984676", "text": "Econet Wireless owned fibre and satellite operator, Liquid Telecom, announced yesterday the acquisition of East African telecom assets from JSE listed Altech Group in a deal that will, according to the company, make it the largest terrestrial fibre operator on the continent. Altech will get an 8.6% stake in Liquid Telecom and 10% shareholder voting rights. In addition to the assets, Altech will however also subscribe a further US $16.5 million for the stake.\nReports on the deal explain Altech’s move to dispose of the East African assets as caused by continued challenges in the region in recent years. Altech, according to Tech Central, “says the businesses have been affected negatively by the depreciating value of certain East African currencies, by network instability and reliability issues, as well as the loss of big telecoms clients choosing to build their own networks instead of relying on third-party suppliers.”\nAssets acquired by Liquid in the deal include Altech’s 61% stake in Kenya Data Networks (KDN). KDN, operates the largest data and Internet backbone in East Africa via Microwave Radio, terrestrial fibre and Satellite providing wholesale infrastructure to the region.\nEffectively Liquid now operates a fibre network spanning 9 countries; Zimbabwe, South Africa, Lesotho, Botswana, Zambia, DRC, Kenya, Uganda and Rwanda.\nSource: Liquid, TechCentral.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2013/01/liquid-expands-footprint-with-east-african-assets-acquisition/"}
{"doc_id": "65b00c8af5fc3f70cc7a48cd1a0ad308", "text": "BON\n27 Apr 2023\nThe Broadcasting Organisation of Nigeria (BON) has faulted plans by the Nigerian Communications Commission (NCC) to sell 600MHz spectrum band, specifically and legitimately allocated for broadcasting in Nigeria.\n10 Apr 2023\nBroadcasting Organisation of Nigeria (BON) has petitioned Minister of Information and Culture, Lai Mohammed, complaining of alleged high-handedness in the National Broadcasting Commission (NBC) imposition of N5 million fine on Channels TV for supposed tolerance of treasonable outburst of a guest.\n4 Apr 2023\nThe Broadcasting Organisations of Nigeria (BON) has requested the Minister of Information and Culture, Alhaji Lai Mohammed, to call the National Broadcasting Commission (NBC) to order as it continues to display flagrant violation of the Nigerian Broadcasting Code.\nLatest\n6 mins ago\nA firm, Ajinomoto Foods Nigeria Limited (AFN) has engaged medical experts, caterers and media practitioners on the safety, quality and health benefits of food seasoning products in the human body.\n7 mins ago\nThree national winners and 15 regional winners have emerged from the National Digital Teachers’ Competition put together by the Federal Ministry of Education and Skool Media, Nigeria’s top education technology company.\n8 mins ago\nA member of the Kwara State House of Assembly (KSHA,) Ogbeni Seun Ogunniyi, has pleaded with the Nigerian media and controlling agencies, to as a matter of Corporate Social Responsibility (CSR), discourage the abuse of hard drugs by celebrities.\n11 mins ago\nAs part of activities lined up for its launch, the Support Association for Fibroids Awareness (SAFA) will provide free consultation for women living with fibroids and non-surgical fibroids removal.\n44 mins ago\nThe House of Representatives Committee on Petroleum Resources (Downstream) yesterday read the riot act to fuel racketeers and downstream sharp practices in the country.\n44 mins ago\nThe Acting Vice Chancellor, Trinity University, Yaba, Lagos, Prof. Clement Olusegun Olaniran Kolawole, has reiterated the call to add private universities to the beneficiaries of Tertiary Education Trust Fund (TETFUND), saying this is the way to go for the advancement of education in Nigeria.\n1 day ago\nTwo women who filed lawsuits against singer Trey Songz alleging sexual assault in 2015 have voluntarily dismissed their cases, according to court documents obtained by TMZ. The lawsuits, filed in October 2023, accused Songz of non-consensual sexual acts at a party at his home. Neither party has provided a reason for dropping the lawsuits. Songz…\n1 day ago\nThe Central Bank of Nigeria (CBN) on Friday said it is considering raising the minimum capital requirements for Bureau De Change (BDC) operators to N2 billion for Tier 1 licenses while it would be N500 million for Tier 2 licenses.\n1 day ago\nApple has officially debunked the age-old myth of using uncooked rice to rescue waterlogged iPhones. The company’s advice? Don’t put your iPhone in a bag of rice. Here’s why. For years, desperate iPhone users have turned to a bowl of uncooked rice as a last effort to save their water-damaged devices. The idea was that…", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/bon/"}
{"doc_id": "059f1ceef03b66619458d5d922037a33", "text": "Barclays Africa (Absa) has acquired a 49% stake in peer-to-peer lender, RainFin.\nPeer-to-peer (P2P) lending, also known as person-to-person lending or social lending, is a type of financial transaction which occurs directly between individuals or “peers” without the intermediation of a traditional financial institution.\nThe deal between RainFin and Barclays Africa marks a unique position in the P2P lending space, structured as a direct equity investment by a global bank into such a player, RainFin said.\nAccording to RainFin CEO, Sean Emery, the investment will enable RainFin to start developing its corporate product range.\nThis will soon include Supply Chain Finance, Enterprise Development Funding, Fixed Asset Purchases and Mid-sized Corporate Debt products, Emery said.\nUnder the RainFin business model, any South African resident over 18 can borrow and lend through the company.\nAfter passing a strict credit vetting process, borrowers can apply in the marketplace for loans of between R1,000 and R75,000 with a maximum repayment period of one year.\nIndividual lenders can invest between R100 and R500,000 across a portfolio of RainFin loans. Borrowers can specify the loan amount, the maximum interest they are willing to pay and the loan duration up to a year.\n“Banks, Hedge Funds, and Institutional Investors are all exploring ways to collaborate with peer-to-peer lenders,” Emery said.\n“City Group, Capital One, Bank of Montreal and Deutsche Bank have all recently started buying up loans originated through these platforms with Morgan Stanley’s wealth management division in the US also investing about $100m into peer-to-peer loans to date.”\n“With the various hedge and pension funds starting to utilise this channel, the concept of peer-to-peer lending is starting to claim its place in the financial sector globally,” the CEO said.\nAccording to Absa, the deal is a move to stay on top of the peer-to-peer lending market – a market which the bank believes will be “here to stay”.\n“Through this partnership with RainFin, we now have a front seat view on its development in South Africa and beyond,” Absa said, adding that the platform will compliment its present lending channels.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/53940/absa-shows-faith-in-social-lending/"}
{"doc_id": "c6a7c3f354ea8f564bc28ddbe292aac4", "text": "Agricultural technology insurance firm Pula Friday won the InsurTech of the Year Award during the sixth annual African Insurance Awards at an event held in Lagos, Nigeria.\nThe Kenyan company, which operates in 11 other African countries, carried the day for its role managing over 4.3 million smallholder farmers through their Area Risk Index and yield insurance product.\nThe Nairobi-based company operates “class index insurance products to manage farmer’s risks and enable them to invest more in their farms”.\nThey work with companies, governments, agricultural companies and lenders among other partners to “to bundle insurance with farm input products or loan credit”.\nPula co-founder Thomas Njeru said the award was a recognition of the company’s work in protecting small-scale farmers on the continent.\nPula co-founder Rose Goslinga said they are looking to partner with more African governments and private sector players to help drive the uptake of agriculture insurance and drive resilience for additional 10 million farmers.\n“We want to send a big shout out to the dedicated staff of pula, partners, investors, insurers and farmers that we work with. With this award we are optimistic that agriculture insurance will be a necessary product that will help transform agriculture industry in Africa,” Ms Goslinga.\nInsurTech Company of the year award targets non-insurers collaborating with insurers to improve customer service delivery, product development and innovation.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/kenyan-firm-feted-for-growing-crop-insurance-in-the-region--3235568"}
{"doc_id": "c0384a898a79029c897983a6c1b8c841", "text": "The annual South African Child Gauge has been released, and the results were not surprising: our children are in trouble. But as State Capture becomes an increasingly familiar part of our national vocabulary, and the budget for tertiary education dominates headlines, one wonders: where is the money going to come from to take care of the next generation? By MARELISE VAN DER MERWE.\nSouth Africa needs to invest in more nurturing caregiver networks if it is to mitigate the damage being done to children by violence, poverty and inequality – damage that costs the economy over R300-billion per year.\nThis is according to the 2017 South African Child Gauge, the 12th annual report of its kind, released on Tuesday 28 November.\nThe report broke down recommendations into five key areas to prioritise if children are to thrive. These were responsive care, child nutrition, violence prevention, reading, and inclusive services.\nPublished by the University of Cape Town Children’s Institute, alongside UNICEF South Africa; the DG Murray Trust; the DST-NRF Centre for Excellence in Human Development, University of the Witwatersrand; the Standard Bank Tutuwa Community Foundation, and the Programme to Support Pro-poor Policy Development in the Department of Planning, Monitoring and Evaluation, the Child Gauge is a review of the latest research on a particular theme. This year’s theme is “Survive, Thrive, Transform”, and examines what it will take to allow South Africa’s children to thrive.\nThe good news: Since 1994, poverty has decreased, and children’s survival and access to basic services has improved. According to keynote speaker at the launch, Minister in the Presidency Jeff Radebe, a greater percentage of children now live in a formal housing environment, and the well-being of children is a priority leading up to 2030.\nMany of the improvements have been at policy level. A report by Unicef and the South African Human Rights Commission, for instance, found that between 1994 and 2011, progressive legislation, reorganisation of administrative systems and, most important, the introduction of a Child Support Grant had had a significant impact on children’s quality of life. So, too, had the treatment of HIV-infected infants at government-run health facilities and more widespread access to schools.\nThe bad news: despite improvements, it’s not enough.\nThe quality of education, the number of child-headed households*, exposure to violence and the impact of inequality on the provision of basic services and human rights remain major concerns. The worse news: tackling it will be a Herculean task spanning multiple sectors.\nRadebe pointed out the developmental damage that exposure to environmental stresses could do. UCT echoed this. “Violence, poverty, hunger and poor quality education continue to compromise children’s development and life chances, with a negative impact on the country’s development [overall],” the university said in a statement.\n“Most of South Africa’s children are surviving, but too many are failing to thrive and achieve their full potential, and this is costing the economy billions in lost human potential,” it added. “Investing in children – and particularly in violence prevention, networks of care, nutrition, education and inclusive services – would drive the next wave of social and economic transformation, boost gross domestic product, and secure a more sustainable future for everyone.”\nThe failure to take care of the next generation is bad news for the economy. In perspective:\n- A recent study found violence against children cost South Africa an estimated R239-billion – or 6% of the GDP – in 2015.\n- Stunting – a sign of chronic malnutrition that affects one in four children under five in the country – compromises children’s education, long-term health and employment prospects, and costs the country an estimated R62-billion per year. The best predictor of children’s economic potential as an adult is their height at two years old.\n- The first 1,000 days of a child’s life are critical in determining his or her future development, productivity and economic contribution, and the economic returns on investing in this period of a child’s life are highest. Notably, children who fall behind at this stage tend not to catch up. Yet in South Africa, the lion’s share of education investment is in tertiary education.\n- Two-thirds of the country’s children live below the poverty line.\n- More than 5.5-million children go hungry.\n- Just 35% of SA’s children live with both their parents and 3% with their fathers – absent fathers are a significant problem.\n- Many children still enter Grade R without having had access to ECD (Early Childhood Development) programmes.\n- Many learners in South Africa are behind global averages on reading and arithmetic skills.\nFor children, the consequences of these issues can be lifelong. According to the researchers, “Frequent or ongoing harmful experiences of poverty can fundamentally change early brain development and lead to negative outcomes such as aggressive and antisocial behaviour across the life course – from bullying on the playground to violent and unstable adult relationships.”\nThe researchers say the report’s theme was chosen to align with the UN Sustainable Development Goals (SDG), because – in the words of Hervé Ludovic de Lys, UNICEF South Africa Country Representative – a new approach to human development should “start with the most vulnerable”.\nLucy Jamieson, CI Senior Researcher and lead editor of the SA Child Gauge 2017, said the SDGs could impact on South Africa “provided we start by investing in children”.\nWhich is all very well and good. But what, in practice, does this mean?\nThe practicalities\nGiven budgetary restraints, UCT called the report “a call to action” to prioritise responsive care, child nutrition, violence prevention, reading and inclusive services. It was important to build on “what is working”, the statement added.\nProf Benyam Dawit Mezmur, Chair of the African Union Committee of Experts on the Rights and Welfare of the Child, argued for the use of a) evidence-based programmes and b) starting with those who were hardest to reach first. This, he said, would both be cost-effective and speed up access to services. But solutions will still not come cheap.\nLinda Richter, Distinguished Professor and Director of the DST-NRF Centre of Excellence in Human Development at the University of the Witwatersrand, emphasised good nutrition, protection from disease, violence and stress; and opportunities to learn. “These elements are interdependent and mutually reinforcing, and are essential to prepare them for adulthood,” she said.\nIn practical terms, this means Albus Dumbledore was not far off: the first and most important cushion against childhood adversity is a nurturing network, and the capacity to absorb it. “The presence of nurturing and responsive caregivers … can make an enormous difference to enable children to reach their full potential, help break the cycle of violence and protect them from the adverse effects of poverty,” the UCT statement said. This cushion begins at home, but also extends to social support within schools and the broader community.\nNurturing young children’s capabilities, added David Harrison, Chief Executive Officer of the DG Murray Trust, can improve the chances of employment; promote economic growth, and create a safer, happier society. Nurturing children’s growth and development from conception to adulthood helps unlock their potential and can, if not eradicate inequality, at least mitigate some of its effects.\nThe report highlighted concrete steps that could be taken to build such networks.\nCaring relationships\nAt the moment, many caregivers’ capacity to nurture is impacted by violence, poverty, social isolation or the high incidence of mental health disorders in South Africa. Lizette Berry, CI Senior Researcher and co-editor, says the level of responsive care given to children and adolescents impacts on their confidence, motivation and ability to form healthy relationships. Access to services, social support and healthcare for adults therefore benefits children. The report recommends family support, parenting programmes, community-based services and practical support such as maternity leave, childcare facilities, the promotion of parent-friendly working environments, and social assistance.\nViolence prevention\nSouth Africa has a very high level of crime and violence. CI Director Professor Shanaaz Mathews says the exposure of children to abuse, neglect and other forms of violence perpetuates this cycle, increasing their risk of mental health disorders and substance abuse. The body of research on violence prevention in South Africa is increasing, however, she says – which is slowly helping to design “multisectoral prevention strategies that have been proven to work”. In the meantime, support offered remains woefully inadequate: state-sponsored facilities for sexual violence survivors, for instance, are not functioning adequately; there is a shortage of social workers, and police are facing job cuts.\nImproving nutrition\nStunting remains a perennial problem, affecting more than a quarter of children under five and costing the economy a staggering R40-billion annually. Research released in 2016 found that South African children were worse off than their counterparts in many poorer countries, including Haiti, Senegal, Thailand, Libya and Mauritania. Unfortunately, stunting is a reliable predictor of a child’s long-term economic potential, meaning many of SA’s children have a lot of catching up to do. David Sanders, Emeritus Professor and Founding Director of the School of Public Health at the University of the Western Cape, says investment in a stronger team of community health workers will help, extending healthcare to vulnerable households and promoting breastfeeding. Daily Maverick previously reported that the Zero Stunting Campaign is calling for changes to administration of the childcare grant, so that nursing mothers can access funds earlier.\nZanele Twala, Chief Executive Officer of the Standard Bank Tutuwa Community Foundation, called for children to receive both early stimulation and nutritional supplements.\nLiteracy and numeracy programmes\nA 2011 study revealed that almost 60% of learners could not read fluently, or fully understand what they were reading, by the end of Grade 4. Dr Nic Spaull, Senior Research Fellow at the Research on Socio-Economic Policy group at Stellenbosch University, says children need access to books; teachers require training, feedback and support (especially following curriculum changes), and reading should become a daily routine, inside and outside the classroom.\nFocusing on inclusivity\nChildren with disabilities are, too often, left behind. Dr Sue Philpott, who previously spoke to Daily Maverick, says the links between families, non-profit organisations and government must be strengthened in order to support children with disabilities and their caregivers. Service providers also need to shift their attitudes to provide more welcoming and inclusive environments, she added.\nOverall, the report largely told us what many of us suspect already: South Africa’s children are in trouble. Jamieson summed it up: “This calls for a multisectoral plan of action to address the many forms of deprivation and exclusion that children experience.” The question is whether – being largely unable to speak for themselves – they will get it. DM\n* Child-headed households have decreased in the interim\nPhoto: Supplied by Unicef", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2017-11-30-the-2017-child-gauge-how-we-can-turn-around-r300bn-in-damage-to-sas-children/"}
{"doc_id": "492b6d753d16c380b779c9a2a7d1cf57", "text": "EFF leader Julius Malema is reportedly aiming to shut down Absa banks across the country as part of a campaign to transform ownership.\nAccording to the Sunday Times, the political figure is demanding that 51% of the bank be put into black hands, and follows a similar march to the JSE last month.\nHe said that Absa would not be able conduct business as a result of the campaign. “Fighters will walk into a branch and occupy it. No service, no nothing. We will close it down.\nMalema, the Times said, wants 500,000 people to occupy the financial district of Sandton, although no time for the march has been allocated yet.\n“I have got a strong proposal, which I have given to the EFF, that we should consider shutting down one of the banks. I’ve got Absa a priority because it’s…racist and one of the banks that incorporated with the Broederbond banks.”\nAbsa is now majority owned by UK-based Barclays. It serves approximately 10 million clients, and has more than 800 branches countrywide. It also employs more than 30,000 people.\n“There is a huge debate going within the EFF about detailed practical programmes of attacks on white capital,” Malema reportdely said.\nAbsa told the paper that it had not received any communication from the EFF.\nThis article can be found in the 8 November, 2015. edition of the Sunday Times.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/103357/we-will-shut-racist-absa-down-malema/"}
{"doc_id": "752cedd55eb4d4872413d3e1f286cbde", "text": "Even if we agree that a National Minimum Wage might be a good idea, what should it be? Analysts are divided on whether to go high or low, and econometric models contradict each other. JEREMY SEEKINGS explores the options for GROUNDUP.\nThe Wits-based National Minimum Wage Research Initiative (NMW-RI) recently hosted a symposium on the National Minimum Wage (NMW). This was an important opportunity to consider the evidence on the effects of an NMW.\nUnfortunately, neither of the key government departments – the Department of Labour and Treasury – nor organised business participated, ostensibly because they do not want to engage in public debate outside of the ongoing closed-doors process in the National Economic Development and Labour Council (NEDLAC), but perhaps because the NMW-RI is seen as being linked to Cosatu.\nCosatu was therefore the only social partner to presents its case in detail. Alternative scholarly voices were conspicuously absent from some panels.\nMost participants seemed to agree that poverty and inequality must be addressed and minimum wage-setting is an important tool in the policy-makers’ toolbox. Most also seemed to agree that South Africa’s existing sectoral minimums (which do not cover all of the working poor) should be supplemented by a national minimum, constituting a national minimum wage floor.\nDiverse views\nThere was no agreement, however, on the tough question of the level at which a NMW should be set, the exemptions that should be permitted, the procedures to be followed with respect to both the level and exemptions, and the factors to be taken into consideration through these procedures.\nThree key themes emerged in the symposium: What can be learned from the experience of other countries? What can be learned from econometric modelling? And what do we know about the South African case itself?\nVisiting speakers from outside South Africa provided valuable analysis of the experiences with NMWs elsewhere in the world. Studies of the UK, Latin America, Malaysia and Germany showed that NMWs set at modest levels, taking into account likely employment effects, seem to have had no effect on employment while raising significantly the wages of the lowest-wage workers (although in the cases of Germany and Malaysia these are very preliminary findings, given that their NMWs were introduced in 2013 and 2015 respectively).\nIn these cases, predictions of economic apocalypse made by some business groups proved to be mistaken.\nMost of this comparative experience came from countries with very low unemployment rates: 5% or less in Germany, the UK and Malaysia, and only slightly more than 5% in the Latin American cases (Argentina, Brazil, Chile, Uruguay). This is in stark contrast to South Africa, whose unemployment rate is the highest in the world (at close to 40%) and whose employment rate is among the lowest in the world (also at about 40%).\nIn Germany, the UK, Malaysia and Brazil, the NMW was set at between 50 and 60 percent of the median wage, covering directly or indirectly about 15% of workers. These were set through institutional procedures that took very seriously possible effects on job destruction.\nThe lesson of these experiences is that a NMW set at a modest level in economies with tight labour markets (i.e. a strong demand for labour) helps the working poor.\nShould South Africa leap into the unknown?\nWhat should South Africa learn from these foreign experiences about the appropriate level of a NMW? Most of South Africa’s existing sectoral minimums are already higher in relation to median wages and together cover a larger proportion of workers than in any of these other countries (although they do not cover all low-pay workers, hence the need for a national minimum).\nCosatu’s proposal to set a NMW more than double most existing sectoral minimums would be a massive leap into what is (at best) the unknown. COSATU proposes a NMW that would affect directly more than 60% of workers and be substantially higher than the current median wage in South Africa.\nAnd, of course, this is in an economy where the demand for unskilled labour has been falling steadily, resulting in an unemployment rate that is eight to ten times higher than that of either Germany, the UK, Malaysia or Brazil (until this year). In South Africa the working poor comprise a much smaller proportion of the poor than in any of these other economies.\nIt seems that no other country in the world has ever embarked on such a massive hike in minimum wages to such a high level and covering so many workers.\nSeveral international speakers at the symposium suggested that NMWs were sometimes set too low. British economist Alan Manning suggested at the symposium that the British Low Pay Commission might have more boldly raised the UK’s NMW from about 50% to about 60% of the median wage. German trade unionist Gabriele Sterkel reported that her trade union (ver.di) was pushing to raise the German NMW from €8.50 to €10/hour, which would be less than 60% of the median wage. Manning and others insisted that raising the NMW above an ‘appropriate’ level would result in job destruction, and they implied that this level was not much higher than the modest increases they proposed.\nIn the absence of international experience of massive increases in minimum wages to the level proposed by COSATU, we might turn to econometric models that predict the effects of hypothetical levels of a NMW on employment, poverty and so on. The NMW-RI’s macroeconomic and household distribution model was presented by its designer, Asghar Adelzadeh, who flew in from the USA. Adelzadeh reported that his model predicted that a high NMW would boost the economy, although it would have no significant effect on the employment and unemployment rates.\nAdelzadeh’s model suggests that South Africa should be more confident about doing what no other country has ever done and leap into the unknown of a very high NMW. These results contradict the predictions of other models developed by the National Treasury and various other scholars (including left-wing scholars) in the past. Unfortunately, the panel did not include anyone with the expertise in macroeconomic modelling required to engage seriously with Adelzadeh.\nThe model does generate some results that are clearly very odd. For example, the model assumes that higher wages will result in higher productivity, despite slowing down the growth of investment and rendering the economy less dependent on capital. Higher productivity would, the model apparently predicts, in turn lead to higher manufacturing exports, which will surprise observers of sectors such as clothing manufacturing in South Africa (where higher minimum wages have undermined South African competitiveness). It is not clear why higher wages and productivity would automatically result in higher output rather than the same output being produced by fewer workers.\nEven more curiously, Adelzadeh’s model predicts that poverty among the poorest income quintile will drop, even without any increase in employment. This makes no sense: three out of four ultra-poor households have no working members and will not benefit at all from wage increases (as Arden Finn showed at the symposium), whilst the minority of ultra-poor households with a working member are very likely to lose their jobs if their employers are required to raise their pay from something like R500/month to the level of about R4,500-5,000/month proposed by Cosatu.\nIt is not clear that the model considers the inflationary effects of high minimums and how this might affect the real incomes of the poor, worsening the poverty of the unemployed. All of this suggests that the model’s linking of macroeconomic trends with the distribution of real household income is flawed. Those of us who are sceptical about economic modelling will worry that this model is no more likely to be a better guide to what would actually happen than other models that predict that a high NMW would lead to massive job destruction.\nJob losses and the effects on the poor\nDoes South Africa’s own past experience shed any light on the consequences of different minimums? Ben Stanwix summarised studies of the effects of sectoral minimum wages over the past fifteen years, suggesting that South Africa’s sectoral minimums until now have led to or threatened job destruction in some tradable sectors (notably agriculture and clothing manufacturing), but do not seem to have done so in some other sectors (such as domestic work).\nThis suggests that policy-makers should worry a lot about a high NMW leading to massive job destruction especially in sectors exposed to international competition. Unfortunately there was no discussion of how and why sectoral minimums in South Africa have been set at mostly modest levels – far below the level proposed by Cosatu – by both the Employment Conditions Commission and by employers and trade unions in bargaining councils.\nArden Finn also presented work that showed that even a NMW of R2,500 might affect 30% of workers, making a potentially major difference to the incomes of the ultra-poor (though he explicitly did not consider the potential costs to these workers if jobs are destroyed). The symposium presented no strong evidence, however, on the likely effects of a modest or a high NMW on these working poor.\nOne of the weaknesses of the discussion was the lack of close analysis of precisely who are the working poor. Some speakers spoke passionately about the unjust wage differentials between grotesquely overpaid CEOs and ordinary workers in companies like Lonmin. Given that the symposium was on the NMW, this gave the impression that speakers imagined that a NMW would redress this injustice.\nThis is nonsense. Not even the high NMW proposed by COSATU would make any difference to the earnings differentials within Lonmin or most large firms.\nToo many speakers seemed to believe that the working poor are employed by large national or multinational companies earning super profits.\nIn reality, the working poor comprise workers such as employees in spaza shops in shack settlements and rural areas, drivers and conductors in minibus taxis, the domestic workers employed by lower middle-class and working class households, and farm workers in the more marginal agricultural sectors.\nThese are typically low-wage workers employed by low-profit, small (and overwhelmingly black) employers. This is important in terms of the feasibility of enforcement. It might be logistically possible and politically feasible to target non-compliant white, Chinese and Indian employers, but it is far from clear that it is either logistically or politically feasible to target non-compliant small black employers.\nWhat are the alternatives?\nFocusing the symposium on the NMW specifically meant that there was no analysis of how an NMW compares with alternative ways of reducing poverty and inequality. For example, instead of trying to redistribute from low-profit employers to their low-wage workers, a truly progressive position might be to redistribute from rich taxpayers to the poor unemployed through job creation, including through an employment guarantee scheme along the line of India’s massive National Rural Employment Guarantee Scheme.\nPerhaps future symposia will facilitate more critical discussion of some issues such as these. DM\nJeremy Seekings is a professor at the University of Cape Town. Much of his work on minimum wages has been written with Nicoli Nattrass. Their criticisms of the Cosatu proposals are available through CSSR Working Paper 362and in a series of articles on GroundUp. Their most recent book Policy, Politics and Poverty in South Africa was published in 2015.\nView expressed are not necessarily GroundUp’s.\nRead more\n- Gilad Isaacs on on why an NMW will be good for South Africa.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.dailymaverick.co.za/article/2016-02-16-groundup-a-too-high-minimum-wage-will-hurt-poor-people/"}
{"doc_id": "e4eba142901f1fe17cb9b6f86dab0d92", "text": "Price escalation on business routes The British Airways strike has affected nearly 300,000 passengers.\nThe price hikes look set to worst hit business travelers on short-turnaround trips. All flights from London to Denver on Monday were sold out; but flying out Tuesday morning and returning that evening would cost a staggering £4,378 ($5,413) in economy -- an inflation of 1347% over British Airways' September lead-in fare of £325 ($402) return. According to airfare specialists Flight Centre, the average cost of a return fare from London to Denver over the past 12 months has been £425 ($526). Cairo -- which British Airways is selling for £415 on other dates this month -- costs £2,502 for an economy ticket, flying Monday and returning Tuesday. The flight time to the Egyptian capital is just under five hours, making the fare around £500 per hour -- more than the £403 average fare for the flight in its entirety over the past year. Flying Tuesday and returning Thursday, the fare leaps to £3,155 ($3,900) -- or £631 per hour -- although the return is in business class, as economy is sold out. Ironically, the flight is sold as a British Airways flight, but operated by Air Belgium, so it is exempt from the strike action. BA's sole rival on the route, Egypt Air, has fares from Heathrow to Cairo for £1,092 this week.Long haul, long prices\nTokyo is among the price-hiked destinations Other popular business destinations have seen huge price hikes. To fly to Lagos, Nigeria this week costs a minimum of £1,626 ($2,011) with Virgin Atlantic, rising to £2,098 ($2,595) for an overnight turnaround tonight. Virgin's cheapest fare for the seven-hour flight this month is £545 ($674). A two-night trip to Tokyo, departing Monday, cost £2,704 ($3,341), going out on Japan Airlines in premium economy (economy was sold out) and returning Wednesday in economy on British Airways. The average fare over the past 12 months is £568. A trip to São Paulo this week costs anything from £1,459 ($1,802) to £2,098 ($2,591) in economy. British Airways is currently selling business class tickets to Brazil's business capital for £2,094 ($2,578). And then there's Miami. According to Flight Centre, the average economy fare for flights from Heathrow to Miami over the past 12 months is £401, and last month, a British Airways sale was selling business class tickets to the city throughout September for £1,009 and first class for £1,500. Booking this week, however, a return fare in economy costs a minimum £1,980 ($2,446) to £2,613 ($3,228) -- again, in economy, three classes below first.European destinations through the roof\nIt costs eight times as much to go to Milan this week as other dates in September Meanwhile, flights to popular European business destinations have also skyrocketed. A return from Heathrow to Frankfurt over the strike days costs £837 ($1,004) in economy for a 95-minute flight, while Milan costs £883 ($1,090) on Alitalia from London City -- or £1,487 ($1,837) if you fly out in business class on British Airways, whose City Airport flights are not affected by the strikes. British Airways is currently selling business class fares from London to Milan on other dates in September from £184 ($227) return -- making this week's fares eight times more. One of the few destinations not to see a price hike is Hong Kong, whose current political problems have led to fares taking a dive. This week, passengers from London can get a premium economy seat for the 12-hour flight for £963 on premium carrier Cathay Pacific -- less than that 105-minute flight in economy from London to Nice. Gilbert Ott, the aviation blogger behind God Save The Points, who monitors last-minute travel from the UK, called this week's prices \"absolutely at the extreme end of the pricing spectrum, even for last-minute travel.\" \"It's not impossible to find business class returns to the USA lower than what easyJet is charging for a short flight, in economy,\" he said. \"In some cases these are two or three times normal walk-up [last-minute] fares. \"Obviously supply and demand is a big factor here, and without BA, supply is in short order, but airlines are certainly taking advantage of the opportunity.\" But he denied the airlines were taking advantage of passengers. \"Having absorbed quite a lot of passengers from the BA strike, if an airline is going to bump someone, they'll only do it for an extreme fare. \"But there are definitely examples where airlines however are taking advantage of a more captive market than usual, and anyone aiming to travel on these specific dates is in for an unpleasant pricing surprise.\" For anyone needing to travel, Ott suggests getting to another European city and flying on from there. Flights to Amsterdam -- connected to the UK by direct train services -- this week seem unaffected by the BA strike, with return fares available from £130 over the strike dates.DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.\nLatest Stories\n-\nDonald Trump suggests Harry would get deported …If he was elected again\n-\nSome persons deliberately attempting to destroy SML’s reputation – Atta Akyea\n-\nCultivate the spirit of discipline – Asenso-Boakye urges Bantama Islamic SHS students\n-\nWe must fish out employers who sack pregnant employees – Francis Sosu\n-\nUniversal Music buys majority stake in Don Jazzy’s Mavin\n-\nFIFA Series international friendlies pilot project to commence in March 2024\n-\nTrigmatic reveals he’s been divorced for 3 years\n-\nNEDCo announces revenue mobilisation drive\n-\nKwaw Kese mulls $1m damages against the State for 2015 marijuana arrest and conviction\n-\nFamily seeks justice for Ghanaian immigrant shot dead by unknown assailant in Toronto\n-\nPleasures Magazine Announces Name Change to ‘The Affluenz’ as Part of its Rebranding Efforts\n-\nHow Dotmount Communications revolutionizes world Public Relations (PR) with rapid global publicity\n-\nWhy should NCA, National Security lead closure of radio stations? – MFWA quizzes\n-\nJoy FM to open Ghana Month with re-enactment of Nkrumah’s Independence speech\n-\nAn egg-size banku is not all that one can eat", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/british-airways-strike-sees-fares-rise-by-up-to-2200/"}
{"doc_id": "b3e09772895d12a96af483368fa093d5", "text": "Mary Nnah\nTo ramp up the capacity of Nigeria’s pharmaceutical and healthcare industries, Access Bank PLC is set to release loans through the Central Bank of Nigeria (CBN) credit support scheme.\nThis has become necessary as the country continues to tackle the evolving crisis of the Coronavirus pandemic. The Bank is reaffirming a long-held and proven stance on fostering sustainable development across the country.\nThe loan scheme is part of a six-point palliative by the Central Bank of Nigeria (CBN), of which Access Bank is a participating financial institute (PFI). It was developed to provide funding to indigenous pharmaceutical companies and other organizations in the healthcare value chain, enabling them to increase capacity to meet the increasing demand for healthcare arising from the pandemic.\nEarlier in the month, Access Bank’s Group Managing Director, Herbert Wigwe, had reassured the public of the Bank’s commitment to do everything in its power to address the needs of the Nation in these uncertain times.\n“It has become clear to all and sundry that Nigeria’s healthcare sector is in dire need of revitalization and Access Bank, under the auspices of the Central Bank of Nigeria, will be investing heavily in this sector in the coming months. We would be looking to grow Nigeria’s capacity to not only manufacture drugs and other medical supplies locally but also encourage entrepreneurs to take advantage of the opportunities that lie within the sector,” Wigwe said.\nNigeria’s healthcare product manufacturers, including pharmaceutical drugs and medical equipment; healthcare service providers/medical facilities – hospitals/clinics, diagnostic centres, laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres, blood banks, et cetera, are eligible to access loans to enhance local drug manufacturing, increased bed count in hospitals across the country, funding of intensive care units as well as training, laboratory testing, equipment, and Research & Development.\nThe loan’s Interest rate is set at a maximum of 5.0% per annum (all-inclusive) up to 28th February 2021, making it more accessible to a larger percentage of the sector. Thereafter (from 1st March 2021), interest on the facility shall revert to 9% per annum (all-inclusive).", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2020/05/29/bank-begins-disbursement-of-loans-to-boost-nigerian-health-sector"}
{"doc_id": "9e0115952956b6f71dbdd885cab08c4e", "text": "Longhorn Publishers has grown its net profit fivefold to Sh39.9 million in the year to June on increased sales following the reopening of schools and expansion to new markets.\nThe publisher posted a Sh7.4 million net profit for the full year to June last year, recovering from a Sh226 million loss in 2020 at the peak of the Covid-19 pandemic.\nImproved earnings in the review period were driven by higher sales which jumped 40 percent to Sh1.7 billion amid increased purchase of books and other learning materials.\n“The growth trajectory is expected to continue and is sustainable given the investments made to develop new markets under the new curricula,” said Longhorn in its financial report.\nThe publisher recently expanded to the Democratic Republic of Congo (DRC) in a bid to tap the country's vast market of 20 million learners and boost shareholder returns.\nThe Nairobi-Securities Exchange-listed firm is on an aggressive expansion drive into francophone countries which it considers greatly untapped.\nThe firm is among the nine publishers that won the Kenya Institute of Curriculum Development (KICD) tender to supply Grade seven textbooks under the Competence-Based Curriculum (CBC). It will publish French and computer books that have been listed as optional subjects under the CBC.\nLearning in Kenya schools was interrupted for nine months to January 2021 following the outbreak of Covid-19 hitting hard the publisher’s earnings. Learning in Uganda resumed in January 2022 -nearly two years after schools closed following the pandemic.\n“We have since enhanced our market penetration activities resulting in the highest revenue level in our history of operating in Uganda,” said Longhorn. The uninterrupted learning since schools reopened has enabled the firm to recover sales and resume profitability.\nLonghorn’s operating expenses increased by 45 percent to Sh443.6 million, mainly attributed to the reinstatement of staff benefits that had been cut as a response to the pandemic’s economic crisis.\nSelling and distribution costs also rose during the year due to increased sales but at a relatively slower pace compared to revenue, resulting in improved margins.\nThe company is banking on its digital business as a key driver of its performance going forward with plans of unveiling a number of products under the segment.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/longhorn-profit-grows-434pc-on-higher-sales-3932892"}
{"doc_id": "017380aa0fae8fa6357d8f60dadd7bd7", "text": "World Diabetes Day\n23 Nov\nDiabetes Association of Nigeria, Ondo State chapter, has raised concerns over the large number of Nigerians living with undiagnosed diabetes, stressing the potential for severe complications if left unattended. The chairman of the association in the state, Dr. Adenike Enikuomehin, issued the warning during a sensitization visit to Aquinas College, Akure, the state capital, on…\n15 Nov\nEight in 10 people living with diabetes (80 per cent) in Nigeria only know, after developing complications associated with the condition. Moreover, almost all (94 per cent) of those surveyed in the country have experienced one or more complications...\nLatest\n1 hour ago\nTerrorism in 2023 has remained a global threat as a record of 8,352 deaths representing 22 per cent increase from the previous year remains the highest, since 2017.\n1 hour ago\n• NEMA denies attack on Abuja facility • Police arrest 15 suspected warehouse vandals in FCT • Shettima: Protest against hardship in a responsible manner The reality of Nigeria’s grim food insecurity exacerbated by rising food cost became apparent yesterday when hoodlums in Abuja went on a looting spree, carting away food items from public and private facilities.…\n1 hour ago\nFoundation member of All Progressives Congress(APC), Osita Okechukwu,has saidthe 36 state governors should be held responsible for the setback recorded in restructuring the country.\n1 hour ago\nHouse of Representatives Committee on Public Accounts has asked private airlines to explain how they expended N4 billion they collected from the Federal Government as COVID-19 intervention funds or refund the money to the government treasury.\n2 hours ago\nNigeria Union of Journalists has conferred its Internal Security Meritorious Award on the Chairman of Tantita Security Services, Government Ekpemupolo, alias Tompolo.\n2 hours ago\nNo fewer than 600 African and Australian governments, private sector executives, investors, multilateral stakeholders, business leaders, innovators and manufacturers are expected to gather in Melbourne, Australia from May 12 to 14, 2024 for this year’s Australia-Africa Business Summit.\n2 hours ago\nWith the increase in value for personal development, motivational experts have said self-awareness and mindset are crucial to achieving individual growth.\n2 hours ago\nNigeria Navy Dockyard Limited and its Benin Republic counterpart weekend at Yaoundé signed an agreement that would empower the Naval Dockyard to carry out repair works on six of its non-functional platforms.\n2 hours ago\nNational Institute of Credit Administration (NICA) has promised to boost awareness on consumer credit services, urging the Federal Government to enforce appropriate laws that will instill decency, discipline and honesty in Nigeria’s credit system", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/world-diabetes-day/"}
{"doc_id": "b45c1622cf12ef0ea886e013c4011d5c", "text": "Tourism has continued to recover at a strong pace as destinations across the world welcomed almost three times as many international arrivals in the first quarter of 2022 as in the same period of 2021, with Europe leading the sector’s rebound.\nAccording to the latest UNWTO World Tourism Barometer, international tourism saw a 182 percent year-on-year increase in January-March 2022, with destinations worldwide welcoming an estimated 117 million international arrivals compared to 41 million in Q1 2021. Of the extra 76 million international arrivals for the first three months, about 47 million were recorded in March, showing that the recovery is gathering pace.\nHowever, Europe and Americas are leading the recovery.\nUNWTO data shows that during the first quarter of 2022, Europe welcomed almost four times as many international arrivals (+280 percent) as in Q1 of 2021, with results driven by strong intra-regional demand. In the Americas arrivals more than doubled (+117 percent) in the same three months. But, arrivals in Europe and the Americas were still 43 percent and 46 percent below 2019 levels respectively.\nThe Middle East (+132 percent) and Africa (+96 percent) also saw strong growth in Q1 2022 compared to 2021, but arrivals remained 59 percent and 61 percent below 2019 levels respectively. Asia and the Pacific recorded a 64% increase over 2021 but again, levels were 93 percent below 2019 numbers as several destinations remained closed to non-essential travel.\nBy subregion, the Caribbean and Southern Mediterranean Europe continue to show the fastest rates of recovery. In both, arrivals recovered to nearly 75 percent of 2019 levels, with some destinations reaching or exceeding pre-pandemic levels.\nWith all the positive turns, destinations opening up faster.\nAlthough international tourism remains 61 percent below 2019 levels, the gradual recovery is expected to continue throughout 2022, as more destinations ease or lift travel restrictions and pent-up demand is unleashed. As of 2 June 2, 2022, 45 destinations (of which 31 are in Europe) had no COVID-19 related restrictions in place. In Asia, an increasing number of destinations have started to ease those restrictions.\nRead also: Nigeria to host global conference on tourism, creative industry November\nDespite these positive prospects, a challenging economic environment coupled with the military offensive of the Russian Federation in Ukraine pose a downside risk to the ongoing recovery of international tourism. The Russian offensive on Ukraine seems to have had a limited direct impact on overall results so far, although it is disrupting travel in Eastern Europe. However, the conflict is having major economic repercussions globally, exacerbating already high oil prices and overall inflation and disrupting international supply chains, which results in higher transport and accommodation costs for the tourism sector.\nThe UNWTO urges destinations to export revenues for faster recovery as spending rises.\nThe latest issue of the UNWTO Tourism Barometer also shows that US$ 1 billion were lost in export revenues from international tourism in 2021, adding to the $1 billion lost in the first year of the pandemic. Total export revenues from tourism (including passenger transport receipts) reached an estimated US$ 713 billion in 2021, a 4 percent increase in real terms from 2020 but still 61 percent below 2019 levels. International tourism receipts reached US$ 602 billion, also 4 percent higher in real terms than in 2020. Europe and the Middle East recorded the best results, with earnings climbing to about 50 percent of pre- pandemic levels in both regions.\nHowever, the amount being spent per trip is on the rise – from an average US$ 1,000 in 2019 to US$ 1,400 in 2021.\nAs well, there is hope for stronger than expected recovery ahead as the latest UNWTO Confidence Index showed a marked uptick. For the first time since the start of the pandemic, the index returned to levels of 2019, reflecting rising optimism among tourism experts worldwide, building on strong pent-up demand, in particular intra-European travel and US travel to Europe.\nAccording to the latest UNWTO Panel of Experts survey, an overwhelming majority of tourism professionals (83 percent) see better prospects for 2022 compared to 2021, as long as the virus is contained and destinations continue to ease or lift travel restrictions. However, the ongoing closure of some major outbound markets, mostly in Asia and the Pacific, as well as the uncertainty derived from the Russia-Ukraine conflict, could delay the effective recovery of international tourism.\nA higher number of experts (48 percent) now see a potential return of international arrivals to 2019 levels in 2023 (from 32 percent in the January survey), while the percentage indicating this could happen in 2024 or later (44 percent) has diminished compared to the January survey (64 percent). Meanwhile by end April, international air capacity across the Americas, Africa, Europe, North Atlantic and the Middle East has reached or is close to 80% of pre-crisis levels and demand is following.\nUNWTO has revised its outlook for 2022 due to stronger-than-expected results in the first quarter of 2022, a significant increase in flight reservations, and prospects from the UNWTO Confidence Index. International tourist arrivals are now expected to reach 55 percent to 70 percent of 2019 levels in 2022, depending on several circumstances including the rate at which destinations continue to lift travel restrictions, the evolution of the war in Ukraine, possible new outbreaks of coronavirus and global economic conditions, particularly inflation and energy prices.\nWorld Tourism Organization (UNWTO), is a specialized agency of the United Nations.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/arts-and-life/article/global-tourism-recovery-gains-momentum-as-restrictions-ease-confidence-returns/"}
{"doc_id": "701c459d33f61d061f08ca1d5a83f437", "text": "Advertisement\nThe shock announcement that revealed the true state of pockets\nEarlier this week, my historical novella, New Currency, described as “a compelling and enjoyable short novel”, was launched in Accra, at the Ghana International Press Centre.\nThe launch was organised in collaboration with the publishing house, Smartline Publishing of Accra, on Wednesday, October 12.\nNew Currency is a story I wrote in 1979, about the impact of the traumatic 1979 demonetisation on one woman, Ama Dufie, and how it changed her life.\nTo refresh memories, the following official explanation gives the background to the demonetisation, which took place from March 13 to 26, 1979.\n“Currency Demonetisation\n“On 9th March, 1979, the Government announced the introduction of new cedi notes to replace the old ones at a discount of 30% for amounts up to ¢5,000 and 50% for amounts in excess of ¢5,000. The old cedis were therefore, demonetised. New denominations issued included ¢1, ¢2, ¢5, ¢10, ¢20 and ¢50.”\nIn response to that shock development, I wrote a tongue-in-cheek article, what may be considered a companion piece to the novella. Taking a walk down memory lane, it is reprinted below:\nTHE 1979 ARTICLE\n“Truth will out” goes an old saying. Indeed, truth IS out: The truth of the true state of people’s pockets, wallets, pillows, purses, handkerchiefs, scarves, attics, waist bands, brief-cases, socks, mattresses, trunks and cloth corners.\nMore important, now we all know who our true friends are. People who have long masqueraded as our friends of a feather have been found out. Traitors! People who have all along spoken as poor people; people who identified themselves with us as belonging to the ‘nnte-yie’ class; people who have joined us in hearty condemnation of the ‘ate-yies’, and shared our day dreams of future riches, have all been unmasked by General Akuffo as hypocrites.\nThe cedi-changing announcement of March 9 (1979), has helped us discover that our so-called pals have not simply money, but CASH.\nTo rub salt in our wounds, they have the audacity to ask our help not only in counting their ‘reds’, but also to take them to the bank and change them! Those who used to do their counting at midnight behind giant bolts and family-size padlocks, now invite even co-tenants to help them assess their cash.\nThose who used to hide their hands under office desks to check their pay packets now spread the ‘reds’ (notes) carelessly on table tops. Those who used to secret them in their socks (“That way you’ll have to knock me out first before you reach my money,” explained an experienced Accra-dweller. “The pick-pockets haven’t yet accomplished picking socks.”) now stuff them into their pockets.\nThe repercussions in homes and lives will last long after the March 26 deadline. How can the relationship ever be the same again between a woman who it suddenly turns out has ȼ50,000 and an unsuspecting husband who thought his wife was just a petty trader, and who has been buying everything for the household, from salt to eye-brow pencil?\nIf a husband who has been moaning about poverty all these years and who has always given his wife the impression that he has just spent his last cedi, and who said he couldn’t afford a cloth for her at\nChristmas, today confesses that he has ȼ30,000 right there in the house, how do you suppose the wife will react?\nIf the currency move has taken us unawares, our friends and relatives have given us even bigger surprises. Who could have guessed that so many people had ‘banks’ at home? The question is, why do people not bank their money?\nApart from the ‘kalabule’ reasons, there is one genuine reason why some people like to have cash with them at all times: the utter uselessness of cheques in Ghana.\nOnly one or two of the state and private enterprises will accept cheques, even company ones, in spite of the fact that issuing a ‘dud’ cheque is a criminal offence. A businessman told me about being asked to pay for goods he had bought from a company in cash – all ȼ132,000! Even the Electoral Commissioner refused a cheque for the registration of a political party (Miss Asamany’s Mother Ghana Solidarity Party).\nDoes the banking system not have measures against bad cheques? Why should the practices of a few dishonest people so inconvenience the thousands of personal cheque-book holders? What good is my cheque-book if I can issue cheques only to myself? What kind of a system is this, where they will accept your cheque only if you are known to the managing director?\nIf I didn’t know better, I would say that the exercise is purely to take the money from one group of people and give it to another.\nSome cashiers of some of the banks and, sadly, even some managers, are allegedly doing brisk business through the back door, like charging ȼ500 on every ȼ5,000 changed. Then there are those people who have suddenly acquired a profession, money-changing; taking contracts to change money for a fee. Our ability to manoeuvre every situation to advantage is really great.\nSurely, we must all be congratulated, for we have surpassed ourselves. We have graduated from queuing to buy toilet roll to queueing in to buy money.\nPS – For those who would like to, but don’t have the qualification to put some letters after their name, all Ghanaians are now entitled to add these very distinguished letters after their name: ‘Q.S.’ (Meaning? Queue Specialist. (Column of Friday, March 23, 1979, ‘The truth is out!’)\nAs stated in the novella, I have dedicated it “to the adults who lived through the turbulence of 1979 Ghana, as a necessary reminder; and to the youth of today, who know little or nothing about those harrowing times. Hopefully, it will provide them with some insight into this period in the country’s history.”\n(", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.graphic.com.gh/features/native-daughter/the-shock-announcement-that-revealed-the-true-state-of-pockets.html"}
{"doc_id": "2306edf2ed32932116ccc4c585e26291", "text": "EcoCash suspends 4 000 agents\nIshemunyoro Chingwere Business Reporter\nThe country’s largest payment platform, EcoCash, has suspended over 4 000 of its agents on allegations of participating in the now rampant trend of charging excessive premiums for customers intending to cash on their mobile money.\nEcoCash, one of Econet’s biggest business units, moves billions of transactions annually through its over 50 000 agents dotted throughout the country.\nThe announcement came barely a day after The Herald published a story in which ordinary citizens, and economic experts expressed disdain over the cost of cashing out on plastic money that has effectively eroded people’s earnings.\nA survey carried out by this paper shows that EcoCash agents are charging a premium of up to 55 percent to customers in need of cash that is mainly in coins.\nCash barons\nBut in a statement released yesterday, the mobile payment solution service provider said it doesn’t condone such practice that has seen the birth of cash barons who are profiteering from their access to cash.\n“EcoCash advises all its agents that it does not condone any illicit activities by agents,” said EcoCash in a statement.\n“We have consistently maintained this position in our various communication directly to all agents through the various forums we hold across the country.\n“Any agent charging above the authorised commission levels will be charged accordingly.\n“We have so far suspended over 4 000 agents and will not hesitate to act accordingly on any reported cases of charging above authorised commission levels outside the EcoCash platform,” reads the statement.\nThe move by EcoCash to rid itself of unscrupulous agents also comes in light of the Zimbabwe Anti-Corruption Commission (ZACC) having started investigating EcoCash agents partaking in the illicit practice.\nEarlier, the National Business Council of Zimbabwe (NBCZ) president Mr Langton Mabhanga, had told The Herald that there was need for monetary authorities to impose punitive measures on errant EcoCash agents.\nMr Mabhanga had also said it was not his view that the solution to the problem was in increasing cash in circulation.\n“These premiums on cash are fuelling inflation and causing untold suffering to ordinary persons.\nPlastic money\n“There is need to protect ordinary workers who have watched helplessly as their salaries are being eroded,” said Mr Mabhanga.\n“In Rwanda, we have a replica of EcoCash and you will notice that majority of transactions are through plastic money.\n“What is lacking is supervision instruments that in my view have failed.\n“There is need for an audit of these EcoCash agencies,” he said.\nThe illicit practice by the country’s largest payment platform has become the biggest threat to Government’s push for people to migrate from using hard cash to electronic payment systems as the later has been rendered too expensive.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/ecocash-suspends-4-000-agents/"}
{"doc_id": "fd2d9b49c66ff4b58c29f95d9d3c16ac", "text": "The Donen Commission of Inquiry into allegations of illicit activities in the United Nations’ Iraq oil for food programme found that no one whose name featured in their investigation had contravened any South African law.\n“It has to be stressed that the Donen Report does not make any definitive final findings in respect of the conduct of the named individuals in so far as the impact of such conduct on UN resolutions and policy is concerned,” presidential spokesperson Mac Maharaj said on Wednesday.\nPresident Jacob Zuma released the report earlier in the day.\nThe Mail & Guardian was the first to reveal connected trader Sandi Majali’s visits to Iraq to solicit allocations under the oil for food programme, administered by the UN as a limited exception to an international embargo.\nMajali was accompanied more than once by senior party and government officials, including Deputy President Kgalema Motlanthe, who was ANC secretary general at the time.\nThe commission was established on February 17 2006 by then president Thabo Mbeki to investigate alleged illicit activities of certain South African companies or individuals relating to the UN programme.\nMaharaj said Mbeki had refused the commission’s last request for extra time and the commission consequently handed in its final report in September 2006.\nInterim reports had been handed in May and June that year.\n“Former president Mbeki decided against releasing the report pending the advice from the chief state law adviser and due to its incompleteness, among other reasons.”\nMaharaj said it was important to note that all those caught up in the subject matter of the inquiry were not the subjects of the commission’s investigation.\nThree-part report\nThey also did not have an opportunity to present their version of events fully.\n“In addition, much of the commission’s collection of information did not involve evidence on oath with the test of cross-examination being applied.”\nReleased with the three-part report was a letter written by the chairperson advocate Michael Donen SC, to the then director general in the presidency, dated August 28 2009.\n“He wrote it because he found that the leaked versions of the commission report first published in the media on August 23 2009, had created misconceptions about the true content of the commission reports,” Maharaj said.\n“These misconceptions severely impugned the character and dignity of several persons.”\nThe commission found that no one whose name featured in their investigation had contravened any South African law.\nDonen’s letter explicitly stated that the three persons “named” by the media — Motlanthe, Human Settlements Minister Tokyo Sexwale, and the director general of the minerals and energy department Sandile Nogxina — were not the subjects of the commission’s investigation.\nMotlanthe had intervened with the authorities in Iraq to ensure that they adhered to the decisions and rules determined by the UN programme.\nDonen also stated that Nogxina “made a valuable contribution to the commission’s work”, that “no blame could be attached to the DG”, and that “his personal involvement as a participant in illicit activities was so remote as to not even warrant any consideration of his culpability or otherwise”.\nRegarding Sexwale, the commission “exonerated Mr Sexwale from liability as a participant in illicit activities”.\n“The comments made in the report are not to be elevated to findings of fact. These were interim and untried comments as the report recognises. They must be treated as such,” Maharaj said.\nThe September 2006 report proposed actions or steps to be taken to prevent companies or persons falling under South African jurisdiction from becoming involved in future illegal or irregular international activities, including sanctions-busting in respect of internationally imposed sanctions.\nZuma had asked Justice and Constitutional Development Minister Jeff Radebe to review the documentation and consider passing the relevant legislation and/or amend existing legislation to rectify any shortcomings in domestic law, Maharaj said.\nUnanswered questions\nQuestions remain about Motlanthe’s proximity to Majali’s negotiations with Iraqi officials when they demanded a multimillion-rand kickback, which was subsequently paid in part. Also apparently aware of Iraq’s demand for kickbacks was Phumzile Mlambo-Ngcuka, then minerals and energy minister and later deputy president.\nIraq levied the kickbacks in contravention of the UN embargo because all proceeds of oil sales should have been paid into a trust account that would be released for humanitarian purchases only.\nTo create room for these “surcharges”, as Iraq called them, the regime sold its oil at a discount. The discounts were also exchanged for diplomatic favours — allocations were made to politicians and their cronies.\nGood company\nMajali, whose death last December in a Sandton hotel room remains a mystery, first sought oil allocations from Iraq in 2000 using a company called Montega Trading. One of his partners at the time was Iraqi-American Shakir al-Khafaji, who had access to Saddam Hussein’s influential deputy prime minister, Tariq Aziz.\nThe UN’s independent inquiry committee reported in 2005 that Aziz had “specifically asked Mr al-Khafaji to help strengthen the ties between Iraq and South Africa”.\nMajali and al-Khafaji — accompanied, as the M&G has revealed, by Motlanthe, then-ANC treasurer-general Mendi Msimang and then-ANC presidency head Smuts Ngonyama — travelled to Baghdad in December 2000.\n“During their meetings in Iraq, Mr Majali described himself as an adviser to both the ANC and President Mbeki. After several days of meetings, Mr Majali was allocated two million barrels of oil,” the committee noted.\nMajali and his partners in Montega traded the two million barrels in early 2001, but failed to pay the $464632 (R3.75-million now) “surcharge” demanded of them. This put Majali at a disadvantage when he sought further allocations.\nTry again\nBut in September 2001, Majali was in Baghdad again, this time accompanied by a delegation of senior government officials. Party and state lines were blurred as he and the officials variously lobbied to improve relations between the ANC and the Ba’ath Party and get oil allocations for the South African state — but through Majali’s company, Imvume, which was then new.\nThe M&G has published correspondence, including a letter Motlanthe addressed to the Iraqis at the time, saying Majali had the ANC’s “full approval and blessing”. Also published were Imvume proposals indicating the ANC would benefit should Majali get further allocations.\nThe delegation accompanying Majali included Mlambo-Ngcuka’s most senior officials at the department and ministry of minerals and energy. Their travel motivation, which she personally signed, recommended “that the right political atmosphere between Iraq and South Africa be created in order to win more business” under oil for food.\nThe motivation also revealed knowledge of the “surcharge imposed by the Iraqis on their oil allocation [which] makes it difficult for South African companies, especially black economic empowerment groups, to break into the market. This is one of the issues that needs to be addressed by both parties.”\nIn what was clearly no coincidence, the Strategic Fuel Fund, the state body that maintains South Africa’s strategic oil reserves, soon issued a tender for the supply of Iraqi crude worth R1-billion.\nImvume controversially won the tender — but when Majali needed the Iraqis to keep their end of the bargain so he could deliver, Iraq baulked because the $464000 kickback demanded a year earlier remained outstanding.\nMajali again met Iraqi officials in Baghdad on March 6 2002. At this meeting, it appears from a letter Majali sent to the Iraqi oil minister that June, he promised to pay the outstanding kickback in two tranches.\nMotlanthe letter missing\nThe UN committee’s report recorded that a day after Majali’s undertaking in Baghdad, a sealed letter from Motlanthe was forwarded to Aziz by the Iraqi ambassador to South Africa.\nThe committee was unable to find a copy of Motlanthe’s letter, but noted that approval for Majali’s request for more oil was annotated by hand on the ambassador’s covering letter. The approval came from both Aziz and Iraq’s vice-president.\nWhen there were further delays, Majali met with Aziz personally in Baghdad on May 10 2002. According to Majali’s June letter to the oil minister, Motlanthe was also present.\nWas the kickback discussed at the meeting, and was Motlanthe present? Majali’s June letter was a request to reschedule the kickback repayments, and in that context “referred” to the meeting it said included Motlanthe.\nThere is no further record of what transpired at the meeting and Majali, although he subsequently confirmed that Motlanthe was in Baghdad at the time, denied he was present.\nAccording to the UN committee’s report, Iraqi Oil Ministry records show that on May 20 — 10 days after the Baghdad meeting — an “advance” kickback payment of $60000 was deposited at the Central Bank of Iraq. The payment was deposited on behalf of Imvume but it was unclear by whom it was done.\nSexwale’s ‘no’\nAlso implicated by the UN report was Mocoh Services South Africa, a joint venture including Sexwale and United Kingdom oil trader Michael Hacking. The report listed kickback payments totaling $574699 (R4.65-million now) made by Mocoh.\nThe Sunday Times, after a partial leak of Donen’s material in 2009, reported that Donen had wanted an extension of his terms of reference so he could subpoena more information from Majali and Motlanthe.\nThe Sunday Times also reported that Sexwale had told Donen in a statement that “although he had been made aware by his co-directors in Mocoh that the Iraqis demanded surcharges, he had made it clear that he was not at any stage prepared to sanction the payment of surcharges”. Donen, apparently, was not satisfied with the response. — Additional reporting by Sapa\nFor more news on the Oilgate saga view our special report", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/article/2011-12-07-donen-report-leaves-oilgate-players-in-the-clear/"}
{"doc_id": "fc103dbf97f0b0ddc65045a138cfde75", "text": "South Africa’s financial system is being overhauled, with parliament in the process of introducing various amendments to critical business legislation.\nThe new bills, recently approved by Cabinet, include provisions which focus on strengthening the methods of mitigating financial crime, altering workplace transformation laws and making it easier to do business – to name a few.\nThe government has been working in a flurry to ensure that a deadline set by the international watchdog, the Financial Action Task Force (FATF), is met in order to avoid a possible greylisting that might make doing business more challenging.\nThe FATF is an international body for setting standards and promoting anti-money laundering and counter-terrorism financing that has made recommendations to South Africa in terms of what has to change. It found that the county’s financial legislation had gaps that allowed for money laundering and other financial crimes to occur.\nSouth Africa has until the end of October 2022 to prove to the FATF that it has policies to meet the recommendations.\nThe Parliamentary Monitoring Group (PMG) lists over 53 bills at various stages of the parliamentary process of passing through either the National Assembly or the Nationals Council of Provinces and finally assented to by the President.\nBelow are some of the key laws currently going through the legislative process that will be taken into consideration or passed in the upcoming months.\nIn light of a possible greylisting, finance minister Enoch Godongwana recently tabled the Anti-Money Laundering and Combating Terrorism Financing Amendment Bill.\nOnce in law, according to the National Treasury, it will align the country with some of the recommendations made by the FATF and further improve its resilience to financial crime and corruption.\nThis bill will amend the following other pieces of legislation that deal with specific sectors:\n- Trust Property Control Act;\n- Nonprofit Organisations Act;\n- Financial Intelligence Centre Act;\n- Companies Act, and;\n- Financial Sector Regulation Act.\nThis amendment bill expands on the General Laws Amendment bill and aims to address shortcomings in at least 14 of the 20 suggestions the FATF gave, including a proper improvement of the authority and practices of regulatory authorities.\nThe purpose of this money bill is to enable the implementation of new financial industry charges. This bill requires banks and other government-regulated financial services companies, such as life insurance entities, to pay annual levy fees.\nThe levy is one of the supervisory mechanisms the Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) use to monitor and preserve the nation’s financial stability.\nDepending on the type of supervised entity, each payment made by that entity can be as much as R45,000,000 for large banks or as little as R1,000 for smaller banks.\nThis private members bill was introduced to specifically deal with Regulatory Impact Assessments (RIA) and the cost of new regulations on the economy.\nThe bill will introduce measures to look into the financial implications of new legislation and improve the effectiveness and efficiency of government interventions.\nIt said that conducting an evaluation of regulatory measures allows for increased competitiveness by reducing regulatory burdens, increased accountability for decision-makers and more transparency when developing regulatory measures – among others.\nThe amendments under this bill will give the employment and labour minister power to regulate sector-specific employment equity targets and regulate criteria regarding the issuing of compliance certificates.\nThe deputy director-general of Labour Policy and Industrial Relations, Thembinkosi Mkalipi, said that even businesses that do not necessarily deal directly with the state would need to comply with the laws.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/energy/625017/5-new-laws-set-to-change-business-in-south-africa-what-you-need-to-know/"}
{"doc_id": "733bda6b7f0f80dfb880a6fecea1e45c", "text": "Nigerians could be forgiven for believing (erroneously) that ours is an incredibly complex country and that governing and taking it to prosperity is nothing short of rocket science.\nNothing could be further from the truth. I make these admittedly bold assertions based on a combination of personal experience in international and Nigerian institutions, empirically researched and established facts, and some insight into the art and science of strategy.\nNote that I make reference to “strategic thinking” rather than the more popular phrase “strategic planning”. It is no accident. Why? Because strategy, a constant in war and peace, and in the successful governance and economic management of nations, businesses and even personal affairs, is first and foremost about THINKING before it is about plans. Those who “plan” without thinking deeply will either fail or not succeed to the level of those who think seriously. Thought creates visions, which create possibilities, which in turn create goals. On the basis of these three things, a Big Hairy Audacious Goal (BHAG) can take shape. Plans are then made to achieve this goal, including plans to execute the plan. This should be backed up by the discipline of actual execution of strategy, including process integrity and goal achievement monitoring and measurement. This is how nations, corporations and individuals achieve genuine, sustainable success. The success and prosperity of nations are never accidents.\nLet us bring the matter home and down to earth. Nigeria is at an important juncture in its evolution. President Muhammadu Buhari has a historic opportunity. But one senses a tension between two competing impulses in Nigeria today as we wait for PMB to fully unfold his agenda. That tension is between the past, the present and the future, but more between the first and the latter, with the present as a bridge between the two. It is not by accident that, in electing in a keenly contested vote a former military ruler who held office three decades ago, Nigeria had to return to its past in order to forge its future.\nBuhari has zeroed in (so far) on combating corruption and recovering stolen funds, on the one hand, and preparing to give Boko Haram a bloody nose, on the other. There is no contention about the importance of security. Nor is there, even, any contention about the importance of combating corruption. But there is some dissonance on the matter of the balance between focusing heavily on probing and punishing past corruption and the task of constructing a future that can take us from being a poor country to a truly wealthy one, from a physical country to a real nation with a common goal and destiny. What is the balance between facing the past and building the future?\nSome may view this as a false dichotomy, since in fact there is a link between corruption in Nigeria and the country’s poor economic performance, and the amounts of funds believed to have been stolen over the decades certainly have significance in economic terms beyond morality. But it is a valid question, for the reasons that follow. First of all, accountability, especially for egregious acts of corruption, is necessary as a deterrent against impunity. But beyond this, the truth is that corruption, in the case of Nigeria and horrendous as it is or has been, is only a symptom of two underlying problems. The first is the absence of a real worldview, in which a value system is proactively embedded, and which keeps corruption in check lest it prevents or undermines economic and social progress. The second is the reality that our country’s constitutional and political structure, which birthed the deformed federalism we have today, has blocked both Nigeria’s economic transformation and the emergence of a true national unity in diversity. That unity can be better attained through a manufacture of consent that breeds a sense of justice done and seen to be done. A country in which these two fundamental determinants of societal destiny are suppressed, faces a serious obstacle. That obstacle is more foundational and important than whatever symptoms the “original sin” breeds. This is precisely why politics in Nigeria are not a competition of ideas. Rather, it is a bitterly divisive struggle for power by ethnic nationalities, for the purpose not of a broad-based national progress but that of parochial patronage and client networks. This is the foundation of massive corruption in Nigeria.\nFor Nigeria to achieve true economic power and fulfill its destiny, we must re-imagine, redesign and reconstruct our country. PMB has enormous political capital, far more than perhaps any other politician in Nigeria that can be deployed to this strategic imperative. Strategic thinking about Nigeria’s future requires, beyond the humdrum yo-yo of daily governance, that we address the following questions. Is the Vision 2020 a real BHAG, and if so, where are we with it? What type of free market economy is best for Nigeria, and how can we move from mere economic growth to economic development? The latter two are not the same thing. Between neo liberalism and a developmental state, which approach will lead us there? How can industrial policy help Nigeria achieve economic complexity and how can we build the “productive knowledge” that is a sine qua non for complexity? How can the combination of a real industrial manufacturing economy, which is what determines the real value of a country’s exchange rate, combine with fiscal policy to incentivize a monetary policy that creates access to real capital at affordable prices? In other words, how can we put capital into our capitalism? At the political level, what type of federalism is best for Nigeria? How will a re-engineered division of powers and responsibilities between federating units and the central government, revenue allocation formula, and derivation principles (“resource control”) of oil and solid minerals bring about a sense of equity and act as incentive to unleash massive economic production and hence transformation? These are the real questions that will determine our future.\nTo demonstrate why it is important to think strategically about Nigeria’s future beyond the (necessary) fight against corruption, let us look at Rising Asia. In China, Deng Xiaoping began a period of stunning economic transformation in the late 1970s which fundamentally altered China’s communist state to a capitalist one, unleashing the latent productivity of over one billion Chinese. This was a fundamental redesign of the basics on which modern China was established in 1949 by Mao Zedung after a debilitating civil war. Today, China is the world’s second largest economy, set to overtake the United States as the largest in the next two decades. Corruption has risen, along with China’s meteoric ascent, but President Xi Jin Ping is fighting back, with success. But wide scale corruption has not stopped China’s rise, even as it is rightly considered a strategic threat. Why? Because 400 million Chinese have been lifted out of poverty in the past three decades.\nMalaysia, with 27 million people is a rising emerging market that, in the early 1960s was well behind Nigeria in terms of economic prospects. Today it is a newly industrialized country with a GDP per capita of $11,000 (compared with Nigeria’s $3,000), foreign reserves of $100 billion, and a sovereign wealth fund with $41 billion in assets. In 1991, then Malaysian Prime Minister Mahathir bin Mohammed set a Vision 2020 BHAG in which his country would achieve the status of a self-sufficient industrialized nation by that date. That target has since been met. Manufacturing accounts for 40 per cent of GDP, and Malaysia is the 14h most competitive economy in the world, ahead of Australia, UK, South Korea and Japan in competitiveness. Meanwhile, what about corruption in Malaysia? It hasn’t disappeared, but strong institutions confront the menace. As I write, a special task force is investigating allegations that Malaysia’s current Prime Minister Najib Razak received $700 million from a state investment fund into his personal bank account.\nThe point from these examples is that facing forward and building our future successfully will take more effort than facing the past. Justice is an irreducible but complex phenomenon. Once it deals with certain categories of past crimes (as opposed to present crimes) such as war crimes or governmental corruption, it all becomes political and prone (rightly or wrongly) to perceptions of selectivity.\nThe pursuit of accountability for past corruption in Nigeria should be carefully targeted and controlled, building anti-corruption systems and avoiding vendettas. It should be balanced with the need to avoid sapping the energy and focus required to build the future, breeding resentment, and interfering with the even more fundamental futuristic task of manufacturing consent. That is why the Japanese Emperor Hirohito was ultimately not prosecuted in the Tokyo war crimes trials after World War II, because the conquering Allied Powers needed a bridge between Japan’s past as an enemy Axis Power and its future as a new Western ally. As the American scholar-diplomat and statesman, Henry Kissinger so pithily put it: “It is the temptation of war to punish; it is the task of policy to construct. Power can sit in judgment, but statesmanship must look to the future.”\nKingsley Moghalu\nMoghalu, former deputy governor of the Central Bank of Nigeria, is Professor of Practice in International Business and Public Policy at Tufts University’s Fletcher School of Law and Diplomacy in Massachusetts, USA and the chairman of Sogato Strategies LLC.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/strategic-thinking-about-nigerias-future/"}
{"doc_id": "6c647304fcf9802ca950a578224bbdbd", "text": "Businesses in South Africa are struggling amidst a disastrous economy, with the number of liquidations continuing to tick up in 2023.\nAccording to Stats SA, 151 businesses were liquidated in May, with 134 volunteering to do so and 17 on a compulsory basis.\nThis takes the total number of liquidations to 674, adding to the 112 businesses that were liquidated in April.\nLiquidations are significantly higher than in April 2023, but year on year the rate is lower at -20%. On year-to-date measure, total liquidations are also down from 2022 (-14.5%) as well as over a three-month rolling period (-15%).\nAccording to the data, the worst hit industry was trade, catering and accommodation, with 36 liquidations.\nThis was followed closely by the financing, insurance, real estate and business services sector with 33 – a decline from 45 in April.\nHowever, the unclassified industry category saw the largest number of liquidations, with 59.\nLike April, the electricity, gas and water and the agriculture, hunting and forestry industries saw no liquidations in May.\nIn the midst of South Africa’s unemployment crisis, Stephen de Blanche, Chief Revenue Officer for TransUnion Africa, said that small businesses are crucial for creating jobs in the country.\nHowever, de Blanche noted that small businesses face many headwinds limiting their ability to grow.\nResearch by the University of the Western Cape said that only 1% of micro-enterprises that start with fewer than five employees grow to employ ten or more people. Moreover, approximately 70%-80% of small businesses fail within five years.\n“There are many reasons for this; Covid-19, spiralling inflation and interest rates, and soaring fuel prices are creating a perfect storm of chaos. A storm that’s making it really hard for existing small businesses to survive and new ones to start up,” de Blanche said.\n“The other challenge is that many small business owners lack the core skills you need to run a successful business. This includes basic financial acumen, like how to manage cash flow and debt, along with business and project management skills that are critical in helping small businesses operate efficiently.”\nHe said that to improve the current situation, entrepreneurial skills are clearly needed, with large corporate players key to helping small businesses in South Africa.\nHowever, many small businesses lack a credit history, making them practically invisible to the economic mainstream.\nDe Blanche said that there are ways that large players can help their smaller counterparts.\n“The answer may lie in using alternative data to qualify more SMMEs. In this space, business owners are inextricably linked to their businesses. If you lend money to a business, you effectively lend money to the person. So, by evaluating their personal risks, you may be able to get a picture of their ability to repay loans,” he said.\n“Beyond that, corporates have a major role to play in getting more SMMEs to become accredited vendors. Apart from giving them the skills and support they need to do the onboarding needed to become a supplier, they can ensure those SMMEs are paid as quickly as possible.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/699059/trouble-for-businesses-in-south-africa-as-liquidations-climb/"}
{"doc_id": "865d2aa6b55aa446160a90b6769b5379", "text": "economic woes\n30 Sep\nAs the country marks 63 years of self-governance after colonial rule, President Bola Tinubu has called for a low-key celebration instead of the usual festivities. But as DW's Flourish Ubanyi reports, many Nigerians think there's not much to celebrate anyway.\n24 Aug 2023\nAs Zimbabweans head to the polls this Wednesday, we take a look at the dire economic straits the country finds itself in. Inflation has gone from the single digits in 2017 to 77 percent this month, the currency has crashed against the US dollar, and high unemployment has led many to emigrate. While incumbent President Emmerson Mnangagwa has played up improved infrastructure on the campaign trail, his opponent Nelson Chamisa detailed a plan that he says will build Zimbabwe into a $100 billion economy.\n1 Jun 2023\nThe Turkish lira has plumbed new depths after the reelection of President Recep Tayyip Erdogan, and inflation remains stubbornly high. Will the Turkish ruler change his unorthodox economic policies now?", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/economic-woes/"}
{"doc_id": "6d19db2171b3c747247399b1a8c11cf2", "text": "Bread flour price up 6,25pc\nMichael Tome Business Reporter\nGRAIN Millers Association of Zimbabwe (GMAZ) says the price of bread flour went up by 6,25 percent to $119 000 from $112 000 tonne with effect from 9 January 2022.\nThe successful 2021 command winter wheat programme has, however, helped subdue the impact of imported costs.\nIn a statement, GMAZ said the increase in bread flour has been necessitated by a number of factors which encompass the upward movement of the exchange rate on the Reserve Bank of Zimbabwe’s (RBZ) auction.\nAccording to GMAZ surge in the use of substitute sources of power due to intermittent electricity supply by ZESA has led millers to rely on diesel-powered generators, thereby incurring equipment maintenance and other running costs.\nIncreases in the price of blending wheat, fuel, and labour costs have also been cited as some of the major causes of the rise in bread flour.\nGMAZ highlighted that it was battling to contain local bread flour prices amid the escalating costs, particularly on imported wheat.\nDuring the 2021 winter cropping season, 66 435 hectares were put under wheat, the third-highest hectarage since independence which has hitherto been surpassed by 2004 and 2005 hectarage of 70 585ha and 67 261 hectares respectively.\nThis according to GMAZ brought stability to the supply of bread and other related products, particularly during the festive season, where demand is traditionally high, it also brought major relief on the pricing of wheat products.\n“The successful 2021 command winter wheat program has been critical in stabilizing supplies and prices of bread flour and other related products, especially this past festive season,” said Mr Tafadzwa Musarara, the GMAZ chair, in a statement.\nThe GMAZ was currently working to increase its wheat contracting programme in the forthcoming 2022 winter wheat season, which will complement Government’s command wheat programme.”\nZimbabwe requires at least 400 000 tonnes of wheat a year to meet the national bread requirements of nearly a million loaves a day and this is usually sustained by local millers importing wheat mainly from Russia, Canada, and Germany.\nUnfortunately, heatwaves in the northern hemisphere and the general climate change across the globe have caused wheat yields to come down triggering increases in global wheat prices as a result of low supply.\nGlobal wheat prices have risen to US$450 from US$415 per tonne which was obtained in the period before the Covid-19 pandemic.\nMr Musarara, however, said, “The milling industry remains sensitive to the plight of consumers as aggregate demand is low at this time of the year.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/bread-flour-price-up-625pc/"}
{"doc_id": "0bb56193e4f32d8429f8ec82fcc0dbdc", "text": "We sometimes hear people say their retirement savings will last for as long as they live – if they’re lucky. While it’s true you can’t predict how long you’ll live, and you can’t predict how investment markets will perform, there are ways to minimise the role of luck in your retirement planning.\nOne of the reasons luck plays a role in whether your retirement savings will go the distance is the fact that investment markets are essentially random. In other words, they often go up and down for some reason and there’s not much anyone can do to predict or control this. Fortunately, short-term market movements play a relatively small role in how long your retirement investments will last.\nOn the other hand, long-term market trends can either set you up for a happy retirement with enough money to last a lifetime, or a potentially unhappy retirement where you run out of money prematurely. This is because the returns your portfolio delivers early in retirement have a disproportionate impact on the overall outcome.\nIf you’re lucky, you retire at the beginning of a long-term bull run, where markets go up in value overall. But if you aren’t and you retire in a bear market where markets go down, you’re more likely to run out of money. However, if you weren’t lucky enough to retire into a bull market, you can still minimise the role of luck in your retirement finances.\nEven if you have saved a substantial sum of money that should be more than sufficient to fund a comfortable retirement, if you invested your retirement savings in a living annuity, and your withdrawal rate rises above a sustainable level, then luck plays an increasingly important role. Minimising the role of luck, then, is strongly related to keeping a tight rein on your withdrawals.\nWhat is the right level of withdrawal? If you’re a 65-year-old male when you retire, the most you should draw from your capital is 5,5% a year. So, for example, if you’ve saved R1 million, the most you should take as an income is R55 000 a year, or R4 583 a month. The figure for a 65-year-old female is 5%, or R50 000 a year, as women tend to live longer. This is based on the average lifespan of a male who retires at 65, which is 82 years. For females retiring at 65 the average lifespan is 87.\nCutting your spending is a good way to help your retirement savings last. In the fourth, or passive, phase of retirement you will probably start to slow down a little, take fewer trips and maybe even downsize your primary residence. It makes sense that if you’re doing less, you’re also spending less.\nHowever, this is also the phase where health concerns such as an illness or the need to take expensive medications may arise. This should be taken into account as some expenses during the passive phase may be higher than you’ve planned for. A rule of thumb is to budget for medical costs to increase by 2–3% a year more than general inflation. So, if inflation is running at 7% per year, make sure you budget for your medical expenses to increase by 9–10% a year.\nAlso, what happens if you live beyond the averages? If you are budgeting to meet your living and medical expenses from your own savings in a living annuity, you need to allow for the fact that you may live to age 95 as a male or 100 as a female. This is used as a rule as there is a 10% chance of that happening – planning for anything shorter is thus risky.\nA further way to help minimise the role of luck in this phase of retirement is to take another look at how you’ve invested your capital. If you invested all your savings solely in a living annuity, perhaps it’s time to consider switching some of it into a life or guaranteed annuity. Remember, investing only in a living annuity for the duration of your retirement is only appropriate if you’ve saved enough capital to give you a sustainable income for life. If you haven’t saved enough, don’t rely on luck to grow your capital once you retire. Luck isn’t a strategy.\nWith a life or guaranteed annuity, on the other hand, the monthly income cannot go down and it is guaranteed for as long as you live, which eliminates the luck factor.\nIn summary, here are a few ways to minimise the role of luck and ensure your retirement savings go the distance:\nRealise that even if you’re less active, your monthly expenses won’t necessarily go down because your medical expenses are likely to increase.\nConsider securing some of your income by investing in a life or guaranteed annuity. Ask your financial adviser to look at your options.\nMake sure to regularly review your retirement planning and investment strategy. Now is a good time to re-evaluate where you are and for how long your savings will need to last.\n* Pienaar is a Senior Business Development Manager of Just Retirement Life (South Africa); [email protected]\nPERSONAL FINANCE", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/personal-finance/retirement/minimising-the-luck-factor-in-the-passive-phase-of-retirement-40b1bc81-4653-4a6f-bcae-2b7a14ea301a"}
{"doc_id": "fde6e75ce5094ed83edfae744cf0c636", "text": "JOHANNESBURG - DRDGold, a world leader in the recovery of the metal from the retreatment of surface tailings, would consider declaring an interim dividend in February, the group said yesterday.\nDRDGold said cash and cash equivalents increased by R300.1million to R2.015billion as at September 30, 2020, after paying the final dividend for the year ended June 30, 2020, of R299.1m.\nThe cash generated during the current quarter would be applied towards the company´s extended capital expenditure programme for the year ending June 30, 2021.\n“Despite the capital expenditure planned for the year, management positions the company favourably to, in the absence of unforeseen events, consider declaring an interim dividend in February 2021,” said the group.\nDRDGold has been the best performing gold stock on the JSE on the back of record gold prices and the weak rand amid the Covid-19 pandemic economic fallout.\nDuring the current year DRDGold issued a R564m dividend, its largest in history, out of excess income reserves.\nThe excess income reserves were mainly driven by the increase in the gold price and mitigation plans to reduce the impact of Covid-19 on inventory stockpiles.\nAdjusted earnings before interest, taxes, depreciation, and amortisation increased by 110percent to R770.4m during the September quarter, primarily due to a 60percent increase in gold sold and a 6percent increase in the average rand gold price received of more than R1m per kilogram.\nDRDGold reported a 45percent quarter-on-quarter increase in gold production to 1514kg, due primarily to a 27percent increase in tonnage throughput to 7260000 tons and a 15percent increase in yield to 0.209 grams per ton.\nAs a result, cash operating costs per kilogram of gold sold decreased by 10percent to R489750 per kilogram. Cash operating costs per ton of material processed increased by 2percent to R104 per ton.\nAll-in sustaining costs per kilogram and all-in costs per kilogram were R588239 a kilogram and R613 206 a kilogram, respectively, increasing quarter-on-quarter mainly due to an increase in sustaining capital expenditure\nDRDGold is 50.1percent owned by Sibanye-Stillwater and is listed on the JSE, with its secondary listing on the New York Stock Exchange.\nDRDGold shares slid 2.59percent to close at R18.84 on the JSE yesterday.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/drdgold-considers-declaring-an-interim-dividend-812adce5-d7ce-4033-a14b-9ad8071644b4"}
{"doc_id": "5a1409ec18dfd41f7f5aab12fefa0e04", "text": "Nairametrics spoke exclusively to business leaders in various fields of expertise on Nigeria’s central bankmove to implement the naira’s unification, and they, in various opinions expressed their concerns.\nElileOlutimayin, ACS, Managing Director at CardinalStone Securities Limited:\nThe convergence of the multiple exchange rates towards the NAFEX rate is a much welcome development and long overdue. Firstly, this would eliminate FX arbitrage, ease the dire supply of the greenback, and ensure a more transparent FX market.\nThe demand for FX in the last couple of years have been more speculative than real. The multiple exchange rates have caused a lot of distortion in price, affected businesses, made planning tougher, and encouraged corruption.\nA unified exchange rate has been one of the persistent requests of Foreign Investors (both FDIs and FPIs). For FPIs, who are major investors in the Nigerian capital market, the perception of an expensive Naira, as well as investor’s outlook of a struggling economy has culminated in c. N200bn worth of net outflows from the equities market in the last 18 months. We expect a unified exchange rate to trigger interest in the capital market and could help stem capital flight.\nEngr.DeboAdejana, REDAN South-West Chairman, MD/CEO, Realty Point Limited:\nI sincerely welcome the planned unified currency exchange rate system. In my own opinion the overall impact on businesses and to the economy as a whole will be positive. The multiple rate system we have operated for some time is not sustainable. CBN’s attempt at defending the Naira has not been successful and cannot be continued in the face of current pressing economic realities.\nYes, the immediate effect will be a further devaluation of Naira and inflation but the eventful effect will be increased inflow of FDIs, elimination of cheap money as a result of round-tripping by the privileged few, uniformity of production cost across the board, growth in our foreign exchange reserve among other things.\nFor me as a developer, we expect property prices to go up because most finishing components are imported. This can also give rise to a situation where we start to look inward for finishing materials especially for low-income housing or continue the emerging trend of delivering carcasses (shell structures) so buyers can enjoy the prerogative of finishing to their taste.\nSo, I welcome the idea. It is in fact a must-do for us at this crossroad if we want to successfully navigate this economic season.\nTomieBalogun,The Millennial Investor and Founder of The Green Investment Club:\nThe plan to unify the multiple exchange rates along the NAFEX rate is long overdue. It will eliminate the recurring round-tripping or arbitrage in the market and increase overall investor confidence in the country. However, will the plan to end multiple exchange rates eliminate the FX black market?\nThe restriction list that bans forex for 41 items needs to be eliminated to achieve this. As long as there are restrictions on certain items, the traders will have no choice but to seek forex from a black market.\nWhile I understand the urgent need to implement the exchange rate unification, we must also consider how it will affect the everyday man who will have to pay more to buy basic goods due to restrictions. In addition to unifying the exchange rate, we need a medium to long term phased-out economic plan to support increased local production.\nThat way, they can impose tariffs on certain imports to restrict Forex demand and make importation of certain goods uneconomical.\nOlasiji Omotayo, Chief Risk Officer, in a Leading Pension Fund Administrator:\nMy view is that they are telling us informally that more devaluation is coming. The official rate may be moved to the I&E level and that should put more pressure on the I&E rate too as that then becomes the floor.\nBut the bigger question is whether the CBN will be able to meet market demand at that level. If otherwise, there will be no convergence but rather a further depreciation in that market However, I expect a little moderation from the parallel market as supply should improve at the I&E rate. Nigerian financial securities should benefit as naira becomes cheaper.\nWhen I saw that update on this, I didn’t know exactly how to feel because the BDC systems create employment for a lot of people and unification might put them out of work.\nHowever, on the flip side, it stabilizes the market for business owners, contractors, and individuals who would now rather process naira to dollar exchange more in the bank than in the black market. This means increased revenue for banks via charges.\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/06/28/business-leaders-talk-on-cbn-unification-of-the-naira/"}
{"doc_id": "f7f66d5b9f194cb6e29007a496413d6e", "text": "Invicta Holdings’ management kept a tight grip on operations, which, with a solid operational performance, resulted in earnings a share increasing by 12% to 304 cents in the six months to September 30, CEO Steven Joffe said yesterday.\n“We are a replacement parts business, and we expect and aim to report steady growth each year, even through the tough times… our geographic and diversification strategy also aims to ensure this,” Joffe said in an interview yesterday.\nThe board intends to pay a dividend at year-end at a cover ratio of between 2.75 and 3.25 times on sustainable earnings. Interim operating profit increased 8% to R359 million. Cash from operations was up 11% to R322m.\nProceeds from the disposal of some non-core properties was used to buy back ordinary and preference shares. Net profit increased 8% to R356m. Revenue was up 12% to R4.3 billion.\nThe R461m revenue increase comprised R178m from South African operations, the rest of Africa contributed R89m, and Europe and America contributed R194m..\nA 100% shareholding was acquired in UK-based Imexpart (Imex), in July, for £4.7m (about R113m). Imex distributes truck and bus parts for DAF, Mercedes, Volvo, MAN, Iveco, Renault, Scania, and Cummins engines and carries a range of replacement parts.\nThe acquisition also provided an opportunity to distribute RPA-Auto Agri products through Imex.\nInvicta’s Replacement Parts Services and Solutions: Industrial (RPI) division, importer and local manufacturer of industrial consumable products, services, and solutions in southern Africa, increased revenue 8% to R2.5bn, while operating profit increased 2% to R175m.\nThe increase was despite higher estimated credit loss provisions raised in the African subsidiaries of R17m.\nThe Replacement Parts Services and Solutions: Auto Agri (RPA) division, which operates in South Africa and certain European countries and which imports, assembles and distributes automotive aftermarket parts and Original Equipment Manufacturer kits, as well as driveshaft parts and other parts for the agricultural industry, grew revenue 27% to R356m.\nIts operating profit fell by 28% to R47m due to higher operational costs, with the inclusion of Imex and the reversal of provisions in the prior year of impairments relating to the war in Ukraine. Imex contributed only 5% of operating profit, as it was still being integrated.\nThe Capital Equipment and related parts and services (CE) division, which sells capital equipment, spare parts and provides related services to the earthmoving and logistics industries in South Africa, lifted revenue 9% to R633m, with operating profit increasing by 34% to R66m.\nThe strong performance was largely due to cost controls and a resurgence in capital equipment sales through the CE finance book towards the end of the period. Joffe said there was also had a “remarkable” order book.\nThe Replacement Parts Services and Solutions: Earthmoving equipment (RPE) division, which supplies aftermarket replacement spare parts, ground engaging tools and undercarriage parts for capital equipment, with operations in South Africa, the UK and the US, increased revenue 26% to R594m, while operating profit increased 29% to R77m.\nKian Ann (KA), which supplies and manufactures replacement parts for heavy machinery and the automotive industry with operations in China, Indonesia, Malaysia, India and the UK, and distribution businesses in the US and Canada, contributed R108m to group earnings compared to R90m the prior period, bolstered by a R33m gain on disposal of a property-owning subsidiary in Shanghai. Invicta owns 48.8% of Kian Ann.\n“The operations and inventory from the Shanghai premises that Kian Ann sold, have been relocated and absorbed into their KKB production and warehouse facility in Khunshan.”\nJoffe said he expected that prevailing market conditions, notably the high interest rates and tough trading conditions worldwide, as well as rand volatility and load shedding and logistics infrastructure issues locally, to remain challenges, but they were well positioned to provide returns to shareholders in this context.\nThe focus will continue to be on debt reduction, as higher interest rates have meant an increase in net finance costs of R23m, which were mainly offset by the R18m improved contribution in equity-accounted earnings from Kian Ann.\nThe strong results came against the background of volatile currencies and an uncertain world macroeconomic and political environment. The weakening of the rand boosted revenue on translation of the group’s foreign operations.\nThe gross profit margin of 32.6% held steady from 32.5% . “Sustainable selling, administration and distribution costs, adjusted for once off items, increased by 7% when compared to the prior period, which we believe is a commendable outcome.”\nEquity-accounted earnings from investments in joint ventures increased by R20.6 million or 23%, to R110m, of which Kian Ann contributed 21% of this increase, through the sale of a property, which resulted in a R33m gain on the sale. KMP Far East contributed the remaining increase in equity-accounted earnings of joint ventures. Net profit for the period thus increased by 8% to R356m.\nThe group repurchased about 1% of its ordinary and 3% of its preference shares in issue, to the value of R49m, resulting in earnings a share rising by 32c to 304c per share.\nHeadline earnings a share increased slightly from 268c to 269c per share.\nCash generated from operations before working capital changes increased by 9% from R469m to R513m, with working capital absorbing R190m, resulting in cash generated from operations increasing from R290m to R322m.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/invicta-produces-another-solid-rise-in-earnings-despite-volatile-markets-07e79bda-1d0a-4a68-8eaf-d16d46db4d77"}
{"doc_id": "aea05c1f86561ca0769b0eca4e85393c", "text": "The on-going salary cuts ravaging across several sectors of the Nigerian economy have spread to the doors of the banking industry. While some were surprised, others already expected that some Nigerian banks would either ‘right-size’ their staff strength or slash salaries.\nA few days ago, the Group Managing Director of Access Bank, Herbert Wigwe, held a meeting, tagged Employee Town Hall Meeting, with some staff of the bank via Microsoft’s Teams (video) and informed them of some strategic moves that the financial institution would take this month to ensure it weathered the ravaging effects of the present crisis shaking the world.\nAccording to him, the decision would affect the bank’s 5,870 permanent staff starting with him, as his salary would be cut by 40%. Sources within the bank informed Nairametrics that he had initially held a session with the staff, engaging them on what decisions needed to be made regarding salaries, especially considering the effects of Covid-19 on the economy. He gave staff the options of either downsizing or accepting cut salaries. Majority of the staff present at the online video meeting on Microsoft Teams chose the lesser evil of cutting salaries.\nAfter this, he had another meeting with staff via the same Teams where he finally announced that there will be salary cuts.\n“One thing that has come out from the lockdown is that digital is the way forward. We do not need the complement of staff to take us to where we are going. It has also shown that non-essential staff, particularly from the outsourced staff, may not be at the level that we require to be in the future.\n“We do not need all the security personnel, cleaners, tellers among others that we have now, considering the fact that not all our branches would be open between now and December. We will talk to the employers of that number of staff, which represent about 75% of our staff strength, to rationalize to the level we think would make us a customer-oriented financial institution that we are.\n“We are also looking at a professional cut. I understand that that is very tricky because it comes with pains. I will be the first to take the heat and I will take the largest pay cut as much as 40%. Everybody may have to make some adjustments of the sort. We understand the difficulties people are going through but also understand the higher calling of creating an institution that can continue to provide for us. When things improve tomorrow, we shall revert to normal. We understand the difficulties facing the people but we have to protect our franchise.” Herbert Wigwe.\nAccess Bank acquired rival Diamond Bank Plc last year and that partly contributed to a 31% increase in operating expenses. Personnel, recruitment, and training costs account for more than a third of overheads after the deal boosted employee numbers and resulted in “wage harmonization” across the businesses. As at December 2019, Access Bank’s personnel cost was about N76.9 billion, up from N57.1 billion same period in 2018. The spike was mostly due to the merger with Diamond Bank where it also absorbed legacy Diamond Bank staff.\nMeanwhile, Nigerian banks are also facing the threat of rising bad-debt levels, as a crash in oil prices and the risk of a naira devaluation coincide with the Covid-19 pandemic that has shuttered businesses. UBA, another mega Nigerian bank, had announced a rightsizing earlier in the year.\nAccess Bank is yet to issue a press release on this issue at the time this article was published.\nDownload Nairametrics App for breaking news and market intelligence.\nMr Wigwe can help with more facts particularly on\n1. the impact of just about a mere one month of Covid-19 lockdown and\n2. his bank’s recent rapaciousness in mergers/acquisitions.\nI hope I don’t get disappointed, that I’d been taking a Lilliput for a giant.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/05/01/access-banks-ceo-announces-40-pay-cut-via-microsoft-teams/"}
{"doc_id": "845e9971474b48e3a162d58b5f6cd014", "text": "Former Captain of the Black Stars of Ghana, Asamoah Gyan, is confident that the Black Stars will live up to expectation in the upcoming AFCON qualifiers and the World Cup tournament with the needed support from Ghanaians.\nGyan, who scored a record 51 goals in 107 appearances for the senior national team, is urging Ghanaians to rally behind the team for glory in the upcoming soccer contests.\nGhana will commence the race for the 2023 AFCON tournament when the Black Stars host Madagascar in the opening game in the qualifiers in June at the Cape Coast Stadium before playing away to Central Africa Republic.\nThe Stars will also take to the global stage in November this year when they make their 4th appearance at the FIFA World Cup to be staged in Qatar.\nSpeaking to Luv Sports at an event in Kumasi, Gyan wished the Stars success in the upcoming tournaments and called on Ghanaians for support.\n“We are all Ghanaians, we have to wish them well, we have been supporting them since day one and I have been part of the history.\n“We shouldn’t forget about the national team, we have taken Ghana to a certain level, we have to just support them.\n“We have qualified for the world cup, everything is going on well, the confidence level of the team is very high and so what we have to do is just, keep supporting them and make sure we do bigger things,” he said.\nAsamoah Gyan, who is also the all-time leading African goal scorer at the World Cup with six goals, prompted the authorities and handlers of the national team to adopt the right approach heading into the game in Qatar.\n“We have been able to qualify and that’s what we should think about. We are now in Qatar; we have to plan on how we can approach the world cup.\n“What I will say is that, we should forget about everything and then support them. Then after, you can assess their performances and everything and so I urge Ghanaians to support the Black Stars.” Gyan concluded.\nLatest Stories\n-\nRainstorm destroys VIP stands of Sunyani Coronation Park\n-\nGovernment borrowed GH¢24bn via T-bills in February 2024\n-\nEdna Obiri: Unraveling the threads of unseasonable warmth: A climate wake-up call\n-\nAnti-LGBTQ+ Bill: Akufo-Addo won’t assent – Security Analyst\n-\nNollywood grieves as Kate Henshaw mourns loss of mother\n-\nInflation to inch up to 23.9% in February 2024 – Report\n-\nI was shocked – Former Oti Regional Minister speaks after reshuffle\n-\nDon’t assent to Anti-LGBTQ+ Bill – Finance Ministry tells Akufo-Addo\n-\nTributes pour in for Nollywood star Mr Ibu\n-\nGhana at 67: Centre seems to be shattering, breaking hearts and minds\n-\nCanon to spotlight sustainability champions at Global Good Awards 2024\n-\nGulf Cooperation Council countries reaffirm unwavering support for Morocco’s sovereignty over Sahara\n-\nBaba Rahman scores for PAOK in Greece Super League win against Lamia\n-\nEnimil Ashon: $6m wasted reviewing 1992 Constitution!\n-\nWe don’t have a position on the passage of Anti-LGBTQ+ Bill – Peace Council", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/asamoah-gyan-whips-up-support-for-black-stars-in-upcoming-tournaments/"}
{"doc_id": "ab72205fc89c34ac57d340af35e3cf8f", "text": "2023 car market: Toyota thrives, Ford Mustang soars, and BMW’s pricy leap\nIn a recent study conducted by automotive industry experts at Rerev, the dynamics of the 2023 car market have been unveiled, revealing surprising shifts in prices over the past decade.\nThe data, which compares the market prices of popular cars in 2013 to their 2023 equivalents, adjusted for a 10-year inflation rate of 31.80%, showcases notable winners and losers in this automotive rollercoaster.\nToyota’s Corolla and Camry have emerged as affordable champions.\nConsidering the inflation rate, these models have become 7.79% and 9.97% cheaper, respectively.\nThe market now offers a more accessible option for those looking for reliable and budget-friendly vehicles.\nOn the other hand, the Ford Escape stands out as the car that has become significantly cheaper over the past decade.\nPriced at Sh4,261,600, it’s now 15.26% more budget-friendly, thanks to improved production techniques and enhanced features.\nNissan Altima and Honda Accord make commendable entries as more affordable options in 2023. With price decreases considering inflation, these models prove that advancements in engine technology and interior features need not come at an exorbitant cost.\nRounding off the list, the Toyota Camry and Corolla showcase Toyota’s strategic pricing approach.\nPriced at Sh4,225,072 and Sh3,302,740, respectively, these models are not only competitive in the market but are also more affordable when considering inflation rates, making them attractive choices for budget-conscious consumers.\nTopping the list with an astonishing 86.53% price increase, the Ford Mustang GT steals the spotlight, now priced at Sh8,827,600.00 in 2023.\nThis surge, surpassing even inflation-adjusted rates, prompts questions about the driving forces behind such a dramatic shift in pricing.\nHot on the Mustang’s heels, BMW’s M5 and X5 models have nearly doubled their prices in 2023, with jumps of 81.19% and 80.01%, respectively.\nThe infusion of cutting-edge tech features and redesign elements are identified as contributors to this substantial price surge.\nThe Ram Pickup and Ford F-Series pickups secure their spots in the middle ground, witnessing price increases of 46.92% and 37%, respectively.\nThese hikes are attributed to expanded engine options, major interior upgrades, and the introduction of powerful and hybrid variants.\nAlso read: Murkomen forms 11-member committee to investigate JKIA mess", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairobinews.nation.africa/2023-car-market-toyota-thrives-ford-mustang-soars-and-bmws-pricy-leap/"}
{"doc_id": "3841656c53871bbd81be898cd05f7f4f", "text": "Life coaches respect gender equality, elect 71% women into executive committee\nLife Coaches Association Of Nigeria (LCAN) has elected more women to its executive team, including the president and vice president in deference to calls for gender inclusiveness and equality.\nChairman of the association’s 2022 electoral committee, Sola Oyegbade, made the announcement, in a statement, yesterday.\nElected on July 31 in Lagos, the new executives include Omawumi Ogbe and Iniobong Josiah, who emerged president and vice president.\nIncorporated in 2006 by Dr. Lanre Olusola, a change catalyst, the body began operations fully in 2016. The elections resulted in 71 per cent of women being voted into executive and leadership positions.\nOyegbade said the association ensured that “a lot went into the planning to birth the new leadership that would take LCAN to higher heights.”\nHe added: “The result you all see is a product of a deliberate process intended to capture equity and inclusiveness. Women are no longer looking from afar, but are playing active roles in leadership today.”\nThe new president, Ogbe, is a certified coach, Neuro-Linguistic Programming (NLP) practitioner and Managing Partner at GLG Communications. She also served as Head of Branding, PR and Social Media in the outgoing executive committee.\nShe has been integral to the association’s executive committee since 2016, receiving a coaching icon award for her contributions to the industry.\nThe incoming vice president, Josiah, on her part, is a certified life coach, John Maxwell leadership expert and clinical pharmacist with over two decades of experience.\nThe outgoing president, Enahoro Okhae, stressed importance of women’s inclusiveness in all spheres of life, including the coaching industry.\nHis words: “As we all know, achieving gender equality and women’s empowerment is integral to each of the 2030 Sustainable Development Goals (SDGs). We do not doubt that there is a flavour in leadership that is purely associated with women’s care, love and protection. I’m excited about this development and I delightfully look forward to the growth LCAN would record under a leadership largely occupied by women.”\nGet the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/news/life-coaches-respect-gender-equality-elect-71-women-into-executive-committee/"}
{"doc_id": "2b0a03b2251ce427d5f45a347da25b85", "text": "Ghana will cap its 2014 Eurobond at $1 billion rather than the $1.5 billion initially approved by parliament in order to sustain its debt levels, President John Mahama told Reuters in an interview on Friday.\nThe West African country may look for fresh financing if it can secure an assistance deal with the International Monetary Fund, Mahama said, adding that former finance minister Kwesi Botchwey would lead talks due to start on Sept. 16.\nGhana announced in August it would seek an IMF programme to tackle fiscal problems including rising inflation, a stubborn budget deficit and a currency that has tumbled this year. These factors threaten an economy that has grown rapidly on the back of exports of gold, oil and cocoa.\n“This is the time to not only stabilize the macro but also to implement the measures that will transform this economy and make it more robust and resistant and resilient to the kinds of shocks that a country like Ghana faces,” Mahama said.\nFiscal stability and reforms must be sustained beyond the 2016 election cycle for the economic programme to succeed, he said. Ghana’s deficit rose sharply in 2012, the year of the previous election, mainly due to public sector wage rises.\nMahama said Ghana was hoping to bring inflation, which hit 15.3 percent in July, down to 11-12 percent by the end of the year.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/africa/article/ghana-to-cap-2014-eurobond-at-1bn-to-sustain-debt-levels/"}
{"doc_id": "eb4031aa3037dcdc3598505bcf72b913", "text": "investment\n21 Nov\nNigeria has a deep-rooted history when it comes to games of chance and the quest for quick wealth. From age-long lot games, to dice rolling, ram fighting to sports betting, forex trading, and cryptocurrency, there is always one option or another for those seeking quick fortune.\n12 Oct\nCash-strapped Pakistan has asked China to step up funding of projects via the China Pakistan Economic Corridor (CPEC). But experts say Beijing is wary of Pakistan's worsening economic crisis.\n25 Apr 2023\nNetflix Inc (NFLX.O) said on Tuesday it will invest $2.5 billion in South Korea over the next four years to produce Korean TV series, movies and unscripted shows, doubling its investment in the market since 2016.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/investment/"}
{"doc_id": "e25d9e2cf29603f2e8eea2e9a8b751e2", "text": "Member of Parliament for South Dayi, Rockson-Nelson Dafeamekpor has joined calls for government to consider a bailout for customers of defunct gold dealership firm, Menzgold.\nSome of the aggrieved customers, on hit the streets here in Accra calling on President Akufo-Addo to personally intervene.\nMr. Dafiamekpor suggests, government should include the payment in the bailout being offered to customers of the collapsed banks and special deposit institutions.\n“Persons from all walks of life have invested with Mexnzgold. So I agree that the government must come in and do something by way of the bailout because this ought to constitute part of the general bailout given to the financial cleanup,” he said.\nMeanwhile, the Director of Operations at the Presidency has asked aggrieved customers of embattled gold dealership company, Menzgold, to exercise patience with the government.\nLord Commey, who received the petition on behalf of President Akuffo-Addo assured the aggrieved customers that government will not neglect them.\nIn 2018, Menzgold was asked to suspend its gold trading operations with the public by the Securities and Exchange Commission (SEC).\nAccording to the SEC, Menzgold had been dealing in the purchase and deposit of gold collectibles from the public and issuing contracts with guaranteed returns with clients, without a valid license from the Commission.\nThis, the SEC said was in contravention of “section 109 of Act 929 with consequences under section 2016 (I) of the same Act.”\nMenzgold has, however, failed to fully pay its customers the value of their gold deposits as well as their entire investments.\nSome aggrieved customers have, since, staged protests to demand the payment of their locked-up cash.\nThese protests are yet to yield results as customers have still not received their monies.\nLatest Stories\n-\nKyei-Mensah-Bonsu steps down as Majority Leader; Afenyo-Markin in the saddle\n-\nArtists should pay particular attention to the contents of their story – Tulenkey\n-\nHajia4Reall pleads guilty in $2m romance scam case\n-\nLet’s leverage on expertise to save Ghana sports – Asamoah Gyan to sporting greats\n-\nNDC holds Policy Dialogue ahead of 2024 Elections\n-\nZambian player passes away days before Olympics 2024 qualifier against Ghana\n-\nFailure to pay 2016 bonuses retired some players – Exiled Black Queens star reveals\n-\nI’m ready for change, to stay off the street – ‘Homeless’ rapper Agbeko pleads for help\n-\nBeyoncé becomes first black woman to top Billboard country chart\n-\nRDA to work with OPEC, others to deliver robust intra-African oil and gas industry – Dr. Abdul-Hamid\n-\nCaucuses in Parliament cannot appoint leaders independent of parties – Bagbin\n-\nIES, COPEC accuse Sentuo Oil Refinery of selling unwholesome products; threaten to drag NPA, GSA to court\n-\nUBA Group MD pays a working visit to BoG Governor\n-\nECG restores power to Barekese, Owabi dams: GWL assures of water supply\n-\nReplace National Identification cards of victims of the Akosombo Dam spillage – Bedzrah", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/dafeamekpor-asks-government-to-bailout-menzgold-customers/"}
{"doc_id": "e478b1902b10412df3aa645484c9e649", "text": "Chineme Okafor in Abuja\nThe Nigerian Electricity Regulatory Commission (NERC) has disclosed that three million meters in use by the electricity distribution companies (Discos) are outdated and due for replacement.\nThe commission also stated that the Discos would have to prioritise deployment of new meters to seven million of their unmetered consumers in the new National Mass Metering Program (NMMP) funded by the Central Bank of Nigeria (CBN) and the World Bank.\nIt disclosed this in a document signed by its chairman, Mr. Sanusi Garba and the commissioner in charge of legal, licensing and compliance, Mr. Dafe Akpeneye.\nThe document was a directive from it on structured replacement of faulty and obsolete end-use customer meters in the networks of the Discos.\nAccording to the NERC, the Metering Code (MC) expects that the industry will be serviced with modern accurate metering systems with reliable communication facilities across its value chain.\nThis, it noted was to accurately measure and record energy production and utilisation as well as ensure the sector’s financial viability. However, the NERC’s document suggested that this is not the case in the sector now.\n“Meters serve as a revenue assurance tool for NESI service providers and a resource management tool for end-use customers that receive services.\n“The commission notes that over seven million customers are currently unmetered as indicated by customer enumeration data. It is also estimated that an additional three million meters are currently obsolete and due for replacement,” it said.\nIt also explained that the existence of a large population of unmetered customers contributed to threats affecting the financial viability of the country’s power sector.\nUnmetered end-use customers, it stated, have expressed deep dissatisfaction with the estimated billing methodology of the Discos, hence, “the revenue assurance objectives of Discos have also been challenged by being unable to properly account for the utilisation of electricity by end-use customers.”\nThe NERC further stipulated that Discos shall grant priority to the metering of unmetered customers under the NMMP before seeking to replace obsolete meters in their networks.\n“Discos may replace faulty/obsolete meters under the National Mass Metering Program but these replacements must be done in strict compliance with the Metering Code and other regulatory instruments of the commission,” it said.\nTo accomplish this, it stated that Discos must install new meters upon the removal of the faulty or obsolete meters from their consumers, adding that, “under no circumstances shall the customer be placed on estimated billing on account of the Disco’s failure to install a replacement meter after the removal of the faulty/obsolete meter.”\nIt informed that consumers have repeatedly complained about Discos’ notice to replace their meters without appropriate review of the faults of their meters and subsequently placing them on estimated billing.\nTo this, the NERC said the Discos would be violating its regulations by failing to satisfactorily establish the true operational state of consumers’ meters.\n“Customers shall only be billed for loss of revenue where the Disco establishes meter tampering, by-pass or unauthorised access as contained in NERC order on unauthorised access, meter tampering and bypass,” it added.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2021/03/08/nerc-three-million-electricity-meters-obsolete-due-for-replacement"}
{"doc_id": "62b4a00f627b47b26cd1e29902f45cdc", "text": "The Ghana cedi is suffering from lack of Eurobond inflows as it has come under serious selling pressures in recent days.\nThe local currency has depreciated by about 18.89% to the dollar on the interbank market and 26% on the retail market.\nSpeaking to Joy Business, Senior Economic and Currency Analyst, Courage Martey explained that market participants are not confident of the market outlook.\nHe is therefore calling for new ways to cushion the country’s foreign reserves.\n“The cedi’s problem is idiosyncratic because of the fixation of regular Eurobond inflow's which is now missing today. And the kind of the withdrawal symptom from the Eurobond market is really squeezing the cedi hard and the market is really not comfortable with the level of reserves [Ghana’s foreign reserves] they are seeing.”\nFurthermore, he said “in recent weeks or so, you'd also agree that there has been negative noise around the level of reserves that we have. And that also plays into the psychology of the market in a negative way and the cedi is really under serious selling pressure”\nMr. Martey continued, saying, despite the approval of the $750 million syndicated loan by Parliament yesterday, the outlook of the foreign exchange market is not encouraging.\n“The good news is that yesterday parliament approved some $750 million, out of the $1.0 billion. However, the understanding is that it doesn't fully resolve our total external financing means for the year [2022] and so the market doesn't have that full confidence that the supply side or the gap between demand and supply is fully met with this approval”.\nSo that limited supply without options to beef up the reserve right now is really playing negatively on the minds of investors who are really taking cover in safe haven currencies like the US dollar and selling the cedis for the dollar.\nThe cedi is presently trading between ¢8.25 and ¢8.35 on the interbank market.\nLatest Stories\n-\nOne Way Tour: Josh Blakk, Blakknoters deliver captivating performance in Nigeria\n-\nGACL apologises for power outage at KIA\n-\nWater Technology Certificate introduced at St Paul’s School in Kukurantumi\n-\nShowing of JoyNews’ ‘Sick Hospitals’ documentary causes stir in Parliament\n-\nGaza receives first airdrop of US humanitarian aid\n-\nAkatsi: Man in police custody found dead\n-\nVanuatu parliament welcomes Vanuatu Trade Commissioner to Ghana Prof. Hugh Keku Aryee in historic visit\n-\nGhana has become a ‘no-action, talk only’ country – Theo Acheampong\n-\nMan convicted over water meter theft\n-\nAnti-LGBTQ Bill: Parliament did not go against the constitution – Sam George\n-\nAnti-LGBTQ+ bill: All arguments remain personal opinions until SC makes pronouncement – Joseph Kpemka\n-\nAnti-LGBTQ Bill: Provisions in the bill do not impose a cap, gag the media – Sam George\n-\nNo regrets over move to Swansea in 2015 – Andre Ayew\n-\nAnti-LGBTQ+ bill: Ghana has done the right thing by passing the bill – Bokpin\n-\nAnti-LGBTQ+ bill is flawed and unconstitutional – Prof Audrey Gadzekpo", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/cedi-suffers-from-lack-of-eurobond-inflows-depreciates-by-18-8-to-dollar/"}
{"doc_id": "fdca462c4840f0bc22f6be38ee6f2dbd", "text": "The Central Bank of Nigeria (CBN) has confirmed the appointment of Tomi Somefun as the managing director/CEO, Unity Bank plc.\nThis is coming on the heels of the departure of Henry J. Semenitari, who resigned his appointment with the bank last month. The confirmation of Somefun was contained in a letter to the bank, dated August 10, 2015, and signed by its director of banking supervision.\nAn experienced professional with a depth of knowledge of the finance industry, Somefun has over three decades of cognate experience of which 26 years are in the banking sector.\nShe started her career in accounting and financial consulting with Peat Marwick & Co, and subsequently Arthur Andersen & Co (now KPMG). She has worked in several areas across the industry, spanning treasury & institutional banking, investment banking, retail and commercial banking.\nPrior to joining Unity Bank, she had a distinguished career with United Bank for Africa, where she managed and sat on the board of several subsidiaries, including being the maiden CEO of UBA Pensions Custodian she managed for eight years, as well supervising the South-West Region of the Bank.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/banking/article/cbn-confirms-tomi-somefun-as-unity-bank-mdceo/"}
{"doc_id": "0a6e0b46a8125919dec79877ec43c090", "text": "Flooding in KwaZulu-Natal will have long-term financial impact on businesses who were just recovering from the July unrest, and leave a longer-term socio-economic impact relating to climate change.\nThis was the opinion of Andrew Bahlmann, chief executive of corporate advisory firm Deal Leaders International, on Wednesday in response to the devastating floods that left at least 60 people dead and hundreds of millions of rand in infrastructure damage.\nBahlmann said the current business disruption was rubbing salt into a very open wound following last year’s unrest that left a R50 billion economic damage.\nHe said that in the short term, business performance was being impacted severely due to the geographic concentration risk.\n“This is highlighted by KZN’s pivotal role in South Africa’s supply chain and logistics, with the closure of container terminals at the Port of Durban illustrating just how unusually severe this crisis is, with the impact spreading far wider than KZN,” he said.\n“These catastrophic floods - on top of the power crisis, economic pressure and global uncertainty - are forcing business owners to look at risk mitigation strategies like bringing on larger partners to support them during tough times, product and market diversification.\n“Climate change is increasing the insurance and recovery costs following more frequent and severe floods, as well as other disasters such as fires.\n“It begs the question of whether people should be set up for ruin by simply allowing them to build back in areas which in the future are going to be affected time and again. It is fair to say that taxpayers carry a huge burden of paying for rescue and relief costs.”\nState-owned logistics company Transnet has suspended operations across the Durban Terminals.\nAccess roads around the Port have been damaged, container yards, truck depots and trucks themselves have been flooded and damaged and the area is a disaster.\nShipping has been suspended until further notice as a result of environmental damage caused by the adverse weather, and vessels on berth are on standby.\nThere are already long queues of trucks along the N3 highway, with the Marianhill plaza having a backlog of 10km all the way to Hammarsdale.\nAuthorities in KZN have requested that, where possible, all freight movements (trucks) towards the Port of Durban be suspended or withheld until the situation at the Port has improved.\nThe Road Freight Association chief executive Gavin Kelly said logistics operations will be impacted, but no foreseeable shortages in foodstuffs and fuel were expected.\n“There will be delivery disruptions for goods being imported. The Association has advised members to delay any departures towards Durban, and to find depots and safe parking areas along the way,” Kelly said.\n“Where possible, Members have been requested to assist one another to get any vehicles off the road and to secure holding areas until the logistics chain is up and running again.”\nThe damage to infrastructure, businesses and homes will in turn have a devastating impact on the manufacturing, travel and tourism, agriculture, and many other sectors.\nAnchor Capital investment analyst Casey Delport said that whilst the economic impact of the provincial KZN economy is already severe, the flooding will in turn have a detrimental impact on the greater South African economy,” Delport said.\n“The harbour is a key trade route for South Africa and its landlocked neighbours including Botswana, Zimbabwe and Zambia. Consequently, this will further constrain already tight supply chains, driving up inflation and further constraining South Africa’s already lacklustre economic growth prospects.”\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/businesses-in-kzn-will-be-in-an-uphill-battle-to-recover-after-floods-and-july-unrest-edc6b8d3-4c07-4e9b-a31b-7d356c3b6d3a"}
{"doc_id": "33c56b988926dcb397047d690881b98c", "text": "At the outskirts of Ajokete village in Iseyin Local Government Area of Oyo State is four hectares of land belonging to Temidayo Adegoke, a 62 years old farmer who farms maize, vegetables and cassava.\nDespite being a farmer for over 10years, Adegoke is still unable to improve his livelihood and does not want any of his seven children to be a farmer.\n“For many years I have worked so hard on my farm and yet I have very little to show for the hard work,” he told BusinessDay.\nThis is because he has recorded a particular yield per hectare over these periods, as he is unable to find the right hybrid seeds and seedlings for cultivation.\nIn the past, he has purchased several seeds labelled as hybrid from the market only to later discover that they are adulterated or fake.\nThis forced Adegoke to result to replanting the grains harvested from his farm for maize and vegetable production as well as stems for cassava.\nAs a result, he has maintained 1.2MT tons per hectare for maize and 2MTtons per hectare for cassava, when his peers in other African countries are growing between 3MT and 6MT per hectare.\nThe situation has made Adegoke income remains’ perpetually low with it having a negative impact on his livelihood.\nData from the Food and Agricultural Organisation (FAO) shows that Nigeria records the least yield per hectare among its peers. For tomatoes, the average yield per hectare in Nigeria is 7 metric tons (MT), Kenya’s average yield for the crop is 20MT, Ghana tomato yield is 8MT and South Africa’s average yield for the crop is 76MT.\nSimilarly, for maize – which is the most consumed grain on the continent, Nigeria’s yield per hectare is 1.6 on the average despite being the second largest grower of the crop while Kenya and Ghana have same average yield of 2MT per hectare and South Africa’s average yield is 6MT per hectare.\nFor potatoes, which is the best rounded and nutrient root in all of Africa, Nigeria’s yield per hectare for the crop is 3.7MT, Kenya average is 15.5MT and South Africa average yield for the crop is 38.8MT.\nNigeria’s average yield per hectare for rice paddy which is the most consumed staple in the country is 2MT, while Kenya, South Africa and Ghana has same average yield per hectare of 3MT\nAccording to a recent data by the World Poverty Clock, Nigeria is now the poverty capital of the world with 91.8 million people living in extreme poverty.\nA 2010 data from the World Bank collection of development indicator states that rural communities account for 52.8 percent of poverty rate in Nigeria.\nSmallholder farmers accounts for the larger population in rural communities and have remained poor despite the enormous potential in the agricultural sector.\nTheir limited access to improve seeds and seedlings have made Nigeria’s farm yield and income from farming activities remain perpetually low, thus, leading to high production cost and making the sector unattractive to the younger population.\nIn addition, farmers failure to adopt good agronomy practices has also made yields per hectare for various crops to remain low.\nOwing to the low crop yields, Nigeria now records huge demand-supply gaps in most of its staple foods, even as the population growth rate stands at 2.6 percent per annum and projected to surpass the 300 million people mark by 2050, according to The World Population Prospects 2017.\n“Nigeria has the lowest yields per hectare globally. We abandoned agriculture for a very long time when other countries were developing theirs. It is now we are coming back to it and there is still a lot that has to be done,” Emmanuel Ijewere, vice president, Nigeria Agribusiness Group (NABG) said at CEO’s breakfast meeting in Lagos last year.\n“In tomatoes for instance only one percent of Nigerian farmers plant their tomatoes using hybrid seeds and seedlings. In Ghana 40 percent of their farmer’s farm with hybrid seeds and in Kenya it is 68 percent of their farmers that use improved seeds and seedlings,” Ijewere said.\nApart from low yields, infrastructural deficit across the country is also a challenge to farmers’ income, as it has continued to erode their profit and impact their capacity to expand production negatively.\nHalf of the fruits and vegetables grown in Nigeria often get riot on farms before they get to the markets owing to inadequate storage facilities and huge road deficits, experts say.\n“Post-harvest losses in Nigeria are huge due to inadequate storage facility in the country,” said Mawuli Coffie, team leader, West Africa Food Markets Programme.\nCoffie stated that the despite the country is not growing enough owing to low yields per hectare, he says most of what is grown often rots in the field because it is difficult to move them easily from the farms to the market and the facilities to store them are lacking also.\nInvestments in the country’s primary agricultural infrastructure will help integrate the poorer sections of the population into a sustainable process of economic growth and development, experts say.\nIn turn this will reduce poverty by providing jobs directly and indirectly that will serve as a stimulus to the Nigerian economy and agricultural sector specifically.\nAlso, high logistics cost has limited farmers to easily access markets with their produce while reducing their profits.\n“Farmers pay so much transporting their produce from the farm to the market because the roads are very bad. This further increase the cost of production and deter farmers from easily accessing the market and moaking most to resolve selling their produce to middle men who reap them off,” Lawrence Afere, founder and CEO of Springboard Nigeria.\nAfere said that Nigeria can only feed itself and improve farmers livelihood when infrastructures needed to boost productivity across the value chain are provided, stating that infrastructural facilities such as storage, good road and adequate access to quality seed varieties will lift farmers out of poverty.\nExperts say that the country can only tackle its poverty issue when the incomes of smallholder farmers who account for 65percent of the rural population are improved.\nThey say that the government must create the enabling environment for growth in the sector and for it to attract seed investors that does not just export put develop and breed their seeds here.\nIsaac Ogara, secretary, MSN and a lecturer at the department of Agronomy, Nasarawa State University said that there is need for capacity building for farmers on good agronomy practises.\n“Farmers must also ensure that they carry out good farming practices by ensuring that they carry out all the cultivation practices according to recommendations and dry their crops properly. Crops must be properly dried with moisture content of about 12-14 percent,” Ogara said.\nJosephine Okojie", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/agriculture/article/bridging-nigerias-farm-yields-gap-to-tackle-rural-poverty/"}
{"doc_id": "4982fce26ff24e1015e898a9be246f98", "text": "Stability in Kenya hinges on a just, equitable distribution of resources, and a commitment to progress human development for the marginalised. (Photo by Donwilson Odhiambo/Getty Images)\nKenya’s impressive economic gains have ushered in large investments from multinational companies, yielding a boom in infrastructure development. High-rise buildings are mushrooming everywhere, with new malls, hotels, bypasses and expressways becoming the norm. Nairobi has become a construction site. Elsewhere, the promise of economic growth is visible in places such as Nakuru, Mombasa, Lamu, and Kisumu. In the latter two, new ports have begun operating.\nBut a recent policy paper by the Institute for Justice and Reconciliation (IJR) shows that this growth has not been equitable, with many marginalised people excluded from its benefits. In some instances, infrastructure development has even been found to further alienate some groups by pushing them deeper into semi-arid and ungoverned spaces.\nMarginalised groups have also been subject to underinvestment from the state. This includes lesser investments into education and healthcare. Growth has failed to pave the foundations for equitable human development.\nInformal settlements such as Kibera in Nairobi, arid and semi-arid regions of northwest and northeastern Kenya remain subject to deprivation and growing competition borne from scarcity. Millions are left vulnerable to shocks and open to manipulation by devious political actors. These are sites of simmering tension and instability.\nThe drivers of these conflicts can be traced to the political and economic marginalisation of certain groups and regions. Without addressing these needs and advancing the basic capabilities of all Kenyans, competition over scarce resources and opportunities will continue to breed pockets of instability.\nIn the case of political violence, young Kenyans with few prospects to offset their material desperation become weapons of use and destruction by the political class. In informal settlements such as Kibera, they are often hired to disrupt and thwart efforts of their political opponents.\nBut the Covid-19 pandemic has affected the dynamics of informal settlements and predictable political violence. In consultations with the IJR, an expert in Kenyan migration patterns noted many people are leaving Nairobi for other urban centres to look for work or even returning to rural areas where they might take up subsistence farming.\nMany of the gangs that operate in Nairobi’s informal settlements have relocated to other urban county informal settlements where vulnerable youth remain easy targets for recruitment. Devolved gangsterism at local county level might draw other urban centres into election violence in the 2022 general elections.\nA second underdeveloped and marginalised area of Kenya is the northwest, home to pastoralists such as the Pokot and Turkana. This area is characterised by people often in conflict with each other over natural resources such as grazing land and water. The climate crisis is expected to exacerbate this scarcity and may further intensify this conflict. Worryingly, pastoralist conflicts have the potential to become regionalised as raiding and grazing is often a cross-border activity.\nMore recently, the conflict has spilled over into the labour market as employment opportunities in the growing oil sector offer pastoralists income opportunities. But, with low levels of education, people are competing for low-wage, unskilled jobs in the absence of other options. Devolution and oil resources have transformed the conflict dynamics between the Pokot and Turkana. The need to access political power at the local level, associated with access to jobs and resources at the county level, is a prominent feature in the conflict.\nWith little government presence in this region, pastoralists are increasingly in possession of small weapons to defend their assets. There has been a sharp increase in the frequency of conflict in this region, which has become deadlier as more arms penetrate the ungoverned area.\nIn addition, one researcher in the region observed that people are not involved in the government pillar projects that pass through the region. This has in some cases increased grievances against the state, especially where development has not been for the benefit of local residents.\nWhereas governments are interested in big infrastructure projects to spur regional economic growth, residents have their own immediate development and material needs such as having access to clean drinking water, schools, and hospitals. Through IJRs research, a mismatch between local needs and central government priorities has emerged as a critical threat to both inclusive development and stability.\nWomen in ungoverned areas face further marginalisation as their communities struggle to stay afloat through shocks like the Covid-19 economic downturn and climate induced scarcity. In consultation with the IJR, a gender expert in Kenya said women are increasingly being sold into marriage for their dowry.\nBut, during the Covid-19 pandemic, some women in the northeastern region have devised methods of resilience against both the effects of slowed economic growth and growing unemployment. These women have created income-generating opportunities by supplying solar power to the region. This presents a solution for the effects of the current economic downturn and adverse effects of global warming. It also exemplifies that there are many avenues for inclusive development to take hold in marginalised groups.\nUltimately, human-development deficits have exposed the marginalised\nto forms of material desperation that work to drive conflict systems. Without meaningful and far-reaching investment that progresses the basic capabilities of society, vulnerability to capture by the political elite remains a considerable threat to stability.\nWithout inclusive consultation, development projects risk further alienating marginalised people, ultimately compounding their grievances with the state. And, finally, without intersectional policy considerations, shocks such as the climate crisis and economic downturns risk further diminishing the agency of women. At the heart of these considerations is the importance of upholding equity, one of the core values espoused in the Kenyan Constitution.\nFind the full research report from the IJR here.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/africa/2021-10-23-pockets-of-instability-in-kenya-are-underpinned-by-unequal-development/"}
{"doc_id": "c5671e802b1309d8962d37c26583f004", "text": "The future of office space has become a highly debated topic since the pandemic saw millions of workers worldwide set up their offices at home, says Growthpoint Properties, South Africa’s largest domestic office landlord with 161 domestic properties.\nTwo years later, more than half of the global population has been fully vaccinated against the virus. “A return to the office is inevitable, if not already a reality for many, but how has the traditional workspace changed?\n“Employees have significantly benefitted from the flexibility that working from home offers, and it’s not likely something they will want to lose. Equally compelling for them, however, is the need to engage with colleagues in person on a regular basis,” it said in a recent blog post.\nGrowthpoint said earlier this week, in a trading update, that key metrics for its retail and industrial portfolios are showing signs of improvement, but its office portfolio remains under pressure.\nThe company is the largest South African primary REIT (Real Estate Investment Trust) listed on the JSE Its office properties are valued at R27.4 billion with a gross leasable area of 1.7 million sqm. Its top 10 tenants include Discovery Holdings, Anglo American, Transnet, Allied Electronics Corporation, Absa Bank, Exxaro Resources and Investec Bank.\nThe office sector, Growthpoint said, remains the most challenging of its three domestic businesses, “but we are seeing some sporadic green shoots”.\n“Economic imperatives are driving some companies to reduce their office spaces, and work-from-home routines are creating uncertainty about future space requirements. The good news is that the initial sentiment that offices would no longer be needed is receding with hybrid working patterns set to endure.\n“Bigger businesses are returning their staff to offices with different strategies, some fully with others are still on a rotational system. We have started to see smaller tenants that previously vacated their offices return to the market,” the property firm said.\nGrowthpoint said that the office sector is particularly stressed in Gauteng and Sandton specifically, although it expects this business and financial hub to recover in due course.\nInterestingly it noted that the average lease renewal term decreased to 2.8 years from 4.4 years at FY21 and 3.8 years at HY22, as tenants remain reluctant to commit amid uncertainty.\n“What these numbers do not reflect, however, is how uncertainty is driving positive tenant retention because businesses are unwilling to relocate until they have more clarity on their future space needs. While we are retaining a high percentage of tenants, some have downsized, skewing the numbers.”\nFuture of work\nIn conversation with its clients, Growthpoint said that it is seeing different dynamics. “Technology has made it easy for people to work remotely, and staff save on the time and cost of travelling. But not all staff have access to ideal working environments at home or standby power in the case of outages. At the same time, they still miss their office environment and the social interaction that comes with it,” it said.\nAlthough many companies are still uncertain of their future working arrangements, the hybrid model appears the be a front runner for now, the group said.\n“More than just a space to work, collaborate and interact with colleagues, office space plays an undeniably vital role in building and maintaining company culture. Working remotely may still work for existing client relationships, but it is hard to establish those relationships with new clients in a virtual setting.”\nGrowthpoint said it also anticipates that the changes brought on by the pandemic will influence some of the outdated preconceptions we have about what this space should offer. “Historically, a high parking ratio has been preferable, but in the future, we may be able to use our resources more effectively and provide other amenities that are more important,” it said.\n“In terms of vacancies, we are seeing that nodes exposed to an oversupply of office space have been most affected. There may be a demand for nodes closer to residential areas, where people can work closer to home.”\nOther trends Growthpoint says it expects to see in the coming years:\nUnassigned seats\nA trend already in play before Covid-19, hot-desking does away with the traditional personal working space, and instead, employees choose where to sit every day on a first-come-first-served basis. Hot desking disrupted old-fashioned office designs by including different co-working zones such as think spaces, and this trend is only going to become more popular.\nStrict sanitation\nCompanies will need to make it easier for employees to maintain proper hygiene in the COVID-19 era. This may mean adding sinks in kitchens and break rooms or placing multiple hand sanitiser dispensers in key places around the office. In cases where desks are not assigned, employers may consider assigning lockers, file drawers, or cabinets to their staff.\nTouchless technology\nThe implementation of hands-free technology will limit surface touching and the risk of spreading a virus in the workplace. Hands-free technology includes everything from touchless check-in solutions for visitors or access control points like doorways, turnstiles, or elevators in a building.\nSmart, green buildings\nGreen buildings already prioritise the Indoor Environmental Quality of a building, and this aspect has become even more important, particularly indoor air quality. Offices of the future will need to ventilate better with outdoor air to dilute airborne contaminants and lower transmission opportunities.\nIn May, Growthpoint switched on the solar panels at Montclare Place in Cape Town. “With nine hundred and twenty-six 540 watt panels installed, our clients can look forward to enjoying solar energy generation of up to 736,646Kwh for the first year.”\nOn top of the savings on energy bills, it also equates to 780,884.76 tonnes of carbon that won’t be emitted into the atmosphere, it said. “And if you’re not sure how much carbon that is, driving a diesel car for over 4 billion km, or 6000 round trips to the moon, would produce the same footprint.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/597214/one-of-south-africas-biggest-property-groups-spoke-to-its-clients-about-their-return-to-office-strategies-heres-what-they-said/?utm_campaign=Prop%20Data%20Newsletter&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz--FP1Tfr6eKHlickVTtJ23Jqiv_mwXQYSN-xictQjYNy9Id7emvPTzhK74n0sITVrzQ3wM4"}
{"doc_id": "837c6f07d08e801fbdb886e1c3e5066e", "text": "After his retirement from Access Bank as Group Managing Director in December 2013, general expectation was that Aigboje Aig-Imoukhuede would be named the next Governor of the Central Bank of Nigeria because of his excellent pedigree and accomplishment. Aigboje popularly known as ‘Aig’ is a noble and extraordinary business leader with a special capacity to inspire others to greatness.\nAig is an exemplary business leader whose achievements have earned other African professionals the admiration and respect of the international business community. Beginning with the transformation of Access Bank from a lowly-rated Nigerian bank into a leading African financial brand with his partner, Herbert Wigwe, every of his touch and initiative delivered superior value to stakeholders and the African continent.\nA quintessential banker and outstanding manager of resources, his excellent leadership style and uncanny ability to bring dreams alive have earned him a pride of place in the chronicle of successful corporate restructuring in the world. By this, the transformation story of Access Bank under his leadership was listed as a case study for MBA students in leading Business Schools across the hemispheres.\nAccess Bank which is now credited with the most successful growth trajectory in the history of banking in Africa and perhaps in the EME was incorporated in February 1989 as a privately owned commercial bank, obtained a banking licence and commenced business in May 1998. The bank converted to a public limited liability and was listed on the Nigerian Stock Exchange in November 1998.\nUntil March 2002 after the recapitalisation of the Bank when Aigboje Aig-Imoukhuede was appointed by the bank’s Board of Directors alongside his partner, Herbert Wigwe, who currently serves as the Bank’s Group Managing Director with a clear mandate to transform the Bank into a world class financial services provider, its fortune had dwindled so much that experts and analysts had written it off.\nWith his partner, Herbert Wigwe, the change agent steered the Bank’s affairs off the storm, and returned the perennial loss-making institution to profitability for its shareholders. Interestingly, in their first year at the helms of affairs, the Bank recorded a PBT of N1billion, an amount more than the cumulative profit recorded by the Bank in its entire 13 years of operation preceding the appointment of Aigboje and Herbert in 2002. This stroke of genius which was too glaring to ignore by competitors marked the beginning of value creation the Bank’s shareholders enjoy till today.\nUnder their watchful eyes, Access Bank emerged from 65th position in 2002 to rank amongst bank top banks in Nigeria. Subsequently, Aig and Herbert led the Bank to acquire Capital Bank International and Marina International Bank in 2007 to enable it meet the Central Bank of Nigeria’s (CBN) capitalisation requirements and affirm its position in the league of Nigeria’s top 10 Banks. So much celebrations and recognitions followed this feat but no one had an idea of the rigors and self-sacrifices by Aig and Herbert that went into that accomplishment\nWell, eventually it did not become a much of a work because both drivers had the nimbleness of brain and moves to make an immediate reality of a grand vision. At staff meetings, both will stand for hours, taking turns, to share their vision and the ultimate destination of Access Bank. Because my function reported directly to Aig, I remember seeing him work into the wee hours of the days and being at his desk early the next morning. When documents are dropped for his review and sign-off late in the night, you meet them upon resumption, thoroughly scrutinised, each page bearing his red or green ink, at your desk.\nAside from having an eye for details, Aig has an amazing mental and physical stamina complemented by this astounding facility for recalling minutiae in a way that rattled the average brain. He is a business strategist with an innate capacity to accurately read and ride the waves of trend. He makes the beach landing before competition even sees the splash! I remember him as a man with manic energy and a laser beam focus for getting the job. His instructions and directives simplify every task he assigns to you and make 75% job done because of their clarity.\nAs a thoughtful and methodical leader, Aig’s most important contributions to the previously placid Nigerian banking sector which abruptly became a bustling frontier that delivers gold to the bold and adventurous are – strategy and responsible business practices. He is the champion of the principles of responsible business practices that is gradually evolving into a stakeholders’ engagement and differentiation tactic for the entire industry. The industry adoption and celebration of the initiative accentuated Aigboje’s power of foresight, for he subscribed to the defining principles long before the global economic melt-down that compelled their adoption in Nigeria and across Africa.\nAigboje’s acumen and resourcefulness have not only nurtured his vision to success. He has lent himself to the service of the Nigerian nation in different capacities and contributed significantly towards building a better society for the habitation of mankind. Most recently, Aigboje who is a member of the National Economic Management Committee, a ‘Think Tank’, dedicated to shaping national economic policies also served at the Chairman of the Fuel Subsidy Verification and Repayment Committee. Consistent with his reputation, he made success of the herculean task which brought huge discomfort to his family and considerable threat to his life by saving the country a whooping sum of N1 trillion, blocking channels through which our beloved country is fleeced of her resources.\nHe toiled day and night, forensically combing through documents and activities of interested parties with members of his committee, to unravel the misery behind the yearly ballooning of Fuel Subsidy Repayment that has consistently seen it over-shooting annual budgetary provision. A team player, who does not take personal credit for collective accomplishments, Aig openly acknowledged the contributions of every member of the presidential committee and their selfless efforts at nation building.\nThis alumnus of the Harvard Business School and law graduate of the University of Benin who started his career in the Legal department of Continental Merchant Bank discovered early enough that he enjoyed making deals better than doing legal works, and quickly transited to core banking. He spent over 19 years of professional and senior management banking experience at Guaranty Trust Bank (now GT Bank), where he was Executive Director superintending the Public Sector Group before resigning in February 2002 to lead a team of other professionals to reposition Access Bank for global recognition.\nAigboje’s rounded exposure in his banking career – spanning treasury, finance control and planning, commercial banking and investment banking has proven to be extremely beneficial to the development of the Nigerian economy and its financial services sector. Specifically, the experiences garnered from these specialist areas of financial services have condensed to differentiate him from other leading bankers in his generation and equipped him to make practical and useful contributions to economic development of Nigeria.\nHis contributions to nation building and social transformational initiatives have singled him out for service to humanity at the global level. For this, he was appointed the first African Co-Chair of GBC-Health, a leading coalition of private sector focussed on addressing health issues. Also, Aigboje served as Chairman of Friends Africa and led other African corporate organisations to donate $1 million to the Global Fund “Gift from Africa” project as a demonstration of the commitment of Africans to addressing some of the problems facing the continent, especially Tuberculosis and Malaria.\nSubmitted by Segun Fafore, a graduate student of Leeds University Business School, was Head of Public Affairs at Access Bank Plc.\nOver the past decade, he has registered himself as an ardent advocate of responsible business practices and sustainable practices. He has consistently demonstrated commitment towards addressing critical societal needs via participation in global alliances, playing defining roles in global and workplace health initiatives. The winner of the 2013 edition of the African Banker Award and the 2011 edition of the Ernst and Young West Africa Entrepreneur of the Year Award in recognition of his contributions to the African financial services landscape and his entrepreneurial process coupled with good judgment has won several awards locally and internationally in his glittering career.\nAig who is the chairman of the Board of Trustees of the Financial Markets Dealers Association (FMDA) was named in 2012 amongst the top ten most respected CEOs in the Pricewaterhouse Coopers Most Respected Companies and CEOs Survey in Nigeria. He is a highly sought after speaker on leadership and entrepreneurship with visible contributions to the African continent. He is a respected and highly experienced boardroom player, serving on the Boards of several notable Nigerian companies, some of which include Wapic Insurance Plc, Associated Discount House and Asset and Resource Management Ltd amongst others.\nHe is a member of the Presidential Committee on the establishment of the African Investment Bank, a Fellow of the Chartered Institute of Bankers of Nigeria and a Governing Council member of the Financial Institutions Training Centre. Also, he serves as a member of the sub-committee of the Bankers’ Committee on Professional Ethics, Harvard Business School Association of Nigeria, as well as on the Board of FATE Foundation where he assists in inspiring entrepreneurial-driven youths to realize their potentials.\nIn addition to being a Fellow of ASPEN Leadership Initiative, Aig’s defining role as chairman of the Bankers’ Committee Sub-Committee Development has significantly impacted and contributed to the transformation of the Nigerian economy. Decorated with the prestigious Commander of the Order of the Niger (CON) for his numerous contributions especially as a member of the National Economic Management Team, industry observers have also attributed Access Bank’s expansion into the United Kingdom and into other African countries such as The Gambia, Zambia, Sierra Leone, Democratic Republic of Congo and Ghana to the practicality of his vision.\nStretching his chain of achievements, Aig would be installed as the 18th President of the Council of the Nigerian Stock Exchange just a day before his 48th birthday. He was born on September 24, 1966. Although this honour could be seen as a worthy birthday gift to a selfless Nigerian and worthy leader but a deeper consideration would reveal the willingness of stakeholders to build on the legacy of the past President to take the Stock Exchange new heights hence the appointment of this proven turnaround manager and social engineer.\nSubmitted by Segun Fafore, a graduate student of Leeds University Business School, was Head of Public Affairs at Access Bank Plc.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/aigboje-a-social-engineer-with-passion-for-value-creation/"}
{"doc_id": "bfdb58cddd3b5cd376448dc1f5b7f067", "text": "South Africa’s petrol price will hit another record high this month, as the department of energy has announced a massive increase in prices at the pumps.\nAccording to the DoE, petrol will be climbing by 82 cents a litre for both 93 and 05 octane fuel, while diesel will be hiked between 85 and 87 cents per litre, and illuminating paraffin will go up by 82 cents.\nThis will take the official petrol price up to R15.54 for 93 octane, and R15.79 for 95 octane. Diesel (0.05% sulphur content) will hit R14.19.\nAdjustments:\n- 93 ULP and LRP – 82 cents per litre increase\n- 95 ULP and LRP – 82 cents per litre increase\n- Diesel 0.05% Sulphur – 85 cents per litre increase\n- Diesel 0.005% Sulphur – 87 cents per litre increase\n- Illuminating Paraffin (wholesale) – 82 cents per litre increase\n- LP Gas – 138 cents per litre increase\nAccording to the department, the average international product prices of petrol and diesel and illuminating paraffin increased during the period under review.\nAdditionally, the rand depreciated against the US dollar during the period under review, on average, when compared to the previous period.\nThe average rand/US dollar exchange rate for the period 25 April 2018 to 31 May 2018 was 12.5099 compared to 11.9797 during the previous period. This led to a higher contribution to the Basic Fuel Prices on petrol, diesel and illuminating paraffin by 30.46 c/l, 31.17 c/l and 31.53 c/l respectively.\nOn top of prevailing market conditions, the latest hike also takes into account the leftover under-recovery from April, according to the Automobile Association (AA).\nThe AA also warned this week that, should market conditions continue on the current path, motorists can expect yet another petrol price hike in July, with the price expected to shoot past R16 a litre on a steady march to R17 a litre.\nThe new petrol prices kick in on Wednesday, 6 June.\nThis is what you can expect to pay:", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/energy/249121/here-is-the-official-petrol-price-for-june-2018/"}
{"doc_id": "26d87addbb85845ab139b13697595f07", "text": "Johannesburg - The ANC has denied its deputy secretary-general (DSG) Jessie Duarte had anything to do with the appointment of her son-in-law as the chief of staff for David (Des) van Rooyen, South Africa’s shortest-serving finance minister and now co-operative governance minister.\nIan Whitley has come into the spotlight following allegations published by UK-based publication Africa Confidential that he was one of the two “advisers” who attempted to take charge of the Treasury when Van Rooyen was appointed finance minister in a shock move in December.\nIt has since emerged that Whitley, a former banker with Absa, Standard Bank and African Bank, and alleged by Africa Confidential to have strong links to the controversial Gupta family, is married to Duarte’s daughter.\nWhile Van Rooyen’s stint as finance minister lasted only four days, Africa Confidential alleges Whitley and another adviser, Mohamed Bobat, turned up at Treasury headquarters and introduced themselves as people who would be able to “sign expenditure and other authorisations” on behalf of the new minister.\nThe publication said the two were linked to the Gupta family and that their appointments as Van Rooyen’s advisers was influenced by them in a bid to “take over” the Treasury.\nRead: Guptas gamble on nuclear\nBobat and Whitley moved with Van Rooyen to the Local and Co-operative Government Ministry when President Jacob Zuma was forced to reverse the appointment just days later.\nThe alleged influence of the Guptas over Zuma and some members of his cabinet has become a divisive issue in the ANC and the tripartite alliance. Not only has this become an issue within the alliance, but opposition parties are exploiting the influence of the Guptas as indicative of how compromised Zuma and the ANC have become.\nThe party has been vocal about what it terms “state capture” of the government and its institutions by people outside the state, and the Guptas are seen as having captured a significant part of these through their vast business interests through which they have contracts with state-owned enterprises.\nThe ANC yesterday confirmed Whitley was married to Duarte’s daughter, but insisted this relationship did not compromise her in any way.\n“Ian Whitley is indeed married to the DSG’s daughter. However, that is where it ends. The DSG did not introduce Ian Whitley to the minister, nor was she involved in his appointment.\n“We don’t see how the DSG could be compromised in any way by this relationship,” said ANC spokeswoman Khusela Sangoni.\nRead: Guptas are just a red herring\nThe London publication reports the Guptas influenced Zuma to appoint Van Rooyen as their intention was to secure uranium contracts for the nuclear plants that would be built as part of the government’s nuclear build programme, in a similar fashion to the way they secured a coal mine that supplies about a sixth of Arnot power station’s coal needs.\nIt also reports another part of the Guptas’ strategy was to place two of their allies, which it names as Bobat and Whitley, as advisers to Van Rooyen.\n“Whitley is a former head of small and medium enterprises at the defunct African Bank. When Van Rooyen was replaced at the Treasury, the two men went with him to his new portfolio of local government and traditional affairs, and appeared with him when he was sworn in on December 10,” claimed the publication.\nThe ANC’s alliance partners, the SACP and Cosatu, are holding a bilateral meeting on Friday to discuss the inordinate influence of the Gupta family, among other issues.\nThe Star understands the meeting will be discussing the role and influence of the Gupta family on the political economy of South Africa, their links to the efforts to capture the Treasury, and their influence and proximity as providers of goods and services to key state-owned companies.\nIt was the SACP that raised the issue of the Guptas and state capture during the ANC’s recent lekgotla when new Finance Minister Pravin Gordhan presented the implications of the economic crisis facing South Africa and its impact on state expenditure.\nTHE STAR", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/duarte-didnt-get-son-in-law-a-job-1985618"}
{"doc_id": "0d571f7a21afd875e8e2691b3b0fc89c", "text": "King Charles III and Queen Camilla's visit as royals to Mombasa would find many footprints of their family in the Coast region.\nMombasa City played host to the late Queen Elizabeth II in 1963. Queen Elizabeth II, who died in September 2022, was King Charles III’s mother.\nThe family is “revered” in Mombasa, known for an imposing four aluminum tusks in an M shape, representing Mombasa, across Moi Avenue, previously Kilindini Road, right at the heart of Mombasa town.\nIt is the late Queen’s sister, Princess Margaret, who first visited Mombasa in 1956. In neighboring Kilifi, the monarchy is infamous for atrocities during the 1914 Giriama uprising led by Mekatilili wa Menza.\nLawyer Joseph Mwarandu said many Mijikenda youth were killed in the First and Second World Wars, and 200 traditional Giriama priests (Gohu) were burned to death at Katangani by the British military.\n\"The probe into atrocities committed by the British covered between 1952 to 1963 during the Mau Mau uprising should be concluded,” said Mwarandu, a secretary of the Malindi District Cultural Association (Madca).\nHe added: “Our youth died in the first and second world wars, our traditional priests were burned to death, our women were raped, our cattle and granaries were burned during the Giriama uprising.\"\nThe biggest uprising, according to historical accounts, was on January 14, 1914, near Shakahola Forest, during the forced enlistment of the youth to join the British Army to fight in the First World War.\nOn this eventful day, hundreds of Giriama people were killed while Mekatilili and her son-in-law Wanje wa Mwadorikolo were arrested and sent to Kisii to be jailed.\nBut in recent years, the revered treasured Vigago, a carved wooden 9ft tall artifact stolen from the Giriama, during the colonial rule and taken to Europe and the US, is being returned.\nThe Vigago serves as a memorial for reincarnated spirits of the dead among the Mijikenda people.\nIn Mombasa, National Museums of Kenya (NMK) said Queen Elizabeth II was among the many celebrities who patronised the Mombasa Club (Yatching Club), adjacent to the Fort Jesus within Mombasa Old Town.\n\"Many celebrities have patronised this place, including Queen Elizabeth in 1963,\" says NMK in its records.\nFounded in 1897, Mombasa Club is the oldest club in Kenya and was, when it opened, exclusively reserved to a white male clientele.\nIts European members were not more than 50. To qualify for membership, one was required to have an income of 250 sterling pounds a year.\nToday, although admission is still limited to membership, there are no more restrictions on race, gender, or income.\nIn 1952, Mombasa became its main landmark when wooden structures resembling elephant tusks were erected to commemorate visits by the British royal family.\nPrincess Elizabeth was then visiting colonial Kenya and Mombasa had prepared to receive her, but the tour was cut short while in Nyeri following the death of her father. She had to be airlifted home to be officially crowned queen.\nToday, the monument comprises four aluminum tusks in an M shape (representing Mombasa) across Moi Avenue, previously Kilindini Road, right at the heart of Mombasa town.\nThere were originally just two tusks over Moi Avenue, which was then a one-lane road. However, the road was later expanded to two lanes, and a new set of tusks was built in 1956 by the Mombasa municipal council.\nThe refurbishment was in preparation for the visit of Queen Elizabeth II's sister, Princess Margaret, to the region in 1956.\nFormer Mombasa mayor Rajab Sumba remembers Princess Margaret's visit to Mombasa when she made her way to view the imposing tusks erected in honor of the royal family.\n\"I was around 18 years old and working with a petroleum company at Shimanzi in Mombasa. The modern tusks were put up in honour of Princess Margaret in 1956,\" he recalls.\nThe four new tusks, two over each lane, are made of weather-resistant aluminum and have become a major tourist attraction and a meeting place for many as the structures lay near the Uhuru Gardens recreational park. The monument is under the jurisdiction of the NMK and Mombasa County government.\nIn 2017, the county government and its partners refurbished the tusks. They added wooden models of elephants to the center of the tusks as part of aesthetics.\nFormer Fort Jesus museum curator Mr Jimbi Katana noted that many buildings at Mombasa's Treasury Square and the Old Town have British footprints.\nHe cited the Ivory House behind the KCB Treasury Square, the Government Square at Mombasa Old Port, and the Mombasa Yachting Club (Mombasa Club).\n\"The Mombasa Club remains one of the most popular places that celebrities from the United Kingdom visited,\" he explained.\nAt Mama Ngina Waterfront Park in Mombasa, he said the green spaces bear many historical traces, such as the military bunkers. The British used the bunkers during the First and Second World Wars.\nMana Hotel near the Customs House in Mombasa, which was demolished nearly 20 years ago, was also a popular haven for British settlers from Nanyuki and elsewhere who visited Mombasa.\nSarova Hotels and Resorts group managing director Jimi Kariuki, said the UK has invested a lot in Kenya's tourism and infrastructure-related projects, citing the modern cruise ship terminal at the port of Mombasa funded through Trademark East Africa.\n\"The UK and the British Royal family, in particular, have been very strong supporters of wildlife conservation in Kenya through charities such as TUSK, whose Royal patron is Prince William, Prince of Wales,\" said Kariuki.\nThe veteran hotelier, who also served as chairman of the Kenya Tourism Board (KTB), said the introduction of direct passenger flights between the UK and the Kenyan Coast should be effected to boost tourism. He said that good air accessibility is key to the success of long-haul tourism destinations.\n\"Whereas Nairobi is quite well serviced by Kenya Airways and British Airways from the UK, the coastal destinations are not,\" he argued. He said since 2014, there have been no charters flying to the coast.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/health/politics/article/2001484447/royal-family-footprints-in-coast-as-king-charles-visits"}
{"doc_id": "e6a1aee105c0564dbfd803401e5f6edb", "text": "South Africa is urging its banks to withhold ordinary dividends and executive bonuses for 2020 to preserve capital as the economic fallout from the coronavirus pandemic remains uncertain.\n“The principle is: Keep as much ammunition in the armory as you possibly can,” Kuben Naidoo, chief executive officer of South Africa’s Prudential Authority and deputy governor of its central bank, said on a conference call hosted by Standard Bank Group Ltd’s SBG Securities. “We don’t know how long this crisis is going to last.”\nThe regulator was commenting on guidelines released late Monday on how lenders should handle shareholder payouts and executive compensation.\nThe guidelines, an update to a previous note published on March 26, are not instructions, and banks will be able to decide for themselves on what route to take, he said.\nDividends already declared and investor payouts that lenders are legally obliged to make should still be paid, Naidoo said.\nWhat Bloomberg Intelligence Says\nSouth Africa’s leading banks are likely to suspend all dividend payouts for six months and curb discretionary staff bonuses, adhering to guidance from regulators.\nAuthorities have acted decisively in response to the Covid-19 outbreak, with an easing of banks’ capital and liquidity requirements, along with capital relief on restructured loans.\n“Bonuses for executives is not an insignificant amount of money,” and a moratorium on bonuses should be seen as a signal, Naidoo said.\n“If this crisis is very deep and long, then you may well have banks and many companies in the economy saying ‘we’re going to pay people 70%-80% of their salaries’,” he added.\n“Under those kinds of circumstances, executives cannot be giving themselves bonuses.”\nThe guidelines come after the South African Reserve Bank issued a series of measures to give relief to the country’s banks as the industry is called on to roll out assistance to customers such as new loans and payment holidays.\nIt follows steps in other markets around the world, where banks have suspended dividends and share buybacks to conserve their capital.\n“Overall it is a prudent and morally right decision during the crisis our economy is facing,” said Nolwandle Mthombeni, an investment analyst at Mergence Investment Managers in Cape Town. “It will also benefit banks so they have additional buffers.”\nInvestec Group, which has private and investment banking operations in the UK and South Africa and is scheduled to release fiscal full-year results on May 21, will consider the recommendations and advise shareholders in due course, the company said in a filing.\nAbsa Group Ltd will pay its final 2019 dividend on April 20, but will “continue to carefully consider our capital and funding position” and the regulator’s guidance for this year, the Johannesburg-based company said in a statement.\nSouth Africa is also considering the establishment of a so-called funding-for-lending program to provide loan guarantees that may help to ease risks taken on by banks, Naidoo said, without giving any details. “Those issues are being considered by the Treasury and the SARB,” he said.\nThe five-member FTSE/JSE Africa Banks Index reversed earlier losses to rally as much as 11% after Naidoo’s comments, the most since December 2015. The index has declined 35% this year.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/388177/south-african-banks-urged-to-withhold-future-dividends-bonuses/"}
{"doc_id": "ddc9bb071d849be35d5abb361a902e47", "text": "The Government has launched a fruitful war against tax evaders at the country’s borders, going by latest official data.\nFigures from the Central Bank of Kenya (CBK) show import duty in the first two months of the current financial year more than doubled to Sh18.1 billion compared with Sh13 billion collected in the same period last year.\nThis is the highest increase in recent past. In the last financial year that ended in June 2018, Kenya collected Sh103 billion from customs and other import duties.\nThe Treasury has projected to collect taxes on imports of about Sh119 billion by the end of the current financial year. Customs duty is levied at rates between zero per cent and 100 per cent, with an average rate of 25 per cent.\nThere have been fears that the crackdown by the multi-agency committee comprising Kenya Revenue Authority (KRA), Kenya Bureau of Standards (Kebs), Anti-Counterfeit Agency and Kenya Industrial Property, among others, has affected the inflow of goods into the country, with truckloads being confiscated for various violations.\nThe agency has employed a multi-pronged strategy to deal with illegally imported products, including 100 per cent inspection for verification of consolidated cargo consignments at the port, tightening of operations at border entry points to stop tax evasion and monitor the quality of goods coming into the country.\nIn April, KRA and Kebs developed a new procedure known as Route D which requires traders who import different products by pooling them into a single consignment to register with the latter agency.\nThe procedure is aimed at curbing tax evasion and fake products entering the country.\nHuge losses\nThe procedure affects goods brought into the country by both sea and air. All products imported under “Consolidated Cargo” are to be inspected at the country of origin by the standards body under the Pre-Export of Conformity (PVOC) programme. The PVOC programme was developed in 2015. It requires all imported products to be inspected at the country of origin by the standards body.\nThe new procedure has affected a wide range of products imported as consolidated cargo by several small individual importers.\n“This procedure applies to cargo containing a wide range of products or merchandise generally in small quantities or parcels belonging to several consignees who have pooled or assembled together their parcels to form one consignment,” said KRA and Kebs in a joint statement.\nThe consignment may be declared as belonging to one importer at the port of destination or de-consolidated back into the original individual cargo for delivery to the respective owners upon arrival at destination port.”\nThere have been heightened protests, with traders saying they have made huge losses as their goods continue being held at the port of Mombasa by the State.\nHowever, KRA has insisted it is the guilty ones that are afraid. “The context in which this issue came up, is that consolidators – allow me to use the word – were duped by some people who they gave their consignments because these people they gave to clear their consignments for them misdeclared them,” said KRA Commissioner of Customs and Border Control Julius Musyoki.\nStay informed. Subscribe to our newsletter\nKRA also recently announced plans to punish individuals who buy goods or services from persons or entities that fail to declare their income in a move aimed at growing tax revenue.\nThe system, which entails in-depth data analytics, is expected to cure the problem of fictitious value added tax (VAT) inputs mismatched against outputs.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001301442/state-war-on-tax-cheats-nets-sh181b-in-2-months"}
{"doc_id": "9f46fc25d481b21788c3f30f7b992f07", "text": "The Ghana Journalists Association (GJA) yesterday launched the 26th GJA Media Awards in Accra.\nThis year’s GJA Media Awards will be held on November 12, 2022, at the Kempinski Hotel Gold Coast City.\nThe theme for this year’s Awards is: “Walking The Path Towards Economic Recovery: The Role Of The Media”.\nThis time, journalists are entreated to file their stories on the GJA online platform which will be activated on Thursday, September 1, 2022.\nThey are expected to file stories written only in 2021 and not 2022 and as well be members of the GJA.\nSpeaking at the launch, the GJA President, Mr. Albert Kwabena Dwumfour explained that last year, the GJA was unable to organise the awards due to circumstances beyond its control.\nHowever, he said the Association started preparations very early this year so that it does not miss out this time around.\nHe said this year, the Association is decoupling the GJA Awards from the Dinner event so that the GJA Can have two major programmes within the year.\nFirst, he said the GJA Awards which will be a cocktail ceremony would be held, and then later in December, the annual GJA Dinner night, which will be more of a socialization event where industry players and GJA’s corporate partners get the time to meet and socialize.\n“One significant thing about this year’s Awards is the fact the GJA Journalist of the Year is very competitive as the winner is going to be selected based on competitive entries. This is a departure from the practice whereby the Awards Committee selected a winner in consultation with the National Executive,” the GJA President stated.\nTo make the awards more competitive and relevant, he said the GJA has reduced the number of awards from over 50 to about 36.\nMeanwhile, he said the Association was also introducing the African Continental Free Trade Area (AfCFTA) Award this year to place premium on African trade.\nHe therefore, urged all journalists who believe their works meet the criteria set out by the Awards Committee to file their entries, assuring them that the process will be fair and transparent.\n“This year’s awards promises to be great and exciting and I can assure you that it will also be controversy-free. I trust this Awards committee, which is made up of men and women of integrity, to do a good job at the end of the day.\nWe will ensure that deserving and hardworking journalists are duly honored on that day,” he added.\nTheme\nSpeaking about the theme for the awards, Mr Dwumfour believed that the theme was apt due to the current economic challenges Ghana is facing now.\n“Indeed, there couldn’t have been any better theme. I hold the view that, as journalists, we have a role to play in ensuring that the economy is stabilized for our common good. We can do this in many ways,” he said.\nHe continued that, “Firstly, as watchdogs of society, we must just ensure that the government or any state institution does not spend outside their budget or engage in any frivolous expenditure. When we focus on these things, we can help the government achieve fiscal stability.”\nAuditor General’s Report\nTouching on the recent Auditor General’s Report, Mr. Dwumfour said, “We should make sure that the findings and recommendations of the Auditor-General are duly implemented to protect the public purse. We are all aware of the current Auditor General’s Report, which has sent shock waves across the country.\nI believe that if journalists manage to focus on the Auditor General’s Report and ensure that the findings are fully implemented, this country will save millions of cedis every year, which we can channel into programmes like Free SHS, the School Feeding Programme, etc.”\nHe also urged journalists to encourage all citizens and businesses to pay their taxes for national development.\nLatest Stories\n-\nAbena Osei-Asare appointed as Minister of State at the Finance Ministry\n-\nEnergy Minister gets SMRP International Leadership Award in Trinidad and Tobago\n-\nNPP’s decision to remove Kyei-Mensah-Bonsu was ill-considered – Dr Arthur Kennedy\n-\nThere was nothing criminal about Agyapa deal – Richard Ahaigbah\n-\nHassan II Golf Trophy: Yang tops leaderboard ahead of final round with minimum $300,000 at stake\n-\nAgyapa deal inimical to the interest of Ghanaians – Sammy Gyamfi\n-\nI am not a member of Bawumia’s Manifesto Committee – Okyeame Kwame\n-\nThe man Osei Kyei-Mensah-Bonsu: An architect of Ghana’s political landscape\n-\nGovernment must tell us that it has stopped pursuing Agyapa – Bright Simons\n-\nKelvin Kiptum funeral: Thousands mourn Kenya’s marathon star destined for greatness\n-\n15 dead, dozens more injured in China flat fire\n-\nPiers Morgan and Oprah Winfrey ‘deepfaked’ for US influencer’s ads\n-\nGWR sing-a-thon attempt: ‘I will announce my next line of action in a few days’ – Afua Asantewaa\n-\nPlayback: Newsfile discusses Agyapa deal, Majority Leadership drama, Tap & Go\n-\n3 Reasons to Attend the Global Black Impact Summit Next Week", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/26th-gja-media-awards-launched/"}
{"doc_id": "7f7aca2a85aefb9fcac3ee1215d7a1ae", "text": "Last year saw many reforms brought forward in the agriculture sector as the government tried to rid the sector of cartels.\nAgriculture Cabinet Secretary Peter Munya came out with radical reforms to transform the tea and coffee sectors, but no sooner had the changes been laid out than they were met by a number of court cases and general resistance from some stakeholders.\nThe agriculture sector has for a long time been beholden to entrenched interests by powerful cartels, which have ensured that any changes that affect them are not implemented, rendering efforts by successive agriculture ministers to execute reforms unsuccessful.\nThis time however, Mr Munya had the explicit backing of President Uhuru Kenyatta to streamline the coffee and tea sectors, and crucially, the farmers were also loudly backing the reforms.\nIn the last couple of months Mr Munya has initiated reforms in coffee, tea and grain sectors with pundits arguing that he means.\nPolitical goodwill\nEgerton University-based Tegemeo think tank senior research fellow Timothy Njagi said the reforms recommendations have taken long to be implemented, given that some of them had been put forth by different taskforce as early as 2007.\nDr Njagi said some of these reforms require political goodwill and buy-in of other parties such as the private sector. President Kenyatta pronounced himself on coffee and tea issues, adding impetus on Mr Munya’s quest to transform the sub-sectors.\nThe reforms momentum started with the revamp of Kenya Planters Cooperative Union (KPCU) in 2019. The governmnent followed the move by bringing in new directors under the New KPCU, which took over from the defunct body (KPCU) that was dissolved.\nThe New KPCU has since been purchasing coffee from farmers and sought for direct markets for farmers.\nThe ministry also gave New KPCU the role of distribution of cherry advance fund to farmers in form of loans.\nHowever, the distribution was soon met by opposition and this is what exactly happened in the midst of reforms.\nA group moved to court to stop the New KPCU from issuing the cherry fund. They secured a court injunction in April but the ministry moved on with the process notwithstanding, terming the group as enemies of progress.\n“The work of distributing the funds has already begun after we received all the funds from the Treasury. I want to warn the cartels who are trying to frustrate our efforts that we are not going to stop,” said Mr Munya.\nIn April, the High Court stopped the New KPCU from administering the funds but Kilimo House argued that there was a group of cartels trying to stop the revival of this coffee body.\nIn an earlier interview with the Business Daily, Cooperative Principal Secretary Ali Noor said the process of issuing the funds was ongoing though it had been affected by the Covid-19 pandemic.\nThe cherry advance levy was announced by Mr Kenyatta in March 2019 and it is aimed at helping farmers in meeting their financial obligations after harvesting their crop.\nNormally, farmers harvest and sell their crop through cooperatives but have to wait for over a month before they get their payment.\nBiggest milestone\nIn the new systen, the government will recover the funds after farmers have sold their produce by deducting the amount that would have been advanced to them plus a three percent interest rate.\nThese reforms are designed to boost production, reduce the cost of processing and milling as well as transaction costs at the auction market.\nOf all the sectors, tea has achieved the biggest milestone in terms of reforms, with the icing on the cake being the decision by the Senate to pass the Tea Bill 2020 and being signed into law by the Mr Kenyatta.\nThe reforms announced by the government sent shockwaves in a sector that is mainly dominated by the traders, at the expense of smallholder farmers who make up majority of the producers.\nThe reforms have far-reaching effects that will cut on the margin of the service providers such as Kenya Tea and Development Agency (KTDA) while increasing on the earnings of farmers.\nThe process of reforming the tea sector, started in April when Mr Munya spelt out a number of measures. The CS subjected the recommendations to public views and by May 21, he had already submitted the regulations to Attorney-General’s office for gazetting.\nThe reforms directly impacted on KTDA earnings, which controls 60 percent of the Kenyan market.\nMr Munya said the reforms were addressing the governance challenges embedded in the tea value chain that include conflict of interest in the operations of KTDA and its subsidiaries and the auction process.\nIn the regulations, it was made official that the agency would cede one percentage point of the management fee that it charges factories, which translates into billions of shillings that KTDA will forfeit.\nThe agency has been charging factories it manages 2.5 percent of the total income as management fee.\nThe reforms also included changing the way tea factory directors are elected, bringing in a system where all farmers would have equal voting rights.\nFor the longest time, directors have been voted in based on the share that they have in the company and the volume of tea that they bring to the table.\nKTDA objected the move and together with other agencies in the tea sector, rushed to court to stop implementation of the reforms.\nAnd as was the case with the coffee reforms, Mr Munya came out fighting.\n“This is a move aimed at locking out the small farmer so that the agency can pick people who will comply with what they want,” said Mr Munya.\nKTDA lawyers in turn argued that the agency is a private company owned by farmers and not a parastatal and that the only way that the government can own it is through buying it from growers.\n“If the government is interested in taking over the business of KTDA… is to buy-off by negotiating with the farmers; but to just come in and frustrate a private business is something that is akin to compulsory acquisition through regulations and is not allowed whatsoever in law,” said the lawyers.\nThey also argued that the regulations infringed on the constitutional right to own property and challenged the government to follow the right procedures should it have interest in owning the property held by tea farmers under the ambit of KTDA.\nEast African Tea Traders Association, which has also been on the receiving end from the government, opposed some of the regulations.\nPrice discovery mechanism\nOther reforms brought about by Mr Munya include the transitioning of the current trading manual platform of coffee and tea auctions into digital ones to encourage price discovery mechanism.\nFor long, National Cereals and Produce Board (NCPB) had been a den of corruption with cases of graft bedevilling every sector of the grain handler.\nWith an exception of 2019, there had been cases of fertiliser theft and irregularities in purchasing of maize that saw farmers miss out on subsidised fertiliser or fail to sell their crop to the board.\nTo tame this vice, Mr Munya appointed a taskforce that will vet afresh all the employees of the NCPB to ascertain their suitability.\nThe CS also said that the board members will undergo vetting as the government seeks to bring in fresh blood aligned to the work of NCPB.\nThe ministry has also disbanded Strategic Food Reserve (SFR) with the function of purchasing maize now left in the hands of the private sector.\nHowever, the SFR board moved to court and managed to stop its dissolution but it remains unclear whether it will perform its function given that the Ministry of Agriculture still insists that it is an illegal entity.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/data-hub/agriculture-reforms-state-confronts-cartels-3246220"}
{"doc_id": "7ec4b925855922ca2782a341994b254b", "text": "Goddy Egene\nShareholders of Lafarge Plc yesterday at the annual general meeting (AGM) in Lagos approved plans by the company to issue a N100 billion bond later in 2018.\nThe proceeds of the bond would be used to refinance the company’s debts and it is coming after the company raised N131.6 billion through Rights Issue last year.\nChairman of the Lafarge Africa Plc, Mr. Mobolaji Balogun said the company had a debt of $600 billion in 2016.\n“In order to address the impact on the business, $300 million was hedged via non-deliverable forward FX contracts provided by the Central Bank of Nigeria,†he said.\nHe said hence, the company raised N131.6 billion from a rights issue, which was subscribed by 100 percent to finance part of the debts.\nBalogun said the N100 billion will be used to refinance already existing debts.\n“The proposal this year is to refinance some of that debt. We cannot continue to sit on a large concentration of dollar-denominated debts and therefore, we need to refinance.â€\nMeanwhile, he has explained that the dividend of N13 billion recommended by the board for 2017 financial was in appreciation of the support shown by the shareholders so far and a worthy return on their investments.\n“The board of directors is mindful of the support of all our shareholders through the difficult but necessary journey to transform the company into a more agile and correctly financed business ready to benefit from the potential opportunities in Nigerian building materials (market).â€\nHe also assured shareholders that restructuring of the capital structure of the company largely completed through the past year would help to significantly reduce the cost of financing and currency translation risk.\nAccording to him, the company is implementing a new route-to-market initiative aimed at supporting the anticipated growth in demand as the country gradually recovers from recession and as foreign exchange rates stabilise.\nAlso speaking at the AGM, the Country Chief Executive Officer, Lafarge Africa Plc, Michel Puchercos expressed optimism about the performance of the company in the current year.\n“Improvement plans in Nigeria delivered strong operational performance while turnaround actions will be consolidated further in 2018 through energy optimisation as well as commercial and logistic improvement,†Puchercos said.\nThe Lafarge Africa CEO is optimistic that favourable pricing in Nigeria coupled with gains from logistic and commercial initiatives would sustain market share.\n“The target is to significantly build Earnings before interest tax, depreciation and amortisation (EBITDA) margins. The South Africa economy is expected to grow in 2018 which should impact on our South Africa operations. Our turnaround plan in South Africa which is focused on cost containment, commercial transformation and industrial stabilisation is expected to return our SA business to profitability,†he added.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2018/05/17/lafarge-africa-shareholders-approve-n100bn-bond-issuance"}
{"doc_id": "7e53703cb6126486ea73e19d46aa1214", "text": "What you need to know:\n- Sudan was brought to its knees by two decades of international sanctions against former dictator Omar al-Bashir, as well as rampant corruption and the 2011 independence of South Sudan which held almost all the country's oil.\n- Sudan's fledgling banking sector -- which does not accommodate credit card payments or international transfers between individuals -- had $11.2 billion in assets at the end of 2019, according to the IMF.\nKhartoum,\nOn a scorching sidewalk, Ibrahim Said hopes to withdraw his savings from a Sudanese bank, but the wait seems as unending as the war that has brought the country's financial system to a standstill.\nSaid is one of dozens of depositors who have queued at a branch of the Bank of Khartoum in Madani, a city about 160 kilometres (100 miles) southeast of the capital, to recover their savings.\n\"I have been here since seven in the morning hoping to withdraw money from my account,\" he told AFP.\nOne of half a million people who fled Khartoum for safer cities, Said escaped with what little cash he happened to have in the house when the capital was rocked on April 15 by air strikes and shelling that have not stopped since.\nNow, he is locked out of his savings as the fighting between the army under General Abdel Fattah al-Burhan and his deputy-turned-foe Mohamed Hamdan Daglo's paramilitary Rapid Support Forces (RSF) shows no signs of abating.\nIshraq al-Rih has been coming to the same bank branch for three days, and on each occasion it has been the same.\n\"At around 3:00 pm, they open the doors, let in a very small number of people, and if you're not one of the lucky ones you have to come back the next day,\" she said.\nEvery passing day brings more anxiety, as families ration their cash to make ends meet, terrified of what footage shared online of looted banks and empty safes means for their savings.\nLocked out\n\"We don't know what to do. We have money in the bank but we can't touch it,\" Ahmed Abdelaziz told AFP, standing outside the closed gate of Omdurman National Bank.\nThe 45-year-old civil servant thought he was safe in Madani, where tens of thousands of people have settled but cannot escape the impact of the battles that rage in the capital.\n\"The servers that control every bank's operations are all in Khartoum, and employees can't get to them because of the fighting,\" said Mohamed Abdelaziz, who works in the banking sector.\nEven in states untouched by the violence, \"branches have lost contact with the headquarters that used to validate operations,\" leaving managers unable to replenish reserves and allow withdrawals, he said.\nIn a move questioned by observers considering the entire sector is at a standstill, army chief Burhan declared a freeze on RSF assets this week and dismissed the central bank governor.\n\"Bank-to-bank payments have been completely cut; we can't transfer any money between accounts,\" said an employee of Sudanese French Bank who spoke on condition of anonymity.\nSudan was brought to its knees by two decades of international sanctions against former dictator Omar al-Bashir, as well as rampant corruption and the 2011 independence of South Sudan which held almost all the country's oil.\nEven after Bashir was toppled in 2019 and the sanctions were lifted, the International Monetary Fund said Sudan remained on an international donors' list of \"heavily indebted poor countries\" and characterised its banking sector as \"fragile, with several banks undercapitalised\".\nEmptied out safes\nSudan's fledgling banking sector -- which does not accommodate credit card payments or international transfers between individuals -- had $11.2 billion in assets at the end of 2019, according to the IMF.\nIt is unclear how much of that is left, however, as the country had already experienced years of economic woes, including a free-falling currency, before fighters began smashing their way into banks and emptying safes.\nFrom the first week of the war, the army accused the RSF of breaking into a subsidiary of the central bank in Khartoum and stealing \"huge sums of money\".\nThe country's banking federation has repeatedly moved to assure clients that their assets and financial records are intact and has vowed to \"restore banking services as soon as conditions permit\".\nDespite promises of ceasefires and the restoration of services to increasingly desperate civilians, conditions have remained unchanged for over a month.\nFor the time being, depositors like Said, Rih and Abdelaziz are being forced to use whatever means they have to get staples such as flour, which has doubled in price, or petrol -- now 20 times what it cost before the conflict.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nation.africa/africa/news/sudan-war-locks-depositors-out-of-savings-4240488"}
{"doc_id": "4380ae2b20da1e148fb8f8047102bde1", "text": "By Karabo Mabuza\nON DECEMBER 5, Statistics SA released the latest gross domestic product (GDP) figures, which showed a 9.6% decrease in the agriculture sector. This decline was attributed to reduced production in field crops, animal products and horticulture products, as well as various challenges faced by the industry in the third quarter, such as the outbreak of avian flu and floods in the Western Cape.\nThe agriculture sector was the largest negative contributor to GDP growth in the first quarter, subtracting 0.4%.\nAnimal production\nAnimal diseases such as foot and mouth disease (FMD), highly pathogenic avian influenza (HPAI), and African swine fever (ASF) continue to pose a significant challenge to sustainable livestock farming in South Africa. The country has been battling open outbreak cases of these diseases, with around 30% of South Africa’s chickens culled to deal with a new highly contagious strain of bird flu. The number of cases reported has declined, but bird flu is still present in South Africa.\nThe poultry industry and government have made progress in terms of discussions around vaccines. About 6 million layer hens have been culled to date, with another 3.5 million birds affected, representing about 30% of local production. It will take about 17 months to recover this lost production. However, the situation has started to improve in terms of the availability of eggs on shelves.\nVarious interventions are in progress within the poultry sector to deal with bird flu outbreaks. These include the importation of fertilised eggs to rebuild the parental bird stock, importing table eggs (powder and liquid eggs for industrial use to free whole eggs for human consumption), and ongoing considerations regarding possible vaccinations to curb the disease’s spread.\nThere is hope that these measures will contribute to the likely normalisation of prices in the coming months. Fortunately, the infection rate of bird flu has decreased significantly in recent weeks.\nField crops\nThe industry expectation for the 2022/23 season for summer grains was a plentiful supply. However, for the period July to September 2023, farmers were still busy with harvesting activities, which should have led to some of the crops not being accounted for in the growth numbers.\nHorticulture\nThe South African horticulture industry continued to face challenges ranging from cold chain interruptions as a result of rolling blackouts which impact quality and storage costs, the EU’s false codling moth (FCM) regulations, pressures on consumers’ disposable income, and stricter market requirements implemented by the EU. Some areas were hit by frost in early September 2023, affecting exporters of table grapes, which had bloomed earlier due to warmer temperatures in late August 2023.\nFloods in the Western Cape\nThe Western Cape faced another heavy and destructive flood at the end of September 2023 at mainly the Bredasdorp, in the Southern Overberg, regions. Significant damage to farm infrastructure, electricity supply and road networks was reported in various small farming towns of the province. These floods follow heavy rain in the second week of June, which caused flood damage in the Western Cape area.\nThe industry has been concerned about the deterioration of the quality of the winter grains, of which the harvesting process is still under way, and the impact on other important crops like wine grapes and table grapes which the agricultural commodity calendar indicates are in season from October onwards.\nKarabo Mabuza is an agricultural economist currently serving in the Agriculture Advisory Division at the Land Bank. She writes in her personal capacity and the views expressed in this article are her own and do not necessarily represent policy positions of the Land Bank.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/challenges-in-agriculture-sector-such-as-diseases-and-floods-weigh-on-gdp-87c1f73f-916d-47af-aa85-e59262da9104"}
{"doc_id": "38395e7468b39993476de0a6b08de91a", "text": "Tharisa, the LSE- and JSE-mining and metals company, said yesterday that it had increased mill throughput of 8.7% at 1 424.4 kt, with improvements in both grade and recovery for platinum group metals (PGMs) and chrome concentrate in the quarter to December 31.\nPGM output consequently increased to 35.7 koz (koz means thousand ounces) from 30.7 koz in the fourth quarter of the 2023 financial year.\nQuarterly chrome output reached a record at 462.8 kt from 413.4 kt in the previous quarter. A major project is the development of the Karo Platinum Project, a low-cost, open-pit PGM asset located on the Great Dyke in Zimbabwe.\nThe PGM basket price improved slightly by 1% to $1 344 (R25058) an ounce (oz), from $1 331/oz in the previous quarter.\nAverage metallurgical grade chrome concentrate prices held steady at $291/t from $291/t).\nGroup cash on hand stood at $221.5 million, down from $268.8m in the fourth quarter, while debt of $126.6m was lower than $142.2m, resulting in a net cash position of $94.9m ($126.6m).\nProduction guidance for the 2024 financial year remained between 145 koz and 155 koz PGMs and 1.7 Mt to 1.8 Mt of chrome concentrates.\nDirectors said it had been a positive start to the new financial year in what was traditionally a tough quarter with the festive season and inclement weather typically causing challenges to operations.\n“We have made good operational improvements, with waste mining advances leading to a better mining and plant performance, resulting in record quarterly chrome production. This performance is vital and underpins our development of the Karo Platinum Project,” they said.\nWhile PGM prices were subdued, Tharisa’s co-product business model was operationally cash-generative, and the chrome market was enjoying strong demand.\n“This year we will be expanding and rolling out our R&D projects in distinct stages of development and commercialisation,” the directors said.\nChrome demand was underpinned by economic fundamentals and continued concerns about inland logistics in South Africa. Freight rates were ticking up due to geo-political events impacting maritime shipping routes.\nThere had been a short term reprieve from PGM pricing pressure towards the end of the quarter, due to technical short covering.\n“The major pressure on PGM prices remains the (perceived) excess inventory in the PGM pipeline. We expect this to be balanced once the real demand we have seen from end users becomes evident, in particular as further supply cuts are implemented and, on a macro level, policy reduction of subsidies for EV vehicles influences demand,” directors said.\nThe review of the commissioning timeline of the Karo Platinum Project remained on track for first ore in mill (FOIM) for June 2025. Funding solutions ring fenced to Karo Platinum were being pursued.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/companies/tharisa-benefiting-from-strong-chrome-demand-while-pgm-prices-are-weak-1e13f174-5f2d-44bc-a187-203a0d5fdaae"}
{"doc_id": "09f759c2979b979bb9f66610ca78bdd7", "text": "Justice Mary Odili\n3 Jul 2023\nThe suspension of the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele and his subsequent arrest and detention by the Department of State Services (DSS) may appear plausible, even predictable to many Nigerians who readily blame the apex banker for their financial woes, particularly in the last days of former President Muhammadu Buhari government.\nLatest\n4 mins ago\nEverton's penalty for breaching Premier League financial rules has been reduced from 10 points to six following an appeal, the English top flight announced on Monday.\n7 mins ago\nThe Ogun State Government has warned its residents about a misleading message circulating online on the offer of N10,000 in cash palliatives per person from Governor Dapo Abiodun. The message reportedly appeared on various social media platforms, prompting individuals to apply for the proposed cash palliative through a provided link. Abiodun's spokesperson, Kayode Akinmade, in…\n16 mins ago\nChris Gauthier, a Canadian actor known for his roles in “Once Upon a Time,” “Smallville,” and “Eureka,” has tragically passed away at the age of 48. According to his management, Gauthier passed away due to an unspecified short illness. In a heartfelt statement posted on Facebook, Chad Colvin from TriStar Appearances confirmed the devastating news.…\n21 mins ago\nIn an interview with OAP Dotun on Cool FM, rising Nigerian artist Logos Olori disclosed that he is the mastermind behind Davido’s Grammy-nominated hit song “Unavailable.” Logos Olori, born Olamilekan Emeka Taiwo, is a singer and songwriter signed to Davido’s record label, DMW. During the interview, he spilled the beans on how “Unavailable” came to…\n55 mins ago\nThe National Examinations Council (NECO), has released the 2023 Senior School Certificate Examination (SSCE), external results with a total of 50,066, out of 74,342 candidates, representing 67.35 per cent, securing five credits and above including English Language and Mathematics.\n1 hour ago\nNigeria Africa Cup of Nations stars Calvin Bassey and Alex Iwobi scored as Fulham shocked Manchester United 2-1 in the Premier League at the weekend.\n1 hour ago\nAn attack on a mosque in eastern Burkina Faso has killed dozens of Muslims on the same day as another deadly attack on Catholics attending mass, local and security sources told AFP on Monday.\n1 hour ago\nDrinking Ice water is back, but it's definitely not one naira, as it was during the early 80’s and late 90s. Nigerians are surely reacting to this latest development. The current economic conditions have pushed Nigerians resorting back to their old styles, currently the NBS report placed Nigeria’s food inflation on an all time high.…", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/justice-mary-odili/"}
{"doc_id": "ced9eee3718cb5fe02712a1beec2eafe", "text": "Safaricom #ticker:SCOM half-year net profit fell six percent to Sh33.07 billion with M-Pesa revenue dropping the most on account of free transactions to support customers during Covid-19 period.\nThe results, covering between April and September also saw voice and messaging revenue dip in the period that coincided with rising Covid-19 infections that forced the state to enforce disruptive measures such as curfew and ban on social gatherings.\nM-Pesa revenue dropped by Sh6.08 billion while voice and messaging revenues dipped by Sh2.79 billion and Sh0.53 billion respectively, contributing to a drop in service revenue.\nCEO Peter Ndegwa on Monday described the performance as “good” given the massive disruption that the infectious virus has had on households and businesses.\n“It has been a good half-year and we are seeing improvement in the second half. However, we know Covid-19 disruption is not over given the resurgence in infections,” said Mr Ndegwa.\n“Our business has proved to be resilient despite tough operating conditions. There is no doubt that Covid-19 has dealt a huge blow to many people not just in Kenya, but across the globe.”\nM-Pesa revenue dropped by 14.5 percent to Sh35.89 billion despite the value of transactions rising by 32.9 percent to Sh9.47 trillion.\nThe drop was on account of the decision to zero-rate fees on transactions of Sh1,000 and below to reduce cash handling in Covid-19 environment.\n“We have seen increased activity in the M-Pesa eco-system as customers take advantage of the free fees on person to person and Lipa na M-Pesa transactions below Sh1,000 and M-Pesa wallet to bank and bank to wallet transfers,” said the telco.\nHowever, the telco benefitted from the increased number of people who were working from home to lower risks of contracting the infectious virus.\nMobile data revenue grew by 14.1 percent to Sh22.23 billion while fibre to home revenues rose by 47.2 percent to Sh1.64 billion.\nSafaricom says that uncertainties still persist for the full year given the recent surge in infections, the continued zero-rating of M-Pesa transactions of Sh1,000 and how customers will react when charges are reinstated.\nThe telco says it expects earnings before interest and taxes to be in the range of between Sh91 billion and Sh94 billion, a decline of 10.5 percent to 7.5 percent.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/safaricom-profit-drops-6pc-sh33bn-on-free-m-pesa-transactions-3016028"}
{"doc_id": "4547ffb45b7ec7f8d20cb94e20f0b058", "text": "Telkom Kenya could lose up to 60 percent of its subscriber base when it deactivates unregistered SIM cards on Saturday midnight, compounding the loss of customers it has witnessed in recent years.\nThe telco, Kenya’s third-biggest telecommunications company by users, revealed Friday that only 40 percent of its users have complied with the Communications Authority of Kenya (CA) registration directive ahead of the October 15 deadline.\nIts rivals - Safaricom and Airtel - have been gaining subscribers and reported 91 percent and 78 percent SIM card registration compliance, respectively, during the Friday webinar hosted by CA.\nCA in March issued a directive to telecoms to carry out fresh registration of all their mobile telephone subscribers, including those already registered. The regulator extended the deadline to October 15 to allow the firms to conduct a clean-up of its subscriber lines as the State moves to consolidate efforts to enhance data security.\nCA says telcos will be required to deactivate subscribers who will not have updated their records.\n“SIM registration is a continuous process. After the October 15 deadline, subscribers whose lines will have been deactivated will still have an opportunity to re-register,” said Liston Kirui, CA’s assistant director of telecoms licensing and compliance.\nTelkom was recently bought back by the government from UK-based private equity fund Helios Investment Partners in a rare return of a privatised company to State ownership.\nThe operator’s mobile phone subscribers dropped from 4.23 million users in 2019 to 3.42 million in June, representing a 19.1 percent fall in a period when its rivals have gained customers.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/companies/telkom-risk-losing-60pc-users-in-sim-cards-switch-off-3985208"}
{"doc_id": "6d0a21d192a994f171040cd5d053d102", "text": "Science\n14 Dec\nWith all that is happening around us daily it is beyond argument now that our world has entered a crucial and instructive phase.\n3 Nov\nThe House of Representatives has pledged to closely monitor effective use of funds provided by international partners and donor agencies to advance science and technology in the country. Chairman of the House Committee on Science and Technology, Rep. Dachung Musa Bagos, said this during the inaugural meeting of the committee in Abuja on Thursday. Bagos…\nLatest\n7 mins ago\nMark Dodson, the voice actor known for bringing iconic characters to life in \"Star Wars\" and \"Gremlins,\" has passed away at the age of 64. Dodson's most recognizable roles included the cackling court jester Salacious Crumb in \"Star Wars: Return of the Jedi\" (1983) and the mischievous Mogwai in \"Gremlins\" (1984). His talent extended beyond…\n15 mins ago\nTo enhance Nigeria’s oil production capabilities, the country has been urged to adopt Brazil’s model of public-private partnerships (PPPs) and policy reforms that triggered investments in deep water oil reserves.\n42 mins ago\nNigeria's richest man Aliko Dangote has named the \"biggest\" road network in his refinery complex after the former CEO of Access Bank Herbet Wigwe. Wigwe died in a helicopter crash in the United States along with his wife and son in February. \"I have actually decided to name our major refinery and petrochemical road—out of…\n59 mins ago\nThe Senior Staff Association of Nigerian Universities (SSANU) and the Non-academic Staff Union of Education and Associated Institutions (NASU) have given the Federal Government a seven-day ultimatum to meet their demands or they will embark on strike.\n1 hour ago\nThe Minister of Agriculture and Food Security, Senator Abubakar Kyari, has revealed that the Federal Government will release more foodstuffs into the Nigerian markets very soon.\n1 hour ago\nManaging Director, Google Africa, Alex Okosi, has bagged the Iconic Pioneer Award at the 2023 Silverbird Man of The Year Awards.\n1 hour ago\nForeign investors bought about 79% of the N1.053 trillion (approximately $680 million) bonds the Central Bank of Nigeria (CBN) sold last week, the bank's official has said. The rise in [foreign demand] “underscored the level of confidence that the central bank now enjoys from investors,” said CBN spokeswoman Hakama Sidi Ali. “The CBN is optimistic…\n1 hour ago\nNigerian striker Tolu Arokodare was subjected to racist abuse by fans of his club KRC Genk in Belgium. Genk confirmed the abuse in a statement on Monday. Arokodare received the abuse after missing a penalty in Genk's 3-0 home defeat to Club Brugge in a league game on Sunday. The penalty miss angered some of…\n2 hours ago\nThe Western Marine Command of the Nigerian Customs Service (NCS) has handed over 1.7 million wraps of hemp it seized to the National Drug Law Enforcement Agency (NDLEA) in Lagos.\n2 hours ago\nFrench lawmakers are expected on Monday to anchor the right to abortion in the country's constitution, a world first that has garnered overwhelming public support. A congress of both houses of parliament, which gathered in Versailles, should find the three-fifths majority needed for the change after it overcame initial resistance in the right-leaning Senate. If…", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://guardian.ng/tag/science/"}
{"doc_id": "c614bdb2a6fda181351c8b69dd0dd920", "text": "When the Stone Age ended it wasn’t for the lack of stones ditto will be for the oil era. Whether or not our refineries will be handed over to private or pseudo private owners, Sanusi’s revelation will go down as the most chilling and probably the last scandal we will hear from an insider in the oil-money-receipt-chain. Back then former chairman of RMAFC Mr. Hamman Tukur in October 2009 was the last insider who exhibited little courage when he criticized oil savings withdrawals but that went unnoticed. And you should know these insiders aren’t the types that blow whistles – they are too busy for the frivolities of mouthing over a few billion dollars. So hate him or love him, Sanusi Lamido is one Nigerian you can’t dismiss with the wave of the hand. Late president Yar’Adua – a progressive he was – saw this antiestablishment fierceness in him (than him being too much of a monetarist) and brought him onboard.\nFor those that have followed Sanusi well, he’s remarks and speeches don’t cut as your regular Central Bank boss. Interestingly, his recent actions go on to prove that he’s been much ‘wahala’ and the establishment can’t wait for him to embark on his compulsory exit leave. Regrettably, Sanusi’s unrepentant inflation targeting modus operandi to the detriment of manufacturing with the alibi to enable the paying of foreign school fees and health bills don’t hold up to sound reasoning for the domestic economy. One wonders if the backroom people at CBN cannot give us a factual ‘oil paper trail’ and the government agency culpable, we should be very worried about the rudiments and analysis that goes into their discretionary monetary policy without smacks of gross ineptitude.\nOn the other hand, I strongly harbored the feeling Sanusi had intimated the President likewise on the huge withdrawals from CBN before the fuel subsidy bubble busted. But who knows if there was any reply? Critics of Sanusi’s letter argue that it should never have been made public but how else then will posterity judge him as head of the CBN? I reckon Sanusi is almost done penning his memoir. Indeed that will be something to read! For the controversy whether its 49 billion dollars or 10 billion dollars, the humongous money these people claim to keep reconciling till thy-kingdom-come, even if its 1 billion dollars should make any Nigerian quiver.\n2014 will see some major elections which will be a pointer to the 2015 battle royale and as you know politicians won’t blatantly earmark monies in 2014 budget with a subhead ‘campaign’, however the election money must sure come from somewhere. Probably this was what got to Mr Lamido. Nigeria’s production figure has been a speculation since oil discovery, now the barrels claimed to have been sold isn’t balancing and trust Nigerians as usual they have better things to worry about. It baffles me how Nigerians think elections are being financed. Do we think incumbents save their salaries – which is barely enough for their inordinate desires – to prosecute elections? Nonetheless, that is a subject for another day.\nThose busy criticizing Sanusi for his ground shaking revelation should know the bottom line is soon there will be no oil money to share no matter if accounts will be reconciled at all. I say this with a couple of facts. Firstly, OPEC in the very near future will be laid to rest in pieces. As it happened to the potash cartel in the first week of August 2013, it sure can happen to oil.\nOblivious to many, August 2013 marked the collapse of one of the last remaining cartels in the world economy — the potash cartel. Potash is a critical ingredient in the production of the fertilizers that help grow our food. For decades, the global potash industry has been dominated by Belarusian Potash Company (BPC), a joint venture between the Belarusian (Belaruskali) and the Russian (Uralkali), together producing about a third of the world’s potash supply. On July 30th Uralkali broke away from BPC and directed its exports to China – consumer of one fifth of the world’s supply – via its own distribution channels. As the announcement rocked the potash industry, potash miners worldwide lost a third of their share value and the commodity’s price is projected to further slump by 30%.\nOPEC has been dictating global petroleum for nearly half a century, owning 70% of the world’s conventional oil reserves but constraining its supply to just 40% of global oil use. In this, OPEC’s strategy has seen collective production reduced to the level it was at forty years ago — 30.2 million barrels per day. Just like the potash cartel did until August 2013, OPEC sticks to a price-over-volume strategy — meaning producers prefer to sell less product at a higher price per barrel — and all of its members depend on high oil prices for their national budgets and in most cases political survival.\nFrom Saudi Arabia to Venezuela to Nigeria, OPEC’s nations fiscal break-even price per barrel — the price needed by the government to meet its fiscal obligations to her citizens — stands today at nothing less than $100. This means that double digit oil prices are no longer acceptable to the cartel’s members but triple digits. Forget about our annual low oil benchmark the executive proposes which stirs wrangling. The balance which ends up in the excess crude savings account (whatever they mean by that) still finds its way into executive ‘expenditure’ – which can only be investments in the long-term when it brings in return. Pray, when will you ever hear of its returns (on investments)?\nLest I digress, you should know that the wheels of capitalism is oiled by ‘creative destruction’ and OPEC’s ability to manipulate oil prices would be greatly reduced in the face of competition from renewable and efficient energy technologies. Firstly, North America’s shale oil, tar sands and now fracking have already displaced Russia’s and Iran’s grip on natural gas buyers. After all, before advent of oil in the late nineteenth century, we first had whale oil as source of fuel for lighting.\nSecondly, since Angola last joined OPEC in 2007 a lot of other nations have gone on to discover and exploit their Wells like Brazil and even neighboring Ghana but have declined invitation to join the cartel. Moreover, while Indonesia suspended her membership in 2009 and Gabon terminated hers long ago in 1995, small size decampment isn’t where the problem lies for the current 12 member nations. The key swing producer Saudi Arabia is the largest producer in the OPEC bunch, if cuts are needed to keep the oil price North the Saudis do it. But the second largest producer is Iran, who some say is the arch-enemy of Saudi Arabia; this makes OPEC a kind of Saudi vs. Iran smackdown. With a resurgent Iran; close to finalizing a nuclear peace deal with the US and the new oil/gas investments that will pour in, what does it portend to the existence of OPEC? Therefore, OPEC quotas and decisions will seem to matter less and less.\nBy: Enobong Udoh", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/sanusi-heralding-opecs-demise/"}
{"doc_id": "d1ed502b90571dfaeedec2fd59c19091", "text": "Cryptocurrency-related stocks listed in the US surged yesterday, looking to extend their strong November gains, as bitcoin topped $42 000 (about R788 000) to hit a fresh high for the year.\nThe world's biggest cryptocurrency, Bitcoin climbed 4% to $41 598 – its highest point since April 2022 – riding a wave of enthusiasm about potential interest rate cuts in the US as well as traders betting on the imminent approval of US stock market-traded bitcoin funds.\nThe cryptocurrency hit a session high of $42 162.\n“The impact of an (ETF) approval is going to be big in terms of investment appetite because it's going to be more easily regulated, more attractive and easier to invest,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.\n“What we have right now is a risk rally, and bitcoin is also benefiting big time by falling yields. There is also this positive bullish sentiment into next year because it is going to be the year of halving.”\nHalving is a process designed to slow the release of bitcoin, and bitcoin prices have typically rallied following halvings.\nCoinbase jumped 7.3% before the bell. The stock rose nearly 62% in November, even as the crypto exchange reported a decline in third-quarter trading volumes.\nBitcoin investor Microstrategy, which bought bitcoins worth $593 million last month, gained 8.2%.\nBitcoin miners such as Riot Platforms, Marathon Digital and CleanSpark jumped between 9.7% and 12%, respectively, adding to their double-digit gains in November.\nThe ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, rose 7.4% and looked set to touch an over one-year high, while the ProShares Short Bitcoin Strategy ETF that allows traders to bet on a fall in bitcoin futures fell 7.2%.\nInvestor sentiment towards cryptocurrencies and related assets had been lukewarm earlier this year after a string of high-profile collapses in 2022 led to outflows of more than $1 trillion from the sector.\nHowever, the recent rally has sent bitcoin up more than 150% so far in 2023, on course for its best annual performance since 2020.\nReuters", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/cryptocurrency-stocks-surge-as-bitcoin-hits-fresh-2023-high-044769cd-533b-4689-903d-79c75cf81ccf"}
{"doc_id": "4a68074b7034c094180381d85e550e5b", "text": "Over the past two weeks the Bond/USD rate has spiked from around fifty-something percent to over a 100% and the shops are beginning to react. This most recent spike places sellers between a rock and a hard place because they have to price their goods accordingly and these prices may not look appealing to buyers.\nWith some retailers selling 16Gb Micro SD Cards for as high as $28 the usual reaction is to cry foul and claim that “we’re being ripped off” but this is not necessarily the case.Once you consider the fact that shops are buying stock using foreign and having to sell it in bond notes one can see why the prices are what they are. Shops also have to factor in taxes and then the markup before they reach a final retail price, which is why we are purchasing these things at a premium.\nAnother interesting development that has come about due to the fluctuating rates is the fact that some shops are now labelling their quotations as valid “for 24 hours”. This may mean that if you walk into a certain shop today and see a price but you are going to make the purchase in a day or two, the final price may be different from the one you initially saw.\nThe finance minister’s first misstep?\nIt seems our Finance Minister may have caused a panic when he declared that the bond notes are being phased out. Though initially, this was just talk he followed that up by declaring the three solutions he had that were going to solve the issues of the bond notes and by then it seemed the days of the bond notes were numbered.\nNow if you had bond notes and you were hearing these declarations you may have thought to yourself, “why not just start changing these notes to forex and not be caught out when the transition from bonds to whatever Ncube decides we are using occurs.” It seems this has been the default approach for many and thus the rates have gone wild.\nDamage control\nThe President came out a few days ago and hit a u-turn declaring that the bond notes were actually here to stay in a bid to sweep up the mess we now find ourselves in but it seems the damage has been done and confident in the bond notes has decreased once again.\nI’m not entirely sure if Mthuli Ncube’s statements last week were a bid to show that there would be transparency or whether he truly believed in doing away with the bond notes ASAP but it seems those comments have come back to bite the entire nation…", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2018/09/prices-now-valid-for-24-hours-in-certain-shops-as-bond-to-usd-rate-spikes/"}
{"doc_id": "5d78fd6769133ae1d197c117279eae8a", "text": "It is always thought cybercriminals target big companies in order to demand ransom running into millions. However, recent trends show that hackers are shifting their focus to small online businesses mainly because they are vulnerable.\nThese SMEs and payment portals are now facing an increased risk of cyber attacks, experts have warned, on wide usage of mobile payment solutions.\n“Cybercriminals are now targeting small businesses more as they have realized that these enterprises do believe they would be exposed due to their comparatively low turnovers until they lose their data and payments are compromised,” Agora Group co-founder and chief executive officer (CEO) Hadi Maeleb said.\nOver the recent past, financial institutions, State agencies, healthcare, energy and utilities have faced mounting cyber-attacks on the adoption of e-commerce platforms.\nSpeaking during the inaugural Africa Cybersecurity Congress held in Nairobi, Mr Maeleb said the threats to online businesses were growing at an exponential rate as more than 90 percent of business owners are unaware that their enterprises are at risk.\nThe Communications Authority of Kenya's third-quarter data — between January to March 2022 — showed that a total of 79.2 million cyber-attacks were reported, promoting the government to issue 28,848 advisories in an attempt to curb the rising attacks.\nMr Maeleb noted that there is no silver bullet to cybercrime and business owners should invest in cybersecurity tools.\n\"Unfortunately for them, the business of cybercrime has evolved to a point where attacks like ransomware are now sold as a service,” he said.\n“This ‘democratization’ of cyberattacks is expected to push losses due to business interruption, financial theft, personal data breaches and even ransom payments over the Sh4 trillion mark by end of 2022,” he added.\nAfter President Uhuru Kenyatta imposed tough lockdown measures such as social distancing, online learning, and working from home, the adoption of digital solutions such as e-commerce, remote working and banking went up as Kenyans turned to online platforms to curb the spread of the coronavirus.\nWhereas these measures accelerated the adoption of digital platforms, they also increased vulnerability such as data breaches, ransomware, cyber bullying, harassment, data breaches, and phishing attacks.\nWith more than 1 million local businesses running online, Mr Maeleb said this creates an attractive environment for threat actors.\nKenya’s ICT Policy which came into effect in 2006, is credited for creating an enabling environment for the growth and usage of technology.\nTo achieve Kenya's Vision 2030 goal of regional ICT hub, the tech sector was expected to contribute directly and indirectly to an additional 1.5 percent to Kenya’s GDP by 2017/2018.\nThe usage of digital platforms, however, exposes users to safety and security concerns.\nTo address the problem, Safaricom and Huawei in March partnered with Swahilipot to train University in cybersecurity.\nCommunications Authority acting assistant director innovation, research and development Gilbert Mugeni said Kenya has a major cybersecurity capacity gap, with more than one-third of organisations struggling to find competent experts.\nWith the number of certified cybersecurity professionals being low, companies have been forced to scramble for the few cyber security experts.\nA survey covering the period between 2013 and 2021, done by global cyber researcher and publisher Cybersecurity Ventures, says the number of unfilled cybersecurity jobs grew from one million to 3.5 million globally.\n“There is a shortage of cyber analysts in the country and on a larger scale globally. The Covid and post-Covid period shook the cybersecurity ecosystem and there is an overall feeling that the cybersecurity skills gap has actually increased,” said Samuel Keige, head of SOC Presales Engineer at Revere Technologies Limited.\nThe task of the National Computer and Cybercrimes Coordination Committee, which was established to coordinate cyber activities and be the central point of contact for all matters cybersecurity in Kenya, is to rally all stakeholders to prioritise cybersecurity and adopt a proactive approach when dealing with cybersecurity matters.\nThis is because policy gaps in key areas persist, including fostering creativity and artistic expression, lack of an infrastructure sharing policy, industry code of practice, continued information sharing and low network integrity.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/technology/hackers-now-shifting-focus-to-small-traders-3863914"}
{"doc_id": "fc58e1f454073e54328b1f6d4ca4dffe", "text": "- Buhari’s special envoy leaves for Pretoria\n- Rainbow nation closes Nigerian embassy\n- APC calls for nationalisation of SA businesses\nIyobosa Uwugiaren, Omololu Ogunmade, Alex Enumah and Adedayo Akinwale in Abuja and Ejiofor Alike, Obinna Chima, Emma Okonji in Lagos\nThe testy relations between Nigeria and South Africa due to the xenophobic attacks in the rainbow nation and the reprisal in Nigeria may affect the volume of trade between both countries currently put at over $60 billion, THISDAY checks have revealed.\nThe Consul-General of the South Africa High Commission, Mr. Darkey Africa, had put the official trade volume between both countries at $60 billion.\nAlso, the National Bureau of Statistics First Quarter 2019 Foreign Trade Statistics also revealed that South Africa is one of Nigeria’s top five export destinations as the country exported goods with total value of N325.5 billion or 7.2 per cent to South Africa within the period.\nTHISDAY obtained the data just as the two countries struggled yesterday to douse rising diplomatic tension, which has spilled into the streets with reprisals against South African interests in Nigeria.\nIn a pre-emptive move, the country Thursday announced the closure of the Lagos and Abuja offices of its High Commission in Nigeria over fears of attacks.\nHowever, Nigeria said it had not been officially informed about the shutdown of the embassy just as the federal government alerted Nigerians to the spread of fake videos and news, which it said was soaking tension. It also warned against a resort to self-help over the killings of Nigerians in South Africa.\nAmid the diplomatic tension, the ruling All Progressives Congress (APC) joined the fray yesterday, pushing for the nationalisation of the local arm of the South African telecoms giant, MTN Nigeria Limited, as well as calling on Nigerians to boycott all South African businesses in Nigeria, including banks.\nBut the search for solution continued yesterday as President Muhammadu Buhari’s special envoy to South Africa was said to have departed Abuja to consult with the South African government on the current crisis.\nOn another front yesterday, the Lagos State Police Command charged 83 people before a Lagos State Magistrates’ Court, sitting in Yaba, for attacking and looting outlets of South Africa-owed grocery chain, Shoprite, in Surulere and Sangotedo-Ajah, Lagos. They were also accused of stealing goods and damaging properties worth about N500 million.\nExperts, who spoke to THISDAY, have, however, called for an earnest resolution of the diplomatic crisis between Nigerian and South Africa, given the huge bilateral trade between them.\nThey stressed the need to seek diplomatic solution to the current spat between both countries, which appears to be degenerating.\nA reprisal against South Africa’s business interests in Nigeria, according to the experts, is not the way to go as it might lead to further job losses in the country.\nThere are over 120 South Africa-owned businesses in Nigeria operating in different sectors.\nBut some of the leading companies in Nigeria are Stanbic IBTC, Rand Merchant Bank, MTN, Eskom Nigeria, South African Airways, South African Breweries (SAB miller), Multichoice, Shoprite, PEP Retail Stores, LTA Construction, Protea Hotels, Critical Rescue International, South African-Nigeria Communications, Global Outdoor Semces, Oracle and Airtime and Power Giant,\nSpeaking in an interview with THISDAY on the issue, the Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said South African investments were quite huge and significant to Nigeria.\n“So, I think they should be able to resolve this matter amicably. We have about 14 flights between South Africa and Lagos weekly and that is a lot of business. It is in the interest of Nigeria and South Africa to resolve this issue so that it doesn’t deteriorate,” Rewane added.\nAlso, Chief Executive, Global Analytics Company, Mr. Tope Fasua told THISDAY that Nigeria might currently not be able to reciprocate the actions of the South Africans, “for obvious reasons.”\nHe said: “Unfortunately, we are feeble against them, we don’t have any strategic way to reciprocate what they are doing.\n“However, if you look at the companies here, if we decide to go after the companies that are here, a lot of them have been farmed out to Nigerian owners who are the suppliers, who are subletting a lot of things and so on.”\nSimilarly, economist and former Director General, Abuja Chamber of Commerce and Industry (ACCI), Dr. Chijioke Ekechukwu, said retaliation might not be the most appropriate response from the Nigerian government as this could hurt the economy particularly in the areas of jobs and taxes.\nHe said: “To show good faith, they should be compensating the victims of such attacks. I do not support any reprisal attacks on South African companies because these companies are providing employment to our citizens and paying taxes to our internal revenue.”\nTo a Senior Lecturer at the Lagos Business School, Dr. Bongo Adi, “hurting South Africa’s business interest would not be in favour of Nigeria.\n“South African investment makes up significant portion of Nigeria’s FDI inflow. MTN is the largest FDI business in Nigeria, and so many others like that.\n“In the infrastructure space, I understand that for the past few years, South African pension fund has been the largest chunk of infrastructure investment into Nigeria.”\nSouth Africa Shuts Embassy in Nigeria\nIn a pre-emptive move yesterday, South Africa announced the closure of its diplomatic missions in Nigeria on the fears of possible attacks on his personnel.\nThe Department of International Relations and Cooperation said while there had been “no direct physical threat” to any diplomats or staff, the situation remained “somewhat unpredictable” and there were sufficient safety concerns to close the offices in Lagos and Abuja on Tuesday.\nSouth Africa’s International Relations and Cooperation Minister, Mr. Naledi Pandor, said Nigeria needs to address the fact that some Nigerians are, in fact, involved in criminal activities in South Africa.\n“Ensuring such kind persons don’t come to our country would be of great assistance to our nation,” Pandor told local news station eNCA.\nBut the federal government said yesterday it was not aware of the closure of the South African High Commission in Nigeria.\nMinister of Foreign Affairs, Chief Geoffrey Onyeama, while fielding questions from State House reporters in Abuja, denied government’s knowledge of the closure.\n“We are not aware that the South African government has closed down its High Commission here in Abuja or its consulate in Lagos,” he said.\nWhen also asked why some governors are currently attending the World Economic Forum (WEF) in South Africa after the federal government had announced a boycott of the event by the country, Onyeama said they might have arrived in the country before the decision was taken.\nHe also said WEF is not a South African affair but a global event only being held in the country.\nKaduna State Governor, Malam Nasiru el-Rufai, and his Ekiti State counterpart, Dr. Kayode Fayemi, are participating in the event.\nFG Warns against Spread of Fake News, Reprisals\nIn a bid to also douse tension in Nigeria, the federal government alerted public, especially Nigerians, about the activities of some suspected people, who are engaging in disinformation to inflame passion by using fake news and videos of non-related attacks to incite people over the recent xenophobic attacks in South Africa.\nIt also reiterated its appeal to Nigerians, who are ‘’justifiably angered’’ by the attacks on their compatriots in South Africa not to resort to self-help by carrying out reprisals against South African businesses in Nigeria.\nThe Minister of Information and Culture, Alhaji Lai Mohammed, at a press conference in Abuja,Thursday, warned “naysayers and hoodlums” who might want to capitalise on the widespread disenchantment and anger of Nigerians over the attacks to foment mayhem not to allow raw emotions to guide their responses to the attacks.\nHe said: “Three of such videos come to mind: One video shows a man who has been set ablaze trying to escape, and those circulating the video identified the man as Nigerian. This is not true. The video shows Mozambican Ernesto Alfabeto Nhamuave, a victim of xenophobic violence in South Africa in 2008, and it is not that of a Nigerian being attacked in 2019.\n‘’Another video shows those said to be Nigerians jumping down from a multi-storey building that was purportedly set on fire by xenophobic attackers in South Africa. This is fake news as the video is that of a Suraj Coaching Centre in Gujarat State, India, that was gutted by fire on May 24, 2019, leaving about 18 people dead.\n‘’The third video, purportedly showing the bodies of Nigerians who were burnt in xenophobic attacks, is the raw footage of those who were killed in a Tanzanian fuel tanker explosion in Morogoro that left at least 60 dead on August 10, 2019.’’\nHe warned those circulating the videos to immediately desist from doing so, saying that apart from inflaming passion, the videos are also complicating the efforts of the government to calm frayed nerves at home.\nExpressing concerns over reports of these attacks, which have dominated the social and traditional media in the past two days, the minister said hoodlums had hijacked the peaceful protests by some Nigerians to loot Shoprite and shops at other malls in some locations across the country.\n“A Nigerian lady whose shop was looted at the Novare Mall in Lagos said she lost millions of naira to the hoodlums who looted her shop. The offices of the MTN nationwide have either been attacked or threatened.\n“South African firms have either shut their doors or are open under heavy security. As we said in our intervention on Tuesday, Nigerians own and run the shops in the various Shoprite malls across the country. Nigerians work there also.\n“MTN is listed on the Nigerian Stock Exchange and the investors in this company are Nigerians. The workers are mostly Nigerians. Same applies to other South African businesses in the country. By attacking them, we are hurting our own people. That is the blunt truth,” the minister added.\nAccording to him, some hoodlums have also targeted foreigners under the guise of protesting against the xenophobic attacks in South Africa, wondering if Nigerians are complaining that South Africans are attacking Nigerians in South Africa, how then can they tolerate Nigerians attacking Nigerians and foreigners in Nigeria.\nFG’s Special Envoy Departs for South Africa\nAlso yesterday, the federal government announced the departure of the president’s special envoy from Abuja to hold a crucial meeting with South African President, Mr. Cyril Ramaphosa.\nOnyeama had on Wednesday said a special envoy was being sent to South Africa following violent attacks on Nigerians resident in that country as well as their assets.\nA statement yesterday by the spokesperson of the Ministry of Foreign Affairs, Mr. Ferdinand Nwonye, said the special envoy would be received on arrival by the High Commissioner of Nigeria to South Africa together with the Consul General, before proceeding for crucial meetings with high-level South African officials on all aspects of the xenophobic attacks on Nigerians.\n“The special envoy and the High Commissioner will provide President Muhammadu Buhari with a comprehensive briefing on the situation in South Africa and on the outcome of their meetings,” he added.\nAPC Fumes, Calls for Tough Sanctions against South Africa\nBut while the federal government was finding solution to the diplomatic face-off between the two countries, the ruling APC yesterday further stoked tension with its call for the nationalisation of MTN Nigeria and the boycott of South African businesses in Nigeria.\nThe party called on the federal government to acquire the remaining shares of MTN to make the company wholly Nigeria-owned.\nIt said taking over the remaining shares belonging to South Africans, in the company, which was recently listed on the Nigerian Stock Exchange (NSE), would automatically strip it of its South African content.\nIt also called on Nigerians to boycott South African interests and businesses in the country, urging the federal government to also review bilateral agreements with South Africa and their companies operating in the country.\nAPC National Chairman, Mr. Adams Oshiomhole, at a press conference in Abuja, listed the South African businesses Nigerians should boycott to include MTN, Standard Chartered Bank, Stanbic IBTC and Multi-Choice, owners of DSTV and GoTv, among others.\nAccording to him, the recent turn of event offers the country an opportunity to reflect on why the federal government should continue to allow Multichoice to repatriate millions of dollars to South Africa every year.\nHe said having listened to all the explanations from the authorities in South Africa, the people were neither being accused of being irregular migrants nor involvement in illegal activities, adding that those who have business permits to set up businesses, whether they are petty traders or small manufacturers are operating within the letters of the law of the South African nation.\nOshiomhole said over the past one year, Nigerians were being killed in South Africa, lamenting that the escalation of the attacks on foreigners, many of whom are Nigerians, has reached a level that is no longer tolerable.\nHe called on Buhari to also bar South African Airways from flying to any part of the country, while also cutting off all diplomatic ties between the two countries until Pretoria explains and resolves the ongoing xenophobic attacks on Nigerians. .\nOshiomhole stated: “The best way to deal with these issues, I think right away, Nigerians in our individual capacities, this is the time to show commitment to our citizens and show sympathy to those our loved ones by boycotting South African goods and businesses; beginning with Nigerians refusing, from today, to use MTN services.\n“South African companies are making billions of dollars from the Nigerian economy year-in-year-out and repatriating same out of Nigeria. MTN was recently listed on the stock market and some Nigerians bought shares in MTN but in a moment like this and in order to send a very strong message to South African authorities and South African people, the Nigerian government should take steps to take over the remaining shares of MTN that are owned by South Africans so that MTN becomes fully Nigeria-owned.\n“Happily, we have indigenous networks like Glo, Airtel and I believe 9mobile is still standby. If Nigerians decided, at least for the next 30 days, as a first step to stop using MTN, it would have sent a clear message and pay befitting tribute to the lives of those that have been wasted in a very crude and barbaric manner by the South African authorities.”\nThe current situation, he added, also offers Nigeria the opportunity to stop DSTV from repatriating million of dollars to South Africa arising from their activities in Nigeria.\nNigeria Mulls Legal Action against South Africa at African Rights’ Court\nIt was, however, learnt that apart from the diplomatic efforts to make South Africa take steps to end the xenophobic attacks, Nigeria was considering filing a suit at the African Rights’ Court against the government and people of South Africa.\nAccording to an insider in the Federal Ministry of Justice, the federal government is set to formally launch a suit at the African Court of Human and Peoples Right in Arusha, Tanzania, in order to get justice for its citizens affected by the xenophobic attacks.\nThe source said the legal option was predicated on Nigeria’s ratification of the Protocol to the African Charter on Human and Peoples Rights on the establishment of an African Court on Human and Peoples Rights done on May 29, 2004.\n“Following repeated incidences of killings, maiming and destruction of properties of Africans, especially Nigerians living in South Africa and since it appears diplomacy has failed to prevent the South Africans from committing xenophobic attacks on foreigners, particularly Nigerians, it behoves the federal government to exercise its duty under International law to protect the rights of its citizens in diaspora”, the source said.\nHe added that it is an elementary principle of international law that a state is entitled to protect its subjects, when injured by acts contrary to international law committed by another state, from whom they have been unable to obtain diplomatic action or international judicial proceedings on his behalf.\nAccording to the source, Nigeria is entitled to take actions in this xenophobic attacks on its citizens because South Africa has blatantly and with impunity failed to apply the “National Treatment” principle, treatment equal to that given by South Africa to its own nationals to foreigners within its territory and consistently encouraged gross violation of the fundamental rights and freedoms of Nigerian citizens living in that country.\nHowever, when contacted, the Attorney General of the Federation (AGF) and Minister of Justice Mallam Abubakar Malami (SAN), declined comment on the latest move by Nigeria against South Africa on the legal option.\n83 on Trial for Attacking, Looting Shoprite\nMeanwhile, 83 people suspected of attacking and looting the outlets of Shoprite in Lekki and Surulere, Lagos, were arraigned yesterday by the police before a Lagos State Magistrates’ Court, sitting in Yaba.\nThe police, in a six-count charge, accused them of conspiracy, riotous assembly, arson, stealing, malicious damage, unlawful destruction of property and conduct likely to cause the breach of peace.\nThe prosecution told the court that the accused persons attacked the Shoprite outlets and allegedly stole and damaged properties estimated at N500 million.\nIt said they committed the offences on September 3, 2019 in contravention of sections 50, 287 of the Criminal Law of Lagos State, 2015 and were liable to be punished under sections 339 (1) (2), 168 (d) and 411 of the same Act.\nAll the defendants, however, pleaded not guilty while the magistrate, Mr. P.A. Ojo, admitted each of them to bail in the sum of N500,000 with two sureties in like sum.\nHe said the sureties must be the defendants’ parents or a paternal family member and adjourned the case till October 9, 2019.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2019/09/06/xenophobic-attacks-threaten-60bn-nigeria-south-african-trade"}
{"doc_id": "4693ba06706df4213c1d674146c7fcb6", "text": "The Automobile Association on Friday handed the finance ministry a 52,000 signature petition against the proposed tolling of Gauteng freeways.\nThe signatures were collected in under a month, said AA public affairs manager Gary Ronald, who handed the petition to the Treasury's head of communications Jabulani Sikhakhane in Pretoria.\n“There was such a sense of anger and outrage that the public were showing,” said Ronald.\nIn a letter to Finance Minister Pravin Gordhan, which accompanied the petition, the AA had called for the tolling not to be implemented, he said.\nRonald said the annual fuel levy currently charged should be solely for the use of roads.\nThe Gauteng toll fees were set earlier this year at 66 cents a kilometre, but were put on hold after a public outcry.\nA Gauteng Freeway Improvement Project e-toll steering committee was formed to reassess the pricing.\nRonald said the petition would also be handed to Transport Minister Sbu Ndebele next week.\n“We cannot believe the cost per kilometre is so high on roads that did not have to be built from scratch,” he said.\nSikhakhane said he could not comment on the petition. - Sapa", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/govt-handed-petition-against-tolls-1057393"}
{"doc_id": "26d84b563ddedf037e5babd437eb5731", "text": "Consumers in South Africa are in their lowest point, financially, in years – but the worst might be over.\nAccording to Efficient Wealth, South African consumers have been battered by low wage growth, high interest rates, and increasing debt, resulting in a persistently weak economy.\nSalaries in South Africa have not kept up with inflation, which has resulted in a decline in buying power.\nFor instance, the Bankserv Africa Take-home Pay Index (BTPI) ended last year at R15,409 in nominal terms, 5.6% higher than the R14,596 recorded in December 2022.\nHowever, considering the average consumer inflation rate of 6.0% in 2023, real-take-home pay in December 2023 was R13,723 in real terms, representing a 4.7% drop from the previous year.\n“The danger of plummeting salaries, however, is not just that households stop spending sufficiently to grow the economy but that consumers will need to borrow money to make ends meet,” Efficient Wealth said.\n“In these tough times, consumers often turn to unsecured loans, which are not backed by any assets, which means banks charge higher interest rates to offset the risk. This usually does not end well for the borrower.”\n“The last time there was a boom in unsecured loans (between 2012 and 2014), many households ended up poorer than before because they could not keep up with the interest rates that they were being charged.”\nWith lower incomes and higher interest rates, households have been unable to purchase the goods and services they previously could afford, putting strain on the services sector and the broader economy as over 60% of GDP is attributed to private final consumption.\nEconomist Roelof Botha also highlighted this in the latest Altron FinTech Household Resilience Index (AFHRI), noting that restrictive monetary policy has placed severe pressure on South Africans, with the ratio between household disposable income and household debt costs being the worst-performing indicator.\nThings are looking up\nHowever, Efficient Wealth said that the outlook for 2024 is more positive, with inflation and food prices expected to ease.\nInterest rate cuts are also expected this year, with a possible 100 bps worth of cuts seen over the year.\n“Amidst cooling prices and the resilient nature of recovering enterprises, we are even expecting higher income growth this year. Overall, the purchasing power of households should improve, together with their standard of living, which declined during 2022 and 2023,” the group said.\n“That being said, consumers will probably only really feel the difference in 2025.”\nMoreover, despite the strain it might put on the fiscus, the creation of a basic income grant will reduce the gap between those who have jobs and those who don’t while reducing political tension as well.\nPresident Cyril Ramaphosa and the ANC will also likely use this and other policies as electioneering tools to win votes, such as the National Health Insurance (NHI).\nEven if the NHI is signed into law, it will likely be opposed in court, with this current version not seeing the light of day for many years.\nIn addition, although the President said that he intends to implement the previously announced pay increase for 1.3 million state employees, which would likely widen the budget deficit to 4.8% of GDP this year, far higher than official estimates, markets were expecting this and should not react too negatively.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business-opinion/749904/the-worst-might-be-over-for-south-african-consumers/"}
{"doc_id": "c6e7d2aa6d30351f589b3e887ae407f8", "text": "The Solidarity Research Institute (SRI) has published its latest Banking Charges report, showing how pricing at South Africa’s biggest banks compares, based on different user profiles.\nFor its 2021/22 report, Solidarity hailed online banks as the “heroes” of the year, noting that new entrants into the banking sector like TymeBank and Bank Zero are highly disruptive with zero-fee banking options and taking advantage of mobile technology to handle finances.\n“It seems that a revolution is taking place in the banking sector in that TymeBank and Bank Zero offer the same services as traditional banks, but at a fraction of the price,” the research unit said.\n“It will even be possible to do business at these banks completely free of charge if cash transactions and the sending of money to cell phone numbers are avoided.”\nThe group said that, although banks are increasingly competitive in terms of added value such as reward programmes, costs remain a determining factor. Here, it is also clear that competition in the banking sector is on the increase, it said.\n“The new online banks, which compete purely on the basis of costs, are by far the overall winners when it comes to costs alone. A list of 25 transactions that would cost between R99 and R143 at the traditional banks, costs a mere R21.50 at Tyme Bank, or R25 at Bank Zero.\n“Even when compared to the cheapest accounts of the traditional banks, those with branches, the traditional banks are lagging far behind,” Solidarity said.\nBanking fees compared\nSolidarity’s banking fee comparison is based on four different transaction profiles, split across four different groups. The 12 and 17 transaction profiles are most commonly associated with low-cost or entry-level banking; the 25 transaction profile aligns with middle-market accounts; and the 30 transaction profile for premium accounts.\nThe research unit said that for 2022, the methodology and profiles were adjusted to keep pace with changes in consumer behaviour.\n“The list of transactions includes fewer cash transactions this year. These have been replaced with sending money to cell phone numbers, as well as internet transfers. The latter is now free of charge for all accounts, except for the very simple transaction accounts. At the two online banks, internet payments are also free of charge,” it said.\nLow-cost accounts\nAmong the traditional banks’ low-cost accounts, Absa and Capitec are the cheapest, with Absa charging a total amount of R37.10 for the basket of 12 transactions. Capitec, which charges 80c more at R37.90 is in second place.\n“However, Capitec is the winner in the 17-transaction category with a total amount of R42.90 for that basket of transactions. FNB’s Easy PAYU account is in second place with a total of R54.45. Capitec is also the only one of the big five banks to offer interest on transaction accounts,” Solidarity said.\nMiddle market accounts\nFor the average middle-class consumer, typically covered by the traditional banks, FNB emerged as the overall winner with its FNB Aspire Current account.\n“Like the other accounts in this category, it is a bundled account with a fixed amount which includes a series of free transactions. FNB is by far the winner in this category because all the transactions on our list are included in the fixed amount of R99,” Solidarity said.\nStandard Bank’s MYMO Plus account takes second place, with an amount of R129.40.\nPremium banking\nFor premium – or “sophisticated” banking needs, FNB also takes top honours with its FNB Fusion Premier account, with a total cost of R236 for the list of 30 transactions.\nAbsa Premier Banking takes second place with a total amount of R242.50.\n“Both of these banks offer good value because the number of free transactions they offer is more than that of Nedbank and Standard Bank,” Solidarity said.\nDigital banks\nIn the online/digital banking segment, only four accounts are covered: TymeBank, Bank Zero, Spot Money and Discovery Bank’s Gold account.\nThese banks are online only, with no branches. They also do not have large numbers of ATMs, with substantially fewer staff members than the traditional banks. This, in turn, should limit their costs to the consumer, Solidarity said.\n“For these banks we have used the same list of transactions as for the 25-transaction profile, except that ATM withdrawals have replaced transactions at the counters of participating retailers.”\nWhile Spot Money does offer banking services, its focus is on encouraging cash-free transactions and lacks many of the more traditional transactional services. Thus it was excluded from the final comparison, the group said.\nAmong the digital banks, Discovery stands out as being relatively exorbitant compared to TymeBank and Bank Zero – however, Solidarity noted that even at R90, it is still more affordable than many of the traditional banks’ offerings.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/banking/552144/2022-banking-fees-compared-capitec-vs-fnb-vs-nedbank-vs-absa-vs-standard-bank/"}
{"doc_id": "350e632e87ba40cf1919c9c75905085e", "text": "Prof Mthuli Ncube, Zimbabwe’s Minister of Finance clearly believes in communicating and sharing ‘progress.’ Whether or not you believe what he calls progress is actually progress doesn’t matter, it is a good thing when those who hold public office have a sense of accountability enough to report back to the citizenry they serve.\nThe minister has shared four graphs that depict what he calls, “Zimbabwe Recent Economic Developments.” I am sharing the four graphs below together with the text that Ncube himself used to describe each graph including his emphasis (bold text). I then give my own personal comment to each of those graphs:\n1.Government Spending\nWhat the minister says about this\n- The central government deficit stabilized starting in September 2018, and turned into a surplus in the first 4 months of 2019\nMy comments\nWhat Ncube’s graph shows above is that so far this year, the Zimbabwean government is living within its means. You would think this is the obvious thing for governments to do but they hardly ever do this. They spend more than they get and in Zimbabwe’s case this was more detrimental because there weren’t any (external) loans to cover the deficit.\nThis is highly unsustainable. Probably the best thing Mthuli Ncube has done is to shift the government from deficit budgeting to surplus. The last time the government spent within its means was during the inclusive government with Tendai Biti in Ncube’s chair. Of course this is not really about the government spending less but also getting more from all of us primarily through the 2% transaction tax Ncube introduced last October.\n2.Government Domestic Debt\nWhat the minister says about this\n- After increasing dramatically between 2015 and August 2018, Government domestic borrowing was brought under control and the stock of public domestic debt began to decline in early 2019\nMy comments\nAs I said above, the government of Zimbabwe was for many years spending beyond its means. This was without support of external loans which meant the government was borrowing from local banks including the Reserve Bank of Zimbabwe itself.\nIn simple terms, this is bad because the government then competes with productive industry for money. This limits the amount of money that actually goes towards production. More importantly, borrowing through the central bank is what led to you and I having money we deposited as USD becoming just useless numbers called RTGS. The banking sector gave real money to the government and was left holding on to a promise that the Zimbabwean government would pay them back. Our US dollars were forever gone!\nNcube’s graph above shows that the amount of money owed to banks by the government is starting to shrink. The change is still very small but the small change at least shows that the government is paying back more than it is borrowing afresh, in essence climbing out of the hole it had dug for itself. What’s not clear though is: what currency is the government using to pay back? When they borrowed some of that money it was definitely US dollars.\n3.Money Supply\nWhat the minister says about this\n- The monetary base has remained essentially unchanged since September 2018, in line with government’s efforts to target monetary aggregates. However, there remains a high level of liquidity in the system, which should be controlled through monetary operations (7-day savings bonds) and higher domestic interest rates. Excess liquidity is contributing to exchange rate depreciation\nMy comments\nAs the average Zimbabwean now knows, too much money in the market is not a good thing. Too much money chasing too few goods is called inflation and we observe it when prices increase. In lay terms: every time the government borrowed from the Reserve Bank of Zimbabwe, money was created out of thin air. In other countries when this happens, more notes are printed.\nZimbabwe was not using its own notes (RBZ couldn’t print) so the central bank essentially just invented numbers that they pushed into the accounts of whoever the government wanted to pay. This is why there was too little of the USD to satisfy everyone. Yes some of you had deposited real USD but there were others that were paid with imaginary money that was claiming to be USD too and the result was chaos.\nThe graph there shows that the total money in the market is not increasing as much as it was in the years prior due to some of what we discussed above. However, there is still too much money in the market which was accumulating all these years and this is still a problem.\nNcube wants to solve this by making it very expensive to borrow money while at the same time very rewarding to keep money in the bank. You will probably start seeing banks offering good interest to keep your money. This is a very simplified explanation but that’s the gist of it.\nBank Deposits\nWhat the minister says about this\n- Bank deposits (a proxy for money supply) have continued to increase in 2019. However, this is due almost exclusively to valuation effects, as the $RTGS value of Nostro FCA accounts increased rapidly due to a sharp depreciation of the $RTGS. Domestic currency bank deposits have remained stable since September 2018, in line with fiscal and monetary restraint.\nMy comments\nThis graph is basically the same as the one before it except that right now its showing the amount of money in the market that’s held in bank accounts. You can see from October, the separation of accounts into RTGS and nostro. The amount that’s getting into the formal economy as real foreign currency is very low compared to money we are just recycling.\nMake no mistake, the biggest culprit that has brought us here is an undisciplined government that did not live within its means. However, we are here, what do we do? Ncube’s measures make sense on paper. The biggest challenge he faces is that we have been bitten more than once and we are 100 times more shy.\nNcube’s efforts are all but doomed because there just isn’t any confidence in the market. Added to that, there is no solid plan to increase productivity and exports while decreasing imports. The demand for forex will thus remain too high compared to supply.\nI wish I had a definite answer to whether the re-introduction of the Zim dollar is a good thing. The best answer I can offer is: it’s complicated. When a girlfriend or boyfriend changes their Facebook relationship status to “It’s complicated,” you kinda know what that means right? BUT it may just be different in your case right? That’s the best answer I can give…", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2019/06/mthuli-ncubes-four-graphs-to-show-zimbabwes-economy-is-improving/"}
{"doc_id": "2029825f1bad483b5951944596bba10f", "text": "What you need to know:\n- Climate campaigners are clamouring for an end to investment in carbon-spewing fossil fuels.\n- Launched in 2019, the project was supposed to be completed in 2022, but the Covid-19 pandemic slowed it down, said Nafiou Issaka, deputy general manager of the West African Oil Pipeline Company (WAPCO).\nGaya,\nChinese and Nigerien workers haul giant steel pipes over mounds of earth as heavily armed soldiers keep guard.\nAt Gaya in southwest Niger, near the border with Benin, the longest oil pipeline in Africa is being built.\nWith a projected length of nearly 2,000 kilometres (1,240 miles) — including 1,250 km in Niger itself — the pipeline will connect oil wells in the eastern region of Agadem, a zone troubled by deadly jihadist incursions, with the Beninese port of Seme.\nClimate campaigners are clamouring for an end to investment in carbon-spewing fossil fuels.\nBut in Niger -- the poorest country in the world according to the benchmark of the UN's Human Development Index -- this project is seen as an economic lifeline.\nThe landlocked West African state became an oil producer in 2011. The China National Petroleum Corporation (CNPC), exploiting the reserves, has been sending oil by pipeline to refineries in Zinder in south-central Niger.\nFor exports, Niger initially planned to ship crude through the Cameroonian port of Kribi via neighbouring Chad.\nIt eventually opted for the \"Beninese corridor\" terminating on the northern rim of the Gulf of Guinea.\nLaunched in 2019, the project was supposed to be completed in 2022, but the Covid-19 pandemic slowed it down, said Nafiou Issaka, deputy general manager of the West African Oil Pipeline Company (WAPCO).\nMore than 600 km of pipeline has already been laid, and Niger is on track to sell crude on the international market from next July, according to the ministry of petroleum and energy.\nMore than 700 soldiers have been deployed to ensure security for the project, though a large part of the territory it crosses has so far been spared from jihadist violence, according to a security source who asked not to be named.\n'Niger's biggest investment'\nNiger has long been a major producer of uranium, ranked in global 7th place in 2021 with a total output of 2,248 tonnes, after a year-over-year decline in the past decade, according to the World Nuclear Association.\nBut uranium revenues continue to fall and the country's leaders are banking on oil to boost the national budget, much of which is devoted to the fight against jihadists in the southeast and the west.\nSix billion dollars will be invested in the pipeline.\n\"It is Niger's biggest investment since independence\" from France in 1960, said Kabirou Zakari, who heads the ministry's oil refining division.\nFrom 2023, oil production should be increased to 110,000 barrels per day, of which 90,000 barrels will be exported, Zakari told AFP.\nOil could then \"generate a quarter of the country's GDP\" — more than 13.6 billion dollars in 2020 according to the World Bank — and \"about 50 percent of Niger's tax revenue\", compared to four percent and 19 percent respectively today, added Zakari.\nHe estimated Niger's oil reserves at around two billion barrels. According to official projections, Niger will produce 200,000 barrels per day in 2026.\nFuel smuggling\nThe Algerian oil company Sonatrach has announced an \"encouraging\" discovery of oil in Kafra, a vast area of 23,737 square kilometres (9,165 square miles) on the border with Algeria.\nThe British company Savannah Energy, a major player in the gas industry in neighbouring Nigeria, says it too has found deposits in the Agadem region, where the Chinese are already operating.\nA black market for oil products is flourishing in the capital Niamey and in other big cities. A litre of petrol (gasoline) exchanges hands for 300 FCFA (40 US cents), just under half of the price at the pump.\nOn Tuesday, Niger's President Mohamed Bazoum said fuel smuggling organised from neighbouring Nigeria had become a source of \"supply for terrorists\" and called for a crackdown.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nation.africa/africa/news/africa-s-longest-oil-pipeline-takes-shape-in-niger--3984636"}
{"doc_id": "b932212db81966120264ecd2ab4ba61f", "text": "At the dawn of a new year, the world is in the midst of several epic transitions. Economic growth patterns, the geopolitical landscape, the social contract that binds people together, and our planet’s ecosystem are all undergoing radical, simultaneous transformations, generating anxiety and, in many places, turmoil.\nFrom an economic standpoint, we are entering an era of diminished expectations and increased uncertainty. In terms of growth, the world will have to live with less. To understand the implications of this, consider the following: If the global economy grew at its pre-crisis pace (more than 5% per year) for the foreseeable future, its size would double in less than 15 years; at 3%, doubling world GDP would take about 25 years.\nThis makes a significant difference to the speed at which wealth creation occurs, with profound effects on expectations. We ignore the power of compound growth to our detriment.\nAs for uncertainty, the world’s four largest economies are currently undergoing major transitions. The US is striving to boost growth in a fractured political environment. China is moving from a growth model based on investment and exports to one led by internal demand. Europe is struggling to preserve the integrity of its common currency while resolving a multitude of complex institutional issues. And Japan is trying to combat two decades of deflation with aggressive and unconventional monetary policies.\nFor each, the formulation and outcome of complex and sensitive policy decisions implies many “unknowns,” with global interdependence heightening the risk of large unintended consequences. For example, the US Federal Reserve’s policy of quantitative easing (QE) has had a major effect on other countries’ currencies, and on capital flows to and from emerging markets.\nWhen QE was launched, it was the least flawed of the available policies, and it averted a catastrophic global depression. But its downsides are now apparent, and its abatement in 2014 could fuel further uncertainty.\nThe Fed’s QE policy, and variants of it elsewhere, have caused the major central banks’ balance sheets to expand dramatically (from $5-6 trillion prior to the crisis to almost $20 trillion now), causing financial markets to become addicted to easy money. This has led, in turn, to a global search for yield, artificial asset-price inflation, and misallocation of capital.\nAs a result, the longer QE lasts, the greater the collateral damage to the real economy. The concern now is that when the Fed begins to taper QE and dollar liquidity drains from global markets, structural problems and imbalances will resurface. After all, competitiveness-enhancing reforms in many advanced economies remain far from complete, while the ratio of these countries’ total public and private debt to GDP is now 30% higher than before the crisis.\nThis source of uncertainty coincides with weakening performance in many emerging countries. Back in 2007, emerging-market growth was expected to outpace that of advanced economies by a wide margin, before converging. Today, the advanced economies contribute more to global GDP growth than emerging countries, where growth is forecast to average 4% in the coming years.\nEconomic conditions are slowly improving in high-income countries, but a range of downward pressures may persist for years. The US economy, for example, remains stuck in a subpar recovery: inflation is too low and unemployment is too high. Official data have often been better than expected, reflecting how resilient, adaptive, and innovative the US economy is, but pre-crisis consumer-spending and growth patterns are unlikely to recur.\nImprovements in the eurozone are real but tenuous. The good news is that the disaster predicted by many pundits has been avoided, and the recession is coming to an end. But improvement does not mean resurgence: achieving the robust growth needed to reduce high unemployment, lower the debt/GDP ratio, and improve the fiscal outlook remains elusive. The greatest risk for the eurozone in the foreseeable future is not a disorderly exit by some countries, but rather a prolonged period of stagnant growth and high unemployment.\nMeanwhile, the emerging-market slowdown may well persist, particularly in the largest economies. Over the past 15 years, the BRICs (Brazil, Russia, India, and China) have achieved remarkable progress, but their reforms – including new banking regulations and currency regimes – have been among the least difficult to implement.\nSo-called second-generation reforms, which are more structural in nature, are vital to long-term growth but much more difficult to realize. Elimination of subsidies, labor market and judicial reforms, and effective anti-corruption measures are politically charged and often are blocked by powerful vested interests.\nThe global growth slowdown is taking place against a backdrop of rising economic inequality, owing to labor’s declining share of national income – a worldwide phenomenon, resulting from globalization and technological progress, that poses a serious challenge to policymakers. Systems that propagate inequality, or that seem unable to stem its rise, contain the seeds of their own destruction. But in an interdependent world, there is no obvious solution, because the high mobility of capital fuels global tax competition.\nEven in stronger-performing countries, such as the US or the United Kingdom, faster GDP growth has yet to boost real incomes. In the US, for example, median household income has fallen by more than 5% since the recovery began. More generally, lower growth is fueling popular protest and social unrest, particularly in countries that were growing rapidly (for example, Brazil, Turkey, and South Africa), owing to the impact of rising living standards on expectations.\nIn such a charged social and political context, reviving high-quality economic growth is crucial. But where will it come from? Technological progress is a distinct, but highly uncertain, possibility. Many disruptive technologies (for example, advanced robotics, next-generation genomics, energy storage, renewable energy, and 3D printing) could drive future growth, but their full potential can be realized only in the distant future.\nWith most governments facing fiscal constraints, officials are reluctant to consider projects that might increase public debt. But there is some low-hanging fruit – productive investments that would boost long-term growth and therefore pay for themselves. A focus on four areas, in particular – infrastructure, education, green energy, and sustainable agriculture – could yield high economic and social returns.\nUltimately, however, the path to sustained growth requires not just new policies, but also a new mindset. Our societies must become more entrepreneurial, more focused on establishing gender parity, and more rooted in social inclusion. There simply is no other way to return the global economy to a path of strong and sustained growth.\nBy: KLAUS SCHWAB", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/the-global-economy-in-2014/"}
{"doc_id": "2e80edce765b0e6c53d3cd61419f6d7d", "text": "You need to earn a lot to be well-off, right? Not so, says John Manyike, head of financial education at Old Mutual.\nManyike said that wealth is as much about controlling debt and spending as it is about income.\n“It sounds counter-intuitive, but if you earn a moderate salary and are free of short-term debt, you’re probably in a better financial position than someone who earns a lot of money but spends it on serving short-term debt,” he said.\nSadly, people who are completely debt-free make up a very small percentage of working South Africans, Manyike noted.\n“With increased interest rates, higher fuel and food costs and no immediate respite in sight, South Africans are feeling the pinch, now more than ever. Often during tough times the temptation can be for people to get into debt, like making day-to-day purchases on credit, but it’s at times like these that minimising your debt should be your priority.”\nThe first step towards a debt-free future is to understand the importance of managing your personal finances. Break bad old habits that get in the way of financial stability and establish new, healthier money habits.\nManyike offers five basic actions to implement right now to start a better debt-free life:\n- Review your debts and make a conscious decision to pay off the most expensive debt first. This is not necessarily the largest amount outstanding but rather the accounts that charge the highest interest rates, such as high interest-bearing credit cards and store cards. Consolidating all your debts with one single loan that pays off all your debts is another possible option to clear your counters.\n- Avoid accumulating more debt: pay for your purchases with a debit card or cash, rather than a credit card. Discipline is key.\n- If you receive an annual bonus or any other unexpected windfall, contribute part of this towards reducing your home loan or car finance, as this will reduce the amount of interest you pay overall on these longer term loans.\n- Set aside a portion of your bonus for investment over the long term, like a tax-deductible retirement annuity or an endowment fund. Also make sure you consider the various tax-free savings options that offer you your full investment return without being taxed on any of the growth you have earned.\n- List your unavoidable commitments in 2016: school fees, medical bills, inflation-adjusted insurance premiums, car services – and ensure you set aside enough to handle those expenses without financial pain.\nLastly, charging down your debts by paying more than your required monthly instalment can help you save on interest levied against your credit facility or retail account. This ensures that you are adequately equipped for possible tough economic times ahead.\n“It is better to assess and discuss your impending difficulties than to ignore the problem or wait for creditors to call you wanting to know when you are going to pay back their money,” said Manyike.\nThis article can be found on Old Mutual", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/finance/122117/good-habits-to-help-you-get-out-of-bad-debt/"}
{"doc_id": "905b320281304f5e3183bda865325ddc", "text": "Out of the abundance of the heart, the mouth speaks. So, when you hear someone talk about something incessantly, just know it’s constantly on their mind. Unless they know you would assume that and say it to trick you.\nWell, you will have to decide what you think about the Zimbabwean government’s Artificial Intelligence (AI) talk. Or more accurately, if you think the Speaker of Parliament’s views on AI are shared by his comrades.\nThe government’s budget for 2024 is nearly upon us and as is the norm, a pre-budget meeting was held. Speaker of Parliament Mudenda gave the customary keynote address and he mentioned AI more times than we anticipated.\nI think we have cause to celebrate that the meeting was not held in Victoria Falls but at the new Parliament building. That should be much cheaper than shelling out travel allowances.\nAnyway, Mudenda first discussed how the budget should seek to promote industrialisation and modernisation, create jobs, and improve access to ‘qualitative education 5.0.’ He says this qualitative education should be built on research powered by AI, innovation, science, technology, and our cultural heritage.\nYou cannot argue with that. For all its shortcomings, we should be utilising AI in our research process.\nMudenda then went on to tout AI as a major force for good. Here is a paraphrased summary of what he said.\nWe are now in the Fourth Industrial Revolution, which is driven by Artificial Intelligence (AI). AI is likely to have a big impact on all aspects of economic development. Zimbabwe needs to keep up with the rest of the world in using AI, or it will fall behind.\nAI makes e-government and e-commerce more efficient and effective. Parliament should use AI to improve its oversight, legislation, and representation roles.\nParliament should set up a Committee of the Future to guide the government and judiciary on how to use AI positively. Finland, Uruguay, South Korea, and the United Arab Emirates have already set up similar committees, and the United Arab Emirates has even set up a university dedicated to AI.\nI like his thinking here. There is a lot about AI we all don’t understand. So, while many will agree that it’s likely to have a major impact on the world, they are still not sure how they could take advantage of it themselves.\nSo, the idea to set up a Committee of the Future to look into how the government would use AI is an excellent one. I know the new committee will attract sitting allowances and other costs but I’m not bothered too much about it.\nSo, here’s hoping Parliament takes this advice to heart and does the right thing.\nThe speech (in simple English)\nHere is the full speech, summarised and paraphrased into simple English if you are so inclined.\nZimbabwe’s facing some tough challenges right now, like high inflation, unemployment, and poverty. But the 2024 Budget can help us overcome these challenges and grow our economy.\nHere are a few key areas the Budget should focus on:\n- Industrialization and modernization: We need to create jobs and reduce poverty by industrializing and modernizing our economy. The Budget should invest in infrastructure, education, and training, and create an environment where businesses can thrive.\n- Education: Education is essential for a growing economy. The Budget should invest in education at all levels and make it more affordable and accessible for everyone.\n- Research and innovation: Research and innovation are key to driving economic growth. The Budget should invest in research and development, and create an environment where innovation can flourish.\n- Cultural heritage: Zimbabwe’s cultural heritage is a valuable asset that can help us grow our economy. The Budget should invest in preserving and promoting our cultural heritage.\nOverall, the 2024 Budget should be a “people’s budget” that addresses the needs of all Zimbabweans. The government should consult with the people to get their input on the Budget, and make sure it meets their needs.\nLet’s make the Budget work for us!", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.techzim.co.zw/2023/11/govt-should-establish-committee-of-future-research-how-to-use-ai-speaker-mudenda-urges/"}
{"doc_id": "d3220ca8b0fa33e339807588dcf96ca4", "text": "When Mary-Ann Musangi Kirubi, left her job to open a restaurant, she did not know she would close it due to the Covid-19 pandemic.\nClose to three years since Covid-19 hit the country in 2020, the daughter of billionaire businessman, late Chris Kirubi, reveals that she shut down her food venture, scrapping any plans to take that path.\nShe was operating three restaurants- two chains of Secret Garden and Olpul Steakhouse at Two Rivers Mall- and a catering business.\nShe closed two of the restaurants when the government ban on people's movements and activities to contain the virus put many restaurateurs in a fix.\n“I had to let go my members of staff and sell all my assets within the restaurant business because it was difficult financially to navigate through the Covid-19 season,” she says.\n“And at the same time, I was also managing on a full-time basis, Haco Industries, as well as overseeing the other businesses within the estate.”\nHaving sat on the boards of all her father's companies even before he fell sick and passed on in 2021, Ms Musangi was a natural pick to manage the vast business empire.\nAlso read: Chris Kirubi: Tycoon who easily juggled business and pleasure\nShe opened her first business in 2011 after an early retirement from working with KCB Bank Group as the marketing director for five years.\nShe opened her first Secret Garden outlet on Riverside Drive in Nairobi. The business was however among those that suffered the terrorist attack in 2019 at the Dusit complex.\nIn February 2017, she established Olpul, an upscale steakhouse when Two Rivers Mall opened.\nThe food businesses had been born out of passion. However, she says running the outlets served her more lessons despite her years of experience in other industries.\n“I had my two children for consecutive years so I decided to retire from banking. This was supposed to be my retirement job which ended up being a lot more difficult than working in the bank. So yes, it was very different and it was born out of a passion of love of an idea and creating a concept,” she says.\nThe hospitality industry was among the worst hit by the Covid-19 pandemic.\nAt the height of the crisis, hotels and restaurants were no-go zones after the government imposed heavy restrictions including closures and limited operating hours that sharply cut revenues and forecasts showed it could take up to 2023 for the industry to recover.\nBesides the pandemic, Ms Musangi adds that running a restaurant business needs one to have good control measures and people management skills to avoid leakage, theft and navigate the industry.\n“People management is the most difficult part of navigating a business. Because you are working with a lot of people in the restaurant business, you have to be very patient to understand the people that you are working with, and be able to explain your vision, how you want things, how things need to be done, and why it will be done in a certain way, otherwise, you will not achieve.”\n“You only achieve through your people. I am only as good as my people, my team. I truly believe that 110 percent. In the restaurant business, we are working with a lot of people. That’s another big area that can be quite challenging if you don't know how to work with people.”\nMs Musangi has also previously worked for British multinational pharmaceutical GlaxoSmithKline and advertising, marketing, and public relations agency Ogilvy & Mather where she honed her skills and experience in the corporate world for over 25 years.\nAlso read: Chris Kirubi's narrow path to success\nWith a lack of hospitality experience, she says running restaurants was ‘different’ compared to the rest.\n“Yes, it was very different. …I had gone to business school. I had only worked in the business arena of fast-moving consumer goods (FMCG) and marketing, so running a restaurant was very different. I like taking on new challenges, different things and pushing myself to the next level. So I did. I went out and learned, I got a consultant to work with me, and I set up the first restaurant in 14 Riverside.”\nThe entrepreneur has scrapped any plans to open any food outlet even as economies continue to reel from the impact of the pandemic such as the spiralled inflation.\n“It was the hardest business I ever run. The restaurant business looks like it is very simple but it is actually very difficult, and very technical. So if you don't have the proper preparation for it you can end up losing a lot of money.”\n“But I enjoyed it very much. I just loved that aspect of being able to create with the chefs and also meeting people. I loved meeting new people every day at the restaurant and even today, people come up to me and say they know me; they remember me from one of my restaurants.”\nShe sold the restaurant assets less than the undisclosed invested capital and shifted to overseeing the other businesses in media, investment, marketing and technology among the entire Kirubi portfolio.\n“I sold them at a loss. When you are in business you have to be ready. You win some, you lose some. You are not going to be successful in everything,” she says.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/enterprise/chris-kirubi-heir-s-lessons-from-failed-restaurants--4116856"}
{"doc_id": "b60a0ad93ebb02c4c22cbd03afe4d9af", "text": "For those involved in the beef industry this year was a perfect storm, according to Roelie van Reenen, the supply chain executive at Beefmaster Group.\nHe said financially grain farmers had made considerable gains this year, but the profits of beef, chicken and pork industries had been knocked by foot and mouth disease (FMD), Avian flu and African Swine Fever, amongst others.\nPaul Makube, a senior agricultural economist at FNB Commercial, said they had seen a negative price growth for beef and pork with poultry mostly flat, while overall livestock slaughter fell by 8% relative to the previous quarter.\n\"The livestock sub-sector also grappled with disease outbreaks such as the avian influenza in the poultry industry by mid-quarter three and given its sheer size of 42% of total agriculture gross producer value, any decline in the sub-sector activity makes a huge dent on overall agriculture growth,\" he said.\nAccording to Trade Map, six of the nine provinces were affected by the FMD last year and temporarily halted exports to some markets, most notably China.\nAlthough South African beef exports last year did drop by 12% to 28 422 tons compared to the previous year, this was only slightly lower than the ten-year average.\nVan Reenen said FMD impacted local producers by hampering the export opportunity.\n\"FMD has now largely been contained. This should signal a warning to the industry for 2024, that we need to better manage disease outbreaks to unlock more gains for the industry.”\nSaudi Arabia was one of the countries that lifted a 21-year ban on South African beef exports.\n“This will potentially open up a huge new market for our products, although we are still waiting for trade to commence as we don’t yet have health certificates in place,” he said.\nThe Beefmaster Group said the resumption of beef exports to Saudi Arabia offered some compensation for the loss of sales in other parts of the world, due to the Middle East conflict.\n“The conflict between Israel and Gaza has impacted on tourist numbers in the surrounding areas of the Middle East, such as Jordan. This is likely going to impact beef exporters to such nations depending on if a ceasefire is reached, which at present does not seem likely,” it said.\nGoing into next year, Van Reenen said, South Africa was likely to see demand for beef to increase in China, however, this might come with unattractive pricing structures.\n\"We have already seen this play out recently in other agricultural commodities as there has been a significant decline in pricing structures for SA produce. The world's second-largest economy is struggling with a property market crisis and slow growth,” Van Reenen said.\nOver the past 20 years, South Africa had shifted from a net importer of beef to a net exporter.\n“This is a great achievement. But the playing field is much bigger now and there are more challenges on the global stage,” he added.\nThe group said high inflation, especially food price inflation, was likely to relent and there was hope that interest rates would ease next year, which would bring welcome relief to consumers and could boost demand for beef products.\nNevertheless, Van Reenen remained confident that an improved mood both locally and internationally could bode well for sales, especially if the general elections next year went well.\n\"If we are at the bottom of the cycle, there will be cause for cautious optimism in 2024. We must remember that there is a lot of work being done behind the scenes, and so there is a glimmer of hope on the horizon. Primary producers will still need to tighten their belts and keep investing in their businesses, but they can expect an increase in demand if new markets continue to open,” he said.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/beef-sector-faces-perfect-storm-as-diseases-knock-profit-fe010195-9f34-460e-9f46-855c1c5ad856"}
{"doc_id": "78708158c03ea2981bfd7556efb2fcea", "text": "SPECIAL REPORT\nAfrica has always been promising with great potentials not fully harnessed by the countries inhabiting the continent but exploited by those outside it. But with the launch of the African Continental Free Trade Area (AfCFTA) on January 1, 2021, and Nigeria signing its agreement after an initial hesitation, how will Africa’s most populous nation and largest economy on the continent fare? Bayo Akinloye examines what to expect\nIt was a grand occasion characterised by a flurry of activities. Pages of papers ruffled due to constant thumbing in the decorous hall peopled by Africa’s most powerful men. There was excitement in the air as their optimism outweighed their pessimism. A historic moment was about to climax. For the first time in many years, many African heads of state decided to become united and unified on trade terms. Africa and the world waited for the icing on the cake.\nIt was phase one of the African Continental Free Trade Area Agreement (AfCFTA) being adopted by African Union (AU) heads of state and government at its 10th Extraordinary Summit in Kigali, Rwanda, on March 21, 2018. There were graceful grins and gleeful greetings as everyone signed up for the trade agreement. In that crowd, one face became expressionless.\nIt was Nigeria’s President Muhammadu Buhari. Po-faced, he held his pen firmly. Everyone in the chamber looked with bated breath awaiting the leader of ‘Giant of Africa’ to seal the deal. But creases crowded his forehead and you could sense indiscernible threads of sweat line them up. Until that moment, as always, Nigeria was a significant player in bringing AfCFTA to life. However, at this moment, Buhari was worried. Perhaps, understandably so: he pulled out of the agreement signing ceremony at the last minute, following agitations from the private sector that the agreement would make Nigeria a dumping ground for goods and services in Africa.\nProf. Yemi Osinbajo, his deputy, later explained why the country had refused to sign the agreement, saying: “Due to the prevalence of dumping on the continent and the potential for its escalation, one may argue that free trade in Africa may not necessarily be fair. Our decision to delay the signing of AfCFTA and to extend consultations is to ensure that our participation does not adversely impact on the progress that we have made to date.”\nNot everybody agreed with him though. “Today without the CFTA, do we have dumping? Do we have smuggling? Do we have counterfeiting? They are rampant, right? This has nothing to do with the free trade agreement. For a country that is porous, whether you have a free trading agreement or not, for as long as your border patrols, laws, and implementation of policies are lacking, these sorts of things will continue to happen.\n“So, dumping happens even in developed countries and where ever there is a gap. Criminals exist everywhere, and they will look for loopholes and try to use them. This for me is a completely separate thing from a free trade agreement. It has nothing to do with it,” explained an executive at a multinational manufacturing fast-moving consumer goods company.\nEverybody Wants Nigeria on His Team\nBy July 7, 2019, in Niamey, Niger Republic, Buhari was more than ready to append his signature. It was exactly 10:47 am (as reported by the president’s spokesman, Femi Adesina) when Buhari appended his signature to the agreement at the 12th Extraordinary Summit of the African Union (AU) on the launch of the Operational Phase of the AfCFTA and thus Nigeria officially joined the free trade area.\n“Nigeria wishes to emphasise that free trade must also be fair trade,” said the president, adding, “As African leaders, our attention should now focus on implementing the AfCFTA in a way that develops our economies and creates jobs for our young, dynamic and hard-working population. I wish to assure you that Nigeria shall sustain its strong leadership role in Africa, in the implementation of the AfCFTA. We shall also continue to engage, constructively with all African countries to build the Africa that we want.”\nBy December 5, Nigeria deposited its instrument of ratification of the AfCFTA agreement, becoming the 34th member state to formally ratify the treaty. The deposit came an hour before the opening of a summit of African heads of state where they proclaimed the Johannesburg Declaration formally fixing trading to start on January 1, 2021.\n“We can confidently say that Africa is on track to deliver a commercially viable continental market on 1st January 2021,” said the AU Commission’s Trade and Industry Commissioner, Albert Muchanga, who received the instrument from a Nigerian delegation at the AUC’s headquarters in Addis Ababa.\nEverybody wants Nigeria on their team because of the sheer size of its market, population, and political swag. But what will life be like, economically, for Africa’s most populous country with the largest economy after joining the AfCFTA bandwagon?\nThe Morning AfCFTA\nThe AfCFTA agreement entered into force on May 5, 2019, after the treaty was ratified by 22 countries (the minimum number required under the treaty) out of the 54 that agreed to be members of the bloc. Eritrea is the only country that has yet to make any commitment to the continental body. Trading was earlier scheduled to start on 1 July 2020 but it was postponed for six months because of the COVID-19 pandemic.\nOn paper, the AfCFTA provides the opportunity for Africa to create the world’s largest free trade area with the potential to unite more than 1.2 billion people in a $2.5 trillion economic bloc and “usher in a new era of development.” It has the potential to generate a range of benefits through supporting trade creation, structural transformation, productive employment, and poverty reduction.\nIt is little wonder that the federal government declared January 2021 as a month to campaign for the importance of the AfCFTA in Nigeria. Nigeria’s Minister of Industry, Trade and Investment, Adeniyi Adebayo, made the declaration, calling on Nigerians, particularly industrialists to take advantage of the opportunities to promote made-in-Nigeria products.\nIn 2017, intra-African trade was estimated at $135 billion, growing by nine percent year-on-year from $124 billion in 2016. The growth was primarily driven by South Africa, Namibia, Zambia, and Nigeria, which jointly accounted for over 37 percent of intra-African trade in 2017. In 2017, Namibia and Zambia became the second and third largest contributors to intra-African trade. respectively.\nHowever, Nigeria remains one of the main drivers of intra-African trade, with its total intra-African trade growing by eight percent in 2017, from a contraction of 27 percent in 2016.\n“While there has been a recent increase in intra-African trade, the rates are still significantly lower than other continents. In order to boost economic growth and prosperity on the continent, it is imperative that African countries improve trading with each other, and invest in infrastructure to drive trade,” PwC said in a report, ‘AfCFTA: Thriving in a New Africa.’\n2030 Agenda for Sustainable Development\nAfCFTA is a flagship project of Agenda 2063 of the AU — Africa’s own development vision. It was approved by the AU Summit as an urgent initiative whose immediate implementation would provide “quick wins, impact on socio-economic development and enhance confidence and the commitment of Africans as the owners and drivers” of Agenda 2063. The expected cumulative effect of AfCFTA is to contribute to the achievement of the United Nations 2030 Agenda, in particular, to the Sustainable Development Goals, from targets for decent work and economic growth (Goal 8) and the promotion of industry (Goal 9), to food security (Goal 2) and affordable access to health services (Goal 3).\nBy supporting African industrialization and economic development, AfCFTA can also help to reduce the continent’s reliance on external resources. This would allow Africa to better finance its own development, which is recognized under Goal 17.\n“Of utmost importance, however,” said the AU, “is Goal 1 and keeping the pledge that ‘no one will be left behind… starting with the furthest behind first.’ For this, it is crucial that Governments across Africa implement measures to accompany AfCFTA, such as the African Union’s Boosting Intra-African Trade Action Plan, but also that the African private sector step up to invest in, and take advantage of, the opportunities arising from AfCFTA.”\nRegional integration is considered inevitable for economic transformation and sustainable socio-economic development on the continent, serving as a development strategy aimed at aggregating Africa’s small countries into one large market that can deliver economies of scale, improved competitiveness, foreign direct investment, and poverty reduction. In addition, it is expected to help in addressing non-economic problems such as recurring conflicts and political instability as well as increasing the continent’s bargaining power on the multilateral front.\nAfCFTA and ERGP 2017-2021\nThe cornerstone of the continental free trade agreement is the promotion of industrialization, sustained growth, and development on the continent with the expectation that it will “boost intra-African trade, stimulate investment and innovation, foster structural transformation, improve food security, enhance economic growth and export diversification, and rationalize the overlapping trade regimes of the main regional economic communities.”\nSimilarly, the broad vision of the Economic Recovery and Growth Plan (ERGP) of Nigeria is to turn around the country’s economic performance and lay the foundations for sustained inclusive growth underscoring the relationship between AfCFTA and ERGP. It is little wonder that the Nigerian Office for Trade Negotiations commissioned an independent study on the potential benefits of the AfCFTA for Nigeria.\nSignposts for AfCFTA Future\nIn the NOTN report, a total of 512 companies were polled from all geopolitical zones of the country of which 70 percent were small businesses (10-49 employees); 20 percent medium-sized businesses (50-199 employees); and 10 were large businesses (200 or more employees). A further breakdown of the companies indicated that 40 percent were manufacturers, 25 percent services businesses, and 15 percent engaged in wholesale and retail trade.\nOf the remainder, 10 percent were in agriculture and nine percent in the export sector. In terms of output, 68 percent produced final goods, 30 percent produced intermediate goods while 28 percent produced primary goods.\nAccording to the NOTN’s independent report, only 25 percent of the companies participated in international trade (exports); ranging from 19 percent of small companies to 55 percent of large companies. Overall, the rate of exporting among manufacturing companies “is very low” at 24 percent. For export destinations, nine African countries (Ghana, Cameroon, Niger, South Africa, Togo, Benin, Chad Mali, and Cote d’Ivoire) are among the top 15 export destinations for Nigerian businesses “in decreasing order of dominance,” with Ghana being the most frequent destination.\nThe silver lining in the cloud may be that Nigerian manufacturers trade more with other African countries than the rest of the world.\n“Thus, a dismantling of barriers to free trade across Africa is likely to be beneficial to Nigerian manufacturing,” the report pointed out. Sadly though, regarding the country’s business environment, 55 percent of the businesses rated it as hostile (either ‘unsupportive’ or ‘very unsupportive’); comprising 58 percent of small businesses, 46 percent of medium businesses, and 48 percent of large businesses. Power supply, access to credit, roads, taxes, and tariffs “are the top four challenges in decreasing order of importance to Nigerian businesses.”\nFor AfCFTA, Nigerian Businesses Say ‘I Do’\nAccording to the NOTN report, 69 percent of businesses believed AfCFTA would be advantageous to the country. Only 20 percent believed AfCFTA would be disadvantageous to Nigeria and 11 percent were unsure about how AfCFTA will affect the business environment. The study listed the top three advantages of the free trade area as “better business environment, promotion of local business, and business expansion.”\nOn the other hand, the top three disadvantages are the influx of sub-standard goods, discouragement of local businesses, and loss of revenue for Nigeria.\nAkpan Ekpo, a professor of Economics and Policy, University of Uyo and Chairman, Foundation for Economic Research and Training (FERT), does not think Nigeria’s ready for the AfCFTA leap.\nHe told THISDAY: “I do not think the country is ready. To benefit from any free trade arrangement, the domestic economy must be resilient to shocks, build relevant infrastructure, show signs of industrialization, and alter the structure of the economy from consumption to production. There is a need to put in place and implement policies that would enable the economy to benefit from the global value chain…the challenge is how to harmonize the policies and provide strategies on how best to implement the same for the benefit of the economy.”\nAnother economic expert did not share that pessimism. Sheriffdeen Tella, a professor of Economics at the Olabisi Onabanjo University, noted: “The government has signed the agreement and the next thing is to encourage the private sector to participate in the scheme. It is a largely private-sector scheme, not government and I am sure our private sector is already looking at the project to key into it. I read about Dangote Company already has a plan for the AfCFTA. Many other companies could be silently working on this too.”\nNo Pain, No Gain: Examining Both Sides of AfCFTA Coin\nAccording to the Lagos Chamber of Commerce and Industry Director General, Muda Yusuf, the rise or fall of AfCFTA in Nigeria will depend on the sectors.\nHe explained: “There are some sectors that would be vulnerable to this agreement. But on the whole, if Nigerian entrepreneurs have access to larger markets, it would be very advantageous to them. We are talking about a market of about 1.2 billion people. This is huge and Nigerians are generally very enterprising.”\nOverall, 78 percent of the businesses polled believed that AfCFTA would make a positive impact on local businesses; 10 percent believed that the impact would be negative while the remaining 12 percent believed it would have no impact. While 56 percent of them agreed Nigeria “does not have the infrastructure necessary to reap those benefits and gains,” there is an understanding among business leaders that the country should not wait until the infrastructure gap is fully closed before participating in the AfCFTA.\nSixty-five percent of the businesses surveyed expected AfCFTA to help them overcome their “top challenges” while 22 percent expected it to accentuate them; 34 percent of large companies expected AfCFTA to accentuate their challenges, compared to 25 percent of medium companies and 18 percent of small companies.\nThe companies that expected AfCFTA to ease their business challenges cited “improvement in the ease of doing business that they expect to accompany the trade agreement (32 percent); expected improvement in infrastructure (24 percent); and enlargement of markets for Nigerian producers 17 percent).”\nAmong exporting companies, 84 percent expected AfCFTA to increase their volume of exports.\nThat enthusiasm was shared by 91 percent of small companies and 100 percent of agriculture and trade businesses as exporters of agricultural commodities “view Nigeria as competitive within the continent and believe that CFTA will give them access to do business in African countries that are otherwise not easily accessible.”\nA one percent decrease in tariff rate imposed or faced by Nigeria in trading with the rest of Africa will increase trade in all cases by more than one percent, noted NOTN, adding that a fall in revenue in the short term due to tariff elimination by the country, as being proposed to be the aftermath of AfCFTA, would be offset by rise in revenue generated through increased trade in the longer term.\nSimilarly, a reduction of Nigeria’s weighted tariff against exports from other African countries by one percent would boost economic activity by 0.6 percent, boost non-oil revenue by 2.5 percent and improve exchange rate competitiveness by reducing the real effective exchange rate by 0.3 percent.\n“The effect of AfCFTA on welfare is positive on aggregate. A 0.05 percent welfare gain is expected, which translates to an estimated $260 million in 2018 values. The positive effect is largely driven by measures complementary to full tariff removal. Precisely 64 percent of the effect size is driven by estimates that complement full tariff removal with the removal of non-tariff barriers,” stated the report.\nIt, however, added: “AfCFTA focusing entirely on tariff removal is less beneficial to Nigeria, rather, an extension to non-tariff barriers accrues important benefits to the country. Wage effects of job creation in the CFTA are expected to be small; Nigerian agriculture will gain more in job creation than other sectors from CFTA, and the benefits will accrue mostly to unskilled workers.\n“Allocative efficiency and capital accumulation are expected to significantly improve, which will augment labour productivity. This explains the expected $447milllion in labour market gains.”\nThe labour force is expected to increase from 83.1 million in 2018 to 119 million by 2030 with new entrants increasing from 2.3 million to 3.6 million as an average of 3.3 million jobs are expected to be created annually over the period 2018-2028 (rising from 2.5 million in 2018 to 4.3 million in 2030); broad unemployment rate (discounting underemployment) is projected to decrease from 30.2 percent in 2016 to 16.7 percent in 2030 while the narrow unemployment rate is projected to drop from 11.7 percent to 6.5 percent over the same period.\nTella acknowledged that the existence of the free trade area challenges producers to be competitive, that is, producing good quality outputs; being innovative and expansive.\nHe explained: “The participants see the bigger market as an opportunity to produce more and capture a large proportion of the market with attendance growing incomes. The larger the quantity of the goods produced, the lower the unit cost. That is what free market areas provide and what producers want to take advantage of. The implication is that the expansion of the businesses means expansion in employment opportunities for the people and the subsequent increase in labour incomes.\n“So, what more is required in recession than employment generation to earn income and lift people out of poverty? The government itself will be able to get more income tax from workers which will improve its revenue.”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.thisdaylive.com/index.php/2021/01/24/the-morning-afcfta-how-new-trade-agreement-will-make-or-break-nigeria"}
{"doc_id": "0ac79f1f905d6d3620a8e6283f0795b8", "text": "Notre-Dame\n17 Apr 2023\nSaturday marks the fourth anniversary of the fire at Notre Dame Cathedral in Paris. Freshly renovated, it is to reopen again in December 2024 — \"more beautiful than ever.\"\nLatest\n23 mins ago\nThe chancellor can appoint cabinet ministers, but she cannot dismiss judges. The Basic Law divides power among the chancellor, the president, the parliament and other state institutions. The Basic Law also guarantees that Germany is a democracy.\n1 hour ago\nOdysseus remained \"in excellent health\" as it continued to orbit the moon, about 239,000 miles (384,000 kilometers) from Earth, transmitting flight data and lunar images to Intuitive Machines' mission control center in Houston, the company said Wednesday.\n1 hour ago\nA lack of alternative fuels and desire to save money keeps cruise companies from significantly reducing emissions. Critics say they could do more.\n1 hour ago\nAccording to a Wall Street Journal report, the US Securities and Exchange Commission is investigating whether ChatGPT creator OpenAI misled investors, after an alleged lack of candour from CEO Sam Altman.\n2 hours ago\nWidespread hardship is triggering anger at the tough economic medicine prescribed by President Bola Tinubu, which is translating into high cost of living for ordinary citizens. Inflation hit 30% in January; the value of the Naira has dropped dramatically.\n2 hours ago\nWith July just around the corner, is Paris ready to host the Summer Games? Mostly yes, if you listen to France's president, who was on hand this Thursday for the inauguration of the Olympic village.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://tv.guardian.ng/tag/notre-dame/"}
{"doc_id": "682d1e8bac87d8040f27250d5d640102", "text": "Editorial Comment: Fuel: Government has done its part\nYesterday we carried a story regarding the parlous fuel situation in the country. Over the past few days, the situation has deepened to crisis levels that had not been experienced lately: queues have lengthened exponentially and motorists have become desperate due to the shortage and erratic supplies of the commodity.\nA sign of this rising desperation are images of men in fuel queues engaging in brawls at fuel stations as emotions boiled over. For the first time this week police were called in to restore order.\nThe sad reality is that this need not have happened and this was the gist of our story.\nGovernment, through the Reserve Bank of Zimbabwe, has played its part. It has consistently provided foreign currency for industry players to purchase fuel.\nEvery week, Government is releasing several million dollars for the commodity so that people can drive around and producers in the different sectors of the economy can do their work.\nWe highlighted in our story how it appeared consumption of fuel in the past year — particularly between June and November — had risen dramatically, yet vehicle queues also kept growing.\nThis is the story that is yet to be told — and one which is in the national interest — the evident mismatch between what has been allocated to the fuel sector and what Zimbabweans on the ground are experiencing. And Government is taking the flak for it. Several theories have been advanced; from suppliers delivering empty tanks or water while pocketing money, to the fuel being siphoned out of the country.\nWe are not going to indulge in the conspiracy theories and outright gossip. While Government has been diligent in releasing money for fuel, the challenge is to make sure that motorists get it.\nIt is only fair and logical that since we part with hundreds of millions of dollars to order something, we ensure the said goods are received and available.\nGovernment must carry out audits and follow ups on fuel companies and hold them to account.\nThis is taxpayers’ money, and so far indications are that about 45 percent of foreign revenues go to fuel imports. That’s not small change for a country such as Zimbabwe where there are so many pressing challenges, top among them drugs and medicines. We cannot keep on putting in so much money into private consumptive expenditure, especially on petrol.\nGovernment cannot allow its noble efforts to be abused or to waste while giving political ammunition to opponents.\nThe discord between the sums released to buy fuel and the situation on the ground must be explained and corrective measures taken.\nAdditionally, Government should take measures to ensure it does not waste foreign currency on fuel.\nA cursory look at the demand and consumption of fuel shows that a majority of it goes to luxury use, with small vehicles dominating.\nIt follows that where petrol is concerned, Zimbabwe is happily burning away fuel on non-productive use.\nStrangely when there are shortages, it is these small fuel-happy cars that create a sense of crisis and chaos, along with the bad optics.\nWe suggest that Government must institute measures that discourage the happy and prodigious use of fuel while promoting productivity.\nA move to remove subsidies on petrol and incentivise mass public transport and actual productivity on the mines, farms and manufacturing needs to be considered.\nIt will save us lots of money.\nIf Government raises the cost of burning fuel for luxury it will have much less to worry about.\nWe maintain that Government has done well to procure fuel. But that has not been matched by a sense of responsibility, an issue which must now interest the authorities to ensure austerity means also reducing forex expenditure on consumptive fuel.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/editorial-comment-fuel-government-has-done-its-part/"}
{"doc_id": "990602c95a7b405bc9d8d90684fe59d5", "text": "The government is lining up several incentives for the tea sector in a bid to attract value addition.\nThe incentives, which may involve reduced taxes, are contained in a concept note developed by the Ministry of Agriculture through the Tea Board of Kenya.\nAgriculture Cabinet Secretary (CS) Mithika Linturi said the National Treasury and Economic Planning Ministry has already approved the concept note.\nIt proposes the establishment of a scheme aimed at unlocking the potential of Kenyan tea by providing both tax and other incentives necessary to make local value addition more attractive.\n“The scheme will also entail the promotion of a Kenya tea brand and enhancement of orthodox tea manufacturing for smallholder tea factories,” said the CS. He was speaking during the Kenya Tea Development Agency (KTDA) Annual Directors Conference in Nairobi on Thursday.\nThe annual event brings together over 400 directors, senior management and stakeholders of the 71 KTDA-managed tea factories spread across 16 counties.\n“Once the envisaged incentives are made available, I urge KTDA-managed tea factories to leverage the incentives to upscale their manufacture of orthodox teas and value addition at factory level instead of continuing to do bulk tea sales,” he said.\nThe CS called on smallholder tea factories to take advantage of the existing global market opportunities for orthodox teas to enhance earnings for smallholder tea farmers.\nHe said this market is currently not saturated compared to the CTC (crush tear and curl processing) market. “I am happy to note that most KTDA-managed factories have been diversifying to orthodox tea manufacturing,” he said.\n“The government through the Tea Board of Kenya will not only grant KTDA-managed factories, the licences to manufacture orthodox teas but will also enhance its promotional activities to unlock market access.” The CS urged KTDA to continue harnessing the opportunities presented by the African Continental Free Trade Area.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/amp/business/article/2001486890/value-addition-state-mulls-tax-incentives-to-spur-tea-sector"}
{"doc_id": "0929ccf03f078dcb88f0973fb9fc7f0a", "text": "Research analyst at Nomura, Peter Attard Montalto says that markets are not taking the threat to the South African Reserve Bank’s independence seriously enough, and that even if nothing changes, it could inflict major damage to the economy.\nIn an investor note sent out on Friday, Attard Montalto said that the recent move against the Reserve Bank by the public protector, aiming to change its Constitutional mandate, is happening in a very specific context:\nPresident Jacob Zuma’s ANC has its back against the wall, with a dire need for access to funds, and also somewhere to place the blame for the country’s poor economic performance.\n“The Zuma faction within the ANC sees the SARB as a blockage to more radical transformation within the financial services sector, including allowing banks to maintain too tight a set of credit standards that is seen as restricting credit from black SMEs and black industrialists, as well as not applying enough pressure to banks on black ownership and black management criteria,” the analyst said.\n“The SARB is also, through its systematic imposition of a consistent rules-based system, seen as a blockage against bank ownership by politically connected parties and a frustration at its application of exchange controls in the same vein.”\nAccording to Attard Montalto, the ANC is also currently struggling to gain traction with the narrative that the country’s low growth is the fault of the global economy or the domestic private sector.\n“As the 2019 elections approach, we expect the SARB to be set up to take the blame, facing criticism for keeping monetary policy too tight since 2008, being too inflation-focused and not targeting growth or job creation enough.”\nThe analyst said the Nomura holds the view, agreeing with the SARB, that most of the low growth is due to political, policy and regulatory uncertainty as well as a failure to push forward meaningful structural reform – not the fault of monetary policy.\nAttard Montalto said that it is unlikely that government will succeed in changing the Constitutional mandate of the SARB, as it lacks the two-thirds majority to do it, and opposition parties, even the EFF, would be loathe to support a measure that would invariably aid state capture.\nHowever, even the threat of doing so should send alarm bells ringing among investors he said.\n“A lot of damage can be done in the short term to investors’ sentiment even if there are no changes to the SARB’s objective or mandate.”\n“The problem for the SARB (and investors in the long run) is that markets are far too near-sighted here, and too willing to dismiss the threat as being too far away or unlikely to happen because of still-overestimated expectations of a Ramaphosa camp win in December,” he said.\nThis near-sightedness is a persistent problem, as was seen when Pravin Gordhan was fired earlier in the year.\n“The lack of a severely negative market reaction at the end of March between Pravin Gordhan’s recall from London and his firing a few days later did not prevent that event – so we believe that a lack of market reaction now will directly embolden the forces attacking the SARB,” the analyst said.\nEven if there is no action taken to change the SARB’s mandate, it should be seen as government putting increasing pressure on the Bank which has long had “ongoing but healthy tensions” with National Treasury in the past.\nWhile SARB is likely to fight fiercely for its independence – through the courts if it has to -it must tread very carefully, the analyst said.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/business/182923/why-the-reserve-banks-independence-is-being-threatened-now/"}
{"doc_id": "fe32f7297958a1fb568363186b419053", "text": "In a surprise move, the Central Bank of Kenya raised its benchmark interest rate by 200 basis points to 12.5 percent, the largest rate increase since 2011, amid efforts to stabilise the country’s struggling currency.\nThe move by the CBK bucks the trend of top African central banks from Nigeria to South Africa, all of whom have recently hit the brakes on rate increases.\nGhana’s central bank held its rate steady at 30 percent for the second consecutive meeting while Uganda and South Africa also held their interest rates at 9.5 percent and 8.25 percent respectively.\nRead also: Kenya offers 35 state assets for sale, another 100 to follow to shore up finances\nNigeria did not hold its scheduled meeting last month but has left its benchmark interest rate at 18.75 percent.\nThe CBK governor Kamau Thugge said the MPC concluded that there is a need to adjust the monetary policy stance to address the pressures on the exchange rate and mitigate second-round effects including from global prices.\nThe shilling has weakened by almost 20 percent against the dollar so far this year, making it one of the worst-performing currencies in Africa as investors balked at the potential repayment of a $2 billion Eurobond in June, Bloomberg reported.\nThe weakness has been despite additional financial support from the International Monetary Fund, which last month granted staff-level approval for an additional $938 million to bolster the East African nation’s reserves.\nHe said Kenya expects $1.25 billion to $1.5 billion from the World Bank, alongside as much as $500 million from the Regional Trade and Development Bank.\n“We will be getting a lot of external financing in the second half of the financial year,” he said. “So we should be able to reduce domestic borrowing quite significantly.”\n“Once we get the external financing, and also in particular the IMF funding in January, that would be liquidity into the system and that will reduce our domestic borrowing significantly,” Thugge said at a briefing following the interest rate announcement. “We are also getting some money from the World Bank Development Policy Operation, and all these amounts will help deal with the issue of the Eurobonds.”\nKenya’s consumer price inflation slowed to 6.8 percent in November from 6.9 percent the prior month. Still, the cost of imported food staples, as well as crucial commodities like oil, have become more expensive because of the strength of the dollar.\nRead also: Nigerians to benefit as Kenya mulls visa-free travel for Africans\nThe MPC noted that “exchange rate depreciation continues to exert upward pressure on domestic prices, thereby increasing the cost of living and reducing purchasing power.” It judged that currency weakness had contributed about 3 percentage points — or almost half — of November’s rise in prices.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/africa/article/kenya-bucks-africa-trend-with-biggest-rate-hike-in-over-a-decade/"}
{"doc_id": "6a25684dc6955809bb8ea2662c5a41f5", "text": "The National Treasury has published an updated FAQ guide on its renewable energy tax incentive for businesses, drawing a clear line on the inclusion of batteries and inverters in the tax break.\nThe department said that confusion has crept in because the business tax incentive was announced alongside the individual tax incentive, and each tax break has a different approach to components like batteries and inverters.\nThe individual tax break – which offers up to R15,000 in rebates for individuals who install solar – only applies to the cost of new solar panels purchased. Inverters, batteries and other costs are explicitly excluded from this.\nThe renewable energy tax break for businesses, however, allows a company looking to take advantage of the incentive to include these component costs, as long as they are part of a solar generation system.\n“Assets that are used in the generation of electricity will qualify for the incentive. This includes supporting structures on which these assets are mounted or affixed to,” Treasury said.\n“It is important that the foundation or supporting structure is designed specifically for that asset and constructed in such a manner that it is or should be regarded as being integrated with that asset; and the useful life of the foundation or supporting structure is or will be limited to the useful life of the asset mounted thereon or affixed thereto.”\nIf storage (batteries) and conversion (inverter) assets form part of a system of assets that together produce electricity – which is aligned to the objective of the incentive – it is likely that they will qualify for this renewable incentive, the department said.\nHowever, if the taxpayer is simply drawing power from the grid and storing it to reduce the impact of load shedding – a non-solar or renewable generating system – such storage assets will likely not qualify.\n“The latter example is not aligned to the policy objective of encouraging more generation capacity and should not be claimable under the proposed section 12BA. This is why it is important that SARS retains the ability to apply a facts and circumstances approach to each case,” Treasury said.\nWhy individuals won’t get a tax break for inverters and batteries\nThe department added that the personal income tax and corporate income tax systems operate differently, which is why the tax incentives can operate differently.\n“It is not common for an individual to deduct the cost of an expense or investment from their taxable income. The solar rebate is an exception to this rule and targets solar panels exclusively given that they are directly linked to additional generation capacity,” Treasury said.\nWhile batteries and inverters can be used on their own to provide a private benefit to a particular\nhousehold, the addition of solar panels enhances generation supply, which provides a public benefit.\nBy contrast, it is common for a business to deduct costs in relation to assets used in the production of income, and there is no reason to specifically exclude assets such as batteries and inverters, unless they are being used in isolation to draw and store power from the grid, as this detracts from the primary objective of the temporarily enhanced renewable energy incentive – to encourage investment in additional generation capacity.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businesstech.co.za/news/energy/734303/treasury-clears-up-confusion-over-tax-breaks-for-solar-batteries-and-inverters/"}
{"doc_id": "1effe0afa4578dee840f10147ec9e1ca", "text": "Command Agric funds accounted for: Mushohwe\nHerald Reporter\nCabinet Ministers alleging that Command Agriculture money could have been misappropriated are in the thieves, Information, Media and Broadcasting Services Minister, Dr Christopher Mushohwe said yesterday.\nMinister Mushohwe was speaking during a meeting with editors of various media houses in Harare\n“I am telling you that Command Agriculture is a Government policy. Anybody who says anything otherwise is sharing his or her personal opinion and not Government policy.\n“Those who say Command Agriculture is being run by thieves, are the thieves themselves,” he said.\n“I will give you a good example. If I go to my constituency and tell the people in my constituency that I want them to vote for me in 2018 and that I am going to come here next week and build a big dam for you they will all ululate, but it will not happen unless the Minister of Finance says yes the money is there. So, there are people who talk about things they are not supposed to talk about for one reason or another.\n“So why do you worry about individual statements, which do not contribute towards the development of our country. Musha usina benzi ndewani, ndiudze? Mungabva mati musha wese ndewemapenzi nemunhu one?”\nHigher and Tertiary Education, Science and Technology Development Minister Professor Jonathan Moyo has been denigrating Command Agriculture on his Twitter handle.\nGovernment policies, Minister Mushohwe said, were only communicated through his ministry.\nHe said all indications pointed to a bumper maize crop this year, which is good news because it means that Zimbabwe would not be importing maize this year.\nHe said the country was poised to export surplus maize this year, a feat that had eluded Zimbabwe for the past two decades due to external factors coupled with perennial droughts and the imposition of illegal economic sanctions from the West.\n“The good news is that any maize exports will contribute to both foreign currency earnings for the country and foreign currency savings as Government will no longer be compelled to import maize and other cereals, which have done well this year. We are closer to regaining our lost status as the breadbasket of the sub-region,” he said.\n“The combination of both good rains and the agricultural skills which our farmers have acquired and sharpened over time, vindicates the country’s land reform programme. It debunks the myth that the land acquisition policy which enabled Government to reclaim land, our land, from the few white colonial settlers and giving it back to its rightful owners, killed our agriculture.”\nHe said the land reform programme was meant to correct historical colonial grievance of land disenfranchisement for the Africans and empowering indigenous Zimbabweans as owners of their land.\nMinister Mushohwe said the policy was beginning to bear fruit and the results from the tobacco sector and now maize sector bore ample testimony to the efficacy of that policy decision\nDenigrating Command Agriculture, in a message on March 6 following a story published in The Herald Prof Moyo wrote on his Twitter handle: “Report by @Herald Zimbabwe that ‘Command Agric exceeds target’ is at best premature & at worst needlessly false!”\nHe went on to post on March 10 that “1 /2: Maize is on 1,3m ha: 1,1m is Presidential Input Scheme; 153,102.60ha is Command Agriculture & the rest private!”\nProf Moyo on the same date added “2 /2: Command Agriculture targeted 400 000ha, but contracted 247 035ha of which 191 124ha (77 percent) were tilled & 153 102,60ha (61 percent) were planted on!”\nOn March 11, he also wrote that, “Command is a tried & tested military concept. It is also a great in programming. But in civil matters command is an oxymoron & non- starter!”", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.herald.co.zw/command-agric-funds-accounted-for-mushohwe/"}
{"doc_id": "a30da8e709970c222b7e74a7144111a7", "text": "By Andrew Bourne\nThe information and communication technologies (ICT), finance, and real estate sectors, while not the largest industries in South Africa, are still heavyweights in their own right.\nIn 2021, the country’s ICT sector recorded R243.6 billion in revenue, while finance, real estate, and business services sectors contributed an estimated R1.09 trillion to the country’s GDP in 2022.\nIn the coming years, these industries will have a pivotal role to play in South Africa's economic development and growth, as well as the country’s ability to compete at a global level. However, a major technological bottleneck that the businesses in these sectors are facing today are modern collaboration and productivity issues that are emerging due to remote work environments maturing and turning into a permanent work option.\nA shifting workforce in need of technological reform\nNearly every organisation in every industry has undergone significant workplace transformation over the last few years. According to Zoho’s Collaboration and Productivity Trends report, 42% of South African enterprises currently employ a hybrid work model, while 2% have adopted a fully remote model in 2023.\nOnly the ICT, finance, and real estate sectors seem to offer fully remote roles in the country.\nAdditionally, 53% of employees within the ICT sector, and 46% in the finance and real estate sectors work within a hybrid environment.\nThis shows businesses in these sectors are adopting hybrid or remote work models to meet the changing expectations of employees. Some of the typical benefits of these newer work models include reduced distractions, time optimisation, greater creativity, and improved employer value proposition for companies.\nHowever, remote work environments come with their own challenges. In order to build a hybrid or remote workplace that truly works for distributed teams, organisations are pushed to employ several applications that enable employees, teams, and the company leadership to communicate easily and collaborate with one another. In fact, the Zoho report found that in the ICT sector, 50% of employees used between one and five apps, 44% used six to ten different apps, and 6% used over 11 apps on a daily basis to conduct work. Within the finance and real estate sectors, 69% of employees used one to five apps, 26% used six to ten and 6% used more than 11.\nThis kind of a 'too many apps' situation can often lead to a fragmented communication and collaboration ecosystem, leaving employees overwhelmed with digital fatigue, redundant apps, context switching, disjointed user experiences, and too much information siloed across numerous platforms. When asked about the most effective measure that can help improve the productivity of their teams, 23% and 31% of the employees from the finance and real estate industry and the ICT sector, respectively, said that having quick access to contextual, cross-application data is important. Furthermore, 36% of the employees from the ICT sector said that switching between too many apps to get work done actually puts their business at a competitive disadvantage.\nThat’s why it's important for organisations in these industries to gain a holistic view and understanding of how time is used, how people communicate and share information, and how teams function to understand what their employees truly need and identify the right tech that can help workforces collaborate effectively, hold asynchronous communication and sustain productivity levels.\nEnabling meaningful engagement\nWhen your teams are distributed and collaborating remotely, it is critical that their well-being is prioritised to prevent mental fatigue and burnout that would drive down productivity, creativity and innovation. Rather than requiring them to always be online and available, businesses should focus on, for instance, allowing them the space and trust to finish their tasks at their convenient time before the deadline.\nAsynchronous communication (communication that does not occur in real time), has a key role to play in building an effective remote collaboration setup that's also considerate towards employees' time and availability. For example, business teams should have the option to respond to requests as and when they can, and share information when it's ready. Using the right tools that offer such provisions allows employees more flexibility at work and the facility to create their own schedules that strike a balance between collaboration and independent work so that they're not bogged down by constant communication.\nIdentifying and using the right collaboration tools can positively impact business productivity\nTypical tools that a remote worker needs for their everyday work include project management systems for effective time management, digital whiteboards for spontaneous brainstorming, document storage and management systems for organised file-keeping, instant messaging tools, and other asynchronous communication tools that allow employees to share their thoughts through text chats, voice recordings, screen recordings and action items as and when they want. However, it's crucial that all these tools seamlessly interoperate to provide the user with a unified experience and smooth flow of information across different apps to enable work continuity and context.\nWith the right collaboration and communication tools, organisations in industries like ICT, finance, and real estate can facilitate more focused work with fewer interruptions and better planning, thereby empowering their workforce to unlock higher productivity levels. This can also enable increased agility and innovation for these businesses, and help them transform into power growth engines for the South African economy.\nAndrew Bourne, Regional Head - Africa at Zoho Corp.\nBUSINESS REPORT", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.iol.co.za/business-report/economy/how-and-why-the-use-of-the-right-technology-in-it-finance-and-real-estate-industries-can-fuel-growth-daee2285-7dab-4e6e-9d4d-3f556b7b01a9"}
{"doc_id": "3d56f4a1fb724b74d852e27a5ccb1009", "text": "Despite the widely accepted perception that Nigeria is exclusively an oil economy, according to a recent report by the McKinsey Global Institute, only 14 percent of Nigeria’s gross domestic product (GDP) comes from resources. While 70 percent of tax revenue and 90 percent of export revenue still come from oil and gas, retail and wholesale trade are in fact the biggest drivers of economic growth in Africa’s largest economy.\nThe report, “Nigeria’s renewal: Delivering inclusive growth in Africa’s largest economy”, claims the Nigerian consumer market is worth almost $400bn and could be worth as much as $1.4-trillion a year by 2030. Seni Adetu, former MD and CEO of Guinness Nigeria, is a leading expert on consumer behaviour in that country. He has identified four major trends shaping its consumer market in the next five years.\nFirst is the emerging middle class, with its favourable demographics in terms of population size and youthfulness. More than 60 percent of the population is less than 25 years old. A burgeoning consumer market is attracting increasing levels of foreign direct investment. This brings with it higher rates of employment and improved levels of income, which in turn drive further consumer behaviour. Adetu also highlights a significant increase in Nigerians returning from abroad, which, together with improved global communications, is accelerating the development of a brand-led consumerism in Nigeria, with links to Western products and services.\nSecond, only half of the Nigerian population is urbanised, and as urbanisation increases, so will consumption and the need for convenience purchases.\nThird, Nigeria’s large population is characterised by “Generation Y”, with the majority younger than 25. This group is more sophisticated, tech-savvy, media-literate and demanding of quality and comparative pricing. Strategies and branding need to target this market specifically and not generically.\nLast, Adetu highlights the growing relevance of women as consumers in Nigeria. Traditionally, women stayed at home to look after the household. Increasing female empowerment, which has brought with it rising employment and financial independence for women, has seen a significant increase in income and a growing female market.\nDespite seemingly endless opportunities, retailers and fast-moving consumer goods still face challenges when seeking to take advantage of this rising consumer market.\nAdetu flags the highly regulated and taxed market, the stubbornly poor state of infrastructure in Nigeria, especially rail, road, water and power supply — 90 percent of companies use back-up generators — problems with governance and corruption, as well as limited access to potentially lucrative markets in the so-called Muslim north due to insurgencies and insecurity.\nInequality is also a serious concern. For example, residents of Lagos, estimated at about 21-million people, or 12 percent of the population, earn on average twice as much as Nigerians in the rest of the country.\nThe country is further divided into 36 federal states, each with its own rules and taxes.\nThe Nigerian market is also complicated by language and culture. More than 500 local languages are spoken by the country’s 250 ethnic groups. This is a challenge to companies developing marketing and communication strategies to access the broad Nigerian market.\nRegardless of these challenges, with a GDP of $568bn, a population of about 180-million and favourable economic growth over the past decade, Nigeria is undoubtedly one of the most exciting retail prospects in Africa. But experience shows that companies need to immerse themselves in the intricacies of the market, and embrace the nuances in culture and consumer behaviour that define Nigeria today.\nLyal White & Liezl Rees\nWhite is director of the Centre for Dynamic Markets at the Gordon Institute of Business Science; Rees is the manager.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://businessday.ng/analysis/article/nigerias-tricky-retail-terrain-is-lucrative/"}
{"doc_id": "cfd6f08546706cf4543f8d1b79f7cf11", "text": "The Chief Executive of Community and Entrepreneurial Development Initiative (CEDI Ghana), Kingsley Kwaku Pinkrah has signed a Memorandum of Understanding (MOU) with Queen’s University, Leadogo Incorporated in Canada, and JACCD Design Institute Africa to create thousands of jobs for the youth in the country.\nThe MOU which was signed on Friday seeks to roll out a project dubbed Entrepreneurship Jobs for All (E-Jobs4All).\nThe scheme when set up will set the youth up to build and grow their businesses.\nIt will also provide free entrepreneurship online and in-person tuition, an exchange program, and advisory services from Queen’s University faculty members, alumni, and Canadian business experts in the Leadogo Incorporated network. Concurrently, JACCD Design Institute Africa in Accra will host the in-person training.\nSpeaking at the ceremony, a former UN Senior Economic Advisor, Professor Mohamad Abou Hamia, pledged his support for this project.\n“Today's signing of the MoU comes at a perfect time; the world has not fully recovered from the negative consequences of the terrible pandemic that hit us in early 2020. This has led to the ongoing rise in global inflation rates which will soon be followed by a severe recession, and millions of people could lose their jobs, especially in developing countries,” he shared.\nThe Deputy Minister for Employment and Labour Relations, Bright Wireko Brobbey was grateful to the partners for their support of the project.\n“[This] will equip the youth with the requisite technical and entrepreneurial skills to complement the government’s job creation efforts.”\nHe further stated that the importance of this intervention and the relevance of the project cannot be overemphasised.\n“This is because the Ghana Statistical Service per its Seventh Round of the Ghana Living Standards Survey estimates that the formal sector will not be able to generate jobs in the required numbers to absorb the growing labour force. This means that a large proportion of the population would have to be guided into the informal sector which already employs about 85% of the labour force.\nThus, he concluded that beneficiaries of the E-Jobs4All Project would have to be supported to create more employment opportunities to absorb the growing labour force both in the formal and informal sectors of the economy.”\nThe partners, Professor Greg Bavington, Executive Director of Queen’s University Dunin-Deshpande Queen’s Innovation Centre in Canada, Mr. Matt Hawskley, Chief Executive Officer of Leadogo Incorporated in Canada and Madam Joyce Ababio, President of JACCD Design Institute Africa were delighted for this great partnership which will offer opportunities for young people interested in owning their own business.\nThe project is expected to be launched soon after which the application portal will be opened for interested youth to apply.\nLatest Stories\n-\nSunyani Social Welfare Technical Institute grapples with lack of modern tools for training\n-\nPoliticians advised to shun hate speeches and abusive language\n-\nBono East Regional Secretary of GAPHTO advises drivers to avoid distracted driving\n-\nAveyime: Chinese couple fish farmers count losses; seek support after floods and burglary\n-\nArabic language quiz competition excites Old Tafo students\n-\nBurkina Faso: At least 15 dead in Catholic church attack\n-\nMorgan Heritage lead singer Peter Anthony Morgan dead\n-\nMahama chastises government for slow pace of development in new regions\n-\nPlayback: The Probe discussed Ghana’s unemployment crisis\n-\nICGC’s 40-year journey: Pastor Mensa Otabil’s testament to faith and inspiration\n-\nWorks & Housing Ministry appoints Manasseh Atta Boahene as spokesperson\n-\nMan sets himself on fire outside Israeli embassy in Washington DC\n-\nGPL 2023/24: Hearts of Oak beat RTU; Olympics triumph over Bofoakwa Tano\n-\nKMJ named as Board Member for Ohio African Community Excellence Awards USA\n-\nJurgen Klopp calls Carabao Cup win ‘absolutely insane’", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.myjoyonline.com/cedi-ghana-secures-partnerships-to-address-poverty-and-unemployment/"}
{"doc_id": "66ffe833e322cbcbdf83eb3a287382b2", "text": "The world’s largest economy is finally considering the use of digital dollars, following slow COVID-19 stimulus payments to its citizens, the U.S Congress recently heard testimonies on the usage of digital dollars to facilitate the U.S’ legacy financial infrastructure.\nJust yesterday, America’s Congressional Fintech Task Force examined Federation Accounts and the use of digital dollars in expanding financial reach in the United States.\nFormer CFTC Chairman and Co-founder of the Digital Dollar Project, J. Christopher Giancarlo, talked about the need for America to upgrade its financial system.\nHe said, “Unless we act, this coming wave of innovation will put enormous strain on our aged financial system.”\nWhat you need to know about Digital Dollar: The U.S government is presently considering a framework in creating a U.S. central bank digital currency, which would be mined through the blockchain protocol, transferred between users, and recorded in a public ledger.\nThe digital dollars would be stored in a distributed database via the internet, on an electronic computer database, within a stored-value card or virtual files.\nJ. Christopher Giancarlo spoke to Cointelegraph in advance of yesterday’s congressional hearing. He said:\n“I think the sense of immediate urgency has indeed passed and I think that provides the time for reflection on the important issue: what the crisis revealed about the shortcomings in our accounts-based banking system when it comes to the distribution of benefits and inclusion. I believe that crises always reveal different things.”\nA high ranking member of the Financial Services Committee, Patrick McHenry, asked Giancarlo to explain what digital dollars had to do with financial inclusion, to which Giancarlo responded: “It’s about on-ramps into the financial system and making them as simple and accessible as possible.”\nChairwoman of the Financial Services Committee, Maxine Waters, who is the author of a bill at the heart of today’s discussion summarized the quandary.\n“Nearly 35 million people have received paper checks, not direct deposits to their bank accounts. However, I’m concerned that the people who most likely need stimulus payments may not even be able to deposit a paper check. […] Fintech companies are stepping into the unbanked space by marketing digital wallets as low-barrier alternatives to bank accounts for U.S. consumers.”\nDownload Nairametrics App for breaking news and market intelligence.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://nairametrics.com/2020/06/12/us-government-considers-using-digital-dollars-for-future-payment/"}
{"doc_id": "7aba2a041716306ba4de6757937d0c63", "text": "The mobile lending industry is once again facing scrutiny from yet another regulatory body that is seeking to cushion consumers from exploitation by the players accused of predatory lending.\nThe Competition Authority of Kenya (CAK) said it would undertake a study on the digital credit market and consumer protection issues that dog the industry.\nThere is already push to regulate digital lenders that is gathering momentum. The Central Bank of Kenya recently said it is drafting a law that will give it powers to police the industry that currently operates in a laissez faire manner, to the detriment of borrowers.\n“CAK intends to carry out a sector study into the regulated and unregulated digital credit markets in Kenya… The main objective of the study is to identify and address potential consumer protection concerns in the digital credit markets,” said CAK in a Kenya Gazette notice yesterday.\nCAK said the study would be funded by Innovations for Poverty Action (IPA), adding that IPA together with Financial Sector Deepening (FSD-Kenya) would offer technical support.\nThe competition watchdog said among the areas that the study will specifically look into include establishing the size of the digital credit market as well as identify potential consumer protection risks and address fraud in the industry.\nOther areas include the available avenues for consumer redress whenever they have issues with the products and the companies, how the firms use their clients’ data and the degree of consumer protection.\nSharp criticism\nCAK also expects that the findings will “inform the development of policies to ensure adequate consumer protection across regulated and unregulated lenders and equal protection of all Kenyan consumers”.\nIt said it would call players to give their views and has also opened a window for the public to give their views on the industry over the next three weeks.\nDigital lenders, both the unregulated – which lend exclusively through mobile apps – as well as the regulated (those owned by banking institutions) have come under sharp criticism over high interest rates, unclear terms, uncouth loan recovery techniques and instances of alleged violation of data protection laws.\nCurrent laws restrict CBK to regulating traditional banks, which means mobile loans apps by local banks are not regulated by CBK. There is increased push to increase oversight on the digital apps especially those run by non-regulated entities, many of them foreign firms.\nNumerous borrowers have ended in bad debt cycles, borrowing from one digital lender to pay another, with the result of digging themselves deeper in debt. Loans are usually at exorbitant rates at anything between 15 per cent to 40 per cent per month. Annualised this ends rising to 400 per cent and in a few cases over 1,000 per cent. While mobile lenders owned by banks could be cheaper, there are situations where the annualised cost of their mobile loans are as high as 300 per cent.\nDigital lenders\nStay informed. Subscribe to our newsletter\nA report by a credit reference bureau last year put the defaulters at 2.5 million, some of them blacklisted by credit reference bureaus, some of them for failure to pay as little as Sh200.\nSome the digital lenders include Tala, Branch, Okash, Zenka, Pesa Pata and Okelea. Those that are operated by banks and have a degree of regulation include Commercial Bank of Africa’s M-Shwari, Absa’s Timiza and KCB Group’s KCB M-Pesa and Equity Bank’s Equitel.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.standardmedia.co.ke/article/2001363231/watchdog-probes-consumer-abuse-by-mobile-lenders"}
{"doc_id": "15968fea96882125c548b891beec63b3", "text": "Kenya Airways (KQ) has resumed direct daily flights to New York as it seeks to cash in on the summer season expected to push up demand for air travel.\nThe national carrier has been operating five daily flights on the US route since January when the demand for passengers was low as America entered into the winter season.\nKQ says the decision to ramp up the frequencies has been informed by high forward booking from passengers seeking summer tickets.\n“We have increased our frequencies to daily on the New York route because of high demand from passengers as we approach the summer season,” said the airline.\nThe move comes as a boost to the national carrier, which is fighting to fly out of the loss-making territory.\nThe daily flights to the US come at a time when Ethiopian Airlines-Africa’s largest carrier has expanded its flights to the US by adding another route to Atlanta, and reintroduction of the New York route via Abidjan, heightening competition on the route.\nThe Ethiopian carrier introduced four weekly flights on the Atlanta route last month, allowing passengers who want to fly directly to the city to avoid connecting through JFK International Airport in New York, where most airlines that have direct links with the US fly. The carrier first started serving New York from its main hub Addis Ababa via Abidjan in June 2019.\nHowever, the route was suspended in March 2020 due to Covid-19. Later, the flight resumed serving New York via Lomé starting in October 2020.\nAtlanta is Ethiopian Airlines’ sixth destination in the US besides New York, Newark, Chicago, Washington DC and cargo service to Miami.\nKQ has been struggling financially, making it rely on the Treasury for bailouts to remain afloat, with the government announcing recently it would stop funding the carrier.\nThe plan, if implemented, could save taxpayers billions of shillings spent annually to keep afloat the national carrier that last returned a profit in 2012.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://www.businessdailyafrica.com/bd/corporate/shipping-logistics/kenya-airways-resumes-daily-new-york-flights-4276200"}
{"doc_id": "83078d95c6a403cba199a80b3e780a84", "text": "<b>Vicki Robinson</b> reports on a company that has been branded as the country's flagship of broad-based black economic empowerment.\nLouisa Mojela, the chairperson and CEO of Women Investment Portfolio Holdings (Wiphold), fits me in at 4pm on a Friday after a particularly gruelling week of workshops, board meetings and ferrying her children to and from their activities. She will explain how her company maintains and measures its 250 000 empowerment beneficiaries and, in turn, its unofficial brand as the country’s flagship of broad-based black economic empowerment (BEE).\n“Wiphold is the only company that has a permanent broad-base,” says Mojela. “This means that two trusts hold an unencumbered direct shareholding in the company of 32,5% and are with us in every deal we close.”\nThe broad-based component in BEE has been pushed to the frontline of the government’s economic policy with the release of the BEE codes of practice at the end of the last year. Their purpose is to douse the perverse effects of BEE — fronting, opportunism and accumulation — and ignite the original principles of empowerment: equality, social solidarity and the public interest.\nAnd it is these latter principles that inform Wiphold’s BEE business ethic, says Mojela. “There are still BEE companies that take advantage of compiling lists of NGOs whenever there is a deal. These companies go with a broad-base for individual transactions,” she says.\nThe two Wiphold trusts are the Wiphold NGO Trust, which holds 17,5% of the company, and the Wiphold Investment Trust (15%). The NGO Trust spans at least 12 broad-based women and children focused organisations, according to the trust deeds. These include the National Baptist Church, the Young Women’s Christian Association (YWCA), People Opposing Women Abuse and various strategic trade unions including the South African Democratic Teachers Union (Sadtu) and the Democratic Nursing Organisation of South Africa.\nThe Investment Trust houses the original 18 000 investors in Wiphold in the five years leading up to the company’s listing in 1999 (the company delisted three years later).\nThe other Wiphold shares are spread between management (25%) and Old Mutual (32,5%), as a result of the company’s BEE deal with the life insurer last year. The outstanding 10% is held by a staff share scheme, which was facilitated by the company.\nWiphold’s shareholder profile is 50% black and 60% female.\nSince 2000, Wiphold has paid R51-million to its beneficiaries (through the two trusts) and to 1 200 direct Wiphold beneficiaries who bought shares in the company when it made its first public offer to women in 1997.\n“The only governing principle of the two trusts is that the organisations they benefit must be associated with programmes that benefit women and children,” says Mojela.\n“Wiphold helps us a lot,” says Malerato Badenhorst, the CEO of Thusanang Development and Training Project based in the North West, Free State and Gauteng and one of the organisations in the Wiphold NGO Trust. “We received R50 000 last year, which has benefited about 300 women directly and 1 800 indirectly.”\nDuncan Andrews, the director of Thandanani Association in Pietermaritzburg, which assists abused women, concurs. “The character that makes our relationship with Wiphold unique is that they don’t make excessive demands on us. They don’t ask for reports on how we spend the money, which places a lot of trust in us.”\nAlice Ntisa, the CEO of the Tshepang Educare Trust in the Free State, says 308 women and 6 000 children benefited directly from the R75 000 the trust received from Wiphold last year.\nThe YWCA used R100Â 000 it received from Wiphold last year to fund two projects: home-based care and a project against domestic violence.\nThe South African Transport and Allied Workers Union (Satawu) is listed as a beneficiary in the NGO Trust deed. However, it is not a beneficiary. There appears to be misunderstanding as to why this is the case. Satawu insists that it declined an offer from Wiphold in 2002 to join the company as a trust beneficiary, but Mojela says the trade union broke off its allegiance with the company in protest against Wiphold’s involvement last year in the Elephant Consortium deal to acquire a stake in Telkom.\nAt the time of the deal, there was an outcry when it emerged that Sadtu would benefit through its stake in the company through the NGO Trust. One of the reasons the trade union movement was up in arms was because the main funder of the deal was the Public Investment Commission.\nTina Thiart, finance officer at the Women’s Hope and Education Trust in Cape Town (also listed as a beneficiary), says it has never received a payment from Wiphold, but has received incremental “personal donations from [the CEO of subsidiary Wipcapital, Gloria] Serobe “.\nAccording to Mojela, Wiphold carries out annual audits of the organisations and NGOs they benefit “to ensure we’re not funding ghosts”.\nShe says the only restriction Wiphold puts on its beneficiary organisations is that they “do not find themselves competing with Wiphold” both in the company’s core business — financial services — and in other BEE deals. “We can’t be in deal A and find they’re in deal B,” she says.\nMojela and Serobe have to be credited with turning the company’s fortunes around when it began floundering in 1999, soon after the company listed with a market capitalisation of R804-million.\nAccording to an article in the Financial Mail, there were two reasons the company began to lose steam: “Its BEE profile had been diluted by institutional shareholders and, just as the financial service sector was experiencing a shakeout, it announced its intention to launch a niche financial services operation.” (Ironically, it was this that would later give Wiphold the edge in the Old Mutual empowerment deal, which was concluded in April last year.)\nSerobe rejoined Wiphold in 2001 after her five-year contract as executive director of finance at Transnet came to an end. “We went underground, avoided the press, and restructured the company,” Serobe said in an interview with Financial Mail last year. “We delisted and, with financial backing from Old Mutual, bought out all our shareholders.” (The original 18 000 investors were eventually brought back into the company through the Wiphold Investment Trust.)\nPulled back from the cusp, Wiphold proved its muscle in the financial services sector with the conclusion of two headline-grabbing BEE deals — Old Mutual and the Elephant Consortium.\nIn April last year, Wiphold bought small stakes in the local and London listed arms of Old Mutual and its two local subsidiaries — 0,7% of Old Mutual Plc, 1,75% of Old Mutual South Africa, 0,9% of banking group Nedcor and 3,5% of short-term insurer Mutual & Federal. It was a harbinger for women-led BEE transactions.\nIn May, a consortium led by Serobe, called Buffalo, secured a 3,3% stake in Telkom. Beyond bolstering the company’s bottom line, these deals serve to “galavanise the purchasing power of women and that’s an inspiration,” says Mojela.\nIn addition to its new stakes in Old Mutual, Wiphold’s financial services interests extend to Futuregrowth Asset Management, of which it owns 73% through Wipcapital, stockbrokerage Legae Securities (49%) and Wip Treasury Solutions (74%).\nDespite their proven success, Mojela says women still have to fight much harder to be heard in the boardroom. “While some companies are very progressive, there are others that are dogged by determination not to have women. Women bring softness to business that is essential. While we understand that business is about business, business is also about dealing with human beings.”\nBut it’s all in a day’s work for Mojela: she describes balancing life at the office and family as a “nice challenge”.\n“I love them both equally, which means I can’t compromise on either,” she says.", "source": "cc", "stratum": "cc", "fetch_date": "", "url": "https://mg.co.za/article/2006-02-14-cracking-the-wiphold/"}
{"doc_id": "b665d901e6c9e543c436e0bb4679869b", "text": "6-K 1 a6375f.htm ISSUANCE OF SENIOR UNSECURED NOTES a6375f FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of September HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F 25 September 2024 HSBC HOLDINGS PLC ISSUANCE OF SENIOR UNSECURED NOTES On 25 September 2024, HSBC Holdings plc issued EUR1,500,000,000\n3.445% Fixed to Floating Rate Notes due 2030 and EUR1,500,000,000\n3.834% Fixed to Floating Rate Notes due 2035 (together, the\n' Notes ') under its Debt Issuance\nProgramme. Application will be made to list the Notes on the Official List of\nthe Financial Conduct Authority and to trade the Notes on the Main\nMarket of the London Stock Exchange plc. Investor enquiries to: Greg Case +44 (0) 20 7992 3825 investorrelations@hsbc.com Media enquiries to: Press Office +44 (0) 20 7991 8096 pressoffice@hsbc.com Note to editors: HSBC Holdings plc HSBC Holdings plc, the parent company of HSBC, is headquartered in\nLondon. HSBC serves customers worldwide from offices in 60\ncountries and territories. With assets of US$2,975bn at 30 June\n2024, HSBC is one of the world's largest banking and financial\nservices organisations. DISCLAIMER - INTENDED ADDRESSEES The Notes have not been and will not be registered under the United\nStates Securities Act of 1933, as amended (the ' Securities\nAct '), or any state securities\nlaws and, unless so registered, may not be offered or sold within\nthe United States or to, or for the account or the benefit of, US\npersons, as defined in Regulation S under the Securities Act,\nexcept pursuant to an exemption from or in a transaction not\nsubject to the registration requirements of the Securities Act and\nin compliance with any applicable state securities\nlaws. ends/all SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n25 September 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424012272/a6375f.htm"}
{"doc_id": "79cf4a6c43fdc2c6cb5699462dd3334c", "text": "6-K 1 a9689h.htm 2024 AGM - DOCUMENTS AVAILABLE AT NSM a9689h FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of March HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F HSBC HOLDINGS PLC (the \"Company\") 22 March 2024 Notice of Annual General Meeting (\"AGM\") and ancillary\ndocuments Notice of the 2024 AGM In accordance with the UK Listing Rules the Company announces that\ncopies of the following documents have been submitted to the\nNational Storage Mechanism, and will be shortly available for\ninspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism . ● Notice\nof the 2024 AGM; and ● Form\nof Proxy for the 2024 AGM; A copy of the Notice of 2024 AGM is also available on the Company's\nwebsite: www.hsbc.com/agm .\nThe 2023 Annual Report and Accounts was published on 21 February\n2024 and is available to view on the Company's\nwebsite: www.hsbc.com/results . 2024 AGM The 2024 AGM of HSBC Holdings plc will be held at the\nInterContinental London O2, 1 Waterview Drive, London, SE10 0TW,\nUnited Kingdom and electronically at 11:00am London time (6:00pm\nHong Kong time) on Friday, 3 May 2024. Shareholders wishing to\nattend the AGM electronically should follow the instructions set\nout in the Notice of 2024 AGM. Shareholders may submit Form of Proxy for the 2024 AGM\nelectronically at www.hsbc.com/proxy . Shareholders should monitor the Company's website\nat www.hsbc.com/agm and\nstock exchange announcements for the latest information on any\nadditional procedures that may be in place at the AGM or any\nchanges to the current arrangements. For any queries related to this notification, please\ncontact: Lee Davis Corporate Governance & Secretariat shareholderquestions@hsbc.com SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n22 March 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424003511/a9689h.htm"}
{"doc_id": "fb5377068154cf24a6f9fc5f0c4018b4", "text": "6-K 1 a8631m.htm DIRECTOR DECLARATION a8631m FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of May HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F 1 May 2024 HSBC HOLDINGS PLC DIRECTOR DECLARATION In accordance with UK Listing Rule 9.6.14 R(2), HSBC Holdings plc\n(the 'Company') confirms that José Antonio Meade\nKuribreña, a non-executive Director of the Company, has been\nappointed as an independent member of the Technical Committee,\nwhich is equivalent to a board of directors, of Fibra Uno\nAdministracion SA de CV, with effect from 26 April\n2024. For and on behalf of HSBC Holdings plc Aileen Taylor Group Company Secretary and Chief Governance Officer Investor enquiries to: Neil Sankoff     \n                   \n   +44 (0) 20 7991\n5072 investorrelations@hsbc.com Media enquiries to: Kirsten\nSmart                           \n+44 7725 733\n311 pressoffice@hsbc.com Notes to editors: 1. The Board of Directors of HSBC Holdings plc as at the date of\nthis announcement comprises: Mark Edward Tucker*, Noel Paul Quinn, Geraldine Joyce\nBuckingham†, Rachel Duan†, Georges Bahjat Elhedery,\nDame Carolyn Julie Fairbairn†, James Anthony Forese†,\nAnn Frances Godbehere†, Steven Craig Guggenheimer†, Dr\nJosé Antonio Meade Kuribreña†, Kalpana Jaisingh\nMorparia†, Eileen K Murray†, Brendan Robert\nNelson†, David Thomas Nish† and Swee Lian\nTeo†. * Non-executive Group Chairman † Independent non-executive Director 2. HSBC Holdings plc HSBC Holdings plc, the parent company of HSBC, is headquartered in\nLondon. HSBC serves customers worldwide from offices in 62\ncountries and territories. With assets of\nUS$3,001bn at 31 March 2024, HSBC is one of the world's largest\nbanking and financial services organisations. ends/all SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n01 May 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424005391/a8631m.htm"}
{"doc_id": "3973482e14047c3a169fc74945bce9e5", "text": "6-K 1 a7411r.htm TOTAL VOTING RIGHTS a7411r FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of December HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F HSBC HOLDINGS PLC 31 December 2024 Voting Rights and Capital The following notification is made in accordance with the UK\nFinancial Conduct Authority Disclosure Guidance and Transparency\nRule 5.6.1. On 30 December 2024, the issued share capital of HSBC Holdings plc\nwas 17,947,413,956 ordinary shares of US$0.50. No shares are held\nin treasury. Therefore, the total number of voting rights in HSBC Holdings plc\nis 17,947,413,956. This figure for the total number of voting\nrights may be used by shareholders as the denominator for the\ncalculations by which they will determine if they are required to\nnotify their interest in, or a change to their interest in, HSBC\nHoldings plc under the Financial Conduct Authority's Disclosure\nGuidance and Transparency Rules and/or under Part XV of the Hong\nKong Securities and Futures Ordinance. Any such notification should be\nsent to investorrelations@hsbc.com and\nshareholderquestions@hsbc.com. Lee Davis Corporate Governance & Secretariat shareholderquestions@hsbc.com +44 (0)20 7991 8888 SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n31 December 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424016002/a7411r.htm"}
{"doc_id": "d3a52a968af0e58c4597bc92619aa259", "text": "6-K 1 a6592a.htm NOTICE OF REDEMPTION a6592a FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of September HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or\nForm 40-F). Form\n20-F X Form 40-F NOTICE OF REDEMPTION Dated 24 September 2025 US$1,750,000,000 7.336% Fixed Rate/Floating Rate Senior Unsecured\nNotes due 2026 (CUSIP No. 404280DQ9; ISIN: US404280DQ93)* (the\n'Securities') * No representation is made as to the correctness of such numbers\neither as printed on the Securities or as contained in this Notice\nof Redemption, and reliance may be placed only on the other\nidentification numbers printed on the Securities, and the Par\nRedemption (as defined below) shall not be affected by any defect\nin or omission of such numbers. To:      The Holders of the Securities The New York Stock Exchange NOTE: THIS NOTICE CONTAINS IMPORTANT INFORMATION THAT IS OF\nINTEREST TO THE REGISTERED HOLDERS AND BENEFICIAL OWNERS OF THE\nSECURITIES. IF APPLICABLE, ALL DEPOSITORIES, CUSTODIANS, AND OTHER\nINTERMEDIARIES RECEIVING THIS NOTICE ARE REQUESTED TO EXPEDITE\nRE-TRANSMITTAL TO THE REGISTERED HOLDERS AND BENEFICIAL OWNERS OF\nTHE SECURITIES IN A TIMELY MANNER. The Securities have been issued pursuant to an indenture dated as\nof 26 August 2009 (as amended or supplemented from time to time,\nthe ' Base\nIndenture '),\nbetween HSBC\nHoldings plc, as issuer (the ' Issuer '),\nThe Bank of New York Mellon, London Branch, as trustee (the\n' Trustee '),\nand HSBC Bank USA, National Association, as paying agent and\nregistrar (' HSBC Bank\nUSA '), as\nsupplemented and amended by a twenty-seventh supplemental indenture\ndated as of 3 November 2022 (the ' Twenty-Seventh\nSupplemental Indenture ' and, together with the Base\nIndenture, the ' Indenture ')\namong the Issuer, the Trustee and HSBC Bank USA as paying agent,\nregistrar and calculation agent. Capitalised\nterms used and not defined herein have the meanings ascribed to\nthem in the Indenture. The Issuer\nhas elected to\nredeem the Securities\nin whole in accordance\nwith the terms of the Indenture and the Securities (the\n' Par\nRedemption '). Pursuant to Section 11.04 of the Base Indenture and Sections 2.01,\n2.02, 3.01, 3.02, 4.01 and 4.02 of the Twenty-Seventh Supplemental\nIndenture, the Issuer hereby provides notice of the following\ninformation relating to the Par Redemption: ● The\nredemption date for the Securities shall be 3 November 2025\n(the ' Redemption Date ' ). ● The\nredemption price for the Securities shall be US$1,000 per US$1,000\nprincipal amount of the Securities (the ' Redemption\nPrice '). ● Additionally,\nin accordance with the terms of the Indenture, as the Redemption\nDate is an Interest Payment Date all accrued but unpaid interest\nfrom (and including) 3 May 2025 to (but excluding) the Redemption\nDate will be payable to the holders of record of the Securities as\nof 19 October 2025, the Regular Record Date (the\n' Interest\nPayment '). ● Subject\nto any conditions and/or the limited circumstances contained in the\nTwenty-Seventh Supplemental Indenture, on the Redemption Date the\nRedemption Price and the Interest Payment shall become due and\npayable upon each such Security to be redeemed and interest thereon\nshall cease to accrue on and after such date. ● Securities\nshould be surrendered at the registered office of HSBC Bank USA at\n66 Hudson Boulevard East, 545W9, New York, NY 10001, Attention:\nIssuer Services. Questions relating to this Notice of Redemption should be addressed\nto HSBC Bank USA via e-mail at CTLANYDealManagement@us.hsbc.com, at\nits registered office or via telephone at +1 201 217\n8417. IMPORTANT TAX INFORMATION EXISTING US FEDERAL INCOME TAX LAW MAY REQUIRE BACKUP WITHHOLDING\nOF 24% OF ANY PAYMENTS TO HOLDERS PRESENTING THEIR SECURITIES FOR\nPAYMENTS WHO HAVE FAILED TO FURNISH A TAXPAYER IDENTIFICATION\nNUMBER CERTIFIED TO BE CORRECT UNDER PENALTY OF PERJURY ON A\nCOMPLETE AND VALID INTERNAL REVENUE SERVICE ('IRS') FORM W-9 OR\nAPPLICABLE FORM W-8 TO THE APPLICABLE PAYER OR WITHHOLDING AGENT.\nHOLDERS MAY ALSO BE SUBJECT TO PENALTIES FOR FAILURE TO PROVIDE\nSUCH NUMBER. Investor enquiries to: Greg\nCase                   \n+44 (0) 20 7992\n3825                 investorrelations@hsbc.com Media enquiries to: Press Office\n               \n+44 (0) 20 7991 8096 pressoffice@hsbc.com Note to editors: HSBC Holdings plc HSBC Holdings plc, the parent company of HSBC, is headquartered in\nLondon. HSBC serves customers worldwide from offices in 57\ncountries and territories. With assets of US$3,214bn at\n30 June 2025, HSBC is one of the world's largest banking\nand financial services organisations. ends/all SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n24 September 2025", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495425011054/a6592a.htm"}
{"doc_id": "2530c9d0c6a52ee06b3f6fa97c1f923a", "text": "6-K 1 a0905f.htm 3Q 2025 EARNINGS RELEASE ZOOM MEETING a0905f FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of October HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or\nForm 40-F). Form\n20-F X Form 40-F 28 October 2025 HSBC HOLDINGS PLC 3Q 2025 EARNINGS RELEASE ZOOM MEETING HSBC will be holding a Zoom meeting today for investors and\nanalysts, hosted by Pam Kaur, Group Chief Financial\nOfficer. A copy of the presentation to investors and analysts is\nattached and is also available to view and download\nat: https://www.hsbc.com/investors/results-and-announcements/all-reporting/group Click on, or paste, the following link into your web browser, to\nview the associated PDF document http://www.rns-pdf.londonstockexchange.com/rns/0882F_1-2025-10-28.pdf Full details of how to access the Zoom meeting appear below and can\nalso be found at www.hsbc.com/investors/results-and-announcements . Time: 7.45am\n(London); 3.45pm (Hong Kong); and 2.45am (New\nYork). Webcast: https://hsbc.zoom.us/webinar/register/WN_H0oAFGJZRYqdkqY5dVIF5Q#/registration Replay access details from 29 October 12.00pm GMT - 30 November\n2025 12.00pm GMT Please find replay details here: https://www.hsbc.com/investors/results-and-announcements Note to editors: HSBC Holdings plc HSBC Holdings plc, the parent company of HSBC, is headquartered in\nLondon. HSBC serves customers worldwide from offices in 57\ncountries and territories. With assets of US$3,234bn at\n30 September 2025, HSBC is one of the world's largest\nbanking and financial services organisations. ends/all SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n28 October 2025", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495425012268/a0905f.htm"}
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2025-12-31 As filed with the Securities and Exchange Commission on February 26, 2026. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark one) ¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year en ded December 31 , 2025 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report ____________ For the transition period from N/A to N/A Commission file number: 001-14930 HSBC Holdings plc (Exact name of Registrant as specified in its charter) N/A United Kingdom (Translation of Registrant’s name into English) (Jurisdiction of incorporation or organization) 8 Canada Square London E14 5HQ United Kingdom (Address of principal executive offices) Jonathan Bingham 8 Canada Square London E14 5HQ United Kingdom Tel 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(US404280CF48) HSBC30B New York Stock Exchange 2.848% Fixed Rate/Floating Rate Senior Unsecured Notes due 2031 (US404280CH04) HSBC31 New York Stock Exchange 2.357% Fixed Rate/Floating Rate Senior Unsecured Notes due 2031 (US404280CK33) HSBC31A New York Stock Exchange 2.013% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280CL16) HSBC28B New York Stock Exchange 1.589% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 (US404280CM98) HSBC27 New York Stock Exchange 1.750% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 (XS2322315727) HSBC27A New York Stock Exchange 2.804% Fixed Rate/Floating Rate Senior Unsecured Notes due 2032 (US404280CT42) HSBC32 New York Stock Exchange 2.206% Fixed Rate/Floating Rate Senior Unsecured Notes due 2029 (US404280CV97) HSBC29A New York Stock Exchange 2.251% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 (US404280CX53) HSBC27B New York Stock Exchange 2.871% Fixed Rate/Floating Rate Senior Unsecured Notes due 2032 (US404280CY37) HSBC32A New York Stock Exchange 4.762% Fixed Rate/Floating Rate Subordinated Unsecured Notes due 2033 (US404280DC08) HSBC33 New York Stock Exchange 4.755% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280DF39) HSBC28C New York Stock Exchange 5.210% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280DG12) HSBC28D New York Stock Exchange 5.402% Fixed Rate/Floating Rate Senior Unsecured Notes due 2033 (US404280DH94) HSBC33A New York Stock Exchange 7.35% Subordinated Notes due 2032 (US404280DJ50) HSBC32B New York Stock Exchange 7.625% Subordinated Notes due 2032 (US404280DK24) HSBC32C New York Stock Exchange 6.5% Subordinated Notes Due 2036 (US404280DL07) HSBC36A New York Stock Exchange 6.5% Subordinated Notes Due 2037 (US404280DM89) HSBC37A New York Stock Exchange 6.8% Subordinated Notes Due 2038 (US404280DN62) HSBC38A New York Stock Exchange 7.390% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280DR76) HSBC28E New York Stock Exchange 8.113% Fixed Rate/Floating Rate Subordinated Unsecured Notes due 2033 (US404280DS59) HSBC33B New York Stock Exchange 6.161% Fixed Rate/Floating Rate Senior Unsecured Notes due 2029 (US404280DU06) HSBC29B New York Stock Exchange 6.254% Fixed Rate/Floating Rate Senior Unsecured Notes due 2034 (US404280DV88) HSBC34 New York Stock Exchange 6.332% Fixed Rate/Floating Rate Senior Unsecured Notes due 2044 (US404280DW61) HSBC44A New York Stock Exchange 6.547% Fixed Rate/Floating Rate Subordinated Unsecured Notes due 2034 (US404280DX45) HSBC34A New York Stock Exchange 5.887% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 (US404280DZ92) HSBC27C New York Stock Exchange Floating Rate Senior Unsecured Notes due 2027 (US404280DY28) HSBC27D New York Stock Exchange 6.800% Fixed Rate/Floating Rate Senior Unsecured Notes due 2031 (XS2685873908) HSBC31B New York Stock Exchange 7.399% Fixed Rate/Floating Rate Subordinated Unsecured Notes due 2034 (US404280EC98) HSBC34B New York Stock Exchange 5.546% Fixed Rate/Floating Rate Senior Unsecured Notes due 2030 (US404280ED71) HSBC30C New York Stock Exchange 5.719% Fixed Rate/Floating Rate Senior Unsecured Notes due 2035 (US404280EE54) HSBC35 New York Stock Exchange 5.597% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280EF20) HSBC28F New York Stock Exchange 5.733% Fixed Rate/Floating Rate Senior Unsecured Notes due 2032 (US404280EG03) HSBC32D New York Stock Exchange 5.874% Fixed Rate/Floating Rate Subordinated Unsecured Notes due 2035 (US404280EL97) HSBC35A New York Stock Exchange 5.130% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280EM70) HSBC28G New York Stock Exchange 5.286% Fixed Rate/Floating Rate Senior Unsecured Notes due 2030 (US404280EN53) HSBC30D New York Stock Exchange Floating Rate Senior Unsecured Notes due 2028 (US404280EK15) HSBC28H New York Stock Exchange Floating Rate Senior Unsecured Notes due 2030 (US404280EP02) HSBC30E New York Stock Exchange 4.899% Fixed Rate/Floating Rate Senior Unsecured Notes due 2029 (US404280EQ84) HSBC29C New York Stock Exchange 5.130% Fixed Rate/Floating Rate Senior Unsecured Notes due 2031 (US404280ER67) HSBC31C New York Stock Exchange 5.450%  Fixed Rate/Floating Rate Senior Unsecured Notes due 2036 (US404280ES41) HSBC36B New York Stock Exchange Floating Rate Senior Unsecured Notes due 2029 (US404280ET24) HSBC29D New York Stock Exchange Floating Rate Senior Unsecured Notes due 2031 (US404280EU96) HSBC31D New York Stock Exchange 5.240%  Fixed Rate/Floating Rate Senior Unsecured Notes due 2031 (US404280EW52) HSBC31E New York Stock Exchange 5.790% Fixed Rate/Floating Rate Senior Unsecured Notes due 2036 (US404280EX36) HSBC36C New York Stock Exchange Floating Rate Senior Unsecured Notes due 2031 (US404280EZ83) HSBC31F New York Stock Exchange 5.741% Fixed Rate/Floating Rate Subordinated Unsecured Notes due 2036 (US404280FB07) HSBC36D New York Stock Exchange 4.619% Fixed Rate/Floating Rate Senior Unsecured Notes due 2031 (US404280FE46) HSBC31G New York Stock Exchange 5.133% Fixed Rate/Floating Rate Senior Unsecured Notes due 2036 (US404280FG93) HSBC36E New York Stock Exchange Floating Rate Senior Unsecured Notes due 2031 (US404280FF11) HSBC31H New York Stock Exchange * Not for trading, but only in connection with the registration of American Depositary Shares. Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: Ordinary Shares, nominal value US$0.50 each 17,175,239,862 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. þ Yes ¨ No If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ¨ Yes þ No Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Emerging growth company ¨ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. † The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨ Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP ¨ International Financial Reporting Standards þ Other ¨ as issued by the International Accounting Standards Board If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. ¨ Item 17 ¨ Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes þ No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ¨ Yes ¨ No HSBC Holdings plc Annual Report on Form 20-F Opening up a world of opportunity HSBC is one of the largest banking and financial services organisations in the world. Guided by our purpose of opening up a world of opportunity, our ambition is to become the world’s most trusted bank globally, putting customers at the heart of everything we do. In this year’s report 1 Cautionary statement regarding forward-looking statements 2 Additional cautionary statement regarding ESG data, metrics and forward-looking statements 3 Certain defined terms Strategic report 5 Highlights 7 Who we are 8 Group Chairman’s shareholder letter 10 Group CEO’s shareholder letter 12 Our strategy 15 Financial overview 19 Business segments 28 ESG overview 30 Risk overview Environmental, social and governance (‘ESG’) review 33 Environmental 51 Social 57 Governance Financial review 65 Financial summary 88 Business segments and legal entities 106 Alternative performance measures 111 Other information Risk review 119 Our approach to risk 121 Top and emerging risks 126 Risk factors 138 Our material banking risks Corporate governance report 220 Biographies of Directors and senior management 233 Board committees 249 Directors’ remuneration report Financial statements 286 Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of HSBC Holdings plc (PCAOB ID 876 ) 288 Financial statements 300 Notes on the financial statements Additional information 382 Shareholder information 394 Abbreviations This Strategic Report was approved by the Board on 25 February 2026. Brendan Nelson Group Chairman A reminder The currency we report in is US dollars. Our approach to ESG reporting We embed our ESG reporting and Task Force on Climate-related Financial Disclosures (‘TCFD’) within our Annual Report and Accounts. Our TCFD disclosures are highlighted with the following TCFD symbol: Use of alternative performance measures We supplement our IFRS Accounting Standards figures with non-IFRS Accounting Standards measures used by management internally that constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations. These measures are highlighted with the following symbol: ø Ñ Further explanation may be found on page 65 . Financial targets For our financial targets, medium-term is defined as between three to five years, and long term as five to six years, from 1 January 2026. Ñ See page 6 for details on our forward guidance and outlook. None of the websites referred to in this Form 20-F for the year ended 31 December 2025 (the ‘Form 20-F’) (including where a link is provided), and none of the information contained on such websites, are incorporated by reference in this report. HSBC Holdings plc Annual Report on Form 20-F 1 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Cautionary statement regarding forward-looking statements This Form 20-F contains certain forward-looking statements with respect to HSBC’s financial condition; results of operations and business, including the strategic priorities; financial, investment and capital targets; and ESG ambitions, targets and commitments described herein. Statements that are not historical facts, including statements about HSBC’s beliefs and expectations, are forward-looking statements. Words such as ‘may’, ‘will’, ‘should’, ‘expects’, ‘targets’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, ‘potential’ and ‘reasonably possible’, or the negative thereof, other variations thereon or similar expressions are intended to identify forward-looking statements. These statements are based on current plans, information, data, estimates and projections, and therefore undue reliance should not be placed on them. Forward-looking statements speak only as of the date they are made. HSBC makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statements. Written and/or oral forward- looking statements may also be made in the periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, offering circulars and prospectuses, press releases and other written materials, and in oral statements made by HSBC’s directors, officers or employees to third parties, including financial analysts. Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statement. These include, but are not limited to: – changes in general economic conditions in the markets in which we operate, such as new, continuing or deepening recessions, prolonged inflationary pressures and fluctuations in employment levels and the creditworthiness of customers beyond those factored into consensus forecasts; the Russia-Ukraine war, further conflict or military action in the Middle East or elsewhere and their impact on global economies and the markets where HSBC operates, which could have a material adverse effect on (among other things) our financial condition, results of operations, prospects, liquidity, capital position and credit ratings; deviations from the market and economic assumptions that form the basis for our ECL measurements (including, without limitation, as a result of the Russia-Ukraine war, further conflict or military action in the Middle East or elsewhere, inflationary pressures, commodity price changes, and ongoing developments in the commercial real estate sector in mainland China and Hong Kong); potential changes in HSBC’s dividend policy; changes and volatility in foreign exchange rates and interest rates levels, including fluctuations in HIBOR and the accounting impact resulting from financial reporting in respect of hyperinflationary economies; volatility in equity markets and the risk of disruptive correction stemming from high company valuations; lack of liquidity in wholesale funding or capital markets, which may affect our ability to meet our obligations under financing facilities or to fund new loans, investments and businesses; geopolitical tensions or diplomatic developments producing social instability or legal uncertainty, such as the Russia-Ukraine war, conflict in the Middle East, the US military operation in Venezuela and any potential military action or conflict elsewhere, and the related imposition of sanctions, export-control, trade and investment restrictions, supply chain restrictions and disruptions, sustained increases in energy prices and key commodity prices, claims of human rights violations, diplomatic tensions between China and the US, which may extend to and involve other countries and territories, and developments in Hong Kong and Taiwan and the surrounding maritime region, alongside other potential areas of tension, which may adversely affect HSBC by creating regulatory, reputational and market risks; the efficacy of government, customer, and HSBC’s actions in managing and mitigating ESG-related risks, in particular climate risk, nature-related risks and human rights risks, and in supporting the global transition to net zero carbon emissions, each of which can impact HSBC both directly and indirectly through our customers and which may result in potential financial and non-financial impacts; illiquidity and downward price pressure in national real estate markets; adverse changes in central banks’ policies with respect to the provision of liquidity support to financial markets; heightened market concerns over sovereign creditworthiness in over-indebted countries; adverse changes in the funding status of public or private defined benefit pensions; the significant depreciation of the US dollar through 2025, with volatility expected to persist; societal shifts in customer financing and investment needs, including consumer perception as to the continuing availability of credit; exposure to counterparty risk, including third parties using us as a  conduit for illegal activities without our knowledge; and price competition in the market segments we serve; – changes in government policy and regulation, as well as monetary, interest rate and other policies of central banks and other regulatory authorities in the principal markets in which we operate and the consequences thereof (including, without limitation, actions taken as a result of changes in government following national elections in the markets where the Group operates); continued volatility in trade and tariff policies, changes in tariff rates, including sector-specific levies imposed by various nations, including the US, which could further disrupt supply chains and reduce global trade growth; initiatives to change the size, scope of activities and interconnectedness of financial institutions in connection with the implementation of stricter regulation of financial institutions in key markets worldwide; revised capital and liquidity benchmarks, which could serve to deleverage bank balance sheets and lower returns available from the current business model and portfolio mix; changes to tax laws and tax rates applicable to HSBC, including the imposition of levies or taxes designed to change business mix and risk appetite; the practices, pricing or responsibilities of financial institutions serving their consumer markets; expropriation, nationalisation, confiscation of assets and changes in legislation relating to foreign ownership; the UK’s relationship with the EU, particularly with respect to the potential divergence of UK and EU law on the regulation of financial services; changes in government approach and regulatory treatment in relation to ESG disclosures and reporting requirements, and the current lack of a single standardised regulatory approach to ESG across all sectors and markets; changes in UK macroeconomic and fiscal policy, which may result in fluctuations in the value of the pound sterling; general changes in government policy (including, without limitation, actions taken as a result of changes in government following national elections in the markets where the Group operates) that may significantly influence investor decisions; the costs, effects and outcomes of regulatory reviews, actions or litigation, including any additional compliance requirements; and the effects of competition in the markets where we operate including increased competition from non-bank financial services companies; and – factors specific to HSBC, including our success in adequately identifying the risks we face, such as the incidence of loan losses or delinquency, and managing those risks (through account management, hedging and other techniques); our ability to achieve our financial, investment, capital and ESG ambitions, targets and commitments (including the positions set forth in our thermal coal phase-out policy and our energy policy and our targets to reduce our on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high-emitting sectors), which may result in our failure to achieve any of the expected outcomes of our strategic priorities and may result in reputational risks; evolving regulatory requirements and the development of new technologies, including artificial intelligence, affecting how we manage risk, including model risk; model limitations or failure, including, without limitation, the impact that high inflationary pressures and interest rates have had on the performance and usage of financial models, which may require us to hold additional capital, incur losses and/or use compensating controls, such as judgemental post-model adjustments, to address model limitations; changes to the judgements, estimates and assumptions we base our financial statements on; changes in our ability to meet the requirements of regulatory stress tests; a reduction in the credit ratings assigned to us or any of our subsidiaries, which could increase the cost or decrease the availability of our funding and affect our liquidity HSBC Holdings plc Annual Report on Form 20-F 2 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information position and net interest margin; changes to the reliability and security of our data management, data privacy, information and technology infrastructure, including threats from cyber-attacks, which may impact our ability to service clients and may result in financial loss, business disruption and/or loss of customer services and data; the accuracy and effective use of data, including internal management information that may not have been independently verified; changes in insurance customer behaviour and insurance claim rates; our dependence on loan payments and dividends from subsidiaries to meet our obligations; changes in our reporting frameworks and accounting standards, which have had and may continue to have a material impact on the way we prepare our financial statements; our ability to successfully execute planned strategic acquisitions and disposals; our success in adequately integrating acquired businesses into our business; our ability to successfully execute and implement the announced strategic reorganisation of the Group; changes in our ability to manage third- party, fraud, financial crime and reputational risks inherent in our operations; employee misconduct, which may result in regulatory sanctions and/or reputational or financial harm; changes in skill requirements, ways of working and talent shortages, which may affect our ability to recruit and retain senior management and an inclusive and skilled workforce; and changes in our ability to develop sustainable finance and ESG-related products consistent with the evolving expectations of our regulators, and our capacity to measure the environmental and social impacts from our financing activity (including as a result of data limitations and changes in methodologies), which may affect our ability to achieve our ESG ambitions, targets and commitments, including our net zero ambition, our targets to reduce on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high-emitting sectors and the positions set forth in our thermal coal phase-out policy and our energy policy, and increase the risk of greenwashing. Effective risk management depends on, among other things, our ability through stress testing and other techniques to prepare for events that cannot be captured by the statistical models it uses; our success in addressing operational, legal and regulatory, and litigation challenges; and other risks and uncertainties we identify in ‘Top and emerging risks’ on pages 121 to 125 . This Annual Report and Accounts 2025 contains a number of images, graphics, infographics, text boxes and illustrative case studies and credentials which aim to give a high-level overview of certain elements of our disclosures and to improve accessibility for readers. These images, graphics, infographics, text boxes and illustrative case studies and credentials are designed to be read within the context of the Form 20-F as a whole. The information, statements and opinions set out in this Form 20-F do not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any offer to purchase any securities or other financial instruments or any advice or recommendation in respect of such securities or other financial instruments. Additional cautionary statement regarding ESG data, metrics and forward- looking statements The Form 20-F contains a number of forward-looking statements (as defined above) with respect to HSBC’s ESG-related ambitions, targets and commitments, climate-related pathways, processes and plans, and the methodologies and scenarios we use, or intend to use, to assess our progress in relation to these (‘ESG-related forward-looking statements’). In preparing the ESG-related information contained in the Form 20-F, HSBC has made a number of key judgements, estimations and assumptions, and the processes and issues involved are complex. We have used ESG (including climate) data, models and methodologies that we consider, as of the date on which they were used, to be appropriate and suitable to understand and assess climate change risk and its impact, to analyse financed emissions and operational and supply chain emissions, to set ESG-related ambitions, targets and commitments and to evaluate the classification of sustainable finance and investments. However, these data, models and methodologies are often new, are rapidly evolving and are not of the same standard as those available in the context of other financial information, nor are they subject to the same or equivalent disclosure standards, historical reference points, benchmarks or globally accepted accounting principles. In particular, it is not possible to rely on historical data as a strong indicator of future trajectories in the case of climate change and its evolution. Outputs of models, processed data and methodologies are also likely to be affected by underlying data quality, which can be hard to assess and we expect industry guidance, market practice, and regulations in this field to continue to change. We also face challenges in relation to our ability to access data on a timely basis, lack of consistency and comparability between data that is available and our ability to collect and process relevant data. Consequently, the ESG-related forward- looking statements and ESG metrics disclosed in the Annual Report and Accounts 2025 carry an additional degree of inherent risk and uncertainty. Due to the unpredictable evolution of climate change and its future impact and the uncertainty of future policy and market response to ESG-related issues and the effectiveness of any such response, HSBC may have to re-evaluate its progress towards its ESG-related ambitions, targets and commitments in the future, update the methodologies it uses or alter its approach to ESG (including climate) analysis and may be required to amend, update and recalculate its ESG-related disclosures and assessments in the future, as market practice and data quality and availability develop. No assurance can be given by or on behalf of HSBC as to the likelihood of the achievement or reasonableness of any projections, estimates, forecasts, ambitions, targets, commitments, prospects or returns contained herein. Readers are cautioned that a number of factors, both external and those specific to HSBC, could cause actual achievements, results, performance or other future events or conditions to differ, in some cases materially, from those stated, implied and/or reflected in any ESG-related forward-looking statement or metric due to a variety of risks, uncertainties and other factors (including without limitation those referred to below): – Climate change projection risk: this includes, for example, the evolution of climate change and its impacts, changes in the scientific assessment of climate change impacts, transition pathways and future risk exposure and limitations of climate scenario forecasts; – ESG projection risk: ESG-related metrics are complex and are still subject to development. In addition, the scenarios employed in relation to them, and the models that analyse them, have limitations that are sensitive to key assumptions and parameters, which are themselves subject to some uncertainty, and cannot fully capture all of the potential effects of climate, policy and technology-driven outcomes; – Changes in the ESG regulatory landscape: this involves changes in government approach and regulatory treatment in relation to ESG disclosures and reporting requirements, and the current lack of a single standardised regulatory approach to ESG across all sectors and markets; – Variation in reporting standards: ESG reporting standards are still developing and are not standardised or comparable across all sectors and markets, and new reporting standards in relation to different ESG metrics are still emerging; – Data availability, accuracy, verifiability and data gaps: our disclosures are limited by the availability of high quality data in some areas and our own ability to timely collect and process such data as required. Where data is not available for all sectors or consistently year on year, there may be an impact to our data quality scores. We may not be able to fully mitigate financial reporting risks related to our climate HSBC Holdings plc Annual Report on Form 20-F 3 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information and ESG disclosures due to the limited quantity and consistency of available data. The accuracy and reliability of data is also impacted by the diverse range of internal and external data sources and data structures needed for climate-related reporting. While we expect our data quality scores to improve over time, as companies continue to expand their disclosures to meet growing regulatory and stakeholder expectations, there may be unexpected fluctuations within sectors year on year, and/or differences between the data quality scores between sectors. Any such changes in the availability and quality of data over time, or our ability to collect and process such data, could result in revisions to reported data going forward, including on financed emissions, meaning that such data may not be reconcilable or comparable year-on year; – Developing methodologies and scenarios: the methodologies and scenarios HSBC uses to assess financed emissions and set ESG- related ambitions, targets and commitments may develop over time in line with market practice, industry standards, regulation and/or developments in science, where applicable. Such developments could result in revisions to reported data, including on financed emissions or the classification of sustainable finance and investments, meaning that data outputs may not be reconcilable or comparable year-on year. Consequently, we might need to reassess our progress towards ESG-related ambitions, targets and commitments in the future; and – Risk management capabilities: global actions, including HSBC’s own actions, may not be effective in transitioning to net zero and in managing relevant ESG risks, including in particular climate, nature- related and human rights risks, each of which can impact HSBC both directly and indirectly through our customers, and which may result in potential financial and non-financial impacts to HSBC. In particular: – we may not be able to achieve our ESG-related ambitions, targets and commitments (including with respect to the positions set forth in our thermal coal phase-out policy and our energy policy, and our targets to reduce our on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high-emitting sectors), which may result in our failure to achieve some or all of the expected outcomes of our strategic priorities and raise reputational concerns; and – we may not be able to develop sustainable finance and ESG- related products consistent with the evolving expectations of our regulators, and our capacity to measure the environmental and social impacts from our financing activity may diminish (including as a result of data and model limitations and changes in methodologies), which may affect our ability to achieve our ESG- related ambitions, targets and commitments, including our net zero ambition, our targets to reduce our on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high-emitting sectors and the positions set forth in our thermal coal phase-out policy and energy policy, and increase the risk of greenwashing. We may face additional risks if we knowingly or unknowingly make inaccurate, unclear, misleading or unsubstantiated claims regarding sustainability to our stakeholders. Any forward-looking statements made by or on behalf of HSBC speak only as of the date they are made. HSBC expressly disclaims any obligation to revise or update these ESG forward-looking statements, other than as expressly required by applicable law. Written and/or oral ESG-related forward-looking statements may also be made in our periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, proxy statements, offering circulars and prospectuses, press releases and other written materials, and in oral statements made by HSBC’s Directors, officers or employees to third parties, including financial analysts. Our data dictionaries and methodologies for preparing the above ESG- related metrics and third-party limited assurance reports can be found on: www.hsbc.com/who-we-are/esg-and-responsible-business/esg- reporting-centre. Certain defined terms Unless the context requires otherwise, ‘HSBC Holdings’ means HSBC Holdings plc and ‘HSBC’, the ‘Group’, ‘we’, ‘us’ and ‘our’ refer to HSBC Holdings together with its subsidiaries. Within this document the Hong Kong Special Administrative Region of the People’s Republic of China is referred to as ‘Hong Kong’. When used in the terms ‘shareholders’ equity’ and ‘total shareholders’ equity’, ‘shareholders’ means holders of HSBC Holdings ordinary shares and those preference shares and capital securities issued by HSBC Holdings classified as equity. The abbreviations ‘$m’, ‘$bn’ and ‘$tn’ represent millions, billions (thousands of millions) and trillions of US dollars, respectively. HSBC Holdings plc Annual Report on Form 20-F 4 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Performance in 2025 Our key performance indicators measure the progress we have made against our priorities for the benefit of all our stakeholders, and also inform remuneration outcomes across the Group. Financial performance indicators Ñ Read more on our financial performance in 2025 on pages 5 and 17 . Ñ For an explanation of performance against our key Group financial targets, see page 15 . Ñ To better align with market practice, from our 2025 full-year results we no longer adjust the ‘average tangible equity‘ for the post-tax impact of notable items in each period. Comparatives have been re-presented. This revision improved RoTE excluding notable items by 16 basis points (‘bps’) in 2025 ( 2024: (34)bps). Ñ For a reconciliation of alternative performance measures to their reported equivalents, see page 106 . Return on average tangible equity (‘RoTE’) ø 13.3% (2024: 14.6% ) Profit before tax $29.9bn (2024: $32.3bn ) RoTE excluding notable items ø 17.2% (2024: 15.6% ) Constant currency profit before tax excluding notable items ø $36.6bn (2024: $34.2bn ) Operating expenses $36.4bn (2024: $ 33.0 bn) Common equity tier 1 capital ratio 14.9% (2024: 14.9% ) Target basis operating expenses ø $33.5bn (2024: $32.5bn ) Dividend per share in respect of 2025 $0.75 (2024 dividend per share: $0.87 , inclusive of a special dividend of $0.21 per share) Strategic performance indicators Ñ Read more on our strategy on pages 12 to 14 . Ñ Read more on our approach to ESG on page 28 . Ñ Read more on our definition of sustainable finance and investment on page 35 . Organisational simplification $1.2bn Annualised impact of cost saving actions taken during 2025 Sustainable finance and investment $ 495.6 bn Cumulative total provided and facilitated since 1 January 2020. (2024: $393.6bn) Grow our Wealth business $80bn Net new invested assets generated in 2025, of which $39bn were in Asia. (2024: $64bn generated, of which $47bn were in Asia) Link to remuneration Ñ For details of executive Directors’ pay and performance in 2025, see the Directors’ Remuneration Report on page 249 . Our remuneration policy supports the achievement of our strategic objectives by aligning reward with our long-term sustainable performance. This includes review of our performance against financial and non-financial metrics to determine overall variable pay for our colleagues and executive Directors. Key financial and strategic performance indicators included in the 2025 annual incentive and 2023-2025 long-term incentive scorecards of our executive Directors are highlighted by the following symbols: Annual incentive Long-term incentive HSBC Holdings plc Annual Report on Form 20-F 5 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Highlights We are becoming a simple, more agile, focused bank, built on our core strengths. Financial performance (vs 2024) – Reported profit before tax decreased by $2.4bn to $29.9bn , m ainly due to a $4.9bn year-on-year net adverse impact from notable items. Profit after tax decreased by $1.9bn to $23.1bn . – In 2025, notable items included dilution and impairment losses of $2.1bn related to our associate Bank of Communications Co., Limited (‘BoCom‘), reserve recycling losses of $1.5bn following the completion of the sale of our French retained portfolio of home and certain other loans, legal provisions of $1.4bn and restructuring and other related costs associated with our organisational simplification of $1.0bn . In 2024, notable items included net losses relating to our disposals in Canada and Argentina of $1.4bn. – Constant currency profit before tax excluding notable items increased by $2.4bn to $36.6bn , from a strong performance in Wealth in our International Wealth and Premier Banking (‘IWPB’) and Hong Kong businesses, and from Wholesale Transaction Banking in our Corporate and Institutional Banking (‘CIB’) business. This was partly offset by a rise in expected credit losses and other credit impairment charges (‘ECL’) and an increase in operating expenses due to planned investment and inflation. – RoTE in 2 025 was 13.3% , compared with 14.6% in 2024. Excluding notable items, RoTE in 2025 was 17.2% , a rise of 1.6 percentage points compared with 2024. – Revenue of $68.3bn increased by $2.4bn or 4% compared with 2024. The increase was primarily due to fee and other income growth in Wealth from Investment Distribution and Insurance, and in Wholesale Transaction Banking, particularly in Foreign Exchange in CIB. This was partly offset by the year-on-year impact of notable items, mainly relating to business disposals and a dilution loss related to BoCom. Constant currency revenue excluding notable items rose by $3.4bn to $71.0bn . – Net interest income (‘NII’) of $34.8bn was $2.1bn higher than 2024 reflecting the benefit of the reinvestment of our structural hedge at higher yields, deposit balance growth and higher NII in Markets Treasury. In addition, the increase included the non- recurrence of a $0.2bn loss in 2024 on the early redemption of legacy securities. This was partly offset by the adverse year-on- year impact of $1.6bn from business disposals in Argentina and Canada, and margin compression on our deposits. The growth in NII of $2.1bn also reflected a benefit from lower funding costs associated with the trading book of $1.7bn . Banking net interest income (‘banking NII’), which excludes these funding costs, increased by $0.3bn to $44.1bn . – Net interest margin (‘NIM’) of 1.59% was 3bps higher, reflecting the reinvestment of our structural hedge at higher yields . – ECL were $3.9bn , an increase of $0.4bn compared with 2024, including charges in both periods related to the commercial real estate (‘CRE’) sectors in Hong Kong and mainland China. In 2025, the charge in this sector in Hong Kong of $0.7bn (2024: $0.1bn) reflected higher allowances for new defaulted exposures, the impact of an over- supply of non-residential properties that has put continued downward pressure on rental and capital values, and updates to our models used for ECL calculations. The 2025 charge in the mainland China CRE sector was $0.2bn (2024: $0.4bn). ECL were 39 bps of average gross loans, including loans and advances classified as held for sale. – Operating expenses increased by $3.4bn or 10% to $36.4bn . The increase primarily reflected notable items in 2025 of $3.0bn, including legal provisions of $1.4bn , restructuring and other related costs associated with our organisational simplification of $1.0bn , and $0.5bn related to disposals, wind-downs, acquisitions and related costs. – Cost growth also reflected planned spend and investment in technology, higher performance-related pay and the impacts of inflation, partly offset by reductions related to our business disposals and the benefits of our organisational simplification. – Target basis operating expenses rose by 3% , in line with our cost growth target. This increase primarily reflected higher planned spend and investment in technology, higher performance-related pay and the impact of inflation, partly offset by the benefits of our organisational simplification. – Customer lending balances rose by $57.7bn including favourable foreign currency translation differences. On a constant currency basis, lending balances rose by $17.6bn , mainly in our UK business reflecting growth in mortgage and commercial customer lending. – Customer accounts rose by $131.9bn , including favourable foreign currency translation differences. On a constant currency basis, customer accounts increased by $67.6bn , with growth in all our businesses, particularly our Hong Kong business segment. – Common equity tier 1 (‘ CET1’) capital ratio remained at 14.9% . This reflected an increase in risk-weighted assets (‘RWAs‘), which was offset by an increase in CET1 capital through capital generation net of distributions. The increase in RWAs was mainly driven by foreign currency translation differences and asset size movements. – The Board has approved a fourth interim dividend of $0.45 per share, resulting in a total of $0.75 per share in respect of 2025. HSBC Holdings plc Annual Report on Form 20-F 6 Strategic report ESG review Financial review Risk review Governance Report of the Directors Financial statements Additional information Outlook Group financial targets – We are targeting a RoTE of 17% or better for 2026, 2027 and 2028, excluding notable items. Our revised target reflects momentum in our earnings and the positive progress we are making in our strategic execution. – We are targeting year-on-year growth in revenue from 2026 to 2028, rising to 5% growth in 2028 compared with 2027 excluding notable items and on a constant currency basis. – We maintain our dividend payout ratio target basis of 50% in 2026, 2027 and 2028. Our target basis payout ratio is calculated as a percentage of earnings per share (‘EPS’) excluding material notable items and related impacts. In respect of 2026: – We expect banking NII of at least $45bn, based on our current expectations for policy rates. – We expect ECL charges as a percentage of average gross loans to be around 40bps in 2026 (including held for sale loan balances). Over the medium term, we retain our planning range of 30-40bps. – We retain our commitment to Group-wide cost discipline. We are targeting growth in target basis operating expenses of approximately 1% compared with 2025. – Our target basis operating expenses measure excludes notable items and includes the impact of simplification-related saves associated with our announced reorganisation. – We intend to continue to manage the CET1 capital ratio within our medium-term target range of 14%–14.5%. Capital may fall below our target range during January 2026 owing to the privatisation of Hang Seng Bank, which had a net CET1 capital impact of 110bps in January 2026 (based on our CET1 capital ratio as at 31 December 2025). This included a day one impact of around 120bps on CET1, partly offset by a release of around 10bps of incremental hedging-related structural foreign exchange RWAs. – We expect to restore our CET1 capital ratio within our target range through a combination of organic capital generation and not initiating any further buy-backs until CET1 capital is back within, or above, this range. A decision to recommence buy-backs will be subject to our normal buy-back considerations and process on a quarterly basis. Ñ Our targets and expectations reflect our current outlook for the global macroeconomic environment and market-dependent factors, such as market-implied interest rates (as of end January 2026) and rates of foreign exchange, as well as customer behaviour and activity levels. Ñ We do not reconcile our forward guidance on RoTE excluding notable items, constant currency revenue excluding notable items, target basis operating expenses, dividend payout ratio target basis or banking NII to their equivalent reported measures. Ñ See pages 107 to 108 for a further explanation of RoTE excluding notable items, constant currency revenue excluding notable items, banking NII, target basis operating expenses and dividend payout ratio target basis. For further information on our CET1 ratio, see page 191 . Reshaping the Group for growth Privatisation of Hang Seng Bank – On 26 January 2026, we completed our privatisation of Hang Seng Bank, following shareholder and Court approval. Hang Seng Bank is now a wholly-owned subsidiary of the HSBC Group and Hang Seng Bank shares have been withdrawn from the Hong Kong Stock Exchange. This transaction demonstrates our confidence in the outlook for Hong Kong and further strengthens our market-leading position. – Through the privatisation of Hang Seng Bank, we expect to realise $0.5bn in pre-tax revenue and cost synergies across both our brands in Hong Kong by the end of 2028, with associated restructuring costs of $0.6bn. These costs would be reported as a material notable item. We intend to redeploy savings we realise from cost synergies into areas of competitive advantage and accretive returns. – We also have an ambition to generate further revenue and cost opportunities of around $0.4bn by the end of 2028 across both our brands in Hong Kong . Organisational simplification – At our 2024 full-year results we announced measures to simplify the Group, and we have committed to deliver an annualised reduction of around $1.5bn in our cost base, expected by the end of 2026 from our organisational simplification programme. – We are on track to have taken actions to deliver our $1.5bn annualised cost reduction by the end of June 2026, which is six months earlier than planned. In 2025, we identified and actioned annualised cost savings of approximately $1.2bn, which resulted in a reduction of around $0.6bn in operating expenses in the income statement in 2025. In this period we incurred $1.0bn in restructuring and other related costs, primarily related to severance. Strategic transactions – We are also focused on opportunities where we have a clear competitive advantage and accretive returns, and we aim to redeploy approximately $1.8bn of additional costs saved from non-strategic activities into these areas over the medium term. The increase from $1.5bn reflects our intention to redeploy an additional $0.3bn of costs saved from the synergies generated from our privatisation of Hang Seng Bank. – In 2025, we announced a further 11 transactions, which are set to create incremental investment capacity for growth. During the fourth quarter of 2025, we completed the sales of our French retained portfolio of home and certain other loans, our France life insurance business, our German private banking business and our Bahrain retail banking business. Completed or announced transactions are expected to generate approximately $0.7bn of annualised cost capacity for reallocation. The associated businesses contributed around $1.0bn to revenue in 2025. – Targeted strategic reviews of our retail businesses in Australia, Indonesia and Egypt remain underway on which no decisions have been made. Our CIB businesses in these markets are unaffected by these reviews. In addition, we have commenced a strategic review of HSBC Life Singapore. Progress in growth areas – In Wealth, we are investing in Wealth Centres and hiring additional relationship managers. Wealth balances as at 31 December 2025 across all of our business segments were $2.1tn , an increase of 16% compared with the same period last year. Within this we have attracted net new invested assets of $ 80 bn, with $ 39 bn booked in Asia. This compared with net new invested assets in 2024 of $ 64 bn, with $ 47 bn booked in Asia. – Transaction banking continues to perform well as we leverage our network and capabilities to capture opportunities from changing trade and capital flows. In 2025, fee and other income in Wholesale Transaction Banking performed well, rising by 4% compared with 2024, particularly from growth in Global Foreign Exchange. Ñ For more details on our strategic progress in 2025, see ‘Our strategy’ on page 12 . Ñ For more details on our businesses held for sale and disposal groups, see Note 23 on the financial statements on page 355 . HSBC Holdings plc Annual Report on Form 20-F 7 Strategic report ESG review Financial review Risk review Governance Report of the Directors Financial statements Additional information Who we are Founded in 1865, HSBC is one of the world’s largest banking and financial services organisations. We’re here to use our expertise, capabilities, breadth and perspectives to help open up a world of opportunity for our customers. Our strategy Our strategy supports our ambition to be the most trusted bank globally, putting customers at the heart of everything we do. We help meet our customers’ financial needs and support them to achieve their goals with our products and services, while navigating the complexities of the global market through our deep international network, supported with the stability and strength of our balance sheet. Our priorities u Be simple and agile u Drive customer- centricity u Deliver focused sustainable growth Ñ See page 12 for further details on our strategy. We aim to make fast, safe decisions – adapting to change by staying relevant, driving simplification and being future ready through technology and digitisation. We are intensely focused on our customers – helping to deliver excellent outcomes, drive loyalty, and serve our customers for the long term through the depth of what we offer as a franchise. As a leading international bank, we aim to drive long-term, sustainable growth, focused on areas of competitive strength. Our organisational structure Since 1 January 2025, the HSBC Group has operated through four new businesses to simplify our organisational structure and accelerate delivery against our strategic priorities. Revenue by business ($bn) 1 HK $15.9bn CIB $27.6bn UK $12.9bn IWPB $ 14.5bn 1    Calculation based on revenue of our business segments excluding Corporate Centre. Hong Kong UK Our Hong Kong business has a leading market position. It comprises Retail Banking and Wealth and Commercial Banking of HSBC Hong Kong and Hang Seng Bank. Our UK business has a leading market position. It comprises Retail Banking and Wealth (including first direct and M&S Bank) and UK Commercial Banking, including HSBC Innovation Bank. Corporate and Institutional Banking International Wealth and Premier Banking Our CIB business is a market leader in cross-border transaction banking and capital markets. It integrates our Commercial Banking business (outside the UK and Hong Kong) with our Global Banking and Markets business. Our IWPB business comprises Premier banking outside of Hong Kong and the UK, our Private Bank, Asset Management and Insurance businesses. Ñ See pages 19 to 27 for further details on our four businesses and Corporate Centre. Our values At HSBC, our values guide us in all our actions – from strategic decisions to day-to-day interactions with customers and each other. Our values are rooted in HSBC’s history, heritage and character, and help us deliver on our purpose. We get it done We value difference We take responsibility We succeed together Moving at pace and making things happen Seeking out different perspectives Holding ourselves accountable and taking the long view Collaborating across boundaries HSBC Holdings plc Annual Report on Form 20-F 8 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Chairman’s shareholder letter Brendan Nelson Group Chairman We delivered strong performance and material returns for our shareholders in 2025. By leveraging our unique global network and leading capabilities, we helped our customers see past the sustained uncertainty in the international environment and find the opportunities that are driving the global economy forward. It is with great pride that I have begun my tenure as Group Chairman of HSBC. I am truly privileged to serve such a remarkable institution, working alongside exceptionally talented colleagues. Our 161-year history is firmly rooted in the objective set by HSBC’s founders – to establish a bank in Hong Kong and Shanghai that would facilitate local and international trade. By not losing sight of that foundational objective and by remaining true to our purpose and values, we have focused on what matters most – our customers – moving forward together through these most complex of times. Building on that forward momentum, the Board and I will continue to closely partner with our highly capable CEO, Georges Elhedery, and his management team who are accelerating the execution of our strategy, with discipline and confidence. A Modern HSBC: Simple and More Agile A key catalyst for achieving that acceleration was the introduction in January 2025 of our new organisational structure centred on our four businesses: Hong Kong, the UK, Corporate and Institutional Banking, and International Wealth and Premier Banking. By halving the number of operating businesses and significantly streamlining the new Operating Committee of the Group, we embarked on a journey to become a simple and more agile organisation; a modern institution that reflects its cherished legacy, while embracing technological advances as a core enabler of future growth, competitiveness, and, ultimately, customer aspirations. Today, HSBC is clear on its core strengths, investing to further develop our competitive advantages and deliver sustainable growth, with an entirely attainable ambition to be the most trusted bank globally, putting customers at the heart of everything we do. Global Context Global growth in 2025 was stronger than expected, as the tariff-related headwinds were offset by the significant momentum generated by AI capital expenditure and trade growth, and by the support provided by the ever- resilient US consumer. The global geopolitical context was marked by continued uncertainty. The war in Ukraine, which has entered its fifth year, and conflicts in the Middle East and elsewhere, continue to have significant human consequences. In parallel, the changing approach to global trade relations has increased economic uncertainty. But as the resilience of global trade growth demonstrates, the inter- connectedness of the global economy, underpinned by growing trade flows, is compelling. Faced with the re-configuration of the globalised world, HSBC is optimally positioned to help our customers capture the meaningful opportunities that are driving the global economy forward, across geographies and throughout our unique global network. Our strong financial performance and material returns in 2025 point to that dynamic, along with our focused approach to implementing our strategic priorities. 2025 Performance In 2025, we delivered reported profit before tax of $29.9bn. Our return on average tangible equity was 13.3%, or 17.2% excluding the impact of notable items. We delivered material returns for our shareholders. The Board approved a fourth quarterly dividend of $0.45 per share, bringing the total dividend announced for 2025 to $0.75 per share. In addition, we announced two share buy-backs in respect of 2025 worth a total of $6bn. Dividends paid in 2025, together with a more than 49% increase in the share price, delivered a total shareholder return for the year of more than 57%. With our realigned structure providing a decisive impetus, we achieved broad-based profit generation through geographic and business diversification. Our performance reflects that, as does our ability to invest for growth, while continuing to optimise cost and capital allocation. Indeed, we are keeping to our committed objective of delivering $1.5bn of organisational simplification savings and expect to have taken the relevant actions to achieve it by the end of June 2026, which is six months earlier than planned. HSBC Holdings plc Annual Report on Form 20-F 9 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Chairman’s letter ”Today, HSBC is clear on its core strengths, investing to further develop our competitive advantages and deliver sustainable growth, with an entirely attainable ambition to be the most trusted bank globally, putting customers at the heart of everything we do.” Against this backdrop, we believe that the privatisation of Hang Seng Bank is a milestone development that brings together two seminal institutions that have served Hong Kong – a home market for the Group – for generations. We are absolutely committed to building on that valued legacy. While respecting Hang Seng’s heritage and retaining its brand and distinct customer proposition, we will continue to invest and build on the complementary strengths of our businesses, to the benefit of our valued customers and the communities that we serve. Sustainability Our ambition remains to become a net zero bank by 2050. Supporting our customers is core to our strategy – financing their transition is both critical to them and aligned to our net zero ambition. In November 2025, we published our updated Net Zero Transition Plan, setting out our commercially-grounded sustainability strategy, which reflects the realities of an evolving global transition. We also set out our updated interim financed emissions targets, metrics and associated policies, seeking to remain science-aligned and compatible with our own net zero ambition. We believe that supporting our customers’ transition is one of the most significant roles we can play in the global transition to net zero. We aim to provide and facilitate between $750bn and $1tn of sustainable finance and investment by 2030. In 2025, we provided and facilitated $102bn in sustainable finance and investment, bringing our cumulative total to $495.6bn since January 2020. This puts us on track to meet our target by 2030. Leadership and Board Changes As I begin my first full year as Group Chairman, I want to acknowledge and pay tribute to Sir Mark Tucker’s remarkable leadership and exemplary commitment to the Group. Over a period of eight years, Mark helped steer HSBC through a number of unprecedented challenges – a global pandemic, decades-high inflation and profound shifts in the trade and geopolitical landscape – leaving the Group more profitable, resilient, and strongly positioned for accelerated growth. I am very grateful to him for the trusted partnership, friendship, and his support in ensuring a smooth handover. We also announced the appointment of Wei Sun Christianson as an independent non- executive Director, with effect from 1 January 2026. Wei brings extensive banking and regulatory experience gained over a 30-year international career, including as Co-CEO of Asia Pacific at Morgan Stanley. Ann Godbehere will be stepping down as a Director of the Company and retire from the Board at our 2026 AGM. I want to thank Ann for her considerable contributions to the HSBC Board. In October, we announced the appointment of Angela McEntee as Group Company Secretary with effect from 1 January 2026. In 2025, the Board held meetings in Hong Kong, India, and London. These were invaluable opportunities to meet with valued clients, government representatives, regulators and colleagues. We also had productive engagements with our shareholders on important Group-related issues at our Annual General Meeting in London and at the Informal Meeting of our Hong Kong Shareholders. Year Ahead We expect the global economy to expand in 2026. Despite significant policy uncertainty, global trade is also set to grow, supported by the expansion of new trade corridors and the boom in AI hardware demand. Inflation should continue drifting downward, although with divergence across markets. Somewhat uneven growth across industries and geographies could contribute to periodic financial volatility. In China, a stronger policy push should anchor its growth, and we expect it to broadly maintain its expansion pace of recent years, as structural reforms start to gain traction. As part of its continued economic transformation, the emphasis will be on strengthening domestic demand – particularly consumption, but also investment. Services consumption will benefit from government policy priorities, as will technology development. Hong Kong will continue to benefit as the super-connector between mainland China and the rest of the world. Buoyant markets and improvements in consumption are expected to support its growth this year. Elsewhere in Asia, robust consumption and rising exports generated impressive growth in a number of markets, in ASEAN in particular. That combination is expected to continue in 2026. In India, domestic demand will likely be the main driver of growth, reflecting robust consumption, as well as ongoing government infrastructure investment. Economic diversification continues in the Middle East, with deep capital reserves being deployed into significant investments in infrastructure, technology, and human capital. The Asia–Middle East trade, investment, and travel corridor continues to grow. Europe’s economy will be supported by fiscal expansion, particularly in Germany, coupled with lower effective interest rates and steady consumption growth. We see euro area growth maintaining its recent pace over the next year. In the UK, greater fiscal headroom should give markets and businesses more confidence. Lower expected inflation and interest rates should provide a tailwind for consumption growth. The US should be a key driver of global growth, reaping the benefits of sizeable investments in AI, tax cuts and incentives, as well as substantial deregulation. Our Colleagues I will end where I began, by recognising and wholeheartedly thanking our HSBC colleagues. They are the ones who deliver for our customers, day in and day out, with excellence, dedication, and respect. They are the backbone of the Group, embodying our high-performance culture. Their commitment to our customers and to maintaining and further strengthening the relationships we have built with them is what set us apart in 2025 and what will help us thrive going forward, to the benefit of our shareholders. Brendan Nelson Group Chairman 25 February 2026 HSBC Holdings plc Annual Report on Form 20-F 10 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group CEO’s shareholder letter Georges Elhedery Group CEO RoTE ø 13.3% (2024: 14.6% ) RoTE excluding notable items ø 17.2% (2024: 15.6 %) Profit before tax $29.9bn (2024: $32.3bn ) Dear fellow shareholders, In previous letters I set out a clear agenda to unlock HSBC’s full potential. 2025 marked a year of decisive action and swift execution. We are performing, transforming and investing for growth as demand for globally-connected financial services increases, especially in the world’s fastest-growing regions. We have aligned our structure with our strategy and strengthened our four complementary businesses. We are becoming a simple, more agile, focused bank built for a fast-changing world. One that stays true to our strong foundations and hallmark financial strength yet moves with the speed our customers need to navigate the modern world. The dynamic market environment shows why our global network, deep local expertise built over generations and financial strength set us apart. It also shows why our customers continue to turn to us as their reliable and trusted financial partner. New targets: 2026-2028 Last February, we set out a three-year target of a mid-teens return on average tangible equity (‘RoTE’) in each of the three years from 2025 to 2027, excluding notable items. We made clear progress against this target in 2025. That is why we are now raising our ambition and targeting 17% RoTE or better in each year from 2026 to 2028, excluding notable items. We are also targeting year-on- year revenue growth over the same period rising to 5% in 2028 compared with 2027, excluding notable items. W e maintain our dividend payout ratio target basis of 50% in 2026, 2027 and 2028. Our target basis payout ratio is calculated as a percentage of EPS, excluding material notable items and related impacts. Strong performance On a reported basis, profit before tax of $29.9bn fell 7% year-on-year due to the impact of notable items. These included dilution and impairment losses of $2.1bn related to BoCom, legal provisions of $1.4bn and $1.0bn of restructuring and other related costs associated with our organisational simplification. On this basis, we delivered a RoTE of 13.3%. Excluding notable items, our RoTE was 17.2% achieving our ‘mid-teens, or better’ target. Our revenue increased 5% year-on-year to $71bn and our profit before tax grew 7% to $36.6bn, excluding notable items on a constant currency basis. Our common equity tier 1 (‘CET1’) capital ratio was 14.9%, reflecting our long-standing financial strength. We maintained tight cost discipline, managing target basis cost growth to around 3%, thereby achieving our target. This strong performance enabled us to announce a total ordinary dividend per share for 2025 of $0.75, or $12.9bn, an increase of 14% on the prior year. In addition, we completed $6bn of share buy-backs taking total returns to $18.9bn. Momentum Our four businesses are built on customer trust and performed well. Revenue and deposits grew in each and all four delivered RoTE of mid-teens, or better, excluding notable items. We saw growth accelerate in areas of core strength and we are actively investing in modern technology to enhance innovation, productivity and customer experience. Turning to business-line performance on a year-on-year and constant currency basis, our market-leading Hong Kong business generated revenue of $15.9bn, or 6% growth. Our deposit base grew by 7% to more than $540bn, helping us maintain our number one position in Hong Kong with market share of 25%. Our UK business delivered revenue of $12.9bn, an increase of 5%, supported by robust balance sheet growth with customer loans increasing by 6% to more than $300bn. CIB increased revenue by 3% to $27.6bn, and we generated $13.1bn of fee and other income, which was 7% higher than the prior year. HSBC Holdings plc Annual Report on Form 20-F 11 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group CEO's letter “We are becoming a simple, more agile, focused bank built for a fast changing world.” In 2025, we facilitated around $900bn in trade, which is comparable to the economic output of a G20 economy. This represents the equivalent of around $2.5bn of goods and services moving through our global network every single day. This scale, which gives access to 86% of world trade flows, is why we were voted in a survey of 13,000 corporates as Euromoney’s ‘World’s Best Trade Finance Bank’ for the ninth consecutive year. Across our network we processed around $500tn of payment transactions in 130 currencies, equivalent to almost $1bn every minute. That is why 30,000 customers surveyed by Euromoney voted HSBC the number one payments bank in products, services and technology. In IWPB, revenue was $14.5bn, an increase of 5%. Wealth fee and other income across all our businesses was $9.4bn, up 24%. At 31 December 2025, bank-wide Wealth balances were $2.1tn, of which more than $1tn was booked in Asia, reflecting our position as the leading wealth manager in Asia and the Middle East. Given the importance of managing customer deposits as well as their invested assets, we are changing our wealth disclosures. In 2026, we will replace Invested assets (2025: $1.5tn) with a new calculation of Wealth balances. The new disclosure adds our wealth customers’ deposits of $608bn and removes $580bn of Asset Management third- party distribution assets. On this new basis, Wealth balances in 2025 were $1.6tn. In 2025, we were pleased to update our Net Zero Transition Plan, which reaffirms our ambition to become a net zero bank by 2050 and emphasises the importance of supporting our customers in their transitions. Discipline We expect to have taken action to deliver our $1.5bn organisational simplification saves by the first half of 2026, six months ahead of plan. The initiative is designed to make HSBC simple and more agile with an immaterial revenue impact. Cost efficiency is one of the key benefits, clearer accountability and greater collaboration are others. The saves will be taken straight to the bottom line. We have reviewed our portfolio against our strategic priorities and are moving at pace to exit non-strategic or low-returning activities. This initiative is expected to release $1.5bn of incremental investment capacity, which we are actively reallocating to areas of competitive strength where we can generate accretive returns. In 2025, we announced 11 exits, of which three have fully completed. These are in addition to the two transactions we announced in 2024. Taken together, the completed and announced exits will generate $0.7bn in annualised cost savings and exits in active execution, including activities under strategic review, are expected to generate a further $0.6bn. Following the privatisation of Hang Seng Bank, reported cost synergies across HSBC and Hang Seng Bank will release $0.3bn, which we will direct towards growth opportunities in Hong Kong. To reflect this, we are increasing our medium-term cost reallocation commitment from $1.5bn to $1.8bn. Investing for growth Our $13.7bn privatisation of Hang Seng Bank brings together 255 years of history and heritage, combining global reach and local depth. It allows us to scale capabilities across both banks for all customers. Hong Kong is a dynamic economy, a top three global financial centre and a thriving trade gateway. It is a super-connector between mainland China and the world. It is also poised to become the world’s leading cross-border wealth hub by 2029. The privatisation of Hang Seng Bank reflects our confidence and conviction in Hong Kong’s future growth. In our home markets, we are expanding the number of Wealth Centres and enhancing our wealth capabilities. In Hong Kong we opened five new state-of-the-art Wealth Centres. They provide a space where our Private Banking and Premier customers can meet our wealth specialists to plan, invest and manage their long-term financial future. In the UK, our flagship Wealth Centre launched in Mayfair, London, and we opened a second in Leeds, a major regional wealth hub. Also in the UK, investment in our Business Banking coverage model is generating results. We are growing customer numbers, lowering attrition rates and seeing greater advocacy. In IWPB we opened a further 20 new Wealth Centres focusing on Asia and the Middle East, excluding those in markets under strategic review. These are in many of the world’s fastest-growing wealth economies, such as mainland China, Singapore and the UAE. We became the world’s first global asset manager to establish an onshore platform in the UAE, offering retail and institutional investors access to 10 new funds. We refreshed our Premier proposition for affluent customers in four markets and it is now live in seven. In CIB, we are using digital innovation to serve customers faster. Our tokenised deposits now offer next-generation real time payments across our network. They are available in Hong Kong, Singapore, the UK and Luxembourg. Other markets will follow in 2026. With mobile-first consumers changing customer payment choices, we are changing digital wallet collection capabilities. Our Digital Merchant Services solution allows omnichannel payments, making e-commerce easier and more efficient for retailers. It is currently available in Hong Kong, India and Singapore, with six more markets launching in 2026. We are also reengineering HSBC while focusing on resilience and risk management. We are modernising the bank through AI and automation to enhance customer experience, increase productivity and boost efficiency. We have more than 100 GenAI active use cases and are increasing AI partnerships to accelerate adoption of cutting-edge technologies. More than 31,000 of our engineers now use an AI-enabled coding assistant and our HSBC Productivity Suite tool is available to around 85% of our colleagues to help summarise, analyse and translate documents. High performance culture A clear strategy sets our direction. A strong culture is what turns it into results. This is why we are investing to build a high-performance culture. First, we refreshed our ambition: ‘To be the most trusted bank globally, putting customers at the heart of everything we do’. Second, we launched six new Leadership Principles and How We Lead, our new Group- wide leadership framework. All our senior leaders, and the broader Managing Director cohort, have now attended a two-day How We Lead event and 86% surveyed believe it is creating a positive cultural change. In 2026, we will roll it out to our broader people leaders globally. In the spirit of our Leadership Principle that ‘great leaders build better leaders’, more than 150 of our senior leaders will facilitate a How We Lead event in 2026. Our people I would like to thank Sir Mark Tucker for his exceptional leadership over the last eight years and congratulate Brendan Nelson on his appointment as Group Chairman. I look forward to continue working with Brendan as we pursue our clear agenda to unlock HSBC’s full potential. I would also like to take this opportunity to thank all my colleagues for their many valuable contributions to our results. It is a privilege to work with such talented people. Their dedication, commitment and passion to deliver for our customers truly differentiates HSBC and is key to delivering sustainable long-term growth for you, our shareholders. Georges Elhedery Group CEO 25 February 2026 HSBC Holdings plc Annual Report on Form 20-F 12 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Our strategy In 2025, we continued to implement our strategy that supports our ambition to be the most trusted bank globally, putting customers at the heart of everything we do. A growing, high-returning HSBC Our strategic priorities remain clear: we aim to drive customer-centricity, deliver focused sustainable growth, and be simple and more agile. We are intensely focused on our customers. The depth and quality of our customer relationships and our ability to connect customers globally help enable us to deliver best-in-class products and service excellence. Each of our four businesses is built on trust, as demonstrated by our $2.1tn Wealth balances and our $500tn annual payment volumes. We are driving focused sustainable growth by targeting areas of competitive strengths. The privatisation of Hang Seng Bank is an example of this. The transaction allows us to further capture the growth opportunities in Hong Kong, one of our home markets where we are already the number one bank 1 . All four of our businesses are high-returning, delivering mid- teens or better RoTE individually. We aim to be a simple and agile organisation in accordance with the strategy we set out in 2024. We simplified our organisation down to four connected businesses. We are also exiting non-strategic businesses at pace, freeing up investment to grow our core businesses where we have scale and competitive advantage. 1 Based on deposit market share. Source: Hong Kong Monetary Authority (‘HKMA’). Strong performance in 2025 We delivered a strong set of results in 2025. Our reported revenue was $68.3bn . On a constant currency basis and excluding notable items, our revenue was $71.0bn , 5% higher compared with 2024. Our reported profit before tax was $29.9bn . On a constant currency basis and excluding notable items, we grew our profit before tax by 7% to $36.6bn . We continue to grow our deposit base. On a constant currency basis, customer deposits increased by $68bn during 2025 and reached $1.8tn as at 31 December 2025. In 2025, we achieved a RoTE of 13.3% . Excluding the impact of notable items, RoTE was 17.2% , achieving our RoTE target of ‘mid- teens or better’. We delivered a 15.6% RoTE excluding notable items in 2024. Our strong performance in 2025 allowed us to announce ordinary dividends of $0.75 per share to our shareholders, compared with $0.66 in 2024. CIB $11.4bn RoTE excluding notable items ø 17.2% (2024: 15.6% ) Reported profit before tax by business segment ($bn) IWPB $4.4bn HK $9.6bn UK $6.7bn Reshaping and focusing the Group We continued to make progress in reshaping the Group. We announced a further 11 exits in 2025. These included our business in Malta, Sri Lanka retail banking, our UK life insurance business, our Germany custody and fund administration businesses, our stake in Grupo Financiero Galicia, our French retained portfolio of home and certain other loans, our Uruguay business, our Bangladesh retail banking business, equity capital markets (‘ECM’) and mergers and acquisitions (‘M&A’) in the US, UK and Europe, and our Bahrain retail banking unit . The targeted strategic reviews of our retail businesses in Australia, Indonesia and Egypt remain underway, on which no decisions have been made. We remain committed to our wholesale banking activities in these markets. In addition, we commenced a strategic review of HSBC Life Singapore. We completed the privatisation of Hang Seng Bank on 26 January 2026. This transaction will further simplify the Group and deepen our presence in one of our home markets where we are already the market leader. We are committed to serving Hong Kong with two iconic brands. We intend to retain Hang Seng Bank as a separately-licensed bank with its own governance, brand, distinct customer proposition and branch network. We aim to strengthen both the HSBC and Hang Seng brands by focusing on their competitive advantages, while allowing customers to choose where to bank. Connectivity – our key strength Connectivity distinguishes HSBC. We have four deeply-connected businesses that complement each other. CIB and IWPB are leading global franchises that serve the Group by providing a wide range of products and capabilities. Hong Kong and the UK are our home markets where we have substantial retail and wholesale distribution networks. Our customers choose us because we are a trusted bank with extensive international connectivity. We connect customers across borders in our 56 markets. We are well placed to help our clients manage increased complexity as global trade reconfigures, and their wealth and investment needs globally. We partner with our clients for the long term as their business and wealth grow over time. We are one of the few global universal banking franchises that offer our clients a full banking product suite and services for their diverse financial needs. We serve clients from small businesses to global institutions, from retail customers to ultra-high net worth individuals. As our customers grow, they grow with us. HSBC Holdings plc Annual Report on Form 20-F 13 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Strategy Our home markets Hong Kong Our Hong Kong business generated revenue of $15.9bn in 2025, growing by 6% on a constant currency basis. We have the market- leading banking franchise in Hong Kong 1 . Our deposit base grew by 7% to over $540bn, maintaining our number one position in market share 1 in Hong Kong at 25.4% 2 . We also consistently lead peers in customer satisfaction, retaining the number one position in strategic net promoter scores (‘NPS’) 3 . In our Commercial Banking (‘CMB’) business, we focused on strengthening our market position across multiple products. In trade finance, we maintained our strong performance with a market share of 32.6% 2 . We continued to solidify and grow our Retail Banking and Wealth (‘RBW’) business. We welcomed over 1.1 million new-to-bank customers, bringing the total to over seven million 4 , and we opened five new Wealth Centres in 2025. These achievements reflect our ongoing commitment to growth, customer satisfaction and long-term value creation. UK Our UK business delivered revenue of $12.9bn in 2025, an increase of 5% on a constant currency basis, supported by robust balance sheet growth, with customer loans increasing by 6% to over $300bn. We continue to support key growth sectors in the UK economy, with our CMB business voted the ‘Best Bank for Corporates’ in the UK by Euromoney for the second consecutive year. We see an opportunity to build share in the small and medium-sized enterprise (‘SME’) segment and have introduced fee-free banking for SME clients. In our RBW business, we aim to support customers to manage and grow their wealth. Following the relaunch of our Premier proposition, we rolled out ‘Funds on Mobile’ to make it easier for customers to buy, sell and trade funds via the HSBC app, in addition to opening two new Wealth Centres. We continued to build on our mortgage franchise, growing balances by $9bn on a constant currency basis, taking market share to 8.1% 5 . 32.6% Trade finance market share in Hong Kong 2 8.1% Mortgage market share in the UK 5 1 HSBC internal analysis based on HSBC Group deposit balances in Hong Kong as of 30 June 2025, and the financial data presented in the 2Q25 interim financial reports of 12 selected peer banks. 2 Market share refers to HSBC Group balances in Hong Kong compared with the HKMA Hong Kong market data as of December 2025. 3    Strategic NPS ranking based on a survey by third-party vendors, InMoment and MDRi Asia Limited. Scores pertain to our Retail Banking and Wealth business only. 4    New-to-bank and total customer numbers exclude Hang Seng Bank customers. 5    Source: Bank of England. Retail mortgages only. Our network business Corporate and Institutional Banking In CIB, revenue was $27.6 bn, an increase of 3% compared with 2024 on a constant currency basis. HSBC continued to be a leading global wholesale transaction bank. Bank-wide, we generated $10.9bn of wholesale transaction banking fees and other income in 2025, which was 4% higher compared with 2024. We also grew our deposits by $10bn in 2025, bringing the total to $600bn. We facilitated around $900bn in trade 6 , and were ranked number one in 21 markets around the world 7 . In Global Payments Solutions (‘GPS’), HSBC was recognised as the number one Global Cash Management service provider in products, service and technology 8 . In Foreign Exchange, we were named the ‘World’s Best FX Bank for Corporates’ 9 . In addition, we were recognised as ‘Asia’s Best Bank for Securities Services’ by Euromoney. We continued to invest in innovative technologies to help build a bank for the future. We launched a Tokenised Deposit Service in four markets, enabling continuous access to real-time settlement for corporate clients. International Wealth and Premier Banking In IWPB, revenue was $14.5bn, an increase of 5% compared with 2024 on a constant currency basis. We continued to execute our bank-wide Wealth strategy in 2025. Our Premier 3.0 service is now live in seven markets and we opened 29 new Wealth Centres across the Group, including seven in our home markets. Bank-wide Wealth fee and other income was $9.4bn, up 24% on a constant currency basis, delivering on our ambition of ‘double-digit’ growth. At 31 December 2025, wealth balances across all our businesses were $2.1tn, of which $1.2tn was booked in Asia, making us a leading wealth manager in the region. We attracted bank-wide net new invested assets of $80bn in 2025, with $39bn booked in Asia. In our insurance business, our insurance manufacturing contractual service margin (‘CSM’) grew by 21% to $14.6bn, which is a store of potential future revenue for us. c.$900bn Trade volumes facilitated 6 $2.1tn Wealth balances increased by 16% compared with 2024 6 HSBC internal management information. 7    Source: Euromoney Trade Finance Survey in 2025. 8 Source: Euromoney Cash Management Survey 2025. 9 Source: Euromoney Foreign Exchange Awards 2025. Performance across geographies We have an established presence in a number of markets globally. We are particularly focused on mainland China, India, Singapore and the UAE. These markets are especially well connected to international trade, wealth and investment flows and are key to our strategy. In 2025, we reported profit before tax of $1.1bn in our mainland China business, including a loss of $2.1bn related to the dilution and impairment of our associate BoCom. We continued to support our customers expanding internationally, where we serve approximately half of Fortune Global 500 companies. We were recognised as the ‘Best International Bank’ by Euromoney in 2025. We continued to perform strongly in Wealth, where Wealth invested assets grew by 37% compared with 2024, driven by strong wealth distribution and growth in Private Banking. In Singapore, we generated profit before tax of $1.5bn, and we remain the largest foreign bank 10 . Singapore is our primary wholesale offshore booking centre and wealth hub within the ASEAN region. In 2025, we were recognised by Euromoney as the ‘Best Bank for Large Corporates’. Singapore, where we opened two new Wealth Centres, is our largest Wealth business outside our home markets and fast growing. Wealth fee and other income grew by 27% and our Wealth invested assets surpassed $100bn for the first time. 10 Based on 9M25 profit before tax, using peers’ published results. HSBC Holdings plc Annual Report on Form 20-F 14 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Strategy Performance across geographies (continued) In India, we reported a profit before tax of $1.9bn and continued to be the largest foreign bank 1 . We are the leading bank for multinational companies, of which around 50% bank with us 2 . We launched HSBC Innovation Bank with a $1bn financing pool and launched new digital propositions in Payments and Trade. Our ECM issuance grew more than 60% in 2025. We expanded to four new cities with wealth and international potential, remained the top wealth manager across foreign banks 3 and were the first bank to launch international wealth solutions in GIFT City 4 . In the UAE, we generated $0.8bn in profit before tax, and are the largest foreign bank 5 . We continued to further strengthen our leadership in Corporate and Institutional Banking. We were named ‘Best Investment Bank’ in the Middle East 6 , including being top ranked in debt capital markets in the region for the fifth consecutive year 7 . Our UAE wealth business saw strong growth, with invested assets up 33% and international new-to-bank customers up 12%. In 2025, we launched Premier 3.0, opened a new Wealth Centre, and introduced 10 new asset management funds. 1    HSBC internal analysis based on 1H25 revenue, deposits and advances, using peers’ published results. 2    Source: Ministry of Commerce of India. 3    By Wealth AUM. Source: Indian Mutual Fund Industry. 4    Gujarat International Finance Tec-City. 5    HSBC internal analysis based on 9M25 revenue, deposits and advances, using peers’ published results. 6    Euromoney Awards for Excellence 2025. 7    Source: Bloomberg league table. Deposit strength core to our strategy The strength of our franchise is built on the solid foundation of our $1.8tn deposit base, which is comprised primarily of current and savings accounts. We are proud of our deposit strength, which is a product of the trust of our customers and an important source of funding for us, and forms the foundation of our financial stability. We have customer loans of $1.0tn, excluding held for sale assets, representing 55% of customer deposits. We operate with a surplus of customer deposits relative to loans in each of our four franchises and in our major operating entities, including The Hongkong and Shanghai Banking Corporation Limited, HSBC UK and HSBC Bank plc. $1.8tn Customer deposit balances (2024: $1.7tn) Improving operational excellence through artificial intelligence In 2025, we accelerated the adoption of Generative AI (‘GenAI’) across HSBC, moving from experimentation to scaled delivery. Today, we have over 100 GenAI solutions in use and a strong pipeline of use cases in development. Our adoption of AI is underpinned by our people, and we continue to invest in training and tooling to support staff in their roles. Around the globe, around 85% of our colleagues have access to our large language model-based productivity tool, HSBC Productivity Suite, which helps them to analyse and translate documents, summarise information and generate insights. While the progress this year has been significant, the opportunity ahead is far greater. Our strategic partnership with Mistral strengthens our commitment to scale GenAI capabilities and we will continue to prioritise areas that matter most to our customers and colleagues, and drive performance. Through 2026, we intend to expand enterprise-wide adoption of AI tools and strive to embed AI deeper into our core processes. >100 GenAI solutions in use Our ambitions Revenue growth rising to 5% YoY We are focused on growth opportunities within our strategy that play to our strengths, while maintaining tight cost discipline and continuing to invest in growth and efficiency. We are targeting revenue growth rising to 5% year-on-year by 2028 on a constant currency basis excluding notable items. We see growth opportunities in each of our four businesses. In Hong Kong, we intend to consolidate market leadership with the privatisation of Hang Seng Bank. In the UK, we see the opportunity to continue building our mortgage franchise and build share in SME banking. In IWPB, we intend to particularly focus on building our successful wealth business, especially in Asia and the Middle East. In CIB, the opportunities include further expanding our international network business and transaction banking. Having simplified our approach to now include a revenue growth target, we no longer provide separate guidance on Wealth fee and other income growth. RoTE of 17% or better Underpinned by the momentum in our earnings and the positive progress we are making in our strategic execution, we are targeting a RoTE excluding notable items of 17% or better for each of 2026, 2027 and 2028. Capital generation Our business model is designed to be highly capital generative. In 2025, our CET1 capital ratio was 14.9%, remaining stable compared with 31 December 2024. During the calendar year, we paid $5.2bn ordinary dividends with respect to 2025, and we expect to pay a further $7.7bn through the fourth interim dividend with respect to 2025. We aim to maintain a CET1 capital ratio in the range of 14-14.5% over the medium term 8 . Capital may fall below our target range during the first half of 2026 owing to the privatisation of Hang Seng Bank. We plan to address this through organic capital generation and pausing share buy-backs until CET1 capital is back within or above this range. A decision to recommence buy-backs will be subject to our normal buy- back considerations and process on a quarterly basis. Our primary use of capital generation is to pay an ordinary dividend of 50% of profit attributable to ordinary shareholders, excluding material notable items and related impacts (our dividend payout ratio target basis 9 ). Our preferred use of capital after paying the dividend is to support the growth of our four businesses. Our targets for 2026-2028 Rising to 5% Revenue growth YoY by 2028, on a constant currency basis excluding notable items 9 17% or better RoTE excluding notable items target for 2026, 2027 and 2028 9 50% Dividend payout ratio target basis, 2026-2028 9 8 Medium term is defined as 3-5 years from 1 January 2026. 9    We do not reconcile our forward guidance on revenue on a constant currency basis excluding notable items, RoTE excluding the impact of notable items or dividend payout ratio target basis to their equivalent reported measures. HSBC Holdings plc Annual Report on Form 20-F 15 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial overview Performance compared with our 2025 Group financial targets Return on average tangible equity excluding notable items ø 17.2% (2024: 15.6%) In 2025, RoTE was 13.3% , a decrease of 1.3 percentage points from 2024. For the purposes of measuring performance against our Group target, we adjust RoTE to exclude notable items. RoTE excluding notable items was 17.2% , an increase of 1.6 percentage points compared with 2024 and above our mid-teens target for 2025. To better align with market practice, from our 2025 full-year results we no longer adjust the ‘average tangible equity‘ for the post-tax impact of notable items in each period. We have re-presented comparatives on the revised basis. This revision improved RoTE excluding notable items by 16bps in 2025. In 2024, this revision had a 34bps adverse impact. Ñ Se e pages 65 and 107 for fur ther detail on RoTE excluding notable items. Ñ See page 65 for further details on notable items. Target basis operating expenses ø $33.5bn (2024: $32.5bn ) In 2025, operating expenses of $36.4bn increased by $3.4bn or 10% , on a reported basis. Target basis operating expenses grew by 3% compared with 2024 in line with our target of approximately 3%. This primarily reflected higher planned spend in technology, higher performance-related pay and the impact of inflation. Our target basis operating expenses exclude the direct cost impact of the business disposals in Canada and Argentina, notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency. Our target basis operating expenses included the impact of simplification-related savings associated with our reorganisation, which generated $0.6bn of cost reductions in 2025. We are on track to have taken actions to deliver our $1.5bn annualised cost reduction by the end of June 2026, which is six months earlier than planned. Ñ See page 109 for a reconciliation of target basis operating expenses to reported operating expenses. Capital and dividend policy CET1 ratio 14.9% (2024: 14.9% ) Dividend payout ratio in respect of 2025 50% on a dividend payout ratio target basis ø At 31 December 2025, our CET1 capital ratio was 14.9 %, which was higher than our medium-term target range of 14% to 14.5%. We intend to continue to manage the CET1 ratio within this range. The total dividend per share announced in respect of 2025 was $0.75. On a dividend payout ratio target basis this resulted in a payout ratio of 50% of earnings per share. For the purposes of computing our target basis dividend payout ratio, we exclude from earnings per share material notable items and related impacts. Ñ See page 110 for a reconciliation of basic earnings per share excluding material notable items and related impacts to basic earnings per share. Basis of presentation Constant currency performance Constant currency performance is computed by adjusting reported results of comparative periods for the effects of foreign currency translation differences, which distort period- on-period comparisons. Constant currency performance provides useful information for investors by aligning internal and external reporting, reflecting how management assesses period-on-period performance. Notable items and material notable items We separately disclose ‘notable items‘, which are components of our income statement that management considers as outside the normal course of business and generally non-recurring in nature. Certain notable items are classified as ‘material notable items’, a subset of notable items. Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement, and are excluded from our target basis dividend payout ratio calculation and earnings per share measure. Material notable items in 2025 or relevant comparative periods relate to the following: – Income statement impacts associated with actions to exit or wind down certain businesses to redeploy costs from non- strategic activities (reported under ‘Disposals, wind-downs, acquisitions and related costs’ in notable items). – Dilution and impairment losses on our investment in BoCom. – A legal provision following developments in a claim in Luxembourg relating to the Bernard L. Madoff Investment Securities LLC fraud. Impact of strategic transactions To aid the understanding of our results, we separately disclose the impact of strategic transactions classified as material notable items on the results of the Group and our business segments. The distorting impact of the operating income statement results related to acquisitions and disposals that affect period- on-period comparisons primarily related to our disposals in Canada and Argentina. Management view of revenue on a constant currency basis We provide breakdowns of revenue for each of our business segments on a constant currency basis by major product. These reflect the basis on which revenue performance of the businesses is assessed and managed. In the management view of revenue, notable items are presented separately. We group certain products in a consistent manner across our business segments. Wholesale transaction banking comprises our Global Foreign Exchange, Global Payments Solutions (‘GPS’), Global Trade Solutions (‘GTS’) and Securities Services businesses. Wealth comprises our Investment Distribution, Insurance, Private Bank and Asset Management businesses. On page 18 , we provide a summarised management view of revenue for the Group‘s results to supplement the Group‘s reported revenue performance using the product grouping used to manage and assess our segmental performance. Ñ See pag e 92 for further d etails on the impact of strategic transactions. Ñ See page 65 for further details on basis of preparation and use of alternative performance measures. Ñ See p ages 88 to 90 and pages 97 to 102 for details of notable items in our business segments and legal entities. HSBC Holdings plc Annual Report on Form 20-F 16 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial overview Key financial metrics For the year ended 31 Dec Reported results 2025 2024 2023 Profit before tax ($m) 29,907 32,309 30,348 Profit after tax ($m) 23,131 24,999 24,559 Net operating income before change in expected credit losses and other credit impairment charges (‘revenue’) ($m) 68,274 65,854 66,058 Cost efficiency ratio (%) 53.4 50.2 48.5 Net interest margin (%) 1.59 1.56 1.66 Basic earnings per share ($) 1.21 1.25 1.15 Diluted earnings per share ($) 1.20 1.24 1.14 Dividend per ordinary share (in respect of the period) ($) 1 0.75 0.87 0.61 Dividend payout ratio (%) 2 50 50 50 Alternative performance measures ø Constant currency profit before tax ($m) 29,907 32,384 29,802 Constant currency revenue ($m) 68,274 66,009 65,040 Constant currency banking net interest income ($m) 44,084 43,550 42,515 Constant currency cost efficiency ratio (%) 53.4 50.2 48.7 Constant currency profit before tax excluding notable items ($m) 36,617 34,181 32,841 Constant currency revenue excluding notable items ($m) 71,020 67,591 64,835 Constant currency profit before tax excluding notable items and strategic transactions ($m) 36,617 33,768 N/A Constant currency revenue excluding notable items and strategic transactions ($m) 71,020 66,377 N/A Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers, including held for sale (%) 0.39 0.34 0.31 Basic earnings per share excluding material notable items and related impacts ($) 1.51 1.31 1.22 Return on average ordinary shareholders’ equity (annualised) (%) 12.3 13.6 13.6 Return on average tangible equity (annualised) (%) 13.3 14.6 14.6 Return on average tangible equity excluding notable items (annualised) (%) 17.2 15.6 16.0 Target basis operating expenses ($m) 33,464 32,478 N/A At 31 Dec Balance sheet 2025 2024 2023 Total assets ($m) 3,233,034 3,017,048 3,038,677 Net loans and advances to customers ($m) 988,399 930,658 938,535 Constant currency net loans and advances to customers ($m) 988,399 970,778 955,706 Customer accounts ($m) 1,786,828 1,654,955 1,611,647 Constant currency customer accounts ($m) 1,786,828 1,719,240 1,641,000 Average interest-earning assets, year to date ($m) 2,190,078 2,099,285 2,161,746 Loans and advances to customers as % of customer accounts (%) 55.3 56.2 58.2 Total shareholders’ equity ($m) 198,225 184,973 185,329 Tangible ordinary shareholders’ equity ($m) 165,153 154,295 155,710 Net asset value per ordinary share at period end ($) 10.36 9.26 8.82 Tangible net asset value per ordinary share at period end ($) 9.64 8.61 8.19 Capital, leverage and liquidity Common equity tier 1 capital ratio (%) 3,4 14.9 14.9 14.8 Risk-weighted assets ($m) 3,4 888,647 838,254 854,114 Total capital ratio (%) 3,4 20.5 20.6 20.0 Leverage ratio (%) 3,4 5.3 5.6 5.6 High-quality liquid assets (liquidity value) ($m) 4,5 702,123 649,210 647,505 Liquidity coverage ratio (%) 4,5 137 138 136 Net stable funding ratio (%) 4,5 143 143 138 Share count Period end basic number of $0.50 ordinary shares outstanding, after deducting own shares held (millions) 17,140 17,918 19,006 Period end basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares, after deducting own shares held (millions) 17,276 18,062 19,135 Average basic number of $0.50 ordinary shares outstanding, after deducting own shares held (millions) 17,427 18,357 19,478 Ñ For reconciliation and analysis of our reported results on a constant currency basis, including lists of notable items, see page 88 . Definitions and calculations of other alternative performance measures are included in ‘Reconciliation of alternative performance measures’ on page 106 . 1 In 2024, dividend per share includes the special dividend of $0.21 per ordinary share arising from the proceeds of the sale of our banking business in Canada to Royal Bank of Canada. 2 Our dividend payout ratio is adjusted for material notable items and related impacts, including all associated income statement impacts relating to those items. 3 Regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation in force at the time. Effective 1 January 2025, the IFRS 9 transitional arrangements came to an end, followed by the end of the CRR II grandfathering provisions on 28 June 2025. 4 Regulatory numbers and ratios are as presented at the date of reporting. Small changes may exist between these numbers and ratios and those submitted in regulatory filings. Where differences are significant, we may restate in subsequent periods. 5 The liquidity coverage ratio is based on the average value of the preceding 12 months. The net stable funding ratio is based on the average value of four preceding quarters. HSBC Holdings plc Annual Report on Form 20-F 17 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial overview Income statement results 2025 compared with 2024 Movement in reported profit before tax compared with 2024 2025 2024 2023 2025 vs 2024 of which strategic transactions 1 Reported results $m $m $m $m % $m Revenue 68,274 65,854 66,058 2,420 4 (1,936) –  of which: net interest income 34,794 32,733 35,796 2,061 6 (1,628) ECL (3,850) (3,414) (3,447) (436) (13) 87 Net operating income 64,424 62,440 62,611 1,984 3 (1,849) Total operating expenses (36,428) (33,043) (32,070) (3,385) (10) 606 Operating profit 27,996 29,397 30,541 (1,401) (5) (1,243) Share of profit in associates and joint ventures less impairment 1,911 2,912 (193) (1,001) (34) Profit before tax 29,907 32,309 30,348 (2,402) (7) (1,243) Tax expense (6,776) (7,310) (5,789) 534 7 Profit after tax 23,131 24,999 24,559 (1,868) (7) Revenue excluding notable items ø 71,020 67,434 65,723 3,586 5 Profit before tax excluding notable items ø 36,617 34,122 33,198 2,495 7 1 For details, see ‘Strategic transactions supplementary analysis‘ on page 92 . Reported profit Reported profit before tax of $29.9bn was $2.4bn or 7% lower, mainly due to a $4.9bn year-on-year net adverse impact from notable items. In 2025, notable item impacts included recognition of dilution and impairment losses of $2.1bn related to BoCom, reserve recycling losses of $1.5bn following the completion of the sale of our French retained portfolio of home and certain other loans, legal provisions of $1.4bn and restructuring and other related costs associated with our organisational simplification of $ 1.0 bn. In 2024, these included a gain of $4.8bn on the disposal of our banking business in Canada and the impacts of the disposal of our business in Argentina, comprising a $1.0bn loss on disposal, and the recycling of foreign currency reserve losses and other reserves of $5.2bn. They also included a $0.2bn loss on the early redemption of legacy securities. On a constant currency basis, profit before tax of $29.9bn was $2.5bn lower than in 2024, while excluding notable items it increased by $2.4bn or 7% . Reported revenue Reported revenue of $68.3bn was $2.4bn or 4% higher, reflecting strong fee and other income growth. This was partly offset by a net adverse movement in notable items of $1.2bn , primarily relating to business disposals, as well as a dilution loss of $1.1bn following the completion of BoCom’s capital issuance in June 2025, which reduced our interest from 19.03% to 16.00%. Revenue excluding notable items increased by $3.6bn , primarily reflecting higher fee and other income in Wealth and Wholesale Transaction Banking, as well as from the non- recurrence of adverse hyperinflationary impacts in Argentina. In Wealth, there was a strong performance in Insurance, due to a higher CSM release, reflecting strong new business growth and favourable net investment returns and experience variances, and growth in our Private Bank and investment distribution from higher customer activity. In Wholesale Transaction Banking, fee and other income growth reflected a strong performance in 2025, particularly in Global Foreign Exchange amid elevated market volatility. Net interest income NII increased by $2.1bn reflecting the benefit of the reinvestment of our structural hedge at higher yields, deposit balance growth and higher NII in Markets Treasury. In addition, the increase reflected the non-recurrence of a $0.2bn loss in 2024 on the early redemption of legacy securities. This was partly offset by the adverse impact of $1.6bn from business disposals in Argentina and Canada, and margin compression on our deposits from lower interest rates. The growth in NII also reflected a benefit from lower funding costs associated with the trading book of $1.7bn . Banking NII, which excludes these funding costs, increased by $0.3bn . On a constant currency basis, revenue increased by $2.3bn or 3% and banking NII rose by $0.5bn . Notable items – on a reported basis 2025 2024 2023 $m $m $m Revenue Disposals, wind-downs, acquisitions and related costs 1 (1,642) (1,343) 1,298 Dilution loss of interest in BoCom associate (1,104) — — Fair value movements on financial instruments — — 14 Disposal losses on Markets Treasury repositioning — — (977) Early redemption of legacy securities — (237) — Currency translation on revenue notable items — (2) (130) Operating expenses Disposals, wind-downs, acquisitions and related costs (502) (199) (321) Restructuring and other related costs (1,030) (34) 136 Legal provisions (1,432) — — Currency translation on operating expenses notable items — 18 — Share of profit in associates and joint ventures less impairment Impairment losses of interest in BoCom associate (1,000) — (3,000) Currency translation on associate notable items — — (59) 1 2024 includes losses of $0.2bn related to the sale of our business in Russia, which are not categorised as a material notable item. HSBC Holdings plc Annual Report on Form 20-F 18 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial overview Reported ECL Reported ECL charges of $3.9bn were $0.4bn or 13% higher than 2024, including charges in both periods related to the CRE sectors in Hong Kong and mainland China. In 2025, the charge in this sector in Hong Kong of $0.7bn (2024: $0.1bn) reflected higher allowances for new defaulted exposures, the impact of an over-supply of non-residential properties that has put continued downward pressure on rental and capital values, and updates to our models used for ECL calculations. The 2025 charge in the mainland China CRE sector was $0.2bn (2024: $0.4bn). Ñ For further details of the calculation of ECL, see pages 157 to 160 . Reported operating expenses Reported operating expenses of $36.4bn were $3.4bn or 10% higher. The increase primarily reflected notable items in 2025, including legal provisions of $1.4bn , restructuring and other related costs in 2025 of $1.0bn and $0.5bn related to disposals, wind-downs, acquisitions and related costs. The remaining growth in reported operating expenses included higher planned spend and investment in technology, higher performance- related pay and the impacts of inflation. These increases were partly offset by reductions following the completion of business disposals in Canada and Argentina, and the benefits delivered by our restructuring activities. Target basis operating expenses were $33.5bn or 3% higher than in 2024 due to higher planned spend and investment in technology and the impact of inflation. Reported share of profit in associates and joint ventures less impairment of $1.9bn was $1.0bn or 34% lower, primarily due to an impairment loss of $1.0bn recognised on BoCom following our value-in-use assessment made in 2025. Ñ For further details on our value-in-use assessment, see Note 18 : Interests in associates and joint ventures on page 345 . Tax expense In 2025 tax expense was a charge of $6.8bn , representing an effective tax rate of 22.7% (2024: 22.6% ). Excluding the non-deductible impairment and dilution loss in BoCom and legal provisions on which no tax benefit is recorded, the effective rate for 2025 was 20.6% (2024: 21.5%, excluding the impact of the non-taxable gains and losses on the sale of our banking business in Canada and our business in Argentina). Ñ For further details on tax expense, see page 70 . Supplementary management view of revenue ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 1 $m $m $m $m % $m Banking NII 2 44,084 43,975 44,095 109 0 (1,603) Fee and other income 26,936 23,459 21,628 3,477 15 128 –  Wealth 9,390 7,559 6,339 1,831 24 (164) –  Wholesale Transaction Banking 10,860 10,433 10,654 427 4 (171) –  Other 6,686 5,467 4,635 1,219 22 463 Revenue excluding notable items 71,020 67,434 65,723 3,586 5 (1,475) Notable items (2,746) (1,580) 335 (1,166) (74) (461) Revenue 68,274 65,854 66,058 2,420 4 (1,936) 1 For details , see ‘Strategic transactions supplementary analysis‘ on page 92 . 2 For a reconciliation of banking NII to reported NII, see page 69 . In the supplementary management view of revenue, banking NII in 2024 excludes notable items of $0.2bn, which are separately presented in ‘notable items’. There were no notable items in banking NII in 2025 or 2023. Movement in reported profit before tax compared with 2024 – constant currency basis 2025 2024 2023 2025 vs 2024 of which strategic transactions 1 Results – on a constant currency basis ø $m $m $m $m % $m Revenue 68,274 66,009 65,040 2,265 3 (1,681) ECL (3,850) (3,392) (3,250) (458) (14) 72 Total operating expenses (36,428) (33,146) (31,691) (3,282) (10) 417 Operating profit 27,996 29,471 30,099 (1,475) (5) (1,192) Share of profit in associates and joint ventures less impairment 1,911 2,913 (297) (1,002) (34) — Profit before tax 29,907 32,384 29,802 (2,477) (8) (1,192) Revenue excluding notable items 71,020 67,591 64,835 3,429 5 Profit before tax excluding notable items 36,617 34,181 32,841 2,436 7 1  For details, see ‘Strategic transactions supplementary analysis‘ on page 92 . Balance sheet and capital Balance sheet strength Total assets of $3.2tn were $216bn higher than at 31 December 2024 on a reported basis, and $93bn higher on a constant currency basis. The increase was driven by growth in financial investments balances, higher trading assets and reverse repurchase agreements and higher other asset balances. This was partly offset by lower cash and balances at central banks due to redeployment opportunities and a decrease in derivative assets. Loans and advances to customers also increased, and as a percentage of customer accounts they were 55.3% , compared with 56.2% at 31 December 2024 (excluding balances classified as held for sale). Given customer loan growth has been muted in recent years, we will no longer provide guidance on medium- to long-term customer lending growth. Ñ For detailed balance sheet commentary, see page 74 . Distributable reserves The distributable reserves of HSBC Holdings at 31 December 2025 were $46.2b n, a $17.9 bn increase since 31 December 2024, primarily driven by $22.1b n in profits and other reserve movements generated in 2025, cancellation of $16.6b n standing to the credit of its share premium and capital redemption reserves pursuant to the Court approval obtained by HSBC Holdings on 24 June 2025, offset by $20.8 bn of dividends on ordinary shares, additional tier 1 coupon and share buy- back payments. Capital and liquidity position Our CET1 ratio at 31 December 2025 remained at 14.9% , unchanged from 31 December 2024. The average high-quality liquid assets (‘HQLA’) we held was $702.1bn (31 December 2024: $ 649.2 bn). This excludes HQLA in legal entities that are not transferable due to local restrictions. Ñ For further details, see ‘Capital overview‘ on page 191 . HSBC Holdings plc Annual Report on Form 20-F 19 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments Hong Kong Our Hong Kong business has a leading market position in our home market of Hong Kong. It comprises Retail Banking and Wealth and Commercial Banking of HSBC Hong Kong and Hang Seng Bank. Contribution to Group profit before tax ø $9.6bn Calculation is based on profit before tax of our business segments excluding Corporate Centre. Divisional highlights 40% 7% Growth in Wealth fee and other income compared with 2024, on a constant currency basis. ø Growth in deposits compared with 2024, on a constant currency basis. ø Results – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Revenue 15,878 15,047 14,532 831 6 — ECL (1,476) (1,077) (1,494) (399) (37) — Operating expenses (4,826) (4,841) (4,514) 15 — — Share of profit/(loss) from associates and joint ventures — — — — — — Profit before tax 9,576 9,129 8,524 447 5 — RoTE 1 (%) 35.5 37.5 34.7 RoTE excluding notable items 1 (%) 35.5 37.5 36.4 Management view of revenue – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Banking NII 3 12,082 11,997 12,108 85 1 — Fee and other income 4 3,796 3,050 2,798 746 24 — –  Retail Banking and Wealth 2,658 1,941 1,678 717 37 — –  Retail Banking 326 312 287 14 4 — –  Wealth 2,206 1,577 1,203 629 40 — –  Other 5 126 52 188 74 >100 –  Commercial Banking 1,138 1,109 1,120 29 3 — –  Wholesale Transaction Banking 730 709 692 21 3 — –  Credit and Lending 78 83 76 (5) (6) — –  Other 5 330 317 352 13 4 — Revenue excluding notable items 15,878 15,047 14,906 831 6 — Notable items — — (374) — n/a — Revenue 15,878 15,047 14,532 831 6 — 1    For details of our RoTE calculation by business segment, see page 108 . 2    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 92 . 3    For a description of how we derive banking NII, see page 65 . In the Hong Kong business, there are no adjustments to NII to derive banking NII. 4    For supplementary analysis of fee and other income, see page 91 . 5    Includes revenue from Markets Treasury. It also includes other non-product-specific income and notional tax credits. HSBC Holdings plc Annual Report on Form 20-F 20 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments Notable items 2025 2024 2023 $m $m $m Revenue Disposal losses on Markets Treasury repositioning — — (373) Currency translation on revenue notable items — — (1) Operating expenses Restructuring and other related costs (16) — — Currency translation on operating expenses notable items — — — Financial performance Profit before tax of $9.6bn increased by $0.4bn or 5% compared with 2024, on a constant currency basis. Revenue of $15.9bn was $0.8bn or 6% higher, on a constant currency basis. Banking NII of $12.1bn was broadly stable compared with 2024, as the benefit of growth in deposit balances was largely offset by margin compression on deposits in a lower interest rate environment, together with lower lending balances. Fee and other income of $3.8bn grew by $0.7bn or 24% , primarily reflecting an increase of $0.6bn or 40% in Wealth from a strong performance in investment distribution due to higher customer activity. ECL of $1.5bn increased by $0.4bn compared with 2024, on a constant currency basis, including charges in both periods related to the Hong Kong CRE sector. In 2025, the increased charge in this sector reflected higher allowances for new defaulted exposures, the impact of an over-supply of non-residential properties that has put continued downward pressure on rental and capital values, and updates to our models used for ECL calculations. Operating expenses of $4.8bn were stable, on a constant currency basis. This reflected lower operations costs, which were broadly offset by increases from planned higher spend on technology, including the development of our Wealth proposition, and the impact of inflation. Ñ For business segment financial performance commentary for the year ended 31 December 2024 compared with 31 December 2023, see pages 104 to 105 . HSBC Holdings plc Annual Report on Form 20-F 21 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments UK Our UK business has a leading market position in our home market of the UK. It comprises UK Retail Banking and Wealth (including first direct and M&S Bank) and UK Commercial Banking, including HSBC Innovation Bank. Contribution to Group profit before tax ø $6.7bn Calculation is based on profit before tax of our business segments excluding Corporate Centre. Divisional highlights 6% 7% Growth in loans and advances to customers compared with 2024, on a constant currency basis. ø Growth in banking NII compared with 2024, on a constant currency basis. 3 ø Results – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Revenue 12,938 12,342 13,439 596 5 — ECL (696) (415) (545) (281) (68) — Operating expenses (5,537) (5,104) (4,829) (433) (8) (7) Share of profit/(loss) from associates and joint ventures — — — — — — Profit before tax 6,705 6,823 8,065 (118) (2) (7) RoTE 1 (%) 22.6 25.0 33.3 RoTE excluding notable items 1 (%) 22.9 25.0 25.1 Management view of revenue – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Banking NII 3 11,096 10,355 9,903 741 7 — Fee and other income 4 1,842 1,987 2,036 (145) (7) — –  Retail Banking and Wealth 617 744 749 (127) (17) — –  Retail Banking 255 273 260 (18) (7) — –  Wealth 339 391 419 (52) (13) — –  Other 5 23 80 70 (57) (71) –  Commercial Banking 1,225 1,243 1,287 (18) (1) — –  Wholesale Transaction Banking 891 912 926 (21) (2) — –  Credit and Lending 238 216 178 22 10 — –  Other 5 96 115 183 (19) (17) — Revenue excluding notable items 12,938 12,342 11,939 596 5 — Notable items — — 1,500 — n/a — Revenue 12,938 12,342 13,439 596 5 — 1    For details of our RoTE calculation by business segment, see page 108 . 2    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 92 . 3    For a description of how we derive banking NII, see page 65 . In the UK business, there are no adjustments to NII to derive banking NII. 4    For supplementary analysis of fee and other income, see page 91 . 5    Includes revenue from Markets Treasury. It also includes other non-product-specific income, gains/(losses) on property disposals and notional tax credits. HSBC Holdings plc Annual Report on Form 20-F 22 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments Notable items 2025 2024 2023 $m $m $m Revenue Disposals, wind-downs, acquisitions and related costs — — 1,591 Disposal losses on Markets Treasury repositioning — — (142) Currency translation on revenue notable items — — 51 Operating expenses Disposals, wind-downs, acquisitions and related costs 1 6 (45) Restructuring and other related costs (70) 7 17 Currency translation on operating expenses notable items — — (3) Financial performance Profit before tax of $6.7bn was $0.1bn or 2% lower than 2024, on a constant currency basis. Revenue of $12.9bn was $0.6bn or 5% higher on a constant currency basis. Banking NII of $11.1bn increased by $0.7bn or 7% , despite reductions in interest rates. This increase was driven by the continued benefit of our structural hedge, as well as higher lending balances across mortgages and corporate lending and from growth in deposit balances, in line with the increase in the overall market size. These increases were partly offset by the impact of lower interest rates. Fee and other income of $1.8bn fell by 7% . – In Retail Banking and Wealth, fee and other incom e was lower reflecting an increased cost of customer rewards following the relaunch of HSBC Premier . – In Commercial Banking, lower business banking fees due to proposition changes were partly offset by higher corporate lending fees. ECL of $0.7bn increased by $0.3bn compared with 2024, on a constant currency basis. The increase reflected a more normalised level of ECL in 2025, as well as the non-recurrence of releases against retail exposures in 2024. Operating expenses of $5.5bn increased by $0.4bn or 8% , on a constant currency basis, including restructuring and other related costs associated with our organisational simplification of $0.1bn . The increase primarily reflected planned higher investment spend in technology, including on operational resilience . Ñ For business segment financial performance commentary for the year ended 31 December 2024 compared with 31 December 2023, see pages 104 to 105 . HSBC Holdings plc Annual Report on Form 20-F 23 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments Corporate and Institutional Banking Our CIB business is a market leader in cross-border transaction banking and capital markets. Contribution to Group profit before tax ø $11.4bn Calculation is based on profit before tax of our business segments excluding Corporate Centre. Divisional highlights 7% 16.2% Growth in fees and other income compared with 2024, on a constant currency basis. ø RoTE excluding notable items up 2.0 percentage points compared with 2024. ø Results – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Revenue 27,637 26,772 24,723 865 3 (638) ECL (696) (878) (524) 182 21 36 Operating expenses (15,556) (14,612) (13,755) (944) (6) 96 Share of profit/(loss) from associates and joint ventures 1 1 (1) — — — Profit before tax 11,386 11,283 10,443 103 1 (506) RoTE 1 (%) 14.9 14.2 14.3 RoTE excluding notable items 1 (%) 16.2 14.2 14.8 Management view of revenue – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Banking NII 3 14,532 14,519 13,399 13 0 (758) Fee and other income 4 13,114 12,267 11,701 847 7 129 –  Wholesale Transaction Banking 9,239 8,847 8,920 392 4 (137) –  Investment Banking 962 946 851 16 2 (26) –  Debt and Equity Markets 2,283 2,252 1,628 31 1 33 –  Wholesale Credit and Lending 567 626 668 (59) (9) (52) –  Other 5 63 (404) (366) 467 >100 311 Revenue excluding notable items 27,646 26,786 25,100 860 3 (629) Notable items (9) (14) (377) 5 36 (9) Revenue 27,637 26,772 24,723 865 3 (638) 1    For details of our RoTE calculation by business segment, see page 108 . 2    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 92 . 3    For a description of how we derive banking NII, see page 65 . In CIB, there are no adjustments to NII to derive banking NII. The internal funding costs of trading and fair value net assets are recorded in ’fee and other income’. On consolidation, this funding is eliminated in Corporate Centre. In 2025, this funding cost was $9.7bn (2024: $11.5bn). 4    For supplementary analysis of fee and other income, see page 91 . 5    Includes allocated revenue from Markets Treasury and hyperinflationary impacts. It also includes notional tax credits. HSBC Holdings plc Annual Report on Form 20-F 24 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments Notable items 2025 2024 2023 $m $m $m Revenue Disposals, wind-downs, acquisitions and related costs (9) (14) — Disposal losses on Markets Treasury repositioning — — (371) Currency translation on revenue notable items — — (6) Operating expenses Disposals, wind-downs, acquisitions and related costs (290) (10) (7) Restructuring and other related costs (348) (2) 45 Legal provisions (322) — — Currency translation on operating expenses notable items — 3 2 Financial performance Profit before tax of $11.4bn was $0.1bn or 1% higher than in 2024, on a constant currency basis. Revenue of $27.6bn was $0.9bn or 3% higher, on a constant currency basis, including the adverse impact of $0.6bn from strategic transactions. Banking NII of $14.5bn was broadly stable in comparison with 2024 including an adverse impact of $0.8bn from strategic transactions. Banking NII benefited from an increase in allocated revenue from Markets Treasury along with a strong growth of 8% in GTS, mainly in Asia. This was offset by a reduction in GPS due to the impact of lower interest rates, offsetting a 5% growth in average balances. Fee and other income of $13.1bn increased by $0.8bn or 7% . – In Wholesale Transaction Banking, fee and other income increased by $0.4bn or 4% , mainly due to strong trading performance in Global Foreign Exchange from elevated market volatility and Securities Services, reflecting improved market conditions and new clients. – In Debt and Equity Markets, fee and other income increased by 1% from elevated market volatility and strong client demand from both wealth and corporate clients within Equity Derivatives. – In Other, fee and other income increased by $0.5bn , largely due to the non-recurrence of adverse hyperinflationary impacts in Argentina. ECL of $0.7bn decreased by $0.2bn compared with 2024 on a constant currency basis. The decrease reflected lower charges in Asia, due to a reduction in ECL within the CRE sector in mainland China. Operating expenses of $15.6bn were $0.9bn or 6% higher than in 2024 on a constant currency basis, including a $0.1bn favourable impact from strategic transactions. The increase reflected the impact of notable items of $1.0bn, including restructuring and other related costs a ssociated with our organisational simplification of $0.3bn, legal provisions of $0.3bn, and costs associated with the wind-down of M&A and ECM activities in the UK, Europe and the US. Cost growth also reflected planned higher spend and investment in technology, and inflationary impacts. Ñ For business segment financial performance commentary for the year ended 31 December 2024 compared with 31 December 2023, see pages 104 to 105 . HSBC Holdings plc Annual Report on Form 20-F 25 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments International Wealth and Premier Banking Our IWPB business comprises Premier banking outside of Hong Kong and the UK, our Private Bank, Asset Management and Insurance businesses. Contribution to Group profit before tax ø $4.4bn Calculation is based on profit before tax of our business segments excluding Corporate Centre. Divisional highlights 22% 35% Growth in wealth fees and other income compared with 2024, on a constant currency basis. ø Growth in Insurance manufacturing new business CSM compared with 2024, up $0.9bn. Results – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Revenue 14,520 13,817 12,385 703 5 (590) ECL (892) (993) (686) 101 10 36 Operating expenses (9,285) (8,900) (8,549) (385) (4) 253 Share of profit/(loss) from associates and joint ventures 24 45 62 (21) (47) — Profit before tax 4,367 3,969 3,212 398 10 (301) RoTE 1 (%) 17.8 15.7 13.1 RoTE excluding notable items 1 (%) 19.0 15.5 13.6 Management view of revenue – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Banking NII 3 7,000 7,640 7,288 (640) (8) (552) Fee and other income 4 7,593 6,151 5,391 1,442 23 61 –  Retail Banking 665 765 745 (100) (13) (41) –  Wealth 6,845 5,618 4,661 1,227 22 (143) –  Other 5 83 (232) (15) 315 >100 245 Revenue excluding notable items 14,593 13,791 12,679 802 6 (491) Notable items (73) 26 (294) (99) >(100) (99) Revenue 14,520 13,817 12,385 703 5 (590) 1    For details of our RoTE calculation by business segment, see page 108 . 2    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 92 . 3    For a description of how we derive banking NII, see page 65 . Banking NII in IWPB is computed by deducting third-party NII in our insurance business from total IWPB NII, which was $0.4bn in 2025 (2024: $0.4bn ). Total Insurance NII is presented in ‘fee and other income‘ in Wealth. 4    For supplementary analysis of fee and other income, see page 91 . 5    Includes allocated revenue from Markets Treasury and hyperinflationary impacts. It also includes other non-product-specific income. HSBC Holdings plc Annual Report on Form 20-F 26 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments Notable items 2025 2024 2023 $m $m $m Revenue Disposals, wind-downs, acquisitions and related costs (73) 28 4 Disposal losses on Markets Treasury repositioning — — (91) Currency translation on revenue notable items — (2) (207) Operating expenses Disposals, wind-downs, acquisitions and related costs (83) (3) (53) Restructuring and other related costs (161) (14) 11 Currency translation on operating expenses notable items — — — Financial performance Profit before tax of $4.4bn was $0.4bn higher than in 2024, on a constant currency basis. Revenue of $14.5bn was $0.7bn or 5% higher on a constant currency basis. This included an adverse impact of $0.6bn from strategic transactions. Banking NII of $7.0bn decreased by $0.6bn or 8% , primarily driven by the impact of strategic transactions of $0.6bn , and the effects of lower interest rates on deposits. This reduction was partly offset by growth in deposits and lending balances, mainly in Asia. Fee and other income of $7.6bn was up by $1.4bn or 23% , driven by Wealth due to broad-based growth across all products and in multiple markets, including Hong Kong, mainland China, Singapore, Taiwan and Mexico. In Wealth, fee and other income of $6.8bn was up $1.2bn or 22% , including an adverse impact of $0.1bn from strategic transactions. – Insurance increased by $0.6bn or 35% , reflecting a higher CSM release given continued year-on-year growth in our CSM balance and favourable net investment return and experience variances. The insurance manufacturing CSM balance at 31 December 2025 was $14.6bn, up $2.5bn or 21% compared with 31 December 2024. The increase primarily reflected new business CSM growth of $3.4bn or 35% and favourable market movements, partly offset by CSM release. – Private Bank increased by $0.2bn or 16% , as increased customer activity supported by business initiatives led to strong performances in brokerage and trading, and from higher annuity fees, driven by growth in invested asset balances. – Investment Distribution increased by $0.2bn or 24% driven by higher sales of mutual funds and structured products, mainly in Asia. In Other, fees and other income increased by $0.3bn largely due to the non-recurrence of adverse hyperinflationary impacts in Argentina. The net loss in notable items of $0.1bn in 2025 was primarily related to net losses on the disposals of our French and UK life insurance businesses, partly offset by gains on the sales of our private banking business in Germany and our retail operations in Bahrain. ECL of $0.9bn were broadly stable on a constant currency basis. Operating expenses of $9.3bn were $0.4bn or 4% higher than in 2024 on a constant currency basis, including a $0.3bn favourable impact from strategic transactions. The growth primarily reflected continued investments in Wealth, planned higher spend and investment in technology, and the impact of inflation. There was also a $0.1bn increase in restructuring and other related costs a ssociated with our organisational simplification . Ñ For business segment financial performance commentary for the year ended 31 December 2024 compared with 31 December 2023, see pages 104 to 105 . HSBC Holdings plc Annual Report on Form 20-F 27 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments Corporate Centre The results of Corporate Centre primarily comprise the financial impact of certain acquisitions and disposals and the share of profit from our interests in our associates and joint ventures and related impairments. It also includes Central Treasury, stewardship costs and consolidation adjustments. Financial performance Loss before tax of $2.1bn compared with a profit before tax of $1.2bn in 2024, on a constant currency basis, primarily due to the impact from notable items. In 2025, these included reserve recycling losses of $1.5bn following the completion of the sale of our French retained portfolio of home and certain other loans, legal provisions of $1.1bn , a $1.1bn loss from the dilution of our shareholding and a $1.0bn impairment to the carrying value of the Group’s interest in our associate BoCom. In 2024, notable items included a net loss of $1.4bn related to business disposals in Canada and Argentina, as well as a $0.2bn loss related to the early redemption of legacy securities. Ñ For further details of the dilution of our shareholding in BoCom and our impairment review process see Note 18 : Interests in associates and joint ventures on page 345 . Revenue was $0.7bn lower on a constant currency basis. This primarily reflected the impact of notable items, comprising the non- recurrence of notable items in 2024 as mentioned above, as well as the reserve recycling losses recognised following the sale of our French retained portfolio of home and certain other loans and the dilution loss related to BoCom, both in 2025. Banking NII increased by $0.1bn on a constant currency basis, primarily on the retained French portfolio of home and certain other loans, reflecting the effects of lower interest rates as well as disposal of the portfolio. Banking NII in 2025 removes from NII the internal cost to fund trading and fair value net assets, predominantly in CIB, of $9.7bn (2024: $11.5bn). Fee and other income of $0.6bn was $0.2bn higher, primarily due to fair value movements on financial instruments in Central Treasury and structural foreign exchange hedges, and the non-recurrence of an impairment in 2024 related to the sale of our operations in Armenia . Operating expenses of $1.2bn increased by $1.5bn on a constant currency basis, primarily reflecting a legal provision of $1.1bn and a rise in restructuring and other related costs associated with our organisational simplification of $0.4bn . Share of profit from associates and joint ventures less impairment of $1.9bn decreased by $1.0bn on a constant currency basis, primarily due to an impairment loss of $1.0bn referred to above. Ñ For business segment financial performance commentary for the year ended 31 December 2024 compared with 31 December 2023, see pages 104 to 105 . Results – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Revenue (2,699) (1,969) (39) (730) (37) (453) ECL (90) (29) (1) (61) >(100) — Operating expenses (1,224) 311 (44) (1,535) >(100) 75 Share of profit in associates and joint ventures less impairment 1,886 2,867 (358) (981) (34) — Profit/(loss) before tax (2,127) 1,180 (442) (3,307) >(100) (378) RoTE 1 (%) (5.6) 0.7 (1.0) RoTE excluding notable items 1 (%) 6.1 4.3 6.0 Management view of revenue – on a constant currency basis ø 2025 2024 2023 2025 vs 2024 of which strategic transactions 2 $m $m $m $m % $m Banking NII 3 (626) (726) (183) 100 14 105 Fee and other income 591 351 394 240 68 (199) Revenue excluding notable items (35) (375) 211 340 91 (94) Notable items (2,664) (1,594) (250) (1,070) (67) (359) Revenue 4 (2,699) (1,969) (39) (730) (37) (453) 1    For details of our RoTE calculation by business segment, see page 108 . 2    Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions‘ on page 91 . 3 For a description of how we derive banking NII, see page 65 . Corporate Centre banking NII includes funding charges on property and technology assets, and the banking NII of the French retained portfolio of home and other loans prior to disposal. Banking NII in 2024 excludes notable items of $0.2bn, which are separately presented in ‘notable items’. There were no notable items in banking NII in 2025 or 2023. 4 Revenue from Markets Treasury, HSBC Holdings net interest expense and hyperinflation are allocated out to the business segments, to align them better with their revenue and expense. The total Markets Treasury revenue component of this allocation for 2025 was $2.3bn (2024: $1.5bn ; 2023: $0.4bn ). Notable items 2025 2024 2023 $m $m $m Revenue Disposals, wind-downs, acquisitions and related costs (1,560) (1,357) (297) Dilution loss of interest in BoCom associate (1,104) — — Fair value movements on financial instruments — — 14 Early redemption of legacy securities — (237) Currency translation on revenue notable items — — 33 Operating expenses Disposals, wind-downs, acquisitions and related costs (130) (192) (216) Restructuring and other related costs (435) (25) 63 Legal provisions (1,110) — — Currency translation on operating expenses notable items — 15 — Impairment of interest in associate (1,000) — (3,000) Currency translation on associate notable items — — (59) HSBC Holdings plc Annual Report on Form 20-F 28 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information ESG overview Our approach to ESG is focused on creating long-term value for our customers and wider stakeholders. Our approach Our approach to ESG focuses on three main areas: the transition to net zero, building inclusion and resilience, and acting responsibly. Transition to net zero Our ambition is to become a net zero bank by 2050. Supporting our customers is core to our strategy and financing their transition is both critical to them and aligned to our net zero ambition. We want to be our customers’ most trusted international financial partner through the transition, creating long-term value for them and our shareholders. Our updated Net Zero Transition Plan Our updated Net Zero Transition Plan, published in November 2025, sets out our commercially-grounded approach to helping our customers succeed as the world moves towards net zero amid changing economic and geopolitical conditions. It intensifies our efforts to be customer-focused, commercial and agile . Our refreshed strategy supports the transition of our CIB customers, and Commercial Banking customers in the UK and Hong Kong, by directing our financing and capabilities to areas where we believe we can have the greatest impact on the real economy. Our aim is to support our customers’ transition by providing and facilitating between $750bn and $1tn of sustainable finance and investment by 2030. Targets and policies In our Net Zero Transition Plan, we also set out our updated interim financed emissions targets, metrics and associated policies, seeking to remain science-aligned and compatible with our own net zero ambition. Our ability to meet our ambitions, targets and commitments largely depends on the pace of our customers’ transition journeys in the real economy. In light of the latest credible industry-specific net zero pathways and decarbonisation rates, we have updated our interim sector-specific financed emissions targets from fixed targets to target ranges. We have also published a new Sustainability Risk Policies Framework, which details how we identify, evaluate and manage risks related to the delivery of our sustainability approach, and which sets out our sector-specific sustainability risk approach. It also includes our Thermal Coal Phase-Out Policy. Ñ For more details, see HSBC Net Zero Transition Plan at https://www.hsbc.com/who-we-are/our- climate-strategy/our-net-zero-transition-plan Building inclusion and resilience We seek to foster inclusion and build resilience to help create long-term value for all our stakeholders. For colleagues, we focus on creating an inclusive environment and offer resources that support well-being. In 2025, we achieved an Inclusion Index score of 78% against an ambition of 75%, as measured by our employee engagement survey, Snapshot. We work to improve accessibility through products that support customers experiencing challenges, such as disabilities, impairments, or significant life events, while also fostering financial education and well-being. Acting responsibly Our conduct approach guides us to do the right thing and focus on the impact we have on our customers and the financial markets in which we operate. Progress on our ESG metrics We have established ambitions and targets that guide how we do business, including how we operate and how we serve our customers. We set out below some of the key ESG metrics we use to measure progress against our ambitions. To help us achieve our ESG ambitions, a number of measures are included in the incentive scorecards of the Group CEO, Group CFO and Group Operating Committee members that underpin some of the ESG metrics in the table below. For a summary of how our non-financial metrics link to executive remuneration, see pages 253 - 256 of the Director’s remuneration report. Environment Social Governance Transition to net zero Building inclusion and resilience Acting responsibly Sustainable finance and investment Net zero in our own operations 1 Gender representation Black heritage Training $ 495.6 bn 84.9% 34.7% 3.0% 99% Cumulative total provided and facilitated since 1 January 2020 (2024: $393.6bn) Reduction in absolute operational greenhouse gas emissions from 2019 baseline (2024: 66.1%) Senior leadership roles held by women (2024: 34.6%) Senior leadership roles held by Black heritage colleagues in the UK and US combined (2024: 3.0%) Employees who completed conduct training in 2025 (2024: 99%) Ñ Read more on page 35 . Ñ Read more on page 47 . Ñ Read more on page 51 . Ñ Read more on page 51 . Ñ Read more on page 61 . Financed emissions 7 sectors Number of sectors where we have set interim financed emissions targets Ñ Read more on page 39 . 1 This absolute greenhouse gas emission figure covers scope 1, scope 2 and scope 3 (business travel) emissions only. HSBC Holdings plc Annual Report on Form 20-F 29 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information ESG overview Task Force on Climate-related Financial Disclosures (‘TCFD’) TCFD We have considered our ‘comply or explain’ obligation under both the UK Financial Conduct Authority’s Listing Rules 6.6.6R(8) (‘UKLR’) and Sections 414CA and 414CB of the UK Companies Act 2006 (‘CA 2006’), collectively referred to as the ‘TCFD requirements’ and Hong Kong Listing Rules (‘HKLR’) Appendix C2 ESG Reporting Code Part D climate-related disclosures (‘HKLR Part D’). We perform an assessment to ascertain the appropriate level of detail to be included in the climate-related financial disclosures set out in our Annual Report and Accounts 2025, as part of considering what to measure and publicly report. Our assessment takes into account factors such as the level of our exposure to climate- related risks and opportunities, the scope and objectives of our climate-related strategy, transitional challenges, and the nature, size and complexity of our business. See ‘How we decide what to measure’ on page 385 for further information. Many of the climate-related requirements are duplicated across both UKLR and HKLR Part D, and as a result we have streamlined our reporting approach where possible. We confirm that we have made disclosures consistent with the TCFD Recommendations and Recommended Disclosures, including its annexes and supplemental guidance, save for one item: we do not plan to set short-term targets for financed emissions, sustainable finance or our own operations as our overall climate strategy is focused on our ambition to become a net zero bank by 2050. We have set interim financed emissions 2030 targets and a sustainable finance and investment ambition by 2030. Further information can be found on pages 35 and 41 . We disclose detailed explanatory statements for TCFD requirements and HKLR Part D. These statements include additional items that we either do not currently disclose or partly disclose within this report. We further set out reasons for this, including associated data and system limitations. Where relevant, we also outline ongoing efforts to enhance our reporting in these areas. Ñ For a full summary of our TCFD disclosures, including cross-references to detailed disclosure locations, see page 386 . Ñ Our detailed HKLR Index, including HKLR Part D, can be found in our ESG Data Pack at www.hsbc.com/esg. Ñ Detailed explanatory statements for TCFD requirements and HKLR Part D can be found from pages 386 to 388 . HSBC Holdings plc Annual Report on Form 20-F 30 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk overview Managing risk We maintain a proactive approach to managing our exposure to economic, financial and geopolitical risks, supported by continuous monitoring and review. Developments in these areas have historically affected, and may in the future materially affect, HSBC’s customers, operations and financial risk profile. Geopolitical and macroeconomic risk In 2025, the global economy showed resilience to unpredictable US trade policies, heightened geopolitical tensions and increased fiscal concerns in our major markets. Global GDP growth exceeded expectations, driven by export growth related to the front-loading of trade purchases to avoid US tariffs and a weaker US dollar, as well as government spending. Household consumption was more subdued due to weak confidence, higher unemployment and inflation concerns. In the US, GDP growth outperformed initial forecasts, helped by the surge of investment in the technology sector. In mainland China and Hong Kong, exports to markets in Asia and Latin America offset some of the impact of US tariffs, while supportive fiscal and monetary policies continued to underpin growth. Trade and tariff policies are expected to remain a source of uncertainty for businesses and consumers. Changes to tariff rates, including the application of sector-specific levies, may deter capital investment and consumer spending, disrupt supply chains and reduce global trade growth. Although the reconfiguration of supply chains may offer new opportunities for investment and growth, such developments could also adversely affect the Group and our customers who operate in some of the most affected markets. Financial markets have witnessed significant valuation gains, including in the artificial intelligence (‘AI’) and technology sectors. The investment in these sectors may deliver gains to productivity, but current high valuations also raise the risk of a material fall in the markets if the expected gains to productivity fail to materialise. A disruptive market correction could undermine economic growth, which may in turn have an adverse effect on HSBC’s risk profile and earnings by increasing the financial vulnerability of customers and decreasing the value of collateral and other claims. We also remain subject to interest rate risk, which can affect net interest income, the fair value of our assets and liabilities, and overall financial performance. Major central banks have adjusted their policy approach in response to changing inflation and employment risks. The US Federal Reserve resumed its cycle of interest rate cuts in September 2025, after it assessed tariff-related inflation risks as transitory but labour market risks as having increased. The target range for the Federal Funds rate is now 3.5%–3.75%. In the UK, the Bank of England judged that inflation pressures had moderated sufficiently to cut interest rates in December 2025. Although financial markets have priced in further interest rate cuts, there is uncertainty around their future trajectory. Policy rates could be raised if inflation were to accelerate significantly beyond central bank target ranges. Higher interest rates may reduce loan demand across key consumer and business segments, which could lead to a deterioration in credit quality and weigh on real estate and other asset prices. By contrast, lower interest rates could pressure net interest margins and adversely affect profitability. Our risk profile may be influenced by fiscal policies, public deficits and levels of indebtedness. In many of our major markets, government debt levels are rising due to higher social welfare costs and increased expenditure on defence and climate transition. A fragmented political landscape in many markets has diminished the political will for fiscal tightening. Higher long-term interest rates across major economies could adversely impact the fiscal capacity and debt sustainability of highly- indebted sovereigns. The rise in funding costs in our major markets could reduce the potential for GDP growth by raising the cost of borrowing while also creating refinancing risks for our customers and counterparties. Exchange rate volatility may also affect our risk exposure through mark-to-market changes in trading positions and the translation effects of currency movements. The geopolitical environment remains complex, and tensions could impact the Group’s operations and risk profile. We continue to monitor the Russia-Ukraine war, developments in relation to conflict in the Middle East, and the wider implications as a result of the US military action in Venezuela, as well as any indication of other potential military action or conflicts elsewhere. These conflicts remain key sources of uncertainty, and may impact HSBC and our customers, including through increased market volatility and supply chain disruptions. Heightened strategic competition between the US and China, including cross-border investment restrictions, is also affecting the configuration of global supply chains, which may in turn affect the Group’s operations. Sanctions and restrictions on trade and investment are continually evolving in response to geopolitical events and may adversely affect the Group, its customers and the markets in which the Group operates. These factors may result in increased legal, regulatory, reputational and market risks, and a more complex operating environment. Signs of a recovery have begun to emerge in the residential segment of Hong Kong’s commercial real estate market in the second half of 2025. However, the office segment is still facing pressure and market liquidity remains tight, particularly for mid-sized and sub- investment grade corporates. In mainland China, the property market remains weak with government stimulus yet to trigger a material improvement in buyer sentiment. At the end of 2025, management adjustments to ECL were applied to reflect sector or portfolio risks that are not fully captured by our models. We continue to monitor, and seek to manage, the potential implications of all the above developments on our customers and our business. Our key risk appetite metrics At 31 December 2025, our CET1 ratio and ECL charges were within our defined risk appetite thresholds. At 31 December 2025, our CET1 ratio was 14.9 %, unchanged from 31 December 2024. Wholesale and Retail ECL charges were within appetite at 0.4% and 0.34% of loans and advances, respectively. Our operations We remain committed to investing in the reliability and resilience of our technology systems and critical services, including our ability to withstand and respond to cyber-attacks. We assess our third parties to help ensure they deliver the standard of services we require to provide resilient services to our customers. We do so to help protect our customers and counterparties, and to help ensure that we minimise any disruption to our services. In our approach to defending against these threats, we invest in business and technical controls to help us detect, prevent, respond to, recover and learn from issues in a timely manner within our risk appetite. HSBC is committed to using AI responsibly. We are working to balance the opportunity AI presents to accelerate delivery of our strategy with the need for appropriate controls to help mitigate the associated risks. To help meet the Group’s needs and regulatory expectations for AI, whether developed internally or facilitated through third parties, we continue to enhance our Group-wide AI oversight, governance, lifecycle management and risk framework. HSBC’s Principles for the Ethical Use of Data and AI are available at www.hsbc.com/ai. We continue to focus on improving the quality and timeliness of the data used to support informed management decisions, and we are advancing our strategic and regulatory change initiatives to help deliver the right outcomes for our customers, people, investors and communities. Ñ For further details of our Central and other economic scenarios, see page 149 . Ñ For further details on our CET1 ratio, see pages 5 and 192 . Ñ For further details of our risk management framework and risk appetite, see page 119 . HSBC Holdings plc Annual Report on Form 20-F 31 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk overview Top and emerging risks Our top and emerging risks report identifies forward-looking risks so that they can be considered in determining whether any incremental action is needed to either prevent them from materialising or to limit their effect. Top risks are those that have the potential to have a material adverse impact on the financial results, reputation or business model of the Group. We actively manage and take actions to mitigate our top risks. Emerging risks are those that, while they could have a material impact on our risk profile were they to occur, are not considered immediate and are not under active management. Our suite of top and emerging risks is subject to regular review by senior governance forums. We continue to monitor closely the identified risks and agree management actions to remediate and/or reduce them to acceptable levels, as required. Ñ For further detail on our top and emerging risks, see page 121 . Risk Trend Description Externally driven Geopolitical and macroeconomic risks ~ Our operations and portfolios are subject to risks arising from political instability, civil unrest and military conflict, which may lead to disruption of our operations, physical risk to our staff and/or physical damage to our assets. We are also subject to macroeconomic risks, which may drive changes to our income growth and asset quality. Heightened geopolitical and macroeconomic risk globally, including uncertainty in international trade policy, is subject to close monitoring and review. Technology and cybersecurity risk ~ There is an increased risk of service disruption or loss of data resulting from technology failures or malicious activities from internal or external threats. We continue to monitor changes to the technology and threat landscape, including those arising from ongoing geopolitical and macroeconomic events alongside third-party incidents and the impact this may have on risk management. We operate a continuous improvement programme to help support the resilience and stability of our technology operations and counter a fast-evolving and heightened cyber threat environment. Environmental, social and governance (‘ESG’) risks ~ We are subject to ESG risks, including in relation to climate change, nature and human rights. These risks have increased due to diverging national and political agendas, a more complex and prescriptive regulatory environment across the jurisdictions we operate in, as well as increasing frequency of severe weather events across the globe. Financial institutions’ actions and investment decisions in respect of ESG matters continue to be subject to heightened scrutiny by stakeholders. Failure to meet these evolving expectations may have financial and non-financial impacts, including reputational, legal and regulatory compliance risks. Financial crime risk ~ We are exposed to financial crime risk from our customers, staff and third parties engaging in criminal activity. The financial crime risk environment is heightened due to increasingly complex geopolitical challenges, the macroeconomic outlook, the complex and dynamic nature of sanctions and export control compliance, evolving financial crime regulations, rapid technological developments, an increasing number of national data privacy requirements and the increasing sophistication of fraud. As a result, we will continue to face the possibility of regulatory enforcement and reputational risk. Digitalisation and technological advances risk ~ Developments in technology and changes in regulations continue to enable new entrants to the banking industry as well as new products and services offered by competitors. This challenges us to continue to innovate with new digital capabilities and evolve our products, to attract, retain and best serve our customers. Along with opportunities, new technology, including GenAI, can introduce risks and disruption. We seek to manage technology developments with appropriate controls and oversight. Evolving regulatory environment risk ~ The regulatory and compliance risks are set against continued geopolitical risk and regulatory focus on operational resilience, resolvability, prudential requirements, financial reporting and data, ESG, conduct, as well as sound risk and financial crime risk management practices. The approach to regulation is increasingly fragmented, including in relation to AI and digital assets, and a trend towards deregulation has emerged in some jurisdictions, concurrently with regulatory actions to support business growth. Internally driven Data risk } We use data to serve our customers and run our operations, often in real-time within digital experiences and processes. If our data is not accurate and timely, our ability to serve customers, operate with resilience or meet regulatory requirements could be impacted. We seek to ensure that non-public data is kept confidential, and that we comply with the growing number of regulations that govern data privacy and cross-border movement of data. Risks arising from the receipt of services from third parties ~ We procure goods and services from a range of third parties. In the current macroeconomic and geopolitical climate, the risk of service disruption in supply chains is elevated, driven by an industry-wide increase in supply chain cyber threats. We continue to strengthen our controls, oversight and risk management policies and processes to select and manage third parties, including our third parties’ own supply chains, particularly for key activities that could affect our operational resilience. Model risk } Model risk arises whenever business decision making includes reliance on models. We use models in both financial and non- financial contexts, as well as in a range of business applications. Evolving regulatory requirements and enhanced expectations continue to drive changes to the way model risk is managed across the banking industry, with a particular focus on capital and credit loss models. New technologies, including AI, are driving a need for enhanced model risk controls. Strategic execution risk ~ Successful execution of our strategy enables us to help address the swiftly changing needs of our customers and stakeholders. We are committed to enhancing the effectiveness of strategic execution risk controls and monitoring. This will help us minimise disruptions during a period of heightened execution risk, driven by the complexity and scale of ongoing strategic, regulatory and technological change. Risks associated with workforce capability, capacity and environmental factors with potential impact on growth ~ Our businesses, functions and geographies are exposed to risks associated with employee retention and talent availability, the evolving skills requirements of our workforce, and compliance with employment laws and regulations. Voluntary attrition across the Group remains stable, but failure to manage these risks may impact the delivery of our strategic objectives or lead to regulatory sanctions or legal claims, and the risks are heightened during the implementation of organisational change. ~ Risk heightened during 2025 } Risk remained at the same level as 2024 HSBC Holdings plc Annual Report on Form 20-F 32 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environmental, social and governance review Our ESG review sets out our approach to our environment, customers, employees and governance. It explains how we aim to achieve our purpose, deliver our strategy in a way that is sustainable, and build strong relationships with all of our stakeholders. How we present our TCFD disclosures Our overall approach to TCFD can be found on page 29 and additional information is included on pages 385 to 388 . Further details have been embedded in this section and the Risk review section on pages 203 to 212 . Our TCFD disclosures are highlighted with the following symbol: TCFD Environmental 33 Our approach to the transition 34 Understanding our ESG reporting 35 Supporting our customers 38 Partnering for an enabling environment 39 Embedding net zero into the way we operate Social 51 Our commitment to inclusion 53 Building a healthy workplace 55 Developing skills, careers and opportunities 56 Building customer inclusion and resilience 56 Engaging with our communities Governance 57 Setting high standards of governance 58 Human rights 59 Customer experience 61 Integrity, conduct and fairness 63 Safeguarding data 2 HSBC Holdings plc Annual Report on Form 20-F 33 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environmental TCFD Transition to net zero We aim to support the transition to net zero and a sustainable future in partnership with our customers and other stakeholders Our approach to the transition Our Priorities Be simple and agile Drive customer-centricity Deliver focused sustainable growth Our Values We value difference We succeed together We take responsibility We get it done Our Net Zero Ambition Ambition to become a net zero bank by 2050 supported by our Sustainability Strategy Our Three Net Zero Pillars Supporting our customers Embedding net zero into the way we operate Partnering for an enabling environment We are seeking to align our capital and capabilities with our customers’ transition goals, by tailoring our products and services to the specific needs of different customers around the world. We are working to incorporate net zero considerations into our broader decision-making activities, our climate risk management framework, our metrics, and in our own operations and supply chains. Our ability to finance our customers’ transition is influenced by external market and policy conditions, therefore we seek to partner with stakeholders and advocate for progress across the financial system. Our ambition is to become a net zero bank by 2050. Supporting our customers is core to our strategy and financing our customers' transition is both critical to them and aligned to our net zero ambition . Our updated Net Zero Transition Plan When we published our first Net Zero Transition Plan, we committed to evolving our approach to keep pace with the dynamic world in which we and our customers operate. Since early 2024, the global landscape has shifted markedly, making the pace of transition more uneven . Against this broader landscape, we updated our Net Zero Transition Plan in November 2025, intensifying our efforts to be customer focused, commercial and agile. It sets out the actions we are continuing to take to achieve our net zero ambition and to align our financing with the Paris Agreement goals of holding the increase in global average temperature to well below 2°C above pre- industrial levels, and pursuing efforts to limit the temperature increase to 1.5°C. Our Net Zero Transition Plan remains structured around our three core implementation pillars: supporting our customers, embedding net zero into the way we operate, and partnering for an enabling environment. Supporting our customers As a global financial institution, we exist to serve our customers. We believe supporting our customers’ transition is one of the most significant roles we can play in the global transition to net zero. This will help to deliver long-term value for customers and shareholders. We have refined our approach to continue to be responsive to the diverse realities faced by our different customers across the world, from individuals through to multinational corporates and institutions . Embedding net zero into the way we operate Our net zero ambition is an important part of our corporate strategy. Our global businesses are developing strategic plans that integrate climate and sustainability considerations into their operations. This approach reflects the diverse transition maturities and local regulatory expectations across our global footprint . Our focus on the transition to net zero is well established within our governance, culture, and key performance indicators. A number of measures supporting our progress towards our net zero ambition are included in executive performance scorecards and management reporting, helping align accountability across the organisation. Partnering for an enabling environment Recognising that our customers’ transition, and our ability to finance it, relies in part on external market and policy conditions, we also seek to support enabling environments that can help accelerate the flow of capital towards business innovation and transformation . Our approach seeks to build support across a range of stakeholder groups and reflect the varying pace and shape of the transition across sectors and geographies, as well as the size and scope of our presence in local markets. Progress on our Net Zero Transition Plan We continue to take actions across our organisation to support the implementation of our Net Zero Transition Plan. We continue to focus on developing and maintaining the capabilities of our people as the sustainability landscape evolves. This report provides key updates on our progress in 2025 and includes our annual TCFD reporting. Ñ For further details on our climate risk exposures, see page 203 . Ñ For further details on building our net zero capabilities and upskilling, and assumptions, uncertainties and dependencies, see pages 9, 48, 49 , an d 57 of the HSBC Net Zero Transition Plan. Ñ F or the HSBC Net Zero Transition Plan refer to https://www.hsbc.com/who-we-are/our-climate- strategy/our-net-zero-transition-plan Key changes to our 2025 disclosures In 2025, there was an impact on certain climate disclosures, including: – Financed emissions: We have updated our interim 2030 financed emissions targets for all of our in-scope carbon-intensive sectors, apart from thermal coal mining. We have re- baselined and restated prior year metrics to account for the latest methodology and scope changes, including the addition of short-term lending. For further details, see page 39 . – Thermal coal financing drawn balance exposure: In 2025 we amended product scope in line with changes made for financed emissions as discussed above and have developed a more detailed framework for our approach to exclusions. This resulted in a re-baseline of our 2020 thermal coal financing drawn balance exposure. For further details, see page 50 . HSBC Holdings plc Annual Report on Form 20-F 34 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Understanding our ESG reporting Engaging with our stakeholders and our material ESG topics We know that engaging with our stakeholders is core to being a responsible business. To determine material topics that our stakeholders are interested in, we conduct a number of activities throughout the year. The TCFD requirements, HKLR Appendix C2 ESG Reporting Code Parts C and D and other applicable rules and regulations are considered as part of the identification of material issues and disclosures. Additional information can be found in the 'How we decide what to measure' section on page 385 . Material ESG topics are listed on page 32 and related d isclosures are covered in this ESG review. Continuing to evolve our climate disclosures We engage with standard setters to support the development of transparent and consistent climate-related industry standards in areas such as implementation of new International Sustainability Standards across jurisdictions, sustainable finance taxonomy and emissions accounting . We have aligned our definitions of risk and opportunities with our strategic planning cycle. For climate reporting, we define short-term as time periods up to 2 years, medium-term is between 3-5 years, and long-term is between 6-15 years. We have reviewed our interim financed emissions targets, metrics and associated policies, seeking to remain science-aligned and compatible with our own net zero ambition, while remaining realistic and credible given global developments. We expect to periodically review and, if required, update our targets. We seek to monitor the latest developments in climate science and associated scenarios to help inform our approach to target setting and our portfolio alignment to support the transition of the real economy to net zero. In 2026, we will continue to review and enhance our approach to disclosures. Internal and external data challenges The effective measurement, governance and reporting of progress against our climate ambitions is reliant on the availability of high- quality, accessible, comparable and reliable internal and external data. We are also reliant on our own ability to collect and process such relevant data as required in a timely manner . Reported client emission data may have up to a two-year lag, making alignment to financial reporting dates challenging and leading to further reliance on proxies. Newer data sources and topics may be difficult to assure using traditional verification techniques. This, coupled with diverse external data sources and complex structures, further complicates data consolidation. Our internal data on customer groups that was used to source financial exposure and emissions data is based on credit and relationship management factors and is not always aligned with the need to analyse emissions across sector value chains. This can result in inconsistencies in our financed emissions calculations . We continue to strengthen our ESG data and analytics capability, working to deliver trusted data assets, dashboards, AI, and advanced analytics solutions that help support initiatives like financed emissions, climate scenario analysis, stress testing, sustainable finance and portfolio optimisation. Given our dependency on collecting emissions data from our clients and the manual nature of the process, enhanced verification and assurance procedures are performed on a sample basis over this data, including by the first and second lines of defence. Our climate models undergo independent review by an internal model review group, and we obtain limited assurance on our financed emissions and sustainable finance disclosures from external parties, including our external auditors. Lack of consistency across sustainable finance taxonomies Sustainable finance metrics, taxonomies and practices currently lack global consistency. As standards develop and regulatory guidance evolves across jurisdictions, our targets, methodologies and disclosures may also need to adapt. Recognising these challenges, we annually refresh and disclose our Sustainable Finance and Investment Data Dictionary to accompany reporting against our sustainable finance and investment ambition. For further details, see page 35 . Our re-baseline and restatement policy defines the circumstances for a restatement of previously reported data. We continue to engage with standard setters in different regions to support the development of transparent and consistent taxonomies to encourage science-based decarbonisation, particularly in high transition risk sectors. Impact on our reporting and financial statements We have assessed the impact of climate risk on our balance sheet and have concluded that no incremental adjustments were needed to capture climate impacts in our financial statements for the year ended 31 December 2025 . The effects of climate change are a source of uncertainty. We capture known and observable potential impacts of climate-related risks in our asset valuations and balance sheet calculations. These are considered in relevant areas of our balance sheet, including expected credit losses, classification and measurement of financial instruments, goodwill and other intangible assets; and in making the long-term viability and going concern assessment. As part of assessing the impact on our financial statements we conducted scenario analysis to understand the impact of climate risk on our business (see pages 49 and 206 ), and we also used available information to perform a climate ECL sensitivity analysis for both our retail and wholesale portfolios (see page 212 ). Ñ For further details of how management considered the impact of climate-related risks on its financial position and performance, see ‘Critical estimates and judgements ’ on page 301 . HSBC Holdings plc Annual Report on Form 20-F 35 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Supporting our customers Sustainable finance and investment TCFD We aim to help our customers’ transition to net zero and a sustainable future by providing and facilitating between $750bn and $1tn of sustainable finance and investment by 2030. Our sustainable finance and investment ambition aims to help promote green, sustainable and socially-focused business and sustainable investment products and solutions . Since 1 January 2020, we have provided and facilitated a cumulative $ 437.9 b n of sustainable finance and $ 57.7 bn of ESG and sustainable investing, as defined in our Sustainable Finance and Investment Data Dictionary 2025. This included 39% where the use of proceeds was dedicated to green financing, 11% to social financing, an d 14% to other sustainable financing. It also included 24% of sustainability- linked financing and 12% of net new investment flows managed and distributed on behalf of investors. In 2025, our underwriting activity for green, social, sustainability, and sustainability-linked bonds declined, primarily due to challenging market conditions, particularly in the latter half of the year. The global social bond market contracted during 2025, with HSBC’s volume reducing by approximately $4bn compared with the previous year. Despite these headwinds, on-balance sheet sustainable lending transactions increased by 12% versus 2024, supported by strong growth of 15% in ESG and sustainable investing flows. In 2025, as part of our continued monitoring and controls processes, we identified $0.3bn of transactions that no longer fulfil our eligibility criteria. These were declassified and removed from the 2025 total, taking the total amount declassified since 1 January 2020 to $1.6bn. Continued progress towards achieving our sustainable finance and investment ambition is dependent on market demand for the products and services set out in our Sustainable Finance and Investment Data Dictionary 2025 . Sustainable finance and investment $ 495.6 bn † Cumulative total provided and facilitated since 1 January 2020 (2024: $393.6bn) Sustainable finance and investment summary 1 2025 ($bn) 2024 ($bn) 2023 ($bn) Cumulative progress since 2020 ($bn) Balance sheet-related transactions provided 2 52.8 47.4 42.7 221.5 Capital markets/advisory (facilitated) 32.6 37.3 33.3 216.4 ESG and sustainable investing (net new flows) 16.6 14.5 7.7 57.7 Total contribution † 102.0 99.2 83.7 495.6 Sustainable finance and investment classification by theme 1 Green use of proceeds 5 41.7 42.2 37.1 196.0 Social use of proceeds 6.9 9.6 8.4 52.6 Other sustainable use of proceeds 3 14.2 13.9 10.7 71.4 Sustainability-linked 4 22.6 19.0 19.8 117.9 ESG and sustainable investing 16.6 14.5 7.7 57.7 Total contribution † 102.0 99.2 83.7 495.6 † The $ 495.6 bn cumulative progress since 1 January 2020 is subject to independent third-party limited assurance in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’. Our Sustainable Finance and Investment Data Dictionary 2025 and independent third-party limited assurance report is available at: www.hsbc.com/who-we-are/esg-and-responsible-business/ esg-reporting-centre. 1 The 2025 data in this table has been prepared in accordance with our Sustainable Finance and Investment Data Dictionary 2025, which includes green, social and sustainability activities. The amounts provided and facilitated include: the limits agreed for balance sheet-related transactions provided (including drawn and undrawn amounts), the proportional share of facilitated capital markets/advisory activities and ESG and sustainable investing net new flows of both HSBC Asset Management sustainable investment funds and third-party solutions distributed through Private Bank and Retail Banking. 2    In 2024 only nine months of retail green/energy efficient mortgages were included for the first time within Other Qualified Green Lending. In 2025 reporting, 12 months of transactions were included, reported a quarter in arrear (1 October 2024 to 30 September 2025) due to the time lag in sourcing supporting third-party data. For future years’ reporting we will continue to report green/energy efficient mortgages a quarter in arrear. 3 Sustainable use of proceeds can be used for green, social or a combination of green and social purposes, assessed by HSBC against internal standards and relevant industry guidelines. 4 Sustainability-linked products, where the coupon or interest rate is dependent on whether the borrower achieves certain pre-defined sustainability performance target(s), are assessed by HSBC against internal standards and relevant industry guidelines and can be used for general purposes, which may be sustainable or non-sustainable. 5 Included within the total cumulative contribution towards our ambition are transactions to customers within the six high transition risk sectors (i.e. automotive, chemicals, construction and building materials, metal and mining, oil and gas, and power and utilities) as described on page 204 , of which approximately $71bn is defined as green use of proceeds in line with the Sustainable Finance and Investment Data Dictionary 2025. HSBC Holdings plc Annual Report on Form 20-F 36 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment We believe supporting our customers’ transition is one of the most significant roles we can play in the global transition to net zero. Our Corporate and Institutional Banking (‘CIB’) business, which incorporates HSBC Infrastructure Finance, gives our customers seamless access to global capital, markets expertise and financing through a single platform. We have refreshed our strategy to support the transitions of our CIB customers globally and our Commercial Banking customers in the UK and Hong Kong, and deliver on our growth ambition. Our lending to corporate and institutional customers makes up the majority of our balance sheet and financed emissions, so the role we play with these customers is critical to achieving our net zero ambition. We intend to become: – The leading bank for fast-growing transition ecosystems. Our customer base spans ecosystems like clean power, electrification of transport, and data centres and AI. These ecosystems represent a significant volume of the transition capex needed by 2030 as they are key decarbonisation and transformation vectors for the economy. Expanding clean electrification will be an important step to minimise AI’s operational footprint while maximising the technology’s potential 1 . – The strategic transition partner for all our customers. We aim to support all our customers across segments and sectors to meet their sustainability goals, leveraging our debt financing and trade finance capabilities across over 50 markets 1 . – Bank of choice to catalyse emerging climate tech. With our HSBC Innovation Banking platform and substantial balance sheet, we can bridge the gap between early- stage development and large-scale deployment of climate-critical technologies. – We are also well-positioned to connect these start-ups with our corporate and institutional customers that are looking to invest in climate tech ventures, and adopt their solutions to accelerate their transition journey 1 . – Understanding customer transition priorities We take a holistic approach to understanding and supporting the transition journeys of our customers and potential customers. We regularly engage with our corporate customers to help tailor our solutions to the diverse realities they face around the globe, and the different stages of their transition journey. Supporting personal customers We offer financing and investing options to our individual banking customers in the key areas where they may be able to influence their carbon footprint. 1 For further details see HSBC Net Zero Transition Plan at https://www.hsbc.com/who-we-are/our- climate-strategy/our-net-zero-transition-plan pages 26-28. HSBC Holdings plc Annual Report on Form 20-F 37 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment ESG and sustainable investing Our ambition is to be one of the leading global asset and wealth managers and sustainability is an important enabler to achieving this ambition. We offer a suite of ESG and sustainable investing solutions to institutional and individual investors who want to mitigate risk or seek value creation through considering climate, nature or other sustainability factors in their investment horizon. Covering both traditional and alternative investment areas, our solutions aim to advance ESG and sustainable goals. We take different approaches to achieve this, such as investing in issuers or securities that may either seek stronger ESG performance, align to themes such as climate or the net zero transition, or seek to deliver environmental or social outcomes. As at 31 December 2025, HSBC Asset Management managed $213bn in ESG and sustainable investing solutions, marking an increase of $33.3bn or 18.5% from 2024. These assets include those that are distributed by our Private Bank and Retail Banking, and those that Asset Management manages on behalf of HSBC Insurance. This increase underscores our continued focus on providing a range of solutions tailored to meet the diverse investment objectives of our clients. For our individual investors, our ESG and sustainable investing solutions span multiple asset classes, including mutual funds, ETFs, equities, fixed income, alternatives, as well as discretionary mandates. In 2025, we expanded our investment offering with the launch of four additional mutual funds and ETFs. We regularly publish insights to help our clients better understand the ESG implications of their investments. In our Insurance business, as an asset owner, we seek to adopt a responsible investment approach. We give customers access to sustainability options through investment- linked insurance products where we offer a range of investment choices, including those relating to ESG and sustainable investing. Some may target specific net zero transition and climate themes. Ñ For further details of our Asset Management policies , see page 50 . Our sustainable finance and investment data dictionary We define sustainable finance and investment as any form of financial service that integrates ESG criteria into business or investment decisions. This includes financing, investing and related activities that support the achievement of the UN Sustainable Development Goals, including but not limited to the aims of the Paris Agreement on climate change. Our Sustainable Finance and Investment Data Dictionary sets out our approach for classifying financing and investment as sustainable for the purpose of tracking and disclosing our performance against our sustainable finance and investment ambition. We update our data dictionary annually, including reviewing our product definitions, adding new qualifying products and removing products that no longer qualify, making enhancements to our internal standards, and developing our reporting and governance. We engage in industry initiatives to develop our understanding and approach to ‘transition finance’. We do not currently include transition finance as a product label or stand-alone category in our data dictionary and reporting, and we will continue to monitor and consider industry guidance for future updates to our data dictionary. We have established internal business governance forums and processes to assess and monitor the risks associated with sustainable finance products, ranging from product design, origination and approval, as well as tracking and monitoring product performance. We recognise that there are products and assets included in HSBC’s ESG and sustainable investing approach which may be counted towards our sustainable finance and investment ambition that do not necessarily qualify as ‘sustainable investments’ as defined by Sustainable Finance Disclosure Regulation (SFDR) and/or other relevant regulations, and may not qualify as ‘sustainable’ products for the purposes of the UK Sustainability Disclosure Requirements (SDR) and European Securities and Markets Authority (ESMA) fund naming guidance and/or any other regulatory standards. Ñ For our 2025 ESG Data Pack and Sustainable Finance and Investment Data Dictionary, see www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre HSBC Holdings plc Annual Report on Form 20-F 38 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Partnering for an enabling environment Our ability to support our customers’ transition is heavily influenced by external market and policy conditions. We seek to partner for an enabling environment that can help to accelerate the flow of capital towards scaling transition solutions and innovation. We aim to use our global reach and convening ability to engage and collaborate with a range of partners – including industry peers, customers, governments, academia, civil society and entrepreneurs – on solutions that can help support the transition. Through our philanthropy, we also partner with a range of NGOs to help develop thought leadership, spur innovation, build capacity, mobilise capital and test and scale climate solutions. Highlights from our sustainability- aligned partnerships In 2025, we donated approximately $12.6m in grant funding to help establish a portfolio of partnerships aligned to the strategic focus areas set out in our Net Zero Transition Plan. We also supported initiatives focused on driving progress on cross-cutting issues, such as nature and the just transition. Our just transition approach The speed and scale of the transition to net zero will be influenced by how it impacts communities, and how communities view and support the transition. Our approach to net zero considers how we can support a just transition, including how best to engage with and inform our customers on the topic, as well as helping to ensure the transition to net zero can positively impact local communities. Examples of our engagement include: – In 2025, we supported the Just Transition Finance Lab at the London School of Economics, which produced thought – – leadership on topics including ‘promoting a transition with inclusion in India’ and ‘mobilising bonds for a just transition’. – HSBC Asset Management, in line with relevant stewardship activities, encourages companies to identify and address the impacts of their climate strategy on stakeholders, including workers, suppliers and the communities in which they operate. This may involve setting specific metrics or objectives concerning, but not limited to, employee training and development, green job creation, safeguarding workers’ rights and support for affected communities. Our approach to nature Nature and its ecosystem services are foundational to economic growth, resilience and long-term value creation. Nature-related opportunities and risks – which can stem from the impacts and dependencies the global economy and financial system have on nature, as well as the complex interactions and compounding effects of climate change – are areas that require further consideration. We have been developing our approach to nature, aligning it with our net zero approach: supporting our customers through financing and investing in nature-related solutions; starting to embed nature into the way we operate, initially through understanding our exposure to nature and managing nature- related risk in our European business; and partnering for a supportive enabling environment, for example, through our nature-focused philanthropic partnerships. In 2025, we established a Group Nature Programme, including senior governance, to oversee the development of our approach to nature. We continued to advance our approach to nature-related risk, initially focused on key parts of our European business, by starting to incorporate nature into wholesale credit risk management processes and completing a pilot nature scenario analysis stress test. We continue to enhance our capabilities, methodologies and tools, in line with evolving regulatory and reporting expectations. HSBC Asset Management highlights good practices relating to nature in its Stewardship Plan, emphasising natural capital strategy, risk and reporting, governance and engagement. We encourage priority investee companies (as defined in our Stewardship Plan), where nature-related issues are relevant, to work towards these practices. In 2025, Climate Asset Management, a joint venture between HSBC Asset Management and climate investment and advisory firm Pollination, was ranked as Fund Manager of the year in both Global and European Categories at the Agri Investor Awards. Ñ For further details see HSBC Asset Management Stewardship Plan at https:// www.assetmanagement.hsbc.co.uk/en/ institutional-investor/about-us/responsible- investing/policies HSBC Holdings plc Annual Report on Form 20-F 39 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Embedding net zero into the way we operate Financed emissions TCFD Financed emissions is one of the key metrics we use to measure progress on the transition of our portfolio. As part of our ambition to become a net zero bank by 2050, we have set financed emissions targets for 2030. Our analysis of financed emissions comprises ‘on-balance sheet financed emissions’ and ‘facilitated emissions’, which we distinguish where necessary in our reporting. Financed emissions link the financing we provide for our customers to their activities in the real economy and provide an indication of the associated GHG emissions. They form part of our scope 3 emissions, which include emissions associated with the use of a company’s products and services. Our on-balance sheet financed emissions include emissions related to on-balance sheet lending, such as project finance and direct lending. Our facilitated emissions include emissions related to financing we help clients to raise through capital markets activities. Our analysis covers financing from CIB, and Commercial Banking in the UK and Hong Kong. Our combined on-balance sheet financed and facilitated emissions targets are for two emissions-intensive sectors: oil and gas; and power and utilities. Our on-balance sheet financed emissions targets cover the following sectors: cement; iron and steel; aviation; automotive; and thermal coal mining. We have set absolute emissions reduction targets for the oil and gas, and thermal coal mining sectors. For the power and utilities; cement; iron and steel ; aviation; and automotive sectors, we have set emissions intensity targets that allow us to deploy capital towards decarbonisation solutions. As part of our financial reporting, we present the progress for these sectors against our financed emissions baselines and targets . Our approach to financed emissions In our approach to assessing our financed emissions, our key methodological decisions are shaped in line with industry practices and standards. We recognise that these practices and standards are still developing. We will also continue to review our reporting approach as regulatory standards evolve, such as the impact of the International Sustainability Standards Board (ISSB) Standards. Coverage of our analysis Our analysis focuses on the most carbon- emissive sectors and the parts of the value chain where we believe most of the emissions are produced, to help reduce double counting of emissions. Double counting may occur when GHG emissions are counted more than once in the financed emissions calculation. For instance, to minimise the overlap of emissions captured, we only include midstream activities of the automotive sector, as upstream may be included in other sectors that we finance, such as iron and steel. This is different to the scope of sectors within the wholesale corporate lending portfolio that we use to manage climate risk. These sectors are set out on page 204 . By estimating emissions and setting targets for customers that directly account for, or indirectly influence, the majority of emissions in each of the most carbon-emissive sectors, we can focus our engagement and resources where we believe the potential for change is highest. For each sector, our reported emissions now typically include all the major GHGs, including carbon dioxide, methane and nitrous oxide, among others. These are reported as tonnes of CO 2 equivalent (‘ tCO 2 e’) . To calculate annual on-balance sheet financed emissions, we have taken into consideration guidance from the Partnership for Carbon Accounting Financials (‘PCAF’) standard. We use drawn balances as at 31 December in the year of analysis related to wholesale credit and lending, including business loans and project finance, as the value of finance provided to customers. For facilitated emissions we considered all capital market transactions in scope for the year of analysis. These included debt and equity capital markets, and syndicated loans. Ñ For further details see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre Our financed emissions target refresh and associated changes As stated in our 2025 Net Zero Transition Plan, we have undertaken a detailed review of each of our interim 2030 financed emissions targets this year to seek to ensure our approach continues to reflect the evolving external context, including developments in policy, technology, climate science, customer actions, available data and methodologies. We have updated our targets for all our in- scope carbon-intensive sectors, apart from thermal coal mining. Our thermal coal mining target remains unchanged, in alignment with our thermal coal phase-out policy and thermal coal financing drawn balance exposure reporting. The key change is the adoption of a target range for our interim 2030 financed emissions targets, informed by IEA’s 2024 Net Zero Emissions (‘NZE’) Scenario and Announced Pledges Scenario (‘APS’). For our emissions intensity-based targets, we have moved the baseline year from 2019 to 2023 to reflect improvements in available data and methodology. Targets for these sectors are point-in-time targets and independent from the baseline. We continue to use 2019 as the baseline year for our oil and gas combined financed and facilitated emissions target, and 2020 for our thermal coal mining financed emissions target, as our absolute emissions reduction targets are set based on a percentage reduction from the baseline year. Lending products that are short term in nature are now included in our financed emissions reporting. We have included short-term lending with the aim to cover in-scope lending activity and align with industry guidance. In addition, we have descoped aluminium from the previously reported iron, steel and aluminium sector and changed the reporting unit for aviation from revenue passenger kilometre (‘rpk’) to revenue tonne kilometre (‘rtk’). See page 45 for details on the scope and methodology changes driving our re-baselines and restatements. Ñ For further details see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre HSBC Holdings plc Annual Report on Form 20-F 40 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment The chart below shows the scope of our financed emissions analysis of seven sectors, including upstream, midstream and downstream activities within each sector. The allocation of companies to different parts of the value chain is highly dependent on expert judgement and data available on company revenue streams. As data quality improves, this will be further refined. Financed emissions analysis Sector Scope of emissions Value chain in scope Coverage of GHGs Oil and gas 1, 2 and 3 Upstream (e.g. extraction) Midstream (e.g. transport) Downstream (e.g. fuel use) Integrated/ diversified All GHGs Power and utilities 1 and 2 Upstream (e.g. generation) Midstream (e.g. transmission and distribution) Downstream (e.g. retail) Diversified utilities - Power generation All GHGs Cement 1 and 2 Upstream (e.g. raw materials, extraction) Midstream (e.g. clinker and cement manufacturing) Downstream (e.g. construction) All GHGs Iron and steel 1 and 2 Upstream (e.g. raw materials, extraction) Midstream (e.g. ore to steel) Downstream (e.g. construction) All GHGs Aviation 1 for airlines, 3 for aircraft lessors Upstream (e.g. parts manufacturers) Midstream (e.g. aircraft manufacturing) Downstream (e.g. airlines and air lessors) All GHGs Automotive 1, 2 and 3 Upstream (e.g. suppliers) Midstream (e.g. motor vehicle manufacture) Downstream (e.g. retail) All GHGs Thermal coal mining 1, 2 and 3 Upstream (e.g. extraction) Midstream (e.g. processing) Downstream (e.g. retail) All GHGs Key: Included in analysis Setting our targets Our initial approach to target setting used a single reference scenario – the 2021 International Energy Agency (‘IEA’) Net Zero Emissions by 2050 Scenario (‘NZE 2021’). We have now introduced a target range for all our in-scope carbon-intensive sectors (except for thermal coal mining) informed by the IEA’s 2024 NZE and APS Scenarios. Our approach is aligned with the goals of the Paris Agreement to hold the global temperature increase to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels. Adopting a target range helps us to better navigate the inherent uncertainty in the pace of transition in the real economy. Facilitated emissions included in our combined metrics are weighted at 33%, in accordance with the PCAF standard. To further reduce the inherent volatility in facilitated emissions, we apply a moving average up to three years building up from the baseline year (e.g. average of 2022, 2023 and 2024 for the 2024 oil and gas progress numbers) to track progress towards our combined target. This means that transactions facilitated in 2028 and 2029 will still have an impact on the 2030 progress num ber and will need to be taken into consideration as we manage progress towards our target. We perform feasibility analysis of our financed emissions targets, considering multiple climate-related scenarios. We do not plan to rely on purchasing credits to achieve any interim 2030 financed emissions targets we set . An evolving approach We continue to engage with regulators, standard setters, investors and industry bodies to help shape our approach to target setting and managing portfolio alignment to support the transition to net zero in the global economy. For the agricultural, corporate and retail real estate sectors, we continue to expect to measure and report our financed emissions in future disclosures and we are working on improving the quality and granularity of internal data and sourcing suitable external data for reliable measurement. Ñ For further details see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre Data and methodology limitations Our financed emissions estimates and methodological choices are shaped by data availability for our sectors. We are members of the PCAF, which defines and develops GHG accounting standards for financial institutions. Its Global GHG Accounting and Reporting Standards for Financed Emissions and for Facilitated Emissions provide detailed methodological guidance. – We have found that data quality scores vary across the different sectors and years of our analysis. While we expect our data quality scores to improve over time, as companies continue to expand their disclosures to meet growing regulatory and stakeholder expectations, there may be fluctuations within sectors year-on-year, and/or differences in the data quality scores due to changes in data availability. – Most of our clients do not yet report the full scope of GHG emissions included in our analysis, in particular scope 3 at a subsidiary level. In the absence of client-reported emissions, we estimated emissions using proxies based on company production and revenue figures. We applied industry averages in our analysis where company- specific data was unavailable, using third- party datasets. As data improves for client- reported emissions, our reliance on estimates will continue to reduce. – Reported client emissions data may have up to a two-year lag, which may result in alignment challenges to financial reporting dates and lead to further reliance on proxies. – Mapping external datasets to our internal client entities can be challenging due to complex company ownership structures. – The methodology and data used to assess financed emissions and set targets continue to evolve and we expect industry guidance, market practice, and regulations to continue to change. HSBC Holdings plc Annual Report on Form 20-F 41 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Data and methodology limitations continued – We remain conscious that the financed emissions calculation is sensitive to volatility in drawn amounts or market value fluctuations, and we plan to be transparent around drivers for change to portfolio financed emissions where possible. – We calculate sector-level emissions intensity metrics using a portfolio-weighted approach. – Due to data limitations, we are unable to obtain production data for all clients and so we calculate an emissions intensity figure using the 75th percentile of available data points to meet this data gap, which we consider as a conservative approach. – Classification of our clients into sectors is performed at a counterparty group level with inputs from SMEs, and will continue to evolve with improvements to data and our sector classification approach. Our internal data on customer groups used to source financial exposure and emissions data is based on credit and relationship management attributes and may not always be aligned to the data required to analyse emissions across sector value chains. – As the sub-sector, and therefore the value chain classification of a client, is based on expert judgement, and as clients continue to transition, classification changes can result in sectoral movement year-on-year. – Emissions are calculated at a counterparty group level, rather than at subsidiary level, mainly due to the availability of emissions data, and this may lead to over- or under- estimation of emissions compared with calculation at the subsidiary level. – Companies with multiple activities, such as conglomerates with near to equal business activity split across multiple sectors, are excluded from our reporting as these can have different activities and cannot be allocated to one sector target. – For scope 2 emissions, companies may often choose between reporting location or market-based emissions. For our analysis, where available, market-based emissions data is prioritised for sourcing compared with location-based emissions. – We use structured entities to securitise customer loans and advances we originate and to diversify sources of funding for asset origination and capital efficiency. These are currently excluded and we will continue to review our reporting approach as industry guidance and methodology evolves. – Where we have sponsored or invested in our clients’ securitisation vehicles, these have been included in our analysis where possible, recognising current data limitations, applying the PCAF business loans approach. – The operating environment for climate analysis and portfolio alignment is maturing. We continue to work to improve our data management processes. Ñ For further details see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre Targets and progress We have set out in the table below our combined on-balance sheet financed and facilitated emissions targets for the oil and gas, and power and utilities sectors. We also set out our updated targets for the on-balance sheet financed emissions for cement, iron and steel, aviation and automotive, and our existing thermal coal mining target. For our combined on-balance sheet financed and facilitated emissions targets in 2024, the moving average for facilitated emissions with a 33% weighting for the oil and gas sector totals 5.0 Mt CO 2 e and for the power and utilities sector, it totals 279 tCO 2 e/GWh. These values are then combined with the on- balance sheet numbers for the relevant year to track progress to target. We set out the annual figures before the application of the three-year average built up from the baseline in the facilitated emissions table on page 46 . This year we have a three-year moving average for oil and gas in 2023 and 2024, and a two-year moving average for power and utilities in 2024. Averages will be built up to three years over time. We disclose emissions in 2023 and 2024 and progress achieved in 2024 versus baseline for each sector. The table incorporates re-baselines and restatements, where relevant, and in this section we set out the approach we take to target setting. When assessing the changes from 2019 to 2024, it is important to emphasise how changes to exposure and market fluctuations impact yearly updates as we make progress towards our interim targets. Movement from one year to the next may not reflect future trends for the financed emissions of our portfolio. See specific sector sections for further information on key movements. Sector 1 Baseline 2023 2024 2024 % change vs. baseline 2030 target Unit 2 Target type Target scenario Combined on-balance sheet financed and facilitated emissions at 33%, with up to 3 years moving average Oil and gas 46.2 in 2019 28.9 28.5 (38) % (14-30)% Mt CO 2 e Absolute IEA APS and NZE 2024 Power and utilities 295 in 2023 295 242 (18) % 195-270 tCO 2 e/GWh Intensity IEA NZE and APS 2024 On-balance sheet financed emissions Cement 0.59 in 2023 0.59 0.61 3 % 0.47-0.56 tCO 2 e/t cement Intensity IEA NZE and APS 2024 Iron and steel 1.73 in 2023 1.73 1.81 5 % 1.29-1.52 tCO 2 e/t steel Intensity IEA NZE and APS 2024 Aviation 747 in 2023 747 737 (1) % 709-776 tCO 2 e/million rtk 3 Intensity IEA NZE and APS 2024 Automotive 152.8 in 2023 152.8 146.8 (4) % 65.5-95.3 tCO 2 e/million vkm Intensity IEA NZE and APS 2024 Thermal coal mining 4 3.4 in 2020 1.03 0.22 (94) % (70)% 4 Mt CO 2 e Absolute IEA NZE 2021 1  Our absolute and intensity emissions metrics and targets are measured based on the drawn exposures of the counterparties in scope for each sector. Emissions intensity is a weighted average according to the portfolio weight of each investment, as a proportion of the total portfolio value. 2  For the oil and gas sector, absolute emissions are measured in million tonnes of carbon dioxide equivalent (‘Mt CO2e’); for the power and utilities sector, intensity is measured in tonnes of carbon dioxide equivalent per gigawatt hour (‘tCO2e/GWh’); for the cement sector, intensity is measured in tonnes of carbon dioxide equivalent per tonne of cement (‘tCO2e/t cement’); for the iron and steel sector, intensity is measured in tonnes of carbon dioxide equivalent per tonne of steel (‘tCO2e/t steel’); for the aviation sector, intensity is measured in tonnes of carbon dioxide equivalent per million revenue tonne kilometres (‘tCO2e/million rtk’); for the automotive sector, intensity is measured in tonnes of carbon dioxide equivalent per million vehicle kilometres (‘tCO2e/million vkm’); and for the thermal coal mining sector, absolute emissions are measured in million tonnes of carbon dioxide equivalent (‘Mt CO2e’). 3  We have changed our reporting unit for aviation from revenue passenger kilometre (‘rpk’) to revenue tonne kilometre (‘rtk’) to better align to counterparties in scope which often include all airline activities (passengers, belly cargo, dedicated cargo). Additionally, this metric enables direct comparison to climate scenarios that are based on traffic demand forecasts and aligns to industry practice. 4  The thermal coal mining scope differs from the other target sectors. We include solely emissions from thermal coal production and coal power generation, rather than the total emissions of a counterparty within a sector, to reflect the thermal coal mining absolute financed emissions reduction target. HSBC Holdings plc Annual Report on Form 20-F 42 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment We plan to report financed emissions and progress against our targets annually, and to be transparent in our disclosures about the metho dologies applied and any challenges or dependencies. However, financed emissions figures may not be reconcilable or comparable year-on-year in future, and baselines and targets may require updates or revisions as data, methodologies and reference scenari os develop. Consistent with the PCAF guidance on financed emissions accounting, we only consider the outstanding drawn financing amount, given this has a direct link to real economy emissions. A number of clients have material undrawn balances that, if drawn, could significantly increase the financed emissions related to those clients. We expect to assess how to manage these exposures on a forward-looking basis as we progress towards our 2030 targets. In addition, for the sectors with intensity-based targets, the emissions intensity is sensitive to material clients, and changes to drawn balances year-on-year can therefore influence the trend. We continue to engage with and support our clients in their decarbonisation journey by providing financing and advisory services. The charts below display our progress to date in relation to the updated 2030 target, including historical progress metrics based on our previous methodology. Ñ For further details see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre Oil and gas For the oil and gas sector, our analysis included scope 1, 2 and 3 emissions, including carbon dioxide and methane, for upstream and integrated companies. Our baseline and progress figures reflect combined on-balance sheet financed and facilitated emissions. We have set a target to reduce absolute combined on-balance sheet financed and facilitated emissions for our oil and gas portfolio by 14-30% by 2030 relative to our 2019 baseline. The percentage reduction range is equivalent to the percentage decrease that the IEA indicates in its APS and NZE 2024 scenarios for global sector emissions to 2030, from a 2019 baseline. We show in the chart our progress to date against our 2030 target. For 2024, the oil and gas sector represents 48% of the financed emission footprint of our target sectors. In 2024, absolute combined on-balance sheet financed and facilitated emissions in our portfolio decreased by 38% to 28.5 million tonnes of carbon dioxide equivalent (‘Mt CO 2 e’) relative to the 2019 baseline and decreased by 1% from 2023 to 2024. The reduction was due to strategic portfolio management actions, complemented by temporary factors, such as low loan drawdown levels. These factors offset increases in 2024 for both short-term lending and capital markets transaction volumes, where capital markets activity remains subdued compared with the baseline year. Facilitated emissions are incorporated on a three-year rolling average basis, and lower volumes from 2022 and 2023 continue to be included in the 2024 reported number. W e are currently reporting below the 2030 target range. Achieving the target range is sensitive to market activities, such as clients increasing capital markets transactions, and volatility in short-term lending or external factors leading clients to draw down on existing facilities, all of which could lead to increased financed emissions in our portfolio. We continue to engage and support our clients in their transition journey while managing towards our risk appetite. Oil and gas Mt CO 2 e 2024 progress from baseline (38) % (14-30)% Power and utilities For the power and utilities sector, our analysis included scope 1 and 2 emissions for upstream power generation, and diversified utilities power generation companies. Our baseline and progress figures reflect combined on-balance sheet financed and facilitated emissions. We target a combined on-balance sheet financed and facilitated emissions intensity of 195-270 tonnes of carbon dioxide equivalent per gigawatt hour (‘tCO 2 e/GWh’) by 2030. This reduction range is equivalent to the global sector average emissions intensity for 2030 that the IEA indicates in its NZE and APS 2024 scenarios. We have chosen an intensity-based target to enable increased financing of clients engaging in low-emissions solutions and transition initiatives, such as renewable and clean energy deployment, grid modernisation, energy storage and efficiency improvements. With electricity demand expected to more than double by 2050 due to population growth, electrification of industry, transport and buildings, and demand from air conditioners and data centres, a shift to low carbon- intensive power generation will be critical . We show in the chart our progress to date against our 2030 target. For 2024, the power and utilities sector represents 14% of the financed emission footprint of our target sectors. In 2024, the combined on-balance sheet financed and facilitated emissions intensity in our portfolio decreased by 18% to 242 tCO 2 e/GWh relative to the 2023 baseline and is currently within the 2030 target range. This reduction was primarily driven by increased financing to lower emission- intensive clients and a greater shift towards financing renewable energy projects and pure- play companies. Power and utilities tCO 2 e/GWh 2024 progress from baseline (18) % 195-270 HSBC Holdings plc Annual Report on Form 20-F 43 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Cement For the cement sector, our analysis included scope 1 and 2 emissions for midstream companies with clinker and cement manufacturing facilities. We target an on-balance sheet financed emissions intensity of 0.47-0.56 tonnes of carbon dioxide equivalent per tonne of cement (‘tCO 2 e/t cement’) by 2030, using 2023 as our baseline. This reduction is equivalent to the global sector average emissions intensity for 2030 that the IEA indicates in its NZE and APS 2024 scenarios. In the short term, the global cement industry has demonstrated emissions reductions through energy efficiency, alternative fuels, kiln optimisation, lowering the clinker-to- cement ratio and incorporating supplementary cementitious materials. Achieving further emissions reductions and enabling near-zero emissions cement production in the medium to long term will require significant investment in emerging technologies, including alternative cementitious materials, renewable industrial heat, and large-scale carbon capture and storage . Globally, over 50 million tonnes per annum of near-zero emissions cement and concrete production capacity has been announced or is under development. We show in the chart our progress to date against our 2030 target. For 2024, the cement sector represents 11% of the financed emission footprint of our target sectors. The 2024 emissions intensity of our portfolio, at 0.61 tCO 2 e/t cement, was 3% higher than the 2023 baseline. The increase in 2024 was mainly driven by sector mix. Our portfolio in this sector is heavily concentrated and emissions intensity trends are highly sensitive to material client exposures and changes to drawn balances year-on-year. Cement tCO 2 e/t cement 2024 progress from baseline 3 % 0.47-0.56 Iron and steel For the iron and steel sector, our analysis included scope 1 and 2 for midstream iron and steel production. We have now descoped aluminium as our exposure to this sector is very limited and the combination of two metals with different emissions intensity ranges and decarbonisation trajectories created volatility in reporting. We have currently not set a separate aluminium target due to our low exposure to the sector, both in terms of client numbers and financed emissions. We will continue to monitor our aluminium exposure and in the event that it becomes a more material part of our portfolio in future, we may consider creating a separate target. We target an on-balance sheet financed emissions intensity of 1.29-1.52 tonnes of carbon dioxide equivalent per tonne of steel (‘tCO 2 e/t steel’) by 2030, using 2023 as our baseline. This reduction is equivalent to the global sector average emissions intensity for 2030 that the IEA indicates in its NZE and APS 2024 scenarios . To achieve near-term emissions reductions, we note that steel producers are focusing on enhanced energy efficiency, increased scrap utilisation, procuring green electricity and testing alternatives to coke. A smaller group of clients are looking at more transformative investments, such as closing old coal-reliant capacity and replacing it with direct reduction and electric arc furnaces, and investing in upstream enablers, like high quality iron ore, and green iron supply chains . Further innovation and investments this decade will be crucial to scale and commercialise low-emissions iron and steel production processes, which will be an important factor in achieving our 2030 target. We show in the chart our progress to date against our 2030 target. For 2024, the iron and steel sector represents 8% of the financed emissions footprint of our target sectors. The emissions intensity of our portfolio in 2024 rose by 5% to 1.81 tCO 2 e/t steel against our 2023 baseline, driven by a shift in our sector mix across our low to high emissions-intensive clients . The emissions intensity trends in this sector are highly sensitive to volatility in client exposures and changes to drawn balances year-on-year. Iron and steel tCO 2 e/t steel 1 2024 progress from baseline 5 % 1.29-1.52 1 Previously reported progress figures include aluminium. HSBC Holdings plc Annual Report on Form 20-F 44 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Aviation For the aviation sector, our analysis included passenger airlines’ scope 1 and aircraft lessors‘ scope 3 emissions, focusing on downstream. We have changed our reporting unit for aviation from revenue passenger kilometre (‘rpk’) to revenue tonne kilometre (‘rtk’) to better align counterparties in scope, which often include all airline activities (passengers, belly cargo, dedicated cargo). Additionally, this metric enables a direct comparison with climate scenarios that are based on traffic demand forecasts, and aligns to industry practice. We target an on-balance sheet financed emissions inten sity of 709-776 tonnes of carbon dioxide equivalent per million revenue tonne kilometres (‘tCO 2 e/million rtk’) by 2030, using 2023 as our baseline. This reduction is equivalent to the global sector average emissions intensity for 2030 that the IEA indicates in its NZE and APS 2024 scenarios. We believe the sector needs significant policy support, investments in alternative fuels, such as sustainable aviation fuel (‘SAF’), and new efficient aircraft to reduce emissions. The adoption of SAF is in its infancy, currently accounting for an estimated 0.1% of all aviation fuels consumed. SAF use needs to increase to over 10% by 2030 to be in line with the IEA NZE 2024 scenario. This requires a significant ramp-up of investment in production capacity and supportive policies, such as fuel taxes and low carbon fuel standards, as existing and planned SAF projects are expected to meet just 2–4% of jet fuel demand by 2030. We show in the chart our progress to date against our 2030 target. Historical progress metrics are based on our previous methodology, with tCO 2 e/rpk converted to tCO 2 e/rtk using a multiplier of 10. For 2024, the aviation sector represents 7% of the financed emission footprint of our target sectors. In 2024, the emissions intensity of our portfolio fell by 1% to 737 tCO 2 e/million rtk relative to the 2023 baseline and is currently within the 2030 target range. This decline was primarily driven by higher exposure to airlines that are transitioning to lower emissions. Improved availability of client reported data has also improved the quality of our reported numbers. This sector is heavily concentrated, and emissions-intensity trends are highly sensitive to material client exposures and changes to drawn balances year-on-year. Aviation tCO 2 e/million rtk 1 2024 progress from baseline (1) % 709-776 1 Previously reported progress figures in tCO 2 e/ million rpk are converted to tCO 2 e/million rtk using a multiplier of 10. Automotive For the automotive sector, our analysis included scope 1 and 2 for midstream manufacturing of vehicles, and scope 3 for tank-to-wheel exhaust pipe emissions for light- duty vehicles. We excluded heavy-duty vehicles from our analysis as the target pathway derived from the IEA excludes them as they have a different decarbonisation pathway relative to light-duty vehicles. This approach is also consistent with industry practice. We will consider including heavy-duty vehicles at a later stage of our analysis, as data and methodologies develop. We target an on-balance sheet financed emissions intensity of 65.5-95.3 tonnes of carbon dioxide equivalent per million vehicle kilometres (‘tCO 2 e/million vkm’) by 2030 using 2023 as our baseline. This reduction is equivalent to the global sector average emissions intensity for 2030 that the IEA indicates in its NZE and APS 2024 scenarios. The IEA NZE 2024 scenario implies that by 2030, electric vehicle (‘EV’) share of sales would be 30%, based on HSBC analysis. During 2025, BloombergNEF estimates that EV sales were 24%. Achieving our 2030 financed emissions target will be challenging unless there is a strong acceleration in the share of EV sales in certain markets. This will require large-scale investments in new EVs and battery manufacturing plants, alongside widespread charging infrastructure and government policies to support EVs. We show in the chart our progress to date against our 2030 target. For 2024, the automotive sector represents 12% of the financed emissions footprint of our target sectors. The 2024 emissions intensity of our portfolio dropped by 4% to 146.8 tCO 2 e/million vkm against our 2023 baseline of 152.8 tCO 2 e/ million vkm. The decline against our baseline was driven by a sector mix towards lower emissions-intensity clients. Automotive tCO 2 e/million vkm 2024 progress from baseline (4) % 65.5-95.3 HSBC Holdings plc Annual Report on Form 20-F 45 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Thermal coal mining For the thermal coal mining sector, our analysis focused on scope 1, 2 and 3 emissions in upstream companies, including those involved in extraction. When calculating our financed emissions from thermal coal mining, we focused on thermal coal extraction and processing companies, and diversified mining companies. The majority of our reported financed emissions relate to scope 3 emissions associated with coal mining, representing financing provided to large conglomerates that own diversified business interests including coal. We have set a target to reduce our absolute on-balance sheet financed emissions by 70% by 2030, relative to the re-baselined 2020 figure of 3.4 million tonnes of carbon dioxide equivalent (‘Mt CO 2 e’). We used 2020 as a baseline to align with the baseline used for our drawn balance exposure targets in our thermal coal phase-out policy. Our target is consistent with a global 1.5°C-aligned pathway, as defined by the IEA NZE 2021 scenario . We show in the chart our progress to date against our 2030 target. For 2024, thermal coal mining represents 0.5% of the financed emissions footprint of our target sectors. In 2024, absolute on-balance sheet financed emissions decreased by 94% to 0.22 Mt CO 2 e relative to the 2020 baseline and decreased by 79% from 2023 to 2024 . The overall reduction from the 2020 baseline figure for 2023 and 2024 was due to reduced project financing and specific coal purpose loans, combined with strategic decisions and low client drawdown levels . We are currently reporting below the 2030 target. Looking ahead, this number remains sensitive to risk factors, such as increased client drawdowns of existing facilities and volatility in short-term lending products that could result in an increase from the current reported number. We continue to engage with and support our clients in their transition journey while managing these dynamics within our risk appetite to remain on track to meet the 2030 target. Thermal coal mining Mt C O 2 e 2024 progress from baseline (94) % Our approach to re-baselines and restatements Our re-baseline and restatement policy defines the circumstances for a restatement of previously reported data and targets, including a re-baseline. Changes to methodology, errors, and scope or boundary changes are our key drivers of change. Climate-related data and processes are continually evolving. Therefore, we do not consider data and process enhancements to be a key driver of change. This may change over time as data and processes mature. When key drivers, in aggregate, breach our defined significance thresholds, a restatement of previously reported data and targets, including where necessary a re- baseline, is required. We expect our policy to evolve with further industry guidance. Financed emissions re-baselines and restatements In 2025, we have re-baselined and restated previously reported metrics to account for the latest methodology and scope changes. Lending products that are short term in nature are now included in our financed emissions reporting. This represents a scope change and was a key driver of change for all sectors except thermal coal mining. We have refined our scope to include project finance for the relevant part of the value chain for each sector. This is a key driver of change for oil and gas. Divestments as at the latest reporting year have been removed from all years of reporting. This scope change mainly impacts the oil and gas sector . We have also descoped aluminium from the previously reported iron, steel and aluminium sector. Methodology changes include consideration of use of proceeds financing and financing for pure-play green clients, driving change in the power and utilities sector. We also changed the reporting unit for aviation from revenue passenger kilometre (‘rpk’) to revenue tonne kilometre (‘rtk’). We have aligned thermal coal mining financed emissions to the refined thermal coal financing exposure basis of preparation. Additionally, enhancements to our internal and external data have been reflected in our restated metrics. This includes improvements in our data sourcing of customer groups and sector classifications, and other sector-specific data enhancements aimed at reducing our reliance on proxy emission calculations. The aggregated change across all of these items breaches the significance threshold for absolute financed emissions or emissions intensity for all sectors. We have set out in the table below our re-baselined and restated target metrics. Ñ For further details of our re-baselined and restated metrics, see our ESG Data Pack at www.hsbc.com/esg Restated target metrics Previously Reported Restated Metrics 1 Percentage Change Sector Unit 2019 2020 2023 2019 2020 2023 2019 2020 2023 Combined on-balance sheet financed and facilitated emissions at 33% weighting, with up to 3 years moving average Oil and gas Mt CO 2 e 42.6 — 23.2 46.2 — 28.9 8 % — 25 % Power and utilities tCO 2 e/GWh — — 349.0 — — 295 — — (15) % On-balance sheet financed emissions Cement tCO 2 e/t cement — — 0.59 — — 0.59 — — 0 % Iron and steel 2 tCO 2 e/t steel — — 2.1 — — 1.73 — — (18) % Aviation 3 tCO 2 e/million rtk — — 796 — — 747 — — (6) % Automotive tCO 2 e/million vkm — — 152.4 — — 152.8 — — 0.3 % Thermal coal mining Mt CO 2 e — 4.7 — — 3.4 — — (28) % — 1  All of the restated metrics set out below represent new baseline figures, apart from oil and gas 2023 which is a restated prior year comparative. Rounding in the restated metrics has been adjusted to align with the updated target metrics where relevant. 2  Previously reported metrics for iron and steel include aluminium, which has now been descoped. 3  Previously reported progress numbers for aviation in tCO2e/million rpk are converted to tCO2e/million rtk using a multiplier of 10. HSBC Holdings plc Annual Report on Form 20-F 46 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment On-balance sheet financed emissions T he table below summarises the results of our assessment of on-balance sheet financed emissions using 2023 and 2024 data. On-balance sheet financed emissions – wholesale credit lending and project finance 1 Sector Year Scope 1-2 (Mt CO 2 e) † Scope 3 (Mt CO 2 e) † Emissions intensity PCAF Data quality score 2,† Scope 1 and 2 Scope 3 Oil and gas 2023 2.6 19.7 N/A 2.2 2.7 2024 3.0 20.4 N/A 2.3 2.8 Power and utilities 2023 7.1 N/A 288 2.9 N/A 2024 6.6 N/A 232 3.0 N/A Cement 2023 7.2 N/A 0.59 2.3 N/A 2024 5.1 N/A 0.61 2.2 N/A Iron and steel 2023 3.2 N/A 1.73 2.9 N/A 2024 3.7 N/A 1.81 2.9 N/A Aviation 2023 2.9 0.51 747 2.2 2.5 2024 2.8 0.60 737 2.2 2.7 Automotive 2023 0.16 9.3 152.8 2.2 3.2 2024 0.11 5.9 146.8 2.3 3.2 Thermal coal mining 2023 0.06 0.97 N/A 3.2 3.2 2024 0.01 0.21 N/A 3.0 3.0 Facilitated emissions The table below summarises the results of our assessment of facilitated emissions for the oil and gas, and the power and utilities sectors. As per the PCAF Standard for Facilitated Emissions, the facilitated emissions figures are weighted at 33%. We also disclose values at 100% weighting. For all 100%-weighted facilitated values, please refer to the ESG Data Pack at www.hsbc.com/esg. Facilitated emissions – ECM, DCM and syndicated loans 3 (33% weighting) Sector Year Scope 1-2 (Mt CO 2 e) † Scope 3 (Mt CO 2 e) † Emissions intensity PCAF Data quality score 2,† Scope 1 and 2 Scope 3 Oil and gas 2023 0.32 3.1 N/A 2.1 2.5 2024 0.50 6.7 N/A 2.2 2.4 Power and utilities 2023 1.2 N/A 320 2.4 N/A 2024 1.7 N/A 247 2.5 N/A 1  For all sectors in scope of financed emissions targets, the total lending exposures included were approximately 3.3% of total loans and advances to customers at 31 December 2023 and approximately 3.5% at 31 December 2024. The total loans and advances have not been adjusted for assets held for sale. The methodology for quantifying our lending exposure to financed emissions sectors will evolve over time as data and processes continue to improve. 2  PCAF scores where 1 is high and 5 is low. This is a weighted average score based on financing for on-balance sheet financed emissions or facilitated volumes. 3  The total capital markets activity analysed applying a 100% weighting in 2024 was $17.1.bn, representing 4.3% of in-scope capital markets activity at 31 December 2024. †  Data is subject to independent third-party limited assurance in accordance with ISAE 3000 / ISAE 3410. For further details, see our Financed Emissions and Thermal Coal Exposures Methodology and the independent third-party limited assurance report, which are available at www.hsbc.com/who-we-are/esg-and-responsible- business/esg-reporting-centre. Reducing emissions in assets under management HSBC Asset Management continues to work towards its interim target 1 of reducing scope 1 and 2 financed emissions intensity by 58% between 2019 and 2030 for the in scope assets under management ( ‘ AUM ‘ ), consisting of listed equities and corporate fixed income managed within our major investment hubs. As of 31 December 2019, in scope assets amounted to $193.9bn, equating to 38% of global AUM. This financed emissions target remains subject to developments in transition pathways and consultation with stakeholders, including investors, fund boards, industry bodies and regulators. As at 31 December 2024, the scope 1 and 2 financed emissions intensity of HSBC Asset Management’s in scope assets stood at 60.7 tCO 2 e/M$ invested, representing a 51% reduction compared with the 2019 baseline. The PCAF 2 Data Quality score for the 31 December 2024 financed emissions intensity was 2.3. Reported metrics 3 2019 2023 2024 Unit Scope 1 and 2 financed emissions intensity 124.0 69.8 60.7 tCO 2 e/M$ invested AUM in scope 193.9 223.0 250.2 Billions $ PCAF Data Quality Score 4 2.6 2.6 2.3 1 This target remains subject to consultation with stakeholders including investors and fund boards on whose behalf we manage the assets. The 58% reduction target is based on assumptions for financial markets and other data, including the IEA’s 2021 Net Zero Emissions by 2050 scenario and its underlying activity growth assumptions. Carbon emissions intensity is measured as tonnes of carbon dioxide equivalent per million USD invested (t CO 2 e /M$ invested), where emissions are scaled by enterprise values including cash. 2 PCAF defines and develops greenhouse gas accounting standards for financial institutions. Its Global GHG Accounting and Reporting Standard for Financed Emissions provides detailed methodological guidance to measure and disclose financed emissions. PCAF Standards are available at: https:// carbonaccountingfinancials.com/standard. HSBC Asset Management reports financed emissions based on Part A – Financed emissions 2nd edition (2022). 3 The 2024 metrics were subject to independent third-party limited assurance in accordance with the International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’, and with respect to the GHG emissions, in accordance with the International Standard on Assurance Engagements 3410 ‘Assurance Engagements on Greenhouse Gas Statements’, issued by the International Auditing and Assurance Standards Board. For the independent third party’s limited assurance report, see http://www.assetmanagement.hsbc.com/about-us/net-zero. The methodology used is available at: http://www.assetmanagement.hsbc.co.uk/-/media/files/attachments/common/creating-a-new-climate-for-change/financed- emissions-disclosures-reporting-criteria.pdf. 4 From 2024, PCAF Data Quality Score is weighted by market value. In prior years, PCAF Data Quality Score was weighted by financed emissions. HSBC Holdings plc Annual Report on Form 20-F 47 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Net zero in our own operations TCFD In line with our ambition to become a net zero bank, we aim to achieve net zero emissions in our own operations and supply chain by 2050. Reduce, replace and remove We continue to address the emissions from our own operations and supply chain by focusing on reducing our consumption and replacing consumption with low carbon alternatives. Based on our current pathway to net zero, in the interim we expect to achieve a reduction of around 40% in emissions across our operations, business travel and supply chain by 2030, compared with our 2019 baseline year. We will only use high-integrity carbon credits to remove any residual emissions from our own operations that cannot otherwise be reasonably reduced. We continue to monitor external guidance, including from the Science Based Targets initiative, to seek to ensure our approach remains credible. Our energy consumption In 2025 we achieved a 34.5% reduction in our energy consumption compared with 2019 . This was driven by our strategic divestments and adoption of energy conservation programmes, supported by more detailed and automated metering and monitoring of our consumption. In 2025, we increased our purchase of electricity from renewable sources to 94.2% , a key milestone towards our ambition to purchase 100% renewable electricity across our own operations by 2030. We continue to search for opportunities to procure renewable electricity in each of our markets. We follow RE100 principles to focus on creating additional renewable capacity through power purchase agreements (PPAs), where possible. Where regulation or our energy profile does not allow for PPAs, we pursue the procurement of renewable electricity through our utility partners, as is the case in France and regions of India. We are also investigating bespoke solutions such as on-site generation, direct investment into renewable assets and private wire agreements. If none of these options are available to us, we source remaining renewable electricity through energy attribute certificates . Business travel Connecting with clients and colleagues remains an important part of how we do business. We have introduced internal carbon budgets and enhanced our internal reporting to allow businesses and markets to monitor their travel emissions in greater detail. Through guidance on more sustainable ways to travel, we encourage ownership and conscious decision making. Recognising the importance of sustainable aviation fuel (‘SAF’) to the decarbonisation of the aviation sector and following our 2024 strategic investment made in SAF through a partnership with EcoCeres and Cathay Pacific, we continue to explore new opportunities to invest in SAF. We do not currently account for the emissions reduction of SAF purchases in our emissions reporting. Engaging with our supply chain Our supply chain is the largest source of our operational emissions and where we face the most significant decarbonisation challenge, reflecting the pace of the transition across the real economy. Our suppliers are at various stages in their sustainability journey, and we aim to support their transition while navigating external factors and challenges. Given many of our suppliers are also our customers, our customer engagement model is also beneficial to reducing our supply chain emissions . We consider sustainability and supply chain decarbonisation in our sourcing and supplier management process, where possible, to support the reduction of our supply chain emissions, being mindful of the business importance of certain goods and services and the varying regional approaches to the transition. We support our sourcing teams to further integrate sustainability into sourcing strategy and decisions, including new supplier selection, renewals and ongoing supplier management. We continue to deepen collaboration with suppliers and have increased our focus on those without public disclosures or emissions reduction plans, for example, by providing them with additional guidance. We have enhanced the questions we ask suppliers at onboarding, to get a better view of their transition journey, and are now including suppliers’ carbon footprint as a consideration in our selection process. Through ongoing engagement and targeted collaboration events, we are partnering with some of our suppliers that are more advanced in their sustainability journey, to jointly develop innovative ideas on decarbonisation and nature- related topics. We aim to support smaller suppliers in their transitions by providing educational materials. Nature in our operations and supply chain Alongside our net zero operations ambition, we aim to be a responsible consumer of natural resources across our operations and supply chain. In our supply chain, we have begun developing sustainable sourcing roadmaps across key categories, following a materiality assessment of biodiversity and nature risks. Wherever possible, we aim to protect the environment and mitigate our impact on natural resources through our procurement choices, design and construction, and our operations (e.g. reduction in waste generation and paper consumption). Our presence in environmentally sensitive areas Our global portfolio of buildings support customers and communities in some areas of water stress, and/or protected areas of biodiversity. About 53 % of our global offices, branches and data centres are in urban or city centre locations with large, concentrated populations. These areas have been identified as being subject to water stress, accounting for almost half of our annual water consumption, with about 0.9 % in protected areas of biodiversity. Although our industry is a low user of potable water, we continue to implement measures to reduce water consumption across our portfolio, including the installation of water efficient taps and flow restrictors. Environmental management of our portfolio Our buildings policy recognises that regulatory and environmental requirements differ across regions. Supported by our real estate services procedures for environmental and sustainability management, our buildings policy seeks to ensure that HSBC properties minimise their overall direct environmental impact. Our green leasing programme supports close collaboration with our landlords to drive better energy efficiency and we aim to achieve Leadership in Energy and Environmental Design (LEED) or equivalent certification for our construction projects in key premises. We seek to identify new opportunities to further reduce emissions and one of our emerging priorities is decarbonising our heating through electrification and heat networks by overcoming technical and engineering challenges. Detailed design considerations documented in our global engineering standards aim to reduce or avoid depletion of critical resources, such as energy, water, land and raw materials. Our suppliers are requested to comply with our Supplier Code of Conduct, including having in place environmental policies appropriate to the size and nature of their operations to reduce environmental impacts. HSBC Holdings plc Annual Report on Form 20-F 48 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Operational and supply chain greenhouse gas emissions in tonnes CO 2 e 2025 2024 2019 baseline Scope 1 1† ~ 16,698 15,025 22,066 Scope 2 (market-based) 1† Ä 19,919 83,760 392,270 Scope 3 Ä 1,040,300 1,127,909 1,356,631 Category 1: Purchased goods and services 2† Ä 807,293 866,873 1,033,972 Category 2: Capital goods 2† ~ 165,988 127,158 50,651 Category 6: Business travel 1† Ä 67,019 133,878 272,008 Total Ä 1,076,917 1,226,693 1,770,967 Included scope 1 and 2 of UK ~ 6,357 5,887 10,432 † Data in 2025 is subject to an independent third-party limited assurance in accordance with ISAE 3000 / ISAE 3410. For further details, see third-party limited assurance report at www.hsbc.com/ who-we-are/esg-and-responsible-business/esg-reporting-centre. In respect of data in 2019 and 2024, see our relevant Annual Report and Accounts. 1    Our reporting period aligns with our financial year January – December. Due to a three-month time lag in data availability, we use the data from Q4 of the previous year, as an estimate for the current year’s Q4 data 2.  Supply chain emissions are calculated using a combination of supplier emissions data and industry average emissions factors. A data quality score is applied to this calculation where 1 is high and 4 is low, based on the quality of emissions data. This is a weighted average score based on HSBC supplier spend. Data quality scores can be found in the ESG Data Pack. Ñ Our scope 2 location-based emissions in 2025 were 259,129 † tonnes CO 2 e. For a detailed breakdown, information about contractual instruments, and relevant environmental key facts, see our ESG Data Pack at www.hsbc.com/esg. 2025 emissions performance We continue to make progress towards our 2050 net zero ambition. In 2025 we achieved a reduction in absolute operational greenhouse gas emissions (scope 1, 2 and business travel) of 84.9% from our 2019 baseline. Overall, including supply chain emissions, we achieved a 39.2% reduction against 2019 and 12.2% compared with 2024. Scope 1 and 2 emissions We have already reduced our scope 1 and 2 emissions considerably and are on track to achieve a reduction of at least 90% by 2030. In 2025, we reduced these emissions (i.e. energy and road fleet) to 36,617 tonnes CO 2 e , representing a 91.2% reduction from our 2019 baseline, and a 62.9% reduction from 2024, driven by a reduction in energy consumption and significant investment in renewable electricity, in conjunction with an overall reduction of the emission factors. For scope 1, we saw an increase due to an adjustment of our uplift rate to include estimated emissions from refrigerant leaks in our cooling systems. Refrigerant leaks occur when cooling gases escape from equipment, contributing to greenhouse gas emissions. Currently 94.2% of our electricity comes from renewable sources and we are on track for 100% renewable electricity by 2030. In addition to the reduction in energy consumption driven by our strategic divestments, we are increasingly adopting innovative metering technologies and collaborating with strategic partners to seek to target the more challenging elements, such as our remaining data centres. Specifically in the UK, the increase in energy and scope 1 and 2 emissions is driven by an increase in electricity consumption in data centres and an increase in primary fuels in our offices and branches . In addition to our focus on energy consumption, we continue to transition our vehicles to electric, ordering fully electric or hybrid options, wherever possible. Emissions from travel We reduced our emissions from scope 3 business travel by 75.4% compared with 2019 and 49.9% compared with 2024. The decrease was driven by improved oversight, strengthened internal reporting and an overall reduction in the emissions factors provided by the UK Department for Energy Security and Net Zero. Emissions from our supply chain In 2025, we reduced our overall supply chain emissions (scope 3: category 1 and 2) by 10.3% against the 2019 baseline, and 2.1% compared with 2024. This was primarily due to the reduced emissions intensity (i.e. ratio of emissions vs revenue) of suppliers providing professional services and marketing, and who reported emissions to us. However, this has been partly counteracted by an increase in spend on servers and data centres, and an increase in the emissions intensity of suppliers providing real estate services, which also caused the increase in emissions from capital goods. Greenhouse gas emissions in tonnes CO 2 e per FTE Energy consumption in kWh in 000s 2025 2024 2019 2025 2024 2019 Scope 1, 2 and 3 (Category 6) Ä 0.5 1.1 2.9 Total Ä 687,521 728,890 1,049,072 Scope 1, 2 and 3 (Category 1, 2 and 6) Ä 5.1 5.7 7.8 UK only ~ 211,033 206,028 281,271 We continue to expand and improve our reporting as more suppliers make emissions data available. Emissions calculations approach Our emissions report adheres to the GHG Protocol, which incorporates the scope 2 market-based emissions methodology. We report GHG emissions associated with the energy used in our premises and employees’ business travel and our supply chain in tonnes of CO 2 equivalent. Based on our operational control boundary, in 2025 we collected data on energy use and business travel for our operations in 34 countries and territories out of the 56 markets we operate in, which accounted for approximately 98.2% of our full-time equivalent staff (‘FTEs’). To estimate the emissions of our operations in entities where we have operational control and a small presence, we scale up the emissions to 100%. We have reviewed and updated the emission uplift rate for scope 1 to reflect the actual data and the uncertainty regarding the volume of the estimated fugitive emissions. Following improvements in our reporting process, we have removed the uplift for scopes 2 and 3 (category 6: business travel). This approach is consistent with both the Intergovernmental Panel on Climate Change’s Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories and our internal analysis . Our calculation methodology for supply chain emissions follows the spend-based method under the GHG Protocol; a combination of supplier emissions data and industry averages. We source actual data via CDP, or direct engagement with suppliers through a third party. In the absence of this we use estimations data provided by a third party and industry average carbon intensities from CDP to estimate supply chain emissions. As more of our suppliers report their emissions, we should be able to include more accurate data and fewer industry averages in the calculation. We have applied a data quality score to the sources of data we used to determine supplier emissions. In 2025 we conducted a materiality assessment on scope 3 categories, and we have identified categories 1 (purchased goods and services), 2 (capital goods), and 6 (business travel) as material. Ñ For further details of our methodologies, assumptions, and sources of conversion factors used for the reporting of emissions, see the GHG Reporting Guidance 2025 at www.hsbc.com/ esg. HSBC Holdings plc Annual Report on Form 20-F 49 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Managing climate risk TCFD Climate risk relates to the financial and non- financial impacts that may arise as a result of climate change and the move to a net zero economy. We manage climate risk across all our businesses and incorporate climate considerations within our traditional risk types, in line with our Group-wide risk management framework. Our material exposure to climate risk relates to wholesale and retail client financing activity within our banking portfolio. We are also exposed to climate risk in relation to asset ownership by our insurance business and employee pension plans. Our clients are exposed to climate-related investment risk in our Asset Management business. Ñ For further details of our approach to climate risk, see ‘ESG risk’ on page 122 and ‘Climate risk’ on page 203 . Banking Our banking business is well positioned to support our customers managing their own climate risk through financing. For our most material wholesale customers, we use our transition engagement questionnaire to understand clients’ climate strategies and risks. We have set out a suite of policies to guide our management of climate risk. We continue to develop our climate risk appetite and metrics to help manage climate exposures in our wholesale and retail portfolios. We use climate scenario analysis to gain insights into the long-term effects of transition and physical risks across our wholesale and retail portfolios (for further details, see page 206 ). Asset management HSBC Asset Management recognises that climate-related risks may impact the operational and financial performance of investee companies. The impact of these risks will vary depending on characteristics such as asset class, sector, business model and geography. We continue to integrate climate analysis into our actively managed product offerings and seek to assess climate-related risks that may impact investment performance, where relevant. As part of our stewardship activities, we engage on climate change issues with investee companies on a priority list, as defined in our Stewardship Plan. HSBC Asset Management acts independently in its investment and voting decisions. Employee pensions The Trustee of the HSBC Bank (UK) Pension Scheme (‘the Scheme’), our largest plan with $38bn of assets under management, aims to achieve net zero greenhouse gas emissions across its defined benefit and defined contribution assets by 2050. The amount within the scheme includes defined benefit assets of $25bn and defined contribution assets amounting to $13bn. To help achieve this, it is targeting an interim emissions reduction of 50% by 2030 from 2019 levels for its equity and corporate bond mandates. This commitment was made in the context of wider efforts to manage the impact of climate change on the Scheme’s investments and the consequent impact on the financial interests of members. The Scheme reports the carbon footprint for its equity and corporate bond mandates in its annual TCFD Report, and will seek to widen the coverage of its assessment and reporting over time. In line with the Trustee’s commitment to good stewardship, the Trustee engages its asset managers to seek to ensure that financially material ESG risks are explicitly considered in the investment process. Insurance We are improving our ability to perform exploratory solvency assessment of our biggest insurance businesses under climate stress scenarios. Ñ For further details of HSBC Asset Management’s Stewardship Plan, see: www.assetmanagement.hsbc.co.uk/en/ institutional-investor/about-us/responsible- investing/-/media/files/attachments/uk/policies/ stewardship-plan-uk.pdf . Ñ For further details of the HSBC Bank (UK) Pension Scheme’s annual TCFD statements and UK Stewardship Code submission, see https:// futurefocus.staff.hsbc.co.uk/active-dc/ information-centre/search-documents. Sustainability risk policies TCFD Our sustainability risk policies form part of our broader risk management framework and are important mechanisms for managing risks, including delivering our net zero ambition . These policies focus on mitigating reputational, credit, legal and other risks related to our customers’ environmental and social impacts. Our policies HSBC has sector-specific sustainability risk policies covering the energy sector, thermal coal, agricultural commodities, forestry, and mining and metals. These are summarised in our Sustainability Risk Policies Framework which also contains HSBC’s Thermal Coal Phase-Out Policy. We also implement a cross- sector policy for project-related financing, informed by international standards. The Framework provides an overview of how HSBC identifies, evaluates and manages risks related to the delivery of our sustainability approach. Implementation of the sector-specific policies is achieved through internal policies and procedures, supported by technical experts and specialists and our relationship managers. We take a risk-based approach when identifying transactions and clients to which our sustainability risk policies apply and, where relevant, when reporting on relevant exposures, adopting approaches proportionate to risk and materiality. This helps to focus our efforts on areas that we consider to be most critical, taking into account experience from policy implementation over time. We continue to review policy implementation as we apply our policies in practice, engage customers on their transition plans and consider how we can support them. We conduct periodic policy reviews, incorporating feedback and where appropriate, updating based on factors including risk materiality, implementation experience, evolving scientific guidance, regulatory requirements and evolving industry practices . For customers in scope of sector-specific policies, we will look to take actions as outlined in our policies, such as enhanced due diligence. Such instances may require additional review and approval by our sustainability risk specialists and risk committees. Governance and implementation Our Group Risk and Compliance function has specialists who review and support implementation of our sustainability risk policies. Our relationship managers are primarily responsible for assessing relevant considerations under our risk management framework, including whether our clients may be in scope of applicable sustainability risk policies . Where considered appropriate, policy matters are escalated to relevant governance committees. Oversight of the development and implementation of policies is the responsibility of relevant governance committees comprising senior members of the Group Risk and Compliance function and global businesses. Ñ For further details of how we manage sustainability risk and our Sustainability Risk Policies Framework, see https://www.hsbc.com/sustainability-risk. HSBC Holdings plc Annual Report on Form 20-F 50 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Environment Nature-related policies Our sustainability risk policies impose restrictions on certain financing activities that may have material negative impacts on nature. Our forestry and agricultural commodities policies focus specifically on the upstream impacts of key agricultural commodities including palm oil, timber, soy and cattle. We also require palm oil customers to obtain certification under the Roundtable on Sustainable Palm Oil . Our energy policy Our energy policy applies to the broader energy system, including upstream oil and gas, fossil fuel power generation, hydrogen, renewables and hydropower, nuclear, biomass and energy from waste sectors. The policy seeks to achieve two objectives: to help drive global greenhouse gas emissions reductions, both to achieve a net zero HSBC portfolio and to support our customers in the transition to a net zero global energy future; and to identify and manage risks arising from the provision of financing or advisory services to customers with energy assets. The energy policy was first published in December 2022, and is reviewed periodically, with the most recent update in November 2025. Our thermal coal phase-out policy Our thermal coal phase-out policy seeks to achieve two objectives: to phase out the financing of thermal coal-fired power and thermal coal mining by 2030 in markets in the European Union (‘EU’) and Organisation for Economic Cooperation and Development (‘OECD’), and by 2040 in other markets (Phase-Out Commitment); and to identify and manage risks arising from the provision of financing or advisory services to customers with thermal coal assets. The policy was first published in December 2021 and is reviewed annually, with the most recent update in November 2025. Ñ For further details of our energy policy and our thermal coal phase-out policy see our Sustainability Risk Policies Framework, at https://www.hsbc.com/sustainability-risk Ñ For further details of our oil and gas, and power and utilities financed emissions targets, see page 42 . Thermal coal financing exposures We aim to reduce thermal coal financing drawn balance exposure from a 2020 baseline by at least 25% by 2025, and aim to reduce it by 50% by 2030. Our basis of preparation for reporting on thermal coal financing drawn balance exposures is aligned with our thermal coal phase-out policy and applies a risk-based approach to reporting on relevant exposures. This includes the use of globally recognised third-party data sources to screen clients and applies materiality considerations to product type, customer type and exposure type, which informs inclusion and exclusion requirements . Specifically, for customer types, exclusions are applied for certain customer types such as sovereigns and individuals. For exposure types, a threshold of $15m for drawn balances is applied for thermal coal financing exposures reporting. We recognise that we provide financing to groups of connected companies where the wider group has thermal coal exposures, and this introduces additional complexities when estimating thermal coal exposure. In such cases, we consider relevant factors, including the nature and the extent of the connection to thermal coal activity, any relevant structural considerations in relation to the wider group and any restrictions on use of financing proceeds to fund thermal coal activities. We continue to refine our basis of preparation and have made further enhancements in 2025 to develop a more detailed framework for our approach to exclusions from reporting. In line with changes to financed emissions product scope, short-term lending products are now included in scope for thermal coal drawn balance exposures. Thermal coal financing drawn balance exposure is sensitive to volatility from both short-term lending products and additional drawdowns under committed facilities. Applying our refined basis of preparation resulted in a net 10% increase in the thermal coal financing drawn balance exposure baseline (as of 31 December 2020) to $1.1bn † from $1.0bn. This year we present figures for 2023 and 2024, therefore we are not restating 2021 and 2022 figures. Our thermal coal financing drawn balance exposures for 2023 and 2024 were $0.6bn † and $0.5bn † respectively. We intend to present our 2025 figures in our Annual Report and Accounts 2026. The reductions from the revised baseline were primarily driven by natural amortisation and portfolio level financing decisions. Thermal coal financing drawn balance exposure $bn † Data is subject to independent third-party limited assurance, in accordance with ISAE 3000/ISAE 3410. For further details, see our Financed Emissions and Thermal Coal Exposures Methodology and independent third-party limited assurance report, which are available at www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre. Ñ For further details of our approach to financed emissions, see page 39 . Ñ For further details of our financed emissions and thermal coal exposures methodology, see www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre. Asset Management’s Energy and Thermal Coal Policies HSBC Asset Management’s Energy and Thermal Coal policies have been developed in support of HSBC Group’s net zero ambition. Under the Energy Policy, HSBC Asset Management aims to engage with and assess transition plans of listed issuers responsible for around 70% of relevant emissions covering listed equity and corporate fixed income issuers managed in its major investment hubs. Engagement and assessment are undertaken for the oil and gas, and power and utilities issuers in this group. The Thermal Coal Policy is developed in support of the transition from thermal coal- fired power and thermal coal mining (collectively ‘thermal coal’) within the 2030/40 timelines set out in the HSBC Thermal Coal Phase-Out Policy. Ñ The current policies including their application can be found here: https:// www.assetmanagement.hsbc.co.uk/en/ institutional-investor/about-us/responsible- investing/policies . HSBC Holdings plc Annual Report on Form 20-F 51 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Social Building inclusion and resilience We play an active role in opening up a world of opportunity for our customers, colleagues and communities by connecting across our international networks to help build a more inclusive and resilient society. Our commitment to inclusion Our approach For 160 years, our core strategy has been connecting people and businesses across geographies and cultures. By embracing diversity and fostering inclusive thinking, we better meet our customers’ needs and deliver improved outcomes. We are committed to continuing to build an inclusive organisation by focusing on four key areas as detailed below. The focus of our Global Inclusion strategy Building an inclusive culture We recognise the importance of fostering an inclusive culture, benefiting both our colleagues and customers. Embracing differences enhances diversity of thought and experiences, leading to better outcomes. Our Global Inclusion strategy embraces our unique international footprint, while seeking to ensure it remains locally relevant and compliant with local laws. Fair and inclusive recruiting Having a diverse and inclusive workforce that better reflects the communities we serve remains one of our key strategic pillars. By ensuring a fair and transparent recruitment process, we aim to attract and retain talent from all backgrounds. Fair progression of talent We understand the importance of having motivated and engaged teams. By offering growth opportunities, such as training and development programmes, and internal mobility opportunities, we aim to foster a strong sense of belonging and equip our people with the skills needed for the future. Supporting an inclusive society We are dedicated to fostering a culture where everyone feels they belong, guided by shared values and a commitment to inclusion. By listening to the voices of both colleagues and customers from all backgrounds, we seek to create a more inclusive and accessible banking experience, impacting communities positively. Our progress Prior analysis of our workforce identified that both women and Black heritage colleagues were underrepresented across senior leadership roles. We introduced a set of public aspirational ambitions, which aimed to increase representation of these two groups by 2025 and improve our Inclusion Index score as measured in our employee engagement survey, Snapshot. By the end of 2025 1 , we achieved: – a 34.7% representation of women in senior leadership roles against an ambition of 35% 1 ; – a 3.0% representation of Black heritage colleagues in senior leadership roles (UK/US combined) against an ambition of 3.4% 1 ; and – an Inclusion Index score of 78% against an ambition of 75%. We have made annual progress in increasing the representation of women in senior leadership roles, strengthened by our hiring, promotion and retention strategies. Over this period, representation of women in senior leadership roles has increased by three percentage points. We narrowly missed our gender representation ambition of 35%, primarily due to a reduction in the number of promotions and new hires in 2025. This has also impacted our progress against our ambition to achieve 3.4% of Black heritage colleagues in senior leadership roles in the UK/ US combined since 2021, which has remained steady since 2023 1 . . Previously i n 2020, we set an initial ambition to double the number of Black heritage colleagues in senior leadership roles globally by the end of 2025. Over the past five years, changes in our global organisation, such as the divestiture of the US Wealth and Personal Banking business, and increased investment across Asia, have made achieving this ambition more challenging. By the end of 2025, we increased the number of Black heritage colleagues in senior leadership roles by 48% 1 . While our publicly stated aspirational ambitions concluded at the end of 2025, we remain committed to building an inclusive culture for all colleagues, measured using our Inclusion Index. We continue to work towards better reflecting the communities we serve, in order to deliver better outcomes for our customers . Data and transparency Colleagues’ self-identification data enables us to refine and evolve our Global Inclusion strategy by ensuring we make informed decisions and set priorities that will have the greatest impact. It also helps us to identify and address any inequalities or barriers. We invite colleagues to voluntarily share their demographic data with us including ethnicity, sexual orientation and disability. In 2025, 69.1% of colleagues shared their ethnic background. We collect data in markets and territories where we are legally permitted to do so. We continue to disclose the shape of our workforce publicly, as well as participating in the government-led FTSE Women Leaders Review and Parker Review benchmarks in the UK, which track the gender and ethnicity representation of our Operating Committee and senior leadership population. Ñ For further details of our representation data, pay gap data, and actions, see www.hsbc.com/who- we-are/our-people/inclusion-at-hsbc and the ESG Data Pack at www.hsbc.com/esg 1 These numerical ambitions do not form part of any US-based senior leader performance or other objectives, or in other jurisdictions where application of such objectives would be contrary to local law. HSBC Holdings plc Annual Report on Form 20-F 52 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Social Fostering an inclusive culture Embedding inclusion Our recruitment practices are designed to be fair and transparent providing equal opportunities for all colleagues to progress their careers. We promote inclusive leadership and recognise that diverse perspectives drive innovation and stronger business outcomes. In 2025, we partnered with KPMG to support personal development opportunities for UK- based Black heritage colleagues in our IWPB and Global Functions teams. Fifteen individuals were matched with sponsors aligned to their career aspirations, who aim to broaden participants’ network and advocate for their talent and career progression. In 2025 we continued Solaris, our UK development programme for female Black heritage colleagues, with 19 individuals completing the course in 2025. Removing barriers for colleagues with a disability In 2025, we led the way in benchmarking disability confidence across Asia, aligning with United Nations Guidelines for People with Disabilities. HSBC is recognised for disability inclusion as featured by the International Labour Organisation (ILO) Global Business Disability Network. In 2025, our Digital Accessibility programme garnered 15 awards, including recognition from the Hong Kong Digital Accessibility Recognition Scheme for the accessibility of our digital channels. We were also honoured at the Pay 360 Awards in the UK celebrating outstanding achievements in the payments industry. We retained our Business Disability Forum ‘Smart Gold’ status in the UK in 2025. The Disability Smart Framework helps businesses enhance their performance for disabled customers, service users, colleagues and stakeholders . We have developed a Disability Toolkit to support colleagues with a disability and their line managers, outlining the well-being resources available and how each can help colleagues manage their condition. In the US, we have been recognised as a ‘Best Place to Work for Disability Inclusion’ in the Disability:IN, 2025 Disability Index . We are enhancing our workplace adjustments programme to better support colleagues with their needs. In 2025, it was extended to include colleagues in UAE, Egypt, Algeria, Kuwait and Oman. Supporting colleagues from a lower socio-economic background Research indicates that individuals from low socio-economic backgrounds encounter additional barriers when entering the financial services industry, and are less likely to advance to senior leadership. To support early career colleagues from these backgrounds, we launched a grant initiative in 2025, offering new joiners £1,000 to support pre-joining expenses. In 2025, we improved our position in the UK Social Mobility Index to 18th, up from 37th in 2024 and 67th in 2023. We have also partnered with Community Business, which is a non-governmental organisation that advances research on social mobility across Asia, focusing on Hong Kong, mainland China, India, Singapore, Japan, Korea, the Philippines and Malaysia. Inclusion for all In 2025, the Hong Kong-based Equal Opportunities Commission introduced the Racial Diversity & Inclusion Employers Award Scheme to honour organisations committed to racial equality, diversity and inclusion in the workplace, and we received three gold awards. We were also named the Best Bank for Diversity and Inclusion in Hong Kong at the Euromoney Awards 2025 for the second year running. We climbed to 2nd in the 2025 Hong Kong Community Business LGBTQ+ Index, marking us as the top financial institution and improving from 6th in 2023. In the US, we partnered with organisations Handshake and HelloHive to broaden our reach to undergraduate students from all backgrounds. Community engagement opportunities to support career readiness have in turn resulted in increased candidate applications to the HSBC US Early Careers programme. Gender representation (%) Holdings Board Group Operating Committee ('Group OpCo') Combined Group OpCo and direct reports 1 Subsidiary directors 2 Senior leadership 3 Middle management 3 Junior management 3 All employees 4 1 Combined Group OpCo and direct reports includes Group OpCo members and their direct reports (excluding administrative staff) as of 31 December 2025. 2 Directors (or equivalent) of subsidiary companies that are included in the Group’s consolidated financial statements, excluding corporate directors. 3 In our leadership structure, we classify senior leadership as those at global career band 3 and above; middle management as those at global career band 4; and junior management as those at global career bands 5 and 6. 4  As at 31 December 2025, the Group’s headcount consisted of 103,086 Males and 108,393 Females. Employees with undisclosed gender have been included in the ‘Male’ category. Due to local restrictions, Saudi Arabia headcount has been excluded from gender reporting. Ñ For further details of our employee profile data, see the ESG Data Pack at www.hsbc.com/esg Representation and pay gaps Our reports on gender, ethnicity and disability pay gaps show the difference in average pay between these groups of people and the wider workforce, regardless of their role or seniority. We have reported our UK gender representation and pay gap data since 2017, in line with reporting regulations. These UK disclosures are available in our ESG Data Pack. We have voluntarily extended this to include the US, mainland China, Hong Kong, India, Mexico, Singapore, Malaysia and the UAE, alongside ethnicity data for the UK and US, which are available on our website. In 2025, our mean aggregate UK-wide gender pay gap was 39.4% (2024: 40.6% ), and the ethnicity pay gap was 9.8% (2024: 7.7%). These gaps are primarily driven by workforce composition, with more men in senior, higher- paid roles and more women in junior, lower-paid roles. While we are confident in our approach to pay equity, average pay gaps will persist until there is proportional representation of women and ethnic minority colleagues at all levels. We are committed to paying colleagues fairly regardless of their gender or ethnicity and have processes to review that remuneration is free from bias. We review our pay practices regularly to ensure that our commitments to equal pay are upheld. Ñ For further details of our representation data, pay gap data, and actions see www.hsbc.com/who- we-are/our-people/inclusion-at-hsbc and the ESG Data Pack at www.hsbc.com/esg HSBC Holdings plc Annual Report on Form 20-F 53 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Social Building a healthy workplace Listening to our colleagues We value difference at HSBC, and we do this by seeking out different perspectives and listening. Our colleagues succeed together by being connected across the organisation, and they take responsibility by speaking up. These activities are core to our values and we capture regular feedback from our colleagues to help improve HSBC and the employee experience. How we listen At the heart of our employee dialogue strategy is listening to our people and responding to their feedback, fostering open, two-way communication between colleagues and the organisation. To support organisational change in 2025, we enhanced our feedback process. In addition to our annual Snapshot survey, we introduced a monthly Pulse survey for quick leadership insights. This complements our event-based lifecycle surveys, capturing colleague sentiment as they apply, join, transition and leave HSBC. We streamlined our 2025 Snapshot survey by reducing the number of questions by 40%, and aligning our reporting with overall strategic priorities. A response rate of 87% was achieved, with over 186,000 colleagues sharing their insights. Survey insights are shared with the Group Operating Committee, the Board, and over 11,000 people leaders who receive 10 or more team responses. We facilitate effective feedback discussions by providing interactive dashboards, action planning tools and discussion guides. Despite organisational change, our Snapshot results remain robust, with only slight declines in some areas. Our Employee Engagement index, which reflects how our people feel about HSBC, decreased by two percentage points to 78 %. This is four percentage points above the global financial services benchmark. Our Inclusion Index, an indicator of our commitment to fostering an inclusive culture at HSBC, remained at 78 %. Our Well-being Index increased by one percentage point, positioning us five percentage points ahead of our peers in the financial services sector. While we were eight percentage points above the financial services benchmark for our Sustainable Growth Index, confidence in our future direction decreased by three percentage points to 76 %. This decline was mainly due to lower scores among groups more impacted by ongoing organisational changes. We continue to prioritise clear communication with our colleagues about what these changes mean for them. Our new How We Lead Index, designed to gauge the embedding of our new Group-wide leadership framework, achieved 77 %. This surpassed the financial services benchmark by five percentage points. We launched four new values-aligned indices, each scoring between 79% and 81%. Each overall index score surpassed the financial services benchmark . Going forward we will continue to encourage high levels of engagement and feedback. Ñ For further details of our Snapshot data, see the ESG Data Pack at www.hsbc.com/esg. Employee relations We engage, consult, and where appropriate, negotiate with employee representative bodies. Our policy is to maintain well- developed communications and consultation programmes with all employee representative bodies. We are committed to complying with the applicable employment laws and regulations in all the jurisdictions in which we operate. HSBC’s employment practices and relations policy provides the framework and controls through which we seek to uphold that commitment. Employee conduct and harassment We expect our employees to treat each other with dignity and respect, and we do not tolerate or condone discrimination, harassment, bullying or retaliation in any form as outlined in our Global Anti-Bullying and Harassment Code. This is supported by our Global Code of Conduct. We encourage our colleagues to speak up about poor behaviour. We measure confidence of colleagues to speak up via our Snapshot response, which stood at 81% in 2025 . We recognise the need for ongoing focus on our speak-up culture to ensure we create the right environment. We are committed to raising awareness and providing education on poor behaviours and strengthening our response to these issues across the organisation. Our colleagues receive training on bullying, harassment, discrimination and retaliation at least every other year through our global mandatory training and as part of other learning resources. We monitor cases raised via our speak-up channels, and data is reported to senior leadership to ensure visibility. In 2025, we received a total of 793 cases raised in relation to bullying and harassment. Where the concerns were substantiated following an investigation, appropriate actions were taken, including dismissal where warranted. In 2025, 30% of cases raised were either partly or fully substantiated, and 38 colleagues were dismissed in relation to bullying, harassment, discrimination or retaliation. We continue to act where we find that any colleague has breached our values and high standards of conduct. How we listen Snapshot survey response 87% A response rate of 87% was achieved, with over 186,000 colleagues sharing their insights. Employee Engagement Index 78 % Our Employee Engagement Index decreased by two percentage points to 78%. This is four percentage points above the global financial services benchmark. How We Lead Index 77 % Our new How We Lead Index achieved 77%. This surpasses the financial services benchmark by five percentage points. HSBC Holdings plc Annual Report on Form 20-F 54 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Social Being a great place to work Reward and recognition Our aim is to create an environment that energises colleagues to perform at their best. This is critical for attracting, retaining and motivating our colleagues, supported by our core reward principles: rewarding colleagues responsibly, recognising colleagues’ success and supporting our colleagues to grow. Rewarding colleagues responsibly Pay is a key element of our overall proposition. We aim to enhance transparency and clarity, helping our colleagues to better understand how we make our pay decisions. We remain committed to providing a competitive total compensation package that balances an appropriate mix of fixed and variable pay. HSBC achieved accreditation on 31 December 2024 from the Fair Wage Network, which provides an independent source of wage levels, as a global living wage employer for two years. Following our accreditation, we have collaborated with the Fair Wage Network to ensure we continue to meet or surpass local living wage benchmarks. A living wage should be sufficient to cover an adequate standard of living, given the cost of goods and services in each country and territory where we operate. We also seek to implement contractual clauses that encourage our suppliers to pay at least a living wage in the UK, including our most material consultancy and workforce contracts. Recognising colleagues’ success W e have performance routines to foster a high-performance culture, and in 2025 these routines encouraged colleagues to set challenging goals aligned with our strategic priorities. Regular feedback exchanges helped colleagues understand their progress and areas for improvement. Ongoing performance check-ins result in a clear and focused year- end performance assessment that wraps up these discussions. In 2025, our Snapshot results showed that 86% of colleagues clearly understood what is expected of them, aligned to the 2024 result of 87%. Also, 81% of colleagues received performance-improving feedback, consistent with the results from 2024. Our variable pay plans recognise the performance and behaviours of our colleagues. We operate Target Variable Pay for over 127,000 colleagues across 48 markets, promoting clarity and transparency in pay decisions. This helps colleagues understand how they contribute to the organisation’s performanc e. Our ‘At Our Best’ recognition platform empowers our colleagues to recognise each other for role model behaviours aligned with our values. In 2025, we celebrated each other 1.4 million times. We also l aunched short- term recognition campaigns engaging over 30,000 colleagues, encouraging nominations for outstanding ‘How We Succeed’ behaviours. Share plans also empower colleagues to engage in HSBC’s success. In 2025, we invited around 199,000 colleagues to join our share plans, and 95% of colleagues globally have eligibility. Currently, around 63,000 colleagues participate in one of the plans. Supporting our colleagues to grow W e recognise the importance of personal and professional growth for our colleagues, and seek to support their mental, physical and financial well-being. We have refined our Well-being index in the Snapshot survey to focus on where we can make the most positive impact and updated our questions to focus on happiness at work, stress levels, job satisfaction, and sense of purpose, aligning our methodology to the Organisation for Economic Co-operation and Development (‘OECD’) measures of well- being. In 2025 our Well-being index increased to 66%, with improvements of one percentage point across happiness at work, stress levels and job satisfaction. Mental health We were ranked 1st globally for the fourth consecutive year in the CCLA Corporate Mental Health Benchmark Global 100+. We are the only organisation to achieve Tier 1 status since the benchmark’s inception. In 2025, we scored 83%, significantly higher than the financial services industry average of 34%. In 2025, we hosted two global masterclass series, one focused on mental health and performance, and the other on sleep and well- being. These events brought together senior leaders and industry experts to share evidence-based strategies for enhancing well- being and performance, while addressing workplace myths and stigma. I n 2025, we updated the well-being content in our global mandatory training and launched a new voluntary mental health module. The new module has been completed over 1,300 times since launch in November, with 27% of those completions being done by people leaders . Our network of over 250 mindfulness champions delivered sessions to over 27,000 colleagues, up 43% on 2024, and enrolment to the meditation app, Headspace, increased by 8% . Physical health We provided private medical insurance to 99% of our permanent employees, and offered telemedicine services in most countries and territories. In some markets, we also have on- site medical centres. In 2025, 80% of colleagues can access free health assessments. We also expanded medical outpatient reimbursement to over 35,000 colleagues in India. In Singapore and the UK, we introduced fertility medical support, increasing the number of countries offering this benefit to 10. In 2025, we continued to offer the Personify Health app to colleagues, helping boost their physical activity. Over 33,000 colleagues have downloaded the app, an increase of 57% on 2024. Additionally, over 11,400 colleagues participated in the HSBC Global Activity Challenge in September, an increase of over 149% in participation from 2024. We set a new Guinness World Record for the most participants in a 10,000 step challenge in 24 hours. Financial health We introduced a four-part financial well-being series providing ‘Money Skills That Make Life Easier’, which gained an overall satisfaction score of 97%. According to our Performance and Reward survey, 37% of colleagues expressed a desire for more financial well- being support. In response, we trialled an independent financial well-being platform for colleagues in Mexico, UAE, the UK and India to enhance financial literacy. Over 1,600 colleagues are participating in the trial, which concludes in March 2026 . Flexible working W e support hybrid working, with 85% of our colleagues embracing this approach. We value flexibility but also emphasise the importance of in-person interactions to foster collaboration, build trust, and demonstrate care and empathy. Strong relationships among colleagues lead to better outcomes for our customers. In 2025, we reset our expectations that Managing Directors are present in the office a minimum of four days a week, emphasising the importance of relationships , as we evolve our culture. We enhanced our family leave policies to promote flexibility and work-life balance. Over 99% of colleagues now have access to at least 18 weeks of fully-paid parental leave for primary caregivers, along with five paid compassionate leave days. Additionally, around 72% of colleagues can also use up to five paid days as carer leave days, when regular arrangements unexpectedly fall through. HSBC Holdings plc Annual Report on Form 20-F 55 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Social Developing skills, careers and opportunities Learning and skills development Employee development energises our colleagues for growth and helps equip them with the skills they need today while also preparing them to meet future challenges. Establishing our leadership framework To support our refreshed strategy and ambition, a cross-section of business leaders developed and launched a set of leadership principles and a new Group-wide leadership framework called How We Lead. This is characterised by simple, practical and universal tools and consistent leadership language for all people leaders across HSBC. Supporting future skills We have evolved our platforms to offer skills, opportunities and development pathways, supporting our colleagues to grow, perform and adapt in a changing environment. In 2025, we: – increased the number of active users and participation in learning programmes. To bridge skill gaps we offered access to learning content, fostering knowledge- sharing, collaboration and structured learning pathways; and – increased efforts in our digital badging to recognise skill-building achievements, with 46 new badges launched and more than 42,000 credentials issued in areas across data, digital, banking and finance, and wealth. Maintaining our risk management culture We continue to improve our risk management learning programmes to seek to ensure that they maintain relevance and reinforce our risk management culture. In 2025, we introduced a multi-year Financial Crime learning programme aimed at enhancing our ability to manage financial crime risks. This programme seeks to equip our colleagues in high-risk roles with essential skills and knowledge to effectively mitigate these risks. Learning is delivered through role-specific scenarios that assess capability by applying knowledge and addressing skill gaps with tailored content. We have evolved our global mandatory training, a key component of our risk and compliance framework. Moving away from traditional compliance methods, we have adopted thematic structures in risk management, financial crime, and conduct, focusing on skills and behaviours. This approach emphasises practical application and tailors content to individual capabilities. By 2026, the training will develop into a dynamic, personalised experience, emphasising foundational knowledge for new joiners and ongoing improvement for colleagues. Fostering AI adoption Our AI Academy continues to drive innovation and improvement, equipping colleagues with the skills to use AI technologies effectively and ethically. Since its launch in 2024, the Academy has evolved to focus on specialised technical pathways tailored to employee roles and their level of AI involvement. It provides comprehensive training on AI literacy, responsible AI, and AI ethics, with participants earning badges to recognise their achievements. In 2025, we piloted the AI Ambassador mentorship programme to empower a future-ready workforce. This initiative accelerates skills development and expands professional networks through dynamic peer-to-peer mentorship and meaningful connections. Engagement with the AI Academy remained strong throughout 2025, with 26,000 colleagues completing over 122,000 hours of learning. Hong Kong has progressed AI capability- building with its ‘Skills Galaxy’ and ‘Skills Master’ initiatives. These programmes focus on AI, data and leadership. The Skills Galaxy carnival attracted over 1,400 colleagues, offering interactive booths, workshops and information sessions. The Skills Master initiative was launched as a self-paced online learning journey, engaging over 3,300 colleagues in themed semesters to promote continuous learning in AI and data. Advancing wealth management expertise In 2025 we introduced the Wealth Academy to cultivate top-tier wealth managers. The Academy offers a wealth knowledge hub with 198 topics across five core skills, offering 26 hours of learning content in four languages. Our colleagues can earn digital badges at three competency levels through passing online assessments. By September 2025, over 1,000 team members interacted with the Hub, and 720 qualified for competency badges. We have teamed up with the London Business School for a nine-month programme for our 70 top-performing wealth managers. This programme combines academic rigour with practical wealth management strategies, virtual learning and customer-focused challenges. Wealth managers will earn a certificate from the London Business School upon completion. Supporting in-person development In June, we opened our fourth HSBC University campus in Nansha, Guangzhou with an event that brought together senior leaders from across the Group. Our flagship residential learning campus is dedicated to uniting our colleagues globally in a space designed for learning and engagement. It features 170 guest rooms, a large auditorium, a multi- purpose hall, modern flexible classrooms and well-being areas. To date, over 4,500 senior leaders globally have attended leadership events held at the China campus. Energising our colleagues for growth This year, we made significant upskilling efforts to fast track our digital, sustainability and growth ambitions: – Since its inception in 2024, our Digital Acceleration Programme has delivered over 25,000 hours of targeted training for key roles, including product owners and scrum masters. This strategic investment in professional development empowers our teams to build superior products and deliver services more efficiently, driving better outcomes for our customers. – We launched a programme to strengthen our Sustainable Supply Chain Finance CIB capabilities. This initiative increased ESG-related activity including client calls, deal pipeline and mandates awarded. – Expanding on our ‘Doing Business In’ series, we focused on new growth markets, such as India. In collaboration with the Indian School of Business, we conducted a four-day on-campus programme that provided bankers with a comprehensive understanding of the Indian economy, business environment, regulatory framework and clients’ banking priorities. Training at HSBC 5.6 million Trainin g hours by our colleagues in 2025. (2024: 6.2 million) 26.8 hours Training hours per FTE in 2025. (2024: 29.6 hours) HSBC Holdings plc Annual Report on Form 20-F 56 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Social Building customer inclusion and resilience Our approach to customer inclusion and resilience We support our customers, colleagues and communities through offering solutions that aim to remove barriers to accessing financial services. This section highlights some of the solutions that we offer. Access to HSBC products and services In the UK and Hong Kong, we offer no-cost accounts for customers who do not qualify for standard accounts or who might need additional support due to social or financial vulnerability. This aims to enable them access to essential banking services. In the UK, through our partnership with Shelter, we extend this service to include customers with no fixed address, so that people experiencing homelessness may be able to access HSBC services. The reduction in no-cost accounts between 2024 and 2025 is in part due to bulk closure of inactive accounts in the UK. Making banking accessible The table shows the number of no-cost accounts held by customers in the UK and Hong Kong 2025 2024 2023 Supporting financial knowledge and education We continue to invest in financial education content and tools across different channels to help customers, colleagues and communities be confident users of financial services. Supporting customer financial well-being We seek to support the financial well-being of our customers and employees so that they can make the most of their money both day- to-day and in the long term. We offer a combination of personalised services and digital tools, including a financial fitness test, future planner, webinars and financial health checks . Creating an inclusive banking experience We seek to ensure that our banking products and services are designed to be accessible for customers experiencing either temporary or permanent challenges, such as disability, impairment or a major life event. We regularly assess our web and mobile banking platforms against Web Content Accessibility Guidelines (‘WCAG’) 2.2 AA standards. Our digital accessibility programme has received industry awards including accolades from the Hong Kong Digital Accessibility Recognition Scheme, and recognition at the UK Pay 360 Awards . To foster inclusive digital environments, we are providing public training resources through our Accessibility Hub and Train 1000 programme, which offer resources for digital professionals, including developers, designers and content authors. Over 100,000 individuals engaged with these resources in 2025. Engaging with our communities Helping people and communities We seek to support the communities in which we operate, and work with charity partners to initiate a range of programmes that help people and communities respond to opportunities and challenges. We continued our partnership with the British Council in Brazil, Mexico, India, Indonesia and Vietnam, and with The King’s Trust Group in Australia, India and Malaysia to empower young, marginalised people through training and skills development on topics including employability and climate, and to help equip them for the new economy . In the UK, Egypt and Mexico, we supported financial and social empowerment: over 286,000 young people in the UK were provided with financial skills in partnership with Young Enterprise; 1,150 widows in Egypt were supported to improve their self-reliance through micro-banking with Global Fund For Widows; and 800 incarcerated women in Mexico with our charity partner La Cana were supported in gaining employability and emotional skills. In China and India, HSBC initiatives aimed to support financial literacy and entrepreneurship: 46,003 children and 26,291 families in China benefited from financial education, while over 15,000 entrepreneurs in India, primarily women, saw on average a 20% income increase and improved access to credit, markets and social security. HSBC grants in the US trained 639 individuals from low-income communities about clean energy, benefiting 6,484 people. In Hong Kong, Food Angel launched a new production line to scale up cook-chill meal operations, supporting 27,000 marginalised elderly people with HSBC’s support. Philanthropy can also play an important role in addressing the barriers to action, helping to build capacity, and testing and scaling the innovation required to achieve a resilient and sustainable net zero future. Ñ For more information about our environment- related philanthropy, refer to ‘Partnering for an enabling environment’ on page 38 . Community engagement and volunteering We offer paid volunteering days, and encourage our people to offer their time, skills and knowledge to causes within their communities. In 2025, our colleagues gave over 248,639 hours to community activities during work hours and 272,088 hours during their own time. Charitable contributions in 2025 (%) Social, including Future Skills: 36% Environment, including the Climate Solutions Partnership: 38% Local Priorities: 7% Disaster relief and other giving: 19% Cash charitable contributions $103.7m Total value of our contribution to communities $137.8m HSBC Holdings plc Annual Report on Form 20-F 57 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Governance Acting responsibly Setting high standards of governance TCFD How ESG is governed The Board takes overall responsibility for ESG strategy, overseeing executive management in developing the approach, execution and associated reporting. Progress against our ESG ambitions is reviewed through Board discussion and review of key topics, such as updates on the sustainability strategy and reviewing the ESG strategy dashboard . The Board is regularly provided with specific updates on ESG matters, including the Net Zero Transition Plan, philanthropy strategy, human rights and workforce engagement. Board members receive ESG-related training as part of their induction and ongoing development, and seek out further opportunities to build their skills and experience in this area. For further details of Board members’ ESG skills and experience , see page 220 . For further details of their induction and training in 2025, see page 231 . In March 2025, we streamlined our ESG governance with the demise of the ESG Committee, which was part of the Group Operating Committee, with the business of the meeting being embedded across the formal Operating Committee level governance meetings or managed via individual accountability. We expect that our approach to ESG governance is likely to continue to develop, in line with our evolving approach to ESG matters and stakeholder expectations . The diagram on the right provides an illustration of our ESG governance process, including how the Board’s strategy on climate is cascaded and implemented throughout the organisation. I t identifies examples of forums that manage both climate-related opportunities and risks, as well as considering the associated trade-offs. Details are also provided on their responsibilities and the responsible chair. The structure of the process remains consistent with a defined escalation pathway for issues and emerging challenges , with issues either resolved in a given forum or raised to the appropriate level of governance with appropriate scope and authority. Given the wide-ranging remit of ESG matters, the governance activities are managed through a combination of specialist governance infrastructure and regular meetings and committees, where appropriate. These include the Group Risk Committee and Group Audit Committee, which provide oversight for the scope and content of ESG disclosures. For some areas, such as climate where our approach is more advanced, dedicated governance activities exist to support the wide range of activities. The Group Chief Risk and Compliance Officer and the chief risk officers of our PRA-regulated businesses are the senior managers responsible for climate financial risks under the UK Senior Managers Regime. Climate risks are considered in the Group Risk Management Meeting and the Group Risk Committee, with scheduled updates provided, as well as detailed reviews of material matters, such as climate- related stress-testing exercises. How HSBC’s climate strategy is cascaded Opportunities Risks Board level governance Group Board Group Audit Committee Group Risk Committee Takes overall responsibility for climate strategy, overseeing executive management in developing the approach and execution. Monitors and assesses the integrity of the Group’s financial disclosures, including those relating to ESG. Oversees and advises the Board on risk-related matters including those related to ESG risks (incorporating climate risk). Chair: Brendan Nelson Chair: Brendan Nelson Chair: James Forese Specialist Board governance Sustainability Working Group Meets on an ad hoc basis to provide guidance on the Group-wide medium and longer-term sustainability strategy, including our progress towards our net zero ambition, taking into account key factors such as risk appetite, commerciality, capability and data. Chair: Geraldine Buckingham Management level governance Group Operating Committee Receives regular ESG updates and shapes and influences our strategy. Chair: Group Chief Executive Officer Group Risk Management Meeting Oversees the enterprise-wide management of all risks, including updates relating to the Group’s climate risk profile and risk appetite, top and emerging climate risks. Chair: Group Chief Risk and Compliance Officer Regional, global business and group infrastructure Examples of ESG-related management governance The following governance bodies support management in its delivery of ESG activities. Group Reputational Risk Committee Provides recommendations and advice on significant reputational risk matters with impact across the Group. Chair: Group Chief Risk and Compliance Officer Sustainability Leadership Meeting Monitors execution of the Group’s sustainability strategy and requirements. Chair: Group Chief Sustainability Officer HSBC Holdings plc Annual Report on Form 20-F 58 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Governance Human rights Our respect for human rights As set out in our Human Rights Statement, we recognise the role of business in respecting human rights. Our approach is guided by the UN Guiding Principles on Business and Human Rights (‘UNGPs’) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Our salient human rights issues Our salient human rights issues Illustration of HSBC Group’s inherent human rights risks mapped to our business activities. Inherent human rights risks Employer Buyer Provider of products and services Investor Personal customers Business customers Right to decent work Freedom from forced labour u u u Just and favourable conditions of work u u u u Right to health and safety at work u u u u Right to equality and freedom from discrimination u u u u u Right to privacy u u u Cultural and land rights u u u Right to dignity and justice u u u u u We continue to develop our understanding of our salient human rights issues. These are the human rights at risk of the most severe negative impact through our business activities and relationships. An extensive review of our salient human rights issues conducted in 2022 identified five human rights risks inherent to HSBC’s business globally, and five types of activity through which such risks might arise. These are represented in the adjacent table. We reviewed those earlier findings in 2025, drawing on consultations with stakeholders including employees, customers, investors, public authorities and civil society groups representing potentially affected people. This review validated our existing assessment, and no substantive changes have been made to the table as a result. Respondents highlighted several developing issues, including the potential social impacts of AI on communities. In 2025, we continued to focus on our approach to human rights risk management relating to the goods and services we buy from third parties and in respect of our business customers. Managing risks to human rights We continued the process of adapting our risk management procedures, reflecting what we learned from the recent work on salient human rights issues and continued to embed the guidance documents issued in 2024 for those who manage our relationships with suppliers and with business customers. Our Global Procurement function continued to implement its human rights due diligence operating procedure. This procedure sets out how HSBC aims to identify suppliers where the risk of human rights impact is considered to be higher, and the process to be followed to review and mitigate the associated risks. We continued the human rights audits of suppliers and closed out findings from the 2024 audits. We use independent negative news data to help identify controversies related to our corporate customers, including on human rights, which may lead to further review and escalation. Ñ For further details of the actions taken to respect the right to decent work, see our 2024 Annual Statement under the UK Modern Slavery Act at www.hsbc.com/modern-slavery-act. Ñ See ’Our approach to inclusion’ on page 51 for details relating to freedom from discrimination. Sustainability risk policies Some of our business customers operate in sectors in which the risk of adverse human rights impact is considered greater. Our sustainability risk policies consider human rights issues such as forced labour, harmful or exploitative child labour, workers’ rights, health and safety of communities and land rights. Through our membership of international certification schemes, such as the Forestry Stewardship Council, the Roundtable on Sustainable Palm Oil and the Equator Principles, we support standards aimed at respecting human rights. Ñ For further details on our sustainability risk policies see page 49 . Financial crime controls Our financial crime risk framework also seeks to mitigate the risk of being associated with adverse human rights impacts, by helping to identify and assess the financial crime risk associated with our customers, employees and third parties. Ñ For further details of how we fight financial crime see www.hsbc.com/fighting-financial-crime . Other principles HSBC’s Principles for the Ethical Use of Data and Artificial Intelligence include how we seek to respect the right to privacy while making use of these technologies. Ñ For further details see www.hsbc.com/ai-principles. Supporting change We continued to participate in industry forums, including the Thun Group of Banks, which is an informal group that seeks to promote understanding of the UNGPs within the sector, and the UN Global Compact Human Rights Working Group. HSBC has been a member of the Mekong Club since 2016. We are a participant in their financial services working group, and we use their informative typological toolkits, infographics and other multimedia resources covering current and emerging issues. Our compliance teams regularly collaborate and engage with the Mekong Club in designing Group-wide knowledge sharing and training sessions . Investments HSBC Asset Management acknowledges the important role that business plays in respecting human rights. HSBC Asset Management engages with companies prioritised for purposeful engagement under its stewardship plan on core relevant themes, including human rights. Engagements may be on a one-on-one basis, or collaboratively with other investors. Further details can be found in its stewardship plan. The Global Voting Guidelines provide an overview of its approach to exercising its shareholder rights in respect of ESG issues, including human rights. Supporting those impacted and those potentially at risk We continued to expand our Survivor Bank programme, which has now supported over 4,100 (a more than 15% increase since last year) survivors of modern slavery and human trafficking in the UK. Our personal customers (IWPB) team continues to deliver training to raise awareness of modern slavery, which seeks to enable employees to spot signs of abuse and escalate their concerns through established channels. In addition, our customer-facing employees globally are given training as part of their induction which aims to help them identify and support vulnerable customers. Ñ For further details of our work to support vulnerable communities, see page 56 . Effectiveness We increased the proportion of our suppliers who had either confirmed adherence to HSBC’s code of conduct or their own alternative, which was accepted by our Global Procurement function, to 97.3% . We also continued to train employees in relevant roles on one or more aspects of a range of human rights related topics, having now reached over 11,300 employees over the past 24 months. HSBC Holdings plc Annual Report on Form 20-F 59 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Governance Customer experience We remain committed to improving customers’ experiences. In 2025, we gathered feedback from over one million customers across our four business segments to help us understand our strengths and the areas we need to focus on. Customer satisfaction Listening to drive improvement We continue to listen, learn and act on customer feedback. We use the net promoter score (‘NPS’) system to share feedback with our front-line teams, allowing them to respond directly to customers. We also run dedicated global forums to provide oversight of our retail and business customers’ experiences and promote continuous improvement. How we fared In Hong Kong, we were ranked in first place for both RBW and CMB. Notably, we reached a record high NPS in RBW. We also reached our highest NPS to date in the UK among RBW customers and improved our rank. In CMB, we ranked second for mid-market enterprises, and improved our SME Business Banking ranking to fifth. In IWPB, among the mass affluent we improved our NPS or rank in seven of 10 key markets. We ranked in the top 3 of the eight competitively benchmarked markets. We rose to first place in Singapore and China and maintained second place in Malaysia. India and Mexico both experienced a decline in NPS during the period. Although NPS is influenced by various factors, the increase in customer complaints contributed to a shift in overall customer sentiment. For further details on IWPB customer complaints, please refer to page 60 . In our private bank, our global NPS increased to 54 points, compared with 48 points in 2024. In CIB, among Corporates we were ranked among the top 3 in seven of 10 key markets. We led in three markets and held a stronger position in Asia and the Middle East than in Europe and the Americas. How we listen To improve how we serve our customers, we must be open to feedback and acknowledge when things go wrong. We continue to adapt at pace to provide support for customers facing new challenges, new ways of working and those that require enhanced care needs. We aim to be open and consistent in how we track, record and manage complaints, although as we serve a wide range of customers – from personal banking and wealth customers to large corporates, institutions and governments – we tailor our approach in each of our global businesses. How we handle complaints Our principles Our actions Making it easy for customers to complain Customers can complain through the channel that best suits them. We provide a point of contact along with clear information on next steps and timescales. Acknowledging complaints All colleagues welcome complaints as opportunities and exercise empathy to acknowledge our customers’ issues. Complaints are escalated if they cannot be resolved at first point of contact. Keeping the customer up to date We set clear expectations and keep customers informed throughout the complaint resolution process through their preferred channel. Ensuring fair resolution We thoroughly investigate all complaints to address concerns and ensure the right outcome for our customers. Providing available rights We provide customers with information on their rights and the appeal process if they are not satisfied with the outcome of the complaint. Undertaking root cause analysis Complaint causes are analysed on a regular basis to identify and address any systemic issues and to inform process improvements. Hong Kong As of 31 December 2025, Hong Kong CMB received 7,324 customer complaints, down 3.5% from the year before. The primary drivers of these complaints were related to servicing, policy, and digital issues. Policy- related complaints focused on Client Selection and Exit Management (‘CSEM’) cases and CSEM appeals, while digital complaints involved business internet banking log-on problems, webpage design and online transactions issues. In 2025, despite a growing customer base, the Hong Kong RBW average complaints per 1,000 customers per month decreased from 0.71 to 0.68 . Acting on feedback The bi-monthly CMB complaint review forum brings together key decision makers, customer relationship owners and product and process owners to identify the latest complaint trends and concern areas. It oversees root cause analysis and implements improvement actions with the aim of reducing complaints and enhancing customer service. Awareness sessions are provided to client-facing staff to reinforce the CMB complaint handling procedure and customer feedback tool functionalities, to help equip staff with relevant skills and knowledge to manage complaints effectively. The improvement for Hong Kong RBW was achieved through enhanced banking capabilities and a focus on customer experience. The positive trend stemmed from fostering a customer-centric culture, emphasising service resolutions, and proactively addressing feedback through root cause analysis and insights from complaint management information and NPS. Strengthened cross-departmental collaboration and advanced technological methods in complaint management further enhanced our efficiency and responsiveness. HSBC Holdings plc Annual Report on Form 20-F 60 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Governance UK For UK CMB, complaints reduced by 13.8% in 2025 compared with 2024, with the most common complaint categories continuing to relate to telephony, servicing and transactions. A refined customer contact strategy has been embedded to drive improved outcomes and customer experience. In 2025, average complaints per 1,000 customers per month for UK RBW were 0.84 . Overall, complaints fell by 18% in 2025 vs 2024. During 2025, our two key priorities continued to be complaints prevention and improving the quality of resolution of the complaints we received. We made good progress in both areas, driven by targeted intervention in priority areas and ongoing regular oversight. Acting on feedback A focus on root cause analysis identified more than 240 opportunities to reduce dissatisfaction in key customer journeys in CMB. In RBW, we focused on the top 35 complaint themes – such as telephony customer experience, transaction disputes and international payment processing – and allocating them to individual executives as accountable ‘owners’ to remedy the root cause. Corporate and Institutional Banking Within CIB, excluding Hong Kong CMB and UK CMB, we achieved a 3.7% reduction in complaints. Complaint volumes decreased in 2025, with 7,373 complaints received compared with 7,655 in 2024, indicating an overall downward trend. In Markets and Securities Services (MSS) complaints increased slightly by 4.6% to 320. The majority of the complaints were operational in nature and resolved in a timely manner. Of the overal l MSS complaints in 2025, 46% came from Asia-Pacific and 44% came from Europe, our two largest markets. Acting on feedback These complaints were mainly related to servicing and transactions across all regions, with a notable concentration in Latin America, the Middle East and North Africa, Asia-Pacific and Europe. To mitigate potential risks, comprehensive mandated conduct and complaints training has been provided to all CIB employees. This training aims to strengthen a culture of accountability, transparency and learning aligned to our conduct principles. In 2025, focus continued to be on increasing the quality of the documentation of customer feedback received within MSS. Continuous training for front-line staff on recurring themes that are identified when managing complaints ensured that we continued to learn from feedback, allowing us to further embed changes into our processes, leading to a better customer experience. Although complaint volumes increased slightly, we identified better quality of complaint documentation, allowing us to address the issues more effectively. International Wealth and Premier Banking In 2025, IWPB received approximately 717,000 complaints from customers in eight priority markets. Average complaints per 1,000 customers (CPK) per month increased from 4.2 in 2024 to 4.7 in 2025. Our top three markets – Mexico, Australia and India – accounted for 88% of IWPB complaints globally. The rise in complaints was primarily driven by disputes in Mexico, largely stemming from customer concerns about unauthorised or fraudulent transactions. Additionally, the introduction of credit card annual fees, and more frequent risk reviews contributed to higher complaint volumes in Australia and India. We are closely monitoring these trends and have initiated targeted actions in each market to address the underlying causes. We continue our commitment to drive accuracy over how we log and respond to customer feedback. In our Private Bank, we received 593 complaints, a decrease of 54 compared with 2024, helped by the sale of our private bank in Germany. Banking products and service issues accounted for the largest volume of complaints overall, a high proportion of which were attributable to issues with payment processing and credit cards. Overall, our Private Bank resolved 578 complaints in 2025. Acting on feedback In 2025, we further strengthened our customer capabilities – the tools, skills, and processes that empower our teams to better understand, actively listen and improve the customer experience globally. We upgraded our listening platforms which support our colleagues in meeting minimum service standards and in prioritising customer experience in their daily routines. A key milestone was the launch of a new platform designed to gather and analyse customer feedback, generating actionable insights for continuous improvement. These upgrades help us to improve customer experience and systematically track and measure our progress. Ñ For further details of complaints volumes by business lines, see our ESG Data Pack at www.hsbc.com/esg. HSBC Holdings plc Annual Report on Form 20-F 61 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Governance Integrity, conduct and fairness Safeguarding the financial system We have continued our efforts to combat financial crime and reduce its impact on our organisation, customers and the communities that we serve. Financial crime includes fraud, bribery and corruption, tax evasion and the facilitation of tax evasion, sanctions and export control violations and evasion, money laundering, terrorist financing and proliferation financing. We manage financial crime risk because it is the right thing to do to protect our customers, shareholders, staff, the communities in which we operate, as well as the integrity of the financial system on which we all rely. Our financial crime risk management framework is applicable across all global businesses and functions, and in all countries and territories in which we operate. The financial crime risk framework is overseen by the Board, supported by our financial crime policy, and is designed to enable adherence to applicable laws and regulations globally. Annual global mandatory training is provided to all colleagues, with additional targeted training tailored to certain individuals. We carry out regular risk assessments to identify where we need to respond to evolving financial crime threats, as well as to monitor and test our financial crime risk management programme. Our anti-bribery and corruption policy We are required to comply with all applicable anti-bribery and corruption laws in every market and jurisdiction in which we operate. We seek to focus not only on the letter, but also on the spirit of relevant laws and regulations to demonstrate our commitment to ethical behaviours and conduct, as part of our environmental, social and corporate governance. Our global financial crime policy requires that all activity must be: conducted without intent to bribe or corrupt; reasonable and transparent; considered to be neither lavish nor disproportionate to the professional relationship; appropriately documented with business rationale; and authorised at an appropriate level of seniority. Our global financial crime policy requires that we identify and mitigate the risk of our employees, customers and third parties committing bribery or corruption. Among other controls, we use risk assessments, due diligence and ongoing monitoring following a risk-based approach, to identify and help mitigate the risk that our customers are involved in, or use HSBC’s products or services, to commit bribery or corruption. There were no concluded legal cases regarding bribery or corruption brought against HSBC or its employees in 2025. The scale of our work Each month in 2025 we monitored approximately 980 million transactions for signs of financial crime. We performed daily screening of approximately 109 million customer records for sanctions exposure. In 2025, we filed nearly 137,000 suspicious activity reports to law enforcement and regulatory authorities where we identified potential financial crime. 99% Total percentage of permanent and non- permanent employees who received financial crime training, including on anti-bribery and corruption in 2025. Whistleblowing We want colleagues and stakeholders to have confidence in speaking up when they observe unlawful or unethical behaviour. We offer a range of speak-up channels to listen to the concerns of individuals and have a zero- tolerance policy for acts of retaliation. Listening through whistleblowing channels Our global whistleblowing channel, HSBC Confidential, is one of our speak-up channels, which allows colleagues past and present and other stakeholders to raise concerns confidentially and, if preferred, anonymously (subject to local laws). In most of our markets, HSBC Confidential concerns are raised through an independent third party, offering 24/7 hotlines and a web portal in multiple languages. We also provide and monitor an external email address for concerns about accounting, internal financial controls or auditing matters (accountingdisclosures@hsbc.com). Concerns are investigated proportionately and independently, with action taken where appropriate. This can include disciplinary action, such as dismissal and adjustments to variable pay and performance ratings, or operational actions including changes to policies and procedures. We continue to actively promote our full range of speak-up channels to colleagues to help ensure their concerns are handled through the most effective route. In 2025, 1,100 concerns were investigated through HSBC Confidential (2024: 925) with 34% found to have some level of substantiation (2024: 35%) and a further 19% identifying other issues (2024: 22%). The Group Audit Committee has oversight of the Group’s whistleblowing arrangements, and the Chair of the Group Audit Committee acts as HSBC’s Whistleblowers’ Champion with responsibility for ensuring and overseeing the integrity, independence and effectiveness of the Group’s policies and procedures. Regulatory Compliance sets the whistleblowing policy and procedures and provides the Group Audit Committee with periodic updates on their effectiveness. Specialist teams and investigation functions own whistleblowing controls, with monitoring in place to determine control effectiveness. Ñ For further details of the role of the Group Audit Committee in relation to whistleblowing, see page 238 . HSBC Holdings plc Annual Report on Form 20-F 62 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Governance A responsible approach to tax We seek to pay our fair share of tax in all jurisdictions in which we operate, applying both the letter and spirit of the law, and to minimise the risk of customers using our products and services to evade or inappropriately avoid tax. Our approach to tax and governance processes is designed to achieve these goals. We maintain open and transparent relationships with tax authorities. We cooperate to resolve differing interpretations or disputes in a timely manner . Through adoption of the Group’s risk management framework, we seek to ensure that we do not adopt inappropriately tax- motivated transactions or products, and that tax planning is scrutinised and supported by genuine commercial activity. HSBC has no appetite for using aggressive tax structures. With respect to our customers’ taxes, we have made considerable investments to support external tax transparency initiatives to reduce the risk of banking services being used to facilitate customer tax evasion and implemented processes that aim to ensure that inappropriately tax-motivated products and services are not provided to our customers. Our tax contributions During 2025, we paid $7.7bn (2024: $9.2bn) in respect of our own tax liabilities and collected taxes of $10.0bn (2024: $10.1bn) on behalf of governments around the world. Tax paid was lower than in the previous year primarily due to the 2025 corporate income tax assessments for the Group’s entities in Hong Kong being received and paid in January 2026, whereas the 2024 assessments were received and settled during 2024. Taxes paid – by type of tax Tax on profits $4,296m (2024: $6,080m) Withholding taxes $685m (2024: $667m) Employer taxes $1,102m (2024: $1,003m) Bank levy $273m (2024: $135m) Irrecoverable VAT $1,160m (2024: $1,098m) Other duties and levies $221m 1 (2024: $229m) 1 Other duties and levies includes property taxes of $83m (2024: $76m). Our approach to customer and market conduct Our Conduct Approach guides us to do the right thing and to focus on the impact we have for our customers and the financial markets in which we operate. It is embedded throughout our product and services lifecycle, with a focus on five clear outcomes: – We understand our customers’ needs. – We provide products and services that offer a fair exchange of value. – We service customers’ ongoing needs and put it right if we make a mistake. – We act with integrity in the financial markets we operate in. – We operate resiliently and securely to avoid harm to customers and markets. Our principles, policies and procedures set standards to help ensure that we consider and meet customer needs and protect market integrity. They help ensure our products and services remain fit-for-purpose, offer fair value exchange and mitigate the risk of customer or market detriment. We train all our colleagues on the importance of customer and market conduct, helping to ensure our conduct outcomes are part of everything we do. Our approach with suppliers We maintain global policies and procedures for the onboarding and use of third-party suppliers. We expect suppliers to meet our third-party risk compliance requirements and assess them to identify any financial stability concerns. Sustainable procurement Supporting and engaging with our supply chain is vital to progressing our sustainable procurement goals. In 2025: – We continued gathering carbon emission data from our suppliers through CDP (formerly the Carbon Disclosure Project) and an additional data collection source introduced in 2024 to simplify and expand our supplier outreach for scope 3 data collection. – We continued to deepen our collaboration with suppliers and have increased our focus on those without public disclosures or emissions reduction plans, and supported them by providing additional guidance where appropriate . – Through ongoing engagement and targeted collaboration events, we are partnering with – some of our suppliers who are more advanced in their sustainability journey to jointly develop innovative ideas on decarbonisation and nature-related topics. – We also supported our sourcing teams to further integrate sustainability into sourcing strategy and decision making, including new supplier selection, renewals and ongoing supplier management. – As part of our nature approach, we have begun developing sustainable sourcing roadmaps across key sectors, such as support services, technology services and corporate real estate, following a materiality assessment of biodiversity and nature risks. The roadmaps will help us address high-risk areas and include considerations for nature and biodiversity within our procurement activities. – We continue to implement our human rights due diligence process to help identify supplier risks. – We maintained an inclusive approach to supplier engagement, supporting fair access to procurement opportunities for all suppliers. Supplier Code of Conduct Our Supplier Code of Conduct (‘the Code’) sets out the minimum standards we expect of our suppliers in respect of the environment, inclusion and human rights. In 2025, we refreshed the Code to include principles on responsible use of AI. We continue to formalise adherence to the Code by seeking to add clauses to our supplier contracts which support the right to audit and act if a breach is discovered. At the end of 2025, 97.3% of approximately 9,830 contracted suppliers had either confirmed adherence to the Code, or provided their own alternative that was accepted by our Global Procurement function. Our Supplier Code of Conduct is available at: www.hsbc.com/who-we-are/esg-and- responsible-business/working-with-suppliers Ñ For further details of the number of suppliers in each geographical region, see the ESG Data Pack at www.hsbc.com/esg HSBC Holdings plc Annual Report on Form 20-F 63 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Governance Safeguarding data Data privacy We are committed to protecting and managing the data we process, in accordance with the laws and regulations of the markets in which we operate. Our strategy rests on having the right talent, technology, and processes to manage privacy risks effectively. Our Group- wide data risk policy provides a consistent approach to data and privacy risk management, applicable across all global businesses and infrastructure. This policy is reviewed annually with the aim of ensuring that we remain responsive to regulatory changes. Our HSBC Privacy Principles can be found at: www.hsbc.com/ who-we-are/esg- and-responsible-business/ managing-risk/ operational-risk . We regularly provide employees with training and awareness sessions on data privacy and security, offering both mandatory and supplementary sessions as required. In addition, we mark International Data Privacy Day each year, with events that discuss developments in the data privacy landscape and reinforce privacy awareness across HSBC . We provide transparency to our customers, employees and other stakeholders regarding processing of personal data and their rights. Where relevant, we work with third parties to help ensure adequate protections are provided, in line with our data risk policy and regulatory requirements. We offer a broad range of channels for customers, employees and other stakeholders to raise privacy concerns and questions. Data privacy is regularly monitored at multiple governance forums, including at Board level, providing senior executive oversight on privacy risk and global programmes. Our Global Internal Audit function independently assures whether our data privacy risk management approach is effectively designed and operational. In addition, we have established data privacy governance structures and continue to embed accountability across all businesses and functions. We continue to review and implement industry best practices for data privacy and security, working closely with our data protection officers, industry bodies, and research institutions. Regular reviews and privacy risk assessments are conducted to strengthen our data privacy controls. Procedures are in place to address data privacy considerations, including notifying regulators, customers and data subjects as required by law in the event of a data privacy breach . Intellectual property rights practices Our Group intellectual property risk policy, supported by comprehensive controls and guidance, is designed to manage risks associated with intellectual property. This policy seeks to ensure that our commercially and strategically valuable intellectual property is properly identified and safeguarded. This includes applying to register trademarks and patents and enforcing our rights against third parties making unauthorised use of our intellectual property. Additionally, our intellectual property framework helps prevent infringement of third-party rights, thereby supporting the consistent and effective management of intellectual property risk in alignment with our risk appetite. Cybersecurity The threat of a significant cyber incident remains a concern for the Group and the broader financial sector. As cyber threats continue to evolve, failure to protect our operations may result in disruption to our business services and negative impacts on our customers, such as a financial loss, loss of sensitive data or damage to our reputation, among other risks. Identify, protect, detect, respond and recover We invest in business and technical controls to help prevent, detect and mitigate cyber threats. Our controls follow a ’defence in depth’ approach, leveraging multiple security layers, and recognising the complexity of our environment. Our ability to detect and respond to attacks through our round-the-clock security operations is intended to help reduce the impact of attacks. We routinely test our data backup and disaster recovery processes with the aim of limiting the impact on customers and restoring services in the event of a cyber-attack. Our cyber intelligence and threat analysis team proactively collects and analyses internal and external cyber information to evaluate threat levels, including from ongoing geopolitical events, potential outcomes, and what control adjustments are needed to best defend against them. We collaborate with the broader cyber intelligence community, the financial services industry and global government agencies. In 2025, we continued to enhance our cybersecurity capabilities to help reduce the likelihood and impact of unauthorised access, security vulnerabilities being exploited, data leakage, third-party security exposure and advanced malware. We focused on preparedness for emerging technology risks, such as AI and quantum computing. We work with third parties, suppliers and financial infrastructure bodies to help reduce the threat of cyber-attacks impacting our business services. We have a third-party security risk management process in place to continually assess, identify and manage cybersecurity risks with suppliers and other third-party relationships. This includes assessments of the third parties against our own cybersecurity standards and requirements. Policy and governance We have a suite of cybersecurity policies, procedures and controls to help with the effective oversight and management of the organisation. This includes but is not limited to defined information security responsibilities for employees, contractors and third parties, as well as standard procedures for cyber incident identification, investigation, mitigation and reporting. We operate a three lines of defence model, aligned to the enterprise risk management framework, to help the oversight and challenge of our cybersecurity capabilities. The assessment and management of our cybersecurity risk is led and coordinated by our Global Chief Information Security Officer (‘CISO’), who has extensive experience in financial services, security and resilience as well as strategy, governance, risk management and regulatory compliance. The Global CISO is supported by business and regional level CISOs. In the event of incidents, both the Global and relevant supporting CISOs are informed and are engaged in line with our cybersecurity incident response protocols. Key risk indicators, significant cyber incidents and other matters related to cybersecurity are presented on a regular basis to various risk and control committees, including Board committees, the Group Risk Management Meeting and global businesses. Our cybersecurity capabilities are periodically assessed against standards issued by the National Institute of Standards and Technology and by independent third parties, and we proactively collaborate with regulators to participate in regular testing activities. In addition, HSBC engages external, independent third parties to support our penetration and threat-led penetration testing. Cyber training and awareness Our people play an important role in protecting against cybersecurity threats and we aim to provide tools, and encourage behaviours, to keep our organisation and customer data safe. This includes cybersecurity training and awareness for all our people and targeted training for staff that are identified as having elevated cyber risk exposure. We host an annual Cyber Awareness Month, covering topics such as online safety at home, social media safety, safe hybrid working and cyber incidents and response. We also provide a wide range of education and guidance to our customers about how to spot and prevent online fraud. Ñ See ‘Top and emerging risks’ on pages 121 and 122 for more information relevant to data privacy and cybersecurity. HSBC Holdings plc Annual Report on Form 20-F 64 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial review The financial review gives detailed reporting of our financial performance in 2025 at Group level, our business segments and legal entities. 65 Financial summary 88 Business segments and legal entities 106 Alternative performance measures 111 Other information 3 HSBC Holdings plc Annual Report on Form 20-F 65 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Basis of presentation Constant currency performance Constant currency performance is computed by adjusting reported results for the effects of foreign currency translation differences, which reflect the movements of the US dollar against most major currencies during 2025. Excluding these differences allows us to assess balance sheet and income statement performance on a like-for-like basis and to better understand the underlying trends in the business. Foreign currency translation differences for 2025 are computed by retranslating into US dollars for non-US dollar branches, subsidiaries, joint ventures and associates: – the income statement for the year ended 31 December 2024 at the average rate of exchange for the year ended 31 December 2025; and – the balance sheets at 31 December 2024 at the prevailing rates of exchange on 31 December 2025. No adjustment has been made to the exchange rates used to translate foreign currency-denominated assets and liabilities into the functional currencies of any HSBC branches, subsidiaries, joint ventures or associates. The constant currency data of our operations in Türkiye has not been adjusted further for the impacts of hyperinflation. When reference is made to foreign currency translation differences in tables or commentaries, comparative data reported in the functional currencies of HSBC’s operations has been translated at the appropriate exchange rates applied in the current period on the basis described above. Notable items and material notable items We separately disclose ‘notable items’, which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature. Certain notable items are classified as ‘material notable items’, which are a subset of notable items. Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement, and are excluded from our target basis dividend payout ratio calculation and earnings per share measure. Material notable items in 2025 or relevant comparative periods relate to the operating expenses associated with actions to exit or wind down non-strategic businesses. They also include a dilution loss and the recognition of an impairment of our investment in BoCom, and a legal provision relating to developments in a claim in Luxembourg relating to the Bernard L. Madoff Investment Securities LLC fraud. Ñ The tables on pages 88 to 90 and pages 97 to 102 detail the effects of notable items on each of our business segments, legal entities and selected countries/ territories in 2025 and 2024. Impact of strategic transactions In addition to the items categorised as material notable items, the impacts of strategic transactions include the distorting impact observed between the periods of the operating income statement results related to acquisitions, disposals and wind-downs that affect period-on-period comparisons. Once a transaction has completed or a wind-down has commenced, the impact will include the operating income statement results of each business, which are not classified as notable items, in any comparative period if there are no results in the current period as a result of a transaction, or a reduction in revenue or costs has arisen from the wind-down of a business. We consider the monthly impact of distorting income statement results when calculating the impact of strategic transactions. In the case of wind-downs, or transactions that complete in phased tranches, there may be timing differences between the recognition of operating cost impacts and operating revenue impacts. These would arise in the event there is a timing lag between the impact of cost actions and the resultant impact on operating revenue. Impact of hyperinflationary accounting The sale of our business in Argentina, previously treated as a hyperinflationary economy for accounting purposes, was completed in 2024. We continue to treat Türkiye as a hyperinflationary economy for accounting purposes. The impact of applying International Accounting Standard (‘IAS’) 29 ‘Financial Reporting in Hyperinflationary Economies’ and the hyperinflation provisions of IAS 21 ’The Effects of Changes in Foreign Exchange Rates’ in the current period for our operations in Türkiye was a decrease in the Group’s profit before tax of $150m (2024: $157m), comprising a decrease in revenue, including a loss on net monetary position of $145m (2024: $146m) and an increase in ECL and operating expenses of $4m (2024: increase of $11m). The consumer price index at 31 December 2025 for Türkiye was 3,513.87, with an increase in the period of 829.32 (2024: 825.55 increase). Use of alternative performance measures Our reported results are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IFRS Accounting Standards’), as detailed in the financial statements starting on page 288 . To measure our performance, we supplement our IFRS Accounting Standards figures with non-IFRS Accounting Standards measures, which constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations. These measures include those derived from our reported results that eliminate factors distorting year-on-year comparisons. The ‘constant currency performance’ measure used throughout this report is described above. Definitions and calculations of other alternative performance measures are included in our ‘Alternative performance measures’ on page 106 . Additionally, the insurance-specific non-GAAP measure ‘Insurance equity plus CSM net of tax‘ is provided on page 93 , along with its definition and reconciliation to the GAAP measure. All alternative performance measures are reconciled to the closest reported performance measure. Return on average tangible equity excluding notable items The calculation for RoTE excluding notable items adjusts the ‘profit attributable to the ordinary shareholders, excluding goodwill and other intangible assets impairment‘ for the post-tax impact of notable items. To better align with market practice, from 2025 we no longer adjust the ‘average tangible equity‘ for the post-tax impact of notable items in each period. Comparatives have been re-presented. Ñ See page 106 for the definition of return on average tangible equity excluding notable items and page 107 for the reconciliation to the GAAP measure. Banking net interest income Banking net interest income (‘banking NII’) adjusts our NII primarily for the impact of funding trading and fair value activities reported in interest expense. It represents the Group’s banking revenue that is directly impacted by changes in interest rates. We use this measure to determine the deployment of our surplus funding, and to help optimise our structural hedging and risk management actions. For more information on banking NII, see page 69 . HSBC Holdings plc Annual Report on Form 20-F 66 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Constant currency revenue and profit before tax excluding notable items and the impact of strategic transactions To aid the understanding of our results, we separately report ‘constant currency revenue excluding notable items‘ and ‘constant currency profit before tax excluding notable items‘, which exclude the impact of notable items and the impact of foreign exchange translation. We also separately disclose ‘constant currency revenue excluding notable items and the impact of strategic transactions‘ and ‘constant currency profit before tax excluding notable items and the impact of strategic transactions‘, which also exclude the impact of strategic transactions classified as material notable items as described above. We consider these measures to provide useful information to investors as they remove items that distort period-on- period comparisons. The impact of strategic transactions also includes the distorting impact between the periods of the operating income statement results related to acquisitions and disposals and that affect period-on-period comparisons. These impacts are not included in our notable or material notable items. The impact of strategic transactions is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. Ñ See page 107 for the reconciliation to the GAAP measure. Target basis operating expenses Target basis operating expenses is computed by excluding the direct cost impact of the disposals of our banking business in Canada and our business in Argentina from the 2024 baseline. It is measured on a constant currency basis and excludes notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency, which we consider to be outside of our control. We consider target basis operating expenses to provide useful information to investors by quantifying and excluding the notable items that management considered when setting and assessing cost-related targets. Ñ See page 109 for further details and the reconciliation to the GAAP measure. Basic earnings per share excluding material notable items and related impacts We established a dividend payout ratio target basis of 50% for 2025. For the purposes of computing our dividend payout ratio target basis, we exclude from earnings per share material notable items and related impacts. Material notable items for the ‘basic earnings per share excluding material notable items and related impacts‘ measure in 2025 and comparative periods are described above. Related impacts include those items that do not qualify for designation as notable items but whose adjustment is considered by management to be appropriate for the purposes of determining the basis for our dividend payout ratio target basis calculation, for which we exclude from earnings per share material notable items and related impacts. Ñ See page 92 for the supplementary analysis of the impact of strategic transactions. Ñ See page 106 for the definition of basic earnings per share excluding material notable items and related impacts and page 110 for the reconciliation to the GAAP measure. Critical estimates and judgements The results of HSBC reflect the choice of accounting policies, assumptions and estimates that underlie the preparation of HSBC’s consolidated financial statements. The material accounting policies, including the policies which include critical estimates and judgements, are described in Note 1.2 on the financial statements. The accounting policies listed below are highlighted as they involve a high degree of uncertainty and have a material impact on the financial statements: – Impairment of amortised cost financial assets and financial assets measured at fair value through other comprehensive income (‘FVOCI’): The most significant judgements relate to defining what is considered to be a significant increase in credit risk, determining the lifetime and point of initial recognition of revolving facilities, selecting and calibrating the probability of default (‘PD’), the loss given default (‘LGD’) and the exposure at default (‘EAD’) models, as well as selecting model inputs and economic forecasts, making assumptions and estimates to incorporate relevant information about late-breaking and past events, current conditions and forecasts of economic conditions, and selecting applicable recovery strategies for certain wholesale credit-impaired loans. A high degree of uncertainty is involved in making estimations using assumptions that are highly subjective and very sensitive to the risk factors. See Note 1.2 (j) on page 306 . – Deferred tax assets: The most significant judgements relate to those made in respect of recoverability, which are based on expected future profitability. See Note 1.2 (m) on page 310 . – Valuation of financial instruments: In determining the fair value of financial instruments a variety of valuation techniques are used, some of which feature significant unobservable inputs and are subject to substantial uncertainty. See Note 1.2 (d) on page 304 . – Impairment of investment in subsidiaries: Impairment testing, including testing for reversal of impairment, involves significant judgement in determining the value in use, and in particular estimating the present values of cash flows expected to arise from continuing to hold the investment, based on a number of management assumptions. See Note 1.2 (a) on page 301 . – Impairment of interests in associates: Impairment testing, including testing for reversal of impairment, involves significant judgement in determining the value in use, and in particular estimating the present values of cash flows expected to arise from continuing to hold the investment, based on a number of management assumptions. The most significant judgements relate to the impairment testing of our investment in Bank of Communications Co., Limited (‘BoCom’). See Note 1.2 (a) on page 301 . – Impairment of goodwill and non-financial assets: A high degree of uncertainty is involved in estimating the future cash flows of the cash-generating units (‘CGUs’) and the rates used to discount these cash flows. See Note 1.2 (b) on page 302 . – Provisions: Significant judgement may be required due to the high degree of uncertainty associated with determining whether a present obligation exists, and estimating the probability and amount of any outflows that may arise. See Note 1.2 (n) on page 311 . – Post-employment benefit plans: The calculation of the defined benefit pension obligation involves the determination of key assumptions including discount rate, inflation rate, pension payments and deferred pensions, pay and mortality. See Note 1.2 (l) on page 310 . Given the inherent uncertainties and the high level of subjectivity involved in the recognition or measurement of the items above, it is possible that the outcomes in the next financial year could differ from the expectations on which management’s estimates are based, resulting in the recognition and measurement of materially different amounts from those estimated by management in these financial statements. HSBC Holdings plc Annual Report on Form 20-F 67 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Consolidated income statement Summary consolidated income statement 2025 2024 2023 1 2022 2021 $m $m $m $m $m Net interest income 34,794 32,733 35,796 30,377 26,489 Net fee income 13,343 12,301 11,845 11,770 13,097 Net income from financial instruments held for trading or managed on a fair value basis 2 19,682 21,116 16,661 10,278 7,744 Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss 11,175 5,901 7,887 (13,831) 4,053 Net insurance premium income — — — — 10,870 Insurance finance (expense)/income (11,197) (5,978) (7,809) 13,799 — Insurance service result 1,825 1,310 1,078 809 — Gain on acquisition 3 — — 1,591 — — Losses recognised on sale of business operations 4 (47) (1,752) (61) (2,678) — Other operating income/(expense) 5,6 (1,301) 223 (930) 96 1,687 Total operating income 68,274 65,854 66,058 50,620 63,940 Net insurance claims and benefits paid and movement in liabilities to policyholders — — — — (14,388) Net operating income before change in expected credit losses and other credit impairment charges 7 68,274 65,854 66,058 50,620 49,552 Change in expected credit losses and other credit impairment charges (3,850) (3,414) (3,447) (3,584) 928 Net operating income 64,424 62,440 62,611 47,036 50,480 Total operating expenses excluding impairment of goodwill and other intangible assets (36,023) (32,966) (32,355) (32,554) (33,887) (Impairment)/reversal of impairment of goodwill and other intangible assets (405) (77) 285 (147) (733) Operating profit 27,996 29,397 30,541 14,335 15,860 Share of profit in associates and joint ventures 2,911 2,912 2,807 2,723 3,046 Impairment of interest in associate 6 (1,000) — (3,000) — — Profit before tax 29,907 32,309 30,348 17,058 18,906 Tax expense (6,776) (7,310) (5,789) (809) (4,213) Profit for the year 23,131 24,999 24,559 16,249 14,693 Attributable to: –  ordinary shareholders of the parent company 21,102 22,917 22,432 14,346 12,607 –  preference shareholders of the parent company — — — — 7 –  other equity holders 1,183 1,062 1,101 1,213 1,303 –  non-controlling interests 846 1,020 1,026 690 776 Profit for the year 23,131 24,999 24,559 16,249 14,693 Five-year financial information 2025 2024 2023 1 2022 2021 $ $ $ $ $ Basic earnings per share 1.21 1.25 1.15 0.72 0.62 Diluted earnings per share 1.20 1.24 1.14 0.72 0.62 Dividends per ordinary share (paid in the period) 8 0.66 0.82 0.53 0.27 0.22 % % % % % Dividend payout ratio 9 50 50 50 44 40 Post-tax return on average total assets 0.7 0.8 0.8 0.5 0.5 Return on average ordinary shareholders’ equity 12.3 13.6 13.6 9.0 7.1 Return on average tangible equity 13.3 14.6 14.6 10.0 8.3 Effective tax rate 22.7 22.6 19.1 4.7 22.3 1    From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data for the financial year ended 31 December 2022 have been restated accordingly. Comparative data for the year ended 31 December 2021 is prepared on an IFRS 4 basis. 2 In 2025, the amounts include a $ 0.1 bn (2024: $ 0.1 bn gain) mark-to-market gain on interest rate hedging of the portfolio of retained loans post sale of our retail banking operations in France and a $ 0.1 bn fair value loss on Grupo Financiero Galicia‘s (‘Galicia‘) American Depositary Receipts (‘ADRs‘) received as purchase consideration from the sale of our business in Argentina. In 2024, the amounts include a $ 0.3 bn gain (2023: $ 0.3 bn loss) on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 3 Gain recognised in respect of the acquisition of SVB UK. 4 In 2024, the amount includes a $ 1.0 bn loss on disposal and a $ 5.2 bn loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This was partly offset by a gain of $ 4.6 bn, inclusive of the recycling of $ 0.6 bn in foreign currency translation reserve losses and $ 0.4 bn of other reserves losses but excluding the $ 0.3 bn gain on the foreign exchange hedging (see footnote 2 above) on the sale of our banking business in Canada. The amount in 2023 primarily reflected losses due to restrictions impacting the recoverability of assets in Russia, partly offset by a gain on sale of our retail banking operations in France. The amount in 2022 included losses from classifying businesses as held for sale as part of a broader restructuring of our European business. 5 Includes a loss on net monetary positions of $ 0.2 bn (2024: $1.2 bn; 2023: $ 1.7 bn ) as a result of applying IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. 6 In 2025, the amounts include recycling of cumulative fair value losses of $ 1.5 bn relating to the French retained portfolio of home and certain other loans following the completion of its sale to a consortium comprising Rothesay Life plc and CCF and a loss of $ 1.1 bn inclusive of reserves recycling as a result of the dilution of our shareholding in BoCom. We have also recognised a $ 1.0 bn impairment loss following an impairment test on the carrying value of the Group’s investment in BoCom in ‘Impairment of interest in associate’. See Note 18 on pages 345 to 348 . 7 Net operating income before change in expected credit losses and other credit impairment charges also referred to as revenue. 8 Includes dividend paid during the period, which consisted of a fourth interim dividend of $ 0.36 per ordinary share in respect of the financial year ended 31 December 2024 paid in April 2025 and the first, second and third interim dividends of $ 0.30 per ordinary share in respect of the financial year ending 31 December 2025. In 2024, a special dividend of $ 0.21 per ordinary share from the Canada sale proceeds was paid in June. 9 In 2025, 2024 and 2023, our dividend payout ratio was adjusted for material notable items and related impacts. In 2022, our dividend payout ratio was adjusted for the loss on classification to held for sale of our retail banking business in France, items relating to the sale of our banking business in Canada, and the recognition of certain deferred tax assets. No items were adjusted for in 2021. HSBC Holdings plc Annual Report on Form 20-F 68 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Income statement commentary The following commentary compares Group financial performance for the year ended 2025 with 2024 , unless otherwise stated. Net interest income Year ended Quarter ended 31 Dec 2025 31 Dec 2024 31 Dec 2023 31 Dec 2025 30 Sep 2025 31 Dec 2024 $m $m $m $m $m $m Interest income 97,872 108,631 100,868 24,503 24,361 26,004 Interest expense (63,078) (75,898) (65,072) (15,307) (15,584) (17,819) Net interest income 34,794 32,733 35,796 9,196 8,777 8,185 Average interest-earning assets 2,190,078 2,099,285 2,161,746 2,221,054 2,218,472 2,113,276 % % % % % % Gross interest yield 1 4.47 5.17 4.67 4.38 4.36 4.90 Less: gross interest payable 1 (3.11) (3.95) (3.47) (2.93) (3.01) (3.60) Net interest spread 2 1.36 1.22 1.20 1.45 1.35 1.30 Net interest margin 3 1.59 1.56 1.66 1.64 1.57 1.54 1 Gross interest yield is the average annualised interest rate earned on average interest-earning assets (‘AIEA’), net of amortised premiums and loan fees. Gross interest payable is the average annualised interest cost as a percentage of average interest-bearing liabilities. 2 Net interest spread is the difference between the average annualised interest rate earned on AIEA, net of amortised premiums and loan fees, and the average annualised interest rate payable on average interest-bearing funds. 3 Net interest margin is net interest income expressed as an annualised percentage of AIEA. Summary of interest income by type of asset 2025 2024 2023 Average balance Interest income Yield Average balance Interest income Yield Average balance Interest income Yield $m $m % $m $m % $m $m % Short-term funds and loans and advances to banks 325,790 11,460 3.52 349,517 14,727 4.21 403,674 14,770 3.66 Loans and advances to customers 971,804 46,036 4.74 949,825 49,879 5.25 957,717 47,673 4.98 Reverse repurchase agreements – non-trading 1 273,941 16,616 6.07 238,694 17,721 7.42 240,263 14,391 5.99 Financial investments 539,107 20,830 3.86 470,182 20,587 4.38 407,363 16,858 4.14 Other interest-earning assets 79,436 2,930 3.69 91,067 5,717 6.28 152,729 7,176 4.70 Total interest-earning assets 2,190,078 97,872 4.47 2,099,285 108,631 5.17 2,161,746 100,868 4.67 Summary of interest expense by type of liability 2025 2024 2023 Average balance Interest expense Cost Average balance Interest expense Cost Average balance Interest expense Cost $m $m % $m $m % $m $m % Deposits by banks 2 76,081 2,613 3.43 66,405 2,930 4.41 60,392 2,401 3.98 Customer accounts 3 1,487,032 33,289 2.24 1,385,840 40,173 2.90 1,334,803 34,162 2.56 Repurchase agreements – non-trading 1 188,748 13,629 7.22 187,337 15,617 8.34 146,605 10,858 7.41 Debt securities in issue – non-trading 198,317 10,847 5.47 196,440 12,806 6.52 184,867 11,223 6.07 Other interest-bearing liabilities 77,793 2,700 3.47 84,773 4,372 5.16 146,216 6,428 4.40 Total interest-bearing liabilities 2,027,971 63,078 3.11 1,920,795 75,898 3.95 1,872,883 65,072 3.47 1 The average balances for repurchase and reverse repurchase agreements include net amounts where the criteria for offsetting are met, resulting in a lower net balance reported for repurchase agreements and thus higher cost. 2 Including interest-bearing bank deposits only. 3 Including interest-bearing customer accounts only. Net interest income (‘NII’) for 2025 was $34.8bn , an increase of $2.1bn or 6% compared with 2024. The increase reflected the benefit of the reinvestment of our structural hedge at higher yields, deposit balance growth and higher NII in Markets Treasury. In addition, the increase included the non-recurrence of a $0.2bn loss in 2024 on the early redemption of legacy securities. This was partly offset by the adverse impact of $1.6bn from business disposals in Argentina and Canada, and margin compression on our deposits from lower interest rates. The growth in NII also reflected a benefit from lower funding costs associated with the trading book of $1.7bn. Excluding the unfavourable impact of foreign currency translation differences of $0.2bn, net interest income increased by $2.3bn or 7%. NII for 4Q25 was $9.2bn , up 5% compared with 3Q25, and up 12% compared with 4Q24. The increase in NII compared with 3Q25 was predominantly driven by the increase in short-term interest rates in Hong Kong and deposit balance growth. Net interest margin (‘NIM’) for 2025 of 1.59% was 3bps higher compared with 2024, reflecting the reinvestment of our structural hedge at higher yields and lower funding costs associated with the trading book The increase in NIM included the adverse impact of foreign currency translation differences. Excluding this, NIM increased by 6bps . 4Q25 NIM was 1.64% , up 7bps compared with 3Q25, and up 10bps compared with 4Q24. The increase against the previous quarter was primarily driven by higher short-term interest rates in Hong Kong. Interest income for 2025 of $97.9bn decreased by $10.8bn compared with 2024, primarily due to lower market interest rates. Interest income of $25bn in 4Q25 was $0.1bn higher compared with 3Q25, due to the increase of short-term interest rates in Hong Kong, partly offset by lower interest rates in currencies including pounds sterling and US dollar. Interest income in 4Q25 was down $1.5bn compared with 4Q24. The change in interest income in 2025 compared with 2024 included a favourable impact of foreign currency translation differences of $0.2bn . After excluding foreign currency translation differences, interest income decreased by $11.0bn . Interest expense for 2025 of $63.1bn decreased by $12.8bn compared with 2024, primarily due to lower market interest rates. The fall in interest expense included the adverse effects of foreign currency translation differences of $0.5bn . Excluding this, interest expense decreased by $13.3bn . Interest expense of $15.3bn in 4Q25 was $0.3bn lower than 3Q25, and $2.5bn lower compared with 4Q24. The decrease against the previous quarter was due lower market interest rates, particularly in US dollars and pounds sterling. HSBC Holdings plc Annual Report on Form 20-F 69 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Banking net interest income Year ended Quarter ended 31 Dec 2025 31 Dec 2024 31 Dec 2025 30 Sep 2025 31 Dec 2024 $m $m $m $m $m Net interest income 34,794 32,733 9,196 8,777 8,185 Banking book funding costs used to generate ‘net income from financial instruments held for trading or managed on a fair value basis’ 9,686 11,434 2,592 2,384 2,874 Third-party net interest income from insurance (396) (429) (66) (112) (109) Banking net interest income 44,084 43,738 11,722 11,049 10,950 Currency translation (188) (34) 136 Banking net interest income – on a constant currency basis 44,084 43,550 11,722 11,015 11,086 Banking net interest income – on a reported basis 44,084 43,738 11,722 11,049 10,950 –  of which: The Hongkong and Shanghai Banking Corporation Limited 21,676 21,691 5,710 5,351 5,464 HSBC UK Bank plc 11,523 10,368 3,046 2,969 2,663 HSBC Bank plc 5,257 4,630 1,477 1,351 1,182 Banking net interest income adjusts our NII, primarily for the impact of funding trading and fair value activities reported in interest expense. It represents the Group’s banking revenue that is directly impacted by changes in interest rates. It is defined as Group net interest income after deducting: – the internal cost to fund trading and fair value net assets for which associated revenue is reported in ‘Net income from financial instruments held for trading or managed on a fair value basis’, also referred to as ‘trading and fair value income’. These funding costs reflect proxy overnight or term interest rates as applied by internal funds transfer pricing; – the funding costs of foreign exchange swaps in Markets Treasury, where an offsetting income or loss is recorded in trading and fair value income. These instruments are used to manage foreign currency deployment and funding in our entities; and – third-party net interest income in our insurance business. In our segmental disclosures, the funding costs of trading and fair value net assets are predominantly recorded in CIB in ‘net income from financial instruments held for trading or managed on a fair value basis’. On consolidation, this funding is eliminated in Corporate Centre, resulting in an increase in the funding cost reported in NII with an equivalent offsetting increase in ‘net income from financial instruments held for trading or managed on a fair value basis’ in this segment. In the consolidated Group results, the cost to fund these trading and fair value net assets is reported in NII. Banking NII was $44.1bn in 2025, an increase of $0.3bn or 1% compared with 2024. The growth reflected the benefits of the reinvestment of our structural hedge at higher yields, deposit balance growth and higher NII in Markets Treasury. In addition, the increase included the non-recurrence of a loss of $0.2bn in 2024 on the early redemption of legacy securities. This was partly offset by the adverse impact of $1.6bn from the disposals of our business in Argentina and our banking business in Canada, and the impact of margin compression on our deposits from lower interest rates. Banking NII also deducts third-party NII related to our Insurance business, which was $0.4bn, broadly stable compared with 2024. The funding costs associated with generating trading and fair value income were $9.7bn , a decrease of $1.7bn compared with 2024, reflecting the reduction in interest rates that more than offset a rise in trading book balances. The internally allocated funding to generate trading and fair value income was approximately $225bn at 31 December 2025, a rise of approximately $25bn since 31 December 2024, and $11bn lower compared with 30 September 2025. This relates to trading, fair value and associated net asset balances predominantly in CIB. Net fee income of $13.3bn was $1.0bn or 8% higher than in 2024, and included an adverse impact of $0.3bn due to the disposal of our banking business in Canada and business in Argentina. On a constant currency basis, net fee income was $1.0bn higher. This primarily reflected increased broking fee income in our Hong Kong business and higher fee income from unit trusts and funds under management in IWPB, primarily in Hong Kong and mainland China. Net income from financial instruments held for trading or managed on a fair value basis of $19.7bn was $1.4bn lower compared with 2024. This primarily reflected a decrease in the trading book funding costs of $1.7bn associated with generating this income, due to lower interest rates which more than offset the impact of a rise in trading book balances, resulting in a corresponding increase in NII. Inclusive of the reduction in funding costs, net trading income in CIB was higher, notably as elevated market volatility and higher trading volumes benefited Global Foreign Exchange and Debt and Equity Markets. The reduction of trading income in Corporate Centre also included an adverse movement of $0.1bn in 2025 on American Depositary Receipts received as purchase consideration from the sale of our business in Argentina, which we disposed of in 2025. It also included the non- recurrence of favourable fair value movements of $0.3bn in 2024 on the foreign exchange hedging of the proceeds of the sale of our banking business in Canada until the completion of the sale. Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss of $11.2bn increased by $5.3bn compared with 2024 reflecting strong equity markets and the favourable impact of the downward movement in interest rates on our fixed income investments in our IWPB business in Hong Kong, partly offset by rising interest rates in mainland China . This favourable movement resulted in a corresponding movement in insurance finance expense, which has an offsetting impact for the related liabilities to policyholders. Insurance finance expense of $11.2bn was $5.2bn higher than in 2024, reflecting the impact of investment returns on underlying assets on the value of liabilities to policyholders, which moves inversely with ‘net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss’. Insurance service result of $1.8bn increased by $0.5bn compared with 2024, reflecting higher contractual service margin (‘CSM’) release as a result of strong new business growth, and favourable experience variances from positive investment management fee, maintenance expense and claims experience. Losses recognised on the sale of business operations fell by $1.7bn in 2025. In 2025, the net loss included a loss on the sale of our France life insurance business, including the recycling of related reserves, and a loss related to the sale of our UK life insurance entity. These were partly offset by gains on the disposals of our private banking business in Germany and our retail operations in Bahrain. In 2024, losses arose from the completion of the disposal of our business in Argentina, comprising the recycling of $5.2bn of foreign currency translation reserve losses and other reserves to the income statement and a $1.0bn loss on disposal. These were partly offset by a gain of $4.6bn in 2024 on the sale of our banking business in Canada, inclusive of recycling of foreign currency translation reserve and other reserve losses to the income statement. Other operating income/(expense) was $1.5bn lower than in 2024. The 2025 period included reserve recycling losses of $1.5bn following the completion of the sale of our French retained portfolio of home and certain other loans, and a dilution loss of $1.1bn on BoCom following the HSBC Holdings plc Annual Report on Form 20-F 70 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary completion of its capital issuance. This was partly offset by a lower loss on net monetary positions in hyperinflationary economies following the disposal of our business in Argentina. Change in expected credit losses and other credit impairment charges (‘ECL’) of $3.9bn was $0.4bn higher than in 2024, i ncluding charges in both periods related to the CRE sectors in Hong Kong and mainland China. In 2025, the charge in this sector in Hong Kong of $0.7bn (2024: $0.1bn) reflected higher allowances for new defaulted exposures, the impact of an over-supply of non-residential properties that has put continued downward pressure on rental and capital values, and updates to our models used for ECL calculations. The 2025 charge in the mainland China CRE sector was $0.2bn (2024: $0.4bn). Ñ For further details on the calculation of ECL, including the measurement uncertainties and significant judgements applied to such calculations, the impact of the economic scenarios and management judgemental adjustments, see pages 148 to 157 . Operating expenses Year ended 2025 2024 2023 $m $m $m Gross employee compensation and benefits 21,512 20,153 19,623 Capitalised wages and salaries (1,959) (1,688) (1,403) Property and equipment 5,066 4,786 4,285 Amortisation and impairment of intangibles 2,945 2,235 1,827 UK bank levy 290 249 339 Legal proceedings and regulatory matters 1,542 145 188 Other operating expenses 1 7,032 7,163 7,211 Reported operating expenses 36,428 33,043 32,070 Currency translation — 103 (379) Constant currency operating expenses 36,428 33,146 31,691 1 Other operating expenses includes professional fees, contractor costs, transaction taxes, marketing and travel. Staff numbers (full-time equivalents) 1 2025 2024 2023 Business segments Hong Kong 29,633 34,578 34,886 UK 29,922 30,783 30,638 Corporate and Institutional Banking 78,981 71,935 72,713 International Wealth and Premier Banking 69,854 73,668 82,287 Corporate Centre 330 340 337 At 31 Dec 208,720 211,304 220,861 –  of which (by country/territory): India 47,423 44,262 42,287 UK 32,294 33,970 34,125 Hong Kong 25,639 26,599 26,472 1 Represents the number of full-time equivalent staff (‘FTE’) with contracts of service with the Group who are being paid at the reporting date. Comprises FTE in front-line roles and those providing dedicated support services managed by the business segments (‘direct FTE’) (at 31 December 2025: Hong Kong: 20,290; UK: 20,969; CIB: 45,970; IWPB: 53,136) and an allocation of Corporate Centre FTE in proportion to business usage of shared support services and global infrastructure. During 2025, certain Operations FTE were transferred from Corporate Centre to the business segments for which they provide dedicated support services (if these FTE had been transferred at 31 December 2024, the direct FTE of the segments would have been as follows: Hong Kong: 20,471; UK: 20,794; CIB: 46,914; IWPB: 55,482). Reported operating expenses of $36.4bn were $3.4bn or 10% higher than in 2024. The increase primarily reflected notable items in 2025, including legal provisions of $1.4bn , restructuring and other related costs in 2025 of $1.0bn related to our organisational simplification, mainly severance costs, and $0.5bn related to strategic transactions. In addition, growth in reported operating expenses included higher planned spend and investment in technology, and the impacts of inflation. These increases were partly offset by reductions following the completion of business disposals in Canada and Argentina, and benefits delivered by our organisational simplification of $0.6bn. Target basis operating expenses were $33.5bn or 3% higher than in 2024 due to higher planned spend and investment in technology, higher performance-related pay and the impact of inflation. Ñ For a reconciliation of target basis operating expenses to reported operating expenses see page 109 . The number of employees expressed in full-time equivalent (‘FTE’) staff at 31 December 2025 was 208,720, a reduction of 2,584 compared with 31 December 2024. The number of contractors at 31 December 2025 was 3,974, a reduction of 252 from 31 December 2024. Share of profit in associates and joint ventures of $2.9bn was stable compared with 2024. Impairment of interest in associate of $1.0bn related to BoCom. Ñ For further details of our impairment review process, see Note 18 : Interests in associates and joint ventures on page 345 . Tax expense Tax expense in 2025 was a charge of $6.8bn , representing an effective tax rate of 22.7% (2024: 22.6% ). The effective tax rate for 2025 was increased by the non-deductible impairment and dilution loss in BoCom and legal provisions on which no tax benefit is recorded. Excluding these items, the effective rate for 2025 was 20.6% (2024: 21.5%, excluding the impact of the non-taxable gains and losses on the sale of our banking business in Canada and our business in Argentina). The decrease in the effective tax rate excluding these items was primarily the result of a reduction in the unfavourable impact of hyperinflation following the sale of our business in Argentina in 2024. Tax expense 2025 2024 $m $m Tax (charge)/credit Reported (6,776) (7,310) Currency translation — (39) Constant currency tax (charge)/credit (6,776) (7,349) Notable items 2025 2024 $m $m Tax Tax (charge)/credit on notable items 440 108 Return on average tangible equity In 2025, RoTE was 13.3 %, compared with 14.6 % in 2024. RoTE excluding notable items was 17.2 % in 2025, compared with 15.6 % in 2024. HSBC Holdings plc Annual Report on Form 20-F 71 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Income statement commentary: 2024 compared with 2023 The following commentary compares Group financial performance for the year ended 2024 with 2023. Net interest income (‘NII’) for 2024 was $32.7bn, a decrease of $3.1bn or 9% compared with 2023. The decrease included a $2.7bn reduction mainly due to the redeployment of our commercial surplus to net trading and fair value assets, for which the associated revenue is reported in ‘net income on financial instruments held for trading or managed on a fair value basis‘. The fall also reflected a $1.0bn loss due to the disposal of our business in Canada and a $0.2bn loss in 2024 related to the early redemption of legacy securities. NII in HSBC UK grew by $0.6bn, including the benefit of our structural hedge and balance sheet growth, partly offset by mortgage pricing pressures. There was also higher NII in Markets Treasury due to reinvestments in our portfolio at higher yields. Excluding the unfavourable impact of foreign currency translation differences, net interest income decreased by $1.4bn or 4%. NII for the fourth quarter of 2024 was $8.2bn, up 7% compared with the previous quarter, and down 1% compared with the fourth quarter of 2023. The increase compared with 3Q24 was predominantly driven by the non-recurrence of the adverse impact in 3Q24 from the early redemption of legacy securities. The decline in NII compared with 4Q23 was predominantly driven by the impact of lower AIEA. Net interest margin (‘NIM’) for 2024 of 1.56% was 10bps lower compared with 2023, reflecting redeployment of our commercial surplus to net trading and fair value assets, and higher interest expense due to higher market rates and an adverse impact of $0.2bn from the early redemption of legacy securities. The decrease in NIM in 2024 included the unfavourable impact of foreign currency translation differences. Excluding this, NIM decreased by 6bps. NIM for the fourth quarter of 2024 was 1.54%, up 8bps compared with the previous quarter, and up 2bps compared with the fourth quarter of 2023. The increase against the previous quarter was primarily due to the non- recurrence of the adverse impact from the early redemption of legacy securities. The year-on-year increase was predominantly driven by HSBC UK. Interest income for 2024 of $108.6bn increased by $7.8bn compared with 2023, primarily due to an increase in market interest rates. Interest income of $26bn in the fourth quarter of 2024 was down $1.3bn compared with the previous quarter, and down $0.7bn compared with the fourth quarter of 2023. Both the declines were primarily due to lower market interest rates. The change in interest income in 2024 compared with 2023 included an adverse impact of foreign currency translation differences of $2.7bn. After excluding foreign currency translation differences, interest income increased by $10.5bn. Interest expense for 2024 of $75.9bn increased by $10.8bn compared with 2023, primarily due to an increase in market interest rates, growth in customer accounts with higher proportion for term deposits and the impact of the early redemption of legacy securities. The rise in interest expense included the favourable effects of foreign currency translation differences of $1.1bn. Excluding this, interest expense increased by $11.9bn. Interest expense of $17.8bn in the fourth quarter of 2024 was $1.8bn and $0.6bn lower compared with the third quarter of 2024 and the fourth quarter of 2023 respectively. The decrease against the previous quarter was due to the non-recurrence of an adverse impact from the early redemption of legacy securities. The year-on-year decline was primarily due to lower market interest rates. Banking NII was $43.7bn in 2024. The funding costs associated with generating trading and fair value income were $11.4bn, an increase of $2.7bn compared with 2023, primarily reflecting redeployment of our commercial surplus to net trading and fair value assets. Banking NII also deducts third-party NII related to our insurance business, which was $0.4bn, stable compared with 2023. The movement in banking NII also included a reduction from the disposal of our business in Canada of $1.0bn, a $0.2bn loss in 2024 related to the early redemption of legacy securities and from higher interest expense on deposits in part due to balance growth. Banking NII in HSBC UK grew by $0.7bn, including the benefit of our structural hedge and balance sheet growth, partly offset by mortgage pricing pressures. There was higher NII in Markets Treasury due to reinvestments in our portfolio at higher yields. The internally allocated funding to generate trading and fair value income was approximately $200bn at 31 December 2024, a rise of approximately $37bn since 31 December 2023, although it decreased by approximately $9bn during 4Q24. This relates to trading, fair value and associated net asset balances predominantly in CIB. The increase reflected management decisions on the deployment of our commercial surplus. Net fee income of $12.3bn was $0.5bn or 4% higher than in 2023, and included an adverse impact from foreign currency translation differences of $0.2bn, as well as a reduction of $0.4bn due to the impact of the disposal of our banking business in Canada. The increase in net fee income was mainly in Wealth products in our Hong Kong business and in IWPB in Hong Kong, reflecting stronger equity markets and improved customer sentiment. It also included an increase in cards income, mainly in Mexico and Asia in IWPB, as customer spending increased, and in our Hong Kong business. In CIB, net fee income was down by $0.1 bn. This included lower fees from credit facilities, notably due to the disposal of our banking operations in Canada. In addition, there was higher fee expense relating to custody. This was partly offset by higher broking and underwriting income in our main entity in Europe, although the associated fee expense also increased. Net income from financial instruments held for trading or managed on a fair value basis of $21.1bn was $4.5bn higher compared with 2023. This included favourable fair value movements of $0.6bn on the foreign exchange hedging of the proceeds of the sale of our banking business in Canada until completion of the sale. The increase also reflected higher client activity and elevated volatility in Debt and Equity Markets in CIB. A component of funding costs incurred to generate this income are reported in NII, and these increased by $2.7bn, compared with 2023. In IWPB, income rose by $0.2bn due to a favourable movement related to derivatives in our insurance business and from higher customer trading activity in Wealth, including in our main legal entity in Asia. Net expense from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss of $5.9bn fell by $2.0bn compared with 2023. This decrease reflected adverse fair value movements on debt securities, due to movements in interest rates, including in our portfolios in Hong Kong and France, partly offset by improved equity returns. This unfavourable movement resulted in a corresponding movement in insurance finance expense, which has an offsetting impact for the related liabilities to policyholders. Insurance finance expense of $6.0bn was $1.8bn lower than in 2023, reflecting the impact of investment returns on underlying assets on the value of liabilities to policyholders, which moves inversely with ‘net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss’. Insurance service result of $1.3bn increased by $0.2bn compared with 2023, primarily due to an increase in the release of the contractual service margin (‘CSM’). Gain on acquisition fell by $1.6bn, reflecting the non-recurrence of a gain recognised in respect of the acquisition of SVB UK in 1Q23. Losses recognised on sale of business operations were $1.8bn in 2024. This compared with a gain of $61m in 2023. In 2024, there were losses from completion of the disposal of our business in Argentina, comprising the recycling of $5.2bn of foreign currency translation reserve losses and other reserves to the income statement and a $1.0bn loss on disposal. This was partly offset by a gain of $4.6bn on the sale of our banking business in Canada, inclusive of recycling of foreign currency translation reserve and other reserve losses to the income statement. HSBC Holdings plc Annual Report on Form 20-F 72 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Other operating income of $0.2bn was $1.3bn higher than in 2023. The increase primarily related to the non-recurrence of losses in 2023 of $1.0bn relating to Treasury repositioning and risk management. The increase also included the non-recurrence of a loss of $0.3bn in 2023 relating to corrections to historical valuation estimates in our life insurance business, and losses related to the disposal of our New Zealand retail mortgage loan portfolio and the merger of HSBC Bank Oman in 2023 with Sohar International. Changes in expected credit losses and other credit impairment charges (‘ECL’) were a charge of $3.4bn, stable compared with 2023. ECL in 2024 included charges of $0.4bn in respect of commercial real estate in mainland China and of $0.1bn in the Hong Kong real estate sector. This compared with charges of $1.0bn and $0.1bn respectively in these sectors in 2023. In addition, ECL in CIB in 2024 included a charge related to a single exposure in the UK, partly offset by a release of stage 3 allowances in HSBC Bank plc related to a single exposure. Charges in our UK business were $0.1bn lower compared with 2023. In WPB, ECL charges were $1.1bn. up $0.2bn compared with 2023. These primarily related to our legal entity in Mexico, reflecting growth in our unsecured lending portfolio and unemployment trends. Ñ For further details on the calculation of ECL, including the measurement uncertainties and significant judgements applied to such calculations, the impact of the economic scenarios and management judgemental adjustments, see pages 153 to 157 . Operating expenses of $33.0bn were $1.0bn or 3% higher than in 2023, including a favourable impact of $0.6bn from foreign currency translation differences. The increase reflected higher spend and investment in technology and inflationary impacts, while performance- related pay remained stable. Operating expenses were adversely impacted by the non-recurrence of a $0.2bn reversal of historical asset impairments in 2023. These increases were partly offset by the favourable impacts from the completion of business disposals in Canada and France, and a lower UK bank levy of $0.1bn, as 2023 included adjustments relating to prior years. Operating expenses in 2024 benefited from the non-recurrence of a $0.2bn charge in 2023 incurred in the US relating to the FDIC special assessment. Target basis operating expense growth was 5% compared with 2023, in line with our cost growth target. This primarily reflected higher investment spend, including in technology and from inflationary pressures, while our performance-related pay accrual was broadly in line with 2023. Our target basis operating expenses are measured on a constant currency basis, excluding notable items, the impact of retranslating the prior year results of hyperinflationary economies at constant currency, and the direct costs from the sales of our French retail banking operations and our banking business in Canada. The number of employees expressed in full-time equivalent staff (‘FTE’) at 31 December 2024 was 211,304, a decrease of 9,557 compared with 31 December 2023, primarily reflecting the completion of the sales of our banking business in Canada, our retail banking operations in France and our business in Argentina. The number of contractors at 31 December 2024 was 4,226, a decrease of 450. Share of profit in associates and joint ventures of $2.9bn was $3.1bn higher than in 2023, including an increase in the share of profit from SAB. Impairment of interest in associate In relation to our investment in BoCom, at 31 December 2024 we concluded that there was no indication of further significant impairment (or indication that an impairment may no longer exist or may have decreased significantly) since 31 December 2023. At 31 December 2023, the Group performed an impairment test on the carrying value of our investment in BoCom which resulted in an impairment of $3.0bn. Ñ For further details, see Note 18 : Interests in associates and joint ventures on page 345 . Tax expense The effective tax rate for 2024 of 22.6% was higher than the 19.1% in 2023. The effective tax rate for 2024 was increased by 4.8 percentage points by the non-deductible loss on disposal of our business in Argentina and by 0.7 percentage points by the tax charge arising under the Global Minimum Tax rules, and reduced by 3.6 percentage points by the non-taxable gain on disposal of our banking business in Canada. The effective tax rate for 2023 was increased by 2.3 percentage points by the non-deductible impairment of investments in associates, and reduced by 1.6 percentage points by the release of provisions for uncertain tax positions and by 1.5 percentage points by the non-taxable accounting gain arising on the acquisition of SVB UK. Ñ Further details are provided in Note 7 on the financial statements of the HSBC Holdings plc Form 20-F for the year ended 31 December 2024. HSBC Holdings plc Annual Report on Form 20-F 73 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Consolidated balance sheet Five-year summary consolidated balance sheet 2025 2024 2023 2022 1 2021 $m $m $m $m $m Assets Cash and balances at central banks 242,859 267,674 285,868 327,002 403,018 Trading assets 366,153 314,842 289,159 218,093 248,842 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 133,063 115,769 110,643 100,101 49,804 Derivatives 237,740 268,637 229,714 284,159 196,882 Loans and advances to banks 108,462 102,039 112,902 104,475 83,136 Loans and advances to customers 988,399 930,658 938,535 923,561 1,045,814 Reverse repurchase agreements – non-trading 298,392 252,549 252,217 253,754 241,648 Financial investments 567,211 493,166 442,763 364,726 446,274 Assets held for sale 11,115 27,234 114,134 115,919 3,411 Other assets 279,640 244,480 262,742 257,496 239,110 Total assets at 31 Dec 3,233,034 3,017,048 3,038,677 2,949,286 2,957,939 Liabilities Deposits by banks 97,952 73,997 73,163 66,722 101,152 Customer accounts 1,786,828 1,654,955 1,611,647 1,570,303 1,710,574 Repurchase agreements – non-trading 204,974 180,880 172,100 127,747 126,670 Trading liabilities 72,122 65,982 73,150 72,353 84,904 Financial liabilities designated at fair value 158,456 138,727 141,426 127,321 145,502 Derivatives 237,854 264,448 234,772 285,762 191,064 Debt securities in issue 99,675 105,785 93,917 78,149 78,557 Insurance contract liabilities 122,955 107,629 120,851 108,816 112,745 Liabilities of disposal groups held for sale 23,382 29,011 108,406 114,597 9,005 Other liabilities 223,170 203,361 216,635 212,319 190,989 Total liabilities at 31 Dec 3,027,368 2,824,775 2,846,067 2,764,089 2,751,162 Equity Total shareholders’ equity 198,225 184,973 185,329 177,833 198,250 Non-controlling interests 7,441 7,300 7,281 7,364 8,527 Total equity at 31 Dec 205,666 192,273 192,610 185,197 206,777 Total liabilities and equity at 31 Dec 3,233,034 3,017,048 3,038,677 2,949,286 2,957,939 1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data for the financial year ended 31 December 2022 have been restated accordingly. Comparative data for the years ended 31 December 2021 has been prepared on an IFRS 4 basis. Ñ A more detailed consolidated balance sheet is contained in the financial statements on page 290 . Five-year selected financial information 2025 2024 2023 2022 1 2021 $m $m $m $m $m Called up share capital 8,588 8,973 9,631 10,147 10,316 Capital resources 2 182,371 172,386 171,204 162,423 177,786 Undated subordinated loan capital — 17 18 1,967 1,968 Preferred securities and dated subordinated loan capital 3 37,581 35,258 36,413 29,921 28,568 Risk-weighted assets 888,647 838,254 854,114 839,720 838,263 Total shareholders’ equity 198,225 184,973 185,329 177,833 198,250 Less: preference shares and other equity instruments (20,716) (19,070) (17,719) (19,746) (22,414) Total ordinary shareholders’ equity 177,509 165,903 167,610 158,087 175,836 Less: goodwill and intangible assets (net of deferred tax) (12,356) (11,608) (11,900) (11,160) (17,643) Tangible ordinary shareholders’ equity 165,153 154,295 155,710 146,927 158,193 Financial statistics Loans and advances to customers as a percentage of customer accounts (%) 55.3 56.2 58.2 58.8 61.1 Average total shareholders’ equity to average total assets (%) 5.99 6.12 6.01 5.97 6.62 Net asset value per ordinary share at year-end ($) 4 10.36 9.26 8.82 8.01 8.76 Tangible net asset value per ordinary share at year-end ($) 4 9.64 8.61 8.19 7.44 7.88 Tangible net asset value per fully diluted share at year-end ($) 9.56 8.54 8.14 7.39 7.84 Number of $0.50 ordinary shares in issue (millions) 17,175 17,947 19,263 20,294 20,632 Basic number of $0.50 ordinary shares outstanding, after deducting own shares held (millions) 17,140 17,918 19,006 19,739 20,073 Basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares, after deducting own shares held (millions) 17,276 18,062 19,135 19,876 20,189 Closing foreign exchange translation rates to $: $1: £ 0.746 0.797 0.784 0.830 0.739 $1: € 0.853 0.964 0.903 0.937 0.880 1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data for the financial year ended 31 December 2022 have been restated accordingly. Comparative data for the years ended 31 December 2021 has been prepared on an IFRS 4 basis. 2 Capital resources are regulatory total capital, the calculation of which is set out on page 192 . 3 Including perpetual preferred securities, details of which can be found in Note 29: Subordinated liabilities on page 359 . 4 For the definition, see page 106 . HSBC Holdings plc Annual Report on Form 20-F 74 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Combined view of customer lending and customer deposits 1 2025 2024 $m $m Loans and advances to customers 988,399 930,658 Loans and advances to customers of disposal groups reported in ‘Assets held for sale’ 2,190 965 –  private banking business in Germany — 309 –  Germany custody business 323 — –  business in South Africa 431 656 –  retail banking business in Sri Lanka 101 — –  business in Uruguay 1,314 — –  other 21 — Non-current assets held for sale 1,303 12 Combined customer lending 991,892 931,635 Currency translation — 40,108 Combined customer lending at constant currency 991,892 971,743 Customer accounts 1,786,828 1,654,955 Customer accounts reported in ‘Liabilities of disposal groups held for sale’ 16,173 5,399 –  private banking business in Germany — 2,085 –  Germany custody business 12,316 — –  business in South Africa 2,056 3,294 –  retail banking business in Sri Lanka 430 — –  business in Uruguay 1,369 — –  other 2 20 Combined customer deposits 1,803,001 1,660,354 Currency translation — 64,285 Combined customer deposits at constant currency 1,803,001 1,724,639 1 On 9 April 2024, HSBC Latin America B.V. entered into a binding agreement to sell its business in Argentina to Galicia. The sale was completed on 6 December 2024, so is not included in the table above. Balance sheet commentary compared with 31 December 2024 At 31 December 2025, total assets of $3.2tn were $216bn or 7% higher on a reported basis and increased by $93bn or 3% on a constant currency basis. Reported loans and advances to customers as a percentage of customer accounts was 55.3% compared with 56.2% at 31 December 2024 (excluding balances classified as held for sale). The movement in this ratio reflected a higher growth in customer accounts than in lending. Assets Cash and balances at central banks decreased by $25bn or 9% , which included a $22bn favourable impact of foreign currency translation differences. The reduction was primarily due to lower allocated balances from Markets Treasury within HSBC Bank plc, leading to decreases across CIB and IWPB. Cash also declined in our UK business, driven by increased customer lending and redeployment into other asset classes. Trading assets rose by $51bn or 16% , which included a favourable impact of foreign currency translation differences of $13bn . The growth was mainly in our CIB business reflecting increased client demand and an increase in valuations. Derivative assets decreased by $31bn or 12% , which included a favourable impact of foreign currency translation differences of $17bn . The reduction was primarily in our CIB business and reflected fair value movements on foreign exchange contracts, driven by foreign exchange rate volatility, and reductions in the fair value of interest rate contracts resulting from curve movements. The decrease in derivative assets was consistent with the decrease in derivative liabilities, as the underlying risk is broadly matched. Loans and advances to customers of $988bn were $58bn or 6% higher on a reported basis. This included a favourable impact of foreign currency translation differences of $40bn . On a constant currency basis, loans and advances to customers increased by $18bn , reflecting the following movements: – In our UK business, customer lending rose by $18bn , primarily driven by continued growth in mortgage balances as well as increased commercial lending . – In CIB, customer lending increased by $7bn . This was driven by term lending growth in our main legal entities in Asia, including, Australia, India and Hong Kong, and from an increase in the Middle East, partly offset by the reclassification of our business in Uruguay to held for sale. – In IWPB, customer lending increased by $6bn , primarily driven by wealth lending growth in the Private Bank, notably in our main legal entity in Hong Kong. – In our Hong Kong business, customer lending decreased by $6bn , primarily in wholesale lending, reflecting low demand driven by macroeconomic conditions. – In Corporate Centre, customer lending decreased by $8bn following the reclassification and subsequent sale of a portfolio of home and certain other loans retained in France following the disposal of our French retail operations. Reverse repurchase agreements – non-trading rose by $46bn or 18% , primarily reflecting client demand. Financial investments increased by $74bn or 15% The increase was across both debt instruments held at fair value through other comprehensive income and instruments held at amortised cost, as we redeployed our commercial surplus to benefit from higher yield curves and enhanced our structural hedge. Assets held for sale decreased by $16bn or 59% , primarily due to the reductions in IWPB following the completion of the sales of our French life insurance business and our German private banking business, partly offset by reclassification of assets from our UK life insurance business. There were also increases in CIB and IWPB following the announcement of the planned sale of our Uruguay business. Other assets grew by $35bn or 14% reflecting higher settlement accounts balances, notably in CIB, from higher client-driven trading activity with a corresponding increase in settlement liabilities. In addition, the growth reflected higher valuations on bullion. HSBC Holdings plc Annual Report on Form 20-F 75 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Liabilities Deposits by banks increased by $24bn or 32% , reflecting an increase in client inflows, notably in our CIB business. Customer accounts of $1.8tn increased by $132bn or 8% on a reported basis. This included a favourable impact of foreign currency translation differences of $64bn , mainly in our UK entities. On a constant currency basis, customer accounts increased by $68bn , reflecting the following movements: – In our Hong Kong business, customer accounts increased by $37bn , primarily in retail deposits, reflecting broader market growth. – In our UK business, customer accounts increased by $11bn primarily due to market growth in retail and corporate savings. – In CIB, customer accounts increased by $10bn mainly driven by strong deposit momentum in Asia, including in mainland China and India, partly offset by the reclassification of our Germany custody business to held for sale. – In IWPB, customer accounts rose by $9bn , notably in the Private Bank in Hong Kong, Singapore and the UK, reflecting strong wealth deposit inflows amidst market volatility. Repurchase agreements – non-trading increased by $24bn or 13% , with increases in our CIB and UK businesses. Financial liabilities designated at fair value increased by $20bn or 14% , notably in Corporate Centre, reflecting an increase in debt securities in issue of $10bn in 2025, and in our CIB business from increased medium-term note issuances by our Debt and Equity Markets business. Liabilities of disposal groups held for sale decreased by $6bn or 19% , primarily due to reductions in IWPB following the completion of the sales of our French life insurance business and our German private banking business, partly offset by reclassification of liabilities from our UK life insurance business. There were also additions in CIB and IWPB following the announcement of the planned sale of our Uruguay business. Other liabilities increased by $20bn or 10% . This included a rise of $7bn in settlement accounts in our main legal entity in the US from an increase in trading activity. Equity Total shareholders’ equity, including non-controlling interests, of $206bn increased by $13bn or 7% compared with 31 December 2024. Profits generated of $22bn and net gains through other comprehensive income (‘OCI’) of $10bn were partly offset by the impact of dividends paid of $13bn , and the impact of our $8bn share buy-back activities in 2025, which included the $2bn buy-back announced with our 2024 annual results in February 2025. The net gains through OCI of $10bn included $7bn of exchange differences and a $2bn increase in the cash flow hedging reserve. Financial investments As part of our interest rate hedging strategy, we hold a portfolio of debt instruments, reported within financial investments, which are classified as hold-to-collect-and-sell. As a result, the change in value of these instruments is recognised through ‘debt instruments at fair value through other comprehensive income’ in equity. At 31 December 2025, we had recognised a pre-tax cumulative unrealised loss reserve through other comprehensive income of $1.1bn related to these hold- to-collect-and-sell positions, excluding investments held in our insurance business. This compared with an unrealised loss of $3.8bn at 31 December 2024, and reflected a $2.7bn pre-tax gain in 2025, inclusive of movements on related fair value hedges. We also hold a portfolio of financial investments measured at amortised cost, which are classified as hold-to-collect and are primarily held to manage our interest rate exposure. At 31 December 2025, the debt instruments within this portfolio had a cumulative unrecognised loss of $0.4 bn, representing a $2.5bn improvement during 2025. Customer accounts by country/territory 2025 2024 $m $m Hong Kong 619,029 575,141 UK 568,712 524,251 US 99,458 99,278 Singapore 81,740 76,737 Mainland China 69,473 63,169 France 50,880 40,384 Australia 34,171 31,951 Germany 1 15,588 23,564 Mexico 29,493 27,525 UAE 30,861 28,008 India 28,725 27,199 Taiwan 18,771 17,067 Malaysia 20,252 17,038 Egypt 5,610 4,137 Indonesia 5,777 5,558 Türkiye 3,624 3,489 Other 1 104,664 90,459 At 31 Dec 1,786,828 1,654,955 1 At 31 December 2025, customer accounts of $ 16.2 bn met the criteria to be classified as held for sale and are reported within ‘Liabilities of disposal groups held for sale’ on the balance sheet, of which $ 12.3 bn, $ 2.1 bn, $ 1.4 bn and $ 0.4 bn belongs to the planned sale of our German custody business, South Africa business, HSBC Bank (Uruguay) S.A., and Sri Lanka retail banking business, respectively. Refer to Note 23 on page 355 for further details. HSBC Holdings plc Annual Report on Form 20-F 76 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Loans and advances, deposits by currency At 31 Dec 2025 $m USD GBP HKD EUR CNY Others 1 Total Loans and advances to banks 38,546 17,085 3,716 4,810 9,146 35,159 108,462 Loans and advances to customers 171,177 323,026 201,691 71,148 54,015 167,342 988,399 Total loans and advances 209,723 340,111 205,407 75,958 63,161 202,501 1,096,861 Deposits by banks 43,915 14,910 4,427 11,995 5,308 17,397 97,952 Customer accounts 529,437 465,673 320,778 134,689 72,626 263,625 1,786,828 Total deposits 573,352 480,583 325,205 146,684 77,934 281,022 1,884,780 At 31 Dec 2024 Loans and advances to banks 33,727 15,267 5,340 4,137 8,129 35,439 102,039 Loans and advances to customers 171,530 286,797 203,586 68,437 51,966 148,342 930,658 Total loans and advances 205,257 302,064 208,926 72,574 60,095 183,781 1,032,697 Deposits by banks 31,415 18,771 3,973 8,788 4,114 6,936 73,997 Customer accounts 476,210 426,747 316,997 124,452 67,405 243,144 1,654,955 Total deposits 507,625 445,518 320,970 133,240 71,519 250,080 1,728,952 1 ‘Others’ includes items with no currency information available of $ 0.5 bn for loans and advances to banks (2024: $ 0.9 bn), and $ 1.3 bn for loans and advances to customers (2024: $ 0.9 bn), Nil for deposits by banks (2024: Nil) and $ 0.2 bn for customer accounts (2024: $ 6 m). Risk-weighted assets Risk-weighted assets (‘RWAs‘) increased by $ 50.3 bn during the year, including an increase of $ 27.4 bn from foreign currency translation differences. The remaining increase was largely driven by $ 39.9 bn of asset size movements; which included an $11.6bn ris e in operational risk, driven by higher average income. Further increases were due to corporate lending growth, largely in our UK and CIB business segments and in SAB within Corporate Centre. These increases were partly offset by an $ 11.6 bn decrease in RWAs due to credit risk parameter refinements, including methodology changes to our undrawn exposures within our UK and CIB businesses; and a UK transaction where some credit risk was transferred to a third party, and a $ 4.5 bn decrease from strategic disposals. RWAs by currency At 31 Dec 2025 $m USD GBP HKD EUR CNY Others Total RWAs 1 210,900 189,045 133,894 75,334 55,811 223,663 888,647 At 31 Dec 2024 RWAs 1 205,645 165,684 136,001 67,440 56,561 206,923 838,254 1 RWAs include credit risk, counterparty credit risk, market risk and operational risk RWAs. HSBC Holdings plc Annual Report on Form 20-F 77 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Average balance sheet Average balance sheet and net interest income Average balances and related interest are shown for the domestic operations of our principal commercial banks by legal entity. ‘Other trading entities’ comprise the operations of our principal commercial banking and consumer finance entities outside their domestic markets and all other banking operations, including investment banking balances and transactions. Average balances are based on daily averages for the principal areas of our banking activities with monthly or less frequent averages used elsewhere. Balances and transactions with fellow subsidiaries are reported gross in the principal commercial banking and consumer finance entities, and the elimination entries are included within ‘Holding companies, shared service centres and intra-group eliminations’. Net interest margin numbers are calculated by dividing net interest income as reported in the income statement by the average interest- earning assets from which interest income is reported within the ‘Net interest income’ line of the income statement. Total interest-earning assets include credit-impaired loans where the carrying amount has been adjusted as a result of impairment allowances. In accordance with IFRSs, we recognise interest income on credit-impaired assets after the carrying amount has been adjusted as a result of impairment. Fee income that forms an integral part of the effective interest rate of a financial instrument is recognised as an adjustment to the effective interest rate and recorded in ‘Interest income’. Assets 2025 2024 Average balance Interest income Yield Average balance Interest income Yield $m $m % $m $m % Summary Interest-earning assets measured at amortised cost (itemised below) 2,190,078 97,872 4.47 2,099,285 108,631 5.17 Trading assets and financial assets designated and otherwise mandatorily measured at fair value through profit or loss 262,719 8,169 3.11 244,686 7,943 3.25 Expected credit losses provision (10,151) N/A N/A (10,633) N/A N/A Non-interest-earning assets 755,734 N/A N/A 729,136 N/A N/A Total assets and interest income 3,198,380 106,041 3.32 3,062,474 116,574 3.81 Average yield on all interest-earning assets 4.32 4.97 Short-term funds and loans and advances to banks HSBC Bank plc 146,469 4,321 2.95 151,675 5,993 3.95 HSBC UK Bank plc 65,457 2,493 3.81 76,705 3,255 4.24 The Hongkong and Shanghai Banking Corporation Limited 82,451 2,561 3.11 86,976 3,250 3.74 HSBC Bank Middle East Limited 7,398 464 6.27 6,960 418 6.01 HSBC North America Holdings Inc. 28,832 1,136 3.94 29,434 1,275 4.33 HSBC Bank Canada — — — 13 — — Grupo Financiero HSBC, S.A. de C.V. 2,759 208 7.54 3,037 298 9.81 Other trading entities 5,761 957 16.61 5,992 812 13.55 Holding companies, shared service centres and intra-group eliminations (13,337) (680) 5.10 (11,275) (574) 5.09 At 31 Dec 325,790 11,460 3.52 349,517 14,727 4.21 Loans and advances to customers HSBC Bank plc 107,315 4,850 4.52 110,123 5,740 5.21 HSBC UK Bank plc 295,491 14,060 4.76 275,614 13,176 4.78 The Hongkong and Shanghai Banking Corporation Limited 459,820 18,940 4.12 455,258 21,804 4.79 HSBC Bank Middle East Limited 21,910 1,220 5.57 20,558 1,313 6.39 HSBC North America Holdings Inc. 56,893 3,136 5.51 56,149 3,403 6.06 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 25,872 3,299 12.75 26,704 3,631 13.60 Other trading entities 4,901 662 13.51 5,642 918 16.27 Holding companies, shared service centres and intra-group eliminations (398) (131) 32.91 (223) (106) 47.53 At 31 Dec 971,804 46,036 4.74 949,825 49,879 5.25 Reverse repurchase agreements – banks 1 HSBC Bank plc 41,903 2,695 6.43 38,819 3,293 8.48 HSBC UK Bank plc 5,424 220 4.06 2,401 109 4.54 The Hongkong and Shanghai Banking Corporation Limited 56,488 2,058 3.64 57,293 2,384 4.16 HSBC Bank Middle East Limited 5,723 267 4.67 4,195 243 5.79 HSBC North America Holdings Inc. 13,708 745 5.43 12,262 840 6.85 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 2,217 188 8.48 2,599 281 10.81 Other trading entities 1,641 155 9.45 2,182 363 16.64 Holding companies, shared service centres and intra-group eliminations (8,702) (576) 6.62 (15,962) (833) 5.22 At 31 Dec 118,402 5,752 4.86 103,789 6,680 6.44 HSBC Holdings plc Annual Report on Form 20-F 78 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Assets (continued) 2025 2024 Average balance Interest income Yield Average balance Interest income Yield $m $m % $m $m % Reverse repurchase agreements – customers 1 HSBC Bank plc 53,110 4,083 7.69 46,092 4,178 9.06 HSBC UK Bank plc 12,062 629 5.21 7,832 478 6.10 The Hongkong and Shanghai Banking Corporation Limited 51,842 1,491 2.88 41,295 1,368 3.31 HSBC Bank Middle East Limited 3,155 146 4.63 2,644 135 5.11 HSBC North America Holdings Inc. 44,485 4,495 10.10 42,410 4,851 11.44 HSBC Bank Canada — — — 2 — — Grupo Financiero HSBC, S.A. de C.V. 274 21 7.66 280 32 11.43 Other trading entities — — — — — — Holding companies, shared service centres and intra-group eliminations (9,389) (1) 0.01 (5,650) (1) 0.02 At 31 Dec 155,539 10,864 6.98 134,905 11,041 8.18 Financial investments HSBC Bank plc 79,377 3,025 3.81 70,702 3,013 4.26 HSBC UK Bank plc 54,417 2,157 3.96 41,036 1,845 4.50 The Hongkong and Shanghai Banking Corporation Limited 313,880 10,934 3.48 274,924 11,023 4.01 HSBC Bank Middle East Limited 13,379 591 4.42 11,690 565 4.83 HSBC North America Holdings Inc. 48,984 2,085 4.26 44,044 1,945 4.42 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 6,839 577 8.44 5,150 481 9.34 Other trading entities 4,226 759 17.96 3,375 802 23.76 Holding companies, shared service centres and intra-group eliminations 18,005 702 3.90 19,261 913 4.74 At 31 Dec 539,107 20,830 3.86 470,182 20,587 4.38 Other interest-earning assets HSBC Bank plc 66,389 2,206 3.32 59,244 2,587 4.37 HSBC UK Bank plc 336 30 8.93 252 35 13.89 The Hongkong and Shanghai Banking Corporation Limited 14,897 599 4.02 10,747 653 6.08 HSBC Bank Middle East Limited 289 13 4.50 (178) 1 (0.56) HSBC North America Holdings Inc. 5,710 229 4.01 3,726 195 5.23 HSBC Bank Canada — — — 19,475 984 5.05 Grupo Financiero HSBC, S.A. de C.V. 279 9 3.23 315 15 4.76 Other trading entities 749 171 22.83 3,551 1,922 54.13 Holding companies, shared service centres and intra-group eliminations (9,213) (327) 3.55 (6,065) (675) 11.13 At 31 Dec 79,436 2,930 3.69 91,067 5,717 6.28 Total interest-earning assets HSBC Bank plc 494,563 21,180 4.28 476,655 24,804 5.20 HSBC UK Bank plc 433,187 19,589 4.52 403,840 18,898 4.68 The Hongkong and Shanghai Banking Corporation Limited 979,378 36,583 3.74 926,493 40,482 4.37 HSBC Bank Middle East Limited 51,854 2,701 5.21 45,869 2,675 5.83 HSBC North America Holdings Inc. 198,612 11,826 5.95 188,025 12,509 6.65 HSBC Bank Canada — — — 19,490 984 5.05 Grupo Financiero HSBC, S.A. de C.V. 38,240 4,302 11.25 38,085 4,738 12.44 Other trading entities 17,278 2,704 15.65 20,742 4,817 23.22 Holding companies, shared service centres and intra-group eliminations (23,034) (1,013) 4.40 (19,914) (1,276) 6.41 At 31 Dec 2,190,078 97,872 4.47 2,099,285 108,631 5.17 1 The average balances for repurchase and reverse repurchase agreements include net amounts where the criteria for offsetting are met, resulting in a lower net balance reported for repurchase agreements and thus higher cost. HSBC Holdings plc Annual Report on Form 20-F 79 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Equity and liabilities 2025 2024 Average balance Interest expense Cost Average balance Interest expense Cost $m $m % $m $m % Summary Interest-bearing liabilities measured at amortised cost (itemised below) 2,027,971 63,078 3.11 1,920,795 75,898 3.95 Trading liabilities and financial liabilities designated at fair value (excluding own debt issued) 153,896 5,114 3.32 143,636 5,271 3.67 Non-interest bearing current accounts 214,507 N/A N/A 220,291 N/A N/A Total equity and other non-interest bearing liabilities 802,006 N/A N/A 777,753 N/A N/A Total equity and liabilities 3,198,380 68,192 2.13 3,062,475 81,169 2.65 Average cost on all interest-bearing liabilities 3.13 3.93 Deposits by banks 1 HSBC Bank plc 39,910 1,236 3.10 33,041 1,376 4.16 HSBC UK Bank plc 12,550 602 4.80 13,265 743 5.60 The Hongkong and Shanghai Banking Corporation Limited 25,823 532 2.06 24,561 611 2.49 HSBC Bank Middle East Limited 7,693 355 4.61 5,870 303 5.16 HSBC North America Holdings Inc. 12,509 345 2.76 9,012 329 3.65 HSBC Bank Canada — — — 27 — — Grupo Financiero HSBC, S.A. de C.V. 563 53 9.41 648 74 11.42 Other trading entities 1,468 161 10.97 890 46 5.17 Holding companies, shared service centres and intra-group eliminations (24,435) (671) 2.75 (20,909) (552) 2.64 At 31 Dec 76,081 2,613 3.43 66,405 2,930 4.41 Debt Securities in issue – non trading HSBC Bank plc 47,563 1,909 4.01 47,684 2,536 5.32 HSBC UK Bank plc 24,781 1,334 5.38 22,042 1,357 6.16 The Hongkong and Shanghai Banking Corporation Limited 42,396 2,305 5.44 45,303 2,772 6.12 HSBC Bank Middle East Limited 2,132 89 4.17 1,668 67 4.02 HSBC North America Holdings Inc. 25,048 1,408 5.62 26,551 1,694 6.38 HSBC Bank Canada — — — 181 12 6.63 Grupo Financiero HSBC, S.A. de C.V. 3,712 334 9.00 3,429 353 10.29 Other trading entities 1,386 150 10.82 1,608 142 8.83 Holding companies, shared service centres and intra-group eliminations 51,299 3,318 6.47 47,974 3,873 8.07 At 31 Dec 198,317 10,847 5.47 196,440 12,806 6.52 Customer accounts 2 HSBC Bank plc 275,748 8,778 3.18 258,026 10,753 4.17 HSBC UK Bank plc 304,835 5,863 1.92 279,227 6,156 2.20 The Hongkong and Shanghai Banking Corporation Limited 793,610 14,024 1.77 738,028 17,654 2.39 HSBC Bank Middle East Limited 18,669 520 2.78 14,725 520 3.53 HSBC North America Holdings Inc. 80,866 2,627 3.25 78,919 3,030 3.84 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 21,679 1,135 5.24 22,573 1,555 6.89 Other trading entities 5,805 828 14.26 7,123 1,012 14.21 Holding companies, shared service centres and intra-group eliminations (14,180) (486) 3.43 (12,781) (507) 3.97 At 31 Dec 1,487,032 33,289 2.24 1,385,840 40,173 2.90 Repurchase agreements – with banks 3 HSBC Bank plc 15,015 1,615 10.76 17,981 2,212 12.30 HSBC UK Bank plc 1,856 123 6.63 317 23 7.26 The Hongkong and Shanghai Banking Corporation Limited 66,984 2,293 3.42 60,491 2,640 4.36 HSBC Bank Middle East Limited 4,516 198 4.38 3,276 178 5.43 HSBC North America Holdings Inc. 11,369 604 5.31 10,110 655 6.48 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 1,684 156 9.26 181 25 13.81 Other trading entities 363 7 1.93 304 43 14.14 Holding companies, shared service centres and intra-group eliminations (15,877) (614) 3.87 (18,373) (881) 4.80 At 31 Dec 85,910 4,382 5.10 74,287 4,895 6.59 Repurchase agreements – with customers 3 HSBC Bank plc 40,513 3,721 9.18 44,267 4,090 9.24 HSBC UK Bank plc 2,597 251 9.66 3,147 273 8.67 The Hongkong and Shanghai Banking Corporation Limited 14,778 549 3.71 22,262 1,108 4.98 HSBC Bank Middle East Limited 11 0.4 3.64 19 1 5.26 HSBC North America Holdings Inc. 42,483 4,360 10.26 42,071 4,821 11.46 HSBC Bank Canada — — — 230 13 5.65 Grupo Financiero HSBC, S.A. de C.V. 4,521 365 8.07 3,850 415 10.78 Other trading entities — — — 10 1 10.00 Holding companies, shared service centres and intra-group eliminations (2,065) 0.6 (0.03) (2,806) — — At 31 Dec 102,838 9,247 8.99 113,050 10,722 9.48 HSBC Holdings plc Annual Report on Form 20-F 80 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Equity and liabilities (continued) 2025 2024 Average balance Interest expense Cost Average balance Interest expense Cost $m $m % $m $m % Other interest-bearing liabilities HSBC Bank plc 66,070 2,236 3.38 54,689 2,582 4.72 HSBC UK Bank plc 309 11 3.56 426 16 3.76 The Hongkong and Shanghai Banking Corporation Limited 12,607 410 3.25 14,052 619 4.41 HSBC Bank Middle East Limited 823 18 2.19 274 14 5.11 HSBC North America Holdings Inc. 9,180 350 3.81 7,582 367 4.84 HSBC Bank Canada — — — 16,483 659 4.00 Grupo Financiero HSBC, S.A. de C.V. 157 31 19.75 183 24 13.11 Other trading entities 757 138 18.23 2,882 798 27.69 Holding companies, shared service centres and intra-group eliminations (12,110) (494) 4.08 (11,798) (707) 5.99 At 31 Dec 77,793 2,700 3.47 84,773 4,372 5.16 Total interest-bearing liabilities HSBC Bank plc 484,819 19,495 4.02 455,688 23,549 5.17 HSBC UK Bank plc 346,928 8,184 2.36 318,424 8,568 2.69 The Hongkong and Shanghai Banking Corporation Limited 956,198 20,113 2.10 904,697 25,404 2.81 HSBC Bank Middle East Limited 33,844 1,179 3.48 25,832 1,083 4.19 HSBC North America Holdings Inc. 181,455 9,694 5.34 174,245 10,896 6.25 HSBC Bank Canada — — — 16,921 684 4.04 Grupo Financiero HSBC, S.A. de C.V. 32,316 2,074 6.42 30,864 2,446 7.93 Other trading entities 9,779 1,284 13.13 12,817 2,042 15.93 Holding companies, shared service centres and intra-group eliminations (17,368) 1,055 (6.07) (18,693) 1,226 (6.56) At 31 Dec 2,027,971 63,078 3.11 1,920,795 75,898 3.95 1 This includes interest-bearing bank deposits only. See page 12 for an analysis of all bank deposits. 2 This includes interest-bearing customer accounts only. See page 13 for an analysis of all customer accounts. 3 The average balances for repurchase and reverse repurchase agreements include net amounts where the criteria for offsetting are met, resulting in a lower net balance reported for repurchase agreements and thus higher cost. Net interest margin 1 2025 2024 2023 % % % HSBC Bank plc 0.34 0.26 0.55 HSBC UK Bank plc 2.63 2.56 2.43 The Hongkong and Shanghai Banking Corporation Limited 1.68 1.63 1.81 HSBC Bank Middle East Limited 2.94 3.47 3.62 HSBC North America Holdings Inc. 1.07 0.86 0.98 HSBC Bank Canada — 1.54 1.54 Grupo Financiero HSBC, S.A. de C.V. 5.83 6.02 6.17 Other trading entities 8.23 13.37 7.71 At 31 Dec 1.59 1.56 1.66 1 Net interest margin is calculated as net interest income divided by average interest-earning assets. Distribution of average total assets 2025 2024 2023 % % % HSBC Bank plc 30.5 30.6 30.0 HSBC UK Bank plc 14.1 13.7 14.0 The Hongkong and Shanghai Banking Corporation Limited 45.9 45.4 44.0 HSBC Bank Middle East Limited 2.0 1.9 2.0 HSBC North America Holdings Inc. 8.4 8.4 8.0 HSBC Bank Canada — 0.7 3.0 Grupo Financiero HSBC, S.A. de C.V. 1.5 1.6 2.0 Other trading entities 1.0 1.1 2.0 Holding companies, shared service centres and intra-group eliminations (3.4) (3.4) (5.0) At 31 Dec 100.0 100.0 100.0 HSBC Holdings plc Annual Report on Form 20-F 81 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Analysis of changes in net interest income and net interest expense The following tables allocate changes in interest income and interest expense between volume and rate for 2025 compared with 2024 , and for 2024 compared with 2023 . We isolate rate variances and allocate any change arising from both volume and rate/volume to volume. Interest income Increase/(decrease) in 2025 compared with 2024 Increase/(decrease) in 2024 compared with 2023 2025 Volume Rate 2024 Volume Rate 2023 $m $m $m $m $m $m $m Short-term funds and loans and advances to banks HSBC Bank plc 4,321 (155) (1,517) 5,993 (887) 679 6,201 HSBC UK Bank plc 2,493 (432) (330) 3,255 (1,017) 786 3,486 The Hongkong and Shanghai Banking Corporation Limited 2,561 (141) (548) 3,250 (48) 220 3,078 HSBC Bank Middle East Limited 464 28 18 418 40 24 354 HSBC North America Holdings Inc. 1,136 (24) (115) 1,275 (155) 294 1,136 HSBC Bank Canada — — — — — (2) 2 Grupo Financiero HSBC, S.A. de C.V. 208 (21) (69) 298 42 (11) 267 Other trading entities 957 (38) 183 812 (916) 921 807 Holding companies, shared service centres and intra-group eliminations (680) (105) (1) (574) 138 (151) (561) At 31 Dec 11,460 (855) (2,412) 14,727 (2,263) 2,220 14,770 Loans and advances to customers HSBC Bank plc 4,850 (130) (760) 5,740 28 723 4,989 HSBC UK Bank plc 14,060 939 (55) 13,176 676 1,281 11,219 The Hongkong and Shanghai Banking Corporation Limited 18,940 186 (3,050) 21,804 (578) 561 21,821 HSBC Bank Middle East Limited 1,220 76 (169) 1,313 50 34 1,229 HSBC North America Holdings Inc. 3,136 42 (309) 3,403 125 103 3,175 HSBC Bank Canada — — — — — — — Grupo Financiero HSBC, S.A. de C.V. 3,299 (105) (227) 3,631 252 (27) 3,406 Other trading entities 662 (100) (156) 918 (2,512) 1,092 2,338 Holding companies, shared service centres and intra-group eliminations (131) (58) 33 (106) 74 324 (504) At 31 Dec 46,036 1,001 (4,844) 49,879 (380) 2,586 47,673 Reverse repurchase agreements – with banks HSBC Bank plc 2,695 198 (796) 3,293 (1,205) 1,321 3,177 HSBC UK Bank plc 220 123 (12) 109 32 8 69 The Hongkong and Shanghai Banking Corporation Limited 2,058 (28) (298) 2,384 (334) 281 2,437 HSBC Bank Middle East Limited 267 71 (47) 243 63 9 171 HSBC North America Holdings Inc. 745 79 (174) 840 233 (38) 645 HSBC Bank Canada — — — — — — — Grupo Financiero HSBC, S.A. de C.V. 188 (32) (61) 281 20 7 254 Other trading entities 155 (51) (157) 363 (274) 33 604 Holding companies, shared service centres and intra-group eliminations (576) 480 (223) (833) 481 (443) (871) At 31 Dec 5,752 712 (1,640) 6,680 (609) 803 6,486 Reverse repurchase agreements – with customers HSBC Bank plc 4,083 536 (631) 4,178 877 594 2,707 HSBC UK Bank plc 629 221 (70) 478 122 29 327 The Hongkong and Shanghai Banking Corporation Limited 1,491 301 (178) 1,368 (254) 652 970 HSBC Bank Middle East Limited 146 24 (13) 135 11 11 113 HSBC North America Holdings Inc. 4,495 212 (568) 4,851 865 230 3,756 HSBC Bank Canada — — — — — (2) 2 Grupo Financiero HSBC, S.A. de C.V. 21 — (11) 32 1 — 31 Other trading entities — — — — — — — Holding companies, shared service centres and intra-group eliminations (1) (1) 1 (1) (1) 1 (1) At 31 Dec 10,864 1,442 (1,619) 11,041 645 2,491 7,905 HSBC Holdings plc Annual Report on Form 20-F 82 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Interest income (continued) Increase/(decrease) in 2025 compared with 2024 Increase/(decrease) in 2024 compared with 2023 2025 Volume Rate 2024 Volume Rate 2023 $m $m $m $m $m $m $m Financial investments HSBC Bank plc 3,025 330 (318) 3,013 835 312 1,866 HSBC UK Bank plc 2,157 534 (222) 1,845 630 324 891 The Hongkong and Shanghai Banking Corporation Limited 10,934 1,368 (1,457) 11,023 1,345 1,014 8,664 HSBC Bank Middle East Limited 591 74 (48) 565 49 65 451 HSBC North America Holdings Inc. 2,085 210 (70) 1,945 179 132 1,634 HSBC Bank Canada — — — — — — — Grupo Financiero HSBC, S.A. de C.V. 577 142 (46) 481 103 87 291 Other trading entities 759 153 (196) 802 (1,834) 728 1,908 Holding companies, shared service centres and intra-group eliminations 702 (49) (162) 913 (126) (114) 1,153 At 31 Dec 20,830 2,688 (2,445) 20,587 2,751 978 16,858 Interest expense Increase/(decrease) in 2025 compared with 2024 Increase/(decrease) in 2024 compared with 2023 2025 Volume Rate 2024 Volume Rate 2023 $m $m $m $m $m $m $m Deposits by banks HSBC Bank plc 1,236 210 (350) 1,376 160 79 1,137 HSBC UK Bank plc 602 (35) (106) 743 20 107 616 The Hongkong and Shanghai Banking Corporation Limited 532 27 (106) 611 52 52 507 HSBC Bank Middle East Limited 355 84 (32) 303 83 20 200 HSBC North America Holdings Inc. 345 96 (80) 329 32 (18) 315 HSBC Bank Canada — — — — — (6) 6 Grupo Financiero HSBC, S.A. de C.V. 53 (8) (13) 74 12 (39) 101 Other trading entities 161 63 52 46 (122) 137 31 Holding companies, shared service centres and intra-group eliminations (671) (96) (23) (552) (7) (33) (512) At 31 Dec 2,613 334 (651) 2,930 269 260 2,401 Customer accounts HSBC Bank plc 8,778 579 (2,554) 10,753 1,134 1,108 8,511 HSBC UK Bank plc 5,863 489 (782) 6,156 225 1,399 4,532 The Hongkong and Shanghai Banking Corporation Limited 14,024 946 (4,576) 17,654 882 2,249 14,523 HSBC Bank Middle East Limited 520 110 (110) 520 61 77 382 HSBC North America Holdings Inc. 2,627 63 (466) 3,030 51 248 2,731 HSBC Bank Canada — — — — — — — Grupo Financiero HSBC, S.A. de C.V. 1,135 (48) (372) 1,555 (2) 68 1,489 Other trading entities 828 (188) 4 1,012 (3,094) 1,710 2,396 Holding companies, shared service centres and intra-group eliminations (486) (48) 69 (507) (115) 10 (402) At 31 Dec 33,289 2,263 (9,147) 40,173 1,473 4,538 34,162 HSBC Holdings plc Annual Report on Form 20-F 83 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Interest expense (continued) Increase/(decrease) in 2025 compared with 2024 Increase/(decrease) in 2024 compared with 2023 2025 Volume Rate 2024 Volume Rate 2023 $m $m $m $m $m $m $m Repurchase agreements – with banks HSBC Bank plc 1,615 (320) (277) 2,212 (511) 808 1,915 HSBC UK Bank plc 123 102 (2) 23 (25) 14 34 The Hongkong and Shanghai Banking Corporation Limited 2,293 222 (569) 2,640 758 514 1,368 HSBC Bank Middle East Limited 198 54 (34) 178 70 9 99 HSBC North America Holdings Inc. 604 67 (118) 655 296 (85) 444 HSBC Bank Canada — — — — — — — Grupo Financiero HSBC, S.A. de C.V. 156 139 (8) 25 (16) 5 36 Other trading entities 7 1 (37) 43 (61) (10) 114 Holding companies, shared service centres and intra-group eliminations (614) 96 171 (881) 309 (181) (1,009) At 31 Dec 4,382 594 (1,107) 4,895 1,621 273 3,001 Repurchase agreements – with customers HSBC Bank plc 3,721 (342) (27) 4,090 929 647 2,514 HSBC UK Bank plc 251 (53) 31 273 (382) 227 428 The Hongkong and Shanghai Banking Corporation Limited 549 (276) (283) 1,108 (12) 126 994 HSBC Bank Middle East Limited 0.4 (0.6) — 1 1 — — HSBC North America Holdings Inc. 4,360 44 (505) 4,821 1,249 34 3,538 HSBC Bank Canada — (13) — 13 (15) 3 25 Grupo Financiero HSBC, S.A. de C.V. 365 54 (104) 415 45 (12) 382 Other trading entities — (1) — 1 — — 1 Holding companies, shared service centres and intra-group eliminations 0.6 (0.2) 0.8 — — 25 (25) At 31 Dec 9,247 (921) (554) 10,722 1,537 1,328 7,857 Debt securities in issue – non trading HSBC Bank plc 1,909 (2) (625) 2,536 512 137 1,887 HSBC UK Bank plc 1,334 149 (172) 1,357 230 368 759 The Hongkong and Shanghai Banking Corporation Limited 2,305 (159) (308) 2,772 (210) 166 2,816 HSBC Bank Middle East Limited 89 19 3 67 (12) 6 73 HSBC North America Holdings Inc. 1,408 (84) (202) 1,694 167 22 1,505 HSBC Bank Canada — (12) — 12 (37) (2) 51 Grupo Financiero HSBC, S.A. de C.V. 334 25 (44) 353 178 83 92 Other trading entities 150 (24) 32 142 (3) (10) 155 Holding companies, shared service centres and intra-group eliminations 3,318 213 (768) 3,873 (147) 135 3,885 At 31 Dec 10,847 104 (2,063) 12,806 751 832 11,223 HSBC Holdings plc Annual Report on Form 20-F 84 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Loan maturity and interest sensitivity analysis The analysis of loan maturity and interest sensitivity is presented for loans where repayment is expected to occur on a contractual repayment basis (presented within Loans and advances to banks and Loans and advances to customers on our balance sheet). Loans that have been re-classified to Assets held for sale are excluded as recovery is expected from sale proceeds within the next 12 months rather than individual contractual repayment terms. The analysis of loan maturity and interest sensitivity by loan type on a contractual repayment basis was as follows. Total Total 2025 2024 $m $m Maturity of 1 year or less Loans and advances to banks 101,823 97,156 Loans and advances to customers 361,354 341,022 463,177 438,178 Maturity after 1 year but within 5 years Loans and advances to banks 5,968 4,513 Loans and advances to customers 285,116 268,427 291,084 272,940 Interest rate sensitivity of loans and advances to banks Fixed interest rate 1,937 1,217 Variable interest rate 4,031 3,296 5,968 4,513 Interest rate sensitivity of loans and advances to customers Fixed interest rate 66,999 60,088 Variable interest rate 218,117 208,339 285,116 268,427 Maturity after 5 years but within 15 years Loans and advances to banks 678 383 Loans and advances to customers 177,571 164,603 178,249 164,986 Interest rate sensitivity of loans and advances to banks Fixed interest rate 678 333 Variable interest rate — 50 678 383 Interest rate sensitivity of loans and advances to customers Fixed interest rate 77,525 69,464 Variable interest rate 100,045 95,139 177,570 164,603 Maturity after 15 years Loans and advances to banks — — Loans and advances to customers 175,050 166,321 175,050 166,321 Interest rate sensitivity of loans and advances to banks Fixed interest rate — — Variable interest rate — — — — Interest rate sensitivity of loans and advances to customers Fixed interest rate 83,388 76,945 Variable interest rate 91,662 89,376 175,050 166,321 HSBC Holdings plc Annual Report on Form 20-F 85 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Deposits The following tables summarise the average amount of bank deposits, customer deposits and certificates of deposit (‘CDs’) and other money market instruments (that are included within ‘Debt securities in issue’ in the balance sheet), together with the average interest rates paid thereon for each of the past two years. The analysis of average deposits by legal entity is based on the legal entity in which the deposits are recorded and excludes balances with HSBC companies. Deposits by banks 2025 2024 Average balance Average rate Average balance Average rate $m % $m % HSBC UK Bank plc 12,498 — 13,243 –  demand and other – non-interest bearing 13 — 31 — –  demand – interest bearing 30 4.5 11 2.7 –  time 12,455 4.8 13,201 5.5 –  other — — — — HSBC Bank plc 40,789 — 33,104 –  demand and other – non-interest bearing 8,031 — 6,159 — –  demand – interest bearing 23,186 3.4 18,384 4.9 –  time 8,145 3.5 8,197 3.9 –  other 1,427 — 364 — The Hongkong and Shanghai Banking Corporation Limited 22,932 — 21,785 –  demand and other – non-interest bearing 3,480 — 3,412 — –  demand – interest bearing 15,211 2.1 13,326 2.3 –  time 4,236 3.8 5,035 5.0 –  other 5 — 12 — HSBC Bank Middle East Limited 3,333 — 2,566 –  demand and other – non-interest bearing 113 — 101 — –  demand – interest bearing 744 0.9 721 0.6 –  time 2,401 5.2 1,665 5.9 –  other 75 — 79 — HSBC North America Holdings Inc. 7,837 — 5,449 –  demand and other – non-interest bearing 706 — 942 — –  demand – interest bearing 6,471 3.7 4,271 4.8 –  time 660 4.1 236 5.5 –  other — — — — Grupo Financiero HSBC, S.A. de C.V 575 — 662 –  demand and other – non-interest bearing 13 — 14 — –  demand – interest bearing 45 8.4 34 11.8 –  time 517 9.0 614 10.7 –  other — — — — Other trading entities 489 — 271 –  demand and other – non-interest bearing 16 — 16 — –  demand – interest bearing 2 1.5 13 7.7 –  time 471 4.1 242 10.7 –  other — — — — Total 88,453 3.0 77,080 3.8 –  demand and other – non-interest bearing 12,372 — 10,675 — –  demand – interest bearing 45,689 3.0 36,760 3.9 –  time 28,885 4.4 29,190 5.1 –  other 1,507 — 455 — HSBC Holdings plc Annual Report on Form 20-F 86 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Customer accounts 2025 2024 Average balance Average rate Average balance Average rate $m % $m % HSBC UK Bank plc 356,138 — 336,151 –  demand and other – non-interest bearing 56,526 — 58,672 — –  demand – interest bearing 255,665 1.6 224,061 1.9 –  savings 30,936 3.4 39,915 3.0 –  time 13,011 3.4 13,473 4.3 –  other — 0.5 30 3.3 HSBC Bank plc 311,416 — 297,942 –  demand and other – non-interest bearing 43,164 — 49,569 — –  demand – interest bearing 174,895 3.3 164,360 4.2 –  savings 58,187 2.7 49,037 3.3 –  time 35,061 4.0 34,976 5.1 –  other 109 3.1 — — The Hongkong and Shanghai Banking Corporation Limited 866,221 — 805,694 –  demand and other – non-interest bearing 73,600 — 68,539 — –  demand – interest bearing 465,021 0.7 416,431 1.0 –  savings 318,953 3.3 311,870 4.1 –  time 8,643 3.6 8,704 4.9 –  other 4 3.3 150 — HSBC Bank Middle East Limited 35,832 — 33,470 –  demand and other – non-interest bearing 17,184 — 18,761 — –  demand – interest bearing 10,102 2.0 6,372 2.4 –  savings 7,451 3.7 7,186 4.2 –  time 1,095 4.6 1,151 5.6 –  other — — — — HSBC North America Holdings Inc. 97,508 — 95,893 –  demand and other – non-interest bearing 17,066 — 17,409 — –  demand – interest bearing 37,156 3.2 34,270 3.7 –  savings 43,286 3.3 44,214 4.0 –  time — — — — –  other — — — — Grupo Financiero HSBC, S.A. de C.V. 28,009 4.1 29,311 5.3 –  demand and other – non-interest bearing 6,330 — 6,738 — –  demand – interest bearing 13,432 4.2 13,881 5.6 –  savings — — — — –  time 8,247 6.9 8,692 8.9 –  other — — — — Other trading entities 10,442 8.0 11,504 12.8 –  demand and other – non-interest bearing 4,664 — 4,438 — –  demand – interest bearing 1,374 1.2 2,252 8.0 –  savings 4,183 19.2 4,060 30.9 –  time 221 7.1 754 5.6 –  other — — — — Total 1,705,566 2.0 1,609,965 2.6 –  demand and other – non-interest bearing 218,534 — 224,126 — –  demand – interest bearing 957,645 1.6 861,627 2.1 –  savings 462,996 3.4 456,282 4.3 –  time 66,278 4.2 67,750 5.4 –  other 113 3.7 180 2.2 HSBC Holdings plc Annual Report on Form 20-F 87 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial summary Net charge-offs to average loans The following table provides the net charge-offs to average loans for loans and advances to banks and customers. Net charge-offs to average loans 2025 2024 % % Loans and advances to banks — — Loans and advances to customers 0.33 0.44 Allowances for credit losses to total loans are presented in Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at page 145 . Estimate of uninsured deposits and uninsured time deposits HSBC provides deposit services to customers across the many countries in which we operate and are therefore subject to differing national and state deposit insurance regimes. Uninsured deposits are presented on an estimated basis using the same methodologies and assumptions inherent in our liquidity reporting requirements to our primary regulator, the Prudential Regulation Authority. The insured status of a deposit is determined on the basis of individual insurance limits enacted within local regulations. At 31 December 2025, the amount of uninsured deposits was $ 1.4 tn (31 December 2024: $ 1.3 tn). Uninsured time deposits are uninsured deposits which are subject to contractual maturity requirements prior to withdrawal. Amounts are presented on a residual contractual maturity basis and exclude overnight deposits where contractual requirements are imminently satisfied. Maturity analysis of uninsured time deposits At 31 Dec 2025 3 months or less After 3 months but within 6 months After 6 months but within 12 months After 12 months Total $m $m $m $m $m Uninsured time deposits 294,755 15,139 8,416 6,340 324,650 At 31 Dec 2024 Uninsured time deposits 262,268 20,540 9,433 4,783 297,024 HSBC Holdings plc Annual Report on Form 20-F 88 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Basis of preparation Business segments Our business segments – Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking – along with Corporate Centre, are our reportable segments under IFRS 8 ‘Operating Segments’. Reconciliations of the total constant currency business segment results to the Group’s reported results are presented on page 330 . The Group Operating Committee is considered the Chief Operating Decision Maker (‘CODM’) for the purposes of identifying the Group’s reportable segments. Business segment results are assessed by the CODM on the basis of constant currency performance. We separately disclose ‘notable items’, as described on page 65 . Our operations are closely integrated and, accordingly, the presentation of data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and global infrastructures to the extent that they can be meaningfully attributed to business segments. While such allocations have been made on a systematic and consistent basis, they involve a certain degree of subjectivity. Costs that are not allocated to business segments are included in Corporate Centre. Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-company and inter- business line transactions. All such transactions are undertaken on arm’s length terms. The intra-Group elimination items for business segments are presented in Corporate Centre. Effective 1 January 2026, we have transitioned certain clients, primarily from Hong Kong and the UK to the Corporate and Institutional Banking segment to better serve their specific needs. Such transition did not involve a change in our reportable segments. Legal entities The results of main legal entities are presented on a reported and constant currency basis, including HSBC UK Bank plc, HSBC Bank plc, The Hongkong and Shanghai Banking Corporation Limited, HSBC Bank Middle East Limited, HSBC North America Holdings Inc., and Grupo Financiero HSBC, S.A. de C.V. HSBC Holdings incurs the liability of the UK bank levy, with the cost being recharged to its UK operating subsidiaries. The current year expense will be reflected in the fourth quarter as it is assessed on our balance sheet position as at 31 December. The results of legal entities are presented on a reported basis on page 95 and a constant currency basis on page 97 . Supplementary analysis of constant currency results and notable items by business segment Constant currency results 2025 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Revenue 15,878 12,938 27,637 14,520 (2,699) 68,274 ECL (1,476) (696) (696) (892) (90) (3,850) Operating expenses (4,826) (5,537) (15,556) (9,285) (1,224) (36,428) Share of profit in associates and joint ventures — — 1 24 1,886 1,911 Profit/(loss) before tax 9,576 6,705 11,386 4,367 (2,127) 29,907 Loans and advances to customers (net) 229,491 303,698 305,022 150,047 141 988,399 Customer accounts 543,381 364,323 597,719 281,058 347 1,786,828 Notable items 2025 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Notable items Revenue Disposals, wind-downs, acquisitions and related costs 1 — — (9) (73) (1,560) (1,642) Dilution loss of interest in BoCom associate 2 — — — — (1,104) (1,104) Operating expenses Disposals, wind-downs, acquisitions and related costs — 1 (290) (83) (130) (502) Restructuring and other related costs 3 (16) (70) (348) (161) (435) (1,030) Legal provisions 4 — — (322) — (1,110) (1,432) Impairment loss of interest in BoCom associate 2 — — — — (1,000) (1,000) 1 Amounts include recycling of cumulative fair value losses of $ 1.5 bn relating to the French retained portfolio of home and certain other loans following the completion of its sale to a consortium comprising Rothesay Life plc and CCF. 2    Amounts include a loss of $ 1.1 bn inclusive of reserves recycling as a result of the dilution of our shareholding in BoCom. We have also recognised a $ 1.0 bn impairment loss following an impairment test on the carrying value of the Group’s investment in BoCom in ‘Impairment loss of interest in BoCom associate’. See Note 18 on pages 345 to 348 . 3 Amounts include a $1.0bn organisational simplification provision recognised in 2025. 4    Amounts include a $ 1.1 bn provision in connection with a claim brought by Herald Fund SPC in the Luxembourg District Court, relating to the Bernard L. Madoff Investment Securities LLC fraud and a $ 0.3 bn provision in connection with certain historical trading activities in HSBC Bank plc. HSBC Holdings plc Annual Report on Form 20-F 89 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Reconciliation of reported results to constant currency results – business segments (continued) 2024 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Revenue –  Reported 15,034 11,954 26,819 13,976 (1,929) 65,854 –  Currency translation 13 388 (47) (159) (40) 155 –  Constant currency 15,047 12,342 26,772 13,817 (1,969) 66,009 ECL –  Reported (1,076) (402) (869) (1,038) (29) (3,414) –  Currency translation (1) (13) (9) 45 — 22 –  Constant currency (1,077) (415) (878) (993) (29) (3,392) Operating expenses –  Reported (4,837) (4,947) (14,544) (9,013) 298 (33,043) –  Currency translation (4) (157) (68) 113 13 (103) –  Constant currency (4,841) (5,104) (14,612) (8,900) 311 (33,146) Share of profit/(loss) in associates and joint ventures –  Reported — — 1 47 2,864 2,912 –  Currency translation — — — (2) 3 1 –  Constant currency — — 1 45 2,867 2,913 Profit/(loss) before tax –  Reported 9,121 6,605 11,407 3,972 1,204 32,309 –  Currency translation 8 218 (124) (3) (24) 75 –  Constant currency 9,129 6,823 11,283 3,969 1,180 32,384 Loans and advances to customers (net) –  Reported 235,208 267,293 284,701 136,325 7,131 930,658 –  Currency translation (155) 18,485 13,176 7,702 912 40,120 –  Constant currency 235,053 285,778 297,877 144,027 8,043 970,778 Customer accounts –  Reported 507,389 330,012 557,796 259,443 315 1,654,955 –  Currency translation (832) 22,821 30,130 12,145 21 64,285 –  Constant currency 506,557 352,833 587,926 271,588 336 1,719,240 Notable items (continued) 2024 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Notable items Revenue Disposals, wind-downs, acquisitions and related costs 1 — — (14) 28 (1,357) (1,343) Early redemption of legacy securities — — — — (237) (237) Operating expenses Disposals, wind-downs, acquisitions and related costs — 6 (10) (3) (192) (199) Restructuring and other related costs 2 — 7 (2) (14) (25) (34) 1 Amounts include a $1.0bn loss on disposal and a $5.2bn loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina, partly offset by a $4.8bn gain on disposal of our banking business in Canada, inclusive of a $0.3bn gain on the foreign exchange hedging of the sale proceeds, the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves losses. 2 Amounts include organisational simplification provisions recognised in 2024 and reversals of restructuring provisions recognised during 2022. HSBC Holdings plc Annual Report on Form 20-F 90 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Reconciliation of reported results to constant currency results – business segments (continued) 2023 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Revenue –  Reported 14,476 12,690 25,762 13,329 (199) 66,058 –  Currency translation 56 749 (1,039) (944) 160 (1,018) –  Constant currency 14,532 13,439 24,723 12,385 (39) 65,040 ECL –  Reported (1,488) (516) (601) (841) (1) (3,447) –  Currency translation (6) (29) 77 155 — 197 –  Constant currency (1,494) (545) (524) (686) (1) (3,250) Operating expenses –  Reported (4,499) (4,551) (14,005) (9,072) 57 (32,070) –  Currency translation (15) (278) 250 523 (101) 379 –  Constant currency (4,514) (4,829) (13,755) (8,549) (44) (31,691) Share of profit/(loss) in associates and joint ventures –  Reported — — (1) 65 (257) (193) –  Currency translation — — — (3) (101) (104) –  Constant currency — — (1) 62 (358) (297) Profit/(loss) before tax –  Reported 8,489 7,623 11,155 3,481 (400) 30,348 –  Currency translation 35 442 (712) (269) (42) (546) –  Constant currency 8,524 8,065 10,443 3,212 (442) 29,802 Loans and advances to customers (net) –  Reported 239,218 264,544 288,351 146,155 267 938,535 –  Currency translation 955 13,681 1,876 650 9 17,171 –  Constant currency 240,173 278,225 290,227 146,805 276 955,706 Customer accounts –  Reported 485,039 330,480 539,139 256,393 596 1,611,647 –  Currency translation 1,834 17,090 9,136 1,271 22 29,353 –  Constant currency 486,873 347,570 548,275 257,664 618 1,641,000 Notable items (continued) 2023 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Notable items Revenue Disposals, wind-downs, acquisitions and related costs 1,2,3 — 1,591 — 4 (297) 1,298 Fair value movements on financial instruments 4 — — — — 14 14 Disposal losses on Markets Treasury repositioning (373) (142) (371) (91) — (977) Operating expenses Disposals, wind-downs, acquisitions and related costs — (45) (7) (53) (216) (321) Restructuring and other related costs 5 — 17 45 11 63 136 Impairment loss of interest in BoCom associate 6 — — — — (3,000) (3,000) 1 Amounts include impact of the sale of our retail banking operations in France. 2 Amounts include the gain of $1.6bn recognised in respect of the acquisition of SVB UK. 3 Amounts include fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 4 Amounts relate to fair value movements on non-qualifying hedges in HSBC Holdings. 5 Amounts relate to reversals of restructuring provisions recognised during 2022. 6 Amounts relate to an impairment loss of $3.0bn recognised in respect of the Group’s investment in BoCom. HSBC Holdings plc Annual Report on Form 20-F 91 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Fee and other income supplementary analysis The following table presents an analysis of the components of fee and other income by business segment. 2025 Hong Kong UK CIB IWPB Corporate Centre Total $bn $bn $bn $bn $bn $bn Net fee income 2,776 1,804 4,489 4,263 11 13,343 Net income from financial instruments held for trading or managed on a fair value basis 622 (25) 7,660 678 10,747 19,682 Insurance revenue 1 89 — — 1,756 (42) 1,803 Gain less impairment relating to sale of business operations — — (15) (31) (1) (47) Other operating (expense)/income 309 63 971 458 (3,102) (1,301) Total 3,796 1,842 13,105 7,124 7,613 33,480 Banking book funding costs used to generate ‘net income from financial instruments held for trading or managed on a fair value basis’ — — — — (9,686) (9,686) Third-party net interest income from insurance — — — 396 — 396 Notable items — — 9 73 2,664 2,746 Fee and other income 3,796 1,842 13,114 7,593 591 26,936 Supplementary management view of fee and other income - on a constant currency basis Wholesale Transaction Banking 730 891 9,239 — — 10,860 – Global Foreign Exchange 183 166 5,345 — — 5,694 – Global Payments Solutions 343 534 1,417 — — 2,294 – Global Trade Solutions 204 191 1,067 — — 1,462 – Securities Services — — 1,410 — — 1,410 Wealth 2,206 339 — 6,845 — 9,390 – Investment Distribution 2,124 335 — 1,165 — 3,624 – Insurance 1 82 4 — 2,513 — 2,599 – Asset Management — — — 1,500 — 1,500 – Private Bank — — — 1,667 — 1,667 Investment Banking, Debt and Equity Markets — — 3,245 — — 3,245 Retail Banking 326 255 — 665 — 1,246 Wholesale Credit and Lending 78 238 567 — — 883 Other 456 119 63 83 591 1,312 2024 Net fee income 2,305 1,821 4,345 3,857 (27) 12,301 Net income from financial instruments held for trading or managed on a fair value basis 390 13 7,304 517 12,892 21,116 Insurance revenue 1 27 — — 1,209 (3) 1,233 Gain less impairment relating to sale of business operations — — (26) (3) (1,723) (1,752) Other operating (expense)/income 325 91 422 85 (700) 223 Total 3,047 1,925 12,045 5,665 10,439 33,121 Banking book funding costs used to generate ‘net income from financial instruments held for trading or managed on a fair value basis’ — — — — (11,434) (11,434) Third-party net interest income from insurance — — — 429 — 429 Notable items — — 14 (28) 1,357 1,343 Currency translation 3 62 208 85 (11) 347 Fee and other income 3,050 1,987 12,267 6,151 351 23,806 Supplementary management view of fee and other income - on a constant currency basis Wholesale Transaction Banking 709 912 8,847 — — 10,468 – Global Foreign Exchange 180 165 5,096 — — 5,441 – Global Payments Solutions 326 552 1,383 — — 2,261 – Global Trade Solutions 203 195 1,059 — — 1,457 – Securities Services — — 1,309 — — 1,309 Wealth 1,577 391 — 5,618 — 7,586 – Investment Distribution 1,535 384 — 938 — 2,857 – Insurance 1 42 7 — 1,864 — 1,913 – Asset Management — — — 1,373 — 1,373 – Private Bank — — — 1,443 — 1,443 Investment Banking, Debt and Equity Markets — — 3,198 — — 3,198 Retail Banking 312 273 — 765 — 1,350 Wholesale Credit and Lending 83 216 626 — — 925 Other 369 195 (404) (232) 351 279 1 Includes Group ‘net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss’, ‘insurance finance expense’ and ‘insurance service result’. HSBC Holdings plc Annual Report on Form 20-F 92 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Strategic transactions supplementary analysis The following table presents the selected impacts of strategic transactions on the Group and our business segments for transactions that are classified as material notable items. See page 65 for further information on material notable items and the impact of strategic transactions. Constant currency results of which 2025 2024 Variance 2025 vs. 2024 Hong Kong UK CIB IWPB Corporate Centre $m $m $m $m $m $m $m $m Revenue (1,642) 39 (1,681) — — (638) (590) (453) –  distorting impact of operating results — 1,214 (1,214) — — (629) (491) (94) –  notable items (1,642) (1,175) (467) — — (9) (99) (359) ECL — (72) 72 — — 36 36 — Operating expenses (502) (919) 417 — (7) 96 253 75 –  distorting impact of operating results — (729) 729 — — 381 336 12 –  notable items (502) (190) (312) — (7) (285) (83) 63 Share of profit in associates and joint ventures — — — — — — — — Profit before tax (2,144) (952) (1,192) — (7) (506) (301) (378) –  distorting impact of operating results — 413 (413) — — (212) (119) (82) –  notable items (2,144) (1,365) (779) — (7) (294) (182) (296) Profit before tax 1 –  business in Argentina (107) (5,990) 5,883 — — (160) (14) 6,057 –  banking business in Canada (3) 4,980 (4,983) — — (143) (67) (4,773) –  wind-down of M&A and ECM in the UK, Europe and US (114) (98) (16) — — (16) — — –  France life insurance business (231) (6) (225) — — — (214) (11) –  retained French portfolio of home and certain other loans (1,468) 91 (1,559) — — — — (1,559) –  Germany private banking business 142 13 129 — — — 134 (5) –  other strategic transactions (363) 58 (421) — (7) (187) (140) (87) 1 Represents the impact on profit before tax due to strategic transactions, inclusive of the notable items impacts and the distorting impact of operating results. This does not represent the profit before tax of each disposed business. In the case of wind-downs, there may be timing differences between the recognition of operating cost impacts and operating revenue impacts. These would arise in the event there is a timing lag between the impact of cost actions and the resultant impact on operating revenue. Reconciliation of reported and constant currency risk-weighted assets At 31 Dec 2025 Hong Kong UK CIB IWPB Corporate Centre Total RWAs $bn $bn $bn $bn $bn $bn Risk-weighted assets Reported 139.6 152.9 408.7 89.9 97.5 888.6 Constant currency 139.6 152.9 408.7 89.9 97.5 888.6 At 31 Dec 2024 Risk-weighted assets Reported 143.7 133.5 388.0 85.7 87.4 838.3 Currency translation 0.1 9.3 12.7 4.0 1.1 27.2 Constant currency 143.8 142.8 400.7 89.7 88.5 865.5 At 31 Dec 2023 Risk-weighted assets Reported 145.2 124.9 398.2 97.6 88.2 854.1 Currency translation 0.7 6.5 (3.9) (1.9) (0.5) 0.9 Constant currency 145.9 131.4 394.3 95.7 87.7 855.0 HSBC Holdings plc Annual Report on Form 20-F 93 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Supplementary tables for Wealth Insurance business performance The following table provides an analysis of the results of our insurance business for the year. It comprises income earned by IWPB insurance manufacturing operations, income earned by wealth distribution channels within our IWPB, Hong Kong and UK business segments, and consolidation adjustments. Total insurance profit and loss (constant currency) 2025 2024 2023 $m $m $m Net fee income 287 223 194 Insurance service result 1,825 1,317 1,078 –  release of contractual service margin 1,593 1,339 1,125 –  risk adjustment release 65 66 36 –  experience variance and other 254 35 26 –  loss from onerous contracts (87) (123) (109) Investment income 11,387 6,115 8,027 –  net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss 11,175 5,865 7,743 –  other investment income 212 250 284 Insurance finance expense (11,197) (5,949) (7,781) Other income 297 207 (54) Revenue 1 2,599 1,913 1,464 ECL (1) — 4 Net operating income 2,598 1,913 1,468 Operating expenses (789) (724) (690) Operating profit 1,809 1,189 778 Share of profit in associates and JVs 15 32 49 Profit before tax 1,824 1,221 827 1 ‘Revenue’ of $2.6 bn (2024: $1.9 bn; 2023: $1.5 bn) includes $2.5 bn earned within IWPB (2024: $1.8 bn; 2023: $1.4 bn) and $0.1 bn earned within Hong Kong (2024: $0.1 bn; 2023: $0.1 bn). This comprises revenue from insurance manufacturing operations of $2.3 bn (2024: $1.7 bn; 2023: $1.3 bn), and revenue from wealth distribution channels and consolidation impacts of $0.3 bn (2024: $0.2 bn; 2023: $0.2 bn). Total insurance revenue of $2.6 bn was $0.7bn higher than in 2024 reflecting the following: – Insurance service result of $1.8 bn increased by $0.5 bn compared with 2024 reflecting higher CSM release as a result of strong new business growth, and favourable experience variances from positive investment management fee, maintenance expense and claims experience. – Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss of $11.2 bn increased by $5.3 bn compared with 2024 reflecting strong equity markets and the favourable impact of downward movements in interest rates on our fixed income investments in Hong Kong, partly offset by rising rates in mainland China. – This was offset by Insurance finance expense of $11.2 bn, which moves inversely with investment income. The margin between investment income and insurance finance expense benefited from increases in interest rates in mainland China. – Other income increased by $0.1 bn compared with 2024 from gains on reinsurance contracts in Hong Kong. Insurance key performance metrics 2025 2024 2023 $m $m $m Annualised new business premiums of insurance manufacturing operations 6,505 4,912 3,797 Insurance manufacturing new business contractual service margin 3,405 2,515 1,686 Consolidated Group new business contractual service margin 3,799 2,729 1,812 Net dividends of insurance manufacturing operations 962 1,522 813 Insurance equity plus CSM net of tax ø 18,800 17,025 16,583 Annualised new business premiums (‘ANP’) is used to assess new insurance premiums generated by the business. It is calculated as 100% of annualised first year regular premiums and 10% of single premiums, before reinsurance ceded. ANP increased by 32% compared with 2024, primarily from strong new business sales in Hong Kong. Consolidated Group new business contractual service margin represents insurance manufacturing new business CSM and the consolidation impact of inclusion of our bank distribution channel. Consolidated Group new business contractual service margin increased by $1.1 bn compared with 2024, reflecting strong sales in Hong Kong and increased sales of higher margin products, contributing to the overall Group CSM at 31 December 2025 of $15.7 bn (2024: $12.8 bn; 2023: $11.4 bn). Net dividends of insurance manufacturing operations represents dividends paid to immediate parent companies net of CET1 qualifying injections to fund business growth. Net dividends of insurance manufacturing operations in 2025 included dividends paid to immediate parent companies of $1.2 bn (2024: $1.6 bn; 2023: $1.0 bn) net of CET1 qualifying injections to fund business growth of $0.2 bn (2024: $0.1 bn; 2023: $0.2 bn). Net dividends decreased by $0.6 bn due to the non- recurrence of a 2024 release of surplus regulatory capital in Hong Kong. Insurance equity plus CSM net of tax is a non-GAAP alternative performance measure that provides information about our insurance manufacturing operations’ net asset value plus the future earnings from in-force business. At 31 December 2025, insurance equity plus CSM net of tax was calculated as follows: Insurance equity plus CSM net of tax 2025 2024 2023 $m $m $m Insurance manufacturing operations equity 6,715 7,015 7,731 Insurance manufacturing CSM 14,598 12,063 10,786 CSM deferred tax recognised (2,513) (2,053) (1,934) Insurance equity plus CSM net of tax ø 18,800 17,025 16,583 HSBC Holdings plc Annual Report on Form 20-F 94 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Wealth balances The following table shows our wealth balances, which include invested assets and wealth deposits. Invested assets comprise customer assets either managed by our Asset Management business or by external third-party investment managers, as well as self-directed investments by our customers. From 1 January 2026, we have updated the definition of our wealth balances to exclude Asset Management third-party distribution. This will enhance comparability with industry peers. Reported wealth balances 1 2025 2024 $bn $bn Private Bank invested assets 2 465 395 Retail invested assets 490 409 Asset Management third-party distribution 3 580 489 Reported invested assets 1 1,535 1,293 –  of which: The Hongkong and Shanghai Banking Corporation Limited 773 645 Wealth deposits (Premier and Private Bank) 4 608 555 –  of which: The Hongkong and Shanghai Banking Corporation Limited 407 372 Total reported wealth balances 2,143 1,848 –  of which: The Hongkong and Shanghai Banking Corporation Limited 1,180 1,017 Total reported wealth balances excluding Asset Management third-party distribution 1,563 1,359 –  of which: The Hongkong and Shanghai Banking Corporation Limited 1,055 907 1 Invested assets are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. 2 Private Bank client balances, which comprise invested assets and customer deposits, were $566bn (31 December 2024: $484bn). 3 Total assets under management manufactured by Asset Management, which includes third-party distribution and other components that are reported in the Private Bank and Retail invested assets in the table above, were $866bn (31 December 2024: $731bn). This includes balances related to The Hongkong and Shanghai Banking Corporation Limited, of which $260bn (31 December 2024: $223bn). 4 Premier and Private Bank deposits, which include Prestige deposits in Hang Seng Bank, form part of the total IWPB, Hong Kong and UK businesses’ customer accounts balance on page 88 . Invested assets ‘Net new invested assets’ represents the net customer inflows from retail invested assets, Asset Management third-party distribution and Private Bank invested assets. It excludes all customer deposits. Invested assets 2025 2024 $bn $bn Opening balance 1,293 1,191 Net new invested assets 80 64 –  of which: The Hongkong and Shanghai Banking Corporation Limited 39 47 Net market movements 125 97 Foreign exchange and others 37 (59) Closing balance 1,535 1,293 Net new money Net new money ('NNM') represents our net customer inflows from Private Bank and Retail invested assets and wealth deposits. It excludes foreign exchange movements and market and other movements not relating to client inflows/outflows which are reported within ‘foreign exchange and others’ and ‘net market movements’, respectively. This metric excludes net customer inflows from Asset Management third-party distribution. From 1 January 2026 management will disclose NNM as the key wealth metric, offering greater comparability to industry peers. From 1 January 2026, we no longer intend to disclose invested assets as a key metric. Net new money 2025 2024 $bn $bn Opening balance (total reported wealth balances excluding Asset Management third-party distribution) 1,359 1,282 Net new money 3 86 80 –  of which: Net new invested assets excluding Asset Management third-party distribution 46 51 –  of which: Change in deposits 40 29 Net market movements excluding Asset Management third-party distribution 91 60 Foreign exchange and others excluding Asset Management third-party distribution, including wealth deposits 1 27 (63) Closing balance 2 1,563 1,359 Net new money – The Hongkong and Shanghai and Banking Corporation Limited 72 71 –  of which: net new invested assets excluding Asset Management third-party distribution 41 43 –  of which: change in deposits on a constant currency basis 31 28 1 Includes foreign exchange on wealth deposits. 2 Closing balance includes invested assets of $1,535bn (2024: $1,293bn ), excluding Asset Management third-party distribution invested assets of $580bn (2024: $489bn ) and includes wealth deposit balances of $608bn (2024: $555bn ). 3    Clients’ assets are translated at the average quarterly rates of foreign exchange applicable to the respective quarters, with the effects of currency translation reported separately. HSBC Holdings plc Annual Report on Form 20-F 95 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities CIB: Securities Services and Issuer Services Assets held in custody Custody is the safekeeping and servicing of securities and other financial assets on behalf of clients. Assets held in custody are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. At 31 December 2025, we held $12.9tn of assets as custodian, an increase of 21% compared with 31 December 2024. The balance comprised $11.9tn of assets in Securities Services, which were recorded at market value, and $1.0tn of assets in Issuer Services, recorded at book value. Assets under administration Our assets under administration business includes the provision of bond and loan administration services, transfer agency services and the valuation of portfolios of securities and other financial assets on behalf of clients and complements the custody business. At 31 December 2025, the value of assets held under administration by the Group amounted to $6.0tn, which was 16% higher than at 31 December 2024. The balance comprised $3.6tn of assets in Securities Services, which were recorded at market value, and $2.4tn of assets in Issuer Services, recorded at book value. Analysis of reported results by legal entities HSBC reported profit/(loss) before tax and balance sheet data 2025 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Net interest income 11,406 1,684 16,471 1,524 2,130 — 2,229 1,422 (2,072) 34,794 Net fee income 1,696 1,618 6,483 555 1,513 — 635 996 (153) 13,343 Net income from financial instruments held for trading or managed on a fair value basis 568 6,490 10,910 339 548 — 440 112 275 19,682 Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss — 1,364 9,741 — — — 49 15 6 11,175 Insurance finance income/(expense) — (1,462) (9,695) — — — (43) — 3 (11,197) Insurance service result — 218 1,538 — — — 69 — — 1,825 Other income/(expense) 1 132 (874) (194) 192 539 — 94 150 (1,387) (1,348) Net operating income before change in expected credit losses and other credit impairment charges 13,802 9,038 35,254 2,610 4,730 — 3,473 2,695 (3,328) 68,274 Change in expected credit losses and other credit impairment charges (710) (203) (1,635) (186) (201) — (786) (25) (104) (3,850) Net operating income 13,092 8,835 33,619 2,424 4,529 — 2,687 2,670 (3,432) 64,424 Total operating expenses excluding impairment of goodwill and other intangible assets (5,663) (8,818) (15,132) (1,332) (3,326) — (2,045) (1,544) 1,837 (36,023) Impairment of goodwill and other intangible assets (21) (323) (49) (2) (5) — (3) — (2) (405) Operating profit/(loss) 7,408 (306) 18,438 1,090 1,198 — 639 1,126 (1,597) 27,996 Share of profit in associates and joint ventures less impairment 2 1 82 1,150 — — — 10 672 (4) 1,911 Profit/(loss) before tax 7,409 (224) 19,588 1,090 1,198 — 649 1,798 (1,601) 29,907 % % % % % % % % % % Share of HSBC’s profit before tax 24.8 (0.7) 65.5 3.6 4.0 — 2.2 6.0 (5.4) 100.0 Cost efficiency ratio 41.2 101.1 43.1 51.1 70.4 — 59.0 57.3 55.1 53.4 Balance sheet data $m $m $m $m $m $m $m $m $m $m Loans and advances to customers (net) 310,116 106,409 467,842 22,618 52,178 — 25,252 3,971 13 988,399 Total assets 475,752 950,562 1,492,150 64,295 261,401 — 50,197 32,339 (93,662) 3,233,034 Customer accounts 376,903 321,451 911,725 37,010 99,458 — 29,493 10,781 7 1,786,828 Risk-weighted assets 3,4 157,963 146,010 411,824 27,180 73,961 — 32,509 57,014 2,106 888,647 HSBC Holdings plc Annual Report on Form 20-F 96 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities HSBC reported profit/(loss) before tax and balance sheet data (continued) 2024 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Net interest income 10,331 1,254 15,077 1,590 1,613 300 2,292 2,774 (2,498) 32,733 Net fee income 1,672 1,629 5,449 508 1,372 129 630 1,076 (164) 12,301 Net income from financial instruments held for trading or managed on a fair value basis 580 6,042 11,781 331 914 33 504 411 520 21,116 Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss — 1,100 4,608 — — — 22 183 (12) 5,901 Insurance finance income/(expense) — (1,261) (4,562) — — — (26) (150) 21 (5,978) Insurance service result — 217 1,042 — — — 76 (7) (18) 1,310 Other income/(expense) 169 576 658 75 365 — 75 (984) (2,463) (1,529) Net operating income before change in expected credit losses and other credit impairment charges 12,752 9,557 34,053 2,504 4,264 462 3,573 3,303 (4,614) 65,854 Change in expected credit losses and other credit impairment charges (405) (211) (1,532) (198) (81) (40) (864) (93) 10 (3,414) Net operating income 12,347 9,346 32,521 2,306 4,183 422 2,709 3,210 (4,604) 62,440 Total operating expenses excluding impairment of goodwill and other intangible assets (5,124) (6,718) (14,296) (1,191) (3,349) (236) (1,992) (1,959) 1,899 (32,966) Impairment of goodwill and other intangible assets (11) (5) (33) (1) (2) — (2) (22) (1) (77) Operating profit/(loss) 7,212 2,623 18,192 1,114 832 186 715 1,229 (2,706) 29,397 Share of profit in associates and joint ventures less impairment 1 22 2,278 — — — 15 600 (4) 2,912 Profit/(loss) before tax 7,213 2,645 20,470 1,114 832 186 730 1,829 (2,710) 32,309 % % % % % % % % % % Share of HSBC’s profit before tax 22.2 8.2 63.4 3.4 2.6 0.6 2.3 5.7 (8.4) 100.0 Cost efficiency ratio 40.3 70.3 42.1 47.6 78.6 51.1 55.8 60.0 41.1 50.2 Balance sheet data $m $m $m $m $m $m $m $m $m $m Loans and advances to customers (net) 272,973 103,464 449,940 20,440 55,786 — 23,439 4,617 (1) 930,658 Total assets 426,165 914,506 1,400,456 57,215 253,251 — 46,007 26,623 (107,175) 3,017,048 Customer accounts 340,233 297,785 845,284 34,808 99,278 — 27,525 9,999 43 1,654,955 Risk-weighted assets 3,4 138,332 137,609 402,847 26,624 74,416 — 29,671 50,731 (648) 838,254 2023 Net interest income 9,684 2,674 16,705 1,551 1,712 1,275 2,148 3,765 (3,718) 35,796 Net fee income 1,597 1,527 4,859 475 1,237 559 581 1,225 (215) 11,845 Net income from financial instruments held for trading or managed on a fair value basis 516 4,220 9,507 397 729 110 437 1,054 (309) 16,661 Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss — 1,438 6,258 — — — 39 323 (171) 7,887 Insurance finance income/(expense) — (1,460) (6,237) — — — (44) (166) 98 (7,809) Insurance service result — 154 838 — — — 87 9 (10) 1,078 Other income/(expense) 1,608 736 (31) 2 185 22 65 (1,481) (506) 600 Net operating income before change in expected credit losses and other credit impairment charges 13,405 9,289 31,899 2,425 3,863 1,966 3,313 4,729 (4,831) 66,058 Change in expected credit losses and other credit impairment (charges)/recoveries (523) (212) (1,641) (90) (94) (46) (696) (279) 134 (3,447) Net operating income 12,882 9,077 30,258 2,335 3,769 1,920 2,617 4,450 (4,697) 62,611 Total operating expenses excluding impairment of goodwill and other intangible assets (4,602) (6,483) (13,379) (1,095) (3,473) (1,049) (1,823) (2,631) 2,180 (32,355) Impairment of goodwill and other intangible assets (10) 97 (16) (1) 222 — (3) (4) — 285 Operating profit/(loss) 8,270 2,691 16,863 1,239 518 871 791 1,815 (2,517) 30,541 HSBC Holdings plc Annual Report on Form 20-F 97 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities HSBC reported profit/(loss) before tax and balance sheet data (continued) 2023 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Share of profit in associates and joint ventures less impairment 2 — (52) (696) — — — 14 544 (3) (193) Profit/(loss) before tax 8,270 2,639 16,167 1,239 518 871 805 2,359 (2,520) 30,348 % % % % % % % % % % Share of HSBC’s profit before tax 27.2 8.7 53.3 4.1 1.7 2.9 2.6 7.8 (8.3) 100.0 Cost efficiency ratio 34.4 68.7 42.0 45.2 84.2 53.4 55.1 55.7 45.1 48.5 Balance sheet data $m $m $m $m $m $m $m $m $m $m Loans and advances to customers (net) 270,208 95,750 455,315 20,072 54,829 — 26,410 15,951 — 938,535 Total assets 423,029 896,682 1,333,911 50,612 252,339 90,731 47,309 59,051 (114,987) 3,038,677 Customer accounts 339,611 274,733 801,430 31,341 99,607 — 29,423 35,326 176 1,611,647 Risk-weighted assets 3,4 129,211 131,468 396,677 24,294 72,248 31,890 32,639 59,574 6,704 854,114 1 In 2025, the amounts include recycling of cumulative fair value losses of $ 1.5 bn relating to the French retained portfolio of home and certain other loans following the completion of its sale to a consortium comprising Rothesay Life plc and CCF and a loss of $ 1.1 bn inclusive of reserves recycling as a result of the dilution of our shareholding in BoCom. 2 Includes impairment losses of $ 1.0 bn (2025) and $ 3.0 bn (2023) recognised in respect of the Group’s investment in BoCom. See Note 18 on pages 345 to 348 . 3 Risk-weighted assets are non-additive across the legal entities due to market risk diversification effects within the Group. 4 Balances are on a third-party Group consolidated basis. Summary information – legal entities and selected countries/territories Legal entity reported and constant currency results 2025 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corpo- ration Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 1 Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 13,802 9,038 35,254 2,610 4,730 — 3,473 2,695 (3,328) 68,274 ECL (710) (203) (1,635) (186) (201) — (786) (25) (104) (3,850) Operating expenses (5,684) (9,141) (15,181) (1,334) (3,331) — (2,048) (1,544) 1,835 (36,428) Share of profit in associates and joint ventures less impairment 1 82 1,150 — — — 10 672 (4) 1,911 Profit/(loss) before tax 7,409 (224) 19,588 1,090 1,198 — 649 1,798 (1,601) 29,907 Loans and advances to customers (net) 310,116 106,409 467,842 22,618 52,178 — 25,252 3,971 13 988,399 Customer accounts 376,903 321,451 911,725 37,010 99,458 — 29,493 10,781 7 1,786,828 1 Includes the results of entities located in Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on the Group’s reported profit before tax of $ 1.5 bn. HSBC Holdings plc Annual Report on Form 20-F 98 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Legal entity results: notable items 2025 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corpo- ration Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, wind-downs, acquisitions and related costs 1 — (1,546) — 71 — — — — (167) (1,642) Dilution loss of interest in BoCom 2 — — (1,138) — — — — — 34 (1,104) Operating expenses Disposals, wind-downs, acquisitions and related costs (1) (388) (46) (16) (18) — — (2) (31) (502) Restructuring and other related costs 3 (161) (350) (300) (27) (66) — (65) (31) (30) (1,030) Legal provisions 4 — (1,197) — — — — — — (235) (1,432) Impairment loss of interest in BoCom associate 2 — — (1,000) — — — — — — (1,000) 1 Includes recycling of cumulative fair value losses of $ 1.5 bn relating to the French retained portfolio of home and certain other loans following the completion of its sale to a consortium comprising Rothesay Life plc and CCF. 2    Includes a loss of $ 1.1 bn inclusive of reserves recycling as a result of the dilution of our shareholding in BoCom. We have also recognised a $ 1.0 bn impairment loss following an impairment test on the carrying value of the Group’s investment in BoCom in ‘Impairment loss of interest in BoCom associate’. See Note 18 on pages 345 to 348 . 3 Amounts include organisational simplification provision recognised in 2025. 4 Includes a $ 1.1 bn provision in connection with a claim brought by Herald Fund SPC in the Luxembourg District Court, relating to the Bernard L. Madoff Investment Securities LLC fraud in HSBC Bank plc and Holding companies and a $ 0.3 bn provision in connection with certain historical trading activities in HSBC Bank plc. Selected countries/territories results 2025 UK 1 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue 22,346 23,935 3,314 4,644 3,473 ECL (839) (1,478) (68) (200) (785) Operating expenses (16,064) (9,429) (3,236) (3,332) (2,048) Share of profit/(loss) in associates and joint ventures less impairment 81 (2) 1,077 — 10 Profit before tax 5,524 13,026 1,087 1,112 650 Loans and advances to customers (net) 357,246 273,396 45,585 52,178 25,252 Customer accounts 568,712 619,029 69,473 99,458 29,493 1 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). Selected countries/territories results: notable items 2025 UK Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue Disposals, wind-downs, acquisitions and related costs (211) — — — — Restructuring and other related costs 188 18 12 6 — Dilution loss of interest in BoCom associate — — (1,104) — — Operating expenses Disposals, wind-downs, acquisitions and related costs (41) (16) (5) (18) — Restructuring and other related costs (481) (179) (60) (72) (65) Legal provisions 1 (566) — — — — Impairment loss of interest in BoCom associate — — (1,000) — — 1 Includes $ 0.2 bn in relation to internal reinsurance arrangements relating to the Bernard L. Madoff Investment Securities LLC fraud provision and a $ 0.3 bn provision in connection with certain historical trading activities in HSBC Bank plc. HSBC Holdings plc Annual Report on Form 20-F 99 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Legal entity reported and constant currency results (continued) 2024 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 1 Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue –  Reported 12,752 9,557 34,053 2,504 4,264 462 3,573 3,303 (4,614) 65,854 –  Currency translation 405 296 13 1 — (27) (163) (380) 10 155 –  Constant currency 13,157 9,853 34,066 2,505 4,264 435 3,410 2,923 (4,604) 66,009 ECL –  Reported (405) (211) (1,532) (198) (81) (40) (864) (93) 10 (3,414) –  Currency translation (14) (6) (1) — 1 2 24 15 1 22 –  Constant currency (419) (217) (1,533) (198) (80) (38) (840) (78) 11 (3,392) Operating expenses –  Reported (5,135) (6,723) (14,329) (1,192) (3,351) (236) (1,994) (1,981) 1,898 (33,043) –  Currency translation (162) (258) (14) — — 14 84 240 (7) (103) –  Constant currency (5,297) (6,981) (14,343) (1,192) (3,351) (222) (1,910) (1,741) 1,891 (33,146) Share of profit/(loss) in associates and joint ventures –  Reported 1 22 2,278 — — — 15 600 (4) 2,912 –  Currency translation — 1 — — — — (1) 1 — 1 –  Constant currency 1 23 2,278 — — — 14 601 (4) 2,913 Profit before tax –  Reported 7,213 2,645 20,470 1,114 832 186 730 1,829 (2,710) 32,309 –  Currency translation 229 33 (2) 1 1 (11) (56) (124) 4 75 –  Constant currency 7,442 2,678 20,468 1,115 833 175 674 1,705 (2,706) 32,384 Loans and advances to customers (net) –  Reported 272,973 103,464 449,940 20,440 55,786 — 23,439 4,617 (1) 930,658 –  Currency translation 18,878 10,852 6,722 9 — — 3,607 51 1 40,120 –  Constant currency 291,851 114,316 456,662 20,449 55,786 — 27,046 4,668 — 970,778 Customer accounts –  Reported 340,233 297,785 845,284 34,808 99,278 — 27,525 9,999 43 1,654,955 –  Currency translation 23,529 26,782 9,773 28 — — 4,236 (62) (1) 64,285 –  Constant currency 363,762 324,567 855,057 34,836 99,278 — 31,761 9,937 42 1,719,240 1 Other trading entities includes the results of entities located in Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on the Group’s reported profit before tax of $ 1.4 bn , and constant currency profit before tax of $ 1.4 bn. Legal entity results: notable items (continued) 2024 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 — (148) — — — — — (23) (1,172) (1,343) Early redemption of legacy securities — — — — — — — — (237) (237) Operating expenses Disposals, acquisitions and related costs 8 (9) — — (29) (36) — (61) (72) (199) Restructuring and other related costs 2 3 15 (5) (2) (4) — — (9) (32) (34) 1 Includes a $ 1.0 bn loss on disposal and a $ 5.2 bn loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This was partly offset by a $ 4.8 bn gain on disposal of our banking business in Canada, inclusive of a $ 0.3 bn gain on the foreign exchange hedging of the sales proceeds, the recycling of $ 0.6 bn in foreign currency translation reserve losses and $ 0.4 bn of other reserves losses. 2 Amounts relate to organisational simplification provision recognised in 2024 and reversals of restructuring provisions recognised during 2022. HSBC Holdings plc Annual Report on Form 20-F 100 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Selected countries/territories results (continued) 2024 UK 1 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue –  Reported 21,017 22,038 4,078 4,216 3,573 –  Currency translation 704 18 3 — (163) –  Constant currency 21,721 22,056 4,081 4,216 3,410 ECL –  Reported (526) (1,273) (121) (81) (864) –  Currency translation (13) (1) — — 24 –  Constant currency (539) (1,274) (121) (81) (840) Operating expenses –  Reported (13,725) (8,886) (2,971) (3,350) (1,994) –  Currency translation (420) (6) (6) — 84 –  Constant currency (14,145) (8,892) (2,977) (3,350) (1,910) Share of profit/(loss) in associates and joint ventures –  Reported 24 8 2,241 — 15 –  Currency translation — 1 2 — (1) –  Constant currency 24 9 2,243 — 14 Profit before tax –  Reported 6,790 11,887 3,227 785 730 –  Currency translation 271 12 (1) — (56) –  Constant currency 7,061 11,899 3,226 785 674 Loans and advances to customers (net) –  Reported 313,925 272,152 44,551 55,786 23,439 –  Currency translation 21,709 (629) 1,956 — 3,607 –  Constant currency 335,634 271,523 46,507 55,786 27,046 Customer accounts –  Reported 524,251 575,141 63,169 99,278 27,525 –  Currency translation 36,254 (1,330) 2,773 — 4,236 –  Constant currency 560,505 573,811 65,942 99,278 31,761 1 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the ServCo Group. Selected countries/territories results: notable items (continued) 2024 UK Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 285 — — — — Early redemption of legacy securities (237) — — — — Operating expenses Disposals, acquisitions and related costs (50) (2) (7) (28) — Restructuring and other related costs (42) (4) — (4) — 1 Includes fair value movements on the foreign exchange hedging of the sale of our banking business in Canada, which is booked in HSBC Overseas Holdings (UK) Limited. HSBC Holdings plc Annual Report on Form 20-F 101 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Legal entity reported and constant currency results (continued) 2023 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 1 Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue –  Reported 13,405 9,289 31,899 2,425 3,863 1,966 3,313 4,729 (4,831) 66,058 –  Currency translation 775 287 (86) 2 — (67) (250) (1,800) 121 (1,018) –  Constant currency 14,180 9,576 31,813 2,427 3,863 1,899 3,063 2,929 (4,710) 65,040 ECL –  Reported (523) (212) (1,641) (90) (94) (46) (696) (279) 134 (3,447) –  Currency translation (30) (15) (2) (1) — 1 48 193 3 197 –  Constant currency (553) (227) (1,643) (91) (94) (45) (648) (86) 137 (3,250) Operating expenses –  Reported (4,612) (6,386) (13,395) (1,096) (3,251) (1,049) (1,826) (2,635) 2,180 (32,070) –  Currency translation (283) (330) 16 — — 36 139 910 (109) 379 –  Constant currency (4,895) (6,716) (13,379) (1,096) (3,251) (1,013) (1,687) (1,725) 2,071 (31,691) Share of profit/(loss) in associates and joint ventures –  Reported — (52) (696) — — — 14 544 (3) (193) –  Currency translation — — (102) — — — (1) — (1) (104) –  Constant currency — (52) (798) — — — 13 544 (4) (297) Profit before tax –  Reported 8,270 2,639 16,167 1,239 518 871 805 2,359 (2,520) 30,348 –  Currency translation 462 (58) (174) 1 — (30) (64) (697) 14 (546) –  Constant currency 8,732 2,581 15,993 1,240 518 841 741 1,662 (2,506) 29,802 Loans and advances to customers (net) –  Reported 270,208 95,750 455,315 20,072 54,829 — 26,410 15,951 — 938,535 –  Currency translation 13,974 5,357 186 7 — — (1,595) (758) — 17,171 –  Constant currency 284,182 101,107 455,501 20,079 54,829 — 24,815 15,193 — 955,706 Customer accounts –  Reported 339,611 274,733 801,430 31,341 99,607 — 29,423 35,326 176 1,611,647 –  Currency translation 17,563 14,913 1,855 17 — — (1,777) (3,218) — 29,353 –  Constant currency 357,174 289,646 803,285 31,358 99,607 — 27,646 32,108 176 1,641,000 1 Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on the Group’s reported profit before tax of $ 1.3 bn and constant currency profit before tax of $ 1.1 bn. Legal entity results: notable items (continued) 2023 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1,2,3 1,591 (14) — — — — — — (279) 1,298 Fair value movements on financial instruments 4 — — — — — — — — 14 14 Restructuring and other related costs — 361 — — — — — — (361) — Disposal losses on Markets Treasury repositioning (145) (94) (473) (20) (246) — — — 1 (977) Operating expenses Disposals, acquisitions and related costs (45) (111) — — (11) (115) — — (39) (321) Restructuring and other related costs 5 20 30 10 2 10 — 6 2 56 136 Impairment loss of interest in BoCom associate 6 — — (3,000) — — — — — — (3,000) 1  Includes the impact of the sale of our retail banking operations in France. 2  Includes the gain of $ 1.6 bn recognised in respect of the acquisition of SVB UK. 3  Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 4  Fair value movements on non-qualifying hedges in HSBC Holdings. 5  Balances relate to reversals of restructuring provisions recognised during 2022. 6  Includes an impairment loss of $ 3.0 bn recognised in respect of the Group’s investment in BoCom. HSBC Holdings plc Annual Report on Form 20-F 102 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Selected countries/territories results (continued) 2023 UK 1 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue –  Reported 19,092 20,611 3,923 3,796 3,313 –  Currency translation 1,310 86 (59) — (250) –  Constant currency 20,402 20,697 3,864 3,796 3,063 ECL –  Reported (594) (1,529) (93) (94) (696) –  Currency translation (35) (5) (2) — 48 –  Constant currency (629) (1,534) (95) (94) (648) Operating expenses –  Reported (12,485) (8,244) (2,713) (3,251) (1,826) –  Currency translation (726) (33) 37 — 139 –  Constant currency (13,211) (8,277) (2,676) (3,251) (1,687) Share of profit/(loss) in associates and joint ventures –  Reported (53) 30 (746) — 14 –  Currency translation 1 1 (102) — (1) –  Constant currency (52) 31 (848) — 13 Profit before tax –  Reported 5,960 10,868 371 451 805 –  Currency translation 550 49 (126) — (64) –  Constant currency 6,510 10,917 245 451 741 Loans and advances to customers (net) –  Reported 309,262 279,551 44,275 54,829 26,410 –  Currency translation 15,994 1,013 685 — (1,595) –  Constant currency 325,256 280,564 44,960 54,829 24,815 Customer accounts –  Reported 508,181 543,504 56,006 99,607 29,423 –  Currency translation 26,280 1,969 868 — (1,777) –  Constant currency 534,461 545,473 56,874 99,607 27,646 1 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the ServCo Group. Selected countries/territories results: notable items (continued) 2023 UK Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 1,272 — — — — Fair value movements on financial instruments 14 — — — — Disposal losses on Markets Treasury repositioning (239) (473) — (246) — Operating expenses Disposals, acquisitions and related costs (71) (1) (5) (11) — Restructuring and other related costs 75 9 4 10 6 Impairment loss of interest in BoCom associate — — (3,000) — — 1 Includes the impairment gain relating to the sale of our retail banking operations in France. Analysis by country/territory Profit/(loss) before tax by country/territory within business segments 2025 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m UK 1 (346) 6,687 (487) 75 (405) 5,524 –  of which: HSBC UK Bank plc (ring-fenced bank) — 7,044 161 135 68 7,408 –  of which: HSBC Bank plc (non-ring-fenced bank) — — 758 375 (145) 988 –  of which: Holdings and other (346) (357) (1,406) (435) (328) (2,872) France — — 116 (71) (1,566) (1,521) Germany — — 46 147 (57) 136 Hong Kong 9,891 — 1,770 1,948 (583) 13,026 Australia — — 519 159 (14) 664 India — 12 1,500 88 266 1,866 Indonesia — — 172 3 (1) 174 Mainland China 2 5 — 888 98 96 1,087 Malaysia 1 — 367 168 (6) 530 Singapore 2 — 967 598 (29) 1,538 HSBC Holdings plc Annual Report on Form 20-F 103 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Profit/(loss) before tax by country/territory within business segments (continued) 2025 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Taiwan — — 277 144 (10) 411 Egypt — 1 453 100 (5) 549 UAE — — 547 283 (51) 779 Saudi Arabia 3 — — 97 — 665 762 US — — 1,165 152 (205) 1,112 Canada — — — — 6 6 Mexico — — 497 195 (42) 650 Other 23 5 2,492 280 (186) 2,614 Year ended 31 Dec 2025 9,576 6,705 11,386 4,367 (2,127) 29,907 2024 $m $m $m $m $m $m UK 1 (288) 6,605 (457) 85 845 6,790 –  of which: HSBC UK Bank plc (ring-fenced bank) — 6,889 146 106 72 7,213 –  of which: HSBC Bank plc (non-ring-fenced bank) — — 754 534 (359) 929 –  of which: Holdings and other (288) (284) (1,357) (555) 1,132 (1,352) France — — 322 61 (153) 230 Germany — — 182 27 5 214 Hong Kong 9,377 — 1,373 1,619 (482) 11,887 Australia — — 477 141 (9) 609 India — — 1,323 96 269 1,688 Indonesia — — 219 7 (5) 221 Mainland China 2 9 — 891 (154) 2,481 3,227 Malaysia — — 374 143 (3) 514 Singapore 1 — 823 572 (21) 1,375 Taiwan — — 293 113 (8) 398 Egypt — — 501 122 (16) 607 UAE — — 583 371 (83) 871 Saudi Arabia 3 — — 112 — 596 708 US — — 909 74 (198) 785 Canada 4 — — 153 70 4,503 4,726 Mexico — — 542 185 3 730 Other 5 22 — 2,787 440 (6,520) (3,271) Year ended 31 Dec 2024 9,121 6,605 11,407 3,972 1,204 32,309 2023 $m $m $m $m $m $m UK 1 (346) 7,623 (1,011) (106) (200) 5,960 –  of which: HSBC UK Bank plc (ring-fenced bank) — 7,922 144 114 90 8,270 –  of which: HSBC Bank plc (non-ring fenced bank) — — 416 396 177 989 –  of which: Holdings and other (346) (299) (1,571) (616) (467) (3,299) France — — 364 (36) 10 338 Germany — — 273 43 4 320 Hong Kong 8,760 — 1,150 1,262 (304) 10,868 Australia — — 403 178 (15) 566 India — — 1,171 57 289 1,517 Indonesia — — 191 24 (7) 208 Mainland China 2 31 — 976 (96) (540) 371 Malaysia — — 377 111 (21) 467 Singapore — — 879 234 (31) 1,082 Taiwan — — 270 99 (7) 362 Egypt — — 401 141 (11) 531 UAE — — 589 387 (83) 893 Saudi Arabia 3 — — 118 — 539 657 US — — 624 225 (398) 451 Canada — — 681 293 (96) 878 Mexico — — 520 316 (31) 805 Other 44 — 3,179 349 502 4,074 Year ended 31 Dec 2023 8,489 7,623 11,155 3,481 (400) 30,348 1 UK includes results from the ultimate holding company, HSBC Holdings plc, and the ServCo Group. 2 Includes our share of the profits of our associate, BoCom. Amounts in 2025 include a $1.1bn loss on dilution of our shareholding in BoCom and a $1.0bn impairment loss on Group’s investment in BoCom. See Note 18 on pages 345 to 348 . Amounts in 2023 include an impairment loss of $3.0bn recognised in respect of the Group’s investment in BoCom. 3 Includes the results of HSBC Saudi Arabia and our share of the profits of our associate, Saudi Awwal Bank. 4 Corporate Centre in 2024 includes a gain on the sale of our banking business in Canada excluding the fair value movements on the foreign exchange hedging of the sale which is booked in HSBC Overseas Holdings (UK) Limited. 5 Corporate Centre in 2024 includes a loss of $6.2bn relating to the sale of our business in Argentina and inter-company debt eliminations of $0.3bn. HSBC Holdings plc Annual Report on Form 20-F 104 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities The following commentary compares business segment financial performance on a constant currency basis for the year ended 31 December 2024 with 31 December 2023, represented based on our reportable segments under IFRS 8 'Operating Segments' effective from 1 January 2025. Ñ For business segment performance commentary for the year ended 31 December 2025 compared with 31 December 2024, see pages 19 to 27 . Hong Kong Business 2024 compared with 2023 Financial performance (on a constant currency basis) Profit before tax of $9.1bn was $0.6bn or 7% higher than in 2023 on a constant currency basis. Revenue of $15.0bn was $0.5bn or 4% higher on a constant currency basis. Banking NII of $12.0bn fell $0.1bn or 1% . This was due to the impact of lower margins in 2024 relative to 2023 but partly offset by deposit balance growth. Fee and other income of $3.1bn was up $0.3bn or 9% . – In Wealth, investment distribution revenue grew by $0.4bn or 31% driven by higher sales of mutual funds, structured products and bonds due to our focus on investment in Wealth and improved market sentiment. – In Other, revenue decreased by $0.1bn due to lower revenue allocated from Markets Treasury. Notable items in 2023 include $0.4bn from the non-recurrence of disposal losses relating to Markets Treasury repositioning and risk management. ECL were $1.1bn , a decrease of $0.4bn compared with 2023 on a constant currency basis, reflecting a reduction in ECL in the commercial real estate sector in 2024. Operating expenses of $4.8bn were $0.3bn higher on a constant currency basis, reflecting continued investments in Wealth, higher spend and investment in technology, higher performance-related pay and inflationary impacts. These were partly offset by continued cost discipline. UK Business 2024 compared with 2023 Financial performance (on a constant currency basis) Profit before tax of $6.8bn was $1.2bn or (15)% lower than in 2023 on a constant currency basis. Revenue of $12.3bn was $1.1bn or (8)% lower on a constant currency basis. Banking NII of $10.4bn increased by $0.5bn or 4.6% despite two base rate cut in 2024. The increase reflected balance sheet growth, the full year impact of our acquisition of SVB UK, and benefit from our structural hedges. These increases were partly offset by mortgage pricing pressures, as well as a change in deposit mix towards interest- bearing deposit accounts. Fee and other income of $2.0bn was broadly stable. Notable items in 2023 include the non-recurrence of a $1.7bn gain recognised on the acquisition of SVB UK which was partly offset by the non-recurrence of $0.1bn disposal losses relating to Markets Treasury repositioning and risk management. ECL were $0.4bn , a decrease of $0.1bn compared with 2023 on a constant currency basis, reflecting lower stage 3 charges combined with improved forward economic outlook in 2024. Operating expenses of $5.1bn were $0.3bn higher on a constant currency basis. This includes the Bank of England levy introduced in 2024. The increase also reflects incremental costs in IVB following the acquisition of SVB, higher spend and investment in technology, higher performance-related pay and inflationary impacts. These were partly offset by continued cost discipline. Corporate and Institutional Banking 2024 compared with 2023 Financial performance (on a constant currency basis) Profit before tax of $11.3bn was $0.8bn or 8% higher than in 2023 on a constant currency basis. Revenue of $26.8bn was $2.0bn or 8% higher on a constant currency basis. Banking NII of $14.5bn was up $1.1bn or 8% . This was largely driven by the hyperinflationary impacts in Argentina along with higher allocated revenue from Markets Treasury. Fee and other income of $12.3bn was up $0.6bn or 5% . – In Debt and Equity Markets, fee and other income rose by $0.6bn or 38.3% . In Equities, fee and other income increased amid improved market sentiment, which drove higher client demand for wealth products, as well as higher levels of volatility in 2H24. In Debt Markets the growth reflected client demand for financing products and increased volumes, primarily from emerging markets credit, – In Investment Banking, fee and other income increased by $0.1bn or 11% , due to higher advisory and financing activity, supported by the recovery in global capital markets. – In Wholesale Transaction Banking, fee and other income fell by $0.1bn or 1% driven by a decrease in Foreign Exchange as client activity remained resilient given the market environment, and the impact of the disposal of our banking business in Canada. This was partly offset by an increase fee and other income in GPS reflecting business initiatives, repricing and transaction volume growth, and in GTS reflecting growth from guarantees. Notable items in 2023 included $0.4bn from the non-recurrence of disposal losses relating to Markets Treasury repositioning and risk management. ECL charges of $0.9bn were $0.4bn higher on a constant currency basis. ECLs in 2024 reflected higher CRE charges in Asia, and in the Middle East reflecting higher oil and gas and construction sector charges. Operating expenses of $14.6bn were $0.9bn or 6% higher on a constant currency basis. The increase reflected hyperinflationary impacts in Argentina, incremental costs following the acquisition of SVB UK, higher spend and investment in technology, and inflationary impacts. These increases were in part mitigated by continued cost discipline and lower costs following the disposal of our banking business in Canada. International Wealth and Premier Banking 2024 compared with 2023 Financial performance (on a constant currency basis) Profit before tax of $4.0bn was $0.8bn or 24% higher than in 2023 on a constant currency basis. HSBC Holdings plc Annual Report on Form 20-F 105 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Business segments and legal entities Revenue of $13.8bn was $ $1.4bn or 12% higher on a constant currency basis. Banking NII of $7.6bn was $0.4bn higher or 5% . This was driven by increase in revenue allocated from Markets Treasury and continued balance sheet growth, partly offset by narrower margins and our business disposals in Canada and France. Fee and other income of $6.2bn was up $0.8bn or 14% driven by strong growth across all products in Wealth. In Wealth, fee and other income of $5.6bn was up $1.0bn or 21% . – Insurance increased by $0.5bn , reflecting a higher contractual service margin (‘CSM’) release, largely due to continued growth in the CSM balance, as well as due to the impact of corrections to historical valuation estimates recognised in 2023. – Private Bank increased by $0.3bn , primarily driven by a strong performance in brokerage and trading in our entities in Asia. – Asset Management increased by $0.1bn , driven by an increase in assets under management due to inflows and positive market movements partly offset by the impact of our business disposal in Canada and France. Notable items in 2023 included $0.2bn impact of the sale of our retail banking operations in France, and $0.1bn from the non-recurrence of disposal losses relating to Markets Treasury repositioning and risk management. ECL were $1.0bn , an increase of $0.3bn compared with 2023 on a constant currency basis, primarily reflecting higher charges in our legal entity in Mexico, mainly in our unsecured portfolio, due to portfolio growth and unemployment trends. Operating expenses of $8.9bn were $0.4bn higher on a constant currency basis, reflecting continued investments in Wealth in Asia, higher spend and investment in technology, higher performance-related pay and from the impact of higher inflation. These were partly offset by continued cost discipline and the impact of the business disposals in France and Canada. Corporate Centre 2024 compared with 2023 Financial performance (on a constant currency basis) Profit before tax of $1.2bn was $1.6bn higher than in 2023 on a constant currency basis. Revenue of $2.0bn was $1.9bn lower on a constant currency basis, primarily due to the impact of notable items. In 2024, these included a loss on disposal of $1.0bn, as well as foreign currency and other reserve losses of $5.2bn, following the  disposal of our business in Argentina. They also included a loss of $0.1bn related to the recycling of reserves following the completion of the sale of our business in Russia, and a $0.2bn loss on the early redemption of legacy securities. These were partly offset by a $4.8bn gain on the sale of our banking business in Canada, inclusive of fair value gains on related hedging and recycling of related reserves. In 2023, notable items included fair value losses of $0.3bn relating to the hedging of the proceeds of the sale of our business in Canada. Banking NII in 2024 removes from NII the internal costs to funding trading and fair value net assets, predominately in CIB, of $11.4bn (2023: $8.7bn). Banking NII was a net expense of $0.7bn . This was $0.5bn higher than in 2023. The movement in Banking NII reflected the impact of the transfer of the retained French retail lending portfolio from IWPB. Fee and other income of $0.4bn was broadly stable. Operating expenses decreased by $0.4bn on a constant currency basis. This included a lower impact from levies, including in relation to the FDIC special assessment and the UK bank levy. Share of profit from associates and joint ventures of $2.9bn increased by $3.2bn on a constant currency basis, primarily reflecting the non- recurrence of an impairment charge of $3.0bn in 2023 relating to our investment in BoCom and an increase in share of profit from SAB. HSBC Holdings plc Annual Report on Form 20-F 106 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Alternative performance measures The following tables provide the calculation, definition and reconciliation of alternative performance measures to the closest reported performance measure. For further details and an explanation of their basis of preparation, including constant currency, notable items and material notable items, and the impact of strategic transactions and hyperinflationary accounting, see page 65 . Alternative performance measure Definition Reported revenue excluding notable items Reported revenue after excluding notable items reported under revenue Reported profit before tax excluding notable items Reported profit before tax after excluding notable items reported under revenue less notable items reported under operating expenses Constant currency revenue excluding notable items Reported revenue excluding notable items and the impact of foreign exchange translation Constant currency profit before tax excluding notable items Reported profit before tax excluding notable items and the impact of foreign exchange translation Constant currency revenue excluding notable items and strategic transactions Reported revenue excluding notable items, strategic transactions and the impact of foreign exchange translation Constant currency profit before tax excluding notable items and strategic transactions Reported profit before tax excluding notable items, strategic transactions and the impact of foreign exchange translation Return on average ordinary shareholders’ equity (‘RoE’) Profit attributable to the ordinary shareholders Average ordinary shareholders’ equity Return on average tangible equity (‘RoTE‘) Profit attributable to the ordinary shareholders, excluding impairment of goodwill and other intangible assets Average ordinary shareholders’ equity adjusted for goodwill and intangibles Return on average tangible equity (‘RoTE‘) excluding notable items Profit attributable to the ordinary shareholders, excluding impairment of goodwill and other intangible assets and notable items Average ordinary shareholders’ equity adjusted for goodwill and intangibles Net asset value per ordinary share Total ordinary shareholders’ equity 1 Basic number of ordinary shares in issue after deducting own shares held Tangible net asset value per ordinary share Tangible ordinary shareholders’ equity 2 Basic number of ordinary shares in issue after deducting own shares held Post-tax return on average total assets Profit after tax Average total assets Average total shareholders’ equity on average total assets Average total shareholders’ equity Average total assets Banking net interest income Banking net interest income adjusts our reported NII, primarily for the impact of funding trading and fair value activities reported in interest expense and to exclude third-party insurance NII 3 Expected credit losses and other credit impairment charges (‘ECL’) as % of average gross loans and advances to customers Annualised constant currency ECL Constant currency average gross loans and advances to customers Expected credit losses and other credit impairment charges (‘ECL’) as % of average gross loans and advances to customers, including held for sale Annualised constant currency ECL Constant currency average gross loans and advances to customers, including held for sale Target basis operating expenses Reported operating expenses excluding notable items, foreign exchange translation and other excluded items Basic earnings per share excluding material notable items and related impacts Profit attributable to ordinary shareholders excluding material notable items and related impacts Weighted average number of ordinary shares outstanding after deducting own shares held Multi-jurisdictional client revenue Total client revenue we generate from clients that hold a relationship with us that generates revenue in more than one market 1 Total ordinary shareholders’ equity is total shareholders‘ equity less non-cumulative preference shares and capital securities. 2 Tangible ordinary shareholders’ equity is total ordinary shareholders’ equity excluding goodwill and other intangible assets (net of deferred tax). 3 For details on the calculation of banking NII, see page 69 . HSBC Holdings plc Annual Report on Form 20-F 107 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Alternative performance measures Constant currency revenue and profit before tax excluding notable items and strategic transactions Year ended 2025 2024 2023 $m $m $m Revenue Reported 68,274 65,854 66,058 Notable items 2,746 1,580 (335) Reported revenue excluding notable items 71,020 67,434 65,723 Currency translation 1 157 (888) Constant currency revenue excluding notable items 71,020 67,591 64,835 Constant currency impact of strategic transactions (distorting impact of operating results between periods) 2 — (1,214) N/A Constant currency revenue excluding notable items and strategic transactions 71,020 66,377 N/A Profit before tax Reported 29,907 32,309 30,348 Notable items 6,710 1,813 2,850 Reported profit before tax excluding notable items 36,617 34,122 33,198 Currency translation 1 — 59 (357) Constant currency profit before tax excluding notable items 36,617 34,181 32,841 Constant currency impact of strategic transactions (distorting impact of operating results between periods) 2 — (413) N/A Constant currency profit before tax excluding notable items and strategic transactions 36,617 33,768 N/A 1 Currency translation on the reported balance excluding currency translation on notable items. 2 For more details of strategic transactions, please refer to page 92 . Return on average ordinary shareholders’ equity, return on average tangible equity and return on average tangible equity excluding notable items 2025 2024 2023 $m $m $m Profit after tax Profit attributable to the ordinary shareholders of the parent company 21,102 22,917 22,432 Impairment of goodwill and other intangible assets (net of tax) 144 118 43 Profit attributable to the ordinary shareholders, excluding goodwill and other intangible assets impairment 21,246 23,035 22,475 Impact of notable items 1 6,126 1,588 2,173 Profit attributable to the ordinary shareholders, excluding goodwill, other intangible assets impairment and notable items 27,372 24,623 24,648 Equity Average total shareholders’ equity 191,598 187,507 184,029 Effect of average preference shares and other equity instruments (19,987) (18,480) (18,794) Average ordinary shareholders’ equity 171,611 169,027 165,235 Effect of goodwill and other intangibles (net of deferred tax) (12,040) (11,626) (11,480) Average tangible equity 159,571 157,401 153,755 % % % Ratio Return on average ordinary shareholders’ equity 12.3 13.6 13.6 Return on average tangible equity 13.3 14.6 14.6 Return on average tangible equity excluding notable items 17.2 15.6 16.0 1 For details of notable items please refer to Supplementary financial information on page 88 . To better align our return on average tangible equity (‘RoTE’) excluding notable items measure with market practice, from our 2025 full-year results we no longer adjust the ‘average tangible equity‘ for the post-tax impact of notable items in each period. Comparatives have been re-presented. HSBC Holdings plc Annual Report on Form 20-F 108 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Alternative performance measures The following table details the adjustments made to reported results by business segment: Return on average tangible equity by business segment Year ended 31 Dec 2025 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Profit before tax 9,576 6,705 11,386 4,367 (2,127) 29,907 Tax expense (1,604) (1,953) (2,414) (987) 182 (6,776) Profit after tax 7,972 4,752 8,972 3,380 (1,945) 23,131 Less attributable to: preference shareholders, other equity holders, non-controlling interests (898) (221) (504) (193) (213) (2,029) Profit attributable to ordinary shareholders of the parent company 7,074 4,531 8,468 3,187 (2,158) 21,102 Other adjustments 339 210 (168) 64 (301) 144 Profit attributable to ordinary shareholders 7,413 4,741 8,300 3,251 (2,459) 21,246 Impact of notable items 9 45 717 226 5,129 6,126 Profit attributable to ordinary shareholders, excluding notable items 7,422 4,786 9,017 3,477 2,670 27,372 Average tangible shareholders’ equity 20,889 20,936 55,828 18,313 43,605 159,571 RoTE (%) (annualised) 35.5 22.6 14.9 17.8 (5.6) 13.3 RoTE (%), excluding notable items (annualised) 35.5 22.9 16.2 19.0 6.1 17.2 Year ended 31 Dec 2024 Profit before tax 9,121 6,605 11,407 3,972 1,204 32,309 Tax expense (1,219) (1,844) (2,734) (781) (732) (7,310) Profit after tax 7,902 4,761 8,673 3,191 472 24,999 Less attributable to: preference shareholders, other equity holders, non-controlling interests (944) (225) (487) (158) (268) (2,082) Profit attributable to ordinary shareholders of the parent company 6,958 4,536 8,186 3,033 204 22,917 Other adjustments 239 222 (427) (46) 130 118 Profit attributable to ordinary shareholders 7,197 4,758 7,759 2,987 334 23,035 Impact of notable items — (9) 18 (34) 1,613 1,588 Profit attributable to ordinary shareholders, excluding notable items 7,197 4,749 7,778 2,953 1,946 24,623 Average tangible shareholders’ equity 19,199 19,010 54,819 19,019 45,354 157,401 RoTE (%) (annualised) 37.5 25.0 14.2 15.7 0.7 14.6 RoTE (%), excluding notable items (annualised) 37.5 25.0 14.2 15.5 4.3 15.6 Net asset value and tangible net asset value per ordinary share 2025 2024 2023 $m $m $m Total shareholders’ equity 198,225 184,973 185,329 Preference shares and other equity instruments (20,716) (19,070) (17,719) Total ordinary shareholders’ equity 177,509 165,903 167,610 Goodwill and intangible assets (net of deferred tax) (12,356) (11,608) (11,900) Tangible ordinary shareholders’ equity 165,153 154,295 155,710 Basic number of $0.50 ordinary shares outstanding, after deducting own shares held 17,140 17,918 19,006 Value per share $ $ $ Net asset value per ordinary share 10.36 9.26 8.82 Tangible net asset value per ordinary share 9.64 8.61 8.19 Post-tax return and average total shareholders’ equity on average total assets 2025 2024 2023 $m $m $m Profit after tax 23,131 24,999 24,559 Average total shareholders’ equity 191,598 187,507 184,029 Average total assets 3,198,379 3,062,474 3,059,887 Ratio % % % Post-tax return on average total assets 0.7 0.8 0.8 Average total shareholders’ equity to average total assets 5.99 6.12 6.01 HSBC Holdings plc Annual Report on Form 20-F 109 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Alternative performance measures Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers and expected credit losses and other credit impairment charges as % of average gross loans and advances to customers, including held for sale 2025 2024 2023 $m $m $m Expected credit losses and other credit impairment charges (‘ECL’) (3,850) (3,414) (3,447) Currency translation — 22 197 Constant currency (3,850) (3,392) (3,250) Average gross loans and advances to customers 975,905 952,484 955,585 Currency translation 12,891 23,848 30,056 Constant currency 988,796 976,332 985,641 Average gross loans and advances to customers, including held for sale 977,814 968,785 1,020,992 Currency translation 12,959 23,308 29,489 Constant currency 990,773 992,093 1,050,481 Ratio % % % Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers (%) 0.39 0.35 0.33 Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers, including held for sale (%) 0.39 0.34 0.31 Target basis operating expenses Target basis operating expenses 2025 2024 $m $m Reported operating expenses 36,428 33,043 Notable items (2,964) (233) –  disposals, wind-downs, acquisitions and related costs (502) (199) –  restructuring and other related costs (1,030) (34) –  legal provisions 1,2 (1,432) — Currency translation 3 — 121 Excluding the constant currency impact of the sale of our business in Argentina and banking business in Canada 4 — (509) Excluding the impact of retranslating prior year costs of hyperinflationary economies at a constant currency foreign exchange rate — 56 Target basis operating expenses 33,464 32,478 1 During 2025, a $0.3bn provision was recognised in connection with certain historical trading activities in HSBC Bank plc. 2 During 2025, a $1.1bn provision was recognised in connection with a claim brought by Herald Fund SPC in the Luxembourg District Court, relating to the Bernard L. Madoff Investment Securities LLC fraud. 3 Currency translation on reported operating expenses, excluding currency translation on notable items. 4 This represents the business as usual costs which are not classified as notable items relating to our business in Argentina and banking business in Canada, on a constant currency basis. This does not include the disposal costs which relate to these transactions. HSBC Holdings plc Annual Report on Form 20-F 110 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Alternative performance measures Basic earnings per share excluding material notable items and related impacts Basic earnings per share excluding material notable items and related impacts 2025 2024 $m $m Profit attributable to shareholders of company 22,285 23,979 Coupon payable on capital securities classified as equity (1,183) (1,062) Profit attributable to ordinary shareholders of company 21,102 22,917 Dilution and impairment losses of interest in associate 1,956 — Legal provisions 2 1,110 — Impact of disposals, wind-downs, acquisitions and related costs 2,077 1,137 –  of which: impact of the sale of our banking business in Canada 1 1 (4,963) –  of which: impact of the sale of our business in Argentina 98 6,161 –  of which: other strategic transactions 3 1,978 (61) Profit attributable to ordinary shareholders of company excluding material notable items and related impacts 26,245 24,054 Number of shares Weighted average basic number of ordinary shares (millions) after deducting own shares held 17,427 18,357 Basic earnings per share ($) 1.21 1.25 Basic earnings per share excluding material notable items and related impacts ($) 1.51 1.31 Dividend per ordinary share (in respect of the period) ($) 4 0.75 0.87 Dividend payout ratio (%) (dividend per ordinary share divided by basic earnings per share excluding material notable items and related impacts) 50% 50% 1 Represents gain on sale of our banking business in Canada recognised on completion, inclusive of the earnings recognised by the banking business from 30 June 2022, the recycling of losses in foreign currency translation reserves and other reserves, and gain on the foreign exchange hedging of the sale proceeds. 2 During 2025, a $1.1bn provision was recognised in connection with a claim brought by Herald Fund SPC in the Luxembourg District Court, relating to the Bernard L. Madoff Investment Securities LLC fraud. 3 For the year ended 31 December 2025, this includes a loss of $1.5bn from the recycling of other reserves associated with the sale of retained home loan portfolio, after the sale of our retail banking operations in France. Additionally, it also includes the loss of $0.3bn recognised from the sale of our French and UK life insurance businesses. 4 In 2024, dividend per share includes the special dividend of $0.21 per ordinary share arising from the proceeds of the sale of our banking business in Canada to Royal Bank of Canada. Multi-jurisdictional client revenue Multi-jurisdictional client revenue is a financial metric we use to assess our ability to drive value from our international network. In our wholesale businesses, we identify a client as multi-jurisdictional if they hold a relationship with us that generates revenue in any market outside of where the primary relationship is managed. A client is defined as a master group (HSBC’s own client groupings) that includes both the parent and, where relevant, any subsidiaries. Multi-jurisdictional client revenue is a component of wholesale client revenue and represents the total client revenue we generate from multi-jurisdictional clients. Wholesale client revenue is derived by excluding from wholesale revenue the revenue we generate from Fixed Income, Equities, Commodities, and non-cash foreign exchange, as well as other non-client revenue. Wholesale multi-jurisdictional client revenue 2025 2024 $bn $bn Wholesale revenue 40.3 39.1 Allocated revenue and other 1 (2.2) (1.3) Fixed Income, Equities, Commodities, and non-Cash FX (6.4) (5.6) Wholesale client revenue 31.7 32.3 –  clients banked in multiple jurisdictions (‘multi-jurisdictional’) 20.0 20.0 –  domestic only clients 2 11.7 12.3 1 Including allocations of Market Treasury revenue, HSBC Holdings interest expense and hyperinflationary accounting adjustments, and interest earned on capital held in the business segment. 2 The fall in wholesale client revenue from domestic only clients primarily reflected the sale of our businesses in Canada and Argentina in 2024, as well as the impact of lower interest rates. HSBC Holdings plc Annual Report on Form 20-F 111 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Other information 111 Disclosure controls 111 Management’s assessment of internal controls over financial reporting 111 Regulation and supervision 116 Disclosures pursuant to Section 13(r) of the Securities Exchange Act Disclosure controls The Group CEO and Group CFO, with the assistance of other members of management, carried out an evaluation of the effectiveness of the design and operation of HSBC Holdings’ disclosure controls and procedures as at 31 December 2025. Based upon that evaluation, the Group CEO and Group CFO concluded that the disclosure controls and procedures at 31 December 2025 were effective to provide reasonable assurance that information required to be disclosed in the reports that the company files and submits under the US Securities Exchange Act of 1934, as amended, is recorded, processed, summarised and reported as and when required. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Management’s assessment of internal controls over financial reporting Management is responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting, and has completed an assessment of the effectiveness of the Group’s internal controls over financial reporting for the year ended 31 December 2025. In making the assessment, management used the framework for internal control evaluation contained in the Financial Reporting Council’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting (September 2014), as well as the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (‘COSO’) in ‘Internal Control-Integrated Framework (2013)’. There have been no changes in HSBC Holdings’ internal control over financial reporting during the year ended 31 December 2025 that have materially affected, or are reasonably likely to materially affect, HSBC Holdings’ internal control over financial reporting. Based on the assessment performed, management concluded that for the year ended 31 December 2025, the Group’s internal controls over financial reporting were effective. PricewaterhouseCoopers LLP, which has audited the consolidated financial statements of the Group for the year ended 31 December 2025, has also audited the effectiveness of the Group’s internal control over financial reporting as stated in their report on page 286 . Regulation and supervision The ordinary shares of HSBC Holdings are listed in London, Hong Kong, New York and Bermuda. As a result of the listing in London, HSBC Holdings is subject to the UK Listing Rules of the FCA. As a result of the listing in Hong Kong, HSBC Holdings is subject to The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (‘HKEX’). In the US, where the listing is through an American Depositary Receipt Programme, shares are traded in the form of American Depositary Shares (‘ADS’), which are registered with the US Securities and Exchange Commission (‘SEC’). As a consequence of its US listing, HSBC Holdings is also subject to the reporting and other requirements of: the US Securities Act of 1933, as amended; the Securities Exchange Act of 1934, as amended; and the New York Stock Exchange’s (‘NYSE’) Listed Company Manual, in each case as applied to foreign private issuers. In Bermuda, HSBC Holdings is subject to the listing rules of the Bermuda Stock Exchange applicable to companies with secondary listings. A statement of our compliance with the provisions of the UK Corporate Governance Code issued by the Financial Reporting Council and with the Hong Kong Corporate Governance Code set out in Appendix 14 to the Rules Governing the Listing of Securities on HKEX can be found in the ‘Corporate Governance Report: Statement of Compliance’ on page 284 . Our operations throughout the world are regulated and supervised globally by a large number of different regulatory authorities, central banks and other bodies in those jurisdictions in which we have offices, branches or subsidiaries. These authorities impose a variety of requirements and controls designed to provide financial stability, transparency in financial markets and a contribution to economic growth. The requirements to which our operations must adhere include those relating to capital and liquidity, disclosure standards and restrictions on certain types of products or transaction structures, recovery and resolution, governance standards, conduct of business and financial crime. The UK's Prudential Regulation Authority (‘PRA’) is the HSBC Group’s consolidated lead regulator. HSBC Holdings is approved by, and directly responsible to the PRA for ensuring the HSBC Group meets consolidated prudential requirements. The Group‘s other lead UK regulator, the FCA, supervises 11 of HSBC’s entities in the UK, including six where the PRA is responsible for those entities‘ prudential supervision. The FCA maintains global oversight of the Group’s management of financial crime risk in the exercise of its wider powers under the Financial Services and Markets Act 2000, and through the exercise of direct supervisory powers over HSBC Holdings. In addition, and as required under relevant local laws, each operating bank, finance company and insurance operation within HSBC is regulated by relevant local regulatory authorities. UK regulation and supervision The UK‘s financial services regulatory structure is chiefly comprised of three regulatory bodies: the Bank of England ('BoE'); the PRA; and the FCA. The BoE is responsible for macro-prudential supervision, focusing on systemic risks that may affect the UK’s financial stability. This is largely affected through the Financial Policy Committee, a statutory body. The BoE conducts micro-prudential regulation and supervision of financial services firms through the PRA (also a statutory body), and in addition to its wider role as the UK’s central bank, the BoE is the UK resolution authority responsible for taking action to manage the failure of certain types of financial institutions in the UK, if necessary. The latter involves a set of responsibilities and powers that apply outside of an actual bank failure and relate to general resolution planning, including an assessment of any barriers to the resolution of banks, the exercise of powers to require the removal of impediments to resolvability and the setting of minimum requirements for own funds and eligible liabilities (‘MREL‘), through the Banking Act and the Bank Recovery and Resolution (Amendment) Regulations 2025. These include own funds and liabilities that can be written down or converted into equity capital to absorb losses or recapitalise a bank in the event of its failure. These requirements are based on the resolution strategy for the Group, as agreed by the BoE in consultation with our local regulators. The PRA and the FCA are micro-prudential supervisors. The Group’s banking subsidiaries in the UK, such as HSBC Bank plc and HSBC UK, are ‘dual-regulated’ firms, subject to prudential regulation by the PRA and to conduct regulation by the FCA. Other (generally smaller, non- bank) UK-based subsidiaries are ‘solo regulated’ by the FCA (i.e. the FCA is responsible for both prudential and conduct regulation of those subsidiaries). HSBC Group is subject to consolidated supervision by the PRA. HSBC Holdings plc Annual Report on Form 20-F 112 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Other information UK banking and financial services institutions are subject to numerous laws and regulations, plus related regulatory rules, guidance and expectations. The primary UK statute in this context is the Financial Services and Markets Act 2000, as amended and supplemented by subsequent legislation and statutory instruments, in addition to EU financial services legislation that has been assimilated into UK law pursuant to the European Union (Withdrawal) Act 2018, as amended (‘EUWA’). In 2023, the Financial Services and Markets Act 2023 (‘FSMA 2023’) was passed creating a new set of regulatory frameworks, providing powers to HM Treasury and the UK’s financial services regulators to revoke and replace EU ’assimilated’ law and to establish new objectives, and accountability frameworks. The PRA and FCA are together responsible for authorising and supervising all our operating businesses in the UK that require authorisation under the Financial Services and Markets Act 2000. These include deposit-taking, retail banking, consumer credit, life and general insurance, pensions, investments, mortgages, custody and share-dealing businesses, and treasury and capital markets activity. The FCA is also responsible for promoting effective competition in the interests of consumers, and an independent subsidiary of the FCA, the Payment Systems Regulator, is the economic regulator of payment systems in the UK. Additionally, the Competition and Markets Authority (CMA) is responsible for promoting competitive markets in the UK. It can investigate aspects of the financial services sector where HSBC operates, and take action against firms where it sees fit. The CMA and FCA have established a Memorandum of Understanding for regulatory coordination between the authorities. The PRA and FCA set the minimum standards for authorising banks and financial institutions engaged in regulated activities. In the UK, both regulators may object—on prudential grounds—to any individual or entity seeking to acquire, or holding, 10% or more of the voting rights or shares in a regulated institution or its parent. The PRA supervises HSBC on a consolidated basis, receiving capital adequacy information and establishing group-wide requirements. It also conducts stress tests across HSBC’s UK entities and the broader Group. Meanwhile, each banking subsidiary within the Group is overseen by its respective local regulator, which sets and monitors its capital adequacy standards. The Group complies with capital requirements under the UK Capital Requirements Legislative Package, which includes on-shored EU Regulation No. 575/2013 (as amended), the PRA Rulebook, and UK law implementing the Capital Requirements Directive. The UK introduced the initial set of Basel 3.1 reforms in January 2022, targeting risk-weighted assets (‘RWAs’) for counterparty risk, equity investments in funds and market risk, and the leverage ratio. The PRA subsequently released two near-final rule packages for the second tranche: the first in December 2023, covering market risk, credit valuation adjustment, and operational risk; and the second in September 2024, addressing credit risk, the output floor and requirements for reporting and disclosures. Additionally, the PRA also published the first of two proposals to modify the Pillar 2A capital framework and capital communications. The PRA initially planned to implement the second tranche of Basel 3.1 on 1 January 2026, with a four-year phase-in for the output floor. In January 2025, this was deferred to 1 January 2027 to align with US timelines, and the output floor phase-in was reduced to three years. Following the UK Government’s announcement of its 10-year Financial Services Growth and Competitiveness Strategy in July 2025, the 1 January 2027 implementation date was confirmed for credit risk, operational risk, credit valuation adjustment, and non-modelled market risk. A further one-year extension was proposed for the internal model approach to market risk, moving its implementation to 1 January 2028. The Group is also subject to liquidity requirements, namely the Liquidity Coverage Ratio (‘LCR’) and the Net Stable Funding Ratio (‘NSFR’) as set out in the Liquidity Coverage Ratio (CRR) and Liquidity (CRR) Parts of the PRA Rulebook respectively. The PRA and FCA monitor authorised institutions through ongoing supervision and the review of routine and ad hoc reports relating to financial, prudential, conduct of business and financial crime matters. They may also obtain independent reports from a Skilled Person on the adequacy of procedures and systems covering internal controls and governing records and accounting. The PRA meets the Group’s senior executives regularly to discuss our adherence to its prudential requirements. In addition, both the PRA and FCA regularly discuss with relevant management fundamental matters relating to our business in the UK and internationally, including areas such as strategic and operating plans, risk control, loan portfolio composition, organisational changes, succession planning and recovery and resolution arrangements. Hong Kong regulation and supervision The Banking Ordinance provides the legal framework for banking supervision in Hong Kong. Section 7(1) of the Ordinance provides that the principal function of the Hong Kong Monetary Authority (‘HKMA’) is to ‘promote the general stability and effective working of the banking system’. The HKMA seeks to establish a regulatory framework in line with international standards, in particular those issued by the Basel Committee on Banking Supervision (‘Basel‘) and the Financial Stability Board (‘FSB’). The objective is to maintain a prudential supervisory system that underpins the general stability and effective working of the banking system, while at the same time providing sufficient flexibility for authorised institutions to take commercial decisions. Under the Banking Ordinance, the HKMA is the licensing authority responsible for the authorisation, suspension, and revocation of authorised institutions. To provide checks and balances, the HKMA is required under the Ordinance to consult with the Financial Secretary on important authorisation decisions, such as suspension and involuntary revocation. The Hongkong and Shanghai Banking Corporation Limited and its overseas branches and subsidiaries are licensed under the Banking Ordinance and hence subject to the supervision, regulation, and examination of the HKMA. The HKMA follows international practices as recommended by Basel to supervise authorised institutions. Under the Banking Ordinance, the HKMA imposes capital requirements on authorised institutions through the Banking (Capital) Rules, liquidity requirements through the Banking (Liquidity) Rules and large exposure limits through the Banking (Exposure Limits) Rules. These rules take into account the latest standards set by Basel. In December 2023, the HKMA published final rules for the implementation of the Basel 3.1 standards, which became effective on 1 January 2025. The Banking Ordinance empowers the HKMA to collect prudential data from authorised institutions on a routine or ad hoc basis and to require any holding company or subsidiary or sister company of an authorised institution to submit such information as may be required for the exercise of the HKMA’s functions under the Ordinance. The HKMA has the power to serve a notice of objection on persons if they are no longer deemed to be fit and proper to be controllers of the authorised institution, if they may otherwise threaten the interests of depositors or potential depositors, or if they have contravened any conditions specified by the HKMA. The HKMA may revoke authorisation in the event of an institution’s non-compliance with the provisions of the Banking Ordinance. These provisions require, among other things, the furnishing of accurate reports. To enhance the exchange of supervisory information and cooperation, the HKMA has entered into Memoranda of Understanding (’MoU’) or other formal arrangements with a number of banking supervisory authorities within and outside Hong Kong, including Singapore. The marketing of, dealing in, and provision of advice and asset management services in relation to securities and futures in Hong Kong are subject to the provisions of the Securities and Futures Ordinance of Hong Kong. Entities engaging in activities regulated by the Ordinance (including HSBC) are required to be licensed or registered with the Securities and Futures Commission (‘SFC’). The HKMA is the front-line regulator for banks involved in the securities and futures business. The HKMA and the SFC work very closely to ensure that there is an open market with a level playing field for all intermediaries in the securities industry of Hong Kong. Among other functions, the Securities and Futures Ordinance vests the SFC with powers to set and enforce market regulations, including investigating breaches of rules and market misconduct and taking appropriate enforcement action. HSBC Holdings plc Annual Report on Form 20-F 113 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Other information The SFC is responsible for licensing and supervising intermediaries conducting SFC-regulated activities, such as investment advisers, fund managers, brokers, trustees and custodians. Additionally, the SFC sets standards for the authorisation and regulation of investment products, and it reviews and authorises offering documents of retail investment products to be marketed to the public. To promote proper conduct and increase awareness of individual responsibility and accountability, the SFC introduced and implemented the Manager-In-Charge (‘MIC’) regime in Hong Kong. The MIC regime applies to senior individuals of licensed corporations responsible for managing core functions within financial services businesses supervised by the SFC. The regime required SFC-licensed corporations to review their organisational structure and the roles of senior management and their responsible officers in light of the SFC’s classification of core functions within licensed corporations and its guidelines on identifying MIC of core functions. The regime also imposes reporting requirements on SFC-licensed corporations. Similar to the SFC, the HKMA launched its Management Accountability Initiative, which is aimed at increasing the accountability of the senior management of Hong Kong registered institutions (‘RIs’) i.e. Hong Kong banks registered to carry on one or more regulated activities under the SFO. The Management Accountability Initiative clarified the HKMA’s expectations on the responsibility and accountability of RIs’ senior management, and enhanced its information-gathering on RIs’ regulated activities, while requiring RIs to better identify lines of responsibility and accountability for their regulated activities. To support capacity building and talent development, the HKMA has been working with the banking industry and relevant professional bodies to implement an industry-wide enhanced competency framework for banking practitioners. Currently, the enhanced competency framework for banking practitioners covers ten professional work streams: anti-money laundering and counter- financing of terrorism; cybersecurity; treasury management; retail wealth management; credit risk management; operational risk management; fintech; private wealth management; green and sustainable finance; and compliance. Relevant to the Group‘s insurance business in Hong Kong, the HKMA and the Hong Kong Insurance Authority (‘IA’) have signed an ‘MoU’ to enhance the cooperation, exchange of information and mutual assistance between the two authorities. This MoU sets out the framework between the HKMA and the IA for strengthening co- operation in respect of regulation and supervision of entities or financial groups in which the two authorities have a common regulatory interest. Pursuant to the statutory regulatory regime for insurance intermediaries under the Insurance Ordinance, the IA has delegated its inspection and investigation powers to the HKMA in relation to the insurance-related businesses of authorised institutions in Hong Kong, which aims to minimise possible regulatory overlap. Under the statutory regime for the regulation of Mandatory Provident Fund (‘MPF’) intermediaries, the Mandatory Provident Fund Schemes Authority is the lead regulator in respect of regulation of MPF intermediaries whereas the HKMA, the IA and the SFC are the front- line regulators of the MPF intermediaries. The Financial Institutions (Resolution) Ordinance (‘FIRO‘) established the legal basis for a cross-sector resolution regime in Hong Kong under which the HKMA is the resolution authority for banking sector entities, including all authorised institutions. The HKMA is also designated as the lead resolution authority for the cross-sectoral groups in Hong Kong that include banking sector entities within the scope of the FIRO. The HKMA’s function as a resolution authority is undertaken by the Resolution Office within the HKMA. The Resolution Office is operationally independent and has a direct reporting line to the chief executive of the HKMA. For resolution to be both feasible and credible, the HKMA requires authorised institutions to be organised and managed at all times in a way that facilitates the effective use of its resolution powers in the event of their failure or likely failure. Institutions must comply with HKMA resolution standards, which support resolution planning and address barriers to resolvability. Key requirements include regular submission of core data to the Resolution Office, maintaining adequate loss-absorbing capacity, ensuring liquidity and funding during resolution, operational continuity, contractual recognition of suspension of termination rights, and continuity of access to financial market infrastructure services. US regulation and supervision The Group is subject to federal and state supervision and regulation in the US. Banking laws and regulations of the Federal Reserve Board (the ‘FRB’), the Office of the Comptroller of the Currency (the ‘OCC’) and the Federal Deposit Insurance Corporation (the ‘FDIC’) (collectively, the ‘US banking regulators’) govern various aspects of our US business. HSBC Bank USA, N.A. (‘HSBC Bank USA’) is subject to direct supervision and regulation by the Consumer Financial Protection Bureau (‘CFPB’), which has the authority to examine and take enforcement action related to compliance with US federal consumer financial laws and regulations. HSBC Bank USA’s derivative activities are subject to supervision and regulation by the Securities and Exchange Commission (‘SEC’) and Commodity Futures Trading Commission (‘CFTC’). The Group’s US securities broker/dealer and investment banking operations are also subject to ongoing supervision and regulation by SEC, the Financial Industry Regulatory Authority and other government agencies and self-regulatory organisations under US federal and state securities laws. Similarly, the Group’s US commodity futures, commodity options and swaps-related and client clearing operations are subject to ongoing supervision and regulation by the CFTC, the National Futures Association and other self-regulatory organisations under US federal commodities laws. Furthermore, since we have substantial operations outside the US that conduct many of their day-to-day transactions with the US, HSBC entities’ operations outside the US are also subject to the extraterritorial effects of US regulation in many respects. HSBC Holdings and its US operations are subject to supervision, regulation and examination by the FRB because HSBC Holdings is a ‘bank holding company’ (‘BHC‘) under the US Bank Holding Company Act of 1956, as a result of its control of HSBC Bank USA and HSBC Trust Company (Delaware), N.A., Wilmington, Delaware (‘HTCD’). HSBC North America Holdings (‘HNAH‘) and HSBC USA Inc., are each a ‘bank holding company’ and HNAH is also an intermediate holding company (‘IHC’) regulated by the FRB. HSBC Holdings, HNAH and HSBC USA Inc. have elected to be financial holding companies pursuant to the provisions of the Gramm-Leach-Bliley Act and, accordingly, may affiliate with securities firms and insurance companies, and engage in other activities that are financial in nature or incidental or complementary to activities that are financial in nature. Under regulations implemented by the FRB, if any financial holding company, or any depository institution controlled by a financial holding company, ceases to meet certain capital or management standards, the FRB may impose corrective capital and/or managerial requirements on the financial holding company and place limitations on its ability to conduct the broader financial activities permissible for financial holding companies. In addition, the FRB may require divestiture of the holding company’s depository institutions, or its affiliates engaged in broader financial activities in reliance on the Gramm-Leach-Bliley Act if the deficiencies persist. The regulations also provide that if any depository institution controlled by a financial holding company fails to maintain a satisfactory rating under the Community Reinvestment Act of 1977, the FRB must prohibit the financial holding company and its subsidiaries from engaging in any additional activities other than those permissible for bank holding companies that are not financial holding companies. The two US banks, HSBC Bank USA and HTCD, are subject to regulation and examination primarily by the OCC. HSBC Bank USA and HTCD are subject to additional regulation and supervision by the FDIC, the CFPB and the FRB. Banking laws and regulations restrict many aspects of their operations and administration, including the establishment and maintenance of branch offices, capital and reserve requirements, deposits and borrowings, investment and lending activities, payment of dividends and numerous other matters. In 2019, the FRB and other US banking regulators introduced the Tailoring Rules, which refine the application of enhanced prudential standards for large US banking organisations and the US operations of certain foreign banks. Under these rules, institutions with $50 billion or more in total US assets are categorised into five groups (Categories I– HSBC Holdings plc Annual Report on Form 20-F 114 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Other information IV and ‘Other Firms’) according to factors such as asset size, cross- jurisdictional activity, short-term wholesale funding reliance, non-bank asset size, and off-balance sheet exposures. As of 1 January 2026, HNAH remains classified as a Category IV firm, subject to the specific enhanced prudential standards for this category. HSBC Bank USA is also required to comply with the regulatory capital and liquidity requirements applicable to Category IV firms. HNAH, HSBC USA Inc. (‘HUSI’) and HSBC Bank USA (‘HBUS’) are required to maintain minimum capital ratios (exclusive of any capital buffers), including a minimum Tier 1 leverage ratio of 4%, and a minimum total risk-based capital ratio of at least 8%. HNAH, HUSI and HBUS each calculate their risk-based capital requirements as Non- Advanced Approaches banks in accordance with the Basel III rules as adopted by US banking regulators. Over and above the minimum risk- based requirements, HNAH is subject to a Stress Capital Buffer (‘SCB’), which is floored at 2.5% and is recalibrated every other year unless HNAH opts to be subject to supervisory stress testing by the FRB during an ‘off year’. HUSI and HBUS continue to be subject to the static 2.5% capital conservation buffer (‘CCB‘). Compliance with the SCB/ CCB does not represent minimum requirements, but rather a necessary condition to allow capital distributions and discretionary bonus payments. In 2023, US banking regulators proposed changes to the regulatory capital rules applicable to US banks, BHCs and IHCs, including HNAH, HSBC USA Inc. and HSBC Bank USA. The 2023 proposal has not yet been finalised, and as of December 2025, a re-proposal of the rule changes, rather than a finalised version of the 2023 proposal, is expected to be issued, likely sometime in early 2026. Under FRB regulations, HNAH is subject to supervisory stress testing requirements (on an every other year basis, with the next FRB supervisory stress test expected to take place in 2026) that are designed to evaluate whether a BHC has sufficient capital on a total consolidated basis to absorb losses and support operations under severely adverse economic conditions. As part of the Comprehensive Capital Analysis and Review (‘CCAR‘), the FRB uses pro-forma capital positions and ratios under such stress scenarios to determine the size of the SCB for each CCAR participating firm. As part of CCAR, HNAH is required to submit an annual capital plan to the FRB on or before 5 April of each year. Category IV firms may opt into CCAR supervisory stress testing in an ‘off year’ in order to recalibrate their SCB, based on their most recent supervisory stress test. The SCB equals (i) a firm‘s projected decline in common equity tier 1 under the supervisory severely adverse stress testing scenario plus (ii) one year of planned common stock dividends. HNAH’s SCB requirement effective from 1 October 2025 is 5.1%, unchanged from 2024. HNAH already utilises an internal capital assessment approach that is analogous to the SCB and continues to review the composition of its capital structures and capital buffers in light of these developments. Under the Tailoring Rules, certain US banking organisations are subject to heightened liquidity and risk management requirements, including the US LCR and NSFR. Category IV firms whose weighted short term wholesale funding equals or exceeds $50bn, including HNAH, are subject to a less stringent US LCR and NSFR modified regulatory requirement. As a result, under the modified US LCR requirement, a LCR of 100% or higher reflects an unencumbered HQLA balance that is equal to or exceeds 70% of the firm’s liquidity needs (net cash outflows) for a 30-calendar day liquidity stress scenario. Under the modified US NSFR requirement as applied to HNAH, a NSFR of 100% or more reflects an available stable funding balance from liabilities and capital over the next 12 months that is equal to or exceeds 70% of the firm’s required stable funding amount for assets and off-balance sheet exposures. As a Category IV firm, HNAH is also subject to tailored liquidity risk management and liquidity buffer requirements, as well as liquidity stress testing on a quarterly basis. Section 165(d) of the Dodd-Frank Act requires designated financial institutions, including foreign bank holding companies such as HSBC Holdings plc (HSBC Group), to periodically submit a resolution plan to the FDIC and Federal Reserve. This plan outlines the strategy for the rapid and orderly resolution of their U.S. operations under the U.S. Bankruptcy Code in the event of material financial distress or failure. Following the transition of HSBC Group’s US Operations from Category III to Category IV, HSBC Holdings now qualifies for triennial reduced filings. The last reduced resolution plan was submitted in July 2025, with the next submission due 1 July, 2028. In July 2024, the FDIC finalised a rule requiring insured depository institutions (IDIs) with total assets of $100 billion or more to submit resolution plans (the ‘IDI plan’). The rule revises existing requirements concerning the content and timing of full resolution submissions and interim supplements, in the off years and enhancing the FDIC’s preparedness for potential distress or failure of large IDIs. It also strengthens the assessment of submission credibility, broadens expectations for engagement and capabilities testing, and clarifies the FDIC’s approach to review, feedback, and enforcement of compliance. HSBC Bank USA continues to be required to submit an IDI Plan every three years and would become subject to increased content requirements and an emphasis on capabilities testing and engagement with the FDIC. In April 2025, the FDIC waived several of the substantive requirements associated with all IDI Plan submissions due in July 2025, and, in December 2025, extended that waiver for certain IDI Plan submissions due in 2026, including HSBC Bank USA's full IDI Plan. In December 2025, the FDIC indicated that it intends to consider further changes to its resolution plan requirements in 2026. As a result, the future of these requirements is uncertain. HSBC Bank USA submitted an interim supplement on 1 July 2025, while its next full IDI Plan submission is due by 1 July 2026. In Q4 2024, the Office of the Comptroller of the Currency (OCC) issued guidelines establishing recovery planning standards for certain financial institutions, effective 1 January 2025. These requirements apply to insured national banks, Federal savings associations, and Federal branches with average total consolidated assets of $100 billion or more. HSBC Bank USA became subject to these standards, with compliance deadlines set for 1 January 2026 (overall recovery plan) and 1 January 2027 (scenario testing). HSBC Bank USA submitted its recovery plan in December 2025, in line with the Guideline. In October 2025, the OCC proposed rescinding the recovery planning guidelines; however, as no final rule has been issued, the requirement for the 1 January 2027 submission remains uncertain. The FRB has separately established a framework for recovery plans, although HSBC is not currently required to submit a recovery plan to US regulators unless specifically requested to do so. The FRB limits credit exposures to single counterparties for large BHCs and IHCs. HNAH is not directly subject to these single counterparty credit limits. Independent of HNAH‘s classification as a Category IV firm, HNAH, together with its subsidiaries, could become subject to limits on its exposures to unaffiliated counterparties if its parent, HSBC, cannot certify its compliance with a large exposure regime in the UK that is consistent with the Basel large exposure framework. Pursuant to Title VII of the Dodd-Frank (‘Title VII’), the SEC and CFTC have adopted extensive requirements to regulate over-the-counter (‘OTC’) derivatives, including, among other requirements, registration for swap dealers, major swap participants, security-based swap (‘SBS’) dealer and major SBS participants, mandatory clearing and trade execution of certain OTC derivatives, position limits for certain physical positions and economically equivalent swaps, real-time public and regulatory trade reporting, business conduct, enhanced documentation, supervision, recordkeeping, and financial reporting requirements. HSBC Bank USA and HSBC Bank plc are registered as swap dealers with the CFTC and registered as SBS dealers with the SEC. Because it is a non-US dealer, HSBC Bank plc is only subject to certain of the CFTC’s requirements in respect of swap transactions with US persons and certain persons guaranteed by or affiliated with US persons, and only subject to certain of the SEC’s requirements in respect of SBS transactions with US persons or which are arranged, negotiated, or executed by US personnel. HSBC Bank plc is also permitted to satisfy certain CFTC requirements and SEC requirements through ‘substituted compliance’ pursuant to relevant determinations and related relief issued by the SEC and the CFTC. Pursuant to Title VII, the US prudential regulators adopted margin requirements for non-cleared swaps and SBS for prudentially regulated swap dealers and SBS dealers, such as HSBC Bank USA and HSBC Bank plc. Subject to certain exceptions, the margin rules require HSBC Bank USA and HSBC Bank plc to collect and post initial and variation HSBC Holdings plc Annual Report on Form 20-F 115 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Other information margin for non-cleared swaps and SBS entered into with other swap dealers and certain financial end-users. The prudential regulators’ margin requirements, the parallel margin rules adopted by the CFTC and the SEC and certain non-US regulators, as well as other regulations of OTC derivatives under Title VII, have increased the costs associated with trading OTC derivatives and may adversely affect our business in such products. Dodd-Frank also expanded the extra-territorial jurisdiction of US courts over actions brought by the SEC or the US with respect to violations of the anti-fraud provisions in the Securities Act, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. In addition, regulations could affect the nature of the activities that our FDIC-insured depository institution subsidiaries may conduct, and may impose restrictions and limitations on the conduct of such activities. The implementation of the remaining Dodd-Frank provisions could result in additional costs, or limit or restrict the way we conduct our business in the US. EU Regulation and supervision HSBC Continental Europe (‘HBCE’), headquartered in France, is the parent company of all HSBC European subsidiaries. In accordance with provisions of the Capital Requirements Directive (‘CRD’), HBCE is an Intermediate Parent Undertaking (‘IPU’) for HSBC's European subgroup, centralising all coordination and requests to the unique Joint Supervisory Team (‘JST‘) and the unique Internal Resolution Team (‘IRT‘), made up respectively of the European Central Bank (‘ECB‘) and the national supervisory authorities on the one hand, and the Single Resolution Board (‘SRB‘) and the national resolution authorities on the other. In particular, HBCE will have to submit consolidated reports directly onto the portal of the French resolution authority (ACPR), as the host authority of HBCE. At the end of 2025, HBCE operated ten branches in the following jurisdictions: Belgium, Czech Republic, Germany, Ireland, Italy, Luxembourg, Netherlands, Poland, Spain and Sweden with two principal subsidiaries, HSBC Bank Malta plc (‘HBMT’) and HSBC Private Bank (Luxembourg) SA (‘PBLU’) following further transformation in 2022 and 2023 to support HBCE’s role as the Group’s EU IPU. The revised Capital Requirements Regulation (‘CRR3’) implementing EU’s Basel 3.1 package entered into force on 1 January 2025; however, the market risk framework was delayed. In June 2025, the European Commission (‘EC’) announced a further one-year delay to market risk implementation to 1 January 2027. The one-year delay aims to ensure that implementation in Europe is aligned to other major jurisdictions. Furthermore, the European Banking Authority (‘EBA’) continues to publish technical standards in line with its mandate to develop 140 technical standards. In June 2024, the EU adopted amendments to the Capital Requirements Directive (‘CRD6’) which EU member states are in the process of transposing. While CRR3 and most CRD6 provisions apply solely to HSBC’s European subsidiaries, CRD6 Article 21c introduces restrictions on cross-border services offered by non-EU banking entities to EU clients, with certain exemptions. Such cross-border restrictions will generally come into effect in January 2027, although precise effective dates will vary across EU member states. Global and regional prudential and other regulatory developments The Group operates under the oversight of numerous regulatory authorities and agencies. Regulatory changes are introduced both at the national level and by global organisations such as Basel, FSB and the G20. These global standards are subsequently adopted by individual countries. We are subject to regulatory stress testing across multiple jurisdictions, with increasing frequency and more detailed data requirements from supervisors. These include programmes from the BoE, FRB (see ‘US regulation and supervision’), OCC, EBA, ECB, HKMA, and other authorities. For further information, refer to ‘Stress testing’ on page 120 . Details on prudential changes are available in the ‘Regulatory developments’ section on page 7 of the Pillar 3 Disclosures as at 31 December 2025. Recovery and resolution The HSBC Group is subject to recovery and resolution requirements in many of the jurisdictions in which it operates. In Europe, the Bank Recovery and Resolution Directive (BRRD) establishes a framework for the recovery and resolution of EU credit institutions and investment firms. This framework applies to HSBC’s operating banks in the European region. In Hong Kong, the Banking Ordinance and Financial Institutions (Resolution) Ordinance sets out requirements for recovery and resolution planning. In general, each respective part of the HSBC Group is responsible for ensuring that it meets local recovery and resolution requirements where they exist, which are mainly applicable only to those regulated entities in a particular jurisdiction. The PRA and BoE, however, are the lead regulators from a recovery and resolution perspective respectively for the consolidated HSBC Group. HSBC maintains recovery plans designed to outline credible management actions that the HSBC Group could implement in the event of severe stress in order to restore its business to a stable and sustainable condition. The HSBC Group submits a Group recovery plan to the PRA, the latest plan being submitted to the PRA in June 2024. In addition, certain HSBC entities also submit local recovery plans to host regulators, where local recovery planning requirements are in place. HSBC’s recovery plans are frequently re-appraised to reflect HSBC’s Group structure as well as meet regulatory and internal feedback, including through regular stress testing and ‘fire drill’ simulations. In general terms, resolution refers to the exercise of statutory powers where a financial institution and/or its parent or other group company is deemed by its regulators to be failing, or likely to fail and it is not reasonably likely that any action taken would result in the institution recovering. In view of the HSBC Group’s corporate structure, which comprises a group of locally regulated operating banks, the preferred resolution strategy for the HSBC Group, as confirmed by its regulators, is a multiple point of entry (‘MPE’) bail-in strategy. This provides flexibility for HSBC to be resolved either (i) through a bail-in at the HSBC Holdings level, which enables the recapitalisation of operating bank subsidiaries in the HSBC Group (as required) while restructuring actions are undertaken, with the HSBC Group remaining together; or (ii) at a local subsidiary level pursuant to the application of statutory resolution powers by local resolution authorities. In the event of a resolution of the HSBC Group, it is anticipated that the MREL eligible debt issued externally by HSBC Holdings plc would be written down or converted to equity by the BoE using its statutory powers. This would enable subsidiaries of the HSBC Group to be recapitalised, as needed, to support the resolution objectives and maintain the provision of critical functions locally. Recapitalisation of operating bank subsidiaries could be achieved through the write-down, or conversion to equity, of internally issued MREL, Total Loss Absorbing Capacity (‘TLAC‘) or Loss Absorbing Capacity (‘LAC‘). It is anticipated that this approach to recapitalising the HSBC Group’s operating bank subsidiaries would allow the Group to stay together in order to ensure an effective stabilisation of the whole Group whilst also facilitating an orderly restructuring process post resolution. Any resolution of HSBC as a group would be coordinated by the BoE. Given the geographical footprint of the HSBC Group, resolution authorities have determined that HSBC has three resolution groups that together account for over 92% ($817bn) of the Group’s consolidated RWAs ($889bn): The Asia resolution group ('ARG'), the European resolution group ('ERG') and the US resolution group ('USRG'). As a result, HSBC is overseen by various regulators and resolution authorities including its lead global regulators and resolution authority, the BoE and the PRA and a number of host regulators and resolution authorities. Examples include the European SRB, the HKMA, FRB, FDIC and OCC. These host resolution authorities have statutory resolution group powers which could be applied to subsidiaries of the HSBC Group in their jurisdictions. The application of these local statutory resolution powers may result in one or more individual resolution authorities leading to a local resolution of the subsidiaries within their jurisdiction. This may or may not result in such subsidiaries ceasing to be part of the HSBC Group, depending on the drivers of failure and the resolution powers exercised by the relevant resolution authority. HSBC Holdings plc Annual Report on Form 20-F 116 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Other information HSBC considers that a bail-in at the HSBC Holdings plc level that enables subsidiaries in the HSBC Group to be recapitalised, (as required), and the subsequent implementation of restructuring actions while the HSBC Group remains together, is the strategy most likely to deliver the optimal resolution outcome for all of HSBC’s stakeholders. In July 2019, the BoE and PRA published final policies on the Resolvability Assessment Framework (‘RAF‘), which places the onus on firms to demonstrate their own resolvability and is designed to increase transparency and accountability for resolution planning. In order to be considered resolvable, HSBC must meet three outcomes: (i) have adequate resources in resolution; (ii) be able to continue business through resolution and restructuring; and (iii) be able to co- ordinate its resolution and communicate effectively with stakeholders. The RAF requires HSBC to prepare a report on the HSBC Group’s assessment of its resolvability, which must be submitted to the BoE on a periodic basis as requested by the BoE. HSBC Group submitted its second report to the BoE in October 2023. In August 2024, HSBC made its second public disclosure on its resolvability, which summarised the key findings from the second RAF Self-assessment. In line with the previous BoE RAF cycle, alongside HSBC's disclosure, the BoE also disclosed its own assessment of UK banks’ resolvability, including HSBC, against expectations set out in the RAF. Regular engagement with the BoE and PRA is maintained on Recovery and Resolution Planning topics. HSBC continues to engage with the BoE, PRA and its global regulators in other jurisdictions to help ensure that it meets current and future recovery and resolution requirements. Financial crime regulation HSBC is committed to preventing our products and services from being exploited for criminal activity. We do this because it is the right thing to do to protect our customers, shareholders, staff, the communities in which we operate and the integrity of the financial system on which we all rely. We recognise that financial institutions are inherently exposed to financial crime risk, which cannot be mitigated in its entirety. We employ a risk-based approach to managing our exposure by focusing our resources in a manner that is proportionate to the level of financial crime risk inherent in our business strategy and operating model. We remain committed to conducting our activities in accordance with all applicable financial crime laws and regulations in the markets in which we operate, the expectations of our regulators, measures associated with corporate criminal liability, and our own risk appetite. HSBC has an established financial crime risk management programme that is applicable across all global businesses and functions, and all countries and territories in which we operate. This enables the bank and its staff to detect, analyse, investigate, report and mitigate the risk of HSBC facilitating or being used to facilitate financial crime, including bribery and corruption, fraud, money laundering, terrorist financing and proliferation financing, tax evasion, sanctions and export control violations and evasion. HSBC could be subject to heightened commercial, operational, regulatory, reputational and market risks resulting from sanctions, trade restrictions and other regulatory changes related to foreign policy or national security concerns, as well as shifts in the geopolitical landscape. These risks may increase or evolve due to changing geopolitical dynamics, economic uncertainties, strategic competition in technology, and political instability and conflicts. HSBC has developed a comprehensive compliance framework to seek to manage sanctions and other financial crime risks. It is designed to identify and respond to changes in financial crime laws and regulations affecting the Group, to identify and address exposure that may arise from the activities of the Group, while fostering a strong compliance culture. This is supported through an extensive training programme aimed at equipping HSBC employees with the knowledge and skills necessary to maintain high standards of compliance. Technical and digital innovation in how we engage with customers and the services we provide to them continue at pace. Considering the dynamic and changing environment, including the increasing use of alternative (including digitised) payment methods and technologies, HSBC continues to shape its risk appetite and enhance its control framework to detect, deter and disrupt financial crime more effectively, increasing its use of intelligence-led technologies and artificial intelligence to monitor customers for unusual or suspicious activity. HSBC also maintains clear whistleblowing policies and processes, to enable individuals to report concerns confidentially. Disclosures pursuant to Section 13(r) of the Securities Exchange Act Section 13(r) of the Securities Exchange Act requires each issuer registered with the SEC to disclose in its annual or quarterly reports whether it or any of its affiliates have knowingly engaged in specified activities or transactions with persons or entities targeted by U.S. sanctions programmes relating to Iran, terrorism, or the proliferation of weapons of mass destruction, even if those activities are not prohibited by U.S. law, are conducted outside the U.S. by non-U.S. affiliates in compliance with local laws and regulations, and are not material to the business of the issuer or any of its affiliates. To comply with this requirement, HSBC Holdings plc (together with its affiliates, “HSBC”) has requested relevant information from its affiliates globally. The following activities conducted by HSBC are disclosed in response to Section 13(r) and are not material to the business of HSBC: Legacy contractual obligations related to guarantees Between 1996 and 2007, we provided guarantees to a number of our non-Iranian customers in Europe and the Middle East for various business activities in Iran. In a number of cases, we issued counter indemnities involving Iranian banks as the Iranian beneficiaries of the guarantees required that they be backed directly by Iranian banks.  The Iranian banks to which we provided counter indemnities included Bank Tejarat, Bank Melli, and the Bank of Industry and Mine. There was no measurable gross revenue in 2025 under those guarantees and counter indemnities. We do not allocate direct costs to fees and commissions and, therefore, have not disclosed a separate net profit measure. We are seeking to cancel all relevant guarantees and counter indemnities, and do not currently intend to provide any new guarantees or counter indemnities involving Iran. No guarantees were cancelled in 2025, and approximately 14 remain outstanding . Other relationships with Iranian banks Activity related to U.S.-sanctioned Iranian banks not covered elsewhere in this disclosure includes the following: We act as the trustee and administrator for a pension scheme involving employees of a U.S.-sanctioned Iranian bank in Asia. Under the rules of this scheme, we accept contributions from the Iranian bank each month and allocate the funds into the pension accounts of the Iranian bank’s employees. We run and operate this pension scheme in accordance with applicable laws and regulations. Estimated gross revenue, which includes fees and/or commissions, generated by this pension scheme during 2025, was approximately $2,224. For the Iranian bank-related activity discussed above, we do not allocate direct costs to fees and commissions and, therefore, have not disclosed a separate net profit measure. We currently intend to continue to wind down the above activities, to the extent legally permissible, and not enter into any new such activity. Activity related to U.S. Executive Order 13224 We have a corporate customer in Asia that was designated under Executive Order 13224 in 2025. Immediately following the designation, and prior to the accounts being restricted, we processed two low-value local currency domestic payments for the customer. We had an individual customer in Europe that was designated under Executive Order 13224 in 2021. The relationship was exited in 2025 and, as part of the exit process, we wrote off a de minimis local currency balance owed by the customer. We had an individual customer in Latin America that was designated under Executive Order 13224 in 2025. Shortly following the designation and before the account was restricted, we processed three small local currency domestic payments for our customer. HSBC Holdings plc Annual Report on Form 20-F 117 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Other information We had an individual customer in the Middle East that was designated under Executive Order 13224 in 2021. The customer’s accounts were restricted at the time of designation and the relationship was exited during 2025. As part of the exit process, we returned the customer’s funds to the customer. During 2025, as part of the settlement of the estate of a deceased customer in the Middle East, we processed a local currency domestic payment from the deceased customer’s account to an individual designated under Executive Order 13224 who acted as representative for the deceased customer’s heirs. We have individual and corporate customers in the Middle East that, during 2025, made local currency cheque payments for the rental of property to a corporate entity designated under Executive Order 13224. We processed these cheques on behalf of our customers. During 2025, pursuant to general licences issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control, we processed a small number of low-value U.S. dollar payments to the account of a non-designated non-governmental organisation held at a financial institution designated under Executive Order 13224 and one U.S. dollar payment from an entity designated pursuant to Executive Order 13224 to a non-designated corporate customer of HSBC. For these activities, there was no measurable gross revenue or net profit to HSBC during 2025. Activity related to U.S. Executive Order 13382 We had a corporate customer in Asia that was designated under Executive Order 13382 in 2025. Immediately following the designation, and prior to the accounts being restricted, we processed two payments for the customer. The relationship was exited in 2025 and, as part of the exit process, we returned the customer’s funds to the customer. For this activity, there was no measurable gross revenue or net profit to HSBC during 2025. Other activity We have a non-Iranian insurance company customer in the Middle East that, during 2025, made local currency domestic payments for the reimbursement of medical treatment to a hospital located outside Iran that is owned by the Government of Iran. We processed these payments from our customer to the hospital. We have three customers in the Middle East that, during 2025, made local currency domestic payments for medical treatment to a hospital located outside Iran that is owned by the Government of Iran. We processed these payments from our customers to the hospital. We have three corporate customers in the Middle East that, during 2025, received local currency cheques from a hospital located outside Iran that is owned by the Government of Iran. We processed the cheques from the hospital to our customers. We have individual and corporate customers in the Middle East that, during 2025, received local currency cheques from an insurance company located outside Iran that is owned by the Government of Iran. We processed these cheques from the insurance company to our customers. We have individual and corporate customers in Europe that, during 2025, made local currency domestic payments to, or received such payments from, an Iranian embassy. Generally, these customers appear to receive consular or other services provided by the embassy or provide goods and services that support the conduct of the official business of the embassy. We processed these payments between our customers and the Iranian embassy. We have an individual customer in Europe that is employed by a bank located outside Iran that is owned by the Government of Iran. During 2025, we processed local currency salary payments received via a bank that is not owned by the Government of Iran to our customer. We are in the process of exiting the customer. During 2025, we processed two low value local currency payments to a pension fund in Europe from an account held at a non-designated financial institution by an insurance company located outside Iran that is owned by the Government of Iran. For these activities, there was no measurable gross revenue or net profit to HSBC during 2025. Frozen accounts and transactions We maintain several accounts that are frozen as a result of relevant sanctions programmes, and safekeeping boxes and other similar custodial relationships, for which no activity, except as licensed, authorised, or otherwise related to the maintenance of such accounts as consistent with applicable law, took place during 2025. There was no measurable gross revenue or net profit to HSBC during 2025 relating to these frozen accounts. HSBC Holdings plc Annual Report on Form 20-F 118 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk review Our risk review outlines our approach to risk management, how we identify and monitor top and emerging risks, and the actions we take to mitigate them. In addition, it explains our material banking risks, including how we manage capital. 119 Our approach to risk 121 Top and emerging risks 126 Risk factors 138 Our material banking risks 140 Credit risk 189 Treasury risk 200 Market risk 203 Climate risk 213 Resilience risk 213 Regulatory compliance risk 214 Financial crime risk 214 Model risk 215 Insurance manufacturing operations risk 4 HSBC Holdings plc Annual Report on Form 20-F 119 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Our approach to risk We recognise that the primary role of risk management is to help protect our customers, business, colleagues, shareholders and the communities that we serve, while ensuring we are able to support our strategy and provide sustainable growth. In addition, we recognise the importance of a strong culture, which refers to our shared attitudes, beliefs, values and standards that shape behaviours including those related to risk awareness, risk taking and risk management. All our people are responsible for the management of risk, with ultimate supervisory oversight residing with the Board. The implementation of our business strategy remains a key focus. As we deliver change initiatives, we seek to actively manage the execution risks. We also perform periodic risk assessments, including against strategies, to help ensure retention of key personnel for our continued safe operation. Our risk management framework We aim to use a comprehensive risk management approach across the organisation and across all risk types, underpinned by our culture and values. This is outlined in our Risk Management Framework (‘RMF’), including the key principles and practices that we employ in managing material risks, both financial and non-financial. The RMF sets out in a consistent way how we identify, assess and manage the risks that matter the most with respect to our ability to operate, grow, and meet external commitments. It translates our strategy, values and commitments into practical actions and risk-based decisions. Our Group Risk and Compliance function is responsible for the Group’s RMF. Independent from the business segments, including our sales and trading functions, it provides challenge, oversight and appropriate balance of risk and reward in decision-making. Its responsibility includes establishing global policy, monitoring risk profiles, and identifying and managing forward-looking risk. Our people are responsible for managing both financial and non- financial risk, including regulatory compliance and financial crime risks. They are required to manage the risks of the business and operational activities for which they are responsible. We maintain adequate oversight of our risks through our various specialist risk stewards and the collective accountability held by our chief risk officers (‘CROs’) and chief risk and compliance officers (‘CRCOs’). We seek to maintain a sound control environment and regularly test and monitor our controls, which aim to prevent risks from materialising, detect when they do, and recover and learn from issues in a timely manner within our risk appetite. Our risk appetite Our risk appetite defines the level and types of risk that we are willing to take to achieve our strategic objectives. The Board approves the Group’s risk appetite and reviews it regularly to help ensure it remains fit for purpose. Our enterprise-wide risk appetite is expressed holistically through various risk management mechanisms and activities, in both quantitative and qualitative terms and is formally articulated through our Risk Appetite Statement (‘RAS’). The Group’s risk appetite is established considering: – alignment with our strategy, purpose, values, external risk environment, reputational and customer needs; – compliance with applicable laws, regulations and regulatory priorities; – forward-looking insights into future risk exposure; – sufficiency of available capital, liquidity and balance sheet leverage to absorb the risks; – capacity and capabilities of people to manage the risk landscape; – functionality, capacity and resilience of available systems to manage the risk landscape; – effectiveness of the applicable control environment to mitigate risk; and – internally and externally disclosed commitments. Performance against the Group’s RAS is reported to the Group Risk Management Meeting to support targeted insight and discussion of breaches of risk appetite and any associated mitigating actions. This reporting helps risks to be promptly identified and mitigated and informs risk-adjusted remuneration to drive a strong risk culture. Each principal subsidiary and material operating entity is covered by a RAS, and their alignment with the Group’s RAS is monitored. Our r isk governance The Board has ultimate supervisory responsibility for the effective management of risk. The Group Chief Risk and Compliance Officer (‘GCRCO’), supported by members of the Group Risk Management Meeting, holds executive accountability for the ongoing monitoring, assessment and management of the risk environment and the effectiveness of the risk management framework. The GCRCO is also responsible for the oversight of reputational risk, with the support of the Group Reputational Risk Committee. Further details can be found under the ‘Reputational risk’ section of www.hsbc.com/who-we-are/esg-and-responsible-business/managing- risk. Day-to-day responsibility for risk management is delegated to senior managers with individual accountability for decision making. We use a defined executive risk governance structure to help enable appropriate oversight and accountability of risk, which facilitates reporting and escalation to the Group Risk Management Meeting. This structure is summarised in the following table. HSBC Holdings plc Annual Report on Form 20-F 120 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Our approach to risk Governance structure for the management of risk and compliance Authority Membership Responsibilities include: Group Risk Management Meeting GCRCO Group Chief Legal Officer Group CEO Group CFO All other Group Operating Committee members – Supporting the GCRCO in exercising Board-delegated risk management authority – Overseeing the implementation of risk appetite and the risk management framework – Forward-looking assessment of the risk environment, analysing possible risk impacts and taking appropriate action – Monitoring all categories of risk and determining appropriate mitigating action – Promoting a supportive Group culture in relation to risk management and conduct Group Risk and Compliance Leadership Meeting GCRCO CRCOs of HSBC’s business segments Regional CRCOs and CROs Heads of Global Risk and Compliance sub-functions – Supporting the GCRCO in providing strategic direction for the Group Risk and Compliance function, setting priorities and providing oversight – Overseeing a consistent approach to accountability for, and mitigation of, risk and compliance across the Group Global business/regional risk management meetings Global business/regional CRCOs and CROs Global business/regional CEOs Global business/regional CFOs Global business/regional heads of global functions – Supporting the GCRCO in exercising Board-delegated risk management authority – Forward-looking assessment of the risk environment – Implementation of risk appetite and the risk management framework – Monitoring all categories of risk and overseeing appropriate mitigating actions – Embedding a supportive culture in relation to risk management and controls Ñ The Board committees with responsibility for oversight of risk-related matters are set out on page 228 . Ñ Treasury risks, excluding pension and insurance risks, are the responsibility of the Group Finance Management Meeting and the Group Risk Committee. Global Treasury actively manages these risks, supported by the Holdings Asset and Liability Management Committee (‘ALCO’) and local ALCOs, overseen by Treasury Risk Management and Risk Management Meetings. Further details on treasury risk management are set out on page 189 . Our responsibilities All our people are responsible for identifying and managing risk within the scope of their roles. Roles are defined using the three lines of defence model, which takes into account our business and functional structures as described below. Three lines of defence To create a robust control environment to manage risks, we use an activity-based three lines of defence model. This model delineates management accountabilities and responsibilities for risk management and the control environment. The model underpins our approach to risk management by clarifying responsibility and encouraging collaboration, as well as enabling effective coordination of risk and control activities. The three lines of defence are summarised below: – The first line of defence owns the risks and is responsible for identifying, recording, reporting and managing these risks in line with risk appetite, including that the right controls and assessments are in place to mitigate them. – The second line of defence challenges the first line of defence on effective risk management, and provides advice, guidance and assurance of the first line of defence to help ensure it is managing risk effectively. – The third line of defence is our Global Internal Audit function, which provides independent assurance as to whether our risk management approach and processes are designed and operating effectively. Stress testing Our stress testing programme assesses potential financial risks to our business model, and forms part of our risk management and capital and liquidity planning. As well as undertaking regulatory-driven stress tests, we conduct our own internally defined stress tests to understand the nature of our potential vulnerabilities, quantify their impact, and develop plausible mitigating actions. The outcome of a stress test provides management with key insights into the impact of severely adverse events on the Group and provides an indication to regulators of the Group’s resilience to shocks and any consequences for financial stability. Our internal capital assessment uses a range of stress scenarios that explore systemic risks, as well as other potential events that are idiosyncratic to HSBC. During 2025, we completed a Group-wide internal stress test of the Group’s strategy and corporate plan. The stress scenario assessed the impact of the ongoing trade policy uncertainty, including tariffs and geopolitical conflicts which remain key risks for the global economy. In addition to the Group-wide stress testing scenarios, each principal subsidiary conducts regular macroeconomic and event-driven scenario analysis specific to its region. They also participate, as required, in the regulatory stress testing programmes of the jurisdictions in which they operate, including stress tests required by the Bank of England (‘BoE’) in the UK, the Federal Reserve Board (‘FRB’) in the US, and the Hong Kong Monetary Authority (‘HKMA’) in Hong Kong. We also conduct reverse stress tests each year at the Group level and, where required, at a subsidiary entity level to understand potential extreme conditions that would make our business model non-viable. Reverse stress testing identifies potential stresses and vulnerabilities we might face, and helps inform early warning triggers, management actions and contingency plans designed to mitigate risks. Ñ For further details of our stress testing and recovery and resolution planning, see ‘Stress testing and recovery and resolution planning’ on page 190 . Key developments in 2025 In 2025, we continued to manage risks related to macroeconomic and geopolitical uncertainties and develop risk management capabilities through the continued enhancement of our risk management framework. We work to maintain and build stronger relationships with regulators and other external stakeholders to support our business and customer objectives. We retained our focus on risk transformation and financial crime and continued to assess the Group’s operational resilience capability while prioritising the most significant enterprise risks. More specifically, we sought to enhance our risk management in the following areas: – We have been advancing our programme aimed at strengthening our global regulatory reporting processes and making them more sustainable, including enhancing data, consistency and controls. While this programme continues, there may be further impacts on some of our regulatory ratios as we implement recommended changes and continue to enhance our controls across the process. – We strengthened our control environment through the continued embedding of our Group Chief Control Oversight Office which established a centralised approach to controls oversight across the first line of defence business and process owners, including a consistent approach to control standards, aggregated reporting and testing. – We enhanced our technology and cybersecurity controls to help improve the resilience and security of our technology services in response to the heightened external threat environment. HSBC Holdings plc Annual Report on Form 20-F 121 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Our approach to risk – We responded to new innovations in the financial system, including growing adoption of digital assets and currencies, as well as the evolving use of AI through reviewing and enhancing controls across risk areas to help us and our customers safely benefit from innovation. – We continue to enhance our processes, framework and controls to improve the oversight of our third parties. We have strengthened our due diligence and monitoring capabilities, with respect to the financial stability of our third parties to better manage our supply chain and we continue to assess and seek to manage our operational resilience. – We have further enhanced the way we identify and manage HSBC Group climate-related risks, which have also been embedded across the wider organisation. This has been achieved through risk policy and guideline updates, including updates to our HSBC Group climate risk approach document, and further development of our risk metrics and assessments to help monitor and manage exposures across our organisation. We have also reviewed a number of climate models and have sought to enhance our internal climate scenario analysis capabilities. – We deployed advanced technology and analytics capabilities into new markets to improve our ability to identify suspicious activities and prevent financial crime. We will continue to evaluate technological solutions to improve our capabilities in the detection and prevention of financial crime. – We continued to promote our whistleblowing service, HSBC Confidential, ensuring it is embedded in our speak-up culture. Continual enhancement is being undertaken to help ensure optimal effectiveness of the service, while maintaining adherence to regulation and legislation. – We have refreshed our conduct approach to ensure it remains clear, accessible and aligned with how we work today, while maintaining the same strong standards and enhancing our capability to drive positive outcomes for our customers and protect the integrity of financial markets. Top and emerging risks We use a top and emerging risks process to provide a forward-looking view of issues with the potential to threaten our operations or the execution of our strategy over the medium to long term. We proactively assess the internal and external risk environment, and review the themes identified across our regions and business segments, for any risks that may require global escalation. We update our top and emerging risks as necessary. Our current top and emerging risks are as follows. Externally driven Geopolitical and macroeconomic risks Key economic and financial risks are monitored closely. The Group remains exposed to these risks through its operations, investments and business activity. The global economy proved resilient to trade policy changes and geopolitical shocks through 2025 and growth was stronger than expected. Economic activity was supported by a decline in policy interest rates and deficit spending across major economies. At the same time, oil prices remained broadly stable despite heightened geopolitical tensions over Venezuela and the Middle East. Asset prices also rose on account of strong corporate earnings and investor enthusiasm for technology stocks and investment in AI. A key source of ongoing uncertainty is the volatility of US trade and tariff policies. Changes to tariff rates, including sector-specific levies, may deter capital investment and consumer spending, disrupt supply chains and reduce global trade growth. Policy uncertainty and trade disruption may also deter businesses from hiring. During 2025, unemployment rose across many of our major markets, and there remains a risk of further increases if layoffs begin to increase more significantly, employment growth continues to be constrained by uncertainty, or if investment in AI starts to yield productivity gains that reduce demand for labour. A broader escalation of tariffs and a trade war remain a risk. Strategic competition between countries is reshaping trading relationships and increasing the focus on long-term economic and supply chain security, which could adversely affect the Group and our customers. Tariffs are a particular challenge to China and other export-led economies. While China has responded by diversifying trade to other markets, it faces cyclical and structural challenges in the short to medium term, including reviving the property sector. In contrast, the effect of tariffs on the UK has been smaller, given the less significant role of trade with the US. The UK benefited from securing an early trade agreement with the US on relatively preferential terms, however it now faces the possibility that the deal is replaced by alternative US tariffs on different terms. The disruption of key supply routes caused by geopolitical conflicts has continued to impact global supply chains. The Russia-Ukraine war and further conflict or military action, in the Middle East, Venezuela or elsewhere, could impact economic activity regionally or globally which, if continued for a prolonged period, could have a material adverse effect on the Group’s business, financial condition, results of operations, prospects, liquidity, capital position and credit ratings. The financial impact on the Group of geopolitical risks in Asia is heightened due to the region’s relatively high contribution to the Group’s profitability. The monetary policy outlook remains uncertain across major economies. During 2025, major central banks cut policy interest rates, but several, including the US Federal Reserve, have had to balance inflation – that has persisted above target – against weaker employment growth. The Group ’ s financial performance could be affected by changes to interest rate expectations. Policy interest rates could be reduced further if inflation continues to moderate. However, that trajectory could be disrupted if wage growth, tariffs or key commodity prices keep inflation higher for longer. The US dollar depreciated in 2025 driven by changing interest rates and tariff policy uncertainty. The decline marked the end of a long period of sustained appreciation against major currencies. Although the US dollar remains the primary trade invoicing and reserve asset currency, elevated volatility is expected to persist, reflecting concern over fiscal sustainability and an increasingly complex fiscal and monetary policy environment. Equity markets rose strongly during 2025, led by significant gains for the technology sector and AI company valuations in particular. While high asset prices may create a tailwind from positive wealth effects, current high valuations also raise the risk of a material fall in the markets if the expected gains to productivity fail to materialise. In addition, the Group remains exposed to the market risk and any potential impact on economic growth of an abrupt revaluation of asset prices. Fiscal policy and high levels of government debt are monitored closely. Debt levels in many of our major markets have continued to rise due to higher social welfare costs and increased expenditures on defence and climate transition. Rising government debt and high interest payments could adversely impact the fiscal capacity and debt sustainability of highly-indebted sovereign issuers. Emerging markets with substantial debt and weak fiscal positions may also face increased repayment costs, heightened refinancing risks, a greater likelihood of sovereign rating downgrades, and a higher tax burden. This could prove negative for short and long-term growth prospects. Uncertainty about future taxation could undermine confidence, business investment and consumer spending, which would be negative for the Group ’ s retail and corporate operations in various markets. Demographic shifts, including population ageing and migration patterns, may alter savings and investment behaviours and result in reduced demand for bank borrowing. HSBC Holdings plc Annual Report on Form 20-F 122 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Top and emerging risks We continue to closely monitor market conditions in the Hong Kong and mainland China commercial real estate (‘CRE’) markets. In Hong Kong, market sentiment and the economic outlook continue to show signs of improvement, supported by interest rate cuts, the positive wealth effect from a buoyant equities market and improving economic conditions. Nevertheless, recovery is likely to take time, with liquidity and valuation pressures expected to continue in the near term, particularly for mid-sized and sub-investment grade corporates. In mainland China, market fundamentals remain weak and refinancing risks continue. Ñ For further details of market conditions, see page 177 . Sanctions and restrictions on trade and investment are continually evolving in response to geopolitical events, and may adversely affect the Group, its customers and the markets in which the Group operates. These factors may result in increased legal, regulatory, reputational and market risks, and a more complex operating environment. HSBC actively monitors and responds to financial sanctions and restrictions on trade and investment. Global tensions over trade and technology are resulting in divergent regulatory standards and compliance regimes, presenting long-term strategic challenges for multinational businesses such as HSBC. As the geopolitical landscape evolves, compliance by multinational corporations with their legal or regulatory obligations or other initiatives in one jurisdiction may be seen as supporting the law or policy objectives of that jurisdiction over another, creating additional legal, regulatory, reputational and political risks for the Group. We maintain dialogue with our regulators in various jurisdictions on the impact of legal and regulatory obligations on our business and customers. While it is the Group‘s policy to comply with all applicable laws and regulations of all jurisdictions in which it operates, geopolitical tensions and potential ambiguities in the Group’s compliance obligations continue to present challenges and risks for the Group, and could have a material adverse impact on the Group’s strategy, business, customers, operations, financial results and reputation. Expanding data privacy, national security and cybersecurity laws in a number of markets could pose potential challenges to intra-group data sharing. These developments may affect our ability to manage financial crime risks across markets due to limitations on cross-border transfers of personal information. Provisioning against credit loss is conducted under the IFRS 9 ‘Financial Instruments’ (’IFRS 9’) calculations of ECL, which use forward-looking scenarios that incorporate the economic and financial risks detailed above. There remains uncertainty regarding the adequacy of our models in capturing credit losses under emerging risks which are not captured by the historical loss experience of our models, or to effectively distinguish risks for specific sectors and portfolios. The above risks could also have an impact on our customers, and we continue to closely monitor the potential impacts and offer support to our customers in line with regulatory, government and wider stakeholder expectations. Ñ For further details of our Central and other scenarios, see ‘Measurement uncertainty and sensitivity analysis of ECL estimates’ on page 148 . Mitigating actions – We closely monitor geopolitical and economic developments in key markets and sectors. We may undertake scenario analysis, including stress testing portfolios of particular concern to identify sensitivity to loss under a range of scenarios. This helps us to take actions to manage our portfolios where necessary, including through enhanced monitoring, amending our risk appetite and/or reducing limits and exposures. – We regularly review key portfolios, including our commercial real estate portfolio, to help ensure that individual customer or portfolio risks are understood and that our ability to manage the level of facilities offered through any downturn is appropriate. – We apply management judgemental adjustments where modelled ECL does not fully reflect the identified risks and related uncertainty, or to capture significant late-breaking events. – We continue to seek to manage the impact of sanctions and restrictions on trade and investment through the use of reasonably designed policies, procedures and controls, which are subject to ongoing testing and enhancements. – We have taken steps, where necessary, to enhance physical security in geographical areas deemed to be at high risk from terrorism and military conflicts. Technology and cybersecurity risk We operate in an extensive and complex technology landscape. We need to remain resilient to support customers, our colleagues and financial markets globally. Risks arise where, for example, technology – including rapidly advancing AI – is not understood, maintained or developed appropriately. We also continue to operate in an increasingly complex cyber threat environment globally. These threats include potential unauthorised access to systems, whether ours or those of our third-party suppliers, including access to and potential exfiltration of customer data. These threats require ongoing investment in business and technical controls to defend against them. Mitigating actions – We continue to upgrade many of our technology systems and are transforming how software solutions are developed, delivered, maintained and tested as part of our investment in the Group’s operational resilience to seek to meet the expectations of our customers and regulators, and to help prevent disruptions to our services and recover when they occur. – Our cyber intelligence and threat analysis team continually evaluate threat levels for the most prevalent cyber-attack types and their potential outcomes (see page 63 ), and we continue to seek to strengthen our controls to help reduce the likelihood and impact of attacks including advanced malware, data leakage, exposure through third parties and security vulnerabilities. – We continue to seek to enhance our cybersecurity capabilities, including infrastructure and network security, cloud security, identity and access management, metrics and data analytics, and third-party security assurance, and to invest in mitigating the potential threats of emerging technologies. – We regularly report and review cyber risk and control effectiveness at executive level across business segments, functions and regions, as well as at non-executive Board level to help enable appropriate visibility and governance of the risk and its mitigating actions. – We participate globally in industry bodies and working groups, working together to seek to protect against, detect, respond to and recover from cyber-attacks on financial organisations globally. – We respond to attempts to compromise our cybersecurity in accordance with our cybersecurity framework. To date, none of these attacks have had a material impact on our business or operations. Environmental, social and governance (‘ESG’) risks We are subject to financial and non-financial risks associated with ESG- related matters, such as climate change, nature-related and human rights issues. These matters can impact us both directly and indirectly through our business activities and relationships. For details of how we govern ESG, see page 57 . We may face credit and trading losses, liquidity impacts and/or impacts to our real estate portfolios if climate-related regulatory, legislative or technological developments impact customers’ business models or if extreme weather events disrupt or interrupt customers’ operations, resulting in financial difficulty for customers and/or stranded assets, and impacting their ability to repay their debts or secure insurance. Our customers may find that their business models fail to align to a net zero economy or face disruption to their operations or deterioration to their assets as a result of extreme weather. Operational risk may also increase if extreme weather events impact critical operations and premises. We may face regulatory compliance, legal, conduct and reputational risks resulting from the increasing pace, breadth and depth of climate- related regulatory expectations, including on the management of climate risk, and variations in external ESG-related reporting standards and taxonomies, requiring implementation in short timeframes across multiple jurisdictions. Such risks may also arise from how we decide to HSBC Holdings plc Annual Report on Form 20-F 123 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Top and emerging risks support our customers in high-emitting sectors in their transition to net zero, the preferences of different stakeholders in relation to our approach to the transition to net zero, and if we make insufficient progress in achieving our ESG-related ambitions, targets and commitments. We may face additional risks if we knowingly or unknowingly make inaccurate, unclear, misleading, or unsubstantiated claims regarding sustainability to our stakeholders. Requirements, policy objectives, expectations, views or market and public perceptions and preferences in connection with the transition to a net zero economy and ESG-related matters may vary by jurisdiction and stakeholder, particularly in light of the differing perspectives and responses to climate change of stakeholders in different markets, such as the UK, the US, the EU, and others. We may be subject to potentially conflicting approaches to ESG matters in certain jurisdictions, which may impact our ability to conduct certain business within those jurisdictions or result in additional regulatory compliance, reputational, political or litigation risks. For example, our reputation and client relationships may be damaged as a result of our decision to participate, or not to participate, in certain projects perceived to be associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change, including the transition to net zero. These risks may also arise from divergence in the implementation of ESG, climate policy and financial regulation in the many regions in which we operate, including initiatives to apply and enforce policy and regulation with extraterritorial effect. Our strategy and business model, including our products, services, and risk management processes, will need to continue to evolve to align with evolving regulatory requirements, stakeholder expectations and to manage ESG-related risks. This may involve adapting the way we measure and manage both financial and non-financial risks associated with ESG matters. Achieving our strategy with respect to ESG matters, including any related ambitions, targets and commitments we may set, depends on a number of factors beyond the Group’s control, such as technological advancements and supportive public policies in our operating markets. If these external factors do not materialise or are delayed, we may not meet our ESG-related ambitions, targets and commitments. We may encounter financial reporting risks concerning our climate and ESG disclosures due to model limitations and the limited quality and consistency of available data. As methodologies, data, scenarios, and industry standards evolve with market practices, regulations, or scientific advancements, our ability to collect and process required data may be challenged, exposing us to financial reporting risk in relation to our climate and ESG disclosures. This could result in the Group having to re-evaluate its progress towards its ESG-related ambitions, targets and commitments in the future, resulting in reputational, regulatory compliance and legal risks. We recognise the importance of nature-related risks, as well as the complex interactions and compounding effects of climate and nature- related risk drivers. Nature-related risks may emerge when dependencies on natural capital – such as plants, soils and minerals and ecosystem services – such as water availability and air quality – are affected by key drivers of nature loss, or when there is a lack of alignment between an organisation’s impact on the natural environment and actions to protect, restore or reduce negative impacts on nature. Such risks can affect both HSBC and our customers through various channels, including macroeconomic, market, credit, reputational, regulatory compliance and legal risks. Businesses are expected to be transparent about their efforts to identify and respond to the risk of adverse human rights impacts arising from their business activities and relationships. Failure to manage this risk may negatively impact people and communities, which in turn may result in reputational, regulatory compliance and legal risks for HSBC. Mitigating actions – We continue to develop our climate risk management capabilities across four key pillars: governance and risk appetite, risk management, stress testing and scenario analysis, and disclosures. – We continue to enhance our approach to managing and mitigating the risk of greenwashing. – Our sustainability risk policies form part of our broader risk management framework and are important mechanisms for managing risks. Our sustainability risk policies focus on mitigating reputational, credit, legal and other risks related to our customers’ environmental and social impacts. For further details of our sustainability risk policies, see page 49 . – Sustainability execution risk has been defined as a new risk type to help identify and manage the risks around the delivery and execution of our sustainability strategy. For further details, see page 204 . – We continue to develop our understanding of nature-related risks in line with European and other emerging regulatory expectations. – In 2025, we continued to focus on our approach to human rights risk management relating to the goods and services we buy from third parties and in respect of our business customers. For further details of our approach to human rights risk management, see page 58 . – The scope of our financial reporting risk framework includes oversight of the accuracy and completeness of climate and ESG- related disclosures. Our risk appetite statement references our climate and ESG-related disclosures. Our internal controls incorporate requirements for addressing the risk of misstatement in climate and ESG-related disclosures. We developed a framework to support the implementation of controls for climate and ESG-related disclosures, which includes areas such as process and data governance, and risk assessment. – We continue to engage with our customers, investors and regulators on the management of climate and ESG risks. We also engage with initiatives, including the Climate Financial Risk Forum, to help with informing developing practice for climate risk management. Ñ For further details of our approach to climate risk management, see ‘Climate risk’ on page 203 . Ñ Our ESG review can be found on page 32 . Financial crime risk Financial institutions remain under considerable regulatory scrutiny regarding their ability to detect and prevent financial crime. In 2025, these risks continued to be exacerbated by rising geopolitical tensions and ongoing macroeconomic factors. These challenges require not only the management of conflicting laws and approaches to legal and regulatory regimes, but also the implementation of more complex and less predictable sanctions and restrictions on trade and investment. Amid growing cost of living pressures, we continue to face increasing regulatory expectations with respect to managing internal and external fraud and protecting customers. The accessibility and increasing sophistication of Generative AI (‘GenAI’) can create additional financial crime risks. While there is potential for the technology to support financial crime detection, there is also a risk that criminals use GenAI to perpetrate fraud, particularly scams. The digitisation of financial services continues to have an impact on the payments ecosystem, with an increasing number of new market entrants and payment mechanisms, not all of which are subject to the same level of regulatory scrutiny or regulations as banks. Developments in digital assets and currencies have continued at pace, with an increasing regulatory and enforcement focus on the financial crimes linked to these types of assets. We also continue to face increasing challenges presented by national data privacy requirements, which may affect our ability to manage financial crime risks across markets. HSBC Holdings plc Annual Report on Form 20-F 124 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Top and emerging risks Mitigating actions – We continue to seek to manage sanctions and restrictions on trade and investment through the use of reasonably designed policies, procedures and controls, which are subject to ongoing testing and enhancements. – We continue to develop our fraud controls and invest in capabilities to fight financial crime through the application of advanced analytics and AI, while monitoring technological developments and engaging with third parties. – We continue to assess the impact of a rapidly changing payments ecosystem, as well as risks associated with direct and indirect exposure to digital assets and currencies, in an effort to maintain appropriate financial crime controls. – We engage with regulators, policymakers and relevant international bodies, to improve the effectiveness of managing financial crime risk through changes to international standards, guidance and legislation, including seeking to address data privacy challenges. Digitalisation and technological advances risk Developments in technology and changes to regulations are enabling new entrants to the industry, particularly with respect to payments. This challenges us to continue innovating, enhancing efficiency, and adapting our products to attract and retain customers, which may require increased investment to meet evolving customer needs. We aim to ensure that new digital capabilities do not weaken our resilience or wider risk management capabilities. New technologies such as GenAI, large language models, blockchain, and quantum computing not only offer business opportunities but also pose potential risks for HSBC. As with the use of all technologies, we aim to maximise their potential while seeking to ensure a robust control environment is in place to help manage the inherent risks. Mitigating actions – We continue to monitor this emerging risk and advances in technology, as well as changes in customer behaviours, to understand how these may impact our business. – We assess new technologies to help develop appropriate controls and maintain resilience. – We closely monitor and assess financial crime risk and the impact on payment transparency and wider payment infrastructure. – We conduct risk assessments and have governance in place (for example on AI and digital assets and currencies) to help enable Group-wide cross-risk focus on areas of emerging technology. – We seek to be transparent as to how we are engaging with new technology innovation, for example publishing HSBC’s Principles for the Ethical Use of Data and AI. – We continue to make improvements to our related policies and to our control framework to enhance the end-to-end management of risks from new technology innovations. Evolving regulatory environment risk We operate across a range of highly regulated markets, designed to protect customers, ensure the stability of the financial system and prevent financial crime. Regulatory approvals and permissions are required to operate in these markets. The approach to regulation is increasingly fragmented, including in relation to AI and digital assets, and a trend towards deregulation has emerged in some jurisdictions, concurrently with regulatory actions to support business growth. Mitigating actions – We proactively manage relationships with regulators globally covering a range of topics which include but are not limited to: prudential requirements; operational resilience; resolvability; financial reporting and data; ESG; conduct; sound risk and financial crime risk management practices. We also engage with financial services regulators to inform them of changes to the business and to address their concerns, including meetings with them to discuss strategic contingency plans, including those arising from geopolitical issues. – We monitor and track regulatory developments to understand the evolving regulatory landscape and implement necessary changes required by legislation and regulations. – We engage with governments and regulators directly, and by responding to formal consultations, to help shape legislation and regulations to support our customers and strategic objectives. Internally driven Data risk We use multiple systems and an increasing volume of data to support our customers. Risk arises if data is incorrect, unavailable, misused or unprotected. Like other banks and financial institutions, we must comply with external regulatory obligations and laws governing data, such as the Basel Committee on Banking Supervision’s 239 (‘BCBS239’) principles and the UK/EU General Data Protection Regulation. Mitigating actions – We actively monitor the quality, availability and security of data that supports our customers and internal processes, seeking to address any identified issues. – We continue to make regular improvements to our data policies and control framework, including trusted sources, data flows and data quality, to enhance comprehensive management of data risk. – We seek to protect customer data through our data privacy processes and controls, which set practices, design principles and guidelines to help ensure compliance with data privacy laws and regulations. – We have established a comprehensive Risk Data Aggregation and Risk Reporting framework, seeking to ensure compliance with BCBS239 principles. – We continue to modernise our data and analytics infrastructure through investments in cloud technology, data visualisation, machine learning and AI. – We provide regular mandatory training globally to educate our employees on data risk management, seeking to ensure they know how to process and protect data effectively. Risks arising from the receipt of services from third parties We use third parties to provide a range of goods and services. It is critical that we seek to have appropriate risk management policies, processes and practices over the selection, governance and oversight of third parties and their supply chain, particularly for key activities that could affect our operational resilience. Any deficiency in the management of risks associated with our third parties could affect our ability to support our customers and meet regulatory expectations. Mitigating actions We continue to: – monitor the effectiveness of the controls operated by our third-party providers and request third-party control reports, where required; – develop the management of our intra-group arrangements using equivalent control requirements as we apply to external third-party arrangements; – strengthen our due diligence and monitoring capabilities in respect of the financial stability of our third parties; – strengthen third-party risk oversight across all non-financial risks and to enhance our processes and framework; – enhance reporting capabilities to help improve the visibility of risk and enable more robust management of our material third parties by our business segments, functions and regions; and – implement changes required by new regulations. HSBC Holdings plc Annual Report on Form 20-F 125 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Top and emerging risks Model risk Model risk remains a key area of focus given the regulatory scrutiny in this area, with local regulatory exams taking place in many jurisdictions and uplifted requirements from the PRA’s supervisory statement 1/23 (‘SS1/23’) being implemented. We continued to prioritise the redevelopment of internal ratings-based (‘IRB’) and internal model methods (‘IMM’) models, in relation to counterparty credit, as part of the IRB repair and Basel 3.1 and Fundamental Review of the Trading Book programmes. We have a key focus on enhancing the quality of data used as model inputs and ensuring that models adhere to both the letter and spirit of the regulation. Some models have been approved, and a number are pending approval decisions from the UK’s Prudential Regulation Authority (‘PRA’) and other key regulators. We are a year into a major project to redevelop our Wholesale IRB models which are expected to be submitted for regulatory approval over the next two years. Should the agreed timelines not be met, there is a potential risk of requirements to hold additional capital or fines being applied by regulators. Focus remains on AI and machine learning models given the rapid pace of technological advances, including the development of GenAI and agentic AI (autonomous systems powered by AI agents). AI is driving significant changes in modelling techniques, and regulators across the globe are beginning to publish regulations and guidance. Mitigating actions – We are investing in the redevelopment of our IRB models used in our wholesale businesses to enhance our modelling capability and help ensure we meet regulatory expectations for the adoption of Basel 3.1 requirements. – We further enhanced our Model Risk Management (‘MRM’) framework to meet the requirements of the PRA’s SS1/23 with a programme of work in progress to implement these changes across our model landscape. – We completed the identification of tools that meet the definition of Deterministic Quantitative Methods (‘DQMs’), which are complex and material calculators, and although not technically models, they present similar risks. We have now commenced a programme for uplifting the controls for these DQMs. – We made changes to our Model Risk Governance committees at the Group, business and functional levels as part of our organisational simplification, to help ensure they continue to provide effective and efficient oversight of model risk. – Model Risk Management works closely with businesses to support the development of IRB/IMM/IMA/IFRS 9/stress testing models by providing independent validation, review and challenge to help meet risk management, pricing, capital management, and credit risk measurement needs. – Additional assurance work is performed by the model risk governance teams, which act as second lines of defence. The teams test whether controls implemented by model users comply with model risk policy and if model risk procedures are adequate. – Models using AI or GenAI techniques are reviewed by the relevant risk teams and monitored by the business to help ensure that identified risks have adequate oversight and review. A framework has been developed to manage the range of risks that are generated by these advanced techniques and to recognise the multidisciplinary nature of these risks. – We have enhanced our inventory control to apply heightened scrutiny of agentic AI use cases before deployment. Strategic execution risk Effective management of strategic execution risk is essential to delivering our strategy, fulfilling shareholder expectations, and sustaining stakeholder confidence. To achieve the Group’s strategic commitments, it is essential to engage in effective financial resource planning that helps ensure safe and sustainable delivery of strategic outcomes. Strategic execution risk remains elevated due to the complexity and scale of ongoing strategic, regulatory and technological change. It is critical to uphold and enhance strategic execution risk controls and monitoring. Mitigating actions – We have refreshed our Strategic Risk Policy to strengthen control requirements. – We have clarified strategic execution risk management requirements and oversight accountabilities. – The Group Finance Management Meeting oversees the prioritisation and funding, strategic alignment, and management of strategic execution risk for transformative initiatives. Additionally, the HSBC Holdings Board provides enhanced oversight over the simplification programme, directly supervising its mobilisation and delivery. – We have updated our strategic execution risk metrics and reporting to help support improved monitoring and oversight of performance. Risks associated with workforce capability, capacity and environmental factors with potential impact on growth Our business segments and functions in all of our markets are exposed to risks associated with workforce capacity challenges, including challenges to retain, develop and attract high-performing employees in key labour markets, the evolving skills requirements of our workforce and compliance with employment laws and regulations. Failure to manage these risks may have an impact on the delivery of our strategic objectives. It could also result in poor customer outcomes or a breach of employment laws and regulations, which may lead to regulatory sanctions or legal claims. Mitigating actions – We seek to promote an inclusive workforce and provide health and wellbeing support. We continue to build our speak-up culture through active campaigns. – We monitor hiring activities and levels of employee attrition, with each business and function putting in place plans to help ensure they have effective workforce forecasting to meet business demands. – We monitor people risks that could arise due to the implementation of organisational restructuring, seeking to ensure that we manage redundancies sensitively and support impacted employees. We encourage our people leaders to focus on talent retention at all levels, with an empathetic mindset and approach, while ensuring the whole proposition of working at HSBC is well understood. – Our Future Skills curriculum aims to provide skills that enable employees and HSBC to be successful in the future. – We develop succession plans for key management roles, with oversight from the Group Operating Committee. – We have introduced ‘How We Lead’, a new Group-wide leadership framework designed to shape the way we operate. This initiative brings with it a new set of Leadership Principles, and we expect it to drive meaningful changes in our ways of working across the organisation. HSBC Holdings plc Annual Report on Form 20-F 126 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors We have identified a suite of risk factors that cover a broad range of risks to which our businesses are exposed. These risks have the potential to have a material adverse effect on our business, financial condition, results of operations, prospects, capital position, strategy, reputation and/or customers. They may not necessarily be deemed as top or emerging risks; however, they inform the ongoing assessment of our top and emerging risks that may result in our risk appetite being revised. The risk factors are set out below. Macroeconomic and geopolitical risk Economic and market conditions and geopolitical developments may adversely affect our financial condition and results Our earnings are affected by global and local economic, financial and geopolitical changes. Uncertain economic conditions and volatile markets can create a challenging operating environment for our business operations. HSBC has experience of financial and operational loss sustained as a consequence of the economic cycle, financial crises and wars. Our earnings, operations and operating model have been and could in future be affected by the following factors: – The economic cycle: Deteriorating business, consumer or investor confidence and lower levels of investment and productivity growth, may lead to economic recession and lower customer and client activity. Rapid changes to the economic environment can also create challenging operating conditions for financial institutions such as HSBC and may affect our earnings and profits. The volatility of US trade and tariff policies remains a key source of uncertainty. Changes to tariff rates, including sector-specific levies, may deter capital investment and consumer spending, disrupt supply chains and reduce global trade growth. A broader escalation of tariffs, and a potential trade war remain a risk. Policy uncertainty may also deter businesses from hiring. During 2025, unemployment rose across many of our major markets, and there remains a risk of further increases if layoffs begin to increase more significantly, employment growth continues to be constrained by uncertainty, or if investment in artificial intelligence (’AI’) starts to yield productivity gains that reduce demand for labour. Slowing growth in China over the second half of 2025 also suggests that additional economic policy support may be needed to stimulate domestic growth. Weak growth, higher unemployment and rising costs could affect the earnings and activity of our customers, which could, in turn, reduce demand for our products and services. – Inflation and monetary policy: The future path for interest rates remains uncertain and changes to interest rate expectations could affect net interest income, the fair value of our assets and liabilities and overall financial performance. The combined pressure of tariffs, persistent inflation and restrictive interest rates could have material impacts on our customers as these factors could erode real purchasing power, increase debt service costs and weigh on real estate and other asset prices. High interest rates may affect the credit rating of our customers and their ability to repay debt. This could negatively impact the Group’s risk-weighted assets (’RWAs’) and capital position, resulting in increases in expected credit losses and other impairment charges (’ECL’) and potential liquidity stresses due to, amongst other factors, increased customer drawdowns. There could be further adverse impacts on the Group’s income if high rates were to result in lower lending volumes and weaker wealth and insurance revenue. Alternatively, lowering interest rates, while stimulating demand for new lending, could reduce revenue from net interest margins and profitability. Major central banks, including the US Federal Reserve, the European Central Bank and the Bank of England (‘BoE‘), eased monetary policy during 2025 as higher inflation risks were seen to diminish as unemployment rose. However, that trajectory could be disrupted if wage growth, tariffs or key commodity prices keep inflation higher for longer. – Financial stability: Changing economic conditions and shifting policy create a more uncertain and volatile environment for asset markets. Financial markets have seen significant gains over 2025, including in the AI and the technology sectors, supported by the decline in short- term interest rates. The investment in these sectors may lead to future gains to productivity, while high equity market valuations may create a tailwind from positive wealth effects. However, current high valuations also raise the risk of a material fall in the markets, if the expected gains to productivity fail to materialise. This could adversely affect economic growth, which may, in turn, have an adverse impact on HSBC’s risk profile and earnings by increasing the financial vulnerability of customers and decreasing the value of collateral and other claims. T he depreciation of the US dollar through 2025 driven by changing interest rates and tariff policy uncertainty, is also an area of focus due to the associated hedging and revaluation risks. Elevated volatility is expected to persist, reflecting concern over fiscal sustainability and an increasingly complex fiscal and monetary policy environment. Exchange rate volatility may affect our risk exposure through mark-to-market changes in trading positions and the translation effects of currency movements. – Fiscal policy and high levels of government debt: Debt levels in many of our major markets have continued to rise due to higher social welfare costs and increased expenditures on defence and climate transition. Rising government debt and high interest payments could adversely affect the fiscal capacity and debt sustainability of highly indebted sovereign issuers. Emerging markets with substantial debt and weak fiscal positions may also face increased repayment costs, heightened refinancing risks and greater likelihood of sovereign rating downgrades. A fragmented political landscape in many markets has diminished the political will for fiscal tightening. These factors could drive higher refinancing costs and could lead to tax increases that prove negative for growth. Uncertainty about future taxation could undermine confidence, business investment and consumer spending, which would be negative for the Group’s retail and corporate operations in various markets. Additionally, where HSBC has exposure to such sovereigns or related parties, it could incur losses. At the same time, sovereign rating downgrades and/or a disorderly increase in long-term government funding costs, could increase the cost of funding for HSBC and/or limit access to market funding, resulting in an adverse impact on interest margins and liquidity. – Longer term trends: Strategic competition between countries is reshaping trading relationships and increasing the focus on long- term economic and supply chain security, which could adversely affect the Group and our customers. Diversification in trade invoicing currencies, payment systems and reserve holdings is also increasing as a consequence of these trends, raising liquidity and volatility risks, as well as increasing operational complexity . Evolving demographics, including population ageing and changing migration patterns, may also result in changes to long-term savings and investment behaviours, including reduced demand for bank borrowing. – Geopolitical risks: Geopolitical risks remain high. The disruption of key supply routes caused by geopolitical conflicts has continued to impact global supply chains. The Russia-Ukraine war and further conflict or military action, in the Middle East, Venezuela or elsewhere, could impact economic activity regionally or globally which, if continued for a prolonged period, could have a material adverse effect on the Group’s business, financial condition, results of operations, prospects, liquidity, capital position and credit ratings. (For further details see ’We are subject to political, social and other risks in the countries in which we operate’). HSBC Holdings plc Annual Report on Form 20-F 127 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors Adverse changes to the current economic, financial and geopolitical situation including in relation to any of the factors listed above, could result in: – Idiosyncratic losses: Impairment estimates attempt to capture the effects of economic, financial and geopolitical risks in the aggregate, but credit losses on specific exposures, with idiosyncratic features that make them particularly susceptible to the risks described above, may not be fully captured in our impairment estimates; – Sector-wide impairment: Changing economic conditions, policies and funding costs may give rise to a deterioration in specific industries and sectors that may reduce the creditworthiness of our customers. For example, in mainland China, excess supply conditions continued to weigh on the property market, despite various central government policies introduced to support the property market and wider economy. In contrast, the Hong Kong real estate market showed some signs of recovery in the second half of 2025, particularly in the residential segment, supported by lower interest rates. Nevertheless, valuation pressures and liquidity constraints are expected to continue in the near term, particularly for mid-sized and sub-investment grade corporates. In addition, certain products, sectors and countries may be targeted by material increases in trade tariffs, potentially driving a slowdown in export demand; – Reduced credit demand: The demand for borrowing from creditworthy customers may diminish during periods of recession or where economic activity slows or remains subdued; – A tightening of financial market conditions: Our ability to borrow from other financial institutions or to engage in funding transactions may be adversely affected by market disruption; and – Goodwill and intangibles: A changing economic and geopolitical outlook may change the recoverable value of assets and necessitate a write down in the value of intangible balance sheet items such as goodwill. Provisioning against credit loss is conducted under the IFRS 9 ‘Financial Instruments’ (IFRS 9) calculations of ECL, which use forward looking scenarios that incorporate the economic and financial risks detailed above. In the fourth quarter of 2025, HSBC’s Central scenario, which has the highest probability weighting, assumes that GDP growth in many of our major markets will remain stable, or slow down in 2026, relative to 2025. Slower growth is assumed to result from the higher global tariffs and weaker labour market conditions across major economies. The scenario also assumes that central banks will cut policy interest rates further over 2026, as inflation is expected to converge towards official target rates. However, forecasts remain uncertain, and changing economic conditions and the materialisation of key risks could reduce the accuracy of our Central scenario. There remains uncertainty regarding the adequacy of our models in capturing credit losses under emerging risks which are not captured by the historical loss experience of our models, or to effectively distinguish risks for specific sectors and portfolios. Our financial model outputs (including retail and wholesale credit models such as IFRS loss models) continue to be monitored and management judgemental adjustments are used where modelled ECL does not fully reflect the identified risks and related uncertainty, or to capture significant late-breaking events. Nevertheless, our model outputs may fail to accurately capture the effects of complex economic, financial and geopolitical risks. See also ’We could incur losses or be required to hold additional capital as a result of model limitations or failure‘. The occurrence of any of these events or circumstances could have a material adverse effect on our business, financial condition, results of operations, prospects and customers. We are subject to political, social and other risks in the countries in which we operate We operate through an international network of subsidiaries and affiliates across countries and territories around the world. Our global operations are subject to potentially unfavourable political, social, environmental and economic developments in such jurisdictions, which may include: – coups, armed conflict or acts of terrorism; – political and/or social instability; – geopolitical tensions; – epidemics and pandemics (such as the Covid-19 pandemic); – climate change, acts of God and natural disasters (such as floods and hurricanes); and – infrastructure issues, such as transportation and power failures. Each of the above could impact RWAs, and the financial losses caused by any of these risk events or developments could impair asset values and the creditworthiness of customers. These risk events or developments may also give rise to disruption to the Group’s services and some may result in physical damage to our operations and/or risks to the safety of our personnel and customers. Geopolitical tensions could have significant ramifications for the Group and its customers. In particular: – Throughout 2025, the US government announced far-reaching tariffs against a broad spectrum of countries, including the UK, China, the EU, Canada, India, and Mexico. Although subsequent bilateral and multilateral negotiations have moderated certain tariff rates, particularly in sectors deemed critical to domestic supply chains, there is a possibility that these deals are replaced by alternative US tariffs on different terms, and the overall trade policy environment remains fluid and unpredictable; – While globalisation appears to remain deeply embedded in the international system, it is increasingly challenged by protectionism, including trade tariffs. The broad geographic footprint and coverage of HSBC may make us and our customers susceptible to protectionist measures taken by national governments and authorities, including imposition of trade tariffs, restrictions on market access and investment, restrictions on the ability to transact on a cross-border basis, expropriation, restrictions on international ownership, interest rate caps, limits on dividend flows and increases in taxation. There may be uncertainty as to the conflicting nature of such measures, their duration, the potential for escalation, and their potential impact on global economies; – Following the US military operation in Venezuela, further action elsewhere remains possible. Such developments, including the actual or threatened use of force, could have regional or global economic and political implications, leading to further trade disruption. (For further details, see ’Economic and market conditions and geopolitical developments may adversely affect our financial conditions and results’); – Sanctions and restrictions on trade and investment are continually evolving in response to geopolitical events and may adversely affect the Group, its customers and the markets in which the Group operates. These factors may result in increased legal, regulatory, reputational and market risks, and a more complex operating environment; – The Russia-Ukraine war along with related financial sanctions, trade restrictions and Russian countermeasures, has had global economic and political implications. The US, the UK, and the EU, as well as other countries, have continued to impose sanctions against Russia. The US retains broad discretion to impose sanctions on non-US financial institutions that knowingly or unknowingly engage in transactions or provide services to sanctioned parties or otherwise involve Russia’s military-industrial base. The imposition of such sanctions against any non-US HSBC entity could result in significant adverse commercial, operational, and reputational consequences for HSBC; – Strategic competition between the US and China, including in the form of escalation and de-escalation over tariffs, sanctions, export controls, the trade of rare earth minerals and semiconductors, and cross-border investment restrictions, have increased risk and uncertainty. Diplomatic tensions between China and the US and related actions, which may extend to and involve other countries, and developments in Hong Kong and Taiwan and the surrounding maritime region, may further adversely affect the Group. Developments in alternative payment systems, such as projects to explore how tokenised commercial and central bank money could be used for cross-border payments, continue with implications for the HSBC Holdings plc Annual Report on Form 20-F 128 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors future architecture of global finance. Development of new payments infrastructure and use of alternative currencies may present operational and other challenges, if, for example, certain governments mandate the use of payment channels that do not integrate with our payment architecture and financial crime controls. Global tensions over trade and technology are resulting in divergent regulatory standards and compliance regimes, presenting long-term strategic challenges for multinational businesses such as HSBC. As the geopolitical landscape evolves, compliance by multinational corporations with their legal or regulatory obligations or other initiatives in one jurisdiction may be seen as supporting the law or policy objectives of that jurisdiction over another, creating additional legal, regulatory, reputational and political risks for the Group. The financial impact on the Group of geopolitical risks in Asia is heightened due to the region’s relatively high contribution to the Group’s profitability, particularly in Hong Kong. While it is the Group’s policy to comply with all applicable laws and regulations of all jurisdictions in which it operates, geopolitical tensions, and potential ambiguities in the Group ’ s compliance obligations, continue to present challenges and risks for the Group and could have a material adverse impact on the Group‘s strategy, business, customers, operations, financial results and reputation. We are subject to financial and non- financial risks associated with Environmental, Social and Governance (‘ESG‘) related matters, such as climate change, nature-related and human rights issues ESG-related matters such as climate change, society’s impact on nature and human rights issues bring risks to our business, our customers and wider society. If we fail to meet evolving regulatory expectations or requirements relating to these matters, this could have regulatory compliance and reputational impacts. Climate change could have both financial and non-financial impacts on HSBC either directly or indirectly through our business activities and relationships. Our climate risk approach identifies physical risk and transition risk as primary drivers of climate risk. We continue to identify the risk of greenwashing as a thematic risk issue related to climate risk, which may arise if we knowingly or unknowingly make inaccurate, unclear, misleading or unsubstantiated claims regarding sustainability to our stakeholders. Physical risk may arise from the increased frequency and severity of extreme weather events, such as hurricanes and floods or chronic gradual shifts in weather patterns or rises in sea level. Transition risk may arise from the process of moving to a net zero economy including changes in government policy and legislation, technology, market demand and reputational implications triggered by a change in stakeholder expectations in relation to our action or inaction. We currently expect the following to be the most likely ways in which climate risk may materialise for the Group: – credit risk may increase if climate-related regulatory, legislative or technological changes impact customers' business models or if extreme weather events disrupt or interrupt operations, resulting in financial difficulty for customers and/or stranded assets, or impacting their ability to repay their debts. Clients may find that their business models fail to align to a net zero economy or face disruption to their operations or deterioration to their assets as a result of extreme weather; – trading losses if climate change results in changes to macroeconomic and financial variables which negatively impact our trading book exposures; – liquidity impacts in the form of deposit outflows due to changes in customer behaviours driven by impacts to profitability and wealth, or from reputational concerns relating to the progress we make towards our ESG-related ambitions, targets and commitments; – our real estate portfolios may be impacted due to changes to the climate, an increase in the frequency and severity of extreme weather events and chronic gradual shifts in weather patterns, which could impact both property values and the ability of borrowers to afford their mortgage payments. This may lead to the reduced availability or increased cost of insurance, including insurance that protects property pledged as collateral for HSBC mortgages; – operational risk may increase if extreme weather events impact critical operations and premises; – regulatory compliance risk may result from the increasing pace, breadth and depth of climate-related regulatory expectations, including on the management of climate risk, and variations in climate-related external reporting standards and taxonomies, requiring implementation in short timeframes across multiple jurisdictions; – conduct risk may arise in association with the increasing demand for ’ green ‘ or ’ sustainable ‘ products where there are differing and developing standards or taxonomies; – reputational risks may arise from how we decide to support our customers in high-emitting sectors in their transition to net zero, the preferences of different stakeholders in relation to our approach to the transition to net zero, and if we make insufficient progress in achieving our ESG-related ambitions, targets and commitments; and – model risk may arise from the uncertain and evolving impacts of climate change, as well as data and methodology limitations, which present challenges to creating reliable and accurate model outputs. We may face heightened reputational, regulatory compliance, and legal risks as we advance towards our ESG-related ambitions, targets and commitments. Stakeholders are likely to scrutinise our actions, including the formulation of our ESG and sustainability risk policies, our disclosures, and our financing and investment decisions in relation to these ambitions, targets and commitments. Additional risks may arise if we fail to: – make sufficient progress towards our ESG-related ambitions, targets and commitments; – set adequate plans and execute, or adapt those plans as necessary, in response to changes in the external environment; – manage the risks associated both with meeting and not meeting our ESG-related ambitions, targets and commitments; and – meet evolving regulatory expectations and requirements on the management of ESG risks. We may also face risks related to climate and ESG-related litigation and regulatory enforcement. This could occur directly if stakeholders believe we are not effectively managing these risks, or indirectly if our customers are involved in litigation, which might lead to a revaluation of their assets. Requirements, policy objectives, expectations, views or market and public perceptions and preferences in connection with the transition to a net zero economy and ESG-related matters may vary by jurisdiction and stakeholder, particularly in light of the differing perspectives and responses to climate change of stakeholders in different markets, such as the UK, the US, the EU and others. We may be subject to potentially conflicting approaches to ESG matters in certain jurisdictions, which may impact our ability to conduct certain business within those jurisdictions or result in additional regulatory compliance, reputational, political or litigation risks. For example, our reputation and client relationships may be damaged as a result of our decision to participate, or not to participate, in certain projects perceived to be associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change, including the transition to net zero. These risks may also arise from divergence in the implementation of ESG, climate policy and financial regulation in the many regions in which we operate, including initiatives to apply and enforce policy and regulation with extraterritorial effect. We recognise the importance of nature-related risks, as well as the complex interactions and compounding effects of climate and nature- related risk drivers. Nature related-risks may emerge when dependencies on natural capital - such as plants, soils and minerals - HSBC Holdings plc Annual Report on Form 20-F 129 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors and ecosystem services - such as water availability and air quality - are affected by key drivers of nature loss, or when there is a lack of alignment between an organisation’s impact on the natural environment and actions to protect, restore or reduce negative impacts on nature. Such risks can affect both HSBC and our customers through various channels, including macroeconomic, market, credit, reputational, regulatory compliance, and legal risks. Businesses are expected to be transparent about their efforts to identify and respond to the risk of adverse human rights impacts arising from their business activities and relationships. Failure to manage this risk may negatively impact people and communities, which in turn may result in reputational, regulatory compliance and legal risks for HSBC. Our strategy and business model, including our products, services, and risk management processes, will need to continue to evolve to align with evolving regulatory requirements, stakeholder expectations and to manage ESG-related risks. This may involve adapting the way we measure and manage both financial and non-financial risks associated with ESG matters. Achieving our strategy with respect to ESG matters, including any related ambitions, targets and commitments we may set, depends on a number of factors beyond the Group’s control, such as technological advancements and supportive public policies in our operating markets. If these external factors do not materialise or are delayed, we may not meet our ESG-related ambitions, targets and commitments. We may encounter financial reporting risks concerning our climate and ESG disclosures due to the limited quality and consistency of available data. Such uncertainty poses a risk of relying on incomplete or inaccurate data and models, potentially leading to sub-optimal decision- making. As methodologies, data, scenarios, and industry standards evolve with market practices, regulations, or scientific advancements, our ability to collect and process required data may be challenged, exposing us to financial reporting risk in relation to our climate and ESG disclosures. Such developments could also necessitate revisions to our internal measurement frameworks and reported data, including on financed emissions, making year-on-year comparisons difficult. This could result in the Group having to re-evaluate its progress towards its ESG-related ambitions, targets and commitments in the future, resulting in reputational, regulatory compliance and legal risks. If any of the above risks materialise, this could have financial and non- financial impacts for HSBC which could, in turn, have a material adverse effect on our business, financial condition, results of operations, reputation, prospects and strategy. The UK’s trading relationship with the EU, following the UK’s withdrawal from the EU, may adversely affect our operating model and financial results The uncertain outcome of potential developments relating to the financial services trading relationship between the UK and EU, including the rules under which financial services may be provided on a cross- border basis into the EU and its member states, remains a source of risk for the Group. The EU Capital Requirements Directive (’CRDVI’), which EU member states are in the process of transposing into national law, introduces  a new requirement (‘the EU branch requirement’) under which non-EU banks and significant investment firms would have to establish a branch in each EU member state in which they carry out ‘core banking activities’, defined as deposit taking, lending and guarantees, and commitments. The EU branch requirement, which will be subject to certain exclusions and exemptions will generally come into effect on 11 January 2027, although precise effective dates vary across EU member states. Grandfathering of cross border core banking contracts entered into before 11 July 2026 is provided for under CRDVI, although the availability of such grandfathering may vary subject to transposition by EU member states. The Financial Services and Markets Act (‘FSMA’) 2023 became law in June 2023 and provides for a number of changes to the regulatory architecture in the UK. It contains provisions that would allow for specified ‘onshored’ EU legislation, also known as ‘retained EU law’ or ‘REUL’ (and known as ‘assimilated law’ after 1 January 2024), to be revoked and replaced by legislation or rules made by HM Treasury or the regulators. FSMA 2023 allows for the eventual repeal of assimilated law related to financial services and enables the government and regulators to replace it in line with the FSMA model. Each piece of assimilated law related to financial services is now within a ‘transitional period’, lasting until its repeal is individually commenced by HM Treasury in a phased and sequenced manner. Furthermore, as of 1 January 2024, certain legal effects previously associated with REUL (now referred to as assimilated law) no longer apply, including the supremacy of REUL over other types of conflicting domestic UK law, general principles of EU law (which informed REUL’s interpretation and application) and directly effective EU rights. Uncertainty remains as to the extent to which EU and UK laws will diverge in the future, as a result of the future repeal of assimilated law under FSMA 2023 or further development of the EU‘s own regulatory regime. In particular, the UK is in the process of revoking the remainder of the assimilated version of the Capital Requirements Regulation and replacing it with rules published and maintained by the Prudential Regulation Authority (’PRA’), which will also reflect the UK’s implementation of the Basel Committee on Banking Supervision‘s (’BCBS’) final reforms to the prudential framework (’Basel 3.1’). Any changes to the current EU and UK banking and financial services rules, including as a result of the EU branch requirement, the UK’s revocation and replacement of EU-derived laws, the UK and EU implementation of Basel 3.1 reforms and any further divergences between the two legal regimes, could require modifications to our UK and EU operating models, with resulting impacts to our customers and employees. The precise impacts on our customers will depend on the nature of any developments and their individual circumstances and could include disruption to the provision of products and services, and this could in turn increase operational complexity and/or costs for the Group. More generally, over the medium to long term, the UK’s withdrawal from the EU and the operation of the Trade and Cooperation Agreement agreed between the EU and the UK (and any complexities that may result therefrom), may lead to increased market volatility and economic risk, particularly in the UK, which could adversely impact our profitability and prospects for growth in this market. In addition, the UK’s future trading relationship with the EU and the rest of the world will likely take a number of years to fully stabilise. This may result in a prolonged period of uncertainty, unstable economic conditions and market volatility. This could include reduced international trade flows and loss of export market shares, as well as currency fluctuations. If any of the above risks materialise, this could have a material adverse effect on our business, financial condition, results of operations, reputation, prospects and strategy. We operate in markets that are highly competitive We compete with other financial institutions in a highly competitive industry that continues to undergo significant change as a result of financial regulatory reform, as well as increased public scrutiny and a continued challenging macroeconomic environment. We target internationally mobile customers who need sophisticated global financial solutions. We generally compete on the basis of the quality of our customer service, the variety of products and services that we can offer our customers, the ability of our products and services to satisfy our customers’ needs, the extensive distribution channels available for our customers, our innovation, and our reputation. Continued and/or increased competition in any one or all of these areas may negatively affect our market share and/or require increased capital investment in our businesses in order to remain competitive. In the highly competitive markets in which we operate, our ability to reposition or reprice our products and services from time to time may be limited, and could be influenced significantly by the actions of our customers or competitors. Any changes in the types of products and services that we offer our customers, and/or the pricing for those products and services, could result in a loss of customers and market share. HSBC Holdings plc Annual Report on Form 20-F 130 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors Developments in technology and changes to regulations are enabling new entrants to the industry. This challenges HSBC to continue innovating and taking advantage of new digital capabilities so that we improve how we serve our customers, drive efficiency and adapt our products to attract and retain customers. As a result, we may need to increase our investment in our business to adapt or develop products and services to respond to evolving customer needs and regulatory requirements. New digital capabilities have the potential to weaken our resilience or wider risk management capabilities. If HSBC fails to develop and adapt its products and services to take advantage of new digital capabilities this could have an adverse impact on our business. The digitisation of financial services continues to have an impact on the payment services ecosystem, including new market entrants and payment mechanisms, not all of which are subject to the same level of regulatory scrutiny or regulations as financial institutions. This presents ongoing challenges in terms of maintaining required levels of payment transparency, notably where financial institutions serve as intermediaries. Developments around digital assets and currencies have continued at pace, with an increasing regulatory and enforcement focus. Any of these factors could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. Changes in foreign currency exchange rates may affect our results We prepare our accounts in US dollars because the US dollar and currencies linked to it form the major currency bloc in which we transact and fund our business. However, a substantial portion of our assets, liabilities, assets under management, revenues and expenses are denominated in other currencies. Changes in foreign exchange rates, including those that may result from a currency becoming de- pegged from the US dollar, may have an effect on our accounting standards, reported income, cash flows and shareholders’ equity. Unfavourable changes in foreign exchange rates could have a material adverse effect on our business, financial condition, results of operations, capital position and prospects. Market fluctuations may reduce our income or the value of our portfolios Our businesses are inherently subject to risks in financial markets and in the wider economy, including changes in, and increased volatility of, interest rates, inflation rates, credit spreads, foreign exchange rates, commodity, equity, bond and property prices, and the risk that our customers act in a manner inconsistent with our business, pricing and hedging assumptions. Market pricing can be volatile and ongoing market movements could significantly affect us in a number of key areas. For example, banking and trading activities are subject to interest rate risk, foreign exchange risk, inflation risk and credit spread risk. Changes in interest rate levels, interbank spreads over official rates and yield curves affect the interest rate spread realised between lending and borrowing costs. The potential for future volatility and margin changes remains. See ‘Economic and market conditions and geopolitical developments may adversely affect our financial condition and results‘ above regarding the impact of these on the interest rate environment. Competitive pressures on fixed rates or product terms in existing loans and deposits sometimes restrict our ability to change interest rates applying to customers in response to changes in official and wholesale market rates. Our pension scheme assets include equity and debt securities, the cash flows of which change as equity prices and interest rates vary. Our insurance businesses are exposed to the risk that market fluctuations may cause mismatches to occur between product liabilities and the investment assets that back them. Market risks can affect our insurance products in a number of ways depending upon the product and the associated contract. For example, mismatches between assets and liability yields and maturities give rise to interest rate risk. Some of these risks are borne directly by the customer and some are borne by the insurance businesses, with their excess capital invested in the markets. Some insurance contracts involve guarantees and options that increase in value in adverse investment markets. There is a risk that the insurance businesses could bear some of the cost of such guarantees and options. The performance of the investment markets could thus have a direct effect upon the value embedded in the insurance and investment contracts and our operating results, financial condition and prospects. It is difficult to predict with any degree of accuracy changes in market conditions, and such changes could have a material adverse effect on our business, financial condition, results of operations, capital position and prospects. Liquidity, or ready access to funds, is essential to our businesses Our ability to borrow on a secured or unsecured basis, and the cost of doing so, can be affected by increases in interest rates or credit spreads, the availability of credit, regulatory requirements relating to liquidity or the market perceptions of risk relating to the Group or the banking sector, including our perceived or actual creditworthiness. Current accounts and savings deposits payable on demand or at short notice form a significant part of our funding, and we place considerable importance on maintaining their stability. For deposits, stability depends upon preserving investor confidence in our capital strength and liquidity, and on comparable and transparent pricing. We also access wholesale markets in order to provide funding for entities that do not accept deposits, to align asset and liability maturities and currencies, and to maintain a presence in local markets. In 2025, we issued the equivalent of $28.1bn of senior debt securities in the public capital markets in a range of currencies and maturities from a number of Group entities, including $25.7bn of senior securities issued by HSBC Holdings. An inability to obtain financing in the unsecured long-term or short-term debt capital markets, or to access the secured lending markets, could have a material adverse effect on our liquidity. Unfavourable macroeconomic developments, market disruptions or regulatory developments may increase our funding costs or challenge our ability to raise funds to support or expand our businesses. If we are unable to raise funds through deposits and/or in the capital markets, our liquidity position could be adversely affected, and we might be unable to meet deposit withdrawals on demand or at their contractual maturity, to repay borrowings as they mature, to meet our obligations under committed financing facilities and insurance contracts or to fund new loans, investments and businesses. We may need to liquidate unencumbered assets to meet our liabilities. In a time of reduced liquidity, we may be unable to sell some of our assets, or we may need to sell assets at reduced prices, which in either case could materially adversely affect our business, financial condition, results of operations, capital position and prospects. HSBC Holdings plc Annual Report on Form 20-F 131 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors Macro-prudential, regulatory and legal risks to our business model We are subject to numerous new and existing legislative and regulatory requirements, and to the risk of failure to comply with applicable regulations Our businesses are subject to ongoing regulation, policies, voluntary codes of practice and interpretations in the various markets in which we operate. A number of regulatory changes affecting our business have effects beyond the country in which they are enacted. Increased fragmentation in regulatory requirements may limit our ability to implement globally consistent standards in response to regulatory change. The areas where regulatory changes and increased supervisory expectations could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position, reputation and strategy include, but are not limited to, those listed below, grouped around prudential and non-prudential themes. Prudential and related issues In recent years, regulators and governments have focused on reforming both the prudential regulation of the financial services industry and the ways in which the business of financial services is conducted. The measures taken include enhanced capital, liquidity and funding requirements, the separation or prohibition of certain activities by banks, changes in the operation of capital markets activities, the introduction of tax levies and transaction taxes and changes in compensation practices. Specific examples of such measures and initiatives include: – the implementation of Basel 3.1, which includes changes to the RWA approaches to credit risk, market risk, operational risk, counterparty risk and credit valuation adjustments, and the application of an RWA output floor. The majority of the rules in the new framework will take effect from 1 January 2027, while the Internal Model Approach for market risk rules has been delayed until 1 January 2028; – the UK government‘s Financial Services Growth and Competitiveness Strategy, which was published in July 2025 and which re-iterated proposals to reform the UK capital framework for banks, including reforms to the UK’s bank ring fencing regime. Finally, the BoE’s Financial Policy Committee (‘FPC’) was asked to undertake a review of capital levels for banks in the UK. While the FPC published the initial findings of its review in December 2025, there remain a number of areas subject to further review, including the capital buffers, the leverage ratio and the application of the RWA output floor to the ring-fenced bank; – enhanced supervisory expectations regarding regulatory reporting, including increased focus on data integrity, governance, and controls. To seek to address these expectations, we have been advancing a programme aimed at strengthening our global regulatory reporting processes and making them more sustainable, including enhancing data, consistency and controls and, while this programme continues, there may be further impacts on some of our regulatory ratios, such as the common equity tier 1 (‘CET1’) ratio, the liquidity coverage ratio (‘LCR’), and the net stable funding ratio (‘NSFR’); – the financial effects of climate risk and other ESG-related changes being incorporated within the global prudential framework, including physical risks from climate change and the transition risks resulting from a shift to a low carbon economy; – heightened supervisory concern regarding the growth of private markets and their interconnection with banks, as demonstrated by the BoE’s launch of a system-wide exploratory scenario in 2026 and the PRA’s ‘Dear Chief Risk Officer’ letter on private equity related financing activities from the PRA in 2024; and – BCBS’s review of the cryptoassets RWA standard, following delays in implementation reported by various jurisdictions, which attribute the postponements to technological advancements in the cryptoassets sector that have made parts of the Basel standards outdated. Non-prudential and related issues With regard to the non-financial risk agenda, there is a focus on business practices (including customers and markets), operational and cyber resilience, AI, digital and technology changes, ESG, payments and financial crime, including: – continued focus by regulators, international bodies and policymakers on banks’ business practices. This includes ensuring fair outcomes for customers, fostering effective competition and maintaining the orderly and transparent functioning of global financial markets. We also continue to focus on employee culture and behaviour, whistleblowing, and inclusion; – the EU’s CRDVI Article 21c amendment requiring non-EU entities to provide core banking services to EU clients through an EU branch or subsidiary; – the high regulatory expectations and requirements relating to various aspects of operational and cyber resilience, and third-party risks, including an ongoing focus on the response of institutions to operational disruptions, including those arising out of the application of the EU’s Digital Operational Resilience Act (‘DORA’), which came into effect in January 2025; – regulatory expectations and requirements around the use of AI, including in connection with, the implementation of the EU’s AI Act and the US’s AI Action Plan; – the supervisory and regulatory focus on technology adoption and digital delivery, underpinned by consumer protection, including in respect of the use of digital assets and currencies and wider financial technology risks. For example, the UK FCA and PRA launched consultations in 2025 relating to stablecoin issuance, custody of cryptoassets, associated requirements and the regulation of systemic stablecoins. In the US, the Stablecoin (GENIUS) Act was signed into law in July 2025. In Hong Kong, the HKMA Stablecoin Ordinance came into effect in August 2025; – the ongoing transition of a small number of legacy contracts tied to benchmark rates that have been demised, which continues to expose HSBC to regulatory compliance, legal and conduct risks. In particular, if HSBC does not successfully transition its remaining legacy contracts to the appropriate replacement benchmarks, this could lead to reliance on fallback provisions which do not contemplate the permanent cessation of the relevant demised benchmark rate or on recently implemented legislative solutions the operation and enforceability of which may, in certain circumstances, remain uncertain, and this could result in unfavourable outcomes for clients and investors; – compliance with existing and future ESG-related risk management and disclosure requirements applicable to banks and businesses more generally, particularly those relating to climate change, transition plans, greenwashing and supply chain due diligence (such as requirements under the UK’s Sustainability Disclosure Requirements, proposed amendments to the EU’s Sustainable Finance Disclosure Regulation (‘SFDR’) and proposed changes to the Corporate Sustainability Reporting Directive (‘CSRD’) and the Corporate Sustainability Due Diligence Directive (‘CSDDD’) in the EU). The US Agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency) have rescinded the interagency Principles for Climate- Related Financial Risk Management for Large Financial Institutions published in 2023, although various individual US states have issued their own requirements, such as California's climate disclosure rules; – continuing supervisory and regulatory change globally on payment services and related infrastructure, including future changes in the EU as a result of the EU’s Third Payment Services Directive (‘PSD3’) and an accompanying Payment Services Regulation, which are expected to come into force in 2026; and – the ongoing expectations with respect to managing emerging financial crime risks and their impact on customers, managing conflicting laws and approaches to legal and regulatory regimes, and implementing complex sanctions and restrictions on trade and investment. HSBC Holdings plc Annual Report on Form 20-F 132 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors We are subject to the risk of current and future legal, regulatory or administrative actions and investigations, the outcomes of which are inherently difficult to predict We face significant risks in our business relating to legal, regulatory or administrative actions and investigations. The amounts of damages claimed in litigation, regulatory proceedings, investigations, administrative actions and other adversarial proceedings against financial institutions remain elevated for many reasons. These reasons include a substantial increase in the number of regulatory changes taking place globally, increasing focus from regulators, investors and other stakeholders on ESG disclosures, including in relation to the measurement and reporting of such matters as both local and international standards in this area continue to significantly evolve and develop, increased media attention, higher expectations from regulators and the public, and the globalisation of class actions, including in relation to competition matters and data breach litigation. In addition, criminal prosecutions of, and civil proceedings involving, financial institutions for, among other things, alleged conduct breaches, breaches of anti-money laundering, anti-bribery and anti-corruption and sanctions regulations, antitrust violations, market manipulation, aiding and abetting tax evasion, and providing unlicensed cross-border banking services, have become more commonplace and may increase in frequency due to increased media attention and higher expectations from regulators and the public. Any such legal, regulatory or administrative action or investigation against HSBC Holdings or one or more of our subsidiaries could result in, among other things, substantial fines, civil penalties, criminal penalties, cease and desist orders, forfeitures, the suspension or revocation of key licences, requirements to exit certain businesses, other disciplinary actions and/or withdrawal of funding from depositors and other stakeholders. Any threatened or actual litigation, regulatory proceeding, administrative action, investigation, or other adversarial proceedings against HSBC Holdings or one or more of our subsidiaries could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. Additionally, the Group’s financial statements reflect provisioning for legal proceedings, regulatory and customer remediation matters. Provisions for legal proceedings, regulatory and customer remediation matters, typically require a higher degree of judgement than other types of provisions, and the actual costs resulting from such proceedings and matters may exceed existing provisioning. Additionally, as described in Note 35 to the Financial Statements, we continue to be subject to a number of material legal proceedings, regulatory actions and investigations, the outcomes of which are inherently difficult to predict, particularly those cases in which the matters are brought on behalf of various classes of claimants, seek damages of unspecified or indeterminate amounts or involve novel legal claims. Moreover, we may face additional legal proceedings, investigations, or regulatory actions in the future, including in other jurisdictions and/or with respect to matters similar to, or broader than, the existing legal proceedings, investigations or regulatory actions. An unfavourable result in one or more of these proceedings could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. We may fail to meet the requirements of regulatory stress tests We are subject to supervisory stress tests in many jurisdictions, which are described on page 190 . These exercises are designed to assess the resilience of banks to potential adverse economic developments or operational failure to inform mitigation actions and ensure that they have robust, forward looking capital planning processes that account for the risks associated with their business profile. Assessment by supervisors is both on a quantitative and qualitative basis, the latter focusing on our data provision, stress testing capability and internal management processes and controls. Failure to meet quantitative or qualitative requirements of regulatory stress tests, or the failure by supervisors to approve our stress test results and capital plans, could result in the Group being required to enhance its capital position, and this could, in turn, have a material adverse effect on our business, financial returns, capital position, operational capabilities and reputation. HSBC and its UK subsidiaries may become subject to stabilisation provisions under the UK Banking Act 2009, in certain significant stress situations Under the Special Resolution Regime set out in the UK Banking Act 2009 (the ‘SRR’), HM Treasury, the BoE, the PRA and the FCA (together, the ‘Authorities’) are granted substantial powers to implement the following stabilisation options: (i) transfer of all or part of the business of a relevant entity or the shares of the relevant entity to a private sector purchaser; (ii) transfer of all or part of the business of the relevant entity to a ‘bridge bank’ wholly owned by the BoE temporarily, to allow for preparation for an onward sale to a private sector purchaser or an initial public offering; (iii) transfer of part of the assets, rights or liabilities of the relevant entity to one or more asset management vehicles for management of the transferor’s assets, rights or liabilities; (iv) the write-down, conversion, transfer, modification, or suspension of the relevant entity’s equity, capital instruments and liabilities (the so- called ‘bail-in power’); and (v) temporary public ownership of the relevant entity. The SRR also provides for modified insolvency and administration procedures for relevant entities, and confers ancillary powers on the Authorities, including the power to modify or override certain contractual arrangements in certain circumstances. The UK Banking Act 2009 gives power to HM Treasury to make further amendments to the law for the purpose of enabling it to use the SRR powers effectively, potentially with retrospective effect. These stabilisation options and powers may also be applied to a UK bank or investment firm or to certain of their affiliates (which, in respect of HSBC, could include HSBC Holdings) where certain conditions are met. In view of the HSBC Group’s corporate structure, which comprises a group of locally regulated operating banks, the preferred resolution strategy for the HSBC Group, as confirmed by its lead home and host regulators through the annual Crisis Management Group, is Multiple Point of Entry bail-in strategy. This approach provides flexibility for HSBC to be resolved either (i) through a bail-in at the HSBC Holdings level (using the above-mentioned bail-in power), which enables the recapitalisation of operating bank subsidiaries in the HSBC Group (as required) while restructuring actions are undertaken, with the HSBC Group remaining together; or (ii) at a local subsidiary level pursuant to the application of statutory resolution powers by local resolution authorities. Further details on HSBC’s resolution strategy can be found in the section entitled ‘Recovery and resolution’ on page 20 . In addition to the stabilisation options, the relevant Authority may, in certain circumstances, require the permanent write-down or conversion into equity of any outstanding tier 1 capital instruments and tier 2 capital instruments prior to the exercise of any stabilisation option (including the bail-in power), which may lead to the cancellation, transfer or dilution of HSBC Holdings’ ordinary share capital. In general, the UK Banking Act 2009 requires the Authorities to have regard to specified objectives in exercising the powers provided for by the Act. One of the objectives (which is required to be balanced as appropriate with the other specified objectives) refers to the protection and enhancement of the stability of the financial system of the UK. The UK Banking Act 2009 includes, in certain circumstances, and with respect to the exercise of certain powers provided for by the Act, provisions related to compensation in respect of transfer instruments and orders made under it. This includes a ‘no creditor worse off’ safeguard, which requires that no shareholder or creditor must be left worse off from the use of resolution powers than they would have been had the entity entered insolvency rather than resolution. However, if we are at or approaching the point where we may be deemed by our regulators to be failing, or likely to fail, so as to require regulatory intervention, any exercise of the above mentioned powers HSBC Holdings plc Annual Report on Form 20-F 133 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors by the Authorities may result in holders of our ordinary shares, or other instruments that may fall within the scope of the ‘bail in’ or other write- down and conversion powers granted under the UK Banking Act 2009, being materially adversely affected, including by the cancellation of shares, the write-down or conversion into shares of other instruments, the transfer of shares to a third party appointed by the BoE, the loss of rights associated with shares or other instruments (including rights to dividends or interest payments), the dilution of their percentage ownership of our share capital, and any corresponding material adverse effect on the market price of our ordinary shares and other instruments. We are subject to tax-related risks in the countries in which we operate We are subject to the substance and interpretation of tax laws in all countries in which we operate and are subject to routine review and audit by tax authorities in relation thereto. Our interpretation or application of these tax laws may differ from those of the relevant tax authorities and we provide for potential tax liabilities that may arise on the basis of the amounts expected to be paid to the tax authorities. The amounts ultimately paid may differ materially from the amounts provided depending on the ultimate resolution of such matters. In addition, potential changes to tax legislation, the approach taken by tax authorities in audits, and tax rates in the countries and territories in which we operate, in particular, those arising as a consequence of the OECD‘s Base Erosion and Profit Shifting project, could increase our effective tax rate in the future and have a material adverse effect on our business, financial condition, results of operations, prospects and capital position. Risks related to our operations Our operations are highly dependent on our information technology systems We operate in an extensive and complex technology landscape, which must remain resilient to support customers, the Group and markets globally. Risks can arise where technology is not understood, maintained, or developed appropriately. The reliability and security of the HSBC Group’s information technology infrastructure is crucial to the HSBC Group’s provision of financial services to our customers and protecting the HSBC brand. The effective functioning of our payment systems, financial control, risk management, credit analysis and reporting, accounting, customer service and other information technology systems, as well as the communication networks between our branches and main data processing centres, are important to our operations. Critical system failure, prolonged service unavailability or a material breach of data security, particularly of customer data, could compromise HSBC Group’s ability to serve its customers. Rapid advances in AI may further facilitate cyber-attacks or data compromise. Such scenarios could breach regulations and could cause long-term damage to HSBC Group’s business and brand that could have a material adverse effect on our financial condition, results of operations, prospects and reputation. We remain susceptible to a wide range of cyber risks The threat of cyber-attacks remains a concern for HSBC, as it does across the global financial sector. As cyber-attacks continue to evolve, failure to protect our operations may result in disruption for customers, manipulation of data or financial loss. This could adversely impact our customers and the Group. Adversaries attempt to achieve their objectives by compromising HSBC or our third-party suppliers. They use techniques that include malware (such as ransomware), exploitation of both known and unpublished (zero-day) software vulnerabilities, phishing emails, distributed denial of service attacks, as well as physical compromise of premises, or coercion of staff. Our customers may also be subject to these attack techniques. The Group, like other financial institutions, has experienced numerous common cyber-attacks, including for example, distributed denial of service and phishing attacks. Some of our third-party service providers have also experienced cyber-attacks. To date, we have not been materially affected by cybersecurity threats. However, we expect cyber-attacks to continue, and our business strategy, results of operations and financial condition could be materially affected by cybersecurity risks and any future material incidents. Cybersecurity risks will continue to increase due to several factors, including the growing delivery of services over the internet; increased dependence on internet-based products, applications and data storage; and the expanding use of AI, which could enable sophisticated cyber- attacks. Additionally, the adoption of hybrid working models by HSBC’s employees, contractors, and third-party service providers and their sub- contractors contributes to this trend. Failure to adhere to HSBC’s cybersecurity policies, procedures or controls, employee or third-party wrongdoing, human error, or governance or technological error could compromise HSBC’s ability to defend against cyber-attacks. Should any of these cybersecurity risks materialise, they could have a material adverse effect on our customers, business, financial condition, results of operations, prospects and reputation. We could incur losses or be required to hold additional capital as a result of model limitations or failure HSBC uses models for a range of purposes in managing its business, including regulatory capital calculations, stress testing, credit approvals, calculation of ECLs on an IFRS 9 basis, financial crime and fraud risk management and financial reporting. HSBC could face adverse consequences as a result of decisions that may lead to actions by management based on models that are poorly developed, implemented or used, or as a result of the modelled outcome being misunderstood, or the use of modelled information for purposes which it was not designed for, or by inherent limitations arising from the uncertainty inherent in predicting or estimating future outcomes. Regulatory scrutiny and supervisory concerns over banks’ use of models are considerable, particularly the internal models and assumptions used by banks in the calculation of regulatory capital. If regulatory approval for key capital models is not achieved in a timely manner or if those models are subject to negative feedback from regulators HSBC could face fines or be required to hold additional capital. Evolving regulatory requirements have resulted in changes to HSBC’s approach to model risk management, which poses execution challenges. The adoption of more sophisticated modelling approaches including AI and technology related developments by both HSBC and the financial services industry could also lead to increased model risk. HSBC’s commitment to changes to business activities due to climate and sustainability challenges will also have an impact on model risk going forward. Models will play an important role in risk management and financial reporting of climate-related risks. Uncertainty around the long-dated impacts of climate change and lack of robust and high- quality climate related data present challenges to creating reliable and accurate model outputs for these models. Model risk remains a key area of focus given the regulatory scrutiny in this area with local regulatory examinations taking place in many HSBC Holdings plc Annual Report on Form 20-F 134 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors jurisdictions and revised principles on model risk published by the PRA which came into force in 2024. Risks arising from the use of models could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position and reputation. See also ‘Economic and market conditions and geopolitical developments may adversely affect our financial condition and results’. Our operations use third-party suppliers and service providers HSBC relies on third parties to provide goods and services. The use of third-party providers by financial institutions is of particular focus to global regulators. This includes how outsourcing decisions are made, how key relationships are managed, our understanding of third-party dependencies, and the potential impacts o f third parties on our operational resilience. The inadequate management of third-party risk could impact our ability to meet strategic, regulatory and customer expectations. This may lead to a range of impacts, including regulatory censure, penalties or damage both to shareholder value and to our reputation. This could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position and reputation. Risks related to our governance and internal controls Our data management and data privacy controls must be sufficiently robust to support the increasing data volumes and evolving regulations As the HSBC Group becomes more data-driven and our business processes move to digital channels, the volume of data that we rely on has increased. As a result, management of data (including data storage and deletion, data quality, data privacy and data architecture) from creation to destruction must be robust and designed to identify quality and availability issues. Inadequate data management could result in negative impacts to customer service, business processes, or require manual intervention to reduce the risk of errors in reporting to senior management, executives or regulators. Expanding data privacy, national security and cybersecurity laws in a number of markets could pose potential challenges to intra-group data sharing. These developments could increase financial institutions’ compliance obligations in respect of cross-border transfers of personal information, which may affect our ability to manage financial crime risks across markets. In addition, failure to comply with data privacy laws and other legislation in the jurisdictions in which we operate may result in regulatory sanctions. Any of these failures could have a material adverse effect on our business, financial condition, results of operations, prospects, and reputation. Third parties may use us as a conduit for illegal activities without our knowledge We are required to comply with applicable financial crime laws and regulations, and have adopted various policies, procedures and controls aimed at preventing the exploitation of HSBC‘s products and services for criminal activity. Financial crime includes fraud, bribery and corruption, tax evasion and the facilitation of tax evasion, sanctions and export control violations and evasion, money laundering, terrorist financing and proliferation financing (see ‘Regulation and supervision - Financial crime regulation’). There are instances, as permitted by regulation, where we may rely upon third parties to undertake certain financial crime risk management activities on our behalf. Any controls implemented and maintained by HSBC to manage the risk created by such reliance may not prevent third parties from using us (and our relevant counterparties) as a conduit for financial crime, without our knowledge (and that of those counterparties). Becoming a party to, associated with, or accused of being associated with, financial crime could damage our reputation and could make us subject to fines, sanctions and / or legal or regulatory enforcement. Any one of these outcomes could have a material adverse effect on our strategy, business, customers, financial condition, results of operations, prospects and reputation. We are subject to the risk of financial crime We are exposed to financial crime risk from our customers, staff and third parties engaging in criminal activity (see also ‘Third parties may use us as a conduit for illegal activities without our knowledge’) and, as such, we continue facing increasing regulatory expectations. In 2025, financial crime risk continued to be exacerbated by increasingly complex geopolitical challenges, the macroeconomic outlook, the complex and dynamic nature of sanctions and export control compliance, evolving financial crime regulations, rapid technological developments, an increasing number of national data privacy requirements and the increasing sophistication of fraud and other criminal activities. Our ability to manage financial crime risk is dependent on the use and effectiveness of our financial crime risk assessments, systems and controls. Weak or ineffective financial crime processes and controls may risk HSBC inadvertently facilitating financial crime, which may result in regulatory investigation, sanction, litigation, fines and reputational damage. In addition, HSBC Bank USA, as the primary US dollar correspondent bank for the Group, is subject to heightened financial crime risk arising from business conducted on behalf of its non-US HSBC affiliates. HSBC Bank USA has implemented policies, procedures and controls reasonably designed to comply with financial crime legal and regulatory requirements and mitigate financial crime risk from its affiliates. Nevertheless, in the event that these controls are ineffective, this could lead to a breach of these requirements resulting in a potential enforcement action by the US Department of the Treasury or other US agencies that may include substantial fines or penalties. Any such action against HSBC Bank USA could have a material adverse effect on our strategy, business, customers, financial condition, results of operations, prospects and reputation. We may suffer losses due to employee misconduct Our businesses are exposed to risk from potential non-compliance with Group policies, including the HSBC Values, and associated behaviours and employee misconduct such as fraud, negligence or non-financial misconduct. These issues could lead to regulatory penalties and damage to our reputation or finances. In recent years, several global financial institutions have incurred significant losses due to rogue employee actions. While we strive to prevent and detect such misconduct, our measures may not always be effective, or a regulator could find HSBC‘s efforts to deter such activities inadequate. The risk of misconduct may be heightened if our prevent-and-detect measures are less effective, particularly in remote and home working environments. If any of these risks materialise, this could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. HSBC Holdings plc Annual Report on Form 20-F 135 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors The delivery of our strategic actions is subject to execution risk and we may not achieve all of the expected benefits of our strategic initiatives Management of strategic execution risk is required for us to be able to deliver our strategy, meet shareholder expectations and maintain stakeholder confidence. Executing our strategy and meeting our targets necessitates effective prioritisation, planning, and management. This process may be influenced by operational capacity, the efficacy of key controls, and structural challenges arising from any mergers or acquisitions. Additionally, there is a possibility of unforeseen changes in the market or regulatory environment in which we operate, while complex technological changes are underway. The global economic outlook remains uncertain, particularly concerning legislative changes and geopolitical tensions. The scale, complexity, and concurrent demands of such transformation initiatives can result in heightened execution risk. Our strategic actions seek to align with investor expectations, yet they carry increased execution risk due to the emphasis on cost management and funding capacity. Consequently, there is a risk that our cost and investment measures may not fully realise the anticipated benefits of our strategic initiatives. The development and implementation of our strategy requires difficult and complex judgements, including forecasts of economic conditions in various parts of the world. We may fail to correctly identify the relevant factors in making decisions as to capital deployment and cost reduction. We may also encounter unpredictable changes in the external environment that are disadvantageous to our strategy. There is a risk that the Group ’ s reorganisation announced in 2024 may not achieve some or all of its goals and may fail to deliver or achieve the expected benefits of the Group ’ s strategic initiatives. If any of these risks materialise, this could have a material adverse effect on our customers, business, financial condition, prospects, operational resilience and reputation. Our risk management measures may not be successful The management of risk is a fundamental component of all our activities, as outlined in our Risk Management Framework (‘RMF’). Risk represents our exposure to uncertainty and the potential variability in outcomes. Specifically, risk encompasses the negative impact on profitability or financial condition due to various sources of uncertainty, including retail and wholesale credit risk, treasury risk, traded risk, financial reporting and tax risk, resilience risk, strategic risk, legal risk, regulatory compliance risk, financial crime risk, people risk and model risk. We employ a comprehensive and diversified set of risk monitoring and mitigation techniques, supported by the Three Lines of Defence model, which defines clear accountabilities across risk ownership, oversight, and independent assurance. However, these methods and the judgements involved cannot foresee every adverse event or the specifics and timing of every outcome. Inadequate risk management could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position, strategy and reputation. Risks related to our business Our business has inherent reputational risk Reputational risk is the risk of failing to meet stakeholder expectations as a result of any event, behaviour, action or inaction, either by HSBC, our employees or those with whom we are associated. Any material lapse in standards of integrity, compliance, customer service or operating efficiency may represent a potential reputational risk. Stakeholder expectations constantly evolve, and so reputational risk is dynamic and varies between geographical regions, groups and individuals. In addition, our business faces increasing scrutiny in respect of ESG-related matters. If we fail to act responsibly, or to achieve our announced targets, commitments, goals or ambitions, in a number of areas, such as inclusion, climate, sustainability, workplace conduct, human rights, and support for local communities, our reputation and the value of our brand may be negatively affected. Social media and other broadcasting channels that facilitate communication with large audiences in short time frames and with minimal costs, may significantly enhance and accelerate the distribution and effect of damaging information and allegations. Reputational risk could also arise from negative public opinion about the actual, or perceived, manner in which we conduct our business activities, or our financial performance, as well as actual or perceived practices in banking and the financial services industry generally. Negative public opinion may adversely affect our ability to retain and attract customers, in particular, corporate and retail depositors, and to retain and motivate staff, and could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. Non-Financial risks are inherent in our business We are exposed to many types of non-financial risks that are inherent in our operations. Non-financial risk can be defined as the risk to HSBC of not achieving its strategy or objectives because of inadequate or failed internal processes, people and systems, or external events. It includes: breakdowns in processes or procedures, breaches of regulations or law, financial crime, financial reporting and tax errors, external events and systems failure or non-availability. These risks are also present when we rely on outside suppliers or vendors to provide services to us and our customers. These non-financial risks may result in financial losses to the Group and our customers, an adverse customer experience, reputational damage and potential litigation, regulatory proceedings, administrative action or other adversarial proceedings in any jurisdiction in which we operate, depending on the circumstances of the event. These could have a material adverse effect on our business, financial condition, results of operations, prospects, operational resilience, strategy and reputation. We rely on recruiting, retaining and developing appropriate senior management and skilled personnel Our ongoing success and the successful execution of our strategy are partly reliant on retaining key management team members and our broader workforce, as well as ensuring the availability of skilled management and personnel across our global businesses and functions. The complexity of our talent supply challenge is heightened by the shortage of talent and capabilities in our major markets, especially where specialist skills require global mobility. This challenge is further compounded by ongoing organisational changes, rapidly evolving skill requirements, regulatory developments, and heightened expectations for employing local nationals and fostering inclusion in certain jurisdictions. HSBC’s ability to continue to attract, train, motivate and retain highly qualified professionals may also depend on factors beyond our control, including economic, market and regulatory conditions. When acquiring or disposing of a Group operation, it is essential to comply with employment requirements, support affected employees and integrate new employees into HSBC‘s values, culture and working practices. Should global businesses or functions fail to adequately staff their operations, lose key senior executives without timely and satisfactory replacements, or fail to implement necessary organisational changes to support the Group’s strategy, this could have a material adverse effect on our business performance, reputation, operational resilience and overall control environment. HSBC Holdings plc Annual Report on Form 20-F 136 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors We have significant exposure to counterparty risk We are exposed to counterparties that are involved in virtually all major industries, and we routinely execute transactions with counterparties in financial services, including brokers and dealers, central clearing counterparties, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. Many of these transactions expose us to credit risk in the event of default by our counterparty or client. Our ability to engage in routine transactions to fund our operations and manage our risks could be materially adversely affected by the actions and commercial soundness of other financial services institutions. Financial institutions are necessarily interdependent because of trading, clearing, counterparty or other relationships. As a consequence, a default by, or decline in market confidence in, individual institutions, or anxiety about the financial services industry generally, can lead to further individual and/or systemic difficulties, defaults and losses. Mandatory central clearing of OTC derivatives poses risks to the Group. As a clearing member, we are required to underwrite losses incurred at a central counterparty by the default of other clearing members and their clients. An increased move towards central clearing brings with it a further element of interconnectedness between clearing members and clients that we believe may increase rather than reduce our exposure to systemic risk. At the same time, our ability to manage such risk ourselves will be reduced because control has been largely outsourced to central counterparties, and it is unclear at present how, at a time of stress, regulators and resolution authorities will intervene. Where bilateral counterparty risk has been mitigated by taking collateral, our credit risk may remain high if the collateral we hold cannot be realised or has to be liquidated at prices that are insufficient to recover the full amount of our loan or derivative exposure. There is a risk that collateral cannot be realised, including situations where this arises by change of law or the imposition of sanctions, that may influence our ability to foreclose on collateral or otherwise enforce contractual rights. The Group also has credit exposure arising from mitigants, such as credit default swaps, and other credit derivatives, each of which is carried at fair value. The risk of default by counterparties to credit default swaps and other credit derivatives used as mitigants affects the fair value of these instruments depending on the valuation and the perceived credit risk of the underlying instrument against which protection has been purchased. Any such adjustments or fair value changes could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position and reputation. Any reduction in the credit rating assigned to HSBC Holdings, any subsidiaries of HSBC Holdings or any of their respective debt securities could increase the cost or decrease the availability of our funding and materially adversely affect our liquidity position and/or net interest margin Credit ratings affect the cost and other terms upon which we are able to obtain market funding. Rating agencies regularly evaluate HSBC Holdings and certain of its subsidiaries, as well as their respective debt securities. Their ratings are based on a number of factors, including their assessment of the relative financial strength of the Group or of the relevant subsidiary, as well as conditions affecting the financial services industry generally. There can be no assurance that the rating agencies will maintain HSBC Holdings’ or the relevant subsidiary’s current ratings, or outlook based on bank rating methodologies applied by ratings agencies. Any reductions in these current ratings or the outlook could increase the cost of our funding, limit access to capital markets and require additional collateral to be placed and, consequently, materially adversely affect our interest margins and our liquidity position. Risks concerning borrower credit quality are inherent in our businesses Risks arising from changes in credit quality and the recoverability of loans and amounts due from borrowers and counterparties (for example, reinsurers and counterparties in derivative transactions) are inherent in a wide range of our businesses. Adverse changes in the credit quality of our borrowers and counterparties or reduced recoverability of our assets arising from a general deterioration in economic conditions or systemic risks in the financial systems, could require an increase in our ECLs (see ’Economic and market conditions and geopolitical developments may adversely affect our financial condition and results’). We estimate and recognise ECLs in our credit exposure. This process, which is critical to our results and financial condition, requires difficult, subjective and complex judgements, including forecasts of how the macroeconomic and geopolitical conditions might impair the ability of our borrowers to repay their loans and the ability of other counterparties to meet their obligations. This assessment considers multiple alternative forward-looking economic conditions (including GDP estimates) and incorporates this into the ECL estimates to meet the measurement objective of IFRS 9. As is the case with any such assessments, we may fail to estimate accurately the effect of factors that we identify or fail to identify relevant factors. Further, the information we use to assess the creditworthiness of our counterparties may be inaccurate or incorrect. Any failure by us to accurately estimate the ability of our counterparties to meet their obligations could have a material adverse effect on our business, financial condition, results of operations and prospects. Our insurance businesses are subject to risks relating to insurance claim rates and changes in insurance customer behaviour We provide various insurance products for customers, including several types of life insurance products. The cost to support insurance claims and benefits can be influenced by many factors, including mortality and morbidity rates, lapse and surrender rates and the performance of assets to support the liabilities. Adverse developments in any of these factors could materially adversely affect our business, financial condition, results of operations, capital position, prospects and reputation. HSBC Holdings is a holding company and, as a result, is dependent on loan/ instrument payments and dividends from its subsidiaries to meet its obligations, including obligations with respect to its debt securities, and to provide profits for payment of future dividends to shareholders HSBC Holdings is a non-operating holding company and, as such, its principal source of income is from operating subsidiaries that hold the principal assets of the Group. As a separate legal entity, HSBC Holdings relies on remittance of its subsidiaries’ loan/instrument interest payments and dividends in order to be able to pay obligations to debt holders as they fall due, and to pay dividends to its shareholders. The ability of HSBC Holdings’ subsidiaries and affiliates to pay interest and dividends to HSBC Holdings is subject to such subsidiaries’ and affiliates’ financial performance and could also be restricted by applicable laws, regulations, exchange controls and other requirements. HSBC Holdings plc Annual Report on Form 20-F 137 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Risk factors We may be required to make substantial contributions to our pension plans We operate a number of pension plans throughout the world for our personnel, including defined benefit pension plans. Pension scheme obligations fluctuate with changes in long-term interest rates, inflation, salary levels and the longevity of scheme members. They can also be affected by operational and legal risks. The level of contributions we make to our pension plans has a direct effect on our cash flow. To the extent plan assets are insufficient to cover existing liabilities, higher levels of contributions may be required. As a result, deficits in those pension plans could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. Risk related to our financial statements and accounts Our financial statements are based in part on judgements, estimates and assumptions that are subject to uncertainty The preparation of financial information requires management to make judgements and use estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Due to the inherent uncertainty in making estimates, particularly those involving the use of complex models, actual results reported in future periods could differ from the expectations on which management’s estimates are based. Judgements, estimates, assumptions and models are continually evaluated, and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the prevailing circumstances. The impacts of revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Accounting policies deemed critical to our results and financial position are those that involve a high degree of uncertainty and have a material impact on the financial statements. In 2025, these included impairment of amortised cost financial assets and financial assets measured at FVOCI, impairment of goodwill and non-financial assets, valuation of financial instruments, deferred tax assets, provisions, impairment of interests in associates, post-employment benefit plans, and impairment of investments in subsidiaries, which are discussed in detail in ‘Critical estimates and judgements’ on page 66 . The measurement of ECLs requires the selection and calibration of complex models and the use of estimates and assumptions to incorporate relevant information about past events, current conditions and forecasts of economic conditions. Additionally, significant judgement is involved in determining what is considered to be significant increases in credit risk and what the point of initial recognition is for revolving facilities. The assessment of whether goodwill and non-financial assets are impaired, and the measurement of any impairment, involve the application of judgement in determining key assumptions, including discount rates, estimated cash flows for the periods for which detailed cash flows are available and projecting the long-term pattern of sustainable cash flows thereafter. The recognition and measurement of deferred tax assets involve significant judgement regarding the probability and sufficiency of future taxable profits, taking into account the future reversal of existing taxable temporary differences and tax planning strategies, including corporate reorganisations. The recognition and measurement of provisions involve significant judgements due to the high degree of uncertainty in determining whether a present obligation exists, and in estimating the probability and amount of any outflows that may arise. The valuation of financial instruments measured at fair value can be subjective, in particular where models are used that include unobservable inputs. The assessment of interests in associates for impairment involves significant judgements in determining the value in use, in particular estimating the present values of cash flows expected to arise from continuing to hold the investment, based on a number of management assumptions. The Group’s impairment test on the carrying amount at 30 June 2025 resulted in an impairment of $1.0bn, as the recoverable amount as determined by a value-in-use calculation was lower than the carrying amount. No further impairment (or reversal) was required for the period from 1 July 2025 to 31 December 2025. Impairment reviews are complex and require significant judgments, such as the appropriateness of projected future cash flows, discount rate, and regulatory capital assumptions. There can be no assurance that no additional impairment will be required in future financial periods. See Note 18 to the Financial Statements for further details. The calculation of the defined benefit pension obligation involves the determination of key assumptions, including discount rate, inflation rate, pay, pension payments and deferred pension, and mortality. The assessment of interests in subsidiaries for impairment involves significant judgements in determining the value in use, in particular estimating the present values of cash flows expected to arise from continuing to hold the investment, based on a number of management assumptions. Given the uncertainty and subjectivity associated with the above critical accounting judgements and estimates, future outcomes may differ materially from those assumed using information available at the reporting date. These judgements and estimates could have a material adverse effect on the future financial position of the Group, results of operations, capital position, prospects and reputation. For further details, see ‘Critical estimates and judgements’ on page 66 . Changes in accounting standards may have a material impact on how we report our financial results and financial condition We prepare our consolidated financial statements in conformity with UK-adopted international accounting standards and with the requirements of the UK Companies Act 2006, and have also applied international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. Our consolidated financial statements are also prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB‘) (‘IFRS Accounting Standards’), including interpretations issued by the IFRS Interpretations Committee. From time to time, the IASB or the IFRS Interpretations Committee may issue new accounting standards or interpretations that could materially impact how we calculate, report and disclose our financial results and financial condition, and which may affect our capital ratios, including the CET1 ratio. We could also be required to apply new or revised standards retrospectively, resulting in our restating prior period financial statements in material amounts. This could have a material adverse effect on our business, financial condition, results of operations and capital position. HSBC Holdings plc Annual Report on Form 20-F 138 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Our material banking risks The material risk types associated with our banking and insurance manufacturing operations are described in the following tables: Description of risks – banking operations Risks Arising from Measurement, monitoring and management of risk Credit risk u See page 140 Credit risk is the risk of financial loss if a customer or counterparty fails to meet an obligation under a contract. Credit risk arises principally from direct lending, trade finance and leasing business, but also from other products such as guarantees and derivatives. Credit risk is: – measured as the amount that could be lost if a customer or counterparty fails to make repayments; – monitored using various internal risk management measures and within limits approved by individuals within a framework of delegated authorities; and – managed through a risk control framework, which seeks to outline clear and consistent policies, principles and guidance for risk managers; and by setting limits and appetite across geographical markets, portfolios or sectors. Treasury risk u See page 189 Treasury risk is the risk of having insufficient capital, liquidity or funding resources to meet financial obligations and satisfy regulatory requirements, including the risk of an adverse impact on earnings or capital due to structural and transactional foreign exchange exposures and changes in market interest rates, together with pension and insurance risk. Treasury risk arises from changes to the respective resources and risk profiles driven by customer behaviour, management decisions or the external environment. Treasury risk is: – measured through risk appetite and more granular limits, set to provide an early warning of increasing risk, minimum ratios of relevant regulatory metrics, and metrics to monitor the key risk drivers impacting treasury resources; – monitored and projected against appetites and by using operating plans based on strategic objectives together with stress and scenario testing; and – managed through control of resources in conjunction with risk profiles, strategic objectives and cash flows. Market risk u See page 200 Market risk is the risk of an adverse financial impact on trading activities arising from changes in market parameters such as interest rates, foreign exchange rates, asset prices, volatilities, correlations and credit spreads. Market risk arises from both trading portfolios and non-trading portfolios. Market risk for trading portfolios is discussed in the Market risk section on page 201 . Market risk for non-trading portfolios is discussed in the Treasury risk section on page 198 . Market risk exposures arising from our insurance operations are discussed on page 217 . Market risk is: – measured using sensitivities, value at risk (‘VaR’) and stress testing, giving a detailed picture of potential gains and losses for a range of market movements and scenarios, as well as tail risks over specified time horizons; – monitored using VaR, stress testing and other measures; and – managed using risk limits approved by the Group Risk Management Meeting and the risk management meetings in various business segments. Climate risk u See page 203 Climate risk relates to the financial and non-financial impacts that may arise as a result of climate change and the move to a net zero economy. Climate risk can materialise through: – physical risk, which arises from the increased frequency and severity of extreme weather events, such as hurricanes and floods, or chronic gradual shifts in weather patterns or rises in the sea level; – transition risk, which arises from the process of moving to a net zero economy, including changes in government policy and legislation, technology, market demand, and reputational implications triggered by a change in stakeholder expectations, action or inaction; and – the risk of greenwashing, which arises from the act of knowingly or unknowingly making inaccurate, unclear, misleading or unsubstantiated claims regarding sustainability to stakeholders. Climate risk is: – measured using risk metrics and stress testing; – monitored against risk appetite statements; – managed through adherence to risk appetite thresholds, through specific policies, and through enhancements to processes and development of tools; and – this includes the development of product controls to manage the risk of greenwashing and the development of portfolio steering capabilities to manage our net zero ambitions. Sustainability execution risk u See page 206 Sustainability execution risk is the risk of not meeting our sustainability ambitions, targets and commitments as set out in firm-level external reporting, sustainability risk policies and associated internal policies, and other ESG commitments. Sustainability execution risk can arise from: – financing or engaging in business activities with clients and/or transactions that are not aligned or that are inconsistent with our sustainability risk appetite and policies; – incorrectly including products or transactions as counting towards our sustainable finance ambition; – engaging in activities that do not support our ambition to become a net zero bank by 2050. Sustainability execution risk is: – measured through progress against sustainability ambitions, targets and commitments using risk metrics; – monitored against targets to reduce emissions and risk appetite which includes sectoral decarbonisation pathways; and – managed through a risk control framework, appropriate policies and continual monitoring. HSBC Holdings plc Annual Report on Form 20-F 139 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Our material banking risks Description of risks – banking operations (continued) Risks Arising from Measurement, monitoring and management of risk Resilience risk u See page 213 Resilience risk is the risk of sustained and significant business disruption causing the inability to provide critical services to our customers, affiliates, and counterparties. Resilience risk arises from failures or inadequacies in processes, people, systems or external events. Resilience risk is: – measured using a range of metrics and against our agreed risk appetite; – monitored through oversight of enterprise processes, risks, controls and strategic change programmes; and – managed by continual monitoring and thematic reviews. Regulatory compliance risk u See page 213 Regulatory compliance risk is the risk associated with breaching our duty to clients and other counterparties, inappropriate market conduct (including unauthorised trading) and breaching related financial services regulatory standards. Regulatory compliance risk arises from the failure to observe relevant laws, codes, rules and regulations, potentially resulting in adverse market or conduct outcomes, fines, penalties and reputational harm. Regulatory compliance risk is: – assessed and measured with reference to risk appetite, identified metrics, incident assessments, regulatory feedback and the judgement of our regulatory compliance teams; – monitored against the first line of defence risk and control assessments and testing, alongside the outcome of the second line of defence monitoring and control assurance activities, as well as internal and external audits and regulatory inspections; and – managed by establishing and communicating appropriate policies and procedures, training employees accordingly, and monitoring activities to help ensure compliance. Financial crime risk u See page 214 Financial crime risk is the risk that HSBC’s products and services will be exploited for criminal activity. This includes fraud, bribery and corruption, tax evasion and the facilitation of tax evasion, sanctions and export control violations and evasion, money laundering, terrorist financing and proliferation financing. Financial crime risk arises from day-to- day banking operations involving customers, third parties and employees. Financial crime risk is: – measured by reference to risk appetite, identified metrics, incident assessments, regulatory feedback and the judgement of, and assessment by, our financial crime teams; – monitored against the first line of defence risk and control assessments, and the results of the monitoring and control assurance activities of the second line of defence functions; and – managed by establishing and communicating appropriate policies and procedures, training employees and monitoring activity to help embed them. Proactive risk control and/or remediation work is undertaken where required. Model risk u See page 214 Model risk is the risk of the potential for adverse consequences from model errors or the inappropriate use of modelled outputs to inform business decisions. Model risk arises in both financial and non-financial contexts whenever business decision making includes reliance on models. Model risk is: – measured by reference to model performance tracking and the output of detailed technical reviews and regulatory feedback, with key metrics including model validation outcomes and monitoring results; – monitored against model risk appetite statements, insight from the independent validations completed by the model risk management team; and – managed by creating and communicating appropriate policies, procedures and guidance, training colleagues in their application, supervising their adoption to help ensure operational effectiveness, and ensuring models are approved for use. Our insurance manufacturing subsidiaries are regulated separately from our banking operations. Risks in our insurance entities are managed using methodologies and processes that are subject to Group oversight. Our insurance operations are also subject to many of the same risks as our banking operations, and these are covered by the Group’s risk management processes. However, there are specific risks inherent to the insurance operations as noted below. Description of risks – insurance manufacturing operations Risks Arising from Measurement, monitoring and management of risk Financial risk u See page 217 For insurance entities, financial risk includes the risk of not being able to effectively match liabilities arising under insurance contracts with appropriate investments and that the expected sharing of financial performance with policyholders under certain contracts is not possible. Exposure to financial risk arises from: – market risk affecting the fair values of financial assets or their future cash flows; – credit risk; and – liquidity risk of entities being unable to make payments to policyholders as they fall due. Financial risk is: – measured for market risk, in terms of fluctuation in key financial reporting metrics; for credit risk, in terms of the market value that could be lost if a counterparty fails to make repayments; and for liquidity risk, in terms of internal metrics including stressed operational cash flow projections; – monitored through a framework of approved limits and delegated authorities; and – managed through a risk control framework, which seeks to outline clear and consistent policies, principles and guidance. This includes using product design, asset liability matching and bonus rates. Insurance risk u See page 218 Insurance risk is the risk that, over time, the cost of insurance policies written, including claims and benefits, may exceed the total amount of premiums and investment income received. The cost of claims and benefits can be influenced by many factors, including mortality and morbidity experience, as well as lapse and surrender rates. Insurance risk is: – measured in terms of the variance between actual experience and expected assumptions and impact on key financial reporting metrics; – monitored through a framework of approved limits and delegated authorities; and – managed through a risk control framework, which seeks to outline clear and consistent policies, principles and guidance. This includes using product design, underwriting, reinsurance and claims-handling procedures. HSBC Holdings plc Annual Report on Form 20-F 140 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Ñ See page 138 for our definition of Credit risk. Credit risk management Key developments in 2025 There were no material changes to the policies and practices for the management of credit risk in 2025 . We continued to apply the requirements of IFRS 9 ‘Financial Instruments’ within the Credit Risk sub-function. We actively managed the risks related to macroeconomic uncertainties, including interest rates, inflation, fiscal and monetary policy, broader geopolitical uncertainties and conflicts. Ñ For further details, see ‘Top and emerging risks’ on page 121 . Governance and structure We have established Group-wide credit risk management and related IFRS 9 processes. We continue to assess the impact of economic developments in key markets on specific customers, customer segments or portfolios. As credit conditions change, we take mitigating actions, including the revision of risk appetites or limits and tenors, as appropriate. In addition, we continue to evaluate the terms under which we provide credit facilities within the context of individual customer requirements, the quality of the relationship, local regulatory requirements, market practices and our local market position. Credit Risk sub-function (Audited) The Credit Risk sub-function in Group Risk and Compliance is responsible for the key policies and processes for managing credit risk, which include formulating Group credit policies and risk rating frameworks, guiding the Group’s appetite for credit risk exposures, undertaking independent reviews and objective assessment of credit risk, and monitoring performance and management of portfolios while fostering a culture of responsible lending. Key risk management processes IFRS 9 ‘Financial Instruments’ process The IFRS 9 'Financial Instruments' process focuses on three main areas: modelling, data and forward economic guidance; implementation; and governance. Modelling, data, and forward economic guidance This involves establishing IFRS 9 modelling and data processes across various geographies, including internal model risk governance and independent reviews. A centralised process generates unbiased global economic scenarios, which are reviewed quarterly for consistency with current economic conditions and risks. These scenarios are subject to final review and approval by senior management in a forward economic guidance global business impairment committee. Implementation A centralised impairment engine calculates expected credit losses using data from various systems, which is subject to validation checks and enhancements from a variety of client, finance and risk systems. Where possible, these checks and processes are performed in a globally consistent and centralised manner. Governance Regional management review forums, including representatives from Credit Risk and Finance, review and approve impairment results. These approvals are reviewed by retail and wholesale impairment committees for final approval. Required committee members include the relevant Chief Risk Officers, Chief Financial Officers and the Global Financial Controller. Concentration of exposure (Audited) C oncentration of credit risk occurs when multiple counterparties share similar economic traits or operate in the same sectors or regions, making them collectively vulnerable to changes in economic or political conditions. To mitigate this risk, the Group uses various controls such as portfolio and counterparty limits, approval and review processes, and stress testing across industries, countries and businesses. C redit quality of financial instruments (Audited) Our risk rating system facilitates the internal ratings-based approach under the Basel framework to support the calculation of our minimum capital requirement. The five credit quality classifications encompass a range of granular internal credit rating grades assigned to wholesale and retail customers, and the external ratings attributed by external agencies to debt securities. For debt securities and certain other financial instruments, external ratings have been aligned to the five quality classifications based upon the mapping of related customer risk rating (‘CRR’) to external credit rating. Wholesale lending The CRR 10-grade scale summarises a more granular underlying 23-grade scale of obligor probability of default (‘PD’). All corporate customers are rated using the 10- or 23-grade scale, depending on the degree of sophistication of the Basel approach adopted for the exposure. Each CRR band is associated with an external rating grade by reference to long-run default rates for that grade, represented by the average of issuer-weighted historical default rates. This mapping between internal and external ratings is indicative and may vary over time. Retail lending Retail lending credit quality is based on a 12-month point-in-time probability-weighted PD. HSBC Holdings plc Annual Report on Form 20-F 141 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Credit quality classification Sovereign debt securities and bills Other debt securities and bills Wholesale lending and derivatives Retail lending External credit rating External credit rating Internal credit rating 1 12-month regulatory probability of default % Internal credit rating 12 month probability- weighted PD % 2 Quality classification Strong BBB and above A- and above CRR 1 to CRR 2 0–0.169 Band 1 and 2 0 – <=0.5 Good BBB- to BB BBB+ to BBB- CRR 3 0.170–0.740 Band 3 >0.5 – <=1.5 Satisfactory BB- to B and unrated BB+ to B and unrated CRR 4 to CRR 5 0.741–4.914 Band 4 and 5 >1.5 – <=20 Sub-standard B- to C B- to C CRR 6 to CRR 8 4.915–99.999 Band 6 >20 – <100 Credit impaired Default Default CRR 9 to CRR 10 100 Band 7 100 1 Customer risk rating (‘CRR’). 2 12-month point-in-time probability-weighted PD. Quality classification definitions – ‘Strong’ exposures demonstrate a strong capacity to meet financial commitments, with negligible or low probability of default and/or low levels of expected loss. – ‘Good’ exposures require closer monitoring and demonstrate a good capacity to meet financial commitments, with low default risk. – ‘Satisfactory’ exposures require closer monitoring and demonstrate an average-to-fair capacity to meet financial commitments, with moderate default risk. – ‘Sub-standard’ exposures require varying degrees of special attention and default risk is of greater concern. – ‘Credit-impaired’ exposures have been assessed as described in Note 1.2(j) to the financial statements. Forborne loans and advances (Audited) Forbearance measures consist of concessions towards an obligor that is experiencing, or about to experience, difficulties in meeting its financial commitments. We continue to class loans as forborne when we modify the contractual payment terms due to having concerns about the borrowers’ ability to meet contractual payments when they were due. Our definition of forborne captures non-payment-related concessions, such as covenant waivers. Ñ For details of our policy on forbearance, see Note 1.2(j) in the financial statements . Credit quality of forborne loans For wholesale lending, where payment-related forbearance measures result in a diminished financial obligation, or if there are other indicators of impairment, the loan will be classified as credit impaired if it is not already so classified. All facilities with a customer, including loans that have not been modified, are considered credit impaired following the identification of a payment-related forborne loan. For retail lending, where a material payment-related concession has been granted, the loan will be classified as credit impaired. In isolation, non-payment related forbearance measures may not result in the loan being classified as credit impaired unless combined with other indicators of credit impairment. These are classed as performing forborne loans for both wholesale and retail lending. Wholesale and retail lending forborne loans are classified as credit impaired until there is sufficient evidence to demonstrate a significant reduction in the risk of non-payment of future cash flows, observed over a minimum one-year period, and there are no other indicators of impairment. Any forborne loans not considered credit impaired will remain forborne for a minimum of two years from the date that credit impairment no longer applies. For wholesale and retail lending, any forbearance measures granted on a loan already classed as forborne results in the customer being classed as credit impaired. Forborne loans and recognition of expected credit lo sses (Audited) Forborne loans expected credit loss assessments reflect the higher rates of losses typically experienced with these types of loans; as such they are categorised as stage 2 and stage 3. The higher rates are more pronounced in unsecured retail lending requiring further segmentation. For wholesale lending, forborne loans are typically assessed individually. Credit risk ratings are intrinsic to the impairment assessments. The individual impairment assessment takes into account the higher risk of the future non-payment inherent in forborne loans. Impairment assessment (Audited) For details of our impairment policies on loans and advances and financial investments, see Note 1.2(j) on the financial statements. Write-off of loans and advances (Audited) Under IFRS 9, write-off should occur when there is no reasonable expectation of recovering further cash flows from the financial asset. This principle does not prohibit early write-off, which is defined in local policies to ensure effectiveness in the management of customers in the collections process. Unsecured personal facilities, including credit cards, are generally written off at between 150 and 210 days past due. The standard period runs until the end of the month in which the account becomes 180 days contractually delinquent. However, in exceptional circumstances, to avoid unfair customer outcomes, deliver customer duty or meet regulatory expectations, the period may be extended further. For secured facilities, write-off should occur upon repossession of collateral, receipt of proceeds via settlement, or determination that recovery of the collateral will not be pursued. Where these assets are maintained on the balance sheet beyond 60 months of consecutive delinquency-driven default, the prospect of recovery is reassessed. Recovery activity, on both secured and unsecured assets, may continue after write-off. Any unsecured exposures that are not written off at 180 days past due, and any secured exposures that are in ‘default’ status for 60 months or greater but are not written off, are subject to additional monitoring via the appropriate governance forums. HSBC Holdings plc Annual Report on Form 20-F 142 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Credit risk in 2025 At 31 December 2025 , gross loans and advances to banks and customers of $1,108bn increased by $65.1bn on a reported basis compared with 31 December 2024 . Gross loans and advances to customers increased by $58.7bn and gross loans and advances to banks increased by $6.4bn. This included total favourable foreign exchange movements of $44.1bn. On a constant currency basis, the increase of $21.0bn was driven by an $11.4bn rise in wholesale loans and advances to customers and a $6.8bn rise in personal loans and advances to customers. There was a further increase of $2.8bn in loans and advances to banks. The rise in wholesale loans and advances to customers was driven by an increase in balances in HSBC UK (up $8.4bn) and in Asia (up $3.8bn), across multiple industry sectors. The rise in personal loans and advances to customers was driven by mortgage growth of $8.8bn, mainly in HSBC UK (up $8.5bn), and higher other personal lending in our entities in Asia (up $4.8bn). This was partly offset by the disposal of our retained portfolio of home and certain other loans in France ($7.2bn). There was a decrease in stage 2 loans and advances to banks and customers of $17.1bn on a constant currency basis. This was mainly driven by model recalibration for retail portfolios where the probability of default (‘PD’) was aligned to the most recent observed performance. This resulted in a shift of balances from stage 2 to stage 1, mainly in HSBC UK mortgages. The balances transferred consisted of up-to-date loans mainly in the ‘Strong’ and ‘Good’ credit quality buckets. At 31 December 2025 , the allowance for ECL of $11.2bn increased by $0.9bn compared with 31 December 2024 , including adverse foreign exchange movements of $0.4bn, and write-offs of $3.6bn. The $11.2bn allowance comprised $10.8bn in respect of assets held at amortised cost and $0.4bn in respect of loan commitments and financial guarantees. On a constant currency basis, the allowance for ECL in relation to loans and advances to customers increased by $0.6bn from 31 December 2024 . This was attributable to: – a $0.5bn increase in wholesale loans and advances to customers, which included a $0.8bn increase in stage 3 and a $0.3bn decrease in stages 1 and 2; and – a $0.1bn increase in personal loans and advances to customers driven by stages 1 and 2. The ECL charge for 2025 was $3.9bn (2024: $3.4bn), inclusive of recoveries. The ECL charge comprised: $2.4bn in respect of wholesale lending, of which the stage 3 charge was $2.1bn; and $1.5bn in respect of personal lending, of which $0.9bn was in stage 3. Wholesale lending charges were recognised mainly in our legal entities in Hong Kong ($1.2bn). This included charges related to the Hong Kong CRE sector of $0.7bn. This reflected updates to our models used for ECL calculations, an increase in allowances for new defaulted exposures, as well as continued negative migration in the portfolio as market conditions remained challenging. ECL charges in the mainland China CRE sector of $0.2bn were mainly driven by a new default. Ñ Income statement movements are analysed further on page 68 . While credit risk arises across most of our balance sheet, ECL have typically been recognised on loans and advances to customers and banks, in addition to securitisation exposures and other structured products. As a result, our disclosures focus primarily on these two areas. For further details of: – maximum exposure to credit risk, see page 148 ; – measurement uncertainty and sensitivity analysis of ECL estimates, see page 148 ; – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees, see page 158 ; – credit quality, see page 161 ; – total wholesale lending for loans and advances to banks and customers by stage distribution, see page 169 ; – wholesale and personal lending collateral, see page 167 ; and – total personal lending for loans and advances to customers at amortised cost by stage distribution, see page 179 . HSBC Holdings plc Annual Report on Form 20-F 143 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Summary of credit risk The following disclosure presents the gross carrying/nominal amount of financial instruments to which the impairment requirements in IFRS 9 are applied and the associated allowance for ECL. Summary of financial instruments to which the impairment requirements in IFRS 9 are applied – by business segment At 31 Dec 2025 At 31 Dec 2024 Gross carrying/nominal amount Allowance for ECL 1 Gross carrying/nominal amount Allowance for ECL 1 Hong Kong UK CIB IWPB Corporate Centre Total Hong Kong UK CIB IWPB Corporate Centre Total Hong Kong UK CIB IWPB Corporate Centre Total Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m Loans and advances to customers at amortised cost 233,389 305,700 308,169 151,657 176 999,091 (3,898) (2,002) (3,146) (1,610) (36) (10,692) 238,416 269,141 287,842 137,789 7,185 940,373 (3,208) (1,848) (3,141) (1,464) (54) (9,715) Loans and advances to banks at amortised cost 11,478 7,696 67,733 16,630 4,932 108,469 — — (4) (2) (1) (7) 13,034 7,505 63,524 15,713 2,276 102,052 (1) (2) (7) (1) (2) (13) Other financial assets measured at amortised cost 58,210 106,752 599,580 59,114 66,670 890,326 (28) (10) (65) (25) (1) (129) 52,869 100,322 553,664 58,713 63,012 828,580 (25) (9) (39) (19) — (92) –  cash and balances at central banks 6,717 52,218 165,027 18,174 723 242,859 — — — — — — 5,565 63,981 177,095 20,260 773 267,674 — — — — — — –  Hong Kong Government certificates of indebtedness — — — — 44,063 44,063 — — — — — — — — — — 42,293 42,293 — — — — — — –  reverse repurchase agreements – non-trading 6,076 26,197 258,424 6,354 1,341 298,392 — — — — — — 2,896 13,188 229,672 5,844 949 252,549 — — — — — — –  financial investments 38,967 24,871 72,693 28,344 17,226 182,101 (2) (1) (4) (5) — (12) 40,345 20,072 56,537 25,059 11,969 153,982 (1) (1) (4) (3) — (9) –  assets held for sale 2 — 14 3,229 864 8 4,115 — — (18) (9) — (27) — 5 670 2,595 3 3,273 — — (4) — — (4) –  prepayments, accrued income and other assets 3 6,450 3,452 100,207 5,378 3,309 118,796 (26) (9) (43) (11) (1) (90) 4,063 3,076 89,690 4,955 7,025 108,809 (24) (8) (31) (16) — (79) Total on- balance sheet 303,077 420,148 975,482 227,401 71,778 1,997,886 (3,926) (2,012) (3,215) (1,637) (38) (10,828) 304,319 376,968 905,030 212,215 72,473 1,871,005 (3,234) (1,859) (3,187) (1,484) (56) (9,820) Loan and other credit-related commitments 108,011 103,230 353,721 125,138 692 690,792 (24) (92) (196) (3) — (315) 109,369 90,848 307,197 111,762 191 619,367 (29) (116) (187) (16) — (348) Financial guarantees 622 1,199 13,946 1,709 — 17,476 (1) (16) (33) (1) — (51) 1,171 939 13,186 1,702 — 16,998 (2) (3) (24) — — (29) Total off- balance sheet 4 108,633 104,429 367,667 126,847 692 708,268 (25) (108) (229) (4) — (366) 110,540 91,787 320,383 113,464 191 636,365 (31) (119) (211) (16) — (377) 411,710 524,577 1,343,149 354,248 72,470 2,706,154 (3,951) (2,120) (3,444) (1,641) (38) (11,194) 414,859 468,755 1,225,413 325,679 72,664 2,507,370 (3,265) (1,978) (3,398) (1,500) (56) (10,197) HSBC Holdings plc Annual Report on Form 20-F 144 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Summary of financial instruments to which the impairment requirements in IFRS 9 are applied – by business segment (continued) At 31 Dec 2025 At 31 Dec 2024 Fair value Memorandum allowance for ECL 5 Fair value Memorandum allowance for ECL 5 Hong Kong UK CIB IWPB Corporate Centre Total Hong Kong UK CIB IWPB Corporate Centre Total Hong Kong UK CIB IWPB Corporate Centre Total Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m Debt instruments measured at FVOCI 133,840 29,306 170,258 48,939 1,225 383,568 (1) — (20) (9) — (30) 128,568 26,405 137,538 51,516 2,097 346,124 (1) (1) (18) (14) (20) (54) 1 The total ECL is recognised in the loss allowance for the financial asset unless the total ECL exceeds the gross carrying amount of the financial asset, in which case the ECL is recognised as a provision. 2 At 31 December 2025 , the gross carrying amount comprised $ 3.6 bn of loans and advances to customers and banks (31 December 2024: $1.1b n) and $ 0.5 bn of other financial assets at amortised cost (31 December 2024: $2.1b n) including: the planned sales of our business in Uruguay ($ 1.4 bn), our private banking and custody businesses in Germany ($ 0.3 bn, 31 December 2024: $2.2b n), our business in South Africa ( $0.4 bn, 31 December 2024: $0.4b n) and sale of individual assets in the US ($ 1.3 bn, 31 December 2024: $ 11 m)). The corresponding allowance for ECL comprised $ 27 m of loans and advances to customers and banks (31 December 2024: $4m ) and nil of other financial assets at amortised cost (31 December 2024: $0.3m ). 3 Includes only those financial instruments that are subject to the impairment requirements of IFRS 9. ‘Prepayments, accrued income and other assets’ as presented within the consolidated balance sheet on page 73 comprises both financial and non-financial assets, including cash collateral, settlement accounts and items in the course of collection from other banks. 4 Represents the maximum amount at risk should the contracts be fully drawn upon and clients default. 5 Debt instruments measured at FVOCI continue to be measured at fair value with the allowance for ECL as a memorandum item. Change in ECL is recognised in ‘Change in expected credit losses and other credit impairment charges’ in the income statement. Change in expected credit losses and other credit impairment charges by business segment Hong Kong UK CIB IWPB Corporate Centre Total Full-year to $m $m $m $m $m $m 31 Dec 2025 (1,476) (696) (696) (892) (90) (3,850) 31 Dec 2024 (1,076) (402) (869) (1,038) (29) (3,414) The following table provides an overview of the Group’s credit risk by stage and industry, and the associated ECL coverage. The financial assets recorded in each stage have the following characteristics: – Stage 1: These financial assets are unimpaired and without a significant increase in credit risk for which a 12-month allowance for ECL is recognised. – Stage 2: A significant increase in credit risk has been experienced on these financial assets since initial recognition for which a lifetime ECL is recognised. – Stage 3: There is objective evidence of impairment and the financial assets are therefore considered to be in default or otherwise credit impaired for which a lifetime ECL is recognised. – Purchased or originated credit-impaired financial assets (‘POCI’): Financial assets that are purchased or originated at a deep discount are seen to reflect the incurred credit losses on which a lifetime ECL is recognised. HSBC Holdings plc Annual Report on Form 20-F 145 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector (Audited) Gross carrying/nominal amount 1 Allowance for ECL ECL coverage % Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total $m $m $m $m $m $m $m $m $m $m % % % % % Loans and advances to customers at amortised cost 893,433 80,936 24,389 333 999,091 ( 1,201 ) ( 2,318 ) ( 7,097 ) ( 76 ) ( 10,692 ) 0.1 2.9 29.1 22.8 1.1 –  personal 446,696 23,887 3,945 — 474,528 ( 667 ) ( 1,235 ) ( 895 ) — ( 2,797 ) 0.1 5.2 22.7 — 0.6 –  corporate and commercial 349,763 54,636 19,966 140 424,505 ( 478 ) ( 1,064 ) ( 5,909 ) ( 75 ) ( 7,526 ) 0.1 1.9 29.6 53.6 1.8 –  non-bank financial institutions 96,974 2,413 478 193 100,058 ( 56 ) ( 19 ) ( 293 ) ( 1 ) ( 369 ) 0.1 0.8 61.3 0.5 0.4 Loans and advances to banks at amortised cost 108,336 132 1 — 108,469 ( 4 ) ( 2 ) ( 1 ) — ( 7 ) — 1.5 100.0 — — Other financial assets measured at amortised cost 888,491 1,651 184 — 890,326 ( 76 ) ( 11 ) ( 42 ) — ( 129 ) — 0.7 22.8 — — Loan and other credit-related commitments 669,648 20,488 652 4 690,792 ( 149 ) ( 97 ) ( 69 ) — ( 315 ) — 0.5 10.6 — — –  personal 270,494 1,945 92 — 272,531 ( 22 ) ( 5 ) — — ( 27 ) — 0.3 — — — –  corporate and commercial 255,740 14,649 560 4 270,953 ( 115 ) ( 88 ) ( 69 ) — ( 272 ) — 0.6 12.3 — 0.1 –  financial 143,414 3,894 — — 147,308 ( 12 ) ( 4 ) — — ( 16 ) — 0.1 — — — Financial guarantees 15,913 1,371 192 — 17,476 ( 8 ) ( 17 ) ( 26 ) — ( 51 ) 0.1 1.2 13.5 — 0.3 –  personal 1,446 — — — 1,446 ( 1 ) — — — ( 1 ) 0.1 — — — 0.1 –  corporate and commercial 10,071 1,287 190 — 11,548 ( 6 ) ( 17 ) ( 26 ) — ( 49 ) 0.1 1.3 13.7 — 0.4 –  financial 4,396 84 2 — 4,482 ( 1 ) — — — ( 1 ) — — — — — At 31 Dec 2025 2,575,821 104,578 25,418 337 2,706,154 ( 1,438 ) ( 2,445 ) ( 7,235 ) ( 76 ) ( 11,194 ) 0.1 2.3 28.5 22.6 0.4 Loans and advances to customers at amortised cost 824,420 93,248 22,615 90 940,373 ( 1,078 ) ( 2,546 ) ( 6,040 ) ( 51 ) ( 9,715 ) 0.1 2.7 26.7 56.7 1.0 –  personal 403,746 39,919 3,560 — 447,225 ( 570 ) ( 1,158 ) ( 796 ) — ( 2,524 ) 0.1 2.9 22.4 — 0.6 – corporate and commercial 340,987 51,231 18,376 90 410,684 ( 463 ) ( 1,358 ) ( 4,883 ) ( 51 ) ( 6,755 ) 0.1 2.7 26.6 56.7 1.6 –  non-bank financial institutions 79,687 2,098 679 — 82,464 ( 45 ) ( 30 ) ( 361 ) — ( 436 ) 0.1 1.4 53.2 — 0.5 Loans and advances to banks at amortised cost 101,852 198 2 — 102,052 ( 9 ) ( 2 ) ( 2 ) — ( 13 ) — 1.0 100.0 — — Other financial assets measured at amortised cost 826,621 1,806 153 — 828,580 ( 64 ) ( 5 ) ( 23 ) — ( 92 ) — 0.3 15.0 — — Loan and other credit-related commitments 597,231 21,175 958 3 619,367 ( 137 ) ( 121 ) ( 90 ) — ( 348 ) — 0.6 9.4 — 0.1 –  personal 251,489 1,680 86 — 253,255 ( 17 ) — ( 5 ) — ( 22 ) — — 5.8 — — –  corporate and commercial 231,201 17,453 838 3 249,495 ( 111 ) ( 116 ) ( 83 ) — ( 310 ) — 0.7 9.9 — 0.1 –  financial 114,541 2,042 34 — 116,617 ( 9 ) ( 5 ) ( 2 ) — ( 16 ) — 0.2 5.9 — — Financial guarantees 15,353 1,397 248 — 16,998 ( 8 ) ( 5 ) ( 16 ) — ( 29 ) 0.1 0.4 6.5 — 0.2 –  personal 1,416 11 — — 1,427 — — — — — — — — — — –  corporate and commercial 10,048 1,232 195 — 11,475 ( 7 ) ( 5 ) ( 15 ) — ( 27 ) 0.1 0.4 7.7 — 0.2 –  financial 3,889 154 53 — 4,096 ( 1 ) — ( 1 ) — ( 2 ) — — 1.9 — — At 31 Dec 2024 2,365,477 117,824 23,976 93 2,507,370 ( 1,296 ) ( 2,679 ) ( 6,171 ) ( 51 ) ( 10,197 ) 0.1 2.3 25.7 54.8 0.4 1 Represents the maximum amount at risk should the contracts be fully drawn upon and clients default. 2 Purchased or originated credit-impaired (‘POCI’). Unless identified at an earlier stage, all financial assets are deemed to have suffered a significant increase in credit risk when they are 30 days past due (‘DPD’) and are transferred from stage 1 to stage 2. The following disclosure presents the ageing of stage 2 financial assets by those less than 30 DPD and greater than 30 DPD and therefore presents those financial assets classified as stage 2 due to ageing (30 DPD) and those identified at an earlier stage (less than 30 DPD). HSBC Holdings plc Annual Report on Form 20-F 146 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Stage 2 days past due analysis (Audited) Gross carrying amount Allowance for ECL ECL coverage % Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 At 31 Dec 2025 $m $m $m $m $m $m $m $m % % % % Loans and advances to customers at amortised cost 80,936 77,615 1,894 1,427 ( 2,318 ) ( 1,837 ) ( 211 ) ( 270 ) 2.9 2.4 11.1 18.9 –  personal 23,887 21,481 1,483 923 ( 1,235 ) ( 797 ) ( 188 ) ( 250 ) 5.2 3.7 12.7 27.1 –  corporate and commercial 54,636 53,898 400 338 ( 1,064 ) ( 1,024 ) ( 23 ) ( 17 ) 1.9 1.9 5.8 5.0 –  non-bank financial institutions 2,413 2,236 11 166 ( 19 ) ( 16 ) — ( 3 ) 0.8 0.7 — 1.8 Loans and advances to banks at amortised cost 132 132 — — ( 2 ) ( 2 ) — — 1.5 1.5 — — Other financial assets measured at amortised cost 1,651 1,611 21 19 ( 11 ) ( 10 ) — ( 1 ) 0.7 0.6 — 5.3 At 31 Dec 2024 Loans and advances to customers at amortised cost 93,248 90,157 1,888 1,203 ( 2,546 ) ( 2,147 ) ( 192 ) ( 207 ) 2.7 2.4 10.2 17.2 –  personal 39,919 37,676 1,361 882 ( 1,158 ) ( 799 ) ( 169 ) ( 190 ) 2.9 2.1 12.4 21.5 –  corporate and commercial 51,231 50,486 506 239 ( 1,358 ) ( 1,326 ) ( 21 ) ( 11 ) 2.7 2.6 4.2 4.6 –  non-bank financial institutions 2,098 1,995 21 82 ( 30 ) ( 22 ) ( 2 ) ( 6 ) 1.4 1.1 9.5 7.3 Loans and advances to banks at amortised cost 198 198 — — ( 2 ) ( 2 ) — — 1.0 1.0 — — Other financial assets measured at amortised cost 1,806 1,794 3 9 ( 5 ) ( 5 ) — — 0.3 0.3 — — 1 The days past due amounts presented above are on a contractual basis. Stage 2 decomposition The following table presents the stage 2 decomposition of gross carrying amount and allowances for ECL for loans and advances to customers and banks. It also sets out the reasons why an exposure is classified as stage 2 and therefore presented as a significant increase in credit risk at 31 December 2025. The quantitative classification shows gross carrying amount and allowances for ECL for which the applicable reporting date PD measure exceeds defined quantitative thresholds for retail and wholesale exposures, as set out in Note 1.2(j) ‘Summary of material accounting policies’, on page 306 . The qualitative classification primarily accounts for CRR deterioration, watch-and-worry and retail management judgemental adjustments. Ñ A summary of our current policies and practices for the significant increase in credit risk is set out in ‘Summary of material accounting policies’ on page 306 . Loans and advances to customers and banks 1 At 31 Dec 2025 Loans and advances to customers Loans and advances to banks at amortised cost Total stage 2 Personal of which: Corporate and commercial Non-bank financial institutions first lien mortgages credit cards other personal lending $m $m $m $m $m $m $m $m Quantitative 21,339 16,111 3,031 2,197 40,294 1,153 102 62,888 Qualitative 2,442 1,958 226 258 14,160 1,249 30 17,881 – of which: forbearance 242 142 29 71 904 102 — 1,248 30 DPD backstop 2 106 79 3 24 182 11 — 299 Total gross carrying amount 23,887 18,148 3,260 2,479 54,636 2,413 132 81,068 Quantitative (1,128) (81) (690) (357) (830) (10) — (1,968) Qualitative (101) (27) (40) (34) (230) (9) (2) (342) –  of which: forbearance (34) (16) (5) (13) (17) — — (51) 30 DPD backstop 2 (6) (1) (1) (4) (4) — — (10) Total allowance for ECL (1,235) (109) (731) (395) (1,064) (19) (2) (2,320) ECL coverage % 5.2 0.6 22.4 15.9 1.9 0.8 1.5 2.9 Residual average life 3 (in years) 15.0 19.2 <1.0 2.9 2.9 1.8 <1.0 HSBC Holdings plc Annual Report on Form 20-F 147 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Loans and advances to customers and banks 1 (continued) At 31 Dec 2024 Loans and advances to customers Loans and advances to banks at amortised cost Total stage 2 Personal of which: Corporate and commercial Non-bank financial institutions first lien mortgages credit cards other personal lending $m $m $m $m $m $m $m $m Quantitative 36,356 30,992 2,904 2,460 37,787 1,658 176 75,977 Qualitative 3,452 3,107 85 260 13,327 438 22 17,239 –  of which: forbearance 175 70 40 65 1,086 3 — 1,264 30 DPD backstop 2 111 78 2 31 117 2 — 230 Total gross carrying amount 39,919 34,177 2,991 2,751 51,231 2,098 198 93,446 Quantitative (1,118) (121) (651) (346) (1,124) (28) — (2,270) Qualitative (35) (8) (9) (18) (229) (2) (2) (268) –  of which: forbearance (5) — (1) (4) (12) — — (17) 30 DPD backstop 2 (5) (1) — (4) (5) — — (10) Total allowance for ECL (1,158) (130) (660) (368) (1,358) (30) (2) (2,548) ECL coverage % 2.9 0.4 22.1 13.4 2.7 1.4 1.0 2.7 Residual average life 3 (in years) 17.0 19.5 <1.0 3.6 2.7 1.9 <1.0 1 Where balances satisfy more than one of the above three criteria for determining a significant increase in credit risk, the corresponding gross carrying amount and allowance for ECL have been assigned in order of categories presented. 2 Days past due (‘DPD’). 3 Calculated as the difference between final contractual maturities and the reporting date, weighted based on the contribution of the instrument to the stage 2 total gross carrying amount of the corresponding product or sector. Credit exposure Maximum exposure to credit risk (Audited) This section provides information on balance sheet items and their offsets as well as loan and other credit-related commitments. Commentary on consolidated balance sheet movements in 2025 is provided on page 74 . Other credit risk mitigants While not disclosed as an offset in the following ‘Maximum exposure to credit risk’ table, other arrangements are in place that reduce our maximum exposure to credit risk. These include a charge over collateral on borrowers’ specific assets, such as residential properties, collateral held in the form of financial instruments that are not held on the balance sheet and short positions in securities. In addition, for financial assets held as part of linked insurance/investment contracts the credit risk is predominantly borne by the policyholder. See page 305 and Note 31 on the financial statements for further details of collateral in respect of certain loans and advances and derivatives. Collateral available to mitigate credit risk is disclosed in the ‘Collateral’ section on page 165 . The following table presents our maximum exposure before taking account of any collateral held or other credit enhancements (unless such enhancements meet accounting offsetting requirements). The table excludes trading assets, financial assets designated and otherwise mandatorily measured at fair value through profit or loss, and financial investments measured at fair value through other comprehensive income as their carrying amount best represents the net exposure to credit risk. Equity securities are also excluded as they are not subject to credit risk. For the financial assets recognised on the balance sheet, the maximum exposure to credit risk equals their carrying amount and is net of the allowance for ECL. For financial guarantees and other guarantees granted, it is the maximum amount that we would have to pay if the guarantees were called upon. For loan commitments and other credit- related commitments, it is generally the full amount of the committed facilities. The offset in the table relates to amounts where there is a legally enforceable right of offset in the event of counterparty default and where, as a result, there is a net exposure for credit risk purposes. However, as there is no intention to settle these balances on a net basis under normal circumstances, they do not qualify for net presentation for accounting purposes. No offset has been applied to off-balance sheet collateral. In the case of derivatives, the offset column also includes collateral received in cash and other financial assets. HSBC Holdings plc Annual Report on Form 20-F 148 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Maximum exposure to credit risk (Audited) At 31 Dec 2025 At 31 Dec 2024 Maximum exposure Offset Net Maximum exposure Offset Net $m $m $m $m $m $m Loans and advances to customers held at amortised cost 988,399 ( 25,671 ) 962,728 930,658 ( 22,822 ) 907,836 –  personal 471,731 ( 3,568 ) 468,163 444,701 ( 2,256 ) 442,445 –  corporate and commercial 416,979 ( 20,636 ) 396,343 403,929 ( 18,897 ) 385,032 –  non-bank financial institutions 99,689 ( 1,467 ) 98,222 82,028 ( 1,669 ) 80,359 Loans and advances to banks at amortised cost 108,462 — 108,462 102,039 — 102,039 Other financial assets held at amortised cost 888,882 ( 5,865 ) 883,017 827,193 ( 4,383 ) 822,810 –  cash and balances at central banks 242,859 — 242,859 267,674 — 267,674 –  Hong Kong Government certificates of indebtedness 44,063 — 44,063 42,293 — 42,293 –  reverse repurchase agreements – non-trading 298,392 ( 5,865 ) 292,527 252,549 ( 4,383 ) 248,166 –  financial investments 182,089 — 182,089 153,973 — 153,973 –  prepayments, accrued income and other assets 121,479 — 121,479 110,704 — 110,704 Assets held for sale 11,115 — 11,115 27,234 — 27,234 Derivatives 237,740 ( 229,223 ) 8,517 268,637 ( 254,257 ) 14,380 Total on-balance sheet exposure to credit risk 2,234,598 ( 260,759 ) 1,973,839 2,155,761 ( 281,462 ) 1,874,299 Total off-balance sheet 1,068,162 — 1,068,162 970,610 — 970,610 –  financial and other guarantees 119,840 — 119,840 109,380 — 109,380 –  loan and other credit-related commitments 948,322 — 948,322 861,230 — 861,230 Total 3,302,760 ( 260,759 ) 3,042,001 3,126,371 ( 281,462 ) 2,844,909 Concentration of exposure Our business segments offer a broad range of products, with the majority of our exposures in Asia and Europe. For an analysis of: – financial investments, see Note 16 on the financial statements; – trading assets, see Note 11 on the financial statements; – derivatives, see page 178 and Note 15 on the financial statements; and – loans and advances by industry sector and by the location of the principal operations of the lending subsidiary (or, in the case of the operations of The Hongkong and Shanghai Banking Corporation Limited, HSBC Bank plc, HSBC Bank Middle East Limited and HSBC Bank USA, by the location of the lending branch), see page 169 for wholesale lending and page 179 for personal lending. C redit deterioration of financial instruments (Audited) Ñ A summary of our current policies and practices regarding the identification, treatment and measurement of stage 1, stage 2, stage 3 (credit impaired) and POCI financial instruments can be found in Note 1.2(j) on the financial statements. Measurement uncertainty and sensitivity analysis of ECL estimates (Audited) The recognition and measurement of ECL involves the use of significant judgement and estimation. We form multiple scenarios based on economic forecasts and distributional estimates and apply these to credit risk models to estimate future credit losses. The results are then probability-weighted to determine an unbiased ECL estimate. Management assessed the current economic environment, reviewed the latest economic forecasts and discussed key risks before selecting economic scenarios and their weightings. Management judgemental adjustments are used where modelled allowance for ECL does not fully reflect the identified risks and related uncertainty, or to capture significant late-breaking events. Methodology At 31 December 2025, four economic scenarios were used to capture the latest economic expectations and to articulate management’s view of the range of risks and potential outcomes. Scenarios are created using the latest economic forecasts and distributional estimates, each quarter. Three scenarios, the Upside, Central and Downside, are drawn from external consensus forecasts, market data and distributional estimates of the entire range of economic outcomes. These estimates are used as conditioning assumptions in a modelled expansion of other variables, to ensure scenarios that are economically coherent and internally consistent. The fourth scenario, the Downside 2, represents management’s view of severe downside risks. The consensus Central scenario is deemed the ‘most likely’ scenario, and will attract the largest probability weighting. The consensus outer scenarios represent short-term cyclical deviations from the Central scenario, where variable paths converge back to long- term trend expectations. They are calibrated to a 10 % probability. HSBC’s Central scenario assumes that the effects of announced climate measures, carbon pricing and green levies are incorporated into economic forecasts where their short-term effects are known from enacted legislation, or may be reasonably projected from current trends and statutory targets. Variable paths and projections aligned to long- term climate outcomes, but which are dependent on additional policy adjustments, carry greater uncertainty. Further details about climate scenarios may be found in the ‘Insights from climate scenario analysis’ section of our Risk review on page 206 . The Downside 2 explores a more extreme economic outcome than those captured by the consensus scenarios. In this scenario, variables do not, by design, revert to long-term trend expectations and may instead explore alternative states of equilibrium, where economic variables move permanently away from past trends. It is calibrated to a 5 % probability. In most circumstances, the alignment of weightings with the calibrated probability of scenarios is deemed appropriate for the unbiased estimation of ECL. However, manageme nt may depart from this probability-based scenario weighting approach when the economic outlook and forecasts are determined to be particularly uncertain and risks are elevated. HSBC Holdings plc Annual Report on Form 20-F 149 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Description of economic scenarios The economic assumptions presented in this section are formed by HSBC with reference to external forecasts and estimates for the purpose of calculating ECL. Forecasts may change, and remain subject to uncertainty. Outer scenarios are designed to capture the potential crystallisation of key economic and financial risks and alternative paths for economic variables. The scenarios used to calculate ECL are described below. The consensus Central scenario HSBC’s Central scenario incorporates higher growth forecasts for 2026 relative to the fourth quarter of 2024, in most of our major markets. The change in forecasts for 2027 is more mixed, reflecting differing regional dynamics. The scenario is modelled consistent with a US tariff rate, measured as an effective trade-weighted average, of 15 % at the start of 2026. That rate has fallen in recent months to reflect the lowering of US tariff rates on imports from mainland China, the conclusion of a trade agreement with Switzerland and targeted tariff exemptions on key products. Forecasts for mainland China and Hong Kong have improved relative to the fourth quarter of 2024, when projections were weighed down by expectations that the imposition of US tariffs would result in much slower growth. Growth expectations have since been revised upwards, supported by China’s success in redirecting trade away from the US, and further anticipated official policy support. In Hong Kong, further increases in residential property sector transactions and domestic consumption are expected to be driven by a lowering of interest rates. Forecast US GDP growth has also improved relative to the fourth quarter of 2024 despite trade policy uncertainty, the persistence of higher inflation and a weaker labour market. The economy has proved more resilient to tariffs than had been expected, and robust growth in private sector investment, related to the technology sector, has further supported growth. The key exception to the improved outlook is the UK, where forecasts have deteriorated as unemployment has risen and both household and business confidence has weakened. Global GDP is expected to grow by 2.5 % in 2026 in the Central scenario, and the average rate of global GDP growth is forecast to be 2.6 % over the five -year forecast period. The key features of our Central scenario are: – Forecast GDP growth has improved since the fourth quarter of 2024, although the outlook still envisages either a slowdown or stabilisation in growth in 2026, relative to 2025, for most markets. The exceptions are Mexico and the UAE, where growth is forecast to improve in 2026. – In most markets, unemployment is forecast to rise moderately in 2026 in line with slower economic activity and subdued hiring. It will remain relatively low by historical standards. – The evolution of inflation is mixed. In the US and UK, inflation is expected to fall gradually but remain above central bank target rates through 2026, reflecting higher tariffs in the US and the effects of services price inflation in the UK. In mainland China, inflation is expected to remain subdued due to soft consumer demand and continued manufacturing growth. – House prices in mainland China are expected to continue to fall. In Hong Kong, prices are forecast to see further moderate improvements due to a revival in buyer interest, spurred by lower interest rates. House price growth is projected to remain positive, but subdued, in the UK and the US. – Challenging conditions are also forecast to continue in certain segments of the commercial property sector in a number of our major markets, including Hong Kong. Structural changes to demand in the office segment in particular have driven lower valuations. – Policy interest rates in major markets are forecast to gradually decline further in 2026. In the longer term, they are expected to remain at a higher level than in recent years. – The Brent crude oil price is forecast to average around $ 65 per barrel over the projection period. The Central scenario was created with forecasts available in late November 2025, and subsequently kept under review until the end of December 2025. HSBC Holdings plc Annual Report on Form 20-F 150 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk The following tables describe key macroeconomic variables in the consensus Central scenario. Consensus Central scenario 2026–2030 (as at 4Q25) 2025–2029 (as at 4Q24) UK US Hong Kong Mainland China France UAE Mexico UK US Hong Kong Mainland China France UAE Mexico GDP (annual average growth rate, %) 2025 1.2 2.0 1.7 4.0 0.9 4.4 0.9 2026 1.1 1.9 2.3 4.4 0.9 4.7 1.3 1.3 1.6 1.8 3.7 0.9 4.2 1.2 2027 1.4 2.0 2.3 4.2 1.2 4.1 2.0 1.8 1.6 3.5 4.3 1.4 3.9 1.7 2028 1.5 2.1 2.3 4.0 1.3 3.8 2.2 1.6 1.8 3.1 3.9 1.5 3.6 1.9 2029 1.5 2.1 2.4 3.8 1.3 3.5 2.2 1.6 2.0 2.7 3.7 1.4 3.6 2.0 2030 1.5 2.0 2.4 3.8 1.3 3.5 2.2 5-year average 1 1.4 2.0 2.3 4.0 1.2 3.9 2.0 1.5 1.8 2.6 3.9 1.2 3.9 1.5 Unemployment rate (%) 2025 4.9 4.4 3.3 5.2 7.5 2.7 3.5 2026 4.9 4.4 3.6 5.2 7.6 2.5 3.2 4.7 4.3 3.7 5.4 7.3 2.6 3.5 2027 4.7 4.3 3.4 5.2 7.6 2.4 3.2 4.5 4.3 3.3 5.2 7.2 2.6 3.5 2028 4.7 4.1 3.1 5.1 7.5 2.4 3.2 4.3 4.2 3.0 5.0 7.0 2.5 3.5 2029 4.7 4.1 3.0 5.0 7.4 2.4 3.1 4.3 4.1 2.9 5.0 7.0 2.5 3.5 2030 4.7 4.1 3.0 5.0 7.4 2.4 3.1 5-year average 1 4.7 4.2 3.2 5.1 7.5 2.4 3.2 4.5 4.2 3.2 5.2 7.2 2.6 3.5 House prices (annual average growth rate, %) 2025 1.4 4.4 ( 0.5 ) ( 5.9 ) 2.1 9.3 7.6 2026 1.2 1.1 0.5 ( 1.6 ) 4.3 5.8 4.8 3.8 3.2 2.4 ( 0.7 ) 4.4 5.1 4.5 2027 2.8 1.9 1.5 2.1 5.0 3.2 4.5 4.6 2.4 3.0 3.2 4.4 3.6 4.2 2028 3.3 2.7 2.5 3.5 4.1 2.3 4.4 3.5 2.5 2.7 4.1 3.8 1.8 4.0 2029 2.7 3.2 2.1 3.4 3.1 2.0 4.3 2.7 2.6 2.7 2.9 3.1 1.3 4.0 2030 2.4 3.2 2.1 2.3 2.2 2.1 4.2 5-year average 1 2.5 2.4 1.8 1.9 3.7 3.1 4.4 3.2 3.0 2.1 0.7 3.6 4.2 4.9 Inflation (annual average growth rate, %) 2025 2.4 2.4 1.4 0.3 1.2 2.1 5.0 2026 2.5 2.9 1.8 0.7 1.4 2.0 3.7 2.1 2.8 1.9 1.0 1.6 1.9 3.9 2027 2.1 2.3 1.9 1.2 1.7 1.9 3.6 2.1 2.5 2.2 1.5 2.0 1.8 3.4 2028 2.1 2.2 2.0 1.4 2.1 1.9 3.5 2.0 2.2 2.2 1.7 2.3 1.9 3.4 2029 2.0 2.2 2.2 1.5 2.1 2.0 3.4 2.0 2.1 2.3 1.6 2.2 1.8 3.4 2030 2.0 2.2 2.2 1.5 1.9 2.0 3.4 5-year average 2.2 2.4 2.0 1.3 1.9 1.9 3.5 2.1 2.4 2.0 1.2 1.9 1.9 3.8 Central bank policy rate (annual average, %) 2025 4.2 4.1 4.5 2.9 2.1 4.1 9.4 2026 3.5 3.4 3.8 3.0 1.9 3.5 7.0 3.9 3.7 4.1 2.9 1.8 3.8 8.8 2027 3.4 3.1 3.5 3.0 2.0 3.1 7.2 3.8 3.7 4.0 3.0 2.0 3.7 8.8 2028 3.5 3.2 3.6 3.1 2.1 3.3 7.5 3.7 3.6 4.0 3.2 2.0 3.6 8.9 2029 3.7 3.4 3.8 3.1 2.3 3.4 7.7 3.7 3.6 4.0 3.3 2.1 3.6 8.9 2030 3.8 3.6 3.9 3.2 2.5 3.6 7.9 5-year average 1 3.6 3.3 3.7 3.1 2.2 3.4 7.5 3.9 3.7 4.1 3.1 2.0 3.8 8.9 1 The five -year average is calculated over a projected period of 20 quarters from 1Q26 to 4Q30 for the 4Q25 scenario and 1Q25 to 4Q29 for the 4Q24 scenario. 2 For mainland China, the rate shown is the Loan Prime Rate. HSBC Holdings plc Annual Report on Form 20-F 151 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk The consensus Upside scenario Compared with the Central scenario, the consensus Upside scenario features stronger economic activity in the near term, before converging to long-run trend expectations. It also incorporates lower unemployment and higher asset prices than incorporated in the Central scenario. Inflation accelerates modestly, driven by increased investment and higher consumption spending. The scenario is consistent with a number of key upside risk themes. These include a partial rollback of tariff measures, deregulation, an improvement in the US-China relationship, and a de-escalation in geopolitical tensions. The following tables describe key macroeconomic variables in the consensus Upside scenario. Consensus Upside scenario 2026–2030 (as at 4Q25) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-peak) 1 11.0 (4Q30) 15.2 (4Q30) 20.7 (4Q30) 28.6 (4Q30) 8.5 (4Q30) 29.0 (4Q30) 16.9 (4Q30) Unemployment rate (%, min) 2 3.2 (4Q27) 3.5 (4Q27) 2.8 (2Q28) 4.7 (4Q27) 6.6 (4Q27) 2.0 (4Q27) 2.8 (3Q26) House price index (%, start-to-peak) 1 20.0 (4Q30) 23.2 (4Q30) 19.4 (4Q30) 14.9 (4Q30) 22.6 (4Q30) 22.2 (4Q30) 29.5 (4Q30) Inflation rate (YoY % change, max) 3 3.5 (1Q26) 3.6 (3Q26) 2.9 (2Q26) 1.5 (4Q30) 2.4 (4Q27) 3.1 (2Q26) 4.2 (1Q26) Central bank policy rate (%, max) 3 3.9 (1Q26) 3.9 (1Q26) 4.2 (1Q26) 3.4 (1Q27) 2.5 (4Q30) 3.9 (1Q26) 8.1 (4Q30) Consensus Upside scenario 2025–2029 (as at 4Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-peak) 1 11.3 (4Q29) 13.6 (4Q29) 21.4 (4Q29) 27.5 (4Q29) 8.9 (4Q29) 28.9 (4Q29) 13.6 (4Q29) Unemployment rate (%, min) 2 3.5 (3Q26) 3.6 (1Q26) 2.9 (4Q29) 4.9 (4Q26) 6.4 (4Q26) 2.2 (4Q26) 3.0 (1Q25) House price index (%, start-to-peak) 1 24.2 (4Q29) 23.6 (4Q29) 25.3 (4Q29) 9.8 (4Q29) 22.8 (4Q29) 26.1 (4Q29) 31.7 (4Q29) Inflation rate (YoY % change, min) 3 1.4 (1Q26) 1.6 (2Q26) ( 0.1 ) (4Q25) ( 1.0 ) (4Q25) 0.1 (4Q25) 0.6 (4Q25) 3.1 (2Q26) Central bank policy rate (%, min) 3 3.6 (4Q25) 3.6 (1Q29) 4.0 (1Q29) 2.7 (1Q26) 1.4 (3Q25) 3.6 (1Q29) 7.6 (1Q26) 1 Cumulative change to the highest level of the series during the 20-quarter projection. 2 Lowest projected unemployment rate in the scenario. 3 Highest/lowest projected policy rate and year-on-year percentage change in inflation in the scenario. For mainland China, the rate shown is the Loan Prime Rate. Downside scenarios Downside scenarios explore the intensification and crystallisation of key risk themes and are modelled so that economic shocks drive consumption and investment lower and commodity prices fall. For most markets, inflation and interest rates are lower compared with the Central scenario. That narrative is disrupted in the US and Mexico as higher tariff rates and other countermeasures are assumed to drive a broad increase in import prices. Key downside risks include: – an increase in protectionist policies. This lowers investment, complicates international supply chains, and impedes trade flows; – abrupt asset repricing given elevated valuations, particularly in the tech sector, eroding wealth effects and ultimately increasing credit risks; – broader and more prolonged conflict in the Middle East and the Russia-Ukraine war, which undermine confidence and investment; and – continued differences between the US and China, which affect economic confidence and the global goods trade and supply chains for critical technologies. The consensus Downside scenario In the consensus Downside scenario, the effects of tariffs on the global economy are worse than expected, leading to weaker economic activity compared with the Central scenario. The scenario is consistent with the tariff rate, measured as an effective trade-weighted average, rising to 19 % in 2026, and remaining at that level in 2027. The key driver of that increase is the application of sector-specific tariff rates. In this scenario, GDP declines and unemployment rates rise, while asset prices and commodity prices fall. The scenario features an escalation in geopolitical tensions and an increase in tariffs over and above those assumed in the Central scenario. Existing and recently approved trade agreements are assumed to hold. In most markets, inflation declines relative to the Central scenario, as tariffs are assumed to drive a drop in export demand from the US. In the US and Mexico, the scenario sees inflation rise as higher tariffs across a broad range of imported goods pass through to consumer prices. In the scenario, oil prices trough at $ 40 per barrel. The following tables describe key macroeconomic variables in the consensus Downside scenario. Consensus Downside scenario 2026–2030 (as at 4Q25) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 ( 0.2 ) (2Q27) ( 0.8 ) (3Q26) ( 1.7 ) (4Q27) ( 1.7 ) (3Q26) ( 0.4 ) (3Q26) 0.4 (1Q26) ( 1.0 ) (1Q27) Unemployment rate (%, max) 2 6.2 (4Q26) 5.3 (3Q26) 4.8 (4Q26) 6.8 (4Q27) 8.6 (3Q26) 3.2 (3Q27) 3.8 (3Q26) House price index (%, start-to-trough) 1 ( 4.1 ) (1Q27) ( 3.1 ) (1Q27) ( 3.8 ) (1Q27) ( 5.6 ) (1Q27) 0.7 (1Q26) ( 3.4 ) (2Q26) 0.6 (1Q26) Inflation rate (YoY % change) 3 1.3 (3Q26) 3.4 (1Q26) 0.1 (4Q26) ( 2.9 ) (4Q26) 0.4 (4Q26) 0.5 (4Q26) 4.7 (1Q26) Central bank policy rate (%) 3 2.2 (3Q28) 4.6 (2Q26) 5.0 (2Q26) 1.5 (4Q26) 0.6 (1Q27) 4.6 (2Q26) 9.5 (2Q26) Consensus Downside scenario 2025–2029 (as at 4Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 ( 1.0 ) (4Q26) ( 0.6 ) (3Q25) ( 4.5 ) (4Q25) ( 2.5 ) (3Q25) ( 0.6 ) (1Q26) 0.3 (1Q25) ( 2.1 ) (4Q26) Unemployment rate (%, max) 2 6.1 (4Q25) 5.3 (3Q25) 5.1 (2Q26) 6.9 (4Q26) 8.3 (3Q25) 3.4 (1Q26) 4.1 (4Q25) House price index (%, start-to-trough) 1 ( 4.5 ) (1Q26) ( 0.2 ) (1Q25) ( 1.9 ) (2Q26) ( 12.8 ) (3Q26) ( 0.3 ) (1Q25) ( 0.4 ) (1Q25) 2.1 (1Q25) Inflation rate (YoY % change, max) 3 3.4 (4Q25) 4.5 (1Q26) 3.1 (1Q26) 2.0 (1Q26) 2.6 (3Q25) 2.8 (1Q26) 7.4 (4Q25) Central bank policy rate (%, max) 3 5.0 (1Q25) 4.8 (1Q25) 5.2 (1Q25) 3.0 (1Q25) 3.2 (1Q25) 4.8 (1Q25) 11.5 (3Q25) 1 Cumulative change to the lowest level of the series during the 20-quarter projection. 2 The highest projected unemployment rate in the scenario. 3 The table for 4Q25 shows highest year-on-year percentage change in inflation and projected policy rates for the US and Mexico, and lowest for other countries and territories. For the UAE and Hong Kong, the policy rate is shown as the maximum, consistent with the operation of US-dollar-linked exchange rates. For mainland China, the rate shown is the Loan Prime Rate. HSBC Holdings plc Annual Report on Form 20-F 152 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Downside 2 scenario The Downside 2 scenario reflects management’s view of the tail of the economic distribution. It incorporates the simultaneous crystallisation of a number of risks that lead to a deep global recession. The subsequent drop in demand leads to a steep fall in commodity prices, and a rapid increase in unemployment. The narrative features an escalation in tariff actions, resulting in a global trade war, and further intensification of geopolitical crises. Asset prices fall steeply, with technology-related stocks expected to experience the most significant price adjustments. The scenario is consistent with the US tariff rate, measured as an effective trade-weighted average, rising to 25 % in 2026, and remaining at that level in 2027. In the scenario, oil prices trough at $ 30 per barrel. The following tables describe key macroeconomic variables in the Downside 2 scenario. Downside 2 scenario 2026–2030 (as at 4Q25) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 ( 5.3 ) (2Q27) ( 4.5 ) (1Q27) ( 9.3 ) (3Q27) ( 6.0 ) (1Q27) ( 6.2 ) (2Q27) ( 5.7 ) (2Q27) ( 10.0 ) (1Q27) Unemployment rate (%, max) 2 8.9 (2Q27) 9.0 (1Q28) 7.0 (4Q26) 7.0 (4Q27) 10.7 (4Q27) 3.9 (3Q26) 5.2 (2Q27) House price index (%, start-to-trough) 1 ( 24.2 ) (4Q27) ( 17.1 ) (4Q26) ( 19.6 ) (2Q29) ( 23.1 ) (4Q27) ( 5.9 ) (3Q27) ( 30.5 ) (1Q28) 0.6 (1Q26) Inflation rate (YoY % change) 3 ( 1.9 ) (4Q26) 4.1 (2Q26) ( 1.7 ) (2Q27) ( 6.5 ) (4Q26) ( 0.6 ) (4Q26) 0.3 (4Q26) 4.8 (1Q26) Central bank policy rate (%) 3 1.4 (1Q27) 4.7 (2Q26) 5.0 (2Q26) 1.2 (2Q27) 0.1 (4Q26) 4.7 (2Q26) 9.9 (2Q26) Downside 2 scenario 2025–2029 (as at 4Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 ( 9.1 ) (2Q26) ( 4.1 ) (2Q26) ( 10.1 ) (4Q25) ( 8.7 ) (4Q25) ( 7.9 ) (2Q26) ( 6.8 ) (2Q26) ( 10.5 ) (3Q26) Unemployment rate (%, max) 2 8.4 (2Q26) 9.3 (2Q26) 7.1 (1Q26) 7.1 (4Q26) 10.4 (1Q27) 5.0 (3Q25) 5.6 (1Q26) House price index (%, start-to-trough) 1 ( 27.2 ) (4Q26) ( 15.8 ) (4Q25) ( 34.4 ) (3Q27) ( 30.5 ) (4Q26) ( 14.0 ) (2Q27) ( 13.2 ) (2Q27) 2.0 (1Q25) Inflation rate (YoY % change, max) 3 10.1 (2Q25) 4.9 (4Q25) 3.6 (1Q26) 3.8 (4Q25) 7.6 (2Q25) 3.7 (2Q25) 7.9 (4Q25) Central bank policy rate (%, max) 3 5.5 (1Q25) 5.5 (1Q25) 5.9 (1Q25) 3.5 (3Q25) 4.2 (1Q25) 5.6 (1Q25) 12.1 (3Q25) 1 Cumulative change to the lowest level of the series during the 20-quarter projection. 2 The highest projected unemployment rate in the scenario. 3 The table for 4Q25 shows highest year-on-year percentage change in inflation and projected policy rates for the US and Mexico, and lowest for other countries and territories. For the UAE and Hong Kong, the policy rate is shown as the maximum, consistent with the operation of US-dollar-linked exchange rates. For mainland China, the rate shown is the Loan Prime Rate. The following graphs show the historical and forecasted GDP growth rate for the various economic scenarios in our four largest markets. Hong Kong Mainland China UK US HSBC Holdings plc Annual Report on Form 20-F 153 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Scenario weighting Scenario weightings are calibrated to probabilities that are determined with reference to consensus forecast probability distributions. Management may then choose to vary weights if they assess that the calibration lags more recent events, or does not reflect their view of the distribution of economic and geopolitical risk. Management’s view of the scenarios and the probability distribution takes into consideration the relationship of the consensus scenario to both internal and external assessments of risk. For the fourth quarter of 2025, forecast and distributional estimates were assessed to have incorporated available information around tariffs and policy uncertainties and no major events had occurred since scenario production that changed the outlook materially. Forecast dispersion, financial market volatility and other measures of uncertainty remained close to their long-term average. Consequently, there was no variation in scenario weights and they were aligned to the calibrated probabilities of the scenarios. The consensus Central scenario was assigned a 75 % probability weighting in our major markets. The consensus Upside scenario was assigned a 10 % weighting, and the consensus Downside scenario was given 10 % . The Downside 2 was assigned a 5 % weighting. In light of the US intervention in the political leadership and energy assets of Venezuela during early January 2026, management assessed the potential implications, including to oil prices, and concluded that expected spillovers remain within the scope of existing scenarios, including potentially significantly lower oil prices. Subsequent tariff developments in relation to Greenland were also assessed on the same basis and no additional action was deemed necessary for economic scenarios or weights. The following tables describe the probabilities assigned in each scenario. Scenario weightings, % 4Q25 4Q24 Standard weights UK US Hong Kong Mainland China France UAE Mexico Standard weights UK US Hong Kong Mainland China France UAE Mexico Upside scenario 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 Central scenario 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 Downside scenario 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 Downside 2 scenario 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 At 31 December 2025, the consensus Upside and Central scenarios for all markets had a combined weighting of 85 % , unchanged from the weightings at 31 December 2024. Weightings assigned to downside scenarios also remained unchanged. Critical estimates and judgements The IFRS 9 Expected Credit Losses (‘ECL’) calculation involved significant judgements, assumptions and estimates. These included selecting and configuring economic scenarios amid changing economic conditions and risks and estimating their effects on ECL, especially when historical conditions are not fully captured by credit risk models. How economic scenarios are reflected in ECL calculations Models are used to reflect economic scenarios for the ECL estimates. We have developed globally consistent methodologies for the application of forward economic guidance into the calculation of ECL for wholesale and retail credit risk. For wholesale portfolios, a global methodology is used for the estimation of the term structure of probability of default (‘PD’) and loss given default (‘LGD’). PDs use the correlation of forward economic guidance with default rates for a particular industry within a country, and LGDs use the correlation of forward economic guidance with collateral values and realisation rates for a particular country and industry. PDs and LGDs are estimated for the entire term structure of each instrument. For impaired loans, allowances for ECL estimates are based on discounted cash flow (‘DCF’) calculations for internal forward-looking scenarios specific to individual borrower circumstances. Probability- weighted outcomes are applied and, depending on materiality and the status of the borrower, the number of scenarios considered will change. Where relevant for the case being assessed, forward economic guidance is considered as part of these scenarios. LGD- driven ECL estimates are used for certain less material cases. For our retail portfolios, the models are predominantly based on historical observations and correlations with default rates and collateral values. For PD, the impact of economic scenarios is modelled for each portfolio, using historical relationships between default rates and macroeconomic variables. These are included within IFRS 9 ECL estimates using either economic response models or models that contain internal, external and macroeconomic variables. The macroeconomic impact on PD is modelled over the period equal to the remaining maturity of the assets. For LGD, the impact is modelled for mortgage portfolios by forecasting future loan-to-value profiles for the remaining maturity of the asset, using national level house price index forecasts and applying the corresponding LGD expectation relative to the updated forecast collateral values. For unsecured retail portfolios, historically observed recovery rates are leveraged to measure loss. For both mortgages and unsecured loans, a limited number of portfolios utilise a stressed LGD applied to the Downside 2 scenario. Management judgemental adjustments IFRS 9 management judgemental adjustments are typically short-term increases or decreases to the modelled allowance for ECL at a customer, segment or portfolio level where management believes allowances do not sufficiently reflect the ECL at the reporting date. These relate to risks or uncertainties that are not reflected in the models or to any late-breaking events with significant uncertainty, subject to management review and challenge. Management judgemental adjustments impacts are considered for both gross balances and allowances for ECL when determining whether a significant increase in credit risk has occurred, and is allocated to an appropriate stage in accordance with the internal adjustments framework. Management judgemental adjustments are reviewed under the IFRS 9 governance process see page 107. Management’s review and challenge focuses on the rationale and adjustment amounts and, where significant, is subject to a further review by the second line of defence. Internal frameworks establish the conditions where some management judgemental adjustments should no longer be required and as such are considered as part of the governance process. The internal governance process regularly reviews management judgemental adjustments and, where possible, mitigates these through a model recalibration or redevelopment. Management judgemental adjustment drivers evolve as the economic environment changes and new risks emerge. In addition to management judgemental adjustments there are also ‘Other adjustments’, which are made to address process limitations and data/ model deficiencies and can also include, where appropriate, the impact of new models where governance has sufficiently progressed to allow an accurate estimate of ECL allowance to be incorporated into the total reported ECL. HSBC Holdings plc Annual Report on Form 20-F 154 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk For the wholesale portfolio, management judgemental adjustments apply to the performing portfolio only as defaulted exposures are individually assessed. At 31 December 2025, there was a $ 0.1 b n increase in management judgemental adjustments compared with 31 December 2024 . Management judgemental adjustments made in estimating the scenario-weighted reported allowance for ECL at 31 December 2025 are set out in the following table. Management judgemental adjustments to ECL At 31 December 2025 1 At 31 December 2024 1 Retail Wholesale 2 Total Retail Wholesale 2 Total $bn $bn $bn $bn $bn $bn Modelled ECL (A) 3 2.8 1.8 4.6 2.6 2.0 4.6 Banks, sovereigns, government entities and low-risk counterparties 0.0 0.0 Corporate lending adjustments 0.1 0.1 0.1 0.1 Other credit judgements 0.1 0.1 0.0 0.0 Total management judgemental adjustments (B) 4 0.1 0.1 0.2 0.0 0.1 0.1 Other adjustments (C) 5 ( 0.0 ) 0.1 0.1 ( 0.0 ) 0.1 0.1 Final ECL (A + B + C) 6 2.9 2.0 4.9 2.6 2.2 4.8 1 Management judgemental adjustments presented in the table reflect increases or (decreases) to allowance for ECL, respectively. 2 The wholesale portfolio corresponds to adjustments to the performing portfolio (stage 1 and stage 2). 3 (A) refers to probability-weighted allowance for ECL before any adjustments are applied. 4 (B) refers to adjustments that are applied where management believes allowance for ECL does not sufficiently reflect the credit risk/ECL of any given portfolio at the reporting date. These can relate to risks or uncertainties that are not reflected in the model and/or to any late-breaking events. 5 (C) refers to adjustments to allowance for ECL made to a ddress process limitations and data/model deficiencies and can also include where appropriate, the impact of new models where governance has sufficiently progressed to allow an accurate estimate of ECL allowance to be incorporated into the total reported ECL. 6 As presented within our internal credit risk governance (see page 140 ) . Management judgemental adjustments at 31 December 2025 were an increase to allowance for ECL of $0.1bn for the wholesale portfolio, and $ 0.1 b n for the retail portfolio. At 31 December 2025, wholesale management judgemental adjustments to the allowance for ECL remained stable at $ 0.1 b n, consistent with the position at 31 December 2024. These were mainly to corporate exposures to reflect heightened uncertainty in specific sectors and geographies, including offsetting adjustments to the real estate sector in mainland China, Hong Kong and the US, and adjustments to exposures to the automotive and industrial sectors in Germany. At 31 December 2025, retail management judgemental adjustments were an increase to allowance for ECL of $ 0.1 b n (31 December 2024: $ 0.0 b n). The marginal increase in ‘Other credit judgements’ compared with 31 December 2024 was in relation to a number of market-specific adjustments that were not individually significant. Economic scenarios sensitivity analysis of ECL estimates Management considered the sensitivity of the ECL outcome against the economic forecasts as part of the ECL governance process by recalculating the allowance for ECL under each scenario described above for selected portfolios, applying a 100 % weighting to each scenario in turn. The weighting is reflected in both the determination of a significant increase in credit risk and the measurement of the resulting allowances. The allowance for ECL calculated for the Upside and Downside scenarios should not be taken to represent the upper and lower limits of possible ECL outcomes. The impact of defaults that might occur in the future under different economic scenarios is captured by recalculating allowances for loans at the balance sheet date. There is a particularly high degree of estimation uncertainty in numbers representing tail risk scenarios when assigned a 100 % weighting. For wholesale credit risk exposures, the sensitivity analysis excludes allowance for ECL and financial instruments related to defaulted (stage 3) obligors. The measurement of stage 3 ECL is relatively more sensitive to credit factors specific to the obligor than future economic scenarios, and therefore the effects of macroeconomic factors are not necessarily the key consideration when performing individual assessments of allowances for obligors in default. Loans to defaulted obligors are a small portion of the overall wholesale lending exposure, even if representing the majority of the allowance for ECL. Due to the range and specificity of the credit factors to which the ECL is sensitive, it is not possible to provide a meaningful alternative sensitivity analysis for a consistent set of risks across all defaulted obligors. For retail mortgage exposures the sensitivity analysis includes allowance for ECL for defaulted obligors of loans and advances. This is because the retail ECL for secured mortgage portfolios, including loans in all stages, is sensitive to macroeconomic variables. Wholesale and retail sensitivity The wholesale and retail sensitivity tables present the 100 % weighted results for each of our scenarios. These exclude portfolios held by the insurance business and small portfolios, and as such cannot be directly compared with personal and wholesale lending presented in other credit risk tables. In both the wholesale and retail analysis, the comparative period results for Downside 2 scenarios are also not directly comparable with the current period, because they reflect different risks relative to the consensus scenarios for the period end. The wholesale and retail sensitivity analysis is stated inclusive of management judgemental adjustments, as appropriate to each scenario. For both retail and wholesale portfolios, the gross carrying amount of financial instruments are the same under each scenario. For exposures with similar risk profile and product characteristics, the sensitivity impact is therefore largely the result of changes in macroeconomic assumptions. HSBC Holdings plc Annual Report on Form 20-F 155 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Wholesale analysis IFRS 9 ECL sensitivity to future economic conditions 1,2,3 Reported Gross carrying amount 4 Reported allowance for ECL Consensus Central scenario allowance for ECL Consensus Upside scenario allowance for ECL Consensus Downside scenario allowance for ECL Downside 2 scenario allowance for ECL By geography at 31 Dec 2025 $m $m $m $m $m $m UK 465,228 598 571 513 680 1,119 US 208,425 210 194 166 264 563 Hong Kong 472,454 439 401 305 570 1,143 Mainland China 133,814 188 176 137 256 397 Mexico 38,076 62 58 47 76 202 UAE 62,827 52 51 47 56 82 France 196,137 121 117 103 139 188 Other geographies 5 487,987 234 208 158 358 790 Total 2,064,949 1,905 1,778 1,477 2,399 4,485 of which: Stage 1 1,940,746 690 638 522 830 971 Stage 2 124,203 1,214 1,139 955 1,569 3,514 By geography at 31 Dec 2024 UK 432,160 717 667 526 850 2,389 US 202,888 216 201 205 247 461 Hong Kong 450,966 659 616 465 906 1,496 Mainland China 137,960 178 141 84 329 886 Mexico 34,713 69 61 46 86 302 UAE 58,909 51 49 40 58 120 France 184,591 82 80 69 97 125 Other geographies 5,6 455,823 234 216 176 304 774 Total 1,958,010 2,205 2,031 1,612 2,877 6,555 of which: Stage 1 1,830,264 689 632 494 797 803 Stage 2 127,746 1,516 1,399 1,118 2,080 5,751 1 Allowance for ECL sensitivity includes off-balance sheet financial instruments. These are subject to significant measurement uncertainty. 2 Includes low credit-risk financial instruments such as debt instruments at FVOCI, which have high carrying amounts but low ECL under all the above scenarios. 3 Excludes defaulted obligors. For a detailed breakdown of performing and non-performing wholesale portfolio exposures, see page 169 . 4 Staging refers only to probability-weighted/reported gross carrying amount. Stage allocation of gross exposures varies by scenario, with higher allocation to stage 2 under the Downside 2 scenario. 5 Includes small portfolios that use less complex modelling approaches and are not sensitive to macroeconomic changes. 6 Includes the Argentina and Armenia businesses, which were sold in 2024. At 31 December 2025, the highest level of 100 % scenario-weighted allowance for ECL was observed in the UK and Hong Kong under the Downside 2 scenario, driven primarily by a larger exposure to those geographies, namely in the real estate sector. In relation to the underlying exposure, mainland China and Mexico have the higher Downside 2 ECL coverage, mostly due to the relatively larger proportion of higher risk exposures in those geographies. Compared with 31 December 2024, the ECL impact on all consensus scenarios has decreased due to the effects of enhanced credit risk models and updates to our forward economic scenarios. In the wholesale portfolio, off-balance sheet financial instruments have a lower likelihood to be fully converted to a funded exposure at the point of default, and consequently the sensitivity of the allowance for ECL is lower in relation to its nominal amount, when compared with an on-balance sheet exposure with a similar risk profile. Retail analysis At 31 December 2025, the most significant level of allowance for ECL sensitivity was observed in the UK, Mexico and Hong Kong. Mortgages reflected the lowest level of allowance for ECL sensitivity across most markets given the significant levels of collateral relative to the exposure values. Credit cards and other unsecured lending across stages 1 and 2 are more sensitive to economic forecasts and therefore reflected the highest level of allowance for ECL sensitivity during 2025. The ECL allowance in all consensus scenarios compared with 31 December 2024 was stable. There was a decrease in the Downside 2 scenario, which was primarily due to improvements in the House Price Index forecasts in Hong Kong. There was limited sensitivity in credit cards and other unsecured lending in stage 3 as levels of loss on defaulted exposures remained consistent through various economic conditions. The Downside 2 scenario reflects the tail of the economic distribution where allowance for ECL is more sensitive based on historical experience and includes a stressed LGD for a limited number of portfolios. The reported gross carrying amount by stage is representative of the weighted scenario allowance for ECL. The allowance for ECL sensitivity to the other scenarios includes changes in allowance for ECL due to the levels of loss and the migration of additional lending balances in, or out, of stage 2. HSBC Holdings plc Annual Report on Form 20-F 156 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk IFRS 9 ECL sensitivity to future economic conditions 1 At 31 Dec 2025 At 31 Dec 2024 Reported gross carrying amount Reported allowance for ECL Consensus Central scenario allowance for ECL Consensus Upside scenario allowance for ECL Consensus Downside scenario allowance for ECL Downside 2 scenario allowance for ECL Reported gross carrying amount Reported allowance for ECL Consensus Central scenario allowance for ECL Consensus Upside scenario allowance for ECL Consensus Downside scenario allowance for ECL Downside 2 scenario allowance for ECL By geography $m $m $m $m $m $m $m $m $m $m $m $m UK Mortgages 183,128 132 124 117 138 274 163,541 126 117 107 132 288 Credit cards 8,317 356 354 338 355 419 7,415 280 275 265 276 447 Other 9,513 265 261 238 276 370 8,249 241 233 217 243 351 Mexico Mortgages 8,430 190 188 180 193 237 7,482 165 162 155 168 215 Credit cards 2,322 407 403 398 409 514 2,227 337 333 330 338 423 Other 3,727 437 437 435 442 589 3,722 419 416 413 422 593 Hong Kong Mortgages 106,736 5 4 3 6 13 106,866 5 5 4 5 10 Credit cards 9,739 313 306 300 324 496 9,419 293 275 268 300 770 Other 6,085 146 137 136 144 173 6,210 106 102 101 105 249 UAE Mortgages 2,306 6 6 6 6 7 1,993 8 8 8 8 8 Credit cards 591 39 39 38 40 46 536 31 31 31 31 35 Other 620 12 11 11 12 13 688 17 17 17 17 19 US Mortgages 17,797 4 4 4 5 8 16,965 6 6 6 6 8 Credit cards 187 14 14 14 14 16 193 15 14 14 15 17 Other geographies Mortgages 56,067 109 106 102 114 175 51,064 131 127 124 136 180 Credit cards 3,834 175 174 173 179 202 3,500 162 159 156 164 223 Other 2,313 78 78 77 78 85 2,292 72 72 69 73 93 Total 421,712 2,688 2,646 2,570 2,735 3,637 392,361 2,413 2,351 2,285 2,440 3,928 of which: mortgages 374,464 446 432 412 462 714 347,910 440 425 405 456 708 Stage 1 353,960 54 53 50 61 161 311,875 51 47 43 58 129 Stage 2 18,056 106 97 88 108 216 33,761 126 117 107 129 275 Stage 3 2,448 286 282 274 293 337 2,274 263 261 255 269 304 of which: credit cards 24,990 1,304 1,290 1,261 1,321 1,693 23,290 1,116 1,086 1,064 1,124 1,915 Stage 1 21,258 353 347 335 366 553 19,915 276 267 258 284 701 Stage 2 3,450 731 723 706 735 913 3,107 655 634 621 656 1,027 Stage 3 282 220 220 220 220 227 267 185 185 185 185 188 of which: others 22,258 938 924 897 952 1,230 21,161 856 839 816 860 1,305 Stage 1 19,494 253 249 233 265 444 18,574 216 204 193 217 532 Stage 2 2,177 403 393 382 405 494 2,005 360 355 343 363 483 Stage 3 587 282 282 282 282 292 583 279 279 279 279 290 1 Allowance for ECL sensitivities exclude portfolios utilising less complex modelling approaches. HSBC Holdings plc Annual Report on Form 20-F 157 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Group ECL sensitivity results The allowance for ECL of the scenarios and management judgemental adjustments is highly sensitive to movements in economic forecasts. Based upon the sensitivity tables presented above, if the Group allowance for ECL balance was estimated solely on the basis of the Central scenario, Downside scenario or the Downside 2 scenario at 31 December 2025 , it would increase/(decrease) as presented in the below table. Total Group ECL at 31 December 2025 At 31 December 2025 At 31 December 2024 Retail 1 Wholesale 1 Retail 1 Wholesale 1 $bn $bn $bn $bn Reported allowance for ECL 2.7 1.9 2.4 2.2 Scenarios 100 % Consensus Central scenario ( 0.0 ) 0.0 ( 0.1 ) ( 0.2 ) 100 % Consensus Upside scenario ( 0.1 ) ( 0.3 ) ( 0.1 ) ( 0.6 ) 100 % Consensus Downside scenario 0.0 0.6 0.0 0.7 100 % Downside 2 scenario 0.9 2.7 1.5 4.3 1 On the same basis as retail and wholesale sensitivity analysis. At 31 December 2025, the Group allowance for ECL increased in the retail portfolio by $ 0.3 b n and decreased by $ 0.3 b n in the wholesale portfolio, compared with 31 December 2024. Compared with 31 December 2024, both the retail and wholesale portfolio Group ECL sensitivity across all consensus scenarios decreased due to an improving economic outlook. For the retail portfolios the ECL sensitivity decrease across the Downside 2 scenario was primarily due to improvements in Hong Kong and UK unsecured portfolios. For the wholesale portfolios, the decrease was largely driven by crystallisation of defaults in certain sectors and an improving economic outlook. Reconciliation from reported exposure and ECL to sensitised exposure and weighted ECL Wholesale Retail Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m Included in sensitivity analysis 2,064,949 ( 1,905 ) 421,712 ( 2,688 ) 2,486,661 ( 4,593 ) – Exclusions from sensitivity as described in the section above 1 21,336 ( 6,394 ) 330,144 ( 147 ) 351,480 ( 6,541 ) –  Debt instruments measured at fair value through other comprehensive income 2 ( 383,568 ) 30 — — ( 383,568 ) 30 –  Performance guarantees 2 ( 102,684 ) 269 — — ( 102,684 ) 269 –  Other financial assets at amortised cost not presented as wholesale or personal lending, including held for sale 2 ( 539,467 ) 102 ( 616 ) 9 ( 540,083 ) 111 –  Other 3 6,757 ( 342 ) ( 2,735 ) 1 4,022 ( 341 ) As reported in the Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 Dec 2025 1,067,323 ( 8,240 ) 748,505 ( 2,825 ) 1,815,828 ( 11,065 ) Other financial assets at amortised cost 890,326 ( 129 ) Total reported in the Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 Dec 2025 2,706,154 ( 11,194 ) Included in sensitivity analysis 1,958,010 ( 2,205 ) 392,361 ( 2,413 ) 2,350,371 ( 4,618 ) –  Exclusions from sensitivity as described in the section above 1 20,409 ( 5,419 ) 309,178 ( 124 ) 329,587 ( 5,543 ) –  Debt instruments measured at fair value through other comprehensive income 2 ( 346,124 ) 54 — — ( 346,124 ) 54 –  Performance guarantees 2 ( 92,722 ) 311 — — ( 92,722 ) 311 –  Other financial assets at amortised cost not presented as wholesale or personal lending, including held for sale 2 ( 568,668 ) 141 ( 130 ) — ( 568,798 ) 141 –  Other 3 5,978 ( 441 ) 498 ( 9 ) 6,476 ( 450 ) As reported in the Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 Dec 2024 976,883 ( 7,559 ) 701,907 ( 2,546 ) 1,678,790 ( 10,105 ) Other financial assets at amortised cost 828,580 ( 92 ) Total reported in the Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 Dec 2024 2,507,370 ( 10,197 ) 1 Comprises wholesale defaulted obligors, retail portfolios utilising less complex modelling approaches, private banking and insurance. 2 The sensitivity analysis includes certain items reported in ‘Other assets at amortised cost’, which are not allocated to an industry in the credit tables. It also includes debt instruments measured at FVOCI and performance guarantees, which are presented separately in the credit tables. 3 Includes FX and other operational variances. HSBC Holdings plc Annual Report on Form 20-F 158 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Reconciliations of changes in gross carrying/nominal amount and allowances The following disclosure provides a reconciliation by stage of the Group’s gross carrying/nominal amount and allowances for loans and advances to banks and customers, including loan commitments and financial guarantees. In addition, a reconciliation by stage of the Group’s gross carrying amount and allowances for loans and advances to banks and customers and a reconciliation by stage of the Group’s nominal amount and allowances for loan commitments and financial guarantees, were included in this section following adoption of the recommendations of the third report from The Taskforce on Disclosures about Expected Credit Losses (‘DECL’). Movements are calculated on a quarterly basis and therefore fully capture stage movements between quarters. If movements were calculated on a year-to-date basis they would only reflect the opening and closing position of the financial instrument. The transfers of financial instruments represents the impact of stage transfers upon the gross carrying/nominal amount and associated allowance for ECL. The net remeasurement of ECL arising from transfer of stage represents the increase or decrease due to these transfers, for example, moving from a 12-month (stage 1) to a lifetime (stage 2) ECL measurement basis. Net remeasurement excludes the underlying CRR/PD movements of the financial instruments transferring stage. This is captured, along with other credit quality movements in the ‘changes to risk parameters – credit quality’ line item. Changes in ‘Net new and further lending/repayments’ represents the impact from volume movements within the Group’s lending portfolio and includes new financial assets originated or purchased, further lending and repayments (including final repayments). Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2025 1,489,687 ( 1,232 ) 115,898 ( 2,674 ) 23,823 ( 6,148 ) 93 ( 51 ) 1,629,501 ( 10,105 ) Transfers of financial instruments: ( 28,196 ) ( 931 ) 18,327 2,101 9,869 ( 1,170 ) — — — — – transfers from stage 1 to stage 2 ( 134,309 ) 368 134,309 ( 368 ) — — — — — — – transfers from stage 2 to stage 1 107,223 ( 1,233 ) ( 107,223 ) 1,233 — — — — — — –  transfers to stage 3 ( 1,873 ) 15 ( 10,260 ) 1,434 12,133 ( 1,449 ) — — — — –  transfers from stage 3 763 ( 81 ) 1,501 ( 198 ) ( 2,264 ) 279 — — — — Net remeasurement of ECL arising from transfer of stage — 664 — ( 604 ) — ( 58 ) — — — 2 Changes due to modifications not derecognised — — — — — — — — — — Net new and further lending/repayments 107,733 ( 178 ) ( 35,843 ) 614 ( 6,060 ) 768 238 2 66,068 1,206 Changes to risk parameters – credit quality — 390 — ( 1,991 ) — ( 3,737 ) — ( 24 ) — ( 5,362 ) Changes to models used for ECL calculation — ( 59 ) — 272 — ( 16 ) — — — 197 Assets written off — — — — ( 3,569 ) 3,569 — — ( 3,569 ) 3,569 Credit-related modifications that resulted in derecognition — — — — ( 88 ) 9 — — ( 88 ) 9 Foreign exchange and others 1,2 42,772 ( 16 ) 4,507 ( 152 ) 1,259 ( 410 ) 6 ( 3 ) 48,544 ( 581 ) At 31 Dec 2025 1,611,996 ( 1,362 ) 102,889 ( 2,434 ) 25,234 ( 7,193 ) 337 ( 76 ) 1,740,456 ( 11,065 ) ECL income statement change for the period 817 ( 1,709 ) ( 3,043 ) ( 22 ) ( 3,957 ) Recoveries 320 Others ( 248 ) Total ECL income statement change for the period ( 3,885 ) 1 Total includes $ 6.0 b n of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 27 m , including business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . 2 This includes $ 7.2 b n of gross carrying loans and advances to customers and corresponding allowance for ECL of $ 7 m in relation to disposal of our retained home and other retail loans in France as disclosed in Note 23 on page 355 . HSBC Holdings plc Annual Report on Form 20-F 159 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees (continued) (Audited) At 31 Dec 2025 12 months ended 31 Dec 2025 Gross carrying/ nominal amount Allowance for ECL ECL charge $m $m $m As above 1,740,456 ( 11,065 ) ( 3,885 ) Other financial assets measured at amortised cost 890,326 ( 129 ) ( 29 ) Non-trading reverse purchase agreement commitments 75,372 — — Performance and other guarantees not considered for IFRS 9 — — 46 Summary of financial instruments to which the impairment requirements in IFRS 9 are applied/Summary consolidated income statement 2,706,154 ( 11,194 ) ( 3,868 ) Debt instruments measured at FVOCI 383,568 ( 30 ) 18 Total allowance for ECL/total income statement ECL change for the period n/a ( 11,224 ) ( 3,850 ) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross exposure Allowance/ provision for ECL Gross exposure Allowance/ provision for ECL Gross exposure Allowance/ provision for ECL Gross exposure Allowance/ provision for ECL Gross exposure Allowance/ provision for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 1,496,805 (1,300) 153,084 (3,102) 20,799 (7,063) 85 (30) 1,670,773 (11,495) Transfers of financial instruments: (19,629) (1,259) 6,652 2,302 12,977 (1,043) — — — — –  transfers from stage 1 to stage 2 (116,211) 419 116,211 (419) — — — — — — –  transfers from stage 2 to stage 1 98,731 (1,627) (98,731) 1,627 — — — — — — –  transfers to stage 3 (2,799) 16 (12,230) 1,321 15,029 (1,337) — — — — –  transfers from stage 3 650 (67) 1,402 (227) (2,052) 294 — — — — Net remeasurement of ECL arising from transfer of stage — 959 — (831) — (144) — — — (16) Changes due to modifications not derecognised — — — — (25) — — — (25) — Net new and further lending/ repayments 87,833 (168) (37,731) 589 (5,246) 1,689 7 (7) 44,863 2,103 Changes to risk parameters – credit quality — 363 — (1,773) — (3,945) — (11) — (5,366) Changes to models used for ECL calculation — 68 — (4) — (20) — — — 44 Assets written off — — — — (4,459) 4,459 — — (4,459) 4,459 Credit-related modifications that resulted in derecognition — — — — — — — — — — Foreign exchange and others 1,2,3 (75,322) 105 (6,107) 145 (223) (81) 1 (3) (81,651) 166 At 31 Dec 2024 1,489,687 (1,232) 115,898 (2,674) 23,823 (6,148) 93 (51) 1,629,501 (10,105) ECL income statement change for the period 1,222 (2,019) (2,420) (18) (3,235) Recoveries 260 Others (158) Total ECL income statement change for the period (3,133) 1 Total includes $ 3.7 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 46 m, reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . 2 Total includes $ 35.3b n of nominal amount and $21m of corresponding allowance for ECL related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. 3 Total includes $ 2.7 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our business in Argentina during 2024. At 31 Dec 2024 12 months ended 31 Dec 2024 Gross carrying/ nominal amount Allowance for ECL ECL charge $m $m $m As above 1,629,501 (10,105) (3,133) Other financial assets measured at amortised cost 828,580 (92) (114) Non-trading reverse purchase agreement commitments 49,289 — — Performance and other guarantees not considered for IFRS 9 — — (173) Summary of financial instruments to which the impairment requirements in IFRS 9 are applied/Summary consolidated income statement 2,507,370 (10,197) (3,420) Debt instruments measured at FVOCI 346,124 (54) 6 Total allowance for ECL/total income statement ECL change for the period n/a (10,251) (3,414) HSBC Holdings plc Annual Report on Form 20-F 160 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Reconciliation of changes in gross carrying amount and allowances for loans and advances to banks and customers Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2025 926,272 (1,087) 93,446 (2,548) 22,617 (6,042) 90 (51) 1,042,425 (9,728) Transfers of financial instruments: (19,240) (873) 9,888 2,039 9,352 (1,166) — — — — –  transfers from stage 1 to stage 2 (96,905) 350 96,905 (350) — — — — — — –  transfers from stage 2 to stage 1 78,715 (1,158) (78,715) 1,158 — — — — — — –  transfers to stage 3 (1,522) 15 (9,650) 1,428 11,172 (1,443) — — — — –  transfers from stage 3 472 (80) 1,348 (197) (1,820) 277 — — — — Net remeasurement of ECL arising from transfer of stage — 613 — (570) — (58) — — — (15) Changes due to modifications not derecognised — — — — — — — — — — Net new and further lending/ repayments 69,338 (169) (26,413) 579 (5,119) 705 238 2 38,044 1,117 Changes to risk parameters – credit quality — 382 — (1,945) — (3,693) — (24) — (5,280) Changes to models used for ECL calculation — (60) — 269 — (16) — — — 193 Assets written off — — — — (3,569) 3,569 — — (3,569) 3,569 Credit-related modifications that resulted in derecognition — — — — (88) 9 — — (88) 9 Foreign exchange and others 1,2 25,399 (11) 4,147 (144) 1,197 (406) 5 (3) 30,748 (564) At 31 Dec 2025 1,001,769 (1,205) 81,068 (2,320) 24,390 (7,098) 333 (76) 1,107,560 (10,699) ECL income statement change for the period 766 (1,667) (3,062) (22) (3,985) Recoveries 320 Others (264) Total ECL income statement change for the period (3,929) 1 Total includes $ 6.0 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 27 m, reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . 2 This includes $ 7.2 b n of gross carrying loans and advances to customers and a corresponding allowance for ECL of $ 7 m in relation to the disposal of our retained portfolio of home and other retail loans in France as disclosed in Note 23 on page 355 . Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 920,863 (1,140) 122,307 (2,967) 19,275 (6,952) 81 (30) 1,062,526 (11,089) Transfers of financial instruments: (19,794) (1,227) 7,344 2,259 12,450 (1,032) — — — — –  transfers from stage 1 to stage 2 (90,611) 404 90,611 (404) — — — — — — –  transfers from stage 2 to stage 1 72,935 (1,580) (72,935) 1,580 — — — — — — –  transfers to stage 3 (2,559) 16 (11,512) 1,310 14,071 (1,326) — — — — –  transfers from stage 3 441 (67) 1,180 (227) (1,621) 294 — — — — Net remeasurement of ECL arising from transfer of stage — 932 — (801) — (144) — — — (13) Changes due to modifications not derecognised — — — — (25) — — — (25) — Net new and further lending/ repayments 52,439 (161) (33,154) 570 (4,535) 1,606 7 (7) 14,757 2,008 Changes to risk parameters – credit quality — 361 — (1,724) — (3,873) — (11) — (5,247) Changes to models used for ECL calculation — 66 — (18) — (20) — — — 28 Assets written off — — — — (4,459) 4,459 — — (4,459) 4,459 Credit-related modifications that resulted in derecognition — — — — — — — — — — Foreign exchange and others 1 (27,236) 82 (3,051) 133 (89) (86) 2 (3) (30,374) 126 At 31 Dec 2024 926,272 (1,087) 93,446 (2,548) 22,617 (6,042) 90 (51) 1,042,425 (9,728) ECL income statement change for the period 1,198 (1,973) (2,431) (18) (3,224) Recoveries 260 Others (161) Total ECL income statement change for the period (3,125) 1 Total includes $ 3.7 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 46 m, reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . HSBC Holdings plc Annual Report on Form 20-F 161 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Reconciliation of changes in nominal amount and allowances for loan commitments and financial guarantees Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2025 563,415 (145) 22,452 (126) 1,206 (106) 3 — 587,076 (377) Transfers of financial instruments: (8,956) (58) 8,439 62 517 (4) — — — — –  transfers from stage 1 to stage 2 (37,404) 18 37,404 (18) — — — — — — –  transfers from stage 2 to stage 1 28,508 (75) (28,508) 75 — — — — — — –  transfers to stage 3 (351) — (610) 6 961 (6) — — — — –  transfers from stage 3 291 (1) 153 (1) (444) 2 — — — — Net remeasurement of ECL arising from transfer of stage — 51 — (34) — — — — — 17 Net new and further lending/ repayments 38,395 (9) (9,430) 35 (941) 63 — — 28,024 89 Changes to risk parameters – credit quality — 8 — (46) — (44) — — — (82) Changes to models used for ECL calculation — 1 — 3 — — — — — 4 Foreign exchange and others 17,373 (5) 360 (8) 62 (4) 1 — 17,796 (17) At 31 Dec 2025 610,227 (157) 21,821 (114) 844 (95) 4 — 632,896 (366) ECL income statement change for the period 51 (42) 19 — 28 Others 16 Total ECL income statement change for the period 44 At 1 Jan 2024 575,942 (160) 30,777 (135) 1,524 (111) 4 — 608,247 (406) Transfers of financial instruments: 165 (32) (692) 43 527 (11) — — — — –  transfers from stage 1 to stage 2 (25,600) 15 25,600 (15) — — — — — — –  transfers from stage 2 to stage 1 25,796 (47) (25,796) 47 — — — — — — –  transfers to stage 3 (240) — (718) 11 958 (11) — — — — –  transfers from stage 3 209 — 222 — (431) — — — — — Net remeasurement of ECL arising from transfer of stage — 27 — (30) — — — — — (3) Net new and further lending/ repayments 35,394 (7) (4,577) 19 (711) 83 — — 30,106 95 Changes to risk parameters – credit quality — 2 — (49) — (72) — — — (119) Changes to models used for ECL calculation — 2 — 14 — — — — — 16 Foreign exchange and others 1,2 (48,086) 23 (3,056) 12 (134) 5 (1) — (51,277) 40 At 31 Dec 2024 563,415 (145) 22,452 (126) 1,206 (106) 3 — 587,076 (377) ECL income statement change for the period 24 (46) 11 — (11) Others 3 Total ECL income statement change for the period (8) 1 Total includes $3 5.3 bn of nominal amount and $ 21 m of corresponding allowance for ECL related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. 2 Total includes $ 2.7 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our business in Argentina during 2024. Credit quality Credit quality of financial instruments (Audited) We assess the credit quality of all financial instruments that are subject to credit risk. The credit quality of financial instruments is a point-in-time assessment of PD, whereas stages 1 and 2 are determined based on relative deterioration of credit quality since initial recognition for the majority of portfolios. Accordingly, for non-credit-impaired financial instruments, there is no direct relationship between the credit quality assessment and stages 1 and 2, although typically the lower credit quality bands exhibit a higher proportion in stage 2. The five credit quality classifications provided below each encompass a range of granular internal credit rating grades assigned to wholesale and personal lending businesses and the external ratings attributed by external agencies to debt securities, as shown in the table on page 172 . HSBC Holdings plc Annual Report on Form 20-F 162 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Distribution of financial instruments by credit quality (Audited) At 31 Dec 2025 At 31 Dec 2024 Gross carrying/notional amount Allowance for ECL/ other credit provisions Net Gross carrying/notional amount Allowance for ECL/ other credit provisions Net Strong Good Satisfactory Sub- standard Credit impaired Total Strong Good Satisfactory Sub- standard Credit impaired Total $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m In-scope for IFRS 9 ECL Loans and advances to customers held at amortised cost 545,487 215,781 191,839 21,455 24,529 999,091 ( 10,692 ) 988,399 515,266 193,080 186,416 22,906 22,705 940,373 ( 9,715 ) 930,658 –  personal 380,030 57,064 30,688 2,801 3,945 474,528 ( 2,797 ) 471,731 360,317 53,595 27,774 1,979 3,560 447,225 ( 2,524 ) 444,701 –  corporate and commercial 113,787 132,972 139,599 18,041 20,106 424,505 ( 7,526 ) 416,979 114,504 118,785 138,705 20,224 18,466 410,684 ( 6,755 ) 403,929 –  non-bank financial institutions 51,670 25,745 21,552 613 478 100,058 ( 369 ) 99,689 40,445 20,700 19,937 703 679 82,464 ( 436 ) 82,028 Loans and advances to banks held at amortised cost 97,524 6,222 4,613 109 1 108,469 ( 7 ) 108,462 92,621 4,255 5,040 134 2 102,052 ( 13 ) 102,039 Cash and balances at central banks 242,187 590 82 — — 242,859 — 242,859 266,713 949 12 — — 267,674 — 267,674 Hong Kong Government certificates of indebtedness 44,063 — — — — 44,063 — 44,063 42,293 — — — — 42,293 — 42,293 Reverse repurchase agreements – non- trading 193,352 78,296 26,740 4 — 298,392 — 298,392 155,831 70,877 25,799 42 — 252,549 — 252,549 Financial investments 171,057 654 10,390 — — 182,101 ( 12 ) 182,089 146,970 3,681 3,331 — — 153,982 ( 9 ) 153,973 Assets held for sale 449 2,751 864 — 51 4,115 ( 27 ) 4,088 2,425 458 367 1 22 3,273 ( 4 ) 3,269 Other assets 95,589 11,950 10,789 335 133 118,796 ( 90 ) 118,706 88,338 9,735 10,151 454 131 108,809 ( 79 ) 108,730 –  endorsements and acceptances 1,504 3,331 3,624 236 11 8,706 ( 11 ) 8,695 2,101 2,663 3,090 243 10 8,107 ( 14 ) 8,093 –  accrued income and other 94,085 8,619 7,165 99 122 110,090 ( 79 ) 110,011 86,237 7,072 7,061 211 121 100,702 ( 65 ) 100,637 Debt instruments measured at FVOCI 1 375,950 2,592 7,572 286 — 386,400 ( 30 ) 386,370 336,313 9,448 7,768 380 — 353,909 ( 54 ) 353,855 Out-of-scope for IFRS 9 ECL Trading assets 143,943 22,187 22,943 603 165 189,841 — 189,841 119,546 21,951 15,804 2,300 47 159,648 — 159,648 Other financial assets designated and otherwise mandatorily measured at fair value through profit or loss 61,509 13,037 5,014 351 19 79,930 — 79,930 53,282 11,862 4,390 231 11 69,776 — 69,776 Derivatives 194,320 33,752 9,382 283 3 237,740 — 237,740 224,870 34,124 9,373 258 12 268,637 — 268,637 Assets held for sale 10 103 — — 148 261 — 261 3,019 — — — — 3,019 — 3,019 Total gross carrying amount on balance sheet 2,165,440 387,915 290,228 23,426 25,049 2,892,058 ( 10,858 ) 2,881,200 2,047,487 360,420 268,451 26,706 22,930 2,725,994 ( 9,874 ) 2,716,120 Percentage of total credit quality (%) 74.9 13.4 10.0 0.8 0.9 100 75.1 13.2 9.9 1.0 0.8 100 Loan and other credit-related commitments 441,740 146,923 91,400 10,073 656 690,792 ( 315 ) 690,477 400,120 131,396 77,220 9,670 961 619,367 ( 348 ) 619,019 Financial guarantees 7,436 4,145 5,144 559 192 17,476 ( 51 ) 17,425 7,365 4,263 4,399 723 248 16,998 ( 29 ) 16,969 In-scope for IFRS 9 ECL 449,176 151,068 96,544 10,632 848 708,268 ( 366 ) 707,902 407,485 135,659 81,619 10,393 1,209 636,365 ( 377 ) 635,988 Loan and other credit-related commitments 105,985 81,431 67,475 2,702 252 257,845 — 257,845 96,952 76,340 65,619 2,847 453 242,211 — 242,211 Performance and other guarantees 47,441 33,190 19,857 1,351 845 102,684 ( 269 ) 102,415 39,940 32,956 17,339 1,671 817 92,723 ( 312 ) 92,411 Out-of-scope for IFRS 9 ECL 153,426 114,621 87,332 4,053 1,097 360,529 ( 269 ) 360,260 136,892 109,296 82,958 4,518 1,270 334,934 ( 312 ) 334,622 1 For the purposes of this disclosure, gross carrying amount is defined as the amortised cost of a financial asset before adjusting for any loss allowance. As such, the gross carrying amount of debt instruments at FVOCI as presented above will not reconcile to the balance sheet as it excludes fair value gains and losses. HSBC Holdings plc Annual Report on Form 20-F 163 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Distribution of financial instruments to which the impairment requirements in IFRS 9 are applied, by credit quality and stage allocation (Audited) At 31 Dec 2025 At 31 Dec 2024 Gross carrying/notional amount Allowance for ECL Net Gross carrying/notional amount Allowance for ECL Net Strong Good Satisfactory Sub- standard Credit impaired Total Strong Good Satisfactory Sub- standard Credit impaired Total $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m Loans and advances to customers at amortised cost 545,487 215,781 191,839 21,455 24,529 999,091 ( 10,692 ) 988,399 515,266 193,080 186,416 22,906 22,705 940,373 ( 9,715 ) 930,658 –  stage 1 540,253 194,680 152,578 5,922 — 893,433 ( 1,201 ) 892,232 498,415 170,420 150,818 4,767 — 824,420 ( 1,078 ) 823,342 –  stage 2 5,234 21,101 39,068 15,533 — 80,936 ( 2,318 ) 78,618 16,851 22,660 35,598 18,139 — 93,248 ( 2,546 ) 90,702 –  stage 3 — — — — 24,389 24,389 ( 7,097 ) 17,292 — — — — 22,615 22,615 ( 6,040 ) 16,575 –  POCI — — 193 — 140 333 ( 76 ) 257 — — — — 90 90 ( 51 ) 39 Loans and advances to banks at amortised cost 97,524 6,222 4,613 109 1 108,469 ( 7 ) 108,462 92,621 4,255 5,040 134 2 102,052 ( 13 ) 102,039 –  stage 1 97,426 6,215 4,608 87 — 108,336 ( 4 ) 108,332 92,528 4,226 4,981 117 — 101,852 ( 9 ) 101,843 –  stage 2 98 7 5 22 — 132 ( 2 ) 130 93 29 59 17 — 198 ( 2 ) 196 –  stage 3 — — — — 1 1 ( 1 ) — — — — — 2 2 ( 2 ) — –  POCI — — — — — — — — — — — — — — — — Other financial assets measured at amortised cost 746,697 94,241 48,865 339 184 890,326 ( 129 ) 890,197 702,570 85,700 39,660 497 153 828,580 ( 92 ) 828,488 –  stage 1 746,536 93,759 48,121 75 — 888,491 ( 76 ) 888,415 702,373 85,032 38,977 239 — 826,621 ( 64 ) 826,557 –  stage 2 161 482 744 264 — 1,651 ( 11 ) 1,640 197 668 683 258 — 1,806 ( 5 ) 1,801 –  stage 3 — — — — 184 184 ( 42 ) 142 — — — — 153 153 ( 23 ) 130 –  POCI — — — — — — — — — — — — — — — — Loan and other credit-related commitments 441,740 146,923 91,400 10,073 656 690,792 ( 315 ) 690,477 400,120 131,396 77,220 9,670 961 619,367 ( 348 ) 619,019 –  stage 1 437,973 143,849 82,145 5,681 — 669,648 ( 149 ) 669,499 398,779 125,956 67,949 4,547 — 597,231 ( 137 ) 597,094 –  stage 2 3,767 3,074 9,255 4,392 — 20,488 ( 97 ) 20,391 1,341 5,440 9,271 5,123 — 21,175 ( 121 ) 21,054 –  stage 3 — — — — 652 652 ( 69 ) 583 — — — — 958 958 ( 90 ) 868 –  POCI — — — — 4 4 — 4 — — — — 3 3 — 3 Financial guarantees 7,436 4,145 5,144 559 192 17,476 ( 51 ) 17,425 7,365 4,263 4,399 723 248 16,998 ( 29 ) 16,969 –  stage 1 7,430 4,040 4,351 92 — 15,913 ( 8 ) 15,905 7,352 4,192 3,625 184 — 15,353 ( 8 ) 15,345 –  stage 2 6 105 793 467 — 1,371 ( 17 ) 1,354 13 71 774 539 — 1,397 ( 5 ) 1,392 –  stage 3 — — — — 192 192 ( 26 ) 166 — — — — 248 248 ( 16 ) 232 –  POCI — — — — — — — — — — — — — — — — Total 1,838,884 467,312 341,861 32,535 25,562 2,706,154 ( 11,194 ) 2,694,960 1,717,942 418,694 312,735 33,930 24,069 2,507,370 ( 10,197 ) 2,497,173 Debt instruments at FVOCI 1 –  stage 1 375,894 2,592 7,015 3 — 385,504 ( 28 ) 385,476 336,264 9,448 7,290 — — 353,002 ( 31 ) 352,971 –  stage 2 56 — 557 283 — 896 ( 2 ) 894 49 — 478 380 — 907 ( 23 ) 884 –  stage 3 — — — — — — — — — — — — — — — — –  POCI — — — — — — — — — — — — — — — — Total 375,950 2,592 7,572 286 — 386,400 ( 30 ) 386,370 336,313 9,448 7,768 380 — 353,909 ( 54 ) 353,855 1 For the purposes of this disclosure, gross carrying amount is defined as the amortised cost of a financial asset before adjusting for any loss allowance. As such, the gross carrying amount of debt instruments at FVOCI as presented above will not reconcile to the balance sheet as it excludes fair value gains and losses. HSBC Holdings plc Annual Report on Form 20-F 164 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Credit-i mpaired loans (Audited) We determine that a financial instrument is credit impaired and in stage 3 by considering relevant objective evidence, primarily whether: – contractual payments of either principal or interest are past due for more than 90 days; – there are other indications that the borrower is unlikely to pay, such as when a concession has been granted to the borrower for economic or legal reasons relating to the borrower’s financial condition; and – the loan is otherwise considered to be in default. If such unlikeliness to pay is not identified at an earlier stage, it is deemed to occur when an exposure is 90 days past due. Therefore, the definitions of credit impaired and default are aligned as far as possible so that stage 3 represents all loans that are considered defaulted or otherwise credit impaired . Forbearance The following table shows the gross carrying amount and allowance for ECL of the Group’s holdings of forborne loans and advances to customers by industry sector and by stages. Ñ A summary of our current policies and practices for forbearance is set out in ‘Credit risk management’ on page 140 . Forborne loans and advances to customers at amortised cost by stage allocation Performing forborne Non-performing forborne Total forborne Stage 2 Stage 3 POCI Total $m $m $m $m Gross carrying amount Personal 619 1,658 — 2,277 –  first lien residential mortgages 332 1,162 — 1,494 –  credit cards 81 110 — 191 –  other personal lending 206 386 — 592 –  other personal lending which is secured 1 47 99 — 146 –  other personal lending which is unsecured 159 287 — 446 Wholesale 4,116 8,201 139 12,456 –  corporate and commercial 3,951 8,193 139 12,283 –  non-bank financial institutions 165 8 — 173 At 31 Dec 2025 4,735 9,859 139 14,733 Allowance for ECL Personal (65) (328) — (393) –  first lien residential mortgages (21) (147) — (168) –  credit cards (14) (70) — (84) –  other personal lending (30) (111) — (141) –  other personal lending which is secured 1 (1) (8) — (9) –  other personal lending which is unsecured (29) (103) — (132) Wholesale (307) (2,298) (75) (2,680) –  corporate and commercial (303) (2,295) (75) (2,673) –  non-bank financial institutions (4) (3) — (7) At 31 Dec 2025 (372) (2,626) (75) (3,073) Gross carrying amount Personal 545 1,424 — 1,969 –  first lien residential mortgages 266 1,040 — 1,306 –  credit cards 86 87 — 173 –  other personal lending 193 297 — 490 –  other personal lending which is secured 1 46 17 — 63 –  other personal lending which is unsecured 147 280 — 427 Wholesale 4,325 7,542 85 11,952 –  corporate and commercial 4,247 7,351 85 11,683 –  non-bank financial institutions 78 191 — 269 At 31 Dec 2024 4,870 8,966 85 13,921 Allowance for ECL Personal (73) (305) — (378) –  first lien residential mortgages (12) (148) — (160) –  credit cards (17) (45) — (62) –  other personal lending (44) (112) — (156) –  other personal lending which is secured 1 (6) (3) — (9) –  other personal lending which is unsecured (38) (109) — (147) Wholesale (461) (2,008) (51) (2,520) –  corporate and commercial (460) (1,972) (51) (2,483) –  non-bank financial institutions (1) (36) — (37) At 31 Dec 2024 (534) (2,313) (51) (2,898) 1 ‘Other personal lending which is secured’ has been expanded to encompass second lien mortgages, motor vehicle finance, and guaranteed loans related to residential property, which were previously reported as separate line items. HSBC Holdings plc Annual Report on Form 20-F 165 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Forborne loans and advances to customers by legal entities HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total $m $m $m $m $m $m $m $m Gross carrying amount Performing forborne 1,298 1,172 1,079 78 804 276 28 4,735 Non-performing forborne 2,032 1,196 4,975 571 403 560 261 9,998 At 31 Dec 2025 3,330 2,368 6,054 649 1,207 836 289 14,733 Allowance for ECL Performing forborne (94) (35) (129) (25) (50) (38) (1) (372) Non-performing forborne (379) (358) (1,285) (246) (84) (173) (176) (2,701) At 31 Dec 2025 (473) (393) (1,414) (271) (134) (211) (177) (3,073) Gross carrying amount Performing forborne 1,251 1,506 1,073 10 787 201 42 4,870 Non-performing forborne 2,231 1,578 3,698 460 464 355 265 9,051 At 31 Dec 2024 3,482 3,084 4,771 470 1,251 556 307 13,921 Allowance for ECL Performing forborne (101) (36) (296) (1) (52) (48) — (534) Non-performing forborne (393) (464) (943) (196) (71) (127) (170) (2,364) At 31 Dec 2024 (494) (500) (1,239) (197) (123) (175) (170) (2,898) Collateral and other credit enhancements (Audited) Although collateral can be an important mitigant of credit risk, it is the Group’s practice to typically lend on the basis of the customer’s ability to meet their obligations out of cash flow resources rather than placing primary reliance on collateral and other credit risk enhancements. Depending on the customer’s standing and the type of product, facilities may be provided without any collateral or other credit enhancements. For other lending, a charge over collateral is obtained and considered in determining the credit decision and pricing. In the event of default, the Group may utilise the collateral as a source of repayment. Depending on its form, collateral can have a significant financial effect in mitigating our exposure to credit risk. Where there is sufficient collateral, an expected credit loss is not recognised. This is the case for reverse repurchase agreements and for certain loans and advances to customers where the loan to value (‘LTV’) is very low. Mitigants may include a charge on borrowers’ specific assets, such as real estate or financial instruments. Other credit risk mitigants include short positions in securities and financial assets held as part of linked insurance/investment contracts where the risk is predominantly borne by the policyholder. Additionally, risk may be managed by employing other types of collateral and credit risk enhancements, such as second charges, other liens and unsupported guarantees. Guarantees are normally taken from corporates and export credit agencies. Corporates would normally provide guarantees as part of a parent/subsidiary relationship and span a number of credit grades. The export credit agencies will normally be investment grade. Certain credit mitigants are used strategically in portfolio management activities. Across Corporate and Institutional Banking, risk limits and utilisations, maturity profiles and risk quality are monitored and managed proactively. This process is key to the setting of risk appetite for these larger, more complex, geographically distributed customer groups. While the principal form of risk management continues to be at the point of exposure origination, through the lending decision-making process, Corporate and Institutional Banking also utilises loan sales and credit default swap (‘CDS’) hedges to manage concentrations and reduce risk. These transactions are the responsibility of a dedicated Corporate and Institutional Banking portfolio management team. Hedging activity is carried out within agreed credit parameters, and is subject to market risk limits and a robust governance structure. Where applicable, CDSs are entered into directly with a central clearing house counterparty. Otherwise, the Group’s exposure to CDS protection providers is diversified among mainly banking counterparties with strong credit ratings. CDS mitigants are held at portfolio level and are not included in the expected credit loss calculations. CDS mitigants are not reported in the following tables. Collateral on loans and advances Collateral held is analysed separately for CRE and for other corporate, commercial and financial (non-bank) lending. The following tables include off-balance sheet loan commitments, primarily undrawn credit lines. The collateral measured in the following tables consists of fixed first charges on real estate, and charges over cash and marketable financial instruments. The values in the tables represent the expected market value on an open market basis, actual values realised are a function of market conditions. No adjustment has been made to the collateral for any expected costs of recovery. Marketable securities are measured at their fair value. Other types of collateral, such as unsupported guarantees and floating charges over the assets of a customer’s business, are not measured in the following tables. While such mitigants have value, often providing rights in insolvency, their assignable value is not sufficiently certain and they are therefore assigned no value for disclosure purposes. The LTV ratios presented are calculated by directly associating loans and advances with the collateral that individually and uniquely supports each facility. When collateral assets are shared by multiple loans and advances, whether specifically or, more generally, by way of an all monies charge, the collateral value is pro-rated across the loans and advances protected by the collateral. HSBC Holdings plc Annual Report on Form 20-F 166 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk For credit-impaired loans, the collateral values cannot be directly compared with impairment allowances recognised. The LTV figures use open market values with no adjustments, actual values realised are a function of market conditions. Impairment allowances are calculated on a different basis, by considering other cash flows and adjusting collateral values for costs of realising collateral as explained further on page 305 . Mortgage loans The following table provides a quantification of the value of fixed charges we hold over specific assets where we have a history of enforcing, and are able to enforce, collateral in satisfying a debt in the event of the borrower failing to meet its contractual obligations, and where the collateral is cash or can be realised by sale in an established market. The collateral valuation excludes any adjustments for obtaining and selling the collateral and, in particular, loans shown as not collateralised or partially collateralised may also benefit from other forms of credit mitigants. The quality of both our Hong Kong and UK mortgage books remained strong, with low levels of impairment allowances. The average LTV ratio on new mortgage lending in Hong Kong was 70 % , compared with an estimated 60 % for the overall mortgage portfolio. The average LTV ratio on new lending in the UK was 69 % , compared with an estimated 55 % for the overall mortgage portfolio. Commercial real estate loans and advances The value of CRE collateral is determined by using a combination of external and internal valuations and physical inspections. For CRE, where the facility exceeds regulatory threshold requirements, Group policy requires an independent review of the valuation at least every three years , or more frequently as the need arises. In Hong Kong, unsecured lending is typically limited to major property companies. In Europe, facilities of a working capital nature are generally not secured by a first fixed charge, and are therefore disclosed as not collateralised. Other corporate, commercial and financial (non-bank) loans and advances Other corporate, commercial and financial (non-bank) loans are analysed separately in the following table. For financing activities in other corporate and commercial lending, collateral value is not strongly correlated to principal repayment performance. Collateral values are generally refreshed when an obligor’s general credit performance deteriorates and we have to assess the likely performance of secondary sources of repayment should it prove necessary to rely on them. HSBC Holdings plc Annual Report on Form 20-F 167 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Loans and advances to customers including loan commitments by level of collateral for key countries/territories (by stage) at 31 December 2025 (Audited) Gross carrying/nominal amount ECL coverage Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m % % % % % Residential mortgages Fully collateralised by LTV ratio 383,401 18,150 2,573 404,124 — 0.6 10.5 0.1 –  less than 50% 159,089 9,161 1,336 169,586 — 0.4 8.3 0.1 –  51% to 70% 125,204 5,484 751 131,439 — 0.6 11.2 0.1 –  71% to 80% 46,175 1,934 258 48,367 — 0.7 13.8 0.1 –  81% to 90% 37,415 971 167 38,553 — 0.9 15.9 0.1 –  91% to 100% 15,518 600 61 16,179 — 1.5 20.2 0.1 Partially collateralised (A): LTV > 100% 4,924 138 97 5,159 — 2.2 44.3 0.9 –  collateral value on A 4,707 129 66 4,902 of which: UK Fully collateralised by LTV ratio 190,214 13,257 816 204,287 — 0.3 9.7 0.1 –  less than 50% 77,859 7,260 421 85,540 — 0.1 8.2 0.1 –  51% to 70% 61,605 4,183 254 66,042 — 0.3 8.7 0.1 –  71% to 80% 25,237 1,226 85 26,548 — 0.5 14.0 0.1 –  81% to 90% 22,218 548 46 22,812 — 0.7 16.1 0.1 –  91% to 100% 3,295 40 10 3,345 — 1.0 27.0 0.1 Partially collateralised (B): LTV > 100% 58 2 8 68 — 0.6 32.5 3.8 –  collateral value on B 29 1 7 37 of which: Hong Kong Fully collateralised by LTV ratio 102,801 1,503 165 104,469 — — 0.7 — –  less than 50% 40,518 762 83 41,363 — — 0.2 — –  51% to 70% 31,015 345 41 31,401 — — 0.5 — –  71% to 80% 6,698 83 17 6,798 — 0.1 1.8 — –  81% to 90% 12,906 132 12 13,050 — 0.2 0.8 — –  91% to 100% 11,664 181 12 11,857 — 0.2 2.5 — Partially collateralised (C): LTV > 100% 4,781 87 18 4,886 — 0.2 8.3 — –  collateral value on C 4,593 85 16 4,694 Commercial real estate Not collateralised 36,879 3,792 1,310 6 41,987 0.1 2.7 64.6 — 2.3 Fully collateralised by LTV ratio 26,814 16,633 6,942 13 50,402 0.1 1.7 13.3 — 2.4 –  less than 50% 13,415 10,682 2,563 13 26,673 0.1 1.4 11.0 — 1.7 –  51% to 75% 9,168 4,770 2,755 — 16,693 0.2 2.2 13.5 — 2.9 –  76% to 90% 2,232 915 1,055 — 4,202 0.1 1.9 13.6 — 3.9 –  91% to 100% 1,999 266 569 — 2,834 0.1 2.3 21.6 — 4.6 Partially collateralised (A): LTV > 100% 3,635 350 1,093 80 5,158 0.1 3.1 35.4 57.5 8.7 –  collateral value on A 2,317 240 780 33 3,370 of which: UK Not collateralised 8,633 389 56 — 9,078 0.2 8.2 19.6 — 0.7 Fully collateralised by LTV ratio 12,426 1,661 354 — 14,441 0.2 2.6 21.8 — 1.0 –  less than 50% 4,606 430 36 — 5,072 0.2 1.4 38.9 — 0.6 –  51% to 75% 5,772 914 209 — 6,895 0.2 3.8 24.9 — 1.4 –  76% to 90% 1,511 308 107 — 1,926 0.1 1.0 9.3 — 0.7 –  91% to 100% 537 9 2 — 548 0.2 5.1 61.2 — 0.4 Partially collateralised (B): LTV > 100% 2,111 115 67 61 2,354 0.1 0.9 17.9 47.5 1.9 –  collateral value on B 1,381 109 42 30 1,562 of which: Hong Kong Not collateralised 14,360 2,691 1,088 6 18,145 — 2.4 66.5 — 4.4 Fully collateralised by LTV ratio 5,588 12,969 5,467 — 24,024 0.1 0.8 10.6 — 2.9 –  less than 50% 4,008 9,705 2,284 — 15,997 0.1 0.9 8.2 — 1.8 –  51% to 75% 1,167 2,927 2,033 — 6,127 0.2 0.5 10.9 — 3.9 –  76% to 90% 59 294 705 — 1,058 — 1.7 8.4 — 6.0 –  91% to 100% 354 43 445 — 842 — 2.3 25.2 — 13.4 Partially collateralised (C): LTV > 100% 198 110 1,022 19 1,349 — 0.3 36.7 84.2 29.0 –  collateral value on C 149 11 734 3 897 Other corporate, commercial and financial (non-bank) Not collateralised 797,344 60,899 6,186 215 864,644 0.1 0.9 43.5 6.5 0.4 Fully collateralised by LTV ratio 88,647 13,101 3,611 29 105,388 0.1 1.6 14.5 55.2 0.8 –  less than 50% 37,949 5,009 1,446 — 44,404 0.1 1.2 12.3 — 0.6 –  51% to 75% 21,397 4,855 1,249 29 27,530 0.1 2.4 16.7 55.2 1.3 –  76% to 90% 8,253 1,318 677 — 10,248 0.1 1.5 14.0 — 1.2 –  91% to 100% 21,048 1,919 239 — 23,206 — 0.6 16.7 — 0.3 Partially collateralised (A): LTV > 100% 53,980 6,337 2,130 — 62,447 0.1 0.7 45.6 — 1.7 –  collateral value on A 24,763 2,942 1,199 — 28,904 HSBC Holdings plc Annual Report on Form 20-F 168 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Loans and advances to customers including loan commitments by level of collateral for key countries/territories (by stage) at 31 December 2024 (Audited) Gross carrying/nominal amount ECL coverage Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m % % % % % Residential mortgages Fully collateralised by LTV ratio 332,641 34,203 2,371 369,215 — 0.4 10.0 0.1 –  less than 50% 141,331 18,076 1,238 160,645 — 0.2 7.6 0.1 –  51% to 70% 111,963 11,507 698 124,168 — 0.4 11.2 0.1 –  71% to 80% 39,374 3,040 242 42,656 — 0.7 13.1 0.1 –  81% to 90% 25,514 1,264 131 26,909 — 0.9 15.0 0.1 –  91% to 100% 14,459 316 62 14,837 — 1.8 22.4 0.1 Partially collateralised (A): LTV > 100% 12,031 139 103 12,273 — 3.2 46.2 0.4 –  collateral value on A 11,274 126 70 11,470 of which: UK Fully collateralised by LTV ratio 151,264 30,574 747 182,585 — 0.2 8.5 0.1 –  less than 50% 62,753 16,689 445 79,887 — 0.1 6.9 0.1 –  51% to 70% 50,374 10,456 206 61,036 — 0.2 9.7 0.1 –  71% to 80% 20,552 2,423 64 23,039 — 0.4 12.1 0.1 –  81% to 90% 15,965 939 23 16,927 — 0.6 13.0 0.1 –  91% to 100% 1,620 67 9 1,696 — 0.7 16.7 0.1 Partially collateralised (B): LTV > 100% 146 15 5 166 — 1.0 27.7 0.9 –  collateral value on B 109 12 4 125 of which: Hong Kong Fully collateralised by LTV ratio 95,751 756 138 96,645 — — 1.3 — –  less than 50% 38,894 372 79 39,345 — — 0.4 — –  51% to 70% 30,088 227 31 30,346 — — 0.4 — –  71% to 80% 6,783 47 11 6,841 — — 5.1 — –  81% to 90% 7,602 42 9 7,653 — 0.2 1.1 — –  91% to 100% 12,384 68 8 12,460 — 0.1 8.8 — Partially collateralised (C): LTV > 100% 11,744 103 14 11,861 — 0.2 19.1 — –  collateral value on C 11,034 96 12 11,142 Commercial real estate Not collateralised 36,168 4,709 1,704 — 42,581 0.1 9.0 47.5 — 3.0 Fully collateralised by LTV ratio 37,090 11,909 5,254 — 54,253 0.1 1.7 7.8 — 1.2 –  less than 50% 20,522 5,154 2,413 — 28,089 0.1 1.7 5.7 — 0.9 –  51% to 75% 11,392 3,840 1,691 — 16,923 0.1 2.2 7.6 — 1.3 –  76% to 90% 2,554 2,277 767 — 5,598 0.1 0.9 12.5 — 2.1 –  91% to 100% 2,622 638 383 — 3,643 0.2 2.3 12.3 — 1.8 Partially collateralised (A): LTV > 100% 2,119 698 815 64 3,696 0.2 2.8 19.7 45.8 5.8 –  collateral value on A 1,255 457 570 29 2,311 of which: UK Not collateralised 4,487 1,890 127 — 6,504 0.4 3.8 27.8 — 1.9 Fully collateralised by LTV ratio 9,139 3,194 305 — 12,638 0.2 1.1 8.2 — 0.6 –  less than 50% 2,903 761 160 — 3,824 0.2 1.5 8.0 — 0.8 –  51% to 75% 4,202 1,693 69 — 5,964 0.2 1.2 12.0 — 0.6 –  76% to 90% 1,173 732 24 — 1,929 0.1 0.4 10.2 — 0.3 –  91% to 100% 861 8 52 — 921 0.1 7.7 2.7 — 0.3 Partially collateralised (B): LTV > 100% 503 565 119 46 1,233 0.2 2.9 21.1 48.6 5.3 –  collateral value on B 296 350 69 26 741 of which: Hong Kong Not collateralised 16,380 2,312 1,404 — 20,096 — 14.3 47.9 — 5.0 Fully collateralised by LTV ratio 17,115 6,045 4,127 — 27,287 0.1 1.4 5.8 — 1.2 –  less than 50% 12,935 3,589 2,102 — 18,626 0.1 1.3 3.8 — 0.7 –  51% to 75% 3,534 1,059 1,243 — 5,836 0.1 2.2 6.2 — 1.8 –  76% to 90% 336 1,050 654 — 2,040 0.1 1.1 11.8 — 4.4 –  91% to 100% 310 347 128 — 785 — 0.5 2.4 — 0.6 Partially collateralised (C): LTV > 100% 185 62 562 18 827 — 1.9 17.6 38.1 12.9 –  collateral value on C 119 41 397 3 560 Other corporate, commercial and financial (non- bank) Not collateralised 713,028 62,844 6,870 5 782,747 0.1 0.9 41.5 14.2 0.5 Fully collateralised by LTV ratio 87,488 11,992 3,394 21 102,895 0.1 2.0 8.0 98.1 0.6 –  less than 50% 39,432 4,360 1,703 — 45,495 0.1 1.6 6.9 — 0.5 –  51% to 75% 20,169 4,643 778 21 25,611 0.1 2.8 12.0 98.1 1.0 –  76% to 90% 9,016 1,515 512 — 11,043 0.1 1.6 7.1 — 0.6 –  91% to 100% 18,871 1,474 401 — 20,746 — 0.8 6.3 — 0.2 Partially collateralised (A): LTV > 100% 51,536 5,772 2,411 3 59,722 0.1 0.8 34.3 7.0 1.5 –  collateral value on A 22,800 2,519 1,162 1 26,482 HSBC Holdings plc Annual Report on Form 20-F 169 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Wholesale lending The table below provides a breakdown by industry sector and stage of the Group’s gross carrying amount and allowances for ECL for wholesale loans and advances to banks and customers. Counterparties or exposures are classified when presenting comparable economic characteristics, or engaged in similar activities so that their collective ability to meet contractual obligations is uniformly affected by changes in economic, political or other conditions. Therefore, the industry classification does not adhere to Nomenclature des Activités Économiques dans la Communauté Européenne, which is applicable to other financial regulatory reporting. Total wholesale lending for loans and advances to banks and customers by stage distribution Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m Corporate and commercial 349,763 54,636 19,966 140 424,505 (478) (1,064) (5,909) (75) (7,526) –  agriculture, forestry and fishing 6,179 1,058 355 — 7,592 (11) (26) (60) — (97) –  mining and quarrying 6,109 747 126 — 6,982 (6) (10) (70) — (86) –  manufacturing 74,321 9,785 2,229 37 86,372 (87) (132) (720) (21) (960) –  electricity, gas, steam and air- conditioning supply 18,020 1,096 206 — 19,322 (19) (22) (85) — (126) –  water supply, sewerage, waste management and remediation 2,319 132 112 — 2,563 (3) (2) (36) — (41) –  real estate and construction 56,041 21,222 10,497 92 87,852 (84) (449) (2,679) (51) (3,263) –  of which: commercial real estate 41,893 18,183 9,175 87 69,338 (65) (384) (2,116) (45) (2,610) –  wholesale and retail trade, repair of motor vehicles and motorcycles 74,621 7,387 2,538 11 84,557 (69) (92) (1,123) (3) (1,287) –  transportation and storage 16,594 3,818 307 — 20,719 (17) (82) (75) — (174) –  accommodation and food 10,881 2,072 1,436 — 14,389 (31) (65) (303) — (399) –  publishing, audiovisual and broadcasting 22,860 2,110 377 — 25,347 (52) (38) (108) — (198) –  professional, scientific and technical activities 22,580 1,923 520 — 25,023 (29) (36) (153) — (218) –  administrative and support services 16,962 1,993 570 — 19,525 (21) (53) (321) — (395) –  public administration and defence, compulsory social security 64 — — — 64 — — — — — –  education 1,975 244 40 — 2,259 (5) (10) (11) — (26) –  health and care 3,982 323 98 — 4,403 (7) (11) (14) — (32) –  arts, entertainment and recreation 2,074 116 123 — 2,313 (4) (5) (42) — (51) –  other services 5,764 524 311 — 6,599 (31) (31) (106) — (168) –  activities of households 835 6 — — 841 — — — — — –  extra-territorial organisations and bodies activities 164 — — — 164 — — — — — –  government 7,418 80 121 — 7,619 (2) — (3) — (5) –  asset-backed securities — — — — — — — — — — Non-bank financial institutions 96,974 2,413 478 193 100,058 (56) (19) (293) (1) (369) Loans and advances to banks 108,336 132 1 — 108,469 (4) (2) (1) — (7) At 31 Dec 2025 555,073 57,181 20,445 333 633,032 (538) (1,085) (6,203) (76) (7,902) By legal entity HSBC UK Bank plc 98,719 10,488 3,430 — 112,637 (180) (325) (753) — (1,258) HSBC Bank plc 98,175 5,582 1,756 58 105,571 (68) (96) (611) (29) (804) The Hongkong and Shanghai Banking Corporation Limited 283,206 33,990 12,837 77 330,110 (171) (480) (3,694) (41) (4,386) HSBC Bank Middle East Limited 26,643 1,171 1,242 5 29,061 (19) (31) (630) (5) (685) HSBC North America Holdings Inc. 28,456 3,518 517 193 32,684 (41) (100) (145) (1) (287) Grupo Financiero HSBC, S.A. de C.V. 12,057 2,268 378 — 14,703 (47) (49) (190) — (286) Other trading entities 7,727 164 285 — 8,176 (12) (4) (180) — (196) Holding companies, shared service centres and intra-Group eliminations 90 — — — 90 — — — — — At 31 Dec 2025 555,073 57,181 20,445 333 633,032 (538) (1,085) (6,203) (76) (7,902) HSBC Holdings plc Annual Report on Form 20-F 170 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Total wholesale lending for loans and advances to banks and customers by stage distribution (continued) Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m Corporate and commercial 340,987 51,231 18,376 90 410,684 (463) (1,358) (4,883) (51) (6,755) –  agriculture, forestry and fishing 5,437 1,314 282 — 7,033 (14) (34) (46) — (94) –  mining and quarrying 6,811 463 318 — 7,592 (6) (7) (32) — (45) –  manufacturing 70,987 10,250 1,466 21 82,724 (83) (172) (618) (20) (893) –  electricity, gas, steam and air- conditioning supply 15,277 971 209 — 16,457 (14) (23) (85) — (122) –  water supply, sewerage, waste management and remediation 2,530 388 43 — 2,961 (4) (4) (16) — (24) –  real estate and construction 63,794 17,320 8,887 62 90,063 (90) (666) (1,811) (31) (2,598) –  of which: commercial real estate 49,994 14,720 7,558 61 72,333 (67) (604) (1,355) (29) (2,055) –  wholesale and retail trade, repair of motor vehicles and motorcycles 66,977 8,125 2,725 3 77,830 (67) (117) (1,188) — (1,372) –  transportation and storage 18,589 3,637 417 — 22,643 (15) (74) (232) — (321) –  accommodation and food 11,406 1,718 1,610 — 14,734 (30) (55) (214) — (299) –  publishing, audiovisual and broadcasting 18,181 1,416 229 — 19,826 (42) (55) (61) — (158) –  professional, scientific and technical activities 23,044 2,436 644 4 26,128 (29) (49) (188) — (266) –  administrative and support services 17,671 1,707 739 — 20,117 (26) (40) (254) — (320) –  public administration and defence, compulsory social security 64 — — — 64 — — — — — –  education 1,361 192 43 — 1,596 (4) (7) (16) — (27) –  health and care 3,357 489 184 — 4,030 (8) (18) (25) — (51) –  arts, entertainment and recreation 1,817 171 78 — 2,066 (5) (4) (26) — (35) –  other services 6,470 491 327 — 7,288 (24) (20) (66) — (110) –  activities of households 582 7 — — 589 — — — — — –  extra-territorial organisations and bodies activities 118 — — — 118 — — — — — –  government 6,495 123 175 — 6,793 (2) — (5) — (7) –  asset-backed securities 19 13 — — 32 — (13) — — (13) Non-bank financial institutions 79,687 2,098 679 — 82,464 (45) (30) (361) — (436) Loans and advances to banks 101,852 198 2 — 102,052 (9) (2) (2) — (13) At 31 Dec 2024 522,526 53,527 19,057 90 595,200 (517) (1,390) (5,246) (51) (7,204) By legal entity HSBC UK Bank plc 81,630 12,772 3,356 — 97,758 (197) (403) (603) — (1,203) HSBC Bank plc 85,022 5,843 2,305 47 93,217 (54) (111) (752) (22) (939) The Hongkong and Shanghai Banking Corporation Limited 279,535 27,078 11,483 39 318,135 (170) (677) (2,999) (28) (3,874) HSBC Bank Middle East Limited 26,359 951 848 4 28,162 (20) (6) (463) (1) (490) HSBC North America Holdings Inc. 30,107 4,665 503 — 35,275 (31) (141) (121) — (293) Grupo Financiero HSBC, S.A. de C.V. 11,957 1,703 230 — 13,890 (35) (48) (128) — (211) Other trading entities 7,840 515 332 — 8,687 (10) (4) (180) — (194) Holding companies, shared service centres and intra-Group eliminations 76 — — — 76 — — — — — At 31 Dec 2024 522,526 53,527 19,057 90 595,200 (517) (1,390) (5,246) (51) (7,204) Total wholesale lending for loan and other credit-related commitments and financial guarantees to banks and customers by stage distribution 1 Nominal amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m Corporate and commercial 265,811 15,936 750 4 282,501 (121) (105) (95) — (321) Financial 147,810 3,978 2 — 151,790 (13) (4) — — (17) At 31 Dec 2025 413,621 19,914 752 4 434,291 (134) (109) (95) — (338) By legal entity HSBC UK Bank plc 49,287 2,566 278 — 52,131 (30) (17) (42) — (89) HSBC Bank plc 183,897 5,118 188 4 189,207 (30) (23) (17) — (70) The Hongkong and Shanghai Banking Corporation Limited 70,937 4,425 41 — 75,403 (44) (29) (6) — (79) HSBC Bank Middle East Limited 9,294 417 29 — 9,740 (3) (2) (11) — (16) HSBC North America Holdings Inc. 95,560 7,259 179 — 102,998 (25) (37) (18) — (80) Grupo Financiero HSBC, S.A. de C.V. 2,585 41 — — 2,626 (2) — — — (2) Other trading entities 2,061 88 37 — 2,186 — (1) (1) — (2) At 31 Dec 2025 413,621 19,914 752 4 434,291 (134) (109) (95) — (338) 1 Included in loan and other credit-related commitments and financial guarantees is $ 75.4 bn relating to unsettled reverse repurchase agreements, which once drawn are classified as ‘Reverse repurchase agreements – non-trading’. HSBC Holdings plc Annual Report on Form 20-F 171 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Total wholesale lending for loan and other credit-related commitments and financial guarantees by stage distribution 1 (continued) Nominal amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m Corporate and commercial 241,249 18,685 1,033 3 260,970 (118) (121) (98) — (337) Financial 118,430 2,196 87 — 120,713 (10) (5) (3) — (18) At 31 Dec 2024 359,679 20,881 1,120 3 381,683 (128) (126) (101) — (355) By legal entity HSBC UK Bank plc 37,848 4,540 445 — 42,833 (27) (36) (57) — (120) HSBC Bank plc 144,941 6,118 256 3 151,318 (21) (30) (21) — (72) The Hongkong and Shanghai Banking Corporation Limited 72,860 3,973 99 — 76,932 (54) (32) (6) — (92) HSBC Bank Middle East Limited 8,879 329 35 — 9,243 (5) (1) (10) — (16) HSBC North America Holdings Inc. 91,314 5,723 226 — 97,263 (20) (26) (5) — (51) Grupo Financiero HSBC, S.A. de C.V. 2,334 53 — — 2,387 (1) (1) — — (2) Other trading entities 1,503 145 59 — 1,707 — — (2) — (2) At 31 Dec 2024 359,679 20,881 1,120 3 381,683 (128) (126) (101) — (355) 1 Included in loan and other credit-related commitments and financial guarantees is $49bn relating to unsettled reverse repurchase agreements, which once drawn are classified as ‘Reverse repurchase agreements – non-trading’. Wholesale lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2025 833,036 ( 645 ) 74,288 ( 1,516 ) 20,177 ( 5,347 ) 93 ( 51 ) 927,594 ( 7,559 ) Transfers of financial instruments: ( 35,399 ) ( 267 ) 27,793 859 7,606 ( 592 ) — — — — – transfers from stage 1 to stage 2 ( 93,205 ) 143 93,205 ( 143 ) — — — — — — – transfers from stage 2 to stage 1 58,517 ( 372 ) ( 58,517 ) 372 — — — — — — –  transfers to stage 3 ( 1,210 ) 4 ( 7,605 ) 678 8,815 ( 682 ) — — — — –  transfers from stage 3 499 ( 42 ) 710 ( 48 ) ( 1,209 ) 90 — — — — Net remeasurement of ECL arising from transfer of stage — 253 — ( 226 ) — ( 49 ) — — — ( 22 ) Net new and further lending/ repayments 66,354 ( 171 ) ( 27,221 ) 304 ( 5,593 ) 690 238 2 33,778 825 Change to risk parameters – credit quality — 181 — ( 826 ) — ( 2,596 ) — ( 24 ) — ( 3,265 ) Changes to models used for ECL calculation — ( 30 ) — 277 — — — — — 247 Assets written off — — — — ( 1,928 ) 1,928 — — ( 1,928 ) 1,928 Credit-related modifications that resulted in derecognition — — — — ( 88 ) 9 — — ( 88 ) 9 Foreign exchange and others 1 29,369 7 2,197 ( 66 ) 1,023 ( 341 ) 6 ( 3 ) 32,595 ( 403 ) At 31 Dec 2025 893,360 ( 672 ) 77,057 ( 1,194 ) 21,197 ( 6,298 ) 337 ( 76 ) 991,951 ( 8,240 ) ECL income statement change for the period 233 ( 471 ) ( 1,955 ) ( 22 ) ( 2,215 ) Recoveries 77 Others ( 267 ) Total ECL income statement change for the period ( 2,405 ) 1 Total includes $ 3.3 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale during the year, and a corresponding allowance for ECL of $ 11 m , reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . During the year, there was a net transfer between stage 1 and stage 2 of $ 34,688 m gross carrying/nominal amounts. It was primarily driven by our entities in Asia ( $ 31,809 m ) due to credit deterioration and updates to our models used for ECL calculations, in the US ( $ 1,652 m ) and in Mexico ( $ 1,069 m ). Ñ A summary of basis of preparation is available on page 158 . HSBC Holdings plc Annual Report on Form 20-F 172 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Wholesale lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees (continued) (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 845,982 ( 698 ) 102,129 ( 1,668 ) 16,939 ( 6,207 ) 85 ( 30 ) 965,135 ( 8,603 ) Transfers of financial instruments: ( 17,606 ) ( 214 ) 6,997 825 10,609 ( 611 ) — — — — –  transfers from stage 1 to stage 2 ( 70,991 ) 173 70,991 ( 173 ) — — — — — — –  transfers from stage 2 to stage 1 55,182 ( 380 ) ( 55,182 ) 380 — — — — — — –  transfers to stage 3 ( 2,056 ) 7 ( 9,515 ) 636 11,571 ( 643 ) — — — — –  transfers from stage 3 259 ( 14 ) 703 ( 18 ) ( 962 ) 32 — — — — Net remeasurement of ECL arising from transfer of stage — 214 — ( 226 ) — ( 12 ) — — — ( 24 ) Net new and further lending/ repayments 58,044 ( 151 ) ( 29,842 ) 311 ( 4,450 ) 1,219 7 ( 7 ) 23,759 1,372 Changes to risk parameters – credit quality — 112 — ( 899 ) — ( 2,508 ) — ( 11 ) — ( 3,306 ) Changes to models used for ECL calculation — 39 — 105 — — — — — 144 Assets written off — — — — ( 2,925 ) 2,925 — — ( 2,925 ) 2,925 Credit-related modifications that resulted in derecognition — — — — — — — — — — Foreign exchange and others 1,2,3 ( 53,384 ) 53 ( 4,996 ) 36 4 ( 153 ) 1 ( 3 ) ( 58,375 ) ( 67 ) At 31 Dec 2024 833,036 ( 645 ) 74,288 ( 1,516 ) 20,177 ( 5,347 ) 93 ( 51 ) 927,594 ( 7,559 ) ECL income statement change for the period 214 ( 709 ) ( 1,301 ) ( 18 ) ( 1,814 ) Recoveries 40 Others ( 126 ) Total ECL income statement change for the period ( 1,900 ) 1 Total includes $ 2.9 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale during the year, and a corresponding allowance for ECL of $ 23 m , reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . 2 Total includes $ 28.9 b n of nominal amount and $ 20 m of corresponding allowance for ECL related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. 3 Total includes $ 0.3 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our business in Argentina during 2024. Wholesale lending – distribution of financial instruments to which the impairment requirements of IFRS 9 are applied by credit quality Gross carrying amount Allowance for ECL Net Strong Good Satisfactory Sub- standard Credit impaired Total $m $m $m $m $m $m $m $m By legal entity HSBC UK Bank plc 22,638 39,864 41,093 5,612 3,430 112,637 (1,258) 111,379 HSBC Bank plc 48,153 23,369 28,238 3,997 1,814 105,571 (804) 104,767 The Hongkong and Shanghai Banking Corporation Limited 163,599 80,183 67,919 5,495 12,914 330,110 (4,386) 325,724 HSBC Bank Middle East Limited 17,724 3,587 6,195 308 1,247 29,061 (685) 28,376 HSBC North America Holdings Inc. 6,966 11,025 11,727 2,449 517 32,684 (287) 32,397 Grupo Financiero HSBC, S.A. de C.V. 1,764 5,833 6,090 638 378 14,703 (286) 14,417 Other trading entities 2,047 1,078 4,502 264 285 8,176 (196) 7,980 Holding companies, shared service centres and intra-Group eliminations 90 — — — — 90 — 90 At 31 Dec 2025 262,981 164,939 165,764 18,763 20,585 633,032 (7,902) 625,130 Percentage of total credit quality (%) 41.4 26.1 26.2 3.0 3.3 100.0 By legal entity HSBC UK Bank plc 21,548 30,317 36,450 6,087 3,356 97,758 (1,203) 96,555 HSBC Bank plc 42,189 21,755 24,150 2,771 2,352 93,217 (939) 92,278 The Hongkong and Shanghai Banking Corporation Limited 157,900 69,084 71,651 7,978 11,522 318,135 (3,874) 314,261 HSBC Bank Middle East Limited 15,854 4,263 6,927 266 852 28,162 (490) 27,672 HSBC North America Holdings Inc. 6,095 11,726 13,967 2,984 503 35,275 (293) 34,982 Grupo Financiero HSBC, S.A. de C.V. 1,476 5,523 5,974 687 230 13,890 (211) 13,679 Other trading entities 2,432 1,072 4,563 288 332 8,687 (194) 8,493 Holding companies, shared service centres and intra-Group eliminations 76 — — — — 76 — 76 At 31 Dec 2024 247,570 143,740 163,682 21,061 19,147 595,200 (7,204) 587,996 Percentage of total credit quality (%) 41.6 24.2 27.5 3.5 3.2 100.0 HSBC Holdings plc Annual Report on Form 20-F 173 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Our risk rating system facilitates the internal ratings-based approach under the Basel framework adopted by the Group to support calculation of our minimum credit regulatory capital requirement. The credit quality classifications can be found on page 141 . Wholesale lending – credit risk profile by obligor grade for loans and advances at amortised cost Basel one-year PD range Gross carrying amount Allowance for ECL ECL coverage Mapped external rating Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total % $m $m $m $m $m $m $m $m $m $m % Corporate and commercial 349,763 54,636 19,966 140 424,505 (478) (1,064) (5,909) (75) (7,526) 1.8 –  CRR 1 0.000 to 0.053 32,672 824 — — 33,496 (5) (2) — — (7) — AA- and above –  CRR 2 0.054 to 0.169 79,233 1,058 — — 80,291 (28) (2) — — (30) — A+ to A- –  CRR 3 0.170 to 0.740 122,351 10,621 — — 132,972 (113) (57) — — (170) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 71,923 14,821 — — 86,744 (151) (98) — — (249) 0.3 BB+ to BB- –  CRR 5 1.928 to 4.914 38,615 14,240 — — 52,855 (144) (158) — — (302) 0.6 BB- to B –  CRR 6 4.915 to 8.860 2,479 4,679 — — 7,158 (17) (111) — — (128) 1.8 B- –  CRR 7 8.861 to 15.000 1,733 4,712 — — 6,445 (5) (166) — — (171) 2.7 CCC+ –  CRR 8 15.001 to 99.999 757 3,681 — — 4,438 (15) (470) — — (485) 10.9 CCC to C –  CRR 9/10 100.000 — — 19,966 140 20,106 — — (5,909) (75) (5,984) 29.8 D Non-bank financial institutions 96,974 2,413 478 193 100,058 (56) (19) (293) (1) (369) 0.4 –  CRR 1 0.000 to 0.053 24,948 — — — 24,948 (2) — — — (2) — AA- and above –  CRR 2 0.054 to 0.169 26,457 265 — — 26,722 (8) — — — (8) — A+ to A- –  CRR 3 0.170 to 0.740 25,468 277 — — 25,745 (14) (2) — — (16) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 13,733 747 — — 14,480 (20) (2) — — (22) 0.2 BB+ to BB- –  CRR 5 1.928 to 4.914 6,099 780 — 193 7,072 (9) (9) — (1) (19) 0.3 BB- to B –  CRR 6 4.915 to 8.860 97 194 — — 291 (1) (4) — — (5) 1.7 B- –  CRR 7 8.861 to 15.000 136 128 — — 264 (1) (2) — — (3) 1.1 CCC+ –  CRR 8 15.001 to 99.999 36 22 — — 58 (1) — — — (1) 1.7 CCC to C –  CRR 9/10 100.000 — — 478 — 478 — — (293) — (293) 61.3 D Banks 108,336 132 1 — 108,469 (4) (2) (1) — (7) — –  CRR 1 0.000 to 0.053 86,254 34 — — 86,288 (1) — — — (1) — AA- and above –  CRR 2 0.054 to 0.169 11,172 64 — — 11,236 (1) — — — (1) — A+ to A- –  CRR 3 0.170 to 0.740 6,215 7 — — 6,222 (1) — — — (1) — BBB+ to BBB- –  CRR 4 0.741 to 1.927 2,552 4 — — 2,556 — — — — — — BB+ to BB- –  CRR 5 1.928 to 4.914 2,056 1 — — 2,057 (1) — — — (1) — BB- to B –  CRR 6 4.915 to 8.860 86 20 — — 106 — — — — — — B- –  CRR 7 8.861 to 15.000 1 — — — 1 — — — — — — CCC+ –  CRR 8 15.001 to 99.999 — 2 — — 2 — (2) — — (2) 100.0 CCC to C –  CRR 9/10 100.000 — — 1 — 1 — — (1) — (1) 100.0 D At 31 Dec 2025 555,073 57,181 20,445 333 633,032 (538) (1,085) (6,203) (76) (7,902) 1.2 Corporate and commercial 340,987 51,231 18,376 90 410,684 (463) (1,358) (4,883) (51) (6,755) 1.6 –  CRR 1 0.000 to 0.053 32,564 121 — — 32,685 (3) (5) — — (8) — AA- and above –  CRR 2 0.054 to 0.169 79,350 2,469 — — 81,819 (25) (15) — — (40) — A+ to A- –  CRR 3 0.170 to 0.740 111,229 7,556 — — 118,785 (103) (72) — — (175) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 73,050 12,591 — — 85,641 (144) (99) — — (243) 0.3 BB+ to BB- –  CRR 5 1.928 to 4.914 40,391 12,673 — — 53,064 (158) (159) — — (317) 0.6 BB- to B –  CRR 6 4.915 to 8.860 2,491 7,436 — — 9,927 (16) (190) — — (206) 2.1 B- –  CRR 7 8.861 to 15.000 1,370 3,735 — — 5,105 (7) (172) — — (179) 3.5 CCC+ –  CRR 8 15.001 to 99.999 542 4,650 — — 5,192 (7) (646) — — (653) 12.6 CCC to C –  CRR 9/10 100.000 — — 18,376 90 18,466 — — (4,883) (51) (4,934) 26.7 D Non-bank financial institutions 79,687 2,098 679 — 82,464 (45) (30) (361) — (436) 0.5 –  CRR 1 0.000 to 0.053 19,516 191 — — 19,707 (1) (1) — — (2) — AA- and above –  CRR 2 0.054 to 0.169 20,572 166 — — 20,738 (5) — — — (5) — A+ to A- –  CRR 3 0.170 to 0.740 20,370 330 — — 20,700 (12) (3) — — (15) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 12,987 502 — — 13,489 (16) (2) — — (18) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 6,058 390 — — 6,448 (11) (6) — — (17) 0.3 BB- to B –  CRR 6 4.915 to 8.860 48 319 — — 367 — (8) — — (8) 2.2 B- –  CRR 7 8.861 to 15.000 63 79 — — 142 — (1) — — (1) 0.7 CCC+ –  CRR 8 15.001 to 99.999 73 121 — — 194 — (9) — — (9) 4.6 CCC to C –  CRR 9/10 100.000 — — 679 — 679 — — (361) — (361) 53.2 D Banks 101,852 198 2 — 102,052 (9) (2) (2) — (13) — –  CRR 1 0.000 to 0.053 79,213 53 — — 79,266 (3) — — — (3) — AA- and above –  CRR 2 0.054 to 0.169 13,315 40 — — 13,355 (2) — — — (2) — A+ to A- –  CRR 3 0.170 to 0.740 4,226 29 — — 4,255 (2) — — — (2) — BBB+ to BBB- –  CRR 4 0.741 to 1.927 3,275 12 — — 3,287 (1) — — — (1) — BB+ to BB- –  CRR 5 1.928 to 4.914 1,706 47 — — 1,753 (1) (1) — — (2) 0.1 BB- to B –  CRR 6 4.915 to 8.860 10 1 — — 11 — — — — — — B- –  CRR 7 8.861 to 15.000 107 13 — — 120 — — — — — — CCC+ –  CRR 8 15.001 to 99.999 — 3 — — 3 — (1) — — (1) 33.3 CCC to C –  CRR 9/10 100.000 — — 2 — 2 — — (2) — (2) 100.0 D At 31 Dec 2024 522,526 53,527 19,057 90 595,200 (517) (1,390) (5,246) (51) (7,204) 1.2 HSBC Holdings plc Annual Report on Form 20-F 174 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Wholesale lending – credit risk profile by obligor grade for loan and other credit-related commitments and financial guarantees Nominal amount Allowance for ECL Basel one-year PD range Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total ECL coverage Mapped external rating % $m $m $m $m $m $m $m $m $m $m % Loan and other credit- related commitments 399,154 18,543 560 4 418,261 (127) (92) (69) — (288) 0.1 –  CRR 1 0.000 to 0.053 109,371 2,013 — — 111,384 (4) — — — (4) — AA- and above –  CRR 2 0.054 to 0.169 99,018 1,578 — — 100,596 (12) (3) — — (15) — A+ to A- –  CRR 3 0.170 to 0.740 110,555 2,651 — — 113,206 (33) (11) — — (44) — BBB+ to BBB- –  CRR 4 0.741 to 1.927 47,586 4,197 — — 51,783 (30) (15) — — (45) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 27,073 3,858 — — 30,931 (25) (12) — — (37) 0.1 BB- to B –  CRR 6 4.915 to 8.860 1,747 1,754 — — 3,501 (4) (13) — — (17) 0.5 B- –  CRR 7 8.861 to 15.000 2,757 847 — — 3,604 (7) (9) — — (16) 0.4 CCC+ –  CRR 8 15.001 to 99.999 1,047 1,645 — — 2,692 (12) (29) — — (41) 1.5 CCC to C –  CRR 9/10 100.000 — — 560 4 564 — — (69) — (69) 12.2 D Financial guarantees 14,467 1,371 192 — 16,030 (7) (17) (26) — (50) 0.3 –  CRR 1 0.000 to 0.053 2,151 — — — 2,151 — — — — — — AA- and above –  CRR 2 0.054 to 0.169 3,897 6 — — 3,903 (2) — — — (2) 0.1 A+ to A- –  CRR 3 0.170 to 0.740 3,995 105 — — 4,100 (3) — — — (3) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 2,888 139 — — 3,027 (1) (1) — — (2) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 1,445 654 — — 2,099 (1) (4) — — (5) 0.2 BB- to B –  CRR 6 4.915 to 8.860 64 259 — — 323 — (3) — — (3) 0.9 B- –  CRR 7 8.861 to 15.000 17 73 — — 90 — (5) — — (5) 5.6 CCC+ –  CRR 8 15.001 to 99.999 10 135 — — 145 — (4) — — (4) 2.8 CCC to C –  CRR 9/10 100.000 — — 192 — 192 — — (26) — (26) 13.5 D At 31 Dec 2025 413,621 19,914 752 4 434,291 (134) (109) (95) — (338) 0.1 Loan and other credit-related commitments 345,742 19,495 872 3 366,112 (120) (121) (85) — (326) 0.1 –  CRR 1 0.000 to 0.053 92,090 89 — — 92,179 (3) — — — (3) — AA- and above –  CRR 2 0.054 to 0.169 92,967 1,009 — — 93,976 (12) (2) — — (14) — A+ to A- –  CRR 3 0.170 to 0.740 97,876 5,051 — — 102,927 (38) (15) — — (53) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 40,135 4,349 — — 44,484 (28) (22) — — (50) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 18,581 3,976 — — 22,557 (26) (22) — — (48) 0.2 BB- to B –  CRR 6 4.915 to 8.860 1,828 2,297 — — 4,125 (4) (22) — — (26) 0.6 B- –  CRR 7 8.861 to 15.000 1,378 678 — — 2,056 (1) (12) — — (13) 0.6 CCC+ –  CRR 8 15.001 to 99.999 887 2,046 — — 2,933 (8) (26) — — (34) 1.2 CCC to C –  CRR 9/10 100.000 — — 872 3 875 — — (85) — (85) 9.7 D Financial guarantees 13,937 1,386 248 — 15,571 (8) (5) (16) — (29) 0.2 –  CRR 1 0.000 to 0.053 1,895 1 — — 1,896 — — — — — — AA- and above –  CRR 2 0.054 to 0.169 4,326 12 — — 4,338 (1) — — — (1) — A+ to A- –  CRR 3 0.170 to 0.740 4,137 71 — — 4,208 (2) — — — (2) — BBB+ to BBB- –  CRR 4 0.741 to 1.927 2,106 286 — — 2,392 (3) — — — (3) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 1,295 478 — — 1,773 (2) (1) — — (3) 0.2 BB- to B –  CRR 6 4.915 to 8.860 162 232 — — 394 — (1) — — (1) 0.3 B- –  CRR 7 8.861 to 15.000 5 128 — — 133 — (2) — — (2) 1.5 CCC+ –  CRR 8 15.001 to 99.999 11 178 — — 189 — (1) — — (1) 0.5 CCC to C –  CRR 9/10 100.000 — — 248 — 248 — — (16) — (16) 6.5 D At 31 Dec 2024 359,679 20,881 1,120 3 381,683 (128) (126) (101) — (355) 0.1 Commercial real estate CRE lending includes the financing of corporate, institutional and high net worth customers who are investing primarily in income-producing assets and, to a lesser extent, in their construction and development. The portfolio has larger concentrations in Hong Kong, the UK and mainland China. Our global exposure is centred largely on cities with economic, political or cultural significance. In more developed markets, our exposure mainly comprises the financing of investment assets, the redevelopment of existing stock and the augmentation of both commercial and residential markets to support economic and population growth. In less developed CRE markets, our exposures comprise lending for development assets on relatively short tenors with a particular focus on supporting larger, better-capitalised developers involved in residential construction or assets supporting economic expansion. Excluding adverse foreign exchange movements of $2.0bn, CRE lending decreased by $5.0bn, mainly from $5.3bn in our entities in Asia due to loan repayments and write-offs. HSBC Holdings plc Annual Report on Form 20-F 175 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Commercial real estate lending to customers of which: HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total UK Hong Kong $m $m $m $m $m $m $m $m $m $m Gross loans and advances Stage 1 14,864 3,482 21,777 1,071 237 406 56 41,893 15,654 11,007 Stage 2 1,956 151 15,245 59 678 94 — 18,183 1,956 13,927 Stage 3 355 390 8,052 89 238 25 26 9,175 355 7,568 POCI — 57 30 — — — — 87 58 25 At 31 Dec 2025 17,175 4,080 45,104 1,219 1,153 525 82 69,338 18,023 32,527 –  of which: forborne loans 410 65 3,477 89 314 73 26 4,454 468 2,941 Allowance for ECL (199) (124) (2,150) (26) (77) (10) (24) (2,610) (230) (1,876) Gross loans and advances Stage 1 9,394 3,285 34,337 1,136 1,420 380 42 49,994 9,758 22,643 Stage 2 4,052 313 9,103 — 1,184 67 1 14,720 4,112 7,619 Stage 3 492 213 6,451 117 240 22 23 7,558 492 5,967 POCI — 43 18 — — — — 61 43 18 At 31 Dec 2024 13,938 3,854 49,909 1,253 2,844 469 66 72,333 14,405 36,247 –  of which: forborne loans 502 54 3,087 116 273 19 23 4,074 545 2,729 Allowance for ECL (203) (72) (1,627) (23) (103) (8) (19) (2,055) (227) (1,418) Commercial real estate gross loans and advances to customers by credit quality of which: HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total UK Hong Kong $m $m $m $m $m $m $m $m $m $m Strong 4,102 1,055 7,818 327 — 8 56 13,366 4,342 3,501 Good 7,636 1,195 13,998 473 — 127 — 23,429 7,773 8,438 Satisfactory 4,482 1,289 12,330 307 559 326 — 19,293 4,895 10,481 Sub-standard 600 94 2,876 23 356 39 — 3,988 600 2,514 Credit impaired 355 447 8,082 89 238 25 26 9,262 413 7,593 At 31 Dec 2025 17,175 4,080 45,104 1,219 1,153 525 82 69,338 18,023 32,527 Strong 4,663 739 9,106 137 — 18 42 14,705 4,875 4,522 Good 2,098 1,430 16,113 407 566 111 — 20,725 2,107 10,421 Satisfactory 5,770 1,312 13,556 592 1,423 283 — 22,936 5,948 10,850 Sub-standard 915 117 4,665 — 615 35 1 6,348 940 4,469 Credit impaired 492 256 6,469 117 240 22 23 7,619 535 5,985 At 31 Dec 2024 13,938 3,854 49,909 1,253 2,844 469 66 72,333 14,405 36,247 Commercial real estate lending to customers - Hong Kong excluding exposure to mainland China borrowers At 31 Dec 2025 At 31 Dec 2024 Total of which: Hang Seng Bank Total of which: Hang Seng Bank $m $m $m $m Gross loans and advances By stage Stage 1 10,666 5,079 22,132 10,465 Stage 2 13,652 6,416 6,515 3,791 Stage 3 6,306 3,467 4,554 2,550 POCI — — — — By credit quality Strong 3,314 1,662 4,484 2,596 Good 8,225 3,449 9,754 4,367 Satisfactory 10,352 4,637 10,716 5,135 Sub-standard 2,427 1,747 3,693 2,158 Credit impaired 6,306 3,467 4,554 2,550 Total 30,624 14,962 33,201 16,806 Allowance for ECL (1,077) (652) (405) (213) HSBC Holdings plc Annual Report on Form 20-F 176 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk The Hong Kong CRE portfolio (excluding exposure to mainland China borrowers) saw an increase in allowances for ECL in 2025, driven by a combination of negative credit migration and pressure on collateral values. Negative credit migration was mainly driven by the secured portfolio, which accounts for 57% of the total portfolio (31 December 2024: 54%), although the pace of migration slowed in the fourth quarter. ‘Sub-standard’ and ‘credit-impaired’ exposures increased to $8.7bn (31 December 2024: $8.2bn), of which 95% was secured (31 December 2024: 92%). As at 31 December 2025, the weighted average loan to value (‘LTV’): – of performing exposures rated ‘sub-standard’ was 42% (31 December 2024: 46%). There was immaterial exposure with an LTV of greater than 70% (31 December 2024: $0.1bn); and – of ‘credit impaired’ exposures was 71% (31 December 2024: 58%). Within this portfolio, $1.9bn had an LTV of greater than 70% (31 December 2024: $1.2bn). Within which, for Hang Seng Bank, the weighted average LTV: – of performing exposures rated ‘sub-standard’ was 42% (31 December 2024: 49%). There was nil exposure with an LTV of greater than 70% (31 December 2024: $0.1bn); and – of ‘credit-impaired’ exposures was 74% (31 December 2024: 60%). Within this portfolio, $1.1bn had an LTV of greater than 70% (31 December 2024: $0.7bn). Collateral information and LTV calculations were based on total limits, inclusive of off-balance sheet commitments of $42.8bn as of 31 December 2025 (31 December 2024: $49.2bn). The unsecured portfolio remains largely stable, with some migration between performing credit grades and 89% rated ‘strong’ or ‘good’ (31 December 2024: 91%). ‘Credit impaired’ levels are limited. Unsecured exposures are typically granted to strong, listed Hong Kong CRE developers, which are commonly members of conglomerate groups with diverse cash flows. Market conditions remain challenging, with valuation pressures and liquidity constraints likely to continue in the near term, particularly for mid-sized and sub-investment grade corporates. The recent improvement in sentiment is nevertheless expected to gradually translate into improved cash flows and liquidity, with signs of a recovery beginning to emerge. In particular, the residential property sector showed positive momentum in 2025 driven by government support measures and lower interest rates. This, together with the associated positive wealth effect from a buoyant equities market, has supported a rebound in retail sales and improved leasing activity in the second half of 2025. However, a full recovery in the retail property sector will take time as landlords adapt to changing consumer behaviours, while oversupply in the office property sector is expected to keep pressure on rents and capital values in 2026. The broader Hong Kong economy nevertheless remains resilient, providing a supportive backdrop for stabilisation in the property market. We continue to closely assess and manage the risk in the portfolio, including through portfolio reviews and stress testing. Vulnerable borrowers, including those with debt serviceability challenges and higher LTV levels, are subject to heightened monitoring and management. Refinance risk in commercial real estate CRE lending tends to require the repayment of a significant proportion of the principal at maturity. Typically, a customer will arrange repayment through the acquisition of a new loan to settle the existing debt. Refinance risk is the risk that a customer, being unable to repay the debt on maturity, fails to refinance it at commercial terms. We monitor our CRE portfolio closely, assessing indicators for signs of potential issues with refinancing. Maturity analysis commercial real estate gross loans and advances to customers of which: HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total UK Hong Kong $m $m $m $m $m $m $m $m $m $m < 1 year 3,892 1,213 18,961 435 335 209 36 25,081 4,438 14,667 1–2 years 3,800 822 11,251 78 442 74 20 16,487 4,090 7,939 2–5 years 8,776 1,575 12,735 518 373 183 25 24,185 8,784 8,475 > 5 years 707 470 2,157 188 3 59 1 3,585 711 1,446 At 31 Dec 2025 17,175 4,080 45,104 1,219 1,153 525 82 69,338 18,023 32,527 < 1 year 3,488 846 22,244 455 1,084 111 20 28,248 3,826 18,204 1–2 years 3,303 876 11,213 162 603 142 6 16,305 3,373 7,196 2–5 years 6,634 1,600 14,079 447 1,145 143 40 24,088 6,685 9,254 > 5 years 513 532 2,373 189 12 73 — 3,692 521 1,593 At 31 Dec 2024 13,938 3,854 49,909 1,253 2,844 469 66 72,333 14,405 36,247 HSBC Holdings plc Annual Report on Form 20-F 177 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk The following table presents the Group’s exposure to borrowers classified in the CRE sector where the ultimate parent is based in mainland China, as well as all CRE exposures booked on mainland China balance sheets. In addition to CRE as defined in our primary CRE disclosure above, this table includes financing provided to a corporate or financial entity for the purchase or financing of a property which supports the overall operations of the business. This provides a more comprehensive view of our mainland China CRE exposures. The exposures at 31 December 2025 are split by country/territory and credit quality including allowances for ECL by stage. Mainland China commercial real estate (Audited) At 31 Dec 2025 At 31 Dec 2024 Hong Kong Mainland China Rest of the Group Total Hong Kong Mainland China Rest of the Group Total $m $m $m $m $m $m $m $m Loans and advances to customers 1 2,079 3,474 118 5,671 3,161 3,694 303 7,158 Guarantees issued and others 2 105 14 12 131 80 16 5 101 Total mainland China commercial real estate exposure 2,184 3,488 130 5,802 3,241 3,710 308 7,259 Distribution of mainland China commercial real estate exposure by credit quality Strong 293 1,818 64 2,175 118 1,817 109 2,044 Good 240 583 — 823 578 595 1 1,174 Satisfactory 154 511 8 673 196 899 49 1,144 Sub-standard 87 334 57 478 777 136 149 1,062 Credit impaired 1,410 242 1 1,653 1,572 263 — 1,835 Total 2,184 3,488 130 5,802 3,241 3,710 308 7,259 Allowance for ECL by credit quality Strong — ( 2 ) — ( 2 ) — ( 4 ) — ( 4 ) Good — ( 4 ) — ( 4 ) — ( 3 ) — ( 3 ) Satisfactory — ( 5 ) — ( 5 ) — ( 13 ) — ( 13 ) Sub-standard ( 9 ) ( 99 ) ( 1 ) ( 109 ) ( 261 ) ( 30 ) ( 17 ) ( 308 ) Credit impaired ( 799 ) ( 99 ) — ( 898 ) ( 749 ) ( 81 ) — ( 830 ) Total ( 808 ) ( 209 ) ( 1 ) ( 1,018 ) ( 1,010 ) ( 131 ) ( 17 ) ( 1,158 ) Allowance for ECL by stage distribution Stage 1 — ( 4 ) — ( 4 ) — ( 9 ) — ( 9 ) Stage 2 ( 9 ) ( 106 ) ( 1 ) ( 116 ) ( 261 ) ( 41 ) ( 17 ) ( 319 ) Stage 3 ( 783 ) ( 99 ) — ( 882 ) ( 743 ) ( 81 ) — ( 824 ) POCI ( 16 ) — — ( 16 ) ( 6 ) — — ( 6 ) Total ( 808 ) ( 209 ) ( 1 ) ( 1,018 ) ( 1,010 ) ( 131 ) ( 17 ) ( 1,158 ) ECL coverage % 37.0 6.0 0.8 17.6 31.2 3.5 5.5 16.0 1 Amounts represent gross carrying amount. 2 Amounts represent nominal amount for guarantees and other contingent liabilities. (Unaudited) We continue to closely monitor the mainland China CRE market. The portfolio of loans booked in Hong Kong continues to be impacted by the challenges in this sector, with further migration seen in the fourth quarter of 2025. This portfolio nevertheless continues to reduce due to repayments and write-offs, driving an overall reduction in allowances for ECL to $1.0bn as of 31 December 2025 (31 December 2024: $1.2bn), mainly held against unsecured exposures. Of the residual portfolio of mainland China CRE loans booked in Hong Kong, the large majority of performing exposure is lending to state- owned enterprises and relatively strong privately-owned enterprises. This is reflected in the relatively low allowances for ECL in this part of the portfolio. The onshore portfolio booked in mainland China remains of higher credit quality, with lower ECL allowances reflecting collateral held. The portfolio continues to rebalance in favour of strong-rated borrowers. Market fundamentals in the mainland China property sector remain weak. Despite some stabilisation in certain cities, property values continued to decline in 2025 and are expected to remain under pressure in 2026 reflecting ongoing weakness in demand. Liquidity constraints are therefore likely to continue, with ongoing polarisation in the operating performance of corporates operating in this sector, as state-owned enterprises continue to benefit from better access to funding and liquidity. A full recovery remains dependent on further government support as well as a sustained improvement in underlying sentiment . The Group has additional exposures to mainland China CRE as a result of lending to multinational corporates booked outside of mainland China, which is not incorporated in the table above. Other credit risk exposures In addition to collateralised lending, other credit enhancements are employed and methods used to mitigate credit risk arising from financial assets. These are summarised below: – Some securities issued by governments, banks and other financial institutions benefit from additional credit enhancements provided by government guarantees that cover the assets. – Debt securities issued by banks and financial institutions include asset-backed securities (‘ABSs’) and similar instruments, which are supported by underlying pools of financial assets. Credit risk associated with ABSs is reduced through the purchase of credit default swap (‘CDS’) protection. – Trading loans and advances mainly consist of reverse repos and stock borrowing, which are by their nature collateralised. – Cash collateral is posted to satisfy margin requirements. There is limited credit risk on cash collateral posted since in the event of default of the counterparty this would be set off against the related liability. Ñ Collateral accepted as security that the Group is permitted to sell or repledge under these arrangements is described on page 344 of the financial statements. The Group’s maximum exposure to credit risk includes financial guarantees and similar contracts granted, as well as loan and other credit-related commitments. Depending on the terms of the arrangement, we may use additional credit mitigation if a guarantee is called upon or a loan commitment is drawn and subsequently defaults. Ñ For further information on these arrangements, see Note 33 on the financial statements. HSBC Holdings plc Annual Report on Form 20-F 178 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Derivatives We participate in transactions exposing us to counterparty credit risk. Counterparty credit risk is the risk of financial loss if the counterparty to a transaction defaults before satisfactorily settling it. It arises principally from over-the-counter (‘OTC’) derivatives and securities financing transactions and is calculated in both the trading and non-trading books. Transactions vary in value by reference to a market factor such as an interest rate, exchange rate or asset price. The counterparty risk from derivative transactions is taken into account when reporting the fair value of derivative positions. The adjustment to the fair value is known as the credit valuation adjustment (‘CVA’). The following table reflects the fair values and gross notional contract amounts of derivatives cleared through an exchange, central counterparty or non-central counterparty. Notional contract amounts and fair values of derivatives 2025 2024 Notional amount Fair value Notional amount Fair value Assets Liabilities Assets Liabilities $m $m $m $m $m $m Total OTC derivatives 31,083,167 324,708 325,401 29,273,397 368,938 367,759 –  total OTC derivatives cleared by central counterparties 13,448,210 98,779 99,109 13,484,581 111,974 113,091 –  total OTC derivatives not cleared by central counterparties 17,634,957 225,929 226,292 15,788,816 256,964 254,668 Total exchange traded derivatives 1,625,677 10,275 9,696 1,267,685 12,445 9,435 Gross 32,708,844 334,983 335,097 30,541,082 381,383 377,194 Offset (97,243) (97,243) (112,746) (112,746) At 31 Dec 237,740 237,854 268,637 264,448 Ñ The purposes for which HSBC uses derivatives are described in Note 15 on the financial statements. The International Swaps and Derivatives Association (‘ISDA’) master agreement is our preferred agreement for documenting derivatives activity. It is common, and our preferred practice, for the parties involved in a derivative transaction to execute a credit support annex (‘CSA’) in conjunction with the ISDA master agreement. Under a CSA, collateral is passed between the parties to mitigate the counterparty risk inherent in outstanding positions. The majority of our CSAs are with financial institutional clients. We manage the counterparty exposure on our OTC derivative contracts by using collateral agreements with counterparties and netting agreements. Currently, we do not actively manage our general OTC derivative counterparty exposure in the credit markets, although we may manage individual exposures in certain circumstances. We place strict policy restrictions on collateral types and as a consequence the types of collateral received and pledged are, by value, highly liquid and of a strong quality, being predominantly cash. Where a collateral type is required to be approved outside the collateral policy, approval is required from a committee of senior representatives from Markets, Legal and Risk. Ñ See Note 31 on the financial stat ements for details regarding legally enforceable right of offset in the event of counterparty default and collateral received in respect of derivatives. HSBC Holdings plc Annual Report on Form 20-F 179 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Personal lending Total personal lending for loans and advances to customers at amortised cost by stage distribution At 31 Dec 2025 At 31 Dec 2024 Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m By portfolio First lien residential mortgages 365,498 18,148 2,655 386,301 (58) (109) (313) (480) 324,703 34,177 2,450 361,330 (59) (130) (284) (473) Credit cards 22,781 3,260 373 26,414 (339) (731) (231) (1,301) 21,611 2,991 313 24,915 (268) (660) (199) (1,127) Other personal lending 58,417 2,479 917 61,813 (270) (395) (351) (1,016) 57,432 2,751 797 60,980 (243) (368) (313) (924) –  other personal lending which is secured 1 39,906 517 270 40,693 (24) (19) (65) (108) 39,234 887 199 40,320 (29) (23) (34) (86) –  other personal lending which is unsecured 18,511 1,962 647 21,120 (246) (376) (286) (908) 18,198 1,864 598 20,660 (214) (345) (279) (838) Total 446,696 23,887 3,945 474,528 (667) (1,235) (895) (2,797) 403,746 39,919 3,560 447,225 (570) (1,158) (796) (2,524) By legal entity HSBC UK Bank plc 191,726 14,515 1,200 207,441 (201) (315) (256) (772) 152,338 31,325 1,075 184,738 (148) (307) (211) (666) HSBC Bank plc 17,416 1,076 365 18,857 (16) (14) (107) (137) 23,501 1,198 324 25,023 (17) (24) (99) (140) The Hongkong and Shanghai Banking Corporation Limited 201,779 6,407 1,108 209,294 (199) (432) (170) (801) 191,614 5,519 1,170 198,303 (174) (385) (164) (723) HSBC Bank Middle East Limited 4,061 134 47 4,242 (18) (23) (29) (70) 3,678 158 40 3,876 (14) (29) (30) (73) HSBC North America Holdings Inc. 19,607 512 404 20,523 (4) (12) (14) (30) 20,851 497 327 21,675 (4) (12) (11) (27) Grupo Financiero HSBC, S.A. de C.V. 11,705 1,212 817 13,734 (229) (438) (316) (983) 11,016 1,172 620 12,808 (207) (400) (279) (886) Other trading entities 402 31 4 437 — (1) (3) (4) 748 50 4 802 (6) (1) (2) (9) Total 446,696 23,887 3,945 474,528 (667) (1,235) (895) (2,797) 403,746 39,919 3,560 447,225 (570) (1,158) (796) (2,524) 1 ‘Other personal lending which is secured’ has been expanded to encompass second lien mortgages, motor vehicle finance, and guaranteed loans related to residential property, which were previously reported as separate line items. Total personal lending for loan and other credit-related commitments and financial guarantees by stage distribution At 31 Dec 2025 At 31 Dec 2024 Nominal amount Allowance for ECL Nominal amount Allowance for ECL Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m HSBC UK Bank plc 55,615 803 43 56,461 (15) (5) — (20) 51,078 442 47 51,567 (6) — (3) (9) HSBC Bank plc 1,819 28 — 1,847 (1) — — (1) 1,605 7 2 1,614 — — — — The Hongkong and Shanghai Banking Corporation Limited 204,293 1,025 47 205,365 (5) — — (5) 189,737 1,165 35 190,937 (4) — (2) (6) HSBC Bank Middle East Limited 2,542 10 — 2,552 — — — — 2,452 7 — 2,459 — — — — HSBC North America Holdings Inc. 2,172 75 1 2,248 — — — — 3,707 68 2 3,777 — — — — Grupo Financiero HSBC, S.A. de C.V. 4,970 — — 4,970 (2) — — (2) 3,892 — — 3,892 (7) — — (7) Other trading entities 529 4 1 534 — — — — 434 2 — 436 — — — — Total 271,940 1,945 92 273,977 (23) (5) — (28) 252,905 1,691 86 254,682 (17) — (5) (22) HSBC Holdings plc Annual Report on Form 20-F 180 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk The following disclosure provides a reconciliation by stage of the Group’s personal lending gross carrying/nominal amount and allowances for loans and advances to customers, including loan commitments and financial guarantees. In addition, three reconciliations by stage of the Group’s gross carrying/nominal amount and allowances for first lien mortgages, credit cards and other personal lending, including loan commitments and financial guarantees, have been included following the adoption of the recommendations of the DECL Taskforce’s third report in 2023. Personal lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees (Audited) 2025 2024 Non-credit impaired Credit impaired Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m At 1 Jan 656,651 ( 587 ) 41,610 ( 1,158 ) 3,646 ( 801 ) 701,907 ( 2,546 ) 650,823 ( 602 ) 50,955 ( 1,434 ) 3,860 ( 856 ) 705,638 ( 2,892 ) Transfers of financial instruments: 7,203 ( 664 ) ( 9,466 ) 1,242 2,263 ( 578 ) — — ( 2,023 ) ( 1,045 ) ( 345 ) 1,477 2,368 ( 432 ) — — –  transfers from stage 1 to stage 2 ( 41,104 ) 225 41,104 ( 225 ) — — — — ( 45,220 ) 246 45,220 ( 246 ) — — — — –  transfers from stage 2 to stage 1 48,706 ( 861 ) ( 48,706 ) 861 — — — — 43,549 ( 1,247 ) ( 43,549 ) 1,247 — — — — –  transfers to stage 3 ( 663 ) 11 ( 2,655 ) 756 3,318 ( 767 ) — — ( 743 ) 9 ( 2,715 ) 685 3,458 ( 694 ) — — –  transfers from stage 3 264 ( 39 ) 791 ( 150 ) ( 1,055 ) 189 — — 391 ( 53 ) 699 ( 209 ) ( 1,090 ) 262 — — Net remeasurement of ECL arising from transfer of stage — 411 — ( 378 ) — ( 9 ) — 24 — 745 — ( 605 ) — ( 132 ) — 8 Changes due to modifications not derecognised — — — — — — — — — — — — ( 25 ) — ( 25 ) — Net new and further lending/repayments 41,379 ( 7 ) ( 8,622 ) 310 ( 467 ) 78 32,290 381 29,789 ( 17 ) ( 7,889 ) 278 ( 796 ) 470 21,104 731 Change to risk parameters – credit quality — 209 — ( 1,165 ) — ( 1,141 ) — ( 2,097 ) — 251 — ( 874 ) — ( 1,437 ) — ( 2,060 ) Changes to models used for ECL calculation — ( 29 ) — ( 5 ) — ( 16 ) — ( 50 ) — 29 — ( 109 ) — ( 20 ) — ( 100 ) Assets written off — — — — ( 1,641 ) 1,641 ( 1,641 ) 1,641 — — — — ( 1,534 ) 1,534 ( 1,534 ) 1,534 Foreign exchange and others 1,2,3,4 13,403 ( 23 ) 2,310 ( 86 ) 236 ( 69 ) 15,949 ( 178 ) ( 21,938 ) 52 ( 1,111 ) 109 ( 227 ) 72 ( 23,276 ) 233 At 31 Dec 718,636 ( 690 ) 25,832 ( 1,240 ) 4,037 ( 895 ) 748,505 ( 2,825 ) 656,651 ( 587 ) 41,610 ( 1,158 ) 3,646 ( 801 ) 701,907 ( 2,546 ) ECL income statement change for the period 584 ( 1,238 ) ( 1,088 ) ( 1,742 ) 1,008 ( 1,310 ) ( 1,119 ) ( 1,421 ) Recoveries 243 220 Others 19 ( 32 ) Total ECL income statement change for the period ( 1,480 ) ( 1,233 ) 1 At 31 December 2025, total includes $ 2.7 bn (31 December 2024: $ 0.8 b n) of gross carrying loans and advances to customers, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 16 m (31 December 2024: $ 23 m ), reflecting business disposals, as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . 2 This includes $ 7.2 b n of gross carrying loans and advances to customers and corresponding allowance for ECL of $ 7 m in relation to disposal of our retained portfolio of home and other retail loans in France as disclosed in Note 23 on page 355 . 3 At 31 December 2024, total includes $ 6.4 b n of nominal amount and $ 1 m of corresponding allowance for ECL related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. 4 At December 2024, total includes $ 2.4 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our business in Argentina during 2024. HSBC Holdings plc Annual Report on Form 20-F 181 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk During the year, there was a net transfer from stage 2 to stage 1 of $ 7,602 m gross carrying/nominal amounts. This was mainly driven by model recalibration for retail portfolios in HSBC UK ( $ 11,245 m ) where the PD was aligned to the most recent observed performance. This was partly offset by a net transfer from stage 1 to stage 2 in Hong Kong ($ 1,152 m) primarily due to a new mortgage model implementation and in Mexico ($ 1,042 m) within the unsecured lending portfolios. Ñ A summary of basis of preparation is available on page 158 . First lien residential mortgages – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2025 344,676 ( 58 ) 34,341 ( 130 ) 2,474 ( 285 ) 381,491 ( 473 ) Transfers of financial instruments: 10,647 ( 89 ) ( 11,388 ) 82 741 7 — — –  transfers from stage 1 to stage 2 ( 29,872 ) 9 29,872 ( 9 ) — — — — –  transfers from stage 2 to stage 1 40,658 ( 84 ) ( 40,658 ) 84 — — — — –  transfers to stage 3 ( 289 ) — ( 1,146 ) 50 1,435 ( 50 ) — — –  transfers from stage 3 150 ( 14 ) 544 ( 43 ) ( 694 ) 57 — — Net remeasurement of ECL arising from transfer of stage — 52 — ( 31 ) — ( 1 ) — 20 Net new and further lending/repayments 20,746 ( 4 ) ( 6,856 ) 29 ( 657 ) 28 13,233 53 Change to risk parameters – credit quality — 39 — ( 43 ) — ( 104 ) — ( 108 ) Changes to models used for ECL calculation — 5 — ( 4 ) — — — 1 Assets written off — — — — ( 63 ) 63 ( 63 ) 63 Foreign exchange and others 1,2 12,254 ( 5 ) 2,190 ( 11 ) 176 ( 20 ) 14,620 ( 36 ) At 31 Dec 2025 388,323 ( 60 ) 18,287 ( 108 ) 2,671 ( 312 ) 409,281 ( 480 ) ECL income statement change for the period 92 ( 49 ) ( 77 ) ( 34 ) Recoveries 6 Others 4 Total ECL income statement change for the period ( 24 ) 1 Total includes $ 2.3 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 2 m, including business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . 2 This includes $ 0.4 bn of gross carrying loans and advances to customers and corresponding allowance for ECL of $ 1 m in relation to disposal of our retained portfolio of home and other retail loans in France as disclosed in Note 23 on page 355 . First lien residential mortgages – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees (continued) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2024 340,764 ( 109 ) 38,513 ( 202 ) 2,258 ( 264 ) 381,535 ( 575 ) Transfers of financial instruments: ( 3,561 ) ( 232 ) 2,694 232 867 — — — –  transfers from stage 1 to stage 2 ( 33,524 ) 23 33,524 ( 23 ) — — — — –  transfers from stage 2 to stage 1 30,113 ( 244 ) ( 30,113 ) 244 — — — — –  transfers to stage 3 ( 290 ) 6 ( 1,127 ) 90 1,417 ( 96 ) — — –  transfers from stage 3 140 ( 17 ) 410 ( 79 ) ( 550 ) 96 — — Net remeasurement of ECL arising from transfer of stage — 163 — ( 152 ) — ( 30 ) — ( 19 ) Net new and further lending/repayments 14,008 20 ( 6,336 ) 26 ( 523 ) 33 7,149 79 Change to risk parameters – credit quality — 115 — ( 73 ) — ( 103 ) — ( 61 ) Changes to models used for ECL calculation — ( 8 ) — 29 — 1 — 22 Assets written off — — — — ( 63 ) 63 ( 63 ) 63 Foreign exchange and others ( 6,535 ) ( 7 ) ( 530 ) 10 ( 65 ) 15 ( 7,130 ) 18 At 31 Dec 2024 344,676 ( 58 ) 34,341 ( 130 ) 2,474 ( 285 ) 381,491 ( 473 ) ECL income statement change for the period 290 ( 170 ) ( 99 ) 21 Recoveries 7 Others ( 1 ) Total ECL income statement change for the period 27 HSBC Holdings plc Annual Report on Form 20-F 182 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Credit cards – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2025 156,312 ( 280 ) 3,760 ( 658 ) 343 ( 199 ) 160,415 ( 1,137 ) Transfers of financial instruments: ( 2,134 ) ( 381 ) 1,322 742 812 ( 361 ) — — –  transfers from stage 1 to stage 2 ( 7,206 ) 144 7,206 ( 144 ) — — — — –  transfers from stage 2 to stage 1 5,138 ( 518 ) ( 5,138 ) 518 — — — — –  transfers to stage 3 ( 122 ) 3 ( 828 ) 408 950 ( 411 ) — — –  transfers from stage 3 56 ( 10 ) 82 ( 40 ) ( 138 ) 50 — — Net remeasurement of ECL arising from transfer of stage — 255 — ( 246 ) — ( 4 ) — 5 Changes due to modifications not derecognised — — — — — — — — Net new and further lending/repayments 5,503 61 ( 758 ) 108 103 34 4,848 203 Change to risk parameters – credit quality — 39 — ( 640 ) — ( 517 ) — ( 1,118 ) Changes to models used for ECL calculation — ( 34 ) — — — ( 17 ) — ( 51 ) Assets written off — — — — ( 847 ) 847 ( 847 ) 847 Foreign exchange and others 4,118 ( 14 ) 147 ( 43 ) 23 ( 14 ) 4,288 ( 71 ) At 31 Dec 2025 163,799 ( 354 ) 4,471 ( 737 ) 434 ( 231 ) 168,704 ( 1,322 ) ECL income statement change for the period 321 ( 778 ) ( 504 ) ( 961 ) Recoveries 123 Others ( 5 ) Total ECL income statement change for the period ( 843 ) At 1 Jan 2024 153,292 ( 253 ) 6,547 ( 698 ) 450 ( 144 ) 160,289 ( 1,095 ) Transfers of financial instruments: 796 ( 453 ) ( 1,469 ) 717 673 ( 264 ) — — –  transfers from stage 1 to stage 2 ( 6,427 ) 129 6,427 ( 129 ) — — — — –  transfers from stage 2 to stage 1 7,255 ( 569 ) ( 7,255 ) 569 — — — — –  transfers to stage 3 ( 179 ) 2 ( 765 ) 327 944 ( 329 ) — — –  transfers from stage 3 147 ( 15 ) 124 ( 50 ) ( 271 ) 65 — — Net remeasurement of ECL arising from transfer of stage — 280 — ( 256 ) — ( 45 ) — ( 21 ) Changes due to modifications not derecognised — — — — ( 2 ) — ( 2 ) — Net new and further lending/repayments 9,604 18 ( 1,122 ) 127 ( 1 ) 194 8,481 339 Change to risk parameters – credit quality — 79 — ( 476 ) — ( 694 ) — ( 1,091 ) Changes to models used for ECL calculation — 22 — ( 122 ) — 1 — ( 99 ) Assets written off — — — — ( 736 ) 736 ( 736 ) 736 Foreign exchange and others 1 ( 7,380 ) 27 ( 196 ) 50 ( 41 ) 17 ( 7,617 ) 94 At 31 Dec 2024 156,312 ( 280 ) 3,760 ( 658 ) 343 ( 199 ) 160,415 ( 1,137 ) ECL income statement change for the period 399 ( 727 ) ( 544 ) ( 872 ) Recoveries 106 Others ( 10 ) Total ECL income statement change for the period ( 776 ) 1 Total includes $ 4.5 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada and our business in Argentina during 2024. HSBC Holdings plc Annual Report on Form 20-F 183 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Other personal lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2025 155,663 ( 249 ) 3,509 ( 370 ) 829 ( 317 ) 160,001 ( 936 ) Transfers of financial instruments: ( 1,310 ) ( 194 ) 600 418 710 ( 224 ) — — –  transfers from stage 1 to stage 2 ( 4,026 ) 72 4,026 ( 72 ) — — — — –  transfers from stage 2 to stage 1 2,910 ( 259 ) ( 2,910 ) 259 — — — — –  transfers to stage 3 ( 252 ) 8 ( 681 ) 298 933 ( 306 ) — — –  transfers from stage 3 58 ( 15 ) 165 ( 67 ) ( 223 ) 82 — — Net remeasurement of ECL arising from transfer of stage — 104 — ( 101 ) — ( 4 ) — ( 1 ) Changes due to modifications not derecognised — — — — — — — — Net new and further lending/repayments 15,130 ( 64 ) ( 1,008 ) 173 87 16 14,209 125 Change to risk parameters – credit quality — 131 — ( 482 ) — ( 520 ) — ( 871 ) Changes to models used for ECL calculation — — — ( 1 ) — 1 — — Assets written off — — — — ( 731 ) 731 ( 731 ) 731 Foreign exchange and others 1,2 ( 2,969 ) ( 4 ) ( 27 ) ( 32 ) 37 ( 35 ) ( 2,959 ) ( 71 ) At 31 Dec 2025 166,514 ( 276 ) 3,074 ( 395 ) 932 ( 352 ) 170,520 ( 1,023 ) ECL income statement change for the period 171 ( 411 ) ( 507 ) ( 747 ) Recoveries 114 Others 20 Total ECL income statement change for the period ( 613 ) 1 Total includes $ 0.4 bn of gross carrying loans and advances, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 11 m, reflecting business disposals, as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . 2 This includes $ 6.8 bn of gross carrying loans and advances to customers and corresponding allowance for ECL of $ 6 m in relation to disposal of our retained portfolio of home and other retail loans in France as disclosed in Note 23 on page 355 . Other personal lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees (continued) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2024 156,767 ( 240 ) 5,895 ( 534 ) 1,152 ( 448 ) 163,814 ( 1,222 ) Transfers of financial instruments: 742 ( 360 ) ( 1,570 ) 528 828 ( 168 ) — — –  transfers from stage 1 to stage 2 ( 5,269 ) 94 5,269 ( 94 ) — — — — –  transfers from stage 2 to stage 1 6,181 ( 434 ) ( 6,181 ) 434 — — — — –  transfers to stage 3 ( 274 ) 1 ( 823 ) 268 1,097 ( 269 ) — — –  transfers from stage 3 104 ( 21 ) 165 ( 80 ) ( 269 ) 101 — — Net remeasurement of ECL arising from transfer of stage — 302 — ( 197 ) — ( 57 ) — 48 Changes due to modifications not derecognised — — — — ( 23 ) — ( 23 ) — Net new and further lending/repayments 6,177 ( 55 ) ( 431 ) 125 ( 272 ) 243 5,474 313 Change to risk parameters – credit quality — 57 — ( 325 ) — ( 640 ) — ( 908 ) Changes to models used for ECL calculation — 15 — ( 16 ) — ( 22 ) — ( 23 ) Assets written off — — — — ( 735 ) 735 ( 735 ) 735 Foreign exchange and others 1,2 ( 8,023 ) 32 ( 385 ) 49 ( 121 ) 40 ( 8,529 ) 121 At 31 Dec 2024 155,663 ( 249 ) 3,509 ( 370 ) 829 ( 317 ) 160,001 ( 936 ) ECL income statement change for the period 319 ( 413 ) ( 476 ) ( 570 ) Recoveries 107 Others ( 21 ) Total ECL income statement change for the period ( 484 ) 1 Total in cludes $ 0.3 bn of gross carrying loans and advances, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 10 m, reflecting business disposals, as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 . 2 Total includes $ 4.4 b n of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. HSBC Holdings plc Annual Report on Form 20-F 184 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Personal lending – credit risk profile by internal PD band for loans and advances to customers at amortised cost Gross carrying amount Allowance for ECL PD range 1,2 Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total ECL coverage % $m $m $m $m $m $m $m $m % First lien residential mortgages 365,498 18,148 2,655 386,301 (58) (109) (313) (480) 0.1 –  Band 1 0.000 to 0.250 251,963 1,147 — 253,110 (14) (4) — (18) — –  Band 2 0.251 to 0.500 81,972 1,911 — 83,883 (15) (5) — (20) — –  Band 3 0.501 to 1.500 26,508 9,975 — 36,483 (11) (21) — (32) 0.1 –  Band 4 1.501 to 5.000 4,458 3,160 — 7,618 (16) (15) — (31) 0.4 –  Band 5 5.001 to 20.000 327 1,130 — 1,457 — (11) — (11) 0.8 –  Band 6 20.001 to 99.999 270 825 — 1,095 (2) (53) — (55) 5.0 –  Band 7 100.000 — — 2,655 2,655 — — (313) (313) 11.8 Credit cards 22,781 3,260 373 26,414 (339) (731) (231) (1,301) 4.9 –  Band 1 0.000 to 0.250 10,033 1 — 10,034 (25) — — (25) 0.2 –  Band 2 0.251 to 0.500 1,583 5 — 1,588 (11) (1) — (12) 0.8 –  Band 3 0.501 to 1.500 6,389 86 — 6,475 (89) (9) — (98) 1.5 –  Band 4 1.501 to 5.000 3,960 834 — 4,794 (125) (75) — (200) 4.2 –  Band 5 5.001 to 20.000 799 1,736 — 2,535 (86) (279) — (365) 14.4 –  Band 6 20.001 to 99.999 17 598 — 615 (3) (367) — (370) 60.2 –  Band 7 100.000 — — 373 373 — — (231) (231) 61.9 Other personal lending 58,417 2,479 917 61,813 (270) (395) (351) (1,016) 1.6 –  Band 1 0.000 to 0.250 25,714 3 — 25,717 (26) — — (26) 0.1 –  Band 2 0.251 to 0.500 5,680 18 — 5,698 (5) — — (5) 0.1 –  Band 3 0.501 to 1.500 13,964 142 — 14,106 (44) (1) — (45) 0.3 –  Band 4 1.501 to 5.000 11,219 387 — 11,606 (114) (13) — (127) 1.1 –  Band 5 5.001 to 20.000 1,443 1,235 — 2,678 (79) (132) — (211) 7.9 –  Band 6 20.001 to 99.999 397 694 — 1,091 (2) (249) — (251) 23.0 –  Band 7 100.000 — — 917 917 — — (351) (351) 38.3 At 31 Dec 2025 446,696 23,887 3,945 474,528 (667) (1,235) (895) (2,797) 0.6 First lien residential mortgages 324,703 34,177 2,450 361,330 (59) (130) (284) (473) 0.1 –  Band 1 0.000 to 0.250 234,451 1,820 — 236,271 (15) (4) — (19) — –  Band 2 0.251 to 0.500 64,340 11,816 — 76,156 (10) (9) — (19) — –  Band 3 0.501 to 1.500 22,005 14,631 — 36,636 (16) (25) — (41) 0.1 –  Band 4 1.501 to 5.000 3,668 3,990 — 7,658 (17) (27) — (44) 0.6 –  Band 5 5.001 to 20.000 117 1,178 — 1,295 — (13) — (13) 1.0 –  Band 6 20.001 to 99.999 122 742 — 864 (1) (52) — (53) 6.1 –  Band 7 100.000 — — 2,450 2,450 — — (284) (284) 11.6 Credit cards 21,611 2,991 313 24,915 (268) (660) (199) (1,127) 4.5 –  Band 1 0.000 to 0.250 10,051 1 — 10,052 (26) — — (26) 0.3 –  Band 2 0.251 to 0.500 2,340 4 — 2,344 (15) (1) — (16) 0.7 –  Band 3 0.501 to 1.500 5,113 23 — 5,136 (72) (5) — (77) 1.5 –  Band 4 1.501 to 5.000 3,847 1,013 — 4,860 (123) (103) — (226) 4.7 –  Band 5 5.001 to 20.000 260 1,526 — 1,786 (32) (263) — (295) 16.5 –  Band 6 20.001 to 99.999 — 424 — 424 — (288) — (288) 67.9 –  Band 7 100 — — 313 313 — — (199) (199) 63.6 Other personal lending 57,432 2,751 797 60,980 (243) (368) (313) (924) 1.5 –  Band 1 0.000 to 0.250 29,124 19 — 29,143 (30) — — (30) 0.1 –  Band 2 0.251 to 0.500 6,109 242 — 6,351 (9) (1) — (10) 0.2 –  Band 3 0.501 to 1.500 11,702 121 — 11,823 (37) (3) — (40) 0.3 –  Band 4 1.501 to 5.000 9,006 660 — 9,666 (95) (25) — (120) 1.2 –  Band 5 5.001 to 20.000 1,433 1,076 — 2,509 (70) (111) — (181) 7.2 –  Band 6 20.001 to 99.999 58 633 — 691 (2) (228) — (230) 33.3 –  Band 7 100.000 — — 797 797 — — (313) (313) 39.3 At 31 Dec 2024 403,746 39,919 3,560 447,225 (570) (1,158) (796) (2,524) 0.6 1 12-month point in time adjusted for multiple economic scenarios. 2 PD bands do not consider the impact of any management judgemental adjustments on stage or allowances for ECL including the impact of new models not yet formally implemented. For a list of management judgemental adjustments see page 153 . HSBC Holdings plc Annual Report on Form 20-F 185 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Personal lending – credit risk profile by internal PD band for loan and other credit-related commitments and financial guarantees Nominal amount Allowance for ECL PD range 1 Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total ECL coverage % $m $m $m $m $m $m $m $m % Loan and other credit- related commitments 270,494 1,945 92 272,531 (22) (5) — (27) — –  Band 1 0.000 to 0.250 218,170 98 — 218,268 (9) — — (9) — –  Band 2 0.251 to 0.500 11,412 76 — 11,488 (2) — — (2) — –  Band 3 0.501 to 1.500 33,294 423 — 33,717 (7) — — (7) — –  Band 4 1.501 to 5.000 6,694 615 — 7,309 (3) (3) — (6) 0.1 –  Band 5 5.001 to 20.000 793 586 — 1,379 (1) — — (1) 0.1 –  Band 6 20.001 to 99.999 131 147 — 278 — (2) — (2) 0.7 –  Band 7 100.000 — — 92 92 — — — — — Financial guarantees 1,446 — — 1,446 (1) — — (1) 0.1 –  Band 1 0.000 to 0.250 1,353 — — 1,353 (1) — — (1) 0.1 –  Band 2 0.251 to 0.500 30 — — 30 — — — — — –  Band 3 0.501 to 1.500 44 — — 44 — — — — — –  Band 4 1.501 to 5.000 19 — — 19 — — — — — –  Band 5 5.001 to 20.000 — — — — — — — — — –  Band 6 20.001 to 99.999 — — — — — — — — — –  Band 7 100.000 — — — — — — — — — At 31 Dec 2025 271,940 1,945 92 273,977 (23) (5) — (28) — Loan and other credit- related commitments 251,489 1,680 86 253,255 (17) — (5) (22) — –  Band 1 0.000 to 0.250 199,314 65 — 199,379 (9) — — (9) — –  Band 2 0.251 to 0.500 14,409 178 — 14,587 (2) — — (2) — –  Band 3 0.501 to 1.500 28,081 389 — 28,470 (1) — — (1) — –  Band 4 1.501 to 5.000 8,431 463 — 8,894 (3) — — (3) — –  Band 5 5.001 to 20.000 800 484 — 1,284 (2) — — (2) 0.2 –  Band 6 20.001 to 99.999 454 101 — 555 — — — — — –  Band 7 100.000 — — 86 86 — — (5) (5) 5.8 Financial guarantees 1,416 11 — 1,427 — — — — — –  Band 1 0.000 to 0.250 743 — — 743 — — — — — –  Band 2 0.251 to 0.500 389 — — 389 — — — — — –  Band 3 0.501 to 1.500 55 — — 55 — — — — — –  Band 4 1.501 to 5.000 220 — — 220 — — — — — –  Band 5 5.001 to 20.000 3 11 — 14 — — — — — –  Band 6 20.001 to 99.999 6 — — 6 — — — — — –  Band 7 100.000 — — — — — — — — — At 31 Dec 2024 252,905 1,691 86 254,682 (17) — (5) (22) — 1 12-month point in time adjusted for multiple economic scenarios. HSBC Holdings plc Annual Report on Form 20-F 186 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Supplementary information Wholesale lending – loans and advances to customers at amortised cost by country/territory Gross carrying amount Allowance for ECL Corporate and commercial of which: real estate and construction 1 Non-bank financial institutions Total Corporate and commercial of which: real estate and construction 1 Non-bank financial institutions Total $m $m $m $m $m $m $m $m UK 116,284 21,104 27,232 143,516 (1,270) (286) (127) (1,397) – of which: HSBC UK Bank plc (ring-fenced bank) 93,186 20,112 11,518 104,704 (1,173) (253) (84) (1,257) – of which: HSBC Bank plc (non-ring-fenced bank) 23,098 992 15,714 38,812 (97) (33) (43) (140) France 25,655 4,032 10,556 36,211 (379) (90) (28) (407) Germany 5,883 431 142 6,025 (175) (10) — (175) Hong Kong 114,792 37,890 18,591 133,383 (3,515) (1,991) (117) (3,632) Australia 14,472 4,725 4,627 19,099 (28) (3) (1) (29) India 13,789 2,131 6,687 20,476 (53) (5) (7) (60) Indonesia 3,063 172 573 3,636 (74) — (1) (75) Mainland China 27,663 5,254 12,272 39,935 (281) (197) (4) (285) Malaysia 5,560 1,059 486 6,046 (34) (7) — (34) Singapore 16,619 2,878 1,912 18,531 (126) (54) (1) (127) Taiwan 4,685 69 — 4,685 (1) — — (1) Egypt 806 34 41 847 (111) (24) — (111) UAE 14,082 1,792 2,714 16,796 (535) (333) (42) (577) US 22,054 2,355 9,916 31,970 (276) (80) (10) (286) Mexico 11,655 683 1,133 12,788 (263) (35) (23) (286) Other 27,443 3,243 3,176 30,619 (405) (148) (8) (413) At 31 Dec 2025 424,505 87,852 100,058 524,563 (7,526) (3,263) (369) (7,895) UK 102,245 17,540 21,771 124,016 (1,412) (289) (234) (1,646) – of which: HSBC UK Bank plc (ring-fenced bank) 79,833 16,722 10,268 90,101 (1,146) (260) (54) (1,200) – of which: HSBC Bank plc (non-ring-fenced bank) 22,412 818 11,503 33,915 (266) (29) (180) (446) France 25,950 3,986 7,222 33,172 (257) (42) (9) (266) Germany 6,256 264 421 6,677 (153) — — (153) Hong Kong 118,332 42,042 17,846 136,178 (2,922) (1,494) (112) (3,034) Australia 12,532 4,509 2,931 15,463 (30) (3) — (30) India 12,540 2,581 6,425 18,965 (45) (5) (6) (51) Indonesia 3,132 184 356 3,488 (109) (44) — (109) Mainland China 29,930 5,326 8,044 37,974 (222) (117) (6) (228) Malaysia 5,773 1,067 278 6,051 (40) (10) — (40) Singapore 17,267 3,266 1,830 19,097 (234) (80) (1) (235) Taiwan 3,848 60 — 3,848 — — — — Egypt 777 32 51 828 (115) (20) — (115) UAE 13,278 1,809 1,589 14,867 (408) (258) — (408) US 24,084 4,028 10,348 34,432 (246) (106) (47) (293) Mexico 10,318 525 1,407 11,725 (201) (9) (11) (212) Other 24,422 2,844 1,945 26,367 (361) (121) (10) (371) At 31 Dec 2024 410,684 90,063 82,464 493,148 (6,755) (2,598) (436) (7,191) 1 Real estate lending within this disclosure corresponds solely to the industry of the borrower. Commercial real estate on page 174 includes borrowers in multiple industries investing in income-producing assets and, to a lesser extent, their construction and development. HSBC Holdings plc Annual Report on Form 20-F 187 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Personal lending – loans and advances to customers at amortised cost by country/territory Gross carrying amount Allowance for ECL First lien residential mortgages Credit cards Other personal lending Total First lien residential mortgages Credit cards Other personal lending Total $m $m $m $m $m $m $m $m UK 191,180 9,083 15,671 215,934 (138) (345) (324) (807) – of which: HSBC UK Bank plc (ring-fenced bank) 186,776 8,992 11,673 207,441 (134) (344) (294) (772) –  of which: HSBC Bank plc (non-ring-fenced bank) 4,404 91 3,998 8,493 (4) (1) (30) (35) France 22 — 3 25 (12) — (2) (14) Hong Kong 108,200 10,379 25,551 144,130 (4) (311) (170) (485) Australia 25,619 288 19 25,926 (8) (8) — (16) India 2,344 323 667 3,334 (3) (20) (3) (26) Indonesia 36 152 58 246 (2) (8) (5) (15) Mainland China 5,417 164 402 5,983 (20) (22) (6) (48) Malaysia 3,494 1,070 267 4,831 (16) (38) (26) (80) Singapore 6,776 691 7,415 14,882 — (38) (36) (74) Taiwan 6,570 437 1,123 8,130 — (5) (14) (19) Egypt — 119 278 397 — (1) (1) (2) UAE 2,456 587 970 4,013 (5) (39) (18) (62) US 19,773 183 567 20,523 (14) (14) (2) (30) Mexico 8,390 2,289 3,055 13,734 (192) (415) (376) (983) Other 6,024 649 5,767 12,440 (66) (37) (33) (136) At 31 Dec 2025 386,301 26,414 61,813 474,528 (480) (1,301) (1,016) (2,797) UK 170,809 8,016 13,410 192,235 (139) (284) (256) (679) –  of which: HSBC UK Bank plc (ring-fenced bank) 166,709 7,933 10,096 184,738 (132) (283) (251) (666) –  of which: HSBC Bank plc (non-ring-fenced bank) 4,100 83 3,314 7,497 (7) (1) (5) (13) France 377 1 6,600 6,978 (12) — (12) (24) Hong Kong 107,759 10,165 21,511 139,435 (5) (291) (130) (426) Australia 22,154 372 35 22,561 (7) (8) (1) (16) India 1,984 265 600 2,849 (3) (14) (4) (21) Indonesia 46 142 181 369 (3) (6) (5) (14) Mainland China 6,087 227 544 6,858 (12) (33) (9) (54) Malaysia 3,252 938 260 4,450 (23) (36) (26) (85) Singapore 5,802 571 6,082 12,455 — (28) (28) (56) Taiwan 5,788 340 1,084 7,212 — (4) (11) (15) Egypt — 89 232 321 — — (1) (1) UAE 2,082 543 795 3,420 (3) (31) (24) (58) US 21,021 195 458 21,674 (12) (14) (2) (28) Mexico 7,488 2,242 3,078 12,808 (167) (339) (380) (886) Other 6,681 809 6,110 13,600 (87) (39) (35) (161) At 31 Dec 2024 361,330 24,915 60,980 447,225 (473) (1,127) (924) (2,524) HSBC Holdings plc Annual Report on Form 20-F 188 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk Loans and advances to customers and banks – other supplementary information At 31 Dec 2025 At 31 Dec 2024 Gross carrying amount of which: stage 3 and POCI Allowance for ECL of which: stage 3 and POCI Change in ECL Write-offs Recoveries Gross carrying amount of which: stage 3 and POCI Allowance for ECL of which: stage 3 and POCI Change in ECL Write-offs Recoveries $m $m $m $m $m $m $m $m $m $m $m $m $m $m First lien residential mortgages 386,301 2,655 (480) (313) (24) (63) 6 361,330 2,450 (473) (284) 33 (63) 7 Credit cards 26,414 373 (1,301) (231) (830) (847) 123 24,915 313 (1,127) (199) (804) (736) 106 Other personal lending 61,813 917 (1,016) (351) (621) (731) 114 60,980 797 (924) (313) (508) (735) 107 –  other personal lending which is secured 1 40,693 270 (108) (65) (46) (35) 5 40,320 199 (86) (34) (24) (36) 4 –  other personal lending which is unsecured 21,120 647 (908) (286) (575) (696) 109 20,660 598 (838) (279) (484) (699) 103 Personal lending 474,528 3,945 (2,797) (895) (1,475) (1,641) 243 447,225 3,560 (2,524) (796) (1,279) (1,534) 220 –  agriculture, forestry and fishing 7,592 355 (97) (60) (11) (10) — 7,033 282 (94) (46) 4 (10) 1 –  mining and quarrying 6,982 126 (86) (70) (58) (19) — 7,592 318 (45) (32) 29 (26) — –  manufacturing 86,372 2,266 (960) (741) (271) (307) 16 82,724 1,487 (893) (638) (170) (403) 3 –  electricity, gas, steam and air-conditioning supply 19,322 206 (126) (85) (19) (17) — 16,457 209 (122) (85) — — — –  water supply, sewerage, waste management and remediation 2,563 112 (41) (36) (22) (6) — 2,961 43 (24) (16) 2 (40) — –  real estate and construction 87,852 10,589 (3,263) (2,730) (1,296) (574) 19 90,063 8,949 (2,598) (1,842) (812) (1,554) 12 –  wholesale and retail trade, repair of motor vehicles and motorcycles 84,557 2,549 (1,287) (1,126) (234) (286) 28 77,830 2,728 (1,372) (1,188) (369) (337) 8 –  transportation and storage 20,719 307 (174) (75) (40) (205) 2 22,643 417 (321) (232) (104) (20) 1 –  accommodation and food 14,389 1,436 (399) (303) (124) (31) 2 14,734 1,610 (299) (214) (81) (27) — –  publishing, audiovisual and broadcasting 25,347 377 (198) (108) (75) (46) — 19,826 229 (158) (61) (79) (75) 2 –  professional, scientific and technical activities 25,023 520 (218) (153) (66) (89) 1 26,128 648 (266) (188) (132) (174) 1 –  administrative and support services 19,525 570 (395) (321) (151) (59) — 20,117 739 (320) (254) (39) (88) 1 –  public administration and defence, compulsory social security 64 — — — — — — 64 — — — — — — –  education 2,259 40 (26) (11) (2) (3) — 1,596 43 (27) (16) (16) (3) — –  health and care 4,403 98 (32) (14) 3 (13) — 4,030 184 (51) (25) (3) (12) 1 –  arts, entertainment and recreation 2,313 123 (51) (42) (29) (16) — 2,066 78 (35) (26) (19) (22) — –  other services 6,599 311 (168) (106) 44 (51) 7 7,288 327 (110) (66) (82) (115) 10 –  activities of households 841 — — — — — — 589 — — — — — — –  extra-territorial organisations and bodies activities 164 — — — — — — 118 — — — — — — –  government 7,619 121 (5) (3) (1) — — 6,793 175 (7) (5) 6 — — –  asset-backed securities — — — — (1) (14) — 32 — (13) — 1 — — Corporate and commercial 424,505 20,106 (7,526) (5,984) (2,353) (1,746) 75 410,684 18,466 (6,755) (4,934) (1,864) (2,906) 40 Non-bank financial institutions 100,058 671 (369) (294) (112) (182) 2 82,464 679 (436) (361) (59) (19) — Wholesale lending 524,563 20,777 (7,895) (6,278) (2,465) (1,928) 77 493,148 19,145 (7,191) (5,295) (1,923) (2,925) 40 Loans and advances to customers 999,091 24,722 (10,692) (7,173) (3,940) (3,569) 320 940,373 22,705 (9,715) (6,091) (3,202) (4,459) 260 Loans and advances to banks 108,469 1 (7) (1) 9 — — 102,052 2 (13) (2) (1) — — At 31 Dec 2025 1,107,560 24,723 (10,699) (7,174) (3,931) (3,569) 320 1,042,425 22,707 (9,728) (6,093) (3,203) (4,459) 260 1 ‘Other personal lending which is secured’ has been expanded to encompass second lien mortgages, motor vehicle finance, and guaranteed loans related to residential property, which were previously reported as separate line items. HSBC Holdings plc Annual Report on Form 20-F 189 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Credit risk HSBC Holdings (Audited) Credit risk in HSBC Holdings primarily arises from transactions with Group subsidiaries. In HSBC Holdings, the maximum exposure to credit risk arises from two components: – financial assets on the balance sheet, where maximum exposure equals the carrying amount (see page 297 ); and – financial guarantees and other guarantees, where the maximum exposure is the maximum that we would have to pay if the guarantees were called upon (see Note 33). In the case of our derivative asset balances (see page 297 ), there is a legally enforceable right of offset in the event of counterparty default and where, as a result, there is a net exposure for credit risk purposes. However, as there is no intention to settle these balances on a net basis under normal circumstances, they do not qualify for net presentation for accounting purposes. These offsets also include collateral received in cash and other financial assets. The total offset relating to our derivative asset balances was $ 1.8 bn at 31 December 2025 (2024: $ 3.0 bn ). The credit quality of loans and advances and financial investments, both of which consist of intra-Group lending and US Treasury bills and bonds, is assessed as ‘strong’, with 100 % of the exposure being neither past due nor impaired (2024: 100 % ). For further details of credit quality classification, see page 141 . Treasury risk Ñ See page 138 for our definition of Treasury risk. Approach and policy (Audited) We manage treasury risks in order to maintain appropriate levels of capital, liquidity, funding, foreign exchange and non-traded market risk to support our business strategy, and meet our regulatory and stress testing-related requirements. Our approach to treasury risk management is shaped by our organisational needs and the regulatory, economic and commercial environment. We aim to maintain a strong capital and liquidity base to manage inherent business risks and invest in accordance with our strategy, adhering to both consolidated and local regulatory requirements at all times. Our policy is supported by a risk management framework, with further details provided on page 119 . Ñ For further details, refer to our Pillar 3 Disclosures at 31 December 2025 . Treasury risk management Key developments in 2025 – The Group continues to maintain and benefit from a healthy capital, liquidity and funding position, which has been resilient throughout periods of volatility in the macroeconomic environment and global markets during 2025. This was further demonstrated by our strong CET1 performance in the Bank Capital Stress Test published by the Bank of England as part of the Financial Stability Report on 2 December 2025. – See page 121 for a summary of key risks including geopolitical and macroeconomic risks that we are managing. – The CET1 capital impact of the privatisation of Hang Seng Bank was a net 110bps in January 2026 (based on the CET1 capital ratio as at 31 December 2025). This included a day one impact on CET1 capital of around 120bps, partly offset by the release of structural foreign exchange RWAs, which related to hedging in the run up to the transaction. These had an adverse impact on CET1 capital of around 10bps at 31 December 2025, which unwound upon the privatisation taking effect. Ñ For quantitative disclosures on capital ratios, own funds and risk-weighted assets (‘RWAs’), see pages 191 to 192 . For quantitative disclosures on liquidity and funding metrics, see pages 194 to 195 . For quantitative disclosures on interest rate risk in the banking book, see pages 197 to 199 . Governance and structure The Group Treasurer owns all treasury risks, except for pension and insurance risks. Pension risk is jointly owned with the Group Head of Performance and Reward, while insurance risk is owned by the Chief Executive Officer for Global Insurance. The Global Head of Traded and Treasury Risk Management and Risk Analytics is the risk steward for all treasury risks. Treasury risks excluding pension and insurance risks are the responsibility of the Group Finance Management Meeting (‘GFMM’) and the Group Risk Committee (‘GRC’). These risks are actively managed by Global Treasury with support from the Holdings Asset and Liability Management Committee (‘ALCO’) and local ALCOs, overseen by Treasury Risk Management and Risk Management Meetings. Pension risk is monitored through local and regional pension risk management meetings, with global oversight provided by the Global Pension Financial Risk Management Meeting, chaired by the accountable risk steward. Insurance risk is overseen by the Global Insurance Risk Management Meeting, chaired by the Chief Risk and Compliance Officer for Global Insurance. Capital, liquidity and funding risk management processes Assessment and risk appetite Our capital management approach is underpinned by a global capital risk policy, complemented by frameworks for recovery and resolution planning and stress testing. The policy sets out our approach to determining key capital risk appetites including for our CET1 ratio, total capital, minimum requirements for own funds and eligible liabilities (‘MREL’), leverage ratio and double leverage. Our internal capital adequacy assessment process (‘ICAAP’) evaluates the Group’s capital position, considering both regulatory and internal capital resources and requirements. Subsidiaries align their ICAAPs with global guidance, while considering local regulatory regimes to establish their own risk appetite. HSBC Holdings provides MREL to its subsidiaries, encompassing both equity and non-equity capital. These investments are funded by HSBC Holdings’ own equity capital and MREL-eligible debt. MREL includes own funds and eligible liabilities that can be written down or converted into capital resources in order to absorb losses or recapitalise a bank in the event of its failure. HSBC has three resolution groups – the European, the Asian and the US, with some smaller entities outside these groups. HSBC Holdings seeks to maintain a prudent balance between the composition of its capital and its investments in subsidiaries. HSBC Holdings plc Annual Report on Form 20-F 190 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk As a matter of long-standing policy, HSBC Holdings retains a substantial holdings capital buffer comprising cash and other high- quality liquid assets, which we seek to manage within our target operating range of $19bn - $24bn. HSBC maintains an adequate and well-diversified liquidity buffer, as well as a stable funding base, to meet its liquidity and funding regulatory requirements. We seek to ensure contractual or contingent obligations can be met by having the appropriate amount, tenor and composition of funding and liquidity to support our assets. We aim to ensure management oversight of liquidity and funding risks at both Group and entity levels through governance arrangements aligned with our risk management framework. Liquidity and funding risks are managed at the operating entity level seeking to adhere to globally consistent policies, procedures and reporting standards. Operating entities are required to meet internal minimum requirements and any applicable regulatory requirements at all times. Our internal liquidity adequacy assessment process (‘ILAAP’) seeks to ensure operating entities have strategies, policies, processes and systems for the identification, measurement, management and monitoring of liquidity risk across various time horizons, including intra- day. The ILAAP informs risk appetite setting, and assesses the capability to manage liquidity and funding effectively in major entities. Metrics are locally set and managed but undergo global review and challenge to ensure consistency with the Group’s policies and controls. Planning and performance Capital and RWA plans are integral to our annual financial resource strategy approved by the Board. Monthly forecasts are submitted to the Group Operating Committee, ensuring ongoing monitoring and management. The responsibility for global capital allocation principles rests with the Group Chief Financial Officer, supported by the Group Capital Management Meeting. This is a specialist forum addressing capital management, reporting into the Holdings ALCO. Our internal governance processes aim to enhance discipline over our investment and capital allocation decisions, helping to ensure that returns align with management’s objectives. The Group strategically allocates financial resources to support business execution and fulfil regulatory and economic capital needs. We assess business returns by using a return on average tangible equity measure and a related economic profit measure. Funding and liquidity are part of the Board-approved financial resource plan. Key measures include the liquidity coverage ratio (‘LCR’) and net stable funding ratio (‘NSFR’) and internal liquidity metrics, at the entity level. We employ a set of measures to help maintain a suitable funding and liquidity profile such as depositor concentration limits, intra-day liquidity and forward-looking funding assessments. Ñ For details on regulatory developments see our Pillar 3 Disclosures at 31 December 2025 . Stress testing and recovery and resolution planning HSBC employs stress testing to guide the management of capital and liquidity required to withstand both internal and external shocks to the organisation, such as systems failure or a global economic downturn. In addition to our internal stress tests, HSBC undergoes supervisory stress testing across various jurisdictions, and results from these tests are critical for evaluating our internal capital and liquidity needs through the ICAAP and ILAAP. The outcomes from these assessments influence the setting of regulatory requirements and inform internally set management buffers. Stress tests input into business performance through tangible equity allocation and prompt a reassessment of business plans when capital, liquidity or returns fall short of targets. These tests also inform risk mitigation strategies and aid in recovery and resolution planning. We maintain recovery plans, including contingency funding plans for the Group and material entities, outlining potential stress events that could result in a breach of capital or liquidity buffers. The Group recovery plan establishes a framework and governance arrangements to support restoring HSBC to a stable and viable position, reducing the probability of failure from either specific or market-wide stresses. The recovery plans of our material entities provide detailed actions that could be taken to stabilise their financial position in stress environments. HSBC is equipped with the necessary capabilities and resources to help manage the unlikely event that the Group might not be recoverable and would require resolution by regulators. We are committed to continuing to improve our recovery and resolution capabilities, aligning with the BoE’s expectations and Resolvability Assessment Framework (‘RAF’) requirements. Measurement of interest rate risk in the banking book processes Interest rate risk in the banking book (‘IRRBB’) refers to the potential negative impact on earnings or capital due to fluctuations in market interest rates or changes in the expected repricing of client products. The risk arises from our non-traded assets and liabilities that are not held for trading intent or in order to hedge positions held with trading intent. Our global IRRBB risk management framework is designed to identify, measure, manage and monitor all material sources of IRRBB. We have established policies and frameworks to help ensure oversight. To help manage IRRBB and provide more stable earnings, we use a structural hedge, which is a portfolio of fixed rate assets such as bonds, derivatives and customer loans. The size and duration of this hedge may be limited in certain currencies and locations, depending on available financial resources and market conditions. To reduce accounting mismatches, we mostly hedge with amortised cost financial instruments or hedge-accounted derivatives. However, bonds measured at fair value through other comprehensive income are also used. We utilise a combination of economic value and earnings-based measures to help manage IRRBB effectively. These measures are used to assess IRRBB across the banking book, supporting the overall monitoring against risk appetite. They include: – Banking net interest income (‘banking NII’) sensitivity; and – Economic value of equity (‘EVE’) sensitivity. Ñ Further details of HSBC’s risk management of interest rate risk in the banking book can be found in the Group’s Pillar 3 Disclosures at 31 December 2025 . Other Group risks Non-trading book foreign exchange exposures Structural foreign exchange exposures Structural foreign exchange exposures occur when capital is invested or net assets are held in a foreign operation, such as a subsidiary, associate, joint venture or branch operating in a different currency than the reporting entity. The functional currency of an entity typically aligns with the primary economic environment in which the entity operates . Exchange differences from these structural exposures are recognised in other comprehensive income. We present our consolidated financial statements in US dollars because the US dollar and linked currencies form the primary currency bloc for our transaction and funding. Consequently, our consolidated balance sheet is impacted by foreign exchange differences between the US dollar and all the non-US dollar functional currencies of our foreign operations. Our main goal in managing these exposures is to protect our consolidated capital ratios and those of our banking subsidiaries from exchange rate fluctuations. We employ hedging strategies, such as net investment and economic hedges, when it is capital efficient to do so and within approved limits. The hedging positions are monitored and rebalanced to manage RWAs or downside risks associated with HSBC’s foreign currency investments. Ñ For further details of our structural foreign exchange exposures, see page 196 . HSBC Holdings plc Annual Report on Form 20-F 191 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk Transactional foreign exchange exposures Transactional foreign exchange risk stems from day-to-day transactions in the banking book generating profit and loss or fair value through other comprehensive income reserves in a currency different from the entity’s reporting currency . Transactional foreign exchange exposure generated through profit and loss is periodically transferred to Markets and Securities Services and managed within limits, except for minor residual foreign exchange exposure arising from timing differences or for other reasons. Transactional foreign exchange exposure generated through other comprehensive income reserves is managed by Global Treasury within approved appetite. HSBC Holdings risk management As a financial services holding company, HSBC Holdings has limited market risk activities. HSBC Holdings focuses on maintaining sufficient capital resources to support its diverse activities, distributing these resources across businesses, and generating dividend and interest income from its investments. Additionally, it manages operating expenses, provides dividends to shareholders, pays interest to debt capital providers, and ensures a reserve of short-term liquid assets for unexpected situations. The primary market risks HSBC Holdings is exposed to are banking book interest rate risk and foreign currency risk. These risks stem from short- term cash balances, funding positions, loans to subsidiaries, investments in long-term assets, financial liabilities and foreign exchange hedges. The objective of HSBC Holdings’ market risk management strategy is to manage volatility in capital resources, cash flows and distributable reserves due to market changes. To manage interest rate and foreign currency risk from long-term debt, HSBC Holdings employs interest rate swaps and cross-currency interest rate swaps. Additionally, forward foreign exchange contracts are used to manage structural foreign exchange exposures. Holdings ALCO oversees market risk in accordance with the company’s risk appetite statement. Ñ For quantitative disclosures on HSBC Holdings’ interest rate risk in the banking book see page 200 . Pension risk management processes Our global pensions strategy is to move from defined benefit to defined contribution plans, where local law allows and it is considered competitive to do so. Our most significant defined benefit plans have been closed to new members for years, and many (including the largest plan in the UK) are also closed to future accrual. In defined contribution pension plans, the contributions that HSBC is required to make are known, while the final pension benefits depend on investment returns from employee selected options. While the market risk of defined contribution plans is minimal for HSBC, operational and reputational risks remain. In defined benefit pension plans, the level of pension benefit is known, but HSBC’s contribution levels can fluctuate due to a number of risks, including: – investments delivering a return below the level required to provide the projected plan benefits; – economic environment downturns causing asset value reductions (both equity and debt); – changes in interest rates or inflation expectations, causing an increase in the value of plan liabilities; and – plan members living longer than expected (longevity risk). Pension risk is assessed using an economic capital model that takes into account potential variations in these factors. The impact of these variations on both pension assets and pension liabilities is assessed using a one-in-200-year stress test. Scenario analysis and other stress tests are also used to support pension risk management, including the review of de-risking opportunities. To fund the benefits associated with defined benefit plans, sponsoring Group companies, and in some instances employees, make regular contributions based on actuarial advice and fiduciary consultations. Contributions ensure that there are sufficient funds to meet the cost of the accruing benefits for the future service of active members, with higher contributions required when plan assets are considered insufficient to cover the existing pension liabilities. Contribution rates are revised annually or once every three years, depending on the plan. The defined benefit plans invest in a range of investments designed to limit the risk of assets failing to meet a plan’s liabilities. Any changes in expected returns may change future contribution requirements. Asset allocations are strategically set, with benchmarks reviewed every three to five years. In addition, some of the Group’s pension plans hold longevity swap contracts, offering long-term protection against increased costs from longer than expected lifespans. Notably, the HSBC Bank (UK) Pension Scheme covers approximately 50 % of the plan’s pensioner liabilities with such swaps. Capital risk in 2025 Capital overview Capital and liquidity adequacy metrics At 31 Dec 2025 31 Dec 2024 Risk-weighted assets (‘RWAs’) ($bn) Credit risk 687.0 657.9 Counterparty credit risk 42.4 37.7 Market risk 38.5 36.2 Operational risk 120.7 106.5 Total RWAs 888.6 838.3 Capital on a transitional basis ($bn) Common equity tier 1 capital 132.6 124.9 Tier 1 capital 153.4 144.1 Total capital 182.4 172.4 Capital ratios on a transitional basis (%) Common equity tier 1 ratio 14.9 14.9 Tier 1 ratio 17.3 17.2 Total capital ratio 20.5 20.6 Capital on an end point basis ($bn) Common equity tier 1 (‘CET1’) capital 132.6 124.9 Tier 1 capital 153.4 144.1 Total capital 182.4 168.5 Capital ratios on an end point basis (%) Common equity tier 1 ratio 14.9 14.9 Tier 1 ratio 17.3 17.2 Total capital ratio 20.5 20.1 Liquidity coverage ratio (‘LCR’) Total high-quality liquid assets ($bn) 702.1 649.2 Total net cash outflow ($bn) 512.1 470.7 LCR (%) 137 138 Net stable funding ratio (‘NSFR’) Total available stable funding ($bn) 1,621.0 1,523.4 Total required stable funding ($bn) 1,133.3 1,064.5 NSFR (%) 143 143 References to EU regulations and directives (including technical standards) should, as applicable, be read as references to the UK’s version of such regulation or directive, as onshored into UK law under the European Union (Withdrawal) Act 2018, and as may be subsequently amended under UK law. Ca pital figures and ratios in the previous table are calculated in accordance with the regulatory requirements of the Capital Requirements Regulation and Directive, the CRR II regulation and the Prudential Regulation Authority (‘PRA’) Rulebook (‘CRR II’). Effective 1 January 2025, the IFRS 9 transitional arrangements came to an end, followed by the end of the CRR II grandfathering provisions on 28 June 2025. Accordingly, our current period capital figures are the same on both the transitional and end-point basis. The liquidity coverage ratio is based on the average value of the preceding 12 months. The net stable funding ratio is based on the average value of the four preceding quarters. Regulatory numbers and ratios are presented as at the date of reporting. Small changes may exist between these numbers and ratios and those submitted in regulatory filings. Where differences are significant, we may restate in subsequent periods. HSBC Holdings plc Annual Report on Form 20-F 192 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk Own funds disclosure (Table audited) At 31 Dec 2025 31 Dec 2024 Ref* $m $m Common equity tier 1 capital: instruments and reserves 1 Capital instruments and the related share premium accounts 8,699 22,378 –  ordinary shares 8,699 22,378 2 Retained earnings 152,936 138,959 3 Accumulated other comprehensive income (and other reserves) ( 27 ) ( 8,410 ) 5 Minority interests (amount allowed in consolidated CET1) 3,303 3,960 5a Independently reviewed net profits net of any foreseeable charge or dividend 8,076 7,184 6 Common equity tier 1 capital before regulatory adjustments 172,987 164,071 28 Total regulatory adjustments to common equity tier 1 ( 40,394 ) ( 39,160 ) 29 Common equity tier 1 capital 132,593 124,911 36 Additional tier 1 capital before regulatory adjustments 20,874 19,286 43 Total regulatory adjustments to additional tier 1 capital ( 70 ) ( 70 ) 44 Additional tier 1 capital 20,804 19,216 45 Tier 1 capital 153,397 144,127 51 Tier 2 capital before regulatory adjustments 30,167 29,334 57 Total regulatory adjustments to tier 2 capital ( 1,193 ) ( 1,075 ) 58 Tier 2 capital 28,974 28,259 59 Total capital 182,371 172,386 * The references identify lines prescribed in the PRA template, which are applicable and where there is a value. At 31 December 2025, our CET1 capital ra tio remained at 14.9 %, unchanged from 31 December 2024. The increase in CET1 capital of $7.7bn was offset by an increase in RWAs of $ 50.3 bn. The key drivers of the movements within the CET1 ratio during the year were: – a 0.5 percentage point increase from capital generation, mainly through regulatory profits net of dividends and share buy-backs. Share buy-backs were paused following the announcement of the privatisation of Hang Seng Bank; – a 0.1 percentage point increase in the fair value of hold-to-collect- and-sell debt instruments, following a decrease in yields, and the net impact from foreign exchange fluctuations, partly offset by regulatory deductions; – a 0.2 percentage point decrease due to the loss on our portfolio of home and certain other loans in France under hold-to-collect-and- sell, measured at FVOCI in 1Q25, which was partly offset by PRA waivers granted for the exclusion of operational risk RWAs in 2Q25; and – a 0.4 percentage point decrease due to an increase in RWAs, mainly driven by organic balance sheet growth. Our Pillar 2A requirement at 31 December 2025 , as per the PRA’s Individual Capital Requirement based on a point-in-time assessment, was equivalent to 2.5% of RWAs, of which 1.4% must be met by CET1. Throughout 2025 , we complied with the PRA’s regulatory capital adequacy requirement. Risk-weighted assets RWAs by business segment Hong Kong UK CIB IWPB Corporate Centre Total RWAs $bn $bn $bn $bn $bn $bn Credit risk 114.5 130.3 282.3 71.5 88.4 687.0 Counterparty credit risk 0.1 0.1 40.2 0.8 1.2 42.4 Market risk 0.7 — 24.4 0.3 13.1 38.5 Operational risk 24.3 22.5 61.8 17.3 (5.2) 120.7 At 31 Dec 2025 139.6 152.9 408.7 89.9 97.5 888.6 At 31 Dec 2024 143.7 133.5 388.0 85.7 87.4 838.3 RWAs by legal entities 1 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra- Group eliminations Total RWAs $bn $bn $bn $bn $bn $bn $bn $bn $bn Credit risk 133.5 73.8 319.1 18.8 58.6 25.1 46.9 11.2 687.0 Counterparty credit risk 0.3 23.9 10.3 0.9 4.3 0.7 2.0 — 42.4 Market risk 2 0.1 24.9 18.9 2.4 2.8 0.6 2.1 6.7 38.5 Operational risk 24.1 23.4 63.5 5.1 8.3 6.1 6.0 (15.8) 120.7 At 31 Dec 2025 158.0 146.0 411.8 27.2 74.0 32.5 57.0 2.1 888.6 At 31 Dec 2024 138.3 137.6 402.8 26.6 74.4 29.7 50.7 (0.6) 838.3 1 Balances are on a third-party Group consolidated basis. 2 Market risk RWAs are non-additive across the legal entities due to diversification effects within the Group. HSBC Holdings plc Annual Report on Form 20-F 193 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk RWA movement by legal entities by key driver 1 Credit risk, counterparty credit risk and operational risk HSBC UK Bank plc HSBC Bank plc 2 The Hongkong and Shanghai Banking Corporation Limited 2 HSBC Bank Middle East Limited HSBC North America Holdings Inc Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Market risk Total RWAs $bn $bn $bn $bn $bn $bn $bn $bn $bn $bn RWAs at 1 Jan 2025 138.1 111.5 379.8 24.5 71.7 29.2 49.4 (2.1) 36.2 838.3 Asset size 15.9 2.1 13.3 1.1 2.5 (1.1) 6.7 (2.8) 2.2 39.9 Asset quality 1.1 0.9 1.8 (0.6) (2.5) (0.1) (0.1) — — 0.5 Model updates (0.5) — (0.5) (0.1) (0.3) — — — — (1.4) Methodology and policy (6.1) 1.6 (8.2) (0.1) (0.3) 0.2 0.1 1.1 0.1 (11.6) Acquisitions and disposals 2 — (3.4) 1.5 (0.1) — — (1.5) (1.0) — (4.5) Foreign exchange movements 3 9.4 8.4 5.2 0.1 0.1 3.7 0.3 0.2 — 27.4 Total RWA movement 19.8 9.6 13.1 0.3 (0.5) 2.7 5.5 (2.5) 2.3 50.3 RWAs at 31 Dec 2025 157.9 121.1 392.9 24.8 71.2 31.9 54.9 (4.6) 38.5 888.6 RWA movement by business segment by key driver Credit risk, counterparty credit risk and operational risk Hong Kong UK CIB IWPB 2 Corporate Centre 2 Market risk Total RWAs $bn $bn $bn $bn $bn $bn $bn RWAs at 1 Jan 2025 142.0 133.5 360.7 85.6 80.3 36.2 838.3 Asset size 0.2 16.0 13.9 2.5 5.1 2.2 39.9 Asset quality (0.4) 0.8 (0.2) (0.1) 0.4 — 0.5 Model updates 0.2 (0.5) (1.1) — — — (1.4) Methodology and policy (3.7) (6.1) (0.6) 0.1 (1.4) 0.1 (11.6) Acquisitions and disposals 2 — — (1.0) (2.4) (1.1) — (4.5) Foreign exchange movements 3 0.6 9.2 12.6 3.9 1.1 — 27.4 Total RWA movement (3.1) 19.4 23.6 4.0 4.1 2.3 50.3 RWAs at 31 Dec 2025 138.9 152.9 384.3 89.6 84.4 38.5 888.6 1 Balances are on a third-party Group consolidated basis. 2 Includes changes in the allocation of $1.5bn significant investment RWAs from HSBC Bank plc to The Hongkong and Shanghai Banking Corporation Limited, following the disposal of the French life insurance business. 3 Credit risk foreign exchange movements in this disclosure are computed by retranslating the RWAs into US dollars based on the underlying transactional currencies, and other movements in the table are presented on a constant currency basis. RWAs increased by $ 50.3 bn during the year, mainly due to asset size movements of $ 39.9 bn and foreign currency translation differences of $ 27.4 bn, which were partly offset by methodology and policy changes of $ 11.6 bn and strategic disposals of $ 4.5 bn. Asset size Asset size RWAs increased by $ 39.9 bn, of which $26.1bn related to credit risk asset size, largely driven by corporate lending in our UK and CIB businesses, and in SAB within Corporate Centre. Additionally, there was an $11.6bn rise in operational risk RWAs driven by higher average income across our business segments. Market risk RWAs increased by $ 2.2 bn, mainly as a result of higher structural foreign exchange exposures of $5.7bn, to hedge the anticipated impact of the Hang Seng Bank privatisation, which was partly offset by lower stressed value at risk (‘SVaR’) of $3bn due to an improved risk profile in the rates portfolio. Asset quality The marginal $ 0.5 bn increase in RWAs was mainly driven by unfavourable credit risk migrations, which were largely offset by increased credit risk mitigation in our Hong Kong and CIB businesses. This included an increase due to portfolio mix changes in our UK business. Model updates The decrease of $ 1.4 bn in RWAs was primarily driven by the recalibration of post-model adjustments to address wholesale internal- ratings credit risk model limitations, mainly in CIB. Methodology and policy The $ 11.6 bn decrease in RWAs was primarily due to credit risk parameter refinements, including methodology changes to our undrawn exposures within the UK and CIB businesses; and a UK transaction where some credit risk was transferred to a third party. Acquisitions and disposals RWAs decreased by $ 4.5 bn, due to the PRA waiver granted in 2025 for the exclusion of operational risk RWAs previously associated with the sale of our retail banking operations in France and the disposal of our business in Argentina. Additionally, we sold the ADRs in Grupo Financiero Galicia that we received as purchase consideration from the sale of our business in Argentina. A further decrease resulted from the sale of our French retained portfolio of home and certain other loans. Leverage ratio At 31 Dec 2025 31 Dec 2024 $bn $bn Tier 1 capital (leverage) 153.4 144.1 Total leverage ratio exposure 2,877.1 2,571.1 % % Leverage ratio 5.3 5.6 Our leverage ratio was 5.3 % at 31 December 2025 , down from 5.6% at 31 December 2024 . The increase in the leverage exposures led to a 0.6 percentage points fall in the leverage ratio, which was partly offset by higher tier 1 capital of 0.3 percentage points.The change in leverage exposure was driven by 0.4 percentage points increase due to growth in the balance sheet and by a 0.2 percentage points increase from foreign currency translation differences. At 31 December 2025 , our UK minimum leverage ratio requirement was 3.25%, with an additional buffer of 0.9% - comprising a 0.7% additional leverage ratio buffer and a 0.2% countercyclical leverage ratio buffer. These buffers translated into capital values of $20.1bn and $5.8bn, respectively. We exceeded these leverage requirements throughout 2025. HSBC Holdings plc Annual Report on Form 20-F 194 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk Pillar 3 disclosure requirements Pillar 3 of the Basel regulatory framework is related to market discipline and aims to make financial services firms more transparent by requiring publication of wide-ranging information on their risks, capital and management. Ñ For further details, see our Pillar 3 Disclosures at 31 December 2025 , which is published at www.hsbc.com/investors. Liquidity and funding risk in 2025 Liquidity metrics At 31 December 2025, all of the Group’s material operating entities were above the required regulatory minimum liquidity and funding levels. Each entity maintains sufficient unencumbered liquid assets to comply with internal and local regulatory requirements. Each entity maintains a sufficient stable funding profile and is assessed using the NSFR or other appropriate metrics. In addition to regulatory metrics, we use a wide set of measures to manage our liquidity and funding profile. The Group liquidity and funding position on an average basis is analysed in the following sections. Operating entities’ liquidity At 31 Dec 2025 LCR 1 HQLA Net outflows NSFR 1 % $bn $bn % HSBC UK Bank plc (ring-fenced bank) 2 175 124 71 146 HSBC Bank plc (non-ring-fenced bank) 3 148 145 99 114 The Hongkong and Shanghai Banking Corporation – Hong Kong branch 4, 6 189 170 90 125 HSBC Singapore 5 228 37 16 168 Hang Seng Bank 322 64 20 184 HSBC Bank China 203 26 13 153 HSBC Bank USA 167 84 50 129 HSBC Continental Europe 147 100 68 148 HSBC Bank Middle East Ltd – UAE branch 232 16 7 152 HSBC Mexico 166 9 5 110 At 31 Dec 2024 HSBC UK Bank plc (ring-fenced bank) 2 190 117 61 154 HSBC Bank plc (non-ring-fenced bank) 3 148 138 93 115 The Hongkong and Shanghai Banking Corporation – Hong Kong branch 4 191 145 76 124 HSBC Singapore 5 287 32 11 184 Hang Seng Bank 299 57 19 174 HSBC Bank China 191 27 14 147 HSBC Bank USA 167 80 48 127 HSBC Continental Europe 149 82 55 139 HSBC Bank Middle East Ltd – UAE branch 251 14 6 151 HSBC Mexico 164 9 6 125 1 The LCR and NSFR ratios presented in the above table are based on average values. The LCR is the average of the preceding 12 months. The NSFR is the average of the preceding four quarters. LCR details are based on local regulations wherever applicable except the LCR for our UAE branch, which is reported on a PRA basis. NSFR details are reported based on the PRA’s NSFR rules. 2 HSBC UK Bank plc refers to the HSBC UK liquidity group, which comprises four legal entities: HSBC UK Bank plc, Marks and Spencer Financial Services plc, HSBC Private Bank (UK) Ltd and HSBC Innovation Bank Limited, managed as a single operating entity, in line with the application of UK liquidity regulation as agreed with the PRA. 3 HSBC Bank plc includes overseas branches and special purpose entities consolidated by HSBC for financial statements purposes. 4 The Hongkong and Shanghai Banking Corporation – Hong Kong branch represents the material activities of The Hongkong and Shanghai Banking Corporation Limited. It is monitored and controlled for liquidity and funding risk purposes as a stand-alone operating entity. 5 HSBC Singapore includes HSBC Bank Singapore Limited and The Hongkong and Shanghai Banking Corporation – Singapore branch. Liquidity and funding risk is monitored and controlled at country level in line with the local regulator’s approval. 6 In 4Q25, The Hongkong and Shanghai Banking Corporation – Hong Kong branch segregated $16.6bn of Level 1 high-quality liquid assets towards funding the privatisation of Hang Seng Bank. These assets were excluded from the liquid asset buffer for the purpose of LCR reporting and reduced the entity’s local LCR by c. 5.5% on an average basis. Consolidated liquidity metrics Net stable funding ratio We manage funding risk based on the PRA’s NSFR rules. The Group’s NSFR at 31 December 2025, calculated from the average of the four preceding quarters, was 143%. At 31 Dec 2025 30 Jun 2025 31 Dec 2024 $bn $bn $bn Total available stable funding ($bn) 1,621 1,572 1,523 Total required stable funding ($bn) 1,133 1,083 1,064 NSFR ratio (%) 143 145 143 Liquidity coverage ratio At 31 December 2025, the average high-quality liquid assets (‘HQLA‘) held at entity level amounted to $862bn (31 December 2024: $790bn). The Group consolidation methodology includes a deduction to reflect the impact of limitations in the transferability of entity liquidity around the Group. That resulted in an adjustment of $160bn to LCR HQLA and $5 bn to LCR inflows on an average basis. At 1 31 Dec 2025 30 Jun 2025 31 Dec 2024 $bn $bn $bn High-quality liquid assets (in entities) 862 833 790 Group LCR HQLA 702 678 649 Net outflows 512 486 471 Liquidity coverage ratio (%) 137 140 138 Adjustment for transfer restrictions 2 (165) (161) (147) 1 Group LCR numbers above are based on average values. The LCR is the average of the preceding 12 months. 2 This includes adjustments made to high-quality liquid assets and inflows in entities to reflect liquidity transfer restrictions. HSBC Holdings plc Annual Report on Form 20-F 195 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk Liquid assets After the $160bn deduction, the average Group LCR HQLA of $702bn (31 December 2024: $649bn) was held in a range of asset classes and currencies. Of these, 97% were eligible as Level 1 (31 December 2024: 95%). The following tables reflect the composition of the average liquidity pool by asset type and currency at 31 December 2025. Liquidity pool by asset type 1 Liquidity pool Level 1 2 Level 2 2 $bn $bn $bn Cash and balance at central bank 248 248 — Central and local government bonds 413 401 12 Regional government public sector entities 2 2 — International organisation and multilateral developments banks 29 29 — Covered bonds 7 2 5 Other 3 — 3 Total at 31 Dec 2025 702 682 20 Total at 31 Dec 2024 649 615 34 1 Group liquid assets numbers are based on average values. 2 As defined in the PRA Rulebook, Level 1 assets means ‘assets of extremely high liquidity and credit quality’, and Level 2 assets means ‘assets of high liquidity and credit quality’. Liquidity pool by currency 1 $ £ € HK$ Other Total $bn $bn $bn $bn $bn $bn Liquidity pool at 31 Dec 2025 232 170 136 43 121 702 Liquidity pool at 31 Dec 2024 196 170 113 47 123 649 1 Group liquid assets numbers are based on average month-end values over the preceding 12 months. Sources of funding Our primary sources of funding are customer current accounts and savings deposits payable on demand or at short notice. We issue secured and unsecured wholesale securities to supplement customer deposits, meet regulatory obligations and seek to ensure that we maintain a diversified funding profile through a balanced mix of currencies, maturities and locations of our liabilities. The following ‘Funding sources’ and ‘Funding uses’ tables provide a view of how our consolidated balance sheet is funded. In practice, all the principal operating entities are required to manage liquidity and funding risk on a stand-alone basis. The tables analyse our consolidated balance sheet according to the assets that primarily arise from operating activities and the sources of funding primarily supporting these activities. Assets and liabilities that do not arise from operating activities are presented as a net balancing source or deployment of funds . The funding risk management framework seeks to ensure operating entities maintain a diversified funding profile defined in their funding plans which are taken through regular governance, in line with globally consistent policies and standards. Diversification is achieved through a balanced mix of funding sources, tenors, currencies and geographies, seeking to mitigate concentration risks and to avoid extraordinary reliance on central banks or intra-group funding support. The framework requires entities to have policies, processes and controls for monitoring and managing funding by tenors and sources, supported by governance of limits. Entities also model cashflows from maturing short-term debts within the internal liquidity monitoring to help ensure sufficient liquidity is maintained to meet the maturing debt obligations. Funding sources (Audited) 2025 2024 $m $m Customer accounts 1,786,828 1,654,955 Deposits by banks 97,952 73,997 Repurchase agreements – non-trading 204,974 180,880 Debt securities in issue 99,675 105,785 Cash collateral, margin, settlement accounts and items in course of transmission to other banks 91,087 82,732 Liabilities of disposal groups held for sale 23,382 29,011 Subordinated liabilities 28,406 25,958 Financial liabilities designated at fair value 158,456 138,727 Insurance contract liabilities 122,955 107,629 Trading liabilities 72,122 65,982 –  repos 13,113 14,806 –  stock lending 6,250 3,525 –  other trading liabilities 52,759 47,651 Total equity 205,666 192,273 Other balance sheet liabilities 341,531 359,119 At 31 Dec 3,233,034 3,017,048 Funding uses (Audited) 2025 2024 $m $m Loans and advances to customers 988,399 930,658 Loans and advances to banks 108,462 102,039 Reverse repurchase agreements – non-trading 298,392 252,549 Cash collateral, margin, settlement accounts and items in course of collection from other banks 87,667 78,538 Assets held for sale 11,115 27,234 Trading assets 366,153 314,842 –  reverse repos 18,449 16,823 –  stock borrowing 14,947 8,374 –  other trading assets 332,757 289,645 Financial investments 567,211 493,166 Cash and balances with central banks 242,859 267,674 Other balance sheet assets 562,776 550,348 At 31 Dec 3,233,034 3,017,048 HSBC Holdings plc Annual Report on Form 20-F 196 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk Wholesale term debt maturity profile The maturity profile of our wholesale term debt obligations is set out in the following table. The balances in the table are not directly comparable with those in the consolidated balance sheet because the table presents gross cash flows relating to principal payments and not the balance sheet carrying value, which includes debt securities and subordinated liabilities measured at fair value. Wholesale funding cash flows payable by HSBC under financial liabilities by remaining contractual maturities 1 Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 6 months Due over 6 months but not more than 9 months Due over 9 months but not more than 1 year Due over 1 year but not more than 2 years Due over 2 years but not more than 5 years Due over 5 years Total $m $m $m $m $m $m $m $m $m Debt securities issued 14,531 12,338 14,004 7,561 8,780 26,365 70,542 65,835 219,956 –  unsecured CDs and CP 5,729 4,484 6,781 4,211 5,198 1,855 999 570 29,827 –  unsecured senior MTNs 5,835 6,262 5,020 1,853 1,416 17,953 52,645 53,455 144,439 –  unsecured senior structured notes 2,459 1,060 2,037 1,150 1,739 5,572 11,145 9,164 34,326 –  secured covered bonds — — — — — 671 1,550 — 2,221 –  secured asset-backed commercial paper 486 — — — — — — — 486 –  secured ABS 22 43 62 58 338 201 693 1,401 2,818 –  others — 489 104 289 89 113 3,510 1,245 5,839 Subordinated liabilities — — — — 892 874 2,049 34,541 38,356 –  subordinated debt securities — — — — 892 874 2,049 33,602 37,417 –  preferred securities — — — — — — — 939 939 At 31 Dec 2025 14,531 12,338 14,004 7,561 9,672 27,239 72,591 100,376 258,312 Debt securities issued 14,260 15,011 13,841 10,235 11,644 29,639 62,434 53,814 210,878 –  unsecured CDs and CP 5,346 7,803 10,495 6,623 6,829 662 1,787 1,598 41,143 –  unsecured senior MTNs 7,528 3,351 1,014 1,269 2,736 21,593 47,236 42,899 127,626 –  unsecured senior structured notes 874 1,826 2,258 1,457 1,526 6,055 9,160 6,520 29,676 –  secured covered bonds — — — — — — 1,254 — 1,254 –  secured asset-backed commercial paper 488 — — — — — — — 488 –  secured ABS 24 47 67 64 61 664 520 864 2,311 –  others — 1,984 7 822 492 665 2,477 1,933 8,380 Subordinated liabilities — — 1,737 1,030 — 892 2,694 30,349 36,702 –  subordinated debt securities — — 1,737 1,030 — 892 2,694 29,471 35,824 –  preferred securities — — — — — — — 878 878 At 31 Dec 2024 14,260 15,011 15,578 11,265 11,644 30,531 65,128 84,163 247,580 1 Excludes financial liabilities of disposal groups. Structural foreign exchange risk in 2025 Structural foreign exchange exposures represent net assets or capital investments in subsidiaries, branches, joint arrangements or associates, together with any associated hedges, the functional currencies of which are currencies other than the US dollar. Exchange differences on structural exposures are usually recognised in ‘other comprehensive income’. Net structural foreign exchange exposures 2025 Currency of structural exposure Net investment in foreign operations (excl non-controlling interest) Net investment hedges Structural foreign exchange exposures (pre- economic hedges) Economic hedges – structural FX hedges 1 Economic hedges – equity securities (AT1) 2 Net structural foreign exchange exposures $m $m $m $m $m $m Hong Kong dollars 45,486 (5,737) 39,749 (9,905) — 29,844 Pounds sterling 51,315 (17,254) 34,061 — (1,341) 32,720 Chinese renminbi 36,084 (7,622) 28,462 (1,078) — 27,384 Euros 18,017 (4,162) 13,855 — (1,466) 12,389 Indian rupees 7,747 (3,264) 4,483 — — 4,483 Mexican pesos 4,873 — 4,873 — — 4,873 Saudi riyals 5,132 — 5,132 — — 5,132 UAE dirhams 5,436 (1,176) 4,260 (2,691) — 1,569 Malaysian ringgit 3,473 (1,727) 1,746 — — 1,746 Singapore dollars 2,711 (493) 2,218 1,728 (1,770) 2,176 Australian dollars 2,367 — 2,367 — — 2,367 Taiwanese dollars 2,473 (1,387) 1,086 — — 1,086 Indonesian rupiah 1,561 (501) 1,060 (98) — 962 Swiss francs 1,549 (617) 932 (248) — 684 Korean won 1,326 (856) 470 — — 470 Thai baht 1,048 (757) 291 — — 291 Egyptian pound 1,125 — 1,125 — — 1,125 Qatari rial 736 (172) 564 (299) — 265 Vietnamese dong 767 — 767 — — 767 Others, each less than $700m 4,692 (658) 4,034 — — 4,034 At 31 Dec 197,918 (46,383) 151,535 (12,591) (4,577) 134,367 HSBC Holdings plc Annual Report on Form 20-F 197 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk Net structural foreign exchange exposures (continued) 2024 Currency of structural exposure Net investment in foreign operations (excl non-controlling interest) Net investment hedges Structural foreign exchange exposures (pre- economic hedges) Economic hedges – structural FX hedges 1 Economic hedges – equity securities (AT1) 2 Net structural foreign exchange exposures $m $m $m $m $m $m Hong Kong dollars 40,106 (5,841) 34,265 (9,861) — 24,404 Pounds sterling 46,462 (15,024) 31,438 — (1,254) 30,184 Chinese renminbi 35,032 (4,725) 30,307 (1,080) — 29,227 Euros 17,391 (2,013) 15,378 — (1,297) 14,081 Indian rupees 7,056 (1,973) 5,083 — — 5,083 Mexican pesos 3,991 — 3,991 — — 3,991 Saudi riyals 4,675 — 4,675 — — 4,675 UAE dirhams 5,264 (893) 4,371 (2,543) — 1,828 Malaysian ringgit 3,036 — 3,036 — — 3,036 Singapore dollars 2,405 — 2,405 1,092 (1,089) 2,408 Australian dollars 2,126 — 2,126 — — 2,126 Taiwanese dollars 2,199 (1,015) 1,184 — — 1,184 Indonesian rupiah 1,541 (533) 1,008 — — 1,008 Swiss francs 1,096 (541) 555 — — 555 Korean won 1,204 (756) 448 — — 448 Thai baht 976 (460) 516 — — 516 Egyptian pound 891 — 891 — — 891 Qatari rial 728 (97) 631 (299) — 332 Vietnamese dong 769 — 769 — — 769 Others, each less than $700m 4,370 (463) 3,907 — — 3,907 At 31 Dec 181,318 (34,334) 146,984 (12,691) (3,640) 130,653 1 Represents hedges that do not qualify as net investment hedges for accounting purposes. The SGD position represents the hedge against our SGD AT1 issuances. 2 Represents foreign currency-denominated preference share and AT1 instruments. These are accounted for at historical cost under IFRS Accounting Standards and do not qualify as net investment hedges for accounting purposes. The gain or loss arising from changes in the US dollar value of these instruments is recognised on redemption in retained earnings. Ñ For a definition of structural foreign exchange exposures, see page 190 . Interest rate risk in the banking book in 2025 Banking net interest income sensitivity Banking NII sensitivity is the sensitivity of our banking net interest income to interest rate shocks. This metric includes the sensitivity arising from the use of banking book liabilities to fund trading assets, as well as the impacts of vanilla foreign exchange swaps to optimise cash management across the Group. It is aligned with the presentation in the Group’s financial disclosures of banking NII as an alternative performance measure intended to approximate the Group’s banking revenue that is directly impacted by changes in interest rates. The following tables set out the assessed impact to a hypothetical base case projection of our banking NII under an immediate shock of 100bps to the current market-implied path of interest rates across all currencies on 31 December 2025 (effects in the first, second and third years). For example, Year 3 shows the impact of an immediate rate shock on the banking NII projected for the third year. The banking NII sensitivities shown represent a hypothetical simulation of the base case banking NII, assuming a static balance sheet (specifically no assumed migration from current account to term deposits), and no management actions from Global Treasury. This also incorporates the effect of interest rate behaviouralisation, prepayment of mortgages and commercial margins. The sensitivity calculations exclude pensions, insurance exposures, and our interests in associates. All forecasted market rates are based on implied forward rates from the reporting date. Customer pricing includes flooring where there are contractual obligations. As the market and policy rates move, the degree to which these changes are passed on to customers will vary based on several factors, including the absolute level of market interest rates, regulatory and contractual frameworks, and competitive dynamics. To aid comparability between markets, we have simplified the basis of preparation for our disclosure and have used a 50% pass-on assumption for major entities on certain interest-bearing deposits. Our asset pass-on assumptions are largely in line with our contractual agreements or established market practice, which typically results in a significant portion of interest rate changes being passed on. An immediate interest rate rise of 100bps would increase projected banking NII by $2.4bn. An immediate interest rate fall of 100bps would decrease projected banking NII by $3.4bn. The sensitivity of banking NII for the 12 months as at 31 December 2025 increased by $0.3bn in the plus 100bps parallel shock and by $0.5bn in the minus 100bps parallel shock, when compared with 31 December 2024. The increase in sensitivities was primarily driven by deposit growth and the impact of rate floors due to lower prevailing market rates offset by stabilisation initiatives executed during the year. Ñ For further details of measurement of interest rate risk in the banking book, see page 190 . HSBC Holdings plc Annual Report on Form 20-F 198 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk Banking NII sensitivity to an instantaneous change in yield curves (12 months) – Year 1 sensitivity by currency Currency $ HK$ £ € Other Total $m $m $m $m $m $m Change in Jan 2026 to Dec 2026 (based on balance sheet at 31 Dec 2025 ) +100bps parallel 798 310 351 91 871 2,421 -100bps parallel (1,184) (606) (499) (129) (971) (3,389) Change in Jan 2025 to Dec 2025 (based on balance sheet at 31 Dec 2024) +100bps parallel 572 220 219 301 821 2,133 -100bps parallel (862) (403) (353) (314) (954) (2,886) Banking NII sensitivity to an instantaneous down 100bps parallel change in yield curves – Year 2 and Year 3 sensitivity by currency Currency $ HK$ £ € Other Total $m $m $m $m $m $m Change in banking NII (based on balance sheet at 31 Dec 2025 ) Year 2 (Jan 2027 to Dec 2027) (1,327) (745) (849) (223) (1,331) (4,475) Year 3 (Jan 2028 to Dec 2028) (1,559) (906) (1,275) (274) (1,499) (5,513) Change in banking NII (based on balance sheet at 31 Dec 2024) Year 2 (Jan 2026 to Dec 2026) (1,226) (509) (563) (444) (1,333) (4,075) Year 3 (Jan 2027 to Dec 2027) (1,531) (550) (1,022) (504) (1,449) (5,056) Non-trading portfolios Value at risk of non-trading portfolios Non-trading portfolios comprise positions that primarily arise from the interest rate management of our retail and wholesale banking assets and liabilities and financial investments measured at fair value through other comprehensive income (‘FVOCI’) or at amortised cost. The use of value at risk (‘VaR’) is integrated into the market risk management of non-trading portfolios to have a complete picture of risk, complementing risk sensitivity analysis. VaR of non-trading portfolios is a technique for estimating potential losses on risk positions as a result of movements in market rates and prices over a specified time horizon and to a given level of confidence. Our models predominantly rely on historical simulations incorporating: – historical market rates and prices, calculated with reference to interest rates, credit spreads and associated volatilities; – potential market movements derived from data covering the past two years; and – calculations to a 99% confidence level with a 10-day holding period. Although a valuable guide to risk, VaR is used for non-trading portfolios with awareness of its limitations. For example: – Historical data is used to estimate future market movements, and may not cover all potential events, particularly those that are extreme in nature. As the model is calibrated on the last 500 business days, it does not adjust instantly to a change in market regime. – The 10-day holding period for risk management purposes of non- trading books is an indication and does not reflect the actual time period needed to hedge or liquidate positions. – The use of a 99% confidence level does not consider losses that might occur beyond this level of confidence. Non-trading VaR includes non-trading financial instruments held in portfolios managed by Global Treasury. The management of interest rate risk in the banking book is described further in ‘Banking net interest income sensitivity’ on page 197 . The interest rate risk on the fixed-rate securities issued by HSBC Holdings is not included in the Group non-trading VaR. The management of this risk is described on page 200 . Insurance operations were excluded from non-trading VaR as of 30 June 2025 which resulted in an immaterial impact. Details on insurance operations can be found on page 215 and the market risk impact of insurance operations on page 217 . Non-trading VaR also excludes the equity risk on securities held at fair value and non-trading book foreign exchange risk. The weekly levels of total non-trading VaR in 2025 are set out in the graph below. Weekly VaR (non-trading portfolios), 99% 10 day ($m) HSBC Holdings plc Annual Report on Form 20-F 199 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk The Group non-trading VaR for 2025 is shown in the table below. Non-trading VaR, 99% 10 day (Audited) Interest rate Credit spread Portfolio diversification 1 Total 2 $m $m $m $m Balance at 31 Dec 2025 499.6 149.6 ( 102.5 ) 546.6 Average 465.2 190.8 ( 115.8 ) 540.1 Maximum 575.3 254.6 617.5 Minimum 378.9 93.9 458.0 Balance at 31 Dec 2024 528.4 246.1 ( 220.7 ) 553.8 Average 603.7 315.1 ( 222.9 ) 695.8 Maximum 1,000.6 369.1 1,097.6 Minimum 292.1 242.4 408.7 1 Portfolio diversification is the market risk dispersion effect of holding a portfolio containing different risk types. It represents the reduction in unsystematic market risk that occurs when combining a number of different risk types – such as interest rate and credit spreads – together in one portfolio. It is measured as the difference between the sum of the VaR by individual risk type and the combined total VaR. A negative number represents the benefit of portfolio diversification. As the maximum and minimum occurs on different days for different risk types, it is not meaningful to calculate a portfolio diversification benefit for these measures. 2 The total VaR is non-additive across risk types due to diversification effects. The VaR for non-trading activity remained stable, decreasing by $7m due to lower historical shocks in our two-year historical window, largely offset by an increase in the duration risk of Global Treasury’s portfolios. The average portfolio diversification effect between interest rate and credit spread exposure decreased from $223m to $116m, mainly due to higher correlations between the two asset classes. The reduction in credit spread VaR at the end of September was the result of volatile scenarios dropping out of the two-year historical window. Non-trading VaR is managed and controlled through a limit approved by the Group Chief Risk and Compliance Officer for HSBC Holdings. Sensitivity of capital and reserves The Group holds various portfolios of securities under a hold-to-collect- and-sell business model, of which the most material is the portfolio of high quality assets held by Global Treasury for contingent liquidity and NII stabilisation purposes. These portfolios, together with any associated derivatives in designated hedge accounting relationships, are accounted for at fair value through comprehensive income, and changes in mark-to-market value have an impact on CET1. We use a variety of tools, including risk sensitivities and VaR measures, to manage the risk of these portfolios. The table below measures the sensitivity of our hold-to-collect-and-sell portfolios to an instantaneous 100 basis point increase in interest rates, based on the risk sensitivity of a shift in value for a 1 basis point (‘bps‘) parallel movement in interest rates. Sensitivity of hold-to-collect-and-sell reserves to interest rate movements $m At 31 Dec 2025 +100 basis point parallel move in all yield curves (4,424) As a percentage of total shareholders’ equity (2.23)% At 31 Dec 2024 +100 basis point parallel move in all yield curves (3,433) As a percentage of total shareholders’ equity (1.86)% T he increase in the sensitivity of the portfolio during 2025 was mainly driven by an increase in NII stabilisation hedging in line with our strategy. While this hedging has increased the capital sensitivity of the portfolio it has the effect of further dampening the volatility of our banking NII over time and through the cycle. The figures in the table above do not take into account the effects of interest rate convexity. The portfolio mostly comprises vanilla sovereign bonds in a variety of currencies and the primary risk is interest rate duration risk, although the portfolio also generates asset swap, credit spread and asset spread risks that are managed within appetite as part of our risk management framework. A minus 100bps shock would lead to an approximately symmetrical gain. Alongside our monitoring of the hold-to-collect-and-sell reserve sensitivity, we also monitor the sensitivity of reported cash flow hedging reserves to interest rate movements annually by assessing the expected reduction in the valuation of cash flow hedges due to an instantaneous 100bps increase in all yield curves. The sensitivity is indicative and based on a simplified scenario. T he following table details the sensitivity of our cash flow hedging reserve which remained stable compared with 31 December 2024 and continued to be mainly driven by our NII stabilisation activity. Our exposure to fixed rate pound sterling hedges continued to be the largest in size followed by Hong Kong dollar and United States dollar hedges. A minus 100bps shock would lead to a largely symmetrical gain. Sensitivity of cash flow hedging reported reserves to interest rate movements $m At 31 Dec 2025 +100 basis point parallel move in all yield curves (4,438) As a percentage of total shareholders’ equity (2.24)% At 31 Dec 2024 +100 basis point parallel move in all yield curves (4,496) As a percentage of total shareholders’ equity (2.43)% Third-party assets in Markets Treasury Third-party assets in Markets Treasury increased by 6% compared with 31 December 2024. The net increase of $55bn is partly reflective of higher commercial surpluses during the year, with the increase of $68bn in ‘Financial investments’ and the decrease of $25bn in ‘Cash and balances at central banks’ largely driven by NII stabilisation activity. HSBC Holdings plc Annual Report on Form 20-F 200 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Treasury risk Third-party assets in Markets Treasury 2025 2024 $m $m Cash and balances at central banks 236,259 261,284 Trading assets (8) 163 Loans and advances: –  to banks 66,614 66,518 –  to customers 1,113 743 Reverse repurchase agreements 58,191 47,812 Financial investments 533,519 465,123 Other 12,774 12,232 At 31 Dec 908,462 853,875 Defined benefit pension plans Market risk arises within our defined benefit pension plans to the extent that the obligations of the plans are not fully matched by assets with determinable cash flows. Ñ For details of our defined benefit plans, including asset allocation, see Note 5 on the financial statements, and for pension risk management, see page 191 . Additional market risk measures applicable only to the parent company HSBC Holdings monitors and manages foreign exchange risk and interest rate risk. In order to manage interest rate risk, HSBC Holdings uses the projected sensitivity of its NII to future changes in yield curves. Foreign exchange risk HSBC Holdings’ foreign exchange exposures derive almost entirely from the execution of structural foreign exchange hedges on behalf of the Group. At 31 December 2025 , HSBC Holdings had forward foreign exchange contracts of $34.4bn (2024: $33.9bn) to manage the Group’s structural foreign exchange exposures. Ñ For further details of our Group structural foreign exchange exposures, see page 196 . Sensitivity of banking net interest income Banking NII sensitivity is the assessed impact to a hypothetical base case projection of our banking NII under an immediate shock of 100bps to the current market-implied path of interest rates across all currencies on 31 December 2025. Banking NII sensitivity includes the impact of AT1 instruments as well as vanilla foreign exchange swaps to optimise cash management, with the assumption of a static balance sheet and no management actions from Global Treasury. The sensitivity assumes that any issuance where HSBC Holdings has an option to redeem at a future call date is called at that date. An immediate interest rate rise of 100bps would decrease projected banking NII for the 12 months to 31 December 2026 by $163m. Conversely, an immediate fall of 100bps would increase projected banking NII for the 12 months to 31 December 2026 by $163m. This compares with the prior year sensitivities for the 12 months to 31 December 2025 of a $156m decrease, and a $156m increase, respectively. Overall the banking NII sensitivity is mainly driven by interest rate sensitive liabilities funding equity (non-interest bearing) investments in subsidiaries. Market risk Ñ See page 138 for our definition of Market risk. Market risk arises from both trading portfolios and non-trading portfolios. Trading portfolios comprise positions held for client servicing and market-making, with the intention of short-term resale and/or to hedge risks resulting from such positions. Ñ For further details of market risk in non-trading portfolios, see page 198 . Market risk management Governance and structure The following table summarises the main business areas where trading market risks reside and the market risk measures used to monitor and limit exposures. Risk types Trading risk – Foreign exchange and commodities – Interest rates – Credit spreads – Equities Global business CIB Risk measure Value at risk | Sensitivity | Stress testing The objective of our risk management policies and measurement techniques is to manage and control market risk exposures through prudent oversight, to ensure that our market risk profile aligns with our established risk appetite and strategic objectives. Market risk is managed and controlled through limits approved by the Group’s senior management. These limits are allocated across business lines and to the Group’s legal entities. Each major operating entity has an independent market risk management and control sub- function, which is responsible for measuring, monitoring and reporting market risk exposures against limits on a daily basis. Each operating entity is required to assess the market risks arising in its business and to transfer them either to its local Markets and Securities Services or Markets Treasury unit for management, or to separate books managed under the supervision of the local ALCO. The Traded Risk function enforces the controls around trading in permissible instruments approved for each site as well as changes that follow the approval of new products. Traded Risk also restricts trading in the more complex derivative products to only those offices with appropriate levels of product expertise and control systems. Key risk management processes Monitoring and limiting market risk exposures Our objective is to manage and control market risk exposures while maintaining a market profile consistent with our risk appetite. We use a range of tools to monitor and limit market risk exposures including sensitivity analysis, VaR and stress testing. Sensitivity analysis Sensitivity analysis measures the impact of movements in individual market factors on specific instruments or portfolios, including interest rates, foreign exchange rates and equity prices. We use sensitivity measures to monitor the market risk positions within each risk type. Granular sensitivity limits are set for trading desks with consideration of market liquidity, customer demand and capital constraints, among other factors. HSBC Holdings plc Annual Report on Form 20-F 201 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Market risk Value at risk (Audited) VaR is a technique for estimating potential losses on risk positions as a result of movements in market rates and prices over a specified time horizon and to a given level of confidence. The use of VaR is integrated into market risk management and calculated for all trading positions regardless of how we capitalise them. Our models are predominantly based on historical simulation that incorporates the following features: – historical market rates and prices, which are calculated with reference to foreign exchange rates, commodity prices, interest rates, equity prices and the associated volatilities; – potential market movements that are calculated with reference to data from the past two years; and – calculations to a 99% confidence level and using a one-day holding period. The models also incorporate the effect of option features on the underlying exposures. The nature of the VaR models means that an increase in observed market volatility will lead to an increase in VaR without any changes in the underlying positions. VaR model limitations Although a valuable guide to risk, VaR is used with awareness of its limitations. For example: – The use of historical data as a proxy for estimating future market moves may not encompass all potential market events, particularly those that are extreme in nature. As the model is calibrated on the last 500 business days, it does not adjust instantaneously to a change in the market regime. – The use of a one-day holding period for risk management purposes of trading books assumes that this short period is sufficient to hedge or liquidate all positions. – The use of a 99% confidence level by definition does not take into account losses that might occur beyond this level of confidence. – VaR is calculated on the basis of exposures outstanding at the close of business and therefore does not reflect intra-day exposures. Risk not in VaR framework The risks not in VaR (‘RNIV’) framework captures and capitalises material market risks that are not adequately covered in the VaR model. Risk factors are reviewed on a regular basis and are either incorporated directly into the VaR models, where possible, or quantified through either the VaR-based RNIV approach or a stress test approach within the RNIV framework. While VaR-based RNIVs are calculated by using historical scenarios, stress-type RNIVs are estimated on the basis of stress scenarios whose severity is calibrated to be in line with the capital adequacy requirements. The outcome of the VaR-based RNIV approach is included in the overall VaR calculation but excluded from the VaR measure used for regulatory back-testing. Stress-type RNIVs include a deal contingent derivatives capital charge to capture risk for these transactions and a de-peg risk measure to capture risk to pegged and heavily-managed currencies. Stress testing Stress testing is an important procedure that is integrated into our market risk management framework to evaluate the potential impact on portfolio values of more extreme, although plausible, events or movements in a set of financial variables. In such scenarios, losses can be much greater than those predicted by VaR modelling. Stress testing and reverse stress testing provide senior management with insights regarding the ‘tail risk’ beyond VaR. Stress testing is implemented at legal entity, regional and overall Group levels. A set of scenarios is used consistently across all regions within the Group. Market risk stress testing incorporates both historical and hypothetical events. Market risk reverse stress tests are designed to identify vulnerabilities in our portfolios by looking for scenarios that lead to loss levels considered severe for the relevant portfolio. These scenarios may be local or idiosyncratic in nature and complement the systematic top-down stress testing. The risk appetite around potential stress losses for the Group is set and monitored against limits. Back-testing We routinely validate the accuracy of our VaR models by back-testing the VaR metric against both actual and hypothetical profit and loss. Hypothetical profit and loss excludes non-modelled items such as fees, commissions and revenue related to intra-day transactions. The hypothetical profit and loss reflects the profit and loss that would be realised if positions were held constant from the end of one trading day to the end of the next. This measure of profit and loss does not align with how risk is dynamically hedged, and is therefore not necessarily indicative of the actual performance of the business. The number of hypothetical loss back-testing exceptions, together with a number of other indicators, is used to assess model performance and to consider whether enhanced internal monitoring of a VaR model is required. We back-test our VaR at set levels of our Group entity hierarchy. During 2025, the Group experienced one back-testing exception against hypothetical losses. This exception was mainly driven by heightened market volatility observed after tariff policy announcements, with equity volatilities and credit spreads as the main contributing risk factors. Key developments in 2025 There were no material changes to our policies and practices for the management of market risk in 2025 . We continued to manage market risk prudently during 2025. Market risk was managed using a complementary set of risk measures and limits, including stress testing and scenario analysis. Main sensitivity exposures and VaR remained within appetite as the business pursued its core market-making activity in support of our customers. We employed stress testing tools to assess a range of geopolitical and technical scenarios that were relevant during the year. Trading portfolios Value at risk of the trading portfolios Trading VaR is predominantly generated by Markets and Securities Services. As of 31 December 2025, Trading VaR stood at $38.9m, a small increase compared with $38.3m as of 31 December 2024. At the end of December 2025, Trading VaR was mainly driven by exposures to foreign exchange and interest rate risk factors from the Global Foreign Exchange business line to facilitate client-driven activity. Trading VaR peaked at $57.1m in January 2025, driven by exposures to US dollar interest rates. Trading VaR reduced during the rest of 2025 mainly as a result of some volatile interest rate scenarios rolling off the VaR scenario window. HSBC Holdings plc Annual Report on Form 20-F 202 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Market risk The daily levels of total trading VaR during 2025 are set out in the graph below. Daily VaR (trading portfolios), 99% 1 day ($m) The Group trading VaR for the year is shown in the table below. Trading VaR, 99% 1 day 1 (Audited) At 31 Dec 2025 At 31 Dec 2024 Foreign exchange and commodity Interest rate Equity Credit spread Portfolio diversification 1 Total 2 Foreign exchange and commodity Interest rate Equity Credit spread Portfolio diversification 1 Total 2 $m $m $m $m $m $m $m $m $m $m $m $m Balance 13.9 18.9 17.1 8.5 ( 19.5 ) 38.9 14.6 34.9 16.3 8.2 ( 35.7 ) 38.3 Average 13.6 27.5 16.3 10.1 ( 29.1 ) 38.5 15.2 48.3 14.8 9.9 ( 35.1 ) 53.1 Maximum 26.9 54.9 24.6 17.9 57.1 29.8 78.1 20.5 13.1 83.3 Minimum 6.2 17.1 12.3 6.4 27.3 6.9 24.8 12.7 6.6 37.0 1 See page 199 for our definition of ‘Portfolio diversification’. 2 The total VaR is non-additive across risk types due to diversification effects. The table below shows trading VaR at a 99% confidence level compared with trading VaR at a 95% confidence level at 31 December 2025 . This comparison facilitates the benchmarking of the trading VaR, which can be stated at different confidence levels, with financial institution peers. The 95% VaR is unaudited. Comparison of trading VaR, 99% 1 day vs trading VaR, 95% 1 day Trading VaR, 99% 1 day Trading VaR, 95% 1 day $m $m Balance at 31 Dec 2025 38.9 21.0 Average 38.5 23.3 Maximum 57.1 31.4 Minimum 27.3 18.1 Balance at 31 Dec 2024 38.3 23.4 Average 53.1 33.0 Maximum 83.3 48.9 Minimum 37.0 22.0 Market risk balance sheet linkages The following balance sheet lines in the Group’s consolidated position are subject to market risk: Trading assets and liabilities The Group’s trading assets and liabilities are in almost all cases originated by CIB. Other than a limited number of exceptions, these assets and liabilities are treated as traded risk for the purposes of market risk management. The exceptions primarily arise in the Banking business, where the short-term acquisition and disposal of assets is linked to other non-trading-related activities, such as loan origination. Derivative assets and liabilities We undertake derivative activity for three primary purposes: to create risk management solutions for clients, to manage the portfolio risks arising from client business, and to manage and hedge our own risks. Most of our derivative exposures arise from sales and trading activities within CIB. The assets and liabilities included in trading VaR give rise to a large proportion of the income included in net income from financial instruments held for trading or managed on a fair value basis. Adjustments to trading income such as valuation adjustments are not measured by the trading VaR model. Ñ For information on the accounting policies applied to financial instruments at fair value, see Note 1 .2 on the financial statements. HSBC Holdings plc Annual Report on Form 20-F 203 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk TCFD Our climate risk approach identifies two primary drivers of climate risk: – physical risk, which arises from the increased frequency and severity of extreme weather events, such as hurricanes and floods, or chronic gradual shifts in weather patterns or rises in the sea level; and – transition risk, which arises from the process of moving to a net zero economy, including changes in government policy and legislation, technology, market demand, and reputational implications triggered by a change in stakeholder expectations, action or inaction. We continue to identify a thematic issue related to climate risk that could manifest as reputational, regulatory compliance, and litigation risks: the risk of greenwashing. This risk arises from knowingly or unknowingly making inaccurate, unclear, misleading or unsubstantiated claims regarding sustainability to our stakeholders. Net zero alignment risk had previously been identified as a thematic issue and is now replaced and managed within the new risk type, sustainability execution risk. Ñ See page 138 for our definition of climate risk. Approach We acknowledge that the physical effects of climate change and the shift towards a net zero economy may pose substantial financial risks to companies, investors, and the financial system. HSBC may encounter climate risks directly or indirectly through our customer relationships, potentially leading to both financial and non-financial consequences. Our climate risk approach aims to effectively manage the material risks that could impact our operations, financial performance and stability, and reputation. It is informed by the evolving expectations of our regulators and is aligned to our Group-wide risk management framework, which sets out how we identify, assess and manage our risks across our three lines of defence. We continue to work to enhance our climate risk capabilities across our businesses by prioritising sectors, portfolios and counterparties with the highest impacts. Recognising this as a long-term iterative process, we aim to expand our coverage and integrate more advanced data, climate analytics, frameworks and tools, while adapting to emerging industry best practices and climate-related regulations. We regularly reflect on the evolving nature of financial and non-financial climate risks in the real world to improve the integration of climate risk factors into strategic planning, transactions, and decision-making across our operations. Our current processes for managing climate and sustainability-related targets, net zero transition plans, and climate strategy include conducting impact assessments of HSBC's M&A activities. The tables below provide an overview of the risk drivers and thematic issue considered within HSBC’s climate risk approach. Climate risk – risk drivers Details Potential impacts Time horizons Physical Acute Increased frequency and severity of weather events causing disruption to business operations. – Decreased real estate values or stranded assets. – Decreased household income and wealth. – Increased costs of legal and compliance. – Increased public scrutiny. – Decreased profitability. – Lower asset performance. Short-term Medium-term Long-term Chronic Longer-term shifts in climate patterns (e.g. sustained higher temperatures, sea level rise, shifting monsoons or chronic heat waves). Transition Policy and legal Mandates for, and regulation of products, and services and/or policy support for low-carbon alternatives. Litigation from parties who have suffered loss and damage from climate impacts. Technology Replacement of existing products with lower emissions options. End-demand (market) Changing consumer demand from individuals and corporates. Reputational Increased scrutiny following a change in stakeholder perceptions of climate-related action or inaction, and diverging national and political agendas. Climate risk – thematic issue Risk of greenwashing Firm Making inaccurate, unclear, misleading or unsubstantiated claims in relation to our sustainability ambitions, targets and commitments, as well as the reporting of our performance towards them. Product Making inaccurate, unclear, misleading or unsubstantiated claims in relation to products or services offered to clients that have stated sustainability objectives, characteristics, impacts or features. Client Making inaccurate, unclear, misleading or unsubstantiated claims as a consequence of our relationships with clients or transactions we undertake with them, where their sustainability commitments or related performance are misrepresented or are not aligned to our own commitments. Our annual climate risk materiality assessment helps us to understand how climate risk may impact across HSBC’s risk taxonomy. It assesses the type of impact, likelihood and severity over a 12-month period, and also considers forward-looking risk impacts. It is used to support policy, control enhancements, and scenario analysis. For further details of scenario analysis and the definition of the time horizons used for assessing potential risks, see page 206 . Climate risk drivers Credit risk Traded risk Reputational risk Regulatory compliance risk Resilience risk Other financial and non-financial risk types Physical risk u u u u Transition risk u u u u u u HSBC Holdings plc Annual Report on Form 20-F 204 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk Climate risk management Key developments in 2025 We continue to develop our climate risk management capabilities. The following outlines key developments in 2025 : – We have enhanced our approach to managing our financed emission targets in our wholesale portfolio, through developing portfolio steering capabilities and revenue at risk assessments. – We enhanced our approach to assessing the impact of climate change on capital, focusing on credit, traded and operational risk. – W e enhanced our internal climate scenario analysis, including through improvements to input data and models. For further details of scenario analysis, see page 206 . – We enhanced our approach to managing and mitigating the risk of greenwashing. – We revised our climate risk guidelines for relationship managers to further embed climate risk considerations into credit risk assessments. While we have made progress, further work remains, including the need to develop additional metrics and tools to measure our exposure to climate-related risks. Governance and structure The Board takes overall supervisory responsibility for our ESG strategy, overseeing executive management in developing the approach, execution and associated reporting. The Group Chief Risk and Compliance Officer is the senior manager responsible for the management of climate risk under the UK Senior Managers Regime. The Group Reputational Risk Committee provides recommendations and advice on significant reputational risk matters with impacts across the Group. The Environmental Risk Steering Meeting provides oversight of environmental risk and the risk of greenwashing. Equivalent forums have been established at a regional level, and we will continue to develop our approach to governance and oversight. The Group Risk Management Meeting and the Group Risk Committee receive updates on our climate risk profile. Ñ For further details of the Group’s ESG governance structure, see page 57 . Risk appetite Our climate risk appetite statement forms part of the Group’s risk appetite statement and is approved and overseen by the Board. This supports the business in delivering our net zero ambition effectively and sustainably, and is reviewed annually, or sooner should a breach occur . Climate risk indicators are reported on a quarterly basis for oversight by the Group Risk Management Meeting and the Group Risk Committee. Policies, processes and controls We continue to update and integrate climate risk into policies, processes and controls across many areas of our organisation. Ñ For further details of how we manage climate risk across our business segments, see page 49 . Embedding our climate risk approach The below details how we have embedded the management of climate risk across key risk types. For further details of our internal scenario analysis, see ‘Insights from climate scenario analysis’ on page 206 . Wholesale credit risk We have metrics in place to monitor the exposure of our wholesale corporate lending portfolio to six high transition risk sectors, as shown in the below table. As at 31 December 2025, the overall exposure to the six high transition risk sectors was 17.5% of the total gross carrying amount of wholesale loans and advances. These disclosures cover the whole of the value chain of the sector. The sector classifications are based on internal HSBC definitions and are applied on a group of counterparties, which can be judgemental in nature. We use publicly available data, as well as internal data and input from subject matter experts to determine the appropriate sector. The sector classifications are subject to ongoing data quality improvements  and continuous enhancement of our processes. The data will continue to be refined in future years. Our relationship managers engage with our material wholesale customers, including those in higher transition risk sectors, through a transition engagement questionnaire (‘TEQ’). The TEQ covers all geographies, and it helps to gather information and assess our wholesale customers’ business model alignment to a net zero transition and their exposure to physical and transition risks. We use the responses to the questionnaire to support risk assessments of our material wholesale customers. Our credit policies require that relationship managers comment on climate risk factors in credit applications for new money requests and annual credit reviews. Our credit policies also require manual credit risk rating overrides if climate is deemed to have a material impact on credit risk under 12 months if not already captured under the original credit risk rating. In 2025, we continued to develop our approach towards credit risk management, and refine climate risk guidelines for relationship managers to further embed climate risk considerations into credit risk assessments. Key challenges for further embedding climate risk into credit risk management relate to the availability of adequate physical risk data to assess impacts on our wholesale customers. HSBC Holdings plc Annual Report on Form 20-F 205 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk Wholesale loan exposure to high transition risk sectors at 31 December 2025 Units Automotive Chemicals Construction, Contracting & Building Materials Metals and mining Oil and gas Power and utilities Total Wholesale loan exposure 1,2,3,4 $bn 20 12 19 17 18 25 111 1    Amounts shown in the table also include green and other sustainable finance loans, which support the transition to the net zero economy. The methodology for quantifying our exposure to high transition risk sectors and the transition risk metrics will evolve over time as more data becomes available and is incorporated into our risk management systems and processes. We are aiming to develop the appropriate systems, data and processes to provide enhanced disclosures in future years. 2    Counterparties are allocated to the high transition risk sectors via a two-step approach. Firstly, where the main business of a group of connected counterparties is in a high transition risk sector, all lending to the group is included in one high transition risk sector irrespective of the sector of each individual obligor within the group. Secondly, where the main business of a group of connected counterparties is not in a high transition risk sector, only lending to individual obligors in the high transition risk sectors is included. The main business of a group of connected counterparties is identified by the industry that generates the majority of revenue within a group. Customer revenue data utilised during this allocation process is the most recent and readily available and will not always align to our own reporting period. 3    The six high transition risk sectors make up 17.5% of the total gross carrying amount of wholesale loans and advances to banks and customers of $635bn. Amounts include assets held for sale. 4    The sectors used to monitor the wholesale corporate lending portfolio set out in the table are different to the scope of sectors we focus on for financed emissions targets and reporting. The latter focus on the most carbon-emissive sectors, and the parts of the value chain where we believe the majority of emissions are produced to help reduce double counting. These sectors are set out within the 'Financed emissions' section on page 41. Retail credit risk Climate risk may impact retail credit risk through an increase in credit losses on our global retail mortgage portfolio, primarily due to the impact of physical risk. Our climate scenario analysis conducted over the last two years shows that climate-related risk is not expected to become significant for credit default in the medium term to 2030, due to a relatively low loan-to-value (‘LTV’) profile of properties, their locations and availability of property insurance for our customers. Property insurance remains a mitigant. However, as climate risk increases, alongside uncertainties of how the insurance market will evolve, impacts are expected to increase over the longer term beyond 2030. Results are considered directional and will evolve over time as our approach continues to mature. Within our mortgage portfolios, properties or areas with potential heightened physical risk are identified and assessed locally with exposure monitored. A reduction in property value, higher insurance costs and insurance availability are potential future negative financial impacts for higher physical risk properties. Retail mortgage book and relevant 2025 enhancements The UK and Hong Kong are our most material mortgage markets by exposure, which at December 2025, represented approximately 50% and approximately 30% respectively of our global mortgage portfolio, with other IWPB markets accounting for the remaining balance. Analysis conducted over the last two years on the maturity profile of the UK mortgage book shows that the average remaining contractual term is 22.2 years. However, with some customers undertaking refinancing options during this term, the average term of the mortgage in practice is between five and eight years. This means our strategic approach to climate risk needs to consider short-term risk through to long-term forward-looking risk, given that customers may choose to remain with us over the whole life of the loan. We have also performed forward-looking climate scenario analysis on UK, Hong Kong and additional markets, including US and Australia, collectively covering over 90% of our retail portfolio. For further information, see page 209 . We continue to improve our climate risk management approach, including enhancements to our internal climate risk policy in 2025 and associated controls. This includes mandating key risk indicators for physical risk and introducing a climate risk assessment in mortgage decision making. The UK already considers physical risk in relation to flooding and coastal erosion as part of an established mortgage decisioning process, using data sourced from third-party providers. Hong Kong introduced physical risk considerations into the mortgage origination process during 2025, utilising third-party data. Physical risk UK flood data considers present day risk from tidal, river and surface water flooding baselined to 2021. A flood risk rating score of 0-100 is provided, with 100 being the highest risk. Flood risk bands are based on the average annual loss generated using flood hazard frequency, flood depths, and the probability of flooding events occurring. Based on available data, 3.6% of the UK mortgage book by balances is at very high/high risk of flooding. Geographically, our highest risk exposures are Greater London and the South East. Ñ For the Hong Kong physical risk information, please refer to the scenario analysis section on page 209 . Transition risk Transition risk for retail mortgages is the risk of potential loss of property value and/or customer financial impairment resulting from the adjustment towards a lower carbon economy. Examples of these impacts include changes in energy prices and evolving government regulation for energy efficiency standards. For the UK, we monitor the energy performance certificate (‘EPC’) ratings of individual properties from A (highest efficiency) through to G (least efficient), as EPCs are commonly used as an indicator of transition risk. All UK rental properties must have a minimum EPC rating of E. We track EPC ratings for both owner occupier (‘OO’) and buy to let (‘BTL’) properties. The ESG data file details the profile of current EPCs. For completeness, where we do not hold a current EPC, we have included expired EPCs. For OO, 85.3% of properties by lending balances hold a valid EPC/expired certificate, of which 41% are EPC A-C. For BTL, 83.1% of properties by lending balances hold a valid EPC/expired certificate, of which 60.2% are EPC A-C. We continue to monitor the profile of EPC ratings and closely track evolving government legislation, which will be a key factor in the decarbonisation of buildings. Ñ For further details of flood risk, EPC breakdown and the average tenor of our UK retail mortgage portfolio, see our ESG Data Pack at www.hsbc.com/esg. Treasury risk Climate risk may impact Treasury risk through increased regulatory requirements and from changes to customer behaviours, which may result in increased deposit outflows. Climate risk may also impact interest rates and consequently the repricing profile of the balance sheet. As part of our ICAAP, we assess the impact of climate change on capital, focusing on credit risk, traded risk and operational risk, and perform sensitivity analysis on our Internal Capital Planning Buffer. As part of our ILAAP, we assess how climate risk could impact the Group liquidity position. Pension risk Climate risk could result in additional costs within our defined benefit pension plans, due to changes in the investment performance of pension plans or through having to meet evolving regulatory requirements. Our global policies covering the oversight of pension investments include climate considerations. We also conduct an annual exercise to estimate the exposure of our largest pension plans to climate risk. Insurance risk We are improving our ability to perform exploratory assessments of the solvency resilience of our biggest insurance businesses under climate stress scenarios. HSBC Holdings plc Annual Report on Form 20-F 206 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk Traded risk Climate risk may result in trading losses due to increases in market volatility and widening spreads from the macro and microeconomic impacts of transition and physical risk. We monitor climate sensitive exposures against regional and global limits in our global and entity mandates, including for vulnerable countries and high-transition risk sectors. Climate scenarios are included in our stress testing scenario library and run every month to identify the vulnerabilities of the trading book in a climate-stressed context. The scenarios are updated annually in light of the most recent developments in terms of policy and climate events, with exposures and stress testing results reported to global and regional senior management. Reputational risk We manage the reputational impact of climate risk through our broader reputational risk framework, which plays a role in managing the risk of greenwashing, and is supported by our sustainability risk policies and metrics. Our global network of sustainability risk managers provides local policy guidance to relationship managers for the oversight of policy compliance, and in support of implementation across our wholesale banking activities . Ñ For further details of our sustainability risk policies, see page 49 . Ñ For further details of our approach to reputational risk, see https:// www.hsbc.com/who-we-are/esg-and-responsible-business/managing-risk/ reputational-risk. Sustainability execution risk Sustainability execution risk has been formally defined as a new risk type and embedded in our Risk Taxonomy to help identify and manage the risks around the delivery and execution of our sustainability ambitions, targets and commitments. Sustainability execution risk enables effective end-to-end risk management through dedicated risk stewardship, monitoring and assessment of controls and emerging risks. Regulatory compliance risk Regulatory compliance oversees and supports the business in the management of climate-related risks that could cause breaches of our regulatory duties to customers and inappropriate market conduct. Our policies include sustainability considerations, particularly in relation to new and ongoing product management, sales outcomes, conflicts of interest and product marketing. We continue to enhance the associated control frameworks, processes and customer outcomes. Resilience risk Climate risk may influence resilience risks through impacts on our buildings or through physical and/or transition disruption to third-party supplier relationships. As part of our Internal Climate Scenarios Analysis (‘ICSA’), we have developed different scenarios to understand the impact of physical climate risk on our properties. For further details, please see page 210 . We continue to review and adapt our resilience risk policies as climate risk requirements evolve. Model risk Model risk in a climate-related context refers to the uncertainties and complexities inherent in the modelling of the financial impact translation of climate-related changes and scenarios. Climate risk models are used for climate scenario analysis, risk management, and emissions reporting among other use cases. Key challenges, shared across the industry, include the quality and consistency of data, and assumptions required to mitigate these inherent model limitations. Model risk policy and procedures continue to evolve in line with regulation, setting out the minimum control requirements for identifying, measuring and managing model risk for climate-related models. Financial reporting risk Climate risk impacts financial reporting risk through increased disclosure requirements. The scope of financial reporting risk includes oversight of the accuracy and completeness of ESG and climate-related reporting. Our risk appetite statement states that HSBC has no appetite for material errors in ESG disclosures in our key markets, balanced with the evolving requirements and data availability. In addition, our internal controls incorporate requirements for addressing the risk of misstatement in ESG and climate reporting. To support this, a framework is used to provide guidance on control implementation over ESG and climate reporting and disclosures, which includes areas such as process and data governance, and risk assessment. Challenges Key challenges include: – an increasingly complex and divergent regulatory environment across jurisdictions; – the diverse range of internal and external data sources and data structures needed for climate-related reporting, which introduces data accuracy and reliability risks; – industry-wide data gaps on customer emissions and transition plan and methodology gaps, which limit our ability to assess transition risks accurately; and – data limitations on customer assets and supply chains, and methodology gaps, which hinder our ability to assess physical risks accurately. . Insights from climate scenario analysis Climate scenario analysis supports our strategy by assessing our potential exposures to risks and vulnerabilities under a range of climate scenarios. Our exercises focus on areas most vulnerable to climate risks across various business sectors, portfolios, counterparties and our own properties. They serve as forward-looking tools that assess the potential impacts of climate-related risks on our operations, credit portfolio and capital. By simulating the impacts on our customers’ financials and collateral, the analysis provides insights into the long- term effects that climate risks may have on our balance sheet. While credit risk is the primary focus, we also examine potential impacts upon other principal risk types. For further details about these risks, see ‘Climate risk’ on page 203 . Our Group-wide internal climate scenario analysis exercises are sufficiently diverse to enable key physical and transition risk vulnerabilities to be explored using a wide range of potential climate outcomes. They provide insights that enhance how we understand the various transition and global warming pathways that may unfold, which help to inform how we manage the potential financial implications for our customers and our shareholders. We have conducted an internal climate scenario analysis exercise annually since 2021. The 2025 exercise supplements bespoke analyses prepared in response to regulatory requirements in various jurisdictions. It focused on the following time horizons: – Short-term: 2025-2027 (0-2 years) – Medium-term: 2028-2030 (3-5 years) – Long-term: 2031-2040 (6-15 years) The short- and medium-term horizons align with our internal strategic planning cycle, while the long-term highlights risks beyond that horizon. The scenario analysis exercise supports our assessment that the Group is well capitalised in relation to the potential risks and challenges posed by climate change. The results are reviewed and endorsed by the Group Risk Committee . HSBC Holdings plc Annual Report on Form 20-F 207 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk Climate scenario analysis is an evolving discipline. While we seek continuous methodology enhancement to utilise the latest developments and best-available data, it remains the case that there are significant limitations and assumptions. As capabilities improve, climate scenario analysis outcomes may change . For further details see ‘Assumptions and limitations’ on page 211 . Our climate scenario analysis approach Our internal climate scenario analysis exercise used four scenarios designed to examine a range of climate pathways. These are shown in ‘Characteristics of our climate scenarios’ below: Characteristics of our climate scenarios +Physical Risk                                                                                        Transition Risk+ Scenarios Downside Physical Risk Severe Climate Stress 2 Current Commitments Below 2 Degrees Scenario outcomes Scenario narrative Climate action is limited to currently implemented governmental policies, new decarbonisation policies fail to get introduced leading to significant global warming and physical risk events An extreme scenario assessing concurrent impacts of accelerated climate policies and severe physical risk events. It specifically explores disorderly climate action that has been triggered by physical events leading to a short sharp economic recession. Climate action includes policies already in place and governmental commitments likely to be implemented. This leads to a slower-than-required transition to a net zero economy reflective of the current pace of transition. A Paris Agreement-aligned scenario that assumes an orderly and gradual rise in the stringency of climate policies over time. Net zero is achieved but after 2050. Rise in global temperatures by 2100 (vs pre-industrial levels) 4°C+ N/A 2.6˚C 1.7˚C How scenario aligns to RCP 3 RCP 8.5 N/A RCP 4.5 RCP 2.6 Scenario end point 2050 2030 2050 2050 Underlying assumptions based on global averages Global climate actions Implemented policies only Rapid & disorderly transition Viable pledged policies Gradually rising stringency of policies Assumed pace of technology change and adoption Slow change Accelerated progress Limited progress Moderate change Assumed socioeconomic impact High Very high Moderate Moderate to high 2030 2040 2030 2030 2040 2030 2040 Assumed carbon price ($/tCO 2 ) 1 18 18 326 29 54 44 81 Assumed % increase in GDP since 2020 29% 55% 24% 32% 65% 32% 69% Assumed % increase in energy usage since 2020 23% 38% 4% 15% 23% 9% 9% % renewable energy mix 12% 16% 26% 16% 25% 19% 36% Scenario risk characteristics Climate risk Physical p Higher p Higher u Moderate q Lower Transition q Lower p Higher u Moderate p Higher 1 Carbon price represents the cost effects of climate-related policies that aim to discourage carbon-emitting activities and encourage low-carbon solutions. The expected result of higher carbon prices is a reduction in emissions as high emissions become uneconomical. 2 The scenario characteristics shown for the Severe Climate Stress scenario only describe the scenario that was used to assess credit risk. 3 Representative Concentration Pathways (RCPs) are a set of greenhouse gas concentration trajectories developed for climate modelling and research. They were formally adopted by the IPCC and are used to assess the potential impacts of climate change based on different levels of greenhouse gas emissions. Our climate scenarios We have designed a suite of diverse climate scenarios that explore plausible pathways which can support a holistic view that supplements the Group’s current and future strategic thinking. The climate scenarios are underpinned by well-established industry bodies, such as the Network for Greening the Financial System (‘NGFS’) Phase V, the Intergovernmental Panel on Climate Change (‘IPCC’) and International Energy Agency (‘IEA’), which are further enriched for additional granularity, to seek to ensure consistency with industry-recognised approaches and to reflect the latest climate policy and economic outlook and our portfolio vulnerabilities. There are three long-term scenarios. The Below 2 Degrees scenario is our Paris Agreement-aligned scenario. We use the Current Commitments scenario to support the Group’s financial planning, as this is deemed to be the most likely scenario to occur over the five- year planning horizon. The Downside Physical Risk scenario is a less probable scenario with higher global warming and more significant physical risk impacts. To support how we assess the climate-related impacts observed within our climate scenarios, we have also artificially constructed a counterfactual scenario (which is a climate agnostic scenario). This entailed taking our Current Commitments scenario and removing the climate impacts, using climate-related GDP deviations as a proxy. The Severe Climate Stress scenario is a highly improbable short- and medium-term stress scenario, aligned to NGFS’s Short-Term Scenario Framework. The scenario envisages that extreme physical risk events – which include 1-in-100 year flooding, heatwave and drought events – pivot the public consensus on climate change, which accelerates the transition to net zero. It has the effect of compressing both physical risks and transition risks into a short timeframe. Although the scenario is extreme and highly unlikely, it assists us in understanding our current exposures. HSBC Holdings plc Annual Report on Form 20-F 208 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk We use the scenarios to assess our key risk types and businesses as follows: Evaluating key risk types and businesses using climate scenario analysis Resulting Climate Vulnerabilities and Opportunities Climate scenarios 1 Climate risk type assessed 2 DP SCS CC B2C TR PR Theme: More frequent and disruptive weather events and rising temperature over long term Retail and wholesale credit risk (real estate portfolios) – our clients may experience property valuation impacts due to heightened physical risk or revenue loss due to business disruption u u u u Traded risk – a re-pricing of assets exposed to acute and chronic physical risks u u u Resilience risk – physical damage to our buildings, business interruption and inability to process transactions can result in operational impacts u u u u u Liquidity risk – evaluating both physical risk and greenwashing risk stress tested over a 90-day horizon to analyse the resulting liquidity impact u u Theme: Our ambition to support customer decarbonisation creates risks & opportunities Wholesale credit risk – corporates exposed to transition risk may experience revenue loss or increased costs u u u u Theme: Assessing how we meet our interim 2030 financed emissions targets and wider net-zero ambitions Sustainability execution risk – assessing our revenue at risk as a result of HSBC meeting or not meeting its ESG ambitions, targets and commitments u u u Wholesale credit risk – reshaping our portfolios away from high emitting clients to low emitting clients u u u Theme: Unpacking ESG risks may uncover hidden risks for HSBC Specific non-financial risks 3 – ESG is a relatively new area with uncertainty over future environmental and policy changes and potential greenwashing risks u u u u Pension risk – pension funding levels may shrink if climate risk crystalises u u u 1 Climate scenarios are explained in the previous section. DP = Downside Physical Risk; SCS = Severe Climate Stress; CC = Current Commitments; and B2C = Below 2 Degrees. The Severe Climate Stress scenario used to assess credit risk employed a different narrative from the tailored scenarios used to assess the other risk types. 2 TR = Transition risk; PR = Physical risk. A selected climate risk type does not imply that it was assessed against all selected climate scenarios on the same row. 3 Specific non-financial risks refer to financial reporting risk and regulatory compliance risk. Assessing our resilience to climate risk Overall, climate-related risks are not currently projected to significantly impact our strategic priorities or business models, however the exercise did highlight the likely challenges of meeting any net-zero objectives in a world that is not on a net-zero pathway. Our climate strategy includes approaches to mitigate climate change impacts, such as portfolio steering and credit decisioning. These support efforts to manage climate-related risks over time. Our focus is on supporting our customers to implement quality climate transition plans; reducing our financed emissions; continued investment into climate modelling capabilities; and the embedding of climate risk assessment into business-as-usual risk management processes. Conducting climate scenario analysis involves significant assumptions and inherent limitations. For further details see ‘Assumptions and limitations’ on page 211 . Within the scope and limitations of our exercise, our analysis anticipates that climate risk will be heightened within our wholesale lending portfolio. In line with expectations of increasing transition and physical risks, we expect climate-related credit risk to grow over time, with the speed dependent on the severity of the risks in the assessed scenarios. However, our global portfolios remain resilient to risks arising from the transition to a low carbon economy. While exposures to other risk types may also contribute to climate-related losses, their financial impacts are expected to remain minimal in the near term. Wholesale credit risk is projected to be the primary contributor to our climate-related financial impacts, driven by transition risk. The chart on the right shows how, under the Current Commitments and Below 2 Degrees scenarios, climate transition-related ECL will change relative to a counterfactual scenario that incorporates no climate change effects. It shows how transition risks in our wholesale lending portfolio are expected to remain low in the near term but become a bigger driver of ECL into the long term as global transition policies are forecast to increase in stringency. As shown by the difference in results between the two regional entities referred to in the chart, the effects of transition risks can vary significantly due to each entity-level portfolio exposure, and the differing climate policies in different parts of the world. The future stringency of global climate policies, a critical differentiator in our climate scenarios, will significantly influence climate-related financial impacts. Projected climate transition risk-related ECL impacts on the Group’s wholesale lending portfolio 1 25% 20% 15% 10% 5% 0% 1 A 10% increase is equivalent to a 1.1x-fold increase in the table on page 209 . Near-term acute physical risk shocks due to perils, such as typhoons and heatwaves, are becoming more common as surface temperatures rise with a slow transition to a low carbon economy. These have the potential to increase our climate-related losses each year. The size of these losses is dependent on the availability of insurance and the resilience of buildings to extreme weather. While our existing analysis indicates resiliency, this will be an area of particular focus as we further develop our capabilities. During the five-year period assessed under the Severe Climate Stress scenario, the Group demonstrated robust resilience. Despite the substantial projected increase in climate-related losses, compared with the results observed under our other climate scenarios, the stress test results indicate that we are well-positioned to withstand adverse climate-related conditions and maintain operational stability. The Current Commitments scenario shows muted impacts over the Group’s five-year planning horizon, with the projected climate-related impacts on ECL remaining within the Group’s current risk appetite. A shift towards the Below 2 Degrees pathway would be expected to crystallise some incremental climate-related losses over the planning horizon but these are expected to remain minimal at Group level. Beyond the long- term horizon, unmitigated climate stress has the potential to be a headwind to the Group’s financial performance and capital position as transition and physical risks intensify. HSBC Holdings plc Annual Report on Form 20-F 209 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk How climate change is impacting our wholesale lending portfolio The primary channel of climate risk exposure within our wholesale portfolio is through lending activities. We have identified six key sectors with elevated transition risk as detailed on page 204 . These sectors, together with an additional five sectors, were selected due to the size of our climate risk exposures for in-depth assessments to be evaluated as part of our climate scenario analysis. Our assessment specifically examines the influence of transition risk on the portfolio with an emphasis on the high transition risk sectors. We quantify the modelled climate-related impact on our projected ECL across the short-, medium- and long-term horizons under our transition risk scenarios. This was compared with a counterfactual scenario that excludes climate change impacts to isolate the climate-related changes within our ECL. Our results, as shown in the adjacent table, suggest that in the short and medium term, we expect climate-related financial impacts to remain relatively muted, but to increase in the long term particularly under the Below 2 Degrees scenario, where transition risks grow at a faster rate. A key risk driver comes from the phasing out of climate- related government subsidies and ‘free carbon allowances’ within the EU, introducing a potential situation where some of our customers may lose their competitive advantages. We project that we would see our most significant climate-related financial impacts across a few key sectors, including: the manufacturing sector, which includes the construction, contracting and building materials sectors and the chemicals sector due to higher costs following rising carbon prices; in the oil and gas sector, due to higher production costs and lower demand; in the automotive sector due to increased competition within the EV market; and in the metals and mining sector due to high climate transition costs. This year the exercise benefited from a significantly higher prevalence of customer transition plans used in our modelling. We experienced a 46% increase compared with our 2024 exercise, allowing us to place more emphasis on how our customers expect to transition to net zero within our approach. The impact on our wholesale portfolios is demonstrated by the adjacent table, which shows the size of exposures by sector in 2024 and the increase in ECL compared with the counterfactual scenario (expressed as a multiple). The size of our exposure in each sector is represented by our exposure at default (‘EAD’) relative to one another. Overall, our analysis indicates that our wholesale lending portfolio is expected to remain resilient to climate-related risks across our assessed time horizon. Impact on wholesale lending portfolios Wholesale sectors Exposure at default (EAD) 3 2024 Average ECL increase 1, 2 Climate Scenarios Current Commitments Below 2 Degrees ST MT LT ST MT LT Wholesale Lending Portfolio - Overall 4 100% Other wholesale sectors (low - medium risk) 5 50% Conglomerates and industrials n Power and utilities n Automotive n Oil and gas n Construction, contracting and building materials n Metals and mining n Land transport and logistics n Chemicals n Agriculture & soft commodities n Aviation n Marine n 1    Increase in ECL compared with counterfactual over short-, medium- and long-term time horizons, expressed as a multiple. It represents the average increase across the stated time period. 2    Values in the key represent the fold-increase in ECL, i.e. <1.1 equates to less than 10% increase over the counterfactual. 3    The size of the bubbles is a visual representation of the portfolios, in terms of EAD, relative to one another. 4 “Wholesale lending portfolio - Overall\" refers to the entire portfolio including the CRE sector. 5    \"Other wholesale sectors\" include the remaining sectors not listed in the table. The CRE sector, which is disclosed on page 210 , is not included. Lower Impact <1.1x <1.25x <1.5x <2x <2.5x <3x Higher Impact How climate change is impacting our retail mortgage portfolio Since 2023, as part of our climate scenario analysis exercises, we have executed a climate risk assessment, at least once, for the following mortgage portfolios: UK, Hong Kong (including Hang Seng Bank), the United States, Singapore, Malaysia, Australia, mainland China and the UAE. These portfolios collectively account for over 90% of the balances in our global retail mortgage portfolio . Our physical risk assessment methodology evaluates the impacts of physical risk perils on property valuations, as well as on affordability for customers arising from increased insurance and repair costs . Additionally, for our UK portfolio, we conducted a transition risk assessment that includes an assessment of the impacts of rising energy costs and government legislation, including requirements for homeowner energy efficiency upgrades. The results of the climate scenario analysis exercise conducted on the retail mortgage portfolio indicated that, over the long term, we anticipate minimal climate-related losses. Although the severity of climate perils is projected to increase, our overall losses are anticipated to remain low, even under a severe Downside Physical Risk scenario through to the long term. This projection assumes the ongoing availability of insurance and reflects the portfolio’s relatively low loan- to-value ratio. Given the limited availability of historical climate loss data and the uncertainty surrounding future changes in insurance provision, our assessment should be regarded as indicative. Our analysis will continue to evolve as our lending profile, assessment methodologies, data sources and modelling techniques mature. Our ESG Data Pack offers detailed analysis of the flood risk exposure within our retail mortgage portfolio across our key markets. The accompanying table presents projected flood depths based on the locations of our mortgaged properties under different climate scenarios, enabling an assessment of the potential impacts. However, it does not consider building archetypes. Ñ Please refer to the ESG Data Pack at www.hsbc.com/esg HSBC Holdings plc Annual Report on Form 20-F 210 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk How climate change is impacting our commercial real estate portfolios The commercial real estate (‘CRE’) sector within our wholesale lending portfolio is a globally-diversified portfolio with our largest concentrations in Hong Kong and the UK. In 2025, we carried out a detailed assessment of our portfolios in Hong Kong, the UAE and France . Properties in a real estate-focused portfolio are exposed to physical climate risk, which varies significantly by geographical location. They may also face future transition risks should governments introduce climate-related regulation for commercial properties, such as requirements for climate-resilient retrofitting, which we have assessed in previous years. When assessing physical risk impacts across the portfolio, we analysed how the specific perils such as coastal inundation, riverine flooding, surface flooding, cyclones and wildfires may affect the financial performance of our portfolio under various climate scenarios. Our primary objective was to quantify the potential damage and assess how these events could influence the repayment capacity of borrowers taking into account both direct impacts, such as repair costs, and indirect impacts, such as downtime resulting from business disruption. However, our methodology is subject to several constraints, including limited historical data, a dependence on precise building co-ordinates and limited insight into the resilience of individual properties. The results are also sensitive to key assumptions, particularly those relating to insurance coverage and reinstatement values . The table below shows the proportion of our CRE portfolio exposed to specific physical perils in our key markets. This analysis only focuses on the properties within the portfolio for which we have required data. Exposure to peril (%) 1 Market Exposure at default (EAD) 2 2024 Coastal inundation Cyclone wind 3 Surface water flooding Riverine flooding Forest Fires Hong Kong n 17 100 20 15 2 UK n 15 0 17 23 0 1    Proportion of our CRE portfolio exposed to specific physical perils in the Downside Physical Risk scenario as at 2050. 2    The size of the bubbles is a visual representation of the portfolios, in terms of EAD, relative to one another. 3    Although all properties in the UK could be impacted by some damage due to extreme wind, the intensity of impact is projected to be very insignificant and highly muted in some regions, represented by approximately 0% exposure to this peril. Over a long-term horizon, we assess chronic physical risks using the Current Commitments and Downside Physical Risk scenarios to capture the gradual evolution of physical climate impacts. The table below shows the ECL impact on our CRE portfolio compared with a counterfactual scenario (expressed as a multiple). Impact on our commercial real estate portfolio Climate Scenarios ECL increase 1,2 Short-term Medium-term Long-term Current Commitments Downside Physical Risk (2024) 3 Lower Impact <1.1x <1.25x <1.5x <2x <2.5x <3x Higher Impact 1    Increase in ECL compared with counterfactual over short, medium and long- term time horizons, expressed as a multiple. 2    Values in the key represent the fold-increase in ECL, i.e. <1.1 equates to less than 10% increase over the counterfactual which excludes climate change impacts. 3 Results under the Downside Physical Risk scenario refers to 2024 exercise. In the most likely Current Commitments scenario, chronic physical risks are expected to increase slowly over time with ECL estimated to be less than 5% higher relative to the counterfactual scenario by 2040. In the more severe Downside Physical Risk scenario, greater global warming leads to heightened physical risks over time and the ECL impact is estimated to be less than 15% higher than relative to the counterfactual scenario. This year, we also conducted a sensitivity analysis to test the impact of extreme tail-end physical risks materialising earlier than expected under the Downside Physical Risk scenario. In this assessment, we shift the physical risk effects that are expected to occur between 2055-2080 towards the period between 2025-2050. Under these stressed conditions, projected ECL were higher but still manageable, and up to 40% higher than they would have been under the counterfactual scenario by 2040. These results show our CRE portfolio is resilient to climate risk . Our portfolio in Hong Kong, which represents our largest CRE portfolio, is primarily exposed to flooding risks, including coastal inundation and tropical cyclones. The severity and frequency of these events have increased in recent years. Through our climate scenarios, we assess both long-term chronic physical risks and short-term acute weather events, with the latter being significantly more severe than those experienced to date. Our analysis continues to indicate that strong building standards, local flood-mitigation measures, such as drainage tunnels, and insurance coverage are likely to limit the financial impact of climate change on the Hong Kong portfolio. We have also conducted sensitivity analyses to account for variations in insurance availability. In France, the principal physical risks are coastal inundation from storm- driven tidal surges and riverine flooding due to overflowing river banks. Only a small proportion of the portfolio is exposed to these hazards, resulting in minimal financial exposure. Our clients typically hold diversified CRE portfolios, and property elevation serves as a key mitigator, making the portfolio more resilient to both chronic and acute physical risks. This year, we also analysed our UAE portfolio as part of a regulatory exercise by the Central Bank of the UAE, focusing on physical risks. The exercise separately modelled two key perils – storm surge and rainfall – using severity levels and valuation shocks provided directly by the regulator. The capital impact was found to be minimal, as customer assets tend to be located in less vulnerable zones. Strong loan-to-value ratios further mitigated the effect of severe valuation shocks. Overall, and consistent with our previous assessments, our analysis shows that our CRE portfolio remains resilient to climate risk. We continue to monitor emerging risks closely and adapt our strategies to ensure the ongoing financial stability of the portfolio under evolving climate scenarios. How climate change may impact our properties We use stress testing to evaluate the potential impact on our owned or leased premises. Our 2025 scenario stress test analysed how six climate change-related hazards – comprising coastal inundation, surface water flooding, riverine flooding, forest fires, extreme wind and tropical cyclones – could impact 2,276 of our properties. Key findings from the RCP8.5, Downside Physical Risk scenario included that by 2050, 20 of our 2,276 properties will have a high potential for impact due to climate change, with insurance-related losses estimated to be in excess of 3% of the insured value of the buildings. A key finding from the RCP4.5, Current Commitments scenario showed that the total number of buildings at risk reduces to 15. The highlighted facilities are still at risk from the same perils of coastal inundation and tropical cyclone by 2050. The resilience of our properties Climate change poses a physical risk to the buildings that we occupy, potentially impacting our operational resilience. This includes our offices, retail branches and data centres, both in terms of loss and damage, and business interruption. We measure the impacts of climate and weather events on our buildings on an ongoing basis using historical, current and scenario- modelled forecast data. In 2025, there were 33 major storms. HSBC Holdings plc Annual Report on Form 20-F 211 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk No facilities were impacted but two branches were proactively closed to mitigate any risk due to the extreme weather conditions. Forward-looking analysis along with historical data helps inform real estate planning. We will continue to enhance our understanding of how extreme weather events impact our buildings portfolio as climate risk assessment tools improve and evolve. We buy insurance for property damage and business interruption and consider insurance as a loss- mitigation strategy. We regularly review and enhance our building selection process and global engineering standards and will continue to assess historical claims data to help ensure our building selection and design standards address the potential impacts of climate change. How we use the outputs of climate scenario analysis Scenario analysis is used to assess our ability to withstand, adapt to and recover from climate-related risks. It supports the Group to assess the impact of our net zero ambitions on our revenue and profitability which helps to strengthen our understanding of business model risk, and supports how we increase the awareness of our climate risk. It informs strategic planning, including any strategic management actions needed to mitigate the identified risks. From a financial and capital planning perspective, climate scenario analysis informs IFRS 9 ECL provisioning (see page 212 ) , and the assessment of capital adequacy as part of the Group’s Internal Capital Adequacy Assessment Process (‘ICAAP’). This supports how we assess the appropriate levels of capital needed to guard against climate-related risks. Climate scenario analysis also supports the management of financed emissions at a portfolio level and enhances the forward-looking elements of our climate risk appetite framework. In addition, it assists in the assessment of climate-related opportunities, such as potential increases in lending under accelerated transition scenarios. These contribute to the development of a more climate-resilient balance sheet . We have completed our first quantitative analysis of the potential forward-looking impact on our revenue due to the alignment or misalignment with our net zero ambitions, as well as climate-related risks and opportunities. There is a high degree of uncertainty and subjective assumptions with these results. We will continue to enhance the use of climate scenario analysis in our business decision making and continue to develop our modelling capabilities, including the assessment of nature-related risks, over time. Our climate scenario analysis modelling approach The models that we use for climate scenario analysis incorporate a range of climate-specific metrics that could potentially impact our customers, including expected production volumes, revenue, costs and capital expenditure. For transition risk, we assess how these metrics interplay with economic factors, such as carbon prices, which represent the cost effects of climate-related policies that aim to discourage carbon- emitting activities and encourage low-carbon solutions. The expected result of higher carbon prices is a reduction in emissions as high- emission activities become uneconomical. For physical risks, our models assess the impacts of acute and chronic climate hazards on our customers’ operations and asset bases. Key loss drivers include damage to physical assets and property from extreme weather events, as well as business disruption caused by operational downtime. These factors can reduce revenues, increase repair and operating costs, and place pressure on liquidity and capital expenditure, leading to a deterioration in our customers’ credit profiles. Ñ For a broad overview of the models that we use for our climate scenario analysis, as well as graphs that show how global carbon prices and carbon emissions will differ under our climate scenarios, see our ESG Data Pack at www.hsbc.com/esg. Assumptions and limitations Our climate scenario analysis exercises rely on a significant set of assumptions and limitations, which may constrain the reliability and robustness of our resulting outputs. Outcomes may change in the future, potentially materially, as capabilities improve. The information provided within this section is supplemented by the ESG cautionary statement on page 1 . Assumptions that we use within our wholesale lending modelling approach include the following: – Scenario analysis is conducted on counterparties with sufficient data and extrapolated to the remaining portfolio. It assumes that there is a broadly consistent climate risk profile across each portfolio. – Transition risk impacts are assumed to be limited for sectors that we have assessed as having a low transition risk exposure. – Our customers will successfully execute their transition plans, where those plans are assessed as credible. – Customers in certain wholesale sectors are assumed to pass some of their costs relating to higher carbon prices through to their own customers. These pass-through rates are based on externally calibrated pass-through rates and reviewed by internal sector experts. – State support will continue for government-owned or government- backed customers, and for customers providing essential goods and services critical to societal functioning. Within our retail lending models, we assume that: – When quantifying the impacts of climate events, insurance availability is recognised as a key mitigant of loss. Our approach incorporates benchmarking against insurance industry standards to assess both the availability of cover and premium levels, using calculations based on average annualised loss. – Flood Re, the UK government-backed insurance scheme established to ensure the availability of insurance for properties at higher risk of flooding, is expected to operate effectively only until its current anticipated expiry date in 2039. Beyond this point, affected properties are likely to face increased insurance costs, with some potentially becoming uninsurable. Our models are designed to produce outputs that can support our assessment of the level of our climate resilience. However, there are a number of industry-wide limitations, including: – Data availability – Climate scenario analysis is a data-intensive exercise and the required information is only available for a subset of the Group’s exposures. In particular, we see a number of climate- related financial data gaps relating to reliable forward-looking climate-aligned data. – Scenario limitations – There are inherent uncertainties in the ways our scenarios are designed, which are largely attributed to the limited history of the interactions between climate risks and the economy. Our climate scenarios consider a range of possible future outcomes, however quantifying the full effects of all climate-related outcomes, such as the effects of potential tipping points, remains challenging. – Modelling uncertainties – There are inherent limitations within climate models due to the challenges of modelling (with any precision) how climate-related interactions (both physical and transition risks) will manifest. These include estimating how policy changes, carbon pricing or new technologies will impact specific customers, how these customers will adapt, and uncertainty in estimating physical risk losses as historical data may not be representative under evolving climate patterns. These limitations are further compounded as the modelled time horizon lengthens and the uncertainties behind higher-order impacts increase. However, internal judgements are used to mitigate some of these effects. Our wholesale methodology for our non-real estate portfolios did not consider the potential impacts from climate-related physical risk, second order supply chain impacts, the volatility of commodity prices, and how climate risks are correlated between sectors. Our wholesale physical risk methodology did not include the indirect impact of factors such as supply chain disruption and the risk of HSBC Holdings plc Annual Report on Form 20-F 212 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Climate risk stranded assets. However, we are building capabilities to capture these effects. How we are enhancing our climate scenario analysis approach We continue to enhance our climate scenario analysis methodology by incorporating lessons learnt from previous exercises, feedback from key stakeholders, which includes internal stakeholders as well as external regulators, and by assessing the direction of general industry practices. We have made several key enhancements across climate scenario development and climate risk modelling, which include improvements to our cash flow models, and more granular assumptions with respect to how we model carbon prices. We have also improved how we embed the outputs from climate scenario analysis exercises into our risk management frameworks. Our climate scenarios and modelling capabilities are being integrated into the wider bank-wide stress testing procedures. In 2025, improvements within our wholesale lending climate modelling process included targeted improvements to our oil and gas, automotive and emission-based models, and the continued enhancement of our customer transition plans. These support how we improve the quality of our modelled outcomes. Over the last 12 months, we have strengthened our commercial and retail real estate climate assessment capability by bringing the geocoding process in house, which will go live in 2026 and further enhance our ability to identify and address data quality and accuracy. We have also conducted independent model validation and implemented continuous enhancements based on validation outcomes. In 2026, we intend to increase our focus on how physical risk events could impact our non-commercial real estate portfolio, including the impact from asset damage and business model disruption channels. We will also continue to explore the impacts on our portfolio from a nature risk perspective and expect our modelling capabilities to evolve over time. Assessing the effect of climate credit risk on IFRS 9 ECL We continue to integrate climate considerations into our business and risk management processes to ensure climate-related risks are appropriately managed. As part of our ECL assessment for 31 December 2025, we conducted a climate-related ECL sensitivity analysis. Additionally, where climate events have previously influenced or recently affected our economies, these impacts were implicitly reflected within our IFRS 9 scenarios. We used available information including our ICSA results to determine areas of potential risk in the credit portfolios to perform a climate ECL sensitivity analysis for both our wholesale and retail portfolios. In our wholesale portfolio, the exercise covers both physical and transition risk. For retail, the exercise covers physical risk for our largest mortgage portfolios (UK and Hong Kong). Properties with elevated climate risk and insurance vulnerability are identified, and the associated potential losses are estimated by assessing the impact on customer affordability and collateral valuations under physical stress conditions. The overall estimated sensitivity of ECL under IFRS 9 as at 31 December 2025 was less than $50m. This ECL sensitivity is influenced by several factors including the tenor of the underlying portfolios and observable market prices of collateral. A significant proportion of our wholesale portfolio is short dated. Furthermore, our secured retail portfolio has low average loan-to-value ratios, which helps to mitigate the effect of property damage on customer default risk and loss given default. Our wholesale ECL is likely to remain relatively muted in the short and medium terms, as illustrated in the graph on page 208 . While this impact may increase over time, long dated cashflows are less likely to impact current expectations of credit loss, as future cashflows are discounted as part of the ECL modelling process. The ECL sensitivity is dependent on the timing and severity of climate change within the period over which HSBC measures ECL. As there is limited historical climate loss data available and uncertainty on how insurance will change over time, our assessment is considered indicative and will evolve as our lending profile, assessment approach, data, and modelling methodologies continue to mature. For more information on the impact of climate on our reporting and financial statements, see page 34 . How we assess the climate risk impacts on other risk types We use climate scenario analysis to assess the impacts on other risks, including non-financial risks, traded risk and treasury risk. Non-financial risk – financial reporting risk and regulatory compliance risk We analysed the potential impacts associated with greenwashing, specifically focusing on inaccuracies in climate-related disclosures and shortcomings in product governance and marketing of sustainable finance offerings. Our findings indicate that under scenarios involving accelerated net-zero transitions and heightened regulatory scrutiny, we may face increased financial exposure to greenwashing incidents. Traded risk In 2025, we explored the potential fair value impacts of climate risks on our trading and banking portfolio. Our analysis evaluated portfolio performance under the long-term Downside Physical Risk scenario as well as two shorter-term scenarios focused on dry perils and wet perils aligned with NGFS’s short-term “Disasters and Policy Stagnation” scenario focusing on physical risk impacts over a one-year horizon. The assessment encompassed all major asset classes including interest rates, foreign exchange, credit and equities. The results supported our understanding of the climate resilience of the trading portfolio. Under both short-term scenarios, the portfolio exhibited gains driven by the long defensive profile in our Equity Derivatives positions and from Rate Options. Offsetting these were losses generated by distressed debt and secondary private credit loans and by rate exposures to countries and territories more sensitive to physical risk. Treasury risk – pensions This year, we conducted balance sheet and income statement projections for six of our largest pension plans and all regional plans, utilising macroeconomic variables influenced by climate change, which focused on the short- and medium-term horizons. Our exercise focused on a shorter-term scenario assessing the concurrent impacts of severe physical hazards with moderate transition risk. The scenario concentrated on physical climate risks, carbon pricing, economic growth trajectories, and evolving regulatory requirements. Key findings indicated that, at the peak stress point in the climate stress scenario (which was in the first projection year), the Group’s pension scheme funding levels were projected to decline slightly. This reduction was primarily attributable to a reduction in climate-sensitive bond and equity values. Treasury risk – liquidity Under the climate scenario analysis exercise, other risk types – aside from liquidity – are assessed over annual or multi-year horizons and are primarily capital-related stress events with limited effects on the bank’s liquidity. To specifically assess liquidity risk, a tailored 90-day climate scenario was developed, building on previous exercises and reflecting current industry perspectives on plausible climate outcomes. The analysis considered the impact of climate risk on key liquidity risk drivers including wholesale and retail deposit risk off-balance sheet facilities risk, credit downgrade risk, and intraday liquidity risk. No significant impact on our liquidity position was identified in the analysis. Insurance risk We are improving our ability to perform exploratory assessments of the solvency resilience of our biggest insurance businesses under climate stress scenarios. HSBC Holdings plc Annual Report on Form 20-F 213 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Resilience risk Ñ See page 138 for our definition of Resilience risk Resilience risk management Key developments in 2025 During the year, we conducted several initiatives to keep pace with geopolitical, regulatory and technology changes, and to help strengthen the management of resilience risk. – Where HSBC identified that enhancements were required to the Group’s operational resilience capabilities, these were incorporated into the Group’s business and investment planning, helping to ensure we continue to meet the expectations of our customers and our regulators. – We recognise that our customers were impacted at times by service disruptions. We responded to these in line with our Incident Management plans and aimed to recover with minimal delay and customer impact. Following any operational disruption, we conducted post-incident reviews to identify lessons and strengthen our operations. – We monitored markets affected by geopolitical events for any potential impact they may have on our colleagues and operations, enhancing response playbooks as events evolved. – We provided analysis and easy-to-access risk and control information and metrics to enable management to focus on non- financial risks in their decision making and appetite setting. – We prioritised our efforts on material risks and areas undergoing strategic growth, aligning our location strategy to this need. We also remotely provide oversight and stewardship, including support of chief risk officers, in territories where we have no physical presence. Governance and structure The Group Resilience Risk target operating model provides a globally consistent view across resilience risks, strengthening our risk management oversight. We view resilience risk across seven sub-risk types related to: technology and cybersecurity risk; third-party risk; transaction and payment processing risk; business interruption and incident risk; data risk; facilities availability, safety and security risk; and operational and resilience regulatory reporting risk. Risk appetite and key escalations for resilience risk are reported to the Group Risk Management Meeting and Group Risk Committee. Operational resilience We operate processes to support our operational resilience according to our Risk Management Framework. Operational resilience is our ability to anticipate, prevent, adapt, respond to, recover, and learn from internal or external disruption, and provide Important Business Services (IBS) to customers and clients, while seeking to minimise impact on the wider financial system when disruption occurs. We seek to achieve this via day-to-day oversight and ongoing assurance. We have invested to seek to improve response and recovery strategies for our IBS and Important Group Business Services, to align to regulatory and customer expectations and to help minimise any potential impacts should disruption occur. Business operations continuity We continue to monitor potential disruptive events, such as geopolitical volatility, adverse weather conditions and cyber attacks, and remain ready to take measures to help ensure business continuity in affected markets should the situation require. When disruptive events occur, businesses and infrastructure functions continually review their continuity plans and response to minimise any potential impacts. Regulatory compliance risk Ñ See page 138 for our definition of Regulatory compliance risk. Regulatory compliance risk management Key developments in 2025 Regulatory Compliance risk stewardship is provided across a wide range of transformational change and control enhancement initiatives supporting HSBC’s strategy and organisational structure; such as the framework for digital assets, including Regulatory Compliance’s stewardship of Markets and Securities Services (MSS)’ asset tokenisation and issuance initiatives, as well as Regulatory Compliance control frameworks, policies and governance processes. Regulatory horizon scanning and mapping capabilities continue to evolve with a focus on enhanced connectivity to risk management systems to support better traceability of regulatory obligations. Work is underway to transition from event-driven technology to incorporate cloud and analytics capability to enhance our oversight abilities in areas such as surveillance. Governance and structure The Group Head of Regulatory Compliance reports to the Group Chief Risk and Compliance Officer. Regulatory Compliance and Financial Crime teams work together and with relevant stakeholders to help achieve good conduct outcomes and provide enterprise-wide support on the Compliance risk agenda in close collaboration with colleagues from the Group Risk and Compliance function. Key risk management processes The Global Regulatory Compliance function is responsible for establishing global policies, standards, risk appetite, frameworks and tools to guide the Group’s management of Regulatory Compliance risk. The function provides oversight, review and challenge to the business, aiding them in identifying, assessing and mitigating Regulatory Compliance risks. Relevant events and issues are escalated in line with the Group’s Risk Management Framework including reporting to executive and non- executive risk governance committees for transparency, accountability and informed decision making. The Group Head of Regulatory Compliance attends the Risk and Compliance Leadership Meeting, the Group Risk Management Meeting, and the Group Risk Committee. HSBC Holdings plc Annual Report on Form 20-F 214 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial crime risk Ñ See page 138 for our definition of Financial crime risk. Financial crime risk management Key developments in 2025 We regularly review the effectiveness of our financial crime risk management framework, which includes continued consideration of complex sanctions and export control risks. We continued to respond to evolving financial sanctions and trade restrictions, including methods used to evade sanctions and export controls. We continued to make progress with several key financial crime risk management initiatives, including: – deployment of our intelligence-led, dynamic risk assessment capability for customer account monitoring in additional entities and business segments; – deployment and optimisation of a capability to increase our monitoring coverage of correspondent banking activity in additional markets; – enhancing our fraud controls and continuing to invest in, and monitor, technological developments; and – enhancements in response to the rapidly evolving and complex global payments landscape and refinement of the control framework required to support HSBC’s digital assets and currencies strategy. Governance and structure The structure of the Financial Crime team in Risk and Compliance remained substantively unchanged in 2025. The Group Head of Financial Crime continues to report to the Group Chief Risk and Compliance Officer, while the Group Risk Committee retains oversight of matters relating to financial crime . Key risk management processes We will not tolerate knowingly conducting business with individuals or entities believed to be engaged in criminal activity. We require everybody in HSBC to play their role in maintaining effective systems and controls to help prevent and detect financial crime. Where we believe we have identified suspected criminal activity or vulnerabilities in our control framework, we will take appropriate mitigating action. We manage financial crime risk because it is the right thing to do to protect our customers, shareholders, staff, the communities in which we operate, as well as the integrity of the financial system on which we all rely. We operate in a highly regulated industry in which these same policy goals are codified in law and regulation. We are committed to complying with the laws and regulations of all the markets in which we operate and apply a consistently high financial crime standard globally. We continued to invest in enhancing our operational control capabilities and technology solutions to deter and detect criminal activity. We further strengthened our financial crime risk taxonomy and control libraries and our monitoring capabilities through technology deployments. We developed more targeted metrics, and continued to seek to enhance our governance and reporting. We are committed to working in partnership with the wider industry and the public sector in managing financial crime risk. In 2025, our focus remained on measures to improve the overall effectiveness of the global financial crime risk management framework and promote a risk-based approach. Through our work with industry bodies, such as the Wolfsberg Group, we provided input into legislative and regulatory reform activities and supported the efforts of the global financial crime standard setter, the Financial Action Task Force. We did this by participating in consultations and other engagements focused on delivering more effective outcomes in managing financial crime risk, which also enhances financial inclusion. Key themes for external engagement include risk-based supervision, the use of innovative technology, payment transparency standards, fraud risk management, and tackling sanctions and export controls evasion. Model risk Ñ See page 138 for our definition of Model risk. Key developments in 2025 In 2025 , we continued to make improvements in our Model Risk Management (‘MRM’) processes amid regulatory changes in MRM requirements. Initiatives during the year included: – further updates to our MRM Framework to meet the requirements of the PRA’s SS1/23. Our multi-year programme of work is in progress to implement these changes across the full model landscape; – completing the identification of Deterministic Quantitative Methods (DQMs) across the organisation. These are complex and material calculators that although not technically models, still present similar risks; – continued enhancements to the development and validation processes for internal ratings-based (‘IRB’) models; – continued enhancements to our framework for the independent validation of models, including new GenAI techniques that are becoming more widely used; and – continued to work closely with businesses and infrastructure teams in developing a governance framework to manage the range of risks these AI techniques, including machine learning and agentic AI (autonomous systems powered by AI agents), can introduce. Governance and structure We have completed a review of model risk governance committees at the Group, business and functional levels to help ensure they provide effective and efficient oversight of model risk. The committees include senior leaders from the businesses, infrastructure teams and the Group Risk and Compliance function. They focus on model-related concerns and are supported by key model risk metrics. We have aligned our Committees to our new organisational structure with each of the four business segments having a Model Risk Committee focused on local requirements. The Group-level Model Risk Committee remains in place and is chaired by the Group Chief Risk and Compliance Officer, and the heads of key businesses participate in these meetings. Key risk management processes We use a variety of modelling approaches, including regression, simulation, sampling, machine learning and judgemental scorecards for a range of business applications. These activities include customer selection, product pricing, financial crime transaction monitoring, creditworthiness evaluation and financial reporting. Global responsibility for managing model risk is delegated from the Board to the Group Chief Risk and Compliance Officer, who authorises the Group Model Risk Committee. This committee regularly reviews our model risk management policies and procedures, and requires the first line of HSBC Holdings plc Annual Report on Form 20-F 215 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Model risk defence to demonstrate comprehensive and effective controls based on a library of model risk controls provided by Model Risk Management. Model Risk Management also reports on model risk to senior management and the Group Risk Committee on a regular basis through the use of the risk map, risk appetite metrics and top and emerging risks. We regularly review the effectiveness of these processes, including the model risk committee structure, to help ensure the appropriate understanding and ownership of model risk is embedded in the businesses and functions. Insurance manufacturing operations risk Ñ See page 139 for our definition of Insurance manufacturing operations risk. HSBC’s insurance business We sell insurance products through a range of channels including our branches, insurance sales forces, direct channels and third-party distributors. The majority of sales are through an integrated bancassurance model that provides insurance products principally for customers with whom we have a banking relationship, meanwhile the proportion of sales through other sources such as independent financial advisers, tied agents and digital platforms is increasing. For the insurance products we manufacture, the majority of sales are savings, universal life and protection contracts. We choose to manufacture these insurance products in HSBC subsidiaries based on an assessment of operational scale and risk appetite. Manufacturing insurance allows us to retain the risks and rewards associated with writing insurance contracts by keeping part of the underwriting profit and investment income within the Group. Our life insurance manufacturing subsidiaries operate in seven markets, which are Hong Kong, Macau, Singapore, mainland China, UK, Malta and Mexico. This excludes France where the sale of the insurance business was completed on 31 October 2025. In addition, we have: an interest in a life insurance manufacturing associate in India; captive insurance entities in Bermuda and Hong Kong; and a reinsurance entity in Bermuda. Where we do not have the risk appetite or operational scale to be an effective insurance manufacturer, we engage with a select number of leading external insurance companies in order to provide insurance products to our customers. These arrangements are generally structured with our exclusive strategic partners and earn the Group a combination of commissions, fees and a share of profits. We distribute insurance products in all of our geographical regions. This section focuses only on the risks relating to the insurance products we manufacture. Insurance manufacturing operations risk management Key developments in 2025 The insurance manufacturing subsidiaries follow the Group’s risk management framework. In 2025, we continued to strengthen the insurance specific policies, frameworks and controls particularly across the financial and capital reporting processes, stress testing, asset- liability management, reinsurance and insurance underwriting risks. During the year, there was continued market volatility observed across interest rates, equity and credit markets and foreign exchange rates. This was predominantly driven by geopolitical factors including the introduction of trade tariffs by the US, and wider inflationary concerns. The sale of the French insurance business HSBC Assurances Vie (France) was completed on 31 October 2025. Following HSBC’s announcement on 3 July 2025 of entering into a binding agreement to sell its UK life insurance business HSBC Life (UK) Limited, the balance sheet of the UK business has been reported as held for sale at 31 December 2025. Further details are provided on page 355 . Governance and structure Insurance manufacturing risks are managed to a defined risk appetite, which is aligned to the Group’s risk appetite and risk management framework, including its three lines of defence model. For details of the Group’s governance framework, see page 119 . The Global Insurance Risk Management Meeting oversees the control framework globally and is accountable to the IWPB Risk Management Meeting on risk matters relating to the insurance business. The monitoring of the risks within our insurance operations is carried out by Insurance Risk teams. The Group’s risk stewardship functions support the Insurance Risk teams in their respective areas of expertise. Stress and scenario testing Stress testing forms a key part of the risk management framework for the insurance business. We participate in local and Group-wide regulatory stress tests, as well as internally developed stress and scenario tests, including Group internal stress test exercises. The results of these stress tests and the adequacy of management action plans to mitigate these risks are considered in the Group’s ICAAP and the entities’ regulatory Own Risk and Solvency Assessments, which are produced by all material entities. Key risk management processes Market risk (Audited) All our insurance manufacturing subsidiaries have market risk mandates and limits that specify the investment instruments in which they are permitted to invest and the maximum quantum of market risk that they may retain. They manage market risk by using some or all of the techniques listed below, among others, depending on the nature of the contracts written. – We are able to adjust bonus rates and other discretionary benefits to manage the liabilities to policyholders for products with participating features. The effect is that a significant proportion of the market risk is shared with the policyholders. – We use asset and liability matching where asset portfolios are structured to support projected liability cash flows. – We use derivatives and other financial instruments, along with reinsurance to protect against adverse market movements. – We design new products to mitigate market risk, such as changing the investment return sharing proportion between policyholders and the shareholder. Credit risk (Audited) Our insurance manufacturing subsidiaries also have credit risk mandates and limits within which they are permitted to operate, which consider the credit risk exposure, quality and performance of their investment portfolios. Our assessment of the creditworthiness of issuers and counterparties is based primarily upon internationally recognised credit ratings and other publicly available information. HSBC Holdings plc Annual Report on Form 20-F 216 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Insurance manufacturing operations risk Stress testing is performed on investment credit exposures using credit spread sensitivities and default probabilities. We use a number of tools to manage and monitor credit risk. These include a credit report containing a watch-list of investments with current credit concerns, primarily investments that may be at risk of future impairment or where high concentrations to counterparties are present in the investment portfolio. Sensitivities to credit spread risk are assessed and monitored regularly. Capital and liquidity risk (Audited) Capital risk for our insurance manufacturing subsidiaries is assessed in the Group’s ICAAP, based on their financial capacity to support the risks to which they are exposed. Capital adequacy is assessed on both the relevant local insurance regulatory basis and an internal capital basis. Risk appetite buffers are set to ensure that the operations are able to remain solvent, allowing for business-as-usual volatility and extreme but plausible stress events. Liquidity risk is less material for the insurance business. It is managed by cash flow matching and maintaining sufficient cash resources, investing in high credit-quality investments with deep and liquid markets, monitoring investment concentrations and restricting them where appropriate, and establishing committed contingency borrowing facilities. Insurance manufacturing subsidiaries complete quarterly liquidity risk reports and an annual review of the liquidity risks to which they are exposed. Insurance underwriting risk (Audited) Our insurance manufacturing subsidiaries primarily use the following frameworks and processes to manage and mitigate insurance underwriting risks: – a formal approval process for launching new products or making changes to products to ensure insurance risks are identified and mitigated; – a product pricing and profitability framework, which requires initial and ongoing assessment of the adequacy of premiums charged on new insurance contracts to meet the risks associated with them; – a framework for customer underwriting; – reinsurance, which cedes risks to third-party reinsurers to keep risks within risk appetite, reduce volatility and improve capital efficiency; and – oversight by actuarial review committees in each of our entities of the methodology and assumptions that underpin IFRS 17 reporting to ensure that appropriate reserves are established to cover insurance underwriting risks. Insurance manufacturing operations risk in 2025 Measurement The following tables show the composition of the fair value of underlying items of the Group’s participating contracts at the reporting date and by the following type of contract: – ‘Life direct participating and investment discretionary participation feature (‘DPF’) contracts’ are life direct participating contracts and investment contracts with DPF. These are substantially measured under the variable fee approach measurement model. – ‘Life other contracts’ are measured under the general measurement model and mainly include protection insurance contracts as well as reinsurance contracts. The reinsurance contracts primarily provide diversification benefits over the life direct participating and investment DPF contracts. – ‘Other contracts’ includes investment contracts for which HSBC does not bear significant insurance risk. Balance sheet of insurance manufacturing subsidiaries by type of contract (Audited) Life direct participating and investment DPF contracts Life other contracts Other contracts Shareholder assets and liabilities Total At 31 Dec 2025 $m $m $m $m $m Financial assets 111,078 5,277 5,672 5,405 127,432 – financial assets designated and otherwise mandatorily measured at fair value through profit or loss 106,705 4,984 4,337 579 116,605 –  derivatives 136 8 — — 144 –  financial investments – at amortised cost 609 115 1,010 3,654 5,388 –  financial assets at fair value through other comprehensive income — — 3 214 217 –  other financial assets 3,628 170 322 958 5,078 Insurance contract assets 12 98 — — 110 Reinsurance contract assets — 5,948 — — 5,948 Assets held for sale 1 4,748 258 1,347 271 6,624 Other assets and investment properties 1,785 118 45 2,696 4,644 Total assets 117,623 11,699 7,064 8,372 144,758 Liabilities under investment contracts designated at fair value — — 5,288 — 5,288 Insurance contract liabilities 117,107 4,761 — — 121,868 Reinsurance contract liabilities — 680 — — 680 Liabilities of disposal groups held for sale 1 4,734 234 — 1,418 6,386 Other liabilities — — — 3,821 3,821 Total liabilities 121,841 5,675 5,288 5,239 138,043 Total equity — — — 6,715 6,715 Total liabilities and equity 121,841 5,675 5,288 11,954 144,758 HSBC Holdings plc Annual Report on Form 20-F 217 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Insurance manufacturing operations risk Balance sheet of insurance manufacturing subsidiaries by type of contract (continued) (Audited) Life direct participating and investment DPF contracts Life other contracts Other contracts Shareholder assets and liabilities Total At 31 Dec 2024 $m $m $m $m $m Financial assets 98,676 4,452 6,227 5,967 115,322 –  financial assets designated and otherwise mandatorily measured at fair value through profit or loss 94,327 4,233 4,839 690 104,089 –  derivatives 207 7 1 — 215 –  financial investments – at amortised cost 545 90 1,060 4,335 6,030 –  financial assets at fair value through other comprehensive income — — 6 73 79 –  other financial assets 3,597 122 321 869 4,909 Insurance contract assets 14 104 — — 118 Reinsurance contract assets — 5,013 — — 5,013 Assets held for sale 1 22,855 — — 1,367 24,222 Other assets and investment properties 1,792 64 36 1,970 3,862 Total assets 123,337 9,633 6,263 9,304 148,537 Liabilities under investment contracts designated at fair value — — 5,931 — 5,931 Insurance contract liabilities 102,605 4,427 — — 107,032 Reinsurance contract liabilities — 701 — — 701 Liabilities of disposal groups held for sale 1 21,772 39 — 1,609 23,420 Other liabilities — — — 4,438 4,438 Total liabilities 124,377 5,167 5,931 6,047 141,522 Total equity — — — 7,015 7,015 Total liabilities and equity 124,377 5,167 5,931 13,062 148,537 1 HSBC Life (UK) Limited is classified as held for sale at 31 December 2025. HSBC Assurances Vie (France) was classified as held for sale at 31 December 2024. Further details are provided on page 355 . Key risk types Market risk (Audited) Description and exposure Market risk is the risk of changes in market factors affecting HSBC’s capital or profit. Market factors include interest rates, equity and growth assets, credit spreads and foreign exchange rates. Our exposure varies depending on the type of contract issued. Our most significant life insurance products are contracts with participating features. These products typically include some form of capital guarantee or guaranteed return on the sums invested by the policyholders, to which bonuses are added if allowed by the overall performance of the funds. For contracts without participating features, some form of guarantee may still exist but HSBC’s ability to share risks with policyholders will be reduced. Funds supporting these savings products are invested in a mix of fixed income assets (to support guarantees) and other asset classes (to provide customers with the potential for enhanced returns). These products expose HSBC to the risk of variation in asset returns, which will impact our participation in the investment performance. In certain circumstances, asset returns may be insufficient to meet the policyholders’ guaranteed benefits. For non-participating contracts, any resulting shortfall is borne by HSBC. For unit-linked contracts, market risk is substantially borne by the policyholder, but some market risk exposure typically remains, as fees earned are typically related to the market value of the linked assets. Sensitivities The following table shows the sensitivity of the CSM, profit and total equity of our insurance manufacturing subsidiaries to changes in interest rates, credit spreads, growth assets and foreign exchange rates. These sensitivities are prepared in accordance with current IFRS Accounting Standards. Due in part to the nature of the guarantees, and the reinsurance and hedging strategies which may be in place, the relationship between the CSM, profit and total equity is not linear. The sensitivities are before management actions that may mitigate the effect of changes in the market environment. The lower profit after tax sensitivity to yield curve shifts is driven by improved asset and liability matching in mainland China, partly offset by the impact of methodology updates in Hong Kong. The 2025 sensitivities below exclude HSBC Assurances Vie (France) following completion of its sale on 31 October 2025. Further details are provided on page 355 . Sensitivity of HSBC’s insurance manufacturing subsidiaries to market risk factors (Audited) 2025 2024 Effect on CSM Effect on profit after tax for the year Effect on total equity Effect on CSM Effect on profit after tax for the year Effect on total equity $m $m $m $m $m $m +100 basis point parallel shift in yield curves ( 370 ) 36 36 ( 155 ) 83 52 -100 basis point parallel shift in yield curves ( 51 ) ( 127 ) ( 127 ) ( 249 ) ( 217 ) ( 186 ) +100 basis point shift in credit spreads ( 918 ) ( 15 ) ( 15 ) ( 907 ) ( 84 ) ( 115 ) -100 basis point shift in credit spreads 897 74 74 876 60 91 10% increase in growth assets 1 461 64 64 467 73 73 10% decrease in growth assets 1 ( 533 ) ( 75 ) ( 75 ) ( 514 ) ( 79 ) ( 79 ) 10% appreciation in US dollar exchange rate against local functional currency 102 20 20 71 17 17 10% depreciation in US dollar exchange rate against local functional currency ( 75 ) ( 15 ) ( 15 ) ( 26 ) ( 3 ) ( 3 ) 1 ‘Growth assets’ primarily comprise equity securities and investment properties. Variability in growth asset fair value constitutes a market risk to insurance manufacturing subsidiaries. HSBC Holdings plc Annual Report on Form 20-F 218 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Insurance manufacturing operations risk Credit risk (Audited) Description and exposure Credit risk is the risk of financial loss if a customer or counterparty fails to meet their obligation under a contract. It arises in two main risks for our insurance manufacturers: – the risk associated with credit spread volatility and default by debt security counterparties after investing premiums to generate a return for policyholders and shareholders; and – the risk of default by reinsurance counterparties and non- reimbursement for claims made after ceding insurance risk. The amounts outstanding at the balance sheet date in respect of these items are shown in the table on page 216 . The credit quality of the reinsurers’ share of liabilities under insurance contracts is assessed as ‘satisfactory’ or higher (as defined on page 141 ), with none of the exposure being either past due or impaired (2024: none). Credit risk on assets supporting unit-linked liabilities is predominantly borne by the policyholders. Therefore, our exposure is primarily related to liabilities under non-linked insurance and investment contracts and shareholders’ funds. The credit quality of insurance financial assets is included in the table on page 161 . The risk associated with credit spread volatility is to a large extent mitigated by holding debt securities to maturity, and sharing a degree of credit spread experience with policyholders. L iquidity risk (Audited) Description and exposure Liquidity risk is the risk that an insurance operation, though solvent, either does not have sufficient financial resources available to meet its obligations when they fall due, or can secure them only at excessive cost. Liquidity risk may be able to be shared with policyholders for products with participating features. The remaining maturity of insurance contract liabilities is included in Note 4 on page 319 . The amounts of insurance contract liabilities that are payable on demand are set out by the product grouping below and exclude insurance businesses classified as held for sale (2025: HSBC Life (UK) Limited; 2024: HSBC Assurances Vie (France). Further details are provided on page 355 . Amounts payable on demand (Audited) 2025 2024 Amounts payable on demand Carrying amount for these contracts Amounts payable on demand Carrying amount for these contracts $m $m $m $m Life direct participating and investment DPF contracts 108,416 117,107 98,275 102,605 Life other contracts 3,820 4,761 2,960 4,427 At 31 Dec 112,236 121,868 101,235 107,032 Insurance underwriting risk (Audited) Description and exposure Insurance underwriting risk is the risk of loss through adverse experience, in either timing or amount, of insurance underwriting parameters (non-economic assumptions). These parameters include mortality, morbidity, longevity, lapse and expense rates. The principal risk we face is that, over time, the cost of the contract, including claims and benefits, may exceed the total amount of premiums and investment income received. The tables on page 216 analyse our life insurance underwriting risk exposures by type of contract. The insurance underwriting risk profile and related exposures remain largely consistent with those observed at 31 December 2024. Sensitivities (Audited) The following table shows the sensitivity of the CSM, profit and total equity of our insurance manufacturing subsidiaries to changes in non- economic assumptions, after considering the impacts of reinsurance contracts held as risk mitigation. These sensitivities are prepared in accordance with current IFRS Accounting Standards. Sensitivity to lapse rates depends on the type of contracts being written. An increase in lapse rates typically has a negative effect on CSM (and therefore expected future profits) due to the loss of future income on the lapsed policies. However, some contract lapses have a positive effect on profit due to the existence of policy surrender charges. Mortality and morbidity risk is typically associated with life insurance contracts. The effect on profit of an increase in mortality or morbidity depends on the type of business being written. Expense rate risk is the exposure to a change in the allocated cost of administering insurance contracts. To the extent that increased expenses cannot be passed on to policyholders, an increase in expense rates will have a negative effect on CSM and profits. The impact of changing insurance underwriting risk factors is primarily absorbed within the CSM, unless contracts are onerous in which case the impact is directly to profit. The impact of changes to the CSM is released to profits over the expected coverage periods of the related insurance contracts. The 2025 sensitivities below exclude HSBC Assurances Vie (France) following completion of its sale on 31 October 2025. Further details are provided on page 355 . Sensitivity of HSBC’s insurance manufacturing subsidiaries to insurance underwriting risk factors (Audited) Effect on CSM Effect on profit after tax for the year Effect on total equity At 31 Dec 2025 $m $m $m 10 % increase in lapse rates ( 310 ) ( 6 ) ( 6 ) 10 % decrease in lapse rates 322 3 3 5 % increase in mortality and/or morbidity rates ( 85 ) ( 15 ) ( 17 ) 5 % decrease in mortality and/or morbidity rates 87 12 14 10 % increase in expense rates ( 48 ) ( 14 ) ( 14 ) 10 % decrease in expense rates 49 12 12 At 31 Dec 2024 10 % increase in lapse rates ( 282 ) ( 21 ) ( 30 ) 10 % decrease in lapse rates 297 23 36 5 % increase in mortality and/or morbidity rates ( 92 ) ( 16 ) ( 20 ) 5 % decrease in mortality and/or morbidity rates 102 14 23 10 % increase in expense rates ( 66 ) ( 11 ) ( 15 ) 10 % decrease in expense rates 68 12 15 HSBC Holdings plc Annual Report on Form 20-F 219 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Corporate governance report In this report, which constitutes our Directors' Report, we provide insights into our Group governance practices and the systems and policies in place that help ensure the Group is well managed, with effective oversight and controls. 220 The Board 224 Senior management 226 How we are governed 233 Board committees 249 Directors’ remuneration report 275 Share capital and other governance disclosures 280 Internal control 282 Employees 284 Statement of compliance 5 HSBC Holdings plc Annual Report on Form 20-F 220 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information The Board The Board, which seeks to promote the Group’s long-term success, deliver sustainable value to shareholders and promote a culture of openness and debate, comprises diverse, high-calibre members who have experience in our global markets. Group Chairman and executive Directors Brendan Nelson (76) Skills and experience : Brendan has extensive experience in financial services, gained through leadership positions at global firms and senior appointments on the Boards of global organisations. from KPMG in 2010. He served as non-executive Director on the Boards of bp plc, from 2010 to 2021, and NatWest Group plc, from 2010 to 2019. He was Chairman of the Audit Committee at both companies. Brendan is a qualified Chartered Accountant. He was President of the Institute of Chartered Accountants of Scotland from 2013 to 2014. He was a member of the Financial Services Practitioner Panel and the Financial Reporting Review Panel of the UK Financial Reporting Council. He currently serves as a non-executive Director of HSBC UK Bank plc. External appointments: – Chairman of BP Pension Trustees Limited – Director of the Institute of International Finance Career : Brendan spent over 25 years at KPMG LLP, where he was admitted as a Partner in 1984. During his time at KPMG, he held various positions, including Global Chairman of Banking and Global Chairman of Financial Services. He served on the KPMG UK Board, starting in 2000. He became a Vice Chairman in 2006 – a position he held until his retirement Group Chairman Appointed to the Board: September 2023 Group Chairman since: October 2025 Georges Elhedery (51) Skills and experience: Georges has almost 30 years of experience in the banking industry across Europe, the Middle East and Asia, and has held a number of executive roles at a regional, global business and functional level. Head of Global Banking and Markets, Middle East and North Africa; Chief Executive Officer for HSBC, Middle East, North Africa and Türkiye; Global Head of Markets; and co-Chief Executive Officer, Global Banking and Markets based in London. – Member of the UK-India CEO Forum – Member of the Semafor World Economy Global Advisory Board – Member of the Board of Directors of the Peterson Institute for International Economics – Member of the World Bank Private Sector Investment Lab – Member of Advisory Board of The China Children Development Fund – Principal Member of The Glasgow Financial Alliance for Net Zero – Member of Financial Services Task Force of the SMI Career: Georges was appointed Group CEO from 2 September 2024. He most recently served as Group CFO between January 2023 and September 2024. Georges joined HSBC in 2005 with extensive trading experience in London, Paris and Tokyo. He has since held a number of senior leadership roles, including External appointments: – Member of Monetary Authority of Singapore, International Advisory Panel – Member of the Asia Business Council – Member of the International Business Leaders Advisory Council (Beijing IBLAC) Group CEO Appointed to the Board: January 2023 Manveen Kaur (known as Pam Kaur) (62) Skills and experience: Pam has extensive global banking experience, gained over an almost 40-year career with a number of global financial institutions. She has performed many senior roles in audit, business, compliance, finance and risk management. Career: Pam was appointed Group CFO on 1 January 2025. Prior to this, she served as Group Chief Risk Officer from January 2020 and assumed responsibility for Compliance in June 2021. She served as Group Chief Risk and Compliance Officer until December 2024. Prior to joining HSBC in April 2013 as Group Head of Internal Audit, Pam held several senior positions including Global Head of Group Audit for Deutsche Bank; Chief Financial Officer and Chief Operating Officer of the Restructuring and Risk Division for Royal Bank of Scotland Group plc; Group Head of Compliance and Anti- Money Laundering for Lloyds TSB; and Chief Compliance Officer for Citigroup International. Pam previously served as a non-executive Director of Centrica plc and Aberdeen Group plc. She currently serves as a n on-executive Director of The Hongkong and Shanghai Banking Corporation Limited. External appointments: – No external appointments Group CFO Appointed to the Board: January 2025 Board committee membership key Committee Chair Group Audit Committee Group Risk Committee Group Remuneration Committee Nomination & Corporate Governance Committee Group Technology and Operations Committee Ñ For full biographical details of our Board members, see www.hsbc.com/who-we-are/our- people/board-of-directors. HSBC Holdings plc Annual Report on Form 20-F 221 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information The Board Independent non-executive Directors Geraldine Buckingham (48) Skills and experience : Geraldine is an experienced executive within the global financial services industry, with significant leadership experience in Asia. Career : Geraldine is the former Chair and Head of Asia-Pacific at BlackRock, where she was responsible for all business activities across Hong Kong, mainland China, Japan, Australia, Singapore, India and Korea. After stepping down from this role, she acted as senior adviser to the Chairman and Chief Executive Officer of BlackRock. She earlier served as BlackRock’s Global Head of Corporate Strategy, and previously was a partner within McKinsey & Company’s financial services practice. External appointments: – Independent non-executive Director of Brunswick Group Partnership Ltd – Independent non-executive Director of H.R.L. Morrison & Co Limited – Member of the Advisory Board of the McKinsey Health Institute Independent non-executive Director Appointed to the Board: May 2022 Wei Sun Christianson (69) Skills and experience : Wei brings extensive banking and regulatory experience gained over a 30-year international career. Career : Wei previously served as a Senior Advisor at Morgan Stanley, following her retirement in 2022 after serving as Co-CEO, Asia Pacific since 2011. She was also CEO, Morgan Stanley China from 2006 to 2022. Prior to joining Morgan Stanley, Wei held senior regulatory roles at the Hong Kong Securities and Futures Commission, where she was involved in drafting the regulatory structure that enabled companies from the People’s Republic of China to be listed outside China. External appointments: – Independent non-executive Director of LVMH Moët Hennessy Louis Vuitton SE Independent non-executive Director Appointed to the Board: January 2026 Rachel Duan (55) Skills and experience : Rachel is an experienced business leader with exceptional international experience in the US, Japan, mainland China and Hong Kong. Career : Rachel spent 24 years at General Electric (‘GE’), where she held positions including Senior Vice President of GE, and President and Chief Executive Officer of GE’s Global Markets where she was responsible for driving GE’s growth in Asia- Pacific, the Middle East, Africa, Latin America, Russia and the Commonwealth of Independent States. She also previously served as President and Chief Executive Officer of GE Advanced Materials China and then of Asia-Pacific; President and CEO of GE Healthcare China; and President and CEO of GE China. She has previously served as a non- executive Director of AXA S.A. External appointments: – Independent non-executive Director of Sanofi S.A. – Independent non-executive Director of the Adecco Group AG – Independent non-executive Director of Kering S.A. Independent non-executive Director Appointed to the Board: September 2021 Dame Carolyn Fairbairn (65) Skills and experience : Carolyn has significant experience across the media, government and finance sectors, and a deep understanding of the macroeconomic, regulatory and political environment. Career : An economist by training, Carolyn has served as a partner at McKinsey & Company, a member of the UK prime minister John Major’s Number 10 Policy Unit, and as Director- General of the Confederation of British Industry, and held senior executive positions at the BBC and ITV plc. She has extensive board experience, having previously served as non-executive Director of Lloyds Banking Group plc, The Vitec Group plc, Capita plc and BAE Systems plc. She has also served as a non-executive Director of the UK Competition and Markets Authority and the Financial Services Authority. External appointments: – Senior Independent Director of Tesco plc – Member of the Advisory Council of Frontier Economics Independent non-executive Director Appointed to the Board: September 2021 HSBC Holdings plc Annual Report on Form 20-F 222 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information The Board James Forese (63) Skills and experience : Jamie has over 30 years of international business and management experience in the finance industry working in areas including global markets, investment and private banking. Career : Jamie formerly served as President of Citigroup. He began his career in securities trading with Salomon Brothers, one of Citigroup’s predecessor companies, in 1985. In addition to his most recent role as Citigroup’s President, he was Chief Executive Officer of Citigroup’s Institutional Clients Group. He has held the positions of Chief Executive of its Securities and Banking division and Head of its Global Markets business. He previously served as non-executive Chairman of Global Bamboo Technologies. Jamie currently serves as non-executive Chair of HSBC North America Holdings Inc. External appointments: – No external appointments Independent non-executive Director Appointed to the Board: May 2020 Ann Godbehere (70) Skills and experience: Ann brings deep financial acumen and extensive financial services experience over a 30-year career spanning insurance, retail and private banking, and wealth management. She also provides global perspectives, drawing upon experiences and insights gained from a long career in international business. Career: After joining Swiss Re in 1996, Ann served as the company’s Chief Financial Officer from 2003 to 2007. She was also Interim Chief Financial Officer of Northern Rock Bank from 2008 to 2009 in the period immediately after its nationalisation. Ann also has extensive board experience, including with FTSE 100 companies, having previously served as non-executive Director of Prudential plc, British American Tobacco plc, UBS AG, UBS Group AG and as Senior Independent Director of Rio Tinto plc and Rio Tinto Limited. She currently serves as non- executive Chair of HSBC Bank plc. External appointments: – Non-executive Director and Chair of the Audit Committee of Stellantis N.V. – Non-executive Director and Chair of the Audit and Risk Committee of Shell plc Independent non-executive Director Appointed to the Board: September 2023 Senior Independent Director: May 2024 Steven Guggenheimer (60) Skills and experience : Steven brings extensive insight into technologies ranging from artificial intelligence to Cloud computing, through his experience advising businesses on digital transformation. Career : Steven has more than 25 years of experience at Microsoft, including more than a decade as Corporate Vice President, where he led teams focused on original equipment manufacturers, developers and independent software vendors and artificial intelligence solutions. External appointments: – Independent non-executive Director of BT Group plc – Independent non-executive Director of Leupold & Stevens, Inc – Independent non-executive Director of Forrit Holdings Limited – Member of Advisory Board of Quantexa Limited Independent non-executive Director Appointed to the Board: May 2020 Dr José Antonio Meade Kuribreña (56) Skills and experience : José has extensive experience in public administration, banking and financial policy. Career : José has held cabinet-level positions in the federal government of Mexico, including as Secretary of Finance and Public Credit, Secretary of Social Development, Secretary of Foreign Affairs and Secretary of Energy. Prior to his appointment to the cabinet, he served as Undersecretary and as Chief of Staff in the Ministry of Finance and Public Credit. José is also a former Director General of Banking and Savings at the Ministry of Finance and Public Credit, and served as Chief Executive Officer of the National Bank for Rural Credit. He currently serves as non- executive Chair of Grupo Financiero HSBC, S. A. de C. V, HSBC Latin America Holdings (UK) Limited and of HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo Financiero HSBC. External appointments: – Independent non-executive Director of Grupo Comercial Chedraui, S.A.B. de C.V. – Independent Member of the Technical Committee of Fibra Uno Administracion SA de CV – Member of the Advisory Board of the University of California, Centre for US-Mexican Studies – Member of the UNICEF Mexico Advisory Board – Independent non-executive Director of Nemak, S.A.B de C.V Independent non-executive Director Appointed to the Board: March 2019 Workforce engagement non-executive Director since: June 2022 HSBC Holdings plc Annual Report on Form 20-F 223 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information The Board Kalpana Morparia (76) Skills and experience : Kalpana is a skilled business leader with significant experience gained through a 45-year career in banking across Asia, primarily in India. Career : Kalpana’s most recent executive role was as Chair of J.P. Morgan, South and Southeast Asia and a member of J.P. Morgan’s Asia executive committee, held until her retirement in 2021. Before J.P. Morgan, she was the Joint Managing Director of ICICI Bank, India’s second-largest bank, from 2001 to 2007. She has previously served as a non-executive Director on the boards of Hindustan Unilever Limited, Dr.Reddy’s Laboratories Ltd and Meesho Inc. Kalpana also serves as a board and governing council member of several non-profit organisations in the education sector. External appointments: – Independent non-executive Director of The Great Eastern Shipping Company Limited – Independent non-executive Director of Philip Morris International Inc – Member of the Mentor Council of the Institute for Sustainability, Employment and Growth (ISEG Foundation) Independent non-executive Director Appointed to the Board: March 2023 Eileen Murray (67) Skills and experience : Eileen has extensive knowledge in financial services, technology and corporate strategy from a career spanning more than 40 years. Career : Eileen previously served as co- CEO of Bridgewater Associates, LP. Before this, she was CEO for Investment Risk Management LLC, and President and co-CEO of Duff Capital Advisors. She also served as Chair of the Financial Industry Regulatory Authority. Eileen started her career at Morgan Stanley, where she held positions including Controller, Treasurer, and Global Head of Technology and Operations, as well as Chief Operating Officer for its Institutional Securities Group. She was also Head of Global Technology, Operations and Product Control at Credit Suisse. External appointments: – Independent non-executive Director of Guardian Life Insurance Company of America – Chair of Broadridge Financial Solutions, Inc – Chair of Invisible Urban Charging – Operating partner of Liberty City Ventures Independent non-executive Director Appointed to the Board: July 2020 Swee Lian Teo (66) Skills and experience : Swee Lian brings extensive experience within the international financial services industry, having previously spent over 27 years with the Monetary Authority of Singapore (‘MAS‘). Career : During Swee Lian’s time at the MAS, she worked in foreign reserves management, financial sector development, strategic planning and financial supervision, before she became the Deputy Managing Director for Financial Supervision. She retired from the MAS in 2015 after serving as Special Advisor, focused on MAS’s role in the international regulatory framework, in the Managing Director’s office. Swee Lian previously served as a non-executive Director on the boards of AIA Group Limited, Singapore Telecommunications Limited and the Dubai Financial Services Authority. External appointments: – Chair of CapitaLand Integrated Commercial Trust Management Limited – Director of Clifford Capital Pte Ltd – Chair of Singapore Post Limited Independent non-executive Director Appointed to the Board: October 2023 Angela McEntee (49) Skills and experience : Angela is a qualified solicitor with extensive legal, regulatory, risk, and corporate governance experience. She has significant expertise in the UK and Hong Kong Corporate Governance Codes and Listing Rules having worked with the Holdings Board and Management Committees since joining HSBC. Career : Prior to joining HSBC in 2020, Angela held senior roles in the Governance function at NatWest Group plc including legal, governance, regulatory affairs and compliance, latterly providing support to the Board Risk and Audit Committees, together with oversight for regulatory engagement and advice on individual accountabilities. Group Company Secretary Appointed: January 2026 Former Directors who served during the year Sir Mark Tucker retired from the Board on 30 September 2025 Ñ For full biographical details of our Board members, see www.hsbc.com/who-we-are/our-people/board-of-directors. HSBC Holdings plc Annual Report on Form 20-F 224 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information The Board Senior management Senior management, which includes the Group Operating Committee, supports the Group CEO in the day-to-day management of the business and the implementation of strategy. Richard Blackburn (60) Group Chief Risk and Compliance Officer Richard was appointed Group Chief Risk and Compliance Officer in April 2025, having held the role in an interim capacity since January 2025. With 36 years in financial services and over 20 years at HSBC, he has held several senior positions including Regional Chief Risk Officer for Europe and MENAT, Chief Risk & Compliance Officer for Global Banking and Markets, and Chief Risk & Compliance Officer for Global Commercial Banking. Barry O’Byrne (50) Chief Executive Officer, International Wealth & Premier Banking Barry was appointed CEO of International Wealth and Premier Banking in October 2024. He joined HSBC in 2017 as Chief Operating Officer for Global Commercial Banking and became CEO of the business in 2019. Before HSBC, Barry spent 19 years at GE Capital where he held various senior leadership roles, including CEO and Chief Operating Officer for GE Capital International. Bob Hoyt (61) Group Chief Legal Officer Bob joined HSBC as Group Chief Legal Officer in January 2021. He leads HSBC’s global legal function, advising the Board, Chief Executive and senior management on legal and regulatory matters. Bob previously held positions in the US government as General Counsel of the US Department of the Treasury, and Associate Counsel to the President. Russell Jackson (42) Group Head of Internal Audit Russell Jackson was appointed Group Head of Internal Audit in June 2025. He is a standing attendee of the Group Operating Committee. He joined HSBC in 2023 as Group Head of Enterprise Risk. Prior to joining HSBC, he served as CEO of Fnality Services. He has also previously held a range of risk and regulatory roles at the Bank of England and Prudential Regulation Authority. David Liao (53) Co-Chief Executive, Asia and Middle East David was appointed Co-Chief Executive of the Asia-Pacific region in 2021, with his role expanding to cover the Middle East in January 2025. Since joining HSBC in 1997, he has held many senior roles and now serves as Chair of HSBC Bank (China) Company Limited, and as a Director of Bank of Communications Co., Limited and Hang Seng Bank Limited. David Lindberg (50) Chief Executive Officer, HSBC UK Bank plc David was appointed CEO of HSBC UK Bank plc in December 2025. With 27 years’ international banking experience, he has led businesses in the UK, America and Australia, focusing on retail, commercial banking, and digital transformation. He previously served as CEO of Retail Banking at NatWest, CEO of Commercial and Business Banking for Westpac Group, CEO of Consumer Banking for Westpac Group and other senior roles at CBA, ANZ and First Manhattan. Stuart Riley (51) Group Chief Information Officer Stuart was appointed Group Chief Information Officer in February 2024. He is responsible for leading the bank’s technology strategy, enabling the delivery of an efficient, resilient, and innovative digital bank. Prior to joining HSBC, he was Co-Chief Information Officer of Citi and previously held senior technology roles at Deutsche Bank. Michael Roberts (65) Chief Executive Officer, HSBC Bank plc, and Corporate and Institutional Banking Michael was appointed CEO of Corporate and Institutional Banking and Western Markets in January 2025, also serving as CEO of HSBC Bank plc. He previously led HSBC US and Americas until December 2024. Before joining HSBC in 2019, Michael spent over 30 years at Citigroup, holding senior roles such as Global Head of Corporate Banking and Capital Management. Surendra Rosha (57) Co-Chief Executive, Asia and Middle East Surendra was appointed Co-Chief Executive of the Asia-Pacific region in 2021, with his role expanding to the Middle East in January 2025. He is a Director of The Hongkong and Shanghai Banking Corporation Limited and Saudi Awwal Bank. Since joining HSBC in 1991, he has held senior positions including Head of Institutional Sales, Asia-Pacific and Chief Executive for HSBC India. Aileen Taylor (53) Group Chief People & Governance Officer Aileen was appointed Group Chief People & Governance Officer in October 2024. Aileen joined HSBC in 2019 as Group Company Secretary and Chief Governance Officer and became Group Chief People & Governance Officer in 2024. Prior to joining HSBC, she spent 19 years at the Royal Bank of Scotland Group, holding various legal, risk and compliance roles. Suzy White (49) Group Chief Operating Officer Suzy was appointed Group COO in October 2024. With over 25 years at HSBC, she has held numerous senior roles including COO for Global Banking and Markets, Regional COO for Global Markets (Americas) and Chief Risk Officer for Global Banking and Markets and Commercial Banking in the US. She is a Director of HSBC Bank (Singapore) Limited. Other Senior Management who served during the year: – Jonathan Calvert Davies, former Group Head of Internal Audit and standing attendee of the Group Operating Committee, stepped down on 2 June 2025. – John David (Ian) Stuart, former Chief Executive Officer, HSBC UK Bank plc stepped down as a Group Operating Committee member on 7 December 2025. He assumed the role of Group Customer and Culture Director on 8 December and is a standing attendee of the Group Operating Committee . HSBC Holdings plc Annual Report on Form 20-F 225 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Board and senior management diversity We value difference We believe that a diverse and inclusive Board, reflective of the communities we serve, is a critical component of effective decision-making and of developing a sustainable and successful business for HSBC. Gender and ethnic representation As at 31 December 2025, the Board met the targets set out within the UK Listing Rule 6.6.6 (9) and FTSE Women Leaders Review. Female representation on the Board was 62% and two women held senior Board positions. The Board had six Directors who identified as being from an ethnic minority background. Following Wei Sun Christianson’s appointment on 1 January 2026, female representation increased to 64% and the number of Directors from ethnic minority backgrounds increased to seven. The tables below outline the current gender and ethnic representation of the HSBC Holdings Board and executive management reflecting data gathered through self-identification as at 31 December 2025 in accordance with the requirements of UK Listing Rule 6.6.6 (10). Gender identity Board members Executive management 2 Number % Number of senior positions 1 Number % Men 5 38 2 10 77 Women 8 62 2 3 23 Other — — — — — Not specified/prefer not to say — — — — — Ethnic background Board members Executive management 2 Number % Number of senior positions 1 Number % White British or other White (including minority-White groups) 7 54 2 9 69 Mixed/multiple ethnic groups — — — — — Asian/Asian British 4 31 1 3 23 Black/African/ Caribbean/Black British — — — — — Other ethnic groups 2 15 1 1 8 Not specified/prefer not to say — — — — — 1 Senior positions on the Board comprise the Group Chairman, Group CEO, Group CFO and Senior Independent Director. 2 Executive management comprises the Group Operating Committee members and the Group Head of Internal Audit. Skills and experience As it is essential to the effective governance of the Group, and the Board’s oversight and challenge of management, the Board ensures that collectively and individually, the Board possess the necessary skills, knowledge, expertise and experience. The summary provides an overview of the skills and experiences held by the non-executive Directors on the Board. This is based on the current skills matrix, which is reviewed annually by the Nomination & Corporate Governance Committee to ensure that the Board has the skills and experience required to effectively discharge its duties and to support succession planning discussions. The skills and experiences of the newly appointed non-executive Director are also included in the summary. 11 8 9 7 4 5 6 3 9 Banking Finance Risk Customer Digital technology Sustainability Direct Asia market experience Direct UK market experience Global business experience 1 . HSBC Holdings plc Annual Report on Form 20-F 226 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information How we are governed We are committed to high standards of corporate governance. The Group has in place a comprehensive range of policies and procedures to help ensure that its end-to-end governance is well managed, with appropriate and effective oversight and controls. Board of Directors A schedule of matters reserved for the Board is set out within its terms of reference, which are available at www.hsbc.com/who-we- are/our-people/board-of- directors/board- responsibilities. The Board has overall, collective responsibility for the long-term success of the Group and delivery of sustainable value to shareholders. Led by the Group Chairman, the Board is responsible for, among other matters: – approving the Group’s strategy and objectives, and monitoring the alignment of the Group’s purpose, strategy and values with the desired culture and standards; – setting the Group’s risk appetite and monitoring the Group’s risk profile; – approving and monitoring capital and financial resource plans for achieving strategic objectives, including material transactions; – considering and approving the Group’s technology and environmental, social and governance strategies; – reviewing the effectiveness of stakeholder engagement mechanisms, including engagement with the workforce; – approving appointments to the Board and Board roles, and the remuneration of independent non-executive Directors; – reviewing and approving changes to the Group’s overall corporate governance arrangements; and – providing entrepreneurial leadership of the Group within a framework of prudent and effective controls, which enable risks to be assessed and managed. The Board delegates oversight of certain matters to its committees, which are each chaired by a non-executive Director. Board committees provide regular reports on their activities and make recommendations to the Board. Only the Group Chairman and non-executive Directors are members of Board committees. Details of committee memberships are in the Directors' biographies in 'The Board' section on pages 220 to 223 . Terms of reference of the Board committees are available at www.hsbc.com/who-we-are/our-people/board-of-directors/board-committees. Chairman’s Committee An ad hoc committee which provides Board members with the opportunity to consider time-critical matters between scheduled Board meetings. Group Audit Committee ('GAC') Oversees matters relating to the Group’s internal controls, financial resourcing and reporting, internal and external audit, and whistleblowing arrangements. For more information, see the Committee’s report from page 236 . Nomination & Corporate Governance Committee Oversees Board and senior management succession planning and monitors the corporate governance framework of the Group. For more information, see the Committee’s report from page 233 . Group Remuneration Committee Responsible for reviewing and making recommendations to the Board, for approval by shareholders, on the Group remuneration policy and approving the remuneration of the executive Directors and other senior employees. For more information, see the committee’s report from page 249 . Group Risk Committee ('GRC') Oversees and advises the Board on all risk-related matters, including financial and non-financial risks. For more information, see the Committee’s report from page 242 . Group Technology & Operations Committee ('GTO') Oversees HSBC’s technology and operations strategies and monitors alignment with overall Group strategy. For more information, see the Committee’s report from page 246 . Other Governance Forums Board Oversight Sub-Group: an informal mechanism whereby a smaller group of Board members and management may meet on an ad hoc basis to discuss emerging issues and upcoming Board matters. This Sub-Group is chaired by the Group Chairman. Board Sustainability Working Group ('SWG'): supports the delivery of the sustainability strategy and provides oversight and guidance in relation to the Group’s sustainability activities. The SWG is comprised of four non-executive Directors. Further information about SWG activities is on page 57 . The Board delegates day-to-day management of the business and delivery of strategy to the Group CEO. During the year, the Group CEO was supported in these responsibilities by the Group Operating Committee ('Group OpCo'). Group Operating Committee (Group OpCo) Supports the Group CEO in the day-to-day management of the Group. Comprised of 12 members of senior management including infrastructure heads and the CEOs of each of our four business areas. The Group OpCo members are set out on page 224 . The Group OpCo operates under written terms of reference and its members report to the Board on matters as appropriate. A number of committees support the Group OpCo by providing specialist oversight and guidance of the matters delegated to them. Such matters include restructuring and investment considerations, risk management and controls, financial reporting and disclosures. Group Finance Management Meeting Group Risk Management Meeting Group Disclosure Committee Acquisitions and Disposals Committee HSBC Holdings plc Annual Report on Form 20-F 227 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information How we are governed Board roles and responsibilities The roles of Group Chairman and Group CEO are held by two different individuals. There is a clear division of responsibilities between the leadership of the Board by the Group Chairman, and the executive responsibility for day-to-day business management undertaken by the Group CEO. A summary of director roles and their responsibilities is set out below. Full details are available at https://www.hsbc.com/who-we-are/our- people/board-of-directors/board-responsibilities. Roles Responsibilities Group Chairman – Provides effective leadership of the Board and promotes the highest standards of corporate governance practices. – Leads the Board in providing strong strategic oversight and setting the Board’s agenda, culture and values. – Leads the Board in challenging management’s thinking and proposals, and fosters open and constructive debate among Directors. – Maintains internal and external relationships with key stakeholders, and communicates investors’ views to the Board. – Organises periodic monitoring and evaluation, including externally facilitated evaluation, of the performance of the Board, its committees and individual Directors. – Leads on succession planning for the Board and its committees, ensuring appointments reflect diverse cultures, skills and experiences. Group CEO – Leads and directs the fulfilment of the Group’s purpose and strategy, in alignment with the desired culture and values as set by the Board. – Leads the Group Operating Committee with responsibility for the day-to-day leadership and management of the Group, in accordance with the authority delegated to him by the Board. – Maintains effective relationships with key internal and external stakeholders including the Group Chairman, the Board, customers, regulators, governments and investors. – Maintains accountability for the Group’s compliance with applicable laws, codes, rules and regulations, good market practice and HSBC’s own standards, value and policies. Group CFO – Supports the Group CEO in developing and implementing the Group strategy, and recommends the annual budget and long-term strategic and financial resource plan. – Leads the Finance function and is responsible for effective financial and regulatory reporting, including the effectiveness of the processes and controls, to ensure the financial control framework is robust and fit for purpose. – Maintains relationships with key stakeholders including shareholders. Senior Independent Director – Supports the Group Chairman, acting as intermediary for non-executive Directors when necessary. – Leads the non-executive Directors in the oversight of the Group Chairman, supporting the clear division of responsibility between the Group Chairman and the Group CEO. – Listens to shareholders’ views if they have concerns that cannot be resolved through the normal channels. Non-executive Directors – Provide input on the development of Group strategy. – Challenge and oversee the performance of management in achieving agreed corporate goals and objectives. – Contribute to the assessment and monitoring of culture. – Maintain internal and external relationships with the Group’s key stakeholders. Group Company Secretary – Maintains strong and consistent governance practices at Board level and throughout the Group. – Supports the Group Chairman in ensuring effective functioning of the Board and its committees and engagement between senior management and non-executive Directors. – Facilitates induction and professional development of non-executive Directors. – Advises and supports the Board and management in ensuring effective end-to-end governance and decision making across the Group. Operation of the Board The Board is ordinarily scheduled to meet at least seven times a year. In 2025, the Board held eight scheduled meetings, supplemented by two ad hoc meetings. The Board agendas are set by the Group Chairman, supported by the Group CEO and the Group Company Secretary. The Board approved the appointment of Angela McEntee as Group Company Secretary, with effect from 1 January 2026. Angela is a qualified solicitor with significant legal, regulatory, risk and corporate governance experience (for further details, read Angela's biography on page 223 ). Aileen Taylor, formerly the duly appointed Group Company Secretary, remains in her role as Group Chief People & Governance Officer. The Group Chief People & Governance Officer, Group Chief Risk and Compliance Officer and the Group Chief Legal Officer were regular attendees at Board meetings during the year. Other members of senior management were invited to attend to present specific matters. The CEOs of our four business areas attended Board strategy sessions. External presenters, including representatives from regulators, were invited to attend meetings to provide specialist input and context. Governance practices are in place to enable Board and Board committee meetings to operate effectively. Papers presented are expected to follow a template to ensure that Directors have the appropriate information to take informed decisions. Each template requires authors to describe any steps taken to engage with relevant stakeholders and explain the extent to which stakeholders are, or will be, impacted by the matter under consideration, and how this has influenced any recommendations to the Board or committee. The Board receives regular reports from committee Chairs on key matters and discussions from committee meetings. The Group Chairman meets with the non-executive Directors without the executive Directors in attendance after Board meetings and otherwise, as necessary. All Directors are encouraged to have contact with management at all levels and have full access to management information as needed. Visits to local businesses are arranged for the Directors when they attend Board meetings in different locations, and when travelling for other reasons. Members of senior management often attend Directors’ engagements. HSBC Holdings plc Annual Report on Form 20-F 228 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information How we are governed Meeting attendance Meeting attendance by Board and Board committee members in 2025 is shown below. Attendance is shown as the number of meetings attended out of the total number of meetings each person was eligible to attend during the year. Board of Directors 1 Group Audit Committee Nomination & Corporate Governance Committee Group Remuneration Committee Group Risk Committee Group Technology & Operations Committee General Meetings 2 Group Chairman Sir Mark Tucker 3 7/7 6/6 1/1 Brendan Nelson 3 10/10 9/9 8/8 8/8 6/6 1/1 Executive Directors Georges Elhedery 10/10 1/1 Pam Kaur 10/10 1/1 Non-Executive Directors Geraldine Buckingham 4,5 9/10 8/9 8/8 1/1 1/1 Rachel Duan 4 10/10 8/9 8/8 6/6 1/1 Dame Carolyn Fairbairn 4 10/10 8/8 6/6 7/8 1/1 James Forese 10/10 9/9 8/8 8/8 1/1 Ann Godbehere 10/10 9/9 8/8 6/6 1/1 Steven Guggenheimer 2,4 10/10 7/8 8/8 5/6 0/1 José Antonio Meade Kuribreña 10/10 9/9 8/8 6/6 1/1 Kalpana Morparia 10/10 8/8 6/6 6/6 1/1 Eileen Murray 10/10 8/8 6/6 8/8 6/6 1/1 Swee Lian Teo 10/10 8/8 8/8 6/6 1/1 1    The total number of Board of Directors meetings comprises eight scheduled meetings and two ad hoc meetings. 2    Comprised of the AGM held on 2 May 2025. Steven Guggenheimer was unable to attend the AGM due to personal circumstances. 3    Sir Mark Tucker retired from the Board with effect from 30 September 2025. Brendan Nelson was appointed Group Chairman on an interim basis with effect from 1 October 2025 and assumed the role on a permanent basis on 3 December 2025. Brendan Nelson attended seven Board meetings as an independent non- executive Director and three Board meetings as Group Chairman. 4    Due to prior commitments, Geraldine Buckingham was unable to attend the Board meeting in March and the Group Audit Committee meeting in October, Dame Carolyn Fairbairn was unable to attend the Group Risk Committee meeting in June, Steven Guggenheimer was unable to attend the Nomination & Corporate Governance Committee and Group Technology and Operations Committee meetings in July, and Rachel Duan was unable to attend the Group Audit Committee Meeting in September. 5    Geraldine Buckingham stepped down from the Remuneration Committee with effect from 31 January 2025. Matters considered by the Board in 2025 Activities and areas of focus Group strategy and business performance – Agreed and monitored performance towards delivery of Group strategic priorities and reviewed and approved home market and global business strategies. – Provided strategic input to the Group's refreshed ambition and oversaw operational and governance progress towards creating a more simple, agile and customer-centric organisation, including implementation of the new organisational design, our new Leadership Principles and Group-wide leadership framework, How We Lead. – Reviewed strategic growth opportunities, including detailed consideration of the proposal to privatise Hang Seng Bank Limited. – Oversaw strategic disposals and targeted business reviews to support long-term, sustainable growth by focusing on areas of competitive strengths. – Monitored the continued development of the Group's environmental, social and governance strategies, including oversight and approval of the Net Zero Transition Plan 2025, with the support of the Board Sustainability Working Group. ESG matters formed a regular part of Board discussions during the year with formal updates provided at six scheduled Board meetings. Financials – Reviewed and approved key disclosures, including the Annual Report and Accounts 2024, Interim Report 2025 and quarterly earnings releases. – Reviewed and approved distributions, including dividend payments and share buy-backs. – Approved renewal of the various debt issuance programmes. – Reviewed and approved the Financial Resource Plan; oversaw resource allocation and investment decisions. – Provided oversight of key accounting judgements, monitored ECLs and the impact of strategic transactions and significant litigation from an accounting perspective. Risk, Regulatory and Legal –  Reviewed and approved frameworks, control documents, core processes and legal and regulatory responsibilities including: – the Group’s risk appetite statement; – Individual Liquidity and Capital Adequacy Assessment Processes, Internal Climate Scenario Analysis, Group Internal Stress Test, Bank Capital Stress Test and other stress testing; – the Group’s Human Rights and Modern Slavery Statement; – consideration of updates in relation to the Group’s recovery and resolution capabilities and related documentation, including testing; – the PRA Operational Resilience self-assessment; – risk data aggregation and risk reporting framework aligned to the Basel Committee on Banking Supervision 239 Principles; – the efficacy of Model Risk Management (’MRM’) activities within HSBC; – supervisory requirements, which included preparations in anticipation of new reporting requirements in respect of material controls, under the UK and Hong Kong Corporate Governance Codes that take effect for the company's financial year starting on 1 January 2026, and listing authority renewals; – reviewed the legal implications of strategic transactions, and the impact of significant litigation faced by the Group; and – PRA attendance at meetings and other engagements, including continued regular engagement in relation to leadership and organisational changes. Technology – Oversaw continued strategic alignment of the Group’s technology infrastructure, and the programme to simplify and enhance system resilience, and accelerate digital transformation across the bank. HSBC Holdings plc Annual Report on Form 20-F 229 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information How we are governed Activities and areas of focus People & Culture – Oversaw the Group’s refreshed ambition to become the most trusted bank globally, putting customers at the heart of everything we do, and the development of our six new Leadership Principles and the How We Lead framework. – Received results of the employee Snapshot survey and employee Pulse surveys. – Participated in deep-dive sessions on people matters including on the future state of the workforce. – Participated in various workforce engagement activities and updates. External – External insights gained through presentations and talks by external parties, for example government officials and regulators. Governance – Oversaw development of our refreshed governance framework and operating rhythm. – Approved the appointments of a new Group Chairman, independent non-executive Director and Group Company Secretary. – Reviewed and approved Group policies, terms of reference and delegations of authority. – Undertook an internal Board and committee performance effectiveness review. – Participated in stakeholder engagement activities. – Made recommendations to shareholders for approval at the 2025 AGM. – Continued oversight of Director independence, external appointments and conflicts of interest. Cultural oversight The Board has responsibility for ensuring that HSBC’s culture is aligned with the Group’s purpose, values and strategy, and for assessing and monitoring how the desired culture has been embedded and is being sustained. Our culture is an enabler of our ambition and strategy, and we are committed to a high performance culture, where talented people can thrive, raising the standards of what we do every day for the benefit of our customers, colleagues, shareholders and communities. During 2025, the Board oversaw the development and implementation of our new Leadership Principles and the launch of our new, Group- wide leadership framework, How We Lead. The Leadership Principles set out our expectations for leaders across HSBC, and How We Lead provides the common leadership language, behaviours and tools to enable us to deliver better outcomes for our customers, colleagues and other stakeholders. A number of Board members supported the launch of How We Lead at our senior leadership event in June 2025 and the Board received regular updates on the roll out and further development of the How We Lead framework. A Board Culture Health Check has been developed and implemented to support the Board in assessing how leaders across the Group are embracing the Leadership Principles, and embedding the How We Lead tools and language in authentic ways to improve outcomes. The Board also received updates during the year from employee Pulse surveys designed to gauge employee awareness, sentiment, and understanding of organisational changes. A management Advisory Group, led by the Group Chief People & Governance Officer and the Group Customer and Culture Director, and consisting of representatives from across our business areas and functions, has been established to support and advise on the delivery and implementation of How We Lead. Non-executive Directors attend Advisory Group meetings on a rotating basis which provides them with greater insight into the Group’s cultural transformation and ensures there is alignment between the Board’s expectations on culture and management’s delivery and implementation. The Group Customer and Culture Director role, reporting directly to the Group CEO, was newly created during the year and has responsibility for ensuring that the customer’s voice is embedded at the heart of our strategy. Working closely with the Group OpCo, the Group Customer and Culture Director ensures that colleagues across the Group are equipped with the right skills and tools to support our customers and we can meet customers' needs through the development of market- leading products and propositions. The Group Chief People & Governance Officer provides a regular paper to the Board covering key priorities, updates and emerging areas of focus in people matters. Each scheduled Board meeting begins with a ’customer and culture moment’, at which examples of recent customer, employee or other stakeholder activities and interactions which demonstrate ways of working, perspectives and other insights into culture across the Group are presented. The Board receives further cultural insights from the results of our all- employee Snapshot survey and broader management reporting, which provides key data indicators, including on peoples' behaviours, sentiment and business outcomes. The governance structure supporting the Board further facilitates effective oversight of key people and culture matters. Through the work of the Group Audit Committee, the Board monitors the nature of risk and control culture across the Group and sees the impact of its policies and practices and how they are embedded, through reports on matters such as whistleblowing, code of conduct breaches and investigations (for further information see the Group Audit Committee Report on page 236 ). For information about the Board's engagement with our workforce and other stakeholders see pages 29 and 229 . Governance framework The governance framework and operating rhythm at HSBC has been reviewed and reshaped during the year to support the creation of a simpler, more dynamic organisation. By meaningfully simplifying governance processes we aim to promote greater clarity and individual accountability, and thereby enable more efficient decision-making. The Group-level formal governance structure has been streamlined to increase focus on individual accountability of decision-makers and their delegates, and this approach has been cascaded throughout the organisation. In some instances, governance committees and forums have been combined or demised to create more focused and strategic governance pathways. The ESG Committee, Group People Committee and the Change Prioritisation & Oversight Committee were demised. The Holdings Asset & Liabilities Committee became a management committee, reporting to the Group Finance Management Meeting. A summary of the Group governance framework as at the date of this report is set out on page 226 . The Board’s engagement with the workforce The Board acknowledges the importance of engaging with the Group's workforce through various forums. Such interactions enable the Board to gain insights that inform their discussions and decision making. They also offer colleagues a platform to share ideas and feedback on matters important to them. While all Directors are responsible for engaging with the workforce, José Meade serves as the Board's dedicated non- executive Director for workforce engagement. He provides oversight of the Group's workforce engagement programme and acts as a central point for workforce interactions. This role facilitates meaningful, inclusive dialogues and ensures that employees' voices are considered in Board decisions where appropriate. 97 20,300 Virtual/physical sessions attended by non-executive Directors Number of employees engaged physically/virtually 8 56 Countries where in-person engagement took place and many more virtually Virtual/physical sessions attended by workforce engagement non-executive Director HSBC Holdings plc Annual Report on Form 20-F 230 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information How we are governed Workforce engagement programme and activities during 2025 The Board agreed an annual workforce engagement programme to support the Directors’ understanding of the views of the wider workforce. This was developed with input from the dedicated non- executive Director for workforce engagement and the Group Chief People & Governance Officer, and was designed to provide Directors with opportunities to engage with colleagues across the Group. In keeping with previous years, two primary mechanisms were used for this engagement: organising events for Board members during Board travel or as individual Director location allowed; and offering Board members opportunities to attend pre-existing Group employee events scheduled during the year. Structuring the programme this way allowed the Board to meet a diverse group of colleagues and participate in a broad range of engagements globally. By utilising pre-existing employee events, the Board was able to gain organic insights into employee and management interactions. Employee engagements were held in various formats: in-person meetings and larger-scale events, including town halls and virtual formats. Given the organisational changes during the year, the programme for 2025 was anchored to our Group purpose, strategy, values and ambition which complemented the cultural transformation taking place through the Group. Further details of the cultural transformation are set out on page 229 . A key component of the 2024 workforce engagement programme was visits to Global Service and Technology Centres, given the critical role they play in supporting the wider HSBC business to deliver its strategy. This remained a priority during 2025 and visits were scheduled to Mexico City and Pune, and through discussions, floor walks, fireside chats and town halls, the Board gained deeper insights into the work of these centres. José Meade provided regular reports to the Board on the outputs and key themes arising from engagements, which aided Board discussions and decision making. During the year, José Meade also attended the Group OpCo and the Chairman’s Forum to share key insights and issues raised during employee engagements. This enabled open dialogue with senior executives and other Group subsidiary chairs and ensured management considered and took timely action in response to colleague feedback. In addition, this provided the opportunity for the executives to provide input and share feedback with José Meade to take forward when considering future engagements. Key themes included the impact of organisational changes, talent development and inclusion in the workplace. These themes shaped conversations between colleagues and Board members and have informed planning for the 2026 workforce engagement programme, ensuring events are targeted to reflect these key topic areas. Each of the Board members continued to sponsor at least one of our Global Employee Resource Groups (’ERGs’). During 2025, the Directors met with their respective ERGs to discuss the ERGs’ strategy for the year and upcoming priorities. Directors were also invited to take part in other ERG events where possible, and every effort was made to facilitate local ERG members meeting their aligned Director during planned Board travel. Set out below is a selection of workforce engagement events that were held in 2025, attended by José Meade and other Board members. Strategy – Directors met with colleagues in branch to experience how customers are supported through the UK branch network. – Attended a listening session with a small group of UK-based managers to gain insights into experiences on performance and reward matters. – Directors completed a floor walk of the Hang Seng Bank flagship branch to engage with colleagues. – Met with wealth management Hong Kong colleagues to gain a deeper understanding of wealth management and digital capabilities in Hong Kong. – Visited the Pune HSBC Technology Centre. – José Meade visited the HSBC Korea office and met with colleagues to gain a better understanding of the region. – Directors attended various exchange sessions in London to hear the employee voice on the business reorganisation and cultural transformation. Inclusion – An engagement session was held with colleagues who were part of the EmpowHER and Solaris networks to discuss inclusion and development. – Directors attended an interactive session to trial the UK Wellbeing initiative, Empathy Box, an immersive learning experience designed to help colleagues better understand vulnerabilities through emotive experiences. – An engagement session was held with a small group of Pride ERG members during Pride Month. – Attended a virtual event to celebrate 15 years of Balance ERG. – José Meade engaged with US-based ERG leaders to discuss business topics, employee sentiment and ERG contribution in the US. Talent development – A number of Directors attended the Senior Leaders Event in Nansha which launched the How We Lead framework. – An engagement session was held with HSBC India leadership. – Attended exchange sessions with UK-based graduates and degree apprentices to hear about their experiences with HSBC. – Attended an exchange session with Hong Kong-based graduates to hear about their experiences with HSBC. – Met with a small group of AI Ambassadors to discuss the education opportunities in technology across the business. – José Meade joined a How We Lead event held in Mexico City as part of the roll out of the new How We Lead framework to senior leaders. “Given the organisational changes during the year, the programme for 2025 was anchored to our Group purpose, strategy, values and ambition, which complemented the cultural transformation taking place through the Group.“ José Meade, Dedicated Workforce Engagement NED José Meade, Geraldine Buckingham and Kalpana Morparia at an exchange session with UK-based degree apprentices London, April 2025 Fireside chat with Kalpana Morparia and the EmpowHER and Solaris networks London, April 2025 HSBC Holdings plc Annual Report on Form 20-F 231 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information How we are governed Board induction and training The Board recognises the importance of induction and training for its Directors. To ensure Directors’ contributions to the Board remain informed and relevant, all Board members receive appropriate training, both individually and collectively, throughout their tenure. The Group Company Secretary works with the Group Chairman to ensure that, on appointment, new Directors are provided with tailored and comprehensive induction programmes appropriate to their individual experiences and needs, including the process for managing actual and potential conflicts of interest. Board induction programmes are conducted through formal briefings and introductory sessions with other Board members, senior management, legal counsel, auditors, tax advisers and regulators, as appropriate. Topics covered in the induction programme include but are not limited to: purpose and values; culture and leadership; governance and stakeholder management; Directors’ legal and regulatory duties; recovery and resolution planning; anti- money laundering and anti-bribery; technical and business briefings; and strategy. The induction process is often initiated before appointment to allow each new Board member to contribute meaningfully from appointment. The structure of the induction supports good information flows between the Board and its committees, as well as between senior management and non-executive Directors, providing a clear understanding of our culture and way of operating. As part of the transition to Group CFO, Pam Kaur completed an induction and development plan which was overseen by the Nomination & Corporate Governance Committee. Prior to her appointment as a non-executive Director, Wei Sun Christianson received relevant training and legal advice from a firm of solicitors on 8 December 2025. Following this training, Wei Sun Christianson confirmed her understanding of her obligations as a director of a listed issuer pursuant to Rule 3.09D of the Hong Kong Listing Rules. As part of her continued onboarding, Wei Sun Christianson will be provided with a tailored induction, which takes into account her listed directorship experience. The approach to Director training is agreed annually by the Nomination & Corporate Governance Committee. Training sessions are facilitated by both internal subject matter experts and by external presenters. During the year Board training sessions included the following key topics; financial crime, recovery and resolution, and internal controls. Members of Board committees receive relevant training, as appropriate. Further details on any specific training commissioned by Board committees can be found in the respective committee reports from page 233 onward. Directors may take independent professional advice at HSBC’s expense. Directors were issued with training modules, which mirrored the mandatory training undertaken by employees. During 2025, this training covered topics including risk management, operational resilience, health and safety, well-being, cyber-security, financial crime, AI and data protection. During the year, non-executive Directors discussed individual development areas with the Group Chairman as part of their performance discussions. The Group Company Secretary makes appropriate arrangements for any additional training needs identified using internal resources, or otherwise, at HSBC’s expense. Board Directors who serve on principal subsidiary boards receive training that is pertinent to circumstances and context relevant to those boards. For further information, see ’The role of principal subsidiaries’ on page 232 . Directors’ induction and ongoing development in 2025 Director Strategy and performance 1 Risk management and controls 2 Corporate governance, ESG and other reporting matters 3 Geraldine Buckingham u u u Rachel Duan u u u Georges Elhedery u u u Dame Carolyn Fairbairn u u u James Forese u u u Ann Godbehere u u u Steven Guggenheimer u u u Pam Kaur u u u José Antonio Meade Kuribreña u u u Kalpana Morparia u u u Eileen Murray u u u Brendan Nelson u u u Swee Lian Teo u u u u Matter considered u Matter not considered 1 Directors received weekly updates on key business updates, performance metrics, investor relations and regulatory matters. Directors also had the opportunity to attend town halls and business function events regionally. 2    Directors received risk and control training and briefings. Examples of specific sessions held in 2025 included: ’Recovery and Resolution’, ‘Internal Controls’ and ‘Financial Crime’. 3    Directors received development updates at Board meetings on: ’Board stakeholder engagement’ and ESG matters including regulatory changes. Directors received additional training through their attendance at forums such as the Chairman’s Forum, Remuneration Committee Chairs’ Forum and the Global Non- Executive Director Update. Board and committee performance review Performance reviews are an important part of effective governance and support the operation of the Board and its committees. The 2025 Board and committee performance review was facilitated internally by the Group Chief People & Governance Officer and Group Governance. This followed two externally facilitated reviews in 2023 and 2024. The 2025 review, which consisted of a questionnaire, supplemented by interviews with each Director and relevant senior management and advisers, focused on three key themes: – Progress against findings from the 2023 and 2024 reviews: all actions arising from these reviews were considered to have been effectively delivered. – Oversight of the organisational changes: reporting to the Board was considered to have been thorough and transparent, allowing HSBC Holdings plc Annual Report on Form 20-F 232 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information How we are governed Directors to effectively oversee and challenge management on progress against commitments. – Oversight of the work to implement a high performance culture and the How We Lead framework: the Board’s oversight of and engagement with How We Lead was valued, and the introduction of a Board culture health-check was agreed, which will support the Board in discharging its oversight responsibilities. The outputs from the review were presented to the Board and its committees in December 2025. Overall, the review concluded that the Board and its committees continued to operate effectively. The review did not identify any material notable areas for improvement, however, the Board have agreed to focus on three areas of potential enhancement to help further improve effectiveness and performance: – Board reporting: the Group Company Secretary has been tasked with exploring the use of AI tools to help with report preparation, as well as to enable Directors to review and analyse information within meeting packs, to improve the consistency and impact of reports across the Board and its committees. – Stakeholder engagement: the Board agreed to review its approach to stakeholder engagement, to ensure that this continues to be valuable and to provide insights that inform oversight, challenge and decision-making by the Board. Opportunities to further enhance the Board’s alignment and connectivity with Principal Subsidiary boards will also be considered. – Board and Board committee composition: the Nomination & Corporate Governance Committee will lead a refreshment of longer- term succession planning for key Board roles, which will consider the technical and experiential capabilities required to ensure that the Board and its committees continue to function effectively in both the short and longer term. The former Group Chairman and his interim successor met with each Director individually during September 2025 in relation to their individual performance and development. No performance review was conducted for the Group Chairman owing to the retirement of Sir Mark Tucker, and the process to identify a permanent successor for the Group Chairman role, which was ongoing at the time of the review. The Group Company Secretary will work with the Board and Board committee Chairs to implement the agreed areas for enhancement over the course of 2026. Subsidiary governance We are committed to maintaining high standards of corporate governance throughout the Group. All subsidiary boards and their respective businesses are required to have in place effective governance arrangements which have regard to the businesses’ nature, size, location and the sectors in which they operate. The subsidiary accountability framework The subsidiary accountability framework aims to balance appropriate governance oversight by the Group with each subsidiary’s local legal and regulatory requirements. The framework supports the Group in promoting effective governance arrangements across its subsidiaries by: – setting out high-level principles and expectations which emphasise best practice governance; – ensuring a consistent and proportionate approach to corporate governance arrangements; and – ensuring a shared and consistent understanding of the Group’s strategic objectives, culture and values. Group subsidiary board composition is kept under review as part of succession planning. See the Nomination & Corporate Governance Committee report on page 233 for information regarding the succession plans of principal subsidiaries. The role of principal subsidiaries Certain subsidiaries are designated formally by the Board as principal subsidiaries. In addition to their obligations under their respective local laws and regulations, principal subsidiaries, supported by regional company secretaries, perform a critical role in ensuring effective and high standards of governance across the Group and in overseeing the implementation of the subsidiary accountability framework in the regions for which they are responsible. Representatives from principal subsidiaries attend the Board and its committee meetings for relevant topics, including when the Board holds meetings outside of the UK. The Chairs of principal subsidiary risk and audit committees are invited to attend relevant Group committee meetings. Attendance and participation at these meetings supports subsidiary directors’ understanding of the challenges facing the Group and helps to identify common challenges and facilitate the sharing of lessons learned. The Group Chairman interacts regularly with the chairs of the principal subsidiaries, including through the Chairman’s Forum. The Chairman’s Forum comprises the chairs of each of the principal subsidiaries, the Group’s Senior Independent Director, the chairs of the Group’s audit, risk and remuneration committees, and where relevant, the Group CEO, other non-executive Directors and members of executive management, advisers and/or external experts. In 2025, the Chairman’s Forum covered topics such as strategic planning and reporting, geopolitical issues and macroeconomic outlook, shareholder engagements, Group-wide connectivity of non-executive Directors, technology and innovation developments, How We Lead, workforce engagement and financial performance. The principal subsidiaries are: Principal subsidiary Oversight responsibility The Hongkong and Shanghai Banking Corporation Limited Asia-Pacific HSBC Bank plc Europe and Bermuda (excluding UK ring-fenced activities) HSBC UK Bank plc UK ring-fenced bank and its subsidiaries HSBC Middle East Holdings BV Middle East, North Africa and Türkiye HSBC North America Holdings Inc. US HSBC Latin America Holdings (UK) Limited Mexico and Latin America Subsidiary director development The Group is dedicated to supporting the continuing professional development of its subsidiary directors. The Bank Director Programme, launched in 2022, is designed to prepare HSBC executives and senior managers to assume roles as internal non-executive directors on our subsidiary boards. Over 40 delegates have completed the programme and many have now served as internal non-executive directors on Group subsidiary boards. Our Bank Chair Programme took place in late 2024 and early 2025 with attendees comprising subsidiary board and committee chairs from across the Group. The programme focused on developing our ‘chairs of the future‘ and equipping them to lead ‘best-in-class’ subsidiary boards and committees at HSBC. The programme covered a range of topics with a future focus including regulation, subsidiary governance, culture, customers, building a future-focused board, climate, transformation, AI and geopolitics. Our annual Global Non-executive Director Update is another way we engage and connect with subsidiary directors to provide updates and share knowledge. Over 160 attendees joined our 2025 session where topics included strategy and performance, the external environment and culture. HSBC Holdings plc Annual Report on Form 20-F 233 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Nomination & Corporate Governance Committee “Continuing to strengthen the succession plans for key roles, in line with the short- and long-term needs of the Board and wider Group, remains a key priority for me and the Committee this year.“ Brendan Nelson Chair Nomination & Corporate Governance Committee For Board committee membership, see Board biographies on pages 220 to 223 and for meeting attendance in 2025 see page 228 . Key responsibilities The Committee’s key responsibilities include: – overseeing succession planning and leading the process for identifying and nominating candidates for appointment to the Board and its committees; – overseeing succession planning and development of senior leadership; – overseeing and monitoring the corporate governance framework of the Company and its subsidiaries; and – ensuring that the corporate governance framework is consistent with relevant standards and best practices. I am pleased to present the Nomination & Corporate Governance Committee report, my first since succeeding Sir Mark Tucker as Group Chairman. The Committee’s immediate priority is to identify successors for Ann Godbehere as Senior Independent Director, as well as my successor as Chair of the Group Audit Committee. As previously announced, following the successful completion of the Group Chairman succession process, Ann Godbehere, who led the process as Senior Independent Director, informed the Board of her decision to step down from the Board at the conclusion of our 2026 AGM. Ann leaves with our very best wishes and thanks for the considerable commitment she made over her time on the Board. While we have made good progress over the past two months and considered both internal and external candidates for the Group Audit Committee Chair and Senior Independent Director roles, we are not yet in a position to confirm the outcome of these processes. We continue to work at pace and will provide an update in due course. We expect to announce the appointments – and for them to take effect – following the conclusion of our 2026 AGM on 8 May 2026, subject to completion of the regulatory approval process. This means that I will continue to hold the role of Chair of the Group Audit Committee for a further period. While this has not been and is not in accordance with Provision 24 of the UK Corporate Governance Code, the Board has determined at all relevant times that it was in the best interests of the Group and its stakeholders that I maintain my role as Group Audit Committee Chair to allow for a permanent successor to be appointed and to provide continuity of oversight. During the year, we also welcomed Wei Sun Christianson to the Board from 1 January 2026. Her appointment enhances the Board’s collective experience of the business, cultural and regulatory context of key markets, specifically Hong Kong and mainland China. We look forward to benefiting from the insights and perspectives Wei will bring to the Board’s deliberations. I am pleased to confirm that the 2025 Performance Review concluded that the Committee continued to discharge its duties effectively. Additional details on the annual review of the Board and the Committee’s effectiveness can be found from page 231 . Finally, there was significant change to senior leadership as part of the reorganisation of the Group around its four core businesses in line with our strategy. The focus throughout 2025 has been on overseeing the rebuild of succession plans for key roles, which has been led by Georges Elhedery and Aileen Taylor. My thanks to my fellow Directors for their commitment to our efforts to develop talent and future leaders, as evidenced through their mentoring relationships with senior talent. This has provided excellent exposure to our senior talent, and has contributed to more informed discussions on the strength of our succession bench. Brendan Nelson Chair of the Nomination & Corporate Governance Committee HSBC Holdings plc Annual Report on Form 20-F 234 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Nomination & Corporate Governance Committee Committee governance The Group Chief People & Governance Officer attended all Committee meetings during the year. She supported the Group Chairman in ensuring that the Committee fulfilled its responsibilities under its Terms of Reference and in line with corporate governance best practice, and also presented on succession and development activity for the Group OpCo and other key senior management roles. The Group CEO also regularly attended Committee meetings throughout the year. The Committee retains the support of various executive search firms to assist with its objectives in relation to Board succession planning and appointments. Russell Reynolds Associates (‘RRA’), provided support to management on senior management succession and recruitment. In addition, RRA, Christoph Zeiss Partners (‘CZ Partners’) and MWM Consulting (‘MWM’) provided support to the Committee on Board succession and recruitment. RRA, CZ Partners and MWM have no other connection to the Group or with members of the Board other than to support on the Board and senior management succession and recruitment. Board composition and succession Following the appointments during 2024 of Georges Elhedery as Group CEO and Pam Kaur as Group CFO, the Committee’s primary focus during the year was on succession planning for the Group Chairman role. Sir Mark Tucker joined the Board on 1 September 2017 and assumed the role of Group Chairman on 1 October 2017. The Committee commenced active succession planning for the Chairman role in Q4 2024 after Sir Mark had served for seven years. On 1 May 2025, the Group provided an update on the succession process the Committee was undertaking. On 6 June 2025, the Group announced that Brendan Nelson would assume the role of Interim Group Chairman upon Sir Mark’s retirement from the Board on 30 September 2025. Brendan joined the Board in September 2023. The PRA and FCA granted regulatory approval for Brendan Nelson as Group Chairman in advance of his appointment as Group Chairman on an interim basis effective 1 October 2025. A thorough handover process, in accordance with regulatory expectations, was undertaken with Sir Mark in advance of Brendan’s assumption of the role. He also underwent a tailored induction plan to ensure he was equipped to fulfil the role. This focused on refreshing and developing new relationships with key external stakeholders, particularly investors in Asia. On 3 December 2025, Brendan was appointed Group Chairman having held the role on an interim basis since 1 October 2025. This decision followed a robust process that considered both internal and external candidates and regulatory approval. Group Chairman succession In preparation for Sir Mark Tucker’s retirement, the Committee, led by the Senior Independent Director, proactively commenced the process to identify his successor in Q4 2024. Key steps in the Group Chairman succession process included: Appointment of external search adviser Establishment of a sub- group of the Committee Candidate interviews with Committee members Agreement of the role profile and success criteria Presentations to Committee and Q&A Feedback collated and discussed by the Committee Consideration of implications on existing HSBC responsibilities Decision on preferred candidate Regulatory engagement and application Announcement of appointment of Brendan Nelson as Group Chairman The Committee (other than Brendan Nelson who was recused) selected Brendan Nelson as the preferred candidate, subject to regulatory confirmation. Following engagement with the PRA and FCA, the Board approved Brendan Nelson’s appointment as permanent Group Chairman effective immediately, as announced on 3 December 2025. The Board determined at all relevant times that it was in the best interests of the Group for Brendan to continue in role as Chair of the Group Audit Committee and that for all applicable purposes he satisfied the requisite tests of independence. HSBC Holdings plc Annual Report on Form 20-F 235 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Nomination & Corporate Governance Committee Other key board succession decisions The Committee continued to keep the composition of the Board and of its committees under review, with assessments focused on the skills, knowledge, and experience necessary to oversee, challenge and support management, in the achievement of the Group’s strategic and business objectives. Following a recruitment process for a new Director, which prioritised further strengthening the Board’s banking experience and deep business and cultural expertise across Asia, Wei Sun Christianson was appointed to the Board with effect from 1 January 2026. Wei met with members of the Board, including the Group CEO and the feedback from these meetings then informed the Committee’s recommendation to the Board for her appointment. Wei brings extensive banking and regulatory experience gained over a 30-year international career. Her biography can be found on page 221 . The Committee remains focused on identifying successors for the Senior Independent Director and Chair of the Group Audit Committee roles. Good progress has been made in considering and assessing both internal and external candidates. The Committee will continue to engage with regulators in relation to the necessary regulatory approvals and has full confidence that an announcement will be made in time to allow for the appointments to take effect from the conclusion of the 2026 AGM. As set out in last year’s report, the appointment term of José Meade, Workforce Engagement non-executive Director, was extended to the 2026 AGM. During 2025, the Committee considered the future needs of the Board, and the performance and contributions of José, and agreed a further extension to the 2027 AGM, subject to his re-election by shareholders. This reflects José’s contributions, and leadership in enhancing the Board’s understanding of the views of the workforce. It is the Board’s strong belief that this extension of José’s appointment, given his performance and contributions to the Board, is in the best interests of the Group and its stakeholders. During 2026, the Committee will conduct a thorough review of the size and composition of the Board committees. This review will look to undertake the effective use of the skills and expertise of the Directors, and to continue to enable effective support and challenge by the respective committees. Board diversity The Board recognises the importance of gender, social and ethnic diversity, and the benefits that diverse identities and backgrounds bring to Board effectiveness. Representation is a consideration in succession plans and appointments at both Board and senior management level, as well as more broadly across the Group. The Committee also considers representation on Board committees when reviewing their composition. The Board’s diversity and inclusion policy was updated in December 2025, and is available at https://www.hsbc.com/who-we-are/our- people/board-of-directors/board-responsibilities. Further details on the Board’s diversity data can be found on page 225 . Senior executive succession and development Following Georges Elhedery’s appointment as Group CEO and Pam Kaur’s appointment as Group CFO the Committee monitored and received updates on their induction and development plans. Given the new, simpler organisational structure, the Committee approved updated succession plans for the Group Operating Committee members. These reflected continued efforts to support the development and progression of diverse talent and promote the long- term success of the Group. This included future internal and external succession options for the Group CEO, to ensure that the Committee has a robust and actionable succession plan when required. When considering internal succession plans, the Committee received updates on individual development plans that supported alignment to key priorities and career trajectory, as well as exposure to Board and Group Operating Committee members. Since the last report, the Committee oversaw and approved several changes to the senior leadership team. These included the appointment of the permanent Group Chief Risk and Compliance Officer, the Group Head of Internal Audit and the CEO of HSBC UK Bank plc. These appointments completed the work on building a Group senior leadership team that will drive the Group’s strategy into the future. Subsidiary governance In line with the subsidiary accountability framework, the Committee continued to oversee the corporate governance and succession arrangements across the principal subsidiary portfolio. Additional details on the subsidiary accountability framework are set out on page 232 . The Committee continued to oversee principal subsidiary composition and succession planning through the annual review of Board succession plans. In order to further strengthen connectivity between the Board and the most significant subsidiary boards in the Group, the Committee recommended that José Meade be appointed to the Grupo Financiero HSBC, S. A. de C. V., HSBC Latin America Holdings Limited and HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo Financiero HSBC., boards. The Committee is confident that these appointments will further enhance governance arrangements and connectivity. HSBC Holdings plc Annual Report on Form 20-F 236 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Audit Committee “As Chair, I’m pleased with the Committee’s commitment to robust oversight and transparent reporting. Together, we’ve strengthened internal controls and deepened collaboration across the Group.“ Brendan Nelson Chair Group Audit Committee For Committee membership, see Board biographies on pages 220 to 223 and for meeting attendance in 2025, see page 228 . Key responsibilities The Group Audit Committee (’GAC’) has non-executive responsibility for the oversight of matters relating to financial reporting and internal controls. The GAC’s key responsibilities include: – monitoring the integrity of financial statements; – reviewing the Group’s financial and accounting policies and practices; – monitoring the effectiveness of the internal control environment; – monitoring and reviewing the effectiveness of the Global Internal Audit function; and – oversight and remuneration of the external auditor and making recommendations to the Board on the appointment of the external auditor. I am pleased to introduce the GAC report, my second as Chair, and thank the Committee members for their contribution and support during 2025. The key matters considered by the Committee are set out below. Financial and regulatory reporting The GAC received regular updates from the Group CFO and Global Financial Controller on key financial reporting issues and the related management judgements. These included spending significant time on the appropriateness and clarity of the Group’s market guidance, including in relation to returns, costs and expected credit losses (‘ECL’). Given the uncertain global macroeconomic environment, the GAC carefully considered its disclosures on ECL, in particular those relating to the Group’s exposure to the mainland China and Hong Kong corporate real estate sectors. The GAC also provided close oversight of the disclosure risks associated with sustainability and climate reporting, and related controls. This included its review of the Net Zero Transition Plan which was published in November 2025. The GAC focused on monitoring the programme of work designed to enhance the quality and reliability of regulatory reporting and align with HSBC's internal standards and external regulatory expectations. This included regular updates from management, focused review meetings to guide short- and medium-term delivery plans, and meetings with external parties. The Financial Reporting Council ('FRC') undertook a Corporate Reporting Review of HSBC’s Annual Report and Accounts 2024, and we are pleased to report that no formal matters were raised. Internal controls The GAC has an important role in monitoring and overseeing the control environment, taking into account the external operating environment and following the Group's recent reorganisation. Enhancing the control environment for the Group’s regulatory reporting obligations remains a central focus and ongoing priority for both management and our regulators globally. Throughout the year the GAC oversaw ongoing enhancements in this area, supported by the Group Chief Control Oversight Office. This included work to support preparations for the Board's declaration on the effectiveness of material controls, which HSBC will be required to include in the Annual Report and Accounts 2026, under the UK and Hong Kong Corporate Governance Codes. Connectivity within the Group Ensuring strong connectivity between the Group and its subsidiaries is an important aspect of the GAC’s oversight model, and has been a key feature over the past few years. I have spent time with several of the subsidiary audit committee chairs, both individually and as part of plenary sessions, encouraging their participation in Group-wide discussions including in relation to regulatory reporting. Ongoing, regular engagement with our subsidiary audit chairs will continue to be an important part of the GAC’s governance practices. Global Internal Audit We welcomed Russell Jackson as the new Group Head of Internal Audit, effective 3 June 2025. The handover was supported by myself and the other GAC members, and we extend our gratitude to Jonathan Calvert-Davies for his dedication to the role since 2019. Engagement with the Global Internal Audit function continued throughout the year, with the GAC receiving regular updates. Following the positive outcome of the External Quality Review of the Global Internal Audit function conducted in 2024 by Deloitte, an internal review under the Global Professional Practices Quality Assurance and Improvement Programme in 2025 confirmed Global Internal Audit’s ongoing general conformance with the Institute of Internal Auditors Standards. Committee performance Finally, I was pleased that the annual review of the GAC’s performance concluded that the Committee continued to operate effectively. Further details of the review can be found in the 'Board and committee performance review' section on page 231 . Brendan Nelson Chair of the Group Audit Committee HSBC Holdings plc Annual Report on Form 20-F 237 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Audit Committee How the Committee discharged its responsibilities Financial reporting The GAC is responsible for reviewing the Group’s financial reporting disclosures, including the Annual Report and Accounts, Interim Report, quarterly earnings releases, analyst presentations and Pillar 3 disclosures. Furthermore, as an area of expanded assurance, the GAC, supported by the Group Disclosure Committee, provided close oversight of disclosure risks in relation to sustainability and climate reporting, and related controls. As part of its review, the GAC: – challenged and evaluated management’s application of accounting policies subject to critical estimates and judgements and material areas in which significant accounting judgements were applied; – reviewed and challenged management’s judgements and disclosures in relation to impairment reviews of HSBC’s investment in Bank of Communications Co., Limited, performed using a value-in- use methodology; – gave particular regard to the analysis and measurement of IFRS 9 ECL, including the key judgements and management adjustments made in relation to the forward economic guidance, underlying economic scenarios and reasonableness of the weightings, as well as modelling and adjustments; – focused on preparation of disclosures to ensure these were consistent, appropriate and could be validated under the relevant financial and governance reporting requirements; – reviewed analysis and assurance work by external financial advisers in connection with (i) the Group’s reorganisation plans; and (ii) the privatisation of HASE; – tracked and monitored delivery against the external audit plan; and – provided advice to the Board on the form and basis underlying the long-term viability statement. We also received limited assurance from an independent third-party on certain elements of the Group’s climate reporting. In conjunction with the Group Risk Committee, the GAC considered the current position of the Group, along with the emerging and principal risks, and carried out a robust assessment of the Group’s prospects. This assessment informed the GAC’s recommendation to the Board on the Group’s long-term viability. The GAC also undertook a detailed review before recommending to the Board that the Group should continue to prepare its annual and interim financial statements on a going concern basis. Financial planning The GAC reviewed and debated the robustness of the financial plan for the financial years 2026 to 2030. The GAC considered the risks and challenges, and ensured that the process to develop the financial resource plan was robust and that the assumptions driving the financial performance of the Group were appropriate and subject to appropriate challenge. Specifically, the Committee reviewed revenue assumptions against economic and market growth rates in the countries and territories in which HSBC operates, and considered various downside planning scenarios against available resources and risk appetite capacity. Fair, balanced and understandable The Committee reviewed the draft Annual Report and Accounts 2025 and results announcements and provided feedback and challenge to management. It was supported by the work of the Group Disclosure Committee. Following review and challenge of the disclosures, the Committee recommended to the Board that the Annual Report and Accounts 2025, taken as a whole, were fair, balanced and understandable. These provided shareholders with the necessary information to assess the Company and the Group’s position and performance, business model, strategy and risks facing the business. Internal controls The GAC is responsible for overseeing the effectiveness of all internal controls. During the year, the GAC provided oversight of the ongoing enhancement of the operation and monitoring of the Group’s internal control environment, informed by reports from the Group Chief Control Oversight Office. This included an assessment of the Group's work on material controls to support the Board’s forthcoming declaration of their effectiveness in the Annual Report and Accounts 2026, under the requirements of the UK and Hong Kong Corporate Governance Codes. This comprised evaluating controls with the potential to materially impact the Group, our customers or the stability of the market, in line with FRC and Hong Kong Exchanges and Clearing guidance. Regular updates and confirmations are provided to the GAC on the actions management take to remediate any failings or weaknesses identified through the operation of the Group’s framework of internal controls. This is supplemented by reviews of these controls by the Group Chief Control Oversight Office, the second line of defence, internal audit, and the external auditors, who provided additional assurance to the Committee on the effectiveness of these controls. These updates included the Group’s work on compliance with section 404 of the US Sarbanes-Oxley Act, which requires publicly-traded companies such as HSBC to establish, maintain and assess an adequate internal controls structure and procedures for financial reporting. Based on this work, the GAC recommended that the Board support its assessment of the internal controls over financial reporting. Ñ For further details of how the Board reviewed the effectiveness of key aspects of internal control, see page 280 . Regulatory reporting Regulatory reporting continues to be a key priority. The Committee oversaw initiatives to enhance the quality and reliability of regulatory reporting, to align with both HSBC's internal standards and regulatory reporting expectations. During 2025, the GAC reviewed progress updates on HSBC-specific external reviews, examined root causes and emerging themes identified from assurance activities, and challenged management to demonstrate sustainable improvements. The GAC also assessed the management of dependencies with other key programmes, and discussed programme resourcing. Ñ Further details can be found in the ‘Principal activities and significant issues considered during 2025’ table on page 244 . FRC's Corporate Reporting Review The FRC conducts routine reviews of the annual reports and accounts of FTSE 350 companies. The outcome of the FRC's review of HSBC's Annual Report and Accounts 2024 raised no formal matters for our attention. This review was based solely on HSBC's Annual Report and Accounts 2024 and did not include detailed knowledge of HSBC's business. The scope of such reviews by the FRC does not include verification of the information set out in those documents or any related assurance; it is limited to a consideration of compliance with reporting requirements. Adequacy of resources The Committee is responsible, under the Hong Kong Listing Rules, to annually assess the adequacy of resources of the accounting, internal audit, financial reporting and ESG performance and reporting functions. It also monitored the legal and regulatory environment relevant to its responsibilities. The Committee determined that each of the functions provided thorough information with regards to people capacity and capability. This determination was aided by specific reports from and engagement meetings with the senior leaders of these functions. HSBC Holdings plc Annual Report on Form 20-F 238 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Audit Committee Connectivity with principal subsidiary audit committees The Committee recognises the importance of strong connectivity and alignment with principal subsidiary audit committees. The mechanisms to support this are well established and continued to operate effectively during the year. This included information sharing and targeted collaboration between audit committee chairs and management to ensure there was appropriate focus on the local implementation of programmes. During 2025, this included dedicated sessions on regulatory reporting, with the principal subsidiary audit committee chairs, chief executive officers and chief financial officers of the Europe, Asia-Pacific, Middle East and Americas regions attending committee meetings to provide updates on progress, discuss local challenges, and highlight key areas of focus to the Committee. In addition to the Chair‘s regular meetings with the audit chairs of the Group’s principal subsidiaries, and their attendance at GAC meetings for relevant items, they provided quarterly reports on their local audit committee activities. This included updates on internal control, and financial and regulatory reporting matters that are significant from a local or enterprise-wide perspective. On a half-yearly basis, the audit committees of the principal subsidiaries certify to the GAC that their financial statements have been prepared appropriately, Group policies have been followed, and any matters requiring the Committee's attention have been escalated. Interaction with regulators The Committee Chair continued to engage with various key stakeholders, including regulators to understand their views, key themes and areas of focus within the broader financial services sector on matters relevant to the work of the Committee. This included periodic trilateral meetings involving the Group’s external auditor, PwC, and the PRA. External auditor The GAC has primary responsibility for overseeing the relationship with the Group’s external auditor, PwC. PwC completed this year’s audit, its eleventh, providing robust challenge to management and sound independent advice to the Committee on specific financial reporting judgements, sustainability reporting and the overall control environment. Key audit matters discussed with PwC are set out in its report on page 286 . The Committee reviewed, and concluded that, all requirements of the FRC's Audit Committees and the External Audit: Minimum Standard (’the Standard’), where relevant, were met during 2025. The GAC reviewed the PwC external audit approach, including the materiality, risk assessment and scope of the audit. The GAC assessed the effectiveness of PwC as the Group’s external auditor, focusing on the overall audit process, its effectiveness and the quality of output, informed in part by the FRC's audit quality indicators. Key strengths highlighted in the review include strong independent challenge, deep audit team experience, a thorough understanding of the Group‘s businesses and associated risks, and strong technical accounting and industry knowledge. The review also identified some areas for improvement, focused on communication of testing status, planning, timeliness of testing and coordination. The GAC receives regular updates from PwC and management on external auditor performance, providing wider visibility of ongoing and emerging issues. There were no breaches of the policy on hiring employees or former employees of the external auditor during the year. The lead audit partner attends all Committee meetings and the GAC Chair maintains regular contact with the senior audit partner and his team throughout the year. The Committee assessed any potential threats to independence that were self-identified or reported by PwC. Based on the reporting received, PwC are deemed to be independent. PwC, in accordance with professional ethical standards and applicable rules and regulations, provided the GAC with written confirmation of its independence for the duration of 2025. The Committee confirms it has complied with the provisions of The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 for the financial statements. Following the Committee‘s recommendation to reappoint PwC as the auditor, shareholders passed the associated resolution at the 2025 AGM. At the same time, shareholders authorised the Committee to determine PwC‘s audit fee for the financial year ended 31 December 2025, which was approved by the Committee at its June 2025 meeting. The Committee is responsible for setting, reviewing and monitoring the appropriateness of the provision of non-audit services by the external auditor. It also applies the Group’s policy on the award of non-audit services to the external auditor. The non-audit services are carried out in accordance with the external auditor independence policy to ensure that services do not create a conflict of interest. All non-audit services are either approved by the GAC Chair, or by Group Finance when acting within delegated limits and criteria set by the GAC. All non-audit services where fees exceeded $1m were subject to approval by the GAC Chair. For all non-audit services provided during 2025, it was considered to be in the best interests of the Group to use PwC for these services because they were: – audit-related assurance services, with the work closely related to work performed in the audit and in some instances required by local regulators to be performed by the external auditor; or – other assurance services that involve obtaining appropriate audit evidence to express a conclusion designed to enhance the degree of confidence of the intended users other than the responsible party about the subject matter information, including attestation reports on internal controls of a service organisation primarily prepared for and used by third-party end users. 2025 2024 Auditors‘ remuneration $m $m Total fees payable 1 159.1 146.6 of which fees for non-audit services 50.2 43.8 Ratio of non-audit fees to audit fees 2 46.1% 43.0% 1    In addition, $2.1m in expenses were reimbursed to PwC in 2025. 2    The calculation is on a simple ratio and is not based on FRC guidance on non-audit fees ratio thresholds. Following the conclusion of a formal competitive audit tender process, in 2023 the Board approved the re-appointment of PwC as external auditor for the next 10-year cycle beginning with the financial year ending 31 December 2025. As a UK public interest entity, HSBC is required to tender its audit every 10 years and rotate every 20 years. PwC is a registered public interest entity auditor in Hong Kong. Whistleblowing and speak-up culture Speaking up when something does not feel right is integral to HSBC's values. HSBC remains committed to empowering colleagues to raise concerns confidently, and to taking appropriate action in response. A range of channels are available for colleagues to raise concerns, including the Group’s whistleblowing channel, HSBC Confidential (see page 61 for further information). The Board has delegated responsibility to the GAC to oversee the effectiveness of HSBC’s whistleblowing arrangements. The Chair of the GAC is a Group Senior Manager under the FCA's Senior Managers and Certification Regime, and has a prescribed responsibility as the Whistleblowers’ Champion to ensure the integrity of HSBC’s policy and procedure on whistleblowing and protecting those who report concerns. The GAC Chair reports to the Board on the GAC’s oversight of whistleblowing as part of his regular reporting updates. The Committee is also briefed on culture and conduct risks from whistleblowing cases and actions taken. The Group Head of Regulatory Compliance updates the GAC annually on whistleblowing effectiveness, including controls assessments and internal audit findings. HSBC Holdings plc Annual Report on Form 20-F 239 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Audit Committee Global Internal Audit The primary role of the Global Internal Audit function is to help the Board and management strengthen the Group’s ability to create, protect and sustain value. Global Internal Audit does this by providing independent, risk based and objective assurance and advisory services on the design and operating effectiveness of the Group’s framework of risk management, control, and governance processes, prioritising the greatest areas of risk. The independence of Global Internal Audit from day-to-day line management responsibility is fundamental to its ability to deliver objective audit coverage of all parts of the Group. Global Internal Audit is free from interference by any element in the organisation, including on matters of audit selection, scope, procedures, frequency, timing, or internal audit report content. The Group Head of Internal Audit reports to, and meets frequently with, the Chair of the GAC. Global Internal Audit adheres to The Institute of Internal Auditors' mandatory guidance. Global Internal Audit may also perform advisory work at the request of the Board or management. The nature and scope of advisory services are subject to agreement with the Group Head of Internal Audit. When performing advisory services, Global Internal Audit maintains objectivity and does not assume management responsibility. Consistent with previous years, the 2026 audit planning process included assessment of the inherent risks and strength of the control environment across the audit entities representing the Group. Results of this assessment were combined with a top-down analysis of risk themes by risk category to ensure that themes identified were addressed in the annual plan. Audit coverage is achieved using a combination of business and functional audits of processes and controls, risk management frameworks and major change initiatives, as well as regulatory audits, investigations and special reviews. The annual audit plan was approved by the GAC. The results of audit work, together with an assessment of the Group’s framework of risk management, control and governance processes are reported to the GAC, GRC and local audit and risk committees, as appropriate. This reporting includes business and regulatory developments and an independent view of emerging and horizon risk, together with details of audit coverage and any required changes to the annual audit plan. Based on regular internal audit reporting to the GAC, private sessions with the Group Head of Internal Audit, the Global Professional Practices annual assessment and quarterly quality assurance updates, the GAC is satisfied with the effectiveness of the Global Internal Audit function and the appropriateness of its resources. Management is accountable for addressing the matters raised by Global Internal Audit, which must be addressed within an appropriate and agreed timetable. Global Internal Audit maintains a close working relationship with HSBC’s external auditor, PwC. The external auditor is kept informed of Global Internal Audit’s activities and results, and is afforded free access to all internal audit reports and supporting records. Committee member independence The Nomination & Corporate Governance Committee has confirmed that each member of the Committee is independent according to the criteria of the US Securities and Exchange Commission, and the Committee and individual members continue to possess competence relevant to the banking and broader financial services sector in which the Group operates. The Board has determined that Brendan Nelson and Ann Godbehere are the Committee's ‘financial experts’ for the purposes of section 407 of the Sarbanes-Oxley Act and have recent and relevant financial experience for the purposes of the UK and Hong Kong Corporate Governance Codes. Principal activities and significant issues considered during 2025 Areas of focus Key issues Conclusions and actions Accounting policies subject to critical estimates and judgements Expected credit losses The measurement of ECL involves significant judgements, particularly under current economic conditions. There remains uncertainty over ECL estimation due to high inflation, interest rate volatility, economic and tariff policy changes and weaker economic growth in the Group’s key operating markets. – The Committee reviewed economic scenarios for the key countries and territories in which the Group operates and challenged management’s judgements on the weightings assigned to the scenarios. The Committee also challenged management’s judgement-based adjustments for uncertainty across specific sectors and geographies, including the controls underpinning the adjustments process and conditions under which the adjustments would be reduced or removed. – The Committee continued to monitor management’s updates on areas of particular focus, including downside risk in mainland China and Hong Kong commercial real estate sectors. Valuation of financial instruments Management continues to review its methodologies and approaches to valuing the Group’s portfolio in relation to investments, trading assets and liabilities and derivatives. – The Committee received periodic updates on the key valuation metrics and judgements involved in the determination of the fair value of financial instruments. – The Committee agreed with the judgements applied by management, which were validated through appropriate governance and control forums. Investment in subsidiaries Management has reviewed investments in subsidiaries for indicators of impairment and reversals, and conducted impairment reviews where relevant. These involve exercising significant judgement to assess the recoverable amounts of subsidiaries, by reference to projected future cash flows, discount rates and regulatory capital assumptions. – The Committee reviewed the judgements applied in the impairment review of HSBC Overseas Holdings (UK) Limited, including key inputs such as projected profits that support the recoverable amounts of its subsidiaries. Valuation of defined benefit pension obligations The valuation of defined benefit pension obligations involves highly judgemental inputs and actuarial assumptions which include interest rate, inflation rate, mortality rates and other demographic assumptions. Management considered these assumptions in consultation with actuarial experts to determine the valuation of the defined benefit obligations. – The Committee has considered the effect of changes in key assumptions on the HSBC UK Bank plc section of the HSBC Bank (UK) Pensions Scheme, which is the principal plan of HSBC Group. Details of key assumptions can be found on page 324 of the ’Notes on the financial statements’. HSBC Holdings plc Annual Report on Form 20-F 240 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Audit Committee Principal activities and significant issues considered during 2025 (continued) Areas of focus Key issues Conclusions and actions Accounting policies subject to critical estimates and judgements Investment in an associate – Bank of Communications Co., Limited During the year, management performed impairment reviews of HSBC’s investment in Bank of Communications Co., Ltd (‘BoCom’), and considered the financial impact of BoCom’s capital issuance in June 2025. The impairment assessments considered whether there is indication of further impairment, or if previously recognised impairment may no longer exist or may have decreased. The impairment reviews are complex and require significant judgements, such as the appropriateness of projected future cash flows, discount rate, and regulatory capital assumptions. – The Committee reviewed and challenged management’s judgements and disclosures in relation to impairment reviews of HSBC’s investment in BoCom, performed using a value-in-use methodology. – The Committee reviewed the appropriateness of key assumptions such as projected future cash flows, and assessed management’s procedures to ensure that the latest available information was reflected at the 31 December 2025 reporting. – The Committee discussed the impact of BoCom’s capital issuance, and resulting dilution of HSBC’s investment, on the Group’s accounts and challenged management on the related accounting treatment analysis. Impairment of goodwill and non-financial assets During the year, management tested for impairment of goodwill and non-financial assets, including additional consideration for the future impacts resulting from the announced organisational restructure. Key judgements in this area relate to long-term growth rates, discount rates and projected future cash flows to include for each cash-generating unit tested, both in terms of compliance with the accounting standards and reasonableness of the forecasts. – The Committee reviewed and challenged management’s approach and methodology used for the impairment testing of goodwill and non-financial assets, with a key focus on the projected cash flows included in the forecasts and discount rates used. – The Committee also challenged management’s key judgements and considered the reasonableness of the outcomes against business forecasts and the strategic objectives of the Group. Legal proceedings and regulatory matters Management has used judgement in relation to the recognition and measurement of provisions, as well as the existence of contingent liabilities for legal and regulatory matters. – The Committee reviewed reports from management on legal proceedings and regulatory matters, and challenged related accounting judgements and disclosures. Notably, this included the review of management's judgements in relation to a legal provision following developments in a claim in Luxembourg relating to the Bernard L. Madoff Investment Securities LLC fraud. Deferred tax-related judgements HSBC has recognised deferred tax assets to the extent that they are recoverable through expected future taxable profits. Significant judgement continues to be exercised in assessing the probability and sufficiency of future taxable profits, future reversals of existing taxable temporary differences and expected outcomes relating to uncertain tax treatments. – The Committee considered the recoverability of deferred tax assets and management’s judgements relating to uncertain tax treatments. Financial and regulatory reporting Environmental, social and governance (‘ESG’) reporting The Committee considered on a periodic basis management’s efforts to enhance ESG disclosures and associated verification and assurance activities, with a specific focus on the Net Zero Transition Plan (published in November 2025) and climate-related disclosures made in the Annual Report and Accounts 2025. – The Committee conducted a review of ESG disclosures to ensure they were fair, balanced and transparent regarding the challenges faced while also reflecting the Group’s ongoing embedding of sustainability risk policies across the business. Regulatory reporting The Committee monitored progress by management in delivering a sustainable control environment for regulatory reporting across the Group. – The Committee reflected on the continued focus on the quality and reliability of regulatory reporting by the PRA and other regulators globally. – The Committee oversaw management’s execution against the agreed remediation plans, and challenged management on the approach and timeframes to deliver accurate reporting submissions to the Group’s global regulators. Discussions included a focus on shared dependencies across various Group-wide programmes, for example on data and subject matter expertise. – Periodic reports were presented by certain of the Group’s principal subsidiaries, to allow a holistic review of management’s remediation activities and to discuss consistency of approach across the Group. – The Committee actively participated in specific meetings on matters relating to regulatory reporting, to allow greater challenge and depth of oversight of targeted milestones and deliverables. Impact of acquisitions and disposals HSBC engaged in a number of corporate activities throughout the year. Judgement was involved in determining the timing of recognition of assets held- for-sale, gains or losses, and the measurement of assets and liabilities on acquisition or disposal. – The Committee reviewed management’s judgements related to transactions during the year, including the sale of French home and certain other loans and life insurance assets, the planned sale of HSBC Malta, and the privatisation of HASE. Considerations included the timing of classification as held-for-sale and the accounting impacts of the transactions. Capital Distributable reserves On 24 June 2025, the High Court of England and Wales confirmed the cancellation of a combined $16.6bn standing to the credit of HSBC Holdings plc share premium account and capital redemption reserve, which became effective upon registration by the Registrar of Companies on 10 July 2025 (\"Capital Reduction\"). The effect of this Capital Reduction was to increase distributable reserves, giving the Company further flexibility to deliver shareholder returns over the coming years. – The Committee received regular management updates on the progress of the Capital Reduction and reviewed the Interim condensed financial statements of HSBC Holdings plc for the period ended 31 July 2025, which reflected the reclassification of cancelled reserves to retained earnings. HSBC Holdings plc Annual Report on Form 20-F 241 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Audit Committee Principal activities and significant issues considered during 2025 (continued) Areas of focus Key issues Conclusions and actions Going concern Long-term viability and going concern statement The Committee has considered a wide range of information relating to present and future projections of profitability, cash flows, capital requirements and capital resources. These considerations include stressed scenarios and the implications of: – geopolitical tensions including the ongoing Russia- Ukraine war and Middle East conflicts, US-China tensions and the consequential impacts on supply chains globally; – macroeconomic risks including inflationary risks, mainland China and Hong Kong real estate sector risks and economic policy uncertainty; and – climate risk, operational resilience, and other top and emerging risks, and the related impact on profitability, capital and liquidity. – In accordance with the UK and Hong Kong Corporate Governance Codes, the Directors carried out a robust assessment of the principal and emerging risks of the Group and parent company. The Committee considered the statement to be made by the Directors and concluded that the Group and parent company will be able to continue in operation and meet liabilities as they fall due, and that it is appropriate that the long-term viability statement covers a period of three years. Control environment Sustainable control environment The Committee oversaw the effectiveness of the internal control environment of the Group, including with regards to the requirements of the US Sarbanes- Oxley Act. – The Committee received regular updates on the control environment, and broader change framework, to review the impact on financial reporting and tax risk within the Group. – In these updates the Committee monitored the assessment of the financial reporting risk, tax risk and progress made on remediation of US Sarbanes-Oxley Act- related deficiencies. This oversight enabled the Committee to assess management's progress in implementing strategic actions to remediate identified issues and strengthen the control environment, supporting a sustainable reduction in risk. – The Committee oversaw the work to support the Group’s oversight of all internal controls, supported by the Group Controls Oversight Office. Regulatory change Basel 3.1 Reform The Committee considered the implementation of the Basel 3.1 Reform and the impact on the capital requirements and RWA assurance. This was considered in the context of the strategy and structure of the balance sheet. – The Committee received updates on the progress and impact of the Basel 3.1 programme on the Group. – Management discussed the delayed implementation dates, ongoing uncertainty over the final definition of the rules by regulators, and the work undertaken to mitigate delivery risks. – The Committee reviewed the ongoing management of risks, issues and dependencies and challenged management to prioritise deliverables in line with regulatory timelines. HSBC Holdings plc Annual Report on Form 20-F 242 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Risk Committee “In today’s rapidly shifting environment, effective risk management, strategic agility, and disciplined capital deployment are essential for navigating evolving market dynamics and securing long- term success.“ James Forese Chair For Committee membership, see Board biographies on pages 220 to 223 and for meeting attendance in 2025 see page 228 . Key responsibilities The Group Risk Committee ( ’ GRC ’ ) has overall non-executive responsibility for the oversight of risk-related matters and the risks impacting the Group. The GRC’s key responsibilities include: – overseeing and advising the Board on all risk-related matters, including financial and non-financial risks; – advising the Board on risk appetite-related matters, and key regulatory submissions; – reviewing the effectiveness of the Group’s risk management framework and how effectively management is embedding and maintaining an effective risk management control system; – reviewing and challenging the Group’s stress testing exercises; and – overseeing the Group’s approach to conduct, fairness and the prevention of financial crime. I am pleased to present the GRC report, which reflects a year of change, both internally and externally. The GRC membership remained the same this year, providing the Committee with a period of stability given the extensive organisational change that took place in H1 2025. The mix of skills and experience of the current membership remains appropriate to the needs of the business and our strategy, and has been further enhanced by the appointment of Wei Sun Christianson in January 2026. The Committee was pleased to support the appointment of Richard Blackburn as Group Chief Risk and Compliance Officer in April 2025. Richard has worked closely with the Committee to ensure robust oversight of the Group's risk management and compliance frameworks. I am grateful to my fellow Committee members for their contributions last year, and look forward to continuing to work together in 2026. Macroeconomic environment The macroeconomic environment in 2025 was characterised by moderate growth amid persistent uncertainty. Inflationary pressures have continued to ease across most major economies, allowing several central banks to begin a gradual shift towards more neutral monetary policy. However, regional divergences remain, with ongoing geopolitical tensions influencing trade flows and investor sentiment. The Committee has ensured consistent focus on the impact of trade tariffs as announced in April, both from a financial and operational perspective, as well as focusing on how we can support our customers through this period. Financial markets have adjusted to a higher-for- longer interest rate outlook, prompting recalibration of capital allocation and risk appetite across sectors. The overall environment underscores the importance of prudent risk management, strategic agility, and disciplined capital deployment to navigate evolving market dynamics. The Group’s wholesale credit risk and retail credit risk portfolios have remained within risk appetite, and overall capital and liquidity positions remained stable throughout 2025. Financial risks Financial risks remained well managed in 2025, with a continued focus on treasury, capital and liquidity risk management activities. The Committee readily responded to the PRA’s request to assess the potential business model, credit and funding impacts from global economic uncertainty, utilising our stress-testing capabilities to understand the potential consequences to our strategy and financial resources. The Committee held four additional sessions in 2025 to specifically consider our Treasury- related responsibilities, which included dedicated time to the assessment of the internal capital adequacy assessment process (‘ICAAP’) and internal liquidity adequacy assessment process (‘ILAAP’), as well as our Group Recovery Plan, Bank Capital Stress Test and a deep dive into our Resolvability Assessment Framework. Non-financial risks Non-financial risk continues to attract considerable focus of the GRC, in an environment of fast-developing regulatory expectations, an uncertain political backdrop and ever-increasing sophistication of cyber criminals and fraud. Third-party risk management has been a key discussion point, along with our preparedness for all eventualities, and how resilient we would be as an organisation to those potential scenarios. We have considered business continuity planning, operational resilience and payments controls during these discussions. A deep dive session was held in October to specifically consider payments and enhance Committee knowledge of this topic. Empowered by the Committee, the Group Money Laundering Reporting Officer directed improvements at the beginning of 2025 to three key areas of control within HSBC’s financial crime framework - customer due diligence, financial crime investigations and the customer selection and exit management process. This work has ensured that the policies, controls and procedures relating to anti-money laundering, sanctions, terrorist financing and proliferation financing are robust, adequate and effective. The Group has been through a year of transformation and change to its organisational structure, and this has necessitated increased focus on our culture and our people. The GRC is fully supportive of the Group's cultural transformation with the introduction of the new Leadership Principles and How We Lead, our new Group-wide leadership framework, and will continue to monitor the impact of this on our people and our leaders. Alongside the Group Technology and Operations Committee ('GTO'), we have explored the exciting developments in our ventures into AI and have expanded our risk appetite for digital assets and currencies to respond to customer demand. We are committed to supporting our customers with this new technology, while maintaining discipline and rigour with the associated risks. Other areas of focus and challenge include the Group’s data enhancement programme, global regulatory engagement, technology risk, and together with the GAC, the adequacy of the wider control environment. Committee performance Finally, I was pleased that the annual review of the GRC’s performance concluded that the GRC continued to operate effectively. Further details of the review can be found in the 'Board and committee performance review' section on page 231 . Reflections I am privileged to have led the Committee through a year of external uncertainty and internal transformation, and have full confidence in the GRC’s ability to support the Group’s strategic ambitions in 2026 and beyond. James Forese Chair Group Risk Committee 25 February 2026 HSBC Holdings plc Annual Report on Form 20-F 243 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Risk Committee How the Committee discharged its responsibilities The GRC held a number of meetings outside its regular schedule to facilitate deeper and more effective oversight of the risks impacting the Group. Four sessions dedicated to Treasury topics took place throughout the year to provide additional time for complex subjects such as Hold To Collect Guardrails, Interest Rate Risk in the Banking Book (‘IRRBB’) and Interest Rate Risk Assessment (‘IRRA’). The sessions were also utilised for ICAAP and ILAAP preparations, and prior to the presentation of the Bank Capital Stress Test. An additional session was also held to prepare the Committee for its consideration of the Group Level Operational Resilience Self Assessment, an educational session on payments risk, and the HSBC UK Separation Playbook. During 2025, the GRC continued to actively engage with principal subsidiary risk committees through the scheduled participation of principal subsidiary risk committee chairs at relevant GRC meetings, and through regular connectivity meetings with the principal subsidiary risk committee chairs. These meetings were also attended by the Group Chief Risk and Compliance Officer. This participation and connectivity promoted the sharing of information and best practices, as well as encouraging director relationships. The GRC also received certifications from the principal subsidiary risk committees, confirming that management had been challenged on the quality of the information provided, the committees had reviewed the actions proposed by management to address any emerging issues and that risk management and internal control systems had been operating effectively. These interactions furthered the GRC’s understanding of the risk profile of the principal subsidiaries, leading to more comprehensive review and challenge by the GRC. Focus of future activities The GRC’s focus for 2026 will include the following activities: – to support the continued enhancement of the Group's risk appetite and risk management frameworks, particularly in light of continued geopolitical and macroeconomic headwinds; – to challenge the Group's resilience and our capabilities to recover from incidents that are both in and out of our control, to drive improved standards from our third-party suppliers and to always derive benefit from the lessons learned; – to monitor the technology risk and control environment, with a specific focus on cybersecurity given the heightened external threat environment and the increased sophistication of attacks; – to oversee the Group’s wholesale and retail credit risk portfolios, particularly the implementation of the Single Name Concentration Framework and seek to understand the first line ownership of the framework; – to continue to closely monitor the enhancement of our Model Risk Management capabilities in line with regulatory requirements, as well as track progress on strengthening our wholesale internal ratings-based models; – to continue to oversee financial crime risk and fraud, the improvements being made to the financial crime control framework, specifically customer due diligence, investigations and customer exits; – to continue to oversee treasury risk to strengthen our capital and liquidity management capabilities; – to continue the oversight of recovery and resolution planning activities to assess our capabilities if such a situation arises, with particular focus on the development of our Trading Activity Wind Down capabilities. HSBC Holdings plc Annual Report on Form 20-F 244 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Risk Committee Principal activities and significant issues considered during 2025 Risk areas Key issues Conclusions and actions Holistic enterprise risk monitoring, including the Group's risk profile Macroeconomic, geopolitical and other emerging risks have the potential to present significant challenges to revenue growth, operational resilience and our commitment to serve customers and local markets. – The GRC closely monitored geopolitical and macroeconomic risks that could impact the Group’s strategy, performance and/or operations. Dedicated agenda time was allocated to the discussion of trade tariffs, sanctions and ongoing global conflict to ensure thorough consideration of the impact of these events on the Group risk profile. In response to the increase in global conflict, the Committee was provided with an overview of the HSBC Defence Equipment Policy, with a particular focus on dual-use items, to confirm that it continued to be fit for purpose. – The GRC continued to track top and emerging risks, our risk appetite and other management information metrics, as well as other early warning measures to understand sensitivities and the likelihood of the potential impact to our operations, customers and stakeholders. The Committee’s consideration of the newly emerging private credit market and review and challenge of Group activities in this market is an example of active risk management. The Group’s exposure to private credit was closely managed throughout the year and remains a relatively small portion of the overall lending and investment portfolio. – The GRC requested reports on the risk profile of key business areas in local geographies and invited principal subsidiary chairs and relevant management to attend and participate in discussions at meetings. – The GRC has spent time on risk culture as part of the Group’s wider 'How We Succeed' ambitions in promoting a high-performance culture. The Committee has overseen the implementation of the Risk Culture Framework, a core component of the overall organisational culture, and the introduction of risk culture self- assessments. – The GRC spent time discussing climate risk, as rapidly-evolving macroeconomic and geopolitical forces continued to drive the climate risk context in 2025. Risk framework and policies Effective risk management policies, frameworks, appetites and thresholds, and oversight of these, are essential for HSBC to safely, consistently and sustainably support customers, manage risk and deliver strategic aims. – Amendments were made to the risk management framework to enable an improved understanding of how the Group’s approach to risk management works in practice and to support delivery of the Group strategy. The document has been restructured and rewritten to facilitate a synergised and integrated approach to risk management, as well as making it more accessible and relatable. – After a significant review of the Group risk appetite framework (GRAF) in 2024, the 2025 risk appetite refresh proposed a small number of changes to the qualitative statements and quantitative metrics. At the request of the Committee, Oliver Wyman LLC performed an embeddedness review of the GRAF and concluded that HSBC is now meeting, or exceeding, industry good practice in the majority of GRAF dimensions. The output of the Group risk appetite refresh informs the Financial Resource Plan constraints assessment and helps to identify where the risk appetite statement is being partially or fully utilised to meet strategic objectives. – The Group has a risk appetite statement to define risk appetite and tolerance thresholds, which forms the basis of the risk management procedures for the first and second lines of defence, the Group’s capacity and capabilities to support customers, and the achievement of strategic goals. The GRC maintained oversight of the Group’s risk appetite framework, reviewing enhancements to the Group’s risk appetite statements and recommending these to the Board for approval. – The Committee has monitored the Group’s control processes and escalation protocols through various reports, and has considered risk acceptance, rapid escalation processes, the adequacy of internal reporting tools and reporting on various issues. Treasury risk It is essential that capital and liquidity risk is monitored effectively, and the Group takes active steps to maintain its capital and liquidity positions. Regular stress testing is undertaken to ascertain the Group’s operation when under stress. Developing action plans and guardrails to cover scenarios of recovery or resolution at subsidiary or Group level is a vital part of HSBC’s prudential risk management. – The Group proactively tracks and maintains safeguarding of its capital and liquidity positions, utilising early warning indicators, sensitivity analysis, capital and liquidity reporting and adequacy. It performs internal and regulatory stress tests to measure resilience and performance against a range of stress scenarios, and to challenge the strategic management actions that could be applied against anticipated stress events and headwinds. This capability has been critical this year to allow us to consider numerous scenarios relating to the uncertainty in the external environment and to reposition portfolios accordingly. – The GRC conducted its annual review and challenge of the Group’s ICAAP and ILAAP, and provided its recommendations to the Board for approval. In relation to stress testing exercises, the GRC reviewed the Group Recovery Plan stress scenarios and results, and an internal climate scenario analysis was also undertaken. The Committee reviewed and approved the Group-wide internal stress test, scenarios and outputs, which contributes to the Group’s commitment to regularly test the resilience of the balance sheet and profit and loss under multiple scenarios of varying severity. In response to the Bank of England’s updated approach to stress testing the UK financial system, the Bank Capital Stress Test (‘BCST’) scenario was considered, and results approved. – As part of its regulatory obligations, the Group is required to show how its recovery and resolution strategies could be executed effectively and identify any risks to successful implementation. The GRC continued its oversight of the Group’s progress in maintaining and developing its capabilities under the Bank of England’s requirements for resolvability. Further to the March 2025 deadline for meeting the PRA’s Trading Activity Wind Down requirements, the Group confirmed that it is able to perform an orderly 24-month wind down of trading activities. The GRC will continue to monitor the development of our Trading Activity Wind Down capabilities in order to meet regulatory policy expectations. – To provide sufficient time and focus on Treasury-related topics, four separate briefings were held throughout the year, which were well attended by members of the Committee and the Board. Topics included: ICAAP, ILAAP, restructuring planning, Interest Rate Risk Assessment, Group Recovery Plan, BCST, Interest Rate Risk in the Banking Book (’IRRBB’), Hold To Collect Guardrails, and a deep dive into the Resolvability Assessment Framework. The format was well received by Directors and will continue in 2026. HSBC Holdings plc Annual Report on Form 20-F 245 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Risk Committee Principal activities and significant issues considered during 2025 (continued) Risk areas Key issues Conclusions and actions Model risk HSBC can face risks from inappropriate or incorrect business decisions arising from the use of models that have been inadequately designed, implemented or used, or do not perform in line with expectations and predictions. – The GRC continued to receive regular updates on model risk management, focusing on two key items: i) the implementation of Supervisory Statement (SS) 1/23 – ‘Model risk management principles for banks’; and ii) progress in strengthening wholesale internal ratings- based models. The GRC has overseen the regulatory engagement with the PRA and their subsequent feedback on implementation, updated action plans and resourcing required to address the increased validation requirements. Resilience/ Operational risk A failure in resilience could lead to a situation where HSBC customers might suffer significant disruption to services or loss of data. Technology risks (including cybersecurity) could cause unmanaged disruption to any technology system within HSBC, as a result of malicious acts, accidental actions, poor technology practice, or technology system failure. – The GRC continued its oversight of the Group’s implementation of operational resilience capabilities in line with PRA and FCA policies. The Operational Resilience Group Level Self Assessment was recommended by the Committee to the Holdings Board for approval in March 2025, with the material completion of the implementation of the Operational Resilience (SS1/21 and the PRA rulebook) for UK Important Business Services (IBS) and Important Group Business Services (IGBS). This has resulted in overall improvements to resilience, with fewer disruptions across our UK entities in particular. An additional briefing session on operational resilience was held in March to prepare the Committee for recommendation of the self- assessment. – The GRC regularly reviewed reports on the Group’s technology risk profile, as well as receiving updates on cybersecurity risk. Reports have focused on the technology risk and control environment, and the Committee has supported the drive for continuous risk reduction, progress with our strategic future state through the Digital Acceleration Programme, and the heightened external cyber threat environment. The GRC continued with its strong focus on understanding the Group’s data risk landscape and the mobilisation of the Group Data Execution Programme. This has included the tracking of progress made and close monitoring of timelines. – The Committee has been specifically briefed on external events that have either impacted peers in the market or third parties. Read across exercises were conducted and lessons learned taken forward to enhance our own operations and resilience. The Committee has also spent additional time on payments risk this year, which has been elevated as a key risk within the risk taxonomy. – The GRC will continue to work with the GTO to consider the risks and opportunities in the use of AI (generative and advanced) and digital assets and currencies in 2026. Wholesale/ retail credit risk HSBC faces risk from the possibility of losses resulting from the failure of a counterparty to meet its agreed obligations to pay the Group. – The GRC received regular updates on the macroeconomic and policy landscape impacting credit risk, both retail and commercial, and reviewed updates on the strategy and approach to managing credit risk and credit risk capabilities. The GRC received regular updates on the Group’s ECLs and provisions, and the credit risk arising from the wholesale and retail portfolios. The Committee tracked enhancements made to the Country and Industry components of the Credit Risk Appetite Framework, and the related data quality dependencies. The Committee was updated on the implementation of the Single Name Concentration Framework and actions being taken to enhance. Financial reporting risk HSBC is exposed to risks where controls supporting the reporting of its financial statements are not effective, resulting in material error or misstatement. – While the GAC has primary responsibility in relation to internal control systems (including financial controls), with further detail on page 236 , the GRC receives reports on entity level control assessments to enable the oversight of the effectiveness of such controls in support of the Group’s financial reporting. Financial crime risk There is a risk that HSBC’s products and services could be exploited for criminal activity, including fraud, bribery and corruption, tax evasion, sanctions and export control violations, money laundering, terrorist financing and proliferation financing. Insider threat also presents the risk that an individual with access to bank data, systems, infrastructure or finances could use that access to intentionally cause harm to the bank and its customers. – The GRC was updated regularly on the operation and effectiveness of the systems and controls pertaining to financial crime risk across geographies and businesses. In February, the Committee supported a direction from the Group Head of Financial Crime and Group Money Laundering Reporting Officer for improvements to be made to three key areas: i) customer due diligence; ii) financial crime investigations; and iii) customer selection and exit management process. The Committee will continue to monitor progress of these improvements in 2026. – Sanctions was a key area of focus for the Committee in 2025, with reporting providing detail on how changes to sanctions translated into our business and activities. The Committee was fully informed of our potential exposure to primary and secondary sanctions and how our capabilities are being utilised to detect problematic activity. – The risk of insider threat remained elevated in 2025 due to several factors, including cost-of-living challenges, the potential impact of Group restructuring on staff morale, the inherent risks associated with growth, and the potential for insiders to use new tools, such as AI, to attack the bank. HSBC Holdings plc Annual Report on Form 20-F 246 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Technology and Operations Committee “In 2025, the Committee provided oversight of the Group’s technology and operations strategies and supported their sustainability and safe growth-oriented execution, amid rapid technological change and rising external complexity.” Eileen Murray Chair Group Technology and Operations Committee For Committee membership, see Board biographies on pages 220 to 223 and for meeting attendance in 2025 see page 228 . Key responsibilities The Committee’s key responsibilities include: –  reviewing, challenging, and making recommendations to the Board on technology strategy and related matters; –  overseeing HSBC’s data strategy and framework; –  overseeing HSBC’s cybersecurity strategy and framework; and –  overseeing HSBC’s global operations (including payments, third party management, corporate real estate, and operational resilience). I am pleased to introduce the Group Technology and Operations Committee (‘GTO’) report and to provide an overview of the key matters considered in 2025. As highlighted in last year’s report, we expanded the scope of the GTO to include oversight of the Group Chief Operating Officer’s ('GCOO') remit. We have detailed the key areas of Committee focus across both the GCOO and Group Chief Information Officer ('GCIO') accountabilities below. Areas of significant focus during 2025 During the second year of operation of the GTO, we continued to provide close oversight of the GCIO priorities, including execution of the technology strategy and enhancement of technology controls. We challenged management on prioritisation of deliverables and the feasibility of achieving these within the proposed timescales. We dedicated significant time to understanding management’s progress to evolve the holistic data strategy. This included the review of detailed execution plans, proposed changes to the operating model for data resources and discussion of how accountability for delivery of the plan is being supported by regular metrics, allowing progress to be measured. We considered the ambitions and strategic plans relating to AI and digital assets and currencies, with particular focus on understanding areas of opportunity, peer activity in these areas, the regulatory landscape and the maturity of supporting risk frameworks and controls. From a cybersecurity perspective, we discussed the strategic priorities including ongoing control enhancements to keep pace with the ever- evolving threat landscape. The GTO received regular updates on the cybersecurity exposure across all third parties, their adherence to HSBC’s enhanced control standards and implementation progress. We provided feedback on the GCOO strategy, which will continue to evolve into 2026. The Group’s third party strategy, including how we oversee the risks posed by material suppliers, was regularly discussed. Given the increasing volume of external incidents impacting the financial services and other industries, with root causes related to third and fourth parties, this is a significant concern and all aspects of third party management will be a continued focus in 2026. The global operational resilience programme was discussed several times, including updates on the status of control and process improvements being implemented to make the programme more sustainable, and the risks and challenges relating to regulatory expectations regarding resilience in a number of jurisdictions. We also reviewed the ongoing development of a strategic framework to support Group-wide location strategy decisions, incorporating key factors such as future state workforce and skills, corporate real estate portfolio, geopolitical considerations and the macroeconomic environment. Enhancing accountability The GTO has continued to work closely with management, to oversee actions being taken to reinforce and embed enhanced accountability for the most critical transformation programmes. We received several updates on how relevant lessons learned, in respect of complex transformation programmes, were being considered and applied to other transformation initiatives. We reviewed a number of strategic programmes with significant technology components, including global foreign exchange, wholesale credit and lending, foreign exchange, and payments. The GTO also received regular updates on management’s programmes to meet regulatory deliverables and address technology and operations- related risk and control matters, commensurate with the Group’s risk profile. We continued to challenge the approach to prioritisation and delivery timelines, while remaining cognisant of the complexity of the estate. Assurance from Risk and Global Internal Audit on the robustness of their approaches was also obtained. Connectivity within the Group We continue to invite observers from the principal subsidiaries to our meetings. We held three subsidiary-focused meetings during 2025, with a focus on operational resilience, and other key risk and control themes. We discussed regulatory regimes across the different markets, progress against agreed timelines, challenges to meet expectations, metrics reporting and dependencies on Group-level programmes and deliverables. Board education The GTO hosted three training sessions in 2025 to which all Board members were invited. These sessions provided an opportunity for directors to engage with external subject matter experts and to discuss external insights and regulatory developments relating to critical topics: data and third-party risk management, and cybersecurity. Additionally, in January 2025 there was a three-day visit to Mexico City that included visits to a retail branch, call centre and the Global Service Centre. This enabled in-person interactions with several teams across technology and operations, and enhanced our understanding of key areas of focus and progress in the region. I would like to thank my fellow members for their contribution throughout 2025. Committee performance Finally, I was pleased that the annual review of the GTO’s performance concluded that the GTO continued to operate effectively. Further details of the review can be found in the 'Board and committee performance review' section on page 231 . Eileen Murray Chair Group Technology and Operations Committee 25 February 2026 HSBC Holdings plc Annual Report on Form 20-F 247 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Technology & Operations Committee Committee governance The GTO operates under delegated authority from the Board and advises the Board on matters concerning the Group’s technology and operations strategies and related matters. The Chair reports on the key matters and discussions at the subsequent Board meeting, and the Board also has access to the GTO papers and receives copies of meeting agendas and minutes. The GCIO, GCOO, Group CEO, Group Chief Risk and Compliance Officer, Group Head of Resilience Risk, Group CFO, Group Head of Internal Audit, and the external auditor are standing attendees at GTO meetings. The Chair and members of the GTO also hold private meetings with the GCIO, GCOO, Group Chief Risk and Compliance Officer, and Group Head of Internal Audit, as required. The Chair meets regularly with the GCIO and GCOO and other members of senior management, to discuss priorities and track progress on key actions. The Chair also meets regularly with the GTO secretary to ensure the GTO addresses its governance responsibilities. How the Committee discharged its responsibilities Engagement outside formal meetings The Chair engaged with a variety of stakeholders outside of regular meetings to enable deeper and more effective oversight of all key topics under the GTO’s remit. Inter-committee communication The GTO worked closely with the GRC and the GAC to address any areas of significant overlap, and to oversee technology and operations more comprehensively through inter-committee communications. The committees worked closely to ensure appropriate alignment in the review, discussion, challenge, and conclusions on topics including technology, cybersecurity, data, operational resilience, third party management and innovation. This ensured that the committees benefited from each other’s expertise and challenge. Coordination between the GTO, GRC and the GAC is supported by cross-membership. The GTO Chair attends the GRC, the GRC Chair attends the GAC, and the GAC Chair attends both the GTO and GRC, strengthening connectivity and the flow of information between the committees. Connectivity with principal subsidiaries Non-executive directors from the principal subsidiaries are invited to attend all regular GTO meetings. In addition, three additional ‘GTO – Principal Subsidiaries’ meetings were held to discuss Operational Resilience and other key risk and control themes. Specific areas of focus included discussion of market-specific challenges, including differences in regulatory regimes, progress against agreed timelines, challenges to meet expectations, and dependencies on Group-level programmes and deliverables. There was also sharing of learnings from the UK Operational Resilience Programme and other relevant regulatory initiatives. Education sessions facilitated by third parties The Chair organised three education sessions presented by independent third parties, to which all Board members were invited. For each topic, the third parties also provided peer/industry insights, and suggested key questions that the Board should ask management. In March 2025, a detailed session was presented on data opportunities and challenges. This covered the role of data in the wider digital ecosystem, different value drivers, perspectives on a good data strategy, industry view and key Board considerations. In June 2025, the focus was on third-party risk management including the global regulatory landscape, various thematic deep dives for example, fourth parties and concentration risk and vision for the future. In September 2025, cybersecurity was covered, including an overview of the threat landscape, attacks and response, regulatory landscape and the role of the Board in response to a cyber incident. Principal activities and significant issues considered during 2025 Area of focus Key issues Conclusions and actions Technology strategy Group-wide focus, including alignment with each of the businesses, to implement the technology strategy. – The GTO regularly reviewed and challenged updates, including supporting metrics, in relation to the technology strategy and the various programmes in place to deliver control improvements. – The GTO challenged whether funding and resource was appropriate to support execution timelines. – The GTO considered opinions provided by Risk and Global Internal Audit on the robustness of the approach and progress being made. – The GTO met with CIOs, COOs, and board members from the principal subsidiaries to discuss progress, dependencies, and challenges regarding Group-wide implementation of technology programmes and management of risk and control issues. Investment and transformation A number of significant programmes with material technology and operations components have been subject to replanning and/or did not deliver the benefits expected. – The GTO oversaw the ongoing implementation of improvements to drive individual accountability for significant investment and transformation activities. – The GTO discussed the root causes for the replanning of specific programmes and requested the outputs of lessons learned activities and evidence of read across. – Following the Group-wide reorganisation, a key focus was on change and execution risks and on managing and simplifying the volume of change-related activity. Investment and transformation: Global FX Global FX is a significant proposition for HSBC and is subject to an ongoing investment programme. – The GTO reviewed the Global FX strategy and investment case, including the business context, competitive landscape, alignment to the desired future state architecture, required capabilities and key opportunities and challenges. Investment and transformation: Wholesale Credit and Lending Wholesale credit and lending is a significant proposition for HSBC and is subject to an ongoing investment programme. – The GTO reviewed the wholesale credit and lending strategy and investment case, including the business context, competitive landscape priority, alignment to the desired future state architecture, transformation initiatives, risks and dependencies. Operational resilience Operational resilience remains a key priority for HSBC. – The GTO regularly discussed progress of work to improve resiliency of services to customers including ongoing efforts to simplify the technology estate and to reduce service interruptions impacting customers. – The GTO reviewed plans to further embed the operational resilience framework, implementation of strategic tooling, automation of manual controls and meeting regulatory requirements. – The GTO discussed challenges being encountered by the principal subsidiaries to meet market- specific regulatory requirements. HSBC Holdings plc Annual Report on Form 20-F 248 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Group Technology & Operations Committee Principal activities and significant issues considered during 2025 (continued) Area of focus Key issues Conclusions and actions Generative AI strategy While GenAI will provide operational efficiency, none of the use cases in production will deliver significant financial impact. – The GTO reviewed and challenged strategies to leverage the opportunities presented by innovation and new technologies, including in relation to GenAI. – The GTO discussed the recent streamlining of governance and approval processes, enhancement of tooling and upskilling of talent, approach to risk management, the fast-evolving regulatory landscape, and key next steps to be taken by management to further enable the opportunities presented by GenAI. Digital assets and currencies strategy Digital assets and currencies are a fast-changing market with significant regulatory developments and geopolitical risks. HSBC must provide clients with access to these products in order to maintain market position. – The GTO reviewed and challenged the Group's digital assets and currencies strategy. – The GTO discussed the opportunities presented by digital assets, as well as the regulatory and competitive environments, the risks, controls, technology architecture and the importance of innovation to empower our customers. Cybersecurity Cybersecurity remains one of the most significant risks faced by the financial services industry. – The GTO received updates from the GCIO and Global CISO on all key components of the cybersecurity programme, including: – ongoing work to enhance the risk and control framework and to improve resilience; – the external threat environment including incidents; – talent acquisition and competition; – incident readiness and playbook testing; and – cybersecurity exposure across third parties and actions being taken to resolve. – The GTO challenged management on capacity and capability to deliver its strategy and discussed continued focus on prioritisation. Data A holistic Group data strategy is required to drive long term sustainable benefits and enable AI at scale. – The GTO requested specific updates on the holistic Group data strategy and operating model and reviewed detailed business cases relating to data as well as key milestones and accountable executives. – A newly-defined suite of metrics will be used to demonstrate progress and business outcomes. – Activities to implement improvements to data risks and regulatory reporting continues in parallel to the data strategy, the latter acting as a sustainable and critical complement to drive data quality at scale. The Committee continued to have visibility of updates being presented to the GRC on this topic. GCOO strategy Development of a holistic strategy across all components of the GCOO portfolio. – The GTO regularly reviewed and challenged the GCOO strategic priorities, including specific key outcomes, proposed timelines, known dependencies and development of metrics to track and measure success. Location strategy Significant focus to develop a holistic Group-wide location strategy to progress from previously locally driven, reactive and focused on cost. – The GTO regularly discussed and oversaw the development of a holistic Group-wide location strategy and operating model. Key components included business growth priorities, workforce needs, customer proximity, risks, financials, regulatory compliance, and macroeconomic conditions. – The GTO received and discussed an independent assessment from a third party on the strategy, progress made and next steps. – The GTO will continue to provide oversight in 2026 on implementation of the new framework and governance model for all location and real estate related decisions. Third party management Reliance on third parties is one of the most significant risks faced by the financial services industry given potential impacts on resilience. – The GTO regularly reviewed and challenged the strategy and updates in relation to third party management, including progress on implementing control and risk assessment standards uplifts, enhancements to continuous risk monitoring, review of risk acceptances and implementation of new systems and technology to drive operational efficiency. – The GTO also considered evolving regulatory expectations in relation to suppliers (including broader consideration of fourth and fifth parties) and other relevant industry activity in relation to third parties. – The GTO will maintain focus on all aspects of third-party management during 2026. Resource and capability Having the right skills and resources is critical to achieving our strategic ambitions. – The GTO reviewed the GCIO and GCOO people and capability plans. – Key resources, dependencies on subject matter experts, and future skills needs were also considered in respect of all programme updates and strategies and will continue to be considered during 2026. Focus of future activities The GTO ’ s focus for 2026 aligns broadly with our priorities in 2025, with continued oversight of the following: – execution of the technology and GCOO strategies and how they are aligned with and enabling the business strategies; – execution of the cybersecurity strategy and progression of the actions being taken to manage the risks and implications of the evolving geopolitical environment and to mitigate the increasing sophistication of threats; – priority innovation initiatives, including AI and digital assets, given the rapidly evolving market; – execution of the holistic data strategy with a focus on future opportunities, including those enabled by AI; – execution of the GCOO strategy and its key components, including metrics to measure performance and alignment with the business and technology strategies; – the Group-wide location strategy and framework and the interplay with real estate and workforce plans; – all aspects of third-party management, including strategy, risk management and opportunities to leverage new technology and tools to simplify processes; and – embedding of operational resilience across the organisation, including further automation of manual controls. HSBC Holdings plc Annual Report on Form 20-F 249 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Directors’ remuneration report “Our remuneration approach is driving a high-performance culture, supporting HSBC’s growth as a simpler, more agile, and customer- focused bank.“ Dame Carolyn Fairbairn Chair Group Remuneration Committee For committee membership see Board biographies on pages 220 to 223 . Key responsibilities The Committee’s key responsibilities include: – making recommendations to the Board, for approval by shareholders, on the Directors' remuneration policy; – setting the overarching principles, parameters and governance framework of the Group’s remuneration policy; – approving the scorecard measures, targets and remuneration of executive Directors and other senior Group employees; and – regularly reviewing the effectiveness of the remuneration policy of the Group and its subsidiaries in the context of strategy, culture, conduct and effective risk management. All disclosures in the Directors’ remuneration report are unaudited unless otherwise stated. Disclosures marked as audited should be considered audited in the context of the financial statements taken as a whole. Dear shareholders, I am pleased to present our 2025 Directors’ remuneration report on behalf of members of the Group Remuneration Committee (the ’Committee’). This report includes details of our Directors' remuneration arrangements in respect of the year to 31 December 2025 and a summary of how we intend to apply the Directors' Remuneration Policy in the forthcoming year. I would like to thank shareholders for their support of our new Directors' Remuneration Policy with a 96.10% vote in favour at the 2025 Annual General Meeting. I have set out below a summary of our 2025 performance, key decisions made by the Committee and how the Committee has applied the new policy. Performance in 2025 Financial performance Our financial performance in 2025 demonstrates the intent and discipline with which we are executing our strategy. We reported profit before tax of $29.9bn , down $2.4bn compared with 2024, primarily due to a $4.9bn year-on-year net impact from notable items. In 2025, notable items included the recognition of dilution and impairment losses of $2.1bn related to our associate BoCom, reserve recycling losses of $1.5bn following the completion of the sale of our French retained portfolio of home and certain other loans, legal provisions of $1.4bn and restructuring and other related costs associated with our organisational simplification of $1.0bn . Constant currency profit before tax excluding notable items increased by $2.4bn to $36.6bn . Reported revenue of $68.3bn increased by $2.4bn compared with 2024, mainly due to fee and other income growth in Wealth and in Wholesale Transaction Banking, particularly in Foreign Exchange in CIB. In 2025, target basis operating expenses grew by 3 %, in line with our targeted growth commitment. This reflected higher planned spend and investment in technology and included the impact of simplification- related saves associated with our announced reorganisation. Our RoTE for 2025 was 13.3% , compared with 14.6% in 2024. Excluding notable items, RoTE was 17.2% , a 1.6 percentage point increase on 2024. The Board approved a fourth quarterly dividend of $ 0.45 per share, bringing the total dividend announced for 2025 to $ 0.75 per share. Furthermore, in respect of 2025 we announced two share buy-backs worth a total of $6bn . Strategic performance We continued to make progress in reshaping the Group. In 2025 we announced 11 transactions and have commenced strategic reviews of our retail businesses in Australia, Indonesia and Egypt, and also of HSBC Life Singapore. We completed the privatisation of Hang Seng Bank on 26 January 2026, which will deepen our presence in one of our home markets and position us to outpace market growth. Our UK and Hong Kong businesses hold leading market positions and have seen good financial performance in 2025. Our focus on customers has seen improved net promoter scores ('NPS') in the UK across both RBW and CMB. Hong Kong RBW recorded its highest ever NPS, up 9 points from 2024. We have also seen improvements in NPS in strategic IWPB markets and in CIB versus 2024. I am pleased that our employee engagement index remains strong despite the significant changes to our businesses. Over 87% of colleagues participated in our 2025 employee Snapshot survey. Though falling by two percentage points compared with 2024, employee engagement measured through the survey remains high at 78% , four percentage points above the global financial services benchmark. Key remuneration decisions for executive Directors Annual incentive for 2025 performance Scorecards were set at the start of the year to align with our reported financial performance, excluding the impact of strategic transactions and one-offs on the Group's financial performance in 2025, consistent with the approach taken in previous years. Based on the strong underlying financial performance delivered during 2025 and good progress made on execution of our strategic objectives, the 2025 scorecard outcome for Georges Elhedery of 80.13% results in an annual incentive of £3,605,000 . This compares with a 2024 scorecard outcome of 78.79% and annual incentive of £1,677,000 when Georges was assessed against both Group CFO and Group CEO scorecards and pay outcomes were pro-rated accordingly. Pam Kaur was appointed as an executive Director on 1 January 2025. Pam's 2025 scorecard outcome of 80.03% results in an annual incentive of £2,100,000 . 2023–2025 long-term incentive ('LTI') vesting Georges Elhedery and Pam Kaur participated in the 2023–2025 LTI that will vest in March 2026. The Group exceeded its maximum relative total shareholder return ('TSR') and carbon reduction targets, demonstrating the outperformance of the Group versus our peers over the period and progress on sustainability. Group RoTE was above threshold performance and was assessed at 30.8% of maximum. Targets for sustainable finance and investment and capital reallocation to Asia measures were not met . Overall, 45.19% of the original award will vest and be released on a pro-rata basis over the next five years. The Committee is comfortable that the pay outcomes for both executive Directors are appropriate in the context of company and individual performance for 2025. 2026 fixed pay The Committee considered making a salary increase for the Group CEO and Group CFO, aligned with the overall increase being considered for our Group colleagues, noting the strong 2025 performance delivered. However, taking into account that 2025 has been a significant year of transformation and to align with our more targeted approach to HSBC Holdings plc Annual Report on Form 20-F 250 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information awarding fixed pay increases for the wider workforce, there will be no salary increase for either the Group CEO or Group CFO in 2026. Therefore, Georges Elhedery's base salary for 2026 will be £1,500,000 and Pam Kaur's base salary will be £875,000 . 2026–2028 LTI awards The Committee intends to grant both Georges Elhedery and Pam Kaur the maximum 2026-2028 LTI award of 600% of base salary (Georges Elhedery: £9,000,000 , Pam Kaur: £5,250,000 ). The value realised from the award is subject to performance over the next three years. The award will vest in five equal annual instalments after the end of the performance period and shares delivered are subject to a one-year retention period on vesting. Performance measures and targets The Committee has reviewed the performance measures used for our incentive arrangements to ensure that these are aligned to the Group's priorities and balance delivery of financial and strategic performance. For the 2026 annual incentive scorecard, we will retain the same financial measures as 2025, aligned to the Group's priorities, including our core measures of profit before tax ('PBT'), Group RoTE and costs, plus a measure on fee income growth (all excluding notable items). We will assign equal weighting of 15% to all four measures to better incentivise growth and maintain discipline on costs, while retaining focus on delivery of RoTE of 17% or better for our shareholders, excluding notable items. 2026 non-financial measures will consist of our strategic objectives (10% weighting), customer measures (15% weighting), people & culture measures (5% weighting) and personal objectives (10% weighting). For the 2026-2028 LTI, we will retain Group RoTE and relative TSR and increase the weighting for each to 42.5% from 40%. Based on shareholder feedback, we have removed our own emissions measure, reflecting that this activity is now largely considered business as usual, and introduced a financed emissions metric, weighted at 5%. This will assess whether financed emissions for our most carbon- intensive sectors - Oil & Gas and Power & Utilities - remain within our defined risk limits to enable the Group to progress towards its 2030 targets. In addition, the sustainable finance and investment measure, which is a material metric in support of our ESG ambitions, will have a 10% weighting. Though the overall weighting of the environment measure will reduce to 15%, this continues to represent a significant proportion of the increased total LTI opportunity. It also represents the potential for higher absolute reward than in previous years because of the new policy. We will keep the weighting under review as we broaden the scope of the financed emissions to cover other sectors. Performance targets and ranges continue to balance achievability with stretch, ensuring they act as an effective incentive for management, while reflecting the increased pay opportunities of our new policy. We will continue to utilise a risk modifier and operate a judgement- based approach to adjustments for all risk and compliance matters. Ñ For further details, see ‘Implementation for 2026‘ on page 257 . Rewarding our colleagues In 2025, we continued to embed our new performance and pay approach to deliver high performance and increase transparency. In our Snapshot survey, 86% of colleagues reported a clear understanding of what is expected of them, and 81% of colleagues agreed they received feedback that helps improve their performance. Pay sentiment continues to increase year-on-year in most areas because of actions taken through 2024 . Ñ For further details, see ‘Our approach to workforce reward‘ on page 259 . Fixed pay Fixed pay remains the largest part of most colleagues' reward so we are pleased to be accredited as a global living wage employer for the third consecutive year. This means we meet or exceed living wage benchmarks in all our markets. This gives confidence that we provide core financial security to colleagues through fixed pay. Fixed pay is primarily reviewed through our annual pay cycle. Effective in 2026, we have awarded an overall fixed pay increase of 3.2% . The level of increases vary by market, depending on the economic outlook and individual roles. The highest increases were made to lower paid colleagues relative to relevant market benchmarks. Variable pay The Committee determined total variable pay of $3,930m , up 10% compared with the $3,570m awarded in 2024 after adjusting for disposals and organisational changes. This was determined based on a review of our performance against financial and non-financial metrics. We considered the strength of our financial performance in 2025 and the rati o between variable pay and pre-variable pay profit before tax, the Group ’ s performance against key risk and compliance metrics, and our total compensation market position and the broader economic outlook. Total compensation across all our businesses increased relative to 2024, rewarding colleagues for their contribution to our performance. We strongly differentiated to ensure our highest performers had the strongest variable pay outcomes compared to prior year. The Committee extends its appreciation to colleagues across HSBC who have worked so hard and effectively to deliver our 2025 results. Other remuneration matters We welcome the October 2025 changes to the PRA remuneration rules, which are now simpler and more proportionate compared with other financial markets. Notably, the reduction in deferral length, the removal of the post-vesting retention period for deferred awards, and the removal of the variable-to-fixed pay ratio cap implemented in 2023 present an opportunity to simplify our remuneration structure. These changes can help enhance our pay competitiveness and allow for a greater proportion of total compensation to be delivered as variable pay. During 2025, the Committee undertook a review of the pay structure for senior employees in light of these changes. It was determined that no amendments would be made to the deferral or post-vesting retention periods for executive Directors. In accordance with the current shareholder-approved policy, executive Directors will continue to receive LTI awards with a seven-year deferral period, and any shares awarded as part of variable pay will remain subject to a one-year post- vesting retention period. The Committee will continue to keep this matter under review and will engage with major shareholders on any potential material changes to the deferral structure for our executive Directors based on the revised PRA remuneration rules. For Group colleagues subject to the PRA remuneration rules, the deferral period for variable pay awards relating to the 2025 performance year has been reduced to four years, the one-year post-vesting retention period for deferred shares has been removed and the threshold for the 60% deferral rate has increased from £500,000 to £660,000. We are also recommencing the payment of dividend equivalents on deferred share awards for all colleagues where regulations permit. This includes executive Directors, in alignment with our shareholder-approved remuneration policy. Looking ahead to 2026, a key priority will be to review the pay structure for our senior executives. This review will ensure that our remuneration approach continues to support a high-performance culture, incentivises the achievement of our financial and strategic objectives, and promotes robust risk management and exemplary conduct standards. Conclusion On behalf of the Committee, I would like to thank our shareholders once again for their support of our new policy and their valuable feedback. We are committed to regular engagement and I look forward to further dialogue in the year ahead. As Chair of the Committee, I hope you will support the 2025 Directors’ remuneration report at the 2026 AGM. Dame Carolyn Fairbairn Chair Group Remuneration Committee 25 February 2026 HSBC Holdings plc Annual Report on Form 20-F 251 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Remuneration at a glance Our Directors’ remuneration policy was approved at the AGM on 2 May 2025. The full policy can be found on pages 285 to 293 of our Annual Report and Accounts 2024 and in the Directors’ Remuneration Policy Supplement, which is available under Group results and reporting in the ‘Investors‘ section of www.hsbc.com. Remuneration policy summary – executive Directors Fixed pay Base salary – Base salary is paid in cash on a monthly basis. – From 1 March 2026 (unchanged from prior year): – Georges Elhedery: £1,500,000 – Pam Kaur: £875,000 Benefits – Taxable benefits include the provision of medical insurance, accommodation, car, club membership, independent legal advice in relation to matters arising out of the performance of employment duties for HSBC, tax return assistance or preparation, and travel assistance. – Non-taxable benefits include the provision of a health assessment, life assurance and other insurance coverage. Cash in lieu of pension – 10% of base salary is paid on a monthly basis. – This allowance, as a percentage of salary, is aligned with the maximum contribution rate that HSBC could make for the majority of employees who are defined contribution members of the HSBC Bank (UK) Pension Scheme. Variable pay Annual incentive Maximum – 300% of base salary. Performance measures – Performance is measured against an annual scorecard of financial and non- financial measures. – Performance measures for the 2026 Group CEO and Group CFO annual scorecards are set out on page 257 . Operation – Payout ranges between 25% and 100% for minimum to maximum performance. Performance below minimum target will result in 0% payout. – Awards can be delivered in any combination of cash and shares, with shares normally representing no less than 50% of the award. Shares are normally immediately vested. Long-term incentive (‘LTI’) Maximum – 600% of base salary. Performance measures – Prior year performance is taken into consideration when assessing the value of the LTI grant. – Award granted is subject to a forward-looking three-year performance period from the start of the financial year in which the awards are granted. Financial measures will generally have a weighting of 60% or more. – Performance measures for the 2026-28 LTI award are set out on page 258 . Operation – At the end of the performance period, the performance outcome will be used to assess the percentage of the awards that will vest. – Awards will vest in five equal instalments, with the first vesting on or around the third anniversary of the grant date and the last instalment vesting on or around the seventh anniversary of the grant date. Other policies applicable to variable pay Retention – On vesting, the net number of shares that have vested will normally be held for a retention period of up to one year. Malus – Unvested awards are subject to malus (i.e. reduction and/or cancellation) during any applicable deferral period. Clawback – Paid or vested awards are subject to clawback (i.e. repayment or recoupment) for a period of seven years from the date of award, extending to 10 years in the event of an ongoing internal/regulatory investigation at the end of the seven-year period. Shareholding guidelines In-employment – 600% of base salary within five years of appointment. Post-employment – 600% of base salary to be held for two years. HSBC Holdings plc Annual Report on Form 20-F 252 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report 2025 executive remuneration outcomes Further details are set out in our annual report on Directors‘ remuneration on pages 253 to 256 . Georges Elhedery Pam Kaur Group CFO until 1 September 2024; Group CEO from 2 September 2024 Group CFO from 1 January 2025 Single total figure of remuneration (£000) Single total figure of remuneration (£000) 2025 2025 2024 Not an executive Director in 2024 Annual incentive outcome (£000) Georges Elhedery Maximum opportunity Maximum opportunity 2025 annual incentive 2025 annual incentive Pam Kaur 2023-2025 long-term incentive (LTI) outcome (£000) Georges Elhedery (received in prior role as Co-CEO, GBM) Maximum opportunity Maximum opportunity 2023-25 LTI 2023-25 LTI Pam Kaur (received in prior role as Group Chief Risk & Compliance Officer) Executive Directors’ shareholding (% of salary) Georges Elhedery Pam Kaur Requirement Requirement Actual Actual 2026 target opportunities versus peers (£000) (Stock ticker and ranking by market capitalisation) Group CEO Group CFO Data source: Deloitte. 2025 total compensation based on 2024 year-end disclosures. 'Target' value of total compensation based on 50% of the maximum value for the annual incentive, or target value if disclosed; 50% of the maximum value for performance-based LTI; the maximum value of restricted shares; and one third of face value for share options. Market capitalisation ranking shown in brackets based on 3-month average as at 31 December 2025. HSBC Holdings plc Annual Report on Form 20-F 253 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Annual report on Directors’ remuneration This section sets out how our approved Directors’ remuneration policy was implemented during 2025. Single total figure of remuneration (Audited) The following table shows the single total figure of remuneration of each executive Director for 2025, together with comparative figures. Georges Elhedery was appointed Group CFO effective from 1 January 2023 and succeeded Sir Noel Quinn as Group CEO on 2 September 2024. Pam Kaur was appointed Group CFO and executive Director of the Board on 1 January 2025. Single total figure of remuneration (£000) Base salary Fixed pay allowance ('FPA') Taxable benefits Non- taxable benefits Cash in lieu of pension Total fixed Annual incentive Notional returns 1 Long-term incentive 2,3 Total variable 4 Total fixed and variable Georges Elhedery 2025 1,479 — 61 108 148 1,796 3,605 5 1,217 4,827 6,623 2024 989 1,288 39 58 99 2,473 1,677 8 1,418 3,103 5,576 Pam Kaur 2025 863 — 71 66 86 1,086 2,100 11 708 2,819 3,905 1 Deferred cash awards granted in prior years include a right to receive notional returns for the period between the grant and vesting date. This is determined by reference to a rate of return specified at the time of grant and paid annually, with the amount disclosed on a paid basis. 2 LTI awards were made in February 2023 at a share price of £ 6.357 for which the performance period ended on 31 December 2025. The value of the awards has been computed based on a share price of £ 10.708 , the average share price during the three-month period to 31 December 2025. The LTI granted to Georges Elhedery was in respect of 2022 performance in his role as Co-CEO, Global Banking and Markets ('GBM'), and for Pam Kaur in her role as Group Chief Risk and Compliance Officer. See the following section for details of the performance assessment, which resulted in 45.19 % vesting, and the award value attributable to share price appreciation. 3 The value of the 2022-2024 LTI for Georges Elhedery has been restated based on a share price of £ 8.442 to reflect the value of the award on 11 March 2025, when the first tranche of the award vested. In 2024, the value was based on the average share price during the three-month period to 31 December 2024 of £ 7.184 . 4 No malus or clawback was applied to executive Directors' 2025 variable pay awards or outstanding deferred awards from prior years. Fixed pay (Audited) Base pay As set out in the 2024 report, Group CEO base salary was £ 1,500,000 and Group CFO base salary was £ 875,000 , effective 1 March 2025. Benefits Taxable benefits include the provision of medical insurance, car benefit and tax support. Non-taxable benefits include the provision of life assurance and other insurance cover. The values of the significant benefits in the single total figure table are set out in the following table. Significant benefits Total taxable and non- taxable benefits (£000) Group income protection (non-taxable) Medical insurance (taxable) Car and driver (taxable) Other benefits Georges Elhedery 2025 102 25 18 24 169 2024 49 20 6 22 97 Pam Kaur 2025 62 10 38 27 137 Pensions As per the approved policy, each executive Director receives a payment of 10 % of base salary in lieu of pension contributions. HSBC Holdings plc Annual Report on Form 20-F 254 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Annual incentive (Audited) Both executive Directors met the minimum standard of conduct and behaviour for an annual incentive award to be made. The annual incentive award is awarded 50 % in cash and 50 % in shares. The shares portion of the award vests immediately at grant and is subject to a retention period of one year and clawback provisions. The award is determined by applying the outcome of their annual scorecard to the maximum opportunity, set at 300 % of base salary. In assessing performance, the Committee considered, and made no adjustment for, the impact of interest rates, re-confirming that variations in the macroeconomic environment and their impact on business outcomes remain for our executives to manage. The Committee considered carefully the wider context in which performance was delivered in 2025, including the strong total return delivered to shareholders over the year. They judged that the overall scorecard outcomes for both Georges Elhedery and Pam Kaur were appropriate against the targets set at the start of the year for financial, strategic and personal measures, and that the application of the risk and compliance modifier was not required. Executive Director 2025 annual incentive award value (£000) Base salary £000 Maximum opportunity (% of salary) Scorecard outcome Risk & compliance modifier Annual incentive £000 Georges Elhedery 2025 1,500 300 % 80.13 % Nil 3,605 Pam Kaur 2025 875 300 % 80.03 % Nil 2,100 Annual incentive scorecard assessment Weighting (%) Minimum (25% payout) Maximum (100% payout) Performance Assessment (%) Outcome (%) Financial (60%) 1 Group RoTE 2 25 13.0 % 16.0 % 17.2 % 100.00 25.00 Target basis operating expenses 2 15 3.5 % 1.5 % 3.0 % 43.75 6.56 Profit before tax ($bn) 2 10 $ 28.3 $ 34.6 $ 36.6 100.00 10.00 Fee income growth relative to balance sheet growth 3 10 2.0 % 6.0 % 8.1 % 100.00 10.00 Strategic (30%) Customer satisfaction 15 See strategic measures table for commentary 76.00 11.40 Deliver benefits of announced organisational changes 8 87.50 7.00 People and culture 7 50.00 3.50 Personal (10%) 10 See personal measures table for commentary Georges Elhedery Pam Kaur 6.67 6.57 Formulaic scorecard outcome (%) 80.13 80.03 Risk adjustment (%) — — Scorecard outcome after risk adjustment (%) 80.13 80.03 Maximum opportunity (£000) 4,500 2,625 Annual incentive awarded (£000) 3,605 2,100 1 The CET1 capital ratio of 14.9 % exceeded the tolerance level in the risk appetite statement as required by the underpin. 2 Excluding notable items. 3 FY24 excludes net fee income and net loans and advances to customers from our banking business in Canada and our business in Argentina prior to disposal. HSBC Holdings plc Annual Report on Form 20-F 255 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Strategic measures Measures Weighting Performance achievement Assessment Outcome Customer satisfaction Maintain and improve NPS scores/rank 15.0 % – Performance is assessed against NPS data from external providers, including InMoment sNPS survey for RBW and IWPB, Coalition Greenwich LC and Mid- market study and Savanta MarketVue Business Banking survey for CMB, and Coalition Greenwich Global Corporates Study for CIB. – We maintained market leadership in both RBW and CMB in Hong Kong, reaching a record NPS in RBW. – In the UK we ranked second for mid-market enterprises, improved our SME Business Banking ranking to fifth , and improved RBW NPS by 5 points compared to 2024. – We rose to first place in IWPB in mainland China and Singapore, and our score increased in the UAE. NPS declined slightly in India. – Amongst Corporates, CIB continues to rank first in Hong Kong, and scores rose in the UK, mainland China, Singapore and UAE. 76.00 % 11.40 % Deliver benefits of announced organisational changes Benefits realised and reorganisation programme health 8.0 % – We identified and achieved $ 1.2 bn annualised savings against a 2025 baseline of $ 1.0 bn . We are on track to have taken actions to deliver our $ 1.5 bn annualised cost reduction by the end of June 2026, which is six months earlier than planned. – Execution is on track with the majority of programme milestones tracking green throughout 2025 with identified gaps quickly remediated. 87.50 % 7.00 % People and culture Inclusion and retention of high performers 7.0 % – Senior leadership representation for women increased by 0.1 percentage points year-on-year to 34.7 % , for Asian heritage colleagues it increased by 1.6 percentage points to 40.9 % , and for Black heritage colleagues it remained flat at 3.0 % . These are above the minimum performance thresholds set, partly meeting the targets. – High performer attrition increased by 0.4 percentage points to 4.1 % , and was assessed as partly met given the outcome fell within the performance range. – The Inclusion index in our employee Snapshot survey improved by 0.1 percentage points to 78.3 % , above the minimum target set and was assessed as partly met. 50.00 % 3.50 % Personal measures Personal measures were set at the start of the year and measured by the Committee against agreed targets and key performance indicators. Georges Elhedery Weighting Performance achievement Assessment Outcome Regulatory excellence, wealth acceleration and strategic investments, Group technology strategy 10.0 % – Wealth fees and other operating income of $ 9.39 bn exceeded our maximum target of $ 8.8 bn, driven by Hong Kong and IWPB segments. Net New Invested Assets at $ 80.0 bn is below our threshold performance level of $ 87.6 bn. Overall, performance for this measure was assessed as partly achieving our targets. – Strong performance on Net App Demise with over 700 net reductions across the organisation, surpassing the maximum target set. – Good progress has been made on the most material issues on regulatory excellence. However, more could have been done by the Group to improve the pace of progress on long-standing regulatory deliverables and programmes for which Georges had an oversight role. 66.70 % 6.67 % Pam Kaur Weighting Performance achievement Assessment Outcome Regulatory excellence, Group Sustainability priorities, robust liquidity and capital management 10.0 % – Reviewed and reset the Group’s Sustainability strategy, related policies and financed emissions targets and published the revised Net Zero Transition Plan; continued enhancement on ESG disclosures in areas such as financed emissions and climate risk. – Delivered strong capital position throughout the year, with CET1 consistently above target operating range. – Delivered a robust liquidity position with no breaches throughout the year; enhancements were implemented to further strengthen liquidity management. – Good progress has been made on the most material issues on regulatory excellence. However, more could have been done by the Group to improve the pace of progress on long-standing regulatory deliverables and programmes for which Pam had an oversight role. 65.70 % 6.57 % HSBC Holdings plc Annual Report on Form 20-F 256 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Long-term incentive (’LTI’) awards LTI awards over 2023 to 2025 performance period (Audited) Georges Elhedery and Pam Kaur were each granted a 2023–2025 LTI award in February 2023 in their capacity as Co-CEO GBM and Group Chief Risk and Compliance Officer respectively, prior to their appointment as executive Directors. Sir Noel Quinn was also granted a 2023–2025 LTI award in February 2023 in his capacity as Group CEO. At the time of grant, the Committee determined that there were no windfall gains to consider for this award given the share price at grant ( £ 6.36 ) was above the share price at the previous LTI grant ( £ 5.38 ). The scorecard delivered an outcome of 45.19 % , reflecting strong shareholder returns across the performance period. The Committee received input from the GRC who assessed that the performance targets were delivered with appropriate risk management. On this basis, the Committee considered that no adjustment for risk matters should be made. The value of the 2023–2025 LTI shown below is based on the average share price during the three-month period to 31 December 2025 of £ 10.708 . The awards will vest in five equal annual instalments commencing in March 2026. On vesting, shares equivalent to the net number of shares that have vested (after those sold to cover any income tax and social security payable) will be held for a retention period of one year. Executive Director 2025 LTI values (£000) Award Ordinary shares granted Prorated for time in employment Performance outcome Risk & compliance modifier Shares to vest Value of shares to vest £000 Of which: face value £000 Of which: share appreciation £000 Georges Elhedery 2025 2023-25 LTI 251,474 251,474 45.19 % — 113,641 1,217 722 495 Pam Kaur 2025 2023-25 LTI 146,393 146,393 45.19 % — 66,154 708 420 288 Former director Sir Noel Quinn 2025 2023-25 LTI 861,422 669,995 45.19 % — 302,770 3,242 1,925 1,317 Assessment of the 2023–2025 LTI awards Measures (weighting) 1 Minimum (25% payout) Target (50% payout) Maximum (100% payout) Actual Assessment Outcome RoTE with CET1 capital ratio underpin 2 ( 25 % ) 13.0 % 14.3 % 15.5 % 13.3 % 30.8 % 7.69 % Capital reallocation to Asia with CET1 capital ratio underpin 3 ( 25 % ) 49.0 % 50.5 % 52.0 % 44.8 % 0.0 % 0.00 % Transition to net zero 4 ( 25 % ) Carbon reduction (own emissions) 64.0 % 68.0 % 72.0 % 84.9 % 100.0 % 12.50 % Sustainable finance and investment $ 588 bn $ 700 bn $ 756 bn $ 496 bn 0.0 % 0.00 % Relative TSR 5 ( 25 % ) At median of the peer group Straight-line vesting between minimum and maximum At upper quartile of the peer group Above upper quartile 100.0 % 25.00 % Total 45.19 % 1 Awards vest on a straight-line basis for performance between the minimum, target and maximum levels of performance set out in this table. 2 Assessed based on RoTE in the 2025 financial year. The CET1 capital ratio of 14.9 % exceeded the level required by the underpin. 3 Assessed based on share of Group tangible equity (on a constant currency basis and excluding associates) allocated to Asia by 31 December 2025. 4 Carbon reduction assessed on percentage reduction in total energy and travel emissions achieved by 31 December 2025 using 2019 as the baseline. Sustainable finance and investment assessed on cumulative financing provided over the performance period. 5 The peer group was: Bank of China (Hong Kong), Barclays, BNP Paribas, China Merchants Bank, Citigroup, DBS Group Holdings, J.P. Morgan Chase & Co., Lloyds Banking Group, OCBC Bank, Standard Chartered and UBS Group. Credit Suisse Group was removed following its acquisition by UBS Group in June 2023 . HSBC Holdings plc Annual Report on Form 20-F 257 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Implementation for 2026 Fixed pay for 2026 There are no changes to the salary with respect to 2026. Taxable benefits for 2026 will be in line with 2025. Pensions will continue to be a cash allowance of 10% of base pay. (£000) Annual base salary at 1 January 2026 Increase Annual base salary at 1 March 2026 Georges Elhedery 1,500 — % 1,500 Pam Kaur 875 — % 875 Annual incentive measures for 2026 The 2026 annual incentive scorecard measures for our executive Directors have been set to support the achievement of our strategic objectives. Financial measures comprise our core metrics of PBT, Group RoTE and costs, alongside a measure on fee income growth. Each will be assessed excluding notable items so that outcomes reflect performance in the control of management. Each measure will be equally weighted at 15% to better incentivise growth while retaining focus on investor commitments. The overall weighting of 60% for financial measures balances alignment with shareholder performance and regulatory expectations. Customer NPS has been retained to reflect our ambition to be the most trusted bank globally, putting customers at the heart of everything we do. We have retained a measure focused on delivery of benefits from the organisational change as we reshape the Group for growth. This will include a measure focusing on synergies following the privatisation of Hang Seng Bank. Our people and culture measures support our strategy to enable a culture of high performance. The Committee intends to assess this by considering our 'How We Lead' index score from our all-employee survey and the retention of high performers. Personal measures have been set to ensure meaningful weighting for the most critical goals for each executive Director. The Committee will continue to retain discretion to adjust the formulaic outcomes of scorecards, taking into account factors such as Group profits, wider business performance and stakeholder experience, to ensure executive reward is aligned with underlying Group performance and the broader stakeholder experience. Performance targets have been set to reflect the Group’s 2026 plan, external commitments, scenario testing of upside and downside risks in the plan while considering macroeconomic uncertainty, including the interest rate environment and analyst consensus where available. The Committee is mindful that targets are suitably stretching in this context. The performance targets are commercially sensitive, and it would be detrimental to the Group’s interests to disclose them at the start of the financial year. Subject to commercial sensitivity, we will disclose the targets in the 2026 Directors’ remuneration report. 2026 annual incentive performance measures 1 Weighting Financial measures (60%) Group RoTE (excluding notable items) 15% Profit before tax (excluding notable items) 15% Fee income growth (excluding notable items) 15% Target basis operating expenses (excluding notable items) 15% Strategic measures (30%) Customer satisfaction: Improvement in NPS scores/rank 15% Deliver benefits of announced organisational changes 10% People and culture: How We Lead index score and retention of high performers 5% Personal measures (10%) – Group CEO: Deliver enterprise-wide foundational priorities including regulatory excellence and the Group’s technology strategy. – Group CFO: Deliver activities relating to regulatory excellence priorities, Group Sustainability priorities, and robust liquidity and capital management. 10% Subject to risk and compliance modifier The Group Remuneration Committee retains the discretion to revise down the formulaic outcome taking into account performance against risk and compliance factors during the performance period. 1 All measures subject to CET1 capital ratio underpin. HSBC Holdings plc Annual Report on Form 20-F 258 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report LTI awards over 2026 to 2028 performance period After taking into account performance for 2025, the Committee decided to grant Georges Elhedery an LTI award of £9,000,000 and Pam Kaur an LTI award of £5,250,000 (both 600% of base salary). The awards will have a three -year performance period starting on 1 January 2026. The Committee has reviewed the performance measures considering feedback from shareholders and the Group's strategic priorities. For the 2026-2028 LTI, we will retain Group RoTE and relative TSR measures but increase their weighting to 42.5% to increase focus on our financial and shareholder return measures . Group RoTE will be assessed excluding notable items on an average basis over the performance period and represents a change from our previous approach of assessing performance only in the final year. Our new approach better reflects consistent, sustainable performance over the measurement period, minimises the impact of short-term fluctuations in the last year of assessment and addresses investor feedback received in prior years. The RoTE measure is subject to a CET1 capital ratio underpin. If the CET1 capital ratio at the end of the performance period is below the CET1 risk tolerance level set in the risk appetite statement, then the assessment for this measure will be reduced to nil. No changes have been made to our relative TSR peer group, which was revised in 2023 to include more Asian peers to better reflect our growth and investment focus. The Committee has also reviewed the environment measures following shareholder feedback and has made the following changes for the 2026-2028 awards: – Removed the measure on carbon reduction in our own emissions to reflect the views of our shareholders that this is now largely considered business as usual. – Introduced a financed emissions measure, weighted at 5%. The performance of this measure will be assessed on the basis of financed emissions for our Oil & Gas and Power & Utilities sectors, remaining within our internally defined risk limits, which have been set to enable the Group to progress towards our 2030 targets. These two sectors cover most of our reported emissions. We will keep the weighting of this measure under review in future years as we bring in other sectors within its scope. – Retained the sustainable finance and investment measure, which is a material metric in support of our ESG ambitions, but have reduced the weighting from 15% to 10%. The overall weighting for the environment measure will be 15% , representing a significant proportion of the overall LTI opportunity. Performance targets have been set to balance stretch and achievability so that awards act as an effective incentive for management, and incentivise outperformance. Target ranges continue to be calibrated to deliver maximum payouts only for outperformance compared to consensus and our plan. For 2026-2028 awards: – RoTE targets have been set taking into account our plan, with the maximum target reflecting a stretch above plan. – The minimum target for relative TSR is set ‘at the median of our peer group’, which ensures no payout for below median performance aligned to investor expectations. The maximum is set ‘at the upper quartile of our peer group’. – For the sustainable finance and investment measure, we have set performance targets to support our ambition announced in 2020 to provide $750b n to $1t n of sustainable financing and investment by 2030. We reflected on sustainable financing forecasts, market demand, and regulation in setting the target range. – The financed emissions measure will track the reduction of on- balance sheet financed emissions and be assessed on the extent that target metrics remain within internally defined risk limits. These limits have been informed by our risk appetite, have been set in line with our Financed Emissions Metric Pathway and converge to our 2030 target. The LTI is subject to a risk and compliance modifier, which gives the Committee the discretion to ensure performance targets are delivered with appropriate risk management. Following changes to the PRA remuneration rules, awards are entitled to dividend equivalents, in line with our shareholder-approved policy. To the extent performance conditions are satisfied at the end of the three -year performance period, the awards will vest in five equal annual instalments commencing from around the third anniversary of the grant date. On vesting, shares equivalent to the net number of shares that have vested (after those sold to cover any income tax and social security payable) will be held for a retention period of one year. Performance conditions for the 2026–2028 LTI awards Measures (weighting) Minimum (25% payout) Target (50% payout) Maximum (100% payout) Average RoTE (excluding notable items) with CET1 capital ratio underpin 1,2 ( 42.5% ) 16.5% 17.5% 18.0% Relative TSR 1,3 ( 42.5% ) At the median of the peer group Straight-line vesting between minimum and maximum At the upper quartile of the peer group Environment ( 15% ) Sustainable finance and investment 1,4 ( 10% ) $733bn $814bn $896bn Financed emissions 5 ( 5% ) On-balance sheet financed emissions within the Oil & Gas and Power & Utilities sectors remain within the established risk tolerance for at least 80% of the performance period On-balance sheet financed emissions within the Oil & Gas and Power & Utilities sectors remain within the established risk tolerance for at least 90% of the performance period On-balance sheet financed emissions within the Oil & Gas and Power & Utilities sectors remain within the established risk tolerance for 100% of the performance period Subject to risk and compliance modifier The Group Remuneration Committee retains the discretion to revise down the formulaic outcome taking into account performance against risk and compliance factors during the performance period. 1 Awards will vest on a straight-line basis for performance between the minimum, target and maximum levels of performance set in this table. 2 To be assessed based on average RoTE excluding notable items over the performance period, subject to the CET1 capital ratio underpin. 3 The peer group for the 2025 award is: Bank of China (Hong Kong), Barclays, BNP Paribas, China Merchants Bank, Citigroup, DBS Group Holdings, J.P. Morgan Chase & Co., Lloyds Banking Group, OCBC Bank, Standard Chartered and UBS Group. 4 The sustainable finance and investment measure will assess the cumulative amount provided and facilitated over the performance period starting from 1 January 2020 and ending 31 December 2028. 5 Performance against risk tolerance will be assessed on a rolling two consecutive calendar quarter basis due to volatility and measurement lags. In addition, given inherent uncertainty with financed emissions measurement, mitigating factors for breaches will be considered by the Committee in assessing performance. HSBC Holdings plc Annual Report on Form 20-F 259 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Our approach to workforce reward Our approach to workforce reward enables a high-performance culture where colleagues are at their best and focused on excellent customer outcomes. Our workforce reward principles and commitments guide our approach, strengthen our ability to attract, retain and motivate the people we need and energise colleagues to perform at their best: – We reward our colleagues responsibly through fixed pay security and protection through core benefits, a competitive total compensation opportunity, pay equity, and a more inclusive and sustainable benefits proposition over time. – We recognise colleagues' success through our performance routines, including feedback and recognition, pay for performance, and all employee share ownership opportunities. – We support our colleagues to grow through our proposition beyond pay, with a focus on future skills and development, support for well- being, and flexibility. In 2024, we made significant changes to our approach to improve colleague experience and unlock our performance edge. We introduced performance routines to support more frequent exchange of feedback and implemented a ’Target Variable Pay’ plan to help improve transparency on how we make pay decisions. The year-end performance assessment was simplified to focus less on ratings and more on dialogue between managers and colleagues. In 2025, we continued to evolve our approach and made enhancements based on the lessons learned from the first year of implementation. We continued to improve our well-being and recognition offering, which help motivate employees to perform at their best. The Committee tracks various metrics to assess how we are doing and prioritise our action plans. Our approach overall is working. Employee engagement measured through our employee Snapshot survey remained high at 78% . While this fell by two percentage points compared with 2024, it was four percentage points above the financial services benchmark. This is a notable achievement in the context of ongoing activities related to our organisational simplification. Further highlights for our areas of focus in 2025 are outlined below. Our approach to workforce reward forms part of our broader employee value proposition and helps us retain and engage the leaders and people we need to execute our strategy. In 2026, a key priority will be to review the pay structure for our senior executives following changes to the PRA remuneration rules announced in October 2025. This review will ensure that our remuneration approach continues to support a high-performance culture, incentivises the achievement of our financial and strategic objectives, and promotes robust risk management and exemplary conduct standards. We will reward you responsibly Living wage Fixed pay Benefits Global living wage employer 3.2% (2025: 3.6% ) 5 percentage points p Since 2024, we have continued to work with the Fair Wage Network which provides an independent source of wage levels and HSBC has maintained its accreditation as a global living wage employer. We continue to review all wages against local living wage benchmarks. increase to fixed pay for 2026, targeted towards lower paid colleagues relative to relevant market benchmarks. increase in the number of colleagues who say their benefits meet their and their family's needs well. We will recognise your success Feedback Recognition 81% (2024: 78% ) 78% (2024: 78% ) 1.4m of colleagues say their manager proactively gave them timely and effective feedback on their performance and behaviours. of colleagues say they are recognised when they do a good job. recognitions of colleagues by their peers through our recognition platform 'At Our Best' for demonstrating role model behaviours that are linked to our values. We will support you to grow Mental health Physical well-being Well-being # 1 (2024: # 1 ) # 1 66% (2024: 65% ) in the Global CCLA Corporate Mental Health Benchmark for the fourth year running. Over 11,400 colleagues participated in the HSBC Global Activity Challenge in September, an increase of 150% in participation from 2024. We set a new Guinness World Record for the most participants in a 10,000 step challenge in 24 hours. Our Well-being Index, which measures satisfaction, purpose, happiness and stress, increased compared with 2024 and is five percentage points higher than the financial services benchmark. HSBC Holdings plc Annual Report on Form 20-F 260 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Remuneration structure for colleagues We set out below the key features of our remuneration framework, which applies on a Group-wide basis (excluding executive Directors), subject to compliance with local laws. Our remuneration framework for the wider workforce is similar to that of the executive Directors given the inclusion of fixed and variable pay elements, and the application of deferral, retention, malus and clawback policies to variable pay. A summary of the remuneration policy for executive Directors is provided on page 251 . Remuneration components and objectives Application for Group employees Fixed pay Salary and allowances – We provide market competitive pay for the role, skills and experience required. – In addition to base salary, fixed pay may also include fixed pay allowances, cash in lieu of pension and other cash allowances in accordance with local market practice. – Fixed pay may change to reflect an individual’s position, role or grade, cost of living in the country, individual skills, capabilities and experience. Benefits and pension – Benefits may include, but are not limited to, the provision of a pension, medical insurance, life insurance and health assessment in accordance with local market practice. Variable pay Annual incentive – All colleagues are eligible to be considered for a discretionary variable pay award. Individual awards are determined against performance goals set at the start of the year. – Variable pay represents a higher proportion of total compensation for more senior colleagues to strengthen alignment between total compensation and business performance. – Variable pay for employees is limited to 10 times fixed pay, except where local regulations require otherwise. – Awards are generally paid in cash and shares. For material risk takers ('MRTs'), at least 50% of the awards are in shares and/or where required by regulations, in units linked to asset management funds. Long-term incentive – Members of the Group Operating Committee and other senior Group employees are also eligible to be considered for a long-term incentive award. This is subject to three-year forward-looking performance measures, similar to the executive Directors. Policies applicable to variable pay Deferral – A Group-wide deferral approach is applicable to all employees. A portion of annual incentive awards above a specified threshold is deferred in shares vesting annually over a three-year period (33% vesting on the first and second anniversaries of grant and 34% on the third). – Awards for MRTs are paid in line with the PRA and FCA remuneration rules, and in compliance with local regulations. Variable pay for MRTs under the PRA remuneration rules ('Group MRTs'), are subject to a four-year deferral period. – For all Group MRTs and the majority of local MRTs, a minimum 50% of the deferred awards is in HSBC shares with the remaining portion in deferred cash. Local regulatory requirements apply where necessary. – For some employees in our asset management business, where required by the relevant regulations, at least 50% of the deferred award is linked to fund units reflective of funds managed by those entities, with the remaining portion in deferred cash awards. – Variable pay awards made in HSBC shares or linked to relevant fund units granted to MRTs that are immediately vested are generally subject to a one-year retention period post-vesting. Anti-hedging – All employees are subject to an anti-hedging policy, which prohibits employees from entering into any personal hedging strategies in respect of HSBC securities. Malus and clawback – All deferred awards are subject to malus provisions, subject to compliance with local laws. – All awards granted are subject to clawback. Recruitment remuneration Buy-out awards – Buy-out awards may be offered if an individual holds any outstanding unvested awards that are forfeited on resignation from the previous employer. – The terms of the buy-out awards will not be more generous than the terms attached to the awards forfeited on cessation of employment with the previous employer. New hire indicative variable pay – New hire indicative variable pay is awarded in exceptional circumstances, typically involving a critical senior new hire, and is limited to an individual’s first year of employment only. The award is subject to a number of factors (such as the respective performance of the Group, business / infrastructure area and individual), and the final value paid remains at the full discretion of HSBC. Policy for loss of office Severance payments – Where an individual’s employment is terminated involuntarily for gross misconduct then, subject to compliance with local laws, the Group’s policy is not to make any severance payment and all outstanding unvested awards are forfeited. – For other cases of involuntary termination of employment, the determination of any severance will take into consideration the contractual notice period, applicable local laws and circumstances of the case. – Severance amounts awarded to MRTs are not considered as variable pay for the purpose of application of the deferral and variable pay cap rules under the PRA and FCA remuneration rules. Unvested awards – Generally, for good leavers, all outstanding unvested awards will normally continue to vest in line with applicable vesting dates. Where relevant, any performance conditions attached to the awards, and malus and clawback provisions, will remain applicable to those awards. HSBC Holdings plc Annual Report on Form 20-F 261 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Payments on loss of office The table below sets out the basis on which payments on loss of office may be made. Other than as set out in the table, there are no further obligations which could give rise to remuneration payments or payments for loss of office. Payments on loss of office Component of remuneration Approach taken Fixed pay and benefits Executive Directors may be entitled to payments in lieu of: – notice, which may consist of base salary, FPA, pension entitlements and other contractual benefits, or an amount in lieu of; and/or – accrued but untaken holiday entitlement. Payments may be made in instalments or a lump sum, and may be subject to mitigation, and subject to applicable tax and social security deductions. Annual incentive and LTI In exceptional circumstances, as determined by the Committee, an executive Director may be eligible for the grant of annual and/or long-term incentives under the HSBC Share Plan based on the time worked in the performance year and on the individual’s contribution. Unvested awards All unvested awards will be forfeited when an executive Director ceases employment voluntarily and is not deemed a good leaver. An executive Director may be considered a good leaver, under the HSBC Share Plan, if their employment ceases in specified circumstances which includes: – ill health, injury or disability, as established to the satisfaction of the Committee; – retirement with the agreement and approval of the Committee; – the employee’s employer ceasing to be a member of the Group; – redundancy with the agreement and approval of the Committee; or – any other reason at the discretion of the Committee. If an executive Director is considered a good leaver, unvested awards will normally continue to vest in line with the applicable vesting dates, subject to performance conditions, the share plan rules, and malus and clawback provisions. In the event of death, unvested awards will vest and will be released to the executive Director’s estate as soon as practicable. In respect of outstanding unvested awards, the Committee may determine that good leaver status is contingent upon the Committee being satisfied that the executive has no current or future intention at the date of leaving HSBC of being employed by any competitor financial services firm. The Committee determines the list of competitor firms from time to time, and the length of time for which this restriction applies. If the Committee becomes aware of any evidence to the contrary before vesting, the award will lapse. Post-departure benefits Executive Directors can be provided certain benefits for up to a maximum of seven years from date of departure for those who depart under good leaver provisions under the HSBC Share Plan, in accordance with the terms of the policy. Benefits may include, but are not limited to, medical coverage, tax return preparation assistance and legal expenses. The Committee also has the discretion to extend the post-departure benefit of medical coverage to former executive Directors, up to a maximum of seven years from their date of departure. Other Where an executive Director has been relocated as part of their employment, the Committee retains the discretion to pay the repatriation costs. This may include, but is not restricted to, airfare, accommodation, shipment, storage, utilities, and any tax and social security that may be due in respect of such benefits. Except in the case of gross misconduct or resignation, an executive Director may also receive retirement gifts. Legal claims The Committee retains the discretion to make payments (including professional and outplacement fees) to mitigate against legal claims, subject to any such payments being made in accordance with the terms of an appropriate settlement agreement waiving all claims against the Group. Change of control In the event of a change of control, outstanding awards will be treated in line with the provisions set out in the respective plan rules. HSBC Holdings plc Annual Report on Form 20-F 262 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Committee governance The Group Chairman, Chair of the Group Risk Committee, Group CEO, Group Chief Risk and Compliance Officer, Group Chief People & Governance Officer, Group Chief Legal Officer, and Group Head of Performance and Reward, routinely and selectively attend Committee meetings. No Director is present at Committee meetings when their own remuneration is discussed. The Chair and members of the Committee hold private meetings with the Committee's independent adviser, following scheduled Committee meetings. Outside of formal meetings, the Chair meets regularly with key stakeholders, including senior management, investors, proxy advisers and regulators to help inform the broader decision making of the Committee. The Chair also meets regularly with the Committee Secretary to ensure the Committee fulfils its governance responsibilities, to consider input from stakeholders when finalising meeting agendas and track progress on actions and priorities. The Chair hosted the biannual Remuneration Committee Chairs Forum in October and November 2025, bringing together Committee members and Chairs of the principal subsidiary remuneration committees. The forum provided the opportunity for members to discuss key priorities and challenges in relation to people, performance and pay matters across the Group. The Committee received certifications from the principal subsidiary remuneration committees, confirming that the relevant committee had discharged its obligations overseeing the implementation and operation of HSBC’s Group Remuneration Framework and escalated all relevant concerns to the Committee. A regular report is presented to the Committee highlighting significant remuneration matters from the Group’s subsidiaries. A copy of the Committee’s terms of reference can be found on our website at www.hsbc.com/who-we-are/our-people/board-of-directors/ board-committees Advisers The Committee received input and advice from different advisers on specific topics during 2025. Deloitte was retained as independent adviser to the Committee in 2025 having been reappointed in 2022 following a formal tender process. Deloitte also provided tax compliance and other advisory services to the Group in 2025. Deloitte is a founding member of the Remuneration Consultants Group and voluntarily operates under the code of conduct in relation to executive remuneration consulting in the UK. The Committee also received advice from Willis Towers Watson and AON on market data and remuneration trends. Willis Towers Watson also provides actuarial support to Global Finance, benchmarking data for the wider workforce and services related to benefits administration for our Group employees. The Committee was satisfied the advice provided by Deloitte, Willis Towers Watson and AON was objective and independent in 2025. For 2025, total fees of £161,500 , £36,437 and £17,080 were incurred in relation to remuneration advice provided by Deloitte, Willis Towers Watson and AON, respectively. This was based on pre-agreed fees and a time-and-materials basis. Following a full tender process in 2025, Willis Towers Watson will become the Committee's lead independent adviser from March 2026. Committee performance review In 2025, the annual review of the performance of the Committee concluded that the Committee continued to operate effectively. The outcomes of the performance review have been reported to the Board, and the Committee will progress and track those areas identified for enhancement through 2026. Ñ Further details of the annual review of the Board and committee performance can be found on page 231 . Share plan matters considered by the Committee The Committee and its delegates considered various matters relating to the HSBC share plans during the financial year. The HSBC International Employee Share Purchase Plan (‘ShareMatch’) and The HSBC Holdings Savings-Related Share Option Plan (UK) (‘Sharesave’) were offered in 2025. The HSBC variable pay deferral approach for the 2025 performance year was approved, for which certain updates were made following changes to legal and regulatory requirements. Other awards with performance conditions were approved for certain strategically important projects during 2025. Immediate share awards were granted to executive Directors and senior managers in compliance with our regulatory requirements to deliver a portion of non-deferred variable pay in instruments. These awards vest immediately, and are subject to a retention period and clawback provisions. HSBC Holdings plc Annual Report on Form 20-F 263 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Additional remuneration disclosures This section provides further information in relation to executive Director and wider workforce remuneration as required by the UK, Hong Kong, and Pillar 3 remuneration disclosure requirements. For the purpose of the Pillar 3 remuneration disclosures, executive Directors and non-executive Directors are considered to be members of the management body. Members of the Group Operating Committee other than the executive Directors are considered as senior management. Link between risk, performance and reward Our remuneration practices promote sound and effective risk management to support our business objectives and the delivery of our strategy. We set out below the key features of our framework, which enable us to align between risk, performance and reward, subject to compliance with local laws and regulations: Framework elements Application Variable pay – Group variable pay is expected to reflect Group performance, based on a range of financial and non-financial factors. We use a countercyclical funding methodology with a structured payout range for different levels of profitability and guided by a floor and a ceiling. The payout ratio generally reduces as performance increases to avoid pro-cyclicality. The floor recognises that even in challenging times, remaining competitive is important. The ceiling recognises that at higher levels of performance it is not always necessary to continue to increase variable pay, thereby limiting the risk of inappropriate behaviour to drive financial performance. – The main quantitative and qualitative performance and risk metrics used for assessment of performance include: – Group and business unit financial performance, considering contextual factors driving performance, and capital requirements; – current and future risks, taking into consideration performance against the risk appetite, financial resourcing plan and global conduct outcomes; and – fines, penalties and provisions for customer redress, which are automatically included in the Committee’s definition of profit for determining the pool. – In the event that the Group was unable to distribute dividends to shareholders for reasons such as capital adequacy, then the Group may determine that as a year of weak performance. In such a year, the Group may withhold some, or all, variable pay for employees including unvested share awards, using the metrics outlined above as a basis for that determination. – The Committee also applies its discretion to adjust the pool either upwards or downwards based on a recommendation by the GRC which takes into account a full assessment of risk performance. Individual performance – Assessment of individual performance is made with reference to clear and relevant financial and non-financial goals. Group Operating Committee members have a goal on effective management of enterprise risk, regulatory compliance and financial crime risk responsibilities as well as financial risks. The goal is independently assessed by Risk and Compliance and a risk and compliance rating and assessment is shared with the individual and the Group CEO to consider as part of the year-end review. Direct reports of Group Operating Committee members and other senior executives are assessed on risk, regulatory and financial crime goals identified for their roles. All other employees have a mandatory risk and compliance goal. – Performance assessment for all employees includes a behaviour gateway (if permissible under local laws), and a full assessment of achievement against goals and demonstration of HSBC values aligned behaviours. This ensures that performance is assessed not only on what is achieved but also on how it is achieved. Control function staff – Group policy is for control staff to report into their respective infrastructure area. Remuneration decisions for senior infrastructure roles are made by the global infrastructure head. – The performance and reward of individuals in control functions, including risk and compliance colleagues, are assessed according to a balanced scorecard of goals specific to the functional role they undertake. – Their remuneration is determined independent of the performance of the business areas they support. – Remuneration is carefully benchmarked with the market and internally to ensure it is set at an appropriate level. – The Committee is responsible for approving remuneration for the Group Chief Risk and Compliance Officer and Group Head of Internal Audit. Variable pay adjustments and conduct recognition – Variable pay awards may be adjusted upwards or downwards to reflect positive or negative conduct in adherence with the Code of Conduct. Downward adjustments can be made in circumstances including: – detrimental conduct, including conduct that brings HSBC into disrepute; – involvement in events resulting in significant operational losses, or events that have caused or have the potential to cause significant harm to HSBC; and – non-compliance with the values-aligned behaviours and other mandatory requirements or policies. – Rewarding positive conduct can be through use of our global recognition platform, At Our Best, or positive adjustments to variable pay awards. Malus – Malus can be applied to unvested deferred awards (up to 100% of awards) granted in prior years in circumstances including: – detrimental conduct, including conduct that brings the business into disrepute; – past performance being materially worse than originally reported; – restatement, correction or amendment of any financial statements; and – improper or inadequate risk management. Clawback – Clawback can be applied to vested or paid awards granted to MRTs for a period of seven years, extended to 10 years for employees in PRA and FCA designated senior management functions in the event of ongoing internal/regulatory investigation at the end of the seven-year period. Clawback can also be applied to non-MRTs. Clawback may be applied in circumstances including: – participation in, or responsibility for, conduct that results in significant losses; – failing to meet appropriate standards and propriety; – reasonable evidence of misconduct or material error that would justify, or would have justified, summary termination of a contract of employment; and – a material failure of risk management suffered by HSBC or a business unit in the context of Group risk-management standards, policies and procedures. – Clawback can also be applied to vested or paid awards granted to designated Executive Officers as defined by the US Securities and Exchange Commission (’SEC’) for a period of three years in the event of an accounting restatement due to material non-compliance with any financial reporting requirement under the US securities laws. Sales incentives – We generally do not operate commission-based sales plans, unless aligned with local market practice and with appropriate safeguards to avoid incentivising inappropriate sales behaviours. Identification of MRTs – We identify individuals as MRTs based on qualitative and quantitative criteria set out in the PRA’s and FCA’s remuneration rules. Our identification process is underpinned by the following key principles: – MRTs are identified at Group, HSBC Bank plc (consolidated) and HSBC UK level. – MRTs are also identified at other solo regulated entity level as required by the regulations. – When identifying an MRT, HSBC considers a colleague’s role within its matrix management structure. The business and infrastructure area that an individual works within takes precedence, followed by the geographical location in which they work. – We also identify additional MRTs based on our own internal criteria, which include individuals in certain roles and grades who otherwise would not be identified as MRTs under the remuneration rules. HSBC Holdings plc Annual Report on Form 20-F 264 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Summary of shareholder return and Group CEO remuneration The graph shows HSBC TSR performance (based on the daily spot Return Index in sterling) against the FTSE 100 Total Return Index for the 10-year period ended 31 December 2025. The FTSE 100 Total Return Index has been chosen as a recognised broad equity market index of which HSBC Holdings is a member. The single total figure of remuneration for the Group CEO over the past 10 years, together with the outcomes of the respective annual incentive and LTI awards, are presented in the following table. HSBC TSR and FTSE 100 Total Return Index 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Group CEO Stuart Gulliver Stuart Gulliver Stuart Gulliver John Flint John Flint Sir Noel Quinn Sir Noel Quinn Sir Noel Quinn Sir Noel Quinn Sir Noel Quinn Sir Noel Quinn 1,2 Georges Elhedery 2,3 Georges Elhedery Single total figure £000 5,675 6,086 2,387 4,582 2,922 1,977 4,154 4,895 5,562 10,396 10,091 1,867 6,623 Annual incentive (% of maximum) 64% 80% 76% 76% 61% 66% 32% 57% 75% 70% 78% 78% 80% Long-term incentive (% of maximum) —% —% 100% —% —% —% —% —% —% 75% 75% —% 45.19% 1 Sir Noel Quinn’s 2024 single total figure reflects his total fixed pay, benefits and annual incentive up to and including 1 September 2024 when he stepped down as Group CEO, plus his vesting 2022-2024 LTI. This single total figure has been restated to reflect the value of the 2022-2024 LTI on 11 March 2025, when the first tranche of the award vested. 2 The 2024 annual incentive figures for Sir Noel Quinn and Georges Elhedery reflect their assessment against the Group CEO scorecard for their periods as Group CEO. 3 Georges Elhedery’s 2024 single total figure reflects his total fixed pay, benefits and annual incentive in respect of his period as Group CEO (for the period 2 September 2024 to 31 December 2024). Georges Elhedery’s vesting 2022-2024 LTI was granted before his appointment as Group CEO and has been excluded. Voting results from Annual General Meeting 2025 Annual General Meeting voting results For Against Withheld Directors' Remuneration Report (votes cast) 98.34% 1.66% –– 8,807,418,532 148,870,299 11,202,665 Directors' Remuneration Policy (votes cast) 96.10% 3.90% –– 8,609,641,462 349,032,069 8,780,440 Amend rules of the HSBC Share Plan 2011 (votes cast) 97.33% 2.67% –– 8,716,852,849 239,261,675 10,286,595 HSBC Holdings plc Annual Report on Form 20-F 265 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Pay ratio The following table shows the ratio between the total pay of the Group CEO and the lower quartile, median and upper quartile pay of our UK employees. The median ratio is lower year on year, reflecting the lower value of the 2023-25 LTI for Georges Elhedery, which was granted for his prior role as Co-CEO, GBM, compared with the value of the 2022-24 LTI for Sir Noel Quinn, which was received in his capacity as Group CEO. Total pay ratio Method Lower quartile Median Upper quartile 2025 A 167:1 96:1 51:1 2024 1 A 307:1 179:1 94:1 2023 A 285:1 165:1 86:1 2022 A 167:1 95:1 49:1 2021 A 154:1 90:1 46:1 2020 A 139:1 85:1 43:1 2019 A 169:1 105:1 52:1 Total pay and benefits amounts used to calculate the ratio (£) Method Lower quartile Median Upper quartile Total pay and benefits Total salary Total pay and benefits Total salary Total pay and benefits Total salary 2025 A 39,601 30,750 69,207 57,500 130,262 95,078 2024 A 38,995 31,962 66,672 53,945 127,050 91,664 2023 A 36,528 27,680 63,000 45,536 121,223 89,506 2022 A 33,284 24,615 58,257 41,000 113,778 95,000 2021 A 31,727 27,666 54,678 41,500 106,951 84,000 2020 A 29,833 23,264 48,703 36,972 96,386 75,000 2019 A 28,920 24,235 46,593 41,905 93,365 72,840 1 The 2024 pay ratios have been restated to reflect the revised 2024 LTI value for Sir Noel Quinn. The total pay and benefits for the median employee for 2025 was 69,207 , a 3.8% increase compared with 2024. Our UK workforce comprises a diverse mix of colleagues across different businesses and levels of seniority, from junior cashiers in our retail branches to senior executives managing our global business units. We aim to deliver market-competitive pay for each role, taking into consideration the skills and experience required for the business. Pay structure varies across roles in order to deliver an appropriate mix of fixed and variable pay. Junior colleagues have a greater portion of their pay delivered in a fixed component, which does not vary with performance and allows them to predictably meet their day-to-day needs. Our senior management, including executive Directors, generally have a higher portion of their total remuneration opportunity structured as variable pay and linked to the performance of the Group, given their role and ability to influence the strategy and performance of the Group. Executive Directors also have a higher proportion of their variable pay delivered in shares, which vest over a period of seven years with a post-vesting retention period of one year. During this deferral and retention period, the awards are linked to the share price so the value of award realised by them after the vesting and retention period will be aligned to the performance of the Group. We are satisfied that the median pay ratio is consistent with the pay and progression policies for our UK workforce, taking into account the diverse mix of our UK employees, the pay mix applicable to each role and our objective of delivering market competitive pay for each role subject to Group, business and individual performance. Our ratios have been calculated using the option ‘A’ methodology prescribed under the UK Companies (Miscellaneous Reporting) Regulations 2018. Under this option, the ratios are calculated using full- time equivalent pay and benefits of all employees providing services in the UK at 31 December 2025. We believe this approach provides accurate information and representation of the ratios. The ratio has been computed taking into account the pay and benefits of over 33,000 UK employees, other than the Group CEOs. We calculated our pay quartiles and benefits information for our UK employees using: – full-time equivalent annualised fixed pay, which includes base salary and allowances, at 31 December 2025; – variable pay awards for 2025; – return on deferred cash awards granted in prior years. The deferred cash portion of the annual incentive granted in prior years includes a right to receive notional returns for the period between the grant date and vesting date, which is determined by reference to a rate of return specified at the time of grant. A payment of notional return is made annually and the amount is disclosed on a paid basis in the year in which the payment is made; – gains realised from exercising awards from taxable employee share plans; and – full-time equivalent value of taxable benefits and pension contributions. Full-time equivalent fixed pay and benefits for each employee have been calculated by using each employee’s data as at 31 December 2025. Where an employee works part-time, fixed pay and benefits are grossed up, where appropriate, to full-time equivalent. One-off benefits have not been included in calculating the ratios as these are not permanent in nature and in some cases, depending on individual circumstances, may not truly reflect a benefit to the employee. The reported ratios may not be comparable to our international and listed peers on the FTSE 100, given differences in business mix and size, employment and compensation practices, methodologies for computing pay ratios and assumptions used by companies. Relative importance of spend on pay The following chart shows the change in: – total employee pay between 2024 and 2025; and – dividends and share buy-backs in respect of 2024 and 2025. In 2025, total spend on pay was up 6% compared with 2024. The return to shareholders by way of dividends and share buy-backs fell by 22% compared with 2024. In 2024, dividends included the special dividend of $0.21 per share that was paid following the completion of the sale of our banking business in Canada. In 2025, we provided $8bn of capital return to shareholders through share buy-backs, which included the up to $2bn buy-back announced at our 2024 annual results in February 2025. Following our announcement to privatise Hang Seng Bank in October 2025, we announced our intention not to initiate share buy-backs temporarily. A decision to recommence buy-backs will be subject to our normal buy-back considerations and process on a quarterly basis. Dividends include an approximation of the amount payable in April 2026 in relation to the fourth interim dividend of $ 0.45 per ordinary share. Relative importance of spend on pay $12.9bn $8.0bn Distributions to ordinary shareholders 2025 q 22% 2024 Employee pay 2025 ▲ 6% 2024 $11.0bn $15.9bn HSBC Holdings plc Annual Report on Form 20-F 266 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Comparison of Directors’ and employees’ pay The following table compares the changes in each Director’s base salary, taxable benefits and annual incentive between 2021 and 2025 with those for UK-based employees of HSBC Group Management Services Limited, the employing entity of the executive Directors. The underlying single figures of remuneration used to calculate these figures are on page 253 for executive Directors, and page 270 for non-executive Directors. Annual percentage change in remuneration Base salary/fees Benefits Annual incentive Director/employees 2025 2024 2023 2022 2021 2025 2024 2023 2022 2021 2025 2024 2023 2022 2021 Executive Directors Georges Elhedery 49.5 26.7 — — — 56.4 866.0 — — — 115.0 30.3 — — — Pam Kaur — — — — — — — — — — — — — — — Non-executive Directors Geraldine Buckingham 4.8 10.7 57.4 — — 366.7 (40.0) — — — — — — — — Rachel Duan 5.1 4.5 8.4 235.8 — 333.3 — (100.0) — — — — — — — Dame Carolyn Fairbairn 15.4 4.7 5.3 231.1 — 200.0 — (100.0) — — — — — — — James Forese 2.0 5.5 10.2 20.5 257.5 750.0 300.0 — — — — — — — — Ann Godbehere 89.5 472.1 — — — — — — — — — — — — — Steven Guggenheimer 3.5 (1.9) 0.8 4.8 86.6 450.0 300.0 (90.0) — — — — — — — José Antonio Meade Kuribreña 5.9 3.7 0.8 8.5 10.4 628.6 75.0 (71.4) — (100.0) — — — — — Kalpana Morparia 8.1 45.9 — — — 2,000.0 — — — — — — — — — Eileen Murray 16.6 14.1 10.7 (1.5) 121.7 — (100.0) — — — — — — — — Brendan Nelson 138.0 306.2 — — — 110.5 216.7 — — — — — — — — Swee Lian Teo 16.4 402.0 — — — — — — — — — — — — — Sir Mark Tucker (25.0) — — — — (57.2) 184.3 (54.9) 242.4 (36.5) — — — — — Employee group 1 3.2 3.3 5.0 3.1 1.0 5.0 4.1 5.7 7.0 1.3 7.2 2.4 11.7 3.7 25.2 1 Employee group consists of individuals employed by HSBC Group Management Services Ltd, the employing entity of the executive Directors. No individuals are employed directly by HSBC Holdings. Scheme interests awarded during 2025 (Audited) The table below sets out scheme interests granted to executive Directors during 2025 in respect of the 2024 performance year, as disclosed in the 2024 Directors’ remuneration report. No non-executive Directors received scheme interests during the financial year. Details of immediate shares are disclosed in compliance with Chapter 17 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Scheme awards in 2025 (Audited) Type of interest awarded Basis on which award made Date of award Face value awarded £000 Percentage receivable for minimum performance Number of shares awarded End of performance period Georges Elhedery LTI deferred shares 1 % of base salary 7 May 2025 12,407 25 1,367,880 31 December 2027 Immediate shares 2 % of base salary 4 March 2025 838 N/A 92,447 31 December 2024 Pam Kaur LTI deferred shares 1 % of base salary 7 May 2025 7,237 25 797,930 31 December 2027 Immediate shares 2 % of base salary 4 March 2025 1,687 N/A 186,052 31 December 2024 1 In accordance with the remuneration policy approved at the 2025 AGM, the LTI award was determined at 600 % of base salary for Pam Kaur and 600 % of base salary for Georges Elhedery. The number of shares was determined by taking the average closing price of the week commencing 24 February 2025 ( £ 9.070 ), being the same price used for other awards granted in respect of the 2024 performance year, and discounting based on HSBC’s expected dividend yield of 6.5 % per annum for the vesting period ( £ 6.580 ). The fair value of the awards was £ 3.185 based on IFRS 2 accounting standards. LTI awards are conditional share awards subject to a three -year forward-looking performance period and vest in five equal annual instalments, between the third and seventh anniversary of the award date, subject to performance achieved. Awards are subject to clawback for up to 10 years from award date and are not eligible for dividend equivalents. 2 Immediate share awards are granted based on previous years’ performance as part of the annual incentive and are not subject to forward-looking performance conditions. On vesting, a one -year retention period applies. The face values of the awards was computed using the average closing price of the week commencing 24 February 2025, £ 9.070 . The fair value of the awards was £ 9.163 based on IFRS 2 accounting standards . Awards are subject to clawback for up to 10 years from the award. HSBC Holdings plc Annual Report on Form 20-F 267 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Performance conditions for the 2025–2027 LTI awards (Audited) Measures (weighting) 1 Minimum (25% payout) Target (50% payout) Maximum (100% payout) RoTE (excluding notable items) with CET1 capital ratio underpin 2 ( 40 % ) 14.0 % 16.0 % 18.0 % Environment and sustainability 3 ( 20 % ) Carbon reduction (own emissions) ( 5 % ) 71.0 % 73.0 % 78.0 % Sustainable finance and investment ( 15 % ) $ 648.0 bn $ 720.0 bn $ 792.0 bn Relative TSR 4 ( 40 % ) At median of the peer group Straight-line vesting between minimum and maximum At upper quartile of peer group Subject to risk and compliance modifier The Group Remuneration Committee retains the discretion to revise down the formulaic outcome taking into account performance against risk and compliance factors during the performance period. 1 Awards will vest on a straight-line basis for performance between the minimum, target and maximum levels of performance set in this table. 2 To be assessed based on RoTE at the end of the performance period, subject to the CET1 capital ratio underpin. 3 Carbon reduction will be measured based on percentage reduction in total energy and travel emissions achieved by 31 December 2027 using 2019 as the baseline. The sustainable finance and investment measure will assess the cumulative amount provided and facilitated over the period ending 31 December 2027. 4 The peer group for the 2025–2027 award is: Bank of China (Hong Kong), Barclays, BNP Paribas, China Merchants Bank, Citigroup, DBS Group Holdings, J.P. Morgan Chase & Co., Lloyds Banking Group, OCBC Bank, Standard Chartered and UBS Group. Other scheme interests held during 2025 The table below details scheme interests held by executive Directors du ring 2025, in respect of prior performance years. Vesting of deferred share awards is normally subject to the Director remaining an employee on the vesting date. The awards may vest at an earlier date in some circumstances. Under the Securities and Futures Ordinance of Hong Kong, interests in conditional share awards are categorised as the interests of the beneficial owner. Other scheme interests in 2025 (Audited) HSBC Holdings ordinary shares Type of interest held Dates of award Award price (£) 1 Usually vesting Vested Tranche Tranche vested on Market price at vest (£) Closing price before vest date (£) At 1 Jan 25 Vested in period Lapsed in period Cancelled in period At 31 Dec 25 from to Georges Elhedery LTI Deferred shares 28 Feb 22 5.380 1 Mar 25 31 Mar 29 1 11 Mar 25 2 8.4415 8.5480 223,989 33,597 55,998 — 134,394 27 Feb 23 6.357 1 Mar 26 31 Mar 30 — — — — 251,474 — — — 251,474 26 Feb 24 5.972 1 Mar 27 31 Mar 31 — — — — 569,177 — — — 569,177 Deferred shares 3 24 Feb 20 5.622 1 Mar 23 31 Mar 27 3 10 Mar 25 8.6138 8.7640 88,597 29,532 — — 59,065 1 Mar 21 4.262 1 Mar 24 31 Mar 28 2 10 Mar 25 8.6138 8.7640 244,419 61,104 — — 183,315 28 Feb 22 5.380 1 Mar 25 31 Mar 29 1 11 Mar 25 8.4415 8.5480 273,163 54,632 — — 218,531 Pam Kaur LTI Deferred shares 28 Feb 22 5.380 1 Mar 25 31 Mar 29 1 11 Mar 25 2 8.4415 8.5480 168,077 25,211 42,020 — 100,846 27 Feb 23 6.357 1 Mar 26 31 Mar 30 — — — — 146,393 — — — 146,393 26 Feb 24 5.972 1 Mar 27 31 Mar 31 — — — — 185,889 — — — 185,889 Deferred shares 3 26 Feb 18 7.234 1 Mar 21 31 Mar 25 5 10 Mar 25 8.6138 8.7640 15,633 15,633 — — — 25 Feb 19 6.235 1 Mar 22 31 Mar 26 4 10 Mar 25 8.6138 8.7640 37,310 18,655 — — 18,655 24 Feb 20 5.622 1 Mar 23 31 Mar 27 3 10 Mar 25 8.6138 8.7640 58,909 19,635 — — 39,274 1 Mar 21 4.262 1 Mar 24 31 Mar 28 2 10 Mar 25 8.6138 8.7640 169,555 42,388 — — 127,167 28 Feb 22 5.380 1 Mar 25 31 Mar 29 1 11 Mar 25 8.4415 8.5480 210,542 42,108 — — 168,434 27 Feb 23 6.357 1 Mar 26 31 Mar 30 — — — — 65,843 — — — 65,843 26 Feb 24 5.972 1 Mar 27 31 Mar 31 — — — — 100,798 — — — 100,798 1 The award price is the closing price on the day before the grant date for awards made in 2024 and prior years. In all cases the purchase price is nil . 2 The performance conditions were assessed and confirmed at 75 % . The remaining 25 % of the award was forfeited. S hares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award vests in five equal tranches. 3 Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from vesting. The awards vest in five equal tranches. No Directors held any short position (as defined in the Securities and Futures Ordinance of Hong Kong) in the shares or debentures of HSBC Holdings and its associated corporations. Save as stated in the tables above, none of the Directors had an interest in any shares or debentures of HSBC Holdings or any associates at the beginning or at the end of the period, and none of the Directors or members of their immediate families were awarded or exercised any right to subscribe for any shares or debentures in any HSBC corporation during the period. There have been no changes in the shares or debentures of the Directors from 31 December 2025 to the date of this report. HSBC Holdings plc Annual Report on Form 20-F 268 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Executive Directors’ interests in shares (Audited) The shareholdings of executive Directors in 2025, including the shareholdings of their connected persons, are shown in the table below at 31 December 2025, alongside their shareholding requirement . There have been no changes in the shareholdings of the executive Directors from 31 December 2025 to the date of this report. Executive Directors have five years from their appointment to build up the required level of shareholding. In line with investor guidance, unvested shares that are not subject to forward-looking performance conditions (on a net of tax basis) can count towards their shareholding requirement. The Committee reviews compliance with the shareholding requirement, taking into account shareholder expectations and guidelines. The Committee also has full discretion in determining any penalties for non-compliance. The weighted average holding period of an LTI award within HSBC is six years, in excess of the five-year holding period typically implemented by FTSE-listed companies. HSBC operates a policy under which individuals are not permitted to enter into any personal hedging strategies in relation to shares subject to a vesting and/or retention period. Shares (Audited) Shareholding guidelines (% of salary) Shareholding at 31 Dec 2025 2 (% of salary) At 31 Dec 2025 Scheme interests Share interests (number of shares) Share options 3 Shares awarded subject to deferral 1 without performance conditions with performance conditions 4 Executive Directors Georges Elhedery 5 600 % 792 % 1,109,810 — 595,305 2,188,531 Pam Kaur 5 600 % 1,207 % 986,625 — 621,017 1,130,212 1 The gross number of shares is disclosed. A portion will be sold at vesting to cover any income tax and social security that falls due at the time of vesting. 2 The value of the shareholding is calculated using an average of the daily closing share prices in the three months to 31 December 2025, £ 10.708 , and does not include any unvested interests . 3 At 31 December 2025, Georges Elhedery and Pam Kaur did not hold any options under the HSBC Holdings Savings-Related Share Option Plan (UK). 4 L TI awards are subject to performance measures as set out in the relevant Annual Report and Accounts. 5 E xecutive Directors are expected to meet their shareholding guidelines within five years of the date of their appointment. Service contracts The service contracts of executive Directors do not have a fixed term. The notice periods of executive Directors are set at the discretion of the Committee, taking into account market practice, governance considerations, and the skills and experience of the particular candidate at that time. Service agreements for each executive Director are available for inspection at HSBC Holdings’ registered office. Consistent with the best interests of the Group, the Committee will seek to minimise termination payments. Directors may be eligible for a payment in relation to statutory rights. Contract date (rolling) Notice period (Director and HSBC) Georges Elhedery 2 September 2024 12 months Pam Kaur 1 January 2025 12 months External appointments During 2025, Georges Elhedery did not receive any fees from external appointments. Pam Kaur received £38,633 as an independent non- executive Director for Aberdeen Group plc for the period 1 January 2025 to 8 May 2025. Total pension entitlements (Audited) No employees who served as executive Directors during the year have a right to amounts under any HSBC final salary pension scheme for their services as executive Directors or are entitled to additional benefits in the event of early retirement. There is no retirement age set for Directors, but the normal retirement age for colleagues is 65 . Payments to past Directors (Audited) In line with the terms of his departure disclosed in our Annual Report and Accounts 2024, Sir Noel Quinn was granted good leaver status. Sir Noel Quinn is eligible to receive vesting of the 2023–2025 LTI award, pro-rated for time in employment subject to satisfaction of non- compete provisions under which he cannot undertake a role with a defined list of competitor financial services firms for 12 months after his employment ceases with HSBC. Details of the 2023–2025 LTI outcome are outlined on page 256 . No other payments in scope of the remuneration disclosure requirements were made to, or in respect of, former Directors in the year in excess of the minimum threshold of £50,000 set for this purpose. Payments for loss of office (Audited) Sir Noel Quinn left the Group on 30 April 2025. In accordance with the approved Directors' remuneration policy and contractual terms agreed for the period between 1 January 2025 and 30 April 2025, Noel received payments totalling £ 1,232,072 . This included a salary of £ 458,667 , a pension allowance of £ 45,867 and a fixed pay allowance of £ 566,658 . The fixed pay allowance was awarded in immediately vested shares, which are subject to a retention period and released on a pro-rata basis over five years . In accordance with the approved Directors' remuneration policy, Noel also received cash in lieu of unused holiday totalling £ 123,600 on expiry of his notice period, and taxable and non-taxable benefits with an aggregate value of £ 37,280 . Noel's full departure terms were disclosed in the Annual Report and Accounts 2024. No other payments for loss of office were made to former or current Directors in the year. HSBC Holdings plc Annual Report on Form 20-F 269 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Directors’ emoluments The details of compensation paid to executive and non-executive Directors for the year ended 31 December 2025 are set out below: Emoluments Georges Elhedery Pam Kaur 1 Non-executive Directors 2 2025 2024 2025 2024 2025 2024 £000 £000 £000 £000 £000 £000 Directors' base salary, allowances and benefits in kind 1,796 2,473 1,086 — Non-executive Directors' fees and benefits in kind 6,252 5,393 Pension contributions — — — — — — Performance-related pay paid or receivable 3 12,605 10,677 7,350 — — — Inducements to join paid or receivable — — — — — — Compensation for loss of office — — — — — — Notional return on deferred cash 5 8 11 — — — Total 14,406 13,158 8,447 — 6,252 5,393 Total ($000) 18,977 17,333 11,127 — 8,236 7,104 1 Pam Kaur was appointed executive Director and Group CFO effective 1 January 2025. 2 Fees and benefits in kind for 2025 reflects the population as per the single total figure table for non-executive Directors. 3 Includes the value of the deferred and LTI awards at grant. The aggregate amount of Directors’ emoluments (including both executive Directors and non-executive Directors) for the year ended 31 December 2025 was $ 38,340,912 . The aggregate value of Director retirement benefits for current Directors is nil. As per our policy, benefits in kind may include, but are not limited to, the provision of medical insurance, income protection insurance, health assessment, life assurance, club membership, tax assistance, car benefit, travel assistance, provision of company owned-accommodation and relocation costs (including any tax due, where applicable). The details of compensation paid to former executive Directors for the year ended 31 December 2025 are set out below: Emoluments to former executive Directors Stuart Gulliver John Flint Marc Moses Sir Noel Quinn £ $ £ $ £ $ £ $ Post-employment medical insurance benefits 1 7,823 10,305 12,338 16,253 24,262 31,961 7,287 9,599 Tax return support 1 — — — — — — 1,750 2,305 1 Amounts are converted into US dollars based on the average exchange rates for the year. The total aggregate value of benefits provided to former executive Directors in 2025 was £53,460 ( $70,423 ). There were payments under retirement benefit arrangements to four former Directors of £2,484,882 . The provision at 31 December 2025 in respect of unfunded pension obligations to two former Directors amounted to £345,538 . This relates to unfunded unapproved retirement benefits schemes. Emoluments of senior management and five highest paid employees The following tables set out the emoluments paid to senior management, comprising executive Directors and members of the Group Operating Committee, for the year ended 31 December 2025, or for the period of appointment in 2025 as a Director or member of the Group Operating Committee. The tables also detail the remuneration paid and share awards granted to the five highest paid employees, comprising Georges Elhedery, Pam Kaur and three other members of the Group Operating Committee for the year ended 31 December 2025. Five highest paid employees – share awards (HSBC Share Plan 2011) Dates of award Award price (£) 1 HSBC Holdings ordinary share awards Usually vesting At 1 Jan 2025 Granted in period Vested in period 2 Fair value(s) (£) Lapsed in period Cancelled in period At 31 Dec 2025 from to 2015 to 2024 — 1 Mar 25 30 Mar 31 5,569,957 — 960,545 — 176,633 — 4,432,779 4 Mar 25 3 9.070 4 Mar 25 30 Mar 32 — 1,262,453 603,212 3.461 and 9.163 — — 659,241 7 May 25 3 9.070 1 Mar 28 30 Mar 32 — 2,165,810 — 3.185 — — 2,165,810 5,569,957 3,428,263 1,563,757 — 176,633 — 7,257,830 1 The price for awards made in 2025 is the average closing price of the week commencing 24 February 2025. In all cases the purchase price is nil. 2 The weighted average closing price of the shares immediately before the dates on which the awards were vested was £8.965. 3 The fair values of the awards were calculated according to the IFRS 2 accounting standard. The fair values vary based on the length of the vesting period. These awards include LTI awards which are subject to satisfaction of performance conditions. LTI awards are subject to a combination of financial and non-financial metrics that are in this report. HSBC Holdings plc Annual Report on Form 20-F 270 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Emoluments £000s Five highest paid employees Senior management Basic salaries, allowances and benefits in kind 11,005 25,839 Pension contributions 124 492 Performance-related pay paid or receivable 1 36,685 59,240 Inducements to join paid or receivable — — Compensation for loss of office 2 — 348 Total 47,814 85,919 Total ($000) 62,987 113,184 1 Includes the value of deferred share awards at grant. 2 Excludes expected payments in 2026 in connection with loss of office for senior management in 2025. Emoluments by bands Hong Kong dollars US dollars Number of highest paid employees Number of senior management $1,000,001 – $1,500,000 $128,267 – $192,400 — 1 $10,000,001 – $10,500,000 $1,282,664 – $1,346,797 — 1 $13,500,001 – $14,000,000 $1,731,597 – $1,795,730 — 1 $41,000,001 – $41,500,000 $5,258,923 – $5,323,056 — 1 $42,000,001 – $42,500,000 $5,387,190 – $5,451,323 — 1 $45,500,001 – $46,000,000 $5,836,122 – $5,900,255 — 1 $57,000,001 – $57,500,000 $7,311,186 – $7,375,319 — 1 $57,500,001 – $58,000,000 $7,375,319 – $7,439,452 — 1 $60,500,001 – $61,000,000 $7,760,118 – $7,824,251 — 1 $61,000,001 – $61,500,000 $7,824,251 – $7,888,384 — 1 $66,500,001 – $67,000,000 $8,529,717 – $8,593,850 1 1 $86,500,001 – $87,000,000 $11,095,045 – $11,159,178 1 1 $91,500,001 – $92,000,000 $11,736,377 – $11,800,510 1 1 $97,500,001 – $98,000,000 $12,505,976 – $12,570,109 1 1 $147,500,001 – $148,000,000 $18,919,296 – $18,983,429 1 1 Non-executive Directors (Audited) The following table shows the total fees and benefits of non-executive Directors for 2025, together with comparative figures for 2024. Fees and benefits (Audited) Fees 1 Benefits 2 Total (£000) 2025 2024 2025 2024 2025 2024 Geraldine Buckingham 3 283 270 14 3 297 273 Rachel Duan 268 255 13 3 281 258 Dame Carolyn Fairbairn 337 292 15 5 352 297 James Forese 4 817 801 34 4 851 805 Ann Godbehere 5 737 389 44 — 781 389 Steven Guggenheimer 268 259 22 4 290 263 José Antonio Meade Kuribreña 268 253 51 7 319 260 Kalpana Morparia 268 248 21 1 289 249 Eileen Murray 386 331 30 — 416 331 Brendan Nelson 6 783 329 80 38 863 367 Swee Lian Teo 298 256 28 — 326 256 Sir Mark Tucker 7 1,125 1,500 62 145 1,187 1,645 Total (£000) 5,838 5,183 414 210 6,252 5,393 Total ($000) 7,691 6,828 545 277 8,236 7,104 1 Fees are in line with the Directors' remuneration policy approved by the shareholders at the 2025 AGM. 2 Benefits include taxable expenses such as accommodation, travel and subsistence relating to attendance at Board and other meetings at HSBC Holdings' registered offices. 3 Stepped down as a member of the Group Remuneration Committee on 31 January 2025. 4 Includes fee of £ 418,000 (2024: £ 430,000 ) in relation to his role as Chair of HSBC North America Holdings, Inc. 5 Appointed as a non-executive Director of HSBC Bank plc on 1 January 2025 and received a pro rata annual fee of £ 105,000 until 24 April 2025. Ann was appointed as Chair of HSBC Bank plc Board and the Nomination, Remuneration and Governance Committee on 25 April 2025 and received a pro rata annual fee of £ 300,000 . 6 Appointed as a non-executive Director of HSBC UK Bank plc on 9 January 2025 and received an annual fee for this appointment of £ 135,000 pro rata for the period 9 January 2025 to 30 September 2025. Following his appointment as Group Chairman on 1 October 2025, Brendan received a single total annual fee of £ 1.5 m pro rata and no other fees were paid in relation to any of his other Group or HSBC UK Bank plc roles from 1 October 2025. 7 Stepped down as Group Chairman on 30 September 2025. HSBC Holdings plc Annual Report on Form 20-F 271 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Non-executive Directors’ interests in shares (Audited) The shareholdings of persons who were non-executive Directors in 2025, including the shareholdings of their connected persons, at 31 December 2025, or date of cessation as a Director if earlier, are set out below. There have been no changes in the shareholdings of the non-executive Directors from 31 December 2025 to the date of this report. N on-executive Directors are expected to meet the shareholding guidelines of 15,000 shares within five years of the date of their appointment. All non-executive Directors who had been appointed for five years or more at 31 December 2025 met the guidelines. Shares Shareholding guidelines (number of shares) Share interests (number of shares) Geraldine Buckingham 15,000 15,000 Rachel Duan 15,000 15,000 Dame Carolyn Fairbairn 15,000 15,000 James Forese 15,000 115,000 Ann Godbehere 15,000 15,000 Steven Guggenheimer 15,000 15,000 José Antonio Meade Kuribreña 15,000 15,000 Kalpana Morparia 15,000 15,000 Eileen Murray 15,000 75,000 Brendan Nelson 15,000 15,000 Swee Lian Teo 15,000 15,200 Sir Mark Tucker (retired on 30 September 2025) 15,000 307,352 2026 fees for non-executive Directors The table below sets out the 2026 fees for non-executive Directors. The fees paid to non-executive Directors who are standing for election or re- election as members of Board committees are set out in the table below (these Board committees’ fees and Board fees are pro-rated for part year service where relevant). 2026 fees Position £ Non-executive Group Chairman 1 1,500,000 Non-executive Director (base fee) 136,500 Senior Independent Director 200,000 Group Audit Committee, Group Risk Committee, Group Remuneration Committee and Group Technology & Operations Committee Chair 150,000 Member 50,000 Nomination & Corporate Governance Committee Chair –– Member 34,650 Sustainability Working Group Chair 60,000 Member 30,000 Designated workforce engagement non-executive Director 50,000 1 The Group Chairman does not receive a base fee or any other fee in respect of chairing of the Nomination & Corporate Governance Committee. As signalled in the Annual Reports and Accounts 2024 and the 2025 Notice of AGM, as part of the 2024 review of fees payable to non-executive Directors, the Board agreed to align the fees for the role of Board committee chair (excluding the Nomination & Corporate Governance Committee) to £150,000 per annum in two phases: an initial increase to £125,000 per annum effective 1 January 2025, with a further increase with effect from 1 January 2026. No further changes have been made to the non-executive Director fees for 2026. Non-executive Director appointment and re-election Non-executive Directors and the Group Chairman are appointed for fixed terms not exceeding three years, which may be renewed subject to their re-election by shareholders at AGMs. Non-executive Directors and the Group Chairman do not have service contracts, but are bound by letters of appointment issued for and on behalf of HSBC Holdings, which are available for inspection at HSBC Holdings’ registered office. There are no obligations in the non-executive Directors’ or Group Chairman's letters of appointment that could give rise to remuneration payments or payments for loss of office. 2026 AGM 2027 AGM 2028 AGM José Antonio Meade Kuribreña James Forese Rachel Duan Geraldine Buckingham Steven Guggenheimer Dame Carolyn Fairbairn Kalpana Morparia Eileen Murray Wei Sun Christianson 1 Brendan Nelson Swee Lian Teo 1 Wei Sun Christianson was appointed following the 2025 AGM and therefore her initial three-year appointment terms are subject to approval of her election by shareholders at the 2026 AGM. Her initial three-year term of appointment will end at the conclusion of the 2029 AGM, subject to annual re-election by shareholders at the relevant AGMs. HSBC Holdings plc Annual Report on Form 20-F 272 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report MRT remuneration disclosures The following tables set out the remuneration disclosures for individuals identified as MRTs for HSBC Holdings. Remuneration information for individuals who are only identified as MRTs at HSBC Bank plc, HSBC UK Bank plc or other solo-regulated entity levels is included, where relevant, in those entities’ disclosures. The 2025 variable pay information included in the following tables is based on the market value of awards. For share awards, the market value is based on HSBC Holdings’ share price at the date of grant (unless indicated otherwise). For cash awards, it is the value of awards expected to be paid to the individual over the deferral period. Remuneration awarded for the financial year (REM1) Supervisory function Management function Other senior management Other identified staff Fixed remuneration Number of identified staff 12.0 2.0 13.0 1,230.1 Total fixed pay ($m) 8.4 3.8 27.5 685.3 –  of which: cash-based ($m) 1 8.4 3.8 27.5 685.3 –  of which: shares or equivalent ownership interests ($m) — — — — –  of which: share-linked instruments or equivalent non-cash instruments ($m) — — — — –  of which: other instruments ($m) — — — — –  of which: other forms ($m) — — — — Variable remuneration 3 Number of identified staff 12.0 2.0 13.0 1,230.1 Total variable remuneration ($m) 4 — 26.3 53.2 810.3 –  of which: cash-based ($m) — 3.8 26.9 429.9 –  of which: deferred ($m) — — 15.7 176.3 –  of which: shares or equivalent ownership interests ($m) 2 — 22.5 26.3 364.9 –  of which: deferred ($m) — 18.8 15.7 198.9 –  of which: share-linked instruments or equivalent non-cash instruments ($m) — — — 9.1 –  of which: deferred ($m) — — — 4.5 –  of which: other instruments ($m) — — — — –  of which: deferred ($m) — — — — –  of which: other forms ($m) — — — 6.4 –  of which: deferred ($m) — — — 3.9 Total remuneration ($m) 8.4 30.1 80.7 1,495.6 1 Cash-based fixed remuneration is paid immediately. 2 Paid in HSBC shares. Vested shares are subject to a retention period of up to one year for executive Directors and where required by regulation. 3 Variable pay awarded in respect of 2025. In accordance with shareholder approval received on 3 May 2024 (99% in favour), and where regulations permit, for each MRT the variable component of remuneration for any one year is limited to 10 times the fixed component of total remuneration, in line with the maximum pay ratio approved by the Group Remuneration Committee. HSBC Holdings plc continues to provide approval for entities regulated by the European Banking Authority to operate a maximum variable pay ratio of 200% of the fixed component of total remuneration for each MRT, where permitted to do so. 4 28 identified staff members were exempt from the application of the remuneration structure requirements for MRTs under the PRA and FCA remuneration rules. Their total remuneration is $ 9.3 m, of which $ 8.0 m is fixed pay and $ 1.3 m is variable remuneration. Special payments to staff whose professional activities have a material impact on institutions’ risk profile (REM2) Supervisory function Management function Other senior management Other identified staff Guaranteed variable remuneration awards 1 Number of identified staff — — — — Total amount ($m) — — — — –  of which guaranteed variable remuneration awards paid during the financial year, that are not taken into account in the bonus cap ($m) — — — — Severance payments awarded in previous periods, that have been paid out during the financial year 2 Number of identified staff — — — 9.9 Total amount ($m) — — — 11.3 Severance payments awarded during the financial year 2 Number of identified staff — — 1.0 134.0 Total amount ($m) — — 0.5 67.5 –  of which paid during the financial year ($m) — — — 60.2 –  of which deferred ($m) — — — — –  of which severance payments paid during the financial year, that are not taken into account in the bonus cap ($m) — — 0.5 67.5 –  of which highest payment that has been awarded to a single person ($m) — — 0.5 1.8 1 No guaranteed variable remuneration was awarded in 2025. HSBC would offer a guaranteed variable remuneration award in exceptional circumstances for new hires, and for the first year of employment only. It would typically involve a critical new hire, and would also depend on factors such as the seniority of the individual, whether the new hire candidate has any competing offers and the timing of the hire during the performance year. 2 Includes payments such as payment in lieu of notice, statutory severance, outplacement service, legal fees, ex-gratia payments and settlements (excludes pre- existing benefit entitlements triggered on terminations). HSBC Holdings plc Annual Report on Form 20-F 273 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Deferred remuneration at 31 December 1 (REM3) $m Total amount of deferred remuneration awarded for previous performance periods of which: due to vest in the financial year of which: vesting in subsequent financial years Amount of performance adjustment made in the financial year to deferred remuneration that was due to vest in the financial year Amount of performance adjustment made in the financial year to deferred remuneration that was due to vest in future performance years Total amount of adjustment during the financial year due to ex post implicit adjustments Total amount of deferred remuneration awarded before the financial year actually paid out in the financial year Total amount of deferred remuneration awarded for previous performance period that has vested but is subject to retention periods Supervisory function — — — — — — — — Cash-based — — — — — — — — Shares — — — — — — — — Share-linked instruments — — — — — — — — Other instruments — — — — — — — — Other forms — — — — — — — — Management function 82.0 5.5 76.5 (3.4) — 21.7 5.4 6.0 Cash-based 10.1 1.6 8.5 — — — 1.5 — Shares 71.9 3.9 68.0 (3.4) — 21.7 3.9 6.0 Share-linked instruments — — — — — — — — Other instruments — — — — — — — — Other forms — — — — — — — — Other senior management 147.3 20.3 127.0 (7.9) — 32.9 20.1 9.2 Cash-based 43.0 7.0 36.0 — — — 7.0 — Shares 104.3 13.3 91.0 (7.9) — 32.9 13.1 9.2 Share-linked instruments — — — — — — — — Other instruments — — — — — — — — Other forms — — — — — — — — Other identified staff 1,819.6 358.4 1,461.2 (12.6) — 344.4 351.4 104.6 Cash-based 553.2 109.7 443.5 — — — 108.3 — Shares 1,226.4 240.1 986.3 (12.6) — 334.6 234.7 98.7 Share-linked instruments 28.8 6.6 22.2 — — 8.2 6.5 4.2 Other instruments — — — — — — — — Other forms 11.2 2.0 9.2 — — 1.6 1.9 1.7 Total amount 2,048.9 384.2 1,664.7 (23.9) — 399.0 376.9 119.8 1 This table provides details of balances and movements during performance year 2025. For details of variable pay awards granted for 2025, refer to the ’Remuneration awarded for the financial year’ table. Deferred remuneration is made in cash and/or shares. Share-based awards are made in HSBC shares. Identified staff - remuneration by band 1 (REM4) Identified staff that are high earners as set out in Article 450(i) CRR €1,000,000 – 1,500,000 274 €1,500,000 – 2,000,000 96 €2,000,000 – 2,500,000 43 €2,500,000 – 3,000,000 30 €3,000,000 – 3,500,000 12 €3,500,000 – 4,000,000 7 €4,000,000 – 4,500,000 8 €4,500,000 – 5,000,000 5 €5,000,000 – 6,000,000 3 €6,000,000 – 7,000,000 7 €7,000,000 – 8,000,000 1 €8,000,000 – 9,000,000 — €9,000,000 – 10,000,000 2 €10,000,000 – 11,000,000 1 €11,000,000 – 12,000,000 — €12,000,000 – 13,000,000 — €13,000,000 – 14,000,000 — €14,000,000 – 15,000,000 — €15,000,000 – 16,000,000 — €16,000,000 – 17,000,000 1 1 Table prepared in euros in accordance with Article 450 of the European Union Capital Requirements Regulation, using the exchange rates published by the European Commission for financial programming and budget for December of the reported year as published on its website. HSBC Holdings plc Annual Report on Form 20-F 274 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Directors' remuneration report Information on remuneration of staff whose professional activities have a material impact on institutions’ risk profile (REM5) Management body Business areas Total Supervisory function Management function Total Investment banking Retail banking Asset management Corporate function Independent internal control function All other Total number of identified staff 1,257.1 – of which members of the Board 12.0 2.0 14.0 – of which senior management — 1.0 — 4.0 3.0 5.0 – of which other identified staff 510.9 276.4 35.9 160.8 174.5 71.6 Total remuneration of identified staff ($m) 8.4 30.1 38.5 717.1 311.4 47.1 220.6 136.7 143.4 – of which variable remuneration ($m) 1 — 26.3 26.3 418.6 166.1 25.3 117.2 57.1 79.2 – of which fixed remuneration ($m) 8.4 3.8 12.2 298.5 145.3 21.8 103.4 79.6 64.2 1 Variable pay awarded in respect of 2025. In accordance with shareholder approval received on 3 May 2024 (99% in favour), and where regulations permit, for each MRT the variable component of remuneration for any one year is limited to 10 times the fixed component of total remuneration, in line with the maximum pay ratio approved by the Group Remuneration Committee. HSBC Holdings plc continues to provide approval for entities regulated by the European Banking Authority to operate a maximum variable pay ratio of 200% of the fixed component of total remuneration for each MRT, where permitted to do so. HSBC Holdings plc Annual Report on Form 20-F 275 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital and other governance disclosures Share buy-bac ks On 31 October 2024, HSBC Holdings commenced a share buy-back of its ordinary shares of up to a maximum consideration of $3.0bn. The share buy-back continued in 2025 and was concluded on 11 February 2025, with 53,412,510 ordinary shares repurchased for cancellation on UK trading venues and 48,119,200 ordinary shares repurchased for cancellation on HKEx from 1 January to 11 February 2025. On 21 February 2025, HSBC Holdings commenced a further share buy- back of its ordinary shares of up to a maximum consideration of $2.0bn. This share buy-back concluded on 25 April 2025 with 90,226,199 ordinary shares repurchased for cancellation on UK trading venues and 89,362,400 ordinary shares repurchased for cancellation on HKEx. On 7 May 2025, HSBC Holdings commenced a further share buy-back of its ordinary shares of up to a maximum consideration of $3.0bn. This share buy-back concluded on 25 July 2025 with 151,454,350 ordinary shares repurchased for cancellation on UK trading venues and 101,298,000 ordinary shares repurchased for cancellation on HKEx. On 1 August 2025, HSBC Holdings commenced a further share buy- back of its ordinary shares of up to a maximum consideration of $3.0bn. This share buy-back concluded on 24 October 2025 with 136,301,568 ordinary shares repurchased for cancellation on UK trading venues and 91,040,400 ordinary shares repurchased for cancellation on HKEx. The purpose of the share buy-backs was to reduce HSBC’s number of outstanding ordinary shares. As at 31 December 2025, the total number of ordinary shares repurchased during the year was 761,214,627, representing a nominal value of $380,607,313.50 and an aggregate consideration paid by HSBC of £3,875,910,163 on UK trading venues and HK$30,257,041,599 on HKEx. The ordinary shares repurchased represent 4.43% of the ordinary shares in issue as at 31 December 2025. The table that follows outlines details of the ordinary shares purchased and cancelled on a monthly basis during 2025. Share buy-back – UK venues Number of shares repurchased Highest price paid per share Lowest price paid per share Average price paid per share Aggregate price paid £ £ £ £ Jan 2025 53,412,510 8.2800 7.6770 7.9835 426,418,493 Feb 2025 17,354,614 9.2790 8.7210 8.9940 156,088,219 Mar 2025 48,866,970 9.4300 8.3510 8.8567 432,798,143 Apr 2025 24,004,615 8.8940 6.9890 7.8260 187,859,442 May 2025 68,401,165 8.9150 8.3530 8.6873 594,221,858 Jun 2025 50,911,911 8.8730 8.6010 8.7091 443,397,460 Jul 2025 32,141,274 9.6800 8.6750 9.2982 298,856,687 Aug 2025 48,028,511 9.7220 9.0880 9.4473 453,738,250 Sep 2025 48,365,181 10.5080 9.4670 10.0103 484,152,048 Oct 2025 39,907,876 10.6740 9.6410 9.9825 398,379,563 Total 431,394,627 3,875,910,163 Share buy-back – Hong Kong venues Number of shares repurchased Highest price paid per share Lowest price paid per share Average price paid per share Aggregate price paid (HK$) (HK$) (HK$) (HK$) Jan 2025 29,455,200 79.9500 74.8000 76.9614 2,266,914,703 Feb 2025 33,403,600 89.8000 79.4500 84.2625 2,814,671,080 Mar 2025 54,995,200 92.5500 83.9500 88.6511 4,875,383,400 Apr 2025 19,627,600 89.1000 70.0500 79.7185 1,564,683,760 May 2025 48,790,000 93.6500 86.2500 90.6985 4,425,181,117 Jun 2025 29,848,800 93.9000 90.9000 92.1917 2,751,810,520 Jul 2025 22,659,200 102.1000 94.4500 98.0061 2,220,738,939 Aug 2025 32,520,800 102.2000 95.0500 99.1969 3,225,963,440 Sep 2025 31,736,800 109.2000 98.7500 104.7238 3,323,597,720 Oct 2025 26,782,800 112.0000 100.6000 104.1003 2,788,096,920 Total 329,820,000 30,257,041,599 HSBC Holdings plc Annual Report on Form 20-F 276 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital & other disclosures Dividends Dividends for 2025 First, second and third interim dividends for 2025, each of $0.10 per ordinary share, were paid on 20 June 2025, 26 September 2025 and 18 December 2025. For further details of the dividends approved in 2025, see Note 8 on the financial statements. On 25 February 2026, the Directors approved a fourth interim dividend for 2025 of $0.45 per ordinary share, making a total of $0.75 for the 2025 full-year. The fourth interim dividend for 2025 will be payable on 30 April 2026 in cash in US dollars, or in sterling or Hong Kong dollars at exchange rates to be determined on 20 April 2026. The fourth interim dividend for 2025 of $2.25 per American Depositary Share, each of which represents five ordinary shares, will be payable by the depositary in US dollars. No liability was recorded in the financial statements in respect of the fourth interim dividend for 2025. A quarterly dividend of £0.01 per non-cumulative preference share of £0.01 each was paid on 17 March, 16 June, 15 September and 15 December 2025. Dividends for 2026 The Group intends to pay quarterly dividends on its ordinary shares during 2026. A quarterly dividend of £0.01 per non-cumulative preference share of £0.01 each is payable on 16 March, 15 June, 15 September and 15 December 2026 for the quarter then ended at the sole and absolute discretion of the Board of HSBC Holdings plc. Accordingly, the Board of HSBC Holdings plc has approved a quarterly dividend to be payable on the non-cumulative preference share on 16 March 2026 to holders of record on 27 February 2026. Distributable reserves The distributable reserves of HSBC Holdings at 31 December 2025 were $46.2bn, a $17.9bn increase since 31 December 2024, primarily driven by $22.1bn in profits and other reserves movements generated in 2025, cancellation of $16.6bn standing to the credit of its share premium and capital redemption reserves pursuant to the Court approval obtained by HSBC Holdings on 24 June 2025, offset by $20.8bn dividends on ordinary shares, additional tier 1 coupon and share buy-back payments. Share capital Issued share capital The nominal value of HSBC Holdings’ issued share capital paid up at 31 December 2025 was $8,587,619,931 divided into 17,175,239,862 ordinary shares of $0.50 each and one non-cumulative preference share of £0.01, representing approximately 100.00% and 0.00% respectively of the nominal value of HSBC Holdings’ total issued share capital paid up at 31 December 2025. Rights, obligations and restrictions attaching to shares The rights and obligations attaching to each class of ordinary and non- cumulative preference shares in our share capital are set out in full in our Articles of Association. The Articles of Association may be amended by special resolution of the shareholders and can be found on our website at www.hsbc.com/who-we-are/our-people/board-of- directors/board-responsibilities. Ordinary shares HSBC Holdings has one class of ordinary share, which carries no right to fixed income. There are no voting restrictions on the issued ordinary shares, all of which are fully paid. On a show of hands, each member present has the right to one vote at general meetings. On a poll, each member present or voting by proxy is entitled to one vote for every $0.50 nominal value of share capital held. There are no specific restrictions on transfers of ordinary shares, which are governed by the general provisions of the Articles of Association and prevailing legislation. Ñ Information on the policy adopted by the Board for paying interim dividends on the ordinary shares may be found in the ’Shareholder information’ section on page 382 . Dividend waivers The Group ’ s employee benefit trusts, which hold shares in HSBC Holdings in connection with the operation of its share plans, have lodged standing instructions to waive dividends on shares held by them that have not been allocated to employees. Shares held by custodians in connection with the vesting of employee share awards also lodged instructions to waive dividends. The total amount of dividends waived during 2025 was $53.7m. Preference shares The preference shares, which have preferential rights to income and capital, do not, in general, confer a right to attend and vote at general meetings. There are three classes of preference shares in the share capital of HSBC Holdings: non-cumulative US dollar preference shares of $0.01 each (‘dollar preference shares’); non-cumulative preference shares of £0.01 each (‘sterling preference shares’); and non-cumulative preference shares of €0.01 (‘euro preference shares’). The sterling preference share in issue is a Series A sterling preference share. There are no dollar preference shares or euro preference shares in issue. Ñ Information on dividends approved for 2023 and 2024 may be found in Note 8 on the financial statements. Ñ Further details of the rights and obligations attaching to the HSBC Holdings’ issued share capital may be found in Note 32 on the financial statements. Compliance with Hong Kong Listing Rule 13.25A(2) HSBC Holdings has been granted a waiver from strict compliance with Rule 13.25A(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Under this waiver, HSBC’s obligation to file a Next Day Return following the issue of new shares, pursuant to the vesting of share awards granted under its share plans to persons who are not Directors, would only be triggered where it falls within one of the circumstances set out under Rule 13.25A(3). Share capital changes in 2025 HSBC Holdings does not hold any ordinary shares in treasury, and there were no scrip dividends issued during the year. HSBC Holdings plc Annual Report on Form 20-F 277 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital & other disclosures In addition to the share buy-backs, the following events occurred during the year in relation to the ordinary share capital of HSBC Holdings: All-employee share plans 1 HSBC Holdings ordinary shares issued Aggregate nominal value Market value per share from to $ £ £ HSBC International Employee Share Purchase Plan 118,316 59,158 10.368 10.368 1 In respect of the HSBC Holdings Savings Related Share Option Plan (UK), no new shares were issued under this plan. All exercises were satisfied by market purchased shares. See page 283 for details of options granted, exercised and lapsed. HSBC share plans HSBC Holdings ordinary shares issued Aggregate nominal value Market value per share from to $ £ £ Vesting of awards under the HSBC Share Plan 2011 9,819,050 4,909,525 8.465 10.69 Authorities to allot and to purchase shares and pre-emption rights At the AGM in 2025, shareholders renewed the general authority for the Directors to allot new shares up to 11,869,935,002 ordinary shares, 15,000,000 non-cumulative preference shares of £0.01 each, 15,000,000 non-cumulative preference shares of $0.01 each, 15,000,000 non-cumulative preference shares of €0.01 each. Shareholders also renewed the authority for the Directors to make market/off-market purchases of up to 1,780,490,250 ordinary shares. The Directors exercised their market/off-market purchase authority from both the 2024 AGM and the 2025 AGM and repurchased 761,214,627 ordinary shares during 2025. In addition, shareholders gave authority for the Directors to grant rights to subscribe for, or to convert any security into, no more than 3,560,980,500 ordinary shares in relation to any issue by HSBC Holdings, or any member of the Group, of contingent convertible securities that automatically convert into or are exchanged for ordinary shares in HSBC Holdings in prescribed circumstances. For further details on the issue of contingent convertible securities, see Note 32 on the financial statements. Other than as disclosed in the tables above headed ‘Share capital changes in 2025’, the Directors did not allot any shares during 2025. Debt securities In 2025, HSBC Holdings issued the equivalent of $33.8 bn of debt securities in the public capital markets in a range of currencies and maturities, of which $25.7bn were in the form of senior securities to ensure it meets the current and proposed regulatory rules, including those relating to the availability of adequate total loss-absorbing capacity. For details of capital instruments and subordinated bail-inable debt, see Notes 29 and 32 on pages 359 and 366 . Treasury shares HSBC Holdings does not hold any ordinary shares in treasury. Notifiable interests in share capital During 2025, HSBC Holdings did not receive any notification of major holdings of voting rights pursuant to the requirements of Rule 5 of the Disclosure Guidance and Transparency Rules (’Rule 5 of the DTRs’). No notifications had been received between 31 December 2025 and 19 February 2026. Previous notifications received are as follows: – BlackRock, Inc. gave notice on 3 March 2020 that on 2 March 2020 it had the following: an indirect interest in HSBC Holdings ordinary shares of 1,235,558,490; qualifying financial instruments with 7,294,459 voting rights that may be acquired if the instruments are exercised or converted; and financial instruments with a similar economic effect to qualifying financial instruments, which refer to 2,441,397 voting rights, representing 6.07%, 0.03% and 0.01%, respectively, of the total voting rights at 2 March 2020. – Ping An Asset Management Co., Ltd. gave notice on 6 December 2017 that on 4 December 2017 it had an indirect interest in HSBC Holdings ordinary shares of 1,007,946,172, representing 5.04% of the total voting rights at that date. At 31 December 2025, according to the register maintained by HSBC Holdings pursuant to section 336 of the Securities and Futures Ordinance of Hong Kong: – BlackRock, Inc. gave notice on 16 July 2025 that on 11 July 2025 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,586,341,122 shares and a short position of 6,856,029 shares, representing 9.09% and 0.04%, respectively, of the ordinary shares in issue 11 July 2025. – Ping An Asset Management Co., Ltd. gave notice on 10 May 2024 that on 7 May 2024 it had a long position of 1,502,584,731 in HSBC Holdings ordinary shares, representing 7.98% of the ordinary shares in issue at 7 May 2024. – The Bank of New York Mellon Corporation gave notice on 17 October 2025 that on 15 October 2025 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,035,915,129 shares, a short position of 551,070,412 shares and a lending pool of 449,036,061 shares representing 6.01%, 3.20% and 2.61%, respectively, of the ordinary shares in issue at 15 October 2025. The Bank of New York Mellon Corporation is the Depositary for the HSBC ADSs. Under the SFO, they are required to report the HSBC ADSs position as both a long and a short position. No notifications had been received between 31 December 2025 and 19 February 2026. Sufficiency of float In compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, at least 25% of the total issued share capital has been held by the public at all times during 2025 and up to the date of this report. Dealings in HSBC Holdings listed securities The Group has policies and procedures that, except where permitted by statute and regulation, prohibit specified transactions in respect of its securities listed on The Stock Exchange of Hong Kong Limited. Except for dealings as intermediaries or as trustees by subsidiaries of HSBC Holdings, and purchases by HSBC Holdings under the share buy- backs, neither HSBC Holdings nor any of its subsidiaries has purchased, sold or redeemed any of its securities listed on The Stock Exchange of Hong Kong Limited during the year ended 31 December 2025. Directors’ interests Pursuant to the requirements of the UK Listing Rules and according to the register of Directors’ interests maintained by HSBC Holdings pursuant to section 352 of the Securities and Futures Ordinance of Hong Kong, the Directors of HSBC Holdings at 31 December 2025 had certain interests, all beneficial unless otherwise stated, in the shares or debentures of HSBC Holdings and its associated corporations. HSBC Holdings plc Annual Report on Form 20-F 278 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital & other disclosures Save as stated in the following table, no further interests were held by Directors, and no Directors or their connected persons were awarded or exercised any right to subscribe for any shares or debentures in any HSBC corporation during the year. No Directors held any short position as defined in the Securities and Futures Ordinance of Hong Kong in the shares or debentures of HSBC Holdings and its associated corporations. Directors’ interests – shares and debentures At 31 Dec 2025 or date of cessation, if earlier At 1 Jan 2025, or date of appointment, if later Beneficial owner Child under 18 or spouse Jointly with spouse/ other Trustee Total interests HSBC Holdings ordinary shares Geraldine Buckingham 1 15,000 15,000 15,000 Rachel Duan 1 15,000 15,000 15,000 Georges Elhedery 2 966,017 1,109,810 1,109,810 Dame Carolyn Fairbairn 15,000 15,000 15,000 James Forese 1 115,000 115,000 115,000 Ann Godbehere 1 15,000 15,000 15,000 Steven Guggenheimer 1 15,000 15,000 15,000 Manveen (Pam) Kaur 2 801,296 986,625 986,625 José Antonio Meade Kuribreña 1 15,000 15,000 15,000 Kalpana Morparia 1 15,000 15,000 15,000 Eileen Murray 1 75,000 75,000 75,000 Brendan Nelson — 15,000 15,000 Swee Lian Teo 15,200 15,200 15,200 Sir Mark Tucker (retired on 30 September 2025) 307,352 307,352 307,352 1 Geraldine Buckingham has an interest in 3,000, Rachel Duan in 3,000, James Forese in 23,000, Ann Godbehere in 3,000, Steven Guggenheimer in 3,000, José Antonio Meade Kuribreña in 3,000, Kalpana Morparia in 3,000 and Eileen Murray in 15,000 listed American Depositary Shares (’ADS’), which are categorised as equity derivatives under Part XV of the Securities and Futures Ordinance of Hong Kong. Each ADS represents five HSBC Holdings ordinary shares. 2 Executive Directors’ other interests in HSBC Holdings ordinary shares arising from the HSBC Holdings Savings-Related Share Option Plan (UK) and the HSBC Share Plan 2011 are set out in the Scheme interests in the Directors’ remuneration report on page 249 . At 31 December 2025, or date of cessation if earlier, the aggregate interests under the Securities and Futures Ordinance of Hong Kong in HSBC Holdings ordinary shares, including interests arising through employee share plans and the interests above were: Georges Elhedery – 3,938,444; and Pam Kaur – 2,771,470, representing approximately 0.02% and 0.02% of the shares in issue respectively. There have been no changes in the shares or debentures of the current Directors from 31 December 2024 to the date of this report. UK Listing Rule 6.6.1 The disclosures required by UKLR 6.6.1 are set out on the following pages, and other regulatory requirements are incorporated by reference into this Directors' report: Content Page references Dividends and dividend waiver 276 , 382 Share buy-back 275 Emissions 39 - 46 Energy efficiency 40 , 35 - 36 Principal activities of HSBC 7 , 12 - 14 , 349 Business review and future developments 4 - 31 Risk Review 30 - 31 , 119 - 218 Engagement with suppliers, customers and others 29 - 29 , 33 - 63 Board governance Appointment and re-election of Directors A rigorous selection process is followed for the appointment of Directors. Appointments are made on merit and candidates are considered against objective criteria, and with regard to the benefits of a diverse Board. Appointments are made in accordance with HSBC Holdings plc's Articles of Association. The Board may at any time appoint any person as a Director or secretary, either to fill a vacancy or as an additional officer. The Board may appoint any Director or secretary to hold any employment or executive office and may revoke or terminate any such appointment. Non-executive Directors are appointed for an initial three-year term and, subject to continued satisfactory performance based upon an assessment by the Group Chairman and the Nomination & Corporate Governance Committee, are proposed for re-election by shareholders at each AGM. They typically serve two three-year terms, with any individual’s appointment beyond six years to be for a rolling one-year term and subject to thorough review and challenge with reference to the needs of the Board. Where non-executive Directors are appointed beyond six years, an explanation will be provided in the Annual Report and Accounts. Shareholders vote at each AGM on whether to elect and re-elect individual Directors. All Directors that stood for election and re-election at the 2025 AGM were elected and re-elected by shareholders. Joint Company Secretary Hannah Ashdown (48) was appointed as Deputy Group Secretary in December 2021 and for administrative purposes, in October 2022, was appointed as Joint Company Secretary. Hannah Ashdown stepped down from her role as Joint Company Secretary with effect from 31 December 2025 and no Joint Company Secretary was appointed in her place. Independence Independence is a critical component of good corporate governance, and a principle that is applied consistently at both the HSBC Holdings and subsidiary level. The Nomination & Corporate Governance Committee has delegated authority from the Board in relation to the assessment of the independence of non-executive Directors. In accordance with the UK and Hong Kong Corporate Governance Codes, as applicable, the Nomination & Corporate Governance Committee has reviewed and confirmed that all non-executive Directors, and the Group Chairman, who have submitted themselves for election and re-election at the AGM are considered to be independent. This conclusion was reached after consideration of all relevant circumstances that are likely to impair, or could appear to impair, independence. In line with the requirements of the Hong Kong Corporate Governance Code, the Nomination & Corporate Governance Committee also reviewed and considered the mechanisms in place to ensure independent views and inputs are available to the Board. These mechanisms include: – having the appropriate Board and committee structure in place, including rules on the appointment and tenure of non-executive Directors; HSBC Holdings plc Annual Report on Form 20-F 279 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital & other disclosures – facilitating the option of having brokers and external industry experts in attendance at Board meetings during 2025, as well as having representatives from the Group’s key regulators attend Board meetings in relation to specific regulatory items; – ensuring non-executive Directors are entitled to obtain independent professional advice relating to their personal responsibilities as a Director at the Group’s expense; – having terms of reference for each committee and the Board that provide authority to engage independent professional advisers; and – holding annual Board and committee performance reviews, with feedback sought from members on the quality of, and access to, independent external advice. Conflicts of interest The Board has an established policy and set of procedures, which are reviewed annually, to ensure that the Board’s management of Directors’ conflicts of interest is effective. The Board has the power to authorise conflicts where they arise, in accordance with the Companies Act 2006 and HSBC Holdings’ Articles of Association. Details of all Directors’ conflicts of interest are recorded in the register of conflicts. Upon appointment, new Directors are advised of the policy and procedures for managing conflicts. Directors are required to notify the Board of any actual or potential conflicts of interest and to update the Board with any changes to the facts and circumstances surrounding such conflicts. Directors are requested to review and confirm their own and their respective closely associated persons’ outside interests and appointments twice each year. The Board has considered, and authorised (with or without conditions) where appropriate, potential conflicts as they have arisen during the year in accordance with its conflicts policy and procedures. All non-executive Directors are subject to re-vetting by the Group’s compliance team on a triennial basis following appointment. As part of this re-vetting process, all conflict checks are refreshed. Non-executive Director commitments The terms and conditions of the appointments of non-executive Directors are set out in a letter of appointment, which includes the expectations of them, and the estimated time required to perform their role. Letters of appointment of each non-executive Director are available for inspection at the registered office of HSBC Holdings. Non-executive Directors serving on the Board and as a member of any committees are expected to serve up to 75 days per annum. The Senior Independent Director is expected to serve an additional 30 days per annum. Those Directors who also chair a large committee are expected to commit up to 100 days per annum, with the Group Risk Committee Chair expected to commit up to 150 days per annum. Any additional time commitment required of non-executive Directors in connection with Board and committee activities is confirmed to them separately. Board approval is required for any non-executive Director’s external commitments. When assessing these, consideration is given to the expected time commitment of the role, their total time commitment, potential conflicts of interest, the complexity and size of the organisation, the expectations of the role, and regulatory and investor expectations. Directors’ indemnities The Articles of Association of HSBC Holdings contain a qualifying third- party indemnity provision, which entitles Directors and other officers to be indemnified out of the assets of HSBC Holdings against claims from third parties in respect of certain liabilities. HSBC Holdings has granted, by way of deed poll, indemnities to the Directors, including former Directors, against certain liabilities arising in connection with their position as a Director of HSBC Holdings or of any Group company. Directors are indemnified to the maximum extent permitted by law. The indemnities that constitute a ’qualifying third-party indemnity provision’, as defined by section 234 of the Companies Act 2006, remained in force for the whole of the financial year (or, in the case of Directors appointed during 2025, from the date of their appointment). The deed poll is available for inspection at the registered office of HSBC Holdings. Additionally, Directors and pension trustees have the benefit of both Directors’ and officers’ liability insurance and pension trustees’ liability insurance. Qualifying pension scheme indemnities have also been granted to the trustees of the Group’s pension schemes, which were in force for the whole of the financial year and remain in force as at the date of this report. Contracts of significance During 2025, none of the Directors had a material interest, directly or indirectly, in any contract of significance with any HSBC company. During the year, all Directors were reminded of their obligations in respect of transacting in HSBC securities and, following specific enquiry, all Directors have confirmed that they have complied with their obligations. Shareholder engagement and communication The Board is directly accountable to, and gives high priority to communicating with, HSBC’s shareholders. Information about HSBC and its activities is provided to shareholders in its Interim Reports and the Annual Report and Accounts as well as on www. hsbc .com. The Board seeks to understand investor needs through ongoing dialogue between members of the Board and institutional investors throughout the year, and Committee Chairs seek to engage with major shareholders on matters within their area of responsibility, where practicable and appropriate. For examples of such engagements, see the 'Group Remuneration Committee Chair’s letter' on page 249 . During 2025, approximately 612 meetings were held with institutional investors and analysts globally. Our shareholder communications policy summarises how we communicate with our shareholders, including through financial reporting, general shareholder meetings, investor and analyst meetings and our website. The policy is reviewed annually, and in 2025 the Board confirmed that it was satisfied with its implementation and effectiveness. The policy can be found at www.hsbc.com/who-we-are/our-people/board-of- directors/board-responsibilities. We also publish our current and past financial results, investor presentations and shareholder information such as dividend payments and shareholder meeting details. Stock exchange announcements are also accessible on our website along with information for fixed income investors. For further details, see www.hsbc.com/investors. Directors are encouraged to develop an understanding of the views of shareholders. Enquiries from individuals on matters relating to their shareholdings and HSBC’s business are welcomed. Any individual or institutional investor can make an enquiry by contacting the investor relations team, Group Chairman, Group CEO, Group CFO and Group Company Secretary. Our Senior Independent Director is also available to shareholders if they have concerns that cannot be resolved or for which the normal channels would not be appropriate. They can be contacted via the Group Company Secretary at 8 Canada Square, London E14 5HQ. HSBC Holdings plc Annual Report on Form 20-F 280 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital & other disclosures Annual General Meeting The AGM in 2026 is planned to be held in London, UK at 10:00am on Friday, 8 May 2026. Information on how to vote and participate, online or in person, both in advance and on the day, can be found in the Notice of the 2026 AGM, which will be sent to shareholders on 27 March 2026 and be available on www.hsbc.com/agm. Shareholders can watch a live webcast of the AGM and access a recording of the proceedings shortly after the event at www.hsbc.com/agm. Shareholders should monitor our website and announcements for any changes to these arrangements. Shareholders may send enquiries to the Board in writing via the Group Company Secretary, at HSBC Holdings plc, 8 Canada Square, London E14 5HQ or by sending an email to shareholderquestions@hsbc.com. General meetings and resolutions Shareholders may require the Directors to call a general meeting other than an AGM, as provided by the UK Companies Act 2006. A valid request to call a general meeting may be made by members representing at least 5% of the paid-up capital of HSBC Holdings as carries the right of voting at its general meetings (excluding any paid-up capital held as treasury shares). A request must state the general nature of the business to be dealt with at the meeting and may include the text of a resolution that may properly be moved and is intended to be moved at the meeting. At any general meeting convened on such request, no business may be transacted except that stated by the requisition or proposed by the Board. Shareholders may request the Directors to send a resolution to shareholders for consideration at an AGM, as provided by the UK Companies Act 2006. A valid request must be made by (i) members representing at least 5% of the paid-up capital of HSBC Holdings as carries the right of voting at its general meetings (excluding any paid-up capital held as treasury shares), or (ii) at least 100 members who have a right to vote on the resolution at the AGM in question and hold shares in HSBC Holdings on which there has been paid up an average sum, per member, of at least £100. The request must be received by HSBC Holdings not later than (i) six weeks before the AGM in question; or (ii) if later, the time at which the notice of AGM is published. A request may be in hard copy form or in electronic form, and must be authenticated by the person or persons making it. A request may be made in writing to HSBC Holdings at its UK address, referred to in the paragraph above or by sending an email to shareholderquestions@hsbc.com. Articles of Association The Articles of Association were last approved at the 2022 AGM. The Articles of Association can be found at www.hsbc.com/who-we-are/ our-people/board-of-directors/board-responsibilities. Events after the balance sheet date For details of events after the balance sheet date, see Note 37 on the financial statements. Change of control The Group is not party to any significant agreements that take effect, alter or terminate following a change of control of the Group. The Group does not have agreements with any Director or employee that would provide compensation for loss of office or employment resulting from a takeover bid. Branches The Group provides a wide range of banking and financial services through branches and offices in the UK and overseas. Research and development activities During the ordinary course of business, the Group develops new products and services within the global businesses. Political donations HSBC does not make any political donations or incur political expenditure within the ordinary meaning of those words. We have no intention of altering this policy. However, the definitions of political donations, political parties, political organisations and political expenditure used in the UK Companies Act 2006 are very wide. As a result, they may cover routine activities that form part of the normal business activities of the Group and are an accepted part of engaging with stakeholders. To ensure that neither the Group nor any of its subsidiaries inadvertently breaches the UK Companies Act 2006, authority is sought from shareholders at the AGM to make political donations. HSBC provides administrative support to two political action committees (’PACs’) in the US funded by voluntary political contributions by eligible employees. We do not control the PACs, and all decisions regarding the amounts and recipients of contributions are directed by a voluntary Board Finance Committee, which consists of contributing eligible employees. The PACs recorded combined political donations of $134,750 during 2025 (2024: $124,450). Charitable contributions For details of charitable contributions, see page 56 . Internal control The Board is responsible for monitoring the Group’s risk management and internal control systems, determining the level and type of risks the Group is willing to take in achieving its strategic objectives, and reviewing the effectiveness of relevant procedures on an annual basis. Global Internal Audit provides independent and objective assurance to the Board and assesses whether the design and operational effectiveness of the Group's risk management, governance and internal control processes are adequate and effective. To meet this requirement and to discharge its obligations under the FCA Handbook and the PRA Rulebook, procedures have been designed to provide reasonable assurance against material misstatement, errors, losses or fraud. They are designed to provide effective internal control within the Group and accord with the Financial Reporting Council‘s guidance for Directors, issued in 2014, on risk management, internal control and related financial and business reporting. The procedures have been in place throughout the year and up to 25 February 2026, the date of publication of the Annual Report and Accounts 2025. The Board, the GRC and the GAC monitor the effectiveness of the Group’s system of risk management and internal control through regular updates on the operation of the Group’s internal controls, supplemented by reviews of these controls by the Group Chief Control Oversight Office, second line of defence, internal audit, and the external auditors. These reviews enable the Board to perform an annual review of effectiveness, identifying no material weaknesses as at the year-end. Areas identified for improvement internally or by the Group's regulators are prioritised appropriately, with necessary actions taken to remedy any shortcomings identified. At a granular level, the risk management and internal control systems of the Group are continuously monitored and challenged to ensure that they are designed and operating effectively. In 2026, continued focus will be placed on control environments relating to regulatory reporting and technology risk. This will include work by the GAC to support preparations for the Board's declaration on the effectiveness of material controls, which HSBC will be required to include in the Annual Report and Accounts 2026 under the UK and Hong Kong Corporate Governance Codes. HSBC Holdings plc Annual Report on Form 20-F 281 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital & other disclosures Delegation of authority within limits set by the Board Subject to certain matters reserved for the Board, the Group CEO has been delegated authority to manage the day-to-day affairs of the Group. A delegation of authority framework is in place providing a Group structure within which the Board and its subsidiaries can manage their delegated powers related to external commitments. These delegated authorities can be used for the approval, signing and execution of specific written agreements and documents such as procurement contracts. The delegation of authority framework is adopted on a legal entity basis via a board resolution which is reviewed annually. Matters not covered by the delegation of authority framework can be set out in a separate board resolution, powers of attorney or the relevant Group policy with clear systems of control that are appropriate to the business or function. Authorities to enter into credit and market risk exposures are delegated with limits to line management of Group companies in line with Group policy. Credit and market risks are measured and reported at subsidiary company level and aggregated for risk concentration analysis on a Group-wide basis. Risk Management Risk management framework The Risk Management Framework ('RMF') sets out how we manage the risks in our ability to operate, grow and meet expectations. It translates our strategy, values and commitments into practical actions and risk-aware decisions. It covers all risk types across the organisation and is underpinned by our culture and values. Our RMF foundations provide consistency across the Group in identifying, evaluating and managing significant risks. They are interconnected and help form an enterprise-wide view of risk which reflects the relationship between the risks we take in delivering our strategy and the resources available to manage them. It enables us to make considered, forward-looking decisions that align with our capacity and strategic objectives. Risk identification and monitoring There are comprehensive systems and procedures to identify, measure, assess, control and monitor risks. Our risk taxonomy categorises risks covering all material risks to which the Group is exposed. It is a multi-level structure that helps organise, assess and respond to risk in a targeted way. It supports clearer identification of risks, tailored control design and mitigation and risk-type specific assessment approaches. The residual risk which remains after considering our control environment and the resources available to manage the risks is then assessed against our risk appetite, which sets out the level of risk the Group is willing to take in pursuit of its strategy. Enterprise risk reporting provides a consolidated view of material risks across the Group, assessed through the risk taxonomy and in relation to risk appetite. It enables decision-makers to monitor key exposures, identify emerging themes, and assess whether risks remain aligned with the Group’s strategic objectives. This includes insights from risk- type reports, thematic reviews, and emerging risks. The Group employs a top and emerging risks process to provide forward-looking views of issues with the potential to threaten the execution of our strategy or operations over the medium to long term. All employees are responsible for identifying and managing risk within the scope of their role as part of our three lines of defence model, which defines clear accountabilities and responsibilities across risk ownership, oversight and independent assurance. The first line owns and manages the risks, the second line provides risk oversight and challenge and the third line delivers independent assurance. The Board delegates authority to the GAC to annually review the independence, autonomy and effectiveness of the Group’s policies and procedures on whistleblowing, including the procedures for the protection of staff who raise concerns of detrimental treatment. Strategic plans Strategic plans are prepared for global businesses, global functions and geographical regions within the framework of the Group’s overall strategy. Financial resource plans, informed by risk appetite are prepared and adopted by all major Group operating companies and set out the key business initiatives and the likely financial effects of those initiatives. Internal control over financial reporting HSBC is required to comply with section 404 of the US Sarbanes-Oxley Act of 2002 and assess its effectiveness of internal control over financial reporting at 31 December 2025. In 2014, the GAC endorsed the adoption of the principles of the Committee of Sponsoring Organizations of the Treadway Commission (’COSO’) 2013 framework for the monitoring of risk management and internal control systems to satisfy the requirements of section 404 of the Sarbanes-Oxley Act. The primary mechanism through which comfort over risk management and internal control systems is achieved is through annual assessments of the effectiveness of controls to manage risk, and the reporting of issues on a regular basis through the various risk management and risk governance forums, including regular updates to the GAC. The key risk management and internal control procedures over financial reporting include the following: Entity level controls Entity level controls are a defined suite of internal controls that have a pervasive influence over the entity as a whole and meet the principles of the COSO framework. They include controls related to the control environment, such as the Group’s values and ethics, the promotion of effective risk management and the overarching governance exercised by the Board and its non-executive committees. The design and operational effectiveness of entity level controls are assessed on an ongoing basis. If issues are significant to the Group, they are escalated to the GRC and/or the GAC. Process level transactional controls Key process level controls that mitigate the risk of financial misstatement are identified, recorded and monitored in accordance with the risk framework. This includes the identification and assessment of relevant control issues against which action plans are tracked through to remediation. Further details of HSBC’s approach to risk management can be found on page 119 . Financial reporting controls The Group’s financial reporting process is controlled using documented accounting policies and reporting formats, supported by detailed instructions and guidance on reporting requirements, issued to all reporting entities within the Group in advance of each reporting period end. The submission of financial information from each reporting entity is supported by a certification by the responsible financial officer and analytical review procedures at reporting entity and Group levels. Group Disclosure Committee Chaired by the Group CFO, the Group Disclosure Committee supports the discharge of the Group’s obligations under applicable legislation and regulation including the UK and Hong Kong Listing Rules, UK Market Abuse Regulation and US Securities and Exchange Commission rules. In so doing, the Group Disclosure Committee is empowered to determine whether a new event or circumstance should be disclosed, including the form and timing of such disclosure, and review and endorse certain material disclosures made or to be made by the Group. The membership of the Group Disclosure Committee consists of senior management, including the Group CFO, Group Chief Risk and Compliance Officer, Group Chief Legal Officer and Group Company HSBC Holdings plc Annual Report on Form 20-F 282 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital & other disclosures Secretary. The Group’s external auditors are standing attendees, while the Group's brokers and external legal counsel are consulted on relevant matters and attend as required. The integrity of disclosures is underpinned by structures and processes within the Global Finance and Group Risk and Compliance functions that support rigorous analytical review of financial reporting and the maintenance of proper accounting records. As required by the Sarbanes-Oxley Act, the Group CEO and the Group CFO have certified that the Group’s disclosure controls and procedures were effective as at the end of the period covered by the Annual Report and Accounts 2025. The annual review of the effectiveness of the Group’s system of risk management and internal control over financial reporting was conducted with reference to the COSO 2013 framework. Based on the assessment performed, the Directors concluded that for the year ended 31 December 2025, the Group’s internal control over financial reporting was effective. PwC has audited the effectiveness of HSBC’s internal control over financial reporting and has given an unqualified opinion. Going concern The Directors considered it appropriate to prepare the financial statements on a going concern basis. In making the going concern assessment, the Directors have considered a wide range of detailed information relating to present and future conditions, including future projections for profitability, liquidity, capital requirements and capital resources. In carrying out their assessment of the principal risks (as detailed on page 121 of this annual report on Form 20-F), the Directors considered a wide range of information including: – details of the Group’s business and operating models, and strategy (see page 12 in this annual report on Form 20-F); – details of the Group’s approach to managing risk and allocating capital; – a summary of the Group’s financial position considering performance, its ability to maintain minimum levels of regulatory capital, liquidity funding and the minimum requirements for own funds and eligible liabilities over the period of the assessment. Notable are the risks which the Directors believe could adversely impact the Group’s future results or operations; – enterprise risk reports, including the Group’s risk appetite profile (see page 119 of this annual report on Form 20-F) and top and emerging risks (see page 121 of this annual report on Form 20-F); – the impact on the Group due to the Russia-Ukraine war and further conflict or military action in the Middle East, Venezuela or elsewhere; uncertainty around Hong Kong and mainland China’s CRE sectors; ongoing and potential trade restrictions; cross-border investment restrictions; changes to tariff rates; and heightened strategic competition between the US and China; – reports and updates regarding regulatory and internal stress testing. On 24 March 2025, the Bank of England (‘BoE’) launched the Bank Capital Stress Test (‘BCST’) exercise to assess the resilience of the UK banking system to a range of adverse shocks. The exercise involved determining projected capital and liquidity metrics under a severe but plausible stress scenario. The BoE published the results of the 2025 BCST as part of the Financial Stability Report on 2 December 2025. HSBC demonstrated a strong CET1 performance, highlighting its resilience in stress. Internal stress tests, including the 2026 Group-wide internal stress test performed in December 2025, together with additional scenario analysis examining the potential outcomes from ongoing geopolitical uncertainty, supported adequate capitalisation. We also conduct reverse stress tests each year at Group level and, where required at subsidiary entity level, to understand potential extreme conditions that would make our business model non-viable. Reverse stress testing identifies potential stresses and vulnerabilities we might face, and helps inform early warning triggers, management actions and contingency plans designed to mitigate risks – we conduct internal climate scenario analysis to evaluate our resilience to climate change, with a particular focus on both climate- related physical and transition risks. The findings indicate that the Group does not anticipate any material impacts arising from climate change, at least for the next three years. Furthermore, our capital position is robust enough to absorb severe climate-related stresses. Nonetheless, it is recognised that climate-related risks are likely to increase beyond this timeframe. Further details of our modelling approach, modelling limitations and insights from our 2025 climate scenario analysis are explained from page 206 of thi s annual report on Form 20-F; – reports and updates from management on risk-related issues selected for in-depth consideration; – reports and updates on regulatory developments; – legal proceedings and regulatory matters set out in Note 35 of the financial statements in this annual report on Form 20-F; and – reports and updates from management on the operational resilience of the Group. Employees At 31 December 2025, HSBC had a total workforce equivalent to 209,000 full-time employees compared with 211,000 at the end of 2024. Our main centres of employment were India with approximately 47,000 employees, the UK with 33,000, mainland China with 33,000, Hong Kong with 26,000, and Mexico with 16,000. Our business spans many cultures, communities and continents. We aspire to provide a high-performing environment where our colleagues can fulfil their potential by building their skills and capabilities while focusing on the development of a diverse and inclusive culture. We use employee surveys to assess progress and make changes. We want our colleagues to feel connected and supported to speak up, and our leaders to encourage and use feedback. Where we make organisational changes, we support our colleagues, particularly where jobs are impacted. Employee relations We consult with and, where appropriate, negotiate with employee representative bodies where we have them. It is our policy to maintain well-developed communications and consultation programmes with all employee representative bodies. There have been no material disruptions to our operations from labour disputes during the past five years. We are committed to complying with the applicable employment laws and regulations in the jurisdictions in which we operate, including in relation to working hours and rest periods. HSBC’s employment practices and relations policy provides the framework and controls through which we seek to uphold that commitment. Inclusion Our customers, colleagues and communities span many cultures and continents. We value difference and believe that an inclusive culture makes us stronger. We are dedicated to building a connected workforce where everyone feels a sense of belonging. We expect all colleagues at HSBC to treat each other with dignity and respect to ensure an inclusive environment. Our policies make it clear that we do not tolerate unlawful discrimination, bullying or harassment on any grounds. We are transparent in sharing our data through external disclosures and we participate in benchmarking to measure our progress across the industry. Our approach to inclusion is set out on page 51 alongside our ambitions and progress. Ñ For further details of our representation data, pay gap data, and actions, see www.hsbc.com/who-we-are/our-people/inclusion-at-hsbc and the ESG Data Pack at www.hsbc.com/esg. HSBC Holdings plc Annual Report on Form 20-F 283 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Share capital & other disclosures Employment of people with a disability We strongly believe in providing equal opportunities for our employees. The employment of people with a disability is included in this commitment. We are committed to retaining disabled employees in the workplace and to providing reasonable adjustments to enable this. Employee development Employee development energises our colleagues for growth and helps to equip them with the skills they need today whilst also preparing them to meet future challenges. We remain committed to delivering a high-quality learning experience by adopting a data-driven approach that targets our learning investment to meet the most critical skill needs. By leveraging our strategic workforce blueprints, we have focused our efforts on critical skill shifts, including digitally enabling our frontline colleagues and developing the sustainability and wealth expertise of our relationship managers, providing a variety of learning opportunities through our Enterprise Skills Academies. We have launched our new AI Academy to support advanced skills development aligned with HSBC’s AI strategy, expanded our ’Doing Business in India and China’ programmes to include Saudi Arabia, and increased our focus on building capabilities beyond foundational skills through our Sustainability Academy. In our global Wealth and Personal Banking business we have focused our attention on developing customer centricity and product expertise, and we have created opportunities for colleagues to develop new skills and collaborate more broadly through our transition to a value stream delivery model as part of our bank wide Digital Acceleration Programme. We remain committed to our global mandatory training being completed annually, as it is essential for shaping our culture and maintaining a focus on critical issues, such as sustainability and financial crime risk. In line with this commitment, we have maintained our focus on senior leaders by launching new programmes centred on Enterprise Risk Leadership, which are designed to equip them with the skills necessary to navigate an evolving risk environment. Health and safety We are dedicated to maintaining a safe and healthy working environment for all. Our global policies, mandatory procedures, and incident reporting systems across the organisation reflect our core values and comply with international standards. Chief Operating Officers are responsible for local implementation of all legal requirements and ensuring ongoing adherence. We continuously monitor and assure our health and safety performance to remain compliant with relevant regulations. In 2025, we advanced our Health & Safety agenda through several key initiatives: – Achieved the WELL Health and Safety Rating at 100 global offices, demonstrating our commitment to safe workplaces for employees, customers, and stakeholders. – Delivered mandatory health and safety training globally, increasing awareness of roles and responsibilities among employees and contractors. – Conducted annual safety inspections across all buildings worldwide, identifying opportunities for improvement and enhancing safety standards. – Expanded our Workplace Adjustments programme to eight markets, to provide additional tailored support to employees with disabilities, long-term health conditions, or neurodiversity. Further expansion is planned. – Held our 2025 Global Health and Safety Campaign, combining education and interactive experiences on slips and trips, moving objects, ergonomics, and emergency arrangements. – Provided targeted guidance and training for construction partners, with over 6,300 workers receiving safety passport training across nine countries. – Implemented robust controls to protect colleagues and operations from natural disasters; in 2025, 33 named storms affected 2,222 buildings, with no injuries or impact reported. These actions reinforce our commitment to safeguarding our people and operations, while continuously improving our health and safety standards. Employee health and safety 2025 2024 2023 Rate of workplace fatalities per 100,000 employees — — — Number of major injuries to employees 1 10 14 12 All injury rate per 100,000 employees 96 91 110 Lost days due to work injury 331 335 594 1 Fractures, dislocation, concussion, loss of consciousness, overnight admission to hospital. Remuneration HSBC’s pay and performance strategy is designed to reward competitively the achievement of long-term sustainable performance and attract and motivate the very best people, regardless of gender, ethnicity, age, disability or any other factor unrelated to performance or experience with the Group, while performing their role in the long-term interests of our stakeholders. Ñ For further details of the Group’s approach to remuneration, see page 259 . Employee share plans Summaries of the share options and share awards granted, exercised/ vested or lapsed during the year and other details required to be disclosed pursuant to Chapter 17 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including detailed summaries of the HSBC share plans, are available on our website at www.hsbc.com/investors/results-and-announcements and on the website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk, or can be obtained upon request from the Group Company Secretary, 8 Canada Square, London E14 5HQ. Ñ Particulars of options held by Directors of HSBC Holdings are set out on page 268 . Ñ Note 5 on the financial statements gives details of share-based payments, including discretionary awards of shares granted under HSBC share plans. HSBC Holdings plc Annual Report on Form 20-F 284 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Statement of compliance The statement of corporate governance practices set out on pages 219 to 284 and the information referred to therein constitutes the Corporate governance report and Directors’ report of HSBC Holdings plc for 2025. Further details of the relevant corporate governance codes, role profiles and policies can be obtained from the websites referenced in the table below. The websites referenced here do not form part of this report. Relevant corporate governance codes, role profiles and policies UK Corporate Governance Code www.frc.org.uk Hong Kong Corporate Governance Code (set out in Appendix C1 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (’HKEx’)) www.hkex.com.hk Descriptions of the roles and responsibilities of the: –  Group Chairman –  Group Chief Executive Officer –  Senior Independent Director –  Board www.hsbc.com/who-we-are/our- people/board-of-directors/board- responsibilities Board and senior management www.hsbc.com/who-we-are/our- people Roles and responsibilities of the Board’s committees www.hsbc.com/who-we-are/our- people/board-of-directors/board- committees Board’s policies on: –  diversity and inclusion –  shareholder communication –  human rights –  remuneration practices and governance www.hsbc.com/who-we-are/our- people/board-of-directors/board- responsibilities Global Internal Audit Charter www.hsbc.com/who-we-are/esg-and- responsible-business/governance/ internal-control The Board considers that, during 2025, HSBC fully complied with both the UK and Hong Kong Corporate Governance Codes, with the exception of Provision 24 of the UK Corporate Governance Code in relation to the Group Chairman being a member of the Group Audit Committee. Brendan Nelson has served as the Chair of the Group Audit Committee since February 2024, and on 1 October 2025, was appointed as Group Chairman on an interim basis. Due to the interim nature of this appointment, and to provide continuity, the Board determined that Brendan should continue to Chair the Group Audit Committee until a permanent Group Chairman was appointed. The Board subsequently took the decision to appoint Brendan as a permanent successor to the role of Group Chairman on 3 December 2025, and determined that it was in the best interests of the Group for Brendan to continue in his role as Chair of the Group Audit Committee to provide continuity of oversight for the 2025 audit process and until a permanent successor had been identified and appointed. These decisions reflect Brendan’s extensive experience on UK-listed boards and his previous roles as an auditor and audit committee chair. It was also agreed that Brendan had sufficient capacity to fulfil these roles given that HSBC is Brendan's only significant board commitment. Under the Hong Kong Corporate Governance Code, the audit committee should be responsible for the oversight of all risk management and internal control systems. The Group Audit Committee’s responsibilities cover oversight of the effectiveness of all internal controls. The Group Risk Committee has responsibility for oversight of internal controls relating to risk management and risk management systems and provides input to the Group Audit Committee on these. HSBC Holdings plc has codified obligations for transactions in Group securities in accordance with the requirements of the UK Market Abuse Regulation and the rules governing the listing of securities on HKEx. The Group has been granted certain waivers by HKEx from strict compliance with the rules that take into account accepted practices in the UK, particularly in respect of employee share plans. During the year, all Directors were reminded of their obligations in respect of transacting in HSBC Group securities. Following specific enquiry all Directors have confirmed that they have complied with their obligations. The Group Audit Committee has reviewed and provided assurance to support the HSBC Holdings Board’s approval and publication of the Annual Report and Accounts 2025. On behalf of the Board Brendan Nelson Group Chairman HSBC Holdings plc Registered number 617987 25 February 2026 HSBC Holdings plc Annual Report on Form 20-F 285 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial statements The financial statements provide detailed information and notes on our income, balance sheet, cash flows and changes in equity, alongside a report from our independent auditors. 286 Report of Independent Registered Public Accounting Firm 288 Financial statements 288 – Consolidated income statement 289 – Consolidated statement of comprehensive income 290 – Consolidated balance sheet 291 – Consolidated statement of changes in equity 294 – Consolidated statement of cash flows 296 – HSBC Holdings financial statements 300 Notes on the financial statements 6 HSBC Holdings plc Annual Report on Form 20-F 286 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Independent auditors report Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of HSBC Holdings plc Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheet of HSBC Holdings plc and its subsidiaries (the “Group”) as of 31 December 2025 and 2024, and the related consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for each of the three years in the period ended 31 December  2025, including the related notes (collectively referred to as the “consolidated financial statements”).  We also have audited the Group’s internal control over financial reporting as of 31 December 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Group as of 31 December 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended 31 December 2025 in conformity with (i) International Financial Reporting Standards as issued by the International Accounting Standards Board, (ii) UK-adopted International Accounting Standards and (iii) International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.  Also in our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of 31 December 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Group's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s assessment of internal controls over financial reporting on page 111 of this Form 20-F. Our responsibility is to express opinions on the Group’s consolidated financial statements and on the Group's internal control over financial reporting based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Measurement of expected credit losses As described in Note 1.2 (j) to the consolidated financial statements, expected credit losses (‘ECL’) are recognised for loans and advances to banks and customers, non-trading reverse repurchase agreements, other financial assets held at amortised cost, debt instruments measured at fair value through other comprehensive income and certain loan commitments and financial guarantee contracts. As disclosed by management, the Group's allowance for ECL was $11.2bn at 31 December 2025. The assessment of credit risk and the estimation of ECL are probability-weighted and incorporate information about past events, current conditions and forecasts of future economic conditions at the reporting date. Management calculates ECL using three main components: a probability of default (‘PD’), a loss given default (‘LGD’) and the exposure at default (‘EAD’). As disclosed by management, the recognition and measurement of ECL involves the use of significant judgement and estimation. Management form multiple economic scenarios based on economic forecasts, apply these to credit risk models to estimate future credit losses, and probability weight the results to determine an ECL estimate. HSBC Holdings plc Annual Report on Form 20-F 287 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Report of Independent Registered Public Accounting Firm The principal considerations for our determination that performing procedures relating to the measurement of ECL is a critical audit matter are: (i) the significant judgement by management in developing the assumptions for multiple economic scenarios and the weighting of those scenarios; (ii) a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating audit evidence obtained; and (iii) the audit effort involved the use of professionals with specialised skills and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the measurement of ECL. These procedures also included, amongst others, testing management’s process for estimating ECL through: (i) evaluating the appropriateness of the ECL model methodologies applied by management; (ii) evaluating the reasonableness of certain economic scenarios and weightings used; (iii) evaluating the reasonableness of discounted cash flow projections for a sample of credit impaired exposures; (iv) testing the completeness and accuracy of critical input data that is used by management to determine ECL; and (v) evaluating the disclosures made in the consolidated financial statements in relation to the measurement of ECL. Professionals with specialised skills and knowledge assisted in testing the appropriateness of model methodologies and assessing the reasonableness of the selection and weighting of economic scenarios. Impairment assessment of investment in Bank of Communications co., Limited (‘BoCom’) As described in Note 1.2(a) and 18 to the consolidated financial statements, the carrying value of the Group's investment in BoCom is $22.5bn at 31 December 2025.  At 30 June 2025, management performed an impairment test on the carrying amount, which resulted in an impairment of $1.0bn, as the recoverable amount as determined by a value-in-use (‘VIU’) calculation was lower than the carrying amount. No further impairment (or reversal) was required for the period from 1 July 2025 to 31 December 2025 based on results of the quarterly impairment tests performed. The VIU calculation uses discounted cash flow projections based on management’s best estimates of future earnings available to ordinary shareholders. As disclosed by management, there is significant judgement in determining the VIU, particularly in estimating the present value of cash flows expected to arise from continuing to hold the investment, based on a number of assumptions. The significant assumptions used were discount rate, operating income growth rate, cost-income ratio, expected credit losses as a percentage of loans and advances to customers, risk- weighted assets as a percentage of total assets, loans and advances to customers growth rate, capital adequacy ratio and tier 1 capital adequacy ratio, and long-term effective tax rate, long-term profit growth rate and long-term asset growth rate. The principal considerations for our determination that performing procedures relating to the impairment assessment of investment in BoCom is a critical audit matter are: (i) the significant judgement by management when determining significant assumptions for discount rate, operating income growth rate, cost-income ratio, expected credit losses as a percentage of loans and advances to customers, risk-weighted assets as a percentage of total assets, loans and advances to customers growth rate, capital adequacy ratio and tier 1 capital adequacy ratio, and long-term effective tax rate, long-term profit growth rate and long-term asset growth rate ; (ii) a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating management's estimate of the VIU and evaluating audit evidence; and (iii) the audit effort involved the use of professionals with specialised skills and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s impairment assessment of the investment in BoCom. These procedures also included, amongst others: (i) evaluating management’s VIU determination and aforementioned underlying significant assumptions;  (ii) developing an independent range for discount rate; (iii) evaluating the appropriateness of the methodology used to estimate the VIU; (iv) testing inputs used in the determination of the significant assumptions; and (v) evaluating the disclosures made in the consolidated financial statements in relation to BoCom. Professionals with specialised skill and knowledge were used to assist in assessing the VIU methodology and developing an independent range for discount rate. /s/ PricewaterhouseCoopers LLP London, United Kingdom 26 February 2026 We have served as the Group's auditor since 2015. HSBC Holdings plc Annual Report on Form 20-F 288 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Financial statements Consolidated income statement for the year ended 31 December 2025 2025 2024 2023 Notes * $m $m $m Net interest income 34,794 32,733 35,796 –  interest income 1,2 97,872 108,631 100,868 –  interest expense 3 ( 63,078 ) ( 75,898 ) ( 65,072 ) Net fee income 2 13,343 12,301 11,845 –  fee income 17,608 16,266 15,616 –  fee expense ( 4,265 ) ( 3,965 ) ( 3,771 ) Net income from financial instruments held for trading or managed on a fair value basis 4 3 19,682 21,116 16,661 Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss 3 11,175 5,901 7,887 Insurance finance expense 4 ( 11,197 ) ( 5,978 ) ( 7,809 ) Insurance service result 4 1,825 1,310 1,078 –  insurance service revenue 3,228 2,752 2,259 –  insurance service expense ( 1,403 ) ( 1,442 ) ( 1,181 ) Gain on acquisition 5 — — 1,591 Losses recognised on sale of business operations 6 ( 47 ) ( 1,752 ) ( 61 ) Other operating income/(expense) 7,8 ( 1,301 ) 223 ( 930 ) Net operating income before change in expected credit losses and other credit impairment charges 9 68,274 65,854 66,058 Change in expected credit losses and other credit impairment charges ( 3,850 ) ( 3,414 ) ( 3,447 ) Net operating income 64,424 62,440 62,611 Employee compensation and benefits 5 ( 19,553 ) ( 18,465 ) ( 18,220 ) General and administrative expenses ( 11,959 ) ( 10,498 ) ( 10,383 ) Depreciation and impairment of property, plant and equipment and right-of-use assets 10 ( 1,971 ) ( 1,845 ) ( 1,640 ) Amortisation and impairment of intangible assets ( 2,945 ) ( 2,235 ) ( 1,827 ) Total operating expenses ( 36,428 ) ( 33,043 ) ( 32,070 ) Operating profit 27,996 29,397 30,541 Share of profit in associates and joint ventures 18 2,911 2,912 2,807 Impairment of interest in associate 8 18 ( 1,000 ) — ( 3,000 ) Profit before tax 29,907 32,309 30,348 Tax expense 7 ( 6,776 ) ( 7,310 ) ( 5,789 ) Profit for the year 23,131 24,999 24,559 Attributable to: –  ordinary shareholders of the parent company 21,102 22,917 22,432 –  other equity holders 1,183 1,062 1,101 –  non-controlling interests 846 1,020 1,026 Profit for the year 23,131 24,999 24,559 $ $ $ Basic earnings per ordinary share 9 1.21 1.25 1.15 Diluted earnings per ordinary share 9 1.20 1.24 1.14 For Notes on the financial statements, see page 300 . 1 Includes $ 83.3 bn (2024: $ 93.4 bn ; 2023: $ 88.7 bn ) of interest recognised on financial assets measured at amortised cost and $ 14.5 bn (2024: $ 15.3 bn ; 2023: $ 12.1 bn ) of interest recognised on financial assets measured at fair value through other comprehensive income. In 2024, it also includes a net $ 0.2 bn los s related to the early redemption of legacy securities. 2 Interest income is calculated using the effective interest method and comprises interest recognised on financial assets measured at either amortised cost or fair value through other comprehensive income. 3 Interest expense includes $ 60.1 bn (2024: $ 72.6 bn ; 2023: $ 62.1 bn ) of interest on financial instruments, excluding interest on debt instruments issued by HSBC for funding purposes that are designated under the fair value option to reduce an accounting mismatch and on derivatives managed in conjunction with those debt instruments included in interest expense. 4 In 2025, the amounts include a $ 0.1 bn (2024: $ 0.1 bn gain) mark-to-market gain on interest rate hedging of the portfolio of retained loans post sale of our retail banking operations in France and a $ 0.1 bn fair value loss on Grupo Financiero Galicia‘s (‘Galicia‘) American Depositary Receipts (‘ADRs‘) received as purchase consideration from the sale of our business in Argentina. In 2024, the amounts include a $ 0.3 bn gain (2023: $ 0.3 bn loss) on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada . 5 Gain recognised in respect of the acquisition of SVB UK. 6 In 2024, the amount includes a $ 1.0 bn loss on disposal and a $ 5.2 bn loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This was partly offset by a gain of $ 4.6 bn, inclusive of the recycling of $ 0.6 bn in foreign currency translation reserve losses and $ 0.4 bn of other reserves losses but excluding the $ 0.3 bn gain on the foreign exchange hedging (see footnote 4 above) on the sale of our banking business in Canada. The amount in 2023 primarily reflected losses due to restrictions impacting the recoverability of assets in Russia, partly offset by a gain on sale of our retail banking operations in France. 7 I ncludes a loss on net monetary positions of $ 0.2 bn (2024: $ 1.2 bn; 2023: $ 1.7 bn ) as a result of applying IAS 29 ‘Financial Reporting in Hyp erinflationary Economies’. 8 In 2025, the amounts include recycling of cumulative fair value losses of $ 1.5 bn relating to the French retained portfolio of home and certain other loans following the completion of its sale to a consortium comprising Rothesay Life plc and CCF and a loss of $ 1.1 bn inclusive of reserves recycling as a result of the dilution of our shareholding in BoCom. We have also recognised a $ 1.0 bn impairment loss following an impairment test on the carrying value of the Group’s investment in BoCom in ‘Impairment of interest in associate’. See Note 18 on pages 345 to 348 . 9 Also referred to as revenue. 10 Includes depreciation of the right-of-use assets of $ 0.7 bn (2024: $ 0.7 bn, 2023: $ 0.7 bn). HSBC Holdings plc Annual Report on Form 20-F 289 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Consolidated statement of comprehensive income for the year ended 31 December 2025 2025 2024 2023 $m $m $m Profit for the year 23,131 24,999 24,559 Other comprehensive income/(expense) Items that will be reclassified subsequently to profit or loss when specific conditions are met: Debt instruments at fair value through other comprehensive income 3,036 163 2,599 –  fair value gains/(losses) 1,525 41 2,381 –  fair value losses/(gains) transferred to the income statement on disposal 1,328 69 905 –  expected credit (recoveries)/losses recognised in the income statement ( 19 ) ( 6 ) 59 –  disposal of subsidiary 745 85 — –  income taxes ( 543 ) ( 26 ) ( 746 ) Cash flow hedges 1,773 ( 52 ) 2,953 –  fair value gains/(losses) 749 ( 282 ) 2,534 –  fair value (gains)/losses reclassified to the income statement 1,611 ( 135 ) 1,463 –  disposal of subsidiary — 262 — –  income taxes ( 587 ) 103 ( 1,044 ) Share of other comprehensive income/(expense) of associates and joint ventures 54 462 47 –  share for the year 110 462 47 –  fair value gains transferred to the income statement on disposal — — — –  other comprehensive income reclassified to the income statement on disposal of interest in an associate ( 56 ) — — Net finance income/(expenses) from insurance contracts ( 682 ) ( 142 ) ( 364 ) –  net finance expenses 7 ( 191 ) ( 491 ) –  disposal of subsidiary ( 687 ) — — –  income taxes ( 2 ) 49 127 Exchange differences 6,771 833 ( 204 ) –  foreign exchange losses reclassified to the income statement on disposal or dilution of a foreign operation 208 5,816 — –  other exchange differences 6,563 ( 4,983 ) ( 204 ) Items that will not be reclassified subsequently to profit or loss: Fair value gains on property revaluation 14 5 1 –  fair value gains 14 5 1 –  income taxes — — — Remeasurement of defined benefit asset/(liability) ( 184 ) ( 228 ) ( 314 ) –  before income taxes ( 190 ) ( 342 ) ( 413 ) –  income taxes 6 114 99 Changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk ( 479 ) ( 439 ) ( 1,219 ) –  before income taxes ( 642 ) ( 579 ) ( 1,617 ) –  income taxes 163 140 398 Equity instruments designated at fair value through other comprehensive income 98 99 ( 120 ) –  fair value gains/(losses) 127 141 ( 120 ) –  income taxes ( 29 ) ( 42 ) — Effects of hyperinflation 140 1,239 1,604 Other comprehensive income/(expense) for the year, net of tax 10,541 1,940 4,983 Total comprehensive income/(expense) for the year 33,672 26,939 29,542 Attributable to: –  ordinary shareholders of the parent company 31,478 24,833 27,397 –  other equity holders 1,183 1,062 1,101 –  non-controlling interests 1,011 1,044 1,044 Total comprehensive income/(expense) for the year 33,672 26,939 29,542 HSBC Holdings plc Annual Report on Form 20-F 290 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Consolidated balance sheet at 31 December 2025 At 31 Dec 2025 31 Dec 2024 Notes * $m $m Assets Cash and balances at central banks 242,859 267,674 Hong Kong Government certificates of indebtedness 44,063 42,293 Trading assets 11 366,153 314,842 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 14 133,063 115,769 Derivatives 15 237,740 268,637 Loans and advances to banks 108,462 102,039 Loans and advances to customers 988,399 930,658 Reverse repurchase agreements – non-trading 298,392 252,549 Financial investments 16 567,211 493,166 Assets held for sale 23 11,115 27,234 Prepayments, accrued income and other assets 22 184,794 152,740 Current tax assets 864 1,313 Interests in associates and joint ventures 18 29,577 28,909 Goodwill and intangible assets 21 13,107 12,384 Deferred tax assets 7 7,235 6,841 Total assets 3,233,034 3,017,048 Liabilities Hong Kong currency notes in circulation 44,063 42,293 Deposits by banks 97,952 73,997 Customer accounts 1,786,828 1,654,955 Repurchase agreements – non-trading 204,974 180,880 Trading liabilities 24 72,122 65,982 Financial liabilities designated at fair value 25 158,456 138,727 Derivatives 15 237,854 264,448 Debt securities in issue 26 99,675 105,785 Liabilities of disposal groups held for sale 23 23,382 29,011 Accruals, deferred income and other liabilities 27 142,123 130,340 Current tax liabilities 3,037 1,729 Insurance contract liabilities 4 122,955 107,629 Provisions 28 3,441 1,724 Deferred tax liabilities 7 2,100 1,317 Subordinated liabilities 29 28,406 25,958 Total liabilities 3,027,368 2,824,775 Equity Called up share capital 32 8,588 8,973 Share premium account 32 111 14,810 Other equity instruments 20,716 19,070 Other reserves ( 795 ) ( 10,282 ) Retained earnings 169,605 152,402 Total shareholders’ equity 198,225 184,973 Non-controlling interests 19 7,441 7,300 Total equity 205,666 192,273 Total liabilities and equity 3,233,034 3,017,048 * For Notes on the financial statements, see page 300 . The accompanying notes on pages 300 to 381 and the audited sections in the Risk review on pages 118 to 218 and ‘Directors’ remuneration report’ on pages 249 to 274 form an integral part of these financial statements. These financial statements were approved by the Board of Directors on 25 February 2026 and signed on its behalf by: Brendan Nelson Pam Kaur Group Chairman Group Chief Financial Officer HSBC Holdings plc Annual Report on Form 20-F 291 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Consolidated statement of changes in equity for the year ended 31 December 2025 Other reserves Called up share capital and share premium Other equity instru- ments Financial assets at FVOCI reserve Cash flow hedging reserve Foreign exchange reserve Merger and other reserves Insurance finance reserve 1 Retained earnings Total share- holders’ equity Non- controlling interests Total equity $m $m $m $m $m $m $m $m $m $m $m At 1 Jan 2025 23,783 19,070 ( 3,246 ) ( 1,079 ) ( 32,887 ) 26,328 602 152,402 184,973 7,300 192,273 Profit for the year — — — — — — — 22,285 22,285 846 23,131 Other comprehensive income (net of tax) — — 2,926 1,649 6,863 14 ( 602 ) ( 474 ) 10,376 165 10,541 –  debt instruments at fair value through other comprehensive income 2 — — 2,267 — — — — — 2,267 24 2,291 –  equity instruments designated at fair value through other comprehensive income — — 84 — — — — — 84 14 98 –  cash flow hedges — — — 1,700 — — — — 1,700 73 1,773 –  changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk — — — — — — — ( 479 ) ( 479 ) — ( 479 ) –  property revaluation — — — — — 14 — — 14 — 14 –  remeasurement of defined benefit asset/liability — — — — — — — ( 189 ) ( 189 ) 5 ( 184 ) –  share of other comprehensive income of associates and joint ventures — — — — — — — 110 110 — 110 –  effects of hyperinflation — — — — — — — 140 140 — 140 –  foreign exchange reclassified to income statement on disposal or dilution of a foreign operation 3 — — — — 208 — — — 208 — 208 –  other reserves reclassified to income statement on disposal or dilution of a foreign operation 4 — — 745 — — — ( 687 ) ( 56 ) 2 — 2 –  insurance finance income/ (expense) recognised in other comprehensive income — — — — — — 5 — 5 — 5 –  exchange differences — — ( 170 ) ( 51 ) 6,655 — 80 — 6,514 49 6,563 Total comprehensive income for the year — — 2,926 1,649 6,863 14 ( 602 ) 21,811 32,661 1,011 33,672 Shares issued under employee remuneration and share plans 116 — — — — — — ( 116 ) — — — Share premium reclassification to retained earnings 5 ( 14,810 ) — — — — — — 14,810 — — — Capital redemption reserves reclassification to retained earnings 5 — — — — — ( 1,755 ) — 1,755 — — — Capital securities issued 6 — 4,096 — — — — — — 4,096 — 4,096 Dividends to shareholders — — — — — — — ( 12,764 ) ( 12,764 ) ( 718 ) ( 13,482 ) Redemption of securities 7 — ( 2,450 ) — — — — — — ( 2,450 ) — ( 2,450 ) Cost of share-based payment arrangements — — — — — — — 621 621 — 621 Transfers — — — — — — — — — — — Share buy-back 9 — — — — — — — ( 8,039 ) ( 8,039 ) — ( 8,039 ) Cancellation of shares ( 390 ) — — — — 390 — — — — — Other movements 10 — — 1 — — 1 — ( 875 ) ( 873 ) ( 152 ) ( 1,025 ) At 31 Dec 2025 8,699 20,716 ( 319 ) 570 ( 26,024 ) 24,978 — 169,605 198,225 7,441 205,666 HSBC Holdings plc Annual Report on Form 20-F 292 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Consolidated statement of changes in equity (continued) for the year ended 31 December 2024 Other reserves Called up share capital and share premium Other equity instru- ments Financial assets at FVOCI reserve Cash flow hedging reserve Foreign exchange reserve Merger and other reserves Insurance finance reserve 1 Retained earnings Total share- holders’ equity Non- controlling interests Total equity $m $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 24,369 17,719 ( 3,507 ) ( 1,033 ) ( 33,753 ) 28,601 785 152,148 185,329 7,281 192,610 Profit for the year — — — — — — — 23,979 23,979 1,020 24,999 Other comprehensive income (net of tax) — — 259 ( 46 ) 863 5 ( 183 ) 1,018 1,916 24 1,940 –  debt instruments at fair value through other comprehensive income — — 62 — — — — — 62 16 78 –  equity instruments designated at fair value through other comprehensive income — — 75 — — — — — 75 24 99 –  cash flow hedges — — — ( 312 ) — — — — ( 312 ) ( 2 ) ( 314 ) –  changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk — — — — — — — ( 439 ) ( 439 ) — ( 439 ) –  property revaluation — — — — — 5 — — 5 — 5 –  remeasurement of defined benefit asset/liability — — — — — — — ( 244 ) ( 244 ) 16 ( 228 ) –  share of other comprehensive income of associates and joint ventures — — — — — — — 462 462 — 462 –  effects of hyperinflation — — — — — — — 1,239 1,239 — 1,239 –  foreign exchange reclassified to income statement on disposal or dilution of a foreign operation — — — — 5,816 — — — 5,816 — 5,816 –  other reserves reclassified to income statement on disposal or dilution of a foreign operation — — 85 262 — — — — 347 — 347 –  insurance finance income/ (expense) recognised in other comprehensive income — — — — — — ( 142 ) — ( 142 ) — ( 142 ) –  exchange differences — — 37 4 ( 4,953 ) — ( 41 ) — ( 4,953 ) ( 30 ) ( 4,983 ) Total comprehensive income for the year — — 259 ( 46 ) 863 5 ( 183 ) 24,997 25,895 1,044 26,939 Shares issued under employee remuneration and share plans 77 — — — — — — ( 77 ) — — — Share premium reclassification to retained earnings — — — — — — — — — — — Capital redemption reserves reclassification to retained earnings — — — — — — — — — — — Capital securities issued — 3,601 — — — — — — 3,601 — 3,601 Dividends to shareholders — — — — — — — ( 16,410 ) ( 16,410 ) ( 690 ) ( 17,100 ) Redemption of securities — ( 2,250 ) — — — — — — ( 2,250 ) — ( 2,250 ) Transfers 8 — — — — — ( 2,945 ) — 2,945 — — — Cost of share-based payment arrangements — — — — — — — 529 529 — 529 Share buy-back — — — — — — — ( 11,043 ) ( 11,043 ) — ( 11,043 ) Cancellation of shares ( 663 ) — — — — 663 — — — — — Other movements — — 2 — 3 4 — ( 687 ) ( 678 ) ( 335 ) ( 1,013 ) At 31 Dec 2024 23,783 19,070 ( 3,246 ) ( 1,079 ) ( 32,887 ) 26,328 602 152,402 184,973 7,300 192,273 HSBC Holdings plc Annual Report on Form 20-F 293 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Consolidated statement of changes in equity (continued) for the year ended 31 December 2023 Other reserves Called up share capital and share premium Other equity instru- ments Financial assets at FVOCI reserve Cash flow hedging reserve Foreign exchange reserve Merger and other reserves Insurance finance reserve 1 Retained earnings Total share- holders’ equity Non- controlling interests Total equity $m $m $m $m $m $m $m $m $m $m $m At 1 Jan 2023 24,811 19,746 ( 7,038 ) ( 3,808 ) ( 32,575 ) 33,209 1,079 142,409 177,833 7,364 185,197 Profit for the year — — — — — — — 23,533 23,533 1,026 24,559 Other comprehensive income (net of tax) — — 2,402 3,030 ( 211 ) 1 ( 371 ) 114 4,965 18 4,983 –  debt instruments at fair value through other comprehensive income — — 2,574 — — — — — 2,574 25 2,599 –  equity instruments designated at fair value through other comprehensive income — — ( 93 ) — — — — — ( 93 ) ( 27 ) ( 120 ) –  cash flow hedges — — — 2,919 — — — — 2,919 34 2,953 –  changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk — — — — — — — ( 1,220 ) ( 1,220 ) 1 ( 1,219 ) –  property revaluation — — — — — 1 — — 1 — 1 –  remeasurement of defined benefit asset/liability — — — — — — — ( 317 ) ( 317 ) 3 ( 314 ) –  share of other comprehensive income of associates and joint ventures — — — — — — 47 47 — 47 –  effects of hyperinflation — — — — — — — 1,604 1,604 — 1,604 –  insurance finance income/ (expense) recognised in other comprehensive income — — — — — — ( 364 ) — ( 364 ) — ( 364 ) –  exchange differences — — ( 79 ) 111 ( 211 ) — ( 7 ) — ( 186 ) ( 18 ) ( 204 ) Total comprehensive income for the year — — 2,402 3,030 ( 211 ) 1 ( 371 ) 23,647 28,498 1,044 29,542 Shares issued under employee remuneration and share plans 79 — — — — — — ( 79 ) — — — Share premium reclassification to retained earnings — — — — — — — — — — — Capital redemption reserves reclassification to retained earnings — — — — — — — — — — — Capital securities issued — 1,996 — — — — — — 1,996 — 1,996 Dividends to shareholders — — — — — — — ( 11,593 ) ( 11,593 ) ( 603 ) ( 12,196 ) Redemption of securities — ( 4,023 ) — — — — — 20 ( 4,003 ) — ( 4,003 ) Transfers 8 — — — — — ( 5,130 ) — 5,130 — — — Cost of share-based payment arrangements — — — — — — — 482 482 — 482 Share buy-back — — — — — — — ( 7,025 ) ( 7,025 ) — ( 7,025 ) Cancellation of shares ( 521 ) — — — — 521 — — — — — Other movements — — 1,129 ( 255 ) ( 967 ) — 77 ( 843 ) ( 859 ) ( 524 ) ( 1,383 ) At 31 Dec 2023 24,369 17,719 ( 3,507 ) ( 1,033 ) ( 33,753 ) 28,601 785 152,148 185,329 7,281 192,610 1 The insurance finance reserve reflects the impact of the adoption of the other comprehensive income option for our insurance business in France. Underlying assets supporting these contracts are measured at fair value through other comprehensive income. Under this option, only the amount that matches income or expenses recognised in profit or loss on underlying items is included in finance income or expenses, resulting in the elimination of income statement accounting mismatches. The remaining amount of finance income or expenses for these insurance contracts is recognised in other comprehensive income (‘OCI’). At 31 December 2025, the entire balance was reclassified to income statement following completion of the sale of the insurance business in France . 2 Includes recycling of fair value losses of $ 1.5 bn following completion of the sale of our retail banking operations in France. 3 Includes the recycling of a $ 0.2 bn foreign currency translation reserves loss as a result of the dilution of our shareholding in BoCom. 4 Includes insurance finance income reclassification of $ 0.7 bn and $ 0.7 bn fair value losses reclassification following completion of the sale of our insurance business in France . 5 On 24 June 2025, the High Court of Justice in England and Wales confirmed the cancellation of $ 14.8 bn standing to the credit of the HSBC Holdings' share premium account and $ 1.8 bn standing to the credit of its capital redemption reserve, following approval at HSBC Holdings' Annual General Meeting held on 2 May 2025 (the ‘Capital Reduction’). The Court Order confirming the Capital Reduction was registered by the Registrar of Companies on 10 July 2025, resulting in a combined total of $ 16.6 bn being reclassified to retained earnings with no impact on total equity. 6 HSBC Holdings issu ed $ 1.5 bn 6.950 % contingent convertible securities in February 2025, SGD 0.8 bn 5.000 % contingent convertible securities in March 2025 and $ 2.0 bn 7.050 % contingent convertible securities in June 2025. All instruments were recorded net of issuance costs. 7 In March 2025, HSBC Holdings redeemed its $ 2.45 bn 6.375 % contingent convertible securities. 8 At 31 December 2024, an impairment of $ 11.4 bn (2023: $ 5.5 bn) of HSBC Overseas Holdings (UK) Limited was recognised, resulting in a permitted transfer of $ 2.9 bn (2023: $ 5.1 bn) from the remaining historical associated merger reserve to retained earnings. 9 HSBC Holdings announced the following share buy-backs during the year: a share buy-back of up to $ 2.0 bn in February 2025, which was completed in April 2025; a share buy-back of up to $ 3.0 bn in May 2025, which was completed in July 2025 and a share buy-back of up to $ 3.0 bn in July 2025, which was completed in October 2025. 10 Includes $ 1.1 bn (2024: $ 0.5 bn; 2023: $ 0.6 bn) of shares bought by HSBC Holdings Employee Benefit Trust to satisfy obligation to deliver shares under employee share plans. HSBC Holdings plc Annual Report on Form 20-F 294 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Consolidated statement of cash flows for the year ended 31 December 2025 2025 2024 2023 $m $m $m Profit before tax 29,907 32,309 30,348 Adjustments for non-cash items: Depreciation, amortisation and impairment 4,916 4,080 3,466 Net loss from investing activities 2,614 180 1,213 Share of profit in associates and joint ventures ( 2,911 ) ( 2,912 ) ( 2,807 ) Impairment of interest in associate 1,000 — 3,000 (Gain)/loss on acquisition/disposal of subsidiaries, businesses, associates and joint ventures 93 1,704 ( 1,775 ) Change in expected credit losses gross of recoveries and other credit impairment charges 4,170 3,674 3,717 Provisions including pensions 2,103 299 266 Share-based payment expense 621 529 482 Other non-cash items included in profit before tax ( 4,690 ) ( 5,290 ) ( 4,299 ) Elimination of exchange differences 1 ( 34,682 ) 26,734 ( 10,678 ) Changes in operating assets and liabilities Change in net trading securities and derivatives ( 38,630 ) ( 41,385 ) ( 63,247 ) Change in loans and advances to banks and customers ( 74,071 ) 7,275 ( 14,145 ) Change in reverse repurchase agreements – non-trading ( 32,342 ) ( 4,227 ) ( 2,095 ) Change in financial assets designated and otherwise mandatorily measured at fair value ( 23,393 ) ( 20,662 ) ( 9,994 ) Change in other assets ( 38,389 ) 7,685 ( 10,254 ) Change in deposits by banks and customer accounts 168,907 44,237 45,021 Change in repurchase agreements – non-trading 24,094 8,700 43,366 Change in debt securities in issue ( 5,613 ) 11,942 11,945 Change in financial liabilities designated at fair value 46,129 ( 2,248 ) 10,097 Change in other liabilities 4,098 ( 1,603 ) 8,742 Dividends received from associates 1,040 1,062 1,067 Contributions paid to defined benefit plans ( 147 ) ( 167 ) ( 208 ) Tax paid ( 5,058 ) ( 6,611 ) ( 4,117 ) Net cash from operating activities 29,766 65,305 39,111 Purchase of financial investments ( 502,391 ) ( 523,454 ) ( 563,561 ) Proceeds from the sale and maturity of financial investments 2 470,309 453,502 504,174 Net cash flows from the purchase and sale of property, plant and equipment ( 1,447 ) ( 1,344 ) ( 1,145 ) Net cash flows from disposal of loan portfolio and customer accounts — — 623 Net investment in intangible assets ( 3,214 ) ( 2,542 ) ( 2,550 ) Net cash inflow on acquisition/disposal of subsidiaries, businesses, associates and joint ventures 3 1,126 9,891 1,239 Net cash outflow on acquisition/disposal of subsidiaries, businesses, associates and joint ventures 4 ( 1,451 ) ( 12,617 ) ( 1,692 ) Net cash from investing activities ( 37,068 ) ( 76,564 ) ( 62,912 ) Issue of ordinary share capital and other equity instruments 4,096 3,602 1,996 Share buy-back ( 9,091 ) ( 11,348 ) ( 5,812 ) Net purchases of own shares for market-making and investment purposes ( 1,123 ) ( 541 ) ( 614 ) Net cash flow from change in stake of subsidiaries ( 154 ) — ( 19 ) Redemption of preference shares and other equity instruments ( 2,450 ) ( 3,433 ) ( 4,003 ) Subordinated loan capital issued 3,834 4,361 5,237 Subordinated loan capital repaid 5 ( 3,591 ) ( 2,000 ) ( 2,147 ) Dividends paid to shareholders of the parent company and non-controlling interests ( 13,482 ) ( 17,100 ) ( 12,196 ) Net cash from financing activities ( 21,961 ) ( 26,459 ) ( 17,558 ) Net decrease in cash and cash equivalents ( 29,263 ) ( 37,718 ) ( 41,359 ) Cash and cash equivalents at 1 Jan 434,940 490,933 521,671 Exchange differences in respect of cash and cash equivalents 27,210 ( 18,275 ) 10,621 Cash and cash equivalents at 31 Dec 6 432,887 434,940 490,933 HSBC Holdings plc Annual Report on Form 20-F 295 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Consolidated statement of cash flows (continued) for the year ended 31 December 2025 2025 2024 2023 $m $m $m Cash and cash equivalents comprise: –  cash and balances at central banks 242,859 267,674 285,868 –  loans and advances to banks of one month or less 9 74,404 69,803 76,620 –  reverse repurchase agreements with banks of one month or less 71,790 58,290 64,341 –  treasury bills, other bills and certificates of deposit less than three months 8 41,232 27,307 33,303 –  cash collateral, net settlement accounts and items in course of collection from/transmission to other banks 2,214 9,827 14,866 –  cash and cash equivalents held for sale 7 387 2,039 15,935 Cash and cash equivalents at 31 Dec 6 432,887 434,940 490,933 Interest received was $ 99.6 bn (2024: $ 110.1 bn; 2023: $ 98.9 bn ) , interest paid was $ 68.8 bn (2024: $ 81.7 bn; 2023: $ 66.0 bn) and dividends received (excluding dividends received from associates, which are presented separately above) were $ 2.7 bn (2024: $ 2.8 bn; 2023: $ 1.9 bn). 1 Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details cannot be determined without unreasonable expense. 2 T his includes $ 5.8 bn from the sale of our retained portfolio of home and certain other loans in France. 3 In 2025, this includes $ 1 bn from the sale of our French life insurance business, and in 2024 this includes $ 9.3 bn from the sale of our banking business in Canada. 4 In 2025, this includes $ 1 bn from sale of our private banking business in Germany and $ 0.4 bn from sale of our retail banking operations in Bahrain and in 2024, this includes $ 10.6 bn from the sale of our retail banking operations in France and $ 1.8 bn from the sale of our business in Argentina . 5 Subordinated liabilities changes during the year are attributable to repayments of $( 3.6 )b n (2024: $( 2.0 )b n; 2023: $( 2.1 )b n) of securities. Non-cash changes during the year included foreign exchange gains/losses of $ 1.4 b n gain (2024: $ 1.6 b n gain; 2023: $ 0.6 b n loss) and fair value gains/losses of $ 0.7 b n gain (2024: $ 1.0 b n gain; 2023: $ 0.8 b n loss). 6 At 31 December 2025, $ 66.6 bn (2024: $ 50.4 bn ; 2023: $ 61.8 bn) was not available for use by HSBC due to a range of restrictions, including currency exchange. This includes $ 9.6 bn (2024: Nil ; 2023: Nil ) segregated for Hang Seng Bank privatisation funding purposes. Refer to Note 37 for more details. 7 Includes $ 0.3 bn (2024: $ 1.9 bn, 2023: $ 5.6 bn) of cash and balances at central bank s and $ 0.04 bn (2024: $ 0.1 bn, 2023: $ 10.5 bn ) of loans and advances to banks of one month or less. Th ere is nil ba lance in 2025 f or reverse repurchase agreements with banks of one month or less (2024: nil , 2023: $ 0.2 bn) and cash collateral, net settlement accounts and items in course of collection from/transmission to other banks (2024: nil , 2023: $ ( 0.4 ) bn). 8 The amount in this line is included in the ‘Financial investments’ and ‘Financial assets designated and otherwise mandatorily measured at fair value through profit or loss’ line items in the Consolidated balance sheet on page 290 . 9 The amount in this line is included in the ‘Loans and advances to banks’, ‘Financial investments’ and ‘Financial assets designated and otherwise mandatorily measured at fair value through profit or loss’ line items in the Consolidated balance sheet on page 290 . HSBC Holdings plc Annual Report on Form 20-F 296 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information HSBC Holdings income statement for the year ended 31 December 2025 2025 2024 2023 Notes * $m $m $m Net interest expense ( 5,455 ) ( 5,758 ) ( 5,339 ) –  interest income 2,632 3,053 2,864 –  interest expense ( 8,087 ) ( 8,811 ) ( 8,203 ) Net fee (expense)/income ( 2 ) ( 10 ) 2 Net income from financial instruments held for trading or managed on a fair value basis 3 182 2,899 1,063 Changes in fair value of designated debt and related derivatives 1 3 ( 1,041 ) ( 125 ) ( 1,468 ) Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss 3 2,835 2,086 3,692 Gains less losses from financial investments ( 3 ) 2 45 Dividend income from subsidiaries 2 23,816 33,846 16,824 Other operating income 228 276 332 Total operating income 20,560 33,216 15,151 Employee compensation and benefits 5 ( 31 ) ( 29 ) ( 15 ) General and administrative expenses ( 1,277 ) ( 1,148 ) ( 1,327 ) (Impairment) of subsidiaries/reversal of impairment 2 19 2,720 ( 11,490 ) ( 5,574 ) Total operating expenses 1,412 ( 12,667 ) ( 6,916 ) Profit before tax 21,972 20,549 8,235 Tax credit 639 499 977 Profit for the year 22,611 21,048 9,212 * For Notes on the financial statements, see page 300 . 1 The debt instruments, issued for funding purposes, are designated under the fair value option to reduce an accounting mismatch. 2 The amounts recorded within profit before tax with respect to dividend income from subsidiaries and impairment/reversal of impairment of subsidiaries are not subject to tax. HSBC Holdings statement of comprehensive income for the year ended 31 December 2025 2025 2024 2023 $m $m $m Profit for the year 22,611 21,048 9,212 Other comprehensive income/(expense) Items that will not be reclassified subsequently to profit or loss: Changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk 90 21 ( 124 ) –  before income taxes 117 32 ( 166 ) –  income taxes ( 27 ) ( 11 ) 42 Other comprehensive income/(expense) for the year, net of tax 90 21 ( 124 ) Total comprehensive income for the year 22,701 21,069 9,088 HSBC Holdings plc Annual Report on Form 20-F 297 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information HSBC Holdings balance sheet 31 Dec 2025 31 Dec 2024 Notes * $m $m Assets Cash and balances with HSBC undertakings 5,079 2,548 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value 67,217 61,286 Derivatives 15 1,942 3,054 Loans and advances to HSBC undertakings 40,500 37,677 Trading Assets — 709 Financial investments 16 15,470 10,328 Prepayments, accrued income and other assets 3,583 4,353 Current tax assets 419 305 Investments in subsidiaries 19 157,728 152,337 Intangible assets 140 162 Deferred tax assets 942 1,498 Total assets at 31 Dec 293,020 274,257 Liabilities and equity Liabilities Amounts owed to HSBC undertakings 89 231 Financial liabilities designated at fair value 25 52,907 41,582 Derivatives 15 3,451 5,340 Debt securities in issue 26 69,024 64,320 Accruals, deferred income and other liabilities 2,286 3,097 Subordinated liabilities 29 26,114 23,548 Total liabilities 153,871 138,118 Equity Called up share capital 32 8,588 8,973 Share premium account 32 111 14,810 Other equity instruments 32 20,635 19,024 Merger and other reserves 32,299 33,664 Retained earnings 77,516 59,668 Total equity 139,149 136,139 Total liabilities and equity at 31 Dec 293,020 274,257 * For Notes on the financial statements, see page 300 . The accompanying notes on pages 300 to 381 , the audited sections in the Risk review on pages 118 to 218 and ‘Directors’ remuneration report’ on pages 249 to 274 form an integral part of these financial statements. These financial statements were approved by the Board of Directors on 25 February 2026 and signed on its behalf by: Brendan Nelson Pam Kaur Group Chairman Group Chief Financial Officer HSBC Holdings plc Annual Report on Form 20-F 298 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information HSBC Holdings statement of changes in equity for the year ended 31 December 2025 Called up share capital Share premium Other equity instruments Retained earnings 1,2 Merger and other reserves Total shareholders’ equity $m $m $m $m $m $m At 1 Jan 2025 8,973 14,810 19,024 59,668 33,664 136,139 Profit for the year — — — 22,611 — 22,611 Other comprehensive income (net of tax) — — — 90 — 90 –  changes in fair value of financial liabilities designated at fair value due to movement in own credit risk — — — 90 — 90 Total comprehensive income for the year — — — 22,701 — 22,701 Shares issued and purchased under employee share plans 5 111 — ( 635 ) — ( 519 ) Capital securities issued 3 — — 4,061 — — 4,061 Purchase and cancellation of shares 4 ( 390 ) — — ( 8,039 ) 390 ( 8,039 ) Share premium reclassification to retained earnings 5 — ( 14,810 ) — 14,810 — — Capital redemption reserves reclassification to retained earnings 5 — — — 1,755 ( 1,755 ) — Dividends to shareholders — — — ( 12,764 ) — ( 12,764 ) Redemption of capital securities 6 — — ( 2,450 ) — — ( 2,450 ) Other movements — — — 20 — 20 At 31 Dec 2025 8,588 111 20,635 77,516 32,299 139,149 At 1 Jan 2024 9,631 14,738 17,703 63,288 35,946 141,306 Profit for the year — — — 21,048 — 21,048 Other comprehensive income (net of tax) — — — 21 — 21 –  changes in fair value of financial liabilities designated at fair value due to movement in own credit risk — — — 21 — 21 Total comprehensive income for the year — — — 21,069 — 21,069 Shares issued and purchased under employee share plans 5 72 — ( 181 ) — ( 104 ) Capital securities issued — — 3,571 — — 3,571 Purchase and cancellation of shares ( 663 ) — — ( 11,043 ) 663 ( 11,043 ) Dividends to shareholders — — — ( 16,410 ) — ( 16,410 ) Redemption of capital securities — — ( 2,250 ) — — ( 2,250 ) Transfers 7 — — — 2,945 ( 2,945 ) — Other movements — — — — — — At 31 Dec 2024 8,973 14,810 19,024 59,668 33,664 136,139 At 1 Jan 2023 10,147 14,664 19,746 67,996 40,555 153,108 Profit for the year — — — 9,212 — 9,212 Other comprehensive income (net of tax) — — — ( 124 ) — ( 124 ) –  changes in fair value of financial liabilities designated at fair value due to movement in own credit risk — — — ( 124 ) — ( 124 ) Total comprehensive income for the year — — — 9,088 — 9,088 Shares issued and purchased under employee share plans 5 74 — ( 328 ) — ( 249 ) Capital securities issued — — 1,980 — — 1,980 Purchase and cancellation of shares ( 521 ) — — ( 7,025 ) 521 ( 7,025 ) Dividends to shareholders — — — ( 11,593 ) — ( 11,593 ) Redemption of capital securities — — ( 4,023 ) 20 — ( 4,003 ) Transfers 7 — — — 5,130 ( 5,130 ) — Other movements — — — — — — At 31 Dec 2023 9,631 14,738 17,703 63,288 35,946 141,306 Dividends per ordinary share at 31 December 2025 were $ 0.66 (2024: $ 0.82 ; 2023: $ 0.53 ). 1 Retained earnings include unrealised profits from intercompany transactions and share-based payment reserves, which are excluded from distributable reserves. Distributable reserves include the distributable portions of retained earnings and the merger reserve. Distributable reserves are reduced by ordinary dividend payments, distributions on additional tier 1 instruments, share buy-backs and impairments in investments in subsidiaries. They are increased by profits and the realisation of retained earnings or merger reserves upon impairment of an associated investment in subsidiary. 2 At 31 December 2025, retained earnings included 35,354,337 own shares held. These include own shares held by HSBC Holdings for the benefit of beneficiaries within employee trusts for the settlement of shares expected to be delivered under employee share schemes or bonus plans. 3 HSBC Holdings issued $ 1.5 b n 6.950 % contingent convertible securities in February 2025, SGD 0.8 b n 5.000 % contingent convertible securities in March 2025 and $ 2.0 b n 7.050 % contingent convertible securities in June 2025. All instruments were recorded net of issuance cost. 4 HSBC Holdings announced the following share buy-backs during the year: a share buy-back of up to $ 2.0 b n in February 2025, which was completed in April 2025; a share buy-back of up to $ 3.0 b n in May 2025, which was completed in July 2025 and a share buy-back of up to $ 3.0 b n in July 2025, which was completed in October 2025. 5 On 24 June 2025, the High Court of Justice in England and Wales confirmed the cancellation of $ 14.8 b n standing to the credit of the HSBC Holdings’ share premium account and $ 1.8 b n standing to the credit of its capital redemption reserve, following approval at HSBC Holdings’ Annual General Meeting held on 2 May 2025 (the ‘Capital Reduction’). The Court Order confirming the Capital Reduction was registered by the Registrar of Companies on 10 July 2025, resulting in a combined total of $ 16.6 b n being reclassified to retained earnings with no impact on total equity. 6 In March 2025, HSBC Holdings redeemed its $ 2.45 b n 6.375 % contingent convertible securities. 7 At 31 December 2024, an impairment of $ 11.4 b n (2023: $ 5.5 b n) of HSBC Overseas Holdings (UK) Limited was recognised, resulting in a permitted transfer of $ 2.9 b n (2023: $ 5.1 b n) from the remaining historical associated merger reserve to retained earnings. HSBC Holdings plc Annual Report on Form 20-F 299 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information HSBC Holdings statement of cash flows for the year ended 31 December 2025 2025 2024 2023 $m $m $m Profit before tax 21,972 20,549 8,235 Adjustments for non-cash items ( 2,777 ) 11,721 5,611 –  depreciation, amortisation and impairment/expected credit losses ( 2,669 ) 11,552 5,629 –  share-based payment expense 1 1 — –  other non-cash items included in profit before tax ( 220 ) 53 ( 38 ) –  elimination of exchange differences 111 115 20 Changes in operating assets and liabilities Change in loans and advances to HSBC undertakings ( 2,927 ) ( 2,753 ) ( 1,267 ) Change in financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value ( 4,657 ) ( 1,978 ) ( 7,767 ) Change in net trading securities and net derivatives 600 ( 1,537 ) ( 529 ) Change in other assets 631 603 363 Change in debt securities in issue 883 469 1,964 Change in financial liabilities designated at fair value 1,288 292 3,096 Change in other liabilities 639 ( 1,897 ) 1,947 Tax received 1,071 1,691 577 Net cash from operating activities 16,723 27,160 12,230 Purchase of financial investments ( 22,636 ) ( 29,812 ) ( 7,803 ) Proceeds from the sale and maturity of financial investments 22,638 31,779 20,074 Net cash outflow from acquisition of or increase in stake of subsidiaries ( 5,148 ) ( 7,473 ) ( 2,517 ) Repayment of capital from subsidiaries 2,252 2,963 4,993 Net investment in intangible assets ( 29 ) ( 43 ) ( 46 ) Net cash from investing activities ( 2,923 ) ( 2,586 ) 14,701 Issue of ordinary share capital and other equity instruments 4,177 3,648 2,059 Redemption of preference shares and other equity instruments ( 2,450 ) ( 2,250 ) ( 4,003 ) Purchase of own shares ( 1,118 ) ( 532 ) ( 855 ) Share buy-backs ( 9,091 ) ( 11,204 ) ( 5,812 ) Subordinated loan capital issued 3,834 4,268 5,270 Subordinated loan capital repaid ( 3,284 ) ( 3,994 ) — Debt securities issued 25,469 16,102 17,180 Debt securities repaid ( 14,349 ) ( 18,179 ) ( 13,047 ) Dividends paid on ordinary shares ( 11,581 ) ( 15,348 ) ( 10,492 ) Dividends paid to holders of other equity instruments ( 1,183 ) ( 1,062 ) ( 1,101 ) Net cash from financing activities ( 9,576 ) ( 28,551 ) ( 10,801 ) Net increase/(decrease) in cash and cash equivalents 4,224 ( 3,977 ) 16,130 Cash and cash equivalents at 1 January 18,693 22,814 6,756 Exchange differences in respect of cash and cash equivalents 99 ( 144 ) ( 72 ) Cash and cash equivalents at 31 Dec 23,016 18,693 22,814 Cash and cash equivalents comprise: –  cash at bank with HSBC undertakings 5,079 2,548 7,029 –  cash collateral and net settlement accounts 1,702 2,544 3,422 –  loans and advances to HSBC undertakings of one month or less 6,250 8,500 — –  treasury and other eligible bills 9,985 5,101 12,363 Interest received was $ 6,059 m (2024: $ 6,624 m ; 2023: $ 5,695 m ), interest paid was $ 7,766 m (2024: $ 8,800 m ; 2023: $ 7,754 m ) and dividends received were $ 23,816 m (2024: $ 33,846 m ; 2023: $ 16,824 m ). HSBC Holdings plc Annual Report on Form 20-F 300 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Contents 300 1 Basis of preparation and material accounting policies 312 2 Net fee income 313 3 Net income/(expense) from financial instruments measured at fair value through profit or loss 313 4 Insurance business 320 5 Employee compensation and benefits 325 6 Auditor’s remuneration 326 7 Tax 328 8 Dividends 329 9 Earnings per share 329 10 Segmental analysis 332 11 Trading assets 332 12 Fair values of financial instruments carried at fair value 337 13 Fair values of financial instruments not carried at fair value 339 14 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 339 15 Derivatives 343 16 Financial investments 344 17 Assets pledged, collateral received and assets transferred 345 18 Interests in associates and joint ventures 349 19 Investments in subsidiaries 351 20 Structured entities 353 21 Goodwill and intangible assets 355 22 Prepayments, accrued income and other assets 355 23 Assets held for sale, liabilities of disposal groups held for sale and business acquisitions 357 24 Trading liabilities 357 25 Financial liabilities designated at fair value 358 26 Debt securities in issue 358 27 Accruals, deferred income and other liabilities 358 28 Provisions 359 29 Subordinated liabilities 360 30 Maturity analysis of assets, liabilities and off-balance sheet commitments 365 31 Offsetting of financial assets and financial liabilities 366 32 Called up share capital and other equity instruments 368 33 Contingent liabilities, contractual commitments and guarantees 369 34 Finance lease receivables 369 35 Legal proceedings and regulatory matters 371 36 Related party transactions 373 37 Events after the balance sheet date 373 38 HSBC Holdings’ subsidiaries, joint ventures and associates 1 Basis of preparation and material accounting policies 1.1 Basis of preparation (a) Compliance with International Financial Reporting Standards The consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings comply with UK-adopted international accounting standards and with the requirements of the Companies Act 2006, and have also applied international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. These financial statements are also prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IFRS Accounting Standards’), including interpretations issued by the IFRS Interpretations Committee, as there are no applicable differences from IFRS Accounting Standards for the periods presented. There were no unendorsed standards effective for the year ended 31 December 2025 affecting these consolidated and separate financial statements. IFRS Accounting Standards adopted during the year ended 31 December 2025 There were no new standards, amendments to standards or interpretations that had an effect on these financial statements. Accounting policies have been applied consistently. (b ) Differences between IFRS Accounting Standards and Hong Kong Financial Reporting Standards There are no significant differences between IFRS Accounting Standards and Hong Kong Financial Reporting Standards in terms of their application to HSBC, and consequently there would be no significant differences had the financial statements been prepared in accordance with Hong Kong Financial Reporting Standards. The ‘Notes on the financial statements’, taken together with the ‘Report of the Directors’ , include the aggregate of all disclosures necessary to satisfy IFRS Accounting Standards and Hong Kong Financial Reporting Standards. (c ) Future accounting developments Minor amendments to IFRS Accounting Standards The International Accounting Standards Board (‘IASB’) has published a number of minor amendments to IFRS Accounting Standards that are effective from 1 January 2026. HSBC expects they will have an insignificant effect, when adopted, on the consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings. Other amendments and new IFRS Accounting Standards Amendments to IFRS 9 ‘Financial Instruments’ and IFRS 7 ‘Financial Instruments: Disclosures’ In May 2024, the IASB issued amendments to IFRS 9 ‘Financial Instruments’ and IFRS 7 ‘Financial Instruments: Disclosures’, effective for annual reporting periods beginning on, or after, 1 January 2026. In addition to guidance as to when certain financial liabilities can be deemed settled when using an electronic payment system, the amendments also provide further clarification regarding the classification of financial assets that contain contractual terms that change the timing or amount of contractual cash flows, including those arising from ESG-related contingencies, and financial assets with certain non-recourse features. The Group does not expect any material impact from these amendments. IFRS 18 ‘Presentation and Disclosure in Financial Statements’ In April 2024, the IASB issued IFRS 18 ‘Presentation and Disclosure in Financial Statements’, effective for annual reporting periods beginning on or after 1 January 2027. The new accounting standard aims to give users of financial statements more transparent and comparable information about an entity’s financial performance. It will replace IAS 1 ‘Presentation of Financial Statements’ but carries over many requirements from that IFRS Accounting Standard unchanged. In addition, there are three sets of new requirements relating to the structure of the income statement, management-defined performance measures and the aggregation and disaggregation of financial information. HSBC Holdings plc Annual Report on Form 20-F 301 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements While IFRS 18 will not change recognition criteria or measurement bases, it will have an impact on presenting information in the financial statements, in particular the income statement and to a lesser extent the cash flow statement. HSBC are currently evaluating impacts and ensuring data readiness is adequate in anticipation of implementation. (d) Foreign currencies HSBC’s consolidated financial statements are presented in US dollars because the US dollar and currencies linked to it form the major currency bloc in which HSBC transacts and funds its business. The US dollar is also HSBC Holdings’ functional currency because the US dollar and currencies linked to it are the most significant currencies relevant to the underlying transactions, events and conditions of its subsidiaries, as well as representing a significant proportion of its funds generated from financing activities. Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange at the balance sheet date, except non-monetary assets and liabilities measured at historical cost, which are translated using the rate of exchange at the initial transaction date. Exchange differences are recognised in the income statement except where otherwise required such as exchange components of gains and losses on non-monetary items which are recognised in the income statement or other comprehensive income depending on where the gain or loss on the underlying item is presented. Except for subsidiaries operating in hyperinflationary economies, in the consolidated financial statements, the assets and liabilities of branches, subsidiaries, joint ventures and associates whose functional currency is not US dollars are translated into the Group’s presentation currency at the rate of exchange at the balance sheet date, while their results are translated into US dollars at the average rates of exchange for the reporting period. Exchange differences arising are recognised in other comprehensive income. On disposal of a foreign operation, exchange differences previously recognised in other comprehensive income are reclassified to the income statemen t. (e) Presentation of information Certain disclosures required by IFRS Accounting Standards have been included in the sections marked as (‘Audited’) in the Annual Report and Accounts 2025 as follows: – Disclosures concerning the nature and extent of risks relating to insurance contracts and financial instruments are included in the ‘Risk review’ on pages 118 to 218 . – The ‘Own funds disclosure’ is included in the ‘Risk review’ on page 192 . HSBC follows the UK Finance Disclosure Code. The UK Finance Disclosure Code aims to increase the quality and comparability of UK banks’ disclosures and sets out five disclosure principles together with supporting guidance agreed in 2010. In line with the principles of the UK Finance Disclosure Code, HSBC assesses good practice recommendations issued from time to time by relevant regulators and standard setters, and will assess the applicability and relevance of such guidance, enhancing disclosures where appropriate. (f) Critical estimates and judgements The preparation of financial information requires the use of estimates and judgements about future conditions. In view of the inherent uncertainties and the high level of subjectivity involved in the recognition or measurement of items, highlighted as the ‘critical estimates and judgements’ in section 1.2 below, it is possible that the outcomes in the next financial year could differ from those on which management’s estimates are based. This could result in materially different estimates and judgements from those reached by management for the purposes of these financial statements. Management’s selection of HSBC’s accounting policies that contain critical estimates and judgements reflects the materiality of the items to which the policies are applied and the high degree of judgement and estimation uncertainty involve d. Management has considered the impact of climate-related risks on HSBC’s financial position and performance. While the effects of climate change are a source of uncertainty, as at 31 December 2025 management did not consider there to be a material impact on our critical judgements and estimates from the physical, transition and other climate-related risks in the short to medium term. In particular, management has considered the known and observable potential impacts of climate-related risks of associated judgements and estimates in our value in use calculations. (g ) Going concern The financial statements are prepared on a going concern basis, as the Directors are satisfied that the Group and parent company have the resources to continue in business for the foreseeable future. In making this assessment, the Directors have considered a wide range of information relating to present and future conditions, including future projections of profitability, cash flows, capital requirements and capital resources. These considerations include stressed scenarios that reflect the uncertainty in the macroeconomic environment, including ongoing supply chain disruptions, uncertain inflation, rapidly changing interest rates, the impact of the Russia-Ukraine war and further conflict or military action in the Middle East , Venezuela or elsewhere; uncertainty around Hong Kong and mainland China’s CRE sectors; heightened strategic competition between the US and China, ongoing and potential cross-border investment and trade restrictions, changes to tariff rates, as well as the potential impacts from other top and emerging risks, including climate change, as well as the related impacts on profitability, capital and liquidity . 1.2 Summary of material ac counting policies (a) Consolidation and related policies Consolidation HSBC consolidates entities that it controls as demonstrated by power over the investee, exposure to variable returns, and the ability to use its power to affect the amount of its returns. Where an entity is governed by voting rights, HSBC generally has power leading to control when it holds – directly or indirectly – the necessary voting rights to pass resolutions by the governing body. In all other cases, the assessment of control is more complex and requires judgement of other factors, including contractual arrangements. Business combinations are accounted for using the acquisition method. The amount of non-controlling interest is measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. This election is made for each business combination. Investments in subsidiaries HSBC Holdings’ investments in subsidiaries are stated at cost less impairment losses. Where the investment in a subsidiary is designated in a fair value hedging relationship for foreign currency risk, the carrying value is adjusted for any associated hedge adjustment arising therefrom. HSBC Holdings plc Annual Report on Form 20-F 302 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Impairment testing of investments in subsidiaries is performed where there is an indication of impairment. Indicators of impairment include both external and internal sources of information. Similarly, assessments are made as to whether an impairment loss recognised in prior periods may no longer exist or may have decreased. Where this is the case, such an impairment loss is reversed if there has been a change in the estimate used to determine the relevant recoverable amount since the last impairment loss was recognised. Critical estimates and judgements Investments in subsidiaries are tested for impairment when there is an indication that the investment may be impaired, which involves estimations of value in use reflecting management’s best estimate of the future cash flows of the investment and the rates used to discount these cash flows, both of which are subject to uncertain factors as follows: Judgements Estimates – The accuracy of forecast cash flows is subject to a high degree of uncertainty in volatile market conditions. Where such circumstances are determined to exist, management re-tests for impairment or reversal more frequently than once a year when indicators exist. This ensures that the assumptions on which the cash flow forecasts are based continue to reflect current market conditions and management’s best estimate of future business prospects. – The future cash flows of each investment are sensitive to the cash flows projected for the periods for which detailed forecasts are available and to assumptions regarding the long-term pattern of sustainable cash flows thereafter. Forecasts are compared with actual performance and verifiable economic data, but they reflect management’s view of future business prospects at the time of the assessment. – The rates used to discount future expected cash flows can have a significant effect on their valuation, and are based on the costs of equity assigned to the investment. The cost of equity percentage is generally derived from a capital asset pricing model and the market implied cost of equity, which incorporates inputs reflecting a number of financial and economic variables, including the risk-free interest rate in the country concerned and a premium for the risk of the business being evaluated. These variables are subject to fluctuations in external market rates and economic conditions beyond management’s control. – Key assumptions used in estimating impairment in subsidiaries and their reversal where relevant are described in Note 19 . Interests in associates and joint arrangements Joint arrangements are investments in which HSBC, together with one or more parties, has joint control. Depending on HSBC’s rights and obligations, the joint arrangement is classified as either a joint operation or a joint venture. HSBC classifies investments in entities over which it has significant influence but not control or joint control as associates and accounts for them using the equity method. Under this method, the attributable share of net assets, results and reserves are included in the consolidated financial statements based on either financial statements made up to 31 December or pro-rated amounts adjusted for any material transactions or events occurring between the date the financial statements are available and 31 December. Investments in associates and joint ventures are assessed at each reporting date and tested for impairment when there is an indication that the investment may be impaired, by comparing the recoverable amount of the relevant investment to its carrying amount. Goodwill on acquisition of interests in joint ventures and associates is not tested separately for impairment, but is assessed as part of the carrying amount of the investment. Previously recognised impairments are assessed for reversal when there are indicators that they may no longer exist or have decreased. Any reversal, which may arise only from changes in estimates used to determine the prior impairment loss, is recognised to the extent that it does not increase the carrying amount above that had no impairment loss been previously recognised. Critical estimates and judgements The most significant critical estimates relate to the assessment of impairment or its reversal of our investment in Bank of Communications Co., Limited (‘BoCom’), which involves estimations of value in use: Judgements Estimates – The value in use calculation uses discounted cash flow projections based on management’s best estimate of future earnings available to ordinary shareholders prepared in accordance with IAS 36 ‘Impairment of Assets’. Those cash flows use estimates based on BoCom’s current condition and so do not include estimated cash flows arising from uncommitted future actions that may affect the performance of the investment which will be considered at the relevant time should they arise. – Key assumptions used in estimating BoCom’s value in use and the sensitivity of the value in use calculations to different assumptions are described in Note 18 . (b) Impairment of goodwill and other non-financial assets Goodwill Goodwill is allocated to cash-generating units (’CGUs’) for the purpose of impairment testing, which is undertaken at the lowest level at which goodwill is monitored for internal management purposes. Impairment testing is performed at least once a year, or whenever there is an indication of impairment, by comparing the recoverable amount of a CGU with its carrying amount. Goodwill is included in a disposal group if the disposal group is a CGU to which goodwill has been allocated or it is an operation within such a CGU. The amount of goodwill included in a disposal group is measured on the basis of the relative values of the operation disposed of and the portion of the CGU retained. Other non-financial assets Software under development is tested for impairment at least annually. Other non-financial assets are property, plant and equipment, intangible assets (excluding goodwill) and right-of-use assets. They are tested for impairment at the individual asset level when there is indication of impairment at that level, or at the CGU level for assets that do not have a recoverable amount at the individual asset level. In addition, impairment is also tested at the CGU level when there is indication of impairment at that level. Impairment testing compares the carrying amount of the non-financial asset or CGU with its recoverable amount, which is the higher of the fair value less costs of disposal or the value in use. The carrying amount of a CGU comprises the carrying amount of its assets and liabilities, including non-financial assets that are directly attributable to it and non-financial assets that can be allocated to it on a reasonable and consistent basis. Non- HSBC Holdings plc Annual Report on Form 20-F 303 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements financial assets that cannot be allocated to an individual CGU are tested for impairment at an appropriate grouping of CGUs. The recoverable amount of the CGU is the higher of the fair value less costs of disposal of the CGU, which is determined by independent and qualified valuers where relevant, and the value in use, which is calculated based on appropriate inputs (see Note 21 ). When the recoverable amount of a CGU is less than its carrying amount, an impairment loss is recognised in the income statement to the extent that the impairment can be allocated on a pro-rata basis to the non-financial assets by reducing their carrying amounts to the higher of their respective individual recoverable amount or nil. Impairment is not allocated to the financial assets in a CGU. Impairment losses recognised in prior periods for non-financial assets are reversed when there has been a change in the estimate used to determine the recoverable amount. The impairment loss is reversed to the extent that the carrying amount of the non-financial assets would not exceed the amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised in prior periods. Critical estimates and judgements The review of goodwill and non-financial assets for impairment reflects management’s best estimate of the future cash flows of the CGUs and the rates used to discount these cash flows, both of which are subject to uncertain factors as follows: Judgements Estimates – The accuracy of forecast cash flows is subject to a high degree of uncertainty in volatile market conditions. Where such circumstances are determined to exist, management re-tests goodwill for impairment more frequently than once a year when indicators of impairment exist. This ensures that the assumptions on which the cash flow forecasts are based continue to reflect current market conditions and management’s best estimate of future business prospects. – The future cash flows of the CGUs are sensitive to the cash flows projected for the periods for which detailed forecasts are available and to assumptions regarding the long-term pattern of sustainable cash flows thereafter. Forecasts are compared with actual performance and verifiable economic data, but they reflect management’s view of future business prospects at the time of the assessment. – The rates used to discount future expected cash flows can have a significant effect on their valuation, and are based on the costs of equity assigned to individual CGUs. The cost of equity percentage is generally derived from a capital asset pricing model and market implied cost of equity, which incorporates inputs reflecting a number of financial and economic variables, including the risk-free interest rate in the country concerned and a premium for the risk of the business being evaluated. These variables are subject to fluctuations in external market rates and economic conditions beyond management’s control. – Key assumptions used in estimating goodwill and non-financial asset impairment are described in Note 21 . The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of goodwill in the next financial year, but does consider this to be an area that is inherently judgemental. (c) Net operating income Interest income and expense Interest income and expense for all financial instruments, excluding those classified as held for trading or designated at fair value, is recognised in ‘Interest income’ and ‘Interest expense’ in the income statement using the effective interest method. However, as an exception to this, interest on debt instruments issued by HSBC for funding purposes that are designated under the fair value option to reduce an accounting mismatch and on derivatives managed in conjunction with those debt instruments is included in interest expense. Interest on credit-impaired financial assets is recognised by applying the effective interest rate to the amortised cost (i.e. gross carrying amount of the asset less allowance for expected credit losses). Non-interest income and expense HSBC generates fee income from services provided over time, such as account service and card fees, or when HSBC delivers a specific transaction at a point in time, such as broking services and import/export services. Where fees are variable, for example certain fund management and performance fees, such fees are recognised when the associated uncertainties are resolved and to the extent that it is highly probable that a significant reversal will not occur. HSBC acts as principal in the majority of contracts with customers, with the exception of broking services. For most brokerage trades, HSBC acts as agent in the transaction and recognises broking income net of fees payable to other parties in the arrangement. HSBC recognises fees earned on transaction-based arrangements at a point in time when it has provided the service to the customer. Where the contract requires services to be provided over time, income is recognised on a systematic basis over the life of the agreement. Where HSBC offers a package of services that contains multiple non-distinct performance obligations, such as those included in account service packages, the promised services are treated as a single performance obligation. If a package of services contains distinct performance obligations, the corresponding transaction price is allocated to each performance obligation based on the estimated stand-alone selling prices. Dividend income is recognised when the right to receive payment is established. Gains and losses from financial instruments measured as at fair value through profit or loss includes the following: – ‘Net income from financial instruments held for trading or managed on a fair value basis’: This comprises net trading activities, which includes all gains and losses from changes in the fair value of financial assets and financial liabilities held for trading and other financial instruments managed on a fair value basis, together with the related interest income, interest expense and dividend income, excluding the effect of changes in the credit risk of liabilities managed on a fair value basis. It also includes all gains and losses from changes in the fair value of derivatives that are managed in conjunction with financial assets and liabilities measured at fair value through profit or loss. – ‘Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss’: This includes all gains and losses from changes in the fair value, together with related interest income, interest expense and dividend income in respect of financial assets and liabilities measured at fair value through profit or loss, and those derivatives managed in conjunction with the above that can be separately identifiable from other trading derivatives. – Other gains and losses from financial instruments measured as at fair value through profit or loss include changes in the fair value of designated debt instruments under the fair value option and related derivatives where such designation reduces an accounting mismatch. Interest on such debt instruments and interest cash flows on related derivatives is presented in interest expense. Also included are the changes in fair value of other financial instruments mandatorily measured as at fair value through profit or loss which includes interest on instruments that fail the solely payments of principal and interest test, see (e) below. HSBC Holdings plc Annual Report on Form 20-F 304 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Insurance income and expense Insurance service result Insurance revenue reflects the consideration to which the Group expects to be entitled in exchange for the provision of coverage and other insurance contract services (excluding any investment components). Insurance service expenses comprise the incurred claims and other incurred insurance service expenses (excluding any investment components), and losses on onerous groups of contracts and reversals of such losses. Insurance finance income and expenses Insurance finance income and expense comprises the change in the carrying amount of the group of insurance contracts arising from the effects of the time value of money, financial risk and changes therein. For contracts using the variable fee approach (‘VFA’) measurement model, changes in the fair value of underlying items (excluding additions and withdrawals) are recognised in insurance finance income or expenses. (d) Valuation of financial instruments Financial instruments are initially recognised at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and on initial recognition is generally the transaction price. However, if there is a difference between the transaction price and the fair value of financial instruments whose fair value is based on a quoted price in an active market or a valuation technique that uses only data from observable markets, HSBC recognises the difference as a trading gain or loss at inception (a ‘day 1 gain or loss’). In all other cases, the entire day 1 gain or loss is deferred and recognised in the income statement over the life of the transaction until the transaction matures, is closed out, the valuation inputs become observable or HSBC enters into an offsetting transaction. The fair value of financial instruments is generally measured on an individual basis. However, in cases where HSBC manages a group of financial assets and liabilities according to its net market or credit risk exposure, the fair value of the group of financial instruments is measured on a net basis but the underlying financial assets and liabilities are presented separately in the financial statements, unless they satisfy the IFRS offsetting criteria. Financial instruments are classified into one of three fair value hierarchy levels, described in Note 12 , ‘Fair values of financial instruments carried at fair value‘. Critical estimates and judgements The majority of valuation techniques employ only observable market data. However, certain financial instruments are classified on the basis of valuation techniques that feature one or more significant market inputs that are unobservable, and for them, the measurement of fair value is more judgemental: Judgements Estimates – An instrument in its entirety is classified as valued using significant unobservable inputs if, in the opinion of management, greater than 5% of the instrument’s valuation is driven by unobservable inputs. – ‘Unobservable’ in this context means that there is little or no current market data available from which to determine the price at which an arm’s length transaction would be likely to occur. It generally does not mean that there is no data available at all upon which to base a determination of fair value (consensus pricing data may, for example, be used). – Details on the Group’s Level 3 financial instruments and the sensitivity of their valuation to the effect of applying reasonably possible alternative assumptions in determining their fair value are set out in Note 12 . (e) Financial instruments measured at amortised cost Financial assets that are held to collect the contractual cash flows and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest are measured at amortised cost. Such financial assets include most loans and advances to banks and customers and some debt securities. In addition, most financial liabilities are measured at amortised cost. HSBC accounts for regular way amortised cost financial instruments using trade date accounting. The carrying amount of these financial assets at initial recognition includes any directly attributable transactions costs. HSBC may commit to underwriting loans on fixed contractual terms for specified periods of time. When the loan arising from the lending commitment is expected to be sold shortly after origination, the commitment to lend is recorded as a derivative. When HSBC intends to hold the loan, the loan commitment is generally not recognised but is subject to expected credit loss considerations. Financial assets are reclassified only when the business model for their management changes. Such changes, which are expected to be infrequent, are determined by senior management as a result of external or internal changes and must be significant to operations and demonstrable to external parties. Reclassifications are applied prospectively from the first day of the first reporting period following the change of business model. Where a financial asset is reclassified out of the amortised cost measurement category and into the fair value through other comprehensive income measurement category its fair value is measured at the date of reclassification. Any gain or loss arising from a difference between the previous amortised cost and fair value is recognised in other comprehensive income. The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification. Non-trading reverse repurchase, repurchase and similar agreements When securities are sold subject to a commitment to repurchase them at a predetermined price (‘repos’), they remain on the balance sheet and a liability is recorded in respect of the consideration received. Securities purchased under commitments to resell (‘reverse repos’) are not recognised on the balance sheet and an asset is recorded in respect of the initial consideration paid. Non-trading repos and reverse repos are measured at amortised cost. The difference between the sale and repurchase price or between the purchase and resale price is treated as interest and recognised in net interest income over the life of the agreement. Contracts that are economically equivalent to reverse repo or repo agreements (such as sales or purchases of securities entered into together with total return swaps with the same counterparty) are accounted for similarly to, and presented together with, reverse repo or repo agreements. (f) Financial assets measured at fair value through other comprehensive income Financial assets managed within a business model that is achieved by both collecting contractual cash flows and selling and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest are measured at fair value through other comprehensive income (‘FVOCI’). These comprise primarily debt securities. They are generally recognised on trade date when HSBC enters into contractual arrangements to purchase and are generally derecognised when they are either sold or redeemed. They are subsequently remeasured at fair value with changes therein (except for those relating to impairment, interest income and foreign currency exchange gains and losses) recognised in other comprehensive income until the assets are sold. Upon disposal, the cumulative gains or losses in other comprehensive income are recognised in the income statement. Financial assets measured at FVOCI are included in impairment calculations and impairment is recognised in profit or loss. HSBC Holdings plc Annual Report on Form 20-F 305 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements (g) Equity securities measured at fair value with fair value movements presented in other comprehensive income Equity securities for which fair value movements are shown in other comprehensive income are business facilitation and other similar investments where HSBC holds the investments other than to generate a capital return. Dividends from such investments are recognised in profit or loss. Gains or losses on the derecognition of these equity securities are not transferred to profit or loss. Otherwise, equity securities are measured at fair value through profit or loss. (h) Financial instruments designated at fair value through profit or loss Financial instruments, other than those held for trading, are classified in this category if they meet one or more of the criteria set out below and are so designated irrevocably at inception: – The use of the designation removes or significantly reduces an accounting mismatch. – A group of financial assets and liabilities or a group of financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. – A financial liability that contains one or more non-closely related embedded derivatives. Designated financial assets are recognised when HSBC enters into contracts with counterparties, which is generally on trade date, and are normally derecognised when the rights to the cash flows expire or are transferred. Designated financial liabilities are recognised when HSBC enters into contracts with counterparties, which is generally on settlement date, and are normally derecognised when extinguished. Subsequent changes in fair values are recognised in the income statement except for the effect of changes in the liabilities’ credit risk, which is presented in ‘Other comprehensive income’, unless that treatment would create or enlarge an accounting mismatch in profit or loss. Under the above criteria, the main classes of financial instruments designated by HSBC are: – Debt instruments for funding purposes that are designated to reduce an accounting mismatch: The interest and/or foreign exchange exposure on certain fixed-rate debt securities issued has been matched with the interest and/or foreign exchange exposure on certain swaps as part of a documented risk management strategy. – Financial assets and financial liabilities under unit-linked and non-linked investment contracts: A contract under which HSBC does not accept significant insurance risk from another party is not classified as an insurance contract, other than investment contracts with discretionary participation features (‘DPF’), but is accounted for as a financial liability. Customer liabilities under linked and certain non-linked investment contracts issued by insurance subsidiaries are determined based on the fair value of the assets held in the linked funds or by a valuation method. The related financial assets and liabilities are managed and reported to management on a fair value basis. Designation at fair value of the financial assets and related liabilities allows changes in fair values to be recorded in the income statement and presented in the same line. – Financial liabilities that contain both deposit and derivative components: These financial liabilities are managed and their performance evaluated on a fair value basis. (i) Derivatives Derivatives are financial instruments that derive their value from the price of underlying items such as equities, interest rates or other indices. Derivatives are recognised initially and are subsequently measured at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. This includes embedded derivatives in financial liabilities, which are bifurcated from the host contract when they meet the definition of a derivative on a stand-alone basis. Where the derivatives are managed with debt securities issued by HSBC that are designated at fair value where doing so reduces an accounting mismatch, the contractual interest is shown in ‘Interest expense’ together with the interest payable on the issued debt. Hedge accounting When derivatives are not part of fair value designated relationships, if held for risk management purposes they are designated in hedge accounting relationships where the required criteria for documentation and hedge effectiveness are met. HSBC uses these derivatives or, where allowed, other non-derivative hedging instruments in fair value hedges, cash flow hedges or hedges of net investments in foreign operations as appropriate to the risk being hedged. Fair value hedge Fair value hedge accounting does not change the recording of gains and losses on derivatives and other hedging instruments, but results in recognising changes in the fair value of the hedged assets or liabilities attributable to the hedged risk that would not otherwise be recognised in the income statement. If a hedge relationship no longer meets the criteria for hedge accounting, hedge accounting is discontinued and the cumulative adjustment to the carrying amount of a hedged item for which the effective interest rate method is used is amortised to the income statement on a recalculated effective interest rate, unless the hedged item has been derecognised, in which case it is recognised in the income statement immediately. Cash flow hedge The effective portion of gains and losses on hedging instruments is recognised in other comprehensive income and the ineffective portion of the change in fair value of derivative hedging instruments that are part of a cash flow hedge relationship is recognised immediately in the income statement. The accumulated gains and losses recognised in other comprehensive income are reclassified to the income statement in the same periods in which the hedged item affects profit or loss. When a hedge relationship is discontinued, or partially discontinued, any cumulative gain or loss recognised in other comprehensive income remains in equity until the forecast transaction is recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to the income statement. Net investment hedge Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. The effective portion of gains and losses on the hedging instrument is recognised in other comprehensive income and other gains and losses are recognised immediately in the income statement. Gains and losses previously recognised in other comprehensive income are reclassified to the income statement on the disposal, or part-disposal, of the foreign operation. HSBC Holdings plc Annual Report on Form 20-F 306 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements (j ) Impairment of amortised cost and FVOCI financial assets Expected credit losses (‘ECL’) are recognised for loans and advances to banks and customers, non-trading reverse repurchase agreements, other financial assets held at amortised cost, debt instruments measured at FVOCI, and certain loan commitments and financial guarantee contracts. At initial recognition, an allowance (or provision in the case of some loan commitments and financial guarantees) is recognised for ECL resulting from possible default events within the next 12 months, or less, where the remaining life is less than 12 months (’12-month ECL’). In the event of a significant increase in credit risk, an allowance (or provision) is recognised for ECL resulting from all possible default events over the expected life of the financial instrument (‘lifetime ECL’). Financial assets where 12-month ECL is recognised are considered to be ‘stage 1’; financial assets which are considered to have experienced a significant increase in credit risk are in ‘stage 2’; and financial assets for which there is objective evidence of impairment, and so are considered to be in default or otherwise credit impaired are in ‘stage 3’. Purchased or originated credit- impaired financial assets (‘POCI’) are treated differently as set out below. Unimpaired and without significant increase in credit risk (stage 1) ECL resulting from default events that are possible within the next 12 months (‘12-month ECL’) are recognised for financial instruments that remain in stage 1. Significant increase in credit risk (stage 2) An assessment of whether credit risk has increased significantly since initial recognition is performed at each reporting period by considering the change in the risk of default occurring over the remaining life of the financial instrument. The assessment explicitly or implicitly compares the risk of default occurring at the reporting date compared with that at initial recognition, taking into account reasonable and supportable information, including information about past events, current conditions and future economic conditions. The assessment is unbiased, probability-weighted, and to the extent relevant, uses forward-looking information consistent with that used in the measurement of ECL. The analysis of credit risk is multifactor. The determination of whether a specific factor is relevant and its weight compared with other factors depends on the type of product, the characteristics of the financial instrument and the borrower, and the geographical region. Therefore, it is not possible to provide a single set of criteria that will determine what is considered to be a significant increase in credit risk, and these criteria will differ for different types of lending, particularly between retail and wholesale. However, unless identified at an earlier stage, all financial assets are deemed to have suffered a significant increase in credit risk when 30 days past due. In addition, wholesale loans that are individually assessed, which are typically corporate and commercial customers, and included on a watch or worry list, are included in stage 2. For wholesale portfolios, the quantitative comparison assesses default risk using a lifetime probability of default (‘PD’), which encompasses a wide range of information including the obligor’s customer risk rating (‘CRR’), macroeconomic condition forecasts and credit transition probabilities. For origination CRRs up to 3.3, significant increase in credit risk is measured by comparing the average PD for the remaining term estimated at origination with the equivalent estimation at the reporting date. The quantitative measure of significance varies depending on the credit quality at origination as follows: Origination CRR Significance trigger – PD to increase by 0.1–1.2 15 bps 2.1–3.3 30 bps For CRRs greater than 3.3 that are not impaired, a significant increase in credit risk is considered to have occurred when the origination PD has doubled. The significance of changes in PD was informed by expert credit risk judgement, referenced to historical credit migrations and to relative changes in external market rates. For loans originated prior to the implementation of IFRS 9, the origination PD does not include adjustments to reflect expectations of future macroeconomic conditions since these are not available without the use of hindsight. In the absence of this data, origination PD must be approximated assuming through-the-cycle PDs and through-the-cycle migration probabilities, consistent with the instrument’s underlying modelling approach and the CRR at origination. The quantitative comparison is supplemented with additional CRR deterioration-based thresholds, as set out in the table below: Origination CRR Additional significance criteria – number of CRR grade notches deterioration required to identify as significant credit deterioration (stage 2) (> or equal to) 0.1 5 notches 1.1–4.2 4 notches 4.3–5.1 3 notches 5.2–7.1 2 notches 7.2–8.2 1 notch 8.3 0 notches For retail portfolios, default risk is assessed using a reporting date 12-month PD derived from internal models, which incorporate all available information about the customer. This PD is adjusted for the effect of macroeconomic forecasts for periods longer than 12 months and is considered to be a reasonable approximation of a lifetime PD measure. Retail exposures are first segmented into homogenous portfolios, generally by country, product and brand. Within each portfolio, the stage 2 accounts include accounts with an adjusted 12-month PD greater than the average 12-month PD of loans in that portfolio 12 months before they become 30 days past due. The expert credit risk judgement is that no prior increase in credit risk is significant. This portfolio-specific threshold therefore identifies loans with a PD higher than would be expected from loans that are performing as originally expected and higher than that which would have been acceptable at origination. It therefore approximates a comparison of origination to reporting date PDs. We have implemented in the UK and continue to refine the retail transfer criteria approach to utilise a more relative approach for certain portfolios as additional data becomes available. These enhancements take advantage of the increase in origination-related data in the assessment of significant increases in credit risk by comparing remaining lifetime PD to the comparable remaining term lifetime PD at origination based on portfolio-specific origination segments. HSBC Holdings plc Annual Report on Form 20-F 307 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Credit impaired (stage 3) HSBC determines that a financial instrument is credit impaired and in stage 3 by considering relevant objective evidence, primarily whether contractual payments of either principal or interest are past due for more than 90 days, there are other indications that the borrower is unlikely to pay such as that a concession has been granted to the borrower for economic or legal reasons relating to the borrower’s financial condition, or the loan is otherwise considered to be in default. If such unlikeliness to pay is not identified at an earlier stage, it is deemed to occur when an exposure is 90 days past due. Therefore, the definitions of credit impaired and default are aligned as far as possible so that stage 3 represents all loans that are considered defaulted or otherwise credit impaired. Interest income is recognised by applying the effective interest rate to the amortised cost (i.e. gross carrying amount less allowance for ECL). Write-off Financial assets (and the related impairment allowances) are normally written off, either partially or in full, when there is no realistic prospect of recovery. Where loans are secured, this is generally after receipt of any proceeds from the realisation of security. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier. Forbearance Loans are identified as forborne and classified as either performing or non-performing when HSBC modifies the contractual terms due to financial difficulty of the borrower. Non-performing forborne loans are stage 3 and classified as non-performing until they meet the curing criteria, as specified by applicable credit risk policy (for example, when the loan is no longer in default and no other indicators of default have been present for at least 12 months). Any amount written off as a result of any modification of contractual terms upon entering forbearance would not be reversed. T he Group applies the EBA Guidelines on the application of definition of default for our retail portfolios, which affect credit risk policies and our reporting in respect of the status of loans as credit impaired principally due to forbearance (or curing thereof). Further details are provided under ‘Forborne loans and advances’ on page 141 . Performing forborne loans are initially stage 2 and remain classified as forborne until they meet applicable curing criteria (for example, they continue to not be in default and no other indicators of default are present for a period of at least 24 months). At this point, the loan is either stage 1 or stage 2 as determined by comparing the risk of a default occurring at the reporting date (based on the modified contractual terms) and the risk of a default occurring at initial recognition (based on the original, unmodified contractual terms) . A forborne loan is derecognised if the existing agreement is cancelled and a new agreement is made on substantially different terms, or if the terms of an existing agreement are modified such that the forborne loan is a substantially different financial instrument. Any new loans that arise following derecognition events in these circumstances would generally be classified as POCI and will continue to be disclosed as forborne. Loan modifications other than forborne loans Loan modifications that are not identified as forborne are considered to be commercial restructurings. Where a commercial restructuring results in a modification (whether legalised through an amendment to the existing terms or the issuance of a new loan contract) such that HSBC’s rights to the cash flows under the original contract have expired, the old loan is derecognised and the new loan is recognised at fair value. The rights to cash flows are generally considered to have expired if the commercial restructuring is at market rates and no payment-related concession has been provided. Modifications of certain higher credit risk wholesale loans are assessed for derecognition, having regard to changes in contractual terms that either individually or in combination are judged to result in a substantially different financial instrument. Mandatory and general offer loan modifications that are not borrower specific, for example market-wide customer relief programmes, generally do not result in derecognition, but their stage allocation is determined considering all available and supportable information under our ECL impairment policy. Purchased or originated credit impaired (‘POCI’) Financial assets that are purchased or originated at a deep discount that reflects the incurred credit losses are considered to be POCI. This population includes new financial instruments recognised in most cases following the derecognition of forborne loans. The amount of change in lifetime ECL for a POCI loan is recognised in profit or loss until the POCI loan is derecognised, even if the lifetime ECL are less than the amount of ECL included in the estimated cash flows on initial recognition. Movement between stages Financial assets can be transferred between the different categories (other than POCI) depending on their relative increase in credit risk since initial recognition. Financial instruments are transferred out of stage 2 if their credit risk is no longer considered to be significantly increased since initial recognition based on the assessments described above. In the case of non-performing forborne loans, such financial instruments are transferred out of stage 3 when they no longer exhibit any evidence of credit impairment and meet the curing criteria as described above. Measurement of ECL The assessment of credit risk and the estimation of ECL are unbiased and probability-weighted, and incorporate all available information which is relevant to the assessment including information about past events, current conditions and reasonable and supportable forecasts of future events and economic conditions at the reporting date. In addition, the estimation of ECL takes into account the time value of money and considers other factors such as climate-related risks. In general, HSBC calculates ECL using three main components: a probability of default (‘PD’), a loss given default (’LGD’) and the exposure at default (‘EAD’). The 12-month ECL is calculated by multiplying the 12-month PD, LGD and EAD. Lifetime ECL is calculated using the lifetime PD instead. The 12- month and lifetime PDs represent the probability of default occurring over the next 12 months and the remaining maturity of the instrument respectively. The EAD represents the expected balance at default, taking into account the repayment of principal and interest from the balance sheet date to the default event together with any expected drawdowns of committed facilities. The LGD represents expected losses on the EAD given the event of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to be realised and the time value of money. HSBC Holdings plc Annual Report on Form 20-F 308 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC makes use of the IRB framework where possible, with recalibration to meet the differing IFRS 9 requirements as set out in the following table: Model Regulatory capital IFRS 9 PD – Represents long-run average PD throughout a full economic cycle (for mortgage portfolios a hybrid approach, which sits between the extremes of point in time and through the cycle, is used for calculating long-run averages as required by the PRA) – Default backstop of 90+ days past due for all portfolios (includes unlikely to pay (‘UTP’) criteria in line with internal policy) – May be subject to a sovereign cap – Represents current portfolio quality and performance, adjusted for the impact of multiple forward-looking macroeconomic scenarios – Default backstop of 90+ days past due for all portfolios (includes UTP criteria in line with internal policy) EAD – Cannot be lower than current balance – Amortisation captured for term products – Future drawdown captured for revolving products LGD – Downturn LGD (consistent with losses we would expect to suffer during a severe but plausible economic downturn) – Regulatory floors may apply to mitigate risk of underestimating downturn LGD due to lack of historical data – Discounted using appropriate index (minimum 9%) – All collection costs included – LGD based on recent portfolio performance data and includes the expected impact of future economic conditions such as change in the value of collateral – No floors applied, discounted using the original effective interest rate – Only costs associated with selling collateral and certain third-party costs are included Other – Discounted back from point of default to balance sheet date While 12-month PDs are recalibrated from IRB models where possible, the lifetime PDs are determined by projecting the 12-month PD using a term structure. For the wholesale methodology, the lifetime PD also takes into account credit migration, i.e. a customer migrating through the CRR bands over its life. The ECL for wholesale stage 3 is determined primarily on an individual basis using a discounted cash flow (‘DCF’) methodology. The expected future cash flows are based on estimates as of the reporting date, reflecting reasonable and supportable assumptions and projections of future recoveries and expected future receipts of interest. Collateral is taken into account if it is likely that the recovery of the outstanding amount will include realisation of collateral based on its estimated fair value of collateral at the time of expected realisation, less costs for obtaining and selling the collateral. The cash flows are discounted at the original effective interest rate. For significant cases, cash flows under up to four different scenarios are probability-weighted by reference to the status of the borrower, economic scenarios applied more generally by the Group and judgement in relation to the likelihood of the work-out strategy succeeding or receivership being required. For less significant cases where an individual assessment is undertaken, the effect of different economic scenarios and work-out strategies results in an ECL calculation based on a most likely outcome which is adjusted to capture losses resulting from less likely but possible outcomes. For certain less significant cases, the bank may use an LGD-based modelled approach to ECL assessment, which factors in a range of economic scenarios. Period over which ECL is measured Expected credit loss is measured from the initial recognition of the financial asset. The maximum period considered when measuring ECL (be it 12- month or lifetime ECL) is the maximum contractual period over which HSBC is exposed to credit risk. However, where the financial instrument includes both a drawn and undrawn commitment and the contractual ability to demand repayment and cancel the undrawn commitment does not serve to limit HSBC’s exposure to credit risk to the contractual notice period, the contractual period does not determine the maximum period considered. Instead, ECL is measured over the period HSBC remains exposed to credit risk that is not mitigated by credit risk management actions. This applies to retail overdrafts and credit cards, where the period is the average time taken to realise the material losses for an account, determined on a portfolio basis. In addition, for these facilities it is not possible to identify the ECL on the loan commitment component separately from the financial asset component. As a result, the total ECL is recognised in the loss allowance for the financial asset unless the total ECL exceeds the gross carrying amount of the financial asset, in which case the ECL is recognised as a provision. For wholesale overdraft facilities, credit risk management actions are taken no less frequently than on an annual basis. Forward-looking economic inputs HSBC applies multiple forward-looking global economic scenarios determined with reference to external forecast distributions representative of its view of forecast economic conditions. This approach is considered sufficient to calculate unbiased expected credit losses in most economic environments. In certain economic environments, additional analysis may be necessary and may result in additional scenarios or adjustments, to reflect a range of possible economic outcomes sufficient for an unbiased estimate. The detailed methodology is disclosed in ‘Measurement uncertainty and sensitivity analysis of ECL estimates’ on page 148 . Critical estimates and judgements The calculation of the Group’s ECL under IFRS 9 requires the Group to make a number of judgements, assumptions and estimates. The most significant are set out below: Judgements Estimates – Defining what is considered to be a significant increase in credit risk – Determining the lifetime and point of initial recognition of overdrafts and credit cards – Selecting and calibrating the PD, LGD and EAD models, which support the calculations, including making reasonable and supportable judgements about how models react to current and future economic conditions – Selecting model inputs and economic forecasts, including determining whether sufficient and appropriately weighted economic forecasts are incorporated to calculate unbiased expected credit loss – Making management adjustments to account for late-breaking events, model and data limitations and deficiencies, and expert credit judgements – Selecting applicable recovery strategies for certain wholesale credit-impaired loans – The section ‘Measurement uncertainty and sensitivity analysis of ECL estimates’, marked as audited from page 148 , sets out the assumptions used in determining ECL, and provides an indication of the sensitivity of the result to the application of different weightings being applied to different economic assumptions HSBC Holdings plc Annual Report on Form 20-F 309 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements (k) Insurance contracts A contract is classified as an insurance contract where the Group accepts significant insurance risk from another party by agreeing to compensate that party if it is adversely affected by a specified uncertain future event. An insurance contract may also transfer financial risk, but is accounted for as an insurance contract if the insurance risk is significant. In addition, the Group issues investment contracts with discretionary participation features ('DPF’), which are also accounted under IFRS 17 ’Insurance Contracts’. Aggregation of insurance contracts Individual insurance contracts that are managed together and subject to similar risks are identified as a portfolio. Contracts that are managed together usually belong to the same product group, and have similar characteristics such as being subject to a similar pricing framework or similar product management, and are issued by the same legal entity. If a contract is exposed to more than one risk, the dominant risk of the contract is used to assess whether the contract features similar risks. Each portfolio is further separated by the contract’s expected profitability. The portfolios are split by their profitability into: (i) contracts that are onerous at initial recognition; (ii) contracts that at initial recognition have no significant possibility of becoming onerous subsequently; and (iii) the remaining contracts. These profitability groups are then divided by issue date, with most contracts the Group issues after the transition date being grouped into calendar quarter cohorts. For multi-currency groups of contracts, the Group considers its groups of contracts as being denominated in a single currency. The measurement of the insurance contract liability is based on groups of insurance contracts as established at initial recognition, and will include fulfilment cash flows as well as the contractual service margin (‘CSM’) representing the unearned profit. The Group’s accounting policy is to update the estimates used in the measurement on a year-to-date basis. Fulfilment cash flows The fulfilment cash flows comprise the following: Best estimates of future cash flows The cash flows within the contract boundary of each contract in the Group include amounts expected to be collected from premiums and payouts for claims, benefits and expenses, and are projected using a range of scenarios and assumptions in an unbiased way based on the Group’s demographic and operating experience along with external mortality data where the Group’s own experience data is not sufficiently large in size to be credible. Adjustment for the time value of money and financial risks associated with the future cash flows The estimates of future cash flows are adjusted to reflect the time value of money (i.e. discounting) and the financial risks to derive an expected present value. The Group generally makes use of stochastic modelling techniques in the estimation for products with options and guarantees. A bottom-up approach is used to determine the discount rate to be applied to a given set of expected future cash flows. This is derived as the sum of the risk-free yield and an illiquidity premium. The risk-free yield is determined based on observable market data, where such markets are considered to be deep, liquid and transparent. When information is not available, management judgement is applied to determine the appropriate risk-free yield. Illiquidity premiums reflect the liquidity characteristics of the associated insurance contracts. Risk adjustment for non-financial risk The risk adjustment reflects the compensation required for bearing the uncertainty about the amount and timing of future cash flows that arises from non-financial risk. The Group does not disaggregate changes in the risk adjustment between insurance service result (comprising insurance revenue and insurance service expense) and insurance finance income or expenses. All changes are included in the insurance service result. Measurement models The variable fee approach (‘VFA’) measurement model is used for most of the contracts issued by the Group, which is mandatory upon meeting the following eligibility criteria at inception: – the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items; – the Group expects to pay to the policyholder a substantial share of the fair value returns on the underlying items. The Group considers that a substantial share is a majority of returns; and – the Group expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items. The Group considers that a substantial proportion is a majority proportion of change on a present value probability- weighted average of all scenarios. For some contracts measured under VFA, the other comprehensive income (‘OCI’) option is used. The OCI option is applied where the underlying items held by the Group are not accounted for at fair value through profit or loss. Under this option, only the amount that matches income or expenses recognised in profit or loss on underlying items is included in finance income or expenses for these insurance contracts, and hence results in the elimination of accounting mismatches. The remaining amount of finance income or expenses for these insurance contracts issued for the period is recognised in OCI. In addition, the risk mitigation option is used for a number of economic offsets against the instruments that meet specific requirements. The remaining contracts issued and the reinsurance contracts held are accounted for under the general measurement model (‘GMM’). CSM and coverage units The CSM represents the unearned profit and results in no income or expense at initial recognition when the group of contracts is profitable. The CSM is adjusted at each subsequent reporting period for changes in fulfilment cash flows relating to future service (for example, changes in non- economic assumptions, including mortality and morbidity rates). For initial recognition of onerous groups of contracts and when groups of contracts become onerous subsequently, losses are recognised in insurance service expense immediately. For groups of contracts measured using the VFA, changes in the Group’s share of the underlying items, and economic experience and economic assumption changes adjust the CSM. However, under the risk mitigation option for VFA contracts, the changes in the fulfilment cash flows and the changes in the Group’s share in the fair value return on underlying items that the instruments mitigate are not adjusted in CSM but recognised in profit or loss. The risk mitigating instruments are primarily reinsurance contracts held. For groups of contracts measured using the GMM, changes in economic experience and economic assumption do not adjust the CSM, but are recognised in profit or loss as they arise. HSBC Holdings plc Annual Report on Form 20-F 310 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements The CSM is systematically recognised in insurance revenue to reflect the insurance contract services provided, based on the coverage units of the group of contracts. Coverage units are determined by the quantity of benefits and the expected coverage period of the contracts. The Group identifies the quantity of the benefits provided as follows: – Insurance coverage: This is based on the expected net policyholder insurance benefit at each period after allowance for decrements, where net policyholder insurance benefit refers to the amount of sum assured less the fund value or surrender value. – Investment services (including both investment-return service and investment-related service): This is based on a constant measure basis which reflects the provision of access for the policyholder to the facility. For contracts that provide both insurance coverage and investment services, coverage units are weighted according to the expected present value of the future cash outflows for each service. (l) Employee compensation and benefits Share-based payments HSBC enters into both equity-settled and cash-settled share-based payment arrangements with its employees as compensation for the provision of their services. The vesting period for these schemes may commence before the legal grant date if the employees have started to render services in respect of the award before the legal grant date, where there is a shared understanding of the terms and conditions of the arrangement. Expenses are recognised when the employee starts to render service to which the award relates. Cancellations result from the failure to meet a non-vesting condition during the vesting period, and are treated as an acceleration of vesting recognised immediately in the income statement. Failure to meet a vesting condition by the employee is not treated as a cancellation, and the amount of expense recognised for the award is adjusted to reflect the number of awards expected to vest. Post-employment benefit plans HSBC operates a number of pension schemes including defined benefit, defined contribution and other post-employment benefit schemes. Payments to defined contribution schemes are charged as an expense as the employees render service. Defined benefit pension obligations are calculated using the projected unit credit method. The net charge to the income statement mainly comprises the service cost and the net interest on the net defined benefit asset or liability, and is presented in operating expenses. Remeasurements of the net defined benefit asset or liability, which comprise actuarial gains and losses, return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. The net defined benefit asset or liability represents the present value of defined benefit obligations reduced by the fair value of plan assets, after applying the asset ceiling test, where the net defined benefit surplus is limited to the present value of available refunds and reductions in future contributions to the plan. The costs of obligations arising from other post-employment plans are accounted for on the same basis as defined benefit pension plans. Critical estimates and judgements The most significant critical estimates relate to the determination of key assumptions applied in calculating the defined benefit pension obligation for the principal plan. Judgements Estimates – A range of assumptions could be applied, and different assumptions could significantly alter the defined benefit obligation and the amounts recognised in profit or loss or OCI. – The calculation of the defined benefit pension obligation includes assumptions with regard to the discount rate, inflation rate, pension payments and deferred pensions, pay and mortality. Management determines these assumptions in consultation with the plan’s actuaries. – Key assumptions used in calculating the defined benefit pension obligation for the principal plan and the sensitivity of the calculation to different assumptions are described in Note 5 . (m) Tax Income tax comprises current tax and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case the tax is recognised in the same statement as the related item appears. Current tax is the tax expected to be payable on the taxable profit for the year and on any adjustment to tax payable in respect of previous years. HSBC provides for potential current tax liabilities that may arise on the basis of the amounts expected to be paid to the tax authorities. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet, and the amounts attributed to such assets and liabilities for tax purposes. Deferred tax is calculated using the tax rates expected to apply in the periods in which the assets will be realised or the liabilities settled. In assessing the probability and sufficiency of future taxable profit, management considers the availability of evidence to support the recognition of deferred tax assets, taking into account the inherent risks in long-term forecasting, including climate change-related, and drivers of recent history of tax losses where applicable. Management also considers the future reversal of existing taxable temporary differences and tax planning strategies, including corporate reorganisations. The Group has applied the exception available under IAS 12 to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. Current and deferred tax are calculated based on tax rates and laws enacted, or substantively enacted, by the balance sheet date. HSBC Holdings plc Annual Report on Form 20-F 311 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Critical estimates and judgements The recognition of deferred tax assets depends on judgements and estimates. Judgements Estimates – Specific judgements supporting deferred tax assets are described in Note 7 . – The recognition of deferred tax assets is sensitive to estimates of future cash flows projected for periods for which detailed forecasts are available and to assumptions regarding the long-term pattern of cash flows thereafter, on which forecasts of future taxable profit are based, and which affect the expected recovery periods and the pattern of utilisation of tax losses and tax credits. See Note 7 for further detail. The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of deferred tax assets in the next financial year, but does consider this to be an area that is inherently judgemental. (n) Provisions, contingent liabilities and guarantees Provisions Provisions are recognised when it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation that has arisen as a result of past events and for which a reliable estimate can be made. Critical estimates and judgements The recognition and measurement of provisions requires the Group to make a number of judgements, assumptions and estimates. The most significant are set out below: Judgements Estimates – Determining whether a present obligation exists. Professional advice is taken on the assessment of litigation and similar obligations. – Provisions for legal proceedings and regulatory matters typically require a higher degree of judgement than other types of provisions. When matters are at an early stage, accounting judgements can be difficult because of the high degree of uncertainty associated with determining whether a present obligation exists, and estimating the probability and amount of any outflows that may arise. As matters progress, management and legal advisers evaluate on an ongoing basis whether provisions should be recognised, revising previous estimates as appropriate. At more advanced stages, it is typically easier to make estimates around a better defined set of possible outcomes. – Provisions for legal proceedings and regulatory matters remain very sensitive to the assumptions used in the estimate. There could be a wider range of possible outcomes for any pending legal proceedings, investigations or inquiries. As a result it is often not practicable to quantify a range of possible outcomes for individual matters. It is also not practicable to meaningfully quantify ranges of potential outcomes in aggregate for these types of provisions because of the diverse nature and circumstances of such matters and the wide range of uncertainties involved. Contingent liabilities, contractual commitments and guarantees Contingent liabilities Contingent liabilities, which include certain guarantees and letters of credit pledged as collateral security, and contingent liabilities related to legal proceedings or regulatory matters, are not recognised in the financial statements but are disclosed unless the probability of settlement is remote. Financial guarantee contracts Liabilities under financial guarantee contracts that are not classified as insurance contracts are recorded initially at their fair value, which is generally the fee received or present value of the fee receivable. Subsequently, they are measured at the higher of the amount determined in accordance with IFRS 9 for ECL and the amount initially recognised less, where appropriate, any cumulative income recognised in accordance with IFRS 15. ( o) Non-current assets and disposal groups held for sale HSBC classifies non-current assets or disposal groups (including assets and liabilities) as held for sale when their carrying amounts will be recovered principally through sale rather than through continuing use. To be classified as held for sale, the non-current asset or disposal group must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups), and the sale must be highly probable. For a sale to be highly probable, the appropriate level of management must be committed to a plan to sell the asset (or disposal group) and an active programme to locate a buyer and complete the plan must have been initiated. Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the sale should be expected to qualify as a completed sale within one year from the date of classification and actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Held for sale assets and disposal groups are measured at the lower of their carrying amount and fair value less costs to sell except for those assets and liabilities that are not within the scope of the measurement requirements of IFRS 5. If the carrying amount of the non-current asset (or disposal group) is greater than the fair value less costs to sell, an impairment loss for any initial or subsequent write-down of the asset or disposal group to fair value less costs to sell is recognised. Any such impairment loss is first allocated against the non-current assets that are in scope of IFRS 5 for measurement. This first reduces the carrying amount of any goodwill allocated to the disposal group, and then to the other non-current assets of the disposal group pro rata on the basis of the carrying amount of each asset in the disposal group. Thereafter, any impairment loss in excess of the carrying amount of the non-current assets in scope of IFRS 5 for measurement is recognised against the total assets of the disposal group. HSBC Holdings plc Annual Report on Form 20-F 312 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 2 Net fee income Net fee income by global business 2025 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Funds under management 122 68 612 2,008 — 2,810 Cards 933 812 174 1,009 — 2,928 Credit facilities 54 239 1,098 62 — 1,453 Broking income 587 34 674 237 — 1,532 Account services 181 338 732 218 — 1,469 Unit trusts 424 — 2 936 — 1,362 Underwriting — — 752 — — 752 Global custody 104 — 823 37 — 964 Remittances 214 40 586 41 — 881 Imports/exports 158 43 374 — — 575 Insurance agency commission 64 18 2 331 — 415 Other 858 699 3,469 1,093 ( 3,652 ) 2,467 Fee income 3,699 2,291 9,298 5,972 ( 3,652 ) 17,608 Less: fee expense ( 923 ) ( 487 ) ( 4,809 ) ( 1,709 ) 3,663 ( 4,265 ) Net fee income 2,776 1,804 4,489 4,263 11 13,343 2024 Funds under management 108 68 511 1,752 — 2,439 Cards 907 754 156 1,026 — 2,843 Credit facilities 62 207 1,093 66 — 1,428 Broking income 322 33 723 212 — 1,290 Account services 177 354 721 247 — 1,499 Unit trusts 382 — 1 688 — 1,071 Underwriting — — 691 — — 691 Global custody 90 — 707 34 — 831 Remittances 196 43 544 42 — 825 Imports/exports 158 38 449 — — 645 Insurance agency commission 66 20 2 259 — 347 Other 699 728 3,199 899 ( 3,168 ) 2,357 Fee income 3,167 2,245 8,797 5,225 ( 3,168 ) 16,266 Less: fee expense ( 862 ) ( 424 ) ( 4,452 ) ( 1,368 ) 3,141 ( 3,965 ) Net fee income 2,305 1,821 4,345 3,857 ( 27 ) 12,301 2023 Funds under management 98 64 551 1,660 — 2,373 Cards 888 724 152 1,012 — 2,776 Credit facilities 83 182 1,240 69 — 1,574 Broking income 271 34 609 163 — 1,077 Account services 173 337 728 299 — 1,537 Unit trusts 281 — 1 456 — 738 Underwriting — — 586 — — 586 Global custody 86 — 732 46 — 864 Remittances 183 40 544 55 1 823 Imports/exports 155 35 434 — — 624 Insurance agency commission 76 13 2 207 — 298 Other 555 696 2,893 908 ( 2,706 ) 2,346 Fee income 2,849 2,125 8,472 4,875 ( 2,705 ) 15,616 Less: fee expense ( 818 ) ( 353 ) ( 3,988 ) ( 1,325 ) 2,713 ( 3,771 ) Net fee income 2,031 1,772 4,484 3,550 8 11,845 Net fee income included $ 6.8 b n of fees earned on financial assets that were not at fair value through profit or loss, other than amounts included in determining the effective interest rate (2024: $ 6.8 b n; 2023: $ 7.0 b n), $ 2.0 b n of fees payable on financial liabilities that were not at fair value through profit or loss, other than amounts included in determining the effective interest rate (2024: $ 2.0 b n; 2023: $ 1.9 b n), $ 4.0 b n of fees earned on trust and other fiduciary activities (2024: $ 3.5 b n; 2023: $ 3.5 b n) and $ 0.5 b n of fees payable relating to trust and other fiduciary activities (2024: $ 0.4 b n; 2023: $ 0.3 b n ). HSBC Holdings plc Annual Report on Form 20-F 313 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 3 Net income/(expense) from financial instruments measured at fair value through profit or loss 2025 2024 2023 $m $m $m Net income/(expense) arising on: Net trading activities 24,345 23,186 20,391 Other instruments managed on a fair value basis ( 4,663 ) ( 2,070 ) ( 3,730 ) Net income from financial instruments held for trading or managed on a fair value basis 19,682 21,116 16,661 Financial assets held to meet liabilities under insurance and investment contracts 11,612 6,210 8,086 Liabilities to customers under investment contracts ( 437 ) ( 309 ) ( 199 ) Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss 11,175 5,901 7,887 HSBC Holdings 2025 2024 2023 $m $m $m Net income/(expense) arising on: Net trading activities ( 1,709 ) 984 ( 546 ) Other instruments managed on a fair value basis 1,891 1,915 1,609 Net income from financial instruments held for trading or managed on a fair value basis 182 2,899 1,063 Derivatives managed in conjunction with HSBC Holdings-issued debt securities 212 93 426 Other changes in fair value ( 1,253 ) ( 218 ) ( 1,894 ) Changes in fair value of designated debt and related derivatives ( 1,041 ) ( 125 ) ( 1,468 ) Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss 2,835 2,086 3,692 Year ended 31 Dec 1,976 4,860 3,287 4 Insurance business Insurance service result 2025 2024 2023 Life direct participating and investment DPF contracts 1 Life other contracts 2 Total Life direct participating and investment DPF contracts 1 Life other contracts 2 Total Life direct participating and investment DPF contracts 1 Life other contracts 2 Total $m $m $m $m $m $m $m $m $m Insurance revenue Amounts relating to changes in liabilities for remaining coverage 2,212 619 2,831 1,890 566 2,456 1,626 470 2,096 –  Contractual service margin recognised for services provided 1,428 165 1,593 1,143 188 1,331 975 151 1,126 –  Change in risk adjustment for non-financial risk for risk expired 46 19 65 46 20 66 21 15 36 –  Expected incurred claims and other insurance service expenses 734 435 1,169 698 358 1,056 594 304 898 –  Other 4 — 4 3 — 3 36 — 36 Recovery of insurance acquisition cash flows 285 112 397 195 101 296 109 54 163 Total insurance revenue 2,497 731 3,228 2,085 667 2,752 1,735 524 2,259 Insurance service expenses Incurred claims and other insurance service expenses ( 488 ) ( 418 ) ( 906 ) ( 616 ) ( 428 ) ( 1,044 ) ( 615 ) ( 292 ) ( 907 ) Losses and reversal of losses on onerous contracts ( 36 ) ( 51 ) ( 87 ) ( 50 ) ( 73 ) ( 123 ) ( 32 ) ( 77 ) ( 109 ) Amortisation of insurance acquisition cash flows ( 285 ) ( 112 ) ( 397 ) ( 195 ) ( 101 ) ( 296 ) ( 109 ) ( 54 ) ( 163 ) Adjustments to liabilities for incurred claims ( 7 ) ( 6 ) ( 13 ) ( 6 ) 27 21 ( 1 ) ( 1 ) ( 2 ) Total insurance service expenses ( 816 ) ( 587 ) ( 1,403 ) ( 867 ) ( 575 ) ( 1,442 ) ( 757 ) ( 424 ) ( 1,181 ) Total insurance service result 3 1,681 144 1,825 1,218 92 1,310 978 100 1,078 1 ‘Life direct participating and investment DPF contracts’ are substantially measured under the variable fee approach measurement model. 2 ‘Life other contracts’ are measured under the general measurement model. 3 ‘Total insurance service result’ includes $ 0.2 bn (2024: nil ; 2023: nil ) earned by HSBC Life (UK) Limited and HSBC Assurances Vie (France) while they were classified as held for sale. For further details, see Note 23 . HSBC Holdings plc Annual Report on Form 20-F 314 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Net investment return 2025 2024 2023 Life direct participating and investment DPF contracts Life other contracts Total Life direct participating and investment DPF contracts Life other contracts Total Life direct participating and investment DPF contracts Life other contracts Total $m $m $m $m $m $m $m $m $m Investment return Amounts recognised in profit or loss 1 11,097 79 11,176 5,644 273 5,917 7,663 214 7,877 Amounts recognised in OCI ( 7 ) — ( 7 ) 185 — 185 493 — 493 Total investment return (memorandum) 11,090 79 11,169 5,829 273 6,102 8,156 214 8,370 Net finance expense Changes in fair value of underlying items of direct participating contracts ( 11,020 ) — ( 11,020 ) ( 5,805 ) — ( 5,805 ) ( 7,995 ) — ( 7,995 ) Effect of risk mitigation option ( 175 ) — ( 175 ) 44 — 44 ( 35 ) — ( 35 ) Interest accreted — ( 112 ) ( 112 ) — ( 110 ) ( 110 ) — ( 127 ) ( 127 ) Effect of changes in interest rates and other financial assumptions — 124 124 — ( 298 ) ( 298 ) ( 12 ) ( 121 ) ( 133 ) Effect of measuring changes in estimates at current rates and adjusting the CSM at rates on initial recognition — ( 7 ) ( 7 ) — — — — ( 10 ) ( 10 ) Total net finance expense from insurance contracts 2 ( 11,195 ) 5 ( 11,190 ) ( 5,761 ) ( 408 ) ( 6,169 ) ( 8,042 ) ( 258 ) ( 8,300 ) Represented by: Amounts recognised in profit or loss ( 11,202 ) 5 ( 11,197 ) ( 5,570 ) ( 408 ) ( 5,978 ) ( 7,551 ) ( 258 ) ( 7,809 ) Amounts recognised in OCI 7 — 7 ( 191 ) — ( 191 ) ( 491 ) — ( 491 ) Total net investment return ( 105 ) 84 ( 21 ) 68 ( 135 ) ( 67 ) 114 ( 44 ) 70 Represented by: Amounts recognised in profit or loss ( 105 ) 84 ( 21 ) 74 ( 135 ) ( 61 ) 112 ( 44 ) 68 Amounts recognised in OCI — — — ( 6 ) — ( 6 ) 2 — 2 1 Total Group ‘Net income/(expense) from assets and liabilities of insurance business, including related derivatives, measured at fair value through profit or loss’ of $ 11.2 bn gain (2024: $ 5.9 bn gain; 2023: $ 7.9 bn gain) includes returns on assets and liabilities supporting insurance policies of $ 11.0 bn (2024: $ 5.7 bn gain; 2023: $ 7.6 bn gain) and on shareholder assets of $ 0.2 bn (2024: $ 0.2 bn gain; 2023: $ 0.3 bn gain). 2 ‘Total net finance expense from insurance contracts’ includes $ 1.4 bn (2024: nil ; 2023: nil ) incurred by HSBC Life (UK) Limited and HSBC Assurances Vie (France) while they were classified as held for sale. For further details, see Note 23 . Reconciliation of amounts included in other comprehensive income for financial assets measured at fair value through other comprehensive income – assets supporting contracts measured under the modified retrospective approach 2025 2024 $m $m Balance at 1 Jan ( 736 ) ( 670 ) Net change in fair value ( 13 ) ( 153 ) Net amount reclassified to profit or loss — 3 Related income tax 4 39 Disposal of subsidiary 1 592 — Foreign exchange and other 153 45 Balance at 31 Dec — ( 736 ) 1 H SBC Assurances Vie (France) was sold on 31 October 2025. For further details, see Note 23 . HSBC Holdings plc Annual Report on Form 20-F 315 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Movements in carrying amounts of insurance contracts – analysis by remaining coverage and incurred claims 2025 Life direct participating and investment DPF contracts Life other contracts Liabilities for remaining coverage: Liabilities for remaining coverage: Excluding loss component Loss component Incurred claims Total Excluding loss component Loss component Incurred claims Total Total $m $m $m $m $m $m $m $m $m Opening assets ( 16 ) 1 1 ( 14 ) ( 177 ) ( 13 ) 72 ( 118 ) ( 132 ) Opening liabilities 103,045 146 223 103,414 3,748 224 243 4,215 107,629 Net opening balance at 1 Jan 103,029 147 224 103,400 3,571 211 315 4,097 107,497 Changes in the consolidated income statement and statement of comprehensive income 1 Insurance revenue Contracts under the fair value approach 2 ( 668 ) — — ( 668 ) ( 153 ) — — ( 153 ) ( 821 ) Contracts under the modified retrospective approach — — — — — — — — — Other contracts 3 ( 1,573 ) — — ( 1,573 ) ( 478 ) — — ( 478 ) ( 2,051 ) Total insurance revenue ( 2,241 ) — — ( 2,241 ) ( 631 ) — — ( 631 ) ( 2,872 ) Insurance service expenses Incurred claims and other insurance service expenses — ( 8 ) 413 405 — ( 34 ) 377 343 748 Amortisation of insurance acquisition cash flows 281 — — 281 103 — — 103 384 Losses and reversal of losses on onerous contracts — 39 — 39 — 41 — 41 80 Adjustments to liabilities for incurred claims — — 7 7 — — 18 18 25 Total insurance service expenses 281 31 420 732 103 7 395 505 1,237 Investment components ( 7,864 ) — 7,864 — ( 893 ) — 893 — — Insurance service result ( 9,824 ) 31 8,284 ( 1,509 ) ( 1,421 ) 7 1,288 ( 126 ) ( 1,635 ) Net finance expense from insurance contracts 4 9,812 — — 9,812 ( 7 ) 2 — ( 5 ) 9,807 Effect of movements in exchange rates 999 10 8 1,017 115 10 27 152 1,169 Total changes in the consolidated income statement and statement of comprehensive income 987 41 8,292 9,320 ( 1,313 ) 19 1,315 21 9,341 Cash flows Premiums received 19,125 — — 19,125 2,001 — — 2,001 21,126 Claims, other insurance service expenses paid and other cash flows 53 — ( 8,430 ) ( 8,377 ) 3 — ( 1,278 ) ( 1,275 ) ( 9,652 ) Insurance acquisition cash flows ( 1,109 ) — — ( 1,109 ) ( 106 ) — — ( 106 ) ( 1,215 ) Total cash flows 18,069 — ( 8,430 ) 9,639 1,898 — ( 1,278 ) 620 10,259 Other movements 5 ( 4,128 ) ( 13 ) 4 ( 4,137 ) ( 48 ) ( 3 ) ( 72 ) ( 123 ) ( 4,260 ) Net closing balance at 31 Dec 117,957 175 90 118,222 4,108 227 280 4,615 122,837 Closing assets ( 12 ) — — ( 12 ) ( 193 ) 47 40 ( 106 ) ( 118 ) Closing liabilities 117,969 175 90 118,234 4,301 180 240 4,721 122,955 Net closing balance at 31 Dec 117,957 175 90 118,222 4,108 227 280 4,615 122,837 HSBC Holdings plc Annual Report on Form 20-F 316 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Movements in carrying amounts of insurance contracts – analysis by remaining coverage and incurred claims (continued) 2024 Life direct participating and investment DPF contracts Life other contracts Liabilities for remaining coverage: Liabilities for remaining coverage: Excluding loss component Loss component Incurred claims Total Excluding loss component Loss component Incurred claims Total Total $m $m $m $m $m $m $m $m $m Opening assets ( 15 ) 1 1 ( 13 ) ( 279 ) ( 16 ) 56 ( 239 ) ( 252 ) Opening liabilities 116,546 121 370 117,037 3,400 191 223 3,814 120,851 Net opening balance at 1 Jan 116,531 122 371 117,024 3,121 175 279 3,575 120,599 Changes in the consolidated income statement and statement of comprehensive income 1 Insurance revenue Contracts under the fair value approach 2 ( 715 ) — — ( 715 ) ( 217 ) — — ( 217 ) ( 932 ) Contracts under the modified retrospective approach ( 141 ) — — ( 141 ) ( 18 ) — — ( 18 ) ( 159 ) Other contracts 3 ( 1,229 ) — — ( 1,229 ) ( 432 ) — — ( 432 ) ( 1,661 ) Total insurance revenue ( 2,085 ) — — ( 2,085 ) ( 667 ) — — ( 667 ) ( 2,752 ) Insurance service expenses Incurred claims and other insurance service expenses — ( 7 ) 623 616 — ( 49 ) 477 428 1,044 Amortisation of insurance acquisition cash flows 195 — — 195 101 — — 101 296 Losses and reversal of losses on onerous contracts — 50 — 50 — 73 — 73 123 Adjustments to liabilities for incurred claims — — 6 6 — — ( 27 ) ( 27 ) ( 21 ) Total insurance service expenses 195 43 629 867 101 24 450 575 1,442 Investment components ( 8,284 ) — 8,284 — ( 1,058 ) — 1,058 — — Insurance service result ( 10,174 ) 43 8,913 ( 1,218 ) ( 1,624 ) 24 1,508 ( 92 ) ( 1,310 ) Net finance expense from insurance contracts 4 5,720 41 — 5,761 405 3 — 408 6,169 Effect of movements in exchange rates ( 1,162 ) ( 5 ) ( 9 ) ( 1,176 ) ( 76 ) 1 ( 24 ) ( 99 ) ( 1,275 ) Total changes in the consolidated income statement and statement of comprehensive income ( 5,616 ) 79 8,904 3,367 ( 1,295 ) 28 1,484 217 3,584 Cash flows Premiums received 16,442 — — 16,442 1,950 — — 1,950 18,392 Claims, other insurance service expenses paid and other cash flows 2 — ( 9,020 ) ( 9,018 ) 2 — ( 1,508 ) ( 1,506 ) ( 10,524 ) Insurance acquisition cash flows ( 835 ) — — ( 835 ) ( 260 ) — — ( 260 ) ( 1,095 ) Total cash flows 15,609 — ( 9,020 ) 6,589 1,692 — ( 1,508 ) 184 6,773 Other movements 5 ( 23,495 ) ( 54 ) ( 31 ) ( 23,580 ) 53 8 60 121 ( 23,459 ) Net closing balance at 31 Dec 103,029 147 224 103,400 3,571 211 315 4,097 107,497 Closing assets ( 16 ) 1 1 ( 14 ) ( 177 ) ( 13 ) 72 ( 118 ) ( 132 ) Closing liabilities 103,045 146 223 103,414 3,748 224 243 4,215 107,629 Net closing balance at 31 Dec 103,029 147 224 103,400 3,571 211 315 4,097 107,497 1 ‘Changes in the consolidated income statement and statement of comprehensive income’ excludes ‘insurance service result’ gains of $ 0.2 bn (2024: nil ) and ‘net insurance finance expense’ losses of $ 1.4 bn (2024: nil ) reported in the consolidated income statement and statement of comprehensive income in respect of businesses classified as held for sale. 2 On transition to IFRS 17 the Group applied the full retrospective approach to new business written from 2018 at the earliest. Where applying the full retrospective approach was impracticable, the Group primarily applied the fair value approach. 3 ‘Other contracts’ are those contracts measured by applying IFRS 17 from inception of the contracts. These include contracts measured under the full retrospective approach at transition and contracts incepted after transition. 4 ‘Net finance expense from insurance contracts’ expense of $ 9.8 bn (2024: $ 6.2 bn expense) comprises expense of $ 9.8 bn (2024: $ 6.0 bn expense) recognised in the income statement and expense of nil (2024: $ 0.2 bn expense) recognised in other comprehensive income. 5 The ‘Other movements‘ reduction of $ 4.3 bn (2024: $ 23.5 bn reduction) in insurance contracts includes $ 4.4 bn in respect of HSBC Life (UK) Limited which was classified as held for sale in 2025 (2024: $ 21.8 bn in respect of HSBC Assurances Vie (France), which was classified as held for sale in 2024 with the sale completing on 31 October 2025). For further details, see Note 23 . HSBC Holdings plc Annual Report on Form 20-F 317 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Movements in carrying amounts of insurance contracts – analysis by measurement component 2025 Life direct participating and investment DPF contracts Life other contracts Estimates of present value of future cash flows and risk adjustment Contractual service margin Estimates of present value of future cash flows and risk adjustment Contractual service margin Contracts under the fair value approach Contracts under the modified retros- pective approach Other contracts Total Contracts under the fair value approach Contracts under the modified retros- pective approach Other contracts Total Total $m $m $m $m $m $m $m $m $m $m $m Opening assets ( 27 ) 3 — 10 ( 14 ) ( 359 ) 73 — 168 ( 118 ) ( 132 ) Opening liabilities 91,498 4,500 — 7,416 103,414 3,669 280 — 266 4,215 107,629 Net opening balance at 1 Jan 91,471 4,503 — 7,426 103,400 3,310 353 — 434 4,097 107,497 Changes in the consolidated income statement and statement of comprehensive income Changes that relate to current services Contractual service margin recognised for services provided — ( 502 ) — ( 846 ) ( 1,348 ) — ( 38 ) — ( 106 ) ( 144 ) ( 1,492 ) Change in risk adjustment for non-financial risk expired ( 36 ) — — — ( 36 ) ( 17 ) — — — ( 17 ) ( 53 ) Experience adjustments ( 167 ) — — — ( 167 ) ( 24 ) — — — ( 24 ) ( 191 ) Other movements recognised in insurance service result — 17 — ( 21 ) ( 4 ) — — — — — ( 4 ) Changes that relate to future services — — Contracts initially recognised in the year ( 3,556 ) — — 3,564 8 ( 183 ) — — 189 6 14 Changes in estimates that adjust the contractual service margin 1 ( 578 ) 285 — 293 — ( 31 ) ( 20 ) — 51 — — Changes in estimates that result in losses and reversal of losses on onerous contracts 31 — — — 31 35 — — — 35 66 Changes that relate to past services Adjustments to liabilities for incurred claims 7 — — — 7 18 — — — 18 25 Insurance service result ( 4,299 ) ( 200 ) — 2,990 ( 1,509 ) ( 202 ) ( 58 ) — 134 ( 126 ) ( 1,635 ) Net finance expense from insurance contracts 9,812 — — — 9,812 ( 35 ) 6 — 24 ( 5 ) 9,807 Other movements recognised in the statement of profit or loss — — — — — — — — — — — Effect of movements in exchange rates 934 43 — 40 1,017 106 17 — 29 152 1,169 Total changes in the consolidated income statement and statement of comprehensive income 6,447 ( 157 ) — 3,030 9,320 ( 131 ) ( 35 ) — 187 21 9,341 Cash flows Premiums received 19,125 — — — 19,125 2,001 — — — 2,001 21,126 Claims, other insurance service expenses paid and other cash flows ( 8,377 ) — — — ( 8,377 ) ( 1,275 ) — — — ( 1,275 ) ( 9,652 ) Insurance acquisition cash flows ( 1,109 ) — — — ( 1,109 ) ( 106 ) — — — ( 106 ) ( 1,215 ) Total cash flows 9,639 — — — 9,639 620 — — — 620 10,259 Other movements ( 4,058 ) 4 — ( 83 ) ( 4,137 ) ( 1 ) ( 71 ) — ( 51 ) ( 123 ) ( 4,260 ) Net closing balance at 31 Dec 103,499 4,350 — 10,373 118,222 3,798 247 — 570 4,615 122,837 Closing assets ( 21 ) 2 — 7 ( 12 ) ( 253 ) 27 — 120 ( 106 ) ( 118 ) Closing liabilities 103,520 4,348 — 10,366 118,234 4,051 220 — 450 4,721 122,955 Net closing balance at 31 Dec 103,499 4,350 — 10,373 118,222 3,798 247 — 570 4,615 122,837 HSBC Holdings plc Annual Report on Form 20-F 318 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Movements in carrying amounts of insurance contracts – analysis by measurement component (continued) 2024 Life direct participating and investment DPF contracts Life other contracts Estimates of present value of future cash flows and risk adjustment Contractual service margin Estimates of present value of future cash flows and risk adjustment Contractual service margin Contracts under the fair value approach Contracts under the modified retros- pective approach Other contracts Total Contracts under the fair value approach Contracts under the modified retros- pective approach Other contracts Total Total $m $m $m $m $m $m $m $m $m $m $m Opening assets ( 30 ) 3 — 14 ( 13 ) ( 339 ) 36 — 64 ( 239 ) ( 252 ) Opening liabilities 106,440 4,679 715 5,203 117,037 3,113 361 19 321 3,814 120,851 Net opening balance at 1 Jan 106,410 4,682 715 5,217 117,024 2,774 397 19 385 3,575 120,599 Changes in the consolidated income statement and statement of comprehensive income Changes that relate to current services Contractual service margin recognised for services provided — ( 488 ) ( 59 ) ( 596 ) ( 1,143 ) — ( 77 ) ( 6 ) ( 105 ) ( 188 ) ( 1,331 ) Change in risk adjustment for non- financial risk expired ( 46 ) — — — ( 46 ) ( 20 ) — — — ( 20 ) ( 66 ) Experience adjustments ( 82 ) — — — ( 82 ) 70 — — — 70 ( 12 ) Other movements recognised in insurance service result — 52 — ( 55 ) ( 3 ) — — — — — ( 3 ) Changes that relate to future services — — Contracts initially recognised in the year ( 2,384 ) — — 2,400 16 ( 201 ) — — 220 19 35 Changes in estimates that adjust contractual service margin 1 ( 914 ) 229 ( 6 ) 691 — ( 7 ) 30 7 ( 30 ) — — Changes in estimates that result in losses and reversal of losses on onerous contracts 34 — — — 34 54 — — — 54 88 Changes that relate to past services Adjustments to liabilities for incurred claims 6 — — — 6 ( 27 ) — — — ( 27 ) ( 21 ) Insurance service result ( 3,386 ) ( 207 ) ( 65 ) 2,440 ( 1,218 ) ( 131 ) ( 47 ) 1 85 ( 92 ) ( 1,310 ) Net finance expense from insurance contracts 5,761 — — — 5,761 380 12 — 16 408 6,169 Other movements recognised in the statement of profit or loss — — — — — — — — — — — Effect of movements in exchange rates ( 1,167 ) 51 ( 24 ) ( 36 ) ( 1,176 ) ( 50 ) ( 11 ) — ( 38 ) ( 99 ) ( 1,275 ) Total changes in the consolidated income statement and statement of comprehensive income 1,208 ( 156 ) ( 89 ) 2,404 3,367 199 ( 46 ) 1 63 217 3,584 Cash flows Premiums received 16,442 — — — 16,442 1,950 — — — 1,950 18,392 Claims, other insurance service expenses paid and other cash flows ( 9,018 ) — — — ( 9,018 ) ( 1,506 ) — — — ( 1,506 ) ( 10,524 ) Insurance acquisition cash flows ( 835 ) — — — ( 835 ) ( 260 ) — — — ( 260 ) ( 1,095 ) Total cash flows 6,589 — — — 6,589 184 — — — 184 6,773 Other movements ( 22,736 ) ( 23 ) ( 626 ) ( 195 ) ( 23,580 ) 153 2 ( 20 ) ( 14 ) 121 ( 23,459 ) Net closing balance at 31 Dec 91,471 4,503 — 7,426 103,400 3,310 353 — 434 4,097 107,497 Closing assets ( 27 ) 3 — 10 ( 14 ) ( 359 ) 73 — 168 ( 118 ) ( 132 ) Closing liabilities 91,498 4,500 — 7,416 103,414 3,669 280 — 266 4,215 107,629 Net closing balance at 31 Dec 91,471 4,503 — 7,426 103,400 3,310 353 — 434 4,097 107,497 1 ‘Changes in estimates that adjust contractual service margin’ increase of $ 0.6 bn (2024: $ 0.9 bn increase) includes an increase of $ 1.0 bn (2024: $ 0.7 bn increase) from economic factors and a decrease of $ 0.4 bn (2024: $ 0.3 bn increase) from non-economic factors. HSBC Holdings plc Annual Report on Form 20-F 319 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Effect of insurance contracts initially recognised in the year 2025 2024 Profitable contracts issued Onerous contracts issued Total Profitable contracts issued Onerous contracts issued Total $m $m $m $m $m $m Life direct participating and investment DPF contracts Estimates of present value of cash outflows 19,675 295 19,970 16,878 495 17,373 –  insurance acquisition cash flows 984 29 1,013 805 38 843 –  claims and other insurance service expenses payable 18,691 266 18,957 16,073 457 16,530 Estimates of present value of cash inflows ( 23,290 ) ( 288 ) ( 23,578 ) ( 19,326 ) ( 481 ) ( 19,807 ) Risk adjustment for non-financial risk 51 1 52 48 2 50 Contractual service margin 3,564 — 3,564 2,400 — 2,400 Losses recognised on initial recognition — ( 8 ) ( 8 ) — ( 16 ) ( 16 ) Life other contracts Estimates of present value of cash outflows 1,465 183 1,648 1,484 476 1,960 –  insurance acquisition cash flows 48 19 67 125 65 190 –  claims and other insurance service expenses payable 1,417 164 1,581 1,359 411 1,770 Estimates of present value of cash inflows ( 1,669 ) ( 180 ) ( 1,849 ) ( 1,731 ) ( 460 ) ( 2,191 ) Risk adjustment for non-financial risk 15 3 18 27 3 30 Contractual service margin 189 — 189 220 — 220 Losses recognised on initial recognition — ( 6 ) ( 6 ) — ( 19 ) ( 19 ) Present value of expected future cash flows of insurance contract liabilities and contractual service margin Less than 1 year 1–2 years 2–3 years 3–4 years 4–5 years 5–10 years 10–20 years Over 20 years Total $m $m $m $m $m $m $m $m $m 2025 Insurance liability future cash flows 1 Life direct participating and investment DPF contracts ( 3,766 ) ( 197 ) 3,701 3,086 3,567 12,420 17,439 66,799 103,049 Life other contracts 70 164 252 45 680 184 103 2,476 3,974 Insurance liability future cash flows at 31 Dec 2025 ( 3,696 ) ( 33 ) 3,953 3,131 4,247 12,604 17,542 69,275 107,023 Remaining contractual service margin 1 Life direct participating and investment DPF contracts 1,312 1,205 1,112 1,024 941 3,631 3,602 1,896 14,723 Life other contracts 121 94 77 65 54 173 150 83 817 Remaining contractual service margin at 31 Dec 2025 1,433 1,299 1,189 1,089 995 3,804 3,752 1,979 15,540 2024 Insurance liability future cash flows Life direct participating and investment DPF contracts ( 3,526 ) ( 455 ) 2,464 2,968 3,219 11,332 22,005 53,120 91,127 Life other contracts 971 ( 96 ) ( 101 ) ( 53 ) 7 63 279 2,529 3,599 Insurance liability future cash flows at 31 Dec 2024 ( 2,555 ) ( 551 ) 2,363 2,915 3,226 11,395 22,284 55,649 94,726 Remaining contractual service margin Life direct participating and investment DPF contracts 1,052 961 880 810 746 2,892 2,954 1,634 11,929 Life other contracts 128 104 85 69 53 159 127 62 787 Remaining contractual service margin at 31 Dec 2024 1,180 1,065 965 879 799 3,051 3,081 1,696 12,716 1 ‘Insurance liability future cash flows’ and ‘Remaining contractual service margin’ exclude insurance businesses classified as held for sale (2025: HSBC Life (UK) Limited; 2024: HSBC Assurances Vie (France)). For further details, see Note 23 . Discount rates The discount rates applied to expected future cash flows are determined through a bottom-up approach as set out in Note 1.2(k) ‘Summary of material accounting policies – Insurance contracts’ on page 301 . The blended average of discount rates used within our most material manufacturing entities are as follows: HSBC Life (International) Ltd Hang Seng Insurance Co Ltd HK$ $ HK$ $ At 31 Dec 2025 10-year discount rate (%) 3.74 4.78 3.85 4.82 20-year discount rate (%) 4.09 5.54 4.20 5.59 At 31 Dec 2024 10-year discount rate (%) 4.32 5.16 4.43 5.25 20-year discount rate (%) 4.42 5.51 4.53 5.60 Risk adjustment for non-financial risk The risk adjustment reflects the compensation required for bearing the uncertainty about the amount and timing of future cash flows that arise from non-financial risk. It is calculated as a 75 th percentile level of stress over a one-year period. The level of the stress is determined with reference to external regulatory stresses and internal economic capital stresses. For the main insurance manufacturing entity in these locations, the one-year 75 th percentile level of stress corresponds to the following percentiles based on an ultimate view of risk over all future years: – Asia-Pacific (Hong Kong): 59 th percentile (2024: 60 th percentile). – Europe (UK): 64 th percentile (2024: 60 th percentile, for HSBC Assurances Vie (France) that was sold during 2025). – Latin America (Mexico): 63 rd percentile (2024: 64 th percentile). HSBC Holdings plc Annual Report on Form 20-F 320 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 5 Employee compensation and benefits 2025 2024 2023 $m $m $m Employee compensation and benefits 1 19,553 18,465 18,220 Capitalised wages and salaries 2 1,959 1,688 1,403 Gross employee compensation and benefits for the year ended 31 Dec 21,512 20,153 19,623 Consists of: Wages and salaries 19,048 17,815 17,359 Social security costs 1,638 1,487 1,507 Post-employment benefits 826 851 757 Year ended 31 Dec 21,512 20,153 19,623 1 Employee compensation and benefits are presented in the income statement net of software capitalisation costs and costs included in the insurance contract fulfilment cash flow liabilities under IFRS 17. 2 Comprises $ 1.4 b n (2024: $ 1.1 b n; 2023: $ 1.0 b n) software capitalisation costs and $ 0.6 b n (2024: $ 0.6 b n; 2023: $ 0.4 b n) costs included in the insurance contract fulfilment cash flow liabilities under IFRS 17. Average number of persons employed by HSBC during the year by business segment 1 2025 2024 2023 Hong Kong 33,111 33,820 34,818 UK 32,177 32,791 32,391 Corporate and Institutional Banking 81,940 75,327 75,141 International Wealth and Premier Banking 70,674 78,616 84,855 Corporate Centre 369 374 347 Year ended 31 Dec 218,271 220,928 227,552 Average number of persons employed by HSBC during the year by legal entity 1 2025 2024 2023 HSBC UK Bank plc 19,841 20,034 20,415 HSBC Bank plc 10,210 11,456 14,809 The Hongkong and Shanghai Banking Corporation Limited 52,756 54,478 54,321 HSBC Bank Middle East Limited 3,424 3,344 3,316 HSBC North America Holdings Inc. 5,680 5,928 6,046 HSBC Bank Canada — 758 4,354 Grupo Financiero HSBC, S.A. de C.V. 13,382 13,928 14,412 Other trading entities 2 5,419 8,393 9,247 Holding companies, shared service centres and intra-Group eliminations 107,559 102,609 100,632 Year ended 31 Dec 218,271 220,928 227,552 1 Average number of persons employed represents the number of persons with contracts of service with the Group. This includes an average number of temporary persons employed of 6,147 (2024: 6,390 ; 2023: 7,207 ). Persons employed comprises individuals in front-line roles, those providing dedicated support services managed by business segments and an allocation of Corporate Centre individuals in proportion to business usage of shared support services and global infrastructure. During 2025, certain Operations individuals were transferred from Corporate Centre to business segments for which they provide dedicated services. 2 Other trading entities includes entities located in Türkiye, Egypt and Saudi Arabia. Reconciliation of total incentive awards granted to income statement charge 2025 2024 2023 $m $m $m Total incentive awards approved for the current year 3,930 3,800 3,774 Less: deferred bonuses awarded, expected to be recognised in future periods ( 430 ) ( 381 ) ( 353 ) Total incentives awarded and recognised in the current year 3,500 3,419 3,421 Add: current year charges for deferred bonuses from previous years 478 439 375 Other ( 11 ) ( 97 ) ( 56 ) Income statement charge for incentive awards 3,967 3,761 3,740 Share-based payments ‘Wages and salaries’ includes the effect of share-based payments arrangements, of which $ 608 m (2024: $ 529 m ; 2023: $ 482 m ) was equity settled, as follows: 2025 2024 2023 $m $m $m Conditional share awards 650 551 499 Savings-related and other share award option plans 18 27 23 Year ended 31 Dec 668 578 522 HSBC Holdings plc Annual Report on Form 20-F 321 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC share awards Award Policy Deferred share awards (including annual incentive awards, long-term incentive (‘LTI’) awards delivered in shares) An assessment of performance over the relevant period ending on 31 December is used to determine the amount of the award to be granted. – Deferred awards generally require employees to remain in employment over the vesting period and are generally not subject to performance conditions after the grant date. An exception to these are LTI awards, which are subject to performance conditions. – Deferred share awards generally vest over a period of three , four , five or seven years . – Vested shares may be subject to a retention requirement post-vesting. – Awards are generally subject to malus and clawback provisions. – LTI is subject to performance conditions. International Employee Share Purchase Plan (‘ShareMatch’) The plan was first introduced in Hong Kong in 2013 and now includes employees based in 30 jurisdictions. – Shares are purchased in the market each quarter up to a maximum value of £ 750 , or the equivalent in local currency. – Matching awards are added at a ratio of one free share for every three purchased. In mainland China, matching awards are settled in cash. – Matching awards vest subject to continued employment and the retention of the purchased shares for a maximum period of two years and nine months. Movement on HSBC share awards 2025 2024 Number Number (000s) (000s) Conditional share awards outstanding at 1 Jan 133,643 125,023 Additions during the year 55,411 84,930 Released in the year ( 63,652 ) ( 71,849 ) Forfeited in the year ( 5,756 ) ( 4,461 ) Conditional share awards outstanding at 31 Dec 119,646 133,643 Weighted average fair value of awards granted ($) 7.11 6.08 HSBC share option plans Main plans Policy Savings-related share option plans (‘Sharesave’) – From 2014, employees eligible for the UK plan could save up to £ 500 per month with the option to use the savings to acquire shares. – These are generally exercisable within six months following either the third or fifth anniversary of the commencement of a three -year or five -year contract, respectively. – The exercise price is set at a 20 % (2024: 20 % ) discount to the market value immediately preceding the date of invitation. Calculation of fair values The fair value of a share award is based on the share price at the grant date, adjusted for expected dividend yield (2025: 6.5 % ; 2024: 6.25 % ), risk- free rate (2025: 4.2 % p.a.; 2024: 4.2 % p.a.) and a simulated market condition factor. The fair values of share options are calculated using a Black- Scholes model. Movement on HSBC share option plans Savings-related share option plans Number WAEP 1 (000s) £ Outstanding at 1 Jan 2025 75,335 3.81 Granted during the year 2 11,901 7.61 Exercised during the year 3 ( 25,388 ) 3.00 Expired during the year ( 1,633 ) 4.85 Forfeited during the year ( 1,313 ) 4.37 Outstanding at 31 Dec 2025 58,902 4.84 –  of which exercisable 13,352 2.90 Weighted average remaining contractual life (years) 1.93 Outstanding at 1 Jan 2024 83,994 3.42 Granted during the year 2 11,845 5.30 Exercised during the year 3 ( 16,776 ) 2.94 Expired during the year ( 2,454 ) 4.20 Forfeited during the year ( 1,274 ) 3.48 Outstanding at 31 Dec 2024 75,335 3.81 –  of which exercisable 1,446 3.34 Weighted average remaining contractual life (years) 2.10 1 Weighted average exercise price. 2 The weighted average fair value of options granted during the year was $ 1.90 (2024: $ 1.66 ). 3 The weighted average share price at the date the options were exercised was $ 13.88 (2024: $ 8.54 ). HSBC Holdings plc Annual Report on Form 20-F 322 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Post-employment benefit plans The Group operates pension plans throughout the world for its employees. ‘Pension risk management processes’ on page 191 contains details of the policies and practices associated with these pension plans, some of which are defined benefit plans. The largest defined benefit plan is the HSBC UK section of the HSBC Bank (UK) Pension Scheme (‘the principal plan’), created as a result of the HSBC Bank (UK) Pension Scheme being fully sectionalised in 2018 to meet the requirements of the Banking Reform Act . For further details of how the trustee of the HSBC Bank (UK) Pension Scheme manages climate risk, see ’Managing climate risk’ on page 49 . HSBC holds on its balance sheet the net surplus or deficit, which is the difference between the fair value of plan assets and the discounted value of scheme liabilities at the balance sheet date for each plan. Surpluses are only recognised to the extent that they are recoverable through reduced contributions in the future or through potential future refunds from the schemes. In assessing whether a surplus is recoverable, HSBC has considered its current right to obtain a future refund or a reduction in future contributions together with the rights of third parties such as trustees. The principal plan The principal plan has a defined benefit section and a defined contribution section. The defined benefit section was closed to future benefit accrual in 2015, with defined benefits earned by employees at that date continuing to be linked to their salary while they remain employed by HSBC. The plan is overseen by an independent corporate trustee, who has a fiduciary responsibility for the operation of the plan. Its assets are held separately from the assets of the Group. The investment strategy of the plan is to hold the majority of assets in bonds, with the remainder in a diverse range of investments. It also includes some interest rate swaps to reduce interest rate risk, inflation swaps to reduce inflation risk and longevity swaps to reduce the impact of longer life expectancy. The principal plan is subject to the statutory funding objective requirements of the UK Pensions Act 2004, which requires that it be funded to at least the level of technical provisions (an actuarial estimate of the assets needed to provide for the benefits already built up under the plan). Where a funding valuation is carried out and identifies a deficit, the employer and trustee are required to agree to a deficit recovery plan. The latest funding valuation of the plan at 31 December 2022 was carried out by Towers Watson Limited, using the projected unit credit method. At that date, the market value of the plan’s assets was £ 23.9 b n ( $ 28.8 b n) and this exceeded the value placed on its liabilities on an ongoing basis by £ 3.7 b n ( $ 4.4 b n), giving a funding level of 118 % . These figures include defined contribution assets amounting to £ 3.0 b n ( $ 3.6 b n). The main differences between the assumptions used for assessing the defined benefit liabilities for this funding valuation and those used for IAS 19 are that an element of prudence is contained in the funding valuation assumptions for discount rate, inflation rate and life expectancy. The funding valuation is used to judge the amount of cash contributions the Group needs to put into the pension scheme. It will always be different to the IAS 19 accounting surplus, which is an accounting rule concerning employee benefits and shown on the balance sheet of our financial statements. The next funding valuation will be performed in 2026, with an effective date of 31 December 2025. The actuary also assessed the value of the liabilities if the plan were to have been stopped and an insurance company asked to secure all future pension payments. This is generally larger than the amount needed on the ongoing basis described above because an insurance company would use more prudent assumptions, which would allow for reserves and include an explicit allowance for the future administrative expenses of the plan. Under this approach, the amount of assets needed was estimated to be £ 21.3 b n ( $ 25.7 b n) at 31 December 2022. The trust deed gives the ability for HSBC UK to take a refund of surplus assets after the plan has been run down such that no further beneficiaries remain. In assessing whether a surplus is recoverable, HSBC UK has considered its right to obtain a future refund together with the rights of third parties such as trustees. On this basis, any net surplus in the HSBC UK section of the plan is recognised in HSBC UK’s financial statements and the Group’s financial statements. Income statement charge/(credit) 2025 2024 2023 $m $m $m Defined benefit pension plans ( 227 ) ( 116 ) ( 151 ) Defined contribution pension plans 1,015 933 874 Pension plans 788 817 723 Defined benefit and contribution healthcare plans 38 34 34 Year ended 31 Dec 826 851 757 Net assets/(liabilities) recognised on the balance sheet in respect of defined benefit plans Fair value of plan assets Present value of defined benefit obligations Effect of limit on plan surpluses Total $m $m $m $m Defined benefit pension plans 32,352 ( 24,858 ) — 7,494 Defined benefit healthcare plans 120 ( 439 ) — ( 319 ) At 31 Dec 2025 32,472 ( 25,297 ) — 7,175 Total employee benefit liabilities (within Note 27 ‘Accruals, deferred income and other liabilities’) ( 1,071 ) Total employee benefit assets (within Note 22 ‘Prepayments, accrued income and other assets’) 8,246 Defined benefit pension plans 30,758 ( 23,959 ) — 6,799 Defined benefit healthcare plans 80 ( 348 ) — ( 268 ) At 31 Dec 2024 30,838 ( 24,307 ) — 6,531 Total employee benefit liabilities (within Note 27 ‘Accruals, deferred income and other liabilities’) ( 1,017 ) Total employee benefit assets (within Note 22 ‘Prepayments, accrued income and other assets’) 7,548 HSBC Holdings plc Annual Report on Form 20-F 323 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC Holdings Employee compensation and benefit expense in respect of HSBC Holdings’ employees in 2025 amounted to $ 31 m (2024: $ 29 m ; 2023: $ 15 m ). The average number of persons employed during 2025 was 23 (2024: 28 ; 2023: 29 ). One employee is a member of a defined benefit pension plan. This employee is a member of the HSBC Bank (UK) Pension Scheme. HSBC Holdings pays contributions to this plan for its own employee in accordance with the schedules of contributions determined by the trustees of the plan and recognises these contributions as an expense as they fall due. Defined benefit pension plans Net asset/(liability) under defined benefit pension plans Fair value of plan assets Present value of defined benefit obligations Effect of the asset ceiling Net defined benefit asset/(liability) Principal 1 plan Other plans Principal 1 plan Other plans Principal 1 plan Other plans Principal 1 plan Other plans $m $m $m $m $m $m $m $m At 1 Jan 2025 23,652 7,106 ( 17,223 ) ( 6,736 ) — — 6,429 370 Service cost — — ( 12 ) ( 127 ) — — ( 12 ) ( 127 ) –  current service cost — — ( 11 ) ( 112 ) — — ( 11 ) ( 112 ) –  past service cost and gains/(losses) from settlements — — ( 1 ) ( 15 ) — — ( 1 ) ( 15 ) Net interest income/(cost) on the net defined benefit asset/ (liability) 1,344 312 ( 970 ) ( 281 ) — — 374 31 Remeasurement effects recognised in other comprehensive income ( 469 ) 75 324 ( 65 ) — — ( 145 ) 10 –  return on plan assets (excluding interest income) ( 469 ) 75 — — — — ( 469 ) 75 –  actuarial gains/(losses) financial assumptions — — 464 ( 57 ) — — 464 ( 57 ) –  actuarial gains/(losses) demographic assumptions — — 22 3 — — 22 3 –  actuarial gains/(losses) experience adjustments — — ( 162 ) ( 11 ) — — ( 162 ) ( 11 ) –  other changes — — — — — — — — Exchange differences 1,631 241 ( 1,183 ) ( 218 ) — — 448 23 Benefits paid ( 1,116 ) ( 530 ) 1,116 608 — — — 78 Other movements 2 ( 19 ) 125 ( 20 ) ( 71 ) — — ( 39 ) 54 At 31 Dec 2025 25,023 7,329 ( 17,968 ) ( 6,890 ) — — 7,055 439 At 1 Jan 2024 26,590 7,307 ( 19,782 ) ( 7,229 ) — — 6,808 78 Service cost — ( 1 ) ( 35 ) ( 144 ) — — ( 35 ) ( 145 ) –  current service cost — — ( 9 ) ( 140 ) — — ( 9 ) ( 140 ) –  past service cost and losses from settlements — ( 1 ) ( 26 ) ( 4 ) — — ( 26 ) ( 5 ) Net interest income/(cost) on the net defined benefit asset/ (liability) 1,213 277 ( 896 ) ( 265 ) — — 317 12 Remeasurement effects recognised in other comprehensive income ( 2,665 ) ( 6 ) 2,156 186 — — ( 509 ) 180 –  return on plan assets (excluding interest income) ( 2,665 ) ( 6 ) — — — — ( 2,665 ) ( 6 ) –  actuarial gains/(losses) financial assumptions — — 1,771 204 — — 1,771 204 –  actuarial gains/(losses) demographic assumptions — — 161 ( 5 ) — — 161 ( 5 ) –  actuarial gains/(losses) experience adjustments — — 224 ( 13 ) — — 224 ( 13 ) –  other changes — — — — — — — — Exchange differences ( 387 ) ( 145 ) 281 191 — — ( 106 ) 46 Benefits paid ( 1,082 ) ( 496 ) 1,082 561 — — — 65 Other movements 2 ( 17 ) 170 ( 29 ) ( 36 ) — — ( 46 ) 134 At 31 Dec 2024 23,652 7,106 ( 17,223 ) ( 6,736 ) — — 6,429 370 1 For further details of the principal plan, see page 322 . 2 O ther movements include contributions by HSBC, contributions by employees, administrative costs and taxes paid by plan. HSBC expects to make $ 109 m of contributions to defined benefit pension plans during 2026, consisting of $ nil for the principal plan and $ 109 m for other plans. Benefits expected to be paid from the plans to retirees over each of the next five years, and in aggregate for the five years thereafter, are as follows: Benefits expected to be paid from plans 2026 2027 2028 2029 2030 2031-2035 $m $m $m $m $m $m The principal plan 1,2 1,170 1,203 1,239 1,275 1,313 7,175 Other plans 1 436 436 437 433 437 2,259 1 The duration of the defined benefit obligation i s 11.4 years for the principal plan under the disclosure assumptions adopted (2024: 11.8 years) and 9.7 years for all other plans combined (2024: 9.8 years ). 2 For further details of the principal plan, see page 322 . HSBC Holdings plc Annual Report on Form 20-F 324 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Fair value of plan assets by asset classes 31 Dec 2025 31 Dec 2024 Value Quoted market price in active market No quoted market price in active market Thereof HSBC 1 Value Quoted market price in active market No quoted market price in active market Thereof HSBC 1 $m $m $m $m $m $m $m $m The principal plan 2 Fair value of plan assets 25,023 13,768 11,255 350 23,652 13,903 9,749 421 –  equities 58 — 58 — 65 — 65 — –  bonds fixed income 5,964 5,471 493 — 5,864 5,372 492 — –  bonds index-linked 7,863 7,863 — — 8,253 8,253 — — –  bonds other — — — — — — — — –  derivatives 300 — 300 350 295 — 295 421 –  property 855 — 855 — 833 — 833 — –  pooled investment vehicles 9,549 — 9,549 — 8,064 — 8,064 — –  other 434 434 — — 278 278 — — Other plans Fair value of plan assets 7,329 5,717 1,612 16 7,106 6,407 699 19 –  equities 608 608 — 4 587 587 — 4 –  bonds fixed income 3,742 3,741 1 3 3,671 3,671 — 4 –  bonds index-linked 47 47 — — 33 33 — — –  bonds other 561 534 27 — 473 473 — — –  derivatives ( 61 ) — ( 61 ) — 2 ( 3 ) 5 — –  property 140 135 5 — 103 98 5 — –  other 2,292 652 1,640 9 2,237 1,548 689 11 1 The fair value of plan assets includes derivatives entered into with HSBC Bank plc as detailed in Note 36. 2 For further details of the principal plan, see page 322 . Post-employment defined benefit plans’ principal actuarial financial assumptions HSBC determines the discount rates to be applied to its obligations in consultation with the plans’ local actuaries, on the basis of current average yields of high-quality (AA-rated or equivalent) debt instruments with maturities consistent with those of the defined benefit obligations. Key actuarial assumptions for the principal plan 1 Discount rate Inflation rate (RPI) Inflation rate (CPI) Rate of increase for pensions Rate of pay increase % % % % % UK At 31 Dec 2025 5.51 3.02 2.34 2.96 3.09 At 31 Dec 2024 5.54 3.33 2.88 3.22 3.63 1 For further details of the principal plan, see page 322 . Mortality tables and average life expectancy at age 60 for the principal plan 1 Mortality table Life expectancy at age 60 for a male member currently: Life expectancy at age 60 for a female member currently: Aged 60 Aged 40 Aged 60 Aged 40 UK At 31 Dec 2025 SAPS S3 2 26.4 28.0 28.4 30.0 At 31 Dec 2024 SAPS S3 3 26.1 27.7 28.3 29.9 1 For further details of the principal plan, see page 322 . 2    Self-administered pension scheme (‘SAPS’) S3 table, with different tables and multipliers adopted based on gender, pension amount and member status, reflecting the Scheme’s actual mortality experience. Improvements are projected in accordance with the Continuous Mortality Investigation’s CMI 2024 core projection model with an initial addition to improvement of 0.25% per annum, and a long-term rate of improvement of 1.25% per annum, with other parameters set in line with the model default values. 3    Self-administered pension scheme (‘SAPS’) S3 table, with different tables and multipliers adopted based on gender, pension amount and member status, reflecting the Scheme’s actual mortality experience. Improvements are projected in accordance with the Continuous Mortality Investigation’s CMI 2023 core projection model with an initial addition to improvement of 0.25% per annum and a long-term rate of improvement of 1.25% per annum and with a 0% weighting to 2020 and 2021, mortality experience and a 15% weighting to 2022 and 2023, reflecting long-term view on mortality improvements post-pandemic. The effect of changes in key assumptions on the principal plan 1 Impact on HSBC UK section of the HSBC Bank (UK) Pension Scheme obligation Financial impact of increase Financial impact of decrease 2025 2024 2025 2024 $m $m $m $m Discount rate – increase/decrease of 0.25 % ( 477 ) ( 473 ) 496 496 Inflation rate (RPI and CPI) – increase/decrease of 0.25 % 408 389 ( 391 ) ( 391 ) Pension payments and deferred pensions – increase/decrease of 0.25 % 504 487 ( 478 ) ( 478 ) Pay – increase/decrease of 0.25 % 7 6 ( 6 ) ( 6 ) Change in mortality – increase/decrease of 1 year 486 483 ( 464 ) ( 464 ) 1 For further details of the principal plan, see page 322 . HSBC Holdings plc Annual Report on Form 20-F 325 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit asset recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the prior period. Directors’ emoluments Details of Directors’ emoluments, pensions and their interests are disclosed in the Directors’ remuneration report on page 249 . 6 Auditor’s remuneration 2025 2024 2023 $m $m $m Audit fees payable to PwC 1 108.9 102.8 109.8 Other audit fees payable 2.8 1.6 2.2 Year ended 31 Dec 111.7 104.4 112.0 Fees payable by HSBC to PwC 2025 2024 2023 $m $m $m Fees for HSBC Holdings’ statutory audit 2 25.1 22.0 24.1 Fees for other services provided to HSBC 134.0 124.6 131.8 –  audit of HSBC’s subsidiaries 83.8 80.8 85.7 –  audit-related assurance services 3 28.2 25.0 26.0 –  other assurance services 4,5 22.0 18.8 20.1 Year ended 31 Dec 159.1 146.6 155.9 1 Audit fees payable to PwC in 2025 included adjustments made to the prior year audit fee after finalisation of the 2024 financial statements. In addition, $ 2.1 m in expenses were reimbursed to PwC in 2025. 2 Fees payable to PwC for the statutory audit of the consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings. They include amounts payable for services relating to the consolidation returns of HSBC Holdings’ subsidiaries, which are clearly identifiable as being in support of the Group audit opinion. 3 Including services for assurance and other services that relate to statutory and regulatory filings, including interim reviews. 4 Including permitted services relating to attestation reports on internal controls of a service organisation primarily prepared for and used by third-party end users, including comfort letters. 5 Includes reviews of PRA regulatory reporting returns. No fees were payable by HSBC to PwC as principal auditor for the following types of services: internal audit services and services related to litigation, recruitment and remuneration. Fees payable by HSBC’s associated pension schemes to PwC 2025 2024 2023 $000 $000 $000 Audit of HSBC’s associated pension schemes 256 320 297 Year ended 31 Dec 256 320 297 No fees were payable by HSBC’s associated pension schemes to PwC as principal auditor for the following types of services: internal audit services, other assurance services, services related to corporate finance transactions, valuation and actuarial services, litigation, recruitment and remuneration, and information technology. In addition to the above, the estimated fees paid to PwC by third parties associated with HSBC amounted to $ 7.1 m (2024: $ 9.9 m ; 2023: $ 12.3 m ). In these cases, HSBC was connected with the contracting party and may therefore have been involved in appointing PwC. These fees arose from services such as auditing mutual funds managed by HSBC and reviewing the financial position of corporate concerns that borrow from HSBC. Fees payable for non-audit services for HSBC Holdings are not disclosed separately because such fees are disclosed on a consolidated basis for the Group. HSBC Holdings plc Annual Report on Form 20-F 326 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 7 Tax Tax expense 2025 2024 2023 $m $m $m Current tax 1 6,978 6,115 5,718 –  for this year 6,606 5,863 5,737 –  adjustments in respect of prior periods 3 324 31 ( 19 ) –  Pillar 2 and qualifying domestic top-up taxes 48 221 — Deferred tax ( 202 ) 1,195 71 –  origination and reversal of temporary differences 173 1,288 19 –  effect of changes in tax rates 35 ( 2 ) 17 –  adjustments in respect of prior periods 3 ( 410 ) ( 91 ) 35 Year ended 31 Dec 2 6,776 7,310 5,789 1 Current tax included Hong Kong profits tax of $ 2,351 m (2024: $ 1,615 m ; 2023: $ 1,328 m ). The Hong Kong tax rate applying to the profits of subsidiaries assessable in Hong Kong was 16.5 % (2024: 16.5 % ; 2023: 16.5 % ). 2 In addition to amounts recorded in the income statement, a tax charge of $ 136 m (2024: credit of $ 12 m ) w as recorded directly to equity. 3 Adjustments in respect of prior periods includes deferred tax credits in Hong Kong arising on temporary differences between IFRS and the regulatory basis of accounting on which the tax returns are prepared, and in the UK on tax losses, both of which arise from the finalisation of 2024 tax returns and are offset by corresponding charges in current tax . Tax reconciliation The tax charged to the income statement differs from the tax charge that would apply if all profits had been taxed at the UK corporation tax rate as follows: 2025 2024 2023 $m % $m % $m % Profit before tax 29,907 32,309 30,348 Tax expense Taxation at UK corporation tax rate of 25.0% (2024: 25.0%, 2023: 23.5%) 7,477 25.0 8,077 25.0 7,132 23.5 Impact of differently taxed overseas profits in overseas locations ( 1,316 ) ( 4.4 ) ( 1,351 ) ( 4.2 ) ( 612 ) ( 2.0 ) UK banking surcharge 179 0.6 215 0.7 350 1.2 Items increasing tax charge in 2025: –  local taxes and overseas withholding taxes 692 2.3 584 1.8 419 1.4 –  movements in unrecognised deferred tax 314 1.0 259 0.7 ( 22 ) ( 0.1 ) –  fines and provisions for legal settlements 294 1.0 — — — — –  impairment of investment in BoCom 250 0.8 — — 705 2.3 –  other permanent disallowables 237 0.8 344 1.0 227 0.7 –  dilution loss on the Group’s investment in BoCom 128 0.4 — — — — –  movements in provisions for uncertain tax positions 118 0.4 38 0.1 ( 472 ) ( 1.6 ) –  impact of business disposals 100 0.3 — — — — –  non-deductible bank levy expense 75 0.3 73 0.2 112 0.4 –  impact of global and domestic minimum taxes 48 0.2 221 0.7 — — –  impact of changes in tax rates 35 0.1 6 — 17 0.1 –  impact of hyperinflation 32 0.1 327 1.0 348 1.1 –  tax impact of sale of HSBC Argentina — — 1,536 4.8 — — Items reducing tax charge in 2025: –  non-taxable income and gains ( 970 ) ( 3.2 ) ( 1,079 ) ( 3.3 ) ( 1,189 ) ( 3.9 ) –  effect of profits in associates and joint ventures ( 582 ) ( 1.9 ) ( 456 ) ( 1.4 ) ( 571 ) ( 1.9 ) –  deductions for AT1 coupon payments ( 249 ) ( 0.8 ) ( 249 ) ( 0.8 ) ( 229 ) ( 0.7 ) –  adjustments in respect of prior periods ( 86 ) ( 0.3 ) ( 46 ) ( 0.1 ) 16 0.1 –  non-taxable gain on disposal of HSBC Canada — — ( 1,174 ) ( 3.6 ) — — –  impact of sale of French retail banking business — — ( 15 ) — — — –  accounting gain on acquisition of SVB UK — — — — ( 442 ) ( 1.5 ) Year ended 31 Dec 6,776 22.7 7,310 22.6 5,789 19.1 The Group’s profits are taxed at different rates depending on the country or territory in which the profits arise. The key applicable tax rates for 2025 include Hong Kong ( 16.5 % ), the US ( 21.0 % ) and the UK ( 25.0 % ). If the Group’s profits were taxed at the statutory rates of the countries in which the profits arose, then the tax rate for the year would have been 21.2 % (2024: 21.4 % ). The effective tax rate for the year of 22.7 % was higher than in the previous year (2024: 22.6 % ). The effective tax rate for the year was increased by 1.2 % by the dilution loss and non-deductible impairment of the Group’s investment in BoCom, increased by 1.0 % by movements in unrecognised deferred tax, primarily relating to French tax losses, and increased by 1.0 % by the impact of fines and provisions for legal settlements on which no tax benefit is recorded. The effective tax rate for the year was reduced by 0.3 % by adjustments in respect of prior periods, mainly arising from the finalisation of prior year tax returns in India and Hong Kong . The effective tax rate for 2024 was reduced by 3.6 % by the non-taxable gain arising on the disposal of HSBC Canada, increased by 4.8 % by the non-deductible loss arising on the disposal of HSBC Argentina, increased by 0.7 % by movements in unrecognised deferred tax, primarily relating to French tax losses, and increased by 0.7 % by the Group’s Pillar 2 global minimum tax charge. The UK adopted the ‘Pillar Two’ global minimum tax model rules of the OECD’s Inclusive Framework on Base Erosion and Profit-Shifting (‘BEPS’) with effect from 1 January 2024. Many jurisdictions adopted similar rules, as well as domestic minimum tax regimes, from 1 January 2025 and some jurisdictions, such as Bermuda, introduced new or amended corporate income tax regimes effective from that date. These changes have the effect of increasing local overseas tax liabilities in 2025 and reducing the UK top-up tax liability. HSBC Holdings plc Annual Report on Form 20-F 327 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Accounting for taxes involves some estimation because tax law is uncertain and its application requires a degree of judgement, which authorities may dispute. Liabilities are recognised based on best estimates of the probable outcome, taking into account external advice where appropriate. Exposures to additional tax liabilities arising from uncertain tax positions were reassessed during 2025, resulting in a charge o f $ 118 m to the income statement. We do not expect significant liabilities to arise in excess of the amounts provided. HSBC only recognises current and deferred tax assets where recovery is probable. Movement of deferred tax assets and liabilities Loan impairment provisions Unused tax losses and tax credits Financial assets at FVOCI Cash flow hedges Retirement obligations Other Total $m $m $m $m $m $m $m Assets 1,070 3,864 616 442 — 2,906 8,898 Liabilities — — — — ( 1,767 ) ( 1,607 ) ( 3,374 ) At 1 Jan 2025 1,070 3,864 616 442 ( 1,767 ) 1,299 5,524 Income statement 11 ( 466 ) 226 10 ( 96 ) 517 202 Other comprehensive income — — ( 564 ) ( 587 ) 6 161 ( 984 ) Foreign exchange and other adjustments ( 25 ) 74 221 23 ( 100 ) 200 393 At 31 Dec 2025 1,056 3,472 499 ( 112 ) ( 1,957 ) 2,177 5,135 Assets 1 1,056 3,472 499 — — 3,503 8,530 Liabilities 1 — — — ( 112 ) ( 1,957 ) ( 1,326 ) ( 3,395 ) Assets 1,158 4,544 876 419 — 2,933 9,930 Liabilities — — — — ( 1,814 ) ( 1,600 ) ( 3,414 ) At 1 Jan 2024 1,158 4,544 876 419 ( 1,814 ) 1,333 6,516 Income statement ( 74 ) ( 640 ) 100 — ( 85 ) ( 431 ) ( 1,130 ) Other comprehensive income — — ( 49 ) 84 114 189 338 Foreign exchange and other adjustments ( 14 ) ( 40 ) ( 311 ) ( 61 ) 18 208 ( 200 ) At 31 Dec 2024 1,070 3,864 616 442 ( 1,767 ) 1,299 5,524 Assets 1 1,070 3,864 616 442 — 2,906 8,898 Liabilities 1 — — — — ( 1,767 ) ( 1,607 ) ( 3,374 ) 1 After netting off balances within countries, the balances as disclosed in the accounts are as follows: deferred tax assets of $ 7,235 m (2024: $ 6,841 m ) and deferred tax liabilities of $ 2,100 m (2024: $ 1,317 m ). In applying judgement in recognising deferred tax assets, management has assessed all relevant information, including future business profit projections and the track record of meeting forecasts. Management’s assessment of the likely availability of future taxable profits against which to recover deferred tax assets is based on the most recent financial forecasts approved by management, which cover a five -year period and are extrapolated where necessary, and takes into consideration the reversal of existing taxable temporary differences and past business performance. When forecasts are extrapolated beyond five years, a number of different scenarios are considered, reflecting different downward risk adjustments, in order to assess the sensitivity of our recognition and measurement conclusions in the context of such longer-term forecasts. The Group’s net deferred tax asset of $ 5.1 b n (2024: $ 5.5 b n) in cluded $ 1.5 bn (2024: $ 2.6 bn) of deferred tax assets relating to the UK, $ 2.8 b n (2024: $ 3.0 b n) of deferred tax assets relating to the US and a net deferred asset of $ 0.8 b n (2024: $ 0.5 b n) in France. The UK deferred tax asset of $ 1.5 b n excluded a $ 2.0 b n deferred tax liability arising on the UK pension scheme surplus, the reversal of which is not taken into account when estimating future taxable profit due to the level of uncertainty as to the timing and manner of its reversal. The UK deferred tax assets are supported by forecasts of taxable profit, also taking into consideration the history of profitability in the relevant businesses. The majority of the deferred tax asset relates to tax attributes which do not expire and are forecast to be recovered within two years and as such are less sensitive to changes in long-term profit forecasts. The net US deferred tax asset of $ 2.8 b n included $ 1.0 b n related to US tax losses, of which $ 0.7 b n expire in 9 to 12 years . Management expects the US deferred tax asset to be substantially recovered withi n 13 years , wit h the majority recovered in the first five years . The net deferred tax asset in France of $ 0.8 b n included $ 0.7 b n related to tax losses, which are expected to be substantially recovered within 10 years. An additional $0.1b n of deferred tax asset relating to French tax losses was recognised during the year, supported by the business’s improved performance and outlook. Unused tax losses with a tax value of $ 0.3 bn have not been recognised due to the absence of convincing evidence regarding the availability of sufficient future taxable profits against which to recover them. Unrecognised deferred tax The amount of gross temporary differences, unused tax losses and tax credits for which no deferred tax asset is recognised in the balance sheet was $ 13.8 b n (2024 : $ 11.0 b n). This amount included unused US state tax losses of $ 3.8 bn (2024: $ 3.8 bn ) which are forecast to expire before they are recovered, unused French tax losses of $ 1.4 bn (2024: $ 0.7 bn ) for w hich there is insufficient evidence of future taxable profits to support recognition, and unused UK tax losses of $ 3.4 b n (2024: $ 3.5 b n), which arose prior to 1 April 2017 and can only be recovered against future taxable profits of HSBC Holdings. No deferred tax was recognised on these losses due to the absence of convincing evidence regarding the availability of sufficient future taxable profits against which to recover them . Deferred tax asset recognition is reassessed at each balance sheet date based on the available evidence. Of the total amounts on which deferred tax was not recognised, $ 7.6 bn (2024: $ 6.0 b n) had no expiry date, $ 1.3 b n (2024: $ 1.0 b n) was scheduled to expire within 10 years and the remaining balance is expected to expire after 10 years . Deferred tax is not recognised in respect of the Group’s investments in subsidiaries and branches where HSBC is able to control the timing of remittance or other realisation and where remittance or realisation is not probable in the foreseeable future. The aggregate temporary differences relating to unrecognised deferred tax liabilities arising on investments in subsidiaries and branches was $ 15.9 b n (2024: $ 15.2 b n) and the corresponding unrecognised deferred tax liability was $ 0.8 b n (2024: $ 0.7 b n). HSBC Holdings plc Annual Report on Form 20-F 328 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 8 Dividends Dividends to shareholders of the parent company 2025 2024 2023 Per share Total Per share Total Per share Total $ $m $ $m $ $m Dividends paid on ordinary shares In respect of previous year: –  second interim dividend — — — — 0.23 4,589 –  fourth interim dividend 0.36 6,397 0.31 5,872 — — In respect of current year: –  first interim dividend 0.10 1,750 0.10 1,877 0.10 2,001 –  special dividend — — 0.21 3,942 — — –  second interim dividend 0.10 1,717 0.10 1,852 0.10 1,956 –  third interim dividend 0.10 1,717 0.10 1,805 0.10 1,946 Total 0.66 11,581 0.82 15,348 0.53 10,492 Total coupons on capital securities classified as equity 1,183 1,062 1,101 Dividends to shareholders 12,764 16,410 11,593 Total coupons on capital securities classified as equity 2025 2024 2023 Per security Total Total Total First call date $m $m $m Perpetual subordinated contingent convertible securities 1 $ 2,250 m issued at 6.375 % 2 Sep 2024 $ 63.750 — 122 143 $ 2,450 m issued at 6.375 % 3 Mar 2025 $ 63.750 55 156 156 $ 3,000 m issued at 6.000 % May 2027 $ 60.000 180 180 180 $ 2,350 m issued at 6.250 % 4 Mar 2023 $ 62.500 — — 52 $ 1,800 m issued at 6.500 % Mar 2028 $ 65.000 117 117 117 $ 1,500 m issued at 4.600 % Dec 2030 $ 46.000 69 69 69 $ 1,000 m issued at 4.000 % Mar 2026 $ 40.000 40 40 40 $ 1,000 m issued at 4.700 % Mar 2031 $ 47.000 47 47 47 $ 2,000 m issued at 8.000 % 5 Mar 2028 $ 80.000 160 160 80 $ 1,350 m issued at 6.875 % 6 Sep 2029 $ 68.750 93 — — $ 1,150 m issued at 6.950 % 7 Mar 2034 $ 69.500 80 — — $ 1,500 m issued at 6.950 % 8 Aug 2031 $ 69.500 52 — — $ 2,000 m issued at 7.050 % 9 Jun 2030 $ 70.500 71 — — € 1,000 m issued at 6.000 % 10 Sep 2023 € 60.000 — — 56 € 1,250 m issued at 4.750 % Jul 2029 € 47.500 65 65 64 £ 1,000 m issued at 5.875 % Sep 2026 £ 58.750 77 77 72 SGD 750 m issued at 5.000 % 11 Sep 2023 SGD 50.000 — — 25 SGD 1,500 m issued at 5.250 % 12 Jun 2029 SGD 52.500 61 29 — SGD 800 m issued at 5.000 % 13 Mar 2030 SGD 50.000 16 — — Total 1,183 1,062 1,101 1 Discretionary coupons are paid semi-annually, based on the denominations of each security. 2 This security was called by HSBC Holdings on 23 July 2024 and was redeemed and cancelled on 17 September 2024. 3 This security was called by HSBC Holdings on 7 February 2025 and was redeemed and cancelled on 31 March 2025. 4 This security was called by HSBC Holdings on 30 January 2023 and was redeemed and cancelled on 23 March 2023. 5 This security was issued by HSBC Holdings on 7 March 2023. The first call period commences six calendar months prior to the reset date of 7 September 2028. 6 This security was issued by HSBC Holdings on 11 September 2024. The first call period commences six calendar months prior to the reset date of 11 March 2030. 7 This security was issued by HSBC Holdings on 11 September 2024. The first call period commences six calendar months prior to the reset date of 11 September 2034. 8 This security was issued by HSBC Holdings on 27 February 2025. The first call period commences six calendar months prior to the reset date of 27 February 2032. 9 This security was issued by HSBC Holdings on 5 June 2025. The first call period commences six calendar months prior to the reset date of 5 December 2030. 10 This security was called by HSBC Holdings on 3 August 2023 and was redeemed and cancelled on 29 September 2023. 11 This security was called by HSBC Holdings on 3 August 2023 and was redeemed and cancelled on 25 September 2023. 12 This security was issued by HSBC Holdings on 14 June 2024. The first call period commences six calendar months prior to the reset date of 14 December 2029. 13 This security was issued by HSBC Holdings on 24 March 2025. The first call period commences six calendar months prior to the reset date of 24 September 2030. On 25 February 2026 , the Directors approved a fourth interim dividend in respect of the financial year ended 31 December 2 025 o f $ 0.45 per ordinary share (the ‘dividend’), an expected distribution of approximately $ 7.71 b n . The dividend will be payable on 30 April 2026 to holders of record on the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 13 March 2026. No liability was recorded in the financial statements in respect of the fourth interim dividend for 2025. On 5 January 2026, HSBC paid a coupon on its € 1,250 m subordinated capital securities, representing a total distribution of € 30 m ( $ 35 m ) . No liability was recorded on the balance sheet at 31 December 2025 in respect of this coupon payment. HSBC Holdings plc Annual Report on Form 20-F 329 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 9 Earnings per share Basic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders of the parent company by the weighted average number of ordinary shares outstanding, after deducting own shares held. Diluted earnings per ordinary share is calculated by dividing the basic earnings, which require no adjustment for the effects of dilutive potential ordinary shares, by the weighted average number of ordinary shares outstanding, excluding own shares held, plus the weighted average number of ordinary shares that would be issued on conversion of dilutive potential ordinary shares. Basic and diluted earnings per share 2025 2024 2023 Profit Number of shares Per share Profit Number of shares Per share Profit Number of shares Per share $m (millions) $ $m (millions) $ $m (millions) $ Basic 1 21,102 17,427 1.21 22,917 18,357 1.25 22,432 19,478 1.15 Effect of dilutive potential ordinary shares 120 128 122 Diluted 1 21,102 17,547 1.20 22,917 18,485 1.24 22,432 19,600 1.14 1 Weighted average number of ordinary shares outstanding (basic) or assuming dilution (diluted) after deducting own shares held. The number of anti-dilutive employee share options excluded from the weighted average number of dilutive potential ordinary shares was 12 million (2024: Nil ; 2023: 23 million ). 10 Segmental analysis The Group Operating Committee is considered to be the Chief Operating Decision Maker (‘CODM’) for the purposes of identifying the Group’s reportable segments. Business segments results were assessed by the CODM on the basis of constant currency performance that removes the effects of currency translation from reported results. Therefore, we disclose these results on a constant currency basis as required by IFRS Accounting Standards. The 2024 and 2023 income statements are converted at the average rates of exchange for 2025, and the balance sheets at 31 December 2024 and 31 December 2023 at the prevailing rates of exchange on 31 December 2025. Our operations are closely integrated and, accordingly, the presentation of data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and global infrastructures to the extent that they can be meaningfully attributed to business segments. While such allocations have been made on a systematic and consistent basis, they involve a certain degree of subjectivity. Costs that are not allocated to global businesses are included in Corporate Centre. Interest income is reported net as the CODM primarily relies on the net amount as a performance measure. Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-company and inter-business line transactions. All such transactions are undertaken on arm’s length terms. Measurement of segmental assets, liabilities, income and expenses is in accordance with the Group’s accounting policies. Shared costs are included in segments on the basis of actual recharges. The intra-group elimination items for the business segments are presented in Corporate Centre. Our business segments Following our organisational announcement in October 2024, effective from 1 January 2025, the Group’s reportable segments under IFRS 8 ‘Operating Segments’ comprise four business along with Corporate Centre. These replace our previously reported operating segments up to 31 December 2024. All segmental comparative data have been re-presented to reflect the Group’s revised segment structure. – Hong Kong: The Hong Kong business comprises Retail Banking and Wealth and Commercial Banking of HSBC Hong Kong and Hang Seng Bank. – UK: The UK business comprises UK Personal Banking (including first direct and M&S Bank) and UK Commercial Banking including HSBC Innovation Bank. – Corporate and Institutional Banking (‘CIB’): CIB is formed from the integration of our Commercial Banking business (outside the UK and Hong Kong) with our Global Banking and Markets business. – International Wealth and Premier Banking (‘IWPB’): IWPB comprises Premier banking outside of Hong Kong and the UK, our Private Bank, and our wealth manufacturing businesses of Asset Management and Insurance. HSBC Holdings plc Annual Report on Form 20-F 330 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC constant currency profit before tax and balance sheet data 2025 Hong Kong UK CIB IWPB Corporate Centre Total $m $m $m $m $m $m Net operating income/(expense) before change in expected credit losses and other credit impairment charges 1 15,878 12,938 27,637 14,520 ( 2,699 ) 68,274 –  external 10,157 13,856 39,098 12,458 ( 7,295 ) 68,274 –  inter-segment 5,721 ( 918 ) ( 11,461 ) 2,062 4,596 — –  of which: net interest income/(expense) 2 12,082 11,096 14,532 7,397 ( 10,313 ) 34,794 Change in expected credit losses and other credit impairment charges ( 1,476 ) ( 696 ) ( 696 ) ( 892 ) ( 90 ) ( 3,850 ) Net operating income/(expense) 14,402 12,242 26,941 13,628 ( 2,789 ) 64,424 Total operating expenses ( 4,826 ) ( 5,537 ) ( 15,556 ) ( 9,285 ) ( 1,224 ) ( 36,428 ) Operating profit/(loss) 9,576 6,705 11,385 4,343 ( 4,013 ) 27,996 Share of profit in associates and joint ventures less impairment 3 — — 1 24 1,886 1,911 Constant currency profit before tax 9,576 6,705 11,386 4,367 ( 2,127 ) 29,907 % % % % % % Share of HSBC’s constant currency profit before tax 32.0 22.4 38.1 14.6 ( 7.1 ) 100.0 Constant currency cost efficiency ratio 30.4 42.8 56.3 63.9 ( 45.4 ) 53.4 Constant currency balance sheet data $m $m $m $m $m $m Loans and advances to customers (net) 229,491 303,698 305,022 150,047 141 988,399 Interests in associates and joint ventures — — 83 522 28,972 29,577 Total external assets 437,933 451,492 1,793,162 416,332 134,115 3,233,034 Customer accounts 543,381 364,323 597,719 281,058 347 1,786,828 2024 Net operating income/(expense) before change in expected credit losses and other credit impairment charges 15,047 12,342 26,772 13,817 ( 1,969 ) 66,009 –  external 9,704 13,060 39,012 11,175 ( 6,942 ) 66,009 –  inter-segment 5,343 ( 718 ) ( 12,240 ) 2,642 4,973 — –  of which: net interest income/(expense) 2 11,997 10,355 14,519 8,081 ( 12,497 ) 32,455 Change in expected credit losses and other credit impairment charges ( 1,077 ) ( 415 ) ( 878 ) ( 993 ) ( 29 ) ( 3,392 ) Net operating income/(expense) 13,970 11,927 25,894 12,824 ( 1,998 ) 62,617 Total operating expenses ( 4,841 ) ( 5,104 ) ( 14,612 ) ( 8,900 ) 311 ( 33,146 ) Operating profit/(loss) 9,129 6,823 11,282 3,924 ( 1,687 ) 29,471 Share of profit/(loss) in associates and joint ventures — — 1 45 2,867 2,913 Constant currency profit/(loss) before tax 9,129 6,823 11,283 3,969 1,180 32,384 % % % % % % Share of HSBC’s constant currency profit before tax 28.2 21.1 34.8 12.3 3.6 100.0 Constant currency cost efficiency ratio 32.2 41.4 54.6 64.4 15.8 50.2 Constant currency balance sheet data $m $m $m $m $m $m Loans and advances to customers (net) 235,053 285,778 297,877 144,027 8,043 970,778 Interests in associates and joint ventures — — 132 557 29,039 29,728 Total external assets 433,588 432,683 1,729,531 414,734 129,265 3,139,801 Customer accounts 506,557 352,833 587,926 271,588 336 1,719,240 2023 Net operating income/(expense) before change in expected credit losses and other credit impairment charges 14,532 13,439 24,723 12,385 ( 39 ) 65,040 –  external 10,093 13,749 36,111 10,112 ( 5,025 ) 65,040 –  inter-segment 4,439 ( 310 ) ( 11,388 ) 2,273 4,986 — –  of which: net interest income/(expense) 2 12,108 9,903 13,399 7,753 ( 8,951 ) 34,212 Change in expected credit losses and other credit impairment charges ( 1,494 ) ( 545 ) ( 524 ) ( 686 ) ( 1 ) ( 3,250 ) Net operating income/(expense) 13,038 12,894 24,199 11,699 ( 40 ) 61,790 Total operating expenses ( 4,514 ) ( 4,829 ) ( 13,755 ) ( 8,549 ) ( 44 ) ( 31,691 ) Operating profit/(loss) 8,524 8,065 10,444 3,150 ( 84 ) 30,099 Share of profit/(loss) in associates and joint ventures 4 — — ( 1 ) 62 ( 358 ) ( 297 ) Constant currency profit/(loss) before tax 8,524 8,065 10,443 3,212 ( 442 ) 29,802 % % % % % % Share of HSBC’s constant currency profit before tax 28.6 27.1 35.0 10.8 ( 1.5 ) 100.0 Constant currency cost efficiency ratio 31.1 35.9 55.6 69.0 ( 112.8 ) 48.7 Constant currency balance sheet data $m $m $m $m $m $m Loans and advances to customers (net) 240,173 278,225 290,227 146,805 276 955,706 Interests in associates and joint ventures — — 128 539 26,965 27,632 Total external assets 419,890 423,648 1,648,421 460,545 142,628 3,095,132 Customer accounts 486,873 347,570 548,275 257,664 618 1,641,000 1 Includes a loss of $ 1.1 bn  inclusive of reserves recycling as a result of the dilution of our shareholding in BoCom. See Note 18 on pages 345 to 348 . 2 Incl udes $ 9.7 bn (2024: $ 11.4 bn ; 20 23: $ 8.7 b n) of interest expense in Corporate Centre for the internal cost to fund our Markets Treasury function. 3 Includes an impairment loss of $ 1.0 bn recognised in respect of the Group’s investment in BoCom. See Note 18 on pages 345 to 348 . 4 Includes an impairment loss of $ 3.0bn recognised in respect of the Group’s investment in BoCom. HSBC Holdings plc Annual Report on Form 20-F 331 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Reported external net operating income is attributed to countries and territories on the basis of the location of the branch responsible for reporting the results or advancing the funds: 2025 2024 2023 $m $m $m Reported external net operating income by country/territory 68,274 65,854 66,058 –  UK 1 13,677 12,307 11,027 –  Hong Kong 22,527 20,811 20,185 –  US 4,797 4,233 3,816 –  France 1,839 3,804 4,208 –  other countries/territories 25,434 24,699 26,822 1 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). Constant currency results reconciliation 2025 2024 2023 Reported and constant currency Constant currency Currency translation Reported Constant currency Currency translation Reported $m $m $m $m $m $m $m Revenue 68,274 66,009 155 65,854 65,040 ( 1,018 ) 66,058 ECL ( 3,850 ) ( 3,392 ) 22 ( 3,414 ) ( 3,250 ) 197 ( 3,447 ) Operating expenses ( 36,428 ) ( 33,146 ) ( 103 ) ( 33,043 ) ( 31,691 ) 379 ( 32,070 ) Share of profit/(loss) in associates and joint ventures less impairment 1,911 2,913 1 2,912 ( 297 ) ( 104 ) ( 193 ) Profit before tax 29,907 32,384 75 32,309 29,802 ( 546 ) 30,348 Constant currency balance sheet reconciliation 2025 2024 2023 Reported and constant currency Constant currency Currency translation Reported Constant currency Currency translation Reported $m $m $m $m $m $m $m Loans and advances to customers (net) 988,399 970,778 40,120 930,658 955,706 17,171 938,535 Interests in associates and joint ventures 29,577 29,728 819 28,909 27,632 288 27,344 Total external assets 3,233,034 3,139,801 122,753 3,017,048 3,095,132 56,455 3,038,677 Customer accounts 1,786,828 1,719,240 64,285 1,654,955 1,641,000 29,353 1,611,647 Notable items 2025 2024 2023 $m $m $m Year ended 31 Dec Notable items Revenue Disposals, wind-downs, acquisitions and related costs 1,2,3 ( 1,642 ) ( 1,343 ) 1,298 Dilution loss of interest in BoCom associate 4 ( 1,104 ) — — Fair value movements on financial instruments 5 — — 14 Disposal losses on Markets Treasury repositioning — — ( 977 ) Early redemption of legacy securities — ( 237 ) — Operating expenses Disposals, wind-downs, acquisitions and related costs ( 502 ) ( 199 ) ( 321 ) Restructuring and other related costs 6 ( 1,030 ) ( 34 ) 136 Legal provision 7 ( 1,432 ) — — Impairment losses of interest in BoCom associate 4 ( 1,000 ) — ( 3,000 ) 1 Includes recycling of cumulative fair value losses of $ 1.5 b n relating to the French retained portfolio of home and certain other loans following the completion of its sale to a consortium comprising Rothesay Life plc and CCF. 2 Amounts in 2024 include a $ 1.0 b n loss on disposal and a $ 5.2 b n loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This was partly offset by a $ 4.8 b n gain on disposal of our banking business in Canada, inclusive of foreign exchange hedging of the sales proceeds and the recycling of reserves losses. 3 Amounts in 2023 include the gain of $ 1.6 b n recognised in respect of the acquisition of SVB UK, and the impact of the sale of our retail banking operations in France. 4 Includes a loss of $ 1.1 bn inclusive of reserves recycling as a result of the dilution of our shareholding in BoCom. We have also recognised a $ 1.0 b n impairment loss following an impairment test on the carrying value of the Group’s investment in BoCom in ‘Impairment losses of interest in BoCom associate’. See Note 18 on pages 345 to 348 . 5 Fair value movements on non-qualifying hedges in HSBC Holdings. 6 Amounts in 2025 include restructuring provisions recognised in 2025. Amounts in 2024 relate to restructuring provisions recognised in 2024 and reversals of restructuring provisions recognised during 2022. Amounts in 2023 relate to reversals of restructuring provisions recognised during 2022. 7 Includes a $ 1.1 bn provision in connection with a claim brought by Herald Fund SPC in the Luxembourg District Court, relating to the Bernard L. Madoff Investment Securities LLC fraud and a $ 0.3 bn provision in connection with certain historical trading activities in HSBC Bank plc. HSBC Holdings plc Annual Report on Form 20-F 332 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 11 Trading assets 2025 2024 $m $m Treasury and other eligible bills 34,433 32,022 Debt securities 116,837 97,275 Equity securities 176,312 155,194 Trading securities 327,582 284,491 Loans and advances to banks 1 10,913 6,123 Loans and advances to customers 1 27,658 24,228 At 31 Dec 366,153 314,842 1 Loans and advances to banks and customers include reverse repos, stock borrowing and other accounts. 12 Fair values of financial instruments carried at fair value Control framework Fair values are subject to a control framework designed to ensure that they are either determined or validated by a function independent of the risk taker. Where fair values are determined by reference to externally quoted prices or observable pricing inputs to models, independent price determination or validation is used. For inactive markets, HSBC sources alternative market information, with greater weight given to information that is considered to be more relevant and reliable. Examples of the factors considered are price observability, instrument comparability, consistency of data sources, underlying data accuracy and timing of prices. For fair values determined using valuation models, the control framework includes development or validation by independent support functions of the model logic, inputs, model outputs and adjustments. Valuation models are subject to a process of due diligence before becoming operational and are calibrated against external market data on an ongoing basis. Fair value adjustments are applied where additional factors are not incorporated into the primary product valuation model. The majority of financial instruments measured at fair value are in MSS. MSS’s fair value governance structure comprises its Finance function and Valuation Committees. Finance is responsible for establishing procedures governing valuation and ensuring fair values are in compliance with accounting standards. The fair values are reviewed by the Valuation Committees, which consist of independent support functions. Financial liabilities measured at fair value In certain circumstances, HSBC records its own debt in issue at fair value, based on quoted prices in an active market for the specific instrument. When quoted market prices are unavailable, the own debt in issue is valued using valuation techniques, the inputs for which are either based on quoted prices in an inactive market for the instrument or are estimated by comparison with quoted prices in an active market for similar instruments. In both cases, the fair value includes the effect of applying the credit spread that is appropriate to HSBC’s liabilities. The change in fair value of issued debt securities attributable to the Group’s own credit spread is computed as follows: for each security at each reporting date, an externally verifiable price is obtained or a price is derived using credit spreads for similar securities for the same issuer. Then, using discounted cash flow, each security is valued using an appropriate market discount curve. The difference in the valuations is attributable to the Group’s own credit spread. This methodology is applied consistently across all securities. Structured notes issued and certain other hybrid instruments are reported as financial liabilities designated at fair value. The credit spread applied to these instruments is derived from the spreads at which HSBC issues structured notes. Gains and losses arising from changes in the credit spread of liabilities issued by HSBC, recorded in other comprehensive income, reverse over the contractual life of the debt, provided that the debt is not repaid at a premium or a discount. Fair value hierarchy Fair values of financial assets and liabilities are determined according to the following hierarchy: – Level 1 – valuation technique using quoted market price. These are financial instruments with quoted prices for identical instruments in active markets that HSBC can access at the measurement date. – Level 2 – valuation technique using observable inputs. These are financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable. – Level 3 – valuation technique with significant unobservable inputs. These are financial instruments valued using valuation techniques where one or more significant inputs are unobservable. HSBC Holdings plc Annual Report on Form 20-F 333 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Financial instruments carried at fair value and bases of valuation 2025 2024 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $m $m $m $m $m $m $m $m Recurring fair value measurements at 31 Dec Assets Trading assets 267,638 92,418 6,097 366,153 236,593 71,574 6,675 314,842 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 46,436 61,267 25,360 133,063 39,331 56,694 19,744 115,769 Derivatives 1,798 233,759 2,183 237,740 1,859 264,629 2,149 268,637 Financial investments 300,795 81,522 2,805 385,122 258,371 78,088 2,734 339,193 Liabilities Trading liabilities 46,579 25,476 67 72,122 42,038 23,160 784 65,982 Financial liabilities designated at fair value 1,370 146,353 10,733 158,456 2,152 127,458 9,117 138,727 Derivatives 1,853 232,559 3,442 237,854 1,088 260,518 2,842 264,448 There were no material transfers between Level 1 and Level 2 during the reporting period. The table below provides the fair value levelling of assets held for sale and liabilities of disposal groups that have been classified as held for sale in accordance with IFRS 5. For further details, see Note 23 . Financial instruments carried at fair value and bases of valuation – assets and liabilities held for sale 2025 2024 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $m $m $m $m $m $m $m $m Recurring fair value measurements at 31 Dec Assets Trading assets 26 87 — 113 — — — — Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 6,327 24 — 6,351 2,967 9,018 2,575 14,560 Derivatives — 9 5 14 — 36 — 36 Financial investments 157 44 — 201 2,651 5,345 504 8,500 Liabilities Trading liabilities — — — — — — — — Financial liabilities designated at fair value 1,345 — — 1,345 — 130 — 130 Derivatives — 13 3 16 — 19 — 19 Fair value valuation bases Financial instruments measured at fair value using a valuation technique with significant unobservable inputs – Level 3 Assets Liabilities Financial investments Trading assets Designated and otherwise mandatorily measured at fair value through profit or loss Derivatives Total Trading liabilities Designated at fair value Derivatives Total $m $m $m $m $m $m $m $m $m Private equity including strategic investments 595 1 20,364 — 20,960 — 1 — 1 Structured notes — — — — — — 10,617 — 10,617 Other derivatives — — — 2,183 2,183 — — 3,442 3,442 Bonds 2,111 3,356 2,008 — 7,475 41 — — 41 Loans 21 1,667 1,565 — 3,253 11 — — 11 Other portfolios 78 1,073 1,423 — 2,574 15 115 — 130 At 31 Dec 2025 2,805 6,097 25,360 2,183 36,445 67 10,733 3,442 14,242 Private equity including strategic investments 552 1 17,705 — 18,258 — 1 — 1 Structured notes — — 3 — 3 — 9,113 — 9,113 Other derivatives — — — 2,149 2,149 — — 2,842 2,842 Bonds 1,978 2,173 758 — 4,909 27 — — 27 Loans 22 2,383 1,277 — 3,682 3 — — 3 Other portfolios 182 2,118 1 — 2,301 754 3 — 757 At 31 Dec 2024 2,734 6,675 19,744 2,149 31,302 784 9,117 2,842 12,743 HSBC Holdings plc Annual Report on Form 20-F 334 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Private equity including strategic investments The fair value of a private equity investment (including strategic investments) is estimated on the basis of an analysis of the investee’s financial position and results, risk profile, prospects and other factors; by reference to market valuations for similar entities quoted in an active market; the price at which similar companies have changed ownership; or from published net asset values (‘NAV’) received. If necessary, adjustments are made to the NAV of funds to obtain the best estimate of fair value. Structured notes The fair value of Level 3 structured notes is derived from the fair value of the underlying debt security, and the fair value of the embedded derivative is determined as described in the paragraph below on derivatives. These structured notes comprise principally equity-linked notes issued by HSBC, which provide the counterparty with a return linked to the performance of equity securities and other portfolios. Examples of the unobservable parameters include long-dated equity volatilities and correlations between equity prices, and interest and foreign exchange rates. Derivatives OTC derivative valuation models calculate the present value of expected future cash flows, based upon ‘no arbitrage’ principles. For many vanilla derivative products, the modelling approaches used are standard across the industry. For more complex derivative products, there may be some differences in market practice. Inputs to valuation models are determined from observable market data wherever possible, including prices available from exchanges, dealers, brokers or providers of consensus pricing. Certain inputs may not be observable in the market directly, but can be determined from observable prices via model calibration procedures or estimated from historical data or other sources. Bonds and loans The fair value input for bonds and secondary market loans is price, determined utilising market standard valuation techniques such as price-based, discounted cash flows, and internal models. Where uncertainty of inputs and assumptions exist in the determination of a fair value price and are significant, the position will be considered Level 3. Examples of such inputs are credit spreads, interest rate spreads, choice of comparables, earning projections and liquidity/observability of the underlying currency. Reconciliation of fair value measurements in Level 3 of the fair value hierarchy Movement in Level 3 financial instruments Assets Liabilities Financial investments Trading assets Designated and otherwise mandatorily measured at fair value through profit or loss Derivatives Trading liabilities Designated at fair value Derivatives $m $m $m $m $m $m $m At 1 Jan 2025 2,734 6,675 19,744 2,149 784 9,117 2,842 Total gains/(losses) recognised in profit or loss 4 154 1,487 1,291 ( 4 ) 919 2,210 –  net income/(losses) from financial instruments held for trading or managed on a fair value basis — 154 — 1,291 ( 4 ) 919 2,210 –  net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss — — 1,478 — — — — –  other income/(losses) 4 — 9 — — — — Total gains/(losses) recognised in other comprehensive income (‘OCI’) 1 255 236 84 150 21 608 174 Purchases 2 2,100 4,151 4,673 — 83 — — New issuances — 181 — — — 8,542 — Sales ( 195 ) ( 2,679 ) ( 389 ) — ( 19 ) — — Settlements ( 347 ) ( 1,814 ) ( 1,727 ) ( 1,073 ) ( 331 ) ( 5,352 ) ( 1,632 ) Transfers out ( 2,008 ) ( 2,018 ) ( 1,312 ) ( 901 ) ( 498 ) ( 5,282 ) ( 831 ) Transfers in 3 262 1,211 2,800 567 31 2,181 679 At 31 Dec 2025 2,805 6,097 25,360 2,183 67 10,733 3,442 Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2025 — 309 309 1,320 ( 19 ) ( 1,034 ) ( 2,304 ) –  net income/(losses) from financial instruments held for trading or managed on a fair value basis — 309 — 1,320 ( 19 ) — ( 2,304 ) –  net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss — — 302 — — — — –  other income/(losses) — — 7 — — ( 1,034 ) — HSBC Holdings plc Annual Report on Form 20-F 335 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Movement in Level 3 financial instruments (continued) Assets Liabilities Financial investments Trading assets Designated and otherwise mandatorily measured at fair value through profit or loss Derivatives Trading liabilities Designated at fair value Derivatives $m $m $m $m $m $m $m At 1 Jan 2024 2,618 4,306 19,788 2,069 478 10,928 2,569 Total gains/(losses) recognised in profit or loss ( 9 ) 280 896 1,037 18 496 1,268 –  net income/(losses) from financial instruments held for trading or managed on a fair value basis — 280 — 1,037 18 496 1,268 –  net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss — — 684 — — — — –  other income/(losses) ( 9 ) — 212 — — — — Total gains/(losses) recognised in other comprehensive income (‘OCI’) 1 ( 78 ) ( 115 ) ( 39 ) ( 36 ) ( 18 ) ( 45 ) ( 53 ) Purchases 1,670 4,170 6,261 — 924 — — New issuances — — — — — 6,521 — Sales ( 97 ) ( 1,477 ) ( 649 ) — ( 295 ) — — Settlements ( 1,011 ) ( 967 ) ( 6,476 ) ( 897 ) ( 307 ) ( 4,750 ) ( 568 ) Transfers out ( 438 ) ( 429 ) ( 278 ) ( 777 ) ( 29 ) ( 6,048 ) ( 1,346 ) Transfers in 79 907 241 753 13 2,015 972 At 31 Dec 2024 2,734 6,675 19,744 2,149 784 9,117 2,842 Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2024 — ( 150 ) 11 ( 1,377 ) ( 6 ) ( 94 ) ( 1,343 ) –  net income/(losses) from financial instruments held for trading or managed on a fair value basis — ( 150 ) — ( 1,377 ) ( 6 ) — ( 1,343 ) –  net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss — — ( 38 ) — — — — –  other income/(losses) — — 49 — — ( 94 ) — 1 Included in ‘financial investments: fair value gains/(losses)’ in the year and ‘exchange differences’ in the consolidated statement of comprehensive income. 2 Purchases were predominantly due to the growth of the Insurance business over the period. 3 Includes $ 2.3 b n of transfers in representing enhancements to the application of the levelling methodology, primarily impacting the Insurance business. Transfers between levels of the fair value hierarchy are deemed to occur at the end of each quarterly reporting period. Transfers are primarily attributable to changes in price transparency and in the assessment of observability. Effect of changes in significant unobservable assumptions to reasonably possible alternatives Sensitivity of fair values to reasonably possible alternative assumptions 2025 2024 Reflected in profit or loss Reflected in OCI Reflected in profit or loss Reflected in OCI Favourable changes Un- favourable changes Favourable changes Un- favourable changes Favourable changes Un- favourable changes Favourable changes Un- favourable changes $m $m $m $m $m $m $m $m Derivatives, trading assets and trading liabilities 1 483 ( 295 ) — — 481 ( 313 ) — — Financial assets and liabilities designated and otherwise mandatorily measured at fair value through profit or loss 1,750 ( 1,434 ) — — 1,434 ( 1,141 ) — — Financial investments — — 49 ( 49 ) 21 ( 21 ) 47 ( 50 ) At 31 Dec 2,233 ( 1,729 ) 49 ( 49 ) 1,936 ( 1,475 ) 47 ( 50 ) 1 ‘Derivatives, trading assets and trading liabilities’ are presented as one category to reflect the manner in which these instruments are risk-managed. T he sensitivity analysis aims to measure a range of fair values consistent with the application of a 95 % confidence interval. Methodologies take account of the nature of the valuation technique employed, as well as the availability and reliability of observable proxy and historical data. When the fair value of a financial instrument is affected by more than one unobservable assumption, the above table reflects the most favourable or the most unfavourable change from varying the assumptions individually. HSBC Holdings plc Annual Report on Form 20-F 336 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Key unobservable inputs to Level 3 financial instruments The following table lists key unobservable inputs to Level 3 financial instruments and provides the range of those inputs at 31 December 2025 . Quantitative information about significant unobservable inputs in Level 3 valuations Fair value 2025 2024 Assets Liabilities Key valuation techniques Key unobservable inputs Full range of inputs Full range of inputs $m $m Lower Higher Lower Higher Private equity including strategic investments 1 20,960 1 Price – Net asset value Current Value/Cost 0 75 0 291 Structured notes — 10,617 –  equity-linked notes — 7,773 Model – Option model Equity volatility 5 % 132 % 6 % 70 % Model – Option model Equity correlation 10 % 100 % 15 % 100 % –  Foreign exchange-linked notes — 862 Model – Option model Foreign exchange volatility 3 % 56 % 3 % 35 % –  other structured notes — 1,982 Derivatives 2,183 3,442 –  interest rate derivatives 745 966 securitisation swaps 98 358 Model - Discounted cash flow Prepayment rate 5 % 10 % 5 % 10 % long-dated swaptions 4 3 Model – Option model Interest rate volatility 5 % 20 % 9 % 30 % other interest rate derivatives 643 605 –  Foreign exchange derivatives 678 640 Foreign exchange options 320 299 Model – Option model Foreign exchange volatility 0 % 22 % 1 % 26 % other foreign exchange derivatives 358 341 –  equity derivatives 584 1,315 long-dated single stock options 110 476 Model – Option model Equity volatility 5 % 100 % 6 % 118 % other equity derivatives 474 839 –  credit derivatives 146 498 total return swaps 56 345 Market proxy Price 68 102 0 104 other credit derivatives 90 153 –  other derivatives 30 23 Bonds 7,475 41 Market proxy Price 0 3,342 0 140 Loans 3,253 11 Market proxy Price 0 112 0 103 Other portfolios 2 2,574 130 At 31 Dec 2025 36,445 14,242 1 ‘Private equity including strategic investments’ includes private equity, private credit and private equity fund, primarily held as part of our Insurance business and for strategic investments. 2 ‘Other portfolios’ includes a range of smaller asset holdings. The range of values above shows the highest and lowest unobservable inputs that have been used to value significant Level 3 exposures and reflects the diversity of the underlying financial instruments in scope and subsequent differentiation in pricing. Private equity including strategic investments The ‘private equity’ holdings include private equity investments and private equity funds held as limited partners. The key unobservable input is the current value of the underlying positions, determined using valuation techniques in line with the International Private Equity and Venture Capital Valuation Guidelines. The inputs represented are an appropriate range of inputs normalised across different exposure types. Prepayment rates Prepayment rates are a measure of the anticipated future speed at which a loan portfolio will be repaid in advance of the due date. They vary according to the nature of the loan portfolio and expectations of future market conditions, and may be estimated using a variety of evidence, such as prepayment rates implied from proxy observable security prices, current or historical prepayment rates and macroeconomic modelling. Market proxy Market proxy pricing may be used for an instrument when specific market pricing is not available but there is evidence from instruments with common characteristics. In some cases it might be possible to identify a specific proxy, but more generally evidence across a wider range of instruments will be used to understand the factors that influence current market pricing and the manner of that influence. Volatility Volatility is a measure of the anticipated future variability of a market price. It varies by underlying reference market price, and by strike and maturity of the option. Certain volatilities, typically those of a longer-dated nature, are unobservable and are estimated from observable data. The range of unobservable volatilities reflects the wide variation in volatility inputs by reference market price. HSBC Holdings plc Annual Report on Form 20-F 337 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Correlation Correlation is a measure of the inter-relationship between two market variables and is expressed as a number between minus one and one. It is used to value more complex instruments where the payout is dependent upon more than one market variable. There is a wide range of instruments for which correlation is an input, and consequently a wide range of both same-asset correlations and cross-asset correlations is used. In general, the range of same-asset correlations will be narrower than the range of cross-asset correlations. Unobservable correlations may be estimated based upon a range of evidence, including consensus pricing services, HSBC trade prices, proxy correlations and examination of historical price relationships. The range of unobservable correlations quoted in the table reflects the wide variation in correlation inputs by market variable pair. Inter-relationships between key unobservable inputs Key unobservable inputs to Level 3 financial instruments may not be independent of each other. As described above, market variables may be correlated. This correlation typically reflects the manner in which different markets tend to react to macroeconomic or other events. Furthermore, the effect of changing market variables on the HSBC portfolio will depend on HSBC’s net risk position in respect of each variable. HSBC Holdings Basis of valuing HSBC Holdings’ financial assets and liabilities measured at fair value 2025 2024 Level 1 Level 2 Total Level 1 Level 2 Total $m $m $m $m $m $m Recurring fair value measurement Assets at 31 Dec Trading assets — — — 709 — 709 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value — 67,217 67,217 — 61,286 61,286 Derivatives — 1,942 1,942 — 3,054 3,054 Liabilities at 31 Dec Financial liabilities designated at fair value — 52,907 52,907 — 41,582 41,582 Derivatives — 3,451 3,451 — 5,340 5,340 13 Fair values of financial instruments not carried at fair value Fair values of financial instruments not carried at fair value and bases of valuation Fair value Carrying amount Quoted market price Level 1 Observable inputs Level 2 Significant unobservable inputs Level 3 Total $m $m $m $m $m At 31 Dec 2025 Assets Loans and advances to banks 108,462 — 107,906 546 108,452 Loans and advances to customers 1 988,399 — 14,363 966,429 980,792 Reverse repurchase agreements – non-trading 298,392 — 298,545 — 298,545 Financial investments – at amortised cost 182,089 148,925 31,475 1,283 181,683 Liabilities Deposits by banks 97,952 — 97,981 — 97,981 Customer accounts 1,786,828 — 1,787,070 — 1,787,070 Repurchase agreements – non-trading 204,974 — 204,966 — 204,966 Debt securities in issue 99,675 — 99,530 1,490 101,020 Subordinated liabilities 28,406 — 31,617 — 31,617 At 31 Dec 2024 Assets Loans and advances to banks 102,039 — 101,007 1,048 102,055 Loans and advances to customers 930,658 — 11,435 906,208 917,643 Reverse repurchase agreements – non-trading 252,549 — 252,598 — 252,598 Financial investments – at amortised cost 153,973 120,843 29,493 724 151,060 Liabilities Deposits by banks 73,997 — 74,025 — 74,025 Customer accounts 1,654,955 — 1,655,151 — 1,655,151 Repurchase agreements – non-trading 180,880 — 180,873 — 180,873 Debt securities in issue 105,785 — 105,689 954 106,643 Subordinated liabilities 25,958 — 28,262 — 28,262 1 Includes loans and advances to customers with observable inputs and short maturities. HSBC Holdings plc Annual Report on Form 20-F 338 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Fair values of financial instruments not carried at fair value and bases of valuation – assets and disposal groups held for sale Fair value Carrying amount Quoted market price Level 1 Observable inputs Level 2 Significant unobservable inputs Level 3 Total $m $m $m $m $m At 31 Dec 2025 Assets Loans and advances to banks 45 — 45 — 45 Loans and advances to customers 3,493 — 1,303 2,190 3,493 Reverse repurchase agreements – non-trading — — — — — Financial investments – at amortised cost 93 84 9 — 93 Liabilities Deposits by banks 131 — 131 — 131 Customer accounts 16,173 — 16,173 — 16,173 Repurchase agreements – non-trading — — — — — Debt securities in issue 495 — 495 — 495 Subordinated liabilities — — — — — At 31 Dec 2024 Assets Loans and advances to banks 144 — 144 — 144 Loans and advances to customers 977 — 11 966 977 Reverse repurchase agreements – non-trading — — — — — Financial investments – at amortised cost — — — — — Liabilities Deposits by banks — — — — — Customer accounts 5,399 — 5,399 — 5,399 Repurchase agreements – non-trading — — — — — Debt securities in issue — — — — — Subordinated liabilities — — — — — Other financial instruments not carried at fair value are typically short term in nature and reprice to current market rates frequently. Accordingly, their carrying amount is a reasonable approximation of fair value. They include cash and balances at central banks, Hong Kong Government certificates of indebtedness and Hong Kong currency notes in circulation, all of which are measured at amortised cost. Valuation Fair value is an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This may be different from the theoretical economic value attributed from an instrument’s cash flows over its expected future life. Our valuation methodologies and assumptions in determining fair values for which no observable market prices are available may differ from those of other companies. Loans and advances to banks and customers To determine the fair value of loans and advances to banks and customers, loans are segregated into portfolios of similar characteristics. Fair values are based on observable market transactions, when available. When they are unavailable, fair values are estimated using valuation models incorporating a range of input assumptions. These assumptions may include: value estimates from third-party brokers reflecting over-the-counter trading activity; forward-looking discounted cash flow models, taking account of expected customer prepayment rates, using assumptions that HSBC believes are consistent with those that would be used by market participants in valuing such loans; recent origination pricing for similar loans; and trading inputs from other market participants including observed primary and secondary trades. From time to time, we may engage a third-party valuation specialist to measure the fair value of a pool of loans. The fair value of loans reflects expected credit losses at the balance sheet date and estimates of market participants’ expectations of credit losses over the life of the loans, and the fair value effect of repricing between origination and the balance sheet date. For credit-impaired loans, fair value is estimated by discounting the future cash flows over the time period they are expected to be recovered. Financial investments The fair values of listed financial investments are determined using bid market prices. The fair values of unlisted financial investments are determined using valuation techniques that incorporate the prices and future earnings streams of equivalent quoted securities. Deposits by banks and customer accounts The fair values of on-demand deposits are approximated by their carrying amount. For deposits with longer-term maturities, fair values are estimated using discounted cash flows, applying current rates offered for deposits of similar remaining maturities. Debt securities in issue and subordinated liabilities Fair values in debt securities in issue and subordinated liabilities are determined using quoted market prices at the balance sheet date where available, or by reference to quoted market prices for similar instruments. Repurchase and reverse repurchase agreements – non-trading Carrying amounts of repurchase and reverse repurchase agreements that are held on a non-trading basis provide approximate fair values. This is due to the fact that balances are generally short dated. HSBC Holdings plc Annual Report on Form 20-F 339 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC Holdings The methods used by HSBC Holdings to determine fair values of financial instruments for the purposes of measurement and disclosure are described above. Fair values of HSBC Holdings’ financial instruments not carried at fair value on the balance sheet 2025 2024 Carrying amount Fair value 1 Carrying amount Fair value 1 $m $m $m $m Assets at 31 Dec Loans and advances to HSBC undertakings 40,500 41,288 37,677 38,359 Financial investments – at amortised cost 15,470 15,470 10,328 10,335 Liabilities at 31 Dec Debt securities in issue 69,024 70,533 64,320 65,123 Subordinated liabilities 26,114 29,073 23,548 25,911 1 Fair values (other than Financial investments which are Level 1) were determined using valuation techniques with observable inputs (Level 2). 14 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 2025 2024 Designated at fair value Mandatorily measured at fair value Total Designated at fair value Mandatorily measured at fair value Total $m $m $m $m $m $m Securities 2,820 119,381 122,201 2,406 104,093 106,499 –  treasury and other eligible bills 778 212 990 732 393 1,125 –  debt securities 2,042 68,728 70,770 1,674 59,904 61,578 –  equity securities — 50,441 50,441 — 43,796 43,796 Loans and advances to banks and customers 1,122 7,047 8,169 951 6,120 7,071 Other — 2,693 2,693 — 2,199 2,199 At 31 Dec 3,942 129,121 133,063 3,357 112,412 115,769 15 Derivatives Notional contract amounts and fair values of derivatives by product contract type held by HSBC Notional contract amount Fair value – Assets Fair value – Liabilities Trading Hedging Trading Hedging Total Trading Hedging Total $m $m $m $m $m $m $m $m Foreign exchange 13,639,520 108,585 111,012 1,233 112,245 110,786 662 111,448 Interest rate 17,272,408 423,761 190,296 4,946 195,242 182,569 4,565 187,134 Equities 908,649 — 15,660 — 15,660 21,311 — 21,311 Credit 164,160 — 1,294 — 1,294 2,212 — 2,212 Commodity and other 191,761 — 10,542 — 10,542 12,992 — 12,992 Gross total fair values 32,176,498 532,346 328,804 6,179 334,983 329,870 5,227 335,097 Offset (Note 31 ) ( 97,243 ) ( 97,243 ) At 31 Dec 2025 32,176,498 532,346 328,804 6,179 237,740 329,870 5,227 237,854 Foreign exchange 11,706,591 82,161 142,055 2,738 144,793 133,910 75 133,985 Interest rate 17,316,173 406,109 209,794 4,790 214,584 212,980 4,930 217,910 Equities 768,732 — 17,116 — 17,116 20,643 — 20,643 Credit 143,136 — 1,756 — 1,756 1,769 — 1,769 Commodity and other 118,180 — 3,134 — 3,134 2,887 — 2,887 Gross total fair values 30,052,812 488,270 373,855 7,528 381,383 372,189 5,005 377,194 Offset (Note 31 ) ( 112,746 ) ( 112,746 ) At 31 Dec 2024 30,052,812 488,270 373,855 7,528 268,637 372,189 5,005 264,448 The notional contract amounts of derivatives held for trading purposes and derivatives designated in hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk. Notional contract amounts and fair values of derivatives by product contract type held by HSBC Holdings with subsidiaries Notional contract amount Assets Liabilities Trading Hedging Trading Hedging Total Trading Hedging Total $m $m $m $m $m $m $m $m Foreign exchange 48,660 681 570 10 580 941 — 941 Interest rate 21,304 91,600 801 561 1,362 358 2,152 2,510 At 31 Dec 2025 69,964 92,281 1,371 571 1,942 1,299 2,152 3,451 Foreign exchange 51,437 — 796 — 796 1,015 — 1,015 Interest rate 30,535 90,074 1,544 714 2,258 487 3,838 4,325 At 31 Dec 2024 81,972 90,074 2,340 714 3,054 1,502 3,838 5,340 HSBC Holdings plc Annual Report on Form 20-F 340 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Use of derivatives For details regarding the use of derivatives, see page 202 under ‘Market risk’. Trading derivatives Most of HSBC’s derivative transactions relate to sales and trading activities. Sales activities include the structuring and marketing of derivative products to customers to enable them to take, transfer, modify or reduce current or expected risks. Trading activities include market-making and risk management. Market-making entails quoting bid and offer prices to other market participants for the purpose of generating revenue based on spread and volume. Risk management activity is undertaken to manage the risk arising from client transactions, with the principal purpose of retaining client margin. Other derivatives classified as held for trading include non-qualifying hedging derivatives. Substantially all of HSBC Holdings’ derivatives entered into with subsidiaries are managed in conjunction with financial liabilities. Hedge accounting derivatives HSBC applies hedge accounting to manage the following risks: interest rate and foreign exchange risks. Further details of how these risks arise and how they are managed by the Group can be found in the ‘Risk review’. Hedged risk components HSBC designates a portion of cash flows of a financial instrument or a group of financial instruments for a specific interest rate or foreign currency risk component in a fair value or cash flow hedge. The designated risks and portions are either contractually specified or otherwise separately identifiable components of the financial instrument that are reliably measurable. Risk-free or benchmark interest rates generally are regarded as being both separately identifiable and reliably measurable, except for the Interest Rate Benchmark Reform Phase 2 transition where HSBC designates alternative benchmark rates as the hedged risk which may not have been separately identifiable upon initial designation, provided HSBC reasonably expects it will meet the requirement within 24 months from the first designation date. The designated risk components account for a significant portion of the overall changes in fair value or cash flows of the hedged items. HSBC uses net investment hedges to hedge the structural foreign exchange risk related to net investments in foreign operations including subsidiaries and branches whose functional currencies are different from that of the parent. When hedging with foreign exchange forward contracts, the spot rate component of the foreign exchange risk is designated for an amount of net assets as the hedged risk. Sources of hedge ineffectiveness may arise from basis risk, including but not limited to the discount rates used for calculating the fair value of derivatives, hedges using instruments with a non-zero fair value, and notional and timing differences between the hedged items and hedging instruments. Fair value hedges HSBC enters into fixed-for-floating interest rate swaps to manage the exposure to changes in fair value caused by movements in market interest rates on certain fixed-rate financial instruments that are not measured at fair value through profit or loss, including debt securities held and issued. HSBC hedging instrument by hedged risk Hedging instrument Carrying amount Notional amount 1,2 Assets Liabilities Balance sheet presentation Change in fair value 3 Hedged risk $m $m $m $m Interest rate 4 233,741 3,851 4,283 Derivatives ( 661 ) At 31 Dec 2025 233,741 3,851 4,283 ( 661 ) Interest rate 4 190,332 4,180 4,411 Derivatives ( 449 ) At 31 Dec 2024 190,332 4,180 4,411 ( 449 ) 1 The notional contract amounts of derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk. 2 The notional amount of non-dynamic fair value hedges is equal to $ 76,349 m (2024: $ 71,916 m ), of which the weighted-average maturity date is April 2032 and the weighted-average swap rate is 3.15 % (2024: 3.24 % ). 3 Used in effectiveness testing, which uses the full fair value change of the hedging instrument not excluding any component. 4 The hedged risk ‘interest rate’ includes inflation risk. HSBC Holdings plc Annual Report on Form 20-F 341 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC hedged item by hedged risk Hedged item Ineffectiveness Carrying amount Accumulated fair value hedge adjustments included in carrying amount 1 Change in fair value 2 Recognised in profit and loss Assets Liabilities Assets Liabilities Balance sheet presentation Profit and loss presentation Hedged risk $m $m $m $m $m $m Interest rate 3 115,156 ( 1,091 ) Financial investments - measured at fair value through other comprehensive income 1,513 ( 2 ) Net income from financial instruments held for trading or managed on a fair value basis 2,845 31 Financial investments - measured at amortised cost 18 26,052 62 — Loans and advances to customers 157 — — Reverse repurchase agreements – non- trading — 53,482 ( 370 ) Debt securities in issue ( 586 ) 201 — Deposits by banks 2 2,237 — Customer accounts 1 25,818 ( 610 ) Subordinated liabilities 4 ( 446 ) At 31 Dec 2025 144,053 81,738 ( 998 ) ( 980 ) 659 ( 2 ) Interest rate 3 93,055 ( 2,701 ) Financial investments - measured at fair value through other comprehensive income ( 728 ) ( 8 ) Net income from financial instruments held for trading or managed on a fair value basis 492 11 Financial investments - measured at amortised cost ( 14 ) 13,915 ( 104 ) Loans and advances to customers 16 — — Reverse repurchase agreements – non- trading — 72,576 ( 1,800 ) Debt securities in issue 1,110 207 — Customer accounts — 1,205 ( 266 ) Subordinated liabilities 57 At 31 Dec 2024 107,462 73,988 ( 2,794 ) ( 2,066 ) 441 ( 8 ) 1 The accumulated amount of fair value hedge adjustments remaining in the statement of financial position for hedged items that have ceased to be adjusted for hedging gains and losses were liabilities of $ 257 m (2024: $ 311 m ) for FVOCI assets and assets of $ 733 m (2024: $ 745 m ) for debt issued. 2 Used in effectiveness testing, which comprise an amount attributable to the designated hedged risk that can be a risk component. 3 The hedged risk ‘interest rate’ includes inflation risk. 4 From 2025, HSBC Holdings is presenting separately the carrying amount of 'Subordinated liabilities' hedged items from 'Debt securities in issue'. HSBC Holdings hedging instrument by hedged risk Hedging instrument Carrying amount Notional amount 1,2 Assets Liabilities Balance sheet presentation Change in fair value 3 Hedged risk $m $m $m $m Foreign currency 681 10 — Derivatives 9 Interest rate 91,600 561 2,152 Derivatives 1,128 At 31 Dec 2025 92,281 571 2,152 1,137 Foreign currency — — — Derivatives — Interest rate 90,074 714 3,838 Derivatives ( 1,103 ) At 31 Dec 2024 90,074 714 3,838 ( 1,103 ) 1 The notional contract amounts of derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk. 2 The notional amount of non-dynamic fair value hedges is equal to $ 92,281 m (2024: $ 90,074 m ), of which the weighted-average maturity date is July 2031 and the weighted-average swap rate is 2.76 % (2024: 2.78 % ). The majority of these hedges are internal to the Group. 3 Used in effectiveness testing, comprising the full fair value change of the hedging instrument not excluding any component. HSBC Holdings plc Annual Report on Form 20-F 342 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC Holdings hedged item by hedged risk Hedged item Ineffectiveness Carrying amount Accumulated fair value hedge adjustments included in carrying amount 1 Change in fair value 2 Recognised in profit and loss Assets Liabilities Assets Liabilities Balance sheet presentation Profit and loss presentation Hedged risk $m $m $m $m $m $m Foreign currency 666 — ( 9 ) — Investment in subsidiaries ( 9 ) Interest rate — 55,770 — ( 710 ) Debt securities in issue ( 870 ) ( 7 ) Net income from financial instruments held for trading or managed on a fair value basis — 24,488 — ( 361 ) Subordinated liabilities 3 ( 447 ) 9,225 — ( 39 ) — Loans and advances to banks 183 At 31 Dec 2025 9,891 80,258 ( 48 ) ( 1,072 ) ( 1,144 ) ( 7 ) Foreign currency — — — — Investment in subsidiaries — Interest rate — 78,402 — ( 2,423 ) Debt securities in issue 861 ( 9 ) Net income from financial instruments held for trading or managed on a fair value basis 7,769 — ( 244 ) — Loans and advances to banks 233 At 31 Dec 2024 7,769 78,402 ( 244 ) ( 2,423 ) 1,094 ( 9 ) 1 The accumulated amount of fair value hedge adjustments remaining in the statement of financial position for hedged items that have ceased to be adjusted for hedging gains and losses were assets of $ 1,142 m (2024: $ 1,216 m ) for debt issued. 2 Used in effectiveness testing, comprising amount attributable to the designated hedged risk that can be a risk component. 3 From 2025, HSBC Holdings is presenting separately the carrying amount of 'Subordinated liabilities' hedged items from 'Debt securities in issue'. For some debt securities held, HSBC manages interest rate risk in a dynamic risk management strategy. The assets in scope of this strategy are high-quality fixed-rate debt securities, which may be sold to meet liquidity and funding requirements. The interest rate risk of the HSBC fixed-rate debt securities issued is managed in a non-dynamic risk management strategy. Cash flow hedges HSBC’s cash flow hedging instruments consist principally of interest rate swaps and cross-currency swaps that are used to manage the variability in future interest cash flows of non-trading financial assets and liabilities, arising due to changes in market interest rates and foreign-currency basis. HSBC applies macro cash flow hedging for interest rate risk exposures on portfolios of replenishing current and forecasted issuances of non- trading assets and liabilities that bear interest at variable rates, including rolling such instruments. The amounts and timing of future cash flows, representing both principal and interest flows, are projected for each portfolio of financial assets and liabilities on the basis of their contractual terms and other relevant factors, including estimates of prepayments and defaults. The aggregate cash flows representing both principal balances and interest cash flows across all portfolios are used to determine the effectiveness and ineffectiveness. Macro cash flow hedges are considered to be dynamic hedges. HSBC also hedges the variability in future cash flows on foreign-denominated financial assets and liabilities arising due to changes in foreign exchange market rates with cross-currency swaps, which are considered dynamic hedges. Hedging instrument by hedged risk Hedging instrument Hedged item Ineffectiveness Carrying amount Change in fair value 2 Change in fair value 3 Recognised in profit and loss Profit and loss presentation Notional amount 1 Assets Liabilities Balance sheet presentation Hedged risk $m $m $m $m $m $m Foreign currency 62,334 1,138 278 Derivatives ( 376 ) ( 376 ) — Net income from financial instruments held for trading or managed on a fair value basis Interest rate 190,020 1,095 282 Derivatives 1,256 1,267 ( 11 ) At 31 Dec 2025 252,354 2,233 560 880 891 ( 11 ) Foreign currency 47,194 2,088 68 Derivatives 2,451 2,451 — Net income from financial instruments held for trading or managed on a fair value basis Interest rate 215,777 619 519 Derivatives ( 2,954 ) ( 2,964 ) 10 At 31 Dec 2024 262,971 2,707 587 ( 503 ) ( 513 ) 10 1 The notional contract amounts of derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk. 2 Used in effectiveness testing, comprising the full fair value change of the hedging instrument not excluding any component. 3 Used in effectiveness assessment, comprising amount attributable to the designated hedged risk that can be a risk component. HSBC Holdings plc Annual Report on Form 20-F 343 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Reconciliation of equity and analysis of other comprehensive income by risk type Interest rate Foreign currency $m $m Cash flow hedging reserve at 1 Jan 2025 ( 1,056 ) ( 23 ) Fair value gains/(losses) 1,267 ( 376 ) Fair value (gains)/losses reclassified from the cash flow hedge reserve to the income statement in respect of: Hedged items that have affected profit or loss 1 807 574 Income taxes ( 541 ) ( 31 ) Others ( 49 ) ( 2 ) Cash flow hedging reserve at 31 Dec 2025 428 142 Cash flow hedging reserve at 1 Jan 2024 ( 901 ) ( 132 ) Fair value gains/(losses) ( 2,964 ) 2,451 Fair value (gains)/losses reclassified from the cash flow hedge reserve to the income statement in respect of: Hedged items that have affected profit or loss 1 2,529 ( 2,430 ) Income taxes 81 1 Others 199 87 Cash flow hedging reserve at 31 Dec 2024 ( 1,056 ) ( 23 ) 1 Hedged items that have affected profit or loss are primarily recorded within interest income. Net investment hedges The Group applies hedge accounting in respect of certain net investments in non-US dollar functional currency foreign operations for changes in spot exchange rates only. Hedging could be undertaken for Group structural exposure to changes in the US dollar to foreign currency exchange rates using forward foreign exchange contracts or by financing with foreign currency borrowings. An economic relationship exists between the hedged net investment and hedging instrument due to the shared foreign currency risk exposure. For further details of our structural foreign exchange exposures, see page . The aggregate positions at the reporting date and the performance indicators of both live and de-designated hedges are summarised below. Hedges of net investment in foreign operations Carrying amount Nominal amount Amounts recognised in OCI 1 Change in fair value 2 Hedge ineffectiveness recognised in income statement Derivative assets Derivative liabilities Description of hedged risk $m $m $m $m $m $m 2025 Pound sterling-denominated structural foreign exchange 58 ( 188 ) 17,114 ( 291 ) ( 1,124 ) — Swiss franc-denominated structural foreign exchange — ( 7 ) 615 13 ( 76 ) — Hong Kong dollar-denominated structural foreign exchange 7 — 5,761 ( 29 ) ( 2 ) — Other structural foreign exchange 3 30 ( 189 ) 22,761 116 ( 791 ) — Total 95 ( 384 ) 46,251 ( 191 ) ( 1,993 ) — 2024 Pound sterling-denominated structural foreign exchange 397 ( 1 ) 15,407 833 229 — Swiss franc-denominated structural foreign exchange 10 — 556 89 40 — Hong Kong dollar-denominated structural foreign exchange 1 ( 3 ) 5,844 ( 27 ) ( 26 ) — Other structural foreign exchange 3 242 ( 3 ) 13,160 907 499 — Total 650 ( 7 ) 34,967 1,803 742 — 1 Amount recognised in OCI for Swiss franc includes $ 110 m (2024: $ 110 m ) related to de-designated hedge. 2 Used in effectiveness assessment, comprising amount attributable to the designated hedged risk that can be a risk component. 3 Other currencies include Euro, New Taiwan dollar, Singapore dollar, Polish zloty, South Korean won, UAE dirham, Indian rupee, Chinese renminbi, Kuwaiti dinar, Qatari riyal, Indonesian rupiah, Thai baht, Malaysian ringgit and Philippine peso. 16 Financial investments Carrying amount of financial investments 2025 2024 $m $m Financial investments measured at fair value through other comprehensive income 385,122 339,193 –  treasury and other eligible bills 105,075 112,705 –  debt securities 277,867 224,496 –  equity securities 1,755 1,569 –  other instruments 425 423 Debt instruments measured at amortised cost 182,089 153,973 –  treasury and other eligible bills 23,445 22,148 –  debt securities 158,644 131,825 At 31 Dec 567,211 493,166 HSBC Holdings plc Annual Report on Form 20-F 344 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Equity instruments measured at fair value through other comprehensive income Fair value Dividends recognised Type of equity instruments $m $m Investments required by central institutions 634 27 Business facilitation 1,045 28 Others 76 2 At 31 Dec 2025 1,755 57 Investments required by central institutions 620 29 Business facilitation 886 29 Others 63 2 At 31 Dec 2024 1,569 60 Weighted average yields of investment debt securities Up to 1 year 1 to 5 years 5 to 10 years Over 10 years Yield Yield Yield Yield % % % % Debt securities measured at fair value through other comprehensive income US Treasury 2.9 3.7 2.3 2.3 US Government agencies — 3.0 4.4 3.5 US Government-sponsored agencies 1.8 1.6 4.1 1.8 UK Government — 3.8 2.6 1.9 Hong Kong Government 1.4 2.5 2.7 — Other governments 2.8 4.2 4.3 2.2 Asset-backed securities — 4.4 3.9 3.3 Corporate debt and other securities 3.2 3.9 4.2 1.3 Debt securities measured at amortised cost US Treasury 3.2 3.8 3.7 2.0 US Government agencies 4.5 4.3 4.0 4.7 US Government-sponsored agencies — 2.9 3.7 2.9 UK Government — 3.3 3.0 — Hong Kong Government 2.5 2.7 — — Other governments 3.2 3.1 2.5 8.0 Asset-backed securities — — 7.3 — Corporate debt and other securities 3.2 3.4 3.8 4.8 The maturity distributions of ABSs are presented in the above table on the basis of contractual maturity dates. The weighted average yield for each range of maturities is calculated by dividing the annualised interest income for the year ended 31 December 2025 by the book amount of debt securities at that date. The yields do not include the effect of related derivatives. HSBC Holdings HSBC Holdings carrying amount of financial investments 2025 2024 $m $m Debt instruments measured at amortised cost Treasury and other eligible bills 15,470 9,556 Debt securities — 772 At 31 Dec 15,470 10,328 17 Assets pledged, collateral received and assets transferred Assets pledged 1 Financial assets pledged as collateral 2025 2024 $m $m Treasury bills and other eligible securities 23,482 17,713 Loans and advances to banks 16,452 14,880 Loans and advances to customers 20,416 24,524 Debt securities 124,971 91,975 Equity securities 51,213 51,642 Other 61,594 63,386 Assets pledged at 31 Dec 298,128 264,120 The value of assets pledged to secure liabilities may be greater than the book value of assets utilised as collateral. For example, in the case of securitisations and covered bonds, the amount of liabilities issued plus mandatory over-collateralisation is less than the book value of the pool of assets available for use as collateral. This is also the case where assets are placed with a custodian or a settlement agent that has a floating charge over all the assets placed to secure any liabilities under settlement accounts. HSBC Holdings plc Annual Report on Form 20-F 345 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements These transactions are conducted under terms that are usual and customary for collateralised transactions including, where relevant, standard securities lending and borrowing, repurchase agreements and derivative margining. HSBC places both cash and non-cash collateral in relation to derivative transactions. Hong Kong currency notes in circulation are secured by the deposit of funds in respect of which the Hong Kong Government certificates of indebtedness are held. Financial assets pledged as collateral which the counterparty has the right to sell or repledge 2025 2024 $m $m Trading assets 95,938 84,863 Financial investments 64,163 47,248 At 31 Dec 160,101 132,111 Collateral received 1 The fair value of assets accepted as collateral relating primarily to standard securities lending, reverse repurchase agreements, swaps of securities and derivative margining that HSBC is permitted to sell or repledge in the absence of default was $ 647.7 bn ( 2024 : $ 515.3 bn). The fair value of any such collateral sold or repledged was $ 378.8 bn ( 2024 : $ 293.5 bn). HSBC is obliged to return equivalent securities. These transactions are c onducted under terms that are usual and customary to standard securities lending, reverse repurchase agreements and derivative margining. Assets transferred 1 The assets pledged include transfers to third parties that do not qualify for derecognition, including secured borrowings such as debt securities held by counterparties as collateral under repurchase agreements and equity securities lent under securities lending agreements, as well as swaps of equity and debt securities. For secured borrowings, the transferred asset collateral continues to be recognised in full while a related liability, reflecting the Group’s obligation to repurchase the assets for a fixed price at a future date, is also recognised on the balance sheet. Where securities are swapped, the transferred asset continues to be recognised in full. There is no associated liability as the non-cash collateral received is not recognised on the balance sheet. The Group is unable to use, sell or pledge the transferred assets for the duration of the transaction, and remains exposed to interest rate risk and credit risk on these pledged assets. Transferred financial assets not qualifying for full derecognition and associated financial liabilities Carrying amount of: Transferred assets Associated liabilities $m $m At 31 Dec 2025 Repurchase agreements 109,524 96,980 Securities lending agreements 62,679 2,005 At 31 Dec 2024 Repurchase agreements 83,585 75,625 Securities lending agreements 58,232 4,361 1 Excludes assets classified as held for sale . 18 Interests in associates and joint ventures Carrying amount of HSBC’s interests in associates and joint ventures 2025 2024 $m $m Interests in associates 29,469 28,777 Interests in joint ventures 108 132 Interests in associates and joint ventures 29,577 28,909 Principal associates of HSBC 2025 2024 Carrying amount Fair value 1 Carrying amount Fair value 1 $m $m $m $m Bank of Communications Co., Limited 22,456 11,713 22,367 11,631 Saudi Awwal Bank 5,511 5,499 5,027 5,705 1 Principal associates are listed on recognised stock exchanges. The fair values are based on the quoted market prices of the shares held (Level 1 in the fair value hierarchy). Principal associates of HSBC (continued) At 31 Dec 2025 Jurisdiction of incorporation and principal place of business Principal activity HSBC’s interest 1 % Bank of Communications Co., Limited Mainland China Banking services 16.00 Saudi Awwal Bank Saudi Arabia Banking services 31.00 1 The Group’s interest in Bank of Communications Co., Limited (‘BoCom’) reduced from 19.03 % to 16.00 % following the completion of a capital issuance by BoCom on 17 June 2025. There has been no percentage change in HSBC’s shareholding interest in the Saudi Awwal Bank when compared with 2024. HSBC Holdings plc Annual Report on Form 20-F 346 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Share of profit in associates and joint ventures 2025 2024 2023 $m $m $m Bank of Communications Co., Limited 2,132 2,241 2,250 Saudi Awwal Bank 665 596 538 Other associates and joint ventures 114 75 19 Share of profit in associates and joint ventures 2,911 2,912 2,807 Less: Impairment of interest in BoCom ( 1,000 ) — ( 3,000 ) A list of all associates and joint ventures is set out in Note 38 . Bank of Communications Co., Limited The results for the period ended 31 December 2025 included a $ 1.1 b n loss from the dilution of our shareholding and a $ 1.0 b n impairment to the carrying amount of the Group’s interest in BoCom. The Group’s interest in BoCom reduced from 19.03 % to 16.00 % following the completion of a capital issuance by BoCom on 17 June 2025. The dilution of the Group’s interest resulted in a pre-tax loss of $ 1.1 b n, recognised in 'Other operating income/(expense)' in the Group’s consolidated income statement. The loss is not deductible for tax purposes as a c onsequence of our shareholding in BoCom being held for long-term investment purposes. In addition, the Group’s impairment test on the carrying amount at 30 June 2025 resulted in an impairment of $ 1.0 b n, as the recoverable amount as determined by a value-in-use calculation was lower than the carrying amount. The impairment was recognised within 'Impairment of interest in associate'. Consistent with prior periods, our value-in-use (‘VIU’) calculation uses both historical experience and market participant views to estimate future cash flows, relevant discount rates and associated capital assumptions. No further impairment (or reversal) was required for the period from 1 July 2025 to 31 December 2025 based on results of the quarterly impairment tests performed. The impacts of the capital issuance have been incorporated in both the carrying amount and the VIU. The VIU assumptions incorporate updated expectations, taking into account both the impact of the capital issuance on BoCom’s financial position, and the latest macroeconomic, policy and industry factors in mainland China. We remain strategically committed to mainland China and continue our valued, strategic partnership with BoCom. HSBC’s Interest The Group’s investment in BoCom continues to be classified as an associate. Significant influence in BoCom was established with consideration of all relevant factors, including the Group’s latest shareholding, representation on BoCom’s Board of Directors, and participation in a resource and experience sharing agreement (‘RES’). Under the RES, HSBC staff have been seconded to assist in the maintenance of BoCom’s financial and operating policies. Investments in associates are recognised using the equity method of accounting in accordance with IAS 28 ‘Investments in Associates and Joint Ventures’, whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group’s share of associate’s net assets. An impairment test is required if there is any indication of impairment or reversal. The fair value of the Group’s investment in BoCom had been below its carrying amount. No impairment (or reversal) was required for the year ended 31 December 2024. If the Group did not have significant influence in BoCom, the investment would be carried at fair value rather than the current carrying amount . Impairment testing The Group’s impairment test at 30 June 2025 concluded that there were indications of impairment. As part of this assessment, an impairment test on the carrying amount with an updated VIU calculation was performed which resulted in an impairment of $ 1.0 b n , as the recoverable amount as determined by the VIU calculation was lower than the carrying amount. The impairment was recognised within 'Impairment of interest in associate'. The impairment loss is not deductible for tax purposes. At 31 December 2025, no further impairment (or reversal) was required and the investment had a carrying amount of $ 22.5 b n (2024: $ 22.4 b n) and a fair value of $ 11.7 b n (2024: $ 11.6 b n). Basis of recoverable amount The VIU calculation uses discounted cash flow projections based on management’s best estimates of future earnings available to ordinary shareholders prepared in accordance with IAS 36 ’Impairment of Assets’. Those cash flows used estimates based on BoCom’s current condition and so do not include estimated cash flows arising from uncommitted future actions that may affect the performance of the investment which will be considered at the relevant time should they arise. Significant management judgement is required in arriving at the best estimate. The VIU may increase or decrease depending on the effect of changes to model inputs. The main model inputs are described below and are based on factors observed at period-end. The factors that could result in increases or reductions in the VIU include changes in BoCom’s short-term performance, a change in regulatory capital requirements or revisions to the forecast of BoCom’s future profitability. There are two main components to the VIU calculation. The first component is management’s best estimate of BoCom’s earnings. Forecast earnings growth over the short to medium term continues to be lower than recent (within the last five years ) actual growth, and reflects the impact of recent macroeconomic, policy and industry factors in mainland China. As a result of management‘s intent to continue to retain its investment for the long term, earnings beyond the short to medium term are extrapolated into perpetuity using a long-term growth rate to derive a terminal value, which comprises the majority of the VIU. The second component is the capital maintenance charge (‘CMC’), which is management’s forecast of the earnings that need to be withheld in order for BoCom to meet capital requirements over the forecast period, meaning that CMC is deducted when arriving at management’s estimate of future earnings available to ordinary shareholders. The CMC reflects the revised capital requirements arising from revisions of the ratio of risk-weighted assets to total assets assumption. The principal inputs to the CMC calculation include estimates of asset growth, the ratio of risk-weighted assets to total assets and the expected capital requirements. An increase in the CMC as a result of a change to these principal inputs would reduce VIU. Additionally, management considers other qualitative factors, to ensure that the inputs to the VIU calculation remain appropriate. HSBC Holdings plc Annual Report on Form 20-F 347 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Key assumptions in value in use calculation We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36: – Long-term profit growth rate: 3.00 % (2024: 3.00 % ) for periods after 2029, which does not exceed forecast GDP growth in mainland China and is similar to forecasts by external analysts. – Long-term asset growth rate: 3.25 % (2024: 3.25 % ) for periods after 2029, which is the rate that assets are expected to grow to achieve long- term profit growth of 3.00 % . – Discount rate: 8.08 % (2024: 8.53 % ), which is based on a capital asset pricing model (‘CAPM’), using market data. The discount rate used is within the range of 7.1 % to 8.7 % (2024: 7.1 % to 8.8 % ) indicated by the CAPM, and decreased primarily as a consequence of a market-driven reduction in the risk-free rate. – Expected credit losses (‘ECL’) as a percentage of loans and advances to customers: ranges from 0.67 % to 0.87 % (2024: 0.74 % to 0.93 % ) in the short to medium term, reflecting reported credit experience in mainland China. For periods after 2029, the ratio is 0.87 % (2024: 0.97 % ), reflecting the anticipated continuation of BoCom’s lower average ECL as a percentage of loans and advances to customers experienced in recent years. – Risk-weighted assets as a percentage of total assets: ranges from 62.0 % to 64.2 % (2024: 62.0 % to 62.5 % ) in the short to medium term, reflecting higher risk-weights in the short term followed by an expected reversion to recent historical levels. For periods after 2029, the ratio is 62.0 % (2024: 62.0 % ), which continues to be similar to BoCom’s actual results in recent years. – Loans and advances to customers growth rate: ranges from 7.5 % to 8.0 % (2024: 7.5 % to 9.5 % ) in the short to medium term, which is similar to BoCom’s actual results in recent years. Decreases in the forecast growth rate of loans and advances to customers result in lower forecast ECL. – Operating income growth rate: ranges from 0.5 % to 7.4 % (2024: 0.1 % to 9.9 % ) in the short to medium term, which is similar to BoCom’s actual results in recent years. The projected net interest income over the short to medium term reduced to reflect expected pressure on net interest margin compared with the prior period, which led to a net reduction in the VIU. – Cost-income ratio: ranges from 34.8 % to 40.0 % (2024: 34.6 % to 39.8 % ) in the short to medium term. These ratios are similar to BoCom’s actual results in recent years. – Long-term effective tax rate: 15.0 % (2024: 15.0 % ) for periods after 2029, which is higher than the recent historical average, and aligned to the minimum tax rate as proposed by the OECD/Group of 20 (‘G20’) Inclusive Framework on Base Erosion and Profit Shifting. – Capital requirements: capital adequacy ratio of 12.5 % (2024: 12.5 % ) and tier 1 capital adequacy ratio of 9.5 % (2024: 9.5 % ), based on BoCom’s capital risk appetite and capital requirements respectively. The following table illustrates the impact on the carrying amount of reasonably possible changes to key assumptions used in the VIU calculation. This reflects the sensitivity of each key assumption on its own and it is possible that more than one favourable and/or unfavourable change may occur at the same time. The selected rates of reasonably possible changes to key assumptions are based on external analysts’ forecasts, statutory requirements and other relevant external data sources, which can change period to period. Unless specified, favourable and unfavourable changes are consistently applied throughout short-to-medium and long-term forecast years, based on a straight-line average of the base case assumption . Sensitivity of the carrying amount to the key VIU assumptions Favourable change Unfavourable change Reversal of impairment/ VIU headroom Impairment bps $bn bps $bn At 31 Dec 2025 Long-term profit growth rate 30 2.1 ( 104 ) ( 6.0 ) Long-term asset growth rate ( 129 ) 9.1 5 ( 0.5 ) Discount rate ( 98 ) 4.6 232 ( 5.5 ) Expected credit losses as a percentage of loans and advances to customers 1 2025 to 2029 : 64 2030 onwards: 84 1.8 2025 to 2029 : 90 2030 onwards: 98 ( 4.7 ) Risk-weighted assets as a percentage of total assets ( 184 ) 0.8 182 ( 1.7 ) Loans and advances to customers growth rate ( 138 ) 1.8 455 ( 7.1 ) Operating income growth rate 101 3.7 ( 100 ) ( 3.8 ) Cost-income ratio ( 281 ) 0.4 292 ( 6.4 ) Long-term effective tax rate ( 426 ) 1.7 1,000 ( 4.0 ) Capital requirements – capital adequacy ratio — — 363 ( 13.0 ) Capital requirements – tier 1 capital adequacy ratio — — 333 ( 6.9 ) At 31 Dec 2024 Long-term profit growth rate 55 4.0 ( 96 ) ( 5.4 ) Long-term asset growth rate ( 121 ) 8.6 30 ( 2.8 ) Discount rate ( 143 ) 5.4 287 ( 6.4 ) Expected credit losses as a percentage of loans and advances to customers 1 2024 to 2028 : 66 2029 onwards: 91 4.0 2024 to 2028 : 108 2029 onwards: 104 ( 4.3 ) Risk-weighted assets as a percentage of total assets ( 132 ) 0.8 234 ( 1.7 ) Loans and advances to customers growth rate ( 217 ) 3.4 340 ( 6.1 ) Operating income growth rate 76 2.7 ( 81 ) ( 3.3 ) Cost-income ratio ( 190 ) 0.2 380 ( 7.1 ) Long-term effective tax rate ( 426 ) 1.6 1,000 ( 4.0 ) Capital requirements – capital adequacy ratio — — 372 ( 14.3 ) Capital requirements – tier 1 capital adequacy ratio — — 270 ( 6.7 ) 1 The expected credit losses as a percentage of loans and advances to customers reflect selected favourable and unfavourable rates. HSBC Holdings plc Annual Report on Form 20-F 348 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Considering the interrelationship of the changes set out in the table above, management estimates that the reasonably possible range of VIU is $ 13.4 b n to $ 31.0 b n (2024: $ 13.5 bn to $ 30.8 bn ), acknowledging that the fair value of the Group’s investment has ranged from $ 7.5 b n to $ 13.1 b n over the last five years as at the date of the impairment tests. The possible range of VIU is based on impacts set out in the table above arising from the favourable/unfavourable change in the operating income in the short to medium term, the expected credit losses as a percentage of loans and advances to customers, and a 50 bps increase/decrease in the discount rate. All other long-term assumptions, and the basis of the CMC have been kept unchanged when determining the reasonably possible range of the VIU. Selected financial information of BoCom The statutory accounting reference date of BoCom is 31 December. For the year ended 31 December 2025, HSBC included the associate’s results on the basis of the financial statements for the 12 months ended 30 September 2025, taking into account any known changes in the subsequent period from 1 October 2025 to 31 December 2025 that would have materially affected the results. Selected balance sheet information of BoCom At 30 Sep 2025 2024 $m $m Cash and balances at central banks 104,220 99,663 Due from and placements with banks and other financial institutions 123,034 122,607 Loans and advances to customers 1,265,800 1,128,603 Other financial assets 657,196 587,721 Other assets 66,665 61,086 Total assets 2,216,915 1,999,680 Due to and placements from banks and other financial institutions 346,808 326,742 Deposits from customers 1,324,734 1,195,590 Other financial liabilities 320,154 282,894 Other liabilities 40,284 38,082 Total liabilities 2,031,980 1,843,308 Total equity 184,935 156,372 Reconciliation of BoCom’s total shareholders’ equity to the carrying amount in HSBC’s consolidated financial statements At 30 Sep 2025 2024 $m $m Equity attributable to shareholders 183,347 154,748 Other equity instruments ( 20,708 ) ( 23,946 ) Equity attributable to shareholders less other equity instruments 162,639 130,802 The Group's share of equity 1 26,595 25,284 Impairment 2 ( 4,139 ) ( 2,917 ) Carrying amount 22,456 22,367 1 This balance includes goodwill originally arising on acquisition and reflects the impacts from the dilution of our shareholding in BoCom as well as BoCom's interim dividend for the six months ended 30 June 2025. 2 This balance includes the impact of foreign exchange movements . Selected income statement information of BoCom For the 12 months ended 30 Sep 2025 2024 $m $m Net interest income 23,886 23,180 Net fee and commission income 5,142 5,315 Credit and impairment losses ( 7,056 ) ( 7,410 ) Depreciation and amortisation ( 2,772 ) ( 2,589 ) Tax expense ( 1,402 ) ( 835 ) Profit for the year 13,319 12,922 Other comprehensive income 292 1,361 Total comprehensive income 13,611 14,283 Dividends received from BoCom 744 745 Saudi Awwal Bank The Group’s investment in S audi Awwal Bank (‘SAB’) is classified as an associate. HSBC is the largest shareholder in SAB with a shareholding of 31 % . Significant influence in SAB is established via representation on the Board of Directors. Investments in associates are recognised using the equity method of accounting in accordance with IAS 28, as described previously for BoCom. Impairment testing The fair value of the Group’s investment in SAB was marginally below the carrying amount as at 31 December 2025. An impairment test on the carrying amount with a VIU calculation was performed. The recoverable amount as determined by the VIU calculation was higher than the carrying amount using discounted cash flow projections. SAB has also had increasing profits each year. On that basis, the Group has concluded there is no indication of impairment. The VIU calculation was based on management’s best estimates of future earnings available to ordinary shareholders prepared in accordance with IAS 36 ‘Impairment of Assets’. Those cash flows used estimates based on SAB’s current condition and so do not include estimated cash flows arising from uncommitted future actions that may affect the performance of the investment, which will be considered at the relevant time should they arise. HSBC Holdings plc Annual Report on Form 20-F 349 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 19 Investments in subsidiaries Main subsidiaries of HSBC Holdings 1 At 31 Dec 2025 Place of incorporation or registration HSBC’s interest % Share class Europe HSBC Bank plc England and Wales 100 £ 1 Ordinary, $ 0.01 Non-Cumulative Third Dollar Preference HSBC UK Bank plc England and Wales 100 £ 1 Ordinary HSBC Continental Europe France 99.99 € 5 Actions Asia Hang Seng Bank Limited 2,3 Hong Kong 63.43 HK$ 5 Ordinary HSBC Bank (China) Company Limited 4 People’s Republic of China 100 CNY 1 Ordinary HSBC Bank Malaysia Berhad Malaysia 100 Ordinary no par value HSBC Life (International) Limited Bermuda 100 HK$ 1 Ordinary The Hongkong and Shanghai Banking Corporation Limited Hong Kong 100 Ordinary no par value Middle East, North Africa and Türkiye HSBC Bank Middle East Limited United Arab Emirates 100 $ 1 Ordinary and $ 1 Preference shares North America HSBC Bank USA, N.A. US 100 $ 100 Common and $ 0.01 Preference Latin America HSBC Mexico, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC Mexico 99.99 MXN 2 Ordinary 1 Main subsidiaries are either held directly or indirectly via intermediate holding companies. There has been no material percentage change in HSBC’s shareholding for its existing main subsidiaries since 2024. 2 In addition to the strategic holding disclosed above, the Group held 0.07 % (2024: 0.06 % ) shareholding as part of its trading books. 3 Based on the latest corporate substantial shareholding notice filed with Hong Kong Exchange and Clearing Limited on 21 June 2024, the Group’s shareholding in Hang Seng Bank on 18 June 2024 was 63.04 % . Movements in our shareholding since 18 June 2024 are reflected in the above table. Hang Seng Bank became a wholly owned subsidiary of the Group following the completion of the privatisation on 26 January 2026. See Note 37 for further details. 4 Represents a wholly foreign owned limited liability company registered under the laws of People’s Republic of China. Details of the debt, subordinated debt and preference shares issued by the main subsidiaries to parties external to the Group are included in Note 26 ‘Debt securities in issue’ and Note 29 ‘Subordinated liabilities’, respectively. A list of all related undertakings is set out in Note 38 . The principal countries and territories of operation are the same as the countries and territories of incorporation except for HSBC Life (International) Limited, which operates mainly in Hong Kong. HSBC is structured as a network of regional banks and locally incorporated regulated banking entities. Each bank is separately capitalised in accordance with applicable prudential requirements and maintains a capital buffer consistent with the Group’s risk appetite for the relevant country or region. HSBC’s capital management process is incorporated in the financial resource plan, which is approved by the Board. HSBC Holdings is the primary provider of equity capital to its subsidiaries and also provides them with non-equity capital where necessary. These investments are substantially funded by HSBC Holdings’ issuance of equity and non-equity capital, and by profit retention. As part of its capital management process, HSBC Holdings seeks to maintain a balance between the composition of its capital and its investment in subsidiaries. Subject to this, there is no current or foreseen impediment to HSBC Holdings’ ability to provide funding for such investments. During 2025, consistent with the Group’s capital plan, the Group’s material subsidiaries did not experience any significant restrictions on paying dividends or repaying loans and advances. Also, there are no foreseen restrictions envisaged with regard to planned dividends or payments from material subsidiaries. However, the ability of subsidiaries to pay dividends or advance monies to HSBC Holdings depends on, among other things, their respective local regulatory capital and banking requirements, exchange controls, statutory reserves, and financial and operating performance. The amount of guarantees by HSBC Holdings in favour of other Group entities is set out in Note 33 . Information on structured entities consolidated by HSBC where HSBC owns less than 50% of the voting rights is included in Note 20 ‘Structured entities’. In each of these cases, HSBC controls and consolidates an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Impairment testing of investments in subsidiaries At each reporting period end, HSBC Holdings reviews investments in subsidiaries for indicators of impairment. An impairment is recognised when the carrying amount exceeds the recoverable amount for that investment. The recoverable amount is the higher of the investment’s fair value less costs of disposal and its VIU, in accordance with the requirements of IAS 36. The VIU is calculated by discounting management’s cash flow projections for the investment. The cash flows represent the free cash flows based on the subsidiary’s binding capital requirements. We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36: – Management’s judgement in estimating future cash flows: The cash flow projections for each investment are based on the latest approved plans, which include forecast capital available for distribution based on the capital requirements of the subsidiary, taking into account minimum and core capital requirements and factoring in reasonably possible uncertainties. For the impairment test as at 31 December 2025, cash flow projections until the end of 2030 were considered in line with our internal planning horizon. Our cash flow projections include known and observable climate-related opportunities and costs associated with our sustainable products and operating model. – Long-term growth rates: The long-term growth rate is used to extrapolate the free cash flows in perpetuity because of the long-term perspective of the legal entity. The growth rate reflects long-term inflation for the country or territory within which the investment operates. HSBC Holdings plc Annual Report on Form 20-F 350 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements – Discount rates: The rate used to discount the cash flows is based on the cost of capital assigned to each investment, which is derived using a CAPM and market implied cost of equity. CAPM depends on a number of inputs reflecting financial and economic variables, including the risk- free rate and a premium to reflect the inherent risk of the business being evaluated as well as leverage. These variables are based on the market’s assessment of the economic variables and management’s judgement. The discount rates for each investment are refined to reflect the rates of inflation for the countries or territories within which the investment operates. In addition, for the purposes of testing investments for impairment, management supplements this process by comparing the discount rates derived using the internally generated CAPM, with cost of capital rates produced by external sources for businesses operating in similar markets. The impacts from climate risk are included to the extent that they are observable in discount rates and asset prices. The carrying amount of HSBC Holdings’ investments in subsidiaries was $ 157.7 bn at 31 December 2025 (2024: $ 152.3 bn), an increase of $ 5.4 b n during the year, primarily reflecting additional capital contributions of $ 1.9 b n to HSBC Asia Holdings Limited and $ 0.7 b n to HSBC UK Bank plc, together with a $ 2.8 b n impairment reversal relating to HSBC Overseas Holdings (UK) Limited. The impairment reversal was driven by improved business performance, revenue growth and continued cost discipline, which strengthened the outlook of its principal subsidiary HSBC North America Holdings Inc. Cumulative impairment losses recognised for HSBC Overseas Holdings (UK) Limited were $ 18.8 b n (2024: $ 21.6 b n), with the carrying amount increasing to $ 16.8 b n (2024: $ 14 b n). Impairment test results Investments Recoverable amount Discount rate Long-term growth rate $m % % HSBC North America Holdings Inc. At 31 Dec 2025 16,016 10.91 2.30 At 31 Dec 2024 13,264 11.00 2.25 Sensitivities of key assumptions in calculating VIU At 31 December 2025, the recoverable amount of HSBC Overseas Holdings (UK) Limited remained sensitive to reasonably possible changes in key assumptions impacting its principal subsidiary, HSBC North America Holdings Inc. In making an estimate of reasonably possible changes to assumptions, management considers the available evidence in respect of each input to the model. These include the external range of observable discount rates, historical performance against forecast, and risks attached to the key assumptions underlying cash flow. The following table presents a summary of the key assumptions underlying the most sensitive inputs to the model for HSBC North America Holdings Inc., the key risks attached to each, and details of a reasonably possible change to assumptions where, in the opinion of management, these could result in a change in VIU. Reasonably possible changes in key assumptions Input Key assumptions Associated risks Reasonably possible change Investment HSBC North America Holdings Inc. (subsidiary of HSBC Overseas Holdings (UK) Limited) Free cash flows projections – Level of interest rates and yield curves. – Competitors’ positions within the market. – Strategic actions relating to revenue and costs are not achieved. – Free cash flow projections decrease by 10%. Discount rate – Discount rate used is a reasonable estimate of a suitable market rate for the profile of the business. – External evidence arises to suggest that the rate used is not appropriate to the business. – Discount rate decreases by 1%. Sensitivity of VIU to reasonably possible changes in key assumptions In $bn (unless otherwise stated) At 31 Dec 2025 At 31 Dec 2024 HSBC North America Holdings Inc. VIU 16.0 13.3 Impact on VIU 100bps decrease in the discount rate – single variable 1 1.8 1.5 10% decrease in forecast profitability – single variable 1 ( 1.6 ) ( 1.3 ) 1 The recoverable amount of HSBC Overseas Holdings (UK) Limited represents the aggregate of recoverable amounts of the underlying subsidiaries. Single variable sensitivity analysis on a single subsidiary may therefore not be representative of the aggregate impact of the change in the variable. HSBC Holdings plc Annual Report on Form 20-F 351 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Subsidiaries with significant non-controlling interests 2025 2024 Hang Seng Bank Limited Proportion of ownership interests and voting rights held by non-controlling interests (%) 1 36.57 36.88 Place of business Hong Kong Hong Kong $m $m Profit attributable to non-controlling interests 770 905 Accumulated non-controlling interests of the subsidiary 7,001 6,879 Dividends paid to non-controlling interests 627 620 Summarised financial information: –  total assets 231,786 229,069 –  total liabilities 211,124 208,908 –  net operating income before changes in expected credit losses and other credit impairment charges 5,336 5,249 –  profit for the year 2,097 2,434 –  total comprehensive income for the year 2,509 2,482 1 This includes the Group’s shareholding held under trading books 0.07 % (2024: 0.06 % ). 20 Structured entities HSBC is mainly involved with both consolidated and unconsolidated structured entities through the securitisation of financial assets, conduits and investment funds, established either by HSBC or a third party. Consolidated structured entities Total assets of HSBC’s consolidated structured entities, split by entity type Conduits Securitisations HSBC managed funds Other Total $bn $bn $bn $bn $bn At 31 Dec 2025 1.8 8.6 3.5 5.9 19.8 At 31 Dec 2024 2.4 7.0 7.2 1.8 18.4 Conduits HSBC has established and manages two types of conduits: securities investment conduits (‘SICs’) and multi-seller conduits. Securities investment conduits The SICs purchase highly rated ABSs to facilitate tailored investment opportunities. At 31 December 2025, HSBC’s principal SIC, Solitaire, did not hold any ABSs (2024: $ 0.7 b n). Solitaire was previously funded entirely by commercial paper (‘CP’) issued to HSBC. At 31 December 2025, no CP was held by HSBC (2024: $ 1.0 b n). Multi-seller conduit HSBC’s multi-seller conduit was established to provide access to flexible market-based sources of finance for its clients. Currently, HSBC bears risk equal to the transaction-specific facility offered to the multi-seller conduit, amounting to $ 6.4 bn at 31 December 2025 ( 2024 : $ 5.2 b n). First loss protection is provided by the originator of the assets, and not by HSBC, through transaction-specific credit enhancements. A layer of loss protection is provided by HSBC in the form of a programme-wide enhancement facility. Securitisations HSBC uses structured entities to securitise customer loans and advances it originates in order to diversify its sources of funding for asset origination and capital efficiency purposes. The loans and advances are transferred by HSBC to the structured entities for cash or synthetically, and the structured entities issue debt securities to investors. Where synthetic securitisations are used, the credit risk associated with the loan portfolio of assets is transferred to the structured entities through loan portfolio financial guarantees. HSBC managed funds HSBC has established a number of money market and non-money market funds. Where it is deemed to be acting as principal rather than agent in its role as investment manager, HSBC controls these funds. Other HSBC has entered into a number of transactions in the normal course of business, which include asset and structured finance transactions where it has control of the structured entity. In addition, HSBC is deemed to control a number of third-party managed funds through its involvement as a principal in the funds. HSBC Holdings plc Annual Report on Form 20-F 352 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Unconsolidated structured entities The term ‘unconsolidated structured entities’ refers to all structured entities not controlled by HSBC. The Group enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer transactions and for specific investment opportunities. Nature and risks associated with HSBC interests in unconsolidated structured entities Total asset values of the entities ($m) Securitisations HSBC managed funds Non-HSBC managed funds Other Total 0–500 207 323 1,062 57 1,649 500–2,000 2 71 910 1 984 2,000–5,000 — 35 403 1 439 5,000–25,000 — 24 237 — 261 25,000+ — 6 41 — 47 Number of entities at 31 Dec 2025 209 459 2,653 59 3,380 $bn $bn $bn $bn $bn Total assets in relation to HSBC’s interests in the unconsolidated structured entities 9.4 12.4 21.8 2.8 46.4 –  trading assets — 0.2 — — 0.2 –  financial assets designated and otherwise mandatorily measured at fair value through profit or loss — 7.9 19.5 — 27.4 –  loans and advances to customers 9.4 — — 1.5 10.9 –  financial investments — — 0.4 — 0.4 –  assets held for sale — 4.3 1.9 — 6.2 –  other assets — — — 1.3 1.3 Total liabilities in relation to HSBC’s interests in the unconsolidated structured entities — — — 0.7 0.7 –  other liabilities — — — 0.7 0.7 Other off-balance sheet commitments — 0.3 6.5 1.3 8.1 HSBC’s maximum exposure at 31 Dec 2025 9.4 12.7 28.3 3.4 53.8 Total asset values of the entities ($m) 0–500 167 344 1,215 46 1,772 500–2,000 2 75 911 2 990 2,000–5,000 — 30 348 1 379 5,000–25,000 — 21 212 — 233 25,000+ — 2 33 — 35 Number of entities at 31 Dec 2024 169 472 2,719 49 3,409 $bn $bn $bn $bn $bn Total assets in relation to HSBC’s interests in the unconsolidated structured entities 5.4 12.1 25.4 2.4 45.3 –  trading assets — 0.1 — — 0.1 –  financial assets designated and otherwise mandatorily measured at fair value through profit or loss — 7.8 22.2 — 30.0 –  loans and advances to customers 5.4 — 0.7 1.5 7.6 –  financial investments — 0.2 0.4 — 0.6 –  assets held for sale — 4.0 2.1 — 6.1 –  other assets — — — 0.9 0.9 Total liabilities in relation to HSBC’s interests in the unconsolidated structured entities — — — 0.4 0.4 –  other liabilities — — — 0.4 0.4 Other off-balance sheet commitments — 1.0 8.1 1.3 10.4 HSBC’s maximum exposure at 31 Dec 2024 5.4 13.1 33.5 3.3 55.3 The maximum exposure to loss from HSBC’s interests in unconsolidated structured entities represents the maximum loss it could incur as a result of its involvement with these entities regardless of the probability of the loss being incurred. – For commitments, guarantees and written credit default swaps, the maximum exposure to loss is the notional amount of potential future losses. – For retained and purchased investments and loans to unconsolidated structured entities, the maximum exposure to loss is the carrying amount of these interests at the balance sheet reporting date. The maximum exposure to loss is stated gross of the effects of hedging and collateral arrangements that HSBC has entered into in order to mitigate the Group’s exposure to loss. Securitisations HSBC has interests in unconsolidated securitisation vehicles through holding notes issued by these entities. In addition, HSBC has investments in ABSs issued by third-party structured entities. HSBC managed funds HSBC establishes and manages money market funds and non-money market investment funds to provide customers with investment opportunities. Further information on funds under management is provided on page 94 . HSBC, as fund manager, may be entitled to receive management and performance fees based on the assets under management. HSBC may also retain units in these funds. HSBC Holdings plc Annual Report on Form 20-F 353 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Non-HSBC managed funds HSBC purchases and holds units of third-party managed funds in order to facilitate business and meet customer needs. Other HSBC has established structured entities in the normal course of business, such as structured credit transactions for customers, to provide finance to public and private sector infrastructure projects, and for asset and structured finance transactions. In addition to the interests disclosed above, HSBC enters into derivative contracts, reverse repos and stock borrowing transactions with structured entities. These interests arise in the normal course of business for the facilitation of third-party transactions and risk management solutions. HSBC sponsored structured entities The amount of assets transferred to and income received from such sponsored structured entities during 2025 and 2024 was not significant. 21 Goodwill and intangible assets 2025 2024 $m $m Goodwill 4,419 4,118 Other intangible assets 1 8,688 8,266 At 31 Dec 13,107 12,384 1 Included within other intangible assets is internally generated software with a net carrying amount of $ 7.5 b n (2024: $ 7.1 b n). During the year, capitalisation of internally generated software was $ 3.0 b n (2024: $ 2.5 b n), impairment was $ 0.4 b n (2024: impairment of $ 67 m ) and amortisation was $ 2.4 b n (2024: $ 2.0 b n). Movement analysis of goodwill 2025 2024 $m $m Gross amount At 1 Jan 18,626 19,560 Exchange differences 1,438 ( 962 ) Reclassified to held for sale and additions 1 ( 78 ) 28 At 31 Dec 19,986 18,626 Accumulated impairment losses At 1 Jan ( 14,508 ) ( 15,237 ) Exchange differences ( 1,059 ) 716 Reclassified to held for sale 1 — 13 At 31 Dec ( 15,567 ) ( 14,508 ) Net carrying amount at 31 Dec 4,419 4,118 1 For the year ended 31 December 2025, this includes goodwill reclassified to held for sale associated with the sale of HSBC Life (UK) Limited, the sale of HSBC Assurance Vie (France), the sale of the retail banking business of The Hongkong and Shanghai Banking Corporation Limited, Sri Lanka branch, and the sale of the custody business and private banking business in Germany. For the year ended 31 December 2024, this includes goodwill arising from the acquisition of Silkroad, offset by goodwill reclassified to held for sale associated with the sales of HSBC Bank Armenia, the private banking business in Germany, and the planned sale of HSBC Assurances Vie (France). For further details, see Note 23 . Goodwill Impairment testing The Group’s impairment test in respect of goodwill allocated to each cash-generating unit (‘CGU’) is performed at 1 October each year. A review for indicators of impairment is undertaken at each subsequent quarter-end and at 31 December 2025. No indicators of impairment were identified as part of these reviews. Basis of the recoverable amount The recoverable amount of all CGUs to which goodwill has been allocated was equal to its value in use (‘VIU’) at each respective testing date. The VIU is calculated by discounting management’s cash flow projections for the CGU. The key assumptions used in the VIU calculation for each individually significant CGU that is not impaired are discussed below. Key assumptions in VIU calculation – significant CGUs at 1 October 2025 1 Carrying amount at 1 Oct 2025 of which goodwill Value in use at 1 Oct 2025 Discount rate Growth rate beyond initial cash flow Carrying amount at 1 Oct 2024 of which goodwill Value in use at 1 Oct 2024 Discount rate Growth rate beyond initial cash flow projections $m $m $m % % $m $m $m % % HSBC UK Bank plc – UK 29,022 2,639 82,529 9.3 2.1 N/A N/A N/A N/A N/A HSBC UK Bank plc – WPB N/A N/A N/A N/A N/A 12,785 2,843 27,118 10.6 2.0 1 Following change in the Group’s reportable segments effective from 1 January 2025 the Group’s CGUs are the Group’s reportable segments subdivided by main legal entities. At 1 October 2025, aggregate goodwill of $ 1.8 bn (1 October 2024: $ 1.5 bn ) had been allocated to CGUs that were not considered individually significant. The Group’s CGUs do not carry on their balance sheets any significant intangible assets with indefinite useful lives, other than goodwill. HSBC Holdings plc Annual Report on Form 20-F 354 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Management’s judgement in estimating the cash flows of a CGU The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of goodwill in the next financial year, but does consider this to be an area that is inherently judgemental. The cash flow projections for each CGU are based on forecast profitability plans approved by the Board and minimum capital levels required to support the business operations of a CGU. The Board challenges and endorses planning assumptions in light of internal capital allocation decisions necessary to support our strategy, current market conditions and macroeconomic outlook. For the 1 October 2025 impairment test, cash flow projections until the end of 2030 were considered, in line with our internal planning horizon. Key assumptions underlying cash flow projections reflect management’s outlook on interest rates and inflation, as well as business strategy, including the scale of investment in technology and automation. Our cash flow projections include known and observable climate-related opportunities and costs associated with our sustainable products and operating model. As required by IFRS Accounting Standards, estimates of future cash flows exclude estimated cash inflows or outflows that are expected to arise from restructuring initiatives before an entity has a constructive obligation to carry out the plan, and would therefore have recognised a provision for restructuring costs. Discount rate The rate used to discount the cash flows is based on the cost of equity assigned to each CGU, which is derived using a capital asset pricing model (‘CAPM’) and market implied cost of equity. CAPM depends on a number of inputs reflecting financial and economic variables, including the risk- free rate and a premium to reflect the inherent risk of the business being evaluated. These variables are based on the market’s assessment of the economic variables and management’s judgement. The discount rates for each CGU are refined to reflect the rates of inflation for the countries within which the CGU operates. In addition, for the purposes of testing goodwill for impairment, management supplements this process by comparing the discount rates derived using the internally generated CAPM, with the cost of equity rates produced by external sources for businesses operating in similar markets. The impacts of climate risk are included to the extent that they are observable in discount rates and asset prices. Long-term growth rate The long-term growth rate is used to extrapolate the cash flows in perpetuity because of the long-term perspective within the Group of business units making up the CGUs. These growth rates reflect inflation for the countries within which the CGU operates or from which it derives revenue. Sensitivities of key assumptions in calculating VIU At 1 October 2025, given the extent by which VIU exceeds carrying amount, HSBC UK Bank plc CGU was not sensitive to reasonably possible adverse changes in key assumptions supporting the recoverable amount. In making an estimate of reasonably possible changes to assumptions, management considers the available evidence in respect of each input to the VIU calculation, such as the external range of discount rates observable, historical performance against forecast and risks attaching to the key assumptions underlying cash flow projections. None of the remaining CGUs are individually significant. Other intangible assets Impairment testing Impairment of other intangible assets is assessed in accordance with our policy explained in Note 1.2(b) by comparing the net carrying amount of CGUs containing intangible assets with their recoverable amounts. Recoverable amounts are determined by calculating an estimated VIU or fair value, as appropriate, for each CGU. No significant impairment was recognised during the year. Key assumptions in VIU calculation The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of other intangible assets in the next financial year, but does consider this to be an area that is inherently judgemental. We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36: – Management’s judgement in estimating future cash flows: We considered past business performance, current market conditions and our macroeconomic outlook to estimate future earnings. As required by IFRS Accounting Standards, estimates of future cash flows exclude estimated cash inflows or outflows that are expected to arise from restructuring initiatives before an entity has a constructive obligation to carry out the plan, and would therefore have recognised a provision for restructuring costs. For some businesses, this means that the benefit of certain strategic actions may not be included in the impairment assessment, including capital releases. Our cash flow projections include known and observable climate-related opportunities and costs associated with our sustainable products and operating model. – Long-term growth rates: The long-term growth rate is used to extrapolate the cash flows in perpetuity because of the long-term perspective of the businesses within the Group. – Discount rates: Rates are based on a combination of CAPM and market-implied calculations considering market data for the businesses and geographies in which the Group operates. The impacts of climate risk are included to the extent that they are observable in discount rates and asset prices. Sensitivity of estimates relating to non-financial assets As explained in Note 1.2(b), estimates of future cash flows for CGUs are made in the review of goodwill and non-financial assets for impairment. Non-financial assets include other intangible assets shown above, and owned property, plant and equipment and right-of-use assets (see Note 22 ). The most significant sources of estimation uncertainty are in respect of the goodwill balances disclosed above. There are no non-financial asset balances relating to individual CGUs which involve estimation uncertainty that represents a significant risk of resulting in a material adjustment to the results and financial position of the Group within the next financial year. Non-financial assets are widely distributed across CGUs within the legal entities of the Group, including Corporate Centre assets that cannot be allocated to CGUs and are therefore tested for impairment at consolidated level. The recoverable amounts of other intangible assets, owned property, plant and equipment, and right-of-use assets cannot be lower than individual asset fair values less costs to dispose, where relevant. At 31 December 2025 none of the CGUs were sensitive to reasonably possible adverse changes in key assumptions supporting the recoverable amount. In making an estimate of reasonably possible changes to assumptions, management considers the available evidence in respect of each input to the VIU calculation, such as the external range of discount rates observable, historical performance against forecast and risks attaching to the key assumptions underlying cash flow projections. HSBC Holdings plc Annual Report on Form 20-F 355 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 22 Prepayments, accrued income and other assets 2025 2024 $m $m Prepayments and accrued income 15,778 13,781 Settlement accounts and items in course of collection from other banks 29,961 19,050 Cash collateral and margin receivables 57,706 59,488 Bullion 34,917 16,841 Endorsements and acceptances 8,695 8,093 Insurance contract assets (Note 4) 118 132 Reinsurance contract assets 5,886 4,798 Employee benefit assets (Note 5) 8,246 7,548 Right-of-use assets 2,991 2,205 Owned property, plant and equipment 9,615 9,407 Other accounts 10,881 11,397 At 31 Dec 1 184,794 152,740 1 Prepayments, accrued income and other assets include $ 120.0 bn (2024: $ 109.3 b n) of financial assets, the majority of which are measured at amortised cost. 23 Assets held for sale, liabilities of disposal groups held for sale and business acquisitions 2025 2024 $m $m Held for sale at 31 Dec Disposal groups 9,713 27,126 Unallocated impairment losses 1 ( 93 ) ( 31 ) Non-current assets held for sale 1,495 139 Assets held for sale 11,115 27,234 Liabilities of disposal groups held for sale 23,382 29,011 1 This represents impairment losses in excess of the carrying value of the non-current assets in scope of IFRS 5 for measurement, recognised against the total assets of the disposal group. Disposal groups Retained portfolio of home and certain other loans in France Following the sale of our French retail banking operations on 1 January 2024, HSBC Continental Europe retained a portfolio of home and certain other loans, with a carrying value of € 7.1 bn ($ 8.3 bn) at the time of sale.  On 31 October 2025, HSBC Continental Europe completed the sale of its retained portfolio to a consortium comprising Rothesay Life plc and CCF. Prior to their derecognition at completion, as at 30 September 2025, related balances stood at $ 6.0 bn in loans. The completion of the transaction resulted in the recycling of cumulative fair value losses of $ 1.5 bn to the income statement that were previously recognised through other comprehensive income. For the year ended 31 December 2025, we additionally recognised a $ 0.1 bn mark-to-market gain in ‘net income from financial instruments held for trading or managed on a fair value basis’ arising on certain non-qualifying economic hedges that were used to hedge interest rate risk on the portfolio. These non-qualifying economic hedges were derecognised following completion of the transaction. Other disposals On 30 January 2026, HSBC Bank plc completed the sale of its UK life insurance entity, HSBC Life (UK) Limited, to Chesnara plc. Prior to completion, as at 31 December 2025, the balances that remained classified as held for sale were $ 6.6 bn in assets and $ 6.4 bn in liabilities. For the year ended 31 December 2025, we recognised a loss on disposal of $ 0.1 bn. In the first quarter of 2026, we will recycle foreign currency translation reserves to the income statement. These stood at a cumulative $ 0.2 bn loss as at 31 December 2025. On 27 November 2025, HSBC Bank Middle East Limited, Bahrain branch, completed the sale of its retail banking operations in Bahrain to Bank of Bahrain and Kuwait B.S.C., recognising a pre-tax gain on disposal of $ 0.1 bn. On 31 October 2025, HSBC Continental Europe completed the sale of its French life insurance business, HSBC Assurances Vie (France), to Matmut Société d’Assurance Mutuelle. Prior to their derecognition at completion, as at 30 September 2025, related balances stood at $ 28.2 bn in assets and $ 27.2 bn in liabilities. For the year ended 31 December 2025, we recognised a $ 0.2 bn pre-tax loss inclusive of migration costs and the recycling of related reserves. On 3 October 2025, HSBC Continental Europe completed the sale of its private banking business in Germany to BNP Paribas at which point we recognised a pre-tax gain on disposal of $ 0.2 bn. Prior to their derecognition at completion, as at 30 September 2025, related balances stood at $ 1.5 bn in assets and $ 1.5 bn in liabilities. On 24 September 2025, The Hongkong and Shanghai Banking Corporation Limited, Sri Lanka branch, entered into a binding agreement to sell its retail banking business to Nations Trust Bank PLC. Regulatory approvals for the transaction have now been received, and completion is expected in the first half 2026, at which point an estimated immaterial pre-tax gain on disposal will be recognised. On 16 September 2025, HSBC Continental Europe signed a put option agreement with CrediaBank S.A. regarding the potential sale of its majority shareholding of 70.03 % in HSBC Bank Malta plc. On 22 December 2025, pursuant to the terms of the put option agreement and following completion of HSBC Continental Europe's employee information and consultation process in France, a Sale and Purchase Agreement for the transaction was signed. The transaction, which remains subject to regulatory approvals, did not meet the criteria for held for sale in the fourth quarter of 2025, given completion is now expected in the first half of 2027. The sale is expected to generate an estimated pre-tax loss of $ 0.4 bn, inclusive of migration costs, which we expect to recognise largely in the first half of 2026 upon classification of the disposal group as held for sale. HSBC Holdings plc Annual Report on Form 20-F 356 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements On 27 July 2025, HSBC Latin America Holdings (UK) Limited entered into a binding agreement to sell HSBC Bank (Uruguay) S.A. to a subsidiary of BTG Pactual Holding SA. The disposal group met the held for sale criteria and an immaterial loss on disposal was recognised in the third quarter of 2025, with balances remaining classified as held for sale at 31 December 2025 of $ 2.1 bn in assets and $ 2.0 bn in liabilities. The transaction, which is subject to regulatory approvals, is expected to complete in the second half of 2026. On 11 July 2025, HSBC Continental Europe, a wholly-owned subsidiary of HSBC Bank plc, reached an agreement to sell its fund administration business, Internationale Kapitalanlagegesellschaft mbH, to BlackFin Capital Partners S.A.S. The disposal group met the held for sale criteria in the third quarter of 2025, with immaterial balances remaining classified as held for sale at 31 December 2025. This transaction, which remains subject to regulatory approval, is expected to complete in the second half of 2026, at which point an immaterial gain on disposal will be recognised. On 27 June 2025, HSBC Continental Europe reached an agreement to sell its custody business in Germany to BNP Paribas. This transaction is anticipated to be completed in a phased manner, starting in the first quarter of 2026. While client consent and related operational requirements may extend the timing for completion of all client transfers, given the signing of a sale and purchase agreement, the disposal group met the held for sale criteria in the second quarter of 2025, with balances remaining classified as held for sale at 31 December 2025 of $ 0.4 bn in assets and $ 12.5 bn in liabilities. The sale is expected to generate an estimated pre-tax gain on disposal of $ 0.1 bn, which will be recognised in line with completion of client transfers. On 25 September 2024, HSBC Bank plc reached an agreement to transfer its business in South Africa to local lender FirstRand Bank Ltd. The disposal group met held for sale criteria in the fourth quarter of 2024, with balances remaining classified as held for sale at 31 December 2025 of $ 0.4 bn in assets and $ 2.1 bn in liabilities. The transaction is expected to complete in the first quarter of 2026. Upon subsequent wind-down of the entity, expected in the second half of 2026, cumulative foreign currency translation reserves and other reserves will recycle to the income statement. At 31 December 2025, foreign currency translation reserve and other reserve losses stood at $ 0.1 bn. At 31 December 2025 , the major classes of assets and associated liabilities of disposal groups held for sale , excluding allocated impairment losses, were as follows: South Africa 1 German custody business 2 Uruguay UK life insurance business Sri Lanka retail banking business Other Total $m $m $m $m $m $m $m Assets of disposal groups held for sale Cash and balances at central banks — — 335 — 2 — 337 Trading assets — — 113 — — — 113 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss — — — 6,351 — — 6,351 Derivatives 8 — 6 — — — 14 Loans and advances to banks — 16 29 — — — 45 Loans and advances to customers 431 323 1,314 — 101 21 2,190 Financial investments — — 294 — — — 294 Goodwill — — — — 3 — 3 Prepayments, accrued income and other assets 3 17 51 273 15 7 366 Total assets at 31 Dec 2025 442 356 2,142 6,624 121 28 9,713 Liabilities of disposal groups held for sale Deposits by banks — 116 15 — — — 131 Customer accounts 2,056 12,316 1,369 — 430 2 16,173 Financial liabilities designated at fair value — — — 1,345 — — 1,345 Derivatives 13 — 3 — — — 16 Debt securities in issue — — 495 — — — 495 Insurance contract liabilities — — — 4,925 — — 4,925 Accruals, deferred income and other liabilities 13 33 77 116 40 18 297 Total liabilities at 31 Dec 2025 2,082 12,465 1,959 6,386 470 20 23,382 Expected date of completion First quarter of 2026 First half of 2027 Second half of 2026 First quarter of 2026 First half of 2026 Operating segment CIB and Corporate Centre CIB Corporate Centre IWPB IWPB HSBC Holdings plc Annual Report on Form 20-F 357 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements At 31 December 2024 , the major classes of assets and associated liabilities of disposal groups held for sale, excluding allocated impairment losses, were as follows: French life insurance business Germany private banking business South Africa 1 Other Total $m $m $m $m $m Assets of disposal groups held for sale Cash and balances at central banks — 1,896 — — 1,896 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 14,560 — — — 14,560 Derivatives 26 — 10 — 36 Loans and advances to banks 144 — — — 144 Loans and advances to customers — 309 656 — 965 Financial investments 8,500 — — — 8,500 Goodwill — 5 — — 5 Prepayments, accrued income and other assets 992 21 7 — 1,020 Total assets at 31 Dec 2024 24,222 2,231 673 — 27,126 Liabilities of disposal groups held for sale Customer accounts — 2,085 3,294 20 5,399 Financial liabilities designated at fair value 11 119 — — 130 Derivatives — — 19 — 19 Insurance contract liabilities 21,811 — — — 21,811 Accruals, deferred income and other liabilities 1,598 22 32 — 1,652 Total liabilities at 31 Dec 2024 23,420 2,226 3,345 20 29,011 Date of completion 31 October 2025 31 October 2025 First quarter of 2026 Operating segment IWPB IWPB CIB and Corporate Centre 1 Under the financial terms of the sale of our South Africa business, HSBC Bank plc will transfer the business with a net nil asset value at book value less any provisions. The purchase price for the asset value of $ 0.4 b n will be satisfied by the transfer of agreed liabilities of $ 2.1 bn. Any required increase to the net asset value of the business to achieve this will be satisfied by the inclusion of additional cash. Based upon the net liabilities of the disposal group at 31 December 2025, HSBC Bank plc would be expected to include a cash contribution of $ 1.7 bn. 2    Under the financial terms of the sale of our German custody business, HSBC Continental Europe will transfer a nil net asset value for each client transferred, by way of inclusion of additional cash. 24 Trading liabilities 2025 2024 $m $m Deposits by banks 1 9,353 7,671 Customer accounts 1 10,089 10,709 Other debt securities in issue (Note 26 ) 40 73 Other liabilities – net short positions in securities 52,640 47,529 At 31 Dec 72,122 65,982 1 ‘Deposits by banks’ and ‘Customer accounts’ include repos, stock lending and other amounts. 25 Financial liabilities designated at fair value HSBC 2025 2024 $m $m Deposits by banks and customer accounts 1 27,491 23,773 Liabilities to customers under investment contracts 5,288 5,931 Debt securities in issue (Note 26) 116,502 99,706 Subordinated liabilities (Note 29) 9,175 9,317 At 31 Dec 158,456 138,727 1 Structured deposits placed at HSBC Bank USA are insured by the Federal Deposit Insurance Corporation, a US government agency, up to $250,000 per depositor. The carrying amount of financial liabilities designated at fair value was $ 2,691 m less than the contractual amount at maturity ( 2024 : $ 4,365 m less). The cumulative amount of change in fair value attributable to changes in credit risk was a loss of $ 2,252 m ( 2024 : loss of $ 1,655 m). HSBC Holdings 2025 2024 $m $m Debt securities in issue (Note 26 ) 44,687 33,268 Subordinated liabilities (Note 29 ) 8,220 8,314 At 31 Dec 52,907 41,582 The carrying amount of financial liabilities designated at fair value was $ 1,161 m more than the contractual amount at maturity (2024: $ 17 m less). The cumulative amount of change in fair value attributable to changes in credit risk was a loss of $ 430 m (2024: $ 540 m ). HSBC Holdings plc Annual Report on Form 20-F 358 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 26 Debt securities in issue HSBC 2025 2024 $m $m Bonds and medium-term notes 185,974 163,903 Other debt securities in issue 30,243 41,661 Total debt securities in issue 216,217 205,564 Included within: –  trading liabilities (Note 24 ) ( 40 ) ( 73 ) –  financial liabilities designated at fair value (Note 25 ) ( 116,502 ) ( 99,706 ) At 31 Dec 99,675 105,785 HSBC Holdings 2025 2024 $m $m Debt securities 113,711 97,588 Included within: –  financial liabilities designated at fair value (Note 25 ) ( 44,687 ) ( 33,268 ) At 31 Dec 69,024 64,320 27 Accruals, deferred income and other liabilities 2025 2024 $m $m Accruals and deferred income 16,143 16,277 Settlement accounts and items in course of transmission to other banks 30,246 24,692 Cash collateral and margin payables 60,841 58,040 Endorsements and acceptances 8,708 8,102 Employee benefit liabilities (Note 5) 1,071 1,017 Reinsurance contract liabilities 682 701 Lease liabilities 3,320 2,459 Other liabilities 21,112 19,052 At 31 Dec 1 142,123 130,340 1 Accruals, deferred income and other liabilities include $ 133.5 bn ( 2024 : $ 122.1 bn) of financial liabilities, the majority of which are measured at amortised cost. 28 Provisions Restructuring costs Legal proceedings and regulatory matters Customer remediation Other provisions Total $m $m $m $m $m Provisions (excluding contractual commitments) At 1 Jan 2025 199 295 85 457 1,036 Additions 991 1,580 39 174 2,784 Amounts utilised ( 525 ) ( 194 ) ( 25 ) ( 64 ) ( 808 ) Unused amounts reversed ( 108 ) ( 47 ) ( 34 ) ( 68 ) ( 257 ) Exchange and other movements 21 28 4 ( 2 ) 51 At 31 Dec 2025 578 1,662 69 497 2,806 Contractual commitments 1 At 1 Jan 2025 688 Net change in expected credit loss provision and other movements ( 53 ) At 31 Dec 2025 635 Total provisions At 31 Dec 2024 1,724 At 31 Dec 2025 3,441 Provisions (excluding contractual commitments) At 1 Jan 2024 284 380 130 420 1,214 Additions 181 205 36 203 625 Amounts utilised ( 193 ) ( 228 ) ( 48 ) ( 105 ) ( 574 ) Unused amounts reversed ( 63 ) ( 63 ) ( 35 ) ( 82 ) ( 243 ) Exchange and other movements ( 10 ) 1 2 21 14 At 31 Dec 2024 199 295 85 457 1,036 Contractual commitments 1 At 1 Jan 2024 527 Net change in expected credit loss provision and other movements 161 At 31 Dec 2024 688 Total provisions At 31 Dec 2023 1,741 At 31 Dec 2024 1,724 1 C ontractual commitments include the expected credit loss provision in relation to off-balance sheet financial guarantee contracts and commitments to which the impairment requirements in IFRS 9 are applied; and provisions for performance and other guarantee contracts. HSBC Holdings plc Annual Report on Form 20-F 359 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Further details of ‘Legal proceedings and regulatory matters’ are set out in Note 35 . Legal proceedings include civil court, arbitration or tribunal proceedings brought against HSBC companies (whether by way of claim or counterclaim); or civil disputes that may, if not settled, result in court, arbitration or tribunal proceedings. ‘Regulatory matters’ refers to investigations, reviews and other actions carried out by, or in response to, the actions of regulators or law enforcement agencies in connection with alleged wrongdoing by HSBC. Customer remediation refers to HSBC’s activities to compensate customers for losses or damages associated with a failure to comply with regulations or to treat customers fairly. Customer remediation is often initiated by HSBC in response to customer complaints and/or industry developments in sales practices, and is not necessarily initiated by regulatory action. For further details of the impact of IFRS 9 on undrawn loan commitments and financial guarantees, presented in ‘Contractual commitments’, see Note 33 . Further analysis of the movement in the expected credit loss provision is disclosed within the ‘Reconciliation of changes in gross carrying/ nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees‘ table on page 158 . Brazil PIS and COFINS tax matters Beginning in the late 1990s, HSBC Bank Brasil S.A. – Banco Múltiplo (‘HSBC Brazil’) and other financial services firms brought legal proceedings in Brazil challenging the assessment of Contribution to the Social Integration Programme (‘PIS’) and Contribution for the Financing of Social Security (‘COFINS’) taxes, which are federal taxes imposed on gross revenues earned by legal entities in Brazil. The Supreme Court of Brazil selected three cases – one involving an insurer, in 2007, and two involving other banks, in 2011 – to set standards that would apply to all of these proceedings. In June 2023, the court ruled against the financial services firms in all three cases. The standards set by the court in this ruling have not yet been applied to HSBC Brazil’s legacy cases, liability for which remained with HSBC after the sale of HSBC’s operations in Brazil to Bradesco in 2016. In May 2025, the first instance judicial court delivered a favourable judgment in HSBC Brazil’s second largest legacy PIS and COFINS case, which has been appealed by the Brazilian Tax Authority. There are many factors that may affect the range of outcomes and any resulting financial impact for HSBC. Based upon the information currently available, a provision was recognised in respect of one legacy case. The remaining additional tax liability subject to challenge on all legacy PIS and COFINS cases is up to $ 0.4 b n. As at 31 December 2025, no provision has been booked for this amount. Bernard L. Madoff Investment Securities LLC In a 2009 lawsuit in Luxembourg relating to the Bernard L. Madoff Investment Securities LLC fraud, HSBC Securities Services Luxembourg (‘HSSL’) is defending a claim brought by Herald Fund SPC (‘Herald’) for restitution of securities and $ 521 m in cash (plus interest) or, alternatively damages in the amount of $ 5.6 b n (plus interest). On 24 October 2025, the Luxembourg Court of Cassation denied HSSL’s appeal in respect of Herald’s securities restitution claim, but accepted HSSL’s appeal in respect of Herald’s cash restitution claim. HSSL will now pursue a second appeal before the Luxembourg Court of Appeal. If HSSL is unsuccessful in that second appeal, it will contest the amount HSSL is required to pay in subsequent proceedings before the Court of Appeal. Following this development, we recognised a $ 1.1 b n provision. Given the pendency of the second appeal and the complexities and uncertainties associated with determining the quantum of restitution, the eventual financial impact could be significantly different. Tax-related investigations Since 2023 the French National Financial Prosecutor (‘PNF’) had been investigating HSBC Continental Europe and the Paris branch of HSBC Bank plc in connection with the dividend withholding tax treatment of certain historical trading activities. During the year a provision of $ 0.3 b n was recognised, and in January 2026 HSBC Bank plc reached an agreement with the PNF to resolve its investigation. HSBC Bank plc paid a total of € 302 m and the matter is now closed. 29 Subordinated liabilities HSBC’s subordinated liabilities 2025 2024 $m $m At amortised cost 28,406 25,958 –  subordinated liabilities 27,467 25,080 –  preferred securities 939 878 Designated at fair value (Note 25) 9,175 9,317 –  subordinated liabilities 9,175 9,317 At 31 Dec 37,581 35,275 Issued by HSBC subsidiaries 2,978 3,144 Issued by HSBC Holdings 34,603 32,131 Subordinated liabilities rank behind senior obligations and generally count towards the capital base of HSBC. Capital securities may be called and redeemed by HSBC subject to prior notification to the PRA and, where relevant, the consent of the local banking regulator. If not redeemed at the first call date, coupons payable may reset or become floating rate based on relevant market rates. On subordinated liabilities other than floating rate notes, interest is payable at fixed rates of up to 8.201 % . The balance sheet amounts disclosed in the following table are presented on an IFRS basis and do not reflect the amount that the instruments contribute to regulatory capital, principally due to regulatory amortisation and regulatory eligibility limits. HSBC Holdings plc Annual Report on Form 20-F 360 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC’s subordinated liabilities: subsidiaries 2025 2024 $m $m Additional tier 1 capital securities issued by HSBC subsidiaries 819 732 Tier 2 securities issued by HSBC subsidiaries –  Tier 2 securities issued by HSBC Bank plc 497 715 –  Tier 2 securities issued by HSBC Bank USA Inc 224 223 –  Tier 2 securities issued by HSBC Bank USA N.A. 1,438 1,431 Securities issued by other HSBC subsidiaries — 43 Subordinated liabilities issued by HSBC subsidiaries at 31 Dec 2,978 3,144 HSBC Holdings’ subordinated liabilities 2025 2024 $m $m At amortised cost 26,114 23,548 Designated at fair value (Note 25 ) 8,220 8,314 At 31 Dec 1 34,334 31,862 1 This includes Tier 2 securiti es. Guaranteed by HSBC Bank plc Capital securities guaranteed by HSBC Bank plc were issued by a Jersey limited partnership. The proceeds of these were lent to the guarantor by the limited partnership in the form of subordinated notes. These capital securities qualified as additional tier 1 capital for HSBC and HSBC Bank plc (on a solo and a consolidated basis) under CRR II until 31 December 2021 by virtue of the grandfathering provision. Since 31 December 2021, these securities have no longer qualified as regulatory capital for HSBC or HSBC Bank plc. As at 31 December 2025 the preferred securities are intended to provide investors with rights to income and capital distributions, as well as distributions upon liquidation of the issuer that are equivalent to the rights that they would have had if they had purchased non-cumulative perpetual preference shares of the issuer. There are limitations on the payment of distributions if such payments are prohibited under UK banking regulations or other requirements, if a payment would cause a breach of HSBC Bank plc’s capital adequacy requirements, or if HSBC Bank plc has insufficient distributable reserves (as defined). HSBC Bank plc have covenanted that, if prevented under certain circumstances from paying distributions on the preferred securities in full, they will not pay dividends or other distributions in respect of their ordinary shares, or repurchase or redeem their ordinary shares, until the distribution on the preferred securities has been paid in full. If the preferred securities are outstanding in November 2048, or if the total capital ratio of HSBC Bank plc (on a solo or consolidated basis) falls below the regulatory minimum required, or if the Directors expect it to do so in the near term, provided that proceedings have not been commenced for the liquidation, dissolution or winding up of HSBC Bank plc, the holders’ interests in the preferred security will be exchanged for interests in preference shares issued by HSBC Bank plc that have economic terms which are in all material respects equivalent to the preferred security and its guarantee. Tier 2 securities Tier 2 capital securities are dated subordinated securities on which there is an obligation to pay coupons. These capital securities are included within HSBC’s regulatory capital base as tier 2 capital under CRR II. CRR II grandfathering provisions expired on 26 June 2025 and previously grandfathered securities are now ineligible as regulatory capital for HSBC. In accordance with CRR II, the capital contribution of all tier 2 securities is amortised for regulatory purposes in their final five years before maturity. 30 Maturity analysis of assets, liabilities and off-balance sheet commitments The table on page 361 provides an analysis of consolidated total assets, liabilities and off-balance sheet commitments by residual contractual maturity at the balance sheet date. These balances are included in the maturity analysis as follows: – Trading assets and liabilities (including trading derivatives but excluding reverse repos, repos and debt securities in issue) are included in the ‘Due not more than 1 month’ time bucket because trading balances are typically held for short periods of time. – Financial assets and liabilities with no contractual maturity (such as equity securities) are included in the ‘Due over 5 years’ time bucket. Undated or perpetual instruments are classified based on the contractual notice period, which the counterparty of the instrument is entitled to give. Where there is no contractual notice period, undated or perpetual contracts are included in the ‘Due over 5 years’ time bucket. – Non-financial assets and liabilities with no contractual maturity are included in the ‘Due over 5 years’ time bucket. – Financial instruments included within assets and liabilities of disposal groups held for sale are classified on the basis of the contractual maturity of the underlying instruments and not on the basis of the disposal transaction. – Liabilities under insurance contracts included in ‘non-financial liabilities’ are irrespective of contractual maturity included in the ‘Due over 5 years’ time bucket in the maturity table provided below. An analysis of the present value of expected future cash flows of insurance contract liabilities and contractual service margin is provided on page 319 . Liabilities under investment contracts are classified in accordance with their contractual maturity. Undated investment contracts are included in the ‘Due over 5 years’ time bucket, although such contracts are subject to surrender and transfer options by the policyholders. – Loan and other credit-related commitments are classified on the basis of the earliest date they can be drawn down. HSBC Holdings plc Annual Report on Form 20-F 361 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC Maturity analysis of assets, liabilities and off-balance sheet commitments Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 6 months Due over 6 months but not more than 9 months Due over 9 months but not more than 1 year Due over 1 year but not more than 2 years Due over 2 years but not more than 5 years Due over 5 years Total $m $m $m $m $m $m $m $m $m Financial assets Cash and balances at central banks 242,859 — — — — — — — 242,859 Hong Kong Government certificates of indebtedness 44,063 — — — — — — — 44,063 Trading assets 358,864 4,209 1,551 646 349 534 — — 366,153 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 7,659 1,002 2,061 1,273 1,041 6,097 10,937 102,993 133,063 Derivatives 234,390 149 176 151 79 287 2,339 169 237,740 Loans and advances to banks 74,341 13,842 5,664 4,899 3,056 2,675 3,293 692 108,462 Loans and advances to customers 150,457 70,926 59,646 36,257 36,897 96,320 186,262 351,634 988,399 –  personal 50,268 11,938 8,704 7,160 6,295 21,281 55,491 310,594 471,731 –  corporate and commercial 86,383 50,794 41,517 19,824 23,073 54,426 108,282 32,680 416,979 –  financial 13,806 8,194 9,425 9,273 7,529 20,613 22,489 8,360 99,689 Reverse repurchase agreements – non-trading 199,154 41,434 20,115 9,474 5,575 12,837 9,803 — 298,392 Financial investments 41,092 75,509 44,525 20,166 17,973 62,079 199,798 106,069 567,211 Assets held for sale 1 1,279 559 418 246 737 365 904 6,303 10,811 Accrued income and other financial assets 103,776 7,104 4,989 817 715 350 593 1,664 120,008 Financial assets at 31 Dec 2025 1,457,934 214,734 139,145 73,929 66,422 181,544 413,929 569,524 3,117,161 Non-financial assets — — — — — — — 115,873 115,873 Total assets at 31 Dec 2025 1,457,934 214,734 139,145 73,929 66,422 181,544 413,929 685,397 3,233,034 Off-balance sheet commitments received Loan and other credit-related commitments 52,535 — — — — — — — 52,535 Financial liabilities Hong Kong currency notes in circulation 44,063 — — — — — — — 44,063 Deposits by banks 81,954 2,433 972 104 83 6,518 1,653 4,235 97,952 Customer accounts 1,518,208 162,033 62,389 19,424 17,348 5,042 2,249 135 1,786,828 –  personal 697,222 110,013 47,005 14,460 12,118 4,128 2,108 — 887,054 –  corporate and commercial 623,088 38,493 13,242 3,597 3,146 686 88 134 682,474 –  financial 197,898 13,527 2,142 1,367 2,084 228 53 1 217,300 Repurchase agreements – non-trading 180,780 12,964 10,257 619 174 180 — — 204,974 Trading liabilities 68,054 2,093 1,975 — — — — — 72,122 Financial liabilities designated at fair value 23,306 12,208 8,709 4,775 5,877 21,508 39,904 42,169 158,456 –  debt securities in issue: unsecured 8,380 7,958 7,169 3,608 3,854 18,928 35,405 30,671 115,973 –  subordinated liabilities and preferred securities 1 — — — 895 892 1,185 6,202 9,175 –  other 14,925 4,250 1,540 1,167 1,128 1,688 3,314 5,296 33,308 Derivatives 235,555 97 89 13 39 128 245 1,688 237,854 Debt securities in issue 5,912 4,399 6,892 3,999 4,955 8,039 32,934 32,545 99,675 –  covered bonds — — — — — 670 1,537 — 2,207 –  otherwise secured 507 43 62 58 338 201 691 2,401 4,301 –  unsecured 5,405 4,356 6,830 3,941 4,617 7,168 30,706 30,144 93,167 Liabilities of disposal groups held for sale 2 15,901 404 145 32 98 10 118 1,626 18,334 Accruals and other financial liabilities 110,867 11,030 5,050 1,019 1,037 820 2,230 1,470 133,523 Subordinated liabilities — — — — — 2 906 27,498 28,406 Total financial liabilities at 31 Dec 2025 2,284,600 207,661 96,478 29,985 29,611 42,247 80,239 111,366 2,882,187 Non-financial liabilities — — — — — — — 145,181 145,181 Total liabilities at 31 Dec 2025 2,284,600 207,661 96,478 29,985 29,611 42,247 80,239 256,547 3,027,368 Off-balance sheet commitments given Loan and other credit-related commitments 948,261 67 20 30 43 10 190 16 948,637 –  personal 272,532 — — — — — — — 272,532 –  corporate and commercial 516,435 67 20 30 43 10 190 16 516,811 –  financial 159,294 — — — — — — — 159,294 HSBC Holdings plc Annual Report on Form 20-F 362 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Maturity analysis of assets, liabilities and off-balance sheet commitments (continued) Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 6 months Due over 6 months but not more than 9 months Due over 9 months but not more than 1 year Due over 1 year but not more than 2 years Due over 2 years but not more than 5 years Due over 5 years Total $m $m $m $m $m $m $m $m $m Financial assets Cash and balances at central banks 267,674 — — — — — — — 267,674 Hong Kong Government certificates of indebtedness 42,293 — — — — — — — 42,293 Trading assets 311,277 1,374 679 337 774 401 — — 314,842 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 6,329 1,497 1,218 810 1,570 4,010 11,503 88,832 115,769 Derivatives 264,689 401 709 377 164 364 524 1,409 268,637 Loans and advances to banks 69,778 16,300 3,871 4,264 2,922 2,276 2,236 392 102,039 Loans and advances to customers 135,250 69,955 53,557 36,945 38,985 89,061 176,645 330,260 930,658 –  personal 45,221 10,236 7,634 6,705 6,197 19,683 53,434 295,588 444,698 –  corporate and commercial 78,170 52,618 38,440 22,858 25,292 54,832 102,637 29,102 403,949 –  financial 11,859 7,101 7,483 7,382 7,496 14,546 20,574 5,570 82,011 Reverse repurchase agreements – non-trading 179,590 36,552 15,054 3,715 6,659 7,400 3,579 — 252,549 Financial investments 35,780 74,850 50,650 15,907 20,465 54,125 143,870 97,519 493,166 Assets held for sale 1 2,711 170 215 401 711 513 2,465 19,170 26,356 Accrued income and other financial assets 94,803 6,831 4,127 648 579 498 346 1,504 109,336 Financial assets at 31 Dec 2024 1,410,174 207,930 130,080 63,404 72,829 158,648 341,168 539,086 2,923,319 Non-financial assets — — — — — — — 93,729 93,729 Total assets at 31 Dec 2024 1,410,174 207,930 130,080 63,404 72,829 158,648 341,168 632,815 3,017,048 Off-balance sheet commitments received Loan and other credit-related commitments 41,875 — — — — — — — 41,875 Financial liabilities Hong Kong currency notes in circulation 42,293 — — — — — — — 42,293 Deposits by banks 54,714 1,595 2,227 653 3,924 507 9,919 458 73,997 Customer accounts 1,382,204 168,423 58,928 19,062 17,389 6,482 2,353 114 1,654,955 –  personal 640,031 111,341 41,429 13,429 11,109 3,983 1,981 — 823,303 –  corporate and commercial 564,693 45,047 14,708 3,991 4,748 1,968 332 106 635,593 –  financial 177,480 12,035 2,791 1,642 1,532 531 40 8 196,059 Repurchase agreements – non-trading 168,075 10,340 1,176 450 473 171 — 195 180,880 Trading liabilities 58,069 4,933 2,873 7 100 — — — 65,982 Financial liabilities designated at fair value 19,037 8,732 5,890 4,765 5,600 17,013 43,274 34,416 138,727 –  debt securities in issue: unsecured 8,431 4,148 3,557 2,885 4,362 14,660 38,259 22,866 99,168 –  subordinated liabilities and preferred securities — — — 1,011 — 886 1,871 5,548 9,316 –  other 10,606 4,584 2,333 869 1,238 1,467 3,144 6,002 30,243 Derivatives 262,928 2 6 3 1 43 192 1,273 264,448 Debt securities in issue 5,761 10,915 10,330 7,332 7,239 14,724 22,311 27,173 105,785 –  covered bonds — — — — — — 1,253 — 1,253 –  otherwise secured 511 47 67 64 61 664 520 2,236 4,170 –  unsecured 5,250 10,868 10,263 7,268 7,178 14,060 20,538 24,937 100,362 Liabilities of disposal groups held for sale 2 5,356 223 42 2 107 — — 1,448 7,178 Accruals and other financial liabilities 99,424 11,827 5,415 1,013 1,241 902 1,489 738 122,049 Subordinated liabilities — — 1,719 16 — — 861 23,362 25,958 Total financial liabilities at 31 Dec 2024 2,097,861 216,990 88,606 33,303 36,074 39,842 80,399 89,177 2,682,252 Non-financial liabilities — — — — — — — 142,523 142,523 Total liabilities at 31 Dec 2024 2,097,861 216,990 88,606 33,303 36,074 39,842 80,399 231,700 2,824,775 Off-balance sheet commitments given Loan and other credit-related commitments 861,181 74 12 85 49 6 57 114 861,578 –  personal 253,522 — — — — — — — 253,522 –  corporate and commercial 460,762 74 12 85 49 6 57 114 461,159 –  financial 146,897 — — — — — — — 146,897 1 Unallocated impairment losses in relation to disposal groups of $ 0.09 bn (2024: $ 0.03 bn) and non-financial assets of $ 0.26 bn (2024: $ 0.92 bn) that are presented within assets held for sale on the balance sheet have been included within non-financial assets in the table above. 2 A total of $ 5.00 bn (2024: $ 21.83 bn) of non-financial liabilities that are presented within liabilities of disposal groups held for sale on the balance sheet have been included within non-financial liabilities in the table above. HSBC Holdings plc Annual Report on Form 20-F 363 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements H SBC Holdings Maturity analysis of assets, liabilities and off-balance sheet commitments Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 6 months Due over 6 months but not more than 9 months Due over 9 months but not more than 1 year Due over 1 year but not more than 2 years Due over 2 years but not more than 5 years Due over 5 years Total $m $m $m $m $m $m $m $m $m Financial assets Cash at bank and in hand: –  balances with HSBC undertakings 5,079 — — — — — — — 5,079 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value — — — — — 4,863 31,702 30,652 67,217 Derivatives 1,371 26 10 — — 114 118 303 1,942 Loans and advances to HSBC undertakings 6,250 — 1,760 — — 2,049 7,331 23,110 40,500 Trading assets — — — — — — — — — Financial investments 11,736 3,734 — — — — — — 15,470 Accrued income and other financial assets 1,864 803 404 209 5 — — — 3,285 Total financial assets at 31 Dec 2025 26,300 4,563 2,174 209 5 7,026 39,151 54,065 133,493 Non-financial assets — — — — — — — 159,527 159,527 Total assets at 31 Dec 2025 26,300 4,563 2,174 209 5 7,026 39,151 213,592 293,020 Financial liabilities Amounts owed to HSBC undertakings — 89 — — — — — — 89 Financial liabilities designated at fair value — 1,760 — — 895 8,750 15,138 26,364 52,907 –  debt securities in issue — 1,760 — — — 7,858 13,953 21,117 44,688 –  subordinated liabilities and preferred securities — — — — 895 892 1,185 5,247 8,219 Derivatives 1,299 1 86 3 22 175 519 1,346 3,451 Debt securities in issue — — 1,535 408 — 2,711 33,550 30,820 69,024 Accruals and other financial liabilities 294 1,109 676 140 34 — — 21 2,274 Subordinated liabilities — — — — — — 901 25,213 26,114 Total financial liabilities at 31 Dec 2025 1,593 2,959 2,297 551 951 11,636 50,108 83,764 153,859 Non-financial liabilities — — — — — — — 12 12 Total liabilities at 31 Dec 2025 1,593 2,959 2,297 551 951 11,636 50,108 83,776 153,871 Financial assets Cash at bank and in hand: –  balances with HSBC undertakings 2,548 — — — — — — — 2,548 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value — — — — — 5,835 31,547 23,904 61,286 Derivatives 2,339 — 24 — — 243 162 286 3,054 Loans and advances to HSBC undertakings 8,500 — 120 — 13 1,640 6,739 20,665 37,677 Trading assets 709 — — — — — — — 709 Financial investments 6,141 4,187 — — — — — — 10,328 Accrued income and other financial assets 2,719 856 292 203 11 — — — 4,081 Total financial assets at 31 Dec 2024 22,956 5,043 436 203 24 7,718 38,448 44,855 119,683 Non-financial assets — — — — — — — 154,574 154,574 Total assets at 31 Dec 2024 22,956 5,043 436 203 24 7,718 38,448 199,429 274,257 Financial liabilities Amounts owed to HSBC undertakings — 231 — — — — — — 231 Financial liabilities designated at fair value — — — 1,012 — 3,641 16,907 20,022 41,582 –  debt securities in issue — — — — — 2,755 15,036 15,476 33,267 –  subordinated liabilities and preferred securities — — — 1,012 — 886 1,871 4,546 8,315 Derivatives 1,502 89 144 44 45 209 794 2,513 5,340 Debt securities in issue — — — — — 14,897 24,395 25,028 64,320 Accruals and other financial liabilities 351 1,713 831 129 31 — — 20 3,075 Subordinated liabilities — — 1,541 — — — 836 21,171 23,548 Total financial liabilities at 31 Dec 2024 1,853 2,033 2,516 1,185 76 18,747 42,932 68,754 138,096 Non-financial liabilities — — — — — — — 22 22 Total liabilities at 31 Dec 2024 1,853 2,033 2,516 1,185 76 18,747 42,932 68,776 138,118 HSBC Holdings plc Annual Report on Form 20-F 364 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Contractual maturity of financial liabilities The following table shows, on an undiscounted basis, all cash flows relating to principal and future coupon payments (except for trading liabilities and derivatives not treated as hedging derivatives). For this reason, balances in the following table do not agree directly with those in our consolidated balance sheet. Undiscounted cash flows payable in relation to hedging derivative liabilities are classified according to their contractual maturities. Trading liabilities and derivatives not treated as hedging derivatives are included in the ‘Due not more than 1 month’ time bucket and not by contractual maturity. In addition, loan and other credit-related commitments and financial guarantees are generally not recognised on our balance sheet. The undiscounted cash flows potentially payable under loan and other credit-related commitments and financial guarantees are classified on the basis of the earliest date they can be called. Cash flows payable by HSBC under financial liabilities by remaining contractual maturities Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 1 year Due over 1 year but not more than 5 years Due over 5 years Total $m $m $m $m $m $m Deposits by banks 81,989 2,617 1,582 9,192 4,334 99,714 Customer accounts 1,518,669 164,800 100,734 8,079 135 1,792,417 Repurchase agreements – non-trading 180,768 13,771 11,169 180 — 205,888 Trading liabilities 72,122 — — — — 72,122 Financial liabilities designated at fair value 23,595 12,871 21,954 72,552 52,326 183,298 Derivatives 235,317 246 395 1,870 2,885 240,713 Debt securities in issue 5,928 5,312 18,421 51,297 38,047 119,005 Subordinated liabilities 39 368 1,424 8,085 38,878 48,794 Other financial liabilities 1 153,469 8,753 5,312 2,881 1,838 172,253 2,271,896 208,738 160,991 154,136 138,443 2,934,204 Loan and other credit-related commitments 948,277 66 94 200 — 948,637 Financial guarantees 2 17,476 — — — — 17,476 At 31 Dec 2025 3,237,649 208,804 161,085 154,336 138,443 3,900,317 Proportion of cash flows payable in period 83 % 5 % 4 % 4 % 4 % Deposits by banks 54,819 1,759 7,381 11,242 511 75,712 Customer accounts 1,382,666 171,917 97,667 10,089 113 1,662,452 Repurchase agreements – non-trading 168,633 10,425 2,195 188 196 181,637 Trading liabilities 65,982 — — — — 65,982 Financial liabilities designated at fair value 19,139 9,042 18,462 70,587 45,767 162,997 Derivatives 262,014 531 1,008 2,034 2,765 268,352 Debt securities in issue 5,780 11,309 27,103 45,725 32,129 122,046 Subordinated liabilities 39 120 2,959 7,373 35,512 46,003 Other financial liabilities 1 138,319 9,754 5,421 2,206 608 156,308 2,097,391 214,857 162,196 149,444 117,601 2,741,489 Loan and other credit-related commitments 861,193 78 146 63 98 861,578 Financial guarantees 2 16,998 — — — — 16,998 At 31 Dec 2024 2,975,582 214,935 162,342 149,507 117,699 3,620,065 Proportion of cash flows payable in period 83 % 6 % 4 % 4 % 3 % 1 Excludes financial liabilities of disposal groups. 2 Excludes performance guarantee contracts to which the impairment requirements in IFRS 9 are not applied. HSBC Holdings HSBC Holdings’ primary sources of liquidity are dividends received from subsidiaries, interest on and repayment of intra-Group loans and securities, and interest earned on its own liquid funds. HSBC Holdings also raises funds in the debt capital markets to meet the Group’s minimum requirement for own funds and eligible liabilities and maintain an appropriate liquidity buffer. HSBC Holdings uses this liquidity to meet its obligations, including interest and principal repayments on external debt liabilities, operating expenses and collateral on derivative transactions . HSBC Holdings is also subject to contingent liquidity risk by virtue of credit-related commitments and guarantees and similar contracts issued relating to its subsidiaries. Such commitments and guarantees are only issued after due consideration of HSBC Holdings’ ability to finance the commitments and guarantees and the likelihood of the need arising. HSBC Holdings actively manages the cash flows from its subsidiaries to optimise the amount of cash held at the holding company level. During 2025, consistent with the Group’s capital plan, the Group’s material subsidiaries did not experience any significant restrictions on paying dividends or repaying loans and advances. Also, there are no foreseen restrictions envisaged with regard to planned dividends or payments from material subsidiaries. However, the ability of subsidiaries to pay dividends or advance monies to HSBC Holdings depends on, among other things, their respective local regulatory capital and banking requirements, exchange controls, statutory reserves, and financial and operating performance. HSBC Holdings currently has sufficient liquidity to meet its present and forecast requirements. HSBC Holdings plc Annual Report on Form 20-F 365 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements The following table shows, on an undiscounted basis, all cash flows relating to principal and future coupon payments (except for trading liabilities and derivatives not treated as hedging derivatives). For this reason, balances in the following table do not agree directly with those in HSBC Holdings balance sheet. Undiscounted cash flows payable in relation to hedging derivative liabilities are classified according to their contractual maturities. Trading liabilities and derivatives not treated as hedging derivatives are included in the ‘Due not more than 1 month’ time bucket and not by contractual maturity. In addition, loan and other credit-related commitments and financial guarantees are generally not recognised on our balance sheet. The undiscounted cash flows potentially payable under loan and other credit-related commitments and financial guarantees are classified on the basis of the earliest date they can be called. Cash flows payable by HSBC Holdings under financial liabilities by remaining contractual maturities Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 1 year Due over 1 year but not more than 5 years Due over 5 years Total $m $m $m $m $m $m Amounts owed to HSBC undertakings — 89 — — — 89 Financial liabilities designated at fair value 23 2,230 2,786 30,944 32,214 68,197 Derivatives 796 47 608 857 1,614 3,922 Debt securities in issue — 796 4,080 45,834 36,373 87,083 Subordinated liabilities — 353 1,336 7,508 35,087 44,284 Other financial liabilities 274 40 — — 21 335 At 31 Dec 2025 1,093 3,555 8,810 85,143 105,309 203,910 Amounts owed to HSBC undertakings — 231 — — — 231 Financial liabilities designated at fair value 2 133 2,254 26,335 26,788 55,512 Derivatives 669 202 1,344 2,591 1,658 6,464 Debt securities in issue — 254 1,697 47,771 29,706 79,428 Subordinated liabilities — 105 2,627 6,794 31,773 41,299 Other financial liabilities 351 1,735 991 — 20 3,097 At 31 Dec 2024 1,022 2,660 8,913 83,491 89,945 186,031 31 Offsetting of financial assets and financial liabilities In the offsetting of financial assets and financial liabilities, the net amount is reported in the balance sheet when the offset criteria are met. This is achieved when there is a legally enforceable right to offset the recognised amounts and there is either an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. In the following table, the ‘Amounts not set off in the balance sheet’ include transactions where: – the counterparty has an offsetting exposure with HSBC and a master netting or similar arrangement is in place with a right to set off only in the event of default, insolvency or bankruptcy, or the offset criteria are otherwise not satisfied; and – cash and non-cash collateral (debt securities and equities) has been received/pledged for derivatives and reverse repurchase/repurchase, stock borrowing/lending and similar agreements to cover net exposure in the event of a default or other predetermined events. The effect of over-collateralisation is excluded. ‘Amounts not subject to enforceable netting agreements’ include contracts executed in jurisdictions where the rights of offset may not be upheld under the local bankruptcy laws, and transactions where a legal opinion evidencing enforceability of the right of offset may not have been sought, or may have been unable to obtain. For risk management purposes, the net amounts of loans and advances to customers are subject to limits, which are monitored and the relevant customer agreements are subject to review and updated, as necessary, to ensure the legal right to set off remains appropriate. HSBC Holdings plc Annual Report on Form 20-F 366 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Offsetting of financial assets and financial liabilities Amounts subject to enforceable netting arrangements Amounts not subject to enforceable netting arrangements 1 Total Amounts not set off in the balance sheet Gross amounts Amounts offset Net amounts in the balance sheet Financial instruments, including non- cash collateral Cash collateral Net amount $m $m $m $m $m $m $m $m Financial assets Derivatives (Note 15) 2 330,338 ( 97,243 ) 233,095 ( 202,744 ) ( 26,074 ) 4,277 4,645 237,740 Reverse repos, stock borrowing and similar agreements classified as: 3 –  trading assets 31,450 ( 610 ) 30,840 ( 30,839 ) ( 1 ) — 2,556 33,396 –  non-trading assets 504,986 ( 224,173 ) 280,813 ( 279,149 ) ( 207 ) 1,457 17,640 298,453 Loans and advances to customers 4 39,273 ( 18,826 ) 20,447 ( 17,395 ) ( 81 ) 2,971 2 20,449 At 31 Dec 2025 906,047 ( 340,852 ) 565,195 ( 530,127 ) ( 26,363 ) 8,705 24,843 590,038 Derivatives (Note 15) 2 372,699 ( 112,746 ) 259,953 ( 230,133 ) ( 22,730 ) 7,090 8,684 268,637 Reverse repos, stock borrowing and similar agreements classified as: 3 –  trading assets 25,077 ( 637 ) 24,440 ( 24,428 ) ( 10 ) 2 757 25,197 –  non-trading assets 386,124 ( 154,133 ) 231,991 ( 230,584 ) ( 332 ) 1,075 20,602 252,593 Loans and advances to customers 4 34,582 ( 16,540 ) 18,042 ( 15,313 ) ( 75 ) 2,654 4 18,046 At 31 Dec 2024 818,482 ( 284,056 ) 534,426 ( 500,458 ) ( 23,147 ) 10,821 30,047 564,473 Financial liabilities Derivatives (Note 15) 2 329,387 ( 97,243 ) 232,144 ( 201,311 ) ( 28,038 ) 2,795 5,710 237,854 Repos, stock lending and similar agreements classified as: 3 –  trading liabilities 19,691 ( 329 ) 19,362 ( 19,362 ) — — 1 19,363 –  non-trading liabilities 375,173 ( 224,454 ) 150,719 ( 145,206 ) ( 224 ) 5,289 54,255 204,974 Customer accounts 5 46,444 ( 18,826 ) 27,618 ( 17,395 ) ( 81 ) 10,142 12 27,630 At 31 Dec 2025 770,695 ( 340,852 ) 429,843 ( 383,274 ) ( 28,343 ) 18,226 59,978 489,821 Derivatives (Note 15) 2 369,287 ( 112,746 ) 256,541 ( 221,232 ) ( 30,334 ) 4,975 7,907 264,448 Repos, stock lending and similar agreements classified as: 3 –  trading liabilities 18,482 ( 157 ) 18,325 ( 18,326 ) — ( 1 ) 6 18,331 –  non-trading liabilities 287,648 ( 154,613 ) 133,035 ( 131,719 ) ( 164 ) 1,152 47,845 180,880 Customer accounts 5 41,409 ( 16,540 ) 24,869 ( 15,313 ) ( 75 ) 9,481 17 24,886 At 31 Dec 2024 716,826 ( 284,056 ) 432,770 ( 386,590 ) ( 30,573 ) 15,607 55,775 488,545 1 These exposures continue to be secured by financial collateral, but we may not have sought or been able to obtain a legal opinion evidencing enforceability of the right of offset. 2 At 31 December 2025, the amount of cash margin received that had been offset against the gross derivatives assets was $ 3.8 bn (2024: $ 5.3 bn). The amount of cash margin paid that had been offset against the gross derivatives liabilities was $ 11.5 bn (2024: $ 5.6 bn). 3 For the amount of repos, reverse repos, stock lending, stock borrowing and similar agreements recognised on the balance sheet within ‘Trading assets’ of $ 33.4 bn (2024: $ 25.2 bn) and ‘Trading liabilities’ of $ 19.4 bn (2024: $ 18.3 bn), see the ‘Funding sources and uses’ table on page 195 . 4 At 31 December 2025, the total amount of ‘Loans and advances to customers’ was $ 988.4 bn (2024: $ 930.7 bn), of which $ 20.4 bn (2024: $ 18.0 bn) was subject to offsetting. 5 At 31 December 2025, the total amount of ‘Customer accounts’ was $ 1,786.8 bn (2024: $ 1,655.0 bn), of which $ 27.6 bn (2024: $ 24.9 bn) was subject to offsetting. 32 Called up share capital and other equity instruments Called up share capital and share premium HSBC Holdings ordinary shares of $ 0.50 each, issued and fully paid 2025 2024 Number $m Number $m At 1 Jan 17,946,950,582 8,973 19,262,728,193 9,631 Shares issued under HSBC employee share plans 9,937,366 5 10,283,430 5 Less: shares repurchased and cancelled 781,648,086 390 1,326,061,041 663 At 31 Dec 1 17,175,239,862 8,588 17,946,950,582 8,973 1 All HSBC Holdings ordinary shares in issue confer identical rights, including in respect of capital, dividends and voting. HSBC Holdings plc Annual Report on Form 20-F 367 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC Holdings share premium 2025 2024 $m $m At 31 Dec 1 111 14,810 1 On 24 June 2025, the High Court of Justice in England and Wales confirmed the cancellation of $ 14.8 b n standing to the credit of the HSBC Holdings’ share premium account and $ 1.8 b n standing to the credit of its capital redemption reserve, following approval at HSBC Holdings’ Annual General Meeting held on 2 May 2025 (the ‘Capital Reduction’). The Court Order confirming the Capital Reduction was registered by the Registrar of Companies on 10 July 2025, resulting in a combined total of $ 16.6 b n being reclassified to retained earnings with no impact on total equity. Total called up share capital and share premium 2025 2024 $m $m At 31 Dec 8,699 23,783 HSBC Holdings non-cumulative preference share of £ 0.01 The one non-cumulative sterling preference share of £ 0.01 (‘sterling preference share’) has been in issue since 29 December 2010 and is held by a subsidiary of HSBC Holdings. Dividends are paid quarterly at the sole and absolute discretion of the Board. The sterling preference share carries no rights of conversion into ordinary shares of HSBC Holdings and no right to attend or vote at shareholder meetings of HSBC Holdings. These securities can be redeemed by HSBC Holdings at any time, subject to prior approval by the PRA. Other equity instruments HSBC Holdings’ contingent convertible securities are described below. These are accounted for as equity because HSBC does not have an obligation to transfer cash or a variable number of its own ordinary shares to holders under any circumstances outside its control. Additional tier 1 capital – contingent convertible securities HSBC Holdings continues to issue contingent convertible securities that are included in its capital base as fully CRR II-compliant additional tier 1 capital securities. These securities are marketed principally and subsequently allotted to corporate investors and fund managers. The net proceeds of the issuances are typically used for HSBC Holdings’ general corporate purposes and to maintain or further strengthen its capital base to meet requirements under CRR II. These securities bear a fixed rate of interest until their initial reset dates (unless previously redeemed in accordance with their terms). If not redeemed, the securities will bear interest at a rate fixed on each reset date for the subsequent five -year period, equal to the sum of the applicable reference rate at the time of reset and a credit spread set at issuance. Interest on the contingent convertible securities will be due and payable only at the sole discretion of HSBC Holdings, and HSBC Holdings has sole and absolute discretion at all times to cancel for any reason (in whole or part) any interest payment that would otherwise be payable on any payment date. Distributions will not be paid if they are prohibited under UK banking regulations or if the Group has insufficient reserves or fails to meet the solvency conditions defined in the securities’ terms. The contingent convertible securities are undated and are repayable at the option of HSBC Holdings in whole typically at the initial call date or on any fifth anniversary after this date. In addition, the securities are repayable at the option of HSBC in whole for certain regulatory or tax reasons. Any repayments require the prior consent of the PRA. These securities rank pari passu with HSBC Holdings’ sterling preference shares and therefore rank ahead of ordinary shares. The contingent convertible securities will be converted into fully paid ordinary shares of HSBC Holdings at a predetermined price, should HSBC’s consolidated CET1 ratio fall below 7.0 % . Therefore, in accordance with the terms of the securities, if HSBC’s consolidated CET1 ratio breaches the 7.0 % trigger, the securities will convert into ordinary shares at fixed contractual conversion prices in the currency of the relevant securities, subject to anti-dilution adjustments. Original nominal amount (LCY) Description of security Issue Date First call date Reset Date 2025 2024 $m $m $ 2,450 m 6.375 % Perpetual Subordinated Contingent Convertible Securities 1 Mar 2015 Mar 2025 Mar 2025 — 2,450 $ 3,000 m 6.000 % Perpetual Subordinated Contingent Convertible Securities May 2017 May 2027 May 2027 3,000 3,000 € 1,250 m 4.750 % Perpetual Subordinated Contingent Convertible Securities Jul 2017 Jul 2029 Jul 2029 1,421 1,422 $ 1,800 m 6.500 % Perpetual Subordinated Contingent Convertible Securities Mar 2018 Mar 2028 Mar 2028 1,800 1,800 £ 1,000 m 5.875 % Perpetual Subordinated Contingent Convertible Securities Sep 2018 Sep 2026 Sep 2026 1,301 1,301 $ 1,500 m 4.600 % Perpetual Subordinated Contingent Convertible Securities Dec 2020 Dec 2030 Jun 2031 1,500 1,500 $ 1,000 m 4.000 % Perpetual Subordinated Contingent Convertible Securities Mar 2021 Mar 2026 Sep 2026 1,000 1,000 $ 1,000 m 4.700 % Perpetual Subordinated Contingent Convertible Securities Mar 2021 Mar 2031 Sep 2031 1,000 1,000 $ 2,000 m 8.000 % Perpetual Subordinated Contingent Convertible Securities 2 Mar 2023 Mar 2028 Sep 2028 1,980 1,980 SGD 1,500 m 5.250 % Perpetual Subordinated Contingent Convertible Securities 2 Jun 2024 Jun 2029 Dec 2029 1,096 1,096 $ 1,350 m 6.875 % Perpetual Subordinated Contingent Convertible Securities 2 Sep 2024 Sep 2029 Mar 2030 1,337 1,337 $ 1,150 m 6.950 % Perpetual Subordinated Contingent Convertible Securities 2 Sep 2024 Mar 2034 Sep 2034 1,139 1,138 $ 1,500 m 6.950 % Perpetual Subordinated Contingent Convertible Securities 2 Feb 2025 Aug 2031 Feb 2032 1,485 — SGD 800 m 5.000 % Perpetual Subordinated Contingent Convertible Securities 2 Mar 2025 Mar 2030 Sep 2030 596 — $ 2,000 m 7.050 % Perpetual Subordinated Contingent Convertible Securities 2 Jun 2025 Jun 2030 Dec 2030 1,980 — At 31 Dec 20,635 19,024 1 This security was called by HSBC Holdings on 7 February 2025 and was redeemed and cancelled on 31 March 2025. 2 These securities have been accounted for net of directly attributable transaction costs. HSBC Holdings plc Annual Report on Form 20-F 368 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Shares under option For details of the options outstanding to subscribe for HSBC Holdings ordinary shares under the HSBC Holdings Savings-Related Share Option Plan (UK), see Note 5 . Aggregate options outstanding under these plans 31 Dec 2025 31 Dec 2024 Number of HSBC Holdings ordinary shares Usual period of exercise Exercise price Number of HSBC Holdings ordinary shares Usual period of exercise Exercise price 58,902,349 2024 to 2031 £ 2.6270 – £ 7.6110 75,335,399 2023 to 2030 £ 2.6270 – 5.4490 Maximum obligation to deliver HSBC Holdings ordinary shares At 31 December 2025, the maximum obligation to deliver HSBC Holdings ordinary shares under all of the above option arrangements and the HSBC International Employee Share Purchase Plan, together with long-term incentive awards and deferred share awards granted under the HSBC Share Plan 2011, was 178,823,734 (2024: 209,683,768 ). The total number of shares at 31 December 2025 held by employee benefit trusts that may be used to satisfy such obligations to deliver HSBC Holdings ordinary shares was 35,354,337 (2024: 9,305,925 ). 33 Contingent liabilities, contractual commitments and guarantees HSBC HSBC Holdings 1 2025 2024 2025 2024 $m $m $m $m Guarantees and other contingent liabilities: –  financial guarantees 17,476 16,998 — — –  performance and other guarantees 102,684 92,723 6,983 7,327 –  other contingent liabilities 164 298 — — At 31 Dec 120,324 110,019 6,983 7,327 Commitments: 2 –  documentary credits and short-term trade-related transactions 6,959 7,096 — — –  forward asset purchases and forward deposits placed 84,978 61,017 — — –  standby facilities, credit lines and other commitments to lend 856,700 793,465 — — At 31 Dec 948,637 861,578 — — 1 Guarantees by HSBC Holdings are in favour of other Group entities. These include contracts that provide protection against credit risk on a specified exposure but do not meet the definition of financial guarantees. 2 Includes $ 690.8 bn of commitments at 31 December 2025 (31 December 2024 : $ 619.4 b n ), to which the impairment requirements in IFRS 9 are applied. The preceding table discloses the nominal principal amounts of off-balance sheet liabilities and commitments for the Group, which represent the maximum amounts at risk should the contracts be fully drawn upon and the clients default. As a significant portion of guarantees and commitments are expected to expire without being drawn upon, the total of the nominal principal amounts is not indicative of future liquidity requirements. The expected credit loss provision relating to guarantees and commitments under IFRS 9 is disclosed in Note 28 . The majority of the guarantees have a term of less than one year. All guarantees are subject to HSBC’s annual credit review process. Contingent liabilities arising from legal proceedings, regulatory and other matters against Group companies are excluded from this note but are disclosed in Notes 28 and 35 . Financial Services Compensation Scheme The Financial Services Compensation Scheme (‘FSCS’) provides compensation, up to certain limits, to eligible customers of financial services firms that are unable, or likely to be unable, to pay claims against them. The FSCS may impose a further levy on the Group to the extent the industry levies imposed to date are not sufficient to cover the compensation due to customers in any future possible collapse. The ultimate FSCS levy to the industry as a result of a collapse cannot be estimated reliably. It is dependent on various uncertain factors including the potential recovery of assets by the FSCS, changes in the level of protected products (including deposits and investments) and the population of FSCS members at the time. Associates HSBC’s share of associates’ contingent liabilities, contractual commitments and guarantees amounted to $ 70.9 bn at 31 December 2025 (2024: $ 74.5 bn ). No matters arose where HSBC was severally liable. HSBC Holdings plc Annual Report on Form 20-F 369 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements 34 Finance lease receivables HSBC leases a variety of assets to third parties under finance leases, including transport assets (such as aircraft), property and general plant and machinery. At the end of lease terms, assets may be sold to third parties or leased for further terms. Rentals are calculated to recover the cost of assets less their residual value, and earn finance income. The table below excludes finance lease receivables reclassified on the balance sheet to ‘Assets held for sale’ in accordance with IFRS 5. Net investment in finance leases of $ 2 m was reclassified to ‘Assets held for sale’ in 2025 as a result of the planned sale of HSBC Bank (Uruguay) S.A. There was no net investment in finance leases classified as held-for-sale at 31 December 2024. 2025 2024 Total future minimum payments Unearned finance income Present value Total future minimum payments Unearned finance income Present value $m $m $m $m $m $m Lease receivables: No later than one year 2,507 ( 293 ) 2,214 2,331 ( 295 ) 2,036 One to two years 1,830 ( 224 ) 1,606 1,787 ( 226 ) 1,561 Two to three years 1,335 ( 167 ) 1,168 1,290 ( 171 ) 1,119 Three to four years 884 ( 127 ) 757 839 ( 134 ) 705 Four to five years 629 ( 102 ) 527 766 ( 147 ) 619 Later than one year and no later than five years 4,678 ( 620 ) 4,058 4,682 ( 678 ) 4,004 Later than five years 3,553 ( 578 ) 2,975 3,518 ( 639 ) 2,879 At 31 Dec 10,738 ( 1,491 ) 9,247 10,531 ( 1,612 ) 8,919 35 Legal proceedings and regulatory matters HSBC is party to legal proceedings and regulatory matters in a number of jurisdictions arising out of its normal business operations. Apart from the matters described below, HSBC considers that none of these matters are material. The recognition of provisions is determined in accordance with the accounting policies set out in Note 1 . While the outcomes of legal proceedings and regulatory matters are inherently uncertain, management believes that, based on the information available to it, appropriate provisions have been made in respect of these matters as at 31 December 2025 (see Note 28 ). Where an individual provision is material, the fact that a provision has been made is stated and quantified, except to the extent that doing so would be seriously prejudicial. Any provision recognised does not constitute an admission of wrongdoing or legal liability. It is not practicable to provide an aggregate estimate of potential liability for our legal proceedings and regulatory matters as a class of contingent liabilities. Bernard L. Madoff Investment Securities LLC Various HSBC companies that provided custodial, administration and similar services to a number of funds whose assets were invested with Bernard L. Madoff Investment Securities LLC (‘Madoff Securities’) have been named as defendants in lawsuits arising out of Madoff Securities’ fraud. Trustee litigation: The Madoff Securities trustee (the ‘Trustee’) has brought lawsuits in the US against various HSBC companies and others seeking recovery of alleged transfers from Madoff Securities to the HSBC companies in the amount of $ 508 m (plus interest). In September 2025, the US Bankruptcy Court for the Southern District of New York dismissed all claims against HSBC Private Bank (Suisse) SA in the amount of $ 292 m and certain claims against HSBC Bank USA N.A. (‘HSBC Bank USA’) in the amount of $ 32 m . The Trustee has appealed. The Trustee’s remaining claims, which amount to $ 184 m , are pending. The Trustee has filed a claim against various HSBC companies in the High Court of England and Wales seeking recovery of alleged transfers from Madoff Securities to the HSBC companies. The claim has not yet been served and the amount claimed has not been specified. Fairfield Funds litigation: Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited (each in liquidation and together, the ‘Fairfield Funds’) have brought lawsuits in the US against various HSBC companies and others seeking recovery of alleged transfers from the Fairfield Funds to the HSBC companies (that acted as nominees for clients) in the amount of $ 382 m (plus interest). In August 2025, the US Court of Appeals for the Second Circuit confirmed the dismissal of Fairfield Funds’ claims against all HSBC companies. Fairfield Funds may appeal. Herald Fund SPC (‘Herald’) litigation: HSBC Securities Services Luxembourg (‘HSSL’) and HSBC Bank plc are defending an action brought by Herald (in liquidation) before the Luxembourg District Court seeking restitution of securities (the amount of which would be determined by further proceedings, if Herald is successful in its claim) and $ 521 m in cash (plus interest) or, alternatively, damages in the amount of $ 5.6 b n (plus interest). Herald’s damages claim against HSSL and HSBC Bank plc has been stayed. In December 2024, the Luxembourg Court of Appeal determined that Herald’s claims for restitution of securities and cash against HSSL were founded in principle. HSSL appealed this decision and, in October 2025, the Luxembourg Court of Cassation denied HSSL’s appeal in respect of Herald’s securities restitution claim, but accepted HSSL’s appeal in respect of Herald’s cash restitution claim, which has been returned to the Luxembourg District Court for determination. HSSL is pursuing a second appeal on the securities restitution claim before the Luxembourg Court of Appeal. Following the Court of Cassation’s decision, HSSL has recognised a $ 1.1 b n provision in connection with this matter. Given the pendency of the second appeal and the complexities and uncertainties associated with determining the quantum of restitution, the eventual financial impact could be significantly different. Alpha Prime Fund Limited (‘Alpha Prime’) litigation: Various HSBC companies are defending an action brought by Alpha Prime in the Luxembourg District Court seeking restitution of securities and $ 1 b n (plus interest) in supplementary damages or, alternatively, damages in the amount of $ 3.3 b n (plus interest). This matter is currently pending before the Luxembourg District Court. In November 2024, Alpha Prime served various HSBC companies with a lawsuit filed in the Bermuda Supreme Court seeking damages for unspecified amounts for alleged breach of contract and negligence. This claim is currently stayed. Senator Fund SPC (‘Senator’) litigation: HSSL and the Luxembourg branch of HSBC Bank plc are defending an action brought by Senator before the Luxembourg District Court seeking restitution of securities or, alternatively, damages in the amount of $ 1.4 b n (plus interest). This matter is currently pending before the Luxembourg District Court. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. HSBC Holdings plc Annual Report on Form 20-F 370 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements US Anti-Terrorism Act litigation Since November 2014, a number of lawsuits have been filed in federal courts in the US against various HSBC companies and others on behalf of plaintiffs who are, or are related to, alleged victims of terrorist attacks in the Middle East. In each case, it is alleged that the defendants aided and abetted the unlawful conduct of various sanctioned parties in violation of the US Anti-Terrorism Act, or provided banking services to customers alleged to have connections to terrorism financing. Six actions, which seek damages for unspecified amounts, remain pending. One of these actions has been dismissed but may be appealed. The other five actions remain at an early procedural stage. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. US dollar Libor litigation Various HSBC companies are defending two individual actions which allege that the HSBC defendants violated various US federal and state laws, including antitrust laws, related to the setting of US dollar Libor, and seek damages for unspecified amounts. In September 2025, the US District Court for the Southern District of New York granted the defendants’ joint motion for summary judgment and dismissed these actions. The plaintiffs have appealed. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. Foreign exchange-related investigations and litigation In December 2016, Brazil’s Administrative Council of Economic Defense initiated an investigation into the onshore foreign exchange market and identified a number of banks, including HSBC, as subjects of its investigation. This investigation is ongoing. Lawsuits alleging foreign exchange- related misconduct remain pending against HSBC and other banks in courts in Brazil. Since 2017, HSBC Bank plc, among other financial institutions, has been defending a complaint filed by the Competition Commission of South Africa before the South African Competition Tribunal for alleged anti-competitive behaviour in the South African foreign exchange market. In 2020, a revised complaint was filed which also named HSBC Bank USA as a defendant. In January 2024, the South African Competition Appeal Court dismissed HSBC Bank USA from the revised complaint but denied HSBC Bank plc’s application to dismiss. Both the Competition Commission and HSBC Bank plc have appealed to the Constitutional Court of South Africa. HSBC Bank plc and HSBC Holdings have reached a settlement with plaintiffs in Israel to resolve a class action filed in the local courts alleging foreign exchange-related misconduct. The settlement, the impact of which is not significant and is fully provisioned, remains subject to court approval. In February 2024, HSBC Bank plc and HSBC Holdings were joined to an existing claim brought in the UK Competition Appeals Tribunal (‘UK CAT’) against various other banks alleging historical anti-competitive behaviour in the foreign exchange market and seeking approximately £ 3 b n in damages from all the defendants. In December 2025, the UK Supreme Court upheld an earlier ruling of the UK CAT refusing certification as an opt- out claim. This matter remains pending before the UK CAT. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. Precious metals fix-related litigation US litigation: Various HSBC companies and other members of The London Silver Market Fixing Limited are defending a class action pending in the US District Court for the Southern District of New York alleging that, from January 2007 to December 2013, the defendants conspired to manipulate the price of silver and silver derivatives for their collective benefit in violation of US antitrust laws, the US Commodity Exchange Act and New York state law. In May 2023, this action, which seeks damages for unspecified amounts, was dismissed but remains pending on appeal. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant. Canada litigation: Various HSBC companies and other financial institutions have been defending putative class actions filed in the Ontario and Quebec Superior Courts of Justice alleging that the defendants conspired to manipulate the price of silver, gold and related derivatives in violation of the Canadian Competition Act and common law. These actions each seek CA $ 1 b n in damages plus CA $ 250 m in punitive damages. The HSBC defendants have reached a settlement with the plaintiffs to resolve these matters. The settlement, the impact of which is not significant and is fully provisioned, is subject to court approval. Tax-related investigations Since 2023, the French National Financial Prosecutor (‘PNF’) had been investigating HSBC Continental Europe and the Paris branch of HSBC Bank plc, in connection with alleged tax fraud related to the dividend withholding tax treatment of certain trading activities. In January 2026, HSBC Bank plc reached an agreement with the PNF to resolve its investigation. HSBC Bank plc paid a total of € 302 m and this matter is now closed. The investigation into HSBC Continental Europe was closed with no further action. HSBC Bank plc and the German branch of HSBC Continental Europe continue to cooperate with investigations by the German public prosecutor into numerous financial institutions and their employees, in connection with the dividend withholding tax treatment of certain trading activities. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant. Gilts trading litigation In June 2023, HSBC Bank plc and HSBC Securities (USA) Inc., among other banks, were named as defendants in a putative class action filed in the US District Court for the Southern District of New York by plaintiffs alleging anti-competitive conduct in the gilts market and seeking damages for unspecified amounts. Certain of the defendants, including HSBC Bank plc and HSBC Securities (USA) Inc., have reached a settlement with the plaintiffs to resolve this matter. The settlement, the impact of which is not significant and has been paid, remains subject to final court approval. HSBC Holdings plc Annual Report on Form 20-F 371 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Korean short selling indictment In March 2024, the Korean Prosecutors’ Office issued a criminal indictment against The Hongkong and Shanghai Banking Corporation Limited (‘HBAP’) and three current and former employees for breaching short selling rules under the Financial Investment Services and Capital Markets Act in connection with trades carried out between August 2021 and December 2021. In September 2025, the Korean appellate court confirmed the acquittal of HBAP of all charges. The Korean Prosecutors’ Office has further appealed to the Korean Supreme Court. Investigations involving HSBC Private Bank (Suisse) SA Law enforcement authorities in Switzerland and France are conducting criminal investigations into HSBC Private Bank (Suisse) SA in connection with alleged money laundering offences in respect of two historical banking relationships. These investigations are ongoing. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. First Citizens litigation In May 2023, First-Citizens Bank & Trust Company (‘First Citizens’) brought a lawsuit in the US District Court for the Northern District of California against various HSBC companies and seven US-based HSBC employees who had previously worked for Silicon Valley Bank (‘SVB’). The lawsuit seeks $ 1 b n in damages and alleges, among other things, that the various HSBC companies conspired with the individual defendants to solicit employees from First Citizens and that the individual defendants took confidential information belonging to SVB and/or First Citizens. In January 2026, First Citizens amended its complaint to add claims purportedly assigned by the Federal Deposit Insurance Corporation (‘FDIC’). These include claims concerning the period between SVB’s entry into FDIC receivership and First Citizens’ purchase of SVB’s US assets. First Citizens also seeks to bring certain claims and defendants dismissed by the court in July 2024 back into the litigation. The defendants have filed a motion to dismiss the amended complaint. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant. US mortgage securitisation litigation Beginning in 2014, a number of lawsuits were filed in various state and federal courts in the US against HSBC Bank USA, as a trustee of more than 280 mortgage securitisation trusts, seeking unspecified damages for losses in collateral value allegedly sustained by the trusts. Nearly all of these lawsuits have either been settled or dismissed; one action remains pending in a New York state court. HSBC Bank USA and certain of its affiliates are named as defendants in a mortgage loan repurchase action brought by the trustee of a mortgage securitisation trust in New York state court and seeking unspecified damages and specific performance. The plaintiff has appealed the dismissal of this action, and the appeal is pending. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. Mexican government bond litigation HSBC Mexico S.A. and other banks are named as defendants in a consolidated putative class action pending in the US District Court for the Southern District of New York alleging anti-competitive conduct related to Mexican government bond transactions between 2010 and 2014 and seeking unspecified damages. In January 2025, the court denied the defendants’ motion to dismiss the plaintiffs’ third amended complaint, and this action is proceeding. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant. Other regulatory investigations, reviews and litigation HSBC Holdings and/or certain of its affiliates are also subject to a number of other enquiries and examinations, requests for information, investigations and reviews by various tax authorities, regulators, competition and law enforcement authorities, as well as legal proceedings including litigation, arbitration and other contentious proceedings, in connection with various matters arising out of their businesses and operations. At the present time, HSBC does not expect the ultimate resolution of any of these matters to be material to the Group’s financial position; however, given the uncertainties involved in legal proceedings and regulatory matters, there can be no assurance regarding the eventual outcome of a particular matter or matters. 36 Related party transactions Related parties of the Group and HSBC Holdings include subsidiaries, associates, joint ventures, fund-related entities, post-employment benefit plans for HSBC employees, Key Management Personnel (‘KMP’) as defined by IAS 24, close family members of KMP and entities that are controlled or jointly controlled by KMP or their close family members. KMP are defined as those persons having authority and responsibility for planning, directing and controlling the activities of HSBC Holdings. These individuals also constitute ‘senior management’ for the purposes of the Hong Kong Listing Rules. In applying IAS 24, it was determined that for this financial reporting period KMP included Directors, former Directors and senior management listed on pages 220 to 224 except for the roles of Group Chief Legal Officer, Group Head of Internal Audit, Group Chief People & Governance Officer and Group Company Secretary who do not meet the criteria for KMP as provided for in the standard. Particulars of transactions with related parties are tabulated below. The disclosure of the year-end balance and the highest amounts outstanding during the year is considered to be the most meaningful information to represent the amount of the transactions and outstanding balances during the year. HSBC Holdings plc Annual Report on Form 20-F 372 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Key Management Personnel Details of Directors’ remuneration and interests in shares are disclosed in the ‘Directors’ remuneration report’ on pages 249 to 274 . IAS 24 ‘Related Party Disclosures’ requires the following additional information for key management compensation. Compensation of Key Management Personnel 2025 2024 2023 $m $m $m Short-term employee benefits 47 53 51 Post-employment benefits 1 1 1 Other long-term employee benefits 14 12 10 Share-based payments 30 29 29 Year ended 31 Dec 92 95 91 Shareholdings, options and other securities of Key Management Personnel 2025 2024 (000s) (000s) Number of options held over HSBC Holdings ordinary shares under employee share plans — 20 Number of HSBC Holdings ordinary shares held beneficially and non-beneficially 14,817 17,455 Number of other HSBC securities held — 228 At 31 Dec 14,817 17,703 Advances and credits, guarantees and deposit balances during the year with Key Management Personnel 2025 2024 Balance at 31 Dec Highest amounts outstanding during year Balance at 31 Dec Highest amounts outstanding during year $m $m $m $m Key Management Personnel Advances and credits 1 11 12 9 12 Guarantees — — — — Deposits 67 144 78 191 1 Advances and credits entered into by subsidiaries of HSBC Holdings plc during 2025 with Directors and former Directors, disclosed pursuant to section 413 of the Companies Act 2006, totalled $ 0.1 m ( 2024 : $ 1.3 m ) and the total value of guarantees entered into on behalf of the Directors and former Directors was nil ( 2024 : nil ) . Unless previously disclosed, there were no connected transactions during the reporting period that fell outside the exemptions provided by the Companies Act 2006, the UK Financial Conduct Authority’s Listing Rules and the Rules Governing The Listing of Securities on The Stock Exchange of Hong Kong Limited. The transactions conducted were in the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with parties of a similar standing or, where applicable, with other employees. These transactions did not involve more than the normal risk of repayment or present other unfavourable features. Associates and joint ventures The Group provides certain banking and financial services to associates and joint ventures including loans, overdrafts, interest and non-interest bearing deposits and current accounts. Details of the interests in associates and joint ventures are given in Note 18 . Transactions and balances during the year with associates and joint ventures 2025 2024 Highest balance during the year Balance at 31 Dec Highest balance during the year Balance at 31 Dec $m $m $m $m Unsubordinated amounts due from joint ventures 253 229 104 72 Unsubordinated amounts due from associates 9,945 4,760 8,097 5,011 Amounts due to associates 2,990 1,344 2,992 1,844 Amounts due to joint ventures 212 153 101 85 Fair value of derivative assets with associates 902 673 919 763 Fair value of derivative liabilities with associates 2,660 1,480 3,718 2,641 Guarantees and commitments 992 777 569 577 The above outstanding balances arose in the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties . Post-employment benefit plans At 31 December 2025 , $ 3.8 bn ( 2024 : $ 3.4 bn ) of HSBC post-employment benefit plan assets were under management by HSBC companies, earning management fees of $ 15 m in 2025 ( 2024 : $ 14 m ). At 31 December 2025 , HSBC’s post-employment benefit plans had placed deposits of $ 0.4 bn ( 2024 : $ 0.4 bn ) with its banking subsidiaries, earning interest payable to the schemes of $ 5 m ( 2024 : $ 2 m ). The above outstanding balances arose from the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties. The combined HSBC Bank (UK) Pension Scheme enters into swap transactions with HSBC to manage inflation and interest rate sensitivity of its liabilities and selected assets. At 31 December 2025 , the gross notional value of the swaps was $ 6.6 bn ( 2024 : $ 6.4 bn ). These swaps had a positive fair value to the scheme of $ 0.4 bn ( 2024 : $ 0.4 bn ); and HSBC had delivered collateral of $ 0.3 bn ( 2024 : $ 0.4 bn ) to the scheme in respect of these arrangements. All swaps were executed at prevailing market rates and within standard market bid/offer spreads. HSBC Holdings plc Annual Report on Form 20-F 373 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements HSBC Holdings Details of HSBC Holdings’ subsidiaries are shown in Note 38 . Transactions and balances during the year with subsidiaries 2025 2024 Highest balance during the year Balance at 31 Dec Highest balance during the year Balance at 31 Dec $m $m $m $m Assets Cash and balances with HSBC undertakings 7,613 5,079 9,342 2,548 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value 70,015 67,217 66,030 61,286 Derivatives 3,102 1,942 3,391 3,054 Loans and advances to HSBC undertakings 40,500 40,500 37,677 37,677 Prepayments, accrued income and other assets 6,126 3,416 7,108 4,216 Investments in subsidiaries 157,728 157,728 160,805 152,337 Total related party assets at 31 Dec 285,084 275,882 284,353 261,118 Liabilities Amounts owed to HSBC undertakings 192 89 231 231 Derivatives 5,412 3,451 7,944 5,340 Accruals, deferred income and other liabilities 2,184 53 399 194 Subordinated liabilities — — 1,202 — Total related party liabilities at 31 Dec 7,788 3,593 9,776 5,765 Guarantees and commitments 7,318 6,983 7,440 7,327 The above outstanding balances arose in the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties. One employee of HSBC Holdings is a member of the HSBC Bank (UK) Pension Scheme, which is sponsored by a separate Group company. HSBC Holdings incurs a charge for this employee, equal to the contributions paid into the scheme on his behalf. Disclosure in relation to the scheme is made in Note 5 . 37 Events after the balance sheet date On 8 January 2026, the proposal to privatise Hang Seng Bank Limited (‘Hang Seng Bank’) through a scheme of arrangement was approved by Hang Seng Bank shareholders. On approval, a financial liability was recognised in the Group’s consolidated financial statements for the present value of the proposed HK$ 106 b n ($ 13.7 b n) purchase consideration. A corresponding adjustment to equity, net of derecognising the non-controlling interest, which stood at $ 7.0 b n as at 31 December 2025, was also recognised. On 26 January 2026, the scheme of arrangement became effective and Hang Seng Bank was subsequently delisted from The Stock Exchange of Hong Kong Limited on 27 January 2026. To demonstrate funding availability for the proposal, securities of HK$ 129.3 b n ($ 16.6 b n) were segregated and reported as encumbered on the balance sheet as at 31 December 2025. These assets were designated to demonstrate that sufficient resources were available at all times to settle the acquisition consideration and to provide a buffer against potential mark-to-market movements. The transaction was settled on 4 February 2026. At that point, all payment obligations under the scheme of arrangement were met, and the segregation of assets ceased. On 30 January 2026, HSBC Bank plc completed the sale of its UK life insurance entity, HSBC Life (UK) Limited, to Chesnara plc. Prior to completion, as at 31 December 2025, the balances that were classified as held for sale were $ 6.6 b n in assets and $ 6.4 b n in liabilities. For the year ended 31 December 2025, we recognised a loss on disposal of $ 0.1 b n. In the first quarter of 2026, we will recycle foreign currency translation reserves to the income statement. These stood at a cumulative $ 0.2 b n loss as at 31 December 2025. A fourth interim dividend for 2025 of $ 0.45 per ordinary share (a distribution of approximately $ 7.71 bn) was approved by the Directors after 31 December 2025. On 11 February 2026, HSBC Holdings called $ 1,000 m 4.000 % perpetual subordinated contingent convertible securities, which are expected to be redeemed and cancelled on 9 March 2026. The accounts were approved by the Board of Directors on 25 February 2026 and authorised for issue. 38 HSBC Holdings’ subsidiaries, funds, joint ventures and associates In accordance with section 409 of the Companies Act 2006 a list of HSBC Holdings plc subsidiaries, funds, joint ventures and associates, the registered office addresses and the effective percentages of equity owned at 31 December 2025 are disclosed below. Unless otherwise stated, the share capital comprises ordinary or common shares that are held by Group subsidiaries. The ownership percentage is provided for each undertaking. The undertakings below are consolidated by HSBC unless otherwise indicated. HSBC Holdings plc Annual Report on Form 20-F 374 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Subsidiaries Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes AI Nominees (UK) One Limited 100.00 11 AI Nominees (UK) Two Limited 100.00 11 Almacenadora Banpacifico S.A. (In Liquidation) N/A 1, 12 Assetfinance December (F) Limited 100.00 13 Assetfinance December (H) Limited (In Liquidation) 100.00 14 Assetfinance December (P) Limited 100.00 11 Assetfinance December (R) Limited (In Liquidation) 100.00 14 Assetfinance June (A) Limited 100.00 11 Assetfinance June (D) Limited (In Liquidation) 100.00 14 Assetfinance March (B) Limited 100.00 15 Assetfinance March (D) Limited 100.00 13 Assetfinance March (F) Limited (In Liquidation) 100.00 14 Assetfinance September (F) Limited 100.00 11 Assetfinance September (G) Limited (In Liquidation) 100.00 14 B&Q Financial Services Limited (In Liquidation) 100.00 14 Banco HSBC S.A. 100.00 16 Banco Nominees (Guernsey) Limited 100.00 17 Banco Nominees 2 (Guernsey) Limited 100.00 17 Banco Nominees Limited 100.00 18 Beau Soleil Limited Partnership N/A 1, 19 Beijing HSBC Real Estate Leasing Company Limited N/A 1, 10, 20 Beijing Miyun HSBC Rural Bank Company Limited N/A 1, 10, 21 BentallGreenOak China Real Estate Investments, L.P. N/A 1, 22 Canada Square Nominees (UK) Limited 100.00 11 Capco/Cove, Inc. 100.00 23 Card-Flo #3, Inc. 100.00 24 CCF & Partners Asset Management Limited (In Liquidation) 100.00 ( 99.99 ) 14 CCF Holding (Liban) S.A.L. (In Liquidation) 74.99 2, 25 Charterhouse Administrators (D.T.) Limited 100.00 ( 99.99 ) 11 Charterhouse Management Services Limited 100.00 ( 99.99 ) 11 Charterhouse Pensions Limited 100.00 11 Chongqing Dazu HSBC Rural Bank Company Limited N/A 1, 10, 26 Chongqing Fengdu HSBC Rural Bank Company Limited N/A 1, 10, 27 Chongqing Rongchang HSBC Rural Bank Company Limited (In Liquidation) N/A 1, 10, 28 COIF Nominees (UK) Two Limited 100.00 11 COIF Nominees Limited N/A 1, 11 Corsair IV Financial Services Capital Partners - B L.P N/A 1, 29 Dalian Pulandian HSBC Rural Bank Company Limited N/A 1, 10, 30 Decision One Mortgage Company, LLC N/A 1, 31 Desarrollo Turistico, S.A. de C.V. (In Liquidation) 100.00 ( 99.99 ) 12 Electronic Data Process México, S.A. de C.V. 100.00 32 Eton Corporate Services Limited 100.00 17 Flandres Contentieux S.A. 100.00 ( 99.99 ) 5, 33 Foncière Elysées 100.00 ( 99.99 ) 5, 33 Fujian Yongan HSBC Rural Bank Company Limited N/A 1, 10, 34 Fulcher Enterprises Company Limited (In Liquidation) 100.00 ( 63.43 ) 35 Fundacion HSBC, A.C. 100.00 ( 99.99 ) 2, 8, 12 Giller Ltd. 100.00 23 Griffin International Limited (In Liquidation) 100.00 14 Grupo Financiero HSBC, S. A. de C. V. 99.99 12 Guangdong Enping HSBC Rural Bank Company Limited N/A 1, 10, 36 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes Guangzhou HSBC Real Estate Company Ltd N/A 1, 10, 37 Hang Seng (Nominee) Limited 100.00 ( 63.43 ) 38 Hang Seng Bank (China) Limited N/A 1, 10, 39 Hang Seng Bank (Trustee) Limited 100.00 ( 63.43 ) 38 Hang Seng Bank Limited 63.43 38 Hang Seng Bullion Company Limited 100.00 ( 63.43 ) 38 Hang Seng Credit Limited (In Liquidation) 100.00 ( 63.43 ) 35 Hang Seng Data Services Limited 100.00 ( 63.43 ) 38 Hang Seng Finance Limited 100.00 ( 63.43 ) 38 Hang Seng Financial Information Limited 100.00 ( 63.43 ) 38 Hang Seng Indexes (Netherlands) B.V. 100.00 ( 63.43 ) 40 Hang Seng Indexes Company Limited 100.00 ( 63.43 ) 38 Hang Seng Insurance Company Limited 100.00 ( 63.43 ) 38 Hang Seng Investment Management Limited 100.00 ( 63.43 ) 38 Hang Seng Investment Services Limited 100.00 ( 63.43 ) 38 Hang Seng Qianhai Fund Management Company Limited N/A 1, 10, 41 Hang Seng Real Estate Management Limited 100.00 ( 63.43 ) 38 Hang Seng Securities Limited 100.00 ( 63.43 ) 38 Hang Seng Security Management Limited 100.00 ( 63.43 ) 38 HASE Wealth Limited 100.00 ( 63.43 ) 38 Haseba Investment Company Limited 100.00 ( 63.43 ) 38 HBPH Corporation (In Liquidation) 99.99 42 HFC Bank Limited (In Liquidation) 100.00 43 High Time Investments Limited 100.00 ( 63.43 ) 38 HLF 100.00 ( 99.99 ) 5, 33 Honey Blue Enterprises Limited 100.00 19 Honey Green Enterprises Ltd. 100.00 44 Honey Grey Enterprises Limited 100.00 19 Honey Silver Enterprises Limited 100.00 19 Household International Europe Limited (In Liquidation) 100.00 43 Household Pooling Corporation 100.00 45 Housing (USA) Inc. 100.00 24 HSBC (BGF) Investments Limited 100.00 11 HSBC (Kuala Lumpur) Nominees Sdn Bhd 100.00 46 HSBC (Malaysia) Trustee Berhad 100.00 47 HSBC (Singapore) Nominees Pte Ltd 100.00 48 HSBC Agency (India) Private Limited 100.00 49 HSBC Amanah Malaysia Berhad 100.00 46 HSBC Americas Corporation (Delaware) 100.00 24 HSBC Asia Holdings B.V. 100.00 11 HSBC Asia Holdings Limited 100.00 3, 19 HSBC Asia Pacific Holdings (UK) Limited 100.00 6, 11 HSBC Asset Finance (UK) Limited 100.00 11 HSBC Asset Finance M.O.G. Holdings (UK) Limited 100.00 11 HSBC Australia Holdings Pty Limited 100.00 4, 6, 52 HSBC BANK (CHILE) 100.00 53 HSBC Bank (China) Company Limited N/A 1, 10, 54 HSBC Bank (General Partner) Limited 100.00 55 HSBC Bank (Mauritius) Limited 100.00 56 HSBC Bank (Singapore) Limited 100.00 48 HSBC Bank (Taiwan) Limited 100.00 57 HSBC Bank (Uruguay) S.A. 100.00 58 HSBC Bank (Vietnam) Ltd. 100.00 59 HSBC Bank A.S. 100.00 60 HSBC Bank Australia Limited 100.00 52 HSBC Bank Bermuda Limited 100.00 18 HSBC Bank Capital Funding (Sterling 1) LP N/A 1, 55 HSBC Bank Egypt S.A.E 94.54 61 HSBC Bank Malaysia Berhad 100.00 4, 46 HSBC Bank Malta p.l.c. 70.03 62 HSBC Bank Middle East Limited 100.00 4, 63 HSBC Bank Pension Trust (UK) Limited 100.00 11 HSBC Bank plc 100.00 3, 4, 11 HSBC Bank USA, National Association 100.00 4, 64 HSBC Branch Nominee (UK) Limited 100.00 13 HSBC Holdings plc Annual Report on Form 20-F 375 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Brasil Holding S.A. 100.00 16 HSBC Broking Forex (Asia) Limited 100.00 19 HSBC Broking Futures (Asia) Limited 100.00 19 HSBC Broking Futures (Hong Kong) Limited 100.00 19 HSBC Broking Securities (Asia) Limited 100.00 19 HSBC Broking Securities (Hong Kong) Limited 100.00 19 HSBC Broking Services (Asia) Limited 100.00 19 HSBC Capital (USA), Inc. 100.00 24 HSBC Card Services Inc. 100.00 24 HSBC Casa de Bolsa, S.A. de C.V., Grupo Financiero HSBC 100.00 ( 99.99 ) 12 HSBC Cayman Limited (In Liquidation) 100.00 65 HSBC Cayman Services Limited 100.00 65 HSBC Client Holdings Nominee (UK) Limited 100.00 11 HSBC Client Nominee (Jersey) Limited 100.00 2, 66 HSBC Continental Europe 99.99 5, 33 HSBC Corporate Advisory (Malaysia) Sdn Bhd 100.00 46 HSBC Corporate Finance (Hong Kong) Limited 100.00 19 HSBC Corporate Secretary (UK) Limited 100.00 3, 11 HSBC Corporate Services (Shanghai) Co., Ltd. N/A 1, 10, 67 HSBC Corporate Trustee Company (UK) Limited 100.00 11 HSBC Custody Nominees (Australia) Limited 100.00 52 HSBC Custody Services (Guernsey) Limited 100.00 17 HSBC Electronic Data Processing (Guangdong) Limited N/A 1, 10, 69 HSBC Electronic Data Processing (Malaysia) Sdn Bhd 100.00 70 HSBC Electronic Data Processing (Philippines), Inc. 99.99 71 HSBC Electronic Data Processing India Private Limited 100.00 72 HSBC Electronic Data Processing Lanka (Private) Limited 100.00 73 HSBC Electronic Data Service Delivery (Egypt) S.A.E 100.00 74 HSBC Equipment Finance (UK) Limited 100.00 13 HSBC Equity (UK) Limited (In Liquidation) 100.00 14 HSBC Europe B.V. 100.00 11 HSBC Express Finance Data Services Limited 100.00 19 HSBC Factoring (France) 100.00 ( 99.99 ) 5, 33 HSBC Finance (Netherlands) 100.00 3, 11 HSBC Finance Corporation 100.00 24 HSBC Finance Limited (In Liquidation) 100.00 14 HSBC Finance Transformation (UK) Limited 100.00 11 HSBC Financial Advisors Singapore Pte. Ltd. 100.00 2, 48 HSBC Financial Services (Lebanon) S.A.L (In Liquidation) 99.83 75 HSBC FinTech Services (Shanghai) Company Limited N/A 1, 10, 76 HSBC Global Custody Nominee (UK) Limited 100.00 11 HSBC Global Custody Proprietary Nominee (UK) Limited 100.00 11 HSBC Global Services (Canada) Limited 100.00 85 HSBC Global Services (China) Holdings Limited 100.00 11 HSBC Global Services (Hong Kong) Limited 100.00 19 HSBC Global Services (UK) Limited 100.00 11 HSBC Global Services Limited 100.00 3, 11 HSBC Group Management Services Limited 100.00 11 HSBC Group Nominees UK Limited 100.00 3, 11 HSBC Holdings B.V. 100.00 11 HSBC Innovation Bank Limited 100.00 87 HSBC Institutional Trust Services (Asia) Limited 100.00 19 HSBC Institutional Trust Services (Bermuda) Limited 100.00 18 HSBC Institutional Trust Services (Mauritius) Limited 100.00 88 HSBC Institutional Trust Services (Singapore) Limited 100.00 48 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Insurance (Asia) Limited 100.00 89 HSBC Insurance (Asia-Pacific) Holdings Limited 100.00 79 HSBC Insurance (Bermuda) Limited 100.00 18 HSBC Insurance Agency (USA) Inc. 100.00 90 HSBC Insurance Brokerage Company Limited N/A 1, 10, 91 HSBC Insurance Brokers Greater China Limited 100.00 79 HSBC Insurance SAC 1 (Bermuda) Limited 100.00 18 HSBC Insurance SAC 2 (Bermuda) Limited 100.00 18 HSBC International Finance Corporation (Delaware) 100.00 92 HSBC International Trustee (BVI) Limited 100.00 9, 93 HSBC International Trustee (Holdings) Pte. Limited 100.00 48 HSBC International Trustee Limited 100.00 94 HSBC Inversiones S.A. 100.00 53 HSBC InvestDirect (India) Private Limited 99.99 50 HSBC InvestDirect Financial Services (India) Limited 99.99 50 HSBC InvestDirect Sales & Marketing (India) Private Limited 98.99 ( 98.98 ) 49 HSBC InvestDirect Securities (India) Private Limited 99.99 50 HSBC Investment and Insurance Brokerage, Philippines Inc. 99.99 95 HSBC Investment Bank Holdings B.V. 100.00 11 HSBC Investment Bank Holdings Limited 100.00 11 HSBC Investment Company Limited 100.00 3, 11 HSBC Invoice Finance (UK) Limited 100.00 13 HSBC Issuer Services Common Depositary Nominee (UK) Limited 100.00 11 HSBC Latin America B.V. 100.00 11 HSBC Latin America Holdings (UK) Limited 100.00 3, 11 HSBC Leasing (Asia) Limited 100.00 19 HSBC Life (Bermuda) Limited 100.00 18 HSBC Life (Cornell Centre) Limited 100.00 89 HSBC Life (Edwick Centre) Limited 100.00 89 HSBC Life (International) Limited 100.00 18 HSBC Life (Property) Limited 100.00 89 HSBC Life (Singapore) Pte. Ltd. 100.00 48 HSBC Life (Tsing Yi Industrial) Limited 100.00 89 HSBC Life (UK) Limited 100.00 11 HSBC Life (Workshop) Limited 100.00 89 HSBC Life Assurance (Malta) Ltd. 100.00 ( 70.03 ) 80 HSBC Life Insurance Company Limited N/A 1, 10, 97 HSBC LU Nominees Limited 100.00 11 HSBC Markets (USA) Inc. 100.00 24 HSBC Marking Name Nominee (UK) Limited 100.00 11 HSBC Master Trust Trustee Limited (In Liquidation) 100.00 14 HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo Financiero HSBC 99.99 12 HSBC Middle East Asset CO. LLC 100.00 100 HSBC Middle East Holdings B.V. 100.00 3, 4, 63 HSBC Middle East Leasing Partnership N/A 1, 101 HSBC Middle East Securities L.L.C (In Liquidation) 100.00 102 HSBC Mortgage Corporation (USA) 100.00 24 HSBC Nominees (Asing) Sdn Bhd 100.00 46 HSBC Nominees (Hong Kong) Limited 100.00 19 HSBC Nominees (New Zealand) Limited 100.00 103 HSBC Nominees (Tempatan) Sdn Bhd 100.00 46 HSBC North America Holdings Inc. 100.00 4, 24 HSBC Overseas Holdings (UK) Limited 100.00 3, 11 HSBC Overseas Investments Corporation (New York) 100.00 104 HSBC Overseas Nominee (UK) Limited 100.00 11 HSBC PB Corporate Services 1 Limited 100.00 105 HSBC PB Services (Suisse) SA 100.00 106 HSBC Holdings plc Annual Report on Form 20-F 376 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Pension Trust (Ireland) DAC (In Liquidation) 100.00 107 HSBC Pensiones, S.A. (In Liquidation) 100.00 ( 99.99 ) 12 HSBC PI Holdings (Mauritius) Limited 100.00 88 HSBC Preferential LP (UK) 100.00 11 HSBC Private Bank (Luxembourg) S.A. 100.00 ( 99.99 ) 96 HSBC Private Bank (Suisse) SA 100.00 106 HSBC Private Bank (UK) Limited 100.00 11 HSBC Private Banking Holdings (Suisse) SA 100.00 106 HSBC Private Banking Nominee 3 (Jersey) Limited 100.00 105 HSBC Private Equity Investments (UK) Limited 100.00 11 HSBC Private Markets Management SARL N/A 1, 2, 108 HSBC Private Trustee (Hong Kong) Limited 100.00 19 HSBC Professional Services (India) Private Limited 100.00 109 HSBC Property (UK) Limited 100.00 11 HSBC Property Funds (Holding) Limited 100.00 11 HSBC Provident Fund Trustee (Hong Kong) Limited 100.00 19 HSBC Qianhai Securities Limited N/A 1, 10, 110 HSBC Real Estate Leasing (France) 100.00 ( 99.99 ) 5, 33 HSBC REGIO Fund General Partner S.à r.l. 100.00 86 HSBC Retirement Benefits Trustee (UK) Limited 100.00 3, 11 HSBC Retirement Services Limited (In Liquidation) 100.00 2, 14 HSBC Saudi Arabia, Closed Joint Stock Company 100.00 ( 66.19 ) 111 HSBC Securities (Egypt) S.A.E. (In Liquidation) 100.00 ( 94.65 ) 112 HSBC Securities (Japan) Co., Ltd. 100.00 51 HSBC Securities (Singapore) Pte Limited 100.00 48 HSBC Securities (South Africa) (Pty) Limited 100.00 113 HSBC Securities (Taiwan) Corporation Limited 100.00 57 HSBC Securities (USA) Inc. 100.00 24 HSBC Securities and Capital Markets (India) Private Limited 99.99 6, 49 HSBC Securities Brokers (Asia) Limited 100.00 19 HSBC Securities Investments (Asia) Limited 100.00 19 HSBC Securities Services (Bermuda) Limited 100.00 18 HSBC Securities Services (Guernsey) Limited 100.00 17 HSBC Securities Services (Ireland) DAC 100.00 107 HSBC Securities Services (Luxembourg) S.A. 100.00 96 HSBC Securities Services Holdings (Ireland) DAC 100.00 107 HSBC Securities Services Nominees Limited 100.00 19 HSBC Seguros, S.A de C.V., Grupo Financiero HSBC 100.00 ( 99.99 ) 12 HSBC Semfi Limited 75.00 11 HSBC Service Company Germany GmbH 100.00 ( 99.99 ) 7, 77 HSBC Service Delivery (Polska) Sp. z o.o. 100.00 114 HSBC Services (France) 100.00 ( 99.99 ) 5, 33 HSBC Services Japan Limited 100.00 84 HSBC Services USA Inc. 100.00 115 HSBC Servicios Financieros, S.A. de C.V 100.00 ( 99.99 ) 12 HSBC Servicios, S.A. DE C.V., Grupo Financiero HSBC 100.00 ( 99.99 ) 12 HSBC SFT (C.I.) Limited 100.00 17 HSBC Software Development (Guangdong) Limited N/A 1, 10, 116 HSBC Software Development (India) Private Limited 100.00 117 HSBC Software Development (Malaysia) Sdn Bhd 100.00 70 HSBC Specialist Investments Limited 100.00 11 HSBC Technology & Services (USA) Inc. 100.00 24 HSBC Transaction Services GmbH 100.00 ( 99.99 ) 7, 77 HSBC Trinkaus & Burkhardt (International) S.A. 100.00 ( 99.99 ) 96 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Trinkaus & Burkhardt Gesellschaft fur Bankbeteiligungen mbH 100.00 ( 99.99 ) 7, 77 HSBC Trinkaus & Burkhardt GmbH 100.00 ( 99.99 ) 7, 77 HSBC Trinkaus Real Estate GmbH 100.00 ( 99.99 ) 7, 77 HSBC Trust Company (Delaware), National Association 100.00 92 HSBC Trustee (C.I.) Limited 100.00 105 HSBC Trustee (Cayman) Limited 100.00 65 HSBC Trustee (Guernsey) Limited 100.00 17 HSBC Trustee (Hong Kong) Limited 100.00 19 HSBC Trustee (Singapore) Limited 100.00 48 HSBC UK Bank plc 100.00 3, 13 HSBC UK Client Nominee Limited 100.00 13 HSBC UK Covered Bonds LLP N/A 1, 13 HSBC UK Societal Projects Limited (In Dissolution) N/A 1, 13 HSBC USA Inc. 100.00 4, 104 HSBC Ventures USA Inc. 100.00 24 HSBC Violet Investments (Mauritius) Limited 100.00 118 HSBC Wealth Client Nominee Limited 100.00 13 HSBC Yatirim Menkul Degerler A.S. 100.00 60 HSI Asset Securitization Corporation 100.00 24 HSI International Limited 100.00 ( 63.43 ) 38 HSIL Investments Limited 100.00 11 Hubei Macheng HSBC Rural Bank Company Limited N/A 1, 10, 119 Hubei Suizhou Cengdu HSBC Rural Bank Company Limited N/A 1, 10, 120 Hubei Tianmen HSBC Rural Bank Company Limited N/A 1, 10, 121 Hunan Pingjiang HSBC Rural Bank Company Limited N/A 1, 10, 122 Imenson Limited 100.00 ( 63.43 ) 38 Inmobiliaria Bisa, S.A. de C.V. 99.99 ( 99.98 ) 12 Inmobiliaria Grufin, S.A. de C.V. 100.00 ( 99.99 ) 12 Inmobiliaria Guatusi, S.A. de C.V. 100.00 ( 99.99 ) 12 Internationale Kapitalanlagegesellschaft mit beschränkter Haftung 100.00 ( 99.99 ) 7, 77 James Capel (Nominees) Limited 100.00 11 James Capel (Taiwan) Nominees Limited 100.00 11 Keyser Ullmann Limited 100.00 ( 99.99 ) 11 Lion Corporate Services Limited 100.00 19 Lion International Corporate Services Limited 100.00 94 Lion International Management Limited 100.00 94 Lion Management (Hong Kong) Limited 100.00 19 Lyndholme Limited 100.00 19 Marks and Spencer Financial Services plc 100.00 123 Marks and Spencer Unit Trust Management Limited 100.00 123 Midcorp Limited (In Liquidation) 100.00 14 Midland Bank (Branch Nominees) Limited 100.00 13 Midland Nominees Limited 100.00 13 MP Payments Group Limited 100.00 11 MP Payments Middle East AE L.L.C. (In Liquidation) 100.00 124 MP Payments Operations Limited 100.00 11 MP Payments Singapore Pte. Ltd. (In Liquidation) 100.00 48 MP Payments UK Limited 100.00 11 Prudential Client HSBC GIS Nominee (UK) Limited 100.00 11 PT Bank HSBC Indonesia 98.94 125 PT HSBC Sekuritas Indonesia 99.00 126 R/CLIP Corp. 100.00 24 Real Estate Collateral Management Company 100.00 24 Republic Nominees Limited 100.00 17 RLUKREF Nominees (UK) One Limited 100.00 11 RLUKREF Nominees (UK) Two Limited 100.00 11 S.A.P.C. - Ufipro Recouvrement 99.99 8, 33 Saf Baiyun 100.00 ( 99.99 ) 5, 33 Saf Guangzhou 100.00 ( 99.99 ) 5, 33 HSBC Holdings plc Annual Report on Form 20-F 377 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes SFM 100.00 ( 99.99 ) 5, 33 SFSS Nominees (Pty) Limited 100.00 113 Shandong Rongcheng HSBC Rural Bank Company Limited N/A 1, 10, 127 Shenzhen HSBC Development Company Ltd N/A 1, 10, 128 Sico Limited 100.00 129 SNC Les Oliviers D'Antibes 60.00 ( 59.99 ) 8, 78 SNCB/M6-2007 A 100.00 ( 99.99 ) 2, 5, 33 SNCB/M6-2007 B 100.00 ( 99.99 ) 2, 5, 33 SNCB/M6-2008 A 100.00 ( 99.99 ) 2, 5, 33 Société Française et Suisse 100.00 ( 99.99 ) 5, 33 Somers Dublin DAC 100.00 ( 99.99 ) 107 Somers Nominees (Far East) Limited 100.00 18 Sopingest 100.00 ( 99.99 ) 2, 5, 33 St Cross Trustees Limited 100.00 13 Sun Hung Kai Development (Lujiazui III) Limited N/A 1, 10, 134 The Hongkong and Shanghai Banking Corporation Limited 100.00 19 Tooley Street View Limited 100.00 3, 11 Trinkaus Europa Immobilien-Fonds Nr.3 Objekt Utrecht Verwaltungs-GmbH 100.00 ( 99.99 ) 7, 77 Trinkaus Immobilien-Fonds Geschaeftsfuehrungs-GmbH 100.00 ( 99.99 ) 7, 77 Trinkaus Immobilien-Fonds Verwaltungs- GmbH 100.00 ( 99.99 ) 7, 77 Trinkaus Private Equity Management GmbH 100.00 ( 99.99 ) 7, 77 Trinkaus Private Equity Verwaltungs GmbH 100.00 ( 99.99 ) 7, 77 Turnsonic (Nominees) Limited 100.00 13 Valeurs Mobilières Elysées 100.00 ( 99.99 ) 5, 33 WARDLEY LIMITED 100.00 19 Wayfoong (Asia) Limited 100.00 79 Wayfoong Nominees Limited 100.00 19 Westminster House, LLC N/A 1, 24 Woodex Limited 100.00 18 Yan Nin Development Company Limited 100.00 ( 63.43 ) 38 Funds The undertakings below are part of our fund management structure. Funds % of share class held by immediate parent company (or by the Group where this varies) Footnotes Amber 2022 Direct Lending Fund SCA SICAV-RAIF N/A 1, 175 AMGB International Long-Term Equity Strategy Mandate N/A 1, 11 Blackthorn Diversified Credit 2024 LP N/A 1, 186 CI 10 LP Inc N/A 1, 98 Cinnabar 2021 Direct Lending Cell 1 PC N/A 1, 176 Copper Direct Lending L.P. N/A 1, 177 D9 LP Inc N/A 1, 98 Deerpath Capital VII (Cayman), LP N/A 1, 187 Diversified Loan Fund – Direct Lending A S.a.r.l 100.00 ( 48.00 ) 68 Diversified Loan Fund – Direct Lending B S.a.r.l 100.00 ( 48.00 ) 68 Diversified Loan Fund – Syndicated Loan A S.a.r.l 100.00 ( 48.00 ) 68 Diversified Loan Fund – Syndicated Loan C S.a.r.l 100.00 ( 48.00 ) 68 DRC European Real Estate Debt Fund IV (EUR) L.P. N/A 1, 178 Elysées Grand Large N/A 1, 78 ESDLF 2023 Carry L.P N/A 1, 98 GTIDF Fund Carry L.P. N/A 1, 98 H.I.G. Heliodor 2021 PC N/A 1, 179 H5 LP Inc N/A 1, 98 Funds % of share class held by immediate parent company (or by the Group where this varies) Footnotes H8 LP Inc N/A 1, 98 H9 LP Inc N/A 1, 98 Hayfin Garnet Feeder Fund S.C.A. SICAV- RAIF N/A 1, 180 Hayfin Garnet II Feeder Fund S.C.A. SICAV- RAIF N/A 1, 180 HSBC (Guernsey) Aggregator PCC Limited 100.00 98 HSBC (Guernsey) Focus PCC Limited 100.00 98 HSBC (Guernsey) GP PCC Limited 100.00 17 HSBC Alternative Investments Limited 100.00 11 HSBC ASIA LIVING REAL ESTATE GP S.À R.L. 100.00 164 HSBC Asset Management (Fund Services UK) Limited 100.00 11 HSBC Asset Management (India) Private Limited 99.99 50 HSBC Asset Management (Japan) Limited 100.00 51 HSBC Climate Growth Partners Fund SCSp N/A 1, 165 HSBC Climate Growth Partners GP S.à r.l. 100.00 165 HSBC Climate Growth Partners VC Carry L.P. N/A 1, 98 HSBC Diversified Loan Fund – Master S.a.r.l. 100.00 ( 48.00 ) 68 HSBC Diversified Loan Fund General Partner S.à r.l. 100.00 68 HSBC Diversified Loan Fund SCSp-RAIF N/A 1, 68 HSBC Equity Partners USA, LP N/A 1, 83 HSBC European Senior Direct Lending 2023 HoldCo S.à r.l. 100.00 ( 99.60 ) 86 HSBC EUROPEAN SENIOR DIRECT LENDING AIF OFS N/A 1, 165 HSBC European Senior Direct Lending Fund 2023 RAIF SICAV-S.A. 99.60 86 HSBC Financial Technology Venture Capital Fund SCSp N/A 1, 165 HSBC Financial Technology Venture Capital GP S.à r.l. 100.00 165 HSBC Fintech VC Carry L.P. N/A 1, 98 HSBC GH Luxembourg Fund N/A 1, 165 HSBC Global Asset Management (Bermuda) Limited 100.00 4, 18 HSBC Global Asset Management (Deutschland) GmbH 100.00 ( 99.99 ) 7, 77 HSBC Global Asset Management (France) 100.00 ( 99.99 ) 5, 78 HSBC Global Asset Management (Hong Kong) Limited 100.00 79 HSBC Global Asset Management (Malta) Limited 100.00 ( 70.03 ) 80 HSBC Global Asset Management (México), S.A. de C.V., Sociedad Operadora de Fondos de Inversión, Grupo Financiero HSBC 100.00 ( 99.99 ) 12 HSBC Global Asset Management (Singapore) Limited 100.00 48 HSBC Global Asset Management (Switzerland) AG 100.00 5, 81 HSBC Global Asset Management (Taiwan) Limited 100.00 82 HSBC Global Asset Management (UK) Limited 100.00 11 HSBC Global Asset Management (USA) Inc. 100.00 83 HSBC Global Asset Management Holdings (Bahamas) Limited 100.00 84 HSBC Global Asset Management Limited 100.00 3, 11 HSBC Global Infrastucture Debt Fund SCSp N/A 1, 86 HSBC Global Transition Infrastructure Debt Fund RAIF SICAV-S.A. N/A 1, 86 HSBC Infrastructure Debt GP 1 S.à r.l. N/A 1, 86 HSBC Infrastructure Debt GP 2 S.à r.l. N/A 1, 86 HSBC Investment Funds (Hong Kong) Limited 100.00 79 HSBC Investment Funds (Luxembourg) SA 100.00 96 HSBC Latin America Coinvestments Partners, LP N/A 1, 83 HSBC Holdings plc Annual Report on Form 20-F 378 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Funds % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Management (Guernsey) Limited 100.00 98 HSBC Management Consultancy (Shanghai) Company Limited N/A 1, 10, 99 HSBC Portfoy Yonetimi A.S. 100.00 60 HSBC Private Markets GP S.à r.l. 100.00 165 HSBC RCF HoldCo S.à r.l. 100.00 86 HSBC RCF Partnership Fund RAIF SICAV- S.A. N/A 1, 86 HSBC RCF SPV S.à r.l. 100.00 86 HSBC REIM (France) 100.00 ( 99.99 ) 5, 78 HSBC SDL UK 2020 HoldCo S.à r.l 100.00 ( 32.60 ) 96 HSBC SDL UK 2020 LendCo S.à r.l.B137 100.00 ( 32.60 ) 96 HSBC SDL UK II HoldCo S.à r.l. 100.00 ( 48.90 ) 86 HSBC SDLF II Carry L.P. N/A 1, 98 HSBC Senior UK Direct Lending 2020 RAIF SICAV-S.A. N/A 1, 96 HSBC Senior UK Direct Lending Fund II RAIF SICAV-S.A. N/A 1, 86 HSBC Trustees (India) Private Limited 99.99 49 HSBC USD Senior Direct Lending Carry L.P. N/A 1, 98 HSBC USD Senior Direct Lending GP S.à.r.l 100.00 86 HVDF US LLC N/A 1, 24 HVDF US, L.P. N/A 1, 2, 24 I3 LP Inc N/A 1, 98 ICG Credit Strategies S.C.A SICAV-RAIF - ICG Mandate 2023 Direct Lending Fund N/A 1, 181 ICG Credit Strategies S.C.A. SICAV-RAIF - ICG Mandate 2020 Direct Lending Fund N/A 1, 181 Idinvest Growth Secondary Feeder SCA SICAV-RAIF N/A 1, 182 INHK IE LP Inc N/A 1, 98 INHK Orca Carry L.P. N/A 1, 98 INHK PC LP Inc N/A 1, 98 INHK PE LP Inc N/A 1, 98 J6 LP Inc N/A 1, 98 KKR-LON Credit Strategies SCA SICAV-RAIF N/A 1, 183 Korea Nova Solar 1 Inc 100.00 ( 66.70 ) 166 Korea Nova Solar 2 Inc 100.00 ( 66.70 ) 166 L1 LP Inc N/A 1, 98 Lohas ECE Brown KK N/A 1, 167 NAV Financing Partnership Fund Carry L.P. N/A 1, 98 Nova Solar 1 GK N/A 1, 168 Nova Solar 2 GK N/A 1, 168 Nova Solar 3 GK N/A 1, 168 Nova Solar 4 GK N/A 1, 168 P2 LP Inc N/A 1, 98 PE Opps II Carry L.P N/A 1, 98 PE Opps III Carry L.P N/A 1, 98 PPDP Peridot 2022 Feeder SCA SICAV-RAIF N/A 1, 180 RCF Partnership Fund Carry L.P. N/A 1, 98 Red Hexagon Energy Transition Asia Carry L.P. N/A 1, 98 Red Hexagon Energy Transition Asia Fund SCSp N/A 1, 86 Red Hexagon Energy Transition Asia GP S.à r.l. 100.00 86 Red Hexagon ETA Master HoldCo Limited 100.00 169 Red Hexagon ETA Tekoma Japan Limited 100.00 ( 66.70 ) 169 Red Hexagon ETA Tekoma Operation Limited 100.00 ( 66.70 ) 169 Red Hexagon ETA Tekoma Taiwan Limited 100.00 ( 66.70 ) 169 SilkRoad Fund Management S.à.r.l 100.00 130 Silkroad GP II Limited 100.00 2, 131 Silkroad GP II S.a.r.l. 100.00 130 Silkroad GP Limited 100.00 65 Silkroad GP SC S.a r.l 100.00 132 Silkroad Property Partners PTE. LTD. 100.00 133 Solar Field 13 GK N/A 1, 168 SSOF IV Overage SMA H, L.P. N/A 1, 184 Sunpower Americas Co-Invest I SCS N/A 1, 185 Taiwan Nova Solar 1 Limited 100.00 ( 66.70 ) 170 Funds % of share class held by immediate parent company (or by the Group where this varies) Footnotes Tekoma Energy Group Holdings Limited 66.70 169 Tekoma Energy Holdings Limited 100.00 ( 66.70 ) 170 Tekoma Energy Inc 100.00 ( 66.70 ) 171 Tekoma Energy KK 100.00 ( 66.70 ) 1, 168 Tekoma Energy Korea Inc 100.00 ( 66.70 ) 172 Tekoma Korea Holdings Limited 100.00 ( 66.70 ) 166 Tekoma Korea Limited 100.00 ( 66.70 ) 169 Vision 2023 Carry L.P N/A 1, 98 Vision 2024 Carry L.P. N/A 1, 98 Vision 2025 Carry L.P. N/A 1, 98 Vision Apex 2025 Carry L.P. N/A 1, 98 Vision Impact Carry L.P. N/A 1, 98 Vision Infrastructure Carry L.P. N/A 1, 98 W4 LP Inc N/A 1, 98 J oint ventures The undertakings below are joint ventures and equity accounted. Joint ventures % of share class held by immediate parent company (or by the Group where this varies) Footnotes Climate Asset Management Limited 40.00 135 MK HoldCo Limited 50.32 2, 136 Pentagreen Capital Pte. Ltd 50.00 137 ProServe Bermuda Limited 50.00 138 The London Silver Market Fixing Limited N/A 1, 2, 139 Vaultex UK Limited 50.00 2, 140 Non-Profit Foundation The undertakings below are Non-Profit Foundation. Non-Profit Foundation % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Philanthropy Foundation Beijing N/A 1, 163 Associates The undertakings below are associates and equity accounted. Associates % of share class held by immediate parent company (or by the Group where this varies) Footnotes Aiera, Inc. 2.90 4, 173 Bank of Communications Co., Ltd. 16.00 2, 141 Barrowgate Limited 24.64 ( 15.63 ) 142 BGF Group plc 24.62 143 Bud Financial Limited 6.20 4, 144 CANARA HSBC LIFE INSURANCE COMPANY LIMITED 25.50 145 Dowsure Inc. 10.12 2, 4, 147 Episode Six Inc. 5.68 4, 148 EPS Company (Hong Kong) Limited 42.03 (38.65) 19 Future Forward Holdings LLC N/A 1, 24 HQLAX S.à r.l. 6.09 4, 149 HSBC Jintrust Fund Management Company Limited N/A 1, 2, 10, 150 HSBC UK Covered Bonds (LM) Limited 20.00 2, 151 Intelligent Processing Solution Limited 10.00 2, 174 Lightico Ltd 3.19 4, 152 LiquidityMatch LLC N/A 1, 153 London Precious Metals Clearing Limited 30.00 2, 154 Marketnode PTE. Ltd. 12.64 4, 155 MENA Infrastructure Fund (GP) Ltd 33.33 156 Quantexa Limited 8.92 4, 157 HSBC Holdings plc Annual Report on Form 20-F 379 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Radiant Global Investors LLC N/A 1, 2, 158 Saudi Awwal Bank 31.00 159 The London Gold Market Fixing Limited N/A 1, 139 Threadneedle Software Holdings Limited 7.80 4, 160 Topaz Consultation LLC N/A 1, 24 Trade Information Network Limited (In Liquidation) 12.76 161 Trinkaus Europa Immobilien-Fonds Nr. 7 Frankfurt Mertonviertel KG N/A 1, 77 We Trade Innovation Designated Activity Company (In Liquidation) 9.88 2, 162 Footnotes for Note 38 Description of shares 1 Where an entity is governed by voting rights, HSBC consolidates when it holds – directly or indirectly – the necessary voting rights to pass resolutions by the governing body. In all other cases, the assessment of control is more complex and requires judgement of other factors, including having exposure to variability of returns, power to direct relevant activities, and whether power is held as an agent or principal. HSBC’s consolidation policy is described in Note 1.2(a). 2 Management has determined that these undertakings are excluded from consolidation in the Group accounts as these entities do not meet the definition of subsidiaries in accordance with IFRS. HSBC’s consolidation policy is described in Note 1.2(a). 3 Directly held by HSBC Holdings plc 4 Preference Shares 5 Actions 6 Redeemable Preference Shares 7 GmbH Anteil 8 Parts 9 Non-Participating Voting 10 Registered Capital Shares Registered offices 11 8 Canada Square, London, United Kingdom, E14 5HQ 12 347 Paseo de la Reforma, Col. Cuauhtémoc, Mexico, 06500 13 1 Centenary Square, Birmingham, United Kingdom, B1 1HQ 14 c/o Teneo Financial Advisory Limited, The Colmore Building, 20 Colmore Circus, Queensway, Birmingham, United Kingdom, B4 6AT 15 5 Donegal Square South, Northern Ireland, Belfast, United Kingdom, BT1 5JP 16 1909 Avenida Presidente Juscelino Kubitschek, 19° andar, Torre Norte, São Paulo Corporate Towers, São Paulo, Brazil, 04551-903 17 Arnold House, St Julian's Avenue, St Peter Port, Guernsey, GY1 3NF 18 37 Front Street, Harbourview Centre, Ground Floor, Hamilton, Pembroke, Bermuda, HM 11 19 1 Queen's Road Central, Hong Kong 20 Units 2401-55, Floor 24, Tower 2, 1 Jianguomenwai Avenue, Chaoyang District, Beijing, China, 100020 21 First Floor, Xinhua Bookstore Xindong Road (SE of roundabout), Miyun District, Beijing, China 22 Oak House Hirzel Street, St Peter Port, Guernsey, GY1 2NP 23 239 Van Rensselaer Street, Buffalo, New York, United States of America, 14210 24 c/o The Corporation Trust Company 1209 Orange Street, Wilmington, Delaware, United States of America, 19801 25 Solidere - Rue Saad Zaghloul Immeuble - 170 Marfaa, P.O. Box 17 5476 Mar Michael, Beyrouth, Lebanon, 11042040 26 No 1, Bei Huan East Road Dazu County, Chongqing, China 27 No 107 Ping Du Avenue (E), Sanhe Town, Fengdu County, Chongqing, China 28 No. 3, 5, 7, Haitang Erzhi Road Changyuan, Rongchang, Chongqing, China, 402460 29 c/o Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman, Cayman Islands, KY1-9005 30 First & Second Floor No.3 Nanshan Road, Pulandian, Dalian, Liaoning, China 31 160 Mine Lake CT, Ste 200, Raleigh, North Carolina, United States of America, 27615-6417 32 Avenida de las Granjas 972, Building A, Floor 2, Colonia Santa Bárbara, Alcaldía Azcapotzalco, Mexico City, Mexico, 02230 33 38 avenue Kléber, Paris, France, 75116 Registered offices 34 No. 1 1211 Yanjiang Zhong Road, Yongan, Fujian, China 35 8/F, Prince's Building, 10 Chater Road, Central, Hong Kong 36 No. 44 Xin Ping Road Central, Encheng, Enping, Guangdong, China, 529400 37 Rooms 101, 201-205, 301-305, No. 2 Yong Jin Yi Street, Huangge Town, Nansha District, Guangzhou, China 38 83 Des Voeux Road Central, Hong Kong 39 34/F, 36/F and 46/F, Hang Seng Bank Tower 1000 Lujiazui Ring Road, Pilot Free Trade Zone, Shanghai, China, 200120 40 Gustav Mahlerplein 2 1082 MA, Amsterdam, Netherlands 41 1001, T2 Office Building, Qianhai Kerry Business Center, Qianhai Avenue, Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen, Guangdong, China 42 Unit 1 GF The Commerical Complex Madrigal Avenue, Ayala Alabang Village, Muntinlupa City, Philippines, 1780 43 C/O Teneo Financial Advisory Limited The Colmore Building, 20 Colmore Circus, Queensway, Birmingham, United Kingdom, B4 6AT 44 Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands, VG1110 45 The Corporation Trust Company of Nevada 311 S. Division Street, Carson City, Nevada, United States of America, 89703 46 Level 21 Menara IQ, Lingkaran TRX, Tun Razak Exchange, Kuala Lumpur, Malaysia, 55188 47 Level 19 Menara IQ, Lingkaran TRX, Tun Razak Exchange, Kuala Lumpur, Malaysia, 55188 48 10 Marina Boulevard #48-01 Marina Bay Financial Centre, Singapore, 018983 49 52/60 M G Road Fort, Mumbai, India, 400 001 50 9-11 Floors, NESCO IT Park Building No. 3 Western Express Highway, Goregaon (East), Mumbai, India, 400063 51 HSBC Building 11-1, Nihonbashi 3-chome, Chuo-ku, Tokyo, Japan, 103-0027 52 Level 36, Tower 1, International Towers Sydney, 100 Barangaroo Avenue, Sydney, New South Wales, Australia, 2000 53 Isidora Goyenechea 2800 23rd floor, Las Condes, Santiago, Chile, 7550647 54 HSBC Building Shanghai ifc, 8 Century Avenue, Pudong, Shanghai, China, 200120 55 HSBC House, Esplanade, St. Helier, Jersey, JE4 8UB 56 IconEbene, Level 5 Office 1 (West Wing), Rue de L’institut, Ebene, Mauritius 57 54F, 7 Xinyi Road Sec. 5 Xinyi district, Taipei, Taiwan 58 1266 Dr Luis Bonativa 1266 Piso 30 (Torre IV WTC), Montevideo, Uruguay, CP 11.000 59 Metropolitan Building, 235 Dong Khoi, Sai Gon Ward, Ho Chi Minh City, Viet Nam 60 Esentepe Mah. Büyükdere Caddesi No.128 Şişli, Istanbul, Turkiye, 34394 61 306 Corniche El Nil Street, Maadi, Cairo, Egypt 62 116 Archbishop Street, Valletta, Malta, VLT1444 63 Unit 401, Level 4 Gate Precinct Building 2, Dubai International Financial Centre, P. O. Box 30444, Dubai, United Arab Emirates 64 1800 Tysons Boulevard Suite 50, Tysons, Virginia, United States of America, 22102 65 P.O. Box 309 Ugland House, Grand Cayman, Cayman Islands, KY1-1104 66 HSBC House, Esplanade, St. Helier, Jersey, JE1 1HS 67 Room 2703, 27F, Tower A, No.8 Century Avenue, China (Shanghai) Pilot Free Trade Zone, Shanghai, China, 200120 68 49 avenue J.F. Kennedy, Luxembourg, Luxembourg, 1855 69 4-17/F, Office Tower 2 TaiKoo Hui Development, No. 381 Tian He Road, Guangzhou, Guangdong, China 70 Suite 1005, 10th Floor, Wisma Hamzah Kwong, Hing No. 1, Leboh Ampang, Kuala Lumpur, Malaysia, 50100 71 Building C-1 UP Ayala Technohub, Commonwealth Avenue, Diliman, Quezon City, Metro Manila, Philippines 72 HSBC House Plot No.8 Survey No.64 (Part), Hitec City Layout Madhapur, Hyderabad, India, 500081 73 Mireka City 324/9 Havelock Road, Colombo 05, Sri Lanka, 00500 74 Smart Village 28th Km Cairo- Alexandria Desert Road Building, Cairo, Egypt 75 Centre Ville 1341 Building - 4th Floor Patriarche Howayek Street, PO Box Riad El Solh, Lebanon, 9597 HSBC Holdings plc Annual Report on Form 20-F 380 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Registered offices 76 Room 405 Odd House Number of 859-863, Huanhu West 1st Road, Lingang New Area, China (Shanghai) Pilot Free Trade Zone, Shanghai, China, 201306 77 Hansaallee 3, Düsseldorf, Germany, 40549 78 Immeuble Cœur Défense 110 esplanade du Général de Gaulle, Courbevoie, France, 92400 79 HSBC Main Building 1 Queen's Road Central, Hong Kong 80 80 Mill Street, Qormi, Malta, QRM 3101 81 26 Gartenstrasse, Zurich, Switzerland, 8002 82 36F., No. 68 Sec. 5, Zhongxiao E. Rd., Xinyi Dist., Taipei City, Taiwan, 110419 83 66 Hudson Boulevard E, New York, New York, United States of America, 10001 84 Mareva House 4 George Street, Nassau, Bahamas 85 150 King Street West, Suite 200, Toronto, Ontario, Canada, M5H 1J9 86 4, rue Peternelchen, Howald, Grand Duchy of Luxembourg, Luxembourg, L-2370 87 Alphabeta 14-18 Finsbury Square, London, United Kingdom, EC2A 1BR 88 5th Floor, IconEbene 1 Building, Lot 441, Rue de L’Institut, Ebene, Mauritius, 1704-01 89 18th Floor Tower 1, HSBC Centre 1 Sham Mong Road, Kowloon, Hong Kong 90 CT Corporation System 28 Liberty Street, New York, New York, United States of America, 10005 91 Unit 201, Floor 2, Building 3 No. 12, Anxiang Street, Shunyi District, Beijing, Beijing, China 92 300 Delaware Avenue Suite 1401, Wilmington, Delaware, United States of America, 19801 93 Woodbourne Hall, Road Town, Tortola, British Virgin Islands, P.O. Box 916 94 Craigmuir Chambers, Road Town, Tortola, British Virgin Islands, VG1110 95 5/F HSBC Centre 3058 Fifth Ave West, Bonifacio Global City, Taguig City, Philippines 96 18 Boulevard de Kockelscheuer, Luxembourg, Luxembourg, 1821 97 29/F HSBC Building 8 Century Avenue, China (Shanghai) Pilot Free Trade Zone, Shanghai, China, 200120 98 Arnold House St Julians Avenue, St Peter Port, Guernsey, GY1 1WA 99 Unit 2017, Floor 20, Tower 1 No.288, Shimen 1st Road, Jing An District, Shanghai, China, 200041 100 HSBC Tower, Downtown Dubai, P O Box 66, Dubai, United Arab Emirates 101 Unit 401, Level 4, Gate Precinct Building 2, Dubai International Financial Centre, P. O. Box 506553, Dubai, United Arab Emirates 102 Level 16, HSBC Tower, Downtown Dubai, P.O. Box 66, Dubai, United Arab Emirates 103 HSBC Tower, Level 21, 188 Quay Street, Auckland, New Zealand, 1010 104 The Corporation Trust Incorporated, 2405 York Road, Suite 201, Lutherville Timonium, Maryland, United States of America, 21093 105 HSBC House, Esplanade, St. Helier, Jersey, JE1 1GT 106 9-17 Quai des Bergues, Geneva, Switzerland, 1201 107 1 Grand Canal Square Grand Canal Harbour, Dublin 2, Ireland, D02 P820 108 5 rue Heienhaff, Senningerberg, Luxembourg, L-1736 109 52/60 M G Road, Fort, Mumbai, India, 400 001 110 Unit 2201, 22/F, Qianhai Chow Tai Fook Finance Tower (Phase I) No. 66 Shu Niu Avenue, Nanshan Subdistrict, the Shenzhen Qianhai Shenzhen-Hong Kong Cooperation Zone, the PRC, Shenzhen, China, 518054 111 HSBC Building 7267 Olaya - Al Murrooj, Riyadh, Saudi Arabia, 12283 - 2255 112 306 Corniche El Nil, HSBC Building, Maadi, Cairo, Egypt 113 1 Mutual Place, 107 Rivonia Road, Sandton, Gauteng, South Africa, 2196 114 Kapelanka 42A, Krakow, Poland, 30-347 115 C T Corporation System 820 Bear Tavern Road, West Trenton, New Jersey, United States of America, 08628 116 22/F, Tower 2, Taikoo Hui Building, No. 381 Tianhe Road, Tianhe District, Guangzhou, China 117 Business Bay, Wing 2 Tower B, Survey no 103, Hissa no. 2, Airport road, Yerwada, Pune, India, 411006 118 c/o Rogers Capital St. Louis Business Centre, Cnr Desroches & St Louis Streets, Port Louis, Mauritius Registered offices 119 No. 56 Yu Rong Street, Macheng, China, 438300 120 No. 205 Lie Shan Road Suizhou, Hubei, China 121 Building 3, Yin Zuo Di Jing Wan Tianmen New City, Tianmen, Hubei Province, China 122 RM101, 102 & 106 Sunshine Fairview, Sunshine Garden, Pedestrian Walkway, Pingjiang, China 123 Kings Meadow Chester Business Park, Chester, United Kingdom, CH99 9FB 124 Level 15 HSBC Tower, Downtown Dubai, Dubai, United Arab Emirates, PO Box 66 125 World Trade Center 3, 9th Floor, Jalan Jendral Sudirman Kaveling 29-31, Karet, Setiabudi, South Jakarta, DKI Jakarta, Indonesia, 12920 126 5th Floor, World Trade Center 1, Jl. Jend. Sudirman Kav. 29-31, Jakarta, Indonesia, 12920 127 No.198-2 Chengshan Avenue (E), Rongcheng, China, 264300 128 Room 601, 6/F Phase 1 Qianhai Chow Tai Fook Finance Tower, 66 Shuniu Avenue, Nanshan Community, Qianhai Shenzhen-Hong Kong Corporation Zone, Shenzhen, Guangdong, China 129 Woodbourne Hall, Road Town, Tortola, British Virgin Islands, P.O. Box 3162 130 1A Heienhaff, Senningerberg, Luxembourg, 1736 131 P.O. Box 3119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, Cayman Islands, KY1 – 1205 132 17 Boulevard F.W Raiffeisen, Luxembourg, 2411 133 10 Collyer Quay, #10-01 Ocean Financial Centre, Singapore, Singapore, 049315 134 RM 2112, HSBC Building, Shanghai ifc No. 8 Century Road, Pudong, Shanghai, China, 200120 135 43 Whitfield Street, London, United Kingdom, W1T 4HD 136 35 Ballards Lane, London, United Kingdom, N3 1XW 137 38 Beach Road #19-11 South Beach Tower, Singapore, Singapore, 189767 138 c/o Mayfair Corporate Services Ltd., 26 Burnaby Street, Hamilton, Bermuda, HM11 139 27 Old Gloucester Street, London, United Kingdom, WC1N 3AX 140 All Saints Triangle Caledonian Road, London, United Kingdom, N19UT 141 188 Yin Cheng Zhong Lu (Shanghai) Pilot Free Trade Zone, China 142 50/F Lee Garden One, 33 Hysan Avenue, Hong Kong 143 13-15 York Buildings, London, United Kingdom, WC2N 6JU 144 167-169 Great Portland Street, 5th Floor, London, United Kingdom, W1W 5PF 145 8th Floor Unit No. 808-814, Ambadeep Building, Plot No. 14, Kasturba Gandhi Marg, New Delhi, India, 110001 146 c/o Interpath Ltd, 10 Fleet Place, London, United Kingdom, EC4M 7RB 147 ICS Corporate Services (Cayman) Limited, 3-212 Governors Square 23 Lime Tree Bay Avenue, P.O. Box 30746, Seven Mile Beach, Grand Cayman, Cayman Islands, KY1-1203 148 251 Little Falls Drive, New Castle, Wilmington, United States of America, 19808 149 9 rue du Laboratoire, Grand Duchy of Luxembourg, Luxembourg, L-1911 150 17F, HSBC Building, Shanghai ifc 8 Century Avenue, Pudong, Shanghai, China 151 10th Floor 5 Churchill Place, London, United Kingdom, E14 5HU 152 121 HaHashmonaim St., Tel Aviv, Israel, 6713328 153 111 Town Square Place, Suite 840, Jersey City, New Jersey, United States of America, 07310 154 7th Floor, 62 Threadneedle Street, London, United Kingdom, EC2R 8HP 155 1 Harbourfront Avenue, #14-07 Keppel Bay Tower, Singapore, 098632 156 Unit 306,307, 308, Gate Village Building 05, Dubai International Financial Centre, Dubai, United Arab Emirates 157 c/o Company Secretarial Department, 280 Bishopsgate, London, United Kingdom, EC2M 4AG 158 4482 Deer Ridge Road, Danville, CA, Delaware, United States of America, 94506 159 7383 King Fahad Branch Rd, 2338 - Al Yasmeen Dist., Riyadh, Saudi Arabia, 13325 160 2nd Floor, Regis House, 45 King William Street, London, United Kingdom, EC4R 9AN 161 45 Gresham Street, C/O Restructuring & Recovery Services (RRS) S&W Partners LLP, London, United Kingdom, EC2V 7BG 162 10 Earlsfort Terrace, Dublin, Ireland, D02 T380 HSBC Holdings plc Annual Report on Form 20-F 381 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Notes on the financial statements Registered offices 163 Meeting Room 18.R005, 18/F Fortune Financial Center No. 5 Dongsanhuan Zhong Road, Chaoyang District, Beijing, China, 100020 164 20, rue de la Poste, L-2346, Luxembourg, Grand Duchy of Luxembourg 165 3, rue Jean Piret, L-2350 Luxembourg Grand Duchy of Luxembourg R.C.S. Luxembourg: B253299 166 9F, Unit B, Seowang Building, 14-8 Teheran-ro 70-gil, Gangnam-gu, Seoul, South Korea (Walk Forest LS8) 167 6190-2 Fukushima, Kisomachi, Kiso-gun, Nagano 397-0001 Japan 168 2-1-4, Tsukiji, Chuo-ku, Tokyo 104-0045 JAPAN 169 89 Nexus Way, Camana Bay, George Town, Grand Cayman, KY1-1205, Cayman Islands 170 11F, No. 122, Songjiang Rd, Zhongshan Dist., Taipei City 171 10F., No. 156, Sec. 3, Minsheng E. Rd., Songshan Dist., Taipei City 172 3F and 8F, 136, Sejong-daero, Jung-gu, Seoul 173 800 North State Street, Suite 304, Dover, Delaware, United States of America, DE 19901 Registered offices 174 Enigma, Wavendon Business Park, England, United Kingdom, MK17 8LX 175 11-13, Boulevard de la Foire, L-1528 Luxembourg 176 2nd Floor, Sir Walter Raleigh House, 48-50 Esplanade, St. Helier, Jersey JE2 3QB 177 375 Park Avenue New York, NY 10152 178 4th Floor, Ensign House, 29 Seaton Place, St Helier, Jersey JE2 3QL 179 3rd Floor, 37 Esplanade, St. Helier JE1 1AD, Jersey 180 15, Boulevard F.W Raiffeisen, L-2411 Luxembourg, Grand Duchy of Luxembourg 181 60, Avenue J.F. Kennedy, L-1855 Luxembourg 182 5, Allée Scheffer, L 2520 Luxembourg, Grand Duchy of Luxembourg 183 2, rue Edward Steichen, Luxembourg, L-2540, Luxembourg 184 450, Lexington Avenue, 31st Floor, New York 10017 185 26A, Boulevard Royal L-2449 Luxembourg 186 Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands 187 405 Lexington Avenue, 53rd Floor, New York, New York 10174, USA 39 Non-statutory accounts The information set out in these accounts does not constitute the Company’s statutory accounts for the years ended 31 December 2025 or 2024. Those accounts have been reported on by the Company’s auditors: their reports were unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. The accounts for 2024 have been delivered to the Registrar of Companies and those for 2025 will be delivered in due course. HSBC Holdings plc Annual Report on Form 20-F 382 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Shareholder information This section gives important information for our shareholders, including contact information. It also includes an overview of key abbreviations and terminology used throughout this Annual Report and Accounts. Ñ A glossary of terms used in the Annual Report and Accounts can be found in the Investors section of www.hsbc.com. Fourth interim dividend for 2025 The Directors have approved a fourth interim dividend for 2025 of $0.45 per ordinary share. Information on the currencies in which shareholders may elect to have the cash dividend paid can be viewed at www.hsbc.com/investors. The interim dividend will be paid in cash. The timetable for the interim dividend is: Announcement 25 February 2026 Shares quoted ex-dividend in London, Hong Kong and Bermuda 12 March 2026 American Depositary Shares (‘ADS’) quoted ex-dividend in New York 13 March 2026 Record date – London, Hong Kong, New York, Bermuda 1 13 March 2026 Mailing of Annual Report and Accounts 2025 and/or Strategic Report 2025 27 March 2026 Final date for dividend election changes including Investor Centre electronic instructions and revocations of standing instructions for dividend elections 15 April 2026 Exchange rate determined for payment of dividends in pounds sterling and Hong Kong dollars 20 April 2026 Payment date 30 April 2026 1 Removals to and from the Overseas Branch register of shareholders in Hong Kong or Bermuda will not be permitted on this date. Interim dividends for 2026 We maintain our dividend policy of a target payout ratio of 50% earnings per ordinary share (‘EPS’) for each of 2026, 2027 and 2028, subject to meeting capital requirements. EPS for this purpose will continue to exclude material notable items and related impacts. For the financial year 2025, dividends were paid in accordance with our dividend policy. We achieved a dividend payout ratio of 50% of EPS, excluding material notable items and related impacts. Material notable items in 2025 primarily related to the income statement impacts associated with actions to exit or wind down non-strategic businesses. They also include a dilution loss and the recognition of an impairment of our investment in BoCom, a legal provision relating to the Bernard L. Madoff Investment Securities LLC fraud, as well as the impacts of transactions completed in previous periods, including the sale of our retail banking operations in France, the sale of our banking business in Canada and the disposal of our business in Argentina. The Board has adopted a dividend policy designed to provide sustainable cash dividends, while retaining the flexibility to invest and grow the business in the future, supplemented by additional shareholder distributions, if appropriate. Dividends are approved in US dollars and, at the election of the shareholder, paid in cash in one of, or in a combination of, US dollars, pounds sterling and Hong Kong dollars. Other equity instruments Additional tier 1 capital – contingent convertible securities HSBC continues to issue contingent convertible securities that are included in its capital base as fully CRR II-compliant additional tier 1 capital securities. For further details on these securities, see Note 32 on the financial statements. HSBC Holdings issued $1,500m 6.950% perpetual subordinated contingent convertible securities on 27 February 2025, SGD800m 5.000% perpetual subordinated contingent convertible securities on 24 March 2025 and $2,000m 7.050% perpetual subordinated contingent convertible securities on 5 June 2025. 2025 Annual General Meeting With the exception of the shareholder requisitioned Resolution 20, which the Board recommended that shareholders vote against, all resolutions considered at the 2025 AGM held at 10:00am on 2 May 2025 at InterContinental London O2, 1 Waterview Drive, London SE10 0TW, United Kingdom, were passed on a poll. Earnings releases and interim results First and third quarter results for 2026 will be released on 5 May 2026 and 27 October 2026, respectively. The interim results for the six months to 30 June 2026 will be issued on 4 August 2026. HSBC Holdings plc Annual Report on Form 20-F 383 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Shareholder enquiries and communications Enquiries Any enquiries relating to shareholdings on the share register (for example: transfers of shares, changes of name or address, lost share certificates or dividend cheques) should be sent to the Registrars at the address given below. The Registrars offer an online facility, Investor Centre, which enables shareholders to manage their shareholding electronically. Principal Register: Computershare Investor Services PLC The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ, United Kingdom Telephone: +44 (0) 370 702 0137 www.investorcentre.co.uk/contactus Investor Centre: www.investorcentre.co.uk Hong Kong Overseas Branch Register: Computershare Hong Kong Investor Services Limited Rooms 1712–1716, 17th Floor Hopewell Centre, 183 Queen’s Road East, Hong Kong Telephone: +852 2862 8555 hsbc.ecom@computershare.com.hk Investor Centre: www.investorcentre.com/hk Bermuda Overseas Branch Register: Investor Relations Team HSBC Bank Bermuda Limited, 37 Front Street, Hamilton, HM 11, Bermuda hbbm.shareholder.services@hsbc.bm hbbm.mutual.fund@hsbc.bm Investor Centre: www.investorcentre.com/bm ADS Depositary: The Bank of New York Mellon Shareowner Services, P.O. Box 43006, Providence RI 02940-3078, USA Telephone (US): +1 877 283 5786 Telephone (International): +1 201 680 6825 shrrelations@cpushareownerservices.com If your shareholding is not recorded directly on the share register, it is important to remember that your main contact for all matters relating to your investment remains the registered shareholder, or custodian or broker, who administers the investment on your behalf. This is the case even if you have elected to receive information rights directly from HSBC Holdings. Any changes or queries relating to your personal details and holding (including any administration of it) should be directed to your existing contact at your investment manager or custodian or broker. HSBC Holdings cannot guarantee dealing with matters directed to it in error. Shareholders who wish to receive a hard copy of the Annual Report and Accounts 2025 should contact HSBC’s Registrars. Please visit www.hsbc.com/investors/investor-contacts for further information. You can also download an online version of the report from www.hsbc.com. Electronic communications Shareholders may at any time choose to receive corporate communications in printed form or to receive notifications of their availability on HSBC’s website. To receive notifications of the availability of a corporate communication on HSBC’s website by email, or revoke or amend an instruction to receive such notifications by email, go to www.hsbc.com/investors/shareholder-information/manage-your-shareholding. If you received a notification of the availability of this document on HSBC’s website and would like to receive a printed copy, or if you would like to receive future corporate communications in printed form, please write or send an email (quoting your shareholder reference number) to the appropriate Registrars at the address given above. Printed copies will be provided without charge. Chinese translation A Chinese translation of the Annual Report and Accounts 2025 will be available upon request after 27 March 2026 from the Registrars (contact details above). Please also contact the Registrars if you wish to receive Chinese translations of future documents, or if you have received a Chinese translation of this document and do not wish to receive them in future. 《2025 年報及賬目》備有中譯本，各界人士可於2026年3月27日之後，向上列股份登記處索閱。 閣下如欲於日後收取相關文件的中譯本，或已收到本文件的中譯本但不希望繼續收取有關譯本，均請聯絡股份登記處。 Stock symbols HSBC Holdings ordinary shares trade under the following stock symbols: London Stock Exchange HSBA * New York Stock Exchange (ADS) HSBC Hong Kong Stock Exchange 5 Bermuda Stock Exchange HSBC.BH ∗  HSBC’s Primary market Investor relations Enquiries relating to HSBC’s strategy or operations may be directed to: Alastair Ryan, Global Head of Investor Relations Yafei Tian, Head of Investor Relations, Asia-Pacific HSBC Holdings plc The Hongkong and Shanghai Banking 8 Canada Square Corporation Limited London E14 5HQ 1 Queen’s Road Central United Kingdom Hong Kong Telephone: +44 (0) 7468 703 010 Telephone: +852 2899 8909 Email: investorrelations@hsbc.com Email: investorrelations@hsbc.com.hk HSBC Holdings plc Annual Report on Form 20-F 384 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Where more information about HSBC is available The Annual Report and Accounts 2025 and other information on HSBC may be downloaded from HSBC’s website: www.hsbc.com. Reports, statements and information that HSBC Holdings files with the Securities and Exchange Commission are available at www.sec.gov. Investors can also request hard copies of these documents upon payment of a duplicating fee by writing to the SEC at the Office of Investor Education and Advocacy, 100 F Street N.E., Washington, DC 20549-0213 or by emailing PublicInfo@sec.gov. Investors should call the Commission at (1) 202 551 8090 if they require further assistance. Investors may also obtain the reports and other information that HSBC Holdings files at www.nyse.com (telephone number (1) 212 656 3000). HM Treasury has transposed the requirements set out under CRD IV and issued the Capital Requirements Country-by-Country Reporting Regulations 2013. The legislation requires HSBC Holdings to publish additional information in respect of the year ended 31 December 2025 by 31 December 2026. This information will be available on HSBC’s website: www.hsbc.com/tax. Taxation of shares and dividends Taxation – UK residents The following is a summary, under current law (unless otherwise noted) and the current published practice of HM Revenue and Customs (‘HMRC’), of certain UK tax considerations that are likely to be material to the ownership and disposition of HSBC Holdings ordinary shares. The summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to a holder of shares. In particular, the summary deals with shareholders who are resident solely in the UK for UK tax purposes and only with holders who hold the shares as investments and who are the beneficial owners of the shares, and does not address the tax treatment of certain classes of holders such as dealers in securities. Holders and prospective purchasers should consult their own advisers regarding the tax consequences of an investment in shares in light of their particular circumstances, including the effect of any national, state or local laws. Taxation of dividends Currently, no tax is withheld from dividends paid by HSBC Holdings. UK resident individuals UK resident individuals are generally entitled to a tax-free annual allowance in respect of dividends received. The amount of the allowance for the tax year beginning 6 April 2025 is £500. To the extent that dividend income received by an individual in the relevant tax year does not exceed the allowance, a nil tax rate will apply. Dividend income in excess of this allowance will be taxed at 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional rate taxpayers. UK resident companies Shareholders that are within the charge to UK corporation tax should generally be entitled to an exemption from UK corporation tax on any dividends received from HSBC Holdings. However, the exemptions are not comprehensive and are subject to anti-avoidance rules. If the conditions for exemption are not met or cease to be satisfied, or a shareholder within the charge to UK corporation tax elects for an otherwise exempt dividend to be taxable, the shareholder will be subject to UK corporation tax on dividends received from HSBC Holdings at the rate of corporation tax applicable to that shareholder. Taxation of capital gains The computation of the capital gains tax liability arising on disposals of shares in HSBC Holdings by shareholders subject to UK tax on capital gains can be complex, partly depending on whether, for example, the shares were purchased since April 1991, acquired in 1991 in exchange for shares in The Hongkong and Shanghai Banking Corporation Limited, or acquired subsequent to 1991 in exchange for shares in other companies. For capital gains tax purposes, the acquisition cost for ordinary shares is adjusted to take account of subsequent rights and capitalisation issues. Any capital gain arising on a disposal of shares in HSBC Holdings by a UK company may also be adjusted to take account of indexation allowance if the shares were acquired before 1 January 2018, although the level of indexation allowance that is given in calculating the gain would be frozen at the value that would have been applied to a disposal of those shares in December 2017. If in doubt, shareholders are recommended to consult their professional advisers. Stamp duty and stamp duty reserve tax Transfers of shares by a written instrument of transfer generally will be subject to UK stamp duty at the rate of 0.5% of the consideration paid for the transfer (rounded up to the next £5), and such stamp duty is generally payable by the transferee. An agreement to transfer shares, or any interest therein, normally will give rise to a charge to stamp duty reserve tax at the rate of 0.5% of the consideration. However, provided an instrument of transfer of the shares is executed pursuant to the agreement and duly stamped before the date on which the stamp duty reserve tax becomes payable, under the current published practice of HMRC it will not be necessary to pay the stamp duty reserve tax, nor to apply for such tax to be cancelled. Stamp duty reserve tax is generally payable by the transferee. Paperless transfers of shares within CREST, the UK’s paperless share transfer system, are liable to stamp duty reserve tax at the rate of 0.5% of the consideration. In CREST transactions, the tax is calculated and payment made automatically. Deposits of shares into CREST generally will not be subject to stamp duty reserve tax, unless the transfer into CREST is itself for consideration. Taxation – US residents The following is a summary, under current law, of the principal UK tax and US federal income tax considerations that are likely to be material to the ownership and disposition of shares or American Depositary Shares (‘ADSs’) by a holder that is a US holder, as defined below, and who is not resident in the UK for UK tax purposes. The summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a holder of shares or ADSs. In particular, the summary deals only with US holders that hold shares or ADSs as capital assets, and does not address the tax treatment of holders that are subject to special tax rules. These include banks, tax-exempt entities, insurance companies, dealers in securities or currencies, persons that hold shares or ADSs as part of an integrated investment (including a ‘straddle’ or ‘hedge’) comprised of a share or ADS and one or more other positions, and persons that own directly or indirectly 10% or more (by vote or value) of the stock of HSBC Holdings. This discussion is based on laws, treaties, judicial decisions and regulatory interpretations in effect on the date hereof, all of which are subject to change. For the purposes of this discussion, a ‘US holder’ is a beneficial holder that is a citizen or resident of the United States, a US domestic corporation or otherwise is subject to US federal income taxes on a net income basis in respect thereof. Holders and prospective purchasers should consult their own advisers regarding the tax consequences of an investment in shares or ADSs in light of their particular circumstances, including the effect of any national, state or local laws. Any US federal tax advice included in the Annual Report and Accounts 2025 is for informational purposes only. It was not intended or written to be used, and cannot be used, for the purpose of avoiding US federal tax penalties. Taxation of dividends Currently, no tax is withheld from dividends paid by HSBC Holdings. For US tax purposes, a US holder must include cash dividends paid on the shares or ADSs in ordinary income on the date that such holder or the ADS depositary receives them, translating dividends paid in UK pounds sterling into US dollars using the exchange rate in effect on the date of receipt. A US holder that elects to receive shares in lieu of a cash dividend must include in ordinary income the fair market value of such shares on the dividend payment date, and the tax basis of those shares will equal such fair market value. HSBC Holdings plc Annual Report on Form 20-F 385 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Subject to certain exceptions for positions that are held for less than 61 days, and subject to a foreign corporation being considered a ‘qualified foreign corporation’ (which includes not being classified for US federal income tax purposes as a passive foreign investment company), certain dividends (‘qualified dividends’) received by an individual US holder generally will be subject to US taxation at preferential rates. Based on the company’s audited financial statements and relevant market and shareholder data, HSBC Holdings does not believe that it was a passive investment company for its 2025 taxable year and does not anticipate becoming a passive foreign investment company in 2026 or the foreseeable future. Accordingly, dividends paid on the shares or ADSs generally should be eligible for qualified dividends treatment. Taxation of capital gains Gains realised by a US holder on the sale or other disposition of shares or ADSs normally will not be subject to UK taxation unless at the time of the sale or other disposition the holder carries on a trade, profession or vocation in the UK through a branch or agency or permanent establishment and the shares or ADSs are or have been used, held or acquired for the purposes of such trade, profession, vocation, branch or agency or permanent establishment. Such gains will be included in income for US tax purposes, and will be long-term capital gains if the shares or ADSs were held for more than one year. A long-term capital gain realised by an individual US holder generally will be subject to US tax at preferential rates. Inheritance tax Shares or ADSs held by an individual whose domicile is determined to be the US for the purposes of the United States–United Kingdom Double Taxation Convention relating to estate and gift taxes (the ‘Estate Tax Treaty’) and who is not for such purposes a national of the UK will not, provided any US federal estate or gift tax chargeable has been paid, be subject to UK inheritance tax on the individual’s death or on a lifetime transfer of shares or ADSs except in certain cases where the shares or ADSs (i) are comprised in a settlement (unless, at the time of the settlement, the settlor was domiciled in the US and was not a national of the UK), (ii) are part of the business property of a UK permanent establishment of an enterprise, or (iii) pertain to a UK fixed base of an individual used for the performance of independent personal services. In such cases, the Estate Tax Treaty generally provides a credit against US federal tax liability for the amount of any tax paid in the UK in a case where the shares or ADSs are subject to both UK inheritance tax and to US federal estate or gift tax. Stamp duty and stamp duty reserve tax – ADSs If shares are transferred to a clearance service or American Depositary Receipt (‘ADR’) issuer (which will include a transfer of shares to the depositary) UK stamp duty and/or stamp duty reserve tax will be payable unless the transfer is, or is treated as being, in the course of a capital raising arrangement. The stamp duty or stamp duty reserve tax is generally payable on the consideration for the transfer (or, if there is no consideration in money or money’s worth, the value of the shares being transferred) and is payable at the aggregate rate of 1.5%. The amount of stamp duty reserve tax payable on such a transfer will be reduced by any stamp duty paid in connection with the same transfer. No stamp duty will be payable on the transfer of, or agreement to transfer, an ADS, provided that the ADR and any separate instrument of transfer or written agreement to transfer remain at all times outside the UK, and provided further that any such transfer or written agreement to transfer is not executed in the UK. No stamp duty reserve tax will be payable on a transfer of, or agreement to transfer, an ADS effected by the transfer of an ADR. US information reporting and backup withholding tax Distributions made on shares or ADSs and proceeds from the sale of shares or ADSs that are paid within the US, or through certain financial intermediaries to US holders, are subject to US information reporting and may be subject to a US ‘backup’ withholding tax. General exceptions to this rule happen when the US holder: establishes that it is a corporation (other than an S corporation) or other exempt holder; or provides a correct taxpayer identification number, certifies that no loss of exemption from backup withholding has occurred and otherwise complies with the applicable requirements of the backup withholding rules. Holders that are not US persons (as defined in the US Internal Revenue Code of 1986, as amended) generally are not subject to US information reporting or backup withholding tax, but may be required to comply with applicable certification procedures to establish that they are not US persons in order to avoid the application of such US information reporting requirements or backup withholding tax to payments received within the US or through certain financial intermediaries. Approach to ESG reporting The information set out in the ESG review on pages 32 to 63 , taken together with other information relating to ESG issues included in this report, aims to provide key ESG information and data for the year ended 31 December 2025. The data is compiled for the financial year 1 January to 31 December 2025 unless otherwise specified . Measurement techniques and calculations are explained next to data tables where necessary . Where we have changes in scope, boundary or measurement we call these out where relevant in our disclosures. Additionally, a rationale is provided for any restatement of information or data that has been previously published. How we decide what to measure We listen to our stakeholders in a number of different ways and we use the information they provide us to identify the issues that are most important to them and consequently also matter to our own business. Our relevant governance bodies discuss the new and existing themes and issues that matter to our stakeholders. Our management team then uses this insight, alongside the framework of the ESG Code (which refers to our obligations under the Hong Kong Listing Rules Appendix C2 ESG Reporting Code Parts C and D) and the UKLR 6.6.6R(8) of the Financial Conduct Authority’s (‘FCA’) Listing Rules, Sections 414CA and 414CB of the UK Companies Act 2006, and other applicable laws and regulations to choose what we measure and publicly report in our ESG review. We will continue to develop and refine our reporting and disclosures on ESG matters in line with feedback received from our investors and other stakeholders, and in view of our obligations under the ESG Code and the FCA’s Listing Rules. Under the ESG Code, ’materiality’ is considered to be the threshold at which ESG issues become sufficiently important to our investors and other stakeholders that they should be publicly reported. Our approach to materiality also considers disclosure standards and other applicable rules and regulations as part of our materiality assessment for specific ESG topics and relevant disclosures. Given ongoing developments in the ESG regulatory environment across various jurisdictions in which we operate, combined with the relative immaturity of processes, systems, data quality and controls, our focus remains on supporting a globally consistent set of mandatory sustainability standards. We aim to continue to evolve our reporting to recognise market developments, such as the International Sustainability Standards Board (‘ISSB’), and support the efforts to harmonise the disclosures. We report against the Hong Kong Exchange (‘HKEx’) ESG Code metrics, and will continue to review our approach as the regulatory landscape evolves. Consistent with the scope of financial information presented in this report, the ESG review covers the operations of HSBC Holdings plc and its subsidiaries, unless otherwise specified. Given the relative immaturity of ESG-related data and methodologies in general, we are on a journey towards improving completeness and robustness. Ñ For further details, see ‘Engaging with our stakeholders and our material ESG topics’ on page 34 . HSBC Holdings plc Annual Report on Form 20-F 386 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Our reporting around ESG We report on ESG matters throughout this report, including the ’ESG overview’ section of the Strategic Report (pages 28 to 29 ), ESG review (pages 32 to 63 ), and the ‘Climate risk’ sections of the Risk review (pages 203 to N/A ). In addition, we have other supplementary materials, including our ESG Data Pack, which provides a more granular breakdown of ESG information. Detailed data Additional reports ESG Data Pack 2025, including HKEx ESG Code Index 2025 UK Pay Gap Disclosures Modern Slavery and Human Trafficking Statement 2025 Green Bonds Report 2025 HSBC UN Sustainable Development - Goals Bond Report 2025 Ñ For further details of our supplementary materials, see our ESG reporting centre at www.hsbc.com/who-we-are/esg-and-responsible-business/esg- reporting-centre. TCFD Task Force on Climate-related Financial Disclosures (‘TCFD’) The table below summarises the TCFD requirements and cross-references to where further information can be found within our Annual Report and Accounts 2025. We also include cross-references to our ESG Data Pack where relevant. TCFD Pillar CA 2006 requirement Theme Disclosure location Governance a) Sections 414CA and 414CB 2A (a) HSBC Board’s oversight of climate-related risks and opportunities Ñ Pages 57 , 204 , 228 b) Sections 414CA and 414CB 2A (a) HSBC management’s role in assessing and managing climate- related risks and opportunities Ñ Pages 57 , 204 Strategy a) Sections 414CA and 414CB 2A (d) Climate-related risks and opportunities HSBC has identified over the short, medium and long term Ñ Pages 35 - 38 , 203 - 206 , 206 - 212 b) Sections 414CA and 414CB 2A (e) Impact of climate-related risks and opportunities on HSBC’s businesses, strategy and financial planning Ñ Pages 35 - 38 , 47 - 48 , 203 , 204 , 206 - 212 c) Sections 414CA and 414CB 2A (f) Resilience of HSBC’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario Ñ Pages 206 - 212 Ñ ESG Data Pack Risk Management a) Sections 414CA and 414CB 2A (b) HSBC’s processes for identifying and assessing climate-related risks Ñ Pages 49 , 203 - 206 , 209 , 212 b) Sections 414CA and 414CB 2A (b) HSBC’s processes for managing climate-related risks Ñ Pages 203 - 206 c) Sections 414CA and 414CB 2A (c) HSBC’s processes for integration of climate-related risks into overall risk management framework Ñ Pages 203 - 204 Metric & Targets a) Sections 414CA and 414CB 2A (h) Metrics used by HSBC to assess climate-related risk and opportunities in line with its strategy and risk management process Ñ Pages 35 - 38 , 41 - 48 , 50 , 203 - 212 Ñ ESG Data Pack b) Sections 414CA and 414CB 2A (h) Disclose scope 1, scope 2 and, if appropriate, scope 3 greenhouse gas emissions and the related risks Ñ Pages 39 - 49 Ñ ESG Data Pack c) Sections 414CA and 414CB 2A (g) Targets used by HSBC to manage climate-related risks and opportunities and performance against targets Ñ Pages 39 - 46 Ñ ESG Data Pack Explanatory statements HKEx and TCFD Explanatory Statements We have considered our ‘comply or explain’ obligation under both the UK Financial Conduct Authority’s Listing Rules 6.6.6R(8) (‘UKLR’), and Sections 414CA and 414CB of the UK Companies Act 2006 (‘CA 2006’), collectively referred to as the ‘TCFD requirements’, and Hong Kong Listing Rules Appendix C2 ESG Reporting Code Parts C and D. The Group has prepared its climate-related disclosures in accordance with the ESG Reporting Code under Appendix C2 of the Rules Governing the Listing of Securities on Hong Kong Exchanges and Clearing Limited. While IFRS S1 principles have been considered to support the quality and consistency of disclosures, the Group has not adopted IFRS Sustainability Disclosure Standards as a reporting framework for the purposes of these disclosures. We comply with mandatory requirements, including Part B and disclosure of scope 1 and 2 GHG emissions within the HKEx ESG Code. We have set out in the HKLR index where these and other relevant disclosures may be found. We confirm that we have made disclosures consistent with TCFD Recommendations and Recommended Disclosures, including its annexes and supplemental guidance, as well as the HKEx ESG Code, save for certain items as set out below. Our reporting approach will continue to evolve over time to reflect regulatory requirements. Ñ Our detailed HKLR Index, including HKLR Part D can be found in our ESG Data Pack at www.hsbc.com/esg HKEx A1(b) related to relevant laws/regulations relating to air and greenhouse gas emissions, discharges into water and land, and generation of hazardous and non-hazardous waste, and on emissions: taking into account the nature of our business, we do not believe that there are relevant laws and regulations in these areas that have significant impacts on our operations. Nevertheless, we are fully compliant with our publication of information regarding scope 1 and 2 greenhouse gas emissions, while we only partially publish information on scope 3 emissions, as the data required for that publication is not yet fully available. HKEx A1.3 related to total hazardous waste produced and HKEx A1.4 related to total non-hazardous waste produced: taking into account the nature of our business, we do not consider hazardous waste to be a material issue for our stakeholders. As such, we report only on total waste produced, which includes hazardous and non-hazardous waste. HKEx A1.6 related to handling hazardous and non-hazardous waste: taking into account the nature of our business, we do not consider this to be a material issue for our stakeholders. Notwithstanding this, we continue to focus on the reduction and recycling of all waste. Building on the success of our ‘reduce, replace, remove’ environmental HSBC Holdings plc Annual Report on Form 20-F 387 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information approach, we are continuing to seek to identify key opportunities where we can lessen our wider environmental impact, including waste management. For further details, please see our ESG review on page 47 . HKEx A2.4 related to sourcing water issue and water efficiency target: taking into account the nature of our business, we do not consider this to be a material issue for our stakeholders. Notwithstanding this, we have implemented measures to further reduce water consumption through the installation of water efficient taps, flow restrictors, and continue to track our water consumption. HKEx A2.5 related to packaging material, HKEx B6(b) related to issues about health and safety, advertising and labelling relating to products and services provided, HKEx B6.1 related to percentage of total products sold or shipped subject to recalls for safety and health reasons, HKEx B6.4 in recall procedures: taking into account the nature of our business, we do not consider these to be material issues for our stakeholders. Understanding our climate-related risks and opportunities HKEx Para 20(a) related to understanding our climate-related risks and opportunities: we currently do not fully describe climate-related risks and opportunities that could reasonably be expected to affect our cash flows, access to finance, or cost of capital over the short, medium and long term. Our 2025 climate risk assessment utilises internal risk management processes, external data sources, and industry guidance. We focus our disclosures on risks and opportunities that are most relevant to our business model and strategy. We recognise that the identification of such items is an evolving process and as our capabilities and data availability mature, we will continue to review and refine our approach in medium term. Target-setting and review TCFD requirements related to metrics and targets (c) on short-term targets: we do not plan to set short-term targets for financed emissions, sustainable finance or our own operations as our overall climate strategy is focused on our ambition to become a net zero bank by 2050. We have set interim financed emissions 2030 targets and a sustainable finance and investment ambition by 2030. Further information can be found on pages 35 and 41 . TCFD requirements related to metrics and targets (c) on climate-related opportunities: we currently have not set targets for climate-related opportunities. However, we report progress towards our ambition to provide and facilitate $750bn–$1tn in sustainable finance and investment by 2030. Financial position, financial performance and cash flows HKEx Para 24(a), 25(b) on financial effects of climate-related opportunities and TCFD requirements related to metrics and targets (a) on climate-related opportunities: we currently do not fully disclose the qualitative or quantitative information about how climate-related opportunities have affected our financial position (e.g. proportion of assets), financial performance (e.g. proportion of revenue) or cash flows or other aligned business activities for the reporting period, as well as the relevant anticipated financial effects. Therefore we have not disclosed how such information is reflected in our financial statements. The relevant metrics are not individually identifiable. It may also involve disclosing commercially sensitive non-public information. We do however assess the effect of climate credit risk on IFRS9 ECL. The output of this assessment is included on page 212 . We also disclose our conclusion that no incremental adjustments were needed to capture climate impacts in our financial statements on page 34 . We have also disclosed the progress against our ambition of providing and facilitating $750bn–$1tn of sustainable finance and investment by 2030. We are exploring ways to enhance our methodologies and data capabilities to improve granularity of these disclosures in the medium term. Capital deployment HKEx Para 33 related to expenditure for climate-related risks and opportunities : we currently do not disclose the amount of capital expenditure, financing or investment specifically allocated to climate- related risks and opportunities. We integrate climate-risk considerations into our broader capital planning process. Climate risk is therefore not individually identifiable. Climate risk considerations are incorporated across a wide range of initiatives, including investing in resources to meet forward-looking regulatory requirements, enhancements to data and modelling capabilities, power purchase arrangements and engagements with suitable data vendors. The relevant metrics are therefore not individually identifiable. As part of enhancing our disclosures for upcoming regulatory requirements we plan to reassess our approach to these requirements in the medium term. Internal carbon prices HKEx Para 34 and TCFD requirements related to metrics and targets (a) on internal carbon prices: we do not currently use an internal carbon price, and are still developing the relevant implementation strategy. We aim to provide further disclosures in the medium term. For details on the external carbon prices used in our climate scenario analysis, please refer to page 207 . Financial planning and performance TCFD requirements related to Strategy (b) and (c) on financial planning and performance: we have used climate scenario analysis to inform our organisation’s business, strategy and financial planning. In 2025, we continued to incorporate certain aspects of sustainable finance within our financial planning process. Also, we used climate scenario analysis to assess the impacts of climate-related risks on financial performance and our financial position, which is largely focused on how expected credit losses will be impacted under different climate scenarios. We do not fully disclose impacts from climate-related opportunities on financial planning and performance, including on revenue, costs and the balance sheet, detailed climate risk exposures for all sectors and geographies, or physical risk metrics. This is due to transitional challenges in relation to data limitations, although nascent work is ongoing in these areas. However, we have disclosed the progress against our ambition of providing and facilitating $750bn–$1tn of sustainable finance and investment by 2030. We expect these data limitations to be addressed in the medium term as more reliable data becomes available and technology solutions are implemented. Transition plan TCFD requirements related to Strategy (b) on transition plan: in 2020, we set an ambition to become a net zero bank by 2050. Since then, we have made good progress and published our updated transition plan incorporating revised interim 2030 financed emission targets in November 2025, which reflects the realities of an evolving transition playing out very differently across the global economy. We currently do not disclose the planned sources of funding to implement our climate strategy. Our planned sources of funding take into consideration our overall bank strategy. Our climate strategy is part of this, and the specific climate-related sources of funding are not separately identifiable. The relevant access to capital is therefore not individually identifiable. We currently partially test achievability of our transition plan and associated targets by performing feasibility analysis of our financed emissions targets considering multiple climate-related scenarios. As part of enhancing our disclosures for upcoming regulatory requirements, we plan to reassess our approach to these requirements in the medium term. The reference pathways we consider are global and we do not currently set GHG targets for individual countries or entities, unless required by regulation. Impacts of transition and physical risk HKEx Para 30 and 31, TCFD requirements related to metrics and targets (a) on detailed climate-related risk exposure metrics for physical and transition risks: we do not fully disclose the amount and percentage of assets or business activities vulnerable to climate-related physical and transition risks, or the metrics used to assess the impact of climate-related physical (chronic) and transition (policy and legal, technology and market) risks on parts of wholesale, retail lending and other financial intermediary business activities (specifically credit exposure, equity and debt holdings, or trading positions, broken down by industry, geography, credit quality and average tenor). We are aiming to develop the appropriate systems, data and processes to provide these disclosures in future years. We do, however, disclose the HSBC Holdings plc Annual Report on Form 20-F 388 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information exposure to six, high-transition risk wholesale sectors and the flood risk exposure and Energy Performance Certificate (‘EPC’) breakdown for the UK retail mortgage portfolio. Scope 3 emissions disclosure HKEx Para 28(c), 29(d) and TCFD requirements related to metrics and targets (a) and (b) on scope 3 emissions metrics: we currently partially disclose scope 3 GHG emissions, and related risks. We currently focus on disclosing only four out of 15 categories of scope 3 GHG emissions, including business travel, supply chain and financed emissions, following our internal materiality assessment. Further details on reasons for exclusion can be found in our GHG reporting guidance 2025. To calculate supply chain emissions, as detailed in the GHG reporting guidance, we use spend data for the 12-month period to 30 September, and the latest data available as at end of 2024 for suppliers’ emissions and revenue. In relation to financed emissions, we partially comply with scope 3 category 15 – albeit on a lagged basis. We publish on-balance sheet financed emissions for our in-scope target-sectors, where the total lending exposures included were approximately 3.5% of our loans and advances to customers at 31 December 2024, as detailed on page 46 . We also publish facilitated emissions for the oil and gas, and power and utilities sectors. In relation to related risks, we currently disclose the exposure to six, high-transition risk wholesale sectors, please refer to page 204 . Data quality of future disclosures on financed emissions and related risks are reliant on our customers publicly disclosing their GHG emissions, targets and plans, and related risks, and the accuracy and completeness of these in third-party data. We are working to enhance the appropriate systems, data and processes to enhance our disclosures to align with HKEx requirements where possible in future years. We recognise the need to provide early transparency on climate disclosures but balance this with the recognition that existing data and reporting processes continue to evolve. Anticipated financial effects HKEx Para 25(a)(i) related to investment and disposal plans: due to the nature of our business, we consider a wide range of factors, including climate change, in our M&A activities. Our current processes to manage climate and sustainability-related targets, net zero transition plans and climate strategy include impact assessments of HSBC mergers and acquisitions activity. While we perform this assessment for each planned transaction, the anticipated financial effects of the transaction as a result of the climate and sustainability impacts, are not separately identifiable and are a secondary impact of the transaction as opposed to the primary objective. HKEx Para 25(a)(ii) related to planned sources of funding to implement its strategy and TCFD requirements related to Strategy (b) on access to capital: we do not disclose the changes in financial position over the short, medium and long term with respect to planned sources of funding to implement our climate strategy. We have, however, considered how the implementation of our climate strategy may impact our businesses, strategy and financial planning. Our access to capital may be impacted by reputational concerns as a result of climate action or inaction. In addition, if we are perceived to mislead stakeholders on our business activities or if we fail to achieve our stated net zero ambitions, we could potentially face reputational damage, impacting our revenue-generating ability and our access to capital markets. To manage these risks, we have integrated climate risk into our existing risk taxonomy, and incorporated it within the risk management framework through the policies and controls for the existing risks where appropriate. The relevant access to capital is therefore not individually identifiable. As part of enhancing our disclosures for upcoming regulatory requirements, we plan to reassess our approach to these requirements in the medium term. Climate-related opportunities HKEx Para 32 and TCFD requirements related to metrics and targets (a) on amount and percentage of assets or business activities, or capital deployment: we currently do not disclose the proportion of revenue, amount and percentage of assets or capital deployment aligned with climate-related opportunities, including revenue from low-carbon products and forward-looking metrics. This is due to transitional data and system limitations, and the absence of standardised methodologies. As part of enhancing our disclosures for upcoming regulatory requirements, we plan to reassess our approach to these requirements in the medium term. Applicability of cross-industry metrics and industry-based metrics HKEx Para 36 and 41 requirements are related to applicability of cross- industry metrics and industry-based metrics: our current disclosures focus primarily on cross-industry metrics, as our approach, internal processes and data availability for industry-based metrics are still under development. We will continue to review and refine our approach to industry-based metrics in the medium term as our capabilities and data mature. Information about the enforceability of judgments made in the US HSBC Holdings is a public limited company incorporated in England and Wales. Most of the Directors and executive officers live outside the US. As a result, it may not be possible to serve process on such persons or HSBC Holdings in the US or to enforce judgments obtained in US courts against them or HSBC Holdings based on civil liability provisions of the securities laws of the US. There is doubt as to whether English courts would enforce: – civil liabilities under US securities laws in original actions; or – judgments of US courts based upon these civil liability provisions. In addition, judgments that contain awards of punitive and/or multiple damages in actions brought in the US or elsewhere may be unenforceable in the UK. The enforceability of any judgment in the UK will depend on the particular facts of the case as well as the laws and treaties in effect at the time. Exchange controls and other limitations affecting equity security holders Other than certain economic sanctions that may be in force from time to time, there are currently no UK laws, decrees or regulations that would prevent the import or export of capital or remittance of distributable profits by way of dividends and other payments to holders of HSBC Holdings’ equity securities who are not residents of the UK. There are also no restrictions under the laws of the UK or the terms of the Memorandum and Articles of Association concerning the right of non-resident or foreign owners to hold HSBC Holdings’ equity securities or, when entitled to vote, to do so. Insider trading policies and procedures The Company has adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of its securities by directors, senior management and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to the Company. HSBC Holdings plc Annual Report on Form 20-F 389 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Dividends on the ordinary shares of HSBC Holdings The HSBC Holdings dividends approved, per ordinary share, in respect of each of the last five years were: First interim Second interim Third interim Fourth interim 1 Total 2 2025 $ 0.100 0.100 0.100 0.450 0.75 £ 0.074 0.074 0.075 0.335 0.558 HK$ 0.784 0.778 0.778 3.502 5.842 2024 3 $ 0.310 0.100 0.100 0.360 0.870 £ 0.243 0.076 0.078 0.273 0.671 HK$ 2.420 0.779 0.777 2.791 6.768 2023 $ 0.100 0.100 0.100 0.310 0.610 £ 0.079 0.080 0.080 0.248 0.487 HK$ 0.783 0.783 0.780 2.426 4.773 2022 $ 0.090 0.230 0.320 £ 0.079 0.185 0.264 HK$ 0.706 1.804 2.511 2021 $ 0.070 0.180 – – 0.250 £ 0.051 0.138 – – 0.189 HK$ 0.545 1.412 – – 1.957 1 The fourth interim dividend for 2025 of $0.45 per ordinary share will be paid on 30 April 2026. The fourth interim dividend for 2025 has been translated into pounds sterling and Hong Kong dollars at the closing rate on 31 December 2025. 2 The above dividends approved are accounted for as disclosed in Note 8 on the Financial Statements. 3 The first interim dividend for 2024 includes a special dividend of $0.21. 4 The above dividend amounts for pounds sterling and Hong Kong dollars have been rounded. American Depositary Shares A holder of HSBC Holdings’ American Depositary Shares (‘ADSs’) may have to pay, either directly or indirectly (via the intermediary through whom their ADSs are held) fees to the Bank of New York Mellon as depositary. Fees may be paid or recovered in several ways: by deduction from amounts distributed; by selling a portion of distributable property; by deduction from dividend distributions; by directly invoicing the holder; or by charging the intermediaries who act for them. Fees for the holders of the HSBC ADSs include: For: HSBC ADS holders must pay: Each issuance of HSBC ADSs, including as a result of a distribution of shares (including through a stock dividend, stock split or distribution of rights or other property) $5.00 (or less) per 100 HSBC ADSs or portion thereof Each cancellation of HSBC ADSs, including if the deposit agreement terminates $5.00 (or less) per 100 HSBC ADSs or portion thereof Transfer and registration of shares on our share register to/from the holder’s name to/from the name of The Bank of New York Mellon or its agent when the holder deposits or withdraws shares Registration or transfer fees (of which there currently are none) Conversion of non-US currency to US dollars Charges and expenses incurred by The Bank of New York Mellon with respect to the conversion Each cash distribution to HSBC ADS holders $0.02 or less per ADS Transfers of HSBC ordinary shares to the depositary in exchange for HSBC ADSs Any applicable taxes and/or other governmental charges Distribution of securities by the depository to HSBC ADS holders A fee equivalent to the fee that would be payable if securities distributed to you had been shares and those shares had been deposited for issuance of ADSs Any other charges incurred by the depositary or its agents for servicing shares or other securities deposited As applicable The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid. The depositary has agreed to reimburse us for expenses we incur, and to pay certain out-of-pocket expenses and waive certain fees, in connection with the administration, servicing and maintenance of our ADS programme. There are limits on the amount of expenses for which the depositary will reimburse us. During the year ended 31 December 2025, the depositary reimbursed, paid and/or waived fees and expenses totalling $2,025,386.48 in connection with the administration, servicing and maintenance of the programme. Nature of trading market HSBC Holdings ordinary shares are listed or admitted to trading on the London Stock Exchange (‘LSE’), the Hong Kong Stock Exchange (‘HKSE’), the Bermuda Stock Exchange and on the New York Stock Exchange (‘NYSE’) in the form of ADSs. HSBC Holdings maintains its principal share register in England and overseas branch share registers in Hong Kong and Bermuda (collectively, the ‘share register’). As at 31 December 2025, there were a total of 159,073 holders of record of HSBC Holdings ordinary shares on the share register. As at 31 December 2025, approximately 15.5m HSBC Holdings ordinary shares were registered in the HSBC Holdings’ share register in the name of 13,601 holders of record with addresses in the US. These shares represented approximately 0.09% of the total HSBC Holdings ordinary shares in issue. As at 31 December 2025, there were 4,255 holders of record of ADSs holding approximately 112.62m ADSs, representing approximately 563.1m HSBC Holdings ordinary shares, 4,188 of these holders had addresses in the US, holding approximately 112.60m ADSs, representing approximately 563.0m HSBC Holdings ordinary shares. As at 31 December 2025, approximately 3.28% of the HSBC Holdings ordinary shares were represented by ADSs held by holders of record with addresses in the US. Memorandum and Articles of Association The disclosure under the caption ‘Memorandum and Articles of Association’ contained in Form 20-F for the years ended 31 December 2000, 2001, 2014, 2018 and 2022 is incorporated by reference herein. HSBC Holdings plc Annual Report on Form 20-F 390 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Differences in HSBC Holdings/New York Stock Exchange corporate governance practices Under the NYSE’s corporate governance rules for listed companies and the applicable rules of the SEC, as a NYSE-listed foreign private issuer, HSBC Holdings must disclose any significant ways in which its corporate governance practices differ from those followed by US companies subject to NYSE listing standards. HSBC Holdings believes the following to be the significant differences between its corporate governance practices and NYSE corporate governance rules applicable to US companies. US companies listed on the NYSE are required to adopt and disclose corporate governance guidelines. The UK Listing Rules of the FCA require each listed company incorporated in the UK to include in its annual report and accounts a statement of how it has applied the principles of the UK Corporate Governance Code issued by the Financial Reporting Council and a statement as to whether or not it has complied with the code provisions of The UK Corporate Governance Code throughout the accounting period covered by the annual report and accounts. A company that has not complied with the code provisions, or complied with only some of the code provisions or (in the case of provisions whose requirements are of a continuing nature) complied for only part of an accounting period covered by the report, must specify the code provisions with which it has not complied, and (where relevant) for which part of the reporting period such non- compliance continued, and give reasons for any non-compliance. During 2025, HSBC complied with the applicable code provisions of the UK Corporate Governance Code. The UK Corporate Governance Code does not require HSBC Holdings to disclose the full range of corporate governance guidelines with which it complies. Under NYSE standards, companies are required to have a nominating/ corporate governance committee composed entirely of directors determined to be independent in accordance with the NYSE’s corporate governance rules. All of the members of the Nomination & Corporate Governance Committee (excluding the Group Chairman) during 2025 were independent non-executive Directors, as determined in accordance with the UK Corporate Governance Code. The terms of reference of our Nomination & Corporate Governance Committee, which comply with the UK Corporate Governance Code, require that the Committee shall be comprised of the independent non-executive Directors of the Company and the Group Chairman. In addition to identifying individuals qualified to become Board members, a nominating/corporate governance committee must develop and recommend to the Board a set of corporate governance principles. The Nomination & Corporate Governance Committee’s terms of reference do not require it to develop and recommend corporate governance principles for HSBC Holdings, as HSBC Holdings is subject to the corporate governance principles of the UK Corporate Governance Code. The Board of Directors is responsible under its terms of reference for the development and review of Group policies and practices on corporate governance. Under the NYSE standards, companies are required to have a compensation committee composed entirely of directors determined to be independent in accordance with the NYSE’s corporate governance rules. All of the members of the Group Remuneration Committee during 2025 were independent non-executive Directors, as determined in accordance with the UK Corporate Governance Code. The terms of reference of our Group Remuneration Committee, which comply with the UK Corporate Governance Code, require the Committee (including the Chair) to comprise at least three members, all of whom shall be independent non-executive Directors. A compensation committee must review and approve corporate goals and objectives relevant to Chief Executive Officer ('CEO') compensation and evaluate a CEO’s performance in light of these goals and objectives. The Group Remuneration Committee’s terms of reference require it to review and approve performance-based remuneration of the executive Directors by reference to corporate goals and objectives that are set by the Board of Directors. Pursuant to NYSE listing standards, non-management directors must meet on a regular basis without management present and independent directors must meet separately at least once per year. The Group Chairman meets with the independent non-executive Directors without the executive Directors in attendance after each scheduled Board meeting and otherwise, as necessary. HSBC Holdings’ practice, in this regard, complies with the UK Corporate Governance Code. In accordance with the requirements of the UK Corporate Governance Code, HSBC Holdings discloses in its Annual Report and Accounts how the Board, its committees and the Directors are evaluated (on page 231 ) and provides extensive information regarding Directors’ compensation in the Directors’ remuneration report (on page 249 ). The terms of reference of HSBC Holdings’ Group Audit, Nomination & Corporate Governance and Group Remuneration Committees, as well as the Group Risk and Group Technology and Operations Committees, are available at www.hsbc.com/who-we-are/our-people/board-of- directors/board-committees. NYSE listing standards require US companies to adopt a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. In 2025, the Board endorsed the Statement of Business Principles and Code of Conduct, which, pursuant to the requirements of the Sarbanes- Oxley Act, incorporates the Sarbanes-Oxley code of ethics (the 'Sarbanes-Oxley Principles') applicable to the Group CEO, as the principal executive officer, and to the Group Chief Financial Officer and Global Financial Controller. The Statement of Business Principles and Code of Conduct remains in force and applies to the executive directors and employees of the HSBC Group. The Statement of Business Principles and Code of Conduct is available at www.hsbc.com/who-we- are/purpose-values-and-strategy/our-conduct or from the Group Chief People & Governance Officer at 8 Canada Square, London E14 5HQ. During 2025, HSBC Holdings granted no waivers from its code of ethics. Under NYSE listing rules applicable to US companies, independent directors must comprise a majority of the board of directors. Currently, more than three-quarters of HSBC Holdings’ Directors are independent. Under the UK Corporate Governance Code, the HSBC Holdings Board determines whether a Director is independent in character and judgement and whether there are relationships or circumstances that are likely to affect, or could appear to affect, the Director’s judgement. Under the NYSE rules, a director cannot qualify as independent unless the board affirmatively determines that the director has no material relationship with the listed company; in addition, the NYSE rules prescribe a list of circumstances in which a director cannot be independent. The UK Corporate Governance Code requires a company’s board to assess director independence by affirmatively concluding that the director is independent of management and free from any business or other relationship that could materially interfere with the exercise of independent judgement. Lastly, a CEO of a US company listed on the NYSE must annually certify that he or she is not aware of any violation by the company of NYSE corporate governance standards. In accordance with NYSE listing rules applicable to foreign private issuers, HSBC Holdings’ Group CEO is not required to provide the NYSE with this annual compliance certification. However, in accordance with rules applicable to both US companies and foreign private issuers, the Group CEO is required promptly to notify the NYSE in writing after any executive officer becomes aware of any material non-compliance with the NYSE corporate governance standards applicable to HSBC Holdings. HSBC Holdings is required to submit annual and interim written affirmations of compliance with applicable NYSE corporate governance standards, similar to the affirmations required of NYSE-listed US companies. HSBC Holdings plc Annual Report on Form 20-F 391 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Glossary of accounting terms and US equivalents Accounting term US equivalent or brief description Accounts Financial Statements Articles of Association Articles of incorporation Called up share capital Shares issued and fully paid Creditors Payables Debtors Receivables Deferred tax Deferred income tax Finance lease Capital lease Freehold Ownership with absolute rights in perpetuity Interests in associates and joint ventures Interests in entities over which we have significant influence or joint control, which are accounted for using the equity method Loans and advances Loans Loan capital Long-term debt Nominal value Par value One-off Non-recurring Ordinary shares Common stock Overdraft A line of credit, contractually repayable on demand unless a fixed-term has been agreed, established through a customer’s current account Preference shares Preferred stock Premises Property Provisions Liabilities of uncertain timing or amount Share premium account Additional paid-in capital Shares in issue Shares outstanding Write-offs Charge-offs HSBC Holdings plc Annual Report on Form 20-F 392 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Reconciliations Form 20-F Item Number and Caption Location Page PART1 1. Identity of Directors, Senior Management and Advisers Not required for Annual Report — 2. Offer statistics and Expected Timetable Not required for Annual Report — 3. Key information A. [Reserved] B. Capitalisation and Indebtedness Not required for Annual Report — C. Reasons for the Offer and use of Proceeds Not required for Annual Report — D. Risk Factors Risk Review - Risk factors 126 - 137 4. Information on the Company A. History and Development of the Company Shareholder information 382 - 395 Strategic Report 4 - 31 ESG Review 32 - 63 Financial Review 64 - 110 Risk Review 118 - 218 Report of the Directors: Corporate Governance Report 219 - 284 Note 16 on the Financial Statements - Financial investments 343 - 344 Note 18 on the Financial Statements - Interests in associates and joint ventures 345 - 348 Note 19 on the Financial Statements - Investments in subsidiaries 349 - 351 B. Business review Strategic Report 4 - 31 Financial Review 64 - 110 Note 10 on the Financial Statements - Segmental analysis 329 - 331 C. Organisational Structure Strategic Report 4 - 31 Report of the Directors: Corporate Governance Report 219 - 284 Report of the Directors: Corporate Governance Report - Subsidiary governance 232 Note 18 on the Financial Statements - Interests in associates and joint ventures 345 - 348 Note 19 on the Financial Statements - Investments in subsidiaries 349 - 351 Note 38 on the Financial Statements - HSBC Holdings’ subsidiaries, joint ventures and associates 373 - 381 D. Property, Plants and Equipment Note 22 on the Financial Statements - Prepayments, accrued income and other assets 355 4 A..Unresolved Staff Comments Not Applicable — 5. Operating and Financial Review and Prospects A. Operating Results Strategic Report 4 - 31 Financial Review 64 - 110 Risk Review 118 - 218 Report of the Directors: Corporate Governance Report 219 - 284 Note 15 on the Financial Statements - Derivatives 339 - 343 B. Liquidity and Capital Resources Strategic Report 4 - 31 Financial Review - Loan maturity and interest sensitivity analysis 84 Risk Review - Capital and Liquidity Risk 191 - 195 Risk Review - Insurance Manufacturing Operations Risk 215 Note 1 on the Financial Statements - Basis of preparation and material accounting policies 300 - 311 Note 12 on the Financial Statements - Fair values of financial instruments carried at fair value 332 - 337 Note 13 on the Financial Statements - Fair values of financial instruments not carried at fair value 337 - 339 Note 15 on the Financial Statements - Derivatives 339 - 343 Note 30 on the Financial Statements - Maturity analysis of assets, liabilities and off- balance sheet commitments 360 - 365 Note 33 on the Financial Statements - Contingent liabilities, contractual commitments and guarantees 368 - 368 C. Research and Development, Patents and Licences, etc. Not Applicable — D. Trend Information Strategic Report 4 - 31 Financial Review 64 - 110 Risk Review 118 - 218 E. Critical Accounting Estimates Not Applicable — 6. Directors, Senior Management and Employees A. Directors and Senior Management Report of the Directors: Corporate Governance Report 219 - 284 B. Compensation Report of the Directors: Corporate Governance Report - Directors’ Remuneration Report 249 - 274 Note 5 on the Financial Statements - Employee compensation and benefits 320 - 325 Note 36 on the Financial Statements - Related party transactions 371 - 373 C. Board Practices Report of the Directors: Corporate Governance Report 219 - 284 Report of the Directors: Corporate Governance Report - Directors’ Remuneration Report 249 - 274 D. Employees Report of the Directors: Corporate Governance Report 219 - 284 Strategic Report 4 - 31 HSBC Holdings plc Annual Report on Form 20-F 393 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Form 20-F Item Number and Caption Location Page ESG Review - Social 51 - 56 Financial Review 64 - 110 Note 5 on the Financial Statements - Employee compensation and benefits 320 - 325 Note 36 on the Financial Statements - Related party transactions 371 - 373 E. Share Ownership Report of the Directors: Corporate Governance Report 219 - 284 Report of the Directors: Corporate Governance Report - Directors’ Remuneration Report 249 - 274 Note 5 on the Financial Statements - Employee compensation and benefits 320 - 325 Note 32 on the Financial Statements - Called up share capital and other equity instruments 366 - 368 F. Disclosure of a registrant’s action to recover erroneously awarded compensation Not Applicable — 7. Major Shareholders and Related Party Transactions A. Major Shareholders Report of the Directors: Corporate Governance Report 219 - 284 Shareholder Information 389 B. Related Party Transactions Note 36 on the Financial Statements - Related party transactions 371 - 373 C. Interests of Experts and Counsel Not required for Annual Report — 8. Financial Information A. Consolidated Statements and Other Financial Information Financial Review 64 - 110 Financial Statements 285 - 381 Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of HSBC Holdings plc 286 - 287 Note 1 on the Financial Statements - Basis of preparation and material accounting 300 - 311 Note 32 on the Financial Statements - Called up share capital and other equity instruments 366 - 368 Note 35 on the Financial Statements - Legal proceedings and regulatory matters 369 - 371 Shareholder Information 382 - 395 B. Significant Changes Note 37 on the Financial Statements - Events after the Balance Sheet date 373 9. The Offer and Listing A. Offer and Listing Details Shareholder Information 383-389 B. Plan of Distribution Not required for Annual Report — C. Markets Shareholder Information 382 - 395 D. Exchange Controls Not required for Annual Report — E. Taxation Not required for Annual Report — F. Dividends and Paying Agents Not required for Annual Report — 10. Additional Information A. Share Capital Not required for Annual Report — B. Memorandum and Articles of Association Shareholder Information 382 - 395 C. Material Contracts Report of the Directors: Corporate Governance Report - Directors’ Remuneration Report 249 - 274 Corporate Governance Report - Contracts of significance 279 Note 35 on the Financial Statements - Legal proceedings and regulatory matters 369 - 371 D. Exchange Controls Shareholder Information 382 - 395 E. Taxation Shareholder Information 382 - 395 F. Dividends and Paying Agents Not required for Annual Report — G. Statements by Experts Not required for Annual Report — H. Documents on Display Shareholder Information 382 - 395 I. Subsidiary Information Not applicable — J. Annual Report to Security Holders Not applicable — 11. Quantitative and Qualitative Disclosures About Market Risk Risk Review 118 - 218 Risk Review - Market risk 200 - 202 Note 15 on the Financial Statements - Derivatives 339 - 343 Note 16 on the Financial Statements - Financial investments 343 - 344 Note 30 on the Financial Statements - Maturity analysis of assets, liabilities and off- balance sheet commitments 360 - 365 12. Description of Securities Other than Equity Securities A. Debt Securities Not required for Annual Report — B. Warrants and Rights Not required for Annual Report — C. Other Securities Not required for Annual Report — D. American Depository Shares Taxation of shares and dividends 384 Shareholder information 382 - 395 PART II 13. Defaults, Dividends Arrearages and Delinquencies Not applicable — 14. Material Modifications to the Rights of Securities Holders and Use of Proceeds Not applicable — 15. Controls and Procedures Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of HSBC Holdings plc 286 - 287 Financial Review: Other Information 111 - 117 Financial Review: Other information - Management's review of internal controls over financial reporting 111 - 117 HSBC Holdings plc Annual Report on Form 20-F 394 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Form 20-F Item Number and Caption Location Page 16A. Audit Committee Financial Expert Report of the Directors: Corporate Governance 219 - 284 16B. Code of Ethics Shareholder Information 382 - 395 16C. Principal Accountant Fees and Services Report of the Directors: Corporate Governance 219 - 284 Note 6 on the Financial Statements - Auditors’ remuneration 325 16D. Exemptions from the Listing Standards for Audit Committees Not applicable — 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers Report of the Directors: Corporate Governance 219 - 284 16F. Change in Registrant’s Certifying Accountant Not applicable — 16G. Corporate Governance Shareholder Information 382 - 395 16H. Mine Safety Disclosure Not applicable — 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable — 16J. Insider Trading Policies Shareholder information 388 16K. Cybersecurity ESG Review - Cybersecurity 63 Risk Review - Top and Emerging risks 31 Risk review - Risk factors 133 - 134 Report of the Directors: Corporate Governance Report - Group Risk Committee 242 - 243 PART III 17. Financial Statements Not applicable — 18. Financial Statements Financial Statements 285 - 381 19. Exhibits (including Certifications) * HSBC Holdings plc Annual Report on Form 20-F 395 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Abbreviations Currencies AUD Australian dollar £ British pound sterling CA$ Canadian dollar € Euro HK$ Hong Kong dollar MXN Mexican peso RMB Chinese renminbi SGD Singapore dollar $ United States dollar Abbreviations 1H25 First half of 2025 1Q25 First quarter of 2025 2Q25 Second quarter of 2025 3Q25 Third quarter of 2025 4Q25 Fourth quarter of 2025 A ABS¹ Asset-backed security ADR American Depositary Receipt ADS American Depositary Share AGM Annual General Meeting AI Artificial intelligence AIBL Average interest-bearing liabilities AIEA Average interest-earning assets ALCO Asset and Liability Management Committee AML Anti-money laundering ANP Annualised new business premium ASEAN Association of Southeast Asian Nations AT1 Additional tier 1 AUM Assets under management B Banking NII Banking net interest income Basel Committee Basel Committee on Banking Supervision Basel II¹ 2006 Basel Capital Accord Basel III¹ Basel Committee’s reforms to strengthen global capital and liquidity rules Basel 3.1 Outstanding measures to be implemented from the Basel III reforms BCST Bank capital stress test BEPS Base Erosion and Profit Shifting BGF Business Growth Fund, an investment firm that provides growth capital for small and mid-sized businesses in the UK and Ireland BoCom Bank of Communications Co., Limited, one of China’s largest banks BoE Bank of England Bps¹ Basis points. One basis point is equal to one-hundredth of a percentage point BVI British Virgin Islands C CAPM Capital asset pricing model CDS¹ Credit default swap CET1¹ Common equity tier 1 CGUs Cash-generating units CIB Corporate and Institutional Banking, a business segment CISO Chief Information Security Officer CMB Commercial Banking CMC Capital maintenance charge CODM Chief Operating Decision Maker COSO 2013 Committee of Sponsoring Organizations of the Treadway Commission (US) Corporate Centre Corporate Centre comprises Central Treasury, our legacy businesses, interests in our associates and joint ventures, central stewardship costs and consolidation adjustments CP¹ Commercial paper CRD IV¹ Capital Requirements Regulation and Directive CRE Commercial real estate CRR¹ Customer risk rating CRR II¹ The regulatory requirements of the Capital Requirements Regulation and Directive, the CRR II regulation and the PRA Rulebook CSA Credit support annex CSM Contractual service margin CVA¹ Credit valuation adjustment D DCF Discounted cash flow DECL Disclosures about Expected Credit Losses Deferred shares Awards of deferred shares define the number of HSBC Holdings ordinary shares to which the employee will become entitled, generally between one and seven years from the date of the award, and normally subject to the individual remaining in employment DPD Days past due DPF Discretionary participation feature of insurance and investment contracts E EAD¹ Exposure at default EBA European Banking Authority EC European Commission ECB European Central Bank ECL Expected credit losses. In the income statement, ECL is recorded as a change in expected credit losses and other credit impairment charges. In the balance sheet, ECL is recorded as an allowance for financial instruments to which only the impairment requirements in IFRS 9 are applied ECM Equity capital markets EEA European Economic Area EPC Energy performance certificate EPS Earnings per ordinary share ERG Employee Resource Group ESG Environmental, social and governance EU European Union EV Electric vehicles EVE Economic value of equity F FCA Financial Conduct Authority (UK) FDIC Federal Deposit Insurance Corporation FPA Fixed pay allowance FRB Federal Reserve Board (US) FRC Financial Reporting Council FSCS Financial Services Compensation Scheme FTE Full-time equivalent staff FTSE Financial Times Stock Exchange index FVOCI¹ Fair value through other comprehensive income FX Foreign exchange G GAAP Generally accepted accounting principles GAC Group Audit Committee Galicia Grupo Financiero Galicia GBM Global Banking and Markets, a former global business GDP Gross domestic product GenAI Generative AI GHG Greenhouse Gas GPS Global Payments Solutions, the business formerly known as Global Liquidity and Cash Management GRC Group Risk Committee Group HSBC Holdings together with its subsidiary undertakings Group OpCo Group Operating Committee GTC Global Technology and Operations Committee GTS Global Trade Solutions, the business formerly known as Global Trade and Receivables Finance H Hang Seng Bank Hang Seng Bank Limited, one of Hong Kong’s largest banks Herald Herald Fund SPC HIBOR Hong Kong interbank offered rate HKEx The Stock Exchange of Hong Kong Limited HKMA Hong Kong Monetary Authority HMRC HM Revenue and Customs Holdings ALCO HSBC Holdings Asset and Liability Management Committee HKLR Hong Kong Listing Rules HSBC Holdings plc Annual Report on Form 20-F 396 Strategic report ESG review Financial review Risk review Corporate Governance Report Financial statements Additional information Hong Kong Hong Kong Special Administrative Region of the People’s Republic of China HQLA High-quality liquid assets HSBC HSBC Holdings together with its subsidiary undertakings HSBC Bank plc HSBC Bank plc, also known as the non-ring-fenced bank HSBC Bank USA HSBC Bank USA, N.A., HSBC’s retail bank in the US HSBC Canada The sub-group, HSBC Bank Canada, HSBC Trust Company Canada, HSBC Mortgage Corporation Canada and HSBC Securities Canada, consolidated for liquidity purposes HSBC Finance HSBC Finance Corporation, the US consumer finance company (formerly Household International, Inc.) HSBC Holdings HSBC Holdings plc, the parent company of HSBC HSBC Private Bank (Suisse) HSBC Private Bank (Suisse) SA, HSBC’s private bank in Switzerland HSBC UK HSBC UK Bank plc, also known as the ring-fenced bank HSBC USA The sub-group, HSBC USA Inc (the holding company of HSBC Bank USA) and HSBC Bank USA, consolidated for liquidity purposes HSI HSBC Securities (USA) Inc. HSSL HSBC Securities Services (Luxembourg) I IAS International Accounting Standards IASB International Accounting Standards Board IBE Independent Board Evaluation Ibor Interbank offered rate ICAAP Internal capital adequacy assessment process IEA International Energy Agency IFRS Accounting Standards International Financial Reporting Standards as issued by the International Accounting Standards Board ILAAP Internal liquidity adequacy assessment process IMA Internal model approach IMM Internal model method IRB¹ Internal ratings-based IRRA Interest rate risk assessment IRRBB Interest rate risk in the banking book ISDA International Swaps and Derivatives Association ISSB International Sustainability Standard Board IWPB International Wealth and Premier Banking, a business segment J JV Joint venture K KMP Key Management Personnel L LCR Liquidity coverage ratio LGBTQ+ Lesbian, gay, bisexual, transgender and queer. The plus sign denotes other non-mainstream groups on the spectrums of sexual orientation and gender identity LGD¹ Loss given default Libor London interbank offered rate Long term For our financial targets, we define long term as five to six years, commencing 1 January 2026 LTI Long-term incentive LTV¹ Loan to value M M&A Mergers and acquisitions Mainland China People’s Republic of China excluding Hong Kong and Macau Medium term For our financial targets, we define medium term as three to five years, commencing 1 January 2026 MENAT Middle East, North Africa and Türkiye MREL Minimum requirement for own funds and eligible liabilities MRT¹ Material Risk Taker MRM Model risk management MSS Markets and Securities Services, HSBC’s capital markets and securities services businesses in Global Banking and Markets N NAV Net asset value NED Non-executive Director Net operating income Net operating income before change in expected credit losses and other credit impairment charges NGO Non-governmental organisation NII Net interest income NIM Net interest margin NNM Net new money NPS Net promoter score NSFR Net stable funding ratio NYSE New York Stock Exchange O OCI Other comprehensive income OECD Organisation of Economic Co-operation and Development OTC¹ Over-the-counter P PBT Profit before tax PCAF Partnership for Carbon Accounting Financials PD¹ Probability of default Performance shares¹ Awards of HSBC Holdings ordinary shares under employee share plans that are subject to corporate performance conditions Ping An Ping An Insurance (Group) Company of China, Ltd, the second-largest life insurer in the PRC POCI Purchased or originated credit-impaired financial assets PRA Prudential Regulation Authority (UK) PRC People’s Republic of China Principal plan HSBC Bank (UK) Pension Scheme PwC The member firms of the PwC network, including PricewaterhouseCoopers LLP R RAS Risk appetite statement RBW Retail Banking and Wealth Repo¹ Sale and repurchase transaction RES Resource and experience sharing agreement Revenue Net operating income before ECL Reverse repo Security purchased under commitments to sell RMF Risk management framework RNIV Risk not in VaR RoE Return on average ordinary shareholders’ equity RoTE Return on average tangible equity RWA¹ Risk-weighted asset S SAB Saudi Awwal Bank SAPS Self-administered pension scheme SASB Sustainability Accounting Standards Board SEC Securities and Exchange Commission (US) ServCo Group Separately incorporated group of service companies established in response to UK ring-fencing requirements SIC Securities investment conduit SME Small and medium-sized enterprise Solitaire Solitaire Funding Limited, a special purpose entity managed by HSBC SVaR Stressed value at risk SVB UK Silicon Valley Bank UK Limited, now HSBC Innovation Bank Limited T TCFD¹ Task Force on Climate-related Financial Disclosures TEQ Transition engagement questionnaire TSR¹ Total shareholder return U UAE United Arab Emirates UK United Kingdom UNGPs UN Guiding Principles on Business and Human Rights UKLR UK Listing Rules UN United Nations US United States of America V VaR¹ Value at risk VFA Variable fee approach VIU Value in use W WEF World Economic Forum 1 A full definition is included in the glossary to the Annual Report and Accounts 2025 which is available at www.hsbc.com/investors. HSBC Holdings plc Incorporated in England and Wales on 1 January 1959 with limited liability under the UK Companies Act Registration number 617987 Registered Office and Group Head Office 8 Canada Square London E14 5HQ United Kingdom Telephone: 44 020 7991 8888 Facsimile: 44 020 7992 4880 Web: www.hsbc.com Corporate Brokers Morgan Stanley & Co. International plc 25 Cabot Square London E14 4QA United Kingdom Bank of America Securities 2 King Edward Street London EC1A 1HQ United Kingdom © Copyright HSBC Holdings plc 2026 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Holdings plc Published by Global Finance, HSBC Holdings plc, London Designed by Global Finance, HSBC Holdings plc with Design Bridge and Partners, London Printed by Park Communications Limited, London, on Nautilus SuperWhite board and paper using vegetable oil-based inks. Made in Austria, the stocks comprise 100% de-inked post-consumer waste. Pulps used are totally chlorine-free. The FSC® recycled logo identifies a paper that contains 100% post- consumer recycled fibre certified in accordance with the rules of the Forest Stewardship Council® . Item 19. Exhibits Documents filed as exhibits to this annual report on Form 20-F: Exhibit Number Description 1.1 Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 1.1 to HSBC Holding plc’s Form 20-F filed with the SEC on February 22, 2023). 2.1 Description of rights of each class of securities registered under Section 12 of the Securities Exchange Act of 1934. 4.1 Undertaking by HSBC Holdings plc to the Financial Services Authority (incorporated by reference to Exhibit 99.3 to HSBC Holdings plc’s Form 6-K filed with the Securities and Exchange Commission on December 12, 2012), as replaced by the Direction by the Financial Conduct Authority to HSBC Holdings plc (incorporated by reference to HSBC Holdings plc’s Form 6-K filed with the Securities and Exchange Commission on April 12, 2013), as further replaced by the Direction by the Financial Conduct Authority to HSBC Holdings plc dated July 7, 2020. 4.2 Amendment dated January 16, 2024 to Paragraph 5 of the Annex to the Direction by the Financial Conduct Authority to HSBC Holdings plc dated July 7, 2020 (incorporated by reference to Exhibit 4.2 to HSBC Holdings plc’s Form 20-F filed with the SEC on February 22, 2024). 4.3 Service Agreement dated July 16, 2024 between HSBC Group Management Services Limited and Georges Elhedery (incorporated by reference to Exhibit 4.3 to HSBC Holdings plc's Form 20-F filed with the Securities and Exchange Commission on February 20, 2025). 4.4 Service Agreement dated October 21, 2024 between HSBC Group Management Services Limited and Manveen (Pam) Kaur (incorporated by reference to Exhibit 4.4 to HSBC Holdings plc's Form 20-F filed with the Securities and Exchange Commission on February 20, 2025). 4.5 Engagement Letter dated December 3, 2025 and executed on February 18, 2026 between HSBC Holdings plc and Brendan Nelson. 8.1 Subsidiaries of HSBC Holdings plc (set forth in Note 38 to the consolidated financial statements included in this annual report on Form 20-F). 11.1 HSBC Holdings plc Insider Trading Policies and Procedures. 12.1 Certificate of HSBC Holdings plc’s Group Chief Executive pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 12.2 Certificate of HSBC Holdings plc’s Group Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 . 13.1 Annual Certification of HSBC Holdings plc’s Group Chief Executive and Group Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 15.1 Consent of PricewaterhouseCoopers LLP. 15.2 Pages of HSBC Holdings plc’s 2000 Form 20-F/A dated February 26, 2001 relating to the Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 14.2 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on March 20, 2006). 15.3 Page of HSBC Holdings plc’s 2001 Form 20-F dated March 13, 2002 relating to the Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 14.3 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on March 20, 2006). 15.4 Page of HSBC Holdings plc’s 2018 Form 20-F dated February 20, 2019 relating to the Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 15.4 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on February 19, 2020). 15.5 Page of HSBC Holdings plc’s 2022 Form 20-F dated February 22, 2023 relating to the Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 15.5 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on February 22, 2024). 15.6 Consent of Willis Towers Watson Limited. 97 HSBC Holdings plc Policy for the Recovery of Erroneously Awarded Compensation. SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf. HSBC Holdings plc By: /s/ Manveen (Pam) Kaur Name: Manveen (Pam) Kaur Title: Group Chief Financial Officer Date: February 26, 2026", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000108911326000010/hsbc-20251231.htm"}
{"doc_id": "38e77d3c17eb88e989c13cc72fd3da57", "text": "6-K 1 a0978j.htm GROUP CFO SUCCESSION a0978j FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of October HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F 22 October 2024 HSBC HOLDINGS PLC HSBC ANNOUNCES APPOINTMENT OF PAM KAUR AS GROUP CHIEF FINANCIAL\nOFFICER (GCFO) HSBC\nHoldings plc ('HSBC', the 'Company' or the 'Group') announces the\nappointment of Pam Kaur as Group Chief Financial Officer (GCFO) and\nan Executive Director of the Board of Directors (the 'Board')\neffective 1 January 2025. Pam,\nwho joined the Group in April 2013 as Group Head of Audit, is\ncurrently Group Chief Risk and Compliance Officer (GCRCO). She is a\nhighly experienced financial services executive with almost 40\nyears' experience having worked in the UK and the US for British,\nAmerican and German Banks. A\nqualified chartered accountant, Pam has strong technical knowledge\nand experience in treasury, capital, balance sheet and risk\nmanagement. She has served on the Group Executive Committee for\nover a decade and brings a global perspective and an appreciation\nof the strategic challenges and opportunities, locally and\nglobally, facing the banking industry in general and HSBC in\nparticular. Jon\nBingham, interim GCFO, will resume his role of Global Financial\nController. Sir\nMark Tucker, HSBC Group Chairman, said: \"I would like to\ncongratulate Pam on her appointment as GCFO. She is highly\nrespected and well known to the Board and was the unanimous\nchoice.  I wish Pam every success in her new role and thank\nJon for his excellent support as interim GCFO.\" HSBC\nGroup Chief Executive, Georges Elhedery, said: \"We had a strong\nbench of internal and external candidates to choose from and Pam\nwas the exceptional candidate to recommend to the Board. I look\nforward to partnering with her for the next stage of the Bank's\ngrowth and development. I would also like to thank Jon for his\noutstanding support during the interim period.\" We will\nupdate on Mrs Kaur's successor as Group Chief Risk and Compliance\nOfficer in due course. For\nand on behalf of HSBC Holdings plc Aileen\nTaylor Company\nSecretary HSBC Holdings plc Registered Office and Group Head Office: 8\nCanada Square, London E14 5HQ, United Kingdom Web: www.hsbc.com Incorporated in England with limited liability. Registered in\nEngland: number 617987 Supplementary information Pam\nKaur, aged 60, joined HSBC in April 2013. She is currently the\nGroup Chief Risk and Compliance Officer. Her appointment as an\nExecutive Director of the Board is subject to election at the next\nannual general meeting of the Company. Mrs\nKaur's remuneration as Executive Director and Group Chief Financial\nOfficer of the Company under her service contract will consist of a\nbase salary of £803,000 per annum, a fixed pay allowance of\n£1,085,000 per annum and a pension allowance of £80,300\nper annum equal to 10% of her base salary. She will receive\nbenefits in accordance with the approved Directors' Remuneration\nPolicy. Mrs\nKaur is eligible to be considered for discretionary variable pay\nthat consists of an annual incentive award up to a maximum value of\n215% of base salary, and a long-term incentive award up to a\nmaximum of 320% of base salary. This is determined by the Group\nRemuneration Committee with reference to the performance of the\nCompany and her personal performance, in accordance with the terms\nof the Directors' Remuneration Policy approved at the 2022 Annual\nGeneral Meeting. The\nCompany's current Directors' Remuneration Policy expires at the\n2025 AGM. The Group Remuneration Committee is currently engaging\nwith major shareholders on a revised policy, which, subject to\napproval by shareholders at the 2025 AGM, will apply to both\nExecutive Directors of the Company. Mrs\nKaur does not have any relationships with any directors, senior\nmanagement, substantial or controlling shareholders of the Company.\nAs at the date of this announcement, Mrs Kaur has interests in\n1,960,245 shares of the Company, representing approximately 0.01%\nof the issued shares of the Company, within the meaning of Part XV\nof the Securities and Futures Ordinance of Hong Kong. There\nare no matters relating to the appointment of Mrs Kaur that need to\nbe disclosed pursuant to Listing Rule 6.4.8(2) to (6) of the\nListing Rules of the Financial Conduct Authority. Save as disclosed\nabove and in the Appendix, there is no other information required\nto be disclosed pursuant to Rule 13.51(2) of the Rules Governing\nthe Listing of Securities on The Stock Exchange of Hong Kong\nLimited. Note to editors: 1. Professional qualifications of Mrs Kaur 1989:\n   Fellow, The Institute of Chartered Accountants in\nEngland and Wales 1986:\n   MBA, Finance - Punjab University, India 1984:\n   BCom Hons, Accountancy - Punjab University,\nIndia 2. HSBC career history and other appointments of Mrs\nKaur 2021\n- date:      Group Chief Risk and Compliance\nOfficer, HSBC 2020\n- 2021:     Group Chief Risk Officer,\nHSBC 2019\n- 2020:     Head of Wholesale Market and Credit\nRisk, HSBC 2013\n- 2019:     Group Head of Internal Audit,\nHSBC 2023\n- date:      Non-executive Director, The\nHongkong and Shanghai Banking Corporation Limited 2022\n- date:      Non-executive Director, abrdn\nplc 3. Board of Directors The\nBoard of Directors of HSBC Holdings plc as at the date of this\nannouncement comprises: Sir Mark Edward Tucker*, Georges Bahjat Elhedery, Geraldine Joyce\nBuckingham † ,\nRachel Duan † ,\nDame Carolyn Julie Fairbairn † ,\nJames Anthony Forese † ,\nAnn Frances Godbehere † ,\nSteven Craig Guggenheimer † ,\nDr José Antonio Meade Kuribreña † ,\nKalpana Jaisingh Morparia † ,\nEileen K Murray † ,\nBrendan Robert Nelson † and\nSwee Lian Teo † . *  Non-executive Group Chairman † Independent\nnon-executive Director 4. HSBC Holdings plc HSBC\nHoldings plc, the parent company of HSBC, is headquartered in\nLondon. HSBC serves customers worldwide from offices in 60\ncountries and territories. With assets of US$2,975bn at 30 June\n2024, HSBC is one of the world's largest banking and financial\nservices organisations. Media enquiries to: Heidi\nAshley      +44 (0) 7920\n254057     \nheidi.ashley@hsbc.com SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date: 22 October 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424013179/a0978j.htm"}
{"doc_id": "817bbd18bd8f57b9e5ab7bd32d62b0f8", "text": "6-K 1 a3274e.htm NOTICE OF REDEMPTION a3274e FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of September HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F 16 September 2024 HSBC HOLDINGS PLC NOTICE OF REDEMPTION AND CANCELLATION OF LISTING To the holders of: (i) GBP350,000,000 1.8777% Resettable Notes due October\n2025 ISIN Code: XS2050979025 (the 'Series 38 Notes') and (ii) GBP150,000,000 2.1003% Resettable Notes due October\n2025 ISIN Code: XS2054215483 (the 'Series 39 Notes' and together with the Series 38 Notes, the\n'Notes') Notice is hereby irrevocably given to: i. the holders of the Series 38\nNotes (the ' Series\n38 Noteholders ')\nthat, pursuant to Condition 6(c) ( Redemption at\nthe Option of the Issuer ) of the terms and conditions of\nthe Series 38 Notes and paragraph 16 ( Issuer's\noptional redemption (Call): Condition\n6(c) ) of the\nfinal terms dated 9 September 2019 relating to the Series 38 Notes\n(the ' Series 38\nFinal Terms '),\non 31 October 2024 (the ' Series\n38 Redemption\nDate ') HSBC\nHoldings plc will exercise its option to redeem all of the\noutstanding Series 38 Notes at GBP1,000 per\nCalculation Amount (as defined in the Series 38 Final Terms),\ntogether with accrued but unpaid interest from (and including) 31\nOctober 2023 to (but excluding) the Series 38 Redemption Date;\nand ii. the holders of the Series 39\nNotes (the ' Series\n39 Noteholders ')\nthat, pursuant to Condition 6(c) ( Redemption at\nthe Option of the Issuer ) of the terms and conditions of\nthe Series 39 Notes and paragraph 16 ( Issuer's\noptional redemption (Call): Condition\n6(c) ) of the\nfinal terms dated 20 September 2019 relating to the Series 39 Notes\n(the ' Series 39\nFinal Terms '),\non 31 October 2024 (the ' Series\n39 Redemption\nDate ') HSBC\nHoldings plc will exercise its option to redeem all of the\noutstanding Series 39 Notes at GBP1,000 per\nCalculation Amount (as defined in the Series 39 Final Terms),\ntogether with accrued but unpaid interest from (and including) 31\nOctober 2023 to (but excluding) the Series 39 Redemption\nDate. Noteholders should look to the relevant clearing systems through\nwhich their Notes are held for repayment. The listing of the Notes on the Official List of the Financial\nConduct Authority and the admission of the Notes to trading on the\nMain Market of the London Stock Exchange plc will be cancelled on,\nor shortly after, 1 November 2024. Investor enquiries to: Greg Case                \n           +44 (0) 20 7992\n3825 investorrelations@hsbc.com Media enquiries to: Press Office              \n           +44 (0) 20 7991 8096\n                \npressoffice@hsbc.com Note to editors: HSBC Holdings plc HSBC Holdings plc, the parent company of HSBC, is headquartered in\nLondon. HSBC serves customers worldwide from offices in 60\ncountries and territories. With assets of US$2,975bn at 30 June\n2024, HSBC is one of the world's largest banking and financial\nservices organisations. The Notes have not been and will not be registered under the United\nStates Securities Act of 1933, as amended (the ' Securities\nAct '), or any state securities\nlaws and, unless so registered, may not be offered or sold within\nthe United States or to, or for the account or the benefit of, US\npersons, as defined in Regulation S under the Securities Act,\nexcept pursuant to an exemption from or in a transaction not\nsubject to the registration requirements of the Securities Act and\nin compliance with any applicable state securities\nlaws. ends/all SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n16 September 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424011915/a3274e.htm"}
{"doc_id": "9c53783cb6e068d6aa60e67f5d58a2eb", "text": "6-K 1 a6753y.htm TOTAL VOTING RIGHTS a6753y FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of March HSBC Holdings plc 8\nCanada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or\nForm 40-F). Form\n20-F X Form 40-F ...... HSBC HOLDINGS PLC 30 March 2026 Voting Rights and Capital The following notification is made in accordance with the UK\nFinancial Conduct Authority Disclosure Guidance and Transparency\nRule 5.6.1. On 27 March 2026, the issued share capital of HSBC Holdings plc was\n17,183,546,359 ordinary shares of US$0.50. No shares are held in\ntreasury. Therefore, the total number of voting rights in HSBC Holdings plc\nis 17,183,546,359. This figure for the total number of voting\nrights may be used by shareholders as the denominator for the\ncalculations by which they will determine if they are required to\nnotify their interest in, or a change to their interest in, HSBC\nHoldings plc under the Financial Conduct Authority's Disclosure\nGuidance and Transparency Rules and/or under Part XV of the Hong\nKong Securities and Futures Ordinance. Any such notification should be\nsent to investorrelations@hsbc.com and\nshareholderquestions@hsbc.com. Lee Davis Group Governance shareholderquestions@hsbc.com SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAngela McEntee Title:\nGroup Company Secretary Date:\n30 March 2026", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495426002961/a6753y.htm"}
{"doc_id": "67f74e29ae2ad2088f7e316acba78e1b", "text": "6-K 1 a4268a.htm DIRECTOR/PDMR SHAREHOLDING a4268a FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of March HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F HSBC HOLDINGS PLC 12 March 2025 Notification of Transactions by Persons Discharging Managerial\nResponsibilities (\"PDMRs\") 1.   Annual Incentive awards (Performance Year\n2017) Deferred awards (the \"Awards\") of US$0.50 ordinary shares (the\n\"Shares\") in HSBC Holdings plc (the \"Company\") were granted in 2018\nas a part of variable pay for the performance year ended 31\nDecember 2017. On 10 March 2025, tranches of the Awards granted in 2018 vested and\nthe following transactions took place in London: Directors Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Pam\nKaur 15,633 7,348 Other PDMRs Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Ian\nStuart 13,490 6,341 1 Represents\nshares sold to cover withholding tax . The PDMRs are required to retain a number of Shares equivalent in\nvalue to those that vested under the Awards (net of tax\nliabilities) for twelve months from the original vesting\ndate. 2.   Annual Incentive awards (Performance Year\n2018) Awards of Shares in the Company were granted in 2019 as a part of\nvariable pay for the performance year ended 31 December\n2018. On 10 March 2025, tranches of the Awards granted in 2019 vested and\nthe following transactions took place in London: Directors Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Pam\nKaur 18,655 8,768 Other PDMRs Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Ian\nStuart 16,864 7,926 1 Represents\nshares sold to cover withholding tax . The PDMRs are required to retain a number of Shares equivalent in\nvalue to those that vested under the Awards (net of tax\nliabilities) for twelve months from the original vesting\ndate. 3.   Annual Incentive awards (Performance Year\n2019) Awards of Shares in the Company were granted in 2020 as a part of\nvariable pay for the performance year ended 31 December\n2019. On 10 March 2025, tranches of the Awards granted in 2020 vested and\nthe following transactions took place in London: Directors Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Georges\nElhedery 29,532 13,881 Pam\nKaur 19,635 9,228 Other PDMRs Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Richard\nBlackburn 8,928 4,197 Barry\nO'Byrne 15,152 3,680 Michael\nRoberts 43,946 22,435 Ian\nStuart 17,190 8,079 Suzanna\nWhite 4,044 1,818 1 Represents\nshares sold to cover withholding tax . The PDMRs are required to retain a number of Shares equivalent in\nvalue to those that vested under the Awards (net of tax\nliabilities) for twelve months from the original vesting date with\nthe exception of Richard Blackburn and Suzanna White who are\nsubject to a six-month retention period. 4.   Annual Incentive awards (Performance Year\n2020) Awards of Shares in the Company were granted in 2021 as a part of\nvariable pay for the performance year ended 31 December\n2020. On 10 March 2025, tranches of the Awards granted in 2021 vested and\nthe following transactions took place in London: Directors Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Georges\nElhedery 61,104 28,718 Pam\nKaur 42,388 19,923 Other PDMRs Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Richard\nBlackburn 11,796 5,544 David\nLiao 18,753 3,001 Barry\nO'Byrne 27,714 5,281 Michael\nRoberts 46,879 23,932 Ian\nStuart 20,447 9,610 Suzanna\nWhite 8,789 3,894 1 Represents\nshares sold to cover withholding tax . The PDMRs are required to retain a number of Shares equivalent in\nvalue to those that vested under the Awards (net of tax\nliabilities) for twelve months from the original vesting date, with\nthe exception of Richard Blackburn, David Liao and Suzanna White\nwho are subject to a six-month retention period. 5.   Annual Incentive awards (Performance Year\n2022) Awards of Shares in the Company were granted in 2023 as a part of\nvariable pay for the performance year ended 31 December\n2022. On 10 March 2025, tranches of the Awards granted in 2023 vested and\nthe following transactions took place in London: Other PDMRs Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 David\nLiao 9,763 1,562 Michael\nRoberts 19,640 10,026 Surendra\nRosha 9,763 1,563 Suzanna\nWhite 12,743 5,645 1 Represents\nshares sold to cover withholding tax . The PDMRs are required to retain a number of Shares equivalent in\nvalue to those that vested under the Awards (net of tax\nliabilities) for twelve months from the original vesting date with\nthe exception of Suzanna White who is subject to a six-month\nretention period. 6. Buyout\nAwards Buyout awards of Shares that were granted to a PDMR on 8 May 2024\nas a result of their HSBC appointment vested on 10 March 2025 and\nthe following transactions took place in London: Other PDMRs Name Total number of Shares vested Number of Shares sold at £8.613754 per\nShare 1 Stuart\nRiley 2 235,069 110,483 Stuart\nRiley 3 42,272 19,868 1 Includes\nshares sold to cover withholding tax. 2 The\nfirst tranche of the 8 May 2024 Buyout Award. A twelve-month\nretention period will apply. 3 The\nsecond tranche of the 8 May 2024 Buyout Award. A six-month\nretention period will apply. For the purpose of the below disclosures, the value of the awards\nwhich vested on 10 March 2025 has been calculated using the closing\nShare price on the London Stock Exchange on 7 March 2025 of\n£8.7640. The following disclosures are made in accordance with the UK\nversion of the EU Market Abuse Regulation 596/2014. 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Georges\nElhedery 2 - Reason for the notification Position/status Group\nChief Executive Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 90,636 £794,333.90 Aggregated £8.764 90,636 £794,333.90 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 42,599 £366,937.31 Aggregated £8.614 42,599 £366,937.31 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Pam\nKaur 2 - Reason for the notification Position/status Group\nChief Financial Officer Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 96,311 £844,069.60 Aggregated £8.764 96,311 £844,069.60 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 45,267 £389,918.80 Aggregated £8.614 45,267 £389,918.80 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Richard\nBlackburn 2 - Reason for the notification Position/status Interim\nGroup Chief Risk and Compliance Officer Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 20,724 £181,625.14 Aggregated £8.764 20,724 £181,625.14 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 9,741 £83,906.58 Aggregated £8.614 9,741 £83,906.58 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person David\nLiao 2 - Reason for the notification Position/status Co-Chief\nExecutive, Asia and Middle East Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 28,516 £249,914.22 Aggregated £8.764 28,516 £249,914.22 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 4,563 £39,304.56 Aggregated £8.614 4,563 £39,304.56 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Barry\nO'Byrne 2 - Reason for the notification Position/status Chief\nExecutive, International Wealth and Premier Banking Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 42,866 £375,677.62 Aggregated £8.764 42,866 £375,677.62 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 8,961 £77,187.85 Aggregated £8.614 8,961 £77,187.85 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Stuart\nRiley 2 - Reason for the notification Position/status Group\nChief Information Officer Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 277,341 £2,430,616.52 Aggregated £8.764 277,341 £2,430,616.52 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 130,351 £1,122,811.45 Aggregated £8.614 130,351 £1,122,811.45 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Michael\nRoberts 2 - Reason for the notification Position/status Chief\nExecutive, HSBC Bank plc and Corporate and Institutional\nBanking Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 110,465 £968,115.26 Aggregated £8.764 110,465 £968,115.26 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 56,393 £485,755.43 Aggregated £8.614 56,393 £485,755.43 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Surendra\nRosha 2 - Reason for the notification Position/status Co-Chief\nExecutive, Asia and Middle East Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 9,763 £85,562.93 Aggregated £8.764 9,763 £85,562.93 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 1,563 £13,463.30 Aggregated £8.614 1,563 £13,463.30 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Ian\nStuart 2 - Reason for the notification Position/status Chief\nExecutive, HSBC UK Bank plc Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 67,991 £595,873.12 Aggregated £8.764 67,991 £595,873.12 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 31,956 £275,261.12 Aggregated £8.614 31,956 £275,261.12 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Suzanna\nWhite 2 - Reason for the notification Position/status Group\nChief Operating Officer Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Acquisitions under the HSBC Share Plan 2011 Price Volume Total £8.76 25,576 £224,148.06 Aggregated £8.764 25,576 £224,148.06 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2025-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £8.61 11,357 £97,826.40 Aggregated £8.614 11,357 £97,826.40 For any\nqueries related to this notification, please\ncontact: Lee Davis Corporate Governance & Secretariat shareholderquestions@hsbc.com SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n12 March 2025", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495425002663/a4268a.htm"}
{"doc_id": "ba7c5acc8837bb1df91bae9ca634da80", "text": "6-K 1 a2253o.htm CAPITAL REDUCTION- INCREASE DISTRIBUTABLE RESERVES a2253o FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of June HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F 24 June 2025 HSBC HOLDINGS PLC CAPITAL REDUCTION TO INCREASE DISTRIBUTABLE RESERVES HSBC Holdings plc (the \" Company \") is pleased to confirm that, following approval\nof shareholders at the Company's Annual General Meeting held on 2\nMay 2025 (\" AGM \"), on 24 June 2025, the High Court of England and\nWales (the \" Court \") confirmed the cancellation of US$14,809,888,249\nstanding to the credit of the Company's share premium account and\nUS$1,755,360,094 standing to the credit of the Company's capital\nredemption reserve (the \" Capital\nReduction \"). The Court order confirming the Capital Reduction and a statement of\ncapital approved by the Court in connection with the same have been\nsent to the Registrar of Companies. The Capital Reduction will\nbecome effective upon registration of these documents by the\nRegistrar of Companies. As set out in the Company's Notice of AGM published on 21 March\n2025, the effect of the Capital Reduction will be to increase\ndistributable reserves and give the Company further flexibility to\ndeliver shareholder returns over the coming years in the form of\ndividends and/or share buy-backs. Investor enquiries to: Neil\nSankoff                                       \n+44 (0) 20 7991\n5072                       \ninvestorrelations@hsbc.com Media enquiries to: Gillian\nJames                                     \n+44 (0) 20 7992\n0516                       \ngillian.james@hsbcib.com Note to editors: HSBC Holdings plc HSBC Holdings plc, the parent company of the HSBC Group, is\nheadquartered in London. HSBC serves customers worldwide from\noffices in 58 countries and territories. With assets of US$3,054bn\nat 31 March 2025, HSBC is one of the world's largest banking and\nfinancial services organisations. ends/all SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n24 June 2025", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495425007330/a2253o.htm"}
{"doc_id": "284f74ff41a31a3eec0965d52e852670", "text": "6-K 1 a0165i.htm ISSUANCE OF SUBORDINATED UNSECURED NOTES a0165i FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of March HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F 22 March 2024 HSBC HOLDINGS PLC ISSUANCE OF SUBORDINATED UNSECURED NOTES On 22 March 2024, HSBC Holdings plc issued EUR1,000,000,000 4.599%.\nFixed Rate Resettable Subordinated Notes due 2035 (the\n' Notes ') under its Debt Issuance\nProgramme. Application will be made to list the Notes on the Official List of\nthe Financial Conduct Authority and to trade the Notes on the Main\nMarket of the London Stock Exchange plc. ends/more Investor enquiries to: Greg\nCase +44\n(0) 20 7992\n3825 investorrelations@hsbc.com Media enquiries to: Press\nOffice                   +44\n(0) 20 7991\n8096 pressoffice@hsbc.com Note to editors: HSBC Holdings plc HSBC Holdings plc, the parent company of HSBC, is headquartered in\nLondon. HSBC serves customers worldwide from offices in 62\ncountries and territories. With assets of US$3,039bn at 31 December\n2023, HSBC is one of the world's largest banking and financial\nservices organisations. DISCLAIMER - INTENDED ADDRESSEES The Notes have not been and will not be registered under the United\nStates Securities Act of 1933, as amended (the ' Securities\nAct '), or any state securities\nlaws and, unless so registered, may not be offered or sold within\nthe United States or to, or for the account or the benefit of, US\npersons, as defined in Regulation S under the Securities Act,\nexcept pursuant to an exemption from or in a transaction not\nsubject to the registration requirements of the Securities Act and\nin compliance with any applicable state securities\nlaws. ends/all SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n22 March 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424003535/a0165i.htm"}
{"doc_id": "1a8f56823be5910cdfae6c9e65af18fd", "text": "6-K 1 hsbcholdingsplc-9475e.htm TRANSACTION IN OWN SHARES hsbcholdingsplc-9475e FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of September HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F HSBC HOLDINGS PLC 19 September 2024 Transaction in own shares HSBC Holdings plc (\" HSBC \" or the \" Company \") announces that it has purchased for\ncancellation the following number of its ordinary shares of US$0.50\nfrom Merrill Lynch International (\" Merrill\nLynch \") as part of its\nbuy-back announced on 1 August 2024. UK Venues Date of purchase: 19 September 2024 Number of ordinary shares of US$0.50 each purchased: 4,835,573 Highest price paid per share: £6.7150 Lowest price paid per share: £6.6330 Volume weighted average price paid per share: £6.6781 All repurchases on the London Stock Exchange, Cboe Europe Limited\n(through the BXE and CXE order books) and/or Turquoise\n(\" UK\nVenues \") are implemented as \"on\nExchange\" transactions (as such term is defined in the rules of the\nLondon Stock Exchange) and as \"market purchases\" for the purposes\nof the Companies Act 2006. Hong Kong Stock Exchange Date of purchase: 19 September 2024 Number of ordinary shares of US$0.50 each purchased: 3,529,600 Highest price paid per share: HK$68.8500 Lowest price paid per share: HK$67.9500 Volume weighted average price paid per share: HK$68.5621 All repurchases on The Stock Exchange of Hong Kong Limited\n(\" Hong Kong\nStock Exchange \") are \"off\nmarket\" for the purposes of the Companies Act 2006 but are\ntransactions which occur \"on Exchange\" for the purposes of the\nRules Governing the Listing of Securities on The Stock Exchange of\nHong Kong Limited and which constitute an \"on-market share\nbuy-back\" for the purposes of the Codes on Takeovers and Mergers\nand Share Buy-backs. Since the commencement of the buy-back announced on 1 August 2024,\nthe Company has repurchased 199,407,853 ordinary shares for a total consideration of\napproximately US$1,695.6m. On 19 September 2024, 30,254,800 of the ordinary shares\nof US$0.50 each which were awaiting cancellation having been\nrepurchased on the Hong Kong Stock Exchange previously were\ncancelled. Following cancellation of those shares and following the\ncancellation of shares repurchased on the UK Venues, the Company's\nissued ordinary share capital will consist of\n18,303,270,163 ordinary shares with voting rights. There are no\nordinary shares held in treasury. Cancellation of the shares\nrepurchased on the Hong Kong Stock Exchange takes longer than those\nrepurchased on the UK Venues and a further announcement of total\nvoting rights will be made once those shares have been\ncancelled. The above figure of 18,303,270,163 may be used by shareholders as\nthe denominator for the calculations by which they will determine\nif they are required to notify their interest in, or a change to\ntheir interest in, the Company under the Financial Conduct\nAuthority's Disclosure Guidance and Transparency\nRules. In accordance with Article 5(1)(b) of the Market Abuse Regulation\n(EU) No 596/2014 (as it forms part of domestic law of the United\nKingdom by virtue of the European Union (Withdrawal) Act 2018), a\nfull breakdown of the individual trades made by Merrill Lynch on\nbehalf of the Company is available via the link below. http://www.rns-pdf.londonstockexchange.com/rns/9469E_1-2024-9-19.pdf This announcement will also be available on HSBC's website\nat www.hsbc.com/sea Enquiries to: Lee Davis Corporate Governance & Secretariat shareholderquestions@hsbc.com +44 (0)20 7991 8888 SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n19 September 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424012090/hsbcholdingsplc-9475e.htm"}
{"doc_id": "9ba03ac25a6e6ba3a853b79f20d46feb", "text": "6-K 1 a2424a.htm ISSUANCE OF SUBORDINATED UNSECURED NOTES a2424a FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of March HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X          \nForm 40-F 11 March 2025 HSBC HOLDINGS PLC ISSUANCE OF SUBORDINATED UNSECURED NOTES On 11 March 2025, HSBC Holdings plc issued A$550,000,000\nFixed-to-Floating Rate Subordinated Notes due 11 March 2035 and\nA$950,000,000 Floating Rate Subordinated Notes due 11 March 2035\n(together, the ' Notes ') under its A$10,000,000,000 Debt Issuance\nProgramme. Application has been made to list the Notes on the Official List of\nthe Irish Stock Exchange plc trading as Euronext Dublin\n(' Euronext\nDublin ') and to trade the Notes\non the Global Exchange Market of Euronext\nDublin. Investor enquiries to: Greg\nCase                   \n+44 (0) 20 7992\n3825 investorrelations@hsbc.com Media enquiries to: Press\nOffice                \n+44 (0) 20 7991 8096 pressoffice@hsbc.com Note to editors: HSBC Holdings plc HSBC Holdings plc, the parent company of HSBC, is headquartered in\nLondon. HSBC serves customers worldwide from offices in\n58 countries and territories. With assets of US$3,017bn at\n31 December 2024, HSBC is one of the world's largest\nbanking and financial services organisations. DISCLAIMER - INTENDED ADDRESSEES The Notes have not been and will not be registered under the United\nStates Securities Act of 1933, as amended\n(the ' Securities\nAct '), or any state securities\nlaws and, unless so registered, may not be offered or sold within\nthe United States or to, or for the account or the benefit of, US\npersons, as defined in Regulation S under the Securities Act,\nexcept pursuant to an exemption from or in a transaction not\nsubject to the registration requirements of the Securities Act and\nin compliance with any applicable state securities\nlaws. ends/all SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date: 11 March 2025", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495425002578/a2424a.htm"}
{"doc_id": "65c03587d179be23c330406dba773500", "text": "6-K 1 livedocq32024earningsrelea.htm 6-K Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of October 2024 Commission File Number: 001-14930 HSBC Holdings plc 8 Canada Square, London E14 5HQ, England (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F). Form 20-F   X             Form 40-F ...... This Report on Form 6-K with respect to our quarterly results for the three-month and nine-month periods ended September 30, 2024 is hereby incorporated by reference in HSBC Holdings plc’s registration statement on Form F-3 (File No. 333-277306). Neither our website referred to herein, nor any of the information contained on our website, is incorporated by reference in the Form 6-K. 29 October 2024 HSBC Holdings plc Earnings Release 3Q24 Georges Elhedery, Group Chief Executive, said: “We delivered another good quarter, which shows that our strategy is working. There was strong revenue growth and good performances in Wealth and Wholesale Transaction Banking. Our strong organic capital generation enables us to announce a further $4.8bn of distributions in respect of the third quarter, which bring the total distributions announced so far in 2024 to $18.4bn. I’m committed to building on this strong platform for growth. HSBC is a highly connected, global business and the plans we set out last week aim to increase our leadership and market share in areas where we have competitive advantage, deliver best-in-class products and service excellence to our customers, and create a simpler, more dynamic, more agile organisation with clearer lines of accountability and faster decision-making. We will begin to implement these plans immediately and will share further details as part of a business update alongside our full-year results in February.” Financial performance in 3Q24 – Profit before tax increased by $0.8bn to $8.5bn compared with 3Q23, primarily due to revenue growth in Wealth and Personal Banking (‘WPB‘), and in Foreign Exchange, Equities and Global Debt Markets in Global Banking and Markets (‘GBM‘). Profit before tax in 3Q24 included a $0.3bn loss on the early redemption of legacy securities. The 3Q23 period included $0.6bn of disposal losses relating to Treasury repositioning and risk management, which was partly offset by a $0.2bn gain on foreign exchange hedges relating to the disposal of our banking business in Canada. Profit after tax of $6.7bn was $0.5bn higher than in 3Q23. – Constant currency profit before tax excluding notable items increased by $0.8bn to $8.7bn compared with 3Q23, as revenue growth and lower expected credit losses and other impairment charges (‘ECL‘) were partly offset by a rise in operating expenses. This included a $0.2bn adverse impact from strategic transactions. – Revenue increased by $0.8bn or 5% to $17.0bn compared with 3Q23. The growth in revenue reflected higher customer activity in our Wealth products in WPB, supported by volatile market conditions, and in Foreign Exchange, Equities and Global Debt Markets in GBM. Revenue in 3Q24 included a $0.3bn loss on the early redemption of legacy securities and a loss of $0.1bn from Treasury repositioning and risk management actions. On a constant currency basis, revenue rose by 7% to $17.0bn compared with 3Q23. – Net interest income (‘NII‘) of $7.6bn fell by $1.6bn compared with 3Q23, reflecting reductions due to business disposals, higher interest expense on liabilities and a loss on the early redemption of legacy securities. It also included an increase in funding costs associated with redeployment of our commercial surplus into the trading book, where the related revenue is recognised in ‘net income from financial instruments held for trading or managed on a fair value basis‘. Banking net interest income (‘banking NII‘) fell by $1.0bn or 9% compared with 3Q23, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII. NII fell by $0.6bn compared with 2Q24, while the funding costs associated with funding the trading book increased by $0.3bn, which resulted in a fall in banking NII of $0.3bn. – Net interest margin (‘NIM’) of 1.46% decreased by 24 basis points (‘bps‘) compared with 3Q23, mainly due to higher interest expense on liabilities because of higher interest rates. NIM decreased by 16bps compared with 2Q24, reflecting higher interest expense on liabilities and an impact from the early redemption of legacy securities. – ECL of $1.0bn were $0.1bn lower than in 3Q23, primarily reflecting lower charges in the mainland China commercial real estate sector in Commercial Banking (‘CMB‘) and GBM, in part offset by an increase in ECL charges in WPB. ECL in 3Q24 comprised charges in CMB and GBM of $0.5bn, including against exposures in the onshore Hong Kong commercial real estate ($0.1bn) and mainland China commercial real estate sectors ($0.1bn), while charges in WPB of $0.5bn primarily related to our legal entities in Mexico, Hong Kong and in HSBC UK. – Operating expenses of $8.1bn were $0.2bn or 2% higher than in 3Q23. The growth was primarily due to higher spend and investment in technology and the impacts of inflation, in part mitigated by continued cost discipline and the impact of our disposals in Canada and France. Target basis operating expenses were $0.4bn or 5% higher than in 3Q23, while they fell by 1% compared with 2Q24 driven by lower marketing costs and a lower performance-related pay accrual. – Customer lending balances increased by $30bn compared with 2Q24. On a constant currency basis, lending balances increased by $2bn, including growth in WPB and CMB, notably in HSBC UK, while term lending balances decreased in GBM, notably in our main legal entity in Asia. – Customer accounts increased by $67bn compared with 2Q24. On a constant currency basis, customer accounts increased by $20bn, mainly in our legal entity in Hong Kong due to an increase in term deposits prior to interest rate reductions and from short-term inflows into customer accounts amid equity market volatility. Deposits in GBM were broadly stable as an outflow of a large short-term deposit from a single client was partly offset by balance growth, notably in our legal entities in mainland China and the US. – Common equity tier 1 (‘CET1’) capital ratio of 15.2% increased by 0.2 percentage points compared with 2Q24, mainly driven by capital generation, partly offset by the share buy-back announced at our interim results and an increase in risk-weighted assets (‘RWAs‘). – The Board has approved a third interim dividend of $0.10 per share. On 25 October 2024, we completed the $3bn share buy-back announced at our interim results. We now intend to initiate a share buy-back of up to $3bn, which we expect to complete within the four-month period before our 2024 full-year results announcement. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 1 Earnings Release 3Q24 on Form 6-K Financial performance in 9M24 – Profit before tax increased by $0.7bn to $30.0bn compared with 9M23, including a $0.2bn net favourable revenue impact of notable items relating to gains and losses recognised on certain strategic transactions. Profit after tax increased by $0.1bn to $24.4bn compared with 9M23. – In 9M24, we completed the disposal of our banking business in Canada, recognising a gain of $4.8bn. We also recognised a $1.2bn impairment following the classification of our business in Argentina as held for sale. Results in 9M23 included the impact of a $2.1bn reversal of an impairment relating to the sale of our retail banking operations in France, which was subsequently reinstated in 4Q23 prior to completion, and a $1.6bn gain recognised on the acquisition of Silicon Valley Bank UK Limited (‘SVB UK‘). In addition, the 9M24 period included a $0.3bn loss on the early redemption of legacy securities, while 9M23 included $0.6bn of disposal losses relating to Treasury repositioning and risk management. – Constant currency profit before tax excluding notable items increased by $0.7bn to $26.8bn compared with 9M23, as revenue growth and lower ECL charges were partly offset by a rise in operating expenses. – Revenue increased by $1.3bn or 2% to $54.3bn compared with 9M23, including the gains and losses on certain strategic transactions described above and a $0.3bn loss on the early redemption of legacy securities. The growth in revenue reflected the impact of higher customer activity in our Wealth products in WPB, and in Equities and Securities Financing in GBM. – NII of $24.5bn fell by $3.0bn compared with 9M23, reflecting reductions due to business disposals, higher interest expense in part due to deposit migration, and higher funding costs associated with the redeployment of our commercial surplus to the trading book, where the related revenue is recognised in ‘net income from financial instruments held for trading or managed on a fair value basis‘. Banking NII fell by $0.5bn or 2% compared with 9M23, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII, including the adverse impact of foreign currency translation differences. – Constant currency revenue excluding notable items rose by $1.7bn to $50.9bn compared with 9M23, notably in Wealth in WPB, and in Equities and Securities Financing in GBM. – NIM of 1.57% decreased by 13bps compared with 9M23 due to higher interest expense on liabilities because of higher interest rates and increased deployment of our commercial surplus to the trading book. – ECL were $2.1bn, a reduction of $0.4bn compared with 9M23. The reduction included lower charges relating to exposures in the commercial real estate sector in mainland China, and lower charges in HSBC UK, partly offset by higher ECL charges in WPB, notably against unsecured lending in our legal entity in Mexico. Annualised ECL charges were 28bps of average gross loans, including loans and advances classified as held for sale. – Operating expenses increased by $1.0bn or 4% to $24.4bn compared with 9M23, mainly due to higher spend and investment in technology and the impacts of inflation, while the performance-related pay accrual was higher than in 9M23. These increases were partly offset by reductions related to our business disposals in Canada and France. Target basis operating expenses rose by $1.4bn or 6% compared with 9M23. Target basis operating expenses are measured on a constant currency basis, excluding notable items, the impact of retranslating the results of hyperinflationary economies at constant currency, and the direct costs from the sales of our French retail banking operations and our banking business in Canada. Outlook – Our guidance remains unchanged from that set out at our Interim results on 31 July 2024. – We continue to target a mid-teens return on average tangible equity (‘RoTE‘) in 2024 and 2025, excluding the impact of notable items, while acknowledging the outlook for interest rates has changed, and been volatile, since our 1H24 results announcement in July. – Our banking NII guidance of around $43bn for 2024 remains unchanged and we continue to target cost growth of approximately 5% for 2024 compared with 2023, on a target basis. ECL charges as a percentage of average gross loans in 2024 are expected to be within our medium-term planning range of 30bps to 40bps (including customer lending balances transferred to held for sale). – Our guidance reflects our current outlook for the global macroeconomic environment, including customer and financial markets activity. This includes our modelling of a number of market-dependent factors, such as market-implied interest rates (as of mid-October 2024), as well as customer behaviour and activity levels. – We intend to manage our CET1 capital ratio within our medium-term target range of 14% to 14.5%, with a dividend payout ratio target basis of 50% for 2024, which excludes material notable items and related impacts. – We continue to make progress on reshaping the Group. We expect to complete the sale of our business in Argentina in 4Q24. On completion, cumulative foreign currency translation reserves and other reserves will recycle to the income statement. These impacts have already been recognised in capital. At 30 September 2024, foreign currency translation reserve and other reserve losses stood at $5.1bn. Note: we do not reconcile our forward guidance on RoTE excluding notable items, target basis operating expenses, dividend payout ratio target basis or banking NII to their equivalent reported measures. 2 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Cautionary statement regarding forward-looking statements This Earnings Release 3Q24 on Form 6-K contains certain forward-looking statements with respect to HSBC’s: financial condition; results of operations and business, including the strategic priorities; financial, investment and capital targets; and ESG targets, commitments and ambitions described herein. Statements that are not historical facts, including statements about HSBC’s beliefs and expectations, are forward-looking statements. Words such as ‘may’, ‘will’, ‘should’, ‘expects’, ‘targets’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, ‘potential’ and ‘reasonably possible’, or the negative thereof, other variations thereon or similar expressions are intended to identify forward-looking statements. These statements are based on current plans, information, data, estimates and projections, and therefore undue reliance should not be placed on them. Forward-looking statements speak only as of the date they are made. HSBC makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statements. Written and/or oral forward-looking statements may also be made in the periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, offering circulars and prospectuses, press releases and other written materials, and in oral statements made by HSBC’s Directors, officers or employees to third parties, including financial analysts. Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statement. These include, but are not limited to: – changes in general economic conditions in the markets in which we operate, such as new, continuing or deepening recessions, prolonged inflationary pressures and fluctuations in employment levels and the creditworthiness of customers beyond those factored into consensus forecasts; the Russia-Ukraine war, the Israel-Hamas war and the broader conflict in the Middle East and their impact on global economies and the markets where HSBC operates, which could have a material adverse effect on (among other things) our financial condition, results of operations, prospects, liquidity, capital position and credit ratings; deviations from the market and economic assumptions that form the basis for our ECL measurements (including, without limitation, as a result of the Russia-Ukraine war, the Israel-Hamas war and the broader conflict in the Middle East, inflationary pressures, commodity price changes, and ongoing developments in the commercial real estate sector in mainland China); potential changes in HSBC’s dividend policy; changes and volatility in foreign exchange rates and interest rates levels, including the accounting impact resulting from financial reporting in respect of hyperinflationary economies; volatility in equity markets; lack of liquidity in wholesale funding or capital markets, which may affect our ability to meet our obligations under financing facilities or to fund new loans, investments and businesses; geopolitical tensions or diplomatic developments producing social instability or legal uncertainty, such as the Russia-Ukraine war, the Israel-Hamas war or the broader conflict in the Middle East (including the continuation and escalation thereof) and the related imposition of sanctions and trade restrictions, supply chain restrictions and disruptions, sustained increases in energy prices and key commodity prices, claims of human rights violations, diplomatic tensions, including between China and the US, the UK, the EU, India and other countries, and developments in Hong Kong and Taiwan, alongside other potential areas of tension, which may adversely affect HSBC by creating regulatory, reputational and market risks; the efficacy of government, customer, and HSBC’s actions in managing and mitigating ESG risks, in particular climate risk, nature-related risks and human rights risks, and in supporting the global transition to net zero carbon emissions, each of which can impact HSBC both directly and indirectly through our customers and which may result in potential financial and non-financial impacts; illiquidity and downward price pressure in national real estate markets; adverse changes in central banks’ policies with respect to the provision of liquidity support to financial markets; heightened market concerns over sovereign creditworthiness in over-indebted countries; adverse changes in the funding status of public or private defined benefit pensions; societal shifts in customer financing and investment needs, including consumer perception as to the continuing availability of credit; exposure to counterparty risk, including third parties using us as a conduit for illegal activities without our knowledge; the discontinuation of certain key Ibors and the transition of the remaining legacy Ibor contracts to near risk-free benchmark rates, which continues to expose HSBC to some financial and non-financial risks; and price competition in the market segments we serve; – changes in government policy and regulation, including the monetary, interest rate and other policies of central banks and other regulatory authorities in the principal markets in which we operate and the consequences thereof (including, without limitation, recent policies announced by Chinese regulators and actions taken as a result of changes in government following national elections in the jurisdictions where the Group operates); initiatives to change the size, scope of activities and interconnectedness of financial institutions in connection with the implementation of stricter regulation of financial institutions in key markets worldwide; revised capital and liquidity benchmarks, which could serve to deleverage bank balance sheets and lower returns available from the current business model and portfolio mix; changes to tax laws and tax rates applicable to HSBC, including the imposition of levies or taxes designed to change business mix and risk appetite; the practices, pricing or responsibilities of financial institutions serving their consumer markets; expropriation, nationalisation, confiscation of assets and changes in legislation relating to foreign ownership; the UK’s relationship with the EU, which continues to be characterised by uncertainty and political disagreement, despite the signing of the Trade and Cooperation Agreement between the UK and the EU, particularly with respect to the potential divergence of UK and EU law on the regulation of financial services; changes in government approach and regulatory treatment in relation to ESG disclosures and reporting requirements, and the current lack of a single standardised regulatory approach to ESG across all sectors and markets; changes in UK macroeconomic and fiscal policy, which may result in fluctuations in the value of the pound sterling; general changes in government policy (including, without limitation, recent policies announced by Chinese regulators and actions taken as a result of changes in government following national elections in the jurisdictions where the Group operates) that may significantly influence investor decisions; the costs, effects and outcomes of regulatory reviews, actions or litigation, including any additional compliance requirements; and the effects of competition in the markets where we operate including increased competition from non-bank financial services companies; and – factors specific to HSBC, including our success in adequately identifying the risks we face, such as the incidence of loan losses or delinquency, and managing those risks (through account management, hedging and other techniques); our ability to achieve our financial, investment, capital and ESG targets, commitments and ambitions (including the positions set forth in our thermal coal phase-out policy and our energy policy and our targets to reduce our on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high-emitting sectors), which may result in our failure to achieve any of the expected benefits of our strategic priorities; evolving regulatory requirements and the development of new technologies, including artificial intelligence, affecting how we manage model risk; model limitations or failure, including, without limitation, the impact that high inflationary pressures and rising interest rates have had on the performance and usage of financial models, which may require us to hold additional capital, incur losses and/or use compensating controls, such as judgemental post-model adjustments, to address model limitations; changes to the judgements, estimates and assumptions we base our financial statements on; changes in our ability to meet the requirements of regulatory stress tests; a reduction in HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 3 Earnings Release 3Q24 on Form 6-K the credit ratings assigned to us or any of our subsidiaries, which could increase the cost or decrease the availability of our funding and affect our liquidity position and net interest margin; changes to the reliability and security of our data management, data privacy, information and technology infrastructure, including threats from cyber-attacks, which may impact our ability to service clients and may result in financial loss, business disruption and/or loss of customer services and data; the accuracy and effective use of data, including internal management information that may not have been independently verified; changes in insurance customer behaviour and insurance claim rates; our dependence on loan payments and dividends from subsidiaries to meet our obligations; changes in our reporting frameworks and accounting standards, which have had and may continue to have a material impact on the way we prepare our financial statements; our ability to successfully execute planned strategic acquisitions and disposals; our success in adequately integrating acquired businesses into our business, including the integration of SVB UK into our CMB business; changes in our ability to manage third-party, fraud, financial crime and reputational risks inherent in our operations; employee misconduct, which may result in regulatory sanctions and/or reputational or financial harm; changes in skill requirements, ways of working and talent shortages, which may affect our ability to recruit and retain senior management and diverse and skilled personnel; and changes in our ability to develop sustainable finance and ESG-related products consistent with the evolving expectations of our regulators, and our capacity to measure the environmental and social impacts from our financing activity (including as a result of data limitations and changes in methodologies), which may affect our ability to achieve our ESG ambitions, targets and commitments, including our net zero ambition, our targets to reduce on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high-emitting sectors and the positions set forth in our thermal coal phase-out policy and our energy policy, and increase the risk of greenwashing. Effective risk management depends on, among other things, our ability through stress testing and other techniques to prepare for events that cannot be captured by the statistical models it uses; our success in addressing operational, legal and regulatory, and litigation challenges; and other risks and uncertainties we identify in ‘Risk - Managing risk’ on page 50 of this Earnings Release 3Q24 on Form 6-K. Additional detailed information concerning important factors, including but not limited to ESG-related factors, that could cause actual results to differ materially from those anticipated or implied in any forward-looking statement in this Earnings Release 3Q24 on Form 6-K is available in our Annual Report and Accounts for the fiscal year ended 31 December 2023, which was filed with the SEC on Form 20-F on 22 February 2024. 4 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Contents 1 Group Chief Executive statement 27 – Global Banking and Markets – constant currency basis 1 Financial performance in 3Q24 30 – Corporate Centre – constant currency basis 2 Financial performance in 9M24 32 Supplementary financial information 2 Outlook 32 – Reported and constant currency results 3 Cautionary statement regarding forward-looking statements 33 – Global businesses 5 Business highlights 40 – Legal entities 7 Financial summary 46 Alternative performance measures 7 – Use of alternative performance measures 46 – Use of alternative performance measures 8 – Key financial measures: basis of preparation 46 – Alternative performance measure definitions 9 – Disposal groups and business acquisitions 50 Risk 11 – Key financial metrics 50 – Managing risk 12 – Summary consolidated income statement 51 – Credit risk 13 – Distribution of results by global business and legal entity 63 – Capital risk 14 – Income statement commentary 67 Additional information 19 – Summary consolidated balance sheet 67 – Dividends 20 – Balance sheet commentary 68 – Investor relations/media relations contacts 22 Global businesses 69 – Abbreviations 22 – Wealth and Personal Banking – constant currency basis 25 – Commercial Banking – constant currency basis Presentation to investors and analysts HSBC Holdings plc will be conducting a trading update conference call with analysts and investors today to coincide with the publication of this Earnings Release 3Q24 on Form 6-K. The call will take place at 07.45am GMT. Details of how to participate in the call and the live audio webcast can be found at www.hsbc.com/investors. About HSBC HSBC Holdings plc, the parent company of HSBC, is headquartered in London. With assets of $3.1tn at 30 September 2024, HSBC is one of the world’s largest banking and financial services organisations. Our strategy HSBC‘s purpose is ‘Opening up a world of opportunity‘. Our strategy supports our ambition of being the preferred international financial partner for our clients, centred around four key areas. – Focus – maintain leadership in scale markets, double-down on international connectivity, diversify our revenue and maintain cost discipline and reshape our portfolio; – Digitise – deliver seamless customer experience, ensure resilience and security, embrace disruptive technologies and partner with innovators, and automate and simplify at scale; – Energise – inspire leaders to drive performance and delivery, unlock our edge to enable success, deliver a unique and exceptional colleague experience and prepare our workforce for the future; – Transition – support our customers, embed net zero into the way we operate, partner for systemic change, become net zero in our own operations and supply chain by 2030, and our financed emissions by 2050. Business highlights We continue to target a mid-teens RoTE in 2024 and 2025, excluding the impact of notable items, while acknowledging the outlook for interest rates has changed, and been volatile, since our 1H24 results announcement in July. We remain focused on growth opportunities within our strategy that play to our strengths, while maintaining tight cost discipline and continuing to invest in growth and efficiency. Growth opportunities include further expanding our international businesses, diversification of our revenue, including building our wealth business, especially in Asia, continuing to grow in our home markets in Hong Kong and the UK, and also the diversification of our profit generation across the other markets in which we operate. We have continued to demonstrate strategic progress during 9M24. At 30 September 2024, wealth balances were $1.9tn, an increase of 15% compared with the same period last year. Within this we have attracted net new invested assets of $59bn in the first nine months of 2024, with $49bn booked in Asia. Revenue in Wealth was up $0.9bn or 16% on a constant currency basis, with an increase in Asia of 27%. There was a strong performance in our insurance business, which was up 28%, and growth in insurance manufacturing new business contractual service margin in WPB of $0.8bn, up 58% compared with 9M23. We grew mortgage lending balances by $5bn since 31 December 2023 on a constant currency basis, notably in HSBC UK. In addition, we generated revenue of $19.8bn from transaction banking during 9M24, which was broadly stable compared with 9M23. This reflected growth in Global Payments Solutions (‘GPS‘) in both CMB and GBM, across both NII and net fee income, which was broadly offset by lower revenue in Global Foreign Exchange. On 24 September 2024, the People’s Bank of China, National Financial Regulatory Administration and China Securities Regulatory Commission announced several policies aimed at promoting growth and economic development. These included monetary stimulus, property market support and capital market strengthening measures, as well as measures to recapitalise the largest commercial banks. These measures resulted in HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 5 Earnings Release 3Q24 on Form 6-K elevated volatility at the end of 3Q24, which resulted in an increase in client activity, notably in Wealth, Equities, and Global Foreign Exchange in Hong Kong. We continue to monitor the impact of these measures into the fourth quarter. We remain focused on maintaining tight cost discipline and generating cost savings that will help enable us to invest in technology to improve customer experience while also increasing efficiency and resilience. We also have an ambition to build a stronger performance culture, improving our colleague experience and preparing our workforce for the future. Finally, we also see commercial opportunities in helping to finance the new economy and in supporting the significant investment needs of our customers in the transition to net zero, as well as the importance of helping to mitigate the rising financial and wider societal risks posed by climate change. We continue to make progress on reshaping the Group for growth. So far in 2024, we have completed the sales of our retail banking operations in France, our banking business in Canada and our business in Russia. In addition, we announced the planned sales of our business in Argentina and our operations in Armenia, which we expect to complete in the fourth quarter of 2024. We also completed the acquisition of SilkRoad Property Partners Group in Singapore and Citi’s retail wealth management portfolio in mainland China. We have also announced divestments in our private banking business in Germany and our business in South Africa, and we have launched a strategic review of our business in Malta. The review is at an early stage and no decisions have been made. For further details of these transactions, see ‘Disposal groups and business acquisitions‘ on page 9 . On 22 October 2024, we announced that we are simplifying our organisational structure to accelerate delivery against our strategic priorities. Effective 1 January 2025, the Group will operate through four businesses: Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking. The Group’s functions will be realigned to support the four new businesses. Our strategic priorities remain unchanged. These changes are aimed at increasing focus on leadership and market share in the areas where we have clear competitive advantages, creating a simpler organisation with clarity of accountability and faster decision-making, and reducing the duplication of processes that are built into our current matrix structure. We expect to share further details of these changes at our 2024 annual results, expected to be announced on 19 February 2025. ESG update We have continued with our implementation plan to embed net zero into the way we support our customers, the way we operate as an organisation and how we partner externally in support of systemic change. We seek to harness our strengths and capabilities in the areas where we believe we can best support large-scale emissions reductions, transitioning industry, catalysing the new economy and decarbonising supply chains. We published our Net Zero Transition plan on 25 January 2024, and in accordance with the Transition Plan Taskforce guidance, we are performing our annual review in 4Q24. An update will be provided in our Annual Report and Accounts 2024 on Form 20-F. 6 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Financial summary Notes – Income statement comparisons, unless stated otherwise, are between the quarter ended 30 September 2024 and the quarter ended 30 September 2023. Balance sheet comparisons, unless otherwise stated, are between balances at 30 September 2024 and the corresponding balances at 31 December 2023. – The financial information on which this Earnings Release 3Q24 on Form 6-K is based is unaudited. It has been prepared in accordance with our material accounting policies as described on pages 368 to 381 of the Annual Report and Accounts 2023 on Form 20-F. Use of alternative performance measures Our reported results are prepared in accordance with IFRS Accounting Standards as detailed in our financial statements starting on page 356 of the Annual Report and Accounts 2023 on Form 20-F. To measure our performance, we supplement our IFRS Accounting Standards figures with non-IFRS Accounting Standards measures, which constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations. These measures include those derived from our reported results that eliminate factors that distort period-on-period comparisons. The ‘constant currency performance’ measure used in this Earnings Release 3Q24 on Form 6-K is described below. Definitions and calculations of other alternative performance measures are included in ‘Alternative performance measures’ on page 46 . All alternative performance measures are reconciled to the closest reported performance measure. Constant currency performance Constant currency performance is computed by adjusting reported results of comparative periods for the effects of foreign currency translation differences, which distort period-on-period comparisons. We consider constant currency performance to provide useful information for investors by aligning internal and external reporting, and reflecting how management assesses period-on-period performance. Notable items and material notable items We separately disclose ‘notable items‘, which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature. From 1H24, we now disclose ‘profit before tax excluding notable items’ and ‘revenue excluding notable items’. We have introduced these new measures due to the significant impact of notable items on the Group’s results. We consider profit before tax excluding notable items and revenue excluding notable items as useful information in understanding period-on-period performance. Certain notable items are classified as ‘material notable items’, which are a subset of notable items. Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement. The tables on pages 33 to 36 and pages 40 to 45 detail the effects of notable items on each of our global business segments and legal entities in 9M24, 9M23, 3Q24, 2Q24 and 3Q23. Impact of strategic transactions To aid the understanding of our results, we separately disclose the impact of strategic transactions classified as material notable items on the results of the Group and our global businesses. At 3Q24, strategic transactions classified as material notable items in current and comparative periods comprise the disposal of our retail banking operations in France, the disposal of our banking business in Canada, the planned sale of our business in Argentina and the acquisition of SVB UK. The impacts of strategic transactions include the gains or losses on classification to held for sale or on acquisition and all other related notable items. They also include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. This is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. We consider the monthly impacts of distorting income statement results when calculating the impact of strategic transactions. See page 38 for supplementary analysis of the impact of strategic transactions. Constant currency revenue and profit before tax excluding notable items We separately report ‘constant currency revenue excluding notable items‘ and ‘constant currency profit before tax excluding notable items‘, which exclude the impact of notable items and the impact of foreign exchange translation. We consider that these measures provide useful information to investors as they remove items that distort period-on-period comparisons. For a reconciliation of constant currency revenue excluding notable items and constant currency profit before tax excluding notable items to reported revenue and reported profit before tax respectively, see page 47 . HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 7 Earnings Release 3Q24 on Form 6-K Constant currency revenue and profit before tax excluding notable items and the impact of strategic transactions To aid the understanding of our results, we separately disclose ‘constant currency revenue excluding notable items and the impact of strategic transactions‘ and ‘constant currency profit before tax excluding notable items and the impact of strategic transactions‘. These measures exclude the impact of strategic transactions classified as material notable items from constant currency revenue and profit before tax excluding notable items. At 3Q24, strategic transactions classified as material notable items in current and comparative periods comprise the disposals of our retail banking operations in France and our banking business in Canada, the planned sale of our business in Argentina and the acquisition of SVB UK. The impacts quoted include the gains or losses on classification to held for sale or acquisition and all other related notable items. They also include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. This is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. We consider the monthly impacts of distorting income statement results when calculating the impact of strategic transactions. For a reconciliation of constant currency revenue excluding notable items and strategic transactions and constant currency profit before tax excluding notable items and strategic transactions to reported revenue and reported profit before tax respectively, see page 47 . Foreign currency translation differences Foreign currency translation differences reflect the movements of the US dollar against most major currencies during 2024. We exclude them to derive constant currency data, allowing us to assess balance sheet and income statement performance on a like-for-like basis and to better understand the underlying trends in the business. Foreign currency translation differences for 9M24 and 3Q24 are computed by retranslating into US dollars for non-US dollar branches, subsidiaries, joint ventures and associates: – the income statement for 9M23 at the average rate of exchange for 9M24; – the income statement for the quarterly periods at the average rate of exchange for 3Q24; – the closing prior period balance sheets at the prevailing rates of exchange on 30 September 2024. No adjustment has been made to the exchange rates used to translate foreign currency-denominated assets and liabilities into the functional currencies of any HSBC branches, subsidiaries, joint ventures or associates. The constant currency data of our operations in Argentina and Türkiye has not been adjusted further for the impacts of hyperinflation. When reference is made to foreign currency translation differences in tables or commentaries, comparative data reported in the functional currencies of HSBC’s operations has been translated at the appropriate exchange rates applied in the current period on the basis described above. Global business performance The Group Chief Executive, supported by the rest of the Group Executive Committee (‘GEC’), is considered to be the Chief Operating Decision Maker (‘CODM’) for the purposes of identifying the Group‘s reportable segments. The Group Chief Executive and the rest of the GEC review operating activity on a number of bases, including by global business and legal entities. Our global businesses – Wealth and Personal Banking, Commercial Banking and Global Banking and Markets – along with Corporate Centre – are our reportable segments under IFRS 8 ‘Operating Segments’. Global business results are assessed by the CODM on the basis of constant currency performance, which removes the effects of currency translation impacts from reported results. Therefore, we present these results on a constant currency basis. As required by IFRS 8, reconciliations of the constant currency results to the Group’s reported results are presented on page 32 . Supplementary reconciliations of constant currency to reported results by global business are presented on pages 33 to 36 for information purposes. Management view of revenue on a constant currency basis Our global business segment commentary includes tables that provide breakdowns of revenue on a constant currency basis by major product. These reflect the basis on which revenue performance of the businesses is assessed and managed. Key financial measures: basis of preparation Return on average tangible equity excluding notable items From 1 January 2024, we revised the adjustments made to our adjusted RoTE measure. Prior to this we adjusted RoTE for the impact of strategic transactions and the impairment of our investment in Bank of Communications Co., Limited (‘BoCom‘), whereas from 1 January 2024 we have excluded all notable items. This was intended to improve alignment with the treatment of notable items in our other income statement disclosures. RoTE excluding notable items has been re-presented for 3Q23 and 9M23 on the revised basis and we no longer disclose RoTE excluding strategic transactions and the impairment of BoCom. The calculation for RoTE excluding notable items adjusts the ‘profit attributable to ordinary shareholders, excluding goodwill and other intangible assets impairment‘ for the post-tax impact of notable items. It also adjusts the ‘average tangible equity‘ for the post-tax impact of notable items in each period, which remain as adjusting items for all relevant periods within that calendar year. For a reconciliation from return on equity to RoTE excluding notable items, see page 47 . We continue to target a RoTE excluding notable items in the mid-teens for both 2024 and 2025. We do not reconcile our forward RoTE guidance to the equivalent reported measure. 8 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Banking net interest income Banking NII adjusts our NII, primarily for the impact of funding trading and fair value activities reported in interest expense. It represents the Group’s banking revenue that is directly impacted by changes in interest rates. We use this measure to determine the deployment of our commercial surplus, and to help optimise our structural hedging and risk management actions. For more information on banking NII, see page 18 . T arget basis operating expenses Target basis operating expenses is computed by excluding the direct cost impact of our retail banking operations in France and Canada banking business disposals from the 2023 baseline. It is measured on a constant currency basis and excludes notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency, which we consider to be outside of our control. We consider target basis operating expenses to provide useful information to investors by quantifying and excluding the notable items that management considered when setting and assessing cost-related targets. For a reconciliation of reported operating expenses to target basis operating expenses, see page 49 . In 2024, we are targeting cost growth of approximately 5% compared with 2023 on a target basis. This target reflects our current business plan for 2024, and includes an increase in staff compensation, higher technology spend and investment for growth and efficiency, in part mitigated by cost savings from actions taken during 2023. We do not reconcile our forward target basis operating expenses guidance to reported operating expenses. Dividend payout ratio target basis Given our current returns trajectory, we are targeting a dividend payout ratio target basis of 50% for 2024. For the purposes of computing our dividend payout ratio target basis, we exclude from earnings per share material notable items and related impacts. Material notable items are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature, which are excluded from our dividend payout ratio calculation and our earnings per share measure, along with related impacts. Material notable items for the dividend payout ratio target basis comprise the impacts of the sales of our banking business in Canada and our retail banking operations in France, the gain following the acquisition of SVB UK, the impacts of the planned sale of our business in Argentina and the impairment of BoCom. We also exclude HSBC Bank Canada‘s financial results from the 30 June 2022 net asset reference date until completion, as the gain on sale was recognised through a combination of the consolidation of HSBC Bank Canada‘s results into the Group‘s results since this date, and the remaining gain on sale was recognised at completion, inclusive of the recycling of related reserves and fair value gains on related hedges. Following the completion of the sale of our banking business in Canada, the Board approved a special dividend of $0.21 per share, which was paid in June 2024, alongside the first interim dividend. For a reconciliation of basic earnings per share to basic earnings per share excluding material notable items and related impacts, see page 49 . We do not reconcile our forward dividend payout ratio target basis guidance to the reported dividend payout ratio. Disposal groups and business acquisitions France retail banking operations On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS (‘My Money Group’). The sale also included HSBC Continental Europe’s 100% ownership interest in HSBC SFH (France) and its 3% ownership interest in Crédit Logement. Upon completion and in accordance with the terms of the sale, HSBC Continental Europe received a €0.1bn ($0.1bn) profit participation interest in the ultimate holding company of My Money Group. The associated impacts on initial recognition of this stake at fair value were recognised as part of the pre-tax loss on disposal in 2023, upon the reclassification of the disposal group as held for sale. In accordance with the terms of the sale, HSBC Continental Europe retained a portfolio of €7.1bn ($7.9bn) at the time of sale, consisting of home and certain other loans, and the CCF brand, which it licensed to the buyer under a long-term licence agreement. Additionally, HSBC Continental Europe’s subsidiaries, HSBC Assurances Vie (France) and HSBC Global Asset Management (France), have entered into distribution agreements with the buyer. The customer lending balances and associated income statement impacts of the portfolio of retained loans, together with the profit participation interest and the licence agreement of the CCF brand, were reclassified from WPB to Corporate Centre, with effect from 1 January 2024. During the fourth quarter of 2024, we intend to begin actively marketing the retained portfolio for sale. As a result, we expect to reclassify the portfolio to a hold-to-collect-and-sell business model and measure it prospectively from the first quarter of 2025 at fair value through other comprehensive income, unless a sale is completed during the fourth quarter. On the reclassification date, we expect to recognise an estimated $1bn fair value pre-tax loss in other comprehensive income on the remeasurement of the financial instruments, equivalent to an estimated 10bps reduction in the Group’s CET1 ratio. The valuation of this portfolio of loans may be substantially different in the event of a sale due to entity and deal-specific factors, including funding costs and the value of customer relationships. Upon completion of a sale, the cumulative fair value changes recognised through other comprehensive income, which would reflect the terms of an agreed sale, would reclassify to the income statement. Canada banking business On 28 March 2024, HSBC Overseas Holdings (UK) Limited, a direct subsidiary of HSBC Holdings plc, completed the sale of HSBC Bank Canada to the Royal Bank of Canada. The completion of the transaction resulted in a gain on sale of $4.8bn inclusive of recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn in other reserves losses. The gain on sale also included $0.3bn in fair value gains recognised on the related foreign exchange hedges in the first quarter of 2024. There was no tax on the gain recognised at completion due to the substantial shareholding exemption rule in the UK. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 9 Earnings Release 3Q24 on Form 6-K Following the completion of this transaction, the Board approved a special dividend of $0.21 per share, which was paid in June 2024 alongside the first interim dividend of 2024. Argentina business On 9 April 2024, HSBC Latin America B.V. entered into a binding agreement to sell its business in Argentina to Grupo Financiero Galicia (‘Galicia‘). Galicia will acquire all of HSBC Argentina’s business covering banking, asset management and insurance, together with $100m of subordinated debt issued by HSBC Argentina and held by HSBC Latin America Holdings (UK) Limited for a base consideration of $550m. The consideration will be adjusted for the results of the business and fair value gains or losses on HSBC Argentina’s securities portfolios during the period between 31 December 2023 and closing. HSBC expects to receive the purchase consideration in a combination of cash and Galicia’s American Depositary Receipts (‘ADRs‘), with such ADRs representing less than a 10% economic interest in Galicia. The transaction is expected to be completed in the fourth quarter of 2024. At 31 March 2024, given the advanced stage of agreement on deal terms and that completion was expected in 12 months, our investment in HSBC Argentina met the criteria to be classified as held for sale in accordance with IFRS 5. At 30 September 2024, total assets of $6.8bn and total liabilities of $4.9bn were classified as held for sale, and we recognised a $1.2bn pre-tax loss in 9M24. There was no tax deduction on the loss recognised. At closing, expected in the fourth quarter of 2024, cumulative foreign currency translation reserves and other reserves will recycle to the income statement. At 30 September 2024, foreign currency translation reserve and other reserve losses stood at $5.1bn. Between signing and closing, the loss on sale will vary by changes in the net asset value of the disposed business and associated hyperinflation and foreign currency translation, and the fair value of consideration including price adjustments and migration costs. Other disposals On 30 May 2024, HSBC Europe BV, a wholly-owned subsidiary of HSBC Bank plc, completed the sale of its business in Russia – HSBC Bank (RR) (Limited Liability Company) – to Expobank. Foreign currency translation reserve losses of $0.1bn were recognised in the income statement upon completion. On 6 February 2024, following a strategic review of our operations in Armenia, HSBC Europe BV reached an agreement for the sale of HSBC Bank Armenia to Ardshinbank. This resulted in a loss on classification to held for sale of $0.1bn. The transaction is subject to regulatory approvals. As part of this transaction, all staff members of HSBC Armenia will transfer to Ardshinbank at completion, and the transfer will include all customer relationships held by HSBC Armenia at that time. The transaction is expected to complete in the fourth quarter of 2024. On 6 July 2024, The Hongkong and Shanghai Banking Corporation Limited (acting through its Mauritius branch) completed the sale of its Wealth and Personal Banking business in Mauritius to Absa Bank (Mauritius) Limited, a wholly-owned subsidiary of Absa Group Limited. The financial impact of the sale was not significant for the Group. On 23 September 2024, HSBC Continental Europe reached an agreement to sell its private banking business in Germany to BNP Paribas. This sale, which remains subject to governmental approvals and works council consultation, is expected to be completed in the second half of 2025. At 30 September 2024, total assets of $2.7bn and total liabilities of $2.7bn met the criteria to be classified as held for sale in accordance with IFRS 5. The sale is expected to generate an estimated pre-tax gain on disposal of $0.2bn, which will be recognised on completion, expected in the third quarter of 2025. On 30 September 2024, HSBC reached an agreement to sell its business in South Africa to local lender FirstRand Bank Ltd. The transaction is expected to be completed in the fourth quarter of 2025 and is subject to regulatory and government approvals. At closing, cumulative foreign currency translation reserves and other reserves will recycle to the income statement. At 30 September 2024, foreign currency translation reserve and other reserve losses stood at $0.2bn. In September 2024, HSBC launched a strategic review of its shareholding in HSBC Bank Malta p.l.c. The review is at an early stage and no decisions have been made. Business acquisitions In October 2023, HSBC Global Asset Management Singapore Limited, a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited, entered into an agreement to acquire 100% of the shares of Silkroad Property Partners Pte Ltd (‘Silkroad’) and for HSBC Global Asset Management Limited to acquire Silkroad’s affiliated General Partner entities. Silkroad is a Singapore headquartered Asia-Pacific-focused, real estate investment manager. The acquisition was completed on 31 January 2024. In October 2023, HSBC Bank (China) Company Limited, a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited, entered into an agreement to acquire Citibank China’s retail wealth management portfolio in mainland China. The portfolio comprises assets under management and deposits and the associated wealth customers. The acquisition was completed on 7 June 2024. 10 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Key financial metrics Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 Reported results Profit before tax ($m) 30,032 29,371 8,476 8,906 7,714 Profit after tax ($m) 24,414 24,337 6,749 6,828 6,266 Revenue ($m) 54,290 53,037 16,998 16,540 16,161 Cost efficiency ratio (%) 45.0 44.2 47.9 49.2 49.3 Net interest margin (%) 1.57 1.70 1.46 1.62 1.70 Basic earnings per share ($) 1.23 1.15 0.34 0.35 0.29 Diluted earnings per share ($) 1.22 1.14 0.34 0.34 0.29 Dividend per ordinary share (in respect of the period) ($) 1 0.30 0.30 0.10 0.10 0.10 Alternative performance measures Constant currency profit before tax ($m) 30,032 29,095 8,476 8,979 7,624 Constant currency revenue ($m) 54,290 52,389 16,998 16,656 15,887 Constant currency cost efficiency ratio (%) 45.0 44.0 47.9 49.3 49.2 Constant currency revenue excluding notable items ($m) 50,930 49,226 17,209 16,820 16,150 Constant currency profit before tax excluding notable items ($m) 26,799 26,051 8,732 9,176 7,935 Constant currency revenue excluding notable items and strategic transactions ($m) 50,752 48,004 17,209 16,819 15,591 Constant currency profit before tax excluding notable items and strategic transactions ($m) 26,709 25,637 8,732 9,177 7,701 Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers (%) 0.28 0.32 0.40 0.13 0.42 Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers, including held for sale (%) 0.28 0.30 0.40 0.13 0.39 Basic earnings per share excluding material notable items and related impacts ($) 1.02 0.97 0.34 0.35 0.27 Return on average ordinary shareholders’ equity (annualised) (%) 17.9 18.3 14.4 15.2 13.5 Return on average tangible equity (annualised) (%) 19.3 19.7 15.5 16.3 14.6 Return on average tangible equity excluding notable items (annualised) (%) 16.7 17.5 15.9 17.1 15.0 Target basis operating expenses ($m) 24,150 22,711 8,098 8,194 7,729 At 30 Sep 2024 30 Jun 2024 31 Dec 2023 Balance sheet Total assets ($m) 3,098,621 2,975,003 3,038,677 Net loans and advances to customers ($m) 968,653 938,257 938,535 Customer accounts ($m) 1,660,715 1,593,834 1,611,647 Average interest-earning assets, year to date ($m) 2,094,585 2,097,866 2,161,746 Loans and advances to customers as % of customer accounts (%) 58.3 58.9 58.2 Total shareholders’ equity ($m) 192,754 183,293 185,329 Tangible ordinary shareholders’ equity ($m) 161,880 153,109 155,710 Net asset value per ordinary share at period end ($) 9.66 8.97 8.82 Tangible net asset value per ordinary share at period end ($) 9.00 8.35 8.19 Capital, leverage and liquidity Common equity tier 1 capital ratio (%) 2,3 15.2 15.0 14.8 Risk-weighted assets ($m) 2,3 863,923 835,118 854,114 Total capital ratio (%) 2,3 20.8 20.6 20.0 Leverage ratio (%) 2,3 5.7 5.7 5.6 High-quality liquid assets (liquidity value) ($m) 3,4 649,199 646,052 647,505 Liquidity coverage ratio (%) 3,4,5 137 137 136 Share count Period end basic number of $0.50 ordinary shares outstanding (millions) 17,982 18,330 19,006 Period end basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares (millions) 18,119 18,456 19,135 Average basic number of $0.50 ordinary shares outstanding (millions) 18,493 18,666 19,478 For reconciliations of our reported results to a constant currency basis, including lists of notable items, see page 32 . Definitions and calculations of other alternative performance measures are included in ‘Alternative performance measures’ on page 46 . 1    The amount for the nine months ended 30 September 2024 excludes the special dividend of $0.21 per ordinary share arising from the proceeds of the sale of our banking business in Canada to Royal Bank of Canada. 2    Unless otherwise stated, regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation in force at the time. References to EU regulations and directives (including technical standards) should, as applicable, be read as references to the UK‘s version of such regulation or directive, as onshored into UK law under the European Union (Withdrawal) Act 2018, and as may be subsequently amended under UK law. 3    Regulatory numbers and ratios are as presented at the date of reporting. Small changes may exist between these numbers and ratios and those subsequently submitted in regulatory filings. Where differences are significant, we may restate in subsequent periods. 4    The liquidity coverage ratio is based on the average value of the preceding 12 months. 5    We enhanced our calculation processes during 1H24. As the Group liquidity coverage ratio is reported as a 12-month average, the benefit of these changes is being recognised incrementally over the year starting from 30 June 2024. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 11 Earnings Release 3Q24 on Form 6-K Summary consolidated income statement Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Net interest income 1 24,548 27,512 7,637 8,258 9,248 Net fee income 9,322 9,088 3,122 3,054 3,003 Net income from financial instruments held for trading or managed on a fair value basis 2 15,814 12,564 5,298 5,110 4,452 Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss 7,889 1,738 5,513 1,084 (2,566) Insurance finance expense (7,948) (1,703) (5,462) (1,159) 2,531 Insurance service result 1,001 696 339 356 172 Gain on acquisition 3 — 1,593 — — 86 Gain less impairment relating to sale of business operations 4 3,328 2,130 72 (161) — Other operating (expense)/income 336 (581) 479 (2) (765) Net operating income before change in expected credit losses and other credit impairment charges 5 54,290 53,037 16,998 16,540 16,161 Change in expected credit losses and other credit impairment charges (2,052) (2,416) (986) (346) (1,071) Net operating income 52,238 50,621 16,012 16,194 15,090 Total operating expenses excluding impairment of goodwill and other intangible assets (24,388) (23,720) (8,138) (8,100) (7,967) (Impairment)/reversal of impairment of goodwill and other intangible assets (51) 295 (5) (45) (1) Operating profit 27,799 27,196 7,869 8,049 7,122 Share of profit in associates and joint ventures 2,233 2,175 607 857 592 Profit before tax 30,032 29,371 8,476 8,906 7,714 Tax expense (5,618) (5,034) (1,727) (2,078) (1,448) Profit after tax 24,414 24,337 6,749 6,828 6,266 Attributable to: – ordinary shareholders of the parent company 22,720 22,585 6,134 6,403 5,619 – other equity holders 908 976 382 125 434 – non-controlling interests 786 776 233 300 213 Profit after tax 24,414 24,337 6,749 6,828 6,266 $ $ $ $ $ Basic earnings per share 1.23 1.15 0.34 0.35 0.29 Diluted earnings per share 1.22 1.14 0.34 0.34 0.29 Dividend per ordinary share (paid in the period) 0.51 0.43 0.10 0.10 0.10 % % % % % Return on average ordinary shareholders’ equity (annualised) 17.9 18.3 14.4 15.2 13.5 Return on average tangible equity (annualised) 19.3 19.7 15.5 16.3 14.6 Cost efficiency ratio 45.0 44.2 47.9 49.2 49.3 1    Includes a $283m loss in 3Q24 related to the early redemption of legacy securities. 2    Includes a $255m gain (9M23: $284m loss) on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 3    Gain recognised in respect of the acquisition of SVB UK. 4    For the nine months ending 30 September 2024, a gain of $4.6bn, inclusive of the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses but excluding the $255m gain on the foreign exchange hedging (see footnote 2 above), on the sale of our banking business in Canada, and an impairment loss of $1.2bn relating to the planned sale of our business in Argentina was recognised. 5    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 12 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Distribution of results by global business and legal entity Distribution of results by global business Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Constant currency revenue 1 Wealth and Personal Banking 2 21,723 22,678 7,411 7,162 6,584 Commercial Banking 16,284 17,378 5,388 5,406 5,292 Global Banking and Markets 13,154 12,154 4,412 4,333 3,833 Corporate Centre 2 3,129 179 (213) (245) 178 Total 54,290 52,389 16,998 16,656 15,887 Constant currency profit/(loss) before tax Wealth and Personal Banking 2 9,684 11,403 3,226 3,304 2,778 Commercial Banking 9,464 10,730 3,001 3,210 2,797 Global Banking and Markets 5,662 4,670 1,849 1,804 1,261 Corporate Centre 2 5,222 2,292 400 661 788 Total 30,032 29,095 8,476 8,979 7,624 1    Constant currency net operating income before change in expected credit losses and other credit impairment charges including the effects of foreign currency translation differences, also referred to as constant currency revenue. 2    On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS (‘My Money Group’). With effect from this date, we have prospectively reclassified the portfolio of retained loans, profit participation interest and licence agreement of the CCF brand from WPB to Corporate Centre. Distribution of results by legal entity Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Reported profit/(loss) before tax HSBC UK Bank plc 5,555 6,569 1,821 1,923 1,778 HSBC Bank plc 2,437 4,405 1,001 739 907 The Hongkong and Shanghai Banking Corporation Limited 16,005 15,000 5,112 5,436 4,083 HSBC Bank Middle East Limited 867 1,023 331 253 350 HSBC North America Holdings Inc. 446 886 23 170 185 HSBC Bank Canada 186 695 — — 220 Grupo Financiero HSBC, S.A. de C.V. 682 658 216 280 222 Other trading entities 1 1,477 1,740 443 644 458 – of which: other Middle East entities (including Oman, Türkiye, Egypt and Saudi Arabia) 629 542 218 197 120 – of which: Saudi Awwal Bank 464 391 147 172 118 Holding companies, shared service centres and intra-Group eliminations 2 2,377 (1,605) (471) (539) (489) Total 30,032 29,371 8,476 8,906 7,714 Constant currency profit/(loss) before tax HSBC UK Bank plc 5,555 6,766 1,821 1,980 1,827 HSBC Bank plc 2,437 4,465 1,001 755 926 The Hongkong and Shanghai Banking Corporation Limited 16,005 14,880 5,112 5,475 4,098 HSBC Bank Middle East Limited 867 1,024 331 254 351 HSBC North America Holdings Inc. 446 887 23 170 185 HSBC Bank Canada 186 688 — — 216 Grupo Financiero HSBC, S.A. de C.V. 682 662 216 255 200 Other trading entities 1 1,477 1,329 443 629 306 – of which: other Middle East entities (including Oman, Türkiye, Egypt and Saudi Arabia) 629 408 218 192 73 – of which: Saudi Awwal Bank 464 391 147 171 118 Holding companies, shared service centres and intra-Group eliminations 2 2,377 (1,606) (471) (539) (485) Total 30,032 29,095 8,476 8,979 7,624 1    Other trading entities includes the results of entities located in Oman (pre merger with Sohar International Bank SAOG in August 2023), Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. Supplementary analysis is provided on page 45 for a fuller picture of the Middle East, North Africa and Türkiye (‘MENAT‘) regional performance. 2    Includes a $4.8bn gain on disposal of our banking business in Canada, inclusive of a $0.3bn gain on the foreign exchange hedging of the sale proceeds, the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses. This is partly offset by a $1.2bn impairment recognised in relation to the planned sale of our business in Argentina. Tables showing constant currency profit before tax by global business and legal entity are presented to support the commentary on constant currency performance on pages 15 and 17 . The tables on pages 33 to 45 reconcile reported to constant currency results for each of our global business segments and legal entities. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 13 Earnings Release 3Q24 on Form 6-K Income statement commentary 3Q24 compared with 3Q23 – reported results Movement in reported profit compared with 3Q23 Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 16,998 16,161 837 5 (811) ECL (986) (1,071) 85 8 19 Operating expenses (8,143) (7,968) (175) (2) 338 Share of profit/(loss) from associates and JVs 607 592 15 3 — Profit before tax 8,476 7,714 762 10 (454) Tax expense (1,727) (1,448) (279) (19) Profit after tax 6,749 6,266 483 8 1    For details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Notable items Quarter ended 30 Sep 2024 30 Sep 2023 $m $m Revenue Disposals, acquisitions and related costs 72 310 Fair value movements on financial instruments 1 — — Disposal losses on Markets Treasury repositioning — (578) Early redemption of legacy securities (283) — Currency translation on revenue notable items — 5 Operating expenses Disposals, acquisitions and related costs (48) (79) Restructuring and other related costs 3 30 Currency translation on operating expenses notable items — — 1    Fair value movements on non-qualifying hedges in HSBC Holdings. Reported profit Reported profit before tax of $8.5bn was $0.8bn higher than in 3Q23. This primarily reflected an increase in revenue from a strong performance in Wealth in WPB and higher revenue in Global Foreign Exchange, Equities and Global Debt Markets in GBM, which mitigated a reduction in NII. Revenue also benefited from a net favourable impact from notable items. These included disposal losses in 3Q23 of $0.6bn relating to repositioning and risk management, partly offset by the adverse effects of a $0.2bn gain in 3Q23 on foreign exchange hedges relating to the disposal of our banking business in Canada, which did not recur. In 3Q24, these included a $0.3bn loss on the early redemption of legacy securities. In addition, revenue in 3Q24 included a loss of $0.1bn from Treasury repositioning and risk management. The rise in revenue was partly offset by higher reported operating expenses due to higher spend and investment in technology, as well as from inflationary pressures. Reported profit after tax of $6.7bn was $0.5bn higher than in 3Q23. Reported revenue Reported revenue of $17.0bn was $0.8bn or 5% higher than in 3Q23 reflecting higher wealth revenue in WPB, notably from a strong performance in life insurance, Global Private Banking and investment distribution, as well as revenue growth in Global Foreign Exchange, Equities and Global Debt Markets in GBM, as increased market volatility led to higher client activity. These factors were partly offset by a loss of $0.1bn in 3Q24 from Treasury repositioning and risk management, and the impact of our disposals in Canada and France. The increase in revenue also included the favourable impact from notable items described above. NII fell by $1.6bn compared with 3Q23 and included an adverse impact of foreign currency translation differences of $0.4bn. The reduction reflected the impact of deposit migration since 3Q23 and the loss on the early redemption of legacy securities in 3Q24 of $0.3bn. The fall in NII also included $0.7bn higher funding costs associated with the redeployment of our commercial surplus into the trading book, where the associated revenue is recognised in ‘net income on financial instruments held for trading or managed on a fair value basis‘. These reductions were in part mitigated by higher NII in Markets Treasury due to reinvestments in our portfolio at higher yields. Banking NII of $10.6bn fell by $0.9bn, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII. 14 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Reported ECL Reported ECL of $1.0bn were $0.1bn lower than in 3Q23, notably due to a lower level of stage 3 charges against exposures in the commercial real estate sector in mainland China in CMB and GBM, partly offset by an increase in ECL charges of $0.2bn in WPB. ECL in 3Q24 comprised charges in CMB and GBM of $0.5bn, including against exposures in the onshore Hong Kong commercial real estate ($0.1bn) and mainland China commercial real estate sectors ($0.1bn). In WPB, ECL included charges of $0.2bn in our legal entity in Mexico, which were broadly stable compared with 2Q24, primarily related to our unsecured lending book, reflecting portfolio growth. In addition, ECL in WPB included charges in HSBC UK and our main entity in Hong Kong. For further details of the calculation of ECL, including the measurement uncertainties and significant judgements applied to such calculations, the impact of the economic scenarios and management judgemental adjustments, see pages 53 to 59 . Reported operating expenses Reported operating expenses of $8.1bn were $0.2bn or 2% higher. This mainly reflected higher spend and investment in technology and the impacts of inflation, while the performance-related pay accrual was broadly stable. These increases were partly offset by continued cost discipline, reductions following the completion of disposals in Canada and France and a favourable impact from foreign currency translation differences of $0.1bn. Reported share of profit from associates and JVs Reported share of profit from associates and joint ventures of $0.6bn was $15m or 3% higher. This included a higher share of profit from Saudi Awwal Bank (‘SAB‘). Tax expense Tax in 3Q24 was a charge of $1.7bn, representing an effective tax rate of 20.4%. The effective tax rate for 3Q24 was increased by provisions for uncertain tax positions and a tax charge arising under the Global Minimum Tax regime. Tax in 3Q23 was a charge of $1.4bn, representing an effective tax rate of 18.8%. Third interim dividend for 2024 On 29 October 2024, the Board announced a third interim dividend for 2024 of $0.10 per ordinary share. For further details, see page 67 . 3Q24 compared with 3Q23 – constant currency basis Movement in profit before tax compared with 3Q23 – on a constant currency basis Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 16,998 15,887 1,111 7 (806) ECL (986) (1,038) 52 5 19 Operating expenses (8,143) (7,823) (320) (4) 336 Share of profit from associates and JVs 607 598 9 2 — Profit before tax 8,476 7,624 852 11 (451) 1    For details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Profit before tax of $8.5bn was $0.9bn higher than in 3Q23, on a constant currency basis, as growth in revenue was partly offset by higher operating expenses. Revenue increased by $1.1bn or 7% on a constant currency basis, and included a reduction of $0.8bn relating to the impact of strategic transactions. Revenue growth was driven by Wealth in WPB and in Global Foreign Exchange, Equities and Global Debt Markets in GBM. A reduction in NII reflected deposit migration, a loss on the early redemption of legacy securities in 3Q24, and higher funding costs associated with the redeployment of our commercial surplus into the trading book, where the related revenue is recognised in ’net income on financial instruments held for trading or managed on a fair value basis’. Banking NII fell by $0.5bn, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII. ECL charges of $1.0bn were $0.1bn lower on a constant currency basis, notably reflecting a reduction in charges relating to exposures in the commercial real estate sector in mainland China in CMB and GBM, partly offset by higher charges in WPB. ECL in 3Q24 included charges against exposures in the onshore Hong Kong commercial real estate sector of $0.1bn and in the mainland China commercial real estate sector of $0.1bn. In addition, WPB included charges in our legal entity in Mexico, which were broadly stable compared with 2Q24, primarily in our unsecured lending book, reflecting portfolio growth, and higher charges in HSBC UK and our main entity in Hong Kong. Operating expenses increased by $0.3bn or 4% on a constant currency basis, mainly driven by continued spend and investment in technology and the impacts of inflation, while the performance-related pay accrual was broadly stable. These increases were partly offset by continued cost discipline and reductions following the completion of disposals in Canada and France. Target basis operating expenses were $0.4bn or 5% higher than in 3Q23, while they fell by 1% compared with 2Q24, mainly due to a reduction in marketing costs and a lower performance-related pay accrual. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 15 Earnings Release 3Q24 on Form 6-K 9M24 compared with 9M23 – reported results Movement in reported profit compared with 9M23 Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 54,290 53,037 1,253 2 (901) ECL (2,052) (2,416) 364 15 52 Operating expenses (24,439) (23,425) (1,014) (4) 723 Share of profit from associates and JVs less impairment 2,233 2,175 58 3 — Profit before tax 30,032 29,371 661 2 (126) Tax expense (5,618) (5,034) (584) (12) Profit after tax 24,414 24,337 77 — 1    For details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Notable items Nine months ended 30 Sep 2024 30 Sep 2023 $m $m Revenue Disposals, acquisitions and related costs 3,643 3,631 Fair value movements on financial instruments 1 — 15 Disposal losses on Markets Treasury repositioning — (578) Early redemption of legacy securities (283) Currency translation on revenue notable items — 96 Operating expenses Disposals, acquisitions and related costs (149) (197) Restructuring and other related costs 22 77 Currency translation on operating expenses notable items — — 1    Fair value movements on non-qualifying hedges in HSBC Holdings. Reported profit Reported profit before tax of $30.0bn was $0.7bn or 2% higher reflecting revenue growth and lower ECL, partly offset by higher operating expenses. The growth in revenue included a net favourable impact of notable items. These primarily comprised the disposal of our banking business in Canada, recognising a gain of $4.8bn, inclusive of fair value gains on related hedging and recycling of related reserves. This was partly offset by a $1.2bn impairment following the classification of our business in Argentina as held for sale, the impact of a $2.1bn reversal in 9M23 of an impairment relating to the sale of our retail banking operations in France, and a $1.6bn gain recognised on the acquisition of SVB UK in 9M23. In addition, notable items included a $0.3bn loss in 9M24 related to the early redemption of legacy securities, while 9M23 included disposal losses of $0.6bn relating to Treasury repositioning and risk management. Reported profit after tax of $24.4bn was $0.1bn higher than in 9M23. Reported revenue Reported revenue of $54.3bn was $1.3bn or 2% higher, which included a net favourable impact of $0.3bn of notable items described above. The growth in revenue also reflected the impact of higher customer activity across our Wealth products in WPB, while in Equities and Securities Financing in GBM market volatility led to higher client activity. NII of $24.5bn fell by $3.0bn, and included the adverse impact of foreign currency translation differences of $1.0bn and the impact from the early redemption of legacy securities of $0.3bn. The reduction included the effects of our business disposals in Canada and France. The fall in NII also reflected the impact of deposit migration and an increase of $2.5bn in funding costs associated with the redeployment of our commercial surplus into the trading book, where the related revenue is recognised in ’net income on financial instruments held for trading or managed on a fair value basis’. These reductions were in part mitigated by higher NII in Markets Treasury due to reinvestments in our portfolio at higher yields. Banking NII of $32.8bn fell by $0.5bn or 2%, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII. Reported ECL Reported ECL charges of $2.1bn were $0.4bn lower. This included lower stage 3 charges, notably reflecting a reduction in charges relating to the commercial real estate sector in mainland China, which contributed to lower ECL in both CMB and GBM, and lower charges in CMB in HSBC UK. ECL in GBM also benefited from a release of stage 3 allowances in HSBC Bank plc related to a single client. These reductions were partly offset by higher charges in WPB, mainly in our legal entity in Mexico, reflecting growth in our unsecured lending portfolio and unemployment trends. 16 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Reported operating expenses Reported operating expenses of $24.4bn were $1.0bn or 4% higher, including favourable foreign currency translation differences between the periods of $0.4bn. The increase reflected higher spend and investment in technology, inflationary impacts and a higher performance-related pay accrual, which reflects a change in the phasing relative to 9M23, the non-recurrence of a $0.2bn impact from the reversal of historical asset impairments in 9M23, and higher bank levies in 9M24. These factors were partly offset by the impact of disposals in Canada and France, continued cost discipline and favourable foreign currency translation differences between the periods of $0.4bn. The number of employees expressed in full-time equivalent staff (‘FTE’) at 30 September 2024 was 215,180, a decrease of 5,681 compared with 31 December 2023, primarily reflecting the completion of the sale of our banking business in Canada and our retail banking operations in France. The number of contractors at 30 September 2024 was 4,453, a decrease of 223. Reported share of profit from associates and JVs Reported share of profit from associates and joint ventures of $2.2bn was $0.1bn higher. This included an increase in the share of profit from SAB. Tax expense Tax in 9M24 was a charge of $5.6bn, representing an effective tax rate of 18.7%. The effective tax rate for 9M24 was reduced by the non-taxable gain on the sale of our banking business in Canada and increased by the non-deductible loss recorded on the planned sale of our business in Argentina. Excluding these items, the effective rate for 9M24 was 21.1%. Tax in 9M23 was a charge of $5.0bn, representing an effective tax rate of 17.1%. The effective tax rate for 9M23 was reduced by 1.5 percentage points by the non-taxable provisional gain on the acquisition of SVB UK and by 1.4 percentage points by the release of provisions for uncertain tax positions. 9M24 compared with 9M23 – constant currency basis Movement in profit before tax compared with 9M23 – on a constant currency basis Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 54,290 52,389 1,901 4 (978) ECL (2,052) (2,355) 303 13 52 Operating expenses (24,439) (23,067) (1,372) (6) 717 Share of profit from associates and JVs less impairment 2,233 2,128 105 5 — Profit before tax 30,032 29,095 937 3 (209) 1    For details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Profit before tax of $30.0bn was $0.9bn higher than in 9M23 on a constant currency basis. Constant currency profit before tax excluding notable items of $26.8bn was $0.7bn or 3% higher. Revenue increased by $1.9bn or 4% on a constant currency basis, and included a $1.0bn adverse impact from strategic transactions. The growth in revenue reflected the impact of higher customer activity in our Wealth products in WPB, and in Equities and Securities Financing in GBM. NII fell due to business disposals, deposit migration and a loss on the early redemption of legacy securities in 3Q24. The reduction also included higher funding costs associated with the redeployment of our commercial surplus into the trading book, where the related revenue is recognised in ’net income on financial instruments held for trading or managed on a fair value basis’. On a constant currency basis, banking NII increased by $0.5bn or 1%. ECL charges were $0.3bn lower on a constant currency basis, primarily due to a reduction in stage 3 charges in relation to exposures in the commercial real estate sector in mainland China which contributed to lower ECL in both CMB and GBM, and lower charges in CMB in HSBC UK. These reductions were partly offset by higher charges in WPB reflecting growth in unsecured lending in our legal entity in Mexico and unemployment trends. Operating expenses increased by $1.4bn or 6% on a constant currency basis, primarily reflecting higher spend and investment in technology, inflationary impacts and a higher performance-related pay accrual, partly offset by continued cost discipline. Target basis operating expenses rose by $1.4bn or 6% compared with 9M23. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 17 Earnings Release 3Q24 on Form 6-K Net interest income Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Interest income 82,627 74,154 27,255 27,107 27,198 Interest expense (58,079) (46,642) (19,618) (18,849) (17,950) Net interest income 24,548 27,512 7,637 8,258 9,248 Average interest-earning assets 2,094,585 2,160,881 2,088,100 2,055,283 2,157,370 % % % % % Gross interest yield 1 5.27 4.59 5.19 5.30 5.00 Less: gross interest payable 1 (4.08) (3.35) (4.07) (4.05) (3.80) Net interest spread 2 1.19 1.24 1.12 1.25 1.20 Net interest margin 3 1.57 1.70 1.46 1.62 1.70 1    Gross interest yield is the average annualised interest rate earned on average interest-earning assets (‘AIEA’). Gross interest payable is the average annualised interest cost as a percentage of average interest-bearing liabilities (’AIBL’). 2    Net interest spread is the difference between the average annualised interest rate earned on AIEA, net of amortised premiums and loan fees, and the average annualised interest rate payable on average interest-bearing funds. 3    Net interest margin is net interest income expressed as an annualised percentage of AIEA. Net interest income NII for 9M24 was $24.5bn, a decrease of $3bn or 11% compared with 9M23. The reduction was mainly due to the deployment of commercial surplus into the trading book, for which the associated revenue is reported in ‘net income on financial instruments held for trading or managed on a fair value basis‘. The fall also reflected business disposals, a $0.3bn loss in 9M24 related to the early redemption of legacy securities, and a reduction of $0.2bn reflecting a reclassification made in 4Q23 of cash flow hedge revenue between NII and non-NII. These decreases were partly offset by growth in HSBC UK due to improved margins and the acquisition of SVB UK in 1Q23. Excluding the unfavourable impact of foreign currency translation differences, NII decreased by $2bn or 8%. NII for 3Q24 was $7.6bn, down 17% compared with 3Q23, and down 9% compared with 2Q24. The year-on-year decline was driven by a rise in the interest expense of average interest-bearing liabilities (‘AIBL’) due to higher interest rates. The decline against 2Q24 reflected a rise in the interest expense related to AIBL, which included a $0.3bn adverse impact from the early redemption of legacy securities. Net interest margin NIM for 9M24 of 1.57% was 13 basis points (‘bps’) lower compared with 9M23, reflecting a higher interest expense related to AIBL, including the impact of deposit migration, the increased deployment of our commercial surplus to the trading book, and the $0.3bn loss on the early redemption of legacy securities. These reductions were mitigated by an increase in gross asset yields due to higher interest rates. Excluding the adverse effect of foreign currency translation differences, NIM declined by 12bps. NIM for 3Q24 was 1.46%, 24bps lower year-on-year, and down 16bps compared with the previous quarter, primarily reflecting the impact of higher interest expense related to AIBL, the early redemption of legacy securities and the impact of deployment of our commercial surplus to the trading book. Interest income and interest expense Interest income for 9M24 of $82.6bn increased by $8.5bn compared with 9M23, primarily due to higher asset yields. Excluding the adverse effect of foreign currency translation differences of $1.7bn, interest income increased by $10.2bn. Interest income of $27.3bn in 3Q24 was up $0.1bn compared with both 3Q23 and 2Q24. Interest expense for 9M24 of $58.1bn increased by $11.4bn or 24% compared with 9M23. This was primarily driven by a rise in interest rates, deposit migration and the impact of the early redemption of legacy securities of $0.3bn. Excluding the favourable effects of foreign currency translation differences of $0.8bn, interest expense increased by $12.2bn. Interest expense of $19.6bn in 3Q24 was up $1.7bn compared with 3Q23, and $0.8bn higher compared with 2Q24. The increase compared with 3Q23 was mainly driven by deposit migration and the impact of the early redemption of legacy securities. The increase compared with 2Q24 was driven by an increase in AIBL and the impact of the early redemption of legacy securities. Banking net interest income Banking NII is an alternative performance measure, and is defined as Group NII after deducting: – the internal cost to fund trading and fair value net assets for which associated revenue is reported in ‘Net income from financial instruments held for trading or managed on a fair value basis’, also referred to as ‘trading and fair value income’. These funding costs reflect proxy overnight or term interest rates as applied by internal funds transfer pricing; – the funding costs of foreign exchange swaps in Markets Treasury, where an offsetting income or loss is recorded in trading and fair value income. These instruments are used to manage foreign currency deployment and funding in our entities; and – third-party NII in our insurance business. In our segmental disclosures, the funding costs of trading and fair value net assets are predominantly recorded in GBM in ‘net income from financial instruments held for trading or managed on a fair value basis’. On consolidation, this funding is eliminated in Corporate Centre, resulting in an increase in the funding costs reported in NII with an equivalent offsetting increase in ‘net income from financial instruments held for trading or managed on a fair value basis’ in this segment. In the consolidated Group results, the cost to fund these trading and fair value net assets is reported in NII. Banking NII was $32.8bn in 9M24. The funding costs associated with generating trading and fair value income were $8.6bn, an increase of $2.5bn compared with 9M23, primarily reflecting growth in net trading and fair value assets. Banking NII also deducts third-party NII related to 18 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K our insurance business, which was $0.3bn, broadly stable compared with 9M23. The movement in banking NII also included a $0.3bn loss in 9M24 related to the early redemption of legacy securities and a reduction of $0.2bn reflecting a reclassification made in 4Q23 of cash flow hedge revenue between NII and non-NII. The internally allocated funding to generate trading and fair value income was approximately $210bn at 30 September 2024, a rise of approximately $80bn since 30 September 2023, and an increase of approximately $2bn since 30 June 2024. This relates to trading, fair value and associated net asset balances predominantly in GBM. The increase reflected management decisions on the deployment of our commercial surplus. Banking net interest income Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $bn $bn $bn $bn $bn Net interest income 24.5 27.5 7.6 8.2 9.2 Banking book funding costs used to generate ‘net income from financial instruments held for trading or managed on a fair value basis’ 8.6 6.1 3.1 2.8 2.4 Third-party net interest income from insurance (0.3) (0.3) (0.1) (0.1) (0.1) Banking net interest income 32.8 33.3 10.6 10.9 11.5 – of which: The Hongkong and Shanghai Banking Corporation Limited 16.2 16.5 5.5 5.3 5.8 HSBC UK Bank plc 7.7 7.2 2.6 2.5 2.5 HSBC Bank plc 3.4 3.4 1.2 1.2 1.2 Summary consolidated balance sheet At 30 Sep 2024 30 Jun 2024 31 Dec 2023 $m $m $m Assets Cash and balances at central banks 252,310 277,112 285,868 Trading assets 349,904 331,307 289,159 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 126,372 117,014 110,643 Derivatives 232,439 219,269 229,714 Loans and advances to banks 117,514 102,057 112,902 Loans and advances to customers 968,653 938,257 938,535 Reverse repurchase agreements – non-trading 263,387 230,189 252,217 Financial investments 490,503 467,356 442,763 Assets held for sale 9,182 5,821 114,134 Other assets 288,357 286,621 262,742 Total assets 3,098,621 2,975,003 3,038,677 Liabilities Deposits by banks 89,337 82,435 73,163 Customer accounts 1,660,715 1,593,834 1,611,647 Repurchase agreements – non-trading 202,510 202,770 172,100 Trading liabilities 75,917 77,455 73,150 Financial liabilities designated at fair value 146,600 140,800 141,426 Derivatives 239,836 217,096 234,772 Debt securities in issue 103,414 98,158 93,917 Insurance contract liabilities 133,155 125,252 120,851 Liabilities of disposal groups held for sale 8,202 5,041 108,406 Other liabilities 238,910 241,748 216,635 Total liabilities 2,898,596 2,784,589 2,846,067 Equity Total shareholders’ equity 192,754 183,293 185,329 Non-controlling interests 7,271 7,121 7,281 Total equity 200,025 190,414 192,610 Total liabilities and equity 3,098,621 2,975,003 3,038,677 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 19 Earnings Release 3Q24 on Form 6-K Balance sheet commentary Balance sheet – 30 September 2024 compared with 30 June 2024 At 30 September 2024, our total assets of $3.1tn were $124bn higher on a reported basis and included favourable effects of foreign currency translation differences of $85bn. On a constant currency basis, total assets were $39bn higher, driven by an increase in reverse repurchase agreements, growth in loans and advances to banks, and higher financial investments balances. These were partly offset by lower cash and balances at central banks. Loans and advances to customers as a percentage of customer accounts were 58.3%, compared with 58.9% at 30 June 2024. Combined view of customer lending and customer deposits At 30 Sep 2024 30 Jun 2024 31 Dec 2023 $m $m $m Loans and advances to customers 968,653 938,257 938,535 Loans and advances to customers of disposal groups reported in ‘Assets held for sale’ 2,693 2,253 73,285 – banking business in Canada — — 56,129 – retail banking operations in France — — 16,902 – business in Argentina 1,913 1,559 – operations in Armenia 438 478 — – private banking business in Germany 326 — – other 15 216 254 Non-current assets held for sale 161 160 92 Combined customer lending 971,507 940,670 1,011,912 Currency translation — 28,254 13,722 Combined customer lending at constant currency 971,507 968,924 1,025,633 Customer accounts 1,660,715 1,593,834 1,611,647 Customer accounts reported in ‘Liabilities of disposal groups held for sale’ 7,140 4,037 85,950 – banking business in Canada — — 63,001 – retail banking operations in France — — 22,307 – business in Argentina 3,902 3,077 – operations in Armenia 440 457 — – private banking business in Germany 2,679 — – other 119 503 643 Combined customer deposits 1,667,855 1,597,871 1,697,597 Currency translation — 47,020 24,339 Combined customer deposits at constant currency 1,667,855 1,644,891 1,721,936 Loans and advances to customers Loans and advances to customers of $1.0tn were $30bn higher on a reported basis. This included favourable effects of foreign currency translation differences of $28bn, mainly in HSBC UK. Excluding foreign currency translation differences, customer lending balances increased by $2bn. The increase primarily reflected growth in WPB, notably in HSBC UK, and in CMB, partly offset by a reduction in GBM. In WPB, customer lending increased by $3bn. This was driven by continued growth in mortgage lending balances, notably in HSBC UK and our legal entity in the US. In CMB, customer lending increased by $3bn. This was driven by growth in term lending in HSBC UK, HSBC Bank plc and in our legal entities in the Middle East, Australia, Mexico, Singapore and India. This was partly offset by lower term lending balances in our legal entities in Hong Kong and the US. In GBM, lending decreased by $4bn, primarily reflecting lower term lending, notably in our main legal entities in Hong Kong, Singapore, the US and mainland China, as well as in HSBC Bank plc. This was partly offset by growth in overdraft balances in our main legal entity in Hong Kong, as well as in HSBC Bank plc and the US. We continue to expect mid-single digit annual percentage customer lending growth over the medium to long term. Customer accounts Customer accounts of $1.7tn increased by $67bn on a reported basis. This included favourable effects of foreign currency translation differences of $47bn, mainly in HSBC UK. Excluding foreign currency translation differences, customer accounts rose by $20bn. In WPB, customer accounts rose by $15bn, primarily in our legal entity in Hong Kong reflecting an increase in term deposits prior to interest rate reductions and short-term inflows into customer accounts amid equity market volatility. This increase was partly offset by a decrease in HSBC Bank plc, notably reflecting the reclassification of deposit balances associated with the planned sale of our private banking business in Germany. In CMB, the increase in customer accounts of $6bn reflected balance growth in our main legal entities in the US and Hong Kong. In addition, 3Q24 included short-term deposits in HSBC UK and our legal entity in the US, which were subsequently withdrawn in early October. In GBM, customer accounts remained broadly stable as a reduction in HSBC Bank plc reflecting the withdrawal of a short-term deposit held at 30 June 2024 was mostly offset by balance growth, notably in our legal entities in mainland China and the US. 20 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Financial investments As part of our interest rate hedging strategy, we hold a portfolio of debt instruments, reported within financial investments, which are classified as hold-to-collect-and-sell. As a result, the change in value of these instruments is recognised through ‘debt instruments at fair value through other comprehensive income’ in equity. At 30 September 2024, we had recognised a pre-tax cumulative unrealised loss reserve through other comprehensive income of $2.3bn related to these hold-to-collect-and-sell positions, excluding investments held in our insurance business. This reflected a $1.9bn pre-tax gain in 3Q24, inclusive of movements on related fair value hedges. During 3Q24, we recognised a loss of $0.1bn in the income statement in relation to Treasury repositioning and risk management actions in this portfolio. Overall, the Group is positively exposed to rising interest rates through NII, although there is an adverse impact on our capital base in the early stages of a rising interest rate environment due to the fair value of hold-to-collect-and-sell instruments. Over time, these adverse movements will unwind as the instruments reach maturity, although not all will necessarily be held to maturity, or as interest rates begin to fall. We also hold a portfolio of financial investments measured at amortised cost, which are classified as hold-to-collect. At 30 September 2024, the debt instruments within this portfolio, excluding those held in our insurance business, that are held to manage our interest rate exposure had a fair value broadly in line with their carrying value, representing a $2.2bn improvement during 3Q24. Bank of Communications Co., Limited On 24 September 2024, the People’s Bank of China, National Financial Regulatory Administration and China Securities Regulatory Commission announced several policies aimed at promoting growth and economic development. These included monetary stimulus, property market support and capital market strengthening measures, as well as measures to recapitalise the largest commercial banks. We are monitoring these developments and their potential impacts, including on the carrying value of our stake in the Bank of Communications Co., Limited (‘BoCom’). The range of possible outcomes, including the possible impact of the announced measures, remains broad and uncertain and could impact on our ongoing impairment assessments. These developments may have the potential to have a significant impact on the Group‘s reported earnings, but would be expected to have an immaterial impact on HSBC’s capital, capital ratios and its distribution capability. As at 30 September 2024, the carrying value of the investment was $22.7bn (30 June 2024: $22.1bn), and its fair value was $10.8bn (30 June 2024: $11.1bn), with no additional impairment recognised during the quarter. At 31 December 2023, we recognised an impairment of $3bn against the carrying value of our investment in BoCom, which had no material impact on HSBC’s capital, capital ratios and no impact on 2023 dividends or share buy-backs. Risk-weighted assets – 30 September 2024 compared with 30 June 2024 Risk-weighted assets (‘RWAs’) increased by $28.8bn during 3Q24. Excluding an increase of $14.8bn from foreign currency translation differences, RWAs rose by $14.0bn, largely as a result of: – an $11.8bn increase primarily driven by a rise in corporate exposures, notably in HSBC UK Bank plc, SAB and Asia, and higher sovereign exposures, mainly in Asia. Additionally, there was a rise in securities financing exposures in counterparty credit risk, notably in HSBC Bank plc; and – a $4.2bn increase mainly from unfavourable credit risk rating migrations in Asia, including in the Hong Kong commercial real estate sector, and the US. These increases were partly offset by: – a $1.1bn decline primarily due to a $2.2bn change to the financial institutions model and a $0.8bn decrease due to credit risk parameter refinements, offset by methodology changes notably in Asia, HSBC UK Bank plc and the US. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 21 Earnings Release 3Q24 on Form 6-K Global businesses Wealth and Personal Banking – constant currency basis Results – on a constant currency basis Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 21,723 22,678 (955) (4) (2,671) ECL (926) (692) (234) (34) 11 Operating expenses (11,156) (10,629) (527) (5) 574 Share of profit/(loss) from associates and JVs 43 46 (3) (7) — Profit before tax 9,684 11,403 (1,719) (15) (2,086) 1    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Management view of revenue Nine months ended 30 Sep 2024 30 Sep 2023 Variance 9M24 vs. 9M23 of which strategic transactions 4 $m $m $m % $m Wealth 6,696 5,772 924 16 (153) – investment distribution 2,198 1,955 243 12 (116) – Global Private Banking 1,996 1,729 267 15 — net interest income 895 885 10 1 — non-interest income 1,101 844 257 30 — – life insurance 1,474 1,150 324 28 — – asset management 1,028 938 90 10 (37) Personal Banking 14,559 15,362 (803) (5) (496) – net interest income 13,521 14,400 (879) (6) (426) – non-interest income 1,038 962 76 8 (70) Other 1 468 1,544 (1,076) (70) (2,022) – of which: impairment (loss)/reversal relating to the sale of our retail banking operations in France 55 2,058 (2,003) (97) (2,003) Net operating income 2 21,723 22,678 (955) (4) (2,671) RoTE (annualised) 3 (%) 30.4 37.3 1    ‘Other’ includes Markets Treasury, HSBC Holdings interest expense and hyperinflation. It also includes the distribution and manufacturing (where applicable) of retail and credit protection insurance, disposal gains and other non-product-specific income. 2    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 3    RoTE (annualised) in 9M23 included a 6.6 percentage point favourable impact from the reversal of the impairment losses relating to the sale of our retail banking operations in France. 4    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Notable items Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Sep 2023 $m $m $m $m Revenue Disposals, acquisitions and related costs 55 2,034 — — Disposal losses on Markets Treasury repositioning — (253) — (253) Currency translation on revenue notable items — 21 — (3) Operating expenses Disposals, acquisitions and related costs — (26) — (3) Restructuring and other related costs 5 16 1 16 Currency translation on operating expenses notable items — — — — 22 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 9M24 compared with 9M23 Profit before tax of $9.7bn was $1.7bn lower than in 9M23 on a constant currency basis. The reduction was due to the non-recurrence of a $2.1bn reversal in 9M23 of an impairment relating to the sale of our retail banking operations in France, although it was subsequently reinstated in 4Q23 and the sale completed on 1 January 2024. In addition, the decrease reflected a $0.2bn reduction due to the sale of our banking business in Canada, which completed in 1Q24. NII was stable compared with 9M23, while fee income increased by 10%. Operating expenses grew by $0.5bn and there was an increase in ECL of $0.2bn. Revenue of $21.7bn was $1.0bn or 4% lower on a constant currency basis. This included the impact of a reversal of an impairment relating to the sale of our retail banking operations in France included within ‘Other‘. Wealth performed strongly, up $0.9bn, as we continued to execute on our strategy. This included double-digit percentage growth in life insurance, Global Private Banking, investment distribution and asset management. This was partly offset by a reduction in Personal Banking NII of $0.9bn, due to the impact of the disposals in France and Canada mentioned above and margin compression due to lower interest rates, partly offset by balance sheet and non-NII growth. In Wealth, revenue of $6.7bn was up $0.9bn or 16%. – Global Private Banking revenue was $0.3bn or 15% higher, driven by a strong performance in brokerage and trading in our entities in Asia. – Investment distribution revenue grew by $0.2bn, or 12%, driven by higher sales of mutual funds, structured products and bonds due to our continued investment in Wealth and improved market sentiment, notably in our entities in Asia. – Asset management revenue was $0.1bn or 10% higher, driven by an increase in assets under management due to inflows and positive market movements. This was partly offset by a reduction in revenue due to the sale of our banking business in Canada. – Life insurance revenue was $0.3bn or 28% higher. The growth included an increase in earnings from contractual service margin (‘CSM’) release, largely due to continued growth in the CSM balance. The year-on-year increase in revenue also included the impact of corrections to historical valuation estimates in 9M23. Insurance manufacturing new business CSM of $2.1bn was 58% higher than in 9M23, mainly in our legal entities in Hong Kong. In Personal Banking, revenue of $14.6bn was down $0.8bn or 5%. – Net interest income was $0.9bn or 6% lower due to the impact of the sales in France and Canada and narrower margins. Compared with 9M23, lending balances fell by $14bn due to the sale of our retail banking operations in France, which was a $25bn reduction with $8bn retained in Corporate Centre. Mortgage lending balances rose in HSBC UK and our legal entity in the US. Unsecured lending balances increased, notably in HSBC UK and our legal entities in Asia. Deposit balances fell by $2bn, mainly due to the sale of our retail banking operations in France (down $24bn), partly offset by growth in our main legal entities in Hong Kong and mainland China. Other revenue decreased by $1.1bn, mainly due to the non-recurrence of a $2.1bn reversal in 9M23 of an impairment relating to the sale of our retail banking operations in France. This was partly offset by a $0.6bn increase in revenue allocated from Markets Treasury, the non-recurrence of a loss on sale of our business in New Zealand in 9M23 of $0.1bn and higher interest income earned on own capital. ECL were $0.9bn, an increase of $0.2bn compared with 9M23 on a constant currency basis, reflecting higher charges in our legal entity in Mexico, mainly in our unsecured portfolio, due to portfolio growth and unemployment trends. Operating expenses of $11.2bn were 5% higher on a constant currency basis, reflecting continued investments in Wealth in Asia, higher spend and investment in technology, a higher performance-related pay accrual, and from the impact of inflation. These were partly offset by continued cost discipline and the impact of the disposals in France and Canada. 3Q24 compared with 3Q23 Results – on a constant currency basis Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 7,411 6,584 827 13 (283) ECL (450) (208) (242) >(100) 6 Operating expenses (3,750) (3,609) (141) (4) 212 Share of profit/(loss) from associates and JVs 15 11 4 36 — Profit before tax 3,226 2,778 448 16 (65) 1    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 23 Earnings Release 3Q24 on Form 6-K Management view of revenue Quarter ended 30 Sep 2024 30 Sep 2023 Variance 3Q24 vs. 3Q23 of which strategic transactions 3 $m $m $m % $m Wealth 2,360 1,882 478 25 (72) – investment distribution 762 681 81 12 (53) – Global Private Banking 669 581 88 15 — net interest income 297 299 (2) (1) — non-interest income 372 282 90 32 — – life insurance 562 299 263 88 — – asset management 367 321 46 14 (19) Personal Banking 4,870 5,201 (331) (6) (238) – net interest income 4,519 4,892 (373) (8) (210) – non-interest income 351 309 42 14 (28) Other 1 181 (499) 680 >100 27 – of which: impairment (loss)/reversal relating to the sale of our retail banking operations in France — — — Net operating income 2 7,411 6,584 827 13 (283) 1    ‘Other’ includes Markets Treasury, HSBC Holdings interest expense and hyperinflation. It also includes the distribution and manufacturing (where applicable) of retail and credit protection insurance, disposal gains and other non-product-specific income. 2    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 3    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Profit before tax of $3.2bn was $0.4bn higher than in 3Q23 on a constant currency basis, primarily reflecting a strong revenue performance, up $0.8bn on a constant currency basis. This included the adverse impact of strategic transactions of $0.3bn. In Wealth, revenue increased by 25%, with double-digit growth in all products. This was partly offset by a decrease in Personal Banking income of $0.3bn, mainly due to the $0.2bn impact of the disposals in France and Canada. ECL of $0.5bn were $0.2bn higher compared with 3Q23 on a constant currency basis, mainly driven by releases due to improvements in macroeconomic scenarios in 3Q23, primarily in HSBC UK, and portfolio growth in our legal entities in Mexico and Hong Kong. Operating expenses of $3.8bn were $0.1bn or 4% higher on a constant currency basis, mainly due to continued investment in Wealth in Asia, higher spend and investment in technology, and inflationary pressures, which were in part mitigated by continued cost discipline and the impact of the disposals in France and Canada. 24 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Commercial Banking – constant currency basis Results – on a constant currency basis Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 16,284 17,378 (1,094) (6) (1,932) ECL (1,041) (1,356) 315 23 47 Operating expenses (5,780) (5,291) (489) (9) 103 Share of profit/(loss) from associates and JVs 1 (1) 2 >100 — Profit before tax 9,464 10,730 (1,266) (12) (1,782) 1    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Management view of revenue Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2023 of which strategic transactions 5 $m $m $m % $m Global Trade Solutions 1,479 1,501 (22) (1) (24) Credit and Lending 3,957 4,005 (48) (1) (158) Global Payments Solutions 8,962 8,988 (26) — (115) GBM products, Insurance and Investments, and Other 1 1,886 2,884 (998) (35) (1,635) – of which: share of revenue from Markets and Securities Services and Banking products 1,014 977 37 4 – of which: gain on the acquisition of Silicon Valley Bank UK Limited — 1,661 (1,661) (100) (1,661) Net operating income 2 16,284 17,378 (1,094) (6) (1,932) – of which: transaction banking 3 11,177 11,223 (46) — RoTE (annualised) 4 (%) 21.1 25.8 1    Includes a gain on the acquisition of SVB UK and CMB‘s share of revenue from the sale of Markets and Securities Services (‘MSS‘) and Banking products to CMB customers. GBM‘s share of revenue from the sale of these products to CMB customers is included within the corresponding lines of the GBM management view of revenue. Also includes allocated revenue from Markets Treasury, HSBC Holdings interest expense and hyperinflation. 2    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 3    Transaction banking comprises Global Trade Solutions (‘GTS‘), GPS and CMB’s share of Global Foreign Exchange (shown within ‘share of revenue from Markets and Securities Services and Banking products’). 4    RoTE (annualised) in 9M23 included a 4.3 percentage point favourable impact from the provisional gain on the acquisition of SVB UK. 5    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Notable items Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Sep 2023 $m $m $m $m Revenue Disposals, acquisitions and related costs — 1,593 — 86 Disposal losses on Markets Treasury repositioning — (190) — (190) Currency translation on revenue notable items — 65 — — Operating expenses Disposals, acquisitions and related costs 2 (30) — (15) Restructuring and other related costs 3 30 — 1 Currency translation on operating expenses notable items — — — — 9M24 compared with 9M23 Profit before tax of $9.5bn was $1.3bn lower than in 9M23 on a constant currency basis. This was largely due to a reduction in revenue following the non-recurrence of a $1.7bn gain recognised in 9M23 on the acquisition of SVB UK, the impact of the disposal of our banking business in Canada, as well as higher operating expenses. The reduction in profit before tax was partly offset by lower ECL. Revenue of $16.3bn was $1.1bn or 6% lower on a constant currency basis. This was primarily due to the non-recurrence of a $1.7bn gain recognised in 9M23 on the acquisition of SVB UK. It also included an adverse impact of $0.3bn from strategic transactions, notably in relation to the disposal of our banking business in Canada. These were partly offset by an increase in NII due to the higher interest rate environment, growth in transaction banking fee income and higher revenue from currency volatility in Argentina. – In GTS, revenue was down $22m or 1%, mainly due to the impact of the disposal of our banking business in Canada, as well as the impacts of the softer trade cycle, which notably resulted in lower revenue in our legal entity in Hong Kong. This was partly offset by growth in transaction banking fee income. – In Credit and Lending, revenue decreased by $48m or 1%, due to the impact of the disposal of our banking business in Canada and lower balances reflecting muted demand from customers, notably in our legal entities in Asia. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 25 Earnings Release 3Q24 on Form 6-K – In GPS, revenue was down $26m or 0.3%, reflecting the impact of the disposal of our banking business in Canada, and a decrease in our main legal entities in Asia driven by lower margins. This was partly offset by a 1% increase in fee income resulting from business initiatives, repricing and transaction growth, particularly in international payments. There was also higher revenue in our entity in Argentina due to currency volatility. – In GBM products, Insurance and Investments, and Other, revenue decreased by $1.0bn, largely due to the non-recurrence of a $1.7bn gain recognised in 9M23 on the acquisition of SVB UK. These adverse impacts were partly offset by higher revenue from Markets Treasury and interest income on own capital and higher GBM collaboration revenue. ECL charges of $1.0bn were $0.3bn lower than in 9M23 on a constant currency basis. The charge in 9M24 reflected lower charges in our legal entities in Asia and the UK, and lower charges related to the commercial real estate sector in mainland China. These reductions were partly offset by new stage 3 charges in our legal entity in the Middle East. Operating expenses of $5.8bn were $0.5bn or 9% higher than in 9M23 on a constant currency basis. The increase reflected currency volatility in Argentina, incremental costs in IVB following the acquisition of SVB UK, higher spend and investment in technology, and inflationary impacts. These increases were in part mitigated by continued cost discipline and the impact of the sale of our banking business in Canada. 3Q24 compared with 3Q23 Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 5,388 5,292 96 2 (311) ECL (468) (662) 194 29 14 Operating expenses (1,919) (1,833) (86) (5) 88 Share of profit/(loss) from associates and JVs — — — — — Profit before tax 3,001 2,797 204 7 (209) 1    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Management view of revenue Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 4 $m $m $m % $m Global Trade Solutions 509 505 4 1 (13) Credit and Lending 1,306 1,311 (5) — (117) Global Payments Solutions 2,946 3,131 (185) (6) (83) GBM products, Insurance and Investments, and Other 1 627 345 282 82 (98) – of which: share of revenue from Markets and Securities Services and Banking products 338 323 15 5 – of which: gain on the acquisition of Silicon Valley Bank UK Limited — 89 (89) (100) (89) Net operating income 2 5,388 5,292 96 2 (311) – of which: transaction banking 3 3,710 3,881 (171) (4) 1    Includes a gain on the acquisition of SVB UK and CMB‘s share of revenue from the sale of MSS and Banking products to CMB customers. GBM‘s share of revenue from the sale of these products to CMB customers is included within the corresponding lines of the GBM management view of revenue. Also includes allocated revenue from Markets Treasury, HSBC Holdings interest expense and hyperinflation. 2    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 3    Transaction banking comprises GTS, GPS and CMB’s share of Global Foreign Exchange (shown within ‘share of revenue from Markets and Securities Services and Banking products’). 4    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Profit before tax of $3.0bn was $0.2bn or 7% higher than in 3Q23 on a constant currency basis, primarily due to lower ECL charges relating to the commercial real estate sector in mainland China. Revenue increased by $0.1bn on a constant currency basis, mainly driven by growth in transaction banking fees, an increase in Markets Treasury income and from currency volatility in Argentina. This was partly offset by a reduction in revenue due to the sale of our banking business in Canada and lower GPS revenue reflecting lower margins. Operating expenses were $0.1bn higher on a constant currency basis, mainly driven by higher spend and investment in technology, currency volatility in Argentina and inflationary impacts, partly offset by continued cost discipline and the impact of the sale of our banking business in Canada. 26 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Global Banking and Markets – constant currency basis Results – on a constant currency basis Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 13,154 12,154 1,000 8 (105) ECL (58) (304) 246 81 (6) Operating expenses (7,434) (7,180) (254) (4) 47 Share of profit/(loss) from associates and JVs — — — — — Profit before tax 5,662 4,670 992 21 (64) 1    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Management view of revenue Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2023 of which strategic transactions 6 $m $m $m % $m Markets and Securities Services 7,272 6,762 510 8 (36) – Securities Services 1,700 1,748 (48) (3) — – Global Debt Markets 813 750 63 8 (7) – Global Foreign Exchange 3,028 3,076 (48) (2) (25) – Equities 718 404 314 78 (1) – Securities Financing 1,047 816 231 28 (3) – Credit and funding valuation adjustments (34) (32) (2) (6) (1) Banking 6,471 6,374 97 2 (82) – Global Trade Solutions 522 496 26 5 (8) – Global Payments Solutions 3,364 3,287 77 2 (47) – Credit and Lending 1,354 1,489 (135) (9) (11) – Investment Banking 1 819 817 2 — (5) – Other 2 412 285 127 45 (11) GBM Other (589) (982) 393 40 13 – Principal Investments 67 14 53 >100 — – Other 3 (656) (996) 340 34 13 Net operating income 4 13,154 12,154 1,000 8 (105) – of which: transaction banking 5 8,614 8,607 7 — RoTE (annualised) (%) 13.8 12.9 1    From 1 January 2024, we renamed ‘Capital Markets and Advisory‘ as ‘Investment Banking‘ to better reflect our purpose and offering. 2    Includes portfolio management, earnings on capital and other capital allocations on all Banking products. 3    Includes notional tax credits and Markets Treasury, HSBC Holdings interest expense and hyperinflation. 4    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 5    Transaction banking comprises Securities Services, Global Foreign Exchange (net of revenue shared with CMB), GTS and GPS. 6    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Notable items Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Sep 2023 $m $m $m $m Revenue Disposals, acquisitions and related costs (14) — — — Disposal losses on Markets Treasury repositioning — (135) — (135) Currency translation on revenue notable items — (2) — (2) Operating expenses Disposals, acquisitions and related costs — 3 — — Restructuring and other related costs 3 4 — 4 Currency translation on operating expenses notable items — — — — HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 27 Earnings Release 3Q24 on Form 6-K 9M24 compared with 9M23 Profit before tax of $5.7bn was $1.0bn or 21% higher than in 9M23 on a constant currency basis. This was driven by an increase in revenue of $1.0bn or 8%, notably from strong performances in Equities and Securities Financing. In addition, ECL charges decreased compared with 9M23, while operating expenses increased by $0.3bn. Revenue of $13.2bn was $1.0bn or 8% higher on a constant currency basis. In Markets and Securities Services (‘MSS‘), revenue increased by $0.5bn or 8%. – In Securities Services, revenue decreased by $48m or 3% from divestments within our fund administration business. – In Global Debt Markets, revenue rose by $63m or 8%, driven by emerging markets credit and structured financing as well as higher volumes in primary markets. – In Global Foreign Exchange, revenue fell by $48m or 2% compared with a strong performance in 9M23, due to continued market volatility offset by margin compression. – In Equities, revenue increased by $0.3bn or 78% reflecting increased client activity supported by market conditions versus a comparatively weak 9M23. – In Securities Financing, revenue rose by $0.2bn or 28%, driven by onboarding of US Prime clients and strong demand in institutional financing. In Banking, revenue increased by $0.1bn or 2%. – In GPS, revenue increased by $0.1bn or 2%, driven by wider spreads and fee performance resulting from business initiatives, repricing and transaction growth. – In Credit and Lending, revenue decreased by $0.1bn or 9% reflecting continued muted client demand. In GBM Other, revenue increased by $0.4bn or 40% reflecting higher Markets Treasury revenue and valuation gains in Principal Investments. ECL of $0.1bn in 9M24 decreased by $0.2bn compared with charges of $0.3bn in 9M23 on a constant currency basis. The 9M24 period included a release related to a single client. Operating expenses of $7.4bn increased by $0.3bn or 4% on a constant currency basis, due to the impact of inflation and higher spend and investment in technology, partly mitigated by continued cost discipline. 3Q24 compared with 3Q23 Results – on a constant currency basis Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue 4,412 3,833 579 15 (54) ECL (47) (168) 121 72 (1) Operating expenses (2,516) (2,404) (112) (5) 23 Share of profit/(loss) from associates and JVs — — — — — Profit before tax 1,849 1,261 588 47 (32) 1    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . 28 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Management view of revenue Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 6 $m $m $m % $m Markets and Securities Services 2,448 2,134 314 15 (20) – Securities Services 564 605 (41) (7) — – Global Debt Markets 259 159 100 63 (5) – Global Foreign Exchange 1,060 909 151 17 (13) – Equities 272 169 103 61 (1) – Securities Financing 316 304 12 4 (2) – Credit and funding valuation adjustments (23) (12) (11) (92) — Banking 2,171 2,144 27 1 (43) – Global Trade Solutions 175 162 13 8 (4) – Global Payments Solutions 1,118 1,114 4 — (24) – Credit and Lending 466 508 (42) (8) (5) – Investment Banking 1 275 256 19 7 (2) – Other 2 137 104 33 32 (8) GBM Other (207) (445) 238 53 9 – Principal Investments 38 1 37 >100 — – Other 3 (245) (446) 201 45 9 Net operating income 4 4,412 3,833 579 15 (54) – of which: transaction banking 5 2,917 2,790 127 5 1    From 1 January 2024, we renamed ‘Capital Markets and Advisory‘ as ‘Investment Banking‘ to better reflect our purpose and offering. 2    Includes portfolio management, earnings on capital and other capital allocations on all Banking products. 3    Includes notional tax credits and Markets Treasury, HSBC Holdings interest expense and hyperinflation. 4    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 5    Transaction banking comprises Securities Services, Global Foreign Exchange (net of revenue shared with CMB), GTS and GPS. 6    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Profit before tax of $1.8bn was $0.6bn or 47% higher than in 3Q23 on a constant currency basis. Revenue was $0.6bn or 15% higher on a constant currency basis, mainly from growth in Global Foreign Exchange as client-driven transactions remained elevated across Cash FX and Emerging Markets Rates. Global Debt Markets also increased, from strong primary issuances driving client flow across developed and emerging markets, as well as higher revenue from secondary trading, and Equities revenue grew due to higher client activity in Asia wealth products. In addition, there was higher revenue allocated from Markets Treasury. These were partly offset by a decrease in Credit and Lending due to repayments as clients accessed attractive capital markets financing. ECL of $0.1bn were 72% lower than in 3Q23 on a constant currency basis. Operating expenses were $0.1bn or 5% higher on a constant currency basis, due to the impact of inflation and higher spend and investment in technology, partly offset by continued cost discipline. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 29 Earnings Release 3Q24 on Form 6-K Corporate Centre – constant currency basis Results – on a constant currency basis Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2024 of which strategic transactions 1 $m $m $m % $m Revenue 3,129 179 2,950 >100 3,731 ECL (27) (3) (24) >(100) — Operating expenses (69) 33 (102) >(100) (7) Share of profit from associates and JVs less impairment 2,189 2,083 106 5 — Profit before tax 5,222 2,292 2,930 >100 3,723 1    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Management view of revenue Nine months ended Variance 9M24 vs. 9M23 30 Sep 2024 30 Sep 2023 of which strategic transactions 6 $m $m $m % $m Central Treasury 1 42 97 (55) (57) — Legacy portfolios 23 (3) 26 >100 — Other 2,3 3,064 85 2,979 >100 3,731 – of which: gain on the sale of our banking business in Canada and associated hedges 4 4,795 (74) 4,869 >100 4,869 – of which: impairment loss relating to the planned sale of our business in Argentina (1,151) — (1,151) (100) (1,151) Net operating income 5 3,129 179 2,950 >100 3,731 RoTE (annualised) (%) 14.4 7.3 1    Central Treasury comprises valuation differences on issued long-term debt and associated swaps and fair value movements on financial instruments. 2    Other comprises gains and losses on certain planned disposals, funding charges on property and technology assets, the results of the retained retail loan portfolio in France, revaluation gains and losses on investment properties and property disposals, as well as consolidation adjustments and other revenue items not allocated to global businesses. 3    Revenue from Markets Treasury, HSBC Holdings net interest expense and hyperinflation are allocated out to the global businesses, to align them better with their revenue and expense. The total Markets Treasury revenue component of this allocation for 9M24 was $1,199m (9M23: $(184)m). 9M24 included a loss of $0.1bn from Treasury repositioning and risk management actions. 4    Includes fair value gains/(losses) on the foreign exchange hedging of the proceeds of the sale and the recycling of reserves. 5    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 6    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Notable items Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Sep 2023 $m $m $m $m Revenue Disposals, acquisitions and related costs 1 3,602 4 72 224 Fair value movements on financial instruments 2 — 15 — — Early redemption of legacy securities (283) (283) Currency translation on revenue notable items — 12 — 10 Operating expenses Disposals, acquisitions and related costs (151) (144) (48) (61) Restructuring and other related costs 11 27 2 9 Currency translation on operating expenses notable items — — — — 1    Includes fair value movements on the foreign exchange hedging of the proceeds of the sale of our banking business in Canada and recycling of reserves and the loss on classification to held for sale of our banking business in Argentina. 2    Fair value movements on non-qualifying hedges in HSBC Holdings. 30 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 9M24 compared with 9M23 Profit before tax of $5.2bn was $2.9bn higher than in 9M23 on a constant currency basis, primarily reflecting the impact of certain acquisitions and disposals, including the gain on the sale of our banking business in Canada and an impairment relating to the planned disposal of our business in Argentina. Revenue of $3.1bn was $3.0bn higher on a constant currency basis, primarily due to the impact of notable items. In 9M24, these included a $4.8bn gain on the sale of our banking business in Canada, inclusive of fair value gains on related hedging and recycling of related reserves. These were partly offset by a $1.2bn impairment recognised following the classification of our business in Argentina as held for sale, and a loss of $0.1bn related to the recycling of reserves following the completion of the sale of our business in Russia. In addition, 9M24 also included a $0.3bn loss on the early redemption of legacy securities. In 9M23, notable items included a favourable $0.1bn impact following the reversal of an impairment related to the sale of our retail banking operations in France. The increase in revenue was partly offset by adverse fair value movements on financial instruments in Central Treasury and structural hedges, a reduction following the transfer of the retained French retail portfolio from WPB, revaluation losses on investment properties in Hong Kong and an impairment of $0.1bn following the classification of our operations in Armenia to held for sale. Operating expenses increased by $0.1bn on a constant currency basis. This included the impact of levies, as well as restructuring and other related costs. Share of profit from associates and joint ventures of $2.2bn increased by $0.1bn or 5% on a constant currency basis, which included an increase in share of profit from SAB. 3Q24 compared with 3Q23 Results – on a constant currency basis Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 1 $m $m $m % $m Revenue (213) 178 (391) >(100) (159) ECL (21) — (21) — — Operating expenses 42 23 19 83 13 Share of profit/(loss) from associates and JVs less impairment 592 587 5 1 — Profit before tax 400 788 (388) (49) (145) 1    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Management view of revenue Quarter ended Variance 3Q24 vs. 3Q23 30 Sep 2024 30 Sep 2023 of which strategic transactions 6 $m $m $m % $m Central Treasury 1 68 17 51 >100 — Legacy portfolios 9 8 1 13 — Other 2,3 (290) 153 (443) >(100) (159) – of which: gain on the sale of our banking business in Canada and associated hedges 4 — 214 (214) (100) (214) – of which: impairment loss relating to the planned sale of our business in Argentina 31 — 31 >100 31 Net operating income 5 (213) 178 (391) >(100) (159) 1    Central Treasury comprises valuation differences on issued long-term debt and associated swaps and fair value movements on financial instruments. 2    Other comprises gains and losses on certain planned disposals, funding charges on property and technology assets, the results of the retained retail loan portfolio in France, revaluation gains and losses on investment properties and property disposals, as well as consolidation adjustments and other revenue items not allocated to global businesses. 3    Revenue from Markets Treasury, HSBC Holdings net interest expense and hyperinflation are allocated out to the global businesses, to align them better with their revenue and expense. The total Markets Treasury revenue component of this allocation for 3Q24 was $313m (3Q23: $(546)m). 3Q24 included a loss of $0.1bn from Treasury repositioning and risk management actions. 4    Includes fair value gains/(losses) on the foreign exchange hedging of the proceeds of the sale and the recycling of reserves. 5    ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 6    Impact of strategic transactions classified as material notable items. For further details, see ‘Strategic transactions supplementary analysis‘ on page 38 . Profit before tax of $0.4bn was $0.4bn or 49% lower than in 3Q23 on a constant currency basis, primarily due to a reduction in revenue. This was mainly due to a $0.3bn loss on the early redemption of legacy securities, as well as the non-recurrence of fair value gains of $0.2bn in 3Q23 relating to the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. Lower revenue also reflected a reduction following the transfer of the retained France retail portfolio from WPB. The reduction in revenue was partly offset by favourable fair value movements on structural hedges, the reduction in the impairment related to the planned sale of our business in Argentina and the non-recurrence of losses following the merger of HSBC Bank Oman with Sohar International. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 31 Earnings Release 3Q24 on Form 6-K Supplementary financial information Reported and constant currency results Reported and constant currency results 1 Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Revenue 2 Reported 54,290 53,037 16,998 16,540 16,161 Currency translation (648) 116 (274) Constant currency 54,290 52,389 16,998 16,656 15,887 Change in expected credit losses and other credit impairment charges Reported (2,052) (2,416) (986) (346) (1,071) Currency translation 61 20 33 Constant currency (2,052) (2,355) (986) (326) (1,038) Operating expenses Reported (24,439) (23,425) (8,143) (8,145) (7,968) Currency translation 358 (69) 145 Constant currency (24,439) (23,067) (8,143) (8,214) (7,823) Share of profit in associates and joint ventures Reported 2,233 2,175 607 857 592 Currency translation (47) 6 6 Constant currency 2,233 2,128 607 863 598 Profit before tax Reported 30,032 29,371 8,476 8,906 7,714 Currency translation (276) 73 (90) Constant currency 30,032 29,095 8,476 8,979 7,624 Profit after tax Reported 24,414 24,337 6,749 6,828 6,266 Currency translation (131) 53 (16) Constant currency 24,414 24,206 6,749 6,881 6,250 Loans and advances to customers (net) Reported 968,653 935,750 968,653 938,257 935,750 Currency translation 39,391 28,254 39,391 Constant currency 968,653 975,141 968,653 966,511 975,141 Customer accounts Reported 1,660,715 1,563,127 1,660,715 1,593,834 1,563,127 Currency translation 61,945 47,020 61,945 Constant currency 1,660,715 1,625,072 1,660,715 1,640,854 1,625,072 1    In the current period, constant currency results are equal to reported as there is no currency translation. 2    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 32 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Notable items Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1,2,3,4 3,643 3,631 72 (161) 310 Fair value movements on financial instruments 5 — 15 — — — Disposal losses on Markets Treasury repositioning — (578) — — (578) Early redemption of legacy securities (283) — (283) — — Operating expenses Disposals, acquisitions and related costs (149) (197) (48) (38) (79) Restructuring and other related costs 6 22 77 3 6 30 Tax Tax (charge)/credit on notable items 94 (374) 81 6 127 Uncertain tax positions — 427 — — — 1    Includes the impacts of the sale of our retail banking operations in France. 2    Includes a gain of $1.6bn recognised in respect of the acquisition of SVB UK. 3    Includes a $4.8bn gain on disposal of our banking business in Canada, inclusive of a $0.3bn gain on the foreign exchange hedging of the sale proceeds, the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses. This is partly offset by a $1.2bn impairment recognised in relation to the planned sale of our business in Argentina. 4    Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 5    Fair value movements on non-qualifying hedges in HSBC Holdings. 6    Relates to reversals of restructuring provisions recognised during 2022. Global businesses Supplementary analysis of constant currency results and notable items by global business Global business results - on a constant currency basis 1 Nine months ended 30 Sep 2024 Wealth and Personal Banking 2 Commercial Banking Global Banking and Markets Corporate Centre 2 Total $m $m $m $m $m Revenue 3 21,723 16,284 13,154 3,129 54,290 ECL (926) (1,041) (58) (27) (2,052) Operating expenses (11,156) (5,780) (7,434) (69) (24,439) Share of profit in associates and joint ventures 43 1 — 2,189 2,233 Profit before tax 9,684 9,464 5,662 5,222 30,032 Loans and advances to customers (net) 463,324 322,090 175,439 7,800 968,653 Customer accounts 830,785 487,484 342,072 374 1,660,715 1    In the current period, constant currency results are equal to reported, as there is no currency translation. 2    On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS (‘My Money Group’). With effect from this date, we have prospectively reclassified the portfolio of retained loans, profit participation interest and licence agreement of the CCF brand from WPB to Corporate Centre. 3    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Notable items Nine months ended 30 Sep 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 55 — (14) 3,602 3,643 Early redemption of legacy securities — — — (283) (283) Operating expenses Disposals, acquisitions and related costs — 2 — (151) (149) Restructuring and other related costs 2 5 3 3 11 22 1    Includes a $4.8bn gain on disposal of our banking business in Canada, inclusive of a $0.3bn gain on the foreign exchange hedging of the sale proceeds, the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses. This is partly offset by a $1.2bn impairment recognised in relation to the planned sale of our business in Argentina. 2    Relates to reversals of restructuring provisions recognised during 2022. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 33 Earnings Release 3Q24 on Form 6-K Global business results - on a constant currency basis (continued) Nine months ended 30 Sep 2023 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue 1 Reported 22,919 17,640 12,388 90 53,037 Currency translation (241) (262) (234) 89 (648) Constant currency 22,678 17,378 12,154 179 52,389 ECL Reported (738) (1,372) (302) (4) (2,416) Currency translation 46 16 (2) 1 61 Constant currency (692) (1,356) (304) (3) (2,355) Operating expenses Reported (10,858) (5,480) (7,182) 95 (23,425) Currency translation 229 189 2 (62) 358 Constant currency (10,629) (5,291) (7,180) 33 (23,067) Share of profit/(loss) in associates and joint ventures Reported 46 (1) — 2,130 2,175 Currency translation — — — (47) (47) Constant currency 46 (1) — 2,083 2,128 Profit before tax Reported 11,369 10,787 4,904 2,311 29,371 Currency translation 34 (57) (234) (19) (276) Constant currency 11,403 10,730 4,670 2,292 29,095 Loans and advances to customers (net) Reported 455,354 307,048 173,064 284 935,750 Currency translation 21,973 11,183 6,225 10 39,391 Constant currency 477,327 318,231 179,289 294 975,141 Customer accounts Reported 792,928 459,945 309,785 469 1,563,127 Currency translation 29,913 17,348 14,650 34 61,945 Constant currency 822,841 477,293 324,435 503 1,625,072 1    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Notable items (continued) Nine months ended 30 Sep 2023 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1,2,3 2,034 1,593 — 4 3,631 Fair value movements on financial instruments 4 — — — 15 15 Disposal losses on Markets Treasury repositioning (253) (190) (135) — (578) Operating expenses Disposals, acquisitions and related costs (26) (30) 3 (144) (197) Restructuring and other related costs 5 16 30 4 27 77 1    Includes the reversal of a $2.1bn impairment loss relating to the sale of our retail banking operations in France. 2    Includes the gain of $1.6bn recognised in respect of the acquisition of SVB UK. 3    Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 4    Fair value movements on non-qualifying hedges in HSBC Holdings. 5    Relates to reversals of restructuring provisions recognised during 2022. 34 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Global business results - on a constant currency basis (continued) 1 Quarter ended 30 Sep 2024 Wealth and Personal Banking 2 Commercial Banking Global Banking and Markets Corporate Centre 2 Total $m $m $m $m $m Revenue 3 7,411 5,388 4,412 (213) 16,998 ECL (450) (468) (47) (21) (986) Operating expenses (3,750) (1,919) (2,516) 42 (8,143) Share of profit in associates and joint ventures 15 — — 592 607 Profit before tax 3,226 3,001 1,849 400 8,476 Loans and advances to customers (net) 463,324 322,090 175,439 7,800 968,653 Customer accounts 830,785 487,484 342,072 374 1,660,715 1    In the current period, constant currency results are equal to reported as there is no currency translation. 2    On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS (‘My Money Group’). With effect from this date, we have prospectively reclassified the portfolio of retained loans, profit participation interest and licence agreement of the CCF brand from WPB to Corporate Centre. 3    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Notable items (continued) Quarter ended 30 Sep 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue Disposals, acquisitions and related costs — — — 72 72 Early redemption of legacy securities — — — (283) (283) Operating expenses Disposals, acquisitions and related costs — — — (48) (48) Restructuring and other related costs 1 1 — — 2 3 1    Relates to reversals of restructuring provisions recognised during 2022. Global business results - on a constant currency basis (continued) Quarter ended 30 Jun 2024 Wealth and Personal Banking 2 Commercial Banking Global Banking and Markets Corporate Centre 2 Total $m $m $m $m $m Revenue 1 Reported 7,148 5,364 4,287 (259) 16,540 Currency translation 14 42 46 14 116 Constant currency 7,162 5,406 4,333 (245) 16,656 ECL Reported (175) (193) 22 — (346) Currency translation 21 (4) 3 — 20 Constant currency (154) (197) 25 — (326) Operating expenses Reported (3,711) (1,989) (2,521) 76 (8,145) Currency translation (8) (10) (33) (18) (69) Constant currency (3,719) (1,999) (2,554) 58 (8,214) Share of profit in associates and joint ventures Reported 15 1 — 841 857 Currency translation — (1) — 7 6 Constant currency 15 — — 848 863 Profit before tax Reported 3,277 3,183 1,788 658 8,906 Currency translation 27 27 16 3 73 Constant currency 3,304 3,210 1,804 661 8,979 Loans and advances to customers (net) Reported 445,882 310,356 174,376 7,643 938,257 Currency translation 14,279 8,838 4,824 313 28,254 Constant currency 460,161 319,194 179,200 7,956 966,511 Customer accounts Reported 794,807 467,362 331,269 396 1,593,834 Currency translation 21,334 13,740 11,929 17 47,020 Constant currency 816,141 481,102 343,198 413 1,640,854 1    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 2    On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS (‘My Money Group’). With effect from this date, we have prospectively reclassified the portfolio of retained loans, profit participation interest and licence agreement of the CCF brand from WPB to Corporate Centre. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 35 Earnings Release 3Q24 on Form 6-K Notable items (continued) Quarter ended 30 Jun 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue Disposals, acquisitions and related costs 2 — (14) (149) (161) Operating expenses Disposals, acquisitions and related costs 1 3 — (42) (38) Restructuring and other related costs 1 2 2 1 1 6 1    Relates to reversals of restructuring provisions recognised during 2022. Global business results - on a constant currency basis (continued) Quarter ended 30 Sep 2023 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue 1 Reported 6,719 5,424 3,887 131 16,161 Currency translation (135) (132) (54) 47 (274) Constant currency 6,584 5,292 3,833 178 15,887 ECL Reported (236) (668) (166) (1) (1,071) Currency translation 28 6 (2) 1 33 Constant currency (208) (662) (168) — (1,038) Operating expenses Reported (3,717) (1,908) (2,397) 54 (7,968) Currency translation 108 75 (7) (31) 145 Constant currency (3,609) (1,833) (2,404) 23 (7,823) Share of profit in associates and joint ventures Reported 11 — — 581 592 Currency translation — — — 6 6 Constant currency 11 — — 587 598 Profit before tax Reported 2,777 2,848 1,324 765 7,714 Currency translation 1 (51) (63) 23 (90) Constant currency 2,778 2,797 1,261 788 7,624 Loans and advances to customers (net) Reported 455,354 307,048 173,064 284 935,750 Currency translation 21,973 11,183 6,225 10 39,391 Constant currency 477,327 318,231 179,289 294 975,141 Customer accounts Reported 792,928 459,945 309,785 469 1,563,127 Currency translation 29,913 17,348 14,650 34 61,945 Constant currency 822,841 477,293 324,435 503 1,625,072 1    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Notable items (continued) Quarter ended 30 Sep 2023 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 — 86 — 224 310 Disposal losses on Markets Treasury repositioning (253) (190) (135) — (578) Operating expenses Disposals, acquisitions and related costs (3) (15) — (61) (79) Restructuring and other related costs 2 16 1 4 9 30 1    Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 2 Relates to reversals of restructuring provisions recognised during 2022. 36 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Reconciliation of reported risk-weighted assets to constant currency risk-weighted assets The following table reconciles reported and constant currency RWAs. Reconciliation of reported risk-weighted assets to constant currency risk-weighted assets At 30 Sep 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $bn $bn $bn $bn $bn Risk-weighted assets Reported 191.7 348.6 232.2 91.4 863.9 Constant currency 191.7 348.6 232.2 91.4 863.9 At 30 Jun 2024 Risk-weighted assets Reported 182.5 335.7 225.1 91.8 835.1 Currency translation 3.6 8.4 4.0 0.9 16.9 Constant currency 186.1 344.1 229.1 92.7 852.0 At 31 Mar 2024 Risk-weighted assets Reported 182.2 337.8 222.7 89.9 832.6 Currency translation 2.2 5.9 3.4 0.8 12.3 Constant currency 184.4 343.7 226.1 90.7 844.9 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 37 Earnings Release 3Q24 on Form 6-K Strategic transactions supplementary analysis The following table presents the selected impacts of strategic transactions to the Group and our global business segments. These comprise the strategic transactions where the financial impacts of the acquisition or disposal have qualified for material notable item treatment in our results. Material notable items are a subset of notable items and categorisation is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement. At 9M24, the disclosure includes the impacts from the disposals of our retail banking operations in France and our banking business in Canada, the planned sale of our business in Argentina and the acquisition of SVB UK. The impacts quoted include those arising on the classification to held for sale, on disposal or on acquisition, and all other related notable items. Once a transaction has completed, the impact will also include the operating income statement results of each business, which are not classified as notable items, in any period for which there are no results in the comparative period. We consider the monthly impact of distorting income statement results when calculating the impact of strategic transactions. Constant currency results Nine months ended 30 Sep 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue 54 179 — 3,752 3,985 ECL — (3) — — (3) Operating expenses (7) (76) — (151) (234) Share of profit in associates and joint ventures — — — — — Profit before tax 47 100 — 3,601 3,748 – HSBC Innovation Banking 1 100 — 100 – Retail banking operations in France 47 (2) 45 – Banking business in Canada 4,772 4,772 – Business in Argentina (1,169) (1,169) of which: notable items Revenue 55 — — 3,752 3,807 Profit before tax 54 3 — 3,601 3,658 of which: distorting impact of operating results between periods Revenue (1) 179 — — 178 Profit/(loss) before tax (7) 97 — — 90 Nine months ended 30 Sep 2023 Revenue 2,725 2,111 105 22 4,963 ECL (11) (50) 6 — (55) Operating expenses (581) (179) (47) (144) (951) Share of profit in associates and joint ventures — — — — — Profit/(loss) before tax 2,133 1,882 64 (122) 3,957 – HSBC Innovation Banking 1 1,604 — 1,604 – Retail banking operations in France 1,968 33 2,001 – Banking business in Canada 165 278 64 (155) 352 – Business in Argentina — of which: notable items Revenue 2,058 1,661 — 22 3,741 Profit before tax 2,031 1,634 — (122) 3,543 of which: distorting impact of operating results between periods Revenue 667 450 105 — 1,222 Profit before tax 102 248 64 — 414 1    Includes the impact of our acquisition of SVB UK, which in June 2023 changed its legal entity name to HSBC Innovation Bank Limited. 38 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Constant currency results Quarter ended 30 Sep 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue — — — 73 73 ECL — — — — — Operating expenses — — — (48) (48) Share of profit in associates and joint ventures — — — — — Profit before tax — — — 25 25 – HSBC Innovation Banking 1 — — — – Retail banking operations in France — 2 2 – Banking business in Canada (1) (1) – Business in Argentina 24 24 of which: notable items Revenue — — — 73 73 Profit before tax — — — 25 25 of which: distorting impact of operating results between periods Revenue — — — — — Profit/(loss) before tax — — — — — Quarter ended 30 Jun 2024 Revenue 3 — — (6) (3) ECL — — — — — Operating expenses (1) 3 — (42) (40) Share of profit in associates and joint ventures — — — — — Profit/(loss) before tax 2 3 — (48) (43) – HSBC Innovation Banking 1 3 — 3 – Retail banking operations in France 2 (3) (1) – Banking business in Canada 9 9 – Business in Argentina (55) (55) of which: notable items Revenue 2 — — (6) (4) Profit/(loss) before tax 3 3 — (48) (42) of which: distorting impact of operating results between periods Revenue 1 — — — 1 Profit/(loss) before tax (1) — — — (1) Quarter ended 30 Sep 2023 Revenue 283 311 54 231 879 ECL (6) (14) 1 — (19) Operating expenses (212) (88) (23) (61) (384) Share of profit in associates and joint ventures — — — — — Profit before tax 65 209 32 170 476 – HSBC Innovation Banking 1 74 — 74 – Retail banking operations in France (12) (21) (33) – Banking business in Canada 77 135 32 191 435 – Business in Argentina — of which: notable items Revenue — 89 — 231 320 Profit before tax (2) 74 — 170 242 of which: distorting impact of operating results between periods Revenue 283 222 54 — 559 Profit before tax 67 135 32 — 234 1    Includes the impact of our acquisition of SVB UK, which in June 2023 changed its legal entity name to HSBC Innovation Bank Limited. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 39 Earnings Release 3Q24 on Form 6-K Legal entities Supplementary analysis of constant currency results and notable items by legal entity Legal entity results - on a constant currency basis 1 Nine months ended 30 Sep 2024 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 2 Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 3 9,489 7,169 25,729 1,882 3,036 462 2,744 2,561 1,218 54,290 ECL (235) 63 (991) (134) (52) (40) (599) (71) 7 (2,052) Operating expenses (3,699) (4,814) (10,470) (881) (2,538) (236) (1,475) (1,480) 1,154 (24,439) Share of profit/(loss) in associates and joint ventures — 19 1,737 — — — 12 467 (2) 2,233 Profit before tax 5,555 2,437 16,005 867 446 186 682 1,477 2,377 30,032 Loans and advances to customers (net) 289,424 112,275 460,717 20,697 56,382 — 24,412 4,745 1 968,653 Customer accounts 357,874 298,583 835,925 33,543 98,379 — 26,655 9,731 25 1,660,715 1    In the current period, constant currency results are equal to reported, as there is no currency translation. 2    Other trading entities includes the results of entities located in Türkiye, Egypt and Saudi Arabia (including our share of the results of SAB) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on Group reported profit before tax of $1,093m. Supplementary analysis is provided on page 45 to give a fuller picture of the MENAT regional performance. 3    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Notable items Nine months ended 30 Sep 2024 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 — (128) — — — — — (6) 3,777 3,643 Early redemption of legacy securities — — — — — — — — (283) (283) Operating expenses Disposals, acquisitions and related costs 3 (5) — — (21) (36) — (31) (59) (149) Restructuring and other related costs 2 5 11 — 2 — — — — 4 22 1    Includes a $4.8bn gain on disposal of our banking business in Canada, inclusive of a $0.3bn gain on the foreign exchange hedging of the sale proceeds, the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses. This is partly offset by a $1.2bn impairment recognised in relation to the planned sale of our business in Argentina. 2    Relates to reversals of restructuring provisions recognised during 2022. 40 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Legal entity results - on a constant currency basis (continued) Nine months ended 30 Sep 2023 HSBC UK Bank Plc HSBC Bank Plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 1 Holding companies, shared service centres and intra-group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 2 Reported 10,397 9,146 24,253 1,836 3,136 1,501 2,427 3,288 (2,947) 53,037 Currency translation 290 129 (124) 1 1 (17) 8 (1,008) 72 (648) Constant currency 10,687 9,275 24,129 1,837 3,137 1,484 2,435 2,280 (2,875) 52,389 ECL Reported (476) (153) (1,204) (6) (47) (31) (422) (107) 30 (2,416) Currency translation (10) (2) 1 — — 1 — 73 (2) 61 Constant currency (486) (155) (1,203) (6) (47) (30) (422) (34) 28 (2,355) Operating expenses Reported (3,352) (4,536) (9,875) (807) (2,203) (775) (1,356) (1,836) 1,315 (23,425) Currency translation (83) (66) 49 — — 9 (4) 524 (71) 358 Constant currency (3,435) (4,602) (9,826) (807) (2,203) (766) (1,360) (1,312) 1,244 (23,067) Share of profit/(loss) in associates and joint ventures Reported — (52) 1,826 — — — 9 395 (3) 2,175 Currency translation — (1) (46) — — — — — — (47) Constant currency — (53) 1,780 — — — 9 395 (3) 2,128 Profit/(loss) before tax Reported 6,569 4,405 15,000 1,023 886 695 658 1,740 (1,605) 29,371 Currency translation 197 60 (120) 1 1 (7) 4 (411) (1) (276) Constant currency 6,766 4,465 14,880 1,024 887 688 662 1,329 (1,606) 29,095 Loans and advances to customers (net) Reported 257,289 109,244 453,443 18,508 53,186 — 24,702 19,377 1 935,750 Currency translation 24,996 7,615 10,484 10 — — (2,856) (857) (1) 39,391 Constant currency 282,285 116,859 463,927 18,518 53,186 — 21,846 18,520 — 975,141 Customer accounts Reported 324,526 269,493 766,225 31,030 99,427 — 28,412 43,911 103 1,563,127 Currency translation 31,527 21,201 15,798 30 — — (3,285) (3,325) (1) 61,945 Constant currency 356,053 290,694 782,023 31,060 99,427 — 25,127 40,586 102 1,625,072 1    Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of SAB) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on Group reported profit before tax of $933m and constant currency profit before tax of $799m. Supplementary analysis is provided on page 45 to give a fuller picture of the MENAT regional performance. 2    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 41 Earnings Release 3Q24 on Form 6-K Notable items (continued) Nine months ended 30 Sep 2023 HSBC UK Bank Plc HSBC Bank Plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1,2,3 1,593 2,098 — — — — — — (60) 3,631 Fair value movements on financial instruments 4 — — — — — — — — 15 15 Restructuring and other related costs 5 — 361 — — — — — — (361) — Disposal losses on Markets Treasury repositioning (145) (94) (339) — — — — — — (578) Operating expenses Disposals, acquisitions and related costs (29) (68) — — (5) (81) — — (14) (197) Restructuring and other related costs 6 13 16 8 1 2 — 6 2 29 77 1    Includes the reversal of a $2.1bn impairment loss relating to the sale of our retail banking operations in France. 2    Includes a gain of $1.6bn recognised in respect of the acquisition of SVB UK. 3    Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 4    Fair value movements on non-qualifying hedges in HSBC Holdings. 5    Gain recognised as a result of intra-Group restructuring. 6    Relates to reversals of restructuring provisions recognised during 2022. Legal entity results - on a constant currency basis 1 (continued) Quarter ended 30 Sep 2024 HSBC UK Bank Plc HSBC Bank Plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 2 Holding companies, shared service centres and intra-group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 3 3,259 2,676 8,764 626 901 — 902 826 (956) 16,998 ECL (173) (3) (536) (32) (19) — (213) (12) 2 (986) Operating expenses (1,265) (1,671) (3,573) (263) (859) — (477) (519) 484 (8,143) Share of profit/(loss) in associates and joint ventures — (1) 457 — — — 4 148 (1) 607 Profit/(loss) before tax 1,821 1,001 5,112 331 23 — 216 443 (471) 8,476 Loans and advances to customers (net) 289,424 112,275 460,717 20,697 56,382 — 24,412 4,745 1 968,653 Customer accounts 357,874 298,583 835,925 33,543 98,379 — 26,655 9,731 25 1,660,715 1    In the current period, constant currency results are equal to reported, as there is no currency translation. 2    Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of SAB) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on Group reported profit before tax of $365m. Supplementary analysis is provided on page 45 to give a fuller picture of the MENAT regional performance. 3    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 42 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Notable items (continued) Quarter ended 30 Sep 2024 HSBC UK Bank Plc HSBC Bank Plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs — 3 — — — — — (6) 75 72 Early redemption of legacy securities — — — — — — — — (283) (283) Operating expenses Disposals, acquisitions and related costs — — — — (6) — — (30) (12) (48) Restructuring and other related costs 1 1 — — 2 — — — — — 3 1    Relates to reversals of restructuring provisions recognised during 2022. Legal entity results - on a constant currency basis (continued) Quarter ended 30 Jun 2024 HSBC UK Bank Plc HSBC Bank Plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 1 Holding companies, shared service centres and intra-group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 2 Reported 3,139 2,186 8,496 636 1,049 — 954 945 (865) 16,540 Currency translation 94 52 57 1 — — (84) (26) 22 116 Constant currency 3,233 2,238 8,553 637 1,049 — 870 919 (843) 16,656 ECL Reported (10) 132 (184) (47) (40) — (210) 9 4 (346) Currency translation — 4 — — — — 18 (2) — 20 Constant currency (10) 136 (184) (47) (40) — (192) 7 4 (326) Operating expenses Reported (1,206) (1,589) (3,545) (336) (839) — (468) (484) 322 (8,145) Currency translation (37) (41) (25) — — — 41 13 (20) (69) Constant currency (1,243) (1,630) (3,570) (336) (839) — (427) (471) 302 (8,214) Share of profit/(loss) in associates and joint ventures Reported — 10 669 — — — 4 174 — 857 Currency translation — 1 7 — — — — — (2) 6 Constant currency — 11 676 — — — 4 174 (2) 863 Profit/(loss) before tax Reported 1,923 739 5,436 253 170 — 280 644 (539) 8,906 Currency translation 57 16 39 1 — — (25) (15) — 73 Constant currency 1,980 755 5,475 254 170 — 255 629 (539) 8,979 Loans and advances to customers (net) Reported 270,262 107,957 453,642 20,506 55,809 — 25,449 4,632 — 938,257 Currency translation 15,754 5,287 9,102 4 — — (1,790) (103) — 28,254 Constant currency 286,016 113,244 462,744 20,510 55,809 — 23,659 4,529 — 966,511 Customer accounts Reported 334,566 295,557 799,086 32,934 93,060 — 28,997 9,532 102 1,593,834 Currency translation 19,502 14,916 14,796 15 — — (2,039) (169) (1) 47,020 Constant currency 354,068 310,473 813,882 32,949 93,060 — 26,958 9,363 101 1,640,854 1    Other trading entities includes the results of entities located in Türkiye, Egypt and Saudi Arabia (including our share of the results of SAB) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on Group reported profit before tax of $369m and constant currency profit before tax of $363m. Supplementary analysis is provided on page 45 to give a fuller picture of the MENAT regional performance. 2    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 43 Earnings Release 3Q24 on Form 6-K Notable items (continued) Quarter ended 30 Jun 2024 HSBC UK Bank Plc HSBC Bank Plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs — (115) — — — — — — (46) (161) Operating expenses Disposals, acquisitions and related costs 3 — — — (8) — — (1) (32) (38) Restructuring and other related costs 1 1 2 — — — — — — 3 6 1    Relates to reversals of restructuring provisions recognised during 2022. Legal entity results - on a constant currency basis (continued) Quarter ended 30 Sep 2023 HSBC UK Bank Plc HSBC Bank Plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 1 Holding companies, shared service centres and intra-group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 2 Reported 3,008 2,443 7,720 638 994 493 853 1,071 (1,059) 16,161 Currency translation 82 47 24 1 — (9) (84) (375) 40 (274) Constant currency 3,090 2,490 7,744 639 994 484 769 696 (1,019) 15,887 ECL Reported (58) (80) (748) (6) 15 (20) (158) (36) 20 (1,071) Currency translation (1) (1) (1) — — — 16 21 (1) 33 Constant currency (59) (81) (749) (6) 15 (20) (142) (15) 19 (1,038) Operating expenses Reported (1,172) (1,447) (3,368) (282) (824) (253) (476) (697) 551 (7,968) Currency translation (32) (27) (13) — — 5 46 202 (36) 145 Constant currency (1,204) (1,474) (3,381) (282) (824) (248) (430) (495) 515 (7,823) Share of profit/(loss) in associates and joint ventures Reported — (9) 479 — — — 3 120 (1) 592 Currency translation — — 5 — — — — — 1 6 Constant currency — (9) 484 — — — 3 120 — 598 Profit/(loss) before tax Reported 1,778 907 4,083 350 185 220 222 458 (489) 7,714 Currency translation 49 19 15 1 — (4) (22) (152) 4 (90) Constant currency 1,827 926 4,098 351 185 216 200 306 (485) 7,624 Loans and advances to customers (net) Reported 257,289 109,244 453,443 18,508 53,186 — 24,702 19,377 1 935,750 Currency translation 24,996 7,615 10,484 10 — — (2,856) (857) (1) 39,391 Constant currency 282,285 116,859 463,927 18,518 53,186 — 21,846 18,520 — 975,141 Customer accounts Reported 324,526 269,493 766,225 31,030 99,427 — 28,412 43,911 103 1,563,127 Currency translation 31,527 21,201 15,798 30 — — (3,285) (3,325) (1) 61,945 Constant currency 356,053 290,694 782,023 31,060 99,427 — 25,127 40,586 102 1,625,072 1    Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of SAB) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on Group reported profit before tax of $238m and constant currency profit before tax of $191m. Supplementary analysis is provided on page 45 to give a fuller picture of the MENAT regional performance. 2    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 44 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Notable items (continued) Quarter ended 30 Sep 2023 HSBC UK Bank Plc HSBC Bank Plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 86 (3) — — — — — — 227 310 Restructuring and other related costs 2 — 361 — — — — — — (361) — Disposal losses on Markets Treasury repositioning (145) (94) (339) — — — — — — (578) Operating expenses Disposals, acquisitions and related costs (14) (23) — — (3) (27) — — (12) (79) Restructuring and other related costs 3 13 16 8 1 2 — 6 2 (18) 30 1 Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 2    Gain recognised as a result of intra-Group restructuring. 3    Relates to reversals of restructuring provisions recognised during 2022. Middle East, North Africa and Türkiye supplementary information The following tables show the reported results of our Middle East, North Africa and Türkiye business operations on a regional basis (including results of all the legal entities operating in the region and our share of the results of SAB). They also show the profit before tax of each of the global businesses. Middle East, North Africa and Türkiye regional performance Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Revenue 1 2,901 2,748 970 970 895 Change in expected credit losses and other credit impairment charges (154) (16) (33) (63) (13) Operating expenses (1,259) (1,188) (393) (459) (414) Share of profit in associates and joint ventures 464 391 147 171 118 Profit before tax 1,952 1,935 691 619 586 Loans and advances to customers (net) 23,458 21,392 23,458 23,237 21,392 Customer accounts 40,914 40,744 40,914 40,138 40,744 1    Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Profit before tax by global business Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Wealth and Personal Banking 489 486 165 153 185 Commercial Banking 254 369 133 41 93 Global Banking and Markets 836 821 283 261 250 Corporate Centre 373 259 110 164 58 Total 1,952 1,935 691 619 586 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 45 Earnings Release 3Q24 on Form 6-K Alternative performance measures Use of alternative performance measures Our reported results are prepared in accordance with IFRS Accounting Standards as detailed in our financial statements starting on page 356 of the Annual Report and Accounts 2023 on Form 20-F. We use a combination of reported and alternative performance measures, including those derived from our reported results that eliminate factors that distort period-on-period comparisons. These are considered alternative performance measures (non-GAAP financial measures). The following information details the adjustments made to the reported results and the calculation of other alternative performance measures. All alternative performance measures are reconciled to the closest reported performance measure. Alternative performance measure definitions Alternative performance measure Definition Constant currency revenue excluding notable items 1 Reported revenue excluding notable items and the impact of foreign exchange translation 2 Constant currency profit before tax excluding notable items 1 Reported profit before tax excluding notable items and the impact of foreign exchange translation 2 Constant currency revenue excluding notable items and strategic transactions 1 Reported revenue excluding notable items, strategic transactions and the impact of foreign exchange translation 3 Constant currency profit before tax excluding notable items and strategic transactions 1 Reported profit before tax excluding notable items, strategic transactions and the impact of foreign exchange translation 3 Return on average ordinary shareholders’ equity (‘RoE’) Profit attributable to the ordinary shareholders Average ordinary shareholders’ equity Return on average tangible equity (‘RoTE‘) Profit attributable to the ordinary shareholders, excluding impairment of goodwill and other intangible assets Average ordinary shareholders’ equity adjusted for goodwill and intangibles Return on average tangible equity (‘RoTE‘) excluding notable items Profit attributable to the ordinary shareholders, excluding impairment of goodwill and other intangible assets and notable items 2 Average ordinary shareholders’ equity adjusted for goodwill and intangibles and notable items 2 Net asset value per ordinary share Total ordinary shareholders’ equity 4 Basic number of ordinary shares in issue excluding treasury shares Tangible net asset value per ordinary share Tangible ordinary shareholders’ equity 5 Basic number of ordinary shares in issue excluding treasury shares Expected credit losses and other credit impairment charges (‘ECL’) as a % of average gross loans and advances to customers Annualised constant currency ECL 6 Constant currency average gross loans and advances to customers 6 Expected credit losses and other credit impairment charges (‘ECL’) as a % of average gross loans and advances to customers, including held for sale Annualised constant currency ECL 6 Constant currency average gross loans and advances to customers, including held for sale 6 Target basis operating expenses Reported operating expenses excluding notable items, foreign exchange translation and other excluded items 7 Basic earnings per share excluding material notable items and related impacts Profit attributable to ordinary shareholders excluding material notable items and related impacts 8 Weighted average number of ordinary shares outstanding, excluding own shares held 1    Constant currency performance is computed by adjusting reported results for the effects of foreign currency translation differences, which distort period-on-period comparisons. 2    For details of notable items, see ‘Supplementary financial information‘ on page 32 . 3    For details of strategic transactions, see ‘Strategic transactions supplementary analysis‘ on page 38 . 4    Total ordinary shareholders’ equity is total shareholders‘ equity less non-cumulative preference shares and capital securities. 5    Tangible ordinary shareholders’ equity is total ordinary shareholders’ equity excluding goodwill and other intangible assets (net of deferred tax). 6    The constant currency numbers are derived by adjusting reported ECL and average loans and advances to customers for the effects of foreign currency translation differences. 7    Other excluded items includes the impact of re-translating comparative period financial information at the latest rates of foreign exchange in hyperinflationary economies, which we consider to be outside of our control, and the impact of the sale of our retail banking operations in France and banking business in Canada. 8    For details of material notable items and related impacts, see page 49 . 46 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Constant currency revenue and profit before tax excluding notable items and strategic transactions Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Revenue Reported 54,290 53,037 16,998 16,540 16,161 Notable items 3,360 3,068 (211) (161) (268) Reported revenue excluding notable items 50,930 49,969 17,209 16,701 16,429 Currency translation 1 (743) 119 (279) Constant currency revenue excluding notable items 50,930 49,226 17,209 16,820 16,150 Constant currency impact of strategic transactions (distorting impact of operating results between periods) 2 178 1,222 — 1 559 Constant currency revenue excluding notable items and strategic transactions 50,752 48,004 17,209 16,819 15,591 Profit before tax Reported 30,032 29,371 8,476 8,906 7,714 Notable items 3,233 2,948 (256) (193) (317) Reported profit before tax excluding notable items 26,799 26,423 8,732 9,099 8,031 Currency translation 1 (372) 77 (96) Constant currency profit before tax excluding notable items 26,799 26,051 8,732 9,176 7,935 Constant currency impact of strategic transactions (distorting impact of operating results between periods) 2 90 414 — (1) 234 Constant currency profit before tax excluding notable items and strategic transactions 26,709 25,637 8,732 9,177 7,701 1    Currency translation on the reported balance excluding currency translation on notable items. 2    For more details of strategic transactions, see ‘Strategic transactions supplementary analysis‘ on page 38 . To aid the understanding of our results, we disclose constant currency revenue and profit before tax excluding notable items and the impact of strategic transactions. The impacts of strategic transactions quoted include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. Once a transaction has completed, the impact will include the operating income statement results of each business, which are not classified as notable items, in any period for which there are no results in the comparative period. We consider the monthly impact of distorting income statement results when calculating the impact of strategic transactions. Return on average ordinary shareholders‘ equity, return on average tangible equity and return on average tangible equity excluding notable items Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Profit/(loss) after tax Profit/(loss) attributable to the ordinary shareholders of the parent company 22,720 22,585 6,134 6,403 5,619 Impairment of goodwill and other intangible assets (net of tax) 114 36 (9) 13 7 Profit/(loss) attributable to the ordinary shareholders, excluding goodwill and other intangible assets impairment 22,834 22,621 6,125 6,416 5,626 Impact of notable items 1 (3,442) (3,037) 184 174 183 Profit attributable to the ordinary shareholders, excluding goodwill, other intangible assets impairment and notable items 19,392 19,584 6,309 6,590 5,809 Equity Average total shareholders‘ equity 188,140 183,704 188,023 187,239 183,445 Effect of average preference shares and other equity instruments (18,333) (19,062) (18,947) (18,272) (18,555) Average ordinary shareholders’ equity 169,807 164,642 169,076 168,967 164,890 Effect of goodwill and other intangibles (net of deferred tax) (11,631) (11,376) (11,582) (11,409) (11,549) Average tangible equity 158,176 153,266 157,494 157,558 153,341 Average impact of notable items (3,035) (3,377) 110 (2,251) (67) Average tangible equity excluding notable items 155,141 149,889 157,604 155,307 153,274 Ratio % % % % % Return on average ordinary shareholders’ equity (annualised) 17.9 18.3 14.4 15.2 13.5 Return on average tangible equity (annualised) 19.3 19.7 15.5 16.3 14.6 Return on average tangible equity excluding notable items (annualised) 16.7 17.5 15.9 17.1 15.0 1    For details of notable items please refer to ‘Supplementary financial information‘ on page 32 . From 1 January 2024, we have revised the adjustments made to RoTE. Prior to this, we adjusted RoTE for the impact of strategic transactions and the impairment of our investment in BoCom, whereas from 1 January 2024 we have excluded all notable items. This was intended to improve alignment with the treatment of notable items in our other income statement disclosures. Comparatives have been re-presented on the revised basis and we no longer disclose RoTE excluding strategic transactions and the impairment of BoCom. On this basis, we continue to target a RoTE excluding notable items in the mid-teens for both 2024 and 2025. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 47 Earnings Release 3Q24 on Form 6-K Return on average tangible equity by global business Nine months ended 30 Sep 2024 Wealth and Personal Banking 1 Commercial Banking Global Banking and Markets Corporate Centre 1 Total $m $m $m $m $m Profit before tax 9,684 9,464 5,662 5,222 30,032 Tax expense (1,765) (2,263) (1,286) (304) (5,618) Profit after tax 7,919 7,201 4,376 4,918 24,414 Less attributable to: preference shareholders, other equity holders, non-controlling interests (686) (445) (422) (141) (1,694) Profit attributable to ordinary shareholders of the parent company 7,233 6,756 3,954 4,777 22,720 Other adjustments (115) 227 (165) 167 114 Profit attributable to ordinary shareholders 7,118 6,983 3,789 4,943 22,834 Average tangible shareholders’ equity 31,271 44,302 36,637 45,966 158,176 RoTE (%) (annualised) 30.4 21.1 13.8 14.4 19.3 Nine months ended 30 Sep 2023 Profit before tax 11,369 10,787 4,904 2,311 29,371 Tax expense (2,242) (2,193) (925) 326 (5,034) Profit after tax 9,127 8,594 3,979 2,637 24,337 Less attributable to: preference shareholders, other equity holders, non-controlling interests (744) (419) (413) (176) (1,752) Profit attributable to ordinary shareholders of the parent company 8,383 8,175 3,566 2,461 22,585 Other adjustments (160) 256 119 (179) 36 Profit attributable to ordinary shareholders 8,223 8,431 3,685 2,282 22,621 Average tangible shareholders’ equity 29,466 43,679 38,200 41,921 153,266 RoTE (%) (annualised) 37.3 25.8 12.9 7.3 19.7 1    With effect from 1 January 2024, following the sale of our retail banking business in France, we have prospectively reclassified the portfolio of retained loans, profit participation interest and licence agreement of the CCF brand from WPB to Corporate Centre. Net asset value and tangible net asset value per ordinary share At 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m Total shareholders’ equity 192,754 183,293 182,720 Preference shares and other equity instruments (19,070) (18,825) (17,719) Total ordinary shareholders’ equity 173,684 164,468 165,001 Goodwill and intangible assets (net of deferred tax) (11,804) (11,359) (11,554) Tangible ordinary shareholders’ equity 161,880 153,109 153,447 Basic number of $0.50 ordinary shares outstanding 17,982 18,330 19,275 Value per share $ $ $ Net asset value per ordinary share 9.66 8.97 8.56 Tangible net asset value per ordinary share 9.00 8.35 7.96 ECL and other credit impairment charges as a % of average gross loans and advances to customers, and ECL and other credit impairment charges as a % of average gross loans and advances to customers, including held for sale Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Expected credit losses and other credit impairment charges (‘ECL‘) (2,052) (2,416) (986) (346) (1,071) Currency translation 61 20 33 Constant currency (2,052) (2,355) (986) (326) (1,038) Average gross loans and advances to customers 955,512 957,080 964,189 946,414 959,129 Currency translation 17,156 29,841 14,217 26,870 29,820 Constant currency 972,668 986,921 978,406 973,284 988,949 Average gross loans and advances to customers, including held for sale 975,646 1,020,441 966,713 948,515 1,017,351 Currency translation 16,796 29,888 14,174 26,758 29,207 Constant currency 992,442 1,050,329 980,887 975,273 1,046,558 Ratios % % % % % Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers 0.28 0.32 0.40 0.13 0.42 Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers, including held for sale 0.28 0.30 0.40 0.13 0.39 48 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Target basis operating expenses Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Reported operating expenses 24,439 23,425 8,143 8,145 7,968 Notable items (127) (120) (45) (32) (49) – disposals, acquisitions and related costs (149) (197) (48) (38) (79) – restructuring and other related costs 1 22 77 3 6 30 Currency translation 2 (358) 69 (145) Excluding the constant currency impact of the sale of our retail banking operations in France and banking business in Canada 3 (162) (723) — — (230) Excluding the impact of retranslating prior period costs of hyperinflationary economies at constant currency foreign exchange rate 487 12 185 Target basis operating expenses 24,150 22,711 8,098 8,194 7,729 1    Relates to reversals of restructuring provisions recognised during 2022. 2    Currency translation on reported operating expenses, excluding currency translation on notable items. 3    This represents the business as usual costs which are not classified as notable items relating to our retail banking operations in France and banking business in Canada, on a constant currency basis. This does not include the disposal costs which relate to these transactions. Target basis operating expenses for 2024 and for the 2023 comparative periods differ from what we disclosed in our 2023 results, when we were comparing against 2022 operating expenses. The 2023 target basis excluded the impact of incremental costs associated with the acquisition of SVB UK, and the related investments, whereas the 2024 target basis excludes the costs associated with our retail banking operations in France and our banking business in Canada. The exclusion of notable items and the impact of retranslating prior year results of hyperinflationary economies at constant currency are excluded in 2024, which is consistent with the 2023 basis of preparation. We consider target basis operating expenses to provide useful information to investors by quantifying and excluding the notable items that management considered when setting and assessing cost-related targets. Basic earnings per share excluding material notable items and related impacts Nine months ended Quarter ended 30 Sep 2024 30 Sep 2023 30 Sep 2024 30 Jun 2024 30 Sep 2023 $m $m $m $m $m Profit attributable to shareholders of company 23,628 23,561 6,516 6,528 6,053 Coupon payable on capital securities classified as equity (908) (976) (382) (125) (434) Profit attributable to ordinary shareholders of company 22,720 22,585 6,134 6,403 5,619 Gain on acquisition of SVB UK (2) (1,593) — (2) (86) Impact of the sale of our retail banking operations in France (net of tax) (55) (1,629) (2) (1) — Impact of the sale of our banking business in Canada 1 (4,953) (430) (4) (7) (376) Impairment loss relating to the planned sale of our business in Argentina 1,162 — (30) 55 — Profit attributable to ordinary shareholders of company excluding material notable items and related impacts 18,872 18,933 6,098 6,448 5,157 Number of shares Weighted average basic number of ordinary shares (millions) 18,493 19,596 18,151 18,509 19,404 Basic earnings per share ($) 1.23 1.15 0.34 0.35 0.29 Basic earnings per share excluding material notable items and related impacts ($) 1.02 0.97 0.34 0.35 0.27 1 Represents gain on sale of business in Canada recognised on completion, inclusive of the earnings recognised by the banking business from 30 June 2022, the recycling of losses in foreign currency translation reserves and other reserves, and gain on the foreign exchange hedging of the sale proceeds. Material notable items are a subset of notable items. Material notable items are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature, which are excluded from our dividend payout ratio calculation and our earnings per share measure, along with related impacts. Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement. Related impacts include those items that do not qualify for designation as notable items but whose adjustment is considered by management to be appropriate for the purposes of determining the basis for our dividend payout ratio calculation. Material notable items in 3Q24 and comparative periods included the planned sale of our business in Argentina, the sale of our retail banking operations in France, the sale of our banking business in Canada, the gain following the acquisition of SVB UK and the impairment of our investment in BoCom. In determining this measure, we also excluded HSBC Bank Canada‘s financial results from the 30 June 2022 net asset reference date until completion of the sale, as the gain on sale was recognised through a combination of the consolidation of HSBC Bank Canada‘s results in the Group‘s results since this date, and the remaining gain on sale was recognised at completion. For the planned sale of our business in Argentina, between signing and closing, the loss on sale will vary by changes in the net asset value of the disposed business and associated hyperinflation and foreign currency translation, and in the fair value of consideration including price adjustments and migration costs. There were no additional related impacts, and the ongoing profits from HSBC Argentina will not be excluded from our basic earnings per share excluding material notable items and related impacts. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 49 Earnings Release 3Q24 on Form 6-K Risk Managing risk HSBC’s operations are subject to changes in economic and financial conditions as well as geopolitical developments that could have a material impact on the Group’s operations and financial risks. We continuously review these factors in all of our key markets and conduct regular reviews of economic risks and expectations. Continued growth in global economic activity was observed in the third quarter of 2024, led by the US and China, with relatively slower growth in the EU. In the US, performance was supported by sustained household spending, and the services sector in particular. In mainland China, while domestic consumption has been weak and activity by sector uneven, export growth and investment have ensured that growth has so far remained close to the official target in 2024. At the same time, authorities have announced measures to further support private sector confidence and consumption. We will continue to monitor the impact of these measures into the fourth quarter. Inflation and high interest rates remain a key consideration for policymakers. In the US and Europe, headline inflation has continued to trend downwards towards Central Bank target rates, despite persistently higher services prices. Progress in reducing inflation enabled both the US Federal Reserve and the Bank of England to cut interest rates in the third quarter of 2024, following the ECB’s decision to cut rates in the second quarter of the year. Markets anticipate further cuts over the remainder of 2024 and into 2025. In mainland China, authorities have reduced the Loan Prime Rate to support private sector borrowing as demand for loans has weakened. Geopolitical tensions could impact the Group’s operations and its risk profile and continue to be a source of significant uncertainty, including the ongoing conflicts between Russia and Ukraine and in the Middle East. The recent escalation in the conflict between Israel and Hezbollah has raised uncertainty in the region and led to renewed volatility in energy prices. The attacks on commercial shipping in the Red Sea continue, contributing to higher shipping costs and disruption to supply chains and, coupled with the risk of a potential increase in oil prices, could lead to renewed inflationary pressures. Fiscal policy, deficits and public indebtedness also influence our risk profile. Public spending as a proportion of GDP is likely to remain high for most of our key economies with elevated spending focused on social welfare, defence and climate transition initiatives. Against a backdrop of slower economic growth and expectations for a higher interest rate environment in the longer term, elevated borrowing costs could increase and adversely impact the fiscal responses of highly-indebted sovereign issuers. Sanctions and trade restrictions are monitored closely given their complexity and pace of change. The US, the UK and the EU, as well as other countries, have imposed significant sanctions and trade restrictions against Russia, with new sanctions added during 2024 by the US, the UK and the EU. Additional sanctions on Iran were imposed in the second and third quarters of 2024 in response to the increase in tensions between Israel and Iran. The secondary sanctions regime introduced by the US in December 2023 gives the US broad discretion to impose severe sanctions on non-US banks that are knowingly, or even unknowingly, engaged in certain transactions or services involving Russia’s military-industrial base. The US expanded the scope of these secondary sanctions in June 2024 to apply to Russian and non-Russian persons designated under the primary legal authority for Russian sanctions. The broad scope of the discretionary powers embedded in the regime creates challenges associated with the detection or prevention of third-party activities beyond our control. The imposition of such sanctions against any non-US HSBC entity could result in significant adverse commercial, operational and reputational consequences for HSBC, including the restriction or termination of the non-US HSBC entity’s ability to access the US financial system and the freezing of the entity’s assets that are subject to US jurisdiction. In response to such sanctions and trade restrictions, as well as asset flight, Russia has implemented certain countermeasures, including the expropriation of certain foreign assets. Strategic competition has the potential to impact the Group’s operations and may pose financial risks. The relationships between China and several other countries, including the US and the UK, remain complex. The US, the UK, the EU and other countries have imposed various sanctions and trade restrictions on Chinese individuals and companies. In response to earlier measures, China has imposed its own sanctions, trade restrictions and other measures on persons and entities in other countries, including recent sanctions on US firms supplying arms to Taiwan. Supply chains remain vulnerable to a deterioration in these bilateral relationships and this has resulted in efforts to de-risk certain sectors with the reshoring of manufacturing activities, but the approach of countries to strategic competition and engagement with China continues to develop. Further sanctions or counter-sanctions may adversely affect the Group, its customers and various markets. Political changes may also have implications for policy. Elections could imply uncertainty in some markets in response to shifting domestic and foreign policy priorities. The UK, France, Mexico and several countries in Asia went to the polls earlier this year, with the US set to follow in the fourth quarter of 2024. The outcome of the US election in particular will be monitored closely, given the potential for changes to economic, foreign and trade policy that may have broader geopolitical implications. The real estate sector faces challenging conditions in several of our major markets. The Hong Kong residential and commercial real estate markets have seen prices fall amid high inventory levels, low transactions and the higher interest rate environment. In mainland China, similar excess of inventory, and low confidence, have accelerated the fall in both commercial and residential real estate prices, with few signs so far of a sustained recovery, despite a series of reform proposals. We continue to closely monitor, and seek to proactively manage, the potential implications of the real estate downturn for our customers and commercial real estate portfolios. All the above risks could also have an impact on our retail customers and we continue to closely monitor the impact of inflation and the increased cost of living to offer the right support to our customers in line with regulatory, government and wider stakeholder expectations. We engage closely with regulators to help ensure that we continue to meet their expectations for the activities of financial institutions during times of market volatility. In addition, management adjustments to ECL were applied to reflect persisting uncertainty in certain sectors, driven by macroeconomic and other sector specific risks, which were not fully captured by our models. We continue to monitor, and seek to manage, the potential implications of all the above developments on our customers and our business. While the financial performance of our operations varied in different geographies, our balance sheet and liquidity remained strong. At 30 September 2024, our CET1 ratio increased to 15.2%, from 15.0% at 30 June 2024, and our liquidity coverage ratio (‘LCR’) was 137%. 50 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Credit risk Summary of credit risk At 30 September 2024, gross loans and advances to customers and banks of $1,097bn were $34.6bn higher on a reported basis compared with 31 December 2023. Loans and advances to customers increased by $30.0bn while loans and advances to banks increased by $4.6bn. This included total favourable effects of foreign currency translation differences of $14.7bn. On a constant currency basis, the increase of $19.9bn was driven by an $8.0bn rise in personal loans and advances to customers, mainly in HSBC UK (up $4.2bn), our legal entities in the US (up $1.9bn), in Asia (up $1.4bn) and in Mexico (up $0.5bn). There was also a $7.1bn rise in wholesale loans and advances to customers, due to growth in HSBC Bank plc (up $4.7 bn) and HSBC UK (up $1.7bn). It also included an increase of $4.8bn in loans and advances to banks, mainly in our legal entities in Asia (up $5.4bn) and in the Middle East (up $2.4bn), partly offset by lower balances in HSBC UK (down $3.4bn). Loans and advances to banks and customers included a $2.0bn decrease due to the reclassification of our business in Argentina, our private banking business in Germany and our operations in Armenia to assets held for sale. At 30 September 2024, the allowance for ECL of $11.6bn comprised $11.1bn in respect of assets held at amortised cost, $0.4bn in respect of loan commitments and financial guarantees, and $0.1bn in respect of debt instruments measured at fair value through other comprehensive income (‘FVOCI’). On a constant currency basis, the allowance for ECL in relation to loans and advances to customers decreased by $0.1bn. This was attributable to: – a $0.2bn decrease in personal loans and advances to customers, observed in stages 1 and 2; and – a $0.1bn increase in wholesale loans and advances to customers, which included a $0.4bn increase in stage 3, offset by a $0.3bn decrease in stages 1 and 2. The ECL charge for the first nine months of 2024 was $2.1bn (9M23: $2.4bn), inclusive of recoveries. The ECL charge comprised: $1.1bn in respect of wholesale lending, of which the stage 3 charge was $0.8bn; $0.9bn in respect of personal lending, of which the stage 3 charge was $0.7bn; and $0.1bn in respect of other assets and debt instruments measured at FVOCI. Wholesale lending charges were recognised mainly in our legal entities in Hong Kong ($0.7bn). While the mainland China commercial real estate sector remained subdued, there were limited new defaults and lower total ECL charges of $0.1bn in 3Q24 and $0.2bn in 9M24. ECL charges in the Hong Kong commercial real estate sector excluding exposure to mainland China borrowers of $0.1bn in 3Q24 and $0.1bn in 9M24, were also low due to the limited impact from defaults, driven by the high level of collateralisation in the portfolio. Summary of financial instruments to which the impairment requirements in IFRS 9 are applied At 30 Sep 2024 At 31 Dec 2023 Gross carrying/nominal amount Allowance for ECL 1 Gross carrying/nominal amount Allowance for ECL 1 $m $m $m $m Loans and advances to customers at amortised cost 979,612 (10,959) 949,609 (11,074) Loans and advances to banks at amortised cost 117,525 (11) 112,917 (15) Other financial assets measured at amortised cost 868,116 (145) 960,271 (422) – cash and balances at central banks 252,310 — 285,868 — – items in the course of collection from other banks 7,513 — 6,342 — – Hong Kong Government certificates of indebtedness 42,591 — 42,024 — – reverse repurchase agreements – non-trading 263,387 — 252,217 — – financial investments 156,533 (10) 148,346 (20) – assets held for sale 2 7,389 (59) 103,186 (324) – other assets 3 138,393 (76) 122,288 (78) Total gross carrying amount on-balance sheet 1,965,253 (11,115) 2,022,797 (11,511) Loan and other credit-related commitments 672,892 (367) 661,015 (367) Financial guarantees 17,215 (31) 17,009 (39) Total nominal amount off-balance sheet 4 690,107 (398) 678,024 (406) 2,655,360 (11,513) 2,700,821 (11,917) Fair value Memorandum allowance for ECL 5 Fair value Memorandum allowance for ECL 5 $m $m $m $m Debt instruments measured at fair value through other comprehensive income (‘FVOCI’) 333,771 (80) 302,348 (97) 1    The total ECL is recognised in the loss allowance for the financial asset unless the total ECL exceeds the gross carrying amount of the financial asset, in which case the ECL is recognised as a provision. 2    At 30 September 2024, the gross carrying amount comprised $3,660m of loans and advances to customers and banks (31 December 2023: $84,075m) and $3,729m of other financial assets at amortised cost (31 December 2023: $19,111m) mainly from Argentina ($3.9bn), Germany ($2.7bn) and Armenia ($0.6bn). The corresponding allowance for ECL comprised $54m of loans and advances to customers and banks (31 December 2023: $303m) and $5m of other financial assets at amortised cost (31 December 2023: $21m). The significant reduction is due to the completion of the sales of our banking business in Canada in March 2024 and our retail banking operations in France in January 2024. 3    Includes only those financial instruments that are subject to the impairment requirements of IFRS 9. ‘Other assets’ as presented within the summary consolidated balance sheet on page 19 comprises both financial and non-financial assets, including cash collateral and settlement accounts. 4    Represents the maximum amount at risk should the contracts be fully drawn upon and clients default. 5    Debt instruments measured at FVOCI continue to be measured at fair value with the allowance for ECL as a memorandum item. Change in ECL is recognised in ‘Change in expected credit losses and other credit impairment charges’ in the income statement. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 51 Earnings Release 3Q24 on Form 6-K Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage at 30 September 2024 Gross carrying/nominal amount 1 Allowance for ECL ECL coverage % Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total $m $m $m $m $m $m $m $m $m $m % % % % % Loans and advances to customers at amortised cost 851,828 103,633 24,064 87 979,612 (1,086) (2,467) (7,364) (42) (10,959) 0.1 2.4 30.6 48.3 1.1 Loans and advances to banks at amortised cost 117,279 244 2 — 117,525 (8) (1) (2) — (11) — 0.4 100.0 — — Other financial assets measured at amortised cost 866,034 1,890 189 3 868,116 (85) (26) (34) — (145) — 1.4 18.0 — — Loan and other credit-related commit-ments 651,349 20,797 743 3 672,892 (160) (118) (89) — (367) — 0.6 12.0 — 0.1 Financial guarantees 15,361 1,581 273 — 17,215 (5) (9) (17) — (31) — 0.6 6.2 — 0.2 At 30 Sep 2024 2,501,851 128,145 25,271 93 2,655,360 (1,344) (2,621) (7,506) (42) (11,513) 0.1 2.0 29.7 45.2 0.4 1    Represents the maximum amount at risk should the contracts be fully drawn upon and clients default. 2    Purchased or originated credit-impaired (‘POCI‘). Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage at 31 December 2023 Gross carrying/nominal amount 1 Allowance for ECL ECL coverage % Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total $m $m $m $m $m $m $m $m $m $m % % % % % Loans and advances to customers at amortised cost 809,384 120,871 19,273 81 949,609 (1,130) (2,964) (6,950) (30) (11,074) 0.1 2.5 36.1 37.0 1.2 Loans and advances to banks at amortised cost 111,479 1,436 2 — 112,917 (10) (3) (2) — (15) — 0.2 100.0 — — Other financial assets measured at amortised cost 946,873 12,734 664 — 960,271 (109) (132) (181) — (422) — 1.0 27.3 — — Loan and other credit-related commit-ments 630,949 28,922 1,140 4 661,015 (153) (128) (86) — (367) — 0.4 7.5 — 0.1 Financial guarantees 14,746 1,879 384 — 17,009 (7) (7) (25) — (39) — 0.4 6.5 — 0.2 At 31 Dec 2023 2,513,431 165,842 21,463 85 2,700,821 (1,409) (3,234) (7,244) (30) (11,917) 0.1 2.0 33.8 35.3 0.4 1    Represents the maximum amount at risk should the contracts be fully drawn upon and clients default. 2    Purchased or originated credit-impaired (‘POCI‘). 52 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Measurement uncertainty and sensitivity analysis of ECL estimates The recognition and measurement of ECL involves the use of significant judgement and estimation. We form multiple economic scenarios based on economic forecasts and distributional estimates and apply these to credit risk models to estimate future credit losses. The results are then probability-weighted to determine an unbiased ECL estimate. Management assessed the current economic environment, reviewed the latest economic forecasts and discussed key risks before selecting the economic scenarios and their weightings. The Central scenario is constructed to reflect current macroeconomic expectations. Outer scenarios incorporate the crystallisation of economic and geopolitical risks, including those relating to future elections, the Russia-Ukraine war, conflict in the Middle East and shipping disruptions in the Red Sea. Management judgemental adjustments are used where modelled allowance for ECL does not fully reflect the identified risks and related uncertainty, or to capture significant late-breaking events. Methodology At 30 September 2024, four economic scenarios were used to capture the latest economic expectations and to articulate management’s view of the range of risks and potential outcomes. Scenarios are updated with the latest economic forecasts and distributional estimates each quarter and the approach to scenario generation has remained consistent with that taken in the fourth quarter of 2023. As at 30 September 2024, the escalation of conflict in the Middle East had no significant impact on economic forecasts or oil price expectations used in the 3Q24 scenarios. We continue to monitor the situation in the region closely. Three scenarios, the Upside, Central and Downside, are drawn from external consensus forecasts, market data and distributional estimates of the entire range of economic outcomes. The fourth scenario, the Downside 2, represents management’s view of severe downside risks. Scenarios produced to calculate ECL are aligned to HSBC’s top and emerging risks. Description of economic scenarios Stronger than expected GDP growth in the first half of 2024 has resulted in Central scenario forecasts being revised upwards for the remainder of the year, specifically in the UK, France, the US, mainland China and Hong Kong. In the US and Europe, the service sector has been an important driver of growth as consumption has proved resilient to inflation and high interest rates. In mainland China, economic growth has been supported by strong export sales but despite various stimulus measures, domestic activity remains weak and growth, by sector, is uneven. Authorities have increased fiscal and monetary support to boost economic activity and to ensure growth remains close to the official target. In Hong Kong, growth has been driven by strong government support and investment, while household spending has remained weak. Inflation has continued to moderate in several of our key markets, helped by falling energy costs and stability in food prices, while services inflation has remained higher across the US and Europe. Low inflation in mainland China and Hong Kong has been driven by weak domestic demand, particularly consumption. In the Central forecast, softer wage growth and services price inflation are expected to sustain lower inflation across most of our key markets. In mainland China, inflation in the Central scenario is forecast to rise as stimulus measures lift consumption and spending. Lower inflation in the US, UK and Euro Area is forecast to enable major central banks to reduce policy rates further, particularly from 2025 onwards. House price forecasts in Hong Kong and China have seen more significant revisions in the third quarter of 2024 compared with the fourth quarter of 2023. In mainland China and Hong Kong, real estate prices have continued to fall despite the delivery of supportive policy measures. Forecasts have been revised down further. In mainland China, prolonged weak buyer confidence has weighed on property sales and investment while in Hong Kong developers have relied on discounting to clear out housing inventory. As a consequence, forecasts have been revised lower. House price forecasts in the US and UK have remained relatively more stable despite elevated interest rates, due to low housing supply and low unemployment, which has acted to support moderate price growth. Risks to the Central outlook are captured in the outer scenarios. The Upside and Downside scenarios are constructed to reflect the economic consequences from the crystallisation of a number of key economic and financial risks. Sources of forecast uncertainty include geopolitical tensions, inflation, and the outlook for monetary policy. In particular, the Downside scenarios explore the possibility that interest rates and inflation move higher than is forecast in the Central scenario. As the geopolitical environment remains volatile and complex, risks include a broader and more prolonged conflict in the Middle East, a potential escalation in the Russia-Ukraine war, and continued differences between the US and China over a range of strategic issues. Election outcomes in major economies, including the United States, could also deliver policies that are more adverse to global trade growth and complicate international supply chains, leading to greater trade frictions, higher costs and market instability. The four global scenarios used for calculating ECL at 30 September 2024 were: – The consensus Central scenario: This scenario features a slowdown in global growth in 2024 before a gradual pick-up over the remainder of the forecast horizon. Growth rates remain below the pre-Covid-19 pandemic average. Unemployment is forecast to rise gradually amid weaker economic activity, but is set to remain low by historic standards. Inflation is expected to continue to ease back to central bank targets, allowing central banks to continue a gradual easing of interest rates. Interest rates stay above their pre-pandemic levels over the entire forecast horizon. – The consensus Upside scenario: This scenario incorporates the de-escalation of geopolitical tensions and a loosening of financial conditions. In this scenario, growth accelerates, inflation falls at a faster rate than in the Central scenario and unemployment declines. This enables central banks to lower interest rates more quickly than in the Central scenario. Asset prices, including housing, rise more quickly than in the Central scenario. – The consensus Downside scenario: This scenario features weaker economic activity compared with the Central scenario, driven by a supply shock that causes a rise in inflation and interest rates above the Central forecast. In this scenario, GDP growth slows, unemployment rises, financial conditions tighten, and equity markets and house prices fall. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 53 Earnings Release 3Q24 on Form 6-K – The Downside 2 scenario: This scenario reflects management’s view of the tail end of the economic distribution. It incorporates the simultaneous crystallisation of a number of risks that leads to a deep global recession. The narrative features an escalation of geopolitical risks, more significant changes to the global tariff and trade order and a worsening of supply chain disruptions. Inflation and interest rates are assumed to rise initially. Unemployment also increases rapidly, asset prices fall, and defaults rise significantly. As recession takes hold, commodity prices fall back and inflation falls. Both the consensus Downside and the Downside 2 scenarios are global in scope, and while they differ in severity, they assume that the key risks to HSBC, listed above, crystallise simultaneously. The following tables describe key macroeconomic variables in the consensus Central scenario, consensus Upside scenario, consensus Downside scenario and Downside 2 scenario. Consensus Central scenario 4Q24-3Q29 (as at 3Q24) UK US Hong Kong Mainland China France UAE Mexico GDP (annual average growth rate, %) 2024 1.0 2.5 2.9 4.9 1.1 3.7 1.9 2025 1.4 1.7 2.7 4.4 1.2 4.2 1.7 2026 1.6 2.0 2.4 4.2 1.4 4.2 2.2 2027 1.7 1.9 2.3 3.9 1.3 3.7 2.2 2028 1.6 1.9 2.3 3.7 1.3 3.3 2.2 5-year average 1 1.6 1.9 2.5 4.0 1.3 3.8 2.1 Unemployment rate (%) 2024 4.4 4.1 3.0 5.1 7.5 2.8 2.8 2025 4.8 4.4 2.9 5.1 7.4 2.7 3.2 2026 4.5 4.1 3.0 5.0 7.1 2.6 3.3 2027 4.6 4.0 2.9 5.0 7.0 2.6 3.4 2028 4.4 4.0 2.9 5.0 6.8 2.5 3.5 5-year average 1 4.6 4.1 2.9 5.0 7.1 2.6 3.4 House prices (annual average growth rate, %) 2024 1.5 5.7 (12.3) (7.5) (3.7) 17.9 8.6 2025 1.7 3.9 (6.8) (4.4) 2.7 8.7 5.0 2026 3.6 3.0 4.8 (2.4) 4.4 4.9 4.0 2027 4.7 3.0 3.0 2.3 4.5 3.3 3.9 2028 3.5 2.9 2.5 3.2 4.0 1.9 3.9 5-year average 1 3.2 3.2 0.5 (0.3) 3.5 4.8 4.3 Inflation (annual average growth rate, %) 2024 2.6 3.1 1.9 0.5 2.4 2.5 4.4 2025 2.2 2.4 2.1 1.4 1.8 2.1 3.7 2026 2.0 2.4 2.1 1.8 1.6 2.1 3.5 2027 2.0 2.3 2.2 1.8 1.9 2.0 3.4 2028 2.0 2.2 2.3 1.7 2.0 1.8 3.3 5-year average 1 2.1 2.3 2.2 1.7 1.9 2.0 3.5 Central bank policy rate (annual average, %) 2 2024 5.1 5.1 5.5 3.4 3.7 5.2 10.8 2025 4.2 3.6 4.0 3.3 2.5 3.6 9.1 2026 3.6 3.1 3.5 3.4 2.1 3.1 8.3 2027 3.5 3.1 3.4 3.5 2.2 3.1 8.0 2028 3.4 3.1 3.5 3.6 2.2 3.1 8.1 5-year average 1 3.7 3.3 3.7 3.5 2.3 3.3 8.5 1    The five-year average is calculated over a projected period of 20 quarters from 4Q24 to 3Q29. 2    For mainland China, rate shown is the Loan Prime Rate. 54 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Consensus Central scenario 2024–2028 (as at 4Q23) UK US Hong Kong Mainland China France UAE Mexico GDP (annual average growth rate, %) 2024 0.3 1.0 2.6 4.5 0.8 3.7 1.9 2025 1.2 1.8 2.7 4.4 1.5 4.0 2.2 2026 1.7 2.1 2.6 4.3 1.6 3.8 2.3 2027 1.6 2.0 2.6 3.8 1.5 3.4 2.4 2028 1.6 2.0 2.6 3.9 1.5 3.4 2.4 5-year average 1 1.3 1.8 2.6 4.2 1.4 3.6 2.2 Unemployment rate (%) 2024 4.7 4.3 3.0 5.2 7.5 2.6 2.9 2025 4.6 4.2 3.0 5.1 7.3 2.6 2.9 2026 4.3 4.0 3.2 5.1 7.0 2.6 2.9 2027 4.2 4.0 3.2 5.1 6.8 2.6 2.9 2028 4.2 4.0 3.2 5.1 6.8 2.6 2.9 5-year average 1 4.4 4.1 3.1 5.1 7.1 2.6 2.9 House prices (annual average growth rate, %) 2024 (5.5) 2.9 (6.6) (0.6) (1.0) 12.6 6.5 2025 0.1 2.7 (0.7) 1.1 2.4 7.7 4.2 2026 3.5 3.1 2.6 2.6 4.0 4.4 4.2 2027 3.0 2.7 2.8 4.0 4.4 2.6 4.0 2028 3.0 2.1 3.0 4.5 4.0 2.3 4.0 5-year average 1 0.8 2.7 0.2 2.3 2.8 5.9 4.6 Inflation (annual average growth rate, %) 2024 3.2 2.7 2.1 1.8 2.7 2.3 4.2 2025 2.2 2.2 2.1 2.0 1.8 2.2 3.6 2026 2.2 2.3 2.2 2.1 1.7 2.1 3.5 2027 2.3 2.2 2.4 2.0 1.9 2.1 3.5 2028 2.3 2.2 2.4 2.0 2.1 2.1 3.5 5-year average 1 2.4 2.3 2.2 2.0 2.0 2.1 3.7 Central bank policy rate (annual average, %) 2 2024 5.0 5.0 5.4 3.2 3.6 5.1 10.4 2025 4.3 4.0 4.4 3.3 2.8 4.1 8.6 2026 3.9 3.7 4.1 3.5 2.6 3.7 7.9 2027 3.8 3.7 4.1 3.7 2.6 3.7 7.9 2028 3.7 3.8 4.1 3.9 2.7 3.8 8.1 5-year average 1 4.1 4.1 4.4 3.5 2.9 4.1 8.6 1    The five-year average is calculated over a projected period of 20 quarters from 1Q24 to 4Q28. 2    For mainland China, rate shown is the Loan Prime Rate. Consensus Upside scenario 4Q24–3Q29 (as at 3Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-peak) 1 11.9 (3Q29) 14.9 (3Q29) 21.5 (3Q29) 28.5 (3Q29) 9.2 (3Q29) 29.0 (3Q29) 16.6 (3Q29) Unemployment rate (%, min) 2 3.0 (3Q26) 3.3 (3Q26) 2.5 (3Q26) 4.5 (3Q26) 6.2 (3Q26) 2.2 (3Q26) 2.8 (2Q25) House price index (%, start-to-peak) 1 23.6 (3Q29) 25.6 (3Q29) 18.9 (3Q29) 5.4 (3Q29) 23.7 (3Q29) 27.9 (3Q29) 28.6 (3Q29) Inflation rate (YoY % change, min) 3 1.0 (4Q25) 0.5 (3Q25) 0.6 (3Q25) 0.0 (3Q25) 0.8 (3Q25) 0.7 (3Q25) 2.5 (4Q25) Central bank policy rate (%, min) 2 3.4 (4Q28) 3.1 (1Q27) 3.4 (1Q27) 3.2 (3Q25) 1.9 (3Q25) 3.1 (1Q27) 7.3 (1Q26) 1    Cumulative change to the highest level of the series during the 20-quarter projection. 2    Lowest projected unemployment or policy rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. 3    Lowest projected year-on-year percentage change in inflation in the scenario. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 55 Earnings Release 3Q24 on Form 6-K Consensus Upside scenario 2024–2028 (as at 4Q23) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-peak) 1 10.8 (4Q28) 14.3 (4Q28) 21.8 (4Q28) 30.4 (4Q28) 10.4 (4Q28) 30.7 (4Q28) 17.8 (4Q28) Unemployment rate (%, min) 2 3.1 (4Q24) 3.1 (2Q25) 2.4 (3Q24) 4.8 (4Q25) 6.2 (4Q25) 2.0 (4Q25) 2.4 (3Q24) House price index (%, start-to-peak) 1 13.0 (4Q28) 21.9 (4Q28) 17.9 (4Q28) 19.7 (4Q28) 19.6 (4Q28) 34.2 (4Q28) 30.6 (4Q28) Inflation rate (YoY % change, min) 3 1.3 (2Q25) 1.4 (1Q25) 0.3 (4Q24) 0.6 (3Q24) 1.5 (3Q24) 1.4 (1Q25) 2.7 (1Q25) Central bank policy rate (%, min) 2 3.7 (3Q28) 3.7 (2Q27) 4.1 (1Q27) 3.1 (3Q24) 2.6 (2Q26) 3.7 (1Q27) 7.8 (2Q25) 1    Cumulative change to the highest level of the series during the 20-quarter projection. 2    Lowest projected unemployment or policy rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. 3    Lowest projected year-on-year percentage change in inflation in the scenario. Consensus Downside scenario 4Q24–3Q29 (as at 3Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 (0.6) (4Q26) (1.4) (2Q25) (1.8) (1Q26) (2.3) (2Q25) (0.5) (2Q25) 0.2 (4Q24) (2.0) (4Q25) Unemployment rate (%, max) 2 6.6 (3Q25) 5.4 (2Q25) 4.3 (2Q26) 6.4 (3Q26) 8.4 (2Q25) 3.6 (2Q25) 3.8 (4Q25) House price index (%, start-to-trough) 1 (5.4) (4Q25) (0.3) (4Q24) (10.1) (4Q25) (14.2) (4Q26) (0.2) (1Q25) (0.2) (4Q24) 0.8 (4Q24) Inflation rate (YoY % change, max) 3 3.9 (3Q25) 3.9 (3Q25) 4.6 (2Q25) 2.6 (2Q25) 3.4 (1Q25) 3.0 (3Q25) 6.1 (3Q25) Central bank policy rate (%, max) 2 5.3 (4Q24) 5.1 (4Q24) 5.5 (4Q24) 3.4 (4Q24) 3.8 (2Q25) 5.1 (4Q24) 11.6 (2Q25) 1    Cumulative change to the lowest level of the series during the 20-quarter projection. 2    Highest projected unemployment or policy rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. 3    Highest projected year-on-year percentage change in inflation in the scenario. Consensus Downside scenario 2024–2028 (as at 4Q23) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 (1.0) (2Q25) (1.4) (3Q24) (1.6) (3Q25) (1.5) (1Q24) (0.3) (2Q24) 1.4 (1Q24) (0.3) (4Q24) Unemployment rate (%, max) 2 6.4 (1Q25) 5.6 (4Q24) 4.7 (4Q25) 6.9 (4Q25) 8.5 (4Q24) 3.7 (4Q25) 3.5 (4Q25) House price index (%, start-to-trough) 1 (12.0) (2Q25) (1.3) (3Q24) (9.6) (4Q24) (7.1) (3Q25) (1.2) (3Q24) 0.3 (1Q24) 1.2 (1Q24) Inflation rate (YoY % change, max) 3 4.1 (1Q24) 3.5 (4Q24) 3.8 (3Q24) 3.5 (4Q24) 3.8 (2Q24) 3.0 (1Q24) 6.5 (4Q24) Central bank policy rate (%, max) 2 5.7 (1Q24) 5.6 (1Q24) 6.0 (1Q24) 3.2 (3Q24) 4.2 (1Q24) 5.7 (1Q24) 12.0 (3Q24) 1    Cumulative change to the lowest level of the series during the 20-quarter projection. 2    Highest projected unemployment or policy rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. 3    Highest projected year-on-year percentage change in inflation in the scenario. Downside 2 scenario 4Q24–3Q29 (as at 3Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 (8.6) (1Q26) (4.1) (4Q25) (7.9) (1Q26) (7.8) (3Q25) (8.1) (4Q25) (6.6) (1Q26) (9.3) (2Q26) Unemployment rate (%, max) 2 8.3 (1Q26) 9.2 (4Q25) 6.3 (3Q25) 6.8 (3Q26) 10.2 (3Q26) 5.1 (2Q25) 5.4 (4Q25) House price index (%, start-to-trough) 1 (28.2) (3Q26) (15.9) (3Q25) (40.2) (2Q27) (32.1) (4Q26) (14.0) (1Q27) (12.0) (1Q27) 0.8 (4Q24) Inflation rate (YoY % change, max) 3 9.9 (1Q25) 4.6 (3Q25) 5.0 (2Q25) 5.1 (3Q25) 8.4 (1Q25) 3.5 (2Q25) 6.6 (3Q25) Central bank policy rate (%, max) 2 5.8 (4Q24) 5.9 (4Q24) 6.2 (4Q24) 3.9 (2Q25) 4.8 (4Q24) 5.9 (4Q24) 12.2 (2Q25) 1    Cumulative change to the lowest level of the series during the 20-quarter projection. 2 Highest projected unemployment or policy rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. 3 Highest projected year-on-year percentage change in inflation in the scenario. 56 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Downside 2 scenario 2024–2028 (as at 4Q23) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 (8.8) (2Q25) (4.6) (1Q25) (8.2) (1Q25) (6.4) (1Q25) (6.6) (1Q25) (4.9) (2Q25) (8.1) (2Q25) Unemployment rate (%, max) 2 8.4 (2Q25) 9.3 (2Q25) 6.4 (4Q24) 7.0 (4Q25) 10.2 (4Q25) 4.3 (3Q24) 4.9 (2Q25) House price index (%, start-to-trough) 1 (30.2) (4Q25) (14.7) (4Q24) (32.8) (3Q26) (25.5) (4Q25) (14.5) (2Q26) (2.9) (4Q25) 1.2 (1Q24) Inflation rate (YoY % change, max) 3 10.1 (2Q24) 4.8 (2Q24) 4.1 (3Q24) 4.1 (4Q24) 8.6 (2Q24) 3.5 (2Q24) 7.0 (4Q24) Central bank policy rate (%, max) 2 6.0 (1Q24) 6.1 (1Q24) 6.4 (1Q24) 4.1 (3Q24) 5.2 (1Q24) 6.1 (1Q24) 12.7 (3Q24) 1    Cumulative change to the lowest level of the series during the 20-quarter projection. 2    Highest projected unemployment or policy rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. 3    Highest projected year-on-year percentage change in inflation in the scenario. The following table describes the probabilities assigned in each scenario. Scenario weightings, % Standard weights UK US Hong Kong Mainland China France UAE Mexico 3Q24 Upside 10 10 10 10 10 10 10 10 Central 75 75 75 75 75 75 75 75 Downside 10 10 10 10 10 10 10 10 Downside 2 5 5 5 5 5 5 5 5 4Q23 Upside 10 10 10 10 10 10 10 10 Central 75 75 75 75 75 75 75 75 Downside 10 10 10 10 10 10 10 10 Downside 2 5 5 5 5 5 5 5 5 At 30 September 2024, scenario weights are consistent with those applied in the previous quarter and at 31 December 2023. The consensus Upside and Central scenarios for all key markets have a combined weighting of 85%, with the remaining 15% assigned to the two Downside scenarios. Management assessed that forecast dispersion around the consensus estimate had remained stable and that market measures of volatility had stayed low. Risks were deemed to be adequately reflected in outer scenarios at their calibrated probability. Management judgemental adjustments In the context of IFRS 9, management judgemental adjustments are typically short-term increases or decreases to the modelled allowance for ECL at either a customer, segment or portfolio level where management believes allowances do not sufficiently reflect the credit risk/expected credit losses at the reporting date. These can relate to risks or uncertainties that are not reflected in the models and/or to any late-breaking events with significant uncertainty, subject to management review and challenge. This includes refining model inputs and outputs and using adjustments to ECL based on management judgement and quantitative analysis for impacts that are difficult to model. The effects of management judgemental adjustments are considered for both balances and allowance for ECL when determining whether or not a significant increase in credit risk has occurred and is allocated to a stage where appropriate. This is in accordance with the internal adjustments framework. Management judgemental adjustments are reviewed under the governance process for IFRS 9, as detailed in the section ‘Credit risk management’ on page 183 of the Annual Report and Accounts 2023 on Form 20-F. Review and challenge focuses on the rationale and quantum of the adjustments with a further review carried out by the second line of defence where significant. For some management judgemental adjustments, internal frameworks establish the conditions under which these adjustments should no longer be required and as such are considered as part of the governance process. This internal governance process allows management judgemental adjustments to be reviewed regularly and, where possible, to reduce the reliance on these through model recalibration or redevelopment, as appropriate. The drivers of management judgemental adjustments continue to evolve with the economic environment and as new risks emerge. In addition to management judgemental adjustments there are also ‘Other adjustments’, which are made to address process limitations, data/model deficiencies and can also include, where appropriate, the impact of new models where governance has sufficiently progressed to allow an accurate estimate of ECL allowance to be incorporated into the total reported ECL. ‘Management judgemental adjustments’ and ‘Other adjustments’ constitute the total value of adjustments to modelled allowance for ECL. For the wholesale portfolio, defaulted exposures are assessed individually and management judgemental adjustments are made only to the performing portfolio. At 30 September 2024, there was a $0.4bn reduction in management judgemental adjustments compared with 31 December 2023. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 57 Earnings Release 3Q24 on Form 6-K Management judgemental adjustments made in estimating the scenario-weighted reported allowance for ECL at 30 September 2024 are set out in the following table. Management judgemental adjustments to ECL at 30 September 2024 1 Retail Wholesale 2 Total $bn $bn $bn Modelled ECL (A) 3 2.7 1.9 4.6 Banks, sovereigns, government entities and low-risk counterparties 0.0 0.0 Corporate lending adjustments 0.2 0.2 Inflation-related adjustments 0.0 0.0 Other credit judgements 0.1 0.1 Total management judgemental adjustments (B) 4 0.1 0.2 0.3 Other adjustments (C) 5 (0.1) 0.1 0.0 Final ECL (A + B + C) 6 2.7 2.2 4.9 Management judgemental adjustments to ECL at 31 December 2023 1,7 Retail Wholesale 2 Total $bn $bn $bn Modelled ECL (A) 3 2.6 2.4 5.0 Banks, sovereigns, government entities and low-risk counterparties 0.0 0.0 Corporate lending adjustments 0.1 0.1 Inflation-related adjustments 0.1 0.1 Other credit judgements 0.5 0.5 Total management judgemental adjustments (B) 4 0.6 0.1 0.7 Other adjustments (C) 5 0.0 0.0 0.0 Final ECL (A + B + C) 6 3.2 2.5 5.7 1    Management judgemental adjustments presented in the table reflect increases or (decreases) to allowance for ECL, respectively. 2    The wholesale portfolio corresponds to adjustments to the performing portfolio (stage 1 and stage 2). 3    (A) refers to probability-weighted allowance for ECL before any adjustments are applied. 4    (B) refers to adjustments that are applied where management believes allowance for ECL does not sufficiently reflect the credit risk/expected credit losses of any given portfolio at the reporting date. These can relate to risks or uncertainties that are not reflected in the model and/or to any late-breaking events. 5    (C) refers to adjustments to allowance for ECL made to address process limitations, data/model deficiencies, and can also include, where appropriate, the impact of new models where governance has sufficiently progressed to allow an accurate estimate of ECL allowance to be incorporated into the total reported ECL. 6    As presented within our internal credit risk governance (see page 183 of the Annual Report and Accounts 2023 on Form 20-F). 7    31 December 2023 includes the allowance for ECL related to the Canada banking business and retail banking operations in France. At 30 September 2024, wholesale management judgemental adjustments were an increase to allowance for ECL of $0.2bn (31 December 2023: $0.1bn increase), mostly to reflect heightened uncertainty in specific sectors and geographies, including adjustments to exposures to the real estate sectors booked in Hong Kong, mainland China and the US. In the retail portfolio, management judgemental adjustments were an increase to modelled ECL of $0.1bn at 30 September 2024 (31 December 2023: $0.6bn increase). The decrease in management judgemental adjustments to ECL allowance compared with 31 December 2023 was primarily attributed to the UK, where performance continued to remain resilient and modelled ECL becomes more reflective of expected credit performance. Economic scenarios sensitivity analysis of ECL estimates Management considered the sensitivity of the ECL outcome against the economic forecasts as part of the ECL governance process by recalculating the ECL under each scenario described above for selected portfolios, applying a 100% weighting to each scenario in turn. The weighting is reflected in both the determination of a significant increase in credit risk and the measurement of the resulting ECL. The allowance for ECL calculated for the Upside and Downside scenarios should not be taken to represent the upper and lower limits of possible ECL outcomes. The impact of defaults that might occur in the future under different economic scenarios is captured by recalculating ECL for loans at the balance sheet date. There is a particularly high degree of estimation uncertainty in numbers representing more severe risk scenarios when assigned a 100% weighting. For wholesale credit risk exposures, the sensitivity analysis excludes allowance for ECL and financial instruments related to defaulted (stage 3) obligors. Loans to defaulted obligors are a small portion of the overall wholesale lending exposure, even if representing the majority of the allowance for ECL. The measurement of stage 3 ECL is relatively more sensitive to credit factors specific to the obligor than future economic scenarios, and therefore the effects of macroeconomic factors are not necessarily the key consideration when performing individual assessments of allowances for obligors in default. Due to the range and specificity of the credit factors to which the ECL is sensitive, it is not possible to provide a meaningful alternative sensitivity analysis for a consistent set of risks across all defaulted obligors. For retail credit risk exposures, the sensitivity analysis includes ECL allowance for loans and advances to customers related to defaulted obligors. This is because the retail ECL allowance for secured mortgage portfolios, including loans in all stages, is sensitive to macroeconomic variables. 58 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Group ECL sensitivity results The allowance for ECL of the scenarios and management judgemental adjustments is highly sensitive to movements in economic forecasts. If the Group allowance for ECL balance was estimated solely on the basis of the Central scenario, Downside scenario or the Downside 2 scenario at 30 September 2024, it would increase/(decrease) as presented in the below table. Retail Wholesale 1 Total Group ECL at 30 Sep 2024 2,3 $bn $bn Reported ECL 2.5 2.2 Scenarios 100% consensus Central scenario (0.1) (0.2) 100% consensus Upside scenario (0.2) (0.6) 100% consensus Downside scenario 0.0 0.8 100% Downside 2 scenario 1.9 4.1 Total Group ECL at 31 Dec 2023 2,3 Reported ECL 3.0 2.5 Scenarios 100% consensus Central scenario (0.1) (0.2) 100% consensus Upside scenario (0.5) (0.7) 100% consensus Downside scenario 0.4 0.8 100% Downside 2 scenario 2.1 4.5 1    Includes low credit-risk financial instruments, such as debt instruments at FVOCI, which have high carrying values but low ECL under all the scenarios. 2    ECL sensitivities exclude portfolios utilising less complex modelling approaches for the retail portfolio and defaulted obligors for the wholesale portfolio. 3    30 September 2024 excludes the Canada banking business, the sale of which completed on 28 March 2024. 31 December 2023 includes the Canada banking business. 30 September 2024 excludes the retained portfolio following the sale of retail banking operations in France, which completed on 1 January 2024. 31 December 2023 includes all retail banking operations in France. At 30 September 2024, the Group allowance for ECL decreased in the retail portfolio by $0.5bn and decreased by $0.3bn in the wholesale portfolio, compared with 31 December 2023. There was also a reduction in ECL sensitivity across all scenarios within the retail and wholesale portfolios since 31 December 2023, primarily as a result of the sale of our Canada banking business and sale of our retail banking operations in France during the first half of 2024. This was the main driver of the decrease in Downside 2 ECL sensitivity for the wholesale portfolio. At 30 September 2024 the retail portfolio sensitivity of the allowance for ECL across all scenarios was lower compared with 31 December 2023. This was due to lower reported ECL levels, reduced macroeconomic forecast uncertainty, reduction in management judgemental adjustments and the implementation of revised models and model methodology across many of the portfolios. This revised methodology maintains the higher sensitivity to the Downside 2 scenario while better reflecting the lower sensitivity to the consensus scenarios. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 59 Earnings Release 3Q24 on Form 6-K Personal lending Total personal lending for loans and advances to customers at amortised cost by stage distribution Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total $m $m $m $m $m $m $m $m By legal entity HSBC UK Bank plc 158,071 36,533 1,258 195,862 (158) (344) (257) (759) HSBC Bank plc 1 24,251 1,574 337 26,162 (18) (24) (104) (146) The Hongkong and Shanghai Banking Corporation Limited 195,828 6,328 1,165 203,321 (171) (370) (169) (710) HSBC Bank Middle East Limited 3,597 140 49 3,786 (15) (27) (31) (73) HSBC North America Holdings Inc. 20,032 490 350 20,872 (5) (13) (13) (31) Grupo Financiero HSBC, S.A. de C.V. 11,565 1,214 632 13,411 (155) (396) (282) (833) Other trading entities 1 744 49 3 796 (6) (2) (2) (10) At 30 Sep 2024 414,088 46,328 3,794 464,210 (528) (1,176) (858) (2,562) By legal entity HSBC UK Bank plc 146,354 35,190 1,218 182,762 (152) (490) (255) (897) HSBC Bank plc 14,598 1,747 273 16,618 (24) (22) (91) (137) The Hongkong and Shanghai Banking Corporation Limited 191,382 7,741 948 200,071 (165) (402) (162) (729) HSBC Bank Middle East Limited 3,335 397 47 3,779 (19) (33) (36) (88) HSBC North America Holdings Inc. 18,096 553 364 19,013 (5) (14) (16) (35) Grupo Financiero HSBC, S.A. de C.V. 12,717 1,740 536 14,993 (197) (463) (273) (933) Other trading entities 10,052 115 119 10,286 (17) (10) (21) (48) At 31 Dec 2023 396,534 47,483 3,505 447,522 (579) (1,434) (854) (2,867) 1    At 31 December 2023, ‘Other trading entities‘ included gross carrying amount of $9,079m and allowances for ECL of $23m related to Private Banking entities that were reclassified to HSBC Bank plc to continue the process of simplifying our structure. Wholesale lending Total wholesale lending for loans and advances to banks and customers at amortised cost by stage distribution Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m By legal entity HSBC UK Bank plc 84,676 13,908 3,820 — 102,404 (219) (407) (698) — (1,324) HSBC Bank plc 1 90,536 7,175 2,490 45 100,246 (66) (97) (770) (18) (951) The Hongkong and Shanghai Banking Corporation Limited 301,325 28,384 11,985 37 341,731 (172) (605) (4,132) (23) (4,932) HSBC Bank Middle East Limited 25,225 1,309 843 5 27,382 (27) (9) (477) (1) (514) HSBC North America Holdings Inc. 31,302 5,028 550 — 36,880 (34) (126) (120) — (280) Grupo Financiero HSBC, S.A. de C.V. 13,028 1,360 230 — 14,618 (36) (44) (132) — (212) Other trading entities 1 8,858 385 354 — 9,597 (12) (4) (179) — (195) Holding companies, shared service centres and intra-Group eliminations 69 — — — 69 — — — — — At 30 Sep 2024 555,019 57,549 20,272 87 632,927 (566) (1,292) (6,508) (42) (8,408) By legal entity HSBC UK Bank plc 76,793 18,735 3,769 — 99,297 (213) (474) (593) — (1,280) HSBC Bank plc 82,025 8,452 2,673 40 93,190 (69) (138) (1,035) (7) (1,249) The Hongkong and Shanghai Banking Corporation Limited 287,876 37,402 7,077 38 332,393 (185) (696) (3,349) (21) (4,251) HSBC Bank Middle East Limited 21,927 1,598 894 3 24,422 (17) (11) (571) (2) (601) HSBC North America Holdings Inc. 30,797 5,712 583 — 37,092 (24) (145) (127) — (296) Grupo Financiero HSBC, S.A. de C.V. 13,714 1,186 382 — 15,282 (39) (56) (231) — (326) Other trading entities 11,164 1,739 392 — 13,295 (14) (13) (192) — (219) Holding companies, shared service centres and intra-Group eliminations 33 — — — 33 — — — — — At 31 Dec 2023 524,329 74,824 15,770 81 615,004 (561) (1,533) (6,098) (30) (8,222) 1    At 31 December 2023, ‘Other trading entities‘ included gross carrying amount of $1,792m and allowances for ECL of $1m related to Private Banking entities that were reclassified to HSBC Bank plc to continue the process of simplifying our structure . 60 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Commercial real estate The following table presents the Group’s exposure to borrowers classified in the commercial real estate sector where the ultimate parent is based in mainland China, as well as all commercial real estate exposures booked on mainland China balance sheets. The exposures and allowances for ECL at 30 September 2024 are split by country/territory and credit quality. Additionally, allowances for ECL are split by stage. Commercial real estate financing refers to lending that focuses on commercial development and investment in real estate and covers commercial, residential and industrial assets. The exposures in the table are related to companies whose primary activities are focused on these areas. The table also includes financing provided to a corporate or financial entity for the purchase or financing of a property that supports the overall operations of the business. Such exposures are outside of our normal definition of commercial real estate, as applied elsewhere in this Earnings Release 3Q24 on Form 6-K, but are provided here for a more comprehensive view of our property exposures in mainland China. Mainland China commercial real estate Hong Kong Mainland China Rest of the Group Total $m $m $m $m Loans and advances to customers 1 4,342 4,149 327 8,818 Guarantees issued and others 2 47 16 6 69 Total mainland China commercial real estate exposure at 30 Sep 2024 4,389 4,165 333 8,887 Distribution of mainland China commercial real estate exposure by credit quality Strong 186 1,614 110 1,910 Good 542 872 1 1,415 Satisfactory 214 1,184 53 1,451 Sub-standard 817 150 150 1,117 Credit impaired 2,630 345 19 2,994 At 30 Sep 2024 4,389 4,165 333 8,887 Allowance for ECL by credit quality Strong — (4) — (4) Good — (4) — (4) Satisfactory — (16) — (16) Sub-standard (140) (26) (17) (183) Credit impaired (1,780) (108) (3) (1,891) At 30 Sep 2024 (1,920) (158) (20) (2,098) Allowance for ECL by stage distribution Stage 1 — (10) — (10) Stage 2 (140) (40) (17) (197) Stage 3 (1,778) (108) (3) (1,889) POCI (2) — — (2) At 30 Sep 2024 (1,920) (158) (20) (2,098) ECL coverage % 43.7 3.8 6.0 23.6 1    Amounts represent gross carrying amount. 2    Amounts represent nominal amount for guarantees and other contingent liabilities. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 61 Earnings Release 3Q24 on Form 6-K Mainland China commercial real estate (continued) Hong Kong Mainland China Rest of the Group Total $m $m $m $m Loans and advances to customers 1 6,033 4,917 839 11,789 Guarantees issued and others 2 255 66 37 358 Total mainland China commercial real estate exposure at 31 Dec 2023 6,288 4,983 876 12,147 Distribution of mainland China commercial real estate exposure by credit quality Strong 781 1,723 6 2,510 Good 604 953 421 1,978 Satisfactory 679 1,704 261 2,644 Sub-standard 1,298 327 188 1,813 Credit impaired 2,926 276 — 3,202 At 31 Dec 2023 6,288 4,983 876 12,147 Allowance for ECL by credit quality Strong — (3) — (3) Good — (5) (1) (6) Satisfactory (3) (27) — (30) Sub-standard (66) (87) (16) (169) Credit impaired (1,726) (125) — (1,851) At 31 Dec 2023 (1,795) (247) (17) (2,059) Allowance for ECL by stage distribution Stage 1 — (10) — (10) Stage 2 (69) (112) (17) (198) Stage 3 (1,726) (125) — (1,851) At 31 Dec 2023 (1,795) (247) (17) (2,059) ECL coverage % 28.5 5.0 1.9 17.0 1    Amounts represent gross carrying amount. 2    Amounts represent nominal amount for guarantees and other contingent liabilities. The table above shows that commercial real estate financing exposures were $8.9bn at 30 September 2024, down from $12.1bn at 31 December 2023. The reduction was mainly due to repayments by performing customers. Total ‘credit impaired’ exposures at 30 September 2024 were stable, standing at $3.0bn, down from $3.2bn at 31 December 2023. Allowances for ECL are substantially against unsecured exposures. For secured exposures, allowances for ECL are minimal, reflecting the nature and value of the security held. Facilities booked in Hong Kong continued to represent the largest proportion of mainland China commercial real estate exposures, although total exposures fell to $4.4bn, down by $1.9bn since 31 December 2023, as a result of de-risking measures, repayments and write-offs. This portfolio remains relatively higher risk, with $2.6bn (31 December 2023: $2.9bn) of exposures in the ‘credit impaired’ category. At 30 September 2024, the Group had allowances for ECL of $1.9bn (31 December 2023: $1.8bn) held against commercial real estate exposures for companies whose ultimate parent is based in mainland China and which are booked in Hong Kong. ECL coverage increased to 43.7% (31 December 2023: 28.5%) to reflect the assessment of risk associated with this portfolio. Approximately half of the performing exposure in the Hong Kong portfolio is lending to state-owned enterprises and relatively strong privately-owned enterprises. This is reflected in the relatively low allowance for ECL in this part of the portfolio. Mainland China property market activity remains subdued with housing demand yet to meaningfully recover. Stimulus measures introduced in September 2024 nevertheless demonstrate the government’s determination to stabilise the sector, and while further policy support may be required, these measures represent concerted government efforts to improve market confidence and demand. We continue to monitor developments in the real estate sector closely, including the extent to which government support measures are driving a sustained stabilisation of property market fundamentals and financing conditions. The Group has additional exposures to mainland China commercial real estate as a result of lending to multinational corporates booked outside of mainland China, which is not incorporated in the table above. 62 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Capital risk Capital overview Capital and liquidity adequacy metrics At 30 Sep 2024 30 Jun 2024 Risk-weighted assets (‘RWAs‘) ($bn) Credit risk 690.0 664.1 Counterparty credit 37.6 36.8 Market risk 37.4 37.9 Operational risk 98.9 96.3 Total risk-weighted assets 863.9 835.1 Capital on a transitional basis ($bn) Common equity tier 1 capital 131.4 125.3 Tier 1 capital 150.6 144.3 Total capital 179.8 172.1 Capital ratios on a transitional basis (%) Common equity tier 1 ratio 15.2 15.0 Tier 1 ratio 17.4 17.3 Total capital ratio 20.8 20.6 Capital on an end point basis ($bn) Common equity tier 1 capital 131.4 125.3 Tier 1 capital 150.6 144.3 Total capital 175.6 168.1 Capital ratios on an end point basis (%) Common equity tier 1 ratio 15.2 15.0 Tier 1 ratio 17.4 17.3 Total capital ratio 20.3 20.1 Liquidity coverage ratio (‘LCR’) Total high-quality liquid assets ($bn) 649.2 646.1 Total net cash outflow ($bn) 473.0 472.3 LCR (%) 1 137 137 1    We enhanced our calculation processes during 1H24. As the Group LCR is reported as a 12-month average, the benefit of these changes is being recognised incrementally over the year starting from 30 June 2024. References to EU regulations and directives (including technical standards) should, as applicable, be read as references to the UK’s version of such regulation or directive, as onshored into UK law under the European Union (Withdrawal) Act 2018, and as may be subsequently amended under UK law. Capital figures and ratios in the previous table are calculated in accordance with the regulatory requirements of the Capital Requirements Regulation and Directive, the CRR II regulation and the Prudential Regulation Authority (’PRA’) Rulebook (’CRR II’). The table presents them under the transitional arrangements in CRR II for capital instruments and after their expiry, known as the end point. Regulatory numbers and ratios are as presented at the date of reporting. Small changes may exist between these numbers and ratios and those subsequently submitted in regulatory filings. Where differences are significant, we may restate in subsequent periods. Capital At 30 September 2024, our CET1 capital ratio increased to 15.2% from 15.0% at 30 June 2024, driven by an increase in CET1 capital of $6.1bn, partly offset by an increase in RWAs of $28.8bn. The key drivers impacting the CET1 ratio were: – a 0.3 percentage point increase from capital generation, mainly through regulatory profits and other reserves, partly offset by dividends and the share buy-back announced with our 2Q24 results; – a 0.1 percentage point increase from the favourable impact of foreign exchange fluctuations; and – a 0.2 percentage point decrease driven by higher RWAs, mainly from asset size and asset quality movements. Our Pillar 2A requirement at 30 September 2024, as per the PRA’s Individual Capital Requirement based on a point-in-time assessment, was equivalent to 2.6% of RWAs, of which 1.5% was required to be met by CET1. Throughout 3Q24, we complied with the PRA’s regulatory capital adequacy requirement. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 63 Earnings Release 3Q24 on Form 6-K Leverage Leverage ratio At 30 Sep 2024 30 Jun 2024 $bn $bn Tier 1 capital (leverage) 150.6 144.3 Total leverage ratio exposure 2,657.8 2,514.5 % % Leverage ratio 5.7 5.7 Our leverage ratio was 5.7% at 30 September 2024, unchanged from 30 June 2024. The increase in the leverage exposures led to a 0.3 percentage point fall in the leverage ratio, primarily due to growth in the balance sheet, which was offset by a 0.3 percentage point increase due to an increase in tier 1 capital. At 30 September 2024, our UK minimum leverage ratio requirement of 3.25% was supplemented by a leverage ratio buffer of 1.0%, which consists of an additional leverage ratio buffer of 0.7% and a countercyclical leverage ratio buffer of 0.3%. These buffers translated into capital values of $18.6bn and $8.0bn respectively. We exceeded these leverage requirements throughout 3Q24. Risk-weighted assets RWAs by global business WPB CMB GBM Corporate Centre Total RWAs $bn $bn $bn $bn $bn Credit risk 155.1 313.2 135.9 85.8 690.0 Counterparty credit risk 0.8 0.3 35.3 1.2 37.6 Market risk 1.7 1.4 27.7 6.6 37.4 Operational risk 34.1 33.7 33.3 (2.2) 98.9 At 30 Sep 2024 191.7 348.6 232.2 91.4 863.9 At 30 Jun 2024 182.5 335.7 225.1 91.8 835.1 RWAs by legal entities 1 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations 2 Total RWAs $bn $bn $bn $bn $bn $bn $bn $bn $bn $bn Credit risk 121.4 76.9 326.6 19.6 63.6 — 24.1 49.1 8.7 690.0 Counterparty credit risk 0.3 20.1 10.6 0.5 3.6 — 0.5 2.0 — 37.6 Market risk 3 0.2 25.0 27.2 1.6 3.0 — 0.8 1.8 2.5 37.4 Operational risk 18.9 18.8 47.2 3.7 7.2 — 4.5 4.7 (6.1) 98.9 At 30 Sep 2024 140.8 140.8 411.6 25.4 77.4 — 29.9 57.6 5.1 863.9 At 30 Jun 2024 131.5 137.1 401.2 26.1 76.8 — 31.3 55.0 4.9 835.1 1    Balances are on a third-party Group consolidated basis. 2    Balances include HSBC Bank Canada operational risk RWAs due to the averaging calculation and will roll off over future reporting cycles. 3    Market risk RWAs are non-additive across the legal entities due to diversification effects within the Group. RWA movement by global business by key driver Credit risk, counterparty credit risk and operational risk Market risk Total RWAs WPB CMB GBM Corporate Centre $bn $bn $bn $bn $bn $bn RWAs at 1 Jul 2024 181.3 334.5 197.4 84.0 37.9 835.1 Asset size 3.7 5.9 1.6 1.3 (0.7) 11.8 Asset quality — 0.9 2.2 1.1 — 4.2 Model updates 1.6 0.6 — (3.3) — (1.1) Methodology and policy — (1.9) — 0.9 0.2 (0.8) Acquisitions and disposals (0.1) — — — — (0.1) Foreign exchange movements 1 3.5 7.2 3.3 0.8 — 14.8 Total RWA movement 8.7 12.7 7.1 0.8 (0.5) 28.8 RWAs at 30 Sep 2024 190.0 347.2 204.5 84.8 37.4 863.9 1    Credit risk foreign exchange movements in this disclosure are computed by retranslating RWAs into US dollars based on the underlying transactional currencies, and other movements in the table are presented on a constant currency basis. 64 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K RWA movement by legal entities by key driver 1 Credit risk, counterparty credit risk and operational risk HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Market risk Total RWAs $bn $bn $bn $bn $bn $bn $bn $bn $bn $bn $bn RWAs at 1 Jul 2024 131.3 111.6 372.0 23.5 73.1 — 30.5 53.5 1.7 37.9 835.1 Asset size 3.4 0.6 4.9 0.4 (0.1) — 0.4 2.7 0.2 (0.7) 11.8 Asset quality (0.1) 0.6 2.8 — 0.9 — — — — — 4.2 Model updates — (0.5) (0.2) (0.4) — — — — — — (1.1) Methodology and policy (1.0) — (1.0) 0.2 0.4 — — — 0.4 0.2 (0.8) Acquisitions and disposals — — (0.1) — — — — — — — (0.1) Foreign exchange movements 2 7.0 3.5 6.0 0.1 0.1 — (1.8) (0.4) 0.3 — 14.8 Total RWA movement 9.3 4.2 12.4 0.3 1.3 — (1.4) 2.3 0.9 (0.5) 28.8 RWAs at 30 Sep 2024 140.6 115.8 384.4 23.8 74.4 — 29.1 55.8 2.6 37.4 863.9 1    Balances are on a third-party Group consolidated basis. 2    Credit risk foreign exchange movements in this disclosure are computed by retranslating RWAs into US dollars based on the underlying transactional currencies, and other movements in the table are presented on a constant currency basis. RWAs increased by $28.8bn during 3Q24, including a rise of $14.8bn due to foreign currency translation differences. The remaining $14.0bn increase in RWAs was predominantly attributed to asset size and asset quality movements. Asset size CMB RWAs rose by $5.9bn, due to an increase in corporate lending, mainly in HSBC UK Bank plc and Asia, and higher sovereign exposures in Asia. WPB RWAs increased by $3.7bn, due to retail portfolio growth and an increase in sovereign exposures in Asia and Other trading entities. GBM RWAs increased by $1.6bn, primarily due to higher securities financing exposures and an increased derivatives portfolio in counterparty credit risk, notably in HSBC Bank plc. The increase was partly offset by a fall in corporate exposures, primarily in Asia and the US. Corporate Centre RWAs increased by $1.3bn, largely driven by movements related to investments in associates from lending growth in SAB and our holding in BoCom, reflected in Other trading entities and Asia respectively. The $0.7bn decrease in market risk RWAs was mainly attributed to lower value at risk and foreign exchange exposures, which was partly offset by a rise in stressed value at risk, and a higher incremental risk charge from increased positions. Asset quality The $4.2bn rise in RWAs was mainly due to unfavourable credit risk migrations in Asia, including in the Hong Kong commercial real estate sector, and the US. Model update The $1.1bn fall in RWAs was mainly driven by a $2.2bn change to the financial institutions models, partly offset by an increase in the post-model adjustment for the Hong Kong mortgage model. Methodology and policy Credit risk parameter refinements offset by methodology changes, mainly in Asia, HSBC UK Bank plc and the US, led to an RWA decrease of $0.8bn. HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 65 Earnings Release 3Q24 on Form 6-K Regulatory and other developments In the UK, the PRA published its second set of near-final rules on credit risk, the output floor, and reporting and disclosure elements of Basel III Reforms (’Basel 3.1’) in September 2024. Near-final rules in relation to the market risk, credit valuation adjustments, counterparty risk and operational risk elements of the package were published by the PRA in December 2023. The implementation date is delayed by a further six months to 1 January 2026, with an output floor transitional period of four years until 31 December 2029. We continue to assess the impact of Basel 3.1 standards on our capital, including the recent release of more beneficial PRA near-final rules, developments in the US and associated implementation challenges (including data provision). We continue to expect that the impact on our CET1 ratio at 1 January 2026 will be immaterial. The work by Basel on climate-related financial risks across all three pillars of regulation, supervision and disclosure is ongoing. The initial work by Basel concluded that climate risk drivers, including physical and transition risks, can be captured in traditional financial risk categories such as credit, market, operational and liquidity risks. As part of its wider efforts to improve ESG risk coverage, Basel consulted in November 2023 on a Pillar 3 disclosures framework for climate-related financial risks with a proposed effective date of 1 January 2026. Regulatory transitional arrangements for IFRS 9 ‘Financial Instruments‘ We have adopted the regulatory transitional arrangements of the Capital Requirements Regulation for IFRS 9, including paragraph four of article 473a. These allow banks to add back to their capital base a proportion of the impact that IFRS 9 has upon their loan loss allowances. Our capital and ratios are presented under these arrangements throughout the tables in this section, including the end point figures. For further details, see our Pillar 3 Disclosures at 30 September 2024, which is expected to be published on or around 5 November 2024 at www.hsbc.com/investors. 66 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Additional information Dividends Second interim dividend for 2024 On 31 July 2024, the Directors approved a second interim dividend for 2024 of $0.10 per ordinary share, which was paid on 27 September 2024 in cash. The sterling and Hong Kong dollar amounts of approximately £0.075817 and HK$0.779073 were calculated using the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00am on 16 September 2024. Third interim dividend for 2024 On 29 October 2024, the Directors approved a third interim dividend in respect of the financial year ending 31 December 2024 of $0.10 per ordinary share (the ‘dividend‘), a distribution of approximately $1.814bn. The dividend will be payable on 19 December 2024 to holders of record on the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 8 November 2024. The dividend will be payable in US dollars, or in pounds sterling or Hong Kong dollars at the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00am on 9 December 2024. The ordinary shares in London, Hong Kong and Bermuda will be quoted ex-dividend on 7 November 2024. American Depositary Shares (‘ADSs’) in New York will be quoted ex-dividend on 8 November 2024. The default currency on the Principal Register in the UK is pounds sterling, and dividends can also be paid in Hong Kong dollars or US dollars, or a combination of these currencies. International shareholders can register to join the Global Dividend Service to receive dividends in their local currencies. Please register and read the terms and conditions at www.investorcentre.co.uk. UK shareholders can also register their sterling bank mandates at www.investorcentre.co.uk. The default currency on the Hong Kong Overseas Branch Register is Hong Kong dollars, and dividends can also be paid in US dollars or pounds sterling, or a combination of these currencies. Shareholders can arrange for direct credit of Hong Kong dollar cash dividends into their bank account, or arrange to send US dollar or pound sterling cheques to the credit of their bank account. Shareholders can register for these services at www.investorcentre.com/hk. Shareholders can also download a dividend currency election form from www.hsbc.com/dividends, www.investorcentre.com/hk, or www.hkexnews.hk. The default currency on the Bermuda Overseas Branch Register is US dollars, and dividends can also be paid in Hong Kong dollars or pounds sterling, or a combination of these currencies. Shareholders can change their dividend currency election by contacting the Bermuda investor relations team. Shareholders can download a dividend currency election form from www.hsbc.com/dividends. Changes to currency elections must be received by 5 December 2024 to be effective for this dividend. The dividend will be payable on ADSs, each of which represents five ordinary shares, on 19 December 2024 to holders of record on 8 November 2024. The dividend of $0.50 per ADS will be payable by the depositary in US dollars. Alternatively, the cash dividend may be invested in additional ADSs by participants in the dividend reinvestment plan operated by the depositary. Elections must be received by 29 November 2024. Any person who has acquired ordinary shares registered on the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register but who has not lodged the share transfer with the Principal Registrar in the UK, Hong Kong Overseas Branch Registrar or Bermuda Overseas Branch Registrar should do so before 4.00pm local time on 8 November 2024 in order to receive the dividend. Ordinary shares may not be removed from or transferred to the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 8 November 2024. Any person wishing to remove ordinary shares to or from each register must do so before 4.00pm local time on 7 November 2024. Shares repurchased under HSBC Holdings plc buy-backs, which have not yet been cancelled from the Hong Kong custodians CCASS account as at the record date, will not be eligible for the dividend. Transfers of ADSs must be lodged with the depositary by 11.00am on 8 November 2024 in order to receive the dividend. ADS holders who receive a cash dividend will be charged a fee, which will be deducted by the depositary, of $0.005 per ADS per cash dividend. Dividend on preference shares A quarterly dividend of £0.01 per Series A sterling preference share is payable on 15 March, 17 June, 16 September and 16 December 2024 for the quarter then ended at the sole and absolute discretion of the Board of HSBC Holdings plc. Accordingly, the Board of HSBC Holdings plc has approved a quarterly dividend to be payable on 16 December 2024 to holders of record on 29 November 2024. For and on behalf of HSBC Holdings plc Aileen Taylor Company Secretary The Board of Directors of HSBC Holdings plc as at the date of this announcement comprises: Sir Mark Edward Tucker*, Georges Bahjat Elhedery, Geraldine Joyce Buckingham † , Rachel Duan † , Dame Carolyn Julie Fairbairn † , James Anthony Forese † , Ann Frances Godbehere † , Steven Craig Guggenheimer † , Dr José Antonio Meade Kuribreña † , Kalpana Jaisingh Morparia † , Eileen K Murray † , Brendan Robert Nelson † and Swee Lian Teo † . *    Non-executive Group Chairman †    Independent non-executive Director HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 67 Earnings Release 3Q24 on Form 6-K Investor relations/media relations contacts For further information contact: Investor relations Media relations UK – Neil Sankoff UK – Gillian James Telephone: +44 (0) 20 7991 5072 Telephone: +44 (0)7584 404 238 Email: investorrelations@hsbc.com Email: pressoffice@hsbc.com Hong Kong – Yafei Tian UK – Kirsten Smart Telephone: +852 2899 8909 Telephone: +44 (0)7725 733 311 Email: investorrelations@hsbc.com.hk Email: pressoffice@hsbc.com Hong Kong – Aman Ullah Telephone: +852 3941 1120 Email: aspmediarelations@hsbc.com.hk 68 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K Abbreviations 1H24 First half of 2024 1Q23 First quarter of 2023 1Q24 First quarter of 2024 2Q23 Second quarter of 2023 2Q24 Second quarter of 2024 3Q23 Third quarter of 2023 3Q24 Third quarter of 2024 4Q23 Fourth quarter of 2023 4Q24 Fourth quarter of 2024 9M23 First nine months of 2023 9M24 First nine months of 2024 ADR American Depositary Receipt ADS American Depositary Share AIBL Average interest-bearing liabilities AIEA Average interest-earning assets Banking NII Banking net interest income Basel III Basel Committee’s reforms to strengthen global capital and liquidity rules Basel 3.1 Outstanding measures to be implemented from the Basel III reforms BoCom Bank of Communications Co., Limited, one of China‘s largest banks Bps Basis points. One basis point is equal to one-hundredth of a percentage point CET1 Common equity tier 1 CMB Commercial Banking, a global business CODM Chief Operating Decision Maker Corporate Centre Corporate Centre comprises Central Treasury, our legacy businesses, interests in our associates and joint ventures, central stewardship costs and consolidation adjustments CRR II The regulatory requirements of the Capital Requirements Regulation and Directive, the CRR II regulation and the PRA Rulebook CSM Contractual service margin Dec December EBA European Banking Authority ECL Expected credit losses. In the income statement, ECL is recorded as a change in expected credit losses and other credit impairment charges. In the balance sheet, ECL is recorded as an allowance for financial instruments to which only the impairment requirements in IFRS 9 are applied ESG Environmental, social and governance EU European Union FDIC Federal Deposit Insurance Corporation FTE Full-time equivalent staff FVOCI Fair value through other comprehensive income FX Foreign exchange GAAP Generally accepted accounting principles GBM Global Banking and Markets, a global business GDP Gross domestic product GEC Group Executive Committee GPS Global Payments Solutions, the business formerly known as Global Liquidity and Cash Management Group HSBC Holdings together with its subsidiary undertakings GTS Global Trade Solutions, the business formerly known as Global Trade and Receivables Finance Hong Kong Hong Kong Special Administrative Region of the People’s Republic of China HSBC HSBC Holdings together with its subsidiary undertakings HSBC Bank plc HSBC Bank plc, also known as the non-ring-fenced bank HSBC Holdings HSBC Holdings plc, the parent company of HSBC HSBC UK HSBC UK Bank plc, also known as the ring-fenced bank IAS International Accounting Standards Ibor Interbank offered rate IFRSs International Financial Reporting Standards IVB HSBC Innovation Banking Jun June JV Joint venture LCR Liquidity coverage ratio Long term For our financial targets, we define long term as five to six years, commencing 1 January 2024 Mainland China People’s Republic of China excluding Hong Kong and Macau Mar March Medium term For our financial targets, we define medium term as three to four years, commencing 1 January 2024 MENAT Middle East, North Africa and Türkiye MSS Markets and Securities Services, HSBC’s capital markets and securities services businesses in Global Banking and Markets Net operating income Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue NII Net interest income NIM Net interest margin POCI Purchased or originated credit-impaired financial assets PRA Prudential Regulation Authority (UK) Revenue Net operating income before ECL RoE Return on average ordinary shareholders’ equity RoTE Return on average tangible equity HSBC Holdings plc Earnings Release 3Q24 on Form 6-K 69 Earnings Release 3Q24 on Form 6-K RWA Risk-weighted asset SAB Saudi Awwal Bank, which was formed from the merger between The Saudi British Bank and Alawwal Bank Sep September SVB UK Silicon Valley Bank UK Limited, now HSBC Innovation Bank Limited UAE United Arab Emirates UK United Kingdom US United States of America WPB Wealth and Personal Banking, a global business $m/$bn/$tn United States dollar millions/billions/trillions. We report in US dollars Registered office and Group head office: 8 Canada Square, London, E14 5HQ, United Kingdom Web: www.hsbc.com Incorporated in England with limited liability. Registered number 617987 Paste the following link into your web browser, to view the associated Data Pack PDF document. http://www.rns-pdf.londonstockexchange.com/rns/4963M_1-2024-4-29.pdf 70 HSBC Holdings plc Earnings Release 3Q24 on Form 6-K SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: October 29, 2024 HSBC Holdings plc By: /s/ Jonathan Bingham Name: Jonathan Bingham Title: Interim Group Chief Financial Officer", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000108911324000020/livedocq32024earningsrelea.htm"}
{"doc_id": "2ba35fe97416418e25af9212deac495b", "text": "6-K 1 a0349c.htm DIRECTOR/PDMR SHAREHOLDING a0349c FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of August HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F HSBC HOLDINGS PLC 28 August 2024 Notification of a Transaction by a Person Discharging Managerial\nResponsibilities On 27 August 2024, Ian Stuart acquired 23 ordinary shares of\nUS$0.50 each (the \"Shares\") in HSBC Holdings plc (the \"Company\").\nThe Shares were acquired under the Company's UK Share Incentive\nPlan (\"SIP\") at £6.56696 per Share. The following disclosure is made in accordance with the UK version\nof the EU Market Abuse Regulation 596/2014. 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Ian\nStuart 2 - Reason for the notification Position/status Chief\nExecutive, HSBC UK Bank plc Initial notification/amendment Initial\nNotification 3\n- Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2024-08-27 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Price Volume Total Acquisition under the UK Share Incentive Plan £6.57 23 £151.04 Aggregated £6.567 23 £151.04 For any\nqueries related to this notification, please\ncontact: Lee Davis Corporate Governance & Secretariat shareholderquestions@hsbc.com SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n28 August 2024", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495424011201/a0349c.htm"}
{"doc_id": "373a3ef514227e438273caa4997cf49f", "text": "6-K 1 d941429d6k.htm FORM 6-K FORM 6-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of November 2025 Commission File Number: 001-14930 HSBC Holdings plc 8 Canada Square, London E14 5HQ, England (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F). Form 20-F ☒   Form 40-F ☐ This Report on Form 6-K is hereby incorporated by reference in the following HSBC Holdings plc\nregistration statement: file number 333-277306 HSBC Holdings plc (the “Registrant”) hereby incorporates by reference the following exhibits to\nthis report on Form 6-K into its registration statement: file number 333-277306. Exhibit No. Description of Document 4.1 Thirty-seventh Supplemental Indenture to the Senior Securities Indenture, dated November 6, 2025. 5.1 Opinion of Cleary Gottlieb Steen & Hamilton LLP, special US counsel to the Registrant, dated November 6, 2025. 5.2 Opinion of Cleary Gottlieb Steen & Hamilton LLP, special English counsel to the Registrant, dated November 6, 2025. S IGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,\nthereunto duly authorized. HSBC Holdings plc Date: November 6, 2025 By: /s/ James Murphy Name: James Murphy Title: Global Head of Markets Treasury [ Signature Page to Form 6-K Relating to the Senior Issuance ]", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000119312525268606/d941429d6k.htm"}
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hsbc:WeTradeInnovationDesignatedActivityCompanyInLiquidationMember 2024-01-01 2024-12-31 As filed with the Securities and Exchange Commission on February 20, 2025. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F ¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year en ded December 31 , 2024 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report ____________ For the transition period from N/A to N/A Commission file number: 001-14930 HSBC Holdings plc (Exact name of Registrant as specified in its charter) N/A United Kingdom (Translation of Registrant’s name into English) (Jurisdiction of incorporation or organization) 8 Canada Square London E14 5HQ United Kingdom (Address of principal executive offices) Jonathan Bingham 8 Canada Square London E14 5HQ United Kingdom Tel +44 (0) 20 3268 4840 Email jonathan.bingham@hsbc.com (Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Ordinary Shares, nominal value US$0.50 each (GB0005405286) HSBA London Stock Exchange 5 Hong Kong Stock Exchange HSBC.BH Bermuda Stock Exchange HSBC New York Stock Exchange * American Depository Shares, each representing 5 Ordinary Shares of nominal value US$0.50 each (US4042804066) HSBC New York Stock Exchange 7.625% Subordinated Notes due 2032 (US404280AF65) HSBC/32A New York Stock Exchange 7.35% Subordinated Notes due 2032 (US404280AE90) HSBC/32B New York Stock Exchange 6.5% Subordinated Notes 2036 (US404280AG49) HSBC36 New York Stock Exchange 6.5% Subordinated Notes 2037 (US404280AH22) HSBC37 New York Stock Exchange 6.8% Subordinated Notes Due 2038 (US404280AJ87) HSBC38 New York Stock Exchange 6.100% Senior Unsecured Notes due 2042 (US404280AM17) HSBC42 New York Stock Exchange 5.250% Subordinated Notes due 2044 (US404280AQ21) HSBC44 New York Stock Exchange 4.250% Subordinated Notes due 2025 (US404280AU33) HSBC25 New York Stock Exchange 4.300% Senior Unsecured Notes due 2026 (US404280AW98) HSBC26 New York Stock Exchange 3.900% Senior Unsecured Notes due 2026 (US404280BB43) HSBC26A New York Stock Exchange 4.375% Subordinated Notes due 2026 (US404280BH13) HSBC26B New York Stock Exchange 4.041% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280BK42) HSBC28 New York Stock Exchange 4.583% Fixed Rate/Floating Rate Senior Unsecured Notes due 2029 (US404280BT50) HSBC29 New York Stock Exchange Floating Rate Senior Unsecured Notes due 2026 (US404280BW89) HSBC26D New York Stock Exchange 4.292% Fixed Rate/Floating Rate Senior Unsecured Notes due 2026 (US404280BX62) HSBC26C New York Stock Exchange 3.000% Resettable Senior Unsecured Notes due 2028 (XS1961843171) HSBC28A New York Stock Exchange 3.973% Fixed Rate/Floating Rate Senior Unsecured Notes due 2030 (US404280CC17) HSBC30 New York Stock Exchange 3.00% Resettable Senior Unsecured Notes due 2030 (XS2003500142) HSBC30A New York Stock Exchange 4.950% Fixed Rate Senior Unsecured Notes due 2030 (US404280CF48) HSBC30B New York Stock Exchange 2.099% Fixed Rate/Floating Rate Senior Unsecured Notes due 2026 (US404280CG21) HSBC26E New York Stock Exchange 2.848% Fixed Rate/Floating Rate Senior Unsecured Notes due 2031 (US404280CH04) HSBC31 New York Stock Exchange 1.645% Fixed Rate/Floating Rate Senior Unsecured Notes due 2026 (US404280CJ69) HSBC26F New York Stock Exchange 2.357% Fixed Rate/Floating Rate Senior Unsecured Notes due 2031 (US404280CK33) HSBC31A New York Stock Exchange 2.013% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280CL16) HSBC28B New York Stock Exchange 1.589% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 (US404280CM98) HSBC27 New York Stock Exchange 1.750% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 (XS2322315727) HSBC27A New York Stock Exchange 2.804% Fixed Rate/Floating Rate Senior Unsecured Notes due 2032 (US404280CT42) HSBC32 New York Stock Exchange 2.206% Fixed Rate/Floating Rate Senior Unsecured Notes due 2029 (US404280CV97) HSBC29A New York Stock Exchange 1.162% Fixed Rate/Floating Rate Senior Unsecured Notes due 2024 (US404280CW70) HSBC24D New York Stock Exchange 2.251% Fixed Rate/Floating Rate Senior Unsecured Notes due 2027 (US404280CX53) HSBC27B New York Stock Exchange 2.871% Fixed Rate/Floating Rate Senior Unsecured Notes due 2032 (US404280CY37) HSBC32A New York Stock Exchange Floating Rate Senior Unsecured Notes due 2024 (US404280CZ02) HSBC24E New York Stock Exchange 2.999% Fixed Rate/Floating Rate Senior Unsecured Notes due 2026 (US404280DA42) HSBC26G New York Stock Exchange Floating Rate Senior Unsecured Notes due 2026 (US404280DB25) HSBC26H New York Stock Exchange 4.762% Fixed Rate/Floating Rate Subordinated Unsecured Notes due 2033 (US404280DC08) HSBC33 New York Stock Exchange 4.755% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280DF39) HSBC28C New York Stock Exchange 5.210% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280DG12) HSBC28D New York Stock Exchange 5.402% Fixed Rate/Floating Rate Senior Unsecured Notes due 2033 (US404280DH94) HSBC33A New York Stock Exchange 7.35% Subordinated Notes due 2032 (US404280DJ50) HSBC32B New York Stock Exchange 7.625% Subordinated Notes due 2032 (US404280DK24) HSBC32C New York Stock Exchange 6.5% Subordinated Notes Due 2036 (US404280DL07) HSBC36A New York Stock Exchange 6.5% Subordinated Notes Due 2037 (US404280DM89) HSBC37A New York Stock Exchange 6.8% Subordinated Notes Due 2038 (US404280DN62) HSBC38A New York Stock Exchange 7.336% Fixed Rate/Floating Rate Senior Unsecured Notes due 2026 (US404280DQ93) HSBC26I New York Stock Exchange 7.390% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280DR76) 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HSBC34B New York Stock Exchange 5.546% Fixed Rate/Floating Rate Senior Unsecured Notes due 2030 (US404280ED71) HSBC30C New York Stock Exchange 5.719% Fixed Rate/Floating Rate Senior Unsecured Notes due 2035 (US404280EE54) HSBC35 New York Stock Exchange 5.597% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280EF20) HSBC28F New York Stock Exchange 5.733% Fixed Rate/Floating Rate Senior Unsecured Notes due 2032 (US404280EG03) HSBC32D New York Stock Exchange 5.874% Fixed Rate/Floating Rate Subordinated Unsecured Notes due 2035 (US404280EL97) HSBC35A New York Stock Exchange 5.130% Fixed Rate/Floating Rate Senior Unsecured Notes due 2028 (US404280EM70) HSBC28G New York Stock Exchange 5.286% Fixed Rate/Floating Rate Senior Unsecured Notes due 2030 (US404280EN53) HSBC30D New York Stock Exchange Floating Rate Senior Unsecured Notes due 2028 (US404280EK15) HSBC28H New York Stock Exchange Floating Rate Senior Unsecured Notes due 2030 (US404280EP02) HSBC30E New York Stock Exchange * Not for trading, but only in connection with the registration of American Depositary Shares. Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: Ordinary Shares, nominal value US$0.50 each 17,946,950,582 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. þ Yes ¨ No If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ¨ Yes þ No Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.: Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Emerging growth company ¨ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. † The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨ Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP ¨ International Financial Reporting Standards þ Other ¨ as issued by the International Accounting Standards Board If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. ¨ Item 17 ¨ Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes þ No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ¨ Yes ¨ No HSBC Holdings plc Annual Report on Form 20-F Opening up a world of opportunity Our ambition is to be the preferred international financial partner for our clients. Our purpose, ambition and values reflect our strategy and support our focus on execution. Read more on our values and strategy on pages 8 and 14 . Contents 1 Cautionary statement regarding forward-looking statements 2 Additional cautionary statement regarding ESG data, metrics and forward-looking statements 3 Certain defined terms Strategic report 4 Performance in 2024 5 Highlights 7 Who we are 9 Group Chairman’s shareholder letter 11 Group CEO’s shareholder letter 14 Our strategy 18 ESG overview 23 Remuneration 24 Financial overview 29 Global businesses 36 Risk overview Environmental, social and governance (‘ESG’) review 40 Environmental 61 Social 71 Governance Financial review 84 Financial summary 107 Global businesses and legal entities 129 Reconciliation of alternative performance measures 135 Other information Risk review 144 Our approach to risk 148 Top and emerging risks 154 Risk factors 167 Our material banking risks Corporate governance report 267 Biographies of Directors and senior management 289 Board committees 309 Directors’ remuneration report Financial statements 361 Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of HSBC Holdings plc (PCAOB ID 876 ) 363 Financial statements 375 Notes on the financial statements Additional information 461 Shareholder information 480 Abbreviations This Strategic Report was approved by the Board on 19 February 2025. Sir Mark E Tucker Group Chairman A reminder The currency we report in is US dollars. Our approach to ESG reporting We embed our ESG reporting and Task Force on TCFD Climate-related Financial Disclosures (‘TCFD’) within this Form 20-F for the year ended  31 December 2024. Our TCFD disclosures are highlighted with the following symbol: Use of alternative performance measures We supplement our IFRS Accounting Standards figures with non-IFRS Accounting Standards measures used by management internally that constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations. These measures are highlighted with the following symbol: Further explanation may be found on page 28 . Targets and forward guidance We do not reconcile our forward guidance on RoTE excluding the impact of notable items, target basis operating expenses, dividend payout ratio target basis or banking net interest income (‘banking NII’) to their equivalent reported measures. For our financial targets, medium-term is defined as between three to five years, and long term as five to six years, from 1 January 2025. See page 5 for details on our forward guidance and outlook. None of the websites referred to in this Form 20-F for the year ended 31 December 2024 (the ‘Form 20-F’) (including where a link is provided), and none of the information contained on such websites, are incorporated by reference in this report. HSBC Holdings plc Annual Report on Form 20-F 1 Cautionary statement regarding forward-looking statements This Form 20-F contains certain forward- looking statements with respect to HSBC’s financial condition; results of operations and business, including the strategic priorities; financial, investment and capital targets; and ESG ambitions, targets and commitments described herein. Statements that are not historical facts, including statements about HSBC’s beliefs and expectations, are forward-looking statements. Words such as ‘may’, ‘will’, ‘should’, ‘expects’, ‘targets’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’, ‘potential’ and ‘reasonably possible’, or the negative thereof, other variations thereon or similar expressions are intended to identify forward-looking statements. These statements are based on current plans, information, data, estimates and projections, and therefore undue reliance should not be placed on them. Forward- looking statements speak only as of the date they are made. HSBC makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statements. Written and/or oral forward-looking statements may also be made in the periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, offering circulars and prospectuses, press releases and other written materials, and in oral statements made by HSBC’s directors, officers or employees to third parties, including financial analysts. Forward-looking statements involve inherent risks and uncertainties. Readers are cautioned that a number of factors could cause actual results to differ, in some instances materially, from those anticipated or implied in any forward-looking statement. These include, but are not limited to: – changes in general economic conditions in the markets in which we operate, such as new, continuing or deepening recessions, prolonged inflationary pressures and fluctuations in employment levels and the creditworthiness of customers beyond those factored into consensus forecasts; the Russia-Ukraine war and the conflict in the Middle East and their impact on global economies and the markets where HSBC operates, which could have a material adverse effect on (among other things) our financial condition, results of operations, prospects, liquidity, capital position and credit ratings; deviations from the market and economic assumptions that form the basis for our ECL measurements (including, without limitation, as a result of the Russia- Ukraine war and the conflict in the Middle East, inflationary pressures, commodity price changes, and ongoing developments in the commercial real estate sector in mainland China); potential changes in HSBC’s dividend policy; changes and volatility in foreign exchange rates and interest rates levels, including the accounting impact resulting from financial reporting in respect of hyperinflationary economies; volatility in equity markets; lack of liquidity in wholesale funding or capital markets, which may affect our ability to meet our obligations under financing facilities or to fund new loans, investments and businesses; geopolitical tensions or diplomatic developments producing social instability or legal uncertainty, such as the Russia-Ukraine war or the conflict in the Middle East (including the resurgence, continuation or escalation thereof) and the related imposition of sanctions and trade restrictions, supply chain restrictions and disruptions, sustained increases in energy prices and key commodity prices, claims of human rights violations, diplomatic tensions between China and the US, which may extend to and involve other countries, and developments in Hong Kong and Taiwan, alongside other potential areas of tension, which may adversely affect HSBC by creating regulatory, reputational and market risks; the efficacy of government, customer, and HSBC’s actions in managing and mitigating ESG risks, in particular climate risk, nature-related risks and human rights risks, and in supporting the global transition to net zero carbon emissions, each of which can impact HSBC both directly and indirectly through our customers and which may result in potential financial and non-financial impacts; illiquidity and downward price pressure in national real estate markets; adverse changes in central banks’ policies with respect to the provision of liquidity support to financial markets; heightened market concerns over sovereign creditworthiness in over-indebted countries; adverse changes in the funding status of public or private defined benefit pensions; societal shifts in customer financing and investment needs, including consumer perception as to the continuing availability of credit; exposure to counterparty risk, including third parties using us as a conduit for illegal activities without our knowledge; the discontinuation of certain key Ibors and the transition of the remaining legacy Ibor contracts to near risk-free benchmark rates, which continues to expose HSBC to some financial and non-financial risks; and price competition in the market segments we serve; – changes in government policy and regulation, including trade and tariff policies, as well as monetary, interest rate and other policies of central banks and other regulatory authorities in the principal markets in which we operate and the consequences thereof (including, without limitation, actions taken as a result of changes in government following national elections in the markets where the Group operates); initiatives to change the size, scope of activities and interconnectedness of financial institutions in connection with the implementation of stricter regulation of financial institutions in key markets worldwide; revised capital and liquidity benchmarks, which could serve to deleverage bank balance sheets and lower returns available from the current business model and portfolio mix; changes to tax laws and tax rates applicable to HSBC, including the imposition of levies or taxes designed to change business mix and risk appetite; the practices, pricing or responsibilities of financial institutions serving their consumer markets; expropriation, nationalisation, confiscation of assets and changes in legislation relating to foreign ownership; the UK’s relationship with the EU, particularly with respect to the potential divergence of UK and EU law on the regulation of financial services; changes in government approach and regulatory treatment in relation to ESG disclosures and reporting requirements, and the current lack of a single standardised regulatory approach to ESG across all sectors and markets; changes in UK macroeconomic and fiscal policy, which may result in fluctuations in the value of the pound sterling; general changes in government policy (including, without limitation, actions taken as a result of changes in government following national elections in the markets where the Group operates) that may significantly influence investor decisions; the costs, effects and outcomes of regulatory reviews, actions or litigation, including any additional compliance requirements; and the effects of competition in the markets where we operate including increased competition from non-bank financial services companies; and – factors specific to HSBC, including our success in adequately identifying the risks we face, such as the incidence of loan losses or delinquency, and managing those risks (through account management, hedging and other techniques); our ability to achieve our financial, investment, capital and ESG ambitions, targets and commitments (including the positions set forth in our thermal coal phase-out policy and our energy policy and our targets to reduce our on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high- emitting sectors), which may result in our failure to achieve any of the expected outcomes of our strategic priorities; evolving regulatory requirements and the development of new technologies, including artificial intelligence, affecting how we manage model risk; model limitations or failure, including, without limitation, the impact that high inflationary pressures and rising interest rates have had on the performance and usage of financial models, which may require us to hold additional capital, incur losses and/or use compensating controls, such as judgemental post-model adjustments, to address model limitations; changes to the judgements, estimates and assumptions we base our financial statements on; changes in our ability to meet the requirements of regulatory stress tests; a reduction in the credit ratings assigned to us or any of our subsidiaries, which could 2 HSBC Holdings plc Annual Report on Form 20-F Strategic Report increase the cost or decrease the availability of our funding and affect our liquidity position and net interest margin; changes to the reliability and security of our data management, data privacy, information and technology infrastructure, including threats from cyber-attacks, which may impact our ability to service clients and may result in financial loss, business disruption and/or loss of customer services and data; the accuracy and effective use of data, including internal management information that may not have been independently verified; changes in insurance customer behaviour and insurance claim rates; our dependence on loan payments and dividends from subsidiaries to meet our obligations; changes in our reporting frameworks and accounting standards, which have had and may continue to have a material impact on the way we prepare our financial statements; our ability to successfully execute planned strategic acquisitions and disposals; our success in adequately integrating acquired businesses into our business; our ability to successfully execute and implement the announced strategic reorganisation of the Group; changes in our ability to manage third-party, fraud, financial crime and reputational risks inherent in our operations; employee misconduct, which may result in regulatory sanctions and/or reputational or financial harm; changes in skill requirements, ways of working and talent shortages, which may affect our ability to recruit and retain senior management and an inclusive and skilled workforce; and changes in our ability to develop sustainable finance and ESG- related products consistent with the evolving expectations of our regulators, and our capacity to measure the environmental and social impacts from our financing activity (including as a result of data limitations and changes in methodologies), which may affect our ability to achieve our ESG ambitions, targets and commitments, including our net zero ambition, our targets to reduce on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high- emitting sectors and the positions set forth in our thermal coal phase-out policy and our energy policy, and increase the risk of greenwashing. Effective risk management depends on, among other things, our ability through stress testing and other techniques to prepare for events that cannot be captured by the statistical models it uses; our success in addressing operational, legal and regulatory, and litigation challenges; and other risks and uncertainties we identify in ‘Top and emerging risks’ on pages 148 to 153 . This Form 20-F contains a number of images, graphics, infographics, text boxes and illustrative case studies and credentials which aim to give a high-level overview of certain elements of our disclosures and to improve accessibility for readers. These images, graphics, infographics, text boxes and illustrative case studies and credentials are designed to be read within the context of this Form 20-F as a whole. Additional cautionary statement regarding ESG data, metrics and forward- looking statements This Form 20-F contains a number of forward- looking statements (as defined above) with respect to HSBC’s ESG ambitions, targets, commitments, climate-related pathways, processes and plans, and the methodologies and scenarios we use, or intend to use, to assess our progress in relation to these (‘ESG-related forward-looking statements’). In preparing the ESG-related information contained in this Form 20-F, HSBC has made a number of key judgements, estimations and assumptions, and the processes and issues involved are complex. We have used ESG (including climate) data, models and methodologies that we consider, as of the date on which they were used, to be appropriate and suitable to understand and assess climate change risk and its impact, to analyse financed emissions - and operational and supply chain emissions, to set ESG- related targets and to evaluate the classification of sustainable finance and investments. However, these data, models and methodologies are often new, are rapidly evolving and are not of the same standard as those available in the context of other financial information, nor are they subject to the same or equivalent disclosure standards, historical reference points, benchmarks or globally accepted accounting principles. In particular, it is not possible to rely on historical data as a strong indicator of future trajectories in the case of climate change and its evolution. Outputs of models, processed data and methodologies are also likely to be affected by underlying data quality, which can be hard to assess and we expect industry guidance, market practice, and regulations in this field to continue to change. We also face challenges in relation to our ability to access data on a timely basis, lack of consistency and comparability between data that is available and our ability to collect and process relevant data. Consequently, the ESG-related forward-looking statements and ESG metrics disclosed in this Form 20-F carry an additional degree of inherent risk and uncertainty. Due to the unpredictable evolution of climate change and its future impact and the uncertainty of future policy and market response to ESG-related issues and the effectiveness of any such response, HSBC may have to re-evaluate its progress towards its ESG ambitions, targets and commitments in the future, update the methodologies it uses or alter its approach to ESG (including climate) analysis and may be required to amend, update and recalculate its ESG disclosures and assessments in the future, as market practice and data quality and availability develop. No assurance can be given by or on behalf of HSBC as to the likelihood of the achievement or reasonableness of any projections, estimates, forecasts, ambitions, targets, commitments, prospects or returns contained herein. Readers are cautioned that a number of factors, both external and those specific to HSBC, could cause actual achievements, results, performance or other future events or conditions to differ, in some cases materially, from those stated, implied and/or reflected in any ESG-related forward-looking statement or metric due to a variety of risks, uncertainties and other factors (including without limitation those referred to below): – Climate change projection risk: this includes, for example, the evolution of climate change and its impacts, changes in the scientific assessment of climate change impacts, transition pathways and future risk exposure and limitations of climate scenario forecasts; – ESG projection risk: ESG metrics are complex and are still subject to development. In addition, the scenarios employed in relation to them, and the models that analyse them have limitations that are sensitive to key assumptions and parameters, which are themselves subject to some uncertainty, and cannot fully capture all of the potential effects of climate, policy and technology-driven outcomes; – Changes in the ESG regulatory landscape: this involves changes in government approach and regulatory treatment in relation to ESG disclosures and reporting requirements, and the current lack of a single standardised regulatory approach to ESG across all sectors and markets; – Variation in reporting standards: ESG reporting standards are still developing and are not standardised or comparable across all sectors and markets, new reporting standards in relation to different ESG metrics are still emerging; – Data availability, accuracy, verifiability and data gaps: our disclosures are limited by the availability of high quality data in some areas and our own ability to timely collect and process such data as required. Where data is not available for all sectors or consistently year on year, there may be an impact to our data quality scores. While we expect our data quality scores to improve over time, as companies continue to expand their disclosures to meet growing regulatory and stakeholder expectations, there may be unexpected fluctuations within sectors year on year, and/or HSBC Holdings plc Annual Report on Form 20-F 3 differences between the data quality scores between sectors. Any such changes in the availability and quality of data over time, or our ability to collect and process such data, could result in revisions to reported data going forward, including on financed emissions, meaning that such data may not be reconcilable or comparable year-on year; – Developing methodologies and scenarios: the methodologies and scenarios HSBC uses to assess financed emissions and set ESG-related targets may develop over time in line with market practice, regulation and/ or developments in science, where applicable. Such developments could result in revisions to reported data, including on financed emissions or the classification of sustainable finance and investments, meaning that data outputs may not be reconcilable or comparable year-on year; and – Risk management capabilities: global actions, including HSBC’s own actions, may not be effective in transitioning to net zero and in managing relevant ESG risks, including in particular climate, nature- related and human rights risks, each of which can impact HSBC both directly and indirectly through our customers, and which may result in potential financial and non-financial impacts to HSBC. In particular: – we may not be able to achieve our ESG ambitions, targets and commitments (including with respect to the positions set forth in our thermal coal phase-out policy and our energy policy, and our targets to reduce our on-balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high- emitting sectors), which may result in our failure to achieve some or all of the expected outcomes of our strategic priorities; and – we may not be able to develop sustainable finance and ESG-related products consistent with the evolving expectations of our regulators, and our capacity to measure the environmental and social impacts from our financing activity may diminish (including as a result of data and model limitations and changes in methodologies), which may affect our ability to achieve our ESG ambitions, targets and commitments, including our net zero ambition, our targets to reduce our on- balance sheet financed emissions and, where applicable, facilitated emissions in our portfolio of selected high-emitting sectors and the positions set forth in our thermal coal phase-out policy and energy policy, and increase the risk of greenwashing. Any forward-looking statements made by or on behalf of HSBC speak only as of the date they are made. HSBC expressly disclaims any obligation to revise or update these ESG forward-looking statements, other than as expressly required by applicable law. Written and/or oral ESG-related forward- looking statements may also be made in our periodic reports to the US Securities and Exchange Commission, summary financial statements to shareholders, proxy statements, offering circulars and prospectuses, press releases and other written materials, and in oral statements made by HSBC’s Directors, officers or employees to third parties, including financial analysts. Our data dictionaries and methodologies for preparing the above ESG-related metrics and third-party limited assurance reports can be found on: www.hsbc.com/who-we-are/esg- and-responsible-business/esg-reporting- centre. Certain defined terms Unless the context requires otherwise, ‘HSBC Holdings’ means HSBC Holdings plc and ‘HSBC’, the ‘Group’, ‘we’, ‘us’ and ‘our’ refer to HSBC Holdings together with its subsidiaries. Within this document the Hong Kong Special Administrative Region of the People’s Republic of China is referred to as ‘Hong Kong’. When used in the terms ‘shareholders’ equity’ and ‘total shareholders’ equity’, ‘shareholders’ means holders of HSBC Holdings ordinary shares and those preference shares and capital securities issued by HSBC Holdings classified as equity. The abbreviations ‘$m’, ‘$bn’ and ‘$tn’ represent millions, billions (thousands of millions) and trillions of US dollars, respectively. 4 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Performance in 2024 HSBC is one of the largest banking and financial services organisations in the world. We have a clear strategy to deliver revenue and profit growth, enhance customer service and create long-term shareholder value. Financial performance indicators Our financial performance indicators demonstrate our continued focus on the delivery of sustainable returns for our shareholders. They also provide insight into the performance that has driven the outcomes of our financial targets. Read more on our financial performance in 2024 on pages 5 and 26 . For an explanation of performance against our key Group financial targets, see page 24 . For a reconciliation of alternative performance measures to their reported equivalents, see page 133 . Return on average tangible equity 14.6% (2023: 14.6% ) Return on average tangible equity excluding notable items of 16.0% (2023: 16.2% ) Profit before tax $32.3bn (2023: $30.3bn ) Net interest income $32.7bn (2023: $35.8bn ) Banking net interest income of $43.7bn (2023: $44.1bn ) Operating expenses $33.0bn (2023: $ 32.1 bn) Target basis operating expenses up 5% to $ 32.6 bn Common equity tier 1 capital ratio 14.9 % (2023: 14.8 %) Dividend per share in respect of 2024 $0.87 Inclusive of a special dividend of $0.21 per share. (2023 dividend per share: $ 0.61 ) Strategic performance indicators Our strategy supports our ambition of being the preferred international financial partner for our clients. We are committed to building a business for the long term, developing relationships that last. Read more on our strategy on pages 14 to 16 . Read more on multi-jurisdictional client revenue on page 134 . Read more on how we set and define our ESG metrics on page 20 . Read more on our definition of sustainable finance and investment on page 43 . Grow our Wealth business $64bn Net new invested assets generated in 2024, of which $47bn were in Asia. (2023: $84bn generated, of which $47bn were in Asia) Serve our clients internationally 62% Wholesale multi-jurisdictional client revenue is generated by clients banking with us across multiple markets. (2023: 61%) Gender representation 34.6% Senior leadership roles held by women. (2023: 34.1% ) Sustainable finance and investment $ 393.6 bn Cumulative total provided and facilitated since 1 January 2020. (2023: $ 294.4 bn) HSBC Holdings plc Annual Report on Form 20-F 5 Highlights Financial performance reflected business growth, particularly in Wealth. We continued to make progress in reshaping the Group and we have announced a simplification of our organisation structure to accelerate strategic delivery. Financial performance (vs 2023) – Profit before tax rose by $2.0bn to $32.3bn , including a $1.0bn net favourable impact from notable items. In 2024, these included a gain of $4.8bn on the disposal of our banking business in Canada, the impacts of the disposal of our business in Argentina, comprising a $1.0bn loss on disposal, and the recycling of foreign currency reserve losses and other reserves of $5.2bn. In 2023, notable items included an impairment of $3.0bn on our associate, Bank of Communications Co., Limited (‘BoCom’), disposal losses of $1.0bn on Treasury repositioning and risk management and a $1.6bn gain recognised on the acquisition of Silicon Valley Bank UK Limited (‘SVB UK’). Profit after tax increased by $0.4bn to $25.0bn . – Constant currency profit before tax excluding notable items increased by $1.4bn to $34.1bn , primarily reflecting revenue growth in Wealth and Personal Banking (‘WPB’) and Global Banking and Markets (‘GBM’), partly offset by a rise in operating expenses, in line with our cost growth targets. – Revenue of $65.9bn was stable. There was growth in revenue from higher customer activity in Wealth in WPB, and in Equities and Securities Financing in GBM. In addition, 2023 included disposal losses of $1.0bn related to Treasury repositioning and risk management. This was offset by the net adverse impact of certain strategic transactions described above, as well as a $0.2bn loss on the early redemption of legacy securities. – Constant currency revenue excluding notable items rose by $2.9bn to $67.4bn . – Net interest income (‘NII’) decreased by $3.1bn , reflecting the impact of business disposals and higher funding costs associated with the redeployment of our commercial surplus to the trading book, where the related revenue is recognised in ‘net income from financial instruments held for trading or managed on a fair value basis‘, partly offset by higher NII in HSBC UK, reflecting the benefit of our structural hedge. Banking NII of $43.7bn fell by $0.4bn or 1% compared with 2023, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII. – Net interest margin (‘NIM’) of 1.56% decreased by 10 basis points (‘bps’), mainly due to increased deployment of our commercial surplus to the trading book. – Expected credit losses and other credit impairment charges (‘ECL’) of $3.4bn were stable. ECL were $1.8bn in Commercial Banking (‘CMB’) and $0.2bn in GBM. This included stage 3 charges relating to the commercial real estate sector in mainland China ($0.4bn), the onshore Hong Kong real estate sector ($0.1bn), and a charge related to a single CMB customer in the UK. ECL in WPB were $1.3bn and primarily related to our legal entities in Mexico, Hong Kong and the UK. ECL were 36 bps of average gross loans, including loans and advances classified as held for sale (2023: 32 bps). – Operating expenses grew by $1.0bn or 3% to $33.0bn , mainly due to higher spend and investment in technology and the impacts of inflation, partly offset by reductions related to our business disposals in Canada and – France, and from lower levies in the UK and the US. – Target basis operating expenses rose by 5% , in line with our cost growth target. This increase primarily reflected higher spend and investment in technology, and the impact of inflation. This is measured on a constant currency basis, excluding notable items, the impact of retranslating the prior year results of hyperinflationary economies at constant currency, and the direct costs from the sales of our French retail banking operations and our banking business in Canada. – Customer lending balances fell by $8bn on a reported basis but rose by $14bn on a constant currency basis. Growth included lending balance growth in CMB and higher mortgage balances in WPB. – Customer accounts rose by $43bn on a reported basis, and $75bn on a constant currency basis, with growth across all of our global businesses, primarily in Asia. – Common equity tier 1 (‘ CET1’) capital ratio of 14.9% rose by 0.1 of a percentage point, mainly due to capital generation and a reduction in RWAs through strategic transactions, offset by dividends, share buy- backs and organic balance sheet growth. – The Board has approved a fourth interim dividend of $0.36 per share, resulting in a total of $0.87 per share in respect of 2024, inclusive of a special dividend of $0.21 per share. We also intend to initiate a share buy- back of up to $2bn, which we expect to complete by our first quarter 2025 results announcement. Outlook – We have announced measures to simplify the Group and w e are focused on opportunities that build on our strong platform for growth. – We are now targeting a mid-teens return on average tangible equity (‘RoTE’) in each of the three years from 2025 to 2027 excluding notable items, while acknowledging the outlook for interest rates remains volatile and uncertain, particularly in the medium term. – We expect banking NII of around $42bn in 2025. Our current expectation reflects modelling of a number of market-dependent factors. If changes in these factors impact the output of our modelling, we would update our expectation for 2025 Banking NII in future quarterly results announcements. – We retain a Group-wide focus on cost discipline. We are targeting growth in target basis operating expenses of approximately 3% in 2025 compared with 2024. – Our target basis operating expenses for 2025 excludes the direct cost impact of the business disposals in Canada and Argentina, notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency. – Our cost target includes the impact of simplification-related saves associated with our announced reorganisation, which aims to generate approximately $0.3bn of cost reductions in 2025, with a commitment to an – annualised reduction of $1.5bn in our cost base expected by the end of 2026. To deliver these reductions, we plan to incur severance and other up-front costs of $1.8bn over 2025 and 2026, which will be classified as notable items. We are focused on opportunities where we have a clear competitive advantage and accretive returns, and we aim to redeploy around $1.5bn of additional costs from non- strategic activities into these areas, over the medium term. – We expect ECL charges as a percentage of average gross loans to continue to be within our medium-term planning range of 30bps to 40bps in 2025 (including lending held for sale balances). 6 HSBC Holdings plc Annual Report on Form 20-F Strategic Report – Over the medium to long term, we continue to expect mid-single digit percentage growth for year-on-year customer lending balances. – We expect double-digit percentage average annual growth in fee and other income in Wealth over the medium-term. – We intend to continue to manage the CET1 capital ratio within our medium-term target range of 14% to 14.5%, with a dividend payout ratio target basis of 50% for 2025, excluding material notable items and related impacts. Our targets and expectations reflect our current outlook for the global macroeconomic environment and market-dependent factors, such as market-implied interest rates (as of mid-January 2025) and rates of foreign exchange, as well as customer behaviour and activity levels. We do not reconcile our forward guidance on RoTE excluding the impact of notable items, target basis operating expenses, dividend payout ratio target basis or banking NII to their equivalent reported measures. Reshaping the Group for growth – We continue to make progress on reshaping the Group. In 2024, we completed the sales of our retail banking operations in France, and exited our businesses in Canada and Argentina. We have also enhanced the efficiency of the Group through smaller inorganic actions. – In 2024, we served our customers through three global businesses, Wealth and Personal Banking, Commercial Banking and Global Banking and Markets. In October 2024, we announced that we are simplifying our organisational structure to accelerate delivery against our strategic priorities. Effective 1 January 2025, the Group operates through four new businesses: Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking. – In January 2024, we completed the sale of our retail banking operations in France. In accordance with the terms of the sale, we retained a €7.1bn ($7.4bn) portfolio of home and other loans. During the fourth quarter of 2024 we began to actively market this retained portfolio for sale. On 1 January 2025 we reclassified this portfolio as hold-to-collect-and- sell and expect to recognise an estimated $1bn fair value pre-tax loss in ‘other comprehensive income’ in equity on the remeasurement of the financial instruments in 1Q25. – In March 2024, we completed the sale of HSBC Bank Canada. The completion of the transaction resulted in a $4.8bn gain on sale, inclusive of the recycling of foreign currency translation and other reserves losses. Following completion of the sale, the Board approved a special dividend of $0.21 per share, which was paid on 21 June 2024. – In December 2024, we completed the sale of our business in Argentina. The completion of the transaction resulted in a pre- tax loss on sale of $1.0bn during 2024 and a $5.2bn recycling of foreign currency translation reserve losses and other reserves to the income statement in 4Q24. – During 2024, we completed the sale of our business in Russia and recognised foreign currency translation reserve losses of approximately $0.1bn. We also completed the sale of our operations in Armenia and exited our retail banking operations in Mauritius . – We also announced divestments in our private banking business in Germany and our business in South Africa, and we signed a memorandum of understanding in relation to the planned sale of our France life insurance business. In addition, we have launched a strategic review of our business in Malta. The review is at an early stage and no decisions have been made. – In January 2025, as part of our efforts to simplify HSBC and increase leadership in our areas of strength, we announced that we will begin to wind down our mergers and acquisitions (‘M&A’) and equity capital markets activities in the UK, Europe, and the US, subject to local legal requirements. We will retain more focused M&A and equity capital markets capabilities in Asia and the Middle East. – In June 2024, we completed the acquisition of Citi’s retail wealth management portfolio in mainland China. This portfolio complements our growing set of wealth businesses and our ambition to be the leading international wealth manager for mass affluent and high net worth individuals in mainland China. – In January 2024, we acquired SilkRoad Property Partners Group – expanding our real estate investment capabilities in Asia- Pacific, aligning with our ambition of becoming a top direct real estate investment manager in the region. Acquisitions and disposals that are classified as material notable items form part of ‘strategic transactions’ and their impacts are separately presented in our financial reporting. Read more on the financial impact of our strategic transactions on page 111 . Read more on our organisational update on page 8 . ESG update Transition to net zero – Supporting the transition to net zero is a key priority for HSBC. In our net zero transition plan published in January 2024, we committed to continually calibrate our approach to take into consideration the latest scientific methodologies, climate-related policy measures and developments in the real world. As we near the mid-point towards our 2030 targets, we have begun a review of our interim 2030 financed emission targets and associated policies. This forms part of our annual net zero transition plan review as referenced in our 3Q24 earnings release in October. – In 2020, we set an ambition to achieve net zero in our own operations and supply chain by 2030. We have made good progress in reducing our scope 1 and 2 emissions and are currently on track to deliver reductions of more than 90% by 2030 compared to our 2019 baseline. However, progress in reducing emissions in the scope 3 supply chain component is proving slower than we anticipated. We currently expect a 40% emissions reduction across our operations, travel and supply chain by 2030 which would mean that we would need to rely heavily on carbon offsets to achieve net zero in our supply chain by 2030. As such, we have revisited our ambition, taking into account latest best practice on carbon offsets. We are now focused on achieving net zero in our operations, travel and supply chain by 2050. – Since 2020, we have provided and facilitated $ 393.6 bn of sustainable finance and investment, which was an increase of $ 99.2 bn in the past year. This consisted of green and social financing, alongside other forms of sustainable financing and investment. – We have continued to focus on financing our clients’ transition needs. In 2024, we launched HSBC Infrastructure Finance to help realise the financing and advisory opportunities in creating the infrastructure for a low carbon economy. We have also continued to focus on emerging climate technologies and supply chain decarbonisation. – We have continued to participate in cross sector efforts to support customers’ transitions. Build inclusion and resilience – In 2024, 34.6% of senior leadership roles were held by women, and we are on track to achieve our ambition of 35% by 2025 . We also continued to work towards meeting our ethnicity ambitions. – Digital accessibility is important to us. We are using the power of technology to help provide a great digital experience for our customers and employees, including people with disabilities and those who are neurodivergent. We also expanded our efforts to support customers with disabilities in our branch spaces. Act responsibly – We have strengthened our AI governance processes to help ensure the responsible development and use of AI and launched www.hsbc.com/ai to increase the transparency of our AI strategy with clients and investors. – We continued to develop our understanding of our salient human rights issues. In 2024, we focused on our approach to human rights risk management relating to the goods and services we buy from third parties and in respect of our business customers. HSBC Holdings plc Annual Report on Form 20-F 7 Who we are HSBC is one of the largest banking and financial services organisations in the world. Guided by our purpose of opening up a world of opportunity, our ambition is to be the preferred international financial partner for our clients. Our global In 2024, we served around 41 million customers worldwide through a network covering 58 countries and territories. reach Approximately 41m Customers bank with us We employ approximately 211,000 Full-time equivalent staff Assets of $ 3.0 tn Operations in 58 Countries and territories Our customers range from individual savers and investors to some of the world’s biggest companies, governments and international organisations. We aim to connect them to opportunities and help them to achieve their ambitions. For further details of our customers and approach to geographical information, see page 94 . Our global In 2024, we served our customers through three global businesses, which focused on delivering growth in areas where we have distinctive capabilities and have significant opportunities. Our 2024 operating segment results are presented on this basis. Effective 1 January 2025, the Group will operate through four new businesses which are detailed on page 8 . businesses in 2024 Wealth and Personal Banking (’WPB’) WPB helped millions of our customers look after their day-to- day finances and manage, protect and grow their wealth. For further details, see page 29 . Commercial Banking (‘CMB’) Our global reach and expertise helped domestic and international businesses around the world unlock their potential. For further details, see page 31 . Global Banking and Markets (’GBM’) GBM provided a comprehensive range of financial services and products to corporates, governments and institutions. For further details, see page 33 . For further details on our organisational update, see page 8 . Revenue in 2024 by global business 1 WPB 42% CMB 32% GBM 26% 1 Calculation is based on revenue of our global businesses excluding Corporate Centre. Corporate Centre had negative revenue of $1,929m in 2024. See page 35 for details of Corporate Centre results in 2024. 8 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Our new Effective from 1 January 2025, we have implemented a new organisational business structure that aims to unleash our full potential by building on our strong progress in recent years and driving our success into the future. organisational structure Hong Kong Being the market leader in our home market of Hong Kong is one of our clear strengths and remains a strategic priority. UK Our UK ring-fenced bank has a leading market position in our home market of the UK and will continue to be a critical pillar of our strategy. Corporate and Institutional Banking Our new Corporate and Institutional Banking business is a market leader in cross-border transaction banking and capital markets and integrates our Commercial Banking business (outside the UK and Hong Kong) with our Global Banking and Markets business. International Wealth and Premier Banking This business brings together Premier focused banking (outside Hong Kong and the UK), our Global Private Bank, and our wealth manufacturing businesses of Asset Management and Insurance. Group Operating Committee To align with the new structure, a new Group Operating Committee comprised of 12 members now serves as the leading decision-making committee of the Group, replacing the Group Executive Committee of 18 members. The Group’s functions are also being realigned to support the new business structure. * Both our Hong Kong and UK businesses will serve our personal banking customers and commercial clients residing in these home markets. For further details on our senior management team, see page 272 . Our values Our values help define who we are as an organisation, and are key to our long-term success. We value difference We succeed together We take responsibility We get it done Our stakeholders Building strong relationships with our stakeholders helps enable us to deliver our strategy in line with our long-term values, and operate the business in a sustainable way. Our stakeholders are the people who work for us, bank with us, own us, regulate us, and live in the societies we serve and the planet we all inhabit. These human connections are complex and overlap. Many of our employees are customers and shareholders, while our business customers are often suppliers. Guided by our purpose, we aim to create value for our customers and shareholders. Our size and global reach mean our actions can have a significant impact. We are committed to doing business responsibly, and thinking for the long term. This is key to delivering our strategy. For further details of how we are engaging with our stakeholders, see page 19 . HSBC Holdings plc Annual Report on Form 20-F 9 Group Chairman’s shareholder letter Sir Mark E Tucker Group Chairman 2024 was a year of strong performance. We continued to help our customers navigate challenges and capture meaningful opportunities, whilst providing increased returns for our shareholders. Looking ahead, we have the right people and structure to drive accelerated growth in 2025 and beyond. In 2024, global economic growth was mixed. In the West, the US remained an outperformer, while growth across Europe was disappointing. In Asia and the Middle East, there was broadly steady growth. With inflation falling and with signs of the labour market softening, the US Federal Reserve was able to start cutting rates, as did most advanced economies. This was against a backdrop of significant geopolitical uncertainty, heightened by numerous and consequential elections across the world. The war in Ukraine, now entering its fourth year, and the conflicts and continuing tensions in the Middle East, have had a tragic human impact. Our thoughts are with all those who have suffered and continue to experience the devastating consequences. In this context, our focus is on our customers, leveraging our global network to help them navigate the challenges and capture the opportunities that emerge. That approach, combined with the disciplined execution of our strategy, delivered another strong financial performance and increased returns in 2024. And we are very well positioned for the future. HSBC’s 160 th Anniversary 2025 will mark HSBC’s 160 th anniversary. In 1865, HSBC’s founders started out with a clear and simple objective: to establish a bank in Hong Kong and Shanghai that would facilitate local and international trade, connecting East and West, and the many places in-between. That objective is as relevant and significant today as it was then. 2024 progress and performance In 2024, we delivered profit before tax of $32.3bn - an increase of $2.0bn compared with 2023. Our return on average tangible equity was 14.6%, or 16% excluding the impact of notable items. We delivered increased returns for our shareholders. The Board approved a fourth quarterly dividend of $0.36 per share, bringing the total dividend announced for 2024 to $0.87 per share. This includes the special dividend of $0.21 per share that was paid in June following the completion of the sale of HSBC Bank Canada. In addition, we announced three share buy-backs in respect of 2024 worth a total of $9bn. And today, we announced a further share buy-back of up to $2bn. Since the start of 2023, we have repurchased 11% of the issued share count. Combined with our sustained levels of profitability, this led to greater earnings and dividends per share for our shareholders. Dividends paid in 2024, together with a more than 20% increase in the share price, delivered a total shareholder return for the year of more than 30%. Our performance demonstrates that our strategy is working. To maintain, and indeed accelerate, the momentum, we are being very deliberate in creating investment capacity for priority areas, focusing on long- term strategic growth. Optimising cost and capital allocation, we completed the sale of our businesses in Canada, Russia, Argentina, and Armenia, as well as our retail banking operations in France and Mauritius. We announced the planned sale of our business in South Africa and of our private banking business in Germany, as well as the planned sale of our life insurance business in France. In parallel, our strategic investments are yielding significant results. In Wealth, for instance, revenue grew by 18% in 2024, including a 21% increase in fee and other income. The continued inflow of Net New Invested Assets and growth in total customers point to the material upside opportunity. In Hong Kong, for instance, we added approximately 800k new-to-bank customers. 10 HSBC Holdings plc Annual Report on Form 20-F Strategic Report \"Our performance demonstrates that our strategy is working. To maintain, and indeed accelerate, the momentum, we are being very deliberate in creating investment capacity for priority areas, focusing on long- term strategic growth.\" At the same time, we secured multiple additional licences to expand our operations in mainland China. In India, we received an approval earlier this year to open bank branches in 20 new cities that are at the centre of the expanding wealth and international opportunity. We will continue to focus on and invest in growth opportunities where we have a clear competitive advantage. Leadership and Board Changes Following Noel Quinn’s decision to retire as Group Chief Executive, the Board ran a rigorous and robust process to appoint his successor. I would like to once again pay tribute to Noel’s exceptional leadership and thank him for his unwavering commitment and dedication to HSBC during his 37 years of service. We wish him the very best in all of his future endeavours. In September, Georges Elhedery became our Group Chief Executive. He brings a wealth of experience and an outstanding track record of delivery, achieved over a career spent working in Asia, the Middle East and Europe. In a little over five months, he has already made his mark. From 1 January 2025, we began operating through four businesses: Hong Kong, the UK, Corporate and Institutional Banking, and International Wealth and Premier Banking. The objective is to create a simpler and more dynamic organisation - with faster decision- making and clear lines of accountability. Georges was succeeded as Group Chief Financial Officer by Pam Kaur, who joined the Board as an Executive Director, having previously served as Group Chief Risk and Compliance Officer. At the 2024 Annual General Meeting (‘AGM’), David Nish retired from the Board. David made invaluable contributions over eight years, particularly as Chair of the Group Audit Committee and as Senior Independent Director. Ann Godbehere took over as Senior Independent Director. Ann’s extensive financial services experience, over a 30-year career spanning insurance, retail and private banking, and wealth management, positions her very well for this role. Brendan Nelson took over as Chair of the Group Audit Committee. His UK and international financial and auditing expertise and experience are enormously valuable. In 2024, the Board held meetings in mainland China, Dubai, Singapore, New York, and London. On each occasion, we had the privilege and pleasure to meet with valued clients, government officials, regulators, and colleagues. Our AGM in London and the Informal Meeting of our Hong Kong Shareholders provided substantive opportunities to engage with our shareholders, on important issues related to the Group. Global outlook The economic outlook remains uncertain with potential downside risks to global growth from trade frictions and supply chain disruptions. Inflation has declined but is proving stubborn and could be impacted by oil and gas prices, as well as any trade tariffs. Global growth is expected to remain fairly stable in 2025, with the US still likely to remain the major engine of growth. However, policy priorities are adding to uncertainties regarding growth prospects around the world. Already, it appears that the improvement in world trade growth may be starting to falter. In China, the package of fiscal and monetary measures announced in the final quarter of 2024 was welcome and helped it reach its annual target of ‘around 5%’ GDP growth. Aided by its transformation to a consumption- led and innovation-focused economic model, we expect it to deliver a comparable performance in 2025. Hong Kong should also continue to expand, with its growth directly linked to mainland China. Elsewhere in Asia, changing supply chains and resilient local demand helped to drive growth in a number of markets, including India. Over the longer term, the demographic dividend will benefit countries like India and markets across South and Southeast Asia. As this happens, we also continue to see great potential in the fast-growing corridor between Asia and the Middle East, where strong demographics combine with large scale capital spending on infrastructure and further diversification, which are set to continue. In Europe, with inflation pressures easing and interest rates on a downward trajectory, consumer spending should rise. As a result, we expect the Eurozone to expand this year. Meanwhile, the new UK government is pursuing a pro-growth agenda, which we fully support. Our people I want to end by expressing the Board’s immense appreciation and gratitude to all our colleagues for driving our Group forward. All that we delivered in 2024 was only made possible by their sustained efforts, energies, and execution focus. They are the lifeblood of the HSBC Group, serving our customers and creating value for shareholders. Sir Mark E Tucker Group Chairman 19 February 2025 HSBC Holdings plc Annual Report on Form 20-F 11 Group CEO’s shareholder letter Georges Elhedery Group CEO A simple, more agile, focused organisation built on our core strengths, delivering sustainable strategic growth for our customers and shareholders. RoTE 14.6% (2023: 14.6% ) RoTE excluding notable items 16.0% (2023: 16.2% ) Profit before tax $32.3bn (2023: $30.3bn) Dear fellow shareholders, The opportunity to lead HSBC is a privilege. Even more so as we celebrate our 160th anniversary. Like each of my predecessors, I see my responsibility as delivering sustainable strategic growth for our shareholders. This begins by putting our customers at the centre of everything we do. Our financial strength, international network, heritage, and brand mean we build upon firm foundations. We look to the future with confidence. We begin from a position of strength, which is reinforced by our 2024 performance. During the year, we delivered a return on average tangible equity (‘RoTE’) of 14.6%. This includes several notable items, in particular related to strategic disposals. Excluding these, our RoTE was 16.0%, achieving our ‘mid-teens’ target. Our common equity tier 1 (‘CET1’) capital ratio was 14.9%, reflecting our long-standing financial strength. With our continued focus on cost discipline, we managed cost growth on our target basis of around 5%, which was in line with our targeted cost growth. This strong performance enabled us to announce $26.9 billion in returns to our shareholders through dividends and share buy-backs, which we expect to remain central to our strategy. Simple, more agile, focused The world in which we operate is changing quickly. We are adapting to help our customers navigate new complexities. By doing so, we will open up a world of opportunity as we serve their needs, delivering on our strategy. Since assuming the role in September, I have focused on injecting energy and intent into the way we deliver our strategy. We are being more agile in the way we allocate our resources and invest to prepare for the future. That includes retiring non-strategic assets and embracing the productive power of new technologies and tools to modernise HSBC and enhance the way we serve our customers. We have renewed vigour in finding the efficiencies that will optimise our resource allocation, be that geographical, business line or balance sheet. This will enhance the way we actively and dynamically manage costs and capital, and target investments. We will be guided by three overarching priorities: – Focus on our customers, delivering high levels of satisfaction; – Drive long-term growth by focusing on our strengths, increasing our leadership and market share in the areas where we can generate attractive returns; – Simplify our structure and operating model. Reshape and rationalise our portfolio, to meet the needs of a fast-changing world. To achieve this, I have put in place a smaller, core team of exceptionally talented leaders. They are each committed to fostering a culture of excellence for our colleagues, driven by a growth-orientated mindset. HSBC’s many talented colleagues around the world are key to delivering the exceptional customer experience that will drive our future growth. We have also simplified the organisation in two important ways. First, by moving away from a complex matrix governance structure built around three business lines and five geographical regions to create four new businesses. Each firmly rooted in our core strengths: – Corporate and Institutional Banking, which combines our two wholesale businesses; – International Wealth and Premier Banking, to focus on accelerating the build out of our global wealth proposition; 12 HSBC Holdings plc Annual Report on Form 20-F Strategic Report \"Our ambition is to unlock HSBC’s full potential for the benefit of all our stakeholders, provide excellent customer outcomes that enhance our franchise and brand, generating the strategic growth that will deliver attractive returns for you, our shareholders.\" – Our two home markets of Hong Kong and the UK, where we have scale and market- leading positions. HSBC’s supporting infrastructure is being simplified and realigned to enable these four businesses to grow. Simply put, we are aligning our structure to our strategy. Second, we are significantly improving our operating model, led by a tighter team at the Group Operating Committee, that will: – Provide clarity of accountability, empower colleagues to make faster decisions and accelerate the pace at which we generate greater productivity; – Make HSBC simple, with fewer management lines and layers, and less committees, designed to reduce bureaucracy, create closer collaboration, emphasise teamwork, and facilitate the flow of ideas and innovation; – Adapt quickly to the factors that are shaping the economies and industries in which our customers operate; – Sharpen and strengthen our focus on capital efficiency and firm-wide risk management. This will create a step change in the way we work, the way we serve customers and the way we generate sustainable strategic growth, driving higher returns for our shareholders. In short, unlocking HSBC’s full potential. Designed to deliver strong, sustainable strategic growth For 160 years, HSBC has been defined by its financial strength and international network. Both remain enablers of everything we do. What is changing is the clarity, speed and intensity with which we are repositioning HSBC around our four complementary, clearly differentiated businesses. Corporate and Institutional Banking (‘CIB’) is an international wholesale bank with significant competitive advantages. It has a powerful deposit franchise with financing capabilities supported by the strength of our balance sheet and our network. It has the products and skills required to serve the global banking needs of international corporate clients, particularly in transaction banking where we continue to invest. This positions us to better capture global and intra- regional flows as supply chains reconfigure, new trade routes emerge, economies grow, and customers’ expectations of financial services evolve. The future economy will require financing and investment in sectors such as advanced technologies, specifically digitalisation, computing and generative AI, as well as clean energy and healthcare. CIB is well positioned to facilitate this by helping entrepreneurs to secure the capital they need to build the businesses of the future and by supporting our customers as they look to decarbonise. International Wealth and Premier Banking (‘IWPB’) is ideally placed to capture the increasing number of affluent and high-net- worth customers. Especially those with international banking needs who seek new investment opportunities to help them to protect and grow their wealth. Our recognised brand, financial strength and complementary footprints across Asia and the Middle East serve to reinforce HSBC‘s position in the world’s fastest-growing wealth markets. We also have an asset management business with distinct specialism in both regions offering customers access to investment opportunities across asset classes. The Hong Kong and UK businesses give us strong platforms in our home markets. We serve personal banking customers and small and medium enterprises in these businesses. In Hong Kong specifically, where HSBC was founded, Hang Seng Bank, a customer- centric community bank, is a strategically important investment of the HSBC Group, which enhances the strength of our franchise and market-leading position. We also have a fast-growing insurance manufacturing business in Hong Kong, leveraging the inflows that are propelling Hong Kong to become the leading international wealth hub. In the UK, we have a leading retail, commercial and innovation-focused bank which continues to build market share. Customers in Hong Kong and the UK with global banking needs will be able to access the power of our international network through our CIB and IWPB businesses, that are anchored in these two leading international financial centres. HSBC Holdings plc Annual Report on Form 20-F 13 Financial strength CET1 ratio 14.9 % (2023: 14.8 %) In 2024, our strong financial performance enabled us to announce $26.9bn in returns to our shareholders through dividends and share buy-backs. Cost discipline Operating expenses $33.0bn (2023: $ 32.1 bn) Target basis operating expenses up 5% to $ 32.6 bn Delivering on our priorities to customers and shareholders HSBC is a highly connected, global organisation. Our international network is a significant differentiator. By refocusing on our core strengths, we are creating a simple, more agile, focused organisation structured to better serve our customers and deliver for our shareholders. We have taken the first deliberate and decisive steps. We continue to move at pace and with a relentless focus on actively managing our costs. Not as a one off, but as an embedded mindset. How we deliver on our three priorities is equally important. We are instilling a culture of excellence, leadership and accountability throughout the firm. We are also undergoing a comprehensive transformation of our operations, modernising our infrastructure, and investing in technology such as AI, generative AI, data and analytics. This will enhance customer experience as well as drive operational excellence. The aim being to create a refocused, reinvigorated HSBC, firmly rooted in four complementary businesses with the ambition to generate high levels of total shareholder returns. Today’s actions define a confident future I am confident about our future and what we can achieve. As we celebrate our 160 th anniversary, our history and heritage stand us in good stead. In so many ways, adapting to new economic realities and technologies is what we have always done. It brings out the best in our people and culture, especially when acting as a trusted advisor to our customers as they navigate the world’s economic uncertainties and look towards new opportunities. As we look to the future, our strategic priorities are clear, our leadership team is now in place, supported by a simplified structure that enables action. We have clarity on who we are and what we seek to achieve. We are driven by a precision of purpose that guides the way we do business, the values we uphold and the way we serve our customers, colleagues and communities. We are prioritising a high-performance culture where employees are passionate about what they can achieve and rewarded for their strong customer focus, skills, ambition and initiative. We will invest in our people, one of our most valuable assets, providing them with expansive career opportunities and supporting them in developing future-focused skills, establishing HSBC as an employer of choice and a great place to work. A strong culture and effective leadership will be key to our long-term success. I would like to thank all of my colleagues for their valuable contributions to our results. It is a privilege to work with such talented people. Their dedication, commitment, and desire to deliver for our customers differentiates HSBC and is key to delivering long-term growth. The actions we are taking will have clear and tangible impact. Our ambition is to unlock HSBC’s full potential for the benefit of all our stakeholders, provide excellent customer outcomes that enhance our franchise and brand, generating the strategic growth that will deliver attractive returns for you, our shareholders. Georges Elhedery Group CEO 19 February 2025 14 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Our strategy During 2024, we continued to implement our strategy aligned to our purpose, values and ambition. On 22 October 2024, we announced that we would simplify our organisational structure to help accelerate delivery against our strategic priorities. Effective 1 January 2025, we are operating through four new businesses: Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking. The Group’s functions are being realigned to support the four businesses. For 2024, the bank operated under, and our reporting remained aligned to, our prior global business structure, Wealth and Personal Banking, Commercial Banking and Global Banking and Markets. Building leadership where we are strong Our strategic priorities remain clear. We aim to maintain and build on our leadership in Hong Kong and the UK. International connectivity distinguishes HSBC – indeed, international trade has always been at the heart of our business. We were founded in Hong Kong in 1865 and by 1875 had expanded into seven countries across Asia, Europe and North America. We are committed to building on our strong platform for growth. HSBC is a highly connected, global business and the plans we set out in October 2024 aim to increase our leadership and market share in areas where we have competitive advantage, deliver best-in-class products and service excellence to our customers, and create a simple, more agile, focused organisation with clearer lines of accountability and faster decision making. 2024 results We delivered a good set of results again in 2024. Our reported profit before tax was $32.3bn. During 2024, we reported several notable items, in particular related to the disposal of our businesses in Canada and Argentina. To facilitate comparison across periods, we also consider profit before tax excluding notable items and the impact of foreign currency translation. On this basis, profit before tax was $34.1bn, compared with $32.7bn in 2023. Our reported revenue of $65.9bn was broadly stable compared with 2023. Excluding notable items and in constant currency, we grew revenue by 5% compared with 2023. In 2024, we achieved a RoTE of 14.6%. GBM $7.1bn During 2024, we reported several notable items, in particular related to strategic disposals. To facilitate comparison across periods, we also consider our RoTE excluding the impact of notable items. In 2024, RoTE excluding notable items was 16.0%, achieving our target of ‘mid-teens’. We delivered a 16.2% RoTE excluding notable items in 2023. 14.6% Return on average tangible equity (2023: 14.6% ) Reported profit before tax Corporate Centre $1.2bn $ 32.3 bn (2023: $30.3bn ) WPB $12.2bn CMB $11.9bn Progress in our affluent and wealth businesses In WPB, revenue increased by 7% compared with 2023 on a constant currency basis. We continued to demonstrate strategic progress during 2024, building our affluent and wealth propositions, taking advantage of the growth of wealth assets, specifically in Asia. At 31 December 2024, wealth balances in WPB were $1.8tn, an increase of 7% compared with 2023. Within this we attracted net new invested assets of $64bn in 2024, with $47bn booked in Asia. Wealth deposits, including Premier and Global Private Banking deposits, grew to $555bn. Revenue in Wealth was up $1.3bn or 18% on a constant currency basis, with an increase in Asia of 32%. This supports our medium term target to grow Wealth fees and other income at a double-digit percentage compound annual growth rate over the medium term. Our total invested assets were $1.3tn, up from $1.2tn in 2023. There was a strong performance in our WPB insurance business, which delivered revenue growth of 32% to $1.8bn. Our insurance manufacturing new business contractual service margin (‘CSM’) of $2.5bn increased by 49% compared with $1.7bn in 2023. The growth in CSM underpins our potential future revenue from this business. $1.8tn Wealth balances Increased by 7% compared with 2023 HSBC Holdings plc Annual Report on Form 20-F 15 Progress in our wholesale businesses In CMB, revenue declined by 4% compared with 2023 on a constant currency basis. This was primarily due to the non-recurrence of a gain in 2023 on the acquisition of SVB UK. In GBM, constant currency revenue grew by 11% compared with 2023. Our strength in international connectivity is a key differentiator. We partner with our clients as they expand internationally. The reconfiguration of global supply chains plays to our strength in network business: in our 58 markets, we are well placed to help clients manage increased complexity. Transaction banking is a leading HSBC proposition. We ranked second by Global Payments Solutions (‘GPS’) revenue in the first three quarters of 2024 1 . We also facilitated over $850bn in trade 2 and have been ranked first in revenue for the last seven consecutive years 3 . We generated revenue of $26.3bn from transaction banking during 2024, which was broadly stable compared with 2023. We were ranked joint second in Global Foreign Exchange (‘GFX’) revenue 4 and second in APAC securities services in the first three quarters of 2024 5 . $850bn Trade volume facilitated 1  Source: Coalition Greenwich Competitor Analytics – 9M24. 2  HSBC internal management information, excluding Hang Seng, Malaysia and Germany. 3  Source: Coalition Greenwich Competitor Analytics – 9M24. 4  Source: Coalition Greenwich Competitor Analytics – 9M24. 5  Source: Coalition Greenwich Competitor Analytics – 9M24. Performance across geographies Hong Kong We have the leading banking franchise in Hong Kong, with $575bn in customer deposits and market leadership in a number of product areas 6 . In 2024, reported revenue was $21.2bn, an increase of 6%. We welcomed 799,000 new-to-bank customers in WPB, with the rate of growth accelerating from 345,000 in the first half of 2024, to 454,000 in the second half. Our 2024 full year new-to-bank customers numbers grew by 66% compared with 2023. We also continued to solidify our leadership position and grow our WPB business. In our wholesale businesses, we focused on maintaining our leading position across multiple products. In trade finance, our market share was 29.2%, an increase of 3.5 percentage points from 2023 7 . UK HSBC UK has a top 3 franchise 8 with $340bn in customer deposits. Reported revenue was $12.8bn in 2024, a decrease of 5%, although it represented an increase of 5% excluding the $1.6bn gain on acquisition of Silicon Valley Bank UK – a notable item in 2023. We continued to grow our CMB business and we are ‘Share Leader’ in UK corporate banking with 75% market penetration, according to Coalition Greenwich. In our WPB business, we grew mortgage lending balances by $4.6bn since 31 December 2023 on a constant currency basis, taking our UK mortgage market share from 8.0% to 8.1% 9 . In the UK, we see the opportunity to continue building our mortgage franchise and build share in small and medium-sized enterprise (‘SME’) banking. Other markets In addition to Hong Kong and the UK, we have an established presence in a number of markets, including mainland China, India, Singapore and the UAE. These markets are well connected to international trade, wealth and investment flow and are key to our international connectivity. In 2024, we reported profit before tax of $3.2bn in our mainland China business, including a $2.2bn share of profit from our associate, BoCom. We have a strong client franchise in mainland China, helping to support clients’ international needs. We were the Best Trade/Supply Chain Finance Bank in 2024 10 . We also completed the acquisition of Citi’s retail wealth management portfolio, and supported by our expanded onshore Global Private Banking business, grew our wealth invested assets by 61% compared with 2023. In India, we reported a profit before tax of $1.7bn. We aim to continue growing our wholesale franchise by taking advantage of corporate supply chains. In 2024, we were recognised by Euromoney as the number one International Bank in India. We are also tapping into the wealth pools of the Indian diaspora through Global Private Banking. In 2024, we remained the top foreign bank for non-resident Indians in wealth 11 . In January 2025, we received permission to open 20 further branches, the largest such approval for a foreign bank in over a decade. In Singapore, we generated profit before tax of $1.4bn. Singapore is our primary wholesale offshore booking centre and wealth hub within the ASEAN region and is a centre for our transaction banking operations. In 2024, we were recognised by Euromoney as the Best International Bank and the Best Cash Management Bank in Singapore. We continued to grow our Premier and Wealth balances in Singapore in 2024. In the UAE, we generated $0.9bn in profit before tax. We continue to be the largest foreign bank in the UAE 12 and aim to continue growing our institutional and international wholesale banking business, leveraging the vital role the UAE and the Middle East play in global trade. In 2024, we were ranked number one in equity and debt capital markets in MENAT for the 4 th consecutive year 13 and Euromoney recognised us as the UAE’s Best International Bank. We established onshore Global Private Banking in 2022 and have continued to invest in our wealth platforms including our global online trading platform WorldTrader, launched in 2024. Our Wealth invested assets grew by 25% compared with 2023, and we saw an increase of 8% in our international new-to- bank customers during the same period. As noted above, from 1 January 2025, we are operating through four businesses, while during 2024, we operated through three global businesses: WPB, CMB and GBM. 799,000 Hong Kong WPB new-to-bank customers 75% UK corporate banking market penetration 6 HSBC internal analysis based on loans and advances to customers and customer accounts in our Hong Kong legal entity as of 30 June 2024, and the financial data presented in the 2Q24 results announcements of 13 selected peer banks. 7 Source: HKMA. 8 HSBC internal analysis based on the 9M24 PBT of HSBC UK and the financial data presented in the 3Q24 results announcements of four selected peer banks. 9 Source: Bank of England. 10 Source: Corporate Treasurer Awards 2024. 11 Source: Indian Mutual Fund Industry. 12 HSBC internal analysis based on 9M24 revenue, deposits and advances, using peers' published results. 13 Source: Bloomberg league table. 16 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Reshaping and focusing the Group We have continued to make progress in reshaping the Group. In 2024, we completed the sales of our businesses in Canada, Russia, Armenia and Argentina. Furthermore, we disposed of our retail banking operations in France and Mauritius. We also announced planned disposals in our private banking business in Germany and our business in South Africa. We signed a memorandum of understanding in relation to the planned sale of our France life insurance business and have launched a strategic review of our business in Malta. The review is at an early stage and no decisions have been made. We completed the acquisition of Citi’s retail wealth management portfolio in mainland China and SilkRoad Property Partners Group in Singapore. We expect further reshaping actions as we align the Group with our four businesses. Deposit strength core to our strategy We are proud of our deposit strength across all of our franchises, which has built steadily since our founding. We have a total deposit base of $1.65tn, comprised primarily of current and savings accounts. Our balance sheet is also highly liquid with customer loans of $0.93tn, representing 56% of customer deposits. We operate with a customer deposits surplus of $724bn relative to customer loans. We hold a surplus of deposits in each of our major functional currencies, including US dollars, Hong Kong dollars, sterling, renminbi and the euro. We also operate a surplus of customer deposits relative to customer loans in our major operating entities, including The Hongkong and Shanghai Banking Corporation Limited, HSBC UK and HSBC Bank plc. The long 2009-2021 period of close-to-zero central bank interest rates and very low government bond yields in many of our operational currencies constrained our earnings in prior years. One contributor to our rise in profits in recent years has been a return of central bank interest rates and government bond yields to levels more typical of prior decades. Over the period from 2022 to 2024, we increased both the size and duration of our structural hedge, further stabilising our banking NII. The sensitivity of our banking NII to a 100bps parallel downward shift in interest rates has reduced from c.$(7)bn at 30 June 2022, to $(2.9)bn at 31 December 2024. This was primarily due to hedging actions, although higher prevailing interest rates also contributed to a reduction in sensitivity. The Group expects to further increase the size and duration of the structural hedge, subject to market conditions. $1.65tn Customer deposit balances (2023: $1.61tn) $0.93tn Customer loans (2023: $0.94tn) Improving operational excellence through artificial intelligence We are transforming our operations to enhance customer experiences through the use of artificial intelligence (‘AI’) and automation to help deliver faster, personalised and more seamless services. Through the reduction of inefficiencies and streamlining processes we will help provide quicker responses and better journeys for our customers. The investments we are making in Technology will contribute to a simpler, safer organisation with operational resilience and stability at its core, helping to create lasting value for both our customers and stakeholders. By harnessing AI capabilities, HSBC aims to improve customer service through AI supported mobile apps and strengthened contact centre capabilities, as well as improving process efficiency in onboarding, know-your-customer, and credit applications. We are supporting our engineers through the scaled roll out of coding assistants to improve technology productivity, and we are using AI to help protect the bank and our customers more effectively against fraud and cyber crime. We are committed to the responsible use of AI, ensuring that our initiatives align with industry and regulatory standards and best practices. Our governance frameworks aim to enable robust prioritisation of use cases whilst mitigating potential risk associated with AI deployment. HSBC Holdings plc Annual Report on Form 20-F 17 Our ambitions Mid-teens RoTE extended During 2024, we announced our intention to target a mid-teens RoTE 1 , excluding the impact of notable items, for 2025. Alongside our 2024 annual results, we have extended this target to each of 2025, 2026 and 2027. We will consider our cost and investment plans within this framework. Simplification With our 2024 results, we have announced that we aim to generate approximately $0.3bn of cost reductions in 2025, with a commitment to an annualised reduction of $1.5bn in our cost base expected by the end of 2026. These savings are primarily people- related organisational design reductions, have negligible impact on revenues and are aligned to the strategic reorganisation of the Group. We have simplified our businesses in our domestic markets, Hong Kong and the UK. Our scale retail and commercial banking platforms here will benefit from shorter lines of decision making, empowering our colleagues to get things done. We plan to intensify successful partnerships between our domestic markets and our international franchises, CIB and IWPB, for those clients with more complex and networked needs. Ensuring we continue to provide the services and products our global scale enables us to create is key to our growth. We will continue to service Wealth clients; and internationally active commercial and corporate clients in Hong Kong and the UK on an integrated basis. Growth We are focused on growth opportunities within our strategy that play to our strengths, while maintaining tight cost discipline and continuing to invest in growth and efficiency. We see growth opportunities in each of our four franchises. In CIB, these include further expanding our international network businesses, notably transaction banking. In IWPB, we intend to particularly focus on building our successful wealth business, especially in Asia. In Hong Kong, we intend to support continued growth in non-resident customer numbers and will seek to build on our strong SME proposition. In the UK, we see the opportunity to continue building our mortgage franchise and build share in SME banking. We will consider using cost savings generated through business disposals for incremental re-investment into our core franchises. This would be in addition to our ongoing investments. Capital generation Our business model is designed to be highly capital generative. In 2024, our common equity tier 1 (‘CET1’) capital ratio grew from 14.8% to 14.9% as at 31 December 2024. During the calendar year, we paid $5.5bn ordinary dividends with respect to 2024, we expect to pay a further $6.4bn through the fourth interim dividend and we expect to repurchase $11bn of our shares for cancellation with respect to 2024. The capital generated on the disposal of our Canadian banking operations supported the $0.21 per share special dividend paid in 2Q24, representing a further $3.9bn distribution. We aim to maintain a CET1 capital ratio in the range of 14 to 14.5% over the medium term. Our primary use of capital generation is to pay an ordinary dividend of 50% of profit attributable to ordinary shareholders, excluding material notable items and related impacts (our dividend payout ratio target basis 1 ). Our preferred use of capital after paying the dividend is to support the growth of our four businesses. In recent years, much of our income growth has come from capital-light income streams, such as deposit revenue from higher interest rates; and from fee income, notably in Wealth. Our RWAs of $838.3bn at 31 December 2024 remained broadly stable compared with 31 December 2022. Combined with strategic actions, this enabled the Group to buy back 11% of its outstanding shares in two years, while reporting a CET1 ratio rising from 14.2% to 14.9% over the two years. Should organic growth in any given year require less incremental capital than the Group has retained after paying ordinary dividends to our shareholders, we plan to consider further share buy-backs. c.$1.5bn Annualised reduction in our cost base by the end of 2026 14-14.5% CET1 capital ratio over the medium term 50% Dividend payout ratio target basis 1 1 We do not reconcile our forward guidance on RoTE excluding the impact of notable items, target basis operating expenses, dividend payout ratio target basis or banking NII to their equivalent reported measures. 18 HSBC Holdings plc Annual Report on Form 20-F Strategic Report ESG overview Our approach to environmental, social and governance is rooted in creating long-term value for our customers and the economies that we serve. Our approach Our approach to ESG is focused on creating long-term value for our customers and wider stakeholders. We focus our efforts on three areas: the transition to net zero, building inclusion and resilience, and acting responsibly. Our approach to the transition Supporting the transition to net zero is a key priority for HSBC. We believe the transition to net zero will help make the global economy stronger and more resilient against mounting climate impacts. In October 2020, we announced our ambition to become a net zero bank by 2050. We believe supporting our customers’ transition both benefits their business and helps generate long-term financial returns for our shareholders. Since we set our net zero ambition, collective global efforts have driven progress in some vital areas of the decarbonisation challenge. Billions of dollars have been allocated to clean energy. Falling costs of renewables and advancements in clean technologies have accelerated their adoption. And while it is taking time for more nascent industries such as hydrogen, carbon capture and storage and sustainable aviation fuel to scale, with supportive government policies and industrial strategies their adoption can be accelerated, and their costs reduced. We have always recognised that the transition would not be linear. Yet while the transition has progressed, the global pace of change remains insufficient. As the UN’s latest Emission Gap report recently warned, current government policies, conventional energy demand, clean technology adoption, and wider consumption patterns are not yet aligned with the Paris Agreement goal of holding the temperature increase to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels. As a bank, our ability to finance our customers’ transition and, in turn, progress toward and meet our targets, relies on decarbonisation solutions scaling across sectors, alongside growing demand from our customers for capital to transition their business models. Ambitious and credible governmental policy measures also remain fundamental prerequisites for decarbonising the real economy at sufficient pace. We are limited by, and cannot on our own overcome, the present lag in policy measures and the overall slower pace of the transition. These factors put our customers’, and our own, net zero ambitions at risk. In our net zero transition plan published in January 2024, we committed to continually calibrate our approach to take into consideration the latest scientific methodologies, climate- related policy measures and developments in the real world given that our sector portfolios reflect progress in the real economy in the regions where we operate. As we near the mid- point towards our 2030 targets, it is important to take stock of our own progress so far. We have made good progress in reducing the emissions from our own operations but more uneven progress towards our ambitions for our financed emissions footprint. Net zero in our own operations, business travel and supply chain In 2020, we set an ambition to reach net zero in our operations and supply chain by 2030 and we continue to make good progress in driving down our direct emissions, which are largely derived from energy consumption. We are currently on track to achieve a reduction in our scope 1 and 2 emissions of more than 90% by 2030 compared with our 2019 baseline, through a programme of energy efficiency initiatives and significant investment in renewable power. However, progress in reducing emissions in the scope 3 supply chain component is proving slower than we anticipated, driven mainly by the slower pace of the transition across the real economy. It has become clear that we would need to rely heavily on carbon offsets to achieve net zero in our supply chain by 2030. This approach would not be aligned with recently updated guidance from the Science Based Targets Initiative on the role of offsets in meeting corporate net zero claims. As such, we have revisited this ambition to take into account latest best practice guidance. We are now focused on cutting emissions across our operations, travel and supply chain to achieve net zero by 2050. We expect to continue to report on our progress up to 2030 and beyond. Presently, across our operations, business travel and supply chain, we expect to achieve a reduction of around 40% in emissions by 2030. Interim financed emissions targets Our strategy is to support emission reductions in the wider economy by working with our portfolio of customers to facilitate the emission reductions they are seeking to make. That is what we consider when setting financed emissions targets. To the extent our customers are facing challenges, especially in light of the slower pace of the transition, there is no real benefit to society in simply sending those customers to another organisation that may be less committed to supporting their transition. As such, we are supporting both new and existing customers that are making positive steps to transition to a net zero economy. We continue to focus on engaging with our customers on their transition plans, considering our strategic business lines and markets, managing the products and services we offer, and adapting the financing choices we make to help move the world towards a resilient, net zero economy. However, as we have set out in our net zero transition plan, we must acknowledge that our influence on the decarbonisation of individual companies and the industries and economies in which our customers operate has limits. There are fundamental prerequisites, outside of our control, which impact our ability to meet our 2030 interim financed emissions targets and ultimately reach our net zero ambition. These include technological advancements, diversification of the energy mix, market demand for climate solutions, evolving customer preferences, and government leadership and effective policy. At the current pace of decarbonisation, a combination of the above factors has led to the transition being slower than envisaged by recent Paris-aligned net zero scenarios. Moreover, certain high emitting sectors are not yet currently on a 1.5 °C pathway. Until the real economy makes significant progress in decarbonising, our own progress towards our 2030 targets and 2050 net zero ambition will be constrained. Against this background, we have begun a review of our interim financed emissions targets and associated policies as part of the annual review of our net zero transition plan that we referenced in our 3Q24 earnings release in October. This analysis is complex: it presents considerable data and methodology challenges and it is going to take time to complete. As we calibrate our approach for the latest context, we will seek to balance being ambitious on net zero while recognising present near-term global challenges, and the associated impact of the transition playing out differently across the regions and sectors we serve. In doing so we plan to draw on the latest scientific evidence and credible industry-specific pathways while, at the same time, maintaining our commitment under our 2021 Climate Resolution. HSBC Holdings plc Annual Report on Form 20-F 19 We have been clear on our commitment to being transparent on the risks, challenges and opportunities arising from our ambition to be net zero by 2050. As such, we intend to provide the results of our review in our net zero transition plan update, which we expect to be released in the second half of 2025. We remain committed to net zero, recognising it is a priority for our customers to support their growth and prosperity over the long term. While no single actor can drive the transition alone, we will continue to actively look for opportunities to support our customers’ transition and engage in the ongoing efforts to achieve the goals of the Paris Agreement. Build inclusion and resilience To help create long-term value for all stakeholders, we focus on fostering inclusion and building resilience for our colleagues, our customers and the communities we operate within. For colleagues, we focus on creating an inclusive, healthy and rewarding environment as this helps us to attract, develop and retain the best talent, and we support their resilience through access to well-being and learning resources. We strive to provide an inclusive and accessible banking experience for our customers. We do this by providing resources that help them manage their finances, and services that help them protect what they value. In 2024 we updated our global philanthropy strategy to align with our ESG areas of focus: ‘transition to net zero’; and ‘building inclusion and resilience’, allowing us to work alongside the communities we operate within to help create change. Act responsibly We are focused on operating a strong and sustainable business that puts the customer first, values good governance, and gives our stakeholders confidence in how we do what we do. Our conduct approach guides us to do the right thing and to focus on the impact we have on our customers and the financial markets in which we operate. Customer experience is at the heart of how we operate. We aim to act responsibly and with integrity across the value chain. Engaging with our stakeholders and our material ESG topics We know that engaging with our stakeholders is core to being a responsible business. To determine material topics that our stakeholders are interested in, we conduct a number of activities throughout the year, including engagements outlined in the table below. Disclosure standards such as the TCFD, World Economic Forum (‘WEF’) Stakeholder Capitalism Metrics and Sustainability Accounting Standards Board (‘SASB’), as well as the ESG Guide under the Hong Kong Stock Exchange Listing Rules and other applicable rules and regulations, are considered as part of the identification of material issues and disclosures. Our stakeholders How we engage Customers Our customers’ voices are heard through our everyday interactions with them, customer surveys, listening to their complaints, and online feedback through social media and third-party financial websites and forums. Material topics highlighted through our engagement 1 – Customer advocacy – Cybersecurity – Employee training – Inclusion – Employee engagement – Supporting our customers – financed emissions – Embedding net zero into the way we operate – Sustainability risk policies, including thermal coal phase-out policy and energy policy – Net zero transition plan – Financial inclusion and community investment – Climate risk – Anti-bribery and corruption – Conduct and product responsibility – Supply chain management – Human rights Employees Our colleagues’ voices are heard through our annual Snapshot survey, exchange sessions, town hall meetings, leadership summits, and our ‘speak-up’ channels, including our global whistleblowing platform, HSBC Confidential. Investors We engage with our investors through our AGMs, virtual and in- person meetings, investor roadshows, conferences and investor surveys, seeking to respond to questions they raise and to convey their views to senior management. Communities We regularly engage with non-governmental organisations (‘NGOs’), charities and civil society groups both directly and through cross- industry forums, as well as through partnerships. Our Climate Advisory Panel, comprising representatives from NGOs and industry experts, provides independent advice and challenge. Regulators and governments We proactively engage with regulators, governments and international leaders to build strong relationships, responding to consultations via industry bodies to help shape our approach to financed emissions methodologies, scenario analysis and portfolio alignment to support the transition to net zero in the global economy. Suppliers Our code of conduct sets out our expectations and the minimum standards we expect from our suppliers on the environment, diversity, and human rights. We have begun direct engagement with our highest-emitting suppliers to understand their carbon reduction targets and disclosure plans. 1 These form part of our ESG disclosures suite together with other requirements, and are not exhaustive or exclusive to one stakeholder group. For further details of our disclosures, see our ESG review and ESG Data Pack, as well as our ESG reporting centre at www.hsbc.com/who-we-are/esg-and-responsible-business/esg- reporting-centre. 20 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Our ESG ambitions, metrics and targets TCFD We have established ambitions and targets that guide how we do business, including how we operate and how we serve our customers. These include targets designed to help track our progress against our environmental and social sustainability goals. They also help us to improve employee advocacy and the representation of senior leadership, as well as strengthen our market conduct. The targets for these measures are linked to the pillars of our ESG strategy: transition to net zero, building inclusion and resilience, and acting responsibly. To help us achieve our ESG ambitions, a number of measures are included in the annual incentive and long-term incentive scorecards of the Group CEO, Group CFO and Group Executives that underpin the ESG metrics in the table below. For a summary of how all financial and non- financial metrics link to executive remuneration, see pages 327 to 339 of the Directors’ remuneration report. In our previous disclosures and in our net zero transition plan we have highlighted the risks, dependencies and uncertainties associated with our approach and progress towards our ESG ambitions. For further details on our climate reporting, see the ESG review page 41 . The table below sets out some of the key ESG metrics we use to measure progress against our ambitions. For further details of how we are doing, see the ESG review on page 39 . Environmental : Transition to net zero 1 Sustainable finance and investment 2 Net zero in our own operations 3 Financed emissions 4 $ 393.6 bn 66.1% 7 sectors Cumulative total provided and facilitated since 1 January 2020. (2023: $ 294.4 bn) Ambition: Provide and facilitate $750bn to $1tn of sustainable finance and investment by 2030. Reduction in absolute operational greenhouse gas emissions from 2019 baseline. (2023: 57.3% ) Updated ambition: Become a net zero bank by 2050. Number of sectors where we have set interim financed emissions targets, comprising five on-balance sheet and two combined financed emissions target s. Ambition: Align our financed emissions to achieve net zero by 2050. Social : Build inclusion and resilience Gender representation 5 Black heritage 5 Inclusion Index 7 34.6% 3.0% 78 % Senior leadership roles held by women. (2023: 34.1% ) Ambition: Achieve 35% senior leadership roles held by women by 2025 6 . Senior leadership roles held by Black heritage colleagues in the UK and US combined. (2023: 3.0%) Ambition: 3.4% of senior leadership roles held by Black heritage colleagues in the UK and US combined by 2025 6 . Inclusion index score. (2023: 78 %) Ambition: Maintain 75% in the Snapshot Inclusion index. Governance : Acting responsibly Conduct training 8 Customer satisfaction 9 99% 4 out of 6 3 out of 6 Employees who completed conduct training in 2024. (2023: 98%) Target: At least 98% of employees complete conduct and financial crime training each year. WPB markets that sustained top- three rank and/or improved in customer satisfaction. (2023: 3 out of 6) Target: To be ranked top three and/or improve customer satisfaction rank. CMB markets that sustained top- three rank and/or improved in customer satisfaction. (2023: 5 out of 6) Target: To be ranked top three and/or improve customer satisfaction rank. 1 For further details of our approach to transition to net zero, methodology and third-party limited assurance reports on financed emissions, sustainable finance and investment progress, and our own operations’ scope 1, 2 and 3 (business travel and supply chain) greenhouse gas emissions data, see www.hsbc.com/who-we- are/esg-and-responsible-business/esg-reporting-centre. 2 In October 2020, we announced our ambition to provide and facilitate between $750bn to $1tn of sustainable finance and investment by 2030. For further details and breakdown, see the ESG review on page 43 . For details of how this ambition links with the scorecards, see page 327 . 3 This absolute greenhouse gas emission figure covers scope 1, scope 2 and scope 3 (business travel) emissions. For further details of how this ambition links with the scorecards, see page 327 . 4 See page 46 for further details of our interim targets, which include combined on-balance sheet financed emissions and facilitated emission targets for two emissions intensive sectors: oil and gas, and power and utilities. The remaining five sectors for which we have set on-balance sheet financed emissions targets are: cement; iron, steel and aluminium; aviation; automotive; and thermal coal mining. 5 Senior leadership is classified as those at band 3 and above in our global career band structure. For further details, see the ESG review on page 65 . For further details of how this ambition links with the scorecards, see page 327 . 6    These numerical ambitions do not form part of any US-based senior leader performance or other objectives, or in other jurisdictions where application of such should not apply under local law. 7 For further details, see the ESG review on page 65 . For details of how this ambition links with the scorecards, see page 327 . 8 The completion rate shown relates to the ‘Conduct Matters’ training module that was launched in December 2023 and concluded in 2024, and covers permanent and non-permanent employees (where legally permissible to assign training). For completion rates related to financial crime training, see the ESG review on page 78 . 9 The markets where we report rank positions for WPB and CMB – the UK, Hong Kong, mainland China, India, Mexico and Singapore – are in line with the annual executive scorecards. For further details of customer satisfaction, see the ESG review on page 75 . For further details of how this target links with the scorecards, see page 327 . HSBC Holdings plc Annual Report on Form 20-F 21 Task Force on Climate-related Financial Disclosures (‘TCFD’) TCFD The Financial Stability Board’s Task Force on Climate-related Financial Disclosures (‘TCFD’) recommendations set an important framework for understanding and analysing climate-related risks, and we are committed to regular and transparent reporting to help communicate and track our progress. We also seek to advocate for the same from our customers, suppliers and the industry. We have set out our key climate-related financial disclosures throughout the Annual Report and Accounts 2024 and related disclosures. We recognise that further work lies ahead as we continue to develop our management and reporting capabilities. In 2024, we enhanced our disclosures, such as the portfolio breakdown for Energy Performance Certificate (‘EPC’) ratings into owner-occupied and buy-to-let properties. We have considered our ‘comply or explain’ obligation under both the UK Financial Conduct Authority’s Listing Rules and Sections 414CA and 414CB of the UK Companies Act 2006, and confirm that we have made disclosures consistent with the TCFD Recommendations and Recommended Disclosures, including its annexes and supplemental guidance, save for certain items, which we summarise below. – We set interim 2030 financed emissions targets. However, we use different time horizons for climate risk management. For climate risk, we define short term as time periods up to 2026; medium term between 2027 and 2035; and long term between 2036 and 2050. For financed emissions we do not plan to set 2026 targets. In 2024, we disclosed interim 2030 targets for financed emissions for seven sectors as outlined on page 50 . Following this, we have set combined on-balance sheet financed emissions and facilitated emissions targets for two emissions intensive sectors: oil and gas, and power and utilities. We have also set targets for on-balance sheet financed emissions for the following five sectors: cement; iron, steel and aluminium; aviation; automotive; and thermal coal mining. – The methodology and data used for financed emissions is evolving. We expect industry guidance, market practice, data availability, scenarios and regulatory disclosure requirements to continue to change, along with the shape of our own business. We have begun a review of our 2030 financed emissions targets and associated policies, as part of the annual review of our NZTP that we referenced in our 3Q24 earnings release in October. – We do not fully disclose impacts from climate-related opportunities on financial planning and performance, including on revenue, costs and the balance sheet, quantitative scenario analysis, detailed climate risk exposures for all sectors and geographies or physical risk metrics. This is due to transitional challenges in relation to data limitations, although nascent work is ongoing in these areas. We expect these data limitations to be addressed in the medium term as more reliable data becomes available and technology solutions are implemented. – We currently focus on disclosing only four out of 15 categories of scope 3 greenhouse gas emissions including business travel, supply chain and financed emissions, following our internal materiality assessment. In relation to financed emissions, we publish on-balance sheet financed emissions for a number of sectors, covering 2.7% of our loans and advances to customers at 31 December 2023, as detailed on page 54 . We also publish facilitated emissions for the oil and gas, and power and utilities sectors. Data quality of future disclosures on financed emissions and related risks are reliant on our customers publicly disclosing their greenhouse gas emissions, targets and plans, and related risks. We recognise the need to provide early transparency on climate disclosures but balance this with the recognition that existing data and reporting processes continue to require significant enhancements. For a full summary of our TCFD disclosures, including detailed disclosure locations for additional information, see pages 466 to 472 . ESG disclosure map and directory The table below sets out the key non-financial information, including risks and policies on environmental, social and governance matters, and where it can be found: Transition to net zero At a glance Read more on our approach to the transition and understanding our climate reporting Page 40 Supporting our customers Read more on our progress made against our $750bn to $1tn sustainable finance and investment ambition Page 43 Partnering for systemic change Read more on how we partner externally in support of systemic change, including an update on our Climate Solutions Partnership Page 45 Embedding net zero Read more on our progress made against our ambition to achieve net zero in our financed emissions by 2050 Page 46 Read more on our progress in decarbonising our own operations and supply chain Page 56 Read more on our sustainability risk policies and our thermal coal exposures Page 59 Detailed Task Force on Climate-related Financial Disclosures (‘TCFD’) We make disclosures consistent with Task Force on Climate- related Financial Disclosures (‘TCFD’) recommendations, Page 466 highlighted with the symbol: TCFD Build inclusion and resilience Inclusion disclosures Read more on how we are building an inclusive environment that reflects our customers and communities, and our latest pay gap statistics Page 61 Pay gap disclosures Page 63 Act responsibly How we govern ESG Read more on our approach to ESG governance and human rights Page 72 Page 73 Human rights disclosures How our ESG ambitions link to executive remuneration Read more on our ESG ambitions embedded in executive remuneration Page 20 Pages 314 to 331 ESG Data Pack Detailed ESG information Our ESG Data Pack provides more granular ESG information, including the breakdown of our sustainable finance and investment progress, and complaints volumes www.hsbc.com/esg 22 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Responsible business culture We have a responsibility to help protect our customers, our communities and the integrity of the financial system. Employee matters We are building a responsible business culture that values difference, takes responsibility, seeks different perspectives and upholds good standards of conduct. There may be times when our colleagues need to speak up about behaviours in the workplace and in the first instance we encourage colleagues to speak to their line manager. Our annual employee survey showed that 85 % of colleagues have trust in their direct manager. HSBC Confidential is our whistleblowing channel, which allows colleagues past and present to raise concerns confidentially and, if preferred, anonymously (subject to local laws). Our Snapshot survey showed that 80 % of colleagues feel able to speak up when they see behaviours they consider to be wrong. Our inclusion index measures our colleagues’ sense of belonging and psychological safety within the organisation, and in 2024 this remained unchanged at 78 %. To help address under-representation across our colleague base, we have an ambition to achieve a 35% representation of women in senior leadership roles (classified as those at band 3 and above in our global career band structure) by 2025 1 . We remain on track, having achieved 34.6 % in 2024. We have an ambition to increase our Black heritage senior leader representation in both the UK and US combined to 3.4% by 2025 1 . In 2024 we maintained our position at 3.0% . Our hiring practices are merit-based, and we seek to ensure that every candidate, regardless of their identity and background, has an equal opportunity to demonstrate their skill and potential. We have identified specific Group- wide priorities, which we track and monitor progress against. We adapt implementation of our strategy across international operations to ensure it remains relevant locally. We have enabled 93% of our colleagues to disclose their ethnicity, with 67% currently choosing to do so, where this is legally permissible. 1 These numerical ambitions do not form part of any US-based senior leader performance or other objectives, or in other jurisdictions where application of such should not apply under local law. The table below outlines high-level representation metrics. All employees Male Female Senior leadership 1 Male Female Holdings Board Male Female 1 Senior leadership is classified as those at band 3 and above in our global career band structure. For further details of how we look after our people, including our inclusion ambitions, how we encourage our employees to speak up, and our approach to employee conduct, see the Social section of the ESG review on page 61 . Listening to our customers We continue to listen, learn and act on our customers’ feedback. We use the net promoter system to share customer feedback with our front-line teams, allowing them to respond directly to customers. We also have dedicated global forums to promote ongoing improvement of our customers’ experience. Social matters We aim to help provide people and communities with the skills and knowledge needed to thrive through the transition to a sustainable future. For this reason, we focus our support on programmes that help build inclusion and resilience. We also support climate solutions and innovation, and contribute to disaster relief. For examples of our programmes, see the ‘Engaging with our communities’ section of the ESG review on page 70 . Human rights As set out in our Human Rights Statement, we recognise the role of business in respecting human rights. Our approach is guided by the UN Guiding Principles on Business and Human Rights (‘UNGPs’) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Our Human Rights Statement and annual statements under the UK Modern Slavery Act, are available on www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre. For further details of our approach, see the ‘Human rights’ section of the ESG review on page 73 . Anti-corruption and anti-bribery We are required to comply with all applicable anti-bribery and corruption laws in every market and jurisdiction in which we operate. We seek to focus on the spirit of relevant laws and regulations to demonstrate our commitment to ethical behaviours and conduct as part of our environmental, social and corporate governance. Environmental matters For details of our climate ambition and carbon emission metrics, see the ESG review on page 39 . Group non-financial and sustainability information statement This section primarily covers Group non- financial and sustainability information as required by applicable regulations. Other related information can be found as follows: For further details of our key performance indicators, see page 4 . For further details of our business model, see page 7 . For further details of our principal risks and how they are managed, see pages 36 to 38 . For further details of our TCFD disclosures, including alignment with sections 414CA and 414CB of the Companies Act 2006, see pages 466 to 472 . HSBC Holdings plc Annual Report on Form 20-F 23 Remuneration Our remuneration policy supports the achievement of our strategic objectives by aligning reward with our long-term sustainable performance. Remuneration for our executive Directors At the 2025 Annual General Meeting (‘AGM’), we will be seeking shareholder approval for a new executive Director remuneration policy. Over several years, the Group Remuneration Committee has expressed concerns around the competitiveness of the executive Director remuneration opportunity and indicated a preference to operate a policy with a higher proportion of the package based on variable pay linked to performance, aligned to practice among our international peers. The removal of the limits on the ratio between fixed and variable pay by the UK regulators provides an opportunity to revisit our current Directors’ remuneration policy and the Committee feels that now is the right time to set a policy that better reflects the Group’s focus on long-term sustainable performance. After careful consideration, the Committee concluded that the current variable pay framework of an annual incentive and single performance-based long-term incentive is most appropriate. The Committee considered the right approach is to unwind the changes made in 2014, when the 2:1 pay ratio was introduced and to reset the maximum opportunity. The Committee reflected on the appropriate maximum opportunity for the Group CEO and Group CFO considering (i) the maximum opportunity in 2014; (ii) market data for our international banking peers and the largest FTSE 30 companies, reflecting that HSBC is one of the world’s leading international banks; and (iii) compression challenges within the senior HSBC team. We will continue to set a scorecard of stretching and quantitative financial and strategic performance targets aligned to our strategy and stakeholder interests. Maximum pay outcomes will be delivered only for exceptional performance as required by these targets. The Committee engaged with major investors on the new remuneration policy and the Chair of the Committee met with many shareholders directly. Shareholders we spoke to were generally supportive of our proposal and their feedback has directly influenced the final policy. We would like to thank our shareholders for the time taken to engage with us during the year. For details of our proposed executive Director remuneration policy, see page 314 . 2024 remuneration decisions The Committee considered carefully the wider context in which performance was delivered in 2024 and judged that the overall scorecard outcome for both Sir Noel Quinn and Georges Elhedery was appropriate against the targets set at the start of the year for financial, strategic and personal measures. The Committee also carefully considered the executive Directors’ pay outcomes in the context of pay decisions made for the wider workforce and determined that these were an appropriate reflection of Group, business and individual performance delivered in 2024. Executive Directors’ scorecard outcomes (% of maximum opportunity) 2024 annual incentive Sir Noel Quinn 77.81% Georges Elhedery 78.79% 2022–2024 long-term incentive Sir Noel Quinn 75.00% Georges Elhedery 75.00% For details of Directors’ pay and performance for 2024, see the Directors’ remuneration report on page 326 . Remuneration for our colleagues Our focus remains on taking actions that improve our ability to attract, retain and energise colleagues to deliver high performance and growth. Rewarding colleagues responsibly Fixed pay increases for 2025 were determined based on consistent principles to help address wage inflation in the markets where we operate. We will award an average global fixed pay increase of 3.6% in 2025, compared with 4.4% for the previous year, reflecting that projected wage inflation is lower in many of our markets. We continue to review all wages globally against local Living Wage benchmarks to help ensure we pay responsibly and provide financial security to colleagues. We are proud to have been certified by the Fair Wage Network as a global Living Wage employer for 2025. Recognising colleagues’ success We introduced new performance routines and changes to performance assessment for over 200,000 colleagues in 58 markets. We also introduced a new variable pay structure for over 150,000 colleagues, providing more clarity around variable pay levels for on-target performance, and how this is impacted by Group, business and individual performance. The Group Remuneration Committee determined overall variable pay of $3,800m (2023: $3,774m ). This followed a review of our performance against financial and non- financial metrics set out in the Group risk framework. Our highest performers received the largest increases in variable pay compared with the previous year. Variable pay pool ($m) 2024 2023 For details of how the Group Remuneration Committee sets the pool, see page 313 . Supporting colleagues to grow In our employee Snapshot survey, 78% of respondents said they believe HSBC genuinely cares about their well-being, a record high. We have been ranked number one for workplace mental health for the third year running in the Global CCLA Corporate Mental Health Benchmark 2024. We have prioritised supporting colleagues to work flexibly, balancing customer needs, social connection and individual flexibility. 24 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Financial overview In assessing the Group’s financial performance, management uses a range of financial measures that focus on the delivery of sustainable returns for our shareholders and maintaining our financial strength. Executive summary We delivered a strong performance in 2024 with reported profit before tax of $32.3bn , up $2.0bn or 6% compared with 2023 . Our financial performance demonstrates the progress against our strategic priorities. In 2024, we achieved a return on average tangible equity (‘RoTE’) of 14.6% and a RoTE excluding notable items of 16.0% . We have now further extended our mid-teens RoTE target in each of the three years from 2025 to 2027, excluding notable items. This section sets out our key Group financial targets and the progress we made towards these in 2024, and our expectations for 2025 and beyond. We also include a more detailed table covering further key financial metrics that we consider insightful for understanding the Group’s performance. The Group financial results that follow provide more detailed insight into the performance that has driven the outcomes of our financial targets. It covers income statement performance on both a reported and constant currency basis, and the main factors impacting the strength of our balance sheet, capital and liquidity position. Group financial targets Return on average tangible equity excluding notable items 16.0 % (2023: 16.2 %) In 2024, RoTE was 14.6% , in line with 2023. For the purposes of measuring performance against our Group target, we adjust RoTE to exclude notable items. From 1 January 2024, we revised the adjustments made to RoTE from excluding only the impact of strategic transactions and the impairment of BoCom, to exclude all notable items. This was intended to improve alignment with the treatment of notable items in our other income statement disclosures. RoTE excluding notable items has been re-presented for 2023 on the revised basis and we no longer disclose RoTE excluding strategic transactions and the impairment of BoCom. RoTE excluding notable items was 16.0% , a decrease of 0.2 percentage points compared with 2023. We are now targeting a mid-teens RoTE in each of the three years from 2025 to 2027 excluding notable items. Our targets and expectations reflect our current outlook for the global macroeconomic environment and market-dependent factors, such as market-implied interest rates as of mid- January 2025 and rates of foreign exchange, as well as customer behaviour and activity levels. Target basis operating expenses $32.6bn (2023: $31.1bn ) In 2024, reported operating expenses increased by 3.0% compared with 2023. Target basis operating expense growth was 5.1% compared with 2023, in line with our target of approximately 5%. Growth primarily reflected higher investment spend, including in technology and from inflationary pressures. Our target basis operating expenses for 2024 excluded the direct cost impact of the disposals in France and Canada from the 2023 baseline. It is measured on a constant currency basis and excludes notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency. We retain a Group-wide focus on cost discipline. We are targeting growth in target basis operating expenses of approximately 3% in 2025 compared with 2024. Our target basis operating expenses for 2025 excludes the direct cost impact of the business disposals in Canada and Argentina, notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency. Our cost target includes the impact of simplification-related savings associated with our announced reorganisation, which aims to generate approximately $0.3bn of cost reductions in 2025, with a commitment to an annualised reduction of $1.5bn in our cost base expected by the end of 2026 . To deliver these reductions, we plan to incur severance and other up-front costs of $1.8bn over 2025 and 2026, which will be classified as notable items. Capital and dividend policy CET1 ratio 14.9 % Dividend payout ratio in respect of 2024 50% on a dividend payout ratio target basis. At 31 December 2024, our CET1 capital ratio was 14.9 % which was higher than our medium-term target range of 14% to 14.5%. We intend to continue to manage the CET1 ratio to within this range. The total dividend per share in 2024 of $0.87 included a special dividend of $0.21 per share that was paid in June following the completion of the sale of HSBC Bank Canada. On a dividend payout ratio target basis, this resulted in a payout ratio of 50% of earnings per share. For the purposes of computing our target basis dividend payout ratio, we exclude from dividends per share the special dividend of $0.21 per share, and we exclude from earnings per share material notable items and related impacts. See page 130 for our calculation of earnings per share. The Board has established a target basis dividend payout ratio of 50% for 2025 , subject to meeting capital requirements. This policy is designed to provide sustainable cash dividends, while retaining the flexibility to invest and grow the business, supplemented by additional shareholder distributions, if appropriate. HSBC Holdings plc Annual Report on Form 20-F 25 Key financial metrics For the year ended 31 Dec Reported results 2024 2023 2022 Profit before tax ($m) 32,309 30,348 17,058 Profit after tax ($m) 24,999 24,559 16,249 Revenue ($m) 65,854 66,058 50,620 Cost efficiency ratio (%) 50.2 48.5 64.6 Net interest margin (%) 1.56 1.66 1.42 Basic earnings per share ($) 1.25 1.15 0.72 Diluted earnings per share ($) 1.24 1.14 0.72 Dividend per ordinary share (in respect of the period) ($) 1 0.87 0.61 0.32 Dividend payout ratio (%) 2 50 50 44 Alternative performance measures Constant currency profit before tax ($m) 32,309 29,903 16,302 Constant currency revenue ($m) 65,854 64,912 49,587 Constant currency cost efficiency ratio (%) 50.2 48.5 65.0 Constant currency profit before tax excluding notable items ($m) 34,122 32,680 23,057 Constant currency revenue excluding notable items ($m) 67,434 64,489 53,383 Constant currency profit before tax excluding notable items and strategic transactions ($m) 34,037 32,217 N/A Constant currency revenue excluding notable items and strategic transactions ($m) 67,256 63,043 N/A Expected credit losses and other credit impairment charges (‘ECL’) as % of average gross loans and advances to customers (%) 0.36 0.34 0.36 Expected credit losses and other credit impairment charges (‘ECL’) as % of average gross loans and advances to customers, including held for sale (%) 0.36 0.32 0.36 Basic earnings per share excluding material notable items and related impacts ($) 1.31 1.22 N/A Return on average ordinary shareholders’ equity (%) 13.6 13.6 9.0 Return on average tangible equity (%) 14.6 14.6 10.0 Return on average tangible equity excluding notable items (%) 16.0 16.2 11.8 Target basis operating expenses ($m) 32,648 31,074 N/A At 31 Dec Balance sheet 2024 2023 2022 Total assets ($m) 3,017,048 3,038,677 2,949,286 Net loans and advances to customers ($m) 930,658 938,535 923,561 Customer accounts ($m) 1,654,955 1,611,647 1,570,303 Average interest-earning assets ($m) 2,099,285 2,161,746 2,143,758 Loans and advances to customers as % of customer accounts (%) 56.2 58.2 58.8 Total shareholders’ equity ($m) 184,973 185,329 177,833 Tangible ordinary shareholders’ equity ($m) 154,295 155,710 146,927 Net asset value per ordinary share at period end ($) 9.26 8.82 8.01 Tangible net asset value per ordinary share at period end ($) 8.61 8.19 7.44 Capital, leverage and liquidity Common equity tier 1 capital ratio (%) 3,4 14.9 14.8 14.2 Risk-weighted assets ($m) 3,4 838,254 854,114 839,720 Total capital ratio (%) 3,4 20.6 20.0 19.3 Leverage ratio (%) 3,4 5.6 5.6 5.8 High-quality liquid assets (liquidity value) ($m) 4,5 649,210 647,505 647,046 Liquidity coverage ratio (%) 4,5,6 138 136 132 Net stable funding ratio (%) 4,5,6,7 143 138 141 Share count Period end basic number of $0.50 ordinary shares outstanding, after deducting own shares held (millions) 17,918 19,006 19,739 Period end basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares, after deducting own shares held (millions) 18,062 19,135 19,876 Average basic number of $0.50 ordinary shares outstanding, after deducting own shares held (millions) 18,357 19,478 19,849 For reconciliation and analysis of our reported results on a constant currency basis, including lists of notable items, see page 108 . Definitions and calculations of other alternative performance measures are included in ‘Reconciliation of alternative performance measures’ on page 129 . 1 In 2024, dividend per share includes the special dividend of $0.21 per ordinary share arising from the proceeds of the sale of our banking business in Canada to Royal Bank of Canada. 2 In 2024 and 2023, our dividend payout ratio was adjusted for material notable items and related impacts, including all associated income statement impacts relating to those items. In 2022, our dividend payout ratio was adjusted for the loss on classification to held for sale of our retail banking business in France, items relating to the sale of our banking business in Canada, and the recognition of certain deferred tax assets. 3 Unless otherwise stated, regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation in force at the time. References to EU regulations and directives (including technical standards) should, as applicable, be read as references to the UK‘s version of such regulation or directive, as onshored into UK law under the European Union (Withdrawal) Act 2018, and as may be subsequently amended under UK law. 4 Regulatory numbers and ratios are as presented at the date of reporting. Small changes may exist between these numbers and ratios and those submitted in regulatory filings. Where differences are significant, we may restate in subsequent periods. 5 The liquidity coverage ratio is based on the average value of the preceding 12 months. The net stable funding ratio is based on the average value of four preceding quarters. 6    We enhanced our liquidity consolidation process in 2Q24 by revising provisions that addressed historical limitations. As our Group LCR and NSFR are reported on an average basis, the benefit of these changes incrementally increased our LCR and NSFR by circa 3% and 11% during the year, respectively. Compared to year ended 31 December 2023, the increase in LCR was mainly driven by these enhancements. The associated NSFR increase driven by these changes was partly offset by higher required stable funding primarily due to a rise in financial investments and derivatives activities. 7    We enhanced our calculation processes during 1Q24 and our NSFR comparatives have been restated. 26 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Basis of presentation Impact of strategic transactions To aid the understanding of our results, we separately disclose the impact of strategic transactions classified as material notable items on the results of the Group and our global businesses. Material notable items are a subset of notable items and categorisation is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement. Strategic transactions classified as material notable items comprise the disposal of our retail banking operations in France, our banking business in Canada, the sale of our business in Argentina and the acquisition of SVB UK. The impacts quoted include the gains or losses on classification to held for sale or on acquisition and all other related notable items. They also include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. It is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. We consider the monthly impacts of distorting income statement results when calculating the impact of strategic transactions. See page 111 for supplementary analysis of the impact of strategic transactions. Constant currency performance Constant currency performance is computed by adjusting reported results of comparative periods for the effects of foreign currency translation differences, which distort period- on-period comparisons. We consider constant currency performance to provide useful information for investors by aligning internal and external reporting, and reflecting how management assesses period- on-period performance. Notable items We separately disclose ‘notable items‘, which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature. We now disclose ‘profit before tax excluding notable items’ and ‘revenue excluding notable items’. We have introduced these new measures due to the significant impact of notable items on the Group’s results. We consider profit before tax excluding notable items and revenue excluding notable items as useful information in understanding period-on-period performance. Certain notable items are classified as ‘material notable items’, which are a subset of notable items. Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement. The tables on pages 108 to 110 and pages 122 to 127 detail the effects of notable items on each of our global business segments and legal entities during 2024, 2023 and 2022. Management view of revenue on a constant currency basis Our global business segment commentary includes tables that provide breakdowns of revenue on a constant currency basis by major product. These reflect the basis on which revenue performance of the businesses is assessed and managed. Global Trade Solutions During 2024, we renamed our Global Trade and Receivables Finance business as Global Trade Solutions (‘GTS’), to better reflect our broad suite of products and the focus we place on serving our clients globally. Comparative periods Unless otherwise stated, all performance commentary that follows compares our results in 2024 with those in 2023. Reported results (vs 2023) Reported profit Reported profit before tax of $32.3bn was $2.0bn or 6% higher. This included a net $1.0bn favourable impact from notable items . In 2024, notable items included a gain of $4.8bn following the disposal of our banking business in Canada, and losses associated with the sale of our business in Argentina, comprising a $1.0bn loss on disposal, as well as the recycling of foreign currency reserve losses and other reserves of $5.2bn. In 2023, notable items included an impairment of $3.0bn on our associate, Bank of Communications Co., Limited (‘BoCom’), which followed the reassessment of our accounting value-in-use. They also included disposal losses of $1.0bn on Treasury repositioning and risk management and a $1.6bn gain recognised on the acquisition of Silicon Valley Bank UK Limited (‘SVB UK’) . For further details on our value-in-use assessment for associates, see page 86 . The increase in reported profit before tax also included revenue growth from Wealth products in WPB and in Equities and Securities Financing in GBM. Reported operating expenses increased by $1.0bn , mainly due to higher spend and investment in technology and the impacts of inflation, partly offset by reductions related to our business disposals in Canada and France, and from a reduction in levies in the UK and the US. Target basis operating expenses rose by 5% compared with 2023, in line with our cost growth target. Reported profit after tax of $25.0bn was $0.4bn higher than in 2023. This included the impact of an increase in the Group’s effective tax rate, notably due to the impact of our business disposals in Canada and Argentina. Reported revenue Reported revenue of $65.9bn was broadly stable. There was growth in revenue from higher customer activity in Wealth in WPB, and in Equities and Securities Financing in GBM. In addition, reported revenue in 2023 included disposal losses of $1.0bn related to Treasury repositioning and risk management. These items were broadly offset by the net adverse impact of certain strategic transactions described above, as well as a $0.2bn loss on the early redemption of legacy securities, and a reduction from the results of the businesses that have now been disposed. NII of $32.7bn fell by $3.1bn , and included the adverse impact of foreign currency translation differences of $1.6bn and the impact from the early redemption of legacy securities of $0.2bn . The reduction included the effect of the disposal of our banking business in Canada. The fall in NII also reflected an increase of $2.7bn in funding costs associated with the redeployment of our commercial surplus into the trading book, where the related revenue is recognised in ’net income on financial instruments held for trading or managed on a fair value basis’. These reductions were in part mitigated by higher NII in HSBC UK, including the benefit of our structural hedge. In Markets Treasury NII increased due to reinvestments in our portfolio at higher yields. Banking NII of $43.7bn fell by $0.4bn or 1%, as increased deployment of our commercial surplus to the trading book partly mitigated the reductions in NII. Revenue in 2024 was adversely affected by a $0.8bn impact of hyperinflationary accounting in Argentina, including the devaluation of the Argentinian peso, compared with a $1.4bn adverse impact in 2023. Reported ECL Reported ECL charges of $3.4bn were stable compared with 2023. This reflected reductions in CMB and GBM, offset by an increase in WPB. HSBC Holdings plc Annual Report on Form 20-F 27 Reported results continued 2024 2023 2022 2024 vs 2023 of which strategic transactions 1 Reported results $m $m $m $m % $m Net operating income before change in expected credit losses and other credit impairment charges (‘revenue’) 65,854 66,058 50,620 (204) — (3,947) ECL (3,414) (3,447) (3,584) 33 1 72 Net operating income 62,440 62,611 47,036 (171) — (3,875) Total operating expenses (33,043) (32,070) (32,701) (973) (3) 1,100 Operating profit 29,397 30,541 14,335 (1,144) (4) (2,775) Share of profit in associates and joint ventures less impairment 2,912 (193) 2,723 3,105 >100 — Profit before tax 32,309 30,348 17,058 1,961 6 (2,775) Tax expense (7,310) (5,789) (809) (1,521) (26) Profit after tax 24,999 24,559 16,249 440 2 Revenue excluding notable items 67,434 65,723 54,222 1,711 3 Profit before tax excluding notable items 34,122 33,198 23,560 924 3 1 For details, see ‘Impact of strategic transactions‘ on page 111 . 2024 2023 2022 Notable items $m $m $m Revenue Disposals, acquisitions and related costs 1 (1,343) 1,298 (2,737) Fair value movements on financial instruments 2 — 14 (618) Restructuring and other related costs — — (247) Disposal losses on Markets Treasury repositioning — (977) — Early redemption of legacy securities (237) — — Currency translation on revenue notable items — 88 (174) Operating expenses Disposals, acquisitions and related costs (199) (321) (18) Impairment of non-financial items — — — Restructuring and other related costs (34) 136 (2,882) Currency translation on operating expenses notable items — — (62) Share of profit in associates and joint ventures less impairment Impairment of interest in associate — (3,000) — 1 The amount in 2024 includes a $1.0bn loss on disposal and a $5.2bn loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This was partly offset by a gain of $4.8bn on the sale of our banking business in Canada, inclusive of fair value gains on related hedging and recycling of related reserves. The amount in 2023 included a gain recognised in respect of the acquisition of SVB UK of $1.6bn. The amount in 2022 included losses from classifying businesses as held for sale as part of a broader restructuring of our European business of which $2.4bn related to the sale of our retail banking operations in France. 2 Fair value movements on non-qualifying hedges in HSBC Holdings. ECL charges in CMB were $1.8bn in 2024, and in GBM charges were $0.2bn. This included charges of $0.4bn in respect of commercial real estate in mainland China and of $0.1bn in the Hong Kong real estate sector. This compared with charges of $1.0bn and $0.1bn respectively in these sectors in 2023. In addition, ECL in 2024 in CMB included a charge related to a single exposure in the UK, while charges in HSBC Bank UK reduced compared with 2023. In GBM, charges in 2024 also benefited from a release of stage 3 allowances in HSBC Bank plc related to a single exposure. In WPB, ECL charges were $1.3bn . These primarily related to our legal entity in Mexico, reflecting growth in our unsecured lending portfolio and unemployment trends, and also in Hong Kong and the UK. For further details of the calculation of ECL, see pages 177 to 190. Reported operating expenses Reported operating expenses of $33.0bn were $1.0bn or 3% higher, including favourable foreign currency translation differences between the periods of $0.6bn . The increase reflected higher spend and investment in technology and inflationary impacts, while performance-related pay remained stable. Operating expenses were also adversely impacted by the non-recurrence of a $0.2bn reversal of historical asset impairments in 2023. These increases were partly offset by a favourable impact from the UK bank levy of $0.1bn, as 2023 included adjustments relating to prior years, and from the non-recurrence of a $0.2bn charge incurred in the US relating to the FDIC special assessment. The number of employees expressed in full-time equivalent staff (‘FTE’) at 31 December 2024 was 211,304 , a decrease of 9,557 compared with 31 December 2023, primarily reflecting the completion of the sales of our banking business in Canada, our retail banking operations in France and our business in Argentina. The number of contractors at 31 December 2024 was 4,226, a decrease of 450. Reported share of profit in associates and joint ventures less impairment Reported share of profit in associates and joint ventures less impairment of $ 2.9 bn was $ 3.1 bn higher than in 2023. This primarily reflected the non-recurrence of an impairment charge in 2023 of $3.0bn relating to our investment in BoCom due to a reduction to the accounting value-in-use of the investment. In addition, there was an increase in the share of profit from Saudi Awwal Bank (‘SAB’). Tax expense Tax in 2024 was a charge of $7.3bn , representing an effective tax rate of 22.6%, compared with 19.1% in 2023. The effective tax rate for 2024 was increased by 4.8 percentage points by the non-deductible loss on disposal of our business in Argentina and by 0.7 percentage points by the tax charge arising under the Global Minimum Tax rules, and reduced by 3.6 percentage points by the non-taxable gain on disposal of our banking business in Canada. The effective tax rate for 2023 was increased by 2.3 percentage points by the non-deductible impairment of investments in associates, and reduced by 1.6 percentage points by the release of provisions for uncertain tax positions and by 1.5 percentage points by the non-taxable accounting gain arising on the acquisition of SVB UK. Reported profit after tax in 2024 $25.0bn (2023: $24.6bn ) 28 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Constant currency results 2024 2023 2022 2024 vs 2023 of which strategic transactions 1 Results – on a constant currency basis $m $m $m $m % $m Revenue 65,854 64,912 49,587 942 1 (3,890) ECL (3,414) (3,259) (3,615) (155) (5) 36 Total operating expenses (33,043) (31,494) (32,229) (1,549) (5) 992 Operating profit 29,397 30,159 13,743 (762) (3) Share of profit in associates and joint ventures less impairment 2,912 (256) 2,559 3,168 >100 — Profit before tax 32,309 29,903 16,302 2,406 8 (2,862) Revenue excluding notable items 67,434 64,489 53,383 2,945 5 Profit before tax excluding notable items 34,122 32,680 23,057 1,442 4 1  For details, see ‘Impact of strategic transactions‘ on page 111 . Profit before tax of $32.3bn was $2.4bn higher than in 2023 on a constant currency basis. Constant currency profit before tax excluding notable items of $34.1bn was $1.4bn or 4% higher. Revenue increased by $0.9bn or 1% on a constant currency basis, and included a $3.9bn net adverse impact from strategic transactions. The growth in revenue reflected the impact of higher customer activity in our Wealth products in WPB, and in Equities and Securities Financing in GBM. NII fell due to business disposals and a loss on the early redemption of legacy securities in 2024. The reduction also included higher funding costs associated with the redeployment of our commercial surplus into the trading book, where the related revenue is recognised in ’net income on financial instruments held for trading or managed on a fair value basis’, partly offset by higher NII in HSBC UK, including the benefit of our structural hedge. On a constant currency basis, banking NII of $43.7bn increased by $1.5bn or 4%. ECL were $0.2bn or 5% higher on a constant currency basis. This included an increase in WPB, mainly in our legal entity in Mexico, from higher unsecured lending and unemployment trends, and from higher charges in our main legal entities in Hong Kong and the UK. This was partly offset by reductions in CMB and GBM including lower stage 3 charges, including charges relating to the commercial real estate sector in mainland China, and in CMB, lower charges in HSBC UK. The reduction in CMB was partly offset by a charge in 2024 related to a specific exposure in the UK. Operating expenses were $1.5bn or 5% higher on a constant currency basis, primarily reflecting higher spend and investment in technology and inflationary impacts, partly offset by continued cost discipline. The favourable impacts from the completion of disposals in Canada and France were largely offset by the adverse impact of re-translating the results of hyperinflationary economies at constant currency. Target basis operating expenses rose by $1.6bn or 5% compared with 2023. Share of profit in associates and joint ventures less impairment of $2.9bn was $3.2bn higher on a constant currency basis, and included the non-recurrence of a $3.0bn impairment of our investment in BoCom due to a revision to the accounting value-in-use of the investment . The increase also included a higher share of profit from SAB. Balance sheet and capital Balance sheet strength Total assets of $3.0tn were $22bn lower than at 31 December 2023 on a reported basis, and included adverse effects of foreign currency translation differences of $66bn . On a constant currency basis, total assets rose by $45bn , mainly from an increase in financial investments, and higher derivative and trading asset balances. This was partly offset by a reduction in assets held for sale, notably following the completion of our disposals in France, Canada and Argentina. Reported loans and advances to customers fell by $8bn . On a constant currency basis, loans and advances increased by $14bn . The increase included lending balance growth in CMB, together with mortgage lending growth in WPB. Reported customer accounts of $1.7tn increased by $43bn . On a constant currency basis, they grew by $75bn , with growth across all of our global businesses, mainly in Asia. Loans and advances to customers as a percentage of customer accounts was 56.2% , compared with 58.2% at 31 December 2023. Distributable reserves The distributable reserves of HSBC Holdings at 31 December 2024 were $28.3bn, a $2.6bn decrease since 31 December 2023, primarily driven by $27.4bn of dividends on ordinary shares, additional tier 1 coupon and share buy- back payments, offset by $24.8bn in profits and other reserves movements generated in 2024. Distributable reserves are sensitive to impairments of investments in subsidiaries to the extent they are not offset by the realisation of related reserves. Further details on HSBC Holdings’ intentions to increase distributable reserves in 2025 are provided in the Corporate Governance report on page 349 . Capital position We actively manage the Group’s capital position to support our business strategy and meet our regulatory requirements at all times, including under stress, while optimising our capital efficiency. To do this, we monitor our capital position using a number of measures. These include our capital ratios and the impact on our capital ratios as a result of stress. Our CET1 capital ratio at 31 December 2024 was 14.9 %, up marginally compared with the prior year as capital generation and a reduction in RWAs through strategic transactions were offset by dividends, share buy-backs and organic balance sheet growth. In January 2025, the PRA announced the delay of Basel 3.1 implementation to 1 January 2027 pending US developments. We expect that the impact on our CET1 ratio will be a modest benefit. Liquidity position We actively manage the Group’s liquidity and funding to support the business strategy and meet regulatory requirements at all times, including under stress. To do this, we monitor our position using a number of risk appetite measures, including the liquidity coverage ratio and the net stable funding ratio. During 2024, the average high-quality liquid assets we held was $ 649.2 bn. This excludes high-quality liquid assets in legal entities which are not transferable due to local restrictions. For further details, see page 234 . Common equity tier 1 ratio (%) 14.9 % (2023: 14.8 %) HSBC Holdings plc Annual Report on Form 20-F 29 Global businesses During the year we served our customers through three global businesses. The following pages set out how each global business has performed. From 1 January 2025, we have simplified our structure as explained on page 8 . Wealth and Personal Banking Our WPB business served 40 million customers globally, including 7.7 million who are international, from retail customers to ultra high net worth individuals and their families. Contribution to Group profit before tax $12.2bn 39% Calculation is based on profit before tax of our global businesses excluding Corporate Centre. To meet our customers’ needs, WPB offered a full suite of products and services across transactional banking, lending and wealth. WPB continued to invest in our key strategic priorities of expanding our Wealth franchise in Asia, developing our transactional banking and lending capabilities, and addressing our customers’ international needs. Divisional highlights 21% Growth in wealth non-interest income compared with 2023. Performance in 2024 reflected strong growth in Wealth, with double digit growth across Retail investment distribution, Private Banking and life insurance as well as growth in asset management. We also saw moderate balance sheet growth, and increases in our invested assets and wealth deposits. The results included growth in operating expenses, reflecting investment and inflationary impacts. 12% Growth in contractual service margin in insurance since 2023, up to $12.1bn. Results – on a constant currency basis 2024 2023 2022 2024 vs 2023 of which strategic transactions 2 $m $m $m $m % $m Net operating income 28,674 26,848 20,772 1,826 7 (636) ECL (1,335) (935) (1,160) (400) (43) (22) Operating expenses (15,204) (14,352) (14,141) (852) (6) 651 Share of profit in associates and JVs 47 64 29 (17) (27) — Profit before tax 12,182 11,625 5,500 557 5 (7) RoTE 1 (%) 29.0 28.5 13.8 1    RoTE (annualised) in 2023 and 2022 included a 0.3 and 4.7 percentage point adverse impact from the impairment losses relating to the sale of our retail banking operations in France respectively. 2    Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions‘ on page 111 . International customers are those who bank in more than one market, those whose address is different from the market we bank them in and customers whose nationality, or country of birth for non-resident Indians and overseas Chinese, is different to the market we bank them in. Customers may be counted more than once when banked in multiple countries. 30 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Management view of revenue 2024 2023 2022 2024 vs 2023 of which strategic transactions 4 $m $m $m $m % $m Wealth 8,758 7,446 6,973 1,312 18 (235) –  investment distribution 2,925 2,517 2,469 408 16 (167) –  Global Private Banking 2,612 2,268 2,039 344 15 — net interest income 1,193 1,167 975 26 2 — non-interest income 1,419 1,101 1,064 318 29 — –  life insurance 1,840 1,396 1,337 444 32 (10) –  asset management 1,381 1,265 1,128 116 9 (58) Personal Banking 19,352 20,240 15,884 (888) (4) (669) –  net interest income 17,980 18,940 14,597 (960) (5) (578) –  non-interest income 1,372 1,300 1,287 72 6 (91) Other 1 564 (838) (2,085) 1,402 >100 268 – of which: impairment (loss)/reversal relating to the sale of our retail banking operations in France 2 28 4 (2,374) 24 >100 24 Net operating income 3 28,674 26,848 20,772 1,826 7 (636) 1 ‘Other’ includes Markets Treasury, HSBC Holdings interest expense and hyperinflation. It also includes the distribution and manufacturing (where applicable) of retail and credit protection insurance, disposal gains and other non-product-specific income. 2 The amounts associated with the sale of our retail banking operations in France include all related impacts disclosed in notable items, which are presented across various lines in our consolidated income statement. 3 ’Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 4 Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions’ on page 111 . 2024 2023 2022 Notable items – on a reported basis $m $m $m Revenue Disposals, acquisitions and related costs 28 4 (2,212) Restructuring and other related costs — — 98 Disposal losses on Markets Treasury repositioning — (391) — Currency translation on revenue notable items — 34 (158) Operating expenses Disposals, acquisitions and related costs (3) (53) (7) Restructuring and other related costs (10) 20 (357) Currency translation on operating expenses notable items — — (3) Financial performance Profit before tax of $12.2bn was $0.6bn higher than in 2023 on a constant currency basis. The growth reflected higher Wealth revenue, as we continued to execute on our strategy. This was partly offset by a $0.2bn reduction from the sale of our banking business in Canada, which completed in 1Q24. Net interest income (‘NII’) grew by 2% compared with 2023, while fee income increased by 12% . Operating expenses grew by $0.9bn and there was an increase in ECL of $0.4bn , both on a constant currency basis. Revenue of $28.7bn was $1.8bn or 7% higher on a constant currency basis. Wealth performed strongly, up $1.3bn . This included double-digit percentage growth in life insurance, Global Private Banking and investment distribution, as well as growth in asset management. This was partly offset by a reduction in Personal Banking NII of $1.0bn , due to the impact of the disposals in France and Canada and margin compression, partly offset by balance sheet and non-NII growth. In Wealth, revenue of $8.8bn was up $1.3bn or 18% . – Investment distribution revenue grew by $0.4bn , or 16% , driven by higher sales of mutual funds, structured products and bonds due to our continued investment in Wealth and improved market sentiment, including in our entities in Asia. – Global Private Banking revenue was $0.3bn or 15% higher, primarily driven by a strong performance in brokerage and trading in our entities in Asia. – Life insurance revenue was $0.4bn or 32% higher. The growth included an increase in earnings from contractual service margin (‘CSM’) release, largely due to continued growth in the CSM balance. The year-on- year increase in revenue also included the impact of corrections to historical valuation estimates recognised in 2023. Insurance manufacturing new business CSM of $2.5bn was 49% higher than in 2023, mainly in our legal entities in Hong Kong. – Asset management revenue was $0.1bn or 9% higher, driven by a 7% increase in assets under management due to inflows and positive market movements. This was partly offset by a reduction in revenue due to the sale of our banking business in Canada. In Personal Banking, revenue of $19.4bn was down $0.9bn or 4% . – Net interest income was $1.0bn or 5% lower due to the impact of the sales of our banking businesses in France and Canada and narrower margins. Compared with 2023, lending balances were broadly stable with growth mainly in mortgages in HSBC UK and our legal entity in the US. This was offset by the reclassification of the France retained loans to Corporate Centre. Unsecured lending balances increased, including in HSBC UK and our legal entities in Asia and Mexico. Deposit balances grew by $24bn, including in our legal entities in Asia and the UK. Other revenue increased by $1.4bn , mainly due to a $1.1bn increase in revenue allocated from Markets Treasury, including from the non-recurrence of 2023 disposal losses on repositioning and risk management, the non- recurrence of a loss on sale of our business in New Zealand in 2023 of $0.1bn and higher interest income earned on own capital. ECL were $1.3bn , an increase of $0.4bn compared with 2023 on a constant currency basis, reflecting higher charges in our legal entity in Mexico, mainly in our unsecured portfolio, due to portfolio growth and unemployment trends. In addition, we had higher charges in our legal entities in Hong Kong and the UK as a result of portfolio growth. Operating expenses of $15.2bn were 6% higher on a constant currency basis, reflecting continued investments in Wealth in Asia, higher spend and investment in technology, higher performance-related pay and from the impact of higher inflation. These were partly offset by continued cost discipline and the impact of the disposals in France and Canada. HSBC Holdings plc Annual Report on Form 20-F 31 Commercial Banking Our CMB business served around 1.2 1 million customers across 48 countries and territories, ranging from small enterprises to large companies operating globally. Contribution to Group profit before tax $11.9bn 38% Calculation is based on profit before tax of our global businesses excluding Corporate Centre. CMB partnered with businesses around the world, supporting every stage of their growth, international ambitions and sustainability transitions. CMB delivered value to clients through our international network, financing strength, digital capabilities and our universal banking offering, including our global trade and payments solutions. HSBC has been recognised as the World’s best Trade Finance Bank and the World’s best Payments and Treasury Bank (Euromoney Awards) and we continue to invest in capabilities to assist clients in fulfilling their business needs more efficiently. We have completed our first full year of HSBC Innovation Banking with global revenue now standing at $0.7bn, and over 1,200 new customers onboarded in 2024. Divisional highlights 10% Increase in loans and advances to customers in Global Trade Solutions, compared with 2023, on a constant currency basis. CMB profit before tax compared with 2023 was impacted by the non-recurrence of the gain on acquisition of SVB UK recognised in 2023. Excluding this, there was a good 2024 performance, with growth in revenue due to balance sheet growth, continued momentum in growing our multi-jurisdictional client base, and investment in our core transaction banking capabilities leading to higher fee income. Revenue also benefited from the growth in GBM collaboration income. The increase in operating expenses reflected the impact of hyperinflation in Argentina, increased technology spend and investment, incremental costs associated with HSBC Innovation Banking and inflationary pressures. 1 The number of customers reduced due to the sale of our banking business in Canada. $25bn CMB grew deposits by $25bn or 5% compared with 2023. Results – on a constant currency basis 2024 2023 2022 2024 vs 2023 of which strategic transactions 2 $m $m $m $m % $m Net operating income 21,580 22,396 16,207 (816) (4) (2,228) ECL (1,815) (2,006) (1,868) 191 10 69 Operating expenses (7,906) (7,234) (6,810) (672) (9) 255 Share of profit/(loss) in associates and JVs 1 (1) 1 2 >100 — Profit before tax 11,860 13,155 7,530 (1,295) (10) (1,904) RoTE 1 (%) 20.0 23.4 13.7 1  RoTE in 2023 included a 3.1 percentage point favourable impact from the gain recognised on the acquisition of SVB UK. 2  Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions‘ on page 111 . 32 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Management view of revenue 2024 2023 2022 2024 vs 2023 of which strategic transactions 4 $m $m $m $m % $m Global Trade Solutions 1,992 1,969 2,045 23 1 (39) Credit and Lending 5,183 5,239 5,728 (56) (1) (281) Global Payments Solutions 11,880 12,125 6,911 (245) (2) (225) Markets products, Insurance and Investments and Other 1 2,525 3,063 1,523 (538) (18) (1,683) – of which: share of revenue for Markets and Securities Services and Banking products 1,382 1,295 1,181 87 7 – of which: gain on the acquisition of Silicon Valley Bank UK Limited — 1,659 — (1,659) (100) (1,659) Net operating income 2 21,580 22,396 16,207 (816) (4) (2,228) – of which: transaction banking 3 14,867 15,077 9,853 1 Includes a gain on the acquisition of SVB UK and CMB‘s share of revenue from the sale of Markets and Securities Services and Banking products to CMB customers. GBM‘s share of revenue from the sale of these products to CMB customers is included within the corresponding lines of the GBM management view of revenue. Also includes allocated revenue from Markets Treasury, HSBC Holdings interest expense and hyperinflation. 2 ’Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 3 Transaction banking comprises Global Trade Solutions, Global Payments Solutions and CMB’s share of Global Foreign Exchange (shown within ‘share of revenue for Markets and Securities Services and Banking products’). 4 Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions‘ on page 111 . 2024 2023 2022 Notable items – on a reported basis $m $m $m Revenue Disposals, acquisitions and related costs — 1,591 — Restructuring and other related costs — — (16) Disposal losses on Markets Treasury repositioning — (316) — Currency translation on revenue notable items — 65 6 Operating expenses Disposals, acquisitions and related costs (2) (55) — Restructuring and other related costs 2 32 (266) Currency translation on operating expenses notable items — — (7) Financial performance Profit before tax of $11.9bn was $1.3bn lower than in 2023 on a constant currency basis. This was mainly due to a reduction in revenue following the non-recurrence of a $1.7bn gain recognised in 2023 on the acquisition of SVB UK, the impact of the disposal of our banking business in Canada in 2024, as well as higher operating expenses. The reduction in profit before tax was partly offset by balance-sheet-driven revenue growth, excluding the disposal of our banking business in Canada, higher revenue allocated from Markets Treasury, transaction banking fee growth and lower ECLs. Revenue of $21.6bn was $0.8bn or 4% lower on a constant currency basis. This was primarily due to the non-recurrence of the gain on the acquisition of SVB UK in 2023, as mentioned above. It also included an adverse impact of $0.6bn from strategic transactions, notably in relation to the disposal of our banking business in Canada. These were partly offset by an increase in NII due to the hyperinflationary impacts in Argentina and higher allocated revenue from Markets Treasury . – In GTS, revenue was up $23m or 1% , mainly due to growth in fee income from guarantees, higher balances and improved margins. This was partly offset by the impact of the disposal of our banking business in Canada. – In Credit and Lending, revenue decreased by $0.1bn or 1% due to the impact of the disposal of our banking business in Canada, partly offset by higher income in IVB. – In GPS, revenue was down $0.2bn or 2% , reflecting the impact of the disposal of our banking business in Canada, and a decrease in our main legal entities in Asia and Europe from lower margins, reflecting a change in the product mix. This was partly offset by growth in fee income reflecting business initiatives and transaction volumes. There was also higher revenue in HSBC UK due to higher margins and in our legal entity in Argentina due to hyperinflationary impacts . – In GBM products, Insurance and Investments, and Other, revenue decreased by $0.5bn , largely due to the non-recurrence of the $1.7bn gain recognised in 2023 on the acquisition of SVB UK. This adverse impact was partly offset by higher allocated revenue from Markets Treasury, including from the non- recurrence of 2023 disposal losses on repositioning and risk management and interest income on own capital. There was also higher GBM collaboration revenue, reflecting growth in Global Markets and Capital Financing products, notably in our key entities in Hong Kong, the UK and in Europe. ECL charges of $1.8bn were $0.2bn lower on a constant currency basis. ECLs in 2024 reflected lower charges in our main legal entity in Asia, reflecting a reduction in ECL in the commercial real estate sector in mainland China, and in HSBC UK. These reductions were partly offset by new stage 3 charges related to a single customer in the UK, and in our main legal entity in the Middle East. Operating expenses of $7.9bn were $0.7bn or 9% higher on a constant currency basis. The increase reflected hyperinflationary impacts in Argentina, incremental costs in IVB following the acquisition of SVB UK, higher spend and investment in technology, and inflationary impacts. These increases were in part mitigated by continued cost discipline and lower costs following the disposal of our banking business in Canada. HSBC Holdings plc Annual Report on Form 20-F 33 Global Banking and Markets Our GBM business supported multinational corporates, financial institutions and institutional clients, as well as public sector and government bodies. Contribution to Group profit before tax $7.1bn 23% Calculation is based on profit before tax of our global businesses excluding Corporate Centre. GBM is a leading provider of transaction banking, financing and risk management solutions to our clients. Our global network with expertise, particularly in Asia and the Middle East, provides a differentiated service to our clients’ international financial requirements. Divisional highlights 13.0 % Return on average tangible equity, up 1.6 percentage points compared with 2023. GBM delivered a strong performance in 2024, achieving a RoTE of 13.0% . On a constant currency basis, we grew revenue by 11% , while costs grew by 4% as we continued to invest in technology to support future revenue growth, and from the impact of inflation. We also had a reduction in ECL compared with 2023. 36 % Increase in Securities Financing revenue compared with 2023, primarily from new client onboarding in prime finance. Results – on a constant currency basis 2024 2023 2022 2024 vs 2023 of which strategic transactions 1 $m $m $m $m % $m Net operating income 17,529 15,771 14,542 1,758 11 (49) ECL (235) (317) (578) 82 26 (11) Operating expenses (10,231) (9,872) (9,403) (359) (4) 59 Share of profit/(loss) in associates and JVs — — (2) — — — Profit before tax 7,063 5,582 4,559 1,481 27 (1) RoTE (%) 13.0 11.4 9.8 1  Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions‘ on page 111 . 34 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Management view of revenue 2024 2023 2022 2024 vs 2023 of which strategic transactions 6 $m $m $m $m % $m Markets and Securities Services 9,652 8,806 8,815 846 10 (63) – Securities Services 2,280 2,305 1,994 (25) (1) (3) – Global Debt Markets 968 827 698 141 17 (8) – Global Foreign Exchange 3,972 4,030 4,088 (58) (1) (49) – Equities 891 552 1,015 339 61 (1) – Securities Financing 1,523 1,120 924 403 36 (5) – Credit and funding valuation adjustments 18 (28) 96 46 >100 3 Banking 8,656 8,460 6,690 196 2 (125) – Global Trade Solutions 690 658 670 32 5 (13) – Global Payments Solutions 4,497 4,427 2,861 70 2 (72) – Credit and Lending 1,820 1,967 2,229 (147) (7) (15) – Investment Banking 1 1,084 1,040 737 44 4 (9) – Other 2 565 368 193 197 54 (16) GBM Other (779) (1,495) (963) 716 48 139 – Principal Investments 24 (5) 57 29 >100 — – Other 3 (803) (1,490) (1,020) 687 46 139 Net operating income 4 17,529 15,771 14,542 1,758 11 (49) – of which: transaction banking 5 11,439 11,420 9,613 19 — 1 From 1 January 2024, we renamed ‘Capital Markets and Advisory‘ as ‘Investment Banking‘ to better reflect our purpose and offering. 2 Includes portfolio management, earnings on capital and other capital allocations on all Banking products. 3 Includes notional tax credits and Markets Treasury, HSBC Holdings interest expense and hyperinflation. 4 ‘Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 5 Transaction banking comprises Securities Services, Global Foreign Exchange (net of revenue shared with CMB), GTS and GPS. 6 Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions‘ on page 111 . 2024 2023 2022 Notable items – on a reported basis $m $m $m Revenue Disposals, acquisitions and related costs (14) — — Restructuring and other related costs — — (184) Disposal losses on Markets Treasury repositioning — (270) — Currency translation on revenue notable items — (2) 4 Operating expenses Disposals, acquisitions and related costs (2) 3 — Restructuring and other related costs (1) 21 (252) Currency translation on operating expenses notable items — — (8) Financial performance Profit before tax of $7.1bn was $1.5bn or 27% higher than in 2023 on a constant currency basis. This was driven by an increase in revenue of $1.8bn or 11% on a constant currency basis, including from strong performances in Securities Financing, Equities and Global Debt Markets. In addition, ECL charges decreased compared with 2023, while operating expenses increased by $0.4bn on a constant currency basis. Revenue of $17.5bn was $1.8bn or 11% higher on a constant currency basis. In Markets and Securities Services (‘MSS‘), revenue increased by $0.8bn or 10% driven by prime finance, fixed income and equity derivatives. – In Securities Services, revenue decreased by $25m or 1% from divestments within our fund administration business and from lower NII due to reduced rates impacting margins. – In Global Debt Markets, revenue rose by $0.1bn or 17% , from higher client demand for financing products and increased volumes primarily from emerging markets credit. – In Global Foreign Exchange, revenue fell by $0.1bn or 1% , as client activity remained resilient given the market environment. – In Equities, revenue increased by $0.3bn or 61% amid improved market sentiment, which drove strong client demand for wealth products, as well as higher levels of volatility in 2H24. – In Securities Financing, revenue rose by $0.4bn or 36% , primarily driven by new client onboarding in prime finance and robust institutional financing demand. In Banking, revenue increased by $0.2bn or 2% . – In GPS, revenue increased by $0.1bn or 2% , driven by higher average balances and fee performance resulting from business initiatives, repricing and transaction growth. – In Investment Banking, which includes Issuer Services, revenue increased by $44m or 4% , due to higher advisory and financing activity, supported by the recovery in global capital markets. – In Credit and Lending, revenue decreased by $0.1bn or 7% reflecting ongoing muted client demand. – In Banking Other, revenue increased by $0.2bn or 54% due to hedging activities and higher allocated earnings on capital held in the business. In GBM Other, revenue increased by $0.7bn or 48% , driven by higher allocated revenue from Markets Treasury, including from the non- recurrence of 2023 disposal losses on repositioning and risk management, and lower HSBC Holdings interest expense. ECL of $0.2bn decreased by $0.1bn on a constant currency basis, mainly as the 2024 period included a release related to a single exposure. Operating expenses of $10.2bn increased by $0.4bn or 4% on a constant currency basis, due to the impact of inflation and higher spend and investment in technology, partly mitigated by continued cost discipline. HSBC Holdings plc Annual Report on Form 20-F 35 Corporate Centre The results of Corporate Centre primarily comprise the financial impact of certain acquisitions and disposals and the share of profit from our interests in our associates and joint ventures and related impairments. It also includes Central Treasury, stewardship costs and consolidation adjustments. Corporate Centre performance in 2024 primarily reflected the financial impact of certain acquisitions and disposals, including the gain on the sale of our banking business in Canada and losses on the disposal of our business in Argentina, including foreign currency and other reserve losses. In 2023, performance included the recognition of an impairment in our investment in our associate BoCom. Financial performance Profit before tax of $1.2bn was $1.7bn higher than in 2023 on a constant currency basis. The increase included the impact of the non- recurrence of an impairment charge of $3.0bn in 2023 relating to our investment in BoCom. Revenue of $1.9bn was $1.8bn lower on a constant currency basis, primarily due to the impact of notable items. In 2024, these included a loss on disposal of $1.0bn, as well as foreign currency and other reserve losses of $5.2bn, following the disposal of our business in Argentina. They also included a loss of $0.1bn related to the recycling of reserves following the completion of the sale of our business in Russia, and a $0.2bn loss on the early redemption of legacy securities. These were partly offset by a $4.8bn gain on the sale of our banking business in Canada, inclusive of fair value gains on related hedging and recycling of related reserves. In 2023, notable items included fair value losses of $0.3bn relating to the hedging of the proceeds of the sale of our business in Canada. The reduction in revenue also included adverse fair value movements on financial instruments in Central Treasury and structural hedges, a reduction following the transfer of the retained French retail lending portfolio from WPB, and fair valuation losses on legacy portfolios. This was partly offset by fair value gains on hedging related to our retained French retail lending portfolio. Operating expenses decreased by $0.3bn on a constant currency basis. This included a lower impact from levies, including in relation to the FDIC special assessment and the UK bank levy. Share of profit from associates and joint ventures of $2.9bn increased by $3.2bn on a constant currency basis, primarily reflecting the non-recurrence of an impairment charge of $3.0bn in 2023 relating to our investment in BoCom and an increase in share of profit from SAB . Results – on a constant currency basis 2024 2023 2022 2024 vs 2023 of which strategic transactions 1 $m $m $m $m % $m Net operating income (1,929) (103) (1,934) (1,826) >(100) (977) ECL (29) (1) (9) (28) >(100) — Operating expenses 298 (36) (1,875) 334 >100 27 Share of profit in associates and joint ventures less impairment 2,864 (319) 2,531 3,183 >100 — – of which: impairment loss relating to our investment in BoCom — (3,017) — 3,017 >100 — Profit/(loss) before tax 1,204 (459) (1,287) 1,663 >100 (950) RoTE (annualised) (%) 0.7 (1.0) 2.8 1 Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions‘ on page 111 . Management view of revenue 2024 2023 2022 2024 vs 2023 of which strategic transactions 6 $m $m $m $m % $m Central Treasury 1 (49) 99 (743) (148) >(100) — Legacy portfolios (50) 3 (181) (53) >(100) — Other 2,3 (1,830) (205) (1,010) (1,625) >(100) (977) – of which: gain on the sale of banking business in Canada and associated hedges 4 4,795 (275) — 5,070 >100 5,070 – of which: loss on the sale of business in Argentina (1,011) — — (1,011) >(100) (1,011) – of which: recycling of foreign currency translation reserve losses and other reserves on sale of business in Argentina (5,166) — — (5,166) >(100) (5,166) Net operating income 5 (1,929) (103) (1,934) (1,826) >(100) (977) 1 Central Treasury comprises valuation differences on issued long-term debt and associated swaps and fair value movements on financial instruments. 2 Other comprises gains and losses on certain transactions, funding charges on property and technology assets, the results of the retained France retail loan portfolio, revaluation gains and losses on investment properties and property disposals, consolidation adjustments and other revenue items not allocated to global businesses. 3 Revenue from Markets Treasury, HSBC Holdings net interest expense and hyperinflation are allocated out to the global businesses, to align them better with their revenue and expense. The total Markets Treasury revenue component of this allocation for 2024 was $ 1,569 m (2023: $ (339) m; 2022: $ 1,377 m). 4 Includes fair value gains/(losses) on the foreign exchange hedging of the proceeds of the sale and the recycling of related reserves. 5 ’Net operating income’ means net operating income before change in expected credit losses and other credit impairment charges (also referred to as ‘revenue’). 6    Impact of strategic transactions classified as material notable items. For details, see ‘Impact of strategic transactions‘ on page 111 . 2024 2023 2022 Notable items – on a reported basis $m $m $m Revenue Disposals, acquisitions and related costs (1,357) (297) (525) Fair value movements on financial instruments — 14 (618) Restructuring and other related costs — — (145) Early redemption of legacy securities (237) — — Currency translation on revenue notable items — (9) (26) Operating expenses Disposals, acquisitions and related costs (192) (216) (11) Restructuring and other related costs (25) 63 (2,007) Currency translation on operating expenses notable items — — (46) Impairment of interest in associate — (3,000) — Currency translation on associate notable items (17) 36 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Risk overview Active risk management helps us to achieve our strategy, serve our customers and communities and grow our business safely. Managing risk Key risk appetite metrics Component Measure Risk appetite 2024 Capital CET1 ratio – end point basis ≥13.5% 14.9 % Change in expected credit losses and other credit impairment charges Change in expected credit losses and other credit impairment charges as a % of advances: Retail (WPB) ≤0.50% 0.27% Change in expected credit losses and other credit impairment charges as a % of advances: Wholesale (GBM, CMB) ≤0.45% 0.37% HSBC’s operations are subject to changes in the economy, financial conditions and geopolitical developments that could have a material impact on the Group’s operations and financial risks. These factors are a significant source of uncertainty that we monitor and review continuously. Despite political and economic uncertainties, global economic growth was resilient in 2024. This was led by strong growth in the US and a mild recovery in the EU, while key emerging markets were supported by monetary policy easing. In the US, performance was supported by household consumption and government spending. In mainland China activity by sector has been uneven, but fiscal and monetary support ensured that the official economic growth target was still met. UK growth remained low despite a fall in inflation and lower interest rates, as consumers continued to prioritise saving. Continued moderate growth is expected in 2025, but the trajectory of US economic and trade policies in the aftermath of the US election, and geopolitical risks such as the ongoing Russia-Ukraine war and conflict in the Middle East, remain key sources of forecast uncertainty. Inflation and high interest rates remain key considerations for policymakers. In the US and Europe, headline inflation rates trended downwards towards central bank target ranges, despite high and persistent services price increases. Disinflation enabled the US Federal Reserve and the ECB to cut their policy rates by 100bps and 75bps respectively, and the Bank of England by 50bps in 2024. Further cuts in interest rates are expected in the US, although the resilience of the economy and the perceived supply chain and inflation risks attached to new and prospective US tariff policies, have led markets to pare back their expectations for rate cuts in 2025. In the Eurozone, interest rates are expected to be cut in order to support growth. Markets also expect the Bank of England to continue to reduce the bank rate throughout 2025. In mainland China, authorities have reduced benchmark policy interest rates to support private sector borrowing as demand for loans has weakened. Further fiscal and monetary easing is expected to support local consumption and offset some of the impact of US tariffs. Fiscal policy, public deficits and indebtedness influence our risk profile. Public spending as a proportion of GDP is likely to remain high for most key economies. Against the backdrop of higher global interest rates, a high level of public debt issuance, and a strong US dollar, borrowing costs for certain countries could increase further. This could adversely impact the fiscal capacity and debt sustainability of highly-indebted sovereign issuers. Additional sanctions on Iran were imposed in 2024 in response to Iran’s activities and the increase in tensions between Israel and Iran. The sanctions and trade restrictions imposed by the US, the UK, and the EU, as well as other countries, as a result of the Russia- Ukraine war, remain complex, far-reaching and evolving. The US has expanded the reach of its secondary sanctions regime, which includes broad discretion to impose severe sanctions on non-US banks. The imposition of such sanctions against any non-US HSBC entity could result in significant adverse commercial, operational and reputational consequences for HSBC. In response to such sanctions and trade restrictions, as well as asset flight, Russia has implemented certain countermeasures, including the expropriation of certain foreign assets. Strategic competition with China has the potential to impact global supply chains which may in turn impact the Group’s operations . The US, the UK, the EU and other countries have imposed various sanctions and trade restrictions on Chinese individuals and companies. China has also imposed its own sanctions, trade restrictions and other measures against certain countries, businesses and individuals. This has resulted in efforts to de-risk certain sectors with the reshoring of manufacturing activities. Further sanctions or counter-sanctions may adversely affect the Group, its customers and various markets. Political changes may also have implications for policy and regulations. Newly elected governments in several key markets have committed to a shift in domestic and foreign policy priorities. The US administration supports sweeping economic, foreign and trade policy changes that, if enacted, are expected to have geopolitical and macroeconomic implications, including an uncertain impact on growth and inflation. HSBC continues to monitor these policy changes and assess their implications for economic conditions in our key markets. Challenging conditions persist in the real estate sector in several of our major markets. The Hong Kong commercial real estate market has seen prices fall amid low transaction volumes and a high interest rate environment. Despite an improvement in sentiment associated with supportive policy measures and recent US interest rate cuts, commercial real estate market demand has remained weak. Prices also fell in the Hong Kong residential market during 2024 but sentiment and transaction volumes started to improve in the fourth quarter, supported by more favourable government measures and improved affordability as prices and interest rates fell. Stabilisation of the real estate market could be dependent on a further lowering of interest rates to revive demand for property both in the domestic market and from mainland China. Higher interest rates, a stronger US dollar and weak sentiment in mainland China remain the key risks to recovery. HSBC Holdings plc Annual Report on Form 20-F 37 Managing risk continued In mainland China an excess of inventory and low confidence have resulted in the fall in both commercial and residential real estate prices. A recovery remains contingent on reform and broader economy-wide stimulus measures. We continue to closely monitor market conditions and take steps to proactively manage our commercial real estate portfolios. In the fourth quarter of 2024 management adjustments to ECL were applied to reflect sector or portfolio risks that are not fully captured by our models. We continue to assess the impact of Basel 3.1 standards on our capital, including the release of more beneficial PRA near-final rules, developments in the US and the associated implementation challenges. We monitor, and seek to manage, the potential implications of all the above developments on our customers and our business. While the financial performance of our operations varied by geography, our balance sheet and liquidity remained strong. For further details of our Central and other scenarios, see ‘Measurement uncertainty and sensitivity analysis of ECL estimates’ on page 178 . Our risk appetite Our risk appetite sets our approach to monitoring and managing our risk exposure. It defines our desired forward-looking risk profile and informs the strategic and financial planning process. It provides a baseline to guide strategic decision making by helping planned business activities to deliver an appropriate balance of return for the risk assumed, while remaining within acceptable risk levels. Risk appetite supports senior management in allocating financial resources optimally to finance sustainable growth and manage risk exposures. At 31 December 2024 our CET1 ratio and ECL charges were within their defined risk appetite thresholds. Our CET1 capital ratio at 31 December 2024 was 14.9 %, up marginally compared with the prior year as capital generation and a reduction in RWAs through strategic transactions were offset by dividends, share buy-backs and organic balance sheet growth. For further details of the key drivers of the overall CET1 ratio, see ‘Own funds’ on page 235 . Wholesale ECL charges during the year continued to reflect stress in the mainland China and Hong Kong commercial real estate sectors however, Wholesale and Retail ECL charges remained within appetite. Stress tests We regularly conduct stress tests to assess the resilience of our balance sheet and our capital adequacy, as well as to provide actionable insights into how key elements of our portfolios may behave during a crisis. We use the outcomes to calibrate our risk appetite to inform our strategic and financial plans, helping to improve the quality of management’s decision making. The results from the stress tests also drive recovery and resolution planning to help enhance the Group’s financial stability under various severe macroeconomic or idiosyncratic scenarios. The selection of stress scenarios is based upon the identification and assessment of our top and emerging risks and our risk appetite. The Prudential Regulation Authority (‘PRA’) cancelled the 2024 Annual Cyclical Scenario stress testing exercise and instead commenced a Desk Based Stress Test exercise, which used PRA models and their in-house expertise to test the resilience of the UK banking system against more than one adverse macroeconomic scenario. HSBC provided 2023 year-end data to support this. The results of this exercise across firms were published in aggregate only, within the Financial Stability Report issued in the fourth quarter of 2024. The PRA announced an updated Stress Testing Framework and intends to return to a concurrent exercise in 2025, involving the submission of stressed projections. Further details will be provided by the PRA during 2025. During 2024, the Group-wide internal stress test was completed and assessed the impact of two contrasting scenarios envisioning severe macroeconomic conditions over a five- year period. These scenarios reflected the uncertain inflation and interest rate environment, heightened geopolitical tensions, banking sector challenges, and global economic stress. The outcomes demonstrated that the Group has sufficient capital to withstand severe but plausible stress conditions. Additionally, the conclusions drawn from this exercise will also be included in the Group Internal Capital Adequacy Assessment Process . Climate risk Climate risk relates to the financial and non- financial impacts that may arise as a consequence of climate change and the move to a net zero economy. Climate risk can impact us either directly or through our relationships with our clients. These include the potential risks arising as a result of our net zero ambition, which could lead to reputational concerns, and potential legal and/ or regulatory enforcement action if we are perceived to mislead stakeholders on our business activities or if we fail to achieve our stated net zero ambition. We seek to manage climate risk across all our businesses in line with our Group-wide risk management framework and continue to incorporate climate considerations within our traditional risk types. For further details of our approach to climate risk management, see ‘Climate risk‘ on page 249 . For further details of our TCFD disclosures, see the ‘ESG review‘ on page 466 . Climate stress tests Scenario analysis supports our strategy by assessing our potential exposures to climate risks and vulnerabilities under a range of climate scenarios. Scenario analysis helps to build our awareness of climate change, understand plausible impacts to our strategy, plan for the future and meet our growing regulatory requirements. In 2024, we enhanced our internal climate scenario analysis exercise by focusing our efforts on generating more granular insights for key sectors and regions to support core decision-making processes. We also continued to embed climate considerations into core processes across the Group and to respond to our regulatory requirements. Additionally, we produced several climate stress tests for regulators around the world, including the Hong Kong Monetary Authority. For further details of our approach to climate risk stress testing, see ‘Insights from scenario analysis’ on page 253 . Our operations We remain committed to investing in the reliability and resilience of our technology systems and critical services. We assess our third parties to help ensure they deliver the standard of services we require to provide resilient services to our customers. We do so to help protect our customers, affiliates and counterparties, and minimise any disruption to our services. In our approach to defending against these threats, we invest in business and technical controls to help us prevent, detect, manage and recover from issues in a timely manner within our risk appetite. We are working to balance the opportunity artificial intelligence (‘AI’) presents to accelerate delivery of our strategy with the need for appropriate controls to be in place to mitigate the associated risks. HSBC is committed to using AI responsibly. HSBC’s Principles for the Ethical Use of Data and AI are available at www.hsbc.com/ai. We continue to refine and embed governance and controls into our risk management processes to help meet the Group’s needs and increasing regulatory expectations for when AI is both developed internally and enabled through third parties. We continue to focus on improving the quality and timeliness of the data used to inform management decisions, and are progressing with the implementation of our strategic and regulatory change initiatives to help deliver the right outcomes for our customers, people, investors and communities. For further details of our risk management framework and risks associated with our banking and insurance manufacturing operations, see pages 167 and 261 , respectively. 38 HSBC Holdings plc Annual Report on Form 20-F Strategic Report Top and emerging risks Our top and emerging risks report identifies forward-looking risks so that they can be considered in determining whether any incremental action is needed to either prevent them from materialising or to limit their effect. Top risks are those that have the potential to have a material adverse impact on the financial results, reputation or business model of the Group. We actively manage and take actions to mitigate our top risks. Emerging risks are those that, while they could have a material impact on our risk profile were they to occur, are not considered immediate and are not under active management. Our suite of top and emerging risks is subject to regular review by senior governance forums. We continue to monitor closely the identified risks and agree management actions to remediate and/or reduce them to acceptable levels, as required. Risk Trend Description Externally driven Geopolitical and macroeconomic risks ~ Our operations and portfolios are subject to risks arising from political instability, civil unrest and military conflict, which could lead to disruption of our operations, physical risk to our staff and/or physical damage to our assets. We are also subject to cyclical and idiosyncratic macroeconomic risks. Among the key risks to the economic outlook is the prospective recalibration of economic and trade policies following elections in the US and other markets in 2024. This could prove disruptive to the global economy. Technology and cybersecurity risk ~ There is an increased risk of service disruption or loss of data resulting from technology failures or malicious activities from internal or external threats. We continue to monitor changes to the technology and threat landscape, including those arising from ongoing geopolitical and macroeconomic events and the impact this may have on third-party risk management. We operate a continuous improvement programme to help support the resilience and stability of our technology operations and counter a fast-evolving and heightened cyber threat environment. Environmental, social and governance (‘ESG’) risks ~ We are subject to ESG risks, including in relation to climate change, nature and human rights. These risks have increased owing to the pace and volume of regulatory developments globally, signs of diverging national agendas, increasing frequency of severe weather events, which require careful monitoring, and may impact financial and non-financial risks due to stakeholders placing more emphasis on financial institutions’ actions and investment decisions in respect of ESG matters. Failure to meet these evolving expectations may result in financial and non-financial risks, including reputational, legal and regulatory compliance risks. Financial crime risk ~ We are exposed to financial crime risk from our customers, staff and third parties engaging in criminal activity. The financial crime risk environment is heightened due to increasingly complex geopolitical challenges, the macroeconomic outlook, the complex and dynamic nature of sanctions and export control compliance, evolving financial crime regulations, rapid technological developments, an increasing number of national data privacy requirements and the increasing sophistication of fraud. As a result, we will continue to face the possibility of regulatory enforcement and reputational risk. Digitalisation and technological advances ~ Developments in technology and changes in regulations continue to enable new entrants to the banking industry as well as new products and services offered by competitors. This challenges us to continue to innovate with new digital capabilities and evolve our products, to attract, retain and best serve our customers. Along with opportunities, new technology, including generative AI, can introduce risks and disruption. We seek to manage technology developments with appropriate controls and oversight. Evolving regulatory environment risk } The regulatory and compliance risk environment is set against continued geopolitical risk and regulatory focus on operational resilience, financial resilience, model risk, ESG, financial crime and risk management practices. Multiple jurisdictions are progressing the implementation of Basel 3.1 standards to various timescales, some of which are being delayed. The governmental and regulatory focus on improving pro-business growth is also driving legislative and regulatory change. Internally driven Data risk } We use data to serve our customers and run our operations, often in real-time within digital experiences and processes. If our data is not accurate and timely, our ability to serve customers, operate with resilience or meet regulatory requirements could be impacted. We seek to ensure that non-public data is kept confidential, and that we comply with the growing number of regulations that govern data privacy and cross-border movement of data. Risks arising from the receipt of services from third parties } We procure goods and services from a range of third parties. Due to the current macroeconomic and geopolitical climate, the risk of service disruption in our supply chain remains heightened. We continue to strengthen our controls, oversight and risk management policies and processes to select and manage third parties, including our third parties’ own supply chains, particularly for key activities that could affect our operational resilience. Model risk ~ Model risk arises whenever business decision making includes reliance on models. We use models in both financial and non- financial contexts, as well as in a range of business applications. Evolving regulatory requirements are driving material changes to the way model risk is managed across the banking industry, with a particular focus on capital models. New technologies, including AI and generative AI, are driving a need for enhanced model risk controls. Change execution risk } Delivering change effectively is critical to achieving our strategy and enables us to meet rapidly-evolving customer and stakeholder needs. We seek to deliver complex change in line with established risk management processes, prioritising sustainable outcomes and understanding the associated risks. We focus on meeting industry and regulatory expectations and fulfilling our obligations to customers and clients. Risks associated with workforce capability, capacity and environmental factors with potential impact on growth ~ Our businesses, functions and geographies are exposed to risks associated with employee retention and talent availability, changing skills requirements of our workforce, and compliance with employment laws and regulations. Attrition across the Group remains stable, but failure to manage these risks may impact the delivery of our strategic objectives or lead to regulatory sanctions or legal claims, and the risks are heightened during the current period of fundamental organisational change. ~ Risk heightened during 2024 } Risk remained at the same level as 2023 HSBC Holdings plc Annual Report on Form 20-F 39 Environmental, social and governance review Our ESG review sets out our approach to our environment, customers, employees and governance. It explains how we aim to achieve our purpose, deliver our strategy in a way that is sustainable, and build strong relationships with all of our stakeholders. How we present our TCFD disclosures Our overall approach to TCFD can be found on page 21 and additional information is included on pages 466 to 472 . Further details have been embedded in this section and the Risk review section on pages 249 to 258 . Our TCFD disclosures are highlighted with the following symbol: 40 Environmental 61 Social 71 Governance Shanghai, China, 1870s. Waterfront View. TCFD 40 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Environmental TCFD Transition to net zero We aim to support the transition to net zero and a sustainable future in partnership with our customers and other stakeholders At a glance Supporting the transition to net zero is a key priority for HSBC. In 2020, we set an ambition to become a net zero bank by 2050. We continue to develop our capabilities, products and services to support our customers’ transition, reduce emissions in our own operations and partner for systemic change. We believe supporting our customers’ transition both benefits their business and helps generate long-term financial returns for our shareholders. Since we set our net zero ambition, we have seen promising progress in some vital areas of the decarbonisation challenge. Yet while the transition has progressed, the global pace of change remains insufficient. We are limited by, and cannot on our own overcome, the present lag in policy measures and the overall slower pace of the transition. In our net zero transition plan published in January 2024 we committed to continually calibrate our approach to take into consideration the latest scientific methodologies, climate- related policies, and developments in the real world, given that our sector portfolios reflect progress in the regional economies where we operate. As we near the mid-point towards our own 2030 targets, it is important to take stock of our own progress so far. We have made good progress in reducing the emissions from our own operations but more uneven progress towards our ambitions for our financed emissions footprint. Financed emissions Our strategy is to support emissions reductions in the wider economy by working with our portfolio of customers to facilitate the emissions reductions they are seeking to make. We continue to focus on engaging with our customers on their transition plans, managing the products and services that we offer, and adapting the financing choices we make to help move the world towards a resilient, net zero economy. We have set 2030 targets that combine financed and facilitated emissions for the oil and gas sector on an absolute emissions reduction basis, and for the power and utilities sector using an emissions intensity metric. We have also set a target for on-balance sheet financed emissions for thermal coal mining. For demand-side sectors, we have set 2030 emissions intensity targets to reflect the need to scale up low-emissions technologies while transitioning away from existing high-emitting technologies in transport and industry. As part of our financial reporting, we present the progress for these sectors against our published financed emissions baselines and targets. As we have set out in our net zero transition plan, we must acknowledge that there are fundamental prerequisites, outside of our control, which impact our ability to meet our 2030 interim financed emissions targets. These include technological advancements, diversification of the energy mix, market demand for climate solutions, evolving customer preferences, and government leadership and effective policy. At the current pace of decarbonisation, a combination of the above factors has led to the transition being slower than envisaged by recent Paris-aligned net zero scenarios. Against this background, we have begun a review of our interim 2030 financed emission targets and associated policies as part of the annual net zero transition plan review referenced in our 3Q24 earnings release in October. As we calibrate our approach for the latest context, we will seek to balance being ambitious on net zero while recognising the present near- term global challenges and the associated impact of the transition playing out differently across the regions and sectors we serve. In doing so we plan to draw on the latest scientific evidence and credible industry-specific pathways, while, at the same time, maintaining our commitment under our 2021 Climate Resolution. Own operations and supply chain In 2020, we set an ambition to reach net zero in our operations and supply chain by 2030. Our approach is to reduce emissions from consumption, replace consumption with low- emissions alternatives, and remove remaining emissions with high-quality carbon credits, in line with external guidance. We continue to make good progress in driving down our direct emissions. However, progress in reducing scope 3 emissions in our supply chain is proving slower than we anticipated, driven mainly by the slower pace of the transition across the real economy. While we remain committed to our approach, it has become clear that we would need to rely heavily on carbon offsets to achieve net zero in our supply chain by 2030. As such, we have revisited our ambition to take into account latest best practice guidance on carbon offsets. We are now focused on achieving net zero across our operations, travel and supply chain by 2050. In this section Understanding our climate reporting We continue to evolve our disclosures taking into consideration data limitations and other challenges, and provide an overview of key changes for 2024. Page 41 Supporting our customers Sustainable finance and investment We seek to support our customers’ transition to net zero, including through the provision and facilitation of sustainable finance and investment solutions. Page 43 Partnering for systemic change Supporting systemic change to help deliver net zero We focus on building partnerships that help support an enabling environment for scaling net zero solutions in the geographies most impacted by climate change. Page 45 Embedding net zero Financed emissions We aim to align our financed emissions to achieve net zero by 2050. Page 46 Net zero in our own operations We aim to achieve net zero in our own operations, travel and supply chain by 2050, in line with our overarching net zero ambition. Page 56 Managing climate risk We manage climate risk across our businesses in line with our Group-wide risk management framework and continue to enhance our stress testing and scenario analysis capability to identify and understand climate-related risks. Page 58 Sustainability risk policies Our sustainability risk policies help to set out our appetite for financing and advisory activities in certain sectors. Page 59 HSBC Holdings plc Annual Report on Form 20-F 41 Understanding our climate reporting Continuing to evolve our climate disclosures We engage with standard setters to support the development of transparent and consistent climate-related industry standards in areas such as product labelling, sustainability disclosures, sustainable finance taxonomy and emissions accounting. In 2025, we will continue to review and enhance our approach to disclosures. Internal and external data challenges The effective measurement, governance and reporting of progress against our climate ambitions relies heavily on the availability and quality of both internal and external data. Newer data sources and topics may be difficult to assure using traditional verification techniques. This, coupled with diverse external data sources and complex structures, further complicates data consolidation. Our internal data on customer groups that was used to source financial exposure and emissions data, is based on credit and relationship management factors and is not always aligned with the need to analyse emissions across sector value chains. This can result in inconsistencies in our financed emissions calculations. We continue to invest in the development of data and analytics capabilities to support our transition. This includes sourcing more reliable data from external providers. We are also developing our processes, systems, controls and governance to meet the demands of future ESG reporting. Given our dependency on collecting emissions data from our clients and the manual nature of the process, enhanced verification and assurance procedures are performed on a sample basis over this data, including the first and second lines of defence. Our climate models undergo independent review by an internal model review group, and we obtain limited assurance on our financed emissions and sustainable finance disclosures from external parties, including our external auditors. Policies and implementation We continue to review and enhance implementation of sustainability risk policies as we apply them in practice. They are reviewed and, where appropriate, updated based on factors including risk materiality, implementation experience, evolving scientific guidance, updated climate scenarios, policy and regulatory requirements and evolving industry practices. Lack of consistency across sustainable finance taxonomies Sustainable finance metrics, taxonomies and practices currently lack global consistency. As standards develop and regulatory guidance evolves across jurisdictions, our targets, methodologies and disclosures may also need to adapt. Recognising these challenges, we have developed and disclosed our Sustainable Finance and Investment Data Dictionary to accompany reporting against our sustainable financing and investment ambition. For further details, see page 43 . The evolution of the dictionary could lead to differences in year-on-year reporting. We continue to engage with standard setters in different regions to support the development of transparent and consistent taxonomies to encourage science-based decarbonisation, particularly in high transition risk sectors. Impact on our reporting and financial statements We have assessed the impact of climate risk on our balance sheet and have concluded that no incremental adjustments were needed to capture climate impacts in our financial statements for the year ended 31 December 2024. The effects of climate change are a source of uncertainty. We capture known and observable potential impacts of climate- related risks in our asset valuations and balance sheet calculations. These are considered in relevant areas of our balance sheet, including expected credit losses, classification and measurement of financial instruments, goodwill and other intangible assets; and in making the long-term viability and going concern assessment. As part of assessing the impact on our financial statements we conducted scenario analysis to understand the impact of climate risk on our business (see pages 58 and 253 ). For further details of how management considered the impact of climate-related risks on its financial position and performance, see ‘Critical estimates and judgements’ on page 376 . Progress on our net zero transition plan We continue to take actions across our organisation to support the implementation of our net zero transition plan. This report provides key updates on our progress in 2024 and our annual TCFD reporting. For further details of our climate risk exposures, see page 249 . Key changes to our 2024 disclosures We are committed to timely and transparent reporting. However, we recognise that challenges may result in us having to change certain disclosures. In 2024, there was an impact on certain climate disclosures, including: – Financed emissions for the automotive, thermal coal mining and aviation sectors: In 2024, we made a methodological change to the way we calculate financed emissions for our automotive clients. In addition, we identified errors in both the thermal coal mining and aviation sectors, including errors in lending product codes. These changes have resulted in a 25% decrease in emissions reported for automotive and a 30% increase in emissions reported for aviation in 2022 figures, and a 18% increase in emissions reported for thermal coal mining in the 2020 baseline figure on an absolute financed emissions basis. For further details, see pa ge 49 . – Thermal coal exposure: we continue to refine our basis of preparation and have made further enhancements in 2024. For further details, see page 60 . – Supply chain emissions: we have restated our supply chain emissions due to revisions in our methodology and an error in the mapping of industry averages. This has resulted in a 25% increase to our 2019 baseline emissions and a 2% increase to our 2023 reported emissions. For further details, see page 57 . – Asset management financed emissions 2019 baseline: we have re-baselined our 2019 intensity figure due to an error in the issuer mapping and is now 124 tCO2e/M$ invested versus 131 tCO2e/ M$ invested reported in the Annual Report and Accounts 2022. For further details, see page 55 . – Energy consumption: We have restated our 2019 metric for total energy consumption due to an error. For further details, see page 57 42 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Explaining scope 1, 2 and 3 emissions To measure and manage our greenhouse gas emissions, we follow the Greenhouse Gas Protocol global framework, which identifies three scopes of emissions. Scope 1 represents the direct emissions we create. Scope 2 represents the indirect emissions resulting from the use of electricity and energy to run a business. Scope 3 represents indirect emissions attributed to upstream and downstream activities. Our upstream activities include business travel and emissions from our supply chain including transport, distribution and waste. Our downstream activities include those related to investments and including financed emissions. Under the protocol, scope 3 emissions are also broken down into 15 categories, of which we provide reporting emissions data for three related to upstream activities. These are: purchased goods and services (category 1); capital goods (category 2); and business travel (category 6). We also report data on downstream activities for financed emissions (category 15). For further breakdown of our scope 1, 2 and 3 emissions, see our ESG Data Pack at www.hsbc.com/esg. 1    Our analysis of financed emissions comprises ‘on-balance sheet financed emissions’ and ‘facilitated emissions’. Our own operations and supply chain See page 58 Scope 2 Indirect Scope 3 Indirect Scope 1 Direct Scope 3 1 Indirect Our financed emissions See page 46 Electricity, steam heating and cooling Purchased goods and services (Category 1) Company facilities Company vehicles Business travel (Category 6) Capital goods (Category 2) Investments and financed emissions (category 15) Upstream activities Downstream activities HSBC Holdings Assurance relating to ESG metrics TCFD HSBC Holdings plc is responsible for preparation of the ESG information and all supporting records, including selecting appropriate measurement and reporting criteria, in this Form 20-F, ESG Data Pack and the additional reports published on our website. We recognise the importance of ESG disclosures and the quality of data underpinning them. We also acknowledge that our internal processes to support ESG disclosures continue to be developed and that currently they partly rely on manual sourcing and categorisation of data. Certain aspects of our ESG disclosures are subject to enhanced verification and assurance procedures including the first, second and third lines of defence. Assurance assists with reducing the risk of misstatement, although it cannot be fully eliminated given the challenges in data, evolving methodologies and emerging standards. We aim to continue to enhance our approach in line with external regulations and expectations. For 2024, ESG metrics are subject to stand- alone independent limited third-party assurance in accordance with the International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’ and, in respect of the greenhouse gas emissions, in accordance with the International Standard on Assurance Engagements 3410 ‘Assurance Engagements on Greenhouse Gas Statements’, issued by the International Auditing and Assurance Standards Board, on the following specific ESG metrics: – our use of proceeds from Green Bond issuances 2024 (published in December 2024); – our cumulative sustainable finance and investment provided and facilitated from 1 January 2020 to 31 December 2024 (see page 43 ) ; – our on-balance sheet financed emissions for 2023 for six sectors, our on-balance sheet financed emissions for 2021 and 2022 for thermal coal mining, and our facilitated emissions for two sectors for 2023 (see page 54 ); – our thermal coal financing drawn balance exposures for 2021 and 2022 ( see page 60 ); – our own operations’ scope 1, 2 and 3 (business travel) greenhouse gas emissions data (see page 57 ), as well as supply chain emissions (purchased good and services, and capital goods) data; and – our re-baselined 2019 intensity metric and the scope 1 and 2 financed emission intensity achieved by 31 December 2023 for our HSBC asset management business (see page 55 ). The work performed for independent limited assurance is substantially less than the work performed for a reasonable assurance opinion, such as that provided for financial statements. Our data dictionaries and methodologies for preparing the above ESG-related metrics and independent third-party limited assurance reports can be found at www.hsbc.com/who-we-are/esg- and-responsible-business/esg-reporting-centre. HSBC Holdings plc Annual Report on Form 20-F 43 Supporting our customers Sustainable finance and investment TCFD We aim to help our customers transition to net zero and a sustainable future by providing and facilitating between $750bn and $1tn of sustainable finance and investment by 2030. Our sustainable finance and investment ambition aims to help promote green, sustainable and socially-focused business and sustainable investment products and solutions. Since 1 January 2020, we have provided and facilitated a cumulative $ 352.5 b n of sustainable finance and $ 41.1 bn of ESG and sustainable investing, as defined in our Sustainable Finance and Investment Data Dictionary 2024. This included 39% where the use of proceeds was dedicated to green financing, 12% to social financing, and 15% to other sustainable financing. It also included 24% of sustainability-linked financing and 10% of net new investment flows managed and distributed on behalf of investors. In 2024, our underwriting of green, social, sustainability and sustainability-linked bonds for clients increased over the year, measured on a proportional share basis, in line with the wider bond market environment, although it remained at 15% of our total bond underwriting. On-balance sheet sustainable lending transactions increased by 11% compared with 2023. In 2024, transactions totalling $0.5bn were identified as no longer fulfilling our eligibility criteria. These were declassified and removed from the cumulative progress total, and reported as a negative entry in 2024. Since 1 January 2020, the cumulative amount declassified from the total is $1.2bn. Continued progress towards achieving our sustainable finance and investment ambition is dependent on market demand for the products and services set out in our Sustainable Finance and Investment Data Dictionary 2024 . Sustainable finance and investment summary 1 2024 ($bn) 2023 ($bn) 2022 ($bn) 2021 ($bn) 2020 ($bn) Cumulative progress since 2020 ($bn) Balance sheet-related transactions provided 2 47.4 42.7 42.2 26.0 10.4 168.7 Capital markets/advisory (facilitated) 37.3 33.3 34.5 48.7 30.0 183.8 ESG and sustainable investing (net new flows) 14.5 7.7 7.5 7.7 3.7 41.1 Total contribution 6 99.2 83.7 84.2 82.4 44.1 393.6 Sustainable finance and investment classification by theme 1 Green use of proceeds 5 42.2 37.1 29.0 27.1 18.9 154.3 Social use of proceeds 9.6 8.4 6.7 11.3 9.7 45.7 Other sustainable use of proceeds 3 13.9 10.7 12.6 11.7 8.3 57.2 Sustainability-linked 4 19.0 19.8 28.4 24.6 3.5 95.3 ESG and sustainable investing 14.5 7.7 7.5 7.7 3.7 41.1 Total contribution 6 99.2 83.7 84.2 82.4 44.1 393.6 1 The 2024 data in this table has been prepared in accordance with our Sustainable Finance and Investment Data Dictionary 2024, which includes green, social and sustainability activities. The amounts provided and facilitated include: the limits agreed for balance sheet-related transactions provided (including drawn and undrawn amounts), the proportional share of facilitated capital markets/advisory activities and ESG and sustainable investing net new flows of both HSBC-owned (Asset Management) sustainable investment funds and Wealth and Global Private Banking investments. 2    In 2024 only 9 months of WPB green/energy efficient mortgages were included for the first time within Other Qualified Green Lending, future years’ reporting will include 12 months of transactions. 3 Sustainable use of proceeds can be used for green, social or a combination of green and social purposes, assessed by HSBC against internal standards and relevant industry guidelines. 4 Sustainability-linked products, where the coupon or interest rate is dependent on whether the borrower achieves certain pre-defined sustainability performance target(s), are assessed by HSBC against internal standards and relevant industry guidelines and can be used for general purposes, which may be sustainable or non-sustainable. 5 Included within the total cumulative contribution towards our ambition are transactions to customers within the six high transition risk sectors (i.e. automotive, chemicals, construction and building materials, metal and mining, oil and gas, and power and utilities) as described on page 251 , of which approximately $56bn is defined as green use of proceeds in line with the Sustainable Finance and Investment Data Dictionary 2024. 6 The $ 393.6 bn cumulative progress since 1 January 2020 is subject to independent third-party limited assurance in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’. Our Sustainable Finance and Investment Data Dictionary 2024 and independent third-party limited assurance report is available at: www.hsbc.com/who-we-are/esg-and-responsible-business/ esg-reporting-centre. Our sustainable finance and investment data dictionary We define sustainable finance and investment as any form of financial service that integrates ESG criteria into business or investment decisions. This includes financing, investing and related activities that support the achievement of the UN SDGs, including but not limited to the aims of the Paris Agreement on climate change. Our Sustainable Finance and Investment Data Dictionary sets out our approach for classifying financing and investment as sustainable for the purpose of tracking and disclosing our performance against our sustainable finance and investment ambition. We update our data dictionary annually, including reviewing our product definitions, adding new qualifying products and removing products that no longer qualify, making enhancements to our internal standards, and developing our reporting and governance. This year, we also indicate for the first time the types of eligible environmental and social activities we intend to consider going forward when qualifying certain use of proceeds financing for inclusion towards our sustainable finance and investment ambition including: climate solutions; nature; adaptation and social- related activities. We engage in industry initiatives to develop our understanding and approach to ‘transition finance’. However, we do not currently plan to include transition finance as a product label or stand-alone category in our data dictionary and reporting. We will continue to monitor industry guidance as it develops. For our 2024 ESG Data Pack and Sustainable Finance and Investment Data Dictionary, see www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre. 44 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Sustainable finance and investment continued TCFD Leveraging our strengths We are focused on three key areas that play to our strengths as an organisation and can help deliver an impact on decarbonisation in the global economy, particularly in Asia-Pacific and the Middle East where the need for financing at scale is most critical. In 2024, we were named the world’s best bank for sustainable finance in the Euromoney Awards for Excellence. Transitioning industry We support our clients in emissions-intensive industries with their transition goals by engaging with them on their transition plans and by providing financing solutions. In 2024, we refreshed transition plan assessments for major clients in the oil and gas, power and utilities and coal mining sectors, and we began assessing major clients in the automotive, aviation, cement, steel and aluminium sectors, to better understand their objectives and identify opportunities to enable their decarbonisation strategies. Scaling infrastructure finance plays an important role in meeting global decarbonisation objectives. In 2024, we launched HSBC Infrastructure Finance (‘HIF’), which brings together our infrastructure finance, export finance, and debt/project finance capabilities to increase our capacity to realise opportunities in the transition to a low carbon economy. To support our WPB customers, HSBC UK launched Energy Efficient Home Cashback Mortgages, to offer cashback incentives to customers taking out our mortgage loans to finance their purchases of residential properties with an A or B EPC rating. Catalysing the new economy We aim to support clean industrial development and the scaling of entrepreneurial new economy companies at all stages of financing across the markets we operate in. We do this through direct financing and investment as well as through catalytic partnerships. We continue to work closely with Breakthrough Energy in developing and deploying critical climate solutions. We are an anchor partner in the Breakthrough Energy Catalyst platform, which provides expertise, resources and capital into first-of-a-kind or first commercial scale projects. Decarbonising trade and supply chains We continue to focus on helping to decarbonise trade flows and supply chains through our green trade finance and sustainable trade instruments, sustainable supply chain financing and sustainability-linked lending for trade. Mid-market and smaller businesses make up a large proportion of global supply chains. In 2024, we expanded our sustainable finance capabilities with the launch of a sustainability improvement loan (‘SIL’) for businesses of this size in Hong Kong and Singapore, broadening the sustainable finance options available in the region. For more examples of how we are supporting our customers, see additional case studies on pages 22 , 46 , 47 , 48 , 49 , and 55 . ESG and sustainable investing We offer a broad suite of ESG and sustainable investing solutions across asset management, wealth, private banking, and insurance, to help institutional and individual investors generate financial returns, manage risk and pursue ESG- related objectives in line with their preferences. As at 31 December 2024, HSBC Asset Management managed $179.8bn in ESG and sustainable investing portfolios for internal and external investors. This includes those that are distributed by HSBC Wealth and Private Banking and those HSBC Asset Management manages on behalf of HSBC Life. HSBC Asset Management recognises that its clients’ investment objectives are evolving, and sustainability preferences vary, and offers a broad range of sustainable investing solutions, in both traditional and alternative areas of investment. Our ESG and sustainable investing approach includes impact funds with a clear ESG or sustainable objective, thematic funds that seek to invest in ESG or sustainable trends, and strategies that seek to mitigate ESG risks by investing assets with higher ESG performance and exclusions of those that are lower ESG performing. Considerations across our approach can include, but are not limited to, climate or net-zero transition plans and controversies identified related to UN SDGs. For the avoidance of doubt, products or assets invested pursuant to our ESG and sustainable investing approach do not necessarily qualify as ‘sustainable investments’ as defined by the EU Sustainable Finance Disclosure Regulation and/or other relevant regulations, and may not qualify as ‘sustainable’ products for the purposes of the UK Sustainability Disclosure Requirements and European Securities and Markets Authority fund naming guidance and/or any other regulatory standards. The HSBC ESG and sustainable investing approach is an internal classification used to establish our own ESG and sustainable investing standards and to promote consistency across asset classes and HSBC business lines where relevant. Our ESG and sustainable investing approach should not be relied on externally to assess the sustainability characteristics of any given product. For our private banking and wealth customers, we offer a range of ESG and sustainable investing products across different asset classes, including mutual funds, ETFs, equities, fixed income, discretionary and alternatives. In 2024, we continued to expand our investment offering with the launch of eight ESG and sustainable investing mutual funds and ETFs. We regularly publish insights to help our clients better understand the ESG implications of their investments. In 2024, we made updates to integrate ESG into our client wealth advisory journey in both Switzerland and Luxembourg, including building capabilities to understand private banking clients’ sustainability preferences, rebalance their investment portfolios and monitor portfolios in line with their preferences. We also integrated client sustainability preferences into the investment product filtering process for retail wealth clients in Hong Kong. In 2024, HSBC Life increased ESG and sustainable investing assets across its insurance manufacturing entities in Asia, Europe, and Latin America. The majority of these newly-deployed assets were green and sustainability-linked bonds, followed by placements into sustainable private credit funds. For further details of our asset management policies, see page 60 . HSBC Holdings plc Annual Report on Form 20-F 45 Partnering for systemic change Supporting systemic change to help deliver net zero We focus on building strategic partnerships that can help to create an enabling environment for mobilising finance, and support development and scaling-up of solutions for the net zero transition . We continue to participate in several sustainability-related cross-industry alliances and initiatives to help stimulate industry engagement on climate and nature-related issues, encourage the flow of finance for the net zero transition, and improve global financial standards, guidance, and frameworks to mobilise finance and accelerate action. Through our philanthropy, we partner with a range of non-governmental organisations to develop thought leadership, spur innovation, build capacity and test and scale climate solutions. Highlights from our net zero and sustainability-aligned partnerships In 2024 we donated approximately $9m in grant funding to help establish a portfolio of partnerships aligned to the strategic focus areas set out in our net zero transition plan: transitioning industry, catalysing the new economy, and decarbonising trade and supply chains. We are also supporting initiatives focused on driving progress on cross-cutting issues, such as nature and the just transition. Our collaboration with the Mission Possible Partnership seeks to support decarbonisation of some of the world’s hard-to-abate heavy industry and transport sectors. We are funding a joint initiative focused on demand creation for green building materials in the Middle East, fostering collaboration among industry leaders, policymakers, and innovators to unlock projects. We launched a new partnership with Third Derivative and Founders Factory to support climate tech innovation focused on hard-to-abate sectors, particularly in Asia where there is a significant need and growing market for such technologies. The partnership seeks to provide capacity building and facilitate connections with the investment community to support the development and scaling of key climate technologies. Our partnership with the Venture Climate Alliance (‘VCA’) supports venture capital firms to shape and share best practices that help to prepare them for the climate transition at the earliest stages of business creation. Work is underway on developing a climate solutions framework to support portfolio-level climate impact disclosure and expand VCA membership across emerging markets. Climate Solutions Partnership Our five-year Climate Solutions Partnership with the World Resources Institute, WWF and over 50 local partners, continues to support nature- based solutions and energy transition in Asia. Since 2020, $105m in funding has been deployed to our NGO partners. The energy programmes have engaged companies across Asia to help set new standards in climate commitments for their industries and mobilised finance to support the uptake of renewables. The nature programmes supported the Asia Sustainable Palm Oil Links programme, focused on promoting sustainable palm oil production, consumption and trade across Asia, and the Nature-based Solutions Accelerator, which supported projects to reach investment readiness. Through this partnership, we also launched an open-access Environmental Crimes Financial Toolkit to help financial institutions detect and monitor activities related to environmental and financial crimes. The first set of tools focuses on commodity-driven deforestation and land conversion. Our just transition approach The transition to net zero is expected to drive social changes on a global scale, presenting risks and opportunities for our clients and our stakeholders. Our net zero transition plan sets out our initial approach to incorporating just transition considerations. We are taking steps to embed just transition principles into our client engagement activities, our own operations, and our financing decisions. HSBC Asset Management, in line with relevant stewardship activities, encourages companies to identify and address the impacts of their climate strategy on stakeholders, including workers, suppliers, and the communities in which they operate. This may include specific metrics or objectives in relation, but not limited to, employee training and development, green job creation, safeguarding workers’ rights and support for affected communities. We are a founding funder of the Just Transition Finance Lab, hosted at the LSE’s Grantham Research Institute, which aims to accelerate solutions to achieve progress on climate and wider environmental goals through a people- centred approach. Our approach to nature Around one third of the emissions reductions required to limit global warming in line with the Paris Agreement are linked to the land use system and nature. We have been further developing our approach to nature, which builds on the outline that was set out in our net zero transition plan. This includes considering how to: understand our exposure to nature; manage nature-related risks and impacts; support our customers, including financing and investing in nature-related solutions; and build nature-related skills, data capacities and partnerships. We are taking steps to embed our approach to nature alongside delivery of our net zero implementation plans. We continue to test and scale approaches to financing and investing in biodiversity and nature. In 2024, starting with our European clients, we began including nature-related questions in our client transition engagement questionnaire. Climate Asset Management, HSBC Asset Management’s joint venture with climate investment and advisory firm Pollination, has now raised commitments of more than $1bn for natural capital projects around the world, and announced the final close of its Natural Capital and Nature Based Carbon Funds. 46 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Embedding net zero Financed emissions TCFD As part of our ambition to become a net zero bank by 2050, we published initial financed emissions targets for 2030. As we near the mid-point towards our 2030 targets, w e have begun a review of our interim 2030 financed emissions targets and associated policies as described on page 18 . This forms part of our annual net zero transition plan review referenced in our 3Q24 earnings release. Our analysis of financed emissions comprises ‘on-balance sheet financed emissions’ and ‘facilitated emissions’, which we distinguish where necessary in our reporting. Our on-balance sheet financed emissions include emissions related to on-balance sheet lending, such as project finance and direct lending. Our facilitated emissions include emissions related to financing we help clients to raise through capital markets activities. Our analysis covers financing from Global Banking and Markets, and Commercial Banking. Financed emissions link the financing we provide to our customers and their activities in the real economy, and provide an indication of the associated greenhouse gas emissions. They form part of our scope 3 emissions, which include emissions associated with the use of a company’s products and services. We have set combined on-balance sheet financed and facilitated emissions targets for two emissions-intensive sectors: oil and gas, and power and utilities. We have also set targets for on-balance sheet financed emissions for the following sectors: cement; iron, steel and aluminium; aviation; automotive; and thermal coal mining. As part of our financial reporting, we present the progress for these sectors against our published financed emissions baselines and targets . We have set absolute emissions reduction targets for the oil and gas, and thermal coal mining sectors. For the power and utilities; cement; iron, steel and aluminium; aviation; and automotive sectors, we have set emissions intensity targets that allow us to deploy capital towards decarbonisation solutions. Our approach to financed emissions In our approach to assessing our financed emissions, our key methodological decisions were shaped in line with industry practices and standards. We recognise these are still developing. Coverage of our analysis Our analysis focuses on the most carbon- emissive sectors and the parts of the value chain where we believe the majority of emissions are produced, to help reduce double counting of emissions. This is different to the scope of sectors within the wholesale corporate lending portfolio that we use to manage climate risk. These sectors are set out on page 251 . By estimating emissions and setting targets for customers that directly account for, or indirectly influence, the majority of emissions in each of the most carbon-emissive sectors, we can focus our engagement and resources where we believe the potential for change is highest. For each sector, our reported emissions now typically include all the major greenhouse gases, including carbon dioxide, methane and nitrous oxide, among others. These are reported as tonnes of CO 2 equivalent (‘ tCO 2 e’ ) . To calculate annual on-balance sheet financed emissions, we follow guidance from the Partnership for Carbon Accounting Financials (‘PCAF’) standard. We use drawn balances as at 31 December in the year of analysis related to wholesale credit and lending, including business loans and project finance, as the value of finance provided to customers. We excluded products that were short term by design and typically less than 12 months in duration to reduce volatility, having considered the PCAF guidance and subject matter expert opinions from the business. For facilitated emissions we considered all capital market transactions in scope for the year of analysis. These included debt and equity capital markets, and syndicated loans. For further details of our financed emissions methodology, exclusions, and limitations, see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who- we-are/esg-and-responsible-business/esg- reporting-centre. HSBC Holdings plc Annual Report on Form 20-F 47 Financed emissions continued The chart below shows the scope of our financed emissions analysis of the seven sectors, including upstream, midstream, and downstream activities within each sector. The allocation of companies to different parts of the value chain is highly dependent on expert judgement and data available on company revenue streams. As data quality improves, this will be further refined. Sector Scope of emissions Value chain in scope Coverage of greenhouse gases (‘GHGs’) Oil and gas 1, 2 and 3 Upstream (e.g. extraction) Midstream (e.g. transport) Downstream (e.g. fuel use) Integrated/ diversified All GHGs Power and utilities 1 1 and 2 Upstream (e.g. generation) Midstream (e.g. transmission and distribution) Downstream (e.g. retail) Diversified utilities - Power generation All GHGs Cement 1 and 2 Upstream (e.g. raw materials, extraction) Midstream (e.g. clinker and cement manufacturing) Downstream (e.g. construction) All GHGs Iron, steel and aluminium 1 and 2 Upstream (e.g. raw materials, extraction) Midstream (e.g. ore to steel) Downstream (e.g. construction) All GHGs Aviation 1 for airlines 3 for aircraft lessors Upstream (e.g. parts manufacturers) Midstream (e.g. aircraft manufacturing) Downstream (e.g. airlines and air lessors) All GHGs Automotive 1, 2 and 3 Upstream (e.g. suppliers) Midstream (e.g. motor vehicle manufacture) Downstream (e.g. retail) All GHGs Thermal coal mining 1, 2 and 3 Upstream (e.g. extraction) Midstream (e.g. processing) Downstream (e.g. retail) All GHGs Key: 1  The power and utilities value chain has been updated to show diversified utilities power generation as a separate part of the value chain. This has always been included in-scope of the power and utilities target. Included in analysis Setting our targets Our target-setting approach to date for on- balance sheet financed emissions and facilitated emissions, h as been to utilise a single reference scenar io – IEA’s NZE 2021 – to underpin both energy supply-related sectors (oil and gas; power and utilities; and thermal coal mining), and our published targets for demand- side sectors in transport (aviation and automotive) and heavy industry (cement; and iron, steel and aluminium). Facilitated emissions included in our combined metrics are weighted at 33%, in accordance with the PCAF standard. To further reduce the inherent volatility in facilitated emissions, we apply a three-year moving average across transactions (i.e. average of 2021, 2022 and 2023 for the 2023 progress numbers) to track progress to our combined target. This means that transactions facilitated in 2028 and 2029 will still have an impact on the 2030 progress num ber and will need to be taken into consideration as we manage progress towards our target. Our approach for financed emissions accounting does not rely on purchasing credits to achieve any financed emissions targets we set. An evolving approach In the upcoming review of our financed emissions targets, we will seek to balance being ambitious on net zero while recognising present near-term global challenges and the associated impact of the transition playing out differently across the regions and sectors we serve. In doing so, we plan to draw on the latest scientific evidence and credible industry-specific pathways while, at the same time, maintaining our commitment under our 2021 Climate Resolution. Other sector updates For the agricultural sector, due to ongoing data challenges, we are not in a position to report our financed emissions or set a target at this time. For commercial real estate, we continue to work towards outlining our financed emissions ambition. For residential real estate, we continue to expect to measure and report our financed emissions in future disclosures. 48 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Financed emissions continued Data and methodology limitations Our financed emissions estimates and methodological choices are shaped by the availability of data for the sectors we analyse. We are members of the PCAF, which defines and develops greenhouse gas accounting standards for financial institutions. Its Global GHG Accounting and Reporting Standards for Financed Emissions and for Facilitated Emissions provide detailed methodological guidance to measure and disclose financed and facilitated emissions. – We have found that data quality scores vary across the different sectors and years of our analysis. While we expect our data quality scores to improve over time, as companies continue to expand their disclosures to meet growing regulatory and stakeholder expectations, there may be fluctuations within sectors year-on-year, and/or differences in the data quality scores between sectors due to changes in data availability. – The majority of our clients do not yet report the full scope of greenhouse gas emissions included in our analysis, in particular scope 3 emissions at a subsidiary level. In the absence of client-reported emissions, we estimated emissions using proxies based on company production and revenue figures. Although we sought to minimise the use of non-company-specific data, we applied industry averages in our analysis where company-specific data was unavailable through our third-party datasets. As data improves, estimates will be replaced with reported figures. – Third-party datasets that feed into our analysis may have up to a two-year lag in reported emissions figures, and we are working with data providers to help reduce this. Mapping external datasets to our internal client entities is challenging due to complex company ownership structures. – The methodology and data used to assess financed emissions and set targets are new and evolving, and we expect industry guidance, market practice, and regulations to continue to change. As we undertake the review of our 2030 financed emissions targets, we will use appropriate data sources and current methodologies available. – We remain conscious that the attribution factor used in the financed emissions calculation is sensitive to changes in drawn amounts or market fluctuations, and we plan to be transparent around drivers for change to portfolio financed emissions where possible. – We calculate sector-level emissions intensity metrics using a portfolio-weighted approach. Due to data limitations, we are unable to obtain production data for all of our clients. We therefore calculate an emissions intensity figure using the 75th percentile of available data points to meet this data gap. – The classification of our clients into sectors is performed with inputs from subject matter experts, and will also continue to evolve with improvements to data and our sector classification approach. Our internal data on customer groups used to source financial exposure and emissions data is based on credit and relationship management attributes, and is not always aligned to the data needed to analyse emissions across sector value chains. As the sub-sector, and therefore the value chain classification, is based on judgement, this may be revised as better data becomes available. As a consequence, classification changes can result in sectoral movement year-on-year. Emissions are calculated at a counterparty group level, rather than at subsidiary level, mainly due to the availability of emissions data, but this may lead to over-or under-estimation of emissions compared with calculation at the counterparty level. Companies with multiple activities, such as conglomerates with near to equal business activity split across multiple sectors, are excluded as these can have different activities covered by multiple sector targets. – The operating environment for climate analysis and portfolio alignment is maturing. We continue to work to improve our data management processes. For further details of our financed emissions methodology, exclusions, and limitations, see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who- we-are/esg-and-responsible-business/esg- reporting-centre. HSBC Holdings plc Annual Report on Form 20-F 49 Financed emissions continued Our approach to emissions re-baselines and restatements The PCAF recommends that financial institutions should, in line with the Greenhouse Gas Protocol Corporate Value Chain (scope 3) Accounting and Reporting Standard requirement, establish a recalculation policy to ensure consistency, comparability and relevance of the reported greenhouse gas emissions data over time. Our emissions re-baseline and restatement policy defines the circumstances for a restatement of previously reported emissions data and targets, including a re-baseline. In 2024, we reviewed and enhanced our policy by extending the scope to cover additional emissions categories, including scope 1 and 2 emissions in our own operations. We also now include scope or boundary changes as a key driver of change. HSBC Asset Management is covered by a different emissions re-baseline and restatement framework as per page 55 . Emissions data and related processes are continually evolving. Therefore, we do not consider data and process enhancements to be a key driver of change. This may change over time as data and processes mature. When key drivers, in aggregate, breach our defined significance thresholds, a restatement of previously reported emissions data and targets, including where necessary a re-baseline, is required. We expect our policy to evolve with further industry guidance. The table below outlines the key drivers of change and what we expect to disclose when thresholds are breached. For further details of our emissions re-baseline and restatement policy, see our Financed Emissions and Thermal Coal Exposures Methodology at www.hsbc.com/who-we-are/ esg-and-responsible-business/esg-reporting- centre. Key drivers of change What we expect to disclose Changes to the emissions methodology including those driven by changes in industry guidance/regulations – A revised comparative amount for the restatement period that reflects the new information – The difference between the amount disclosed in the previous period and the revised comparative amount – The reasons for revising the comparative amount and why the new information provides reliable and more relevant information – The actions being taken to remediate same or similar errors in the future Errors, such as those in the internal application or interpretation of methodology, or errors in internal data Scope or boundary changes, such as acquisitions or divestments, and inventory boundary and coverage changes In 2024, we made the decision to amend the approach for prioritising data sources for automotive clients to utilise production data as opposed to reported third-party data, representing a methodological change. This change was implemented to include tailpipe emissions instead of all scope 3 categories, in order to be consistent with the target scenario reference pathway and industry practice. For the aviation sector, we restated the 2022 metrics as a lending product code was previously excluded in error; it is now included in our analysis. For the thermal coal mining sector, we re- baselined the 2020 metric due to three errors: an incorrect product code exclusion, an error in the hierarchy construct of a client, and the incorrect inclusion of a non-thermal coal project. Methodological changes were also applied to align with the refinements to our basis of preparation in our reporting. We are conducting a review of our controls for population and product codes, and aim to enhance them accordingly. We have set out in the table below the restated metrics for the automotive and aviation sectors, and the re-baselined metric for the thermal coal mining sector, for applicable years where the significance threshold was breached. The significance threshold was not breached for all other sectors, or for scope or boundary changes. Re-baselines and restatements Previously Reported Restated Metrics Percentage Change Sector Reporting metrics 2020 2022 2020 2022 2020 2022 Automotive On-balance sheet financed - tCO 2 e/million vkm - 216.6 - 170.1 - (21) % On-balance sheet financed - Mt CO 2 e - 5.5 - 4.1 - (25) % Aviation On-balance sheet financed - tCO 2 e/million rpk - 86.5 - 90.2 - 4 % On-balance sheet financed - Mt CO 2 e - 2.7 - 3.5 - 30 % Thermal coal mining On-balance sheet financed - Mt CO 2 e 4.0 - 4.7 - 18 % - 50 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Financed emissions continued Targets and progress We have set out in the table below our combined on-balance sheet financed and facilitated emissions targets for the oil and gas, and power and utilities sectors. In 2023, applying three-year average values weighted at 33%, facilitated emissions for the oil and gas sector total 6.5 Mt CO 2 e , and for the power and utilities sector, they total 346.6 tCO 2 e /GWh. These values are then combined with the on-balance sheet numbers for the relevant year to track progress to target. We set out the annual figures before the application of the three-year average in the facilitated emissions table on page 54 . We also set out our defined targets for the on-balance sheet financed emissions of the following sectors: cement; iron, steel and aluminium; aviation; automotive; and thermal coal mining. We disclose emissions in 2022 and 2023 and progress achieved in 2023 versus baseline for each sector, except for the thermal coal mining sector, for which we disclose financed emissions figures for 2021 and 2022. We are continuing to work on our 2023 and 2024 figures and expect to report on these in future disclosures. In 2021, thermal coal mining financed emissions totalled 1.38 Mt CO 2 e . In 2022, they were down by 69% against the re-baselined 2020 figure of 4.7 Mt CO 2 e. When assessing the changes from 2019 to 2023, it is important to emphasise how changes to exposure and market fluctuations impact yearly updates as we make progress towards our interim targets. Movement from one year to the next may not reflect future trends for the financed emissions of our portfolio. Sector 1 Baseline 2022 2023 2023 % change vs. baseline 2030 target Unit 2 Target scenario Combined on-balance sheet financed and facilitated emissions at 33%, with three-year moving average Oil and gas 42.6 in 2019 31.9 23.2 (46) % (34) % Mt CO 2 e IEA NZE 2021 Power and utilities 513.4 in 2019 396.8 349.0 (32) % 138.0 tCO 2 e/GWh IEA NZE 2021 On-balance sheet financed emissions Cement 0.64 in 2019 0.71 0.59 (8) % 0.46 tCO 2 e/t cement IEA NZE 2021 Iron, steel and aluminium 1.8 in 2019 2.5 2.1 17 % 1.05 (1.43) 3 tCO 2 e/t metal IEA NZE 2021 Aviation 84.0 in 2019 90.2 79.6 (5) % 63.0 4 tCO 2 e/million rpk IEA NZE 2021 Automotive 191.5 in 2019 170.1 152.4 (20) % 66.0 tCO 2 e/million vkm IEA NZE 2021 Thermal coal mining 4.7 in 2020 1.44 N/A N/A (70)% 5 Mt CO 2 e IEA NZE 2021 1    Our absolute and intensity emissions metrics and targets are measured based on the drawn exposures of the counterparties in scope for each sector. Emissions intensity is a weighted average according to the portfolio weight of each investment, as a proportion of the total portfolio value. For oil and gas; and power and utilities, the baseline, progress and target figures represent combined on-balance sheet financed and facilitated emissions. For cement; iron, steel and aluminium; aviation; automotive; and thermal coal mining, the baseline, progress and target figures represent on-balance sheet financed emissions. For the aviation and automotive sectors, the target figure is unchanged while the 2022 figure represents restated on-balance sheet financed emissions. For thermal coal mining, the target is unchanged while the 2020 baseline figure has been re-baselined. 2    For the oil and gas sector, absolute emissions are measured in million tonnes of carbon dioxide equivalent (‘Mt CO 2 e’); for the power and utilities sector, intensity is measured in tonnes of carbon dioxide equivalent per gigawatt hour (‘tCO 2 e/GWh’); for the cement sector, intensity is measured in tonnes of carbon dioxide equivalent per tonne of cement (‘tCO 2 e/t cement’); for the iron, steel and aluminium sector, intensity is measured in tonnes of carbon dioxide equivalent per tonne of metal (‘tCO 2 e/t metal’); for the aviation sector, intensity is measured in tonnes of carbon dioxide equivalent per million revenue passenger kilometres (‘tCO 2 e/ million rpk’); for the automotive sector, intensity is measured in tonnes of carbon dioxide equivalent per million vehicle kilometres ('tCO 2 e/million vkm’); and for the thermal coal mining sector, absolute emissions are measured in million tonnes of carbon dioxide equivalent (‘Mt CO 2 e’). 3    While the iron, steel and aluminium 2030 target is aligned with the IEA NZE 2021 scenario, we also reference the Mission Possible Partnership Technology Moratorium scenario, whose 2030 reference range is shown in parentheses. 4    Our aviation unit includes passenger and cargo tonnes, converted into revenue passenger kilometre (‘rpk‘), to align with our target pathway. This is comparable to revenue tonne kilometre ('rtk') using a 100kg per passenger conversion factor as we already include belly and dedicated cargo in our production figures. The conversion factor changed from 95kg per passenger used in the baseline disclosure to align with industry practice. 5    The thermal coal mining scope differs from the other sectors. We include solely emissions from thermal coal production and coal power generation, rather than the total emissions of a counterparty within a sector, to reflect the thermal coal mining absolute financed emissions reduction target. HSBC Holdings plc Annual Report on Form 20-F 51 Financed emissions continued We plan to report financed emissions and progress against our targets annually, and to be transparent in our disclosures about the metho dologies applied and any challenges or dependencies. However, financed emissions figures may not be reconcilable or comparable year-on-year in future, and baselines and targets may require updates or revisions as data, methodologies and reference scenari os develop. Consistent with the PCAF guidance on financed emissions accounting, we only consider the outstanding drawn financing amount given this has a direct link to real economy emissions. A number of clients have material undrawn balances that, if drawn, could significantly increase the financed emissions related to those clients. We expect to assess how to manage these exposures on a forward- looking basis as we progress towards our 2030 targets. In addition, for the intensity- based sectors, the emissions intensity is sensitive to material clients and changes to drawn balances year-on-year can therefore influence the trend. We continue to engage with and support our clients in their decarbonisation journey by providing financing and advisory services. Oil and gas For the oil and gas sector, our analysis included scope 1, 2 and 3 emissions, including carbon dioxide and methane, for upstream and integrated companies. Our baseline and progress figures reflect combined on-balance sheet financed and facilitated emissions. We have set a target to reduce absolute combined on-balance sheet financed and facilitated emissions for our oil and gas portfolio by 34% by 2030 relative to our 2019 baseline. This is consistent with a global 1.5°C-aligned pathway, as defined by the IEA NZE 2021 scenario. We show in the chart our progress to date against our 2030 target. We also indicate the 2030 figure derived from the updated IEA NZE 2024 scenario, which suggests a 30% reduction relative to the 2019 baseline. In 2023, absolute combined on-balance sheet financed and facilitated emissions in our portfolio decreased by 46% to 23.2 million tonnes of carbon dioxide equivalent (‘Mt CO 2 e’) relative to the 2019 baseline, and by 27% from 2022 to 2023. The reduction was due to divestments and other strategic decisions, and temporary factors such as low loan drawdown levels, and subdued capital markets activity. A return to market conditions with clients increasing capital markets activity, or other factors that could lead to clients drawing down existing loans, will lead to increased financed emissions in our portfolio. Based on Dealogic data, capital markets activity for the sector increased by more than 15% in 2024 compared with 2023. Oil and gas Mt CO 2 e 2023 progress from baseline (46) % Power and utilities For the power and utilities sector, our analysis included scope 1 and 2 emissions for upstream power generation, and diversified utilities power generation companies. We focused on power generation companies because they control sector output, which has the most material emissions impact in the real economy. Our baseline and progress figures reflect combined on-balance sheet financed and facilitated emissions. We target a combined on-balance sheet financed and facilitated emissions intensity of 138 tonnes of carbon dioxide equivalent per gigawatt hour (‘tCO 2 e/GWh’) by 2030. We have chosen an intensity-based target as electricity demand is expected to more than double by 2050, due to both population growth and electrification required to decarbonise mobility, buildings and industry. Our target is consistent with a global 1.5°C- aligned pathway, as defined by the IEA NZE 2021 scenario. We show in the chart our progress to date against our 2030 target. We also indicate the 2030 figure of 194.6 tCO 2 e/GWh derived from the updated IEA NZE 2024 scenario. In 2023, the combined on-balance sheet financed and facilitated emissions intensity in our portfolio decreased by 32% to 349.0 tCO 2 e/GWh relative to the 2019 baseline, and by 12% from 2022 to 2023. This reduction was driven by an increase in the financing of renewable energy projects and companies, and a decrease in the financing of high emissions intensity clients. Power and utilities tCO 2 e/GWh 2023 progress from baseline (32) % 52 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Financed emissions continued Cement For the cement sector, our analysis included scope 1 and 2 emissions for midstream companies with clinker and cement manufacturing facilities. We target an on-balance sheet financed emissions intensity of 0.46 tonnes of carbon dioxide equivalent per tonne of cement (‘tCO 2 e/t cement’) by 2030, using 2019 as our baseline. Our target is consistent with a global 1.5°C-aligned pathway, as defined by the IEA NZE 2021 scenario. We show in the chart our progress to date against our 2030 target. We also indicate the 2030 figure of 0.47 tCO 2 e/t cement derived from the updated IEA NZE 2024 scenario. While some emissions reductions can be achieved through energy efficiency, we believe that to significantly reduce fuel and process emissions from cement manufacturing, and to meet our targets, large-scale investments are required in new production processes and technologies, including clinker substitution, alternative fuel use such as bioenergy, and carbon capture use and storage. Carbon capture use and storage is a nascent technology and is currently applied at around 45 facilities worldwide with a capture capacity of roughly 50 MtCO 2 per year. This is short of IEA NZE scenarios, which lay out a pathway of around 1 Gt CO 2 per year captured and stored by 2030. Several cement sector customers are making progress in carbon capture use and storage and are launching their first carbon capture use and storage pilot projects. The 2023 emissions intensity of our portfolio, at 0.59 tCO 2 e/t cement, was 8% lower than the 2019 baseline. It was also down by 17% in 2023 from 2022. The decline in 2023 was mainly attributable to improvements in the availability of emissions and production data across a number of emissions-intensive clients. Emissions intensity trends are highly sensitive to material client exposures and changes to drawn balances year-on-year. Cement tCO 2 e/t cement 2023 progress from baseline (8) % Iron, steel and aluminium For the iron, steel and aluminium sector, we covered scope 1 and 2 for midstream iron, steel and aluminium production in our analysis. We intend to address our coverage of aluminium in future disclosures due to the low materiality in our portfolio, as well as volatility caused by the greater emissions intensity of aluminium production, compared to iron and steel. We target an on-balance sheet financed emissions intensity of 1.05 tonnes of carbon dioxide equivalent per tonne of metal (‘tCO 2 e/ t metal’) by 2030, using 2019 as our baseline. Our target is consistent with a global 1.5°C- aligned pathway for iron and steel, as defined by the IEA NZE 2021 scenario. Meeting the 2030 target will be technologically challenging as this is a particularly hard-to-abate sector. We show in the chart our progress to date against our 2030 target. We also indicate the 2030 figure of 1.29 tCO2e/t metal derived from the updated IEA NZE 2024 scenario, and of 1.43 tCO2e/t metal from the MPP Tech Moratorium scenario. The MPP Tech Moratorium scenario confines investments to near zero emissions technologies from 2030 onwards, and assumes no assets are prematurely retired. It projects a slower transition than IEA NZE scenarios in the near term due to the use of different assumptions for steel production, steelmaking technology mix, steel emissions intensity, and use of hydrogen in steelmaking. The emissions intensity of our portfolio in 2023 rose by 17% to 2.1 tCO 2 e/t metal against our 2019 baseline, due to aluminium sector exposures impacting the overall sector’s emissions intensity in 2023, and a low baseline figure resulting from a higher mix of low emissions-intensive steel clients. Emissions intensity dropped by 16% in 2023 versus 2022 due to the reduced exposure to aluminium clients, and a larger mix of low emissions-intensive clients. Iron, steel and aluminium tCO 2 e/t metal 2023 progress from baseline 17 % HSBC Holdings plc Annual Report on Form 20-F 53 Financed emissions continued Aviation For the aviation sector, we included passenger airlines’ scope 1 and aircraft lessors‘ scope 3 downstream emissions. We excluded military and dedicated cargo flights as the emissions intensity of such cargo flights is different to that of passenger airlines. This approach is in line with industry practice to ensure consistency of financed emissions measurement and target setting. We target an on-balance sheet financed emissions intensity of 63 tonnes of carbon dioxide equivalent per million revenue passenger kilometres (‘tCO 2 e/million rpk’) by 2030, using 2019 as our baseline. Our target is consistent with a global 1.5°C-aligned pathway, as defined by the IEA NZE 2021 scenario. We show in the chart our progress to date against our 2030 target. We also indicate the 2030 figure of 70.3 tCO 2 e/million rpk derived from the updated IEA NZE 2024 scenario. To meet our target, we believe the sector needs significant policy support, investments in alternative fuels, such as sustainable aviation fuel, and new efficient aircraft to reduce emissions. The adoption of sustainable aviation fuel is in its infancy, currently accounting for an estimated 0.3% of global jet fuel production. Sustainable aviation fuel use needs to increase to 15% by 2030 to be in line with the IEA NZE 2021. This requires a significant ramp-up of investment in production capacity and supportive policies, such as fuel taxes and low carbon fuel standards. The industry is also adopting the unit of revenue tonne kilometre (‘rtk’) to take into account the transport of cargo for airlines in- scope of the target. We plan to consider this unit change to rtk in future disclosures to better reflect the industry standard. We already include passenger and cargo tonnes in our production figures. In 2023, the emissions intensity of our portfolio fell by 5% to 79.6 tCO 2 e/million rpk relative to the 2019 baseline and was down by 12% from the 2022 restated emissions intensity. This decline was largely driven by improved data quality, higher exposure to lower emissions-intensive airlines compared with the sector average, and improved operational efficiency with the return to pre- Covid air traffic activity levels. Aviation tCO 2 e/million rpk 2023 progress from baseline (5) % Automotive For the automotive sector, we looked at scopes 1 and 2 for midstream manufacturing of vehicles, and scope 3 for tank-to-wheel exhaust pipe emissions for light-duty vehicles. We excluded heavy-duty vehicles from our analysis as the target pathway derived from the IEA excludes them, as they have a different decarbonisation pathway relative to light-duty vehicles. This approach reflects a change from previous disclosures to only include tailpipe emissions instead of all scope 3 categories, in order to be consistent with the target scenario reference pathway and industry practice. We will consider including heavy-duty vehicle manufacturers as well as heavy-duty vehicle production at a later stage of our analysis, as data and methodologies develop. We target an on-balance sheet financed emissions intensity of 66 tonnes of carbon dioxide equivalent per million vehicle kilometres (‘tCO 2 e/million vkm’) by 2030 using 2019 as our baseline. This is in line with a global 1.5°C-aligned pathway, as defined by the IEA NZE 2021 scenario, modified to match the share of new in-year vehicle sales for light-duty vehicles. We show in the chart our progress to date against our 2030 target. We also indicate the 2030 figure of 66.2 tCO 2 e /million vkm derived from the updated IEA NZE 2024 scenario, which remains close to the 2030 target figure of 66.0 under the 2021 scenario. Meeting our target is heavily dependent on the share of new electric vehicle sales our clients will achieve in 2030, including battery and plug-in electric vehicles. BloombergNEF estimates that the electric vehicle share of sales in 2024 exceeded 20%, however this is below the 27% implied by the IEA NZE 2021 scenario based on HSBC analysis. Achieving our 2030 financed emissions target will be challenging unless there is a strong acceleration in the share of electric vehicle sales. This will require large-scale investments in new electric vehicle and battery manufacturing plants, alongside widespread charging infrastructure, and government policies to support electric vehicles. The 2023 emissions intensity of our portfolio dropped by 20% to 152.4 tCO 2 e/million vkm against our 2019 baseline, and by 10% versus the restated emissions intensity of our portfolio for 2022, which excludes non- tailpipe scope 3 emissions. The decline against baseline was driven by changes in our loan book resulting primarily from credit-led business decisions. From 2022 to 2023, the reduction was driven by a portfolio mix with lower emissions intensity clients, and lower exposures to carbon-intensive clients. Automotive tCO 2 e/million vkm 2023 progress from baseline (20) % 54 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Financed emissions continued Thermal coal mining For the thermal coal mining sector, our analysis focused on scope 1, 2 and 3 emissions in upstream companies, including those involved in extraction. When calculating our financed emissions from thermal coal mining, we focused on thermal coal extraction and processing companies, and diversified mining companies. The majority of our reported financed emissions relate to scope 3 emissions associated with coal mining, representing financing provided to large conglomerates that own diversified business interests including coal. We have set a target to reduce our absolute on- balance sheet financed emissions by 70% by 2030, relative to the re-baselined 2020 figure of 4.7 million tonnes of carbon dioxide equivalent (‘Mt CO 2 e’). We used 2020 as a baseline to align with the baseline used for our drawn balance exposure targets in our thermal coal phase-out policy. Our target is consistent with a global 1.5°C-aligned pathway, as defined by the IEA NZE 2021 scenario. We show in the chart our progress to date against our 2030 target. We also indicate the 2030 figure of 2.7 Mt CO 2 e derived from the updated IEA NZE 2024 scenario, which suggests a 42% reduction relative to the re- baselined 2020 figure. In 2021, absolute on-balance sheet financed emissions decreased by 71% to 1.38 Mt CO 2 e relative to the re-baselined 2020 figure. In 2022, the absolute on-balance sheet financed emissions of our portfolio decreased by 69% to 1.44 Mt CO 2 e relative to the re- baselined 2020 figure, and they rose by 4% from 2021 to 2022. The reduction from the 2020 re-baselined figure was due to strategic decisions and temporary factors, such as low loan drawdown levels. A return to normal market conditions with clients drawing down existing loans will lead to increased financed emissions in our portfolio. Thermal coal mining Mt C O 2 e 2022 progress from baseline (69) % On-balance sheet financed emissions The table below summarises the results of our assessment of on-balance sheet financed emissions using 2022 and 2023 data. For thermal coal mining, we disclosed in 2023 our 2020 baseline, which has been re-baselined as described on page 49 , and we now present figures for 2021 and 2022. The PCAF data quality scores across most sectors improved in 2023 due to better data availability. On-balance sheet financed emissions – wholesale credit lending and project finance 1,2 Sector Year Scope 1–2 (Mt CO 2 e) Scope 3 (Mt CO 2 e) Emissions intensity PCAF data quality score 3 Scope 1 and 2 Scope 3 Oil and gas 2022 1.3 16.2 N/A 3.2 3.2 2023† 1.6 15.2 N/A 2.4 2.7 Power and utilities 2022 7.6 N/A 401.7 3.3 N/A 2023† 7.3 N/A 349.6 3.1 N/A Cement 2022 4.5 N/A 0.71 2.9 N/A 2023† 6.3 N/A 0.59 2.3 N/A Iron, steel and aluminium 2022 2.7 N/A 2.5 3.0 N/A 2023† 1.8 N/A 2.1 2.9 N/A Aviation 2022 3.3 0.15 90.2 3.2 2.4 2023† 2.6 0.21 79.6 3.1 2.6 Automotive 2022 0.11 4.0 170.1 2.7 3.4 2023† 0.12 6.0 152.4 2.2 3.2 Thermal coal mining 2021† 0.05 1.33 N/A 3.1 3.1 2022† 0.07 1.37 N/A 3.1 3.1 Facilitated emissions The table below summarises the results of our assessment of facilitated em issions using 2022 and 2023 data for the oil a nd gas, and the power and utilities sectors. Applying a 100% weighting, the oil and gas values for scope 1 to 3 emissions decreased from 15.2 Mt CO 2 e in 2022 to 9.0 Mt CO 2 e in 2023. For the power and utilities sector, the values for scope 1 and 2 emissions rose from 3.8 Mt CO 2 e in 2022 to 4.6 Mt CO 2 e in 2023. For all 100%- weighted facilitated values, please refer to the ESG Data Pack 4 . Facilitated emissions – ECM, DCM and syndicated loans (33% weighting) Sector Year 4 Scope 1-2 (Mt CO 2 e) Scope 3 (Mt CO 2 e) Emissions intensity PCAF Data quality score 3 Scope 1 and 2 Scope 3 Oil and gas 2022 0.36 4.7 N/A 3.3 3.3 2023† 0.27 2.7 N/A 2.1 2.5 Power and utilities 2022 1.2 N/A 358.7 2.9 N/A 2023† 1.5 N/A 322.2 2.6 N/A 1    The total amount of short-term finance excluded for the thermal coal mining sector was 0.04% and 0.1% of total loans and advances to customers at 31 December 2021 and 31 December 2022 respectively; in 2023, for all other sectors, it was 0.7% of total loans and advances to customers at 31 December 2023. 2    The total loans and advances analysed for the thermal coal mining sector were 0.1% of total loans and advances to customers at 31 December 2021 and 31 December 2022, respectively. For all other sectors in 2023, the total loans and advances analysed were 2.7% of total loans and advances to customers at 31 December 2023. The total loans and advances analysed for the purpose of the financed emissions calculation and reporting have not been adjusted for assets held for sale. 3    PCAF scores where 1 is high and 5 is low. This is a weighted average score based on financing for on-balance sheet financed emissions. 4    The total capital markets activity analysed applying a 100% weighting in 2023 was $10.4.bn, representing 3.3% of capital markets activity at 31 December 2023. †    Data is subject to independent third-party limited assurance in accordance with ISAE 3000 / ISAE 3410. For further details, see our Financed Emissions and Thermal Coal Exposures Methodology and the independent third-party limited assurance report, which are available at www.hsbc.com/who-we-are/esg-and-responsible- business/esg-reporting-centre. HSBC Holdings plc Annual Report on Form 20-F 55 Financed emissions continued Reducing emissions in our assets under management HSBC Asset Management continues to work towards its interim target 1 of reducing scope 1 and 2 financed emissions intensity by 58% between 2019 and 2030 for its in scope assets under management (AUM), consisting of listed equities and corporate fixed income managed within its major investment hubs. As of 31 December 2019, in scope assets amounted to $193.9bn, equating to 38% of global AUM. 2019 re-baselined metrics In 2024, we improved our methodology for calculating financed emissions intensity, including a revised mapping logic for issuers’ carbon intensity and EVIC (enterprise value including cash) data. We have re-baselined our 2019 intensity figure due to an error in the data mapping and it is now 124 tCO 2 e/M$ invested versus 131 tCO 2 e/M$ invested reported in the Annual Report and Accounts 2022, representing a decrease of 5.6%. The Partnership for Carbon Accounting Financials (PCAF) 2 recommends that financial institutions should, in line with the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard requirement, establish a restatement policy to ensure consistency, comparability and relevance of the reported greenhouse gas emissions data over time. HSBC Asset Management has defined an internal financed emissions re-baseline and restatement framework which adapts HSBC Group’s approach and defines relevant circumstances for HSBC Asset Management. Our financed emissions metrics As at 31 December 2023, the scope 1 and 2 financed emissions intensity of HSBC Asset Management’s in scope assets stood at 69.8 tCO 2 e/ M$ invested. The PCAF data quality score for our 31 December 2023 financed emissions intensity was 2.63. Reported metrics 3 2019 2023 Unit Scope 1 and 2 financed emissions intensity 124.0* 69.8 tCO 2 e/M$ invested AUM in scope 193.9 223.0 Billions $ PCAF Data Quality Score 2.63 2.63 *indicates that this metric has been re-baselined 1 Our targets remain subject to consultation with stakeholders including investors and fund boards on whose behalf we manage the assets. The 58% target is based on assumptions for financial markets and other data, including the IEA Net Zero emissions by 2050 scenario and its underlying activity growth assumptions. Carbon emissions intensity is measured as tonnes of carbon dioxide equivalent per million USD invested (t CO 2 e /M$ invested), where emissions are scaled by enterprise values including cash. 2    PCAF defines and develops greenhouse gas accounting standards for financial institutions. Its Global GHG Accounting and Reporting Standard for Financed Emissions provides detailed methodological guidance to measure and disclose financed emissions. PCAF Standards are available at: https:// carbonaccountingfinancials.com/standard. 3 The re-baselined 2019 financed emissions intensity metric, and 2023 metrics were subject to independent third-party limited assurance in accordance with the International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’, and with respect to the greenhouse emissions, in accordance with the International Standard on Assurance Engagements 3410 ‘Assurance Engagements on Greenhouse Gas Statements’, issued by the International Auditing and Assurance Standards Board. For the independent third-party’s limited assurance report, see http://www.assetmanagement.hsbc.com/net-zero. The methodology used is available at: http://www.assetmanagement.hsbc.co.uk/-/media/files/attachments/ common/creating-a-new-climate-for-change/financed-emissions-disclosures-reporting-criteria.pdf. 56 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Net zero in our own operations TCFD As described on page 18 , we have revisited our ambition to achieve net zero in our own operations and supply chain by 2030 and are now focused on actions to cut emissions across these areas as part of our overall ambition to become net zero by 2050. Reduce, replace and remove Our guiding approach is, and will continue to be to reduce, replace and remove emissions from our own operations and supply chain. We plan to first focus on reducing carbon emissions from consumption , and then replace remaining emissions with low-carbon alternatives in line with the Paris Agreement. We will reduce emissions through the purchase of 100% renewables and plan to add investments in sustainable aviation fuel to replace traditional fuel and reduce emissions from our travel over time. Altogether, across our operations, business travel and supply chain, we expect to achieve a reduction of around 40% in emissions by 2030. In line with current guidance, we expect to only use carbon credits to remove emissions when it is not possible to directly reduce or replace. However, recognising the importance of high quality carbon removals in limiting global temperature rises, we have started to explore some high integrity carbon removal projects . Our energy consumption In 2024 we achieved a 30.5% reduction in our energy consumption compared with 2019 (2023: 26.3% ). This has been achieved through optimising the use of our real estate portfolio and carrying out a reduction in our office space and data centres. We continue to optimise our assets to ensure greater efficiency and capitalise on new energy technologies. In 2024 we increased our purchase of electricity from renewable sources to 75.4% from 58.4% in 2023. This included increasing our coverage of green tariffs in India and mainland China. Renewable electricity can help unlock our emissions reduction potential, and we aim to achieve 100% renewable electricity across our own operations by 2030. Our biggest challenge continues to be the limited availability of power purchase agreements and green tariffs in some of our markets due to regulations. We continue to expand our network of experts in the renewables space to help us identify opportunities globally. Business travel We have analysed our travel patterns to identify areas where we can continue to reduce emissions. For example, we have introduced internal regional reduction targets and emission information at the point of booking to encourage ownership and flexibility in decision making. Engaging with our supply chain Our supply chain contributes c.81% of our operational emissions and is the area in which we face the most significant decarbonisation challenge. When we set our ambition in 2020, we did so without detailed supply chain data. It has become clear that progress in reducing emissions in our supply chain is proving slower than we anticipated, mainly driven by the slower pace of the transition across the real economy. Many suppliers are still in the early phase of their decarbonisation journey , do not have sufficient insight into their own emissions footprint, and have not set decarbonisation targets. We have stepped up targeted efforts to support decarbonisation across our supply chain. We aim to deepen collaboration with suppliers and increase our focus on those without public disclosures or emissions reduction plans, supporting them through education and incentivisation. We will build partnerships with larger suppliers to drive change in shared supply chains through scaled solutions, including through industry initiatives. In 2024 we incorporated an additional supply chain data source to complement data from CDP (formerly the Carbon Disclosure Project). We continue to improve the measurement, quality and reporting of our supply chain emissions data to generate insights to drive targeted reduction activities. We have engaged with our 300 highest-emitting suppliers to collaborate and identify emissions reduction opportunities based on supplier maturity levels. In October 2024 we convened our first Supply Chain Decarbonisation Day to facilitate in-depth discussion and the development of joint action plans with some of our largest suppliers in the technology, professional services and real estate sectors, to help drive emissions reduction. In 2025, we will hold a similar event with different suppliers. Focus on natural resources We aim to be a responsible consumer of natural resources across our operations and supply chain. Wherever possible, through our procurement choices, design and construction, or operations, we aim to protect the environment and mitigate our impact on the depletion of natural resources. Our main focus areas are waste, paper and sustainable diets. Our presence in environmentally sensitive areas Our global portfolio of buildings supports customers and communities in areas that may be of high or very high water stress, and/ or protected areas of biodiversity. About 50 % of our global offices, branches and data centres are located mainly in urban or city centre locations with large, concentrated populations. These areas have been identified as being subject to high and very high water stress, accounting for 49 % of our annual water consumption and about 0.8 % are in protected areas of biodiversity. We have implemented consumption reduction measures, including installation of water efficient taps, flow restrictors, auto- taps and low or zero flush sanitary fittings. Our environmental and sustainability management policies Our buildings policy recognises that regulatory and environmental requirements vary across geographies and may include environmental certification. The policy is supported by Corporate Services procedures on environmental and sustainability management, seeking to ensure that HSBC’s properties continually reduce their overall direct impact on the environment. Detailed design considerations documented in our global engineering standards aim to reduce or avoid depletion of critical resources, such as energy, water, land and raw materials. Suppliers are required to comply with our Supplier Code of Conduct and have in place environmental policies appropriate to the size and nature of their operations to reduce environmental impacts. HSBC Holdings plc Annual Report on Form 20-F 57 Net zero in our own operations continued Energy and travel greenhouse gas emissions in tonnes CO2e 3 2024 2023 2019 baseline Scope 1 1 Ä 15,025 16,918 22,066 Scope 2 (market-based) 1 Ä 83,760 167,174 392,270 Scope 3 ~ 1,127,909 1,113,498 1,356,631 Category 1: Purchased goods and services 1,2 Ä 866,873 880,494 1,033,972 Category 2: Capital goods 1,2 ~ 127,158 123,763 50,651 Category 6: Business travel 1 ~ 133,878 109,241 272,008 Total Ä 1,226,693 1,297,590 1,770,967 Included Scope 1 and 2 of UK Ä 5,887 5,909 10,432 1    Data in 2024 is subject to an independent third-party limited assurance in accordance with the International Standard on Assurance engagements 3410 (Assurance Engagements on Greenhouse Gas Statements). For further details, see GHG Reporting Guidance 2024 and third-party limited assurance report at www.hsbc.com/who-we-are/esg-and-responsible-business/esg-reporting-centre. In respect of data in 2019 and 2023, see our relevant Annual Report and Accounts. 2    Supply chain emissions are calculated using a combination of supplier emissions data and industry average emissions factors. A data quality score is applied to this calculation where 1 is high and 4 is low, based on the quality of emissions data. This is a weighted average score based on HSBC supplier spend. Data quality scores can be found in the ESG Data Pack. 3    Data is based on the 12-month period to 30 September. For further details of our methodologies, our independent third-party limited assurance reports and relevant environment key facts, see our ESG Data Pack at www.hsbc.com/esg. 2024 Emissions performance We are making progress towards our updated 2050 net zero ambition. In 2024 we achieved a reduction in absolute operational greenhouse gas emissions (energy and business travel) of 66.1% from our 2019 baseline. Overall, including supply chain emissions, we achieved a 30.7% reduction against 2019 and 5.5% compared with 2023. Emissions from our energy We are currently on track to reduce our scope 1 and 2 emissions by more than 90% by 2030 compared with our 2019 baseline. In 2024, we reduced these emissions (including energy and road fleet) to 98,785 tonnes CO2e, representing a 76.2% reduction from our 2019 baseline and a 46.3% reduction from 2023, helped by further efficiency measures and portfolio reductions, and an increase in renewable electricity procurement to 75.4% , up from 58.4% in 2023. Emissions from travel We reduced our emissions from scope 3 business travel by 50.8% compared with 2019 with travel volumes remaining well below pre-pandemic levels, although emissions increased by 22.6% compared with 2023 as travel behaviours normalise gradually across the bank. Emissions from our supply chain In 2024, we reduced our supply chain emissions by 8.4% against the restated 2019 baseline emissions, while compared with 2023, they remained relatively stable, with a small reduction of 1.0% . This was mainly driven by suppliers providing real estate-related services and financial services, while emissions from suppliers of technology-related goods and services have increased, due to an increase in their investments (e.g. data centres), growth of new services (e.g. cloud and AI) and increase in our spend. In 2024 we also expanded the calculation scope by including two additional markets with third party spend. We continue to widen our reporting as more emissions and spend data are added to the procurement scope. Emissions calculations approach Our emissions report adheres to the Greenhouse Gas (‘GHG’) Protocol, which incorporates the scope 2 market-based emissions methodology. We report GHG emissions associated with the energy used in our premises and employees’ business travel and our supply chain in tonnes of CO2 equivalent. As a financial services organisation, carbon dioxide is the main type of GHG applicable to our operations, however, our current reporting also incorporates methane and nitrous oxide for completeness, although deemed immaterial. Based on our operational control boundary, in 2024 we collected data on energy use and business travel for our operations in 34 countries and territories out of the 58 markets we operate in, which accounted for approximately 97.7% of our full-time equivalent staff (‘FTEs’). To estimate the emissions of our operations in entities where we have operational control and a small presence, we scale up the emissions to 100%. Greenhouse gas emissions in tonnes CO2e per FTE Energy consumption in kWh in 000s 2024 2023 2019 2024 2023 2019 Scope 1, 2 and 3 (Category 6) Ä 1.1 1.3 2.9 Total Ä 728,890 772,736 1,049,072 Scope 1, 2 and 3 (Category 1, 2 and 6) Ä 5.7 5.9 7.8 UK only Ä 206,028 209,939 281,271 Revisions Reporting metrics Previously reported Restated metrics Percentage change 2019 2023 2019 2023 2019 2023 Category 1: Purchased Goods and Services tonnes CO2e 829,635 859,256 1,033,972 880,494 25 % 2 % Category 2: Capital Goods tonnes CO2e 37,617 121,783 50,651 123,763 35 % 2 % Total Supply chain tonnes CO2e 867,252 981,039 1,084,623 1,004,257 25 % 2 % Energy consumption kWh in 000s 913,556 n/a 1,049,072 n/a 15 % n/a W e apply reviewed and updated emission uplift rates to reflect uncertainty concerning the quality and coverage of emission measurement and estimation. This approach is consistent with both the Intergovernmental Panel on Climate Change’s Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Inventories and our internal analysis. Our calculation methodology for supply chain emissions follows the spend-based method under the GHG protocol; a combination of supplier emissions data and industry averages. We source actual data via CDP, or direct engagement with suppliers, and in the absence of this we use estimations from a new data provider and then industry average carbon intensities from CDP to estimate supply chain emissions. As more of our suppliers report their emissions, we should be able to include more accurate data and fewer industry averages in the calculation. We have applied a data quality score to the sources of data we used to determine counterparty emissions. For further details, see our GHG Reporting Guidance at www.hsbc.com/esg In 2024 we conducted a materiality assessment on upstream scope 3 categories, and we have identified categories 1 (purchased goods and services), 2 (capital goods), and 6 (business travel) as material. Our approach to re-baselines and restatements We re-baselined our 2019 and restated our 2023 supply chain metrics in line with our emissions re-baseline and restatement policy (see page 49 ). As referenced above, in 2024, we made the decision to amend the methodology. We also identified an error in the mapping of industry averages. In addition, we have identified an error in our 2019 metric disclosed in our ARA 2023 for total energy consumption, which we have now restated. We are conducting a review of our controls related to these items and aim to enhance them accordingly. 58 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Managing climate risk TCFD Climate risk relates to the financial and non- financial impacts that may arise as a result of climate change and the move to a net zero economy. We manage climate risk across all our businesses and are incorporating climate considerations within our traditional risk types in line with our Group-wide risk management framework. Our material exposure to climate risk relates to wholesale and retail client financing activity within our banking portfolio. We are also exposed to climate risk in relation to asset ownership by our insurance business and employee pension plans. Our clients are exposed to climate-related investment risk in our asset management business. In the table below, we set out our duties to our stakeholders in our four most material roles. For further details of our approach to climate risk, see ‘ESG risk’ on page 150 and ‘Climate risk’ on page 249 . Banking We manage the climate risk in our banking portfolios through our risk appetite and policies for financial and non-financial risks. Employee pensions Our pension plans have fiduciaries to manage climate risk in line with their duties towards members under local regulatory requirements. Asset management Climate risk management is a key feature of our investment decision making and portfolio management approach. Insurance We consider climate risk in the management of our shareholder and policyholder portfolio of assets. Climate risk This enables us to identify opportunities to support our customers, while continuing to meet stakeholder expectations. We monitor climate risk exposure internally for our largest plans based on asset sector allocation and carbon emissions data where available. We also engage with companies on topics related to climate change. ESG factors are incorporated into investment analysis to evaluate climate risk impacts, as well as the ongoing monitoring during the investment cycle. Banking Our banking business is well positioned to support our customers managing their own climate risk through financing. For our most material wholesale customers, we use our transition engagement questionnaire to understand clients’ climate strategies and risks. We have set out a suite of policies to guide our management of climate risk. We continue to develop our climate risk appetite and metrics to help manage climate exposures in our wholesale and retail portfolios. We use climate scenario analysis to gain insights into the long-term effects of transition and physical risks across our wholesale and retail portfolios (for further details, see page 253 ). Asset management HSBC Asset Management recognises that climate-related risks may impact the operational and financial performance of investee companies. The impact of these risks will vary depending on characteristics such as asset class, sector, business model and geography. HSBC Asset Management continues to integrate climate analysis into its actively managed product offerings and seeks to assess climate-related risks that could impact investment performance, where applicable and relevant . As part of its stewardship activities, HSBC Asset Management engages on climate change issues with investee companies on a priority list, as defined in its Stewardship Plan. HSBC Asset Management makes independent engagement decisions in the interests of its clients. Employee pensions The Trustee of the HSBC Bank (UK) Pension Scheme (‘the Scheme’), our largest plan with $34bn of assets under management, aims to achieve net zero greenhouse gas emissions across its defined benefit and defined contribution assets by 2050. To help achieve this, it is targeting an interim emissions reduction of 50% by 2030, from 2019 levels, for its equity and corporate bond mandates. This commitment was made in the context of wider efforts to manage the impact of climate change on the Scheme’s investments and the consequent impact on the financial interests of members. The Scheme reports its carbon emissions for its equity and corporate bond mandates in its annual TCFD Report and will seek to widen the coverage of its assessment and reporting over time. In line with the Trustee’s commitment to good stewardship, the Trustee engages its asset managers to ensure that financially material ESG risks are explicitly considered in the investment process. Insurance In 2024, our Insurance business enhanced our stress testing modelling capability to assess the solvency resilience of our Insurance entities under prescribed climate scenarios. For further details of the HSBC Asset Management’s Stewardship Plan, see: www.assetmanagement.hsbc.co.uk/en/ institutional-investor/about-us/responsible- investing/-/media/files/attachments/uk/policies/ stewardship-plan-uk.pdf For further details of the HSBC Bank (UK) Pension Scheme’s annual TCFD statements and UK Stewardship Code submission, see https:// futurefocus.staff.hsbc.co.uk/active-dc/ information-centre/search-documents HSBC Holdings plc Annual Report on Form 20-F 59 Sustainability risk policies TCFD Our sustainability risk policies form part of our broader risk management framework and are important mechanisms for managing risks, including delivering our net zero ambition. These policies focus on mitigating reputational, credit, legal and other risks related to our customers’ environmental and social impacts. Our policies Our sustainability risk policies comprise our core net zero-aligned policies – thermal coal phase-out and energy – and our broader sustainability risk policies covering: agricultural commodities, forestry, mining and metals, and World Heritage Sites and Ramsar-designated wetlands. We also apply the Equator Principles when financing relevant projects . These policies aim to provide clear signals to our customers on our risk appetite for certain activities . We continue to review policy implementation as we apply our sustainability risk policies in practice, and our operationalisation of such policies continues to be enhanced. We take a risk-based approach when identifying transactions and clients to which our sustainability risk policies apply and, where relevant, when reporting on relevant exposures, adopting approaches proportionate to risk and materiality. This helps to focus our efforts on areas where we believe we can help drive meaningful change, while taking into account experience from policy implementation over time. We regularly review our policies, incorporating feedback and building on experience from policy implementation over time . We have begun a review of our interim financed emissions targets and associated policies as part of the annual review of our net zero transition plan that we referenced in our 3Q24 earnings release in October. For clients in scope of our sustainability risk policies, where we identify activities that could cause material negative impacts, we expect clients to demonstrate that they are identifying and mitigating risks responsibly and will look to take required actions as outlined in our policies. This may, as appropriate, include conducting enhanced due diligence or applying financing restrictions. Such instances may require additional review and approval by our sustainability risk specialists and risk committees. For further details of how we manage sustainability risk, as well as our full policies, see www.hsbc.com/who-we-are/esg-and- responsible-business/managing-risk/ sustainability-risk Governance and implementation Our Group Risk and Compliance function has specialists who review and support implementation of our sustainability risk policies. Our relationship managers are primarily responsible for assessing relevant considerations under our risk management framework, including whether our clients may be in scope of applicable sustainability risk policies . They are supported by sustainability risk managers for management of risks as outlined in the policies. Where considered appropriate, policy matters are escalated to relevant governance committees. Oversight of the development and implementation of policies is the responsibility of relevant governance committees comprising senior members of the Group Risk and Compliance function and global businesses. Biodiversity and natural capital-related policies Our sustainability risk policies impose restrictions on certain financing activities that may have material negative impacts on nature. Our forestry and agricultural commodities policies focus specifically on the upstream impacts of key agricultural commodities including palm oil, timber, soy and cattle. We also require palm oil customers to obtain certification under the Roundtable on Sustainable Palm Oil . Our energy policy Our energy policy covers the broader energy system, including upstream oil and gas, fossil fuel power generation, hydrogen, renewables and hydropower, nuclear, biomass and waste-to-energy sectors. The policy seeks to balance three objectives: driving down global greenhouse gas emissions; enabling an orderly transition that builds resilience in the long term; and supporting a just and affordable transition, recognising the local realities in all the communities we serve. The energy policy was first published in December 2022, and is reviewed annually, with the most recent update in February 2025. For further details of our oil and gas, and power and utilities financed emissions targets, see the 'Targets and progress’ section in ‘Financed emissions on page 50 . For further details of our energy policy, see www.hsbc.com/who-we-are/esg-and- responsible-business/managing-risk/ sustainability-risk. 60 HSBC Holdings plc Annual Report on Form 20-F ESG review | Environment Sustainability risk policies continued Our thermal coal phase-out policy As set out in the thermal coal phase-out policy, we are committed to phasing out the financing of thermal coal-fired power and thermal coal mining in EU and OECD markets by 2030, and globally by 2040 . Our policy aims to support thermal coal phase-out aligned to science-based timeframes, recognising the different pace between advanced and emerging economies. In turn, our policy supports progress towards our financed emissions targets for the power and utilities and thermal coal mining sectors. The policy was first published in December 2021 and is reviewed annually, with the most recent update in February 2025. For further details of our oil and gas, power and utilities financed emissions target, see the ‘Targets and progress’ section in ‘Financed emissions’ on page 50 . For our thermal coal phase-out policy, see www.hsbc.com/-/files/hsbc/our-approach/risk- and-responsibility/pdfs/240125-hsbc-thermal- coal-phase-out-policy.pdf. Thermal coal financing exposures We aim to reduce thermal coal financing drawn balance exposure from a 2020 baseline by at least 25% by 2025, and aim to reduce it by 50% by 2030. Our basis of preparation for reporting on thermal coal financing drawn balance exposures is aligned with our thermal coal phase-out policy and applies a risk-based approach to reporting on relevant exposures. This includes the use of globally recognised third-party data sources to screen clients and applies materiality considerations to product type, customer type and exposure type, which informs inclusion and exclusion requirements. Specifically, for product types, short-term lending exposures are excluded from our thermal coal financing exposures reporting, in line with our financed emissions methodology. For customer types, exclusions are applied for certain customer types such as sovereigns and individuals. For exposure types, a threshold of $15m for drawn balances is applied for thermal coal financing exposures reporting. We recognise that we provide financing to groups of connected companies where the wider group has thermal coal exposures, and this introduces additional complexities when estimating thermal coal exposure. In such cases, we consider the nature and the extent of the connections and any restrictions on use of financing proceeds to fund the thermal coal activities. We continue to refine our basis of preparation and have made further enhancements in 2024 while taking into account experience from policy implementation over time. Applying our refined basis of preparation did not have a material impact on the thermal coal financing drawn balance exposure as of 31 December 2020. For further details of our Financed Emissions and Thermal Coal Exposures Methodology, see www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre. The chart below sets out our thermal coal financing drawn balance exposure for the 2020 baseline as well as the exposure figures for 2021 † and 2022 † , which were $1bn (rounded). We continue to work on our 2023 and 2024 numbers and expect to report on these in future disclosures. Thermal Coal Financing drawn balance exposure 1 $bn 1 The reduction is based on estimated underlying numbers aligned to our refined basis of preparation. † Data is subject to independent third-party limited assurance, in accordance with ISAE 3000/ISAE 3410. For further details, see our Financed Emissions and Thermal Coal Exposures Methodology and independent third-party limited assurance report, which are available at www.hsbc.com/who-we-are/esg-and- responsible-business/esg-reporting-centre. For further details of our approach to financed emissions, see ’Our Approach to financed emissions’ on page 46 . Asset Management policy HSBC Asset Management’s Energy and Thermal Coal Policies have been developed in support of HSBC Group’s net zero ambition. In its capacity as a discretionary investment manager and under its Energy Policy, HSBC Asset Management engages and assesses the transition plans of oil and gas, and power and utilities issuers responsible for around 70 per cent of relevant emissions based upon all listed equity and corporate fixed income managed within its major investment hubs. Its Thermal Coal Policy is developed in support of the transition from thermal coal- fired power and thermal coal mining (collectively ‘thermal coal’) within the 2030/40 timelines set out in the HSBC Thermal Coal Phase-Out Policy, and is intended to help meet the dual objectives of phasing out thermal coal within science-based timeframes and of energy transition in more coal-reliant economies. The Energy Policy and Thermal Coal Policy complement one another and are reviewed at least annually. For further details of the energy policy, see www.assetmanagement.hsbc.co.uk/-/media/ files/attachments/common/energy-policy-en.pdf. For further details of the thermal coal policy, see www.assetmanagement.hsbc.co.uk/-/media/ files/attachments/common/coal-policy-en.pdf. HSBC Holdings plc Annual Report on Form 20-F 61 Social Building inclusion and resilience We play an active role in opening up a world of opportunity for our customers, colleagues and communities by connecting across our international networks to help build a more inclusive and resilient society. At a glance Inclusion is key to opening up a world of opportunity. It involves a commitment to identifying and addressing barriers that may stop people from accessing opportunities because of who they are or where they are from. Inclusion goes hand in hand with resilience. We aim to help people build the capabilities they need to achieve their goals and to deal with the challenges they face, so we are focused on delivering products, services and education that support our colleagues, customers and communities. Colleagues We believe that an inclusive, healthy and rewarding workplace helps the whole Group succeed. We are focused on inclusive hiring so we can help ensure our colleagues – and particularly our leadership – are representative of the communities we serve . Employee well-being is essential. We offer all colleagues a wide range of resources that help support their mental, physical and financial well-being so they can thrive in and out of work. We are working to ensure that our offices, branches and digital spaces are accessible. Customers We are committed to helping our customers access the financial services they need. They should not find it more difficult to access finance because of their gender, ethnicity, sexual orientation, neurodiversity or disability. Our ambition is to create a welcoming, inclusive and accessible banking experience for all our customers . We build resilience by creating products and services that simplify the banking experience, so customers can manage their wealth more easily. We also provide financial education for our customers. Communities In 2024, we updated our global philanthropy strategy to align with our ESG areas of focus – ‘transition to net zero’ and ‘building inclusion and resilience’, allowing us to work alongside the communities we operate within to help create change. We believe that fostering inclusion and building resilience helps us to create long-term value and growth. By removing unnecessary barriers and striving to be a fair and equitable organisation, we can attract and retain the best talent, support a wider customer base to achieve their goals and stimulate growth in our communities. In this section Our commitment to inclusion Our approach to inclusion We value diversity of thought and we are building an inclusive environment that reflects our customers and communities. Page 62 Fostering a diverse environment Page 63 Fostering an inclusive culture Page 64 Building a healthy workplace Listening to our colleagues We run a Snapshot survey and report insights to our Group Operating Committee and the Board. Page 65 Being a great place to work We aim to create a great workplace that will help in attracting, retaining and motivating our colleagues so they can deliver for our customers across countries and territories. Page 66 Developing skills, careers and opportunities Learning and skills development We energise our colleagues for growth and build resilience by equipping them with skills that they need today and preparing them to meet future challenges. Page 68 Building customer inclusion and resilience Our approach to customer inclusion and resilience We aim to support financial well-being and remove barriers customers can face in accessing financial services. Page 69 Engaging with our communities Helping to build a more inclusive and resilient society We focus on a number of priorities where we can make a difference to the community and support sustainable growth. Page 70 62 HSBC Holdings plc Annual Report on Form 20-F ESG review | Social Our commitment to inclusion Our approach to inclusion Our purpose, ‘Opening up a world of opportunity’, explains why we exist as an organisation and is the foundation of our global inclusion strategy. We have identified specific Group-wide priorities, which we track and monitor progress against. Embracing our unique international footprint, we adapt implementation of our global inclusion strategy to help ensure it remains locally relevant and compliant with local laws. How we hold ourselves to account We set strategic priorities Our strategic priorities are aligned to three public aspirational ambitions, which have been created to increase representation of under-represented groups. In 2024, we continued to make progress against our priorities by: – achieving a 34.6% r epresentation of women in senior leadership roles, with an ambition of achieving 35% by 2025 1 ; – attaining a 3.0% representation of Black heritage colleagues in senior leadership in the UK and US combined, against an ambition to achieve 3.4% by 2025 1 ; and – increasing our Inclusion index as measured in our Snapshot survey, to 78% against a 2024 target of 75%. 1 These numerical ambitions do not form part of any US-based senior leader performance or other objectives, or in other jurisdictions where application of such should not apply under local law. We monitor progress We consistently track and measure performance against our priorities, utilising our data capabilities to accurately monitor progress through: – an inclusion dashboard, which monitors progress against ambitions and is reported to the Group Operating Committee on a quarterly basis; and – review meetings between our Head of Inclusion and each Group Operating Committee member to discuss progress against aspirational ambitions and to support further progress. We are transparent We are transparent in sharing our data through external disclosures and we participate in benchmarking to measure our progress across the industry. In 2024, we: – ranked as a Top 75 employer in the UK Social Mobility Index, improving 30 places to number 37; – ranked number 3 in the Stonewall Workplace Equality Index in the UK and maintained our Stonewall Gold standard; and – were awarded an Ambassador Status by Carers UK. We are evidence-led Our priorities are informed by data, and we continue to enable our colleagues to self-identify across a range of data points that reflect their personal identity, including ethnicity, sexual orientation, gender identity and ability. We have enabled our colleagues to self-identify through our systems and our Snapshot survey, helping us to understand the diverse composition of our global workforce. Data availability enables us to embrace our international footprint, set locally-relevant priorities, support under-represented groups and improve outcomes for our colleagues. In countries and territories where we are able to do so, we invite colleagues to share their data with us. In 2024, we enabled 93% of our colleagues to disclose their ethnic background, with 67% of colleagues currently choosing to do so, where this is legally permissible . In certain markets we invite colleagues to share additional characteristics with us, for example, disability or socio-economic background. For further details of our representation data, pay gap data, and actions, see www.hsbc.com/who-we-are/our-people/inclusion-at-hsbc and the ESG Data Pack at www.hsbc.com/esg. HSBC Holdings plc Annual Report on Form 20-F 63 Fostering a diverse environment Women in senior leadership Increasing female representation in our senior leadership roles is one of our longest- standing strategic priorities. Since achieving our ambition of having 30% of senior leadership positions held by women in 2020, we set a new ambition to reach 35% by 2025 1 . We are on track to meet our 2025 ambition, with 34.6% of senior leadership roles held by women at the end of 2024. Our hiring practices are merit-based, and we seek to ensure that every candidate, regardless of their identity and background, has an equal opportunity to demonstrate their skill and potential. A total of 36.8% of all external appointments into senior positions were female, compared with 37.7% in 2023. Women represented 38.0% of all promotions into senior leadership roles in 2024. In 2024, we relaunched our Accelerating Women’s Leadership programme, developed in partnership with Cranfield Business School. The programme aims to strengthen our talent pipeline by improving the representation of women in senior leadership roles. It is designed to increase the visibility, career advocacy and network of our high-performing senior women, ultimately driving engagement and enhancing leadership capability. In 2024, we ran two pilot sessions held in the UK and Hong Kong. We also launched a modified version of the programme in a US pilot called Accelerating Enterprise Leaders, which also welcomes our male colleagues. O ur Coaching Circles programme, which matches senior leaders with a small group of colleagues to provide advice and support on the development of leadership skills and network building, welcomed 4,052 women and 4,103 men in 2024. Black colleagues in senior leadership Having a workforce that better reflects the communities we serve remains one of our strategic priorities. We have an ambition to increase our Black heritage senior leader representation in both the UK and US combined to 3.4% by 2025 1 . In 2024 we maintained our position at 3.0% . Previously in 2020, we set our initial ethnicity ambition to double the number of Black colleagues in senior leadership roles globally by 2025 1 . While this ambition was not tracked through our senior leadership performance scorecards, it remained a strategic priority. Since 2020, we have increased the representation of our Black colleagues in senior leadership by 60%. We have seen a number of changes to the global footprint of our business since setting this ambition, and despite our efforts so far, we are not making the progress towards our ambition as quickly as we would like and we are unlikely to achieve our 2020 ambition by 2025. We remain committed to focusing on the development of our Black heritage colleagues. To address this, we use the Solaris programme as a development initiative for our UK-based Black heritage women. To date, 41 women have completed the programme, with 20% of participants securing a promotion. Our immersive development programme, ‘In Their Shoes’ was designed to bring to life the lived experiences of minority ethnic colleagues, including the challenges they face. In 2024, the programme was recognised as an Outstanding Innovation at the Learning Excellence Awards and was highly commended in the Global Diversity Initiative of the Year category at the British Diversity Awards. Since its launch,12,707 colleagues have completed the programme. 1 These numerical ambitions do not form part of any US-based senior leader performance or other objectives, or in other jurisdictions where application of such should not apply under local law. Gender representation Holdings Board Group Executives Combined Group Executives and reports 1 Subsidiary directors 2 Senior leadership 3 Middle management 3 Junior management 3 All employees 1 Combined Group Executives and direct reports includes HSBC Group Executives and their direct reports (excluding administrative staff) as of 31 December 2024. 2 Directors (or equivalent) of subsidiary companies that are included in the Group’s consolidated financial statements, excluding corporate directors. 3 In our leadership structure, we classify senior leadership as those at global career band 3 and above; middle management as those at global career band 4; and junior management as those at global career bands 5 and 6. Representation and pay gaps We publish this data annually to ensure both transparency and a maintained focus on addressing representation gaps within the organisation. Our gender and ethnicity pay gap reporting shows the difference in average pay between these two groups of people and the wider workforce, regardless of role or seniority. We have reported our UK gender representation and pay gap data since 2017 in line with reporting regulations, and have voluntarily extended this to include the US, mainland China, Hong Kong, India, Mexico, Singapore, Malaysia, and the UAE, alongside ethnicity data for the UK and US. In 2024, we have also extended this to include our colleagues with a disability in the UK. This now covers approximately 81% of our workforce. In 2024, our mean aggregate UK-wide gender pay gap was 40.6% compared with 43.2% in 2023, and the ethnicity pay gap was 7.7% compared with 4.5% in 2023. Our UK gender pay gap is driven by several factors, including the shape of our workforce, where there are more men than women in senior higher-paid roles and more women than men in junior roles. While we are confident in our approach to pay equity, until women and ethnic minority colleagues are proportionately represented across all areas and levels of the organisation we will continue to see gaps in average pay. We are committed to paying colleagues fairly regardless of their gender or ethnicity and have processes to review that remuneration is free from bias. We also review our pay practices and undertake a pay equity review annually. If pay differences are identified that are not due to objective, tangible reasons such as performance, skills or experience, we make adjustments. For further details of our representation data, pay gap data, and actions, see www.hsbc.com/who- we-are/our-people/inclusion-at-hsbc and the ESG Data Pack at www.hsbc.com/esg . 64 HSBC Holdings plc Annual Report on Form 20-F ESG review | Social Fostering an inclusive culture Looking to the future and beyond our public commitments, we refreshed our global inclusion strategy to refocus our ambitions against our strategic priorities, and set out our approach to inclusion over the next three to five years. We have established key principles that enable us to pivot towards building a more inclusive culture for all of our colleagues. Our colleagues’ personal sense of belonging and psychological safety are two key measures captured as part of our Inclusion Index in the annual Snapshot survey, which we monitor and review by various identities that comprise our global workforce. In 2024 we achieved a score of 78%, which is three percentage points ahead of our annual aspirational goal, and on par with the financial services industry benchmark. Analysis of our Inclusion index allows us to measure engagement levels of specific colleague groups in greater detail, in particular different personal identities, to better understand the experiences of our colleagues globally. We found that scores from colleagues who identify as male and female were comparable, at 79% and 77% respectively, remaining unchanged from 2023. From an ethnicity perspective, our Black heritage colleagues were two percentage points below the Group-wide average, while our Asian heritage colleagues’ results were on a par with the overall score, at 78%. From a sexual orientation perspective, colleagues who identified as LGB+ were one percentage point above the Group-wide result. Our employee resource groups Bringing together the shared identities, values and interests of our colleagues allows us to build an inclusive culture across the organisation and our volunteer-led employee resource groups (’ERGs’) enable this. Our ERGs provide insight on key societal issues. Through sponsorship by our non-executive directors and our Group Operating Committee, we bring together our senior leaders and colleagues, bringing to life our values of ‘valuing difference’ and ‘succeeding together’. In 2024, our ERGs led numerous initiatives and events including our Pride ERG for LGBTQ+ colleagues, who worked with our Group Benefits team to expand Gender Dysphoria healthcare benefits in India. Our Ability ERG, for our colleagues with a disability, created a framework called ‘Know me Better’, as a tool to help facilitate conversations between colleagues and line managers regarding a colleague’s disability. Our focus on disability We are dedicated to creating an inclusive culture where all employees, including those with disabilities can thrive. Our progress is guided by our Global Disability Council, sponsored by our HSBC UK Chief Executive Officer, with senior leaders across the business meeting every two months. We have launched the second cohort of our Career Development Programme for our colleagues in middle and junior management with a disability, in partnership with an external coaching provider. In 2024, we launched an international pilot of the programme in Hong Kong. In 2024, stories from our colleagues were showcased globally as part of our Disability Confidence series. The series leveraged the power of our colleagues sharing their experiences, the support they receive, and how this has helped them empower others to do the same. We have also expanded our workplace adjustments programme through our provider Microlink, with services now available to over 44,000 colleagues in India, a 17 percentage point increase compared with 2023. Socio-economic diversity To better support our colleagues from lower socio-economic backgrounds, we have partnered with the London School of Economics and Progress Together to produce a comprehensive framework targeting socio- economic mobility in 2024. The ‘VOICE’ is designed to support individuals, people managers, and organisations in retaining and advancing colleagues from lower socio-economic backgrounds within the UK financial services sector. The blueprint was developed through extensive input from professionals across the industry who come from a lower socio- economic background, and they shared their experiences as part of our qualitative research. It highlights the biases that can impact retention and progression and offers actionable, evidence-based strategies rooted in behavioural science to drive meaningful change. Through our Strive ERG for colleagues who come from a lower socio-economic background we have developed internal mentoring programmes pairing junior and senior colleagues for coaching and development sessions. We have enabled our colleagues in Singapore to share their socio-economic background. In 2023, we entered the Social Mobility Index for the first time and gained recognition as a top 75 employer. We continue to be recognised as a top 75 employer, improving our rank by 30 places to number 37 in 2024 . Supporting our colleagues with caring responsibilities We have found that many of our colleagues are often involved in both their careers and significant caring responsibilities outside work, and are finding managing both responsibilities increasingly challenging. In our Snapshot survey nearly 16% of colleagues self-identified as having caring responsibilities. In 2024 we launched the Global Carers Charter, which comprises a series of tools, policies and support available for colleagues with caring responsibilities. Following its launch in the UK, HSBC’s Global Carers Charter was awarded Ambassador Status by Carers UK. HSBC Holdings plc Annual Report on Form 20-F 65 Building a healthy workplace Listening to our colleagues We value difference at HSBC, and we do this by seeking out different perspectives and listening. Our colleagues succeed together by being connected across the organisation, and they take responsibility by speaking up. These activities are core to our values and we capture regular feedback from our colleagues to help improve HSBC and the employee experience. How we listen Our annual employee engagement survey is called ‘Snapshot’ and runs every September. It is an opportunity for all employees to share feedback on what it is like to work at HSBC. Our 2024 survey achieved a response rate of 88%, up from 85% in 2023, with more than 182,000 colleagues choosing to share their views. This high level of participation enables us to share results confidentially across all levels of the organisation. Insights from our Snapshot survey are shared with the Group Operating Committee and the Board, and are provided directly to more than 11,000 people managers with 10 or more responses from their teams. We support teams to have good conversations about their feedback through the provision of interactive dashboards, action planning tools and discussion guides. Our Employee Engagement Index, our key measure of how people feel about HSBC, has increased to 80%, up three percentage points compared with 2023. This was the largest increase seen across the Snapshot indices, and puts us six points ahead of the global financial services benchmark that we measure against. Key driver analysis shows engagement is most influenced by a clear understanding of HSBC’s strategic objectives, confidence in the future and our strategy, positivity towards career and development, and trust and confidence in leadership. Following significant increases last year, the career index remained stable at 71% and is six points ahead of the global financial services benchmark. The proportion of colleagues stating a preference to remain with HSBC for five or more years increased to 70%, up three percentage points from 2023. Our inclusion index, a key measure of building an inclusive culture at HSBC, remained unchanged at 78%, against an ambition of maintaining 75%. We have found that 75% of colleagues have said that working conditions enable them to be productive, which is up two percentage points compared with 2023. Despite this, 62% of colleagues report that work processes allow them to work efficiently, which is down three percentage points compared with 2023. This remains one of the lowest scoring items across the Snapshot survey, particularly across our senior leadership population. There are a number of initiatives underway to make it easier for colleagues to work efficiently. We also run an annual Pay and Benefits survey, which in 2024 helped to evaluate changes to our performance approach, as well as capturing ongoing feedback about colleague expectations on compensation and development in support of our employer value proposition. We complement these large surveys with continuous lifecycle feedback from new joiners, internal movers and voluntary leavers. We are committed to building on our high levels of engagement and feedback throughout 2025. For further details of our Snapshot data, see the ESG Data Pack at www.hsbc.com/esg. Employee conduct and harassment We expect all our employees to treat each other with respect and dignity, and we do not tolerate or condone discrimination, harassment or bullying in any form, as outlined in our Global Anti-Bullying and Harassment Code. This is supported by our Global Code of Conduct, which helps us to maintain high standards across the Group. We encourage our colleagues to speak up about poor behaviour or things that do not seem right. At times, we know it can be difficult to raise concerns, so regular communication and tracking is important to us. We measure confidence to speak up via our Snapshot Speak Up Index, which is at 77% in 2024, up by one percentage point from 2023. We recognise that our speak up culture requires continued focus to ensure we create the right environment for our people. Our Snapshot survey revealed an increase in colleagues able to state their opinion without fear of negative consequences, with 73% of colleagues feeling able to do so, up by one percentage point from 2023. We strive to improve awareness and education around poor behaviours and strengthen our understanding and response to these issues across all levels of the organisation. In 2024, to ensure continued high-quality investigations into conduct concerns, we introduced six new investigator training modules aimed at the Human Resources investigator community. Our colleagues continue to receive training on bullying, harassment, discrimination and retaliation at least every other year in our Global Mandatory Training curriculum and as part of other learning resources, including in People Manager training. We have mandatory procedures for handling and investigating employee concerns, which include those for bullying and harassment. Cases are continually monitored from our speak-up channels, and data is reported to management committees to ensure there is visibility at leadership level. In 2024 the bank received a total of 624 concerns raised relating to bullying and harassment. Where the concerns were substantiated following an investigation, appropriate action was taken, which included termination of services where appropriate. In 2024, 26% of concerns raised were either partly or fully substantiated and 34 colleagues were dismissed in relation to bullying, harassment, discrimination or retaliation. We are committed to addressing this type of behaviour and will continue to take action where we find that an employee has breached our values and high standards of conduct. Delivering accessible learning We are committed to fostering an inclusive workplace for all colleagues, regardless of technology or ability. In 2024, our Global Mandatory Training received Gold at the Brandon Hall Awards for Best Training Program for Global Accessibility Standards. To uphold these standards we collaborate closely with our accessibility experts, ensuring our digital learning aligns with the high benchmarks set for our customer-facing websites. Our Global Mandatory Training assigned to all colleagues undergoes an external audit to identify any gaps affecting the experience of colleagues, such as those with visual impairments or those who are neurodiverse. We also conduct inclusive user testing to incorporate learner feedback into the design, helping to ensure a seamless experience for everyone. 66 HSBC Holdings plc Annual Report on Form 20-F ESG review | Social Being a great place to work To fulfil our purpose and drive our strategy, we need the best people, performing at their best. Focusing on opportunities for colleagues, making them a part of something bigger and being clear on what they can expect when they deliver on our strategy, is fundamental to delivering for our customers. Our workforce proposition strengthens our ability to attract, retain and energise our colleagues and is driven by three key reward principles of rewarding colleagues’ responsibly, recognising colleagues’ success and supporting our colleagues to grow. Rewarding colleagues responsibly Our pay and benefits proposition aims to reward colleagues responsibly, helping to ensure financial security for all. We remain committed to providing a competitive total compensation package with an appropriate mix of fixed pay and variable pay. In our Snapshot survey, 52% of colleagues feel they are paid fairly for what they do, the sentiment remaining unchanged from 2023. Following our accreditation as a global living wage employer in 2024 we have continued to work with the Fair Wage Network, which provides an independent source of wage levels. HSBC has achieved accreditation as a global living wage employer in 2025 in respect of the next two years. A living wage should be sufficient to cover an adequate standard of living given the cost of goods and services in each country in which we operate. We will continue to review all wages globally against local living wage benchmarks. For our UK suppliers that have staff working within the UK, we seek to encourage them to pay at least the living wage. For further details of our approach to workforce reward, see page 332 . Recognising colleagues’ success We believe in recognising our colleagues’ success and have a number of mechanisms to help enable colleagues to be rewarded for their work. In 2024, we introduced performance routines, to encourage our colleagues to talk about their ambitious goals throughout the year. This is complemented with improving the exchange of feedback, so colleagues know how they are doing and how they can improve. These activities are brought together through performance check-in conversations at the year-end, with a simplified approach to performance assessments. These changes were communicated to over 215,000 colleagues in 59 markets at the beginning of the year. Our Pay and Benefits survey measures several factors, including our colleagues’ understanding of performance routines, with 76% reporting a ‘good understanding’ of how to practice them. In our Snapshot survey, 87% of colleagues reported that they had a clear understanding of what is expected of them and 94% of colleagues said they have had at least one performance check-in conversation with their manager. Variable pay allows us to recognise the performance and behaviours of our colleagues. In 2024 we introduced ‘Target Variable Pay’ to 150,000 colleagues in 47 markets. We have supported managers in their understanding of the changes, with nearly 18,000 people managers attending training. Changes to our pay structure provide more clarity and transparency on how we make pay decisions and how performance impacts variable pay, helping colleagues understand how they contribute to the performance of the organisation. Our ‘At Our Best’ recognition platform offers employees the opportunity to recognise their peers for role model behaviours linked to our values. In 2024, our colleagues recognised one another over 1.5 million times, up three percentage points from 2023. Managers are also encouraged to recognise colleagues’ service anniversaries every five years up to 30 years of service, and at 40 years. In 2024 over 28,000 anniversaries were celebrated. Share plans are another way to empower colleagues to participate in the Group’s success. In 2024, we invited 194,000 colleagues to participate in our share plans and 93% of colleagues globally now have access to a share plan. Supporting our colleagues to grow To help our colleagues to grow personally and professionally, we are committed to supporting their mental, physical and financial well-being, offering flexibility and helping colleagues develop new skills. We use colleague feedback, benchmarking from industry experts and we work with external partners across business, civil society and academia. As a founding member of the World Wellbeing Movement, we are working with the associated Wellbeing Research Centre at the University of Oxford to shape our approach to well-being. In Snapshot, a record 78% of our colleagues said, ‘my organisation cares about my well- being’, up nine percentage points from 2023. We further detail our approach to supporting our colleagues to grow on the following page. We further detail our approach to skills and career development on page 68 . HSBC Holdings plc Annual Report on Form 20-F 67 Being a great place to work continued Supporting our colleagues in the Middle East In the wake of regional conflicts we made promotion and support of mental health a priority. We held regular on-site Critical Incident Support across our MENAT region, covering Egypt, UAE, Kuwait, Türkiye and Qatar. Across the region, belief that HSBC genuinely cares about its colleagues was at 66%, up 12 percentage points from 2023. We also found that awareness of mental health support at HSBC was at 74%, up six percentage points from 2023. To support broader well-being across the region we increased paid maternity leave to a consistent 18 weeks. Family friendly enhancements were also made to the medical plan with the introduction of fertility treatment coverage and new coverage for Applied Behaviour Analysis in Bahrain, Kuwait, Oman, Qatar and the UAE. We also held on-site breast screening and flu immunisation appointments in the UAE. Following increased demand for these services, more appointments and longer hours have been made available. Flexible working Flexible working remains one of the top reasons colleagues say they would recommend HSBC to someone else, with 74% of colleagues saying flexible working is the aspect of our well-being programme they value the most. In 2024, 85% of our colleagues practised some form of flexible working arrangement, with 75% of colleagues working in a hybrid way. We acknowledged that not all our colleagues had the right balance between working at home or in the office. In 2024, we have found that a better balance has been achieved, with colleagues attending the office between 2-3 days per week on average. This was achieved by our senior leadership reinforcing their expectations on office attendance. To further support flexibility and work-life balance we have improved family leave policies. We now offer 94% of employees at least 18 weeks of parental leave on full pay for primary caregivers, and 74% of employees have at least two weeks of paid leave for secondary caregivers. We also provide five fully paid days of carers leave and of compassionate leave, to 67% and 79% of colleagues, respectively. Mental well-being In 2024 we continued to retain number one status in the CCLA Corporate Mental Health Benchmark for the third year running. While we are pleased with the progress made in 2024, mental health did decline with 79% of colleagues saying they have positive mental health, compared with 83% in 2023. This decline aligns with broader societal trends, with younger generations in particular experiencing lower levels of mental health. We have continued to make the meditation app Headspace available to our colleagues globally, with over 35,000 enrolled, and we have extended access to family and friends. In 2024, we upgraded our Employee Assistance Programme in over 30 countries to support the mental health of colleagues and their families. We have lowered the age threshold on paediatric counselling support, and in some countries this is now available from age five years. More countries will aim to enhance support for children in 2025. We have sought third-party assurances and benchmarking to ensure our approach remains relevant and effective. In 2024, we used the 2023 MindForward Alliance’s Thriving at Work Benchmark, for which we received a global score of 91 points, 14 points ahead of the global average. In 2024, mental health awareness training was completed by more than 227,000 colleagues as part of Global Mandatory Training. Our voluntary mental health education modules have been completed over 37,000 times, with 74% being managers. We have also expanded the global reach of mental health champions in our Mindfulness Network by nearly 27%. Physical well-being The Snapshot survey also revealed that 72% of colleagues rate their physical health as positive, compared with 74% in 2023. In 2024, we continued to make the Virgin Pulse app available to colleagues, supporting them to increase their physical activity. Over 21,000 colleagues have now downloaded the app, up 260% from 2023. More than 1,000 personal and team activity challenges were run and nearly 5,000 health checks were completed. We have continued to provide access to private medical insurance for 99% of permanent employees and telemedicine healthcare services in the majority of our countries and territories. In certain countries and territories, we also provide on-site medical centres that the majority of colleagues can access. We have also increased the number of colleagues who have access to company paid health assessments. In 2024, eligibility for a personalised health assessment was extended to all UK employees. Health assessments are provided in 43 countries and we are working to extend availability in 2025. Financial well-being Financial challenges remain a concern for many colleagues, caused by increases in the cost of living globally. In 2024, 62% of colleagues said they felt positive about their financial health and 57% of colleagues said they have at least three months of essential outgoings saved, both up one percentage point from 2023. We launched a five-part financial well-being series covering key career milestones. The series had over 4,000 attendees during the live events, with 93% of participants saying the events were useful or very useful. Recordings of the events have since been watched more than 15,000 times across 37 countries. Since the launch of the series, 65% of colleagues said they know where to find financial well-being support at HSBC, up five percentage points from 2023. In our Pay and Benefits survey one in three colleagues said that they want more support with financial well-being. In 2025 we aim to trial a new financial well-being platform with 5,000 colleagues in the UK and Asia to help our colleagues improve their financial literacy, money skills and planning. For further details of our Snapshot well-being data see the ESG Data Pack at www.hsbc.com/ esg. Awards CCLA Global 100 Mental Health Benchmark – Ranked number 1 global employer for the third consecutive year 68 HSBC Holdings plc Annual Report on Form 20-F ESG review | Social Developing skills, careers and opportunities Learning and skills development Employee development energises our colleagues for growth and helps equip them with the skills they need today while also preparing them to meet future challenges. Enabling future skills We have adapted our skills development platforms and learning resources, to help prepare our workforce for future challenges and enable skills building at scale. In 2024, we: – increased the number of active users and participation in learning programmes via our learning experience Degreed. This aims to address skills gaps through internal and external learning content and courses, enabling colleagues to share, collaborate and learn individually or in groups through structured learning pathways; – unlocked over 250,000 hours of skills development through our Talent Marketplace. To date more than 46,000 colleagues have created a profile helping them match their interest in developing specific skills or career goals with on-the- job projects and networking; – accelerated the use of digital badging to acknowledge skill-building achievements. We have launched over 150 badges and issued over 12,000 badging credentials associated with priority skills such as sustainability, AI and data analytics; and – enabled our colleagues to learn via a range of channels, reflected in an increase of total training hours by our colleagues to 6.2 million hours. Maintaining our risk management culture Our Risk Academy delivers and deploys comprehensive learning opportunities for all employees, including foundational training in traditional areas of risk management, such as financial crime risk, and specialised development for senior leaders and those in high-risk roles. The Academy also addresses issues like ESG risk, AI and cybersecurity. For senior leaders, we have introduced new programmes centred on Enterprise Leadership through a risk lens. These programmes are designed to support HSBC’s strategic priority of sustainable growth by equipping leaders with the skills needed to navigate an evolving risk environment. We launched and concluded a new Financial Crime masterclass series for our senior leader population, focusing on the importance of risk management and protecting the bank from financial crime. Building responsible AI expertise As we continue to enhance our AI capabilities across the organisation, our new AI Academy helps to support advanced skills development aligned with HSBC’s AI strategy. This was launched in response to the growing global interest in AI and focuses on fostering AI literacy and promoting responsible AI use throughout the bank. Our Global Mandatory Training covers key principles and foundational concepts of AI usage and we have developed foundational and intermediate pathways to raise awareness of AI principles, ethics, risks and governance. We have also developed specific courses tailored for our senior leadership population that focus on understanding AI and exploring its use cases for business and decision making. Skilling the transition to net zero Our Sustainability Academy continues to support our net zero ambitions and strategy. As the Academy has evolved, we have increased our focus on building capabilities beyond foundational skills, specifically targeting priority groups that support both our customers and our operations in the transition to net zero. In 2024, our key focus has been on: – providing on-demand learning tailored to the specific roles, regions, and client bases of colleagues involved in supporting customers through the transition; – facilitating external certifications and qualifications, as needed, to deepen colleagues ’ expertise in areas such as Sustainability Climate Risk through providers like GARP and Fitch; – delivering a three-month Sustainability Leadership Programme in collaboration with Imperial College London and our own Sustainability Centre of Excellence experts for over 200 colleagues; and – offering net zero learning opportunities to the Board and 100 of our most senior leaders. We have leveraged our internal experts from the Sustainability Centre of Excellence to provide advanced skills training in key transition areas, such as power systems and storage, carbon removal, transition in Asia- Pacific, steel and cement industries, road transport systems, hydrogen and agriculture. Training at HSBC 6.2 million Training hours by our colleagues in 2024. (2023: 5.3 million) 29.6 hours Training hours per FTE in 2024. (2023: 23.9 hours) Energising our colleagues for growth We aim to provide our colleagues with the opportunity to develop critical skills while creating a pipeline of talent to support our strategic ambitions. It is essential that we promote effective leadership and foster an environment that inspires our colleagues to grow. In 2024, our focus has been on: – Our Digital Acceleration Programme, which aims to create dynamic working methods and simplify our technology landscape. This will enable us to work faster and smarter, enhancing our ability to develop better products and services for our customers while embracing innovative technologies; – Our ‘CARE’ programme, which embodies the principles of being connected, accountable, responsive and empathic. It outlines the behaviours that reflect these values, guiding our colleagues in delivering exceptional service to our customers. The programme has also been integrated into our customer experience objectives, with progress tracked through our Customer Centricity Index, which is included in our 2024 Snapshot survey. – The Managing Director Leadership Programme, which was expanded in 2024. It combines immersive in- person sessions on leadership with virtual deep dives on key issues and all-hands strategy sessions, alongside an enterprise risk leaders programme and a series focused on doing business in key locations. To support our leadership pipeline we have refreshed our development offering for the next layer of leaders to be delivered in 2025; and – Our Emerging Talent proposition, supporting HSBC in a future-focused way, supplying the organisation with diverse and capable talent pools to anticipate and address existing future skill shortages. HSBC Holdings plc Annual Report on Form 20-F 69 Building customer inclusion and resilience Our approach to customer inclusion and resilience We believe that financial services, when accessible and fair, can reduce inequality and help more people access opportunities. We play an active role in opening up a world of opportunity for customers and communities, by supporting their financial well-being, and removing barriers to accessing financial services. Access to products and services We provide innovative solutions to help improve customer access to products and services. For those in need of additional support due to social or financial vulnerabilities or for those customers who do not qualify for a standard account, the UK and Hong Kong offer a No-cost Account with no minimum balance and no account opening fees, to help with basic banking needs. In the UK, we continue to offer our groundbreaking ‘No Fixed Address’ service, working in partnership with housing and homelessness charity Shelter UK, providing access to financial services to help rebuild lives and increase financial resilience. Since its launch in November 2019, this service has supported over 7,000 individuals, with over 1,400 of these in 2024 alone. The reduction in no-cost accounts between 2023 and 2024 is due to bulk closure of inactive accounts in the UK. Making banking accessible Number of no-cost accounts held for customers, in the UK and Hong Kong, who do not qualify for a standard account or who might need additional support due to social or financial vulnerability. 2024 2023 2022 Supporting financial knowledge and education We continue to invest in financial education content and tools across different channels to help customers, colleagues and communities be confident users of financial services, for example by offering programmes focused on improving resilience and basic money management skills. Customers Since 2020, we received over 8.8 million unique visitors to our global digital financial education content, which helps customers expand their financial capabilities through our personal financial management tools. HSBC UK further enhanced capabilities that help customers to establish healthy savings habits through the launch of ‘Savings Goals’. Customers have used this mobile banking feature, since launch in April 2024, to set up over 125,000 goals, with ‘Rainy Day’ as one of the most popular categories. We have also seen that over 10% of goals have already been achieved showing how this capability is helping support customers to build financial resilience. Well+, our flagship health and wellness-based reward programme on our HSBC HK mobile banking app had another successful year with over 267,000 new customers in this year alone. More than 400,000 customers are now engaged, earning points by taking part in activities aimed at improving their holistic health covering physical, mental and financial well-being. Communities In the UK we continued to support the development of children and young people's financial capability, including those with special education needs, through our Money Heroes Programme – winner of the 2024 Third Sector Business Charity Partnership Award (supported by Young Enterprise). In addition, we launched a new partnership with Girlguiding UK in November 2024, introducing the Money Skills – ‘I’m Money Confident’ badge. For schools, colleges and youth groups we offer the ‘Smart Money’ programme, where training is delivered by HSBC colleagues to help improve financial capability and employability. In 2024, we trained over 1,000 colleagues, and working with our dedicated Financial Education Team, over 280,000 children and young people were engaged in the programme across the UK. In Hong Kong we launched a face-to-face training programme for teenagers with special education needs on how to make healthy financial choices and build essential financial skills for day-to-day living. Creating an inclusive banking experience We endeavour to ensure that our banking products and services are designed to be accessible for customers experiencing either temporary or permanent challenges, such as disability, impairment or a major life event. In Hong Kong we introduced a simplified mobile banking app designed to improve digital inclusion for seniors, offering a more accessible and intuitive user experience. The app features an enhanced interface with easy- to-understand buttons, increased use of visuals, and streamlined access to essential banking services. As the first initiative of its kind among Hong Kong banks, the app has been successful in engaging over 663,000 unique users since its launch in October 2022. We are committed to improving accessibility across our digital channels and continuously review our browser-based websites and mobile banking services against the Web Content Accessibility Guidelines 2.1 AA standards. We promote digital accessibility by offering educational resource. In 2024 we launched the Accessibility Hub, a multi-award winning accessibility awareness e-learning content, promoting digital accessibility to the general public, attracting circa 150,000 views as of September 2024. Also since launch, more than 1,000 individuals across 140 companies globally have participated in our specialised digital accessibility Training 1000 Programme. Supporting customers extends beyond our digital channels and we recognise that not all disabilities are visible. We rolled out our Hidden Disabilities Sunflower Lanyard Scheme to two additional markets this year – Singapore and the UAE – expanding it beyond the UK, Hong Kong, the Channel Islands and Australia. The lanyard indicates that an individual may need a little more help, support or time. In 2024 two UK branches, Loughborough and Sheffield, received awards for their accessible and inclusive branch design. We are proud to be recognised by the Financial Times Diversity in Finance Awards, the Construction Industry Council and the Business Disability Forum for our work to improve accessibility, equity and inclusion in UK financial services. We continue to introduce accessibility features and designs (e.g. a curved notch and braille dots) to our card products across the globe to support people with visual impairments, learning difficulties, and colour blindness. In 2024, we introduced accessibility features in India, Philippines and Indonesia resulting in a total of 20 markets where those features are now available. For the second year HSBC sponsored and hosted the annual AbilityNet’s Techshare Pro Conference, Europe's largest event for the accessibility and disability inclusion community, at our Group Head Office in London. Over 1,600 individuals attended the event (in person or online) globally. Supporting women UK CMB launched a Women’s Business Growth Initiative Programme to support women in scaling their businesses and provide access to funding, making £250m available for lending, education and networking opportunities. The aim of the support is to help narrow the credit gap for women-led businesses, which is estimated to be valued at $1.7tn globally. In Mexico and Uruguay, our Mujeres Al Mundo programme helps to address gender gaps by providing businesswomen access to funding, education and networking. In 2024 we provided over $190m in sustainable financing to support women-owned enterprises in both countries. We also won the 2024 Financial Alliance for Women’s ‘Outstanding Contributor’ award for enabling full financial access for women and unlocking huge value in the Female Economy. 70 HSBC Holdings plc Annual Report on Form 20-F ESG review | Social Engaging with our communities Helping to build a more inclusive and resilient society We have a long-standing commitment to support the communities in which we operate. We aim to empower people and communities to develop the skills and knowledge needed to thrive in the future. Through the global reach of our charitable partnerships we bring together diverse people, ideas and perspectives that help us open up opportunities and build a more inclusive world. Building community and future skills We work with charity partners to initiate programmes that help people and communities respond to opportunities and challenges as global economies transition towards a low-carbon future. In 2024, these included: – Continuing a partnership with the British Council in Brazil, Mexico, India, Indonesia and Vietnam, and in Australia, India and Malaysia with The King’s Trust Group, to empower young, marginalised people with the skills needed to excel in the green economy. – In India, HSBC collaborated with two charities to help enhance sustainability in the handloom and apparel sectors, benefiting 10,000 weavers. Our initiatives focused on adopting energy-efficient practices, reducing water pollution, promoting natural fibre products, and increasing the use of natural dyes. – HSBC Continental Europe collaborated with Junior Achievement Europe to launch the Climate Resilience Programme, which aims to provide educational opportunities related to innovations in climate resilience for young people in France, Italy and Malta. We also work with our charity partners to help strengthen the resilience of communities where we operate. Initiatives launched in 2024 included: – ‘Saving for Good’, in partnership with INJAZ Al Arab, which teaches financial literacy fundamentals to 2,386 low-income workers and the large migrant worker population in the MENA region. – A new financial literacy curriculum in Hong Kong that aims to strengthen the financial management knowledge of elderly learners and provide a better understanding of fintech applications and awareness of online fraud. – We responded to disaster relief appeals to support efforts in Bangladesh, Central Europe, Mexico, the Middle East, Spain, Taiwan, Thailand, the USA and Vietnam. Community engagement and volunteering We offer paid volunteering days, and encourage our people to offer their time, skills and knowledge to causes within their communities. In 2024, our colleagues gave over 254,000 hours to community activities during work hours. Examples of volunteering efforts in 2024 included: – around 260 employees supported Waterkeeper, a US-based environmental non-profit, with 700 hours volunteered across 16 events in the country; and – more than 200 employees acted as mentors for marginalised youth in support of the Strive and Rise Programme in Hong Kong. Charitable giving in 2024 (%) Social, including Future Skills: 29% Environment, including the Climate Solutions Partnership: 40% Local Priorities: 21% Disaster relief and other giving: 10% Total cash giving towards charitable programmes $ 94.7 m Hours volunteered during work time >254,000 People projected to be reached through our social and future skills programme >928,000 HSBC Holdings plc Annual Report on Form 20-F 71 Governance Acting responsibly We remain committed to high standards of governance. We work alongside our regulators and recognise our contribution to building healthy and sustainable societies. At a glance Our relationship We act on our responsibility to run our business in a way that upholds high standards of corporate governance. Customer experience is at the heart of how we operate. It is imperative that we treat our customers well, that we listen, and that we act to resolve complaints quickly and fairly. We measure customer satisfaction through net promoter scores across each of our global businesses, listen carefully to customer feedback so we know where we need to improve, and take steps to do this. Our customer satisfaction performance improved in many markets in which we operate, although we still have work to do to improve our rank position against competitors. We are committed to working with our regulators to manage the safety of the financial system, adhering to the spirit and the letter of the rules and regulations governing our industry. We strive to meet our responsibilities to society, including through being transparent in our approach to paying taxes. We also seek to ensure we respect human rights in our workplace and our supply chains, and continually work to improve our compliance management capabilities. For further details of our corporate governance, see our corporate governance report on page 266 . In this section Setting high standards of governance How ESG is governed We expect that our approach to ESG governance is likely to continue to develop, in line with our evolving approach to ESG matters and stakeholder expectations. Page 72 Human rights Our respect for human rights We have continued to develop our understanding of our salient human rights issues and associated risk management. Page 73 Customer experience Customer satisfaction While we are positioned among the top three banks in 58% of our key markets within WPB and CMB, we recognise the need to improve our customer experience further to enhance our competitive ranking. Page 75 How we listen We aim to be open and transparent in how we track, record and manage complaints. Page 76 Integrity, conduct and fairness Safeguarding the financial system We have continued our efforts to combat financial crime and reduce its impact on our organisation, customers and the communities that we serve. Page 78 Whistleblowing Our global whistleblowing channel, HSBC Confidential, allows our colleagues and other stakeholders to raise concerns confidentially. Page 78 A responsible approach to tax We seek to pay our fair share of tax in all jurisdictions in which we operate. Page 79 Conduct: Our product responsibilities Our conduct approach guides us to do the right thing and to focus on the impact we have on our customers and the financial markets in which we operate. Page 80 Our approach with our suppliers We require suppliers to meet our third-party risk compliance standards and assess them to identify any financial stability concerns. Page 80 Safeguarding data Data privacy We are committed to protecting the data we process, in accordance with the laws and regulations of the markets in which we operate. Page 81 Cybersecurity We invest in our business and technical controls to help prevent, detect and mitigate cyber-threats. Page 82 72 HSBC Holdings plc Annual Report on Form 20-F ESG review | Governance Setting high standards of governance TCFD How ESG is governed The Board takes overall responsibility for ESG strategy, overseeing executive management in developing the approach, execution and associated reporting. Progress against our ESG ambitions is reviewed through Board discussion and review of key topics, such as updates on sustainability infrastructure finance and employee sentiment. The Board is regularly provided with specific updates on ESG matters, including the sustainability execution programme, human rights and workforce engagement. Board members receive ESG-related training as part of their induction and ongoing development, and seek out further opportunities to build their skills and experience in this area. For further details of Board members’ ESG skills and experience, see page 267 . For further details of their induction and training in 2024, see page 280 . In October 2024, we enhanced our ESG governance with the establishment of a new Sustainability Working Group (‘SWG’) of the HSBC Holdings Board , with an initial duration of 12 months. The SWG is comprised of five non-executive Directors, along with attendance by other executives. At the executive level, the governance activity was streamlined with the removal of the Sustainability Execution Committee, with its activity managed within the project team. We expect that our approach to ESG governance is likely to continue to develop, in line with our evolving approach to ESG matters and stakeholder expectations. The diagram on the right provides an illustration of our ESG governance process, including how the Board’s strategy on climate is cascaded and implemented throughout the organisation. It identifies examples of forums that manage both climate-related opportunities and risks, along with their responsibilities and the responsible chair. The structure of the process is similar for the escalation of problems, with issues either resolved in a given forum or raised to the appropriate level of governance with appropriate scope and authority. Given the wide-ranging remit of ESG matters, the governance activities are managed through a combination of specialist governance infrastructure and regular meetings and committees, where appropriate. These include the Group Disclosure and Controls Committee and Group Audit Committee, which provide oversight for the scope and content of ESG disclosures, and the Group People Committee, which provides oversight support for the Group’s approach to performance management. For some areas, such as climate where our approach is more advanced, dedicated governance activities exist to support the wide range of activities. The Group Chief Risk and Compliance Officer How HSBC’s climate strategy is cascaded Opportunities Risks Board level governance Group Board Group Audit Committee Group Risk Committee Specialist Board governance Sustainability Working Group Provides guidance on the Group-wide medium- and longer-term sustainability strategy, including our progress towards our net zero ambitions, taking into account key factors such as risk appetite, commerciality, capability and data. The group will also oversee progress against the strategy, including financing and supporting clients’ transitions. The group will provide guidance on target setting, policy review, financing and investing. Chair: Independent non-executive Director - Geraldine Buckingham Management level governance ESG Committee Has oversight of ESG strategy, policy, material commitments and external disclosure. Oversees and monitors progress against ESG strategy, policies, plans, targets, commitments and execution processes. Reports to the SWG and Board on progress on the commitments, deliverables and targets under the sustainability execution programme. Co-Chairs: Group CEO and Group Chief Sustainability Officer Group Risk Management Meeting Oversees the enterprise-wide management of all risks, including updates relating to the Group’s climate risk profile and risk appetite, top and emerging climate risks, and key climate initiatives. Chair: Group Chief Risk and Compliance Officer Regional, global business and group infrastructure Examples of ESG-related management governance The following governance bodies support management in its delivery of ESG activities. Sustainable Execution Programme Oversees the global delivery of climate strategy through 10 modules. Chair: Global Head of Sustainability Transformation Group Reputational Risk Committee Provides recommendations and advice on significant reputational risk matters with impact across the Group. Chair: Group Chief Risk and Compliance Officer Human Rights Steering Committee Oversees the Group’s evolving approach to human rights and provides enhanced governance. Chair: Group Chief Risk and Compliance Officer and the chief risk officers of our PRA- regulated businesses are the senior managers responsible for climate financial risks under the UK Senior Managers Regime. Climate risks are considered in the Group Risk Management Meeting and the Group Risk Committee, with scheduled updates provided, as well as detailed reviews of material matters, such as climate-related stress-testing exercises. HSBC Holdings plc Annual Report on Form 20-F 73 Human rights Our respect for human rights Our salient human rights issues Illustration of HSBC Group’s inherent human rights risks mapped to business activities. Inherent human rights risks HSBC activities Employer Buyer Provider of products and services Investor Personal customers Business customers Right to decent work Freedom from forced labour u u u Just and favourable conditions of work u u u u Right to health and safety at work u u u u Right to equality and freedom from discrimination u u u u u Right to privacy u u u Cultural and land rights u u u Right to dignity and justice u u u u u As set out in our Human Rights Statement, we recognise the role of business in respecting human rights. Our approach is guided by the UN Guiding Principles on Business and Human Rights (‘UNGPs’) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Our salient human rights issues We continue to develop our understanding of our salient human rights issues. These are the human rights at risk of the most severe negative impact through our business activities and relationships. An extensive review of our salient human rights issues conducted in 2022 identified five human rights risks inherent to HSBC’s business globally, and five types of activity through which such risks might arise. These are represented in the adjacent table. In 2023, building on this assessment, we provided practical guidance and training, where relevant, to our colleagues across the Group on how to identify and manage human rights risk. In 2024, we focused on our approach to human rights risk management relating to the goods and services we buy from third parties and in respect of our business customers. We issued human rights due diligence good practice guidance tailored to procurement and corresponding high-level guidance for staff who manage our relationships with our business customers. Managing risks to human rights In 2024, we continued the process of adapting our risk management procedures to reflect what we learned from the work on salient human rights issues and began embedding the related guidance documents described above. We developed a human rights due diligence operating procedure for procurement globally. The procedure describes the due diligence process undertaken to identify suppliers where the risk of adverse human rights impact is considered higher and the process to be followed to review and mitigate the risk. We built on the human rights supplier audit pilots undertaken in 2023 in our Asia- Pacific and Latin America regions with an expanded programme of human rights audits in 11 countries across Asia-Pacific, Latin America, the Middle East and North Africa. We continued to develop our in-house capability on human rights with the launch of further online resources for all staff and bespoke human rights training for key colleagues, including those managing relationships with suppliers and business customers, and those with responsibility for overseeing risk management processes. For further details of the actions taken to respect the right to decent work, see our 2024 Annual Statement under the UK Modern Slavery Act at www.hsbc.com/who-we-are/esg-and- responsible-business/modern-slavery-act. For further details of the actions taken to respect the right to equality and freedom from discrimination, see ’Our approach to inclusion’ on page 62 . Sustainability risk policies Some of our business customers operate in sectors in which the risk of adverse human rights impact is considered greater. Our sustainability risk policies consider human rights issues such as forced labour, harmful or exploitative child labour, workers’ rights and land rights. Through our membership of international certification schemes, such as the Forestry Stewardship Council, the Roundtable on Sustainable Palm Oil and the Equator Principles, we recognise standards aimed at respecting human rights. We regularly review our sustainability risk policies and policy implementation as we apply our policies in practice. For further details, see our sustainability risk policies at www.hsbc.com/who-we-are/esg-and- responsible-business/managing-risk/ sustainability-risk. Financial crime controls Our financial crime risk framework also helps to mitigate the risk of being associated with adverse human rights impacts, by helping to identify and assess the financial crime risk associated with our customers, employees and third parties. For further details of how we fight financial crime, see www.hsbc.com/who-we-are/esg-and- responsible-business/fighting-financial-crime. Other principles HSBC’s Principles for the Ethical Use of Data and Artificial Intelligence include how we seek to respect the right to privacy while making use of these technologies. For further details see www.hsbc.com/-/files/ hsbc/our-approach/risk-and-responsibility/ pdfs/240715-hsbc-principles-for-the-ethical-use- of-data-and-ai.pdf?download=1. 74 HSBC Holdings plc Annual Report on Form 20-F ESG review | Governance Our respect for human rights continued Supporting change We continued to participate in industry forums, including the Thun Group of Banks, which is an informal group that seeks to promote understanding of the UNGPs within the sector, and the UN Global Compact Human Rights Working Group. HSBC has been a member of the Mekong Club since 2016. We are a participant in their financial services working group, and we use their informative typological toolkits, infographics, and other multimedia resources covering current and emerging issues. Our compliance teams regularly collaborate and engage with the Mekong Club in designing Group-wide knowledge sharing and training sessions. Investments HSBC Asset Management acknowledges the important role that business plays in respecting human rights. If mismanaged or left unaddressed, human rights violations may materialise as business risks, negatively impacting investee companies’ operations, supply chain or brand. These may in turn present risk both to client investments and reputation. HSBC Asset Management engages with companies prioritised for purposeful engagement under its Stewardship Plan on core themes material to investee companies, including human rights. Engagements may be on a one-on-one basis, or collaboratively with other investors. In 2024, it has developed engagement guidelines, highlighting its expectations of good practice for companies, where human rights may be a material issue. Further details can be found in its Stewardship Plan. The Global Voting Guidelines provide an overview of its approach to exercising its shareholder rights in respect of ESG issues, including human rights. In 2024, HSBC Asset Management joined the Investor Initiative on Human Rights Data (‘II-HRD’), a collaborative engagement initiative that aims to improve the depth and breadth of corporate human rights data available to investors and the transparency of human rights assessment criteria. This initiative seeks to address the industry-wide challenges commonly cited, including lack of transparent ESG ratings methodologies by commercial data providers and insufficient inclusion of human rights data. For HSBC Asset Management’s Stewardship Plan, see: www.assetmanagement.hsbc.co.uk/ en/institutional-investor/about-us/responsible- investing/-/media/files/attachments/uk/policies/ stewardship-plan-uk.pdf. Measuring effectiveness Metric 2024 2023 Contracted suppliers who either confirmed adherence to the code of conduct or provided their own alternative that was accepted by our Global Procurement function 96.7% 95% Employees who have received training on one or more aspects of human rights 11,884 8,176 For further inclusion metrics, see page 62 in this ESG review. Supporting those impacted and those potentially at risk We continued to expand our Survivor Bank programme, which has now supported over 3,500 (a more than 15% increase since last year) survivors of modern slavery and human trafficking in the UK. Our Wealth and Personal Banking team continues to deliver training to raise awareness of modern slavery, enabling employees to spot signs of abuse and escalate their concerns through established channels. In addition, our customer-facing employees globally are trained to identify and support vulnerable customers as part of their induction training. For further details of our work to support vulnerable communities, see page 69 . Effectiveness The table below includes some indicative metrics we use to measure year-on-year improvement to our human rights processes. HSBC Holdings plc Annual Report on Form 20-F 75 Customer experience We remain committed to improving customers’ experiences. In 2024, we gathered feedback from over one million customers across our three global businesses to help us understand our strengths and the areas we need to focus on. We were ranked among the top three banks or improved our ranking against our competitors in 58% of our six key markets across WPB and CMB 1 in line with 2023. Customer satisfaction Listening to drive improvement We have continued to embed our feedback system so we can better listen, learn and act on customer feedback. We use the net promoter score (‘NPS’) and customer satisfaction to provide a consistent measure of our performance. NPS is measured by subtracting the percentage of ‘detractors’ from the percentage of ‘promoters’. ‘Detractors’ are customers who provide a score of 0 to 6, and ‘promoters’ are customers who provide a score of 9 to 10 to the question: ‘On a scale on 0 to 10, how likely is it that you would recommend HSBC to a friend or colleague’. We run studies that allow us to benchmark ourselves against other banks. We try to make it as easy as possible for customers to give us feedback, leveraging our use of digital real-time surveys to capture insight. By sharing this and other feedback with our front-line teams, and allowing them to respond directly to customers, we are improving how we address issues and realise opportunities. We continue to run dedicated global forums to provide oversight of our retail and business customers’ experiences and promote continuous improvement. This helps ensure we use feedback in all aspects of how we run our business, and prioritise initiatives that matter most to our customers. How we fared In WPB, we were ranked among the top three banks against our competitors in Hong Kong and mainland China. In Hong Kong, we remained first overall against our competitors, and improved our NPS score. This was driven by improved scores across all customer segments. Our NPS rank improved in the UK and Singapore. This was largely driven by improved scores among our affluent customers. In Mexico our rank remained stable, and in India our rank declined, largely driven by our personal banking customers. In our private bank, our global NPS increased to 48 points, compared with 42 points in 2023. All the existing markets included in the programme increased their scores from 2023 and we have included India and UAE for the first time this year. In CMB, we were ranked among the top three banks against our competitors in three of our six key markets. We ranked first in Hong Kong and as a top three bank in Singapore and India. In mainland China, we ranked outside the top three but ranked first among international banks. In Mexico, we have dropped from 3rd to 4th position due to improved competitor performance in business banking. After an improved rank position in 2023, our overall performance in the UK has stabilised in 2024. Even though we sit outside of the top 3 in business banking, we are still ranked in the top 3 among mid-market enterprise and large corporates in the UK. We remain committed to improving our NPS performance across markets, with action plans developed centrally and locally. In GBM, we have one of the highest satisfaction scores against our international competitors. We were ranked in the top three banks globally, with high satisfaction scores based on our digital capabilities. Number of markets in top three or improving rank 1,2 2024 WPB 4 out of 6 CMB 3 out of 6 1 The six markets comprise: the UK, Hong Kong, Mexico, mainland China, India and Singapore. Rank positions are provided using data gathered through third-party research agencies. 2 We benchmark our NPS against our key competitors to create a rank position in each market. This table is based on the number of markets where we are in the top three or have an improved rank from the previous year. Acting on feedback In 2024, we have continued to focus on developing our products and services, and enhancing our digital capabilities to improve customer experience. Wealth and Personal Banking We continue to redesign our international products and services to make it quicker and easier to bank internationally. This year we have improved the way our customers make international payments. Customers can send funds directly to mobile wallets from their banking app, with customers now able to send international payments with just the recipients’ name alongside their phone number or email address. Commercial Banking Global Payments Solutions (‘GPS’) implemented a new globally aligned client service model focused on delivering an enhanced front-to-back client experience. We leverage data to improve our engagements with customers and are investing in technology to drive process efficiencies, reduce query volumes and drive automation. Our new Trade Solutions platform (‘HTS’) lets us quickly deploy new capabilities (like TradePay) across multiple markets. It helps provide a consistent user experience and enables easy connectivity to other platform ecosystems. In sustainability we continue to build an end- to-end customer journey through launching new propositions that incentivise and reward customers for improving their ESG performance, such as the HSBC Buildings Sustainability Assessment Tool in the UK and Sustainability Improvement Loan. In our Customer Channels division, we have deployed AI and personalisation solutions to improve proactive engagement and the speed of query resolution. We have increased adoption of customer digital capabilities to improve fulfilment turnaround times. We have also increased the resilience of our digital channels and further reduced customer fraud risk. These actions are helping to build greater digital trust with our customers and thereby improving customer experience. Global Banking and Markets We continued our efforts to support our clients in their sustainability and transition journey by maintaining our Top 5 book-runner position globally in green, sustainable and social bonds, and by extending the sustainability-focused product and solutions range beyond the labelled products suite. We have refined our priority and core coverage model, including piloting a range of priority client squads to drive specific client goals. We continue to invest in our coverage enablement strategy, including thought leadership and transaction banking solutions. 76 HSBC Holdings plc Annual Report on Form 20-F ESG review | Governance How we listen To improve how we serve our customers, we must be open to feedback and acknowledge when things go wrong. We continue to adapt at pace to provide support for customers facing new challenges, new ways of working and those that require enhanced care needs. We aim to be open and consistent in how we track, record and manage complaints, although as we serve a wide range of customers – from personal banking and wealth customers to large corporates, institutions and governments – we tailor our approach in each of our global businesses. As the table on the right demonstrates, we have a consistent set of principles that enable us to remain customer-focused throughout the complaints process. For further details of complaints volumes by geography, see our ESG Data Pack at www.hsbc.com/esg. How we handle complaints Our principles Our actions Making it easy for customers to complain Customers can complain through the channel that best suits them. We provide a point of contact along with clear information on next steps and timescales. Acknowledging complaints All colleagues welcome complaints as opportunities and exercise empathy to acknowledge our customers’ issues. Complaints are escalated if they cannot be resolved at first point of contact. Keeping the customer up to date We set clear expectations and keep customers informed throughout the complaint resolution process through their preferred channel. Ensuring fair resolution We thoroughly investigate all complaints to address concerns and ensure the right outcome for our customers. Providing available rights We provide customers with information on their rights and the appeal process if they are not satisfied with the outcome of the complaint. Undertaking root cause analysis Complaint causes are analysed on a regular basis to identify and address any systemic issues and to inform process improvements. Wealth and Personal Banking In 2024, we received approximately 887,000 complaints from customers in eight priority markets, and the ratio of complaints per 1,000 customers per month in these markets decreased from 2.2 to 2.0. We had a reduction in complaints in our top three markets (the UK, Hong Kong and Mexico), which comprise 86% of complaints globally. In the UK, complaints fell 9%. During 2024, our two key priorities continued to be complaints prevention, and improving the quality of resolution of the complaints we received. We made good progress in both areas, driven by targeted intervention in priority areas and ongoing regular oversight. This has included identifying prominent complaint themes – such as telephony customer experience, transaction disputes and international payment processing – and allocating them to individual executives as accountable ‘owners’ to remedy the root cause. The decrease in complaints in Hong Kong was primarily driven by improvements in capabilities that make banking with HSBC easier for customers. A deeper customer- centric culture, regular reviews, root cause analysis of customer feedback and greater collaboration across business lines to address emerging customer pain points, also contributed to the fall in complaints. In Mexico, there was a 5.3% fall in the volume of total complaints in 2024 compared with 2023, with unrecognised debit card charges down by 9% despite an increase in transaction volumes. This was achieved through targeted actions, including improving fraud processes and the introduction of enhancements to the way customers receive purchase authorisations. In our private bank, we received 647 complaints, an increase of 140 compared with 2023. This was largely due to the inclusion of complaint data for the private banking operation in India, which received 128 complaints in 2024. Complaint data for this business was reported in WPB figures in 2023. Banking products and service issues represented the largest volume of complaints overall, a high proportion of which were attributable to issues with payment processing and credit cards. Overall, the private bank resolved 646 complaints. WPB complaint volumes 1 (per 1,000 customers per month) 2024 2023 Total 2 2.0 2.2 UK 3 q 1.0 1.1 Hong Kong 3 q 0.7 0.9 Mexico 3 q 5.0 5.2 1 A complaint is any expression of dissatisfaction about WPB’s activities, products or services where a response or resolution is explicitly, or implicitly, expected. 2 Priority markets in 2024 included: the UK, Hong Kong (excluding Hang Seng), Mexico, mainland China, India, UAE, Singapore and Australia, selected based on complaints volume, customer base and strategic importance among other factors. The 2023 total has been revised from 2.3 to 2.2 due to a change in the composition of these eight priority markets. 3 The UK, Hong Kong and Mexico make up 86% of total complaints. Acting on feedback In 2024, we continued to improve our capabilities and tools across the business to enhance the customer experience globally. By consistently measuring customer experience, we actively listen, learn and take action based on what our customers share with us. Additionally, we introduced a customer experience behavioural framework across the bank, aligned with HSBC’s core values. This framework supports our colleagues in meeting minimum service standards and prioritising customer experience in their daily routines. These efforts enable us to identify opportunities to continue to improve our customer experience and systematically track and measure our progress. HSBC Holdings plc Annual Report on Form 20-F 77 How we listen continued Commercial Banking In 2024 we received 46,276 customer and client complaints, an increase of 0.8% from 2023. Of the overall volume, 32,748 came from HSBC UK, 8,779 from Asia-Pacific and the remainder from the rest of our global markets. The most common complaint related to servicing and transactions, with the largest volume of complaints globally coming from business banking customers, representing 68.2% of our total complaints. Although we have seen a minor increase in complaint volumes, this reflects improvements in the quality of our logging process and we have increased our understanding of the root cause of many complaints. In 2024, we enhanced training for our front-line colleagues to ensure they can accurately identify the differences between a complaint, query and feedback and upgraded our complaint reporting tools. For 2025, our focus will be on addressing the root cause of complaint trends, as well as improvements to our systems, processes and customer advice. CMB complaint volumes (000s) 2024 2023 Total 46.2 45.9 UK 1 q 32.7 33.8 Hong Kong 1 p 7.7 6.5 1 The UK and Hong Kong (excluding Hang Seng) account for 87% of total complaints. Acting on feedback In 2024, we have further invested in comprehensive training programmes for our staff to ensure they are equipped with the skills and knowledge needed to manage complaints effectively. This includes training on active listening, empathy, identification and treatment of customers in financial difficulty and conflict resolution. All of our front-line teams globally went through this training to ensure that conduct and the customer are at the heart of our management of client feedback. We have implemented advanced complaint reporting tools that enable us to capture customer feedback more accurately and efficiently. These tools allow us to identify and address issues promptly. Within our Business Banking segment, we continue to work with front-line teams to identify and manage complaints better. Global Banking and Markets In 2024, we received 1,838 customer complaints in Global Banking, an increase of 18.4% from 2023. Of the overall complaint volumes, 37.6% came from Europe and 28.9% came from Asia-Pacific. The most common complaint, at 34.2% of total complaints, related to transactions. In Markets and Securities Services (‘MSS’) complaints decreased by 13.6% to 306. The majority of complaints were operational in nature and resolved in a timely manner. Of the overall MSS complaints, 49% came from Europe and 33.9% from Asia-Pacific, our two largest markets. GBM complaint volumes 1 2024 2023 Total 2,144 1,906 Global Banking 2 p 1,838 1,552 Global Markets and Securities Services 3 q 306 354 1    Globally, a complaint is any expression of dissatisfaction, whether justified or not, relating to the provision of, or failure to provide, a specific product or service or service activity. Within the UK, a complaint is any expression of dissatisfaction – whether justified or not – about our products, services or activities, which suggests we have caused (or might cause) financial loss, material distress or a material inconvenience. 2 Global Banking also includes Global Payments Solutions (previously known as Global Liquidity and Cash Management) and complaints relating to payment operations. 3 Contains Global Research complaint volumes. Acting on feedback In 2024, our focus has been to increase the capture and quality of complaints received within GBM. Our focus has been on doing deep dives into the quality of complaints received and delivering bespoke training on the complaint themes that we see. We have defined robust feedback loops allowing us to learn continuously from customer experiences and embed these into our processes. We regularly review and analyse complaint data to identify trends and implement improvements in our services. Although we have seen growth in complaint volumes, we are seeing higher levels of compliant quality and better decisions to address them in the first instance. 78 HSBC Holdings plc Annual Report on Form 20-F ESG review | Governance Integrity, conduct and fairness Safeguarding the financial system The scale of our work Each month in 2024 we monitored approximately 900 million transactions for signs of financial crime. We performed daily screening of approximately 121 million customer records for sanctions exposure. In 2024, we filed over 113,000 suspicious activity reports to law enforcement and regulatory authorities where we identified potential financial crime. We have continued our efforts to combat financial crime and reduce its impact on our organisation, customers and the communities that we serve. Financial crime includes fraud, bribery and corruption, tax evasion, sanctions and export control violations and evasion, money laundering, terrorist financing and proliferation financing. We manage financial crime risk because it is the right thing to do to protect our customers, shareholders, staff, the communities in which we operate, as well as the integrity of the financial system on which we all rely. We have a financial crime risk management framework that is applicable across all global businesses and functions, and in all countries and territories in which we operate. The financial crime risk framework, which is overseen by the Board, is supported by our financial crime policy that is designed to enable adherence to applicable laws and regulations globally. Annual global mandatory training is provided to all colleagues, with additional targeted training tailored to certain individuals. We carry out regular risk assessments to identify where we need to respond to evolving financial crime threats, as well as to monitor and test our financial crime risk management programme. We continue to invest in new technology; we are enhancing our fraud monitoring capability and our trade screening controls, and investing in the application of machine learning to improve the accuracy and timeliness of our detection capabilities. These new technologies should enhance our ability to respond effectively to unusual activity and be more granular in our risk assessments. Our anti-bribery and corruption policy Our global financial crime policy requires that all activity must be: conducted without intent to bribe or corrupt; reasonable and transparent; considered to be neither lavish nor disproportionate to the professional relationship; appropriately documented with business rationale; and authorised at an appropriate level of seniority. Our global financial crime policy requires that we identify and mitigate the risk of our employees, customers and third parties committing bribery or corruption. Among other controls, we use risk assessments, due diligence and ongoing monitoring following a risk-based approach, to identify and help mitigate the risk that our customers are involved in, or use HSBC’s products or services, to commit bribery or corruption. In 2024, two former employees of an HSBC subsidiary in China were convicted of bribery-related offences and each received a fine and suspended sentence. The HSBC subsidiary in China self- reported this matter to the police and was not a subject of the police investigation or charges. 99% Total percentage of permanent and non- permanent employees who received financial crime training, including on anti-bribery and corruption. Whistleblowing We want colleagues and stakeholders to have confidence in speaking up when they observe unlawful or unethical behaviour. We offer a range of speak-up channels to listen to the concerns of individuals and have a zero tolerance policy for acts of retaliation. Listening through whistleblowing channels Our global whistleblowing channel, HSBC Confidential, is one of our speak-up channels, which allows colleagues and other stakeholders to raise concerns confidentially and, if preferred, anonymously (subject to local laws). In most of our markets, HSBC Confidential concerns are raised through an independent third party, offering 24/7 hotlines and a web portal in multiple languages. We also provide and monitor an external email address for concerns about accounting, internal financial controls or auditing matters (accountingdisclosures@hsbc.com). Concerns are investigated proportionately and independently, with action taken where appropriate. This can include disciplinary action, such as dismissal and adjustments to variable pay and performance ratings, or operational actions including changes to policies and procedures. We continue to actively promote our full range of speak-up channels to colleagues to help ensure their concerns are handled through the most effective route. In 2024, 13% fewer concerns were raised through HSBC Confidential compared with 2023. Of the concerns investigated through the HSBC Confidential channel in 2024, 66% related to individual behaviour and personal conduct, 21% to security and fraud risks, 12% to compliance risks and less than 1% to other categories. The Group Audit Committee has oversight of the Group’s whistleblowing arrangements, and the Chair of the Group Audit Committee acts as HSBC’s Whistleblowers’ Champion with responsibility for ensuring and overseeing the integrity, independence and effectiveness of the Group’s policies and procedures. Regulatory Compliance sets the whistleblowing policy and procedures, and provides the Group Audit Committee with periodic updates on their effectiveness. Specialist teams and investigation functions own whistleblowing controls, with monitoring in place to determine control effectiveness. For further details of the role of the Group Audit Committee in relation to whistleblowing, including updates received in 2024 on operational effectiveness, see page 297 . HSBC Confidential concerns raised in 2024: 1,527 (2023: 1,746) Substantiation rate of concerns investigated through HSBC Confidential in 2024: 35% (2023: 41%) HSBC Holdings plc Annual Report on Form 20-F 79 A responsible approach to tax We seek to pay our fair share of tax in all jurisdictions in which we operate, and to minimise the likelihood of customers using our products and services to evade or inappropriately avoid tax. We also abide by international protocols that affect our organisation. Our approach to tax and governance processes is designed to achieve these goals. Through adoption of the Group’s risk management framework, we seek to ensure that we do not adopt inappropriately tax- motivated transactions or products, and that tax planning is scrutinised and supported by genuine commercial activity. HSBC has no appetite for using aggressive tax structures. With respect to our own taxes, we are guided by the following principles: – We are committed to applying both the letter and spirit of the law. This includes adherence to a variety of measures arising from the OECD Base Erosion and Profit Shifting initiative including the ‘Pillar Two’ global minimum tax rules that apply to the Group from 2024. These rules seek to ensure that the Group pays tax at a minimum rate of 15% in each jurisdiction in which it operates. We have identified 14 jurisdictions that may have an effective tax rate below 15% in 2024. We continually monitor the number of active subsidiaries within each jurisdiction as part of our ongoing entity rationalisation programme. – We seek to ensure that our entities active in nil or low tax jurisdictions have clear business rationale for why they are based in these locations and appropriate transparency over their activities. – We seek to have open and transparent relationships with all tax authorities. Given the size and complexity of our organisation, which operates across 58 jurisdictions, a number of areas of differing interpretation or disputes with tax authorities exist at any point in time. We cooperate with the relevant local tax authorities to mutually agree and resolve these in a timely manner. With respect to our customers’ taxes, we are guided by the following principles: – We have made considerable investments to support external tax transparency initiatives and reduce the risk of banking services being used to facilitate customer tax evasion. Initiatives include the US Foreign Account Tax Compliance Act, the OECD Standard for Automatic Exchange of Financial Account Information (‘Common Reporting Standard’), and the UK legislation on the corporate criminal offence of failing to prevent the facilitation of tax evasion. – We implement processes that aim to ensure that inappropriately tax-motivated products and services are not provided to our customers. Our tax contributions The Group effective tax rate for the year of 22.6% was higher than in the previous year (2023: 19.1%). The effective tax rate for the year increased by 4.8% due to the non- deductible loss in respect of the sale of our business in Argentina, and decreased by 3.6% due to the non-taxable gain on the disposal of HSBC Canada. Further details are provided on page 402 . Tax paid in 2024 is higher than in 2023 mainly because the Hong Kong Inland Revenue Department did not issue HSBC’s corporation tax assessments for 2023 until January 2024, at which time they were paid. The equivalent assessments for 2024 were received and paid in December 2024. The UK bank levy charge for 2024 of $249m was lower than the charge of $339m in 2023, as the charge for 2023 was increased by adjustments arising upon filing prior year returns. As highlighted below, in addition to paying $9.2bn (2023: $6.8bn) of our own tax liabilities during 2024, we collected taxes of $10.1bn (2023: $10.8bn) on behalf of governments around the world. A more detailed geographical breakdown of the taxes paid in 2024 is provided in the ESG Data Pack. Taxes paid – by type of tax Tax on profits $6,080m (2023: $3,685m) Withholding taxes $667m (2023: $432m) Employer taxes $1,003m (2023: $1,052m) Bank levy $135m (2023: $57m) Irrecoverable VAT $1,098m (2023: $1,298m) Other duties and levies $229m 1 (2023: $249m) Taxes paid – by region Europe $2,780m (2023: $2,945m) Asia-Pacific $5,020m (2023: $2,488m) Middle East, North Africa and Türkiye $421m (2023: $296m) North America $291m (2023: $389m) Latin America $700m (2023: $655m) Taxes collected – by region Europe $4,214m (2023: $4,714m) Asia-Pacific $3,223m (2023: $3,226m) Middle East, North Africa and Türkiye $118m (2023: $77m) North America $1,025m (2023: $1,119m) Latin America $1,483m (2023: $1,680m) 1 Other duties and levies includes property taxes of $76m (2023: $91m). 80 HSBC Holdings plc Annual Report on Form 20-F ESG review | Governance Conduct: Our product responsibilities Our conduct approach guides us to do the right thing and to focus on the impact we have for our customers and the financial markets in which we operate. It is embedded into the way we design, approve, market and manage products and services, with a focus on five clear outcomes: – We understand our customers’ needs. – We provide products and services that offer a fair exchange of value. – We service customers’ ongoing needs and put it right if we make a mistake. – We act with integrity in the financial markets we operate in. – We operate resiliently and securely to avoid harm to customers and markets. We train all our colleagues on our approach to customer and market conduct, helping to ensure our conduct outcomes are part of everything we do. Designing products and services Our approach to product development is set out in our policies and provides a clear basis on which informed decisions can be made. Our policies require that products must be fit- for-purpose throughout their existence, meeting regulatory requirements and associated conduct outcomes. Our approach includes: – designing products to meet identified customer needs; – managing products through governance processes, helping to ensure they meet customers’ needs and deliver a fair exchange of value; – periodically reviewing products to help ensure they remain relevant and perform in line with expectations we have set; and – improving, or withdrawing from sale, products which do not meet our customers’ needs or no longer meet our high standards. Meeting our customers’ needs Our policies and procedures set standards to help ensure that we consider and meet customer needs. These include: – enabling customers to understand the key features of products and services; – enabling customers to make informed decisions before purchasing a product or service; and – ensuring processes are in place for the provision of advice to customers. They help us provide the right outcomes for customers, including those with enhanced care needs. This enables us to support customers who are more vulnerable to external impacts. Financial promotion Our policies help to ensure that in the sale of products and services, we use marketing and product materials that support customer understanding and fair customer outcomes. This includes providing information on products and services that is fair, clear and not misleading. We also have controls in place to help ensure our cross-border marketing complies with relevant regulatory requirements. Product governance Our product management policy covers the entire lifecycle of the product. This helps ensure that our products meet our requirements before we sell them and allows continued risk-based oversight of product performance against the intended customer outcomes. When we decide to withdraw a product from sale, we aim to consider the implications for our existing customers and agree actions to help them achieve a fair outcome where appropriate. Our approach with our suppliers We maintain global standards and procedures for the onboarding and use of third-party suppliers. We require suppliers to meet our third-party risk compliance standards and assess them to identify any financial stability concerns. Sustainable procurement Supporting and engaging with our supply chain is vital to the development of our sustainable procurement processes. In 2024: – We continued gathering carbon emission data from our suppliers through CDP (formerly the Carbon Disclosure Project) and introduced a new data collection method to simplify and improve our supplier outreach for scope 3 data collection. – We began implementing decarbonisation plans for our three highest emitting procurement categories: technology; real estate; and professional services. We engaged suppliers on their emissions disclosure plans and carbon reduction targets. We outlined what we expect of our suppliers on these aspects and explored joint opportunities. – We hosted a Supply Chain Decarbonisation Day with senior managers at HSBC and suppliers to facilitate collaboration and discuss innovative decarbonisation solutions with some of our largest suppliers. – We have started developing a biodiversity strategy that aims to integrate biodiversity considerations into our procurement practices and define a clear set of requirements for our suppliers. – Since its launch in 2023, the Supplier Diversity Portal is now live in a number of jurisdictions. Further expansion is planned for 2025 to reach a wider demographic of diverse-owned suppliers (at least 51% owned, managed or controlled by a historically and locally under-represented group). For further details, see www.hsbc.com/who-we-are/esg-and- responsible-business/working-with-suppliers. – To increase engagement with diverse- owned suppliers, we introduced a development programme. The programme is designed to empower diverse-owned suppliers to effectively engage with large corporations, including HSBC, and supports our ambition to further diversify our supply chain, to represent the communities that we operate in. Supplier code of conduct Our supplier code of conduct (‘the code’) was refreshed in 2024, setting out our ambitions and areas of focus on the environment, diversity and human rights, and outlines the minimum standards we expect of our suppliers on these issues. We continue to formalise adherence to the code with clauses in our supplier contracts, which support the right to audit and act if a breach is discovered. At the end of 2024, 96.7% of approximately 10,200 contracted suppliers had either confirmed adherence to the code or provided their own alternative that was accepted by our Global Procurement function. For further details of the number of suppliers in each geographical region, see the ESG Data Pack at www.hsbc.com/esg. HSBC Holdings plc Annual Report on Form 20-F 81 Safeguarding data Data privacy Data Privacy Day In February 2024, we held a global online event for our colleagues to mark International Data Privacy Day. The event was hosted by our Global Head of Data Legal, in collaboration with the International Association of Privacy Professionals. The discussion focused on key developments in the data privacy landscape for 2024 and beyond, including the impact of digital entropy and rapidly evolving AI-related advancements. This was followed by a Q&A with the audience to encourage further dialogue. We are committed to protecting the data we process, in accordance with the laws and regulations of the markets in which we operate. Our approach rests on having the right talent, technology, systems, controls, policies and processes to ensure appropriate management of privacy risk. Our Group-wide data risk policy and principles provide a consistent global approach to managing data privacy risk, and must be applied by all our global businesses and functions. Our privacy principles are available at www.hsbc.com/ who-we-are/esg-and-responsible-business/ managing-risk/operational-risk. We conduct regular employee training and awareness sessions on data privacy and security issues throughout the year. This includes mandatory training that is updated regularly for all our global colleagues, with additional training sessions where needed to keep up to speed with new developments. Where relevant, we encourage our data privacy employees to obtain external accreditation. We provide transparency to our customers and stakeholders on how we collect, use and manage their personal data, and their associated rights. Where relevant, we work with third parties to help ensure adequate protections are provided, in line with our data risk policy and as required under applicable data privacy laws. We offer a broad range of channels in the markets where we operate, through which customers and stakeholders can raise concerns about the privacy of their data. Our dedicated privacy teams report to senior management on data privacy risks and issues, and provide oversight for global data privacy programmes. We review data privacy regularly at multiple governance forums, including at Board level, to help ensure there is appropriate oversight by senior executives. Data privacy laws and regulations continue to evolve globally. We continually monitor the regulatory environment to ensure we respond appropriately to any changes. As part of our three lines of defence model, our Global Internal Audit function provides independent assurance as to whether our data privacy risk management approaches and processes are designed and operating effectively. In addition, we have established data privacy governance structures and continue to embed accountability across all businesses and functions. We continue to implement industry practices for data privacy and security. Our privacy teams work closely with our data protection officers, industry bodies and research institutions to drive the design, implementation and monitoring of privacy solutions. We conduct regular reviews and privacy risk assessments and continue to develop solutions to strengthen our data privacy controls. We have procedures to articulate the actions needed to deal with data privacy considerations. These include notifying regulators, customers or other data subjects, as required under applicable privacy laws and regulations, in the event of a reportable incident occurring. Intellectual property rights practices We have a Group intellectual property risk policy, supported by controls and guidance, to manage risk relating to intellectual property. This is to help ensure that commercially and strategically valuable intellectual property is identified and protected appropriately, including by applying to register trademarks and patents and enforcing our intellectual property rights against unauthorised use by third parties. Our intellectual property framework also helps us avoid infringement of third-party intellectual property rights, supporting our consistent and effective management of intellectual property risk in line with our risk appetite. Responsible AI Artificial intelligence (‘AI’) and other emerging technologies provide the opportunity to process and analyse data at a depth and breadth not previously possible. While these technologies offer significant potential benefits for our customers, they also pose potential ethical risks for the financial services industry and society as a whole. We have a set of principles to help ensure we consider and address the ethical issues that could arise. HSBC’s Principles for the Ethical Use of Data and Artificial Intelligence are available at www.hsbc.com/ai. We continue to develop and enhance our approach to, and oversight of, AI, taking into consideration the fast-evolving regulatory landscape, market developments and best practice. 82 HSBC Holdings plc Annual Report on Form 20-F ESG review | Governance Cybersecurity The threat of a cyber incident remains a concern for our organisation, as it does across the financial sector and other industries. As cyber-threats continue to evolve, failure to protect our operations may result in disruption for our customers and our business, cause financial loss or loss of sensitive data, and can have a negative impact on our customers’ and our own reputation, among other risks. We continue to monitor ongoing geopolitical events and changes to the cyber-threat landscape and take proactive measures with the aim of reducing any impact on our customers. Prevent, detect and mitigate We invest in business and technical controls to help prevent, detect and mitigate cyber threats. Our cybersecurity controls follow a ’defence in depth’ approach, leveraging multiple security layers, and recognising the complexity of our environment. Our ability to detect and respond to attacks through round- the-clock security operations centre capabilities is intended to help reduce the impact of attacks. Our cyber intelligence and threat analysis team proactively collects and analyses internal and external cyber information to continuously evaluate threat levels for the most prevalent attack types and their potential outcomes. We actively participate in the broader cyber intelligence community, including by sharing technical expertise in investigations, alongside others in the financial services industry and government agencies around the world. In 2024, we continued our programme of continual improvement to further strengthen our cyber defences and enhance our cybersecurity capabilities to help reduce the likelihood and impact of unauthorised access, security vulnerabilities being exploited, data leakage, third-party security exposure and advanced malware. One key area of focus is the increasing use of AI, which could be used to facilitate sophisticated cyber-attacks. We are enhancing governance processes to manage potential cybersecurity risks, along with accelerating the potential this technology brings. We work with third parties, including suppliers, financial infrastructure bodies and other non- traditional third parties, in an effort to help reduce the threat of cyber-attacks impacting our business services. We have a third-party security risk management process in place to assess, identify and manage the risks associated with cybersecurity threats with supplier and other third-party relationships. The process includes risk-based cybersecurity due diligence reviews that assess third parties’ cybersecurity programmes against our standards and requirements. Policy and governance We have a robust suite of cybersecurity policies, procedures, and key controls to help with the effective oversight and management of the organisation. This includes but is not limited to defined information security responsibilities for employees, contractors and third parties, as well as standard procedures for cyber incident identification, investigation, mitigation and reporting. We operate a three lines of defence model, aligned to the enterprise risk management framework, to help oversight and challenge of our cybersecurity capabilities and priorities. Within the first line of defence, risk owners within global business and functions are accountable for identifying and managing cyber risk. They work with cybersecurity control owners to apply risk treatment in line with our risk appetite. Our controls are designed to be executed in line with our policies and are reviewed and challenged by our risk stewards representing the second line of defence. They are independently assured by the Global Internal Audit function, the third line of defence. The assessment and management of our cybersecurity risk is led and coordinated by a Global Chief Information Security Officer (‘CISO’). Our Global CISO has extensive experience in financial services, security and resilience as well as strategy, governance, risk management and regulatory compliance. The Global CISO is supported by regional and business-level CISOs. In the event of incidents, the Global CISO and relevant supporting CISOs are informed and are engaged in alignment with our cybersecurity incident response protocols. Key performance indicators, control effectiveness and other matters related to cybersecurity, including significant cyber incidents, are presented on a regular basis to various management risk and control committees including to Board committees, the Group Risk Management Meeting and across global businesses, functions and regions. This is done to help ensure ongoing awareness and management of our cybersecurity position. Our cybersecurity capabilities are periodically assessed against standards issued by the National Institute of Standards and Technology and by independent third parties, and we proactively collaborate with regulators to participate in regular testing activities. In addition, HSBC engages external independent third parties to support our penetration and threat-led penetration testing. Cyber training and awareness We understand the important role our people play in protecting against cybersecurity threats. Our aim is to equip every colleague with the appropriate tools and behaviours they need to keep our organisation and customers’ data safe. We provide cybersecurity training and awareness to all our people, ranging from our top executives to IT developers to front- line branch staff around the world, and we deliver targeted training to staff that are identified as having elevated cyber risk exposure. Boosting gender representation in cybersecurity To help address barriers to opportunity, HSBC Cybersecurity has been working to increase the representation of women in emerging talent via a variety of initiatives across 2024. These include: – Sponsoring the CyberFirst Girls Competition for the second consecutive year, aimed at inspiring girls interested in technology to pursue a career in cybersecurity. – Providing cybersecurity work- shadowing opportunities to undergraduates who are part of the UK-based Women in Technology programme. – Cybersecurity colleagues have hosted a range of events with university students in Poland, Mexico, mainland China, India and the UK. We host an annual Cyber Awareness Month for all colleagues, covering topics such as online safety at home, social media safety, safe hybrid working, and cyber incidents and response. Our dedicated cybersecurity training and awareness team also provides a wide range of education and guidance to both customers and our colleagues about how to spot and prevent online fraud. HSBC Holdings plc Annual Report on Form 20-F 83 Financial review The financial review gives detailed reporting of our financial performance at Group level as well as across the global businesses we reported on in 2024 and legal entities. 84 Financial summary 107 Global businesses and legal entities 129 Reconciliation of alternative performance measures 135 Other information Hong Kong, 1980s. Serving Our Customers. 84 HSBC Holdings plc Annual Report on Form 20-F Financial summary Financial summary Contents 84 Key financial measures: basis of preparation 84 Use of alternative performance measures 86 Critical estimates and judgements 86 Impact of hyperinflationary accounting 87 Consolidated income statement 88 Income statement commentary 92 Consolidated balance sheet 96 Average balance sheet Key financial measures: basis of preparation Return on average tangible equity excluding notable items From 1 January 2024, we revised the adjustments made to our adjusted RoTE measure. Prior to this, we adjusted RoTE for the impact of strategic transactions and the impairment of our investment in Bank of Communications Co., Limited (‘BoCom‘), whereas from 1 January 2024 we have excluded all notable items. This was intended to improve alignment with the treatment of notable items in our other income statement disclosures. The calculation for RoTE excluding notable items, adjusts the ‘profit attributable to the ordinary shareholders, excluding goodwill and other intangible assets impairment‘ for the post-tax impact of notable items. It also adjusts the ‘average tangible equity‘ for the post-tax impact of notable items in each period, which remain as adjusting items for all relevant periods within that calendar year. For a reconciliation from return on equity (‘RoE’) to RoTE excluding notable items, see page 131 . We do not reconcile our forward RoTE guidance to the equivalent reported measure. Banking net interest income Banking net interest income (‘banking NII’) adjusts our NII, primarily for the impact of funding trading and fair value activities reported in interest expense. It represents the Group’s banking revenue that is directly impacted by changes in interest rates. We use this measure to determine the deployment of our surplus funding, and to help optimise our structural hedging and risk management actions. For more information on banking NII, see page 89 . Target basis operating expenses Target basis operating expenses is computed by excluding the direct cost impact of our France retail banking operations and Canada banking business disposals from the 2023 baseline. It is measured on a constant currency basis and excludes notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency, which we consider to be outside of our control. We consider target basis operating expenses to provide useful information to investors by quantifying and excluding the notable items that management considered when setting and assessing cost- related targets. For a reconciliation from reported operating expenses to target basis operating expenses, see page 133 . In 2024, we targeted operating expenses growth on a target basis of approximately 5% compared with 2023. This target reflected our business plan for 2024, which included an increase in staff compensation, higher spend and investment in technology for growth and efficiency, in part mitigated by cost savings from actions taken during 2023. We are targeting growth in target basis operating expenses of approximately 3% in 2025 compared with 2024. Our target basis operating expenses for 2025 excludes the direct cost impact of the business disposals in Canada and Argentina, notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency. Our cost target includes the impact of simplification-related saves associated with our announced reorganisation, see page 107 , which aims to generate approximately $ 0.3b n of cost reductions in 2025. To deliver these reductions, we plan to incur severance and other up- front costs of $ 1.8b n over 2025 and 2026, which will be classified as notable items. We do not reconcile our forward target basis operating expenses guidance to the reported operating expenses. Dividend payout ratio target basis We established a dividend payout ratio target basis of 50% for 2023 and 2024, and we continue to target a payout ratio target basis of 50% for 2025. For the purposes of computing our dividend payout ratio target basis, we exclude from earnings per share material notable items and related impacts. Material notable items are components of our income statement that management would consider as outside the normal course of business and generally non- recurring in nature, which are excluded from our dividend payout ratio calculation and our earnings per share measure, along with related impacts. Material notable items are a subset of notable items for which categorisation is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement. They comprise the impacts of the sales of our banking business in Canada and our retail banking operations in France, the gain following the acquisition of SVB UK, the impacts of the sale of our business in Argentina and the impairment of BoCom. We also exclude HSBC Bank Canada‘s financial results from the 30 June 2022 net asset reference date until completion, as the gain on sale was recognised through a combination of the consolidation of HSBC Bank Canada‘s results in the Group‘s results since this date, and the remaining gain on sale recognised at completion, inclusive of the recycling of related reserves and fair value gains on related hedges. Following the completion of the sale of our banking business in Canada, the Board approved a special dividend of $0.21 per share, which was paid in June 2024, alongside the first interim dividend. For a reconciliation of basic earnings per share to basic earnings per share excluding material notable items and related impacts, see page 134 . We do not reconcile our forward dividend payout ratio target basis guidance to the reported dividend payout ratio. Use of alternative performance measures Our reported results are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IFRS Accounting Standards’), as detailed in the financial statements starting on page 363 . To measure our performance, we supplement our IFRS Accounting Standards figures with non-IFRS Accounting Standards measures, which constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations. These measures include those derived from our reported results that eliminate factors distorting year-on-year comparisons. The ‘constant currency performance’ measure used throughout this report is described below. Definitions and calculations of other alternative performance measures HSBC Holdings plc Annual Report on Form 20-F 85 are included in our ‘Reconciliation of alternative performance measures’ on page 129 . Also, the insurance-specific non-GAAP measure ‘Insurance equity plus CSM net of tax‘, is provided on page 115 , along with its definition and reconciliation to the GAAP measure. All alternative performance measures are reconciled to the closest reported performance measure. The global business segmental results are presented on a constant currency basis in accordance with IFRS 8 ‘Operating Segments’ as detailed in Note 10 ‘Segmental analysis’ on page 405 . Constant currency performance Constant currency performance is computed by adjusting reported results for the effects of foreign currency translation differences, which distort year-on-year comparisons. We consider constant currency performance to provide useful information for investors by aligning internal and external reporting, and reflecting how management assesses year-on-year performance. Notable items and material notable items We separately disclose ‘notable items’, which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature. Certain notable items are classified as ‘material notable items’, which are a subset of notable items. Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement. We exclude material notable items when computing our dividend payout ratio target basis. Material notable items currently comprise the sale of our retail operations in France and our banking business in Canada, the sale of our business in Argentina, the acquisition of SVB UK and the impairment of our investment in BoCom. The tables on pages 108 to 110 and pages 122 to 127 detail the effects of notable items on each of our global business segments, legal entities and selected countries/territories in 2024 , 2023 and 2022 . Impact of strategic transactions To aid the understanding of our results, we separately disclose the impact of strategic transactions classified as material notable items on the results of the Group and our global businesses. At 31 December 2024, strategic transactions classified as material notable items in current and comparative periods comprise the disposal of our retail banking operations in France, the disposal of our banking business in Canada, the sale of our business in Argentina and the acquisition of SVB UK. The impacts of strategic transactions include the gains or losses on classification to held for sale or on acquisition and all other related notable items. They also include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. This is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. We consider the monthly impacts of distorting income statement results when calculating the impact of strategic transactions. See page 111 for supplementary analysis of the impact of strategic transactions. Constant currency revenue and profit before tax excluding notable items We separately report ‘constant currency revenue excluding notable items’ and ‘constant currency profit before tax excluding notable items’, which exclude the impact of notable items and the impact of foreign exchange translation. We consider this measure to provide useful information to investors as it removes items which distort period-on- period comparisons. For a reconciliation of ‘constant currency revenue excluding notable items’ and ‘constant currency profit before tax excluding notable items’ to reported revenue and reported profit respectively, see page 131 . Constant currency revenue and profit before tax excluding notable items and the impact of strategic transactions To aid the understanding of our results, we separately disclose ‘constant currency revenue excluding notable items and the impact of strategic transactions’ and ‘constant currency profit before tax excluding notable items and the impact of strategic transactions’. This measure excludes the impact of strategic transactions classified as material notable items from constant currency revenue and profit before tax excluding notable items. At 31 December 2024, strategic transactions classified as material notable items comprise the disposal of our retail banking operations in France, our banking business in Canada, the sale of our business in Argentina and the acquisition of SVB UK. The impacts quoted include the gains or losses on classification to held for sale or acquisition and all other related notable items. They also include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. It is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. We consider the monthly impacts of distorting income statement results when calculating the impact of strategic transactions. For a reconciliation of ‘constant currency revenue excluding notable items and the impact of strategic transactions’ and ‘constant currency profit before tax excluding notable items and the impact of strategic transactions’ to reported revenue and reported profit respectively, see page 131 . Foreign currency translation differences Foreign currency translation differences reflect the movements of the US dollar against most major currencies during 2024 . We exclude them to derive constant currency data, allowing us to assess balance sheet and income statement performance on a like-for-like basis and to better understand the underlying trends in the business. Foreign currency translation differences for 2024 are computed by retranslating into US dollars for non-US dollar branches, subsidiaries, joint ventures and associates: – the income statements for 2023 and 2022 at the average rates of exchange for 2024 ; and – the balance sheets at 31 December 2023 and 31 December 2022 at the prevailing rates of exchange on 31 December 2024 . No adjustment has been made to the exchange rates used to translate foreign currency-denominated assets and liabilities into the functional currencies of any HSBC branches, subsidiaries, joint ventures or associates. The constant currency data of our operations in Argentina and Türkiye has not been adjusted further for the impacts of hyperinflation. When reference is made to foreign currency translation differences in tables or commentaries, comparative data reported in the functional currencies of HSBC’s operations have been translated at the appropriate exchange rates applied in the current period on the basis described above. 86 HSBC Holdings plc Annual Report on Form 20-F Financial summary Impact of hyperinflationary accounting During 2024, we continued to treat Argentina and Türkiye as hyperinflationary economies for accounting purposes. The impact of applying IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ and the hyperinflation provisions of IAS 21 ’The Effects of Changes in Foreign Exchange Rates’ for our operations in both Argentina and Türkiye was a decrease in the Group’s profit before tax of $917m (2023: $1,297m), comprising a decrease in revenue, including loss on net monetary position, of $840m (2023: $1,586m) and an increase in ECL and operating expenses of $77m (2023: decrease of $289m). These numbers reflect an increase in the consumer price index (‘CPI’) of 3,915.03 (2023: 2,429.13 increase) for Argentina and 825.55 (2023: 730.89 increase) for Türkiye. We have now completed the sale of our business in Argentina, so there will be no impact in 2025 of hyperinflation in this market, although comparative data will include the impact of hyperinflation. Critical estimates and judgements The results of HSBC reflect the choice of accounting policies, assumptions and estimates that underlie the preparation of HSBC’s consolidated financial statements. The material accounting policies, including the policies which include critical estimates and judgements, are described in Note 1.2 on the financial statements. The accounting policies listed below are highlighted as they involve a high degree of uncertainty and have a material impact on the financial statements: – Impairment of amortised cost financial assets and financial assets measured at fair value through other comprehensive income (‘FVOCI’): The most significant judgements relate to defining what is considered to be a significant increase in credit risk, determining the lifetime and point of initial recognition of revolving facilities, selecting and calibrating the probability of default (‘PD’), the loss given default (‘LGD’) and the exposure at default (‘EAD’) models, as well as selecting model inputs and economic forecasts, making assumptions and estimates to incorporate relevant information about late-breaking and past events, current conditions and forecasts of economic conditions, and selecting applicable recovery strategies for certain wholesale credit-impaired loans. A high degree of uncertainty is involved in making estimations using assumptions that are highly subjective and very sensitive to the risk factors. See Note 1.2 (i) on page 381 . – Deferred tax assets: The most significant judgements relate to those made in respect of recoverability, which are based on expected future profitability. See Note 1.2 (l) on page 386 . – Valuation of financial instruments: In determining the fair value of financial instruments a variety of valuation techniques are used, some of which feature significant unobservable inputs and are subject to substantial uncertainty. See Note 1.2 (c) on page 379 . – Impairment of investment in subsidiaries: Impairment testing, including testing for reversal of impairment, involves significant judgement in determining the value in use, and in particular estimating the present values of cash flows expected to arise from continuing to hold the investment, based on a number of management assumptions. See Note 1.2(a) on page 376 . – Impairment of interests in associates: Impairment testing, including testing for reversal of impairment, involves significant judgement in determining the value in use, and in particular estimating the present values of cash flows expected to arise from continuing to hold the investment, based on a number of management assumptions. The most significant judgements relate to the impairment testing of our investment in Bank of Communications Co., Limited (‘BoCom’). See Note 1.2 (a) on page 376 . – Impairment of goodwill and non-financial assets: A high degree of uncertainty is involved in estimating the future cash flows of the cash-generating units (‘CGUs’) and the rates used to discount these cash flows. See Note 1.2 (a) on page 376 and Note 1.2(n) on page 387 . – Provisions: Significant judgement may be required due to the high degree of uncertainty associated with determining whether a present obligation exists, and estimating the probability and amount of any outflows that may arise. See Note 1.2 (m) on page 386 . – Post-employment benefit plans: The calculation of the defined benefit pension obligation involves the determination of key assumptions including discount rate, inflation rate, pension payments and deferred pensions, pay and mortality. See Note 1.2 (k) on page 385 . Given the inherent uncertainties and the high level of subjectivity involved in the recognition or measurement of the items above, it is possible that the outcomes in the next financial year could differ from the expectations on which management’s estimates are based, resulting in the recognition and measurement of materially different amounts from those estimated by management in these financial statements. HSBC Holdings plc Annual Report on Form 20-F 87 Consolidated income statement Summary consolidated income statement 2024 2023 2022 1 2021 2020 $m $m $m $m $m Net interest income 32,733 35,796 30,377 26,489 27,578 Net fee income 12,301 11,845 11,770 13,097 11,874 Net income from financial instruments held for trading or managed on a fair value basis 2 21,116 16,661 10,278 7,744 9,582 Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss 5,901 7,887 (13,831) 4,053 2,081 Net insurance premium income — — — 10,870 10,093 Insurance finance (expense)/income (5,978) (7,809) 13,799 — — Insurance service result 1,310 1,078 809 — — Gain on acquisition 3 — 1,591 — — — Gains/(losses) recognised on sale of business operations 4 (1,752) (61) (2,678) — — Other operating income/(expense) 5 223 (930) 96 1,687 1,866 Total operating income 65,854 66,058 50,620 63,940 63,074 Net insurance claims and benefits paid and movement in liabilities to policyholders — — — (14,388) (12,645) Net operating income before change in expected credit losses and other credit impairment charges 6 65,854 66,058 50,620 49,552 50,429 Change in expected credit losses and other credit impairment charges (3,414) (3,447) (3,584) 928 (8,817) Net operating income 62,440 62,611 47,036 50,480 41,612 Total operating expenses excluding impairment of goodwill and other intangible assets (32,966) (32,355) (32,554) (33,887) (33,044) (Impairment)/reversal of impairment of goodwill and other intangible assets (77) 285 (147) (733) (1,388) Operating profit 29,397 30,541 14,335 15,860 7,180 Share of profit in associates and joint ventures 2,912 2,807 2,723 3,046 1,597 Impairment of interest in associate — (3,000) — — — Profit before tax 32,309 30,348 17,058 18,906 8,777 Tax expense (7,310) (5,789) (809) (4,213) (2,678) Profit for the year 24,999 24,559 16,249 14,693 6,099 Attributable to: –  ordinary shareholders of the parent company 22,917 22,432 14,346 12,607 3,898 –  preference shareholders of the parent company — — — 7 90 –  other equity holders 1,062 1,101 1,213 1,303 1,241 –  non-controlling interests 1,020 1,026 690 776 870 Profit for the year 24,999 24,559 16,249 14,693 6,099 Five-year financial information 2024 2023 2022 1 2021 2020 $ $ $ $ $ Basic earnings per share 1.25 1.15 0.72 0.62 0.19 Diluted earnings per share 1.24 1.14 0.72 0.62 0.19 Dividends per ordinary share (paid in the period) 7 0.82 0.53 0.27 0.22 — % % % % % Dividend payout ratio 8 50 50 44 40 79 Post-tax return on average total assets 0.8 0.8 0.5 0.5 0.2 Return on average ordinary shareholders’ equity 13.6 13.6 9.0 7.1 2.3 Return on average tangible equity 14.6 14.6 10.0 8.3 3.1 Effective tax rate 22.6 19.1 4.7 22.3 30.5 1    From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data for the financial year ended 31 December 2022 have been restated accordingly. Comparative data for the years ended 31 December 2021 and 2020 are prepared on an IFRS 4 basis. 2 Includes a $ 255 m gain ( 2023: $ 315 m loss) on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada and a $ 114 m mark- to-market gain (2023: nil ) on interest rate hedging of the portfolio of retained loans post sale of our retail banking business in France. 3  Gain recognised in respect of the acquisition of SVB UK. 4 This line item has been updated to include amounts from Other operating income relating to all sales of business operations; in the 2023 Annual Report and Accounts, this line item only reflected the disposal of our France retail banking business . The amount in 2024 includes a $1.0b n loss on disposal and a $5.2b n loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This was partly offset by a gain of $4.6b n, inclusive of the recycling of $0.6b n in foreign currency translation reserve losses and $0.4b n of other reserves losses but excluding the $255m gain on the foreign exchange hedging (see footnote 2 above) on the sale of our banking business in Canada. The amount in 2023 primarily reflected losses due to restrictions impacting the recoverability of assets in Russia, partly offset by a gain on sale of our retail banking operations in France. The amount in 2022 included losses from classifying businesses as held for sale as part of a broader restructuring of our European business. 5 Other operating (expense)/income includes a loss on net monetary positions of $1,187 m (2023: $1,667 m; 2022: $ 678 m) as a result of applying IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. 6 Net operating income before change in expected credit losses and other credit impairment charges also referred to as revenue. 7 Includes dividend paid during the period, which consisted of a fourth interim dividend of $ 0.31 per ordinary share in respect of the financial year ended 31 December 2023 paid in April 2024 and the first, second and third interim dividends of $ 0.30 per ordinary share in respect of the financial year ending 31 December 2024. In addition, a special dividend of $ 0.21 per ordinary share from the Canada sale proceeds was paid in June 2024 along with the first interim dividend. 8 In 2024 and 2023, our dividend payout ratio was adjusted for material notable items and related impacts. In 2022, our dividend payout ratio was adjusted for the loss on classification to held for sale of our retail banking business in France, items relating to the sale of our banking business in Canada, and the recognition of certain deferred tax assets. No items were adjusted for in 2021 and 2020. Unless stated otherwise, all tables are presented on a reported basis. For a summary of our financial performance in 2024, see page 27 . For further financial performance data for each global business and legal entity, see pages 107 to 111 and 119 to 129 respectively. The global business segmental results are presented on a constant currency basis in accordance with IFRS 8 ‘Operating Segments’ as set out in Note 10 : Segmental analysis on page 405 . 88 HSBC Holdings plc Annual Report on Form 20-F Financial summary Income statement commentary The following commentary compares Group financial performance for the year ended 2024 with 2023 , unless otherwise stated. For commentary on the Group's financial performance for the year ended 31 December 2023 compared with the year ended 31 December 2022, please see pages 103 to 106 of the annual report of HSBC Holdings plc on Form 20-F for the year ended 31 December 2023. For commentary on the performance of our global businesses for the year ended 31 December 2024, see pages 29 to 35 of the annual report of HSBC Holdings plc on Form 20-F for the year ended 31 December 2024 . For commentary on the performance of our global businesses for the year ended 31 December 2023 compared with the year ended 31 December 2022, see pages 30 to 36 of the annual report of HSBC Holdings plc on Form 20-F for the year ended 31 December 2023. Net interest income Year ended Quarter ended 31 Dec 2024 31 Dec 2023 31 Dec 2022 31 Dec 2024 30 Sep 2024 31 Dec 2023 $m $m $m $m $m $m Interest income 108,631 100,868 52,826 26,004 27,255 26,714 Interest expense (75,898) (65,072) (22,449) (17,819) (19,618) (18,430) Net interest income 32,733 35,796 30,377 8,185 7,637 8,284 Average interest-earning assets 2,099,285 2,161,746 2,143,758 2,113,276 2,088,100 2,164,324 % % % % % % Gross interest yield 1 5.17 4.67 2.46 4.90 5.19 4.90 Less: gross interest payable 1 (3.95) (3.47) (1.24) (3.60) (4.07) (3.83) Net interest spread 2 1.22 1.20 1.22 1.30 1.12 1.07 Net interest margin 3 1.56 1.66 1.42 1.54 1.46 1.52 1 Gross interest yield is the average annualised interest rate earned on average interest-earning assets (‘AIEA’). Gross interest payable is the average annualised interest cost as a percentage of average interest-bearing liabilities. 2 Net interest spread is the difference between the average annualised interest rate earned on AIEA, net of amortised premiums and loan fees, and the average annualised interest rate payable on average interest-bearing funds. 3 Net interest margin is net interest income expressed as an annualised percentage of AIEA. Summary of interest income by type of asset 2024 2023 2022 Average balance Interest income Yield Average balance Interest income Yield Average balance Interest income Yield $m $m % $m $m % $m $m % Short-term funds and loans and advances to banks 349,517 14,727 4.21 403,674 14,770 3.66 445,659 5,577 1.25 Loans and advances to customers 949,825 49,879 5.25 957,717 47,673 4.98 1,022,320 32,543 3.18 Reverse repurchase agreements – non-trading 1 238,694 17,721 7.42 240,263 14,391 5.99 231,058 4,886 2.11 Financial investments 470,182 20,587 4.38 407,363 16,858 4.14 372,702 7,704 2.07 Other interest-earning assets 91,067 5,717 6.28 152,729 7,176 4.70 72,019 2,116 2.94 Total interest-earning assets 2,099,285 108,631 5.17 2,161,746 100,868 4.67 2,143,758 52,826 2.46 Summary of interest expense by type of liability 2024 2023 2022 Average balance Interest expense Cost Average balance Interest expense Cost Average balance Interest expense Cost $m $m % $m $m % $m $m % Deposits by banks 2 66,405 2,930 4.41 60,392 2,401 3.98 75,739 770 1.02 Customer accounts 3 1,385,840 40,173 2.90 1,334,803 34,162 2.56 1,342,342 10,903 0.81 Repurchase agreements – non-trading 1 187,337 15,617 8.34 146,605 10,858 7.41 118,308 3,085 2.61 Debt securities in issue – non-trading 196,440 12,806 6.52 184,867 11,223 6.07 179,775 5,607 3.12 Other interest-bearing liabilities 84,773 4,372 5.16 146,216 6,428 4.40 87,965 2,084 2.37 Total interest-bearing liabilities 1,920,795 75,898 3.95 1,872,883 65,072 3.47 1,804,129 22,449 1.24 1 The average balances for repurchase and reverse repurchase agreements include net amounts where the criteria for offsetting are met, resulting in a lower net balance reported for repurchase agreements and thus higher cost. 2 Including interest-bearing bank deposits only. 3 Including interest-bearing customer accounts only. Net interest income (‘NII’) for 2024 was $32.7bn , a decrease of $3.1bn or 9% compared with 2023. The decrease included a $2.7bn reduction mainly due to the redeployment of our commercial surplus to net trading and fair value assets, for which the associated revenue is reported in ‘net income on financial instruments held for trading or managed on a fair value basis‘. The fall also reflected a $1.0bn loss due to the disposal of our business in Canada and a $0.2bn loss in 2024 related to the early redemption of legacy securities. NII in HSBC UK grew by $0.6bn, including the benefit of our structural hedge and balance sheet growth, partly offset by mortgage pricing pressures. There was also higher NII in Markets Treasury due to reinvestments in our portfolio at higher yields. Excluding the unfavourable impact of foreign currency translation differences, net interest income decreased by $1.4bn or 4%. NII for the fourth quarter of 2024 was $8.2bn , up 7% compared with the previous quarter, and down 1% compared with the fourth quarter of 2023. The increase compared with 3Q24 was predominantly driven by the non-recurrence of the adverse impact in 3Q24 from the early redemption of legacy securities. The decline in NII compared with 4Q23 was predominantly driven by the impact of lower AIEA. Net interest margin (‘NIM’) for 2024 of 1.56% was 10bps lower compared with 2023, reflecting redeployment of our commercial surplus to net trading and fair value assets, and higher interest expense due to higher market rates and an adverse impact of $0.2bn HSBC Holdings plc Annual Report on Form 20-F 89 from the early redemption of legacy securities. The decrease in NIM in 2024 included the unfavourable impact of foreign currency translation differences. Excluding this, NIM decreased by 6bps. NIM for the fourth quarter of 2024 was 1.54% , up 8bps compared with the previous quarter, and up 2bps compared with the fourth quarter of 2023. The increase against the previous quarter was primarily due to the non-recurrence of the adverse impact from the early redemption of legacy securities. The year-on-year increase was predominantly driven by HSBC UK. Interest income for 2024 of $108.6bn increased by $7.8bn compared with 2023, primarily due to an increase in market interest rates. Interest income of $26bn in the fourth quarter of 2024 was down $1.3bn compared with the previous quarter, and down $0.7bn compared with the fourth quarter of 2023. Both the declines were primarily due to lower market interest rates. The change in interest income in 2024 compared with 2023 included an adverse impact of foreign currency translation differences of $2.7bn. After excluding foreign currency translation differences, interest income increased by $10.5bn. Interest expense for 2024 of $75.9bn increased by $10.8bn compared with 2023, primarily due to an increase in market interest rates, growth in customer accounts with higher proportion for term deposits and the impact of the early redemption of legacy securities. The rise in interest expense included the favourable effects of foreign currency translation differences of $1.1bn. Excluding this, interest expense increased by $11.9bn. Interest expense of $17.8bn in the fourth quarter of 2024 was $1.8bn and $0.6bn lower compared with the third quarter of 2024 and the fourth quarter of 2023 respectively. The decrease against the previous quarter was due to the non-recurrence of an adverse impact from the early redemption of legacy securities. The year-on-year decline was primarily due to lower market interest rates. Banking net interest income Year ended Quarter ended 31 Dec 2024 31 Dec 2023 31 Dec 2024 30 Sep 2024 31 Dec 2023 $m $m $m $m $m Net interest income 32,733 35,796 8,185 7,637 8,284 Banking book funding costs used to generate ‘net income from financial instruments held for trading or managed on a fair value basis’ 11,434 8,744 2,874 3,051 2,542 Third-party net interest income from insurance (429) (445) (109) (104) (109) Banking net interest income 43,738 44,095 10,950 10,584 10,717 –  of which: The Hongkong and Shanghai Banking Corporation Limited 21,691 22,024 5,464 5,475 5,566 HSBC UK Bank plc 10,368 9,684 2,663 2,643 2,455 HSBC Bank plc 4,630 4,596 1,182 1,152 1,205 Banking net interest income is an alternative performance measure, and is defined as Group reported net interest income after deducting: – the internal cost to fund trading and fair value net assets for which associated revenue is reported in ‘Net income from financial instruments held for trading or managed on a fair value basis’, also referred to as ‘trading and fair value income’. These funding costs reflect proxy overnight or term interest rates as applied by internal funds transfer pricing; – the funding costs of foreign exchange swaps in Markets Treasury, where an offsetting income or loss is recorded in trading and fair value income. These instruments are used to manage foreign currency deployment and funding in our entities; and – third-party net interest income in our insurance business. In our segmental disclosures, the funding costs of trading and fair value net assets are predominantly recorded in GBM in ‘net income from financial instruments held for trading or managed on a fair value basis’. On consolidation, this funding is eliminated in Corporate Centre, resulting in an increase in the funding costs reported in NII with an equivalent offsetting increase in ‘net income from financial instruments held for trading or managed on a fair value basis’ in this segment. In the consolidated Group results, the cost to fund these trading and fair value net assets is reported in NII. Banking NII was $43.7bn in 2024. The funding costs associated with generating trading and fair value income were $11.4bn , an increase of $2.7bn compared with 2023, primarily reflecting redeployment of our commercial surplus to net trading and fair value assets. Banking NII also deducts third-party NII related to our insurance business, which was $0.4bn, stable compared with 2023. The movement in banking NII also included a reduction from the disposal of our business in Canada of $1.0bn, a $0.2bn loss in 2024 related to the early redemption of legacy securities and from higher interest expense on deposits in part due to balance growth. Banking NII in HSBC UK grew by $0.7bn, including the benefit of our structural hedge and balance sheet growth, partly offset by mortgage pricing pressures. There was higher NII in Markets Treasury due to reinvestments in our portfolio at higher yields. The internally allocated funding to generate trading and fair value income was approximately $200bn at 31 December 2024, a rise of approximately $37bn since 31 December 2023, although it decreased by approximately $9bn during 4Q24. This relates to trading, fair value and associated net asset balances predominantly in GBM. The increase reflected management decisions on the deployment of our commercial surplus. Net fee income of $12.3bn was $0.5bn or 4% higher than in 2023, and included an adverse impact from foreign currency translation differences of $0.2bn , as well as a reduction of $0.4bn due to the impact of the disposal of our banking business in Canada. On a constant currency basis, net fee income was $0.6bn higher, driven by an increase in WPB, while a smaller rise in GBM was offset by a reduction in CMB. In WPB, net fee income increased by $0.6bn . The rise was mainly due to higher income from unit trusts, broking income and funds under management, including in Hong Kong. This reflected stronger equity markets and improved customer sentiment. Cards income grew, including in our main entity in Mexico, as customer spending increased, as well as in our legal entities in Asia, which mitigated the reduction from the disposal of our banking business in Canada. The growth in cards activity resulted in a corresponding rise in fee expense. In GBM, net fee income was stable, including an adverse impact of foreign currency translation of $42m. There was higher broking and underwriting income in our main entity in Europe, although this was partly offset by a rise in associated fee expense. In addition, there was higher fee expense relating to broking and custody, as well as intercompany fee expenses incurred on behalf of other global businesses. In CMB, net fee income decreased by $0.1bn driven by lower fees from credit facilities, notably due to the disposal of our banking operations in Canada. This reduction was partly offset by an increase in fee income from GBM products sold to CMB customers. 90 HSBC Holdings plc Annual Report on Form 20-F Financial summary Net income from financial instruments held for trading or managed on a fair value basis of $21.1bn was $4.5bn higher compared with 2023. This included favourable fair value movements of $0.6bn on the foreign exchange hedging of the proceeds of the sale of our banking business in Canada until completion of the sale. The increase also reflected higher client activity and elevated volatility in Markets and Securities Services in GBM. A component of funding costs incurred to generate this income are reported in NII, and these increased by $2.7bn, compared with 2023. In WPB, income rose by $0.2bn due to a favourable movement related to derivatives in our insurance business and from higher customer trading activity in Wealth, including in our main legal entity in Asia. Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss of $5.9bn fell by $2.0bn compared with 2023. This decrease reflected adverse fair value movements on debt securities, due to movements in interest rates, including in our portfolios in Hong Kong and France, partly offset by improved equity returns. This unfavourable movement resulted in a corresponding reduction in insurance finance expense, which has an offsetting impact for the related liabilities to policyholders. Insurance finance expense of $6.0bn was $1.8bn lower than in 2023, reflecting the impact of investment returns on underlying assets on the value of liabilities to policyholders, which moves inversely with ‘net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss’. Insurance service result of $1.3bn increased by $0.2bn compared with 2023, primarily due to an increase in the release of the contractual service margin (‘CSM’). Gain on acquisition fell by $1.6bn , reflecting the non-recurrence of a gain recognised in respect of the acquisition of SVB UK in 1Q23. Losses recognised on sale of business operations were $1.8bn in 2024. This compared with a gain of $61m in 2023. In 2024, there were losses from completion of the disposal of our business in Argentina, comprising the recycling of $5.2bn of foreign currency translation reserve losses and other reserves to the income statement and a $1.0bn loss on disposal. This was partly offset by a gain of $4.6bn on the sale of our banking business in Canada, inclusive of recycling of foreign currency translation reserve and other reserve losses to the income statement. Other operating income of $0.2bn was $1.3bn higher than in 2023. The increase primarily related to the non-recurrence of losses in 2023 of $1.0bn relating to Treasury repositioning and risk management. The increase also included the non-recurrence of a loss of $0.3bn in 2023 relating to corrections to historical valuation estimates in our life insurance business, and losses related to the disposal of our New Zealand retail mortgage loan portfolio and the merger of HSBC Bank Oman in 2023 with Sohar International. Change in expected credit losses and other credit impairment charges (‘ECL’) were a charge of $3.4bn , stable compared with 2023. ECL charges in CMB were $1.8bn in 2024 and in GBM charges were $0.2bn. This included charges of $0.4bn in respect of commercial real estate in mainland China and of $0.1bn in the Hong Kong real estate sector. This compared with charges of $1.0bn and $0.1bn respectively in these sectors in 2023. In addition, ECL in CMB in 2024 included a charge related to a single exposure in the UK, while charges in HSBC UK reduced compared with 2023. In GBM, charges in 2024 also benefited from a release of stage 3 allowances in HSBC Bank plc related to a single exposure. In WPB, ECL charges were $1.3bn . These primarily related to our legal entity in Mexico, reflecting growth in our unsecured lending portfolio and unemployment trends, and also in Hong Kong . For further details on the calculation of ECL, including the measurement uncertainties and significant judgements applied to such calculations, the impact of the economic scenarios and management judgemental adjustments, see pages 178 to 191 . Operating expenses Year ended 2024 2023 2022 $m $m $m Gross employee compensation and benefits 20,153 19,623 19,288 Capitalised wages and salaries (1,688) (1,403) (1,285) Property and equipment 4,786 4,285 4,949 Amortisation and impairment of intangibles 2,235 1,827 1,701 UK bank levy 249 339 13 Legal proceedings and regulatory matters 145 188 246 Other operating expenses 1 7,163 7,211 7,789 Reported operating expenses 33,043 32,070 32,701 Currency translation (576) (472) Constant currency operating expenses 33,043 31,494 32,229 1 Other operating expenses includes professional fees, contractor costs, transaction taxes, marketing and travel. Staff numbers (full-time equivalents) 1 2024 2023 2022 Global businesses Wealth and Personal Banking 119,791 128,399 128,764 Commercial Banking 45,190 45,884 43,640 Global Banking and Markets 45,983 46,241 46,435 Corporate Centre 340 337 360 At 31 Dec 211,304 220,861 219,199 1 Represents the number of full-time equivalent people with contracts of service with the Group who are being paid at the reporting date. HSBC Holdings plc Annual Report on Form 20-F 91 Operating expenses of $33.0bn were $1.0bn or 3% higher than in 2023, including a favourable impact of $0.6bn from foreign currency translation differences. The increase reflected higher spend and investment in technology and inflationary impacts, while performance- related pay remained stable. Operating expenses were adversely impacted by the non-recurrence of a $0.2bn reversal of historical asset impairments in 2023. These increases were partly offset by the favourable impacts from the completion of business disposals in Canada and France, and a lower UK bank levy of $0.1bn, as 2023 included adjustments relating to prior years. Operating expenses in 2024 benefited from the non- recurrence of a $0.2bn charge in 2023 incurred in the US relating to the FDIC special assessment. Target basis operating expense growth was 5% compared with 2023, in line with our cost growth target. This primarily reflected higher investment spend, including in technology and from inflationary pressures, while our performance-related pay accrual was broadly in line with 2023. Our target basis operating expenses are measured on a constant currency basis, excluding notable items, the impact of retranslating the prior year results of hyperinflationary economies at constant currency, and the direct costs from the sales of our French retail banking operations and our banking business in Canada. For a reconciliation of target basis operating expense to reported operating expenses see page 133 . The number of employees expressed in full-time equivalent staff (‘FTE’) at 31 December 2024 was 211,304 , a decrease of 9,557 compared with 31 December 2023, primarily reflecting the completion of the sales of our banking business in Canada, our retail banking operations in France and our business in Argentina. The number of contractors at 31 December 2024 was 4,226 , a decrease of 450. Share of profit in associates and joint ventures of $2.9bn was $3.1bn higher than in 2023, including an increase in the share of profit from SAB. Impairment of interest in associate. In relation to our investment in BoCom, at 31 December 2024 we concluded that there was no indication of further significant impairment (or indication that an impairment may no longer exist or may have decreased significantly) since 31 December 2023. At 31 December 2023, the Group performed an impairment test on the carrying value of our investment in BoCom which resulted in an impairment of $3.0bn. For further details of our impairment review process, see Note 18 : Interests in associates and joint ventures on page 423 . Tax expense 2024 2023 $m $m Tax (charge)/credit Reported (7,310) (5,789) Currency translation — 222 Constant currency tax (charge)/credit (7,310) (5,567) Notable items 2024 2023 $m $m Tax Tax (charge)/credit on notable items 108 207 Uncertain tax positions — 427 Tax expense The effective tax rate for 2024 of 22.6% was higher than the 19.1% in 2023. The effective tax rate for 2024 was increased by 4.8 percentage points by the non-deductible loss on disposal of our business in Argentina and by 0.7 percentage points by the tax charge arising under the Global Minimum Tax rules, and reduced by 3.6 percentage points by the non-taxable gain on disposal of our banking business in Canada. The effective tax rate for 2023 was increased by 2.3 percentage points by the non-deductible impairment of investments in associates, and reduced by 1.6 percentage points by the release of provisions for uncertain tax positions and by 1.5 percentage points by the non-taxable accounting gain arising on the acquisition of SVB UK. Return on average tangible equity In 2024, RoTE was 14.6 %, compared with 14.6 % in 2023. RoTE excluding notables was 16.0 % in 2024, compared with 16.2 % in 2023. 92 HSBC Holdings plc Annual Report on Form 20-F Financial summary Consolidated balance sheet Five-year summary consolidated balance sheet 2024 2023 2022 1 2021 2020 $m $m $m $m $m Assets Cash and balances at central banks 267,674 285,868 327,002 403,018 304,481 Trading assets 314,842 289,159 218,093 248,842 231,990 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 115,769 110,643 100,101 49,804 45,553 Derivatives 268,637 229,714 284,159 196,882 307,726 Loans and advances to banks 102,039 112,902 104,475 83,136 81,616 Loans and advances to customers 930,658 938,535 923,561 1,045,814 1,037,987 Reverse repurchase agreements – non-trading 252,549 252,217 253,754 241,648 230,628 Financial investments 493,166 442,763 364,726 446,274 490,693 Assets held for sale 27,234 114,134 115,919 3,411 299 Other assets 244,480 262,742 257,496 239,110 253,191 Total assets at 31 Dec 3,017,048 3,038,677 2,949,286 2,957,939 2,984,164 Liabilities Deposits by banks 73,997 73,163 66,722 101,152 82,080 Customer accounts 1,654,955 1,611,647 1,570,303 1,710,574 1,642,780 Repurchase agreements – non-trading 180,880 172,100 127,747 126,670 111,901 Trading liabilities 65,982 73,150 72,353 84,904 75,266 Financial liabilities designated at fair value 138,727 141,426 127,321 145,502 157,439 Derivatives 264,448 234,772 285,762 191,064 303,001 Debt securities in issue 105,785 93,917 78,149 78,557 95,492 Insurance contract liabilities 107,629 120,851 108,816 112,745 107,191 Liabilities of disposal groups held for sale 29,011 108,406 114,597 9,005 — Other liabilities 203,361 216,635 212,319 190,989 204,019 Total liabilities at 31 Dec 2,824,775 2,846,067 2,764,089 2,751,162 2,779,169 Equity Total shareholders’ equity 184,973 185,329 177,833 198,250 196,443 Non-controlling interests 7,300 7,281 7,364 8,527 8,552 Total equity at 31 Dec 192,273 192,610 185,197 206,777 204,995 Total liabilities and equity at 31 Dec 3,017,048 3,038,677 2,949,286 2,957,939 2,984,164 1  From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data for the financial year ended 31 December 2022 have been restated accordingly. Comparative data for the years ended 31 December 2021 and 2020 are prepared on an IFRS 4 basis. A more detailed consolidated balance sheet is contained in the financial statements on page 365 . Five-year selected financial information 2024 2023 2022 1 2021 2020 $m $m $m $m $m Called up share capital 8,973 9,631 10,147 10,316 10,347 Capital resources 2 172,386 171,204 162,423 177,786 184,423 Undated subordinated loan capital 17 18 1,967 1,968 1,970 Preferred securities and dated subordinated loan capital 3 35,258 36,413 29,921 28,568 30,721 Risk-weighted assets 838,254 854,114 839,720 838,263 857,520 Total shareholders’ equity 184,973 185,329 177,833 198,250 196,443 Less: preference shares and other equity instruments (19,070) (17,719) (19,746) (22,414) (22,414) Total ordinary shareholders’ equity 165,903 167,610 158,087 175,836 174,029 Less: goodwill and intangible assets (net of tax) (11,608) (11,900) (11,160) (17,643) (17,606) Tangible ordinary shareholders’ equity 154,295 155,710 146,927 158,193 156,423 Financial statistics Loans and advances to customers as a percentage of customer accounts 56.2% 58.2% 58.8% 61.1% 63.2% Average total shareholders’ equity to average total assets 6.12% 6.01% 5.97% 6.62% 6.46% Net asset value per ordinary share at year-end ($) 4 9.26 8.82 8.01 8.76 8.62 Tangible net asset value per ordinary share at year-end ($) 4 8.61 8.19 7.44 7.88 7.75 Tangible net asset value per fully diluted share at year-end ($) 8.54 8.14 7.39 7.84 7.72 Number of $0.50 ordinary shares in issue (millions) 17,947 19,263 20,294 20,632 20,694 Basic number of $0.50 ordinary shares outstanding, after deducting own shares held (millions) 17,918 19,006 19,739 20,073 20,184 Basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares, after deducting own shares held (millions) 18,062 19,135 19,876 20,189 20,272 Closing foreign exchange translation rates to $: $1: £ 0.797 0.784 0.830 0.739 0.732 $1: € 0.964 0.903 0.937 0.880 0.816 1 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data for the financial year ended 31 December 2022 have been restated accordingly. Comparative data for the years ended 31 December 2021 and 2020 are prepared on an IFRS 4 basis. 2 Capital resources are regulatory total capital, the calculation of which is set out on page 234 . 3 Including perpetual preferred securities, details of which can be found in Note 29 : Subordinated liabilities on page 438 . 4 For the definition, see page 130 . HSBC Holdings plc Annual Report on Form 20-F 93 Combined view of customer lending and customer deposits 1 2024 2023 $m $m Loans and advances to customers 930,658 938,535 Loans and advances to customers of disposal groups reported in ‘Assets held for sale’ 965 73,285 –  banking business in Canada — 56,129 –  retail banking operations in France — 16,902 –  private banking business in Germany 309 — – business in South Africa 656 — –  other — 254 Non-current assets held for sale 12 92 Combined customer lending 931,635 1,011,912 Currency translation — (27,137) Combined customer lending at constant currency 931,635 984,775 Customer accounts 1,654,955 1,611,647 Customer accounts reported in ‘Liabilities of disposal groups held for sale’ 5,399 85,950 –  banking business in Canada — 63,001 –  retail banking operations in France — 22,307 –  private banking business in Germany 2,085 — – business in South Africa 3,294 — –  other 20 642 Combined customer deposits 1,660,354 1,697,597 Currency translation — (38,656) Combined customer deposits at constant currency 1,660,354 1,658,941 1 On 9 April 2024, HSBC Latin America B.V. entered into a binding agreement to sell its business in Argentina to Grupo Financiero Galicia (‘Galicia‘). The sale was completed on 6 December 2024, so is not included in the table above. Balance sheet commentary compared with 31 December 2023 At 31 December 2024, total assets of $3.0tn were $22bn or 1% lower on a reported basis and increased by $45bn or 1% on a constant currency basis. Reported loans and advances to customers as a percentage of customer accounts was 56.2% compared with 58.2% at 31 December 2023. The movement in this ratio reflected a higher growth in customer accounts than in lending. Assets Cash and balances at central banks decreased by $18bn or 6% , which included an $11bn adverse impact of foreign currency translation differences. The decrease was mainly in HSBC UK, reflecting a reduction in repurchase agreements, as well as an increase in the deployment of our cash surplus into financial investments. Cash also decreased in our legal entities in the US to a partial redeployment of surplus liquidity to reverse repurchase agreements, and in Hong Kong due to lower balances maintained for faster payment system flow. This was partly offset by increases in HSBC Bank plc from an increase in deposit bank balances and issuances of new commercial paper and certificates of deposit. Trading assets increased by $26bn or 9% , mainly as we captured increased client activity in equity and debt securities, particularly in our legal entity in Hong Kong and in HSBC Bank plc. The increase in trading assets also reflected the use of surplus liquidity to fund trading activities given the subdued demand for customer lending. Derivative assets increased by $39bn or 17% , reflecting an increase in foreign exchange contracts, mainly in HSBC Bank plc and our legal entities in Asia, as a result of foreign exchange rate movements. The increase in derivative assets was consistent with the increase in derivative liabilities, as the underlying risk is broadly matched. Loans and advances to customers of $931bn decreased by $8bn or 1% on a reported basis. This included an adverse impact of foreign currency translation differences of $21bn . Loans and advances to customers are net of allowances for ECL. On a constant currency basis, loans and advances to customers increased by $14bn , reflecting the following movements. In WPB, customer lending increased by $2bn , reflecting growth in mortgage balances, including in our main legal entities in the UK (up $5bn) and the US (up $3bn). There was also growth in lending in Private Banking (up $3bn) and in unsecured lending (up $1bn). These increases were partly offset by a $7.4bn (€7.1bn) transfer to Corporate Centre of a portfolio of home and certain other loans retained following the sale of our retail banking operations in France. In CMB, customer lending was $6bn higher, reflecting increases in our legal entities in mainland China (up $2bn), India (up $2bn), and Mexico (up $1bn). There were also increases in HSBC UK (up $2bn) and HSBC Bank plc (up $1bn) from higher revolving credit facility balances and term lending. These increases were partly offset by a reduction in lending balances in our main legal entity in Hong Kong (down $3bn) due to lower market wide loan demand and competitive pricing. In GBM, customer lending balances were broadly stable. There was a decrease in lending balances in our main legal entity in Hong Kong (down $6bn) due to muted client demand. The reduction was broadly offset by growth in our legal entity in Singapore (up $3bn) reflecting higher overdraft balances, and in our main legal entity in Australia (up $2bn) from higher term lending balances. In Corporate Centre, the increase in customer balances of $7bn reflected the transfer of balances from WPB, mentioned above. Financial investments increased by $50bn or 11% , mainly in our main legal entities in Hong Kong and Singapore as well as in HSBC UK and HSBC Bank plc from the purchase of debt securities, treasury and other eligible bills, as we redeployed our commercial surplus to benefit from higher yield curves and enhance our hedging activities on net interest income. The increase was across both debt instruments held at fair value through other comprehensive income and instruments held at amortised cost. Assets held for sale decreased by $87bn or 76% following the completion of the sales of our retail banking operations in France and our banking operations in Canada in 2024. Other assets decreased by $18bn or 7% primarily reflecting a reduction in settlement accounts balances, including in HSBC Bank plc as well as in our legal entities in the US and Hong Kong. 94 HSBC Holdings plc Annual Report on Form 20-F Financial summary Liabilities Customer accounts of $1.7tn increased by $43bn or 3% on a reported basis. This included an adverse impact of foreign currency translation differences of $32bn . On a constant currency basis, customer accounts increased by $75bn , reflecting the following movements. In WPB, customer accounts grew by $31bn , reflecting higher interest- bearing savings and time deposit balances due to strong deposit inflow as interest rates remained high. The increase in customer accounts included growth in our main legal entities in Asia (up $30bn) and in HSBC UK (up $6bn) . In CMB, customer accounts increased by $25bn , primarily in our legal entities in Asia (up $12bn), including in Hong Kong (up $8bn) due to an increase in term deposits and in mainland China (up $3bn) due to an increase in current and savings accounts. Balances also increased in HSBC Bank plc (up $9bn) driven by organic growth from existing customers as well as new to bank customers, and in our main legal entity in Mexico (up $3bn). In GBM, customer accounts increased by $20bn , due to higher balances in our legal entities in Asia (up $9bn) supported by term deposit campaigns, and in HSBC Bank plc (up $8bn) driven by an increase in short-term money market account balances. Balances also rose in our main legal entity in the Middle East (up $3bn), including in term deposits and current accounts. Debt securities in issue increased by $12bn or 13% , primarily in HSBC Bank plc mainly driven by new commercial paper and certificates of deposit issued to meet liquidity and funding requirements. Derivative liabilities increased by $30bn or 13% , which is consistent with the increase in derivative assets, since the underlying risk is broadly matched. Liabilities of disposal groups held for sale decreased by $79bn or 73% following the completion of the sales of our retail banking operations in France and our banking operations in Canada during 2024. Other liabilities decreased by $13bn or 6% , including from a $9bn reduction in settlement account balances in our main legal entity in the US. Equity Total shareholders’ equity, including non-controlling interests, of $192bn was stable compared with 31 December 2023. Shareholders’ equity was increased by profits generated of $24bn and net gains through other comprehensive income (‘OCI’) of $2bn . These increases were broadly offset by the impact of dividends paid of $16bn , and the impact of our $11bn share buy-back activities in 2024. The net gains through OCI of $2bn included a favourable movement of $6bn due to the recycling of foreign exchange and other reserves to the income statement, primarily relating to the completion of disposals in Argentina and Canada, as well as a favourable movement of $1bn from the effects of hyperinflation. These impacts were partly offset by $5bn of exchange differences. Financial investments As part of our interest rate hedging strategy, we hold a portfolio of debt instruments, reported within financial investments, which are classified as hold-to-collect-and-sell. As a result, the change in value of these instruments is recognised through ‘debt instruments at fair value through other comprehensive income’ in equity. At 31 December 2024, we had recognised a pre-tax cumulative unrealised loss reserve through other comprehensive income of $3.8bn related to these hold-to-collect-and-sell positions, excluding investments held in our insurance business. This reflected a $0.1bn pre-tax gain in 2024, inclusive of movements on related fair value hedges. In 2023, we recognised a loss of $1.0bn in the income statement in relation to Treasury repositioning and risk management actions in this portfolio, compared with minimal disposal losses in 2024. Overall, the Group is positively exposed to rising interest rates through NII, although there is an adverse impact on our capital base in the early stages of a rising interest rate environment due to the fair value of hold-to-collect-and-sell instruments. Over time, these adverse movements will unwind as the instruments reach maturity, although not all will necessarily be held to maturity, or as interest rates begin to fall. We also hold a portfolio of financial investments measured at amortised cost, which are classified as hold-to-collect. At 31 December 2024, there was a cumulative unrecognised loss of $2.9bn . This included an unrealised loss of $2.2bn that related to debt instruments held to manage our interest rate exposure, representing a deterioration of $1.2bn during 2024 . Customer accounts by country/territory 2024 2023 $m $m Hong Kong 575,141 543,504 UK 524,251 508,181 US 99,278 99,607 Singapore 76,737 73,547 Mainland China 63,169 56,006 France 40,384 42,666 Australia 31,951 32,071 Germany 1 23,564 30,641 Mexico 27,525 29,423 UAE 28,008 24,882 India 27,199 24,377 Taiwan 17,067 16,949 Malaysia 17,038 15,983 Egypt 4,137 5,858 Indonesia 5,558 5,599 Türkiye 3,489 3,510 Other 1 90,459 98,843 At 31 Dec 1,654,955 1,611,647 1 At 31 December 2024, customer accounts of $ 5 bn met the criteria to be classified as held for sale and are reported within ‘Liabilities of disposal groups held for sale’ on the balance sheet, of which $ 3 bn and $ 2 bn belongs to the planned sale of our South Africa business and planned sale of our private banking business in Germany, respectively. Refer to Note 23 on page 433 for further details. HSBC Holdings plc Annual Report on Form 20-F 95 Loans and advances, deposits by currency At 31 Dec 2024 $m USD GBP HKD EUR CNY Others 1 Total Loans and advances to banks 33,727 15,267 5,340 4,137 8,129 35,439 102,039 Loans and advances to customers 171,530 286,797 203,586 68,437 51,966 148,342 930,658 Total loans and advances 205,257 302,064 208,926 72,574 60,095 183,781 1,032,697 Deposits by banks 31,415 18,771 3,973 8,788 4,114 6,936 73,997 Customer accounts 476,210 426,747 316,997 124,452 67,405 243,144 1,654,955 Total deposits 507,625 445,518 320,970 133,240 71,519 250,080 1,728,952 31 Dec 2023 Loans and advances to banks 33,231 15,632 7,106 4,688 8,772 43,473 112,902 Loans and advances to customers 170,274 284,261 213,079 68,655 49,594 152,672 938,535 Total loans and advances 203,505 299,893 220,185 73,343 58,366 196,145 1,051,437 Deposits by banks 28,744 18,231 2,597 6,997 4,517 12,077 73,163 Customer accounts 441,967 423,725 305,520 128,444 63,535 248,456 1,611,647 Total deposits 470,711 441,956 308,117 135,441 68,052 260,533 1,684,810 1 ‘Others’ includes items with no currency information available of $ 878 m for loans to banks (2023: $ 1,592 m), $ 941 m for loans to customers (2023: $ 1,904 m), nil for deposits by banks (2023: $ 11 m) and $ 6 m for customer accounts (2023: $ 8 m). Risk-weighted assets Risk-weighted assets (‘RWAs‘) decreased by $ 15.8 bn during the year, primarily due to strategic disposals of $ 47.8 bn, a decrease of $ 22.2 bn from foreign currency translation differences and a $ 8.9 bn reduction from methodology and policy changes, mainly driven by a $7.5bn fall due to regulatory changes related to the risk-weighting of residential mortgages in Hong Kong. These were offset by the increase of $63.1bn RWAs, reflected in the following movements: – a $ 49.4 bn increase in asset size, which was in part attributed to a $14.6bn rise in operational risk, driven by an increase in average income. Further increases were due to corporate lending growth, largely in HSBC UK Bank plc and in SAB, higher sovereign exposures in Other trading entities and Asia, and retail mortgage growth in the US and HSBC UK Bank plc; and – a $ 7.4 bn increase mainly following a revision to the definition of default in our probability of default (‘PD‘) models for exposures to financial institutions and post-model adjustments in Hong Kong, and a $ 6.3 bn increase from credit risk migrations in Asia, including in the Hong Kong commercial real estate sector. In January 2025, the PRA announced the delay of Basel 3.1 implementation to 1 January 2027 pending US developments. The near-final rules released in September 2024 are now subject to a three-year transitional provision, ensuring that the date for full implementation remains 1 January 2030. We expect that the impact on our CET1 ratio will be a modest benefit. RWAs by currency At 31 Dec 2024 $m USD GBP HKD EUR CNY Others Total RWAs 1 205,645 165,684 136,001 67,440 56,561 206,923 838,254 31 Dec 2023 RWAs 1 202,697 155,231 135,701 69,996 57,907 232,582 854,114 1 RWAs include credit risk, market risk and operational risk RWAs. 96 HSBC Holdings plc Annual Report on Form 20-F Financial summary Average balance sheet Average balance sheet and net interest income Average balances and related interest are shown for the domestic operations of our principal commercial banks by legal entity. ‘Other trading entities’ comprise the operations of our principal commercial banking and consumer finance entities outside their domestic markets and all other banking operations, including investment banking balances and transactions. Average balances are based on daily averages for the principal areas of our banking activities with monthly or less frequent averages used elsewhere. Balances and transactions with fellow subsidiaries are reported gross in the principal commercial banking and consumer finance entities, and the elimination entries are included within ‘Holding companies, shared service centres and intra-group eliminations’. Net interest margin numbers are calculated by dividing net interest income as reported in the income statement by the average interest- earning assets from which interest income is reported within the ‘Net interest income’ line of the income statement. Total interest-earning assets include credit-impaired loans where the carrying amount has been adjusted as a result of impairment allowances. In accordance with IFRSs, we recognise interest income on credit-impaired assets after the carrying amount has been adjusted as a result of impairment. Fee income that forms an integral part of the effective interest rate of a financial instrument is recognised as an adjustment to the effective interest rate and recorded in ‘Interest income’. Assets 2024 2023 Average balance Interest income Yield Average balance Interest income Yield $m $m % $m $m % Summary Interest-earning assets measured at amortised cost (itemised below) 2,099,285 108,631 5.17 2,161,746 100,868 4.67 Trading assets and financial assets designated and otherwise mandatorily measured at fair value through profit or loss 244,686 7,943 3.25 215,435 6,598 3.06 Expected credit losses provision (10,633) N/A N/A (11,603) N/A N/A Non-interest-earning assets 729,136 N/A N/A 694,309 N/A N/A Total assets and interest income 3,062,474 116,574 3.81 3,059,887 107,466 3.51 Average yield on all interest-earning assets 4.97 4.52 Short-term funds and loans and advances to banks HSBC Bank plc 151,675 5,993 3.95 174,004 6,201 3.56 HSBC UK Bank plc 76,705 3,255 4.24 100,780 3,486 3.46 The Hongkong and Shanghai Banking Corporation Limited 86,976 3,250 3.74 88,089 3,078 3.49 HSBC Bank Middle East Limited 6,960 418 6.01 6,289 354 5.63 HSBC North America Holdings Inc. 29,434 1,275 4.33 33,034 1,136 3.44 HSBC Bank Canada 13 — — 102 2 1.96 Grupo Financiero HSBC, S.A. de C.V. 3,037 298 9.81 2,609 267 10.23 Other trading entities 5,992 812 13.55 12,752 807 6.33 Holding companies, shared service centres and intra-group eliminations (11,275) (574) 5.09 (13,985) (561) 4.01 At 31 Dec 349,517 14,727 4.21 403,674 14,770 3.66 Loans and advances to customers HSBC Bank plc 110,123 5,740 5.21 109,576 4,989 4.55 HSBC UK Bank plc 275,614 13,176 4.78 261,516 11,219 4.29 The Hongkong and Shanghai Banking Corporation Limited 455,258 21,804 4.79 467,179 21,821 4.67 HSBC Bank Middle East Limited 20,558 1,313 6.39 19,769 1,229 6.22 HSBC North America Holdings Inc. 56,149 3,403 6.06 54,129 3,175 5.87 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 26,704 3,631 13.60 24,844 3,406 13.71 Other trading entities 5,642 918 16.27 21,083 2,338 11.09 Holding companies, shared service centres and intra-group eliminations (223) (106) 47.53 (379) (504) 132.98 At 31 Dec 949,825 49,879 5.25 957,717 47,673 4.98 Reverse repurchase agreements – banks 1 HSBC Bank plc 38,819 3,293 8.48 53,042 3,177 5.99 HSBC UK Bank plc 2,401 109 4.54 1,700 69 4.06 The Hongkong and Shanghai Banking Corporation Limited 57,293 2,384 4.16 65,387 2,437 3.73 HSBC Bank Middle East Limited 4,195 243 5.79 3,105 171 5.51 HSBC North America Holdings Inc. 12,262 840 6.85 8,859 645 7.28 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 2,599 281 10.81 2,419 254 10.50 Other trading entities 2,182 363 16.64 3,825 604 15.79 Holding companies, shared service centres and intra-group eliminations (15,962) (833) 5.22 (25,187) (871) 3.46 At 31 Dec 103,789 6,680 6.44 113,150 6,486 5.73 HSBC Holdings plc Annual Report on Form 20-F 97 Assets (continued) 2024 2023 Average balance Interest income Yield Average balance Interest income Yield $m $m % $m $m % Reverse repurchase agreements – customers 1 HSBC Bank plc 46,092 4,178 9.06 36,414 2,707 7.43 HSBC UK Bank plc 7,832 478 6.10 5,841 327 5.60 The Hongkong and Shanghai Banking Corporation Limited 41,295 1,368 3.31 49,010 970 1.98 HSBC Bank Middle East Limited 2,644 135 5.11 2,418 113 4.67 HSBC North America Holdings Inc. 42,410 4,851 11.44 34,842 3,756 10.78 HSBC Bank Canada 2 — — 36 2 5.56 Grupo Financiero HSBC, S.A. de C.V. 280 32 11.43 269 31 11.52 Other trading entities — — — — — — Holding companies, shared service centres and intra-group eliminations (5,650) (1) 0.02 (1,717) (1) 0.06 At 31 Dec 134,905 11,041 8.18 127,113 7,905 6.22 Financial investments HSBC Bank plc 70,702 3,013 4.26 51,179 1,866 3.65 HSBC UK Bank plc 41,036 1,845 4.50 27,025 891 3.30 The Hongkong and Shanghai Banking Corporation Limited 274,924 11,023 4.01 241,467 8,664 3.59 HSBC Bank Middle East Limited 11,690 565 4.83 10,682 451 4.22 HSBC North America Holdings Inc. 44,044 1,945 4.42 39,961 1,634 4.09 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 5,150 481 9.34 4,050 291 7.19 Other trading entities 3,375 802 23.76 11,091 1,908 17.20 Holding companies, shared service centres and intra-group eliminations 19,261 913 4.74 21,908 1,153 5.26 At 31 Dec 470,182 20,587 4.38 407,363 16,858 4.14 Other interest-earning assets HSBC Bank plc 59,244 2,587 4.37 58,744 3,197 5.44 HSBC UK Bank plc 252 35 13.89 1,304 79 6.06 The Hongkong and Shanghai Banking Corporation Limited 10,747 653 6.08 11,182 744 6.65 HSBC Bank Middle East Limited (178) 1 (0.56) 583 2 0.34 HSBC North America Holdings Inc. 3,726 195 5.23 3,720 233 6.26 HSBC Bank Canada 19,475 984 5.05 82,832 4,023 4.86 Grupo Financiero HSBC, S.A. de C.V. 315 15 4.76 650 24 3.69 Other trading entities 3,551 1,922 54.13 104 1,853 1,781.73 Holding companies, shared service centres and intra-group eliminations (6,065) (675) 11.13 (6,390) (2,979) 46.62 At 31 Dec 91,067 5,717 6.28 152,729 7,176 4.70 Total interest-earning assets HSBC Bank plc 476,655 24,804 5.20 482,959 22,137 4.58 HSBC UK Bank plc 403,840 18,898 4.68 398,166 16,071 4.04 The Hongkong and Shanghai Banking Corporation Limited 926,493 40,482 4.37 922,314 37,714 4.09 HSBC Bank Middle East Limited 45,869 2,675 5.83 42,846 2,320 5.41 HSBC North America Holdings Inc. 188,025 12,509 6.65 174,545 10,579 6.06 HSBC Bank Canada 19,490 984 5.05 82,970 4,027 4.85 Grupo Financiero HSBC, S.A. de C.V. 38,085 4,738 12.44 34,841 4,273 12.26 Other trading entities 20,742 4,817 23.22 48,855 7,510 15.37 Holding companies, shared service centres and intra-group eliminations (19,914) (1,276) 6.41 (25,750) (3,763) 14.61 At 31 Dec 2,099,285 108,631 5.17 2,161,746 100,868 4.67 1 The average balances for repurchase and reverse repurchase agreements include net amounts where the criteria for offsetting are met, resulting in a lower net balance reported for repurchase agreements and thus higher cost. Equity and liabilities 2024 2023 Average balance Interest expense Cost Average balance Interest expense Cost $m $m % $m $m % Summary Interest-bearing liabilities measured at amortised cost (itemised below) 1,920,795 75,898 3.95 1,872,883 65,072 3.47 Trading liabilities and financial liabilities designated at fair value (excluding own debt issued) 143,636 5,271 3.67 126,969 4,960 3.91 Non-interest bearing current accounts 220,291 N/A N/A 253,741 N/A N/A Total equity and other non-interest bearing liabilities 777,753 N/A N/A 806,294 N/A N/A Total equity and liabilities 3,062,475 81,169 2.65 3,059,887 70,032 2.29 Average cost on all interest-bearing liabilities 3.93 3.50 98 HSBC Holdings plc Annual Report on Form 20-F Financial summary Equity and liabilities (continued) 2024 2023 Average balance Interest expense Cost Average balance Interest expense Cost $m $m % $m $m % Deposits by banks 1 HSBC Bank plc 33,041 1,376 4.16 29,222 1,137 3.89 HSBC UK Bank plc 13,265 743 5.60 12,917 616 4.77 The Hongkong and Shanghai Banking Corporation Limited 24,561 611 2.49 22,416 507 2.26 HSBC Bank Middle East Limited 5,870 303 5.16 4,253 200 4.70 HSBC North America Holdings Inc. 9,012 329 3.65 8,150 315 3.87 HSBC Bank Canada 27 — — 270 6 2.22 Grupo Financiero HSBC, S.A. de C.V. 648 74 11.42 540 101 18.70 Other trading entities 890 46 5.17 3,245 31 0.96 Holding companies, shared service centres and intra-group eliminations (20,909) (552) 2.64 (20,621) (512) 2.48 At 31 Dec 66,405 2,930 4.41 60,392 2,401 3.98 Debt Securities in issue – non trading HSBC Bank plc 47,684 2,536 5.32 38,067 1,887 4.96 HSBC UK Bank plc 22,042 1,357 6.16 18,285 759 4.15 The Hongkong and Shanghai Banking Corporation Limited 45,303 2,772 6.12 48,728 2,816 5.78 HSBC Bank Middle East Limited 1,668 67 4.02 1,970 73 3.71 HSBC North America Holdings Inc. 26,551 1,694 6.38 23,921 1,505 6.29 HSBC Bank Canada 181 12 6.63 741 51 6.88 Grupo Financiero HSBC, S.A. de C.V. 3,429 353 10.29 1,696 92 5.42 Other trading entities 1,608 142 8.83 1,643 155 9.43 Holding companies, shared service centres and intra-group eliminations 47,974 3,873 8.07 49,816 3,885 7.80 At 31 Dec 196,440 12,806 6.52 184,867 11,223 6.07 Customer accounts 2 HSBC Bank plc 258,026 10,753 4.17 230,846 8,511 3.69 HSBC UK Bank plc 279,227 6,156 2.20 269,034 4,532 1.68 The Hongkong and Shanghai Banking Corporation Limited 738,028 17,654 2.39 702,788 14,523 2.07 HSBC Bank Middle East Limited 14,725 520 3.53 12,996 382 2.94 HSBC North America Holdings Inc. 78,919 3,030 3.84 77,557 2,731 3.52 HSBC Bank Canada — — — 1 — — Grupo Financiero HSBC, S.A. de C.V. 22,573 1,555 6.89 22,579 1,489 6.59 Other trading entities 7,123 1,012 14.21 28,887 2,396 8.29 Holding companies, shared service centres and intra-group eliminations (12,781) (507) 3.97 (9,885) (402) 4.07 At 31 Dec 1,385,840 40,173 2.90 1,334,803 34,162 2.56 Repurchase agreements – with banks 3 HSBC Bank plc 17,981 2,212 12.30 22,132 1,915 8.65 HSBC UK Bank plc 317 23 7.26 656 34 5.18 The Hongkong and Shanghai Banking Corporation Limited 60,491 2,640 4.36 43,153 1,368 3.17 HSBC Bank Middle East Limited 3,276 178 5.43 1,982 99 4.99 HSBC North America Holdings Inc. 10,110 655 6.48 5,542 444 8.01 HSBC Bank Canada — — — — — — Grupo Financiero HSBC, S.A. de C.V. 181 25 13.81 296 36 12.16 Other trading entities 304 43 14.14 737 114 15.47 Holding companies, shared service centres and intra-group eliminations (18,373) (881) 4.80 (24,798) (1,009) 4.07 At 31 Dec 74,287 4,895 6.59 49,700 3,001 6.04 Repurchase agreements – with customers 3 HSBC Bank plc 44,267 4,090 9.24 34,218 2,514 7.35 HSBC UK Bank plc 3,147 273 8.67 7,556 428 5.66 The Hongkong and Shanghai Banking Corporation Limited 22,262 1,108 4.98 22,496 994 4.42 HSBC Bank Middle East Limited 19 1 5.26 — — — HSBC North America Holdings Inc. 42,071 4,821 11.46 31,161 3,538 11.35 HSBC Bank Canada 230 13 5.65 487 25 5.13 Grupo Financiero HSBC, S.A. de C.V. 3,850 415 10.78 3,429 382 11.14 Other trading entities 10 1 10.00 12 1 8.33 Holding companies, shared service centres and intra-group eliminations (2,806) — — (2,454) (25) 1.02 At 31 Dec 113,050 10,722 9.48 96,905 7,857 8.11 HSBC Holdings plc Annual Report on Form 20-F 99 Equity and liabilities (continued) 2024 2023 Average balance Interest expense Cost Average balance Interest expense Cost $m $m % $m $m % Other interest-bearing liabilities HSBC Bank plc 54,689 2,582 4.72 65,326 3,498 5.35 HSBC UK Bank plc 426 16 3.76 607 19 3.13 The Hongkong and Shanghai Banking Corporation Limited 14,052 619 4.41 16,699 800 4.79 HSBC Bank Middle East Limited 274 14 5.11 92 14 15.22 HSBC North America Holdings Inc. 7,582 367 4.84 3,253 334 10.27 HSBC Bank Canada 16,483 659 4.00 70,814 2,519 3.56 Grupo Financiero HSBC, S.A. de C.V. 183 24 13.11 191 27 14.14 Other trading entities 2,882 798 27.69 271 1,046 385.98 Holding companies, shared service centres and intra-group eliminations (11,798) (707) 5.99 (11,037) (1,829) 16.57 At 31 Dec 84,773 4,372 5.16 146,216 6,428 4.40 Total interest-bearing liabilities HSBC Bank plc 455,688 23,549 5.17 419,811 19,462 4.64 HSBC UK Bank plc 318,424 8,568 2.69 309,055 6,388 2.07 The Hongkong and Shanghai Banking Corporation Limited 904,697 25,404 2.81 856,280 21,008 2.45 HSBC Bank Middle East Limited 25,832 1,083 4.19 21,293 768 3.61 HSBC North America Holdings Inc. 174,245 10,896 6.25 149,584 8,867 5.93 HSBC Bank Canada 16,921 684 4.04 72,313 2,601 3.60 Grupo Financiero HSBC, S.A. de C.V. 30,864 2,446 7.93 28,731 2,127 7.40 Other trading entities 12,817 2,042 15.93 34,795 3,743 10.76 Holding companies, shared service centres and intra-group eliminations (18,693) 1,226 (6.56) (18,979) 108 (0.57) At 31 Dec 1,920,795 75,898 3.95 1,872,883 65,072 3.47 1 This includes interest-bearing bank deposits only. See page 104 for an analysis of all bank deposits. 2 This includes interest-bearing customer accounts only. See page 105 for an analysis of all customer accounts. 3 The average balances for repurchase and reverse repurchase agreements include net amounts where the criteria for offsetting are met, resulting in a lower net balance reported for repurchase agreements and thus higher cost. Net interest margin 1 2024 2023 2022 % % % HSBC Bank plc 0.26 0.55 0.51 HSBC UK Bank plc 2.56 2.43 1.89 The Hongkong and Shanghai Banking Corporation Limited 1.63 1.81 1.54 HSBC Bank Middle East Limited 3.47 3.62 2.38 HSBC North America Holdings Inc. 0.86 0.98 1.06 HSBC Bank Canada 1.54 1.54 1.49 Grupo Financiero HSBC, S.A. de C.V. 6.02 6.17 6.22 Other trading entities 13.37 7.71 4.49 At 31 Dec 1.56 1.66 1.42 1 Net interest margin is calculated as net interest income divided by average interest-earning assets. Distribution of average total assets 2024 2023 2022 % % % HSBC Bank plc 30.6 30.0 29.0 HSBC UK Bank plc 13.7 14.0 14.0 The Hongkong and Shanghai Banking Corporation Limited 45.4 44.0 44.0 HSBC Bank Middle East Limited 1.9 2.0 2.0 HSBC North America Holdings Inc. 8.4 8.0 9.0 HSBC Bank Canada 0.7 3.0 3.0 Grupo Financiero HSBC, S.A. de C.V. 1.6 2.0 1.0 Other trading entities 1.1 2.0 2.0 Holding companies, shared service centres and intra-group eliminations (3.4) (5.0) (4.0) At 31 Dec 100.0 100.0 100.0 100 HSBC Holdings plc Annual Report on Form 20-F Financial summary Analysis of changes in net interest income and net interest expense The following tables allocate changes in interest income and interest expense between volume and rate for 2024 compared with 2023 , and for 2023 compared with 2022 . We isolate rate variances and allocate any change arising from both volume and rate/volume to volume. Interest income Increase/(decrease) in 2024 compared with 2023 Increase/(decrease) in 2023 compared with 2022 2024 Volume Rate 2023 Volume Rate 2022 $m $m $m $m $m $m $m Short-term funds and loans and advances to banks HSBC Bank plc 5,993 (887) 679 6,201 (149) 4,815 1,535 HSBC UK Bank plc 3,255 (1,017) 786 3,486 (694) 2,467 1,713 The Hongkong and Shanghai Banking Corporation Limited 3,250 (48) 220 3,078 (122) 1,934 1,266 HSBC Bank Middle East Limited 418 40 24 354 65 168 121 HSBC North America Holdings Inc. 1,275 (155) 294 1,136 (356) 966 526 HSBC Bank Canada — — (2) 2 (119) 44 77 Grupo Financiero HSBC, S.A. de C.V. 298 42 (11) 267 29 76 162 Other trading entities 812 (916) 921 807 36 541 230 Holding companies, shared service centres and intra-group eliminations (574) 138 (151) (561) 17 (525) (53) At 31 Dec 14,727 (2,263) 2,220 14,770 (1,547) 10,740 5,577 Loans and advances to customers HSBC Bank plc 5,740 28 723 4,989 (159) 2,557 2,591 HSBC UK Bank plc 13,176 676 1,281 11,219 526 3,593 7,100 The Hongkong and Shanghai Banking Corporation Limited 21,804 (578) 561 21,821 (1,052) 8,619 14,254 HSBC Bank Middle East Limited 1,313 50 34 1,229 (49) 497 781 HSBC North America Holdings Inc. 3,403 125 103 3,175 (98) 1,294 1,979 HSBC Bank Canada — — — — (1,684) — 1,684 Grupo Financiero HSBC, S.A. de C.V. 3,631 252 (27) 3,406 641 391 2,374 Other trading entities 918 (2,512) 1,092 2,338 (143) 653 1,828 Holding companies, shared service centres and intra-group eliminations (106) 74 324 (504) (40) (416) (48) At 31 Dec 49,879 (380) 2,586 47,673 (3,272) 18,402 32,543 Reverse repurchase agreements – with banks HSBC Bank plc 3,293 (1,205) 1,321 3,177 1,226 1,307 644 HSBC UK Bank plc 109 32 8 69 1 46 22 The Hongkong and Shanghai Banking Corporation Limited 2,384 (334) 281 2,437 64 1,153 1,220 HSBC Bank Middle East Limited 243 63 9 171 23 95 53 HSBC North America Holdings Inc. 840 233 (38) 645 (123) 560 208 HSBC Bank Canada — — — — (19) — 19 Grupo Financiero HSBC, S.A. de C.V. 281 20 7 254 83 36 135 Other trading entities 363 (274) 33 604 251 122 231 Holding companies, shared service centres and intra-group eliminations (833) 481 (443) (871) (514) (50) (307) At 31 Dec 6,680 (609) 803 6,486 381 3,880 2,225 Reverse repurchase agreements – with customers HSBC Bank plc 4,178 877 594 2,707 (7) 1,813 901 HSBC UK Bank plc 478 122 29 327 (306) 494 139 The Hongkong and Shanghai Banking Corporation Limited 1,368 (254) 652 970 75 521 374 HSBC Bank Middle East Limited 135 11 11 113 26 50 37 HSBC North America Holdings Inc. 4,851 865 230 3,756 636 2,012 1,108 HSBC Bank Canada — — (2) 2 (165) 78 89 Grupo Financiero HSBC, S.A. de C.V. 32 1 — 31 6 13 12 Other trading entities — — — — — — — Holding companies, shared service centres and intra-group eliminations (1) (1) 1 (1) 1 (3) 1 At 31 Dec 11,041 645 2,491 7,905 166 5,078 2,661 HSBC Holdings plc Annual Report on Form 20-F 101 Interest income (continued) Increase/(decrease) in 2024 compared with 2023 Increase/(decrease) in 2023 compared with 2022 2024 Volume Rate 2023 Volume Rate 2022 $m $m $m $m $m $m $m Financial investments HSBC Bank plc 3,013 835 312 1,866 162 928 776 HSBC UK Bank plc 1,845 630 324 891 264 359 268 The Hongkong and Shanghai Banking Corporation Limited 11,023 1,345 1,014 8,664 1,172 4,026 3,466 HSBC Bank Middle East Limited 565 49 65 451 61 254 136 HSBC North America Holdings Inc. 1,945 179 132 1,634 106 692 836 HSBC Bank Canada — — — — (252) — 252 Grupo Financiero HSBC, S.A. de C.V. 481 103 87 291 8 42 241 Other trading entities 802 (1,834) 728 1,908 (329) 724 1,513 Holding companies, shared service centres and intra-group eliminations 913 (126) (114) 1,153 38 899 216 At 31 Dec 20,587 2,751 978 16,858 1,439 7,715 7,704 Interest expense Increase/(decrease) in 2024 compared with 2023 Increase/(decrease) in 2023 compared with 2022 2024 Volume Rate 2023 Volume Rate 2022 $m $m $m $m $m $m $m Deposits by banks HSBC Bank plc 1,376 160 79 1,137 (392) 1,294 235 HSBC UK Bank plc 743 20 107 616 8 414 194 The Hongkong and Shanghai Banking Corporation Limited 611 52 52 507 (145) 413 239 HSBC Bank Middle East Limited 303 83 20 200 89 19 92 HSBC North America Holdings Inc. 329 32 (18) 315 (1) 228 88 HSBC Bank Canada — — (6) 6 (10) 14 2 Grupo Financiero HSBC, S.A. de C.V. 74 12 (39) 101 (22) 54 69 Other trading entities 46 (122) 137 31 10 4 17 Holding companies, shared service centres and intra-group eliminations (552) (7) (33) (512) (33) (313) (166) At 31 Dec 2,930 269 260 2,401 (611) 2,242 770 Customer accounts HSBC Bank plc 10,753 1,134 1,108 8,511 1,037 5,293 2,181 HSBC UK Bank plc 6,156 225 1,399 4,532 (7) 3,679 860 The Hongkong and Shanghai Banking Corporation Limited 17,654 882 2,249 14,523 165 10,202 4,156 HSBC Bank Middle East Limited 520 61 77 382 96 216 70 HSBC North America Holdings Inc. 3,030 51 248 2,731 36 1,886 809 HSBC Bank Canada — — — — (567) — 567 Grupo Financiero HSBC, S.A. de C.V. 1,555 (2) 68 1,489 228 478 783 Other trading entities 1,012 (3,094) 1,710 2,396 (6) 817 1,585 Holding companies, shared service centres and intra-group eliminations (507) (115) 10 (402) (105) (189) (108) At 31 Dec 40,173 1,473 4,538 34,162 (232) 23,491 10,903 102 HSBC Holdings plc Annual Report on Form 20-F Financial summary Interest expense (continued) Increase/(decrease) in 2024 compared with 2023 Increase/(decrease) in 2023 compared with 2022 2024 Volume Rate 2023 Volume Rate 2022 $m $m $m $m $m $m $m Repurchase agreements – with banks HSBC Bank plc 2,212 (511) 808 1,915 782 851 282 HSBC UK Bank plc 23 (25) 14 34 24 6 4 The Hongkong and Shanghai Banking Corporation Limited 2,640 758 514 1,368 536 368 464 HSBC Bank Middle East Limited 178 70 9 99 31 45 23 HSBC North America Holdings Inc. 655 296 (85) 444 (97) 400 141 HSBC Bank Canada — — — — (12) — 12 Grupo Financiero HSBC, S.A. de C.V. 25 (16) 5 36 18 8 10 Other trading entities 43 (61) (10) 114 62 4 48 Holding companies, shared service centres and intra-group eliminations (881) 309 (181) (1,009) (480) (243) (286) At 31 Dec 4,895 1,621 273 3,001 848 1,455 698 Repurchase agreements – with customers HSBC Bank plc 4,090 929 647 2,514 591 1,212 711 HSBC UK Bank plc 273 (382) 227 428 (115) 392 151 The Hongkong and Shanghai Banking Corporation Limited 1,108 (12) 126 994 357 409 228 HSBC Bank Middle East Limited 1 1 — — — — — HSBC North America Holdings Inc. 4,821 1,249 34 3,538 291 2,222 1,025 HSBC Bank Canada 13 (15) 3 25 (188) 122 91 Grupo Financiero HSBC, S.A. de C.V. 415 45 (12) 382 133 71 178 Other trading entities 1 — — 1 — — 1 Holding companies, shared service centres and intra-group eliminations — — 25 (25) 1 (28) 2 At 31 Dec 10,722 1,537 1,328 7,857 1,156 4,314 2,387 Debt securities in issue – non trading HSBC Bank plc 2,536 512 137 1,887 93 1,100 694 HSBC UK Bank plc 1,357 230 368 759 71 240 448 The Hongkong and Shanghai Banking Corporation Limited 2,772 (210) 166 2,816 154 1,293 1,369 HSBC Bank Middle East Limited 67 (12) 6 73 (9) 35 47 HSBC North America Holdings Inc. 1,694 167 22 1,505 193 653 659 HSBC Bank Canada 12 (37) (2) 51 (762) 520 293 Grupo Financiero HSBC, S.A. de C.V. 353 178 83 92 28 (10) 74 Other trading entities 142 (3) (10) 155 (27) 4 178 Holding companies, shared service centres and intra-group eliminations 3,873 (147) 135 3,885 531 1,509 1,845 At 31 Dec 12,806 751 832 11,223 313 5,303 5,607 HSBC Holdings plc Annual Report on Form 20-F 103 Loan maturity and interest sensitivity analysis The analysis of loan maturity and interest sensitivity is presented for loans where repayment is expected to occur on a contractual repayment basis (presented within Loans and advances to banks and Loans and advances to customers on our balance sheet). Loans that have been re-classified to Assets held for sale are excluded as recovery is expected from sale proceeds within the next 12 months rather than individual contractual repayment terms. The analysis of loan maturity and interest sensitivity by loan type on a contractual repayment basis was as follows. 2024 2023 $m $m Maturity of 1 year or less Loans and advances to banks 97,156 107,658 Loans and advances to customers 341,022 344,777 438,178 452,435 Maturity after 1 year but within 5 years Loans and advances to banks 4,513 5,086 Loans and advances to customers 268,427 272,772 272,940 277,858 Interest rate sensitivity of loans and advances to banks Fixed interest rate 1,217 2,623 Variable interest rate 3,296 2,463 4,513 5,086 Interest rate sensitivity of loans and advances to customers Fixed interest rate 60,088 60,734 Variable interest rate 208,339 212,038 268,427 272,772 Maturity after 5 years but within 15 years Loans and advances to banks 383 173 Loans and advances to customers 164,603 169,345 164,986 169,518 Interest rate sensitivity of loans and advances to banks Fixed interest rate 333 173 Variable interest rate 50 — 383 173 Interest rate sensitivity of loans and advances to customers Fixed interest rate 69,464 72,458 Variable interest rate 95,139 96,887 164,603 169,345 Maturity after 15 years Loans and advances to banks — — Loans and advances to customers 166,321 162,713 166,321 162,713 Interest rate sensitivity of loans and advances to banks Fixed interest rate — — Variable interest rate — — — — Interest rate sensitivity of loans and advances to customers Fixed interest rate 76,945 72,014 Variable interest rate 89,376 90,699 166,321 162,713 104 HSBC Holdings plc Annual Report on Form 20-F Financial summary Deposits The following tables summarise the average amount of bank deposits, customer deposits and certificates of deposit (‘CDs’) and other money market instruments (that are included within ‘Debt securities in issue’ in the balance sheet), together with the average interest rates paid thereon for each of the past two years. The analysis of average deposits by legal entity is based on the legal entity in which the deposits are recorded and excludes balances with HSBC companies. Deposits by banks 2024 2023 Average balance Average rate Average balance Average rate $m % $m % HSBC UK Bank Plc 13,243 12,966 –  demand and other – non-interest bearing 31 — 85 — –  demand – interest bearing 11 2.7 20 5.0 –  time 13,201 5.5 12,861 4.6 –  other — — — — HSBC Bank plc 33,104 29,569 –  demand and other – non-interest bearing 6,159 — 6,354 — –  demand – interest bearing 18,384 4.9 16,781 4.1 –  time 8,197 3.9 6,113 4.0 –  other 364 — 321 — The Hong Kong and Shanghai Banking Corporation Limited 21,785 21,179 –  demand and other – non-interest bearing 3,412 — 3,569 — –  demand – interest bearing 13,326 2.3 14,311 2.2 –  time 5,035 5.0 3,295 4.9 –  other 12 — 4 — HSBC Bank Middle East Limited 2,566 1,517 –  demand and other – non-interest bearing 101 — 140 — –  demand – interest bearing 721 0.6 558 1.3 –  time 1,665 5.9 717 5.4 –  other 79 — 102 — HSBC North America Holdings Inc. 5,449 5,352 –  demand and other – non-interest bearing 942 — 780 — –  demand – interest bearing 4,271 4.8 3,918 4.4 –  time 236 5.5 654 5.4 –  other — — — — Grupo Financiero HSBC, S.A. de C.V 662 540 –  demand and other – non-interest bearing 14 — — — –  demand – interest bearing 34 11.8 43 11.6 –  time 614 10.7 497 18.7 –  other — — — — Other trading entities 271 291 –  demand and other – non-interest bearing 16 — 94 — –  demand – interest bearing 13 7.7 37 5.4 –  time 242 10.7 160 11.3 –  other — — — — Total 77,080 3.8 71,414 –  demand and other – non-interest bearing 10,675 — 11,022 — –  demand – interest bearing 36,760 3.9 35,668 3.4 –  time 29,190 5.1 24,297 4.9 –  other 455 — 427 — HSBC Holdings plc Annual Report on Form 20-F 105 Customer accounts 2024 2023 Average balance Average rate Average balance Average rate $m % $m % HSBC UK Bank Plc 336,151 334,043 –  demand and other – non-interest bearing 58,672 — 65,498 — –  demand – interest bearing 224,061 1.9 225,190 1.5 –  savings 39,915 3.0 31,666 2.5 –  time 13,473 4.3 11,538 3.8 –  other 30 3.3 151 4.0 HSBC Bank plc 297,942 282,193 –  demand and other – non-interest bearing 49,569 — 59,751 — –  demand – interest bearing 164,360 4.2 156,071 3.8 –  savings 49,037 3.3 41,771 2.9 –  time 34,976 5.1 22,647 4.4 –  other — — 1,953 4.4 The Hong Kong and Shanghai Banking Corporation Limited 805,694 777,111 –  demand and other – non-interest bearing 68,539 — 74,908 — –  demand – interest bearing 416,431 1.0 441,399 0.9 –  savings 311,870 4.1 225,530 4.0 –  time 8,704 4.9 35,274 4.5 –  other 150 — — — HSBC Bank Middle East Limited 33,470 31,265 –  demand and other – non-interest bearing 18,761 — 18,308 — –  demand – interest bearing 6,372 2.4 6,255 1.8 –  savings 7,186 4.2 5,414 3.6 –  time 1,151 5.6 1,288 5.6 –  other — — — — HSBC North America Holdings Inc. 95,893 99,377 –  demand and other – non-interest bearing 17,409 — 22,096 — –  demand – interest bearing 34,270 3.7 28,438 4.2 –  savings 44,214 4.0 40,380 2.8 –  time — — 8,463 4.8 –  other — — — — Grupo Financiero HSBC, S.A. de C.V. 29,311 5.3 28,315 5.3 –  demand and other – non-interest bearing 6,738 — 5,736 — –  demand – interest bearing 13,881 5.6 13,174 5.3 –  savings — — 1,166 — –  time 8,692 8.9 8,239 9.6 –  other — — — — Other trading entities 11,504 12.8 40,516 4.3 –  demand and other – non-interest bearing 4,438 — 11,720 — –  demand – interest bearing 2,252 8.0 11,936 — –  savings 4,060 30.9 10,476 16.7 –  time 754 5.6 6,384 — –  other — — — — Total 1,609,965 2.6 1,592,820 2.3 –  demand and other – non-interest bearing 224,126 — 258,017 — –  demand – interest bearing 861,627 2.1 882,463 1.8 –  savings 456,282 4.3 356,403 4.4 –  time 67,750 5.4 93,833 5.0 –  other 180 2.2 2,104 4.4 106 HSBC Holdings plc Annual Report on Form 20-F Financial summary Net charge-offs to average loans The following table provides the net charge-offs to average loans for loans and advances to banks and customers. Net charge-offs to average loans 2024 2023 % % Loans and advances to banks — — Loans and advances to customers 0.44 0.38 Allowances for credit losses to total loans are presented in Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at page 174 . Estimate of uninsured deposits and uninsured time deposits HSBC provides deposit services to customers across the many countries in which we operate and are therefore subject to differing national and state deposit insurance regimes. Uninsured deposits are presented on an estimated basis using the same methodologies and assumptions inherent in our liquidity reporting requirements to our primary regulator, the Prudential Regulation Authority. The insured status of a deposit is determined on the basis of individual insurance limits enacted within local regulations. At 31 December 2024, the amount of uninsured deposits was $ 1.3 tn (31 December 2023: $ 1.3 tn). Uninsured time deposits are uninsured deposits which are subject to contractual maturity requirements prior to withdrawal. Amounts are presented on a residual contractual maturity basis and exclude overnight deposits where contractual requirements are imminently satisfied. Maturity analysis of uninsured time deposits At 31 Dec 2024 3 months or less After 3 months but within 6 months After 6 months but within 12 months After 12 months Total $m $m $m $m $m Uninsured time deposits 262,268 20,540 9,433 4,783 297,024 At 31 Dec 2023 Uninsured time deposits 246,148 18,293 10,831 3,676 278,948 HSBC Holdings plc Annual Report on Form 20-F 107 Global businesses and legal entities Contents 107 Summary 108 Supplementary analysis of constant currency results and notable items by global business 112 Reconciliation of reported and constant currency risk-weighted assets 113 Supplementary tables for WPB and GBM 119 Analysis of reported results by legal entities 122 Summary information – legal entities and selected countries/territories 127 Analysis by country/territory Summary The Group CEO, supported in 2024 by the Group Executive Committee (‘GEC‘), reviewed operating activity on a number of bases, including by global business and legal entities. Up to 31 December 2024, our global businesses – Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets – along with Corporate Centre were our reportable segments under IFRS 8 ‘Operating Segments’ and are presented below and in Note 10 : Segmental analysis on page 405 . Following our organisational announcement in October 2024, ef fective from 1 January 2025 the Group’s operating segments will comprise four new businesses – Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking – along with Corporate Centre. These will replace our previously reported operating segments up to 31 December 2024. Basis of preparation The Group CEO, supported in 2024 by the rest of the GEC, is considered the Chief Operating Decision Maker (‘CODM’) for the purposes of identifying the Group’s reportable segments. Global business results are assessed by the CODM on the basis of constant currency performance. We separately disclose ‘notable items’, which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature. Constant currency performance information for 2023 and 2022 are presented as described on page 85 . As required by IFRS 8, reconciliations of the total constant currency global business results to the Group’s reported results are presented on page 406 . Supplementary reconciliations from reported to constant currency results by global business are presented on pages 108 to 110 for information purposes. Global business performance is also assessed using return on tangible equity (‘RoTE’). A reconciliation of global business RoTE to the Group’s RoTE is provided on page 132 . Our operations are closely integrated and, accordingly, the presentation of data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and global functions to the extent that they can be meaningfully attributed to global businesses and legal entities. While such allocations have been made on a systematic and consistent basis, they necessarily involve a degree of subjectivity. Costs that are not allocated to global businesses are included in Corporate Centre. Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-company and inter-business line transactions. All such transactions are undertaken on arm’s length terms. The intra-Group elimination items for the global businesses are presented in Corporate Centre. HSBC Holdings incurs the liability of the UK bank levy, with the cost being recharged to its UK operating subsidiaries. The current year expense will be reflected in the fourth quarter as it is assessed on our balance sheet position as at 31 December. The results of main legal entities are presented on a reported and constant currency basis, including HSBC UK Bank plc, HSBC Bank plc, The Hongkong and Shanghai Banking Corporation Limited, HSBC Bank Middle East Limited, HSBC North America Holdings Inc., HSBC Bank Canada and Grupo Financiero HSBC, S.A. de C.V. The results of legal entities are presented on a reported basis on page 119 and a constant currency basis on page 122 . 108 HSBC Holdings plc Annual Report on Form 20-F Global businesses Supplementary analysis of constant currency results and notable items by global business Constant currency results 1 2024 Wealth and Personal Banking 2 Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue 3 28,674 21,580 17,529 (1,929) 65,854 ECL (1,335) (1,815) (235) (29) (3,414) Operating expenses (15,204) (7,906) (10,231) 298 (33,043) Share of profit in associates and joint ventures 47 1 — 2,864 2,912 Profit/(loss) before tax 12,182 11,860 7,063 1,204 32,309 Loans and advances to customers (net) 447,085 306,926 169,516 7,131 930,658 Customer accounts 823,267 490,475 340,898 315 1,654,955 1 In the current period constant currency results are equal to reported as there is no currency translation. 2 On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS (‘My Money Group’). With effect from this date, we have prospectively reclassified the portfolio of retained loans, profit participation interest and licence agreement of the CCF brand from WPB to Corporate Centre. 3 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Notable items 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Notable items Revenue Disposals, acquisitions and related costs 1 28 — (14) (1,357) (1,343) –  of which: Argentina 1 — — — (6,138) (6,138) Canada 2 — — — 4,924 4,924 France 55 — — 5 60 Early redemption of legacy securities — — — (237) (237) Operating expenses Disposals, acquisitions and related costs (3) (2) (2) (192) (199) –  of which: Argentina — (9) — (34) (43) Canada (1) (1) — (151) (153) France 1 — — (6) (5) Restructuring and other related costs 3 (10) 2 (1) (25) (34) 1 Includes $1.0b n loss on disposal and a $5.2b n loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. 2  Includes $4.8b n gain on disposal of our banking business in Canada, inclusive of a $0.3b n gain on the foreign exchange hedging of the sales proceeds, the recycling of $0.6b n in foreign currency translation reserve losses and $0.4b n of other reserves losses. 3 Amounts relate to restructuring provisions recognised in 2024 and reversals of restructuring provisions recognised during 2022. HSBC Holdings plc Annual Report on Form 20-F 109 Reconciliation of reported results to constant currency results – global businesses (continued) 2023 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue 1 Reported 27,275 22,867 16,115 (199) 66,058 Currency translation (427) (471) (344) 96 (1,146) Constant currency 26,848 22,396 15,771 (103) 64,912 ECL Reported (1,058) (2,062) (326) (1) (3,447) Currency translation 123 56 9 — 188 Constant currency (935) (2,006) (317) (1) (3,259) Operating expenses Reported (14,738) (7,524) (9,865) 57 (32,070) Currency translation 386 290 (7) (93) 576 Constant currency (14,352) (7,234) (9,872) (36) (31,494) Share of profit/(loss) in associates and joint ventures Reported 65 (1) — (257) (193) Currency translation (1) — — (62) (63) Constant currency 64 (1) — (319) (256) Profit/(loss) before tax Reported 11,544 13,280 5,924 (400) 30,348 Currency translation 81 (125) (342) (59) (445) Constant currency 11,625 13,155 5,582 (459) 29,903 Loans and advances to customers (net) Reported 454,878 309,422 173,966 269 938,535 Currency translation (10,022) (8,319) (3,098) (7) (21,446) Constant currency 444,856 301,103 170,868 262 917,089 Customer accounts Reported 804,863 475,666 330,522 596 1,611,647 Currency translation (12,153) (10,571) (9,296) (14) (32,034) Constant currency 792,710 465,095 321,226 582 1,579,613 1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Notable items (continued) 2023 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Notable items Revenue Disposals, acquisitions and related costs 1,2,3 4 1,591 — (297) 1,298 Fair value movements on financial instruments 4 — — — 14 14 Disposal losses on Markets Treasury repositioning (391) (316) (270) — (977) Operating expenses Disposals, acquisitions and related costs (53) (55) 3 (216) (321) Restructuring and other related costs 5 20 32 21 63 136 Impairment of interest in associate 6 — — — (3,000) (3,000) 1  Includes the impact of the sale of our retail banking operations in France. 2  Includes the gain of $1.6bn recognised in respect of the acquisition of SVB UK . 3  Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 4  Fair value movements on non-qualifying hedges in HSBC Holdings. 5  Amounts relate to reversals of restructuring provisions recognised during 2022. 6 Relates to an impairment loss of $3.0bn recognised in respect of the Group’s investment in BoCom. See Note 18 on page 423 to 424 . 110 HSBC Holdings plc Annual Report on Form 20-F Global businesses Reconciliation of reported results to constant currency results – global businesses (continued) 2022 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue 1 Reported 21,103 16,494 14,899 (1,876) 50,620 Currency translation (331) (287) (357) (58) (1,033) Constant currency 20,772 16,207 14,542 (1,934) 49,587 ECL Reported (1,130) (1,849) (595) (10) (3,584) Currency translation (30) (19) 17 1 (31) Constant currency (1,160) (1,868) (578) (9) (3,615) Operating expenses Reported (14,415) (7,052) (9,383) (1,851) (32,701) Currency translation 274 242 (20) (24) 472 Constant currency (14,141) (6,810) (9,403) (1,875) (32,229) Share of profit/(loss) in associates and joint ventures Reported 30 — (2) 2,695 2,723 Currency translation (1) 1 — (164) (164) Constant currency 29 1 (2) 2,531 2,559 Profit/(loss) before tax Reported 5,588 7,593 4,919 (1,042) 17,058 Currency translation (88) (63) (360) (245) (756) Constant currency 5,500 7,530 4,559 (1,287) 16,302 Loans and advances to customers (net) Reported 422,309 311,957 188,940 355 923,561 Currency translation 2,763 (2,733) (2,287) (5) (2,262) Constant currency 425,072 309,224 186,653 350 921,299 Customer accounts Reported 779,310 463,928 326,630 435 1,570,303 Currency translation 2,571 (1,122) (3,210) 8 (1,753) Constant currency 781,881 462,806 323,420 443 1,568,550 1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Notable items (continued) 2022 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Notable items Revenue Disposals, acquisitions and related costs 1 (2,212) — — (525) (2,737) Fair value movements on financial instruments 2 — — — (618) (618) Restructuring and other related costs 3 98 (16) (184) (145) (247) Operating expenses Disposals, acquisitions and related costs (7) — — (11) (18) Restructuring and other related costs (357) (266) (252) (2,007) (2,882) 1 Includes losses from classifying businesses as held for sale as part of a broader restructuring of our European business, of which $2.3bn (inclusive of $0.4bn in goodwill impairments) related to the sale of the retail banking operations in France. Held-for-sale classification for the sale of the retail banking operations in France was reversed in 1Q23 ($2.1bn loss reversed) and reinstated in 4Q23 ($2.0bn loss reinstated). 2 Fair value movements on non-qualifying hedges in HSBC Holdings. 3 Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction programme. HSBC Holdings plc Annual Report on Form 20-F 111 Strategic transactions supplementary analysis The following table presents the selected impacts of strategic transactions to the Group and our global business segments. These comprise the strategic transactions where the financial impacts of the acquisition or disposal have qualified for material notable item treatment in our results. Material notable items are a subset of notable items and categorisation is dependent on the financial impact on the Group’s income statement. At 2024, strategic transactions classified as material notable items in current and comparative periods comprise the disposal of our retail banking operations in France, our banking business in Canada, the sale of our business in Argentina and the acquisition of SVB UK. The impacts quoted include the gains or losses on classification to held for sale or acquisition and all other related notable items. They also include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. It is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. We consider the monthly impacts of distorting income statement results when calculating the impact of strategic transactions. Constant currency results 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Revenue 54 179 — (1,209) (976) ECL — (3) — — (3) Operating expenses (7) (76) — (191) (274) Share of profit in associates and joint ventures — — — — — Profit before tax 47 100 — (1,400) (1,253) –  HSBC Innovation Banking 1 100 — 100 –  Retail banking operations in France 47 (1) 46 –  Banking business in Canada 4,773 4,773 –  Business in Argentina (6,172) (6,172) of which: notable items Revenue 55 — — (1,209) (1,154) Profit before tax 55 7 — (1,400) (1,338) of which: distorting impact of operating results between periods Revenue (1) 179 — — 178 Profit/(loss) before tax (8) 93 — — 85 2023 Revenue 690 2,407 49 (231) 2,915 ECL 22 (72) 11 — (39) Operating expenses (658) (331) (59) (218) (1,266) Share of profit in associates and joint ventures — — — — — Profit/(loss) before tax 54 2,004 1 (449) 1,610 –  HSBC Innovation Banking 1 1,583 — 1,583 –  Retail banking operations in France (141) (26) (167) –  Banking business in Canada 211 400 82 (424) 269 –  Business in Argentina (16) 21 (81) — (76) of which: notable items Revenue 41 1,659 — (231) 1,469 Profit before tax (11) 1,607 — (449) 1,147 of which: distorting impact of operating results between periods Revenue 649 748 49 — 1,446 Profit before tax 65 397 1 — 463 1 Includes the impact of our acquisition of SVB UK, which in June 2023 changed its legal entity name to HSBC Innovation Bank Limited. 112 HSBC Holdings plc Annual Report on Form 20-F Global businesses Reconciliation of reported and constant currency risk-weighted assets At 31 Dec 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $bn $bn $bn $bn $bn Risk-weighted assets Reported 181.1 337.9 231.9 87.4 838.3 Constant currency 181.1 337.9 231.9 87.4 838.3 At 31 Dec 2023 Risk-weighted assets Reported 192.9 354.5 218.5 88.2 854.1 Currency translation (6.8) (12.6) (4.8) (1.1) (25.3) Constant currency 186.1 341.9 213.7 87.1 828.8 At 31 Dec 2022 Risk-weighted assets Reported 182.9 342.4 225.9 88.5 839.7 Currency translation (4.1) (9.3) (4.2) (0.5) (18.1) Constant currency 178.8 333.1 221.7 88.0 821.6 HSBC Holdings plc Annual Report on Form 20-F 113 Supplementary tables for WPB and GBM WPB constant currency performance by business unit A breakdown of WPB by business unit is presented below to reflect the basis of how the revenue performance of the business units is assessed and managed. WPB – summary (constant currency basis) Consists of 1 Total WPB Banking operations Life insurance Global Private Banking Asset management $m $m $m $m $m 2024 Net operating income before change in expected credit losses and other credit impairment charges 2 28,674 22,842 1,840 2,611 1,381 –  net interest income 20,352 18,819 326 1,193 14 –  net fee income/(expense) 5,930 3,452 177 1,015 1,286 –  other income 2,392 571 1,337 403 81 ECL (1,335) (1,334) — (1) — Net operating income 27,339 21,508 1,840 2,610 1,381 Total operating expenses (15,204) (11,728) (716) (1,752) (1,008) Operating profit 12,135 9,780 1,124 858 373 Share of profit in associates and joint ventures 47 14 33 — — Profit before tax 12,182 9,794 1,157 858 373 2023 Net operating income before change in expected credit losses and other credit impairment charges 2 26,848 21,920 1,396 2,268 1,264 –  net interest income 19,902 18,455 282 1,167 (2) –  net fee income/(expense) 5,283 3,148 147 800 1,188 –  other income 1,663 317 967 301 78 ECL (935) (933) 4 (6) — Net operating income 25,913 20,987 1,400 2,262 1,264 Total operating expenses (14,352) (11,075) (683) (1,639) (955) Operating profit 11,561 9,912 717 623 309 Share of profit in associates and joint ventures 64 14 50 — — Profit before tax 11,625 9,926 767 623 309 2022 Net operating income before change in expected credit losses and other credit impairment charges 2 20,772 16,267 1,337 2,039 1,129 –  net interest income 15,887 14,576 342 975 (6) –  net fee income/(expense) 5,290 3,241 150 795 1,104 –  other income (405) (1,550) 845 269 31 ECL (1,160) (1,146) (8) (5) (1) Net operating income 19,612 15,121 1,329 2,034 1,128 Total operating expenses (14,141) (11,001) (787) (1,495) (858) Operating profit 5,471 4,120 542 539 270 Share of profit in associates and joint ventures 29 12 17 — — Profit before tax 5,500 4,132 559 539 270 1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 2 From 1 January 2023, we adopted IFRS 17 ‘Insurance Contracts’, which replaced IFRS 4 ‘Insurance Contracts’. Comparative data for the year ended 31 December 2022 have been restated accordingly. 114 HSBC Holdings plc Annual Report on Form 20-F Global businesses Life insurance business performance The following table provides an analysis of the performance of our life insurance business for the period. It comprises income earned by our insurance manufacturing operations within our WPB business, as well as income earned and costs incurred within our Wealth insurance distribution channels, consolidation and inter-company elimination entries. Results of WPB’s life insurance business unit (constant currency basis) 2024 2023 2022 Insurance manufac- turing operations Wealth insurance and other 1 Life insurance Insurance manufac- turing operations Wealth insurance and other 1 Life insurance Insurance manufac- turing operations Wealth insurance and other 1 Life insurance $m $m $m $m $m $m $m $m $m Net interest income 326 — 326 282 — 282 345 (3) 342 Net fee income/(expense) 10 167 177 (25) 172 147 (31) 181 150 Other income 1,331 6 1,337 975 (8) 967 832 13 845 –  insurance service result 1,356 (15) 1,341 1,120 (31) 1,089 868 (19) 849 –  net investment returns (excluding net interest income) (162) (15) (177) (198) 55 (143) (196) (24) (220) –  other operating income 137 36 173 53 (32) 21 160 56 216 Net operating income before change in expected credit losses and other credit impairment charges 2 1,667 173 1,840 1,232 164 1,396 1,146 191 1,337 ECL — — — 4 — 4 (9) 1 (8) Net operating income 1,667 173 1,840 1,236 164 1,400 1,137 192 1,329 Total operating expenses (601) (115) (716) (570) (113) (683) (593) (194) (787) Operating profit 1,066 58 1,124 666 51 717 544 (2) 542 Share of profit/(loss) in associates and joint ventures 33 — 33 50 — 50 17 — 17 Profit before tax 1,099 58 1,157 716 51 767 561 (2) 559 1 ‘Wealth insurance and other’ includes fee income earned and operating expenses incurred within our Wealth distribution channels. It also includes the IFRS 17 consolidation entries arising from transactions between our insurance manufacturing operations and Wealth distribution channels and with the wider Group, as well as allocations of central costs benefiting life insurance. 2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. HSBC Holdings plc Annual Report on Form 20-F 115 WPB insurance manufacturing (constant currency basis) The following table shows the results of our insurance manufacturing operations for our WPB business and for all global business segments in aggregate. Results of insurance manufacturing operations 1,2 2024 2023 2022 WPB All global businesses WPB All global businesses WPB All global businesses $m $m $m $m $m $m Net interest income 326 363 282 321 345 370 Net fee expense 10 21 (25) (13) (31) (16) Other income 1,331 1,326 975 965 832 842 Insurance service result 1,356 1,356 1,120 1,119 868 872 –  release of contractual service margin 1,290 1,290 1,087 1,087 900 900 –  risk adjustment release 74 74 44 44 47 47 –  experience variance and other 36 36 31 30 50 54 –  loss from onerous contracts (44) (44) (42) (42) (129) (129) Net investment returns (excluding net interest income) 3 (162) (165) (198) (205) (196) (208) –  insurance finance income/(expense) (5,985) (5,985) (7,718) (7,718) 13,882 13,885 –  other investment income 5,823 5,820 7,520 7,513 (14,078) (14,093) Other operating income 137 135 53 51 160 178 Net operating income before change in expected credit losses and other credit impairment charges 4,5 1,667 1,710 1,232 1,273 1,146 1,196 Change in expected credit losses and other credit impairment charges — — 4 4 (9) (9) Net operating income 1,667 1,710 1,236 1,277 1,137 1,187 Total operating expenses (601) (602) (570) (580) (593) (589) Operating profit 1,066 1,108 666 697 544 598 Share of profit in associates and joint ventures 33 33 50 50 17 17 Profit before tax of insurance business operations 5 1,099 1,141 716 747 561 615 Additional information Insurance manufacturing new business contractual service margin (reported basis) 2,515 2,515 1,686 1,686 1,111 1,111 Consolidated Group new business contractual service margin (reported basis) 2,729 2,729 1,812 1,812 1,229 1,229 Annualised new business premiums of insurance manufacturing operations 4,912 4,912 3,797 3,797 2,354 2,354 Net dividends of insurance manufacturing operations (reported basis) 6 1,522 1,522 813 813 (152) (152) 1 Constant currency results are derived by adjusting for period-on-period effects of foreign currency translation differences. The impact of foreign currency translation differences on ‘All global businesses’ profit before tax was a $13m decrease for 2023 and a $60m decrease for 2022. 2 The results presented for insurance manufacturing are shown before elimination of inter-company transactions with HSBC non-insurance operations. The ‘All global businesses‘ result consists primarily of WPB business, as well as a small proportion of CMB business. 3 Net investment return under IFRS 17 for all global businesses for 2024 was $198m (2023: $116m; 2022: $162m), which consisted of net interest income, net income/(expenses) on assets held at fair value through profit or loss, and insurance finance income/(expense). 4 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 5 The effect of applying hyperinflation accounting in Argentina on insurance manufacturing operations in all global business resulted in a decrease of $53m in revenue in 2024 (2023: decrease of $35m, 2022: decrease of $7m) and a decrease of $53m in profit before tax in 2024 (2023: decrease of $35m, 2022: decrease of $6m). 6 Net dividends of insurance manufacturing operations include dividends paid to immediate parent companies of $1,612m (2023: $993m; 2022: $606m) net of CET1 qualifying injections to fund business growth of $90m (2023: $180m; 2022: $758m including a $528m capital injection to fund the acquisition of AXA Singapore). Insurance manufacturing The following commentary, unless otherwise specified, relates to the ‘All global businesses’ results. Profit before tax of $1.1bn increased by $0.4bn compared with 2023. This primarily reflected the following: – Insurance service result of $1.4bn increased by $0.2bn compared with 2023 primarily due to an increase in the release of CSM. – Net investment return (excluding net interest income) remained broadly unchanged, with negative impacts in China from reducing interest rates partly offset by gains in other markets. – Other operating income increased by $0.1bn compared with 2023, with the increase driven by the non-repeat of losses of $0.3bn in 2023 from corrections to historical valuation estimates, partly offset by current period losses on reinsurance contracts in Hong Kong. Profit before tax of $0.7bn in 2023 increased by $0.1bn compared with 2022. This primarily reflected the following: – Insurance service result of $1.1bn increased by $0.3bn compared with 2022. This was driven by an increase in the release of CSM of $0.2bn as a result of a higher closing CSM balance. The improved insurance service result also reflected a reduction to losses from onerous contracts of $0.1bn, mainly in Hong Kong and Singapore, in part due to improved market conditions in 2023. – Other operating income decreased by $0.1bn compared with 2022, and included a $0.3bn loss from corrections to historical valuation estimates, partly offset by gains of $0.2bn from reinsurance contracts in Hong Kong. Insurance manufacturing new business contractual service margin increased by $0.8bn or 49% primarily in Hong Kong, from new business volumes increasing and a $0.2bn benefit from recognising a new reinsurance contract. Annualised new business premiums (‘ANP’) is used to assess new insurance premiums generated by the business. It is calculated as 100% of annualised first year regular premiums and 10% of single premiums, before reinsurance ceded. ANP in 2024 increased by 29% compared with 2023, primarily from strong new business sales in Hong Kong. Insurance equity plus CSM net of tax Insurance equity plus CSM net of tax is a non-GAAP alternative performance measure that provides information about our insurance manufacturing operations’ net asset value plus the future earnings from in-force business. At 31 December 2024, insurance equity plus CSM net of tax was $17,025m (31 December 2023: $16,583m; 31 December 2022: $14,646m). At 31 December 2024, insurance equity plus CSM net of tax was calculated as insurance manufacturing operations equity of $7,015m plus CSM of $12,063m less tax of $2,053m. At 31 December 2023, it was calculated as insurance manufacturing operations equity of 116 HSBC Holdings plc Annual Report on Form 20-F Global businesses $7,731m plus CSM of $10,786m less tax of $1,934m. At 31 December 2022, it was calculated as insurance manufacturing operations equity of $7,236m plus CSM of $9,058m less tax of $1,648m. The increase of $0.4bn in 2024 insurance manufacturing equity plus CSM net of tax compared to the prior year includes an increase in CSM net of tax of $1.2bn and a reduction in equity of $0.7bn. CSM net of tax benefited from strong new business written in the period, partially offset by a reduction of $0.6bn from reclassification of our French insurance business to held for sale. The reduction in insurance manufacturing equity of $0.7bn primarily reflected the benefit of profit after tax in the year of $0.9bn offset by net dividends paid of $1.5bn. Net dividends of $1.5bn in 2024 have increased by $0.7bn primarily due to releases of surplus regulatory capital in Hong Kong. WPB: Wealth balances The following table shows the wealth balances, which include invested assets and wealth deposits. Invested assets comprise customer assets either managed by our Asset Management business or by external third-party investment managers, as well as self-directed investments by our customers. WPB – reported wealth balances 1 2024 2023 $bn $bn Global Private Banking invested assets 395 363 –  managed by Global Asset Management 68 61 –  external managers, direct securities and other 327 302 Retail invested assets 409 383 –  managed by Global Asset Management 175 178 –  external managers, direct securities and other 234 205 Asset Management third-party distribution 489 445 Reported invested assets 1 1,293 1,191 Wealth deposits (Premier and Global Private Banking) 2 555 536 Total reported wealth balances 1,848 1,727 1 Invested assets are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. At 31 December 2024, $54bn of invested assets were classified as held for sale and are not included in the table above (2023: $32bn). 2 Premier and Global Private Banking deposits, which include Prestige deposits in Hang Seng Bank, form part of the total WPB customer accounts balance of $823bn (2023: $805bn ) on page 108 . At 31 December 2024, $3bn of wealth deposits were classified as held for sale and are not included in the table above (2023: $42bn). Asset Management: funds under management The following table shows the funds under management of our Asset Management business. Funds under management represents assets managed, either actively or passively, on behalf of our customers. Funds under management are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. Asset Management – reported funds under management 1 2024 2023 $bn $bn Opening balance 684 595 Net new invested assets 30 54 Net market movements 47 23 Foreign exchange and others (18) 12 Transfer to Markets Treasury (12) — Closing balance 731 684 Asset Management – reported funds under management by legal entities 2024 2023 $bn $bn HSBC Bank plc 165 162 The Hongkong and Shanghai Banking Corporation Limited 223 198 HSBC North America Holdings Inc. 67 71 Grupo Financiero HSBC, S.A. de C.V. 15 15 Other trading entities 2 261 238 Closing balance 731 684 1    Funds under management are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. 2 Funds under management of $194bn in 2024 and $177bn in 2023 relating to our Asset Management entity in the UK are reported under ‘other trading entities’ in the table above. HSBC Holdings plc Annual Report on Form 20-F 117 At 31 December 2024, Asset Management funds under management amounted to $731bn , an increase of $47bn or 7%. The increase reflected net new invested assets of $30bn and a positive impact from market performance. These increases were partly offset by an adverse impact of foreign exchange translation of $18bn and from a reduction of $12bn due to a transfer of a portfolio forming part of the Group’s Holdings Capital Buffer from Asset Management to our Markets Treasury function. Net new invested assets were mainly in long-term products, primarily passive investment, alternative investment, and multi-asset investment products. These inflows were partly offset by redemptions from money market instruments in the US. Global Private Banking: client balances Global Private Banking client balances comprises invested assets and deposits, which are translated at the rates of exchange applicable for their respective year-ends, with the effects of currency translation reported separately. Global Private Banking – reported client balances 1 2024 2023 $bn $bn Opening balance 447 383 Net new invested assets 23 17 Increase/(decrease) in deposits 1 9 Net market movements 37 19 Foreign exchange and others (24) 19 Closing balance 484 447 Global Private Banking – reported client balances by legal entities 2024 2023 $bn $bn HSBC UK Bank plc 36 32 HSBC Bank plc 115 54 The Hongkong and Shanghai Banking Corporation Limited 251 209 HSBC North America Holdings Inc. 77 64 HSBC Bank Middle East Limited 3 — Grupo Financiero HSBC, S.A. de C.V. 2 3 Other trading entities — 85 Closing balance 484 447 1 Client balances are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. Customer deposits included in these client balances are on balance sheet. Retail invested assets The following table shows the invested assets of our retail customers. These comprise customer assets either managed by our Asset Management business or by external third-party investment managers as well as self-directed investments by our customers. Retail invested assets are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. Retail invested assets 2024 2023 $bn $bn Opening balance 383 363 Net new invested assets 1 28 26 Net market movements 23 7 Foreign exchange and others (25) (13) Closing balance 409 383 Retail invested assets by legal entities 2024 2023 $bn $bn HSBC UK Bank plc 31 29 HSBC Bank plc 8 31 The Hongkong and Shanghai Banking Corporation Limited 336 292 HSBC Bank Middle East Limited 3 3 HSBC North America Holdings Inc. 16 14 Grupo Financiero HSBC, S.A. de C.V. 10 9 Other trading entities 5 5 Closing balance 409 383 1 ‘Retail net new invested assets’ covers nine markets, comprising Hong Kong including Hang Seng Bank (Hong Kong), mainland China, Malaysia, Singapore, HSBC UK, UAE, US, Canada and Mexico. The net new invested assets relating to all other geographies is reported in ‘foreign exchange and others’. 118 HSBC Holdings plc Annual Report on Form 20-F Global businesses WPB invested assets Net new invested assets represents the net customer inflows from retail invested assets, Asset Management third-party distribution and Global Private Banking invested assets. It excludes all customer deposits. The net new invested assets in the table below is non-additive from the tables above, as net new invested assets managed by Asset Management that are generated by retail clients or Global Private Banking will be recorded in both businesses. WPB: Invested assets 2024 2023 $bn $bn Opening balance 1,191 1,015 Net new invested assets 64 84 Net market movements 97 43 Foreign exchange and others (59) 49 Closing balance 1,293 1,191 WPB: Net new invested assets by legal entities 2024 2023 $bn $bn HSBC UK Bank plc 3 1 HSBC Bank plc 9 3 The Hongkong and Shanghai Banking Corporation Limited 47 47 HSBC Bank Middle East Limited 1 1 HSBC North America Holdings Inc. (10) 7 Grupo Financiero HSBC, S.A. de C.V. 2 5 Other trading entities 12 20 Total 64 84 GBM: Securities Services and Issuer Services Assets held in custody Custody is the safekeeping and servicing of securities and other financial assets on behalf of clients. Assets held in custody are not reported on the Group’s balance sheet, except where it is deemed that we are acting as principal rather than agent in our role as investment manager. At 31 December 2024, we held $10.6tn of assets as custodian, an increase of 9% compared with 31 December 2023. The balance comprised $9.7tn of assets in Securities Services, which were recorded at market value, and $0.9tn of assets in Issuer Services, recorded at book value. The increase was mainly in Securities Services balances. This was driven by net asset inflows in Asia and Europe and favourable market movements in Asia, North America and Latin America, partly offset by adverse impacts of currency translations in Asia and Europe. Assets under administration Our assets under administration business includes the provision of bond and loan administration services, transfer agency services and the valuation of portfolios of securities and other financial assets on behalf of clients and complements the custody business. At 31 December 2024, the value of assets held under administration by the Group amounted to $5.2tn, which was 6% higher than at 31 December 2023. The balance comprised $3.1tn of assets in Securities Services, which were recorded at market value, and $2.1tn of assets in Issuer Services, recorded at book value. The increase was mainly driven by Securities Services balances due to net asset inflows in Europe and Asia together with favourable market movement, partly offset by adverse impact of currency translations notably in Europe and Asia. Issuer Services balances also rose driven by new issuances, including in the UK and the US, as well as new assets, including in our legal entity in Hong Kong. HSBC Holdings plc Annual Report on Form 20-F 119 Analysis of reported results by legal entities HSBC reported profit/(loss) before tax and balance sheet data 2024 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Net interest income 10,331 1,254 15,077 1,590 1,613 300 2,292 2,774 (2,498) 32,733 Net fee income 1,672 1,629 5,449 508 1,372 129 630 1,076 (164) 12,301 Net income from financial instruments held for trading or managed on a fair value basis 580 6,042 11,781 331 914 33 504 411 520 21,116 Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss — 1,100 4,608 — — — 22 183 (12) 5,901 Insurance finance income/(expense) — (1,261) (4,562) — — — (26) (150) 21 (5,978) Insurance service result — 217 1,042 — — — 76 (7) (18) 1,310 Other income/(expense) 1 169 576 658 75 365 — 75 (984) (2,463) (1,529) Net operating income before change in expected credit losses and other credit impairment charges 2 12,752 9,557 34,053 2,504 4,264 462 3,573 3,303 (4,614) 65,854 Change in expected credit losses and other credit impairment charges (405) (211) (1,532) (198) (81) (40) (864) (93) 10 (3,414) Net operating income 12,347 9,346 32,521 2,306 4,183 422 2,709 3,210 (4,604) 62,440 Total operating expenses excluding impairment of goodwill and other intangible assets (5,124) (6,718) (14,296) (1,191) (3,349) (236) (1,992) (1,959) 1,899 (32,966) Impairment of goodwill and other intangible assets (11) (5) (33) (1) (2) — (2) (22) (1) (77) Operating profit/(loss) 7,212 2,623 18,192 1,114 832 186 715 1,229 (2,706) 29,397 Share of profit in associates and joint ventures less impairment 3 1 22 2,278 — — — 15 600 (4) 2,912 Profit/(loss) before tax 7,213 2,645 20,470 1,114 832 186 730 1,829 (2,710) 32,309 % % % % % % % % % % Share of HSBC’s profit before tax 22.2 8.2 63.4 3.4 2.6 0.6 2.3 5.7 (8.4) 100.0 Cost efficiency ratio 40.3 70.3 42.1 47.6 78.6 51.1 55.8 60.0 41.1 50.2 Balance sheet data $m $m $m $m $m $m $m $m $m $m Loans and advances to customers (net) 272,973 103,464 449,940 20,440 55,786 — 23,439 4,617 (1) 930,658 Total assets 426,165 914,506 1,400,456 57,215 253,251 — 46,007 26,623 (107,175) 3,017,048 Customer accounts 340,233 297,785 845,284 34,808 99,278 — 27,525 9,999 43 1,654,955 Risk-weighted assets 4,5,6 138,332 137,609 402,847 26,624 74,416 — 29,671 50,731 (648) 838,254 120 HSBC Holdings plc Annual Report on Form 20-F Legal entities HSBC reported profit/(loss) before tax and balance sheet data (continued) 2023 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Net interest income 9,684 2,674 16,705 1,551 1,712 1,275 2,148 3,765 (3,718) 35,796 Net fee income 1,597 1,527 4,859 475 1,237 559 581 1,225 (215) 11,845 Net income from financial instruments held for trading or managed on a fair value basis 516 4,220 9,507 397 729 110 437 1,054 (309) 16,661 Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss — 1,438 6,258 — — — 39 323 (171) 7,887 Insurance finance income/(expense) — (1,460) (6,237) — — — (44) (166) 98 (7,809) Insurance service result — 154 838 — — — 87 9 (10) 1,078 Other income/(expense) 1 1,608 736 (31) 2 185 22 65 (1,481) (506) 600 Net operating income before change in expected credit losses and other credit impairment charges 2 13,405 9,289 31,899 2,425 3,863 1,966 3,313 4,729 (4,831) 66,058 Change in expected credit losses and other credit impairment charges (523) (212) (1,641) (90) (94) (46) (696) (279) 134 (3,447) Net operating income 12,882 9,077 30,258 2,335 3,769 1,920 2,617 4,450 (4,697) 62,611 Total operating expenses excluding impairment of goodwill and other intangible assets (4,602) (6,483) (13,379) (1,095) (3,473) (1,049) (1,823) (2,631) 2,180 (32,355) Impairment of goodwill and other intangible assets (10) 97 (16) (1) 222 — (3) (4) — 285 Operating profit/(loss) 8,270 2,691 16,863 1,239 518 871 791 1,815 (2,517) 30,541 Share of profit in associates and joint ventures less impairment 3 — (52) (696) — — — 14 544 (3) (193) Profit/(loss) before tax 8,270 2,639 16,167 1,239 518 871 805 2,359 (2,520) 30,348 % % % % % % % % % % Share of HSBC’s profit before tax 27.2 8.7 53.3 4.1 1.7 2.9 2.6 7.8 (8.3) 100.0 Cost efficiency ratio 34.4 68.7 42.0 45.2 84.2 53.4 55.1 55.7 45.1 48.5 Balance sheet data $m $m $m $m $m $m $m $m $m $m Loans and advances to customers (net) 270,208 95,750 455,315 20,072 54,829 — 26,410 15,951 — 938,535 Total assets 423,029 896,682 1,333,911 50,612 252,339 90,731 47,309 59,051 (114,987) 3,038,677 Customer accounts 339,611 274,733 801,430 31,341 99,607 — 29,423 35,326 176 1,611,647 Risk-weighted assets 4,5 129,211 131,468 396,677 24,294 72,248 31,890 32,639 59,574 6,704 854,114 HSBC Holdings plc Annual Report on Form 20-F 121 HSBC reported profit/(loss) before tax and balance sheet data (continued) 2022 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Net interest income 7,615 2,357 14,031 903 1,922 1,251 1,796 2,244 (1,742) 30,377 Net fee income 1,536 1,601 4,924 458 1,223 598 455 1,127 (152) 11,770 Net income from financial instruments held for trading or managed on a fair value basis 472 3,564 5,270 360 485 76 351 639 (939) 10,278 Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit and loss — (1,761) (12,117) — — — (9) 66 (10) (13,831) Insurance finance income/(expense) — 1,431 12,407 — — — 3 (32) (10) 13,799 Insurance service result — 149 636 — — — 50 (20) (6) 809 Other income/(expense) 1 148 (1,920) 491 22 533 29 67 (521) (1,431) (2,582) Net operating income before loan impairment (charges)/recoveries and other credit risk provisions 2 9,771 5,421 25,642 1,743 4,163 1,954 2,713 3,503 (4,290) 50,620 Change in expected credit losses and other credit impairment (charges)/recoveries (563) (292) (2,090) 21 (20) (84) (507) (61) 12 (3,584) Net operating income 9,208 5,129 23,552 1,764 4,143 1,870 2,206 3,442 (4,278) 47,036 Total operating expenses excluding impairment of goodwill and other intangible assets (4,667) (6,497) (13,011) (1,033) (3,429) (1,017) (1,631) (2,359) 1,090 (32,554) Impairment of goodwill and other intangible assets (54) 11 (42) (3) (9) (21) (5) (2) (22) (147) Operating profit/(loss) 4,487 (1,357) 10,499 728 705 832 570 1,081 (3,210) 14,335 Share of profit in associates and joint ventures less impairment — (38) 2,400 — — — 13 351 (3) 2,723 Profit/(loss) before tax 4,487 (1,395) 12,899 728 705 832 583 1,432 (3,213) 17,058 % % % % % % % % % % Share of HSBC’s profit before tax 26.3 (8.2) 75.6 4.3 4.1 4.9 3.4 8.4 (18.8) 100.0 Cost efficiency ratio 48.3 119.6 50.9 59.4 82.6 53.1 60.3 67.4 24.9 64.6 Balance sheet data $m $m $m $m $m $m $m $m $m $m Loans and advances to customers (net) 245,921 86,964 473,985 19,762 54,159 — 20,446 22,325 (1) 923,561 Total assets 412,522 863,308 1,297,806 48,086 239,117 94,604 39,939 67,345 (113,441) 2,949,286 Customer accounts 336,086 253,075 784,236 29,893 100,404 — 25,531 41,078 — 1,570,303 Risk-weighted assets 4,5 110,919 127,017 406,985 22,490 72,446 31,876 26,744 60,289 8,144 839,720 1 Other income/(expense) in this context includes gain on acquisitions, impairment gain/(loss) relating to the sale of our retail banking operations in France, and other operating income/(expense). 2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 3 Includes an impairment loss of $3.0bn recognised in respect of the Group’s investment in BoCom. 4 Risk-weighted assets are non-additive across the legal entities due to market risk diversification effects within the Group. 5 Balances are on a third-party Group consolidated basis. 6 Other trading entities’ RWAs balance at 31 December 2024 includes HSBC Argentina operational risk RWAs, due to the averaging calculation and will roll off over future reporting cycles. 122 HSBC Holdings plc Annual Report on Form 20-F Legal entities Summary information – legal entities and selected countries/territories Legal entity reported and constant currency results¹ 2024 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corpo- ration Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 2 Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 3 12,752 9,557 34,053 2,504 4,264 462 3,573 3,303 (4,614) 65,854 ECL (405) (211) (1,532) (198) (81) (40) (864) (93) 10 (3,414) Operating expenses (5,135) (6,723) (14,329) (1,192) (3,351) (236) (1,994) (1,981) 1,898 (33,043) Share of profit in associates and joint ventures 1 22 2,278 — — — 15 600 (4) 2,912 Profit/(loss) before tax 7,213 2,645 20,470 1,114 832 186 730 1,829 (2,710) 32,309 Loans and advances to customers (net) 272,973 103,464 449,940 20,440 55,786 — 23,439 4,617 (1) 930,658 Customer accounts 340,233 297,785 845,284 34,808 99,278 — 27,525 9,999 43 1,654,955 1 In the current period, constant currency results are equal to reported, as there is no currency translation. 2 Other trading entities includes the results of entities located in Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on the Group’s reported profit before tax of $ 1,429 m. Supplementary analysis is provided on page 129 to provide a fuller picture of the MENAT regional performance. 3 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Legal entity results: notable items 2024 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corpo- ration Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 — (148) — — — — — (23) (1,172) (1,343) Early redemption of legacy securities — — — — — — — — (237) (237) Operating expenses Disposals, acquisitions and related costs 8 (9) — — (29) (36) — (61) (72) (199) Restructuring and other related costs 2 3 15 (5) (2) (4) — — (9) (32) (34) 1 Includes a $1.0bn loss on disposal and a $5.2bn loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This is partly offset by a $4.8b n gain on disposal of our banking business in Canada, inclusive of a $0.3b n gain on the foreign exchange hedging of the sales proceeds, the recycling of $0.6b n in foreign currency translation reserve losses and $0.4b n of other reserves losses. 2 Amounts relate to restructuring provisions recognised in 2024 and reversals of restructuring provisions recognised during 2022. Selected countries/territories results 1 2024 UK 2 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue 3 21,017 22,038 4,078 4,216 3,573 ECL (526) (1,273) (121) (81) (864) Operating expenses (13,725) (8,886) (2,971) (3,350) (1,994) Share of profit/(loss) in associates and joint ventures 24 8 2,241 — 15 Profit before tax 6,790 11,887 3,227 785 730 Loans and advances to customers (net) 313,925 272,152 44,551 55,786 23,439 Customer accounts 524,251 575,141 63,169 99,278 27,525 1 In the current period, constant currency results are equal to reported, as there is no currency translation. 2 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 3 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. HSBC Holdings plc Annual Report on Form 20-F 123 Selected countries/territories results: notable items 2024 UK 1 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1,2 285 — — — — Early redemption of legacy securities (237) — — — — Operating expenses Disposals, acquisitions and related costs (50) (2) (7) (28) — Restructuring and other related costs 3 (42) (4) — (4) — 1    UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 2    Includes fair value movements on the foreign exchange hedging of the sale of our banking business in Canada which is booked in HSBC Overseas Holdings (UK) Limited. 3 Amounts relate to restructuring provisions recognised in 2024 and reversals of restructuring provisions recognised during 2022. Legal entity reported and constant currency results (continued) 2023 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corpo- ration Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 1 Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 2 Reported 13,405 9,289 31,899 2,425 3,863 1,966 3,313 4,729 (4,831) 66,058 Currency translation 391 150 (93) 1 — (28) (103) (1,567) 103 (1,146) Constant currency 13,796 9,439 31,806 2,426 3,863 1,938 3,210 3,162 (4,728) 64,912 ECL Reported (523) (212) (1,641) (90) (94) (46) (696) (279) 134 (3,447) Currency translation (11) (1) — — — 1 34 166 (1) 188 Constant currency (534) (213) (1,641) (90) (94) (45) (662) (113) 133 (3,259) Operating expenses Reported (4,612) (6,386) (13,395) (1,096) (3,251) (1,049) (1,826) (2,635) 2,180 (32,070) Currency translation (126) (99) 31 — — 16 55 796 (97) 576 Constant currency (4,738) (6,485) (13,364) (1,096) (3,251) (1,033) (1,771) (1,839) 2,083 (31,494) Share of profit/(loss) in associates and joint ventures Reported — (52) (696) — — — 14 544 (3) (193) Currency translation — (1) (61) — — — (1) — — (63) Constant currency — (53) (757) — — — 13 544 (3) (256) Profit/(loss) before tax Reported 8,270 2,639 16,167 1,239 518 871 805 2,359 (2,520) 30,348 Currency translation 254 49 (123) 1 — (11) (15) (605) 5 (445) Constant currency 8,524 2,688 16,044 1,240 518 860 790 1,754 (2,515) 29,903 Loans and advances to customers (net) Reported 270,208 95,750 455,315 20,072 54,829 — 26,410 15,951 — 938,535 Currency translation (4,407) (4,136) (6,200) (4) — — (4,904) (1,794) (1) (21,446) Constant currency 265,801 91,614 449,115 20,068 54,829 — 21,506 14,157 (1) 917,089 Customer accounts Reported 339,611 274,733 801,430 31,341 99,607 — 29,423 35,326 176 1,611,647 Currency translation (5,539) (9,425) (7,068) (12) — — (5,464) (4,527) 1 (32,034) Constant currency 334,072 265,308 794,362 31,329 99,607 — 23,959 30,799 177 1,579,613 1 Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on the Group’s reported profit before tax of $1,286 m, and constant currency profit before tax of $1,090 m. Supplementary analysis is provided on page 129 to provide a fuller picture of the MENAT regional performance. 2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 124 HSBC Holdings plc Annual Report on Form 20-F Legal entities Legal entity results: notable items (continued) 2023 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1,2,3 1,591 (14) — — — — — — (279) 1,298 Fair value movements on financial instruments 4 — — — — — — — — 14 14 Restructuring and other related costs — 361 — — — — — — (361) — Disposal losses on Markets Treasury repositioning (145) (94) (473) (20) (246) — — — 1 (977) Operating expenses Disposals, acquisitions and related costs (45) (111) — — (11) (115) — — (39) (321) Restructuring and other related costs 5 20 30 10 2 10 — 6 2 56 136 Impairment of interest in associate 6 — — (3,000) — — — — — — (3,000) 1  Includes the impacts of the sale of our retail banking operations in France. 2  Includes the gain of $1.6bn recognised in respect of the acquisition of SVB UK. 3  Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 4  Fair value movements on non-qualifying hedges in HSBC Holdings. 5  Balances relate to reversals of restructuring provisions recognised during 2022. 6  Includes an impairment loss of $3.0bn recognised in respect of the Group’s investment in BoCom. Selected countries/territories results (continued) 2023 UK 1 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue 2 Reported 19,092 20,611 3,923 3,796 3,313 Currency translation 637 67 (64) — (103) Constant currency 19,729 20,678 3,859 3,796 3,210 ECL Reported (594) (1,529) (93) (94) (696) Currency translation (14) (5) (2) — 34 Constant currency (608) (1,534) (95) (94) (662) Operating expenses Reported (12,485) (8,244) (2,713) (3,251) (1,826) Currency translation (328) (27) 41 — 55 Constant currency (12,813) (8,271) (2,672) (3,251) (1,771) Share of profit/(loss) in associates and joint ventures Reported (53) 30 (746) — 14 Currency translation — — (61) — (1) Constant currency (53) 30 (807) — 13 Profit before tax Reported 5,960 10,868 371 451 805 Currency translation 295 35 (86) — (15) Constant currency 6,255 10,903 285 451 790 Loans and advances to customers (net) Reported 309,262 279,551 44,275 54,829 26,410 Currency translation (5,044) 1,663 (1,207) — (4,904) Constant currency 304,218 281,214 43,068 54,829 21,506 Customer accounts Reported 508,181 543,504 56,006 99,607 29,423 Currency translation (8,289) 3,233 (1,525) — (5,464) Constant currency 499,892 546,737 54,481 99,607 23,959 1 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. HSBC Holdings plc Annual Report on Form 20-F 125 Selected countries/territories results: notable items (continued) 2023 UK 1 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue Disposals, acquisitions and related costs 2,3,4 1,272 — — — — Fair value movements on financial instruments 5 14 — — — — Disposal losses on Markets Treasury repositioning (239) (473) — (246) — Operating expenses Disposals, acquisitions and related costs (71) (1) (5) (11) — Restructuring and other related costs 6 75 9 4 10 6 Impairment of interest in associate 7 — — (3,000) — — 1 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 2 Includes the gain of $1.6bn recognised in respect of the acquisition of SVB UK. 3 Includes the impairment gain relating to the sale of our retail banking operations in France. 4    Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. 5 Fair value movements on non-qualifying hedges in HSBC Holdings. 6 Balances relates to reversals of restructuring provisions recognised during 2022. 7 Includes an impairment loss of $3.0bn recognised in respect of the Group’s investment in BoCom. Legal entity reported and constant currency results 2022 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corpo- ration Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities 1 Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue 2 Reported 9,771 5,421 25,642 1,743 4,163 1,954 2,713 3,503 (4,290) 50,620 Currency translation 399 (30) (338) 3 — (96) 265 (1,235) (1) (1,033) Constant currency 10,170 5,391 25,304 1,746 4,163 1,858 2,978 2,268 (4,291) 49,587 ECL Reported (563) (292) (2,090) 21 (20) (84) (507) (61) 12 (3,584) Currency translation (57) 8 2 — — 5 (46) 59 (2) (31) Constant currency (620) (284) (2,088) 21 (20) (79) (553) (2) 10 (3,615) Operating expenses Reported (4,721) (6,486) (13,053) (1,036) (3,438) (1,038) (1,636) (2,361) 1,068 (32,701) Currency translation (178) (177) 165 (1) — 51 (163) 792 (17) 472 Constant currency (4,899) (6,663) (12,888) (1,037) (3,438) (987) (1,799) (1,569) 1,051 (32,229) Share of profit/(loss) in associates and joint ventures Reported — (38) 2,400 — — — 13 351 (3) 2,723 Currency translation — — (164) — — — — — — (164) Constant currency — (38) 2,236 — — — 13 351 (3) 2,559 Profit/(loss) before tax Reported 4,487 (1,395) 12,899 728 705 832 583 1,432 (3,213) 17,058 Currency translation 164 (199) (335) 2 — (40) 56 (384) (20) (756) Constant currency 4,651 (1,594) 12,564 730 705 792 639 1,048 (3,233) 16,302 Loans and advances to customers (net) Reported 245,921 86,964 473,985 19,762 54,159 — 20,446 22,325 (1) 923,561 Currency translation 10,166 331 (8,248) 16 — — (1,318) (3,210) 1 (2,262) Constant currency 256,087 87,295 465,737 19,778 54,159 — 19,128 19,115 — 921,299 Customer accounts Reported 336,086 253,075 784,236 29,893 100,404 — 25,531 41,078 — 1,570,303 Currency translation 13,894 3,640 (9,033) 24 — — (1,645) (8,633) — (1,753) Constant currency 349,980 256,715 775,203 29,917 100,404 — 23,886 32,445 — 1,568,550 1 Other trading entities includes the results of entities located in Oman, Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. These entities had an aggregated impact on the Group’s reported profit before tax of $ 997 m and constant currency profit before tax of $ 756 m. 2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 126 HSBC Holdings plc Annual Report on Form 20-F Legal entities Legal entity results: notable items (continued) 2022 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. HSBC Bank Canada Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total $m $m $m $m $m $m $m $m $m $m Revenue Disposals, acquisitions and related costs 1 — (2,242) — — — — — — (495) (2,737) Fair value movements on financial instruments 2 — — — — — — — — (618) (618) Restructuring and other related costs 3 1 (278) 46 (13) 98 1 (17) — (85) (247) Operating expenses Disposals, acquisitions and related costs — (18) — — — — — — — (18) Restructuring and other related costs (521) (656) (741) (64) (421) (87) (115) (150) (127) (2,882) 1 Includes losses from classifying businesses as held for sale as part of a broader restructuring of our European business, of which $2.3bn (inclusive of $0.4bn in goodwill impairments) relates to the sale of the retail banking operations in France. Held-for-sale classification for the sale of the retail banking operations in France was reversed in 1Q23 ($2.1bn loss reversed) and reinstated in 4Q23 ($2.0bn loss reinstated). 2 Fair value movements on non-qualifying hedges in HSBC Holdings. 3 Comprises gains and losses relating to the business update in February 2020, including losses associated with the RWA reduction programme. Selected countries/territories results (continued) 2022 UK 1 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue 2 Reported 17,268 15,712 4,104 4,107 2,713 Currency translation 746 60 (272) — 265 Constant currency 18,014 15,772 3,832 4,107 2,978 ECL Reported (712) (1,683) (326) (20) (507) Currency translation (54) (8) 21 — (46) Constant currency (766) (1,691) (305) (20) (553) Operating expenses Reported (13,232) (7,935) (2,757) (3,438) (1,636) Currency translation (504) (26) 178 — (163) Constant currency (13,736) (7,961) (2,579) (3,438) (1,799) Share of profit/(loss) in associates and joint ventures Reported (41) 5 2,386 — 12 Currency translation — — (163) — 1 Constant currency (41) 5 2,223 — 13 Profit before tax Reported 3,283 6,099 3,407 649 582 Currency translation 188 26 (236) — 57 Constant currency 3,471 6,125 3,171 649 639 Loans and advances to customers (net) Reported 286,032 294,580 50,481 54,159 20,446 Currency translation 11,825 1,122 (2,811) — (1,318) Constant currency 297,857 295,702 47,670 54,159 19,128 Customer accounts Reported 493,028 542,543 56,948 100,404 25,531 Currency translation 20,382 2,068 (3,169) — (1,645) Constant currency 513,410 544,611 53,779 100,404 23,886 1 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. HSBC Holdings plc Annual Report on Form 20-F 127 Selected countries/territories results: notable items (continued) 2022 UK 1 Hong Kong Mainland China US Mexico $m $m $m $m $m Revenue Disposals, acquisitions and related costs (60) — — — — Fair value movements on financial instruments 2 (617) — — — — Restructuring and other related costs 3 407 (124) 71 99 (17) Operating expenses Restructuring and other related costs (1,741) (393) (70) (424) (115) 1 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 2 Fair value movements on non-qualifying hedges in HSBC Holdings. 3 Comprises gains and losses relating to the business update in February 2022, including losses associated with RWA reduction commitments. Analysis by country/territory Profit/(loss) before tax by country/territory within global businesses 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m UK 1 2,487 3,446 12 845 6,790 –  of which: HSBC UK Bank plc (ring-fenced bank) 2,628 4,367 146 72 7,213 –  of which: HSBC Bank plc (non-ring-fenced bank) 534 97 657 (359) 929 –  of which: Holdings and other (675) (1,018) (791) 1,132 (1,352) France 60 196 127 (153) 230 Germany 27 45 137 5 214 Hong Kong 7,453 3,212 1,704 (482) 11,887 Australia 141 378 99 (9) 609 India 96 448 875 269 1,688 Indonesia 7 156 63 (5) 221 Mainland China 2 (167) 235 678 2,481 3,227 Malaysia 143 155 219 (3) 514 Singapore 572 376 448 (21) 1,375 Taiwan 113 70 223 (8) 398 Egypt 123 145 355 (16) 607 UAE 371 228 355 (83) 871 Saudi Arabia 3 — — 112 596 708 US 74 578 331 (198) 785 Canada 4 71 126 26 4,503 4,726 Mexico 185 529 13 3 730 Other 5 426 1,537 1,286 (6,520) (3,271) Year ended 31 Dec 2024 12,182 11,860 7,063 1,204 32,309 1 UK includes results from the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 2 Includes our share of the profits of our associate, Bank of Communications Co., Limited. 3 Includes the results of HSBC Saudi Arabia and our share of the profits of our associate, Saudi Awwal Bank. 4 Corporate Centre includes a gain of $4.5bn on the sale of our banking business in Canada excluding the fair value movements on the foreign exchange hedging of the sale which is booked in HSBC Overseas Holdings (UK) Limited. 5 Corporate Centre includes the profit and loss impact of inter-company debt eliminations of $(269)m and a loss of $6.2bn relating to the sale of our business in Argentina. 128 HSBC Holdings plc Annual Report on Form 20-F Legal entities Profit/(loss) before tax by country/territory within global businesses (continued) 2023 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m UK 1 2,415 4,437 (692) (200) 5,960 –  of which: HSBC UK Bank plc (ring-fenced bank) 2,754 5,282 144 90 8,270 –  of which: HSBC Bank plc (non-ring-fenced bank) 396 295 121 177 989 –  of which: Holdings and other (735) (1,140) (957) (467) (3,299) France (35) 235 128 10 338 Germany 44 144 128 4 320 Hong Kong 6,808 2,970 1,394 (304) 10,868 Australia 177 319 85 (15) 566 India 56 398 774 289 1,517 Indonesia 23 124 68 (7) 208 Mainland China 2 (90) 339 662 (540) 371 Malaysia 111 158 219 (21) 467 Singapore 233 436 444 (31) 1,082 Taiwan 99 72 198 (7) 362 Egypt 141 98 303 (11) 531 UAE 387 212 377 (83) 893 Saudi Arabia 3 — — 118 539 657 US 225 513 111 (398) 451 Canada 293 561 120 (96) 878 Mexico 317 504 15 (31) 805 Other 4 340 1,760 1,472 502 4,074 Year ended 31 Dec 2023 11,544 13,280 5,924 (400) 30,348 1 UK includes results from the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 2 Includes our share of the profits of our associate, Bank of Communications Co., Limited. 3 Includes the results of HSBC Saudi Arabia and our share of the profits of our associate, Saudi Awwal Bank. 4 Corporate Centre includes the profit and loss impact of inter-company debt eliminations of $571m. 2022 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m UK 1 1,764 2,094 (534) (41) 3,283 –  of which: HSBC UK Bank plc (ring-fenced bank) 2,112 2,662 143 (430) 4,487 –  of which: HSBC Bank plc (non-ring fenced bank) 294 315 141 (473) 277 –  of which: Holdings and other (642) (883) (818) 862 (1,481) France 2 (2,248) 210 81 (231) (2,188) Germany 17 8 133 (147) 11 Hong Kong 4,435 1,278 955 (568) 6,100 Australia 147 180 157 (36) 448 India 45 304 622 306 1,277 Indonesia 4 71 100 (8) 167 Mainland China 3 (100) 303 526 2,678 3,407 Malaysia 110 89 219 (36) 382 Singapore 218 255 351 (77) 747 Taiwan 36 43 137 (17) 199 Egypt 101 76 194 (4) 367 UAE 128 107 320 (86) 469 Saudi Arabia 4 30 — 94 345 469 US 209 557 270 (387) 649 Canada 243 548 140 (89) 842 Mexico 241 414 39 (112) 582 Other 5 208 1,056 1,115 (2,532) (153) Year ended 31 Dec 2022 5,588 7,593 4,919 (1,042) 17,058 1 UK includes results from the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). 2 Includes the impact of goodwill impairment of $425m as a result of the reclassification of our retail banking operations in France to held for sale. At 31 December 2022, HSBC’s cash-generating units were based on geographical regions, sub-divided by global businesses. 3 Includes our share of the profits of our associate, Bank of Communications Co., Limited. 4 Includes the results of HSBC Saudi Arabia and our share of the profits of our associate, Saudi Awwal Bank. 5 Corporate Centre includes the profit and loss impact of inter-company debt eliminations of $1,850m. HSBC Holdings plc Annual Report on Form 20-F 129 Middle East, North Africa and Türkiye supplementary information The following tables show the results of our Middle East, North Africa and Türkiye business operations on a regional basis (including results of all the legal entities operating in the region and our share of the results of Saudi Awwal Bank). They also show the profit before tax of each of the global businesses. Middle East, North Africa and Türkiye regional performance 2024 2023 $m $m Revenue 1 3,852 3,688 Change in expected credit losses and other credit impairment charges (222) (133) Operating expenses (1,695) (1,592) Share of profit in associates and joint ventures 596 538 Profit before tax 2,531 2,501 Loans and advances to customers (net) 22,975 22,766 Customer accounts 42,434 40,708 1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. Profit before tax by global business 2024 2023 $m $m Wealth and Personal Banking 585 612 Commercial Banking 368 400 Global Banking and Markets 1,091 1,104 Corporate Centre 487 385 Total 2,531 2,501 Reconciliation of alternative performance measures Contents 129 Use of alternative performance measures 130 Alternative performance measure definitions 131 Constant currency revenue and profit before tax excluding notable items and strategic transactions 131 Return on average ordinary shareholders’ equity and return on average tangible equity 132 Net asset value and tangible net asset value per ordinary share 132 Post-tax return and average total shareholders’ equity on average total assets 133 Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers 133 Target basis operating expenses 134 Basic earnings per share excluding material notable items and related impacts 134 Multi-jurisdictional client revenue Use of alternative performance measures Our reported results are prepared in accordance with IFRS Accounting Standards as detailed in our financial statements starting on page 363 . As described on page 84 , we use a combination of reported and alternative performance measures, including those derived from our reported results that eliminate factors that distort year-on-year comparisons. These are considered alternative performance measures (non-GAAP financial measures). The following information details the adjustments made to the reported results and the calculation of other alternative performance measures. All alternative performance measures are reconciled to the closest reported performance measure. On 1 January 2023, HSBC adopted IFRS 17 ‘Insurance Contracts’. As required by the standard, the Group applied the requirements retrospectively with comparative data previously published under IFRS 4 ‘Insurance Contracts’ restated from the 1 January 2022 transition date. In addition to the alternative performance measures set out in this section, another alternative performance measure in relation to the Group’s insurance manufacturing operations is set out on pages 114 to 116 . 130 HSBC Holdings plc Annual Report on Form 20-F Reconciliation of alternative performance measures Alternative performance measure definitions Alternative performance measure Definition Reported revenue excluding notable items Reported revenue after excluding notable items reported under revenue Reported profit before tax excluding notable items Reported profit before tax after excluding notable items reported under revenue less notable items reported under operating expenses Constant currency revenue excluding notable items 1 Reported revenue excluding notable items and the impact of foreign exchange translation 2 Constant currency profit before tax excluding notable items 1 Reported profit before tax excluding notable items and the impact of foreign exchange translation 2 Constant currency revenue excluding notable items and strategic transactions 1 Reported revenue excluding notable items, strategic transactions and the impact of foreign exchange translation 3 Constant currency profit before tax excluding notable items and strategic transactions 1 Reported profit before tax excluding notable items, strategic transactions and the impact of foreign exchange translation 3 Return on average ordinary shareholders’ equity (‘RoE’) Profit attributable to the ordinary shareholders Average ordinary shareholders’ equity Return on average tangible equity (‘RoTE‘) Profit attributable to the ordinary shareholders, excluding impairment of goodwill and other intangible assets Average ordinary shareholders’ equity adjusted for goodwill and intangibles Return on average tangible equity (‘RoTE‘) excluding notable items Profit attributable to the ordinary shareholders, excluding impairment of goodwill and other intangible assets and notable items 2 Average ordinary shareholders’ equity adjusted for goodwill and intangibles and notable items 2 Net asset value per ordinary share Total ordinary shareholders’ equity 4 Basic number of ordinary shares in issue after deducting own shares held Tangible net asset value per ordinary share Tangible ordinary shareholders’ equity 5 Basic number of ordinary shares in issue after deducting own shares held Post-tax return on average total assets Profit after tax Average total assets Average total shareholders’ equity on average total assets Average total shareholders’ equity Average total assets Expected credit losses and other credit impairment charges (‘ECL’) as % of average gross loans and advances to customers Annualised constant currency ECL 6 Constant currency average gross loans and advances to customers 6 Expected credit losses and other credit impairment charges (‘ECL’) as % of average gross loans and advances to customers, including held for sale Annualised constant currency ECL 6 Constant currency average gross loans and advances to customers, including held for sale 6 Target basis operating expenses Reported operating expenses excluding notable items, foreign exchange translation and other excluded items 7 Basic earnings per share excluding material notable items and related impacts Profit attributable to ordinary shareholders excluding material notable items and related impacts 8 Weighted average number of ordinary shares outstanding after deducting own shares held Multi-jurisdictional client revenue Total client revenue we generate from clients that hold a relationship with us that generates revenue in more than one market 1 Constant currency performance is computed by adjusting reported results for the effects of foreign currency translation differences, which distort period-on- period comparisons. 2 For details of notable items, see ‘Supplementary financial information‘ on page 108 . 3 For details of strategic transactions, see ‘Strategic transactions supplementary analysis‘ on page 111 . 4 Total ordinary shareholders’ equity is total shareholders‘ equity less non-cumulative preference shares and capital securities. 5 Tangible ordinary shareholders’ equity is total ordinary shareholders’ equity excluding goodwill and other intangible assets (net of deferred tax). 6 The constant currency numbers are derived by adjusting reported ECL and average loans and advances to customers for the effects of foreign currency translation differences. 7 Other excluded items includes the impact of re-translating comparative period financial information at the latest rates of foreign exchange in hyperinflationary economies, which we consider to be outside of our control, and the impact of the sale of our retail banking operations in France and banking business in Canada. 8 For details of material notable items and related impacts, that are included in the calculation of Profit attributable to ordinary shareholders excluding material notable items and related impacts, see page 134 . HSBC Holdings plc Annual Report on Form 20-F 131 Constant currency revenue and profit before tax excluding notable items and strategic transactions Year ended 2024 2023 2022 $m $m $m Revenue Reported 65,854 66,058 50,620 Notable items 1,580 (335) 3,602 Reported revenue excluding notable items 67,434 65,723 54,222 Currency translation 1 (1,234) (839) Constant currency revenue excluding notable items 67,434 64,489 53,383 Constant currency impact of strategic transactions (distorting impact of operating results between periods) 2 (178) (1,446) N/A Constant currency revenue excluding notable items and strategic transactions 67,256 63,043 N/A Profit before tax Reported 32,309 30,348 17,058 Notable items 1,813 2,850 6,502 Reported profit before tax excluding notable items 34,122 33,198 23,560 Currency translation 1 (518) (503) Constant currency profit before tax excluding notable items 34,122 32,680 23,057 Constant currency impact of strategic transactions (distorting impact of operating results between periods) 2 (85) (463) N/A Constant currency profit before tax excluding notable items and strategic transactions 34,037 32,217 N/A 1 Currency translation on the reported balance excluding currency translation on notable items. 2 For more details of strategic transactions, please refer to page 111 . Return on average ordinary shareholders’ equity, return on average tangible equity and return on average tangible equity excluding notable items 2024 2023 2022 $m $m $m Profit after tax Profit attributable to the ordinary shareholders of the parent company 22,917 22,432 14,346 Impairment of goodwill and other intangible assets (net of tax) 118 43 535 Profit attributable to the ordinary shareholders, excluding goodwill and other intangible assets impairment 23,035 22,475 14,881 Impact of notable items 1 1,588 2,173 2,750 Profit attributable to the ordinary shareholders, excluding goodwill, other intangible assets impairment and notable items 24,623 24,648 17,631 Equity Average total shareholders’ equity 187,507 184,029 180,263 Effect of average preference shares and other equity instruments (18,480) (18,794) (21,202) Average ordinary shareholders’ equity 169,027 165,235 159,061 Effect of goodwill and other intangibles (net of deferred tax) (11,626) (11,480) (10,786) Average tangible equity 157,401 153,755 148,275 Average impact of notable items (3,322) (1,162) 1,565 Average tangible equity excluding notable items 154,079 152,593 149,840 % % % Ratio Return on average ordinary shareholders’ equity 13.6 13.6 9.0 Return on average tangible equity 14.6 14.6 10.0 Return on average tangible equity excluding notable items 16.0 16.2 11.8 1 For details of notable items please refer to Supplementary financial information on page 108 . From 1 January 2024, we have revised the adjustments made to return on average tangible equity (‘RoTE’). Prior to this, we adjusted RoTE for the impact of strategic transactions and the impairment of our investment in Bank of Communications Co., Limited (‘BoCom’), whereas from 1 January 2024 we have excluded all notable items. This was intended to improve alignment with the treatment of notable items in our other income statement disclosures. Comparatives have been re-presented on the revised basis and we no longer disclose RoTE excluding strategic transactions and the impairment of BoCom. We will now target a RoTE in the mid-teens in each of the three years from 2025 to 2027 excluding the impact of notable items. 132 HSBC Holdings plc Annual Report on Form 20-F Reconciliation of alternative performance measures The following table details the adjustments made to reported results by global business: Return on average tangible equity by global business Year ended 31 Dec 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Profit before tax 12,182 11,860 7,063 1,204 32,309 Tax expense (2,173) (2,834) (1,573) (730) (7,310) Profit after tax 10,009 9,026 5,490 474 24,999 Less attributable to: preference shareholders, other equity holders, non-controlling interests (824) (471) (520) (267) (2,082) Profit attributable to ordinary shareholders of the parent company 9,185 8,555 4,970 207 22,917 Other adjustments (110) 314 (202) 116 118 Profit attributable to ordinary shareholders 9,075 8,869 4,768 323 23,035 Average tangible shareholders’ equity 31,267 44,357 36,622 45,155 157,401 Return on average tangible equity (%) 29.0 20.0 13.0 0.7 14.6 Year ended 31 Dec 2023 Profit before tax 11,544 13,280 5,924 (400) 30,348 Tax expense (2,141) (2,945) (1,165) 462 (5,789) Profit after tax 9,403 10,335 4,759 62 24,559 Less attributable to: preference shareholders, other equity holders, non-controlling interests (828) (485) (588) (226) (2,127) Profit attributable to ordinary shareholders of the parent company 8,575 9,850 4,171 (164) 22,432 Other adjustments (221) 364 168 (268) 43 Profit attributable to ordinary shareholders 8,354 10,214 4,339 (432) 22,475 Average tangible shareholders’ equity 29,352 43,687 38,036 42,680 153,755 Return on average tangible equity (%) 28.5 23.4 11.4 (1.0) 14.6 Net asset value and tangible net asset value per ordinary share 2024 2023 2022 $m $m $m Total shareholders’ equity 184,973 185,329 177,833 Preference shares and other equity instruments (19,070) (17,719) (19,746) Total ordinary shareholders’ equity 165,903 167,610 158,087 Goodwill, PVIF and intangible assets (net of deferred tax) (11,608) (11,900) (11,160) Tangible ordinary shareholders’ equity 154,295 155,710 146,927 Basic number of $0.50 ordinary shares outstanding after deducting own shares held 17,918 19,006 19,739 Value per share $ $ $ Net asset value per ordinary share 9.26 8.82 8.01 Tangible net asset value per ordinary share 8.61 8.19 7.44 Post-tax return and average total shareholders’ equity on average total assets 2024 2023 2022 $m $m $m Profit after tax 24,999 24,559 16,249 Average total shareholders’ equity 187,507 184,029 180,263 Average total assets 3,062,474 3,059,887 3,017,495 Ratio % % % Post-tax return on average total assets 0.8 0.8 0.5 Average total shareholders’ equity to average total assets 6.12 6.01 5.97 HSBC Holdings plc Annual Report on Form 20-F 133 Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers and expected credit losses and other credit impairment charges as % of average gross loans and advances to customers, including held for sale 2024 2023 2022 $m $m $m Expected credit losses and other credit impairment charges (‘ECL’) (3,414) (3,447) (3,584) Currency translation — 188 (31) Constant currency (3,414) (3,259) (3,615) Average gross loans and advances to customers 952,484 955,585 1,014,148 Currency translation (16,140) (10,586) (17,751) Constant currency 936,344 944,999 996,397 Average gross loans and advances to customers, including held for sale 968,785 1,020,992 1,035,678 Currency translation (17,394) (14,752) (18,233) Constant currency 951,391 1,006,240 1,017,445 Ratio % % % Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers 0.36 0.34 0.36 Expected credit losses and other credit impairment charges as % of average gross loans and advances to customers, including held for sale 0.36 0.32 0.36 Target basis operating expenses Target basis operating expenses for 2024 was computed by excluding the direct cost impact of our retail banking operations in France and Canada banking business disposals from the 2023 baseline. It is measured on a constant currency basis and excludes notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency, which we consider to be outside of our control. We consider target basis operating expenses to  provide useful information to investors by quantifying and excluding the notable items that management considered when setting and assessing cost-related targets. In 2024, we targeted operating expenses growth of approximately 5% compared with 2023. This target reflected our business plan for 2024, which included an increase in staff compensation, higher spend and investment in technology for growth and efficiency, in part mitigated by cost savings from actions taken during 2023. We are targeting growth in target basis operating expenses of approximately 3% in 2025 compared with 2024. Our target basis operating expenses for 2025 excludes the direct cost impact of the business disposals in Canada and Argentina, notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency. Our cost target includes the impact of simplification-related saves associated with our announced reorganisation, which aims to generate approximately $0.3bn of cost reductions in 2025, with a commitment to an annualised reduction of $1.5bn in our cost base expected by the end of 2026. To deliver these reductions, we plan to incur severance and other up-front costs of $1.8bn over 2025 and 2026, which will be classified as notable items. We do not reconcile our forward target basis operating expenses guidance to the reported operating expenses. Target basis operating expenses 2024 2023 $m $m Reported operating expenses 33,043 32,070 Notable items (233) (185) –  disposals, acquisitions and related costs (199) (321) –  restructuring and other related costs 1 (34) 136 Currency translation 2 (577) Excluding the constant currency impact of the sale of our retail banking operations in France and banking business in Canada 3 (162) (976) Excluding the impact of retranslating prior year costs of hyperinflationary economies at a constant currency foreign exchange rate 742 Target basis operating expenses 32,648 31,074 1 Amounts relate to restructuring provisions recognised in 2024 and reversals of restructuring provisions recognised during 2022. 2 Currency translation on reported operating expenses, excluding currency translation on notable items. 3    This represents the business as usual costs which are not classified as notable items relating to our retail banking operations in France and banking business in Canada, on a constant currency basis. This does not include the disposal costs which relate to these transactions. 134 HSBC Holdings plc Annual Report on Form 20-F Reconciliation of alternative performance measures Basic earnings per share excluding material notable items and related impacts Basic earnings per share excluding material notable items and related impacts 2024 2023 $m $m Profit attributable to shareholders of company 23,979 23,533 Coupon payable on capital securities classified as equity (1,062) (1,101) Profit attributable to ordinary shareholders of company 22,917 22,432 Impairment of interest in associate 1 — 3,000 Gain on acquisition of SVB UK (5) (1,549) Impact of the sale of our retail banking operations in France (56) 108 Impact of the sale of our banking business in Canada 2 (4,963) (311) Impact of the sale of our business in Argentina 6,161 — Profit attributable to ordinary shareholders of company excluding material notable items and related impacts 24,054 23,680 Number of shares Weighted average basic number of ordinary shares (millions) after deducting own shares held 18,357 19,478 Basic earnings per share ($) 1.25 1.15 Basic earnings per share excluding material notable items and related impacts ($) 1.31 1.22 Dividend per ordinary share (in respect of the period) ($) 3 0.87 0.61 Dividend payout ratio (%) (dividend per ordinary share divided by basic earnings per share excluding material notable items and related impacts) 50% 50% 1 Represents an impairment loss of $ 3 bn recognised in respect of the Group’s investment in BoCom in 2023. See Note 18 on page 424 . 2 Represents gain on sale of business in Canada recognised on completion, inclusive of the earnings recognised by the banking business from 30 June 2022, the recycling of losses in foreign currency translation reserves and other reserves, and gain on the foreign exchange hedging of the sale proceeds. 3    In 2024, dividend per share includes the special dividend of $0.21 per ordinary share arising from the proceeds of the sale of our banking business in Canada to Royal Bank of Canada. Material notable items are a subset of notable items. Material notable items are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature, which are excluded from our dividend payout ratio calculation and our earnings per share measure, along with related impacts. Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Group’s income statement. Related impacts include those items that do not qualify for designation as notable items but whose adjustment is considered by management to be appropriate for the purposes of determining the basis for our dividend payout ratio calculation. Material notable items in 2024 and comparative periods included the sale of our business in Argentina, the sale of our retail banking operations in France, the sale of our banking business in Canada, the gain following the acquisition of SVB UK and the impairment of our investment in BoCom. In determining this measure, we also excluded HSBC Bank Canada‘s financial results from the 30 June 2022 net asset reference date until completion of the sale, as the gain on sale was recognised through a combination of the consolidation of HSBC Bank Canada‘s results in the Group‘s results since this date, and the remaining gain on sale recognised at completion. For the sale of our business in Argentina, between signing and closing, the loss on sale varied by changes in the net asset value of the disposed business and associated hyperinflation and foreign currency translation, and in the fair value of consideration including price adjustments and migration costs. There were no additional related impacts identified, and the ongoing profits from HSBC Argentina were not excluded from our basic earnings per share excluding material notable items and related impacts. Multi-jurisdictional client revenue Multi-jurisdictional client revenue is a financial metric we use to assess our ability to drive value from our international network. In our wholesale businesses, we identify a client as multi-jurisdictional if they hold a relationship with us that generates revenue in any market outside of where the primary relationship is managed. A client is defined as a mastergroup (HSBC’s own client groupings) that includes both the parent and, where relevant, any subsidiaries. Multi-jurisdictional client revenue is a component of wholesale client revenue and represents the total client revenue we generate from multi-jurisdictional clients. Wholesale client revenue is derived by excluding from CMB and GBM reported revenue the revenue we generate from client facilitation in Fixed Income and Equities, as well as other non-client revenue. In 2023, we also excluded the gain on the acquisition of SVB UK. Wholesale multi-jurisdictional client revenue 2024 2023 $bn $bn CMB and GBM revenue 39.1 39.0 Allocated revenue and other 1 (1.3) 0.9 Client facilitation in Fixed Income and Equities (5.6) (4.8) Gain on acquisition of SVB UK — (1.6) Wholesale client revenue 32.3 33.5 –  clients banked in multiple jurisdictions (‘multi-jurisdictional’) 20.0 20.4 –  domestic only clients 12.3 13.1 1 Including allocations of Market Treasury revenue, HSBC Holdings interest expense and hyperinflationary accounting adjustments, and interest earned on capital held in the global businesses. HSBC Holdings plc Annual Report on Form 20-F 135 Other information Contents 135 Disclosure controls 135 Management’s assessment of internal controls over financial reporting 135 Regulation and supervision 141 Disclosures pursuant to Section 13(r) of the Securities Exchange Act Disclosure controls The Group Chief Executive and Group Chief Financial Officer, with the assistance of other members of management, carried out an evaluation of the effectiveness of the design and operation of HSBC Holdings’ disclosure controls and procedures as at 31 December 2024. Based upon that evaluation, the Group Chief Executive and Group Chief Financial Officer concluded that the disclosure controls and procedures at 31 December 2024 were effective to provide reasonable assurance that information required to be disclosed in the reports that the company files and submits under the US Securities Exchange Act of 1934, as amended, is recorded, processed, summarised and reported as and when required. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Management’s assessment of internal controls over financial reporting Management is responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting, and has completed an assessment of the effectiveness of the Group’s internal controls over financial reporting for the year ended 31 December 2024. In making the assessment, management used the framework for internal control evaluation contained in the Financial Reporting Council’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting (September 2014), as well as the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (‘COSO’) in ‘Internal Control-Integrated Framework (2013)’. There have been no changes in HSBC Holdings’ internal control over financial reporting during the year ended 31 December 2024 that have materially affected, or are reasonably likely to materially affect, HSBC Holdings’ internal control over financial reporting. Based on the assessment performed, management concluded that for the year ended 31 December 2024, the Group’s internal controls over financial reporting were effective. PricewaterhouseCoopers LLP, which has audited the consolidated financial statements of the Group for the year ended 31 December 2024, has also audited the effectiveness of the Group’s internal control over financial reporting as stated in their report on page 361 . Regulation and supervision The ordinary shares of HSBC Holdings are listed in London, Hong Kong, New York and Bermuda. As a result of the listing in London, HSBC Holdings is subject to the UK Listing Rules of the FCA. As a result of the listing in Hong Kong, HSBC Holdings is subject to The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (‘HKEX’). In the US, where the listing is through an American Depositary Receipt Programme, shares are traded in the form of American Depositary Shares (‘ADS’), which are registered with the US Securities and Exchange Commission (‘SEC’). As a consequence of its US listing, HSBC Holdings is also subject to the reporting and other requirements of: the US Securities Act of 1933, as amended; the Securities Exchange Act of 1934, as amended; and the New York Stock Exchange’s (‘NYSE’) Listed Company Manual, in each case as applied to foreign private issuers. In Bermuda, HSBC Holdings is subject to the listing rules of the Bermuda Stock Exchange applicable to companies with secondary listings. A statement of our compliance with the provisions of the UK Corporate Governance Code issued by the Financial Reporting Council and with the Hong Kong Corporate Governance Code set out in Appendix 14 to the Rules Governing the Listing of Securities on HKEX can be found in the ‘Report of the Directors: Statement of Compliance’ on page 359 . Our operations throughout the world are regulated and supervised globally by a large number of different regulatory authorities, central banks and other bodies in those jurisdictions in which we have offices, branches or subsidiaries. These authorities impose a variety of requirements and controls designed to provide financial stability, transparency in financial markets and a contribution to economic growth. The requirements to which our operations must adhere include those relating to capital and liquidity, disclosure standards and restrictions on certain types of products or transaction structures, recovery and resolution, governance standards, conduct of business and financial crime. The UK's Prudential Regulation Authority (‘PRA’) is the HSBC Group’s consolidated lead regulator. HSBC Holdings is approved by, and directly responsible to the PRA for ensuring the HSBC Group meets consolidated prudential requirements. The Group‘s other lead UK regulator, the FCA, supervises 14 of HSBC’s entities in the UK, including seven where the PRA is responsible for those entities‘ prudential supervision. The FCA maintains global oversight of the Group’s management of financial crime risk in the exercise of its wider powers under the Financial Services and Markets Act 2000, and through the exercise of direct supervisory powers over HSBC Holdings. In addition, and as required under relevant local laws, each operating bank, finance company and insurance operation within HSBC is regulated by relevant local regulatory authorities. UK regulation and supervision The UK‘s financial services regulatory structure is comprised of three regulatory bodies: the Bank of England ('BoE'); the PRA; and the FCA. The BoE is responsible for macro-prudential supervision, focusing on systemic risks that may affect the UK’s financial stability. The BoE conducts prudential regulation and supervision of financial services firms through the PRA, and in addition to its wider role as the UK’s central bank, the BoE is the resolution authority responsible for taking action to manage the failure of certain types of financial institutions in the UK, if necessary. The latter involves a set of responsibilities and powers that apply outside of an actual bank failure and relate to general resolution planning, including an assessment of any barriers to the resolution of banks, the exercise of powers to require the removal of impediments to resolvability and the setting of minimum requirements for own funds and eligible liabilities (‘MREL‘), through the Banking Act and the Bank Recovery and Resolution (No. 2) Order 2014. These include own funds and liabilities that can be written down or converted into capital resources to absorb losses or recapitalise a bank in the event of its failure. These requirements are based on the resolution strategy for the Group, as agreed by the BoE in consultation with our local regulators. The BoE set end state MREL requirements for the Group, which have applied since 1 January 2022. 136 HSBC Holdings plc Annual Report on Form 20-F Other information The PRA and the FCA are micro-prudential supervisors. The Group’s banking subsidiaries in the UK, such as HSBC Bank plc and HSBC UK, are ‘dual-regulated’ firms, subject to prudential regulation by the PRA and to conduct regulation by the FCA. Other (generally smaller, non- bank) UK-based subsidiaries are ‘solo regulated’ by the FCA (i.e. the FCA is responsible for both prudential and conduct regulation of those subsidiaries). HSBC Group is subject to consolidated supervision by the PRA. UK banking and financial services institutions are subject to numerous laws and regulations, and related regulatory rules and guidance. The primary UK statute in this context is the Financial Services and Markets Act 2000, as amended and supplemented by subsequent legislation and statutory instruments, in addition to EU financial services legislation that has been assimilated into UK law pursuant to the European Union (Withdrawal) Act 2018, as amended (‘EUWA’). In 2023, the Financial Services and Markets Act 2023 (‘FSMA 2023’) was passed creating a new set of regulatory frameworks, providing powers to HM Treasury and the UK’s financial services regulators to revoke and replace EU “assimilated” law and to establish new objectives, and accountability frameworks. The PRA and FCA are together responsible for authorising and supervising all our operating businesses in the UK that require authorisation under the Financial Services and Markets Act 2000. These include deposit-taking, retail banking, consumer credit, life and general insurance, pensions, investments, mortgages, custody and share-dealing businesses, and treasury and capital markets activity. The FCA is also responsible for promoting effective competition in the interests of consumers, and an independent subsidiary of the FCA, the Payment Systems Regulator, regulates payment systems in the UK. The PRA and FCA‘s rules establish the minimum criteria for the authorisation of banks and other financial sector entities that carry out regulated activities. In the UK, the PRA and FCA have the right to object, on prudential grounds, to persons who hold, or intend to hold, 10% or more of the voting power or shares of a financial institution that they regulate, or of its parent undertaking. In its capacity as our supervisor on a consolidated basis, the PRA receives information on the capital adequacy of, and sets requirements for, the Group as a whole. In addition, it conducts stress tests both on HSBC’s UK entities and more widely on the Group. Individual banking subsidiaries in the Group are directly regulated by their local banking supervisors, who set and monitor, inter-alia, their capital adequacy requirements. The Group is subject to capital requirements as set out in Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms of the European Parliament and of the Council of 26 June 2013, as amended or supplemented, as it forms part of domestic law in the UK by virtue of the EUWA (the ‘UK CRR’), the PRA Rulebook and the UK law implementing the Capital Requirements Directive (the ‘CRD’ and together with the UK CRR, and the relevant rules of the PRA Rulebook, the ‘Capital Requirements Legislative Package’). The Pillar 1 regulatory capital framework has been, and continues to be, significantly enhanced. The UK implemented the first tranche of changes associated with Basel 3.1 in January 2022. This included changes in relation to counterparty risk, equity investments in funds and market risk RWAs and the leverage ratio. The second and final tranche of Basel 3.1 includes the changes to credit and operational risk and credit valuation adjustment RWAs, further changes to the market risk RWAs and the implementation of an RWA output floor. In December 2023, the PRA published its first set of near final rules for the second tranche of Basel 3.1 covering market risk, credit valuation adjustment and operational risk requirements. In September 2024, the PRA published its second set of near final rules for the implementation of Basel 3.1 covering credit risk, the output floor and reporting and disclosures. The PRA also set out its intention to streamline the Pillar 2A capital framework and capital communications process. Alongside this, HM Treasury published its policy statement on the implementation of Basel 3.1 in the UK. This sets out the process for transferring parts of the UK CRR out of UK legislation and into the PRA Rulebook. In September 2024, the PRA proposed implementation date for the Basel 3.1 package was 1 January 2026, with a phase-in period of four years for the output floor until 31 December 2029; however, in January 2025, the proposed implementation date was delayed until 1 January 2027, to allow time for greater clarity in the implementation plans of the US, and the phase-in period for the output floor has consequently been reduced to three years. As a result, the final Basel 3.1 rules are scheduled to take effect from 1 January 2027, with a three-year phase-in of the output floor until 31 December 2029, so that the date of full implementation remains 1 January 2030. The Group is also subject to liquidity requirements as set out in the UK CRR and as implemented by the PRA, and, in January 2022 became subject to the net stable funding ratio (‘NSFR‘) requirements as part of the first tranche of changes arising as part of Basel 3.1. The PRA and FCA monitor authorised institutions through ongoing supervision and the review of routine and ad hoc reports relating to financial, prudential, conduct of business and financial crime matters. They may also obtain independent reports from a Skilled Person on the adequacy of procedures and systems covering internal control and governing records and accounting. The PRA meets the Group’s senior executives regularly to discuss our adherence to its prudential requirements. In addition, both the PRA and FCA regularly discuss with relevant management fundamental matters relating to our business in the UK and internationally, including areas such as strategic and operating plans, risk control, loan portfolio composition, organisational changes, succession planning and recovery and resolution arrangements. Hong Kong regulation and supervision The Banking Ordinance provides the legal framework for banking supervision in Hong Kong. Section 7(1) of the Ordinance provides that the principal function of the Hong Kong Monetary Authority (‘HKMA’) is to ‘promote the general stability and effective working of the banking system’. The HKMA seeks to establish a regulatory framework in line with international standards, in particular those issued by the Basel Committee on Banking Supervision (‘BCBS‘) and the Financial Stability Board (‘FSB’). The objective is to maintain a prudential supervisory system that underpins the general stability and effective working of the banking system, while at the same time providing sufficient flexibility for authorised institutions to take commercial decisions. Under the Banking Ordinance, the HKMA is the licensing authority responsible for the authorisation, suspension, and revocation of authorised institutions. To provide checks and balances, the HKMA is required under the Ordinance to consult with the Financial Secretary on important authorisation decisions, such as suspension and involuntary revocation. The Hongkong and Shanghai Banking Corporation Limited and its overseas branches and subsidiaries are licensed under the Banking Ordinance and hence subject to the supervision, regulation, and examination of the HKMA. The HKMA follows international practices as recommended by the BCBS to supervise authorised institutions. Under the Banking Ordinance, the HKMA imposes capital requirements on authorised institutions through the Banking (Capital) Rules, liquidity requirements through the Banking (Liquidity) Rules and large exposure limits through the Banking (Exposure Limits) Rules. These rules take into account the latest standards set by the BCBS. In December 2023, the HKMA published final rules for the implementation of the Basel 3.1 standards, which became effective on 1 January 2025. As outlined in the HKMA Supervisory Policy Manual SA-1 – Risk based Supervisory Approach, the HKMA adopts a risk-based supervisory approach which consists of a structured methodology designed to establish a forward-looking view on the risk profile of authorised institutions. During the process, the HKMA assesses eight inherent risks, namely, credit, market, interest rate, liquidity, operational, legal, reputation and strategic risks. In the assessment of HSBC Holdings plc Annual Report on Form 20-F 137 these risks, the HKMA will also consider any new risk types that may emerge from time to time, for example climate risk. The HKMA also follows a policy of ‘continuous supervision’ through on-site examinations, off-site reviews, prudential meetings, cooperation with external auditors and sharing information with other supervisors as a part of its risk-based supervisory methodology. The HKMA aims to ensure that the standards for regulatory disclosure in Hong Kong remain in line with those of other leading financial centres. The Banking (Disclosure) Rules take into account the latest disclosure standards released by the BCBS, which prescribe quarterly, semi- annual, and annual disclosure of specified items, including in the form of standard templates and tables, in order to promote user-relevance and the consistency and comparability of regulatory disclosure among banks and across jurisdictions. The Banking Ordinance empowers the HKMA to collect prudential data from authorised institutions on a routine or ad hoc basis and to require any holding company or subsidiary or sister company of an authorised institution to submit such information as may be required for the exercise of the HKMA’s functions under the Ordinance. The HKMA has the power to serve a notice of objection on persons if they are no longer deemed to be fit and proper to be controllers of the authorised institution, if they may otherwise threaten the interests of depositors or potential depositors, or if they have contravened any conditions specified by the HKMA. The HKMA may revoke authorisation in the event of an institution’s non-compliance with the provisions of the Banking Ordinance. These provisions require, among other things, the furnishing of accurate reports. The HKMA is the relevant authority under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance for supervising authorised institutions’ compliance with the legal and supervisory requirements set out in the Anti-Money Laundering and Counter-Terrorist Financing Ordinance and the Guideline on Anti-Money Laundering and Counter- Financing of Terrorism (for Authorised Institutions). The HKMA requires authorised institutions in Hong Kong and its overseas branches and subsidiaries to establish effective systems and controls to prevent and detect money laundering and terrorist financing. It works closely with other stakeholders within both the government and the industry to ensure that the banking sector is able to play its gatekeeper role in Hong Kong’s anti-money laundering and counter- financing of terrorism regime. To enhance the exchange of supervisory information and cooperation, the HKMA has entered into Memoranda of Understanding (’MoU’) or other formal arrangements with a number of banking supervisory authorities within and outside Hong Kong. The marketing of, dealing in and provision of advice and asset management services in relation to securities and futures in Hong Kong are subject to the provisions of the Securities and Futures Ordinance of Hong Kong. Entities engaging in activities regulated by the Ordinance (including The Hongkong and Shanghai Banking Corporation Limited) are required to be licensed or registered with the Securities and Futures Commission (‘SFC’). The HKMA is the front- line regulator for banks involved in the securities and futures business. The HKMA and the SFC work very closely to ensure that there is an open market with a level playing field for all intermediaries in the securities industry of Hong Kong. Among other functions, the Securities and Futures Ordinance vests the SFC with powers to set and enforce market regulations, including investigating breaches of rules and market misconduct and taking appropriate enforcement action. The SFC is responsible for licensing and supervising intermediaries conducting SFC-regulated activities, such as investment advisers, fund managers, brokers, trustees, and custodians. Additionally, the SFC sets standards for the authorisation and regulation of investment products, and it reviews and authorises offering documents of retail investment products to be marketed to the public. To promote proper conduct and increase awareness of individual responsibility and accountability, the SFC introduced and implemented the Manager-In-Charge (‘MIC’) regime in Hong Kong. The MIC regime applies to senior individuals of licensed corporations responsible for managing core functions within financial services businesses supervised by the SFC. The regime required SFC licensed corporations to review their organisational structure and the roles of senior management and their responsible officers in light of the SFC’s classification of core functions within licensed corporations and its guidelines on identifying Managers-In-Charge of Core Functions. The regime also imposes reporting requirements on SFC licensed corporations. Similar to the SFC, the HKMA launched its Management Accountability Initiative which aimed at increasing the accountability of the senior management of Hong Kong registered institutions (‘RIs’) i.e. Hong Kong banks registered to carry on one or more regulated activities under the SFO. The Management Accountability Initiative clarified the HKMA’s expectations on the responsibility and accountability of RIs’ senior management and enhanced its information gathering on RIs’ regulated activities, while requiring RIs to better identify lines of responsibility and accountability for their regulated activities. In order to support capacity building and talent development, the HKMA has been working with the banking industry and relevant professional bodies to implement an industry-wide enhanced competency framework for banking practitioners. Currently, the enhanced competency framework for banking practitioners covers ten professional work streams: anti-money laundering and counter- financing of terrorism; cybersecurity; treasury management; retail wealth management; credit risk management; operational risk management; Fintech; private wealth management; green and sustainable finance; and compliance. Relevant to the Group‘s insurance business in Hong Kong, the HKMA and the Hong Kong Insurance Authority (‘IA’) have signed an ‘MoU’ to enhance the cooperation, exchange of information and mutual assistance between the two authorities. This MoU sets out the framework between the HKMA and the IA for strengthening co- operation in respect of regulation and supervision of entities or financial groups in which the two authorities have a common regulatory interest. Pursuant to the statutory regulatory regime for insurance intermediaries under the Insurance Ordinance, the IA has delegated its inspection and investigation powers to the HKMA in relation to insurance related businesses of authorised institutions in Hong Kong, which aims to improve efficiency and minimise possible regulatory overlap. Under the statutory regime for the regulation of Mandatory Provident Fund (‘MPF’) intermediaries, the Mandatory Provident Fund Schemes Authority is the lead regulator in respect of regulation of MPF intermediaries whereas the HKMA, the IA and the SFC are the front- line regulators of the MPF intermediaries. The Financial Institutions (Resolution) Ordinance established the legal basis for a cross-sector resolution regime in Hong Kong under which the HKMA is the resolution authority for banking sector entities, including all authorised institutions. The HKMA is also designated as the lead resolution authority for the cross-sectoral groups in Hong Kong that include banking sector entities within the scope of the Financial Institutions (Resolution) Ordinance (‘FIRO‘). The HKMA’s function as a resolution authority is supported by the Resolution Office within the HKMA. The Resolution Office is operationally independent and has a direct reporting line to the chief executive of the HKMA. In order for resolution to be both feasible and credible, the HKMA requires authorised institutions to be organised and managed at all times in a way that facilitates the effective use of the resolution powers in the event of their failure or likely failure. The HKMA has set resolution standards with which authorised institutions need to comply in order to inform resolution planning and remove impediments to resolvability. Those standards cover the periodic submission of core information to the Resolution Office, loss- absorbing capacity, liquidity and funding in resolution, operational 138 HSBC Holdings plc Annual Report on Form 20-F Other information continuity in resolution, the contractual recognition of the suspension of termination rights, and continuity of access to financial market infrastructure services. US regulation and supervision The Group is subject to federal and state supervision and regulation in the US. Banking laws and regulations of the Federal Reserve Board (the ‘FRB’), the Office of the Comptroller of the Currency (the ‘OCC’) and the Federal Deposit Insurance Corporation (the ‘FDIC’) (collectively, the ‘US banking regulators’) govern various aspects of our US business. HSBC Bank USA, N.A. (‘HSBC Bank USA’) is subject to direct supervision and regulation by the Consumer Financial Protection Bureau (‘CFPB’), which has the authority to examine and take enforcement action related to compliance with US federal consumer financial laws and regulations. HSBC Bank USA’s derivative activities are subject to supervision and regulation by the Securities and Exchange Commission (‘SEC’) and Commodity Futures Trading Commission (‘CFTC’). The Group’s US securities broker/dealer and investment banking operations are also subject to ongoing supervision and regulation by SEC, the Financial Industry Regulatory Authority and other government agencies and self-regulatory organisations under US federal and state securities laws. Similarly, the Group’s US commodity futures, commodity options and swaps- related and client clearing operations are subject to ongoing supervision and regulation by the CFTC, the National Futures Association and other self-regulatory organisations under US federal commodities laws. Furthermore, since we have substantial operations outside the US that conduct many of their day-to-day transactions with the US, HSBC entities’ operations outside the US are also subject to the extraterritorial effects of US regulation in many respects. HSBC Holdings and its US operations are subject to supervision, regulation and examination by the FRB because HSBC Holdings is a ‘bank holding company’ (‘BHC‘) under the US Bank Holding Company Act of 1956, as a result of its control of HSBC Bank USA and HSBC Trust Company (Delaware), N.A., Wilmington, Delaware (‘HTCD’). HSBC North America Holdings (‘HNAH‘) and HSBC USA Inc., are each a ‘bank holding company’ and HNAH is also an intermediate holding company (‘IHC’) regulated by the FRB. HSBC Holdings, HNAH and HSBC USA Inc. have elected to be financial holding companies pursuant to the provisions of the Gramm-Leach-Bliley Act and, accordingly, may affiliate with securities firms and insurance companies, and engage in other activities that are financial in nature or incidental or complementary to activities that are financial in nature. Under regulations implemented by the FRB, if any financial holding company, or any depository institution controlled by a financial holding company, ceases to meet certain capital or management standards, the FRB may impose corrective capital and/or managerial requirements on the financial holding company and place limitations on its ability to conduct the broader financial activities permissible for financial holding companies. In addition, the FRB may require divestiture of the holding company’s depository institutions or its affiliates engaged in broader financial activities in reliance on the Gramm-Leach-Bliley Act if the deficiencies persist. The regulations also provide that if any depository institution controlled by a financial holding company fails to maintain a satisfactory rating under the Community Reinvestment Act of 1977, the FRB must prohibit the financial holding company and its subsidiaries from engaging in any additional activities other than those permissible for bank holding companies that are not financial holding companies. The two US banks, HSBC Bank USA and HTCD, are subject to regulation and examination primarily by the OCC. HSBC Bank USA and HTCD are subject to additional regulation and supervision by the FDIC, the Consumer Financial Protection Bureau and the FRB. Banking laws and regulations restrict many aspects of their operations and administration, including the establishment and maintenance of branch offices, capital and reserve requirements, deposits and borrowings, investment and lending activities, payment of dividends and numerous other matters. In 2019, the FRB and the other US banking regulators jointly finalised rules that tailor the application of the enhanced prudential standards for large US banking organisations and the US operations of certain foreign banking organisations (the ‘Tailoring Rules’). The Tailoring Rules assign each BHC, combined US operations of foreign banking organisations and US IHC with $50bn or more in total US assets to one of five buckets (Categories I, II, III, IV, and ‘Other Firms‘) based on their relative size and complexity and assessed on asset size, cross-jurisdictional activity, reliance on short-term wholesale funding, non-bank asset size, and off-balance sheet exposures. As of 1 January 2024, HNAH continues to be classified as a Category IV firm per the criteria set forth in the Tailoring Rules. As a Category IV banking organization, HNAH will continue to be subject to specific enhanced prudential standards applicable to banking organisations assigned to Category IV. As the depository institution subsidiary of HNAH, HSBC Bank USA is also subject to the regulatory capital requirements applicable to Category IV firms. HNAH, HSBC USA Inc. and HSBC Bank USA are required to maintain minimum capital ratios (exclusive of any capital buffers), including a minimum Tier 1 leverage ratio of 4%, and a minimum total risk-based capital ratio of at least 8%. HNAH, HSBC USA Inc. and HSBC Bank USA each calculate their risk-based capital requirements as Non- Advanced Approaches banks in accordance with the Basel III rule as adopted by US banking regulators. Over and above the minimum risk- based requirements, HNAH is subject to a Stress Capital Buffer (‘SCB’), which is floored at 2.5% and is recalibrated every other year unless HNAH opts to be subject to supervisory stress testing by the FRB during an \"off year\". HSBC USA Inc. and HSBC Bank USA continue to be subject to the static 2.5% capital conservation buffer (‘CCB‘). Compliance with the SCB/CCB does not represent minimum requirements per se, but rather a necessary condition to allow capital distributions and discretionary bonus payments. In 2023, the US banking regulators proposed changes to the regulatory capital rules applicable to US banks, BHCs and IHCs, including HNAH, HSBC USA Inc. and HSBC Bank USA that were intended to be broadly consistent with the Basel III standards issued by the Basel Committee on Banking Supervision (‘BCBS’) in 2017. The future of this proposal is uncertain. Under FRB regulations, HNAH is subject to supervisory stress testing requirements (on an every other year basis, with the next FRB supervisory stress test expected to take place in 2026) that are designed to evaluate whether a BHC has sufficient capital on a total consolidated basis to absorb losses and support operations under severely adverse economic conditions. As part of the Comprehensive Capital Analysis and Review (‘CCAR‘), the FRB uses pro-forma capital positions and ratios under such stress scenarios to determine the size of the SCB for each CCAR participating firm. As part of CCAR, HNAH is required to submit an annual capital plan to the FRB on or before 5 April of each year. Category IV firms may opt into CCAR supervisory stress testing in an \"off year\" in order to recalibrate their SCB based on their most recent supervisory stress test. The SCB equals (i) a firm‘s projected decline in common equity tier 1 under the supervisory severely adverse stress testing scenario plus (ii) one year of planned common stock dividends. In August 2024, the FRB announced a new SCB for each CCAR firm based on its most recent CCAR stress tests and planned common stock distributions, which took effect on 1 October 2024. HNAH’s SCB requirement was 5.1%, a reduction from 6.4% in 2023. HNAH already utilises an internal capital assessment approach that is analogous to the SCB and continues to review the composition of its capital structures and capital buffers in light of these developments. Under the Tailoring Rules, certain US banking organisations are subject to heightened liquidity and risk management requirements, including the US LCR and NSFR. Category IV firms, including HNAH, are subject to a less stringent US LCR and NSFR modified regulatory requirement so long as HNAH‘s weighted short-term wholesale funding equals or exceeds $50bn. As a result, under the modified US LCR rule, a LCR of 100 percent or higher reflects an unencumbered HQLA balance that is equal to or exceeds 70 percent of the firm’s liquidity needs for a 30 calendar day liquidity stress scenario. HSBC Holdings plc Annual Report on Form 20-F 139 Under the modified US NSFR rule as applied to HNAH, a NSFR of 100 percent or more reflects an available stable funding balance from liabilities and capital over the next 12 months that is equal to or exceeds 70 percent of the firm’s required stable funding amount for assets and off-balance sheet exposures. As a Category IV firm, HNAH is also subject to liquidity risk management and liquidity buffer requirements as well as liquidity stress testing on a quarterly basis. Under the FRB and FDIC rule implementing the resolution planning requirements for depository institution holding companies (the \"SIFI Plan\") in the Dodd-Frank Act, HSBC Holdings is required to file a SIFI Plan every three years. HSBC Holdings’ last SIFI Plan was a targeted resolution plan submitted in December 2021. The FRB and FDIC provided feedback on this targeted plan in December 2022. The FRB and FDIC did not identify any shortcomings or deficiencies but noted areas where further progress will help improve HSBC Holdings’ preparation for a rapid and orderly resolution of its US subsidiaries and operations that may be addressed in HSBC Holdings’ next plan submission. As the combined US operations of HSBC Holdings moved from Category III to Category IV shortly after its last submission, it is now a triennial reduced filer, which requires the submission of reduced plans every three years. The next SIFI Plan submission is due on 1 July 2025. Under the FDIC’s separate resolution plan requirements for insured depository institutions (the ‘IDI Plan‘) with $100bn or more in total consolidated assets, banks including HSBC Bank USA, are required to submit an IDI Plan every three years. HSBC Bank USA submitted its latest IDI plan in December 2022. In June 2024, the FDIC adopted a final rule that increased the frequency of, and substantive requirements applicable to, IDI Plans. HSBC Bank USA continues to be required to submit an IDI Plan every three years (now with an interim supplement required in the off years) and would become subject to increased content requirements and an emphasis on capabilities testing and engagement with the FDIC. HSBC Bank USA’s interim supplement is due on 1 July 2025 and a full IDI Plan is due on 1 July 2026. The OCC also recently finalized revisions to its recovery planning guidelines, which included lowering the threshold of banks to which it applies from $250bn to $100bn average total consolidated assets. HSBC Bank USA now becomes subject to these requirements and must comply with most aspects of the revised rule by 1 January 2026. The FRB has separately established a framework for recovery plans, although HSBC is not currently required to submit a recovery plan to US regulators unless specifically requested to do so. The FRB limits credit exposures to single counterparties for large BHCs and IHCs. As a Category IV firm, HNAH is not directly subject to these single counterparty credit limits. Independent of HNAH‘s classification as a Category IV firm, HNAH, together with its subsidiaries, could become subject to limits on its exposures to unaffiliated counterparties if its parent, HSBC, cannot certify its compliance with a large exposure regime in the UK that is consistent with the Basel large exposure framework. Pursuant to Title VII of the Dodd-Frank Act (‘Title VII’), the SEC and CFTC have adopted extensive requirements to regulate over-the- counter (‘OTC’) derivatives, including, among other requirements, registration for swap dealers, major swap participants, security-based swap (‘SBS’) dealer and major SBS participants, mandatory clearing and trade execution of certain OTC derivatives, position limits for certain physical positions and economically equivalent swaps, real- time public and regulatory trade reporting, business conduct, enhanced documentation, supervision, recordkeeping, and financial reporting requirements. HSBC Bank USA and HSBC Bank plc are registered as swap dealers with the CFTC and registered as SBS dealers with the SEC. Because it is a non-US dealer, HSBC Bank plc is only subject to certain of the CFTC’s requirements in respect of swap transactions with US persons and certain persons guaranteed by or affiliated with US persons, and only subject to certain of the SEC’s requirements in respect of SBS transactions with US persons or which are arranged, negotiated, or executed by US personnel. HSBC Bank plc is also permitted to satisfy certain CFTC requirements and SEC requirements through ‘substituted compliance’ pursuant to relevant determinations and related relief issued by the SEC and the CFTC. Pursuant to Title VII, the US prudential regulators adopted margin requirements for non-cleared swaps and SBS for prudentially regulated swap dealers and SBS dealers such as HSBC Bank USA and HSBC Bank plc. Subject to certain exceptions, the margin rules require HSBC Bank USA and HSBC Bank plc to collect and post initial and variation margin for non-cleared swaps and SBS entered into with other swap dealers and certain financial end-users. The prudential regulators’ margin requirements, the parallel margin rules adopted by the CFTC and the SEC and certain non-US regulators, as well as other regulations of OTC derivatives under Title VII, have increased the costs associated with trading OTC derivatives and may adversely affect our business in such products. Dodd-Frank also expands the extra-territorial jurisdiction of US courts over actions brought by the SEC or the US with respect to violations of the anti-fraud provisions in the Securities Act, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940. In addition, regulations which the FSOC, the CFPB or other regulators may adopt could affect the nature of the activities that our FDIC- insured depository institution subsidiaries may conduct, and may impose restrictions and limitations on the conduct of such activities. The implementation of the remaining Dodd-Frank provisions could result in additional costs or limit or restrict the way we conduct our business in the US. EU Regulation and supervision HSBC Continental Europe (‘HBCE’) is the parent company of all HSBC European subsidiaries. In accordance with provisions of the Capital Requirements Directive (‘CRD’), HBCE is an Intermediate Parent Undertaking (‘IPU’) for HSBC's European subgroup, centralising all coordination and requests to the European Central Bank (‘ECB‘) and the EU member states’ national supervisory authorities ,the European Single Resolution Board (‘SRB‘) and the EU member states’ national resolution authorities. In the EU, the package of rules implementing the Basel 3.1 reforms were finalised in 2024. The final version of the amendments to the Capital Requirements Regulation, known as CRR3, was published in June. The CRR3 amends the rules as regards to requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor in accordance with Basel 3.1. The implementation date for the majority of the requirements remains 1 January 2025, with an output floor transitional period of five years. In October 2024, a delegated act postponing the implementation of the market risk rules by one-year until 1 January 2026 was formally adopted. The one-year delay aims to ensure that implementation in Europe is aligned to other major jurisdictions. In June 2024, the EU also enacted the amendments to the Capital Requirements Directive, known as CRD6. While the CRR3 and most of the CRD6 requirements apply only to European subsidiaries of HSBC, the CRD6 Article 21c introduces a restriction on cross-border activities provided by non-EU banking entities to EU-based clients, subject to certain exemptions. EU member states have 18 months to transpose the CRD6 rules into national law, so that the effective implementation date is in January 2026. There is an additional one- year transition period for provisions relating to cross-border services and third-country branches. As part of the implementation of CRR3 and CRD6, the EBA has been mandated to draft 140 pieces of secondary legislation and guidance in support of implementation. Global and regional prudential and other regulatory developments The Group is subject to regulation and supervision by a large number of regulatory bodies and other agencies. In addition to regulatory changes being introduced at a country level, changes are often driven by global bodies such as the G20, the FSB and the Basel Committee on Banking Supervision, which are then implemented at country level or in the case of the EU, regionally, subject to modifications and with separate additional measures. 140 HSBC Holdings plc Annual Report on Form 20-F Other information Of principal importance from a prudential perspective are the changes that relate to Basel 3.1 (as explained in the 'UK regulation and supervision' section). We are also subject to regulatory stress testing in many jurisdictions.These have increased both in frequency and in the granularity of information required by supervisors. They include the programmes of the BoE, the FRB (as explained in the ‘US regulation and supervision’ section), the OCC, the EBA, the ECB, the HKMA and other regulators. For further details, see ‘Stress testing’ on page 146 . On prudential changes, further details can be found in the ‘Regulatory developments’ section on page 7 of the Pillar 3 Disclosures as at 31 December 2024. Recovery and resolution The HSBC Group is subject to recovery and resolution requirements in many of the jurisdictions in which it operates. In Europe, the Bank Recovery and Resolution Directive (BRRD) establishes a framework for the recovery and resolution of EU credit institutions and investment firms. This framework applies to HSBC’s operating banks in the European region. In Hong Kong, the Banking Ordinance and Financial Institutions (Resolution) Ordinance sets out requirements for recovery and resolution planning. In general, each respective part of the HSBC Group is responsible for ensuring that it meets local recovery and resolution requirements where they exist, which are mainly applicable only to those regulated entities in a particular jurisdiction. The PRA and BoE, however, are the lead regulators from a recovery and resolution perspective respectively for the consolidated HSBC Group. HSBC maintains recovery plans designed to outline credible management actions that the HSBC Group could implement in the event of severe stress in order to restore its business to a stable and sustainable condition. The HSBC Group submits a Group recovery plan to the PRA, the latest plan being submitted to the PRA in June 2024. In addition, certain HSBC entities also submit local recovery plans to host regulators, where local recovery planning requirements are in place. HSBC’s recovery plans are frequently re-appraised to reflect HSBC’s Group structure as well as meet regulatory and internal feedback, including through regular stress testing and ‘fire drill’ simulations. In general terms, resolution refers to the exercise of statutory powers where a financial institution and/or its parent or other group company is deemed by its regulators to be failing, or likely to fail and it is not reasonably likely that any action taken would result in the institution recovering. In view of the HSBC Group’s corporate structure, which comprises a group of locally regulated operating banks, the preferred resolution strategy for the HSBC Group, as confirmed by its regulators, is a multiple point of entry (‘MPE’) bail-in strategy. This provides flexibility for HSBC to be resolved either (i) through a bail-in at the HSBC Holdings level, which enables the recapitalisation of operating bank subsidiaries in the HSBC Group (as required) while restructuring actions are undertaken, with the HSBC Group remaining together; or (ii) at a local subsidiary level pursuant to the application of statutory resolution powers by local resolution authorities. In the event of a resolution of the HSBC Group, it is anticipated that the MREL eligible debt issued externally by HSBC Holdings plc would be written down or converted to equity by the BoE using its statutory powers. This would enable subsidiaries of the HSBC Group to be recapitalised, as needed, to support the resolution objectives and maintain the provision of critical functions locally. Recapitalisation of operating bank subsidiaries could be achieved through the write- down, or conversion to equity, of internally issued MREL, Total Loss Absorbing Capacity (‘TLAC‘) or Loss Absorbing Capacity (‘LAC‘). It is anticipated that this approach to recapitalising the HSBC Group’s operating bank subsidiaries would allow the Group to stay together in order to ensure an effective stabilisation of the whole Group whilst also facilitating an orderly restructuring process post resolution. Any resolution of HSBC as a group would be coordinated by the BoE. Given the geographical footprint of the HSBC Group, resolution authorities have determined that HSBC has three resolution groups that together account for over 97% (US$ 810.8bn) of the Group’s consolidated RWAs (US$ 835.1bn): The Asia resolution group ('ARG'), the European resolution group ('ERG') and the US resolution group ('USRG'). As a result, HSBC is overseen by various regulators and resolution authorities including its lead global regulators and resolution authority, the BoE and the PRA and a number of host regulators and resolution authorities. Examples include the European SRB, the HKMA, FRB, FDIC and OCC. These host resolution authorities have statutory resolution group powers which could be applied to subsidiaries of the HSBC Group in their jurisdictions. The application of these local statutory resolution powers may result in one or more individual resolution authorities leading to a local resolution of the subsidiaries within their jurisdiction. This may or may not result in such subsidiaries ceasing to be part of the HSBC Group, depending on the drivers of failure and the resolution powers exercised by the relevant resolution authority. HSBC considers that a bail-in at the HSBC Holdings plc level that enables subsidiaries in the HSBC Group to be recapitalised, (as required), and the subsequent implementation of restructuring actions while the HSBC Group remains together, is the strategy most likely to deliver the optimal resolution outcome for all of HSBC’s stakeholders. In July 2019, the BoE and PRA published final policies on the Resolvability Assessment Framework (‘RAF‘), which places the onus on firms to demonstrate their own resolvability and is designed to increase transparency and accountability for resolution planning. In order to be considered resolvable, HSBC must meet three outcomes: (i) have adequate resources in resolution; (ii) be able to continue business through resolution and restructuring; and (iii) be able to co- ordinate its resolution and communicate effectively with stakeholders. The RAF requires HSBC to prepare a report on the HSBC Group’s assessment of its resolvability, which must be submitted to the BoE on a biennial basis. HSBC Group submitted its second report to the BoE in October 2023. In August 2024, HSBC made its second public disclosure on its resolvability, which summarised the key findings from the second RAF Self-assessment. In line with the previous BoE RAF cycle, alongside HSBC's disclosure, the BoE also disclosed its own assessment of UK banks’ resolvability, including HSBC, against expectations set out in the RAF. Regular engagement with the BoE and PRA is maintained on Recovery and Resolution Planning topics. HSBC continues to engage with the BoE, PRA and its global regulators in other jurisdictions to help ensure that it meets current and future recovery and resolution requirements. Financial crime regulation HSBC has an established financial crime risk management programme that is applicable across all global businesses and functions, and all countries and territories in which we operate. HSBC is committed to preventing our products and services from being exploited for criminal activity. We do this because it is the right thing to do to protect our customers, shareholders, staff, the communities in which we operate and the integrity of the financial system on which we all rely. We recognise that financial institutions are inherently exposed to financial crime risk, which cannot be mitigated in its entirety. We employ a risk-based approach to managing our exposure by focusing our resources in a manner that is proportionate to the level of financial crime risk inherent in our business strategy and operating model. We remain committed to conducting our activities in accordance with all applicable financial crime laws and regulations in the markets in which we operate, the expectations of our regulators and our own risk appetite. HSBC's global financial crime programme is designed to enable the bank and its staff to detect, analyse, investigate, report and mitigate the risk of HSBC facilitating or being used to facilitate financial crime, including fraud, bribery and corruption, tax evasion, sanctions and export control violations and evasion, money laundering, terrorist financing and proliferation financing. HSBC continues to develop its anti-money laundering programme in light of emerging risks and new legislation. Technical and digital innovation in how we engage with customers and the services we HSBC Holdings plc Annual Report on Form 20-F 141 provide to them continues at pace. HSBC continues to monitor developments, shape risk appetite and develop appropriate controls to manage the risks associated with the increasing use of alternate (including digitised) payment methods and technologies. HSBC continues to enhance its control framework to detect, deter and disrupt money laundering, terrorist financing and proliferation financing more effectively, increasing its use of intelligence-led technologies to monitor customers for unusual or suspicious activity. HSBC has refreshed its processes and procedures to manage the risk of the bank's products and services being used for the purposes of tax evasion or bribery and corruption, whether by its customers or through its staff or third party engagements, which may expose HSBC to corporate criminal liability. HSBC seeks to comply with all applicable anti-bribery and anti-corruption laws in every market and jurisdiction in which it operates while focusing on the spirit of relevant laws and regulations, demonstrating HSBC’s commitment to ethical behaviours and conduct as part of our environmental, social and corporate governance. HSBC provides annual mandatory training on the prevention of money laundering, terrorist financing, proliferation financing, bribery and corruption and tax evasion to all staff and carries out regular monitoring and testing of its programmes to inform enhancements to the global financial crime policy on an ongoing basis. HSBC also maintains clear whistleblowing policies and processes, to ensure that individuals can report concerns confidentially. HSBC continues to develop its fraud controls in conjunction with areas such as cyber risk, to protect the bank and our customers; investing in capabilities to fight financial crime through the application of new technologies such as behavioural biometrics, advanced analytics and artificial intelligence. A comprehensive programme of customer awareness and staff training is in place to maintain strong anti-fraud awareness. HSBC continues to invest in enhancements to fraud prevention and detection tooling with leading vendors. Enhanced metrics are tracked closely to assist with control performance monitoring and support the ongoing optimisation of fraud defences. HSBC’s sanctions programme seeks to apply a globally consistent standard to manage sanctions compliance and export control risk effectively across all HSBC legal entities in all jurisdictions in which HSBC operates. The external sanctions environment remains dynamic, and sanctions regimes are increasingly complex and less predictable as geopolitical tensions continue to rise. Russia, and less so Belarus, have continued to be targeted by various trade and financial sanctions in 2024, with greater focus on enforcing sanctions and limiting methods of sanctions evasion and sources of Russian revenue. The US-China relationship remains complex, with both sides imposing sanctions and export restrictions. The US recently implemented an Outbound Investment Programme, which seeks to restrict / limit US Person investment in the non-publicly traded securities of Chinese, Hong Kong and Macau entities that engage in certain activity related to semiconductors and microelectronics, quantum information technologies or artificial intelligence, and the EU is considering a similar programme. China has retaliated by imposing, among other things, export restrictions on key high-tech materials with potential military applications. Other material sanctions regulatory developments include the US terminating its Zimbabwe sanctions programme, partially rolling back sanctions relief afforded to Venezuela in 2023, granting additional sanctions relief for basic human needs following the fall of the Assad regime, and increasing the statute of limitations for civil enforcement action and criminal prosecution for breaches of US sanctions from five to ten years. The UK also introduced new strict liability enforcement powers for breaches of UK trade sanctions, including forming the Office of Trade Sanctions Implementation to enforce UK trade sanctions, as well as expanded authorities to impose sanctions on financial institutions or other entities that facilitate certain transactions relating to the Russian government. HSBC continues to monitor regulatory developments and their impact on HSBC’s global financial crime policy and risk appetite. Disclosures pursuant to Section 13(r) of the Securities Exchange Act Section 13(r) of the Securities Exchange Act requires each issuer registered with the SEC to disclose in its annual or quarterly reports whether it or any of its affiliates have knowingly engaged in specified activities or transactions with persons or entities targeted by U.S. sanctions programmes relating to Iran, terrorism, or the proliferation of weapons of mass destruction, even if those activities are not prohibited by U.S. law, are conducted outside the U.S. by non-U.S. affiliates in compliance with local laws and regulations, and are not material to the business of the issuer or any of its affiliates. To comply with this requirement, HSBC Holdings plc (together with its affiliates, “HSBC”) has requested relevant information from its affiliates globally. The following activities conducted by HSBC are disclosed in response to Section 13(r) and are not material to the business of HSBC: Legacy contractual obligations related to guarantees Between 1996 and 2007, we provided guarantees to a number of our non-Iranian customers in Europe and the Middle East for various business activities in Iran. In a number of cases, we issued counter indemnities involving Iranian banks as the Iranian beneficiaries of the guarantees required that they be backed directly by Iranian banks. The Iranian banks to which we provided counter indemnities included Bank Tejarat, Bank Melli, and the Bank of Industry and Mine. There was no measurable gross revenue in 2024 under those guarantees and counter indemnities. We do not allocate direct costs to fees and commissions and, therefore, have not disclosed a separate net profit measure. We are seeking to cancel all relevant guarantees and counter indemnities, and do not currently intend to provide any new guarantees or counter indemnities involving Iran. No guarantees were cancelled in 2024, and approximately 14 remain outstanding . Other relationships with Iranian banks Activity related to U.S.-sanctioned Iranian banks not covered elsewhere in this disclosure includes the following: We act as the trustee and administrator for a pension scheme involving employees of a U.S.-sanctioned Iranian bank in Asia. Under the rules of this scheme, we accept contributions from the Iranian bank each month and allocate the funds into the pension accounts of the Iranian bank’s employees. We run and operate this pension scheme in accordance with applicable laws and regulations. Estimated gross revenue, which includes fees and/or commissions, generated by this pension scheme during 2024, was approximately $2,319. For the Iranian bank-related activity discussed above, we do not allocate direct costs to fees and commissions and, therefore, have not disclosed a separate net profit measure. We currently intend to continue to wind down the above activities, to the extent legally permissible, and not enter into any new such activity. Activity related to U.S. Executive Order 13224 We had an individual customer in the Middle East that was designated under Executive Order 13224 in 2023. The customer's accounts were restricted at the time of designation and the relationship was exited in 2024. As part of the exit process, we returned the customer's funds to the customer. We had an individual customer in the Middle East employed by a corporate entity that was designated under Executive Order 13224 in 2024. Shortly following the designation, we processed one local currency salary payment to the individual customer from the entity. The customer relationship was exited in 2024. 142 HSBC Holdings plc Annual Report on Form 20-F We have individual and corporate customers in the Middle East that, during 2024, made local currency cheque payments for the rental of property to a corporate entity designated under Executive Order 13224. We processed these cheques on behalf of our customers. For these activities, there was no measurable gross revenue or net profit to HSBC during 2024. Activity related to U.S. Executive Order 13382 We had two individual customers in Asia that were designated under Executive Order 13382 in 2023. The customers' accounts were restricted at the time of designation and the relationships were exited in 2024. As part of the exit process, we returned the customers' funds to the customers. We administer a pension scheme for a corporate entity in Asia in accordance with applicable laws and regulations. An individual participant in this pension scheme was designated under Executive Order 13382 in 2023. We have restricted the individual's pension scheme account. During 2024, prior to the imposition of the account restriction, we allocated two mandatory local currency contributions into the individual's pension scheme account. For this activity, there was no measurable gross revenue or net profit to HSBC during 2024. Other activity We have a non-Iranian insurance company customer in the Middle East that, during 2024, made local currency domestic payments for the reimbursement of medical treatment to a hospital located outside Iran that is owned by the Government of Iran. We processed these payments from our customer to the hospital. We have two customers in the Middle East that, during 2024, made local currency domestic payments for medical treatment to a hospital located outside Iran that is owned by the Government of Iran. We processed these payments from our customers to the hospital. We have one corporate customer in the Middle East that, during 2024, received local currency cheques from a hospital located outside Iran that is owned by the Government of Iran. We processed the cheques from the hospital to our customer. We have individual and corporate customers in the Middle East that, during 2024, received local currency cheques from an insurance company located outside Iran that is owned by the Government of Iran. We processed these cheques from the insurance company to our customers. We have one corporate customer in Europe that, during 2024, received local currency domestic payments from an insurance company located outside Iran that is owned by the Government of Iran for the provision of repair services. We processed the payments from the insurance company to our customer. We have individual and corporate customers in Asia, Europe and the Middle East that, during 2024, made small local currency domestic payments to, or received such payments from, Iranian embassies or consulates. These customers are engaged in activities that require consular services provided by embassies or consulates or provide goods and services that support the conduct of the official business of the embassies or consulates. In addition, we have an international organisation customer in Europe that, during 2024, received a local currency payment from an Iranian embassy relating to annual membership fees. We processed these payments between our customers and the Iranian embassies or consulates. We have two corporate customers in Europe that, during 2024, received local currency payments from a bank owned by the Government of Iran in relation to management charges for property owned by the bank. We processed these payments to our customers. We have individual customers in Europe that are employed by a bank located outside Iran that is owned by the Government of Iran. During 2024, we processed local currency salary payments received via banks that are not owned by the Government of Iran to our customers. For these activities, there was no measurable gross revenue or net profit to HSBC during 2024 . Frozen accounts and transactions We maintain several accounts that are frozen as a result of relevant sanctions programmes, and safekeeping boxes and other similar custodial relationships, for which no activity, except as licensed, authorised, or otherwise related to the maintenance of such accounts as consistent with applicable law, took place during 2024. There was no measurable gross revenue or net profit to HSBC during 2024 relating to these frozen accounts. HSBC Holdings plc Annual Report on Form 20-F 143 Risk review Our risk review outlines our approach to risk management, how we identify and monitor top and emerging risks, and the actions we take to mitigate them. In addition, it explains our material banking risks, including how we manage capital. 144 Our approach to risk 148 Top and emerging risks 154 Risk factors 167 Our material banking risks 169 Credit risk 230 Treasury risk 246 Market risk 249 Climate risk 258 Resilience risk 259 Regulatory compliance risk 259 Financial crime risk 260 Model risk 261 Insurance manufacturing operations risk Bangkok, Thailand, 1990s. Customer Service Desk. 144 HSBC Holdings plc Annual Report on Form 20-F Risk review Our approach to risk Our risk appetite Our risk appetite defines the level and types of risk that we are willing to take, while informing the financial planning process and guiding strategic decision making. Our risk appetite is defined as the aggregate level of risk that we are comfortable to take to achieve our strategic objectives. Risk appetite also provides a mechanism for non- executive directors and executive directors to collectively establish the Group’s willingness to engage in certain activities and assess these activities. Enterprise-wide application Our risk appetite is expressed holistically through various risk management mechanisms and activities, in both quantitative and qualitative terms. The Group Risk and Compliance function carried out a review in 2024, which led to enhancements to our Global Risk Appetite Framework to help ensure it remains aligned to industry best practices, regulatory expectations and our strategic goals. Our Global Risk Appetite Framework continues to evolve and expand its scope as part of our periodic review process. The Board reviews and approves the Group’s risk appetite regularly to make sure it remains fit for purpose. The Group’s risk appetite is considered, developed, and enhanced through the following principles: – alignment with our strategy, purpose, values, external risk environment, reputational and customer needs; – compliance with applicable laws, regulations and regulatory priorities; – forward-looking insights into future risk exposure; – sufficiency of available capital, liquidity and balance sheet leverage to absorb the risks; – capacity and capabilities of people to manage the risk landscape; – functionality, capacity and resilience of available systems to manage the risk landscape; – effectiveness of the applicable control environment to mitigate risk; and – internally and externally disclosed commitments. We formally articulate our risk appetite through our Risk Appetite Statement (‘RAS’). Setting out our risk appetite helps ensure that we agree a suitable level of risk for our strategy. In this way, risk appetite informs our financial planning process and helps senior management to allocate capital to business activities, services and products. At a Group level, performance against the RAS is reported to the Group Risk Management Meeting alongside key risk indicators to support targeted insight and discussion of breaches of risk appetite and any associated mitigating actions. This reporting allows risks to be promptly identified and mitigated, and informs risk-adjusted remuneration to drive a strong risk culture. Coverage of each principal subsidiary and material operating entity is monitored through a RAS, which helps ensure they remain aligned with the Group’s RAS. Each RAS and business activity is guided and underpinned by qualitative principles and/or quantitative metrics. Risk management We recognise that the primary role of risk management is to help protect our customers, business, colleagues, shareholders and the communities that we serve, while ensuring we are able to support our strategy and provide sustainable growth. This is supported through our three lines of defence model described on page 145 . In addition, we recognise the importance of a strong culture, which refers to our shared attitudes, beliefs, values and standards that shape behaviours including those related to risk awareness, risk taking and risk management. All our people are responsible for the management of risk, with ultimate supervisory oversight residing with the Board. The implementation of our business strategy remains a key focus. As we implement change initiatives, we actively manage the execution risks. We also perform periodic risk assessments, including against strategies, to help ensure retention of key personnel for our continued safe operation. We aim to use a comprehensive risk management approach across the organisation and across all risk types, underpinned by our culture and values. This is outlined in our risk management framework, including the key principles and practices that we employ in managing material risks, both financial and non-financial. The framework fosters continuous monitoring and promotes risk awareness and a positive risk culture. It encourages a sound operational and strategic decision- making and escalation process. It also supports a consistent approach to identifying, assessing, managing and reporting the risks we accept and incur in our activities, with clear accountabilities. We actively review and enhance our risk management framework and our approach to managing risk. Group Risk and Compliance is independent from the global businesses, including our sales and trading functions. It provides challenge, oversight and appropriate balance in risk/return decisions. HSBC Holdings plc Annual Report on Form 20-F 145 Our risk management framework The following diagram and descriptions summarise key aspects of the risk management framework, including governance, structure, risk management tools and our culture, which together help align employee behaviour with risk appetite. Key components of our risk management framework HSBC values and risk culture Risk governance Non-executive risk governance The Board approves the Group’s risk appetite, plans and performance targets. It sets the ‘tone from the top’ and is advised by the Group Risk Committee (see page 281 ). Executive risk governance Our executive risk governance structure is responsible for the enterprise- wide management of all risks, including key policies and frameworks for the management of risk within the Group (see pages 145 and 167 ). Roles and responsibilities Three lines of defence model Our ‘three lines of defence’ model defines roles and responsibilities for risk management. An independent Group Risk and Compliance function helps ensure the necessary balance in risk/return decisions (see page 145 ). Processes and tools Risk appetite The Group has processes in place to identify, assess, monitor, manage and report risks to help ensure we remain within our risk appetite and to anticipate, prevent, respond to, and recover from, significant operational disruptions. Enterprise-wide risk management tools Active risk management: identification/assessment, monitoring, management and reporting Operational resilience Internal controls Policies and procedures Policies and procedures define the minimum requirements for the controls required to manage our risks. Control activities Operational and resilience risk management defines minimum standards and processes for managing operational risks and internal controls. Systems and infrastructure The Group has systems and processes that support the identification, capture and exchange of information to support risk management activities. Risk governance The Board has ultimate supervisory responsibility for the effective management of risk and approves our risk appetite. The Group Chief Risk and Compliance Officer, supported by members of the Group Risk Management Meeting, holds executive accountability for the ongoing monitoring, assessment and management of the risk environment and the effectiveness of the risk management framework. The Group Chief Risk and Compliance Officer is also responsible for the oversight of reputational risk, with the support of the Group Reputational Risk Committee. The Group Reputational Risk Committee considers matters arising from customers, transactions and third parties that either present a serious potential reputational risk to the Group or merit a Group-led decision to help enable a consistent risk management approach across the regions, global businesses and global functions. Further details can be found under the ‘Reputational risk’ section of www.hsbc.com/who-we-are/esg- and-responsible-business/managing-risk. Day-to-day responsibility for risk management is delegated to senior managers with individual accountability for decision making. All our people have a role to play in risk management. These roles are defined using the three lines of defence model, which takes into account our business and functional structures, including regulatory compliance and financial crime, as described in the following commentary, ‘Our responsibilities’. We use a defined executive risk governance structure to help enable appropriate oversight and accountability of risk, which facilitates reporting and escalation to the Group Risk Management Meeting. This structure is summarised in the following table. Governance structure for the management of risk and compliance Authority Membership Responsibilities include: Group Risk Management Meeting Group Chief Risk and Compliance Officer Group Chief Legal Officer Group CEO Group CFO Group Head of Financial Crime and Group Money Laundering Reporting Officer All other Group Executive Committee members – Supporting the Group Chief Risk and Compliance Officer in exercising Board-delegated risk management authority – Overseeing the implementation of risk appetite and the risk management framework – Forward-looking assessment of the risk environment, analysing possible risk impacts and taking appropriate action – Monitoring all categories of risk and determining appropriate mitigating action – Promoting a supportive Group culture in relation to risk management and conduct Group Risk and Compliance Executive Committee Group Chief Risk and Compliance Officer Chief risk and compliance officers of HSBC’s global businesses Regional chief risk and compliance officers and chief risk officers Heads of Global Risk and Compliance sub-functions – Supporting the Group Chief Risk and Compliance Officer in providing strategic direction for the Group Risk and Compliance function, setting priorities and providing oversight – Overseeing a consistent approach to accountability for, and mitigation of, risk and compliance across the Group 146 HSBC Holdings plc Annual Report on Form 20-F Risk review Governance structure for the management of risk and compliance (continued) Authority Membership Responsibilities include: Global business/regional risk management meetings Global business/regional chief risk and compliance officers and chief risk officers Global business/regional chief executive officers Global business/regional chief financial officers Global business/regional heads of global functions – Supporting the Group Chief Risk and Compliance Officer in exercising Board-delegated risk management authority – Forward-looking assessment of the risk environment – Implementation of risk appetite and the risk management framework – Monitoring all categories of risk and overseeing appropriate mitigating actions – Embedding a supportive culture in relation to risk management and controls The Board committees with responsibility for oversight of risk-related matters are set out on page 279 . Treasury risks are the responsibility of the Group Executive Committee and the Group Risk Committee. Global Treasury actively manages these risks, supported by the Holdings Asset and Liability Management Committee (‘ALCO’) and local ALCOs, overseen by Treasury Risk Management and the Group Risk Management Meeting. Further details on treasury risk management are set out on page 230 . Our responsibilities All our people are responsible for identifying and managing risk within the scope of their roles. Roles are defined using the three lines of defence model, which takes into account our business and functional structures as described below. Three lines of defence To create a robust control environment to manage risks, we use an activity-based three lines of defence model. This model delineates management accountabilities and responsibilities for risk management and the control environment. The model underpins our approach to risk management by clarifying responsibility and encouraging collaboration, as well as enabling effective coordination of risk and control activities. The three lines of defence are summarised below: – The first line of defence owns the risks and is responsible for identifying, recording, reporting and managing these risks in line with risk appetite, including that the right controls and assessments are in place to mitigate them. – The second line of defence challenges the first line of defence on effective risk management, and provides advice, guidance and assurance of the first line of defence to help ensure it is managing risk effectively. – The third line of defence is our Global Internal Audit function, which provides independent assurance as to whether our risk management approach and processes are designed and operating effectively. Group Risk and Compliance function Our Group Risk and Compliance function is responsible for the Group’s risk management framework. This responsibility includes establishing global policy, monitoring risk profiles, and identifying and managing forward-looking risk. Group Risk and Compliance is made up of sub-functions covering all risks to our business. Forming part of the second line of defence, the Group Risk and Compliance function is independent from the global businesses, including sales and trading functions. It provides challenge, appropriate oversight and balance in risk/return decisions. Responsibility for minimising both financial and non-financial risk, including regulatory compliance and financial crime, lies with our people. They are required to manage the risks of the business and operational activities for which they are responsible. We maintain adequate oversight of our risks through our various specialist risk stewards and the collective accountability held by our chief risk and compliance officers. We have continued to strengthen the control environment and our approach to the management of risk, as set out in our risk management framework. Our ongoing focus is on helping to enable more effective oversight and better end-to-end identification and management of financial and non-financial risks. This is overseen by the Enterprise Risk Management function, headed by the Global Head of Enterprise Risk Management. Stress testing and recovery planning Our stress testing programme assesses our capital and liquidity strength through an examination of our resilience to external shocks, and forms part of our risk management and capital and liquidity planning. As well as undertaking regulatory-driven stress tests, we conduct our own internal stress tests to understand the nature and level of material risks, quantify the impact of such risks and develop plausible mitigating actions. The outcome of a stress test provides management with key insights into the impact of severely adverse events on the Group and provides an indication to regulators of the Group’s resilience to shocks and financial stability. Internal stress tests Our internal capital assessment uses a range of stress scenarios that explore risks identified by management. They include potential adverse macroeconomic, geopolitical, climate and operational risk events, as well as other potential events that are specific to HSBC. The selection of stress scenarios is based upon the output of our identified top and emerging risks and our risk appetite processes. Stress testing analysis helps management understand the nature and extent of vulnerabilities to which the Group is exposed. Using this information, management decides whether risks can or should be mitigated through management actions or, if they were to crystallise, be absorbed through capital and liquidity. This in turn informs decisions about preferred capital and liquidity levels and allocations. During 2024, we completed a Group-wide internal stress test alongside testing of the Group’s strategy, otherwise known as the corporate plan, to test and inform our strategy and assumptions. The stress scenario assessed the impact of two contrasting scenarios envisioning severe macroeconomic conditions over a five-year period. These scenarios reflected the uncertain inflation and interest rate environment, heightened geopolitical tensions, banking sector challenges and global economic stress. In addition to the Group-wide stress testing scenarios, each major subsidiary conducts regular macroeconomic and event-driven scenario analysis specific to its region. They also participate, as required, in the regulatory stress testing programmes of the jurisdictions in which they operate, such as stress tests required by the Bank of England (‘BoE’) in the UK, the Federal Reserve Board (‘FRB’) in the US, and the Hong Kong Monetary Authority (‘HKMA’) in Hong Kong. We also conduct reverse stress tests each year at Group level and, where required, at subsidiary entity level to understand potential extreme conditions that would make our business model non-viable. Reverse stress testing identifies potential stresses and vulnerabilities we might face, and helps inform early warning triggers, management actions and contingency plans designed to mitigate risks. HSBC Holdings plc Annual Report on Form 20-F 147 Recovery and resolution plans Recovery and resolution plans form part of the integral framework safeguarding the Group’s financial stability under severe stress. The Group recovery plan, together with stress testing, helps us identify credible recovery options that can be implemented under a range of idiosyncratic and market-wide stress scenarios. The aim is to mitigate the potential shortfall in capital and liquidity pressures. The Group continues to develop its recovery and resolution capabilities, including in relation to the Resolvability Assessment Framework. Key developments in 2024 In 2024, we continued to manage risks related to macroeconomic and geopolitical uncertainties and develop risk management capabilities through the continued enhancement of our risk management framework. We also retained our focus on risk transformation and financial crime and continued to assess the Group’s operational resilience capability while prioritising the most significant enterprise risks. We made progress with, and continue to develop capabilities to address key risks. More specifically, we sought to enhance our risk management in the following areas: – We are advancing on our comprehensive initiative aimed at strengthening our global regulatory reporting processes and making them more sustainable. This multifaceted programme includes enhancing data, consistency and controls. – We are further strengthening our control environment through the delivery of a new Global Control Oversight function which aims to help drive a centralised and consistent approach to controls oversight across the first line of defence business and process owners. – We continue to maintain a focus on our technology and cybersecurity controls to improve the resilience and security of our technology services in response to the heightened external threat environment. – We have improved the quality of our strategic change investment processes and associated control monitoring and are seeking to transition to a more agile approach to delivery of complex transformation portfolios and initiatives. – We continue to enhance our model risk framework in response to changes in regulation and external factors. AI and machine learning models remain a key focus. Progress has been made in enhancing governance activity in this area with particular focus on generative AI due to the pace of technological change and regulatory and wider interest in adoption and usage. – We enhanced our processes, framework and controls to improve the  oversight of our material third parties. We have strengthened our due diligence and monitoring capabilities, with respect to the financial stability of our third parties to better manage our supply chain and operational resilience. We will continue to assess and manage our operational resilience. – Through our climate risk programme, we made progress on embedding climate considerations throughout our organisation, including through risk policy updates. We also developed risk metrics to monitor and manage exposures, and further enhanced our internal climate scenario analysis. We continue to implement our climate risk programme to complete our annual materiality assessment and make changes to our policies, processes and capabilities to better embed climate considerations throughout our organisation. – We deployed industry-leading technology and advanced analytics capabilities into new markets to improve our ability to identify suspicious activities and prevent financial crime. We will continue to evaluate technological solutions to improve our capabilities in the detection and prevention of financial crime. – We continued to embed our regulatory management systems focusing on forward-looking analysis, regulatory mapping, and regulatory content for our inventory. – We continued to enhance our frameworks, policies and governance processes to embed regulatory requirements. f 148 HSBC Holdings plc Annual Report on Form 20-F Risk review Top and emerging risks We use a top and emerging risks process to provide a forward-looking view of issues with the potential to threaten the execution of our strategy or operations over the medium to long term. We proactively assess the internal and external risk environment, as well as review the themes identified across our regions and global businesses, for any risks that may require global escalation. We update our top and emerging risks as necessary. Our current top and emerging risks are as follows. Externally driven Geopolitical and macroeconomic risks Elections and subsequent changes of government during 2024 have created uncertainty as domestic and foreign policy priorities have shifted. The US in particular is expected to continue to bring about changes to economic and foreign policy that will have broad economic and geopolitical implications. Key economic and financial risks are monitored closely. Major markets, including the US and UK, continued to grow during the second half of 2024, due to expansionary fiscal policies and the positive impact of monetary easing on domestic demand and investment. Similarly, Hong Kong and mainland China also continued to grow, despite ongoing declines in house prices and weakness in consumer spending. The outlook for 2025 remains uncertain as the new US administration intends to enact a significant change in economic and foreign policies that could have an uncertain impact on global growth, inflation and interest rates. In particular, the prospect of additional US tariffs and retaliatory actions on trade has started to weigh on economic growth forecasts and has raised future inflation expectations. Consequently, markets now expect that major central banks will adopt a more cautious approach to lowering policy interest rates during the course of 2025. The prospective impact on individual economies from the imposition of higher US tariffs will depend on the breadth and level of the increases and the dependence of the relevant countries’ exports on US import demand. Emerging markets with higher levels of US dollar- denominated debt and weaker public finances could be further impacted by higher US interest rates and US dollar strength which could result in higher repayment costs and refinancing risks and the associated possibility of sovereign rating downgrades. The country and sector implications of changing global trade policies remains an area that is closely monitored. The implications for export demand from mainland China and Hong Kong is a key area of concern. Markets continue to finance high public deficits, but debt sustainability remains a risk when set against a backdrop of more uncertain global growth prospects and a higher interest rate environment. Debt levels continue to rise in major markets as demands grow on government budgets from rising social welfare costs, defence and climate transition. We are monitoring the fiscal and market implications of recent government changes, including in the UK and the US, where election pledges are ambitious relative to already stretched fiscal positions. As global yields have increased, government bond prices have become increasingly sensitive to differences in growth and inflation expectations between markets, as well as the perception of fiscal and funding risks. A loss of investor confidence could drive a rise in yields, raise funding costs for governments and lead to tax increases and expenditure cuts that are negative for growth. For HSBC, the risks of a sharp rise in funding costs in our key markets relate both to the credit and refunding risks of our customers, market pricing risks of assets held for sale, and risks to net interest margins. We continue to monitor real estate conditions in mainland China and Hong Kong, where activity remains mixed. Various central government policies have been introduced to support the property market and wider economy, but meaningful signs of recovery are yet to be observed, with the exception of the residential real estate market in Hong Kong, which has seen some improvement in sentiment and transaction volumes in the fourth quarter of 2024. In Hong Kong, the high vacancy rate in the commercial real estate sector and the elevated interest rate environment have added downward pressure to the commercial real estate market. Commercial land sales resumed during the latter part of 2024 after a halt earlier in the year, and the recent reduction in interest rates has provided some liquidity relief to borrowers operating in this sector. Nevertheless, a sustainable recovery in underlying demand is yet to materialise, so the pressure on property prices may persist. We continue to closely monitor the risk of further credit deterioration and defaults in the portfolio. The Israel-Hamas conflict may resurge. While a 42-day ceasefire was agreed in January 2025, the durability of the ceasefire remains uncertain. The regional economic impact of this conflict was relatively limited throughout 2024. The US and UK imposed additional sanctions on Iran in 2024 in response to Iran’s activities and the increase in tensions between Israel and Iran. Further sanctions may be imposed and could increase the risk within our operations. While supply chains have largely adapted to the Russia-Ukraine war and the conflict in the Middle East, the disruption of key supply routes, particularly through the Red Sea, continues to impact global supply costs. Escalation, resurgence or other changes in the Russia-Ukraine war and the conflict in the Middle East could impact economic activity regionally or globally for a prolonged period, which in turn could have a material adverse effect on the Group’s business, financial condition, results of operations, prospects, liquidity, capital position and credit ratings. HSBC actively monitors and responds to financial sanctions and trade restrictions that have been adopted in response to the conflicts. The sanctions and trade restrictions imposed by the US, the UK, and the EU, as well as other countries, as a result of the Russia-Ukraine war, remain complex, far-reaching and evolving. The US has expanded the reach of its secondary sanctions regime, which includes broad discretion to impose severe sanctions on non-US banks that are knowingly or even unknowingly engaged in certain transactions or services directly or indirectly involving Russia’s military-industrial base, including certain third-party activities that are difficult to detect or beyond HSBC’s control. The imposition of such sanctions against any non-US HSBC entity could result in significant adverse commercial, operational and reputational consequences for HSBC. In response to such sanctions and trade restrictions, as well as asset flight, Russia has implemented certain countermeasures, including the expropriation of foreign assets. Following a strategic review in 2022, HSBC Europe BV (a wholly- owned subsidiary of HSBC Bank plc) entered into an agreement to sell its wholly-owned subsidiary HSBC Bank Russia (RR) (Limited Liability Company), which was completed in May 2024. Global tensions over trade and technology are resulting in divergent regulatory standards and compliance regimes, presenting long-term strategic challenges for multinational businesses. The relationships between China and several other countries, including the US and the UK, remain complex. To date, the US, the UK, the EU and other countries have imposed various sanctions and trade restrictions on Chinese persons and companies, and there is a continued risk of additional sanctions and trade restrictions or tariffs being imposed by the US and other governments in relation to, among other things, alleged human rights abuses, advances in certain sensitive technologies, territorial conflicts, and the illicit trade of fentanyl and other synthetic opioids. Strategic competition with China has the potential to impact the Group's operations and global supply chains remain vulnerable to a HSBC Holdings plc Annual Report on Form 20-F 149 deterioration in the relationship between China and other countries. For example, the US recently imposed a new programme restricting certain US outbound investments in Chinese companies engaged in sensitive technology sectors and the EU is considering a similar programme. In addition, during 2024 both the US and the EU raised the rate at which they levy tariffs on a range of Chinese imports, including electric vehicles. These have been imposed on the basis of unfair competition, where the Chinese government is accused of providing unfair subsidies to industry. China, in turn, imposed a number of its own sanctions and trade restrictions that target, or provide authority to target, foreign individuals or companies as well as certain goods such as rare earth minerals and metals, and technology and services. These, as well as certain other retaliatory measures, have been and may continue to be imposed against certain countries, businesses and individuals. Existing and additional sanctions, trade restrictions, counter-sanctions and other retaliatory measures relating to the foregoing or other geopolitical tensions may adversely affect the Group, its customers and the markets in which the Group operates by creating regulatory, reputational and market risks, including additional inflationary pressures, and a more complex operating environment. As the geopolitical landscape evolves, compliance by multinational corporations with their legal or regulatory obligations in one jurisdiction may be seen as supporting the law or policy objectives of that jurisdiction over another, creating additional legal, regulatory, reputational and political risks for the Group. We maintain dialogue with our regulators in various jurisdictions on the impact of legal and regulatory obligations on our business and customers. The financial impact on the Group of geopolitical risks in Asia is heightened due to the region’s relatively high contribution to the Group’s profitability, particularly in Hong Kong. While it is the Group‘s policy to comply with all applicable laws and regulations of all jurisdictions in which it operates, geopolitical tensions and potential ambiguities in the Group’s compliance obligations continue to present challenges and risks for the Group, and could have a material adverse impact on the Group’s strategy, business, customers, operations, financial results and reputation. More stringent data privacy, national security and cybersecurity laws in a number of markets could pose potential challenges to intra-Group data sharing. These developments may affect our ability to manage financial crime risks across markets due to limitations on cross-border transfers of personal information. Provisioning against credit loss is conducted under the IFRS 9 ‘Financial Instruments’ (’IFRS 9’) calculations of ECL, which use forward-looking scenarios that incorporate the economic and financial risks detailed above. Key considerations in our calculation of ECLs included inflationary pressures, interest rates and changes to economic and financial policies. In the fourth quarter of 2024, to address heightened policy uncertainty following the US election and to overcome any lags in consensus forecasts, an adjustment factor based on more recent views of expected tariffs and other policy changes was modelled and then applied to each of the economic scenarios. The effect was to lower growth expectations in our major markets, while the impact on inflation and interest rates was varied. Following the adjustment the Central scenario continues to be assigned the highest probability weighting across all of our major markets. Outer scenarios have incorporated more adverse tariff escalations and the escalation of key geopolitical risks. There remains uncertainty regarding the adequacy of our models to reflect credit losses under emerging risks which are not captured under the historical loss experience of our models, or to adequately distinguish risks for specific sectors or portfolios. The above risks could also have an impact on our customers and we continue to closely monitor the potential impacts and offer support to our customers in line with regulatory, government and wider stakeholder expectations. For further details of our Central and other scenarios, see ‘Measurement uncertainty and sensitivity analysis of ECL estimates’ on page 178 . Mitigating actions – We closely monitor geopolitical and economic developments in key markets and sectors and undertake scenario analysis where appropriate. This helps us to take actions to manage our portfolios where necessary, including through enhanced monitoring, amending our risk appetite and/or reducing limits and exposures. – We stress test portfolios of particular concern to identify sensitivity to loss under a range of scenarios, with management actions being taken to rebalance exposures and manage risk appetite where necessary. – We apply management judgemental adjustments where modelled ECL does not fully reflect the identified risks and related uncertainty, or to capture significant late-breaking events. – We regularly review key portfolios – including our commercial real estate portfolio – to help ensure that individual customer or portfolio risks are understood and that our ability to manage the level of facilities offered through any downturn is appropriate. – We continue to seek to manage sanctions and trade restrictions through the use of reasonably-designed policies, procedures and controls, which are subject to ongoing testing and enhancements. – We have taken steps, where necessary, to enhance physical security in geographical areas deemed to be at high risk from terrorism and military conflicts. Technology and cybersecurity risk Like other organisations, we operate in an extensive and complex technology landscape. We need to remain resilient in order to support customers, our colleagues and financial markets globally. Risks arise where, for example, technology is not understood, maintained or developed appropriately. We also continue to operate in an increasingly complex cyber threat environment globally. These threats include potential unauthorised access to systems including access to customer data, whether ours or that of our third-party suppliers’. These threats require ongoing investment in business and technical controls to defend against them. Mitigating actions – We continue to upgrade many of our technology systems and are transforming how software solutions are developed, delivered, maintained and tested as part of our investment in the Group’s operational resilience capabilities to seek to meet the expectations of our customers and regulators, and to help prevent disruptions to our services. – Our cyber intelligence and threat analysis team continually evaluate threat levels for the most prevalent cyber-attack types and their potential outcomes (see page 82 ), and we continue to seek to strengthen our controls to help reduce the likelihood and impact of attacks including advanced malware, data leakage, exposure through third parties and security vulnerabilities. – We continue to seek to enhance our cybersecurity capabilities, including Cloud security, identity and access management, metrics and data analytics, and third-party security reviews and to invest in mitigating the potential threats of emerging technologies. – We regularly report and review cyber risk and control effectiveness at executive level across global businesses, functions and regions, as well as at non-executive Board level to help enable appropriate visibility and governance of the risk and its mitigating actions. – We participate globally in industry bodies and working groups, working together to seek to prevent, detect and defend against cyber-attacks on financial organisations globally. – We respond to attempts to compromise our cybersecurity in accordance with our cybersecurity framework. To date, none of these attacks have had a material impact on our business or operations. 150 HSBC Holdings plc Annual Report on Form 20-F Risk review Environmental, social and governance (’ESG’) risk We are subject to financial and non-financial risks associated with ESG-related matters, such as climate change, nature-related and human rights issues. These matters can impact us both directly and indirectly through our business activities and relationships. For details of how we govern ESG, see page 72 . We may face credit losses if climate-related regulatory, legislative or technological developments impact customers’ business models or if extreme weather events disrupt or interrupt customers’ operations, resulting in financial difficulty for customers and/or stranded assets, and impacting their ability to repay their debts. Our customers may find that their business models fail to align to a net zero economy or face disruption to their operations or deterioration to their assets as a result of extreme weather. Trading losses may arise if climate change results in changes to macroeconomic and financial variables that negatively impact our trading book exposures. We may also be exposed to liquidity impacts in the form of deposit outflows due to changes in customer behaviours driven by impacts to profitability/wealth, or from reputational concerns relating to the progress we make towards our climate-related ambitions and targets. We may face impacts to our real estate portfolios due to changes to the climate, an increase in the frequency and severity of extreme weather events and chronic shifts in weather patterns, which could impact both property values and the ability of borrowers to afford their mortgage payments. This may lead to the reduced availability or increased cost of insurance, including insurance that protects property pledged as collateral of HSBC mortgages. Operational risk may increase if extreme weather events impact critical operations and premises. We may face regulatory compliance risk resulting from the increasing pace, breadth and depth of climate-related regulatory expectations, including on the management of climate risk, and variations in climate-related reporting standards, requiring implementation in short timeframes across multiple jurisdictions. Conduct risk may arise in association with the increasing demand for ‘green’ or ‘sustainable’ products where there are differing and developing standards or taxonomies. We may face reputational risk arising from how we decide to support our customers in high-emitting sectors in their transition to net zero, the preferences of different stakeholders in relation to our approach to the transition to net zero, and if we make insufficient progress in achieving our climate-related ambitions and targets. We may also be exposed to model risk, as the uncertain and evolving impacts of climate change as well as data and methodology limitations, present challenges to creating reliable and accurate model outputs. Reputational, regulatory compliance and legal risks may increase as we make progress towards our ESG-related ambitions and targets, with stakeholders likely to place greater focus on our actions, such as the development of ESG-related policies, our disclosures and financing and investment decisions relating to our ESG-related ambitions and targets. We may be exposed to additional risks if we fail to: – make sufficient progress towards our ESG-related ambitions and targets; – set adequate plans to execute those plans or adapt those plans to changes in the external environment; – manage the risks associated both with meeting and not meeting our ESG-related ambitions and targets; and – meet evolving regulatory expectations and requirements on the management of ESG risks. We may face additional risks if we knowingly or unknowingly make inaccurate, unclear, misleading, or unsubstantiated claims regarding sustainability to our stakeholders. We may face climate and ESG-related litigation and regulatory enforcement risks, either directly if stakeholders think that we are not adequately managing climate and ESG-related risks, or indirectly, if our clients and customers are themselves the subject of litigation, potentially resulting in the revaluation of their assets. Requirements, policy objectives, expectations, views or market and public perceptions and preferences in connection with the transition to a net zero economy and ESG-related matters may vary by jurisdiction and stakeholder, particularly in light of the differing perspectives of stakeholders in different markets, including the UK, the US, the EU and other markets regarding climate impacts and the nature of the appropriate responses to climate change. We may be subject to potentially conflicting approaches to ESG matters in certain jurisdictions, which may impact our ability to conduct certain business within those jurisdictions or result in additional regulatory compliance, reputational, political or litigation risks. For example, our reputation and client relationships may be damaged as a result of our decision to participate, or not to participate, in certain projects perceived to be associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change, including the transition to net zero. These risks may also arise from divergence in the implementation of ESG, climate policy and financial regulation in the many regions in which we operate, including initiatives to apply and enforce policy and regulation with extraterritorial effect. We may face financial reporting risk in relation to our climate and ESG disclosures, as data remains of limited quality and consistency, exposing us to the risk of using incomplete and inaccurate data and models that could result in sub-optimal decision making. Methodologies, data, scenarios and industry standards that we have used may evolve over time in line with market practice, regulation or developments in science, where applicable. Any such developments in methodologies and scenarios, and changes in the availability, accuracy and verifiability of data over time and our ability to collect and process such data, exposes us to financial reporting risk in relation to our climate and ESG disclosures. This could result in revisions to our internal measurement frameworks as well as reported data going forward, including on financed emissions, meaning that such data may not be reconcilable or comparable year on year. We may also have to re-evaluate our progress towards our ESG-related ambitions and targets in the future. We may also be exposed to nature-related risks beyond climate change. These risks may arise when the provision of ecosystem services, such as water availability, air quality and soil quality, is compromised, primarily by the five key drivers of nature loss: changes in land/freshwater/sea- use; climate change; pollution of air, water and soil; over-exploitation of natural resources; and invasive alien species. They can manifest themselves in a variety of ways for both HSBC and its customers, including through macroeconomic, market, credit, reputational, regulatory compliance and legal risks. Regulation and disclosure requirements in relation to human rights are increasing. Businesses are expected to be transparent about their efforts to identify and respond to the risk of adverse human rights impacts arising from their business activities and relationships. Failure to manage this risk may negatively impact people and communities, which in turn may result in reputational, regulatory compliance and legal risks for HSBC. Mitigating actions – The Environmental Risk Steering Meeting provides oversight of environmental risk and the risk of greenwashing. For further details of the Group’s ESG governance structure, see page 72 . – Our climate risk programme continues to support the development of our climate risk management capabilities across four key pillars: governance and risk appetite, risk management, stress testing and scenario analysis, and disclosures. HSBC Holdings plc Annual Report on Form 20-F 151 – We continue to enhance our approach to managing and mitigating the risk of greenwashing. – Our sustainability risk policies form part of our broader risk management framework and are important mechanisms for managing risks. Our sustainability risk policies focus on mitigating reputational, credit, legal and other risks related to our customers’ environmental and social impacts. For further details of our sustainability risk policies, see page 60 . – We are developing our understanding of nature-related risks in line with European regulatory expectations. – In 2024, we focused on our approach to human rights risk management relating to the goods and services we buy from third parties and in respect of our business customers. For further details of our approach to human rights risk management, see page 73 . – The scope of our financial reporting risk framework includes oversight of the accuracy and completeness of climate and ESG disclosures. Our risk appetite statement references our climate and ESG disclosures. Our internal controls incorporate requirements for addressing the risk of misstatement in climate and ESG disclosures. To support this, we have developed a framework to guide control implementation over climate and ESG disclosures, which includes areas such as process and data governance, and risk assessment. – We continue to engage with our customers, investors and regulators proactively on the management of climate and ESG risks. We also engage with initiatives, including the Climate Financial Risk Forum, Task Force on Climate-related Financial Disclosures and CDP (formerly the Carbon Disclosure Project) to help drive best practice for climate risk management. For further details of our approach to climate risk management, see ‘Climate risk’ on page 249 . Our ESG review can be found on page 39 . Financial crime risk Financial institutions remain under considerable regulatory scrutiny regarding their ability to detect and prevent financial crime. In 2024, these risks continued to be exacerbated by rising geopolitical tensions and ongoing macroeconomic factors. These challenges require managing conflicting laws and approaches to legal and regulatory regimes, and implementing increasingly complex and less predictable sanctions and trade restrictions. Amid increasing cost of living pressures, we continue to face increasing regulatory expectations with respect to managing internal and external fraud and protecting customers. The accessibility and increasing sophistication of generative AI brings additional financial crime risks. While there is potential for the technology to support financial crime detection, there is also a risk that criminals use generative AI to perpetrate fraud, particularly scams. The digitisation of financial services continues to have an impact on the payments ecosystem, with an increasing number of new market entrants and payment mechanisms, not all of which are subject to the same level of regulatory scrutiny or regulations as banks. Developments around digital assets and currencies have continued at pace, with an increasing regulatory and enforcement focus on the financial crimes linked to these types of assets. The intersection of ESG issues and financial crime continues to pose risks related to potential ‘greenwashing’, human rights issues and environmental crime, as our organisation, customers and suppliers transition to net zero. In addition, climate change itself could heighten risks linked to vulnerable migrant populations in countries where financial crime is already more prevalent. We also continue to face increasing challenges presented by national data privacy requirements, which may affect our ability to manage financial crime risks across markets. Mitigating actions – We continue to seek to manage sanctions and trade restrictions through the use of reasonably designed policies, procedures and controls, which are subject to ongoing testing and enhancements. – We continue to develop our fraud controls and invest in capabilities to fight financial crime through the application of advanced analytics and AI, while monitoring technological developments and engaging with third parties. – We continue to assess the impact of a rapidly changing payments ecosystem, as well as risks associated with direct and indirect exposure to digital assets and currencies, in an effort to maintain appropriate financial crime controls. – We regularly review our existing policies and control framework so that developments relating to ESG are considered and the related financial crime risks are mitigated to the extent possible. – We engage with regulators, policymakers and relevant international bodies, seeking to address data privacy challenges through international standards, guidance and legislation. Digitalisation and technological advances risk Developments in technology and changes to regulations are enabling new entrants to the industry, particularly with respect to payments. This challenges us to continue innovating to address evolving customer requirements, drive efficiency and adapt our products to attract and retain customers. As a result, we may need to increase investment in our business to adapt or develop products and services to respond to our customers’ evolving needs. We aim to ensure that new digital capabilities do not weaken our resilience or wider risk management capabilities. New technologies such as generative AI, large language models, blockchain, and quantum computing offer both business opportunities and potential risks for HSBC. As with the use of all technologies, we aim to maximise their potential while seeking to ensure a robust control environment is in place to help manage the inherent risks. Mitigating actions – We continue to monitor this emerging risk and advances in technology, as well as changes in customer behaviours, to understand how these may impact our business. – We assess new technologies to help develop appropriate controls and maintain resilience. – We closely monitor and assess financial crime risk and the impact on payment transparency and wider payment infrastructure. – We conduct risk assessments and have governance in place (for example on AI and digital assets and currencies) to help enable Group-wide cross-risk focus on areas of emerging technology. – We make public commitments as to how we engage with new technology innovation, for example publishing HSBC’s Principles for the Ethical Use of Data and AI. – We continue to make improvements to our related policies and to our control framework in order to enhance the end-to-end management of risks from new technology innovations. Evolving regulatory environment risk We aim to keep abreast of the emerging regulatory compliance and conduct risk agenda. Current focus areas include but are not limited to: ESG developments, particularly managing the risk of ‘greenwashing’; ensuring good customer outcomes and addressing customer vulnerabilities; enhancements to regulatory reporting controls; employee compliance including the use of e-communication channels; and developments in legal principles or conduct requirements (including in relation to the risk of such developments in one part of the financial industry being construed as applying to other parts of the financial industry, which could lead to legal or regulatory proceedings). 152 HSBC Holdings plc Annual Report on Form 20-F Risk review The competitive landscape in which the Group operates may be impacted by future regulatory changes and government intervention including changes driven by governments adopting a pro-business growth agenda. Mitigating actions – We monitor regulatory developments to understand the evolving regulatory landscape, and seek to respond with changes in a timely manner. – We engage with governments and regulators, and respond to consultations with a view to help shape regulations that can be implemented effectively. – We hold regular meetings with relevant authorities to discuss strategic contingency plans, including those arising from geopolitical issues. – Our purpose-led conduct approach aligns to our purpose and values, in particular the value ‘we take responsibility’. Internally driven Data risk We use multiple systems and growing quantities of data to support our customers. Risk arises if data is incorrect, unavailable, misused or unprotected. Along with other banks and financial institutions, we need to meet external regulatory obligations and laws that cover data, such as the Basel Committee on Banking Supervision’s 239 guidelines and the General Data Protection Regulation. Mitigating actions – Through our global data management framework, we monitor the quality, availability and security of data that supports our customers and internal processes. We work towards resolving any identified data issues in a timely manner. – We continue to make improvements to our data policies and to our control framework – which includes trusted sources, data flows and data quality – in order to enhance the end-to-end management of data risk. – We have established a global data management utility and continue to simplify and unify data management activities across the Group. – We seek to protect customer data through our data privacy framework, which establishes practices, design principles and guidelines that enable us to demonstrate compliance with data privacy laws and regulations. – We continue to modernise our data and analytics infrastructure through investments in cloud technology, data visualisation, machine learning and AI. – We continue to educate our employees on data risk and data management. We have delivered regular mandatory training globally on how to protect and manage data appropriately. Risks arising from the receipt of services from third parties We use third parties to provide a range of goods and services. It is critical that we seek to have appropriate risk management policies, processes and practices over the selection, governance and oversight of third parties and their supply chain, particularly for key activities that could affect our operational resilience. Any deficiency in the management of risks associated with our third parties could affect our ability to support our customers and meet regulatory expectations. Mitigating actions – We continue to monitor the effectiveness of the controls operated by our third-party providers and request third-party control reports, where required. – We continued to develop the management of our intra-group arrangements using the same control standards as we apply to external third party arrangements. – We have strengthened our due diligence and monitoring capabilities in respect of the financial stability of our third parties. – We have strengthened the way third-party risk is overseen and managed across all non-financial risks, and have enhanced our processes, framework and reporting capabilities to help improve the visibility of risk and enable more robust management of our material third parties by our global businesses, functions and regions. – We are implementing the changes required by new regulations as set by our regulators. Model risk Model risk arises whenever business decision making includes reliance on models. We use models in both financial and non-financial contexts, as well as in a range of business applications such as customer selection, product pricing, financial crime transaction monitoring, creditworthiness evaluation and financial reporting. Assessing model performance is a continuous undertaking including both regular monitoring of the model’s performance and more fundamental reviews of the model construct and data. Model risk remains a key area of focus given the regulatory scrutiny in this area, with local regulatory exams taking place in many jurisdictions and the PRA’s supervisory statement 1/23 (SS1/23) coming into effect, This provided detailed principles-based guidance on how model risk should be managed, and further developments in policy are also expected from other regulators. We continued to prioritise the redevelopment of internal ratings-based (‘IRB’) and internal model methods (‘IMM’) models, in relation to counterparty credit, as part of the IRB repair and Basel 3.1 and Fundamental Review of the Trading Book programmes. We have a key focus on enhancing the quality of data used as model inputs and ensuring that models adhere to both the letter and spirit of the regulation. Some models have been approved and a number are pending approval decisions from the UK’s Prudential Regulation Authority (‘PRA’) and other key regulators. We also launched a major project to develop 32 Wholesale IRB models which are expected to be submitted for regulatory approval over the next two and a half years. Focus remains on AI and machine learning models where the pace of technological advances, including the development of generative AI, is driving significant changes in modelling techniques, and regulators across the globe are beginning to publish regulations and guidance. Mitigating actions – We are investing in the redevelopment of our IRB models used in our wholesale businesses to enhance our modelling capability and help ensure we meet regulatory expectations for the adoption of Basel 3.1 requirements. – We updated our Model Risk Management (‘MRM’) framework to meet the requirements of the PRA’s SS1/23 with a programme of work in progress to implement these changes across our model landscape. – We completed a review of model tiering across the organisation assessing the materiality and complexity of all models and assigning a new tier which will drive the level of oversight required at model level. – We introduced a new framework to govern and manage the risks associated with Deterministic Quantitative Methods. These are complex and material calculators, which although not technically models, still present similar risks. – Model Risk Governance committees at the Group, business and functional levels continue to provide oversight of model risk. – Model Risk Management works closely with businesses to help develop IRB/IMM/IMA/IFRS 9/stress testing models to meet risk HSBC Holdings plc Annual Report on Form 20-F 153 management, pricing, capital management, and credit risk measurement needs. – Additional assurance work is performed by the model risk governance teams, which act as second lines of defence. The teams test whether controls implemented by model users comply with model risk policy and if model risk procedures are adequate. – Models using AI or generative AI techniques are reviewed by the relevant risk teams and monitored by the business to help ensure that identified risks have adequate oversight and review. A framework to manage the range of risks that are generated by these advanced techniques and to recognise the multidisciplinary nature of these risks has been developed. Change execution risk The needs of our customers are evolving faster than ever, and the complexity and pace of strategic, regulatory and technological change require us to improve the way we prioritise resources and deliver strategic outcomes safely and sustainably. The embedding of structural changes throughout the Group, arising as part of the reorganisation of our businesses announced in October 2024, is expected to enable the strategy to be executed more efficiently but may elevate the level of change execution risk in the near to medium term. Mitigating actions – We have strengthened our investment case and prioritisation processes, while improving the monitoring and oversight of our change portfolio and overall operating control environment. – The Change Prioritisation and Oversight Committee continues to oversee the prioritisation, strategic alignment, and management of execution risk for strategic change portfolios and initiatives. Additionally, the HSBC Holdings Board provides enhanced oversight over the simplification programme, directly supervising its mobilisation and delivery. – Change benefits and funding will be aligned to the new Group organisational structure. Consideration of integrated business and technology architecture design will be a critical input to our prioritisation of future change investment. Risks associated with workforce capability, capacity and environmental factors with potential impact on growth Our global businesses and functions in all of our markets are exposed to risks associated with workforce capacity challenges, including challenges to retain, develop and attract high-performing employees in key labour markets, the changing skills requirements of our workforce and compliance with employment laws and regulations. Failure to manage these risks may have an impact on the delivery of our strategic objectives. It could also result in poor customer outcomes or a breach of employment laws and regulations, which may lead to regulatory sanctions or legal claims. Mitigating actions – We seek to promote an inclusive workforce and provide health and wellbeing support. We continue to build our speak-up culture through active campaigns. – We monitor hiring activities and levels of employee attrition, with each business and function putting in place plans to help ensure they have effective workforce forecasting to meet business demands. – We monitor people risks that could arise due to organisational restructuring, seeking to ensure that we manage redundancies sensitively and support impacted employees. We encourage our people leaders to focus on talent retention at all levels, with an empathetic mindset and approach, while ensuring the whole proposition of working at HSBC is well understood. – Our Future Skills curriculum aims to provide skills that enable employees and HSBC to be successful in the future. – We develop succession plans for key management roles, with oversight from the Group Executive Committee. 154 HSBC Holdings plc Annual Report on Form 20-F Risk review Risk factors We have identified a suite of risk factors that cover a broad range of risks to which our businesses are exposed. These risks have the potential to have a material adverse effect on our business, financial condition, results of operations, prospects, capital position, strategy, reputation and/or customers. They may not necessarily be deemed as top or emerging risks; however, they inform the ongoing assessment of our top and emerging risks that may result in our risk appetite being revised. The risk factors are set out below. Macroeconomic and geopolitical risk Economic and market conditions and geopolitical developments may adversely affect our financial condition and results Our earnings are affected by global and local economic, financial and geopolitical changes. Uncertain economic conditions and volatile markets can create a challenging operating environment for our business operations. HSBC has past experience of financial and operational loss sustained as a consequence of the economic cycle, various financial crises and wars. Our earnings, operations and operating model have been and could in future be affected by the following factors: – The economic cycle: Deteriorating business, consumer or investor confidence and lower levels of investment and productivity growth, may lead to economic recession and lower customer and client activity. Rapid changes to the economic environment can also create challenging operating conditions for financial institutions such as HSBC and may affect our earnings and profits. A key source of uncertainty for 2025 and beyond comes from the expected shift in economic and financial policies in the US. Potential changes in US tariff policy and other countries’ responses are likely to have significant consequences for the global growth outlook and global trade, and may result in higher inflation and affect interest rate expectations. The uncertain outcome of the Chinese government’s policies introduced to stimulate domestic growth and support a rebalancing of the economy including the property sector is also a source of potential risk. In particular, the economic challenges affecting the Chinese property sector could further affect our customers in the region and reduce their activity and demand for our services. – Inflation and monetary policy: The combined pressure of tariffs, inflation and higher interest rates can have material impacts on our customers as these factors would erode real purchasing power and increase debt service costs. Higher interest rates may affect the credit rating of our customers and their ability to repay debt. This could negatively impact the Group’s risk-weighted assets (’RWAs’) and capital position, resulting in increases in expected credit losses and other impairment charges (’ECL’) and potential liquidity stresses due to, amongst other factors, increased customer drawdowns. There could be further adverse impacts on the Group's income if higher rates were to result in lower lending volumes and weaker wealth and insurance revenue. Across most of our markets, high headline inflation continued to subside throughout 2024 and major central banks, including the US Federal Reserve and the Bank of England, enacted monetary easing in the second half of 2024. However, uncertainty over the trajectory of US economic and trade policies, specifically around additional trade barriers and/or tariffs and immigration has shifted the balance of risks around inflation and the future interest rate trajectory and may affect future global growth. – Financial stability: Changing economic conditions and shifting policy create a more uncertain and volatile environment for asset markets. Accommodative financial conditions in the aftermath of the Covid-19 pandemic may have increased vulnerabilities given the rise in asset price valuations and the increase in debt levels. Changes to asset prices can adversely affect HSBC by increasing the financial vulnerability of customers and decreasing the value of collateral and other claims. – Fiscal policy and high levels of government debt: Through the Covid-19 pandemic period, government debt levels across both developed and emerging markets increased sharply, and in many cases left growth and employment dependent on continued deficit spending. Against the backdrop of higher global interest rates, a high level of public debt issuance and a strong US dollar, borrowing costs for certain countries could increase further. This could adversely impact the fiscal capacity and debt sustainability of highly-indebted sovereign issuers. Emerging markets with higher levels of US dollar-denominated debt and weaker public finances could be further impacted by higher US interest rates and the US dollar's strength which could result in higher repayment costs and refinancing risks and the associated possibility of sovereign rating downgrades. Where HSBC has exposure to such sovereigns or related parties, it could incur losses. At the same time,  external sovereign ratings downgrades and/or a disorderly increase in long- term government funding costs, could increase the cost of funding for HSBC and/or limit access to market funding, resulting in an adverse impact on interest margins and liquidity. – Geopolitical risks: Geopolitical risks remain high. The disruption of key supply routes, particularly through the Red Sea continues to impact global supply cost. Escalation, resurgence or other changes in the Russia-Ukraine war and the conflict in the Middle East could impact economic activity regionally, or globally for a prolonged period which, in turn, could have a material adverse effect on the Group’s business, financial condition, results of operations, prospects, liquidity, capital position and credit ratings. (For further details see 'We are subject to political, social and other risks in the countries in which we operate') Adverse changes to the current economic, financial and geopolitical situation including in relation to any of the factors listed above, could result in: – Idiosyncratic losses: Our impairment estimates attempt to capture the effects of economic, financial and geopolitical risks in the aggregate, but credit losses on specific exposures, with idiosyncratic features that make them particularly susceptible to the risks described above, may not be fully captured in our impairment estimates. – Sector-wide impairment: Changing economic conditions, policies and funding costs may give rise to a deterioration in specific industries and sectors. For example, excess supply conditions, coupled with a changes to government policies have given rise to a broad decline in mainland China real estate conditions, which has affected the financial performance of corporates operating in this market. Similarly, the Hong Kong real estate market is suffering a downturn due to high interest rates, a strong US dollar and a decline in purchases from mainland Chinese buyers. In addition, certain sectors in various countries may be targeted by material increases in trade tariffs, with industry wide implications; – Reduced credit demand: The demand for borrowing from creditworthy customers may diminish during periods of recession or where economic activity slows or remains subdued; – A tightening of financial market conditions: Our ability to borrow from other financial institutions or to engage in funding transactions may be adversely affected by market disruption; and – Goodwill and intangibles:.A changing economic and geopolitical outlook may change the recoverable value of assets and necessitate a write down in the value of intangible balance sheet items such as goodwill. HSBC Holdings plc Annual Report on Form 20-F 155 Provisioning against credit loss is conducted under the IFRS 9 ‘Financial Instruments’ (IFRS 9 ) calculations of ECL, which use forward looking scenarios that incorporate the economic and financial risks detailed above. In the fourth quarter of 2024, to address heightened policy uncertainty following the US election and to overcome any lags in consensus forecasts, an adjustment factor based on more recent views of expected tariffs and other policy changes was modelled and then applied to each of the economic scenarios. The effect was to lower growth expectations in our major markets, while the impact on inflation and interest rates was varied. HSBC’s Central scenario, which has the highest probability weighting, assumes that GDP growth in many of our key markets will be slower in 2025 relative to 2024. The slowdown is assumed to follow from the increase in global tariff rates, which impede trade flows, weaken consumption and deter investment. The scenario also assumes that central banks are expected to slow the pace of interest rate reductions in 2025 as a result as inflation converges towards central bank targets. However, forecasts remain uncertain, and changing economic conditions and the materialisation of key risks could reduce the accuracy of our Central scenario. Forecasts in recent years have been sensitive to changing economic and financial policy, changing supply chain conditions, monetary policy expectations and the inflation outlook. There remains uncertainty regarding the adequacy of our models to reflect credit losses under emerging risks which are not captured under the historical loss experience of our models, or to adequately distinguish risks for specific sectors or portfolios. Our financial model outputs (including retail and wholesale credit models such as IFRS loss models) continue to be monitored and management judgemental adjustments are used where modelled ECL does not fully reflect the identified risks and related uncertainty, or to capture significant late-breaking events. Nevertheless, our model outputs may fail to accurately capture the effects of complex economic, financial and geopolitical risks. See also ’We could incur losses or be required to hold additional capital as a result of model limitations or failure‘. The occurrence of any of these events or circumstances could have a material adverse effect on our business, financial condition, results of operations, prospects and customers. We are subject to political, social and other risks in the countries in which we operate We operate through an international network of subsidiaries and affiliates across countries and territories around the world. Our global operations are subject to potentially unfavourable political, social, environmental and economic developments in such jurisdictions, which may include: – coups, armed conflict or acts of terrorism; – political and/or social instability; – geopolitical tensions; – epidemics and pandemics (such as the Covid-19 pandemic); – climate change, acts of God and natural disasters (such as floods and hurricanes); and – infrastructure issues, such as transportation and power failures. Each of the above could impact RWAs, and the financial losses caused by any of these risk events or developments could impair asset values and the creditworthiness of customers. These risk events or developments may also give rise to disruption to the Group’s services and some may result in physical damage to our operations and/or risks to the safety of our personnel and customers. Geopolitical tensions could have significant ramifications for the Group and its customers. In particular: – While globalisation appears to remain deeply embedded in the international system, it is increasingly challenged by protectionism, including trade tariffs, which could contribute to weaker global trade, potentially affecting HSBC’s business. The broad geographic footprint and coverage of HSBC may make us and our customers susceptible to protectionist measures taken by national governments and authorities, including imposition of trade tariffs, restrictions on market access, restrictions on the ability to transact on a cross-border basis, expropriation, restrictions on international ownership, interest rate caps, limits on dividend flows and increases in taxation. There may be uncertainty as to the conflicting nature of such measures, their duration, the potential for escalation, and their potential impact on global economies; – Uncertainty about the scope, duration and potential for escalation or resurgence of the conflict in the Middle East presents global economic and political implications. (For further details, see ’Economic and market conditions and geopolitical developments may adversely affect our financial conditions and results’); – The US and UK imposed additional sanctions on Iran in 2024 in response to Iran's activities and the increase in tensions between Israel and Iran. Further sanctions may be imposed and could increase the risk within our operations; – The Russia-Ukraine war along with related financial sanctions, trade restrictions and Russian countermeasures, has had global economic and political implications; – The sanctions and trade restrictions imposed by the US, the UK, and the EU, as well as other countries, as a result of the Russia- Ukraine war, remain complex, far reaching and evolving. The US has expanded the reach of its secondary sanctions regime, which includes broad discretion to impose severe sanctions on non-US banks that are knowingly or even unknowingly engaged in certain transactions or services directly or indirectly involving Russia’s military-industrial base, including certain third-party activities that are difficult to detect or beyond HSBC’s control. The imposition of such sanctions against any non-US HSBC entity could result in significant adverse commercial, operational, and reputational consequences for HSBC. In response to such sanctions and trade restrictions, as well as asset flight, Russia has implemented certain countermeasures, including the expropriation of foreign assets; – To date, the US, the UK, the EU and other countries have imposed various sanctions and trade restrictions on Chinese persons and companies, and there is a continued risk of additional sanctions and trade restrictions or tariffs being imposed by the US and other governments in relation to among other things, alleged human rights abuses, advances in certain sensitive technologies, territorial conflicts, and the illicit trade of fentanyl and other synthetic opioids. Strategic competition with China has the potential to impact the Group's operations and global supply chains remain vulnerable to a deterioration in the relationship between China and other countries. For example, the US recently imposed a new programme restricting certain US outbound investments in Chinese companies engaged in sensitive technology sectors, and the EU is considering a similar programme. In addition, during 2024 both the US and the EU raised the rate at which they levy tariffs on a range of Chinese imports, including electric vehicles. These have been imposed on the basis of unfair competition, where the Chinese government is accused of providing unfair subsidies to industry; – China, in turn, imposed a number of its own sanctions and trade restrictions that target, or provide authority to target, foreign individuals or companies as well as certain goods such as rare earth minerals and metals, and technology and services. These, as well as certain other retaliatory measures, have been and may continue to be imposed against certain countries, businesses and individuals; – Diplomatic tensions between China and the US, which may extend to and involve other countries, and developments in Hong Kong and Taiwan and the surrounding maritime region, may further adversely affect the Group; – Existing and additional sanctions, trade restrictions, counter- sanctions and other retaliatory measures relating to the foregoing or other geopolitical tensions may adversely affect the Group, its customers and the markets in which the Group operates by 156 HSBC Holdings plc Annual Report on Form 20-F Risk review creating regulatory, reputational and market risks including additional inflationary pressures, and a more complex operating environment. – Developing alternative payment mechanisms, along with increased use of domestic currencies for trade, have been persistent topics of discussion within the BRICS group (Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the UAE). Development of new payments infrastructure and use of alternative currencies may present operational and other challenges, if, for example, certain governments mandate the use of payment channels that do not integrate with our payment architecture and financial crime controls . Global tensions over trade, technology and ideology are manifesting themselves in divergent regulatory standards and compliance regimes, creating a more complex operating environment for the Group and its customers and presenting long-term strategic challenges for multinational businesses more generally. As the geopolitical landscape evolves, compliance by multinational corporations with their legal or regulatory obligations in one jurisdiction may be seen as supporting the law or policy objectives of that jurisdiction over another, creating additional legal, regulatory, reputational and political risks for the Group. The financial impact on the Group of geopolitical risks in Asia is heightened due to the region’s relative high contribution to the Group’s profitability, particularly in Hong Kong. While it is the Group’s policy to comply with all applicable laws and regulations of all jurisdictions in which it operates, geopolitical tensions, and potential ambiguities in the Group’s compliance obligations, continue to present challenges and risks for the Group and could have a material adverse impact on the Group‘s strategy, business, customers, operations, financial results and reputation. We are subject to financial and non- financial risks associated with Environmental, Social and Governance (‘ESG‘) related matters, such as climate change, nature- related and human rights issues ESG-related matters such as climate change, society’s impact on nature and human rights issues bring risks to our business, our customers and wider society. If we fail to meet evolving regulatory expectations or requirements relating to these matters, this could have regulatory compliance and reputational impacts. Climate change could have both financial and non-financial impacts on HSBC either directly or indirectly through our business activities and relationships. Our climate risk approach identifies physical risk and transition risk as primary drivers of climate risk. In addition, we have also identified net zero alignment risk and the risk of greenwashing as thematic risk issues related to climate risk. Physical risk may arise from the increased frequency and severity of extreme weather events, such as hurricanes and floods or chronic gradual shifts in weather pattens or rises in sea level. Transition risk may arise from the process of moving to a net zero economy including changes in government policy and legislation, technology, market demand and reputational implications triggered by a change in stakeholder expectations in relation to our action or inaction. Net zero alignment risk may arise from the risk of HSBC failing to meet its net zero ambition or failing to meet external expectations related to net zero. The risk of greenwashing may arise from the act of knowingly or unknowingly making inaccurate, unclear, misleading or unsubstantiated claims regarding sustainability to our stakeholders. We currently expect the following to be the most likely ways in which climate risk may materialise for the Group: – credit risk for our corporate customers may increase if climate- related regulatory, legislative or technological developments impact customers’ business models or if extreme weather events disrupt or interrupt customers’ operations, resulting in financial difficulty for customers and/or stranded assets and impacting their ability to repay their debts. Our customers may find that their business models fail to align to a net zero economy or face disruption to their operations or deterioration to their assets as a result of extreme weather; – trading losses if climate change results in changes to macroeconomic and financial variables which negatively impact our trading book exposures; – liquidity impacts in the form of deposit outflows due to changes in customer behaviours driven by impacts to profitability/wealth, or from reputational concerns relating to the progress we make towards our climate-related ambitions and targets; – real estate may be affected by changes to the climate, the increase in the frequency and severity of extreme weather events and chronic shifts in weather patterns, which could impact both property values and the ability of borrowers to afford their mortgage payments and lead to reduced availability or increased cost of insurance, including insurance that protects property pledged as collateral of HSBC mortgages; – operational risk may increase if extreme weather events impact critical operations and premises; – regulatory compliance risk may result from the increasing pace, breadth and depth of climate-related regulatory expectations, including on the management of climate risk, and variations in climate-related reporting standards, requiring implementation in short timeframes across multiple jurisdictions; – conduct risk could develop in association with the increasing demand for \"green\" or \"sustainable\" products where there are differing and developing standards or taxonomies; – reputational risks may arise from how we decide to support our customers in high-emitting sectors in their transition to net zero, the preferences of different stakeholders in relation to our approach to the transition to net zero, and if we make insufficient progress in achieving our climate-related ambitions and targets; and – model risk may arise from the uncertain and evolving impacts of climate change as well as data and methodology limitations present challenges to creating reliable and accurate model outputs. We face increased reputational, regulatory compliance and legal risks as we make progress towards our ESG-related ambitions and targets, with stakeholders likely to place greater focus on our actions, such as the development of climate and ESG-related policies, our disclosures and financing and investment decisions relating to our ESG-related ambitions and targets. We may face additional risks if we fail to: – make sufficient progress towards our ESG-related ambitions and targets; – set adequate plans, to execute those plans, or to adapt those plans to changes in the external environment; – manage the risks associated both with meeting and not meeting our ESG-related ambitions and targets; and – meet evolving regulatory expectations and requirements on the management of ESG risks. We may face additional risks if we knowingly or unknowingly make inaccurate, unclear, misleading, or unsubstantiated claims regarding sustainability to our stakeholders. We may be exposed to climate and ESG-related litigation and regulatory enforcement risks, either directly, if stakeholders think that we are not adequately managing climate and ESG risks, or indirectly, if our clients and customers are themselves the subject of litigation, potentially resulting in the revaluation of their assets. Requirements, policy objectives, expectations, views or market and public perceptions and preferences in connection with the transition HSBC Holdings plc Annual Report on Form 20-F 157 to a net zero economy and ESG-related matters may vary by jurisdiction and stakeholder particularly in light of the differing perspectives of stakeholders in different markets including the UK, the US, the EU and other markets regarding climate impacts and the nature of the appropriate responses to climate change. We may be subject to potentially conflicting approaches to ESG matters in certain jurisdictions, which may impact our ability to conduct certain business within those jurisdictions or result in additional regulatory compliance, reputational, political or litigation risks. For example, our reputation and client relationships may be damaged as a result of our decision to participate, or not to participate, in certain projects perceived to be associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change, including the transition to net zero. These risks may also arise from divergence in the implementation of ESG, climate policy and financial regulation in the many regions in which we operate, including initiatives to apply and enforce policy and regulation with extraterritorial effect. In addition, nature-related risks beyond climate change may have significant economic impacts. These risks may arise when the provision of ecosystem services, such as water availability, air quality and soil quality is compromised, primarily by the five key drivers of nature loss: changes in land/freshwater/sea-use; climate change; pollution of air, water and soil; over-exploitation of natural resources; and invasive alien species. They can manifest themselves in a variety of ways for both HSBC and our customers, including through macroeconomic, market, credit, reputational, regulatory compliance and legal risks. Regulation and disclosure requirements in relation to human rights are increasing. Businesses are expected to be transparent about their efforts to identify and respond to the risk of adverse human rights impacts arising from their business activities and relationships. Failure to manage this risk may negatively impact people and communities, which in turn may result in reputational, regulatory compliance and legal risks for HSBC. In respect of all ESG-related risks, we also need to ensure that our strategy and business model, including the products and services we provide to customers and risk management processes (including processes to measure and manage the various financial and non- financial risks the Group faces as a result of ESG-related matters) adapt to meet regulatory requirements and stakeholder and market expectations, which continue to evolve significantly and at pace. Achieving our strategy with respect to ESG matters, including any ESG-related ambitions and targets that we may set, will depend on a number of different factors outside of the Group’s control, such as advancements in technologies and supportive public policies in the markets where we operate. If these external factors and other changes do not occur, or do not occur on a timely basis, the Group may fail to achieve its ESG-related ambitions and targets. In order to track and report on our progress against our ESG-related ambitions and targets, we rely on internal and, where appropriate and available, external data sources, guided by certain industry standards and our own ability to collect and process such data. While ESG- related reporting has improved over time, data remains of limited quality and consistency, exposing us to the risk of using incomplete and inaccurate data and models which could result in sub-optimal decision making. Methodologies, data, scenarios and industry standards that we have used may evolve over time in line with market practice, regulation and developments in science, where applicable. Any such developments in methodologies and scenarios, and changes in the availability, accuracy and verifiability of data over time and our ability to collect and process such data, exposes us to financial reporting risk in relation to our climate and ESG disclosures and could result in revisions to our internal measurement frameworks as well as reported data going forward, including on financed emissions, meaning that such data may not be reconcilable or comparable year-on-year. This could also result in the Group having to re-evaluate its progress towards its ESG-related ambitions and targets in the future and this could result in reputational, regulatory compliance and legal risks. If any of the above risks materialise, this could have financial and non- financial impacts for HSBC which could, in turn, have a material adverse effect on our business, financial condition, results of operations, reputation, prospects and strategy. The UK’s trading relationship with the EU, following the UK’s withdrawal from the EU, may adversely affect our operating model and financial results The uncertain outcome of potential developments relating to the financial services trading relationship between the UK and EU, including the rules under which financial services may be provided on a cross-border basis into the EU and its member states, remains a source of risk for the Group. The EU Capital Requirements Directive (’CRDVI’), which member states must transpose into national law by 10 January 2026, will introduce  a new requirement (‘the EU branch requirement’) under which non-EU banks and significant investment firms would have to establish a branch in each EU member state in which they carry out ‘core banking activities’, defined as deposit taking, lending and guarantees, and commitments. The EU branch requirement, which will be subject to certain exclusions and exemptions will come into effect on 11 January 2027. However, grandfathering will be available for contracts entered into before 11 July 2026. The Financial Services and Markets Act (‘FSMA’) 2023 became law in June 2023 and provides for a number of changes to the regulatory architecture in the UK. It contains provisions that would allow for specified ‘on shored’ EU legislation, also known as ‘retained EU law’ or ‘REUL’ (and known as \"assimilated law\" after 1 January 2024), to be revoked and replaced by legislation or rules made by HM Treasury or the regulators. FSMA 2023 allows for the eventual repeal of assimilated law related to financial services and enables the government and regulators to replace it in line with the FSMA model. Each piece of assimilated law related to financial services is now within a “transitional period,” lasting until its repeal is individually commenced by HM Treasury in a phased and sequenced manner. Furthermore, as of 1 January 2024, certain legal effects previously associated with REUL (now referred to as assimilated law) no longer apply, including the supremacy of REUL over other types of conflicting domestic UK law, general principles of EU law (which informed REUL’s interpretation and application) and directly effective EU rights. Uncertainty remains as to the extent to which EU and UK laws will diverge in the future, as a result of the future repeal of assimilated law under FSMA 2023 or further development of the EU‘s own regulatory regime. Any changes to the current rules in this respect, the EU branch requirement and any further divergences in the legal regimes could require modifications to our UK and EU operating models, with resulting impacts to our clients and employees. The precise impacts on our clients will depend on the nature of any developments and their individual circumstances and could include disruption to the provision of products and services, and this could in turn increase operational complexity and/or costs for the Group. More generally, over the medium to long term, the UK’s withdrawal from the EU and the operation of the Trade and Cooperation Agreement agreed between the EU and the UK (and any complexities that may result therefrom), may lead to increased market volatility and economic risk, particularly in the UK, which could adversely impact our profitability and prospects for growth in this market. In addition, the UK’s future trading relationship with the EU and the rest of the world will likely take a number of years to fully stabilise. This may result in a prolonged period of uncertainty, unstable economic conditions and market volatility. This could include reduced international trade flows and loss of export market shares, as well as currency fluctuations. If any of the above risks materialise, this could have a material adverse effect on our business, financial condition, results of operations, reputation, prospects and strategy. 158 HSBC Holdings plc Annual Report on Form 20-F Risk review We operate in markets that are highly competitive We compete with other financial institutions in a highly competitive industry that continues to undergo significant change as a result of financial regulatory reform, as well as increased public scrutiny and a continued challenging macroeconomic environment. We target internationally mobile clients who need sophisticated global financial solutions. We generally compete on the basis of the quality of our customer service, the wide variety of products and services that we can offer our customers, the ability of our products and services to satisfy our customers’ needs, the extensive distribution channels available for our customers, our innovation, and our reputation. Continued and increased competition in any one or all of these areas may negatively affect our market share and/or cause us to increase our capital investment in our businesses in order to remain competitive. Additionally, our products and services may not be accepted by our targeted clients. In many markets, there is increased competitive pressure to provide products and services at current or lower prices. Consequently, our ability to reposition or reprice our products and services from time to time may be limited, and could be influenced significantly by the actions of our competitors who may or may not charge similar fees for their products and services. Any changes in the types of products and services that we offer our customers, and/ or the pricing for those products and services, could result in a loss of customers and market share. Developments in technology and changes to regulations are enabling new entrants to the industry. This challenges HSBC to continue innovating and taking advantage of new digital capabilities so that we improve how we serve our customers, drive efficiency and adapt our products to attract and retain customers. As a result, we may need to increase our investment in our business to adapt or develop products and services to respond to our customers‘ evolving needs. We also need to ensure that new digital capabilities do not weaken our resilience. If HSBC fails to develop and adapt its products and services to take advantage of new digital capabilities this could have an adverse impact on our business. The digitisation of financial services continues to have an impact on the payment services ecosystem, including new market entrants and payment mechanisms, not all of which are subject to the same level of regulatory scrutiny or regulations as financial institutions. This presents ongoing challenges in terms of maintaining required levels of payment transparency, notably where financial institutions serve as intermediaries. Developments around digital assets and currencies have continued at pace, with an increasing regulatory and enforcement focus. Any of these factors could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. Changes in foreign currency exchange rates may affect our results We prepare our accounts in US dollars because the US dollar and currencies linked to it form the major currency bloc in which we transact and fund our business. However, a substantial portion of our assets, liabilities, assets under management, revenues and expenses are denominated in other currencies. Changes in foreign exchange rates, including those that may result from a currency becoming de- pegged from the US dollar, may have an effect on our accounting standards, reported income, cash flows and shareholders’ equity. Unfavourable changes in foreign exchange rates could have a material adverse effect on our business, financial condition, results of operations, capital position and prospects. Market fluctuations may reduce our income or the value of our portfolios Our businesses are inherently subject to risks in financial markets and in the wider economy, including changes in, and increased volatility of, interest rates, inflation rates, credit spreads, foreign exchange rates, commodity, equity, bond and property prices, and the risk that our customers act in a manner inconsistent with our business, pricing and hedging assumptions. Market pricing can be volatile and ongoing market movements could significantly affect us in a number of key areas. For example, banking and trading activities are subject to interest rate risk, foreign exchange risk, inflation risk and credit spread risk. Changes in interest rate levels, interbank spreads over official rates and yield curves affect the interest rate spread realised between lending and borrowing costs. The potential for future volatility and margin changes remains. See ‘The macroeconomic and market impact of major geopolitical developments may affect our financial condition and results‘ above regarding the impact of these on the interest rate environment. Competitive pressures on fixed rates or product terms in existing loans and deposits sometimes restrict our ability to change interest rates applying to customers in response to changes in official and wholesale market rates. Our pension scheme assets include equity and debt securities, the cash flows of which change as equity prices and interest rates vary. Our insurance businesses are exposed to the risk that market fluctuations may cause mismatches to occur between product liabilities and the investment assets that back them. Market risks can affect our insurance products in a number of ways depending upon the product and the associated contract. For example, mismatches between assets and liability yields and maturities give rise to interest rate risk. Some of these risks are borne directly by the customer and some are borne by the insurance businesses, with their excess capital invested in the markets. Some insurance contracts involve guarantees and options that increase in value in adverse investment markets. There is a risk that the insurance businesses could bear some of the cost of such guarantees and options. The performance of the investment markets could thus have a direct effect upon the value embedded in the insurance and investment contracts and our operating results, financial condition and prospects. It is difficult to predict with any degree of accuracy changes in market conditions, and such changes could have a material adverse effect on our business, financial condition, results of operations, capital position and prospects. Liquidity, or ready access to funds, is essential to our businesses Our ability to borrow on a secured or unsecured basis, and the cost of doing so, can be affected by increases in interest rates or credit spreads, the availability of credit, regulatory requirements relating to liquidity or the market perceptions of risk relating to the Group or the banking sector, including our perceived or actual creditworthiness. Current accounts and savings deposits payable on demand or at short notice form a significant part of our funding, and we place considerable importance on maintaining their stability. For deposits, stability depends upon preserving investor confidence in our capital strength and liquidity, and on comparable and transparent pricing. We also access wholesale markets in order to provide funding for entities that do not accept deposits, to align asset and liability maturities and currencies, and to maintain a presence in local markets. In 2024, we issued the equivalent of $21bn of senior debt securities in the public capital markets in a range of currencies and maturities from a number of Group entities, including $16bn of senior securities issued by HSBC Holdings. An inability to obtain financing in the unsecured long-term or short- term debt capital markets, or to access the secured lending markets, could have a material adverse effect on our liquidity. HSBC Holdings plc Annual Report on Form 20-F 159 Unfavourable macroeconomic developments, market disruptions or regulatory developments may increase our funding costs or challenge our ability to raise funds to support or expand our businesses. If we are unable to raise funds through deposits and/or in the capital markets, our liquidity position could be adversely affected, and we might be unable to meet deposit withdrawals on demand or at their contractual maturity, to repay borrowings as they mature, to meet our obligations under committed financing facilities and insurance contracts or to fund new loans, investments and businesses. We may need to liquidate unencumbered assets to meet our liabilities. In a time of reduced liquidity, we may be unable to sell some of our assets, or we may need to sell assets at reduced prices, which in either case could materially adversely affect our business, financial condition, results of operations, capital position and prospects. Macro-prudential, regulatory and legal risks to our business model We are subject to numerous new and existing legislative and regulatory requirements, and to the risk of failure to comply with applicable regulations Our businesses are subject to ongoing regulation, policies, voluntary codes of practice and interpretations in the various markets in which we operate. A number of regulatory changes affecting our business have effects beyond the country in which they are enacted. In recent years, regulators and governments have focused on reforming both the prudential regulation of the financial services industry and the ways in which the business of financial services is conducted. The measures taken include enhanced capital, liquidity and funding requirements, the separation or prohibition of certain activities by banks, changes in the operation of capital markets activities, the introduction of tax levies and transaction taxes and changes in compensation practices. With regard to the non-financial risk agenda, there is a focus on customers and markets, payments and e-money, digital and artificial intelligence (‘AI’), ESG including governance, and operational resilience. This is all set against increased geopolitical tensions which may limit the development of consistent regulatory requirements, and the ongoing regulatory response to the ‘banking turmoil’ in 2023. The specific areas where regulatory changes and increased supervisory expectations could have a material effect on our business, financial condition, results of operations, prospects, capital position, reputation and strategy include, but are not limited to those listed below, grouped around prudential and non-prudential themes are as follows: Prudential and related issues – the implementation of the Basel Committee on Banking Supervision‘s reforms to the prudential framework, ’ Basel 3.1 ’ , which include changes to the RWA approaches to credit risk, market risk, operational risk, counterparty risk and credit valuation adjustments and the application of an RWA output floor; – the increased supervisory expectations arising from expanding and increasingly complex regulatory reporting obligations, including expectations on data integrity and associated governance and controls; – the possible impacts on some of our regulatory ratios, such as the CET1 ratio, LCR and NSFR, arising from the programme initiated to strengthen our global regulatory reporting processes and make them more sustainable. This programme includes enhancing data, consistency and controls; – any changes to the prudential framework following the bank failures in 2023, for example in relation to liquidity or interest rate risk in the banking book or rules concerning depositor protection (such as those related to the operation of the Financial Services Compensation Scheme in the UK); – HM Treasury’s work on improving the operation of the UK’s ring- fencing regime, which includes proposals that may affect HSBC‘s operations; – requirements flowing from arrangements for the resolution strategy of the Group and its individual operating entities that may have different effects in different countries; – the financial effects of climate risk and other ESG-related changes being incorporated within the global prudential framework, including physical risks from climate change and the transition risks resulting from a shift to a low carbon economy; – reviews of regulatory frameworks applicable to the wholesale financial markets, in particular the reforms and other changes to the securitisation requirements. Non-prudential and related issues – the ongoing focus by regulators, international bodies and other policy makers, on how we conduct business, particularly around the delivery of fair outcomes for customers (for example, the embedding of the requirements of the UK Consumer Duty and regulatory expectations on access to bank accounts for those in vulnerable circumstances), promoting effective competition and ensuring the orderly and transparent operation of global financial markets; – the implementation of conduct and other measures as a result of regulators’ focus on organisational culture, employee behaviour, whistleblowing and inclusion; – the supervisory and regulatory change focus globally on technology adoption and digital delivery, underpinned by customer protection, including the use of digital assets and currencies and wider financial technology risks, for example, the EU‘s Markets in Crypto-Assets Regulation, which introduces a framework for regulating crypto-assets, and Hong Kong, Singapore, and the UK are each introducing new regulations aimed at cryptocurrency related activities; – increasing regulatory expectations and requirements around the use of AI for example, the EU’s AI Act; – continuing supervisory and regulatory change focus globally on payment services and related infrastructure; – ongoing expectations with respect to managing emerging financial crime risks and its impact on customers, and managing conflicting laws and approaches to legal and regulatory regimes and implementing increasingly complex and less predictable sanctions and trade restrictions; – the continued evolution of the UK’s regulatory framework following the UK‘s withdrawal from the EU; – the EU’s CRDVI Article 21c amendment requiring non-EU entities to provide core banking services to EU clients through an EU branch or subsidiary; – requirements regarding remuneration arrangements and senior management accountability more generally within the Group (for example, the requirements of the Senior Managers and Certification Regime in the UK and similar regimes in Hong Kong, Singapore, Australia, Ireland, and elsewhere that are either in effect or under consideration/implementation); – changes in national or supra-national requirements regarding the management of third-party risk; – increasing regulatory expectations of firms in relation to ESG- related governance, risk management and disclosure frameworks (for example the UK Sustainability Disclosure Requirements and the EU Corporate Sustainability Reporting Directive), particularly relating to climate change, transition plans, greenwashing and supply chain due diligence; 160 HSBC Holdings plc Annual Report on Form 20-F Risk review – the increasing regulatory expectations and requirements (for example, under the EU ‘ s Digital Operational Resilience Act) relating to various aspects of operational and cyber resilience, including an ongoing focus on the response of institutions to operational disruptions; and – the regulatory focus on policies and controls related to the unauthorised use by employees of electronic communications on non-business platforms. We may not manage risks associated with the replacement of benchmark rates and indices effectively Ibors were previously used extensively to set interest rates on different types of financial transactions and for valuation purposes, risk measurement and performance benchmarking. Key benchmark rates and indices, including Ibors such as the London interbank offered rate (‘Libor’), have been the subject of both national and international regulatory scrutiny and reform for many years. This resulted in significant changes to the methodology and operation of certain benchmarks and indices, the adoption of replacement near risk free rates (‘RFRs‘) and the proposed discontinuation of certain reference rates (including Libor). From the end of December 2021, the European Money Markets Institute  ceased publication of the Euro Overnight Index average  and from 30 September 2024 ICE Benchmark Administration Limited  ceased publication of all thirty-five Libor settings, and RFRs have been adopted in their place. The continued existence of a small number of legacy contracts in benchmark rates that have demised (so called ‘tough legacy contracts‘) results in risks for HSBC, its clients and, investors, and the financial services industry more widely. These include but are not limited to: – Regulatory compliance, legal and conduct risks, which arise from the continued transition of legacy contracts to RFRs or alternative rates and from the sales of products referencing RFRs. These risks could be heightened if HSBC’s sales processes and procedures do not appropriately detail the risks and complexity of RFR market conventions; – Legal risks associated with legacy contracts that HSBC is unable to transition, including those contracts that rely on the use of legislative solutions. If HSBC is unable to transition legacy contracts, this could lead to reliance on fallback provisions which do not contemplate the permanent cessation of the relevant Ibor, and there is a risk that these fallback provisions will not work from a contractual, practical or financial perspective. While legislative solutions have in some circumstances assisted market participants, our clients and our investors with transitioning legacy contracts and mitigating risks associated with ‘tough legacy’ contracts, there remains some uncertainty around the operation, application and enforceability of such solutions. If any of these risks materialise, this could result in unintended or unfavourable outcomes for clients and investors, and could have a material adverse effect on our business, financial condition, results of operations, prospects, reputation and customers. We are subject to the risk of current and future legal, regulatory or administrative actions and investigations, the outcomes of which are inherently difficult to predict We face significant risks in our business relating to legal, regulatory or administrative actions and investigations. The amount of damages claimed in litigation, regulatory proceedings, investigations, administrative actions and other adversarial proceedings against financial institutions are increasing for many reasons. These include a substantial increase in the number of regulatory changes taking place globally, increasing focus from regulators, investors and other stakeholders on ESG disclosures, including in relation to the measurement and reporting of such matters as both local and international standards in this area continue to significantly evolve and develop, increased media attention and higher expectations from regulators and the public. In addition, criminal prosecutions of, and civil proceedings involving, financial institutions for, among other things, alleged conduct breaches, breaches of anti-money laundering, anti-bribery and anti-corruption and sanctions regulations, antitrust violations, market manipulation, aiding and abetting tax evasion, and providing unlicensed cross-border banking services, have become more commonplace and may increase in frequency due to increased media attention and higher expectations from regulators and the public. Any such legal, regulatory or administrative action or investigation against HSBC Holdings or one or more of our subsidiaries could result in, among other things, substantial fines, civil penalties, criminal penalties, cease and desist orders, forfeitures, the suspension or revocation of key licences, requirements to exit certain businesses, other disciplinary actions and/or withdrawal of funding from depositors and other stakeholders. Any threatened or actual litigation, regulatory proceeding, administrative action, investigation, or other adversarial proceedings against HSBC Holdings or one or more of our subsidiaries could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. Additionally, the Group’s financial statements reflect provisioning for legal proceedings, regulatory and customer remediation matters. Provisions for legal proceedings, regulatory and customer remediation matters, typically require a higher degree of judgement than other types of provisions, and the actual costs resulting from such proceedings and matters may exceed existing provisioning. Additionally, as described in Note 35 on the Financial Statements, we continue to be subject to a number of material legal proceedings, regulatory actions and investigations, the outcomes of which are inherently difficult to predict, particularly those cases in which the matters are brought on behalf of various classes of claimants, seek damages of unspecified or indeterminate amounts or involve novel legal claims. Moreover, we may face additional legal proceedings, investigations, or regulatory actions in the future, including in other jurisdictions and/or with respect to matters similar to, or broader than, the existing legal proceedings, investigations or regulatory actions. An unfavourable result in one or more of these proceedings could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. We may fail to meet the requirements of regulatory stress tests We are subject to supervisory stress tests in many jurisdictions, which are described on page 231 . These exercises are designed to assess the resilience of banks to potential adverse economic developments or operational failure to inform mitigation actions and ensure that they have robust, forward looking capital planning processes that account for the risks associated with their business profile. Assessment by supervisors is both on a quantitative and qualitative basis, the latter focusing on our data provision, stress testing capability and internal management processes and controls. Failure to meet quantitative or qualitative requirements of regulatory stress tests, or the failure by supervisors to approve our stress test results and capital plans, could result in the Group being required to enhance its capital position, and this could, in turn, have a material adverse effect on our business, financial returns, capital position, operational capabilities and reputation. HSBC Holdings plc Annual Report on Form 20-F 161 HSBC and its UK subsidiaries may become subject to stabilisation provisions under the UK Banking Act 2009, in certain significant stress situations Under the special resolution regime set out in the UK Banking Act 2009 (the ‘SRR’), HM Treasury, the BoE, the PRA and the FCA (together, the ‘Authorities’) are granted substantial powers to implement the following stabilisation options: (i) transfer of all or part of the business of a relevant entity or the shares of the relevant entity to a private sector purchaser; (ii) transfer of all or part of the business of the relevant entity to a ‘bridge bank’ wholly owned by the BoE temporarily, to allow for preparation for an onward sale to a private sector purchaser or an initial public offering; (iii) transfer of part of the assets, rights or liabilities of the relevant entity to one or more asset management vehicles for management of the transferor’s assets, rights or liabilities; (iv) the write-down, conversion, transfer, modification, or suspension of the relevant entity’s equity, capital instruments and liabilities (the so-called “bail-in power”); and (v) temporary public ownership of the relevant entity. The SRR also provides for modified insolvency and administration procedures for relevant entities, and confers ancillary powers on the Authorities, including the power to modify or override certain contractual arrangements in certain circumstances. The UK Banking Act 2009 gives power to HM Treasury to make further amendments to the law for the purpose of enabling it to use the SRR powers effectively, potentially with retrospective effect. These stabilisation options and powers may also be applied to a UK bank or investment firm or to certain of their affiliates (which, in respect of HSBC, could include HSBC Holdings) where certain conditions are met. In view of the HSBC Group’s corporate structure, which comprises a group of locally regulated operating banks, the preferred resolution strategy for the HSBC Group, as confirmed by its regulators, is a multiple point of entry (‘MPE’) bail-in strategy. This provides flexibility for HSBC to be resolved either (i) through a bail-in at the HSBC Holdings level (using the above-mentioned bail-in power), which enables the recapitalisation of operating bank subsidiaries in the HSBC Group (as required) while restructuring actions are undertaken, with the HSBC Group remaining together; or (ii) at a local subsidiary level pursuant to the application of statutory resolution powers by local resolution authorities. Further details on HSBC’s resolution strategy can be found in the section entitled ‘Recovery and resolution’ on page 140 . In addition to the stabilisation options, the relevant Authority may, in certain circumstances, require the permanent write-down or conversion into equity of any outstanding tier 1 capital instruments and tier 2 capital instruments prior to the exercise of any stabilisation option (including the bail-in power), which may lead to the cancellation, transfer or dilution of HSBC Holdings’ ordinary share capital. In general, the UK Banking Act 2009 requires the Authorities to have regard to specified objectives in exercising the powers provided for by the Act. One of the objectives (which is required to be balanced as appropriate with the other specified objectives) refers to the protection and enhancement of the stability of the financial system of the UK. The UK Banking Act 2009 includes, in certain circumstances, and with respect to the exercise of certain powers provided for by the Act, provisions related to compensation in respect of transfer instruments and orders made under it. This includes a ‘no creditor worse off’ safeguard, which requires that no shareholder or creditor must be left worse off from the use of resolution powers than they would have been had the entity entered insolvency rather than resolution. However, if we are at or approaching the point where we may be deemed by our regulators to be failing, or likely to fail, so as to require regulatory intervention, any exercise of the above mentioned powers by the Authorities may result in holders of our ordinary shares, or other instruments that may fall within the scope of the ‘bail in’ or other write-down and conversion powers granted under the UK Banking Act 2009, being materially adversely affected, including by the cancellation of shares, the write-down or conversion into shares of other instruments, the transfer of shares to a third party appointed by the BoE, the loss of rights associated with shares or other instruments (including rights to dividends or interest payments), the dilution of their percentage ownership of our share capital, and any corresponding material adverse effect on the market price of our ordinary shares and other instruments. We are subject to tax-related risks in the countries in which we operate We are subject to the substance and interpretation of tax laws in all countries in which we operate and are subject to routine review and audit by tax authorities in relation thereto. Our interpretation or application of these tax laws may differ from those of the relevant tax authorities and we provide for potential tax liabilities that may arise on the basis of the amounts expected to be paid to the tax authorities. The amounts ultimately paid may differ materially from the amounts provided depending on the ultimate resolution of such matters. In addition, potential changes to tax legislation, the approach taken by tax authorities in audits, and tax rates in the countries and territories in which we operate, in particular, those arising as a consequence of the OECD‘s Base Erosion and Profit Shifting project, could increase our effective tax rate in the future and have a material adverse effect on our business, financial condition, results of operations, prospects and capital position. Risks related to our operations Our operations are highly dependent on our information technology systems We operate in an extensive and complex technology landscape, which must remain resilient in order to support customers, the Group and markets globally. Risks arise where technology is not understood, maintained, or developed appropriately. The reliability and security of the HSBC Group’s information technology infrastructure is crucial to HSBC Group’s provision of financial services to our customers and protecting the HSBC brand. The effective functioning of our payment systems, financial control, risk management, credit analysis and reporting, accounting, customer service and other information technology systems, as well as the communication networks between our branches and main data processing centres, are important to our operations. Critical system failure, prolonged service unavailability or a material breach of data security, particularly of confidential customer data, could compromise HSBC Group’s ability to serve its customers. This could breach regulations and could cause long-term damage to HSBC Group’s business and brand that could have a material adverse effect on our financial condition, results of operations, prospects and reputation. We remain susceptible to a wide range of cyber risks that impact and/ or are facilitated by technology The threat of cyber-attacks remains a concern for HSBC, as it does across the entire financial sector. As cyber-attacks continue to evolve, failure to protect our operations may result in disruption for 162 HSBC Holdings plc Annual Report on Form 20-F Risk review customers, manipulation of data or financial loss. This could adversely impact both us and our customers. Adversaries attempt to achieve their objectives by compromising HSBC or our third party suppliers. They use techniques that include malware (such as ransomware), exploitation of both known and unpublished (zero-day) software vulnerabilities , phishing emails, distributed denial of service attacks, as well as potentially physical compromise of premises, or coercion of staff. Our customers may also be subject to these constantly evolving cyber-attack techniques. The Group, like other financial institutions, has experienced numerous common cyberattacks, including for example, distributed denial of service and phishing attacks. Some of our third-party service providers also have experienced cyberattacks. To date, we have not been materially affected by cybersecurity threats. However, we expect cyberattacks to continue, and our business strategy, results of operations and financial condition could be materially affected by cybersecurity risks and any future material incidents. Cybersecurity risks will continue to increase, due to continued increase of services delivered over the internet; increasing reliance on internet-based products, applications and data storage; the increasing use of AI, which could be used to facilitate sophisticated cyber attacks and an increased use of hybrid working models by HSBC’s employees, contractors, third party service providers and their sub- contractors. Failure to adhere to HSBC’s cybersecurity policies, procedures or controls, employee wrongdoing, or human, governance or technological error could also compromise HSBC’s ability to defend against cyber-attacks. Should any of these cybersecurity risks materialise, they could have a material adverse effect on our customers, business, financial condition, results of operations, prospects and reputation. We could incur losses or be required to hold additional capital as a result of model limitations or failure HSBC uses models for a range of purposes in managing its business, including regulatory capital calculations, stress testing, credit approvals, calculation of ECLs on an IFRS 9 basis, financial crime and fraud risk management and financial reporting. HSBC could face adverse consequences as a result of decisions that may lead to actions by management based on models that are poorly developed, implemented or used, or as a result of the modelled outcome being misunderstood, or the use of modelled information for purposes which it was not designed for, or by inherent limitations arising from the uncertainty inherent in predicting or estimating future outcomes. Regulatory scrutiny and supervisory concerns over banks’ use of models are considerable, particularly the internal models and assumptions used by banks in the calculation of regulatory capital. If regulatory approval for key capital models is not achieved in a timely manner or if those models are subject to negative feedback from regulators HSBC could be required to hold additional capital. Evolving regulatory requirements have resulted in changes to HSBC’s approach to model risk management, which poses execution challenges. The adoption of more sophisticated modelling approaches including AI and technology related developments by both HSBC and the financial services industry could also lead to increased model risk. HSBC’s commitment to changes to business activities due to climate and sustainability challenges will also have an impact on model risk going forward. Models will play an important role in risk management and financial reporting of climate-related risks. Uncertainty of the long dated impacts of climate change and lack of robust and high quality climate related data present challenges to creating reliable and accurate model outputs for these models. Model risk remains a key area of focus given the regulatory scrutiny in this area with local regulatory examinations taking place in many jurisdictions and revised principles on model risk published by the PRA which came into force in 2024 and further developments in policy expected from other regulators. Risks arising from the use of models could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position and reputation. See also \"Economic and market conditions and geopolitical developments may adversely affect our financial condition and results\". Our operations use third-party suppliers and service providers HSBC relies on third-party suppliers and service providers to supply goods and services. The use of third-party suppliers and service providers by financial institutions is of particular focus to global regulators. This includes how outsourcing decisions are made, how key relationships are managed and our understanding of third-party dependencies and their impact on service provision. The inadequate management of third-party risk could impact our ability to meet strategic, regulatory and customer expectations. This may lead to a range of impacts, including regulatory censure, penalties or damage both to shareholder value and to our reputation. This could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position and reputation. Risks related to our governance and internal controls Our data management and data privacy controls must be sufficiently robust to support the increasing data volumes and evolving regulations As the HSBC Group becomes more data-driven and our business processes move to digital channels, the volume of data that we rely on has increased. As a result, management of data (including data retention and deletion, data quality, data privacy and data architecture) from creation to destruction must be robust and designed to identify quality and availability issues. Inadequate data management could result in negative impacts to customer service, business processes, or require manual intervention to reduce the risk of errors in reporting to senior management, executives or regulators. Expanding data privacy, national security and cybersecurity laws in a number of markets could pose potential challenges to intra-group data sharing. These developments could increase financial institutions’ compliance obligations in respect of cross-border transfers of personal information, which may affect our ability to manage financial crime risks across markets. In addition, failure to comply with data privacy laws and other legislation in the jurisdictions in which we operate may result in regulatory sanctions. Any of these failures could have a material adverse effect on our business, financial condition, results of operations, prospects, and reputation. Third parties may use us as a conduit for illegal activities without our knowledge We are required to comply with applicable financial crime laws and regulations, and have adopted various policies, procedures and controls aimed at preventing the exploitation of HSBC's products and services for criminal activity. Financial crime includes fraud, bribery and corruption, tax evasion, sanctions and export control violations, money laundering, terrorist financing and proliferation financing (see ‘Regulation and supervision - Financial crime regulation’). There are instances, as permitted by regulation, where we may rely upon counterparties to undertake certain financial crime risk management activities on our behalf. Any controls implemented and maintained by HSBC to manage the risk created by such reliance may not prevent HSBC Holdings plc Annual Report on Form 20-F 163 third parties from using us (and our relevant counterparties) as a conduit for financial crime, without our knowledge (and that of those counterparties). Becoming a party to, associated with, or accused of being associated with, financial crime could damage our reputation and could make us subject to fines, sanctions and / or legal or regulatory enforcement. Any one of these outcomes could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. We are subject to the risk of financial crime We are exposed to financial crime risk from our customers, staff and third parties engaging in criminal activity (see also ‘Third parties may use us as a conduit for illegal activities without our knowledge’) and, as such, we face increasing regulatory expectations. In 2024, financial crime risk continued to be exacerbated by increasingly complex geopolitical challenges, the macroeconomic outlook, the complex and dynamic nature of sanctions compliance, evolving financial crime regulations, rapid technological developments, an increasing number of national data privacy requirements and the increasing sophistication of fraud, scams and other criminal activities. Our ability to manage financial crime risk is dependent on the use and effectiveness of our financial crime risk assessments, systems and controls. Weak or ineffective financial crime processes and controls may risk HSBC inadvertently facilitating financial crime which may result in regulatory investigation, sanction, litigation, fines and reputational damage. In addition, HSBC Bank USA, as the primary US dollar correspondent bank for the Group, is subject to heightened financial crime risk arising from business conducted on behalf of its non-US HSBC affiliates. HSBC Bank USA has implemented policies, procedures and controls reasonably designed to comply with financial crime legal and regulatory requirements and mitigate financial crime risk from its affiliates. Nevertheless, in the event that these controls are ineffective, this could lead to a breach of these requirements resulting in a potential enforcement action by the US Department of the Treasury or other US agencies that may include substantial fines or penalties. Any such action against HSBC Bank USA could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. We may suffer losses due to employee misconduct Our businesses are exposed to risk from potential non-compliance with Group policies, including the HSBC Values, and related behaviours and employee misconduct such as fraud, negligence or non-financial misconduct, all of which could result in regulatory sanctions and/or reputational or financial harm. In recent years, a number of multinational financial institutions have suffered material losses due to the actions of rogue employees. It is not always possible to deter employee misconduct, and the precautions we take to prevent and detect this activity may not always be effective. Misconduct risks could be increased if our prevent-and-detect measures are less effective because of remote and home working. Employee misconduct or regulatory sanctions if a regulator deems HSBC‘s actions to deter such activity to be insufficient, could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. The delivery of our strategic actions is subject to execution risk and we may not achieve all of the expected benefits of our strategic initiatives Effective management of transformation initiatives is required to achieve the Group’s strategic priorities, which includes delivering both on externally driven programmes and on our own key business initiatives which seek to deliver growth, operational resilience and efficiencies. The scale, complexity, and concurrent demands of such transformation initiatives can result in heightened execution risk. The Group’s strategy has been supported by global trends including the continued economic development in emerging markets, growth of international trade and capital flows, and wealth creation, particularly in faster-growing markets. The development and implementation of our strategy requires difficult and complex judgements, including forecasts of economic conditions in various parts of the world. We may fail to correctly identify the relevant factors in making decisions as to capital deployment and cost reduction. We may also encounter unpredictable changes in the external environment that are disadvantageous to our strategy. In October 2024, the Group announced a plan to simplify its organisational structure to accelerate delivery against the Group’s strategic priorities. Effective 1 January 2025, the Group operates through four new businesses: Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking. The Group’s functions are being realigned to support these four businesses. The execution of this reorganisation will result in significant organisational design changes throughout the Group. There is a risk that the reorganisation may not achieve some or all of its goals and may fail to deliver or achieve the expected benefits of the Group’s strategic initiatives. Our ability to execute strategic change may be limited by our operational capacity, effectiveness of our change management controls, structural challenges posed by mergers and acquisitions, and the potential for unforeseen changes in the market and/or regulatory environment in which we operate. The global economic outlook remains uncertain, particularly with regard to inflation, changes in legislation and geopolitical tensions. Therefore, there remains a risk that our cost and investment actions may not be sufficient to deliver or achieve our expected benefits of the Group’s strategic initiatives. This could have a material adverse effect on our customers, business, financial condition, prospects, operational resilience and reputation. Our risk management measures may not be successful The management of risk is an integral part of all our activities. Risk constitutes our exposure to uncertainty and the consequent variability of return. Specifically, risk equates to the adverse effect on profitability or financial condition arising from different sources of uncertainty, including retail and wholesale credit risk, market risk, non- traded market risk, operational risk, insurance risk, concentration risk, capital risk, liquidity and funding risk, litigation risk, conduct risk, reputational risk, strategic risk, pension risk and regulatory risk. While we employ a broad and diversified set of risk monitoring and mitigation techniques, such methods and the judgements that accompany their application cannot anticipate every unfavourable event or the specifics and timing of every outcome. Failure to manage risks appropriately could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position, strategy and reputation. 164 HSBC Holdings plc Annual Report on Form 20-F Risk review Risks related to our business Our business has inherent reputational risk Reputational risk is the risk of failing to meet stakeholder expectations as a result of any event, behaviour, action or inaction, either by HSBC, our employees or those with whom we are associated. Any material lapse in standards of integrity, compliance, customer service or operating efficiency may represent a potential reputational risk. Stakeholder expectations constantly evolve, and so reputational risk is dynamic and varies between geographical regions, groups and individuals. In addition, our business faces increasing scrutiny in respect of ESG-related matters. If we fail to act responsibly, or to achieve our announced targets, commitments, goals or ambitions, in a number of areas, such as inclusion, climate, sustainability, workplace conduct, human rights, and support for local communities, our reputation and the value of our brand may be negatively affected. Social media and other broadcasting channels that facilitate communication with large audiences in short time frames and with minimal costs, may significantly enhance and accelerate the distribution and effect of damaging information and allegations. Reputational risk could also arise from negative public opinion about the actual, or perceived, manner in which we conduct our business activities, or our financial performance, as well as actual or perceived practices in banking and the financial services industry generally. Negative public opinion may adversely affect our ability to retain and attract customers, in particular, corporate and retail depositors, and to retain and motivate staff, and could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. Non-Financial risks are inherent in our business We are exposed to many types of non-financial risks that are inherent in our operations. Non-financial risk can be defined as the risk to HSBC of achieving its strategy or objectives as a result of inadequate or failed internal processes, people and systems, or from external events. It includes: breakdowns in processes or procedures, breaches of regulations or law, financial crime, financial reporting and tax errors, external events and systems failure or non-availability. These risks are also present when we rely on outside suppliers or vendors to provide services to us and our customers. These non-financial risks may result in financial losses to the Group and our customers, an adverse customer experience, reputational damage and potential litigation, regulatory proceedings, administrative action or other adversarial proceedings in any jurisdiction in which we operate, depending on the circumstances of the event. These could have a material adverse effect on our business, financial condition, results of operations, prospects, strategy and reputation. We rely on recruiting, retaining and developing appropriate senior management and skilled personnel Our continued success and implementation of our strategy depend in part on the retention of key members of our management team and wider employee base, and the availability of skilled management and personnel in each of our global businesses and global functions. The implementation of organisational changes and ongoing talent and capability shortages in key markets, particularly where those with the specialist skills are required to be globally mobile, add to the complexity of our supply challenge. This challenge is also increased by rapidly changing skill requirements and ways of working, the evolving regulatory landscape and increased requirements and expectations regarding the employment of local nationals and inclusion in some jurisdictions. HSBC’s ability to continue to attract, train, motivate and retain highly qualified professionals may also depend on factors beyond our control, including economic, market and regulatory conditions. In addition, the Group has an ambition to increase our Black heritage senior leader representation in both the UK and US combined to 3.4% by 2025. If the Group fails to achieve these ambitions, its ability to attract and retain qualified professionals may be negatively affected. When we acquire or dispose of a Group operation, we need to ensure that we comply with any employment requirements, provide support to affected employees,and integrate new employees into HSBC‘s Values, culture and ways of working. If global businesses or global functions fail to staff their operations appropriately or lose one or more of their key senior executives and fail to successfully replace them in a satisfactory and timely manner, or fail to implement successfully the organisational changes required to support the Group’s strategy, our business, financial condition, results of operations, prospects and reputation, including control and operational risks, could be materially adversely affected. We have significant exposure to counterparty risk We are exposed to counterparties that are involved in virtually all major industries, and we routinely execute transactions with counterparties in financial services, including brokers and dealers, central clearing counterparties, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. Many of these transactions expose us to credit risk in the event of default by our counterparty or client. Our ability to engage in routine transactions to fund our operations and manage our risks could be materially adversely affected by the actions and commercial soundness of other financial services institutions. Financial institutions are necessarily interdependent because of trading, clearing, counterparty or other relationships. As a consequence, a default by, or decline in market confidence in, individual institutions, or anxiety about the financial services industry generally, can lead to further individual and/or systemic difficulties, defaults and losses. Mandatory central clearing of OTC derivatives poses risks to the Group. As a clearing member, we are required to underwrite losses incurred at a central counterparty by the default of other clearing members and their clients. Increased moves towards central clearing brings with it a further element of interconnectedness between clearing members and clients that we believe may increase rather than reduce our exposure to systemic risk. At the same time, our ability to manage such risk ourselves will be reduced because control has been largely outsourced to central counterparties, and it is unclear at present how, at a time of stress, regulators and resolution authorities will intervene. Where bilateral counterparty risk has been mitigated by taking collateral, our credit risk may remain high if the collateral we hold cannot be realised or has to be liquidated at prices that are insufficient to recover the full amount of our loan or derivative exposure. There is a risk that collateral cannot be realised, including situations where this arises by change of law, or the imposition of sanctions that may influence our ability to foreclose on collateral or otherwise enforce contractual rights. The Group also has credit exposure arising from mitigants, such as credit default swaps, and other credit derivatives, each of which is carried at fair value. The risk of default by counterparties to credit default swaps and other credit derivatives used as mitigants affects the fair value of these instruments depending on the valuation and the perceived credit risk of the underlying instrument against which protection has been purchased. Any such adjustments or fair value changes could have a material adverse effect on our business, financial condition, results of operations, prospects, capital position and reputation. HSBC Holdings plc Annual Report on Form 20-F 165 Any reduction in the credit rating assigned to HSBC Holdings, any subsidiaries of HSBC Holdings or any of their respective debt securities could increase the cost or decrease the availability of our funding and materially adversely affect our liquidity position and/or net interest margin Credit ratings affect the cost and other terms upon which we are able to obtain market funding. Rating agencies regularly evaluate HSBC Holdings and certain of its subsidiaries, as well as their respective debt securities. Their ratings are based on a number of factors, including their assessment of the relative financial strength of the Group or of the relevant subsidiary, as well as conditions affecting the financial services industry generally. There can be no assurance that the rating agencies will maintain HSBC Holdings’ or the relevant subsidiary’s current ratings or outlook based on bank rating methodologies applied by ratings agencies. Any reductions in these current ratings or the outlook could increase the cost of our funding, limit access to capital markets and require additional collateral to be placed and, consequently, materially adversely affect our interest margins and our liquidity position. Risks concerning borrower credit quality are inherent in our businesses Risks arising from changes in credit quality and the recoverability of loans and amounts due from borrowers and counterparties (for example, reinsurers and counterparties in derivative transactions) are inherent in a wide range of our businesses. Adverse changes in the credit quality of our borrowers and counterparties arising from a general deterioration in economic conditions or systemic risks in the financial systems, including uncertainties driven by significant macroeconomic and policy changes that might be enacted by the new US administration could reduce the recoverability and value of our assets, and require an increase in our ECLs (see 'Economic and market conditions and geopolitical developments may adversely affect our financial condition and results’). We estimate and recognise ECLs in our credit exposure. This process, which is critical to our results and financial condition, requires difficult, subjective and complex judgements, including forecasts of how the macroeconomic and geopolitical conditions, including the impact of higher US tariff rates, retaliatory actions, and sector or portfolio specific risks, might impair the ability of our borrowers to repay their loans and the ability of other counterparties to meet their obligations. This assessment considers multiple alternative forward-looking economic conditions (including GDP estimates) and incorporates this into the ECL estimates to meet the measurement objective of IFRS 9. As is the case with any such assessments, we may fail to estimate accurately the effect of factors that we identify or fail to identify relevant factors. Further, the information we use to assess the creditworthiness of our counterparties may be inaccurate or incorrect. Any failure by us to accurately estimate the ability of our counterparties to meet their obligations could have a material adverse effect on our business, financial condition, results of operations and prospects. Our insurance businesses are subject to risks relating to insurance claim rates and changes in insurance customer behaviour We provide various insurance products for customers, including several types of life insurance products. The cost of claims and benefits can be influenced by many factors, including mortality and morbidity rates, lapse and surrender rates and, if the policy has a savings element, the performance of assets to support the liabilities. Adverse developments in any of these factors could materially adversely affect our business, financial condition, results of operations capital position, prospects and reputation. HSBC Holdings is a holding company and, as a result, is dependent on loan/ instrument payments and dividends from its subsidiaries to meet its obligations, including obligations with respect to its debt securities, and to provide profits for payment of future dividends to shareholders HSBC Holdings is a non-operating holding company and, as such, its principal source of income is from operating subsidiaries that hold the principal assets of the Group. As a separate legal entity, HSBC Holdings relies on remittance of its subsidiaries’ loan/instrument interest payments and dividends in order to be able to pay obligations to debt holders as they fall due, and to pay dividends to its shareholders. The ability of HSBC Holdings’ subsidiaries and affiliates to pay interest and dividends to HSBC Holdings is subject to such subsidiaries’ and affiliates’ financial performance and could also be restricted by applicable laws, regulations, exchange controls and other requirements. We may be required to make substantial contributions to our pension plans We operate a number of pension plans throughout the world for our personnel, including defined benefit pension plans. Pension scheme obligations fluctuate with changes in long-term interest rates, inflation, salary levels and the longevity of scheme members. They can also be affected by operational and legal risks. The level of contributions we make to our pension plans has a direct effect on our cash flow. To the extent plan assets are insufficient to cover existing liabilities, higher levels of contributions may be required. As a result, deficits in those pension plans could have a material adverse effect on our business, financial condition, results of operations, prospects and reputation. 166 HSBC Holdings plc Annual Report on Form 20-F Risk review Risk related to our financial statements and accounts Our financial statements are based in part on judgements, estimates and assumptions that are subject to uncertainty The preparation of financial information requires management to make judgements and use estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Due to the inherent uncertainty in making estimates, particularly those involving the use of complex models, actual results reported in future periods could differ from those on which management’s estimates are based. Judgements, estimates, assumptions and models are continually evaluated, and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the prevailing circumstances. The impacts of revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Accounting policies deemed critical to our results and financial position are those that involve a high degree of uncertainty and have a material impact on the financial statements. In 2024 these included impairment of amortised cost financial assets and financial assets measured at FVOCI, impairment of goodwill and non-financial assets, valuation of financial instruments, deferred tax assets, provisions, impairment of interests in associates, post-employment benefit plans, and impairment of investments in subsidiaries, which are discussed in detail in ‘Critical estimates and judgements’ on page 86 . The measurement of ECLs requires the selection and calibration of complex models and the use of estimates and assumptions to incorporate relevant information about past events, current conditions and forecasts of economic conditions. Additionally, significant judgement is involved in determining what is considered to be significant increases in credit risk and what the point of initial recognition is for revolving facilities. The assessment of whether goodwill and non-financial assets are impaired, and the measurement of any impairment, involves the application of judgement in determining key assumptions, including discount rates, estimated cash flows for the periods for which detailed cash flows are available and projecting the long-term pattern of sustainable cash flows thereafter. The recognition and measurement of deferred tax assets involves significant judgement regarding the probability and sufficiency of future taxable profits, taking into account the future reversal of existing taxable temporary differences and tax planning strategies, including corporate reorganisations. The recognition and measurement of provisions involve significant judgements due to the high degree of uncertainty in determining whether a present obligation exists, and in estimating the probability and amount of any outflows that may arise. The valuation of financial instruments measured at fair value can be subjective, in particular where models are used that include unobservable inputs. The assessment of interests in associates for impairment involves significant judgements in determining the value in use, in particular estimating the present values of cash flows expected to arise from continuing to hold the investment, based on a number of management assumptions. At 31 December 2023, we performed an impairment review of our investment in BoCom and concluded an impairment charge needed to be taken in the fourth quarter of 2023. Impairment review included consideration of the potential impact of BoCom’s designation as a globally systemically important bank in November 2023. The impairment reviews are complex and require significant judgments, such as the appropriateness of projected future cash flows, discount rate and regulatory capital assumptions. At 31 December 2024 a further impairment review was conducted and we concluded that no additional impairment (or reversal of impairment) was required. However, there can be no assurance that no additional impairment will be required in future financial periods. Refer to Note 18 on the Financial Statements for further details. The calculation of the defined benefit pension obligation involves the determination of key assumptions, including discount rate, inflation rate, pension payments and deferred pension and pay and mortality. Given the uncertainty and subjectivity associated with the above critical accounting judgements and estimates, future outcomes may differ materially from those assumed using information available at the reporting date. The assessment of interests in subsidiaries for impairment involves significant judgements in determining the value in use, in particular estimating the present values of cash flows expected to arise from continuing to hold the investment, based on a number of management assumptions. These judgements and estimates could have a material adverse effect on the future financial position of the Group, results of operations, capital position, prospects and reputation. For further details, see ‘Critical estimates and judgements’ on page 86 . Changes in accounting standards may have a material impact on how we report our financial results and financial condition We prepare our consolidated financial statements in conformity with UK-adopted international accounting standards and with the requirements of the UK Companies Act 2006, and have also applied international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. Our consolidated financial statements are also prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB‘) (‘IFRS Accounting Standards’), including interpretations issued by the IFRS Interpretations Committee. From time to time, the IASB or the IFRS Interpretations Committee may issue new accounting standards or interpretations that could materially impact how we calculate, report and disclose our financial results and financial condition, and which may affect our capital ratios, including the CET1 ratio. We could also be required to apply new or revised standards retrospectively, resulting in our restating prior period financial statements in material amounts. This could have a material adverse effect on our business, financial condition, results of operations and capital position. HSBC Holdings plc Annual Report on Form 20-F 167 Our material banking risks The material risk types associated with our banking and insurance manufacturing operations are described in the following tables: Description of risks – banking operations Risks Arising from Measurement, monitoring and management of risk Credit risk See page 169 Credit risk is the risk of financial loss if a customer or counterparty fails to meet an obligation under a contract. Credit risk arises principally from direct lending, trade finance and leasing business, but also from other products such as guarantees and derivatives. Credit risk is: – measured as the amount that could be lost if a customer or counterparty fails to make repayments; – monitored using various internal risk management measures and within limits approved by individuals within a framework of delegated authorities; and – managed through a risk control framework, which outlines clear and consistent policies, principles and guidance for risk managers; and by setting limits and appetite across geographical markets, portfolios or sectors. Treasury risk See page 230 Treasury risk is the risk of having insufficient capital, liquidity or funding resources to meet financial obligations and satisfy regulatory requirements, including the risk of an adverse impact on earnings or capital due to structural and transactional foreign exchange exposures and changes in market interest rates, together with pension and insurance risk. Treasury risk arises from changes to the respective resources and risk profiles driven by customer behaviour, management decisions or the external environment. Treasury risk is: – measured through risk appetite and more granular limits, set to provide an early warning of increasing risk, minimum ratios of relevant regulatory metrics, and metrics to monitor the key risk drivers impacting treasury resources; – monitored and projected against appetites and by using operating plans based on strategic objectives together with stress and scenario testing; and – managed through control of resources in conjunction with risk profiles, strategic objectives and cash flows. Market risk See page 246 Market risk is the risk of an adverse financial impact on trading activities arising from changes in market parameters such as interest rates, foreign exchange rates, asset prices, volatilities, correlations and credit spreads. Market risk arises from both trading portfolios and non-trading portfolios. Market risk for non-trading portfolios is discussed in the Treasury risk section on page 242 . Market risk exposures arising from our insurance operations are discussed on page 263 . Market risk is: – measured using sensitivities, value at risk and stress testing, giving a detailed picture of potential gains and losses for a range of market movements and scenarios, as well as tail risks over specified time horizons; – monitored using value at risk, stress testing and other measures; and – managed using risk limits approved by the Group Risk Management Meeting and the risk management meetings in various global businesses. Climate risk See page 249 Climate risk relates to the financial and non-financial impacts that may arise as a result of climate change and the move to a net zero economy. Climate risk can materialise through: – physical risk, which arises from the increased frequency and severity of weather events; – transition risk, which arises from the process of moving to a net zero economy; – net zero alignment risk, which arises from failing to meet our net zero ambition or to meet external expectations related to net zero; and – the risk of greenwashing, which arises from the act of knowingly or unknowingly making inaccurate, unclear, misleading or unsubstantiated claims regarding sustainability to stakeholders. Climate risk is: – measured using risk metrics and stress testing; – monitored against risk appetite statements; and – managed through adherence to risk appetite thresholds, through specific policies, and through enhancements to processes and development of tools including the development of product market controls to manage the risk of greenwashing and the development of portfolio steering capabilities to manage our net zero ambitions. Resilience risk See page 258 Resilience risk is the risk of sustained and significant business disruption from execution, delivery, physical security or safety events, causing the inability to provide critical services to our customers, affiliates, and counterparties. Resilience risk arises from failures or inadequacies in processes, people, systems or external events. Resilience risk is: – measured using a range of metrics and against our agreed risk appetite; – monitored through oversight of enterprise processes, risks, controls and strategic change programmes; and – managed by continual monitoring and thematic reviews. 168 HSBC Holdings plc Annual Report on Form 20-F Risk review Description of risks – banking operations (continued) Risks Arising from Measurement, monitoring and management of risk Regulatory compliance risk See page 259 Regulatory compliance risk is the risk associated with breaching our duty to clients and other counterparties, inappropriate market conduct (including unauthorised trading) and breaching related financial services regulatory standards. Regulatory compliance risk arises from the failure to observe relevant laws, codes, rules and regulations and can manifest itself in poor market or customer outcomes and lead to fines, penalties and reputational damage to our business. Regulatory compliance risk is: – measured by reference to risk appetite, identified metrics, incident assessments, regulatory feedback and the judgement and assessment of our regulatory compliance teams; – monitored against the first line of defence risk and control assessments, and the results of the monitoring and control assurance activities of the second line of defence functions; and – managed by establishing and communicating appropriate policies and procedures, training employees in them and monitoring activity to help embed their observance. Proactive risk control and/or remediation work is undertaken where required. Financial crime risk See page 259 Financial crime risk is the risk that HSBC’s products and services will be exploited for criminal activity. This includes fraud, bribery and corruption, tax evasion, sanctions and export control violations and evasion, money laundering, terrorist financing and proliferation financing. Financial crime risk arises from day-to-day banking operations involving customers, third parties and employees. Financial crime risk is: – measured by reference to risk appetite, identified metrics, incident assessments, regulatory feedback and the judgement of, and assessment by, our financial crime teams; – monitored against the first line of defence risk and control assessments, and the results of the monitoring and control assurance activities of the second line of defence functions; and – managed by establishing and communicating appropriate policies and procedures, training employees and monitoring activity to help embed their observance. Proactive risk control and/or remediation work is undertaken where required. Model risk See page 260 Model risk is the risk of the potential for adverse consequences from model errors or the inappropriate use of modelled outputs to inform business decisions. Model risk arises in both financial and non- financial contexts whenever business decision making includes reliance on models. Model risk is: – measured by reference to model performance tracking and the output of detailed technical reviews and regulatory feedback, with key metrics including model review statuses and findings; – monitored against model risk appetite statements, insight from the independent validations completed by the model risk management team; and – managed by creating and communicating appropriate policies, procedures and guidance, training colleagues in their application, and supervising their adoption to help ensure operational effectiveness. Our insurance manufacturing subsidiaries are regulated separately from our banking operations. Risks in our insurance entities are managed using methodologies and processes that are subject to Group oversight. Our insurance operations are also subject to many of the same risks as our banking operations, and these are covered by the Group’s risk management processes. However, there are specific risks inherent to the insurance operations as noted below. Description of risks – insurance manufacturing operations Risks Arising from Measurement, monitoring and management of risk Financial risk See page 263 For insurance entities, financial risk includes the risk of not being able to effectively match liabilities arising under insurance contracts with appropriate investments and that the expected sharing of financial performance with policyholders under certain contracts is not possible. Exposure to financial risk arises from: – market risk affecting the fair values of financial assets or their future cash flows; – credit risk; and – liquidity risk of entities being unable to make payments to policyholders as they fall due. Financial risk is: – measured for credit risk, in terms of economic capital and the amount that could be lost if a counterparty fails to make repayments; for market risk, in terms of economic capital, internal metrics and fluctuations in key financial variables; and for liquidity risk, in terms of internal metrics including stressed operational cash flow projections; – monitored through a framework of approved limits and delegated authorities; and – managed through a risk control framework, which outlines clear and consistent policies, principles and guidance. This includes using product design, asset liability matching and bonus rates. Insurance risk See page 265 Insurance risk is the risk that, over time, the cost of insurance policies written, including claims and benefits, may exceed the total amount of premiums and investment income received. The cost of claims and benefits can be influenced by many factors, including mortality and morbidity experience, as well as lapse and surrender rates. Insurance risk is: – measured in terms of life insurance liabilities and economic capital allocated to insurance underwriting risk; – monitored through a framework of approved limits and delegated authorities; and – managed through a risk control framework, which outlines clear and consistent policies, principles and guidance. This includes using product design, underwriting, reinsurance and claims-handling procedures. HSBC Holdings plc Annual Report on Form 20-F 169 Credit risk Contents 169 Overview 169 Credit risk management 171 Credit risk in 2024 172 Summary of credit risk 175 Stage 2 decomposition 176 Assets held for sale 177 Credit exposure 178 Measurement uncertainty and sensitivity analysis of ECL estimates 191 Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees 196 Credit quality 200 Wholesale lending 214 Personal lending 225 Supplementary information 229 HSBC Holdings Overview Credit risk is the risk of financial loss if a customer or counterparty fails to meet an obligation under a contract. Credit risk arises principally from direct lending, trade finance and leasing business, but also from other products such as guarantees and derivatives. Credit risk management Key developments in 2024 There were no material changes to the policies and practices for the management of credit risk in 2024 . We continued to apply the requirements of IFRS 9 ‘Financial Instruments’ within the Credit Risk sub-function. We actively managed the risks related to macroeconomic uncertainties, including interest rates, inflation, fiscal and monetary policy, broader geopolitical uncertainties and conflicts. For further details, see ‘Top and emerging risks’ on page 148 . Governance and structure We have established Group-wide credit risk management and related IFRS 9 processes. We continue to assess the impact of economic developments in key markets on specific customers, customer segments or portfolios. As credit conditions change, we take mitigating actions, including the revision of risk appetites or limits and tenors, as appropriate. In addition, we continue to evaluate the terms under which we provide credit facilities within the context of individual customer requirements, the quality of the relationship, local regulatory requirements, market practices and our local market position. Credit Risk sub-function (Audited) Credit approval authorities are delegated by the Board to the Group CEO together with the authority to sub-delegate them. The Credit Risk sub-function in Group Risk and Compliance is responsible for the key policies and processes for managing credit risk, which include formulating Group credit policies and risk rating frameworks, guiding the Group’s appetite for credit risk exposures, undertaking independent reviews and objective assessment of credit risk, and monitoring performance and management of portfolios. The principal objectives of our credit risk management are: – to maintain across HSBC a strong culture of responsible lending, and robust risk policies and control frameworks; – to both partner and challenge our businesses in defining, implementing and continually re-evaluating our risk appetite under actual and scenario conditions; and – to ensure there is independent, expert scrutiny of credit risks, their costs and their mitigation. Key risk management processes IFRS 9 ‘Financial Instruments’ process The IFRS 9 process comprises three main areas: modelling, data and forward economic guidance; implementation; and governance. Modelling, data and forward economic guidance We have established IFRS 9 modelling and data processes in various geographies, which are subject to internal model risk governance including independent review of significant model developments. We have a centralised process for generating unbiased and independent global economic scenarios. Scenarios are subject to a process of review and challenge by a dedicated central team and individually for each region. Each quarter, the scenarios and probability weights are reviewed and checked for consistency with the economic conjuncture and current economic and financial risks. These are subject to final review and approval by senior management in a forward economic guidance global business impairment committee. Implementation A centralised impairment engine performs the expected credit losses calculation using data, which is subject to a number of validation checks and enhancements, from a variety of client, finance and risk systems. Where possible, these checks and processes are performed in a globally consistent and centralised manner. Governance Regional management review forums are established in key sites and regions in order to review and approve the impairment results. Regional management review forums have representatives from Credit Risk and Finance. The key site and regional approvals are reported up to the relevant global business impairment committee for final approval of the Group’s ECL for the period. Required members of the committee are the Wholesale Global Chief Corporate Credit Officer and Chief Risk and Compliance Officer for Wealth and Personal Banking Risk, as well as the relevant global business’s Chief Financial Officer and the Global Financial Controller. Concentration of exposure (Audited) Concentrations of credit risk arise when a number of counterparties or exposures have comparable economic characteristics, or such counterparties are engaged in similar activities or operate in the same geographical areas or industry sectors so that their collective ability to meet contractual obligations is similarly affected by changes in economic, political or other conditions. We use a number of controls and measures to minimise undue concentration of exposure in our portfolios across industries, countries and global businesses. These include portfolio and counterparty limits, approval and review controls, and stress testing. C redit quality of financial instruments (Audited) Our risk rating system facilitates the internal ratings-based approach under the Basel framework adopted by the Group to support the calculation of our minimum credit regulatory capital requirement. The five credit quality classifications encompass a range of granular internal credit rating grades assigned to wholesale and retail 170 HSBC Holdings plc Annual Report on Form 20-F Risk review customers, and the external ratings attributed by external agencies to debt securities. For debt securities and certain other financial instruments, external ratings have been aligned to the five quality classifications based upon the mapping of related customer risk rating (‘CRR’) to external credit rating. Wholesale lending The CRR 10-grade scale summarises a more granular underlying 23-grade scale of obligor probability of default (‘PD’). All corporate customers are rated using the 10- or 23-grade scale, depending on the degree of sophistication of the Basel approach adopted for the exposure. Each CRR band is associated with an external rating grade by reference to long-run default rates for that grade, represented by the average of issuer-weighted historical default rates. This mapping between internal and external ratings is indicative and may vary over time. Retail lending Retail lending credit quality is based on a 12-month point-in-time probability-weighted PD. Credit quality classification Sovereign debt securities and bills Other debt securities and bills Wholesale lending and derivatives Retail lending External credit rating External credit rating Internal credit rating 12-month Basel probability of default % Internal credit rating 12 month probability- weighted PD % Quality classification 1,2 Strong BBB and above A- and above CRR 1 to CRR 2 0–0.169 Band 1 and 2 0.000–0.500 Good BBB- to BB BBB+ to BBB- CRR 3 0.170–0.740 Band 3 0.501–1.500 Satisfactory BB- to B and unrated BB+ to B and unrated CRR 4 to CRR 5 0.741–4.914 Band 4 and 5 1.501–20.000 Sub-standard B- to C B- to C CRR 6 to CRR 8 4.915–99.999 Band 6 20.001–99.999 Credit impaired Default Default CRR 9 to CRR 10 100 Band 7 100 1 Customer risk rating (‘CRR’). 2 12-month point-in-time probability-weighted probability of default (‘PD’). Quality classification definitions – ‘Strong’ exposures demonstrate a strong capacity to meet financial commitments, with negligible or low probability of default and/or low levels of expected loss. – ‘Good’ exposures require closer monitoring and demonstrate a good capacity to meet financial commitments, with low default risk. – ‘Satisfactory’ exposures require closer monitoring and demonstrate an average-to-fair capacity to meet financial commitments, with moderate default risk. – ‘Sub-standard’ exposures require varying degrees of special attention and default risk is of greater concern. – ‘Credit-impaired’ exposures have been assessed as described in Note 1.2(i) to the financial statements. Forborne loans and advances (Audited) Forbearance measures consist of concessions towards an obligor that is experiencing or about to experience difficulties in meeting its financial commitments. We continue to class loans as forborne when we modify the contractual payment terms due to having concerns about the borrowers’ ability to meet contractual payments when they were due. Our definition of forborne captures non-payment-related concessions, such as covenant waivers. For details of our policy on forbearance, see Note 1.2(i) in the financial statements . Credit quality of forborne loans For wholesale lending, where payment-related forbearance measures result in a diminished financial obligation, or if there are other indicators of impairment, the loan will be classified as credit impaired if it is not already so classified. All facilities with a customer, including loans that have not been modified, are considered credit impaired following the identification of a payment-related forborne loan. For retail lending, where a material payment-related concession has been granted, the loan will be classified as credit impaired. In isolation, non- payment related forbearance measures may not result in the loan being classified as credit impaired unless combined with other indicators of credit impairment. These are classed as performing forborne loans for both wholesale and retail lending. Wholesale and retail lending forborne loans are classified as credit impaired until there is sufficient evidence to demonstrate a significant reduction in the risk of non-payment of future cash flows, observed over a minimum one-year period, and there are no other indicators of impairment. Any forborne loans not considered credit impaired will remain forborne for a minimum of two years from the date that credit impairment no longer applies. For wholesale and retail lending, any forbearance measures granted on a loan already classed as forborne results in the customer being classed as credit impaired. Forborne loans and recognition of expected credit lo sses (Audited) Forborne loans expected credit loss assessments reflect the higher rates of losses typically experienced with these types of loans such that they are in stage 2 and stage 3. The higher rates are more pronounced in unsecured retail lending requiring further segmentation. For wholesale lending, forborne loans are typically assessed individually. Credit risk ratings are intrinsic to the impairment assessments. The individual impairment assessment takes into account the higher risk of the future non-payment inherent in forborne loans. Impairment assessment (Audited) For details of our impairment policies on loans and advances and financial investments, see Note 1.2(i) on the financial statements. HSBC Holdings plc Annual Report on Form 20-F 171 Write-off of loans and advances (Audited) Under IFRS 9, write-off should occur when there is no reasonable expectation of recovering further cash flows from the financial asset. This principle does not prohibit early write-off, which is defined in local policies to ensure effectiveness in the management of customers in the collections process. Unsecured personal facilities, including credit cards, are generally written off at between 150 and 210 days past due. The standard period runs until the end of the month in which the account becomes 180 days contractually delinquent. However, in exceptional circumstances, to avoid unfair customer outcomes, deliver customer duty or meet regulatory expectations, the period may be extended further. For secured facilities, write-off should occur upon repossession of collateral, receipt of proceeds via settlement, or determination that recovery of the collateral will not be pursued. Where these assets are maintained on the balance sheet beyond 60 months of consecutive delinquency-driven default, the prospect of recovery is reassessed. Recovery activity, on both secured and unsecured assets, may continue after write-off. Any unsecured exposures that are not written off at 180 days past due, and any secured exposures that are in ‘default’ status for 60 months or greater but are not written off, are subject to additional monitoring via the appropriate governance forums. Credit risk in 2024 At 31 December 2024 , gross loans and advances to banks and customers of $1,042bn decreased by $20.1bn on a reported basis compared with 31 December 2023 . Gross loans and advances to customers decreased by $9.2bn while gross loans and advances to banks decreased by $10.9bn. This included total adverse foreign exchange movements of $26.2bn. On a constant currency basis, the increase of $6.1bn was driven by a $9.6bn rise in personal loans and advances to customers and a $3.0bn rise in wholesale loans and advances to customers. These were partly offset by a $6.5bn decrease in loans and advances to banks. The rise in personal loans and advances to customers was driven by mortgage growth (up $7.5bn), mainly in HSBC UK (up $4.5bn), in our legal entities in the US (up $2.7bn) and in Mexico (up $0.3bn). There was a further increase in other personal lending (up $2.1bn), mainly in our entities in Europe (up $1.1bn) and in Asia (up $1.0bn). The rise in wholesale loans and advances to customers was driven by an increase in balances with non-bank financial institutions (up $9.6bn), mainly in HSBC Bank plc (up $4.2bn) and in our legal entities in Asia (up $2.2bn), in the US (up $1.2bn), in HSBC UK (up $1.0bn) and in the Middle East (up $0.8bn). This was partly offset by a $6.6bn reduction in corporate and commercial balances, observed mainly in our legal entities in the US (down $2.9bn) and in Asia (down $2.4bn). The decrease in loans and advances to banks was driven by lower central bank balances and money market lending balances in our legal entities in Asia (down $9.1bn), partly offset by higher balances in our legal entities in the Middle East (up $3.6bn). The movement in gross loans and advances to banks and customers included a $3.1bn decrease on a constant currency basis due to the reclassification of businesses into 'assets held for sale' during the period. At 31 December 2024 , the allowance for ECL of $10.3bn decreased by $1.7bn compared with 31 December 2023 , including favourable foreign exchange movements of $0.5bn. The $10.3bn allowance comprised $9.8bn in respect of assets held at amortised cost, $0.4bn in respect of loan commitments and financial guarantees, and $0.1bn in respect of debt instruments measured at fair value through other comprehensive income (‘FVOCI’). On a constant currency basis, stage 3 gross loans and advances to customers at 31 December 2024 increased by $3.9bn. The increase in stage 3 exposures was driven by defaults in the commercial real estate portfolio in Hong Kong, which are generally well collateralised. There was a decrease in the associated allowance for ECL due to write-offs of heavily-impaired exposures. On a constant currency basis, the allowance for ECL in relation to loans and advances to customers decreased by $0.9bn from 31 December 2023 . This was attributable to: – a $0.8bn decrease in wholesale loans and advances to customers, which included a $0.7bn decrease in stage 3 and a $0.1bn decrease in stages 1 and 2; and – a $0.1bn decrease in personal loans and advances to customers driven by stages 1 and 2. The ECL charge for 2024 was $3.4bn, inclusive of recoveries. The ECL charge comprised: $2.1bn in respect of wholesale lending, of which the stage 3 charge was $1.6bn; $1.2bn in respect of personal lending, of which $0.9bn were in stage 3; and $0.1bn in respect of other assets and debt instruments measured at FVOCI. Wholesale lending charges were recognised mainly in our legal entities in Hong Kong ($1.0bn). While the mainland China commercial real estate sector remained subdued, there were limited new defaults and lower total ECL charges of $0.4bn during the period ($1.0bn during 2023). ECL charges in the Hong Kong commercial real estate sector excluding exposure to mainland China borrowers of $0.1bn during the period were also low due to the limited impact from defaults, driven by the high level of collateralisation in the portfolio. Personal lending charges reflected higher charges in our legal entity in Mexico, mainly in our unsecured portfolio, due to portfolio growth and unemployment trends. In addition, there were higher charges in our legal entities in the UK and Hong Kong as a result of portfolio growth. At 31 December 2024 , gross other financial assets measured at amortised cost of $828.6bn decreased by $131.7bn on a reported basis compared with 31 December 2023 . This included total adverse foreign exchange movements of $30.7bn. On a constant currency basis, the decrease of $101.0bn was mainly driven by a $91.9bn decrease in assets held for sale, due to the completion of the disposals of our banking business in Canada and our retail banking operations in France. Income statement movements are analysed further on page 88 . While credit risk arises across most of our balance sheet, ECL have typically been recognised on loans and advances to customers and banks, in addition to securitisation exposures and other structured products. As a result, our disclosures focus primarily on these two areas. For further details of: – maximum exposure to credit risk, see page 178 ; – measurement uncertainty and sensitivity analysis of ECL estimates, see page 178 ; – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees, see page 191 ; – credit quality, see page 196 ; – total wholesale lending for loans and advances to banks and customers by stage distribution, see page 201 ; – wholesale lending collateral, see page 211 ; – total personal lending for loans and advances to customers at amortised cost by stage distribution, see page 215 ; and – personal lending collateral, see page 224 . 172 HSBC Holdings plc Annual Report on Form 20-F Risk review Summary of credit risk The following disclosure presents the gross carrying/nominal amount of financial instruments to which the impairment requirements in IFRS 9 are applied and the associated allowance for ECL. Summary of financial instruments to which the impairment requirements in IFRS 9 are applied (Audited) 31 Dec 2024 At 31 Dec 2023 Gross carrying/ nominal amount Allowance for ECL 1 Gross carrying/ nominal amount Allowance for ECL 1 $m $m $m $m Loans and advances to customers at amortised cost 940,373 ( 9,715 ) 949,609 ( 11,074 ) Loans and advances to banks at amortised cost 102,052 ( 13 ) 112,917 ( 15 ) Other financial assets measured at amortised cost 828,580 ( 92 ) 960,271 ( 422 ) –  cash and balances at central banks 267,674 — 285,868 — –  Hong Kong Government certificates of indebtedness 42,293 — 42,024 — –  reverse repurchase agreements – non-trading 252,549 — 252,217 — –  financial investments 153,982 ( 9 ) 148,346 ( 20 ) –  assets held for sale 2 3,273 ( 4 ) 103,186 ( 324 ) –  prepayments, accrued income and other assets 3 108,809 ( 79 ) 128,630 ( 78 ) Total gross carrying amount on-balance sheet 1,871,005 ( 9,820 ) 2,022,797 ( 11,511 ) Loans and other credit-related commitments 619,367 ( 348 ) 661,015 ( 367 ) Financial guarantees 16,998 ( 29 ) 17,009 ( 39 ) Total nominal amount off-balance sheet 4 636,365 ( 377 ) 678,024 ( 406 ) 2,507,370 ( 10,197 ) 2,700,821 ( 11,917 ) Fair value Memorandum allowance for ECL 5 Fair value Memorandum allowance for ECL 5 $m $m $m $m Debt instruments measured at fair value through other comprehensive income (‘FVOCI’) 346,124 ( 54 ) 302,348 ( 97 ) 1 The total ECL is recognised in the loss allowance for the financial asset unless the total ECL exceeds the gross carrying amount of the financial asset, in which case the ECL is recognised as a provision. 2 For further details on gross carrying amounts and allowances for ECL related to assets held for sale, see ‘Assets held for sale’ on page 176 . At 31 December 2024, the gross carrying amount comprised $ 1,113 m of loans and advances to customers and banks (2023: $ 84,075 m ) and $ 2,160 m of other financial assets at amortised cost (2023: $ 19,111 m ). The corresponding allowance for ECL comprised $ 4 m of loans and advances to customers and banks (2023: $ 303 m ) and $ 0.3 m of other financial assets at amortised cost (2023: $ 21 m ). 3 Includes only those financial instruments that are subject to the impairment requirements of IFRS 9. ‘Prepayments, accrued income and other assets’ as presented within the consolidated balance sheet on page 365 comprises both financial and non-financial assets, including cash collateral and settlement accounts. It also includes ‘Items in the course of collection from other banks’ which was presented separately in 2023. 4 Represents the maximum amount at risk should the contracts be fully drawn upon and clients default. 5 Debt instruments measured at FVOCI continue to be measured at fair value with the allowance for ECL as a memorandum item. Change in ECL is recognised in ‘Change in expected credit losses and other credit impairment charges’ in the income statement. The following table provides an overview of the Group’s credit risk by stage and industry, and the associated ECL coverage. The financial assets recorded in each stage have the following characteristics: – Stage 1: These financial assets are unimpaired and without significant increase in credit risk on which a 12-month allowance for ECL is recognised. – Stage 2: A significant increase in credit risk has been experienced on these financial assets since initial recognition for which a lifetime ECL is recognised. – Stage 3: There is objective evidence of impairment and the financial assets are therefore considered to be in default or otherwise credit impaired on which a lifetime ECL is recognised. – POCI: Financial assets that are purchased or originated at a deep discount are seen to reflect the incurred credit losses on which a lifetime ECL is recognised. HSBC Holdings plc Annual Report on Form 20-F 173 Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 December 2024 (Audited) Gross carrying/nominal amount 1 Allowance for ECL ECL coverage % Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total $m $m $m $m $m $m $m $m $m $m % % % % % Loans and advances to customers at amortised cost 824,420 93,248 22,615 90 940,373 ( 1,078 ) ( 2,546 ) ( 6,040 ) ( 51 ) ( 9,715 ) 0.1 2.7 26.7 56.7 1.0 –  personal 403,746 39,919 3,560 — 447,225 ( 570 ) ( 1,158 ) ( 796 ) — ( 2,524 ) 0.1 2.9 22.4 — 0.6 –  corporate and commercial 340,987 51,231 18,376 90 410,684 ( 463 ) ( 1,358 ) ( 4,883 ) ( 51 ) ( 6,755 ) 0.1 2.7 26.6 56.7 1.6 –  non-bank financial institutions 79,687 2,098 679 — 82,464 ( 45 ) ( 30 ) ( 361 ) — ( 436 ) 0.1 1.4 53.2 — 0.5 Loans and advances to banks at amortised cost 101,852 198 2 — 102,052 ( 9 ) ( 2 ) ( 2 ) — ( 13 ) — 1.0 100.0 — — Other financial assets measured at amortised cost 826,621 1,806 153 — 828,580 ( 64 ) ( 5 ) ( 23 ) — ( 92 ) — 0.3 15.0 — — Loan and other credit-related commitments 597,231 21,175 958 3 619,367 ( 137 ) ( 121 ) ( 90 ) — ( 348 ) — 0.6 9.4 — 0.1 –  personal 251,489 1,680 86 — 253,255 ( 17 ) — ( 5 ) — ( 22 ) — — 5.8 — — –  corporate and commercial 231,201 17,453 838 3 249,495 ( 111 ) ( 116 ) ( 83 ) — ( 310 ) — 0.7 9.9 — 0.1 –  financial 114,541 2,042 34 — 116,617 ( 9 ) ( 5 ) ( 2 ) — ( 16 ) — 0.2 5.9 — — Financial guarantees 15,353 1,397 248 — 16,998 ( 8 ) ( 5 ) ( 16 ) — ( 29 ) 0.1 0.4 6.5 — 0.2 –  personal 1,416 11 — — 1,427 — — — — — — — — — — –  corporate and commercial 10,048 1,232 195 — 11,475 ( 7 ) ( 5 ) ( 15 ) — ( 27 ) 0.1 0.4 7.7 — 0.2 –  financial 3,889 154 53 — 4,096 ( 1 ) — ( 1 ) — ( 2 ) — — 1.9 — — At 31 Dec 2024 2,365,477 117,824 23,976 93 2,507,370 ( 1,296 ) ( 2,679 ) ( 6,171 ) ( 51 ) ( 10,197 ) 0.1 2.3 25.7 54.8 0.4 1 Represents the maximum amount at risk should the contracts be fully drawn upon and clients default. 2 Purchased or originated credit-impaired (‘POCI’). Unless identified at an earlier stage, all financial assets are deemed to have suffered a significant increase in credit risk when they are 30 days past due (‘DPD’) and are transferred from stage 1 to stage 2. The following disclosure presents the ageing of stage 2 financial assets by those less than 30 DPD and greater than 30 DPD and therefore presents those financial assets classified as stage 2 due to ageing (30 DPD) and those identified at an earlier stage (less than 30 DPD). Stage 2 days past due analysis at 31 December 2024 (Audited) Gross carrying amount Allowance for ECL ECL coverage % Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 $m $m $m $m $m $m $m $m % % % % Loans and advances to customers at amortised cost 93,248 90,157 1,888 1,203 ( 2,546 ) ( 2,147 ) ( 192 ) ( 207 ) 2.7 2.4 10.2 17.2 –  personal 39,919 37,676 1,361 882 ( 1,158 ) ( 799 ) ( 169 ) ( 190 ) 2.9 2.1 12.4 21.5 –  corporate and commercial 51,231 50,486 506 239 ( 1,358 ) ( 1,326 ) ( 21 ) ( 11 ) 2.7 2.6 4.2 4.6 –  non-bank financial institutions 2,098 1,995 21 82 ( 30 ) ( 22 ) ( 2 ) ( 6 ) 1.4 1.1 9.5 7.3 Loans and advances to banks at amortised cost 198 198 — — ( 2 ) ( 2 ) — — 1.0 1.0 — — Other financial assets measured at amortised cost 1,806 1,794 3 9 ( 5 ) ( 5 ) — — 0.3 0.3 — — 1 The days past due amounts presented above are on a contractual basis. 174 HSBC Holdings plc Annual Report on Form 20-F Risk review Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 December 2023 (Audited) Gross carrying/nominal amount 1 Allowance for ECL ECL coverage % Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total Stage 1 Stage 2 Stage 3 POCI 2 Total $m $m $m $m $m $m $m $m $m $m % % % % % Loans and advances to customers at amortised cost 809,384 120,871 19,273 81 949,609 ( 1,130 ) ( 2,964 ) ( 6,950 ) ( 30 ) ( 11,074 ) 0.1 2.5 36.1 37.0 1.2 –  personal 396,534 47,483 3,505 — 447,522 ( 579 ) ( 1,434 ) ( 854 ) — ( 2,867 ) 0.1 3.0 24.4 — 0.6 – corporate and commercial 342,878 69,738 14,958 81 427,655 ( 499 ) ( 1,500 ) ( 5,774 ) ( 30 ) ( 7,803 ) 0.1 2.2 38.6 37.0 1.8 –  non-bank financial institutions 69,972 3,650 810 — 74,432 ( 52 ) ( 30 ) ( 322 ) — ( 404 ) 0.1 0.8 39.8 — 0.5 Loans and advances to banks at amortised cost 111,479 1,436 2 — 112,917 ( 10 ) ( 3 ) ( 2 ) — ( 15 ) — 0.2 100.0 — — Other financial assets measured at amortised cost 946,873 12,734 664 — 960,271 ( 109 ) ( 132 ) ( 181 ) — ( 422 ) — 1.0 27.3 — — Loan and other credit- related commitments 630,949 28,922 1,140 4 661,015 ( 153 ) ( 128 ) ( 86 ) — ( 367 ) — 0.4 7.5 — 0.1 –  personal 253,183 3,459 355 — 256,997 ( 23 ) — ( 2 ) — ( 25 ) — — 0.6 — — –  corporate and commercial 246,210 20,928 736 4 267,878 ( 120 ) ( 119 ) ( 83 ) — ( 322 ) — 0.6 11.3 — 0.1 –  financial 131,556 4,535 49 — 136,140 ( 10 ) ( 9 ) ( 1 ) — ( 20 ) — 0.2 2.0 — — Financial guarantees 14,746 1,879 384 — 17,009 ( 7 ) ( 7 ) ( 25 ) — ( 39 ) — 0.4 6.5 — 0.2 –  personal 1,106 13 — — 1,119 — — — — — — — — — — –  corporate and commercial 10,157 1,290 330 — 11,777 ( 6 ) ( 6 ) ( 24 ) — ( 36 ) 0.1 0.5 7.3 — 0.3 –  financial 3,483 576 54 — 4,113 ( 1 ) ( 1 ) ( 1 ) — ( 3 ) — 0.2 1.9 — 0.1 At 31 Dec 2023 2,513,431 165,842 21,463 85 2,700,821 ( 1,409 ) ( 3,234 ) ( 7,244 ) ( 30 ) ( 11,917 ) 0.1 2.0 33.8 35.3 0.4 1 Represents the maximum amount at risk should the contracts be fully drawn upon and clients default. 2 Purchased or originated credit-impaired (‘POCI’). Stage 2 days past due analysis at 31 December 2023 (Audited) Gross carrying amount Allowance for ECL ECL coverage % Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 Stage 2 Up-to- date 1 to 29 DPD 1 30 and > DPD 1 $m $m $m $m $m $m $m $m % % % % Loans and advances to customers at amortised cost 120,871 116,320 2,571 1,980 ( 2,964 ) ( 2,458 ) ( 245 ) ( 261 ) 2.5 2.1 9.5 13.2 –  personal 47,483 44,634 1,785 1,064 ( 1,434 ) ( 974 ) ( 214 ) ( 246 ) 3.0 2.2 12.0 23.1 –  corporate and commercial 69,738 68,446 697 595 ( 1,500 ) ( 1,454 ) ( 31 ) ( 15 ) 2.2 2.1 4.4 2.5 –  non-bank financial institutions 3,650 3,240 89 321 ( 30 ) ( 30 ) — — 0.8 0.9 — — Loans and advances to banks at amortised cost 1,436 1,424 — 12 ( 3 ) ( 3 ) — — 0.2 0.2 — — Other financial assets measured at amortised cost 12,734 12,417 171 146 ( 132 ) ( 113 ) ( 9 ) ( 10 ) 1.0 0.9 5.3 6.8 1 The days past due amounts presented above are on a contractual basis. HSBC Holdings plc Annual Report on Form 20-F 175 Stage 2 decomposition The following table presents the stage 2 decomposition of gross carrying amount and allowances for ECL for loans and advances to customers and banks. It also sets out the reasons why an exposure is classified as stage 2 and therefore presented as a significant increase in credit risk at 31 December 2024. The quantitative classification shows gross carrying amount and allowances for ECL for which the applicable reporting date probability of default (‘PD’) measure exceeds defined quantitative thresholds for retail and wholesale exposures, as set out in Note 1.2 ‘Summary of material accounting policies’, on page 381 . The qualitative classification primarily accounts for customer risk rating (‘CRR’) deterioration, watch-and-worry and retail management judgemental adjustments. A summary of our current policies and practices for the significant increase in credit risk is set out in ‘Summary of material accounting policies’ on page 381 . Loans and advances to customers and banks 1 At 31 Dec 2024 Loans and advances to customers Loans and advances to banks at amortised cost Total stage 2 Personal of which: Corporate and commercial Non-bank financial institutions first lien mortgages credit cards other personal lending $m $m $m $m $m $m $m $m Quantitative 36,356 30,992 2,904 2,460 37,787 1,658 176 75,977 Qualitative 3,452 3,107 85 260 13,327 438 22 17,239 of which: forbearance 175 70 40 65 1,086 3 — 1,264 30 DPD backstop 2 111 78 2 31 117 2 — 230 Total gross carrying amount 39,919 34,177 2,991 2,751 51,231 2,098 198 93,446 Quantitative (1,118) (121) (651) (346) (1,124) (28) — (2,270) Qualitative (35) (8) (9) (18) (229) (2) (2) (268) of which: forbearance (5) — (1) (4) (12) — — (17) 30 DPD backstop 2 (5) (1) — (4) (5) — — (10) Total allowance for ECL (1,158) (130) (660) (368) (1,358) (30) (2) (2,548) ECL coverage % 2.9 0.4 22.1 13.4 2.7 1.4 1.0 2.7 Residual average life 3 (in years) 17.0 19.5 <1.0 3.6 2.7 1.9 <1.0 At 31 Dec 2023 Quantitative 35,742 31,178 1,940 2,624 53,034 2,955 781 92,512 Qualitative 11,678 7,077 2,477 2,124 16,241 653 642 29,214 of which: forbearance 171 69 34 68 982 2 — 1,155 30 DPD backstop 2 63 32 2 29 463 42 13 581 Total gross carrying amount 47,483 38,287 4,419 4,777 69,738 3,650 1,436 122,307 Quantitative (1,103) (149) (554) (400) (1,225) (24) (1) (2,353) Qualitative (324) (50) (142) (132) (270) (6) (2) (602) of which: forbearance (4) — (1) (3) (11) — — (15) 30 DPD backstop 2 (7) (1) (1) (5) (5) — — (12) Total allowance for ECL (1,434) (200) (697) (537) (1,500) (30) (3) (2,967) ECL coverage % 3.0 0.5 15.8 11.2 2.2 0.8 0.2 2.4 Residual average life 3 (in years) 16.0 19.3 <1.0 4.1 2.5 1.2 <1.0 1 Where balances satisfy more than one of the above three criteria for determining a significant increase in credit risk, the corresponding gross carrying amount and allowance for ECL have been assigned in order of categories presented. 2 Days past due (‘DPD’). 3 Calculated as the difference between final contractual maturities and the reporting date, weighted based on the contribution of the instrument to the stage 2 total gross carrying amount of the corresponding product or sector. 176 HSBC Holdings plc Annual Report on Form 20-F Risk review Assets held for sale (Audited) At 31 December 2024, the most material balances held for sale arose from our business in South Africa and our private banking business in Germany. Disclosures relating to assets held for sale are provided in the following credit risk tables, primarily where the disclosure is relevant to the measurement of these financial assets: – ‘Maximum exposure to credit risk’ (page 178 ); and – ‘Distribution of financial instruments by credit quality at 31 December’ (page 196 ); Although there was a reclassification on the balance sheet, there was no separate income statement reclassification. As a result, charges for changes in expected credit losses and other credit impairment charges shown in the credit risk disclosures include charges relating to financial assets classified as ‘assets held for sale’. ‘Loans and other credit-related commitments’, ‘financial guarantees’ and ‘Debt instruments measured at fair value through other comprehensive income’ as reported in credit disclosures, also include exposures and allowances relating to financial assets classified as ‘assets held for sale’. Loans and advances to customers and banks measured at amortised cost (Audited) 2024 2023 Total gross loans and advances Allowance for ECL Total gross loans and advances Allowance for ECL $m $m $m $m As reported 1,042,425 ( 9,728 ) 1,062,526 ( 11,089 ) Reported in ‘Assets held for sale’ 1,113 ( 4 ) 84,075 ( 303 ) At 31 December 1,043,538 ( 9,732 ) 1,146,601 ( 11,392 ) At 31 December 2024, gross loans and advances of our business in South Africa were $ 660 m and the related allowance for ECL was $ 4 m . Gross loans and advances of our private banking business in Germany were $ 309 m and of our French life insurance business were $ 144 m , both with negligible allowance for ECL. Lending balances held for sale continue to be measured at amortised cost less allowances for impairment and, therefore, such carrying amounts may differ from fair value. These lending balances are part of associated disposal groups that are measured in their entirety at the lower of carrying amount and fair value less costs to sell. Any difference between the carrying amount of these assets and their sales price is part of the overall gain or loss on the associated disposal group as a whole. For further details of the carrying amount and the fair value at 31 December 2024 of loans and advances to banks and customers classified as held for sale, see Note 23 on the financial statements. Gross loans and allowance for ECL on loans and advances to customers and banks reported in ‘Assets held for sale’ (Audited) South Africa German Private Banking Business Other Total Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL $m $m $m $m $m $m $m $m Loans and advances to customers at amortised cost 660 ( 4 ) 309 — — — 969 ( 4 ) –  personal — — 130 — — — 130 — –  corporate and commercial 586 ( 4 ) 19 — — — 605 ( 4 ) –  non-bank financial institutions 74 — 160 — — — 234 — Loans and advances to banks at amortised cost — — — — 144 — 144 — At 31 Dec 2024 1 660 ( 4 ) 309 — 144 — 1,113 ( 4 ) Banking business in Canada Retail banking operations in France Other Total Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL $m $m $m $m $m $m $m $m Loans and advances to customers at amortised cost 56,349 ( 220 ) 16,984 ( 82 ) 255 ( 1 ) 73,588 ( 303 ) –  personal 27,071 ( 95 ) 13,920 ( 79 ) 140 ( 1 ) 41,131 ( 175 ) –  corporate and commercial 27,789 ( 120 ) 3,012 ( 3 ) — — 30,801 ( 123 ) –  non-bank financial institutions 1,489 ( 5 ) 52 — 115 — 1,656 ( 5 ) Loans and advances to banks at amortised cost 154 — 10,333 — — — 10,487 — At 31 Dec 2023 56,503 ( 220 ) 27,317 ( 82 ) 255 ( 1 ) 84,075 ( 303 ) 1 The table above does not include disposals completed during 2024 including the sale of our retail banking operations in France completed on 1 January 2024 and our banking business in Canada completed on 28 March 2024. The sale of our business in Argentina was announced in the first quarter of 2024 and completed on 6 December 2024. The gross loans and advances to customers and banks in Argentina were $ 1,760 m and the associated allowance for ECL was $ 34 m at 31 March 2024. For more details, please refer to business disposals as disclosed in Note 23 on page 433 . HSBC Holdings plc Annual Report on Form 20-F 177 The table below analyses the amount of ECL (charges)/releases arising from assets held for sale. The charges during the period relate to our businesses in Canada ( $ 41 m ) and in Argentina ( $ 40 m ). Changes in expected credit losses and other credit impairment (Audited) 2024 2023 $m $m ECL (charges)/releases arising from: –  assets held for sale ( 81 ) ( 49 ) –  assets not held for sale ( 3,333 ) ( 3,398 ) Year ended 31 Dec ( 3,414 ) ( 3,447 ) Credit exposure Maximum exposure to credit risk (Audited) This section provides information on balance sheet items and their offsets as well as loan and other credit-related commitments. Commentary on consolidated balance sheet movements in 2024 is provided on page 93. ‘Maximum exposure to credit risk’ table The following table presents our maximum exposure before taking account of any collateral held or other credit enhancements (unless such enhancements meet accounting offsetting requirements). The table excludes trading assets, financial assets designated and otherwise mandatorily measured at fair value through profit or loss, and financial investments measured at fair value through other comprehensive income as their carrying amount best represents the net exposure to credit risk. Equity securities are also excluded as they are not subject to credit risk. For the financial assets recognised on the balance sheet, the maximum exposure to credit risk equals their carrying amount and is net of the allowance for ECL. For financial guarantees and other guarantees granted, it is the maximum amount that we would have to pay if the guarantees were called upon. For loan commitments and other credit-related commitments, it is generally the full amount of the committed facilities. The offset in the table relates to amounts where there is a legally enforceable right of offset in the event of counterparty default and where, as a result, there is a net exposure for credit risk purposes. However, as there is no intention to settle these balances on a net basis under normal circumstances, they do not qualify for net presentation for accounting purposes. No offset has been applied to off-balance sheet collateral. In the case of derivatives, the offset column also includes collateral received in cash and other financial assets. Other credit risk mitigants While not disclosed as an offset in the following ‘Maximum exposure to credit risk’ table, other arrangements are in place that reduce our maximum exposure to credit risk. These include a charge over collateral on borrowers’ specific assets, such as residential properties, collateral held in the form of financial instruments that are not held on the balance sheet and short positions in securities. In addition, for financial assets held as part of linked insurance/investment contracts the credit risk is predominantly borne by the policyholder. See page 380 and Note 31 on the financial statements for further details of collateral in respect of certain loans and advances and derivatives. Collateral available to mitigate credit risk is disclosed in the ‘Collateral’ section on page 211 . 178 HSBC Holdings plc Annual Report on Form 20-F Risk review Maximum exposure to credit risk (Audited) 2024 2023 Maximum exposure Offset Net Maximum exposure Offset Net $m $m $m $m $m $m Loans and advances to customers held at amortised cost 930,658 ( 22,822 ) 907,836 938,535 ( 22,607 ) 915,928 –  personal 444,701 ( 2,256 ) 442,445 444,655 ( 2,470 ) 442,185 –  corporate and commercial 403,929 ( 18,897 ) 385,032 419,852 ( 18,771 ) 401,081 –  non-bank financial institutions 82,028 ( 1,669 ) 80,359 74,028 ( 1,366 ) 72,662 Loans and advances to banks at amortised cost 102,039 — 102,039 112,902 — 112,902 Other financial assets held at amortised cost 854,427 ( 4,383 ) 850,044 973,316 ( 13,919 ) 959,397 –  cash and balances at central banks 267,674 — 267,674 285,868 — 285,868 –  Hong Kong Government certificates of indebtedness 42,293 — 42,293 42,024 — 42,024 –  reverse repurchase agreements – non-trading 252,549 ( 4,383 ) 248,166 252,217 ( 13,919 ) 238,298 –  financial investments 153,973 — 153,973 148,326 — 148,326 –  assets held for sale 27,234 — 27,234 114,134 — 114,134 –  prepayments, accrued income and other assets 110,704 — 110,704 130,747 — 130,747 Derivatives 268,637 ( 254,257 ) 14,380 229,714 ( 222,059 ) 7,655 Total on-balance sheet exposure to credit risk 2,155,761 ( 281,462 ) 1,874,299 2,254,467 ( 258,585 ) 1,995,882 Total off-balance sheet 970,610 — 970,610 1,007,885 — 1,007,885 –  financial and other guarantees 109,380 — 109,380 111,102 — 111,102 –  loan and other credit-related commitments 861,230 — 861,230 896,783 — 896,783 At 31 Dec 3,126,371 ( 281,462 ) 2,844,909 3,262,352 ( 258,585 ) 3,003,767 Concentration of exposure We have a number of global businesses with a broad range of products. We operate in a number of geographical markets with the majority of our exposures in Asia and Europe. For an analysis of: – financial investments, see Note 16 on the financial statements; – trading assets, see Note 11 on the financial statements; – derivatives, see page 214 and Note 15 on the financial statements; and – loans and advances by industry sector and by the location of the principal operations of the lending subsidiary (or, in the case of the operations of The Hongkong and Shanghai Banking Corporation Limited, HSBC Bank plc, HSBC Bank Middle East Limited and HSBC Bank USA, by the location of the lending branch), see page 200 for wholesale lending and page 214 for personal lending. C redit deterioration of financial instruments (Audited) A summary of our current policies and practices regarding the identification, treatment and measurement of stage 1, stage 2, stage 3 (credit impaired) and POCI financial instruments can be found in Note 1.2 on the financial statements. Measurement uncertainty and sensitivity analysis of ECL estimates (Audited) The recognition and measurement of ECL involves the use of judgement and estimation. We form multiple economic scenarios, apply these forecasts to credit risk models to estimate future credit losses, and probability weight the results to determine an unbiased ECL estimate. Management assessed the current economic environment, reviewed the latest forecasts and discussed key risks before selecting the appropriate economic scenarios and their weightings. The Central scenario is constructed to reflect the latest macroeconomic expectations. Outer scenarios incorporate the crystallisation of economic and geopolitical risks. In the fourth quarter of 2024, the four economic scenarios were modified to reflect heightened policy uncertainty following the US election and to overcome any lags in consensus forecasts. An adjustment factor based on more recent views of expected tariffs and other policy changes was modelled and then applied to each of the economic scenarios. The effect was to lower growth expectations in our major markets, while the impact on inflation and interest rates was varied. Management judgemental adjustments are used where modelled ECL does not fully reflect the identified risks and related uncertainty, or to capture significant late-breaking events. At 31 December 2024, there was an overall reduction in management judgemental adjustments compared with 31 December 2023, as modelled outcomes better reflected the key risks at 31 December 2024. Methodology At 31 December 2024, four scenarios were used to capture the latest economic expectations and to articulate management’s view of the range of risks and potential outcomes. Each scenario is updated with the latest economic forecasts and distributional estimates every quarter. Three scenarios, the Upside, Central and Downside, are drawn from consensus forecasts, market data and distributional estimates of the entire range of economic outcomes. The fourth scenario, the Downside 2, represents management’s view of severe downside risks. Consensus estimates are deployed as conditioning variables in a proprietary expansion of the scenario variables. The Central scenario is deemed th e ‘most likely’ scenario, and usually attracts the largest probability weighting. It is created using consensus forecasts, which is the average of a panel of external forecasts. The outer scenarios represent the tails of the distribution and are less likely to occur. The consensus Upside and Downside scenarios are created with reference to forecast probability distributions for s elect markets that capture economists’ views of the entire range of economic outcomes. In the later years of these scenarios, projections revert to long-term consensus trend expectations. Reversion to trend expectations is done with reference to historically observed quarterly changes in the values of macroeconomic variables. HSBC Holdings plc Annual Report on Form 20-F 179 The fourth scenario, the Downside 2, represents management’s view of severe downside risks. It is a globally consistent, narrative-driven scenario that explores a more extreme economic outcome than those captured by the consensus scenarios. In this scenario, variables do not, by design, revert to long-term trend expectations and may instead explore alternative states of equilibrium, where economic variables move permanently away from past trends. The consensus Downside and the consensus Upside scenarios are each constructed to be consistent with a 10 % probability. The Downside 2 is calibrated to a 5 % probability. The Central scenario is assigned the remaining 75 % . This weighting scheme is deemed appropriate for the unbiased estimation of ECL in most circumstances. However, manageme nt may depart from this probability-based scenario weighting approach when the economic outlook and forecasts are determined to be particularly uncertain and risks are elevated. For the fourth quarter of 2024, we assessed that consensus forecasts and distributional estimates did not adequately reflect the consequences of the US election on the global economic outlook. Due to the lag in forecasts there was increased uncertainty as to how tariffs would be implemented and economic policy would change. As such, scenarios have been constructed using the described standard methodology and an adjustment – to account for policy changes – applied. The adjustment was based on a modelled update to the Central scenario and incorporated a detailed narrative of US economic policy proposals, including specific tariff rates. The modelled results were then layered onto the Central scenario, which resulted in changes to most variables. To quantify the impact, the adjustment reduces GDP growth in our key markets by an average of 30 bps and 50 bps respectively, in the first two years of the Central scenario forecast. Outer scenarios were adjusted in parallel. The scenario adjustment entailed no change in scenario probability weights, which remained in line with our Forward Economic Guidance (’FEG’) framework. Uncertainties relating to the policy outlook have been addressed in the scenarios directly. Measures of dispersion and uncertainty have remained low but may reflect lags in the consensus economic forecasting process. Scenarios produced to calculate ECL are aligned to HSBC’s top and emerging risks. Description of economic scenarios The economic assumptions presented in this section have been formed by HSBC with reference to external forecasts and estimates, specifically for the purpose of calculating ECL. Forecasts may change and remain subject to uncertainty. Outer scenarios are designed to capture the potential crystallisation of key economic and financial risks and alternative paths for economic variables. In our key markets, the Central scenario incorporates potential impacts from anticipated changes to US economic and trade policy, including higher tariffs. The overall effect of the adjustment in our key markets is to lower GDP and raise inflation and unemployment estimates, relative to the consensus. Consequently, GDP growth and unemployment forecasts have deteriorated in the fourth quarter of 2024, compared with the fourth quarter of 2023. With regards to monetary policy, the expected path for interest rates in many of our markets is based on market futures. Interest rate expectations have increased relative to the fourth quarter of 2023, with fewer rate cuts forecast. The exception is mainland China, where the headwinds to growth ensure that forecast interest rates are lower. At the end of 2024, risks to the economic outlook included a number of significant geopolitical issues. Within our Downside scenarios, the economic consequences from the crystallisation of those risks were captured by higher commodity and goods prices, the re-acceleration of inflation, a further rise in interest rates and a global recession. The scenarios used to calculate ECL are described below. The consensus Central scenario HSBC’s Central scenario reflects expectations for slower growth and higher inflation and unemployment across many of our key markets. Expectations of lower GDP growth during 2025 are driven by the assumed effects of higher tariffs, which impede trade flows, weaken consumption and deter investment. In the scenario, the US applies tariffs on key trading partners, focusing on mainland China and Mexico at the outset of the new administration’s term, before moving attention to other trading partners. Countries are expected to respond in kind. As a direct consequence of tariffs, trade growth is expected to be lower, which in turn weighs on GDP growth. Mainland China, Hong Kong and Mexico experience the greatest negative consequences given their deeper trade and financial interlinkages, with the US economy. Indirect consequences from tariffs dampen growth elsewhere. Tariffs, or the threat of them, increases uncertainty, leading to lower confidence and reduced investment. Tighter restrictions on immigration into the US are also expected to reduce the size of the labour force, putting upward pressure on wage growth. At the same time, higher tariff rates drive US inflation. Higher inflation is assumed to erode purchasing power and reduces GDP growth. In other markets, including in Mexico, higher inflation is also expected due to currency depreciation. The higher projected rates of inflation ensure that central banks are expected to slow the pace of interest rate reductions. The exception is in mainland China, where the PBoC cuts interest rates as the excess of domestic supply is expected to become more acute and drives prices lower. Global GDP is expected to g row by 2.5 % in 2025 in the Central scenario, and the average rate of global GDP growth is forecast to be 2.6 % over the five -year forecast period. This is below the average growth rate over the five -year period prior to the onset of the pandemic of 2.9 % . The key features of our Central scenario are: – GDP growth rates across the majority of our main markets are expected to slow in 2025 and 2026, due to the implementation of higher tariffs as well as underlying structural weaknesses in some economies. The most significant slowdowns in activity are expected to occur in the markets with the highest trade dependence with the US.  Elevated interest rates and higher price levels are also expected to continue to weigh on some consumer and corporate segments. – In most markets, unemployment is forecast to rise moderately in 2025 as economic activity slows, although it will remain low by historical standards. – Inflation is forecast to increase in several of our main markets, as a result of tariffs, even as services price inflation is expected to ease as wage growth moderates. However, inflation largely remains within central banks’ target ranges from 2025. The main exceptions are Hong Kong and mainland China, where inflation is expected to remain subdued, despite higher tariffs, due to weak domestic demand. – Housing market conditions remain mixed, with price weakness expected to persist in Hong Kong and mainland China, stronger growth in the UAE and Mexico, and more muted price growth in the UK, US and France. High inventory levels remain the biggest drag on Hong Kong and mainland China residential property and this is expected to lead to another year of price declines in 2025, before a gradual recovery from 2026. – Challenging conditions are also forecast to continue in certain segments of the commercial property sector in a number of our key markets. Structural changes to demand in the office segment in particular have driven lower valuations. – Policy interest rates in key markets are forecast to gradually decline further in 2025. In the longer term, they are expected to remain at a higher level than in recent years. – The Brent crude oil price is forecast to average around $ 69 per barrel over the projection period. 180 HSBC Holdings plc Annual Report on Form 20-F Risk review The Central scenario was created with forecasts available in late November, and reviewed continually until the end of December 2024. In accordance with HSBC’s scenario framework, a probability weight of 75 % has been assigned to the Central scenario across all major markets. The following tables describe key macroeconomic variables in the consensus Central scenario. Consensus Central scenario 2025–2029 (as at 4Q24) UK US Hong Kong Mainland China France UAE Mexico GDP (annual average growth rate, %) 2025 1.2 2.0 1.7 4.0 0.9 4.4 0.9 2026 1.3 1.6 1.8 3.7 0.9 4.2 1.2 2027 1.8 1.6 3.5 4.3 1.4 3.9 1.7 2028 1.6 1.8 3.1 3.9 1.5 3.6 1.9 2029 1.6 2.0 2.7 3.7 1.4 3.6 2.0 5-year average 1 1.5 1.8 2.6 3.9 1.2 3.9 1.5 Unemployment rate (%) 2025 4.9 4.4 3.3 5.2 7.5 2.7 3.5 2026 4.7 4.3 3.7 5.4 7.3 2.6 3.5 2027 4.5 4.3 3.3 5.2 7.2 2.6 3.5 2028 4.3 4.2 3.0 5.0 7.0 2.5 3.5 2029 4.3 4.1 2.9 5.0 7.0 2.5 3.5 5-year average 1 4.5 4.2 3.2 5.2 7.2 2.6 3.5 House prices (annual average growth rate, %) 2025 1.4 4.4 ( 0.5 ) ( 5.9 ) 2.1 9.3 7.6 2026 3.8 3.2 2.4 ( 0.7 ) 4.4 5.1 4.5 2027 4.6 2.4 3.0 3.2 4.4 3.6 4.2 2028 3.5 2.5 2.7 4.1 3.8 1.8 4.0 2029 2.7 2.6 2.7 2.9 3.1 1.3 4.0 5-year average 1 3.2 3.0 2.1 0.7 3.6 4.2 4.9 Inflation (annual average growth rate, %) 2025 2.4 2.4 1.4 0.3 1.2 2.1 5.0 2026 2.1 2.8 1.9 1.0 1.6 1.9 3.9 2027 2.1 2.5 2.2 1.5 2.0 1.8 3.4 2028 2.0 2.2 2.2 1.7 2.3 1.9 3.4 2029 2.0 2.1 2.3 1.6 2.2 1.8 3.4 5-year average 2.1 2.4 2.0 1.2 1.9 1.9 3.8 Central bank policy rate (annual average, %) 2025 4.2 4.1 4.5 2.9 2.1 4.1 9.4 2026 3.9 3.7 4.1 2.9 1.8 3.8 8.8 2027 3.8 3.7 4.0 3.0 2.0 3.7 8.8 2028 3.7 3.6 4.0 3.2 2.0 3.6 8.9 2029 3.7 3.6 4.0 3.3 2.1 3.6 8.9 5-year average 1 3.9 3.7 4.1 3.1 2.0 3.8 8.9 1 The five -year average is calculated over a projected period of 20 quarters from 1Q25 to 4Q29. 2 For mainland China, the rate shown is the Loan Prime Rate. HSBC Holdings plc Annual Report on Form 20-F 181 Consensus Central scenario 2024–2028 (as at 4Q23) UK US Hong Kong Mainland China France UAE Mexico GDP (annual average growth rate, %) 2024 0.3 1.0 2.6 4.5 0.8 3.7 1.9 2025 1.2 1.8 2.7 4.4 1.5 4.0 2.2 2026 1.7 2.1 2.6 4.3 1.6 3.8 2.3 2027 1.6 2.0 2.6 3.8 1.5 3.4 2.4 2028 1.6 2.0 2.6 3.9 1.5 3.4 2.4 5-year average 1 1.3 1.8 2.6 4.2 1.4 3.6 2.2 Unemployment rate (%) 2024 4.7 4.3 3.0 5.2 7.5 2.6 2.9 2025 4.6 4.2 3.0 5.1 7.3 2.6 2.9 2026 4.3 4.0 3.2 5.1 7.0 2.6 2.9 2027 4.2 4.0 3.2 5.1 6.8 2.6 2.9 2028 4.2 4.0 3.2 5.1 6.8 2.6 2.9 5-year average 1 4.4 4.1 3.1 5.1 7.1 2.6 2.9 House prices (annual average growth rate, %) 2024 ( 5.5 ) 2.9 ( 6.6 ) ( 0.6 ) ( 1.0 ) 12.6 6.5 2025 0.1 2.7 ( 0.7 ) 1.1 2.4 7.7 4.2 2026 3.5 3.1 2.6 2.6 4.0 4.4 4.2 2027 3.0 2.7 2.8 4.0 4.4 2.6 4.0 2028 3.0 2.1 3.0 4.5 4.0 2.3 4.0 5-year average 1 0.8 2.7 0.2 2.3 2.8 5.9 4.6 Inflation (annual average growth  rate,%) 2024 3.2 2.7 2.1 1.8 2.7 2.3 4.2 2025 2.2 2.2 2.1 2.0 1.8 2.2 3.6 2026 2.2 2.3 2.2 2.1 1.7 2.1 3.5 2027 2.3 2.2 2.4 2.0 1.9 2.1 3.5 2028 2.3 2.2 2.4 2.0 2.1 2.1 3.5 5-year average 1 2.4 2.3 2.2 2.0 2.0 2.1 3.7 Central bank policy rate (annual average, %) 2024 5.0 5.0 5.4 3.2 3.6 5.1 10.4 2025 4.3 4.0 4.4 3.3 2.8 4.1 8.6 2026 3.9 3.7 4.1 3.5 2.6 3.7 7.9 2027 3.8 3.7 4.1 3.7 2.6 3.7 7.9 2028 3.7 3.8 4.1 3.9 2.7 3.8 8.1 5-year average 1 4.1 4.1 4.4 3.5 2.9 4.1 8.6 1 The five -year average is calculated over a projected period of 20 quarters from 1Q24 to 4Q28. 2 For mainland China, the rate shown is the Loan Prime Rate. In prior periods, including the 4Q23 disclosure, the reference rate shown for mainland China was the Lending Rate. The graphs compare the Central scenario at the year end 2023 with economic expectations at the end of 2024 . GDP growth: Comparison of Central scenarios Hong Kong 4Q23 Central 5Y Average: 2.6% 4Q24 Central 5Y Average: 2.6% Note: Real GDP shown as year-on-year percentage change. Mainland China 4Q23 Central 5Y Average: 4.2% 4Q24 Central 5Y Average: 3.9% Note: Real GDP shown as year-on-year percentage change. 182 HSBC Holdings plc Annual Report on Form 20-F Risk review UK 4Q23 Central 5Y Average: 1.3% 4Q24 Central 5Y Average: 1.5% Note: Real GDP shown as year-on-year percentage change. US 4Q23 Central 5Y Average: 1.8% 4Q24 Central 5Y Average: 1.8% Note: Real GDP shown as year-on-year percentage change. The consensus Upside scenario Compared with the Central scenario, the consensus Upside scenario features stronger economic activity in the near term, before converging to long-run trend expectations. It also incorporates a faster fall in the rate of inflation than in the Central scenario. The scenario is consistent with a number of key upside risk themes. These include only limited increases in tariffs and a faster fall in the rate of inflation that allows central banks to reduce interest rates more quickly. The Upside scenario would also be consistent with a de-escalation in geopolitical tensions, where the Russia-Ukraine war moves quickly towards a conclusion, tensions in the Middle East subside and US-China relations become more cordial. The following tables describe key macroeconomic variables in the consensus Upside scenario. Consensus Upside scenario 2025–2029 (as at 4Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-peak) 1 11.3 (4Q29) 13.6 (4Q29) 21.4 (4Q29) 27.5 (4Q29) 8.9 (4Q29) 28.9 (4Q29) 13.6 (4Q29) Unemployment rate (%, min) 2 3.5 (3Q26) 3.6 (1Q26) 2.9 (4Q29) 4.9 (4Q26) 6.4 (4Q26) 2.2 (4Q26) 3.0 (1Q25) House price index (%, start-to-peak) 1 24.2 (4Q29) 23.6 (4Q29) 25.3 (4Q29) 9.8 (4Q29) 22.8 (4Q29) 26.1 (4Q29) 31.7 (4Q29) Inflation rate (YoY % change, min) 3 1.4 (1Q26) 1.6 (2Q26) ( 0.1 ) (4Q25) ( 1.0 ) (4Q25) 0.1 (4Q25) 0.6 (4Q25) 3.1 (2Q26) Central bank policy rate (%, min) 2 3.6 (4Q25) 3.6 (1Q29) 4.0 (1Q29) 2.7 (1Q26) 1.4 (3Q25) 3.6 (1Q29) 7.6 (1Q26) 1 Cumulative change to the highest level of the series during the 20-quarter projection. 2 Lowest projected unemployment or policy interest rate in the scenario. For mainland China, rate shown is the Loan Prime Rate. 3 Lowest projected year-on-year percentage change in inflation in the scenario. Consensus Upside scenario 2024–2028 (as at 4Q23) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-peak) 1 10.8 (4Q28) 14.3 (4Q28) 21.8 (4Q28) 30.4 (4Q28) 10.4 (4Q28) 30.7 (4Q28) 17.8 (4Q28) Unemployment rate (%, min) 2 3.1 (4Q24) 3.1 (2Q25) 2.4 (3Q24) 4.8 (4Q25) 6.2 (4Q25) 2.0 (4Q25) 2.4 (3Q24) House price index (%, start-to-peak) 1 13.0 (4Q28) 21.9 (4Q28) 17.9 (4Q28) 19.7 (4Q28) 19.6 (4Q28) 34.2 (4Q28) 30.6 (4Q28) Inflation rate (YoY % change, min) 3 1.3 (2Q25) 1.4 (1Q25) 0.3 (4Q24) 0.6 (3Q24) 1.5 (3Q24) 1.4 (1Q25) 2.7 (1Q25) Central bank policy rate (%, min) 2 3.7 (3Q28) 3.7 (2Q27) 4.1 (1Q27) 3.1 (3Q24) 2.6 (2Q26) 3.7 (1Q27) 7.8 (2Q25) 1 Cumulative change to the highest level of the series during the 20-quarter projection. 2 Lowest projected unemployment or policy interest rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. In prior periods, including the 4Q23 disclosure, the reference rate shown for mainland China was the Lending Rate. 3 Lowest projected year-on-year percentage change in inflation in the scenario. Downside scenarios Downside scenarios explore the intensification and crystallisation of a number of key economic and financial risks. These include a more material escalation of tariff policies and geopolitical tensions, which disrupt key commodity and goods markets, causing inflation and interest rates to rise, and creating a global recession. As the geopolitical environment remains volatile and complex, risks include: – an increase in protectionist policies, as countries that impose tariffs are met with retaliatory actions. This lowers investment, complicates international supply chains, and impedes trade flows; – broader and more prolonged conflicts in the Middle East and between Russia and Ukraine, which further disrupt energy and food supplies; and – continued differences between the US and China, which could affect economic confidence, and the global goods trade and supply chains for critical technologies. High inflation and higher interest rates also remain key risks. Should tariffs increase significantly and geopolitical tensions escalate, energy and food prices could rise and increase pressure on household budgets and firms’ costs. Higher inflation and labour supply shortages could also trigger a wage-price spiral and put sustained pressure on household incomes and corporate margins. In turn, it raises the risk that central banks react by raising interest rates, leading to higher defaults and an economic recession. HSBC Holdings plc Annual Report on Form 20-F 183 The consensus Downside scenario In the consensus Downside scenario, economic activity is weaker compared with the Central scenario. In this scenario, GDP declines, unemployment rates rise, and asset prices fall. The scenario features an increase in tariffs over and above those assumed in the Central scenario and an escalation of geopolitical tensions, which causes a rise in inflation, as supply chain constraints intensify and energy prices rise. The scenario also features a temporary increase in interest rates above the Central scenario, before the effects of weaker consumption demand begin to dominate and commodity prices and inflation fall again. The following tables describe key macroeconomic variables in the consensus Downside scenario. Consensus Downside scenario 2025–2029 (as at 4Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 ( 1.0 ) (4Q26) ( 0.6 ) (3Q25) ( 4.5 ) (4Q25) ( 2.5 ) (3Q25) ( 0.6 ) (1Q26) 0.3 (1Q25) ( 2.1 ) (4Q26) Unemployment rate (%, max) 2 6.1 (4Q25) 5.3 (3Q25) 5.1 (2Q26) 6.9 (4Q26) 8.3 (3Q25) 3.4 (1Q26) 4.1 (4Q25) House price index (%, start-to- trough) 1 ( 4.5 ) (1Q26) ( 0.2 ) (1Q25) ( 1.9 ) (2Q26) ( 12.8 ) (3Q26) ( 0.3 ) (1Q25) ( 0.4 ) (1Q25) 2.1 (1Q25) Inflation rate (YoY % change, max) 3 3.4 (4Q25) 4.5 (1Q26) 3.1 (1Q26) 2.0 (1Q26) 2.6 (3Q25) 2.8 (1Q26) 7.4 (4Q25) Central bank policy rate (%, max) 2 5.0 (1Q25) 4.8 (1Q25) 5.2 (1Q25) 3.0 (1Q25) 3.2 (1Q25) 4.8 (1Q25) 11.5 (3Q25) 1 Cumulative change to the lowest level of the series during the 20-quarter projection. 2 The highest projected unemployment or policy interest rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. 3 The highest projected year-on-year percentage change in inflation in the scenario. Consensus Downside scenario 2024–2028 (as at 4Q23) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 ( 1.0 ) (2Q25) ( 1.4 ) (3Q24) ( 1.6 ) (3Q25) ( 1.5 ) (1Q24) ( 0.3 ) (2Q24) 1.4 (1Q24) ( 0.3 ) (4Q24) Unemployment rate (%, max) 2 6.4 (1Q25) 5.6 (4Q24) 4.7 (4Q25) 6.9 (4Q25) 8.5 (4Q24) 3.7 (4Q25) 3.5 (4Q25) House price index (%, start-to- trough) 1 ( 12.0 ) (2Q25) ( 1.3 ) (3Q24) ( 9.6 ) (4Q24) ( 7.1 ) (3Q25) ( 1.2 ) (3Q24) 0.3 (1Q24) 1.2 (1Q24) Inflation rate (YoY % change, max) 3 4.1 (1Q24) 3.5 (4Q24) 3.8 (3Q24) 3.5 (4Q24) 3.8 (2Q24) 3.0 (1Q24) 6.5 (4Q24) Central bank policy rate (%, max) 2 5.7 (1Q24) 5.6 (1Q24) 6.0 (1Q24) 3.2 (3Q24) 4.2 (1Q24) 5.7 (1Q24) 12.0 (3Q24) 1 Cumulative change to the lowest level of the series during the 20-quarter projection. 2 The highest projected unemployment or policy interest rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. In prior periods, including the 4Q23 disclosure, the reference rate shown for mainland China was the Lending Rate. 3 The highest projected year-on-year percentage change in inflation in the scenario. Downside 2 scenario The Downside 2 scenario features a deep global recession and reflects management’s view of the tail of the economic distribution. It incorporates the crystallisation of a number of risks simultaneously, including significant increases in tariffs globally, where the US imposes particularly high and punitive tariffs on imports from mainland China and Mexico. A further escalation of geopolitical crises is also assumed, which creates severe supply disruptions to goods and energy markets. In the scenario, as inflation surges and central banks tighten monetary policy further, consumer and business confidence falls. However, this impulse is assumed to be short-lived, as recession takes hold, causing a fall in demand, leading commodity prices to correct sharply and global price inflation to fall. The following tables describe key macroeconomic variables in the Downside 2 scenario. Downside 2 scenario 2025–2029 (as at 4Q24) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 ( 9.1 ) (2Q26) ( 4.1 ) (2Q26) ( 10.1 ) (4Q25) ( 8.7 ) (4Q25) ( 7.9 ) (2Q26) ( 6.8 ) (2Q26) ( 10.5 ) (3Q26) Unemployment rate (%, max) 2 8.4 (2Q26) 9.3 (2Q26) 7.1 (1Q26) 7.1 (4Q26) 10.4 (1Q27) 5.0 (3Q25) 5.6 (1Q26) House price index (%, start-to- trough) 1 ( 27.2 ) (4Q26) ( 15.8 ) (4Q25) ( 34.4 ) (3Q27) ( 30.5 ) (4Q26) ( 14.0 ) (2Q27) ( 13.2 ) (2Q27) 2.0 (1Q25) Inflation rate (YoY % change, max) 3 10.1 (2Q25) 4.9 (4Q25) 3.6 (1Q26) 3.8 (4Q25) 7.6 (2Q25) 3.7 (2Q25) 7.9 (4Q25) Central bank policy rate (%, max) 2 5.5 (1Q25) 5.5 (1Q25) 5.9 (1Q25) 3.5 (3Q25) 4.2 (1Q25) 5.6 (1Q25) 12.1 (3Q25) 1 Cumulative change to the lowest level of the series during the 20-quarter projection. 2 The highest projected unemployment or policy interest rate in the scenario. For mainland China, the rate shown is the Loan Prime Rate. 3 The highest projected year-on-year percentage change in inflation in the scenario. Downside 2 scenario 2024–2028 (as at 4Q23) UK US Hong Kong Mainland China France UAE Mexico GDP level (%, start-to-trough) 1 ( 8.8 ) (2Q25) ( 4.6 ) (1Q25) ( 8.2 ) (1Q25) ( 6.4 ) (1Q25) ( 6.6 ) (1Q25) ( 4.9 ) (2Q25) ( 8.1 ) (2Q25) Unemployment rate (%, max) 2 8.4 (2Q25) 9.3 (2Q25) 6.4 (4Q24) 7.0 (4Q25) 10.2 (4Q25) 4.3 (3Q24) 4.9 (2Q25) House price index (%, start-to- trough) 1 ( 30.2 ) (4Q25) ( 14.7 ) (4Q24) ( 32.8 ) (3Q26) ( 25.5 ) (4Q25) ( 14.5 ) (2Q26) ( 2.9 ) (4Q25) 1.2 (1Q24) Inflation rate (YoY % change, max) 3 10.1 (2Q24) 4.8 (2Q24) 4.1 (3Q24) 4.1 (4Q24) 8.6 (2Q24) 3.5 (2Q24) 7.0 (4Q24) Central bank policy rate (%, max) 2 6.0 (1Q24) 6.1 (1Q24) 6.4 (1Q24) 4.1 (3Q24) 5.2 (1Q24) 6.1 (1Q24) 12.7 (3Q24) 1 Cumulative change to the lowest level of the series during the 20-quarter projection. 2 The highest projected unemployment or policy interest rate in the scenario. For mainland China, rate shown is the Loan Prime Rate. In prior periods, including the 4Q23 disclosure, the reference rate shown for mainland China was the Lending Rate. 3 The highest projected year-on-year percentage change in inflation in the scenario. 184 HSBC Holdings plc Annual Report on Form 20-F Risk review The following graphs show the historical and forecasted GDP growth rate for the various economic scenarios in our four largest markets. Hong Kong Mainland China UK US Scenario weighting Scenario weightings are calibrated to probabilities that are determined with reference to consensus forecast probability distributions. Management may then choose to vary weights if they assess that the calibration lags more recent events, or does not reflect their view of the distribution of economic and geopolitical risk. Management’s view of the scenarios and the probability distribution takes into consideration the relationship of the consensus scenario to both internal and external assessments of risk. In assessing the economic environment and the level of risk and uncertainty, management has considered both global and country- specific factors. In the fourth quarter of 2024, key considerations around uncertainty focused on: – US import tariffs and bilateral tariff escalations globally, and the impact on trade and manufacturing supply chains; – the extent and success of mainland China in deploying fiscal and monetary support to secure economic growth and underpin a recovery in the real estate market; – prospects for recovery in the Hong Kong residential property market; – the implications of changes to monetary policy expectations on growth and employment; – estimation and forecast uncertainty for UK unemployment given ongoing methodology updates at the Office for National Statistics; and – risks of an asset price correction given elevated valuations across different asset classes. Although these factors are significant, management assessed that following the tariff-based adjustment, the Central scenario reflected the most likely future economic outcome and that outer scenarios were sufficiently well calibrated to address the crystallisation of more severe risks. This led management to assign scenario probabilities that are aligned to the standard scenario probability calibration framework in all major markets. The Central scenario was assigned a 75 % probability weighting in our major markets. The consensus Upside scenario was assigned a 10 % weighting, and the consensus Downside scenario was given 10 % . The Downside 2 was assigned a 5 % weighting. In support of the decision, it was noted that the effect of higher tariffs would be most negative in mainland China and Hong Kong, as it would limit trade growth (a significant growth driver in 2024) substantially and lead to weaker domestic demand. The adjustment to the Central scenario reflected this assumption. In the UK, tariffs have a small direct impact on GDP growth forecasts in the Central scenario, but indirect effects would be larger through weaker trade and lower global growth. The outlook also remains weak given the only partially offsetting impacts from measures announced in the 2024-25 Budget and higher US interest rates. For the US, the Central scenario reflects expectations that economic growth will slow in 2025 as households and businesses adjust to higher inflation, lower labour supply and elevated interest rates. HSBC Holdings plc Annual Report on Form 20-F 185 The impact from tariffs is minimal for the UAE, as trade with the US is small, but it is assumed to be affected through secondary channels, including a stronger US dollar and higher interest rates. It was also observed that geopolitical risks have remained high since the outbreak of conflict in the Middle East, but economic and market impacts have been limited and oil production remains unaffected. Escalation risks were assessed to be consistent with the probabilities assigned to the Downside scenario. Management concluded that Mexico is likely to be one of the most heavily affected countries from US tariff policies and that the impacts are reflected in the scenarios. GDP growth forecasts in the Central scenario are lower than in previous periods, and inflation and interest rates are higher, in part due to an expected deprecation of the Mexican peso. In France, recent domestic political uncertainty is the main factor weighing on reduced growth prospects, and as with other European markets, there are also assumed to be negative impacts stemming from higher US tariffs. The following tables describe the probabilities assigned in each scenario. Scenario weightings, % Standard weights UK US Hong Kong Mainland China Canada France UAE Mexico 4Q24 Upside scenario 10 10 10 10 10 10 10 10 10 Central scenario 75 75 75 75 75 75 75 75 75 Downside scenario 10 10 10 10 10 10 10 10 10 Downside 2 scenario 5 5 5 5 5 5 5 5 5 4Q23 Upside scenario 10 10 10 10 10 10 10 10 10 Central scenario 75 75 75 75 75 75 75 75 75 Downside scenario 10 10 10 10 10 10 10 10 10 Downside 2 scenario 5 5 5 5 5 5 5 5 5 At 31 December 2024, the consensus Upside and Central scenarios for all markets had a combined weighting of 85 % , unchanged as at 31 December 2023. Weightings assigned to downside scenarios also remained unchanged. Critical estimates and judgements The calculation of ECL under IFRS 9 involved significant judgements, assumptions and estimates at 31 December 2024. These included: – the selection and configuration of economic scenarios, given the constant change in economic conditions and distribution of economic risks; and – estimating the economic effects of those scenarios on ECL, where similar observable historical conditions cannot be captured by the credit risk models. How economic scenarios are reflected in ECL calculations Models are used to reflect economic scenarios in ECL estimates. As described above, modelled assumptions and linkages based on historical information could not alone produce relevant information under the conditions experienced in 2024, and management judgemental adjustments were still required to support modelled outcomes. We have developed globally consistent methodologies for the application of forward economic guidance into the calculation of ECL for wholesale and retail credit risk. These standard approaches are described below, followed by the management judgemental adjustments made, including those to reflect the circumstances experienced in 2024. For our wholesale portfolios, a global methodology is used for the estimation of the term structure of probability of default (‘PD’) and loss given default (‘LGD’). For PDs, we consider the correlation of forward economic guidance to default rates for a particular industry in a country. For LGD calculations, we consider the correlation of forward economic guidance to collateral values and realisation rates for a particular country and industry. PDs and LGDs are estimated for the entire term structure of each instrument. For impaired loans, allowance for ECL estimates are derived based on discounted cash flow (‘DCF’) calculations for internal forward-looking scenarios specific to individual borrower circumstances ( see page 381 ) . Probability-weighted outcomes are applied, and depending on materiality and status of the borrower, the number of scenarios considered will change. Where relevant for the case being assessed, forward economic guidance is incorporated as part of these scenarios. LGD-driven proxy and modelled estimates are used for certain less material cases. For our retail portfolios, the models are predominantly based on historical observations and correlations with default rates and collateral values. For PD, the impact of economic scenarios is modelled for each portfolio, using historical relationships between default rates and macroeconomic variables. These are included within IFRS 9 ECL estimates using either economic response models or models that contain internal, external and macroeconomic variables. The macroeconomic impact on PD is modelled over the period equal to the remaining maturity of the assets. For LGD, the impact is modelled for mortgage portfolios by forecasting future loan-to-value profiles for the remaining maturity of the asset, using national level house price index forecasts and applying the corresponding LGD expectation relative to the updated forecast collateral values. For unsecured retail portfolios historically observed recovery rates are leveraged to measure loss. For both mortgages and unsecured, a limited number of portfolios utilise a macroeconomic dependent stressed LGD applied to the Downside 2 scenario. Management judgemental adjustments In the context of IFRS 9, management judgemental adjustments are typically short-term increases or decreases to the modelled allowance for ECL at either a customer, segment or portfolio level where management believes allowances do not sufficiently reflect the credit risk/expected credit losses at the reporting date. These can relate to risks or uncertainties that are not reflected in the models and/or to any late-breaking events with significant uncertainty, subject to management review and challenge. This includes refining model inputs and outputs and using adjustments to ECL based on management judgement and quantitative analysis for impacts that are difficult to model. The effects of management judgemental adjustments are considered for both balances and allowance for ECL when determining whether or not a significant increase in credit risk has occurred and is allocated to a stage where appropriate. This is in accordance with the internal adjustments framework. 186 HSBC Holdings plc Annual Report on Form 20-F Risk review Management judgemental adjustments are reviewed under the governance process for IFRS 9 (as detailed in the section ‘Credit risk management’ on page 169 ). Review and challenge focuses on the rationale and quantum of the adjustments with a further review carried out by the second line of defence where significant. For some management judgemental adjustments, internal frameworks establish the conditions under which these adjustments should no longer be required and as such are considered as part of the governance process. This internal governance process allows management judgemental adjustments to be reviewed regularly and, where possible, to reduce the reliance on these through model recalibration or redevelopment, as appropriate. The drivers of management judgemental adjustments continue to evolve with the economic environment and as new risks emerge. In addition to management judgemental adjustments there are also ‘Other adjustments’, which are made to address process limitations and data/model deficiencies and can also include, where appropriate, the impact of new models where governance has sufficiently progressed to allow an accurate estimate of ECL allowance to be incorporated into the total reported ECL. ‘Management judgemental adjustments’ and ‘Other adjustments’ constitute the total value of adjustments to modelled allowance for ECL. For the wholesale portfolio, defaulted exposures are assessed individually and management judgemental adjustments are made only to the performing portfolio. At 31 December 2024, there was a $ 0.6 b n reduction in management judgemental adjustments compared with 31 December 2023. This was driven by retail due to reductions in economic uncertainty, primarily in the UK and Asia, and model redevelopments which captured macro-economic risks more effectively. Management judgemental adjustments made in estimating the scenario-weighted reported allowance for ECL at 31 December 2024 are set out in the following table. Management judgemental adjustments to ECL at 31 December 2024 1 Retail Wholesale 2 Total $bn $bn $bn Modelled ECL (A) 3 2.6 2.0 4.6 Banks, sovereigns, government entities and low-risk counterparties 0.0 0.0 Corporate lending adjustments 0.1 0.1 Inflation related adjustments 0.0 0.0 Other credit judgements 0.0 0.0 Total management judgemental adjustments (B) 4 0.0 0.1 0.1 Other adjustments (C) 5 ( 0.0 ) 0.1 0.1 Final ECL (A + B + C) 6 2.6 2.2 4.8 Management judgemental adjustments to ECL at 31 December 2023 1,7 Retail Wholesale 2 Total $bn $bn $bn Modelled ECL (A) 3 2.6 2.4 5.0 Banks, sovereigns, government entities and low-risk counterparties 0.0 0.0 Corporate lending adjustments 0.1 0.1 Inflation-related adjustments 0.1 0.1 Other credit judgements 0.5 0.5 Total management judgemental adjustments (B) 4 0.6 0.1 0.7 Other adjustments (C) 5 ( 0.0 ) 0.0 0.0 Final ECL (A + B + C) 6 3.2 2.5 5.7 1 Management judgemental adjustments presented in the table reflect increases or (decreases) to allowance for ECL, respectively. 2 The wholesale portfolio corresponds to adjustments to the performing portfolio (stage 1 and stage 2). 3 (A) refers to probability-weighted allowance for ECL before any adjustments are applied. 4 (B) refers to adjustments that are applied where management believes allowance for ECL does not sufficiently reflect the credit risk/expected credit losses of any given portfolio at the reporting date. These can relate to risks or uncertainties that are not reflected in the model and/or to any late-breaking events. 5 (C) refers to adjustments to allowance for ECL made to a ddress process limitations and data/model deficiencies and can also include where appropriate, the impact of new models where governance has sufficiently progressed to allow an accurate estimate of ECL allowance to be incorporated into the total reported ECL. 6 As presented within our internal credit risk governance (see page 169 ) . 7 31 December 2023 includes the Canada, Argentina, Armenia and Oman businesses and retail banking operations in France. Management judgemental adjustments at 31 December 2024 were an increase to allowance for ECL of $ 0.1 b n for the wholesale portfolio and $ 0.0 b n for the retail portfolio. At 31 December 2024, wholesale management judgemental adjustments were an increase to allowance for ECL of $ 0.1 b n (31 December 2023: $ 0.1 bn increase). These were mainly to corporate exposures to reflect heightened uncertainty in specific sectors and geographies, including offsetting adjustments to the real estate sector in mainland China, Hong Kong and the US, and adjustments to exposures to the automotive and industrial sectors in Germany. At 31 December 2024, retail management judgemental adjustments to allowance for ECL were $ 0.0 b n (31 December 2023 $ 0.6 b n). The reduction in adjustments compared with 31 December 2023 for inflation-related adjustments was primarily due to the reduction of inflation related risk in the UK and the sale of the Canadian banking business. Other credit judgements decreased due to reductions in economic uncertainty, primarily in the UK and Asia, and model redevelopments which captured macro-economic risks more effectively. Economic scenarios sensitivity analysis of ECL estimates Management considered the sensitivity of the ECL outcome against the economic forecasts as part of the ECL governance process by recalculating the allowance for ECL under each scenario described above for selected portfolios, applying a 100% weighting to each scenario in turn. The weighting is reflected in both the determination of a significant increase in credit risk and the measurement of the resulting allowances. HSBC Holdings plc Annual Report on Form 20-F 187 The allowance for ECL calculated for the Upside and Downside scenarios should not be taken to represent the upper and lower limits of possible ECL outcomes. The impact of defaults that might occur in the future under different economic scenarios is captured by recalculating allowances for loans at the balance sheet date. There is a particularly high degree of estimation uncertainty in numbers representing tail risk scenarios when assigned a 100 % weighting. For wholesale credit risk exposures, the sensitivity analysis excludes allowance for ECL and financial instruments related to defaulted (stage 3) obligors. The measurement of stage 3 ECL is relatively more sensitive to credit factors specific to the obligor than future economic scenarios, and therefore the effects of macroeconomic factors are not necessarily the key consideration when performing individual assessments of allowances for obligors in default. Loans to defaulted obligors are a small portion of the overall wholesale lending exposure, even if representing the majority of the allowance for ECL. Due to the range and specificity of the credit factors to which the ECL is sensitive, it is not possible to provide a meaningful alternative sensitivity analysis for a consistent set of risks across all defaulted obligors. For retail mortgage exposures the sensitivity analysis includes allowance for ECL for defaulted obligors of loans and advances. This is because the retail ECL for secured mortgage portfolios, including loans in all stages, is sensitive to macroeconomic variables. Wholesale and retail sensitivity The wholesale and retail sensitivity tables present the 100 % weighted results. These exclude portfolios held by the insurance business and small portfolios, and as such cannot be directly compared with personal and wholesale lending presented in other credit risk tables. In both the wholesale and retail analysis, the comparative period results for Downside 2 scenarios are also not directly comparable with the current period, because they reflect different risks relative to the consensus scenarios for the period end. The wholesale and retail sensitivity analysis is stated inclusive of management judgemental adjustments, as appropriate to each scenario. For both retail and wholesale portfolios, the gross carrying amount of financial instruments are the same under each scenario. For exposures with similar risk profile and product characteristics, the sensitivity impact is therefore largely the result of changes in macroeconomic assumptions. Wholesale analysis IFRS 9 ECL sensitivity to future economic conditions 1,2,3 Reported Gross carrying amount 4 Reported allowance for ECL Consensus Central scenario allowance for ECL Consensus Upside scenario allowance for ECL Consensus Downside scenario allowance for ECL Downside 2 scenario allowance for ECL By geography at 31 Dec 2024 $m $m $m $m $m $m UK 432,160 717 667 526 850 2,389 US 202,888 216 201 205 247 461 Hong Kong 450,966 659 616 465 906 1,496 Mainland China 137,960 178 141 84 329 886 Mexico 34,713 69 61 46 86 302 UAE 58,909 51 49 40 58 120 France 184,591 82 80 69 97 125 Other geographies 5 455,823 234 216 176 304 774 Total 1,958,010 2,205 2,031 1,612 2,877 6,555 of which: Stage 1 1,830,264 689 632 494 797 803 Stage 2 127,746 1,516 1,399 1,118 2,080 5,751 By geography at 31 Dec 2023 UK 426,427 820 754 599 1,041 2,487 US 191,104 215 199 189 268 441 Hong Kong 447,480 609 566 433 807 1,393 Mainland China 129,945 258 217 142 414 945 Canada 5 84,092 89 75 56 107 487 Mexico 30,159 60 56 46 73 226 UAE 52,074 32 32 30 34 40 France 178,827 98 102 90 124 141 Other geographies 5,7 450,271 325 298 245 410 882 Total 1,990,378 2,507 2,301 1,829 3,278 7,043 of which: Stage 1 1,820,843 754 702 553 860 854 Stage 2 169,535 1,753 1,599 1,276 2,418 6,189 1 Allowance for ECL sensitivity includes off-balance sheet financial instruments. These are subject to significant measurement uncertainty. 2 Includes low credit-risk financial instruments such as debt instruments at FVOCI, which have high carrying amounts but low ECL under all the above scenarios. 3 Excludes defaulted obligors. For a detailed breakdown of performing and non-performing wholesale portfolio exposures, see page 200 . 4 Staging refers only to probability-weighted/reported gross carrying amount. Stage allocation of gross exposures varies by scenario, with higher allocation to stage 2 under the Downside 2 scenario. 5 Includes small portfolios that use less complex modelling approaches and are not sensitive to macroeconomic changes. 6 Classified as held for sale at 31 December 2023. 7 Includes the Argentina and Armenia businesses, which were sold in 2024. 188 HSBC Holdings plc Annual Report on Form 20-F Risk review At 31 December 2024, the highest level of 100 % scenario-weighted allowance for ECL was observed in the UK and Hong Kong under the Downside 2 scenario, driven primarily by a larger exposure to those geographies, namely in the real estate sector. In relation to the underlying exposure, mainland China and Mexico have the higher Downside 2 ECL coverage, mostly due to the relatively larger proportion of higher risk exposures in those geographies. Compared with 31 December 2023, the Downside 2 ECL impact reduced by $ 0.5 b n mostly due to the sale of the Canada business while observing offsetting impacts driven by updates to our forward economic scenarios. In the wholesale portfolio, off-balance sheet financial instruments have a lower likelihood to be fully converted to a funded exposure at the point of default, and consequently the sensitivity of the allowance for ECL is lower in relation to its nominal amount, when compared with an on-balance sheet exposure with a similar risk profile. Retail analysis IFRS 9 ECL sensitivity to future economic conditions 1 Reported gross carrying amount Reported allowance for ECL Consensus Central scenario allowance for ECL Consensus Upside scenario allowance for ECL Consensus Downside scenario allowance for ECL Downside 2 scenario allowance for ECL By geography at 31 Dec 2024 $m $m $m $m $m $m UK Mortgages 163,541 126 117 107 132 288 Credit cards 7,415 280 275 265 276 447 Other 8,249 241 233 217 243 351 Mexico Mortgages 7,482 165 162 155 168 215 Credit cards 2,227 337 333 330 338 423 Other 3,722 419 416 413 422 593 Hong Kong Mortgages 106,866 5 5 4 5 10 Credit cards 9,419 293 275 268 300 770 Other 6,210 106 102 101 105 249 UAE Mortgages 1,993 8 8 8 8 8 Credit cards 536 31 31 31 31 35 Other 688 17 17 17 17 19 US Mortgages 16,965 6 6 6 6 8 Credit cards 193 15 14 14 15 17 Other geographies Mortgages 51,064 131 127 124 136 180 Credit cards 3,500 162 159 156 164 223 Other 2,292 72 72 69 73 93 Total 392,361 2,413 2,351 2,285 2,440 3,928 of which: mortgages 347,910 440 425 405 456 708 Stage 1 311,875 51 47 43 58 129 Stage 2 33,761 126 117 107 129 275 Stage 3 2,274 263 261 255 269 304 of which: credit cards 23,290 1,116 1,086 1,064 1,124 1,915 Stage 1 19,915 276 267 258 284 701 Stage 2 3,107 655 634 621 656 1,027 Stage 3 267 185 185 185 185 188 of which: others 21,161 856 839 816 860 1,305 Stage 1 18,574 216 204 193 217 532 Stage 2 2,005 360 355 343 363 483 Stage 3 583 279 279 279 279 290 HSBC Holdings plc Annual Report on Form 20-F 189 IFRS 9 ECL sensitivity to future economic conditions 1,2 Reported gross carrying amount Reported allowance for ECL Consensus Central scenario allowance for ECL Consensus Upside scenario allowance for ECL Consensus Downside scenario allowance for ECL Downside 2 scenario allowance for ECL By geography at 31 Dec 2023 $m $m $m $m $m $m UK Mortgages 161,127 189 180 172 201 334 Credit cards 7,582 344 340 302 353 486 Other 8,183 341 333 273 383 515 Mexico Mortgages 8,666 188 180 150 235 363 Credit cards 2,445 295 286 206 376 489 Other 4,529 513 503 426 600 731 Hong Kong Mortgages 106,136 2 2 1 3 5 Credit cards 9,128 287 239 214 395 887 Other 6,269 109 100 88 124 256 UAE Mortgages 2,001 25 25 25 25 25 Credit cards 471 24 24 22 25 32 Other 721 20 20 19 21 28 France Mortgages 20,589 50 50 50 51 51 Other 1,328 44 44 43 45 48 US Mortgages 14,385 8 4 3 4 10 Credit cards 204 15 15 10 15 16 Canada Mortgages 25,464 67 65 64 70 99 Credit cards 338 13 13 12 16 15 Other 1,368 13 13 12 14 33 Other geographies Mortgages 55,368 152 149 144 158 198 Credit cards 3,655 173 166 151 202 291 Other 2,416 91 86 83 95 137 Total 442,373 2,962 2,835 2,471 3,411 5,049 of which: mortgages 393,736 681 655 609 747 1,085 Stage 1 347,874 101 92 77 145 303 Stage 2 43,451 264 249 225 280 429 Stage 3 2,412 316 314 307 322 352 of which: credit cards 23,822 1,150 1,082 918 1,381 2,217 Stage 1 18,557 249 232 180 329 604 Stage 2 4,953 707 657 546 859 1,415 Stage 3 312 193 193 192 194 197 of which: others 24,815 1,131 1,098 944 1,283 1,748 Stage 1 19,551 218 205 151 272 501 Stage 2 4,542 540 519 423 636 868 Stage 3 722 373 373 370 375 379 1 Allowance for ECL sensitivities exclude portfolios utilising less complex modelling approaches. 2 Included balances and allowance for ECL which had been reclassified from ‘loans and advances to customers’ to ‘assets held for sale’ in the balance sheet at 31 December 2023. This also included any balances and allowance for ECL which continued to be reported as personal lending in ‘loans and advances to customers’ that are in accordance with the basis of inclusion for retail sensitivity analysis. This includes the Canada, Argentina businesses and retail banking operations in France. At 31 December 2024 , the most significant level of allowance for ECL sensitivity was observed in the UK, Mexico and Hong Kong. Mortgages reflected the lowest level of allowance for ECL sensitivity across most markets given the significant levels of collateral relative to the exposure values. Credit cards and other unsecured lending across stages 1 and 2 are more sensitive to economic forecasts and therefore reflected the highest level of allowance for ECL sensitivity during 2024 . There was a reduction in the total sensitivity for ECL allowance in all scenarios compared with 31 December 2023, due to banking portfolio sales, reduction of management judgemental adjustments, model redevelopments and scenario evolution. There is limited sensitivity in credit cards and other unsecured lending in stage 3 as levels of loss on defaulted exposures remain consistent through various economic conditions. The Downside 2 scenario is from the tail of the economic distribution where allowance for ECL is more sensitive based on historical experience and includes a macroeconomic-dependent stressed LGD for a limited number of portfolios. The reported gross carrying amount by stage is representative of the weighted scenario allowance for ECL. The allowance for ECL sensitivity to the other scenarios includes changes in allowance for ECL due to the levels of loss and the migration of additional lending balances in or out of stage 2. 190 HSBC Holdings plc Annual Report on Form 20-F Risk review Group ECL sensitivity results The allowance for ECL of the scenarios and management judgemental adjustments is highly sensitive to movements in economic forecasts. Based upon the sensitivity tables presented above, if the Group allowance for ECL balance was estimated solely on the basis of the Central scenario, Downside scenario or the Downside 2 scenario at 31 December 2024 , it would increase/(decrease) as presented in the below table. Total Group ECL at 31 December 2024 Retail 1 Wholesale 1 $bn $bn Reported allowance for ECL 2.4 2.2 Scenarios 100 % Consensus Central scenario ( 0.1 ) ( 0.2 ) 100 % Consensus Upside scenario ( 0.1 ) ( 0.6 ) 100 % Consensus Downside scenario 0.0 0.7 100 % Downside 2 scenario 1.5 4.3 Total Group ECL at 31 December 2023 Reported allowance for ECL 3.0 2.5 Scenarios 100 % Consensus Central scenario ( 0.1 ) ( 0.2 ) 100 % Consensus Upside scenario ( 0.5 ) ( 0.7 ) 100 % Consensus Downside scenario 0.4 0.8 100 % Downside 2 scenario 2.1 4.5 1 On the same basis as retail and wholesale sensitivity analysis. At 31 December 2024, the Group allowance for ECL decreased in the retail portfolio by $ 0.6 b n and decreased by $ 0.3 b n in the wholesale portfolio, compared with 31 December 2023. There was also a reduction in allowance for ECL sensitivity across all scenarios within the retail and wholesale portfolios since 31 December 2023, primarily as a result of the sale of our Canada banking business, the sale of our retail banking operations in France, and various other business sales during the first half of 2024. For the wholesale portfolio this was the main driver of the decrease in Downside 2 ECL sensitivity. For the retail portfolios the ECL sensitivity decrease across all scenarios including the Downside 2 was also primarily due to the r eduction of management judgemental adjustments, model redevelopments and scenario evolution. Reconciliation from reported exposure and ECL to sensitised exposure and weighted ECL Wholesale Retail Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m Included in sensitivity analysis 1,958,010 ( 2,205 ) 392,361 ( 2,413 ) 2,350,371 ( 4,618 ) –  Exclusions from sensitivity as described in the section above 1 20,409 ( 5,419 ) 309,178 ( 124 ) 329,587 ( 5,543 ) –  Debt instruments measured at fair value through other comprehensive income 2 ( 346,124 ) 54 — — ( 346,124 ) 54 –  Performance guarantees 2 ( 92,722 ) 311 — — ( 92,722 ) 311 –  Other financial assets at amortised cost not presented as wholesale or personal lending, including held for sale 2 ( 568,668 ) 141 ( 130 ) — ( 568,798 ) 141 –  Other 3 5,978 ( 441 ) 498 ( 9 ) 6,476 ( 450 ) As reported in the Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 Dec 2024 976,883 ( 7,559 ) 701,907 ( 2,546 ) 1,678,790 ( 10,105 ) Other financial assets at amortised cost 828,580 ( 92 ) Total reported in the Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 Dec 2024 2,507,370 ( 10,197 ) HSBC Holdings plc Annual Report on Form 20-F 191 Reconciliation from reported exposure and ECL to sensitised exposure and weighted ECL (continued) Wholesale Retail Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m Included in sensitivity analysis 1,990,378 ( 2,507 ) 442,373 ( 2,962 ) 2,432,751 ( 5,469 ) –  Exclusions from sensitivity as described in the section above 1 17,024 ( 6,237 ) 308,569 ( 93 ) 325,593 ( 6,330 ) –  Debt instruments measured at fair value through other comprehensive income 2 ( 302,348 ) 97 — — ( 302,348 ) 97 –  Performance guarantees 2 ( 93,312 ) 35 — — ( 93,312 ) 35 –  Other financial assets at amortised cost not presented as wholesale or personal lending, including held for sale 2 ( 579,534 ) 93 ( 41,129 ) 174 ( 620,663 ) 267 –  Other 3 2,704 ( 84 ) ( 4,175 ) ( 11 ) ( 1,471 ) ( 95 ) As reported in the Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 Dec 2023 1,034,912 ( 8,603 ) 705,638 ( 2,892 ) 1,740,550 ( 11,495 ) Other financial assets at amortised cost 960,271 ( 422 ) Total reported in the Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector at 31 Dec 2023 2,700,821 ( 11,917 ) 1 Comprises wholesale defaulted obligors, retail portfolios utilising less complex modelling approaches, private banking and insurance. 2 The sensitivity analysis includes certain items reported in Other assets at amortised cost, which are not allocated to an industry in the credit tables. It also includes FVOCI and performance guarantees, which are presented separately in the credit tables. 3 Includes FX and other operational variances. Reconciliations of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees The following disclosure provides a reconciliation by stage of the Group’s gross carrying/nominal amount and allowances for loans and advances to banks and customers, including loan commitments and financial guarantees. In addition, a reconciliation by stage of the Group’s gross carrying amount and allowances for loans and advances to banks and customers and a reconciliation by stage of the Group’s nominal amount and allowances for loan commitments and financial guarantees, were included in this section following adoption of the recommendations of the third report from The Taskforce on Disclosures about Expected Credit Losses (‘DECL’). Movements are calculated on a quarterly basis and therefore fully capture stage movements between quarters. If movements were calculated on a year-to-date basis they would only reflect the opening and closing position of the financial instrument. The transfers of financial instruments represents the impact of stage transfers upon the gross carrying/nominal amount and associated allowance for ECL. The net remeasurement of ECL arising from transfer of stage represents the increase or decrease due to these transfers, for example, moving from a 12-month (stage 1) to a lifetime (stage 2) ECL measurement basis. Net remeasurement excludes the underlying customer risk rating (‘CRR’)/probability of default (‘PD’) movements of the financial instruments transferring stage. This is captured, along with other credit quality movements in the ‘changes to risk parameters – credit quality’ line item. Changes in ‘Net new and further lending/repayments’ represents the impact from volume movements within the Group’s lending portfolio and includes ‘New financial assets originated or purchased’, ‘assets derecognised (including final repayments)’ and ‘changes to risk parameters – further lending/repayment’. 192 HSBC Holdings plc Annual Report on Form 20-F Risk review Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 1,496,805 ( 1,300 ) 153,084 ( 3,102 ) 20,799 ( 7,063 ) 85 ( 30 ) 1,670,773 ( 11,495 ) Transfers of financial instruments: ( 19,629 ) ( 1,259 ) 6,652 2,302 12,977 ( 1,043 ) — — — — – transfers from stage 1 to stage 2 ( 116,211 ) 419 116,211 ( 419 ) — — — — — — – transfers from stage 2 to stage 1 98,731 ( 1,627 ) ( 98,731 ) 1,627 — — — — — — –  transfers to stage 3 ( 2,799 ) 16 ( 12,230 ) 1,321 15,029 ( 1,337 ) — — — — –  transfers from stage 3 650 ( 67 ) 1,402 ( 227 ) ( 2,052 ) 294 — — — — Net remeasurement of ECL arising from transfer of stage — 959 — ( 831 ) — ( 144 ) — — — ( 16 ) Changes due to modifications not derecognised — — — — ( 25 ) — — — ( 25 ) — Net new and further lending/repayments 87,833 ( 168 ) ( 37,731 ) 589 ( 5,246 ) 1,689 7 ( 7 ) 44,863 2,103 Changes to risk parameters – credit quality — 363 — ( 1,773 ) — ( 3,945 ) — ( 11 ) — ( 5,366 ) Changes to models used for ECL calculation — 68 — ( 4 ) — ( 20 ) — — — 44 Assets written off — — — — ( 4,459 ) 4,459 — — ( 4,459 ) 4,459 Credit-related modifications that resulted in derecognition — — — — — — — — — — Foreign exchange and others 1, 2, 3 ( 75,322 ) 105 ( 6,107 ) 145 ( 223 ) ( 81 ) 1 ( 3 ) ( 81,651 ) 166 At 31 Dec 2024 1,489,687 ( 1,232 ) 115,898 ( 2,674 ) 23,823 ( 6,148 ) 93 ( 51 ) 1,629,501 ( 10,105 ) ECL income statement change for the period 1,222 ( 2,019 ) ( 2,420 ) ( 18 ) ( 3,235 ) Recoveries 260 Others ( 158 ) Total ECL income statement change for the period ( 3,133 ) 1 Total includes $ 3.7 b n of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 46 m , reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . 2 Total includes $ 35.3 b n of nominal amount and $ 21 m of corresponding allowance for ECL related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. 3 Total includes $ 2.7 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Argentina during 2024. At 31 Dec 2024 12 months ended 31 Dec 2024 Gross carrying/ nominal amount Allowance for ECL ECL charge $m $m $m As above 1,629,501 ( 10,105 ) ( 3,133 ) Other financial assets measured at amortised cost 828,580 ( 92 ) ( 114 ) Non-trading reverse purchase agreement commitments 49,289 — — Performance and other guarantees not considered for IFRS 9 — — ( 173 ) Summary of financial instruments to which the impairment requirements in IFRS 9 are applied/Summary consolidated income statement 2,507,370 ( 10,197 ) ( 3,420 ) Debt instruments measured at FVOCI 346,124 ( 54 ) 6 Total allowance for ECL/total income statement ECL change for the period n/a ( 10,251 ) ( 3,414 ) As shown in the previous table, the allowance for ECL for loans and advances to customers and banks and relevant loan commitments and financial guarantees decreased $ 1,390 m during the period from $ 11,495 m at 31 December 2023 to $ 10,105 m at 31 December 2024 . This decrease was driven by: – $ 4,459 m of assets written off; – $ 2,103 m relating to volume movements, which included the allowance for ECL associated with new originations, assets derecognised and further lending/repayment; – foreign exchange and other movements of $ 166 m ; and – $ 44 m of changes to models used for ECL calculation. HSBC Holdings plc Annual Report on Form 20-F 193 These were partly offset by: – $ 5,366 m relating to credit quality changes, including the credit quality impact of financial instruments transferring between stages; and – $ 16 m relating to the net remeasurement impact of stage transfers. The ECL charge for the period of $ 3,235 m presented in the previous table consisted of $ 5,366 m relating to credit quality changes, including the credit quality impact of financial instruments transferring between stages and $ 16 m relating to the net remeasurement impact of stage transfers. This was partly offset by $ 2,103 m relating to underlying net book volume movement and $ 44 m in changes to models used for ECL calculation. Summary views of the movement in wholesale and personal lending are presented on pages 203 and 215 . Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross exposure Allowance/ provision for ECL Gross exposure Allowance/ provision for ECL Gross exposure Allowance/ provision for ECL Gross exposure Allowance/ provision for ECL Gross exposure Allowance/ provision for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2023 1,433,643 ( 1,257 ) 177,223 ( 3,710 ) 21,207 ( 6,949 ) 129 ( 38 ) 1,632,202 ( 11,954 ) Transfers of financial instruments: ( 18,948 ) ( 1,048 ) 10,286 2,228 8,662 ( 1,180 ) — — — — –  transfers from stage 1 to stage 2 ( 150,728 ) 442 150,728 ( 442 ) — — — — — — –  transfers from stage 2 to stage 1 133,079 ( 1,467 ) ( 133,079 ) 1,467 — — — — — — –  transfers to stage 3 ( 1,986 ) 23 ( 8,600 ) 1,379 10,586 ( 1,402 ) — — — — –  transfers from stage 3 687 ( 46 ) 1,237 ( 176 ) ( 1,924 ) 222 — — — — Net remeasurement of ECL arising from transfer of stage — 917 — ( 973 ) — ( 124 ) — — — ( 180 ) Net new and further lending/ repayments 77,693 ( 185 ) ( 36,795 ) 661 ( 4,956 ) 1,117 ( 36 ) 3 35,906 1,596 Changes to risk parameters – credit quality — 307 — ( 1,262 ) — ( 3,896 ) — 21 — ( 4,830 ) Changes to models used for ECL calculation — ( 22 ) — 46 — 7 — — — 31 Assets written off — — — — ( 3,922 ) 3,922 — — ( 3,922 ) 3,922 Credit-related modifications that resulted in derecognition — — — — ( 119 ) 95 — — ( 119 ) 95 Foreign exchange and others 1 4,417 ( 12 ) 2,370 ( 92 ) ( 73 ) ( 55 ) ( 8 ) ( 16 ) 6,706 ( 175 ) At 31 Dec 2023 1,496,805 ( 1,300 ) 153,084 ( 3,102 ) 20,799 ( 7,063 ) 85 ( 30 ) 1,670,773 ( 11,495 ) ECL income statement change for the period 1,017 ( 1,528 ) ( 2,896 ) 24 ( 3,383 ) Recoveries 268 Others — — — — — — — — — ( 195 ) Total ECL income statement change for the period ( 3,310 ) 1 Total includes $ 7.7 b n of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 70 m , reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . (Audited) At 31 Dec 2023 12 months ended 31 Dec 2023 Gross carrying/ nominal amount Allowance for ECL ECL charge $m $m $m As above 1,670,773 ( 11,495 ) ( 3,310 ) Other financial assets measured at amortised cost 960,271 ( 422 ) ( 35 ) Non-trading reverse purchase agreement commitments 69,777 — — Performance and other guarantees not considered for IFRS 9 — — ( 44 ) Summary of financial instruments to which the impairment requirements in IFRS 9 are applied/Summary consolidated income statement 2,700,821 ( 11,917 ) ( 3,389 ) Debt instruments measured at FVOCI 302,348 ( 97 ) ( 58 ) Total allowance for ECL/total income statement ECL change for the period n/a ( 12,014 ) ( 3,447 ) 194 HSBC Holdings plc Annual Report on Form 20-F Risk review Reconciliation of changes in gross carrying amount and allowances for loans and advances to banks and customers Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 920,863 (1,140) 122,307 (2,967) 19,275 (6,952) 81 (30) 1,062,526 (11,089) Transfers of financial instruments: (19,794) (1,227) 7,344 2,259 12,450 (1,032) — — — — –  transfers from stage 1 to stage 2 (90,611) 404 90,611 (404) — — — — — — –  transfers from stage 2 to stage 1 72,935 (1,580) (72,935) 1,580 — — — — — — –  transfers to stage 3 (2,559) 16 (11,512) 1,310 14,071 (1,326) — — — — –  transfers from stage 3 441 (67) 1,180 (227) (1,621) 294 — — — — Net remeasurement of ECL arising from transfer of stage — 932 — (801) — (144) — — — (13) Changes due to modifications not derecognised — — — — (25) — — — (25) — Net new and further lending/ repayments 52,439 (161) (33,154) 570 (4,535) 1,606 7 (7) 14,757 2,008 Changes to risk parameters – credit quality — 361 — (1,724) — (3,873) — (11) — (5,247) Changes to models used for ECL calculation — 66 — (18) — (20) — — — 28 Assets written off — — — — (4,459) 4,459 — — (4,459) 4,459 Credit-related modifications that resulted in derecognition — — — — — — — — — — Foreign exchange and others 1 (27,236) 82 (3,051) 133 (89) (86) 2 (3) (30,374) 126 At 31 Dec 2024 926,272 (1,087) 93,446 (2,548) 22,617 (6,042) 90 (51) 1,042,425 (9,728) ECL income statement change for the period 1,198 (1,973) (2,431) (18) (3,224) Recoveries 260 Others (161) Total ECL income statement change for the period (3,125) 1 Total includes $ 3.7 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 46 m, reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . Reconciliation of changes in gross carrying amount and allowances for loans and advances to banks and customers (continued) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL Gross carrying amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2023 879,023 (1,109) 140,816 (3,518) 19,586 (6,851) 129 (38) 1,039,554 (11,516) Transfers of financial instruments: (19,276) (980) 11,250 2,154 8,026 (1,174) — — — — –  transfers from stage 1 to stage 2 (108,758) 423 108,758 (423) — — — — — — –  transfers from stage 2 to stage 1 90,655 (1,382) (90,655) 1,382 — — — — — — –  transfers to stage 3 (1,692) 22 (7,975) 1,367 9,667 (1,389) — — — — –  transfers from stage 3 519 (43) 1,122 (172) (1,641) 215 — — — — Net remeasurement of ECL arising from transfer of stage — 859 — (934) — (118) — — — (193) Net new and further lending/ repayments 55,024 (210) (32,069) 685 (4,233) 1,026 (40) 3 18,682 1,504 Changes to risk parameters – credit quality — 311 — (1,292) — (3,804) — 21 — (4,764) Changes to models used for ECL calculation — (17) — 28 — 7 — — — 18 Assets written off — — — — (3,922) 3,922 — — (3,922) 3,922 Credit-related modifications that resulted in derecognition — — — — (119) 95 — — (119) 95 Foreign exchange and others 1 6,092 6 2,310 (90) (63) (55) (8) (16) 8,331 (155) At 31 Dec 2023 920,863 (1,140) 122,307 (2,967) 19,275 (6,952) 81 (30) 1,062,526 (11,089) ECL income statement change for the period 943 (1,513) (2,889) 24 (3,435) Recoveries 268 Others (203) Total ECL income statement change for the period (3,370) 1 Total includes $7.7 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 70 m, reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . HSBC Holdings plc Annual Report on Form 20-F 195 Reconciliation of changes in nominal amount and allowances for loan commitments and financial guarantees Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 575,942 (160) 30,777 (135) 1,524 (111) 4 — 608,247 (406) Transfers of financial instruments: 165 (32) (692) 43 527 (11) — — — — –  transfers from stage 1 to stage 2 (25,600) 15 25,600 (15) — — — — — — –  transfers from stage 2 to stage 1 25,796 (47) (25,796) 47 — — — — — — –  transfers to stage 3 (240) — (718) 11 958 (11) — — — — –  transfers from stage 3 209 — 222 — (431) — — — — — Net remeasurement of ECL arising from transfer of stage — 27 — (30) — — — — — (3) Net new and further lending/ repayments 35,394 (7) (4,577) 19 (711) 83 — — 30,106 95 Changes to risk parameters – credit quality — 2 — (49) — (72) — — — (119) Changes to models used for ECL calculation — 2 — 14 — — — — — 16 Foreign exchange and others 1,2 (48,086) 23 (3,056) 12 (134) 5 (1) — (51,277) 40 At 31 Dec 2024 563,415 (145) 22,452 (126) 1,206 (106) 3 — 587,076 (377) ECL income statement change for the period 24 (46) 11 — (11) Recoveries — Others 3 Total ECL income statement change for the period (8) 1 Total includes $3 5.3 bn of nominal amount and $ 21 m of corresponding allowance for ECL related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. 2 Total includes $ 2.7 bn of nominal amount  related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Argentina during 2024. Reconciliation of changes in nominal amount and allowances for loan commitments and financial guarantees Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL Nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2023 554,620 (148) 36,407 (192) 1,621 (98) — — 592,648 (438) Transfers of financial instruments: 328 (68) (964) 74 636 (6) — — — — –  transfers from stage 1 to stage 2 (41,970) 19 41,970 (19) — — — — — — –  transfers from stage 2 to stage 1 42,424 (85) (42,424) 85 — — — — — — –  transfers to stage 3 (294) 1 (625) 12 919 (13) — — — — –  transfers from stage 3 168 (3) 115 (4) (283) 7 — — — — Net remeasurement of ECL arising from transfer of stage — 58 — (39) — (6) — — — 13 Net new and further lending/ repayments 22,669 25 (4,726) (24) (723) 91 4 — 17,224 92 Changes to risk parameters – credit quality — (4) — 30 — (92) — — — (66) Changes to models used for ECL calculation — (5) — 18 — — — — — 13 Foreign exchange and others (1,675) (18) 60 (2) (10) — — — (1,625) (20) At 31 Dec 2023 575,942 (160) 30,777 (135) 1,524 (111) 4 — 608,247 (406) ECL income statement change for the period 74 (15) (7) — 52 Recoveries — Others 8 Total ECL income statement change for the period 60 196 HSBC Holdings plc Annual Report on Form 20-F Risk review Credit quality Credit quality of financial instruments (Audited) We assess the credit quality of all financial instruments that are subject to credit risk. The credit quality of financial instruments is a point-in-time assessment of PD, whereas stages 1 and 2 are determined based on relative deterioration of credit quality since initial recognition for the majority of portfolios. Accordingly, for non-credit- impaired financial instruments, there is no direct relationship between the credit quality assessment and stages 1 and 2, although typically the lower credit quality bands exhibit a higher proportion in stage 2. The five credit quality classifications provided below each encompass a range of granular internal credit rating grades assigned to wholesale and personal lending businesses and the external ratings attributed by external agencies to debt securities, as shown in the table on page 170. Distribution of financial instruments by credit quality at 31 December 2024 (Audited) Gross carrying/notional amount Allowance for ECL/ other credit provisions Net Strong Good Satisfactory Sub- standard Credit impaired Total $m $m $m $m $m $m $m $m In-scope for IFRS 9 ECL Loans and advances to customers held at amortised cost 515,266 193,080 186,416 22,906 22,705 940,373 ( 9,715 ) 930,658 –  personal 360,317 53,595 27,774 1,979 3,560 447,225 ( 2,524 ) 444,701 –  corporate and commercial 114,504 118,785 138,705 20,224 18,466 410,684 ( 6,755 ) 403,929 –  non-bank financial institutions 40,445 20,700 19,937 703 679 82,464 ( 436 ) 82,028 Loans and advances to banks held at amortised cost 92,621 4,255 5,040 134 2 102,052 ( 13 ) 102,039 Cash and balances at central banks 266,713 949 12 — — 267,674 — 267,674 Hong Kong Government certificates of indebtedness 42,293 — — — — 42,293 — 42,293 Reverse repurchase agreements – non-trading 155,831 70,877 25,799 42 — 252,549 — 252,549 Financial investments 146,970 3,681 3,331 — — 153,982 ( 9 ) 153,973 Assets held for sale 2,425 458 367 1 22 3,273 ( 4 ) 3,269 Other assets 88,338 9,735 10,151 454 131 108,809 ( 79 ) 108,730 –  endorsements and acceptances 2,101 2,663 3,090 243 10 8,107 ( 14 ) 8,093 –  accrued income and other 86,237 7,072 7,061 211 121 100,702 ( 65 ) 100,637 Debt instruments measured at fair value through other comprehensive income 1 336,313 9,448 7,768 380 — 353,909 ( 54 ) 353,855 Out-of-scope for IFRS 9 ECL Trading assets 119,546 21,951 15,804 2,300 47 159,648 — 159,648 Other financial assets designated and otherwise mandatorily measured at fair value through profit or loss 53,282 11,862 4,390 231 11 69,776 — 69,776 Derivatives 224,870 34,124 9,373 258 12 268,637 — 268,637 Assets held for sale 3,019 — — — — 3,019 — 3,019 Total gross carrying amount on balance sheet 2,047,487 360,420 268,451 26,706 22,930 2,725,994 ( 9,874 ) 2,716,120 Percentage of total credit quality (%) 75.1 13.2 9.9 1.0 0.8 100 Loan and other credit-related commitments 400,120 131,396 77,220 9,670 961 619,367 ( 348 ) 619,019 Financial guarantees 7,365 4,263 4,399 723 248 16,998 ( 29 ) 16,969 In-scope: Irrevocable loan commitments and financial guarantees 407,485 135,659 81,619 10,393 1,209 636,365 ( 377 ) 635,988 Loan and other credit-related commitments 96,952 76,340 65,619 2,847 453 242,211 — 242,211 Performance and other guarantees 39,940 32,956 17,339 1,671 817 92,723 ( 312 ) 92,411 Out-of-scope: Revocable loan commitments and non-financial guarantees 136,892 109,296 82,958 4,518 1,270 334,934 ( 312 ) 334,622 1 For the purposes of this disclosure, gross carrying amount is defined as the amortised cost of a financial asset before adjusting for any loss allowance. As such, the gross carrying amount of debt instruments at FVOCI as presented above will not reconcile to the balance sheet as it excludes fair value gains and losses. HSBC Holdings plc Annual Report on Form 20-F 197 Distribution of financial instruments by credit quality at 31 December 2023 (Audited) Gross carrying/notional amount Allowance for ECL/ other credit provisions Net Strong Good Satisfactory Sub- standard Credit impaired Total $m $m $m $m $m $m $m $m In-scope for IFRS 9 ECL Loans and advances to customers held at amortised cost 497,665 206,476 197,582 28,532 19,354 949,609 ( 11,074 ) 938,535 –  personal 346,562 62,656 32,314 2,485 3,505 447,522 ( 2,867 ) 444,655 –  corporate and commercial 118,123 123,713 145,249 25,531 15,039 427,655 ( 7,803 ) 419,852 –  non-bank financial institutions 32,980 20,107 20,019 516 810 74,432 ( 404 ) 74,028 Loans and advances to banks held at amortised cost 101,057 4,640 6,363 855 2 112,917 ( 15 ) 112,902 Cash and balances at central banks 284,723 1,068 77 — — 285,868 — 285,868 Hong Kong Government certificates of indebtedness 42,024 — — — — 42,024 — 42,024 Reverse repurchase agreements –  non-trading 170,494 46,884 34,206 633 — 252,217 — 252,217 Financial investments 143,333 3,814 1,137 62 — 148,346 ( 20 ) 148,326 Assets held for sale 68,501 16,403 14,812 2,939 531 103,186 ( 324 ) 102,862 Other assets 106,184 11,982 9,965 366 133 128,630 ( 78 ) 128,552 –  endorsements and acceptances 2,405 2,666 2,707 161 18 7,957 ( 18 ) 7,939 –  accrued income and other 103,779 9,316 7,258 205 115 120,673 ( 60 ) 120,613 Debt instruments measured at fair value through other comprehensive income 1 288,959 12,037 7,897 805 5 309,703 ( 97 ) 309,606 Out-of-scope for IFRS 9 ECL Trading assets 122,695 20,595 20,746 1,326 135 165,497 — 165,497 Other financial assets designated and otherwise mandatorily measured at fair value through profit or loss 52,649 11,517 4,733 84 6 68,989 — 68,989 Derivatives 196,098 27,377 6,041 187 11 229,714 — 229,714 Assets held for sale 12,495 — — — — 12,495 — 12,495 Total gross carrying amount on balance sheet 2,086,877 362,793 303,559 35,789 20,177 2,809,195 ( 11,608 ) 2,797,587 Percentage of total credit quality (%) 74.3 12.9 10.8 1.3 0.7 100 Loan and other credit-related commitments 436,359 142,500 73,230 7,782 1,144 661,015 ( 367 ) 660,648 Financial guarantees 7,700 4,146 4,080 699 384 17,009 ( 39 ) 16,970 In-scope: Irrevocable loan commitments and financial guarantees 444,059 146,646 77,310 8,481 1,528 678,024 ( 406 ) 677,618 Loan and other credit-related commitments 92,509 77,891 61,462 3,896 377 236,135 — 236,135 Performance and other guarantees 39,784 32,231 19,445 1,853 964 94,277 ( 145 ) 94,132 Out-of-scope: Revocable loan commitments and non-financial guarantees 132,293 110,122 80,907 5,749 1,341 330,412 ( 145 ) 330,267 1 For the purposes of this disclosure, gross carrying amount is defined as the amortised cost of a financial asset before adjusting for any loss allowance. As such, the gross carrying amount of debt instruments at FVOCI as presented above will not reconcile to the balance sheet as it excludes fair value gains and losses. 198 HSBC Holdings plc Annual Report on Form 20-F Risk review Distribution of financial instruments to which the impairment requirements in IFRS 9 are applied, by credit quality and stage allocation (Audited) Gross carrying/notional amount Allowance for ECL Net Strong Good Satisfactory Sub- standard Credit impaired Total $m $m $m $m $m $m $m $m Loans and advances to customers at amortised cost 515,266 193,080 186,416 22,906 22,705 940,373 ( 9,715 ) 930,658 –  stage 1 498,415 170,420 150,818 4,767 — 824,420 ( 1,078 ) 823,342 –  stage 2 16,851 22,660 35,598 18,139 — 93,248 ( 2,546 ) 90,702 –  stage 3 — — — — 22,615 22,615 ( 6,040 ) 16,575 –  POCI — — — — 90 90 ( 51 ) 39 Loans and advances to banks at amortised cost 92,621 4,255 5,040 134 2 102,052 ( 13 ) 102,039 –  stage 1 92,528 4,226 4,981 117 — 101,852 ( 9 ) 101,843 –  stage 2 93 29 59 17 — 198 ( 2 ) 196 –  stage 3 — — — — 2 2 ( 2 ) — –  POCI — — — — — — — — Other financial assets measured at amortised cost 702,570 85,700 39,660 497 153 828,580 ( 92 ) 828,488 –  stage 1 702,373 85,032 38,977 239 — 826,621 ( 64 ) 826,557 –  stage 2 197 668 683 258 — 1,806 ( 5 ) 1,801 –  stage 3 — — — — 153 153 ( 23 ) 130 –  POCI — — — — — — — — Loan and other credit-related commitments 400,120 131,396 77,220 9,670 961 619,367 ( 348 ) 619,019 –  stage 1 398,779 125,956 67,949 4,547 — 597,231 ( 137 ) 597,094 –  stage 2 1,341 5,440 9,271 5,123 — 21,175 ( 121 ) 21,054 –  stage 3 — — — — 958 958 ( 90 ) 868 –  POCI — — — — 3 3 — 3 Financial guarantees 7,365 4,263 4,399 723 248 16,998 ( 29 ) 16,969 –  stage 1 7,352 4,192 3,625 184 — 15,353 ( 8 ) 15,345 –  stage 2 13 71 774 539 — 1,397 ( 5 ) 1,392 –  stage 3 — — — — 248 248 ( 16 ) 232 –  POCI — — — — — — — — At 31 Dec 2024 1,717,942 418,694 312,735 33,930 24,069 2,507,370 ( 10,197 ) 2,497,173 Debt instruments at FVOCI 1 –  stage 1 336,264 9,448 7,290 — — 353,002 ( 31 ) 352,971 –  stage 2 49 — 478 380 — 907 ( 23 ) 884 –  stage 3 — — — — — — — — –  POCI — — — — — — — — At 31 Dec 2024 336,313 9,448 7,768 380 — 353,909 ( 54 ) 353,855 Loans and advances to customers at amortised cost 497,665 206,476 197,582 28,532 19,354 949,609 ( 11,074 ) 938,535 –  stage 1 478,422 177,410 147,940 5,612 — 809,384 ( 1,130 ) 808,254 –  stage 2 19,243 29,066 49,642 22,920 — 120,871 ( 2,964 ) 117,907 –  stage 3 — — — — 19,273 19,273 ( 6,950 ) 12,323 –  POCI — — — — 81 81 ( 30 ) 51 Loans and advances to banks at amortised cost 101,057 4,640 6,363 855 2 112,917 ( 15 ) 112,902 –  stage 1 101,011 4,631 5,550 287 — 111,479 ( 10 ) 111,469 –  stage 2 46 9 813 568 — 1,436 ( 3 ) 1,433 –  stage 3 — — — — 2 2 ( 2 ) — –  POCI — — — — — — — — Other financial assets measured at amortised cost 815,259 80,151 60,197 4,000 664 960,271 ( 422 ) 959,849 –  stage 1 814,776 78,486 53,095 516 — 946,873 ( 109 ) 946,764 –  stage 2 483 1,665 7,102 3,484 — 12,734 ( 132 ) 12,602 –  stage 3 — — — — 664 664 ( 181 ) 483 –  POCI — — — — — — — — Loan and other credit-related commitments 436,359 142,500 73,230 7,782 1,144 661,015 ( 367 ) 660,648 –  stage 1 432,017 135,192 61,213 2,527 — 630,949 ( 153 ) 630,796 –  stage 2 4,342 7,308 12,017 5,255 — 28,922 ( 128 ) 28,794 –  stage 3 — — — — 1,140 1,140 ( 86 ) 1,054 –  POCI — — — — 4 4 — 4 Financial guarantees 7,700 4,146 4,080 699 384 17,009 ( 39 ) 16,970 –  stage 1 7,497 3,943 3,204 102 — 14,746 ( 7 ) 14,739 –  stage 2 203 203 876 597 — 1,879 ( 7 ) 1,872 –  stage 3 — — — — 384 384 ( 25 ) 359 –  POCI — — — — — — — — At 31 Dec 2023 1,858,040 437,913 341,452 41,868 21,548 2,700,821 ( 11,917 ) 2,688,904 Debt instruments at FVOCI 1 –  stage 1 288,909 12,037 7,579 — — 308,525 ( 37 ) 308,488 –  stage 2 50 — 318 805 — 1,173 ( 59 ) 1,114 –  stage 3 — — — — 5 5 ( 1 ) 4 –  POCI — — — — — — — — At 31 Dec 2023 288,959 12,037 7,897 805 5 309,703 ( 97 ) 309,606 1 For the purposes of this disclosure, gross carrying amount is defined as the amortised cost of a financial asset before adjusting for any loss allowance. As such, the gross carrying amount of debt instruments at FVOCI as presented above will not reconcile to the balance sheet as it excludes fair value gains and losses. HSBC Holdings plc Annual Report on Form 20-F 199 Credit-i mpaired loans (Audited) We determine that a financial instrument is credit impaired and in stage 3 by considering relevant objective evidence, primarily whether: – contractual payments of either principal or interest are past due for more than 90 days; – there are other indications that the borrower is unlikely to pay, such as when a concession has been granted to the borrower for economic or legal reasons relating to the borrower’s financial condition; and – the loan is otherwise considered to be in default. If such unlikeliness to pay is not identified at an earlier stage, it is deemed to occur when an exposure is 90 days past due. Therefore, the definitions of credit impaired and default are aligned as far as possible so that stage 3 represents all loans that are considered defaulted or otherwise credit impaired . Forbearance The following table shows the gross carrying amount and allowance for ECL of the Group’s holdings of forborne loans and advances to customers by industry sector and by stages. A summary of our current policies and practices for forbearance is set out in ‘Credit risk management’ on page 169 . Forborne loans and advances to customers at amortised cost by stage allocation Performing forborne Non-performing forborne Total forborne Stage 2 Stage 3 POCI Total $m $m $m $m Gross carrying amount Personal 545 1,424 — 1,969 –  first lien residential mortgages 266 1,040 — 1,306 –  second lien residential mortgages 1 3 — 4 –  guaranteed loans in respect of residential property 32 7 — 39 –  other personal lending which is secured — 7 — 7 –  credit cards 86 87 — 173 –  other personal lending which is unsecured 147 280 — 427 –  motor vehicle finance 13 — — 13 Wholesale 4,325 7,542 85 11,952 –  corporate and commercial 4,247 7,351 85 11,683 –  non-bank financial institutions 78 191 — 269 At 31 Dec 2024 4,870 8,966 85 13,921 Allowance for ECL Personal (73) (305) — (378) –  first lien residential mortgages (12) (148) — (160) –  second lien residential mortgages — — — — –  guaranteed loans in respect of residential property (1) (1) — (2) –  other personal lending which is secured — (2) — (2) –  credit cards (17) (45) — (62) –  other personal lending which is unsecured (38) (109) — (147) –  motor vehicle finance (5) — — (5) Wholesale (461) (2,008) (51) (2,520) –  corporate and commercial (460) (1,972) (51) (2,483) –  non-bank financial institutions (1) (36) — (37) At 31 Dec 2024 (534) (2,313) (51) (2,898) Gross carrying amount Personal 816 1,282 — 2,098 –  first lien residential mortgages 530 815 — 1,345 –  second lien residential mortgages 1 8 — 9 –  guaranteed loans in respect of residential property 24 20 — 44 –  other personal lending which is secured 1 6 — 7 –  credit cards 96 83 — 179 –  other personal lending which is unsecured 155 349 — 504 –  motor vehicle finance 9 1 — 10 Wholesale 5,848 5,505 68 11,421 –  corporate and commercial 5,778 5,459 68 11,305 –  non-bank financial institutions 70 46 — 116 At 31 Dec 2023 6,664 6,787 68 13,519 Allowance for ECL Personal (113) (307) — (420) –  first lien residential mortgages (50) (113) — (163) –  second lien residential mortgages — (3) — (3) –  guaranteed loans in respect of residential property — (2) — (2) –  other personal lending which is secured — (1) — (1) –  credit cards (17) (46) — (63) –  other personal lending which is unsecured (43) (142) — (185) –  motor vehicle finance (3) — — (3) Wholesale (259) (1,932) (28) (2,219) –  corporate and commercial (257) (1,920) (28) (2,205) –  non-bank financial institutions (2) (12) — (14) At 31 Dec 2023 (372) (2,239) (28) (2,639) 200 HSBC Holdings plc Annual Report on Form 20-F Risk review Forborne loans and advances to customers by legal entities HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total $m $m $m $m $m $m $m $m Gross carrying amount Performing forborne 1,251 1,506 1,073 10 787 201 42 4,870 Non-performing forborne 2,231 1,578 3,698 460 464 355 265 9,051 At 31 Dec 2024 3,482 3,084 4,771 470 1,251 556 307 13,921 Allowance for ECL Performing forborne (101) (36) (296) (1) (52) (48) — (534) Non-performing forborne (393) (464) (943) (196) (71) (127) (170) (2,364) At 31 Dec 2024 (494) (500) (1,239) (197) (123) (175) (170) (2,898) Gross carrying amount Performing forborne 1,478 2,081 1,574 31 954 503 43 6,664 Non-performing forborne 1,936 1,199 2,250 471 430 233 336 6,855 At 31 Dec 2023 3,414 3,280 3,824 502 1,384 736 379 13,519 Allowance for ECL Performing forborne (75) (25) (142) (1) (43) (84) (2) (372) Non-performing forborne (289) (400) (986) (225) (74) (126) (167) (2,267) At 31 Dec 2023 (364) (425) (1,128) (226) (117) (210) (169) (2,639) Wholesale lending This section presents further disclosures related to wholesale lending. It provides details of the main legal entities, countries and customer classification that are driving the change observed in wholesale loans and advances to banks and customers, with the impact of foreign exchange separately identified. This section also provides reconciliations of the opening 1 January 2024 to 31 December 2024 closing gross carrying/nominal amounts and the associated allowance for ECL. Further granularity is also provided by stage, with data for our main legal entities presented for gross loans and advances to banks and customers, loan and other credit-related commitments and financial guarantees. At 31 December 2024, wholesale lending for gross loans and advances to banks and customers of $595.2bn decreased by $19.8bn on a reported basis, compared with 31 December 2023. Excluding adverse foreign exchange movements of $16.3bn, total wholesale lending decreased by $3.5bn. On a constant currency basis, the wholesale loans and advances to customers grew by $3.0bn, mainly driven by an increase in non-bank financial institutions (up $9.6bn), partly offset by a decrease in corporate and commercial lending (down $6.6bn). The increase in non-bank financial institutions of $9.6bn was largely driven by growth in balances in HSBC Bank plc (up $4.2bn), in our legal entities in Asia (up $2.2bn), in the US (up $1.2bn), in HSBC UK (up $1.0bn) and in the Middle East (up $0.8bn). The decrease in corporate and commercial balances of $6.6bn, mainly in our legal entities in the US (down $2.9bn) and in Asia (down $2.4bn), was driven by repayments, including in ‘real estate and construction’ and in HSBC Bank plc (down $0.7bn). Additionally, there was a decrease of $0.5bn from the sale of our business in Argentina. On a constant currency basis, gross loans and advances to banks decreased by $6.5bn, mainly driven by lower central bank balances and money market lending balances in our legal entities in Asia (down $9.1bn) and a decrease of $0.6bn from the sale of our business in Argentina. This was partly offset by higher balances in our legal entities in the Middle East (up $3.6bn). The decrease in stage 2 exposures on a constant currency basis (down $19.5bn) was mainly driven by maturities, repayments and new downgrades to stage 3 exposures, primarily in Asia. On a constant currency basis, stage 3 gross loans and advances to customers increased by $3.7bn, primarily driven by corporate and commercial exposure (up $3.8bn) driven by defaults in commercial real estate lending in Hong Kong, which are generally well collateralised. There was a decrease in the associated allowance for ECL due to write-offs of heavily-impaired exposures. At 31 December 2024, the write-offs attributable to wholesale lending increased by $0.3bn to $2.9bn, compared with 31 December 2023. The allowance for ECL attributable to loans and advances to banks and customers of $7.2bn at 31 December 2024 decreased by $1.0bn from $8.2bn at 31 December 2023. This included adverse foreign exchange movements of $0.2bn. On a constant currency basis, the allowance for ECL attributable to corporate and commercial loans and advances decreased by $0.8bn, largely due to the write-offs of heavily-impaired exposures in ‘real estate and construction’, mainly in Hong Kong. The allowance for ECL attributable to loans and advances to non-bank financial institutions remained broadly stable. On a reported basis, loan commitments and financial guarantees of $381.7bn decreased by $38.2bn compared with 31 December 2023. Excluding adverse foreign exchange movements of $14.0bn, financial nominal amounts decreased by $14.8bn, and corporate and commercial nominal amounts decreased by $9.4bn. The allowance for ECL attributable to loan commitments and financial guarantees at 31 December 2024 remained unchanged at $0.4bn. The table below provides a breakdown by industry sector and stage of the Group’s gross carrying amount and allowances for ECL for wholesale loans and advances to banks and customers. Counterparties or exposures are classified when presenting comparable economic characteristics, or engaged in similar activities so that their collective ability to meet contractual obligations is uniformly affected by changes in economic, political or other conditions. Therefore, the industry classification does not adhere to Nomenclature des Activités Économiques dans la Communauté Européenne (‘NACE’), which is applicable to other financial regulatory reporting. HSBC Holdings plc Annual Report on Form 20-F 201 Total wholesale lending for loans and advances to banks and customers by stage distribution Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m Corporate and commercial 340,987 51,231 18,376 90 410,684 (463) (1,358) (4,883) (51) (6,755) –  agriculture, forestry and fishing 5,437 1,314 282 — 7,033 (14) (34) (46) — (94) –  mining and quarrying 6,811 463 318 — 7,592 (6) (7) (32) — (45) –  manufacturing 70,987 10,250 1,466 21 82,724 (83) (172) (618) (20) (893) –  electricity, gas, steam and air- conditioning supply 15,277 971 209 — 16,457 (14) (23) (85) — (122) –  water supply, sewerage, waste management and remediation 2,530 388 43 — 2,961 (4) (4) (16) — (24) –  real estate and construction 63,794 17,320 8,887 62 90,063 (90) (666) (1,811) (31) (2,598) –  of which: commercial real estate 49,994 14,720 7,558 61 72,333 (67) (604) (1,355) (29) (2,055) –  wholesale and retail trade, repair of motor vehicles and motorcycles 66,977 8,125 2,725 3 77,830 (67) (117) (1,188) — (1,372) –  transportation and storage 18,589 3,637 417 — 22,643 (15) (74) (232) — (321) –  accommodation and food 11,406 1,718 1,610 — 14,734 (30) (55) (214) — (299) –  publishing, audiovisual and broadcasting 18,181 1,416 229 — 19,826 (42) (55) (61) — (158) –  professional, scientific and technical activities 23,044 2,436 644 4 26,128 (29) (49) (188) — (266) –  administrative and support services 17,671 1,707 739 — 20,117 (26) (40) (254) — (320) –  public administration and defence, compulsory social security 64 — — — 64 — — — — — –  education 1,361 192 43 — 1,596 (4) (7) (16) — (27) –  health and care 3,357 489 184 — 4,030 (8) (18) (25) — (51) –  arts, entertainment and recreation 1,817 171 78 — 2,066 (5) (4) (26) — (35) –  other services 6,470 491 327 — 7,288 (24) (20) (66) — (110) –  activities of households 582 7 — — 589 — — — — — –  extra-territorial organisations and bodies activities 118 — — — 118 — — — — — –  government 6,495 123 175 — 6,793 (2) — (5) — (7) –  asset-backed securities 19 13 — — 32 — (13) — — (13) Non-bank financial institutions 79,687 2,098 679 — 82,464 (45) (30) (361) — (436) Loans and advances to banks 101,852 198 2 — 102,052 (9) (2) (2) — (13) At 31 Dec 2024 522,526 53,527 19,057 90 595,200 (517) (1,390) (5,246) (51) (7,204) By legal entity HSBC UK Bank plc 81,630 12,772 3,356 — 97,758 (197) (403) (603) — (1,203) HSBC Bank plc 1 85,022 5,843 2,305 47 93,217 (54) (111) (752) (22) (939) The Hongkong and Shanghai Banking Corporation Limited 279,535 27,078 11,483 39 318,135 (170) (677) (2,999) (28) (3,874) HSBC Bank Middle East Limited 26,359 951 848 4 28,162 (20) (6) (463) (1) (490) HSBC North America Holdings Inc. 30,107 4,665 503 — 35,275 (31) (141) (121) — (293) Grupo Financiero HSBC, S.A. de C.V. 11,957 1,703 230 — 13,890 (35) (48) (128) — (211) Other trading entities 1 7,840 515 332 — 8,687 (10) (4) (180) — (194) Holding companies, shared service centres and intra-Group eliminations 76 — — — 76 — — — — — At 31 Dec 2024 522,526 53,527 19,057 90 595,200 (517) (1,390) (5,246) (51) (7,204) 1 At 31 December 2023, Other trading entities included gross carrying amount of $1,792m related to Private Banking entities that were reclassified to HSBC Bank plc to continue the process of simplifying our structure in 2024 and gross carrying amount of $1,169m related to our business in Argentina which was sold on 6 December 2024. Total wholesale lending for loans and other credit-related commitments and financial guarantees to banks and customers by stage distribution 1 Nominal amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m Corporate and commercial 241,249 18,685 1,033 3 260,970 (118) (121) (98) — (337) Financial 118,430 2,196 87 — 120,713 (10) (5) (3) — (18) At 31 Dec 2024 359,679 20,881 1,120 3 381,683 (128) (126) (101) — (355) By legal entity HSBC UK Bank plc 37,848 4,540 445 — 42,833 (27) (36) (57) — (120) HSBC Bank plc 144,941 6,118 256 3 151,318 (21) (30) (21) — (72) The Hongkong and Shanghai Banking Corporation Limited 72,860 3,973 99 — 76,932 (54) (32) (6) — (92) HSBC Bank Middle East Limited 8,879 329 35 — 9,243 (5) (1) (10) — (16) HSBC North America Holdings Inc. 91,314 5,723 226 — 97,263 (20) (26) (5) — (51) HSBC Bank Canada — — — — — — — — — — Grupo Financiero HSBC, S.A. de C.V. 2,334 53 — — 2,387 (1) (1) — — (2) Other trading entities 1,503 145 59 — 1,707 — — (2) — (2) At 31 Dec 2024 359,679 20,881 1,120 3 381,683 (128) (126) (101) — (355) 1 Included in loans and other credit-related commitments and financial guarantees is $49bn relating to unsettled reverse repurchase agreements, which once drawn are classified as ‘Reverse repurchase agreements – non-trading’. 202 HSBC Holdings plc Annual Report on Form 20-F Risk review Total wholesale lending for loans and advances to banks and customers by stage distribution (continued) Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m Corporate and commercial 342,878 69,738 14,958 81 427,655 (499) (1,500) (5,774) (30) (7,803) –  agriculture, forestry and fishing 5,207 1,662 312 — 7,181 (13) (53) (64) — (130) –  mining and quarrying 6,260 638 325 — 7,223 (7) (11) (83) — (101) –  manufacturing 69,690 13,744 1,877 22 85,333 (89) (194) (839) (21) (1,143) –  electricity, gas, steam and air- conditioning supply 12,817 1,283 255 — 14,355 (14) (17) (88) — (119) –  water supply, sewerage, waste management and remediation 2,753 407 102 — 3,262 (5) (7) (51) — (63) –  real estate and construction 73,701 21,871 5,835 48 101,455 (96) (629) (2,554) (7) (3,286) –  of which: commercial real estate 59,883 19,107 4,552 47 83,589 (73) (603) (2,091) (7) (2,774) –  wholesale and retail trade, repair of motor vehicles and motorcycles 66,083 10,676 2,358 4 79,121 (80) (127) (1,132) (2) (1,341) –  transportation and storage 17,117 3,894 445 — 21,456 (18) (52) (160) — (230) –  accommodation and food 9,681 5,135 1,058 — 15,874 (27) (118) (112) — (257) –  publishing, audiovisual and broadcasting 17,455 2,066 210 — 19,731 (42) (81) (50) — (173) –  professional, scientific and technical activities 22,686 3,327 733 7 26,753 (32) (63) (306) — (401) –  administrative and support services 19,055 2,551 597 — 22,203 (31) (63) (174) — (268) –  public administration and defence, compulsory social security 1,037 5 — — 1,042 — — — — — –  education 1,137 277 46 — 1,460 (3) (8) (4) — (15) –  health and care 3,245 808 183 — 4,236 (9) (21) (26) — (56) –  arts, entertainment and recreation 1,666 196 99 — 1,961 (5) (6) (31) — (42) –  other services 7,065 972 318 — 8,355 (26) (37) (90) — (153) –  activities of households 684 10 — — 694 — — — — — –  extra-territorial organisations and bodies activities 100 1 — — 101 — — — — — –  government 5,420 202 205 — 5,827 (2) — (10) — (12) –  asset-backed securities 19 13 — — 32 — (13) — — (13) Non-bank financial institutions 69,972 3,650 810 — 74,432 (52) (30) (322) — (404) Loans and advances to banks 111,479 1,436 2 — 112,917 (10) (3) (2) — (15) At 31 Dec 2023 524,329 74,824 15,770 81 615,004 (561) (1,533) (6,098) (30) (8,222) By legal entity HSBC UK Bank plc 76,793 18,735 3,769 — 99,297 (213) (474) (593) — (1,280) HSBC Bank plc 82,025 8,452 2,673 40 93,190 (69) (138) (1,035) (7) (1,249) The Hongkong and Shanghai Banking Corporation Limited 287,876 37,402 7,077 38 332,393 (185) (696) (3,349) (21) (4,251) HSBC Bank Middle East Limited 21,927 1,598 894 3 24,422 (17) (11) (571) (2) (601) HSBC North America Holdings Inc. 30,797 5,712 583 — 37,092 (24) (145) (127) — (296) Grupo Financiero HSBC, S.A. de C.V. 13,714 1,186 382 — 15,282 (39) (56) (231) — (326) Other trading entities 11,164 1,739 392 — 13,295 (14) (13) (192) — (219) Holding companies, shared service centres and intra-Group eliminations 33 — — — 33 — — — — — At 31 Dec 2023 524,329 74,824 15,770 81 615,004 (561) (1,533) (6,098) (30) (8,222) Total wholesale lending for loans and other credit-related commitments and financial guarantees by stage distribution 1 (continued) Nominal amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m Corporate and commercial 256,367 22,218 1,066 4 279,655 (126) (125) (107) — (358) Financial 135,039 5,111 103 — 140,253 (11) (10) (2) — (23) At 31 Dec 2023 391,406 27,329 1,169 4 419,908 (137) (135) (109) — (381) By legal entity HSBC UK Bank plc 31,982 5,760 350 — 38,092 (31) (32) (56) — (119) HSBC Bank plc 148,980 9,466 310 4 158,760 (20) (27) (27) — (74) The Hongkong and Shanghai Banking Corporation Limited 70,436 3,975 79 — 74,490 (59) (39) (16) — (114) HSBC Bank Middle East Limited 6,944 323 56 — 7,323 (4) (1) (3) — (8) HSBC North America Holdings Inc. 101,067 5,103 248 — 106,418 (14) (27) (1) — (42) HSBC Bank Canada 28,156 2,461 66 — 30,683 (8) (8) (3) — (19) Grupo Financiero HSBC, S.A. de C.V. 2,092 34 — — 2,126 (1) — — — (1) Other trading entities 1,749 207 60 — 2,016 — (1) (3) — (4) At 31 Dec 2023 391,406 27,329 1,169 4 419,908 (137) (135) (109) — (381) 1 Included in loans and other credit-related commitments and financial guarantees is $70bn relating to unsettled reverse repurchase agreements, which once drawn are classified as ‘Reverse repurchase agreements – non-trading’. HSBC Holdings plc Annual Report on Form 20-F 203 Wholesale lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying/ nominal amount Allowanc e for ECL Gross carrying/ nominal amount Allowanc e for ECL Gross carrying/ nominal amount Allowanc e for ECL Gross carrying/ nominal amount Allowanc e for ECL Gross carrying/ nominal amount Allowanc e for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 845,982 ( 698 ) 102,129 ( 1,668 ) 16,939 ( 6,207 ) 85 ( 30 ) 965,135 ( 8,603 ) Transfers of financial instruments: ( 17,606 ) ( 214 ) 6,997 825 10,609 ( 611 ) — — — — – transfers from stage 1 to stage 2 ( 70,991 ) 173 70,991 ( 173 ) — — — — — — – transfers from stage 2 to stage 1 55,182 ( 380 ) ( 55,182 ) 380 — — — — — — –  transfers to stage 3 ( 2,056 ) 7 ( 9,515 ) 636 11,571 ( 643 ) — — — — –  transfers from stage 3 259 ( 14 ) 703 ( 18 ) ( 962 ) 32 — — — — Net remeasurement of ECL arising from transfer of stage — 214 — ( 226 ) — ( 12 ) — — — ( 24 ) Net new and further lending/ repayments 58,044 ( 151 ) ( 29,842 ) 311 ( 4,450 ) 1,219 7 ( 7 ) 23,759 1,372 Change to risk parameters – credit quality — 112 — ( 899 ) — ( 2,508 ) — ( 11 ) — ( 3,306 ) Changes to models used for ECL calculation — 39 — 105 — — — — — 144 Assets written off — — — — ( 2,925 ) 2,925 — — ( 2,925 ) 2,925 Credit-related modifications that resulted in derecognition — — — — — — — — — — Foreign exchange and others 1 2 3 ( 53,384 ) 53 ( 4,996 ) 36 4 ( 153 ) 1 ( 3 ) ( 58,375 ) ( 67 ) At 31 Dec 2024 833,036 ( 645 ) 74,288 ( 1,516 ) 20,177 ( 5,347 ) 93 ( 51 ) 927,594 ( 7,559 ) ECL income statement change for the period 214 ( 709 ) ( 1,301 ) ( 18 ) ( 1,814 ) Recoveries 40 Others ( 126 ) Total ECL income statement change for the period ( 1,900 ) 1 Total includes $ 2.9 bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale during the year, and a corresponding allowance for ECL of $ 23 m , reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . 2 Total includes $ 28.9 b n of nominal amount and $ 20 m of corresponding allowance for ECL related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. 3 Total includes $ 0.3 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Argentina during 2024. As shown in the above table, the allowance for ECL for loans and advances to customers and banks and relevant loan commitments and financial guarantees decreased by $ 1,044 m during the period from $ 8,603 m at 31 December 2023 to $ 7,559 m at 31 December 2024 . This decrease was driven by: – $ 2,925 m of assets written off; – $ 1,372 m relating to volume movements, which included the allowance for ECL associated with new originations, assets derecognised and further lending/repayments; and – $ 144 m relating to changes to models used for ECL calculation. These were partly offset by: – $ 3,306 m relating to credit quality changes, including the credit quality impact of financial instruments transferring between stages; – foreign exchange and other movements of $ 67 m ; and – $ 24 m relating to the net remeasurement impact of stage transfers. The ECL charge for the period of $ 1,814 m presented in the previous table consisted of $ 3,306 m relating to credit quality changes, including the credit quality impact of financial instruments transferring between stages and $ 24 m relating to the net remeasurement impact of stage transfers. This was partly offset by $ 1,372 m relating to underlying net book volume movement and $ 144 m in changes to models used for ECL calculation. During the period, there was a net transfer between stage 1 and stage 2 of $ 15,809 m gross carrying/nominal amounts. It was primarily driven by our entities in Asia ( $ 12,878 m ), mainly due to deterioration in the real estate and construction sectors, and in our main entity in the US ( $ 1,986 m ) and Mexico ( $ 1,805 m ), partly offset by improvements in the economic outlook that led to upgrades to stage 1 exposures, primarily in our legal entities in the UK( $ 3,077 m ). A summary of basis of preparation is available on page 191. 204 HSBC Holdings plc Annual Report on Form 20-F Risk review Wholesale lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 POCI Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m $m $m At 1 Jan 2023 830,322 ( 670 ) 124,660 ( 2,205 ) 17,068 ( 6,144 ) 129 ( 38 ) 972,179 ( 9,057 ) Transfers of financial instruments: ( 16,804 ) ( 429 ) 10,247 1,141 6,557 ( 712 ) — — — — –  transfers from stage 1 to stage 2 ( 93,511 ) 172 93,511 ( 172 ) — — — — — — –  transfers from stage 2 to stage 1 77,772 ( 605 ) ( 77,772 ) 605 — — — — — — –  transfers to stage 3 ( 1,444 ) 20 ( 6,255 ) 765 7,699 ( 785 ) — — — — –  transfers from stage 3 379 ( 16 ) 763 ( 57 ) ( 1,142 ) 73 — — — — Net remeasurement of ECL arising from transfer of stage — 354 — ( 294 ) — ( 45 ) — — — 15 Net new and further lending/ repayments 43,282 ( 138 ) ( 32,082 ) 311 ( 3,787 ) 973 ( 36 ) 3 7,377 1,149 Changes to risk parameters – credit quality — 203 — ( 621 ) — ( 2,941 ) — 21 — ( 3,338 ) Changes to models used for ECL calculation — ( 9 ) — 25 — — — — — 16 Assets written off — — — — ( 2,596 ) 2,596 ( 2,596 ) 2,596 Credit-related modifications that resulted in derecognition — — — — ( 119 ) 95 — — ( 119 ) 95 Foreign exchange and others 1 ( 10,818 ) ( 9 ) ( 696 ) ( 25 ) ( 184 ) ( 29 ) ( 8 ) ( 16 ) ( 11,706 ) ( 79 ) At 31 Dec 2023 845,982 ( 698 ) 102,129 ( 1,668 ) 16,939 ( 6,207 ) 85 ( 30 ) 965,135 ( 8,603 ) ECL income statement change for the period 410 ( 579 ) ( 2,013 ) 24 ( 2,158 ) Recoveries 42 Others — — — — — — — — — ( 203 ) Total ECL income statement change for the period ( 2,319 ) 1 Total includes $ 13.5 b n of gross carrying loans and advances to customers and banks, which were classified to assets held for sale during the year, and a corresponding allowance for ECL of $ 61 m , reflecting business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . Wholesale lending – distribution of financial instruments to which the impairment requirements of IFRS 9 are applied by credit quality Gross carrying amount Allowance for ECL Net Strong Good Satisfactory Sub- standard Credit impaired Total $m $m $m $m $m $m $m $m By legal entity HSBC UK Bank plc 21,548 30,317 36,450 6,087 3,356 97,758 (1,203) 96,555 HSBC Bank plc 42,189 21,755 24,150 2,771 2,352 93,217 (939) 92,278 The Hongkong and Shanghai Banking Corporation Limited 157,900 69,084 71,651 7,978 11,522 318,135 (3,874) 314,261 HSBC Bank Middle East Limited 15,854 4,263 6,927 266 852 28,162 (490) 27,672 HSBC North America Holdings Inc. 6,095 11,726 13,967 2,984 503 35,275 (293) 34,982 Grupo Financiero HSBC, S.A. de C.V. 1,476 5,523 5,974 687 230 13,890 (211) 13,679 Other trading entities 2,432 1,072 4,563 288 332 8,687 (194) 8,493 Holding companies, shared service centres and intra-Group eliminations 76 — — — — 76 — 76 At 31 Dec 2024 247,570 143,740 163,682 21,061 19,147 595,200 (7,204) 587,996 Percentage of total credit quality (%) 41.6 24.2 27.5 3.5 3.2 100.0 By legal entity HSBC UK Bank plc 20,777 30,245 36,206 8,300 3,769 99,297 (1,280) 98,017 HSBC Bank plc 41,149 20,962 24,164 4,202 2,713 93,190 (1,249) 91,941 The Hongkong and Shanghai Banking Corporation Limited 165,255 72,683 78,566 8,774 7,115 332,393 (4,251) 328,142 HSBC Bank Middle East Limited 13,660 3,082 6,270 513 897 24,422 (601) 23,821 HSBC North America Holdings Inc. 6,244 13,668 13,094 3,503 583 37,092 (296) 36,796 Grupo Financiero HSBC, S.A. de C.V. 1,853 6,543 5,882 622 382 15,282 (326) 14,956 Other trading entities 3,189 1,277 7,449 988 392 13,295 (219) 13,076 Holding companies, shared service centres and intra-Group eliminations 33 — — — — 33 — 33 At 31 Dec 2023 252,160 148,460 171,631 26,902 15,851 615,004 (8,222) 606,782 Percentage of total credit quality (%) 41.0 24.1 27.9 4.4 2.6 100.0 HSBC Holdings plc Annual Report on Form 20-F 205 Our risk rating system facilitates the internal ratings-based approach under the Basel framework adopted by the Group to support calculation of our minimum credit regulatory capital requirement. The credit quality classifications can be found on page 169 . Wholesale lending – credit risk profile by obligor grade for loans and advances at amortised cost Gross carrying amount Allowance for ECL Basel one-year PD range Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total ECL coverage Mapped external rating % $m $m $m $m $m $m $m $m $m $m % Corporate and commercial 340,987 51,231 18,376 90 410,684 (463) (1,358) (4,883) (51) (6,755) 1.6 –  CRR 1 0.000 to 0.053 32,564 121 — — 32,685 (3) (5) — — (8) — AA- and above –  CRR 2 0.054 to 0.169 79,350 2,469 — — 81,819 (25) (15) — — (40) — A+ to A- –  CRR 3 0.170 to 0.740 111,229 7,556 — — 118,785 (103) (72) — — (175) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 73,050 12,591 — — 85,641 (144) (99) — — (243) 0.3 BB+ to BB- –  CRR 5 1.928 to 4.914 40,391 12,673 — — 53,064 (158) (159) — — (317) 0.6 BB- to B –  CRR 6 4.915 to 8.860 2,491 7,436 — — 9,927 (16) (190) — — (206) 2.1 B- –  CRR 7 8.861 to 15.000 1,370 3,735 — — 5,105 (7) (172) — — (179) 3.5 CCC+ –  CRR 8 15.001 to 99.999 542 4,650 — — 5,192 (7) (646) — — (653) 12.6 CCC to C –  CRR 9/10 100.000 — — 18,376 90 18,466 — — (4,883) (51) (4,934) 26.7 D Non-bank financial institutions 79,687 2,098 679 — 82,464 (45) (30) (361) — (436) 0.5 –  CRR 1 0.000 to 0.053 19,516 191 — — 19,707 (1) (1) — — (2) — AA- and above –  CRR 2 0.054 to 0.169 20,572 166 — — 20,738 (5) — — — (5) — A+ to A- –  CRR 3 0.170 to 0.740 20,370 330 — — 20,700 (12) (3) — — (15) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 12,987 502 — — 13,489 (16) (2) — — (18) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 6,058 390 — — 6,448 (11) (6) — — (17) 0.3 BB- to B –  CRR 6 4.915 to 8.860 48 319 — — 367 — (8) — — (8) 2.2 B- –  CRR 7 8.861 to 15.000 63 79 — — 142 — (1) — — (1) 0.7 CCC+ –  CRR 8 15.001 to 99.999 73 121 — — 194 — (9) — — (9) 4.6 CCC to C –  CRR 9/10 100.000 — — 679 — 679 — — (361) — (361) 53.2 D Banks 101,852 198 2 — 102,052 (9) (2) (2) — (13) — –  CRR 1 0.000 to 0.053 79,213 53 — — 79,266 (3) — — — (3) — AA- and above –  CRR 2 0.054 to 0.169 13,315 40 — — 13,355 (2) — — — (2) — A+ to A- –  CRR 3 0.170 to 0.740 4,226 29 — — 4,255 (2) — — — (2) — BBB+ to BBB- –  CRR 4 0.741 to 1.927 3,275 12 — — 3,287 (1) — — — (1) — BB+ to BB- –  CRR 5 1.928 to 4.914 1,706 47 — — 1,753 (1) (1) — — (2) 0.1 BB- to B –  CRR 6 4.915 to 8.860 10 1 — — 11 — — — — — — B- –  CRR 7 8.861 to 15.000 107 13 — — 120 — — — — — — CCC+ –  CRR 8 15.001 to 99.999 — 3 — — 3 — (1) — — (1) 33.3 CCC to C –  CRR 9/10 100.000 — — 2 — 2 — — (2) — (2) 100.0 D At 31 Dec 2024 522,526 53,527 19,057 90 595,200 (517) (1,390) (5,246) (51) (7,204) 1.2 206 HSBC Holdings plc Annual Report on Form 20-F Risk review Wholesale lending – credit risk profile by obligor grade for loans and advances at amortised cost (continued) Basel one-year PD range Gross carrying amount Allowance for ECL ECL coverage Mapped external rating Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total % $m $m $m $m $m $m $m $m $m $m % Corporate and commercial 342,878 69,738 14,958 81 427,655 (499) (1,500) (5,774) (30) (7,803) 1.8 –  CRR 1 0.000 to 0.053 34,097 715 — — 34,812 (4) (3) — — (7) — AA- and above –  CRR 2 0.054 to 0.169 81,131 2,180 — — 83,311 (23) (14) — — (37) — A+ to A- –  CRR 3 0.170 to 0.740 112,322 11,391 — — 123,713 (106) (87) — — (193) 0.2 BBB+ to BBB- –  CRR 4 0.741 to 1.927 72,654 16,904 — — 89,558 (156) (130) — — (286) 0.3 BB+ to BB- –  CRR 5 1.928 to 4.914 37,631 18,060 — — 55,691 (169) (240) — — (409) 0.7 BB- to B –  CRR 6 4.915 to 8.860 2,675 7,341 — — 10,016 (24) (176) — — (200) 2.0 B- –  CRR 7 8.861 to 15.000 1,031 6,319 — — 7,350 (10) (246) — — (256) 3.5 CCC+ –  CRR 8 1 15.001 to 99.999 1,337 6,828 — — 8,165 (7) (604) — — (611) 7.5 CCC to C –  CRR 9/10 100.000 — — 14,958 81 15,039 — — (5,774) (30) (5,804) 38.6 D Non-bank financial institutions 69,972 3,650 810 — 74,432 (52) (30) (322) — (404) 0.5 –  CRR 1 0.000 to 0.053 15,475 211 — — 15,686 (2) — — — (2) — AA- and above –  CRR 2 0.054 to 0.169 16,920 374 — — 17,294 (6) (2) — — (8) — A+ to A- –  CRR 3 0.170 to 0.740 19,195 912 — — 20,107 (10) (4) — — (14) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 11,480 1,032 — — 12,512 (19) (5) — — (24) 0.2 BB+ to BB- –  CRR 5 1.928 to 4.914 6,635 872 — — 7,507 (9) (15) — — (24) 0.3 BB- to B –  CRR 6 4.915 to 8.860 232 116 — — 348 (6) (1) — — (7) 2.0 B- –  CRR 7 8.861 to 15.000 25 93 — — 118 — (2) — — (2) 1.7 CCC+ –  CRR 8 15.001 to 99.999 10 40 — — 50 — (1) — — (1) 2.0 CCC to C –  CRR 9/10 100.000 — — 810 — 810 — — (322) — (322) 39.8 D Banks 111,479 1,436 2 — 112,917 (10) (3) (2) — (15) — –  CRR 1 0.000 to 0.053 89,112 10 — — 89,122 (4) — — — (4) — AA- and above –  CRR 2 0.054 to 0.169 11,899 36 — — 11,935 (2) — — — (2) — A+ to A- –  CRR 3 0.170 to 0.740 4,631 9 — — 4,640 (1) — — — (1) — BBB+ to BBB- –  CRR 4 0.741 to 1.927 2,488 58 — — 2,546 (1) — — — (1) — BB+ to BB- –  CRR 5 1.928 to 4.914 3,062 755 — — 3,817 (2) (1) — — (3) 0.1 BB- to B –  CRR 6 4.915 to 8.860 22 20 — — 42 — — — — — — B- –  CRR 7 8.861 to 15.000 1 — — — 1 — — — — — — CCC+ –  CRR 8 15.001 to 99.999 264 548 — — 812 — (2) — — (2) 0.2 CCC to C –  CRR 9/10 100.000 — — 2 — 2 — — (2) — (2) 100.0 D At 31 Dec 2023 524,329 74,824 15,770 81 615,004 (561) (1,533) (6,098) (30) (8,222) 1.3 1 Corporate and commercial lending reported in CRR 8 for stage 1 includes $782m related to the UK Bounce Back Loan Scheme with immaterial allowances for ECL. Wholesale lending – credit risk profile by obligor grade for loan and other credit-related commitments and financial guarantees Nominal amount Allowance for ECL Basel one-year PD range Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total ECL coverage Mapped external rating % $m $m $m $m $m $m $m $m $m $m % Loan and other credit- related commitments 345,742 19,495 872 3 366,112 (120) (121) (85) — (326) 0.1 –  CRR 1 0.000 to 0.053 92,090 89 — — 92,179 (3) — — — (3) — AA- and above –  CRR 2 0.054 to 0.169 92,967 1,009 — — 93,976 (12) (2) — — (14) — A+ to A- –  CRR 3 0.170 to 0.740 97,876 5,051 — — 102,927 (38) (15) — — (53) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 40,135 4,349 — — 44,484 (28) (22) — — (50) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 18,581 3,976 — — 22,557 (26) (22) — — (48) 0.2 BB- to B –  CRR 6 4.915 to 8.860 1,828 2,297 — — 4,125 (4) (22) — — (26) 0.6 B- –  CRR 7 8.861 to 15.000 1,378 678 — — 2,056 (1) (12) — — (13) 0.6 CCC+ –  CRR 8 15.001 to 99.999 887 2,046 — — 2,933 (8) (26) — — (34) 1.2 CCC to C –  CRR 9/10 100.000 — — 872 3 875 — — (85) — (85) 9.7 D Financial guarantees 13,937 1,386 248 — 15,571 (8) (5) (16) — (29) 0.2 –  CRR 1 0.000 to 0.053 1,895 1 — — 1,896 — — — — — — AA- and above –  CRR 2 0.054 to 0.169 4,326 12 — — 4,338 (1) — — — (1) — A+ to A- –  CRR 3 0.170 to 0.740 4,137 71 — — 4,208 (2) — — — (2) — BBB+ to BBB- –  CRR 4 0.741 to 1.927 2,106 286 — — 2,392 (3) — — — (3) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 1,295 478 — — 1,773 (2) (1) — — (3) 0.2 BB- to B –  CRR 6 4.915 to 8.860 162 232 — — 394 — (1) — — (1) 0.3 B- –  CRR 7 8.861 to 15.000 5 128 — — 133 — (2) — — (2) 1.5 CCC+ –  CRR 8 15.001 to 99.999 11 178 — — 189 — (1) — — (1) 0.5 CCC to C –  CRR 9/10 100.000 — — 248 — 248 — — (16) — (16) 6.5 D At 31 Dec 2024 359,679 20,881 1,120 3 381,683 (128) (126) (101) — (355) 0.1 HSBC Holdings plc Annual Report on Form 20-F 207 Wholesale lending – credit risk profile by obligor grade for loan and other credit-related commitments and financial guarantees (continued) Nominal amount Allowance for ECL Basel one-year PD range Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total ECL coverage Mapped external rating % $m $m $m $m $m $m $m $m $m $m % Loan and other credit-related commitments 377,766 25,463 785 4 404,018 (130) (128) (84) — (342) 0.1 –  CRR 1 0.000 to 0.053 65,730 1,676 — — 67,406 (5) (1) — — (6) — AA- and above –  CRR 2 0.054 to 0.169 152,224 2,490 — — 154,714 (13) (6) — — (19) — A+ to A- –  CRR 3 0.170 to 0.740 105,569 6,044 — — 111,613 (46) (24) — — (70) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 38,102 4,751 — — 42,853 (33) (20) — — (53) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 14,054 5,367 — — 19,421 (28) (31) — — (59) 0.3 BB- to B –  CRR 6 4.915 to 8.860 1,170 2,453 — — 3,623 (4) (15) — — (19) 0.5 B- –  CRR 7 8.861 to 15.000 780 848 — — 1,628 (1) (10) — — (11) 0.7 CCC+ –  CRR 8 15.001 to 99.999 137 1,834 — — 1,971 — (21) — — (21) 1.1 CCC to C –  CRR 9/10 100.000 — — 785 4 789 — — (84) — (84) 10.6 D Financial guarantees 13,640 1,866 384 — 15,890 (7) (7) (25) — (39) 0.2 –  CRR 1 0.000 to 0.053 2,553 1 — — 2,554 — — — — — — AA- and above –  CRR 2 0.054 to 0.169 4,212 202 — — 4,414 (1) — — — (1) — A+ to A- –  CRR 3 0.170 to 0.740 3,584 202 — — 3,786 (2) — — — (2) 0.1 BBB+ to BBB- –  CRR 4 0.741 to 1.927 1,932 407 — — 2,339 (2) (1) — — (3) 0.1 BB+ to BB- –  CRR 5 1.928 to 4.914 1,266 455 — — 1,721 (2) (2) — — (4) 0.2 BB- to B –  CRR 6 4.915 to 8.860 91 387 — — 478 — (1) — — (1) 0.2 B- –  CRR 7 8.861 to 15.000 1 76 — — 77 — — — — — — CCC+ –  CRR 8 15.001 to 99.999 1 136 — — 137 — (3) — — (3) 2.2 CCC to C –  CRR 9/10 100.000 — — 384 — 384 — — (25) — (25) 6.5 D At 31 Dec 2023 391,406 27,329 1,169 4 419,908 (137) (135) (109) — (381) 0.1 Commercial real estate Commercial real estate (‘CRE’) lending includes the financing of corporate, institutional and high net worth customers who are investing primarily in income-producing assets and, to a lesser extent, in their construction and development. The portfolio has larger concentrations in Hong Kong, the UK and mainland China. Our global exposure is centred largely on cities with economic, political or cultural significance. In more developed markets, our exposure mainly comprises the financing of investment assets, the redevelopment of existing stock and the augmentation of both commercial and residential markets to support economic and population growth. In less developed commercial real estate markets, our exposures comprise lending for development assets on relatively short tenors with a particular focus on supporting larger, better- capitalised developers involved in residential construction or assets supporting economic expansion. Excluding favourable foreign exchange movements of $1.1bn, commercial real estate lending decreased by $10.1bn, mainly from $6.4bn in our entities in Hong Kong due to loan repayments and write- offs. Commercial real estate lending to customers of which: HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total UK Hong Kong of which: Hong Kong excluding exposure to mainland China borrowers $m $m $m $m $m $m $m $m $m $m $m Gross loans and advances Stage 1 9,394 3,285 34,337 1,136 1,420 380 42 49,994 9,758 22,643 22,132 Stage 2 4,052 313 9,103 — 1,184 67 1 14,720 4,112 7,619 6,515 Stage 3 492 213 6,451 117 240 22 23 7,558 492 5,967 4,554 POCI — 43 18 — — — — 61 43 18 — At 31 Dec 2024 13,938 3,854 49,909 1,253 2,844 469 66 72,333 14,405 36,247 33,201 –  of which: forborne loans 502 54 3,087 116 273 19 23 4,074 545 2,729 Allowance for ECL (203) (72) (1,627) (23) (103) (8) (19) (2,055) (227) (1,418) (405) 208 HSBC Holdings plc Annual Report on Form 20-F Risk review Commercial real estate lending to customers (continued) of which: HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total UK Hong Kong of which: Hong Kong excluding exposure to mainland China borrowers $m $m $m $m $m $m $m $m $m $m $m Gross loans and advances Stage 1 10,304 4,218 41,307 1,126 1,803 685 440 59,883 10,790 28,846 27,560 Stage 2 3,262 400 13,229 189 1,956 70 1 19,107 3,294 10,375 8,681 Stage 3 444 184 3,570 145 166 25 18 4,552 470 3,226 576 POCI — 32 15 — — — — 47 32 15 — At 31 Dec 2023 14,010 4,834 58,121 1,460 3,925 780 459 83,589 14,586 42,462 36,817 –  of which: forborne loans 461 69 2,454 126 433 52 — 3,595 519 2,227 Allowance for ECL (148) (49) (2,399) (55) (98) (15) (10) (2,774) (172) (2,149) (296) Commercial real estate gross loans and advances to customers by global business of which: HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total UK Hong Kong $m $m $m $m $m $m $m $m $m $m Wealth and Personal Banking 1 325 273 37 — 2 — — 637 469 37 Commercial Banking 13,613 2,757 33,551 695 2,842 469 66 53,993 13,640 24,473 Global Banking and Markets — 824 16,183 558 — — — 17,565 296 11,599 Corporate Centre — — 138 — — — — 138 — 138 At 31 Dec 2024 13,938 3,854 49,909 1,253 2,844 469 66 72,333 14,405 36,247 Wealth and Personal Banking 1 409 377 66 — 2 — 423 1,277 409 66 Commercial Banking 13,601 3,322 37,826 733 3,923 780 36 60,221 13,686 27,811 Global Banking and Markets — 1,135 20,066 727 — — — 21,928 491 14,444 Corporate Centre — — 163 — — — — 163 — 141 At 31 Dec 2023 14,010 4,834 58,121 1,460 3,925 780 459 83,589 14,586 42,462 1 Comprised exclusively by exposures in Global Private Banking. HSBC Holdings plc Annual Report on Form 20-F 209 Commercial real estate gross loans and advances to customers by credit quality of which: HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total UK Hong Kong of which: Hong Kong excluding exposure to mainland China borrowers $m $m $m $m $m $m $m $m $m $m $m Strong 4,663 739 9,106 137 — 18 42 14,705 4,875 4,522 4,484 Good 2,098 1,430 16,113 407 566 111 — 20,725 2,107 10,421 9,754 Satisfactory 5,770 1,312 13,556 592 1,423 283 — 22,936 5,948 10,850 10,716 Sub-standard 915 117 4,665 — 615 35 1 6,348 940 4,469 3,693 Credit impaired 492 256 6,469 117 240 22 23 7,619 535 5,985 4,554 At 31 Dec 2024 13,938 3,854 49,909 1,253 2,844 469 66 72,333 14,405 36,247 33,201 Strong 3,940 740 12,394 255 25 65 16 17,435 4,191 6,527 6,118 Good 2,555 2,054 17,777 246 781 130 18 23,561 2,592 12,004 11,262 Satisfactory 6,370 1,642 19,509 634 1,691 500 407 30,753 6,575 16,290 15,759 Sub-standard 701 182 4,856 180 1,262 60 — 7,241 726 4,400 3,102 Credit impaired 444 216 3,585 145 166 25 18 4,599 502 3,241 576 At 31 Dec 2023 14,010 4,834 58,121 1,460 3,925 780 459 83,589 14,586 42,462 36,817 The Hong Kong CRE portfolio (excluding exposure to mainland China borrowers) saw negative credit migration in 2024 as a result of higher interest rates, high inventory levels and weak demand. This was predominantly driven by a deterioration in the secured portfolio as borrowers sought payment deferrals to accommodate debt serviceability challenges. Secured exposures account for 54% of the total portfolio (31 December 2023: 54%), with collateral values regularly updated in line with our existing practice. The trend of loan right-sizing and borrower deleveraging within the secured portfolio has supported good collateral coverage levels that continue to provide headroom in the event of a further softening of property valuations. As at 31 December 2024, the weighted average LTV: – of performing exposures rated ‘sub-standard’ w as 46% (31 December 2023: 54%); – of ‘credit impaired’ exposures was 58% (31 December 2023: 71%). This has driven relatively low levels of stage 3 allowance for ECL. The reduction in LTV reflects the significantly smaller 'credit impaired' portfolio at 31 December 2023. The unsecured portfolio remained stable in size and quality, with limited levels of default and close to 90% rated Strong or Good. Unsecured exposures are typically granted to strong, listed Hong Kong CRE developers, which commonly are members of conglomerate groups with diverse cashflows. We continue to closely assess and manage the risk in the portfolio, including through portfolio reviews and stress testing. Vulnerable borrowers, including those with debt serviceability challenges and higher LTV levels, are subject to heightened monitoring and management. Market conditions remain challenging, particularly for commercial property as a result of continued weakness in demand. The performance of the residential market remains mixed, with some initial improvement in sentiment and transaction levels observed in the fourth quarter of 2024, driven by a further easing of real estate regulatory policies in October and improved end-user affordability as prices and interest rates fell. Nevertheless, property price pressure is likely to persist in the near term and until economic conditions and sentiment improve. Given the more uncertain interest rate outlook, we expect broader market fundamentals to remain subdued and challenges in this sector to continue. Refinance risk in commercial real estate Commercial real estate lending tends to require the repayment of a significant proportion of the principal at maturity. Typically, a customer will arrange repayment through the acquisition of a new loan to settle the existing debt. Refinance risk is the risk that a customer, being unable to repay the debt on maturity, fails to refinance it at commercial terms. We monitor our commercial real estate portfolio closely, assessing indicators for signs of potential issues with refinancing. Maturity analysis commercial real estate gross loans and advances to customers of which: HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total UK Hong Kong $m $m $m $m $m $m $m $m $m $m < 1 year 3,488 846 22,244 455 1,084 111 20 28,248 3,826 18,204 1–2 years 3,303 876 11,213 162 603 142 6 16,305 3,373 7,196 2–5 years 6,634 1,600 14,079 447 1,145 143 40 24,088 6,685 9,254 > 5 years 513 532 2,373 189 12 73 — 3,692 521 1,593 At 31 Dec 2024 13,938 3,854 49,909 1,253 2,844 469 66 72,333 14,405 36,247 < 1 year 3,553 1,496 25,427 396 1,472 619 437 33,400 3,950 19,887 1–2 years 4,514 474 14,144 175 623 60 2 19,992 4,571 10,923 2–5 years 5,411 2,149 16,052 441 1,814 71 3 25,941 5,520 9,885 > 5 years 532 715 2,498 448 16 30 17 4,256 545 1,767 At 31 Dec 2023 14,010 4,834 58,121 1,460 3,925 780 459 83,589 14,586 42,462 210 HSBC Holdings plc Annual Report on Form 20-F Risk review The following table presents the Group’s exposure to borrowers classified in the commercial real estate sector where the ultimate parent is based in mainland China, as well as all commercial real estate exposures booked on mainland China balance sheets. In addition to CRE as defined in our primary CRE disclosure above, this table includes financing provided to a corporate or financial entity for the purchase or financing of a property which supports the overall operations of the business. This provides a more comprehensive view of our mainland China CRE exposures. The exposures at 31 December 2024 are split by country/territory and credit quality including allowances for ECL by stage. Mainland China commercial real estate (Audited) Hong Kong Mainland China Rest of the Group Total $m $m $m $m Loans and advances to customers 1 3,161 3,694 303 7,158 Guarantees issued and others 2 80 16 5 101 Total mainland China commercial real estate exposure at 31 Dec 2024 3,241 3,710 308 7,259 Distribution of mainland China commercial real estate exposure by credit quality Strong 118 1,817 109 2,044 Good 578 595 1 1,174 Satisfactory 196 899 49 1,144 Sub-standard 777 136 149 1,062 Credit impaired 1,572 263 — 1,835 At 31 Dec 2024 3,241 3,710 308 7,259 Allowance for ECL by credit quality Strong — ( 4 ) — ( 4 ) Good — ( 3 ) — ( 3 ) Satisfactory — ( 13 ) — ( 13 ) Sub-standard ( 261 ) ( 30 ) ( 17 ) ( 308 ) Credit impaired ( 749 ) ( 81 ) — ( 830 ) At 31 Dec 2024 ( 1,010 ) ( 131 ) ( 17 ) ( 1,158 ) Allowance for ECL by stage distribution Stage 1 — ( 9 ) — ( 9 ) Stage 2 ( 261 ) ( 41 ) ( 17 ) ( 319 ) Stage 3 ( 743 ) ( 81 ) — ( 824 ) POCI ( 6 ) — — ( 6 ) At 31 Dec 2024 ( 1,010 ) ( 131 ) ( 17 ) ( 1,158 ) ECL coverage % 31.2 3.5 5.5 16.0 Loans and advances to customers 1 6,033 4,917 839 11,789 Guarantees issued and others 2 255 66 37 358 Total mainland China commercial real estate exposure at 31 Dec 2023 6,288 4,983 876 12,147 Distribution of mainland China commercial real estate exposure by credit quality Strong 781 1,723 6 2,510 Good 604 953 421 1,978 Satisfactory 679 1,704 261 2,644 Sub-standard 1,298 327 188 1,813 Credit impaired 2,926 276 — 3,202 At 31 Dec 2023 6,288 4,983 876 12,147 Allowance for ECL by credit quality Strong — ( 3 ) — ( 3 ) Good — ( 5 ) ( 1 ) ( 6 ) Satisfactory ( 3 ) ( 27 ) — ( 30 ) Sub-standard ( 66 ) ( 87 ) ( 16 ) ( 169 ) Credit impaired ( 1,726 ) ( 125 ) — ( 1,851 ) At 31 Dec 2023 ( 1,795 ) ( 247 ) ( 17 ) ( 2,059 ) Allowance for ECL by stage distribution Stage 1 — ( 10 ) — ( 10 ) Stage 2 ( 69 ) ( 112 ) ( 17 ) ( 198 ) Stage 3 ( 1,726 ) ( 125 ) — ( 1,851 ) At 31 Dec 2023 ( 1,795 ) ( 247 ) ( 17 ) ( 2,059 ) ECL coverage % 28.5 5.0 1.9 17.0 1 Amounts represent gross carrying amount. 2 Amounts represent nominal amount for guarantees and other contingent liabilities. HSBC Holdings plc Annual Report on Form 20-F 211 (Unaudited) The mainland China commercial real estate portfolio continues to face challenges as market fundamentals remain weak and refinancing risks continue. The portfolio remains closely managed, with reductions in exposures driven by a combination of de-risking measures, repayments by performing customers and write-offs in the ‘credit impaired’ category. The portfolio of mainland China CRE loans booked in Hong Kong remains relatively higher risk, with allowances for ECL substantially against unsecured exposures. For secured exposures, allowances for ECL are minimal, reflecting the nature and value of the security held. Approximately half of the performing exposure in the mainland China CRE portfolio booked in Hong Kong is lending to state-owned enterprises and relatively strong privately-owned enterprises. This is reflected in the relatively low allowances for ECL in this part of the portfolio. Mainland China real estate market activity remains depressed with continued weakness in underlying buyer demand for housing. Various government stimulus measures were introduced in 2024 to underpin market confidence. Despite some early signs of price stabilisation in certain cities, these measures have not yet triggered a meaningful recovery in transaction levels. Financing conditions and liquidity for borrowers operating in the real estate sector therefore remains constrained, particularly for privately-owned enterprises. A market recovery is likely to be protracted and contingent on further government support. The Group has additional exposures to mainland China commercial real estate as a result of lending to multinational corporates booked outside of mainland China, which is not incorporated in the table above. Collateral and other credit enhancements (Audited) Although collateral can be an important mitigant of credit risk, it is the Group’s practice to lend on the basis of the customer’s ability to meet their obligations out of cash flow resources rather than placing primary reliance on collateral and other credit risk enhancements. Depending on the customer’s standing and the type of product, facilities may be provided without any collateral or other credit enhancements. For other lending, a charge over collateral is obtained and considered in determining the credit decision and pricing. In the event of default, the Group may utilise the collateral as a source of repayment. Depending on its form, collateral can have a significant financial effect in mitigating our exposure to credit risk. Where there is sufficient collateral, an expected credit loss is not recognised. This is the case for reverse repurchase agreements and for certain loans and advances to customers where the loan to value (‘LTV’) is very low. Mitigants may include a charge on borrowers’ specific assets, such as real estate or financial instruments. Other credit risk mitigants include short positions in securities and financial assets held as part of linked insurance/investment contracts where the risk is predominantly borne by the policyholder. Additionally, risk may be managed by employing other types of collateral and credit risk enhancements, such as second charges, other liens and unsupported guarantees. Guarantees are normally taken from corporates and export credit agencies. Corporates would normally provide guarantees as part of a parent/ subsidiary relationship and span a number of credit grades. The export credit agencies will normally be investment grade. Certain credit mitigants are used strategically in portfolio management activities. While single name concentrations arise in portfolios managed by Global Banking and Corporate Banking, it is only in Global Banking that their size requires the use of portfolio level credit mitigants. Across Global Banking, risk limits and utilisations, maturity profiles and risk quality are monitored and managed proactively. This process is key to the setting of risk appetite for these larger, more complex, geographically distributed customer groups. While the principal form of risk management continues to be at the point of exposure origination, through the lending decision-making process, Global Banking also utilises loan sales and credit default swap (‘CDS’) hedges to manage concentrations and reduce risk. These transactions are the responsibility of a dedicated Global Banking portfolio management team. Hedging activity is carried out within agreed credit parameters, and is subject to market risk limits and a robust governance structure. Where applicable, CDSs are entered into directly with a central clearing house counterparty. Otherwise, the Group’s exposure to CDS protection providers is diversified among mainly banking counterparties with strong credit ratings. CDS mitigants are held at portfolio level and are not included in the expected credit loss calculations. CDS mitigants are not reported in the following tables. Collateral on loans and advances Collateral held is analysed separately for commercial real estate and for other corporate, commercial and financial (non-bank) lending. The following tables include off-balance sheet loan commitments, primarily undrawn credit lines. The collateral measured in the following tables consists of fixed first charges on real estate, and charges over cash and marketable financial instruments. The values in the tables represent the expected market value on an open market basis, actual values realised are a function of market conditions. No adjustment has been made to the collateral for any expected costs of recovery. Marketable securities are measured at their fair value. Other types of collateral, such as unsupported guarantees and floating charges over the assets of a customer’s business, are not measured in the following tables. While such mitigants have value, often providing rights in insolvency, their assignable value is not sufficiently certain and they are therefore assigned no value for disclosure purposes. The LTV ratios presented are calculated by directly associating loans and advances with the collateral that individually and uniquely supports each facility. When collateral assets are shared by multiple loans and advances, whether specifically or, more generally, by way of an all monies charge, the collateral value is pro-rated across the loans and advances protected by the collateral. For credit-impaired loans, the collateral values cannot be directly compared with impairment allowances recognised. The LTV figures use open market values with no adjustments, actual values realised are a function of market conditions. Impairment allowances are calculated on a different basis, by considering other cash flows and adjusting collateral values for costs of realising collateral as explained further on page 381 . Commercial real estate loans and advances The value of commercial real estate collateral is determined by using a combination of external and internal valuations and physical inspections. For commercial real estate, where the facility exceeds regulatory threshold requirements, Group policy requires an independent review of the valuation at least every three years, or more frequently as the need arises. In Hong Kong, market practice is typically for lending to major property companies to be either secured by guarantees or unsecured. In Europe, facilities of a working capital nature are generally not secured by a first fixed charge, and are therefore disclosed as not collateralised. 212 HSBC Holdings plc Annual Report on Form 20-F Risk review Wholesale lending – commercial real estate loans and advances to customers including loan commitments by level of collateral for key countries/territories (by stage) (Audited) Gross carrying/nominal amount ECL coverage Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m % % % % % Not collateralised 36,168 4,709 1,704 — 42,581 0.1 9.0 47.5 — 3.0 Fully collateralised by LTV ratio 37,090 11,909 5,254 — 54,253 0.1 1.7 7.8 — 1.2 –  less than 50% 20,522 5,154 2,413 — 28,089 0.1 1.7 5.7 — 0.9 –  51% to 75% 11,392 3,840 1,691 — 16,923 0.1 2.2 7.6 — 1.3 –  76% to 90% 2,554 2,277 767 — 5,598 0.1 0.9 12.5 — 2.1 –  91% to 100% 2,622 638 383 — 3,643 0.2 2.3 12.3 — 1.8 Partially collateralised (A):  LTV > 100% 2,119 698 815 64 3,696 0.2 2.8 19.7 45.8 5.8 –  collateral value on A 1,255 457 570 29 2,311 Total at 31 Dec 2024 75,377 17,316 7,773 64 100,530 0.1 3.8 17.7 45.8 2.1 of which: UK Not collateralised 4,487 1,890 127 — 6,504 0.4 3.8 27.8 — 1.9 Fully collateralised by LTV ratio 9,139 3,194 305 — 12,638 0.2 1.1 8.2 — 0.6 –  less than 50% 2,903 761 160 — 3,824 0.2 1.5 8.0 — 0.8 –  51% to 75% 4,202 1,693 69 — 5,964 0.2 1.2 12.0 — 0.6 –  76% to 90% 1,173 732 24 — 1,929 0.1 0.4 10.2 — 0.3 –  91% to 100% 861 8 52 — 921 0.1 7.7 2.7 — 0.3 Partially collateralised (B):  LTV > 100% 503 565 119 46 1,233 0.2 2.9 21.1 48.6 5.3 –  collateral value on B 296 350 69 26 741 Total UK at 31 Dec 2024 14,129 5,649 551 46 20,375 0.2 2.2 15.5 48.6 1.3 of which: Hong Kong Not collateralised 16,380 2,312 1,404 — 20,096 — 14.3 47.9 — 5.0 Fully collateralised by LTV ratio 17,115 6,045 4,127 — 27,287 0.1 1.4 5.8 — 1.2 –  less than 50% 12,935 3,589 2,102 — 18,626 0.1 1.3 3.8 — 0.7 –  51% to 75% 3,534 1,059 1,243 — 5,836 0.1 2.2 6.2 — 1.8 –  76% to 90% 336 1,050 654 — 2,040 0.1 1.1 11.8 — 4.4 –  91% to 100% 310 347 128 — 785 — 0.5 2.4 — 0.6 Partially collateralised (C):  LTV > 100% 185 62 562 18 827 — 1.9 17.6 38.1 12.9 –  collateral value on C 119 41 397 3 560 Total Hong Kong at 31 Dec 2024 33,680 8,419 6,093 18 48,210 — 4.9 16.6 38.1 3.0 Not collateralised 36,754 5,128 2,543 — 44,425 0.1 3.9 72.4 — 4.7 Fully collateralised by LTV ratio 46,212 15,177 1,963 — 63,352 0.1 2.5 12.0 — 1.0 –  less than 50% 24,391 7,413 574 — 32,378 0.1 1.9 13.1 — 0.7 –  51% to 75% 16,086 5,240 657 — 21,983 0.1 3.1 9.3 — 1.1 –  76% to 90% 3,140 1,437 454 — 5,031 0.1 3.5 11.8 — 2.1 –  91% to 100% 2,595 1,087 278 — 3,960 0.2 2.3 16.6 — 1.9 Partially collateralised (A):  LTV > 100% 7,075 1,487 156 50 8,768 0.1 1.8 30.2 14.5 1.0 –  collateral value on A 4,004 1,061 115 26 5,206 Total at 31 Dec 2023 90,041 21,792 4,662 50 116,545 0.1 2.8 45.6 14.5 2.4 of which: UK Not collateralised 4,644 1,288 97 — 6,029 0.4 2.0 12.4 — 0.9 Fully collateralised by LTV ratio 9,762 2,512 295 — 12,569 0.1 1.3 13.9 — 0.7 –  less than 50% 3,514 507 51 — 4,072 0.1 1.9 21.6 — 0.6 –  51% to 75% 4,826 1,418 103 — 6,347 0.1 1.1 16.4 — 0.6 –  76% to 90% 749 292 80 — 1,121 0.1 1.3 14.9 — 1.5 –  91% to 100% 673 295 61 — 1,029 0.1 1.6 1.9 — 0.6 Partially collateralised (B):  LTV > 100% 1,580 239 82 35 1,936 0.1 1.1 34.2 20.7 2.0 –  collateral value on B 524 171 62 17 774 Total UK at 31 Dec 2023 15,986 4,039 474 35 20,534 0.2 1.5 17.1 20.7 0.9 of which: Hong Kong Not collateralised 16,889 2,323 2,215 — 21,427 — 6.5 78.7 — 8.8 Fully collateralised by LTV ratio 20,783 8,447 989 — 30,219 — 2.1 5.0 — 0.8 –  less than 50% 15,425 5,604 294 — 21,323 — 1.5 1.4 — 0.5 –  51% to 75% 4,102 2,140 312 — 6,554 0.1 3.8 2.1 — 1.4 –  76% to 90% 657 619 315 — 1,591 0.1 1.8 8.0 — 2.3 –  91% to 100% 599 84 68 — 751 — 0.1 20.5 — 1.9 Partially collateralised (C):  LTV > 100% 1,770 616 52 15 2,453 — 0.8 24.5 — 0.7 –  collateral value on C 1,569 535 39 8 2,151 Total Hong Kong at 31 Dec 2023 39,442 11,386 3,256 15 54,099 — 2.9 55.5 — 4.0 HSBC Holdings plc Annual Report on Form 20-F 213 Other corporate, commercial and financial (non-bank) loans and advances Other corporate, commercial and financial (non-bank) loans are analysed separately in the following table, which focuses on the countries/territories containing the majority of our loans and advances balances. For financing activities in other corporate and commercial lending, collateral value is not strongly correlated to principal repayment performance. Collateral values are generally refreshed when an obligor’s general credit performance deteriorates and we have to assess the likely performance of secondary sources of repayment should it prove necessary to rely on them. Wholesale lending – other corporate, commercial and financial (non-bank) loans and advances including loan commitments by level of collateral for key countries/territories (by stage) (Audited) Gross carrying/nominal amount ECL coverage Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m % % % % % Not collateralised 713,028 62,844 6,870 5 782,747 0.1 0.9 41.5 14.2 0.5 Fully collateralised by LTV ratio 87,488 11,992 3,394 21 102,895 0.1 2.0 8.0 98.1 0.6 –  less than 50% 39,432 4,360 1,703 — 45,495 0.1 1.6 6.9 — 0.5 –  51% to 75% 20,169 4,643 778 21 25,611 0.1 2.8 12.0 98.1 1.0 –  76% to 90% 9,016 1,515 512 — 11,043 0.1 1.6 7.1 — 0.6 –  91% to 100% 18,871 1,474 401 — 20,746 — 0.8 6.3 — 0.2 Partially collateralised (A):  LTV > 100% 51,536 5,772 2,411 3 59,722 0.1 0.8 34.3 7.0 1.5 –  collateral value on A 22,800 2,519 1,162 1 26,482 Total at 31 Dec 2024 852,052 80,608 12,675 29 945,364 0.1 1.1 31.2 72.8 0.6 of which: UK Not collateralised 134,075 10,822 2,661 4 147,562 0.1 2.5 32.4 — 0.9 Fully collateralised by LTV ratio 24,552 3,046 968 — 28,566 0.1 2.4 5.8 — 0.6 –  less than 50% 9,183 1,288 473 — 10,944 0.1 2.2 2.8 — 0.5 –  51% to 75% 7,544 1,216 244 — 9,004 0.1 2.7 7.0 — 0.7 –  76% to 90% 2,942 367 129 — 3,438 0.1 2.3 15.3 — 0.9 –  91% to 100% 4,883 175 122 — 5,180 0.1 2.1 5.3 — 0.3 Partially collateralised (B):  LTV > 100% 7,016 1,055 395 — 8,466 0.2 1.3 10.8 — 0.8 –  collateral value on B 3,832 581 252 — 4,665 Total UK at 31 Dec 2024 165,643 14,923 4,024 4 184,594 0.1 2.4 23.9 — 0.8 of which: Hong Kong Not collateralised 117,849 6,389 1,313 — 125,551 — 0.6 58.1 — 0.7 Fully collateralised by LTV ratio 28,291 5,866 1,877 21 36,055 0.1 2.1 5.3 98.1 0.7 –  less than 50% 14,500 1,774 903 — 17,177 0.1 1.4 5.1 — 0.5 –  51% to 75% 7,331 2,766 449 21 10,567 0.1 3.0 8.3 98.1 1.4 –  76% to 90% 2,896 752 372 — 4,020 0.1 1.9 3.6 — 0.7 –  91% to 100% 3,564 574 153 — 4,291 — 0.3 1.7 — 0.1 Partially collateralised (C):  LTV > 100% 17,125 1,535 1,048 — 19,708 — 0.4 46.8 — 2.6 –  collateral value on C 6,741 627 639 — 8,007 Total Hong Kong at 31 Dec 2024 163,265 13,790 4,238 21 181,314 — 1.2 31.9 98.1 0.9 Not collateralised 672,142 76,261 7,702 8 756,113 0.1 0.9 40.0 6.8 0.6 Fully collateralised by LTV ratio 113,339 19,747 2,629 23 135,738 0.1 1.4 10.7 89.8 0.5 –  less than 50% 42,953 7,069 1,168 — 51,190 0.1 1.5 11.8 — 0.5 –  51% to 75% 24,011 8,222 887 — 33,120 0.1 1.3 6.4 — 0.6 –  76% to 90% 10,194 2,531 421 23 13,169 0.1 1.6 10.3 90.6 0.9 –  91% to 100% 36,181 1,925 153 — 38,259 — 1.1 27.6 — 0.2 Partially collateralised (A):  LTV > 100% 53,686 9,019 2,233 3 64,941 0.1 0.7 32.2 38.4 1.3 –  collateral value on A 24,505 4,266 993 1 29,765 Total at 31 Dec 2023 839,167 105,027 12,564 34 956,792 0.1 1.0 32.5 67.1 0.6 of which: UK Not collateralised 117,824 20,401 3,423 — 141,648 0.2 1.9 23.2 — 1.0 Fully collateralised by LTV ratio 22,217 5,912 1,162 — 29,291 0.1 1.7 3.7 — 0.6 –  less than 50% 7,385 2,340 601 — 10,326 0.1 1.2 1.3 — 0.5 –  51% to 75% 6,966 2,292 434 — 9,692 0.1 1.7 3.6 — 0.7 –  76% to 90% 2,256 809 106 — 3,171 0.2 2.5 15.8 — 1.3 –  91% to 100% 5,610 471 21 — 6,102 0.1 2.1 14.5 — 0.3 Partially collateralised (B):  LTV > 100% 6,335 1,732 299 — 8,366 0.2 1.8 18.4 — 1.2 –  collateral value on B 3,508 1,080 175 — 4,763 Total UK at 31 Dec 2023 146,376 28,045 4,884 — 179,305 0.2 1.8 18.3 — 0.9 of which: Hong Kong Not collateralised 114,025 7,523 906 — 122,454 — 0.4 57.5 — 0.5 Fully collateralised by LTV ratio 32,857 8,918 877 22 42,674 0.1 1.3 6.6 94.7 0.5 –  less than 50% 16,175 2,898 230 — 19,303 0.1 1.4 11.8 — 0.4 –  51% to 75% 9,461 4,515 336 — 14,312 0.1 1.2 3.1 — 0.5 –  76% to 90% 4,245 863 253 22 5,383 0.1 1.8 2.0 94.7 0.9 –  91% to 100% 2,976 642 58 — 3,676 — 0.4 27.0 — 0.5 Partially collateralised (C):  LTV > 100% 16,152 2,887 704 — 19,743 — 0.6 30.2 — 1.2 –  collateral value on C 6,619 1,306 318 — 8,243 Total Hong Kong at 31 Dec 2023 163,034 19,328 2,487 22 184,871 0.1 0.8 31.8 94.7 0.6 214 HSBC Holdings plc Annual Report on Form 20-F Risk review Other credit risk exposures In addition to collateralised lending, other credit enhancements are employed and methods used to mitigate credit risk arising from financial assets. These are summarised below: – Some securities issued by governments, banks and other financial institutions benefit from additional credit enhancements provided by government guarantees that cover the assets. – Debt securities issued by banks and financial institutions include asset-backed securities (‘ABSs’) and similar instruments, which are supported by underlying pools of financial assets. Credit risk associated with ABSs is reduced through the purchase of credit default swap (‘CDS’) protection. – Trading loans and advances mainly consist of reverse repos and stock borrowing, which are by their nature collateralised. – Cash collateral is posted to satisfy margin requirements. There is limited credit risk on cash collateral posted since in the event of default of the counterparty this would be set off against the related liability. Collateral accepted as security that the Group is permitted to sell or repledge under these arrangements is described on page 422 of the financial statements. The Group’s maximum exposure to credit risk includes financial guarantees and similar contracts granted, as well as loan and other credit-related commitments. Depending on the terms of the arrangement, we may use additional credit mitigation if a guarantee is called upon or a loan commitment is drawn and subsequently defaults. For further information on these arrangements, see Note 32 on the financial statements. Derivatives We participate in transactions exposing us to counterparty credit risk. Counterparty credit risk is the risk of financial loss if the counterparty to a transaction defaults before satisfactorily settling it. It arises principally from over-the-counter (‘OTC’) derivatives and securities financing transactions and is calculated in both the trading and non- trading books. Transactions vary in value by reference to a market factor such as an interest rate, exchange rate or asset price. The counterparty risk from derivative transactions is taken into account when reporting the fair value of derivative positions. The adjustment to the fair value is known as the credit valuation adjustment (‘CVA’). For an analysis of CVAs, see Note 12 on the financial statements. The following table reflects by risk type the fair values and gross notional contract amounts of derivatives cleared through an exchange, central counterparty or non-central counterparty. Notional contract amounts and fair values of derivatives 2024 2023 Notional amount Fair value Notional amount Fair value Assets Liabilities Assets Liabilities $m $m $m $m $m $m Total OTC derivatives 29,273,397 368,938 367,759 24,551,539 337,066 343,098 –  total OTC derivatives cleared by central counterparties 13,484,581 111,974 113,091 11,130,785 116,520 118,796 –  total OTC derivatives not cleared by central counterparties 15,788,816 256,964 254,668 13,420,754 220,546 224,302 Total exchange traded derivatives 1,267,685 12,445 9,435 1,111,247 9,134 8,159 Gross 30,541,082 381,383 377,194 25,662,786 346,200 351,258 Offset (112,746) (112,746) (116,486) (116,486) At 31 Dec 268,637 264,448 229,714 234,772 The purposes for which HSBC uses derivatives are described in Note 15 on the financial statements. The International Swaps and Derivatives Association (‘ISDA’) master agreement is our preferred agreement for documenting derivatives activity. It is common, and our preferred practice, for the parties involved in a derivative transaction to execute a credit support annex (‘CSA’) in conjunction with the ISDA master agreement. Under a CSA, collateral is passed between the parties to mitigate the counterparty risk inherent in outstanding positions. The majority of our CSAs are with financial institutional clients. We manage the counterparty exposure on our OTC derivative contracts by using collateral agreements with counterparties and netting agreements. Currently, we do not actively manage our general OTC derivative counterparty exposure in the credit markets, although we may manage individual exposures in certain circumstances. We place strict policy restrictions on collateral types and as a consequence the types of collateral received and pledged are, by value, highly liquid and of a strong quality, being predominantly cash. Where a collateral type is required to be approved outside the collateral policy, approval is required from a committee of senior representatives from Markets, Legal and Risk. See Note 31 on the financial statements for details regarding legally enforceable right of offset in the event of counterparty default and collateral received in respect of derivatives. Personal lending This section presents further disclosures related to personal lending. It provides details of the main legal entities, countries and products that are driving the change observed in personal gross loans and advances to customers, with the impact of foreign exchange separately identified. Additionally, Hong Kong and UK mortgage book loan to value (‘LTV’) data is provided. This section also provides reconciliations of the opening 1 January 2024 to 31 December 2024 closing gross carrying/nominal amounts and associated allowance for ECL by product. Further product granularity is also provided by stage, with data for our main legal entities presented for gross loans and advances to customers, loan and other credit-related commitments and financial guarantees. At 31 December 2024, total personal lending for gross loans and advances to customers of $447.2bn decreased by $0.3bn on a reported basis, compared with 31 December 2023. This decrease included adverse foreign exchange movements of $9.9bn. On a constant currency basis, the increase of $9.6bn was driven by growth in mortgages (up $7.5bn) and other personal lending (up $2.1bn). On a constant currency basis, mortgage lending gross balances increased by $7.5bn to $361.3bn at 31 December 2024. Mortgages grew in our main legal entities in the UK (up $4.5bn), in the US (up $2.7bn), Australia (up $1.3bn) and Mexico (up $0.3bn). These increases were partly offset by a $1.2bn decrease in China, mainly due to loan repayments. HSBC Holdings plc Annual Report on Form 20-F 215 On a constant currency basis, other personal lending balances at 31 December 2024 increased by $2.1bn compared with 31 December 2023. This included an increase in our entities in Europe (up $1.1bn), in our entities in Asia (up $1.0bn) and in Mexico (up $0.3bn). This was partly offset by the sale of our business in Argentina (down $0.3bn). Total personal lending gross carrying amounts in stage 2 decreased by $7.6bn compared with 31 December 2023. Excluding adverse foreign exchange movements of $1.1bn, the decrease of $6.5bn was driven by a reduction in credit judgements, primarily in the UK. At 31 December 2024, the write-offs attributable to personal lending increased by $0.2bn to $1.5bn, compared with 31 December 2023. At 31 December 2024, the allowance for ECL attributable to personal lending, excluding off-balance sheet loan commitments and guarantees, decreased by $0.3bn to $ 2.5 bn, compared with 31 December 2023. This decrease included favourable foreign exchange movements of $0.2bn. On a constant currency basis, the allowance for ECL attributable to other personal lending of $ 2.1 bn decreased by $0.1bn compared with 31 December 2023. This net release was driven by resilient performance and a reduction in credit judgements in the UK. The allowance for ECL attributable to mortgages of $0.5bn remained unchanged compared with 31 December 2023. The quality of both our Hong Kong and UK mortgage books remained strong, with low levels of impairment allowances. The average LTV ratio on new mortgage lending in Hong Kong was 67%, compared with an estimated 63% for the overall mortgage portfolio. The average LTV ratio on new lending in the UK was 69%, compared with an estimated 53% for the overall mortgage portfolio. Total personal lending for loans and advances to customers at amortised cost by stage distribution Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total $m $m $m $m $m $m $m $m By portfolio First lien residential mortgages 324,703 34,177 2,450 361,330 (59) (130) (284) (473) –  of which: interest-only (including offset) 21,155 2,457 103 23,715 (3) (10) (17) (30) –  affordability (including US adjustable rate mortgages) 16,628 386 243 17,257 (2) (2) (7) (11) Other personal lending 79,043 5,742 1,110 85,895 (511) (1,028) (512) (2,051) –  second lien residential mortgages 366 10 19 395 — — (2) (2) –  guaranteed loans in respect of residential property 6,492 186 20 6,698 (2) (2) (5) (9) –  other personal lending which is secured 30,564 478 138 31,180 (12) (4) (15) (31) –  credit cards 21,611 2,991 313 24,915 (268) (660) (199) (1,127) –  other personal lending which is unsecured 18,198 1,864 598 20,660 (214) (345) (279) (838) –  motor vehicle finance 1,812 213 22 2,047 (15) (17) (12) (44) At 31 Dec 2024 403,746 39,919 3,560 447,225 (570) (1,158) (796) (2,524) By legal entity HSBC UK Bank plc 152,338 31,325 1,075 184,738 (148) (307) (211) (666) HSBC Bank plc 1 23,501 1,198 324 25,023 (17) (24) (99) (140) The Hongkong and Shanghai Banking Corporation Limited 191,614 5,519 1,170 198,303 (174) (385) (164) (723) HSBC Bank Middle East Limited 3,678 158 40 3,876 (14) (29) (30) (73) HSBC North America Holdings Inc. 20,851 497 327 21,675 (4) (12) (11) (27) Grupo Financiero HSBC, S.A. de C.V. 11,016 1,172 620 12,808 (207) (400) (279) (886) Other trading entities 1 748 50 4 802 (6) (1) (2) (9) At 31 Dec 2024 403,746 39,919 3,560 447,225 (570) (1,158) (796) (2,524) 1 At 31 December 2023, ‘Other trading entities’ included gross carrying amount of $9,079m and allowances for ECL of $23m related to Private Banking entities that were reclassified to HSBC Bank plc to continue the process of simplifying our structure. Total personal lending for loans and other credit-related commitments and financial guarantees by stage distribution Nominal amount Allowance for ECL Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total $m $m $m $m $m $m $m $m HSBC UK Bank plc 51,078 442 47 51,567 (6) — (3) (9) HSBC Bank plc 1,605 7 2 1,614 — — — — The Hongkong and Shanghai Banking Corporation Limited 189,737 1,165 35 190,937 (4) — (2) (6) HSBC Bank Middle East Limited 2,452 7 — 2,459 — — — — HSBC North America Holdings Inc. 3,707 68 2 3,777 — — — — HSBC Bank Canada — — — — — — — — Grupo Financiero HSBC, S.A. de C.V. 3,892 — — 3,892 (7) — — (7) Other trading entities 434 2 — 436 — — — — At 31 Dec 2024 252,905 1,691 86 254,682 (17) — (5) (22) 216 HSBC Holdings plc Annual Report on Form 20-F Risk review Total personal lending for loans and advances to customers at amortised cost by stage distribution (continued) Gross carrying amount Allowance for ECL Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total $m $m $m $m $m $m $m $m By portfolio First lien residential mortgages 320,410 38,287 2,212 360,909 (102) (200) (269) (571) –  of which: interest-only (including offset) 21,895 2,923 139 24,957 (4) (27) (31) (62) –  affordability (including US adjustable rate mortgages) 14,380 381 291 15,052 (3) (1) (10) (14) Other personal lending 76,124 9,196 1,293 86,613 (477) (1,234) (585) (2,296) –  second lien residential mortgages 317 58 21 396 — (3) (5) (8) –  guaranteed loans in respect of residential property 8,001 502 90 8,593 (1) (5) (14) (20) –  other personal lending which is secured 28,900 424 157 29,481 (13) (5) (24) (42) –  credit cards 19,909 4,419 352 24,680 (236) (697) (203) (1,136) –  other personal lending which is unsecured 17,010 3,582 659 21,251 (212) (505) (331) (1,048) –  motor vehicle finance 1,987 211 14 2,212 (15) (19) (8) (42) At 31 Dec 2023 396,534 47,483 3,505 447,522 (579) (1,434) (854) (2,867) By legal entity HSBC UK Bank plc 146,354 35,190 1,218 182,762 (152) (490) (255) (897) HSBC Bank plc 14,598 1,747 273 16,618 (24) (22) (91) (137) The Hongkong and Shanghai Banking Corporation Limited 191,382 7,741 948 200,071 (165) (402) (162) (729) HSBC Bank Middle East Limited 3,335 397 47 3,779 (19) (33) (36) (88) HSBC North America Holdings Inc. 18,096 553 364 19,013 (5) (14) (16) (35) Grupo Financiero HSBC, S.A. de C.V. 12,717 1,740 536 14,993 (197) (463) (273) (933) Other trading entities 10,052 115 119 10,286 (17) (10) (21) (48) At 31 Dec 2023 396,534 47,483 3,505 447,522 (579) (1,434) (854) (2,867) Total personal lending for loans and other credit-related commitments and financial guarantees by stage distribution (continued) Nominal amount Allowance for ECL Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total $m $m $m $m $m $m $m $m HSBC UK Bank plc 52,093 734 88 52,915 (11) — (2) (13) HSBC Bank plc 1,630 36 4 1,670 — — — — The Hongkong and Shanghai Banking Corporation Limited 181,967 2,479 223 184,669 (3) — — (3) HSBC Bank Middle East Limited 1,978 7 1 1,986 — — — — HSBC North America Holdings Inc. 3,695 72 8 3,775 — — — — HSBC Bank Canada 6,610 113 30 6,753 — — — — Grupo Financiero HSBC, S.A. de C.V. 4,308 — — 4,308 (8) — — (8) Other trading entities 2,008 31 1 2,040 (1) — — (1) At 31 Dec 2023 254,289 3,472 355 258,116 (23) — (2) (25) Exposure to UK interest-only mortgage loans The following information is presented for HSBC branded interest- only mortgage loans. This excludes offset mortgages in first direct and private banking mortgages. At the end of 2024, the average LTV ratio of the interest-only mortgage loans was 44% (2023: 44%), and 99% (2023: 97%) had an LTV ratio of 75% or less. Of the interest-only mortgage loans that expired in 2022, 82% were repaid within 12 months of expiry with a total of 97% being repaid within 24 months of expiry. For those expired during 2023, 83% were repaid within 12 months of expiry. At 31 December 2024 , interest-only mortgage loan exposures were $15.2bn (2023: $15.2bn) and the maturity profile was as follows: UK interest-only mortgage loans $m Expired interest-only mortgage loans 128 Interest-only mortgage loans by maturity –  2025 165 –  2026 247 –  2027 366 –  2028 515 –  2029–2033 2,728 –  post-2033 11,100 At 31 Dec 2024 15,249 HSBC Holdings plc Annual Report on Form 20-F 217 UK interest-only mortgage loans (continued) $m Expired interest-only mortgage loans 141 Interest-only mortgage loans by maturity –  2024 141 –  2025 242 –  2026 315 –  2027 436 –  2028–2032 2,919 –  post-2032 11,010 At 31 Dec 2023 15,204 Exposure to offset mortgage in first direct The offset mortgage in first direct is no longer on sale and is only available for existing offset mortgage customers. It works by grouping together the customer’s mortgage, savings and current accounts to offset their credit and debit balances against their mortgage exposure. At 31 December 2024, exposures were worth a total $4.1bn with an average LTV ratio of 28% (2023: $5.0bn exposure and 29% LTV ratio). Reconciliations of changes in personal lending gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees The following disclosure provides a reconciliation by stage of the Group’s personal lending gross carrying/nominal amount and allowances for loans and advances to customers, including loan commitments and financial guarantees. In addition, three reconciliations by stage of the Group’s gross carrying/nominal amount and allowances for first lien mortgages, credit cards and other personal lending, including loan commitments and financial guarantees, have been included following the adoption of the recommendations of the DECL Taskforce’s third report since 2023. Personal lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2024 650,823 ( 602 ) 50,955 ( 1,434 ) 3,860 ( 856 ) 705,638 ( 2,892 ) Transfers of financial instruments: ( 2,023 ) ( 1,045 ) ( 345 ) 1,477 2,368 ( 432 ) — — –  transfers from stage 1 to stage 2 ( 45,220 ) 246 45,220 ( 246 ) — — — — –  transfers from stage 2 to stage 1 43,549 ( 1,247 ) ( 43,549 ) 1,247 — — — — –  transfers to stage 3 ( 743 ) 9 ( 2,715 ) 685 3,458 ( 694 ) — — –  transfers from stage 3 391 ( 53 ) 699 ( 209 ) ( 1,090 ) 262 — — Net remeasurement of ECL arising from transfer of stage — 745 — ( 605 ) — ( 132 ) — 8 Changes due to modifications not derecognised — — — — ( 25 ) — ( 25 ) — Net new and further lending/repayments 29,789 ( 17 ) ( 7,889 ) 278 ( 796 ) 470 21,104 731 Change to risk parameters – credit quality — 251 — ( 874 ) — ( 1,437 ) — ( 2,060 ) Changes to models used for ECL calculation — 29 — ( 109 ) — ( 20 ) — ( 100 ) Assets written off — — — — ( 1,534 ) 1,534 ( 1,534 ) 1,534 Foreign exchange and others 1,2,3 ( 21,938 ) 52 ( 1,111 ) 109 ( 227 ) 72 ( 23,276 ) 233 At 31 Dec 2024 656,651 ( 587 ) 41,610 ( 1,158 ) 3,646 ( 801 ) 701,907 ( 2,546 ) ECL income statement change for the period 1,008 ( 1,310 ) ( 1,119 ) ( 1,421 ) Recoveries 220 Others ( 32 ) Total ECL income statement change for the period ( 1,233 ) 1 Total includes $ 0.8 bn of gross carrying loans and advances to customers, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 23 m , reflecting business disposals, as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . 2 Total includes $ 6.4 b n of nominal amount and $ 1 m of corresponding allowance for ECL related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. 3 Total includes $ 2.4 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Argentina during 2024. As shown in the above table, the allowance for ECL for loans and advances to customers and relevant loan commitments and financial guarantees decreased by $ 346 m during the period from $ 2,892 m at 31 December 2023 to $ 2,546 m at 31 December 2024 . 218 HSBC Holdings plc Annual Report on Form 20-F Risk review This decrease was driven by: – $ 1,534 m of assets written off; – $ 731 m relating to volume movements, which included the allowance for ECL associated with new originations, assets derecognised and further lending/repayment; – foreign exchange and other movements of $ 233 m ; and – $ 8 m relating to the net remeasurement impact of stage transfers. These were partly offset by: – $ 2,060 m relating to credit quality changes, including the credit quality impact of financial instruments transferring between stages; and – $ 100 m of changes to models used for ECL calculation. The ECL charge for the period of $ 1,421 m presented in the above table consisted of $ 2,060 m relating to credit quality changes, including the credit quality impact of financial instruments transferring between stages, and $ 100 m relating to changes to models used for the calculation of ECL. This was partly offset by $ 731 m relating to underlying net book volume movements and $ 8 m relating to the net remeasurement impact of stage transfer. During the period, there was a net transfer between stage 1 and stage 2 of $ 1,671 m gross carrying/nominal amounts. This increase was mainly driven by HSBC UK ( $ 3,410 m ) due to mortgages portfolio and Mexico ($ 860 m) due to a slight deterioration in unsecured lending portfolio, partly offset by Hong Kong ($ 2,983 m) due to improvement in credit cards and other unsecured lending portfolio. A summary of basis of preparation is available on page 191. Personal lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees (Audited) Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2023 603,321 ( 587 ) 52,563 ( 1,505 ) 4,139 ( 805 ) 660,023 ( 2,897 ) Transfers of financial instruments: ( 2,144 ) ( 619 ) 39 1,087 2,105 ( 468 ) — — –  transfers from stage 1 to stage 2 ( 57,217 ) 270 57,217 ( 270 ) — — — — –  transfers from stage 2 to stage 1 55,307 ( 862 ) ( 55,307 ) 862 — — — — –  transfers to stage 3 ( 542 ) 3 ( 2,345 ) 614 2,887 ( 617 ) — — –  transfers from stage 3 308 ( 30 ) 474 ( 119 ) ( 782 ) 149 — — Net remeasurement of ECL arising from transfer of stage — 563 — ( 679 ) — ( 79 ) — ( 195 ) Net new and further lending/repayments 34,411 ( 47 ) ( 4,713 ) 350 ( 1,169 ) 144 28,529 447 Change to risk parameters – credit quality — 104 — ( 641 ) — ( 955 ) — ( 1,492 ) Changes to models used for ECL calculation — ( 13 ) — 21 — 7 — 15 Assets written off — — — — ( 1,326 ) 1,326 ( 1,326 ) 1,326 Foreign exchange and others 1,2 15,235 ( 3 ) 3,066 ( 67 ) 111 ( 26 ) 18,412 ( 96 ) At 31 Dec 2023 650,823 ( 602 ) 50,955 ( 1,434 ) 3,860 ( 856 ) 705,638 ( 2,892 ) ECL income statement change for the period 607 ( 949 ) ( 883 ) ( 1,225 ) Recoveries 226 Others 8 Total ECL income statement change for the period ( 991 ) 1 Total includes $ 7.8 b n of gross carrying loans and advances and a corresponding allowance for ECL of $ 11 m , due to the retention of certain balances previously classified as assets held for sale of our retail banking operations in France. For further details, see Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . 2 Total includes $ 2.0 b n of gross carrying loans and advances to customers, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 20 m , reflecting business disposals, as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . HSBC Holdings plc Annual Report on Form 20-F 219 First lien residential mortgages – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2024 340,764 ( 109 ) 38,513 ( 202 ) 2,258 ( 264 ) 381,535 ( 575 ) Transfers of financial instruments: ( 3,561 ) ( 232 ) 2,694 232 867 — — — –  transfers from stage 1 to stage 2 ( 33,524 ) 23 33,524 ( 23 ) — — — — –  transfers from stage 2 to stage 1 30,113 ( 244 ) ( 30,113 ) 244 — — — — –  transfers to stage 3 ( 290 ) 6 ( 1,127 ) 90 1,417 ( 96 ) — — –  transfers from stage 3 140 ( 17 ) 410 ( 79 ) ( 550 ) 96 — — Net remeasurement of ECL arising from transfer of stage — 163 — ( 152 ) — ( 30 ) — ( 19 ) Changes due to modifications not derecognised — — — — — — — — Net new and further lending/repayments 14,008 20 ( 6,336 ) 26 ( 523 ) 33 7,149 79 Change to risk parameters – credit quality — 115 — ( 73 ) — ( 103 ) — ( 61 ) Changes to models used for ECL calculation — ( 8 ) — 29 — 1 — 22 Assets written off — — — — ( 63 ) 63 ( 63 ) 63 Foreign exchange and others ( 6,535 ) ( 7 ) ( 530 ) 10 ( 65 ) 15 ( 7,130 ) 18 At 31 Dec 2024 344,676 ( 58 ) 34,341 ( 130 ) 2,474 ( 285 ) 381,491 ( 473 ) ECL income statement change for the period 290 ( 170 ) ( 99 ) 21 Recoveries 7 Others ( 1 ) Total ECL income statement change for the period 27 At 1 Jan 2023 317,666 ( 74 ) 40,048 ( 231 ) 2,230 ( 270 ) 359,944 ( 575 ) Transfers of financial instruments: ( 1,182 ) ( 109 ) 421 138 761 ( 29 ) — — –  transfers from stage 1 to stage 2 ( 41,207 ) 28 41,207 ( 28 ) — — — — –  transfers from stage 2 to stage 1 40,164 ( 117 ) ( 40,164 ) 117 — — — — –  transfers to stage 3 ( 354 ) 1 ( 958 ) 100 1,312 ( 101 ) — — –  transfers from stage 3 215 ( 21 ) 336 ( 51 ) ( 551 ) 72 — — Net remeasurement of ECL arising from transfer of stage — 72 — ( 79 ) — ( 67 ) — ( 74 ) Net new and further lending/repayments 15,447 ( 3 ) ( 3,939 ) 22 ( 751 ) 322 10,757 341 Change to risk parameters – credit quality — 16 — ( 67 ) — ( 269 ) — ( 320 ) Changes to models used for ECL calculation — ( 2 ) — 28 — — — 26 Assets written off — — — — ( 53 ) 53 ( 53 ) 53 Foreign exchange and others 8,833 ( 9 ) 1,983 ( 13 ) 71 ( 4 ) 10,887 ( 26 ) At 31 Dec 2023 340,764 ( 109 ) 38,513 ( 202 ) 2,258 ( 264 ) 381,535 ( 575 ) ECL income statement change for the period 83 ( 96 ) ( 14 ) ( 27 ) Recoveries 10 Others 13 Total ECL income statement change for the period ( 4 ) 220 HSBC Holdings plc Annual Report on Form 20-F Risk review Credit cards – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2024 153,292 ( 253 ) 6,547 ( 698 ) 450 ( 144 ) 160,289 ( 1,095 ) Transfers of financial instruments: 796 ( 453 ) ( 1,469 ) 717 673 ( 264 ) — — –  transfers from stage 1 to stage 2 ( 6,427 ) 129 6,427 ( 129 ) — — — — –  transfers from stage 2 to stage 1 7,255 ( 569 ) ( 7,255 ) 569 — — — — –  transfers to stage 3 ( 179 ) 2 ( 765 ) 327 944 ( 329 ) — — –  transfers from stage 3 147 ( 15 ) 124 ( 50 ) ( 271 ) 65 — — Net remeasurement of ECL arising from transfer of stage — 280 — ( 256 ) — ( 45 ) — ( 21 ) Changes due to modifications not derecognised — — — — ( 2 ) — ( 2 ) — Net new and further lending/repayments 9,604 18 ( 1,122 ) 127 ( 1 ) 194 8,481 339 Change to risk parameters – credit quality — 79 — ( 476 ) — ( 694 ) — ( 1,091 ) Changes to models used for ECL calculation — 22 — ( 122 ) — 1 — ( 99 ) Assets written off — — — — ( 736 ) 736 ( 736 ) 736 Foreign exchange and others 1 ( 7,380 ) 27 ( 196 ) 50 ( 41 ) 17 ( 7,617 ) 94 At 31 Dec 2024 156,312 ( 280 ) 3,760 ( 658 ) 343 ( 199 ) 160,415 ( 1,137 ) ECL income statement change for the period 399 ( 727 ) ( 544 ) ( 872 ) Recoveries 106 Others ( 10 ) Total ECL income statement change for the period ( 776 ) 1 Total includes $ 4.5 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada and our business in Argentina during 2024. Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2023 140,519 ( 244 ) 6,747 ( 777 ) 353 ( 160 ) 147,619 ( 1,181 ) Transfers of financial instruments: 199 ( 292 ) ( 848 ) 496 649 ( 204 ) — — –  transfers from stage 1 to stage 2 ( 7,855 ) 102 7,855 ( 102 ) — — — — –  transfers from stage 2 to stage 1 8,124 ( 391 ) ( 8,124 ) 391 — — — — –  transfers to stage 3 ( 82 ) 1 ( 621 ) 227 703 ( 228 ) — — –  transfers from stage 3 12 ( 4 ) 42 ( 20 ) ( 54 ) 24 — — Net remeasurement of ECL arising from transfer of stage — 185 — ( 301 ) — ( 5 ) — ( 121 ) Net new and further lending/repayments 13,206 27 621 169 12 ( 41 ) 13,839 155 Change to risk parameters – credit quality — 82 — ( 281 ) — ( 301 ) — ( 500 ) Changes to models used for ECL calculation — ( 9 ) — 15 — 1 — 7 Assets written off — — — — ( 571 ) 571 ( 571 ) 571 Foreign exchange and others ( 632 ) ( 2 ) 27 ( 19 ) 7 ( 5 ) ( 598 ) ( 26 ) At 31 Dec 2023 153,292 ( 253 ) 6,547 ( 698 ) 450 ( 144 ) 160,289 ( 1,095 ) ECL income statement change for the period 285 ( 398 ) ( 346 ) ( 459 ) Recoveries 108 Others ( 200 ) Total ECL income statement change for the period ( 551 ) HSBC Holdings plc Annual Report on Form 20-F 221 Other personal lending – reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to customers including loan commitments and financial guarantees Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2024 156,767 ( 240 ) 5,895 ( 534 ) 1,152 ( 448 ) 163,814 ( 1,222 ) Transfers of financial instruments: 742 ( 360 ) ( 1,570 ) 528 828 ( 168 ) — — –  transfers from stage 1 to stage 2 ( 5,269 ) 94 5,269 ( 94 ) — — — — –  transfers from stage 2 to stage 1 6,181 ( 434 ) ( 6,181 ) 434 — — — — –  transfers to stage 3 ( 274 ) 1 ( 823 ) 268 1,097 ( 269 ) — — –  transfers from stage 3 104 ( 21 ) 165 ( 80 ) ( 269 ) 101 — — Net remeasurement of ECL arising from transfer of stage — 302 — ( 197 ) — ( 57 ) — 48 Changes due to modifications not derecognised — — — — ( 23 ) — ( 23 ) — Net new and further lending/repayments 6,177 ( 55 ) ( 431 ) 125 ( 272 ) 243 5,474 313 Change to risk parameters – credit quality — 57 — ( 325 ) — ( 640 ) — ( 908 ) Changes to models used for ECL calculation — 15 — ( 16 ) — ( 22 ) — ( 23 ) Assets written off — — — — ( 735 ) 735 ( 735 ) 735 Foreign exchange and others 1,2 ( 8,023 ) 32 ( 385 ) 49 ( 121 ) 40 ( 8,529 ) 121 At 31 Dec 2024 155,663 ( 249 ) 3,509 ( 370 ) 829 ( 317 ) 160,001 ( 936 ) ECL income statement change for the period 319 ( 413 ) ( 476 ) ( 570 ) Recoveries 107 Others ( 21 ) Total ECL income statement change for the period ( 484 ) 1 Total includes $ 0.3 b n of gross carrying loans and advances, which were classified to assets held for sale, and a corresponding allowance for ECL of $ 10 m, reflecting business disposals, as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . 2 Total includes $ 4.4 bn of nominal amount related to derecognition of loan commitments and financial guarantees following the sale of our banking business in Canada during 2024. Non-credit impaired Credit impaired Stage 1 Stage 2 Stage 3 Total Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL Gross carrying/ nominal amount Allowance for ECL $m $m $m $m $m $m $m $m At 1 Jan 2023 145,136 ( 269 ) 5,768 ( 497 ) 1,556 ( 375 ) 152,460 ( 1,141 ) Transfers of financial instruments: ( 1,161 ) ( 218 ) 466 453 695 ( 235 ) — — –  transfers from stage 1 to stage 2 ( 8,155 ) 140 8,155 ( 140 ) — — — — –  transfers from stage 2 to stage 1 7,019 ( 354 ) ( 7,019 ) 354 — — — — –  transfers to stage 3 ( 106 ) 1 ( 766 ) 287 872 ( 288 ) — — –  transfers from stage 3 81 ( 5 ) 96 ( 48 ) ( 177 ) 53 — — Net remeasurement of ECL arising from transfer of stage — 306 — ( 299 ) — ( 7 ) — — Net new and further lending/repayments 5,758 ( 71 ) ( 1,395 ) 159 ( 430 ) ( 137 ) 3,933 ( 49 ) Change to risk parameters – credit quality — 6 — ( 293 ) — ( 385 ) — ( 672 ) Changes to models used for ECL calculation — ( 2 ) — ( 22 ) — 6 — ( 18 ) Assets written off — — — — ( 702 ) 702 ( 702 ) 702 Foreign exchange and others 1 7,034 8 1,056 ( 35 ) 33 ( 17 ) 8,123 ( 44 ) At 31 Dec 2023 156,767 ( 240 ) 5,895 ( 534 ) 1,152 ( 448 ) 163,814 ( 1,222 ) ECL income statement change for the period 239 ( 455 ) ( 523 ) ( 739 ) Recoveries 108 Others 195 Total ECL income statement change for the period ( 436 ) 1 Total includes $ 7.2 b n of gross carrying loans and advances and a corresponding allowance for ECL of $ 10 m , due to the retention of certain balances previously classified as assets held for sale of our retail banking operations in France. For further details, see Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 433 . 222 HSBC Holdings plc Annual Report on Form 20-F Risk review Personal lending – credit risk profile by internal PD band for loans and advances to customers at amortised cost Gross carrying amount Allowance for ECL PD range 1 2 Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total ECL coverage % $m $m $m $m $m $m $m $m % First lien residential mortgages 324,703 34,177 2,450 361,330 (59) (130) (284) (473) 0.1 –  Band 1 0.000 to 0.250 234,451 1,820 — 236,271 (15) (4) — (19) — –  Band 2 0.251 to 0.500 64,340 11,816 — 76,156 (10) (9) — (19) — –  Band 3 0.501 to 1.500 22,005 14,631 — 36,636 (16) (25) — (41) 0.1 –  Band 4 1.501 to 5.000 3,668 3,990 — 7,658 (17) (27) — (44) 0.6 –  Band 5 5.001 to 20.000 117 1,178 — 1,295 — (13) — (13) 1.0 –  Band 6 20.001 to 99.999 122 742 — 864 (1) (52) — (53) 6.1 –  Band 7 100.000 — — 2,450 2,450 — — (284) (284) 11.6 Credit cards 21,611 2,991 313 24,915 (268) (660) (199) (1,127) 4.5 –  Band 1 0.000 to 0.250 10,051 1 — 10,052 (26) — — (26) 0.3 –  Band 2 0.251 to 0.500 2,340 4 — 2,344 (15) (1) — (16) 0.7 –  Band 3 0.501 to 1.500 5,113 23 — 5,136 (72) (5) — (77) 1.5 –  Band 4 1.501 to 5.000 3,847 1,013 — 4,860 (123) (103) — (226) 4.7 –  Band 5 5.001 to 20.000 260 1,526 — 1,786 (32) (263) — (295) 16.5 –  Band 6 20.001 to 99.999 — 424 — 424 — (288) — (288) 67.9 –  Band 7 100.000 — — 313 313 — — (199) (199) 63.6 Other personal lending 57,432 2,751 797 60,980 (243) (368) (313) (924) 1.5 –  Band 1 0.000 to 0.250 29,124 19 — 29,143 (30) — — (30) 0.1 –  Band 2 0.251 to 0.500 6,109 242 — 6,351 (9) (1) — (10) 0.2 –  Band 3 0.501 to 1.500 11,702 121 — 11,823 (37) (3) — (40) 0.3 –  Band 4 1.501 to 5.000 9,006 660 — 9,666 (95) (25) — (120) 1.2 –  Band 5 5.001 to 20.000 1,433 1,076 — 2,509 (70) (111) — (181) 7.2 –  Band 6 20.001 to 99.999 58 633 — 691 (2) (228) — (230) 33.3 –  Band 7 100.000 — — 797 797 — — (313) (313) 39.3 At 31 Dec 2024 403,746 39,919 3,560 447,225 (570) (1,158) (796) (2,524) 0.6 First lien residential mortgages 320,410 38,287 2,212 360,909 (102) (200) (269) (571) 0.2 –  Band 1 0.000 to 0.250 229,188 3,174 — 232,362 (16) (14) — (30) — –  Band 2 0.251 to 0.500 54,891 12,266 — 67,157 (11) (17) — (28) — –  Band 3 0.501 to 1.500 28,159 16,140 — 44,299 (22) (49) — (71) 0.2 –  Band 4 1.501 to 5.000 7,451 4,559 — 12,010 (52) (30) — (82) 0.7 –  Band 5 5.001 to 20.000 599 1,097 — 1,696 — (11) — (11) 0.6 –  Band 6 20.001 to 99.999 122 1,051 — 1,173 (1) (79) — (80) 6.8 –  Band 7 100.000 — — 2,212 2,212 — — (269) (269) 12.2 Credit cards 19,909 4,419 352 24,680 (236) (697) (203) (1,136) 4.6 –  Band 1 0.000 to 0.250 9,490 1 — 9,491 (32) — — (32) 0.3 –  Band 2 0.251 to 0.500 2,481 6 — 2,487 (21) (1) — (22) 0.9 –  Band 3 0.501 to 1.500 4,799 294 — 5,093 (56) (17) — (73) 1.4 –  Band 4 1.501 to 5.000 2,787 2,291 — 5,078 (93) (158) — (251) 4.9 –  Band 5 5.001 to 20.000 352 1,374 — 1,726 (34) (258) — (292) 16.9 –  Band 6 20.001 to 99.999 — 453 — 453 — (263) — (263) 58.1 –  Band 7 100 — — 352 352 — — (203) (203) 57.7 Other personal lending 56,215 4,777 941 61,933 (241) (537) (382) (1,160) 1.9 –  Band 1 0.000 to 0.250 28,115 30 — 28,145 (34) (1) — (35) 0.1 –  Band 2 0.251 to 0.500 6,634 286 — 6,920 (11) (1) — (12) 0.2 –  Band 3 0.501 to 1.500 12,935 329 — 13,264 (61) (9) — (70) 0.5 –  Band 4 1.501 to 5.000 7,215 1,447 — 8,662 (79) (46) — (125) 1.4 –  Band 5 5.001 to 20.000 1,137 2,005 — 3,142 (55) (199) — (254) 8.1 –  Band 6 20.001 to 99.999 179 680 — 859 (1) (281) — (282) 32.8 –  Band 7 100.000 — — 941 941 — — (382) (382) 40.6 At 31 Dec 2023 396,534 47,483 3,505 447,522 (579) (1,434) (854) (2,867) 0.6 1 12-month point in time adjusted for multiple economic scenarios. 2 PD bands do not consider the impact of any management judgemental adjustments on stage or allowances for ECL including the impact of new models not yet formally implemented. For a list of management judgemental adjustments see page 185 . HSBC Holdings plc Annual Report on Form 20-F 223 Personal lending – credit risk profile by internal PD band for loan and other credit-related commitments and financial guarantees Nominal amount Allowance for ECL PD range 1 Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total ECL coverage % $m $m $m $m $m $m $m $m % Loan and other credit- related commitments 251,489 1,680 86 253,255 (17) — (5) (22) — –  Band 1 0.000 to 0.250 199,314 65 — 199,379 (9) — — (9) — –  Band 2 0.251 to 0.500 14,409 178 — 14,587 (2) — — (2) — –  Band 3 0.501 to 1.500 28,081 389 — 28,470 (1) — — (1) — –  Band 4 1.501 to 5.000 8,431 463 — 8,894 (3) — — (3) — –  Band 5 5.001 to 20.000 800 484 — 1,284 (2) — — (2) 0.2 –  Band 6 20.001 to 99.999 454 101 — 555 — — — — — –  Band 7 100.000 — — 86 86 — — (5) (5) 5.8 Financial guarantees 1,416 11 — 1,427 — — — — — –  Band 1 0.000 to 0.250 743 — — 743 — — — — — –  Band 2 0.251 to 0.500 389 — — 389 — — — — — –  Band 3 0.501 to 1.500 55 — — 55 — — — — — –  Band 4 1.501 to 5.000 220 — — 220 — — — — — –  Band 5 5.001 to 20.000 3 11 — 14 — — — — — –  Band 6 20.001 to 99.999 6 — — 6 — — — — — –  Band 7 100.000 — — — — — — — — — At 31 Dec 2024 252,905 1,691 86 254,682 (17) — (5) (22) — Loan and other credit- related commitments 253,183 3,459 355 256,997 (23) — (2) (25) — –  Band 1 0.000 to 0.250 196,201 114 — 196,315 (15) — — (15) — –  Band 2 0.251 to 0.500 17,861 63 — 17,924 (1) — — (1) — –  Band 3 0.501 to 1.500 29,623 1,262 — 30,885 (1) — — (1) — –  Band 4 1.501 to 5.000 8,550 1,334 — 9,884 (4) — — (4) — –  Band 5 5.001 to 20.000 508 564 — 1,072 (2) — — (2) 0.2 –  Band 6 20.001 to 99.999 440 122 — 562 — — — — — –  Band 7 100.000 — — 355 355 — — (2) (2) 0.6 Financial guarantees 1,106 13 — 1,119 — — — — — –  Band 1 0.000 to 0.250 348 — — 348 — — — — — –  Band 2 0.251 to 0.500 386 — — 386 — — — — — –  Band 3 0.501 to 1.500 359 1 — 360 — — — — — –  Band 4 1.501 to 5.000 3 — — 3 — — — — — –  Band 5 5.001 to 20.000 2 12 — 14 — — — — — –  Band 6 20.001 to 99.999 8 — — 8 — — — — — –  Band 7 100.000 — — — — — — — — — At 31 Dec 2023 254,289 3,472 355 258,116 (23) — (2) (25) — 1 12-month point in time adjusted for multiple economic scenarios. 224 HSBC Holdings plc Annual Report on Form 20-F Risk review Collateral on loans and advances (Audited) The following table provides a quantification of the value of fixed charges we hold over specific assets where we have a history of enforcing, and are able to enforce, collateral in satisfying a debt in the event of the borrower failing to meet its contractual obligations, and where the collateral is cash or can be realised by sale in an established market. The collateral valuation excludes any adjustments for obtaining and selling the collateral and, in particular, loans shown as not collateralised or partially collateralised may also benefit from other forms of credit mitigants. Personal lending – residential mortgage loans including loan commitments by level of collateral for key countries/territories by stage (Audited) Gross carrying/nominal amount ECL coverage Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total $m $m $m $m % % % % Fully collateralised by LTV ratio 332,641 34,203 2,371 369,215 — 0.4 10.0 0.1 –  less than 50% 141,331 18,076 1,238 160,645 — 0.2 7.6 0.1 –  51% to 70% 111,963 11,507 698 124,168 — 0.4 11.2 0.1 –  71% to 80% 39,374 3,040 242 42,656 — 0.7 13.1 0.1 –  81% to 90% 25,514 1,264 131 26,909 — 0.9 15.0 0.1 –  91% to 100% 14,459 316 62 14,837 — 1.8 22.4 0.1 Partially collateralised (A): LTV > 100% 12,031 139 103 12,273 — 3.2 46.2 0.4 –  collateral value on A 11,274 126 70 11,470 Total at 31 Dec 2024 344,672 34,342 2,474 381,488 — 0.4 11.5 0.1 of which: UK Fully collateralised by LTV ratio 151,264 30,574 747 182,585 — 0.2 8.5 0.1 –  less than 50% 62,753 16,689 445 79,887 — 0.1 6.9 0.1 –  51% to 70% 50,374 10,456 206 61,036 — 0.2 9.7 0.1 –  71% to 80% 20,552 2,423 64 23,039 — 0.4 12.1 0.1 –  81% to 90% 15,965 939 23 16,927 — 0.6 13.0 0.1 –  91% to 100% 1,620 67 9 1,696 — 0.7 16.7 0.1 Partially collateralised (B): LTV > 100% 146 15 5 166 — 1.0 27.7 0.9 –  collateral value on B 109 12 4 125 Total UK at 31 Dec 2024 151,410 30,589 752 182,751 — 0.2 8.6 0.1 of which: Hong Kong Fully collateralised 95,751 756 138 96,645 — — 1.3 — –  less than 50% 38,894 372 79 39,345 — — 0.4 — –  51% to 70% 30,088 227 31 30,346 — — 0.4 — –  71% to 80% 6,783 47 11 6,841 — — 5.1 — –  81% to 90% 7,602 42 9 7,653 — 0.2 1.1 — –  91% to 100% 12,384 68 8 12,460 — 0.1 8.8 — Partially collateralised (C): LTV > 100% 11,744 103 14 11,861 — 0.2 19.1 — –  collateral value on C 11,034 96 12 11,142 Total Hong Kong at 31 Dec 2024 107,495 859 152 108,506 — 0.1 2.9 — Fully collateralised by LTV ratio 331,279 38,378 2,129 371,786 — 0.5 10.1 0.1 –  less than 50% 140,992 19,715 1,165 161,872 — 0.3 7.1 0.1 –  51% to 70% 113,043 12,636 568 126,247 — 0.6 10.9 0.1 –  71% to 80% 37,866 4,111 229 42,206 — 0.9 15.2 0.2 –  81% to 90% 23,278 1,499 109 24,886 — 1.2 17.3 0.2 –  91% to 100% 16,100 417 58 16,575 — 1.6 28.9 0.2 Partially collateralised (A): LTV > 100% 9,529 136 129 9,794 — 3.4 42.0 0.6 –  collateral value on A 8,968 123 104 9,195 Total at 31 Dec 2023 340,808 38,514 2,258 381,580 — 0.5 11.9 0.1 of which: UK Fully collateralised by LTV ratio 146,739 33,597 759 181,095 — 0.3 9.7 0.1 –  less than 50% 60,403 17,629 458 78,490 — 0.2 7.9 0.1 –  51% to 70% 49,945 11,248 207 61,400 — 0.4 9.4 0.1 –  71% to 80% 20,293 3,275 61 23,629 — 0.6 13.4 0.1 –  81% to 90% 12,946 1,161 18 14,125 — 0.8 17.5 0.1 –  91% to 100% 3,152 284 15 3,451 — 1.0 41.6 0.3 Partially collateralised (B): LTV > 100% 317 19 27 363 0.1 1.7 17.5 1.4 –  collateral value on B 244 15 22 281 Total UK at 31 Dec 2023 147,056 33,616 786 181,458 — 0.3 9.9 0.1 of which: Hong Kong Fully collateralised by LTV ratio 97,414 1,354 93 98,861 — — 0.3 — –  less than 50% 41,903 831 66 42,800 — — 0.1 — –  51% to 70% 29,762 330 15 30,107 — — 0.5 — –  71% to 80% 5,260 48 2 5,310 — 0.1 0.4 — –  81% to 90% 8,161 61 4 8,226 — 0.1 1.9 — –  91% to 100% 12,328 84 6 12,418 — 0.3 1.8 — Partially collateralised (C): LTV > 100% 8,973 86 4 9,063 — 0.9 7.8 — –  collateral value on C 8,535 81 4 8,620 Total Hong Kong at 31 Dec 2023 106,387 1,440 97 107,924 — 0.1 0.7 — HSBC Holdings plc Annual Report on Form 20-F 225 Supplementary information Wholesale lending – loans and advances to customers at amortised cost by country/territory Gross carrying amount Allowance for ECL Corporate and commercial of which: real estate and construction 1 Non-bank financial institutions Total Corporate and commercial of which: real estate and construction 1 Non-bank financial institutions Total $m $m $m $m $m $m $m $m UK 102,245 17,540 21,771 124,016 (1,412) (289) (234) (1,646) – of which: HSBC UK Bank plc (ring-fenced bank) 79,833 16,722 10,268 90,101 (1,146) (260) (54) (1,200) – of which: HSBC Bank plc (non-ring-fenced bank) 22,412 818 11,503 33,915 (266) (29) (180) (446) –  of which: Other trading entities — — — — — — — — France 25,950 3,986 7,222 33,172 (257) (42) (9) (266) Germany 6,256 264 421 6,677 (153) — — (153) Hong Kong 118,332 42,042 17,846 136,178 (2,922) (1,494) (112) (3,034) Australia 12,532 4,509 2,931 15,463 (30) (3) — (30) India 12,540 2,581 6,425 18,965 (45) (5) (6) (51) Indonesia 3,132 184 356 3,488 (109) (44) — (109) Mainland China 29,930 5,326 8,044 37,974 (222) (117) (6) (228) Malaysia 5,773 1,067 278 6,051 (40) (10) — (40) Singapore 17,267 3,266 1,830 19,097 (234) (80) (1) (235) Taiwan 3,848 60 — 3,848 — — — — Egypt 777 32 51 828 (115) (20) — (115) UAE 13,278 1,809 1,589 14,867 (408) (258) — (408) US 24,084 4,028 10,348 34,432 (246) (106) (47) (293) Mexico 10,318 525 1,407 11,725 (201) (9) (11) (212) Other 24,422 2,844 1,945 26,367 (361) (121) (10) (371) At 31 Dec 2024 410,684 90,063 82,464 493,148 (6,755) (2,598) (436) (7,191) UK 105,536 17,852 18,343 123,879 (1,451) (246) (231) (1,682) – of which: HSBC UK Bank plc (ring-fenced bank) 80,248 17,060 9,372 89,620 (1,212) (212) (66) (1,278) – of which: HSBC Bank plc (non-ring-fenced bank) 24,791 792 8,971 33,762 (240) (34) (165) (405) –  of which: Other trading entities 497 — — 497 1 — — 1 France 27,017 4,796 5,701 32,718 (636) (53) (18) (654) Germany 6,667 240 632 7,299 (74) — — (74) Hong Kong 125,340 48,594 19,319 144,659 (3,099) (2,147) (57) (3,156) Australia 12,685 4,443 1,564 14,249 (49) (1) — (49) India 10,856 2,083 5,315 16,171 (47) (7) (4) (51) Indonesia 3,100 162 411 3,511 (136) (58) — (136) Mainland China 28,655 6,709 7,775 36,430 (313) (212) (11) (324) Malaysia 5,797 1,137 258 6,055 (69) (15) — (69) Singapore 15,845 3,458 948 16,793 (321) (40) (1) (322) Taiwan 4,512 30 81 4,593 — — — — Egypt 899 45 86 985 (128) (10) (1) (129) UAE 13,740 1,979 823 14,563 (543) (296) — (543) US 26,993 5,143 9,155 36,148 (239) (101) (58) (297) Mexico 11,326 865 1,349 12,675 (320) (19) (5) (325) Other 28,687 3,919 2,672 31,359 (378) (81) (18) (396) At 31 Dec 2023 427,655 101,455 74,432 502,087 (7,803) (3,286) (404) (8,207) 1 Real estate lending within this disclosure corresponds solely to the industry of the borrower. Commercial real estate on page 207 includes borrowers in multiple industries investing in income-producing assets and, to a lesser extent, their construction and development. 226 HSBC Holdings plc Annual Report on Form 20-F Risk review Personal lending – loans and advances to customers at amortised cost by country/territory Gross carrying amount Allowance for ECL First lien residential mortgages Other personal of which: credit cards Total First lien residential mortgages Other personal of which: credit cards Total $m $m $m $m $m $m $m $m UK 170,809 21,426 8,016 192,235 (139) (540) (284) (679) – of which: HSBC UK Bank plc (ring-fenced bank) 166,709 18,029 7,933 184,738 (132) (534) (283) (666) –  of which: HSBC Bank plc (non-ring-fenced bank) 4,100 3,397 83 7,497 (7) (6) (1) (13) – of which: Other trading entities — — — — — — — — France 1 377 6,601 1 6,978 (12) (12) — (24) Germany — — — — — — — — Hong Kong 107,759 31,676 10,165 139,435 (5) (421) (291) (426) Australia 22,154 407 372 22,561 (7) (9) (8) (16) India 1,984 865 265 2,849 (3) (18) (14) (21) Indonesia 46 323 142 369 (3) (11) (6) (14) Mainland China 6,087 771 227 6,858 (12) (42) (33) (54) Malaysia 3,252 1,198 938 4,450 (23) (62) (36) (85) Singapore 5,802 6,653 571 12,455 — (56) (28) (56) Taiwan 5,788 1,424 340 7,212 — (15) (4) (15) Egypt — 321 89 321 — (1) — (1) UAE 2,082 1,338 543 3,420 (3) (55) (31) (58) US 21,021 653 195 21,674 (12) (16) (14) (28) Mexico 7,488 5,320 2,242 12,808 (167) (719) (339) (886) Other 6,681 6,919 809 13,600 (87) (74) (39) (161) At 31 Dec 2024 361,330 85,895 24,915 447,225 (473) (2,051) (1,127) (2,524) UK 168,469 19,503 8,056 187,972 (209) (697) (339) (906) –  of which: HSBC UK Bank plc (ring-fenced bank) 164,878 17,884 7,975 182,762 (205) (692) (336) (897) –  of which: HSBC Bank plc (non-ring-fenced bank) 3,226 141 81 3,367 (3) (5) (2) (8) –  of which: Other trading entities 365 1,478 — 1,843 (1) — (1) (1) France 1 436 7,476 1 7,912 (13) (8) — (21) Germany — 165 — 165 — — — — Hong Kong 107,182 31,248 9,663 138,430 (2) (417) (286) (419) Australia 23,001 446 396 23,447 (5) (19) (18) (24) India 1,537 680 185 2,217 (4) (16) (12) (20) Indonesia 58 288 137 346 (2) (11) (7) (13) Mainland China 7,503 754 287 8,257 (3) (49) (39) (52) Malaysia 2,313 2,115 882 4,428 (23) (87) (36) (110) Singapore 8,151 5,589 521 13,740 — (38) (17) (38) Taiwan 5,607 1,370 309 6,977 — (17) (4) (17) Egypt — 341 89 341 — (1) (1) (1) UAE 1,957 1,325 440 3,282 (10) (62) (24) (72) US 18,340 673 199 19,013 (15) (19) (14) (34) Mexico 8,778 6,215 2,465 14,993 (176) (757) (297) (933) Other 7,577 8,425 1,050 16,002 (109) (98) (42) (207) At 31 Dec 2023 360,909 86,613 24,680 447,522 (571) (2,296) (1,136) (2,867) 1 Included in other personal lending at 31 December 2024 is $6,562m (31 December 2023: $7,424m) guaranteed by Crédit Logement. HSBC Holdings plc Annual Report on Form 20-F 227 Summary of financial instruments to which the impairment requirements in IFRS 9 are applied – by global business Gross carrying/nominal amount Allowance for ECL Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total $m $m $m $m $m $m $m $m $m $m WPB 1 569,548 39,984 3,717 — 613,249 (596) (1,166) (811) — (2,573) CMB 436,536 44,223 16,912 48 497,719 (446) (1,020) (4,713) (29) (6,208) GBM 674,730 10,676 2,116 42 687,564 (106) (331) (524) (22) (983) Corporate Centre 1 72,079 369 25 — 72,473 (3) (36) (17) — (56) Total gross carrying amount on-balance sheet at 31 Dec 2024 1,752,893 95,252 22,770 90 1,871,005 (1,151) (2,553) (6,065) (51) (9,820) WPB 252,695 1,674 84 — 254,453 (17) — (9) — (26) CMB 132,703 13,879 896 — 147,478 (97) (92) (86) — (275) GBM 226,995 7,019 226 3 234,243 (31) (34) (11) — (76) Corporate Centre 191 — — — 191 — — — — — Total nominal amount off-balance sheet at 31 Dec 2024 612,584 22,572 1,206 3 636,365 (145) (126) (106) — (377) WPB 142,388 339 — — 142,727 (14) (2) — — (16) CMB 103,406 323 — — 103,729 (7) (2) — — (9) GBM 97,422 149 — — 97,571 (9) — — — (9) Corporate Centre 2,028 69 — — 2,097 (1) (19) — — (20) Debt instruments measured at FVOCI at 31 Dec 2024 345,244 880 — — 346,124 (31) (23) — — (54) WPB 630,661 54,069 4,233 — 688,963 (621) (1,551) (977) — (3,149) CMB 464,893 66,688 12,698 49 544,328 (508) (1,336) (4,995) (23) (6,862) GBM 696,377 14,247 3,002 32 713,658 (119) (199) (1,161) (7) (1,486) Corporate Centre 75,805 37 6 — 75,848 (1) (13) — — (14) Total gross carrying amount on-balance sheet at 31 Dec 2023 1,867,736 135,041 19,939 81 2,022,797 (1,249) (3,099) (7,133) (30) (11,511) WPB 253,333 3,811 333 — 257,477 (22) — (2) — (24) CMB 142,206 16,238 877 — 159,321 (100) (101) (102) — (303) GBM 250,007 10,752 314 4 261,077 (38) (34) (7) — (79) Corporate Centre 149 — — — 149 — — — — — Total nominal amount off-balance sheet at 31 Dec 2023 645,695 30,801 1,524 4 678,024 (160) (135) (111) — (406) WPB 124,747 406 — — 125,153 (14) (17) — — (31) CMB 86,021 405 — — 86,426 (9) (18) — — (27) GBM 88,229 173 1 — 88,403 (13) (6) (1) — (20) Corporate Centre 2,201 165 — — 2,366 (1) (18) — — (19) Debt instruments measured at FVOCI at 31 Dec 2023 301,198 1,149 1 — 302,348 (37) (59) (1) — (97) 1 With effect from 1 January 2024, following the sale of our retail banking business in France, we have prospectively reclassified the $ 7.4 bn portfolio of retained loans from WPB to Corporate Centre. 228 HSBC Holdings plc Annual Report on Form 20-F Risk review Loans and advances to customers and banks – other supplementary information Gross carrying amount of which: stage 3 and POCI Allowance for ECL of which: stage 3 and POCI Change in ECL Write-offs Recoveries $m $m $m $m $m $m $m First lien residential mortgages 361,330 2,450 (473) (284) 33 (63) 7 –  second lien residential mortgages 395 19 (2) (2) 6 — 1 –  guaranteed loans in respect of residential property 6,698 20 (9) (5) 3 (7) — –  other personal lending which is secured 31,180 138 (31) (15) 5 (3) — –  credit cards 24,915 313 (1,127) (199) (804) (736) 106 –  other personal lending which is unsecured 20,660 598 (838) (279) (484) (699) 103 –  motor vehicle finance 2,047 22 (44) (12) (38) (26) 3 Other personal lending 85,895 1,110 (2,051) (512) (1,312) (1,471) 213 Personal lending 447,225 3,560 (2,524) (796) (1,279) (1,534) 220 –  agriculture, forestry and fishing 7,033 282 (94) (46) 4 (10) 1 –  mining and quarrying 7,592 318 (45) (32) 29 (26) — –  manufacturing 82,724 1,487 (893) (638) (170) (403) 3 –  electricity, gas, steam and air-conditioning supply 16,457 209 (122) (85) — — — –  water supply, sewerage, waste management and remediation 2,961 43 (24) (16) 2 (40) — –  real estate and construction 90,063 8,949 (2,598) (1,842) (812) (1,554) 12 –  wholesale and retail trade, repair of motor vehicles and motorcycles 77,830 2,728 (1,372) (1,188) (369) (337) 8 –  transportation and storage 22,643 417 (321) (232) (104) (20) 1 –  accommodation and food 14,734 1,610 (299) (214) (81) (27) — –  publishing, audiovisual and broadcasting 19,826 229 (158) (61) (79) (75) 2 –  professional, scientific and technical activities 26,128 648 (266) (188) (132) (174) 1 –  administrative and support services 20,117 739 (320) (254) (39) (88) 1 –  public administration and defence, compulsory social security 64 — — — — — — –  education 1,596 43 (27) (16) (16) (3) — –  health and care 4,030 184 (51) (25) (3) (12) 1 –  arts, entertainment and recreation 2,066 78 (35) (26) (19) (22) — –  other services 7,288 327 (110) (66) (82) (115) 10 –  activities of households 589 — — — — — — –  extra-territorial organisations and bodies activities 118 — — — — — — –  government 6,793 175 (7) (5) 6 — — –  asset-backed securities 32 — (13) — 1 — — Corporate and commercial 410,684 18,466 (6,755) (4,934) (1,864) (2,906) 40 Non-bank financial institutions 82,464 679 (436) (361) (59) (19) — Wholesale lending 493,148 19,145 (7,191) (5,295) (1,923) (2,925) 40 Loans and advances to customers 940,373 22,705 (9,715) (6,091) (3,202) (4,459) 260 Loans and advances to banks 102,052 2 (13) (2) (1) — — At 31 Dec 2024 1,042,425 22,707 (9,728) (6,093) (3,203) (4,459) 260 HSBC Holdings plc Annual Report on Form 20-F 229 Loans and advances to customers and banks – other supplementary information (continued) Gross carrying amount of which: stage 3 and POCI Allowance for ECL of which: stage 3 and POCI Change in ECL Write-offs Recoveries $m $m $m $m $m $m $m First lien residential mortgages 360,909 2,212 (571) (269) (10) (53) 10 –  second lien residential mortgages 396 21 (8) (5) (1) (1) 2 –  guaranteed loans in respect of residential property 8,593 90 (20) (14) 2 (8) 2 –  other personal lending which is secured 29,481 157 (42) (24) 8 (2) 2 –  credit cards 24,680 352 (1,136) (203) (577) (571) 108 –  other personal lending which is unsecured 21,251 659 (1,048) (331) (380) (663) 99 –  motor vehicle finance 2,212 14 (42) (8) (61) (28) 3 Other personal lending 86,613 1,293 (2,296) (585) (1,009) (1,273) 216 Personal lending 447,522 3,505 (2,867) (854) (1,019) (1,326) 226 –  agriculture, forestry and fishing 7,181 312 (130) (64) (21) (9) — –  mining and quarrying 7,223 325 (101) (83) 27 (49) — –  manufacturing 85,333 1,899 (1,143) (860) (355) (273) 11 –  electricity, gas, steam and air-conditioning supply 14,355 255 (119) (88) (26) (10) — –  water supply, sewerage, waste management and remediation 3,262 102 (63) (51) (44) (2) — –  real estate and construction 101,455 5,883 (3,286) (2,561) (1,358) (1,191) 6 –  wholesale and retail trade, repair of motor vehicles and motorcycles 79,121 2,362 (1,341) (1,134) (124) (447) 12 –  transportation and storage 21,456 445 (230) (160) (87) (42) — –  accommodation and food 15,874 1,058 (257) (112) (33) (26) — –  publishing, audiovisual and broadcasting 19,731 210 (173) (50) (106) (73) — –  professional, scientific and technical activities 26,753 740 (401) (306) (262) (110) 1 –  administrative and support services 22,203 597 (268) (174) 39 (137) — –  public administration and defence, compulsory social security 1,042 — — — — — — –  education 1,460 46 (15) (4) (1) (22) — –  health and care 4,236 183 (56) (26) 40 (7) — –  arts, entertainment and recreation 1,961 99 (42) (31) 15 (8) — –  other services 8,355 318 (153) (90) 22 (181) 12 –  activities of households 694 — — — — — — –  extra-territorial organisations and bodies activities 101 — — — — — — –  government 5,827 205 (12) (10) (15) — — –  asset-backed securities 32 — (13) — — — — Corporate and commercial 427,655 15,039 (7,803) (5,804) (2,289) (2,587) 42 Non-bank financial institutions 74,432 810 (404) (322) (168) (9) — Wholesale lending 502,087 15,849 (8,207) (6,126) (2,457) (2,596) 42 Loans and advances to customers 949,609 19,354 (11,074) (6,980) (3,476) (3,922) 268 Loans and advances to banks 112,917 2 (15) (2) 53 — — At 31 Dec 2023 1,062,526 19,356 (11,089) (6,982) (3,423) (3,922) 268 HSBC Holdings (Audited) Credit risk in HSBC Holdings primarily arises from transactions with Group subsidiaries. In HSBC Holdings, the maximum exposure to credit risk arises from two components: – financial assets on the balance sheet, where maximum exposure equals the carrying amount (see page 372 ); and – financial guarantees and other guarantees, where the maximum exposure is the maximum that we would have to pay if the guarantees were called upon (see Note 33 ). In the case of our derivative asset balances (see page 372 ), there is a legally enforceable right of offset in the event of counterparty default and where, as a result, there is a net exposure for credit risk purposes. However, as there is no intention to settle these balances on a net basis under normal circumstances, they do not qualify for net presentation for accounting purposes. These offsets also include collateral received in cash and other financial assets. The total offset relating to our derivative asset balances was $ 3.0 bn at 31 December 2024 (2023: $ 3.0 bn ). The credit quality of loans and advances and financial investments, both of which consist of intra-Group lending and US Treasury bills and bonds, is assessed as ‘strong’, with 100 % of the exposure being neither past due nor impaired (2023: 100 % ). For further details of credit quality classification, see page 170 . 230 HSBC Holdings plc Annual Report on Form 20-F Risk review Treasury risk Contents 230 Overview 230 Treasury risk management 232 Other Group risks 234 Capital risk in 2024 237 Liquidity and funding risk in 2024 241 Structural foreign exchange risk in 2024 242 Interest rate risk in the banking book in 2024 Overview Treasury risk is the risk of having insufficient capital, liquidity or funding resources to meet financial obligations and satisfy regulatory requirements, including the risk of adverse impact on earnings or capital due to structural and transactional foreign exchange exposures, as well as changes in market interest rates, together with pension and insurance risk. Treasury risk arises from changes to the respective resources and risk profiles driven by customer behaviour, management decisions or the external environment. Approach and policy (Audited) Our objective in the management of treasury risk is to maintain appropriate levels of capital, liquidity, funding, foreign exchange and market risk to support our business strategy, and meet our regulatory and stress testing-related requirements. Our approach to treasury management is driven by our strategic and organisational requirements, and considers the regulatory, economic and commercial environment. We aim to maintain a strong capital and liquidity base to support the risks inherent in our business and invest in accordance with our strategy, meeting both consolidated and local regulatory requirements at all times. Our policy is underpinned by our risk management framework. The risk management framework incorporates a number of measures aligned to our assessment of risks for both internal and regulatory purposes. These risks include credit, market, operational, pensions, structural and transactional foreign exchange risk, and interest rate risk in the banking book. For further details, refer to our Pillar 3 Disclosures at 31 December 2024 . Treasury risk management Key developments in 2024 – The Group continues to benefit from a healthy capital, liquidity and funding position. – T he Board approved a fourth interim dividend for full year 2023, paid in April 2024. For the full year 2024, the Board approved three interim dividends, which were paid in June, September and December 2024. A fourth interim dividend has also been announced with these results. We announced a total of $11bn of share buy-backs during 2024. – On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France. – On 28 March 2024, HSBC completed the sale of HSBC Bank Canada to the Royal Bank of Canada. The associated gain on sale of $4.8bn, including the recycling of related reserves, added approximately 0.8 percentage points to our CET1 ratio in 1Q24. The Board approved a special dividend of $0.21 per share, paid in June 2024 alongside the first interim dividend. – On 6 December 2024, HSBC completed the sale of HSBC Argentina to Grupo Financiero Galicia recognising a loss on disposal of $1bn. In addition, $5.2bn of FX and other reserve losses were recycled to the income statement on completion. The sale had an immaterial capital impact. – The Bank continues its delivery efforts against regulatory commitments, including enhancements to regulatory reporting and the implementation of prudential policy changes across the jurisdictions in which we operate. We continue to assess the impact of Basel 3.1, following the PRA announcement to delay the implementation until 1 January 2027, and expect a modest benefit to our CET1 ratio. – We have made significant progress in improving our recovery and resolution capabilities in line with the Group’s preferred resolution strategy and regulatory expectations, including the Bank of England’s (‘BoE’) Resolvability Assessment Framework (‘RAF’). – We further stabilised our banking net interest income through increasing both the size and duration of our structural hedge. For quantitative disclosures on capital ratios, own funds and risk-weighted assets (‘RWAs’), see pages 234 to 235 . For quantitative disclosures on liquidity and funding metrics, see pages 238 to 239 . For quantitative disclosures on interest rate risk in the banking book, see pages 242 to 244 . Governance and structure The Global Head of Traded and Treasury Risk Management and Risk Analytics is the accountable risk steward for all treasury risks. The Group Treasurer is the risk owner for all treasury risks, with the exception of pension risk and insurance risk. The Group Treasurer co- owns pension risk with the Group Head of Performance and Reward. Insurance risk is owned by the Chief Executive Officer for Global Insurance. Capital risk, liquidity risk, interest rate risk in the banking book, structural foreign exchange risk and transactional foreign exchange risk are the responsibility of the Group Operating Committee and the Group Risk Committee (‘GRC’). Global Treasury actively manages these risks on an ongoing basis, supported by the Holdings Asset and Liability Management Committee (‘ALCO’) and local ALCOs, overseen by Treasury Risk Management and Risk Management Meetings. Pension risk is overseen by a network of local and regional pension risk management meetings. The Global Pensions Financial Risk Management Meeting provides oversight of all pension plans sponsored by HSBC globally and is chaired by the accountable risk steward. Insurance risk is overseen by the Global Insurance Risk Management Meeting, chaired by the Chief Risk and Compliance Officer for Global Insurance. Capital, liquidity and funding risk management processes Assessment and risk appetite Our capital management approach is underpinned by a Global Capital Risk policy and supporting frameworks for recovery and resolution planning and stress testing. The policy sets out our approach to determining key capital risk appetites including CET1, total capital, minimum requirements for own funds and eligible liabilities (‘MREL’), the leverage ratio and double leverage. Our internal capital adequacy assessment process (‘ICAAP’) is an assessment of the Group’s capital position, outlining both regulatory and internal capital resources and requirements resulting from HSBC’s business model, strategy, risk profile and management, performance and planning, risks to capital, and the implications of stress testing. Our assessment of capital adequacy is driven by an assessment of risks. These risks include credit, market, operational, pensions, insurance, structural foreign exchange, interest rate risk in the banking book and group risk. Climate risk is also considered as part of the ICAAP, and we are continuing to develop our approach. The Group’s ICAAP supports the HSBC Holdings plc Annual Report on Form 20-F 231 determination of the consolidated capital risk appetite and target ratios, as well as enables the assessment and determination of capital requirements by regulators. Subsidiaries prepare ICAAPs in line with global guidance, while considering their local regulatory regimes to determine their own risk appetites and ratios. HSBC Holdings is the provider of MREL to its subsidiaries, including equity and non-equity capital. These investments are funded by HSBC Holdings’ own equity capital and MREL-eligible debt. MREL includes own funds and liabilities that can be written down or converted into capital resources in order to absorb losses or recapitalise a bank in the event of its failure. In line with our existing structure and business model, HSBC has three resolution groups – the European Resolution Group, the Asian Resolution Group and the US Resolution Group. There are some smaller entities that fall outside these resolution groups. HSBC Holdings seeks to maintain a prudent balance between the composition of its capital and its investments in subsidiaries. As a matter of long-standing policy, the holding company group retains a substantial holdings capital buffer comprising cash and other high-quality liquid assets, which at 31 December 2024 was in excess of $20 bn, our target operating level. We aim to ensure that management has oversight of our liquidity and funding risks at Group and entity level through governance arrangements, in line with our risk management framework. We manage liquidity and funding risk at an operating entity level in accordance with globally consistent policies, procedures and reporting standards. This ensures that obligations can be met in a timely manner, in the jurisdiction where they fall due. Operating entities are required to meet internal minimum requirements and any applicable regulatory requirements at all times. These requirements are assessed through our internal liquidity adequacy assessment process (‘ILAAP’), which ensures that operating entities have strategies, policies, processes and systems for the identification, measurement, management and monitoring of liquidity risk over an appropriate set of time horizons, including intra- day. The ILAAP informs the setting of risk appetite. It also assesses the capability to manage liquidity and funding effectively in each major entity. These metrics are set and managed locally but are subject to global review and challenge to ensure consistency of approach and application of the Group’s policies and controls. Planning and performance Capital and RWA plans form part of the annual financial resource plan that is approved by the Board. Capital and RWA forecasts are submitted to the Group Executive Committee on a monthly basis, and capital and RWAs are monitored and managed against the plan. The responsibility for global capital allocation principles rests with the Group Chief Financial Officer, supported by the Group Capital Management Meeting. This is a specialist forum addressing capital management, reporting into Holdings ALCO. Through our internal governance processes, we seek to strengthen discipline over our investment and capital allocation decisions, and to ensure that returns on investment meet management’s objectives. The Group allocates financial resources to businesses and entities to support the execution of our strategy and to meet their regulatory and economic capital needs. We evaluate and manage business returns by using a return on average tangible equity measure and a related economic profit measure. Funding and liquidity plans also form part of the financial resource plan that is approved by the Board. The Board-level appetite measures are the liquidity coverage ratio (‘LCR’) and net stable funding ratio (‘NSFR’), together with an internal liquidity metric, at entity level. In addition, we use a wider set of measures to manage an appropriate funding and liquidity profile, including legal entity depositor concentration limits, intra-day liquidity, forward-looking funding assessments and other key measures. Risks to capital and liquidity Outside the stress testing framework, other risks may be identified that have the potential to affect our RWAs, capital and/or liquidity position. Downside and upside scenarios are assessed against our management objectives, and mitigating actions are assigned as necessary. We closely monitor future regulatory developments and continue to evaluate the impact of these upon our capital and liquidity requirements, particularly those related to the UK’s implementation of the outstanding measures to be implemented from the Basel III reforms (‘Basel 3.1‘). Regulatory de velopm ents The Prudential Regulation Authority (‘PRA‘) published the second part of its near-final rules on the UK’s implementation of Basel 3.1 on 12 September 2024. On 17 January 2025, the PRA revised the implementation date to 1 January 2027 to allow greater clarity regarding implementation in the United States. The Risk Weighted Asset (‘RWA‘) output floor is now subject to a three-year transitional provision, ensuring that the date for full implementation remains 1 January 2030. We continue to assess the impact of Basel 3.1 standards on our capital, including the recent release of more beneficial PRA near-final rules, developments in the US and associated implementation challenges (including data provision). We expect that the impact on our CET1 ratio at 1 January 2027 will be a modest benefit. Regulatory reporting processes and controls We are advancing a comprehensive initiative aimed at strengthening our global regulatory reporting processes and making them more sustainable. This multifaceted programme includes enhancing data, consistency and controls. This remains a key priority for both HSBC management and regulatory authorities. While this programme continues, there may be further impacts on some of our regulatory ratios, such as the CET1, LCR and NSFR, as we implement recommended changes and continue to enhance our controls across the process. Stress testing and recovery and resolution planning The Group uses stress testing to inform management of the capital and liquidity needed to withstand internal and external shocks, including a global economic downturn or a systems failure. Stress testing results are also used to inform risk mitigation actions, input into global business performance through tangible equity allocation, and recovery and resolution planning, as well as to re-evaluate business plans where analysis shows capital, liquidity and/or returns do not meet their target. In addition to a range of internal stress tests, we are subject to supervisory stress testing in many jurisdictions. These include the exercises of the Bank of England (‘BoE’), the US Federal Reserve Board, the European Banking Authority, the European Central Bank and the Hong Kong Monetary Authority. The results of regulatory stress testing and our internal stress tests are used when assessing our internal capital and liquidity requirements through the ICAAP and ILAAP. The outcomes of stress testing exercises carried out by the PRA and other regulators feed into the setting of regulatory minimum ratios and buffers. We maintain recovery plans for the Group and material entities, which set out potential options management could take in a range of stress scenarios that could result in a breach of capital or liquidity buffers. The Group recovery plan sets out the framework and governance arrangements to support restoring HSBC to a stable and viable position, and so lowering the probability of failure from either idiosyncratic company-specific stress or systemic market-wide issues. Our material entities’ recovery plans provide detailed actions that management would consider taking in a stress scenario should their positions deteriorate and threaten to breach risk appetite and regulatory minimum levels. This is to help ensure that HSBC entities can stabilise their financial position and recover from financial losses in a stress environment. 232 HSBC Holdings plc Annual Report on Form 20-F Risk review The Group has capabilities, resources and arrangements in place to address the unlikely event that HSBC might not be recoverable and would therefore need to be resolved by regulators.  In August 2024, the Group and the Bank of England (‘BoE’) publicly disclosed the status of HSBC’s progress against the BoE’s Resolvability Assessment Framework (‘RAF‘). The BoE acknowledged the significant progress made by HSBC in enhancing its resolvability capabilities. Overall, our recovery and resolution planning helps safeguard the Group’s financial and operational stability. HSBC has a programme of continuous improvement to maintain and enhance its recovery and resolution capabilities, designed to meet the BoE’s expectations and RAF requirements. Measurement of interest rate risk in the banking book processes Assessment and risk appetite Interest rate risk in the banking book (‘IRRBB’) is the risk of an adverse impact to earnings or capital due to changes in market interest rates or changes in expected interest rate repricing of client products that impact banking book positions. It is generated by our non-traded assets and liabilities, specifically loans, deposits and financial instruments that are not held for trading intent or in order to hedge positions held with trading intent. Our global IRRBB risk management framework is designed to ensure that all material sources of IRRBB are identified, measured, managed, and monitored, with policies and frameworks in place. Our IRRBB risks are measured and managed using a combination of earnings-based and economic value measures to ensure that the balance between stabilising earnings and generating value sensitivity is managed appropriately. These metrics measure IRRBB risks across the banking book, to support the overall monitoring against risk appetite, including: – Banking Net Interest Income (‘BNII’) Sensitivity; and – Economic Value of Equity (‘EVE’) Sensitivity. Banking net interest income sensitivity BNII sensitivity captures the risk to earnings generated from the Banking Book from changes in market implied interest rates over a 12-month period using static rolling balance sheet assumptions. The static rolling balance sheet assumptions are in place to ensure that IRRBB management actions are focused on risks which can be managed within Treasury. A notable exception to this is related to the price sensitivity of certain interest bearing non-maturity deposits, where we apply dynamic assumptions to ensure we capture any potential margin widening or compression over the corresponding shock horizon and rate scenario. Economic value of equity sensitivity EVE measures the present value of our banking book assets and liabilities excluding equity, based on a run-off balance sheet. EVE sensitivity measures the impact to EVE from a movement in interest rates, including the assumed term profile of non-maturing deposits having adjusted for stability and price sensitivity. It is measured and reported as part of our internal risk metrics, regulatory rules (including the Supervisory Outlier Test) and Pillar 3 disclosures. Further details of HSBC’s risk management of interest rate risk in the banking book can be found in the Group’s Pillar 3 Disclosures at 31 December 2024 . Other Group risks Non-trading book foreign exchange exposures Structural foreign exchange exposures Structural foreign exchange exposures arise from capital invested or net assets in a foreign operation. A foreign operation is an entity that is a subsidiary, associate, joint venture or branch of a reporting entity the activities of which are based or conducted in a country or currency other than those of the reporting entity. An entity’s functional reporting currency is normally that of the primary economic environment in which the entity operates . Exchange differences on structural exposures are recognised in other comprehensive income. We use the US dollar as our presentation currency in our consolidated financial statements because the US dollar and currencies linked to it form the major currency bloc in which we transact and fund our business. Therefore, our consolidated balance sheet is affected by exchange differences between the US dollar and all the non-US dollar functional currencies of underlying foreign operations. Our structural foreign exchange exposures are managed with the primary objective of ensuring, where practical, that our consolidated capital ratios and the capital ratios of individual banking subsidiaries are largely protected from the effect of changes in exchange rates. We hedge structural foreign exchange positions where it is capital efficient to do so, and subject to approved limits. This is achieved through a combination of net investment hedges and economic hedges. Hedging positions are monitored and rebalanced periodically to manage RWA or downside risks associated with HSBC’s foreign currency investments. For further details of our structural foreign exchange exposures, see page 241 . Transactional foreign exchange exposures Transactional foreign exchange risk arises primarily from day-to-day transactions in the banking book generating profit and loss or fair value through other comprehensive income reserves in a currency other than the reporting currency of the operating entity . Transactional foreign exchange exposure generated through profit and loss is periodically transferred to Markets and Securities Services and managed within limits, with the exception of limited residual foreign exchange exposure arising from timing differences or for other reasons. Transactional foreign exchange exposure generated through other comprehensive income reserves is managed by Global Treasury within approved appetite. HSBC Holdings risk management As a financial services holding company, HSBC Holdings has limited market risk activities. Its activities predominantly involve maintaining sufficient capital resources to support the Group’s diverse activities; allocating these capital resources across the Group’s businesses; earning dividend and interest income on its investments in the businesses; payment of operating expenses; providing dividend payments to its equity shareholders and interest payments to providers of debt capital; and maintaining a supply of short-term liquid assets for deployment under extraordinary circumstances. The main market risks to which HSBC Holdings is exposed are banking book interest rate risk and foreign currency risk. Exposure to these risks arises from short-term cash balances, funding positions held, loans to subsidiaries, investments in long-term financial assets, financial liabilities including debt capital issued, and structural foreign exchange hedges. In addition, the impacts of the American Depository Receipts in Grupo Financiero Galicia received as part of the purchase consideration for HSBC Argentina are recognised by HSBC Holdings. The objective of HSBC Holdings’ market risk management strategy is to manage volatility in capital resources, cash flows and distributable reserves that could be caused by movements in market parameters. Market risk for HSBC Holdings is monitored by Holdings ALCO in accordance with its risk appetite statement. HSBC Holdings plc Annual Report on Form 20-F 233 HSBC Holdings uses interest rate swaps and cross-currency interest rate swaps to manage the interest rate risk and foreign currency risk arising from its long-term debt issues. It also uses forward foreign exchange contracts to manage its structural foreign exchange exposures. For quantitative disclosures on HSBC Holdings’ interest rate risk in the banking book see page 245 . Pension risk management processes Our global pensions strategy is to move from defined benefit to defined contribution plans, where local law allows and it is considered competitive to do so. Our most material defined benefit plans have been closed to new entrants for many years, and the majority (including the largest plan in the UK) are also closed to future accrual. In defined contribution pension plans, the contributions that HSBC is required to make are known, while the ultimate pension benefit will vary, typically with investment returns achieved by investment choices made by the employee. While the market risk to HSBC of defined contribution plans is low, the Group is still exposed to operational and reputational risk. In defined benefit pension plans, the level of pension benefit is known. Therefore, the level of contributions required by HSBC will vary due to a number of risks, including: – investments delivering a return below the level required to provide the projected plan benefits; – the prevailing economic environment leading to corporate failures, thus triggering write-downs in asset values (both equity and debt); – a change in either interest rates or inflation expectations, causing an increase in the value of plan liabilities; and – plan members living longer than expected (known as longevity risk). Pension risk is assessed using an economic capital model that takes into account potential variations in these factors. The impact of these variations on both pension assets and pension liabilities is assessed using a one-in-200-year stress test. Scenario analysis and other stress tests are also used to support pension risk management, including the review of de-risking opportunities. To fund the benefits associated with defined benefit plans, sponsoring Group companies, and in some instances employees, make regular contributions in accordance with advice from actuaries and in consultation with the plan’s fiduciaries where relevant. These contributions are normally set to ensure that there are sufficient funds to meet the cost of the accruing benefits for the future service of active members. However, higher contributions are required when plan assets are considered insufficient to cover the existing pension liabilities. Contribution rates are typically revised annually or once every three years, depending on the plan. The defined benefit plans invest contributions in a range of investments designed to limit the risk of assets failing to meet a plan’s liabilities. Any changes in expected returns from the investments may also change future contribution requirements. In pursuit of these long-term objectives, an overall target allocation is established between asset classes of the defined benefit plan. In addition, each permitted asset class has its own benchmarks, such as stock-market or property valuation indices or liability characteristics. The benchmarks are reviewed at least once every three to five years and more frequently if required by local legislation or circumstances. The process generally involves an extensive asset and liability review. In addition, some of the Group’s pension plans hold longevity swap contracts. These arrangements provide long-term protection to the relevant plans against costs resulting from pensioners or their dependants living longer than initially expected. The most sizeable plan to do this is the HSBC Bank (UK) Pension Scheme, which holds longevity swaps covering approximately 50 % of the plan’s pensioner liabilities. 234 HSBC Holdings plc Annual Report on Form 20-F Risk review Capital risk in 2024 Capital overview Capital and liquidity adequacy metrics At 31 Dec 2024 31 Dec 2023 Risk-weighted assets (‘RWAs’) ($bn) Credit risk 657.9 683.9 Counterparty credit risk 37.7 35.5 Market risk 36.2 37.5 Operational risk 106.5 97.2 Total RWAs 838.3 854.1 Capital on a transitional basis ($bn) Common equity tier 1 capital 124.9 126.5 Tier 1 capital 144.1 144.2 Total capital 172.4 171.2 Capital ratios on a transitional basis (%) Common equity tier 1 ratio 14.9 14.8 Tier 1 ratio 17.2 16.9 Total capital ratio 20.6 20.0 Capital on an end point basis ($bn) Common equity tier 1 (‘CET1’) capital 124.9 126.5 Tier 1 capital 144.1 144.2 Total capital 168.5 167.1 Capital ratios on an end point basis (%) Common equity tier 1 ratio 14.9 14.8 Tier 1 ratio 17.2 16.9 Total capital ratio 20.1 19.6 Liquidity coverage ratio (‘LCR’) Total high-quality liquid assets ($bn) 649.2 647.5 Total net cash outflow ($bn) 470.7 477.1 LCR (%) 1 138 136 Net stable funding ratio (‘NSFR’) 1,2 Total available stable funding ($bn) 1,523.4 1,601.9 Total required stable funding ($bn) 1,064.5 1,162.3 NSFR (%) 143 138 1 We enhanced our liquidity consolidation process in 2Q24 by revising provisions that addressed historical limitations. As our Group LCR and NSFR are reported on an average basis, the benefit of these changes incrementally increased our LCR and NSFR by circa 3% and 11% during the year, respectively. Compared to year ended 31 December 2023, the increase in LCR was mainly driven by these enhancements. The associated NSFR increase driven by these changes was partly offset by higher required stable funding primarily due to a rise in financial investments and derivatives activities. 2 We enhanced our calculation process during 1Q24 and our NSFR comparatives have been restated. References to EU regulations and directives (including technical standards) should, as applicable, be read as references to the UK’s version of such regulation or directive, as onshored into UK law under the European Union (Withdrawal) Act 2018, and as may be subsequently amended under UK law. Capital figures and ratios in the previous table are calculated in accordance with the regulatory requirements of the Capital Requirements Regulation and Directive, the CRR II regulation and the Prudential Regulation Authority (‘PRA’) Rulebook (‘CRR II’). The table presents them under the transitional arrangements in CRR II for capital instruments and after their expiry, known as the end point. Regulatory numbers and ratios are presented as at the date of reporting. Small changes may exist between these numbers and ratios and those submitted in regulatory filings. Where differences are significant, we may restate in subsequent periods. HSBC Holdings plc Annual Report on Form 20-F 235 Own funds disclosure (Audited) At 31 Dec 2024 31 Dec 2023 Ref* $m $m Common equity tier 1 capital: instruments and reserves 1 Capital instruments and the related share premium accounts 22,378 22,964 –  ordinary shares 22,378 22,964 2 Retained earnings 1 138,959 135,614 3 Accumulated other comprehensive income (and other reserves) 1 ( 8,410 ) ( 7,195 ) 5 Minority interests (amount allowed in consolidated CET1) 3,960 3,917 5a Independently reviewed net profits net of any foreseeable charge or dividend 7,184 10,568 6 Common equity tier 1 capital before regulatory adjustments 164,071 165,868 28 Total regulatory adjustments to common equity tier 1 ( 39,160 ) ( 39,367 ) 29 Common equity tier 1 capital 124,911 126,501 36 Additional tier 1 capital before regulatory adjustments 19,286 17,732 43 Total regulatory adjustments to additional tier 1 capital ( 70 ) ( 70 ) 44 Additional tier 1 capital 19,216 17,662 45 Tier 1 capital 144,127 144,163 51 Tier 2 capital before regulatory adjustments 29,334 28,148 57 Total regulatory adjustments to tier 2 capital ( 1,075 ) ( 1,107 ) 58 Tier 2 capital 28,259 27,041 59 Total capital 172,386 171,204 * The references identify lines prescribed in the PRA template, which are applicable and where there is a value. 1 We have updated the classification between components of shareholders’ equity to present ‘Retained Earnings’ in Row 2 and ‘Accumulated other comprehensive income (and other reserves)’ in Row 3. The comparatives have been aligned. The CET1 capital ratio increased marginally from 14.8 % at 31 December 2023 to 14.9 % at 31 December 2024, reflecting a decrease in RWAs of $ 15.8 bn, partly offset by a decrease in CET1 capital of $1.6bn. The key drivers of the overall rise in our CET1 ratio during the year were: – a 0.9 percentage point increase, excluding foreign exchange fluctuations, was primarily driven by a reduction in RWAs through strategic transactions, and the gain on disposal of our Canadian banking business adjusted for the $0.21 per share special dividend; – a 0.9 percentage point reduction excluding foreign exchange fluctuations, owing to higher RWAs mainly driven by organic balance sheet growth and credit migrations excluding strategic transactions; – a 0.4 percentage point increase from capital generation, mainly through regulatory profits and other reserves less dividends and share buy-backs; and – a 0.3 percentage point decrease from the adverse impact of regulatory deductions and foreign exchange fluctuations on our RWAs and capital. Our Pillar 2A requirement at 31 December 2024 , as per the PRA’s Individual Capital Requirement based on a point-in-time assessment, was equivalent to 2.6% of RWAs, of which 1.5% was required to be met by CET1. Throughout 2024 we complied with the PRA’s regulatory capital adequacy requirements. Risk-weighted assets RWAs by global business WPB CMB GBM Corporate Centre Total RWAs $bn $bn $bn $bn $bn Credit risk 143.3 299.7 132.6 82.3 657.9 Counterparty credit risk 0.7 0.2 35.2 1.6 37.7 Market risk 1.1 0.9 27.1 7.1 36.2 Operational risk 1 36.0 37.1 37.0 (3.6) 106.5 At 31 Dec 2024 2 181.1 337.9 231.9 87.4 838.3 At 31 Dec 2023 192.9 354.5 218.5 88.2 854.1 1 Operational risk RWAs for HSBC Bank Canada are excluded post the PRA waiver permission granted in October 2024. 2 RWAs balance at 31 December 2024 includes HSBC Argentina operational risk RWAs due to the averaging calculation and will roll off over future reporting cycles. 236 HSBC Holdings plc Annual Report on Form 20-F Risk review RWAs by legal entities 1 HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc HSBC Bank Canada 3 Grupo Financiero HSBC, S.A. de C.V. Other trading entities 4 Holding companies, shared service centres and intra-Group eliminations Total RWAs $bn $bn $bn $bn $bn $bn $bn $bn $bn $bn Credit risk 117.2 71.8 314.3 19.3 60.7 — 23.7 40.7 10.2 657.9 Counterparty credit risk 0.3 19.7 10.9 0.6 3.4 — 0.6 2.2 — 37.7 Market risk 2 0.2 26.1 23.0 2.1 2.7 — 0.5 1.3 1.5 36.2 Operational risk 3 20.6 20.0 54.6 4.6 7.6 — 4.9 6.5 (12.3) 106.5 At 31 Dec 2024 138.3 137.6 402.8 26.6 74.4 — 29.7 50.7 (0.6) 838.3 At 31 Dec 2023 129.2 131.5 396.7 24.3 72.2 31.9 32.6 59.6 6.7 854.1 1 Balances are on a third-party Group consolidated basis. 2 Market risk RWAs are non-additive across the legal entities due to diversification effects within the Group. 3 Operational risk RWAs for HSBC Bank Canada are excluded post the PRA waiver permission granted in October 2024. 4 RWAs balance at 31 December 2024 includes HSBC Argentina operational risk RWAs due to the averaging calculation and will roll off over future reporting cycles. RWA movement by global business by key driver Credit risk, counterparty credit risk and operational risk WPB CMB GBM Corporate Centre Market risk Total RWAs $bn $bn $bn $bn $bn $bn RWAs at 1 Jan 2024 191.6 353.5 196.3 75.2 37.5 854.1 Asset size 11.1 17.3 13.9 2.6 4.5 49.4 Asset quality 1.7 5.4 (0.9) 0.1 — 6.3 Model updates 3.2 0.7 3.5 — — 7.4 Methodology and policy (8.9) (3.2) 0.2 2.8 0.2 (8.9) Acquisitions and disposals 1 (12.3) (26.1) (3.7) 0.3 (6.0) (47.8) Foreign exchange movements 2 (6.4) (10.6) (4.5) (0.7) — (22.2) Total RWA movement (11.6) (16.5) 8.5 5.1 (1.3) (15.8) RWAs at 31 Dec 2024³ 180.0 337.0 204.8 80.3 36.2 838.3 1 Balance includes operational risk RWAs for HSBC Bank Canada post the PRA waiver permission granted in October 2024. 2 Credit risk foreign exchange movements in this disclosure are computed by retranslating the RWAs into US dollars based on the underlying transactional currencies, and other movements in the table are presented on a constant currency basis. 3 RWAs balance at 31 December 2024 includes HSBC Argentina operational risk RWAs due to the averaging calculation and will roll off over future reporting cycles. RWA movement by legal entities by key driver 1 Credit risk, counterparty credit risk and operational risk HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc HSBC Bank Canada 2 Grupo Financiero HSBC, S.A. de C.V. Other trading entities 4 Holding companies, shared service centres and intra-Group eliminations Market risk Total RWAs $bn $bn $bn $bn $bn $bn $bn $bn $bn $bn $bn RWAs at 1 Jan 2024 129.0 108.8 369.3 21.5 69.6 31.1 31.9 58.0 (2.6) 37.5 854.1 Asset size 10.2 4.3 15.5 2.5 0.6 — 2.3 11.0 (1.5) 4.5 49.4 Asset quality 1.9 0.5 6.2 (0.8) 0.5 — — (2.0) — — 6.3 Model updates 0.1 0.8 5.3 0.7 0.4 — — 0.1 — — 7.4 Methodology and policy (0.6) 4.5 (11.5) 0.7 0.7 — — (4.6) 1.7 0.2 (8.9) Acquisitions and disposals 2 — (3.9) 0.1 — — (30.5) — (7.8) 0.3 (6.0) (47.8) Foreign exchange movements 3 (2.5) (3.5) (5.1) (0.1) (0.1) (0.6) (5.0) (5.3) — — (22.2) Total RWA movement 9.1 2.7 10.5 3.0 2.1 (31.1) (2.7) (8.6) 0.5 (1.3) (15.8) RWAs at 31 Dec 2024 138.1 111.5 379.8 24.5 71.7 — 29.2 49.4 (2.1) 36.2 838.3 1 Balances are on a third-party Group consolidated basis. 2 Balance includes operational risk RWAs for HSBC Bank Canada post the PRA waiver permission granted in October 2024. 3 Credit risk foreign exchange movements in this disclosure are computed by retranslating the RWAs into US dollars based on the underlying transactional currencies, and other movements in the table are presented on a constant currency basis. 4 RWAs balance at 31 December 2024 includes HSBC Argentina operational risk RWAs due to the averaging calculation and will roll off over future reporting cycles. HSBC Holdings plc Annual Report on Form 20-F 237 RWAs decreased by $ 15.8 bn during the year, mainly due to strategic disposals of $ 47.8 bn and foreign currency translation differences of $ 22.2 bn, which were partly offset by asset size movements of $ 49.4 bn. Asset size Asset size RWAs increased by $ 49.4 bn, including a $14.6bn rise in operational risk RWAs driven by an increase in average income. CMB RWAs rose by $ 17.3 bn, including a $6.4bn increase in operational risk RWAs, and additional RWAs contributed by an increase in corporate lending, mainly in HSBC UK Bank plc and higher sovereign exposures in Other trading entities and Asia. GBM RWAs increased by $ 13.9 bn, mainly reflecting an increase in operational risk RWAs of $5.5bn, higher securities financing exposures in HSBC Bank plc, and mark-to-market movements and organic growth in counterparty credit risk, mainly in Asia. Further RWA increases were due to higher sovereign exposures in Asia and Other trading entities. WPB RWAs increased by $ 11.1 bn, including a $4.2bn rise in operational risk RWAs, and due to retail mortgage growth in the US and HSBC UK Bank plc, and higher sovereign exposures in Other trading entities and Asia. Corporate Centre RWAs increased by $ 2.6 bn, primarily due to lending growth in SAB, reflected in Other trading entities. Market risk RWAs increased by $ 4.5 bn, which was mainly attributed to an increase in stressed value at risk due to higher sensitivities to interest rate shocks under the stress scenario, and the higher incremental risk charge due to increased positions, mainly in Asia and HSBC Bank plc. Asset quality The $ 6.3 bn rise in RWAs was mainly due to unfavourable credit migrations in Asia, including in the Hong Kong commercial real estate sector, which was partly offset by favourable credit risk migrations in Sri Lanka and Other trading entities. A further RWA increase in HSBC UK Bank plc was mainly attributed to changes in the loan-to-value mix of our mortgages portfolio. Model updates The $ 7.4 bn RWAs increase mainly followed a revision to the definition of default in our PD models for exposures to financial institutions, and an increase in the post-model adjustments for the Hong Kong models. Methodology and policy The $ 8.9 bn decrease in RWAs largely reflected a $7.5bn fall due to regulatory changes related to the risk-weighting of residential mortgages in Hong Kong. Credit risk parameter refinements, mainly in Asia, further contributed to the fall in RWAs. Acquisitions and disposals RWAs decreased by $ 47.8 bn, predominantly from the disposal of our banking business in Canada, including operational risk RWAs post the PRA waiver permission granted in October 2024, the sale of our business in Argentina and the sale of our retail banking operations in France. Leverage ratio At 31 Dec 2024 31 Dec 2023 $bn $bn Tier 1 capital (leverage) 144.1 144.2 Total leverage ratio exposure 2,571.1 2,574.8 % % Leverage ratio 5.6 5.6 Our leverage ratio was 5.6 % at 31 December 2024 , unchanged from 31 December 2023 . Leverage exposures decreased primarily due to strategic disposals and adverse foreign currency translation differences, which exceeded the increase in the underlying balance sheet. This was offset by a fall in the tier 1 capital. At 31 December 2024 , our UK minimum leverage ratio requirement of 3.25% was supplemented by a leverage ratio buffer of 0.9%, which consists of an additional leverage ratio buffer of 0.7% and a countercyclical leverage ratio buffer of 0.2%. These buffers translated into capital values of $18.0bn and $5.1bn respectively. Regulatory transitional arrangements for IFRS 9 ‘Financial Instruments’ We have adopted the regulatory transitional arrangements of the Capital Requirements Regulation for IFRS 9, including paragraph four of article 473a. These allow banks to add back to their capital base a proportion of the impact that IFRS 9 has upon their loan loss allowances. Our capital and ratios are presented under these arrangements throughout the tables in this section, including the end point figures . Pillar 3 disclosure requirements Pillar 3 of the Basel regulatory framework is related to market discipline and aims to make financial services firms more transparent by requiring publication of wide-ranging information on their risks, capital and management. For further details, see our Pillar 3 Disclosures at 31 December 2024 , which is expected to be published on or around 19 February 2025 at www.hsbc.com/investors. Liquidity and funding risk in 2024 Liquidity metrics At 31 December 2024, all of the Group’s material operating entities were above the required regulatory minimum liquidity and funding levels. Each entity maintains sufficient unencumbered liquid assets to comply with local and regulatory requirements. Each entity maintains a sufficient stable funding profile and is assessed using the NSFR or other appropriate metrics. In addition to regulatory metrics, we use a wide set of measures to manage our liquidity and funding profile. 238 HSBC Holdings plc Annual Report on Form 20-F Risk review The Group liquidity and funding position on an average basis is analysed in the following sections. Operating entities’ liquidity At 31 Dec 2024 LCR 1 HQLA Net outflows NSFR 1 % $bn $bn % HSBC UK Bank plc (ring-fenced bank) 2 190 117 61 154 HSBC Bank plc (non-ring-fenced bank) 3 148 138 93 115 The Hongkong and Shanghai Banking Corporation – Hong Kong branch 4 191 145 76 124 HSBC Singapore 5 287 32 11 184 Hang Seng Bank 299 57 19 174 HSBC Bank China 191 27 14 147 HSBC Bank USA 167 80 48 127 HSBC Continental Europe 149 82 55 139 HSBC Bank Middle East Ltd – UAE branch 251 14 6 151 HSBC Canada — — — — HSBC Mexico 164 9 6 125 At 31 Dec 2023 HSBC UK Bank plc (ring-fenced bank) 2 201 118 59 158 HSBC Bank plc (non-ring-fenced bank) 3 148 132 89 116 The Hongkong and Shanghai Banking Corporation – Hong Kong branch 4 192 147 77 127 HSBC Singapore 5 292 26 9 174 Hang Seng Bank 254 52 21 163 HSBC Bank China 170 24 14 139 HSBC Bank USA 172 82 48 131 HSBC Continental Europe 158 83 52 137 HSBC Bank Middle East Ltd – UAE branch 281 13 5 163 HSBC Canada 164 21 13 129 HSBC Mexico 149 8 5 124 1 The LCR and NSFR ratios presented in the above table are based on average values. The LCR is the average of the preceding 12 months. The NSFR is the average of the preceding four quarters. 2 HSBC UK Bank plc refers to the HSBC UK liquidity group, which comprises five legal entities: HSBC UK Bank plc, Marks and Spencer Financial Services plc, HSBC Private Bank (UK) Ltd, HSBC Innovation Bank Limited and HSBC Trust Company (UK) Limited, managed as a single operating entity, in line with the application of UK liquidity regulation as agreed with the PRA. 3 HSBC Bank plc includes overseas branches and special purpose entities consolidated by HSBC for financial statements purposes. 4 The Hongkong and Shanghai Banking Corporation – Hong Kong branch represents the material activities of The Hongkong and Shanghai Banking Corporation Limited. It is monitored and controlled for liquidity and funding risk purposes as a stand-alone operating entity. 5 HSBC Singapore includes HSBC Bank Singapore Limited and The Hongkong and Shanghai Banking Corporation – Singapore branch. Liquidity and funding risk is monitored and controlled at country level in line with the local regulator’s approval. Consolidated liquidity metrics Net stable funding ratio We manage funding risk based on the PRA’s NSFR rules. The Group’s NSFR at 31 December 2024, calculated from the average of the four preceding quarters, was 143%. At 1,2 31 Dec 2024 30 Jun 2024 31 Dec 2023 $bn $bn $bn Total available stable funding ($bn) 1,523 1,544 1,602 Total required stable funding ($bn) 1,064 1,115 1,162 NSFR ratio (%) 143 138 138 1 We enhanced our liquidity consolidation process in 2Q24 by revising provisions that addressed historical limitations. As our Group NSFR is reported on an average basis, the benefit of these changes incrementally increased our NSFR by circa 11% during the year by reducing required stable funding. This reduction was partly offset by a rise in financial investments and derivatives activities, resulting in a net 5% increase of NSFR compared with year ended 31 December 2023. 2 We enhanced our calculation process during 1Q24 and our NSFR comparatives have been restated. HSBC Holdings plc Annual Report on Form 20-F 239 Liquidity coverage ratio At 31 December 2024, the average high-quality liquid assets (‘HQLA‘) held at entity level amounted to $790bn (31 December 2023: $795bn). The Group consolidation methodology includes a deduction to reflect the impact of limitations in the transferability of entity liquidity around the Group. That resulted in an adjustment of $141bn to LCR HQLA and $6bn to LCR inflows on an average basis. We enhanced our liquidity consolidation process in 2Q24 by revising the provisions that addressed historical limitations. As Group LCR is reported on an average basis, the benefits of these changes have incrementally increased our LCR by circa 3% during the year by reducing net outflows. This reduction was partly offset by an organic increase in outflows, mostly in Asia, resulting in a net 2% increase of our LCR compared with year ended 31 December 2023. At 1 31 Dec 2024 30 Jun 2024 31 Dec 2023 $bn $bn $bn High-quality liquid assets (in entities) 790 780 795 Group LCR HQLA 649 646 648 Net outflows 471 472 477 Liquidity coverage ratio (%) 138 137 136 Adjustment for transfer restrictions 2 (147) (141) (154) 1 Group LCR numbers above are based on average values. The LCR is the average of the preceding 12 months. 2 This includes adjustments made to high-quality liquid assets and inflows in entities to reflect liquidity transfer restrictions. Liquid assets After the $141bn deduction, the average Group LCR HQLA of $649bn (31 December 2023: $648bn) was held in a range of asset classes and currencies. Of these, 95% were eligible as level 1 (31 December 2023: 97%). The following tables reflect the composition of the average liquidity pool by asset type and currency at 31 December 2024. Liquidity pool by asset type 1 Liquidity pool Cash Level 1 2 Level 2 2 $bn $bn $bn $bn Cash and balance at central bank 266 266 — — Central and local government bonds 352 — 326 26 Regional government public sector entities 2 — 2 — International organisation and multilateral developments banks 18 — 18 — Covered bonds 8 — 2 6 Other 3 — 1 2 Total at 31 Dec 2024 649 266 349 34 Total at 31 Dec 2023 648 310 317 21 1 Group liquid assets numbers are based on average values. 2 As defined in EU regulations, level 1 assets means ‘assets of extremely high liquidity and credit quality’, and level 2 assets means ‘assets of high liquidity and credit quality’. Liquidity pool by currency 1 $ £ € HK$ Other Total $bn $bn $bn $bn $bn $bn Liquidity pool at 31 Dec 2024 196 170 113 47 123 649 Liquidity pool at 31 Dec 2023 184 173 112 51 128 648 1 Group liquid assets numbers are based on average values. Sources of funding Our primary sources of funding are customer current accounts and savings deposits payable on demand or at short notice. We issue secured and unsecured wholesale securities to supplement customer deposits, meet regulatory obligations and to change the currency mix, maturity profile or location of our liabilities. The following ‘Funding sources’ and ‘Funding uses’ tables provide a view of how our consolidated balance sheet is funded. In practice, all the principal operating entities are required to manage liquidity and funding risk on a stand-alone basis. The tables analyse our consolidated balance sheet according to the assets that primarily arise from operating activities and the sources of funding primarily supporting these activities. Assets and liabilities that do not arise from operating activities are presented as a net balancing source or deployment of funds . Funding sources (Audited) 2024 2023 $m $m Customer accounts 1,654,955 1,611,647 Deposits by banks 73,997 73,163 Repurchase agreements – non-trading 180,880 172,100 Debt securities in issue 105,785 93,917 Cash collateral, margin, settlement accounts and items in course of transmission to other banks 82,732 92,550 Liabilities of disposal groups held for sale 29,011 108,406 Subordinated liabilities 25,958 24,954 Financial liabilities designated at fair value 138,727 141,426 Insurance contract liabilities 107,629 120,851 Trading liabilities 65,982 73,150 –  repos 14,806 12,198 –  stock lending 3,525 3,322 –  other trading liabilities 47,651 57,630 Total equity 192,273 192,610 Other balance sheet liabilities 359,119 333,903 At 31 Dec 3,017,048 3,038,677 Funding uses (Audited) 2024 2023 $m $m Loans and advances to customers 930,658 938,535 Loans and advances to banks 102,039 112,902 Reverse repurchase agreements – non-trading 252,549 252,217 Cash collateral, margin, settlement accounts and items in course of collection from other banks 78,538 96,253 Assets held for sale 27,234 114,134 Trading assets 314,842 289,159 –  reverse repos 16,823 16,575 –  stock borrowing 8,374 14,609 –  other trading assets 289,645 257,975 Financial investments 493,166 442,763 Cash and balances with central banks 267,674 285,868 Other balance sheet assets 550,348 506,846 At 31 Dec 3,017,048 3,038,677 . 240 HSBC Holdings plc Annual Report on Form 20-F Risk review Wholesale term debt maturity profile The maturity profile of our wholesale term debt obligations is set out in the following table. The balances in the table are not directly comparable with those in the consolidated balance sheet because the table presents gross cash flows relating to principal payments and not the balance sheet carrying value, which includes debt securities and subordinated liabilities measured at fair value. Wholesale funding cash flows payable by HSBC under financial liabilities by remaining contractual maturities 1 Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 6 months Due over 6 months but not more than 9 months Due over 9 months but not more than 1 year Due over 1 year but not more than 2 years Due over 2 years but not more than 5 years Due over 5 years Total $m $m $m $m $m $m $m $m $m Debt securities issued 14,260 15,011 13,841 10,235 11,644 29,639 62,434 53,814 210,878 –  unsecured CDs and CP 5,346 7,803 10,495 6,623 6,829 662 1,787 1,598 41,143 –  unsecured senior MTNs 7,528 3,351 1,014 1,269 2,736 21,593 47,236 42,899 127,626 –  unsecured senior structured notes 874 1,826 2,258 1,457 1,526 6,055 9,160 6,520 29,676 –  secured covered bonds — — — — — — 1,254 — 1,254 –  secured asset-backed commercial paper 488 — — — — — — — 488 –  secured ABS 24 47 67 64 61 664 520 864 2,311 –  others — 1,984 7 822 492 665 2,477 1,933 8,380 Subordinated liabilities — — 1,737 1,030 — 892 2,694 30,349 36,702 –  subordinated debt securities — — 1,737 1,030 — 892 2,694 29,471 35,824 –  preferred securities — — — — — — — 878 878 At 31 Dec 2024 14,260 15,011 15,578 11,265 11,644 30,531 65,128 84,163 247,580 Debt securities issued 17,620 9,798 14,284 13,226 12,226 20,882 64,010 50,045 202,091 –  unsecured CDs and CP 6,400 6,777 7,601 6,429 6,513 1,179 1,073 925 36,897 –  unsecured senior MTNs 8,190 1,160 4,365 3,627 3,267 12,903 54,984 41,007 129,503 –  unsecured senior structured notes 2,307 1,491 1,617 2,513 1,978 2,924 2,793 5,910 21,533 –  secured covered bonds — — — — — — 1,275 — 1,275 –  secured asset-backed commercial paper 426 — — — — — — — 426 –  secured ABS 22 44 62 58 55 188 861 539 1,829 –  others 275 326 639 599 413 3,688 3,024 1,664 10,628 Subordinated liabilities — 2,013 — — — 3,358 4,282 27,234 36,887 –  subordinated debt securities — 2,000 — — — 3,358 4,282 25,441 35,081 –  preferred securities — 13 — — — — — 1,793 1,806 At 31 Dec 2023 17,620 11,811 14,284 13,226 12,226 24,240 68,292 77,279 238,978 1 Excludes financial liabilities of disposal groups. HSBC Holdings plc Annual Report on Form 20-F 241 Structural foreign exchange risk in 2024 Structural foreign exchange exposures represent net assets or capital investments in subsidiaries, branches, joint arrangements or associates, together with any associated hedges, the functional currencies of which are currencies other than the US dollar. Exchange differences on structural exposures are usually recognised in ‘other comprehensive income’. Net structural foreign exchange exposures 2024 Currency of structural exposure Net investment in foreign operations (excl non- controlling interest) Net investment hedges Structural foreign exchange exposures (pre- economic hedges) Economic hedges – structural FX hedges 1 Economic hedges – equity securities (AT1) 2 Net structural foreign exchange exposures $m $m $m $m $m $m Hong Kong dollars 40,106 (5,841) 34,265 (9,861) — 24,404 Pounds sterling 46,462 (15,024) 31,438 — (1,254) 30,184 Chinese renminbi 35,032 (4,725) 30,307 (1,080) — 29,227 Euros 17,391 (2,013) 15,378 — (1,297) 14,081 Canadian dollars 43 — 43 — — 43 Indian rupees 7,056 (1,973) 5,083 — — 5,083 Mexican pesos 3,991 — 3,991 — — 3,991 Saudi riyals 4,675 — 4,675 — — 4,675 UAE dirhams 5,264 (893) 4,371 (2,543) — 1,828 Malaysian ringgit 3,036 — 3,036 — — 3,036 Singapore dollars 2,405 — 2,405 1,092 (1,089) 2,408 Australian dollars 2,126 — 2,126 — — 2,126 Taiwanese dollars 2,199 (1,015) 1,184 — — 1,184 Indonesian rupiah 1,541 (533) 1,008 — — 1,008 Swiss francs 1,096 (541) 555 — — 555 Korean won 1,204 (756) 448 — — 448 Thai baht 976 (460) 516 — — 516 Egyptian pound 891 — 891 — — 891 Qatari rial 728 (97) 631 (299) — 332 Argentinian peso — — — — — — Vietnamese dong 769 — 769 — — 769 Others, each less than $700m 4,327 (463) 3,864 — — 3,864 At 31 Dec 181,318 (34,334) 146,984 (12,691) (3,640) 130,653 2023 Hong Kong dollars 39,014 (5,792) 33,222 (7,979) — 25,243 Pounds sterling 46,661 (16,415) 30,246 — (1,275) 28,971 Chinese renminbi 33,809 (3,299) 30,510 (1,066) — 29,444 Euros 15,673 (515) 15,158 — (1,384) 13,774 Canadian dollars 5,418 (1,076) 4,342 — — 4,342 Indian rupees 6,286 (2,110) 4,176 — — 4,176 Mexican pesos 4,883 — 4,883 — — 4,883 Saudi riyals 4,312 — 4,312 — — 4,312 UAE dirhams 4,995 (613) 4,382 (2,761) — 1,621 Malaysian ringgit 2,754 — 2,754 — — 2,754 Singapore dollars 2,345 (224) 2,121 — — 2,121 Australian dollars 2,362 — 2,362 — — 2,362 Taiwanese dollars 2,212 (1,127) 1,085 — — 1,085 Indonesian rupiah 1,535 (512) 1,023 — — 1,023 Swiss francs 1,191 (526) 665 — — 665 Korean won 1,354 (864) 490 — — 490 Thai baht 1,022 — 1,022 — — 1,022 Egyptian pound 959 — 959 — — 959 Qatari rial 834 (215) 619 (299) — 320 Argentinian peso 794 — 794 — — 794 Vietnamese dong 872 — 872 — — 872 Others, each less than $700m 4,386 (487) 3,899 — — 3,899 At 31 Dec 183,671 (33,775) 149,896 (12,105) (2,659) 135,132 1 Represents hedges that do not qualify as net investment hedges for accounting purposes. The SGD position represents the hedge against our SGD AT1 issuance. 2 Represents foreign currency-denominated preference share and AT1 instruments. These are accounted for at historical cost under IFRS Accounting Standards and do not qualify as net investment hedges for accounting purposes. The gain or loss arising from changes in the US dollar value of these instruments is recognised on redemption in retained earnings. For a definition of structural foreign exchange exposures, see page 232 . 242 HSBC Holdings plc Annual Report on Form 20-F Risk review Interest rate risk in the banking book in 2024 Banking net interest income sensitivity Banking NII Sensitivity analyses the sensitivity of our banking net interest income to interest rate shocks. This metric, which was introduced in our Annual Report and Accounts 2023, includes the sensitivity arising from the use of banking book liabilities to fund trading assets, as well as the currency impacts of vanilla foreign exchange swaps to optimise cash management across the Group. Banking NII Sensitivity is therefore a more comprehensive measure than NII Sensitivity which was disclosed previously and is aligned with the presentation of banking net interest income as an alternative performance measure intended to approximate the Group’s banking revenue that is directly impacted by changes in interest rates. The following tables set out the assessed impact to a hypothetical base case projection of our banking NII under an immediate shock of 100bps to the current market-implied path of interest rates across all currencies on 31 December 2024 (effects in the first, second and third years). For example, Year 3 shows the impact of an immediate rate shock on the banking NII projected for the third year. The sensitivities shown represent a hypothetical simulation of the base case banking NII, assuming a static balance sheet (specifically no assumed migration from current account to term deposits), and no management actions from Global Treasury. This also incorporates the effect of interest rate behaviouralisation, hypothetical managed rate product pricing assumptions, prepayment of mortgages and deposit stability. The sensitivity calculations exclude pensions, insurance exposures, and our interest in associates. The sensitivity analysis performed in the case of a down-shock does not include floors to market rates, and it does not include floors on some wholesale assets and liabilities. However, floors have been maintained for deposits and loans to customers where this is contractual or where negative rates would not be applied. As the market and policy rates move, the degree to which these changes are passed on to customers will vary based on a number of factors, including the absolute level of market rates, regulatory and contractual frameworks, and competitive dynamics. To aid comparability between markets, we have simplified the basis of preparation for our disclosure and have used a 50% pass-on assumption for major entities on certain interest-bearing deposits. Our asset pass-on assumptions are largely in line with our contractual agreements or established market practice, which typically results in a significant portion of interest rate changes being passed on. An immediate interest rate rise of 100bps would increase projected banking NII by $2.1bn. An immediate interest rate fall of 100bps would decrease projected banking NII by $2.9bn. The sensitivity of banking NII for 12 months as at 31 December 2024 decreased by $0.7bn in the plus 100bps parallel shock and by $0.5bn in the minus 100bps parallel shock, when compared with 31 December 2023. The decline in sensitivities is primarily due to an increase in stabilisation activities in line with our strategy. For further details of measurement of interest rate risk in the banking book, see page 232 . Banking NII sensitivity to an instantaneous change in yield curves (12 months) – Year 1 sensitivity by currency Currency $ HK$ £ € Other Total $m $m $m $m $m $m Change in Jan 2025 to Dec 2025 (based on balance sheet at 31 Dec 2024 ) +100bps parallel 572 220 219 301 821 2,133 -100bps parallel (862) (403) (353) (314) (954) (2,886) Change in Jan 2024 to Dec 2024 (based on balance sheet at 31 Dec 2023) +100bps parallel 343 411 496 285 1,297 2,832 -100bps parallel (494) (493) (602) (304) (1,460) (3,353) Banking NII sensitivity to an instantaneous down 100bps parallel change in yield curves – Year 2 and Year 3 sensitivity by currency Currency $ HK$ £ € Other Total $m $m $m $m $m $m Change in banking NII (based on balance sheet at 31 Dec 2024 ) Year 2 (Jan 2026 to Dec 2026) (1,226) (509) (563) (444) (1,333) (4,075) Year 3 (Jan 2027 to Dec 2027) (1,531) (550) (1,022) (504) (1,449) (5,056) Change in banking NII (based on balance sheet at 31 Dec 2023) Year 2 (Jan 2025 to Dec 2025) (1,015) (693) (938) (333) (1,798) (4,777) Year 3 (Jan 2026 to Dec 2026) (1,289) (761) (1,439) (405) (1,926) (5,820) Non-trading portfolios Value at risk of non-trading portfolios Non-trading portfolios comprise of positions that primarily arise from the interest rate management of our retail and wholesale banking assets and liabilities, financial investments measured at fair value through other comprehensive income (‘FVOCI’) or at amortised cost, and certain exposures arising from our insurance operations. Value at risk (‘VaR’) of non-trading portfolios is a technique for estimating potential losses on risk positions as a result of movements in market rates and prices over a specified time horizon and to a given level of confidence. The use of VaR is integrated into the market risk management of non-trading portfolios to have a complete picture of risk, complementing risk sensitivity analysis. From 1Q24, we adopted a methodology change to measure non- trading VaR over a 10-day holding period as opposed to 1 day in order to better reflect longer average time horizons in the management of non-trading portfolios compared with trading portfolios. Comparative data at 31 December 2023 has been restated on a 10- day basis accordingly, using a scalar approach that results in restated numbers being approximately three times higher than previously reported 1-day basis numbers. HSBC Holdings plc Annual Report on Form 20-F 243 Our models are predominantly based on historical simulation that incorporates the following features: – historical market rates and prices, which are calculated with reference to interest rates, credit spreads and the associated volatilities; – potential market movements that are calculated with reference to data from the past two years; and – calculations to a 99% confidence level and using a 10-day holding period. Although a valuable guide to risk, VaR is used for non-trading portfolios with awareness of its limitations. For example: – The use of historical data as a proxy for estimating future market moves may not encompass all potential market events, particularly those that are extreme in nature. As the model is calibrated on the last 500 business days, it does not adjust instantaneously to a change in market regime. – The use of a 10-day holding period for risk management purposes of non-trading books is only an indication of exposure and not indicative of the time period required to hedge or liquidate positions. – The use of a 99% confidence level by definition does not take into account losses that might occur beyond this level of confidence. Non-trading VaR includes non-trading financial instruments held in portfolios managed by Global Treasury. The management of interest rate risk in the banking book is described further in ‘Banking net interest income sensitivity’ on page 242 . The interest rate risk on the fixed-rate securities issued by HSBC Holdings is not included in the Group non-trading VaR. The management of this risk is described on page 245 . Non-trading VaR also excludes the equity risk on securities held at fair value and non- trading book foreign exchange risk. The daily levels of total non-trading VaR in 2024 are set out in the graph below. Weekly VaR (non-trading portfolios), 99% 10 day ($m) The Group non-trading VaR for 2024 is shown in the table below. Non-trading VaR, 99% 10 day (Audited) Interest rate Credit spread Portfolio diversification 1 Total 2 $m $m $m $m Balance at 31 Dec 2024 528.4 246.1 ( 220.7 ) 553.8 Average 603.7 315.1 ( 222.9 ) 695.8 Maximum 1,000.6 369.1 1,097.6 Minimum 292.1 242.4 408.7 Balance at 31 Dec 2023 549.6 356.7 ( 329.5 ) 576.7 Average 494.0 266.1 ( 201.6 ) 558.6 Maximum 638.6 368.0 — 709.4 Minimum 344.0 174.5 — 401.5 1 Portfolio diversification is the market risk dispersion effect of holding a portfolio containing different risk types. It represents the reduction in unsystematic market risk that occurs when combining a number of different risk types – such as interest rate and credit spreads – together in one portfolio. It is measured as the difference between the sum of the VaR by individual risk type and the combined total VaR. A negative number represents the benefit of portfolio diversification. As the maximum and minimum occurs on different days for different risk types, it is not meaningful to calculate a portfolio diversification benefit for these measures. 2 The total VaR is non-additive across risk types due to diversification effects. The VaR for non-trading activity decreased by $23m from $577m at 31 December 2023 to $554m at 31 December 2024 due to the 2022 inflation-driven stress period dropping out of our two-year historical scenario window, decreasing the volatility calibrated by the model during the second half of the year, largely offset by an increase in the duration risk of Global Treasury’s portfolios. Prior to this change in calibration, non-trading VaR peaked at $1,097m during May 2024, driven by an increase in the duration of Global Treasury’s portfolios, higher market yields and more volatile historical scenarios from March 2022. The average portfolio diversification effect between interest rate and credit spread exposure remained broadly stable. Non-trading VaR is managed and controlled through a limit approved by the Group Chief Risk and Compliance Officer for HSBC Holdings. The limit was rescaled higher to reflect the change in the basis of preparation detailed above. 244 HSBC Holdings plc Annual Report on Form 20-F Risk review Sensitivity of capital and reserves Global Treasury maintains a portfolio of high-quality liquid assets for contingent liquidity and NII stabilisation purposes, which is in part accounted for under a hold-to-collect-and-sell business model. This hold-to-collect-and-sell portfolio, together with any associated derivatives in designated hedge accounting relationships, is accounted for at fair value through other comprehensive income and has an impact on CET1. The portfolio represents the vast majority of our hold-to-collect-and-sell capital risk and is risk managed with a variety of tools, including risk sensitivities and value at risk measures. The table below measures the sensitivity of the value of this portfolio to an instantaneous 100 basis point increase in interest rates, based on the risk sensitivity of a shift in value for a 1 basis point (‘bps‘) parallel movement in interest rates. Sensitivity of hold-to-collect-and-sell reserves to interest rate movements $m At 31 Dec 2024 +100 basis point parallel move in all yield curves (3,433) As a percentage of total shareholders’ equity (1.86)% At 31 Dec 2023 +100 basis point parallel move in all yield curves (2,264) As a percentage of total shareholders’ equity (1.22)% T he increase in the sensitivity of the portfolio during 2024 was mainly driven by an increase in NII stabilisation hedging in line with our strategy. While this hedging has increased the capital sensitivity of the portfolio it has the effect of further dampening the volatility of our banking NII over time and through the cycle. The figures in the table above do not take into account the effects of interest rate convexity. The portfolio mostly comprises vanilla sovereign bonds in a variety of currencies and the primary risk is interest rate duration risk, although the portfolio also generates asset swap, credit spread and asset spread risks that are managed within appetite as part of our risk management framework. A minus 100bps shock would lead to an approximately symmetrical gain. Alongside our monitoring of the hold-to-collect-and-sell reserve sensitivity, we also monitor the sensitivity of reported cash flow hedging reserves to interest rate movements on a yearly basis by assessing the expected reduction in valuation of cash flow hedges due to parallel movements of plus or minus 100bps in all yield curves. The following table details the sensitivity of our cash flow hedging reserves to the stipulated movements in yield curves at the year end. The sensitivities are indicative and based on simplified scenarios. We apply flooring on negative rates in the minus 100bps scenario in this assessment. The effect of this flooring is immaterial at the end of 2024. T he sensitivity of the cash flow hedging reserve increased compared with 31 December 2023. The increase was mainly driven by our NII stabilisation activity. Our exposure to fixed rate pound sterling hedges continued to be the largest in size and in terms of year-on-year increase. Hong Kong dollar and euro hedges contributed the majority of the rest of the increase in exposure . Sensitivity of cash flow hedging reported reserves to interest rate movements $m At 31 Dec 2024 +100 basis point parallel move in all yield curves (4,496) As a percentage of total shareholders’ equity (2.43)% -100 basis point parallel move in all yield curves 4,500 As a percentage of total shareholders’ equity 2.43% At 31 Dec 2023 +100 basis point parallel move in all yield curves (3,436) As a percentage of total shareholders’ equity (1.85)% -100 basis point parallel move in all yield curves 3,474 As a percentage of total shareholders’ equity 1.87% Third-party assets in Markets Treasury Third-party assets in Markets Treasury increased by 2% compared with 31 December 2023. The net increase of $19bn is partly reflective of higher commercial surpluses during the year, with the increase of $69bn in ‘Financial Investments’ and the decrease of $17bn in ‘Cash and balances at central banks’ largely driven by NII stabilisation activity. Additionally, a decrease of $22bn in ‘Other’ is attributed to the disposal of HSBC Bank Canada assets previously classified as held for sale. Third-party assets in Markets Treasury 2024 2023 $m $m Cash and balances at central banks 261,284 278,289 Trading assets 163 238 Loans and advances: –  to banks 66,518 78,667 –  to customers 743 1,083 Reverse repurchase agreements 47,812 45,419 Financial investments 465,123 396,259 Other 12,232 34,651 At 31 Dec 853,875 834,606 HSBC Holdings plc Annual Report on Form 20-F 245 Defined benefit pension plans Market risk arises within our defined benefit pension plans to the extent that the obligations of the plans are not fully matched by assets with determinable cash flows. For details of our defined benefit plans, including asset allocation, see Note 5 on the financial statements, and for pension risk management, see page 233 . Additional market risk measures applicable only to the parent company HSBC Holdings monitors and manages foreign exchange risk and interest rate risk. In order to manage interest rate risk, HSBC Holdings uses the projected sensitivity of its NII to future changes in yield curves. Foreign exchange risk HSBC Holdings’ foreign exchange exposures derive almost entirely from the execution of structural foreign exchange hedges on behalf of the Group. At 31 December 2024 , HSBC Holdings had forward foreign exchange contracts of $33.9bn (2023: $33.8bn) to manage the Group’s structural foreign exchange exposures. For further details of our structural foreign exchange exposures, see page 241 . Sensitivity of banking net interest income HSBC Holdings monitors banking NII sensitivity in the first, second and third years . Banking NII sensitivity includes the impact of AT1 instruments as well as vanilla foreign exchange swaps to optimise cash management. For 2024, we have changed the HSBC Holdings disclosure from NII sensitivity to banking NII sensitivity to reflect our internal management of interest rate sensitivity, aligned to the Group approach (see page 242 ). Comparative data for the financial year ended 31 December 2023 have been re-presented accordingly. These sensitivities assume that any issuance where HSBC Holdings has an option to redeem at a future call date is called at that date. The tables below set out the effect on HSBC Holdings’ future banking NII of an immediate shock of +/-100bps to the current market-implied path of interest rates across all currenc ies on 31 December 2024. The banking NII sensitivities shown are indicative and based on simplified scenarios. An immediate interest rate rise of 100bps would decrease projected banking NII for the 12 months to 31 December 2025 by $156m. Conversely, an immediate fall of 100bps would increase projected banking NII for the 12 months to 31 December 2025 by $156m. Overall the banking NII sensitivity is mainly driven by interest rate sensitive liabilities funding equity (non-interest bearing) investments in subsidiaries. Banking NII sensitivity to an instantaneous change in yield curves (12 months) – Year 1 sensitivity by currency $ HK$ £ € Other Total $m $m $m $m $m $m Change in Jan 2025 to Dec 2025 (based on balance sheet at 31 Dec 2024) +100bps parallel (194) — 31 7 — (156) -100bps parallel 194 — (31) (7) — 156 Change in Jan 2024 to Dec 2024 (based on balance sheet at 31 Dec 2023) +100bps parallel (228) — 34 8 (1) (187) -100bps parallel 228 — (34) (8) 1 187 Banking NII sensitivity to an instantaneous down 100bps parallel change in yield curves – Year 2 and Year 3 sensitivity by currency $ HK$ £ € Other Total $m $m $m $m $m $m Change in banking NII (based on balance sheet at 31 Dec 2024 ) Year 2 (Jan 2026 to Dec 2026) 182 — (36) (24) — 122 Year 3 (Jan 2027 to Dec 2027) 192 — (28) (27) — 137 Change in banking NII (based on balance sheet at 31 Dec 2023 ) — Year 2 (Jan 2025 to Dec 2025) 194 — (47) (8) (1) 138 Year 3 (Jan 2026 to Dec 2026) 194 — (44) (29) (3) 118 The figures represent hypothetical movements in banking NII based on projected yield curve scenarios, HSBC Holdings’ current interest rate risk profile and assumed changes to that profile during the next three years. The sensitivities represent our assessment of the change to a hypothetical base case based on a static balance sheet assumption, and do not take into account the effect of actions that could be taken to mitigate this interest rate risk. 246 HSBC Holdings plc Annual Report on Form 20-F Risk review Market risk Contents 246 Overview 246 Market risk management 247 Market risk in 2024 247 Trading portfolios 248 Market risk balance sheet linkages Overview Market risk is the risk of an adverse financial impact on trading activities arising from changes in market parameters such as interest rates, foreign exchange rates, asset prices, volatilities, correlations and credit spreads. Market risk arises from both trading portfolios and non-trading portfolios. Trading portfolios comprise positions held for client servicing and market-making, with the intention of short-term resale and/or to hedge risks resulting from such positions. For further details of market risk in non-trading portfolios, see page 242 . Market risk management Key developments in 2024 There were no material changes to our policies and practices for the management of market risk in 2024 . Governance and structure The following diagram summarises the main business areas where trading market risks reside and the market risk measures used to monitor and limit exposures. Risk types Trading risk – Foreign exchange and commodities – Interest rates – Credit spreads – Equities Global business GBM Risk measure Value at risk | Sensitivity | Stress testing The objective of our risk management policies and measurement techniques is to manage and control market risk exposures to optimise return on risk while maintaining a market profile consistent with our established risk appetite. Market risk is managed and controlled through limits approved by the Group Chief Risk and Compliance Officer. These limits are allocated across business lines and to the Group’s legal entities. Each major operating entity has an independent market risk management and control sub-function, which is responsible for measuring, monitoring and reporting market risk exposures against limits on a daily basis. Each operating entity is required to assess the market risks arising in its business and to transfer them either to its local Markets and Securities Services or Markets Treasury unit for management, or to separate books managed under the supervision of the local ALCO. The Traded Risk function enforces the controls around trading in permissible instruments approved for each site as well as changes that follow the approval of new products. Traded Risk also restricts trading in the more complex derivative products to only those offices with appropriate levels of product expertise and control systems. Key risk management processes Monitoring and limiting market risk exposures Our objective is to manage and control market risk exposures while maintaining a market profile consistent with our risk appetite. We use a range of tools to monitor and limit market risk exposures including sensitivity analysis, VaR and stress testing. Sensitivity analysis Sensitivity analysis measures the impact of movements in individual market factors on specific instruments or portfolios, including interest rates, foreign exchange rates and equity prices. We use sensitivity measures to monitor the market risk positions within each risk type. Granular sensitivity limits are set for trading desks with consideration of market liquidity, customer demand and capital constraints, among other factors. Value at risk (Audited) VaR is a technique for estimating potential losses on risk positions as a result of movements in market rates and prices over a specified time horizon and to a given level of confidence. The use of VaR is integrated into market risk management and calculated for all trading positions regardless of how we capitalise them. Where we do not calculate VaR explicitly, we use alternative tools as summarised in the ‘Stress testing’ section below. Our models are predominantly based on historical simulation that incorporates the following features: – historical market rates and prices, which are calculated with reference to foreign exchange rates, commodity prices, interest rates, equity prices and the associated volatilities; – potential market movements that are calculated with reference to data from the past two years; and – calculations to a 99% confidence level and using a one-day holding period. The models also incorporate the effect of option features on the underlying exposures. The nature of the VaR models means that an increase in observed market volatility will lead to an increase in VaR without any changes in the underlying positions. VaR model limitations Although a valuable guide to risk, VaR is used with awareness of its limitations. For example: – The use of historical data as a proxy for estimating future market moves may not encompass all potential market events, particularly those that are extreme in nature. As the model is calibrated on the last 500 business days, it does not adjust instantaneously to a change in the market regime. – The use of a one-day holding period for risk management purposes of trading books assumes that this short period is sufficient to hedge or liquidate all positions. – The use of a 99% confidence level by definition does not take into account losses that might occur beyond this level of confidence. – VaR is calculated on the basis of exposures outstanding at the close of business and therefore does not reflect intra-day exposures. HSBC Holdings plc Annual Report on Form 20-F 247 Risk not in VaR framework The risks not in VaR (‘RNIV’) framework captures and capitalises material market risks that are not adequately covered in the VaR model. Risk factors are reviewed on a regular basis and are either incorporated directly into the VaR models, where possible, or quantified through either the VaR-based RNIV approach or a stress test approach within the RNIV framework. While VaR-based RNIVs are calculated by using historical scenarios, stress-type RNIVs are estimated on the basis of stress scenarios whose severity is calibrated to be in line with the capital adequacy requirements. The outcome of the VaR-based RNIV approach is included in the overall VaR calculation but excluded from the VaR measure used for regulatory back-testing. Stress-type RNIVs include a deal contingent derivatives capital charge to capture risk for these transactions and a de-peg risk measure to capture risk to pegged and heavily-managed currencies. Stress testing Stress testing is an important procedure that is integrated into our market risk management framework to evaluate the potential impact on portfolio values of more extreme, although plausible, events or movements in a set of financial variables. In such scenarios, losses can be much greater than those predicted by VaR modelling. Stress testing and reverse stress testing provide senior management with insights regarding the ‘tail risk’ beyond VaR. Stress testing is implemented at legal entity, regional and overall Group levels. A set of scenarios is used consistently across all regions within the Group. Market risk stress testing incorporates both historical and hypothetical events. Market risk reverse stress tests are designed to identify vulnerabilities in our portfolios by looking for scenarios that lead to loss levels considered severe for the relevant portfolio. These scenarios may be local or idiosyncratic in nature and complement the systematic top-down stress testing. The risk appetite around potential stress losses for the Group is set and monitored against limits. Back-testing We routinely validate the accuracy of our VaR models by back-testing the VaR metric against both actual and hypothetical profit and loss. Hypothetical profit and loss excludes non-modelled items such as fees, commissions and revenue related to intra-day transactions. The hypothetical profit and loss reflects the profit and loss that would be realised if positions were held constant from the end of one trading day to the end of the next. This measure of profit and loss does not align with how risk is dynamically hedged, and is therefore not necessarily indicative of the actual performance of the business. The number of hypothetical loss back-testing exceptions, together with a number of other indicators, is used to assess model performance and to consider whether enhanced internal monitoring of a VaR model is required. We back-test our VaR at set levels of our Group entity hierarchy. During 2024, the Group experienced one back-testing exception on losses against actual and hypothetical profit and losses, mainly driven by volatility in certain equity markets. Market risk in 2024 The past year had a busy political agenda, with the November US election being the main event. Geopolitics remained prominent amid ongoing tensions in the Middle East and the Russia-Ukraine war. Major central banks began their easing cycles in 2024, with the US Federal Reserve cutting its policy rate by 1% since September, while the ECB and some other European central banks implemented rate cuts starting in June. In contrast, the Bank of Japan raised its overnight rate in March, ending a prolonged period of negative interest rates and ceasing yield curve control. Throughout the year, government bond yields generally trended upward, except during the third quarter, largely driven by volatile inflation figures and shifting central bank expectations. In Europe, the yield spread between France and Germany widened amid uncertainties surrounding French fiscal policy following local legislative elections. Global equities reached multiple record highs in the US and Europe, buoyed by strong corporate earnings and positive sentiment in the technology sector. Global markets rebounded from a short period of volatility in August, triggered by the unwinding of carry trades due to rising Japanese government bond yields, US recession concerns, and equity market valuations. In foreign exchange markets, the trend of a strengthening US dollar continued against most developed and emerging market currencies. The euro approached parity with the US dollar, while the yen weakened to multi-decade lows. Credit markets performed positively throughout the year, with a more pronounced tightening of high-yield credit spreads compared with investment-grade spreads, despite a broad widening of spreads in August. We continued to manage market risk prudently during 2024. Sensitivity exposures and VaR remained within appetite as the business pursued its core market-making activity in support of our customers. Market risk was managed using a complementary set of risk measures and limits, including stress testing and scenario analysis. Trading portfolios Value at risk of the trading portfolios Trading VaR predominantly resides within the Markets and Securities Services business. As of 31 December 2024, Trading VaR stood at $38.3m, down from $52.8m as of 31 December 2023.  At the end of December 2024, Trading VaR was mainly driven by exposures to interest rate risk factors from the Global Debt Markets and Global Foreign Exchange business lines to facilitate client-driven activity. Trading VaR peaked in March 2024 due to the sensitivity of the trading book to interest rates movements, coupled with relatively large interest rate shocks captured in the VaR scenario window. VaR reduced in the second half of 2024, mainly as a result of some volatile scenarios rolling off the VaR scenario window. 248 HSBC Holdings plc Annual Report on Form 20-F Risk review The daily levels of total trading VaR during 2024 are set out in the graph below. Daily VaR (trading portfolios), 99% 1 day ($m) The Group trading VaR for the year is shown in the table below. Trading VaR, 99% 1 day 1 (Audited) Foreign exchange and commodity Interest rate Equity Credit spread Portfolio diversification 2 Total 3 $m $m $m $m $m $m Balance at 31 Dec 2024 14.6 34.9 16.3 8.2 ( 35.7 ) 38.3 Average 15.2 48.3 14.8 9.9 ( 35.1 ) 53.1 Maximum 29.8 78.1 20.5 13.1 83.3 Minimum 6.9 24.8 12.7 6.6 37.0 Balance at 31 Dec 2023 13.4 55.9 15.2 7.2 ( 38.9 ) 52.8 Average 16.2 53.9 19.0 11.6 ( 40.8 ) 59.8 Maximum 24.6 86.0 27.8 16.5 98.2 Minimum 9.3 25.5 13.4 6.6 34.4 1 Trading portfolios comprise positions arising from the market-making and warehousing of customer-derived positions. 2 Portfolio diversification is the market risk dispersion effect of holding a portfolio containing different risk types. It represents the reduction in unsystematic market risk that occurs when combining a number of different risk types – such as interest rate, equity and foreign exchange – together in one portfolio. It is measured as the difference between the sum of the VaR by individual risk type and the combined total VaR. A negative number represents the benefit of portfolio diversification. As the maximum and minimum occurs on different days for different risk types, it is not meaningful to calculate a portfolio diversification benefit for these measures. 3 The total VaR is non-additive across risk types due to diversification effects. The table below shows trading VaR at a 99% confidence level compared with trading VaR at a 95% confidence level at 31 December 2024 . This comparison facilitates the benchmarking of the trading VaR, which can be stated at different confidence levels, with financial institution peers. The 95% VaR is unaudited. Comparison of trading VaR, 99% 1 day vs trading VaR, 95% 1 day Trading VaR, 99% 1 day Trading VaR, 95% 1 day $m $m Balance at 31 Dec 2024 38.3 23.4 Average 53.1 33.0 Maximum 83.3 48.9 Minimum 37.0 22.0 Balance at 31 Dec 2023 52.8 35.3 Average 59.8 36.8 Maximum 98.2 53.3 Minimum 34.4 21.0 Market risk balance sheet linkages The following balance sheet lines in the Group’s consolidated position are subject to market risk: Trading assets and liabilities The Group’s trading assets and liabilities are in almost all cases originated by GBM. Other than a limited number of exceptions, these assets and liabilities are treated as traded risk for the purposes of market risk management. The exceptions primarily arise in Global Banking where the short-term acquisition and disposal of assets are linked to other non-trading-related activities such as loan origination. HSBC Holdings plc Annual Report on Form 20-F 249 Derivative assets and liabilities We undertake derivative activity for three primary purposes: to create risk management solutions for clients, to manage the portfolio risks arising from client business, and to manage and hedge our own risks. Most of our derivative exposures arise from sales and trading activities within GBM. The assets and liabilities included in trading VaR give rise to a large proportion of the income included in net income from financial instruments held for trading or managed on a fair value basis. Adjustments to trading income such as valuation adjustments are not measured by the trading VaR model. For information on the accounting policies applied to financial instruments at fair value, see Note 1 .2 on the financial statements. Climate risk TCFD Contents 249 Overview 250 Climate risk management 251 Embedding our climate risk approach 253 Insights from climate scenario analysis Overview Our climate risk approach identifies two primary drivers of climate risk: – physical risk, which arises from the increased frequency and severity of extreme weather events, such as hurricanes and floods, or chronic gradual shifts in weather patterns or rises in the sea level; and – transition risk, which arises from the process of moving to a net zero economy, including changes in government policy and legislation, technology, market demand, and reputational implications triggered by a change in stakeholder expectations, action or inaction. In addition, we have also identified the following thematic issues related to climate risk, which are most likely to materialise in the form of reputational, regulatory compliance and litigation risks: – net zero alignment risk, which arises from the risk of HSBC failing to meet its net zero ambition or failing to meet external expectations related to net zero; and – the risk of greenwashing, which arises from the act of knowingly or unknowingly making inaccurate, unclear, misleading or unsubstantiated claims regarding sustainability to our stakeholders. Approach We recognise that the physical impacts of climate change and the transition to a net zero economy can create significant financial risks for companies, investors and the financial system. HSBC may be affected by climate risks either directly or indirectly through our relationships with customers, which could result in both financial and non-financial impacts. Our climate risk approach aims to effectively manage the material climate risks that could impact our operations, financial performance and stability, and reputation. It is informed by the evolving expectations of our regulators. We continue to develop our approach and climate risk capabilities across our businesses, by prioritising sectors, portfolios and counterparties with the highest impacts, and recognise that this is a long-term iterative process. This includes increasing coverage and incorporating more mature data, climate analytics, frameworks and tools, and responding to emerging industry best practice and climate- related regulations. This also necessitates reflecting on how climate risk continues to evolve in the real world, and improving how we embed climate risk factors into strategic planning, transactions and decision making across our businesses. For example, our mergers and acquisitions process considers potential climate and sustainability-related targets, net zero transition plans and climate strategy, and how this relates to HSBC. Our climate risk approach is aligned to our Group-wide risk management framework and three lines of defence model, which sets out how we identify, assess and manage our risks. For further details of the three lines of defence framework, see page 146 . The tables below provide an overview of the climate risk drivers and thematic issues considered within HSBC’s climate risk approach. Climate risk – risk drivers Details Potential impacts Time horizons Physical Acute Increased frequency and severity of weather events causing disruption to business operations. – Decreased real estate values or stranded assets. – Decreased household income and wealth. – Increased costs of legal and compliance. – Increased public scrutiny. – Decreased profitability. – Lower asset performance. Short term Medium term Long term Chronic Longer-term shifts in climate patterns (e.g. sustained higher temperatures, sea level rise, shifting monsoons or chronic heat waves). Transition Policy and legal Mandates on, and regulation of products and services and/or policy support for low-carbon alternatives. Litigation from parties who have suffered loss and damage from climate impacts. Technology Replacement of existing products with lower emissions options. End-demand (market) Changing consumer demand from individuals and corporates. Reputational Increased scrutiny following a change in stakeholder perceptions of climate-related action or inaction. 250 HSBC Holdings plc Annual Report on Form 20-F Risk review Climate risk – thematic issues Net zero alignment risk Net zero ambition risk Failing to set or adapt our net zero ambition and broader business strategy in alignment with key stakeholder expectations, latest scientific understanding and commercial objectives. Net zero execution risk Failing to meet our net zero ambition due to taking insufficient or ineffective actions, or due to the actions of clients, suppliers and other stakeholders or due to other external factors. Net zero reporting risk Failing to report emissions baselines and targets, and performance against these accurately due to data, methodology and model limitations. Risk of greenwashing Firm Making inaccurate, unclear, misleading or unsubstantiated claims in relation to our sustainability commitments and targets, as well as the reporting of our performance towards them. Product Making inaccurate, unclear, misleading or unsubstantiated claims in relation to products or services offered to clients that have stated sustainability objectives, characteristics, impacts or features. Client Making inaccurate, unclear, misleading or unsubstantiated claims as a consequence of our relationships with clients or transactions we undertake with them, where their sustainability commitments or related performance are misrepresented or are not aligned to our own commitments. Our annual climate risk materiality assessment helps us to understand how climate risk may impact HSBC’s risk taxonomy. The assessment considers short-term (up to 2026), medium-term (2027-2035) and long-term (2036-2050) periods. The table below provides a summary of how climate risk may impact a subset of HSBC’s principal risks. In addition to this assessment, we also consider climate risk in our emerging risk reporting and scenario analysis (for further details, see ‘Top and emerging risks’ on page 38 ). Climate risk drivers Credit risk Traded risk Reputational risk 1 Regulatory compliance risk 1 Resilience risk Other financial and non- financial risk types Physical risk u u u u Transition risk u u u u u u 1 Our climate risk approach identifies thematic issues such as net zero alignment risk and the risk of greenwashing, which are most likely to materialise in the form of reputational, regulatory compliance and litigation risks. Climate risk management Key developments in 2024 Our climate risk programme continues to support the development of our climate risk management capabilities. The following outlines key developments in 2024 : – We have started to enhance our approach to managing net zero alignment risk in our wholesale portfolio, through developing portfolio steering capabilities and revenue assessments. – We enhanced our approach to assessing the impact of climate change on capital, focusing on credit, market and operational risk . – W e enhanced our internal climate scenario analysis, including through improvements to input data and models (e.g. for the power and utilities sector). For further details of scenario analysis, see page 253 . – We enhanced our approach to managing and mitigating the risk of greenwashing. – We developed climate risk guidelines for relationship managers to further embed climate risk considerations into credit risk assessments. While we have made progress, further work remains, including the need to develop additional metrics and tools to measure our exposure to climate-related risks. Governance and structure The Board takes overall supervisory responsibility for our ESG strategy, overseeing executive management in developing the approach, execution and associated reporting. The Group Chief Risk and Compliance Officer is the senior manager responsible for the management of climate risk under the UK Senior Managers Regime, holding overall accountability for the Group’s climate risk programme . The Sustainability Working Group, established in 4Q24, oversees and provides guidance on the Group-wide medium and longer-term sustainability strategy . The ESG Committee has oversight of ESG strategy, policy, material commitments and external disclosure. It is co-chaired by the Group CEO and the Group Chief Sustainability Officer. The Group Reputational Risk Committee provides recommendations and advice on significant reputational risk matters with impacts across the Group. The Environmental Risk Steering Meeting (formerly the Environmental Risk Oversight Forum) provides oversight of environmental risk and the risk of greenwashing. Equivalent forums have been established at a regional level. The Group Risk Management Meeting and the Group Risk Committee receive regular updates on our climate risk profile and the progress of our climate risk programme. For further details of the Group’s ESG governance structure, see page 72 . Risk appetite Our climate risk appetite forms part of the Group’s risk appetite statement and supports the business in delivering our net zero ambition effectively and sustainably. Our climate risk appetite statement is approved and overseen by the Board. Climate risk indicators are reported on a quarterly basis for oversight by the Group Risk Management Meeting and the Group Risk Committee. Policies, processes and controls We continue to integrate climate risk into policies, processes and controls across many areas of our organisation, and we will continue to update these as our climate risk management capabilities mature over time. For further details of how we manage climate risk across our global businesses, see page 58 . HSBC Holdings plc Annual Report on Form 20-F 251 Embedding our climate risk approach The table below provides further details of how we have embedded the management of climate risk across key risk types . For further details of our internal scenario analysis, see ‘Insights from climate scenario analysis’ on page 253 . Risk type Our approach Wholesale credit risk We have metrics in place to monitor the exposure of our wholesale corporate lending portfolio to six high transition risk sectors, as shown in the below table. As at 31 December 2024, the overall exposure to the six high transition risk sectors was 18 % of total gross carrying amount of wholesale loans and advances. These disclosures cover the whole of the value chain of the sector. The sector classifications are based on internal HSBC definitions and can be judgemental in nature. We use publicly available data as well as internal data to determine the appropriate sector. The classification of our clients into sectors is performed with inputs from subject matter experts. The sector classifications are subject to the remediation of ongoing data quality challenges and continuous improvement of our ongoing processes. The data will continue to be enhanced and refined in future years. Our relationship managers engage with our key wholesale customers, including those in higher transition risk sectors, through a transition engagement questionnaire (‘TEQ’). In 2024, the TEQ was expanded to cover all geographies. The TEQ helps to gather information and assess our wholesale customers’ business model alignment to a net zero transition and their exposure to physical and transition risks. We use the responses to the questionnaire to risk-assess our key wholesale customers. Our credit policies require that relationship managers comment on climate risk factors in credit applications for new money requests and annual credit reviews. Our credit policies also require manual credit risk rating overrides if climate is deemed to have a material impact on credit risk under 12 months if not already captured under the original credit risk rating. Key developments to our framework in 2024 included the expansion of the TEQ, as set out above, and additionally the development of climate risk guidelines for relationship managers to further embed climate risk considerations into credit risk assessments. Key challenges for further embedding climate risk into credit risk management relate to the availability of adequate physical risk data to assess impacts on our wholesale customers. Wholesale loan exposure to high transition risk sectors at 31 December 2024 Units Automotive Chemicals Construction, Contracting & Building Materials 5 Metals and mining Oil and gas Power and utilities Total 2024 Wholesale loan exposure as a proportion of total wholesale loans and advances 1,2,3,4 % 4 2 3 2 3 4 18 1  Percentages shown in the table also include green and other sustainable finance loans, which support the transition to the net zero economy. The methodology for quantifying our exposure to high transition risk sectors and the transition risk metrics will evolve over time as more data becomes available and is incorporated in our risk management systems and processes. We are aiming to develop the appropriate systems, data and processes to provide enhanced disclosures in future years. 2  Counterparties are allocated to the high transition risk sectors via a two-step approach. Firstly, where the main business of a group of connected counterparties is in a high transition risk sector, all lending to the group is included in one high transition risk sector irrespective of the sector of each individual obligor within the group. Secondly, where the main business of a group of connected counterparties is not in a high transition risk sector, only lending to individual obligors in the high transition risk sectors is included. The main business of a group of connected counterparties is identified by the industry that generates the majority of revenue within a group. Customer revenue data utilised during this allocation process is the most recent readily available and will not always align to our own reporting period. 3  The six high transition risk sectors make up 18% of total gross carrying amount of wholesale loans and advances to banks and customers of $596bn. Amounts include assets held for sale. 4  The sectors used to monitor the wholesale corporate lending portfolio set out in the table are different to the scope of sectors we focus on for financed emissions targets and reporting. The latter focus on the most carbon-emissive sectors, and the parts of the value chain where we believe the majority of emissions are produced to help reduce double counting. These sectors are set out within 'Financed emissions' section on page 48. 5  Construction, Contracting & Building Materials has been renamed from Construction & Building Materials. The name has been revised to clarify that  parties who build assets for end clients, investors and landowners, which should be included in this sector for their associated construction risks. Retail credit risk Climate risk may impact retail credit risk through an increase in credit losses on our global retail mortgage portfolio, primarily due to the impact of physical risk. Our current climate assessment, in line with last year’s assessment, indicates that our retail mortgage portfolio remains resilient to climate risk, with impact severity muted at a portfolio level given that our book has diversified property locations, with insurance coverage being a key loan covenant. Our retail credit risk mortgage policy requires that every mortgage market conducts an annual review of their climate risk management framework, to ensure they remain fit for purpose. Within our mortgage portfolios, properties or areas with potentially heightened physical risk are identified and assessed locally with exposure monitored using risk indicators. A reduction in property value, higher insurance costs and insurance availability are potential future negative financial impacts for properties with higher physical risk. UK retail mortgage book The UK is our largest mortgage market, and as of November 2024, made up 46.7% of our global mortgage portfolio. Our ESG Data Pack includes our climate risk exposures for this portfolio across regions. The maturity profile of the UK mortgage book shows that the average remaining contractual term in the UK is 21.8 years. However, with some customers undertaking refinancing options during this term, the average term of the mortgage can be reduced to between five and eight years. This means our strategic approach to climate risk considers both present day risk and long-term forward-looking risk, given that customers may choose to remain with us over the lifespan of the loan. Please see the result of our climate scenario analysis on page 255 . Physical risk For the UK mortgage book, flood data is sourced from a third-party data provider, and considers the UK only, covering present day risk from tidal, river and surface water/flash flooding baselined to 2021. A flood risk rating score of 0-100 is provided with 100 being highest risk. Flood risk scores are based on the average annual loss generated using flood hazard frequency, flood depths and based on the probability of flooding events occurring. For the UK mortgage book, flood data is available for 93.7% of the mortgage book of which 0.9 % is at a very high risk of flooding, with 2.7 % of the book at a high risk of flooding. Geographically, by lending balances, our highest risk exposures are the Greater London and South-East regions. During 2024 we changed our flood risk classification of very high risk to align to the provider’s flood score bands. The postcode data used in the regional flood table has also been refined to incorporate a more granular approach. This has helped to aid the regional allocation and as a result the 2023 data has been restated to reflect this. 252 HSBC Holdings plc Annual Report on Form 20-F Risk review Risk type Our approach Retail credit risk (continued) Transition risk We monitor the energy performance certificate (‘EPC’) ratings of individual properties from A (highest efficiency) through to G (least efficient) as EPCs are commonly used as an indicator of transition risk in the UK mortgage book. All UK rental properties must have a minimum EPC rating of E. It is broadly expected that the rental market will need to transition all rented properties to an EPC rating of C by 2030. We track EPC ratings for both owner occupied (‘OO’) and buy to let (‘BTL’), which are 96.6% of the portfolio and 3.4% of the portfolio by lending value, respectively. The EPC profile is broadly improving (to higher bands) but is evolving slowly, and the pace is dependent on regulation. Where we do not hold a current EPC, we have included expired EPCs for 2024. EPCs are a reliable proxy as energy efficiency ratings gradually improve over time. UK residential mortgages tenor (remaining mortgage term by balance ($m)) as at 31 December 2024 1 Tenor Remaining mortgage balance ($m) <1 year 357 1 to 5 years 3,589 >5 years 159,452 Weighted average of remaining mortgage term (years) 21.8 There has been an increase observed across the market in the number of people seeking new mortgages of up to 35 years or more due to rising house prices, higher interest rates and cost of living challenges although the average life of an HSBC mortgage loan is approximately between five and eight years due to refinancing. Despite this, our strategic approach to climate risk considers present day and long-term risk given customers may remain on our book for the whole loan term. For further details of flood risk and the EPC breakdown of our UK retail mortgage portfolio, see our ESG Data Pack at www.hsbc.com/esg. 1  The table includes instances where individual properties have multiple associated accounts and mortgage balances. These are aggregated to a property level and the longest term remaining is taken as the tenor. UK mortgage balances presented here are not directly reconcilable to other tables in the document due to differences in the basis of preparation. Treasury risk Climate risk may impact Treasury risk through increased regulatory requirements and from changes to customer behaviours, which may result in increased deposit outflows. As part of our ICAAP, we assess the impact of climate change on capital, focusing on credit risk, market risk and operational risk and perform sensitivity analysis on our Internal Capital Planning Buffer. As part of our ILAAP, we assess how climate risk could impact the Group liquidity position. As part of our Internal Climate Scenario Analysis (‘ICSA’), we have developed an exploratory scenario to understand the impact of a potential greenwashing event on our deposits. For further details, please see page 254 . In October 2024 we published our Green Financing Framework, in alignment with the International Capital Market Association Green Bond Principles. This framework promotes transparency, forming part of our sustainability strategy and helping to further our aim of supporting our clients in transitioning to a net zero future. Pension risk Climate risk could result in additional costs within our defined benefit pension plans, due to changes in the pension plans’ investment performance or through having to meet evolving regulatory requirements. Our global policies on the oversight of pension investments explicitly reflect climate considerations. Training has been provided to local management on how to consider ESG risks in pension investments. We also conduct an annual exercise to estimate the exposure of our largest pension plans to climate risk. Insurance risk Climate risk could result in losses on our insurance assets due to changes in macroeconomic parameters. We develop an annual plan to support the management of climate risk. This plan includes enhancing our stress test modelling capabilities to assess the solvency resilience of our insurance entities under prescribed climate scenarios. Traded risk Climate risk may result in trading losses due to increases in market volatility and widening spreads from the macro and microeconomic impacts of transition and physical risk. We have implemented climate risk limits in global and regional trading mandates to monitor exposure to climate-sensitive sectors and countries across different asset classes in the Markets and Securities Services (‘MSS‘) business. Our market risk policies include specific climate risk control requirements, which ensure that our climate risk limits and utilisations are monitored in the same way as market and traded credit risk exposures. We conduct monthly stress testing to understand the vulnerabilities of our trading portfolio to various climate scenarios, which are refined on an annual basis, with the results reported to global and regional senior management. Reputational risk We manage the reputational impact of climate risk through our broader reputational risk framework, supported by our sustainability risk policies and metrics. Our sustainability risk policies form part of our broader risk management framework and are important mechanisms for managing risks, including delivering our net zero ambition. Our thermal coal phase-out and energy policies aim to drive down greenhouse gas emissions while supporting a just transition. Our global network of sustainability risk managers provides local policy guidance to relationship managers for the oversight of policy compliance, and in support of implementation across our wholesale banking activities. For further details of our sustainability risk policies, see page 59 . We have developed risk appetite metrics to monitor our performance against our financed emissions targets. For further details of our targets, see page 50 . Regulatory compliance risk Regulatory Compliance is responsible for the oversight and management of climate-related risks that could cause breaches of our regulatory duties to customers and inappropriate market conduct. We have updated our policies to incorporate considerations for ESG and climate risks, particularly in relation to new and ongoing product management, sales outcomes, and product marketing. To support our key policies, we have also enhanced the underlying control frameworks and processes. This includes the integration of greenwashing risk and controls considerations in the design of new products and changes to them, as well as in relation to marketing materials. From a product sales perspective, we have established key control principles, encompassing the sales journey design, training and competence, supervision, sales quality, and governance. We operate an ESG and climate risk working group tasked with tracking and monitoring the integration of ESG and climate risk stewardship across our operations. This group also monitors regulatory and legislative developments related to the ESG and climate agenda. HSBC Holdings plc Annual Report on Form 20-F 253 Risk type Our approach Resilience risk Resilience risks may potentially crystallise through physical climate risk impacts to our buildings supporting service provision, or through physical and/or transition disruption to our third-party supply chain relationships. We have developed metrics to assess how physical risk may impact our critical properties and to monitor progress against our own operations’ net zero ambitions. Our resilience risk policies are subject to continuous improvement to remain relevant to evolving climate risks. Model risk Model risk in the ESG context refers to the uncertainties and complexities inherent in the modelling of the financial impact translation of climate- related changes and scenarios. Climate risk models are used for climate scenario analysis, risk management, and emissions reporting among other use cases. Climate risk modelling is at a nascent stage, with challenges – including limitations in data availability, consistency and quality – shared across the industry. We have developed model risk procedures that set out the minimum control requirements for identifying, measuring and managing model risk for climate-related models. All the identified climate-related models are subject to HSBC’s model lifecycle controls and policy. Financial reporting risk Climate risk impacts financial reporting risk through increased reporting requirements. The scope of financial reporting risk includes oversight of the accuracy and completeness of ESG and climate reporting. Our risk appetite statement states that HSBC has no appetite for material errors in ESG disclosures in our key markets, balanced with the evolving requirements and data availability. In addition, our internal controls incorporate requirements for addressing the risk of misstatement in ESG and climate reporting. To support this, a framework is used to provide guidance on control implementation over ESG and climate reporting and disclosures, which includes areas such as process and data governance, and risk assessment. Challenges Key challenges include: – the diverse range of internal and external data sources and data structures needed for climate-related reporting, which introduces data accuracy and reliability risks; – data limitations on customer assets and supply chains, and methodology gaps, which hinder our ability to assess physical risks accurately; – industry-wide data gaps on customer emissions and transition plan and methodology gaps, which limit our ability to assess transition risks accurately; and – limitations in our management of net zero alignment risk due to known and unknown factors, including the limited accuracy and reliability of data, emerging methodologies, and the need to develop new tools to better inform decision making. Insights from climate scenario analysis Climate scenario analysis supports our strategy by assessing our potential exposures to risks and vulnerabilities under a range of climate scenarios. It is one of the key tools used to support the evaluation of portfolios in line with our net zero ambition. The scenarios developed for climate scenario analysis are designed to examine HSBC’s financial performance and capital resilience across a wide range of potential climate outcomes. They are sufficiently diverse to enable HSBC’s key physical and transition risk vulnerabilities to be explored. For further details about these risks, see ‘Overview under Climate risk’ on page 249 . The analysis supports our approach to supporting our clients in the transition to net zero through assessing, where available, client level financial and credit risk metrics, and identifying where further analysis and climate risk focus is required. From a risk management perspective, it enhances our understanding of the various transition and global warming pathways that may unfold and their plausibility, and informs how we manage implications to credit risk and revenues. To meet our global regulatory needs, we produced several climate stress tests for regulators around the world, including the Hong Kong Monetary Authority (‘HKMA’). We continue to enhance our climate scenario analysis exercises so that we can have a more comprehensive understanding of climate headwinds, risks and opportunities to support our strategic planning, actions and risk management. Use of climate scenario outputs to support how we assess our climate resilience As we navigate the transition to net zero, climate scenario analysis is used to support core banking processes such as client-facing activities, finance activities and risk management. From a financial and capital planning perspective, we use climate scenario analysis to support the Group’s internal capital adequacy assessment process (‘ICAAP’) to understand the amount of capital the Group should hold to meet identified climate risks, including integration of climate impacts into the Group’s internal stress testing exercises. In addition, it informs strategic planning by providing insights on the size and timing of financial impacts, and IFRS 9 loss provisioning to ensure climate risks are adequately provisioned for in our balance sheet, such as expected credit losses (‘ECL’). Climate scenario analysis also supports portfolio steering frameworks set up to help shape our Global Businesses strategy to meet net zero ambitions. Portfolio steering has been developed to enable the Group to manage sector portfolios in line with its net zero by 2050 ambition, while managing risks and capturing commercial opportunities. This enables HSBC to manage financed emissions within our appetite at portfolio level. Climate scenario analysis supports the Group to assess the impact of our net zero ambitions on our revenue and profitability to help strengthen our understanding of business model risk, and supports building the organisation’s awareness of climate change risk, informing our climate risk appetite. Our climate scenarios Our 2024 scenarios considered the key regions in which we operate and were designed to assess the impact on our balance sheet across three distinct periods: short term up to 2026; medium term from 2027 to 2035; and long term from 2036 to 2050. Building on prior years, the 2024 climate scenario analysis exercise benefited from new scenarios, including: the introduction of a new Below 2 Degrees scenario that is aligned with the Paris Agreement goal of limiting global warming to below 2 degrees by the end of the century; and a bespoke near-term Severe Climate Stress scenario; and from updated climate scenario assumptions, which include increased sector and geographical granularity for all scenarios. The 2024 climate scenarios range from a combination of highest physical risk to highest transition risk as follows: 254 HSBC Holdings plc Annual Report on Form 20-F Risk review – Downside Physical Risk scenario : with significant global warming and physical risk events, assumes climate action is limited to currently implemented governmental policies, new decarbonisation policies fail to get introduced and global warming continues. – Severe Climate Stress scenario : a near term disorderly climate action, triggered by unprecedented global weather events that lead to a short, sharp economic recession. In this scenario, extreme physical events pivot the public view on climate and the transition to net zero accelerates. This extreme stress scenario is used to test HSBC’s capital resilience to extreme and very unlikely events, combining downside climate and macroeconomic risks with a horizon ending in 2030. – Current Commitments scenario : assumes a slower-than-required transition to a net zero economy, reflective of the current pace of transition, which assumes that climate action is limited to current governmental committed policies, including already implemented actions. This scenario helps us determine the actions we need to take to reach our net zero ambition while operating in a world that is not on a net zero by 2050 pathway. – Below 2 Degrees scenario : a Paris Agreement-aligned scenario where net zero is achieved, but beyond the 2050 scenario horizon, as it assumes an orderly and gradual rise in the stringency of climate policies over time. – Delayed Transition Risk scenario : in which action is delayed until 2030 but is then stringent and rapid enough to meet net zero by 2050, accentuating disorderly transition risks. We have chosen these scenarios to provide a holistic view that supplements the Group’s current and future strategic thinking. The 2024 climate scenarios are underpinned by well-established industry bodies such as the Network for Greening Finance Phase IV, the Intergovernmental Panel on Climate Change (‘IPCC’) and International Energy Agency (‘IEA’), which are further enriched for additional granularity, ensuring consistency with industry-recognised work and reflecting the latest climate policy and economic outlook. +Physical Risk                                                                                          Transition Risk+ Characteristics of our scenarios Scenarios Downside Physical Risk Severe Climate Stress Current Commitments Below 2 Degrees Delayed Transition Risk Scenario outcomes Rise in global temperatures by 2100 (vs pre-industrial levels) 4.2°C N/A 2.4˚c 1.7˚c 1.6˚c End of horizon 2050 2030 2050 2050 2050 Underlying assumptions based on global averages Global climate actions Implemented policies only Rapid & disorderly transition All currently pledged policies Gradually rising stringency of policies Rapid & disorderly transition Assumed pace of technology change and adoption Slow change Accelerated progress Limited progress Moderate change Accelerates from 2030 Assumed socioeconomic impact Very high Very high Moderate High Very high Assumed carbon price ($/tCO 2 ) 2030 2050 2030 2030 2050 2030 2050 2030 2050 9 8 326 30 78 46 136 30 558 Scenario risk characteristics Climate risk Physical p Higher p Higher u Moderate q Lower q Lower Transition q Lower p Higher u Moderate p Higher p Higher Group outputs and our methodology Climate scenario analysis allows us to model how different potential climate pathways may impact the resilience of our customers and our portfolios. Our models continue to incorporate a range of climate-specific metrics that could potentially impact our customers, including expected production volumes, revenue, costs and capital expenditure . We assess how these metrics interplay with economic factors, such as carbon prices, which represent the cost effects of climate-related policies that aim to discourage carbon-emitting activities and encourage low-carbon solutions. The expected result of higher carbon prices is a reduction in emissions as high-emission activities become uneconomical. We analyse how climate risks impact principal risk types within our organisation, including credit and traded risks, non-financial risks and pension risk. While the following sections focus primarily on credit risk, we also set out how we continue to enhance and embed impacts from traded risk, pension risk and non-financial risks. For our wholesale lending portfolio, the scope of our 2024 analysis prioritised high-emitting sectors, and we focused on delving deeper into a selection of high transition risk sectors. We have enhanced our climate models for the power and utilities and automotive sectors, while regional deep dives focused on select high risk and material sectors. The financial metrics used in our models included credit rating and client cashflow impacts to derive ECLs and risk-weighted assets (‘RWAs’), emissions and balance sheet impacts. For our retail mortgage portfolio, our analysis focused on key regions and physical risk factors, including property locations, perils and insurance coverage. The internal climate scenario analysis exercise showed that losses are influenced by their exposure to a variety of climate risks under different climate scenarios. When assessing our long-term scenarios, climate-related losses are expected to remain minimal in the short term and likely to increase in the medium and longer time horizon, driven by the transition to a net zero economy and greater physical risk impacts. Under the defined climate scenarios, transition risk impacts are predominantly driven by credit risk losses and are expected to create a drag on the Group’s profitability across all scenarios. In the Below 2 Degrees scenario, we expect to see an increase in projected credit losses that materialise in the medium term if early action to transition to net zero is taken. Credit losses are projected to increase in the medium to long term if the transition to net zero is delayed, which was underlined within the Delayed Transition scenario, where climate action begins later and is therefore expected to be more rapid and disruptive for our customers who will have less time to restructure their business models and reduce their carbon emissions. The risks and opportunities will need to be carefully balanced, and b y building a more climate-resilient balance sheet, we can reduce impairment risks and improve longer-term stability. Increased lending opportunities exist during an accelerated transition period such as those expected in the Below 2 Degrees, Delayed HSBC Holdings plc Annual Report on Form 20-F 255 Transition Risk and Severe Climate Stress scenarios, noting that these scenarios also experience the risk of heightened impairments in the latter stages of their time horizons. Modelling limitations We continue to look for ways of enhancing our methodology to improve the effectiveness of our climate scenario analysis by incorporating lessons learnt from previous exercises and feedback from key stakeholders, including regulators. There are industry-wide limitations, particularly on data availability, although our models are designed to produce outputs that can support our assessment of the level of our climate resilience. Climate scenario analysis requires considerable amounts of data and we are continuing to enhance coverage of our exposures. Where data is only available for a subset of our counterparties, we extrapolate the results observed where available to the wider population or dataset. We do not capture the second order impacts of climate risk exposures within our modelling approach, such as impacts on our counterparties from their supply chains. For a broad overview of the models that we use for our climate scenario analysis, as well as graphs that show how global carbon prices and carbon emissions will differ under our climate scenarios, see our ESG Data Pack at www.hsbc.com/esg . How climate change is impacting our wholesale lending portfolio The 2024 climate scenario analysis exercise was designed to examine the climate risks and vulnerabilities of corporate counterparties across high transition risk sectors under climate scenarios of varying severity. Specifically, we measured the modelled effect on our projected ECL change over the short-, medium- and long-term horizons under each scenario. This was compared to a counterfactual scenario that excludes climate change impacts to isolate the climate only changes in ECL. Counterparty specific analysis was conducted for those corporates where transition risk is elevated either from an overall sectoral perspective or in response to specific jurisdictional policies, which require HSBC to respond to regulatory requirements. This analysis was conducted to generate more granular counterparty-specific insights relative to previous exercises. The impact on our wholesale portfolios is demonstrated by the table below, which shows the size of exposures by sector in 2024 and the cumulative change in ECL compared with a counterfactual scenario (expressed as a multiple). The size of our exposure in each sector is represented by our exposure at default (‘EAD’) relative to one another. Under the Current Commitments scenario, our modelled outputs predict that ECL will not be more than 25% higher than the counterfactual scenario for any of the assessed sectors. The highest impacts are seen in the chemicals, construction and building materials, power and utilities and agriculture and soft commodities sectors. Greater climate risks would crystallise in the Below 2 Degrees scenario with its gradually increasing transition to net zero, driven by pockets of customers in higher-emitting sectors that are continuously exposed to larger climate-related losses. The analysis shows credit risk losses continue to be driven by counterparties in certain high transition risk sectors where the Group’s largest exposures are concentrated, such as construction and building materials, chemicals, and power and utilities sectors. In these sectors we have counterparties, such as steel or cement manufacturers who have high emissions in their processes and in their downstream or upstream value chains, who may also experience cost pressures due to carbon-tax pass-through rates. Furthermore, harder to abate sectors contain a high proportion of customers without climate transition plans. We have continued to incorporate information from our customers’ transition plans to consider how our clients and their sectors will be impacted. For the oil and gas sector, we see counterparties having relatively lower projected climate-related losses on a consistent basis, which is highly dependent on the assumption of continued government support and commitment to the execution of their complex transition plans. In the case of the Severe Climate Stress scenario, we observed that impacts would be more severe and focused than other climate scenarios in the short- to medium-term. These impacts were driven by the underlying severity of the scenario, particularly due to the sharp increase in stricter climate policies and therefore carbon prices that adversely affect the debt servicing capabilities of companies, and acute extreme weather events. We have the opportunity to ease potential negative impacts as transition risks increase, by supporting our customers to diversify into more renewable and greener revenue streams and invest in emission-reducing technologies. Impact on wholesale lending portfolios Wholesale sectors Exposure at default (EAD) 3 2023 ECL increase 1, 2 Climate Scenarios Current Commit ments Below 2 Degrees Peak 4 Short term Medium term Long term Conglomerates and industrials n Chemicals n Construction, contracting and building materials n Power and utilities n Oil and gas n Automotive n Land transport and logistics n Agriculture & soft commodities n Metals and mining n Aviation n Marine n 1    Increase in cumulative ECL compared with counterfactual over short-, medium- and long-term time horizons, expressed as a multiple. 2    Values in the key represent the multiplier of increase in ECL, i.e. <1.1 equates to less than 10% increase over the counterfactual (or equivalent proxy which is most representative of baseline for the sector). 3    The size of the bubbles is a visual representation of the portfolios, in terms of EAD, relative to one another. 4    The peak multiplier reflects the maximum increase in ECL for the Current Commitments scenario over the forecasted scenario time horizon. Lower Impact <1.1x <1.25x <1.5x <1.75x <2.25x <2.75x Higher Impact How climate change is impacting our retail mortgage portfolio As part of our 2024 climate scenario analysis exercise, we completed a detailed climate risk assessment for the UK, US, Singapore and Malaysia. In our 2023 exercise we also assessed Hong Kong, Australia and mainland China. Our coverage represented 91% of the balances in our global retail mortgage portfolio, across the two exercises. For our Hong Kong portfolio, we completed a short- and long-term scenario analysis exercise during late 2023 and early 2024 at the request of the HKMA. Our analysis shows that over the longer term, we expect minimal losses to materialise when considering the Current Commitments scenario. Although the severity of climate perils is expected to worsen over time, our overall losses remain low under a severe Downside Physical Risk scenario. 256 HSBC Holdings plc Annual Report on Form 20-F Risk review In 2024, we continued to develop our approach to assess impacts from severe acute physical risk events with an exploratory new near- term Severe Climate Stress scenario. Within all scenarios, loss impacts are assessed by considering borrowers’ ability and willingness to service their debts, including customers’ affordability incorporating increased debt servicing costs and the impact on property valuation. When quantifying impacts from climate events, insurance availability is a key mitigation of loss. Our scenario analysis methodology was enriched further in 2024 by enhancing insurance availability and assumptions related to insurance premium costs. This approach has been benchmarked with the insurance industry, based on a calculation of average annualised loss. When assessing impacts from climate risk, we note that there are several limitations as mentioned previously. Specifically for our retail mortgage portfolio, these limitations include: – Lack of historical experience and limited benchmark data, especially around loss quantification, there is strong reliance on external peril models and vulnerability assumptions. – Accuracy of peril projection data relies upon the exact coordinates of a property. The geocoding process can lead to inaccurate results for some properties where address data is incomplete or in regions where geocoding services are less accurate. – Additionally, a key assumption in quantifying the impacts from perils is the level of resilience a particular building archetype has, for example age of construction, material or relevant building standards. This information is often limited, and assumptions are made. Projected peril risk Perils are assessed that are material to each region and where we have the external peril data available. Flooding has the potential to be the peril having the largest impact on our portfolio. When assessing the risk in the portfolio we assess both the inherent and residual risks. An inherent view considers property location, whereas the residual risk incorporates the resilience a particular building has to the peril impacts. The inherent flood risk is shown below, and outlines the percentage of properties and their corresponding flood depths predicted in a 1-in-100 year event. In 2024, we provided further granularity in our flood risk table by reporting the proportion of properties that we would expect to be at no risk of flooding during a 1-in-100 year severity flood event. In the 2024 exercise under the Baseline flood risk 1-in-100 year event for the UK, 92.1% of properties have no forecasted flood risk (2023: 92.4%), as such c.8% of properties are situated in areas that could be exposed to varying severities of flooding, however there are often mitigating factors, such as the floor level of a building, that reduce risk. The table below outlines the flood depths that the properties would be exposed to under different climate scenarios. Exposure to flooding (%) 1 Climate Scenarios Markets Flood depth (metres) Baseline flood risk 1-in-100 year event 2, 3 Current Commitments Downside Physical Risk 2024 2050 2050 UK 0 92.1 91.5 91.6 0-0.5 7.8 8.3 5.2 0.5-1.5 0.1 0.2 2.8 >1.5 0 0 0.4 Hong Kong 4 0 67.9 64.0 64.0 0-0.5 16.9 17.0 15.5 0.5-1.5 15.1 18.9 20.4 >1.5 0.1 0.1 0.1 1    Severe flood events include river and surface flooding and coastal inundation. The table compares 2050 snapshots under the Current Commitments and Downside Physical Risk scenarios with a baseline view in 2024. We do expect to see changes to our flood depth distributions as climate risk data is refreshed. 2    Baseline flood risk is the flood risk for a 1-in-100 year event, based on current peril data. 3  2024 relates to the year in which the assessment was conducted. The baseline data is based on the mortgage portfolio as at 31 December 2023 and 2022, for the UK and Hong Kong respectively. 4    In 2022, 94% of properties in Hong Kong (where HSBC provides mortgages) are apartments located on the second floor or above. For properties located in areas exposed to flooding, direct damages would be mitigated against, with only common ground floor areas potentially impacted. Through our climate scenario analysis, we recognise acute impacts are more severe than long-term chronic impacts. We observed this when assessing the outputs under the Severe Climate Stress scenario, which focuses on prescribed physical risk events rather than recognising the probabilistic nature of these perils, which are considered very unlikely by 2030. Overall, our retail mortgage portfolio remains resilient to climate risk and impact severity is muted at portfolio levels as our book has diversified property locations with insurance coverage being a key loan covenant. How climate change is impacting our commercial real estate portfolios In our climate scenario analysis exercise, we assess our commercial real estate (‘CRE’) customers’ vulnerability to various perils, including flooding and cyclonic wind exposures. Our CRE portfolio is globally diversified with larger concentrations in Hong Kong, the UK, France and the US. In our 2024 exercise we carried out a detailed assessment of our UK portfolio. In addition, we performed a bespoke assessment of our Hong Kong portfolio via the HKMA climate scenario analysis exercise. Geographical location is a key determinant in our exposure to potential physical risk events, which can lead to higher ECLs due to the cost of repairing damage as well as the longer-term impacts on property valuations. These can lead to higher defaults and consequential losses in areas where physical risk events are gradually increasing in frequency and severity. HSBC Holdings plc Annual Report on Form 20-F 257 The table below shows the proportion of our CRE portfolio exposed to specific physical perils in our key markets. Exposure to peril (%) 1 Market Exposure at default (EAD) 2 2023 Coastal inundation Cyclone wind 3 Surface water flooding Riverine flooding Forest Fires Hong Kong n 1 100 12 10 2 UK n 17 0 9 8 0 1    Proportion of our CRE portfolio exposed to specific physical perils in the Downside Physical Risk scenario as at 2050. 2    The size of the bubbles is a visual representation of the portfolios, in terms of EAD, relative to one another. 3    Assumes all properties are impacted by some damage due to extreme wind, but the intensity of impact is very insignificant and highly muted in some regions, represented by (~0%) exposure to this peril. As assessed through our internal climate scenario analysis exercise, impacts on our UK portfolio are largely driven by chronic physical risk, related mainly to coastal and tidal river flooding due to a rise in sea level. The UK analysis explored acute weather events, such as extreme rainfall accompanied with storm winds that may lead to further property damage and business disruption. We assessed the impacts on transition risk for the UK portfolio, mainly focused on the impact of retrofitting costs on property valuations due to meet minimum energy performance certificate (‘EPC’) requirements for properties having low energy efficiency. Sen sitivity analysis has been conducted on EPC upgrade costs that would be higher in a faster transition scenario due to the accelerated pace of upgrades. In the Below 2 Degrees scenario, we assume actions where non-domestic properties are required to achieve an EPC rating of B by 2040. To meet these minimum standards, counterp arties in our portfolio would potentially need to retrofit their properties or risk having stranded assets with a material valuation haircut. The table below demonstrates the impact on our CRE portfolio for specific markets, including the three biggest markets – Hong Kong, the UK and the US. This shows the increase in cumulative ECL over different time horizons, under each scenario, compared with a counterfactual scenario (expressed as a multiple). Impact on our commercial real estate portfolio Climate Scenarios ECL increase 1,2 Short-term Medium-term Long-term Below 2 Degrees Downside Physical Risk Lower Impact <1.1x <1.25x <1.5x <1.75x <2.25x <2.75x Higher Impact 1    Increase in cumulative ECL compared with counterfactual over short, medium and long-term time horizons, expressed as a multiple. 2    Values in the key represent the multiplier of increase in ECL, i.e. <1.1 equates to less than 10% increase over the counterfactual which excludes climate change impacts. Geographically, our most significant exposure is in Hong Kong, which was assessed in a bespoke exercise. This region has material physical risk exposure to wind and flooding due to strong tropical cyclones. However, in the HKMA exercise, a large proportion of CRE exposures were not materially impacted, with less than 0.5% of properties suffering from damage greater than 3% of their asset values per year. The properties are protected from cyclonic winds and flooding due to high building standards, high elevation, and protection from coastal defences in this region, such as rainstorm impacts being muted due to the positive impact of new drainage tunnels and tanks in the city. Overall, and in line with our assessment in prior years, our analysis shows our commercial real estate portfolio remains resilient to climate risk. Under our Below 2 Degrees scenario, impact severity is muted at the portfolio level as our counterparties have diversified property portfolios with insurance coverage being a key loan covenant. Under the Downside Physical Risk scenario, the impacts were observed to be heightened due to significant global weather events. We also observed impacts in the Severe Climate Stress scenario are more significant, which were driven by coastal inundation and flooding events. Our CRE modelling is subject to similar limitations as our retail mortgage climate models in regard to lack of historical data, reliance on exact building co-ordinates and information on building resilience. How we assess climate risk impacts on other risk types We use climate scenario analysis to assess the impacts on other risks including traded risk, sovereign credit risk, pension risk and non- financial risks. In 2024 for traded risk, we explored the potential fair value impacts of climate risks on our trading and banking portfolios across multiple scenarios, covering physical and transition risk climate drivers, and capturing short and long-term impacts. The analysis considered all relevant asset classes including interest rates, exchange rates, credit and equities, with market shocks capturing the impact of abrupt increases in carbon prices or physical risk perils resulting in structural economic impacts that affect the productivity of high-risk sectors at a country level . For s overeign credit risk we continued to assess the impacts of climate risks on sovereign debt under the different climate scenarios. For p ension risk we modelled balance sheet and income statement projections for the main defined benefit pension plans. This year’s exercise focused on assessing the impact of a severe physical risk shock using the Severe Climate Stress scenario. For n on-financial risk we assessed the potential impacts of a misstatement in our ESG and climate-related reporting and disclosures. For regulatory compliance risk, we assessed the potential impacts of greenwashing in the manufacturing and marketing of ESG funds and in the marketing of sustainability-linked bonds. For resilience risk, we assessed the potential impacts on our critical real estate from climate change, including temperature extremes, drought, water stress, wildfire, tropical cyclones and flooding. Understanding the resilience of our properties Climate change poses a physical risk to the buildings that we occupy, potentially impacting our operational resilience. This includes our offices, retail branches and data centres, both in terms of loss and damage, and business interruption. We measure the impacts of climate and weather events on our buildings on an ongoing basis using historical, current and scenario- modelled forecast data. In 2024, there were 40 major storms that had a minor impact on three of our buildings. We use stress testing to evaluate the potential impact on our owned or leased premises. Our 2024 scenario stress test analysed how nine climate change-related hazards – comprising coastal flooding, fluvial flooding, pluvial flooding, soil movement due to drought, temperature extremes, water stress, wildfires, landslides and tropical cyclones – could impact 2,719 of our properties . The 2024 test modelled climate change with the Intergovernmental Panel on Climate Change (‘IPCC’) Taking the Highway scenario (SSP5-8.5), which projects that the rise in global temperatures will likely exceed 4°C by 2100. It also modelled a less severe IPCC Middle of the Road scenario (SSP2-4.5), which projects that global warming will likely be limited to 2°C. 258 HSBC Holdings plc Annual Report on Form 20-F Risk review Key findings from the Taking the Highway scenario included that by 2050, 15 of our 2,719 properties will have a high potential for impact due to climate change, with insurance-related losses estimated to be in excess of 10% of the insured value of the buildings . A key finding from the Middle of the Road scenario showed that the total number of buildings at risk reduced from 15 to 9. The highlighted facilities are still at risk from the same perils of extreme temperature and water stress by 2050. This forward-looking data along with historical data helps inform real estate planning. We will continue to enhance our understanding of how extreme weather events impact our buildings portfolio as climate risk assessment tools improve and evolve. We buy insurance for property damage and business interruption and consider insurance as a loss-mitigation strategy depending on its availability and price. We regularly review and enhance our building selection process and global engineering standards and will continue to assess historical claims data to help ensure our building selection and design standards address the potential impacts of climate change. Conclusion to insights from climate scenario analysis Climate scenario analysis is an evolving process and there are data and modelling limitations due to the information and expertise available in the current market. Physical risk modelling is nascent and currently we are only able to model direct climate peril impacts on real estate. Limited considerations are made to the pricing implications of new green products and clients that are likely to emerge over the time horizon. We will continue to enhance the use of climate scenario analysis in our business decision making, supporting our climate resilience. We have started to explore the impacts on our portfolio from a nature risk perspective and expect the model and capabilities to evolve over time. Resilience risk Overview Resilience risk is the risk of sustained and significant business disruption from execution, delivery, physical security or safety events, causing the inability to provide critical services to our customers, affiliates and counterparties. Resilience risk arises from failures or inadequacies in processes, people, systems or external events. Resilience risk management Key developments in 2024 During the year, we conducted several initiatives to keep pace with geopolitical, regulatory and technology changes, and strengthened the management of resilience risk. – We continued to recognise that our customers were impacted by service disruptions, responded to these urgently and aimed to recover with minimum delay. We continued to initiate post- incident review processes to prevent recurrence. Where we identify that investment is required to further enhance the Group’s operational resilience capabilities, findings are fed into the Group’s financial planning, helping to ensure we continue to meet the expectations of our customers and our regulators. – We continued to monitor markets affected by the Russia-Ukraine war and the conflict in the Middle East, as well as other geopolitical events, for any potential impact they may have on our colleagues and operations. – We provided analysis and easy-to-access risk and control information and metrics to enable management to focus on non- financial risks in their decision making and appetite setting. – We further strengthened our non-financial risk governance and senior leadership. We prioritise our efforts on material risks and areas undergoing strategic growth, aligning our location strategy to this need. We also remotely provide oversight and stewardship, including support of chief risk officers, in territories where we have no physical presence. Governance and structure The Enterprise Risk Management target operating model provides a globally consistent view across resilience risks, strengthening our risk management oversight while operating effectively as part of a simplified non-financial risk structure. We view resilience risk across nine sub-risk types related to: technology and cybersecurity risk; third-party risk; transaction processing risk; business interruption and incident risk; data risk; change execution risk; building unavailability risk; protective security risk and workplace safety. Risk appetite and key escalations for resilience risk are reported to the Non-Financial Risk Management Board, chaired by the Group Chief Risk and Compliance Officer, with an escalation path to the Group Risk Management Meeting and Group Risk Committee. Key risk management processes We operate processes to support our resilience according to our Risk Management Framework. Our operational resilience is our ability to anticipate, prevent, adapt, respond to, recover, and learn from internal or external disruption, continuing to provide Important Business Services to customers and clients, while minimising impact on the wider financial system when disruption occurs. This is achieved via day-to-day oversight and periodic and ongoing assurance, such as deep dive reviews and controls testing, which may result in challenges being raised to our businesses and group governance by our risk stewards. We have invested to improve response and recovery strategies for our important business services and Important Group business services to meet regulatory and customer expectations. Business operations continuity We continue to monitor the Russia-Ukraine war and the conflict in the Middle East, and remain ready to take measures to ensure business continuity in affected markets should the situations require. There have been no related significant disruptions to our services, although businesses and functions in nearby markets continually review their plans and responses to minimise any potential impacts. HSBC Holdings plc Annual Report on Form 20-F 259 Regulatory compliance risk Overview Regulatory Compliance risk is the risk associated with breaching our duty to clients and other counterparties, inappropriate market conduct (including unauthorised trading) and breaching related financial services regulatory standards. Regulatory Compliance risk arises from the failure to observe relevant laws, codes, rules and regulations and can manifest itself in poor market or customer outcomes and lead to fines, penalties and reputational damage to our business. We aim to keep abreast of developments in legal principles or conduct requirements (including in relation to the risk of such developments in one part of the financial industry being construed as applying to other parts of the financial industry, which could lead to legal or regulatory proceedings). Regulatory compliance risk management Key developments in 2024 Regulatory horizon scanning and mapping capabilities continue to evolve with a focus on enhanced connectivity to Risk management systems to support better traceability of regulatory obligations. We have enhanced our processes, framework, and governance capabilities to improve the controls and oversight of Consumer Duty outcomes in the UK. Work is underway to transition from event- driven technology to incorporate Cloud and analytics capability to enhance our oversight abilities in areas such as surveillance. Governance and structure The Group Head of Regulatory Compliance reports to the Group Chief Risk and Compliance Officer. Regulatory Compliance and Financial Crime Compliance teams work together and with relevant stakeholders to achieve good conduct outcomes, and provide enterprise-wide support on the Compliance risk agenda in close collaboration with colleagues from the Group Risk and Compliance function. Key risk management processes The Global Regulatory Compliance capability is responsible for setting global policies, standards and risk appetite to guide the Group’s management of Regulatory Compliance risk. It also devises the required frameworks, support processes and tooling to protect against Regulatory Compliance risks. The Group capability provides oversight, review and challenge to the global market, regional and local line of business teams to help them identify, assess and mitigate Regulatory Compliance risks, where required. The Group’s Regulatory Compliance risk policies are regularly reviewed. Global policies and procedures require the identification and escalation of any actual or potential regulatory breaches. Relevant events and issues are escalated to the Group’s Non- Financial Risk Management Board, the Group Risk Management Meeting and the Group Risk Committee, as appropriate. The Group Head of Regulatory Compliance attends the Risk and Compliance Executive Committee, the Group Risk Management Meeting and the Group Risk Committee. Financial crime risk Overview Financial crime risk is the risk that HSBC’s products and services will be exploited for criminal activity. This includes fraud, bribery and corruption, tax evasion, sanctions and export control violations and evasion, money laundering, terrorist financing and proliferation financing. Financial crime risk arises from day-to-day banking operations involving customers, third parties and employees. Financial crime risk management Key developments in 2024 We regularly review the effectiveness of our financial crime risk management framework, which includes continued consideration of the complex and dynamic nature of sanctions compliance and export control risk. We continued to respond to the financial sanctions and trade restrictions that have been imposed on Russia, including methods used to limit sanctions evasion. We continued to make progress with several key financial crime risk management initiatives, including: – deployment of our intelligence-led, dynamic risk assessment capability for customer account monitoring in additional entities and global businesses; – deployment of a next generation capability to increase our monitoring coverage on correspondent banking activity in additional markets; – enhancing our fraud controls and continuing to invest in, and monitor, technological developments; and – enhancements in response to the rapidly evolving and complex global payments landscape and refinement of our digital assets and currencies strategy. Governance and structure The structure of the Financial Crime function remained substantively unchanged in 2024. The Group Head of Financial Crime and Group Money Laundering Reporting Officer continues to report to the Group Chief Risk and Compliance Officer, while the Group Risk Committee retains oversight of matters relating to financial crime . Key risk management processes We will not tolerate knowingly conducting business with individuals or entities believed to be engaged in criminal activity. We require everybody in HSBC to play their role in maintaining effective systems and controls to prevent and detect financial crime. Where we believe we have identified suspected criminal activity or vulnerabilities in our control framework, we will take appropriate mitigating action. We manage financial crime risk because it is the right thing to do to protect our customers, shareholders, staff, the communities in which we operate, as well as the integrity of the financial system on which we all rely. We operate in a highly regulated industry in which these same policy goals are codified in law and regulation. We are committed to complying with the laws and regulations of all the markets in which we operate and apply a consistently high financial crime standard globally. We continued to invest in enhancing our operational control capabilities and technology solutions to deter and detect criminal activity. We further strengthened our financial crime risk taxonomy and control libraries and our monitoring capabilities through technology deployments. We developed more targeted metrics, and continued to seek to enhance our governance and reporting. 260 HSBC Holdings plc Annual Report on Form 20-F Risk review We are committed to working in partnership with the wider industry and the public sector in managing financial crime risk. In 2024, our focus remained on measures to improve the overall effectiveness of the global financial crime framework and promote the risk-based approach. Through our work with industry bodies, such as the Wolfsberg Group, we provided input into legislative and regulatory reform activities and supported the efforts of the global standard setter, the Financial Action Task Force. We did this by contributing to the development of responses to consultation papers focused on how financial crime risk management frameworks can deliver more effective outcomes in detecting and deterring criminal activity. In addition, we participated in a number of public events related to the promotion of risk-based supervision, payment transparency, fraud risk management and financial inclusion, as well as tackling forestry crimes, wildlife trafficking and human trafficking. Model risk Overview Model risk is the risk of the potential for adverse consequences from model errors or the inappropriate use of modelled outputs to inform business decisions. Model risk arises in both financial and non-financial contexts whenever business decision making includes reliance on models. Key developments in 2024 In 2024 , we continued to make improvements in our Model Risk Management (‘MRM’) processes amid regulatory changes in MRM requirements. Initiatives during the year included: – updating our MRM Framework to meet the requirements of the PRA’s SS1/23 with a programme of work in progress to implement these changes across the model landscape; – completing a review of model tiering across the organisation assessing the materiality and complexity of all models and assigning a new tier which will drive the level of oversight required at model level; – introducing a new framework to govern and manage the risks associated with Deterministic Quantitative Methods, which are complex and material calculators that although not technically models still present similar risks; – following feedback from the PRA and other regulators on a number of our model submissions for internal ratings-based (‘IRB’) models, we are delivering a programme of work to redevelop several IRB models for wholesale credit; – enhancing our framework for the independent validation of models accounting for new generative AI techniques becoming more widely used; and – working closely with businesses and functions in developing a governance framework to manage the range of risks these AI and Machine Learning (‘ML’) techniques can introduce. Governance and structure Model risk governance committees at the Group, business and functional levels provide oversight of model risk. The committees include senior leaders from the global businesses and the Group Risk and Compliance function, and focus on model-related concerns and are supported by key model risk metrics. We also have Model Risk Committees in our geographical regions focused on local delivery and requirements. The Group-level Model Risk Committee is chaired by the Group Chief Risk and Compliance Officer, and the heads of key businesses participate in these meetings. Key risk management processes We use a variety of modelling approaches, including regression, simulation, sampling, machine learning and judgemental scorecards for a range of business applications. These activities include customer selection, product pricing, financial crime transaction monitoring, creditworthiness evaluation and financial reporting. Global responsibility for managing model risk is delegated from the Board to the Group Chief Risk and Compliance Officer, who authorises the Group Model Risk Committee. This committee regularly reviews our model risk management policies and procedures, and requires the first line of defence to demonstrate comprehensive and effective controls based on a library of model risk controls provided by Model Risk Management. Model Risk Management also reports on model risk to senior management and the Group Risk Committee on a regular basis through the use of the risk map, risk appetite metrics and top and emerging risks. We regularly review the effectiveness of these processes, including the model risk committee structure, to help ensure appropriate understanding and ownership of model risk is embedded in the businesses and functions. HSBC Holdings plc Annual Report on Form 20-F 261 Insurance manufacturing operations risk Contents 261 Overview 261 Insurance manufacturing operations risk management 262 Insurance manufacturing operations risk in 2024 262 Measurement 263 Key risk types 263 –  Market risk 264 –  Credit risk 264 –  Liquidity risk 265 –  Insurance underwriting risk Overview The key risks for our insurance manufacturing operations are market risk, in particular interest rate and equity, credit risk and insurance underwriting risk. These have a direct impact on the financial results and capital positions of the insurance operations. HSBC’s insurance business We sell insurance products through a range of channels including our branches, insurance sales forces, direct channels and third-party distributors. The majority of sales are through an integrated bancassurance model that provides insurance products principally for customers with whom we have a banking relationship, although the proportion of sales through other sources such as independent financial advisers, tied agents and digital platforms is increasing. For the insurance products we manufacture, the majority of sales are savings, universal life and protection contracts. We choose to manufacture these insurance products in HSBC subsidiaries based on an assessment of operational scale and risk appetite. Manufacturing insurance allows us to retain the risks and rewards associated with writing insurance contracts by keeping part of the underwriting profit and investment income within the Group. Our life insurance manufacturing subsidiaries operate in eight markets, which are Hong Kong, Macau, Singapore, mainland China, France, UK, Malta and Mexico. This excludes Argentina where the sale of the insurance business was completed on 6 December 2024. In addition, we have: an interest in a life insurance manufacturing associate in India; a captive insurance entity in Bermuda that insures the non-financial risks of the wider Group; and a reinsurance entity in Bermuda. Where we do not have the risk appetite or operational scale to be an effective insurance manufacturer, we engage with a small number of leading external insurance companies in order to provide insurance products to our customers. These arrangements are generally structured with our exclusive strategic partners and earn the Group a combination of commissions, fees and a share of profits. We distribute insurance products in all of our geographical regions. This section focuses only on the risks relating to the insurance products we manufacture. Insurance manufacturing operations risk management Key developments in 2024 The insurance manufacturing subsidiaries follow the Group’s risk management framework. In addition, there are specific policies and practices relating to the risk management of insurance contracts, which did not change materially over 2024. During the year, there was continued market volatility observed across interest rates, equity and credit markets and foreign exchange rates. This was predominantly driven by geopolitical factors and wider inflationary concerns. Other areas of focus were the ongoing integration of the insurance business that was acquired through AXA Singapore in 2022 into the Group’s risk management framework, development of processes and systems within the reinsurance entity established in Bermuda, and controls supporting IFRS 17. As mentioned, the insurance business in Argentina was sold during 2024, with the sale completing on 6 December 2024. Following HSBC’s announcement on 20 December 2024 of the signing of a memorandum of understanding for the planned sale of its French insurance business, the balance sheet of the French business has been reported as held for sale at 31 December 2024. Further details are provided on page 433 . Governance and structure (Audited) Insurance manufacturing risks are managed to a defined risk appetite, which is aligned to the Group’s risk appetite and risk management framework, including its three lines of defence model. For details of the Group’s governance framework, see page 145 . The Global Insurance Risk Management Meeting oversees the control framework globally and is accountable to the WPB Risk Management Meeting on risk matters relating to the insurance business. The monitoring of the risks within our insurance operations is carried out by Insurance Risk teams. The Group’s risk stewardship functions support the Insurance Risk teams in their respective areas of expertise. Stress and scenario testing (Audited) Stress testing forms a key part of the risk management framework for the insurance business. We participate in local and Group-wide regulatory stress tests, as well as internally developed stress and scenario tests, including Group internal stress test exercises. The results of these stress tests and the adequacy of management action plans to mitigate these risks are considered in the Group’s ICAAP and the entities’ regulatory Own Risk and Solvency Assessments, which are produced by all material entities. Key risk management processes Market risk (Audited) All our insurance manufacturing subsidiaries have market risk mandates and limits that specify the investment instruments in which they are permitted to invest and the maximum quantum of market risk that they may retain. They manage market risk by using some or all of the techniques listed below, among others, depending on the nature of the contracts written. – We are able to adjust bonus rates to manage the liabilities to policyholders for products with participating features. The effect is that a significant proportion of the market risk is borne by the policyholder. – We use asset and liability matching where asset portfolios are structured to support projected liability cash flows. The Group manages its assets using an approach that considers asset quality, diversification, cash flow matching, liquidity, volatility and target 262 HSBC Holdings plc Annual Report on Form 20-F Risk review investment return. We use models to assess the effect of a range of future scenarios on the values of financial assets and associated liabilities, and ALCOs employ the outcomes in determining how best to structure asset holdings to support liabilities. – We use derivatives and other financial instruments to protect against adverse market movements. – We design new products to mitigate market risk, such as changing the investment return sharing proportion between policyholders and the shareholder. Credit risk (Audited) Our insurance manufacturing subsidiaries also have credit risk mandates and limits within which they are permitted to operate, which consider the credit risk exposure, quality and performance of their investment portfolios. Our assessment of the creditworthiness of issuers and counterparties is based primarily upon internationally recognised credit ratings and other publicly available information. Stress testing is performed on investment credit exposures using credit spread sensitivities and default probabilities. We use a number of tools to manage and monitor credit risk. These include a credit report containing a watch-list of investments with current credit concerns, primarily investments that may be at risk of future impairment or where high concentrations to counterparties are present in the investment portfolio. Sensitivities to credit spread risk are assessed and monitored regularly. Capital and liquidity risk (Audited) Capital risk for our insurance manufacturing subsidiaries is assessed in the Group’s ICAAP, based on their financial capacity to support the risks to which they are exposed. Capital adequacy is assessed on both the Group’s economic capital basis, and the relevant local insurance regulatory basis. Risk appetite buffers are set to ensure that the operations are able to remain solvent, allowing for business-as-usual volatility and extreme but plausible stress events. Liquidity risk is less material for the insurance business. It is managed by cash flow matching and maintaining sufficient cash resources, investing in high credit-quality investments with deep and liquid markets, monitoring investment concentrations and restricting them where appropriate, and establishing committed contingency borrowing facilities. Insurance manufacturing subsidiaries complete quarterly liquidity risk reports and an annual review of the liquidity risks to which they are exposed. Insurance underwriting risk (Audited) Our insurance manufacturing subsidiaries primarily use the following frameworks and processes to manage and mitigate insurance underwriting risks: – a formal approval process for launching new products or making changes to products; – a product pricing and profitability framework, which requires initial and ongoing assessment of the adequacy of premiums charged on new insurance contracts to meet the risks associated with them; – a framework for customer underwriting; – reinsurance, which cedes risks to third-party reinsurers to keep risks within risk appetite, reduce volatility and improve capital efficiency; and – oversight by financial reporting committees and actuarial review committees in each of our entities of the methodology and assumptions that underpin IFRS 17 reporting. Insurance manufacturing operations risk in 2024 Measurement The following tables show the composition of the fair value of underlying items of the Group’s participating contracts at the reporting date . Balance sheet of insurance manufacturing subsidiaries by type of contract (Audited) Life direct participating and investment DPF contracts 1 Life other contracts 2 Other contracts 3 Shareholder assets and liabilities Total At 31 Dec 2024 $m $m $m $m $m Financial assets 98,676 4,452 6,227 5,967 115,322 –  trading assets — — — — — – financial assets designated and otherwise mandatorily measured at fair value through profit or loss 94,327 4,233 4,839 690 104,089 –  derivatives 207 7 1 — 215 –  financial investments – at amortised cost 545 90 1,060 4,335 6,030 –  financial assets at fair value through other comprehensive income — — 6 73 79 –  other financial assets 3,597 122 321 869 4,909 Insurance contract assets 14 104 — — 118 Reinsurance contract assets — 5,013 — — 5,013 Other assets and investment properties 4 24,647 64 36 3,337 28,084 Total assets at 31 Dec 2024 123,337 9,633 6,263 9,304 148,537 Liabilities under investment contracts designated at fair value — — 5,931 — 5,931 Insurance contract liabilities 102,605 4,427 — — 107,032 Reinsurance contract liabilities — 701 — — 701 Deferred tax — — — 12 12 Other liabilities 4 21,772 39 — 6,035 27,846 Total liabilities 124,377 5,167 5,931 6,047 141,522 Total equity — — — 7,015 7,015 Total liabilities and equity at 31 Dec 2024 124,377 5,167 5,931 13,062 148,537 HSBC Holdings plc Annual Report on Form 20-F 263 Balance sheet of insurance manufacturing subsidiaries by type of contract (Audited) Life direct participating and investment DPF contracts 1 Life other contracts 2 Other contracts 3 Shareholder assets and liabilities Total At 31 Dec 2023 $m $m $m $m $m Financial assets 113,605 3,753 5,812 7,696 130,866 –  trading assets — — — — — –  financial assets designated and otherwise mandatorily measured at fair value through profit or loss 100,427 3,593 4,177 1,166 109,363 –  derivatives 258 10 — 6 274 –  financial investments – at amortised cost 1,351 67 1,157 4,772 7,347 –  financial assets at fair value through other comprehensive income 8,859 — 5 693 9,557 –  other financial assets 2,710 83 473 1,059 4,325 Insurance contract assets 13 213 — — 226 Reinsurance contract assets — 4,871 — — 4,871 Other assets and investment properties 2,782 164 35 1,636 4,617 Total assets at 31 Dec 2023 116,400 9,001 5,847 9,332 140,580 Liabilities under investment contracts designated at fair value — — 5,103 — 5,103 Insurance contract liabilities 116,389 3,961 — — 120,350 Reinsurance contract liabilities — 819 — — 819 Deferred tax — 1 — 3 4 Other liabilities — — — 6,573 6,573 Total liabilities 116,389 4,781 5,103 6,576 132,849 Total equity — — — 7,731 7,731 Total liabilities and equity at 31 Dec 2023 116,389 4,781 5,103 14,307 140,580 1 ‘Life direct participating and investment DPF contracts’ are life direct participating contracts and investment contracts with discretionary participating features. These are substantially measured under the variable fee approach measurement model. 2 ‘Life other contracts’ are measured under the general measurement model and mainly include protection insurance contracts as well as reinsurance contracts. The reinsurance contracts primarily provide diversification benefits over the life direct participating and investment DPF contracts. 3 ‘Other contracts’ includes investment contracts for which HSBC does not bear significant insurance risk. 4 ’Other assets and investment properties’ includes $ 24,222 m and ’Other liabilities’ includes $ 23,420 m in respect of the classification of the French insurance business assets and liabilities as held for sale at 31 December 2024. Further details are provided on page 433 . Key risk types Market risk (Audited) Description and exposure Market risk is the risk of changes in market factors affecting HSBC’s capital or profit. Market factors include interest rates, equity and growth assets, credit spreads and foreign exchange rates. Our exposure varies depending on the type of contract issued. Our most significant life insurance products are contracts with participating features. These products typically include some form of capital guarantee or guaranteed return on the sums invested by the policyholders, to which bonuses are added if allowed by the overall performance of the funds. For contracts without participating features, some form of guarantee may still exist but HSBC’s ability to share risks with policyholders will be reduced. Funds supporting these savings products are primarily invested in fixed income, with a proportion in some cases allocated to other asset classes to provide customers with the potential for enhanced returns. These products expose HSBC to the risk of variation in asset returns, which will impact our participation in the investment performance. In addition, in some scenarios the asset returns can become insufficient to cover the policyholders’ financial guarantees, and some contracts are non-participating, in which case the shortfall has to be met by HSBC. Amounts are held against the cost of such positions, calculated by stochastic modelling in the larger entities. The cost of such guarantees are generally not material and are absorbed by the insurance fulfilment cash flows. For unit-linked contracts, market risk is substantially borne by the policyholder, but some market risk exposure typically remains, as fees earned are related to the market value of the linked assets. Sensitivities The following table provides the impacts on the CSM, profit after tax and equity of our insurance manufacturing subsidiaries from reasonably possible effects of changes in selected interest rate, credit spread, equity price, growth assets and foreign exchange rate scenarios for the year. These sensitivities are prepared in accordance with current IFRS Accounting Standards and are based on changing one assumption at a time with other variables being held constant, recognising that in practice such variables could be correlated. Due in part to the impact of the cost of guarantees and hedging strategies which may be in place, the relationship between the CSM, profit after tax and total equity and the risk factors is non-linear. Therefore, the results disclosed should not be extrapolated to measure sensitivities to different levels of stress. For the same reason, the impact of the stress is not necessarily symmetrical on the upside and downside. The sensitivities are stated before allowance for management actions, which may mitigate the effect of changes in the market environment. The method used for deriving sensitivity information and significant market risk factors remain unchanged except for updates made to the foreign exchange rate risk methodology, which now limits the impacts to within more recent historical ranges. 2023 comparative sensitivities have been updated to reflect this change. The sensitivities provided below include the French insurance business, which was classified as held for sale at 31 December 2024. Further details are provided on page 433 . 264 HSBC Holdings plc Annual Report on Form 20-F Risk review Sensitivity of HSBC’s insurance manufacturing subsidiaries to market risk factors (Audited) 2024 2023 Effect on CSM Effect on profit after tax 1 Effect on total equity Effect on CSM Effect on profit after tax 1 Effect on total equity $m $m $m $m $m $m +100 basis point parallel shift in yield curves ( 155 ) 83 52 ( 92 ) 66 32 -100 basis point parallel shift in yield curves ( 249 ) ( 217 ) ( 186 ) ( 390 ) ( 137 ) ( 103 ) +100 basis point shift in credit spreads ( 907 ) ( 84 ) ( 115 ) ( 884 ) ( 11 ) ( 45 ) -100 basis point shift in credit spreads 876 60 91 806 104 138 10% increase in growth assets 2 467 73 73 436 78 78 10% decrease in growth assets 2 ( 514 ) ( 79 ) ( 79 ) ( 507 ) ( 85 ) ( 85 ) 10% appreciation in US dollar exchange rate against local functional currency 3 71 17 17 24 ( 1 ) ( 1 ) 10% depreciation in US dollar exchange rate against local functional currency 3 ( 26 ) ( 3 ) ( 3 ) ( 35 ) ( 3 ) ( 3 ) 1 ‘Effect on profit after tax‘ in respect for the year. 2 ‘Growth assets’ primarily comprise equity securities and investment properties. Variability in growth asset fair value constitutes a market risk to insurance manufacturing subsidiaries. 3 During the year 10% US dollar exchange rate methodology changed and the 10% sensitivity range applies to all currencies except for the Hong Kong dollar, where the extent of change is limited by the impact of the HKD to USD peg. The comparatives have been restated accordingly. Credit risk (Audited) Description and exposure Credit risk is the risk of financial loss if a customer or counterparty fails to meet their obligation under a contract. It arises in two main risks for our insurance manufacturers: – the risk associated with credit spread volatility and default by debt security counterparties after investing premiums to generate a return for policyholders and shareholders; and – the risk of default by reinsurance counterparties and non- reimbursement for claims made after ceding insurance risk. The amounts outstanding at the balance sheet date in respect of these items are shown in the table on page 262 . The credit quality of the reinsurers’ share of liabilities under insurance contracts is assessed as ‘satisfactory’ or higher (as defined on page 170 ), with none of the exposure being either past due or impaired (2023: none ). Credit risk on assets supporting unit-linked liabilities is predominantly borne by the policyholders. Therefore, our exposure is primarily related to liabilities under non-linked insurance and investment contracts and shareholders’ funds. The credit quality of insurance financial assets is included in the table on page 196 . The risk associated with credit spread volatility is to a large extent mitigated by holding debt securities to maturity, and sharing a degree of credit spread experience with policyholders. L iquidity risk (Audited) Description and exposure Liquidity risk is the risk that an insurance operation, though solvent, either does not have sufficient financial resources available to meet its obligations when they fall due, or can secure them only at excessive cost. Liquidity risk may be able to be shared with policyholders for products with participating features. The remaining maturity of insurance contract liabilities is included in Note 4 on page 395 . The amounts of insurance contract liabilities that are payable on demand are set out by the product grouping below; 2024 balances exclude the French insurance business that was classified as held for sale at 31 December 2024 (further details are provided on page 433 ). Amounts payable on demand (Audited) 2024 2023 Amounts payable on demand Carrying amount for these contracts Amounts payable on demand Carrying amount for these contracts $m $m $m $m Life direct participating and investment DPF contracts 98,275 102,605 107,287 116,389 Life other contracts 2,960 4,427 2,765 3,961 At 31 Dec 101,235 107,032 110,052 120,350 HSBC Holdings plc Annual Report on Form 20-F 265 Insurance underwriting risk Description and exposure Insurance underwriting risk is the risk of loss through adverse experience, in either timing or amount, of insurance underwriting parameters (non-economic assumptions). These parameters include mortality, morbidity, longevity, lapse and expense rates. The principal risk we face is that, over time, the cost of the contract, including claims and benefits, may exceed the total amount of premiums and investment income received. The tables on page 262 analyse our life insurance underwriting risk exposures by composition of the fair value of the underlying items. The insurance underwriting risk profile and related exposures remain largely consistent with those observed at 31 December 2023. Sensitivities (Audited) The following table shows the sensitivity of the CSM, profit and total equity to reasonably foreseeable changes in non-economic assumptions across all our insurance manufacturing subsidiaries. These sensitivities are prepared in accordance with current IFRS. Sensitivity to lapse rates depends on the type of contracts being written. An increase in lapse rates typically has a negative effect on CSM (and therefore expected future profits) due to the loss of future income on the lapsed policies. However, some contract lapses have a positive effect on profit due to the existence of policy surrender charges. Mortality and morbidity risk is typically associated with life insurance contracts. During the year we have revised the sensitivity to mortality and morbidity rates from 10% to 5% to align with reasonably foreseeable changes, and the comparatives have been restated accordingly. The effect on profit of an increase in mortality or morbidity depends on the type of business being written. Expense rate risk is the exposure to a change in the allocated cost of administering insurance contracts. To the extent that increased expenses cannot be passed on to policyholders, an increase in expense rates will have a negative effect on our profits. This risk is generally greatest for our smaller entities. The impact of changing insurance underwriting risk factors is primarily absorbed within the CSM, unless contracts are onerous in which case the impact is directly to profit. The impact of changes to the CSM is released to profits over the expected coverage periods of the related insurance contracts. The sensitivities provided below include the French insurance business, which was classified as held for sale at 31 December 2024. Further details are provided on page 433 . Sensitivity of HSBC’s insurance manufacturing subsidiaries to insurance underwriting risk factors 1 (Audited) Effect on CSM Effect on profit after tax 2 Effect on total equity At 31 Dec 2024 $m $m $m 10 % increase in lapse rates ( 282 ) ( 21 ) ( 30 ) 10 % decrease in lapse rates 297 23 36 5 % increase in mortality and/or morbidity rates ( 92 ) ( 16 ) ( 20 ) 5 % decrease in mortality and/or morbidity rates 102 14 23 10 % increase in expense rates ( 66 ) ( 11 ) ( 15 ) 10 % decrease in expense rates 68 12 15 At 31 Dec 2023 10 % increase in lapse rates ( 277 ) ( 24 ) ( 24 ) 10 % decrease in lapse rates 290 29 29 5 % increase in mortality and/or morbidity rates 3 ( 87 ) ( 11 ) ( 11 ) 5 % decrease in mortality and/or morbidity rates 3 87 16 16 10 % increase in expense rates ( 68 ) ( 6 ) ( 6 ) 10 % decrease in expense rates 67 11 11 1 The sensitivities impacts are provided after considering the impacts of reinsurance contracts held as risk mitigation. 2 ‘Effect on profit after tax‘ in respect for the year. 3 During the year the sensitivity to mortality and morbidity rates have been changed from 10% to 5% and the comparatives have been restated accordingly. 266 HSBC Holdings plc Annual Report on Form 20-F Corporate governance report HSBC continues to enhance its corporate governance practices and procedures to support the Board’s commitment to high standards of corporate governance. The corporate governance report contains the Report of the Directors and gives details of our Board of Directors, senior management, and Board committees. It outlines key aspects of our approach to corporate governance, including internal control. It also includes the Directors’ remuneration report, which explains our policies on remuneration and their application. We have a comprehensive range of policies and systems in place designed to help ensure that the Group is well managed, with effective oversight and control. 267 The Board 272 Senior management 275 How we are governed 281 Board matters considered and workforce engagement 287 Board and committee effectiveness, performance and accountability 289 Board committees 309 Directors’ remuneration report 349 Share capital and other related governance disclosures 354 Internal control 356 Employees 359 Statement of compliance London, UK, 2019. HSBC Lion, 8 Canada Square. HSBC Holdings plc Annual Report on Form 20-F 267 The Board The Board, which seeks to promote the Group’s long-term success, deliver sustainable value to shareholders and promote a culture of openness and debate, comprises diverse, high-calibre members who have experience in our global markets. Chairman and executive Directors Sir Mark E Tucker (67) Group Chairman Appointed to the Board: September 2017 Group Chairman since: October 2017 Skills and experience: With over 40 years of experience in financial services in Asia, the US, the UK, and Africa, including 30 years based in Hong Kong, Mark has a deep understanding of the industry and the markets in which we operate. Career: Mark is also non-executive Group Chairman of the Discovery Group of South Africa. Mark was previously Group Chief Executive and President of AIA Group Limited (‘AIA’). Prior to that, he was Group Chief Executive of Prudential plc. Mark previously served on the Court of the Bank of England. He has also served on the Board of the Goldman Sachs Group. External appointments: – Non-executive Group Chairman of Discovery Group of South Africa – Supporting Chair of Chapter Zero – Member of the Asia Business Council – Member of the Hong Kong Chief Executive’s Council of Advisers – Member of the Investment Council of the Supreme National Investment Committee of the Kingdom of Saudi Arabia – Chairman of the Multinational Chairmen’s Group – Director, Peterson Institute for International Economics – Director, Institute of International Finance – Trustee, Asia Society Global Board of Trustees – Member of the China National Financial Regulatory Administration International Advisory Council (NFRA IAC) – International Adviser, Hong Kong Academy of Finance - International Council of Advisers – Member of the Advisory Board of the Asia Global Institute – International Business Leaders’ Advisory Council to the Mayor of Beijing (IBLAC Beijing) – Advisor to the Mayor – International Business Leaders’ Advisory Council to the Mayor of Shanghai (IBLAC Shanghai) – Advisor to the Mayor Georges Elhedery (50) Group CEO Appointed to the Board: January 2023 Skills and experience: Georges has over 25 years of experience in the banking industry across Europe, the Middle East and Asia, and has held a number of executive roles at a regional, global business and functional level. Career: Georges was appointed Group CEO from 2 September 2024. He most recently served as Group CFO between January 2023 and September 2024. Georges joined HSBC in 2005 with extensive trading experience in London, Paris and Tokyo. He has since held a number of senior leadership roles, including Head of Global Banking and Markets, Middle East and North Africa; Chief Executive Officer for HSBC, Middle East, North Africa and Türkiye; Global Head of Markets; and co-Chief Executive Officer, Global Banking and Markets based in London. External appointments: – Member of the Monetary Authority of Singapore, International Advisory Panel – Independent non-executive Director of Sustainable Markets Initiative Limited – Member of the Financial Services Task Force of the Sustainable Markets Initiative – Member of the Advisory Board of The China Children Development Fund – Principal Member of The Glasgow Financial Alliance for Net Zero Manveen Kaur (known as Pam Kaur) (61) Group CFO Appointed to the Board: January 2025 Skills and experience : Pam has extensive global banking experience, gained over an almost 40-year career with a number of global financial institutions. She has performed many senior roles in audit, business, compliance, finance and risk management. Career : Pam was appointed Group CFO on 1 January 2025. Prior to this, she served as Group Chief Risk Officer from January 2020 and assumed responsibility for Compliance in June 2021. She served as Group Chief Risk and Compliance Officer until December 2024. Prior to joining HSBC in April 2013 as Group Head of Internal Audit, Pam held several senior positions including Global Head of Group Audit for Deutsche Bank; Chief Financial Officer and Chief Operating Officer of the Restructuring and Risk Division for Royal Bank of Scotland Group plc; Group Head of Compliance and Anti-Money Laundering for Lloyds TSB; and Chief Compliance Officer for Citigroup International. External appointments: – Non-executive Director of The Hongkong and Shanghai Banking Corporation Limited – Independent non-executive Director of abrdn plc . Board committee membership key Committee Chair Group Audit Committee Group Risk Committee Group Remuneration Committee Nomination & Corporate Governance Committee Group Technology and Operations Committee For full biographical details of our Board members, see www.hsbc.com/who-we-are/our- people/board-of-directors. 268 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Independent non-executive Directors Geraldine Buckingham (47) Independent non-executive Director Appointed to the Board: May 2022 Skills and experience : Geraldine is an experienced executive within the global financial services industry, with significant leadership experience in Asia. Career : Geraldine is the former Chair and Head of Asia-Pacific at BlackRock, where she was responsible for all business activities across Hong Kong, mainland China, Japan, Australia, Singapore, India and Korea. After stepping down from this role, she acted as senior adviser to the Chairman and Chief Executive Officer of BlackRock. She earlier served as BlackRock’s Global Head of Corporate Strategy, and previously was a partner within McKinsey & Company’s financial services practice. External appointments: – Independent non-executive Director of Brunswick Group Partnership Ltd – Independent non-executive Director of H.R.L. Morrison & Co Limited – Member of the Advisory Board of ClimateWorks Centre Australia – Member of the Advisory Board of the McKinsey Health Institute Rachel Duan (54) Independent non-executive Director Appointed to the Board: September 2021 Skills and experience : Rachel is an experienced business leader with exceptional international experience in the US, Japan, mainland China and Hong Kong. Career : Rachel spent 24 years at General Electric (‘GE’), where she held positions including Senior Vice President of GE, and President and Chief Executive Officer of GE’s Global Markets where she was responsible for driving GE’s growth in Asia-Pacific, the Middle East, Africa, Latin America, Russia and the Commonwealth of Independent States. She also previously served as President and Chief Executive Officer of GE Advanced Materials China and then of Asia-Pacific; President and CEO of GE Healthcare China; and President and CEO of GE China. She has previously served as a non-executive Director of AXA S.A. External appointments: – Independent non-executive Director of Sanofi S.A. – Independent non-executive Director of the Adecco Group AG – Independent non-executive Director of Kering S.A. Dame Carolyn Fairbairn (64) Independent non-executive Director Appointed to the Board: September 2021 Skills and experience : Carolyn has significant experience across the media, government and finance sectors, and a deep understanding of the macroeconomic, regulatory and political environment. Career : An economist by training, Carolyn has served as a partner at McKinsey & Company, a member of the UK prime minister John Major’s Number 10 Policy Unit, and as Director-General of the Confederation of British Industry, and held senior executive positions at the BBC and ITV plc. She has extensive board experience, having previously served as non-executive Director of Lloyds Banking Group plc, The Vitec Group plc, Capita plc and BAE Systems plc. She has also served as a non- executive Director of the UK Competition and Markets Authority and the Financial Services Authority. External appointments: – Senior Independent non-executive Director of Tesco plc – Chair of Royal Mencap Society HSBC Holdings plc Annual Report on Form 20-F 269 James Forese (61) Independent non-executive Director Appointed to the Board: May 2020 Skills and experience : Jamie has over 30 years of international business and management experience in the finance industry working in areas including global markets, investment and private banking. Career : Jamie formerly served as President of Citigroup. He began his career in securities trading with Salomon Brothers, one of Citigroup’s predecessor companies, in 1985. In addition to his most recent role as Citigroup’s President, he was Chief Executive Officer of Citigroup’s Institutional Clients Group. He has held the positions of Chief Executive of its Securities and Banking division and Head of its Global Markets business. External appointments: – Non-executive Chair of HSBC North America Holdings Inc – Non-executive Chairman of Global Bamboo Technologies Ann Godbehere (69) Independent non-executive Director Appointed to the Board: September 2023 Senior Independent non-executive Director: May 2024 Skills and experience: Ann brings deep financial acumen and extensive financial services experience over a 30-year career spanning insurance, retail and private banking, and wealth management. She also provides global perspectives, drawing upon experiences and insights gained from a long career in international business. Career : After joining Swiss Re in 1996, Ann served as the company’s Chief Financial Officer from 2003 to 2007. She was also Interim Chief Financial Officer of Northern Rock Bank from 2008 to 2009 in the period immediately after its nationalisation. Ann also has extensive board experience, including with FTSE 100 companies, having previously served as non-executive Director of Prudential plc, British American Tobacco plc, UBS AG, UBS Group AG and as Senior Independent non- executive Director of Rio Tinto plc and Rio Tinto Limited. External appointments: – Non-executive Director of HSBC Bank plc – Non-executive Director and Chair of the Audit Committee of Stellantis N.V. – Non-executive Director and Chair of the Audit and Risk Committee of Shell plc Steven Guggenheimer (59) Independent non-executive Director Appointed to the Board: May 2020 Skills and experience : Steven brings extensive insight into technologies ranging from artificial intelligence to Cloud computing, through his experience advising businesses on digital transformation. Career : Steven has more than 25 years of experience at Microsoft, including more than a decade as Corporate Vice President, where he led teams focused on original equipment manufacturers, developers and independent software vendors and artificial intelligence solutions. External appointments: – Independent non-executive Director of BT Group plc – Independent non-executive Director of Leupold & Stevens, Inc – Independent non-executive Director of Forrit Holdings Limited 270 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Dr José Antonio Meade Kuribreña (55) Independent non-executive Director Appointed to the Board: March 2019 Workforce engagement non-executive Director since: June 2022 Skills and experience : José has extensive experience in public administration, banking and financial policy. Career : José has held Cabinet-level positions in the federal government of Mexico, including as Secretary of Finance and Public Credit, Secretary of Social Development, Secretary of Foreign Affairs and Secretary of Energy. Prior to his appointment to the Cabinet, he served as Undersecretary and as Chief of Staff in the Ministry of Finance and Public Credit. José is also a former Director General of Banking and Savings at the Ministry of Finance and Public Credit, and served as Chief Executive Officer of the National Bank for Rural Credit. External appointments: – Independent non-executive Director of Alfa S.A.B. de C.V. – Independent non-executive Director of Grupo Comercial Chedraui, S.A.B. de C.V. – Independent Member of the Technical Committee of Fibra Uno Administracion SA de CV – Board member of the Global Center on Adaptation – Member of the Advisory Board of the University of California, Centre for US-Mexican Studies – Member of the UNICEF Mexico Advisory Board Kalpana Morparia (75) Independent non-executive Director Appointed to the Board: March 2023 Skills and experience : Kalpana is a skilled business leader with significant experience gained through a 45-year career in banking across Asia, primarily in India. Career : Kalpana’s most recent executive role was as Chair of J.P. Morgan, South and Southeast Asia and a member of J.P. Morgan’s Asia executive committee, held until her retirement in 2021. Before J.P. Morgan, she was the Joint Managing Director of ICICI Bank, India’s second- largest bank, from 2001 to 2007. She previously served as a non-executive Director of Hindustan Unilever Limited and Dr.Reddy’s Laboratories Ltd. External appointments: – Independent non-executive Director of The Great Eastern Shipping Company Limited – Independent non-executive Director of Philip Morris International Inc – Independent Director of Meesho Inc – Member of the Mentor Council of the Institute for Sustainability, Employment and Growth (ISEG Foundation) Eileen Murray (66) Independent non-executive Director Appointed to the Board: July 2020 Skills and experience : Eileen has extensive knowledge in financial services, technology and corporate strategy from a career spanning more than 40 years. Career : Eileen previously served as co-Chief Executive Officer of Bridgewater Associates, LP. Before this, she was Chief Executive Officer for Investment Risk Management LLC, and President and co-Chief Executive Officer of Duff Capital Advisors. Eileen started her professional career at Morgan Stanley, where she held positions including Controller, Treasurer, and Global Head of Technology and Operations, as well as Chief Operating Officer for its Institutional Securities Group. She was also Head of Global Technology, Operations and Product Control at Credit Suisse. External appointments: – Independent non-executive Director of Guardian Life Insurance Company of America – Independent non-executive Director of Broadridge Financial Solutions, Inc – Chair of Invisible Urban Charging – Operating partner of Liberty City Ventures HSBC Holdings plc Annual Report on Form 20-F 271 Brendan Nelson (75) Independent non-executive Director Appointed to the Board: September 2023 Skills and experience : Brendan brings UK and international financial and auditing expertise, and significant experience in auditing and as audit committee chair of UK-listed companies. Career : Brendan spent over 25 years as a partner at KPMG LLP, served on the board from 2000 and as Vice Chairman from 2006, until his retirement in 2010. Internationally, he held various senior positions including Global Chairman of the financial services practice. Subsequently, Brendan joined the boards of bp plc and NatWest Group plc where he also served as Chairman of both companies’ audit committees. During his career, Brendan was President of the Institute of Chartered Accountants of Scotland, a member of the Financial Reporting Review Panel and a member of the Financial Services Authority's Practitioner Panel. As current Chairman of the Board of BP Pension Trustees Ltd, Brendan has received training in ESG considerations for investment decisions and helped set an ambition to be net zero in terms of greenhouse gas emissions from investments by 2050. External appointments: – Non-executive Director of HSBC UK Bank plc – Chairman of BP Pension Trustees Ltd Swee Lian Teo (65) Independent non-executive Director Appointed to the Board: October 2023 Skills and experience : Swee Lian brings extensive experience within the international financial services industry, having previously spent over 27 years with the Monetary Authority of Singapore (‘MAS‘). Career : During Swee Lian’s time at the MAS, she worked in foreign reserves management, financial sector development, strategic planning and financial supervision, before she became the Deputy Managing Director for Financial Supervision. She retired from the MAS in 2015 after serving as Special Advisor, focused on MAS’s role in the international regulatory framework, in the Managing Director’s office. Swee Lian previously served as a non- executive Director on the boards of AIA Group Limited, Singapore Telecommunications Limited and the Dubai Financial Services Authority. External appointments: – Chair of CapitaLand Integrated Commercial Trust Management Limited – Director of Clifford Capital Pte Ltd – Director of Clifford Capital Holdings Pte Ltd Aileen Taylor (52) Group Chief People & Governance Officer Appointed: October 2024 Skills and experience : Aileen is a solicitor with significant risk, governance and regulatory experience across the banking industry. She is a member of the European Corporate Governance Council and the GC100. Career : Prior to joining HSBC, Aileen spent 19 years at the Royal Bank of Scotland Group, holding various legal, risk and compliance roles. She was appointed Group Secretary in 2010 and subsequently Chief Governance Officer and Board Counsel. Aileen started her HSBC career as Group Company Secretary and Chief Governance Officer in 2019 and has been leading connectivity between Board and Executive for over five years. Her role was expanded to Group Chief Human Resources and Governance Officer in October 2024 and then became Group Chief People & Governance Officer. Aileen has held various industry positions such as a member of the Financial Conduct Authority's Listing Authority Advisory Panel. Former Directors who served during the year David Nish David Nish retired from the Board on 3 May 2024 Sir Noel Quinn Sir Noel Quinn retired from the Board on 2 September 2024 For full biographical details of our Board members, see www.hsbc.com/who-we-are/our-people/board-of-directors. 272 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Senior management Senior management, which includes the Group Operating Committee, effective from 1 January 2025, supports the Group CEO in the day- to-day management of the business and the implementation of strategy. Richard Blackburn (59) Interim Group Chief Risk and Compliance Officer Richard was appointed Interim Group Chief Risk and Compliance Officer in January 2025. He also retains his existing responsibilities as Global Head of Traded and Treasury Risk Management & Global Head of Risk Analytics. Richard has 35 years’ experience in the financial services sector and has been with HSBC for over 20 years. In that time, he has held a number of senior roles including Regional Chief Risk Officer for Europe and MENAT, Chief Risk & Compliance Officer for Global Banking & Markets, Chief Risk & Compliance Officer for Global Commercial Banking, Chief Financial Officer for Global Markets and Head of Global Markets Asset & Liability Management. Jonathan Calvert-Davies (56) Group Head of Internal Audit Jonathan is a standing attendee of the Group Operating Committee, having joined HSBC as Group Head of Internal Audit in October 2019. He has over 30 years of experience providing assurance, audit and advisory services to the banking and securities industries in the UK, the US and Europe. Jonathan’s previous roles included leading KPMG UK’s financial services internal audit services practice and PwC’s UK internal audit services practice. He also previously served as interim Group Head of Internal Audit at the Royal Bank of Scotland Group. Bob Hoyt (60) Group Chief Legal Officer Bob joined HSBC as Group Chief Legal Officer in January 2021. He was previously Group General Counsel at Barclays from 2013 to 2020. Prior to that, he was General Counsel and Chief Regulatory Affairs Officer for PNC Financial Services Group. Bob has served as General Counsel and Senior Policy Adviser to the US Department of the Treasury under Secretary Henry M. Paulson Jr, and as Special Assistant and Associate Counsel to the White House under President George W. Bush. David Liao (52) Co-Chief Executive, Asia and Middle East David was appointed Co-Chief Executive of the Asia-Pacific region in 2021, which was expanded to cover the Middle East in January 2025. David, who joined HSBC in 1997, has held several senior roles during his HSBC career including: Head of Global Banking Coverage for Asia-Pacific; President and Chief Executive of HSBC China; Head of Global Banking and Markets, HSBC China; and Treasurer and Head of Global Markets, HSBC China. He also serves as the Chair of HSBC Bank (China) Company Limited, and as a Director of Bank of Communications Co., Limited and Hang Seng Bank Limited. HSBC Holdings plc Annual Report on Form 20-F 273 Barry O’Byrne (49) Chief Executive Officer, International Wealth & Premier Banking Barry was appointed Chief Executive Officer of Wealth and Premier Banking in October 2024. He joined HSBC in 2017 firstly as Chief Operating Officer for Global Commercial Banking and became Chief Executive Officer in 2019. Before joining HSBC, Barry worked at GE Capital for 19 years where he held a number of senior leadership roles, including Chief Executive Officer and Chief Operating Officer for GE Capital International. Michael Roberts (64) Chief Executive Officer, HSBC Bank plc, and Corporate and Institutional Banking Michael was appointed Chief Executive Officer, Corporate and Institutional Banking and Western Markets in January 2025. In this role he also holds the role of CEO, HSBC Bank plc, the Group’s non-ring-fenced bank. Michael previously served as Chief Executive Officer of HSBC US and Americas until December 2024. Prior to this he held the role of Chief Executive Officer of HSBC USA when he joined HSBC in 2019. Prior to joining HSBC, Michael spent over 30 years at Citigroup in a number of senior leadership roles, most recently as Global Head of Corporate Banking and Capital Management and Chief Lending Officer. Surendra Rosha (56) Co-Chief Executive, Asia and Middle East Surendra was appointed Co-Chief Executive of the Asia-Pacific region in 2021, which was expanded to cover the Middle East in January 2025. He is a Director of The Hongkong and Shanghai Banking Corporation Limited, HSBC Global Asset Management Limited and HSBC Bank Malaysia Berhad. Surendra joined HSBC in 1991 and has held several senior positions within Global Banking and Markets, including Head of Global Markets in Indonesia and Head of Institutional Sales, Asia-Pacific. He previously held the position of Chief Executive for HSBC India and Head of Financial Institutions Group, Asia- Pacific. Additional members of the Group Operating Committee Georges Elhedery Pam Kaur Aileen Taylor Other Senior Management who served on the Group Executive Committee during the year: – Greg Guyett, former Chief Executive Officer Global Banking and Markets stepped down as a Group Executive Committee member on 31 December 2024. He assumed the role of Chair, Strategic Clients Group on 1 January 2025. – Elaine Arden, former Group Chief Human Resources Officer stepped down on 30 September 2024. – John Hinshaw, former Group Chief Operating Officer stepped down on 30 September 2024. – Nuno Matos, former Chief Executive Officer Wealth and Personal Banking stepped down on 30 September 2024. – Colin Bell, former Chief Executive Officer HSBC Bank plc and HSBC Europe stepped down on 31 December 2024. – Dr Celine Herweijer, former Group Chief Sustainability Officer stepped down on 31 December 2024. – Steve John, former Group Chief Communications and Brand Officer stepped down on 31 December 2024. – Stephen Moss, former Regional Chief Executive Officer – Middle East, North Africa and Türkiye stepped down on 31 December 2024. – Jonathan Bingham, Global Financial Controller, served on the Group Executive Committee as interim Group Chief Financial Officer from 2 September 2024 to 31 December 2024. – Jo Miyake attended meetings of the Group Executive Committee as interim CEO, Global Commercial Banking from 1 October 2024 to 31 December 2024. John David Stuart (known as Ian Stuart) (61) Chief Executive Officer, HSBC UK Bank plc Ian has been Chief Executive Officer of HSBC UK Bank plc, the Group’s UK ring-fenced bank, since 2017. He joined HSBC in 2014 and served as Head of Commercial Banking, UK and Europe, until taking up his current role. Ian has worked over 45 years in financial services, and previously worked at Bank of Scotland, NatWest, RBS and Barclays. Ian holds an Honorary Masters and Honorary Doctorate degree for his services to the banking sector. He is a member of the UK Finance Board, TheCityUK Board, the UK Investment Council and is a business ambassador for Meningitis Now. Stuart Riley (50) Group Chief Information Officer Stuart was appointed Group Chief Information Officer in February 2024, initially overseeing the Technology function. In October 2024, he assumed responsibilities for data and analytics, and emerging technology, innovation, and ventures. Prior to joining HSBC, Stuart was Co-Chief Information Officer of Citi, and previously held senior technology roles at Deutsche Bank. He has also held the role of Partner at TAG Consulting, a technology consulting firm. Suzy White (48) Group Chief Operating Officer Suzy was appointed Group Chief Operating Officer in October 2024. Suzy has been with HSBC for more than 25 years and has held a number of senior leadership roles, most recently Chief Operating Officer for Global Banking and Markets. Previous roles included Regional Chief Operating Officer for Global Markets in the Americas, and Chief Risk Officer for Global Banking and Markets and Commercial Banking in the US. 274 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Board and senior management diversity We value difference We believe that a diverse and inclusive Board, reflective of the communities we serve, is a critical component of effective decision-making and of developing a sustainable and successful business for HSBC. This section outlines the key inclusion metrics for Board members and executive management as at 31 December 2024. The metrics as at 1 January 2025 have also been included to reflect changes to the Board and senior management that took effect from 1 January 2025. Gender and ethnic representation In accordance with the requirements of UK Listing Rule 6.6.6 (10) the tables below outline the current gender and ethnic representation of the HSBC Holdings Board and executive management reflecting data gathered through self-identification. Gender Identity As at 31 December 2024 As at 1 January 2025 Board members Executive management 2 Board members Executive management 3 Number % Number of senior positions 1 Number % Number % Number of senior positions 1 Number % Male 6 46 3 15 79 6 43 2 10 77 Female 7 54 1 4 21 8 57 2 3 23 Other — — — — — — — — — — Not specified/prefer not to say — — — — — — — — — — Ethnic Background As at 31 December 2024 As at 1 January 2025 Board members Executive management 2 Board members Executive management 3 Number % Number of senior positions 1 Number % Number % Number of senior positions 1 Number % White British or other White (including minority-White groups) 8 62 3 13 69 8 57 2 9 69 Mixed/multiple ethnic groups — — — — — — — — — — Asian/Asian British 3 23 — 4 21 4 29 1 3 23 Black/African/Caribbean/Black British — — — — — — — — — — Other ethnic groups 2 15 1 1 5 2 14 1 1 8 Not specified/prefer not to say — — — 1 5 — — — — — 1 Senior position s on the Board comprise the Group Chairman, Group CEO, Group CFO and Senior Independent non-executive Director. 2 Executive management comprises the Group Executive Committee members and the Group Head of Internal Audit. 3 Executive management comprises the Group Operating Committee members and the Group Head of Internal Audit. Skills and experience Banking Finance Risk Customer Digital technology CSR 1 /ESG Direct Asia market experience Global business experience 11 9 9 7 4 4 6 9 As it is essential to the effective governance of the Group, and the Board’s oversight and challenge of management, the Board ensures that collectively and individually, the Board possess the necessary skills, knowledge, expertise and experience. The summary provides an overview of the skills and experiences held by the non-executive Directors on the Board. This is based on the current skills matrix, which is reviewed annually by the Nomination & Corporate Governance Committee to ensure that the Board has the skills and experience required to effectively discharge its duties and to support succession planning discussions. The skills and experiences of the newly appointed non-executive Directors are also included in the summary. 1 Corporate Social Responsibility ('CSR') HSBC Holdings plc Annual Report on Form 20-F 275 How we are governed We are committed to high standards of corporate governance. The Group has in place a comprehensive range of policies and procedures, which are reviewed on a regular basis, designed to help ensure that the Group’s end-to-end governance is well managed, with effective oversight and controls. Governance highlights 2024 Appointment of new Group CEO Read more on pages 289 to 292 Appointment of new Group CFO Read more on pages 289 to 292 Governance simplification Read more on page 279 Oversight of organisational changes Read more on page 281 Establishment of new Board Sustainability Working Group Read more on pages 72 and 279 Establishment of Group Technology and Operations Committee Read more on pages 279 and 306 to 308 Active stakeholder engagement Read more on page 19 Revised Directors’ Remuneration Policy Read more from page 309 Board and executive governance The Board, led by the Group Chairman, is responsible for, among other matters: – promoting the Group’s long-term success and delivering sustainable value to shareholders; – establishing and approving the Group’s strategy and objectives, and monitoring the alignment of the Group’s purpose, strategy and values with the desired culture and standards; – setting the Group’s risk appetite and monitoring the Group’s risk profile; – approving and monitoring capital and financial resource plans for achieving strategic objectives, including material transactions; – considering and approving the Group’s technology and environmental, social and governance strategies; – reviewing the effectiveness of stakeholder engagement mechanisms, including engagement with the workforce; – approving the appointment and remuneration of Directors, including Board roles; – reviewing the Group’s overall corporate governance arrangements; and – providing entrepreneurial leadership of the Group within a framework of prudent and effective controls, which enable risks to be assessed and managed. A schedule of matters reserved to the Board is set out within its terms of reference, which are available on our website at www.hsbc.com/who-we-are/our-people/board-of-directors/board- responsibilities. The Board’s powers are subject to relevant laws, regulations and HSBC’s articles of association. The role of the independent non-executive Directors is to support the development of strategy, oversee risk, hold management to account and ensure the executive Directors are discharging their responsibilities properly, while creating the right culture to encourage constructive challenge. Further details on the independence of the Board can be found on page 352 . Non-executive Directors also review the performance of management in meeting agreed goals and objectives. The Group Chairman meets with the non-executive Directors without the executive Directors in attendance after Board meetings and otherwise, as necessary. The roles of Group Chairman and Group CEO are held by two different individuals. There is a clear division of responsibilities between the leadership of the Board by the Group Chairman, and the executive responsibility for day-to-day management of HSBC’s business undertaken by the Group CEO. The majority of Board members are independent non-executive Directors. As at 31 December 2024, the Board comprised the Group Chairman, 11 non-executive Directors, and one executive Director who is the Group CEO. From 1 January 2025, the newly appointed Group CFO will be an executive Director. For further details of Board members’ career backgrounds, skills, experience and external appointments, see their biographies on page 267 , and for a breakdown of the diversity and skills of the Board and senior management, see page 274 . Operation of the Board The Board is ordinarily scheduled to meet nine times a year. In 2024, the Board held 10 meetings. For further details on attendance at those meetings, see page 276 . The Board agenda is agreed by the Group Chairman, working with both the Group CEO and the Group Company Secretary. For further information, see ’Board matters considered’ on page 281 . The Group Chief People & Governance Officer (who is also the duly appointed Group Company Secretary), the Group Chief Risk and Compliance Officer and the Group Chief Legal Officer were regular attendees at Board meetings during 2024. The non-executive Chairman of The Hongkong and Shanghai Banking Corporation Limited was also a regular attendee at Board meetings. The chief executive officers of the three global businesses often attended Board strategy discussions, and other senior executives attended Board meetings for specific items as and when requested by the Board. In addition, as agreed by the Board, the Board Oversight Sub-Group is called on an ad hoc basis where necessary. Such meetings are an informal mechanism for a smaller group of Board members and management to discuss emerging issues and upcoming Board matters. 276 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Board roles, responsibilities and meeting attendance The table below sets out the Board members’ respective roles, responsibilities and attendance at Board meetings and the AGM in 2024. For a full description of key Board members’ responsibilities, see www.hsbc.com/who-we-are/our-people. Roles Board attendance in 2024 1 Responsibilities Group Chairman Sir Mark E Tucker 2,4 11/11 – Provides effective leadership of the Board and promotes the highest standards of corporate governance practices. – Leads the Board in providing strong strategic oversight and setting the Board’s agenda, culture and values. – Leads the Board in challenging management’s thinking and proposals, and fosters open and constructive debate among Directors. – Maintains internal and external relationships with key stakeholders, and communicates investors’ views to the Board. – Organises periodic monitoring and evaluation, including externally facilitated evaluation, of the performance of the Board, its committees and individual Directors. – Leads on succession planning for the Board and its committees, ensuring appointments reflect diverse cultures, skills and experiences. Executive Director Group CEO Sir Noel Quinn 4,6 Georges Elhedery 4,6,7 7/7 4/4 – Leads and directs the fulfilment of the Group’s purpose and strategy, in alignment with the desired culture and values as set by the Board. – Leads the senior executive committee with responsibility for the day-to-day leadership and management of the Group, in accordance with the authority delegated to him from the Board. – Maintains effective relationships with key internal and external stakeholders including the Group Chairman, the Board, customers, regulators, governments and investors. – Maintains accountability for the Group’s compliance with applicable laws, codes, rules and regulations, good market practice and HSBC’s own standards, value and policies. Executive Director Group CFO Georges Elhedery 4,6,7 Jonathan Bingham 7 7/7 4/4 – Supports the Group CEO in developing and implementing the Group strategy, and recommends the annual budget and long-term strategic and financial resource plan. – Leads the Finance function and is responsible for effective financial and regulatory reporting, including the effectiveness of the processes and controls, to ensure the financial control framework is robust and fit for purpose. – Maintains relationships with key stakeholders including shareholders. Non-executive Director Senior Independent Director David Nish 3,4,,5 Ann Godbehere 3,4,5 5/5 11/11 – Supports the Group Chairman, acting as intermediary for non-executive Directors when necessary. – Leads the non-executive Directors in the oversight of the Group Chairman, supporting the clear division of responsibility between the Group Chairman and the Group CEO. – Listens to shareholders’ views if they have concerns that cannot be resolved through the normal channels. Non-executive Directors – Develop and approve the Group strategy. – Challenge and oversee the performance of management in achieving agreed corporate goals and objectives. – Approve the Group’s risk appetite and review risk profile and performance. – Contribute to the assessment and monitoring of culture. – Maintain internal and external relationships with the Group’s key stakeholders. - Geraldine Buckingham 3,4 11/11 Rachel Duan 3,4,8 10/11 Dame Carolyn Fairbairn 3,4 11/11 James Forese 3,4 11/11 Steven Guggenheimer 3,4 11/11 Dr José Antonio Meade Kuribreña 3,4 11/11 Kalpana Morparia 3,4 11/11 Eileen Murray 3,4,8 10/11 Brendan Nelson 3,4 11/11 Swee Lian Teo 3,4 11/11 Group Chief People & Governance Officer (duly appointed Group Company Secretary) Aileen Taylor – Maintains strong and consistent governance practices at Board level and throughout the Group. – Supports the Group Chairman in ensuring effective functioning of the Board and its committees, and transparent engagement between senior management and non-executive Directors. – Facilitates induction and professional development of non-executive Directors. – Advises and supports the Board and management in ensuring effective end-to-end governance and decision making across the Group. 1 The total number of meetings comprises nine scheduled meetings, one ad hoc meeting and the AGM. 2 The non-executive Group Chairman was considered to be independent on appointment. 3 Independent non-executive Director. All of the non-executive Directors are considered to be independent. There are no relationships or circumstances that are likely to affect any individual non-executive Director’s objective judgement. All non-executive Directors have confirmed their independence during the year. 4 Attended the AGM on 3 May 2024. Kalpana Morparia attended virtually. 5 David Nish retired from the Board with effect from 3 May 2024 and was succeeded as the Board’s senior independent non-executive Director on that date by Ann Godbehere. 6 Sir Noel Quinn retired from the Board with effect from 2 September 2024 and was succeeded as Group CEO on that date by Georges Elhedery. 7 Georges Elhedery stepped down from his role as Group CFO with effect from 2 September 2024 and Jonathan Bingham was appointed interim Group CFO on that date. Jonathan Bingham was not appointed as an executive Director. From 1 January 2025, Pam Kaur was appointed as an executive Director and assumed the role of Group CFO. 8 Due to prior commitments, Eileen Murray was unable to attend the Board meeting in September 2024 and Rachel Duan was unable to attend the ad hoc Board meeting held in October 2024. HSBC Holdings plc Annual Report on Form 20-F 277 Relationship between the Board and senior management The Board delegates day-to-day management of the business and implementation of strategy to the Group CEO. During the year, the incumbent Group CEO was supported in his management of the Group by recommendations and advice from the Group Executive Committee (’GEC’), an executive forum comprising members of senior management that included chief executive officers of the global businesses and regions, as well as functional heads. With effect from 1 January 2025, the Group CEO is supported in his role by the Group Operating Committee (‘Group OpCo’) in place of the GEC. The Group CEO reports to the Board on Group OpCo meetings' outcomes and other executive matters of note relevant for the Board. For further details of the senior management team, see page 272 . All Directors are encouraged to have contact with management at all levels and have full access to management information as may be required. Visits to local business operations and meetings with local management are arranged for the non-executive Directors, alongside the executive Directors, when they attend Board meetings in different locations, and when travelling for other reasons. Senior management often attend Directors’ engagements and receive updates from the workforce engagement non-executive Director, José Meade. For further details, see ’The Board's engagement with the workforce’ on page 284 . Executive governance Throughout 2024, the GEC promoted the culture, as led and overseen by the Board, across the organisation by demonstrating the right tone from the top. The GEC modelled our values through their everyday behaviours, fostering a culture that delivered against our purpose of opening up a world of opportunity. At its meetings, the GEC dedicated time to reflect on how they had demonstrated our purpose and values in the day-to-day course of business. The GEC’s operating rhythm helped to facilitate end-to-end governance between senior leadership and the Board. The operating rhythm had the following three pillars: – regular check-in meetings to review and discuss current and emerging trends and issues; – a monthly meeting to review the performance of each of the global businesses in principal geographies and legal entities, supported by strategic key performance indicators; and – a strategy- and governance-focused meeting, held in advance of each Board meeting. Separate committees have been established to provide specialist oversight for matters delegated to the Group CEO and senior management. For further details of these committees, see page 279 . To further support our senior management, we have dedicated company secretaries and corporate governance officers who support and advise legal entities, global businesses and global functions on our corporate governance practices. These roles serve to strengthen the consistency and effectiveness of our end-to-end governance arrangements, and support connectivity and information sharing. From 1 January 2025 the GEC has been replaced by the Group Operating Committee (‘Group OpCo’), whose key focus has been establishing clear lines of accountability and enabling the Group to execute our strategy at pace. The Group OpCo serves as the leading executive decision-making committee and supports the Group CEO in discharging his responsibilities for the management and delivery of Group strategy. In support of the ambition to simplify HSBC, the Nomination & Corporate Governance Committee endorsed a new Group Governance Framework and Operating Rhythm, which will be implemented throughout the organisation in 2025. Subsidiary governance We are committed to maintaining high standards of corporate governance throughout the Group. All subsidiary boards and their respective businesses are required to have in place effective governance arrangements with regard to the businesses’ nature, size, location and the sectors in which they operate. The subsidiary accountability framework The subsidiary accountability framework aims to balance appropriate governance oversight by the Group with each subsidiary’s local legal and regulatory requirements. The framework supports the Group in promoting effective governance arrangements across its subsidiaries by: – setting out high-level principles to enhance communications and connectivity; and – ensuring a shared and consistent understanding of the Group’s strategic objectives, culture and values. The subsidiary accountability framework also focuses on ensuring that each subsidiary is led by an effective board with an appropriate balance of skills, diversity, experience and knowledge, having regard to the nature of the subsidiary’s business and local legal and regulatory requirements. Board composition of the Group’s subsidiaries is kept under review as part of succession planning. The Nomination & Corporate Governance Committee reviews the succession plans of principal subsidiaries, and principal subsidiaries review the succession plans for their own subsidiaries, as appropriate. The framework is subject to periodic review by the Board and/or the Nomination & Corporate Governance Committee and updated as required to ensure it is aligned to regulatory requirements and best practices. A comprehensive internal review of the framework was undertaken in 2024 with the outputs reported to the Nomination & Corporate Governance Committee. A number of improvements were made to the framework to provide greater clarity and additional guidance for subsidiaries. The role of principal subsidiaries Certain subsidiaries are designated formally by the Board as principal subsidiaries. In addition to their obligations under their respective local laws and regulations, principal subsidiaries – supported by regional company secretaries – perform a critical role in ensuring effective and high standards of governance across the Group and in overseeing the implementation of the subsidiary accountability framework in the regions for which they are responsible. Representatives from principal subsidiaries attend the Board and its committee meetings for relevant topics, including when the Board holds meetings outside of the UK. Chairs of principal subsidiaries’ risk and audit committees are invited to attend relevant Group Risk Committee and Group Audit Committee meetings. Attendance and participation at these meetings enhances subsidiary directors’ understanding of the challenges facing the Group and helps to identify common challenges and facilitates the sharing of lessons learned. Such committee participation supplements the regular reports, certifications and escalations from principal subsidiaries’ boards and their respective committees to the Board and relevant committee(s) of the Board. The Group Chairman interacts regularly with the chairs of the principal subsidiaries, including through the Chairman’s Forum. The Chairman’s Forum comprises the chairs of each of the principal subsidiaries, the Group’s senior independent non-executive Director, the chairs of the Group’s audit, risk and remuneration committees, and where relevant, the Group CEO, other non-executive Directors and members of executive management, advisers and/or external experts. 278 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report In 2024, the Chairman’s Forum covered topics such as strategic business considerations, geopolitical issues and economic outlook, shareholder engagements, Group-wide connectivity of non-executive Directors, key regulatory themes, employee engagement and financial performance. The Group Remuneration Committee Chair hosted dedicated forums with the chairs of principal subsidiaries to share key priorities for 2024 and the future. These sessions provided an opportunity for review and input on proposed pay outcomes and allocation, before approval by the Group Remuneration Committee. The principal subsidiaries are: Principal subsidiary Oversight responsibility The Hongkong and Shanghai Banking Corporation Limited Asia-Pacific HSBC Bank plc Europe and Bermuda (excluding UK ring-fenced activities) HSBC UK Bank plc UK ring-fenced bank and its subsidiaries HSBC Middle East Holdings BV Middle East, North Africa and Türkiye HSBC North America Holdings Inc. US HSBC Latin America Holdings (UK) Limited Mexico and Latin America Subsidiary director development The Group is dedicated to supporting the continuing professional development of its subsidiary directors. A global non-executive director update was held in September 2024, which was attended by subsidiary non-executive directors from across the Group. Updates were provided by the Group Chairman and Group CEO, along with presentations on net zero transition, digital acceleration, AI and geopolitics. The Bank Director Programme (launched in 2022), is designed to prepare HSBC executives and senior managers to assume roles as internal non-executive directors on our subsidiary boards. The programme covers six modules: governance and the role of a bank director; finance, capital and liquidity management; risk and regulation; strategy, leadership and culture; ESG and managing stakeholders; and technology and operations. The programme was delivered for a second time in 2024 to a cohort of 26 participants selected from across the Group. Many of those colleagues who have completed the programme have already taken up positions as internal non-executive directors on Group subsidiary boards. During 2024 we launched our inaugural Bank Chair Programme with a group of subsidiary board and committee chairs from across our regions. The programme represents a significant investment in subsidiary director development and is sponsored by the Group Chairman together with the Group Chief People & Governance Officer. It is a unique and forward-looking initiative, focused on developing our ‘chairs of the future‘ and equipping them to lead ‘best- in-class’ subsidiary boards and committees at HSBC. Part one of the programme was delivered in November 2024 and comprised three modules covering: the challenges faced by board and committee chairs; the evolving role of the chair; and navigating regulatory priorities. HSBC Holdings plc Annual Report on Form 20-F 279 Board and Group executive committees and working groups The Board delegates oversight of certain audit, risk, remuneration, nomination, technology and governance matters to its committees, which are each chaired by a non-executive Director. Only the Group Chairman and the independent non-executive Directors are members of Board committees. Members of the senior management team attend Board committee meetings, as appropriate. Details of the responsibilities and work carried out by each of the Board committees can be found in the respective committee reports starting on page 289 . The Chairman’s Committee is an ad hoc committee, which provides the Board with the opportunity to consider time-critical matters between scheduled Board meetings. All Board members are invited to attend Chairman’s Committee meetings. In addition to the Board committees, bespoke working groups have been established as an informal mechanism for smaller groups of Board members and senior management to meet to discuss emerging issues and upcoming Board matters, as appropriate. The GEC established a number of committees to support the senior management during 2024 in their running of the business and provide specialist oversight for matters delegated to them, including capital and liquidity, risk management, disclosure and financial reporting, restructuring and investment considerations, transformation oversight, ESG matters and talent and development. These committees also help fulfil their responsibilities under the Senior Managers and Certification Regime. The structure below sets out the current committees and working groups at the Board and Group Executive level as at 31 December 2024. The key changes in the year include: The Board Sustainability Working Group (‘SWG‘) was established, with effect from October 2024, to enhance the Board’s oversight of sustainability matters. On 25 January 2024, the Board approved that the Technology Working Group be demised and, in its place, established the creation of the Group Technology Committee (‘GTC’), effective from March 2024. The GTC was delegated responsibility to oversee the Group’s technology strategy and its alignment with the wider global strategy of the Group. In December 2024, the remit of the GTC (renamed the Group Technology and Operations Committee (‘GTOC‘)) was extended to cover oversight of global operations. The Board also approved a proposal from the Group CEO to combine the Group‘s executive level ESG Committee and Sustainability Execution Committee, with effect from October 2024. For more information on this Committee please refer to ‘Board matters considered on page 281 ‘. In addition, the Board approved that the GEC of 18 members be simplified and replaced by a new Group Operating Committee comprised of 12 members, with effect from 1 January 2025 (www.hsbc.com/who-we-are/our-people/senior-management). Board Chair: Sir Mark Tucker Chairman’s Committee Nomination & Corporate Governance Committee Group Audit Committee Group Risk Committee Group Remuneration Committee Group Technology and Operations Committee Informal Governance Chair: Sir Mark Tucker Chair: Sir Mark Tucker Chair: Brendan Nelson Chair: James Forese Chair: Dame Carolyn Fairbairn Chair: Eileen Murray Board Oversight Sub-Group Chair: Sir Mark Tucker See page 289 See page 293 See page 301 See page 309 See page 306 Sustainability Working Group Chair: Geraldine Buckingham Group Executive Committee Chair: Georges Elhedery 1 Acquisitions and Disposals Committee Group Disclosure and Controls Committee Group People Committee Group Risk Management Meeting Holdings Asset and Liabilities Committee Change Prioritisation and Oversight Committee Environmental, Social and Governance Committee Chair: Georges Elhedery Chair: Jonathan Bingham 2 Chair: Aileen Taylor Chair: Pam Kaur 3 Chair: Jonathan Bingham 2 Chair: Jonathan Bingham 2 Co-Chairs: Jonathan Bingham and Celine Herweijer 4 1 With effect from 2 September 2024, the role of Chair changed from Sir Noel Quinn to Georges Elhedery and with effect from 1 January 2025 the GEC was replaced by the Group Operating Committee and committees reporting into it are under review. 2 Pam Kaur appointed as Chair with effect from 1 January 2025. 3 Richard Blackburn appointed as Chair with effect from 1 January 2025. 4 With effect from 2 September 2024, Jonathan Bingham succeeded Georges Elhedery as Co-Chair and Pam Kaur appointed as sole Chair with effect from 1 January 2025. 280 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Board induction and training The Board recognises the importance of induction and training for its Directors. The Group Chief People & Governance Officer works with the Group Chairman to ensure that, on appointment, new Directors are provided with tailored and comprehensive induction programmes appropriate to their individual experiences and needs, including the process for managing conflicts. To ensure Directors’ contribution to the Board remains informed and relevant, all Board members receive appropriate training, both individually and collectively, throughout their time served on the Board. The Group Chief People & Governance Officer also helps to arrange and deliver the induction programme for new Board members, through formal briefings and introductory sessions with other Board members, senior management, legal counsel, auditors, tax advisers and regulators, as appropriate. Topics covered in the induction programme include but are not limited to: purpose and values; culture and leadership; governance and stakeholder management; Directors’ legal and regulatory duties; recovery and resolution planning; anti- money laundering and anti-bribery; technical and business briefings; and strategy. The induction process is often initiated before appointment to allow each new Board member to contribute meaningfully from appointment. The structure of the induction supports good information flows within the Board and its committees, as well as between senior management and non-executive Directors, providing a clear understanding of our culture and way of operating. Prior to his appointment as Group CEO becoming effective, Georges Elhedery received relevant training and legal advice from a firm of solicitors on 15 August 2024. Prior to her appointment as Group CFO, Pam Kaur received relevant training and legal advice from a firm of solicitors on 11 December 2024. Following this training, both Georges Elhedery and Pam Kaur confirmed their understanding of their obligations as directors of a listed issuer pursuant to Rule 3.09D of the Hong Kong Listing Rules. The approach to training is agreed annually, with key topics agreed for 2024 including cybersecurity, media interaction and the UK’s Senior Manager and Certification Regime. Training sessions were facilitated by both internal subject matter experts and by external presenters. Directors were also issued with training modules, which mirrored the mandatory training undertaken by employees. During 2024, this training covered topics including risk management, sustainability, health and safety, well-being, cyber-security, financial crime, and conduct. Non-executive Directors also discussed individual development areas with the Group Chairman as part of their ongoing performance discussions regarding their contributions on the Board. The Group Chief People & Governance Officer makes appropriate arrangements for any additional training needs identified using internal resources, or otherwise, at HSBC’s expense. Members of Board committees receive relevant training as appropriate. Further details on any specific training commissioned by Board committees can be found in the respective committee reports from page 289 onward. Directors may take independent professional advice at HSBC’s expense. Board Directors who serve on principal subsidiary boards receive training that is pertinent to circumstances and context relevant to those boards. Opportunities exist for the principal subsidiaries' committee chairs to share their understanding of specific areas with the Directors as part of the Chairman’s Forum. For further details, see ’The role of principal subsidiaries’ on page 277 . Directors’ induction and ongoing development in 2024 Director Induction Strategy and business briefings 2 Risk and control 3 Corporate governance, ESG and other reporting matters 4 Board global mandatory training 5 Geraldine Buckingham u u u u u Rachel Duan u u u u u Georges Elhedery 1 u u u u u Dame Carolyn Fairbairn u u u u u James Forese u u u u u Ann Godbehere u u u u u Steven Guggenheimer u u u u u José Antonio Meade Kuribreña u u u u u Kalpana Morparia u u u u u Eileen Murray u u u u u Brendan Nelson u u u u u Swee Lian Teo u u u u u Sir Mark Tucker u u u u u u Matter considered u Matter not considered 1 As part of the transition from Group CFO to Group CEO, Georges Elhedery completed an induction and development plan. 2 Directors participated in business strategy, market development and business briefings, which are global, regional and/or market-specific. Examples of specific sessions held in 2024 included: ’Technology and the future of artificial intelligence’, ’WPB customer-centricity improvement plan’, and ’Investor sentiments’. 3 Directors received risk and control training and briefings. Examples of specific sessions held in 2024 included: ’Cybersecurity’ and ’The UK’s Senior Manager Certification Regime’. 4 Directors received training on the UK’s Senior Managers’ and Certification Regime as well as development updates at Board meetings on: ’Board stakeholder engagement and management’ and ESG matters including regulatory changes. Directors received additional training through their attendance at forums such as the Chairman’s Forum, Remuneration Committee Chairs’ Forum and the Global Non-Executive Director Update. 5 Training modules, issued to all Directors, mirrored training undertaken by employees. This included: risk management, sustainability, health and safety, well- being, cybersecurity, financial crime and conduct and values, personal conflicts of interest, data quality, privacy and security and AI and our changing world. HSBC Holdings plc Annual Report on Form 20-F 281 Board matters considered During 2024, the Board remained focused on HSBC’s strategic direction and delivery, and overseeing Group performance. It considered performance against financial and other strategic objectives, key business challenges, emerging risks, sustainability and governance, business development, investor relations and the Group’s relationships with its stakeholders. The end-to-end governance framework facilitated discussion on strategy and performance by each of the global businesses and across the principal geographical areas, which enabled the Board to support executive management with its delivery of the Group’s strategy. The Board considers the impacts of its decision making on the Group’s stakeholders and examples of how the Board has taken principal strategic decisions. Board matters considered in 2024 Meetings at which topics were discussed 1 Main topic Sub-topic Jan Feb Mar May Jun Jul Sep Oct Nov Dec Strategy Group strategy u u u u u u u u u u Regional strategy/global business strategy u u u u u u u u u u Environmental, social and governance strategies u u u u u u u u u u Business and financial performance Region/global business u u u u u u u u u u Financial performance u u u u u u u u u u Financial Results and accounts 1 u u u u u u u u u u Dividends u u u u u u u u u u Group financial resource planning u u u u u u u u u u Risk Risk update u u u u u u u u u u Risk appetite u u u u u u u u u u Capital and liquidity adequacy u u u u u u u u u u Regulatory Regulatory and legal matters 2 u u u u u u u u u u Regulatory matters with regulators in attendance 3 u u u u u u u u u u External External insights 4 u u u u u u u u u u Technology Strategic and operational u u u u u u u u u u People and culture Purpose, values and engagement u u u u u u u u u u Governance Policies, terms of reference and delegations of authority u u u u u u u u u u Board/committee effectiveness u u u u u u u u u u Appointments and conflicts of interest u u u u u u u u u u Stakeholder/workforce engagement u u u u u u u u u u AGM and resolutions u u u u u u u u u u u Matter considered u Matter not considered 1 No Board meetings were held during April and August 2024. An ad hoc board meeting was held in October 2024. 2 Includes recovery and resolution planning, modern slavery and human trafficking, UK regulatory activities, and listing authority renewals. 3 Meetings attended by members of the Prudential Regulation Authority. 4 Includes presentations and/or talks from external parties, for example government officials or regulators. Key areas of focus The Board’s key areas of focus in 2024 are set out by theme below. Strategy and business performance The Group remains focused on building a sustainable platform for growth by increasing returns for investors, enhancing customer service, and creating capacity for future investment. In 2024, the Board reviewed progress within the Group’s global businesses and regions against its agreed strategy. At each Board meeting, the Board discussed the Group’s strategic performance and opportunities to track strategic execution and delivery. There was a continued focus in 2024 to build upon efforts to re-shape the Group to align with areas of strength in key markets. Disposals such as those completed in Canada and Argentina, and in progress in Germany, allow for a renewed focus on businesses that more closely align with the Group’s strategic aims, and support resource allocation to provide the strongest competitive advantage to ultimately benefit the wider Group and its customers. Upon his appointment, the new Group CEO has been driving a more dynamic organisational structure, to set the Group up to accelerate delivery of its strategic objectives and drive the next phase of its growth and development. Together, the executive team and the Board work to ensure that strategic decisions taken capitalise on opportunities that will work to drive profitability for shareholders and efficiencies with a more streamlined Group structure. Environmental, social and governance In October 2020, we announced our ambition to become a net zero bank by 2050. We believe supporting our customers’ transition benefits their businesses and helps generate long-term financial returns for our shareholders. The Board has overall responsibility for ESG strategy, overseeing executive management in developing the approach, execution, and associated reporting. To support senior leadership in the delivery of the ESG strategy, with effect from October 2024, the Board established a new sustainability working group, the SWG, comprised of five non-executive Directors. This working group engages with executive management on sustainability matters and provides oversight and guidance in relation to the Group’s sustainability activities. The SWG was actively involved in the consideration of our approach to net zero transition, covered in more detail within our ESG overview on page 18 . During the year, the Board also oversaw the rationalisation of the ESG Committee and Sustainability Execution Committee into a single governance body (named the ESG Committee). These Board and executive level governance forums support senior management in the operationalisation of the Group’s sustainability strategy, through the oversight of the sustainability execution programme. For further details see page 72 . In 2024, the Board oversaw the implementation of ESG strategy through regular dashboard reports and detailed updates including: review and approval of the net zero transition plan; deep dives on the sustainability execution programme; and updates on human rights. 282 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Financial decisions The Board and its dedicated committees approved key financial decisions throughout the year, including the Annual Report and Accounts 2023, the Interim Report 2024 and the first quarter and the third quarter Earnings Releases. In January 2024, the Board approved the 2024 financial resource plan. The Board monitored the Group’s performance against the approved plan, as well as the plans of each of the global businesses. The Board also approved the renewal of the various debt issuance programmes. As previously communicated, we established and achieved a target dividend payout ratio of 50% of earnings per ordinary share (’EPS’) for 2023 and 2024, excluding the special dividend. EPS for this purpose excludes material notable items and related impacts. Material notable items in 2023 and 2024 included the sale of our businesses in Canada and Argentina, the sale of our retail banking operations in France, the gain following the acquisition of SVB UK and the impairment of our investment in BoCom. We also exclude HSBC Bank Canada‘s financial results from the 30 June 2022 net asset reference date until completion on 29 March 2024, as the gain on sale was recognised through a combination of the consolidation of HSBC Bank Canada‘s results in the Group‘s results since this date, and the remaining gain on sale recognised at completion, inclusive of the recycling of related reserves and fair value gains on related hedges. The Board has adopted a dividend policy designed to provide sustainable cash dividends, while retaining the flexibility to invest and grow the business in the future, supplemented by additional shareholder distributions, if appropriate. The Board has established a target dividend payout ratio of 50% for 2025, subject to meeting capital requirements. In addition to dividend payments, HSBC announced a share buy-back of up to $2bn on 22 February 2024 and further share buy-backs of up to $3bn on 7 May 2024, 1 August 2024 and 30 October 2024, bringing the total announced during 2024 to $11bn. On 21 February 2024, an interim dividend of $0.31 per share for the 2023 full-year was announced, followed by a special dividend of $0.21 per share on 30 April 2024 and interim dividends of $0.10 each announced on 30 April 2024, 31 July 2024 and 29 October 2024. For further details of dividend payments, see page 461 . Risk, regulatory and legal considerations The Board, advised by the Group Risk Committee, promotes a strong risk governance culture that shapes the Group’s risk appetite and supports the maintenance of a strong risk management framework, giving consideration to the measurement, evaluation, acceptance and management of risks, including emerging risks. The Board considered the Group’s approach to risk including its regulatory obligations. A number of key frameworks, control documents, core processes and legal responsibilities were also reviewed and approved as required by the Board and/or its relevant committees. These included: – the Group’s risk appetite framework and risk appetite statement; – the individual liquidity adequacy assessment process; – the individual capital adequacy assessment process; – the Group’s obligations under the Modern Slavery Act and approval of the Modern Slavery and Human Trafficking Statement; – the Group Recovery Plan; – the efficacy of Model Risk Management ( ’ MRM ’ ) activities within the Bank; – the Group’s risk data aggregation and risk reporting framework aligned to the Basel Committee on Banking Supervision 239 Principles; – the Group ’ s PRA Operational Resilience self-assessment regulatory submission; – the internal controls framework; and – the revised matters reserved to the Board and terms of reference for the Board committees. The Board also reviewed and monitored the implications of geopolitical and macroeconomic developments during the year, both directly and by way of updates from the Group Risk Committee, and received regular updates on the Group’s risk profile, including in relation to financial crime risk. Technology Throughout the year, the Board received updates on technology and innovation from the Group Chief Operating Officer and Group Chief Information Officer. These included regular updates on the programme established to simplify the Group’s technology infrastructure, enhance system resilience, and accelerate digital transformation across the bank, following recommendations from the third-party review of technology strategy conducted in 2023. The Technology Governance Working Group was demised on 1 March 2024, and the Group Technology Committee (‘GTC‘) became effective from the same date. Since its establishment, the GTC has supported the Board in overseeing execution of the technology strategy with a focus on areas where technology is fundamental to strategic delivery including technology architecture, innovation, data and cybersecurity. In December 2024, the remit of the GTC (renamed the Group Technology and Operations Committee (‘GTOC‘)) was extended to cover oversight of global operations, reflecting changes to the Group’s organisational structure and in recognition of the importance of operations to delivery of the Group’s strategy. The Board received regular updates from the Chair of GTOC during the year. For further details of matters considered at GTOC, refer to the Group Technology and Operations Committee Report on page 306 . People and culture The Board is responsible for setting and monitoring the desired culture of the Group and dedicates time to people and culture related matters at Board and Committee meetings and in its engagements with management and the wider workforce. Each scheduled Board meeting begins with a ’culture moment’, which helps to ensure that the right cultural tone is set from the top and establishes the right cultural context for Board discussion. To help raise its awareness of employee and other stakeholder perspectives, Board meetings and dedicated reports feature insights into behaviours within the Group, which demonstrate alignment to its purpose and values. Board papers highlight relevant stakeholder considerations, including in connection with its workforce. The Board also gains valuable cultural insights through its many personal interactions with the workforce and other stakeholders. Additionally, the Board receives cultural insights from the all- employee Snapshot survey and broader reporting, which provides key data indicators, including on peoples' behaviours, sentiment and business outcomes. Following her appointment as Group Chief People & Governance Officer, Aileen Taylor has also introduced a new people and governance report that will be presented to the Board on a regular basis to help ensure that they have sight over such matters within the Group. The governance structure supporting the Board further facilitates effective oversight of key people and culture matters. Through the work of the Group Audit Committee, the Board monitors the nature of risk and control culture across the Group and sees the impact of its policies and practices and how they are embedded, through reports on matters such as whistleblowing, code of conduct breaches and investigations (for further information see the Group Audit Committee report on page 293 ). The Directors also learn about people and culture matters by way of presentations at the Chairman’s Forum. The principal subsidiary chairs report on their respective approaches to workforce engagement as well as what they have learned from such engagements and other cultural insights. HSBC Holdings plc Annual Report on Form 20-F 283 Each of the non-executive Directors is aligned to one or more of our Group Employee Resource Groups (’ERGs’): Ability, Balance, Embrace, Generations, Nurture and Pride. Attending ERG events provides Directors with opportunities to hear directly from employees on matters of cultural importance to the Group. Board engagement with management and the wider workforce continued to remain a strong area of attention, particularly with the ongoing activities carried out by the dedicated workforce engagement non-executive Director and in respect of the changes to the Group’s leadership. For further details of the work carried out by the workforce engagement non- executive Director, see page 284 . Governance During the year, the Board continued to oversee the overall governance of the Group. There are processes in place to ensure that the Board and its Committees receive timely and relevant information pertaining to Group governance matters and that this information is duly considered at the appropriate level. The Board allocated time at its scheduled meetings for Group governance matters and, during the year, these included regular reports on the activities of its Committees, reviews of Directors’ conflicts of interest, the review and approval of delegations of authority for specific Treasury matters and review of the broader Group Delegated Authority Framework, and oversight of the Board’s annual effectiveness review. The Board has due regard to its oversight of Group governance, including compliance with the UK Corporate Governance Code and the Hong Kong Corporate Governance Code and the duties of directors under the Companies Act 2006, when taking decisions. The Board and senior management continued to support further improvements to various governance initiatives to encourage simplification and promote effective decision making in the business. Guidance and training for Board and committee paper templates remained a focus in 2024 for global businesses and functions. In particular, a training session sponsored by the Group Chairman and the Group CEO took place to ensure that standards remained consistent and accurate across the Group. Additionally, the Group- wide delegations of authority framework was reviewed and approved by the Board and its relevant subsidiaries in February 2024. This decision was key to driving efficiencies in the execution of contracts and documents by directors and senior management. The Board, supported by the Nomination & Corporate Governance Committee, reviews the skills and experience of the Directors on an ongoing basis. This ensures that the composition of the Board and its Committees comprise the necessary skills, diversity, experience and competencies to discharge their responsibilities effectively. For further details of the review and changes to the Board, see the Nomination & Corporate Governance Committee report on page 289 . For further details of diversity of the Board, see page 274 . 284 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report The Board’s engagement with the workforce The Board is committed to engaging with the Group’s workforce, which takes place in a variety of ways across many forums, including small-scale exchange sessions and larger town halls. These interactions allow the Board to have meaningful engagement with colleagues and gain insights from the workforce which inform Board discussion and decision-making. These engagements also provide colleagues with the opportunity to share ideas and feedback on topics that are important to them with the Board directly. It is the responsibility of all Directors to engage with colleagues, and the Board’s dedicated workforce engagement non-executive Director, José Meade, leads on the delivery of such engagements. The Board recognises that a dedicated non-executive director, that champions workforce engagement, presents an inclusive opportunity to help ensure that the employee voice is being considered and accounted for in Board decision-making. 96 7,000+ Virtual/physical sessions attended by non-executive Directors Number of employees engaged physically/virtually 9 55 Countries where in-person engagement took place and many more virtually Virtual/physical sessions attended by workforce engagement non- executive Director 4,600+ Number of employees engaged virtually/physically by workforce engagement non-executive Director The Board’s workforce engagement programme In early 2024, the Board agreed a workforce engagement programme designed to ensure that Directors were afforded various opportunities to interact with colleagues across the Group. A non-exhaustive extract of the 2024 programme can be seen below. In structuring the programme, two mechanisms were used through which the Board engaged with the workforce. First, targeted events for Board members during Board travel or as individual Director location allowed, and second, Board members joined pre-existing Group employee events scheduled throughout the year. This approach allowed the Board to meet a diverse group of colleagues and participate in a broad range of different engagements. Engagement events were held in three broad formats; in-person events, larger- scale events, including town halls; and virtual events. Visits to Global Services Centres (‘GSCs’) took on a variety of formats, mixing exchange sessions with floor walks, networking lunches and town halls. Engagements across all formats were designed to promote open dialogue and two-way discussions between the attending Directors and colleagues. When designing the programme at the start of 2024, it took into account the Group’s key strategic areas of focus in place at the time and thereby worked to complement the Board’s priorities and agenda for 2024. Structuring the programme in this way meant that when the Board travelled for Board meetings to different regions, in-person engagements were arranged as part of the Board timetabling, which were highly valued by colleagues and Board members alike. A key component of the 2024 programme was visits to GSCs in locations that were convenient to scheduled Board travel. Further engagement events, town halls and meetings with the workforce were scheduled throughout the year either in person, where individual Director location allowed, or virtually. Board’s Workforce Engagement: 2024 Extract January February March May June September October December Colleague Engagement Lunch & Floor Walks Representation & Inclusion exchange session Black Leaders Action and Advisory Council (’BLAAC’) Strategy & Performance & Female Talent Engagement GB&M Floor walk Tour of Risk & Compliance floor and exchange with colleagues Engagement with respective Employee Resource Groups (’ERG’) US key talent & Market Securities Services team exchange Audience ERG Members and talent across a range of grades and businesses Leaders in the US market BLAAC members Senior and female UK- based talent GB&M colleagues MENAT colleagues ERG Global Leads US colleagues Location Shanghai New York Virtual London Singapore Dubai Virtual New York HSBC Holdings plc Annual Report on Form 20-F 285 The outputs and key themes arising from all engagements formed the bases of José Meade’s regular reports to the Board and facilitated Board discussions and decision-making. Further to José Meade’s commitment to attend the Group Executive Committee (’GEC’) and the Chairman’s Forum, by so doing this year he continued to help facilitate discussions on key themes, issues, employee sentiment, and other outcomes from the 2024 workforce engagements. His participation helped to ensure that good dialogue with senior executives and other Group subsidiary chairs was maintained and helped management to respond appropriately and in a timely manner to colleagues and their feedback. In addition, this allowed for José Meade to capture feedback from executives on workforce engagement and take their suggestions into consideration going forward. In his role, José Meade will continue to engage in these and other relevant forums during 2025. Workforce engagement non-executive Director activities during 2024 Key themes arose throughout the year such as, inclusion in the workplace, engagement with HSBC top talent, and Group Strategy. The themes guided conversations between colleagues and Board members and helped to shape the 2024 workforce engagement programme to ensure that it developed events that were reflective of these key topics. Non-executive Director sponsorship of our Global Employee Resource Groups (’ERGs’) continued during 2024. Each Director is aligned to a Global ERG and during the course of 2024 has met with their respective ERGs to discuss the ERGs’ strategy for the year and upcoming priorities. Directors will also take part in other ERG events where possible, and every effort is made to facilitate local ERG members meeting their aligned Director during planned Board travel. Set out below is a selection of workforce engagement events that were held in 2024 across multiple regions, attended by José Meade and other members of the Board where the occasion permitted. China – Directors completed a floor walk to meet with teams from across the Wealth and Private Banking business line, as well as the Pinnacle team. – Directors learnt about the financial planning journey of an HSBC customer, the role colleagues play and the digital capabilities available. – Connected with various ERG representatives and colleagues across functions to informally discuss and share experiences. New York – Attended the ‘HSBC Latin-Americans in NYC Day’ with key speakers including macro strategists and featuring external speakers on the Mexican economic outlook. – Met with a small group of leaders in HSBC to discuss inclusion and culture in the US market and consider any more progress needed. London – An engagement session was held with colleagues where views were sought on how colleagues interpreted and understood Group strategy and its practical application. – An event was held to promote female talent in the UK. Discussions held included the change of Group senior leadership, what it meant to individuals and teams, and the opportunities for female promotion. Hong Kong – Participated in several sessions that allowed for Directors to meet and network with Executive Leadership Programme colleagues. Singapore – Several sessions were held that were designed to promote ERG engagement. Directors participated in sessions including a Pride Panel as well as Ability, Sustainability and Balance Exchanges, to ensure HSBC is inclusive and supportive. Dubai – Participated in a varied schedule of workforce engagement events including a discussion with regional Embrace ERG members and networking with senior talent. Representation & Inclusion Exchange session New York, February Pride Panel Singapore, June 286 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Spotlight on our Global Service Centres (‘GSCs‘) HSBC currently has GSCs in eight countries that operate in over 50 markets and in 20 languages. The GSCs play a pivotal role in helping to support the wider HSBC business and are key in driving the technological capabilities of the Group. Continuing the focus on the Group’s GSCs in 2023 when José Meade visited Mexico City and Hyderabad, during 2024 he visited the GSCs in Krakow, Guangzhou and Cairo. Details of each visit are set out below. In July 2024, José Meade attended the GEC meeting where he discussed insights from his various engagements to date, including with the GSCs. Discussions at the GEC focused on key themes arising from the GSC visits, and how these could be further considered and taken forward by the executive team. “It is impossible to discuss strategy without considering the role of our GSCs. I have visited several of our GSCs over the past year, which have further highlighted to me their pivotal role in our operations and in developing our technological capabilities more broadly for the success of the Group through strategy execution.” José Meade , Dedicated Workforce Engagement NED GSC: Krakow, Poland (May 2024) 4,570 29 13 FTE permanent employees countries serviced languages supported – José Meade visited the Krakow GSC during planned Board travel to the UK. Sessions were held by the local team, including a ‘Tech and Ops Roadshow’ and Cybersecurity ‘Show & Tell’, where José Meade learnt how the Polish GSC looks to leverage technology in servicing their businesses and functions. – HSBC Krakow employees have looked to build upon the ‘energise for growth’ strategic pillar. They have partnered with local universities to develop branded HSBC courses to recruit top talent locally and leverage relationships with fellow businesses to collaborate and problem-solve using technology-forward solutions. GSC: Guangzhou, China (June 2024) 8,571 19 7 FTE permanent employees countries serviced languages supported – Brendan Nelson and José Meade visited the Guangzhou GSC during planned Board travel to Hong Kong. They participated in several sessions during their visit, including those on risk capabilities delivered by the GSC and systems developed in collaboration with business and Technology to help enhance data accuracy. Directors had the opportunity to share and exchange their experiences with local GSC employees on topics such as talent, GSC intelligence, operations, and the future of HSBC. – The local GSC in Guangzhou continues to act as a strategic centre specifically for markets across Hong Kong, Singapore and the UK. The visit underpinned how the GSC works to identify both issues and opportunities alike and deliver digital solutions in response, to the benefit of global business lines. GSC: Cairo, Egypt (September 2024) 2,243 23 3 FTE permanent employees countries serviced languages supported – Rachel Duan and José Meade visited the Cairo GSC during planned Board travel to the Middle East. A deep dive session with the local HR lead allowed for insights into how the Cairo GSC supports its employees and seeks to attract and retain top talent through development opportunities to help ensure that employees are engaged with their own growth within the organisation. Interactions with employees across Group operations, through local office floorwalks and networking lunches, allowed José Meade to understand how these policies work in practice and obtain first-hand feedback from employees on how the Group is working to promote their voice and ideas. – Group strategy remained a key theme during the GSC visit to Cairo, and Directors learnt more about the legacy and history of HSBC Egypt, as well as how it looks to progress in the future. Looking to the Future “In 2024 we connected with our colleagues across the business and throughout the world. We focused discussions on our strategy, inclusion and our GSCs. This approach enabled us to highlight to the Board and senior management the strengths of our inclusive workforce. By engaging with our talented workforce directly, understanding and valuing their contributions, we continue to work together to open up a world of opportunity and achieve our strategic aims. In 2025, I look forward to working with my fellow Directors and senior leadership to build on this engagement and design a programme aligned to the refreshed strategic priorities, and help support the Group‘s ambitions, guided by our values, for the benefit of its many stakeholders.“ José Meade HSBC Holdings plc Annual Report on Form 20-F 287 Board and committee effectiveness, performance and accountability Actions following the 2023 Performance Review As disclosed in last year’s report, the 2023 Board review concluded that the Board was performing well as an engaged, global governance body. The review highlighted, amongst other things, strong Board performance in areas including Stakeholder Accountability, Board Culture, Relationship with Senior Management, and Board Resources and Support, and identified some minor areas where further enhancement to the Board’s operating practices may be beneficial. During 2024, the Board successfully implemented the actions agreed to address the findings from the 2023 review. This included the establishment of the Group Technology Committee (‘GTC‘) to provide oversight of technology-related matters across the Group. The GTC’s remit was later expanded to include responsibility for Operations, and as a result was renamed as the Group Technology and Operations Committee (‘GTOC’). Further details of the work of the GTC/GTOC can be found on pages 306 to 308 . In addition, the Board approved a revised set of Key Performance Indicators, ensuring that the Board can effectively oversee the performance of the business, and receive insights into execution, trends, and emerging areas of risk. These are kept under regular review. Other actions have resulted in changes to the Board’s operating practices, including through greater training on effective Board reporting and enhanced stakeholder engagement plans to ensure the Board has the opportunity for regular engagement with the full spectrum of key stakeholder groups. 2024 Board and committee performance review process Performance reviews are an important part of the effective governance and operation of the Board and its committees. In 2024, the Nomination & Corporate Governance Committee invited Independent Board Evaluation (‘IBE’) to conduct a follow-up review to the 2023 external performance review. IBE is an independent external service provider with no other connection with the Group or any individual Directors. A comprehensive brief was provided to IBE to ensure focus on priority areas relevant to the Board and committees, IBE were also asked to provide an independent view as to whether the actions taken following the 2023 review had appropriately addressed the findings of that review. The review took the form of detailed 1-2-1 interviews with members of the Board and select members of management and advisers. IBE also attended and observed the Board and committee meetings in December 2024, and were provided with relevant meeting materials for review in advance. Initial observations were shared with the Board in December 2024, following which a report was compiled by IBE based on the views supplied by those interviewed as well as IBE’s observations as part of the review process. The process and findings set out in this report were shared and agreed with the Group Chairman, committee chairs and IBE. 288 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Findings and recommendations Overall, the review concluded that the Board and its committees continued to operate effectively, with the 2023 report findings having been appropriately addressed and a few minor areas identified for further improvement. Positive feedback and practices were highlighted in relation to succession planning for the Board and senior management, with the pace and robustness of the Group CEO selection process considered to be particularly strong. Key strengths highlighted included the efficient, inclusive and transparent communication with the wider Board, and regulators through the duration of the process. The good practices would be leveraged for future senior succession practices, with the importance of a sufficient handover period being noted. The report from IBE also confirmed that the culture of the Board continues to be regarded as a key strength. The major organisational and leadership changes that took place during 2024 further demonstrated the flexibility of the Board governance and operating rhythm, and its commitment in response to the needs of the Group and its stakeholders. It was acknowledged that the refresh of the senior leadership team and executive governance framework would require ongoing strong and open communication between the Board and the new Group Operating Committee. The new committee structure, in particular the establishment of the Group Technology and Operations Committee and the launch of the Sustainability Working Group, have enhanced Board oversight and support to management in these areas of critical strategic importance. Further, it was acknowledged that work continues to ensure the quality and insight of reporting to the Board, with concise reports that focus on the most material and emerging risks. IBE presented its report to the December 2024 Board meeting, and was present for the Board’s discussion, led by the Group Chairman, on the findings identified through IBE’s review. Actions arising from the Board and committee review will be monitored by the Board over the coming months. Further details on the findings specific to each committee can be found within the respective committee reports later in this section . HSBC Holdings plc Annual Report on Form 20-F 289 Nomination & Corporate Governance Committee “We have full confidence in Georges and the new senior leadership team. They have the skills, experience and track record necessary to deliver the next exciting phase of the Group’s development and growth.“ Sir Mark E Tucker Chair Nomination & Corporate Governance Committee Membership Key responsibilities Member since Meeting attendance in 2024 1 The Committee’s key responsibilities include: – overseeing succession planning and leading the process for identifying and nominating candidates for appointment to the Board and its committees; – overseeing succession planning and development of senior leadership; – overseeing and monitoring the corporate governance framework of the Company and its subsidiaries; and – ensuring that the corporate governance framework is consistent with relevant standards and best practices. Sir Mark Tucker (Chair) Oct 2017 9/9 Geraldine Buckingham May 2022 9/9 Rachel Duan Sep 2021 9/9 Dame Carolyn Fairbairn Sep 2021 8/9 James Forese May 2020 9/9 Ann Godbehere Sep 2023 9/9 Steven Guggenheimer May 2020 9/9 José Antonio Meade Kuribreña Apr 2019 9/9 Kalpana Morparia Mar 2023 9/9 Eileen Murray 2 Jul 2020 8/9 Brendan Nelson Sep 2023 9/9 David Nish 3 Apr 2018 3/3 Swee Lian Teo Oct 2023 9/9 1    In addition to the scheduled Committee meetings, various sub-groups of the Committee were established during the year to oversee the succession process for the Group CEO and other senior leadership changes. 2    Due to personal reasons, Eileen Murray was unable to attend the Committee meeting in September 2024. 3    David Nish retired from the Board on 3 May 2024. I am pleased to present the Nomination & Corporate Governance Committee report, which provides an overview of the Committee’s activities during 2024. Succession planning was central to the Committee’s agenda during the year. The main area of focus was the Group CEO succession planning, which was triggered by Sir Noel Quinn’s decision to retire as Group CEO. The Committee undertook a formal search process, which built upon the Committee’s long-term work to develop potential internal and external succession options for the Group CEO role. Additional details on this process, which unanimously concluded that Georges Elhedery was an outstanding candidate and the right person for the role, are set out later in this report. The rigorous and detailed work undertaken by the Committee over the prior years on Group CEO succession enabled us to conduct a thorough, robust and market-leading process, at pace. The process received positive feedback from key stakeholders, including from Committee members, as part of the 2024 Board and Committee performance review. The Committee also oversaw and supported the changes made to the Group’s organisational structure and leadership team. This included endorsing the establishment of the new Group Operating Committee (‘Group OpCo’), which serves as the leading decision-making executive committee of the Group. The Committee was fully supportive of Georges' recommendations for appointments to the Group OpCo. We have full confidence in Georges and the new senior leadership team. They have the skills, experience and track record necessary to deliver the next exciting phase of the Group’s development and growth. We were delighted to welcome Pam Kaur to the Board as an Executive Director, following her appointment as Group CFO. Pam is well known to the Board, having served as Group Chief Risk Officer since 2020, and in the expanded role of Group Chief Risk and Compliance Officer since 2021, and we look forward to working closely with her in this new capacity. Georges and Pam formed an effective partnership in their prior roles, and I am confident that the Group and its stakeholders will continue to benefit from this relationship in the years ahead. I would also like to thank Jonathan Bingham, for his excellent work and valuable contributions during his tenure as Interim Group CFO. We have continued to review our governance structure in light of evolving business needs to ensure that it remains appropriate in supporting the delivery of Group strategy and aligned with stakeholder expectations. During 2024, this led to several changes to our Board and Committee operations, including the establishment of the Group Technology Committee and of the Sustainability Working Group. We subsequently agreed to expand the remit of the Group Technology Committee to include Operations. Going forward, the 290 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Group Technology and Operations Committee will oversee the work of the new Group CIO and Group COO. Both forums have strengthened our governance oversight in the key areas of technology and sustainability, which are two critical elements of our strategy and risk management activity. Additional details on these forums can be found on pages 26 , and 306 . Separately, following the changes to the organisational structure announced in October 2024, the Committee considered what further enhancements to the Group’s governance arrangements were necessary. This resulted in two principal changes. Firstly, in order to strengthen the connectivity between the Group and our most significant subsidiary boards, the Committee recommended that Ann Godbehere and Brendan Nelson be appointed as directors of HSBC Bank plc and HSBC UK Bank plc, respectively. Secondly, the Committee approved changes to the Group’s executive governance framework and operating rhythm aimed at ensuring enhanced, clearer lines of accountability and decision-making. The annual Board and Committee performance review is critically important for ensuring that our governance practices meet the highest standards and work effectively. Following the externally facilitated review in 2023, conducted by IBE, the Committee invited them again to conduct a follow-up review in 2024. The objective was to provide assurance that the recommendations made had been addressed and that the Board and its Committees were working effectively. The findings and agreed actions from the 2024 review can be found from page 287 . Finally, there were changes to the UK and Hong Kong Corporate Governance Codes, which take effect from this year. Whilst our existing governance practices are aligned with the requirements of these revised Codes, the Committee continues to assess possible enhancements, monitoring market practices to ensure that we not only remain compliant, but also meet our objective of having world class governance. Sir Mark E Tucker Group Chairman Committee governance The Group Chief People & Governance Officer, in her capacity as the Group Company Secretary, attended all Committee meetings during the year. She supported the Group Chairman in ensuring that the Committee fulfilled its governance responsibilities. The Group CEO selectively attended Committee meetings, joining when required. Russell Reynolds Associates (’RRA’) supported the Committee and the management team with Board succession planning and appointments. RRA also provided support to management on senior management succession, and on development and recruitment. Representatives from RRA regularly attend meetings during the year and have no other connection with the Group or members of the Board. Board composition and succession The Committee continued to keep the composition of the Board and of its Committees under review, with assessments focused on the skills, knowledge, and experience necessary to oversee, challenge and support management, in the achievement of the Group’s strategic and business objectives. The Committee has a long-standing policy under which non-executive Directors are expected to serve two three-year terms. Any appointments that extend beyond this are reviewed on an annual basis, with consideration given to the future needs of the Board, and the performance and contributions of the individual. José (’Pepe’) Meade, Workforce Engagement non-executive Director, will complete his second three-year term at the 2025 AGM. As a result, a review was conducted, which took into account the broader needs of the Board and the Group, to determine whether his term should be extended. Pepe has played an important and valuable role, significantly enhancing the Board’s engagements with all colleagues and its understanding of their views. In order to allow him to build on this work, as the business embarks on a period of change under new leadership, the Committee agreed that his appointment should be extended by a year, leading up to the 2026 AGM, subject to his re- election by shareholders. It is the Board’s strong belief that this extension of Pepe’s appointment, given his performance and contributions to the Board in 2024, is in the best interests of the Group and all of its stakeholders. The Committee will continue to monitor the market throughout 2025 for potential candidates for appointment to the Board in both the short and medium-term. This will ensure that the Board has a pipeline of credible successors with the relevant skills, knowledge, and experience. Committee composition As communicated in the 2023 Annual Report and Accounts, the Board-level Group Technology Committee (’GTC’), chaired by Eileen Murray, was established on 1 March 2024. In December 2024, reflecting the changes to the Group COO role and its inclusion in the newly formed Group OpCo, the Committee approved changes to the remit of the GTC, adding responsibility for Operations, in addition to Technology. As a result, the GTC was renamed as the Group Technology and Operations Committee. Additional information on the work undertaken by the Group Technology and Operations Committee since its formation, along with its priorities for the year ahead, can be found from page 306 . As part of the decision to establish the Sustainability Working Group (’SWG’), it was agreed that Geraldine Buckingham would be appointed as its Chair. The Committee also reviewed the composition of the Board Committees, to ensure that it remains appropriate, with consideration given to the Board diversity and inclusion policy, and to ensure effective use of the skills and expertise of the Directors. Several changes to the Committees’ composition were agreed during the year. The Committee will continue to review the Committees’ composition to ensure that it remains appropriate. Board diversity The Board recognises the importance of gender, social and ethnic diversity, and the benefits that diverse identities and backgrounds bring to Board effectiveness. Representation is a consideration in succession plans and appointments at both Board and senior management level, as well as more broadly across the Group. The Committee also considers representation on Board Committees when reviewing their composition. At the end of 2024, the Board had 54% female representation, with seven female Board members out of a total of 13, which is above the year-end 2025 target set by the FTSE Women Leaders Review. Following Pam Kaur’s appointment as an Executive Director on 1 January 2025, female representation increased to 57%. The Board now also has two female leaders holding one of the four senior positions. These four senior roles, as defined by the FTSE Women Leaders Review, are Chair, Chief Executive Officer, Senior Independent Director and Chief Financial Officer. Beyond gender, the Committee remains focused on enhancing the ethnic heritage diversity of the Board, reflecting the international nature of our business and HSBC’s Asia heritage. The Board’s diversity and inclusion policy highlights our commitment to diversity, while providing specifics on the approach taken to achieving our relevant ambitions. Additional details on activities aimed at improving representation across senior management and the wider workforce, together with supporting statistics, can be found on page 62 . The Board’s diversity and inclusion policy is available at www.hsbc.com/who-we-are/our-people/board-of-directors/board- responsibilities HSBC Holdings plc Annual Report on Form 20-F 291 Group CEO succession Following the announcement on 30 April 2024 that Sir Noel Quinn would retire as Group CEO, the Committee oversaw a rigorous formal search, selection and appointment process to identify the next leader of the Group. A high-level overview of the process is shown in the graphic below. The Committee’s focus on Group CEO succession planning since Sir Noel Quinn’s appointment in 2020, supported its objective to complete the search at pace and provide clarity on future leadership to the organisation and our stakeholders. The process to select Sir Noel Quinn’s successor was led by the Group Chairman and the Committee, who were supported by a leading external search partner. Key steps in the process included: – The establishment of a committee sub-group, comprising the Group Chairman, Senior Independent non-executive and Committee Chairs, to oversee the process. Regular updates were provided to the broader Committee through weekly update notes from the Group Chairman, who also engaged with the Group’s principal regulators throughout the process. – Agreement on the regulatory role profile and key selection criteria, which included key technical, experiential and leadership competencies that were determined to be essential for the successful candidate. – The assessment of all internal and external candidates against this role profile and selection criteria, with the support of a leading external search firm. Candidates also provided a written articulation of their strategic vision for the Group, which was followed by the shortlisting of the final candidates. – Thorough referencing and background checks, which were conducted on the final candidates, to provide the Committee with a deeper understanding of their character and motivations. – The final candidates were interviewed with all non-executive Directors. They also presented their strategic vision for the Group to the Committee and participated in Q&A. – Interview feedback, which included non-executive Directors scoring each candidate against the successful selection profile, as well as qualitative feedback based on candidate interviews, presentation and Q&A, which was collated and discussed by the Committee. Establishment of a sub-group of the Committee Agreement of the regulatory role profile and success criteria Internal and external candidate assessment Candidate interviews with Group Chairman and NEDs Presentations to Committee on strategic vision and Q&A Announcement of appointment of Georges Elhedery as Group CEO Board approval following receipt of regulatory approval Regulatory engagement, application and interview Decision on preferred candidate Feedback collated and discussed by the Committee Based on the information gathered on the candidates over the past four years, as well as the succession process, the Committee selected Georges Elhedery as the preferred candidate. Georges then participated in the required regulatory interviews with the PRA and FCA, after which the Committee received confirmation of regulatory approval, and announced Georges’ appointment on Wednesday 17 July 2024. The Committee also agreed on a comprehensive induction and development plan to best support Georges’ transition to Group CEO. The Committee continues to oversee this plan and receives regular updates on progress. Senior executive succession and development Jonathan Bingham, Global Financial Controller, was appointed as Interim Group CFO with effect from 2 September 2024. This interim appointment allowed Georges to focus on his new responsibilities as Group CEO, whilst the process to identify a permanent successor was conducted. The process to select the permanent Group CFO was led by the Group CEO, with the support of the Group Chief People & Governance Officer and a leading external search firm. Consistent with the approach taken for the selection of Georges Elhedery as Group CEO, internal and external candidates were considered and assessed against the agreed role profile and selection criteria. Following the completion of interviews with members of the Board, Pam Kaur was selected to join the Board as an Executive Director and Group CFO. Following Pam’s selection for the role of Group CFO, Richard Blackburn, Global Head of Traded and Treasury Risk Management & Global Head of Risk Analytics, was appointed as Interim Group Chief Risk and Compliance Officer with effect from 1 January 2025. An update on permanent succession for this position will be provided in due course. In conjunction with the announcement on the new, simpler organisational structure, designed to unleash the full potential of HSBC, the Committee also approved several changes to the senior leadership team, based on the recommendations of the new Group CEO. These included the approval of the new Group OpCo terms of reference, together with its membership. Members of the Committee were closely involved in the assessment and selection process for roles on the new Group OpCo, including the roles of CEO of Corporate and Institutional Banking and Western Markets, and the split of the previous Group COO’s responsibilities into two new Group OpCo roles – those of Group CIO and Group COO. Committee performance review The 2024 annual review of the effectiveness of the Board and Board Committees, including the Nomination & Corporate Governance Committee, was conducted externally by IBE. It determined that the Committee continued to perform effectively. There were no specific actions identified for the Committee. The review acknowledged the Committee’s role in the Group CEO succession process, which was very well managed, and identified several good practices that would be applied to future succession processes for key roles across the Group. Additional details on the annual review of the Board and Committees’ effectiveness can be found from page 287 . 292 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Subsidiary governance In line with the subsidiary accountability framework, the Committee continued to oversee the corporate governance and succession arrangements across the principal subsidiary portfolio. Additional details on the subsidiary accountability framework are set out on page 277 . Given the improvement in quality of the succession planning updates over the previous years, the Committee agreed that, for 2024, the material subsidiary plans no longer required direct oversight. Principal Subsidiaries continued to oversee plans for their respective subsidiaries, with the Committee retaining the ability to review material subsidiary succession plans, where necessary. The Committee continued to support and seek opportunities to enhance subsidiary connectivity. That included leveraging the Chairman’s Forum and Remuneration Committee Chairs’ Forum, which regularly brought together the chairs of the principal subsidiaries to discuss issues of common interest. In order to further strengthen connectivity between the Board and the most significant subsidiary boards, the Committee took relevant steps with two of the principal UK regulated entities. It recommended that Ann Godbehere be appointed to the HSBC Bank plc board and Brendan Nelson be appointed to the HSBC UK Bank plc board. Given that the Board has benefitted from James Forese’s leadership of the HSBC North America Holdings Inc. Board, the Committee is confident that these appointments will enhance governance arrangements and connectivity. The committee continues to provide support and look for opportunities to enhance subsidiary connectivity through non- executive Director events and other engagement forums. The Group’s flagship events held in 2024 included the Bank Director Programme and the Bank Chair Programme. The Group Chairman also hosted an annual Global NED Update, which was attended by over 200 subsidiary non-executive Directors. Jan Feb Apr May Jun Jul Sep Sep Dec Board composition and succession Board composition, including succession planning and skills matrices u u u u u u u u u Executive talent and development Senior executive succession and appointments u u u u u u u u u Governance Board and corporate governance developments u u u u u u u u u Board and committee performance review u u u u u u u u u Subsidiary governance u u u u u u u u u Subsidiary appointments u u u u u u u u u u Matter considered u Matter not considered HSBC Holdings plc Annual Report on Form 20-F 293 Group Audit Committee “Given changes in the external operating environment and as a result of the reorganisation of the Group, the Group Audit Committee will play an important role in monitoring the impact on the control environment during this period of change.“ Brendan Nelson Chair Group Audit Committee Membership Key responsibilities Member since Meeting attendance in 2024 1 The Committee’s key responsibilities include: – monitoring and assessing the integrity of the financial statements, formal announcements and regulatory information in relation to the Group’s financial performance, as well as significant accounting judgements; –  reviewing the effectiveness of internal controls; –  reviewing management’s arrangements for compliance with prudential regulatory financial reporting; –  reviewing the annual financial resource plan, including annual budget, capital expenditure and business plans; –  reviewing and monitoring the relationship with the external auditor and overseeing its appointment, remuneration and independence; –  overseeing the Group’s policies, procedures and arrangements for capturing and responding to whistleblower concerns and ensuring they are operating effectively; and – overseeing the work of Global Internal Audit and monitoring and assessing the effectiveness, performance, resourcing, independence and standing of the function. Brendan Nelson (Chair) Sept 2023 10/10 Geraldine Buckingham 2 Oct 2024 2/2 Rachel Duan 3 Apr 2022 9/10 James Forese 3 May 2020 9/10 Ann Godbehere 4 Feb 2024 7/7 Eileen Murray 5, 6 June 2022 6/8 David Nish 7 May 2016 4/4 Notes: 1    These included one ad hoc meeting held on 31 January 2024 and a joint meeting with the Group Risk Committee (’GRC’), which took place on 18 June 2024. 2    Geraldine Buckingham was appointed as a member of the GAC on 1 October 2024. 3    Rachel Duan and James Forese were unable to join one ad hoc GAC meeting, due to prior commitments. 4    Ann Godbehere joined the GAC on 21 February 2024. 5    Eileen Murray stepped down from the GAC on 1 October 2024. 6    Eileen Murray was unable to attend the meeting held on 25 September 2024 due to personal reasons. 7    David Nish stepped down from the GAC on 3 May 2024 upon his retirement from the Board. I am pleased to introduce the Group Audit Committee (‘GAC’) report, my first as GAC Chair. In this report, I have provided an overview of the key matters and issues considered by the GAC in 2024. I assumed the role of GAC Chair following the publication of the FY23 results and Annual Report in February 2024, succeeding David Nish. I would like to acknowledge and thank David for his leadership of the GAC during his time as Chair. Internal controls have been a key focus during 2024, and the GAC assumed responsibility for the oversight of all internal controls - which was previously limited to those related to financial reporting. We have overseen management’s proposed enhancement of controls, including the creation of a new Group Chief Controls Oversight Office function. This will enhance effective operation and monitoring of the Group’s control environment. This will include the work to support preparations for the Board's declaration on the effectiveness of material controls, which will be required from 2026 under the 2024 UK Corporate Governance Code. Given changes in the external operating environment and as a result of the reorganisation of the Group, the GAC will have an important role in monitoring the impact on the control environment during this period of change. A key element of this continues to be our progress in enhancing the control environment regarding the Group’s regulatory reporting obligations. Remediation of errors in regulatory reporting and achieving a sustainable controls environment over these returns, remains a priority for the Committee, management and our regulators globally. Further details on progress under this programme can be found later in this report. The GAC received regular updates from the Group Chief Financial Officer and Global Financial Controller on key financial reporting issues and the related management judgements. These included spending significant time on the appropriateness and clarity of the Group’s market guidance, including in relation to returns, costs and expected credit losses (‘ECL’). Given the uncertain global macroeconomic environment, the GAC carefully considered its disclosures on ECLs, in particular those relating to the Group’s exposure to the mainland China and Hong Kong corporate real estate sectors. I have spent time with several of the subsidiary audit committee chairs, building on the important connectivity between the Group and subsidiaries established over the past few years. Regular engagement with our subsidiary audit chairs will continue to be an important part of the GAC’s governance practices through 2025 and beyond. The GAC also oversaw the External Quality Review of the Global Internal Audit function during the year, which was conducted by Deloitte in accordance with the Internal Audit Code. I am pleased to report that the function is highly valued across the HSBC Group, and received a ’Generally Confirms’ rating, which is the highest attainable under the internal audit International Professional Practices framework. Finally, I was pleased that the review of the GAC’s performance concluded that the GAC continued to operate effectively. Further details on the review, which also considered the performance of the Board and the other Board committees, can be found as part of the 'How we are governed' section on page 287 . Brendan Nelson Chair of the Group Audit Committee 294 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Committee governance The Committee operates under delegated authority from the Board, and advises the Board on matters concerning the Group’s financial reporting requirements. The Committee Chair reports on the key matters and discussions at the subsequent Board meeting, and the Board also receives copies of the Committee agendas and minutes. This supports the Board‘s oversight of the work carried out by management, Global Internal Audit and PricewaterhouseCoopers LLP (‘PwC‘), as the Group’s statutory auditor. The Nomination & Corporate Governance Committee has confirmed that each member of the Committee is independent according to the criteria of the US Securities and Exchange Commission, and the Committee and individual members continue to possess competence relevant to the banking and broader financial services sector in which the Group operates. The Board has determined that Brendan Nelson and Ann Godbehere are the audit committee ‘financial experts’ for the purposes of section 407 of the Sarbanes-Oxley Act and have recent and relevant financial experience for the purposes of the UK and Hong Kong Corporate Governance Codes. The Committee Chair continued to engage with various key stakeholders, including the UK PRA, to understand their views, key themes and areas of focus within the broader financial services sector on matters relevant to the work of the Committee. This included trilateral meetings involving the Group’s external auditor, PwC, and the UK PRA. Members of senior management routinely attended meetings of the GAC. The external auditor attended all meetings. The Chair holds regular meetings with management, Global Internal Audit and PwC, as the external auditor, to discuss relevant items as they arose during the year outside the formal Committee process. The Committee also regularly meets with the internal and external auditors, without management present. Private discussions are also held with relevant members of senior management, including the Group Chief Financial Officer and Group Chief Risk and Compliance Officer. Matters considered during 2024 Jan Feb Apr Jun Jul Sep Oct Dec Reporting Financial reporting matters including: – review of financial statements, ensuring that disclosures are fair, balanced and understandable – significant accounting judgements – going concern assumptions and viability statement – supplementary regulatory information u u u u u u u u Review of the Group's annual financial resource plan u u u u u u u u ESG and climate reporting u u u u u u u u Regulatory reporting-related matters including: – oversight of the Group's engagement with PRA-requested skilled person reviews – reports from the principal subsidiaries on progress and learnings in relation to their local remediation efforts – adequacy of resources across Finance and other SME teams to deliver the Group-wide remediation programme u u u u u u u u Certificates from principal subsidiary audit committees u u u u u u u u Control environment Control enhancement programmes u u u u u u u u Group transformation u u u u u u u u Review of deficiencies and effectiveness of internal financial controls u u u u u u u u Internal audit Reports from Global Internal Audit u u u u u u u u Audit plan updates, independence and effectiveness u u u u u u u u External audit Reports from external audit, including external audit plan u u u u u u u u Appointment, remuneration, non-audit services and effectiveness u u u u u u u u Compliance Accounting standards and critical accounting policies u u u u u u u u Corporate governance codes and listing rules u u u u u u u u Whistleblowing Whistleblowing arrangements and effectiveness u u u u u u u u u Matter considered u Matter not considered HSBC Holdings plc Annual Report on Form 20-F 295 How the Committee discharged its responsibilities Financial, sustainability and climate reporting The GAC is responsible for reviewing the Group’s financial reporting during the year, including the Annual Report and Accounts, Interim Report, quarterly earnings releases, analyst presentations and Pillar 3 disclosures. Furthermore, as an area of expanded assurance, the GAC, supported by the executive-level ESG Committee, provided close oversight of the disclosure risks in relation to sustainability and climate reporting, amid rising stakeholder expectations. The work will continue throughout 2025 in partnership with the Sustainability Working Group. As part of its review, the GAC: – challenged and evaluated management’s application of critical accounting policies and material areas in which significant accounting judgements were applied; – reviewed and challenged management ’ s judgements and disclosures in relation to impairment reviews of HSBC ’ s investment in Bank of Communications Co., Limited, performed using a value-in-use methodology; – gave particular regard to the analysis and measurement of IFRS 9 ECL, including the key judgements and management adjustments made in relation to the forward economic guidance, underlying economic scenarios and reasonableness of the weightings, as well as modelling and adjustments; – focused on preparation for disclosures to ensure these were consistent, appropriate and could be validated under the relevant financial and governance reporting requirements; – tracked and monitored delivery against the external audit plan; and – provided advice to the Board on the form and basis underlying the long-term viability statement. We also received independent third-party limited standalone assurance on the Group’s climate reporting. Further details can be found in ’Assurance relating to ESG data’ on page 42 . In conjunction with the GRC, the GAC considered the current position of the Group, along with the emerging and principal risks, and carried out a robust assessment of the Group’s prospects. This assessment informed the GAC’s recommendation to the Board on the Group’s long-term viability. The GAC also undertook a detailed review before recommending to the Board that the Group continues to adopt the going concern basis in preparing the annual and interim financial statements. Further details can be found on page 38 . Following the October 2024 announcement in relation to the Group's organisation structure, the GAC oversaw management proposals regarding the external disclosure requirements following the reorganisation of the Group around four core business. The GAC reviewed the financial resource plan, prior to approval by the Board, which helped to support the revised guidance, including in relation to the expected benefits from the reorganisation and simplification of the Group, which were communicated to the market as part of the FY24 results. In relation to the expected benefits specifically, the GAC considered the independent validation report provided by a third party, and which provided additional comfort on the appropriateness of management's proposed guidance. The GAC will complete a thorough review of the pro-forma historical financial performance for 2023 and 2024, based on the new organisational structure, prior to their communication to the market next month. Financial planning The GAC reviewed and debated the robustness of the financial plan for the financial years 2025 to 2029. The GAC considered the risks and challenges, and ensured that the process to develop the financial resource plan was robust and that the assumptions driving the financial performance of the Group were appropriate and subject to appropriate challenge. Fair, balanced and understandable Following review and challenge of the disclosures, the Committee recommended to the Board that the Annual Report and Accounts, taken as a whole, were fair, balanced and understandable. These provided the shareholders with the necessary information to assess the Group’s position and performance, business model, strategy and risks facing the business. The Committee reviewed the draft Annual Report and Accounts 2024 and results announcements to provide feedback and challenge to management. It was supported by the work of the Group Disclosure and Controls Committee, which also reviewed and assessed the Annual Report and Accounts 2024 and investor communications. This work enabled the GAC to discharge its responsibilities and support the Board in making the statement required under the UK and Hong Kong Corporate Governance Codes. Internal controls During the year, the Board approved changes to the scope of the GAC’s responsibilities in relation to internal controls. These changes saw the GAC assume responsibility for oversight of the effectiveness of all internal controls. This reflected the GAC’s experience in overseeing internal controls over financial reporting, and the responsibility that will apply from the 2026 financial year to make a declaration on the effectiveness of material controls under the 2024 UK Corporate Governance Code. Regular updates and confirmations are provided to the GAC on the action management takes to remediate any failings or weaknesses identified through the operation of the Group’s framework of internal financial controls. This is supplemented by reviews of these controls by the second line of defence and internal audit, and the external auditors, who provided additional comfort to the Committee on the effectiveness of these controls. These reviews confirmed that there were no material weaknesses as at the year-end. These updates included the Group’s work on compliance with section 404 of the US Sarbanes-Oxley Act. Based on this work, the GAC recommended that the Board support its assessment of the internal controls over financial reporting. The GAC continued to focus on controls over the Group's Insurance business following the implementation of the IFRS 17 ‘Insurance Contracts‘ accounting standards. The GAC welcomed management's progress in improving the control environment during 2024. However, there remains further work to ensure that the Insurance business embeds the control standards expected on a consistent basis across all markets. For further details of how the Board reviewed the effectiveness of key aspects of internal control, see page 354 . Regulatory reporting Regulatory reporting has been a key priority for the Committee over recent years and will continue to be a priority for 2025. The Committee is focused on monitoring the programme of work to address the quality and reliability of regulatory reporting to meet regulatory expectations. Management provided updates on the status of ongoing HSBC- specific external reviews, and discussed the issues and themes identified from the increased assurance work and focus on regulatory reporting. The GAC also discussed root cause themes, remediation of known issues and new issues identified through the increased assurance work. The Committee challenged management on remediation plans, to assess whether there was a sustainable reduction in issues and that dependencies with other key programmes were well understood. Further details can be found in the ‘Principal activities and significant issues considered during 2024’ table on page 298 . 296 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Adequacy of resources The Committee is responsible, under the Hong Kong Listing Rules, to annually assess the adequacy of resources of the accounting, internal audit, financial reporting and ESG performance and reporting functions. It also monitored the legal and regulatory environment relevant to its responsibilities. The Committee determined that each of the functions provided thorough information with regards to people capacity and capability and endorsed the annual update to the Board. In recognition that the enhancement of the Group’s regulatory reporting processes and controls was a priority for both the Committee and the Group’s regulators, the GAC also considered the adequacy of regulatory reporting resources as part of the year-end activities. Connectivity with principal subsidiary audit committees The Committee recognises the importance of strong connectivity and alignment with principal subsidiary audit committees. The mechanisms to support this are well established and continued to operate effectively during the year. This included information sharing and targeted collaboration between audit committee chairs and management to ensure there was appropriate focus on the local implementation of programmes. During 2024 this included a particular focus on regulatory reporting, with the subsidiary audit committee chairs, chief executive officers and chief financial officers of the Europe, Asia-Pacific, Middle East and Americas regions attending Committee meetings to update on progress, share local challenges, and areas of focus with the Committee. In addition to the Chair‘s regular meetings with the audit chairs of the Group’s UK, European, US, Middle Eastern and Asian principal subsidiaries, and their attendance at GAC meetings for relevant items, they provided quarterly reports on their local audit committee activity. This included updates on internal control, and financial and regulatory reporting matters that are significant from a local or enterprise-wide perspective. In addition, the Committee received escalations from subsidiary boards for information and action, as appropriate. The connectivity between the Group and subsidiary audit committees is supplemented by attendance at committee meetings by the Group and subsidiary audit committee chairs. On a half-year basis, principal subsidiary audit committees provided certifications to the Committee that regarded the preparation of their financial statements, adherence to Group policies and escalation of any issues that required the attention of the Committee. These certifications also included information regarding the governance, review and assurance activities undertaken by principal subsidiary audit committees in relation to prudential regulatory reporting. External auditor The GAC has the primary responsibility for overseeing the relationship with the Group’s external auditor, PwC. PwC completed its tenth audit, providing robust challenge to management and sound independent advice to the Committee on specific financial reporting judgements, sustainability reporting and the overall control environment. The senior audit partner is Matthew Falconer, who assumed the role as part of the regular rotation of audit partners in support of the independence of PwC for the 2024 financial year. The Committee reviewed the external auditor’s approach and strategy for the annual audit and received regular updates on the audit, including observations on the control environment. Key audit matters discussed with PwC are set out in its report on page 361 . The Committee reviewed, and concluded that, all requirements of the Financial Reporting Council's (‘FRC’) Audit Committee and the External Audit: Minimum Standard (’the Standard’), where relevant, were met during 2024. The GAC reviewed the PwC external audit approach, including the materiality, risk assessment and scope of the audit. PwC highlighted the changes being made to its approach to enhance the quality and effectiveness of the audit. PwC’s plan supports its, and the GAC’s, focus on audit quality through standardisation, centralisation and the use of technology. Following commitments made as part of the audit tender process conducted in 2022, specifically in relation to plans for greater utilisation of digital solutions on the HSBC audit, the Committee received a demonstration of how PwC were leveraging digital audit tooling as part of the audit of the Group’s accounts. PwC continue to look for opportunities to further leverage technology to enhance the efficiency, robustness and quality of the Group statutory audit. Effectiveness of external audit process The GAC assessed the effectiveness of PwC as the Group’s external auditor, using a questionnaire that focused on the overall audit process, its effectiveness and the quality of output. In addition, the GAC Chair, certain principal subsidiary audit chairs and members of the Group Executive Committee met with the Senior Audit Partner to discuss findings from the questionnaire and provide in-depth feedback on the interaction with the PwC audit team. Key strengths identified through the review included strong independent challenge, the knowledge of the audit team and the good understanding of the Group‘s businesses and associated risks that were demonstrated through the course of the audit. The review also identified some areas for improvement, including with regards to communication and coordination with management, and planning. The GAC receives regular updates from PwC and management on performance across the audit quality indicators, which provides wider visibility of ongoing and emerging issues. There were no breaches of the policy on hiring employees or former employees of the external auditor during the year. The lead audit partner attends all Committee meetings and the GAC Chair maintains regular contact with the senior audit partner and his team throughout the year. During the year, the Committee considered the impact of the fine and six-month suspension on PwC’s China Firm upon PwC UK‘s ability to act as auditor for the Group. The GAC received assurance from PwC’s Global Leadership Team that the issues leading to the sanctions did not impact the Group, and that PwC were taking appropriate steps to prevent reoccurrence. The GAC will continue to monitor until the completion of the suspension, which is due to expire during March 2025. Independence and objectivity The Committee assessed any potential threats to independence that were self-identified or reported by PwC. Based on the reporting received, PwC are deemed to be independent and PwC, in accordance with professional ethical standards and applicable rules and regulations, provided the GAC with written confirmation of its independence for the duration of 2024. The Committee confirms it has complied with the provisions of The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 for the financial statements. Following the Committee‘s recommendation to reappoint PwC as the auditor, shareholders passed the associated resolution at the 2024 AGM. At the same time, shareholders authorised the Committee to determine PwC‘s audit fee for the financial year ended 31 December 2024, which was approved by the Committee at its July 2024 meeting. HSBC Holdings plc Annual Report on Form 20-F 297 Non-audit services The Committee is responsible for setting, reviewing and monitoring the appropriateness of the provision of non-audit services by the external auditor. It also applies the Group’s policy on the award of non-audit services to the external auditor. The non-audit services are carried out in accordance with the external auditor independence policy to ensure that services do not create a conflict of interest. All non-audit services are either approved by the GAC Chair, or by Group Finance when acting within delegated limits and criteria set by the GAC. The non-audit services carried out by PwC included 16 engagements approved during the year where the fees were over $100,000 but less than $1m. Group Finance, to whom the GAC has delegated authority for non-audit services below $1m, considered that it was in the best interests of the Group to use PwC for these services because they were: – audit-related assurance services, with the work closely related to work performed in the audit and in some instances required by local regulators to be performed by the external auditor; or – other assurance services that involve obtaining appropriate audit evidence to express a conclusion designed to enhance the degree of confidence of the intended users other than the responsible party about the subject matter information, including attestation reports on internal controls of a service organisation primarily prepared for and used by third-party end users. There were no engagements during the year where the fees exceeded $1m, above which GAC approval would be required. 2024 2023 Auditors‘ remuneration $m $m Total fees payable 146.6 155.9 of which fees for non-audit services 43.8 46.1 Ratio of non-audit fees to audit fees 1 43.0% 42.0% 1  The calculation is on a simple ratio and is not based on FRC guidance on non- audit fees ratio thresholds. Whistleblowing and speak-up culture An important part of HSBC’s values is speaking up when something does not feel right. HSBC remains committed to ensuring colleagues have confidence to speak up and acting when they do. A wide variety of channels are provided for colleagues to raise concerns, including the Group’s whistleblowing channel, HSBC Confidential (see page 78 for further information). The Board has delegated responsibility to the GAC to oversee the effectiveness of HSBC’s whistleblowing procedures. The Chair of the GAC is a Group Senior Manager (’SMF7’), and has a prescribed responsibility as the Whistleblowers’ Champion to ensure integrity of HSBC’s policy and procedure on whistleblowing and protecting those who report concerns. As part of his responsibility, the GAC Chair reports to the Board on the GAC’s oversight of whistleblowing as part of his regular reporting updates. The Group Head of Regulatory Compliance regularly updates the GAC on whistleblowing effectiveness, including controls assessments and internal audit findings. In 2024, the GAC has been briefed on actions to improve the timeliness of HSBC Confidential investigations against internal standards. The Committee is also briefed on culture and conduct risks from whistleblowing cases and actions taken. In 2024, the GAC Chair also met with the Group Head of Regulatory Compliance for briefings on significant whistleblowing matters. Global Internal Audit The primary role of the Global Internal Audit function is to help the Board and Management to strengthen the organisation’s ability to create, protect and sustain value. Global Internal Audit does this by providing independent, risk based and objective assurance on the design and operating effectiveness of the Group’s governance, risk management and control framework and processes, prioritising the greatest areas of risk. The independence of Global Internal Audit from day-to-day line management responsibility is fundamental to its ability to deliver objective audit coverage of all parts of the Group. Global Internal Audit is free from interference by any element in the organisation, including on matters of audit selection, scope, procedures, frequency, timing, or internal audit report content. The Group Head of Internal Audit reports to, and meets frequently with, the Chair of the GAC. In addition, in 2024, there was continued heightened interaction between Global Internal Audit Senior Management and the members of the GAC, aimed at increasing knowledge and awareness of the audit universe and existing and emerging risks identified by Global Internal Audit. Global Internal Audit adheres to The Institute of Internal Auditors' mandatory guidance. Consistent with previous years, the 2025 audit planning process includes assessing the inherent risks and strength of the control environment across the audit entities representing the Group. Results of this assessment are combined with a top-down analysis of risk themes by risk category to ensure that themes identified are addressed in the annual plan. Audit coverage is achieved using a combination of business and functional audits of processes and controls, risk management frameworks and major change initiatives, as well as regulatory audits, investigations and special reviews. In addition to the ongoing importance of regulatory-focused work, key risk theme categories for 2025 audit coverage remain as: strategy, governance and culture; financial crime, conduct and compliance; financial resilience; and operational resilience. A quarterly continuous monitoring assessment of key risk themes will form the basis of thematic reporting and plan updates and will ultimately drive the 2026 planning process. Global Internal Audit has made updates to the audit universe and risk assessment to reflect the Group reorganisation. As a result, audits have been added to the 2025 Annual Audit Plan, and audits have been refocused, to reflect the risks arising from the Group reorganisation. In addition to the Group reorganisation, Global Internal Audit’s new or heightened areas of coverage for 2025 are: Group strategy; significant change initiatives including regulatory change; material regulatory obligations; compliance; anti-money laundering and sanctions; conduct, internal and external fraud; credit risk management; financial forecasting; regulatory reporting; enterprise wide risk management, operational resilience; Financial Reporting Council Corporate Governance reporting on material controls; model risk management; data management; technology resilience and cybersecurity; and incident and escalation management. In addition, Global Internal Audit will continue its programme of culture audits to assess the extent that behaviours reflect HSBC’s purpose, ambition, strategy and values. The annual audit plan and material plan updates made in response to changes in the Group’s structure and risk profile are approved by the GAC. The results of audit work, together with an assessment of the Group’s overall governance, risk management and control framework and processes are reported to the GAC, GRC and local audit and risk committees, as appropriate. This reporting highlights key themes identified through audit activity, and the output from continuous monitoring. This includes business and regulatory developments and an independent view of emerging and horizon risk, together with details of audit coverage and any required changes to the annual audit plan. Based on regular internal audit reporting to the GAC, private sessions with the Group Head of Internal Audit, the Global Professional Practices annual assessment and quarterly quality assurance updates, the GAC is satisfied with the effectiveness of the Global Internal Audit function and the appropriateness of its resources. In December 2024, Global Internal Audit’s External Quality Assessment Review was reported to the GAC, which concluded that Global Internal Audit is a well- respected, independent provider of assurance which is highly valued across the Group and that Global Internal Audit generally conforms with the 2017 International Professional Practices framework (’IPPF’), which includes the IIA Standards and Code of Ethics. ’Generally Conforms’ is the highest rating attainable and means the function is compliant with the requirements of the Standards in all material 298 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees aspects. Global Internal Audit also generally meets the CIIA’s IA Financial Services Code of Practice requirements. Executive management is accountable for addressing the matters raised by Global Internal Audit, which must be addressed within an appropriate and agreed timetable. Confirmation to this effect must be provided to Global Internal Audit, which validates closure on a risk basis. Global Internal Audit maintains a close working relationship with HSBC’s external auditor, PwC. The external auditor is kept informed of Global Internal Audit’s activities and results, and is afforded free access to all internal audit reports and supporting records. Principal activities and significant issues considered during 2024 Areas of focus Key issues Conclusions and actions Significant accounting judgements Expected credit losses The measurement of expected credit losses involves significant judgements, particularly under current economic conditions. There remains uncertainty over ECL estimation due to sustained high inflation, interest rate volatility, economic policy changes following election outcomes globally and weaker economic growth in the Group’s key operating markets. – The Committee reviewed economic scenarios for the key countries and territories in which the Group operates and challenged management’s judgements on the weightings assigned to the scenarios. The Committee also challenged management’s judgemental adjustments to account for uncertainty in specific sectors and geographies, including the controls underpinning the adjustments process and conditions under which the adjustments would be reduced or removed. – The Committee continued to monitor management’s updates on areas of particular focus, including downside risk in mainland China and Hong Kong commercial real estate sectors. Valuation of defined benefit pension obligations The valuation of defined benefit pension obligations involves highly judgemental inputs and actuarial assumptions which include interest rate, inflation rate, mortality rates and other demographic assumptions. Management considered these assumptions in consultation with actuarial experts to determine the valuation of the defined benefit obligations. – The GAC has considered the effect of changes in key assumptions on the HSBC UK Bank plc section of the HSBC Bank (UK) Pensions Scheme, which is the principal plan of HSBC Group. Details of key assumptions can be found on pages 400 to 401 of the ’Notes on the financial statements’. Valuation of financial instruments During 2024, management continuously refined its methodology and approach to valuing the Group’s portfolio in relation to investments, trading assets and liabilities and derivatives. – The Committee received periodic updates on the key valuation metrics and judgements involved in the determination of the fair value of financial instruments, and agreed with the judgements applied by management, which were validated through appropriate governance and control forums. Investment in subsidiaries Management has reviewed investments in subsidiaries for indicators of impairment and conducted impairment reviews where relevant. These involve exercising significant judgement to assess the recoverable amounts of subsidiaries, by reference to projected future cash flows, discount rates and regulatory capital assumptions. – The Committee reviewed the judgements in relation to the impairment review of HSBC Overseas Holdings (UK) Limited and the key inputs such as projected profits, underpinning the recoverable amounts of its subsidiaries. HSBC Holdings plc Annual Report on Form 20-F 299 Principal activities and significant issues considered during 2024 (continued) Areas of focus Key issues Conclusions and actions Significant accounting judgements Investment in an associate – Bank of Communications Co., Limited During the year, management performed impairment reviews of HSBC’s investment in Bank of Communications Co., Ltd (‘BoCom’). This included assessment as to whether there is indication of further impairment, or that previously recognised impairment may no longer exist or may have decreased. The impairment reviews are complex and require significant judgements, such as the appropriateness of projected future cash flows, discount rate, and regulatory capital assumptions. – The GAC reviewed and challenged management’s judgements and disclosures in relation to impairment reviews of HSBC’s investment in BoCom, performed using a value-in-use methodology. – The Committee reviewed the appropriateness of key assumptions such as projected future cash flows, with particular focus on the potential impacts of the publicly announced policies aimed at promoting growth and economic development in China during the fourth quarter of 2024. – The GAC considered the consistency of judgements with prior period impairment reviews, reflecting available details as at 31 December 2024 as to how these policies may be enacted. Interest rate management During 2024, management proposed a framework for the disposal of selected hold-to-collect-and-sell securities to improve risk management of hold-to- collect-and-sell positions and to stabilise and protect net interest income over the medium term. – The GAC received regular management updates on hedging strategy, including the repositioning of structural interest rate hedges. – The Committee reviewed controls on, and financial outcomes of, disposals of hold- to-collect-and-sell securities. Impairment of goodwill and non-financial assets During the year, management tested for impairment goodwill and non-financial assets including additional consideration for the future impacts resulting from the announced organisational restructure. Key judgements in this area relate to long-term growth rates, discount rates and projected future cash flows to include for each cash-generating unit tested, both in terms of compliance with the accounting standards and reasonableness of the forecasts. – The Committee reviewed and challenged management’s approach and methodology used for the impairment testing of goodwill and non-financial assets, with a key focus on the projected cash flows included in the forecasts and discount rates used. – The GAC also challenged management’s key judgements and considered the reasonableness of the outcomes against business forecasts and strategic objectives of HSBC. Legal proceedings and regulatory matters Management has used judgement in relation to the recognition and measurement of provisions, as well as the existence of contingent liabilities for legal and regulatory matters. – The Committee reviewed reports from management on legal proceedings and regulatory matters, and challenged related accounting judgements and disclosures. Tax-related judgements HSBC has recognised deferred tax assets to the extent that they are recoverable through expected future taxable profits. Significant judgement continues to be exercised in assessing the probability and sufficiency of future taxable profits, future reversals of existing taxable temporary differences and expected outcomes relating to uncertain tax treatments. – The Committee considered the recoverability of deferred tax assets. The Committee also considered management’s judgements relating to tax positions in respect of which the appropriate tax treatment is uncertain, open to interpretation or has been challenged by the tax authority. Long-term viability and going concern statement The GAC has considered a wide range of information relating to present and future projections of profitability, cash flows, capital requirements and capital resources. These considerations include stressed scenarios and the implications of: – geopolitical tensions including the ongoing Russia- Ukraine and Middle East conflicts, US-China tensions and the consequential impacts on the supply chains globally; – macroeconomic risks including inflationary risks, mainland China and Hong Kong real estate sector risks and economic policy uncertainty following election outcomes globally; and – climate risk, operational resilience, and other top and emerging risks, and the related impact on profitability, capital and liquidity. – In accordance with the UK and Hong Kong Corporate Governance Codes, the Directors carried out a robust assessment of the principal and emerging risks of the Group and parent company. The GAC considered the statement to be made by the Directors and concluded that the Group and parent company will be able to continue in operation and meet liabilities as they fall due, and that it is appropriate that the long-term viability statement covers a period of three years. Impact of acquisitions and disposals HSBC engaged in a number of business acquisitions and disposals, notably in Canada, Germany, South Africa, Argentina, Armenia and Russia. Judgement was involved in determining the timing of recognition of assets held-for-sale, gains or losses, and the measurement of assets and liabilities on acquisition or disposal. – The Committee reviewed management’s judgements related to the completion of the sale of the Group's banking business in Canada and of HSBC Argentina, as well as the planned sales of the German private bank business and the business in South Africa, such as the timing of classification as held-for-sale and the remeasurement of assets. Financial and regulatory reporting Environmental, social and governance (‘ESG’) reporting The Committee considered management’s efforts to enhance ESG disclosures and associated verification and assurance activities, with a specific focus on the net zero transition plan and climate-related disclosures made in the Annual Report and Accounts 2024. – The Committee considered ESG disclosures for the Annual Report and Accounts 2024 in detail, to ensure these were fair and balanced, and were also transparent on the challenges faced and aligned with the Group’s progress in the embedding of sustainable and climate-related policies across the business. In addition, the committee reviewed the narrative relating to our net zero ambitions and targets and the planned annual net zero transition plan review. 300 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Principal activities and significant issues considered during 2024 (continued) Areas of focus Key issues Conclusions and actions Regulatory reporting The GAC monitored progress by management in delivering a sustainable control environment for regulatory reporting across the Group. – The Committee reflected on the continued focus on the quality and reliability of regulatory reporting by the PRA and other regulators globally. – The Committee oversaw management’s execution against the agreed remediation plans, and challenged management on the approach and timeframes to deliver accurate reporting submissions to the Group’s global regulators. Discussions included a focus on shared dependencies across various Group-wide programmes, for example and in particular, data. Control environment Sustainable control environment The GAC oversaw the effectiveness of the internal control environment of the Group, including with regards to the requirements of US Sarbanes-Oxley Act. During the year, the remit of the GAC with regards to internal control was extended beyond financial reporting controls to include oversight of all internal controls. – The Committee received regular updates on the control environment, and broader change framework, to review the impact on financial reporting and tax risk within the Group, with regular updates provided on IFRS 17 and Basel 3.1. – In these updates the Committee monitored the assessment of the financial reporting risk, tax risk and progress made on remediation of US Sarbanes-Oxley Act significant deficiencies. This oversight helped the Committee to understand the progress being made by management to set out strategic actions to remediate identified issues and uplift the control environment to enable a sustainable reduction in risk. – Management’s updates were supplemented by further focus and assurance work from Global Internal Audit, including audits of significant programmes of activity during 2024. – The Committee oversaw the work to support the Group’s oversight of internal controls, including the establishment and scope of responsibilities of the new Group Controls Oversight Office. Regulatory change Basel 3.1 Reform The GAC considered the implementation of the Basel 3.1 Reform and the impact on the capital requirements and RWA assurance. This was considered in the context of the strategy and structure of the balance sheet. – The Committee received updates on the progress and impact of the Basel 3.1 programme on the Group, including following the publication by the PRA on 12 September 2024 of the second near-final policy statement and rules covering their implementation. – Management discussed the delayed implementation dates, ongoing uncertainty over the final definition of the rules by regulators, and the work undertaken to mitigate delivery risks given the concentration of delivery during 2024 & 1H25. The discussion highlighted the dependencies of the Basel 3.1 programme with data, models and subject matter resources. – The Committee reviewed the ongoing management of risks, issues and dependencies and challenged management to prioritise deliverables across each jurisdiction in line with regulatory timelines. The Committee discussions focused on ensuring, in each case, that the Group complied with the applicable minimum standards under the regulation. Committee performance review In 2024, the annual review of the performance of the Board committees, including the GAC, was conducted externally by IBE. On the basis of the review, directors concluded that the GAC continued to operate effectively. Positive feedback was noted on the refreshed Committee composition, in particular the change of Committee leadership and the new practices and focus introduced, including on the control environment. The Committee will consider scheduling an extra meeting in 2025 to provide additional, dedicated time for discussion, given the range and complexity of topics under the Committee’s remit. The review highlighted the continued importance of strong interaction between the GAC, GRC, and GTOC agendas, via the Committee Chairs, and this will continue to be an area of focus in 2025. Further details of the annual review of the Board and Committee effectiveness can be found on page 287 . HSBC Holdings plc Annual Report on Form 20-F 301 Group Risk Committee “Managing the impacts of political change and policy volatility has been a key trend this year, with changes in governments globally, having economic and commercial implications for both the Group and the industry.“ James Forese Chair Group Risk Committee Membership Key responsibilities Member since Meeting attendance in 2024 1 The Group Risk Committee ( ’ GRC ’ ) has overall non-executive responsibility for the oversight of risk-related matters and the risks impacting the Group. The GRC’s key responsibilities include: – overseeing and advising the Board on all risk-related matters, including financial and non-financial risks; – advising the Board on risk appetite-related matters, and key regulatory submissions; – reviewing the effectiveness of the Group’s risk management framework and how effectively management is embedding and maintaining an effective risk management control system; – reviewing and challenging the Group’s stress testing exercises; and – overseeing the Group’s approach to conduct, fairness and the prevention of financial crime. James Forese (Chair) Jun 2022 10/10 Geraldine Buckingham 2 Jun 2022 8/8 Dame Carolyn Fairbairn Sep 2021 10/10 Steven Guggenheimer May 2020 10/10 Kalpana Morparia 3 Jul 2020 8/8 Eileen Murray 4 Oct 2024 2/2 Brendan Nelson Sep 2023 10/10 David Nish 5 Feb 2020 3/4 Swee Lian Teo Oct 2023 10/10 1    These included six scheduled meetings, two ad hoc meetings and two joint meetings, one with the Group Remuneration Committee and one with the Group Audit Committee. 2    Geraldine Buckingham stepped down from the GRC on 1 October 2024. 3    Kalpana Morparia stepped down from the GRC on 1 October 2024. 4    Eileen Murray was appointed to the GRC on 1 October 2024. 5    David Nish stepped down from the GRC on 3 May 2024. He was unable to attend one meeting due to a prior commitment. I am pleased to present the GRC report. The GRC membership has been refreshed this year to ensure that the mix of skills and experience remains appropriate for the business of the Committee and due to the retirement of David Nish, who stepped down from the Committee in May after completing eight years of service with the Group. I would like to thank David for his contribution to the GRC as a valued member. Geraldine Buckingham and Kalpana Morparia stepped down from the GRC in order to join other Board Committees. Eileen Murray joined the GRC to complement her chair responsibilities for the Group Technology and Operations Committee. From a macroeconomic perspective, the year has been characterised by a fluctuating interest rate outlook. There have been persistent concerns over potential ’hard landings’ in major economies, and ’higher for longer’ policy rate predictions gradually shifting to market expectations for more and rapid rate cuts, though with significant ongoing volatility and uncertainty. Managing the impacts of political change and policy volatility has been a key trend this year, with changes in governments having economic and commercial implications for both the Group and the industry. While performance in Hong Kong has improved, mainland China continues to experience a slow economic recovery. The Group’s wholesale credit risk and retail credit risk portfolios remain resilient despite these challenges and the GRC has regularly reviewed portfolio performance throughout the year. Financial risks have been well managed this year, and the GRC has continued to focus on treasury, capital and liquidity risk management activities, including dedicating time to its assessment of the internal capital adequacy assessment process (‘ICAAP’) and internal liquidity adequacy assessment process (‘ILAAP’), which the GRC considers to be one of its primary responsibilities. This is alongside prudential sensitivity analysis and its recovery and resolution responsibilities. The Group made its Resolvability Assessment Framework public disclosure in August, receiving positive feedback from the Bank of England, which recognised the progress made and our success in remediating previously identified shortcomings. The Group Recovery Plan was submitted in June and we await feedback from the PRA. Non-financial risk has necessitated considerable GRC attention this year. The fast-paced regulatory landscape has resulted in dynamic, and in many cases, increasing expectations from regulators around the world. With the ongoing conflict between Russia and Ukraine, navigating sanctions obligations has been an ongoing challenge, and the Israel- Hamas conflict poses a significant risk to security in the region, with associated potential customer, staff and operational impacts. With the publication of Supervisory statement 1/23 – ‘Model risk management principles for banks’ last year, the GRC has undertaken to better understand its responsibilities under the new regime, by challenging the revised Group policy and framework, and holding an education session to increase knowledge. The GRC supported management through an exercise to enhance the HSBC Risk Management Framework, which has resulted in several areas of improvement and brings us into line with industry best practice. The Committee has also considered updates to the Global Risk Appetite Framework and Group Risk Appetite Statement to promote more transparency and consistency across the Group. The Group continues to prepare for the PRA’s regulatory requirements relating to Operational Resilience by improving its capabilities, identifying its vulnerabilities and undertaking an extensive programme of testing. Risk culture and its importance has also featured extensively throughout committee discussions, including the development and implementation of the Risk Culture Framework. Other areas of focus and challenge include the Group’s data strategy and remediation programme, conduct and financial crime, technology and cyber risk, ESG and ongoing Risk Transformation programmes. As explained in the Report of the GAC on page 295 , responsibility for oversight of all internal controls transitioned to the GAC during 2024. Further details on these and other areas of GRC oversight during the year are set out below. 302 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees I am proud to have led the GRC this year and am pleased at the effective execution of its duties. I am confident the Committee remains well placed to discharge its responsibilities and provide valuable advice to the Board in 2025 and the future. Committee governance The Group Chief Risk and Compliance Officer, Group CFO, Group Chief Operating Officer, Group Chief Information Officer, Group Chief People & Governance Officer, Group Chief Legal Officer and Group Head of Internal Audit are standing attendees at GRC meetings. The Chair and members of the GRC also hold private meetings with the Group Chief Risk and Compliance Officer, the Group Head of Strategy and Corporate Development, the Group Head of Internal Audit and the external auditor, PwC, following scheduled GRC meetings. The participation of our senior business leaders, including the Group CEO who attended five scheduled GRC meetings in 2024, and the chief executive officers of the three global businesses reaffirmed the ownership of, and accountability for, risks in the first line of defence. Outside of formal meetings, the Chair meets regularly with the Group Chief Risk and Compliance Officer, and, where appropriate, members of senior management, to discuss priorities and track progress on key actions. The Chair also meets regularly with the GRC Secretary to ensure the GRC addresses its governance responsibilities. A summary of coverage is set out in the ’Matters considered during 2024’ table. Matters considered during 2024 Jan 2 Feb Mar 2 May Jun Jul Sep Dec Holistic enterprise risk monitoring including Group risk profile 1 u u u u u u u u Risk framework and policies u u u u u u u u Treasury and traded risk u u u u u u u u Wholesale/retail credit risk u u u u u u u u Financial reporting risk u u u u u u u u Resilience risk (including IT and operational risk) u u u u u u u u Financial crime risk u u u u u u u u People and conduct risk u u u u u u u u Regulatory compliance risk u u u u u u u u Legal risk u u u u u u u u Model risk u u u u u u u u Climate risk u u u u u u u u Strategic risk u u u u u u u u u Matter considered u Matter not considered 1  The GRC receives updates on all risk types through the Group risk profile, which is presented to all regular meetings. 2  The January and March meetings are ad hoc meetings with a reduced agenda. How the Committee discharged its responsibilities Activities outside formal meetings The GRC held a number of meetings outside its regular schedule to facilitate deeper and more effective oversight of the risks impacting the Group. Areas covered included ICAAP and ILAAP preparations, interest rate risk in the banking book, operational resilience and model risk management, as well as briefings on the Resolvability Assessment Framework and the Group Risk Appetite Framework. Further details of these sessions are included in the ’Principal activities and significant issues considered during 2024’ table starting on pag e 303 . Connectivity with principal subsidiary risk committees During 2024, the GRC continued to actively engage with principal subsidiary risk committees through the scheduled participation of principal subsidiary risk committee chairs at relevant GRC meetings, and through regular connectivity meetings with the principal subsidiary risk committee chairs. These meetings are also attended by the Group Chief Risk and Compliance Officer. This participation and connectivity promoted the sharing of information and best practices between the GRC and principal subsidiary risk committees, as well as encouraging director relationships. Principal subsidiary risk committee chairs were invited to attend a joint meeting between the GRC and the GAC in order that a consistent message on changes to committee responsibilities with regards to internal controls was received. The GRC has also received certifications from the principal subsidiary risk committees, confirming that management had been challenged on the quality of the information provided, the committees had reviewed the actions proposed by management to address any emerging issues and that risk management and internal control systems had been operating effectively. These interactions furthered the GRC’s understanding of the risk profile of the principal subsidiaries, leading to more comprehensive review and challenge by the GRC. Collaborative oversight by the GRC, GAC, Group Technology and Operations Committee (’GTOC’) and Group Remuneration Committee (’RemCo’) The GRC worked closely with the GAC and the GTOC to address any areas of significant overlap, and to oversee risk and controls more comprehensively through inter-committee communications and joint meetings. The GRC and the GAC convened on one occasion to consider a range of issues, including changes being made to how each committee manages and oversees internal controls. The GRC and GTOC worked closely to ensure appropriate alignment in the review, discussion, challenge and conclusions on topics including risk and control issues relating to digital assets and currencies, the Group's data strategy, artificial intelligence and cybersecurity. This ensured that the committees benefited from each other’s expertise and challenge. Coordination between the GRC, GAC and the GTOC is supported by cross-membership. The GRC Chair attends the GAC, the GTOC Chair attends the GRC, and the GAC Chair attends both the GTOC and GRC, strengthening connectivity and the flow of information between the committees. HSBC Holdings plc Annual Report on Form 20-F 303 The GRC and Group RemCo work collaboratively to consider risk adjustment to the variable pay pool as part of the Group reward process, given the integral nature of risk management to the Group’s performance culture. This year, the committee has also considered improvements to the Risk and Reward framework. Principal activities and significant issues considered during 2024 Risk areas Key issues Conclusions and actions Holistic enterprise risk monitoring, including Group risk profile Macroeconomic, geopolitical and other emerging risks have the potential to present significant challenges to revenue growth, operational resilience and our commitment to serve customers and local markets. – The GRC closely monitored geopolitical and macroeconomic risks that could impact the Group’s strategy, business performance or operations. These risks were exacerbated by ongoing conflict between Russia-Ukraine, the Israel-Hamas conflict and rising political tensions between the US and China. The resulting sanctions risk from these events has required significant focus and oversight by the Committee. While market sentiment and economic growth had been more positive than forecast, the real estate sector continued to experience pressure, particularly in mainland China and Hong Kong. – The GRC continued to track top and emerging risks, our risk appetite and other management information metrics, as well as other early warning measures to understand sensitivities and the likelihood of the potential impact to our operations, customers and stakeholders. The GRC provided oversight and challenge of a robust book of strategic management actions to respond to potential downside scenarios. – The GRC requested reports on the risk profile of key business areas in local geographies and invited principal subsidiary chairs and relevant management to attend and participate in discussions. Risk framework and policies Effective risk management policies, frameworks, appetites and thresholds, and oversight of these, are essential for HSBC to safely, consistently and sustainably support customers, manage risk and deliver strategic aims. – The Group has a risk appetite statement to define risk appetite and tolerance thresholds, which forms the basis of the risk management procedures for the first and second lines of defence, the Group’s capacity and capabilities to support customers, and the achievement of strategic goals. The GRC maintained oversight of the Group’s risk appetite framework, reviewing changes to the Group’s risk appetite statements and recommending these to the Board for approval. This year's update to the risk appetite statement was focused on providing essential coverage of the key risks facing the Group and setting thresholds that reflected its desired risk profile for these risks. A review of the Group risk appetite framework was also undertaken to assess the dimensions of the framework and consider principles and approaches to support effective and consistent appetite setting for the Group’s broader business strategy. Areas of proposed improvement included: expanding assessments against appetite to an evaluation-based risk appetite that considers the entire risk profile; and enhancing Board-level overall statements to explicitly define the Group’s targeted appetite and the risks outside of appetite or tolerance, as well as qualitative context. – The GRC met with the Group Chief Risk and Compliance Officer and the Global Head of Enterprise Risk Management individually to ensure clarity and understanding of the changes being proposed, and how the improved design would support better outcomes for the Group. The framework has been validated by Oliver Wyman and brings the risk appetite framework into line with industry peers. – The GRC also reviewed and approved proposed annual updates to HSBC’s Risk Management Framework, providing a standardised, Group-wide approach to the identification, treatment and reporting of risk. Treasury risk It is essential that capital and liquidity risk is monitored effectively, and the Group takes active steps to maintain its capital and liquidity positions. Regular stress testing is undertaken to ascertain the Group’s operation when under stress. Developing action plans and guardrails to cover scenarios of recovery or resolution at a subsidiary or Group level is an essential part of HSBC’s prudential management. – The Group proactively tracks and maintains safeguarding of its capital and liquidity positions. It performs internal and regulatory stress tests to measure resilience and performance against a range of stress scenarios, and to challenge the strategic management actions that could be applied against anticipated stress events and headwinds. – The GRC conducted its annual review and challenge of the Group’s ICAAP and ILAAP, and provided its recommendation to the Board for approval. The GRC continued to monitor Interest Rate Risk in the Banking Book (’IRRBB’) sensitivity, structural hedging strategy and the ongoing activities to develop the Group’s capabilities for internal reporting and enhanced external disclosures. An education session on IRRBB was held in April to provide the Committee with the Group’s latest position, context around the regulatory feedback and an overview of the different components of IRRBB. – The GRC reviewed the Group’s ongoing activities to identify, manage and mitigate treasury, capital and liquidity risks, including early warning indicators, sensitivity analysis, capital and liquidity reporting and adequacy. – In relation to stress testing exercises, the GRC reviewed the Group Recovery Plan stress scenarios in March and September. The GRC also considered the Group-wide internal stress test, scenarios and outputs, which contribute to the Group’s commitment to regularly test the resilience of the balance sheet and profit and loss under multiple scenarios of varying severity. An internal climate scenario analysis was undertaken, with results presented in February 2024. – As part of its regulatory obligations, the Group is required to show how its recovery and resolution strategies could be executed effectively and identify any risks to successful implementation. The GRC continued its oversight of the Group’s progress in maintaining and developing its capabilities under the Bank of England’s requirements for resolvability. The GRC has been regularly updated on the Group’s implementation of the PRA’s Trading Activity Wind Down requirements in preparation for the March 2025 deadline, which will require the Group to have implemented a set of capabilities that will allow the execution of a full or partial wind down of its trading activities in an orderly fashion. In March 2024, the GRC reviewed the Resolvability Assessment Framework public disclosure and made a recommendation to the Board for approval. In June 2024, management presented the 2024 Group Recovery Plan ahead of its submission to the PRA in June. The plan was also recommended to the Board for approval. The Chairs of the GRC and the GAC both received comprehensive briefings prior to the presentation of both submissions. 304 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Principal activities and significant issues considered during 2024 (continued) Risk areas Key issues Conclusions and actions Model risk HSBC can face risks from inappropriate or incorrect business decisions arising from the use of models that have been inadequately designed, implemented or used, or do not perform in line with expectations and predictions. – The GRC has had significant engagement on model risk management due to the release of Supervisory Statement (SS) 1/23 – ‘Model risk management principles for banks’ in 2023, and the required remediation in order to be in compliance with the PRA’s new expectations. The GRC has overseen revisions to the model risk policy and framework, plus the self-assessment exercise required by the statement. In addition, a separate education session was held in July, providing an in-depth overview of model risk, how models are used within the business, and with a specific focus on Wholesale IRB Models and the data challenges. Resilience / Operational risk A failure in resilience could lead to a situation where HSBC customers might suffer significant disruption to services or loss of data. Technology risks (including cybersecurity) could cause unmanaged disruption to any IT system within HSBC, as a result of malicious acts, accidental actions, poor IT practice, or IT system failure. – The GRC continued its oversight of the Group’s implementation of operational resilience capabilities in line with PRA and FCA policies. The GRC reviewed and challenged the operational resilience self-assessment against regulatory expectations and was briefed on the methodology used to identify vulnerabilities from the mapping and testing of Important Group Business Services and Entity Important Business Services in line with regulatory policy. An additional briefing session on operational resilience was held in June to prepare the Committee for the self- assessment in June. – The GRC regularly reviewed reports on the Group’s technology risk profile, as well as receiving updates on cybersecurity risk. Reports have focused on the risk and control environment, as well as the current threat landscape and emerging risks. The GRC will continue to work with the Group Technology and Operations Committee to consider the risks and opportunities in the use of AI (generative and advanced) and digital assets and currencies in 2025. – The GRC continued with its strong focus on understanding the Group’s data risk landscape, its data strategy and data management programme. This has included the tracking of progress made against the Group’s data execution programme and timelines are being monitored closely. – Third-party risk management received additional focus this year in light of a number of external incidents that had largely occurred due to the failure of third-party vendors. The GRC will continue this focus into 2025, working closely with the GTOC. Wholesale/ retail credit risk HSBC faces risk from the possibility of losses resulting from the failure of a counterparty to meet its agreed obligations to pay the Group. The commercial real estate sector has presented unique challenges for the wholesale credit risk portfolio, particularly for office properties. – The GRC received briefings on the macroeconomic and policy landscape impacting credit risk, both retail and commercial, and reviewed updates on the strategy and approach to managing credit risk and credit risk capabilities. The GRC received regular updates on the Group’s expected credit losses and provisions, and the credit risk arising from the wholesale portfolio and mortgage books. Throughout the year, the GRC focused on building even stronger credit capabilities for specialty sectors, including the continued implementation of the Country and Industry components of the Credit Risk Appetite Framework. – The GRC challenged on changes made to the Commercial Real Estate cap to ensure adequate control of the business, given commercial real estate is the largest corporate sector concentration in the wholesale portfolio. – The GRC had oversight of the development of stronger portfolio management capabilities and further improving the Group’s credit risk culture. A key focus area continued to be maintaining appropriate tools and treatments available to our customers to support anyone experiencing financial difficulty, having the right people available to give the right advice and ensuring that conduct and good customer outcomes are first priorities. Financial reporting risk HSBC is exposed to risks where controls supporting the reporting of its financial statements are not effective, resulting in material error or misstatement – While the GAC has primary responsibility in relation to internal control systems (including financial controls), with further detail on page 295 , the GRC receives reports on entity level control assessments to enable the oversight of the effectiveness of such controls in support of the Group’s financial reporting. Financial crime risk There is a risk that HSBC’s products and services could be exploited for criminal activity, including fraud, bribery and corruption, tax evasion, sanctions and export control violations, money laundering, terrorist financing and proliferation financing. Insider threat also presents the risk that an individual with access to bank data, systems, infrastructure or finances could use that access to intentionally cause harm to the bank and its customers. – The GRC was updated regularly on the operation and effectiveness of the systems and controls pertaining to financial crime risk across geographies and businesses. This included reviewing updates to the Group’s financial crime policy, enhancing the approach to insider risk, and monitoring the fraud landscape and strategies for managing fraud risk. – Specific updates on Russia sanctions have been necessary with the ongoing conflict between Russia and Ukraine, in particular due to the increasing severity of US sanctions and the Group's unique global position in many of the affected markets. The GRC has been appraised of all management engagement with local governments and regulators in impacted regions. – The GRC increased their focus on Insider Threat, as HSBC’s inherent risk has increased due to factors including cost-of-living challenges and inflation affecting markets, the potential impact of restructures on staff morale, and the inherent risks associated with growth. HSBC Holdings plc Annual Report on Form 20-F 305 Principal activities and significant issues considered during 2024 (continued) Risk areas Key issues Conclusions and actions People and conduct risk People are central to everything HSBC does and it is essential to manage the risk of not having the right people with the right skills, and to ensure staff always have the customer’s interest at the forefront. Monitoring of conduct outcomes is integral to ensuring the needs of our customers are adequately met. – The GRC considered people risk issues with a focus on capacity, capability, culture and conduct. It also considered remuneration risks, and strategies to retain talent and acquire new capabilities in key areas, with a particular focus on approaches to maintain low attrition rates. – The GRC now considers an Annual Conduct Update, further to the implementation of the Purpose Led Conduct Framework in 2023. – The GRC and Group RemCo met in September to consider improvements to the Risk and Reward framework. The proposed changes support better understanding of the risk factors used to drive performance assessments and how judgements made align to the application of the Risk Modifier. – The GRC met in November to review the Group’s risk and reward alignment framework to promote sound and effective risk management in meeting PRA and FCA remuneration rules and expectations. Regulatory compliance risk As a result of operating in multiple jurisdictions globally, HSBC is exposed to risks associated with inappropriate market conduct or breaching related financial services regulatory standards or expectations. – The GRC and its members actively engage with regulators and act on feedback. The Committee closely monitors the progress of regulatory remediation activities, with support from the Group Chief Risk and Compliance Officer as well as principal subsidiary risk committee chairs. Throughout the year, the GRC had oversight over reports providing feedback from regulators, including a summary of regulatory deliverables to ensure HSBC remains in line with regulatory standards and expectations. – The GRC also considered the 'Statement of Compliance' exercise, which is an assessment of Significant Regulatory Matters undertaken for principal subsidiary CEOs, providing an opinion as to how well managed these are and where gaps may exist. Further to a pilot undertaken in Mexico, this approach is now being rolled out across all principal subsidiaries. Legal risk HSBC is exposed to the risk of financial loss, legal or regulatory action resulting from contractual risk, dispute management risk, breach of competition law or intellectual property risk. – The GRC oversees and receives regular updates on key legal developments and material legal issues from the Group Chief Legal Officer. The updates also cover material litigation and regulatory enforcement matters and an overview of the legal risk profile of HSBC. Climate risk Environmental, social and governance risks present significant risks to organisations both in terms of their own operations and how they engage with stakeholders and communities. – The GRC remained focused on climate risk and greenwashing risk. The GRC received reports on climate risk management and sustainability risk policies, while maintaining oversight of delivery plans and risk appetite breaches to help ensure that the Group continues to develop and maintains robust climate risk management capabilities. Reputation risk considerations have also formed part of these discussions. – The GRC approved the 2024 internal climate scenario analysis in February 2024. The outcomes will be used to respond to multiple regional regulatory climate exercises as well as meeting regulatory expectations on incorporating climate change within the Group’s strategic plans and ICAAP. Committee performance review 2024/2025 In 2024 the annual review of the performance of the Board Committees, including the GRC, was conducted externally by IBE. On the basis of the review, Directors concluded that the GRC continued to operate effectively. Areas for enhancement were identified, including the need for: continued focus on paper quality and content to increase focus on the most significant enterprise and emerging risks; ongoing refinement of the GRC agenda to streamline and enable greater attention to strategic risk areas; continued additional educational and ‘deep dive’ sessions outside of the formal schedule of meetings to allow for greater debate, insights and learnings, coupled with other mechanisms to guide the scheduled Committee discussions; ongoing work with Management to ensure effective and timely follow up to Committee challenge. The collaboration across the GRC, GAC and GTOC agendas, via the Committee Chairs, will continue in 2025. The outcomes of the performance review have been reported to the Board, and the GRC will track the progress in implementing recommendations during 2025. Further details of the annual review of the Board and Committee effectiveness can be found on page 287 . Focus of future activities The GRC’s focus for 2025 will include the following activities: – to continue to monitor the effective delivery of risk transformation programmes and to seek assurance that the enhanced capabilities have been fully embedded into the business; – to support the continued enhancement of the Group's risk appetite and risk management frameworks further to the improvements made in 2024, particularly in light of continued geopolitical and macroeconomic headwinds; – to continue to assess the Group's operational resilience capability and to track the completion of the programme of work required by the PRA rules coming into effect in March 2025; – to continue to support and challenge the remediation activities identified to enhance Model Risk Management capabilities in line with SS 1/23; – to continue to oversee treasury risk to strengthen our capital and liquidity management capabilities; – to continue the oversight of recovery and resolution planning activities to assess our capabilities if such a situation arises, with particular focus on our Trading Activity Wind Down obligations; – to monitor delivery against our climate ambitions and the development of appropriate data and model management tools and capabilities; and – to continue to oversee financial crime risk and the strengthening of the financial crime control framework, including proactive management by the business. 306 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Group Technology and Operations Committee “The Committee oversees all aspects of the Group’s technology and operations strategies, which enable the efficient provision of resilient, sustainable, and innovative products and services to our customers.“ Eileen Murray Chair Group Technology and Operations Committee Membership Key responsibilities Member since Meeting attendance in 2024 1 The GTOC has overall responsibility for the oversight of HSBC’s technology and operations strategies and alignment with the overall HSBC Group strategy, including global business and global function priorities. The GTOC’s key responsibilities include: – reviewing, challenging, and making recommendations to the Board on technology strategy and related matters; – overseeing HSBC’s data strategy and framework; – overseeing HSBC’s cybersecurity strategy and framework; and – overseeing HSBC’s global operations, including payments, procurement, corporate real estate and operational resilience. Eileen Murray (Chair) Mar 2024 7/7 Steven Guggenheimer Mar 2024 7/7 Kalpana Morparia 2 Mar 2024 6/7 Brendan Nelson Mar 2024 7/7 Swee Lian Teo Mar 2024 7/7 1 These included seven scheduled meetings. 2    Kalpana Morparia was unable to attend the November meeting due to a prior commitment. I am pleased to present the first report of the Group Technology and Operations Committee (‘GTOC’), which was established in March 2024 as the Group Technology Committee with the responsibility for oversight of execution against the Group’s Technology strategy. In December 2024, the remit of the Committee was extended to also cover global operations, including payments, procurement, corporate real estate, and operational resilience, reflecting changes to the Group organisational structure and the importance of operations to delivery of the Group’s strategy. I would like to thank Steve Guggenheimer, Kalpana Morparia, Brendan Nelson and Swee Lian Teo, all of whom joined the Committee alongside me in March. Each director has brought their unique skills, experience and perspectives to the matters we have spent time on. Since our first meeting in March 2024, a key area of oversight and focus has been oversight of the enterprise-wide programme established to simplify the Group’s technology infrastructure, enhance system resilience, and accelerate digital transformation across the bank. The GTOC has challenged management on its plans and prioritisation and has overseen progress in execution of what is a multi-year deliverable, seeking assurance from Risk and Global Internal Audit on the robustness of the approach. The GTOC has worked closely with management since its inception to reinforce and enhance the guardrails supporting technology investments and transformation, the tracking of benefits and outcomes, and to enhance accountability for delivery. It has received updates on key projects and programmes, and has considered the technology deliverables within our payments, core banking, and global private banking and wealth strategies. The GTOC has also received regular updates on management’s programme to meet regulatory deliverables and address technology- related risk and control matters and we have again challenged the approach to prioritisation and delivery timelines. Other areas of focus for the GTOC during the year have included the Group’s data and cybersecurity programmes. We provided input and challenge to management’s remediation plans and efforts to enhance technology, cybersecurity, and data metrics and key performance indicators. We also considered the innovation agenda, including opportunities in respect of artificial intelligence and digital assets. To support engagement and connectivity across the Group on key technology matters, I invited observers from each of the four largest principal subsidiaries to join the GTOC meetings. We held two subsidiary-focused meetings during 2024, with a focus on operational resilience, including data and third-party risks. We discussed regulatory regimes across the different markets, progress against agreed timelines, challenges to meet expectations, and dependencies on Group-level programmes and deliverables. In October 2024, the GTOC hosted a training session to which all Board members were invited, to hear external insights and perspectives on third-party suppliers, including key risks and trends. Further details on these and other areas of GTOC oversight during the year are set out below. HSBC Holdings plc Annual Report on Form 20-F 307 Committee governance The GTOC operates under delegated authority from the Board and advises the Board on matters concerning the Group’s technology and operations strategies and related matters. The GTOC Chair reports on the key matters and discussions at the subsequent Board meeting, and the Board also has access to the GTOC papers and receives copies of meeting agendas and minutes. The Group Chief Information Officer, Group Chief Operating Officer, Group Chief Risk and Compliance Officer, Global Head of Enterprise Risk Management, Group CFO, Group Head of Internal Audit, and the external auditor are standing attendees at GTOC meetings. The Chair and members of the GTOC also hold private meetings with the Group Chief Information Officer, Group Chief Operating Officer, Group Chief Risk and Compliance Officer, and Group Head of Internal Audit, as required. The GTOC Chair meets regularly with the Group Chief Information Officer and Group Chief Operating Officer and other members of senior management, to discuss priorities and track progress on key actions. The Chair also meets regularly with the GTOC Secretary to ensure the GTOC addresses its governance responsibilities. A summary of coverage is set out in the ’Matters considered during 2024’ table. Matters considered during 2024 Mar May Jun Jul Sep Nov Dec Technology u u u u u u u Investment and transformation u u u u u u u Resilience u u u u u u u Innovation u u u u u u u Cybersecurity u u u u u u u Data u u u u u u u Resource and capability u u u u u u u u Matter considered u Matter not considered How the Committee discharged its responsibilities Engagement outside formal meetings The GTOC Chair held several meetings outside its regular schedule to facilitate deeper and more effective oversight of all key topics under its remit. The Chair regularly met with key stakeholders, including executives, programme sponsors, second and third line of defence, and independent third parties. On 16 October 2024, KPMG held an education session on Third Party Management for the HSBC Holdings Board covering industry insights, trends, and the regulatory landscape. Further details of this and similar sessions are included in the ’Principal activities and significant issues considered during 2024’ table starting on pag e 307 . Connectivity with principal subsidiaries Board members representing the four principal subsidiaries (UK, Asia, Europe and the US) are invited to attend the GTOC. As described above, two additional ‘GTOC - Principal Subsidiaries’ meetings were held covering Operational Resilience (resiliency challenges, regulatory requirements and action plans to address resilience issues). Collaborative oversight by the GTOC, GRC and GAC The GTOC worked closely with the GRC and the GAC to address any areas of significant overlap, and to oversee technology more comprehensively through inter-committee communications. The committees worked closely to ensure appropriate alignment in the review, discussion, challenge, and conclusions on topics including technology, cybersecurity, data and innovation. This ensured that the committees benefited from each other’s expertise and challenge. On 16 September 2024, members of the Group Technology, Group Risk and Group Remuneration Committees met to consider proposed changes to HSBC’s risk and reward alignment framework and to promote accountability for technology deliverables. Coordination between the GTOC, GRC and the GAC is supported by cross-membership. The GTOC Chair attends the GRC, the GRC Chair attends the GAC, and the GAC Chair attends both the GTOC and GRC, strengthening connectivity and the flow of information between the committees. Principal activities and significant issues considered during 2024 Area of focus Key issues Conclusions and actions Technology strategy There is Group-wide focus to implement the technology strategy. This requires clarity and alignment of priorities and collaboration across businesses, functions, and markets to deliver the most critical initiatives. – The GTOC regularly reviewed and challenged updates in relation to the technology strategy and the programmes in place to deliver. The committee oversaw and requested more granularity on timelines, the prioritisation approach, key risks, dependencies and challenges. – Additionally, the GTOC challenged that focus, funding and resource was being applied to enable the execution timelines to be met and requested assurances from Risk and Global Internal Audit on the robustness of the approach and progress being made. Technology strategy: management information and KPIs The Board and Board Committees rely on quality management information, KPIs and metrics to effectively oversee the areas under their remit. – The GTOC provided detailed feedback and insights on work to refine Board level metrics to ensure strong governance and accountability across technology, cybersecurity and data. Discussions included the calibration of quantifiable triggers and tolerance levels. Investment and transformation A number of significant programmes with material technology components have been subject to replanning and/ or did not deliver the benefits expected. – The GTOC challenged management on the quality of business cases and provided inputs to the enhanced investment case framework, which has been refined to require: – articulation of risks and dependencies to ensure that these are well understood by management, and appropriately considered; – detailed insights on the opportunity and peer insights; and – accurate and informed cost estimations. Investment and transformation: Global Payments Solutions Payments is a significant proposition for HSBC and is subject to an ongoing investment programme. – The GTOC provided oversight of the Global Payments Solutions strategy, including the risk profile, effectiveness of the control environment, investment and expected benefits, and alignment of the current technology stack to the desired target state architecture. 308 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Board committees Principal activities and significant issues considered during 2024 (continued) Area of focus Key issues Conclusions and actions Investment and transformation: Global Private Banking and Wealth GPB and Wealth is a significant proposition for HSBC and is subject to an ongoing investment programme. – The GTOC provided oversight of the Global Private Banking and Wealth strategy, including the risk profile, effectiveness of the control environment, investment and expected benefits, and alignment of the current technology stack to the desired target state architecture. Resilience Operational resilience is a key priority for HSBC – The GTOC regularly discussed actions being taken to improve resiliency, including work to simplify the technology estate and to enhance controls to reduce service interruptions impacting customers. – In view of our reliance on services provided by third parties, the GTOC also reviewed the third-party risk management framework that is in place to monitor associated risks and identify and implement mitigating actions, and provided oversight of third-party related topics in relation to: regulatory feedback/ trends; technology and cybersecurity resilience; third-party security risk; spend and usage – In addition, committee members met with principal subsidiaries to discuss resiliency challenges, regulatory requirements, and action plans to address resilience issues. Innovation strategy While AI, and particularly generative AI, is likely to provide much opportunity for the bank, the risks need to be understood and managed appropriately. – The GTOC has reviewed strategies to leverage the opportunities presented by innovation and new technologies, including in relation to digital assets and generative AI. These discussions set clear expectations with regard to risk, control and governance frameworks, enhancements (where required) and associated funding needs. Cybersecurity Cybersecurity remains one of the most significant risks faced by the financial services industry. – The GTOC provided oversight of cybersecurity; receiving regular updates from the Group Chief Information Officer and Group Chief Information Security Officer relating to: key controls; service and resilience; the external threat environment; enhancements to metrics; and progress updates on key programmes. The Committee also discussed the impacts of cyber issues experienced by suppliers and challenged management on what additional actions could be taken to mitigate those risks. – The GTOC reviewed and challenged regular updates on the cybersecurity programme, including specific focus on the results of an industry-wide peer review and the timelines for ongoing enhancements to the cyber risk and control framework. Data Significant work is ongoing to develop the Group’s data strategy and deliver the data remediation programme. – The GTOC requested several specific updates on the Group’s data remediation programme, including on progress made, and challenges encountered, to meet regulatory commitments. Additionally, the Committee challenged to understand the assessment of the control landscape, residual risk and plans to mitigate, both short and long term. The GTOC challenged management to articulate a clear data strategy, and this will remain an area of material focus in 2025. – The Committee demonstrated oversight of the key priorities to implement improvements to the integrity of regulatory reporting; enhance data quality measures across priority processes; and meet regulatory commitments. Resource and capability Having the right skills and resources is critical to achieving our strategic ambitions. – The GTOC reviewed management's technology people and capability plans. Key resources, dependencies on subject matter experts, and future skills needs were also considered in respect of programme updates. Committee performance review In 2024 the annual review of the effectiveness of the Board committees, including the GTOC, was conducted externally by IBE. On the basis of the review, directors concluded that the GTOC was operating effectively. Positive feedback was noted on the leadership of the GTOC Chair, the quality of information received, and the responsiveness of management in relation to the topics of focus during 2024. The review highlighted the importance of continued connectivity between the Board Committees, in particular the GTOC and GRC given the overlap of issues within their respective remits. Further details of the annual review of the Board and Committee performance can be found on pages 287 to 288 . Focus of future activities The GTOC ’ s focus for 2025 will include the following activities: – Oversight and review of the Group's global operations strategy, including payments, procurement, corporate real estate and operational resilience; – continued oversight and review of the Group’s technology strategy, cybersecurity strategy and related matters; – continued oversight of key transformation programmes, with a particular focus on accountability; – continued focus on data remediation activities and management’s articulation of its data strategy, and the monitoring of progress to execute; – continued focus on the resilience of services; and – continued consideration of technology innovation initiatives and how these might be leveraged in support of the Group strategy. HSBC Holdings plc Annual Report on Form 20-F 309 Directors’ remuneration report “Our new remuneration policy will support the delivery of our strategy and materially strengthen the alignment between performance, pay and shareholder interests.“ Dame Carolyn Fairbairn Chair Group Remuneration Committee Membership 1 Key responsibilities Member since Meeting attendance in 2024 The Committee’s key responsibilities include: – making recommendations to the Board, for approval by shareholders, on the Group’s remuneration policy; – setting the overarching principles, parameters and governance framework of the Group’s remuneration policy; – approving the remuneration of executive Directors and other senior Group employees; and – regularly reviewing the effectiveness of the remuneration policy of the Group and its subsidiaries in the context of strategy, culture, conduct and effective risk management. Dame Carolyn Fairbairn (Chair) Sep 2021 9/9 Geraldine Buckingham Jun 2022 9/9 Rachel Duan Sep 2021 9/9 Ann Godbehere Sep 2023 9/9 José Antonio Meade Kuribreña May 2021 9/9 Kalpana Jaisingh Morparia 2 Oct 2024 2/2 Eileen Murray May 2023 9/9 1    All members of the Committee are independent non-executive Directors of HSBC Holdings plc. 2    Kalpana Jaisingh Morparia joined the Committee on 1 October 2024. All disclosures in the Directors’ remuneration report are unaudited unless otherwise stated. Disclosures marked as audited should be considered audited in the context of financial statements taken as a whole. Dear shareholders, I am delighted to present our 2024 Directors’ remuneration report on behalf of the members of the Group Remuneration Committee (the ’Committee’). I would like to thank Geraldine Buckingham for her valued contribution and to welcome Kalpana Morparia. I also thank you, our shareholders, for your support of our remuneration resolutions at the 2024 Annual General Meeting (’AGM’). Our implementation of the current Directors’ remuneration policy and our resolution to provide the Committee with discretion to set an appropriate variable to fixed pay ratio received respectively over 97% and 99% of votes cast in favour. The most significant item on the Committee's agenda this year was the review of the Directors’ remuneration policy. The changes and supporting rationale are set out over the following pages. We present the formal policy for shareholder approval before describing the key remuneration decisions for our executive Directors for 2024, our approach to wider workforce reward and Committee governance. Further information and disclosure is provided at the end of the report to meet our reporting obligations in the UK and Hong Kong. 2025 executive Director remuneration policy Commencing in 2023, the Committee undertook a detailed review of the executive Directors’ remuneration policy to ensure it remains appropriate given the size and complexity of the Group, the talent market in which we compete and regulatory and best practice developments. We extensively engaged with major shareholders, representing 65% of those who voted at the 2024 AGM, and proxy advisory bodies. Shareholders were supportive of the proposals and understood the rationale for change. We received valuable feedback on our disclosure, which we have covered within this report. Our discussions focused on the need for stretching performance targets, and some individual shareholders had feedback on specific performance measures. The Committee carefully considered all feedback received, which has directly influenced final proposals. Context for the review and overall remuneration structure In 2014, as a result of European legislation (CRD IV), the Prudential Regulation Authority (’PRA’) and Financial Conduct Authority (’FCA’) introduced a 2:1 cap on the ratio between variable and fixed pay for material risk takers (’MRTs’). In response to this change, in line with other global banks operating in Europe, we introduced Fixed Pay Allowances (’FPAs’) so that HSBC could balance being competitive on a total compensation basis and complying with the remuneration rules. For our executive Directors, we converted part of their variable pay opportunity (annual incentive of 300% of salary and long-term incentive of 600% of salary) into new FPAs at an effective discount of 50% to reflect the greater certainty of fixed pay. The change materially weakened the link between performance and pay and reduced the maximum total remuneration opportunity from £13,125,000 to £10,725,000 for the Group CEO and from £7,350,000 to £6,000,000 for the Group CFO. The total opportunity has remained largely unchanged over the last decade, despite subsequent changes to the Directors’ remuneration policy and changes in incumbents and scope of the Group CFO role. Over several years, the Committee has expressed concerns that the 2:1 cap was having a material impact on the competitiveness of the executive Director remuneration opportunity at HSBC versus international peers. Now that the 2:1 variable to fixed pay ratio has been removed by UK regulators, the Committee feels it is the right time to return to a remuneration structure with a higher proportion of variable pay linked to performance that is more closely aligned to the experience of our shareholders. This will also help address compression between the total compensation of our executive Directors and some of our Group Operating Committee roles. We have received strong support from shareholders for our existing policy over many years, which we discussed in our recent engagement. In determining the new policy, the Committee considered several different incentive structures, recognising the diversity in approach among our global peers. This included more 310 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report complex models such as hybrid structures, the use of restricted stock and retaining part of the FPA. These were ultimately rejected in the interests of simplicity and transparency, and a fundamental desire for pay to be linked to performance and shareholder value creation. The Committee concluded that the current framework of an annual incentive and single performance-based long-term incentive is most appropriate. It is a simple and well understood structure and supports the delivery of our strategy and alignment with performance through the cycle. Evolution of our maximum opportunity over time (£000) Group CEO Pre-2014 2014 Policy 2023 Policy Current (2024) Group CFO Pre-2014 2014 Policy 2023 Policy Current (2024) We propose to reverse the changes made in 2014 to increase the proportion of pay linked to long-term performance. This means removing FPAs in their entirety and resetting the maximum variable pay opportunity to 900% of salary, split between 300% in annual incentive and 600% in long-term incentive (‘LTI’). At this level, the LTI enables the Committee to target an appropriate maximum opportunity relative to peers with significantly less reliance on fixed pay. Specifically, the proposed structure reduces fixed pay by 49% for the Group CEO and 51% for the Group CFO. The Committee considered a lower maximum LTI opportunity for the Group CFO but decided against this, reflecting on the relative complexity of the Group CFO role at HSBC compared to other listed peers in the FTSE 30, practice at international banks, and internal pay compression. We tested this with shareholders during our engagement who were largely supportive of the approach. In line with current market practice and in direct response to investor feedback, we propose to increase the shareholding guideline to equal the LTI opportunity of 600% of salary for both the Group CEO and Group CFO. The Committee also intends to implement a post-employment shareholding guideline in line with Investment Association guidelines, which will apply for two-years post cessation of employment. Overall, the structure ensures that a significant portion of pay is tied to the creation of long-term, sustainable shareholder value. Shareholders we spoke to were supportive of the principle and simplicity of returning to our 2014 structure, reducing reliance on fixed pay and increasing the proportion of variable pay. 2025 total remuneration opportunity The Committee reflected on the appropriate maximum opportunity for the Group CEO and Group CFO considering (i) the maximum opportunity in 2014; (ii) market data for our international banking peers and the largest FTSE 30 companies; and (iii) internal pay compression challenges with members of the Group Operating Committee. After considering these factors, which are described further below, the Committee determined the appropriate maximum opportunity for 2025 should be £15,150,000 for the Group CEO role and £8,837,500 for the Group CFO. Returning to the pre-2014 structure increases the proportion of pay subject to performance to 89% , compared to 69% under the current policy. This provides less certainty in pay outcomes with higher pay at maximum performance offset by lower pay for weaker performance. The Committee felt that a higher maximum opportunity was required to reflect the additional volatility given the lower fixed pay and reverse the reduction in total compensation when FPAs were introduced. Group CEO payout under different performance scenarios (£m) n Fixed pay n Variable pay ’Target’, ’Minimum’ and ’Below Minimum’ scenarios assume performance outcomes of 50%, 25% and 0% respectively for both the annual incentive and LTI. Current Proposed Group CEO maximum total compensation opportunity (£000) Group CFO maximum total compensation opportunity (£000) International banking peer group Top 10 by market cap in FTSE 30 International banking peer group Top 10 by market cap in FTSE 30 (Stock ticker and ranking by market capitalisation) n HSBC proposed n HSBC current n HSBC pre-2014 Data source: Deloitte. 2024 total compensation is based on 2023 year-end disclosures . The market capitalisation ranking shown in brackets is based on a 3-month average as at 31 December 2024. HSBC Holdings plc Annual Report on Form 20-F 311 Group CEO target total compensation (£000) Group CFO target total compensation (£000) International banking peer group Top 10 by market cap in FTSE 30 International banking peer group Top 10 by market cap in FTSE 30 (Stock ticker and ranking by market capitalisation) n HSBC proposed n HSBC current n H SBC pre-2014 D ata source: Deloitte. 2024 total compensation based on 2023 year-end disclosures. 'Target' value of total compensation based on 50% of the maximum value for the annual incentive, or target value if disclosed; 50% of the maximum value for performance-based LTI; the maximum value of restricted shares; and one third of face value for share options. Market capitalisation ranking shown in brackets based on 3-month average as at 31 December 2024. Over several years, the Committee has seen increases to pay opportunities and changes to pay structures, which have further widened the gap between HSBC and some of our US and European banking peers. In determining the new policy, we have not targeted the quantum or structure of pay in US banks given the differences in market and business models compared to HSBC. However, we believe it is appropriate to narrow the gap to these roles as we recruit from this talent base across various levels of the organisation and this will help alleviate some of the challenges of pay compression. HSBC is the third-largest company in the FTSE by market capitalisation, a proxy for the scale and complexity of the Group. Operating within 58 countries and territories and employing over 211,000 full-time equivalent employees means that HSBC is also one of the most geographically diverse companies and one of the largest employers in the FTSE 30. The Committee believes that the maximum pay opportunities towards the upper end of the FTSE 30 are reflective of the size and scope of HSBC. These also remain below the pay levels had the growth in median executive Director salaries observed amongst FTSE 30 companies over the last 10 years been applied to our 2014 maximum opportunities. Compared to our international banking peers, the maximum pay opportunities place HSBC second amongst our European peers, and behind all comparable US roles. The Committee believe this is appropriate given HSBC is one of the largest banking and financial services organisations in the world, which is listed in the UK, whilst recognising the different pay environment in the US. The Committee also reflected on the challenges of pay compression between the executive Directors and members of the Group Operating Committee in the context of succession planning, and considering pay outcomes and market benchmarks for each role. From 2021 to 2023, the expected total compensation of nearly a third of Group Executive Committee members was higher by on average 30% than the Group CFO. The proposed maximum opportunity for the Group CFO helps to restore the pay differential expected by the market versus other senior roles, albeit a gap still remains. 2025 fixed pay To achieve the increased maximum pay opportunity, base salary for Georges Elhedery will increase to £1,500,000 , up 9% . Whilst this is higher than the average 2025 fixed pay increase of 2.9% for UK employees, overall fixed pay for Georges will reduce by 49% following removal of his FPA. Georges’ proposed salary remains behind the level we would expect had average UK wider workforce salary increases of 4% been applied since 2014, when the 2:1 cap was introduced. The average annual HSBC Group CEO salary increase over the same period was 1% . Evolution of Group CEO salary over time (£000) We considered higher base salaries given the significant reduction in fixed pay but elected to keep the base salary increase lower, recognising wider cost of living challenges faced by colleagues and customers. This was a view shared by shareholders and reflects our disciplined approach to executive pay. For Pam Kaur, base salary will increase to £875,000 , up 9% . This enables a maximum pay opportunity reflecting the scale and complexity of the Group CFO role at HSBC and limits pay compression with comparable roles on our Group Operating Committee. Similar to Georges, though Pam’s salary increase is above the average fixed pay increase for UK employees, her overall fixed pay will reduce by 51% following removal of the FPA. Subject to shareholder approval of the remuneration policy, salary increases for both Georges and Pam will be effective from 1 March 2025, in line with the UK workforce. Performance measures and targets Our proposal represents a material change in structure and quantum, but this will only be realised if stretching performance targets are met and value is delivered for shareholders. The Committee has undertaken a comprehensive review of the performance measures used for our incentive arrangements to ensure alignment to the Group’s priorities and balance delivery of financial and strategic performance. Performance targets and ranges have been set with stretch to reflect the increased pay opportunities. This topic has been a strong focus of policy discussions with shareholders and their views are reflected in our decisions. For the 2025 annual incentive scorecard, we will: – Retain our core measures of PBT, Group RoTE and costs, each assessed excluding notable items, and introduce a measure on fee income growth relative to balance sheet growth to incentivise growth with less reliance on capital. 312 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report – Reduce the weighting for PBT to 10% and remove Asia RoTE to reduce overlap with Group RoTE and simplify the scorecard. This change retains financial measures at 60% of the scorecard, which the Committee believes appropriately balances investor views with regulatory expectations for a balanced scorecard. – Maintain customer Net Promoter Score as a strategic measure to reflect our ambition to be a top-three bank for customer satisfaction and/or improve customer satisfaction rank. – Include people and culture measures that support us in strengthening our inclusive culture of high-performance. For the 2025–2027 LTI, we will: – Retain Group RoTE, relative total shareholder return ( ’ TSR ’ ) and environment measures. – Increase the weighting of RoTE to 40% , r eflecting that the delivery of a strong stable return on tangible equity is a core measure of the sustainable returns expected by our investors. – Increase the weighting of relative TSR to 40% as it is a key measure of shareholder returns, a material relative measure used by our peers and in line with investor expectations. – Reduce the weighting of the environment measure from 25% to 20% following feedback from our shareholders on the metrics and targets used given the higher LTI opportunity, recognising that f inanced emissions targets remain difficult to include at this time . This ensures a greater proportion of the scorecard is aligned to value creation while supporting our ESG ambitions. We will not use financed emission targets for the 2025-2027 LTI awards given current challenges in methodology and the timeliness and frequency of reporting, which was generally accepted by the investors we spoke to. The Committee will keep this under review for future performance cycles. Group RoTE is the only measure used in both our annual incentive and LTI scorecards, reflecting our focus on delivering sustainable returns and a strong preference for the measure by most shareholders. This ensures we incentivise capital productivity for the current year whilst supporting our external commitment to deliver sustainable returns and mid-teens RoTE over the medium-term. We will continue to utilise a risk modifier and operate a judgement- based approach to adjustments for all risk and compliance matters, aligned to shareholder feedback and the expectations of our regulators. The Committee considers the application of the risk modifier each year and has applied it in three instances for our executive Directors since its introduction in 2021. When setting performance targets, we consider our internal financial planning and strategy process, our strategic guidance and analyst consensus where available such that minimum, target, and maximum performance levels are set with stretch. This was a key focus of investors in our consultation, who recognised that our recent LTI targets have been set to deliver maximum payouts only for outperformance. The Committee remains committed to ensuring there is sufficient stretch in our targets in future years, which is demonstrated in the maximum RoTE target for the 2025-2027 LTI and illustrated below. LTI Group RoTE performance range versus external guidance Mid-teens 15.5% 14.3% 13.0% 17.0% 16.0% 14.0% 14.0% 16.0% 18.0% 12%+ Changes in non-executive Director fees The Board, excluding non-executive Directors, has reviewed the fees payable to non-executive Directors in the context of changes to the organisational structure. Following this review, it was considered that the fees payable for chairing or being a member of a Board Committee (excluding the Nomination & Corporate Governance Committee) should be increased to recognise the responsibilities and material additional time commitment associated with such a role. Giving due consideration to the highly regulated and complex industry in which HSBC operates, it was agreed to align the additional fee for chairing a Board Committee at £150,000 per annum (i.e., in line with the current fee for chairing the Group Risk Committee). The increase in the fee for chairing a Board Committee will be phased over two years, with an increase to £125,000 per annum for 2025, and a further increase to £150,000 per annum with effect from 1 January 2026. The Board also agreed increases to the additional fee for being a member of a Board Committee, and for the role of designated non- executive Director for workforce engagement to £50,000 per annum. These increases reflect the additional activity being undertaken during this period of organisational and cultural change. No other changes are proposed to non-executive Director fees for 2025. Performance in 2024 Financial performance Our financial performance in 2024 demonstrates that our strategy is working and is delivering strong returns for our shareholders. We delivered a reported profit before tax of $ 32.3 bn, up $2.0bn compared with 2023. This increase included a $1.0bn net favourable impact from notable items, which in 2024 included gains and losses relating to our disposals in Canada and Argentina. Constant currency profit before tax excluding notable items increased by $1.4bn to $34.1bn . Reported revenue of $65.9bn was stable compared to 2023, despite a net adverse movement in gains and losses on our strategic transactions. This reflected higher customer activity in our Wealth products in WPB and in Equities and Securities Financing in GBM. 2024 costs on a target basis grew by around 5% in line with our targeted growth. Our RoTE for 2024 was 14.6% , compared with 14.6% in 2023. Excluding notable items, RoTE was 16.0% . The Board approved a fourth quarterly dividend of $ 0.36 per share, bringing the total dividend announced for 2024 to $ 0.87 per share. This includes the special dividend of $ 0.21 per share that was paid in June following the completion of the sale of HSBC Bank Canada. Furthermore, in respect of 2024 we announced three share buy-backs worth a total of $9 bn, and today we have announced a further share buy-back of up to $2 bn. Strategic performance We continue to make good progress in reshaping the Group. In 2024, we completed the sales of our retail banking operations in France, our banking business in Canada, and our businesses in Argentina, Russia and Armenia. We acquired SilkRoad Property Partners Group in Singapore and Citi’s retail wealth management portfolio in mainland China. We announced divestments in our private banking business in Germany and our business in South Africa, as well as the planned sale of our life insurance business in France. In October 2024, we announced a simplified organisational structure to accelerate delivery against our strategic priorities. We continue to strengthen our scale positions in Hong Kong and the UK and drive strong profit generation in these businesses. We remain focused on our goal to become a digital-first bank and have continued to see growth in customer adoption of our digital services across all our businesses, which is reflected in our Net Promoter Scores. Over 88% of colleagues participated in our 2024 Snapshot survey where our employee engagement index rose a further three percentage points to reach an all-time high of 80% , six percentage points above the global financial services benchmark. HSBC Holdings plc Annual Report on Form 20-F 313 Key remuneration decisions for executive Directors Executive Director changes Sir Noel Quinn stepped down as Group CEO and as an executive Director of the Board on 2 September 2024 and was succeeded by Georges Elhedery. Pam Kaur was appointed Group CFO from 1 January 2025. All remuneration decisions in respect of this change were made in accordance with our shareholder-approved policy. Given his retirement from the Group on 30 April 2025, Sir Noel Quinn will be treated as a good leaver for the purpose of unvested incentive awards. He remained eligible for a 2024 annual incentive but will not receive an LTI award for the 2025–2027 performance period, nor will he be eligible for a 2025 annual incentive. Annual incentive for 2024 performance Scorecards were set at the start of the year to align with our reported financial performance, excluding the impact of strategic transactions and one-offs on the Group's financial performance in 2024. Georges Elhedery's formulaic scorecard outcome of 78.79% (2023: 76.75% ) results in an annual incentive outcome of £1,677,000 (2023: £1,287,000 ). This was calculated by applying respective formulaic scorecard outcomes to the pro-rated maximum opportunities for the Group CEO and Group CFO roles, based on the period spent in each role during 2024. The formulaic scorecard outcome for Sir Noel Quinn was 77.81% (2023: 75.93% pre risk adjustment, 70.24% post risk adjustment), which results in an annual incentive outcome of £1,540,000 (2023: £2,018,000 ), after pro-rating for his time as Group CEO during 2024. Taking into account the Group’s performance against risk metrics, and inputs from the Group Risk Committee, the Committee used its judgement and applied no adjustment in respect of risk matters to executive Director annual incentive outcomes for 2024. 2022–2024 LTI vesting Georges Elhedery and Sir Noel Quinn participated in the 2022–2024 LTI that will vest in March 2025. The maximum RoTE and relative TSR targets were exceeded , reflecting the strong absolute and relative performance of the Group over the performance period. The capital reallocation to Asia measure was not met and performance against the environment measures exceeded the maximum target. 75% of the original award will vest on a pro-rata basis over the next five years. 2025–2027 LTI awards The Committee intends to grant both Georges Elhedery and Pam Kaur the maximum 2025-2027 LTI award of 600% of base salary (Georges Elhedery: £9,000,000 , Pam Kaur: £5,250,000 ), subject to shareholder approval of the LTI opportunity under the new policy. The value realised from the award is subject to performance over the next three years and the award will vest over a further five years with a one-year retention period on vesting shares. For further details, see ‘Long-term incentive (’LTI’) awards‘ on page 329 . Rewarding our colleagues We are taking actions that improve our ability to attract, retain and energise colleagues to deliver high performance and growth. In 2024, we changed our performance approach by simplifying ratings and focusing on better performance routines. In our Snapshot survey, 87% of colleagues reported a clear understanding of what is expected of them and 77% confirmed at least two performance check-in conversations with their manager. We also introduced a new target variable pay plan, which covers over 150,000 colleagues in 46 markets to increase transparency and differentiation of variable pay. The Committee is encouraged by increasing pay sentiment year-on- year in most areas because of actions taken through 2023, which is expected to improve further following changes introduced in 2024. For further details, see ‘Our approach to workforce reward‘ on page 332 . Fixed pay We are pleased to be accredited as a global living wage employer in 2025 and meet or exceed living wage benchmarks in all our markets. This gives confidence that we provide core financial security to colleagues through fixed pay, which is the largest part of most colleagues' reward. Fixed pay is primarily reviewed through our annual pay cycle. Effective in 2025, we have awarded an overall fixed pay increase of 3.6% . The level of increases vary by market, depending on the economic situation and individual roles. The highest increases were made to lower paid colleagues relative to relevant market benchmarks. Variable pay The Committee determined total variable pay of $3,800m , broadly flat compared with the $3,774m awarded in 2023. This was determined based on a review of our performance against financial and non- financial metrics. We considered t he strength of our financial performance in 2024 and the ratio between variable pay and pre- variable pay profit before tax, the Group ’ s performance against key risk and compliance metrics, and our total compensation position compared with market and the broader economic outlook. Total compensation across all our businesses increased relative to 2023, rewarding our colleagues for their contribution to our performance. Distribution of variable pay by business considered relative performance against RoTE , reported profit before tax and cost targets, and performance against risk and compliance metrics. Strong differentiation has meant our highest performers received the largest increases in variable pay compared with the previous year. Ex-post risk adjustments were made to the variable pay of relevant individuals for material risk events over 2024. This included adjustments for some individuals following the conclusion of the investigation into the PRA’s 29 January 2024 Notice for historic depositor protection failings arising in HSBC Bank plc and HSBC UK Bank plc and the Committee now considers this matter closed. Other remuneration matters HSBC's variable to fixed pay ratio Following shareholder approval at the 2024 AGM, the Committee reviewed several options to set new pay ratios and concluded that a single overall ratio of 10:1 was most appropriate, supported by internal guidance to manage expectations on its application. The ratio will apply across the Group, where permitted by regulation. The ratio will support us to materially strengthen alignment of pay and performance in our executive Directors’ remuneration policy. The ratio has limited impact on the wider workforce and is higher than we intend on using in practice. However, the new cap gives us flexibility to reward extraordinary individual performance delivered by a small number of employees in frontline roles. We will continue to keep our pay principles and approach under review, monitoring market developments and competitiveness, to increase the proportion of pay for performance over time. PRA/FCA consultation on UK remuneration rules The Committee welcomes the recent consultation announced by the PRA and FCA to review the UK remuneration rules to improve overall competitiveness of UK capital markets. We have introduced a degree of flexibility into our policy to ensure it remains competitive against peers once the final rules are known. Any changes made would always be in line with the key principles used by the Committee when setting the policy. We would engage with major shareholders ahead of making any material changes, and provide clear and comprehensive disclosure in our Annual Report and Accounts . We remain supportive of the use of deferral mechanisms and will continue to deliver a substantial portion of variable pay in shares to ensure alignment between shareholder interests, good risk management and individual reward. Our policy commits to a weighted average time horizon of at least five years for the deferral period of LTI awards, in line with UK Corporate Governance requirements. 314 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Plan limits under Share Plan 2011 The rules of the HSBC Share Plan 2011 currently include an annual individual limit on awards of 600% of salary, based on the market value of shares. LTI awards are not eligible to receive dividend equivalents to comply with regulatory requirements. Consistent with our disclosed practice since 2017 when the regulatory change came into force, the number of shares awarded is calculated using a share price discounted for the expected dividend yield over the vesting period. The market value of the proposed LTI award would therefore exceed 600% of base salary. Amending this limit to reflect the fair value of shares (defined in accordance with relevant accounting standards) will enable the Committee to grant up to the maximum award under the new policy. Shareholder support for this change will be sought at the 2025 AGM. Conclusion On behalf of the Committee, I would like to thank our shareholders for the time taken to engage with us and their valuable feedback as we developed our new policy. We are committed to regular engagement and I look forward to further dialogue in the year ahead. As Chair of the Committee, I hope you will support the 2024 Directors’ remuneration report, our new Directors’ remuneration policy and the amendment to plan limits under Share Plan 2011 at this year's AGM. Dame Carolyn Fairbairn Chair Group Remuneration Committee 19 February 2025 2024 executive remuneration at a glance This section sets out an overview of our performance and 2024 remuneration outcomes for executive Directors. Our performance Reported profit before tax $32.3bn (2023: $30.3bn ) Operating expenses $33.0bn (2023: $32.1bn ) Target basis operating expenses up 5% to $32.6bn Return on average tangible equity 14.6% (2023: 14.6% ) Return on average tangible equity excluding notable items of 16.0% (2023: 16.2% ) HK customer net promoter score in WPB and CMB relative to peers 1st (2023: WPB: 3rd ; CMB: 1st ) Employee engagement index 80% (2023: 77% ) Inclusion index 78% (2023: 78% ) Percentage of women in senior leadership roles 34.6% (2023: 34.1% ) Percentage of colleagues of Asian heritage in senior leadership roles 39.3% (2023: 37.8% ) Remuneration outcomes for executive Directors Summary remuneration outcomes for 2024 are set out below. Further details are set out in our annual report on Directors‘ remuneration on pages 327 to 329 . Sir Noel Quinn Georges Elhedery Annual incentive outcome (£000) Maximum opportunity 2024 annual incentive Maximum opportunity 2024 annual incentive 1 1 Calculated based on Group CFO and Group CEO scorecard outcomes applied to the respective salary for each role. Long-term incentive (LTI) outcome (£000) Maximum opportunity 2022–2024 LTI Maximum opportunity 2 2022–2024 LTI 2    Received in prior role as Co-CEO, GBM. Single total figure of remuneration (£000) 2024 2023 2024 2023 HSBC Holdings plc Annual Report on Form 20-F 315 Directors ’ remuneration policy This section sets outs the Directors’ remuneration policy proposed for shareholders' approval at the AGM on 2 May 2025. The Committee is responsible for reviewing and recommending to the Board the Directors’ remuneration policy for shareholder approval. The policy is intended to apply for three years to the end of the AGM in 2028, although we may seek shareholders’ approval for a new policy during the period depending on regulatory developments, changes to our strategy or competitive pressures. Remuneration policy – key principles The Committee determined the policy using the following key principles: – The rationale and operation of the policy should be easy to understand and transparent. – There should be a strong alignment between reward and the interests of our stakeholders, including shareholders, customers and employees. – The policy should maintain a focus on long-term performance. – Total remuneration should be competitive to ensure we can retain and attract talent to deliver our strategic priorities. – The structure should meet the expectations of investors and our regulators. Setting the policy The Committee reviewed the Director’s remuneration policy in the context of significant regulatory change following removal of the 2:1 variable to fixed pay ratio. Input was received from the Group Chairman and management while ensuring that conflicts of interest were suitably mitigated. Input was provided by the Committee’s appointed independent advisers throughout the process. Key changes to the policy as a result of this review include: – removal of Fixed Pay Allowances. – an increase in the maximum opportunity of the annual and long- term incentives. – an increase in shareholding guidelines and the introduction of a post-cessation shareholding guideline. We extensively engaged with major shareholders, representing 65% of those who voted at the 2024 AGM, and proxy advisory bodies. The Committee carefully considered all feedback received, which has directly influenced the final proposal. Full detail on the context for the review, the Committee's key considerations, including how the Committee has responded to shareholder feedback, is provided in the Chair's letter on pages 309 to 314 . Remuneration policy at a glance This section sets out the key changes in our Directors’ remuneration policy and our proposed implementation for 2025. Policy structure Total remuneration mix Maximum total remuneration opportunity (£000) 28% 42% CEO Current 1 CFO Current 1 CEO/CFO Proposed 1 13% 16% 10% 30% 59% 13% 17% 28% 41% 1 Pension accounts for 1% of the total remuneration mix. CEO Current CEO Proposed CFO Current CFO Proposed Fixed pay - 2025 implementation (£000) Georges Elhedery Pam Kaur Current Proposed Current Proposed Variable pay Annual incentive opportunity Long-term incentive opportunity Shareholding requirement Group CEO Group CFO Current Current Current Current Proposed Proposed Proposed Proposed 316 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Remuneration policy – executive Directors Fixed pay Elements Details Base salary To attract, retain and develop key talent by being market competitive and rewarding ongoing contribution to role. Operation – The base salary for an executive Director is designed to reflect the individual’s role, experience and responsibility. – Base salaries are normally reviewed on an annual basis against relevant comparator groups and may be reviewed more frequently at the discretion of the Committee. Maximum opportunity – No maximum opportunity. – Increases may be made at the Committee’s discretion, taking into consideration factors such as increases to scope and responsibilities of the role, development of the individual within the role, salary increases for the wider workforce and competitiveness against market. Cash in lieu of pension To help executive Directors build retirement savings. Operation – Directors receive a cash allowance in lieu of a pension entitlement. Maximum opportunity – The maximum opportunity will be aligned with the maximum contribution rate that HSBC could make for the majority of employees in the relevant jurisdiction. This is currently set at 10% of base salary in line with the maximum contribution rate, as a percentage of salary, that HSBC could make for a majority of employees who are defined contribution members of the HSBC Bank (UK) pension scheme in the UK. Benefits and all employee share plans Elements Details Benefits To provide support for physical, mental and financial health in accordance with local market practice. Operation Benefits take account of local market practice and include, but are not restricted to: – taxable benefits (gross value before payment of tax) including provision of medical insurance, accommodation, car, club membership, independent legal advice in relation to a matter arising out of the performance of employment duties for HSBC, tax return assistance or preparation, and travel assistance (including any associated tax due, where applicable); and – non-taxable benefits including the provision of a health assessment, life assurance and other insurance coverage. Additional benefits may also be provided when an executive is relocated or spends a substantial proportion of their time in more than one jurisdiction for business needs, or in such other circumstances as the Committee may determine in its discretion. Such benefits could include, but are not restricted to, airfare, accommodation, shipment, storage, utilities, and any tax and social security that may be due in respect of such benefits. Maximum opportunity – No maximum opportunity. – The maximum value is determined by the nature of the benefit provided. The benefit amount will be disclosed in the single total figure of remuneration table for the relevant year. All employee share plans To promote share ownership by all employees. Operation – Executive Directors are entitled to participate in all employee share plans, such as HSBC Sharesave, on the same basis as all other employees in the relevant jurisdiction. – Under Sharesave, executive Directors can make monthly savings over a period of three or five years towards the grant of an option over HSBC shares. The option price can be at a discount, currently up to 20%, on the share price at the time the option is granted. Maximum opportunity – The maximum number of options is determined by the maximum savings limit set by HM Revenue and Customs. This is currently £500 per month. – Executive Directors may also receive additional share options at no extra cost via the Sharesave bonus mechanism, with applicable rates set by HM Revenue and Customs. HSBC Holdings plc Annual Report on Form 20-F 317 Variable pay Adhering to HSBC’s values-aligned behaviours and conduct standards is a prerequisite to be considered for variable pay. Executive Directors receive an overall performance assessment that considers performance against goals and role expectations, and demonstration of our values- aligned behaviours. This is considered by the Committee when applying discretion to the formulaic scorecard outcomes. Elements Details Annual incentive To drive and reward performance against annual financial and non-financial objectives that are consistent with the strategy and align to shareholder interests. Operation Annual incentive awards are discretionary and can be delivered in any combination of cash and shares under the HSBC Share Plan 2011 (‘HSBC Share Plan’). Shares will not normally represent less than 50% of any award and are normally immediately vested. On vesting, shares equivalent to the net number of shares that vested (after those sold to cover any income tax and social security payable) must be held for a retention period up to one year, or such other period as may be expected by regulators. The awards will be subject to clawback (i.e. repayment or recoupment of paid/vested awards) on or after vesting for a period of seven years from the date of award, or such other period as required by regulators. This may be extended to 10 years, or such other period as required by regulators in the event of an ongoing internal/regulatory investigation at the end of the seven-year period. Details of the clawback provision are set out in the bottom section of this table. Any deferred shares may be entitled to dividend equivalents during the vesting period, which will be paid on vesting. Where awards do not receive dividend equivalents during the vesting period (to meet regulatory requirements), the number of shares to be awarded will be determined using a fair value share price (defined in accordance with relevant accounting standards) discounted for the expected dividend yield. Any deferred cash award may be entitled to notional returns during the deferral period, or any appropriate adjustment to reflect such notional returns, as determined by the Committee. The Committee retains discretion to: – apply a longer retention period; – increase the proportion of the award to be delivered in shares; or – defer the vesting of a portion of the awards, subject to such conditions that the Committee may determine at its discretion (which may include continued employment). The deferred awards will be subject to malus (i.e. reduction and/or cancellation of unvested awards) provisions during any applicable deferral period. The Committee also retains discretion to amend the structure and terms of awards to reflect changes in regulatory requirements whilst ensuring that any changes will align with the key principles of the Directors' remuneration policy. The Committee may adjust and amend awards in accordance with the relevant plan rules. Maximum opportunity The maximum opportunity for the annual incentive award in respect of a financial year is up to 300% of base salary. Performance measures Performance is normally measured against an annual scorecard, based on targets set for financial and non-financial measures, determined at the beginning of the financial year. The scorecards may vary by individual. Measures with financial targets will generally have a weighting of 60% for both the Group CEO and the Group CFO. The Committee will review the scorecard annually and may vary the measures, weighting and targets each year. The overall payout of the annual incentive could be between 0% (for below minimum performance) and 100% of the maximum opportunity. Minimum and maximum performance levels for each measure are defined in the scorecard. 25% of the award opportunity will pay out for achieving minimum performance and 100% of the award will pay out for achieving maximum performance. Details on payout between these levels will be disclosed in the respective Directors' Remuneration Report. The Committee exercises its judgement to determine performance achieved and awards at the end of the performance period, which in normal circumstances will be one financial year, to ensure that the outcome is fair in the context of overall Group and individual performance. The Committee can adjust the payout based on the outcome of the performance measures, if it considers that the payout determined does not appropriately reflect the overall position and performance of the Group for the relevant performance period. The scorecard outcome may also be subject to a risk and compliance modifier and/or a capital underpin under which the Committee will have the discretion to adjust down the overall scorecard outcome, taking into account performance against those factors. The Committee has the discretion to: – change the overall weighting of the financial and non-financial measures, whilst ensuring the overall balance remains appropriate; – vary the measures and their respective weightings within each category. The specific performance measures will be disclosed in the ‘annual report on remuneration’ for the relevant year; and – make adjustments to performance targets, measures, weightings and/or outcomes in exceptional circumstances. This may be to reflect significant one-off items that occur during the measurement period and/or where the Committee determines that original measures, targets or conditions are no longer appropriate or that amendment is required so that the measures, targets or conditions achieve their original purpose. Full and clear disclosure of any such adjustments will be made in the 'annual report on remuneration' for the relevant year, subject to commercial confidentiality. Malus and clawback (applicable to both annual incentive and LTI) The Committee has the discretion to operate malus and clawback provisions. Malus can be applied to unvested awards in circumstances including: – detrimental conduct, including conduct that brings the business into disrepute; – past performance being materially worse than originally reported; – restatement, correction or amendment of any financial statements; and – improper or inadequate risk management. Clawback may be applied in circumstances including: – participation in, or responsibility for, conduct that results in significant losses; – failing to meet appropriate standards and propriety; – reasonable evidence of misconduct or material error that would justify, or would have justified, summary termination of a contract of employment; – a material failure of risk management suffered by HSBC or a business unit in the context of Group risk management standards, policies and procedures; and – any other circumstances required by local regulatory obligations to which any member of the HSBC Group or its subsidiary is subject. 318 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Elements Details Long-term incentives (‘LTI’) To incentivise sustainable long-term performance and alignment with shareholder interests. Operation LTI awards are discretionary and are granted if the Committee considers that there has been satisfactory performance over the prior year. The awards are granted as rights to receive shares under the HSBC Share Plan, normally subject to a forward-looking three-year performance period from the start of the financial year in which the awards are granted. At the end of the performance period, the performance outcome will be used to assess the percentage of the awards that will vest. These shares will then normally vest in five equal instalments, with the first vesting on or around the third anniversary of the grant date and the last instalment vesting on or around the seventh anniversary of the grant date, in accordance with current UK remuneration rules. On each vesting, shares equivalent to the net number of shares that vested (after those sold to cover any income tax and social security payable) must be held for a retention period up to one year (or such other period as may be permitted by regulators). Awards are subject to malus provisions prior to vesting. The awards will also be subject to clawback on or after vesting for a period of seven years from the date of award, or such other period as required by regulators. This may be extended to 10 years, or such other period as required by regulators, in the event of an ongoing internal/regulatory investigation at the end of the seven-year period. Details of the malus and clawback provisions are set out in the previous section on annual incentive awards. Awards may be entitled to dividend equivalents during the vesting period, which will be paid on vesting. Where awards do not receive dividend equivalents during the vesting period (to meet regulatory requirements), the number of shares to be awarded will be determined using a fair value share price discounted for the expected dividend yield. The Committee also retains discretion to amend the structure and terms of awards to reflect changes in regulatory requirements whilst ensuring that any changes will align with the key principles of the Directors' remuneration policy. In any event, we expect the weighted average time horizon of the deferral period to be at least five years. The Committee may adjust or amend awards in accordance with the rules of the HSBC Share Plan. Maximum opportunity The maximum opportunity for the LTI award in respect of a financial year is up to 600% of base salary. Performance measures The Committee will take into consideration prior performance when assessing the value of the LTI grant. Forward-looking performance is measured against a long-term scorecard, determined at the start of the financial year in which awards are granted. Financial measures will generally have a weighting of 60% or more. For each measure, the Committee will determine the extent of achievement based on actual performance against the target set and other relevant factors that the Committee considers appropriate to take account of in order to better reflect the Group's underlying performance. The overall payout level could be between 0% (for below minimum performance) and 100% of the maximum. Minimum, target and maximum performance levels for each measure are defined in the scorecard. 25% of the award opportunity will vest for achieving minimum performance, 50% of the award will vest for achieving target performance and 100% of the award will vest for achieving maximum performance. Where performance achieved is between the minimum, target and maximum level of performance set in the scorecard, the number of awards that will vest will be determined on a straight-line basis. The Committee can adjust the LTI payout based on the outcome of the performance measures, if it considers that the payout determined does not appropriately reflect the overall position and performance of the Group during the performance period. The scorecard outcome may also be subject to a risk and compliance modifier and/or a capital underpin under which the Committee will have the discretion to adjust down the overall scorecard outcome, taking into account performance against those factors. Performance targets will normally be set annually for each three-year cycle. The Committee has the discretion to: – change the overall weighting of the financial and non-financial measures, whilst ensuring the overall balance remains appropriate; – vary the measures and their respective weightings within each category. The specific performance measures will be disclosed in the ‘annual report on remuneration’ for the relevant year; – vary the risk and compliance and/or any underpin measures; and – make adjustments to performance targets, measures, weightings and/or outcomes in exceptional circumstances. This may be to reflect significant one-off items that occur during the measurement period and/or where the Committee determines that original measures, targets or conditions are no longer appropriate or that an amendment is required so that the measures, targets or conditions achieve their original purpose. Revised targets/measures will be, in the opinion of the Committee, no less difficult to satisfy had they been set at the same time as the original targets. Full and clear disclosure of any such adjustments will be made within the 'annual report on remuneration' for the relevant year, subject to commercial confidentiality. Other Elements Details Shareholding guidelines To ensure appropriate alignment with the interest of our shareholders. Operation Executive Directors are expected to satisfy the following shareholding requirement as a percentage of base salary within five years from the date of their appointment: – Group CEO: 600% – Group CFO: 600% On cessation of employment, executive Directors will normally be required to maintain the minimum shareholding requirement for two years (or, if their actual shareholding is lower at the time of cessation, the actual shareholding upon departure). For this purpose, unvested shares which are not subject to forward-looking performance conditions (on a net of tax basis) will count towards the shareholding requirement. HSBC operates an anti-hedging policy under which individuals are not permitted to enter into any personal hedging strategies in relation to HSBC shares subject to a vesting and/or retention period. Maximum opportunity Not applicable. HSBC Holdings plc Annual Report on Form 20-F 319 Committee discretion The Committee welcomes the recent consultation announced by the PRA and FCA to review the UK remuneration rules to improve the overall competitiveness of UK capital markets. The proposals cover a wide range of areas, including the application of deferral and retention periods, which are directly applicable to our policy design. Aligned to the key principles used by the Committee to set the policy, the Committee feel it is important that it retains discretion to amend the structure and terms of awards in the event of regulatory change to ensure the policy continues to meet the expectations of our regulators and it remains competitive versus peers. Where discretion is exercised by the Committee, changes will always be made in line with the key principles used to determine the policy. We will engage with major shareholders ahead of making any material change, and clearly disclose any changes and their rationale in our Annual Report and Accounts. One area discussed with shareholders as part of our engagement was how the Committee would exercise their discretion on the length and amount of deferral in the event of regulatory change. The Committee believe that deferral mechanisms and the requirements to deliver a substantial portion of variable remuneration in shares are critical policy design elements to ensure ongoing alignment between reward and the interests of our shareholders. We have therefore included in the policy a commitment to ensure that the weighted average time horizon of the deferral period for LTI awards is at least five years, in line with UK Corporate Governance requirements. In addition to the specific areas of discretion expressly set out in the policy table, the incentive plans include a number of operational areas of discretion available to the Committee, including: – the right to grant awards in the form of conditional share awards or options (including nil-cost options); – the right to amend a performance condition in accordance with its terms, or if anything happens that causes the Committee to consider it appropriate to do so; – the right to settle the award in cash, based on the relevant share price, or shares as appropriate; and – the right to adjust the award on a variation of share capital or other corporate event that affects the current or future value of the award, or alternatively, the right to vest the award early in such circumstances. The Committee reserves the right to make any remuneration payments and payments for loss of office, notwithstanding that they are not in line with the policy set out above, where the terms of the payment were agreed: – before the policy above or any previous policy came into effect; – at a time where a previous policy, approved by shareholders, was in place provided the payment is in line with the terms of that policy; or – at a time when the relevant individual was not a Director of the Group and the payment was not in consideration for the individual becoming a Director of the Group. For these purposes, payments include the Committee satisfying awards of variable remuneration. This means making payments in line with the terms that were agreed at the time the award was granted. Choice of performance measures and targets The performance measures selected for the annual incentive and LTI awards will be set on an annual basis by the Committee, taking into account the Group’s strategic priorities and any feedback received from our shareholders. The following table sets out the performance measures we currently consider for inclusion in our scorecards. The Committee retains the discretion to choose other measures that are appropriate for achieving our strategic priorities and meeting any regulatory expectations, taking into account the views of our shareholders. Our objective when setting targets is to balance stretch and achievability so they act as an effective incentive whilst recognising outperformance. Financial targets are set on a reported basis excluding notable items. This means items occurring outside the normal course of business and which are generally not expected to repeat, are excluded, and assessed performance is not impacted by one-offs. Performance targets are set taking into account a number of factors, including the targets set in our financial resource plan, our strategic priorities, shareholder expectations, the economic environment and risk appetite. Non-financial targets are set based on progress versus prior year actuals, external commitments and market benchmarks. Minimum targets are set considering prior year(s) performance and downside risks to the financial resource plan. Maximum targets include a stretch above plan, considering upside opportunities. The overall range is reviewed, taking into account external commitments and analyst consensus, where available. As a result, the final target ranges are not formulaically driven or always symmetrically spread around the plan. Performance measures Measures and modifier/underpin Example measures for annual incentive scorecard Example measures for LTI scorecard Rationale Financial measures – Profit before tax – RoTE – Revenue growth – Volume growth – Costs – RoTE – Total shareholder return – Underpin to maintain a minimum CET1 ratio Measures are selected to incentivise the achievement of our financial targets as set out in our strategic priorities and financial resource plan. Strategic measures – Customer satisfaction – Employee engagement – Succession planning and inclusion – Carbon reduction and sustainable finance – Reduce carbon emissions – Sustainable finance Measures are selected to support the delivery of our strategic priorities. Risk and compliance measures, modifier and/or underpin – Sustained delivery of global conduct outcomes – Effective financial crime risk management – Effective management of material operational risks – Risk metrics to identify when business activities are outside of tolerance level for a significant period of time – Failures in risk management that have resulted in significant customer detriment, reputational damage and/or regulatory censure – CET1 level – Modifier linked to risk and compliance performance Measures are chosen to ensure a high level of accountability of risk and conduct, to promote an effective risk management environment and to embed a robust governance system. 320 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Approach to recruitment remuneration –  executive Directors On the recruitment or appointment of a new executive Director, the Committee would adhere to the following principles: – Remuneration packages should be in line with the approved policy for executive Directors. – Remuneration packages must meet any applicable local regulatory requirements. – Where necessary, compensation may be provided in respect of forfeiture of remuneration awards from an existing employer (for example, buy-out awards). Outlined in the following table are all components that would be considered for inclusion in the remuneration package of a new executive Director appointment and, for each, the approach that would be adopted. In the case of an internal appointment, any existing commitments will be honoured and any variable element awarded in respect of the prior role will be allowed to be paid out according to its existing terms. Components of remuneration package of a new executive Director Component of remuneration Approach taken Fixed pay The base salary will reflect the individual’s role, experience and responsibility, and will be set in the context of market practice. The maximum cash in lieu of pension allowance will be no more than the maximum contribution, as a percentage of salary, that can be made for the majority of employees in the relevant jurisdiction. Benefits Benefits to be provided will be dependent on circumstances while in line with Group policy and the remuneration policy table, including the global mobility policy (where applicable) and local regulations. Variable pay awards New appointments will be eligible to be considered for variable pay awards consisting of an annual incentive and/or LTI award (or any other element which the Committee considers appropriate given the particular circumstances but not exceeding the maximum level of variable remuneration set out below). For the year in which the individual commences providing services as an executive Director, the Committee retains the discretion to determine the proportion of variable pay to be deferred, the deferral and retention period, whether any performance and/or continued employment conditions should be applied, and the period over which such performance should be assessed. In exercising this discretion, the Committee will take into account the circumstances in which the individual is appointed (for example, if it is promotion of an internal candidate or an external appointment), expectations of shareholders and any regulatory requirements. Total variable pay awarded for the year in which the individual is newly appointed as an executive Director will be limited to 900% of base salary. This limit excludes buy-out awards and is in line with the aggregate maximum variable pay opportunity set out in the remuneration policy table. Guaranteed bonuses are only permitted by exception and in very rare and limited circumstances (for example, where the individual loses a variable pay opportunity with the previous employer as a result of joining HSBC and such an award is considered essential to attract and hire the candidate). If such an award is provided, then in line with the PRA remuneration rules, it will be limited to the first year of service, subject to the Group deferral policy and performance requirements. Buy-out awards The Committee may make an award to buy out remuneration terms forfeited on resignation from the previous employer. The Group buy-out policy is in line with the PRA remuneration rules, which state that both the terms and amount of any replacement awards will not be more generous than the award forfeited on departure from the former employer. In considering buy-out levels and conditions, the Committee will take into account the type of award, performance measures and likelihood of performance conditions being met in setting the quantum of the buy-out. Buy-out awards will match the terms of forfeited awards with the previous employer as closely as possible, subject to proof of forfeiture and other relevant documentation. Where the vesting time is fewer than 90 days, cash or deferred cash may be awarded for administrative purposes. Where appropriate, the Committee retains the discretion to utilise the provisions provided in the UK Financial Conduct Authority's Listing Rules for the purpose of making buy-out awards. HSBC Holdings plc Annual Report on Form 20-F 321 Policy on payments for loss of office – executive Directors The following table sets out the basis on which payments for loss of office may be made. Other than as set out in the table, there are no further obligations that could give rise to remuneration payments or payments for loss of office: Payments for loss of office Component of remuneration Approach taken Fixed pay and benefits Executive Directors may be entitled to payments in lieu of: – notice, which may consist of base salary, cash in lieu of pension allowance, and other contractual benefits, or an amount in lieu of; and/or – accrued but untaken holiday entitlement. Payments may be made in instalments or a lump sum, and may be subject to mitigation, and subject to applicable tax and social security deductions. Annual incentive and LTI In exceptional circumstances, as determined by the Committee, an executive Director may be eligible for the grant of annual incentives and/or LTIs under the HSBC Share Plan, taking into account the time worked in the performance year and based on the individual’s contribution. Unvested awards All unvested awards will be forfeited when an executive Director ceases employment voluntarily and is not deemed a good leaver. An executive Director may be considered a good leaver, under the HSBC Share Plan, if their employment ceases in specified circumstances, which include: – ill health, injury or disability, as established to the satisfaction of the Committee; – retirement with the agreement and approval of the Committee; – the employee’s employer ceasing to be a member of the Group; – redundancy with the agreement and approval of the Committee; or – any other reason at the discretion of the Committee. If an executive Director is considered a good leaver, unvested awards will normally continue to vest in line with the applicable vesting dates, subject to performance conditions, the HSBC share plan rules, and malus and clawback provisions. Unless the Committee determined otherwise, awards made subject to forward-looking performance conditions, including LTI awards, will normally be subject to pro-rating for time in employment during the performance period. In the event of death, unvested awards will vest and be released to the executive Director’s estate as soon as practicable. In respect of outstanding unvested awards, the Committee may determine that good leaver status is contingent upon the Committee being satisfied that the executive Director has no current or future intention at the date of leaving HSBC of being employed by any competitor financial services firm. The Committee determines the list of competitor firms from time to time, and the length of time for which this restriction applies. If the Committee becomes aware of any evidence to the contrary before vesting, the award will lapse. Post-departure benefits Executive Directors can be provided certain benefits for up to a maximum of seven years from date of departure for those who depart under good leaver provisions under the HSBC Share Plan, in accordance with the terms of the policy. Benefits may include, but are not limited to, medical coverage, tax return preparation assistance and legal expenses. Other Where an executive Director has been relocated as part of their employment, the Committee retains the discretion to pay the repatriation costs. This may include, but is not restricted to, airfare, accommodation, shipment, storage, utilities, and any tax and social security that may be due in respect of such benefits. Except in the case of gross misconduct or resignation, an executive Director may also receive retirement gifts. Legal claims The Committee retains the discretion to make payments (including professional and outplacement fees) in connection with an executive Director’s cessation of office or employment. This may include payments that are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement of any claim arising in connection with the cessation of that executive Director’s office or employment. Change of control In the event of a change of control, outstanding awards will be treated in line with the provisions set out in the respective plan rules. Other directorships Executive Directors may accept appointments as non-executive Directors of companies that are not part of HSBC if so authorised by either the Board or the Nomination & Corporate Governance Committee. When considering a request to accept a non-executive Director appointment, the Board or the Nomination & Corporate Governance Committee will take into account, among other things, the expected time commitment associated with the proposed appointment. The time commitment for external appointments is also routinely reviewed to ensure that it will not compromise the executive Director’s commitment to HSBC. Service contracts The service contracts of executive Directors do not have a fixed term. The notice periods of executive Directors are set at the discretion of the Committee, taking into account market practice and governance considerations. Service agreements for each executive Director are available for inspection at HSBC Holdings’ registered office. Consistent with the best interests of the Group, the Committee will seek to minimise termination payments. Executive Directors may be eligible for a payment in relation to statutory rights. Contract date (rolling) Notice period (Director and HSBC) Georges Elhedery 01 January 2023 12 months Pam Kaur 01 January 2025 12 months 322 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Remuneration scenarios The following charts show how the total value of remuneration and its composition would vary under different performance scenarios for executive Directors under the proposed policy, which is effective from the date of the 2025 AGM, subject to shareholders’ approval. The charts have been prepared using 2025 salaries and, therefore, the cash in lieu of pension, annual incentive and LTI opportunities have been computed as percentages of 2025 salaries. Benefits is represented by the value of regular benefits in the 2024 single figure of total remuneration. For Georges Elhedery, this is the annualised value of benefits for Sir Noel Quinn, and for Pam Kaur this is the value of benefits for Georges Elhedery. The charts set out: – the minimum level of remuneration receivable under the policy for each performance year; – the remuneration level for achieving target level of performance (which assumes 50% of maximum variable pay opportunity is realised); – the maximum level of remuneration (which assumes 100% of the variable pay opportunity is realised); and – the maximum level of remuneration assuming a 50% increase in share price for LTI awards. Georges Elhedery (£000) Proposed policy minimum 1 Proposed policy target Proposed policy maximum Proposed policy maximum with 50% share price increase 26% 29% 23% 59% 68% 53% 8% 11% 19% 90% 2% 1% 1% Pam Kaur (£000) Proposed policy minimum 1 Proposed policy target Proposed policy maximum Proposed policy maximum with 50% share price increase 19% 11% 91% 26% 53% 29% 59% 8% 23% 68% 2% 1% 1% 1 Under the proposed policy minimum, benefits account for 10% of the total remuneration receivable for Georges Elhedery, and 9% of the total remuneration receivable for Pam Kaur. HSBC Holdings plc Annual Report on Form 20-F 323 Remuneration policy – non-executive Directors The Nomination & Corporate Governance Committee has considered the time commitments required for all non-executive Directors as the Board supports HSBC through its ambitious agenda of governance reform, growth and organisational development in an environment of increasing regulatory, political and organisational complexity. Further information on the time commitment non-executive Directors are expected to fulfil is set out on page 353 . The following table sets out the framework that will be used to determine the fees for non-executive Directors during the term of this policy. Elements and link to strategy Operation Maximum opportunity Fees To reflect the time commitment and responsibilities of a non- executive Director of HSBC Holdings. The policy for non-executive Directors is to pay: – base fees; and – further fees for additional Board duties, including but not limited to chairing a committee, membership of a committee, or acting as the Senior Independent Director and/or Deputy Chairperson. Fees are paid in cash. The Board retains the discretion to pay in shares rather than cash where appropriate. The non-executive Group Chairperson will be paid a fixed annual fee for all Board responsibilities based on their experience and the time commitments expected for the role, together with such other benefits as the Committee may in its absolute discretion determine. A newly appointed non-executive Director would be paid in line with the policy on a time-apportioned basis in the first year as necessary. No sign-on payments are offered to non-executive Directors. The Board (excluding the non-executive Directors) has discretion to approve changes to the fees. The Board may also introduce any new component of fees for non-executive Directors, subject to the principles, parameters and other requirements set out in this remuneration policy. Certain non-executive Directors may be entitled to receive fees for their services as directors of subsidiary companies of HSBC Holdings. Such additional remuneration is determined by the Board of Directors of each relevant subsidiary within a framework set by the Committee. – The Board will normally review the amount of each component of fees periodically to assess whether, individually and in aggregate, they remain competitive and appropriate in light of changes in roles, responsibilities and/or time commitment of the non-executive Directors, and to ensure that individuals of the appropriate calibre are retained or appointed. – There is no prescribed maximum annual increase. The Committee is guided by the general increase for the employee population but on occasions may need to recognise other factors including, but not limited to, change in responsibility and/or variance to market levels of remuneration. – Travel allowances are set at an appropriate level, taking into account the time requirement for non-executive Directors to travel to overseas meetings. Expenses/benefits Any taxable or other expenses incurred in performing their role are reimbursed, as well as any related tax cost on such reimbursement. Non-executive Directors may on occasion receive reimbursement for costs incurred in relation to the provision of professional advice. These payments, if made, are taxable benefits to the non-executive Directors and the tax arising is paid by the Group on the Directors’ behalf. Not applicable Shareholding guidelines To ensure appropriate alignment with the interests of our shareholders. Non-executive Directors, individually or with their connected persons, are expected to satisfy a shareholding guideline of 15,000 shares within five years from their appointment. The Committee reviews compliance with the guidelines annually. The Committee has full discretion in determining any consequences in cases of non-compliance. Not applicable Service contracts Non-executive Directors are appointed for fixed terms not exceeding three years, which may be renewed subject to their re-election by shareholders at AGMs. Non-executive Directors do not have service contracts, but are bound by letters of appointment issued for and on behalf of HSBC Holdings, which are available for inspection at HSBC Holdings’ registered office. Policy on payments for loss of office – non-executive Directors There are no obligations in the non-executive Directors’ letters of appointment that could give rise to remuneration payments or payments for loss of office. Non-executive Directors are entitled to notice under their letter of appointment. Non-executive Directors’ current terms of appointment will expire as follows: 2025 AGM 2026 AGM 2027 AGM José Antonio Meade Kuribreña Kalpana Morparia James Forese Geraldine Buckingham Steven Guggenheimer Rachel Duan Eileen Murray Dame Carolyn Fairbairn Ann Godbehere Brendan Nelson Swee Lian Teo 324 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Policy alignment with UK Corporate Governance Code The table below details how the Group Remuneration Committee addresses the principles set out in the UK Corporate Governance Code with respect to the Directors’ remuneration policy. This covers both the 2018 UK Corporate Governance Code applicable in 2024, and the revised 2024 UK Corporate Governance Code applicable from 2025 onwards. Information related to malus and clawback can be found on page 317 . Provision Approach Clarity – The Committee regularly engages and consults with major shareholders to take into account shareholder feedback and to ensure there is transparency on our policy and its implementation. – Details of our remuneration practices and our remuneration policy for Directors are published and available to all our employees. Remuneration arrangements should be transparent and promote effective engagement with shareholders and the workforce. Simplicity – Our Directors’ remuneration policy has been designed so that it is easy to understand and transparent, while complying with the provisions set out in the UK Corporate Governance Code and the remuneration rules of the UK’s PRA and FCA, as well as meeting the expectations of our shareholders. The objective of each remuneration element is explained and the amount paid in respect of each element is clearly set out. Remuneration structures should avoid complexity and their rationale and operation should be easy to understand. Risk – In line with regulatory requirements, our remuneration practices promote sound and effective risk management while supporting our business objectives. – The Group Chief Risk and Compliance Officer attends Committee meetings and updates the Committee on the overall risk profile of the Group. The Committee also seeks inputs from the Group Risk Committee when making remuneration decisions. – Risk and conduct considerations are taken into account in setting the variable pay pool, from which any executive Director variable pay is funded. – Executive Directors' annual incentive and LTI scorecards include a mix of financial and non-financial measures. Financial measures are subject to a CET1 underpin to ensure CET1 remains within risk tolerance levels while achieving financial targets. In addition, the overall scorecard outcome is subject to a risk and compliance modifier. – The deferred portion of any awards granted to executive Directors is subject to a seven-year deferral period during which our malus policy can be applied. All variable pay awards that have vested are subject to our clawback policy for a period of up to seven years from the award date (extending to 10 years where an investigation is ongoing). Remuneration structures should identify and mitigate against reputational and other risks from excessive rewards, as well as behavioural risks that can arise from target-based incentive plans. Predictability – The charts set out on page 292 show how the total value of remuneration and its composition vary under different performance scenarios for executive Directors. The range of possible values of rewards to individual Directors and any other limits or discretions should be identified and explained at the time of approving the policy. Proportionality – The annual incentive and LTI scorecards reward achievement of our financial resource plan targets, as well as long-term financial and shareholder value creation targets. – The Committee retains the discretion to adjust the annual incentive and LTI payout based on the outcome of the relevant scorecards, if it considers that the payout determined does not appropriately reflect the overall position and performance of the Group during the performance period. The link between individual awards, the delivery of strategy and the long-term performance of the Group should be clear and outcomes should not reward poor performance. Alignment with culture – In order for any annual incentive award to be made, each executive Director must achieve a minimum standard of conduct, which is assessed by reference to HSBC values. – Annual incentive and LTI scorecards contain non-financial measures linked to our wider social strategy. These include measures related to reducing the environmental impact of our operations, improving customer satisfaction and inclusion. – Our Leadership 360 provides one of several ways for senior employees to ask for feedback about how they lead to help inform their ongoing development. Incentive schemes should drive behaviours consistent with the Group’s purpose, values and strategy. Remuneration arrangements for colleagues Our reward principles and commitments guide our approach to workforce reward and support our focus on being a great place to work. The Committee reviews these principles and commitments to support HSBC’s overall ability to attract, retain, develop and energise the best people, and who are aligned to HSBC’s values. Full details of our remuneration framework for colleagues is provided on page 325 . Our executive Directors’ remuneration policy aligns with the framework for colleagues as follows: – Externally sourced market data is used to help guide pay decisions for colleagues, including executive Directors. – The base salary increases for executive Directors take into consideration the base salary increases of colleagues across the Group, and relevant market conditions. – The cash in lieu of pension allowance for executive Directors will not exceed the maximum contribution (as a percentage of salary) that can be made for the majority of colleagues in the relevant jurisdiction. – All colleagues are eligible to be considered for an annual incentive awar d based on their overall performance assessment, which considers performance against goals and role expectations, and demonstration of our values-aligned behaviours. The variable pay for all colleag ues, including executive Directors, is funded from a Group variable pay pool that is determined with reference to Group performance. Colleagues who receive a variable pay award above a certain level have a portion of their award deferred over a period of three to seven years, or other period as required by regulators. – LTI awards are considered for senior management, given their ability to directly influence the Group's long-term performance. The Board gathers views from our colleagues through a number of engagement channels. Our management engages with colleagues, either on a Group-wide basis or in the context of smaller focus groups, to solicit feedback generally on a wide range of matters, including pay. Our annual survey on pay seeks the views of all colleagues on their performance and pay outcomes. The Committee reviews the outcomes of the survey and determines the key remuneration priorities for the forthcoming year. Whilst we have not explicitly sought the views of colleagues on the new policy, many of our colleagues are also shareholders and therefore have the opportunity to vote on the policy at the 2025 AGM. As part of our annual calendar, the Committee Chair also hosts a forum attended by the chairs of our principal subsidiary boards and remuneration committees. This allows the Committee to understand local market factors and feedback gathered from colleagues, within the regions where we operate, on pay and performance matters. This also helps both management and the Committee to determine the prioritisation of pay budgets, and allows the Committee to ensure that funding is directed to the areas of need in support of the Group’s strategic ambitions. HSBC Holdings plc Annual Report on Form 20-F 325 Remuneration structure for colleagues We set out below the key features of our remuneration framework, which applies on a Group-wide basis, subject to compliance with local laws: Remuneration components and objectives Application for Group employees Approach for executive Directors Fixed pay Attract and retain colleagues with market competitive pay for the role, skills and experience required. – Fixed pay may include base salary, fixed pay allowances, cash in lieu of pension and other cash allowances in accordance with local market practice. – It is based on predetermined criteria, non-discretionary, transparent and not reduced based on performance. – It represents a higher proportion of total compensation for more junior colleagues. – Fixed pay may change to reflect an individual’s position, role or grade, cost of living in the country, individual skills, capabilities and experience. – Fixed pay is generally delivered in cash on a monthly basis. – Consistent with approach for Group colleagues except that under our proposed new policy, executive Directors will not receive a fixed pay allowance. Benefits Support the physical, mental and financial health of a diverse workforce in accordance with local market practice. – Benefits may include, but are not limited to, the provision of a pension, medical insurance, life insurance and health assessment. – Provision of medical insurance, life insurance, car and tax return assistance. Variable pay Incentivise and reward performance based on annual financial and non- financial measures consistent with the medium- to long-term strategy, stakeholder interests and values-aligned behaviours. – All colleagues are eligible to be considered for a discretionary variable pay award. Individual awards are determined against performance goals set at the start of the year. – Variable pay represents a higher proportion of total compensation for more senior colleagues to strengthen alignment between total compensation and business performance. – Variable pay for employees is limited to 10 times fixed pay, except where local regulations require otherwise. – Awards are generally paid in cash and shares. For MRTs, at least 50% of the awards are in shares and/or where required by regulations, in units linked to asset management funds. – Annual incentive is determined based on the outcomes of an annual scorecard of financial and non-financial measures. – Executive Directors and members of the Group Operating Committee are also eligible to be considered for a long-term incentive award, which is subject to three-year forward-looking performance measures. Buy-out awards Support recruitment of key individuals. – Buy-out awards may be offered if an individual holds any outstanding unvested awards that are forfeited on resignation from the previous employer. – The terms of the buy-out awards will not be more generous than the terms attached to the awards forfeited on cessation of employment with the previous employer. – For new hires, the approach is consistent with the approach taken for employees and the policy approved by shareholders. New hire indicative variable pay Support recruitment of key individuals. – New hire indicative variable pay is awarded in exceptional circumstances, typically involving a critical senior new hire, and is limited to an individual’s first year of employment only. The award is subject to a number of factors (such as the respective performance of the Group, business unit and individual), and the final value paid remains at the full discretion of HSBC. – For new hires, the approach is consistent with the approach taken for employees and the policy approved by shareholders. Deferral Align employee interests with the medium- to long- term strategy, stakeholder interests and values-aligned behaviours. – A Group-wide deferral approach is applicable to all employees. A portion of annual incentive awards above a specified threshold is deferred in shares vesting annually over a three-year period (33% vesting on the first and second anniversaries of grant and 34% on the third). – Awards for MRTs are paid in line with the PRA and FCA remuneration rules, and in compliance with local regulations. – This means that awards are generally subject to a minimum 40% deferral (60% for awards of £500,000 or more) over a minimum period of four years up to a maximum of seven years. – Group standard deferral generally applies to MRTs identified as ’de minimis’. Individuals based outside the UK and identified as MRTs under local regulations, would be subject to local requirements where necessary. – All deferred awards are subject to malus provisions, subject to compliance with local laws. Awards granted to MRTs on or after 1 January 2015 and awards granted to non-MRTs on or after 1 January 2022 are subject to clawback. – HSBC operates an anti-hedging policy for all employees, which prohibits employees from entering into any personal hedging strategies in respect of HSBC securities. – For all Group MRTs and the majority of local MRTs, excluding executive Directors, a minimum 50% of the deferred awards is in HSBC shares with the remaining portion in deferred cash. Local regulatory requirements would also apply where necessary. – For some employees in our asset management business, where required by the relevant regulations, at least 50% of the deferred award is linked to fund units reflective of funds managed by those entities, with the remaining portion in deferred cash awards. – Variable pay awards made in HSBC shares or linked to relevant fund units granted to MRTs are generally subject to a one-year retention period post-vesting. – MRTs who are subject to a five-year deferral period, except senior management or individuals in PRA- and FCA-designated senior management functions, have a six-month retention period applied to their awards. – Where an employee is subject to more than one regulation, the requirement specific to the sector and/or country in which the individual is working is applied. – All of the LTI award, or at least 60% of the total variable award (including LTI), is deferred. The deferred awards will vest in five equal annual instalments, with the first vesting on or around the third anniversary of the grant date and the last instalment vesting on or around the seventh anniversary of the grant date. – All deferred awards are in HSBC shares and subject to a post-vesting retention period of one year. Severance payments Adhere to contractual agreements with involuntary leavers. – Where an individual’s employment is terminated involuntarily for gross misconduct then, subject to compliance with local laws, the Group’s policy is not to make any severance payment and all outstanding unvested awards are forfeited. – For other cases of involuntary termination of employment, the determination of any severance will take into consideration the performance of the individual, contractual notice period, applicable local laws and circumstances of the case. – Generally, for good leavers, all outstanding unvested awards will normally continue to vest in line with the applicable vesting dates. Where relevant, any performance conditions attached to the awards, and malus and clawback provisions, will remain applicable to those awards. – Severance amounts awarded to MRTs are not considered as variable pay for the purpose of application of the deferral and variable pay cap rules under the PRA and FCA remuneration rules where such amounts include: (i) payments of fixed remuneration that would have been payable during the notice and/or consultation period; (ii) statutory severance payments; (iii) payments determined in accordance with any approach applicable in the relevant jurisdictions; and (iv) payments made to settle a potential or actual dispute. – Any payments will be in line with the policy on loss of office. 326 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Payments on loss of office The table below sets out the basis on which payments on loss of office may be made. Other than as set out in the table, there are no further obligations which could give rise to remuneration payments or payments for loss of office. Payments on loss of office Component of remuneration Approach taken Fixed pay and benefits Executive Directors may be entitled to payments in lieu of: – notice, which may consist of base salary, FPA, pension entitlements and other contractual benefits, or an amount in lieu of; and/or – accrued but untaken holiday entitlement. Payments may be made in instalments or a lump sum, and may be subject to mitigation, and subject to applicable tax and social security deductions. Annual incentive and LTI In exceptional circumstances, as determined by the Committee, an executive Director may be eligible for the grant of annual and/or long-term incentives under the HSBC Share Plan based on the time worked in the performance year and on the individual’s contribution. Unvested awards All unvested awards will be forfeited when an executive Director ceases employment voluntarily and is not deemed a good leaver. An executive Director may be considered a good leaver, under the HSBC Share Plan, if their employment ceases in specified circumstances which includes: – ill health, injury or disability, as established to the satisfaction of the Committee; – retirement with the agreement and approval of the Committee; – the employee’s employer ceasing to be a member of the Group; – redundancy with the agreement and approval of the Committee; or – any other reason at the discretion of the Committee. If an executive Director is considered a good leaver, unvested awards will normally continue to vest in line with the applicable vesting dates, subject to performance conditions, the share plan rules, and malus and clawback provisions. In the event of death, unvested awards will vest and will be released to the executive Director’s estate as soon as practicable. In respect of outstanding unvested awards, the Committee may determine that good leaver status is contingent upon the Committee being satisfied that the executive has no current or future intention at the date of leaving HSBC of being employed by any competitor financial services firm. The Committee determines the list of competitor firms from time to time, and the length of time for which this restriction applies. If the Committee becomes aware of any evidence to the contrary before vesting, the award will lapse. Post-departure benefits Executive Directors can be provided certain benefits for up to a maximum of seven years from date of departure for those who depart under good leaver provisions under the HSBC Share Plan, in accordance with the terms of the policy. Benefits may include, but are not limited to, medical coverage, tax return preparation assistance and legal expenses. The Committee also has the discretion to extend the post-departure benefit of medical coverage to former executive Directors, up to a maximum of seven years from their date of departure. Other Where an executive Director has been relocated as part of their employment, the Committee retains the discretion to pay the repatriation costs. This may include, but is not restricted to, airfare, accommodation, shipment, storage, utilities, and any tax and social security that may be due in respect of such benefits. Except in the case of gross misconduct or resignation, an executive Director may also receive retirement gifts. Legal claims The Committee retains the discretion to make payments (including professional and outplacement fees) to mitigate against legal claims, subject to any such payments being made in accordance with the terms of an appropriate settlement agreement waiving all claims against the Group. Change of control In the event of a change of control, outstanding awards will be treated in line with the provisions set out in the respective plan rules. HSBC Holdings plc Annual Report on Form 20-F 327 Annual report on Directors’ remuneration This section sets out how our approved Directors’ remuneration policy was implemented during 2024. Single total figure of remuneration (Audited) The following table shows the single total figure of remuneration of each executive Director for 2024, together with comparative figures. Sir Noel Quinn retired as Group CEO and as an executive Director of the Board on 2 September 2024 and was succeeded by Georges Elhedery. The figures below reflect the remuneration paid in respect of time spent as executive Director during 2024. Single total figure of remuneration Sir Noel Quinn Georges Elhedery (£000) 2024 2023 2024 2023 Base salary 914 1,336 989 780 Fixed pay allowance (’FPA’) 1,138 1,700 1,288 1,085 Cash in lieu of pension 91 134 99 78 Taxable benefits 1 66 127 39 4 Non-taxable benefits 60 89 58 52 Total fixed 2,270 3,386 2,473 1,999 Annual incentive 2,3 1,540 2,018 1,677 1,287 Notional returns 4 56 43 8 6 Replacement award — — — — Long-term incentive 5,6 5,298 4,949 1,207 — Total variable 6,894 7,010 2,891 1,293 Total fixed and variable 9,164 10,396 5,364 3,292 1 Taxable benefits include the provision of medical insurance, car benefit, accommodation and tax return assistance (including any associated tax due, where applicable). Non-taxable benefits include the provision of life assurance and other insurance cover. 2 Sir Noel Quinn was not eligible to be considered for a 2025-2027 LTI award. To satisfy regulatory requirements, 40 % of the annual incentive award for Sir Noel Quinn is delivered immediately and 60 % is deferred. Both immediate and deferred portions of the award are split evenly between cash and shares. The shares portion of the award is subject to a retention period of one year and both the shares and the deferred cash portions of the award are subject to clawback provisions. 3 The annual incentive award for Georges Elhedery is awarded 50 % in cash and 50 % in shares. The shares portion of the award vests immediately at grant and is subject to a retention period of one year and clawback provisions. 4 Deferred cash awards granted in prior years include a right to receive notional returns for the period between the grant and vesting date. This is determined by reference to a rate of return specified at the time of grant and paid annually, with the amount disclosed on a paid basis. 5 LTI awards were made in February 2022 (in respect of 2021) at a share price of £ 5.380 for which the performance period ended on 31 December 2024. The value of the awards has been computed based on a share price of £ 7.184 , the average share price during the three-month period to 31 December 2024. The value attributable to share price appreciation for Sir Noel Quinn is £ 1,330,238 and for Georges Elhedery is £ 303,006 . The vesting LTI granted to Georges Elhedery was in respect of 2021 performance in his role as Co-CEO, GBM. See the following section for details of the performance assessment, which resulted in 75.00 % vesting. 6 The value of the 2021-2023 LTI for Sir Noel Quinn has been restated based on a share price of £ 5.899 to reflect the value of the award on 12 March 2024, when the first tranche of the award vested. In 2023, the value was based on the average share price during the three-month period to 31 December 2023 of £ 6.192 . Benefits The values of the significant benefits in the single total figure table are set out in the following table. The accommodation benefits in Hong Kong and the car benefits for Georges Elhedery are not included in the table below as they were not deemed significant. Sir Noel Quinn Georges Elhedery (£000) 2024 2023 2024 2023 Group income protection (non-taxable) 57 84 49 49 Accommodation in Hong Kong (taxable) 18 67 — — Car and driver in UK and Hong Kong (taxable) 15 47 — — Determining executive Directors’ incentive outcomes (Audited) Both executive Directors met the minimum standard of conduct and behaviour for an annual incentive award to be made. The award is determined by applying the outcome of their annual scorecard to the maximum opportunity, set at 215 % of base salary. Sir Noel Quinn has been assessed on full-year performance against the Group CEO annual scorecard with his pay outcome pro-rated for time in role up to and including 1 September 2024. Georges Elhedery has been assessed on full-year performance against both the Group CEO and Group CFO scorecards with his pay outcome pro-rated based on the time spent and salary received in each role. The financial measures, weightings and targets were set at the start of the year to align with our reported financial performance, excluding notable items, to ensure that out-turns were not impacted by one- offs. In setting the targets, the Committee considered the 2024 financial plan, 2023 performance, external commitments, scenario testing of upside and downside risks in the plan, and analyst consensus where available. Diversity representation target ranges were set based on a trajectory to meet our external commitments. Other strategic m easures were set based on maintaining or improving when compared with 2023 performance and/or market benchmarks. In assessing performance, the Committee considered, and made no adjustment for, the impact of interest rates, re-confirming that variations in the macroeconomic environment and their impact on business outcomes remain for our executives to manage. The Committee considered carefully the wider context in which performance was delivered in 2024 and judged that the overall scorecard outcome for both Sir Noel Quinn and Georges Elhedery was appropriate against the targets set at the start of the year for financial, strategic and personal measures. Taking into account inputs from the Group Risk Committee, the Committee concluded that the risk and compliance modifier should not be applied for 2024 based on the Group’s performance against key risk metrics for either Sir Noel Quinn or Georges Elhedery. 328 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Annual incentive scorecard assessment (Audited) Summary assessment Minimum (25% payout) Maximum (100% payout) Performance Weighting (%) Assessment (%) Sir Noel Quinn Outcome (%) Georges Elhedery Outcome (%) Profit before tax ($bn) 1 27.1 33.5 34.1 15.0 100.00 15.00 15.00 Target basis operating expenses ($bn) 1 32.9 32.3 32.6 15.0 60.09 9.01 9.01 Group RoTE 1,2 13.5 % 16.5 % 16.0 % 25.0 87.50 21.88 21.88 Asia RoTE 1,2 15.1 % 18.1 % 18.2 % 5.0 100.00 5.00 5.00 Customer satisfaction See following tables for commentary 15.0 75.00 11.25 11.25 Employee experience 10.0 70.00 7.00 7.00 Wider society 5.0 50.00 2.50 2.50 Personal measures 10.0 6.17 7.15 Total 100.0 77.81 78.79 Scorecard outcome (000) £ 1,540 £ 1,677 Risk adjustment (000) £ — £ — Annual incentive (000) £ 1,540 £ 1,677 1 Excluding notable items. 2 The CET1 capital ratio of 14.9 % exceeded the tolerance level in the risk appetite statement as required by the underpin. Strategic measures for both executive Directors Measures Weighting Performance achievement Assessment Outcome Customer satisfaction Maintain and improve NPS in the UK and Hong Kong, and in key growth markets 15.0 % – The Committee assessed performance against a scorecard of quantitative targets set at the start of the year, and using NPS data from external providers. – In Hong Kong we met our NPS targets, and are ranked in first place in both CMB and WPB. – In HSBC UK, WPB saw a modest improvement in rank by two positions to joint 11th. In CMB, as measured by the Savanta MarketVue Business Banking Survey, our Mid-Market Enterprise (’MME’) segment has improved its rank to 2nd position at FY24 (FY23: 3rd). Our Large Corporate sector was ranked 3rd for NPS in the 2024 Coalition Greenwich UK Commercial Study. – For other key growth markets, in WPB we improved rank in Singapore, but saw a decline in India and rank remained stable in Mexico and China. In CMB, Singapore and India rankings are in the Top 3. – GBM has seen an improvement globally rising from 3rd to 2nd place. – Overall, the Committee assessed that the NPS targets were met. 75.00 % 11.25 % Employee experience Improve diversity and inclusion 10.0 % – Senior leadership representation for women increased by 0.5 percentage points year-on-year to 34.6 % , exceeding the target set. – Senior leadership colleagues with Asian heritage increased by 1.5 percentage points year-on-year to 39.3 % , exceeding target. – The percentage of Black heritage colleagues in senior leadership roles remained flat at 3.0 % , which was above the minimum set, but behind target. – The Inclusion index in our employee Snapshot survey remained flat at 78 % , above minimum, but behind target. 70.00 % 7.00 % Wider society Execution of sustainability commitments 5.0 % – Whilst the Sustainability Execution Programme (’SEP’) is on track with mitigating actions in place for known risks, the Committee assessment considered that the pace of progress could have been accelerated with greater management focus. – The absolute financed emissions for oil & gas and thermal coal mining exceeded the 2024 goal on the trajectory towards our 2030 reduction target. 50.00 % 2.50 % Personal measures for the Group CEO and the Group CFO Personal measures were set at the start of the year and measured by the Committee against agreed targets and key performance indicators. Group CEO Weighting Assessment Performance achievement Technology transformation 4.67 % 75.00 % – Progress was made on our technology strategy through mobilisation of 83 % value streams with clear accountability across technology and business leads. – Future State Architecture (’FSA’), which defines the technology roadmap, was agreed for four areas (Wholesale Credit & Lending, GPB & Wealth, Global FX and Wholesale Client Services Onboarding and Know Your Customer) with 97 % of FSAs approved providing a better end-state view of our strategic application estate. Driving data quality remediation 2.33 % 50.00 % – The Committee’s assessment balanced strong progress against the targets set at the start of the year, while noting that data risk is one of the three principal risk areas to have a material impact on the Group in 2024, and taking into consideration regulatory feedback. Simplification of processes and organisation 3.0 % 50.00 % – In 2024, we completed the sales of our retail banking operations in France, and businesses in Canada, Argentina, Russia and Armenia. We announced divestments in our private banking business in Germany and our business in South Africa, and announced the planned sale of our France life insurance business. We acquired SilkRoad Property Partners Group in Singapore and Citi’s retail wealth management portfolio in mainland China. In October 2024, we announced a simplified organisational structure. Total 6.17 % out of 10.00 % HSBC Holdings plc Annual Report on Form 20-F 329 Personal measures for the Group CEO and the Group CFO (continued) Group CFO Weighting Assessment Performance achievement Deliver activities relating to regulatory priorities 5.0 % 75.00 % – The Committee’s assessment considered improved regulatory feedback on recovery and resolution planning activity, and measurement and management of IRRBB risk. – The Integrity of Regulatory Reporting programme continues to remediate against known gaps to deliver improvements in the quality of regulatory returns, partially meeting the targets set at the start of the year. – The regulatory excellence programme achieved efficiencies and outcomes broadly in line with the targets and milestones set, and the Finance on The Cloud programme successfully closed in April 2024. Enhanced disclosures and controls 2.5 % 67.86 % – Implemented enhanced disclosures covering banking NII, structural hedge and multi-jurisdictional revenue. – Progress against external disclosure commitments for scope 3 emissions of Pillar 3 sections and coal exposures and delivery of other ESG regulatory deliverables including climate risk stress testing and regulatory reporting. Drive liquidity and capital management across the Group 2.5 % 87.50 % – Strong capital and liquidity positions with no breaches in risk appetite, meeting the targets set. Total 7.63 % out of 10.00 % Long-term incentive (’LTI’) awards LTI awards over 2022 to 2024 performance period (Audited) Sir Noel Quinn, Georges Elhedery and Ewen Stevenson were each granted a 2022–2024 LTI award in February 2022. In line with the terms of his departure, Ewen Stevenson is a good leaver and his award has been pro-rated for time in employment. The scorecard delivered an outcome of 75.00 % , reflecting strong shareholder returns across the performance period. Based on the performance outcome, 737,504 shares will vest for Sir Noel Quinn, 167,991 shares will vest for Georges Elhedery and 191,224 shares will vest for Ewen Stevenson. The awards will vest in five equal annual instalments commencing in March 2025. The Committee determined that there were no windfall gains to consider for this award given the share price at grant ( £ 5.38 ) was above the share price at the previous LTI grant ( £ 4.26 ). The 2022–2024 LTI award is subject to a risk and compliance modifier. The Committee received input from the GRC who assessed that the performance targets were delivered with appropriate risk management. On this basis, the Committee considered that no adjustment for risk should be made. Assessment of the 2022–2024 LTI awards Measures (weighting) 1 Minimum (25% payout) Target (50% payout) Maximum (100% payout) Actual Assessment Outcome RoTE with CET1 capital ratio underpin 2 ( 25 % ) 8.0 % 9.5 % 11.0 % 14.6 % 100.0 % 25.00 % Capital reallocation to Asia with CET1 capital ratio underpin 3 ( 25 % ) 46.0 % 48.0 % 50.0 % 43.7 % 0.0 % 0.00 % Transition to net zero 4 ( 25 % ) Carbon reduction (own emissions) 52.0 % 56.0 % 60.0 % 66.1 % 100.0 % 12.50 % Sustainable finance and investment $ 285 bn $ 340 bn $ 370 bn $ 394 bn 100.0 % 12.50 % Relative TSR 5 ( 25 % ) At median of the peer group Straight-line vesting between minimum and maximum At upper quartile of the peer group Above upper quartile 100.0 % 25.00 % Total 75.00 % 1 Awards vest on a straight-line basis for performance between the minimum, target and maximum levels of performance set out in this table. 2 Assessed based on RoTE in the 2024 financial year. The CET1 capital ratio of 14.9 % exceeded the level required by the underpin. 3 Assessed based on share of Group tangible equity (on a constant currency basis and excluding associates) allocated to Asia by 31 December 2024. 4 Carbon reduction assessed on percentage reduction in total energy and travel emissions achieved by 31 December 2024 using 2019 as the baseline. Sustainable finance and investment assessed on cumulative financing provided over the performance period. 5 The peer group was: Bank of America, Barclays, BNP Paribas, Citigroup, DBS Group Holdings, Deutsche Bank, J.P. Morgan Chase & Co., Lloyds Banking Group, Morgan Stanley, Standard Chartered and UBS Group. Credit Suisse Group was removed following its acquisition by UBS Group in June 2023. 330 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report LTI awards over 2025 to 2027 performance period After taking into account performance for 2024, and subject to shareholder approval of the new policy, the Committee intends to grant Georges Elhedery an LTI award of £ 9,000,000 and Pam Kaur an LTI award of £ 5,250,000 (both 600 % of base salary). The awards will have a three -year performance period starting on 1 January 2025. Alongside reviewing the policy, the Committee has undertaken a comprehensive review of the performance measures used for our incentive arrangements to ensure alignment to the Group's priorities and balance delivery of financial and strategic performance. For the 2025-2027 LTI, we will retain Group RoTE, relative TSR and environment measures, reflecting our strategic commitments, and to assess relative performance compared with peers. We will increase the weighting of RoTE to 40 % , r eflecting that the delivery of a strong stable return on tangible equity is a core measure of the sustainable returns expected by our investors. Group RoTE will be assessed excluding notable items in the last year of assessment to mirror our outlook on RoTE which targets a mid-teens return in each of the three years from 2025 to 2027 excluding notable items. The RoTE measure is subject to a CET1 capital ratio underpin. If the CET1 capital ratio at the end of the performance period is below the CET1 risk tolerance level set in the risk appetite statement, then the assessment for this measure will be reduced to nil. We will increase the weighting of relative TSR to 40 % as it is a key measure of shareholder returns, a material relative measure used by our peers and in line with investor expectations. No changes have been made to our relative TSR peer group, which continues to include more Asian peers to better reflect our growth and investment focus following a review in 2023. Following feedback from our shareholders on the metrics used and recognising the increase in LTI opportunity, we have reduced the overall weighting of the environment measure from 25 % to 20 % to ensure a greater proportion of the LTI is aligned to value creation while supporting our ESG ambitions. The Committee completed a comprehensive review of the environment metrics in the LTI and discussed with major shareholders. At this stage, financed emission targets remain difficult to include given challenges in the methodology, timeliness and frequency of reporting. This was recognised by the investors we spoke to as part of our policy engagement. We therefore decided to retain metrics on carbon reduction in our own emissions and sustainable finance and investment, given we cannot currently use financed emissions, which is a material metric in supporting our ESG ambitions. The Committee will continue to keep the environment measures and weighting under review for future performance cycles. Performance targets have been set to balance stretch and achievability so that awards act as an effective incentive for management, and incentivise outperformance against our external strategic commitments. The proposed change in remuneration structure will be supported by target ranges calibrated to reflect the increase to the remuneration opportunity. It was recognised by investors in our engagement that our recent LTI targets have been set to deliver maximum payouts only for outperformance compared to consensus and our external strategic commitments. For 2025-2027 awards: – The maximum target for RoTE reflects stretch above plan and performance forecasts, taking into account the macroeconomic environment. The minimum target for RoTE is aligned to our external commitment of mid-teens RoTE over the medium term. – The minimum target for relative TSR is set ‘at the median of our peer group’, which ensures no payout for below median performance aligned to investor expectations. The maximum is set ‘at the upper quartile of our peer group’. – Our emissions reduction targets have been set based on meeting our forecasts relating to emissions reduction and purchase of renewable energy. – For the sustainable finance and investment measure, we have set performance targets to support our ambition announced in 2020 to provide $ 750 b n to $ 1 t n of financing and investment by 2030. We reflected on sustainable financing forecasts, market demand, and regulation, as well as higher LTI opportunity in setting the stretch in the target range. The LTI is subject to a risk and compliance modifier, which gives the Committee the discretion to ensure performance targets are delivered with appropriate risk management. Consistent with our approach since 2017, the number of shares to be awarded will be adjusted to reflect the expected dividend yield of the shares over the vesting period, as awards are not entitled to dividend equivalents in accordance with regulatory requirements. To the extent performance conditions are satisfied at the end of the three -year performance period, the awards will vest in five equal annual instalments commencing from around the third anniversary of the grant date. On vesting, shares equivalent to the net number of shares that have vested (after those sold to cover any income tax and social security payable) will be held for a retention period of up to one year, or such period as required by regulators. Performance conditions for the 2025–2027 LTI awards Measures (weighting) 1 Minimum (25% payout) Target (50% payout) Maximum (100% payout) RoTE (excluding notable items) with CET1 capital ratio underpin 2 ( 40 % ) 14.0 % 16.0 % 18.0 % Relative TSR 3 ( 40 % ) At the median of the peer group Straight-line vesting between minimum and maximum At the upper quartile of the peer group Environment 4 ( 20 % ) Carbon reduction (own emissions) 71.0 % 73.0 % 78.0 % Sustainable finance and investment $ 648.0 bn $ 720.0 bn $ 792.0 bn Subject to risk and compliance modifier The Group Remuneration Committee retains the discretion to revise down the formulaic outcome taking into account performance against risk and compliance factors during the performance period. 1 Awards will vest on a straight-line basis for performance between the minimum, target and maximum levels of performance set in this table. 2 To be assessed based on RoTE excluding notable items at the end of the performance period, subject to the CET1 capital ratio underpin. 3 The peer group for the 2024 award is: Bank of China (Hong Kong), Barclays, BNP Paribas, China Merchants Bank, Citigroup, DBS Group Holdings, J.P. Morgan Chase & Co., Lloyds Banking Group, OCBC Bank, Standard Chartered and UBS Group. 4 Carbon reduction will be measured based on percentage reduction in total energy and travel emissions achieved by 31 December 2027 using 2019 as the baseline. The sustainable finance and investment measure will assess the cumulative amount provided and facilitated over the performance period starting from 1 January 2020 and ending 31 December 2027. HSBC Holdings plc Annual Report on Form 20-F 331 Annual incentive measures for 2025 The 2025 annual incentive scorecard measures for our executive Directors have been set to incentivise the delivery of our strategy and its execution at pace. Following the Committee’s comprehensive review of the policy and its implementation, core measures of PBT, Group RoTE and costs have been retained, with each assessed excluding notable items so that the outcome reflects performance in the control of management. We have introduced a measure on fee income growth relative to balance sheet growth to incentivise growth with less reliance on capital. To simplify and retain financial measures at 60% of the scorecard (in order to meet regulatory expectations), we have reduced the weighting for PBT to 10% and removed the Asia RoTE measure to reduce overlap with Group RoTE. The Committee felt it appropriate to have financials weighted at 60% to balance alignment with shareholder performance and regulatory expectations, and in line with UK peers. Customer Net Promoter Score (’NPS’) has been retained to reflect our ambition to be a top-three bank for customer satisfaction and/or improve customer satisfaction rank . We have added a measure focused on delivery of benefits from the organisational change. Our people and culture measures support our strategy to have an inclusive culture of high performance. The Committee intends to assess this by considering our established inclusion index, the retention of high performers and other relevant indicators. We have removed the sustainability measure introduced in 2024 to reduce duplication with the environment measure in the LTI, which better reflects the time horizon of our sustainability commitments. Personal measures have been set to ensure meaningful weighting for the most critical goals for each executive Director. The Committee will continue to retain discretion to adjust the formulaic outcomes of scorecards, taking into account factors such as Group profits, wider business performance and stakeholder experience, to ensure executive reward is aligned with underlying Group performance and the broader stakeholder experience. The weightings and performance measures for the 2025 annual incentive scorecard for executive Directors are opposite. Performance targets have been set to reflect the Group’s 2025 plan, external commitments, scenario testing of upside and downside risks in the plan while considering macroeconomic uncertainty, including the interest rate environment and analyst consensus where available. The performance targets are commercially sensitive, and it would be detrimental to the Group’s interests to disclose them at the start of the financial year. However, as with the 2025-2027 LTI scorecard, the Committee is mindful that targets must remain suitably stretching to support the increased remuneration opportunity of the new policy. Subject to commercial sensitivity, we will disclose the targets in the 2025 Directors’ remuneration report. 2025 annual incentive performance measures Weighting Financial measures (all measures subject to CET1 capital ratio underpin) 60.0% Group RoTE (excluding notable items) 25.0% Profit before tax (excluding notable items) 10.0% Fee income growth relative to balance sheet growth 10.0% Target basis operating expenses (excluding notable items) 15.0% Strategic measures 30.0% Customer satisfaction: Improvement in NPS scores/rank 15.0% Deliver benefits of announced organisational changes 8.0% People and culture: Inclusion and retention of high performers 7.0% Personal measures – Group CEO: Deliver enterprise-wide foundational priorities including regulatory excellence, wealth acceleration and strategic investments, and the Group's technology strategy. – Group CFO: Deliver activities relating to regulatory excellence priorities, Group Sustainability priorities, and robust liquidity and capital management. 10.0% Subject to risk and compliance modifier The Group Remuneration Committee retains the discretion to revise down the formulaic outcome taking into account performance against risk and compliance factors during the performance period. 332 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Our approach to workforce reward Our goal is to deliver a unique and exceptional experience to energise colleagues to perform at their best. This is critical to strengthening our ability to attract, retain and motivate the people we need in competitive markets where employee expectations continue to evolve. Our workforce reward principles and commitments guide our approach and support our focus on being a great place to work. – We will reward our colleagues responsibly through fixed pay security and protection through core benefits, a competitive total compensation opportunity, pay equity, and a more inclusive and sustainable benefits proposition over time. – We will recognise colleagues' success through our performance routines, including feedback and recognition, pay for performance, and all employee share ownership opportunities. – We will support our colleagues to grow through our proposition beyond pay, with a focus on future skills and development, support for well-being, and flexibility. In 2024, we made several changes to improve colleague experience and unlock our performance edge: – We introduced new performance routines to over 200,000 colleagues in 58 markets, so colleagues know what is expected of them, how they are doing and how they can improve. This is achieved by discussing performance more frequently through the year, regularly exchanging feedback and simplifying year-end performance assessment to focus less on ratings and more on a dialogue between managers and colleagues. – We introduced 'Target Variable Pay' to over 150,000 colleagues in 46 markets, helping improve clarity and transparency on how we make pay decisions and the impact of Group, business and individual performance on variable pay. – We continued to improve our wellbeing offering by enhancing country Employee Assistance Programmes, increasing the number of mental health champions to expand the network's global reach, developing new financial wellbeing support and running global activity challenges to improve employees' physical wellbeing. The Committee tracks various metrics to assess how we are doing and prioritise action plans. Our approach overall is working and has positively contributed to employee engagement, which has risen to a record high of 80% i n our employee Snapshot survey. Additional metrics highlighting some of our areas of focus in 2024 are outlined below. Our approach to workforce reward forms part of our broader employee value proposition and helps us retain and engage the leaders and people we need to execute our strategy. We will continue to track and measure progress against key metrics at a Group, global business and market level and use these insights to inform what improvements we can make. In 2025, we will continue to embed our performance and pay changes, protect well-being and flexibility, and reinvest in colleagues' skills development. We will reward you responsibly Living wage Fixed pay Pay fairness Global living wage employer 3.6% (2023: 4.4% ) 5 percentage points p Following our accreditation as a global living wage employer in 2024, we have continued to work with the Fair Wage Network which provides an independent source of wage levels. HSBC has achieved accreditation as a global living wage employer in 2025 and will continue to review all wages against local living wage benchmarks. increase to fixed pay for 2025, targeted at colleagues that need it most, such as those in high inflation markets. increase in the number of colleagues who say they are paid fairly for what they do, compared with the 2021 year-end pay review. We will recognise your success Feedback Recognition 81% (2023: 81% ) 42% p 1.5 m (2023: 1.4 m) p of colleagues say they receive feedback to help them improve performance. average monthly increase in colleagues receiving feedback compared to 2023. recognitions by employees of their peers for demonstrating role model behaviours that are linked to our values, up 7% on 2023. We will support you to grow Mental health Financial wellbeing Career # 1 (2023: # 1 ) 65% (2023: 60% ) p 71% (2023: 71% ) in the Global CCLA Corporate Mental Health Benchmark for the third year running. of colleagues say they know where to find financial wellbeing support, an increase of five percentage points compared to 2023. Our Career Index is six percentage points higher than the financial services benchmark. HSBC Holdings plc Annual Report on Form 20-F 333 Committee governance The Group Chairman, Chair of the Group Risk Committee, Group CEO, Group Chief Risk and Compliance Officer, Group Chief People and Governance Officer, Group Chief Legal Officer, Global Head of Remuneration Governance and Regulatory Accountabilities (Committee Secretary), and Group Head of Performance and Reward routinely and selectively attend Committee meetings. No Director is present at Committee meetings when their own remuneration is discussed. The Chair regularly engaged with the Committee’s key stakeholders, including senior management, independent advisors, investors, proxy advisors and regulators to listen to numerous perspectives to help inform the broader decision-making of the Committee. A copy of the Committee’s terms of reference can be found on our website at www.hsbc.com/who-we-are/our-people/board-of-directors/ board-committees and further information on stakeholder engagement for setting the remuneration policy is set out from page 315 . The Committee Secretary regularly met with the Chair to ensure the Committee fulfilled its governance responsibilities, to consider input from stakeholders when finalising meeting agendas and track progress on actions and priorities. A summary of coverage is set out in the ’Matters considered during 2024’ table below. Matters considered during 2024 Feb 1 Feb 1 Jun 2 Jun Jul Sep 2 Sep Oct 2 Dec Remuneration framework and governance Group variable pay, workforce performance and pay matters and insights u u u u u u u u u Directors’ remuneration policy design u u u u u u u u u Executive Director remuneration policy implementation, scorecards and pay proposals u u u u u u u u u Remuneration for other senior executives of the Group u u u u u u u u u Directors’ remuneration report u u u u u u u u u Regulatory, risk and governance Material risk and audit events, and performance and remuneration impacts for individuals involved u u u u u u u u u Regulatory updates, including identification of Material Risk Takers u u u u u u u u u Governance matters u u u u u u u u u Matters from principal subsidiary committees u u u u u u u u u u Matter considered u Matter not considered 1    There were two meetings held during February. 2    The June, September and October meetings were ad hoc with reduced agenda. How the Committee discharged its responsibilities Activities outside formal meetings In addition to its regular schedule, the Committee convened three ad hoc meetings to facilitate oversight of key topics under its remit in support of strategic priorities and initiatives during 2024. The Committee keeps abreast of regulatory and investor developments and periodically undertakes training to explore key topics in more detail. A comprehensive induction session was held with Kalpana Morparia in October 2024 to introduce her to the work of the Committee. Connectivity with principal subsidiary remuneration committees The Chair hosted the biannual Remuneration Committee Chairs Forum in October and November 2024, bringing together Committee members and Chairs of the principal subsidiary remuneration committees. The forum provided the opportunity for members to discuss key priorities and challenges in relation to people, performance and pay matters across the Group. The focus in October was progress on Committee priorities for the year including the development of a new executive Director policy, progress on delivering the employee value proposition commitments and to receive regional feedback on key considerations for the 2024 pay review. In November, the forum focused on the preliminary Group variable pay for 2024, and allocation by business, function and region and the 2025 fixed pay budgets. The Committee received certifications from the principal subsidiary remuneration committees, confirming that the relevant committee had discharged its obligations overseeing the implementation and operation of HSBC’s Group Remuneration Framework and escalated all relevant concerns to the Committee. A regular report is presented to the Committee highlighting significant remuneration matters from the Group’s subsidiaries. Collaborative oversight by the GRC, GAC and GTOC The Committee worked closely with, and received feedback and input from, the GRC and GAC on the alignment of remuneration with risk appetite, conduct and compliance-related matters, including risk adjustment considerations for Group variable pay and the application of the risk modifier in respect of senior employees. The Chair met with the Chair of the GRC, GAC and GTOC to consider the Group’s risk and reward alignment framework, which is designed to promote sound and effective risk management in meeting PRA and FCA remuneration rules and expectations. During the year, the Chair of the Committee hosted a joint session with the GRC and GTOC to consider improvements to the risk and reward framework, more details of which can be found on page 335 . 334 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Advisers The Committee received input and advice from different advisers on specific topics during 2024. Deloitte was retained as independent advisor to the Committee in 2024 having been reappointed in 2022 following a formal tender process. Deloitte also provided tax compliance and other advisory services to the Group in 2024. Deloitte is a founding member of the Remuneration Consultants Group and voluntarily operates under the code of conduct in relation to executive remuneration consulting in the UK. The Committee also received advice from Willis Towers Watson on market data and remuneration trends. Willis Towers Watson also provides actuarial support to Global Finance, benchmarking data for the wider workforce and services related to benefits administration for our Group employees. The Committee was satisfied the advice provided by Deloitte and Willis Towers Watson was objective and independent in 2024. For 2024, total fees of £275,150 and £68,971 were incurred in relation to remuneration advice provided by Deloitte and Willis Towers Watson, respectively. This was based on pre-agreed fees and a time- and-materials basis. Committee performance review In 2024, the annual review of the performance of the Board committees, including the Committee, was conducted externally by IBE. On the basis of the review, the directors concluded that the Committee continued to operate effectively. Positive feedback was noted on the leadership of the Committee Chair and membership of the Committee, which was considered to have practical overlap of members with other Board committees, and an appropriate flow of information between Committee Chairs. The review highlighted the importance of both continuing to consider performance and pay for the wider workforce, and taking the opportunity to take a fresh look at the performance and pay approach in the context of changes to the employee value proposition. The outcomes of the evaluation have been reported to the Board, and the Committee will track the progress in implementing recommendations during 2025. Further details of the annual review of the Board and Committee effectiveness can be found on page 287 . HSBC Holdings plc Annual Report on Form 20-F 335 Additional remuneration disclosures This section provides further information in relation to executive Director and wider workforce remuneration as required by the UK, Hong Kong, and Pillar 3 remuneration disclosure requirements. For the purpose of the Pillar 3 remuneration disclosures, executive Directors and non- executive Directors are considered to be members of the management body. Members of the Group Executive Committee other than the executive Directors are considered as senior management. Link between risk, performance and reward Our remuneration practices promote sound and effective risk management to support our business objectives and the delivery of our strategy. We set out below the key features of our framework, which enable us to align between risk, performance and reward, subject to compliance with local laws and regulations: Framework elements Application Variable pay – Group variable pay is expected to reflect Group performance, based on a range of financial and non-financial factors. We use a structured payout ratio range, that varies the payout ratio with profits before tax, and a countercyclical funding methodology, with both a floor and a ceiling, with the payout ratio generally reducing as performance increases to avoid pro-cyclicality. The floor recognises that even in challenging times, remaining competitive is important. The ceiling recognises that at higher levels of performance it is not always necessary to continue to increase variable pay, thereby limiting the risk of inappropriate behaviour to drive financial performance. – The main quantitative and qualitative performance and risk metrics used for assessment of performance include: – Group and business unit financial performance, considering contextual factors driving performance, and capital requirements; – current and future risks, taking into consideration performance against the risk appetite, financial resourcing plan and global conduct outcomes; and – fines, penalties and provisions for customer redress, which are automatically included in the Committee’s definition of profit for determining the pool. – In the event that the Group was unable to distribute dividends to shareholders for reasons such as capital adequacy, then the Group may determine that as a year of weak performance. In such a year, the Group may withhold some, or all, variable pay for employees including unvested share awards, using the metrics outlined above as a basis for that determination. Individual performance – Assessment of individual performance is made with reference to clear and relevant financial and non-financial goals. Goals for senior management take into account appropriate measures linked to sustainability risks, such as: reduction in carbon footprint; facilitating financing to help clients with their transition to net zero; employee inclusion; and risk and compliance measures, subject to local legal requirements. – A mandatory global risk and compliance goal is included for all other employees. Subject to any legal/regulatory requirements, all employees receive an overall performance assessment supported by an assessment against the minimum values-aligned behaviours and conduct standards expected of all colleagues and performance on their goals. This ensures that performance is assessed not only on what is achieved but also on how it is achieved. Control function staff – Group policy is for control functions staff to report into their respective function. Remuneration decisions for senior functional roles are made by the global function head. – The performance and reward of individuals in control functions, including risk and compliance colleagues, are assessed according to a balanced scorecard of goals specific to the functional role they undertake. – Their remuneration is determined independent of the performance of the business areas they oversee. – Remuneration is carefully benchmarked with the market and internally to ensure it is set at an appropriate level. – The Committee is responsible for approving remuneration for the Group Chief Risk and Compliance Officer and Group Head of Internal Audit. Variable pay adjustments and conduct recognition – Variable pay awards may be adjusted upwards or downwards to reflect positive or negative conduct in adherence with the Code of Conduct. Downward adjustments can be made in circumstances including: – detrimental conduct, including conduct that brings HSBC into disrepute; – involvement in events resulting in significant operational losses, or events that have caused or have the potential to cause significant harm to HSBC; and – non-compliance with the values-aligned behaviours and other mandatory requirements or policies. – Rewarding positive conduct can be through use of our global recognition platform, At Our Best, or positive adjustments to variable pay awards. Malus – Malus can be applied to unvested deferred awards (up to 100% of awards) granted in prior years in circumstances including: – detrimental conduct, including conduct that brings the business into disrepute; – past performance being materially worse than originally reported; – restatement, correction or amendment of any financial statements; and – improper or inadequate risk management. Clawback – Clawback can be applied to vested or paid awards granted to MRTs on or after 1 January 2015 (and awards granted to non-MRTs on or after 1 January 2022) for a period of seven years, extended to 10 years for employees in PRA and FCA designated senior management functions in the event of ongoing internal/regulatory investigation at the end of the seven-year period. Clawback may be applied in circumstances including: – participation in, or responsibility for, conduct that results in significant losses; – failing to meet appropriate standards and propriety; – reasonable evidence of misconduct or material error that would justify, or would have justified, summary termination of a contract of employment; and – a material failure of risk management suffered by HSBC or a business unit in the context of Group risk-management standards, policies and procedures. – Clawback can also be applied to vested or paid awards granted to designated Executive Officers as defined by the US Securities and Exchange Commission (’SEC’) for a period of three years in the event of an accounting restatement due to material non-compliance with any financial reporting requirement under the US securities laws. Sales incentives – We generally do not operate commission-based sales plans, unless aligned with local market practice and with appropriate safeguards to avoid incentivising inappropriate sales behaviours. Identification of MRTs – We identify individuals as MRTs based on qualitative and quantitative criteria set out in the PRA’s and FCA’s remuneration rules. Our identification process is underpinned by the following key principles: – MRTs are identified at Group, HSBC Bank (consolidated) and HSBC UK Bank level. – MRTs are also identified at other solo regulated entity level as required by the regulations. – When identifying an MRT, HSBC considers a colleague’s role within its matrix management structure. The global business and function that an individual works within takes precedence, followed by the geographical location in which they work. – We also identify additional MRTs based on our own internal criteria, which include compensation thresholds and individuals in certain roles and grades who otherwise would not be identified as MRTs under the remuneration rules. 336 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Summary of shareholder return and Group CEO remuneration The graph shows HSBC TSR performance (based on the daily spot Return Index in sterling) against the FTSE 100 Total Return Index for the 10-year period ended 31 December 2024. The FTSE 100 Total Return Index has been chosen as a recognised broad equity market index of which HSBC Holdings is a member. The single total figure remuneration for the Group CEO over the past 10 years, together with the outcomes of the respective annual incentive and LTI awards, are presented in the following table. HSBC TSR and FTSE 100 Total Return Index 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Group CEO Stuart Gulliver Stuart Gulliver Stuart Gulliver Stuart Gulliver John Flint John Flint Sir Noel Quinn Sir Noel Quinn Sir Noel Quinn Sir Noel Quinn Sir Noel Quinn Sir Noel Quinn 1,2 Georges Elhedery 2,3 Single total figure £000 4 7,340 5,675 6,086 2,387 4,582 2,922 1,977 4,154 4,895 5,562 10,396 9,164 1,867 Annual incentive 5 (% of maximum) 45% 64% 80% 76% 76% 61% 66% 32% 57% 75% 70% 78% 78% Long-term incentive 5,6,7 (% of maximum) 41% –% –% 100% –% –% –% –% –% –% 75% 75% —% 1 Sir Noel Quinn’s 2024 single total figure reflects his single total figure of remuneration and includes his total fixed pay, benefits and annual incentive up to and including 1 September 2024 when he stepped down as Group CEO, plus his vesting 2022-2024 LTI. 2 The 2024 annual incentive figures for Sir Noel Quinn and Georges Elhedery reflect their assessment against the Group CEO scorecard for their periods as Group CEO. 3 Georges Elhedery’s total single figure reflects his total fixed pay, annual incentive and benefits in respect of his period as Group CEO (for the period 2 September 2024 to 31 December 2024). Georges Elhedery’s vesting 2022-2024 LTI was granted before his appointment as Group CEO and has been excluded. 4 Sir Noel Quinn’s 2023 single total figure has been restated to reflect the value of the 2021-2023 LTI on 12 March 2024, when the first tranche of the award vested. 5 The 2012 annual incentive figure for Stuart Gulliver included 60% of the annual incentive disclosed in the 2012 Directors’ remuneration report, which was deferred for five years and subject to service conditions and satisfactory completion of the five-year deferred prosecution agreement with the US Department of Justice, entered into in December 2012 (’AML DPA’) as determined by the Committee. The AML DPA performance condition was met and the award vested in 2018. The value of the award at vesting was in the 2018 single total figure of remuneration and included as long-term incentive for 2018. 6 Long-term incentive awards are included in the single total figure of remuneration for the year in which the performance period is deemed to be substantially completed. For Group Performance Share Plan (’GPSP’) awards, this is the end of the financial year preceding the date of grant. The GPSP award shown in 2015 therefore relates to the award granted in 2016. 7 The GPSP was replaced by the LTI in 2016 and the value for GPSP is nil for 2016 as no GPSP award was made. LTI awards have a three-year performance period and the first LTI award was made in February 2017. The value of the LTI awards expected to vest will be included in the total single total figure of remuneration of the year in which the performance period ends. Voting results from Annual General Meeting 2024 Annual General Meeting voting results For Against Withheld Remuneration report (votes cast) 97.36% 2.64% –– 9,581,517,143 259,382,421 7,973,872 Remuneration Committee discretion to set appropriate variable to fixed pay ratio(s) for Material Risk Takers (votes cast) 99.31% 0.69% 9,760,585,369 67,898,883 20,437,945 Remuneration policy (votes cast from 2022 Annual General Meeting) 95.73% 4.27% –– 7,666,488,029 342,320,697 7,773,468 HSBC Holdings plc Annual Report on Form 20-F 337 Pay ratio The following table shows the ratio between the total pay of the Group CEO and the lower quartile, median and upper quartile pay of our UK employees. Total pay and benefits for the Group CEO reflects the total fixed pay, annual incentive and benefits for Sir Noel Quinn up to and including 1 September 2024 and for Georges Elhedery from 2 September 2024, plus the value of Sir Noel Quinn’s vesting 2022-2024 long-term incentive (’LTI’), which was awarded in respect of his performance as Group CEO in 2021. The median ratio is stable year on year, reflecting that a LTI has vested in each of the last two years with a similar scorecard outcome. Total pay ratio Method Lower quartile Median Upper quartile 2024 A 283:1 165:1 87:1 2023 1 A 285:1 165:1 86:1 2022 A 167:1 95:1 49:1 2021 A 154:1 90:1 46:1 2020 A 139:1 85:1 43:1 2019 A 169:1 105:1 52:1 Total pay and benefits amounts used to calculate the ratio (£) Method Lower quartile Median Upper quartile Total pay and benefits Total salary Total pay and benefits Total salary Total pay and benefits Total salary 2024 A 38,995 31,962 66,772 53,945 127,050 91,664 2023 A 36,528 27,680 63,000 45,536 121,223 89,506 2022 A 33,284 24,615 58,257 41,000 113,778 95,000 2021 A 31,727 27,666 54,678 41,500 106,951 84,000 2020 A 29,833 23,264 48,703 36,972 96,386 75,000 2019 A 28,920 24,235 46,593 41,905 93,365 72,840 1 The 2023 pay ratios have been restated to reflect the revised 2023 single total figure of remuneration for Sir Noel Quinn. The total pay and benefits for the median employee for 2024 was £66,772 , a 6.0% increase compared with 2023. Our UK workforce comprises a diverse mix of colleagues across different businesses and levels of seniority, from junior cashiers in our retail branches to senior executives managing our global business units. We aim to deliver market-competitive pay for each role, taking into consideration the skills and experience required for the business. Pay structure varies across roles in order to deliver an appropriate mix of fixed and variable pay. Junior colleagues have a greater portion of their pay delivered in a fixed component, which does not vary with performance and allows them to predictably meet their day-to-day needs. Our senior management, including executive Directors, generally have a higher portion of their total remuneration opportunity structured as variable pay and linked to the performance of the Group, given their role and ability to influence the strategy and performance of the Group. Executive Directors also have a higher proportion of their variable pay delivered in shares, which vest over a period of seven years with a post- vesting retention period of one year. During this deferral and retention period, the awards are linked to the share price so the value of award realised by them after the vesting and retention period will be aligned to the performance of the Group. We are satisfied that the median pay ratio is consistent with the pay and progression policies for our UK workforce, taking into account the diverse mix of our UK employees, the pay mix applicable to each role and our objective of delivering market competitive pay for each role subject to Group, business and individual performance. Our ratios have been calculated using the option ‘A’ methodology prescribed under the UK Companies (Miscellaneous Reporting) Regulations 2018. Under this option, the ratios are calculated using full- time equivalent pay and benefits of all employees providing services in the UK at 31 December 2024. We believe this approach provides accurate information and representation of the ratios. The ratio has been computed taking into account the pay and benefits of over 34,000 UK employees, other than the Group CEOs. We calculated our pay quartiles and benefits information for our UK employees using: – full-time equivalent annualised fixed pay, which includes base salary and allowances, at 31 December 2024; – variable pay awards for 2024; – return on deferred cash awards granted in prior years. The deferred cash portion of the annual incentive granted in prior years includes a right to receive notional returns for the period between the grant date and vesting date, which is determined by reference to a rate of return specified at the time of grant. A payment of notional return is made annually and the amount is disclosed on a paid basis in the year in which the payment is made; – gains realised from exercising awards from taxable employee share plans; and – full-time equivalent value of taxable benefits and pension contributions. Full-time equivalent fixed pay and benefits for each employee have been calculated by using each employee’s data as at 31 December 2024. Where an employee works part-time, fixed pay and benefits are grossed up, where appropriate, to full-time equivalent. One-off benefits have not been included in calculating the ratios as these are not permanent in nature and in some cases, depending on individual circumstances, may not truly reflect a benefit to the employee. The reported ratios may not be comparable to our international and listed peers on the FTSE 100, given differences in business mix and size, employment and compensation practices, methodologies for computing pay ratios and assumptions used by companies. Relative importance of spend on pay The following chart shows the change in: – total employee pay between 2023 and 2024; and – dividends and share buy-backs in respect of 2023 and 2024. In 2024, total spend on pay was stable compared with 2023. The total return to shareholders increased by 43% compared with 2023. This included the special dividend of $0.21 per share that was paid in June following the completion of the sale of our banking business in Canada, as well as $11bn of capital return to shareholders through share buy- backs, which included the up to $2bn buy-back announced at our 2023 annual results in February 2024. In addition, the Group has announced the intention to initiate a further buy-back of up to $2bn. Dividends include an approximation of the amount payable in April 2025 in relation to the fourth interim dividend of $ 0.36 per ordinary share. Relative importance of spend on pay Total return to shareholder 2024 ▲ 43% 2023 Employee pay 2024 ▲ 1% 2023 $15.9bn $11.0bn $11.8bn $7.0bn 338 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Comparison of Directors’ and employees’ pay The following table compares the changes in each Director’s base salary, taxable benefits and annual incentive between 2020 and 2024 with the percentage change in each of those elements of pay for UK- based employees of HSBC Group Management Services Limited, the employing entity of the executive Directors. The non-executive Director fees were increased in 2024. The year-on- year percentage change in fees noted in the table below is primarily driven by any pro-rated fees received by the non-executive Director based on time served by them on the Board and the relevant Board committees and any additional responsibilities taken on by the non- executive Director during each year. The value of benefits received by the non-executive Directors reflect the taxable expense reimbursements claimed, and the associated gross-up tax, in relation to attending the Board meetings in each year. Page 344 provides the underlying single total figure of remuneration for non-executive Directors used to calculate these figures. Annual percentage change in remuneration Base salary/fees Benefits Annual incentive Director/employees 2024 2023 2022 2021 2020 2024 2023 2022 2021 2020 2024 2023 2022 2021 2020 Executive Directors Sir Noel Quinn 1,2,3 (31.6) 0.5 3.2 1.7 151.7 (47.8) 6.7 25.3 (48.9) 353.7 (23.7) (6.7) 36.1 99.0 20.2 Georges Elhedery 4 26.7 — — — — 866.0 — — — — 30.3 — — — — Non-executive Directors Geraldine Buckingham 5 10.7 57.4 — — — (40.0) — — — — — — — — — Rachel Duan 6,7 4.5 8.4 235.8 — — — (100.0) — — — — — — — — Dame Carolyn Fairbairn 7,8 4.7 5.3 231.1 — — — (100.0) — — — — — — — — James Forese 9 5.5 10.2 20.5 257.5 — 300.0 — — — — — — — — — Ann Godbehere 10 472.1 — — — — — — — — — — — — — — Steven Guggenheimer 11 (1.9) 0.8 4.8 86.6 — 300.0 (90.0) — — — — — — — — José Antonio Meade Kuribreña 12 3.7 0.8 8.5 10.4 28.7 75.0 (71.4) — (100.0) 100.0 — — — — — Kalpana Morparia 13 45.9 — — — — — — — — — — — — — — Eileen Murray 14,15 14.1 10.7 (1.5) 121.7 — (100.0) — — — — — — — — — Brendan Nelson 16 306.2 — — — — 216.7 — — — — — — — — — David Nish 17 (66.8) 0.4 (1.0) 0.4 108.7 57.9 (13.6) 120.0 25.0 (50.0) — — — — — Swee Lian Teo 18 402.0 — — — — — — — — — — — — — — Sir Mark Tucker — — — — — 184.3 (54.9) 242.4 (36.5) (77.5) — — — — — Employee group 19 3.3 5.0 3.1 1.0 2.0 4.1 5.7 7.0 1.3 2.3 2.4 11.7 3.7 25.2 (20.0) 1 Sir Noel Quinn succeeded John Flint as interim Group CEO with effect from 5 August 2019 and was appointed permanently into the role on 17 March 2020. The annual percentage change in 2020 for Sir Noel Quinn is based on remuneration reported in his 2019 single total figure of remuneration (for the period 5 August 2019 to 31 December 2019) and his 2020 single total figure of remuneration (for the period 1 January 2020 to 31 December 2020). Based on his annualised 2019 compensation as an executive Director, his percentage change in salary, benefits and annual incentive was 2.1%, 85.2% and -50.9%, respectively for 2020. 2 Sir Noel Quinn voluntarily waived the cash portion of his 2020 annual incentive. The year-on-year percentage change between 2020 and 2021 would be -1% without this cash waiver. 3 Sir Noel Quinn stepped down as Group CEO and as an executive Director of the Board with effect from 2 September 2024. The annual percentage change in 2024 for Sir Noel Quinn is based on remuneration reported in his 2024 single total figure of remuneration (for the period 1 January 2024 to 1 September 2024). Based on his annualised 2024 compensation as an executive Director, his percentage change in salary, benefits and annual incentive was 3.0% , -22.4% and 14.1% respectively for 2024. 4 Georges Elhedery succeeded Ewen Stevenson as Group CFO with effect from 1 January 2023, and succeeded Sir Noel Quinn as Group CEO with effect from 2 September 2024. The annual percentage change in 2024 for Georges Elhedery is based on remuneration reported in his 2024 single total figure of remuneration, which reflects compensation as both Group CFO and Group CEO during 2024. 5 Geraldine Buckingham stepped down as a member of the Group Risk Committee on 1 October 2024 and was appointed as a member of the Group Audit Committee and Chair of the Sustainability Working Group on 1 October 2024. 6 Rachel Duan was appointed as a member of the Group Audit Committee on 1 June 2022. 7 Rachel Duan and Dame Carolyn Fairbairn did not receive taxable benefits in 2023, resulting in a 100% reduction in benefits from the prior year. 8 Dame Carolyn Fairbairn was appointed as Chair of the Group Remuneration Committee effective 29 April 2022. 9 James Forese was appointed as non-executive Chair of HSBC North America Holdings, Inc in 2021. He was appointed as a member of the Sustainability Working Group on 1 October 2024. 10 Ann Godbehere was appointed as a member of the Group Audit Committee on 21 February 2024 and as a member of the Sustainability Working Group on 1 October 2024. She was also appointed as Senior Independent Director on 3 May 2024. 11 Steven Guggenheimer joined the Board on 1 May 2020. He stepped down as a Co-Chair of the Technology Governance Working Group on 1 March 2024 and was appointed as a member of the Group Technology Committee on 1 March 2024. 12 José Antonio Meade Kuribreña did not receive taxable benefits in 2021, resulting in a 100% reduction in benefits from the prior year. 13 Kalpana Morparia joined the Board on 1 March 2023. She was appointed as a member of the Group Technology Committee on 1 March 2024 and Group Remuneration Committee on 1 October 2024. Kalpana Morparia stepped down as a member of Group Risk Committee on 1 October 2024. 14 Eileen Murray was appointed as a member of the Group Audit Committee on 1 June 2022. She stepped down as the Co-Chair of the Technology Governance Working Group Committee and was appointed as the Chair of the Group Technology Committee on 1 March 2024. Eileen Murray stepped down as a member of the Group Audit Committee and was appointed as a member of the Group Risk Committee on 1 October 2024. 15 Eileen Murray did not receive taxable benefits in 2024, resulting in a 100% reduction in benefits from the prior year. 16 Brendan Nelson was appointed as Chair of the Group Audit Committee on 21 February 2024. He was appointed as a member of the Group Technology Committee on 1 March 2024 and the Sustainability Working Group on 1 October 2024. 17 David Nish retired from the Board effective 3 May 2024. 18 Swee Lian Teo was appointed as a member of the Group Technology Committee on 1 March 2024 and the Sustainability Working Group on 1 October 2024. 19 Employee group consists of individuals employed by HSBC Group Management Services Ltd, the employing entity of the executive Directors, as no individuals are employed directly by HSBC Holdings. HSBC Holdings plc Annual Report on Form 20-F 339 Scheme interests awarded during 2024 (Audited) The table below sets out the scheme interests granted to executive Directors during 2024 in respect of the 2023 performance year, as disclosed in the 2023 Directors’ remuneration report. No non-executive Directors received scheme interests during the financial year. The below table includes details of immediate shares and fixed pay allowances in compliance with Chapter 17 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Scheme awards in 2024 (Audited) Type of interest awarded Basis on which award made Date of award Face value awarded £000 Percentage receivable for minimum performance Number of shares awarded End of performance period Sir Noel Quinn LTI deferred shares 1 % of base salary 26 February 2024 5,822 25 974,853 31 December 2026 Immediate shares 2 % of base salary 26 February 2024 1,009 N/A 168,955 31 December 2023 Fixed pay allowance 3 N/A 8 May 2024 300 N/A 42,146 N/A 15 August 2024 300 N/A 46,219 N/A 5 November 2024 300 N/A 41,846 N/A Georges Elhedery LTI deferred shares 1 % of base salary 26 February 2024 3,399 25 569,177 31 December 2026 Immediate shares 2 % of base salary 26 February 2024 643 N/A 107,752 31 December 2023 Fixed pay allowance 3 N/A 8 May 2024 192 N/A 26,899 N/A 15 August 2024 192 N/A 29,498 N/A 5 November 2024 299 N/A 41,720 N/A 1 In accordance with the remuneration policy approved by shareholders at the 2022 AGM, the LTI award was determined at 320 % of base salary for Sir Noel Quinn and 320 % of base salary for Georges Elhedery. The number of shares to be granted was determined by taking HSBC’s closing share price of £ 5.972 taken on 23 February 2024, and applying a discount based on HSBC’s expected dividend yield of 6.25 % per annum for the vesting period ( £ 4.385 ). The fair value of the awards was £ 2.028 based on IFRS 2 accounting standards. LTI awards are conditional share awards subject to a three -year forward-looking performance period and vest in five equal annual instalments, between the third and seventh anniversary of the award date, subject to performance achieved. Awards are subject to clawback for a maximum period of 10 years from the date of the award and are not eligible for dividend equivalents. 2 Immediate share awards are granted based on the previous years’ performance as part of the annual incentive and are not subject to forward-looking performance conditions. On vesting, awards will be subject to a one -year retention period. The face values of the immediate share awards have been computed using HSBC’s closing share price of £ 5.972 taken on 23 February 2024. The fair value of the awards was £ 5.957 based on IFRS 2 accounting standards . Awards are subject to clawback for a maximum period of 10 years from the date of the award. 3 Fixed pay allowance awards are granted in instalments in accordance with the remuneration policy approved by shareholders at the 2022 AGM, and are not subject to forward-looking performance conditions. Individual tax liabilities were satisfied in cash, therefore the face value awarded represents the net of tax value of the shares and the number of shares awarded reflects the net of tax number of shares. The fixed pay allowance awards have been computed using HSBC’s closing share price of £ 7.126 taken on 7 May 2024, £ 6.498 taken on 14 August 2024 and £ 7.177 taken on 4 November 2024. The fair values of these awards are based on IFRS 2 accounting standards and are £ 7.208 , £ 6.558 and £ 7.224 respectively. These awards vest immediately and are subject to a retention period and released annually on pro-rata basis over five years , starting in March 2025. Performance conditions for the 2024–2026 LTI awards (Audited) Measures (weighting) 1 Minimum (25% payout) Target (50% payout) Maximum (100% payout) RoTE with CET1 capital ratio underpin 2 ( 37.5 % ) 14.0 % 16.0 % 17.0 % Environment and sustainability 3 ( 25 % ) Carbon reduction (own emissions) 66.0 % 70.0 % 74.0 % Sustainable finance and investment $ 539.0 bn $ 641.0 bn $ 693.0 bn Relative TSR 4 ( 37.5 % ) At median of the peer group Straight-line vesting between minimum and maximum At upper quartile of peer group Subject to risk and compliance modifier The Group Remuneration Committee retains the discretion to revise down the formulaic outcome taking into account performance against risk and compliance factors during the performance period. 1 Awards will vest on a straight-line basis for performance between the minimum, target and maximum levels of performance set in this table. 2 To be assessed based on RoTE at the end of the performance period, subject to the CET1 capital ratio underpin. 3 Carbon reduction will be measured based on percentage reduction in total energy and travel emissions achieved by 31 December 2026 using 2019 as the baseline. The sustainable finance and investment measure will assess the cumulative amount provided and facilitated over the period ending 31 December 2026. 4 The peer group for the 2024–2026 award is: Bank of China (Hong Kong), Barclays, BNP Paribas, China Merchants Bank, Citigroup, DBS Group Holdings, J.P. Morgan Chase & Co., Lloyds Banking Group, OCBC Bank, Standard Chartered and UBS Group. 340 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Other scheme interests held during 2024 The table below details scheme interests held by executive Directors during 2024, in respect of prior performance years. Vesting of deferred share awards is normally subject to the Director remaining an employee on the vesting date. The awards may vest at an earlier date in some circumstances. Under the Securities and Futures Ordinance of Hong Kong, interests in conditional share awards are categorised as the interests of the beneficial owner. Other scheme interests in 2024 HSBC Holdings ordinary shares Type of interest held Dates of award Award price (£) 1 Usually vesting At 1 Jan 2024 Vested in period Lapsed in period Cancelled in period At 31 Dec 2024 from to Sir Noel Quinn LTI deferred shares 1 Mar 2021 4.262 1 Mar 2024 31 Mar 2028 1,118,554 167,782 2 279,639 — 671,133 28 Feb 2022 5.380 1 Mar 2025 31 Mar 2029 983,339 — — — 983,339 27 Feb 2023 6.357 1 Mar 2026 31 Mar 2030 861,422 — — — 861,422 Deferred shares 27 Feb 2017 3 6.503 1 Mar 2020 31 Mar 2024 19,886 20,698 4 — — — 26 Feb 2018 5 7.234 1 Mar 2021 31 Mar 2025 43,011 21,504 — — 21,507 25 Feb 2019 6 6.235 1 Mar 2022 31 Mar 2026 84,351 28,117 — — 56,234 24 Feb 2020 7 5.622 1 Mar 2023 31 Mar 2027 161,362 40,340 — — 121,022 Georges Elhedery LTI deferred shares 28 Feb 2022 5.380 1 Mar 2025 31 Mar 2029 223,989 — — — 223,989 27 Feb 2023 6.357 1 Mar 2026 31 Mar 2030 251,474 — — — 251,474 Deferred shares 25 Feb 2019 8 6.235 1 Mar 2020 31 Mar 2024 17,193 17,193 — — — 24 Feb 2020 7 5.622 1 Mar 2023 31 Mar 2027 118,129 29,532 — — 88,597 1 Mar 2021 9 4.262 1 Mar 2024 31 Mar 2028 305,523 61,104 — — 244,419 28 Feb 2022 10 5.380 1 Mar 2025 31 Mar 2029 273,163 — — — 273,163 1 The award price is the closing price on the day before the grant date. In all cases the purchase price is nil. 2 The performance conditions were assessed and confirmed at 75%. The remaining 25% of the award was forfeited. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award vests in five equal tranches commencing in 2024. The first tranche vested on 12 March 2024 at a market value of £5.8992. The closing price of the shares immediately before the date on which the awards were vested was £5.758. 3 The award vested in five equal annual tranches. The final tranche vested on 11 March 2024 at a market value of £5.7534. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for six months from the vesting date. The closing price of the shares immediately before the date on which the awards were vested was £5.799. 4 The quantity vested included 812 dividend equivalents allocated in respect of the Q4 2023 dividend. 5 Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award will vest in five equal annual tranches. The fourth tranche vested on 12 March 2024 at a market value of £5.8992. The closing price of the shares immediately before the date on which the awards were vested was £5.758. 6 Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award will vest in five equal annual tranches. The third tranche vested on 11 March 2024 at a market value of £5.7534. The closing price of the shares immediately before the date on which the awards were vested was £5.799. 7 Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award will vest in five equal annual tranches. The second tranche vested on 11 March 2024 at a market value of £5.7534. The closing price of the shares immediately before the date on which the awards were vested was £5.799. 8 Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for six months from the vesting date. The award vested in five equal annual tranches. The final tranche vested on 11 March 2024 at a market value of £5.7534. The closing price of the shares immediately before the date on which the awards were vested was £5.799. 9 Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. The award will vest in five equal annual tranches. The first tranche vested on 12 March 2024 at a market value of £5.8992. The closing price of the shares immediately before the date on which the awards were vested was £5.758. 10 The award will vest in five equal annual tranches commencing in 2025. Shares equivalent in number to those that vest under the award (net of tax liabilities) must be retained for one year from the vesting date. No Directors held any short position (as defined in the Securities and Futures Ordinance of Hong Kong) in the shares or debentures of HSBC Holdings and its associated corporations. Save as stated in the tables above, none of the Directors had an interest in any shares or debentures of HSBC Holdings or any associates at the beginning or at the end of the period, and none of the Directors or members of their immediate families were awarded or exercised any right to subscribe for any shares or debentures in any HSBC corporation during the period. There have been no changes in the shares or debentures of the Directors from 31 December 2024 to the date of this report. HSBC Holdings plc Annual Report on Form 20-F 341 Executive Directors’ interests in shares (Audited) The shareholdings of executive Directors in 2024, including the shareholdings of their connected persons, at 31 December 2024 (or the date they stepped down from the Board, if earlier) are set out below. The following table shows the comparison of shareholdings with the company shareholding guidelines. There have been no changes in the shareholdings of the executive Directors from 31 December 2024 to the date of this report. Individuals have five years from their appointment date to build up the recommended levels of shareholding. In line with investor guidance, for executive Directors, unvested shares that are not subject to forward-looking performance conditions (on a net of tax basis) can count towards their shareholding requirement under the shareholder- approved policy. The Committee reviews compliance with the shareholding requirement, taking into account shareholder expectations and guidelines. The Committee also has full discretion in determining any penalties for non-compliance. With regard to post-employment shareholding arrangements, we believe that our remuneration structure achieves the objective of ensuring there is ongoing alignment of executive Directors’ interests with shareholder experience post-cessation of their employment due to the following features of the policy: – Shares delivered to executive Directors as part of the fixed pay allowance have a five -year retention period, which continues to apply following a departure of an executive Director. – Shares delivered as part of an annual incentive award are subject to a one -year retention period, which continues to apply following a departure of an executive Director. – LTI awards have a seven -year vesting period with a one -year post- vesting retention period, which is not accelerated on departure. The weighted average holding period of an LTI award within HSBC is therefore six years , in excess of the five-year holding period typically implemented by FTSE-listed companies. HSBC operates a policy under which individuals are not permitted to enter into any personal hedging strategies in relation to HSBC shares subject to a vesting and/or retention period. Shares (Audited) Shareholding guidelines (% of salary) Shareholding at 31 Dec 2024 2 or date stepped down (% of salary) At 31 Dec 2024, or date stepped down from the Board if earlier Scheme interests Share interests (number of shares) Share options 3 Shares awarded subject to deferral 1 without performance conditions with performance conditions 4 Executive Directors Sir Noel Quinn 5 (stepped down from 2 September 2024) 400 % 1,068 % 2,046,949 — 869,896 2,819,614 Georges Elhedery 5 (appointed as Group CEO from 2 September 2024) 400 % 504 % 966,017 — 606,179 1,044,640 1 The gross number of shares is disclosed. A portion will be sold at vesting to cover any income tax and social security that falls due at the time of vesting. 2 The value of the shareholding is calculated using an average of the daily closing share prices in the three months to 31 December 2024 (£ 7.184 ), and does not include any unvested interests . 3 At 31 December 2024, Sir Noel Quinn and Georges Elhedery did not hold any options under the HSBC Holdings Savings-Related Share Option Plan (UK). 4 L TI awards granted in February 2022, 2023 and 2024 are subject to the performance conditions as set out in the preceding sections . 5 E xecutive Directors are expected to meet their shareholding guidelines within five years of the date of their appointment. Total pension entitlements (Audited) No employees who served as executive Directors during the year have a right to amounts under any HSBC final salary pension scheme for their services as executive Directors or are entitled to additional benefits in the event of early retirement. There is no retirement age set for Directors, but the normal retirement age for colleagues is 65 . Payments to past Directors (Audited) In line with the terms of his departure disclosed in our Annual Report and Accounts 2022, Ewen Stevenson was granted good leaver status. Ewen Stevenson is eligible to receive vesting of the 2022–2024 LTI award, pro-rated for time in employment subject to satisfaction of non-compete provisions under which he cannot undertake a role with a defined list of competitor financial services firms for 12 months after his employment ceases with HSBC. Details of the 2022–2024 LTI outcome are outlined on page 329 . No other payments were made to, or in respect of, former Directors in the year in excess of the minimum threshold of £50,000 set for this purpose. External appointments During 2024, executive Directors did not receive any fees from external appointments. Payments for loss of office (Audited) Departure terms for Sir Noel Quinn Sir Noel Quinn is leaving the Group on 30 April 2025. He will continue to receive his salary, Fixed Pay Allowance (’FPA’), cash in lieu of pension allowance and other benefits up to (and including) his retirement date in the normal way. The aggregate value of these payments from 2 September 2024 to 31 December 2024 was £ 1,147,055 and comprised a salary of £ 454,844 , a FPA of £ 562,019 , cash in lieu of pension allowance of £ 45,484 and benefits totalling £ 84,707 , which includes Group Income Protection, a contribution towards Sir Noel Quinn's legal fees incurred in connection with his departure arrangements and other benefits in connection with his retirement. Sir Noel Quinn will also receive cash in lieu of unused holiday on expiry of his notice period. The fixed pay allowance will be awarded in immediately vested shares, be subject to a retention period and released on a pro-rata basis over five years . Sir Noel Quinn will not be eligible for an LTI award in respect of the 2024 performance year, or any annual incentive award in respect of the 2025 performance year. In accordance with the contractual terms 342 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report agreed and our approved Directors’ remuneration policy, Sir Noel Quinn was granted good leaver status in respect of his outstanding unvested share awards. Good leaver status is conditional upon him not taking up a role with a defined list of competitor financial services firms for a year from his departure date. As a good leaver, his deferred share awards will continue to vest and be released on their scheduled vesting dates, subject to the relevant terms (including post- vesting retention periods, malus and, where applicable, clawback). Any vesting of his LTI awards will be pro-rated for the period up to the departure date and will be subject to the relevant terms (including post-vesting retention periods, malus and clawback) and the achievement of the required performance conditions. For this purpose, his 2022 and 2023 LTI awards have been pro-rated for time with the maximum number of shares, being 669,995 and 433,268 respectively, still subject to performance. Sir Noel Quinn will be eligible to receive certain post-departure benefits for a period of up to seven years after the departure date. Sir Noel Quinn will receive no other compensation or payment for the termination of his service agreement or his ceasing to be a Director of the Group. Directors’ emoluments The details of compensation paid to executive and non-executive Directors for the year ended 31 December 2024 are set out below: Emoluments Sir Noel Quinn Georges Elhedery Non-executive Directors 1 2024 2023 2024 2023 2024 2023 £000 £000 £000 £000 £000 £000 Directors' base salary, allowances and benefits in kind 2,270 3,386 2,473 1,999 Non-executive Directors' fees and benefits in kind 5,583 4,769 Pension contributions — — — — — — Performance-related pay paid or receivable 2,3 1,540 6,293 10,677 3,783 — — Inducements to join paid or receivable — — — — — — Compensation for loss of office 1,147 — — — — — Notional return on deferred cash 56 43 8 6 — — Total 5,013 9,722 13,157 5,788 5,583 4,769 Total ($000) 6,406 12,424 16,814 7,397 7,135 6,095 1 Fees and benefits in kind for 2024 reflects the population as per the single total figure table for non-executive Directors, which excludes individuals who have stepped down from the Board during 2024. 2 Includes the value of the deferred and LTI awards at grant. 3 The 2024 value of performance-related pay paid or receivable for Georges Elhedery includes the proposed 2025-2027 LTI award under the new executive Director remuneration policy, which is subject to shareholder approval at the 2025 AGM. The aggregate amount of Directors’ emoluments (including both executive Directors and non-executive Directors) for the year ended 31 December 2024 was $ 30,355,377 . The aggregate value of Director retirement benefits for current Directors is nil. As per our policy, benefits in kind may include, but are not limited to, the provision of medical insurance, income protection insurance, health assessment, life assurance, club membership, tax assistance, car benefit, travel assistance, provision of company owned-accommodation and relocation costs (including any tax due, where applicable). The details of compensation paid to former executive Directors for the year ended 31 December 2024 are set out below: Emoluments to former executive Directors Douglas Flint Stuart Gulliver John Flint Marc Moses £ $ £ $ £ $ £ $ Post-employment medical insurance benefits 8,018 10,246 8,018 10,246 12,161 15,541 18,950 24,217 Tax return support — — — — — — 2,500 3,195 1 Amounts are converted into US dollars based on the average exchange rates for the year. The total aggregate value of benefits provided to former executive Directors in 2024 was £49,646 ( $63,444 ). There were payments under retirement benefit arrangements to four former Directors of £3,225,964 . We note an additional retirement benefit payment made in 2023 to a former Director of £1,038,863. This means payments under retirement benefit arrangements for 2023 were made to four former Directors, totalling £2,420,537. The provision at 31 December 2024 in respect of unfunded pension obligations to two former Directors amounted to £352,441 . This relates to unfunded unapproved retirement benefits schemes. HSBC Holdings plc Annual Report on Form 20-F 343 Emoluments of senior management and five highest paid employees The following tables set out the emoluments paid to senior management, which in this case comprises executive Directors and members of the Group Executive Committee, for the year ended 31 December 2024, or for the period of appointment in 2024 as a Director or member of the Group Executive Committee. Details of the remuneration paid and share awards granted to the five highest paid employees, comprising Georges Elhedery, Pam Kaur and three other members of the Group Executive Committee for the year ended 31 December 2024, are also presented. Five highest paid employees – share awards (HSBC Share Plan 2011) Dates of award Award price (£) 1 HSBC Holdings ordinary share awards Usually vesting At 1 Jan 2024 Granted in period Vested in period 2 Lapsed in period Cancelled in period At 31 Dec 2024 from to 2017 to 2023 — 1 Mar 2024 30 Mar 2030 4,290,807 — 478,332 — — 3,812,475 26 Feb 2024 3 5.972 26 Feb 2024 30 Mar 2031 — 2,064,764 568,482 — — 1,496,282 18 Mar 2024 4 5.980 18 Mar 2024 30 Mar 2028 — 313,085 113,864 — — 199,221 8 May 2024 5 7.126 8 May 2024 30 Mar 2027 — 1,012,813 332,397 — — 680,416 15 Aug 2024 6 6.498 15 Aug 2024 15 Aug 2024 — 29,498 29,498 — — — 5 Nov 2024 7 7.177 5 Nov 2024 5 Nov 2024 — 41,720 41,720 — — — 1 Jan to 31 Dec 2024 8 — 1 Mar 2024 30 Mar 2024 — 5,269 5,269 — — — 4,290,807 3,467,149 1,569,562 — — 6,188,394 1 The award price is the closing price on the day before the grant date. In all cases the purchase price is nil. 2 The weighted average closing price of the shares immediately before the dates on which the awards were vested was £6.2037. 3 The fair values of the awards were calculated according to the IFRS 2 accounting standard. The fair values, which vary based on the length of the vesting period, range between £2.028 and £5.957. These awards include LTI awards and other awards which are subject to satisfaction of performance conditions. LTI awards are subject to a combination of financial and non-financial metrics that are detailed in the Directors’ remuneration report in this Form 20-F. 4 The fair values of the awards were calculated according to the IFRS 2 accounting standard. The fair values, which vary based on the length of the vesting period, range between £5.165 and £5.789. 5 The fair values of the awards were calculated according to the IFRS 2 accounting standard. The fair values, which vary based on the length of the vesting period, range between £6.823 and £7.208. 6 The fair values of the awards were calculated according to the IFRS 2 accounting standard. The fair value of the award was £6.558 . 7 The fair values of the awards were calculated according to the IFRS 2 accounting standard. The fair value of the award was £7.224 . 8 Relates to the allocation of dividend equivalent shares in relation to eligible awards. Emoluments £000s Five highest paid employees Senior management Basic salaries, allowances and benefits in kind 10,688 37,990 Pension contributions 9 656 Performance-related pay paid or receivable 1 33,459 58,290 Inducements to join paid or receivable — — Compensation for loss of office 2 — 2,221 Total 44,156 99,157 Total ($000) 56,429 126,717 1 Includes the value of deferred share awards at grant. 2 Excludes expected payments in 2025 in connection with loss of office for senior management in 2024. Emoluments by bands Hong Kong dollars US dollars Number of highest paid employees Number of senior management $5,500,001 – $6,000,000 $704,877 – $768,956 — 2 $8,000,001 – $8,500,000 $1,025,275 – $1,089,355 — 1 $20,000,001 – $20,500,000 $2,563,187 – $2,627,267 — 3 $21,000,001 – $21,500,000 $2,691,347 – $2,755,426 — 1 $29,500,001 – $30,000,000 $3,780,701 – $3,844,781 — 1 $33,000,001 – $33,500,000 $4,229,259 – $4,293,339 — 1 $34,500,001 – $35,000,000 $4,421,498 – $4,485,578 — 1 $35,000,001 – $35,500,000 $4,485,578 – $4,549,658 — 1 $37,000,001 – $37,500,000 $4,741,897 – $4,805,976 — 1 $40,000,001 – $40,500,000 $5,126,375 – $5,190,454 — 1 $44,000,001 – $44,500,000 $5,639,012 – $5,703,092 — 1 $47,500,001 – $48,000,000 $6,087,570 – $6,151,650 — 1 $49,000,001 – $49,500,000 $6,279,809 – $6,343,889 — 2 $50,500,001 – $51,000,000 $6,472,048 – $6,536,128 — 1 $57,000,001 – $57,500,000 $7,305,084 – $7,369,164 1 2 $76,500,001 – $77,000,000 $9,804,192 – $9,868,271 1 — $83,000,001 – $83,500,000 $10,637,228 – $10,701,307 1 1 $107,000,001 – $107,500,000 $13,713,053 – $13,777,132 1 1 $131,000,001 – $131,500,000 $16,788,877 – $16,852,957 1 1 344 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Non-executive Directors (Audited) The following table shows the total fees and benefits of non-executive Directors for 2024, together with comparative figures for 2023. Fees and benefits (Audited) Fees 1 Benefits 2 Total (£000) 2024 2023 2024 2023 2024 2023 Geraldine Buckingham 3 270 244 3 5 273 249 Rachel Duan 255 244 3 — 258 244 Dame Carolyn Fairbairn 292 279 5 — 297 279 James Forese 4 801 759 4 1 805 760 Ann Godbehere 5 389 68 — — 389 68 Steven Guggenheimer 6 259 264 4 1 263 265 José Antonio Meade Kuribreña 253 244 7 4 260 248 Kalpana Morparia 7 248 170 1 — 249 170 Eileen Murray 8 331 290 — 3 331 293 Brendan Nelson 9 329 81 38 12 367 93 David Nish 10 159 479 30 19 189 498 Swee Lian Teo 11 256 51 — — 256 51 Sir Mark Tucker 1,500 1,500 145 51 1,645 1,551 Total (£000) 5,343 4,673 240 96 5,583 4,769 Total ($000) 6,828 5,972 307 123 7,135 6,095 1 Fees are in line with the Directors’ remuneration policy. There was a 5 % increase in fees for Director fees, Group Risk Committee Member, Group Audit Committee Chair and Member, Remuneration Committee Chair and Member, Nomination & Corporate Governance Committee Member and Group Technology Committee Chair and Member). 2 Benefits include taxable expenses such as accommodation, travel and subsistence relating to attendance at Board and other meetings at HSBC Holdings’ registered offices. Amounts disclosed have been grossed up using a tax rate of 45 % , where relevant. 3 Stepped down as a member of the Group Risk Committee and joined the Group Audit Committee as member on 1 October 2024. Appointed as Chair of the Sustainability Working Group on 1 October 2024. 4 Appointed as a member of the Sustainability Working Group on 1 October 2024. Includes fee of £ 430,000 (2023: £ 443,000 ) in relation to his role as Chair of HSBC North America Holdings, Inc. 5 Appointed as a member of the Group Audit Committee on 21 February 2024 and the Sustainability Working Group on 1 October 2024. Appointed as Senior Independent Director on 3 May 2024. 6 Stepped down as a member of the Technology Governance Working Group on 1 March 2024. Appointed as a member of the Group Technology Committee on 1 March 2024. 7 Appointed as a member of the Group Technology Committee on 1 March 2024. Stepped down as a member of Group Risk Committee on 1 October 2024 and joined the Group Remuneration Committee on 1 October 2024. 8 Stepped down as the Co-Chair of the Technology Governance Working Group Committee on 1 March 2024 and as the member of the Group Audit Committee on 1 October 2024. Appointed as the Chair of the Group Technology Committee on 1 March 2024 and as a member of the Group Risk Committee on 1 October 2024. 9 Appointed as Chair of the Group Audit Committee on 21 February 2024. Appointed as member of the Group Technology Committee on 1 March 2024 and Sustainability Working Group on 1 October 2024. 10 Retired from the Board at the conclusion of the 2024 AGM on 3 May 2024. 11 Appointed as member of the Group Technology Committee on 1 March 2024 and the Sustainability Working Group on 1 October 2024. HSBC Holdings plc Annual Report on Form 20-F 345 Non-executive Directors’ interests in shares (Audited) The shareholdings of persons who were non-executive Directors in 2024, including the shareholdings of their connected persons, at 31 December 2024, or date of cessation as a Director if earlier, are set out below. There have been no changes in the shareholdings of the non-executive Directors from 31 December 2024 to the date of this report. N on-executive Directors are expected to meet the shareholding guidelines of 15,000 shares within five years of the date of their appointment. All non-executive Directors who had been appointed for five years or more at 31 December 2024 met the guidelines. Shares Shareholding guidelines (number of shares) Share interests (number of shares) Geraldine Buckingham 15,000 15,000 Rachel Duan 15,000 15,000 Dame Carolyn Fairbairn 15,000 15,000 James Forese 15,000 115,000 Ann Godbehere 15,000 15,000 Steven Guggenheimer 15,000 15,000 José Antonio Meade Kuribreña 15,000 15,000 Kalpana Morparia 15,000 15,000 Eileen Murray 15,000 75,000 Brendan Nelson 15,000 15,000 David Nish (retired on 3 May 2024) 15,000 50,000 Swee Lian Teo 15,000 15,200 Sir Mark Tucker 15,000 307,352 2025 fees for non-executive Directors The table below sets out the 2025 fees for non-executive Directors. The fees paid to non-executive Directors who are standing for election or re-election as members of Board Committees are set out in the table below (these Board Committees’ fees and Board fees are pro-rated for part year service where relevant). 2025 fees Position £ Non-executive Group Chairman 1 1,500,000 Non-executive Director (base fee) 136,500 Senior Independent Director 200,000 Group Risk Committee Chair 150,000 Member 50,000 Group Audit Committee, Group Remuneration Committee and Group Technology Committee Chair 125,000 Member 50,000 Nomination & Corporate Governance Committee Chair –– Member 34,650 Sustainability Working Group Chair 60,000 Member 30,000 Designated workforce engagement non-executive Director 50,000 1 The Group Chairman does not receive a base fee or any other fee in respect of chairing of the Nomination & Corporate Governance Committee. The Board has reviewed the fees payable to non-executive Directors in the context of changes to the organisational structure. Following this review, the Board considered that the fees payable for chairing or being a member of a Board Committee (excluding the Nomination & Corporate Governance Committee) should be increased to recognise the responsibilities and additional time commitment associated with such a role. Overall, giving due consideration to the highly regulated and complex industry in which HSBC operates, the Board agreed to align the additional fee payable for chairing a Board Committee at £150,000 per annum (i.e., in line with the current fee for chairing the Group Risk Committee). The increase in the fee for chairing a Board Committee will be phased over two years, with an increase to £125,000 per annum for 2025, and a further increase to £150,000 per annum with effect from 1 January 2026. The Board also agreed increases to the additional fee for being a member of a Board Committee, and for the role of designated non-executive Director for workforce engagement, which were both increased to £50,000 per annum. These increases reflect the additional activity being undertaken during this period of organisational and cultural change. No other changes are proposed to non-executive Director fees for 2025. 346 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report MRT remuneration disclosures The following tables set out the remuneration disclosures for individuals identified as MRTs for HSBC Holdings. Remuneration information for individuals who are only identified as MRTs at HSBC Bank plc, HSBC UK Bank plc or other solo-regulated entity levels is included, where relevant, in those entities’ disclosures. The 2024 variable pay information included in the following tables is based on the market value of awards. For share awards, the market value is based on HSBC Holdings’ share price at the date of grant (unless indicated otherwise). For cash awards, it is the value of awards expected to be paid to the individual over the deferral period. Remuneration awarded for the financial year (REM1) Supervisory function Management function Other senior management Other identified staff Fixed remuneration Number of identified staff 13.0 2.0 18.9 1,260.6 Total fixed pay ($m) 7.1 7.4 45.0 703.8 –  of which: cash-based ($m) 1 7.1 3.6 45.0 703.8 –  of which: shares or equivalent ownership interests ($m) 2 — 3.8 — — –  of which: share-linked instruments or equivalent non-cash instruments ($m) — — — — –  of which: other instruments ($m) — — — — –  of which: other forms ($m) — — — — Variable remuneration 3 Number of identified staff 13.0 2.0 18.9 1,260.6 Total variable remuneration ($m) 4 — 20.2 81.1 769.0 –  of which: cash-based ($m) — 2.1 36.8 387.8 –  of which: deferred ($m) — 0.6 16.3 179.7 –  of which: shares or equivalent ownership interests ($m) 2 — 18.1 44.3 367.6 –  of which: deferred ($m) — 16.7 31.3 209.5 –  of which: share-linked instruments or equivalent non-cash instruments ($m) — — — 9.3 –  of which: deferred ($m) — — — 5.1 –  of which: other instruments ($m) — — — — –  of which: deferred ($m) — — — — –  of which: other forms ($m) — — — 4.3 –  of which: deferred ($m) — — — 2.7 Total remuneration ($m) 7.1 27.6 126.1 1,472.8 1 Cash-based fixed remuneration is paid immediately. 2 Paid in HSBC shares. Vested shares are subject to a retention period of up to one year. 3 Variable pay awarded in respect of 2024. In accordance with shareholder approval received on 3 May 2024 (99% in favour), and where regulations permit, for each MRT the variable component of remuneration for any one year is limited to ten times the fixed component of total remuneration, in line with the maximum pay ratio approved by the Group Remuneration Committee. HSBC Holdings plc continues to provide approval for entities regulated by the European Banking Authority to operate a maximum variable pay ratio of 200% of the fixed component of total remuneration for each MRT, where permitted to do so. 4 27 identified staff members were exempt from the application of the remuneration structure requirements for MRTs under the PRA and FCA remuneration rules. Their total remuneration is $ 7.1 m, of which $ 6.0 m is fixed pay and $ 1.1 m is variable remuneration. Special payments to staff whose professional activities have a material impact on institutions’ risk profile (REM2) Supervisory function Management function Other senior management Other identified staff Guaranteed variable remuneration awards 1 Number of identified staff — — — — Total amount ($m) — — — — –  of which guaranteed variable remuneration awards paid during the financial year, that are not taken into account in the bonus cap ($m) — — — — Severance payments awarded in previous periods, that have been paid out during the financial year 2 Number of identified staff — — — 1.0 Total amount ($m) — — — 3.4 Severance payments awarded during the financial year 2 Number of identified staff — — 6.9 34.0 Total amount ($m) — — 7.5 42.6 –  of which paid during the financial year ($m) — — — 37.1 –  of which deferred ($m) — — — — –  of which severance payments paid during the financial year, that are not taken into account in the bonus cap ($m) — — 7.5 42.6 –  of which highest payment that has been awarded to a single person ($m) — — 4.3 9.3 1 No guaranteed variable remuneration was awarded in 2024. HSBC would offer a guaranteed variable remuneration award in exceptional circumstances for new hires, and for the first year of employment only. It would typically involve a critical new hire, and would also depend on factors such as the seniority of the individual, whether the new hire candidate has any competing offers and the timing of the hire during the performance year. 2 Includes payments such as payment in lieu of notice, statutory severance, outplacement service, legal fees, ex-gratia payments and settlements (excludes pre- existing benefit entitlements triggered on terminations). HSBC Holdings plc Annual Report on Form 20-F 347 Deferred remuneration at 31 December 1 (REM3) $m Total amount of deferred remuneration awarded for previous performance periods of which: due to vest in the financial year of which: vesting in subsequent financial years Amount of performance adjustment made in the financial year to deferred remuneration that was due to vest in the financial year Amount of performance adjustment made in the financial year to deferred remuneration that was due to vest in future performance years Total amount of adjustment during the financial year due to ex post implicit adjustments Total amount of deferred remuneration awarded before the financial year actually paid out in the financial year Total amount of deferred remuneration awarded for previous performance period that has vested but is subject to retention periods Supervisory function — — — — — — — — Cash-based — — — — — — — — Shares — — — — — — — — Share-linked instruments — — — — — — — — Other instruments — — — — — — — — Other forms — — — — — — — — Management function 58.9 4.1 54.8 (3.0) — 11.5 4.2 2.7 Cash-based 6.5 1.3 5.2 — — — 1.3 — Shares 52.4 2.8 49.6 (3.0) — 11.5 2.9 2.7 Share-linked instruments — — — — — — — — Other instruments — — — — — — — — Other forms — — — — — — — — Other senior management 195.8 17.9 177.9 (5.4) — 29.6 18.2 7.5 Cash-based 65.7 8.2 57.5 — — — 8.3 — Shares 130.1 9.7 120.4 (5.4) — 29.6 9.9 7.5 Share-linked instruments — — — — — — — — Other instruments — — — — — — — — Other forms — — — — — — — — Other identified staff 1,253.5 247.3 1,006.2 — — 152.6 250.8 63.5 Cash-based 467.3 97.3 370.0 — — — 98.2 — Shares 749.1 142.2 606.9 — — 145.8 144.7 57.8 Share-linked instruments 31.9 6.4 25.5 — — 6.3 6.5 4.4 Other instruments — — — — — — — — Other forms 5.2 1.4 3.8 — — 0.5 1.4 1.3 Total amount 1,508.2 269.3 1,238.9 (8.4) — 193.7 273.2 73.7 1 This table provides details of balances and movements during performance year 2024. For details of variable pay awards granted for 2024, refer to the ’Remuneration awarded for the financial year’ table. Deferred remuneration is made in cash and/or shares. Share-based awards are made in HSBC shares. Identified staff - remuneration by band 1 (REM4) Identified staff that are high earners as set out in Article 450(i) CRR €1,000,000 – 1,500,000 257 €1,500,000 – 2,000,000 118 €2,000,000 – 2,500,000 48 €2,500,000 – 3,000,000 35 €3,000,000 – 3,500,000 13 €3,500,000 – 4,000,000 8 €4,000,000 – 4,500,000 7 €4,500,000 – 5,000,000 10 €5,000,000 – 6,000,000 7 €6,000,000 – 7,000,000 6 €7,000,000 – 8,000,000 1 €8,000,000 – 9,000,000 1 €9,000,000 – 10,000,000 1 €10,000,000 – 11,000,000 3 €11,000,000 – 12,000,000 — €12,000,000 – 13,000,000 — €13,000,000 – 14,000,000 — €14,000,000 – 15,000,000 — €15,000,000 – 16,000,000 1 €16,000,000 – 17,000,000 — €17,000,000 – 18,000,000 — €18,000,000 – 19,000,000 — €19,000,000 – 20,000,000 1 1 Table prepared in euros in accordance with Article 450 of the European Union Capital Requirements Regulation, using the exchange rates published by the European Commission for financial programming and budget for December of the reported year as published on its website. 348 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report | Directors’ remuneration report Information on remuneration of staff whose professional activities have a material impact on institutions’ risk profile (REM5) Management body Business areas Total Supervisory function Management function Total Investment banking Retail banking Asset management Corporate function Independent internal control function All other Total number of identified staff 1,294.5 – of which members of the Board 13.0 2.0 15.0 – of which senior management 2.0 2.0 — 6.9 2.0 6.0 – of which other identified staff 532.9 289.6 29.0 165.0 183.5 60.6 Total remuneration of identified staff ($m) 7.1 27.6 34.7 721.4 329.7 38.8 220.8 149.0 139.2 – of which variable remuneration ($m) 1 — 20.2 20.2 394.6 167.6 20.6 112.9 69.6 84.8 – of which fixed remuneration ($m) 7.1 7.4 14.5 326.8 162.1 18.2 107.9 79.4 54.4 1 Variable pay awarded in respect of 2024. In accordance with shareholder approval received on 3 May 2024 (99% in favour), and where regulations permit, for each MRT the variable component of remuneration for any one year is limited to ten times the fixed component of total remuneration, in line with the maximum pay ratio approved by the Group Remuneration Committee. HSBC Holdings plc continues to provide approval for entities regulated by the European Banking Authority to operate a maximum variable pay ratio of 200% of the fixed component of total remuneration for each MRT, where permitted to do so. Share plan matters considered by the Group Remuneration Committee The Group Remuneration Committee and its delegates considered various matters relating to the HSBC share plans during the financial year. The HSBC International Employee Share Purchase Plan (‘ShareMatch’) and The HSBC Holdings Savings-Related Share Option Plan (UK) (‘Sharesave’) were offered in 2024. The HSBC variable pay deferral approach for the 2024 performance year was approved, for which certain minor updates were made to comply with legal and regulatory requirements. The Directors Remuneration Policy was approved and will be available for shareholders to vote on at the 2025 AGM. Other awards with performance conditions were approved for certain strategically important projects during 2024. Certain awards were granted to executive Directors or senior managers with vesting periods of less than 12 months: – Fixed pay allowance awards were granted to executive Directors in accordance with the approved Directors’ remuneration policy, which vest immediately and are subject to a retention period. These awards are not subject to clawback on the basis that they form part of the executive Directors’ fixed pay. The awards were granted under the HSBC Share Plan 2011. – Immediate share awards were granted to executive Directors and senior managers in compliance with our regulatory requirements to deliver a portion of non-deferred variable pay in instruments. These awards vest immediately, and are subject to a retention period and clawback provisions. HSBC Holdings plc Annual Report on Form 20-F 349 Share capital and other related governance disclosures Share buy-bac ks On 1 November 2023, HSBC Holdings commenced a further share buy-back of its ordinary shares of up to a maximum consideration of $3.0bn. The share buy-back continued in 2024 and was concluded on 16 February 2024, with 64,733,089 ordinary shares repurchased for cancellation on UK trading venues and 79,414,800 ordinary shares repurchased for cancellation on The Stock Exchange of Hong Kong Limited (’HKEx’) from 1 January 2024 to 16 February 2024. On 23 February 2024, HSBC Holdings commenced a further share buy-back of its ordinary shares of up to a maximum consideration of $2.0bn. This share buy-back concluded on 23 April 2024 with 127,570,463 ordinary shares repurchased for cancellation on UK trading venues and 127,412,800 ordinary shares repurchased for cancellation on HKEx. On 8 May 2024, HSBC Holdings commenced a further share buy-back of its ordinary shares of up to a maximum consideration of $3.0bn. This share buy-back concluded on 26 July 2024 with 171,668,799 ordinary shares repurchased for cancellation on UK trading venues and 171,252,800 ordinary shares repurchased for cancellation on HKEx. On 2 August 2024, HSBC Holdings commenced a further share buy- back of its ordinary shares of up to a maximum consideration of $3.0bn. This share buy-back concluded on 25 October 2024 with 172,311,192 ordinary shares repurchased for cancellation on UK trading venues and 173,041,600 ordinary shares repurchased for cancellation on HKEx. On 31 October 2024, HSBC Holdings commenced a further share buy-back of its ordinary shares of up to a maximum consideration of $3.0bn. As at 31 December 2024, 132,349,029 ordinary shares had been repurchased for cancellation on UK trading venues and 82,502,400 ordinary shares had been repurchased for cancellation on HKEx. The purpose of the share buy-backs was to reduce HSBC’s number of outstanding ordinary shares. As at 31 December 2024, the total number of ordinary shares repurchased during the year was 1,302,256,972, representing a nominal value of $651,128,486 and an aggregate consideration paid by HSBC of £4,477,248,660 on UK trading venues and HK$41,961,808,443 on HKEx. The ordinary shares repurchased represent 7.256% of the ordinary shares in issue as at 31 December 2024. Of the repurchased ordinary shares, 20,433,459 were awaiting cancellation as at 31 December 2024. The table that follows outlines details of the ordinary shares purchased and cancelled on a monthly basis during 2024. Share buy-back - UK venues Number of shares repurchased Highest price paid per share Lowest price paid per share Average price paid per share Aggregate price paid £ £ £ £ Jan 2024 64,733,089 6.4300 5.8190 6.1356 397,174,665 Feb 2024 17,761,890 6.2050 5.9270 6.0468 107,403,375 Mar 2024 59,048,017 6.2810 5.7290 6.0295 356,031,979 Apr 2024 50,760,556 6.6960 6.1950 6.4603 327,930,581 May 2024 59,069,838 7.2440 6.8240 6.9678 411,587,427 Jun 2024 76,307,014 7.0080 6.7040 6.8620 523,621,847 Jul 2024 36,291,947 6.9330 6.6350 6.7829 246,165,955 Aug 2024 51,180,681 6.6810 6.1090 6.4796 331,631,735 Sep 2024 78,450,902 6.8340 6.4550 6.6528 521,919,215 Oct 2024 46,324,540 7.1490 6.5930 6.8097 315,457,983 Nov 2024 86,259,230 7.3510 6.8880 7.1500 616,752,033 Dec 2024 42,444,868 7.8500 7.3080 7.5762 321,571,865 Total 668,632,572 4,477,248,660 Share buy-back - Hong Kong venues Number of shares repurchased Highest price paid per share Lowest price paid per share Average price paid per share Aggregate price paid (HK$) (HK$) (HK$) (HK$) Jan 2024 57,819,600 63.8000 57.8500 61.0549 3,530,172,280 Feb 2024 33,790,800 62.4500 58.8500 60.8394 2,055,810,581 Mar 2024 63,110,400 61.9500 58.1000 60.1891 3,798,555,480 Apr 2024 52,106,800 64.9500 61.1000 63.0989 3,287,883,380 May 2024 53,104,800 70.6500 67.5000 68.7465 3,650,768,500 Jun 2024 65,043,200 69.7500 67.0500 68.2592 4,439,796,237 Jul 2024 53,104,800 69.2500 65.9000 67.3965 3,579,076,860 Aug 2024 64,395,200 68.9000 61.1500 65.5441 4,220,726,180 Sep 2024 64,664,000 70.9500 65.7500 68.4382 4,425,485,800 Oct 2024 47,667,200 72.3000 67.3500 69.1996 3,298,553,120 Nov 2024 58,186,800 72.5500 68.8500 71.1225 4,138,390,665 Dec 2024 20,630,800 75.9500 72.3500 74.4804 1,536,589,360 Total 633,624,400 41,961,808,443 350 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Dividends Dividends for 2024 First, second and third interim dividends for 2024, each of $0.10 per ordinary share, were paid on 21 June 2024, 27 September 2024 and 19 December 2024. A special dividend of $0.21 was paid on 21 June 2024. For further details of the dividends approved in 2024, see Note 8 on the financial statements. On 19 February 2025, the Directors approved a fourth interim dividend for 2024 of $0.36 per ordinary share, making a total of $0.87 for the 2024 full-year when including the $0.21 special dividend. The fourth interim dividend for 2024 will be payable on 25 April 2025 in cash in US dollars, or in sterling or Hong Kong dollars at exchange rates to be determined on 14 April 2025. The fourth interim dividend for 2024 of $1.80 per American Depositary Share, each of which represents five ordinary shares, will be payable by the depositary in US dollars. No liability was recorded in the financial statements in respect of the fourth interim dividend for 2024. A quarterly dividend of £0.01 per non-cumulative preference share of £0.01 each was paid on 15 March, 17 June, 16 September and 16 December 2024. Dividends for 2025 The Group intends to pay quarterly dividends on its ordinary shares during 2025. A quarterly dividend of £0.01 per non-cumulative preference share of £0.01 each is payable on 17 March, 16 June, 15 September and 15 December 2025 for the quarter then ended at the sole and absolute discretion of the Board of HSBC Holdings plc. Accordingly, the Board of HSBC Holdings plc has approved a quarterly dividend to be payable on the non-cumulative preference share on 17 March 2025 to holders of record on 28 February 2025. Distributable Reserves As at 31 December 2024, the distributable reserves of HSBC Holdings were $28.3bn, inclusive of $24.8bn in profits and other reserves movements generated in 2024. As at the date of this report, HSBC Holdings intends to increase its distributable reserves subject to shareholder and court approval. Shareholder approval will be sought at the 2025 AGM. The process will involve the conversion of the amount standing to the credit of each of the share premium account ($14.8bn) and capital redemption reserve ($1.8bn) as at 31 December 2024 into retained earnings, and will have no impact on regulatory capital. Further information will be included in the Notice of the 2025 AGM which will be circulated to shareholders on 21 March 2025. The process is expected to complete by the end of July 2025. Share capital Issued share capital The nominal value of HSBC Holdings’ issued share capital paid up at 31 December 2024 was $8,973,475,291 divided into 17,946,950,582 ordinary shares of $0.50 each and one non-cumulative preference share of £0.01, representing approximately 100.00% and 0.00% respectively of the nominal value of HSBC Holdings’ total issued share capital paid up at 31 December 2024. Rights, obligations and restrictions attaching to shares The rights and obligations attaching to each class of ordinary and non- cumulative preference shares in our share capital are set out in full in our Articles of Association. The Articles of Association may be amended by special resolution of the shareholders and can be found on our website at www.hsbc.com/who-we-are/our-people/board-of- directors/board-responsibilities. Ordinary shares HSBC Holdings has one class of ordinary share, which carries no right to fixed income. There are no voting restrictions on the issued ordinary shares, all of which are fully paid. On a show of hands, each member present has the right to one vote at general meetings. On a poll, each member present or voting by proxy is entitled to one vote for every $0.50 nominal value of share capital held. There are no specific restrictions on transfers of ordinary shares, which are governed by the general provisions of the Articles of Association and prevailing legislation. Information on the policy adopted by the Board for paying interim dividends on the ordinary shares may be found in the ’Shareholder information’ section on page 461 . Dividend waivers The Group ’ s employee benefit trusts, which hold shares in HSBC Holdings in connection with the operation of its share plans, have lodged standing instructions to waive dividends on shares held by them that have not been allocated to employees. Shares held by custodians in connection with the vesting of employee share awards also lodged instructions to waive dividends. The total amount of dividends waived during 2024 was $28.85m. Preference shares The preference shares, which have preferential rights to income and capital, do not, in general, confer a right to attend and vote at general meetings. There are three classes of preference shares in the share capital of HSBC Holdings: non-cumulative US dollar preference shares of $0.01 each (‘dollar preference shares’); non-cumulative preference shares of £0.01 each (‘sterling preference shares’); and non-cumulative preference shares of €0.01 (‘euro preference shares’). The sterling preference share in issue is a Series A sterling preference share. There are no dollar preference shares or euro preference shares in issue. Information on dividends approved for 2023 and 2024 may be found in Note 8 on the financial statements. Further details of the rights and obligations attaching to the HSBC Holdings’ issued share capital may be found in Note 32 on the financial statements. Compliance with Hong Kong Listing Rule 13.25A(2) HSBC Holdings has been granted a waiver from strict compliance with Rule 13.25A(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. Under this waiver, HSBC’s obligation to file a Next Day Return following the issue of new shares, pursuant to the vesting of share awards granted under its share plans to persons who are not Directors, would only be triggered where it falls within one of the circumstances set out under Rule 13.25A(3). Share capital changes in 2024 In addition to the share buy-backs, the following events occurred during the year in relation to the ordinary share capital of HSBC Holdings: Scrip dividends There were no scrip dividends issued during the year. Treasury shares HSBC Holdings does not hold any ordinary shares in treasury. HSBC Holdings plc Annual Report on Form 20-F 351 All-employee share plans 1 HSBC Holdings ordinary shares issued Aggregate nominal value Market value per share from to $ £ £ HSBC International Employee Share Purchase Plan 141,770 70,885 5.957 6.707 1 In respect of the HSBC Holdings Savings Related Share Option Plan (UK), no new shares were issued under this plan. All exercises were satisfied by market purchased shares. See page 358 for details of options granted, exercised and lapsed. HSBC share plans HSBC Holdings ordinary shares issued Aggregate nominal value Market value per share from to $ £ £ Vesting of awards under the HSBC Share Plan 2011 10,141,660 5,070,830 5.799 7.177 Authorities to allot and to purchase shares and pre-emption rights At the AGM in 2024, shareholders renewed the general authority for the Directors to allot new shares up to 12,700,701,506 ordinary shares, 15,000,000 non-cumulative preference shares of £0.01 each, 15,000,000 non-cumulative preference shares of $0.01 each, 15,000,000 non-cumulative preference shares of €0.01 each. Shareholders also renewed the authority for the Directors to make market/off-market purchases of up to 1,905,105,226 ordinary shares. The Directors exercised their market/off-market purchase authority from both the 2023 AGM and the 2024 AGM and repurchased 1,302,256,972 ordinary shares during the year. In addition, shareholders gave authority for the Directors to grant rights to subscribe for, or to convert any security into, no more than 3,810,210,452 ordinary shares in relation to any issue by HSBC Holdings, or any member of the Group, of contingent convertible securities that automatically convert into or are exchanged for ordinary shares in HSBC Holdings in prescribed circumstances. For further details on the issue of contingent convertible securities, see Note 32 on the financial statements. Other than as disclosed in the tables above headed ‘Share capital changes in 2024’, the Directors did not allot any shares during 2024. Debt securities In 2024, HSBC Holdings issued the equivalent of $24.0 bn of debt securities in the public capital markets in a range of currencies and maturities, of which $16.1bn were in the form of senior securities to ensure it meets the current and proposed regulatory rules, including those relating to the availability of adequate total loss-absorbing capacity. For details of capital instruments and subordinated bail- inable debt, see Notes 29 and 32 on pages 438 and 445 . Treasury shares HSBC Holdings does not hold any ordinary shares in treasury. Notifiable interests in share capital During 2024, HSBC Holdings did not receive any notification of major holdings of voting rights pursuant to the requirements of Rule 5 of the Disclosure Guidance and Transparency Rules (’Rule 5 of the DTRs’). No notifications had been received between 31 December 2024 and 14 February 2025. Previous notifications received are as follows: – BlackRock, Inc. gave notice on 3 March 2020 that on 2 March 2020 it had the following: an indirect interest in HSBC Holdings ordinary shares of 1,235,558,490; qualifying financial instruments with 7,294,459 voting rights that may be acquired if the instruments are exercised or converted; and financial instruments with a similar economic effect to qualifying financial instruments, which refer to 2,441,397 voting rights, representing 6.07%, 0.03% and 0.01%, respectively, of the total voting rights at 2 March 2020. – Ping An Asset Management Co., Ltd. gave notice on 6 December 2017 that on 4 December 2017 it had an indirect interest in HSBC Holdings ordinary shares of 1,007,946,172, representing 5.04% of the total voting rights at that date. At 31 December 2024, according to the register maintained by HSBC Holdings pursuant to section 336 of the Securities and Futures Ordinance of Hong Kong: – BlackRock, Inc. gave notice on 24 December 2024 that on 19 December 2024 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,615,527,141 shares and a short position of 4,231,678 shares, representing 8.99% and 0.02%, respectively, of the ordinary shares in issue at that date. – Ping An Asset Management Co., Ltd. gave notice on 10 May 2024 that on 7 May 2024 it had a long position of 1,502,584,731 in HSBC Holdings ordinary shares, representing 7.98% of the ordinary shares in issue at that date. Between 31 December 2024 and 14 February 2025, the following notification was received: – BlackRock, Inc. gave notice on 31 January 2025 that on 28 January 2025 it had the following interests in HSBC Holdings ordinary shares: a long position of 1,601,449,305 shares and a short position of 5,961,010 shares, representing 8.97% and 0.03%, respectively, of the ordinary shares in issue at that date. Sufficiency of float In compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, at least 25% of the total issued share capital has been held by the public at all times during 2024 and up to the date of this report. Dealings in HSBC Holdings listed securities The Group has policies and procedures that, except where permitted by statute and regulation, prohibit specified transactions in respect of its securities listed on The Stock Exchange of Hong Kong Limited. Except for dealings as intermediaries or as trustees by subsidiaries of HSBC Holdings, and purchases by HSBC Holdings under the share buy-backs, neither HSBC Holdings nor any of its subsidiaries has purchased, sold or redeemed any of its securities listed on The Stock Exchange of Hong Kong Limited during the year ended 31 December 2024. Directors’ interests Pursuant to the requirements of the UK Listing Rules and according to the register of Directors’ interests maintained by HSBC Holdings pursuant to section 352 of the Securities and Futures Ordinance of Hong Kong, the Directors of HSBC Holdings at 31 December 2024 had certain interests, all beneficial unless otherwise stated, in the shares or debentures of HSBC Holdings and its associated corporations. Save as stated in the following table, no further interests were held by Directors, and no Directors or their connected persons were awarded or exercised any right to subscribe for any shares or debentures in any HSBC corporation during the year. 352 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report No Directors held any short position as defined in the Securities and Futures Ordinance of Hong Kong in the shares or debentures of HSBC Holdings and its associated corporations. Directors’ interests – shares and debentures At 31 Dec 2024 or date of cessation, if earlier At 1 Jan 2024, or date of appointment, if later Beneficial owner Child under 18 or spouse Jointly with spouse/ other Trustee Total interests HSBC Holdings ordinary shares Geraldine Buckingham 1 15,000 15,000 15,000 Rachel Duan 1 15,000 15,000 15,000 Georges Elhedery 2 753,467 966,017 966,017 Dame Carolyn Fairbairn 15,000 15,000 15,000 James Forese 1 115,000 115,000 115,000 Ann Godbehere 1 15,000 15,000 15,000 Steven Guggenheimer 1 15,000 15,000 15,000 José Antonio Meade Kuribreña 1 15,000 15,000 15,000 Kalpana Morparia 1 15,000 15,000 15,000 Eileen Murray 1 75,000 75,000 75,000 Brendan Nelson — 15,000 15,000 David Nish (retired on 3 May 2024) 50,000 50,000 50,000 Sir Noel Quinn 2 (retired on 2 September 2024) 1,721,465 2,046,949 2,046,949 Swee Lian Teo 15,200 15,200 15,200 Sir Mark Tucker 307,352 307,352 307,352 1 Geraldine Buckingham has an interest in 3,000, Rachel Duan in 3,000, James Forese in 23,000, Ann Godbehere in 3,000, Steven Guggenheimer in 3,000, José Antonio Meade Kuribreña in 3,000, Kalpana Morparia in 3,000 and Eileen Murray in 15,000 listed American Depositary Shares (’ADS’), which are categorised as equity derivatives under Part XV of the Securities and Futures Ordinance of Hong Kong. Each ADS represents five HSBC Holdings ordinary shares. 2 Executive Directors’ other interests in HSBC Holdings ordinary shares arising from the HSBC Holdings Savings-Related Share Option Plan (UK) and the HSBC Share Plan 2011 are set out in the Scheme interests in the Directors’ remuneration report on page 309 . At 31 December 2024, or date of cessation if earlier, the aggregate interests under the Securities and Futures Ordinance of Hong Kong in HSBC Holdings ordinary shares, including interests arising through employee share plans and the interests above were: Sir Noel Quinn – 5,736,459; and Georges Elhedery – 2,616,836, representing approximately 0.03% and 0.015% of the shares in issue respectively. There have been no changes in the shares or debentures of the current Directors from 31 December 2024 to the date of this report. UK Listing Rule 6.6.1 and other disclosures The disclosures required by UKLR 6.6.1, and other regulations, are set out on the following pages: Content Page references Long-term incentives 329 Dividends and Dividend waivers 350 Share buy-back 349 Emissions 40 Energy Efficiency 40 , 43 - 44 Principal activities of HSBC 14 , 29 , 94 - 95 , 427 Business review and future developments 14 - 38 , 40 , 145 , 167 , 452 Risk Review 36 - 38 , 145 - 265 Board governance Appointment and re-election of Directors A rigorous selection process is followed for the appointment of Directors. Appointments are made on merit and candidates are considered against objective criteria, and with regard to the benefits of a diverse Board. Appointments are made in accordance with HSBC Holdings’ Articles of Association. The Board may at any time appoint any person as a Director or secretary, either to fill a vacancy or as an additional officer. The Board may appoint any Director or secretary to hold any employment or executive office and may revoke or terminate any such appointment. Non-executive Directors are appointed for an initial three-year term and, subject to continued satisfactory performance based upon an assessment by the Group Chairman and the Nomination & Corporate Governance Committee, are proposed for re-election by shareholders at each AGM. They typically serve two three-year terms, with any individual’s appointment beyond six years to be for a rolling one-year term and subject to thorough review and challenge with reference to the needs of the Board. Where non-executive Directors are appointed beyond six years, an explanation will be provided in the Annual Report and Accounts. Shareholders vote at each AGM on whether to elect and re-elect individual Directors. All Directors that stood for election and re- election at the 2024 AGM were elected and re-elected by shareholders. Joint Company Secretary Aileen Taylor is the Group Company Secretary and Group Chief People & Governance Officer. Hannah Ashdown (48) was appointed as Deputy Group Secretary in December 2021 and for administrative purposes, in October 2022, was appointed as Joint Company Secretary. She is a Fellow of the Chartered Governance Institute UK and Ireland. Hannah has over 20 years’ governance and regulatory experience across multiple sectors including financial services, asset management, energy, leisure and retail. Independence Independence is a critical component of good corporate governance, and a principle that is applied consistently at both the HSBC Holdings and subsidiary level. The Group Nomination & Corporate Governance Committee has delegated authority from the Board in relation to the assessment of the independence of non-executive Directors. In accordance with the UK and Hong Kong Corporate Governance Codes, the Group Nomination & Corporate Governance Committee has reviewed and confirmed that all non-executive Directors who have submitted themselves for election and re-election at the AGM are considered to be independent. This conclusion was reached after consideration of all relevant circumstances that are likely to impair, or could appear to impair, independence. HSBC Holdings plc Annual Report on Form 20-F 353 In line with the requirements of the Hong Kong Corporate Governance Code, the Group Nomination & Corporate Governance Committee also reviewed and considered the mechanisms in place to ensure independent views and inputs are available to the Board. These mechanisms include: – having the appropriate Board and committee structure in place, including rules on the appointment and tenure of non-executive Directors; – facilitating the option of having brokers and external industry experts in attendance at Board meetings during 2024, as well as having representatives from the Group’s key regulators attend Board meetings in relation to specific regulatory items; – ensuring non-executive Directors are entitled to obtain independent professional advice relating to their personal responsibilities as a Director at the Group’s expense; – having terms of reference for each committee and the Board that provide authority to engage independent professional advisers; and – holding annual Board and committee performance reviews, with feedback sought from members on the quality of, and access to, independent external advice. Conflicts of interest The Board has an established policy and set of procedures, which are reviewed annually, to ensure that the Board’s management of Directors’ conflicts of interest is effective. The Board has the power to authorise conflicts where they arise, in accordance with the Companies Act 2006 and HSBC Holdings’ Articles of Association. Details of all Directors’ conflicts of interest are recorded in the register of conflicts. Upon appointment, new Directors are advised of the policy and procedures for managing conflicts. Directors are required to notify the Board of any actual or potential conflicts of interest and to update the Board with any changes to the facts and circumstances surrounding such conflicts. Directors are requested to review and confirm their own and their respective closely associated persons’ outside interests and appointments twice each year. The Board has considered, and authorised (with or without conditions) where appropriate, potential conflicts as they have arisen during the year in accordance with its conflicts policy and procedures. All non- executive Directors are subject to re-vetting by the Group’s compliance team on a triennial basis following appointment. As part of this re-vetting process, all conflict checks are refreshed. Non-executive Director commitments The terms and conditions of the appointments of non-executive Directors are set out in a letter of appointment, which includes the expectations of them, and the estimated time required to perform their role. Letters of appointment of each non-executive Director are available for inspection at the registered office of HSBC Holdings. Non-executive Directors serving on the Board and as a member of any committees are expected to serve up to 75 days per annum. The Senior Independent Director is expected to serve an additional 30 days per annum. Those Directors who also chair a large committee are expected to commit up to 100 days per annum, with the Group Risk Committee Chair expected to commit up to 150 days per annum. Any additional time commitment required of non-executive Directors in connection with Board and committee activities is confirmed to them separately. Board approval is required for any non-executive Director’s external commitments, with consideration given to their total time commitments, potential conflicts of interest, and regulatory and investor expectations. Directors’ indemnities The Articles of Association of HSBC Holdings contain a qualifying third-party indemnity provision, which entitles Directors and other officers to be indemnified out of the assets of HSBC Holdings against claims from third parties in respect of certain liabilities. HSBC Holdings has granted, by way of deed poll, indemnities to the Directors, including former Directors, against certain liabilities arising in connection with their position as a Director of HSBC Holdings or of any Group company. Directors are indemnified to the maximum extent permitted by law. The indemnities that constitute a ’qualifying third-party indemnity provision’, as defined by section 234 of the Companies Act 2006, remained in force for the whole of the financial year (or, in the case of Directors appointed during 2024, from the date of their appointment). The deed poll is available for inspection at the registered office of HSBC Holdings. Additionally, Directors and pension trustees have the benefit of both Directors’ and officers’ liability insurance and pension trustees’ liability insurance. Qualifying pension scheme indemnities have also been granted to the trustees of the Group’s pension schemes, which were in force for the whole of the financial year and remain in force as at the date of this report. Contracts of significance During 2024, none of the Directors had a material interest, directly or indirectly, in any contract of significance with any HSBC company. During the year, all Directors were reminded of their obligations in respect of transacting in HSBC securities and, following specific enquiry, all Directors have confirmed that they have complied with their obligations. Shareholder engagement and communication The Board is directly accountable to, and gives high priority to communicating with, HSBC’s shareholders. Information about HSBC and its activities is provided to shareholders in its Interim Reports and the Annual Report and Accounts as well as on www. hsbc .com. The Board seeks to understand investor needs through ongoing dialogue between members of the Board and institutional investors throughout the year. For examples of such engagement, see ’Directors’ engagements with key stakeholders in 2024’ on page 24 and the Group Remuneration Committee Chair’s letter on page 309 . During 2024, approximately 612 meetings were held with institutional investors and analysts globally. Our shareholder communications policy summarises how we communicate with our shareholders, including through financial reporting, general shareholder meetings, investor and analyst meetings and our website. The policy is reviewed annually by the Board, and in 2024 the Board confirmed that it was satisfied with its implementation and effectiveness. The policy can be found at www.hsbc.com/who-we- are/our-people/board-of-directors/board-responsibilities. We also publish our current and past financial results, investor presentations and shareholder information such as dividend payments and shareholder meeting details. Stock exchange announcements are also accessible on our website along with information for fixed income investors. For further details, see www.hsbc.com/investors. Directors are encouraged to develop an understanding of the views of shareholders. Enquiries from individuals on matters relating to their shareholdings and HSBC’s business are welcomed. Any individual or institutional investor can make an enquiry by contacting the investor relations team, Group Chairman, Group CEO, Group CFO and Group Company Secretary and Chief Governance Officer. Our Senior Independent Director is also available to shareholders if they have concerns that cannot be resolved or for which the normal channels would not be appropriate. They can be contacted via the Group Company Secretary and Chief Governance Officer at 8 Canada Square, London E14 5HQ. Annual General Meeting The AGM in 2025 is planned to be held in London, UK at 10:00am on Friday, 2 May 2025. Information on how to vote and participate, both in advance and on the day, can be found in the Notice of the 2025 AGM, which will be sent to shareholders on 21 March 2025 and be 354 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report available on www.hsbc.com/agm. A live webcast will be available on www.hsbc.com/agm. A recording of the proceedings will be available on www.hsbc.com/agm shortly after the conclusion of the AGM. Shareholders should monitor our website and announcements for any changes to these arrangements. Shareholders may send enquiries to the Board in writing via Company Secretary, HSBC Holdings plc, 8 Canada Square, London E14 5HQ or by sending an email to shareholderquestions@hsbc.com. General meetings and resolutions Shareholders may require the Directors to call a general meeting other than an AGM, as provided by the UK Companies Act 2006. A valid request to call a general meeting may be made by members representing at least 5% of the paid-up capital of HSBC Holdings as carries the right of voting at its general meetings (excluding any paid- up capital held as treasury shares). A request must state the general nature of the business to be dealt with at the meeting and may include the text of a resolution that may properly be moved and is intended to be moved at the meeting. At any general meeting convened on such request, no business may be transacted except that stated by the requisition or proposed by the Board. Shareholders may request the Directors to send a resolution to shareholders for consideration at an AGM, as provided by the UK Companies Act 2006. A valid request must be made by (i) members representing at least 5% of the paid-up capital of HSBC Holdings as carries the right of voting at its general meetings (excluding any paid-up capital held as treasury shares), or (ii) at least 100 members who have a right to vote on the resolution at the AGM in question and hold shares in HSBC Holdings on which there has been paid up an average sum, per member, of at least £100. The request must be received by HSBC Holdings not later than (i) six weeks before the AGM in question; or (ii) if later, the time at which the notice of AGM is published. A request may be in hard copy form or in electronic form, and must be authenticated by the person or persons making it. A request may be made in writing to HSBC Holdings at its UK address, referred to in the paragraph above or by sending an email to shareholderquestions@hsbc.com. Articles of Association The Articles of Association were last approved at the 2022 AGM. The Articles of Association can be found at www.hsbc.com/who-we-are/ our-people/board-of-directors/board-responsibilities. Events after the balance sheet date For details of events after the balance sheet date, see Note 37 on the financial statements. Change of control The Group is not party to any significant agreements that take effect, alter or terminate following a change of control of the Group. The Group does not have agreements with any Director or employee that would provide compensation for loss of office or employment resulting from a takeover bid. Branches The Group provides a wide range of banking and financial services through branches and offices in the UK and overseas. Research and development activities During the ordinary course of business, the Group develops new products and services within the global businesses. Political donations HSBC does not make any political donations or incur political expenditure within the ordinary meaning of those words. We have no intention of altering this policy. However, the definitions of political donations, political parties, political organisations and political expenditure used in the UK Companies Act 2006 are very wide. As a result, they may cover routine activities that form part of the normal business activities of the Group and are an accepted part of engaging with stakeholders. To ensure that neither the Group nor any of its subsidiaries inadvertently breaches the UK Companies Act 2006, authority is sought from shareholders at the AGM to make political donations. HSBC provides administrative support to two political action committees (’PACs’) in the US funded by voluntary political contributions by eligible employees. We do not control the PACs, and all decisions regarding the amounts and recipients of contributions are directed by a voluntary Board Finance Committee, which consists of contributing eligible employees. The PACs recorded combined political donations of $124,450 during 2024 (2023: $110,004). Charitable contributions For details of charitable contributions, see page 70 . Internal control The Board is responsible for monitoring the Group’s risk management and internal control systems, determining the level and type of risks the Group is willing to take in achieving its strategic objectives, and reviewing the effectiveness of these procedures on an annual basis. To meet this requirement and to discharge its obligations under the FCA Handbook and the PRA Rulebook, procedures have been designed to provide reasonable assurance against material misstatement, errors, losses or fraud. They are designed to provide effective internal control within the Group and accord with the Financial Reporting Council‘s guidance for Directors, issued in 2014, on risk management, internal control and related financial and business reporting. The procedures have been in place throughout the year and up to 19 February 2025, the date of publication of the Annual Report and Accounts 2024. The Board, the GRC and the GAC monitored the effectiveness of the Group’s system of risk management and internal control during the year through regular updates on the operation of the Group's internal controls, supplemented by reviews of these controls by the second line of defence and internal audit, and the external auditors. In particular, this focused on the Group’s regulatory remediation and change programmes, and involved working closely with management to better prioritise and understand where there are key interdependencies. These reviews enabled to the Board to perform an annual review of effectiveness, identifying no material weaknesses as at the year-end. To support the work of the Board, the GRC and the GAC in discharging their responsibilities in this regard, assurance was also provided by executive management confirming that a risk assessment had been undertaken and controls were in place to mitigate the risks arising from the Group’s key activities. Necessary actions will be taken to remedy any failings or weaknesses identified from these activities on an ongoing basis. In 2025, continued focus will be placed on the quality and timeliness of data used to inform management decisions and support oversight of emerging risks and potential risks arising from new products and offerings. In preparation for the Board’s forthcoming responsibility under the 2024 UK Corporate Governance Code, the Board approved changes to the scope of the GAC’s responsibilities in relation to internal controls to extend these to cover all internal controls and, once defined, all material controls including financial, operational, reporting and compliance controls. HSBC Holdings plc Annual Report on Form 20-F 355 The key risk management and internal control procedures include the following: The HSBC Book In 2024, the HSBC Book replaced the Global Principles document and is situated at the top of the HSBC document hierarchy. It underpins the key principles, policies and procedures that are fundamental to the Group’s risk management structure. It informs and connects our purpose, ambition, strategy and values, guiding us to make responsible decisions aligned to our risk culture and risk management approach, to do the right thing, and to treat our customers and our colleagues fairly at all times. Risk management framework The risk management framework supports our HSBC Book. It outlines the key principles and practices that we employ in managing material risks. It applies to all categories of risk and supports a consistent approach in identifying, assessing, managing and reporting the risks we accept and incur in our activities. Delegation of authority within limits set by the Board Subject to certain matters reserved for the Board, the Group CEO has been delegated authority limits and powers within which to manage the day-to-day affairs of the Group. A delegation of authority framework is in place providing a Group structure within which the Board and its subsidiaries can manage their delegated powers. These delegated authorities can be used for the approval, signing and execution of specific written agreements and documents such as procurement contracts. The delegation of authority framework is adopted on a legal entity basis via a board resolution which is reviewed annually. Matters not covered by the delegation of authority framework can be set out in a separate board resolution, powers of attorney or the relevant Group policy with clear systems of control that are appropriate to the business or function. Authorities to enter into credit and market risk exposures are delegated with limits to line management of Group companies in line with Group policy. Credit and market risks are measured and reported at subsidiary company level and aggregated for risk concentration analysis on a Group-wide basis. Risk identification and monitoring Systems and procedures are in place to identify, assess, control and monitor the material risk types facing HSBC as set out in the risk management framework. The Group‘s risk measurement and reporting systems are designed to help ensure that material risks are captured with all the attributes necessary to support well-founded decisions, that those attributes are accurately assessed and that information is delivered in a timely manner for those risks to be successfully managed and mitigated. Changes in market conditions/ practices Processes are in place to identify new risks arising from changes in market conditions/practices or customer behaviours, which could expose the Group to heightened risk of loss or reputational damage. The Group employs both a top and emerging risks process to provide forward-looking views of issues with the potential to threaten the execution of our strategy or operations over the medium to long term. We remain committed to investing in the reliability and resilience of our IT systems and critical services, including those provided by third parties, that support all parts of our business. We do so to help protect our customers, affiliates and counterparties, and to help ensure that we minimise any disruption to services that could result in reputational and regulatory consequences. In our approach to defend against these threats, we invest in business and technical controls to help us detect, manage and recover from issues, including data loss, in a timely manner. We continue our focus on the quality and timeliness of the data used to inform management decisions, through measures such as early warning indicators, prudent active risk management of our risk appetite, and ensuring regular communication with our Board and other key stakeholders. Responsibility for risk management All employees are responsible for identifying and managing risk within the scope of their role as part of the three lines of defence model. This is an activity-based model to delineate management accountabilities and responsibilities for risk management and the control environment. The second line of defence sets the policy and guidelines for managing specific risk areas, provides advice and guidance in relation to the risk, and challenges the first line of defence (the risk owners) on effective risk management. The Board delegated authority to the GAC to annually review the independence, autonomy and effectiveness of the Group’s policies and procedures on whistleblowing, including the procedures for the protection of staff who raise concerns of detrimental treatment. Strategic plans Strategic plans are prepared for global businesses, global functions and geographical regions within the framework of the Group’s overall strategy. Financial resource plans, informed by detailed analysis of risk appetite describing the types and quantum of risk that the Group is prepared to take in executing its strategy, are prepared and adopted by all major Group operating companies and set out the key business initiatives and the likely financial effects of those initiatives. Internal control over financial reporting HSBC is required to comply with section 404 of the US Sarbanes- Oxley Act of 2002 and assess its effectiveness of internal control over financial reporting at 31 December 2024. In 2014, the GAC endorsed the adoption of the principles of the Committee of Sponsoring Organizations of the Treadway Commission (’COSO’) 2013 framework for the monitoring of risk management and internal control systems to satisfy the requirements of section 404 of the Sarbanes- Oxley Act. The primary mechanism through which comfort over risk management and internal control systems is achieved is through annual assessments of the effectiveness of controls to manage risk, and the reporting of issues on a regular basis through the various risk management and risk governance forums, including regular updates to GAC. The key risk management and internal control procedures over financial reporting include the following: Entity level controls Entity level controls are a defined suite of internal controls that have a pervasive influence over the entity as a whole and meet the principles of the COSO framework. They include controls related to the control environment, such as the Group’s values and ethics, the promotion of effective risk management and the overarching governance exercised by the Board and its non-executive committees. The design and operational effectiveness of entity level controls are assessed on an ongoing basis. If issues are significant to the Group, they are escalated to the GRC and / or the GAC. Process level transactional controls Key process level controls that mitigate the risk of financial misstatement are identified, recorded and monitored in accordance with the risk framework. This includes the identification and assessment of relevant control issues against which action plans are tracked through to remediation. Further details of HSBC’s approach to risk management can be found on page 144 . 356 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report Financial reporting controls The Group’s financial reporting process is controlled using documented accounting policies and reporting formats, supported by detailed instructions and guidance on reporting requirements, issued to all reporting entities within the Group in advance of each reporting period end. The submission of financial information from each reporting entity is supported by a certification by the responsible financial officer and analytical review procedures at reporting entity and Group levels. Group Disclosure and Controls Committee Chaired by the Group CFO, the Group Disclosure and Controls Committee supports the discharge of the Group’s obligations under relevant legislation and regulation including the UK and Hong Kong listing rules, the UK Market Abuse Regulation and US Securities and Exchange Commission rules. In so doing, the Group Disclosure and Controls Committee is empowered to determine whether a new event or circumstance should be disclosed, including the form and timing of such disclosure, and review certain material disclosures made or to be made by the Group. The membership of the Group Disclosure and Controls Committee consists of senior management, including the Group CFO, Group Chief Risk and Compliance Officer; Group Chief Legal Officer; and Group Chief People and Governance Officer. The Group’s external auditors are standing attendees, while the Group's brokers and external legal counsel are consulted on relevant matters and attend as required. The integrity of disclosures is underpinned by structures and processes within the Global Finance and Group Risk and Compliance functions that support rigorous analytical review of financial reporting and the maintenance of proper accounting records. As required by the Sarbanes-Oxley Act, the Group CEO and the Group CFO have certified that the Group’s disclosure controls and procedures were effective as at the end of the period covered by the Annual Report and Accounts 2024. The annual review of the effectiveness of the Group’s system of risk management and internal control over financial reporting was conducted with reference to the COSO 2013 framework. Based on the assessment performed, the Directors concluded that for the year ended 31 December 2024, the Group’s internal control over financial reporting was effective. PwC has audited the effectiveness of HSBC’s internal control over financial reporting and has given an unqualified opinion. Other information included in the Annual Report and Accounts 2024 We include other non-statutory information in the Annual Report and Accounts to enable a broader perspective of our performance for the period, including ESG and regulatory capital and liquidity information. On page 41 we highlight the challenges we face in our sustainability and climate reporting alongside the key changes we have made to our 2024 climate disclosures. Strengthening our global regulatory reporting processes with an aim to enhance data, consistency, and controls remains a key priority for the Group and regulatory authorities. See page 231 for further details. The GAC provides oversight to our reporting across these areas, including the disclosure risks in relation to sustainability and climate reporting, and monitoring of the programme of work to address the quality and reliability of regulatory reporting. See page 295 for further details. Going concern The Directors considered it appropriate to prepare the financial statements on a going concern basis. In making the going concern assessment, the Directors have considered a wide range of detailed information relating to present and future conditions, including future projections for profitability, liquidity, capital requirements and capital resources. In carrying out their assessment of the principal risks (as detailed on page 148 of this annual report on Form 20-F), the Directors considered a wide range of information including: – details of the Group’s business and operating models, and strategy (see page 14 in this annual report on Form 20-F); – details of the Group’s approach to managing risk and allocating capital; – a summary of the Group’s financial position considering performance, its ability to maintain minimum levels of regulatory capital, liquidity funding and the minimum requirements for own funds and eligible liabilities over the period of the assessment. Notable are the risks which the Directors believe could adversely impact the Group’s future results or operations; – enterprise risk reports, including the Group’s risk appetite profile (see page 144 of this annual report on Form 20-F) and top and emerging risks (see page 148 of this annual report on Form 20-F); – the impact on the Group due to the Russia-Ukraine war and conflict in the Middle East; uncertainty around Hong Kong and mainland China’s commercial real estate sector, potential trade restrictions and tariff increases and strained economic and diplomatic relations between China and the US, the UK, the EU and other countries; – reports and updates regarding regulatory and internal stress testing. In 2024 the Bank of England completed their Desk Based Stress Test exercise to assess the resilience of the UK banking system. The stress scenario explored the potential impacts of a number of adverse macroeconomic conditions, including global aggregate demand and supply shock, global commodity prices and supply-chain disruptions from increased geopolitical tensions, uncertain inflation across advanced economies and rapidly changing interest rates. Additionally, HSBC completed the 2024 Group-wide internal stress test, which explored the impact of two contrasting scenarios depicting severe macroeconomic conditions over a five-year period, reflecting banking sector strains and global economic stress. The results of both these exercises indicated the Group is sufficiently capitalised to withstand severe but plausible adverse stress; – the results of our 2024 internal climate scenario analysis exercise further demonstrate the Group is sufficiently capitalised to withstand severe stress. Further details of the insights from the 2024 climate scenario analysis are explained from page 253 of thi s annual report on Form 20-F; – reports and updates from management on risk-related issues selected for in-depth consideration; – reports and updates on regulatory developments; – legal proceedings and regulatory matters set out in Note 35 of the financial statements in this annual report on Form 20-F; and – reports and updates from management on the operational resilience of the Group. Employees At 31 December 2024, HSBC had a total workforce equivalent to 211,000 full-time employees compared with 221,000 at the end of 2023. Our main centres of employment were India with approximately 44,000 employees, the UK with 35,000, mainland China with 33,000, Hong Kong with 27,000, and Mexico with 16,000. Our business spans many cultures, communities and continents. We aspire to provide a high-performing environment where our colleagues can fulfil their potential by building their skills and capabilities while focusing on the development of a diverse and inclusive culture. We use employee surveys to assess progress and make changes. We want to provide an open culture, where our colleagues feel connected and supported to speak up, and where our leaders encourage and use feedback. Where we make organisational changes, we support our colleagues, in particular where there are job impacts. HSBC Holdings plc Annual Report on Form 20-F 357 Employee relations We consult with and, where appropriate, negotiate with employee representative bodies where we have them. It is our policy to maintain well-developed communications and consultation programmes with all employee representative bodies. There have been no material disruptions to our operations from labour disputes during the past five years. We are committed to complying with the applicable employment laws and regulations in the jurisdictions in which we operate, including in relation to working hours and rest periods. HSBC’s employment practices and relations policy provides the framework and controls through which we seek to uphold that commitment. Inclusion Our customers, colleagues and communities span many cultures and continents. We value difference and believe that an inclusive culture makes us stronger. We are dedicated to building a connected workforce where everyone feels a sense of belonging. We expect all colleagues at HSBC to treat each other with dignity and respect to ensure an inclusive environment. Our policies make it clear that we do not tolerate unlawful discrimination, bullying or harassment on any grounds. We are transparent in sharing our data through external disclosures and we participate in benchmarking to measure our progress across the industry. Our approach to inclusion is set out on page 62 alongside our ambitions and progress. For further details of our representation data, pay gap data, and actions, see www.hsbc.com/who-we-are/our-people/inclusion-at-hsbc and the ESG Data Pack at www.hsbc.com/esg Employment of people with a disability We strongly believe in providing equal opportunities for our employees. The employment of people with a disability is included in this commitment. We are committed to retaining disabled employees in the workplace and to providing reasonable adjustments to enable this. Employee development Employee development energises our colleagues for growth and helps to equip them with the skills they need today whilst also preparing them to meet future challenges. We remain committed to delivering a high-quality learning experience by adopting a data-driven approach that targets our learning investment to meet the most critical skill needs. By leveraging our strategic workforce blueprints, we have focused our efforts on critical skill shifts, including digitally enabling our frontline colleagues and developing the sustainability and wealth expertise of our relationship managers, providing a variety of learning opportunities through our Enterprise Skills Academies. We have launched our new AI Academy to support advanced skills development aligned with HSBC’s AI strategy, expanded our 'Doing Business in India and China' programmes to include Saudi Arabia, and increased our focus on building capabilities beyond foundational skills through our Sustainability Academy. In our global Wealth and Personal Banking business we have focused our attention on developing customer centricity and product expertise, and we have created opportunities for colleagues to develop new skills and collaborate more broadly through our transition to a value stream delivery model as part of our bank wide Digital Acceleration Programme. We remain committed to our global mandatory training to complete annually, as it is essential for shaping our culture and maintaining a focus on critical issues, such as sustainability and financial crime risk. In line with this commitment, we have maintained our focus on senior leaders by launching new programs centred on Enterprise Risk Leadership, which are designed to equip them with the skills necessary to navigate an evolving risk environment. Effective leadership is essential for empowering our colleagues to develop critical skills, fostering a robust talent pipeline, and supporting our strategic ambitions. To facilitate this, we have introduced the Career Academy, which enables our colleagues to explore their aspirations, and continued to evolve our flagship Enterprise Leadership Programs, including uGrow, Accelerating Women’s Leadership, and Accelerating into Leadership. We have also expanded our Managing Director leadership offering, supported by a Leadership 360 survey, to ensure comprehensive development and alignment with our strategic goals. Health and safety We are committed to providing a safe and healthy working environment for everyone. We have adopted global policies, mandatory procedures, and incident and information reporting systems across the organisation that reflect our core values and are aligned to international standards. Our global health and safety performance is subject to ongoing monitoring and assurance to ensure we are compliant with relevant laws and regulations. Our chief operating officers have overall responsibility for engendering a positive health and safety culture and ensuring that global policies, procedures and systems are put into practice locally. They also have responsibility for ensuring all local legal requirements are met. We delivered a range of activities in 2024 to help us understand and manage our health and safety risks: – We achieved the WELL Health and Safety Rating from the International WELL Building Institute at 54 of our global offices as a demonstration of our commitment to the provision of safe and healthy workplaces for our employees, customers and stakeholders. – We reinforced our advice and risk assessment and control methodology on working from home for employees adopting a hybrid work style, providing more awareness and best practices on good ergonomics and well-being. – We delivered health and safety training and awareness to 228,000 of our employees and contractors globally, ensuring roles and responsibilities were clear and understood. – We completed the annual safety inspection on all of our buildings globally, to ensure we were meeting our standards and continuously improving our safety performance. – We maintained measures in our workplaces globally to minimise the risks from the spread of respiratory disease, including through the provision of hand sanitiser, improved ventilation and guidance on good hygiene practices. – We extended the reach of our Workplace Adjustments programme to include all colleagues in India, providing tools and technologies which contribute to making work-life manageable for employees with disability (including physical or sensory), long term / mental health condition or a neurodiversity, and will continue the expansion of this programme to further Regions. – We continued to hold health & safety themed awareness campaigns and facilitate CPR and first aid training for our colleagues. – We continued to provide our guidance and training programme for our construction partners, focusing on our key markets globally to reduce the likelihood of accidents occurring by helping them understand and deliver industry-leading health and safety performance. More than 7,200 construction workers received safety passport training across 13 countries. – In 2024, we achieved full implementation of the Eat Well Live Well programme across 100% of catered HSBC sites, driving global healthy food sales to 32% with over 10% of all dishes sold globally being plant-based. These results were supported by monthly Eat Well Live Well events, and virtual teaching kitchens accessible to all employees. 358 HSBC Holdings plc Annual Report on Form 20-F Report of the Directors | Corporate governance report – Protection of our colleagues and operations is of critical importance, and we have effective controls in place to protect our people from natural disasters (such as storms and earthquakes). In 2024, there were 40 named storms that passed over 3,127 of our buildings, resulting in no injuries and only a minor impact on 3 of our buildings. Employee health and safety 2024 2023 2022 Rate of workplace fatalities per 100,000 employees — — — Number of major injuries to employees 1 14 12 7 All injury rate per 100,000 employees 91 110 70 Lost days due to work injury 335 594 485 1 Fractures, dislocation, concussion, loss of consciousness, overnight admission to hospital. Remuneration HSBC’s pay and performance strategy is designed to reward competitively the achievement of long-term sustainable performance and attract and motivate the very best people, regardless of gender, ethnicity, age, disability or any other factor unrelated to performance or experience with the Group, while performing their role in the long- term interests of our stakeholders. For further details of the Group’s approach to remuneration, see page 332 . Employee share plans Summaries of the share options and share awards granted, exercised/ vested or lapsed during the year and other details required to be disclosed pursuant to Chapter 17 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including detailed summaries of the HSBC share plans, are available on our website at www.hsbc.com/investors/results-and-announcements and on the website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk, or can be obtained upon request from the Company Secretary, 8 Canada Square, London E14 5HQ. Particulars of options held by Directors of HSBC Holdings are set out on page 341 . Note 5 on the financial statements gives details of share-based payments, including discretionary awards of shares granted under HSBC share plans. HSBC Holdings plc Annual Report on Form 20-F 359 Statement of compliance The statement of corporate governance practices set out on pages 266 to 359 and the information referred to therein constitutes the ’Corporate governance report’ and ’Report of the Directors’ of HSBC Holdings for 2024. Further details of the relevant corporate governance codes, role profiles and policies can be obtained from the websites referenced in the table below. The websites referred to do not form part of this report. Relevant corporate governance codes, role profiles and policies UK Corporate Governance Code www.frc.org.uk Hong Kong Corporate Governance Code (set out in Appendix C1 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (’HKEx’)) www.hkex.com.hk Descriptions of the roles and responsibilities of the: –  Group Chairman –  Group Chief Executive Officer –  Senior Independent Director –  Board www.hsbc.com/who-we-are/our- people/board-of-directors/board- responsibilities Board and senior management www.hsbc.com/who-we-are/our- people Roles and responsibilities of the Board’s committees www.hsbc.com/who-we-are/our- people/board-of-directors/board- committees Board’s policies on: –  diversity and inclusion –  shareholder communication –  human rights –  remuneration practices and governance www.hsbc.com/who-we-are/our- people/board-of-directors/board- responsibilities Global Internal Audit Charter www.hsbc.com/who-we-are/esg- and-responsible-business/ governance/internal-control HSBC is subject to corporate governance requirements in both the UK and Hong Kong. During 2024, HSBC complied with the provisions and requirements of both the UK and Hong Kong Corporate Governance Codes. Under the Hong Kong Corporate Governance Code, the audit committee should be responsible for the oversight of all risk management and internal control systems. During 2024, the Board approved changes to the scope of the Group Audit Committee’s responsibilities in relation to internal controls to extend these to cover oversight of the effectiveness of all internal controls. HSBC’s Group Risk Committee retains oversight of internal controls relating to risk management and risk management systems and provides input to the Group Audit Committee on these. HSBC Holdings has codified obligations for transactions in Group securities in accordance with the requirements of the UK Market Abuse Regulation and the rules governing the listing of securities on HKEx. The Group has been granted certain waivers by HKEx from strict compliance with the rules that take into account accepted practices in the UK, particularly in respect of employee share plans. During the year, all Directors were reminded of their obligations in respect of transacting in HSBC Group securities. Following specific enquiry all Directors have confirmed that they have complied with their obligations. The Group Audit Committee has reviewed and provided assurance to support the HSBC Holdings Board ’ s approval and publication of the Annual Report and Accounts 2024. On behalf of the Board Sir Mark E Tucker Group Chairman HSBC Holdings plc Registered number 617987 19 February 2025 360 HSBC Holdings plc Annual Report on Form 20-F Financial statements The financial statements provide detailed information and notes on our income, balance sheet, cash flows and changes in equity, alongside a report from our independent auditors. 361 Independent auditors’ report to the members of HSBC Holdings plc 363 Financial statements 363 – Consolidated income statement 364 – Consolidated statement of comprehensive income 365 – Consolidated balance sheet 366 – Consolidated statement of changes in equity 369 – Consolidated statement of cash flows 371 – HSBC Holdings financial statements 375 Notes on the financial statements Hong Kong, 2019. Colleague Collaboration. HSBC Holdings plc Annual Report on Form 20-F 361 Report of Independent Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of HSBC Holdings plc Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of HSBC Holdings plc and its subsidiaries (the “Group”) as of 31 December 2024 and 2023, and the related consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for each of the three years in the period ended 31 December 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Group’s internal control over financial reporting as of 31 December 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Group as of 31 December 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended 31 December 2024 in conformity with (i) International Financial Reporting Standards as issued by the International Accounting Standards Board, (ii) UK-adopted International Accounting Standard and (iii) International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies to the European Union. Also in our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of 31 December 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Group's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management’s assessment of internal controls over financial reporting on page 355 of this Form 20-F. Our responsibility is to express opinions on the Group's consolidated financial statements and on the Group's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (i) relate to accounts or disclosures that are material to the consolidated financial statements; and (ii) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Measurement of expected credit losses As described in Note 1.2 (i) to the consolidated financial statements, expected credit losses (‘ECL’) are recognised for loans and advances to banks and customers, non-trading reverse repurchase agreements, other financial assets held at amortised cost, debt instruments measured at fair value through other comprehensive income and certain loan commitments and financial guarantee contracts. As disclosed by management, the Group's allowance for ECL was $10.2bn at 31 December 2024. The assessment of credit risk and the estimation of ECL are 362 HSBC Holdings plc Annual Report on Form 20-F Report of Independent Registered Public Accounting Firm probability-weighted and incorporate information about past events, current conditions and forecasts of future economic conditions at the reporting date. Management calculates ECL using three main components: a probability of default (‘PD’), a loss given default (‘LGD’) and the exposure at default (‘EAD’). As disclosed by management, the recognition and measurement of ECL involves the use of significant judgement and estimation. Management form multiple economic scenarios, apply these forecasts to credit risk models to estimate future credit losses, and probability weight the results to determine an ECL estimate. The ECL for wholesale stage 3 exposures is determined on an individual basis using discounted cash flow methodologies. At the end of 2024, risks to the economic outlook included a number of significant geopolitical issues. In addition, the mainland China commercial real estate (‘CRE’) portfolio continues to face challenges as market fundamentals remain weak and refinancing risks continue. The principal considerations for our determination that performing procedures relating to the measurement of ECL is a critical audit matter are the significant judgements by management in developing the assumptions for: (i) multiple economic scenarios and the weighting of those scenarios; and (ii) the discounted cash flow projections for certain material credit impaired exposures in relation to the mainland China CRE portfolio. This led to a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating audit evidence obtained. The audit effort involved the use of professionals with specialised skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the measurement of ECL. These procedures also included, amongst others, testing management’s process for estimating ECL through: (i) evaluating the appropriateness of the ECL model methodologies applied by management; (ii) evaluating the reasonableness of certain economic scenarios and weightings; (iii) evaluating the reasonableness of discounted cash flow projections for certain material credit impaired exposures in relation to the mainland China CRE portfolio; (iv) testing the completeness and accuracy of certain input data that is used by management to determine ECL; and (v) evaluating the disclosures made in the consolidated financial statements in relation to the measurement of ECL. Professionals with specialised skills and knowledge assisted in testing the appropriateness of model methodologies, assessing the reasonableness of the selection and weighting of economic scenarios and testing the reasonableness of discounted cash flow projections for certain material credit impaired exposures in relation to the mainland China CRE portfolio. Impairment assessment of investment in Bank of Communications co., Limited (‘BoCom’) As described in Note 1.2(a) and 18 to the consolidated financial statements, the carrying value of the Group's investment in BoCom is $22.4bn at 31 December 2024. As disclosed by management, the investment in BoCom is assessed at each reporting date and tested for impairment when there is an indication that the investment may be impaired, by comparing the recoverable amount of the relevant investment to its carrying amount. The recoverable amount is determined by a value in use (‘VIU’) calculation. As disclosed by management, there is significant judgement in determining the VIU, and in particular estimating the present value of cash flows expected to arise from continuing to hold the investment, based on a number of assumptions.  Management has concluded there is no indication of further  or reversal of  impairment  since 31 December 2023. The VIU calculation uses discounted cash flow projections based on management’s best estimates of future earnings available to ordinary shareholders. The significant assumptions used were discount rate, operating income growth rate, cost-income ratio, ECL as a percentage of loans and advances to customers, risk-weighted assets as a percentage of total assets, loans and advances to customers growth rate, capital requirements for capital adequacy ratio and tier 1 capital adequacy ratio, and long-term effective tax rate, long-term profit growth rate and long-term asset growth rate. The principal considerations for our determination that performing procedures relating to the impairment assessment of the investment in BoCom is a critical audit matter are: (i) the significant judgement by management when determining significant assumptions for the discount rate, operating income growth rate, cost-income ratio, ECL as a percentage of loans and advances to customers, risk-weighted assets as a percentage of total assets, loans and advances to customers growth rate, capital requirements for capital adequacy ratio and tier 1 capital adequacy ratio, long-term effective tax rate, long-term profit growth rate and long-term asset growth rate; (ii) a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating management's estimate of the VIU and evaluating audit evidence; and (iii) the audit effort involved the use of professionals with specialised skills and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s impairment assessment of the investment in BoCom. These procedures also included, amongst others: (i) evaluating management’s VIU determination and aforementioned underlying significant assumptions; (ii) developing an independent range for discount rate; (iii) evaluating the appropriateness of the methodology used to estimate the VIU; (iv) testing inputs used in the determination of the significant assumptions; and (v) evaluating the disclosures made in the consolidated financial statements in relation to BoCom. Professionals with specialised skill and knowledge were used to assist in assessing the VIU methodology and developing an independent range for discount rate. /s/ PricewaterhouseCoopers LLP London, United Kingdom 20 February 2025 We have served as the Group's auditor since 2015. HSBC Holdings plc Annual Report on Form 20-F 363 Financial statements Consolidated income statement for the year ended 31 December 2024 2024 2023 2022 Notes * $m $m $m Net interest income 32,733 35,796 30,377 –  interest income 1,2 108,631 100,868 52,826 –  interest expense 3 ( 75,898 ) ( 65,072 ) ( 22,449 ) Net fee income 2 12,301 11,845 11,770 –  fee income 16,266 15,616 15,124 –  fee expense ( 3,965 ) ( 3,771 ) ( 3,354 ) Net income from financial instruments held for trading or managed on a fair value basis 4 3 21,116 16,661 10,278 Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss 3 5,901 7,887 ( 13,831 ) Insurance finance (expense)/income 4 ( 5,978 ) ( 7,809 ) 13,799 Insurance service result 4 1,310 1,078 809 –  insurance revenue 2,752 2,259 1,977 –  insurance service expense ( 1,442 ) ( 1,181 ) ( 1,168 ) Gain on acquisition 5 — 1,591 — Gains/(losses) recognised on sale of business operations 6 ( 1,752 ) ( 61 ) ( 2,678 ) Other operating income/(expense) 7 223 ( 930 ) 96 Net operating income before change in expected credit losses and other credit impairment charges 8 65,854 66,058 50,620 Change in expected credit losses and other credit impairment charges ( 3,414 ) ( 3,447 ) ( 3,584 ) Net operating income 62,440 62,611 47,036 Employee compensation and benefits 5 ( 18,465 ) ( 18,220 ) ( 18,003 ) General and administrative expenses ( 10,498 ) ( 10,383 ) ( 10,848 ) Depreciation and impairment of property, plant and equipment and right-of-use assets 9 ( 1,845 ) ( 1,640 ) ( 2,149 ) Amortisation and impairment of intangible assets ( 2,235 ) ( 1,827 ) ( 1,701 ) Total operating expenses ( 33,043 ) ( 32,070 ) ( 32,701 ) Operating profit 29,397 30,541 14,335 Share of profit in associates and joint ventures 18 2,912 2,807 2,723 Impairment of interest in associate 18 — ( 3,000 ) — Profit before tax 32,309 30,348 17,058 Tax expense 7 ( 7,310 ) ( 5,789 ) ( 809 ) Profit for the year 24,999 24,559 16,249 Attributable to: –  ordinary shareholders of the parent company 22,917 22,432 14,346 –  preference shareholders of the parent company — — — –  other equity holders 1,062 1,101 1,213 –  non-controlling interests 1,020 1,026 690 Profit for the year 24,999 24,559 16,249 $ $ $ Basic earnings per ordinary share 9 1.25 1.15 0.72 Diluted earnings per ordinary share 9 1.24 1.14 0.72 For Notes on the financial statements, see page 375 . 1 Interest income includes $ 93,388 m (2023: $ 88,657 m ; 2022: $ 45,994 m ) of interest recognised on financial assets measured at amortised cost and $ 15,273 m (2023: $ 12,134 m ; 2022: $ 6,293 m ) of interest recognised on financial assets measured at fair value through other comprehensive income. It also includes a net $ 237 m los s related to the early redemption of legacy securities. 2 Interest income is calculated using the effective interest method and comprises interest recognised on financial assets measured at either amortised cost or fair value through other comprehensive income. 3 Interest expense includes $ 72,594 m (2023: $ 62,095 m ; 2022: $ 20,798 m ) of interest on financial instruments, excluding interest on debt instruments issued by HSBC for funding purposes that are designated under the fair value option to reduce an accounting mismatch and on derivatives managed in conjunction with those debt instruments included in interest expense. 4 Includes a $ 255 m gain ( 2023: $ 315 m loss) on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada and a $ 114 m mark-to-market gain (2023 : nil ) on interest rate hedging of the portfolio of retained loans post sale of our retail banking business in France. 5 G ain recognised in respect of the acquisition of SVB UK. 6 This line item has been updated to include amounts from Other operating income relating to all sales of business operations; in the 2023 Annual Report and Accounts, this line item only reflected the disposal of our France retail banking business . The amount in 2024 includes a $ 1.0 b n loss on disposal and a $ 5.2 b n loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This was partly offset by a gain of $ 4.6 b n, inclusive of the recycling of $ 0.6 b n in foreign currency translation reserve losses and $ 0.4 b n of other reserves losses but excluding the $ 255 m gain on the foreign exchange hedging (see footnote 4 above) on the sale of our banking business in Canada. The amount in 2023 primarily reflected losses due to restrictions impacting the recoverability of assets in Russia, partly offset by a gain on s ale of our retail banking operations in France. The amount in 2022 included losses from classifying businesses as held for sale as part of a broader restructuring of our European business. 7 Other operating income/(expense) includes a loss on net monetary positions of $ 1,187 m (2023: $ 1,667 m; 2022: $ 678 m) as a result of applying IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. 8 Net operating income before change in expected credit losses and other credit impairment charges also referred to as revenue. 9 Includes depreciation of the right-of-use assets of $ 711 m (2023: $ 663 m ; 2022: $ 717 m ). 364 HSBC Holdings plc Annual Report on Form 20-F Financial statements Consolidated statement of comprehensive income for the year ended 31 December 2024 2024 2023 2022 $m $m $m Profit for the year 24,999 24,559 16,249 Other comprehensive income/(expense) Items that will be reclassified subsequently to profit or loss when specific conditions are met: Debt instruments at fair value through other comprehensive income 163 2,599 ( 7,232 ) –  fair value gains/(losses) 41 2,381 ( 9,618 ) –  fair value losses/(gains) transferred to the income statement on disposal 69 905 ( 18 ) –  expected credit (recoveries)/losses recognised in the income statement ( 6 ) 59 56 –  disposal of subsidiary 85 — — –  income taxes ( 26 ) ( 746 ) 2,348 Cash flow hedges ( 52 ) 2,953 ( 3,655 ) –  fair value gains/(losses) ( 282 ) 2,534 ( 4,207 ) –  fair value (gains)/losses reclassified to the income statement ( 135 ) 1,463 ( 758 ) –  disposal of subsidiary 262 — — –  income taxes 103 ( 1,044 ) 1,310 Share of other comprehensive income/(expense) of associates and joint ventures 462 47 ( 367 ) –  share for the year 462 47 ( 367 ) Net finance income/(expenses) from insurance contracts ( 142 ) ( 364 ) 1,775 –  before income taxes ( 191 ) ( 491 ) 2,393 –  income taxes 49 127 ( 618 ) Exchange differences 833 ( 204 ) ( 9,918 ) –  foreign exchange losses reclassified to the income statement on disposal of a foreign operation 5,816 — — –  other exchange differences ( 4,983 ) ( 204 ) ( 9,918 ) Items that will not be reclassified subsequently to profit or loss: Fair value gains on property revaluation 5 1 280 Remeasurement of defined benefit asset/(liability) ( 228 ) ( 314 ) ( 1,031 ) –  before income taxes ( 342 ) ( 413 ) ( 1,723 ) –  income taxes 114 99 692 Changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk ( 439 ) ( 1,219 ) 1,922 –  before income taxes ( 579 ) ( 1,617 ) 2,573 –  income taxes 140 398 ( 651 ) Equity instruments designated at fair value through other comprehensive income 99 ( 120 ) 107 –  fair value gains/(losses) 141 ( 120 ) 107 –  income taxes ( 42 ) — — Effects of hyperinflation 1,239 1,604 877 Other comprehensive income/(expense) for the year, net of tax 1,940 4,983 ( 17,242 ) Total comprehensive income/(expense) for the year 26,939 29,542 ( 993 ) Attributable to: –  ordinary shareholders of the parent company 24,833 27,397 ( 2,810 ) –  other equity holders 1,062 1,101 1,213 –  non-controlling interests 1,044 1,044 604 Total comprehensive income/(expense) for the year 26,939 29,542 ( 993 ) HSBC Holdings plc Annual Report on Form 20-F 365 Consolidated balance sheet at 31 December 2024 At 31 Dec 2024 31 Dec 2023 Notes * $m $m Assets Cash and balances at central banks 267,674 285,868 Hong Kong Government certificates of indebtedness 42,293 42,024 Trading assets 11 314,842 289,159 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 14 115,769 110,643 Derivatives 15 268,637 229,714 Loans and advances to banks 102,039 112,902 Loans and advances to customers 930,658 938,535 Reverse repurchase agreements – non-trading 252,549 252,217 Financial investments 16 493,166 442,763 Assets held for sale 23 27,234 114,134 Prepayments, accrued income and other assets 1 22 152,740 171,597 Current tax assets 1,313 1,536 Interests in associates and joint ventures 18 28,909 27,344 Goodwill and intangible assets 21 12,384 12,487 Deferred tax assets 7 6,841 7,754 Total assets 3,017,048 3,038,677 Liabilities Hong Kong currency notes in circulation 42,293 42,024 Deposits by banks 73,997 73,163 Customer accounts 1,654,955 1,611,647 Repurchase agreements – non-trading 180,880 172,100 Trading liabilities 24 65,982 73,150 Financial liabilities designated at fair value 25 138,727 141,426 Derivatives 15 264,448 234,772 Debt securities in issue 26 105,785 93,917 Liabilities of disposal groups held for sale 23 29,011 108,406 Accruals, deferred income and other liabilities 1 27 130,340 143,901 Current tax liabilities 1,729 2,777 Insurance contract liabilities 4 107,629 120,851 Provisions 28 1,724 1,741 Deferred tax liabilities 7 1,317 1,238 Subordinated liabilities 29 25,958 24,954 Total liabilities 2,824,775 2,846,067 Equity Called up share capital 32 8,973 9,631 Share premium account 32 14,810 14,738 Other equity instruments 19,070 17,719 Other reserves ( 10,282 ) ( 8,907 ) Retained earnings 152,402 152,148 Total shareholders’ equity 184,973 185,329 Non-controlling interests 19 7,300 7,281 Total equity 192,273 192,610 Total liabilities and equity 3,017,048 3,038,677 * For Notes on the financial statements, see page 375 . 1 In 2023 ‘Items in the course of collection from other banks’ ( $ 6.3 b n) were presented on the face of the balance sheet but are now reported within ‘Prepayments, accrued income and other assets’ in the Annual Report and Accounts 2024. Similarly, ‘Items in the course of transmission to other banks’ ( $ 7.3 b n) are now presented within ‘Accruals, deferred income and other liabilities’. The accompanying notes on pages 375 to 460 and the audited sections in the Risk review on pages 143 to 265 and ‘Directors’ remuneration report’ on pages 309 to 348 form an integral part of these financial statements. These financial statements were approved by the Board of Directors on 19 February 2025 and signed on its behalf by: Sir Mark E Tucker Pam Kaur Group Chairman Group Chief Financial Officer 366 HSBC Holdings plc Annual Report on Form 20-F Financial statements Consolidated statement of changes in equity for the year ended 31 December 2024 Other reserves Called up share capital and share premium Other equity instru- ments Financial assets at FVOCI reserve Cash flow hedging reserve Foreign exchange reserve Merger and other reserves 1,2 Insurance finance reserve 3 Retained earnings 1,4 Total share- holders’ equity Non- controlling interests Total equity $m $m $m $m $m $m $m $m $m $m $m At 1 Jan 2024 24,369 17,719 ( 3,507 ) ( 1,033 ) ( 33,753 ) 28,601 785 152,148 185,329 7,281 192,610 Profit for the year — — — — — — — 23,979 23,979 1,020 24,999 Other comprehensive income (net of tax) — — 259 ( 46 ) 863 5 ( 183 ) 1,018 1,916 24 1,940 –  debt instruments at fair value through other comprehensive income — — 62 — — — — — 62 16 78 –  equity instruments designated at fair value through other comprehensive income — — 75 — — — — — 75 24 99 –  cash flow hedges — — — ( 312 ) — — — — ( 312 ) ( 2 ) ( 314 ) –  changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk — — — — — — — ( 439 ) ( 439 ) — ( 439 ) –  property revaluation — — — — — 5 — — 5 — 5 –  remeasurement of defined benefit asset/liability — — — — — — — ( 244 ) ( 244 ) 16 ( 228 ) –  share of other comprehensive income of associates and joint ventures — — — — — — — 462 462 — 462 –  effects of hyperinflation — — — — — — — 1,239 1,239 — 1,239 –  foreign exchange reclassified to income statement on disposal of a foreign operation 5 — — — — 5,816 — — — 5,816 — 5,816 –  other reserves reclassified to income statement on disposal of a foreign operation — — 85 262 — — — — 347 — 347 –  insurance finance income/ (expense) recognised in other comprehensive income — — — — — — ( 142 ) — ( 142 ) — ( 142 ) –  exchange differences — — 37 4 ( 4,953 ) — ( 41 ) — ( 4,953 ) ( 30 ) ( 4,983 ) Total comprehensive income for the year — — 259 ( 46 ) 863 5 ( 183 ) 24,997 25,895 1,044 26,939 Shares issued under employee remuneration and share plans 77 — — — — — — ( 77 ) — — — Capital securities issued 6 — 3,601 — — — — — — 3,601 — 3,601 Dividends to shareholders — — — — — — — ( 16,410 ) ( 16,410 ) ( 690 ) ( 17,100 ) Redemption of securities 7 — ( 2,250 ) — — — — — — ( 2,250 ) — ( 2,250 ) Transfers 8 — — — — — ( 2,945 ) — 2,945 — — — Cost of share-based payment arrangements — — — — — — — 529 529 — 529 Share buy-back 9 — — — — — — — ( 11,043 ) ( 11,043 ) — ( 11,043 ) Cancellation of shares ( 663 ) — — — — 663 — — — — — Other movements — — 2 — 3 4 — ( 687 ) ( 678 ) ( 335 ) ( 1,013 ) At 31 Dec 2024 23,783 19,070 ( 3,246 ) ( 1,079 ) ( 32,887 ) 26,328 602 152,402 184,973 7,300 192,273 HSBC Holdings plc Annual Report on Form 20-F 367 Consolidated statement of changes in equity (continued) for the year ended 31 December 2023 Other reserves Called up share capital and share premium Other equity instru- ments Financial assets at FVOCI reserve Cash flow hedging reserve Foreign exchange reserve Merger and other reserves 1,2 Insurance finance reserve 3 Retained earnings 1,4 Total share- holders’ equity Non- controlling interests Total equity $m $m $m $m $m $m $m $m $m $m $m At 1 Jan 2023 24,811 19,746 ( 7,038 ) ( 3,808 ) ( 32,575 ) 33,209 1,079 142,409 177,833 7,364 185,197 Profit for the year — — — — — — — 23,533 23,533 1,026 24,559 Other comprehensive income (net of tax) — — 2,402 3,030 ( 211 ) 1 ( 371 ) 114 4,965 18 4,983 –  debt instruments at fair value through other comprehensive income — — 2,574 — — — — — 2,574 25 2,599 –  equity instruments designated at fair value through other comprehensive income — — ( 93 ) — — — — — ( 93 ) ( 27 ) ( 120 ) –  cash flow hedges — — — 2,919 — — — — 2,919 34 2,953 –  changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk — — — — — — — ( 1,220 ) ( 1,220 ) 1 ( 1,219 ) –  property revaluation — — — — — 1 — — 1 — 1 –  remeasurement of defined benefit asset/liability — — — — — — — ( 317 ) ( 317 ) 3 ( 314 ) –  share of other comprehensive income of associates and joint ventures — — — — — — 47 47 — 47 –  effects of hyperinflation — — — — — — — 1,604 1,604 — 1,604 –  insurance finance income/ (expense) recognised in other comprehensive income — — — — — — ( 364 ) — ( 364 ) — ( 364 ) –  exchange differences — — ( 79 ) 111 ( 211 ) — ( 7 ) — ( 186 ) ( 18 ) ( 204 ) Total comprehensive income for the year — — 2,402 3,030 ( 211 ) 1 ( 371 ) 23,647 28,498 1,044 29,542 Shares issued under employee remuneration and share plans 79 — — — — — — ( 79 ) — — — Capital securities issued — 1,996 — — — — — — 1,996 — 1,996 Dividends to shareholders — — — — — — — ( 11,593 ) ( 11,593 ) ( 603 ) ( 12,196 ) Redemption of securities — ( 4,023 ) — — — — — 20 ( 4,003 ) — ( 4,003 ) Transfers 8 — — — — — ( 5,130 ) — 5,130 — — — Cost of share-based payment arrangements — — — — — — — 482 482 — 482 Share buy-back — — — — — — — ( 7,025 ) ( 7,025 ) — ( 7,025 ) Cancellation of shares ( 521 ) — — — — 521 — — — — — Other movements — — 1,129 ( 255 ) ( 967 ) — 77 ( 843 ) ( 859 ) ( 524 ) ( 1,383 ) At 31 Dec 2023 24,369 17,719 ( 3,507 ) ( 1,033 ) ( 33,753 ) 28,601 785 152,148 185,329 7,281 192,610 368 HSBC Holdings plc Annual Report on Form 20-F Financial statements Consolidated statement of changes in equity (continued) for the year ended 31 December 2022 Other reserves Called up share capital and share premium Other equity instru- ments Financial assets at FVOCI reserve Cash flow hedging reserve Foreign exchange reserve Merger and other reserves 1,2 Insurance finance reserve 3 Retained earnings 1,4 Total share- holders’ equity Non- controlling interests Total equity $m $m $m $m $m $m $m $m $m $m $m At 1 Jan 2022 24,918 22,414 49 ( 197 ) ( 22,769 ) 30,060 ( 696 ) 135,236 189,015 7,303 196,318 Profit for the year — — — — — — — 15,559 15,559 690 16,249 Other comprehensive income (net of tax) — — ( 7,089 ) ( 3,613 ) ( 9,806 ) 174 1,775 1,403 ( 17,156 ) ( 86 ) ( 17,242 ) –  debt instruments at fair value through other comprehensive income — — ( 7,181 ) — — — — — ( 7,181 ) ( 51 ) ( 7,232 ) –  equity instruments designated at fair value through other comprehensive income — — 92 — — — — — 92 15 107 –  cash flow hedges — — — ( 3,613 ) — — — — ( 3,613 ) ( 42 ) ( 3,655 ) –  changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk — — — — — — — 1,922 1,922 — 1,922 –  property revaluation — — — — — 174 — — 174 106 280 –  remeasurement of defined benefit asset/liability — — — — — — — ( 1,029 ) ( 1,029 ) ( 2 ) ( 1,031 ) –  share of other comprehensive income of associates and joint ventures — — — — — — — ( 367 ) ( 367 ) — ( 367 ) –  effects of hyperinflation — — — — — — — 877 877 — 877 –  insurance finance income/ (expense) recognised in other comprehensive income — — — — — — 1,775 — 1,775 — 1,775 –  exchange differences — — — — ( 9,806 ) — — — ( 9,806 ) ( 112 ) ( 9,918 ) Total comprehensive income for the year — — ( 7,089 ) ( 3,613 ) ( 9,806 ) 174 1,775 16,962 ( 1,597 ) 604 ( 993 ) Shares issued under employee remuneration and share plans 67 — — — — — — ( 67 ) — — — Dividends to shareholders — — — — — — — ( 6,544 ) ( 6,544 ) ( 426 ) ( 6,970 ) Redemption of securities — ( 2,668 ) — — — — — 402 ( 2,266 ) — ( 2,266 ) Transfers 8 — — — — — 2,499 — ( 2,499 ) — — — Cost of share-based payment arrangements — — — — — — — 400 400 — 400 Share buy-back — — — — — — — ( 1,000 ) ( 1,000 ) — ( 1,000 ) Cancellation of shares ( 174 ) — — — — 174 — — — — — Other movements — — 2 2 — 302 — ( 481 ) ( 175 ) ( 117 ) ( 292 ) At 31 Dec 2022 24,811 19,746 ( 7,038 ) ( 3,808 ) ( 32,575 ) 33,209 1,079 142,409 177,833 7,364 185,197 1 Cumulative goodwill amounting to $ 5,138 m was charged against reserves in respect of acquisitions of subsidiaries prior to 1 January 1998, including $ 3,469 m charged against the merger reserve arising on the acquisition of HSBC Bank plc. The balance of $ 1,669 m was charged against retained earnings. 2 Statutory share premium relief under section 131 of the Companies Act 1985 was taken in respect of the acquisition of HSBC Bank plc in 1992, HSBC Continental Europe in 2000 and HSBC Finance Corporation in 2003, and the shares issued were recorded at their nominal value only. In HSBC’s consolidated financial statements, the fair value differences of $ 8,290 m in respect of HSBC Continental Europe and $ 12,768 m in respect of HSBC Finance Corporation were recognised in the merger reserve. The merger reserve created on the acquisition of HSBC Finance Corporation subsequently became attached to HSBC Overseas Holdings (UK) Limited, following a number of intra-Group reorganisations, and has since been transferred to retained earnings as part of the impairment recognised in respect of HSBC Overseas Holding (UK) Limited. During 2009, pursuant to section 131 of the Companies Act 1985, statutory share premium relief was taken in respect of the rights issue and $ 15,796 m was recognised in the merger reserve. 3 The insurance finance reserve reflects the impact of the adoption of the other comprehensive income option for our insurance business in France. Underlying assets supporting these contracts are measured at fair value through other comprehensive income. Under this option, only the amount that matches income or expenses recognised in profit or loss on underlying items is included in finance income or expenses, resulting in the elimination of income statement accounting mismatches. The remaining amount of finance income or expenses for these insurance contracts is recognised in other comprehensive income (‘OCI’). 4 At 31 December 2024, retained earnings included 28,744,609 own shares held . These include own shares held within HSBC’s insurance business’s retirement funds for the benefit of policyholders or beneficiaries within employee trusts for the settlement of shares expected to be delivered under employee share schemes or bonus plans, and the market-making activities in Markets and Securities Services. 5 At 31 December 2024, accumulated foreign currency translation reserve losses of $ 5,816 m were recycled to the income statement, including $ 5,166 m upon completion of the sale of our business in Argentina and $ 564 m upon completion of the sale of our banking business in Canada. 6 HSBC Holdings issu ed SGD 1,500 m 5.250 % contingent convertible securities in June 2024, and a further $ 1,350 m 6.875 % and $ 1,150 m 6.950 % contingent convertible securities in September 2024. All instruments were recorded net of issuance costs. 7 In September 2024, HSBC Holdings redeemed its $ 2,250 m 6.375 % contingent convertible securities. 8 At 31 December 2024, an impairment of $ 11,442 m (2023: $ 5,512 m ) of HSBC Overseas Holdings (UK) Limited was recognised, resulting in a permitted transfer of $ 2,945 m (2023: $ 5,130 m ) from the remaining historical merger reserve to retained earnings, and a realisation of nil share-based payment reserve (2023: $ 382 m ) within retained earnings. In 2022, a part-reversal of the impairment resulted in a transfer from retained earnings back to the merger reserve of $ 2,499 m . 9 HSBC Holdings announced the following share buy-backs during the year: a share buy-back of up to $ 2.0 bn in February 2024, which was completed in April 2024; a share buy-back of up to $ 3.0 bn in April 2024, which was completed in July 2024; a share buy-back of up to $ 3.0 bn in July 2024, which was completed in October 2024; and a share buy-back of up to $ 3.0 bn in October 2024, which was completed in February 2025. HSBC Holdings plc Annual Report on Form 20-F 369 Consolidated statement of cash flows for the year ended 31 December 2024 2024 2023 2022 $m $m $m Profit before tax 32,309 30,348 17,058 Adjustments for non-cash items: Depreciation, amortisation and impairment 4,080 3,466 3,850 Net loss from investing activities 180 1,213 11 Share of profit in associates and joint ventures ( 2,912 ) ( 2,807 ) ( 2,723 ) Impairment of interest in associate — 3,000 — (Gain)/loss on acquisition/disposal of subsidiaries, businesses, associates and joint ventures 1,704 ( 1,775 ) 2,554 Change in expected credit losses gross of recoveries and other credit impairment charges 3,674 3,717 3,898 Provisions including pensions 299 266 638 Share-based payment expense 529 482 400 Other non-cash items included in profit before tax ( 5,290 ) ( 4,299 ) ( 774 ) Elimination of exchange differences 1 26,734 ( 10,678 ) 48,718 Changes in operating assets and liabilities Change in net trading securities and derivatives ( 41,385 ) ( 63,247 ) 20,166 Change in loans and advances to banks and customers 7,275 ( 14,145 ) 31,649 Change in reverse repurchase agreements – non-trading ( 4,227 ) ( 2,095 ) ( 23,405 ) Change in financial assets designated and otherwise mandatorily measured at fair value ( 20,662 ) ( 9,994 ) 14,164 Change in other assets 2 7,685 ( 10,254 ) ( 12,858 ) Change in deposits by banks and customer accounts 44,237 45,021 ( 91,194 ) Change in repurchase agreements – non-trading 8,700 43,366 4,344 Change in debt securities in issue 11,942 11,945 12,518 Change in financial liabilities designated at fair value ( 2,248 ) 10,097 ( 13,654 ) Change in other liabilities ( 1,603 ) 8,742 6,021 Dividends received from associates 1,062 1,067 944 Contributions paid to defined benefit plans ( 167 ) ( 208 ) ( 194 ) Tax paid ( 6,611 ) ( 4,117 ) ( 2,776 ) Net cash from operating activities 65,305 39,111 19,355 Purchase of financial investments 2 ( 523,454 ) ( 563,561 ) ( 511,097 ) Proceeds from the sale and maturity of financial investments 2 453,502 504,174 492,624 Net cash flows from the purchase and sale of property, plant and equipment ( 1,344 ) ( 1,145 ) ( 1,284 ) Net cash flows from disposal of loan portfolio and customer accounts — 623 ( 3,530 ) Net investment in intangible assets ( 2,542 ) ( 2,550 ) ( 3,125 ) Net cash inflow on acquisition/disposal of subsidiaries, businesses, associates and joint ventures 3 9,891 1,239 — Net cash outflow on acquisition/disposal of subsidiaries, businesses, associates and joint ventures 4 ( 12,617 ) ( 1,692 ) ( 989 ) Net cash from investing activities ( 76,564 ) ( 62,912 ) ( 27,401 ) Issue of ordinary share capital and other equity instruments 3,602 1,996 — Cancellation of shares ( 11,348 ) ( 5,812 ) ( 2,285 ) Net purchases of own shares for market-making and investment purposes ( 541 ) ( 614 ) ( 91 ) Net cash flow from change in stake of subsidiaries — ( 19 ) ( 197 ) Redemption of preference shares and other equity instruments ( 3,433 ) ( 4,003 ) ( 2,266 ) Subordinated loan capital issued 4,361 5,237 7,300 Subordinated loan capital repaid 5 ( 2,000 ) ( 2,147 ) ( 1,777 ) Dividends paid to shareholders of the parent company and non-controlling interests ( 17,100 ) ( 12,196 ) ( 6,970 ) Net cash from financing activities ( 26,459 ) ( 17,558 ) ( 6,286 ) Net decrease in cash and cash equivalents ( 37,718 ) ( 41,359 ) ( 14,332 ) Cash and cash equivalents at 1 Jan 490,933 521,671 574,032 Exchange differences in respect of cash and cash equivalents ( 18,275 ) 10,621 ( 38,029 ) Cash and cash equivalents at 31 Dec 6 434,940 490,933 521,671 370 HSBC Holdings plc Annual Report on Form 20-F Financial statements Consolidated statement of cash flows (continued) for the year ended 31 December 2024 2024 2023 2022 $m $m $m Cash and cash equivalents comprise: –  cash and balances at central banks 267,674 285,868 327,002 –  loans and advances to banks of one month or less 69,803 76,620 72,295 –  reverse repurchase agreements with banks of one month or less 58,290 64,341 68,682 –  treasury bills, other bills and certificates of deposit less than three months 8 27,307 33,303 26,727 –  cash collateral, net settlement accounts and items in course of collection from/transmission to other banks 9,827 14,866 18,878 –  cash and cash equivalents held for sale 7 2,039 15,935 8,087 Cash and cash equivalents at 31 Dec 6 434,940 490,933 521,671 Interest received was $ 110,106 m (2023: $ 98,910 m ; 2022: $ 55,664 m ) , interest paid was $ 81,680 m (2023: $ 65,980 m ; 2022: $ 22,856 m ) and dividends received (excluding dividends received from associates, which are presented separately above) were $ 2,812 m (2023: $ 1,869 m ; 2022: $ 1,638 m ). 1 Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details cannot be determined without unreasonable expense. 2 Post adoption of IFRS 17 ‘Insurance Contracts’, certain assets have been reclassified from ‘Investing activities’ to ‘Operating activities’. The comparative data for 2022 have not been re-presented. 3 This includes $ 9.3 bn from the sale of our banking business in Canada. 4 This includ es $ 10.6 bn from the sale of our retail banking business in France and $ 1.8 bn from the sale of our business in Argentina. 5 Subordinated liabilities changes during the year are attributable to repayments of $( 2.0 )b n (2023: $( 2.1 )b n; 2022: $( 1.8 )b n) of securities. Non-cash changes during the year included foreign exchange gains/losses of $ 1.6 b n gain (2023: $ 0.6 b n loss; 2022: $ 1.1 b n gain) and fair value gains/losses of $ 1.0 b n gain (2023: $ 0.8 b n loss; 2022: $ 3.1 b n gain). 6 At 31 December 2024, $ 50.4 b n (2023: $ 61.8 bn ; 2022: $ 59.3 bn) was not available for use by HSBC due to a range of restrictions, including currency exchange and other restrictions. 7 Includes $ 1.9 bn (2023: $ 5.6 bn, 2022: $ 6.5 bn) of cash and balances at central bank s and $ 0.1 bn (2023: $ 10.5 bn, 2022: $ 0.2 bn ) of loans and advances to banks of one month or less. There is nil balance in 2024 f or reverse repurchase agreements with banks of one month or less (2023: $ 0.2 bn, 2022: $ 1.3 bn) and cash collateral, net settlement accounts and items in course of collection from/transmission to other banks (2023: $( 0.4 ) bn, 2022: $ ( 0.2 ) bn). 8 The amount in this line is included in the ‘Financial investments’ and ‘Financial assets designated and otherwise mandatorily measured at fair value through profit or loss’ line items in the Consolidated balance sheet on page 365 . HSBC Holdings plc Annual Report on Form 20-F 371 HSBC Holdings income statement for the year ended 31 December 2024 2024 2023 2022 Notes * $m $m $m Net interest expense ( 5,758 ) ( 5,339 ) ( 3,074 ) –  interest income 3,053 2,864 937 –  interest expense ( 8,811 ) ( 8,203 ) ( 4,011 ) Net fee (expense)/income ( 10 ) 2 ( 3 ) Net income from financial instruments held for trading or managed on a fair value basis 3 2,899 1,063 2,129 Changes in fair value of designated debt and related derivatives 1 3 ( 125 ) ( 1,468 ) 2,144 Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss 3 2,086 3,692 ( 2,409 ) Gains less losses from financial investments 2 45 58 Dividend income from subsidiaries 3 33,846 16,824 9,478 Other operating income 276 332 91 Total operating income 33,216 15,151 8,414 Employee compensation and benefits 5 ( 29 ) ( 15 ) ( 41 ) General and administrative expenses ( 1,148 ) ( 1,327 ) ( 1,586 ) (Impairment) of subsidiaries/reversal of impairment 3 19 ( 11,490 ) ( 5,574 ) 2,493 Total operating expenses ( 12,667 ) ( 6,916 ) 866 Profit before tax 20,549 8,235 9,280 Tax credit 2,3 499 977 3,077 Profit for the year 21,048 9,212 12,357 * For Notes on the financial statements, see page 375 . 1 The debt instruments, issued for funding purposes, are designated under the fair value option to reduce an accounting mismatch. 2 The tax credit in 2022 includes $ 2.2 b n arising from the recognition of a deferred tax asset from historical tax losses in HSBC Holdings. This was a result of improved profit forecasts for the UK tax group, which accelerated the expected utilisation of these losses and reduced uncertainty regarding their recoverability. 3 The amounts recorded within profit before tax with respect to dividend income from subsidiaries and impairment/reversal of impairment of subsidiaries are not subject to tax. HSBC Holdings statement of comprehensive income for the year ended 31 December 2024 2024 2023 2022 $m $m $m Profit for the year 21,048 9,212 12,357 Other comprehensive income/(expense) Items that will not be reclassified subsequently to profit or loss: Changes in fair value of financial liabilities designated at fair value upon initial recognition arising from changes in own credit risk 21 ( 124 ) 326 –  before income taxes 32 ( 166 ) 435 –  income taxes ( 11 ) 42 ( 109 ) Other comprehensive income/(expense) for the year, net of tax 21 ( 124 ) 326 Total comprehensive income for the year 21,069 9,088 12,683 372 HSBC Holdings plc Annual Report on Form 20-F Financial statements HSBC Holdings balance sheet 31 Dec 2024 31 Dec 2023 Notes * $m $m Assets Cash and balances with HSBC undertakings 2,548 7,029 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value 61,286 59,879 Derivatives 15 3,054 3,344 Loans and advances to HSBC undertakings 37,677 27,354 Trading Assets 709 — Financial investments 16 10,328 19,558 Prepayments, accrued income and other assets 4,353 5,341 Current tax assets 305 924 Investments in subsidiaries 19 152,337 159,478 Intangible assets 162 180 Deferred tax assets 1,498 2,082 Total assets at 31 Dec 274,257 285,169 Liabilities and equity Liabilities Amounts owed to HSBC undertakings 231 168 Financial liabilities designated at fair value 25 41,582 43,638 Derivatives 15 5,340 6,090 Debt securities in issue 26 64,320 65,239 Accruals, deferred income and other liabilities 3,097 4,289 Subordinated liabilities 29 23,548 24,439 Total liabilities 138,118 143,863 Equity Called up share capital 32 8,973 9,631 Share premium account 32 14,810 14,738 Other equity instruments 32 19,024 17,703 Merger and other reserves 33,664 35,946 Retained earnings 59,668 63,288 Total equity 136,139 141,306 Total liabilities and equity at 31 Dec 274,257 285,169 * For Notes on the financial statements, see page 375 . The accompanying notes on pages 375 to 460 , the audited sections in the Risk review on pages 143 to 265 and ‘Directors’ remuneration report’ on pages 309 to 348 form an integral part of these financial statements. These financial statements were approved by the Board of Directors on 19 February 2025 and signed on its behalf by: Sir Mark E Tucker Pam Kaur Group Chairman Group Chief Financial Officer HSBC Holdings plc Annual Report on Form 20-F 373 HSBC Holdings statement of changes in equity for the year ended 31 December 2024 Other reserves Called up share capital Share premium Other equity instruments Retained earnings 1,2 Merger and other reserves Total shareholders’ equity $m $m $m $m $m $m At 1 Jan 2024 9,631 14,738 17,703 63,288 35,946 141,306 Profit for the year — — — 21,048 — 21,048 Other comprehensive income (net of tax) — — — 21 — 21 –  changes in fair value of financial liabilities designated at fair value due to movement in own credit risk — — — 21 — 21 Total comprehensive income for the year — — — 21,069 — 21,069 Shares issued under employee share plans 5 72 — ( 181 ) — ( 104 ) Capital securities issued 3 — — 3,571 — — 3,571 Purchase and cancellation of shares 4 ( 663 ) — — ( 11,043 ) 663 ( 11,043 ) Dividends to shareholders — — — ( 16,410 ) — ( 16,410 ) Redemption of capital securities 5 — — ( 2,250 ) — — ( 2,250 ) Transfers 6 — — — 2,945 ( 2,945 ) — At 31 Dec 2024 8,973 14,810 19,024 59,668 33,664 136,139 At 1 Jan 2023 10,147 14,664 19,746 67,996 40,555 153,108 Profit for the year — — — 9,212 — 9,212 Other comprehensive income (net of tax) — — — ( 124 ) — ( 124 ) –  changes in fair value of financial liabilities designated at fair value due to movement in own credit risk — — — ( 124 ) — ( 124 ) Total comprehensive income for the year — — — 9,088 — 9,088 Shares issued under employee share plans 5 74 — ( 328 ) — ( 249 ) Capital securities issued — — 1,980 — — 1,980 Purchase and cancellation of shares ( 521 ) — — ( 7,025 ) 521 ( 7,025 ) Dividends to shareholders — — — ( 11,593 ) — ( 11,593 ) Redemption of capital securities — — ( 4,023 ) 20 — ( 4,003 ) Transfers 6 — — — 5,130 ( 5,130 ) — At 31 Dec 2023 9,631 14,738 17,703 63,288 35,946 141,306 At 1 Jan 2022 10,316 14,602 22,414 65,116 37,882 150,330 Profit for the year — — — 12,357 — 12,357 Other comprehensive income (net of tax) — — — 326 — 326 –  changes in fair value of financial liabilities designated at fair value due to movement in own credit risk — — — 326 — 326 Total comprehensive income for the year — — — 12,683 — 12,683 Shares issued under employee share plans 5 62 — ( 161 ) — ( 94 ) Capital securities issued — — — — — — Purchase and cancellation of shares ( 174 ) — — ( 1,001 ) 174 ( 1,001 ) Dividends to shareholders — — — ( 6,544 ) — ( 6,544 ) Redemption of capital securities — — ( 2,668 ) 402 — ( 2,266 ) Transfers 6 — — — ( 2,499 ) 2,499 — At 31 Dec 2022 10,147 14,664 19,746 67,996 40,555 153,108 Dividends per ordinary share at 31 December 2024 were $ 0.82 (2023: $ 0.53 ; 2022: $ 0.27 ). 1 Retained earnings include unrealised profits from intercompany transactions and share-based payment reserves, which are excluded from distributable reserves. Distributable reserves include the distributable portions of retained earnings and the merger reserve. Distributable reserves are reduced by ordinary dividend payments, distributions on additional tier 1 instruments, share buy-backs and impairments in investments in subsidiaries. They are increased by profits and the realisation of retained earnings or merger reserves upon impairment of an associated investment in subsidiary. 2 At 31 December 2024, retained earnings included 29,739,384 own shares held. These include own shares held by HSBC Holdings for the benefit of beneficiaries within employee trusts for the settlement of shares expected to be delivered under employee share schemes or bonus plans. 3 HSBC Holdings issued SGD 1,500 m 5.250 % contingent convertible securities in June 2024, and a further $ 1,350 m 6.875 % and $ 1,150 m 6.950 % contingent convertible securities in September 2024. All instruments were recorded net of issuance cost. 4 HSBC Holdings announced the following share buy-backs during the year: a share buy-back of up to $ 2.0 b n in February 2024, which was completed in April 2024; a share buy-back of up to $ 3.0 b n in April 2024, which was completed in July 2024; a share buy-back of up to $ 3.0 b n in July 2024, which was completed in October 2024; and a share buy-back of up to $ 3.0 b n in October 2024, which was completed in February 2025. 5 In September 2024, HSBC Holdings redeemed its $ 2,250 m 6.375 % contingent convertible securities. 6 At 31 December 2024, an impairment of $ 11,442 m (2023: $ 5,512 m ) of HSBC Overseas Holdings (UK) Limited was recognised, resulting in a permitted transfer of $ 2,945 m (2023: $ 5,130 m ) from the remaining historical associated merger reserve to retained earnings, and a realisation of nil share-based payment reserves (2023: $ 382 m ) to retained earnings. In 2022, a part-reversal of the impairment resulted in a transfer from retained earnings back to the merger reserve of $ 2,499 m . 374 HSBC Holdings plc Annual Report on Form 20-F Financial statements HSBC Holdings statement of cash flows for the year ended 31 December 2024 2024 2023 2022 $m $m $m Profit before tax 20,549 8,235 9,280 Adjustments for non-cash items 11,721 5,611 ( 2,500 ) –  depreciation, amortisation and impairment/expected credit losses 11,552 5,629 ( 2,428 ) –  share-based payment expense 1 — 1 –  other non-cash items included in profit before tax 53 ( 38 ) ( 73 ) –  elimination of exchange differences 1 115 20 — Changes in operating assets and liabilities Change in loans and advances to HSBC undertakings ( 2,753 ) ( 1,267 ) ( 1,657 ) Change in financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value ( 1,978 ) ( 7,767 ) ( 914 ) Change in net trading securities and net derivatives ( 1,537 ) ( 529 ) 4,712 Change in other assets 603 363 51 Change in financial investments — — 196 Change in debt securities in issue 469 1,964 ( 5,625 ) Change in financial liabilities designated at fair value 292 3,096 ( 4,755 ) Change in other liabilities ( 1,897 ) 1,947 ( 3,394 ) Tax received 1,691 577 215 Net cash from operating activities 27,160 12,230 ( 4,391 ) Purchase of financial investments ( 29,812 ) ( 7,803 ) ( 21,481 ) Proceeds from the sale and maturity of financial investments 31,779 20,074 17,165 Net cash outflow from acquisition of or increase in stake of subsidiaries ( 7,473 ) ( 2,517 ) ( 5,696 ) Repayment of capital from subsidiaries 2,963 4,993 3,860 Net investment in intangible assets ( 43 ) ( 46 ) ( 39 ) Net cash from investing activities ( 2,586 ) 14,701 ( 6,191 ) Issue of ordinary share capital and other equity instruments 3,648 2,059 67 Redemption of preference shares and other equity instruments ( 2,250 ) ( 4,003 ) ( 2,266 ) Purchase of own shares ( 532 ) ( 855 ) ( 438 ) Cancellation of shares ( 11,204 ) ( 5,812 ) ( 2,298 ) Subordinated loan capital issued 4,268 5,270 7,300 Subordinated loan capital repaid ( 3,994 ) — — Debt securities issued 16,102 17,180 18,076 Debt securities repaid ( 18,179 ) ( 13,047 ) ( 10,094 ) Dividends paid on ordinary shares ( 15,348 ) ( 10,492 ) ( 5,330 ) Dividends paid to holders of other equity instruments ( 1,062 ) ( 1,101 ) ( 1,214 ) Net cash from financing activities ( 28,551 ) ( 10,801 ) 3,803 Net increase/(decrease) in cash and cash equivalents ( 3,977 ) 16,130 ( 6,779 ) Cash and cash equivalents at 1 January 22,814 6,756 13,535 Exchange differences in respect of cash and cash equivalents 2 ( 144 ) ( 72 ) — Cash and cash equivalents at 31 Dec 18,693 22,814 6,756 Cash and cash equivalents comprise: –  cash at bank with HSBC undertakings 2,548 7,029 3,210 –  cash collateral and net settlement accounts 2,544 3,422 3,544 –  loans and advances to HSBC undertakings of one month or less 8,500 — — –  treasury and other eligible bills 5,101 12,363 2 Interest received was $ 6,624 m (2023: $ 5,695 m ; 2022: $ 2,410 m ), interest paid was $ 8,800 m (2023: $ 7,754 m ; 2022: $ 3,813 m ) and dividends received were $ 33,846 m (2023: $ 16,824 m ; 2022: $ 9,478 m ). 1 Adjustment to bring changes between opening and closing balance sheet amounts to average rates. This is not done on a line-by-line basis, as details cannot be determined without unreasonable expense. As this change has immaterial impact, 2022 prior period comparatives have not been restated. 2 In 2023, additional disclosure has been made in respect of exchange differences on cash and cash equivalents. As this change has immaterial impact, 2022 prior period comparatives have not been restated. HSBC Holdings plc Annual Report on Form 20-F 375 Notes on the financial statements Contents 375 1 Basis of preparation and material accounting policies 388 2 Net fee income 389 3 Net income/(expense) from financial instruments measured at fair value through profit or loss 389 4 Insurance business 396 5 Employee compensation and benefits 401 6 Auditor’s remuneration 402 7 Tax 404 8 Dividends 405 9 Earnings per share 405 10 Segmental analysis 408 11 Trading assets 408 12 Fair values of financial instruments carried at fair value 415 13 Fair values of financial instruments not carried at fair value 417 14 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 417 15 Derivatives 421 16 Financial investments 422 17 Assets pledged, collateral received and assets transferred 423 18 Interests in associates and joint ventures 427 19 Investments in subsidiaries 429 20 Structured entities 431 21 Goodwill and intangible assets 433 22 Prepayments, accrued income and other assets 433 23 Assets held for sale, liabilities of disposal groups held for sale and business acquisitions 435 24 Trading liabilities 436 25 Financial liabilities designated at fair value 436 26 Debt securities in issue 436 27 Accruals, deferred income and other liabilities 437 28 Provisions 438 29 Subordinated liabilities 439 30 Maturity analysis of assets, liabilities and off-balance sheet commitments 444 31 Offsetting of financial assets and financial liabilities 445 32 Called up share capital and other equity instruments 447 33 Contingent liabilities, contractual commitments and guarantees 448 34 Finance lease receivables 448 35 Legal proceedings and regulatory matters 451 36 Related party transactions 452 37 Events after the balance sheet date 452 38 HSBC Holdings’ subsidiaries, joint ventures and associates 460 39 Non-statutory accounts 1 Basis of preparation and material accounting policies 1.1 Basis of preparation (a) Compliance with International Financial Reporting Standards The consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings comply with UK-adopted international accounting standards and with the requirements of the Companies Act 2006, and have also applied international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. These financial statements are also prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IFRS Accounting Standards’), including interpretations issued by the IFRS Interpretations Committee, as there are no applicable differences from IFRS Accounting Standards for the periods presented. There were no unendorsed standards effective for the year ended 31 December 2024 affecting these consolidated and separate financial statements. IFRS Accounting Standards adopted during the year ended 31 December 2024 There were no new standards, amendments to standards or interpretations that had an effect on these financial statements. Accounting policies have been applied consistently. (b ) Differences between IFRS Accounting Standards and Hong Kong Financial Reporting Standards There are no significant differences between IFRS Accounting Standards and Hong Kong Financial Reporting Standards in terms of their application to HSBC, and consequently there would be no significant differences had the financial statements been prepared in accordance with Hong Kong Financial Reporting Standards. The ‘Notes on the financial statements’, taken together with the ‘Report of the Directors’, include the aggregate of all disclosures necessary to satisfy IFRS Accounting Standards and Hong Kong Financial Reporting Standards. (c ) Future accounting developments Minor amendments to IFRS Accounting Standards The International Accounting Standards Board (‘IASB’) has published a number of minor amendments to IFRS Accounting Standards that are effective from 1 January 2025. HSBC expects they will have an insignificant effect, when adopted, on the consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings. Other amendments and new IFRS Accounting Standards Amendments to IFRS 9 ‘Financial Instruments’ and IFRS 7 ‘Financial Instruments: Disclosures’ In May 2024, the IASB issued amendments to IFRS 9 ‘Financial Instruments’ and IFRS 7 ‘Financial Instruments: Disclosures’, effective for annual reporting periods beginning on, or after, 1 January 2026. In addition to guidance as to when certain financial liabilities can be deemed settled when using an electronic payment system, the amendments also provide further clarification regarding the classification of financial assets that contain contractual terms that change the timing or amount of contractual cash flows, including those arising from ESG-related contingencies, and financial assets with certain non-recourse features. The Group is undertaking an assessment of the potential impact. 376 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements IFRS 18 ‘Presentation and Disclosure in Financial Statements’ In April 2024, the IASB issued IFRS 18 ‘Presentation and Disclosure in Financial Statements’, effective for annual reporting periods beginning on or after 1 January 2027. The new accounting standard aims to give users of financial statements more transparent and comparable information about an entity’s financial performance. It will replace IAS 1 ‘Presentation of Financial Statements’ but carries over many requirements from that IFRS Accounting Standard unchanged. In addition, there are three sets of new requirements relating to the structure of the income statement, management-defined performance measures and the aggregation and disaggregation of financial information. While IFRS 18 will not change recognition criteria or measurement bases, it may have an impact on presenting information in the financial statements, in particular the income statement and to a lesser extent the cash flow statement. HSBC are currently assessing impacts and data readiness before developing a more detailed implementation plan. (d) Foreign currencies HSBC’s consolidated financial statements are presented in US dollars because the US dollar and currencies linked to it form the major currency bloc in which HSBC transacts and funds its business. The US dollar is also HSBC Holdings’ functional currency because the US dollar and currencies linked to it are the most significant currencies relevant to the underlying transactions, events and conditions of its subsidiaries, as well as representing a significant proportion of its funds generated from financing activities. Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Assets and liabilities denominated in foreign currencies are translated at the rate of exchange at the balance sheet date, except non-monetary assets and liabilities measured at historical cost, which are translated using the rate of exchange at the initial transaction date. Exchange differences are included in other comprehensive income or in the income statement depending on where the gain or loss on the underlying item is recognised. Except for subsidiaries operating in hyperinflationary economies, in the consolidated financial statements, the assets and liabilities of branches, subsidiaries, joint ventures and associates whose functional currency is not US dollars are translated into the Group’s presentation currency at the rate of exchange at the balance sheet date, while their results are translated into US dollars at the average rates of exchange for the reporting period. Exchange differences arising are recognised in other comprehensive income. On disposal of a foreign operation, exchange differences previously recognised in other comprehensive income are reclassified to the income statemen t. (e) Presentation of information Certain disclosures required by IFRS Accounting Standards have been included in the sections marked as (‘Audited’) in the Annual Report and Accounts 2024 as follows: – Disclosures concerning the nature and extent of risks relating to insurance contracts and financial instruments are included in the ‘Risk review’ on pages 143 to 265 . – The ‘Own funds disclosure’ is included in the ‘Risk review’ on page 235 . HSBC follows the UK Finance Disclosure Code. The UK Finance Disclosure Code aims to increase the quality and comparability of UK banks’ disclosures and sets out five disclosure principles together with supporting guidance agreed in 2010. In line with the principles of the UK Finance Disclosure Code, HSBC assesses good practice recommendations issued from time to time by relevant regulators and standard setters, and will assess the applicability and relevance of such guidance, enhancing disclosures where appropriate. (f) Critical estimates and judgements The preparation of financial information requires the use of estimates and judgements about future conditions. In view of the inherent uncertainties and the high level of subjectivity involved in the recognition or measurement of items, highlighted as the ‘critical estimates and judgements’ in section 1.2 below, it is possible that the outcomes in the next financial year could differ from those on which management’s estimates are based. This could result in materially different estimates and judgements from those reached by management for the purposes of these financial statements. Management’s selection of HSBC’s accounting policies that contain critical estimates and judgements reflects the materiality of the items to which the policies are applied and the high degree of judgement and estimation uncertainty involve d. Management has considered the impact of climate-related risks on HSBC’s financial position and performance. While the effects of climate change are a source of uncertainty, as at 31 December 2024 management did not consider there to be a material impact on our critical judgements and estimates from the physical, transition and other climate-related risks in the short to medium term. In particular, management has considered the known and observable potential impacts of climate-related risks of associated judgements and estimates in our value in use calculations. (g ) Going concern The financial statements are prepared on a going concern basis, as the Directors are satisfied that the Group and parent company have the resources to continue in business for the foreseeable future. In making this assessment, the Directors have considered a wide range of information relating to present and future conditions, including future projections of profitability, liquidity, capital requirements and capital resources. These considerations include stressed scenarios that reflect the uncertainty in the macroeconomic environment following uncertain inflation, rapidly changing interest rates, slower Chinese economic activity, and disrupted supply chains as a result of the Russia-Ukraine war, conflict in the Middle East and US-China tensions. They also included other top and emerging risks, including climate change, as well as the related impacts on profitability, capital and liquidity . 1.2 Summary of material ac counting policies (a) Consolidation and related policies Investments in subsidiaries Where an entity is governed by voting rights, HSBC consolidates when it holds – directly or indirectly – the necessary voting rights to pass resolutions by the governing body. In all other cases, the assessment of control is more complex and requires judgement of other factors, including having exposure to variability of returns, power to direct relevant activities, and whether power is held as agent or principal. HSBC Holdings plc Annual Report on Form 20-F 377 Business combinations are accounted for using the acquisition method. The amount of non-controlling interest is measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. This election is made for each business combination. HSBC Holdings’ investments in subsidiaries are stated at cost less impairment losses. Impairment testing is performed where there is an indication of impairment, by comparing the recoverable amount of the relevant investment to its carrying amount. Indicators of impairment include both external and internal sources of information. Similarly, assessments are made as to whether an impairment loss recognised in prior periods may no longer exist or may have decreased. Where this is the case, such an impairment loss is reversed if there has been a change in the estimate used to determine the relevant recoverable amount since the last impairment loss was recognised, and to the extent that it does not increase the carrying amount above that had no impairment loss been previously recognised. Critical estimates and judgements Investments in subsidiaries are tested for impairment when there is an indication that the investment may be impaired, which involves estimations of value in use reflecting management’s best estimate of the future cash flows of the investment and the rates used to discount these cash flows, both of which are subject to uncertain factors as follows: Judgements Estimates – The accuracy of forecast cash flows is subject to a high degree of uncertainty in volatile market conditions. Where such circumstances are determined to exist, management re-tests for impairment or reversal more frequently than once a year when indicators exist. This ensures that the assumptions on which the cash flow forecasts are based continue to reflect current market conditions and management’s best estimate of future business prospects. – The future cash flows of each investment are sensitive to the cash flows projected for the periods for which detailed forecasts are available and to assumptions regarding the long-term pattern of sustainable cash flows thereafter. Forecasts are compared with actual performance and verifiable economic data, but they reflect management’s view of future business prospects at the time of the assessment. – The rates used to discount future expected cash flows can have a significant effect on their valuation, and are based on the costs of equity assigned to the investment. The cost of equity percentage is generally derived from a capital asset pricing model and the market implied cost of equity, which incorporates inputs reflecting a number of financial and economic variables, including the risk-free interest rate in the country concerned and a premium for the risk of the business being evaluated. These variables are subject to fluctuations in external market rates and economic conditions beyond management’s control. – Key assumptions used in estimating impairment in subsidiaries and their reversal where relevant are described in Note 19 . Goodwill Goodwill is allocated to cash-generating units (’CGUs’) for the purpose of impairment testing, which is undertaken at the lowest level at which goodwill is monitored for internal management purposes. HSBC’s CGUs are based on its main legal entities subdivided by global business, except for Global Banking and Markets, for which goodwill is monitored on a global basis. Impairment testing is performed at least once a year, or whenever there is an indication of impairment, by comparing the recoverable amount of a CGU with its carrying amount. Goodwill is included in a disposal group if the disposal group is a CGU to which goodwill has been allocated or it is an operation within such a CGU. The amount of goodwill included in a disposal group is measured on the basis of the relative values of the operation disposed of and the portion of the CGU retained. Critical estimates and judgements The review of goodwill and non-financial assets (see Note 1.2(n)) for impairment reflects management’s best estimate of the future cash flows of the CGUs and the rates used to discount these cash flows, both of which are subject to uncertain factors as follows: Judgements Estimates – The accuracy of forecast cash flows is subject to a high degree of uncertainty in volatile market conditions. Where such circumstances are determined to exist, management re-tests goodwill for impairment more frequently than once a year when indicators of impairment exist. This ensures that the assumptions on which the cash flow forecasts are based continue to reflect current market conditions and management’s best estimate of future business prospects. – The future cash flows of the CGUs are sensitive to the cash flows projected for the periods for which detailed forecasts are available and to assumptions regarding the long-term pattern of sustainable cash flows thereafter. Forecasts are compared with actual performance and verifiable economic data, but they reflect management’s view of future business prospects at the time of the assessment. – The rates used to discount future expected cash flows can have a significant effect on their valuation, and are based on the costs of equity assigned to individual CGUs. The cost of equity percentage is generally derived from a capital asset pricing model and market implied cost of equity, which incorporates inputs reflecting a number of financial and economic variables, including the risk-free interest rate in the country concerned and a premium for the risk of the business being evaluated. These variables are subject to fluctuations in external market rates and economic conditions beyond management’s control. – Key assumptions used in estimating goodwill and non-financial asset impairment are described in Note 21 . The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of goodwill in the next financial year, but does consider this to be an area that is inherently judgemental. The Group’s consideration of this risk includes taking account of the potential implications for CGUs arising from the revised organisational structure effective from 1 January 2025. HSBC sponsored structured entities HSBC is considered to sponsor another entity if, in addition to ongoing involvement with the entity, it had a key role in establishing that entity or in bringing together relevant counterparties so the transaction that is the purpose of the entity could occur. HSBC is generally not considered a sponsor if the only involvement with the entity is merely administrative. Interests in associates and joint arrangements Joint arrangements are investments in which HSBC, together with one or more parties, has joint control. Depending on HSBC’s rights and obligations, the joint arrangement is classified as either a joint operation or a joint venture. HSBC classifies investments in entities over which it has significant influence, and those that are neither subsidiaries nor joint arrangements, as associates. 378 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements HSBC recognises its share of the assets, liabilities and results in a joint operation. Investments in associates and interests in joint ventures are recognised using the equity method. The attributable share of the results and reserves of joint ventures and associates is included in the consolidated financial statements of HSBC based on either financial statements made up to 31 December or pro-rated amounts adjusted for any material transactions or events occurring between the date the financial statements are available and 31 December. Investments in associates and joint ventures are assessed at each reporting date and tested for impairment when there is an indication that the investment may be impaired, by comparing the recoverable amount of the relevant investment to its carrying amount. Goodwill on acquisition of interests in joint ventures and associates is not tested separately for impairment, but is assessed as part of the carrying amount of the investment. Previously recognised impairments are assessed for reversal when there are indicators that they may no longer exist or have decreased. Any reversal, which may arise only from changes in estimates used to determine the prior impairment loss, is recognised to the extent that it does not increase the carrying amount above that had no impairment loss been previously recognised. Critical estimates and judgements The most significant critical estimates relate to the assessment of impairment or its reversal of our investment in Bank of Communications Co., Limited (‘BoCom’), which involves estimations of value in use: Judgements Estimates – The value in use calculation uses discounted cash flow projections based on management’s best estimate of future earnings available to ordinary shareholders prepared in accordance with IAS 36 ‘Impairment of Assets’. Those cash flows use estimates based on BoCom’s current condition and so do not include estimated cash flows arising from uncommitted future actions that may affect the performance of the investment which will be considered at the relevant time should they arise. – Key assumptions used in estimating BoCom’s value in use and the sensitivity of the value in use calculations to different assumptions are described in Note 18 . (b) Income and expense Operating income Interest income and expense Interest income and expense for all financial instruments, excluding those classified as held for trading or designated at fair value, is recognised in ‘Interest income’ and ‘Interest expense’ in the income statement using the effective interest method. However, as an exception to this, interest on debt instruments issued by HSBC for funding purposes that are designated under the fair value option to reduce an accounting mismatch and on derivatives managed in conjunction with those debt instruments is included in interest expense. Interest on credit-impaired financial assets is recognised by applying the effective interest rate to the amortised cost (i.e. gross carrying amount of the asset less allowance for expected credit losses). Non-interest income and expense HSBC generates fee income from services provided over time, such as account service and card fees, or when HSBC delivers a specific transaction at a point in time, such as broking services and import/export services. With the exception of certain fund management and performance fees, all other fees are generated at a fixed price. Fund management and performance fees can be variable depending on the size of the customer portfolio and HSBC’s performance as fund manager. Variable fees are recognised when all uncertainties are resolved. Fee income is generally earned from short-term contracts with payment terms that do not include a significant financing component. HSBC acts as principal in the majority of contracts with customers, with the exception of broking services. For most brokerage trades, HSBC acts as agent in the transaction and recognises broking income net of fees payable to other parties in the arrangement. HSBC recognises fees earned on transaction-based arrangements at a point in time when it has fully provided the service to the customer. Where the contract requires services to be provided over time, income is recognised on a systematic basis over the life of the agreement. Where HSBC offers a package of services that contains multiple non-distinct performance obligations, such as those included in account service packages, the promised services are treated as a single performance obligation. If a package of services contains distinct performance obligations, the corresponding transaction price is allocated to each performance obligation based on the estimated stand-alone selling prices. Dividend income is recognised when the right to receive payment is established. Net income/(expense) from financial instruments measured at fair value through profit or loss includes the following: – ‘Net income from financial instruments held for trading or managed on a fair value basis’: This comprises net trading activities, which includes all gains and losses from changes in the fair value of financial assets and financial liabilities held for trading and other financial instruments managed on a fair value basis, together with the related interest income, interest expense and dividend income, excluding the effect of changes in the credit risk of liabilities managed on a fair value basis. It also includes all gains and losses from changes in the fair value of derivatives that are managed in conjunction with financial assets and liabilities measured at fair value through profit or loss. – ‘Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss’: This includes all gains and losses from changes in the fair value, together with related interest income, interest expense and dividend income in respect of financial assets and liabilities measured at fair value through profit or loss, and those derivatives managed in conjunction with the above that can be separately identifiable from other trading derivatives. – ‘Changes in fair value of designated debt instruments and related derivatives’: Interest paid on debt instruments and interest cash flows on related derivatives is presented in interest expense where doing so reduces an accounting mismatch. – ‘Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss’: This includes interest on instruments that fail the solely payments of principal and interest (‘SPPI’) test, see (d) below. The accounting policies for insurance service result and insurance finance income/(expense) are disclosed in Note 1.2(j) . HSBC Holdings plc Annual Report on Form 20-F 379 (c) Valuation of financial instruments All financial instruments are initially recognised at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of a financial instrument on initial recognition is generally its transaction price (that is, the fair value of the consideration given or received). However, if there is a difference between the transaction price and the fair value of financial instruments whose fair value is based on a quoted price in an active market or a valuation technique that uses only data from observable markets, HSBC recognises the difference as a trading gain or loss at inception (a ‘day 1 gain or loss’). In all other cases, the entire day 1 gain or loss is deferred and recognised in the income statement over the life of the transaction until the transaction matures, is closed out, the valuation inputs become observable or HSBC enters into an offsetting transaction. The fair value of financial instruments is generally measured on an individual basis. However, in cases where HSBC manages a group of financial assets and liabilities according to its net market or credit risk exposure, the fair value of the group of financial instruments is measured on a net basis but the underlying financial assets and liabilities are presented separately in the financial statements, unless they satisfy the IFRS offsetting criteria. Financial instruments are classified into one of three fair value hierarchy levels, described in Note 12 , ‘Fair values of financial instruments carried at fair value‘. Critical estimates and judgements The majority of valuation techniques employ only observable market data. However, certain financial instruments are classified on the basis of valuation techniques that feature one or more significant market inputs that are unobservable, and for them, the measurement of fair value is more judgemental: Judgements Estimates – An instrument in its entirety is classified as valued using significant unobservable inputs if, in the opinion of management, greater than 5% of the instrument’s valuation is driven by unobservable inputs. – ‘Unobservable’ in this context means that there is little or no current market data available from which to determine the price at which an arm’s length transaction would be likely to occur. It generally does not mean that there is no data available at all upon which to base a determination of fair value (consensus pricing data may, for example, be used). – Details on the Group’s Level 3 financial instruments and the sensitivity of their valuation to the effect of applying reasonably possible alternative assumptions in determining their fair value are set out in Note 12 . (d) Financial instruments measured at amortised cost Financial assets that are held to collect the contractual cash flows and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest are measured at amortised cost. Such financial assets include most loans and advances to banks and customers and some debt securities. In addition, most financial liabilities are measured at amortised cost. HSBC accounts for regular way amortised cost financial instruments using trade date accounting. The carrying amount of these financial assets at initial recognition includes any directly attributable transactions costs. HSBC may commit to underwriting loans on fixed contractual terms for specified periods of time. When the loan arising from the lending commitment is expected to be sold shortly after origination, the commitment to lend is recorded as a derivative. When HSBC intends to hold the loan, the loan commitment is included in the impairment calculations set out below. Financial assets are reclassified only when the business model for their management changes. Such changes, which are expected to be infrequent, are determined by senior management as a result of external or internal changes and must be significant to operations and demonstrable to external parties. Reclassifications are applied prospectively from the first day of the first reporting period following the change of business model. Where a financial asset is reclassified out of the amortised cost measurement category and into the fair value through other comprehensive income measurement category its fair value is measured at the date of reclassification. Any gain or loss arising from a difference between the previous amortised cost and fair value is recognised in other comprehensive income. The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification. Non-trading reverse repurchase, repurchase and similar agreements When debt securities are sold subject to a commitment to repurchase them at a predetermined price (‘repos’), they remain on the balance sheet and a liability is recorded in respect of the consideration received. Securities purchased under commitments to resell (‘reverse repos’) are not recognised on the balance sheet and an asset is recorded in respect of the initial consideration paid. Non-trading repos and reverse repos are measured at amortised cost. The difference between the sale and repurchase price or between the purchase and resale price is treated as interest and recognised in net interest income over the life of the agreement. Contracts that are economically equivalent to reverse repo or repo agreements (such as sales or purchases of debt securities entered into together with total return swaps with the same counterparty) are accounted for similarly to, and presented together with, reverse repo or repo agreements. (e) Financial assets measured at fair value through other comprehensive income Financial assets managed within a business model that is achieved by both collecting contractual cash flows and selling and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest are measured at fair value through other comprehensive income (‘FVOCI’). These comprise primarily debt securities. They are recognised on trade date when HSBC enters into contractual arrangements to purchase and are generally derecognised when they are either sold or redeemed. They are subsequently remeasured at fair value with changes therein (except for those relating to impairment, interest income and foreign currency exchange gains and losses) recognised in other comprehensive income until the assets are sold. Upon disposal, the cumulative gains or losses in other comprehensive income are recognised in the income statement as ‘Gains less losses from financial instruments’. Financial assets measured at FVOCI are included in the impairment calculations set out below and impairment is recognised in profit or loss. 380 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements (f) Equity securities measured at fair value with fair value movements presented in other comprehensive income The equity securities for which fair value movements are shown in other comprehensive income are business facilitation and other similar investments where HSBC holds the investments other than to generate a capital return. Dividends from such investments are recognised in profit or loss. Gains or losses on the derecognition of these equity securities are not transferred to profit or loss. Otherwise, equity securities are measured at fair value through profit or loss. (g) Financial instruments designated at fair value through profit or loss Financial instruments, other than those held for trading, are classified in this category if they meet one or more of the criteria set out below and are so designated irrevocably at inception: – The use of the designation removes or significantly reduces an accounting mismatch. – A group of financial assets and liabilities or a group of financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. – The financial liability contains one or more non-closely related embedded derivatives. Designated financial assets are recognised when HSBC enters into contracts with counterparties, which is generally on trade date, and are normally derecognised when the rights to the cash flows expire or are transferred. Designated financial liabilities are recognised when HSBC enters into contracts with counterparties, which is generally on settlement date, and are normally derecognised when extinguished. Subsequent changes in fair values are recognised in the income statement in ‘Net income from financial instruments held for trading or managed on a fair value basis’ or ‘Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss’ or ‘Changes in fair value of designated debt and related derivatives’ except for the effect of changes in the liabilities’ credit risk, which is presented in ‘Other comprehensive income’, unless that treatment would create or enlarge an accounting mismatch in profit or loss. Under the above criteria, the main classes of financial instruments designated by HSBC are: – Debt instruments for funding purposes that are designated to reduce an accounting mismatch: The interest and/or foreign exchange exposure on certain fixed-rate debt securities issued has been matched with the interest and/or foreign exchange exposure on certain swaps as part of a documented risk management strategy. – Financial assets and financial liabilities under unit-linked and non-linked investment contracts: A contract under which HSBC does not accept significant insurance risk from another party is not classified as an insurance contract, other than investment contracts with discretionary participation features (‘DPF’), but is accounted for as a financial liability. Customer liabilities under linked and certain non-linked investment contracts issued by insurance subsidiaries are determined based on the fair value of the assets held in the linked funds or by a valuation method. The related financial assets and liabilities are managed and reported to management on a fair value basis. Designation at fair value of the financial assets and related liabilities allows changes in fair values to be recorded in the income statement and presented in the same line. – Financial liabilities that contain both deposit and derivative components: These financial liabilities are managed and their performance evaluated on a fair value basis. (h) Derivatives Derivatives are financial instruments that derive their value from the price of underlying items such as equities, interest rates or other indices. Derivatives are recognised initially and are subsequently measured at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. This includes embedded derivatives in financial liabilities, which are bifurcated from the host contract when they meet the definition of a derivative on a stand-alone basis. Where the derivatives are managed with debt securities issued by HSBC that are designated at fair value where doing so reduces an accounting mismatch, the contractual interest is shown in ‘Interest expense’ together with the interest payable on the issued debt. Hedge accounting When derivatives are not part of fair value designated relationships, if held for risk management purposes they are designated in hedge accounting relationships where the required criteria for documentation and hedge effectiveness are met. HSBC uses these derivatives or, where allowed, other non-derivative hedging instruments in fair value hedges, cash flow hedges or hedges of net investments in foreign operations as appropriate to the risk being hedged. Fair value hedge Fair value hedge accounting does not change the recording of gains and losses on derivatives and other hedging instruments, but results in recognising changes in the fair value of the hedged assets or liabilities attributable to the hedged risk that would not otherwise be recognised in the income statement. If a hedge relationship no longer meets the criteria for hedge accounting, hedge accounting is discontinued and the cumulative adjustment to the carrying amount of a hedged item for which the effective interest rate method is used is amortised to the income statement on a recalculated effective interest rate, unless the hedged item has been derecognised, in which case it is recognised in the income statement immediately. Cash flow hedge The effective portion of gains and losses on hedging instruments is recognised in other comprehensive income and the ineffective portion of the change in fair value of derivative hedging instruments that are part of a cash flow hedge relationship is recognised immediately in the income statement within ‘Net income from financial instruments held for trading or managed on a fair value basis’. The accumulated gains and losses recognised in other comprehensive income are reclassified to the income statement in the same periods in which the hedged item affects profit or loss. When a hedge relationship is discontinued, or partially discontinued, any cumulative gain or loss recognised in other comprehensive income remains in equity until the forecast transaction is recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss previously recognised in other comprehensive income is immediately reclassified to the income statement. HSBC Holdings plc Annual Report on Form 20-F 381 Net investment hedge Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. The effective portion of gains and losses on the hedging instrument is recognised in other comprehensive income and other gains and losses are recognised immediately in the income statement. Gains and losses previously recognised in other comprehensive income are reclassified to the income statement on the disposal, or part-disposal, of the foreign operation. Derivatives that do not qualify for hedge accounting Non-qualifying hedges are derivatives entered into as economic hedges of assets and liabilities for which hedge accounting was not applied. ( i) Impairment of amortised cost and FVOCI financial assets Expected credit losses (‘ECL’) are recognised for loans and advances to banks and customers, non-trading reverse repurchase agreements, other financial assets held at amortised cost, debt instruments measured at FVOCI, and certain loan commitments and financial guarantee contracts. At initial recognition, an allowance (or provision in the case of some loan commitments and financial guarantees) is recognised for ECL resulting from possible default events within the next 12 months, or less, where the remaining life is less than 12 months (’12-month ECL’). In the event of a significant increase in credit risk, an allowance (or provision) is recognised for ECL resulting from all possible default events over the expected life of the financial instrument (‘lifetime ECL’). Financial assets where 12-month ECL is recognised are considered to be ‘stage 1’; financial assets which are considered to have experienced a significant increase in credit risk are in ‘stage 2’; and financial assets for which there is objective evidence of impairment, and so are considered to be in default or otherwise credit impaired are in ‘stage 3’. Purchased or originated credit-impaired financial assets (‘POCI’) are treated differently as set out below. Credit impaired (stage 3) HSBC determines that a financial instrument is credit impaired and in stage 3 by considering relevant objective evidence, primarily whether contractual payments of either principal or interest are past due for more than 90 days, there are other indications that the borrower is unlikely to pay such as that a concession has been granted to the borrower for economic or legal reasons relating to the borrower’s financial condition, or the loan is otherwise considered to be in default. If such unlikeliness to pay is not identified at an earlier stage, it is deemed to occur when an exposure is 90 days past due. Therefore, the definitions of credit impaired and default are aligned as far as possible so that stage 3 represents all loans that are considered defaulted or otherwise credit impaired. Interest income is recognised by applying the effective interest rate to the amortised cost (i.e. gross carrying amount less allowance for ECL). Write-off Financial assets (and the related impairment allowances) are normally written off, either partially or in full, when there is no realistic prospect of recovery. Where loans are secured, this is generally after receipt of any proceeds from the realisation of security. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier. Forbearance Loans are identified as forborne and classified as either performing or non-performing when HSBC modifies the contractual terms due to financial difficulty of the borrower. Non-performing forborne loans are stage 3 and classified as non-performing until they meet the curing criteria, as specified by applicable credit risk policy (for example, when the loan is no longer in default and no other indicators of default have been present for at least 12 months). Any amount written off as a result of any modification of contractual terms upon entering forbearance would not be reversed. T he Group applies the EBA Guidelines on the application of definition of default for our retail portfolios, which affect credit risk policies and our reporting in respect of the status of loans as credit impaired principally due to forbearance (or curing thereof). Further details are provided under ‘Forborne loans and advances’ on page 170 . Performing forborne loans are initially stage 2 and remain classified as forborne until they meet applicable curing criteria (for example, they continue to not be in default and no other indicators of default are present for a period of at least 24 months). At this point, the loan is either stage 1 or stage 2 as determined by comparing the risk of a default occurring at the reporting date (based on the modified contractual terms) and the risk of a default occurring at initial recognition (based on the original, unmodified contractual terms) . A forborne loan is derecognised if the existing agreement is cancelled and a new agreement is made on substantially different terms, or if the terms of an existing agreement are modified such that the forborne loan is a substantially different financial instrument. Any new loans that arise following derecognition events in these circumstances would generally be classified as POCI and will continue to be disclosed as forborne. Loan modifications other than forborne loans Loan modifications that are not identified as forborne are considered to be commercial restructurings. Where a commercial restructuring results in a modification (whether legalised through an amendment to the existing terms or the issuance of a new loan contract) such that HSBC’s rights to the cash flows under the original contract have expired, the old loan is derecognised and the new loan is recognised at fair value. The rights to cash flows are generally considered to have expired if the commercial restructuring is at market rates and no payment-related concession has been provided. Modifications of certain higher credit risk wholesale loans are assessed for derecognition, having regard to changes in contractual terms that either individually or in combination are judged to result in a substantially different financial instrument. Mandatory and general offer loan modifications that are not borrower specific, for example market-wide customer relief programmes, generally do not result in derecognition, but their stage allocation is determined considering all available and supportable information under our ECL impairment policy. Changes made to these financial instruments that are economically equivalent and required by interest rate benchmark reform do not result in the derecognition or a change in the carrying amount of the financial instrument, but instead require the effective interest rate to be updated to reflect the change of the interest rate benchmark. 382 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Significant increase in credit risk (stage 2) An assessment of whether credit risk has increased significantly since initial recognition is performed at each reporting period by considering the change in the risk of default occurring over the remaining life of the financial instrument. The assessment explicitly or implicitly compares the risk of default occurring at the reporting date compared with that at initial recognition, taking into account reasonable and supportable information, including information about past events, current conditions and future economic conditions. The assessment is unbiased, probability-weighted, and to the extent relevant, uses forward-looking information consistent with that used in the measurement of ECL. The analysis of credit risk is multifactor. The determination of whether a specific factor is relevant and its weight compared with other factors depends on the type of product, the characteristics of the financial instrument and the borrower, and the geographical region. Therefore, it is not possible to provide a single set of criteria that will determine what is considered to be a significant increase in credit risk, and these criteria will differ for different types of lending, particularly between retail and wholesale. However, unless identified at an earlier stage, all financial assets are deemed to have suffered a significant increase in credit risk when 30 days past due. In addition, wholesale loans that are individually assessed, which are typically corporate and commercial customers, and included on a watch or worry list, are included in stage 2. For wholesale portfolios, the quantitative comparison assesses default risk using a lifetime probability of default (‘PD’), which encompasses a wide range of information including the obligor’s customer risk rating (‘CRR’), macroeconomic condition forecasts and credit transition probabilities. For origination CRRs up to 3.3, significant increase in credit risk is measured by comparing the average PD for the remaining term estimated at origination with the equivalent estimation at the reporting date. The quantitative measure of significance varies depending on the credit quality at origination as follows: Origination CRR Significance trigger – PD to increase by 0.1–1.2 15 bps 2.1–3.3 30 bps For CRRs greater than 3.3 that are not impaired, a significant increase in credit risk is considered to have occurred when the origination PD has doubled. The significance of changes in PD was informed by expert credit risk judgement, referenced to historical credit migrations and to relative changes in external market rates. For loans originated prior to the implementation of IFRS 9, the origination PD does not include adjustments to reflect expectations of future macroeconomic conditions since these are not available without the use of hindsight. In the absence of this data, origination PD must be approximated assuming through-the-cycle PDs and through-the-cycle migration probabilities, consistent with the instrument’s underlying modelling approach and the CRR at origination. For these loans, the quantitative comparison is supplemented with additional CRR deterioration- based thresholds, as set out in the table below: Origination CRR Additional significance criteria – number of CRR grade notches deterioration required to identify as significant credit deterioration (stage 2) (> or equal to) 0.1 5 notches 1.1–4.2 4 notches 4.3–5.1 3 notches 5.2–7.1 2 notches 7.2–8.2 1 notch 8.3 0 notch Further information about the 23-grade scale used for CRR can be found on page 170 . For retail portfolios, default risk is assessed using a reporting date 12-month PD derived from internal models, which incorporate all available information about the customer. This PD is adjusted for the effect of macroeconomic forecasts for periods longer than 12 months and is considered to be a reasonable approximation of a lifetime PD measure. Retail exposures are first segmented into homogenous portfolios, generally by country, product and brand. Within each portfolio, the stage 2 accounts are defined as accounts with an adjusted 12-month PD greater than the average 12-month PD of loans in that portfolio 12 months before they become 30 days past due. The expert credit risk judgement is that no prior increase in credit risk is significant. This portfolio-specific threshold therefore identifies loans with a PD higher than would be expected from loans that are performing as originally expected and higher than that which would have been acceptable at origination. It therefore approximates a comparison of origination to reporting date PDs. We continue to refine the retail transfer criteria approach for certain portfolios as additional data becomes available, in order to utilise a more relative approach. These enhancements take advantage of the increase in origination-related data in the assessment of significant increases in credit risk by comparing remaining lifetime PD to the comparable remaining term lifetime PD at origination based on portfolio-specific origination segments. Unimpaired and without significant increase in credit risk (stage 1) ECL resulting from default events that are possible within the next 12 months (‘12-month ECL’) are recognised for financial instruments that remain in stage 1. Purchased or originated credit impaired Financial assets that are purchased or originated at a deep discount that reflects the incurred credit losses are considered to be POCI. This population includes new financial instruments recognised in most cases following the derecognition of forborne loans. The amount of change in lifetime ECL for a POCI loan is recognised in profit or loss until the POCI loan is derecognised, even if the lifetime ECL are less than the amount of ECL included in the estimated cash flows on initial recognition. Movement between stages Financial assets can be transferred between the different categories (other than POCI) depending on their relative increase in credit risk since initial recognition. Financial instruments are transferred out of stage 2 if their credit risk is no longer considered to be significantly increased since initial recognition based on the assessments described above. In the case of non-performing forborne loans, such financial instruments are transferred out of stage 3 when they no longer exhibit any evidence of credit impairment and meet the curing criteria as described above. HSBC Holdings plc Annual Report on Form 20-F 383 Measurement of ECL The assessment of credit risk and the estimation of ECL are unbiased and probability-weighted, and incorporate all available information which is relevant to the assessment including information about past events, current conditions and reasonable and supportable forecasts of future events and economic conditions at the reporting date. In addition, the estimation of ECL should take into account the time value of money and considers other factors such as climate-related risks. In general, HSBC calculates ECL using three main components: a probability of default (‘PD’), a loss given default (’LGD’) and the exposure at default (‘EAD’). The 12-month ECL is calculated by multiplying the 12-month PD, LGD and EAD. Lifetime ECL is calculated using the lifetime PD instead. The 12-month and lifetime PDs represent the probability of default occurring over the next 12 months and the remaining maturity of the instrument respectively. The EAD represents the expected balance at default, taking into account the repayment of principal and interest from the balance sheet date to the default event together with any expected drawdowns of committed facilities. The LGD represents expected losses on the EAD given the event of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to be realised and the time value of money. HSBC makes use of the IRB framework where possible, with recalibration to meet the differing IFRS 9 requirements as set out in the following table: Model Regulatory capital IFRS 9 PD – Represents long-run average PD throughout a full economic cycle (for mortgage portfolios a hybrid approach, which sits between the extremes of point in time and through the cycle, is used for calculating long-run averages as required by the PRA) – Default backstop of 90+ days past due for all portfolios (includes unlikely to pay (‘UTP’) criteria in line with internal policy) – May be subject to a sovereign cap – Represents current portfolio quality and performance, adjusted for the impact of multiple forward-looking macroeconomic scenarios – Default backstop of 90+ days past due for all portfolios (includes UTP criteria in line with internal policy) EAD – Cannot be lower than current balance – Amortisation captured for term products – Future drawdown captured for revolving products LGD – Downturn LGD (consistent with losses we would expect to suffer during a severe but plausible economic downturn) – Regulatory floors may apply to mitigate risk of underestimating downturn LGD due to lack of historical data – Discounted using appropriate index (minimum 9%) – All collection costs included – LGD based on recent portfolio performance data and includes the expected impact of future economic conditions such as change in the value of collateral – No floors applied, discounted using the original effective interest rate – Only costs associated with selling collateral and certain third-party costs are included Other – Discounted back from point of default to balance sheet date While 12-month PDs are recalibrated from IRB models where possible, the lifetime PDs are determined by projecting the 12-month PD using a term structure. For the wholesale methodology, the lifetime PD also takes into account credit migration, i.e. a customer migrating through the CRR bands over its life. The ECL for wholesale stage 3 is determined primarily on an individual basis using a discounted cash flow (‘DCF’) methodology. The expected future cash flows are based on estimates as of the reporting date, reflecting reasonable and supportable assumptions and projections of future recoveries and expected future receipts of interest. Collateral is taken into account if it is likely that the recovery of the outstanding amount will include realisation of collateral based on its estimated fair value of collateral at the time of expected realisation, less costs for obtaining and selling the collateral. The cash flows are discounted at a reasonable approximation of the original effective interest rate. For significant cases, cash flows under up to four different scenarios are probability-weighted by reference to the status of the borrower, economic scenarios applied more generally by the Group and judgement in relation to the likelihood of the work-out strategy succeeding or receivership being required. For less significant cases where an individual assessment is undertaken, the effect of different economic scenarios and work-out strategies results in an ECL calculation based on a most likely outcome which is adjusted to capture losses resulting from less likely but possible outcomes. For certain less significant cases, the bank may use an LGD-based modelled approach to ECL assessment, which factors in a range of economic scenarios. Period over which ECL is measured Expected credit loss is measured from the initial recognition of the financial asset. The maximum period considered when measuring ECL (be it 12-month or lifetime ECL) is the maximum contractual period over which HSBC is exposed to credit risk. However, where the financial instrument includes both a drawn and undrawn commitment and the contractual ability to demand repayment and cancel the undrawn commitment does not serve to limit HSBC’s exposure to credit risk to the contractual notice period, the contractual period does not determine the maximum period considered. Instead, ECL is measured over the period HSBC remains exposed to credit risk that is not mitigated by credit risk management actions. This applies to retail overdrafts and credit cards, where the period is the average time taken for stage 2 exposures to default or close as performing accounts, determined on a portfolio basis and ranging from between two and six years . In addition, for these facilities it is not possible to identify the ECL on the loan commitment component separately from the financial asset component. As a result, the total ECL is recognised in the loss allowance for the financial asset unless the total ECL exceeds the gross carrying amount of the financial asset, in which case the ECL is recognised as a provision. For wholesale overdraft facilities, credit risk management actions are taken no less frequently than on an annual basis. Forward-looking economic inputs HSBC applies multiple forward-looking global economic scenarios determined with reference to external forecast distributions representative of its view of forecast economic conditions. This approach is considered sufficient to calculate unbiased expected credit losses in most economic environments. In certain economic environments, additional analysis may be necessary and may result in additional scenarios or adjustments, to reflect a range of possible economic outcomes sufficient for an unbiased estimate. The detailed methodology is disclosed in ‘Measurement uncertainty and sensitivity analysis of ECL estimates’ on page 178 . 384 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Critical estimates and judgements The calculation of the Group’s ECL under IFRS 9 requires the Group to make a number of judgements, assumptions and estimates. The most significant are set out below: Judgements Estimates – Defining what is considered to be a significant increase in credit risk – Determining the lifetime and point of initial recognition of overdrafts and credit cards – Selecting and calibrating the PD, LGD and EAD models, which support the calculations, including making reasonable and supportable judgements about how models react to current and future economic conditions – Selecting model inputs and economic forecasts, including determining whether sufficient and appropriately weighted economic forecasts are incorporated to calculate unbiased expected credit loss – Making management adjustments to account for late-breaking events, model and data limitations and deficiencies, and expert credit judgements – Selecting applicable recovery strategies for certain wholesale credit-impaired loans – The section ‘Measurement uncertainty and sensitivity analysis of ECL estimates’, marked as audited from page 178 , sets out the assumptions used in determining ECL, and provides an indication of the sensitivity of the result to the application of different weightings being applied to different economic assumptions (j) Insurance contracts A contract is classified as an insurance contract where the Group accepts significant insurance risk from another party by agreeing to compensate that party if it is adversely affected by a specified uncertain future event. An insurance contract may also transfer financial risk, but is accounted for as an insurance contract if the insurance risk is significant. In addition, the Group issues investment contracts with discretionary participation features ('DPF’), which are also accounted under IFRS 17 ’Insurance Contracts’. Aggregation of insurance contracts Individual insurance contracts that are managed together and subject to similar risks are identified as a portfolio. Contracts that are managed together usually belong to the same product group, and have similar characteristics such as being subject to a similar pricing framework or similar product management, and are issued by the same legal entity. If a contract is exposed to more than one risk, the dominant risk of the contract is used to assess whether the contract features similar risks. Each portfolio is further separated by the contract’s expected profitability. The portfolios are split by their profitability into: (i) contracts that are onerous at initial recognition; (ii) contracts that at initial recognition have no significant possibility of becoming onerous subsequently; and (iii) the remaining contracts. These profitability groups are then divided by issue date, with most contracts the Group issues after the transition date being grouped into calendar quarter cohorts. For multi-currency groups of contracts, the Group considers its groups of contracts as being denominated in a single currency. The measurement of the insurance contract liability is based on groups of insurance contracts as established at initial recognition, and will include fulfilment cash flows as well as the CSM representing the unearned profit. The Group’s accounting policy is to update the estimates used in the measurement on a year-to-date basis. Fulfilment cash flows The fulfilment cash flows comprise the following: Best estimates of future cash flows The cash flows within the contract boundary of each contract in the Group include amounts expected to be collected from premiums and payouts for claims, benefits and expenses, and are projected using a range of scenarios and assumptions in an unbiased way based on the Group’s demographic and operating experience along with external mortality data where the Group’s own experience data is not sufficiently large in size to be credible. Adjustment for the time value of money and financial risks associated with the future cash flows The estimates of future cash flows are adjusted to reflect the time value of money (i.e. discounting) and the financial risks to derive an expected present value. The Group generally makes use of stochastic modelling techniques in the estimation for products with options and guarantees. A bottom-up approach is used to determine the discount rate to be applied to a given set of expected future cash flows. This is derived as the sum of the risk-free yield and an illiquidity premium. The risk-free yield is determined based on observable market data, where such markets are considered to be deep, liquid and transparent. When information is not available, management judgement is applied to determine the appropriate risk-free yield. Illiquidity premiums reflect the liquidity characteristics of the associated insurance contracts. Risk adjustment for non-financial risk The risk adjustment reflects the compensation required for bearing the uncertainty about the amount and timing of future cash flows that arises from non-financial risk. It is calculated as a 75 th percentile level of stress over a one-year period. The level of the stress is determined with reference to external regulatory stresses and internal economic capital stresses. For the main insurance manufacturing entity in these locations, the one-year 75 th percentile level of stress corresponds to the following percentiles based on an ultimate view of risk over all future years : – Asia-Pacific (Hong Kong): 60 th percentile (2023: 60 th percentile). – Europe (France): 60 th percentile (2023: 60 th percentile). – Latin America (Mexico): 64 th percentile (2023: 65 th percentile). The Group does not disaggregate changes in the risk adjustment between insurance service result (comprising insurance revenue and insurance service expense) and insurance finance income or expenses. All changes are included in the insurance service result. HSBC Holdings plc Annual Report on Form 20-F 385 Measurement models The variable fee approach (‘VFA’) measurement model is used for most of the contracts issued by the Group, which is mandatory upon meeting the following eligibility criteria at inception: – the contractual terms specify that the policyholder participates in a share of a clearly identified pool of underlying items; – the Group expects to pay to the policyholder a substantial share of the fair value returns on the underlying items. The Group considers that a substantial share is a majority of returns; and – the Group expects a substantial proportion of any change in the amounts to be paid to the policyholder to vary with the change in fair value of the underlying items. The Group considers that a substantial proportion is a majority proportion of change on a present value probability- weighted average of all scenarios. For some contracts measured under VFA, the other comprehensive income (‘OCI’) option is used. The OCI option is applied where the underlying items held by the Group are not accounted for at fair value through profit or loss. Under this option, only the amount that matches income or expenses recognised in profit or loss on underlying items is included in finance income or expenses for these insurance contracts, and hence results in the elimination of accounting mismatches. The remaining amount of finance income or expenses for these insurance contracts issued for the period is recognised in OCI. In addition, the risk mitigation option is used for a number of economic offsets against the instruments that meet specific requirements. The remaining contracts issued and the reinsurance contracts held are accounted for under the general measurement model (‘GMM’). CSM and coverage units The CSM represents the unearned profit and results in no income or expense at initial recognition when the group of contracts is profitable. The CSM is adjusted at each subsequent reporting period for changes in fulfilment cash flows relating to future service (e.g. changes in non- economic assumptions, including mortality and morbidity rates). For initial recognition of onerous groups of contracts and when groups of contracts become onerous subsequently, losses are recognised in insurance service expense immediately. For groups of contracts measured using the VFA, changes in the Group’s share of the underlying items, and economic experience and economic assumption changes adjust the CSM, whereas these changes do not adjust the CSM under the GMM, but are recognised in profit or loss as they arise. However, under the risk mitigation option for VFA contracts, the changes in the fulfilment cash flows and the changes in the Group’s share in the fair value return on underlying items that the instruments mitigate are not adjusted in CSM but recognised in profit or loss. The risk mitigating instruments are primarily reinsurance contracts held. The CSM is systematically recognised in insurance revenue to reflect the insurance contract services provided, based on the coverage units of the group of contracts. Coverage units are determined by the quantity of benefits and the expected coverage period of the contracts. The Group identifies the quantity of the benefits provided as follows: – Insurance coverage: This is based on the expected net policyholder insurance benefit at each period after allowance for decrements, where net policyholder insurance benefit refers to the amount of sum assured less the fund value or surrender value. – Investment services (including both investment-return service and investment-related service): This is based on a constant measure basis which reflects the provision of access for the policyholder to the facility. For contracts that provide both insurance coverage and investment services, coverage units are weighted according to the expected present value of the future cash outflows for each service. Insurance service result Insurance revenue reflects the consideration to which the Group expects to be entitled in exchange for the provision of coverage and other insurance contract services (excluding any investment components). Insurance service expenses comprise the incurred claims and other incurred insurance service expenses (excluding any investment components), and losses on onerous groups of contracts and reversals of such losses. Insurance finance income and expenses Insurance finance income and expenses comprise the change in the carrying amount of the group of insurance contracts arising from the effects of the time value of money, financial risk and changes therein. For VFA contracts, changes in the fair value of underlying items (excluding additions and withdrawals) are recognised in insurance finance income or expenses. (k) Employee compensation and benefits Share-based payments HSBC enters into both equity-settled and cash-settled share-based payment arrangements with its employees as compensation for the provision of their services. The vesting period for these schemes may commence before the legal grant date if the employees have started to render services in respect of the award before the legal grant date, where there is a shared understanding of the terms and conditions of the arrangement. Expenses are recognised when the employee starts to render service to which the award relates. Cancellations result from the failure to meet a non-vesting condition during the vesting period, and are treated as an acceleration of vesting recognised immediately in the income statement. Failure to meet a vesting condition by the employee is not treated as a cancellation, and the amount of expense recognised for the award is adjusted to reflect the number of awards expected to vest. 386 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Post-employment benefit plans HSBC operates a number of pension schemes including defined benefit, defined contribution and other post-employment benefit schemes. Payments to defined contribution schemes are charged as an expense as the employees render service. Defined benefit pension obligations are calculated using the projected unit credit method. The net charge to the income statement mainly comprises the service cost and the net interest on the net defined benefit asset or liability, and is presented in operating expenses. Remeasurements of the net defined benefit asset or liability, which comprise actuarial gains and losses, return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. The net defined benefit asset or liability represents the present value of defined benefit obligations reduced by the fair value of plan assets (see Note 1.2(c) ), after applying the asset ceiling test, where the net defined benefit surplus is limited to the present value of available refunds and reductions in future contributions to the plan. The costs of obligations arising from other post-employment plans are accounted for on the same basis as defined benefit pension plans. Critical estimates and judgements The most significant critical estimates relate to the determination of key assumptions applied in calculating the defined benefit pension obligation for the principal plan. Judgements Estimates – A range of assumptions could be applied, and different assumptions could significantly alter the defined benefit obligation and the amounts recognised in profit or loss or OCI. – The calculation of the defined benefit pension obligation includes assumptions with regard to the discount rate, inflation rate, pension payments and deferred pensions, pay and mortality. Management determines these assumptions in consultation with the plan’s actuaries. – Key assumptions used in calculating the defined benefit pension obligation for the principal plan and the sensitivity of the calculation to different assumptions are described in Note 5 . (l) Tax Income tax comprises current tax and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case the tax is recognised in the same statement as the related item appears. Current tax is the tax expected to be payable on the taxable profit for the year and on any adjustment to tax payable in respect of previous years. HSBC provides for potential current tax liabilities that may arise on the basis of the amounts expected to be paid to the tax authorities. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet, and the amounts attributed to such assets and liabilities for tax purposes. Deferred tax is calculated using the tax rates expected to apply in the periods in which the assets will be realised or the liabilities settled. In assessing the probability and sufficiency of future taxable profit, management considers the availability of evidence to support the recognition of deferred tax assets, taking into account the inherent risks in long-term forecasting, including climate change-related, and drivers of recent history of tax losses where applicable. Management also considers the future reversal of existing taxable temporary differences and tax planning strategies, including corporate reorganisations. Current and deferred tax are calculated based on tax rates and laws enacted, or substantively enacted, by the balance sheet date. Critical estimates and judgements The recognition of deferred tax assets depends on judgements and estimates. Judgements Estimates – Specific judgements supporting deferred tax assets are described in Note 7 . – The recognition of deferred tax assets is sensitive to estimates of future cash flows projected for periods for which detailed forecasts are available and to assumptions regarding the long-term pattern of cash flows thereafter, on which forecasts of future taxable profit are based, and which affect the expected recovery periods and the pattern of utilisation of tax losses and tax credits. See Note 7 for further detail. The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of deferred tax assets in the next financial year, but does consider this to be an area that is inherently judgemental. (m) Provisions, contingent liabilities and guarantees Provisions Provisions are recognised when it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation that has arisen as a result of past events and for which a reliable estimate can be made. HSBC Holdings plc Annual Report on Form 20-F 387 Critical estimates and judgements The recognition and measurement of provisions requires the Group to make a number of judgements, assumptions and estimates. The most significant are set out below: Judgements Estimates – Determining whether a present obligation exists. Professional advice is taken on the assessment of litigation and similar obligations. – Provisions for legal proceedings and regulatory matters typically require a higher degree of judgement than other types of provisions. When matters are at an early stage, accounting judgements can be difficult because of the high degree of uncertainty associated with determining whether a present obligation exists, and estimating the probability and amount of any outflows that may arise. As matters progress, management and legal advisers evaluate on an ongoing basis whether provisions should be recognised, revising previous estimates as appropriate. At more advanced stages, it is typically easier to make estimates around a better defined set of possible outcomes. – Provisions for legal proceedings and regulatory matters remain very sensitive to the assumptions used in the estimate. There could be a wider range of possible outcomes for any pending legal proceedings, investigations or inquiries. As a result it is often not practicable to quantify a range of possible outcomes for individual matters. It is also not practicable to meaningfully quantify ranges of potential outcomes in aggregate for these types of provisions because of the diverse nature and circumstances of such matters and the wide range of uncertainties involved. Contingent liabilities, contractual commitments and guarantees Contingent liabilities Contingent liabilities, which include certain guarantees and letters of credit pledged as collateral security, and contingent liabilities related to legal proceedings or regulatory matters, are not recognised in the financial statements but are disclosed unless the probability of settlement is remote. Financial guarantee contracts Liabilities under financial guarantee contracts that are not classified as insurance contracts are recorded initially at their fair value, which is generally the fee received or present value of the fee receivable. (n) Impairment of non-financial assets Software under development is tested for impairment at least annually. Other non-financial assets are property, plant and equipment, intangible assets (excluding goodwill) and right-of-use assets. They are tested for impairment at the individual asset level when there is indication of impairment at that level, or at the CGU level for assets that do not have a recoverable amount at the individual asset level. In addition, impairment is also tested at the CGU level when there is indication of impairment at that level. For this purpose, CGUs are considered to be the principal operating legal entities divided by global business. Impairment testing compares the carrying amount of the non-financial asset or CGU with its recoverable amount, which is the higher of the fair value less costs of disposal or the value in use. The carrying amount of a CGU comprises the carrying amount of its assets and liabilities, including non-financial assets that are directly attributable to it and non-financial assets that can be allocated to it on a reasonable and consistent basis. Non-financial assets that cannot be allocated to an individual CGU are tested for impairment at an appropriate grouping of CGUs. The recoverable amount of the CGU is the higher of the fair value less costs of disposal of the CGU, which is determined by independent and qualified valuers where relevant, and the value in use, which is calculated based on appropriate inputs (see Note 21 ). When the recoverable amount of a CGU is less than its carrying amount, an impairment loss is recognised in the income statement to the extent that the impairment can be allocated on a pro-rata basis to the non-financial assets by reducing their carrying amounts to the higher of their respective individual recoverable amount or nil. Impairment is not allocated to the financial assets in a CGU. Impairment losses recognised in prior periods for non-financial assets are reversed when there has been a change in the estimate used to determine the recoverable amount. The impairment loss is reversed to the extent that the carrying amount of the non-financial assets would not exceed the amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised in prior periods. Critical estimates and judgements The review of goodwill and other non-financial assets for impairment reflects management’s best estimate of the future cash flows of the CGUs and the rates used to discount these cash flows, both of which are subject to uncertain factors as described in the ‘Critical estimates and judgements’ in Note 1.2(a). The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of goodwill and non-financial assets in the next financial year, but does consider this to be an area that is inherently judgemental. ( o) Non-current assets and disposal groups held for sale HSBC classifies non-current assets or disposal groups (including assets and liabilities) as held for sale when their carrying amounts will be recovered principally through sale rather than through continuing use. To be classified as held for sale, the non-current asset or disposal group must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups), and the sale must be highly probable. For a sale to be highly probable, the appropriate level of management must be committed to a plan to sell the asset (or disposal group) and an active programme to locate a buyer and complete the plan must have been initiated. Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the sale should be expected to qualify as a completed sale within one year from the date of classification and actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Held for sale assets and disposal groups are measured at the lower of their carrying amount and fair value less costs to sell except for those assets and liabilities that are not within the scope of the measurement requirements of IFRS 5. If the carrying amount of the non-current asset (or disposal group) is greater than the fair value less costs to sell, an impairment loss for any initial or subsequent write-down of the asset or disposal group to fair value less costs to sell is recognised. Any such impairment loss is first allocated against the non-current assets that are in scope of IFRS 5 for measurement. This first reduces the carrying amount of any goodwill allocated to the disposal group, and then to the other non-current assets of the disposal group pro rata on the basis of the carrying amount of each asset in the disposal group. Thereafter, any impairment loss in excess of the carrying amount of the non-current assets in scope of IFRS 5 for measurement is recognised against the total assets of the disposal group. 388 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements 2 Net fee income Net fee income by global business 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Funds under management 1,864 78 497 — 2,439 Cards 2,448 351 44 — 2,843 Credit facilities 85 722 621 — 1,428 Broking income 561 13 716 — 1,290 Account services 348 791 360 — 1,499 Unit trusts 1,060 10 1 — 1,071 Underwriting — 8 683 — 691 Global custody 120 7 704 — 831 Remittances 77 387 361 — 825 Imports/exports — 463 182 — 645 Insurance agency commission 329 18 — — 347 Other 1,551 1,249 2,725 ( 3,168 ) 2,357 Fee income 8,443 4,097 6,894 ( 3,168 ) 16,266 Less: fee expense ( 2,513 ) ( 245 ) ( 4,348 ) 3,141 ( 3,965 ) Net fee income 5,930 3,852 2,546 ( 27 ) 12,301 2023 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Funds under management 1,763 71 539 — 2,373 Cards 2,385 353 38 — 2,776 Credit facilities 103 856 615 — 1,574 Broking income 463 22 592 — 1,077 Account services 402 788 347 — 1,537 Unit trusts 727 10 1 — 738 Underwriting — 3 583 — 586 Global custody 128 6 730 — 864 Remittances 86 389 347 1 823 Imports/exports — 470 154 — 624 Insurance agency commission 280 18 — — 298 Other 1,433 1,161 2,458 ( 2,706 ) 2,346 Fee income 7,770 4,147 6,404 ( 2,705 ) 15,616 Less: fee expense ( 2,416 ) ( 210 ) ( 3,858 ) 2,713 ( 3,771 ) Net fee income 5,354 3,937 2,546 8 11,845 2022 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Funds under management 1,765 107 500 ( 12 ) 2,360 Cards 2,146 313 32 — 2,491 Credit facilities 100 783 591 — 1,474 Broking income 576 40 635 — 1,251 Account services 337 730 344 1 1,412 Unit trusts 682 14 — — 696 Underwriting 1 2 443 ( 5 ) 441 Global custody 140 19 762 — 921 Remittances 72 380 346 1 799 Imports/exports — 493 141 — 634 Insurance agency commission 283 16 1 — 300 Other 1,330 1,102 2,376 ( 2,463 ) 2,345 Fee income 7,432 3,999 6,171 ( 2,478 ) 15,124 Less: fee expense ( 2,128 ) ( 212 ) ( 3,459 ) 2,445 ( 3,354 ) Net fee income 5,304 3,787 2,712 ( 33 ) 11,770 Net fee income included $ 6,816 m of fees earned on financial assets that were not at fair value through profit or loss, other than amounts included in determining the effective interest rate (2023: $ 6,971 m ; 2022: $ 6,410 m ), $ 1,951 m of fees payable on financial liabilities that were not at fair value through profit or loss, other than amounts included in determining the effective interest rate (2023: $ 1,872 m ; 2022: $ 1,613 m ), $ 3,480 m of fees earned on trust and other fiduciary activities (2023: $ 3,452 m ; 2022: $ 3,492 m ) and $ 401 m of fees payable relating to trust and other fiduciary activities (2023: $ 333 m ; 2022: $ 370 m ). HSBC Holdings plc Annual Report on Form 20-F 389 3 Net income/(expense) from financial instruments measured at fair value through profit or loss 2024 2023 2022 $m $m $m Net income/(expense) arising on: Net trading activities 23,186 20,391 2,372 Other instruments managed on a fair value basis ( 2,070 ) ( 3,730 ) 7,906 Net income from financial instruments held for trading or managed on a fair value basis 21,116 16,661 10,278 Financial assets held to meet liabilities under insurance and investment contracts 6,210 8,086 ( 14,392 ) Liabilities to customers under investment contracts ( 309 ) ( 199 ) 561 Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss 5,901 7,887 ( 13,831 ) HSBC Holdings 2024 2023 2022 $m $m $m Net income/(expense) arising on: Net trading activities 984 ( 546 ) 2,094 Other instruments managed on a fair value basis 1,915 1,609 35 Net income from financial instruments held for trading or managed on a fair value basis 2,899 1,063 2,129 Derivatives managed in conjunction with HSBC Holdings-issued debt securities 93 426 ( 1,529 ) Other changes in fair value ( 218 ) ( 1,894 ) 3,673 Changes in fair value of designated debt and related derivatives ( 125 ) ( 1,468 ) 2,144 Changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss 2,086 3,692 ( 2,409 ) Year ended 31 Dec 4,860 3,287 1,864 4 Insurance business Insurance service result Year ended 31 Dec 2024 Year ended 31 Dec 2023 Life direct participating and investment DPF contracts 1 Life other contracts 2 Total Life direct participating and investment DPF contracts 1 Life other contracts 2 Total $m $m $m $m $m $m Insurance revenue Amounts relating to changes in liabilities for remaining coverage 1,890 566 2,456 1,626 470 2,096 –  Contractual service margin recognised for services provided 1,143 188 1,331 975 151 1,126 –  Change in risk adjustment for non-financial risk for risk expired 46 20 66 21 15 36 –  Expected incurred claims and other insurance service expenses 698 358 1,056 594 304 898 –  Other 3 — 3 36 — 36 Recovery of insurance acquisition cash flows 195 101 296 109 54 163 Total insurance revenue 2,085 667 2,752 1,735 524 2,259 Insurance service expenses Incurred claims and other insurance service expenses ( 616 ) ( 428 ) ( 1,044 ) ( 615 ) ( 292 ) ( 907 ) Losses and reversal of losses on onerous contracts ( 50 ) ( 73 ) ( 123 ) ( 32 ) ( 77 ) ( 109 ) Amortisation of insurance acquisition cash flows ( 195 ) ( 101 ) ( 296 ) ( 109 ) ( 54 ) ( 163 ) Adjustments to liabilities for incurred claims ( 6 ) 27 21 ( 1 ) ( 1 ) ( 2 ) Total insurance service expenses ( 867 ) ( 575 ) ( 1,442 ) ( 757 ) ( 424 ) ( 1,181 ) Total insurance service result 1,218 92 1,310 978 100 1,078 1 ‘Life direct participating and investment DPF contracts’ are substantially measured under the variable fee approach measurement model. 2 ‘Life other contracts’ are measured under the general measurement model. 390 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Net investment return Year ended 31 Dec 2024 Year ended 31 Dec 2023 Life direct participating and investment DPF contracts Life other contracts Total Life direct participating and investment DPF contracts Life other contracts Total $m $m $m $m $m $m Investment return Amounts recognised in profit or loss 1 5,644 273 5,917 7,663 214 7,877 Amounts recognised in OCI 2 185 — 185 493 — 493 Total investment return (memorandum) 5,829 273 6,102 8,156 214 8,370 Net finance expense Changes in fair value of underlying items of direct participating contracts ( 5,805 ) — ( 5,805 ) ( 7,995 ) — ( 7,995 ) Effect of risk mitigation option 44 — 44 ( 35 ) — ( 35 ) Interest accreted — ( 110 ) ( 110 ) — ( 127 ) ( 127 ) Effect of changes in interest rates and other financial assumptions — ( 298 ) ( 298 ) ( 12 ) ( 121 ) ( 133 ) Effect of measuring changes in estimates at current rates and adjusting the CSM at rates on initial recognition — — — — ( 10 ) ( 10 ) Total net finance expense from insurance contracts ( 5,761 ) ( 408 ) ( 6,169 ) ( 8,042 ) ( 258 ) ( 8,300 ) Represented by: Amounts recognised in profit or loss ( 5,570 ) ( 408 ) ( 5,978 ) ( 7,551 ) ( 258 ) ( 7,809 ) Amounts recognised in OCI ( 191 ) — ( 191 ) ( 491 ) — ( 491 ) Total net investment return 68 ( 135 ) ( 67 ) 114 ( 44 ) 70 Represented by: Amounts recognised in profit or loss 74 ( 135 ) ( 61 ) 112 ( 44 ) 68 Amounts recognised in OCI ( 6 ) — ( 6 ) 2 — 2 1 Total Group ‘Net income/(expense) from assets and liabilities of insurance business, including related derivatives, measured at fair value through profit or loss’ of $ 5,901 m gain (2023: $ 7,886 m gain) includes returns on assets and liabilities supporting insurance policies of $ 5,685 m (2023: $ 7,627 m loss) and on shareholder assets of $ 216 m (2023: $ 259 m gain). Investment returns of $ 5,917 m (2023: $ 7,877 m gain) include gains of $ 5,685 m (2023: $ 7,627 m gain) on underlying assets supporting insurance liabilities reported in ‘Net income/(expense) from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss’, $ 235 m gains (2023: $ 257 m gain) reported in ‘Net interest income’ and $ 3 m loss (2023: $ 7 m loss) reported in ‘Other operating income’. 2 ‘Amounts recognised in OCI’ insurance investment income comprises of fair value gains of $ 185 m (2023: $ 497 m gain) and expected credit (recoveries)/losses of nil (2023: $ 4 m loss ). The Group statement of comprehensive income statement ‘Debt instruments at fair value through other comprehensive income – fair value gains/(losses)’ gain of $ 41 m (2023: $ 2,381 m gain) includes insurance investment income recognised in OCI of $ 185 m gain (2023: $ 497 m gain) and ‘Debt instruments at fair value through other comprehensive income - expected credit (recoveries)/losses recognised in the income statement’ recovery of $ 6 m (2023: $ 59 m loss) includes insurance expected credit (recoveries)/losses recognised in OCI of nil (2023: $ 4 m loss). Reconciliation of amounts included in other comprehensive income for financial assets measured at fair value through other comprehensive income – assets supporting contracts measured under the modified retrospective approach 2024 2023 $m $m Balance at 1 Jan ( 670 ) ( 973 ) Net change in fair value ( 153 ) 451 Net amount reclassified to profit or loss 3 ( 6 ) Related income tax 39 ( 115 ) Foreign exchange and other 45 ( 27 ) Balance at 31 Dec ( 736 ) ( 670 ) HSBC Holdings plc Annual Report on Form 20-F 391 Movements in carrying amounts of insurance contracts – analysis by remaining coverage and incurred claims Year ended 31 Dec 2024 Life direct participating and investment DPF contracts Life other contracts Liabilities for remaining coverage: Liabilities for remaining coverage: Excluding loss component Loss component Incurred claims Total Excluding loss component Loss component Incurred claims Total Total $m $m $m $m $m $m $m $m $m Opening assets ( 15 ) 1 1 ( 13 ) ( 279 ) ( 16 ) 56 ( 239 ) ( 252 ) Opening liabilities 116,546 121 370 117,037 3,400 191 223 3,814 120,851 Net opening balance at 1 Jan 2024 116,531 122 371 117,024 3,121 175 279 3,575 120,599 Changes in the consolidated income statement and statement of comprehensive income Insurance revenue Contracts under the fair value approach 1 ( 715 ) — — ( 715 ) ( 217 ) — — ( 217 ) ( 932 ) Contracts under the modified retrospective approach ( 141 ) — — ( 141 ) ( 18 ) — — ( 18 ) ( 159 ) Other contracts 2 ( 1,229 ) — — ( 1,229 ) ( 432 ) — — ( 432 ) ( 1,661 ) Total insurance revenue ( 2,085 ) — — ( 2,085 ) ( 667 ) — — ( 667 ) ( 2,752 ) Insurance service expenses Incurred claims and other insurance service expenses — ( 7 ) 623 616 — ( 49 ) 477 428 1,044 Amortisation of insurance acquisition cash flows 195 — — 195 101 — — 101 296 Losses and reversal of losses on onerous contracts — 50 — 50 — 73 — 73 123 Adjustments to liabilities for incurred claims — — 6 6 — — ( 27 ) ( 27 ) ( 21 ) Total insurance service expenses 195 43 629 867 101 24 450 575 1,442 Investment components ( 8,284 ) — 8,284 — ( 1,058 ) — 1,058 — — Insurance service result ( 10,174 ) 43 8,913 ( 1,218 ) ( 1,624 ) 24 1,508 ( 92 ) ( 1,310 ) Net finance expense from insurance contracts 3 5,720 41 — 5,761 405 3 — 408 6,169 Other movements recognised in the statement of profit or loss — — — — — — — — — Effect of movements in exchange rates ( 1,162 ) ( 5 ) ( 9 ) ( 1,176 ) ( 76 ) 1 ( 24 ) ( 99 ) ( 1,275 ) Total changes in the consolidated income statement and statement of comprehensive income ( 5,616 ) 79 8,904 3,367 ( 1,295 ) 28 1,484 217 3,584 Cash flows Premiums received 16,442 — — 16,442 1,950 — — 1,950 18,392 Claims, other insurance service expenses paid and other cash flows 2 — ( 9,020 ) ( 9,018 ) 2 — ( 1,508 ) ( 1,506 ) ( 10,524 ) Insurance acquisition cash flows ( 835 ) — — ( 835 ) ( 260 ) — — ( 260 ) ( 1,095 ) Total cash flows 15,609 — ( 9,020 ) 6,589 1,692 — ( 1,508 ) 184 6,773 Other movements 4 ( 23,495 ) ( 54 ) ( 31 ) ( 23,580 ) 53 8 60 121 ( 23,459 ) Net closing balance at 31 Dec 2024 103,029 147 224 103,400 3,571 211 315 4,097 107,497 Closing assets ( 16 ) 1 1 ( 14 ) ( 177 ) ( 13 ) 72 ( 118 ) ( 132 ) Closing liabilities 103,045 146 223 103,414 3,748 224 243 4,215 107,629 Net closing balance at 31 Dec 2024 103,029 147 224 103,400 3,571 211 315 4,097 107,497 392 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Movements in carrying amounts of insurance contracts – analysis by remaining coverage and incurred claims (continued) Year ended 31 Dec 2023 Life direct participating and investment DPF contracts Life other contracts Liabilities for remaining coverage: Liabilities for remaining coverage: Excluding loss component Loss component Incurred claims Total Excluding loss component Loss component Incurred claims Total Total $m $m $m $m $m $m $m $m $m Opening assets ( 5 ) — — ( 5 ) ( 187 ) 21 35 ( 131 ) ( 136 ) Opening liabilities 104,676 114 355 105,145 3,359 109 203 3,671 108,816 Net opening balance at 1 Jan 2023 104,671 114 355 105,140 3,172 130 238 3,540 108,680 Changes in the consolidated income statement and statement of comprehensive income Insurance revenue Contracts under the fair value approach 1 ( 508 ) — — ( 508 ) ( 196 ) — — ( 196 ) ( 704 ) Contracts under the modified retrospective approach ( 148 ) — — ( 148 ) ( 22 ) — — ( 22 ) ( 170 ) Other contracts 2 ( 1,079 ) — — ( 1,079 ) ( 306 ) — — ( 306 ) ( 1,385 ) Total insurance revenue ( 1,735 ) — — ( 1,735 ) ( 524 ) — — ( 524 ) ( 2,259 ) Insurance service expenses Incurred claims and other insurance service expenses — ( 6 ) 621 615 — ( 24 ) 316 292 907 Amortisation of insurance acquisition cash flows 109 — — 109 54 — — 54 163 Losses and reversal of losses on onerous contracts — 32 — 32 — 77 — 77 109 Adjustments to liabilities for incurred claims — — 1 1 — — 1 1 2 Total insurance service expenses 109 26 622 757 54 53 317 424 1,181 Investment components ( 8,104 ) — 8,104 — ( 818 ) — 818 — — Insurance service result ( 9,730 ) 26 8,726 ( 978 ) ( 1,288 ) 53 1,135 ( 100 ) ( 1,078 ) Net finance expense from insurance contracts 3 8,042 — — 8,042 254 3 1 258 8,300 Other movements recognised in the statement of profit or loss 513 ( 5 ) ( 214 ) 294 ( 8 ) 4 ( 13 ) ( 17 ) 277 Effect of movements in exchange rates 942 1 6 949 25 ( 2 ) 8 31 980 Total changes in the consolidated income statement and statement of comprehensive income ( 233 ) 22 8,518 8,307 ( 1,017 ) 58 1,131 172 8,479 Cash flows Premiums received 12,616 — — 12,616 1,256 — — 1,256 13,872 Claims, other insurance service expenses paid and other cash flows ( 15 ) — ( 8,502 ) ( 8,517 ) 1 — ( 1,112 ) ( 1,111 ) ( 9,628 ) Insurance acquisition cash flows ( 522 ) — — ( 522 ) ( 282 ) — — ( 282 ) ( 804 ) Total cash flows 12,079 — ( 8,502 ) 3,577 975 — ( 1,112 ) ( 137 ) 3,440 Acquisition of subsidiaries and other movements 14 ( 14 ) — — ( 9 ) ( 13 ) 22 — — Net closing balance at 31 Dec 2023 116,531 122 371 117,024 3,121 175 279 3,575 120,599 Closing assets ( 15 ) 1 1 ( 13 ) ( 279 ) ( 16 ) 56 ( 239 ) ( 252 ) Closing liabilities 116,546 121 370 117,037 3,400 191 223 3,814 120,851 Net closing balance at 31 Dec 2023 116,531 122 371 117,024 3,121 175 279 3,575 120,599 1 On transition to IFRS 17 the Group applied the full retrospective approach to new business written from 2018 at the earliest. Where applying the full retrospective approach was impracticable, the Group primarily applied the fair value approach. 2 ‘Other contracts’ are those contracts measured by applying IFRS 17 from inception of the contracts. These include contracts measured under the full retrospective approach at transition and contracts incepted after transition. 3 ‘Net finance expense from insurance contracts’ expense of $ 6,169 m (2023: $ 8,300 m expense) comprises expense of $ 5,978 m (2023: $ 7,809 m expense) recognised in the income statement and expense of $ 191 m (2023: $ 491 m expense) recognised in other comprehensive income. 4 The ‘Other movements‘ reduction of $ 23,459 m in insurance contracts includes $ 21,811 m in respect of our French insurance business, classified as held for sale at 31 December 2024. Further details are provided on page 434 . HSBC Holdings plc Annual Report on Form 20-F 393 Movements in carrying amounts of insurance contracts – analysis by measurement component Year ended 31 Dec 2024 Life direct participating and investment DPF contracts Life other contracts Estimates of present value of future cash flows and risk adjustment Contractual service margin Estimates of present value of future cash flows and risk adjustment Contractual service margin Contracts under the fair value approach 1 Contracts under the modified retros- pective approach Other contracts 2 Total Contracts under the fair value approach 1 Contracts under the modified retros- pective approach Other contracts 2 Total Total $m $m $m $m $m $m $m $m $m $m $m Opening assets ( 30 ) 3 — 14 ( 13 ) ( 339 ) 36 — 64 ( 239 ) ( 252 ) Opening liabilities 106,440 4,679 715 5,203 117,037 3,113 361 19 321 3,814 120,851 Net opening balance at 1 Jan 2024 106,410 4,682 715 5,217 117,024 2,774 397 19 385 3,575 120,599 Changes in the consolidated income statement and statement of comprehensive income Changes that relate to current services Contractual service margin recognised for services provided — ( 488 ) ( 59 ) ( 596 ) ( 1,143 ) — ( 77 ) ( 6 ) ( 105 ) ( 188 ) ( 1,331 ) Change in risk adjustment for non-financial risk expired ( 46 ) — — — ( 46 ) ( 20 ) — — — ( 20 ) ( 66 ) Experience adjustments ( 82 ) — — — ( 82 ) 70 — — — 70 ( 12 ) Other movements recognised in insurance service result — 52 — ( 55 ) ( 3 ) — — — — — ( 3 ) Changes that relate to future services Contracts initially recognised in the year ( 2,384 ) — — 2,400 16 ( 201 ) — — 220 19 35 Changes in estimates that adjust the contractual service margin 3 ( 914 ) 229 ( 6 ) 691 — ( 7 ) 30 7 ( 30 ) — — Changes in estimates that result in losses and reversal of losses on onerous contracts 34 — — — 34 54 — — — 54 88 Changes that relate to past services Adjustments to liabilities for incurred claims 6 — — — 6 ( 27 ) — — — ( 27 ) ( 21 ) Insurance service result ( 3,386 ) ( 207 ) ( 65 ) 2,440 ( 1,218 ) ( 131 ) ( 47 ) 1 85 ( 92 ) ( 1,310 ) Net finance expense from insurance contracts 4 5,761 — — — 5,761 380 12 — 16 408 6,169 Other movements recognised in the statement of profit or loss — — — — — — — — — — — Effect of movements in exchange rates ( 1,167 ) 51 ( 24 ) ( 36 ) ( 1,176 ) ( 50 ) ( 11 ) — ( 38 ) ( 99 ) ( 1,275 ) Total changes in the consolidated income statement and statement of comprehensive income 1,208 ( 156 ) ( 89 ) 2,404 3,367 199 ( 46 ) 1 63 217 3,584 Cash flows Premiums received 16,442 — — — 16,442 1,950 — — — 1,950 18,392 Claims, other insurance service expenses paid and other cash flows ( 9,018 ) — — — ( 9,018 ) ( 1,506 ) — — — ( 1,506 ) ( 10,524 ) Insurance acquisition cash flows ( 835 ) — — — ( 835 ) ( 260 ) — — — ( 260 ) ( 1,095 ) Total cash flows 6,589 — — — 6,589 184 — — — 184 6,773 Other movements 5 ( 22,736 ) ( 23 ) ( 626 ) ( 195 ) ( 23,580 ) 153 2 ( 20 ) ( 14 ) 121 ( 23,459 ) Net closing balance at 31 Dec 2024 91,471 4,503 — 7,426 103,400 3,310 353 — 434 4,097 107,497 Closing assets ( 27 ) 3 — 10 ( 14 ) ( 359 ) 73 — 168 ( 118 ) ( 132 ) Closing liabilities 91,498 4,500 — 7,416 103,414 3,669 280 — 266 4,215 107,629 Net closing balance at 31 Dec 2024 91,471 4,503 — 7,426 103,400 3,310 353 — 434 4,097 107,497 394 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Movements in carrying amounts of insurance contracts – analysis by measurement component (continued) Year ended 31 Dec 2023 Life direct participating and investment DPF contracts Life other contracts Estimates of present value of future cash flows and risk adjustment Contractual service margin Estimates of present value of future cash flows and risk adjustment Contractual service margin Contracts under the fair value approach 1 Contracts under the modified retros- pective approach Other contracts 2 Total Contracts under the fair value approach 1 Contracts under the modified retros- pective approach Other contracts 2 Total Total $m $m $m $m $m $m $m $m $m $m $m Opening assets ( 18 ) 3 — 10 ( 5 ) ( 308 ) 86 — 91 ( 131 ) ( 136 ) Opening liabilities 96,174 4,364 792 3,815 105,145 3,162 325 18 166 3,671 108,816 Net opening balance at 1 Jan 2023 96,156 4,367 792 3,825 105,140 2,854 411 18 257 3,540 108,680 Changes in the consolidated income statement and statement of comprehensive income Changes that relate to current services Contractual service margin recognised for services provided — ( 188 ) ( 70 ) ( 717 ) ( 975 ) — ( 69 ) ( 6 ) ( 76 ) ( 151 ) ( 1,126 ) Change in risk adjustment for non-financial risk expired ( 21 ) — — — ( 21 ) ( 15 ) — — — ( 15 ) ( 36 ) Experience adjustments 21 — — — 21 ( 12 ) — — — ( 12 ) 9 Other movements recognised in insurance service result ( 36 ) — — — ( 36 ) — — — — — ( 36 ) Changes that relate to future services Contracts initially recognised in the year ( 1,606 ) — — 1,619 13 ( 176 ) — — 207 31 44 Changes in estimates that adjust contractual service margin 3 ( 771 ) 368 ( 33 ) 436 — 21 26 6 ( 53 ) — — Changes in estimates that result in losses and reversal of losses on onerous contracts 19 — — — 19 46 — — — 46 65 Changes that relate to past services Adjustments to liabilities for incurred claims 1 — — — 1 1 — — — 1 2 Insurance service result ( 2,393 ) 180 ( 103 ) 1,338 ( 978 ) ( 135 ) ( 43 ) — 78 ( 100 ) ( 1,078 ) Net finance expense from insurance contracts 4 8,042 — — — 8,042 235 11 — 12 258 8,300 Other movements recognised in the statement of profit or loss 145 133 ( 1 ) 17 294 ( 43 ) 6 — 20 ( 17 ) 277 Effect of movements in exchange rates 883 2 27 37 949 — 12 1 18 31 980 Total changes in the consolidated income statement and statement of comprehensive income 6,677 315 ( 77 ) 1,392 8,307 57 ( 14 ) 1 128 172 8,479 Cash flows Premiums received 12,616 — — — 12,616 1,256 — — — 1,256 13,872 Claims, other insurance service expenses paid and other cash flows ( 8,517 ) — — — ( 8,517 ) ( 1,111 ) — — — ( 1,111 ) ( 9,628 ) Insurance acquisition cash flows ( 522 ) — — — ( 522 ) ( 282 ) — — — ( 282 ) ( 804 ) Total cash flows 3,577 — — — 3,577 ( 137 ) — — — ( 137 ) 3,440 Other movements — — — — — — — — — — — Net closing balance at 31 Dec 2023 106,410 4,682 715 5,217 117,024 2,774 397 19 385 3,575 120,599 Closing assets ( 30 ) 3 — 14 ( 13 ) ( 339 ) 36 — 64 ( 239 ) ( 252 ) Closing liabilities 106,440 4,679 715 5,203 117,037 3,113 361 19 321 3,814 120,851 Net closing balance at 31 Dec 2023 106,410 4,682 715 5,217 117,024 2,774 397 19 385 3,575 120,599 1 On transition to IFRS 17 the Group applied the full retrospective approach to new business written from 2018 at the earliest. Where applying the full retrospective approach was impracticable, the Group primarily applied the fair value approach. 2 ‘Other contracts' are those contracts measured by applying IFRS 17 from inception of the contracts. These include contracts measured under the full retrospective approach at transition and contracts incepted after transition. 3 ‘Changes in estimates that adjust contractual service margin’ increase of $ 921 m (2023: $ 750 m increase) includes an increase of $ 651 m (2023: $ 233 m increase) from economic factors and an increase of $ 270 m (2023: $ 517 m increase) from non-economic factors. 4 ‘Net finance expense from insurance contracts’ expense of $ 6,169 m (2023: $ 8,300 m expense) comprises expense of $ 5,978 m (2023: $ 7,809 m expense) recognised in the income statement and expense of $ 191 m (2023: $ 491 m expense) recognised in other comprehensive income. 5 ‘Other movements‘ $ 23,459 m reduction in insurance contracts includes $ 21,811 m in respect of the classification of the France insurance business to held for sale at 31 December 2024. Further details are provided on page 434 . HSBC Holdings plc Annual Report on Form 20-F 395 Effect of contracts initially recognised in the year Year ended 31 Dec 2024 Year ended 31 Dec 2023 Profitable contracts issued Onerous contracts issued Total Profitable contracts issued Onerous contracts issued Total $m $m $m $m $m $m Life direct participating and investment DPF contracts Estimates of present value of cash outflows 16,878 495 17,373 12,418 215 12,633 –  insurance acquisition cash flows 805 38 843 602 21 623 –  claims and other insurance service expenses payable 16,073 457 16,530 11,816 194 12,010 Estimates of present value of cash inflows ( 19,326 ) ( 481 ) ( 19,807 ) ( 14,074 ) ( 204 ) ( 14,278 ) Risk adjustment for non-financial risk 48 2 50 37 2 39 Contractual service margin 2,400 — 2,400 1,619 — 1,619 (Losses) recognised on initial recognition — ( 16 ) ( 16 ) — ( 13 ) ( 13 ) Life other contracts Estimates of present value of cash outflows 1,484 476 1,960 1,116 464 1,580 –  insurance acquisition cash flows 125 65 190 106 50 156 –  claims and other insurance service expenses payable 1,359 411 1,770 1,010 414 1,424 Estimates of present value of cash inflows ( 1,731 ) ( 460 ) ( 2,191 ) ( 1,350 ) ( 438 ) ( 1,788 ) Risk adjustment for non-financial risk 27 3 30 27 5 32 Contractual service margin 220 — 220 207 — 207 (Losses) recognised on initial recognition — ( 19 ) ( 19 ) — ( 31 ) ( 31 ) Present value of expected future cash flows of insurance contract liabilities and contractual service margin Less than 1 year 1–2 years 2–3 years 3–4 years 4–5 years 5–10 years 10–20 years Over 20 years Total $m $m $m $m $m $m $m $m $m 2024 Insurance liability future cash flows 1 Life direct participating and investment DPF contracts ( 3,526 ) ( 455 ) 2,464 2,968 3,219 11,332 22,005 53,120 91,127 Life other contracts 971 ( 96 ) ( 101 ) ( 53 ) 7 63 279 2,529 3,599 Insurance liability future cash flows at 31 Dec ( 2,555 ) ( 551 ) 2,363 2,915 3,226 11,395 22,284 55,649 94,726 Remaining contractual service margin 1 Life direct participating and investment DPF contracts 1,052 961 880 810 746 2,892 2,954 1,634 11,929 Life other contracts 128 104 85 69 53 159 127 62 787 Remaining contractual service margin at 31 Dec 1,180 1,065 965 879 799 3,051 3,081 1,696 12,716 2023 Insurance liability future cash flows Life direct participating and investment DPF contracts ( 2,620 ) ( 545 ) 2,321 2,419 3,344 11,695 23,351 65,897 105,862 Life other contracts 1,276 362 ( 347 ) 4 ( 45 ) 36 102 1,628 3,016 Insurance liability future cash flows at 31 Dec ( 1,344 ) ( 183 ) 1,974 2,423 3,299 11,731 23,453 67,525 108,878 Remaining contractual service margin Life direct participating and investment DPF contracts 917 848 783 722 666 2,597 2,653 1,428 10,614 Life other contracts 172 113 84 74 61 141 115 41 801 Remaining contractual service margin at 31 Dec 1,089 961 867 796 727 2,738 2,768 1,469 11,415 1  ‘Insurance liability future cash flows’ and ‘Remaining contractual service margin’ at 31 December 2024 exclude the French insurance business that was classified as held for sale at 31 December 2024. Further details are provided on page 434 . Discount rates The discount rates applied to expected future cash flows are determined through a bottom-up approach as set out in Note 1.2(j) ‘Summary of material accounting policies – Insurance contracts’ on page 376 . The blended average of discount rates used within our most material manufacturing entities are as follows: HSBC Life (International) Ltd Hang Seng Insurance Co Ltd HSBC Assurances Vie (France) HK$ US$ HK$ US$ € At 31 Dec 2024 10-year discount rate (%) 4.32 5.16 4.43 5.25 2.97 20-year discount rate (%) 4.42 5.51 4.53 5.60 2.95 At 31 Dec 2023 10-year discount rate (%) 4.02 4.47 4.16 4.62 2.96 20-year discount rate (%) 4.21 4.91 4.34 5.06 2.97 396 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements 5 Employee compensation and benefits 2024 2023 2022 $m $m $m Employee compensation and benefits 1 18,465 18,220 18,003 Capitalised wages and salaries 2 1,688 1,403 1,285 Gross employee compensation and benefits for the year ended 31 Dec 20,153 19,623 19,288 Consists of: Wages and salaries 17,815 17,359 16,970 Social security costs 1,487 1,507 1,403 Post-employment benefits 851 757 915 Year ended 31 Dec 20,153 19,623 19,288 1 Employee compensation and benefits are presented in the income statement net of software capitalisation costs and costs included in the insurance contract fulfilment cash flow liabilities under IFRS 17. 2 Comprises $ 1,118 m (2023: $ 1,043 m ; 2022: $ 922 m ) software capitalisation costs and $ 570 m (2023: $ 360 m ; 2022: $ 363 m ) costs included in the insurance contract fulfilment cash flow liabilities under IFRS 17. Average number of persons employed by HSBC during the year by global business 1 2024 2023 2022 Wealth and Personal Banking 125,068 132,336 135,676 Commercial Banking 47,135 46,826 48,004 Global Banking and Markets 48,351 48,043 48,597 Corporate Centre 374 347 365 Year ended 31 Dec 220,928 227,552 232,642 1 Average number of persons employed represents the number of persons with contracts of service with the Group. Average number of persons employed by HSBC during the year by legal entity 1 2024 2023 2022 HSBC UK Bank plc 20,034 20,415 20,501 HSBC Bank plc 11,456 14,809 15,405 The Hongkong and Shanghai Banking Corporation Limited 54,478 54,321 54,792 HSBC Bank Middle East Limited 3,344 3,316 3,338 HSBC North America Holdings Inc. 5,928 6,046 6,749 HSBC Bank Canada 758 4,354 4,241 Grupo Financiero HSBC, S.A. de C.V. 13,928 14,412 14,484 Other trading entities 2 8,393 9,247 10,026 Holding companies, shared service centres and intra-Group eliminations 102,609 100,632 103,106 Year ended 31 Dec 220,928 227,552 232,642 1 Average number of persons employed represents the number of persons with contracts of service with the Group. 2 Other trading entities includes entities located in Türkiye, Egypt and Saudi Arabia. Reconciliation of total incentive awards granted to income statement charge 2024 2023 2022 $m $m $m Total incentive awards approved for the current year 3,800 3,774 3,359 Less: deferred bonuses awarded, expected to be recognised in future periods ( 381 ) ( 353 ) ( 343 ) Total incentives awarded and recognised in the current year 3,419 3,421 3,016 Add: current year charges for deferred bonuses from previous years 439 375 239 Other ( 97 ) ( 56 ) ( 22 ) Income statement charge for incentive awards 3,761 3,740 3,233 Share-based payments ‘Wages and salaries’ includes the effect of share-based payments arrangements, of which $ 529 m (2023: $ 482 m ; 2022: $ 400 m ) was equity settled, as follows: 2024 2023 2022 $m $m $m Conditional share awards 551 499 402 Savings-related and other share award option plans 27 23 22 Year ended 31 Dec 578 522 424 HSBC Holdings plc Annual Report on Form 20-F 397 HSBC share awards Award Policy Deferred share awards (including annual incentive awards, long-term incentive (‘LTI’) awards delivered in shares) An assessment of performance over the relevant period ending on 31 December is used to determine the amount of the award to be granted. – Deferred awards generally require employees to remain in employment over the vesting period and are generally not subject to performance conditions after the grant date. An exception to these are LTI awards, which are subject to performance conditions. – Deferred share awards generally vest over a period of three , four , five or seven years . – Vested shares may be subject to a retention requirement post-vesting. – Awards are generally subject to malus and clawback provisions. International Employee Share Purchase Plan (‘ShareMatch’) The plan was first introduced in Hong Kong in 2013 and now includes employees based in 30 jurisdictions. – Shares are purchased in the market each quarter up to a maximum value of £ 750 , or the equivalent in local currency. – Matching awards are added at a ratio of one free share for every three purchased. In mainland China, matching awards are settled in cash. – Matching awards vest subject to continued employment and the retention of the purchased shares for a maximum period of two years and nine months. Movement on HSBC share awards 2024 2023 Number Number (000s) (000s) Conditional share awards outstanding at 1 Jan 125,023 126,246 Additions during the year 84,930 72,289 Released in the year ( 71,849 ) ( 70,054 ) Forfeited in the year ( 4,461 ) ( 3,458 ) Conditional share awards outstanding at 31 Dec 133,643 125,023 Weighted average fair value of awards granted ($) 6.08 5.84 HSBC share option plans Main plans Policy Savings-related share option plans (‘Sharesave’) – From 2014, employees eligible for the UK plan could save up to £ 500 per month with the option to use the savings to acquire shares. – These are generally exercisable within six months following either the third or fifth anniversary of the commencement of a three -year or five -year contract, respectively. – The exercise price is set at a 20 % (2023: 20 % ) discount to the market value immediately preceding the date of invitation. Calculation of fair values The fair values of share options are calculated using a Black-Scholes model. The fair value of a share award is based on the share price at the date of the grant. Movement on HSBC share option plans Savings-related share option plans Number WAEP 1 (000s) £ Outstanding at 1 Jan 2024 83,994 3.42 Granted during the year 2 11,845 5.30 Exercised during the year 3 ( 16,776 ) 2.94 Expired during the year ( 2,454 ) 4.20 Forfeited during the year ( 1,274 ) 3.48 Outstanding at 31 Dec 2024 75,335 3.81 –  of which exercisable 1,446 3.34 Weighted average remaining contractual life (years) 2.10 Outstanding at 1 Jan 2023 115,651 2.89 Granted during the year 2 23,382 4.70 Exercised during the year 3 ( 49,007 ) 2.73 Expired during the year ( 3,832 ) 3.78 Forfeited during the year ( 2,200 ) 2.88 Outstanding at 31 Dec 2023 83,994 3.42 –  of which exercisable 7,165 2.70 Weighted average remaining contractual life (years) 2.41 1 Weighted average exercise price. 2 The weighted average fair value of options granted during the year was $ 1.66 (2023: $ 1.92 ). 3 The weighted average share price at the date the options were exercised was $ 8.54 (2023: $ 7.39 ). 398 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Post-employment benefit plans The Group operates pension plans throughout the world for its employees. ‘Pension risk management processes’ on page 233 contains details of the policies and practices associated with these pension plans, some of which are defined benefit plans. The largest defined benefit plan is the HSBC UK section of the HSBC Bank (UK) Pension Scheme (‘the principal plan’), created as a result of the HSBC Bank (UK) Pension Scheme being fully sectionalised in 2018 to meet the requirements of the Banking Reform Act . For further details of how the trustee of the HSBC Bank (UK) Pension Scheme manages climate risk, see ’Managing climate risk’ on page 58 . HSBC holds on its balance sheet the net surplus or deficit, which is the difference between the fair value of plan assets and the discounted value of scheme liabilities at the balance sheet date for each plan. Surpluses are only recognised to the extent that they are recoverable through reduced contributions in the future or through potential future refunds from the schemes. In assessing whether a surplus is recoverable, HSBC has considered its current right to obtain a future refund or a reduction in future contributions together with the rights of third parties such as trustees. The principal plan The principal plan has a defined benefit section and a defined contribution section. The defined benefit section was closed to future benefit accrual in 2015, with defined benefits earned by employees at that date continuing to be linked to their salary while they remain employed by HSBC. The plan is overseen by an independent corporate trustee, who has a fiduciary responsibility for the operation of the plan. Its assets are held separately from the assets of the Group. The investment strategy of the plan is to hold the majority of assets in bonds, with the remainder in a diverse range of investments. It also includes some interest rate swaps to reduce interest rate risk, inflation swaps to reduce inflation risk and longevity swaps to reduce the impact of longer life expectancy. The principal plan is subject to the statutory funding objective requirements of the UK Pensions Act 2004, which requires that it be funded to at least the level of technical provisions (an actuarial estimate of the assets needed to provide for the benefits already built up under the plan). Where a funding valuation is carried out and identifies a deficit, the employer and trustee are required to agree to a deficit recovery plan. The latest funding valuation of the plan at 31 December 2022 was carried out by Towers Watson Limited, using the projected unit credit method. At that date, the market value of the plan’s assets was £ 23.9 b n ( $ 28.8 b n) and this exceeded the value placed on its liabilities on an ongoing basis by £ 3.7 b n ( $ 4.4 b n), giving a funding level of 118 % . These figures include defined contribution assets amounting to £ 3.0 b n ( $ 3.6 b n). The main differences between the assumptions used for assessing the defined benefit liabilities for this funding valuation and those used for IAS 19 are that an element of prudence is contained in the funding valuation assumptions for discount rate, inflation rate and life expectancy. The funding valuation is used to judge the amount of cash contributions the Group needs to put into the pension scheme. It will always be different to the IAS 19 accounting surplus, which is an accounting rule concerning employee benefits and shown on the balance sheet of our financial statements. The next funding valuation will be performed in 2026, with an effective date of 31 December 2025. The actuary also assessed the value of the liabilities if the plan were to have been stopped and an insurance company asked to secure all future pension payments. This is generally larger than the amount needed on the ongoing basis described above because an insurance company would use more prudent assumptions, which would allow for reserves and include an explicit allowance for the future administrative expenses of the plan. Under this approach, the amount of assets needed was estimated to be £ 21.3 b n ( $ 25.7 b n) at 31 December 2022. The trust deed gives the ability for HSBC UK to take a refund of surplus assets after the plan has been run down such that no further beneficiaries remain. In assessing whether a surplus is recoverable, HSBC UK has considered its right to obtain a future refund together with the rights of third parties such as trustees. On this basis, any net surplus in the HSBC UK section of the plan is recognised in HSBC UK’s financial statements and the Group’s financial statements. Income statement charge/(credit) 2024 2023 2022 $m $m $m Defined benefit pension plans ( 116 ) ( 151 ) 42 Defined contribution pension plans 933 874 845 Pension plans 817 723 887 Defined benefit and contribution healthcare plans 34 34 28 Year ended 31 Dec 851 757 915 Net assets/(liabilities) recognised on the balance sheet in respect of defined benefit plans Fair value of plan assets Present value of defined benefit obligations Effect of limit on plan surpluses Total $m $m $m $m Defined benefit pension plans 30,758 ( 23,959 ) — 6,799 Defined benefit healthcare plans 80 ( 348 ) — ( 268 ) At 31 Dec 2024 30,838 ( 24,307 ) — 6,531 Total employee benefit liabilities (within Note 27 ‘Accruals, deferred income and other liabilities’) ( 1,017 ) Total employee benefit assets (within Note 22 ‘Prepayments, accrued income and other assets’) 7,548 Defined benefit pension plans 33,897 ( 27,011 ) — 6,886 Defined benefit healthcare plans 107 ( 403 ) — ( 296 ) At 31 Dec 2023 34,004 ( 27,414 ) — 6,590 Total employee benefit liabilities (within Note 27 ‘Accruals, deferred income and other liabilities’) ( 1,160 ) Total employee benefit assets (within Note 22 ‘Prepayments, accrued income and other assets’) 7,750 HSBC Holdings plc Annual Report on Form 20-F 399 HSBC Holdings Employee compensation and benefit expense in respect of HSBC Holdings’ employees in 2024 amounted to $ 29 m (2023: $ 15 m ). The average number of persons employed during 2024 was 28 (2023: 29 ). A small number of employees are members of defined benefit pension plans. These employees are members of the HSBC Bank (UK) Pension Scheme. HSBC Holdings pays contributions to such plan for its own employees in accordance with the schedules of contributions determined by the trustees of the plan and recognises these contributions as an expense as they fall due. Defined benefit pension plans Net asset/(liability) under defined benefit pension plans Fair value of plan assets Present value of defined benefit obligations Effect of the asset ceiling Net defined benefit asset/(liability) Principal 1 plan Other plans Principal 1 plan Other plans Principal 1 plan Other plans Principal 1 plan Other plans $m $m $m $m $m $m $m $m At 1 Jan 2024 26,590 7,307 ( 19,782 ) ( 7,229 ) — — 6,808 78 Service cost — ( 1 ) ( 35 ) ( 144 ) — — ( 35 ) ( 145 ) –  current service cost — — ( 9 ) ( 140 ) — — ( 9 ) ( 140 ) –  past service cost and gains/(losses) from settlements — ( 1 ) ( 26 ) ( 4 ) — — ( 26 ) ( 5 ) Net interest income/(cost) on the net defined benefit asset/ (liability) 1,213 277 ( 896 ) ( 265 ) — — 317 12 Remeasurement effects recognised in other comprehensive income ( 2,665 ) ( 6 ) 2,156 186 — — ( 509 ) 180 –  return on plan assets (excluding interest income) ( 2,665 ) ( 6 ) — — — — ( 2,665 ) ( 6 ) –  actuarial gains/(losses) financial assumptions — — 1,771 204 — — 1,771 204 –  actuarial gains/(losses) demographic assumptions — — 161 ( 5 ) — — 161 ( 5 ) –  actuarial gains/(losses) experience adjustments — — 224 ( 13 ) — — 224 ( 13 ) –  other changes — — — — — — — — Exchange differences ( 387 ) ( 145 ) 281 191 — — ( 106 ) 46 Benefits paid ( 1,082 ) ( 496 ) 1,082 561 — — — 65 Other movements 2 ( 17 ) 170 ( 29 ) ( 36 ) — — ( 46 ) 134 At 31 Dec 2024 23,652 7,106 ( 17,223 ) ( 6,736 ) — — 6,429 370 At 1 Jan 2023 25,121 7,050 ( 18,787 ) ( 6,906 ) — — 6,334 144 Service cost — — ( 10 ) ( 150 ) — — ( 10 ) ( 150 ) –  current service cost — — ( 14 ) ( 135 ) — — ( 14 ) ( 135 ) –  past service cost and losses from settlements — — 4 ( 15 ) — — 4 ( 15 ) Net interest income/(cost) on the net defined benefit asset/ (liability) 1,247 298 ( 925 ) ( 286 ) — — 322 12 Remeasurement effects recognised in other comprehensive income ( 225 ) 110 7 ( 300 ) — — ( 218 ) ( 190 ) –  return on plan assets (excluding interest income) ( 225 ) 110 — — — — ( 225 ) 110 –  actuarial gains/(losses) financial assumptions — — ( 123 ) ( 327 ) — — ( 123 ) ( 327 ) –  actuarial gains/(losses) demographic assumptions — — 357 17 — — 357 17 –  actuarial gains/(losses) experience adjustments — — ( 227 ) 10 — — ( 227 ) 10 –  other changes — — — — — — — — Exchange differences 1,472 228 ( 1,098 ) ( 190 ) — — 374 38 Benefits paid ( 1,063 ) ( 548 ) 1,063 629 — — — 81 Other movements 2 38 169 ( 32 ) ( 26 ) — — 6 143 At 31 Dec 2023 26,590 7,307 ( 19,782 ) ( 7,229 ) — — 6,808 78 1 For further details of the principal plan, see page 398 . 2 O ther movements include contributions by HSBC, contributions by employees, administrative costs and taxes paid by plan. HSBC expects to make $ 97 m of contributions to defined benefit pension plans during 2025, consisting of $ nil for the principal plan and $ 97 m for other plans. Benefits expected to be paid from the plans to retirees over each of the next five years, and in aggregate for the five years thereafter, are as follows: Benefits expected to be paid from plans 2025 2026 2027 2028 2029 2030-2034 $m $m $m $m $m $m The principal plan 1,2 1,094 1,129 1,165 1,203 1,242 6,837 Other plans 1 437 423 438 432 428 2,223 1 The duration of the defined benefit obligation i s 11.8 years for the principal plan under the disclosure assumptions adopted (2023: 12.9 years) and 9.8 years for all other plans combined (2023: 10.3 years). 2 For further details of the principal plan, see page 398 . 400 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Fair value of plan assets by asset classes 31 Dec 2024 31 Dec 2023 Value Quoted market price in active market No quoted market price in active market Thereof HSBC 1 Value Quoted market price in active market No quoted market price in active market Thereof HSBC 1 $m $m $m $m $m $m $m $m The principal plan 2 Fair value of plan assets 23,652 13,903 9,749 421 26,590 15,006 11,584 547 –  equities 3 65 — 65 — 83 — 83 — –  bonds fixed income 5,864 5,372 492 — 5,262 4,739 523 — –  bonds index-linked 8,253 8,253 — — 10,300 10,300 — — –  derivatives 295 — 295 421 1,061 — 1,061 547 –  property 833 — 833 — 830 — 830 — –  pooled investment vehicles 8,064 — 8,064 — 9,087 — 9,087 — –  other 278 278 — — ( 33 ) ( 33 ) — — Other plans Fair value of plan assets 7,106 6,407 699 19 7,307 5,361 1,946 39 –  equities 587 587 — 4 556 556 — 3 –  bonds fixed income 3,671 3,671 — 4 3,624 3,623 1 5 –  bonds index-linked 33 33 — — 90 90 — — –  bonds other 473 473 — — 447 415 32 — –  derivatives 2 ( 3 ) 5 — 2 ( 1 ) 3 — –  property 103 98 5 — 112 108 4 — –  other 2,237 1,548 689 11 2,476 570 1,906 31 1 The fair value of plan assets includes derivatives entered into with HSBC Bank plc as detailed in Note 36 . 2 For further details of the principal plan, see page 398 . 3 Includes $ 65 m (2023: $ 83 m ) in relation to private equities. Post-employment defined benefit plans’ principal actuarial financial assumptions HSBC determines the discount rates to be applied to its obligations in consultation with the plans’ local actuaries, on the basis of current average yields of high-quality (AA-rated or equivalent) debt instruments with maturities consistent with those of the defined benefit obligations. Key actuarial assumptions for the principal plan 1 Discount rate Inflation rate (RPI) Inflation rate (CPI) Rate of increase for pensions Rate of pay increase % % % % % UK At 31 Dec 2024 5.54 3.33 2.88 3.22 3.63 At 31 Dec 2023 4.65 3.23 2.67 3.14 3.42 1 For further details of the principal plan, see page 398 . Mortality tables and average life expectancy at age 60 for the principal plan 1 Mortality table Life expectancy at age 60 for a male member currently: Life expectancy at age 60 for a female member currently: Aged 60 Aged 40 Aged 60 Aged 40 UK At 31 Dec 2024 SAPS S3 2 26.1 27.7 28.3 29.9 At 31 Dec 2023 SAPS S3 3 26.2 27.7 28.3 29.8 1 For further details of the principal plan, see page 398 . 2    Self-administered pension scheme (‘SAPS’) S3 table, with different tables and multipliers adopted based on gender, pension amount and member status, reflecting the Scheme’s actual mortality experience. Improvements are projected in accordance with the Continuous Mortality Investigation's CMI 2023 core projection model with an initial addition to improvement of 0.25% per annum, and a long-term rate of improvement of 1.25% per annum and with a 0% weighting to 2020 and 2021 mortality experience and a 15% weighting to 2022 and 2023, reflecting long-term view on mortality improvements post-pandemic. 3    Self-administered pension scheme (‘SAPS’) S3 table, with different tables and multipliers adopted based on gender, pension amount and member status, reflecting the Scheme’s actual mortality experience. Improvements are projected in accordance with the Continuous Mortality Investigation’s CMI 2022 core projection model with an initial addition to improvement of 0.25% per annum, a long-term rate of improvement of 1.25% per annum , with a 0% weighting to 2020 and 2021, mortality experience and a 25% weighting to 2022, reflecting updated long-term view on mortality improvements post-pandemic. The effect of changes in key assumptions on the principal plan 1 Impact on HSBC UK section of the HSBC Bank (UK) Pension Scheme obligation Financial impact of increase Financial impact of decrease 2024 2023 2024 2023 $m $m $m $m Discount rate – increase/decrease of 0.25 % ( 473 ) ( 599 ) 496 631 Inflation rate (RPI and CPI) – increase/decrease of 0.25 % 389 500 ( 391 ) ( 497 ) Pension payments and deferred pensions – increase/decrease of 0.25 % 487 622 ( 478 ) ( 590 ) Pay – increase/decrease of 0.25 % 6 8 ( 6 ) ( 6 ) Change in mortality – increase/decrease of 1 year 483 613 ( 464 ) ( 613 ) 1 For further details of the principal plan, see page 398 . HSBC Holdings plc Annual Report on Form 20-F 401 The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit asset recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the prior period. Directors’ emoluments Details of Directors’ emoluments, pensions and their interests are disclosed in the Directors’ remuneration report on page 309 . 6 Auditor’s remuneration 2024 2023 2022 $m $m $m Audit fees payable to PwC 1 102.8 109.8 97.6 Other audit fees payable 1.6 2.2 1.6 Year ended 31 Dec 104.4 112.0 99.2 Fees payable by HSBC to PwC 2024 2023 2022 $m $m $m Fees for HSBC Holdings’ statutory audit 2 22.0 24.1 21.9 Fees for other services provided to HSBC 124.6 131.8 126.2 –  audit of HSBC’s subsidiaries 80.8 85.7 75.7 –  audit-related assurance services 3 25.0 26.0 26.4 –  other assurance services 4,5 18.8 20.1 24.1 Year ended 31 Dec 146.6 155.9 148.1 1 Audit fees payable to PwC in 2024 included adjustments made to the prior year audit fee after finalisation of the 2023 financial statements. 2 Fees payable to PwC for the statutory audit of the consolidated financial statements of HSBC and the separate financial statements of HSBC Holdings. They include amounts payable for services relating to the consolidation returns of HSBC Holdings’ subsidiaries, which are clearly identifiable as being in support of the Group audit opinion. 3 Including services for assurance and other services that relate to statutory and regulatory filings, including interim reviews. 4 Including permitted services relating to attestation reports on internal controls of a service organisation primarily prepared for and used by third-party end users, including comfort letters. 5 Includes reviews of PRA regulatory reporting returns. No fees were payable by HSBC to PwC as principal auditor for the following types of services: internal audit services and services related to litigation, recruitment and remuneration. Fees payable by HSBC’s associated pension schemes to PwC 2024 2023 2022 $000 $000 $000 Audit of HSBC’s associated pension schemes 320 297 480 Year ended 31 Dec 320 297 480 No fees were payable by HSBC’s associated pension schemes to PwC as principal auditor for the following types of services: internal audit services, other assurance services, services related to corporate finance transactions, valuation and actuarial services, litigation, recruitment and remuneration, and information technology. In addition to the above, the estimated fees paid to PwC by third parties associated with HSBC amounted to $ 9.9 m (2023: $ 12.3 m ; 2022: $ 13.1 m ). In these cases, HSBC was connected with the contracting party and may therefore have been involved in appointing PwC. These fees arose from services such as auditing mutual funds managed by HSBC and reviewing the financial position of corporate concerns that borrow from HSBC. Fees payable for non-audit services for HSBC Holdings are not disclosed separately because such fees are disclosed on a consolidated basis for the Group. 402 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements 7 Tax Tax expense 2024 2023 2022 $m $m $m Current tax 1 6,115 5,718 2,984 –  for this year 5,863 5,737 3,264 –  adjustments in respect of prior years 31 ( 19 ) ( 280 ) –  Pillar 2 and qualifying domestic top-up taxes 221 — — Deferred tax 1,195 71 ( 2,175 ) –  origination and reversal of temporary differences 1,288 19 ( 2,278 ) –  effect of changes in tax rates ( 2 ) 17 ( 293 ) –  adjustments in respect of prior years ( 91 ) 35 396 Year ended 31 Dec 2 7,310 5,789 809 1 Current tax included Hong Kong profits tax of $ 1,615 m (2023: $ 1,328 m ; 2022: $ 604 m ). The Hong Kong tax rate applying to the profits of subsidiaries assessable in Hong Kong was 16.5 % (2023: 16.5 % ; 2022: 16.5 % ). 2 In addition to amounts recorded in the income statement, a tax credit of $ 12 m (2023: credit of $ 41 m ) w as recorded directly to equity . Tax reconciliation The tax charged to the income statement differs from the tax charge that would apply if all profits had been taxed at the UK corporation tax rate as follows: 2024 2023 2022 $m % $m % $m % Profit before tax 32,309 30,348 17,058 Tax expense Taxation at UK corporation tax rate of 25.0% (2023: 23.5%, 2022: 19.0%) 8,077 25.0 7,132 23.5 3,241 19.0 Impact of differently taxed overseas profits in overseas locations ( 1,351 ) ( 4.2 ) ( 612 ) ( 2.0 ) 459 2.7 UK banking surcharge 215 0.7 350 1.2 283 1.7 Items increasing tax charge in 2024: –  tax impact of sale of HSBC Argentina 1,536 4.8 — — — — –  local taxes and overseas withholding taxes 584 1.8 419 1.4 346 2.0 –  other permanent disallowables 344 1.0 227 0.7 363 2.1 –  impacts of hyperinflation 327 1.0 348 1.1 171 1.0 –  movements in unrecognised deferred tax 259 0.7 ( 22 ) ( 0.1 ) ( 2,503 ) ( 14.7 ) –  Global Minimum Tax top-up charge 221 0.7 — — — — –  bank levy 73 0.2 112 0.4 59 0.3 –  movements in provisions for uncertain tax positions 38 0.1 ( 472 ) ( 1.6 ) 27 0.2 –  impact of changes in tax rates 6 — 17 0.1 ( 293 ) ( 1.7 ) –  impairment of interest in associate — — 705 2.3 — — Items reducing tax charge in 2024: –  non-taxable gain on disposal of HSBC Canada ( 1,174 ) ( 3.6 ) — — — — –  non-taxable income and gains ( 1,079 ) ( 3.3 ) ( 1,189 ) ( 3.9 ) ( 825 ) ( 4.8 ) –  effect of profits in associates and joint ventures ( 456 ) ( 1.4 ) ( 571 ) ( 1.9 ) ( 504 ) ( 3.1 ) –  deductions for AT1 coupon payments ( 249 ) ( 0.8 ) ( 229 ) ( 0.7 ) ( 246 ) ( 1.4 ) –  adjustments in respect of prior period ( 46 ) ( 0.1 ) 16 0.1 116 0.7 –  tax impact of sale of French retail banking business ( 15 ) — — — 115 0.7 –  accounting gain on acquisition of SVB UK — — ( 442 ) ( 1.5 ) — — Year ended 31 Dec 7,310 22.6 5,789 19.1 809 4.7 The Group’s profits are taxed at different rates depending on the country or territory in which the profits arise. The key applicable tax rates for 2024 include Hong Kong ( 16.5 % ), the US ( 21 % ) and the UK ( 25 % ). If the Group’s profits were taxed at the statutory rates of the countries in which the profits arose, then the tax rate for the year would have been 21.4 % (2023: 22.6 % ). The effective tax rate for the year of 22.6 % was higher than in the previous year (2023: 19.1 % ). The effective tax rate for the year was reduced by 3.6 % by the non-taxable gain arising on the disposal of HSBC Canada, increased by 4.8 % by the non-deductible loss arising on the disposal of HSBC Argentina , increased by 70.0 % by movements in unrecognised deferred tax, primarily relating to French tax losses, and increased by 70.0 % by the Group’s Pillar 2 Global Minimum Tax charge. The effective tax rate for 2023 was increased by 2.3 % by the non-taxable impairment of the Group’s investment in BoCom, reduced by 1.6 % by the release of provisions for uncertain tax positions and reduced by 1.5 % by the non-taxable accounting gain on the acquisition of SVB UK . In July 2023, the UK enacted legislation to introduce the ‘Pillar Two’ global minimum tax model rules of the OECD’s Inclusive Framework on Base Erosion and Profit Shifting (’BEPS’) and a UK qualified domestic minimum top-up tax, with effect from 1 January 2024. Under the Pillar Two rules, a top-up tax liability arises where the Group’s effective tax rate in a jurisdiction is below 15% . The Group has recorded a Pillar Two global minimum tax charge of $ 221 m for the period, primarily related to the non-taxation of dividends and income on government bonds in Hong Kong (which have the effect of reducing the effective tax rate from the statutory rate of 16.5 % to below 15 % ) and low or nil statutory tax rates in jurisdictions such as Bermuda and the Channel Islands. For the current period, this tax expense will be substantially payable in the UK by HSBC Holdings. Many jurisdictions have introduced or announced the introduction of domestic minimum tax rules that are closely aligned to the OECD’s Pillar Two model rules, as well as new or amended corporate income tax rules, with effect from 2024 or 2025. As and when such taxes are introduced, they will have the effect of increasing local tax liabilities, eliminating or reducing the top-up tax liability payable in the UK by HSBC HSBC Holdings plc Annual Report on Form 20-F 403 Holdings in respect of those jurisdictions. Hong Kong, Bermuda and the Channel Islands have introduced such new tax rules with effect from 1 January 2025. Accounting for taxes involves some estimation because tax law is uncertain and its application requires a degree of judgement, which authorities may dispute. Liabilities are recognised based on best estimates of the probable outcome, taking into account external advice where appropriate. Exposures relating to legacy tax cases were reassessed during 2024, resulting in a charge o f $ 38 m to the income statement. We do not expect significant liabilities to arise in excess of the amounts provided. HSBC only recognises current and deferred tax assets where recovery is probable. Movement of deferred tax assets and liabilities Loan impairment provisions Unused tax losses and tax credits Financial assets at FVOCI Cash flow hedges Retirement obligations Other Total $m $m $m $m $m $m $m Assets 1,158 4,544 876 419 — 2,933 9,930 Liabilities — — — — ( 1,814 ) ( 1,600 ) ( 3,414 ) At 1 Jan 2024 1,158 4,544 876 419 ( 1,814 ) 1,333 6,516 Income statement ( 74 ) ( 640 ) 100 — ( 85 ) ( 431 ) ( 1,130 ) Other comprehensive income — — ( 49 ) 84 114 189 338 Foreign exchange and other adjustments ( 14 ) ( 40 ) ( 311 ) ( 61 ) 18 208 ( 200 ) At 31 Dec 2024 1,070 3,864 616 442 ( 1,767 ) 1,299 5,524 Assets 1 1,070 3,864 616 442 — 2,906 8,898 Liabilities 1 — — — — ( 1,767 ) ( 1,607 ) ( 3,374 ) Assets 1,062 4,397 850 1,271 — 3,048 10,628 Liabilities — — — — ( 1,673 ) ( 1,567 ) ( 3,240 ) At 1 Jan 2023 1,062 4,397 850 1,271 ( 1,673 ) 1,481 7,388 Income statement ( 39 ) 102 541 1 ( 114 ) ( 562 ) ( 71 ) Other comprehensive income — — ( 598 ) ( 974 ) 99 399 ( 1,074 ) Foreign exchange and other adjustments 135 45 83 121 ( 126 ) 15 273 At 31 Dec 2023 1,158 4,544 876 419 ( 1,814 ) 1,333 6,516 Assets 1 1,158 4,544 876 419 — 2,933 9,930 Liabilities 1 — — — — ( 1,814 ) ( 1,600 ) ( 3,414 ) 1 After netting off balances within countries, the balances as disclosed in the accounts are as follows: deferred tax assets of $ 6,841 m (2023: $ 7,754 m ) and deferred tax liabilities of $ 1,317 m (2023: $ 1,238 m ). In applying judgement in recognising deferred tax assets, management has assessed all relevant information, including future business profit projections and the track record of meeting forecasts. Management’s assessment of the likely availability of future taxable profits against which to recover deferred tax assets is based on the most recent financial forecasts approved by management, which cover a five -year period and are extrapolated where necessary, and takes into consideration the reversal of existing taxable temporary differences and past business performance. When forecasts are extrapolated beyond five years, a number of different scenarios are considered, reflecting different downward risk adjustments, in order to assess the sensitivity of our recognition and measurement conclusions in the context of such longer- term forecasts. The Group’s net deferred tax asset of $ 5.5 b n (2023: $ 6.5 b n) in cluded $ 2.6 bn (2023: $ 3.3 bn) of deferred tax assets relating to the UK, $ 3.0 b n (2023: $ 3.1 b n) of deferred tax assets relating to the US and a net deferred asset of $ 0.5 b n (2023: $ 0.9 b n) in France. The UK deferred tax asset of $ 2.6 b n excluded a $ 1.8 b n deferred tax liability arising on the UK pension scheme surplus, the reversal of which is not taken into account when estimating future taxable profit due to the level of uncertainty as to the timing and manner of its reversal. The UK deferred tax assets are supported by forecasts of taxable profit, also taking into consideration the history of profitability in the relevant businesses. The majority of the deferred tax asset relates to tax attributes which do not expire and are forecast to be recovered within 3 years and as such are less sensitive to changes in long-term profit forecasts. The net US deferred tax asset of $ 3.0 b n included $ 1.2 b n related to US tax losses, of which $ 0.9 b n expire in 10 to 15 years . Management expects the US deferred tax asset to be substantially recovered withi n 13 years , wit h the majority recovered in the first 5 years . The net deferred tax asset in France of $ 0.5 b n included $ 0.5 b n related to tax losses, which are expected to be substantially recovered within 12 years. Unused tax losses with a tax value of $ 0.2 bn have not been recognised due to the absence of convincing evidence regarding the availability of sufficient future taxable profits against which to recover them. Unrecognised deferred tax The amount of gross temporary differences, unused tax losses and tax credits for which no deferred tax asset is recognised in the balance sheet was $ 11.0 b n (2023: $ 10.4 b n). This amount included unused US state tax losses of $ 3.8 bn (2023: $ 4.0 bn ) which are forecast to expire before they are recovered, unused French tax losses of $ 0.7 bn (2023: nil ) for w hich there is insufficient evidence of future taxable profits to support recognition, and unused UK tax losses of $ 3.5 b n (2023: $ 4.5 b n), which arose prior to 1 April 2017 and can only be recovered against future taxable profits of HSBC Holdings. No deferred tax was recognised on these losses due to the absence of convincing evidence regarding the availability of sufficient future taxable profits against which to recover them . Deferred tax asset recognition is reassessed at each balance sheet date based on the available evidence. Of the total amounts on which deferred tax was not recognised, $ 6.0 bn (2023: $ 5.1 b n) had no expiry date, $ 1.0 b n (2023: $ 0.5 b n) was scheduled to expire within 10 years and the remaining balance is expected to expire after 10 years . Deferred tax is not recognised in respect of the Group’s investments in subsidiaries and branches where HSBC is able to control the timing of remittance or other realisation and where remittance or realisation is not probable in the foreseeable future. The aggregate temporary differences relating to unrecognised deferred tax liabilities arising on investments in subsidiaries and branches was $ 15.2 b n (2023: $ 14.4 b n) and the corresponding unrecognised deferred tax liability was $ 0.7 b n (2023: $ 0.7 b n). 404 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements 8 Dividends Dividends to shareholders of the parent company 2024 2023 2022 Per share Total Per share Total Per share Total $ $m $ $m $ $m Dividends paid on ordinary shares In respect of previous year: –  second interim dividend — — 0.23 4,589 0.18 3,576 –  fourth interim dividend 0.31 5,872 — — — — In respect of current year: –  first interim dividend 0.10 1,877 0.10 2,001 0.09 1,754 –  special dividend 0.21 3,942 — — — — –  second interim dividend 0.10 1,852 0.10 1,956 — — –  third interim dividend 0.10 1,805 0.10 1,946 — — Total 0.82 15,348 0.53 10,492 0.27 5,330 Total coupons on capital securities classified as equity 1,062 1,101 1,214 Dividends to shareholders 16,410 11,593 6,544 Total coupons on capital securities classified as equity 2024 2023 2022 Total Total Total First call date Per security $m $m $m Perpetual subordinated contingent convertible securities 1 $ 2,250 m issued at 6.375 % 2 Sep 2024 $ 63.750 122 143 143 $ 2,450 m issued at 6.375 % Mar 2025 $ 63.750 156 156 156 $ 3,000 m issued at 6.000 % May 2027 $ 60.000 180 180 180 $ 2,350 m issued at 6.250 % 3 Mar 2023 $ 62.500 — 52 147 $ 1,800 m issued at 6.500 % Mar 2028 $ 65.000 117 117 117 $ 1,500 m issued at 4.600 % Dec 2030 $ 46.000 69 69 69 $ 1,000 m issued at 4.000 % Mar 2026 $ 40.000 40 40 40 $ 1,000 m issued at 4.700 % Mar 2031 $ 47.000 47 47 47 $ 2,000 m issued at 8.000 % 4 Mar 2028 $ 80.000 160 80 — $ 1,350 m issued at 6.875 % 5 Sep 2029 $ 68.750 — — — $ 1,150 m issued at 6.950 % 6 Mar 2034 $ 69.500 — — — € 1,500 m issued at 5.250 % 7 Sep 2022 € 52.500 — — 76 € 1,000 m issued at 6.000 % 8 Sep 2023 € 60.000 — 56 63 € 1,250 m issued at 4.750 % Jul 2029 € 47.500 65 64 65 £ 1,000 m issued at 5.875 % Sep 2026 £ 58.750 77 72 70 SGD 1,000 m issued at 4.700 % 9 Jun 2022 SGD 47.000 — — 14 SGD 750 m issued at 5.000 % 10 Sep 2023 SGD 50.000 — 25 27 SGD 1,500 m issued at 5.250 % 11 Jun 2029 SGD 52.500 29 — — Total 1,062 1,101 1,214 1 Discretionary coupons are paid semi-annually, based on the denominations of each security. 2 This security was called by HSBC Holdings on 23 July 2024 and was redeemed and cancelled on 17 September 2024. 3 This security was called by HSBC Holdings on 30 January 2023 and was redeemed and cancelled on 23 March 2023. 4 This security was issued by HSBC Holdings on 7 March 2023. The first call period commences six calendar months prior to the reset date of 7 September 2028. 5 This security was issued by HSBC Holdings on 11 September 2024. The first call period commences six calendar months prior to the reset date of 11 March 2030. 6 This security was issued by HSBC Holdings on 11 September 2024. The first call period commences six calendar months prior to the reset date of 11 September 2034. 7 This security was called by HSBC Holdings on 9 August 2022 and was redeemed and cancelled on 16 September 2022. 8 This security was called by HSBC Holdings on 3 August 2023 and was redeemed and cancelled on 29 September 2023. 9 This security was called by HSBC Holdings on 4 May 2022 and was redeemed and cancelled on 8 June 2022. 10 This security was called by HSBC Holdings on 3 August 2023 and was redeemed and cancelled on 25 September 2023. 11 This security was issued by HSBC Holdings on 14 June 2024. The first call period commences six calendar months prior to the reset date of 14 December 2029. On 19 February 2025 , the Directors approved a fourth interim dividend in respect of the financial year ended 31 December 2 024 o f $ 0.36 per ordinary share (the ‘dividend’), an expected distribution of approximately $ 6.4 b n . The dividend will be payable on 25 April 2025 to holders of record on the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on 7 March 2025. No liability was recorded in the financial statements in respect of the fourth interim dividend for 2024. On 6 January 2025, HSBC paid a coupon on its € 1,250 m subordinated capital securities, representing a total distribution of € 30 m ( $ 31 m ) . No liability was recorded in the balance sheet at 31 December 2024 in respect of this coupon payment. HSBC Holdings plc Annual Report on Form 20-F 405 9 Earnings per share Basic earnings per ordinary share is calculated by dividing the profit attributable to ordinary shareholders of the parent company by the weighted average number of ordinary shares outstanding, after deducting own shares held. Diluted earnings per ordinary share is calculated by dividing the basic earnings, which require no adjustment for the effects of dilutive potential ordinary shares, by the weighted average number of ordinary shares outstanding, excluding own shares held, plus the weighted average number of ordinary shares that would be issued on conversion of dilutive potential ordinary shares. Basic and diluted earnings per share 2024 2023 2022 Profit Number of shares Per share Profit Number of shares Per share Profit Number of shares Per share $m (millions) $ $m (millions) $ $m (millions) $ Basic 1 22,917 18,357 1.25 22,432 19,478 1.15 14,346 19,849 0.72 Effect of dilutive potential ordinary shares 128 122 137 Diluted 1 22,917 18,485 1.24 22,432 19,600 1.14 14,346 19,986 0.72 1 Weighted average number of ordinary shares outstanding (basic) or assuming dilution (diluted) after deducting own shares held. The number of anti-dilutive employee share options excluded from the weighted average number of dilutive potential ordinary shares was Nil (2023: 23 million ; 2022: 9.4 million ). 10 Segmental analysis The Group CEO, supported by the rest of the Group Executive Committee (‘GEC’), was considered the Chief Operating Decision Maker (‘CODM’) during the reporting period for the purposes of identifying the Group’s reportable segments. As the reorganisation only took effect from 1 January 2025, it has no effect on the 2024 segmental reporting. Global business results were assessed by the CODM on the basis of constant currency performance that removes the effects of currency translation from reported results. Therefore, we disclose these results on a constant currency basis as required by IFRS Accounting Standards. The 2023 and 2022 income statements are converted at the average rates of exchange for 2024, and the balance sheets at 31 December 2023 and 31 December 2022 at the prevailing rates of exchange on 31 December 2024. Our operations are closely integrated and, accordingly, the presentation of data includes internal allocations of certain items of income and expense. These allocations include the costs of certain support services and global functions to the extent that they can be meaningfully attributed to global businesses. While such allocations have been made on a systematic and consistent basis, they involve a certain degree of subjectivity. Costs that are not allocated to global businesses are included in Corporate Centre. Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-company and inter- business line transactions. All such transactions are undertaken on arm’s length terms. Measurement of segmental assets, liabilities, income and expenses is in accordance with the Group’s accounting policies. Shared costs are included in segments on the basis of actual recharges. The intra-group elimination items for the global businesses are presented in Corporate Centre. Our global businesses We provide a comprehensive range of banking and related financial services to our customers in our three global businesses. The products and services offered to customers are organised by these global businesses. – Wealth and Personal Banking (‘WPB’) provides a full range of retail banking and wealth products to our customers from personal banking to ultra high net worth individuals. Typically, customer offerings include retail banking products, such as current and savings accounts, mortgages and personal loans, credit cards, debit cards and local and international payment services. We also provide wealth management services, including insurance and investment products, global asset management services, investment management and private wealth solutions for customers with more sophisticated and international requirements. – Commercial Banking (‘CMB’) offers a broad range of products and services to serve the needs of our commercial customers, including small and medium-sized enterprises, mid-market enterprises and corporates. These include credit and lending, international trade and receivables finance, treasury management and liquidity solutions (payments and cash management and commercial cards), commercial insurance and investments. CMB also offers customers access to products and services offered by other global businesses, such as Global Banking and Markets, which include foreign exchange products, raising capital on debt and equity markets and advisory services. – Global Banking and Markets (‘GBM’) provides tailored financial solutions to major government, corporate and institutional clients and private investors worldwide. The client-focused business lines deliver a full range of banking capabilities, including financing, advisory and transaction services, a markets business that provides services in credit, rates, foreign exchange, equities, money markets and securities services, and principal investment activities. 406 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements HSBC constant currency profit before tax and balance sheet data 2024 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Net operating income/(expense) before change in expected credit losses and other credit impairment charges 1 28,674 21,580 17,529 ( 1,929 ) 65,854 –  external 20,460 21,565 30,698 ( 6,869 ) 65,854 –  inter-segment 8,214 15 ( 13,169 ) 4,940 — –  of which: net interest income/(expense) 2 20,352 17,261 7,488 ( 12,368 ) 32,733 Change in expected credit losses and other credit impairment charges ( 1,335 ) ( 1,815 ) ( 235 ) ( 29 ) ( 3,414 ) Net operating income/(expense) 27,339 19,765 17,294 ( 1,958 ) 62,440 Total operating expenses ( 15,204 ) ( 7,906 ) ( 10,231 ) 298 ( 33,043 ) Operating profit/(loss) 12,135 11,859 7,063 ( 1,660 ) 29,397 Share of profit in associates and joint ventures less impairment 47 1 — 2,864 2,912 Constant currency profit before tax 12,182 11,860 7,063 1,204 32,309 % % % % % Share of HSBC’s constant currency profit before tax 37.7 36.7 21.9 3.7 100.0 Constant currency cost efficiency ratio 53.0 36.6 58.4 15.4 50.2 Constant currency balance sheet data $m $m $m $m $m Loans and advances to customers (net) 447,085 306,926 169,516 7,131 930,658 Interests in associates and joint ventures 558 25 108 28,218 28,909 Total external assets 890,080 603,841 1,388,845 134,282 3,017,048 Customer accounts 823,267 490,475 340,898 315 1,654,955 2023 Net operating income/(expense) before change in expected credit losses and other credit impairment charges 1 26,848 22,396 15,771 ( 103 ) 64,912 –  external 18,669 23,686 27,618 ( 5,061 ) 64,912 –  inter-segment 8,179 ( 1,290 ) ( 11,847 ) 4,958 — –  of which: net interest income/(expense) 2 19,902 16,289 6,860 ( 8,899 ) 34,152 Change in expected credit losses and other credit impairment charges ( 935 ) ( 2,006 ) ( 317 ) ( 1 ) ( 3,259 ) Net operating income/(expense) 25,913 20,390 15,454 ( 104 ) 61,653 Total operating expenses ( 14,352 ) ( 7,234 ) ( 9,872 ) ( 36 ) ( 31,494 ) Operating profit/(loss) 11,561 13,156 5,582 ( 140 ) 30,159 Share of profit/(loss) in associates and joint ventures 3 64 ( 1 ) — ( 319 ) ( 256 ) Constant currency profit/(loss) before tax 11,625 13,155 5,582 ( 459 ) 29,903 % % % % % Share of HSBC’s constant currency profit before tax 38.9 44.0 18.7 ( 1.6 ) 100.0 Constant currency cost efficiency ratio 53.5 32.3 62.6 ( 35.0 ) 48.5 Constant currency balance sheet data $m $m $m $m $m Loans and advances to customers (net) 444,856 301,103 170,868 262 917,089 Interests in associates and joint ventures 539 23 107 26,226 26,895 Total external assets 915,062 613,124 1,298,065 146,296 2,972,547 Customer accounts 792,710 465,095 321,226 582 1,579,613 HSBC Holdings plc Annual Report on Form 20-F 407 HSBC constant currency profit before tax and balance sheet data (continued) 2022 Wealth and Personal Banking Commercial Banking Global Banking and Markets Corporate Centre Total $m $m $m $m $m Net operating income/(expense) before change in expected credit losses and other credit impairment charges 1 20,772 16,207 14,542 ( 1,934 ) 49,587 –  external 18,176 16,834 18,704 ( 4,127 ) 49,587 –  inter-segment 2,596 ( 627 ) ( 4,162 ) 2,193 — –  of which: net interest income/(expense) 2 15,887 11,584 4,602 ( 2,633 ) 29,440 Change in expected credit losses and other credit impairment charges ( 1,160 ) ( 1,868 ) ( 578 ) ( 9 ) ( 3,615 ) Net operating income/(expense) 19,612 14,339 13,964 ( 1,943 ) 45,972 Total operating expenses ( 14,141 ) ( 6,810 ) ( 9,403 ) ( 1,875 ) ( 32,229 ) Operating profit/(loss) 5,471 7,529 4,561 ( 3,818 ) 13,743 Share of profit/(loss) in associates and joint ventures 29 1 ( 2 ) 2,531 2,559 Constant currency profit/(loss) before tax 5,500 7,530 4,559 ( 1,287 ) 16,302 % % % % % Share of HSBC’s constant currency profit before tax 33.7 46.2 28.0 ( 7.9 ) 100.0 Constant currency cost efficiency ratio 68.1 42.0 64.7 ( 96.9 ) 65.0 Constant currency balance sheet data $m $m $m $m $m Loans and advances to customers (net) 425,072 309,224 186,653 350 921,299 Interests in associates and joint ventures 503 27 90 27,676 28,296 Total external assets 873,688 602,624 1,305,319 161,872 2,943,503 Customer accounts 781,881 462,806 323,420 443 1,568,550 1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 2 Net interest expense recognised in Corporate Centre incl udes $ 11.4 bn (2023: $ 8.7 bn ; 20 22: $ 2.5 b n) of interest expense in relation to the internal cost to fund trading and fair value net assets; and the funding cost of foreign exchange swaps in our Markets Treasury function. 3 Includes an impairment loss of $ 3.0 b n recognised in respect of the Group’s investment in BoCom in 2023. Reported external net operating income is attributed to countries and territories on the basis of the location of the branch responsible for reporting the results or advancing the funds: 2024 2023 2022 $m $m $m Reported external net operating income/(expense) by country/territory 1 65,854 66,058 50,620 –  UK 2 12,307 11,027 11,710 –  Hong Kong 20,811 20,185 15,454 –  US 4,233 3,816 3,893 –  France 3,804 4,208 ( 177 ) –  other countries/territories 24,699 26,822 19,740 1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 2 UK includes HSBC UK Bank plc (ring-fenced bank), HSBC Bank plc (non-ring-fenced bank), the ultimate holding company, HSBC Holdings plc, and the separately incorporated group of service companies (‘ServCo Group’). Constant currency results reconciliation 2024 2023 2022 Reported and constant currency Constant currency Currency translation Reported Constant currency Currency translation Reported $m $m $m $m $m $m $m Revenue 1 65,854 64,912 ( 1,146 ) 66,058 49,587 ( 1,033 ) 50,620 ECL ( 3,414 ) ( 3,259 ) 188 ( 3,447 ) ( 3,615 ) ( 31 ) ( 3,584 ) Operating expenses ( 33,043 ) ( 31,494 ) 576 ( 32,070 ) ( 32,229 ) 472 ( 32,701 ) Share of profit/(loss) in associates and joint ventures less impairment 2 2,912 ( 256 ) ( 63 ) ( 193 ) 2,559 ( 164 ) 2,723 Profit before tax 32,309 29,903 ( 445 ) 30,348 16,302 ( 756 ) 17,058 1 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue. 2 Includes an impairment loss of $ 3.0 b n recognised in respect of the Group’s investment in BoCom in 2023. Constant currency balance sheet reconciliation 2024 2023 2022 Reported and constant currency Constant currency Currency translation Reported Constant currency Currency translation Reported $m $m $m $m $m $m $m Loans and advances to customers (net) 930,658 917,089 21,446 938,535 921,299 2,262 923,561 Interests in associates and joint ventures 28,909 26,895 449 27,344 28,296 958 29,254 Total external assets 3,017,048 2,972,547 66,130 3,038,677 2,943,503 5,783 2,949,286 Customer accounts 1,654,955 1,579,613 32,034 1,611,647 1,568,550 1,753 1,570,303 408 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Notable items 2024 2023 2022 $m $m $m Year ended 31 Dec Notable items Revenue Disposals, acquisitions and related costs 1,2 ( 1,343 ) 1,298 ( 2,737 ) Fair value movements on financial instruments 3 — 14 ( 618 ) Restructuring and other related costs — — ( 247 ) Disposal losses on Markets Treasury repositioning — ( 977 ) — Early redemption of legacy securities ( 237 ) — — Operating expenses Disposals, acquisitions and related costs ( 199 ) ( 321 ) ( 18 ) Restructuring and other related costs 4 ( 34 ) 136 ( 2,882 ) Impairment of interests in associates 5 — ( 3,000 ) — 1 Amounts in 2024 include a $ 1.0 b n loss on disposal and a $ 5.2 b n loss on the recycling in foreign currency translation reserve losses and other reserves arising on sale of our business in Argentina. This is partly offset by a $ 4.8 b n gain on disposal of our banking business in Canada, inclusive of a $ 0.3 b n gain on the foreign exchange hedging of the sales proceeds, the recycling of $ 0.6 b n in foreign currency translation reserve losses and $ 0.4 b n of other reserves losses. 2 Amounts in 2023 include the gain of $ 1.6 b n recognised in respect of the acquisition of SVB UK, as well as the impact of the sale of our retail banking operations in France. 3 Fair value movements on non-qualifying hedges in HSBC Holdings. 4 Amounts in 2024 relate to restructuring provisions recognised in 2024 and reversals of restructuring provisions recognised during 2022. Amounts in 2023 relate to reversals of restructuring provisions recognised during 2022. 5 Relates to an impairment loss of $ 3.0 b n recognised in respect of the Group’s investment in BoCom in 2023. 11 Trading assets 2024 2023 $m $m Treasury and other eligible bills 32,022 24,433 Debt securities 97,275 106,108 Equity securities 155,194 123,663 Trading securities 284,491 254,204 Loans and advances to banks 1 6,123 9,761 Loans and advances to customers 1 24,228 25,194 Year ended 31 Dec 314,842 289,159 1 Loans and advances to banks and customers include reverse repos, stock borrowing and other accounts. 12 Fair values of financial instruments carried at fair value Control framework Fair values are subject to a control framework designed to ensure that they are either determined or validated by a function independent of the risk taker. Where fair values are determined by reference to externally quoted prices or observable pricing inputs to models, independent price determination or validation is used. For inactive markets, HSBC sources alternative market information, with greater weight given to information that is considered to be more relevant and reliable. Examples of the factors considered are price observability, instrument comparability, consistency of data sources, underlying data accuracy and timing of prices. For fair values determined using valuation models, the control framework includes development or validation by independent support functions of the model logic, inputs, model outputs and adjustments. Valuation models are subject to a process of due diligence before becoming operational and are calibrated against external market data on an ongoing basis. Changes in fair value are generally subject to a profit and loss analysis process and are disaggregated into high-level categories including portfolio changes, market movements and other fair value adjustments. The majority of financial instruments measured at fair value are in GBM. GBM’s fair value governance structure comprises its Finance function, Valuation Committees and a Valuation Committee Review Group. Finance is responsible for establishing procedures governing valuation and ensuring fair values are in compliance with accounting standards. The fair values are reviewed by the Valuation Committees, which consist of independent support functions. These committees are overseen by the Valuation Committee Review Group, which considers all material subjective valuations. Financial liabilities measured at fair value In certain circumstances, HSBC records its own debt in issue at fair value, based on quoted prices in an active market for the specific instrument. When quoted market prices are unavailable, the own debt in issue is valued using valuation techniques, the inputs for which are either based on quoted prices in an inactive market for the instrument or are estimated by comparison with quoted prices in an active market for similar instruments. In both cases, the fair value includes the effect of applying the credit spread that is appropriate to HSBC’s liabilities. The change in fair value of issued debt securities attributable to the Group’s own credit spread is computed as follows: for each security at each reporting date, an externally verifiable price is obtained or a price is derived using credit spreads for similar securities for the same issuer. Then, using discounted cash flow, each security is valued using an appropriate market discount curve. The difference in the valuations is attributable to the Group’s own credit spread. This methodology is applied consistently across all securities. HSBC Holdings plc Annual Report on Form 20-F 409 Structured notes issued and certain other hybrid instruments are reported as financial liabilities designated at fair value. The credit spread applied to these instruments is derived from the spreads at which HSBC issues structured notes. Gains and losses arising from changes in the credit spread of liabilities issued by HSBC, recorded in other comprehensive income, reverse over the contractual life of the debt, provided that the debt is not repaid at a premium or a discount. Fair value hierarchy Fair values of financial assets and liabilities are determined according to the following hierarchy: – Level 1 – valuation technique using quoted market price. These are financial instruments with quoted prices for identical instruments in active markets that HSBC can access at the measurement date. – Level 2 – valuation technique using observable inputs. These are financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable. – Level 3 – valuation technique with significant unobservable inputs. These are financial instruments valued using valuation techniques where one or more significant inputs are unobservable. Financial instruments carried at fair value and bases of valuation 2024 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $m $m $m $m $m $m $m $m Recurring fair value measurements at 31 Dec Assets Trading assets 236,593 71,574 6,675 314,842 202,020 82,833 4,306 289,159 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 39,331 56,694 19,744 115,769 27,030 63,825 19,788 110,643 Derivatives 1,859 264,629 2,149 268,637 931 226,714 2,069 229,714 Financial investments 258,371 78,088 2,734 339,193 215,228 76,591 2,618 294,437 Liabilities Trading liabilities 42,038 23,160 784 65,982 53,354 19,318 478 73,150 Financial liabilities designated at fair value 2,152 127,458 9,117 138,727 1,266 129,232 10,928 141,426 Derivatives 1,088 260,518 2,842 264,448 1,918 230,285 2,569 234,772 The table below provides the fair value levelling of assets held for sale and liabilities of disposal groups that have been classified as held for sale in accordance with IFRS 5. For further details, see Note 23 . Financial instruments carried at fair value and bases of valuation – assets and liabilities held for sale 2024 2023 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total $m $m $m $m $m $m $m $m Recurring fair value measurements at 31 Dec Assets Trading assets — — — — 2,403 61 — 2,465 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 2,967 9,018 2,575 14,560 — 15 49 64 Derivatives — 36 — 36 — 528 — 528 Financial investments 2,651 5,345 504 8,500 9,357 — 28 9,385 Liabilities Trading liabilities — — — — 1,352 64 — 1,417 Financial liabilities designated at fair value — 130 — 130 — 2,370 — 2,370 Derivatives — 19 — 19 — 615 — 615 Transfers between Level 1 and Level 2 fair values Assets Liabilities Financial investments Trading assets Designated and otherwise mandatorily measured at fair value Derivatives Trading liabilities Designated at fair value Derivatives $m $m $m $m $m $m $m At 31 Dec 2024 Transfers from Level 1 to Level 2 13,511 9,246 1,540 — 191 — — Transfers from Level 2 to Level 1 10,752 6,060 3,042 — 159 — — At 31 Dec 2023 Transfers from Level 1 to Level 2 13,200 8,066 1,709 — 54 — — Transfers from Level 2 to Level 1 9,975 5,758 2,477 — 309 — — Transfers between levels of the fair value hierarchy are deemed to occur at the end of each quarterly reporting period. Transfers are primarily attributable to changes in price transparency and in the assessment of observability . 410 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Fair value adjustments Fair value adjustments take into consideration additional factors not incorporated within the primary product valuation model that would otherwise be considered by a market participant. Adjustments are calculated using model infrastructure including those within primary valuation systems. We classify fair value adjustments as either ‘risk-related’ or ‘model-related’. The majority of these adjustments relate to MSS. Movements in the amount of fair value adjustments do not necessarily translate in equivalent movements of profits or losses within the income statement, as these movements can be compensated by other related profits or loss effects. For example, as models are enhanced, fair value adjustments may no longer be required. Similarly, fair value adjustments will decrease when the related positions are unwound, but this may not result in profit or loss. Fair value adjustments 2024 2023 GBM Corporate Centre GBM Corporate Centre $m $m $m $m Type of adjustment Risk-related 634 35 692 41 –  bid-offer 366 2 414 — –  uncertainty 98 3 75 3 –  credit valuation adjustment 126 27 164 35 –  debit valuation adjustment ( 24 ) — ( 54 ) — –  funding fair value adjustment 68 3 93 3 Model-related 50 — 63 — –  model limitation 50 — 63 — Inception profit (Day 1 P&L reserves) 92 — 86 — At 31 Dec 776 35 841 41 The net reduction in fair value adjustments was predominantly driven by changes to exposure, and tightening of credit and liquidity market spreads. Bid-offer IFRS 13 ‘Fair Value Measurement’ requires the use of the price within the bid-offer spread that is most representative of fair value. Valuation models will typically generate mid-market values. The bid-offer adjustment reflects the extent to which bid-offer costs would be incurred if substantially all residual net portfolio market risks were closed using available hedging instruments or by disposing of or unwinding the position. Uncertainty Certain model inputs may be less readily determinable from market data and/or the choice of model itself may be more subjective. In these circumstances, an adjustment may be necessary to reflect the likelihood that market participants would adopt more conservative values for uncertain parameters and/or model assumptions than those used in HSBC’s valuation model. Credit and debit valuation adjustments The credit valuation adjustment (‘CVA’) is an adjustment to the valuation of over-the-counter (‘OTC’) derivative contracts to reflect the possibility that the counterparty may default and that HSBC may not receive the full market value of the transactions. The debit valuation adjustment (‘DVA’) is an adjustment to the valuation of OTC derivative contracts to reflect the possibility that HSBC may default, and that it may not pay the full market value of the transactions. The DVA considers the overlap with the funding fair value adjustment. HSBC calculates a separate CVA and DVA for each legal entity, and for each counterparty to which the entity has exposure. With the exception of central clearing parties, all third-party counterparties are included in the CVA and DVA calculations, and these adjustments are not netted across Group entities. HSBC calculates the CVA by applying the probability of default (‘PD’) of the counterparty, conditional on the non-default of HSBC, to HSBC’s expected positive exposure to the counterparty and multiplying the result by the loss expected in the event of default. Conversely, HSBC calculates the DVA by applying the PD of HSBC, conditional on the non-default of the counterparty, to the expected positive exposure of the counterparty to HSBC and multiplying the result by the loss expected in the event of default. Both calculations are performed over the life of the potential exposure. For most products HSBC uses a simulation methodology, which incorporates a range of potential exposures over the life of the portfolio, to calculate the expected positive exposure to a counterparty. The simulation methodology includes credit mitigants, such as counterparty netting agreements and collateral agreements with the counterparty. The methodologies do not, in general, account for ‘wrong-way risk’. Wrong-way risk is an adverse correlation between the counterparty’s probability of default and the mark-to-market value of the underlying transaction. The risk can either be general, perhaps related to the currency of the issuer country, or specific to the transaction concerned. When there is significant wrong-way risk, a trade-specific approach is applied to reflect this risk in the valuation. Funding fair value adjustment The funding fair value adjustment (‘FFVA’) is calculated by applying future market funding spreads to the expected future funding exposure of any uncollateralised component of the OTC derivative portfolio. The expected future funding exposure is calculated by a simulation methodology, where available, and is adjusted for events that may terminate the exposure, such as the default of HSBC or the counterparty. Model limitation Models used for portfolio valuation purposes may be based upon a simplified set of assumptions that do not capture all current and future material market characteristics. In these circumstances, model limitation adjustments are adopted. HSBC Holdings plc Annual Report on Form 20-F 411 Inception profit (Day 1 P&L reserves) Inception profit adjustments are adopted when the fair value estimated by a valuation model is based on one or more significant unobservable inputs. The accounting for inception profit adjustments is discussed in Note 1 . Fair value valuation bases Financial instruments measured at fair value using a valuation technique with significant unobservable inputs – Level 3 Assets Liabilities Financial investments Trading assets Designated and otherwise mandatorily measured at fair value through profit or loss Derivatives Total Trading liabilities Designated at fair value Derivatives Total $m $m $m $m $m $m $m $m $m Private equity including strategic investments 552 1 17,705 — 18,258 — 1 — 1 Asset-backed securities 182 198 — — 380 — — — — Structured notes — — 3 — 3 — 9,113 — 9,113 Other derivatives — — — 2,149 2,149 — — 2,842 2,842 Other portfolios 2,000 6,476 2,036 — 10,512 784 3 — 787 At 31 Dec 2024 2,734 6,675 19,744 2,149 31,302 784 9,117 2,842 12,743 Private equity including strategic investments 507 7 17,640 — 18,154 — 1 — 1 Asset-backed securities 309 128 8 — 445 — — — — Structured notes — — 3 — 3 — 10,331 — 10,331 Other derivatives — — — 2,069 2,069 — — 2,569 2,569 Other portfolios 1,802 4,171 2,137 — 8,110 478 596 — 1,074 At 31 Dec 2023 2,618 4,306 19,788 2,069 28,781 478 10,928 2,569 13,975 Level 3 instruments are present in both ongoing and legacy businesses. Loans held for securitisation, derivatives with monolines, certain ‘other derivatives’ and predominantly all Level 3 asset-backed securities are legacy positions. HSBC has the capability to hold these positions. Private equity including strategic investments The fair value of a private equity investment (including strategic investments) is estimated on the basis of an analysis of the investee’s financial position and results, risk profile, prospects and other factors; by reference to market valuations for similar entities quoted in an active market; the price at which similar companies have changed ownership; or from published net asset values (‘NAV’) received. If necessary, adjustments are made to the NAV of funds to obtain the best estimate of fair value. Asset-backed securities While quoted market prices are generally used to determine the fair value of the asset-backed securities (‘ABSs’), valuation models are used to substantiate the reliability of the limited market data available and to identify whether any adjustments to quoted market prices are required. For certain ABSs, such as residential mortgage-backed securities, the valuation uses an industry standard model with assumptions relating to prepayment speeds, default rates and loss severity based on collateral type, and performance, as appropriate. The valuations output is benchmarked for consistency against observable data for securities of a similar nature. Structured notes The fair value of Level 3 structured notes is derived from the fair value of the underlying debt security, and the fair value of the embedded derivative is determined as described in the paragraph below on derivatives. These structured notes comprise principally equity-linked notes issued by HSBC, which provide the counterparty with a return linked to the performance of equity securities and other portfolios. Examples of the unobservable parameters include long-dated equity volatilities and correlations between equity prices, and interest and foreign exchange rates. Derivatives OTC derivative valuation models calculate the present value of expected future cash flows, based upon ‘no arbitrage’ principles. For many vanilla derivative products, the modelling approaches used are standard across the industry. For more complex derivative products, there may be some differences in market practice. Inputs to valuation models are determined from observable market data wherever possible, including prices available from exchanges, dealers, brokers or providers of consensus pricing. Certain inputs may not be observable in the market directly, but can be determined from observable prices via model calibration procedures or estimated from historical data or other sources. 412 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Reconciliation of fair value measurements in Level 3 of the fair value hierarchy Movement in Level 3 financial instruments Assets Liabilities Financial investments Trading assets Designated and otherwise mandatorily measured at fair value through profit or loss Derivatives Trading liabilities Designated at fair value Derivatives $m $m $m $m $m $m $m At 1 Jan 2024 2,618 4,306 19,788 2,069 478 10,928 2,569 Total gains/(losses) recognised in profit or loss ( 9 ) 280 896 1,037 18 496 1,268 –  net income/(losses) from financial instruments held for trading or managed on a fair value basis — 280 — 1,037 18 496 1,268 –  net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss — — 684 — — — — –  changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss — — 212 — — — — –  gains less losses from financial investments at fair value through other comprehensive income ( 9 ) — — — — — — Total gains/(losses) recognised in other comprehensive income (‘OCI’) 1 ( 78 ) ( 115 ) ( 39 ) ( 36 ) ( 18 ) ( 45 ) ( 53 ) –  financial investments: fair value gains/(losses) 18 — — — — 33 — –  exchange differences ( 96 ) ( 115 ) ( 39 ) ( 36 ) ( 18 ) ( 78 ) ( 53 ) Purchases 1,670 4,170 6,261 — 924 — — New issuances — — — — — 6,521 — Sales ( 97 ) ( 1,477 ) ( 649 ) — ( 295 ) — — Settlements 2 ( 1,011 ) ( 967 ) ( 6,476 ) ( 897 ) ( 307 ) ( 4,750 ) ( 568 ) Transfers out 3 ( 438 ) ( 429 ) ( 278 ) ( 777 ) ( 29 ) ( 6,048 ) ( 1,346 ) Transfers in 3 79 907 241 753 13 2,015 972 At 31 Dec 2024 2,734 6,675 19,744 2,149 784 9,117 2,842 Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2024 — ( 150 ) 11 ( 1,377 ) ( 6 ) ( 94 ) ( 1,343 ) –  net income/(losses) from financial instruments held for trading or managed on a fair value basis — ( 150 ) — ( 1,377 ) ( 6 ) — ( 1,343 ) –  changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss — — 11 — — ( 94 ) — At 1 Jan 2023 2,961 4,817 17,407 1,964 474 10,432 2,920 Total gains/(losses) recognised in profit or loss ( 44 ) 266 921 692 75 97 910 –  net income/(losses) from financial instruments held for trading or managed on a fair value basis — 266 — 692 75 97 910 –  net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss — — — — — — — –  changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss — — 921 — — — — –  gains less losses from financial investments at fair value through other comprehensive income ( 44 ) — — — — — — Total gains/(losses) recognised in other comprehensive income (‘OCI’) 1 28 108 87 81 24 523 111 –  financial investments: fair value gains/(losses) ( 44 ) — — — — 335 — –  exchange differences 72 108 87 81 24 188 111 Purchases 353 2,276 3,555 — 291 — — New issuances — 2 — — 2 5,389 — Sales ( 290 ) ( 2,478 ) ( 658 ) — ( 320 ) ( 2 ) — Settlements ( 352 ) ( 872 ) ( 1,886 ) ( 1,018 ) ( 74 ) ( 3,258 ) ( 1,565 ) Transfers out ( 662 ) ( 922 ) ( 156 ) ( 240 ) ( 45 ) ( 2,881 ) ( 358 ) Transfers in 624 1,109 518 590 51 628 551 At 31 Dec 2023 2,618 4,306 19,788 2,069 478 10,928 2,569 Unrealised gains/(losses) recognised in profit or loss relating to assets and liabilities held at 31 Dec 2023 — ( 152 ) 82 737 — ( 433 ) ( 903 ) –  net income/(losses) from financial instruments held for trading or managed on a fair value basis — ( 152 ) — 737 — — ( 903 ) –  changes in fair value of other financial instruments mandatorily measured at fair value through profit or loss — — 82 — — ( 433 ) — 1 Included in ‘financial investments: fair value gains/(losses)’ in the current year and ‘exchange differences’ in the consolidated statement of comprehensive income. 2 Includes $ 3.1 b n decrease from classification of the assets of our French Life Insurance business as assets held for sale. 3 Includes $ 4.4 b n of transfers out and $ 1.5 b n of transfers in relating to enhancement of observability assessments on equity structured notes. Transfers between levels of the fair value hierarchy are deemed to occur at the end of each quarterly reporting period. Transfers are primarily attributable to changes in price transparency and in the assessment of observability. HSBC Holdings plc Annual Report on Form 20-F 413 Effect of changes in significant unobservable assumptions to reasonably possible alternatives Sensitivity of fair values to reasonably possible alternative assumptions 2024 2023 Reflected in profit or loss Reflected in OCI Reflected in profit or loss Reflected in OCI Favourable changes Un- favourable changes Favourable changes Un- favourable changes Favourable changes Un- favourable changes Favourable changes Un- favourable changes $m $m $m $m $m $m $m $m Derivatives, trading assets and trading liabilities 1 481 ( 313 ) — — 492 ( 531 ) — — Financial assets and liabilities designated and otherwise mandatorily measured at fair value through profit or loss 1,434 ( 1,141 ) — — 1,092 ( 1,100 ) — — Financial investments 21 ( 21 ) 47 ( 50 ) 13 ( 12 ) 61 ( 66 ) At 31 Dec 1,936 ( 1,475 ) 47 ( 50 ) 1,597 ( 1,643 ) 61 ( 66 ) 1 ‘Derivatives, trading assets and trading liabilities’ are presented as one category to reflect the manner in which these instruments are risk-managed. The sensitivity analysis for certain private equity positions has been enhanced in order to reduce dependency on historical observations and focus on current valuation uncertainty, resulting in some increases in favourable sensitivities. T he sensitivity analysis aims to measure a range of fair values consistent with the application of a 95 % confidence interval. Methodologies take account of the nature of the valuation technique employed, as well as the availability and reliability of observable proxy and historical data. When the fair value of a financial instrument is affected by more than one unobservable assumption, the above table reflects the most favourable or the most unfavourable change from varying the assumptions individually. Key unobservable inputs to Level 3 financial instruments The following table lists key unobservable inputs to Level 3 financial instruments and provides the range of those inputs at 31 December 2024 . Quantitative information about significant unobservable inputs in Level 3 valuations Fair value 2024 2023 Assets Liabilities Key valuation techniques Key unobservable inputs Full range of inputs Full range of inputs $m $m Lower Higher Lower Higher Private equity including strategic investments 2 18,258 1 Price – Net asset value Current Value/Cost 0 291 See footnote 2 Asset-backed securities 380 — –  collateralised loan/debt obligation 100 — Market proxy Price 0 97 0 94 –  other ABSs 280 — Market proxy Price 0 248 0 220 Structured notes 3 9,113 –  equity-linked notes 3 5,739 Model – Option model Equity volatility 6 % 70 % 6 % 154 % Model – Option model Equity correlation 15 % 100 % 34 % 100 % –  Foreign exchange-linked notes — 1,833 Model – Option model Foreign exchange volatility 3 % 35 % 1 % 34 % –  other structured notes — 1,541 Derivatives 2,149 2,842 –  interest rate derivatives 1,102 1,066 securitisation swaps 196 186 Model – Discounted cash flow Prepayment rate 5 % 10 % 5 % 10 % long-dated swaptions 71 76 Model – Option model Interest rate volatility 9 % 30 % 11 % 37 % other interest rate derivatives 835 804 –  Foreign exchange derivatives 202 212 Foreign exchange options 154 174 Model – Option model Foreign exchange volatility 1 % 26 % 1 % 31 % other foreign exchange derivatives 48 38 –  equity derivatives 460 638 long-dated single stock options 145 166 Model – Option model Equity volatility 6 % 118 % 6 % 110 % other equity derivatives 315 472 –  credit derivatives 376 922 total return swaps 349 847 Market proxy Price 0 104 0 104 other credit derivatives 27 75 –  other derivatives 9 4 Other portfolios 10,512 787 –  repurchase agreements 1,739 742 Model – Discounted cash flow Interest rate curve 0 % 26 % 3 % 8 % –  bonds 4,300 27 Market proxy Price 0 140 0 101 –  other 1 4,473 18 At 31 Dec 2024 31,302 12,743 1 ‘Other’ includes a range of asset holdings including loans and deposits, syndicated loans and infrastructure debt. 2 ‘Private equity including strategic investments’ includes private equity, private credit and private equity fund, primarily held as part of our Insurance business and for strategic investments. The analysis for private equity positions has been enhanced with the range of key unobservable inputs now quoted. 414 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements The range of values above shows the highest and lowest unobservable inputs that have been used to value significant Level 3 exposures and reflects the diversity of the underlying financial instruments in scope and subsequent differentiation in pricing. Private equity including strategic investments The ‘private equity’ holdings include private equity investments and private equity funds held as limited partners. The key unobservable input is the current value of the underlying positions, determined using valuation techniques in line with the International Capital Valuation Guidelines. The inputs represented are an appropriate range of inputs normalised across different exposure types. Prepayment rates Prepayment rates are a measure of the anticipated future speed at which a loan portfolio will be repaid in advance of the due date. They vary according to the nature of the loan portfolio and expectations of future market conditions, and may be estimated using a variety of evidence, such as prepayment rates implied from proxy observable security prices, current or historical prepayment rates and macroeconomic modelling. Market proxy Market proxy pricing may be used for an instrument when specific market pricing is not available but there is evidence from instruments with common characteristics. In some cases it might be possible to identify a specific proxy, but more generally evidence across a wider range of instruments will be used to understand the factors that influence current market pricing and the manner of that influence. Volatility Volatility is a measure of the anticipated future variability of a market price. It varies by underlying reference market price, and by strike and maturity of the option. Certain volatilities, typically those of a longer-dated nature, are unobservable and are estimated from observable data. The range of unobservable volatilities reflects the wide variation in volatility inputs by reference market price. Correlation Correlation is a measure of the inter-relationship between two market variables and is expressed as a number between minus one and one. It is used to value more complex instruments where the payout is dependent upon more than one market variable. There is a wide range of instruments for which correlation is an input, and consequently a wide range of both same-asset correlations and cross-asset correlations is used. In general, the range of same-asset correlations will be narrower than the range of cross-asset correlations. Unobservable correlations may be estimated based upon a range of evidence, including consensus pricing services, HSBC trade prices, proxy correlations and examination of historical price relationships. The range of unobservable correlations quoted in the table reflects the wide variation in correlation inputs by market variable pair. Credit spread Credit spread is the premium over a benchmark interest rate required by the market to accept lower credit quality. In a discounted cash flow model, the credit spread increases the discount factors applied to future cash flows, thereby reducing the value of an asset. Credit spreads may be implied from market prices and may not be observable in more illiquid markets. Inter-relationships between key unobservable inputs Key unobservable inputs to Level 3 financial instruments may not be independent of each other. As described above, market variables may be correlated. This correlation typically reflects the manner in which different markets tend to react to macroeconomic or other events. Furthermore, the effect of changing market variables on the HSBC portfolio will depend on HSBC’s net risk position in respect of each variable. HSBC Holdings Basis of valuing HSBC Holdings’ financial assets and liabilities measured at fair value 2024 2023 Level 1 Level 2 Total Level 1 Level 2 Total $m $m $m $m $m $m Recurring fair value measurement Assets at 31 Dec Trading assets 709 — 709 — — — Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value — 61,286 61,286 — 59,879 59,879 Derivatives — 3,054 3,054 — 3,344 3,344 Liabilities at 31 Dec Financial liabilities designated at fair value — 41,582 41,582 — 43,638 43,638 Derivatives — 5,340 5,340 — 6,090 6,090 HSBC Holdings plc Annual Report on Form 20-F 415 13 Fair values of financial instruments not carried at fair value Fair values of financial instruments not carried at fair value and bases of valuation Fair value Carrying amount Quoted market price Level 1 Observable inputs Level 2 Significant unobservable inputs Level 3 Total $m $m $m $m $m At 31 Dec 2024 Assets Loans and advances to banks 102,039 — 101,007 1,048 102,055 Loans and advances to customers 1 930,658 — 11,435 906,208 917,643 Reverse repurchase agreements – non-trading 252,549 — 252,598 — 252,598 Financial investments – at amortised cost 153,973 120,843 29,493 724 151,060 Liabilities Deposits by banks 73,997 — 74,025 — 74,025 Customer accounts 1,654,955 — 1,655,151 — 1,655,151 Repurchase agreements – non-trading 180,880 — 180,873 — 180,873 Debt securities in issue 105,785 — 105,689 954 106,643 Subordinated liabilities 25,958 — 28,262 — 28,262 At 31 Dec 2023 Assets Loans and advances to banks 112,902 2 111,263 1,479 112,744 Loans and advances to customers 938,535 — 13,258 911,124 924,382 Reverse repurchase agreements – non-trading 252,217 — 252,243 — 252,243 Financial investments – at amortised cost 148,326 115,383 30,765 440 146,588 Liabilities Deposits by banks 73,163 — 73,176 — 73,176 Customer accounts 1,611,647 — 1,611,795 — 1,611,795 Repurchase agreements – non-trading 172,100 — 172,081 — 172,081 Debt securities in issue 93,917 — 93,196 706 93,902 Subordinated liabilities 24,954 — 27,151 — 27,151 1 Includes retained portfolio of French home and other loans following the sale of retail banking operations in France, with carrying amount of $ 6.9 b n (2023: $ 7.9 b n). We reclassified the portfolio to a hold-to-collect-and-sell business model from 1 January 2025 and will measure it prospectively from the first quarter of 2025 at fair value through other comprehensive income. We expect to recognise an estimated $ 1 b n fair value pre-tax loss in other comprehensive income on the remeasurement of these financial instruments. The valuation of this portfolio of loans may be substantially different in the event of a sale due to entity and deal-specific factors, including funding costs and the value of customer relationships (refer Note 23 for details). Fair values of financial instruments not carried at fair value and bases of valuation – assets and disposal groups held for sale Fair value Carrying amount Quoted market price Level 1 Observable inputs Level 2 Significant unobservable inputs Level 3 Total $m $m $m $m $m At 31 Dec 2024 Assets Loans and advances to banks 144 — 144 — 144 Loans and advances to customers 977 — 11 966 977 Reverse repurchase agreements – non-trading — — — — — Financial investments – at amortised cost — — — — — Liabilities Deposits by banks — — — — — Customer accounts 5,399 — 5,399 — 5,399 Repurchase agreements – non-trading — — — — — Debt securities in issue — — — — — Subordinated liabilities — — — — — At 31 Dec 2023 Assets Loans and advances to banks 10,487 — 10,487 — 10,487 Loans and advances to customers 73,376 — 90 72,200 72,290 Reverse repurchase agreements – non-trading 2,723 — 2,723 — 2,723 Financial investments – at amortised cost 7,624 7,530 — 5 7,535 Liabilities Deposits by banks 78 — 78 — 78 Customer accounts 85,950 — 86,475 — 86,475 Repurchase agreements – non-trading 2,768 — 2,768 — 2,768 Debt securities in issue 9,084 — 8,820 — 8,820 Subordinated liabilities 8 — 7 — 7 416 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Other financial instruments not carried at fair value are typically short term in nature and reprice to current market rates frequently. Accordingly, their carrying amount is a reasonable approximation of fair value. They include cash and balances at central banks, Hong Kong Government certificates of indebtedness and Hong Kong currency notes in circulation, all of which are measured at amortised cost. Valuation Fair value is an estimate of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This may be different from the theoretical economic value attributed from an instrument’s cash flows over its expected future life. Our valuation methodologies and assumptions in determining fair values for which no observable market prices are available may differ from those of other companies. Loans and advances to banks and customers To determine the fair value of loans and advances to banks and customers, loans are segregated into portfolios of similar characteristics. Fair values are based on observable market transactions, when available. When they are unavailable, fair values are estimated using valuation models incorporating a range of input assumptions. These assumptions may include: value estimates from third-party brokers reflecting over- the-counter trading activity; forward-looking discounted cash flow models, taking account of expected customer prepayment rates, using assumptions that HSBC believes are consistent with those that would be used by market participants in valuing such loans; recent origination pricing for similar loans; and trading inputs from other market participants including observed primary and secondary trades. From time to time, we may engage a third-party valuation specialist to measure the fair value of a pool of loans. The fair value of loans reflects expected credit losses at the balance sheet date and estimates of market participants’ expectations of credit losses over the life of the loans, and the fair value effect of repricing between origination and the balance sheet date. For credit-impaired loans, fair value is estimated by discounting the future cash flows over the time period they are expected to be recovered. Financial investments The fair values of listed financial investments are determined using bid market prices. The fair values of unlisted financial investments are determined using valuation techniques that incorporate the prices and future earnings streams of equivalent quoted securities. Deposits by banks and customer accounts The fair values of on-demand deposits are approximated by their carrying amount. For deposits with longer-term maturities, fair values are estimated using discounted cash flows, applying current rates offered for deposits of similar remaining maturities. Debt securities in issue and subordinated liabilities Fair values in debt securities in issue and subordinated liabilities are determined using quoted market prices at the balance sheet date where available, or by reference to quoted market prices for similar instruments. Repurchase and reverse repurchase agreements – non-trading Carrying amounts of repurchase and reverse repurchase agreements that are held on a non-trading basis provide approximate fair values. This is due to the fact that balances are generally short dated. HSBC Holdings The methods used by HSBC Holdings to determine fair values of financial instruments for the purposes of measurement and disclosure are described above. Fair values of HSBC Holdings’ financial instruments not carried at fair value on the balance sheet 2024 2023 Carrying amount Fair value 1 Carrying amount Fair value 1 $m $m $m $m Assets at 31 Dec Loans and advances to HSBC undertakings 37,677 38,359 27,354 27,878 Financial investments – at amortised cost 10,328 10,335 19,558 19,531 Liabilities at 31 Dec Debt securities in issue 64,320 65,123 65,239 65,172 Subordinated liabilities 23,548 25,911 24,439 26,651 1 Fair values (other than Financial investments which are Level 1) were determined using valuation techniques with observable inputs (Level 2). HSBC Holdings plc Annual Report on Form 20-F 417 14 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 2024 2023 Designated at fair value Mandatorily measured at fair value Total Designated at fair value Mandatorily measured at fair value Total $m $m $m $m $m $m Securities 2,406 104,093 106,499 2,353 101,152 103,505 –  treasury and other eligible bills 732 393 1,125 695 724 1,419 –  debt securities 1,674 59,904 61,578 1,658 60,045 61,703 –  equity securities — 43,796 43,796 — 40,383 40,383 Loans and advances to banks and customers 951 6,120 7,071 371 5,495 5,866 Other — 2,199 2,199 — 1,272 1,272 At 31 Dec 3,357 112,412 115,769 2,724 107,919 110,643 15 Derivatives Notional contract amounts and fair values of derivatives by product contract type held by HSBC Notional contract amount Fair value – Assets Fair value – Liabilities Trading Hedging Trading Hedging Total Trading Hedging Total $m $m $m $m $m $m $m $m Foreign exchange 11,706,591 82,161 142,055 2,738 144,793 133,910 75 133,985 Interest rate 17,316,173 406,109 209,794 4,790 214,584 212,980 4,930 217,910 Equities 768,732 — 17,116 — 17,116 20,643 — 20,643 Credit 143,136 — 1,756 — 1,756 1,769 — 1,769 Commodity and other 118,180 — 3,134 — 3,134 2,887 — 2,887 Gross total fair values 30,052,812 488,270 373,855 7,528 381,383 372,189 5,005 377,194 Offset (Note 31 ) ( 112,746 ) ( 112,746 ) At 31 Dec 2024 30,052,812 488,270 373,855 7,528 268,637 372,189 5,005 264,448 Foreign exchange 9,463,768 63,547 99,014 935 99,949 99,949 780 100,729 Interest rate 14,853,397 361,312 223,534 5,119 228,653 225,443 4,080 229,523 Equities 677,149 — 14,427 — 14,427 17,603 — 17,603 Credit 153,606 — 1,351 — 1,351 1,861 — 1,861 Commodity and other 90,007 — 1,820 — 1,820 1,542 — 1,542 Gross total fair values 25,237,927 424,859 340,146 6,054 346,200 346,398 4,860 351,258 Offset (Note 31 ) ( 116,486 ) ( 116,486 ) At 31 Dec 2023 25,237,927 424,859 340,146 6,054 229,714 346,398 4,860 234,772 The notional contract amounts of derivatives held for trading purposes and derivatives designated in hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk. Notional contract amounts and fair values of derivatives by product contract type held by HSBC Holdings with subsidiaries Notional contract amount Assets Liabilities Trading Hedging Trading Hedging Total Trading Hedging Total $m $m $m $m $m $m $m $m Foreign exchange 51,437 — 796 — 796 1,015 — 1,015 Interest rate 30,535 90,074 1,544 714 2,258 487 3,838 4,325 At 31 Dec 2024 81,972 90,074 2,340 714 3,054 1,502 3,838 5,340 Foreign exchange 66,711 — 486 — 486 1,705 — 1,705 Interest rate 33,480 92,268 1,730 1,128 2,858 747 3,638 4,385 At 31 Dec 2023 100,191 92,268 2,216 1,128 3,344 2,452 3,638 6,090 Use of derivatives For details regarding the use of derivatives, see page 248 under ‘Market risk’. Trading derivatives Most of HSBC’s derivative transactions relate to sales and trading activities. Sales activities include the structuring and marketing of derivative products to customers to enable them to take, transfer, modify or reduce current or expected risks. Trading activities include market-making and risk management. Market-making entails quoting bid and offer prices to other market participants for the purpose of generating revenue based on spread and volume. Risk management activity is undertaken to manage the risk arising from client transactions, with the principal purpose of retaining client margin. Other derivatives classified as held for trading include non-qualifying hedging derivatives. Substantially all of HSBC Holdings’ derivatives entered into with subsidiaries are managed in conjunction with financial liabilities. 418 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Hedge accounting derivatives HSBC applies hedge accounting to manage the following risks: interest rate and foreign exchange risks. Further details of how these risks arise and how they are managed by the Group can be found in the ‘Risk review’. Hedged risk components HSBC designates a portion of cash flows of a financial instrument or a group of financial instruments for a specific interest rate or foreign currency risk component in a fair value or cash flow hedge. The designated risks and portions are either contractually specified or otherwise separately identifiable components of the financial instrument that are reliably measurable. Risk-free or benchmark interest rates generally are regarded as being both separately identifiable and reliably measurable, except for the Interest Rate Benchmark Reform Phase 2 transition where HSBC designates alternative benchmark rates as the hedged risk which may not have been separately identifiable upon initial designation, provided HSBC reasonably expects it will meet the requirement within 24 months from the first designation date. The designated risk components account for a significant portion of the overall changes in fair value or cash flows of the hedged items. HSBC uses net investment hedges to hedge the structural foreign exchange risk related to net investments in foreign operations including subsidiaries and branches whose functional currencies are different from that of the parent. When hedging with foreign exchange forward contracts, the spot rate component of the foreign exchange risk is designated for an amount of net assets as the hedged risk. Sources of hedge ineffectiveness may arise from basis risk, including but not limited to the discount rates used for calculating the fair value of derivatives, hedges using instruments with a non-zero fair value, and notional and timing differences between the hedged items and hedging instruments. Fair value hedges HSBC enters into fixed-for-floating interest rate swaps to manage the exposure to changes in fair value caused by movements in market interest rates on certain fixed-rate financial instruments that are not measured at fair value through profit or loss, including debt securities held and issued. HSBC hedging instrument by hedged risk Hedging instrument Carrying amount Notional amount 1,2 Assets Liabilities Balance sheet presentation Change in fair value 3 Hedged risk $m $m $m $m Interest rate 4 190,332 4,180 4,411 Derivatives ( 449 ) At 31 Dec 2024 190,332 4,180 4,411 ( 449 ) Interest rate 4 172,985 3,729 2,965 Derivatives ( 1,043 ) At 31 Dec 2023 172,985 3,729 2,965 ( 1,043 ) 1 The notional contract amounts of derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk. 2 The notional amount of non-dynamic fair value hedges is equal to $ 71,916 m (2023: $ 62,480 m ), of which the weighted-average maturity date is March 2031 and the weighted-average swap rate is 3.24 % (2023: 3.04 % ). 3 Used in effectiveness testing, which uses the full fair value change of the hedging instrument not excluding any component. 4 The hedged risk ‘interest rate’ includes inflation risk. HSBC hedged item by hedged risk Hedged item Ineffectiveness Carrying amount Accumulated fair value hedge adjustments included in carrying amount 1 Change in fair value 2 Recognised in profit and loss Assets Liabilities Assets Liabilities Balance sheet presentation Profit and loss presentation Hedged risk $m $m $m $m $m $m Interest rate 3 93,055 ( 2,701 ) Financial investments - measured at fair value through other comprehensive income ( 728 ) ( 8 ) Net income from financial instruments held for trading or managed on a fair value basis 492 11 Financial investments - measured at amortised cost ( 14 ) 13,915 ( 104 ) — Loans and advances to customers 16 — — Reverse repurchase agreements – non- trading — 72,576 ( 1,800 ) Debt securities in issue 1,110 207 — Customer accounts — 1,205 ( 266 ) Subordinated liabilities 57 At 31 Dec 2024 107,462 73,988 ( 2,794 ) ( 2,066 ) 441 ( 8 ) HSBC Holdings plc Annual Report on Form 20-F 419 HSBC hedged item by hedged risk (continued) Hedged item Ineffectiveness Carrying amount Accumulated fair value hedge adjustments included in carrying amount 1 Change in fair value 2 Recognised in profit and loss Assets Liabilities Assets Liabilities Balance sheet presentation Profit and loss presentation Hedged risk $m $m $m $m $m $m Interest rate 3 82,321 ( 2,282 ) Financial investments - measured at fair value through other comprehensive income 2,053 5 Net income from financial instruments held for trading or managed on a fair value basis 514 32 Financial investments - measured at amortised cost 32 4,701 ( 18 ) Loans and advances to customers 122 — — Reverse repurchase agreements – non-trading 15 64,269 ( 2,147 ) Debt securities in issue ( 1,179 ) — — Deposits by banks — — — Subordinated liabilities 5 At 31 Dec 2023 87,536 64,269 ( 2,268 ) ( 2,147 ) 1,048 5 1 The accumulated amount of fair value hedge adjustments remaining in the statement of financial position for hedged items that have ceased to be adjusted for hedging gains and losses were liabilities of $ 311 m (2023: $ 136 m ) for FVOCI assets and liabilities of $ 745 m (2023: $ 1,256 m ) for debt issued. 2 Used in effectiveness testing, which comprise an amount attributable to the designated hedged risk that can be a risk component. 3 The hedged risk ‘interest rate’ includes inflation risk. HSBC Holdings hedging instrument by hedged risk Hedging instrument Carrying amount Notional amount 1,2 Assets Liabilities Balance sheet presentation Change in fair value 3 Hedged risk $m $m $m $m Interest rate 4 90,074 714 3,838 Derivatives ( 1,103 ) At 31 Dec 2024 90,074 714 3,838 ( 1,103 ) Interest rate 4 92,268 1,128 3,638 Derivatives 1,426 At 31 Dec 2023 92,268 1,128 3,638 1,426 1 The notional contract amounts of derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk. 2 The notional amount of non-dynamic fair value hedges is equal to $ 90,074 m (2023: $ 92,268 m ), of which the weighted-average maturity date is May 2030 and the weighted-average swap rate is 2.78 % (2023: 2.46 % ). The majority of these hedges are internal to the Group. 3 Used in effectiveness testing, comprising the full fair value change of the hedging instrument not excluding any component. 4 The hedged risk ‘interest rate’ includes foreign exchange risk. HSBC Holdings hedged item by hedged risk Hedged item Ineffectiveness Carrying amount Accumulated fair value hedge adjustments included in carrying amount 1 Change in fair value 2 Recognised in profit and loss Assets Liabilities Assets Liabilities Balance sheet presentation Profit and loss presentation Hedged risk $m $m $m $m $m $m Interest rate 3 78,402 ( 2,423 ) Debt securities in issue 861 ( 9 ) Net income from financial instruments held for trading or managed on a fair value basis 7,769 ( 244 ) Loans and advances to banks 233 At 31 Dec 2024 7,769 78,402 ( 244 ) ( 2,423 ) 1,094 ( 9 ) Interest rate 3 80,889 ( 2,971 ) Debt securities in issue ( 1,716 ) 29 Net income from financial instruments held for trading or managed on a fair value basis 7,772 ( 490 ) Loans and advances to banks 319 At 31 Dec 2023 7,772 80,889 ( 490 ) ( 2,971 ) ( 1,397 ) 29 1 The accumulated amount of fair value hedge adjustments remaining in the statement of financial position for hedged items that have ceased to be adjusted for hedging gains and losses were liabilities of $ 1,216 m (2023: $ 1,299 m ) for debt issued. 2 Used in effectiveness testing, comprising amount attributable to the designated hedged risk that can be a risk component. 3 The hedged risk ‘interest rate’ includes foreign exchange risk. For some debt securities held, HSBC manages interest rate risk in a dynamic risk management strategy. The assets in scope of this strategy are high-quality fixed-rate debt securities, which may be sold to meet liquidity and funding requirements. The interest rate risk of the HSBC fixed-rate debt securities issued is managed in a non-dynamic risk management strategy. 420 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Cash flow hedges HSBC’s cash flow hedging instruments consist principally of interest rate swaps and cross-currency swaps that are used to manage the variability in future interest cash flows of non-trading financial assets and liabilities, arising due to changes in market interest rates and foreign- currency basis. HSBC applies macro cash flow hedging for interest rate risk exposures on portfolios of replenishing current and forecasted issuances of non- trading assets and liabilities that bear interest at variable rates, including rolling such instruments. The amounts and timing of future cash flows, representing both principal and interest flows, are projected for each portfolio of financial assets and liabilities on the basis of their contractual terms and other relevant factors, including estimates of prepayments and defaults. The aggregate cash flows representing both principal balances and interest cash flows across all portfolios are used to determine the effectiveness and ineffectiveness. Macro cash flow hedges are considered to be dynamic hedges. HSBC also hedges the variability in future cash flows on foreign-denominated financial assets and liabilities arising due to changes in foreign exchange market rates with cross-currency swaps, which are considered dynamic hedges. Hedging instrument by hedged risk Hedging instrument Hedged item Ineffectiveness Carrying amount Change in fair value 2 Change in fair value 3 Recognised in profit and loss Profit and loss presentation Notional amount 1 Assets Liabilities Balance sheet presentation Hedged risk $m $m $m $m $m $m Foreign currency 47,194 2,088 68 Derivatives 2,451 2,451 — Net income from financial instruments held for trading or managed on a fair value basis Interest rate 215,777 619 519 Derivatives ( 2,954 ) ( 2,964 ) 10 At 31 Dec 2024 262,971 2,707 587 ( 503 ) ( 513 ) 10 Foreign currency 29,772 935 257 Derivatives 977 977 — Net income from financial instruments held for trading or managed on a fair value basis Interest rate 188,327 1,390 1,116 Derivatives 1,542 1,512 30 At 31 Dec 2023 218,099 2,325 1,373 2,519 2,489 30 1 The notional contract amounts of derivatives designated in qualifying hedge accounting relationships indicate the nominal value of transactions outstanding at the balance sheet date. They do not represent amounts at risk. 2 Used in effectiveness testing, comprising the full fair value change of the hedging instrument not excluding any component. 3 Used in effectiveness assessment, comprising amount attributable to the designated hedged risk that can be a risk component. Reconciliation of equity and analysis of other comprehensive income by risk type Interest rate Foreign currency $m $m Cash flow hedging reserve at 1 Jan 2024 ( 901 ) ( 132 ) Fair value gains/(losses) ( 2,964 ) 2,451 Fair value (gains)/losses reclassified from the cash flow hedge reserve to the income statement in respect of: Hedged items that have affected profit or loss 1 2,529 ( 2,430 ) Income taxes 81 1 Others 199 87 Cash flow hedging reserve at 31 Dec 2024 ( 1,056 ) ( 23 ) Cash flow hedging reserve at 1 Jan 2023 ( 3,387 ) ( 421 ) Fair value gains/(losses) 1,512 977 Fair value (gains)/losses reclassified from the cash flow hedge reserve to the income statement in respect of: Hedged items that have affected profit or loss 1 2,196 ( 718 ) Income taxes ( 937 ) ( 29 ) Others ( 285 ) 59 Cash flow hedging reserve at 31 Dec 2023 ( 901 ) ( 132 ) 1 Hedged items that have affected profit or loss are primarily recorded within interest income. HSBC Holdings plc Annual Report on Form 20-F 421 Net investment hedges The Group applies hedge accounting in respect of certain net investments in non-US dollar functional currency foreign operations for changes in spot exchange rates only. Hedging could be undertaken for Group structural exposure to changes in the US dollar to foreign currency exchange rates using forward foreign exchange contracts or by financing with foreign currency borrowings. An economic relationship exists between the hedged net investment and hedging instrument due to the shared foreign currency risk exposure. For further details of our structural foreign exchange exposures, see page 212 . The aggregate positions at the reporting date and the performance indicators of both live and de-designated hedges are summarised below. Hedges of net investment in foreign operations Carrying amount Nominal amount Amounts recognised in OCI 1 Change in fair value 2 Hedge ineffectiveness recognised in income statement Derivative assets Derivative liabilities Description of hedged risk $m $m $m $m $m $m 2024 Pound sterling-denominated structural foreign exchange 397 ( 1 ) 15,407 833 229 — Swiss franc-denominated structural foreign exchange 10 — 556 89 40 — Hong Kong dollar-denominated structural foreign exchange 1 ( 3 ) 5,844 ( 27 ) ( 26 ) — Other structural foreign exchange 3 242 ( 3 ) 13,160 907 499 — Total 650 ( 7 ) 34,967 1,803 742 — 2023 Pound sterling-denominated structural foreign exchange ( 404 ) 16,415 604 ( 843 ) — Swiss franc-denominated structural foreign exchange ( 23 ) 526 49 ( 62 ) — Hong Kong dollar-denominated structural foreign exchange — 5,792 — 2 — Other structural foreign exchange 3 ( 96 ) 11,042 477 102 — Total — ( 523 ) 33,775 1,130 ( 801 ) — 1 Amount recognised in OCI for Swiss franc includes $ 110 m (2023: $ 110 m ) related to de-designated hedge. 2 Used in effectiveness assessment, comprising amount attributable to the designated hedged risk that can be a risk component. 3 Other currencies include Euro, New Taiwan dollar, Singapore dollar, Canadian dollar, Omani rial, South Korean won, UAE dirham, Indian rupee, Chinese renminbi, Kuwaiti dinar, Qatari riyal, Saudi riyal, Indonesian rupiah, Thai baht and Philippine peso. 16 Financial investments Carrying amount of financial investments 2024 2023 $m $m Financial investments measured at fair value through other comprehensive income 339,193 294,437 –  treasury and other eligible bills 112,705 102,438 –  debt securities 224,496 190,119 –  equity securities 1,569 1,447 –  other instruments 423 433 Debt instruments measured at amortised cost 153,973 148,326 –  treasury and other eligible bills 22,148 30,733 –  debt securities 131,825 117,593 At 31 Dec 493,166 442,763 Equity instruments measured at fair value through other comprehensive income Fair value Dividends recognised Type of equity instruments $m $m Investments required by central institutions 620 29 Business facilitation 886 29 Others 63 2 At 31 Dec 2024 1,569 60 Investments required by central institutions 609 27 Business facilitation 793 35 Others 45 2 At 31 Dec 2023 1,447 64 422 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Weighted average yields of investment debt securities Up to 1 year 1 to 5 years 5 to 10 years Over 10 years Yield Yield Yield Yield % % % % Debt securities measured at fair value through other comprehensive income US Treasury 2.9 3.4 2.5 2.3 US Government agencies 0.8 — 3.1 3.1 US Government-sponsored agencies 1.7 3.5 1.6 1.8 UK Government 3.8 3.8 2.3 2.4 Hong Kong Government — 1.9 2.0 — Other governments 2.7 4.1 3.7 2.3 Asset-backed securities 3.4 3.0 5.4 4.3 Corporate debt and other securities 2.7 3.5 3.2 1.9 Debt securities measured at amortised cost US Treasury 3.5 3.8 3.8 2.1 US Government agencies 0.7 0.7 1.1 4.6 US Government-sponsored agencies — 2.8 3.7 2.9 UK Government 3.5 2.9 2.8 — Hong Kong Government — 2.7 — — Other governments 2.8 4.1 5.2 — Asset-backed securities — — 7.7 — Corporate debt and other securities 2.7 2.9 3.2 4.8 The maturity distributions of ABSs are presented in the above table on the basis of contractual maturity dates. The weighted average yield for each range of maturities is calculated by dividing the annualised interest income for the year ended 31 December 2024 by the book amount of debt securities at that date. The yields do not include the effect of related derivatives. HSBC Holdings HSBC Holdings carrying amount of financial investments 2024 2023 $m $m Debt instruments measured at amortised cost –  treasury and other eligible bills 9,556 15,629 –  debt securities 772 3,929 At 31 Dec 10,328 19,558 Weighted average yields of investment debt securities Up to 1 year 1 to 5 years 5 to 10 years Over 10 years Yield Yield Yield Yield % % % % Debt securities measured at amortised cost US Treasury 4.3 — — — The weighted average yield for each range of maturities is calculated by dividing the annualised interest income for the year ended 31 December 2024 by the book amount of debt securities at that date. The yields do not include the effect of related derivatives. 17 Assets pledged, collateral received and assets transferred Assets pledged 1 Financial assets pledged as collateral 2024 2023 $m $m Treasury bills and other eligible securities 17,713 20,504 Loans and advances to banks 14,880 13,636 Loans and advances to customers 24,524 27,490 Debt securities 91,975 88,367 Equity securities 51,642 40,280 Other 63,386 61,223 Assets pledged at 31 Dec 264,120 251,500 HSBC Holdings plc Annual Report on Form 20-F 423 The value of assets pledged to secure liabilities may be greater than the book value of assets utilised as collateral. For example, in the case of securitisations and covered bonds, the amount of liabilities issued plus mandatory over-collateralisation is less than the book value of the pool of assets available for use as collateral. This is also the case where assets are placed with a custodian or a settlement agent that has a floating charge over all the assets placed to secure any liabilities under settlement accounts. These transactions are conducted under terms that are usual and customary for collateralised transactions including, where relevant, standard securities lending and borrowing, repurchase agreements and derivative margining. HSBC places both cash and non-cash collateral in relation to derivative transactions. Hong Kong currency notes in circulation are secured by the deposit of funds in respect of which the Hong Kong Government certificates of indebtedness are held. Financial assets pledged as collateral which the counterparty has the right to sell or repledge 2024 2023 $m $m Trading assets 84,863 77,847 Financial investments 47,248 39,324 At 31 Dec 132,111 117,171 Collateral received 1 The fair value of assets accepted as collateral relating primarily to standard securities lending, reverse repurchase agreements, swaps of securities and derivative margining that HSBC is permitted to sell or repledge in the absence of default was $ 515,267 m ( 2023 : $ 495,653 m). The fair value of any such collateral sold or repledged was $ 293,460 m ( 2023 : $ 284,108 m). HSBC is obliged to return equivalent securities. These transactions are conducted under terms that are usual and customary to standard securities lending, reverse repurchase agreements and derivative margining. Assets transferred 1 The assets pledged include transfers to third parties that do not qualify for derecognition, including secured borrowings such as debt securities held by counterparties as collateral under repurchase agreements and equity securities lent under securities lending agreements, as well as swaps of equity and debt securities. For secured borrowings, the transferred asset collateral continues to be recognised in full while a related liability, reflecting the Group’s obligation to repurchase the assets for a fixed price at a future date, is also recognised on the balance sheet. Where securities are swapped, the transferred asset continues to be recognised in full. There is no associated liability as the non-cash collateral received is not recognised on the balance sheet. The Group is unable to use, sell or pledge the transferred assets for the duration of the transaction, and remains exposed to interest rate risk and credit risk on these pledged assets. Transferred financial assets not qualifying for full derecognition and associated financial liabilities Carrying amount of: Transferred assets Associated liabilities $m $m At 31 Dec 2024 Repurchase agreements 83,585 75,625 Securities lending agreements 58,232 4,361 At 31 Dec 2023 Repurchase agreements 81,486 74,517 Securities lending agreements 46,663 3,826 1 Excludes assets classified as held for sale . 18 Interests in associates and joint ventures Carrying amount of HSBC’s interests in associates and joint ventures 2024 2023 $m $m Interests in associates 28,777 27,200 Interests in joint ventures 132 144 Interests in associates and joint ventures 28,909 27,344 Principal associates of HSBC 2024 2023 Carrying amount Fair value 1 Carrying amount Fair value 1 $m $m $m $m Bank of Communications Co., Limited 22,367 11,631 21,210 8,812 Saudi Awwal Bank 5,027 5,705 4,659 6,438 1 Principal associates are listed on recognised stock exchanges. The fair values are based on the quoted market prices of the shares held (Level 1 in the fair value hierarchy). 424 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Principal associates of HSBC (continued) At 31 Dec 2024 Jurisdiction of incorporation and principal place of business Principal activity HSBC’s interest 1 % Bank of Communications Co., Limited Mainland China Banking services 19.03 Saudi Awwal Bank Saudi Arabia Banking services 31.00 1 There has been no percentage change in HSBC’s shareholding interest in the principal associates when compared with 2023. Share of profit in associates and joint ventures 2024 2023 $m $m Bank of Communications Co., Limited 2,241 2,250 Saudi Awwal Bank 596 538 Other associates and joint ventures 75 19 Share of profit in associates and joint ventures 2,912 2,807 Less: Impairment of interest in BoCom — ( 3,000 ) A list of all associates and joint ventures is set out in Note 38 . Bank of Communications Co., Limited The Group maintains a 19.03 % interest in Bank of Communications Co., Limited (‘BoCom’). The Group’s investment in BoCom is classified as an associate. Significant influence in BoCom was established with consideration of all relevant factors, including representation on BoCom’s Board of Directors and participation in a resource and experience sharing agreement (‘RES’). Under the RES, HSBC staff have been seconded to assist in the maintenance of BoCom’s financial and operating policies. Investments in associates are recognised using the equity method of accounting in accordance with IAS 28 ‘Investments in Associates and Joint Ventures’, whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group’s share of associate’s net assets. An impairment test is required if there is any indication of impairment or reversal. At 31 December 2023, the Group performed an impairment test on the carrying amount, which resulted in an impairment of $ 3.0 b n, as the recoverable amount as determined by a value in use (‘VIU’) calculation was lower than the carrying amount. No further impairment was required for the year ended 31 December 2024. If the Group did not have significant influence in BoCom, the investment would be carried at fair value rather than the current carrying amount. On 24 September 2024, the People’s Bank of China, National Financial Regulatory Administration and China Securities Regulatory Commission announced several policies aimed at promoting growth and economic development. These included monetary stimulus, property market support and capital market strengthening measures, as well as measures to recapitalise the largest commercial banks. In the absence of further details on how the recapitalisation of the largest commercial banks may be enacted, there is no change to the impairment test result at 31 December 2024. As further details become available, the impairment test will be updated to reflect their impact and may result in a change to the carrying value of our investment in BoCom. These developments have the potential to impact on the Group‘s reported earnings, but are unlikely to have an impact on HSBC's capital or capital ratios. We remain supportive of our relationship with BoCom and will consider any broader implications on the carrying value of our investment as further details become available. Impairment testing At 31 December 2024, the carrying amount of the investment was $ 22.4 b n (2023: $ 21.2 b n) with fair value of $ 11.6 b n (2023: $ 8.8 b n). The Group has concluded there is no indication of further impairment (or indication that an impairment may no longer exist or may have decreased) since 31 December 2023. As part of this assessment, the Group updated the VIU calculation which supported that there was no significant change to the 31 December 2023 impairment position. As a result, no additional impairment to the carrying amount (or reversal of impairment) was made at 31 December 2024. Basis of recoverable amount The VIU calculation uses discounted cash flow projections based on management’s best estimates of future earnings available to ordinary shareholders prepared in accordance with IAS 36 ’Impairment of Assets’. Those cash flows used estimates based on BoCom’s current condition and so do not include estimated cash flows arising from uncommitted future actions that may affect the performance of the investment which will be considered at the relevant time should they arise. Significant management judgement is required in arriving at the best estimate. The VIU may increase or decrease depending on the effect of changes to model inputs. The main model inputs are described below and are based on factors observed at period-end. The factors that could result in increases or reductions in the VIU include changes in BoCom’s short- term performance, a change in regulatory capital requirements or revisions to the forecast of BoCom’s future profitability. There are two main components to the VIU calculation. The first component is management’s best estimate of BoCom’s earnings. Forecast earnings growth over the short to medium term continues to be lower than recent (within the last five years ) actual growth, and reflects the impact of recent macroeconomic, policy and industry factors in mainland China. As a result of management‘s intent to continue to retain its investment for the long term, earnings beyond the short to medium term are extrapolated into perpetuity using a long-term growth rate to derive a terminal value, which comprises the majority of the VIU. The second component is the capital maintenance charge (‘CMC’), which is management’s forecast of the earnings that need to be withheld in order for BoCom to meet capital requirements over the forecast period, meaning that CMC is deducted when arriving at management’s estimate of future earnings available to ordinary shareholders. The CMC reflects the revised capital requirements arising from revisions of the ratio of risk-weighted assets to total assets assumption. The principal inputs to the CMC calculation include estimates of asset growth, the ratio of risk-weighted assets to total assets and the expected capital requirements. An increase in the CMC as a result of a change to these principal inputs would reduce VIU. Additionally, management considers other qualitative factors, to ensure that the inputs to the VIU calculation remain appropriate. HSBC Holdings plc Annual Report on Form 20-F 425 Key assumptions in value in use calculation We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36: – Long-term profit growth rate: 3.00 % (2023: 3.00 % ) for periods after 2028, which does not exceed forecast GDP growth in mainland China and is similar to forecasts by external analysts. – Long-term asset growth rate: 3.25 % (2023: 3.00 % ) for periods after 2028, which is the rate that assets are expected to grow to achieve long-term profit growth of 3.00 % . The increase of long-term asset growth rate was supported by historical data, which is expected to continue. – Discount rate: 8.53 % (2023: 9.00 % ), which is based on a capital asset pricing model (‘CAPM’), using market data. The discount rate used is within the range of 7.1 % to 8.8 % (2023: 7.9 % to 9.7 % ) indicated by the CAPM, and decreased as a consequence of a market-driven reduction in the risk-free rate. – Expected credit losses (‘ECL’) as a percentage of loans and advances to customers: ranges from 0.74 % to 0.93 % (2023: 0.80 % to 0.97 % ) in the short to medium term, reflecting reported credit experience in mainland China. For periods after 2028, the ratio is 0.97 % (2023: 0.97 % ), which is higher than BoCom’s average ECL as a percentage of loans and advances to customers in recent years prior to the Covid-19 pandemic. – Risk-weighted assets as a percentage of total assets: ranges from 62.0 % to 62.5 % (2023: 62.0 % to 63.7 % ) in the short to medium term, reflecting higher risk-weights in the short term followed by an expected reversion to recent historical levels. For periods after 2028, the ratio is 62.0 % (2023: 62.0 % ), which continues to be similar to BoCom’s actual results in recent years. – Loans and advances to customers growth rate: ranges from 7.5 % to 9.5 % (2023: 9.0 % to 10.0 % ) in the short to medium term, which is similar to BoCom’s actual results in recent years. Changes in the forecast growth rate of loans and advances to customers are likewise reflected in the forecast ECL. – Operating income growth rate: ranges from 0.1 % to 9.9 % (2023: - 0.4 % to 9.7 % ) in the short to medium term, which is similar to BoCom’s actual results in recent years, and is impacted by projections of net interest income in the short term as a consequence of recent macroeconomic, policy and industry factors in mainland China. – Cost-income ratio: ranges from 34.6 % to 39.8 % (2023: 35.5 % to 39.8 % ) in the short to medium term. These ratios are similar to BoCom’s actual results in recent years. – Long-term effective tax rate: 15.0 % (2023: 15.0 % ) for periods after 2028, which is higher than the recent historical average, and aligned to the minimum tax rate as proposed by the OECD/Group of 20 (‘G20’) Inclusive Framework on Base Erosion and Profit Shifting. – Capital requirements: capital adequacy ratio of 12.5 % (2023: 12.5 % ) and tier 1 capital adequacy ratio of 9.5 % (2023: 9.5 % ), based on BoCom’s capital risk appetite and capital requirements respectively. The changes in VIU would impact the carrying amount if there is an indication of further impairment (or indication that an impairment may no longer exist or may have decreased, to the extent of impairment loss previously recognised). The following table illustrates the impact on the carrying amount of reasonably possible changes to key assumptions used in the VIU calculation. This reflects the sensitivity of each key assumption on its own and it is possible that more than one favourable and/or unfavourable change may occur at the same time. The selected rates of reasonably possible changes to key assumptions are based on external analysts’ forecasts, statutory requirements and other relevant external data sources, which can change period to period. Unless specified, favourable and unfavourable changes are consistently applied throughout short-to-medium and long-term forecast years, based on a straight-line average of the base case assumption . Sensitivity of the carrying amount to the key VIU assumptions Favourable change Unfavourable change Reversal of impairment / VIU headroom Impairment bps $bn bps $bn At 31 Dec 2024 Long-term profit growth rate 55 4.0 ( 96 ) ( 5.4 ) Long-term asset growth rate ( 121 ) 8.6 30 ( 2.8 ) Discount rate ( 143 ) 5.4 287 ( 6.4 ) Expected credit losses as a percentage of loans and advances to customers 2024 to 2028 : 66 2029 onwards: 91 4.0 2024 to 2028 : 108 2029 onwards: 104 ( 4.3 ) Risk-weighted assets as a percentage of total assets ( 132 ) 0.8 234 ( 1.7 ) Loans and advances to customers growth rate ( 217 ) 3.4 340 ( 6.1 ) Operating income growth rate 76 2.7 ( 81 ) ( 3.3 ) Cost-income ratio ( 190 ) 0.2 380 ( 7.1 ) Long-term effective tax rate ( 426 ) 1.6 1,000 ( 4.0 ) Capital requirements – capital adequacy ratio — — 372 ( 14.3 ) Capital requirements – tier 1 capital adequacy ratio — — 270 ( 6.7 ) At 31 Dec 2023 Long-term profit growth rate 58 3.3 ( 79 ) ( 3.4 ) Long-term asset growth rate ( 79 ) 4.5 58 ( 4.0 ) Discount rate ( 110 ) 4.5 280 ( 6.1 ) Expected credit losses as a percentage of loans and advances to customers 2023 to 2027 : 78 2028 onwards: 91 2.9 2023 to 2027 : 120 2028 onwards: 104 ( 4.4 ) Risk-weighted assets as a percentage of total assets ( 150 ) 0.9 216 ( 1.6 ) Loans and advances to customers growth rate ( 213 ) 3.2 207 ( 2.9 ) Operating income growth rate 57 2.6 ( 81 ) ( 2.6 ) Cost-income ratio ( 212 ) 0.8 99 ( 2.9 ) Long-term effective tax rate ( 426 ) 1.6 1,000 ( 3.5 ) Capital requirements – capital adequacy ratio — — 215 ( 7.5 ) Capital requirements – tier 1 capital adequacy ratio — — 248 ( 3.7 ) 426 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Considering the interrelationship of the changes set out in the table above, management estimates that the reasonably possible range of VIU is $ 13.5 b n to $ 30.8 b n (2023: $ 13.1 bn to $ 28.8 bn ), acknowledging that the fair value of the Group’s investment has ranged from $ 6.8 b n to $ 11.6 b n over the last five years as at the date of the impairment tests. The possible range of VIU is based on impacts set out in the table above arising from the favourable/unfavourable change in the earnings in the short to medium term, the expected credit losses as a percentage of loans and advances to customers, and a 50 bps increase/decrease in the discount rate. All other long-term assumptions, and the basis of the CMC have been kept unchanged when determining the reasonably possible range of the VIU. Selected financial information of BoCom The statutory accounting reference date of BoCom is 31 December. For the year ended 31 December 2024, HSBC included the associate’s results on the basis of the financial statements for the 12 months ended 30 September 2024, taking into account any known changes in the subsequent period from 1 October 2024 to 31 December 2024 that would have materially affected the results. Selected balance sheet information of BoCom At 30 Sep At 30 Sep 2024 2023 $m $m Cash and balances at central banks 99,663 112,800 Due from and placements with banks and other financial institutions 122,607 100,464 Loans and advances to customers 1,128,603 1,087,613 Other financial assets 587,721 587,949 Other assets 61,086 59,215 Total assets 1,999,680 1,948,041 Due to and placements from banks and other financial institutions 326,742 292,065 Deposits from customers 1,195,590 1,216,611 Other financial liabilities 282,894 251,246 Other liabilities 38,082 36,766 Total liabilities 1,843,308 1,796,698 Total equity 156,372 151,343 Reconciliation of BoCom’s total shareholders’ equity to the carrying amount in HSBC’s consolidated financial statements At 30 Sep 2024 2023 $m $m Equity attributable to shareholders 154,748 149,713 Other equity instruments ( 23,946 ) ( 24,616 ) Equity attributable to shareholders less other equity instruments 130,802 125,097 The Group's share of equity 1 25,284 24,210 Impairment 2 ( 2,917 ) ( 3,000 ) Carrying amount 22,367 21,210 1 This balance includes goodwill originally arising on acquisition. 2 This balance includes the impact of foreign exchange movements on the $ 3 b n impairment booked in the financial year ended 31 December 2023. Selected income statement information of BoCom For the 12 months ended 30 Sep 2024 2023 $m $m Net interest income 23,180 23,432 Net fee and commission income 5,315 6,221 Credit and impairment losses ( 7,410 ) ( 8,099 ) Depreciation and amortisation ( 2,589 ) ( 2,560 ) Tax expense ( 835 ) ( 1,007 ) Profit for the year 12,922 13,211 Other comprehensive income 1,361 686 Total comprehensive income 14,283 13,897 Dividends received from BoCom 745 736 Saudi Awwal Bank The Group’s investment in S audi Awwal Bank (‘SAB’) is classified as an associate. HSBC is the largest shareholder in SAB with a shareholding of 31 % . Significant influence in SAB is established via representation on the Board of Directors. Investments in associates are recognised using the equity method of accounting in accordance with IAS 28, as described previously for BoCom. Impairment testing There were no indicators of impairment at 31 December 2024. The fair value of the Group’s investment in SAB of $ 5.7 bn was above the carrying amount of $ 5.0 bn. HSBC Holdings plc Annual Report on Form 20-F 427 19 Investments in subsidiaries Main subsidiaries of HSBC Holdings 1 At 31 Dec 2024 Place of incorporation or registration HSBC’s interest % Share class Europe HSBC Bank plc England and Wales 100 £ 1 Ordinary, $ 0.01 Non-Cumulative Third Dollar Preference HSBC UK Bank plc England and Wales 100 £ 1 Ordinary HSBC Continental Europe France 99.99 € 5 Actions Asia Hang Seng Bank Limited 2,3 Hong Kong 63.12 HK$ 5 Ordinary HSBC Bank (China) Company Limited People’s Republic of China 100 CNY 1 Ordinary HSBC Bank Malaysia Berhad Malaysia 100 Ordinary no par value HSBC Life (International) Limited Bermuda 100 HK$ 1 Ordinary The Hongkong and Shanghai Banking Corporation Limited Hong Kong 100 Ordinary no par value Middle East, North Africa and Türkiye HSBC Bank Middle East Limited United Arab Emirates 100 $ 1 Ordinary and $ 1 Preference shares North America HSBC Bank USA, N.A. US 100 $ 100 Common and $ 0.01 Preference Latin America HSBC Mexico, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC Mexico 99.99 MXN 2 Ordinary 1 Main subsidiaries are either held directly or indirectly via intermediate holding companies. During 2024, we completed the sale of HSBC Bank Canada to the Royal Bank of Canada, therefore it is no longer an indirect subsidiary of HSBC Holdings. There has been no material percentage change in HSBC’s shareholding for its existing main subsidiaries since 2023. 2 In addition to the strategic holding disclosed above, the Group held 0.06 % (2023: 0.09 % ) shareholding as part of its trading books. 3 Based on the latest corporate substantial shareholding notice filed with Hong Kong Exchange and Clearing Limited on 21 June 2024, the Group’s shareholding in Hang Seng Bank Limited on 18 June 2024 was 63.04 % . Movements in our shareholding since 18 June 2024 are reflected in the above table. Details of the debt, subordinated debt and preference shares issued by the main subsidiaries to parties external to the Group are included in Note 26 ‘Debt securities in issue’ and Note 29 ‘Subordinated liabilities’, respectively. A list of all related undertakings is set out in Note 38 . The principal countries and territories of operation are the same as the countries and territories of incorporation except for HSBC Life (International) Limited, which operates mainly in Hong Kong. HSBC is structured as a network of regional banks and locally incorporated regulated banking entities. Each bank is separately capitalised in accordance with applicable prudential requirements and maintains a capital buffer consistent with the Group’s risk appetite for the relevant country or region. HSBC’s capital management process is incorporated in the financial resource plan, which is approved by the Board. HSBC Holdings is the primary provider of equity capital to its subsidiaries and also provides them with non-equity capital where necessary. These investments are substantially funded by HSBC Holdings’ issuance of equity and non-equity capital, and by profit retention. As part of its capital management process, HSBC Holdings seeks to maintain a balance between the composition of its capital and its investment in subsidiaries. Subject to this, there is no current or foreseen impediment to HSBC Holdings’ ability to provide funding for such investments. During 2024, consistent with the Group’s capital plan, the Group’s material subsidiaries did not experience any significant restrictions on paying dividends or repaying loans and advances. Also, there are no foreseen restrictions envisaged with regard to planned dividends or payments from material subsidiaries. However, the ability of subsidiaries to pay dividends or advance monies to HSBC Holdings depends on, among other things, their respective local regulatory capital and banking requirements, exchange controls, statutory reserves, and financial and operating performance. The amount of guarantees by HSBC Holdings in favour of other Group entities is set out in Note 33 . Information on structured entities consolidated by HSBC where HSBC owns less than 50% of the voting rights is included in Note 20 ‘Structured entities’. In each of these cases, HSBC controls and consolidates an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Impairment testing of investments in subsidiaries At each reporting period end, HSBC Holdings reviews investments in subsidiaries for indicators of impairment. An impairment is recognised when the carrying amount exceeds the recoverable amount for that investment. The recoverable amount is the higher of the investment’s fair value less costs of disposal and its VIU, in accordance with the requirements of IAS 36. The VIU is calculated by discounting management’s cash flow projections for the investment. The cash flows represent the free cash flows based on the subsidiary’s binding capital requirements. We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36: – Management’s judgement in estimating future cash flows: The cash flow projections for each investment are based on the latest approved plans, which include forecast capital available for distribution based on the capital requirements of the subsidiary, taking into account minimum and core capital requirements and factoring in reasonably possible uncertainties. For the impairment test as at 31 December 2024, cash flow projections until the end of 2029 were considered in line with our internal planning horizon. Our cash flow projections include known and observable climate-related opportunities and costs associated with our sustainable products and operating model. – Long-term growth rates: The long-term growth rate is used to extrapolate the free cash flows in perpetuity because of the long-term perspective of the legal entity. The growth rate reflects long-term inflation for the country or territory within which the investment operates. 428 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements – Discount rates: The rate used to discount the cash flows is based on the cost of capital assigned to each investment, which is derived using a CAPM and market implied cost of equity. CAPM depends on a number of inputs reflecting financial and economic variables, including the risk-free rate and a premium to reflect the inherent risk of the business being evaluated. These variables are based on the market’s assessment of the economic variables and management’s judgement. The discount rates for each investment are refined to reflect the rates of inflation for the countries or territories within which the investment operates. In addition, for the purposes of testing investments for impairment, management supplements this process by comparing the discount rates derived using the internally generated CAPM, with cost of capital rates produced by external sources for businesses operating in similar markets. The impacts from climate risk are included to the extent that they are observable in discount rates and asset prices. As at 31 December 2024, the carrying amount of HSBC Holdings’ investments in subsidiaries was $ 152.3 bn (2023: $ 159.5 bn). The year-on-year reduction was predominantly due to the recognition of an $ 11.4 bn impairment of HSBC Holdings’ investment in HSBC Overseas Holdings (UK) Limited. The recoverable amount of HSBC Overseas Holdings (UK) Limited is assessed as the aggregate of the recoverable amounts of its subsidiaries. During the year HSBC Overseas Holdings (UK) Limited sold its stake in its direct subsidiary HSBC Bank Canada to Royal Bank of Canada, and transferred HSBC Private Bank (Suisse) SA, its indirect subsidiary (via HSBC Private Banking Holdings (Suisse) SA), to HSBC Bank plc. Following these disposals HSBC Overseas Holdings (UK) Limited paid $ 12.1 b n in dividend income to HSBC Holdings, which mainly drove the recognition of an $ 11.4 bn impairment in its investment in HSBC Overseas Holdings (UK) Limited, offset by a higher recoverable amount of HSBC Overseas Holdings (UK) Limited’s principal remaining subsidiary as at 31 December 2024, HSBC North America Holdings Inc, driven by higher projected profits and lower projected capital requirements. As at 31 December 2024, HSBC Holdings had recognised for HSBC Overseas Holdings (UK) Limited a cumulative impairment of $ 21.6 b n (2023: $ 10.2 b n), and a carrying amount of $ 14.0 b n (2023: $ 25.8 b n). Impairment test results Investments Recoverable amount Discount rate Long-term growth rate $m % % HSBC North America Holdings Inc. At 31 Dec 2024 13,264 11.00 2.25 At 31 Dec 2023 12,756 10.50 2.17 Sensitivities of key assumptions in calculating VIU At 31 December 2024, the recoverable amount of HSBC Overseas Holdings (UK) Limited remained sensitive to reasonably possible changes in key assumptions impacting its principal subsidiary, HSBC North America Holdings Inc. In making an estimate of reasonably possible changes to assumptions, management considers the available evidence in respect of each input to the model. These include the external range of observable discount rates, historical performance against forecast, and risks attached to the key assumptions underlying cash flow. The following table presents a summary of the key assumptions underlying the most sensitive inputs to the model for HSBC North America Holdings Inc., the key risks attached to each, and details of a reasonably possible change to assumptions where, in the opinion of management, these could result in a change in VIU. Reasonably possible changes in key assumptions Input Key assumptions Associated risks Reasonably possible change Investment HSBC North America Holdings Inc. (subsidiary of HSBC Overseas Holdings (UK) Limited) Free cash flows projections – Level of interest rates and yield curves. – Competitors’ positions within the market. – Strategic actions relating to revenue and costs are not achieved. – Free cash flow projections decrease by 10%. Discount rate – Discount rate used is a reasonable estimate of a suitable market rate for the profile of the business. – External evidence arises to suggest that the rate used is not appropriate to the business. – Discount rate decreases by 1%. – Discount rate increases by 1%. Sensitivity of VIU to reasonably possible changes in key assumptions In $bn (unless otherwise stated) At 31 Dec 2024 At 31 Dec 2023 HSBC North America Holdings Inc. VIU 13.3 12.8 Impact on VIU 100bps decrease in the discount rate – single variable 1 1.5 1.6 100bps increase in the discount rate – single variable 1 ( 1.2 ) ( 1.2 ) 10% decrease in forecast profitability – single variable 1 ( 1.3 ) ( 1.3 ) 1 The recoverable amount of HSBC Overseas Holdings (UK) Limited represents the aggregate of recoverable amounts of the underlying subsidiaries. Single variable sensitivity analysis on a single subsidiary may therefore not be representative of the aggregate impact of the change in the variable. HSBC Holdings plc Annual Report on Form 20-F 429 Subsidiaries with significant non-controlling interests 2024 2023 Hang Seng Bank Limited Proportion of ownership interests and voting rights held by non-controlling interests (%) 1 36.88 37.86 Place of business Hong Kong Hong Kong $m $m Profit attributable to non-controlling interests 905 889 Accumulated non-controlling interests of the subsidiary 6,879 6,877 Dividends paid to non-controlling interests 620 490 Summarised financial information: –  total assets 229,069 214,321 –  total liabilities 208,908 194,621 –  net operating income before changes in expected credit losses and other credit impairment charges 5,249 5,210 –  profit for the year 2,434 2,356 –  total comprehensive income for the year 2,482 2,723 1 This includes the Group’s shareholding held under trading books 0.06 % (2023: 0.09 % ). 20 Structured entities HSBC is mainly involved with both consolidated and unconsolidated structured entities through the securitisation of financial assets, conduits and investment funds, established either by HSBC or a third party. Consolidated structured entities Total assets of HSBC’s consolidated structured entities, split by entity type Conduits Securitisations HSBC managed funds Other Total $bn $bn $bn $bn $bn At 31 Dec 2024 2.4 7.0 7.2 1.8 18.4 At 31 Dec 2023 3.6 7.8 5.5 8.2 25.1 Conduits HSBC has established and manages two types of conduits: securities investment conduits (‘SICs’) and multi-seller conduits. Securities investment conduits The SICs purchase highly rated ABSs to facilitate tailored investment opportunities. – At 31 December 2024 , Solitaire, HSBC’s principal SIC, held $ 0.7 bn of ABSs ( 2023 : $ 1.0 b n). It is currently funded entirely by commercial paper (‘CP’) issued to HSBC. At 31 December 2024 , HSBC held $ 1.0 bn of CP ( 2023 : $ 1.3 b n). Multi-seller conduit HSBC’s multi-seller conduit was established to provide access to flexible market-based sources of finance for its clients. Currently, HSBC bears risk equal to the transaction-specific facility offered to the multi-seller conduit, amounting to $ 5.2 bn at 31 December 2024 ( 2023 : $ 6.1 b n). First loss protection is provided by the originator of the assets, and not by HSBC, through transaction-specific credit enhancements. A layer of loss protection is provided by HSBC in the form of a programme-wide enhancement facility. Securitisations HSBC uses structured entities to securitise customer loans and advances it originates in order to diversify its sources of funding for asset origination and capital efficiency purposes. The loans and advances are transferred by HSBC to the structured entities for cash or synthetically, and the structured entities issue debt securities to investors. Where synthetic securitisations are used, the credit risk associated with the loan portfolio of assets is transferred to the structured entities through loan portfolio financial guarantees. HSBC managed funds HSBC has established a number of money market and non-money market funds. Where it is deemed to be acting as principal rather than agent in its role as investment manager, HSBC controls these funds. Other HSBC has entered into a number of transactions in the normal course of business, which include asset and structured finance transactions where it has control of the structured entity. In addition, HSBC is deemed to control a number of third-party managed funds through its involvement as a principal in the funds. 430 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Unconsolidated structured entities The term ‘unconsolidated structured entities’ refers to all structured entities not controlled by HSBC. The Group enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer transactions and for specific investment opportunities. Nature and risks associated with HSBC interests in unconsolidated structured entities Securitisations HSBC managed funds Non-HSBC managed funds Other Total Total asset values of the entities ($m) 0–500 167 344 1,215 46 1,772 500–2,000 2 75 911 2 990 2,000–5,000 — 30 348 1 379 5,000–25,000 — 21 212 — 233 25,000+ — 2 33 — 35 Number of entities at 31 Dec 2024 169 472 2,719 49 3,409 $bn $bn $bn $bn $bn Total assets in relation to HSBC’s interests in the unconsolidated structured entities 5.4 12.1 25.4 2.4 45.3 –  trading assets — 0.1 — — 0.1 –  financial assets designated and otherwise mandatorily measured at fair value through profit or loss — 7.8 22.2 — 30.0 –  loans and advances to customers 5.4 — 0.7 1.5 7.6 –  financial investments — 0.2 0.4 — 0.6 –  assets held for sale — 4.0 2.1 — 6.1 –  other assets — — — 0.9 0.9 Total liabilities in relation to HSBC’s interests in the unconsolidated structured entities — — — 0.4 0.4 –  other liabilities — — — 0.4 0.4 Other off-balance sheet commitments — 1.0 8.1 1.3 10.4 HSBC’s maximum exposure at 31 Dec 2024 5.4 13.1 33.5 3.3 55.3 Total asset values of the entities ($m) 0–500 120 337 1,271 42 1,770 500–2,000 4 96 1,069 3 1,172 2,000–5,000 — 39 418 — 457 5,000–25,000 — 24 217 — 241 25,000+ — 3 11 — 14 Number of entities at 31 Dec 2023 124 499 2,986 45 3,654 $bn $bn $bn $bn $bn Total assets in relation to HSBC’s interests in the unconsolidated structured entities 3.2 13.9 20.7 3.3 41.1 –  trading assets — 0.6 — — 0.6 –  financial assets designated and otherwise mandatorily measured at fair value through profit or loss — 12.6 19.7 — 32.3 –  loans and advances to customers 3.2 — 0.6 2.5 6.3 –  financial investments — 0.7 0.4 — 1.1 –  other assets — — — 0.8 0.8 Total liabilities in relation to HSBC’s interests in the unconsolidated structured entities — — — 0.3 0.3 –  other liabilities — — — 0.3 0.3 Other off-balance sheet commitments 0.1 1.9 5.0 1.2 8.2 HSBC’s maximum exposure at 31 Dec 2023 3.3 15.8 25.7 4.2 49.0 The maximum exposure to loss from HSBC’s interests in unconsolidated structured entities represents the maximum loss it could incur as a result of its involvement with these entities regardless of the probability of the loss being incurred. – For commitments, guarantees and written credit default swaps, the maximum exposure to loss is the notional amount of potential future losses. – For retained and purchased investments and loans to unconsolidated structured entities, the maximum exposure to loss is the carrying amount of these interests at the balance sheet reporting date. The maximum exposure to loss is stated gross of the effects of hedging and collateral arrangements that HSBC has entered into in order to mitigate the Group’s exposure to loss. Securitisations HSBC has interests in unconsolidated securitisation vehicles through holding notes issued by these entities. In addition, HSBC has investments in ABSs issued by third-party structured entities. HSBC managed funds HSBC establishes and manages money market funds and non-money market investment funds to provide customers with investment opportunities. Further information on funds under management is provided on page 116 . HSBC, as fund manager, may be entitled to receive management and performance fees based on the assets under management. HSBC may also retain units in these funds. HSBC Holdings plc Annual Report on Form 20-F 431 Non-HSBC managed funds HSBC purchases and holds units of third-party managed funds in order to facilitate business and meet customer needs. Other HSBC has established structured entities in the normal course of business, such as structured credit transactions for customers, to provide finance to public and private sector infrastructure projects, and for asset and structured finance transactions. In addition to the interests disclosed above, HSBC enters into derivative contracts, reverse repos and stock borrowing transactions with structured entities. These interests arise in the normal course of business for the facilitation of third-party transactions and risk management solutions. HSBC sponsored structured entities The amount of assets transferred to and income received from such sponsored structured entities during 2024 and 2023 was not significant. 21 Goodwill and intangible assets 2024 2023 $m $m Goodwill 4,118 4,323 Other intangible assets 1 8,266 8,164 At 31 Dec 12,384 12,487 1 Included within other intangible assets is internally generated software with a net carrying amount of $ 7,100 m (2023: $ 6,895 m ). During the year, capitalisation of internally generated software was $ 2,476 m (2023: $ 2,306 m ), impairment was $ 67 m (2023: reversal impairment of $ 285 m ) and amortisation was $ 1,995 m (2023: $ 1,877 m ). Movement analysis of goodwill 2024 2023 $m $m Gross amount At 1 Jan 19,560 18,965 Exchange differences ( 962 ) 523 Reclassified to held for sale and additions 1 28 73 Other — ( 1 ) At 31 Dec 18,626 19,560 Accumulated impairment losses At 1 Jan ( 15,237 ) ( 14,809 ) Exchange differences 716 ( 428 ) Reclassified to held for sale 1 13 — At 31 Dec ( 14,508 ) ( 15,237 ) Net carrying amount at 31 Dec 4,118 4,323 1 Includes goodwill arising from acquisition of Silkroad, offset by goodwill reclassified to held for sale associated with sales of HSBC Bank Armenia, private banking business in Germany, and planned sale of HSBC Assurances Vie (France). For further details, see Note 23 . Goodwill Impairment testing The Group’s impairment test in respect of goodwill allocated to each cash-generating unit (‘CGU’) is performed at 1 October each year. A review for indicators of impairment is undertaken at each subsequent quarter-end and at 31 December 2024. No indicators of impairment were identified as part of these reviews. Basis of the recoverable amount The recoverable amount of all CGUs to which goodwill has been allocated was equal to its value in use (‘VIU’) at each respective testing date. The VIU is calculated by discounting management’s cash flow projections for the CGU. The key assumptions used in the VIU calculation for each individually significant CGU that is not impaired are discussed below. Key assumptions in VIU calculation – significant CGUs at 1 October 2024 1 Carrying amount at 1 Oct 2024 of which goodwill Value in use at 1 Oct 2024 Discount rate Growth rate beyond initial cash flow Carrying amount at 1 Oct 2023 of which goodwill Value in use at 1 Oct 2023 Discount rate Growth rate beyond initial cash flow projections $m $m $m % % $m $m $m % % HSBC UK Bank plc – WPB 12,785 2,843 27,118 10.6 2.0 11,167 2,597 27,933 10.4 2.0 1 For impacts arising from the revised organisational structure effective from 1 January 2025, see Note 1.2(a) . At 1 October 2024, aggregate goodwill of $ 1,493 m (1 October 2023: $ 1,599 m ) had been allocated to CGUs that were not considered individually significant. The Group’s CGUs do not carry on their balance sheets any significant intangible assets with indefinite useful lives, other than goodwill. 432 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Management’s judgement in estimating the cash flows of a CGU The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of goodwill in the next financial year, but does consider this to be an area that is inherently judgemental. The cash flow projections for each CGU are based on forecast profitability plans approved by the Board and minimum capital levels required to support the business operations of a CGU. The Board challenges and endorses planning assumptions in light of internal capital allocation decisions necessary to support our strategy, current market conditions and macroeconomic outlook. For the 1 October 2024 impairment test, cash flow projections until the end of 2029 were considered, in line with our internal planning horizon. Key assumptions underlying cash flow projections reflect management’s outlook on interest rates and inflation, as well as business strategy, including the scale of investment in technology and automation. Our cash flow projections include known and observable climate-related opportunities and costs associated with our sustainable products and operating model. As required by IFRS Accounting Standards, estimates of future cash flows exclude estimated cash inflows or outflows that are expected to arise from restructuring initiatives before an entity has a constructive obligation to carry out the plan, and would therefore have recognised a provision for restructuring costs. Discount rate The rate used to discount the cash flows is based on the cost of equity assigned to each CGU, which is derived using a capital asset pricing model (‘CAPM’) and market implied cost of equity. CAPM depends on a number of inputs reflecting financial and economic variables, including the risk-free rate and a premium to reflect the inherent risk of the business being evaluated. These variables are based on the market’s assessment of the economic variables and management’s judgement. The discount rates for each CGU are refined to reflect the rates of inflation for the countries within which the CGU operates. In addition, for the purposes of testing goodwill for impairment, management supplements this process by comparing the discount rates derived using the internally generated CAPM, with the cost of equity rates produced by external sources for businesses operating in similar markets. The impacts of climate risk are included to the extent that they are observable in discount rates and asset prices. Long-term growth rate The long-term growth rate is used to extrapolate the cash flows in perpetuity because of the long-term perspective within the Group of business units making up the CGUs. These growth rates reflect inflation for the countries within which the CGU operates or from which it derives revenue. Sensitivities of key assumptions in calculating VIU At 1 October 2024, given the extent by which VIU exceeds carrying amount, the HSBC UK WPB CGU was not sensitive to reasonably possible adverse changes in key assumptions supporting the recoverable amount. In making an estimate of reasonably possible changes to assumptions, management considers the available evidence in respect of each input to the VIU calculation, such as the external range of discount rates observable, historical performance against forecast and risks attaching to the key assumptions underlying cash flow projections. None of the remaining CGUs are individually significant. Other intangible assets Impairment testing Impairment of other intangible assets is assessed in accordance with our policy explained in Note 1.2(n) by comparing the net carrying amount of CGUs containing intangible assets with their recoverable amounts. Recoverable amounts are determined by calculating an estimated VIU or fair value, as appropriate, for each CGU. No significant impairment was recognised during the year. Key assumptions in VIU calculation The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of other intangible assets in the next financial year, but does consider this to be an area that is inherently judgemental. We used a number of assumptions in our VIU calculation, in accordance with the requirements of IAS 36: – Management’s judgement in estimating future cash flows: We considered past business performance, current market conditions and our macroeconomic outlook to estimate future earnings. As required by IFRS Accounting Standards, estimates of future cash flows exclude estimated cash inflows or outflows that are expected to arise from restructuring initiatives before an entity has a constructive obligation to carry out the plan, and would therefore have recognised a provision for restructuring costs. For some businesses, this means that the benefit of certain strategic actions may not be included in the impairment assessment, including capital releases. Our cash flow projections include known and observable climate-related opportunities and costs associated with our sustainable products and operating model. – Long-term growth rates: The long-term growth rate is used to extrapolate the cash flows in perpetuity because of the long-term perspective of the businesses within the Group. – Discount rates: Rates are based on a combination of CAPM and market-implied calculations considering market data for the businesses and geographies in which the Group operates. The impacts of climate risk are included to the extent that they are observable in discount rates and asset prices. Sensitivity of estimates relating to non-financial assets As explained in Note 1.2(a), estimates of future cash flows for CGUs are made in the review of goodwill and non-financial assets for impairment. Non-financial assets include other intangible assets shown above, and owned property, plant and equipment and right-of-use assets (see Note 22 ). The most significant sources of estimation uncertainty are in respect of the goodwill balances disclosed above. There are no non-financial asset balances relating to individual CGUs which involve estimation uncertainty that represents a significant risk of resulting in a material adjustment to the results and financial position of the Group within the next financial year. Non-financial assets are widely distributed across CGUs within the legal entities of the Group, including Corporate Centre assets that cannot be allocated to CGUs and are therefore tested for impairment at consolidated level. The recoverable amounts of other intangible assets, owned property, plant and equipment, and right-of-use assets cannot be lower than individual asset fair values less costs to dispose, where relevant. At 31 December 2024 none of the CGUs were sensitive to reasonably possible adverse changes in key assumptions supporting the recoverable amount. In making an estimate of reasonably possible changes to assumptions, management considers the available evidence in respect of each input to the VIU calculation, such as the external range of discount rates observable, historical performance against forecast and risks attaching to the key assumptions underlying cash flow projections. HSBC Holdings plc Annual Report on Form 20-F 433 22 Prepayments, accrued income and other assets 2024 2023 $m $m Prepayments and accrued income 13,781 13,854 Settlement accounts and items in course of collection from other banks 19,050 39,195 Cash collateral and margin receivables 59,488 57,058 Bullion 16,841 13,701 Endorsements and acceptances 8,093 7,939 Insurance contract assets (Note 4) 132 252 Reinsurance contract assets 4,798 4,728 Employee benefit assets (Note 5) 7,548 7,750 Right-of-use assets 2,205 2,456 Owned property, plant and equipment 9,407 10,478 Other accounts 11,397 14,186 At 31 Dec 1 152,740 171,597 1 Prepayments, accrued income and other assets include $ 109,336 m (2023: $ 129,203 m ) of financial assets, the majority of which are measured at amortised cost. 23 Assets held for sale, liabilities of disposal groups held for sale and business acquisitions 2024 2023 $m $m Held for sale at 31 Dec Disposal groups 27,126 115,836 Unallocated impairment losses 1 ( 31 ) ( 1,975 ) Non-current assets held for sale 139 273 Assets held for sale 27,234 114,134 Liabilities of disposal groups held for sale 29,011 108,406 1 This represents impairment losses in excess of the carrying value of the non-current assets, excluded from the measurement scope of IFRS 5. Disposal groups France retail banking operations On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking business in France to CCF, a subsidiary of Promontoria MMB SAS (‘My Money Group’). The sale also included HSBC Continental Europe’s 100 % ownership interest in HSBC SFH (France) and its 3 % ownership interest in Crédit Logement. Upon completion and in accordance with the terms of the sale, HSBC Continental Europe received a € 0.1 b n ( $ 0.1 b n) profit participation interest in the ultimate holding company of My Money Group. The associated impacts on initial recognition of this stake at fair value were recognised as part of the pre-tax loss on disposal in 2023, upon the reclassification of the disposal group as held for sale. In accordance with the terms of the sale, HSBC Continental Europe retained a portfo lio of € 7.1 b n ( $ 7.4 b n ) at the time of the sale, consisting of home and certain other loans, and the CCF brand, which it licensed to the buyer under a long-term licence agreement. Additionally, HSBC Continental Europe’s subsidiaries, HSBC Assurances Vie (France) and HSBC Global Asset Management (France), entered into distribution agreements with the buyer. The customer lending balances and associated income statement impacts of the portfolio of retained loans, together with the profit participation interest and the licence agreement of the CCF brand, were reclassified from WPB to Corporate Centre, with effect from 1 January 2024. During the fourth quarter of 2024, we began the process of marketing the retained home and other loan portfolio for sale, which had a carrying value of € 6.7 b n ( $ 6.9 b n) at 31 December 2024. As a result, we reclassified the portfolio to a hold-to-collect-and-sell business model from 1 January 2025 and will measure it prospectively from the first quarter of 2025 at fair value through other comprehensive income. We expect to recognise an estimated $ 1 b n fair value pre-tax loss in other comprehensive income on the remeasurement of the financial instruments. The valuation of this portfolio of loans may be substantially different in the event of a sale due to entity and deal-specific factors, including funding costs and the value of customer relationships. In the event of a sale, upon completion, the cumulative fair value changes recognised through other comprehensive income, which would reflect the terms of an agreed sale, would reclassify to the income statement. In December 2024, we entered into non-qualifying economic hedges, hedging interest rate risk on the portfolio and recognised a $ 0.1 b n mark-to-market gain year- to-date. Canada banking business On 28 March 2024, HSBC Overseas Holdings (UK) Limited, a direct subsidiary of HSBC Holdings plc, completed the sale of HSBC Bank Canada to the Royal Bank of Canada. The completion of the transaction resulted in a gain on sale of $ 4.8 b n, inclusive of the recycling of $ 0.6 b n in foreign currency translation reserve losses and $ 0.4 b n in other reserves losses. The gain on sale also included $ 0.3 b n in fair value gains recognised on the related foreign exchange hedges in the first quarter of 2024. There was no tax on the gain recognised at completion due to the substantial shareholding exemption rule in the UK. Following the completion of this transaction, the Board approved a special dividend of $ 0.21 per share, which was paid in June 2024 alongside the first interim dividend. 434 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Argentina business On 6 December 2024, HSBC Latin America B.V. completed the sale of its business in Argentina to Grupo Financiero Galicia (‘Galicia‘). Galicia acquired all of HSBC Argentina’s business covering banking, asset management and insurance, together with $ 100 m of subordinated debt issued by HSBC Argentina and held by HSBC Latin America Holdings (UK) Limited for a base consideration of $ 550 m . The consideration was adjusted for the results of the business and fair value gains or losses on HSBC Argentina’s securities portfolios during the period between 31 December 2023 and 30 November 2024. HSBC received the purchase consideration in a combination of cash and Galicia’s American Depositary Receipts (‘ADRs‘), with ADRs representing less than a 10 % economic interest in Galicia. At 31 December 2024, the fair value of the ADRs received and held as fair value through profit and loss was $ 0.7 b n. For the year ended 31 December 2024, we recognised a $ 1.0 b n pre-tax loss and we recy cled $ 5.2 b n foreig n currency reserve and other reserve losses to the income statement on completion. There was no tax deduction on the loss recognised. Other disposals On 30 May 2024, HSBC Europe BV, a wholly-owned subsidiary of HSBC Bank plc, completed the sale of HSBC Bank (RR) (Limited Liability Company) to Expobank. Foreign currency translation reserve losses of $ 0.1 b n were recognised in the income statement upon completion. On 6 July 2024, The Hongkong and Shanghai Banking Corporation Limited (acting through its Mauritius branch) completed the sale of its Wealth and Personal Banking business in Mauritius to Absa Bank (Mauritius) Limited, a wholly-owned subsidiary of Absa Group Limited. The financial impact of the sale was not significant for the Group. On 23 September 2024, HSBC Continental Europe, a wholly owned subsidiary of HSBC Bank plc, reached an agreement to sell its private banking business in Germany to BNP Paribas and the disposal group met the held for sale criteria at 31 December 2024. This sale, which remains subject to works council consultation, is expected to be completed in the second half of 2025. The sale is expected to generate an estimated pre-tax gain on disposal of $ 0.2 b n, which will be recognised on completion. On 25 September 2024, HSBC reached an agreement to transfer its business in South Africa to local lender FirstRand Bank Ltd and the disposal group met the held for sale criteria at 31 December 2024. The transaction, which is subject to regulatory and governmental approvals, is expected to complete in the second half of 2025. At closing, cumulative foreign currency translation reserves and other reserves will recycle to the income statement. At 31 December 2024, foreign currency translation reserve and other reserve losses stood at $ 0.2 b n. On 29 November 2024, HSBC Europe BV completed the sale of HSBC Bank Armenia to Ardshinbank with a year-to-date loss of $ 0.1 b n recognised. On 20 December 2024, HSBC Continental Europe signed a Memorandum of Understanding (‘MoU’) for the planned sale of its French life insurance business, HSBC Assurances Vie (France), to Matmut Société d’Assurance Mutuelle. The transaction, which is subject to regulatory approvals and employee consultation, is expected to complete in the second half of 2025. The disposal group met the held for sale criteria at 31 December 2024, resulting in the reclassification of $ 24.2 b n in assets and $ 23.4 b n in liabilities to held for sale, and the recognition of an immaterial loss on disposal. The total pre-tax loss at completion is estimated at $ 0.2 b n inclusive of migration costs and the recycling of cumulative foreign currency translation reserves, insurance finance reserves and other reserves which stood at a net loss of $ 0.1 b n as at 31 December 2024. At 31 December 2024 , the major classes of assets and associated liabilities of disposal groups held for sale , excluding allocated impairment losses, were as follows: French Life Insurance Business German Private Banking Business South Africa 1 Other Total $m $m $m $m $m Assets of disposal groups held for sale Cash and balances at central banks — 1,896 — — 1,896 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 14,560 — — — 14,560 Derivatives 26 — 10 — 36 Loans and advances to banks 144 — — — 144 Loans and advances to customers — 309 656 — 965 Financial investments 2 8,500 — — — 8,500 Goodwill — 5 — — 5 Prepayments, accrued income and other assets 992 21 7 — 1,020 Total assets at 31 Dec 2024 24,222 2,231 673 — 27,126 Liabilities of disposal groups held for sale Customer accounts — 2,085 3,294 20 5,399 Financial liabilities designated at fair value 11 119 — — 130 Derivatives — — 19 — 19 Insurance contract liabilities 21,811 — — — 21,811 Accruals, deferred income and other liabilities 1,598 22 32 — 1,652 Total liabilities at 31 Dec 2024 23,420 2,226 3,345 20 29,011 Expected date of completion Second half of 2025 Second half of 2025 Second half of 2025 Operating segment WPB WPB GBM and Corporate Centre 1    Under the financial terms of the sale of our South Africa business, HSBC Bank plc will transfer the business with a net asset value of $ 0.7 b n for a book value less any provisions. The purchase price will be satisfied by the transfer of agreed liabilities of $ 3.3 b n. Any required increase to the net asset value of the business to achieve this will be satisfied by the inclusion of additional cash. Based upon the net liabilities of the disposal group at 31 December 2024, HSBC would be expected to include a cash contribution of $ 2.6 b n. 2 Represents financial investments measured at fair value through other comprehensive income. HSBC Holdings plc Annual Report on Form 20-F 435 At 31 December 2023 , the major classes of assets and associated liabilities of disposal groups held for sale, excluding allocated impairment losses, were as follows: Canada Retail banking operations in France Other Total $m $m $m $m Assets of disposal groups held for sale Cash and balances at central banks 5,370 226 — 5,596 Trading assets 2,465 — — 2,465 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 15 49 — 64 Derivatives 528 — — 528 Loans and advances to banks 154 10,333 — 10,487 Loans and advances to customers 56,129 16,902 254 73,285 Reverse repurchase agreements – non-trading 2,723 — — 2,723 Financial investments 1 16,978 33 — 17,011 Goodwill 225 — — 225 Prepayments, accrued income and other assets 3,318 132 2 3,452 Total assets at 31 Dec 2023 87,905 27,675 256 115,836 Liabilities of disposal groups held for sale Trading liabilities 1,417 — — 1,417 Deposits by banks 78 — — 78 Customer accounts 63,001 22,307 642 85,950 Repurchase agreements – non-trading 2,768 — — 2,768 Financial liabilities designated at fair value — 2,370 — 2,370 Derivatives 608 7 — 615 Debt securities in issue 7,707 1,377 — 9,084 Subordinated liabilities 8 — — 8 Accruals, deferred income and other liabilities 5,916 196 4 6,116 Total liabilities at 31 Dec 2023 81,503 26,257 646 108,406 Date of completion 28 March 2024 1 January 2024 Operating segment All global businesses WPB 1 Includes financial investments measured at fair value through other comprehensive income of $ 9.4 bn and debt instruments measured at amortised cost of $ 7.6 bn. Business acquisitions In October 2023, HSBC Global Asset Management Singapore Limited, a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited, entered into an agreement to acq u ire 100 % o f the shares of Silkroad Property Partners Pte Ltd (‘Silkroad’) and for HSBC Global Asset Management Limited to acquire Silkroad’s affiliated General Partner entities. Silkroad is a Singapore headquartered Asia-Pacific- focused, real estate investment manager. The acquisition was completed on 31 January 2024. In October 2023, HSBC Bank (China) Company Limited, a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited, entered into an agreement to acquire Citibank China’s retail wealth management portfolio in mainland China. The portfolio comprises assets under management and deposits and the associated wealth customers. The acquisition was completed on 7 June 2024. The financial impact of these business acquisitions was not significant for the Group. 24 Trading liabilities 2024 2023 $m $m Deposits by banks 1 7,671 6,779 Customer accounts 1 10,709 8,955 Other debt securities in issue (Note 26 ) 73 27 Other liabilities – net short positions in securities 47,529 57,389 At 31 Dec 65,982 73,150 1 ‘Deposits by banks’ and ‘Customer accounts’ include repos, stock lending and other amounts. 436 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements 25 Financial liabilities designated at fair value HSBC 2024 2023 $m $m Deposits by banks and customer accounts 1 23,773 21,043 Liabilities to customers under investment contracts 5,931 5,103 Debt securities in issue (Note 26) 99,706 103,803 Subordinated liabilities (Note 29) 9,317 11,477 At 31 Dec 138,727 141,426 1 Structured deposits placed at HSBC Bank USA are insured by the Federal Deposit Insurance Corporation, a US government agency, up to $250,000 per depositor. The carrying amount of financial liabilities designated at fair value was $ 4,365 m less than the contractual amount at maturity ( 2023 : $ 4,421 m less). The cumulative amount of change in fair value attributable to changes in credit risk was a loss of $ 1,655 m ( 2023 : loss of $ 1,286 m). HSBC Holdings 2024 2023 $m $m Debt securities in issue (Note 26 ) 33,268 35,189 Subordinated liabilities (Note 29 ) 8,314 8,449 At 31 Dec 41,582 43,638 The carrying amount of financial liabilities designated at fair value was $ 17 m less than the contractual amount at maturity (2023: $ 246 m less). The cumulative amount of change in fair value attributable to changes in credit risk was a loss of $ 540 m (2023: $ 682 m ). 26 Debt securities in issue HSBC 2024 2023 $m $m Bonds and medium-term notes 163,903 160,632 Other debt securities in issue 41,661 37,115 Total debt securities in issue 205,564 197,747 Included within: –  trading liabilities (Note 24) ( 73 ) ( 27 ) –  financial liabilities designated at fair value (Note 25) ( 99,706 ) ( 103,803 ) At 31 Dec 105,785 93,917 HSBC Holdings 2024 2023 $m $m Debt securities 97,588 100,428 Included within: –  financial liabilities designated at fair value (Note 25 ) ( 33,268 ) ( 35,189 ) At 31 Dec 64,320 65,239 27 Accruals, deferred income and other liabilities 2024 2023 $m $m Accruals and deferred income 16,277 16,814 Settlement accounts and items in course of transmission to other banks 24,692 35,718 Cash collateral and margin payables 58,040 56,832 Endorsements and acceptances 8,102 7,911 Employee benefit liabilities (Note 5) 1,017 1,160 Reinsurance contract liabilities 701 819 Lease liabilities 2,459 2,813 Other liabilities 19,052 21,834 At 31 Dec 1 130,340 143,901 1 Accruals, deferred income and other liabilities include $ 122,051 m (2023: $ 136,696 m) of financial liabilities, the majority of which are measured at amortised cost. HSBC Holdings plc Annual Report on Form 20-F 437 28 Provisions Restructuring costs Legal proceedings and regulatory matters Customer remediation Other provisions Total $m $m $m $m $m Provisions (excluding contractual commitments) At 1 Jan 2024 284 380 130 420 1,214 Additions 181 205 36 203 625 Amounts utilised ( 193 ) ( 228 ) ( 48 ) ( 105 ) ( 574 ) Unused amounts reversed ( 63 ) ( 63 ) ( 35 ) ( 82 ) ( 243 ) Exchange and other movements ( 10 ) 1 2 21 14 At 31 Dec 2024 199 295 85 457 1,036 Contractual commitments 1 At 1 Jan 2024 527 Net change in expected credit loss provision and other movements 161 At 31 Dec 2024 688 Total provisions At 31 Dec 2023 1,741 At 31 Dec 2024 1,724 Provisions (excluding contractual commitments) At 1 Jan 2023 445 409 195 397 1,446 Additions 255 236 37 170 698 Amounts utilised ( 288 ) ( 231 ) ( 69 ) ( 68 ) ( 656 ) Unused amounts reversed ( 149 ) ( 30 ) ( 41 ) ( 95 ) ( 315 ) Exchange and other movements 21 ( 4 ) 8 16 41 At 31 Dec 2023 284 380 130 420 1,214 Contractual commitments 1 At 1 Jan 2023 512 Net change in expected credit loss provision and other movements 15 At 31 Dec 2023 527 Total provisions At 31 Dec 2022 1,958 At 31 Dec 2023 1,741 1 C ontractual commitments include the expected credit loss provision in relation to off-balance sheet financial guarantee contracts and commitments where HSBC has become party to an irrevocable commitment, as defined under IFRS 9 ‘Financial Instruments’; and provisions for performance and other guarantee contracts. Further details of ‘Legal proceedings and regulatory matters’ are set out in Note 35 . Legal proceedings include civil court, arbitration or tribunal proceedings brought against HSBC companies (whether by way of claim or counterclaim); or civil disputes that may, if not settled, result in court, arbitration or tribunal proceedings. ‘Regulatory matters’ refers to investigations, reviews and other actions carried out by, or in response to, the actions of regulators or law enforcement agencies in connection with alleged wrongdoing by HSBC. Customer remediation refers to HSBC’s activities to compensate customers for losses or damages associated with a failure to comply with regulations or to treat customers fairly. Customer remediation is often initiated by HSBC in response to customer complaints and/or industry developments in sales practices, and is not necessarily initiated by regulatory action. For further details of the impact of IFRS 9 on undrawn loan commitments and financial guarantees, presented in ‘Contractual commitments’, see Note 33 . Further analysis of the movement in the expected credit loss provision is disclosed within the ‘Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan commitments and financial guarantees‘ table on page 192 . Brazil PIS and COFINS tax matters Beginning in the late 1990s, HSBC Bank Brasil S.A. – Banco Múltiplo (‘HSBC Brazil’) and other financial services firms brought legal proceedings in Brazil challenging the assessment of PIS and COFINS taxes, which are federal taxes imposed on gross revenues earned by legal entities in Brazil. The Supreme Court of Brazil selected three cases – one involving an insurer, in 2007, and two involving other banks, in 2011 – to set standards that would apply to all of these proceedings. In June 2023, the court ruled against the financial services firms in all three cases. The standards set by the court in this ruling have not yet been applied to HSBC Brazil’s legacy cases, liability for which remained with HSBC after the sale of HSBC’s operations in Brazil to Bradesco in 2016. There are many factors that may affect the range of outcomes and any resulting financial impact for HSBC. Based upon the information currently available, a provision was recognised in respect of one legacy case. The remaining additional tax liability subject to challenge on all legacy PIS and COFINS cases is up to $ 0.4 b n. As at 31 December 2024, no provision has been booked for this amount. 438 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements 29 Subordinated liabilities HSBC’s subordinated liabilities 2024 2023 $m $m At amortised cost 25,958 24,954 –  subordinated liabilities 25,080 23,149 –  preferred securities 878 1,805 Designated at fair value (Note 25) 9,317 11,477 –  subordinated liabilities 9,317 11,477 –  preferred securities — — At 31 Dec 35,275 36,431 Issued by HSBC subsidiaries 3,144 4,154 Issued by HSBC Holdings 32,131 32,277 Subordinated liabilities rank behind senior obligations and generally count towards the capital base of HSBC. Capital securities may be called and redeemed by HSBC subject to prior notification to the PRA and, where relevant, the consent of the local banking regulator. If not redeemed at the first call date, coupons payable may reset or become floating rate based on relevant market rates. On subordinated liabilities other than floating rate notes, interest is payable at fixed rates of up to 8.201 % . The balance sheet amounts disclosed in the following table are presented on an IFRS basis and do not reflect the amount that the instruments contribute to regulatory capital, principally due to regulatory amortisation and regulatory eligibility limits. HSBC’s subordinated liabilities: subsidiaries 2024 2023 $m $m Additional tier 1 capital securities issued by HSBC subsidiaries 1 732 1,672 Tier 2 securities issued by HSBC subsidiaries –  Tier 2 securities issued by HSBC Bank plc 715 764 –  Tier 2 securities issued by The Hongkong and Shanghai Banking Corporation Limited — –  Tier 2 securities issued by HSBC Bank USA Inc 223 223 –  Tier 2 securities issued by HSBC Bank USA N.A. 1,431 1,449 Securities issued by other HSBC subsidiaries 43 46 Subordinated liabilities issued by HSBC subsidiaries at 31 Dec 3,144 4,154 1 The $ 900 m 10.176 % security issued by HSBC Capital Funding (Dollar 1) L.P. was redeemed on 31 October 2024. HSBC Holdings’ subordinated liabilities 2024 2023 $m $m At amortised cost 23,548 24,439 Designated at fair value (Note 25 ) 8,314 8,449 At 31 Dec 31,862 32,888 HSBC Holdings’ subordinated liabilities in issue 2024 2023 $m $m Tier 2 securities issued by HSBC Holdings Amounts owed to third parties 31,862 31,975 Amounts owed to HSBC undertakings 1 — 913 Subordinated liabilities issued by HSBC Holdings at 31 Dec 31,862 32,888 1 The $ 900 m 10.176 % security issued by HSBC Holdings to HSBC Capital Funding (Dollar 1) L.P. was redeemed on 31 October 2024. HSBC Holdings plc Annual Report on Form 20-F 439 Guaranteed by HSBC Holdings or HSBC Bank plc Capital securities guaranteed by HSBC Holdings or HSBC Bank plc were issued by the Jersey limited partnerships. The proceeds of these were lent to the respective guarantors by the limited partnerships in the form of subordinated notes. They qualified as additional tier 1 capital for HSBC under CRR II until 31 December 2021 by virtue of the application of grandfathering provisions. The capital securities guaranteed by HSBC Bank plc also qualified as additional tier 1 capital for HSBC Bank plc (on a solo and a consolidated basis) under CRR II until 31 December 2021 by virtue of the same grandfathering process. Since 31 December 2021, these securities have no longer qualified as regulatory capital for HSBC Holdings or HSBC Bank plc. On 31 October 2024, the capital securities guaranteed by HSBC Holdings were redeemed. As at 31 December 2024 the preferred securities guaranteed by HSBC Bank plc are intended to provide investors with rights to income and capital distributions, as well as distributions upon liquidation of the issuer that are equivalent to the rights that they would have had if they had purchased non-cumulative perpetual preference shares of the issuer. There are limitations on the payment of distributions if such payments are prohibited under UK banking regulations or other requirements, if a payment would cause a breach of HSBC Bank plc’s capital adequacy requirements, or if HSBC Bank plc has insufficient distributable reserves (as defined). HSBC Bank plc have covenanted that, if prevented under certain circumstances from paying distributions on the preferred securities in full, they will not pay dividends or other distributions in respect of their ordinary shares, or repurchase or redeem their ordinary shares, until the distribution on the preferred securities has been paid in full. If the preferred securities guaranteed by HSBC Bank plc are outstanding in November 2048, or if the total capital ratio of HSBC Bank plc (on a solo or consolidated basis) falls below the regulatory minimum required, or if the Directors expect it to do so in the near term, provided that proceedings have not been commenced for the liquidation, dissolution or winding up of HSBC Bank plc, the holders’ interests in the preferred security guaranteed by HSBC Bank plc will be exchanged for interests in preference shares issued by HSBC Bank plc that have economic terms which are in all material respects equivalent to the preferred security and its guarantee. Tier 2 securities Tier 2 capital securities are either perpetual or dated subordinated securities on which there is an obligation to pay coupons. These capital securities are included within HSBC’s regulatory capital base as tier 2 capital under CRR II, either as fully eligible capital or by virtue of the application of grandfathering provisions. In accordance with CRR II, the capital contribution of all tier 2 securities is amortised for regulatory purposes in their final five years before maturity. 30 Maturity analysis of assets, liabilities and off-balance sheet commitments The table on page 440 provides an analysis of consolidated total assets, liabilities and off-balance sheet commitments by residual contractual maturity at the balance sheet date. These balances are included in the maturity analysis as follows: – Trading assets and liabilities (including trading derivatives but excluding reverse repos, repos and debt securities in issue) are included in the ‘Due not more than 1 month’ time bucket because trading balances are typically held for short periods of time. – Financial assets and liabilities with no contractual maturity (such as equity securities) are included in the ‘Due over 5 years’ time bucket. Undated or perpetual instruments are classified based on the contractual notice period, which the counterparty of the instrument is entitled to give. Where there is no contractual notice period, undated or perpetual contracts are included in the ‘Due over 5 years’ time bucket. – Non-financial assets and liabilities with no contractual maturity are included in the ‘Due over 5 years’ time bucket. – Financial instruments included within assets and liabilities of disposal groups held for sale are classified on the basis of the contractual maturity of the underlying instruments and not on the basis of the disposal transaction. – Liabilities under insurance contracts included in ‘non-financial liabilities’ are irrespective of contractual maturity included in the ‘Due over 5 years’ time bucket in the maturity table provided below. An analysis of the present value of expected future cash flows of insurance contract liabilities and contractual service margin is provided on page 395 . Liabilities under investment contracts are classified in accordance with their contractual maturity. Undated investment contracts are included in the ‘Due over 5 years’ time bucket, although such contracts are subject to surrender and transfer options by the policyholders. – Loan and other credit-related commitments are classified on the basis of the earliest date they can be drawn down. 440 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements HSBC Maturity analysis of assets, liabilities and off-balance sheet commitments Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 6 months Due over 6 months but not more than 9 months Due over 9 months but not more than 1 year Due over 1 year but not more than 2 years Due over 2 years but not more than 5 years Due over 5 years Total $m $m $m $m $m $m $m $m $m Financial assets Cash and balances at central banks 267,674 — — — — — — — 267,674 Hong Kong Government certificates of indebtedness 42,293 — — — — — — — 42,293 Trading assets 311,277 1,374 679 337 774 401 — — 314,842 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 6,329 1,497 1,218 810 1,570 4,010 11,503 88,832 115,769 Derivatives 264,689 401 709 377 164 364 524 1,409 268,637 Loans and advances to banks 69,778 16,300 3,871 4,264 2,922 2,276 2,236 392 102,039 Loans and advances to customers 135,250 69,955 53,557 36,945 38,985 89,061 176,645 330,260 930,658 –  personal 45,221 10,236 7,634 6,705 6,197 19,683 53,434 295,588 444,698 –  corporate and commercial 78,170 52,618 38,440 22,858 25,292 54,832 102,637 29,102 403,949 –  financial 11,859 7,101 7,483 7,382 7,496 14,546 20,574 5,570 82,011 Reverse repurchase agreements – non-trading 179,590 36,552 15,054 3,715 6,659 7,400 3,579 — 252,549 Financial investments 35,780 74,850 50,650 15,907 20,465 54,125 143,870 97,519 493,166 Assets held for sale 1 2,711 170 215 401 711 513 2,465 19,170 26,356 Accrued income and other financial assets 94,803 6,831 4,127 648 579 498 346 1,504 109,336 Financial assets at 31 Dec 2024 1,410,174 207,930 130,080 63,404 72,829 158,648 341,168 539,086 2,923,319 Non-financial assets — — — — — — — 93,729 93,729 Total assets at 31 Dec 2024 1,410,174 207,930 130,080 63,404 72,829 158,648 341,168 632,815 3,017,048 Off-balance sheet commitments received Loan and other credit-related commitments 41,875 — — — — — — — 41,875 Financial liabilities Hong Kong currency notes in circulation 42,293 — — — — — — — 42,293 Deposits by banks 54,714 1,595 2,227 653 3,924 507 9,919 458 73,997 Customer accounts 1,382,204 168,423 58,928 19,062 17,389 6,482 2,353 114 1,654,955 –  personal 640,031 111,341 41,429 13,429 11,109 3,983 1,981 — 823,303 –  corporate and commercial 564,693 45,047 14,708 3,991 4,748 1,968 332 106 635,593 –  financial 177,480 12,035 2,791 1,642 1,532 531 40 8 196,059 Repurchase agreements – non-trading 168,075 10,340 1,176 450 473 171 — 195 180,880 Trading liabilities 58,069 4,933 2,873 7 100 — — — 65,982 Financial liabilities designated at fair value 19,037 8,732 5,890 4,765 5,600 17,013 43,274 34,416 138,727 –  debt securities in issue: covered bonds — — — — — — — — — –  debt securities in issue: unsecured 8,431 4,148 3,557 2,885 4,362 14,660 38,259 22,866 99,168 –  subordinated liabilities and preferred securities — — — 1,011 — 886 1,871 5,548 9,316 –  other 10,606 4,584 2,333 869 1,238 1,467 3,144 6,002 30,243 Derivatives 262,928 2 6 3 1 43 192 1,273 264,448 Debt securities in issue 5,761 10,915 10,330 7,332 7,239 14,724 22,311 27,173 105,785 –  covered bonds — — — — — — 1,253 — 1,253 –  otherwise secured 511 47 67 64 61 664 520 2,236 4,170 –  unsecured 5,250 10,868 10,263 7,268 7,178 14,060 20,538 24,937 100,362 Liabilities of disposal groups held for sale 2 5,356 223 42 2 107 — — 1,448 7,178 Accruals and other financial liabilities 99,424 11,827 5,415 1,013 1,241 902 1,489 738 122,049 Subordinated liabilities — — 1,719 16 — — 861 23,362 25,958 Total financial liabilities at 31 Dec 2024 2,097,861 216,990 88,606 33,303 36,074 39,842 80,399 89,177 2,682,252 Non-financial liabilities — — — — — — — 142,523 142,523 Total liabilities at 31 Dec 2024 2,097,861 216,990 88,606 33,303 36,074 39,842 80,399 231,700 2,824,775 Off-balance sheet commitments given Loan and other credit-related commitments 861,181 74 12 85 49 6 57 114 861,578 –  personal 253,522 — — — — — — — 253,522 –  corporate and commercial 460,762 74 12 85 49 6 57 114 461,159 –  financial 146,897 — — — — — — — 146,897 HSBC Holdings plc Annual Report on Form 20-F 441 Maturity analysis of assets, liabilities and off-balance sheet commitments (continued) Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 6 months Due over 6 months but not more than 9 months Due over 9 months but not more than 1 year Due over 1 year but not more than 2 years Due over 2 years but not more than 5 years Due over 5 years Total $m $m $m $m $m $m $m $m $m Financial assets Cash and balances at central banks 285,868 — — — — — — — 285,868 Hong Kong Government certificates of indebtedness 42,024 — — — — — — — 42,024 Trading assets 284,865 2,010 637 363 555 165 564 — 289,159 Financial assets designated and otherwise mandatorily measured at fair value through profit or loss 5,530 697 821 753 581 4,839 11,917 85,505 110,643 Derivatives 227,343 138 134 71 35 383 570 1,040 229,714 Loans and advances to banks 76,524 18,662 6,487 2,689 3,281 2,756 2,328 175 112,902 Loans and advances to customers 142,803 66,425 52,218 40,135 36,323 94,206 175,381 331,044 938,535 –  personal 44,105 9,558 6,960 6,422 6,127 19,606 54,365 297,512 444,655 –  corporate and commercial 83,281 50,268 38,250 24,685 24,566 61,612 106,598 30,592 419,852 –  financial 15,417 6,599 7,008 9,028 5,630 12,988 14,418 2,940 74,028 Reverse repurchase agreements – non-trading 164,826 43,893 23,840 6,708 5,126 6,113 1,711 — 252,217 Financial investments 48,969 69,816 44,493 16,348 18,603 46,124 106,117 92,293 442,763 Assets held for sale 1 39,882 2,929 7,041 4,176 3,261 17,085 33,015 7,943 115,332 Accrued income and other financial assets 114,480 6,574 4,404 550 698 220 764 1,513 129,203 Financial assets at 31 Dec 2023 1,433,114 211,144 140,075 71,793 68,463 171,891 332,367 519,513 2,948,360 Non-financial assets — — — — — — — 90,317 90,317 Total assets at 31 Dec 2023 1,433,114 211,144 140,075 71,793 68,463 171,891 332,367 609,830 3,038,677 Off-balance sheet commitments received Loan and other credit-related commitments 39,836 — — — — — — — 39,836 Financial liabilities Hong Kong currency notes in circulation 42,024 — — — — — — — 42,024 Deposits by banks 52,747 2,758 2,324 381 94 1,458 13,064 337 73,163 Customer accounts 1,343,858 138,117 78,611 20,832 17,724 7,785 4,616 104 1,611,647 –  personal 621,112 84,909 61,286 14,794 12,465 5,507 2,742 2 802,817 –  corporate and commercial 545,207 43,562 14,525 4,605 3,393 2,165 1,527 92 615,076 –  financial 177,539 9,646 2,800 1,433 1,866 113 347 10 193,754 Repurchase agreements – non-trading 158,882 10,311 1,759 300 847 1 — — 172,100 Trading liabilities 66,548 6,302 300 — — — — — 73,150 Financial liabilities designated at fair value 22,080 8,366 7,823 7,197 6,239 16,679 39,497 33,545 141,426 –  debt securities in issue: covered bonds — — — — — — — — — –  debt securities in issue: unsecured 10,383 2,760 5,748 6,225 5,390 14,090 34,757 23,898 103,251 –  subordinated liabilities and preferred securities — 1,995 — — — 1,471 3,429 4,581 11,476 –  other 11,697 3,611 2,075 972 849 1,118 1,311 5,066 26,699 Derivatives 233,134 113 25 9 47 73 1,223 148 234,772 Debt securities in issue 6,891 6,664 10,816 6,896 6,427 6,317 27,452 22,454 93,917 –  covered bonds — — — — — — 1,273 — 1,273 –  otherwise secured 447 44 62 58 55 188 861 1,679 3,394 –  unsecured 6,444 6,620 10,754 6,838 6,372 6,129 25,318 20,775 89,250 Liabilities of disposal groups held for sale 2 69,868 5,231 5,479 6,728 6,541 4,730 7,918 1,511 108,006 Accruals and other financial liabilities 111,559 11,827 6,007 1,205 1,414 1,053 1,491 2,137 136,693 Subordinated liabilities — 13 — — — 1,790 897 22,254 24,954 Total financial liabilities at 31 Dec 2023 2,107,591 189,702 113,144 43,548 39,333 39,886 96,158 82,490 2,711,852 Non-financial liabilities — — — — — — — 134,215 134,215 Total liabilities at 31 Dec 2023 2,107,591 189,702 113,144 43,548 39,333 39,886 96,158 216,705 2,846,067 Off-balance sheet commitments given Loan and other credit-related commitments 895,140 95 126 72 171 439 807 300 897,150 –  personal 256,272 21 30 46 107 279 745 192 257,692 –  corporate and commercial 472,507 74 26 26 64 160 62 108 473,027 –  financial 166,361 — 70 — — — — — 166,431 1 Unallocated impairment losses in relation to disposal groups of $ 0.03 b n (2023: $ 2.0 b n) and non-financial assets of $ 0.9 b n (2023: $ 0.9 b n) that are presented within assets held for sale on the balance sheet have been included within non-financial assets in the table above. 2 A total of $ 21.8 b n (2023: $ 0.4 b n) of non-financial liabilities that are presented within liabilities of disposal groups held for sale on the balance sheet have been included within non-financial liabilities in the table above. 442 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements HSBC Holdings Maturity analysis of assets, liabilities and off-balance sheet commitments Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 6 months Due over 6 months but not more than 9 months Due over 9 months but not more than 1 year Due over 1 year but not more than 2 years Due over 2 years but not more than 5 years Due over 5 years Total $m $m $m $m $m $m $m $m $m Financial assets Cash at bank and in hand: –  balances with HSBC undertakings 2,548 — — — — — — — 2,548 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value — — — — — 5,835 31,547 23,904 61,286 Derivatives 2,339 — 24 — — 243 162 286 3,054 Loans and advances to HSBC undertakings 8,500 — 120 — 13 1,640 6,739 20,665 37,677 Trading assets 709 — — — — — — — 709 Financial investments 6,141 4,187 — — — — — — 10,328 Accrued income and other financial assets 2,719 856 292 203 11 — — — 4,081 Total financial assets at 31 Dec 2024 22,956 5,043 436 203 24 7,718 38,448 44,855 119,683 Non-financial assets — — — — — — — 154,574 154,574 Total assets at 31 Dec 2024 22,956 5,043 436 203 24 7,718 38,448 199,429 274,257 Financial liabilities Amounts owed to HSBC undertakings — 231 — — — — — — 231 Financial liabilities designated at fair value — — — 1,012 — 3,641 16,907 20,022 41,582 –  debt securities in issue — — — — — 2,755 15,036 15,476 33,267 –  subordinated liabilities and preferred securities — — — 1,012 — 886 1,871 4,546 8,315 Derivatives 1,502 89 144 44 45 209 794 2,513 5,340 Debt securities in issue — — — — — 14,897 24,395 25,028 64,320 Accruals and other financial liabilities 351 1,713 831 129 31 — — 20 3,075 Subordinated liabilities — — 1,541 — — — 836 21,171 23,548 Total financial liabilities 31 Dec 2024 1,853 2,033 2,516 1,185 76 18,747 42,932 68,754 138,096 Non-financial liabilities — — — — — — — 22 22 Total liabilities at 31 Dec 2024 1,853 2,033 2,516 1,185 76 18,747 42,932 68,776 138,118 Financial assets Cash at bank and in hand: –  balances with HSBC undertakings 7,029 — — — — — — — 7,029 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value — — — — — 3,815 26,284 29,780 59,879 Derivatives 2,217 — — — — 18 675 434 3,344 Loans and advances to HSBC undertakings — — 120 — — 1,016 6,783 19,435 27,354 Financial investments 10,365 6,017 898 750 757 771 — — 19,558 Accrued income and other financial assets 3,511 860 254 229 5 — — — 4,859 Total financial assets at 31 Dec 2023 23,122 6,877 1,272 979 762 5,620 33,742 49,649 122,023 Non-financial assets — — — — — — — 163,146 163,146 Total assets at 31 Dec 2023 23,122 6,877 1,272 979 762 5,620 33,742 212,795 285,169 Financial liabilities Amounts owed to HSBC undertakings — 168 — — — — — — 168 Financial liabilities designated at fair value — — — — — 5,287 19,604 18,747 43,638 –  debt securities in issue — — — — — 3,816 16,175 15,198 35,189 –  subordinated liabilities and preferred securities — — — — — 1,471 3,429 3,549 8,449 Derivatives 2,452 209 7 59 75 558 1,318 1,412 6,090 Debt securities in issue — — 816 2,158 — 4,920 33,735 23,610 65,239 Accruals and other financial liabilities 1,437 1,599 1,049 127 34 — — 23 4,269 Subordinated liabilities — 1,987 — — — 1,600 880 19,972 24,439 Total financial liabilities at 31 Dec 2023 3,889 3,963 1,872 2,344 109 12,365 55,537 63,764 143,843 Non-financial liabilities — — — — — — — 20 20 Total liabilities at 31 Dec 2023 3,889 3,963 1,872 2,344 109 12,365 55,537 63,784 143,863 HSBC Holdings plc Annual Report on Form 20-F 443 Contractual maturity of financial liabilities The following table shows, on an undiscounted basis, all cash flows relating to principal and future coupon payments (except for trading liabilities and derivatives not treated as hedging derivatives). For this reason, balances in the following table do not agree directly with those in our consolidated balance sheet. Undiscounted cash flows payable in relation to hedging derivative liabilities are classified according to their contractual maturities. Trading liabilities and derivatives not treated as hedging derivatives are included in the ‘Due not more than 1 month’ time bucket and not by contractual maturity. In addition, loan and other credit-related commitments and financial guarantees are generally not recognised on our balance sheet. The undiscounted cash flows potentially payable under loan and other credit-related commitments and financial guarantees are classified on the basis of the earliest date they can be called. Cash flows payable by HSBC under financial liabilities by remaining contractual maturities Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 1 year Due over 1 year but not more than 5 years Due over 5 years Total $m $m $m $m $m $m Deposits by banks 54,819 1,759 7,381 11,242 511 75,712 Customer accounts 1,382,666 171,917 97,667 10,089 113 1,662,452 Repurchase agreements – non-trading 168,633 10,425 2,195 188 196 181,637 Trading liabilities 65,982 — — — — 65,982 Financial liabilities designated at fair value 19,139 9,042 18,462 70,587 45,767 162,997 Derivatives 262,014 531 1,008 2,034 2,765 268,352 Debt securities in issue 5,780 11,309 27,103 45,725 32,129 122,046 Subordinated liabilities 39 120 2,959 7,373 35,512 46,003 Other financial liabilities 1 138,319 9,754 5,421 2,206 608 156,308 2,097,391 214,857 162,196 149,444 117,601 2,741,489 Loan and other credit-related commitments 861,193 78 146 63 98 861,578 Financial guarantees 2 16,998 — — — — 16,998 At 31 Dec 2024 2,975,582 214,935 162,342 149,507 117,699 3,620,065 Proportion of cash flows payable in period 83 % 6 % 4 % 4 % 3 % Deposits by banks 52,938 2,898 3,304 17,123 362 76,625 Customer accounts 1,345,006 141,348 119,660 13,423 109 1,619,546 Repurchase agreements – non-trading 159,264 10,457 2,996 1 — 172,718 Trading liabilities 73,150 — — — — 73,150 Financial liabilities designated at fair value 22,262 9,156 26,033 63,960 44,886 166,297 Derivatives 232,598 609 1,295 2,445 2,910 239,857 Debt securities in issue 6,837 7,407 24,117 43,513 27,119 108,993 Subordinated liabilities 39 135 1,465 9,020 34,920 45,579 Other financial liabilities 1 149,904 9,752 5,943 2,555 2,109 170,263 2,041,998 181,762 184,813 152,040 112,415 2,673,028 Loan and other credit-related commitments 895,156 95 371 1,437 91 897,150 Financial guarantees 2 16,966 4 39 — — 17,009 At 31 Dec 2023 2,954,120 181,861 185,223 153,477 112,506 3,587,187 Proportion of cash flows payable in period 83 % 5 % 5 % 4 % 3 % 1 Excludes financial liabilities of disposal groups. 2 Excludes performance guarantee contracts to which the impairment requirements in IFRS 9 are not applied. HSBC Holdings HSBC Holdings’ primary sources of liquidity are dividends received from subsidiaries, interest on and repayment of intra-Group loans and securities, and interest earned on its own liquid funds. HSBC Holdings also raises funds in the debt capital markets to meet the Group’s minimum requirement for own funds and eligible liabilities and maintain an appropriate liquidity buffer. HSBC Holdings uses this liquidity to meet its obligations, including interest and principal repayments on external debt liabilities, operating expenses and collateral on derivative transactions . HSBC Holdings is also subject to contingent liquidity risk by virtue of credit-related commitments and guarantees and similar contracts issued relating to its subsidiaries. Such commitments and guarantees are only issued after due consideration of HSBC Holdings’ ability to finance the commitments and guarantees and the likelihood of the need arising. HSBC Holdings actively manages the cash flows from its subsidiaries to optimise the amount of cash held at the holding company level. During 2024, consistent with the Group’s capital plan, the Group’s material subsidiaries did not experience any significant restrictions on paying dividends or repaying loans and advances. Also, there are no foreseen restrictions envisaged with regard to planned dividends or payments from material subsidiaries. However, the ability of subsidiaries to pay dividends or advance monies to HSBC Holdings depends on, among other things, their respective local regulatory capital and banking requirements, exchange controls, statutory reserves, and financial and operating performance. HSBC Holdings currently has sufficient liquidity to meet its present and forecast requirements. 444 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements The following table shows, on an undiscounted basis, all cash flows relating to principal and future coupon payments (except for trading liabilities and derivatives not treated as hedging derivatives). For this reason, balances in the following table do not agree directly with those in HSBC Holdings balance sheet. Undiscounted cash flows payable in relation to hedging derivative liabilities are classified according to their contractual maturities. Trading liabilities and derivatives not treated as hedging derivatives are included in the ‘Due not more than 1 month’ time bucket and not by contractual maturity. In addition, loan and other credit-related commitments and financial guarantees are generally not recognised on our balance sheet. The undiscounted cash flows potentially payable under loan and other credit-related commitments and financial guarantees are classified on the basis of the earliest date they can be called. Cash flows payable by HSBC Holdings under financial liabilities by remaining contractual maturities Due not more than 1 month Due over 1 month but not more than 3 months Due over 3 months but not more than 1 year Due over 1 year but not more than 5 years Due over 5 years Total $m $m $m $m $m $m Amounts owed to HSBC undertakings — 231 — — — 231 Financial liabilities designated at fair value 2 133 2,254 26,335 26,788 55,512 Derivatives 669 202 1,344 2,591 1,658 6,464 Debt securities in issue — 254 1,697 47,771 29,706 79,428 Subordinated liabilities — 105 2,627 6,794 31,773 41,299 Other financial liabilities 351 1,735 991 — 20 3,097 At 31 Dec 2024 1,022 2,660 8,913 83,491 89,945 186,031 Amounts owed to HSBC undertakings — 168 — — — 168 Financial liabilities designated at fair value 23 405 1,437 31,050 25,610 58,525 Derivatives 1,244 556 1,651 2,227 726 6,404 Debt securities in issue — 680 4,787 46,909 27,745 80,121 Subordinated liabilities 46 2,163 1,360 8,239 30,862 42,670 Other financial liabilities 1,436 1,620 1,210 — 23 4,289 At 31 Dec 2023 2,749 5,592 10,445 88,425 84,966 192,177 31 Offsetting of financial assets and financial liabilities In the offsetting of financial assets and financial liabilities, the net amount is reported in the balance sheet when the offset criteria are met. This is achieved when there is a legally enforceable right to offset the recognised amounts and there is either an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. In the following table, the ‘Amounts not set off in the balance sheet’ include transactions where: – the counterparty has an offsetting exposure with HSBC and a master netting or similar arrangement is in place with a right to set off only in the event of default, insolvency or bankruptcy, or the offset criteria are otherwise not satisfied; and – cash and non-cash collateral (debt securities and equities) has been received/pledged for derivatives and reverse repurchase/repurchase, stock borrowing/lending and similar agreements to cover net exposure in the event of a default or other predetermined events. The effect of over-collateralisation is excluded. ‘Amounts not subject to enforceable netting agreements’ include contracts executed in jurisdictions where the rights of offset may not be upheld under the local bankruptcy laws, and transactions where a legal opinion evidencing enforceability of the right of offset may not have been sought, or may have been unable to obtain. For risk management purposes, the net amounts of loans and advances to customers are subject to limits, which are monitored and the relevant customer agreements are subject to review and updated, as necessary, to ensure the legal right to set off remains appropriate. HSBC Holdings plc Annual Report on Form 20-F 445 Offsetting of financial assets and financial liabilities Amounts subject to enforceable netting arrangements Amounts not subject to enforceable netting arrangements 1 Total Amounts not set off in the balance sheet Gross amounts Amounts offset Net amounts in the balance sheet Financial instruments, including non-cash collateral Cash collateral Net amount $m $m $m $m $m $m $m $m Financial assets Derivatives (Note 15) 2 372,699 ( 112,746 ) 259,953 ( 230,133 ) ( 22,730 ) 7,090 8,684 268,637 Reverse repos, stock borrowing and similar agreements classified as: 3 –  trading assets 25,077 ( 637 ) 24,440 ( 24,428 ) ( 10 ) 2 757 25,197 –  non-trading assets 386,124 ( 154,133 ) 231,991 ( 230,584 ) ( 332 ) 1,075 20,602 252,593 Loans and advances to customers 4 34,582 ( 16,540 ) 18,042 ( 15,313 ) ( 75 ) 2,654 4 18,046 At 31 Dec 2024 818,482 ( 284,056 ) 534,426 ( 500,458 ) ( 23,147 ) 10,821 30,047 564,473 Derivatives (Note 15) 2 341,473 ( 116,486 ) 224,987 ( 198,743 ) ( 22,926 ) 3,318 4,727 229,714 Reverse repos, stock borrowing and similar agreements classified as: 3 –  trading assets 29,152 ( 602 ) 28,550 ( 28,513 ) ( 34 ) 3 2,633 31,183 –  non-trading assets 365,922 ( 135,210 ) 230,712 ( 230,240 ) ( 80 ) 392 21,653 252,365 Loans and advances to customers 4 34,173 ( 15,792 ) 18,381 ( 15,613 ) ( 93 ) 2,675 2 18,383 At 31 Dec 2023 770,720 ( 268,090 ) 502,630 ( 473,109 ) ( 23,133 ) 6,388 29,015 531,645 Financial liabilities Derivatives (Note 15) 2 369,287 ( 112,746 ) 256,541 ( 221,232 ) ( 30,334 ) 4,975 7,907 264,448 Repos, stock lending and similar agreements classified as: 3 –  trading liabilities 18,482 ( 157 ) 18,325 ( 18,326 ) — ( 1 ) 6 18,331 –  non-trading liabilities 287,648 ( 154,613 ) 133,035 ( 131,719 ) ( 164 ) 1,152 47,845 180,880 Customer accounts 5 41,409 ( 16,540 ) 24,869 ( 15,313 ) ( 75 ) 9,481 17 24,886 At 31 Dec 2024 716,826 ( 284,056 ) 432,770 ( 386,590 ) ( 30,573 ) 15,607 55,775 488,545 Derivatives (Note 15) 2 344,799 ( 116,486 ) 228,313 ( 198,640 ) ( 23,748 ) 5,925 6,459 234,772 Repos, stock lending and similar agreements classified as: 3 –  trading liabilities 15,686 ( 172 ) 15,514 ( 15,453 ) — 61 6 15,520 –  non-trading liabilities 270,493 ( 135,640 ) 134,853 ( 134,095 ) ( 669 ) 89 37,247 172,100 Customer accounts 5 42,522 ( 15,792 ) 26,730 ( 15,613 ) ( 93 ) 11,024 13 26,743 At 31 Dec 2023 673,500 ( 268,090 ) 405,410 ( 363,801 ) ( 24,510 ) 17,099 43,725 449,135 1 These exposures continue to be secured by financial collateral, but we may not have sought or been able to obtain a legal opinion evidencing enforceability of the right of offset. 2  At 31 December 2024, the amount of cash margin received that had been offset against the gross derivatives assets was $ 5,303 m (2023: $ 5,105 m ). The amount of cash margin paid that had been offset against the gross derivatives liabilities was $ 5,614 m (2023: $ 7,142 m ). 3 For the amount of repos, reverse repos, stock lending, stock borrowing and similar agreements recognised on the balance sheet within ‘Trading assets’ of $ 25,197 m (2023: $ 31,183 m ) and ‘Trading liabilities’ of $ 18,331 m (2023: $ 15,520 m ), see the ‘Funding sources and uses’ table on page 239 . 4 At 31 December 2024, the total amount of ‘Loans and advances to customers’ was $ 930,658 m (2023: $ 938,535 m ), of which $ 18,042 m (2023: $ 18,381 m ) was subject to offsetting. 5 At 31 December 2024, the total amount of ‘Customer accounts’ was $ 1,654,955 m (2023: $ 1,611,647 m ), of which $ 24,869 m (2023: $ 26,730 m ) was subject to offsetting. 32 Called up share capital and other equity instruments Called up share capital and share premium HSBC Holdings ordinary shares of $ 0.50 each, issued and fully paid 2024 2023 Number $m Number $m At 1 Jan 19,262,728,193 9,631 20,293,607,410 10,147 Shares issued under HSBC employee share plans 10,283,430 5 10,778,479 5 Shares issued in lieu of dividends — — — — Less: shares repurchased and cancelled 1,326,061,041 663 716,384,289 358 Less: treasury shares cancelled — — 325,273,407 163 At 31 Dec 1 17,946,950,582 8,973 19,262,728,193 9,631 1 All HSBC Holdings ordinary shares in issue confer identical rights, including in respect of capital, dividends and voting. 446 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements HSBC Holdings share premium 2024 2023 $m $m At 31 Dec 14,810 14,738 Total called up share capital and share premium 2024 2023 $m $m At 31 Dec 23,783 24,369 HSBC Holdings non-cumulative preference share of £ 0.01 The one non-cumulative sterling preference share of £ 0.01 (‘sterling preference share’) has been in issue since 29 December 2010 and is held by a subsidiary of HSBC Holdings. Dividends are paid quarterly at the sole and absolute discretion of the Board. The sterling preference share carries no rights of conversion into ordinary shares of HSBC Holdings and no right to attend or vote at shareholder meetings of HSBC Holdings. These securities can be redeemed by HSBC Holdings at any time, subject to prior approval by the PRA. Other equity instruments HSBC Holdings has included two types of additional tier 1 capital securities in its tier 1 capital, including the contingent convertible securities described below. These are accounted for as equity because HSBC does not have an obligation to transfer cash or a variable number of its own ordinary shares to holders under any circumstances outside its control. See Note 29 for additional tier 1 securities accounted for as liabilities. Additional tier 1 capital – contingent convertible securities HSBC Holdings continues to issue contingent convertible securities that are included in its capital base as fully CRR II-compliant additional tier 1 capital securities on an end point basis. These securities are marketed principally and subsequently allotted to corporate investors and fund managers. The net proceeds of the issuances are typically used for HSBC Holdings’ general corporate purposes and to further strengthen its capital base to meet requirements under CRR II. These securities bear a fixed rate of interest until their initial call dates. After the initial call dates, if they are not redeemed, the securities will bear interest at rates fixed periodically in advance for five -year periods based on credit spreads, fixed at issuance, above prevailing market rates. Interest on the contingent convertible securities will be due and payable only at the sole discretion of HSBC Holdings, and HSBC Holdings has sole and absolute discretion at all times to cancel for any reason (in whole or part) any interest payment that would otherwise be payable on any payment date. Distributions will not be paid if they are prohibited under UK banking regulations or if the Group has insufficient reserves or fails to meet the solvency conditions defined in the securities’ terms. The contingent convertible securities are undated and are repayable at the option of HSBC Holdings in whole typically at the initial call date or on any fifth anniversary after this date. In addition, the securities are repayable at the option of HSBC in whole for certain regulatory or tax reasons. Any repayments require the prior consent of the PRA. These securities rank pari passu with HSBC Holdings’ sterling preference shares and therefore rank ahead of ordinary shares. The contingent convertible securities will be converted into fully paid ordinary shares of HSBC Holdings at a predetermined price, should HSBC’s consolidated non-transitional CET1 ratio fall below 7.0 % . Therefore, in accordance with the terms of the securities, if the non-transitional CET1 ratio breaches the 7.0 % trigger, the securities will convert into ordinary shares at fixed contractual conversion prices in the issuance currencies of the relevant securities, subject to anti-dilution adjustments. HSBC’s additional tier 1 capital – contingent convertible securities in issue which are accounted for in equity Original nominal amount (LCY) First call date 2024 2023 $m $m $ 2,250 m 6.375 % Perpetual Subordinated Contingent Convertible Securities 1 Sept 2024 — 2,250 $ 2,450 m 6.375 % Perpetual Subordinated Contingent Convertible Securities Mar 2025 2,450 2,450 $ 3,000 m 6.000 % Perpetual Subordinated Contingent Convertible Securities May 2027 3,000 3,000 $ 1,800 m 6.500 % Perpetual Subordinated Contingent Convertible Securities Mar 2028 1,800 1,800 $ 1,500 m 4.600 % Perpetual Subordinated Contingent Convertible Securities 2 Dec 2030 1,500 1,500 $ 1,000 m 4.000 % Perpetual Subordinated Contingent Convertible Securities 3 Mar 2026 1,000 1,000 $ 1,000 m 4.700 % Perpetual Subordinated Contingent Convertible Securities 4 Mar 2031 1,000 1,000 $ 2,000 m 8.000 % Perpetual Subordinated Contingent Convertible Securities 5 Mar 2028 1,980 1,980 € 1,250 m 4.750 % Perpetual Subordinated Contingent Convertible Securities Jul 2029 1,422 1,422 £ 1,000 m 5.875 % Perpetual Subordinated Contingent Convertible Securities Sept 2026 1,301 1,301 $ 1,350 m 6.875 % Perpetual Subordinated Contingent Convertible Securities 6 Sept 2029 1,337 — $ 1,150 m 6.950 % Perpetual Subordinated Contingent Convertible Securities 7 Mar 2034 1,138 — SGD1,500m 5.250 % Perpetual Subordinated Contingent Convertible Securities 8 Jun 2029 1,096 — At 31 Dec 19,024 17,703 1 This security was called by HSBC Holdings on 23 July 2024 and redeemed and cancelled on 17 September 2024. 2 This security was issued by HSBC Holdings on 17 December 2020. The first call period commences six months prior to reset date of 17 June 2031. 3 This security was issued by HSBC Holdings on 9 March 2021. The first call period commences six months prior to reset date of 9 September 2026. 4 This security was issued by HSBC Holdings on 9 March 2021. The first call period commences six months prior to reset date of 9 September 2031. 5 This security was issued by HSBC Holdings on 7 March 2023. The first call period commences six months prior to reset date of 7 September 2028. This security has been accounted for net of directly attributable transaction costs. 6 This security was issued by HSBC Holdings on 11 September 2024. The first call period commences six months prior to reset date of 11 March 2030. This security has been accounted for net of directly attributable transaction costs. 7 This security was issued by HSBC Holdings on 11 September 2024. The first call period commences six months prior to reset date of 11 September 2034. This security has been accounted for net of directly attributable transaction costs. 8 This security was issued by HSBC Holdings on 14 June 2024. The first call period commences six months prior to reset date of 14 December 2039. HSBC Holdings plc Annual Report on Form 20-F 447 Shares under option For details of the options outstanding to subscribe for HSBC Holdings ordinary shares under the HSBC Holdings Savings-Related Share Option Plan (UK), see Note 5 . Aggregate options outstanding under these plans 31 Dec 2024 31 Dec 2023 Number of HSBC Holdings ordinary shares Usual period of exercise Exercise price Number of HSBC Holdings ordinary shares Usual period of exercise Exercise price 75,335,399 2023 to 2030 £ 2.6270 –£ 5.4490 83,993,678 2022 to 2029 £ 2.6270 – 5.4490 Maximum obligation to deliver HSBC Holdings ordinary shares At 31 December 2024, the maximum obligation to deliver HSBC Holdings ordinary shares under all of the above option arrangements and the HSBC International Employee Share Purchase Plan, together with long-term incentive awards and deferred share awards granted under the HSBC Share Plan 2011, was 209,683,768 (2023: 208,539,316 ). The total number of shares at 31 December 2024 held by employee benefit trusts that may be used to satisfy such obligations to deliver HSBC Holdings ordinary shares was 9,305,925 (2023: 20,902,218 ). 33 Contingent liabilities, contractual commitments and guarantees HSBC HSBC Holdings 1 2024 2023 2024 2023 $m $m $m $m Guarantees and other contingent liabilities: –  financial guarantees 16,998 17,009 — — –  performance and other guarantees 92,723 94,277 7,327 7,723 –  other contingent liabilities 298 636 — — At 31 Dec 110,019 111,922 7,327 7,723 Commitments: 2 –  documentary credits and short-term trade-related transactions 7,096 7,818 — — –  forward asset purchases and forward deposits placed 61,017 78,535 — — –  standby facilities, credit lines and other commitments to lend 793,465 810,797 — — At 31 Dec 861,578 897,150 — — 1 Guarantees by HSBC Holdings are in favour of other Group entities. These include contracts that provide protection against credit risk on a specified exposure but do not meet the definition of financial guarantees. 2 Includes $ 619,367 m of commitments at 31 December 2024 (31 December 2023: $ 661,015 m ), to which the impairment requirements in IFRS 9 are applied where HSBC has become party to an irrevocable commitment . The preceding table discloses the nominal principal amounts of off-balance sheet liabilities and commitments for the Group, which represent the maximum amounts at risk should the contracts be fully drawn upon and the clients default. As a significant portion of guarantees and commitments are expected to expire without being drawn upon, the total of the nominal principal amounts is not indicative of future liquidity requirements. The expected credit loss provision relating to guarantees and commitments under IFRS 9 is disclosed in Note 28 . The majority of the guarantees have a term of less than one year, while guarantees with terms of more than one year are subject to HSBC’s annual credit review process. Contingent liabilities arising from legal proceedings, regulatory and other matters against Group companies are excluded from this note but are disclosed in Notes 28 and 35 . Financial Services Compensation Scheme The Financial Services Compensation Scheme (‘FSCS’) provides compensation, up to certain limits, to eligible customers of financial services firms that are unable, or likely to be unable, to pay claims against them. The FSCS may impose a further levy on the Group to the extent the industry levies imposed to date are not sufficient to cover the compensation due to customers in any future possible collapse. The ultimate FSCS levy to the industry as a result of a collapse cannot be estimated reliably. It is dependent on various uncertain factors including the potential recovery of assets by the FSCS, changes in the level of protected products (including deposits and investments) and the population of FSCS members at the time. Associates HSBC’s share of associates’ contingent liabilities, contractual commitments and guarantees amounted to $ 74.5 bn at 31 December 2024 (2023: $ 69.9 bn ). No matters arose where HSBC was severally liable. 448 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements 34 Finance lease receivables HSBC leases a variety of assets to third parties under finance leases, including transport assets (such as aircraft), property and general plant and machinery. At the end of lease terms, assets may be sold to third parties or leased for further terms. Rentals are calculated to recover the cost of assets less their residual value, and earn finance income. The table below excludes finance lease receivables reclassified on the balance sheet to ‘Assets held for sale’ in accordance with IFRS 5. Net investment in finance leases of $ 1,595 m was reclassified to ‘Assets held for sale’ in 2023 as a result of the sale of our banking business in Canada. There was no net investment in finance leases classified as held-for-sale at 31 December 2024. 2024 2023 Total future minimum payments Unearned finance income Present value Total future minimum payments Unearned finance income Present value $m $m $m $m $m $m Lease receivables: No later than one year 2,331 ( 295 ) 2,036 2,355 ( 308 ) 2,047 One to two years 1,787 ( 226 ) 1,561 1,954 ( 249 ) 1,705 Two to three years 1,290 ( 171 ) 1,119 1,380 ( 189 ) 1,191 Three to four years 839 ( 134 ) 705 930 ( 153 ) 777 Four to five years 766 ( 147 ) 619 593 ( 132 ) 461 Later than one year and no later than five years 4,682 ( 678 ) 4,004 4,857 ( 723 ) 4,134 Later than five years 3,518 ( 639 ) 2,879 4,116 ( 838 ) 3,278 At 31 Dec 10,531 ( 1,612 ) 8,919 11,328 ( 1,869 ) 9,459 35 Legal proceedings and regulatory matters HSBC is party to legal proceedings and regulatory matters in a number of jurisdictions arising out of its normal business operations. Apart from the matters described below, HSBC considers that none of these matters are material. The recognition of provisions is determined in accordance with the accounting policies set out in Note 1 . While the outcomes of legal proceedings and regulatory matters are inherently uncertain, management believes that, based on the information available to it, appropriate provisions have been made in respect of these matters as at 31 December 2024 (see Note 28 ). Where an individual provision is material, the fact that a provision has been made is stated and quantified, except to the extent that doing so would be seriously prejudicial. Any provision recognised does not constitute an admission of wrongdoing or legal liability. It is not practicable to provide an aggregate estimate of potential liability for our legal proceedings and regulatory matters as a class of contingent liabilities. Bernard L. Madoff Investment Securities LLC Various non-US HSBC companies provided custodial, administration and similar services to a number of funds incorporated outside the US whose assets were invested with Bernard L. Madoff Investment Securities LLC (‘Madoff Securities’). Based on information provided by Madoff Securities as at 30 November 2008, the purported aggregate value of these funds was $ 8.4 b n, including fictitious profits reported by Madoff. Based on information available to HSBC, the funds’ actual transfers to Madoff Securities minus their actual withdrawals from Madoff Securities during the time HSBC serviced the funds are estimated to have totalled approximately $ 4 b n. Various HSBC companies have been named as defendants in lawsuits arising out of Madoff Securities’ fraud. Trustee litigation: The Madoff Securities trustee (the ‘Trustee’) has brought lawsuits in the US against various HSBC companies and others seeking recovery of alleged transfers from Madoff Securities to the HSBC companies in the amount of $ 543 m (plus interest), and these lawsuits remain pending in the US Bankruptcy Court for the Southern District of New York. The Trustee has filed a claim against various HSBC companies in the High Court of England and Wales seeking recovery of alleged transfers from Madoff Securities to the HSBC companies. The claim has not yet been served and the amount claimed has not been specified. Fairfield Funds litigation : Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited (together, the ‘Fairfield Funds’) (in liquidation) have brought lawsuits in the US against various HSBC companies and others seeking recovery of alleged transfers from the Fairfield Funds to the HSBC companies (that acted as nominees for clients) in the amount of $ 382 m (plus interest). Fairfield Funds’ claims against most of the HSBC companies have been dismissed, but remain pending on appeal before the US Court of Appeals for the Second Circuit. Fairfield Funds’ claims against HSBC Private Bank (Suisse) SA (‘PBRS’) and HSBC Securities Services Luxembourg (‘HSSL’) have not been dismissed and are ongoing before the US Bankruptcy Court for the Southern District of New York. PBRS and HSSL have appealed the decision not to dismiss them and these appeals are pending before the US Court of Appeals for the Second Circuit. Herald Fund SPC (‘Herald’) litigation: HSSL and HSBC Bank plc are defending an action brought by Herald (in liquidation) before the Luxembourg District Court seeking restitution of securities and cash in the amount of $ 2.5 bn (plus interest), or damages in the amount of $ 5.6 b n (plus interest). In 2013, the Luxembourg District Court dismissed Herald’s securities restitution claim and stayed the cash restitution and damages claims. In December 2024, the Luxembourg Court of Appeal reversed the Luxembourg District Court’s dismissal and determined that Herald’s claims for restitution of securities and cash were founded in principle. HSSL has appealed this decision. Herald’s claim against HSBC Bank plc is pending. Alpha Prime Fund Limited (‘Alpha Prime’) litigation : Various HSBC companies are defending a number of actions brought by Alpha Prime in the Luxembourg District Court seeking damages for alleged breach of contract and negligence in the amount of $ 1.16 b n (plus interest). These matters are currently pending before the Luxembourg District Court. In November 2024, Alpha Prime served various HSBC companies with a lawsuit filed in the Bermuda Supreme Court seeking damages for unspecified amounts for alleged breach of contract and negligence. This claim is currently stayed. HSBC Holdings plc Annual Report on Form 20-F 449 Senator Fund SPC (‘Senator’) litigation : HSSL and the Luxembourg branch of HSBC Bank plc are defending a number of actions brought by Senator before the Luxembourg District Court seeking restitution of securities in the amount of $ 625 m (plus interest), or damages in the amount of $ 188 m (plus interest). These matters are currently pending before the Luxembourg District Court. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. US Anti-Terrorism Act litigation Since November 2014, a number of lawsuits have been filed in federal courts in the US against various HSBC companies and others on behalf of plaintiffs who are, or are related to, alleged victims of terrorist attacks in the Middle East. In each case, it is alleged that the defendants aided and abetted the unlawful conduct of various sanctioned parties in violation of the US Anti-Terrorism Act, or provided banking services to customers alleged to have connections to terrorism financing. Seven actions, which seek damages for unspecified amounts, remain pending and HSBC’s motions to dismiss have been granted in three of these cases. These dismissals are subject to appeals and/or the plaintiffs re- pleading their claims. The four other actions are at an early stage. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. Interbank offered rates investigation and litigation Euro interest rate derivatives: In December 2016, the European Commission (‘EC’) issued a decision finding that HSBC, among other banks, engaged in anti-competitive practices in connection with the pricing of euro interest rate derivatives, and the EC imposed a fine on HSBC based on a one -month infringement in 2007. The fine was annulled in 2019 and a lower fine was imposed in 2021, which has been paid. In January 2023, the European Court of Justice dismissed an appeal by HSBC and upheld the EC’s findings on HSBC’s liability. In November 2024, the General Court of the European Union rejected a separate appeal by HSBC concerning the amount of the fine. This matter is now closed. US dollar Libor: Beginning in 2011, HSBC and other panel banks have been named as defendants in a number of individual and putative class action lawsuits filed in federal and state courts in the US with respect to the setting of US dollar Libor. The complaints assert claims under various US federal and state laws, including antitrust and racketeering laws and the Commodity Exchange Act (‘US CEA’). HSBC has concluded class settlements with five groups of plaintiffs, and several class action lawsuits brought by other groups of plaintiffs have been voluntarily dismissed. Two individual US dollar Libor-related actions seeking damages from HSBC for unspecified amounts remain pending. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of the pending matters, including the timing or any possible impact on HSBC, which could be significant. Foreign exchange-related investigations and litigation In December 2016, Brazil’s Administrative Council of Economic Defense initiated an investigation into the onshore foreign exchange market and identified a number of banks, including HSBC, as subjects of its investigation, which remains ongoing. Lawsuits alleging foreign exchange- related misconduct remain pending against HSBC and other banks in courts in Brazil. Since 2017, HSBC Bank plc, among other financial institutions, has been defending a complaint filed by the Competition Commission of South Africa before the South African Competition Tribunal for alleged anti-competitive behaviour in the South African foreign exchange market. In 2020, a revised complaint was filed which also named HSBC Bank USA N.A. (‘HSBC Bank USA’) as a defendant. In January 2024, the South African Competition Appeal Court dismissed HSBC Bank USA from the revised complaint but denied HSBC Bank plc’s application to dismiss. Both the Competition Commission and HSBC Bank plc have appealed to the Constitutional Court of South Africa. HSBC Bank plc and HSBC Holdings have reached a settlement with plaintiffs in Israel to resolve a class action filed in the local courts alleging foreign exchange-related misconduct. The settlement remains subject to court approval. In February 2024, HSBC Bank plc and HSBC Holdings were joined to an existing claim brought in the UK Competition Appeals Tribunal against various other banks alleging historical anti-competitive behaviour in the foreign exchange market and seeking approximately £ 3 b n in damages from all the defendants. This matter is at an early stage. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. Precious metals fix-related litigation US litigation: HSBC and other members of The London Silver Market Fixing Limited are defending a class action pending in the US District Court for the Southern District of New York alleging that, from January 2007 to December 2013, the defendants conspired to manipulate the price of silver and silver derivatives for their collective benefit in violation of US antitrust laws, the US CEA and New York state law. In May 2023, this action, which seeks damages for unspecified amounts, was dismissed but remains pending on appeal. HSBC and other members of The London Platinum and Palladium Fixing Company Limited have been defending a class action in the US District Court for the Southern District of New York alleging that, from January 2008 to November 2014, the defendants conspired to manipulate the price of platinum group metals and related financial products for their collective benefit in violation of US antitrust laws and the US CEA. In January 2025, the court approved a settlement reached with the plaintiffs to resolve this action. This matter is now closed. Canada litigation: HSBC and other financial institutions are defending putative class actions filed in the Ontario and Quebec Superior Courts of Justice alleging that the defendants conspired to manipulate the price of silver, gold and related derivatives in violation of the Canadian Competition Act and common law. These actions each seek CA $ 1 b n in damages plus CA $ 250 m in punitive damages. Two of the actions are proceeding and the others have been stayed. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of the pending matters, including the timing or any possible impact on HSBC, which could be significant. 450 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Tax-related investigations Since 2023, the French National Financial Prosecutor has been investigating a number of banks, including HSBC Continental Europe and the Paris branch of HSBC Bank plc, in connection with alleged tax fraud related to the dividend withholding tax treatment of certain trading activities. HSBC Bank plc and the German branch of HSBC Continental Europe also continue to cooperate with investigations by the German public prosecutor into numerous financial institutions and their employees, in connection with the dividend withholding tax treatment of certain trading activities. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. Gilts trading investigation and litigation Since 2018, the UK Competition and Markets Authority has been investigating HSBC and four other banks for suspected anti-competitive conduct in relation to the historical trading of gilts and related derivatives. This matter is nearing conclusion. The impact on HSBC is not expected to be significant. In June 2023, HSBC Bank plc and HSBC Securities (USA) Inc., among other banks, were named as defendants in a putative class action filed in the US District Court for the Southern District of New York by plaintiffs alleging anti-competitive conduct in the gilts market and seeking damages for unspecified amounts. Certain of the defendants, including HSBC Bank plc and HSBC Securities (USA) Inc., have reached a settlement with the plaintiffs to resolve this matter. The settlement remains subject to court approval. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant. Korean short selling indictment In March 2024, the Korean Prosecutors’ Office issued a criminal indictment against The Hongkong and Shanghai Banking Corporation Limited (‘HBAP’) and three current and former employees for breaching short selling rules under the Financial Investment Services and Capital Markets Act in connection with trades carried out between August 2021 and December 2021. In February 2025, the Korean court acquitted HBAP of all charges. The Korean Prosecutors’ Office has the right to appeal this decision. Proceedings against the individual defendants have been suspended. First Citizens litigation In May 2023, First-Citizens Bank & Trust Company (‘First Citizens’) brought a lawsuit in the US District Court for the Northern District of California against various HSBC companies and seven US-based HSBC employees who had previously worked for Silicon Valley Bank (‘SVB’). The lawsuit seeks $ 1 b n in damages and alleges, among other things, that the various HSBC companies conspired with the individual defendants to solicit employees from First Citizens and that the individual defendants took confidential information belonging to SVB and/or First Citizens. In July 2024, the court dismissed several of First Citizens’ claims and also dismissed certain defendants for lack of jurisdiction, but allowed limited discovery into whether some of these defendants may be subject to jurisdiction. The remaining claims are proceeding against certain defendants. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant. US mortgage securitisation litigation Beginning in 2014, a number of lawsuits were filed in various state and federal courts in the US against HSBC Bank USA, as a trustee of more than 280 mortgage securitisation trusts, seeking unspecified damages for losses in collateral value allegedly sustained by the trusts. Nearly all of these lawsuits have either been settled or dismissed; one action remains pending in a New York state court. HSBC Bank USA and certain of its affiliates continue to defend a mortgage loan repurchase action seeking unspecified damages and specific performance brought by the trustee of a mortgage securitisation trust in New York state court. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of these matters, including the timing or any possible impact on HSBC, which could be significant. Mexican government bond litigation HSBC Mexico S.A. and other banks are named as defendants in a consolidated putative class action pending in the US District Court for the Southern District of New York alleging anti-competitive conduct in the Mexican government bond market between 2010 and 2014 and seeking unspecified damages. In January 2025, the court denied the defendants’ motion to dismiss the plaintiffs’ third amended complaint, and this action is proceeding. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant. Other regulatory investigations, reviews and litigation HSBC Holdings and/or certain of its affiliates are also subject to a number of other enquiries and examinations, requests for information, investigations and reviews by various tax authorities, regulators, competition and law enforcement authorities, as well as legal proceedings including litigation, arbitration and other contentious proceedings, in connection with various matters arising out of their businesses and operations. At the present time, HSBC does not expect the ultimate resolution of any of these matters to be material to the Group’s financial position; however, given the uncertainties involved in legal proceedings and regulatory matters, there can be no assurance regarding the eventual outcome of a particular matter or matters. HSBC Holdings plc Annual Report on Form 20-F 451 36 Related party transactions Related parties of the Group and HSBC Holdings include subsidiaries, associates, joint ventures, post-employment benefit plans for HSBC employees, Key Management Personnel (‘KMP’) as defined by IAS 24, close family members of KMP and entities that are controlled or jointly controlled by KMP or their close family members. KMP are defined as those persons having authority and responsibility for planning, directing and controlling the activities of HSBC Holdings. These individuals also constitute ‘senior management’ for the purposes of the Hong Kong Listing Rules. In applying IAS 24, it was determined that for this financial reporting period KMP included Directors, former Directors and senior management listed on pages 267 to 273 except for the roles of Group Chief Legal Officer, Group Head of Internal Audit, Group Chief Human Resources Officer, Group Chief Sustainability Officer, Group Chief Communications and Brand Officer, and Group Chief People & Governance Officer who do not meet the criteria for KMP as provided for in the standard. Particulars of transactions with related parties are tabulated below. The disclosure of the year-end balance and the highest amounts outstanding during the year is considered to be the most meaningful information to represent the amount of the transactions and outstanding balances during the year. Key Management Personnel Details of Directors’ remuneration and interests in shares are disclosed in the ‘Directors’ remuneration report’ on pages 309 to 348 . IAS 24 ‘Related Party Disclosures’ requires the following additional information for key management compensation. Compensation of Key Management Personnel 2024 2023 2022 $m $m $m Short-term employee benefits 53 51 52 Post-employment benefits 1 1 1 Other long-term employee benefits 12 10 8 Share-based payments 29 29 26 Year ended 31 Dec 95 91 87 Shareholdings, options and other securities of Key Management Personnel 2024 2023 (000s) (000s) Number of options held over HSBC Holdings ordinary shares under employee share plans 20 32 Number of HSBC Holdings ordinary shares held beneficially and non-beneficially 17,455 20,409 Number of other HSBC securities held 228 228 At 31 Dec 17,703 20,669 Advances and credits, guarantees and deposit balances during the year with Key Management Personnel 2024 2023 Balance at 31 Dec Highest amounts outstanding during year Balance at 31 Dec Highest amounts outstanding during year $m $m $m $m Key Management Personnel Advances and credits 1 9 12 11 16 Deposits 78 191 60 130 1 Advances and credits entered into by subsidiaries of HSBC Holdings plc during 2024 with Directors and former Directors, disclosed pursuant to section 413 of the Companies Act 2006, totalled $ 1.3 m ( 2023 : $ 2.6 m ) . Unless previously disclosed, there were no connected transactions during the reporting period that fell outside the exemptions provided by the Companies Act 2006, the UK Financial Conduct Authority’s Listing Rules and the Rules Governing The Listing of Securities on The Stock Exchange of Hong Kong Limited. The transactions conducted were in the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with parties of a similar standing or, where applicable, with other employees. These transactions did not involve more than the normal risk of repayment or present other unfavourable features. Associates and joint ventures The Group provides certain banking and financial services to associates and joint ventures including loans, overdrafts, interest and non-interest bearing deposits and current accounts. Details of the interests in associates and joint ventures are given in Note 18 . Transactions and balances during the year with associates and joint ventures 2024 2023 Highest balance during the year Balance at 31 Dec Highest balance during the year Balance at 31 Dec $m $m $m $m Unsubordinated amounts due from joint ventures 104 72 98 94 Unsubordinated amounts due from associates 8,097 5,011 7,907 5,910 Amounts due to associates 2,992 1,844 3,002 1,668 Amounts due to joint ventures 101 85 95 61 Fair value of derivative assets with associates 919 763 1,514 795 Fair value of derivative liabilities with associates 3,718 2,641 4,388 2,962 Guarantees and commitments 569 577 503 331 The above outstanding balances arose in the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties . 452 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Post-employment benefit plans At 31 December 2024 , $ 3.4 bn ( 2023 : $ 3.1 bn ) of HSBC post-employment benefit plan assets were under management by HSBC companies, earning management fees of $ 14 m in 2024 ( 2023 : $ 13 m ). At 31 December 2024 , HSBC’s post-employment benefit plans had placed deposits of $ 395 m ( 2023 : $ 402 m ) with its banking subsidiaries, earning interest payable to the schemes of $ 2 m ( 2023 : $ 2 m ). The above outstanding balances arose from the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties. The combined HSBC Bank (UK) Pension Scheme enters into swap transactions with HSBC to manage inflation and interest rate sensitivity of its liabilities and selected assets. At 31 December 2024 , the gross notional value of the swaps was $ 6.4 bn ( 2023 : $ 7.1 bn ). These swaps had a positive fair value to the scheme of $ 0.4 bn ( 2023 : $ 0.5 bn ); and HSBC had delivered collateral of $ 0.4 bn ( 2023 : $ 0.6 bn ) to the scheme in respect of these arrangements. All swaps were executed at prevailing market rates and within standard market bid/offer spreads. HSBC Holdings Details of HSBC Holdings’ subsidiaries are shown in Note 38 . Transactions and balances during the year with subsidiaries 2024 2023 Highest balance during the year Balance at 31 Dec Highest balance during the year Balance at 31 Dec $m $m $m $m Assets Cash and balances with HSBC undertakings 9,342 2,548 8,396 7,029 Financial assets with HSBC undertakings designated and otherwise mandatorily measured at fair value 66,030 61,286 60,309 59,879 Derivatives 3,391 3,054 4,010 3,344 Loans and advances to HSBC undertakings 37,677 37,677 28,213 27,354 Prepayments, accrued income and other assets 7,108 4,216 7,417 5,145 Investments in subsidiaries 160,805 152,337 167,542 159,478 Total related party assets at 31 Dec 284,353 261,118 275,887 262,229 Liabilities Amounts owed to HSBC undertakings 231 231 179 168 Derivatives 7,944 5,340 9,309 6,090 Accruals, deferred income and other liabilities 399 194 505 341 Subordinated liabilities 1,202 — 927 913 Total related party liabilities at 31 Dec 9,776 5,765 10,920 7,512 Guarantees and commitments 7,440 7,327 7,723 7,723 The above outstanding balances arose in the ordinary course of business and on substantially the same terms, including interest rates and security, as for comparable transactions with third-party counterparties. Some employees of HSBC Holdings are members of the HSBC Bank (UK) Pension Scheme, which is sponsored by a separate Group company. HSBC Holdings incurs a charge for these employees equal to the contributions paid into the scheme on their behalf. Disclosure in relation to the scheme is made in Note 5 . 37 Events after the balance sheet date A fourth interim dividend for 2024 of $ 0.36 per ordinary share (a distribution of approximately $ 6.4 b n was approved by the Directors after 31 December 2024. On 19 February 2025, HSBC Holdings announced a share buy-back to purchase its ordinary shares up to a maximum consideration of $ 2.0 bn , which is expected to commence shortly and complete by our first quarter 2025 results announcement. On 30 January 2025, HSBC Holdings called $ 1,750 m 2.999 % fixed rate/floating rate senior unsecured and $ 500 m floating rate senior unsecured securities. These securities are expected to be redeemed and cancelled on 10 March 2025. On 7 February 2025, HSBC Holdings called $ 2,450 m 6.375 % perpetual subordinated contingent convertible securities which are expected to be redeemed and cancelled on 30 March 2025. The accounts were approved by the Board of Directors on 19 February 2025 and authorised for issue . 38 HSBC Holdings’ subsidiaries, joint ventures and associates In accordance with section 409 of the Companies Act 2006 a list of HSBC Holdings plc subsidiaries, joint ventures and associates, the registered office addresses and the effective percentages of equity owned at 31 December 2024 are disclosed below. Unless otherwise stated, the share capital comprises ordinary or common shares that are held by Group subsidiaries. The ownership percentage is provided for each undertaking. The undertakings below are consolidated by HSBC unless otherwise indicated. HSBC Holdings plc Annual Report on Form 20-F 453 Subsidiaries Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes AI Nominees (UK) One Limited 100.00 12 AI Nominees (UK) Two Limited 100.00 12 Almacenadora Banpacifico S.A. (In Liquidation) N/A 1, 13 Assetfinance December (F) Limited 100.00 14 Assetfinance December (H) Limited 100.00 12 Assetfinance December (P) Limited 100.00 12 Assetfinance December (R) Limited 100.00 12 Assetfinance June (A) Limited 100.00 12 Assetfinance June (D) Limited 100.00 14 Assetfinance March (B) Limited 100.00 15 Assetfinance March (D) Limited 100.00 14 Assetfinance March (F) Limited 100.00 12 Assetfinance September (F) Limited 100.00 12 Assetfinance September (G) Limited 100.00 14 B&Q Financial Services Limited 100.00 12 Banco HSBC S.A. 100.00 16 Banco Nominees (Guernsey) Limited 100.00 17 Banco Nominees 2 (Guernsey) Limited 100.00 17 Banco Nominees Limited 100.00 18 Beau Soleil Limited Partnership N/A 1, 19 Beijing HSBC Real Estate Leasing Company Limited N/A 1, 20 Beijing Miyun HSBC Rural Bank Company Limited 100.00 11, 21 BentallGreenOak China Real Estate Investments, L.P. N/A 1, 22 Canada Crescent Nominees (UK) Limited (In Liquidation) 100.00 23 Canada Square Nominees (UK) Limited 100.00 12 Capco/Cove, Inc. 100.00 24 Card-Flo #3, Inc. 100.00 25 CC&H Holdings LLC N/A 1, 26 CCF & Partners Asset Management Limited 100.00 ( 99.99 ) 12 Charterhouse Administrators (D.T.) Limited 100.00 ( 99.99 ) 12 Charterhouse Management Services Limited 100.00 ( 99.99 ) 12 Charterhouse Pensions Limited 100.00 12 Chongqing Dazu HSBC Rural Bank Company Limited 100.00 11, 28 Chongqing Fengdu HSBC Rural Bank Company Limited 100.00 11, 29 Chongqing Rongchang HSBC Rural Bank Company Limited 100.00 11, 30 CI 10 LP Inc N/A 107 COIF Nominees Limited N/A 1, 12 Corsair IV Financial Services Capital Partners - B L.P N/A 1, 31 D9 LP Inc N/A 107 Dalian Pulandian HSBC Rural Bank Company Limited 100.00 11, 32 Decision One Mortgage Company, LLC N/A 1, 33 Dempar 1 100.00 ( 99.99 ) 5, 34 Desarrollo Turistico, S.A. de C.V. (In Liquidation) 100.00 ( 99.99 ) 13 Electronic Data Process México, S.A. de C.V. 100.00 35 ERISA Actions Europe N°2 N/A 1, 175 ERISA Actions Grandes Valeurs N/A 1, 175 ERISA Opportunities N/A 1, 175 Eton Corporate Services Limited 100.00 17 Flandres Contentieux S.A. 100.00 ( 99.99 ) 5, 34 Foncière Elysées 100.00 ( 99.99 ) 5, 34 Fujian Yongan HSBC Rural Bank Company Limited 100.00 11, 36 Fulcher Enterprises Company Limited 100.00 ( 63.12 ) 37 Fundacion HSBC, A.C. 100.00 ( 99.99 ) 2, 9, 13 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes Giller Ltd. 100.00 24 GPIF Co-Investment, LLC N/A 1, 25 Griffin International Limited 100.00 12 Grupo Financiero HSBC, S. A. de C. V. 99.99 13 Guangdong Enping HSBC Rural Bank Company Limited 100.00 11, 38 Guangzhou HSBC Real Estate Company Ltd 100.00 11, 39 H5 LP Inc N/A 107 H8 LP Inc N/A 107 H9 LP Inc N/A 107 Hang Seng (Nominee) Limited 100.00 ( 63.12 ) 37 Hang Seng Bank (China) Limited 100.00 ( 63.12 ) 11, 40 Hang Seng Bank (Trustee) Limited 100.00 ( 63.12 ) 37 Hang Seng Bank Limited 63.12 37 Hang Seng Bullion Company Limited 100.00 ( 63.12 ) 37 Hang Seng Credit Limited 100.00 ( 63.12 ) 37 Hang Seng Data Services Limited 100.00 ( 63.12 ) 37 Hang Seng Finance Limited 100.00 ( 63.12 ) 37 Hang Seng Financial Information Limited 100.00 ( 63.12 ) 37 Hang Seng Indexes (Netherlands) B.V. N/A 1, 41 Hang Seng Indexes Company Limited 100.00 ( 63.12 ) 37 Hang Seng Insurance Company Limited 100.00 ( 63.12 ) 37 Hang Seng Investment Management Limited 100.00 ( 63.12 ) 37 Hang Seng Investment Services Limited 100.00 ( 63.12 ) 37 Hang Seng Japan Topix 100 Index ETF 66.43 19 Hang Seng Qianhai Fund Management Company Limited 70.00 ( 43.86 ) 11, 42 Hang Seng Real Estate Management Limited 100.00 ( 63.12 ) 37 Hang Seng Securities Limited 100.00 ( 63.12 ) 37 Hang Seng Security Management Limited 100.00 ( 63.12 ) 37 HASE Wealth Limited N/A 137 Haseba Investment Company Limited 100.00 ( 63.12 ) 37 HBPH Corporation (In Dissolution) 99.99 43 HFC Bank Limited (In Liquidation) 100.00 44 High Time Investments Limited 100.00 ( 63.12 ) 37 HLF 100.00 ( 99.99 ) 5, 34 Honey Blue Enterprises Limited (亨京企業有 限公司) 100.00 19 Honey Green Enterprises Ltd. 100.00 45 Honey Grey Enterprises Limited (亨穗企業有 限公司) 100.00 19 Honey Silver Enterprises Limited 100.00 19 Household International Europe Limited (In Liquidation) 100.00 44 Household Pooling Corporation 100.00 47 Housing (USA) LLP N/A 1, 25 HSBC (BGF) Investments Limited 100.00 12 HSBC (General Partner) Limited 100.00 3, 48 HSBC (Guernsey) GP PCC Limited 100.00 17 HSBC (Kuala Lumpur) Nominees Sdn Bhd 100.00 49 HSBC (Malaysia) Trustee Berhad 100.00 50 HSBC (Singapore) Nominees Pte Ltd 100.00 51 HSBC Actions Europe 50.66 175 HSBC Agency (India) Private Limited 100.00 52 HSBC Alternative Investments Limited 100.00 12 HSBC Amanah Malaysia Berhad 100.00 49 HSBC Americas Corporation (Delaware) 100.00 25 HSBC Asia Holdings B.V. 100.00 12 HSBC Asia Holdings Limited 100.00 3, 19 HSBC Asia Pacific Holdings (UK) Limited 100.00 6, 12 HSBC Asset Finance (UK) Limited 100.00 12 HSBC Asset Finance M.O.G. Holdings (UK) Limited 100.00 12 HSBC Asset Management (Fund Services UK) Limited 100.00 12 454 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Asset Management (India) Private Limited 99.99 53 HSBC Asset Management (Japan) Limited 100.00 54 HSBC Assurances Vie (France) 100.00 ( 99.99 ) 5, 55 HSBC Australia Holdings Pty Limited 100.00 6, 56 HSBC BANK (CHILE) 100.00 57 HSBC Bank (China) Company Limited 100.00 11, 58 HSBC Bank (General Partner) Limited 100.00 48 HSBC Bank (Mauritius) Limited 100.00 59 HSBC Bank (Singapore) Limited 100.00 51 HSBC Bank (Taiwan) Limited 100.00 60 HSBC Bank (Uruguay) S.A. 100.00 61 HSBC Bank (Vietnam) Ltd. 100.00 62 HSBC Bank A.S. 100.00 63 HSBC Bank Australia Limited 100.00 56 HSBC Bank Bermuda Limited 100.00 18 HSBC Bank Capital Funding (Sterling 1) LP N/A 1, 48 HSBC Bank Egypt S.A.E 94.54 64 HSBC Bank Malaysia Berhad 100.00 4, 49 HSBC Bank Malta p.l.c. 70.03 65 HSBC Bank Middle East Limited 100.00 4, 66 HSBC Bank Middle East Limited Representative Office Morocco SARL (In Liquidation) 100.00 67 HSBC Bank Pension Trust (UK) Limited 100.00 12 HSBC Bank plc 100.00 3, 4, 12 HSBC Bank USA, National Association 100.00 4, 68 HSBC Branch Nominee (UK) Limited 100.00 14 HSBC Brasil Holding S.A. 100.00 16 HSBC Broking Forex (Asia) Limited 100.00 19 HSBC Broking Futures (Asia) Limited 100.00 19 HSBC Broking Futures (Hong Kong) Limited 100.00 19 HSBC Broking Securities (Asia) Limited 100.00 19 HSBC Broking Securities (Hong Kong) Limited 100.00 19 HSBC Broking Services (Asia) Limited 100.00 19 HSBC Capital (USA), Inc. 100.00 25 HSBC Capital Funding (Dollar 1) L.P. N/A 1, 48 HSBC Card Services Inc. 100.00 25 HSBC Casa de Bolsa, S.A. de C.V., Grupo Financiero HSBC 100.00 ( 99.99 ) 13 HSBC Cayman Limited 100.00 69 HSBC Cayman Services Limited 100.00 69 HSBC Client Holdings Nominee (UK) Limited 100.00 12 HSBC Client Nominee (Jersey) Limited 100.00 2, 70 HSBC Climate Tech Venture Capital Fund SCSp 87.15 177 HSBC Columbia Funding, LLC N/A 125 HSBC Continental Europe 99.99 5, 34 HSBC Corporate Advisory (Malaysia) Sdn Bhd 100.00 49 HSBC Corporate Finance (Hong Kong) Limited 100.00 19 HSBC Corporate Secretary (UK) Limited 100.00 3, 12 HSBC Corporate Services (Shanghai) Co., Ltd. N/A 1, 71 HSBC Corporate Trustee Company (UK) Limited 100.00 12 HSBC Custody Nominees (Australia) Limited 100.00 56 HSBC Custody Services (Guernsey) Limited 100.00 17 HSBC Daisy Investments (Mauritius) Limited 100.00 72 HSBC Diversified Loan Fund General Partner Sarl N/A 1, 73 HSBC Diversified Loan SCSp-RAIF N/A 73 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Electronic Data Processing (Guangdong) Limited 100.00 11, 74 HSBC Electronic Data Processing (Malaysia) Sdn Bhd 100.00 75 HSBC Electronic Data Processing (Philippines), Inc. 99.99 76 HSBC Electronic Data Processing India Private Limited 100.00 77 HSBC Electronic Data Processing Lanka (Private) Limited 100.00 78 HSBC Electronic Data Service Delivery (Egypt) S.A.E 100.00 79 HSBC Equipment Finance (UK) Limited 100.00 14 HSBC Equity (UK) Limited 100.00 12 HSBC EURO Protect 80+ 78.06 55 HSBC Europe B.V. 100.00 12 HSBC European Senior Direct Lending Fund 2023 RAIF SICAV-S.A. 43.00 91 HSBC Executor & Trustee Company (UK) Limited 100.00 14 HSBC Factoring (France) 100.00 ( 99.99 ) 5, 34 HSBC Finance (Netherlands) 100.00 3, 12 HSBC Finance Corporation 100.00 25 HSBC Finance Limited 100.00 12 HSBC Finance Transformation (UK) Limited 100.00 12 HSBC Financial Advisors Singapore Pte. Ltd. 100.00 2, 51 HSBC Financial Services (Lebanon) S.A.L 99.83 80 HSBC Financial Technology Venture Capital Fund SCSp 100.00 177 HSBC FinTech Services (Shanghai) Company Limited N/A 1, 2, 81 HSBC Global Asset Management (Bermuda) Limited 100.00 4, 18 HSBC Global Asset Management (Deutschland) GmbH 100.00 ( 99.99 ) 7, 82 HSBC Global Asset Management (France) 100.00 ( 99.99 ) 5, 55 HSBC Global Asset Management (Hong Kong) Limited 100.00 83 HSBC Global Asset Management (Malta) Limited 100.00 ( 70.03 ) 84 HSBC Global Asset Management (México), S.A. de C.V., Sociedad Operadora de Fondos de Inversión, Grupo Financiero HSBC 100.00 ( 99.99 ) 13 HSBC Global Asset Management (Singapore) Limited 100.00 51 HSBC Global Asset Management (Switzerland) AG 100.00 5, 171 HSBC Global Asset Management (Taiwan) Limited 100.00 86 HSBC Global Asset Management (UK) Limited 100.00 12 HSBC Global Asset Management (USA) Inc. 100.00 87 HSBC Global Asset Management Holdings (Bahamas) Limited 100.00 88 HSBC Global Asset Management Limited 100.00 3, 12 HSBC Global Custody Nominee (UK) Limited 100.00 12 HSBC Global Custody Proprietary Nominee (UK) Limited 100.00 12 HSBC Global Funds ICAV - Digital Leaders Equity Fund 100.00 27 HSBC Global Funds ICAV - Euro Lower Carbon Government 10+ Year Bond UCITS ETF 100.00 27 HSBC Global Funds ICAV - Euro Lower Carbon Government 1-3 Year Bond UCITS ETF 100.00 27 HSBC Global Funds ICAV - Global Aggregate Bond ESG UCITS ETF 100.00 27 HSBC Holdings plc Annual Report on Form 20-F 455 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Global Funds ICAV - Global Equity Index Fund -ACEUR N/A 1, 176 HSBC Global Funds ICAV - Japan Equity Index Fund 99.77 105 HSBC Global Infrastructure Debt Fund Feeder SCA SICAV-RAIF- Global Infrastructure Debt EUR N/A 1, 91 HSBC GLOBAL INVESTMENT FUNDS - ASIA ESG BOND 93.03 129 HSBC Global Investment Funds – ESG Short Duration Credit Bond 74.22 129 HSBC GLOBAL INVESTMENT FUNDS - GLOBAL EMERGING MARKETS EQUITY 56.47 129 HSBC Global Investment Funds - Strategic Duration and Income Bond 100.00 129 HSBC Global Multi-asset Seeding course (Stable Type) 67.39 54 HSBC Global Services (Canada) Limited 100.00 89 HSBC Global Services (China) Holdings Limited 100.00 12 HSBC Global Services (Hong Kong) Limited 100.00 19 HSBC Global Services (UK) Limited 100.00 12 HSBC Global Services Limited 100.00 3, 12 HSBC Global Transition Infrastructure Debt Fund RAIF SICAV-S.A. 31.00 91 HSBC Group Management Services Limited 100.00 12 HSBC Group Nominees UK Limited 100.00 3, 12 HSBC Holdings B.V. 100.00 12 HSBC Horizon 2034 2036 A 3D 76.72 175 HSBC India Small Cap Equity Fund (QII） 40.38 54 HSBC Infrastructure Debt GP 1 S.à r.l. N/A 1, 91 HSBC Infrastructure Debt GP 2 S.à r.l. N/A 1, 91 HSBC Innovation Bank Limited 100.00 92 HSBC INSN (Non Operating) Pte. Ltd. (In Liquidation) 100.00 51 HSBC Institutional Trust Services (Asia) Limited 100.00 19 HSBC Institutional Trust Services (Bermuda) Limited 100.00 18 HSBC Institutional Trust Services (Mauritius) Limited 100.00 93 HSBC Institutional Trust Services (Singapore) Limited 100.00 51 HSBC Insurance (Asia) Limited 100.00 95 HSBC Insurance (Asia-Pacific) Holdings Limited 100.00 83 HSBC Insurance (Bermuda) Limited 100.00 96 HSBC Insurance Agency (USA) Inc. 100.00 97 HSBC Insurance Brokerage Company Limited N/A 1,2, 98 HSBC Insurance Brokers Greater China Limited 100.00 83 HSBC Insurance SAC 1 (Bermuda) Limited 100.00 18 HSBC Insurance SAC 2 (Bermuda) Limited 100.00 18 HSBC Insurance Services Holdings Limited (In Liquidation) 100.00 23 HSBC International Finance Corporation (Delaware) 100.00 100 HSBC International Trustee (BVI) Limited 100.00 10, 101 HSBC International Trustee (Holdings) Pte. Limited 100.00 51 HSBC International Trustee Limited 100.00 102 HSBC Inversiones S.A. 100.00 57 HSBC InvestDirect (India) Private Limited 99.99 53 HSBC InvestDirect Financial Services (India) Limited 99.99 53 HSBC InvestDirect Sales & Marketing (India) Private Limited 98.99 ( 98.98 ) 103 HSBC InvestDirect Securities (India) Private Limited 99.99 53 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Investment and Insurance Brokerage, Philippines Inc. 99.99 104 HSBC Investment Bank Holdings B.V. 100.00 12 HSBC Investment Bank Holdings Limited 100.00 12 HSBC Investment Company Limited 100.00 3, 12 HSBC Investment Funds (Hong Kong) Limited 100.00 83 HSBC Investment Funds (Luxembourg) SA 100.00 105 HSBC Invoice Finance (UK) Limited 100.00 14 HSBC Issuer Services Common Depositary Nominee (UK) Limited 100.00 12 HSBC Latin America B.V. 100.00 12 HSBC Latin America Holdings (UK) Limited 100.00 3, 12 HSBC Leasing (Asia) Limited 100.00 19 HSBC Legacy Partnership Limited 100.00 12 HSBC Life (Bermuda) Limited 100.00 18 HSBC Life (Cornell Centre) Limited 100.00 95 HSBC Life (Edwick Centre) Limited 100.00 95 HSBC Life (International) Limited 100.00 18 HSBC Life (Property) Limited 100.00 95 HSBC Life (Singapore) Pte. Ltd. 100.00 51 HSBC Life (Tsing Yi Industrial) Limited 100.00 95 HSBC Life (UK) Limited 100.00 12 HSBC Life (Workshop) Limited 100.00 95 HSBC Life Assurance (Malta) Ltd. 100.00 ( 70.03 ) 84 HSBC Life Insurance Company Limited 100.00 11, 106 HSBC LU Nominees Limited 100.00 12 HSBC Management (Guernsey) Limited 100.00 107 HSBC Markets (USA) Inc. 100.00 25 HSBC Marking Name Nominee (UK) Limited 100.00 12 HSBC Master Trust Trustee Limited (In Liquidation) 100.00 23 HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo Financiero HSBC 99.99 13 HSBC Middle East Asset CO. LLC 100.00 108 HSBC Middle East Holdings B.V. 100.00 3, 4, 66 HSBC Middle East Leasing Partnership N/A 1, 109 HSBC Middle East Securities L.L.C 100.00 110 HSBC Mix Dynamique 58.13 55 HSBC Mortgage Corporation (USA) 100.00 25 HSBC Multi-Asset Style Factors S N/A 1, 175 HSBC Nominees (Asing) Sdn Bhd 100.00 49 HSBC Nominees (Hong Kong) Limited 100.00 19 HSBC Nominees (New Zealand) Limited 100.00 111 HSBC Nominees (Tempatan) Sdn Bhd 100.00 49 HSBC North America Holdings Inc. 100.00 4, 25 HSBC Operational Services GmbH 100.00 ( 99.99 ) 7, 82 HSBC Overseas Holdings (UK) Limited 100.00 3, 12 HSBC Overseas Investments Corporation (New York) 100.00 112 HSBC Overseas Nominee (UK) Limited 100.00 12 HSBC PB Corporate Services 1 Limited 100.00 113 HSBC PB Services (Suisse) SA 100.00 114 HSBC Pension Trust (Ireland) DAC 100.00 115 HSBC Pensiones, S.A. (In Liquidation) 100.00 ( 99.99 ) 13 HSBC PI Holdings (Mauritius) Limited 100.00 116 HSBC Portfolios – World Selection 5 (Part ACHEUR) N/A 1, 105 HSBC Portfoy Yonetimi A.S. 100.00 117 HSBC Preferential LP (UK) 100.00 12 HSBC Private Bank (Luxembourg) S.A. 100.00 ( 99.99 ) 105 HSBC Private Bank (Suisse) SA 100.00 114 HSBC Private Bank (UK) Limited 100.00 12 HSBC Private Banking Holdings (Suisse) SA 100.00 114 HSBC Private Banking Nominee 3 (Jersey) Limited 100.00 113 HSBC Private Equity Investments (UK) Limited 100.00 12 HSBC Private Markets Management SARL N/A 1, 2, 118 456 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Private Trustee (Hong Kong) Limited 100.00 19 HSBC Professional Services (India) Private Limited 100.00 119 HSBC Property (UK) Limited 100.00 12 HSBC Property Funds (Holding) Limited 100.00 12 HSBC Provident Fund Trustee (Hong Kong) Limited 100.00 19 HSBC Qianhai Securities Limited 90.00 11, 120 HSBC RCF Partnership Fund RAIF SICAV-S.A. 11.00 175 HSBC Real Estate Leasing (France) 100.00 ( 99.99 ) 5, 34 HSBC REGIO Fund General Partner S.à r.l. 100.00 91 HSBC REIM (France) 100.00 ( 99.99 ) 5, 55 HSBC Responsible Investment Funds - SRI Balanced 64.14 55 HSBC Responsible Investment Funds - SRI Dynamic 72.79 55 HSBC Resposible Investment Funds - SRI Global Equity A N/A 1, 175 HSBC Retirement Benefits Trustee (UK) Limited 100.00 3, 12 HSBC Retirement Services Limited (In Liquidation) 100.00 23 HSBC Saudi Arabia, Closed Joint Stock Company 100.00 ( 66.19 ) 121 HSBC Securities (Egypt) S.A.E. (In Liquidation) 100.00 ( 94.65 ) 122 HSBC Securities (Japan) Co., Ltd. 100.00 54 HSBC Securities (Singapore) Pte Limited 100.00 51 HSBC Securities (South Africa) (Pty) Limited 100.00 123 HSBC Securities (Taiwan) Corporation Limited 100.00 60 HSBC Securities (USA) Inc. 100.00 25 HSBC Securities and Capital Markets (India) Private Limited 99.99 6, 103 HSBC Securities Brokers (Asia) Limited 100.00 19 HSBC Securities Investments (Asia) Limited 100.00 19 HSBC Securities Services (Bermuda) Limited 100.00 18 HSBC Securities Services (Guernsey) Limited 100.00 17 HSBC Securities Services (Ireland) DAC 100.00 115 HSBC Securities Services (Luxembourg) S.A. 100.00 105 HSBC Securities Services Holdings (Ireland) DAC 100.00 115 HSBC Securities Services Nominees Limited 100.00 19 HSBC Seguros, S.A de C.V., Grupo Financiero HSBC 100.00 ( 99.99 ) 13 HSBC Select Dynamic 80.59 55 HSBC Select Equity 86.38 55 HSBC Select Flexible 63.93 55 HSBC Semfi Limited 75.00 12 HSBC Senior UK Direct Lending 2020 RAIF SICAV-S.A N/A 91 HSBC Senior UK Direct Lending Fund II RAIF SICAV-S.A. 72.46 91 HSBC Service Company Germany GmbH 100.00 ( 99.99 ) 7, 82 HSBC Service Delivery (Polska) Sp. z o.o. 100.00 124 HSBC Services (France) 100.00 ( 99.99 ) 5, 34 HSBC Services Japan Limited 100.00 88 HSBC Services USA Inc. 100.00 125 HSBC Servicios Financieros, S.A. de C.V 100.00 ( 99.99 ) 13 HSBC Servicios, S.A. DE C.V., Grupo Financiero HSBC 100.00 ( 99.99 ) 13 HSBC SFT (C.I.) Limited 100.00 17 HSBC Singapore Dollar Liquidity Fund 76.37 51 HSBC Small Cap France 52.70 55 HSBC Software Development (Guangdong) Limited 100.00 11, 126 HSBC Software Development (India) Private Limited 100.00 127 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Software Development (Malaysia) Sdn Bhd 100.00 75 HSBC Specialist Investments Limited 100.00 6, 12 HSBC Technology & Services (China) Limited (In Liquidation) N/A 1, 128 HSBC Technology & Services (USA) Inc. 100.00 25 HSBC Transaction Services GmbH 100.00 ( 99.99 ) 7, 82 HSBC Trinkaus & Burkhardt (International) S.A. 100.00 ( 99.99 ) 129 HSBC Trinkaus & Burkhardt Gesellschaft fur Bankbeteiligungen mbH 100.00 ( 99.99 ) 82 HSBC Trinkaus & Burkhardt GmbH 100.00 ( 99.99 ) 7, 82 HSBC Trinkaus Family Office GmbH 100.00 ( 99.99 ) 7, 82 HSBC Trinkaus Real Estate GmbH 100.00 ( 99.99 ) 7, 82 HSBC Trust Company (Delaware), National Association 100.00 100 HSBC Trust Company (UK) Limited 100.00 12 HSBC Trustee (C.I.) Limited 100.00 113 HSBC Trustee (Cayman) Limited 100.00 69 HSBC Trustee (Guernsey) Limited 100.00 17 HSBC Trustee (Hong Kong) Limited 100.00 19 HSBC Trustee (Singapore) Limited 100.00 51 HSBC Trustees (India) Private Limited 99.99 103 HSBC UK Bank plc 100.00 3, 14 HSBC UK Client Nominee Limited 100.00 14 HSBC UK Covered Bonds LLP N/A 1, 14 HSBC UK Societal Projects Limited N/A 1, 14 HSBC USA Inc. 100.00 4, 112 HSBC Ventures USA Inc. 100.00 25 HSBC Violet Investments (Mauritius) Limited 100.00 72 HSBC Wealth Client Nominee Limited 100.00 14 HSBC World Equity Protect 80 98.87 55 HSBC Yatirim Menkul Degerler A.S. 100.00 63 HSI Asset Securitization Corporation 100.00 25 HSI International Limited 100.00 ( 63.12 ) 37 HSIL Investments Limited 100.00 12 Hubei Macheng HSBC Rural Bank Company Limited 100.00 11, 131 Hubei Suizhou Cengdu HSBC Rural Bank Company Limited 100.00 11, 132 Hubei Tianmen HSBC Rural Bank Company Limited 100.00 11, 133 Hunan Pingjiang HSBC Rural Bank Company Limited 100.00 11, 134 I3 LP Inc. N/A 107 Imenson Limited 100.00 ( 63.12 ) 37 INHK PC LP Inc 100.00 17 INHK PE LP Inc 100.00 17 Inmobiliaria Bisa, S.A. de C.V. 99.99 13 Inmobiliaria Grufin, S.A. de C.V. 100.00 ( 99.99 ) 13 Inmobiliaria Guatusi, S.A. de C.V. 100.00 ( 99.99 ) 13 Internationale Kapitalanlagegesellschaft mit beschränkter Haftung 100.00 ( 99.99 ) 82 J6 LP Inc N/A 107 James Capel (Nominees) Limited 100.00 12 James Capel (Taiwan) Nominees Limited 100.00 12 Keyser Ullmann Limited 100.00 ( 99.99 ) 12 L1 LP Inc N/A 107 Lion Corporate Services Limited 100.00 19 Lion International Corporate Services Limited 100.00 135 Lion International Management Limited 100.00 135 Lion Management (Hong Kong) Limited 100.00 19 Lyndholme Limited 100.00 19 Marks and Spencer Financial Services plc 100.00 136 Marks and Spencer Unit Trust Management Limited 100.00 136 Midcorp Limited 100.00 12 Midland Bank (Branch Nominees) Limited 100.00 14 HSBC Holdings plc Annual Report on Form 20-F 457 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes Midland Nominees Limited 100.00 14 MP Payments Group Limited 100.00 12 MP Payments Middle East AE L.L.C. 100.00 137 MP Payments Netherlands B.V. 100.00 138 MP Payments Operations Limited 100.00 12 MP Payments Singapore Pte. Ltd. 100.00 51 MP Payments UK Limited 100.00 12 P2 LP Inc N/A 107 Prudential Client HSBC GIS Nominee (UK) Limited 100.00 12 PT Bank HSBC Indonesia 98.94 139 PT HSBC Sekuritas Indonesia 85.00 140 R/CLIP Corp. 100.00 25 Real Estate Collateral Management Company 100.00 25 Red Hexagon Energy Transition Asia GP S.à r.l. 100.00 2, 91 Republic Nominees Limited 100.00 17 RLUKREF Nominees (UK) One Limited 100.00 12 RLUKREF Nominees (UK) Two Limited 100.00 12 S.A.P.C. - Ufipro Recouvrement 99.99 9, 34 Saf Baiyun 100.00 ( 99.99 ) 5, 34 Saf Guangzhou 100.00 ( 99.99 ) 5, 34 SCI HSBC Assurances Immo 100.00 ( 99.99 ) 9, 55 SCPI Elysees Grand Large 98.50 175 Select INKA N/A 1, 82 Serai Limited 100.00 19 SFM 100.00 ( 99.99 ) 5, 34 SFSS Nominees (Pty) Limited 100.00 123 Shandong Rongcheng HSBC Rural Bank Company Limited 100.00 11, 141 Shenzhen HSBC Development Company Ltd 100.00 11, 142 Sico Limited 100.00 143 SilkRoad Fund Management S.à.r.l 100.00 2, 144 Silkroad GP II Limited 100.00 2, 145 Silkroad GP II S.a.r.l. 100.00 2, 144 Silkroad GP Limited 100.00 2, 69 Silkroad GP SC S.a r.l 100.00 2, 146 Silkroad Property Partners K.K. (In Liquidation) 100.00 147 Silkroad Property Partners Limited 100.00 148 Silkroad Property Partners Management Consultancy Limited N/A 1, 149 Silkroad Property Partners PTE. LTD. 100.00 150 SNC Les Oliviers D'Antibes 60.00 ( 59.99 ) 9, 55 SNCB/M6-2007 A 100.00 ( 99.99 ) 2, 5, 34 SNCB/M6-2007 B 100.00 ( 99.99 ) 2, 5, 34 SNCB/M6-2008 A 100.00 ( 99.99 ) 2, 5, 34 Société Française et Suisse 100.00 ( 99.99 ) 5, 34 Somers Dublin DAC 100.00 ( 99.99 ) 115 Somers Nominees (Far East) Limited 100.00 18 Sopingest 100.00 ( 99.99 ) 5, 34 South Yorkshire Light Rail Limited 100.00 12 St Cross Trustees Limited 100.00 14 Sun Hung Kai Development (Lujiazui III) Limited 100.00 11, 151 The Hongkong and Shanghai Banking Corporation Limited 100.00 19 Tooley Street View Limited 100.00 3, 12 Trinkaus Europa Immobilien-Fonds Nr.3 Objekt Utrecht Verwaltungs-GmbH 100.00 ( 99.99 ) 7, 82 Trinkaus Immobilien-Fonds Geschaeftsfuehrungs-GmbH 100.00 ( 99.99 ) 7, 82 Trinkaus Immobilien-Fonds Verwaltungs- GmbH 100.00 ( 99.99 ) 7, 82 Trinkaus Private Equity Management GmbH 100.00 ( 99.99 ) 7, 82 Trinkaus Private Equity Verwaltungs GmbH 100.00 ( 99.99 ) 7, 82 Turnsonic (Nominees) Limited 100.00 14 Valeurs Mobilières Elysées 100.00 ( 99.99 ) 5, 34 Subsidiaries % of share class held by immediate parent company (or by the Group where this varies) Footnotes W4 LP Inc N/A 107 WARDLEY LIMITED 100.00 19 Wayfoong Nominees Limited 100.00 19 Westminster House, LLC N/A 1, 25 Woodex Limited 100.00 18 Yan Nin Development Company Limited 100.00 ( 63.12 ) 37 J oint ventures The undertakings below are joint ventures and equity accounted. Joint ventures % of share class held by immediate parent company (or by the Group where this varies) Footnotes Climate Asset Management Limited N/A 1,2, 152 Global Payments Technology México, S.A. de C.V. 50.00 ( 49.99 ) 2, 153 MK HoldCo Limited 50.32 2, 154 Pentagreen Capital Pte. Ltd 50.00 155 ProServe Bermuda Limited 50.00 156 The London Silver Market Fixing Limited N/A 1,2, 157 Vaultex UK Limited 50.00 158 Non-Profit Foundation The undertakings below are Non-Profit Foundation. Non-Profit Foundation % of share class held by immediate parent company (or by the Group where this varies) Footnotes HSBC Philanthropy Foundation Beijing N/A 1, 175 458 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Associates The undertakings below are associates and equity accounted. Associates % of share class held by immediate parent company (or by the Group where this varies) Footnotes Bank of Communications Co., Ltd. 19.03 2, 159 Barrowgate Limited 24.64 ( 15.53 ) 160 BGF Group plc 24.62 161 Bud Financial Limited 4.50 4, 162 CANARA HSBC LIFE INSURANCE COMPANY LIMITED 26.00 163 Divido Financial Services Limited (In Administration) 7.85 164 Electronic Payment Services Company (Hong Kong) Limited 38.69 2, 19 Episode Six Inc. 5.69 4, 165 EPS Company (Hong Kong) Limited 38.69 19 HQLAX S.à r.l. 6.10 4, 90 HSBC Jintrust Fund Management Company Limited 49.00 2, 11, 166 HSBC UK Covered Bonds (LM) Limited N/A 1,2, 167 Lightico Ltd 2.80 4, 85 LiquidityMatch LLC N/A 1, 168 London Precious Metals Clearing Limited 30.00 2, 169 Marketnode PTE. Ltd. 12.60 4, 46 MENA Infrastructure Fund (GP) Ltd 33.33 170 Quantexa Limited 9.36 4, 99 Radiant Global Investors LLC N/A 1, 2, 172 Saudi Awwal Bank 31.00 173 The London Gold Market Fixing Limited N/A 1, 157 Threadneedle Software Holdings Limited 7.10 4, 174 Trade Information Network Limited 12.76 152 Trinkaus Europa Immobilien-Fonds Nr. 7 Frankfurt Mertonviertel KG N/A 182 We Trade Innovation Designated Activity Company (In Liquidation) 9.88 2, 130 Footnotes for Note 38 Description of shares 1 Where an entity is governed by voting rights, HSBC consolidates when it holds – directly or indirectly – the necessary voting rights to pass resolutions by the governing body. In all other cases, the assessment of control is more complex and requires judgement of other factors, including having exposure to variability of returns, power to direct relevant activities, and whether power is held as an agent or principal. HSBC’s consolidation policy is described in Note 1.2(a). 2 Management has determined that these undertakings are excluded from consolidation in the Group accounts as these entities do not meet the definition of subsidiaries in accordance with IFRS. HSBC’s consolidation policy is described in Note 1.2(a). 3 Directly held by HSBC Holdings plc 4 Preference Shares 5 Actions 6 Redeemable Preference Shares 7 GmbH Anteil 8 Nominal Shares 9 Parts 10 Non-Participating Voting 11 Registered Capital Shares Registered offices 12 8 Canada Square, London, United Kingdom, E14 5HQ 13 Paseo de la Reforma 347 Col. Cuauhtemoc, Mexico, 06500 14 1 Centenary Square, Birmingham, United Kingdom, B1 1HQ Registered offices 15 5 Donegal Square South, Northern Ireland, Belfast, United Kingdom, BT1 5JP 16 1909 Avenida Presidente Juscelino Kubitschek, 19° andar, Torre Norte, São Paulo Corporate Towers, São Paulo, Brazil, 04551-903 17 Arnold House St Julians Avenue, St Peter Port, Guernsey, GY1 3NF 18 37 Front Street, Harbourview Centre, Ground Floor, Hamilton, Pembroke, Bermuda, HM 11 19 1 Queen's Road Central, Hong Kong 20 2401-55 24/F, Office Tower Two 1 Jianguomenwai Street, Chaoyang District, Beijing, China 21 First Floor, Xinhua Bookstore Xindong Road (SE of roundabout), Miyun District, Beijing, China 22 Oak House Hirzel Street, St Peter Port, Guernsey, GY1 2NP 23 c/o Teneo Financial Advisory Limited, The Colmore Building, 20 Colmore Circus, Queensway, Birmingham, United Kingdom, B4 6AT 24 239 Van Rensselaer Street,, Buffalo, New York, United States of America, 14210 25 c/o The Corporation Trust Company 1209 Orange Street, Wilmington, Delaware, United States of America, 19801 26 Corporation Service Company 251 Little Falls Drive, Wilmington, Delaware, United States of America, 19808 27 25/28 North Wall Quay, IFSC, Dublin 1, Leinster 28 No 1, Bei Huan East Road Dazu County, Chongqing, China 29 No 107 Ping Du Avenue (E), Sanhe Town, Fengdu County, Chongqing, China 30 No. 3, 5, 7, Haitang Erzhi Road Changyuan, Rongchang, Chongqing, China, 402460 31 c/o Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman, Cayman Islands, KY1-9005 32 First & Second Floor No.3 Nanshan Road, Pulandian, Dalian, Liaoning, China 33 160 Mine Lake CT, Ste 200, Raleigh, North Carolina, United States of America, 27615-6417 34 38 avenue Kléber, Paris, France, 75116 35 Avenida de las Granjas 972, Building A, Floor 2, Colonia Santa Bárbara, Alcaldía Azcapotzalco, Mexico City, Mexico, 02230 36 No. 1 1211 Yanjiang Zhong Road, Yongan, Fujian, China 37 83 Des Voeux Road Central, Hong Kong 38 No. 44 Xin Ping Road Central, Encheng, Enping, Guangdong, China, 529400 39 Room 311, Cheng Hui No. 2, Nan Sha Street, Nan Sha District, Guangzhou, Guangdong, China 40 34/F, 36/F and 46/F, Hang Seng Bank Tower 1000 Lujiazui Ring Road, Pilot Free Trade Zone, Shanghai, China, 200120 41 Gustav Mahlerplein 2 1082 MA, Amsterdam, Netherlands 42 1001 T2 Office Building, Qianhai Kerry Business Center, Qianhai Avenue, Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen, Guangdong, China 43 Unit 1 GF The Commerical Complex Madrigal Avenue, Ayala Alabang Village, Muntinlupa City, Philippines, 1780 44 C/O Teneo Financial Advisory Limited The Colmore Building, 20 Colmore Circus, Queensway, Birmingham, United Kingdom, B4 6AT 45 Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands, VG1110 46 1 Harbourfront Avenue, #14-07 Keppel Bay Tower, Singapore, 098632 47 701 S CARSON ST STE 200, Carson City, Nevada, United States of America, 89701 48 HSBC House Esplanade, St. Helier, Jersey, JE4 8UB 49 Level 21 Menara IQ, Lingkaran TRX, Tun Razak Exchange, Kuala Lumpur, Malaysia, 55188 50 Level 19, Menara IQ, Lingkaran TRX, Tun Razak Exchange, Kuala Lumpur, Malaysia, 55188 51 10 Marina Boulevard #48-01 Marina Bay Financial Centre, Singapore, 018983 52 52/60, M G Road Fort, Mumbai, India, 400 001 HSBC Holdings plc Annual Report on Form 20-F 459 Registered offices 53 9-11 Floors, NESCO IT Park Building No. 3 Western Express Highway, Goregaon (East), Mumbai, India, 400063 54 HSBC Building 11-1, Nihonbashi 3-chome, Chuo-ku, Tokyo, Japan, 103-0027 55 Immeuble Cœur Défense 110 esplanade du Général de Gaulle, Courbevoie, France, 92400 56 Level 36, Tower 1, International Towers Sydney, 100 Barangaroo Avenue, Sydney, New South Wales, Australia, 2000 57 Isidora Goyenechea 2800 23rd floor, Las Condes, Santiago, Chile, 7550647 58 HSBC Building Shanghai ifc, 8 Century Avenue, Pudong, Shanghai, China, 200120 59 IconEbene, Level 5 Office 1 (West Wing), Rue de L’institut, Ebene, Mauritius 60 54F, 7 Xinyi Road Sec. 5 Xinyi district, Taipei, Taiwan 61 1266 Dr Luis Bonativa 1266 Piso 30 (Torre IV WTC), Montevideo, Uruguay, CP 11.000 62 Level 1, 2, 6 The Metropolitan, 235 Dong Khoi, Ben Nghe Ward, District 1, Ho Chi Minh, Vietnam 63 Esentepe Mah. Büyükdere Caddesi No.128 Şişli, Istanbul, Turkiye, 34394 64 306 Corniche El Nil Street, Maadi, Cairo, Egypt 65 116 Archbishop Street, Valletta, Malta, VLT1444 66 Unit 401, Level 4 Gate Precinct Building 2, Dubai International Financial Centre, P. O. Box 30444, Dubai, United Arab Emirates 67 Majer Consulting, Office 54/44, Building A1, Residence Ryad Anfa, Boulevard Omar El Khayam, Casa Finance City (CFC), Casablanca, Morocco 68 1800 Tysons Boulevard Suite 50, Tysons, Virginia, United States of America, 22102 69 P.O. Box 309 Ugland House, Grand Cayman, Cayman Islands, KY1-1104 70 HSBC House Esplanade, St. Helier, Jersey, JE1 1HS 71 Room 2703, 27F, Tower A, No.8 Century Avenue, China (Shanghai) Pilot Free Trade Zone, Shanghai, China, 200120 72 c/o Rogers Capital St. Louis Business Centre, Cnr Desroches & St Louis Streets, Port Louis, Mauritius 73 49 avenue J.F. Kennedy, Luxembourg, Luxembourg, 1855 74 4-17/F, Office Tower 2 TaiKoo Hui Development, No. 381 Tian He Road, Guangzhou, Guangdong, China 75 Suite 1005, 10th Floor, Wisma Hamzah Kwong, Hing No. 1, Leboh Ampang, Kuala Lumpur, Malaysia, 50100 76 Building C-1 UP Ayala Technohub, Commonwealth Avenue,, Diliman, Quezon City, Metro Manila, Philippines 77 HSBC House Plot No.8 Survey No.64 (Part), Hightec City Layout Madhapur, Hyderabad, India, 500081 78 Mireka City 324/9 Havelock Road, Colombo 05, Sri Lanka, 00500 79 Smart Village 28th Km Cairo- Alexandria Desert Road Building, Cairo, Egypt 80 Centre Ville 1341 Building - 4th Floor Patriarche Howayek Street, PO Box Riad El Solh, Lebanon, 9597 81 Room 405 Odd House Number of 859-863, Huanhu West 1st Road, Lingang New Area, China (Shanghai) Pilot Free Trade Zone, Shanghai, China, 201306 82 Hansaallee 3, Düsseldorf, Germany, 40549 83 HSBC Main Building 1 Queen's Road Central, Hong Kong 84 80 Mill Street, Qormi, Malta, QRM 3101 85 121 HaHashmonaim St., Tel Aviv, Israel, 6713328 86 36F., No. 68 Sec. 5, Zhongxiao E. Rd., Xinyi Dist., Taipei City, Taiwan, 110419 87 452 Fifth Avenue, New York, United States of America, NY10018 88 Mareva House 4 George Street, Nassau, Bahamas 89 150 King Street West, Suite 200, Toronto, Ontario, Canada, M5H 1J9 90 9 rue du Laboratoire, Grand Duchy of Luxembourg, Luxembourg, L-1911 Registered offices 91 4, rue Peternelchen, Howald, Grand Duchy of Luxembourg, Luxembourg, L-2370 92 Alphabeta 14-18 Finsbury Square, London, United Kingdom, EC2A 1BR 93 IConEbene Rue de L’institut, Ebene, Mauritius 94 Meeting Room 18.R005, 18/F Fortune Financial Center No. 5 Dongsanhuan Zhong Road, Chaoyang District, Beijing, China, 100020 95 18th Floor Tower 1, HSBC Centre 1 Sham Mong Road, Kowloon, Hong Kong 96 37 Front Street, Harbourview Center, Ground Floor, Hamilton, Pembroke, Bermuda, HM 11 97 CT Corporation System 28 Liberty Street, New York, New York, United States of America, 10005 98 Unit 201, Floor 2, Building 3 No. 12, Anxiang Street, Shunyi District, Beijing, Beijing, China 99 C/O Company Secretarial Department, 280 Bishopsgate, London, United Kingdom, EC2M 4AG 100 300 Delaware Avenue Suite 1401, Wilmington, Delaware, United States of America, 19801 101 Woodbourne Hall, Road Town, Tortola, British Virgin Islands, P.O. Box 916 102 Craigmuir Chambers, Road Town Tortola, British Virgin Islands, VG1110 103 52/60 M G Road Fort, Mumbai, India, 400 001 104 5/F HSBC Centre 3058 Fifth Ave West, Bonifacio Global City, Taguig City, Philippines 105 18 Boulevard de Kockelscheuer, Luxembourg, Luxembourg, 1821 106 Unit 2002 of 20/F, Unit 2101 of 21/F HSBC Building, 8 Century Avenue, China (Shanghai) Pilot Free Trade Zone, Shanghai, China, 200120 107 Arnold House St Julians Avenue, St Peter Port, Guernsey, GY1 1WA 108 HSBC Tower, Downtown Dubai, P O Box 66, Dubai, United Arab Emirates 109 Unit 401, Level 4, Gate Precinct Building 2, Dubai International Financial Centre, P. O. Box 506553, Dubai, United Arab Emirates 110 Level 16, HSBC Tower, Downtown Dubai, P.O. Box 66, Dubai, United Arab Emirates 111 HSBC Tower, Level 21, 188 Quay Street, Auckland, New Zealand, 1010 112 The Corporation Trust Incorporated, 2405 York Road, Suite 201, Lutherville Timonium, Maryland, United States of America, 21093 113 HSBC House Esplanade, St. Helier, Jersey, JE1 1GT 114 9-17 Quai des Bergues, Geneva, Switzerland, 1201 115 1 Grand Canal Square, Grand Canal Harbour, Dublin 2, Ireland, D02 P820 116 6th floor HSBC Centre 18, Cybercity, Ebene, Mauritius, 72201 117 Esentepe Mah. Büyükdere Caddesi No.128, 34394, Şişli, Istanbul, Turkiye 118 5 rue Heienhaff, Senningerberg, Luxembourg, L-1736 119 52/60 M G Road, Fort, Mumbai, India, 400 001 120 Unit 2201, 22/F, Qianhai Chow Tai Fook Finance Tower (Phase I) No. 66 Shu Niu Avenue, Nanshan Subdistrict, the Shenzhen Qianhai Shenzhen-Hong Kong Cooperation Zone, the PRC, Shenzhen, China, 518054 121 HSBC Building 7267 Olaya - Al Murrooj, Riyadh, Saudi Arabia, 12283 - 2255 122 306 Corniche El Nil, HSBC Building, Maadi, Cairo, Egypt 123 1 Mutual Place, 107 Rivonia Road, Sandton, Gauteng, South Africa, 2196 124 Kapelanka 42A, Krakow, Poland, 30-347 125 C T Corporation System 820 Bear Tavern Road, West Trenton, New Jersey, United States of America, 08628 126 22/F, Tower 2, Taikoo Hui Building, No. 381 Tianhe Road, Tianhe District, Guangzhou, China 127 Business Bay, Wing 2 Tower B, Survey no 103, Hissa no. 2, Airport road, Yerwada, Pune, India, 411006 460 HSBC Holdings plc Annual Report on Form 20-F Notes on the financial statements Registered offices 128 Room 3102, L31 HSBC Building, Shanghai ifc, 8 Century Avenue, China (Shanghai) Free Trade Zone, Shanghai, China, 200120 129 16 Boulevard d'Avranches, Luxembourg, L-1160 130 10 Earlsfort Terrace, Dublin, Ireland, D02 T380 131 No. 56 Yu Rong Street, Macheng, China, 438300 132 No. 205 Lie Shan Road Suizhou, Hubei, China 133 Building 3, Yin Zuo Di Jing Wan Tianmen New City, Tianmen, Hubei Province, China 134 RM101, 102 & 106 Sunshine Fairview, Sunshine Garden, Pedestrian Walkway, Pingjiang, China 135 Craigmuir Chambers, Road Town, Tortola, British Virgin Islands, VG1110 136 Kings Meadow Chester Business Park, Chester, United Kingdom, CH99 9FB 137 Level 15 HSBC Tower, Downtown Dubai, Dubai, United Arab Emirates, PO Box 66 138 De Entrée 201, Amsterdam, Netherlands, 1101 HG 139 World Trade Center 3, 9th Floor, Jalan Jendral Sudirman Kaveling 29-31, Karet, Setiabudi, South Jakarta, DKI Jakarta, Indonesia, 12920 140 5th Floor, World Trade Center 1, Jl. Jend. Sudirman Kav. 29-31, Jakarta, Indonesia, 12920 141 No.198-2 Chengshan Avenue (E), Rongcheng, China, 264300 142 Room 601, 6/F Phase 1 Qianhai Chow Tai Fook Finance Tower, 66 Shuniu Avenue, Nanshan Community, Qianhai Shenzhen-Hong Kong Corporation Zone, Shenzhen, Guangdong, China 143 Woodbourne Hall, Road Town, Tortola, British Virgin Islands, P.O. Box 3162 144 1 Côte d'Eich, Luxembourg, 1450 145 P.O. Box 3119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, Cayman Islands, KY1 – 1205 146 17 Boulevard F.W Raiffeisen, Luxembourg, 2411 147 Tokyo Club Building 11F, 3-2-6 Kasumigaseki, Chiyoda-ku, Tokyo, Japan 148 27/F, Alexandra House, 18 Chater Road Central, Hong Kong 149 Unit 2017, Floor 20, Tower 1 No.288, Shimen 1st Road, Jing An District, Shanghai, China, 200041 150 10 Collyer Quay, #10-01 Ocean Financial Centre, Singapore, Singapore, 049315 151 RM 2112, HSBC Building, Shanghai ifc No. 8 Century Road, Pudong, Shanghai, China, 200120 152 3 More London Riverside, London, United Kingdom, SE1 2AQ Registered offices 153 296, floor 18, office A Paseo de la Reforma, Mexico City, Mexico, 06600 154 35 Ballards Lane, London, United Kingdom, N3 1XW 155 1 Raffles Quay #23-01, Singapore, 048583 156 c/o Mayfair Corporate Services Ltd., 26 Burnaby Street, Hamilton, Bermuda, HM11 157 27 Old Gloucester Street, London, United Kingdom, WC1N 3AX 158 All Saints Triangle Caledonian road, London, United Kingdom, N19UT 159 188 Yin Cheng Zhong Lu (Shanghai) Pilot Free Trade Zone, China 160 50/F, Lee Garden One, 33 Hysan Avenue, Hong Kong 161 13-15 York Buildings, London, United Kingdom, WC2N 6JU 162 167-169 Great Portland Street, 5th Floor, London, United Kingdom, W1W 5PF 163 8th Floor Unit No. 808-814, Ambadeep Building, Plot No. 14, Kasturba Gandhi Marg, New Delhi, India, 110001 164 C/O Interpath Ltd, 10 Fleet Place, London, United Kingdom, EC4M 7RB 165 251 Little Falls Drive, New Castle, Wilmington, United States of America, 19808 166 17F, HSBC Building, Shanghai ifc 8 Century Avenue, Pudong, Shanghai, China 167 10th Floor 5 Churchill Place, London, United Kingdom, E14 5HU 168 111 Town Square Place, Suite 840, Jersey City, New Jersey, United States of America, 07310 169 7th Floor, 62 Threadneedle Street, London, United Kingdom, EC2R 8HP 170 Unit 306,307, 308, Gate Village Building 05, Dubai International Financial Centre, Dubai, United Arab Emirates 171 Gartenstrasse 26, Zurich, Switzerland, 8002 172 4482 Deer Ridge Road, Danville, CA, Delaware, United States of America, 94506 173 7383 King Fahad Branch Rd, 2338 - Al Yasmeen Dist., Riyadh, Saudi Arabia, 13325 174 2nd Floor, Regis House, 45 King William Street, London, United Kingdom, EC4R 9AN 175 Coeur Défense - 110, esplanade du Général de Gaulle - La Défense 4 – 92400 Courbevoie 176 3 Dublin Landings, North Wall Quay, Dublin 1, Ireland 177 3, rue Jean Piret,L-2350 Luxembourg,Grand Duchy of Luxembourg 39 Non-statutory accounts The information set out in these accounts does not constitute the Company’s statutory accounts for the years ended 31 December 2024 or 2023. Those accounts have been reported on by the Company’s auditors: their reports were unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. The accounts for 2023 have been delivered to the Registrar of Companies and those for 2024 will be delivered in due course. HSBC Holdings plc Annual Report on Form 20-F 461 Shareholder information Contents 461 Fourth interim dividend for 2024 473 Information made about the enforceability of judgments made in the US 461 Interim dividends for 2025 461 Other equity instruments 473 Exchange controls and other limitations affecting equity security 462 2024 Annual General Meeting 473 Insider trading policies and procedures 462 Earnings releases and interim results 474 Dividends on the ordinary shares of HSBC Holdings 462 Shareholder enquiries and communications 474 American Depository Shares 462 Stock symbols 474 Nature of trading market 463 Investor relations 474 Memorandum and Articles of Association 463 Where more information about HSBC is available 475 Differences in HSBC Holdings/New York Stock Exchange corporate 463 Taxation of shares and dividends 476 Glossary of accounting terms and US equivalents 465 Approach to ESG reporting 477 Reconciliations This section gives important information for our shareholders, including contact information. It also includes an overview of key abbreviations and terminology used throughout this Form 20-F. A glossary of terms used in the Annual Report and Accounts can be found in the Investors section of www.hsbc.com. Fourth interim dividend for 2024 The Directors have approved a fourth interim dividend for 2024 of $0.36 per ordinary share. Information on the currencies in which shareholders may elect to have the cash dividend paid can be viewed at www.hsbc.com/investors. The interim dividend will be paid in cash. The timetable for the interim dividend is: Announcement 19 February 2025 Shares quoted ex-dividend in London, Hong Kong and Bermuda 6 March 2025 American Depositary Shares (‘ADS’) quoted ex-dividend in New York 7 March 2025 Record date – London, Hong Kong, New York, Bermuda 1 7 March 2025 Mailing of Annual Report and Accounts 2024 and/or Strategic Report 2024 21 March 2025 Final date for dividend election changes including Investor Centre electronic instructions and revocations of standing instructions for dividend elections 10 April 2025 Exchange rate determined for payment of dividends in pounds sterling and Hong Kong dollars 14 April 2025 Payment date 25 April 2025 1 Removals to and from the Overseas Branch register of shareholders in Hong Kong or Bermuda will not be permitted on this date. Interim dividends for 2025 As previously communicated, we established and achieved a target dividend payout ratio of 50% of earnings per ordinary share (‘EPS’) for 2023 and 2024, excluding the special dividend. EPS for this purpose excludes material notable items and related impacts. Material notable items in 2023 and 2024 included the sale of our businesses in Canada and Argentina, the sale of our retail banking operations in France, the gain following the acquisition of SVB UK and the impairment of our investment in BoCom. We also exclude HSBC Bank Canada‘s financial results from the 30 June 2022 net asset reference date until completion on 29 March 2024, as the gain on sale recognised through a combination of the consolidation of HSBC Bank Canada‘s results in the Group‘s results since this date, and the remaining gain on sale was recognised at completion, inclusive of the recycling of related reserves and fair value gains on related hedges. The Board has adopted a dividend policy designed to provide sustainable cash dividends, while retaining the flexibility to invest and grow the business in the future, supplemented by additional shareholder distributions, if appropriate. The Board has established a target dividend payout ratio of 50% for 2025, subject to meeting capital requirements. Dividends are approved in US dollars and, at the election of the shareholder, paid in cash in one of, or in a combination of, US dollars, pounds sterling and Hong Kong dollars. Other equity instruments Additional tier 1 capital – contingent convertible securities HSBC continues to issue contingent convertible securities that are included in its capital base as fully CRR II-compliant additional tier 1 capital securities. For further details on these securities, see Note 32 on the financial statements. HSBC Holdings issued SGD1,500m 5.250% perpetual subordinated contingent convertible securities on 14 June 2024. In addition, HSBC Holdings issued US$1,350m 6.875% and US$1,150m 6.950% perpetual subordinated contingent convertible securities on 11 September 2024. 462 HSBC Holdings plc Annual Report on Form 20-F Additional information 2024 Annual General Meeting With the exception of the shareholder requisitioned Resolution 17, which the Board recommended that shareholders vote against, all resolutions considered at the 2024 AGM held at 11:00am on 3 May 2024 at InterContinental London O2, 1 Waterview Drive, London SE10 0TW, UK, were passed on a poll. Earnings releases and interim results First and third quarter results for 2025 will be released on 29 April 2025 and 28 October 2025, respectively. The interim results for the six months to 30 June 2025 will be issued on 30 July 2025. Shareholder enquiries and communications Enquiries Any enquiries relating to shareholdings on the share register (for example, transfers of shares, changes of name or address, lost share certificates or dividend cheques) should be sent to the Registrars at the address given below. The Registrars offer an online facility, Investor Centre, which enables shareholders to manage their shareholding electronically. Principal Register: Computershare Investor Services PLC The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ, United Kingdom Telephone: +44 (0) 370 702 0137 www.investorcentre.co.uk/contactus Investor Centre: www.investorcentre.co.uk Hong Kong Overseas Branch Register: Computershare Hong Kong Investor Services Limited Rooms 1712–1716, 17th Floor Hopewell Centre, 183 Queen’s Road East, Hong Kong Telephone: +852 2862 8555 hsbc.ecom@computershare.com.hk Investor Centre: www.investorcentre.com/hk Bermuda Overseas Branch Register: Investor Relations Team HSBC Bank Bermuda Limited, 37 Front Street, Hamilton, HM 11, Bermuda hbbm.shareholder.services@hsbc.bm Investor Centre: www.investorcentre.com/bm ADS Depositary: The Bank of New York Mellon Shareowner Services, P.O. Box 43006, Providence RI 02940-3078, USA Telephone (US): +1 877 283 5786 Telephone (International): +1 201 680 6825 shrrelations@cpushareownerservices.com If your shareholding is not recorded directly on the share register, it is important to remember that your main contact for all matters relating to your investment remains the registered shareholder, or custodian or broker, who administers the investment on your behalf. This is the case even if you have elected to receive information rights directly from HSBC Holdings. Any changes or queries relating to your personal details and holding (including any administration of it) should be directed to your existing contact at your investment manager or custodian or broker. HSBC Holdings cannot guarantee dealing with matters directed to it in error. Shareholders who wish to receive a hard copy of the Annual Report and Accounts 2024 should contact HSBC’s Registrars. Please visit www.hsbc.com/investors/investor-contacts for further information. You can also download an online version of the report from www.hsbc.com. Electronic communications Shareholders may at any time choose to receive corporate communications in printed form or to receive notifications of their availability on HSBC’s website. To receive notifications of the availability of a corporate communication on HSBC’s website by email, or revoke or amend an instruction to receive such notifications by email, go to www.hsbc.com/investors/shareholder-information/manage-your-shareholding. If you received a notification of the availability of this document on HSBC’s website and would like to receive a printed copy, or if you would like to receive future corporate communications in printed form, please write or send an email (quoting your shareholder reference number) to the appropriate Registrars at the address given above. Printed copies will be provided without charge. Chinese translation A Chinese translation of the Annual Report and Accounts 2024 will be available upon request after 21 March 2025 from the Registrars (contact details above). Please also contact the Registrars if you wish to receive Chinese translations of future documents, or if you have received a Chinese translation of this document and do not wish to receive them in future. 《2024 年報及賬目》備有中譯本，各界人士可於2025年3月21日之後，向上列股份登記處索閱。 閣下如欲於日後收取相關文件的中譯本，或已收到本文件的中譯本但不希望繼續收取有關譯本，均請聯絡股份登記處。 Stock symbols HSBC Holdings ordinary shares trade under the following stock symbols: London Stock Exchange HSBA * New York Stock Exchange (ADS) HSBC Hong Kong Stock Exchange 5 Bermuda Stock Exchange HSBC.BH ∗  HSBC’s Primary market HSBC Holdings plc Annual Report on Form 20-F 463 Investor relations Enquiries relating to HSBC’s strategy or operations may be directed to: Neil Sankoff, Global Head of Investor Relations Yafei Tian, Head of Investor Relations, Asia-Pacific HSBC Holdings plc The Hongkong and Shanghai Banking 8 Canada Square Corporation Limited London E14 5HQ 1 Queen’s Road Central United Kingdom Hong Kong Telephone: +44 (0) 20 7991 5072 Telephone: +852 2899 8909 Email: investorrelations@hsbc.com Email: investorrelations@hsbc.com.hk Where more information about HSBC is available The Annual Report and Accounts 2024 and other information on HSBC may be downloaded from HSBC’s website: www.hsbc.com. Reports, statements and information that HSBC Holdings files with the Securities and Exchange Commission are available at www.sec.gov. Investors can also request hard copies of these documents upon payment of a duplicating fee by writing to the SEC at the Office of Investor Education and Advocacy, 100 F Street N.E., Washington, DC 20549-0213 or by emailing PublicInfo@sec.gov. Investors should call the Commission at (1) 202 551 8090 if they require further assistance. Investors may also obtain the reports and other information that HSBC Holdings files at www.nyse.com (telephone number (1) 212 656 3000). HM Treasury has transposed the requirements set out under CRD IV and issued the Capital Requirements Country-by-Country Reporting Regulations 2013. The legislation requires HSBC Holdings to publish additional information in respect of the year ended 31 December 2024 by 31 December 2025. This information will be available on HSBC’s website: www.hsbc.com/tax. Taxation of shares and dividends Taxation – UK residents The following is a summary, under current law (unless otherwise noted) and the current published practice of HM Revenue and Customs (‘HMRC’), of certain UK tax considerations that are likely to be material to the ownership and disposition of HSBC Holdings ordinary shares. The summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to a holder of shares. In particular, the summary deals with shareholders who are resident solely in the UK for UK tax purposes and only with holders who hold the shares as investments and who are the beneficial owners of the shares, and does not address the tax treatment of certain classes of holders such as dealers in securities. Holders and prospective purchasers should consult their own advisers regarding the tax consequences of an investment in shares in light of their particular circumstances, including the effect of any national, state or local laws. Taxation of dividends Currently, no tax is withheld from dividends paid by HSBC Holdings. UK resident individuals UK resident individuals are generally entitled to a tax-free annual allowance in respect of dividends received. The amount of the allowance for the tax year beginning 6 April 2024 is £500. To the extent that dividend income received by an individual in the relevant tax year does not exceed the allowance, a nil tax rate will apply. Dividend income in excess of this allowance will be taxed at 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional rate taxpayers. UK resident companies Shareholders that are within the charge to UK corporation tax should generally be entitled to an exemption from UK corporation tax on any dividends received from HSBC Holdings. However, the exemptions are not comprehensive and are subject to anti-avoidance rules. If the conditions for exemption are not met or cease to be satisfied, or a shareholder within the charge to UK corporation tax elects for an otherwise exempt dividend to be taxable, the shareholder will be subject to UK corporation tax on dividends received from HSBC Holdings at the rate of corporation tax applicable to that shareholder. Taxation of capital gains The computation of the capital gains tax liability arising on disposals of shares in HSBC Holdings by shareholders subject to UK tax on capital gains can be complex, partly depending on whether, for example, the shares were purchased since April 1991, acquired in 1991 in exchange for shares in The Hongkong and Shanghai Banking Corporation Limited, or acquired subsequent to 1991 in exchange for shares in other companies. For capital gains tax purposes, the acquisition cost for ordinary shares is adjusted to take account of subsequent rights and capitalisation issues. Any capital gain arising on a disposal of shares in HSBC Holdings by a UK company may also be adjusted to take account of indexation allowance if the shares were acquired before 1 January 2018, although the level of indexation allowance that is given in calculating the gain would be frozen at the value that would have been applied to a disposal of those shares in December 2017. If in doubt, shareholders are recommended to consult their professional advisers. Stamp duty and stamp duty reserve tax Transfers of shares by a written instrument of transfer generally will be subject to UK stamp duty at the rate of 0.5% of the consideration paid for the transfer (rounded up to the next £5), and such stamp duty is generally payable by the transferee. An agreement to transfer shares, or any interest therein, normally will give rise to a charge to stamp duty reserve tax at the rate of 0.5% of the consideration. However, provided an instrument of transfer of the shares is executed pursuant to the agreement and duly stamped before the date on which the stamp duty reserve tax becomes payable, under the current published practice of HMRC it will not be necessary to pay the stamp duty reserve tax, nor to apply for such tax to be cancelled. Stamp duty reserve tax is generally payable by the transferee. Paperless transfers of shares within CREST, the UK’s paperless share transfer system, are liable to stamp duty reserve tax at the rate of 0.5% of the consideration. In CREST transactions, the tax is calculated and payment made automatically. Deposits of shares into CREST generally will not be subject to stamp duty reserve tax, unless the transfer into CREST is itself for consideration. 464 HSBC Holdings plc Annual Report on Form 20-F Additional information Taxation – US residents The following is a summary, under current law, of the principal UK tax and US federal income tax considerations that are likely to be material to the ownership and disposition of shares or American Depositary Shares (‘ADSs’) by a holder that is a US holder, as defined below, and who is not resident in the UK for UK tax purposes. The summary does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a holder of shares or ADSs. In particular, the summary deals only with US holders that hold shares or ADSs as capital assets, and does not address the tax treatment of holders that are subject to special tax rules. These include banks, tax-exempt entities, insurance companies, dealers in securities or currencies, persons that hold shares or ADSs as part of an integrated investment (including a ‘straddle’ or ‘hedge’) comprised of a share or ADS and one or more other positions, and persons that own directly or indirectly 10% or more (by vote or value) of the stock of HSBC Holdings. This discussion is based on laws, treaties, judicial decisions and regulatory interpretations in effect on the date hereof, all of which are subject to change. For the purposes of this discussion, a ‘US holder’ is a beneficial holder that is a citizen or resident of the United States, a US domestic corporation or otherwise is subject to US federal income taxes on a net income basis in respect thereof. Holders and prospective purchasers should consult their own advisers regarding the tax consequences of an investment in shares or ADSs in light of their particular circumstances, including the effect of any national, state or local laws. Any US federal tax advice included in the Annual Report and Accounts 2024 is for informational purposes only. It was not intended or written to be used, and cannot be used, for the purpose of avoiding US federal tax penalties. Taxation of dividends Currently, no tax is withheld from dividends paid by HSBC Holdings. For US tax purposes, a US holder must include cash dividends paid on the shares or ADSs in ordinary income on the date that such holder or the ADS depositary receives them, translating dividends paid in UK pounds sterling into US dollars using the exchange rate in effect on the date of receipt. A US holder that elects to receive shares in lieu of a cash dividend must include in ordinary income the fair market value of such shares on the dividend payment date, and the tax basis of those shares will equal such fair market value. Subject to certain exceptions for positions that are held for less than 61 days, and subject to a foreign corporation being considered a ‘qualified foreign corporation’ (which includes not being classified for US federal income tax purposes as a passive foreign investment company), certain dividends (‘qualified dividends’) received by an individual US holder generally will be subject to US taxation at preferential rates. Based on the company’s audited financial statements and relevant market and shareholder data, HSBC Holdings does not believe that it was a passive investment company for its 2024 taxable year and does not anticipate becoming a passive foreign investment company in 2025 or the foreseeable future. Accordingly, dividends paid on the shares or ADSs generally should be eligible for qualified dividends treatment. Taxation of capital gains Gains realised by a US holder on the sale or other disposition of shares or ADSs normally will not be subject to UK taxation unless at the time of the sale or other disposition the holder carries on a trade, profession or vocation in the UK through a branch or agency or permanent establishment and the shares or ADSs are or have been used, held or acquired for the purposes of such trade, profession, vocation, branch or agency or permanent establishment. Such gains will be included in income for US tax purposes, and will be long-term capital gains if the shares or ADSs were held for more than one year. A long-term capital gain realised by an individual US holder generally will be subject to US tax at preferential rates . Inheritance tax Shares or ADSs held by an individual whose domicile is determined to be the US for the purposes of the United States–United Kingdom Double Taxation Convention relating to estate and gift taxes (the ‘Estate Tax Treaty’) and who is not for such purposes a national of the UK will not, provided any US federal estate or gift tax chargeable has been paid, be subject to UK inheritance tax on the individual’s death or on a lifetime transfer of shares or ADSs except in certain cases where the shares or ADSs (i) are comprised in a settlement (unless, at the time of the settlement, the settlor was domiciled in the US and was not a national of the UK), (ii) are part of the business property of a UK permanent establishment of an enterprise, or (iii) pertain to a UK fixed base of an individual used for the performance of independent personal services. In such cases, the Estate Tax Treaty generally provides a credit against US federal tax liability for the amount of any tax paid in the UK in a case where the shares or ADSs are subject to both UK inheritance tax and to US federal estate or gift tax. Stamp duty and stamp duty reserve tax – ADSs If shares are transferred to a clearance service or American Depositary Receipt (‘ADR’) issuer (which will include a transfer of shares to the depositary) UK stamp duty and/or stamp duty reserve tax will be payable unless the transfer is, or is treated as being, in the course of a capital raising arrangement. The stamp duty or stamp duty reserve tax is generally payable on the consideration for the transfer (or, if there is no consideration in money or money’s worth, the value of the shares being transferred) and is payable at the aggregate rate of 1.5%. The amount of stamp duty reserve tax payable on such a transfer will be reduced by any stamp duty paid in connection with the same transfer. No stamp duty will be payable on the transfer of, or agreement to transfer, an ADS, provided that the ADR and any separate instrument of transfer or written agreement to transfer remain at all times outside the UK, and provided further that any such transfer or written agreement to transfer is not executed in the UK. No stamp duty reserve tax will be payable on a transfer of, or agreement to transfer, an ADS effected by the transfer of an ADR. US information reporting and backup withholding tax Distributions made on shares or ADSs and proceeds from the sale of shares or ADSs that are paid within the US, or through certain financial intermediaries to US holders, are subject to US information reporting and may be subject to a US ‘backup’ withholding tax. General exceptions to this rule happen when the US holder: establishes that it is a corporation (other than an S corporation) or other exempt holder; or provides a correct taxpayer identification number, certifies that no loss of exemption from backup withholding has occurred and otherwise complies with the applicable requirements of the backup withholding rules. Holders that are not US persons (as defined in the US Internal Revenue Code of 1986, as amended) generally are not subject to US information reporting or backup withholding tax, but may be required to comply with applicable certification procedures to establish that they are not US persons in order to avoid the application of such US information reporting requirements or backup withholding tax to payments received within the US or through certain financial intermediaries. HSBC Holdings plc Annual Report on Form 20-F 465 Approach to ESG reporting The information set out in the ESG review on pages 39 to 82 , taken together with other information relating to ESG issues included in this Form 20-F, aims to provide key ESG information and data relevant to our operations for the year ended 31 December 2024. The data is compiled for the financial year 1 January to 31 December 2024 unless otherwise specified. Measurement techniques and calculations are explained next to data tables where necessary. There are no significant changes from the previous reporting period in terms of scope, boundary or measurement of our reporting of ESG matters. Where relevant, rationale is provided for any restatement of information or data that has been previously published. How we decide what to measure We listen to our stakeholders in a number of different ways, which we set out in more detail within the ‘ESG overview’ on page 19 . We use the information they provide us to identify the issues that are most important to them and consequently also matter to our own business. Our ESG Committee and other relevant governance bodies regularly discuss the new and existing themes and issues that matter to our stakeholders. Our management team then uses this insight, alongside the framework of the ESG Guide (which refers to our obligations under the Environmental, Social and Governance Reporting Guide contained in Appendix C2 to The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited), and the UKLR 6.6.6R(8) of the Financial Conduct Authority’s (‘FCA’) Listing Rules, Sections 414CA and 414CB of the UK Companies Act 2006, and other applicable laws and regulations to choose what we measure and publicly report in our ESG review. We will continue to develop and refine our reporting and disclosures on ESG matters in line with feedback received from our investors and other stakeholders, and in view of our obligations under the ESG Guide and the FCA’s Listing Rules. Under the ESG Guide, ’materiality’ is considered to be the threshold at which ESG issues become sufficiently important to our investors and other stakeholders that they should be publicly reported. Our approach to materiality also considers disclosure standards and other applicable rules and regulations as part of our materiality assessment for specific ESG topics and relevant disclosures. Given ongoing developments in the ESG regulatory environment across various jurisdictions in which we operate, combined with the relative immaturity of processes, systems, data quality and controls, our focus remains on supporting a globally consistent set of mandatory sustainability standards. We aim to continue to evolve our reporting to recognise market developments, such as the International Sustainability Standards Board (‘ISSB’) or the Corporate Sustainability Reporting Directive (‘CSRD’), and support the efforts to harmonise the disclosures. In this Form 20-F we continue to report against the core World Economic Forum (‘WEF’), Stakeholder Capitalism Metrics and Sustainability Accounting Standards Board (‘SASB’) metrics, and will continue to review our approach as the regulatory landscape evolves. Consistent with the scope of financial information presented in this Form 20-F, the ESG review covers the operations of HSBC Holdings plc and its subsidiaries. Given the relative immaturity of ESG-related data and methodologies in general, we are on a journey towards improving completeness and robustness. For further details of our material ESG topics, see ‘Engaging with our stakeholders and our material ESG topics’ on page 19 . Our reporting around ESG We report on ESG matters throughout this Form 20-F, including the ’ESG overview’ section of the Strategic Report (pages 18 to 22 ), ESG review (pages 39 to 82 ), and the ‘Climate risk’ and ‘Insights from climate scenario analysis’ sections of the Risk review (pages 249 to 258 ). In addition, we have other supplementary materials, including our ESG Data Pack, which provides a more granular breakdown of ESG information. Detailed data Additional reports ESG Data Pack 2024, including SASB Index 2024 and WEF Index 2024 UK Pay Gap Report 2024 Modern Slavery and Human Trafficking Statement 2024 Green Bond Report 2024 HSBC UN Sustainable Development Goals Bond Report 2024 For further details of our supplementary materials, see our ESG reporting centre at www.hsbc.com/who-we-are/esg-and-responsible-business/esg- reporting-centre. ESG Guide We comply with the ‘comply or explain’ provisions in the ESG Guide, save for certain items, which we describe in more detail below: – A1(b) on relevant laws/regulations relating to air and greenhouse gas emissions, discharges into water and land, and generation of hazardous and non-hazardous waste, and on emissions: taking into account the nature of our business, we do not believe that there are relevant laws and regulations in these areas that have significant impacts on our operations. Nevertheless, we are fully compliant with our publication of information regarding scope 1 and 2 carbon emissions, while we only partially publish information on scope 3 carbon emissions, as the data required for that publication is not yet fully available. – A1.3 on total hazardous waste produced, A1.4 on total non- hazardous waste produced: Taking into account the nature of our business, we do not consider hazardous waste to be a material issue for our stakeholders. As such, we report only on total waste produced, which includes hazardous and non-hazardous waste. – A1.6 on handling hazardous and non-hazardous waste: Taking into account the nature of our business, we do not consider this to be a material issue for our stakeholders. Notwithstanding this, we continue to focus on the reduction and recycling of all waste. Building on the success of our previous operational environmental strategy, we are continuing to seek to identify key opportunities where we can lessen our wider environmental impact, including waste management. For further details, please see our ESG review on page 56 . – A2.4 on sourcing water issue and water efficiency target: Taking into account the nature of our business, we do not consider this to be a material issue for our stakeholders. Notwithstanding this, we have implemented measures to further reduce water consumption through the installation of flow restrictors, auto-taps and low or zero flush sanitary fittings and continue to track our water consumption. – A2.5 on packaging material, B6(b) on issues related to health and safety and labelling relating to products and services provided, B6.1 on percentage of total products sold or shipped subject to recalls for safety and health reasons and B6.4 in recall procedures: Taking into account the nature of our business, we do not consider these to be material issues for our stakeholders. This is aligned with the materiality reporting principle that is set out in the ESG Guide. See ‘How we decide what to measure’ for further information on how we determine what matters are material to our stakeholders. 466 HSBC Holdings plc Annual Report on Form 20-F Additional information Task Force on Climate-related Financial Disclosures (‘TCFD’) TCFD As noted on page 21 , we have considered our ‘comply or explain’ obligation under both UKLR 6.6.6(8) of the Financial Conduct Authority’s (‘FCA’) Listing Rules and Sections 414CA and 414CB of the UK Companies Act 2006. We perform an assessment to ascertain the appropriate level of detail to be included in the climate-related financial disclosures that are set out in this Form 20-F, as part of considering what to measure and publicly report. Our assessment takes into account factors such as the level of our exposure to climate-related risks and opportunities, the scope and objectives of our climate-related strategy, transitional challenges, and the nature, size and complexity of our business. See ‘How we decide what to measure’ for further information. We confirm that we have made disclosures consistent with 11 TCFD Recommendations and Recommended Disclosures, including its annexes and supplemental guidance, which we summarise in the table below: Recommendation Response Disclosure location Governance a) Describe the Board’s oversight of climate-related risks and opportunities (Companies Act 2006 - Sections 414CA and 414CB 2A (a)) Process, frequency and training – The Board takes overall responsibility for ESG strategy, overseeing executive management in developing the approach, execution and associated reporting. ESG strategies were considered at eight Board meetings during the year. Pages 72 and 283 – Board members receive ESG-related training as part of their induction and ongoing development, and seek out further opportunities to build their skills and experience in this area. Page 72 Sub-committee accountability, processes and frequency – The Group Audit Committee (‘GAC’) considered ESG and climate reporting matters at six meetings during 2024. Furthermore, as an area of expanded assurance, the GAC, supported by the executive-level ESG Committee, provided close oversight of the disclosure risks in relation to sustainability and climate reporting, amid rising stakeholder expectations. The work will continue throughout 2025 in partnership with the Sustainability Working Group. Page 294 – The Group Risk Committee (‘GRC’) remained focused on climate risk and greenwashing risk. The GRC received reports on climate risk management and sustainability risk policies, while maintaining oversight of delivery plans and risk appetite breaches to help ensure that the Group continues to develop and maintains robust climate risk management capabilities. Reputation risk considerations have also formed part of these discussions. It considered climate risk at four meetings in 2024. Pages 302 and 305 – The diagram on page 72 provides an illustration of our ESG governance process, including how the Board’s strategy on climate is cascaded and implemented throughout the organisation. It identifies examples of forums that manage both climate-related opportunities and risks, along with their responsibilities and the responsible chair. Page 72 Examples of the Board and relevant Board committees taking climate into account – The Board has overall responsibility for ESG strategy, overseeing executive management in developing the approach, execution, and associated reporting. Page 281 – We enhanced our ESG governance with the establishment of a new Sustainability Working Group (‘SWG’) of the HSBC Holdings Board . This working group has an initial remit to provide oversight and guidance in relation to the Group’s sustainability activities, including the targets and timelines set out in the net zero transition plan, key sustainability risk policies and communication with key stakeholder groups. Page 72 – In 2024, the Board oversaw the implementation of ESG strategy through regular dashboard reports and detailed updates including: review and approval of the net zero transition plan; deep dives on the sustainability execution programme; and updates on human rights. Page 281 b) Describe management’s role in assessing and managing climate-related risks and opportunities (Companies Act 2006 - Sections 414CA and 414CB 2A (a)) Who manages climate- related risks and opportunities – The Sustainability Working Group, established in 4Q24, oversees and provides guidance on the Group-wide medium and longer-term sustainability strategy . The ESG Committee has oversight of ESG strategy, policy, material commitments and external disclosure. It is co-chaired by the Group CEO and the Group Chief Sustainability Officer. Page 250 – The Group Chief Risk and Compliance Officer is the senior manager responsible for the management of climate risk under the UK Senior Managers Regime, holding overall accountability for the Group’s climate risk programme. Page 250 How management reports to the Board – The Board delegates day-to-day management of the business and implementation of strategy to the Group CEO. During the year, the incumbent Group CEO was supported in his management of the Group by recommendations and advice from the Group Executive Committee (’GEC’), an executive forum comprising members of senior management that include chief executive officers of the global businesses and regions, as well as functional heads. Page 277 – During the year, the Board also oversaw the rationalisation of the ESG Committee and Sustainability Execution Committee into a single governance body (named the ESG Committee). These Board and executive level governance forums support senior management in the operationalisation of the Group’s sustainability strategy, through the oversight of the sustainability execution programme. For further details see page 72 . Page 281 Processes used to inform management – The Group Risk Management Meeting oversees the enterprise-wide management of all risks, including updates relating to the Group’s climate risk profile and risk appetite, top and emerging climate risks, and key climate initiatives. Page 72 Strategy a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term  (Companies Act 2006 - Sections 414CA and 414CB 2A (d)) Processes used to determine material risks and opportunities – When assessing our long-term scenarios, climate-related losses are expected to remain minimal in the short term and likely to increase in the medium and longer time horizon, driven by the transition to a net zero economy and greater physical risk impacts. Page 254 – Our models continue to incorporate a range of climate-specific metrics that could potentially impact our customers, including expected production volumes, revenue, costs and capital expenditure. Page 254 Relevant short-, medium-, and long-term time horizons – Our annual climate risk materiality assessment helps us to understand how climate risk may impact HSBC’s risk taxonomy. The assessment considers short-term (up to 2026), medium-term (2027-2035) and long-term (2036-2050) periods. Page 249 HSBC Holdings plc Annual Report on Form 20-F 467 Task Force on Climate-related Financial Disclosures (‘TCFD’) continued Recommendation Response Disclosure location Transition or physical climate-related issues identified – We aim to help our customers transition to net zero and a sustainable future by providing and facilitating between $750bn and $1tn of sustainable finance and investment by 2030. Our Sustainable Finance and Investment Data Dictionary 2024 includes a detailed definition of contributing activities. Page 43 – For transition risk, we have metrics in place to monitor the exposure of our wholesale corporate lending portfolio to six high transition risk sectors. As at 31 December 2024, the overall exposure to six high transition risk sectors was 18 % of total gross carrying amount of wholesale loans and advances. Our relationship managers engage with our key wholesale customers, including those in higher transition risk sectors, through a transition engagement questionnaire (‘TEQ’). In 2024, the TEQ was expanded to cover all geographies. The TEQ helps to gather information and assess our wholesale customers’ business model alignment to a net zero transition and their exposure to physical and transition risks. Page 251 – The impact on our wholesale portfolios is demonstrated by the table on page 255 which shows the size of exposures by sector in 2024 and the cumulative change in ECL compared with a counterfactual scenario (expressed as a multiple). The size of our exposure in each sector is represented by our exposure at default (‘EAD’) relative to one another. Page 255 – The table on page 256 demonstrates the impact on our commercial real estate (‘CRE’) portfolio for specific markets, including the three biggest markets – Hong Kong, the UK and the US. This shows the increase in cumulative ECL over different time horizons, under each scenario, compared with a counterfactual scenario (expressed as a multiple). Page 256 – We measure the impacts of climate and weather events on our buildings on an ongoing basis using historical, current and scenario-modelled forecast data. In 2024, there were 40 major storms that had a minor impact on three of our buildings. Page 257 Risks and opportunities by sector and/or geography – For transition risk, we have metrics in place to monitor the exposure of our wholesale corporate lending portfolio to six high transition risk sectors. These are automotive, chemicals, construction, contracting & building materials, metals and mining, oil and gas, and power and utilities. Page 251 – Within our mortgage portfolios, properties or areas with potentially heightened physical risk are identified and assessed locally with exposure monitored using risk indicators. A reduction in property value, higher insurance costs and insurance availability are potential future negative financial impacts for properties with higher physical risk. Geographically, for the UK lending balances, our highest flood risk exposures are the Greater London and South-East regions. Page 251 – Development of clean power generation is critical to achieving net zero. We supported Abu Dhabi Future Energy Company (Masdar) towards its equity commitments on new greenfield projects in renewable energy and energy efficiency, by acting as joint lead manager and bookrunner in raising $1bn through its second green bond issuance. Page 44 – We aim to help our customers transition to net zero and a sustainable future by providing and facilitating between $750bn and $1tn of sustainable finance and investment by 2030. Additional detailed information on our sustainable finance and investment progress can be found in the ESG Data Pack. Page 43 Concentrations of credit exposure to carbon-related assets (supplemental guidance for banks) – We report our exposure to the six high transition risk sectors in the wholesale portfolio, which are automotive, chemicals, construction, contracting & building materials, metals and mining, oil and gas, and power and utilities. For details, see the ESG Data Pack. Page 251 – We monitor the energy performance certificate (‘EPC’) ratings of individual properties from A (highest efficiency) through to G (least efficient) as EPCs are commonly used as an indicator of transition risk in the UK mortgage book. Page 251 Climate-related risks (transition and physical) in lending and other financial intermediary business activities (supplemental guidance for banks) – Our material exposure to climate risk relates to wholesale and retail client financing activity within our banking portfolio. Page 58 – We are also exposed to climate risk in relation to asset ownership by our insurance business and employee pension plans. Page 58 – HSBC Asset Management recognises that climate-related risks may impact the operational and financial performance of investee companies. The impact of these risks will vary depending on characteristics such as asset class, sector, business model and geography. HSBC Asset Management continues to integrate climate analysis into its actively managed product offerings and seeks to assess climate-related risks that could impact investment performance, where applicable and relevant. Page 58 – Our relationship managers engage with our key wholesale customers, including those in higher transition risk sectors, through a transition engagement questionnaire (‘TEQ’). In 2024, the TEQ was expanded to cover all geographies. The TEQ helps to gather information and assess our wholesale customers’ business model alignment to a net zero transition and their exposure to physical and transition risks. We use the responses to the questionnaire to risk-assess our key wholesale customers. Page 251 – Under the Current Commitments scenario, our modelled outputs predict that ECL will not be more than 25% higher than the counterfactual scenario for any of the assessed sectors. The highest impacts are seen in the chemicals, construction and building materials, power and utilities and agriculture and soft commodities sectors. Greater climate risks would crystallise in the Below 2 Degrees scenario with its gradually increasing transition to net zero, driven by pockets of customers in higher- emitting sectors that are continuously exposed to larger climate-related losses. Page 255 – The UK is our largest mortgage market, and as of November 2024, made up 46.7% of our global mortgage portfolio. Our ESG Data Pack includes our climate risk exposures for this portfolio across regions. The maturity profile of the UK mortgage book shows that the average remaining contractual term in the UK is 21.8 years. This means our strategic approach to climate risk considers both present day risk and long-term forward-looking risk, given that customers may choose to remain with us over the lifespan of the loan. For the UK mortgage book, flood data is available for 93.7% of the mortgage book of which 0.9 % is at a very high risk of flooding, with 2.7 % of the book at a high risk of flooding. Page 251 468 HSBC Holdings plc Annual Report on Form 20-F Additional information Task Force on Climate-related Financial Disclosures (‘TCFD’) continued Recommendation Response Disclosure location b) Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning (Companies Act 2006 - Sections 414CA and 414CB 2A (e)) Impact on strategy, business, and financial planning – We aim to help our customers transition to net zero and a sustainable future by providing and facilitating between $750bn and $1tn of sustainable finance and investment by 2030. Page 40 – Climate scenario analysis supports our strategy by assessing our potential exposures to risks and vulnerabilities under a range of climate scenarios. It is one of the key tools used to support the evaluation of portfolios in line with our net zero ambition. Our 2024 scenarios considered the key regions in which we operate and were designed to assess the impact on our balance sheet across three distinct periods: short term up to 2026; medium term from 2027 to 2035; and long term from 2036 to 2050. Page 253 – From a financial and capital planning perspective, we use climate scenario analysis to support the Group’s internal capital adequacy assessment process (‘ICAAP’) to understand the amount of capital the Group should hold to meet identified climate risks, including integration of climate impacts into the Group’s internal stress testing exercises. Page 253 – We have assessed the impact of climate risk on our balance sheet and have concluded that no incremental adjustments were needed to capture climate impacts in our financial statements for the year ended 31 December 2024. Page 41 – We have used climate scenarios to inform our organisation’s business, strategy and financial planning. In 2024, we continued to incorporate certain aspects of sustainable finance within our financial planning process. – We do not fully disclose impacts from climate-related opportunities on financial planning and performance including on revenue, costs and the balance sheet, quantitative scenario analysis, detailed climate risk exposures for all sectors and geographies or physical risk metrics. This is due to transitional challenges in relation to data limitations, although nascent work is ongoing in these areas. We expect these data limitations to be addressed in the medium term as more reliable data becomes available and technology solutions are implemented. Impact on products and services – We aim to help our customers transition to net zero and a sustainable future by providing and facilitating between $750bn and $1tn of sustainable finance and investment by 2030. Page 43 – Thermal coal mining: In 2021, absolute on-balance sheet financed emissions decreased by 71% to 1.38 Mt CO 2 e relative to the re-baselined 2020 figure. In 2022, the absolute on-balance sheet financed emissions of our portfolio decreased by 69% to 1.44 Mt CO 2 e relative to the re-baselined 2020 figure, and they rose by 4% from 2021 to 2022. The reduction from the 2020 re-baselined figure was due to strategic decisions and temporary factors, such as low loan drawdown levels. Page 54 Impact on supply chain and/or value chain – In 2024 we incorporated an additional supply chain data source to complement data from CDP (formerly the Carbon Disclosure Project). We continue to improve the measurement, quality and reporting of our supply chain emissions data to generate insights to drive targeted reduction activities. Page 56 – Our supply chain contributes c.81% of our operational emissions and is the area in which we face the most significant decarbonisation challenge. Many suppliers are still in the early phase of their decarbonisation journey . We have stepped up targeted efforts to support decarbonisation across our supply chain. Page 56 – We focus on building strategic partnerships that can help to create an enabling environment for mobilising finance, and support development and scaling-up of solutions for the net zero transition . In 2024 we donated approximately $9m in grant funding to help establish a portfolio of partnerships aligned to the strategic focus areas set out in our net zero transition plan: transitioning industry, catalysing the new economy, and decarbonising trade and supply chains. We are also supporting initiatives focused on driving progress on cross-cutting issues, such as nature and the just transition. Page 45 – As part of its stewardship activities, HSBC Asset Management engages on climate change issues with investee companies on a priority list, as defined in its Stewardship Plan. Page 58 Impact on adaptation and mitigation activities – In 2024 we achieved a 30.5% reduction in our energy consumption compared with 2019 (2023: 26.3% ). This has been achieved through optimising the use of our real estate portfolio and carrying out a reduction in our office space and data centres. We continue to optimise our assets to ensure greater efficiency and capitalise on new energy technologies. In 2024 we increased our purchase of electricity from renewable sources to 75.4% from 58.4% in 2023. This included increasing our coverage of green tariffs in India and mainland China. Renewable electricity can help unlock our emissions reduction potential, and we aim to achieve 100% renewable electricity across our own operations by 2030. Page 56 – This forward-looking data along with historical data helps inform real estate planning. We will continue to enhance our understanding of how extreme weather events impact our buildings portfolio as climate risk assessment tools improve and evolve. We buy insurance for property damage and business interruption and consider insurance as a loss-mitigation strategy depending on its availability and price. We regularly review and enhance our building selection process and global engineering standards and will continue to assess historical claims data to help ensure our building selection and design standards address the potential impacts of climate change. Page 257 Impact on operations – We measure the impacts of climate and weather events on our buildings on an ongoing basis using historical, current and scenario-modelled forecast data. In 2024, there were 40 major storms that had a minor impact on three of our buildings. We use stress testing to evaluate the potential impact on our owned or leased premises. Our 2024 scenario stress test analysed how nine climate change-related hazards – comprising coastal flooding, fluvial flooding, pluvial flooding, soil movement due to drought, temperature extremes, water stress, wildfires, landslides and tropical cyclones – could impact 2,719 of our properties . Page 257 Impact on investment in research and development – Our five-year Climate Solutions Partnership with the World Resources Institute, WWF and over 50 local partners, continues to support nature-based solutions and energy transition in Asia. Since 2020, $105m in funding has been deployed to our NGO partners. The energy programmes have engaged companies across Asia to help set new standards in climate commitments for their industries and mobilised finance to support the uptake of renewables. The nature programmes supported the Asia Sustainable Palm Oil Links programme, focused on promoting sustainable palm oil production, consumption and trade across Asia, and the Nature-based Solutions Accelerator, which supported projects to reach investment readiness. Page 45 – We are a founding funder of the Just Transition Finance Lab, hosted at the LSE’s Grantham Research Institute, which aims to accelerate solutions to achieve progress on climate and wider environmental goals through a people-centred approach. Since its launch in early 2024, the Lab has produced a range of outputs including: mapping just transition policies to a set of metrics, exploration of the role investors can play in facilitating a just transition in India, a case study of the coal-to-clean shift in Chile, and a detailed examination of the financial path to a just transition in the critical minerals sector. Page 45 HSBC Holdings plc Annual Report on Form 20-F 469 Task Force on Climate-related Financial Disclosures (‘TCFD’) continued Recommendation Response Disclosure location Impact on acquisitions or divestments – Our mergers and acquisitions process considers potential climate and sustainability-related targets, net zero transition plans and climate strategy, and how this relates to HSBC. Page 249 Impact on access to capital – We have considered the impact of climate-related issues on our businesses, strategy and financial planning. Our access to capital may be impacted by reputational concerns as a result of climate action or inaction. In addition, if we are perceived to mislead stakeholders on our business activities or if we fail to achieve our stated net zero ambitions, we could potentially face reputational damage, impacting our revenue-generating ability and our access to capital markets. We expect to make the disclosure in the medium term as more data becomes available. To manage these risks we have integrated climate risk into our existing risk taxonomy, and incorporated it within the risk management framework through the policies and controls for the existing risks where appropriate. Transition plan to a low- carbon economy – In 2020, we set an ambition to become a net zero bank by 2050. Since then, we have taken various actions across our organisation to support implementation as set out in our net zero transition plan. We continue to review both our transition plan and associated GHG targets to, where possible, ensure they remain consistent with assumptions used in our financial planning, including related financial approach for the implementation of the transition plan in the medium term (e.g. amount of capital and other expenditures supporting our decarbonisation strategy). The reference pathways we consider are global and we do not currently set GHG targets for individual countries or entities; however, we continue to explore the use of multiple climate-related scenarios to test achievability of the financed emissions targets and own operations ambition. c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario (Companies Act 2006 - Sections 414CA and 414CB 2A (f)) Embedding climate into scenario analysis – Climate scenario analysis supports our strategy by assessing our potential exposures to risks and vulnerabilities under a range of climate scenarios. It is one of the key tools used to support the evaluation of portfolios in line with our net zero ambition. Page 253 – Our 2024 scenarios considered the key regions in which we operate and were designed to assess the impact on our balance sheet across three distinct periods: short term up to 2026; medium term from 2027 to 2035; and long term from 2036 to 2050. Page 253 Key drivers of performance and how these have been taken into account – The 2024 climate scenario analysis exercise was designed to examine the climate risks and vulnerabilities of corporate counterparties across high transition risk sectors under climate scenarios of varying severity. Specifically, we measured the modelled effect on our projected ECL change over the short-, medium- and long-term horizons under each scenario. This was compared to a counterfactual scenario that excludes climate change impacts to isolate the climate only changes in ECL. Our analysis shows that over the longer term, we expect minimal losses to materialise when considering the Current Commitments scenario. Pages 255 and 255 – From a financial and capital planning perspective, we use climate scenario analysis to support the Group’s internal capital adequacy assessment process (‘ICAAP’) to understand the amount of capital the Group should hold to meet identified climate risks, including integration of climate impacts into the Group’s internal stress testing exercises. Page 253 – Climate scenario analysis also informs strategic planning by providing insights on the size and timing of financial impacts, and IFRS 9 loss provisioning to ensure climate risks are adequately provisioned for in our balance sheet, such as expected credit losses (‘ECL’). Page 253 Scenarios used and how they factored in government policies – Our scenarios are: Downside Physical Risk scenario , Severe Climate Stress scenario , Current Commitments scenario , Below 2 Degrees scenario and Delayed Transition Risk scenario . Page 253 – Our 2024 scenarios considered the key regions in which we operate and were designed to assess the impact on our balance sheet across three distinct periods: short term up to 2026; medium term from 2027 to 2035; and long term from 2036 to 2050. Page 253 – We have chosen these scenarios to provide a holistic view that supplements the Group’s current and future strategic thinking. The 2024 climate scenarios are underpinned by well-established industry bodies such as the Network for Greening Finance Phase IV, the Intergovernmental Panel on Climate Change (‘IPCC’) and International Energy Agency (‘IEA’), which are further enriched for additional granularity, ensuring consistency with industry-recognised work and reflecting the latest climate policy and economic outlook. Page 253 – The scenarios developed for climate scenario analysis are designed to examine HSBC’s financial performance and capital resilience across a wide range of potential climate outcomes. They are sufficiently diverse to enable HSBC’s key physical and transition risk vulnerabilities to be explored. To meet our global regulatory needs, we produced several climate stress tests for regulators around the world, including the Hong Kong Monetary Authority (‘HKMA’). Page 253 How our strategies may change and adapt – The analysis supports our approach to supporting our clients in the transition to net zero through assessing, where available, client level financial and credit risk metrics, and identifying where further analysis and climate risk focus is required. Page 253 – In our net zero transition plan published in January 2024 we committed to continually calibrate our approach to take into consideration the latest scientific methodologies, climate-related policies and developments in the real world given that our sector portfolios reflect progress in the regional economies where we operate. See page 18 for details. Page 40 – Our target-setting approach to date for on-balance sheet financed emissions and facilitated emissions, has been to utilise a single reference scenario – IEA’s NZE 2021 – to underpin both energy supply-related sectors (oil and gas; power and utilities; and thermal coal mining), and our published targets for demand-side sectors in transport (aviation and automotive) and heavy industry (cement; and iron, steel and aluminium). Page 46 – We do not currently fully disclose the impacts of transition and physical risk quantitatively, due to transitional challenges including data limitations and evolving science and methodologies. In 2024, we disclosed the potential impairment impacts for our wholesale and commercial real estate portfolios in different climate scenarios. We also disclose our exposure to flooding in our retail mortgage book for specific markets. For our wholesale book, we disclose potential implications on our expected credit losses for 11 sectors under two scenarios. These are accompanied with a heat map, illustrating how we expect the potential risks to evolve over time under a variety of scenarios. 470 HSBC Holdings plc Annual Report on Form 20-F Additional information Task Force on Climate-related Financial Disclosures (‘TCFD’) continued Recommendation Response Disclosure location Risk management a) Describe the organisation’s processes for identifying and assessing climate-related risks (Companies Act 2006 - Sections 414CA and 414CB 2A (b)) Process – The scenarios developed for climate scenario analysis are designed to examine HSBC’s financial performance and capital resilience across a wide range of potential climate outcomes. They are sufficiently diverse to enable HSBC’s key physical and transition risk vulnerabilities to be explored. We continue to enhance our climate scenario analysis exercises so that we can have a more comprehensive understanding of climate headwinds, risks and opportunities to support our strategic planning, actions and risk management. Page 253 – We continue to review policy implementation as we apply our sustainability risk policies in practice, and our operationalisation of such policies continues to be enhanced. We take a risk-based approach when identifying transactions and clients to which our sustainability risk policies apply and, where relevant, when reporting on relevant exposures, adopting approaches proportionate to risk and materiality. Page 59 Integration into policies and procedures – We continue to integrate climate risk into policies, processes and controls across many areas of our organisation, and we will continue to update these as our climate risk management capabilities mature over time. Page 250 Consider climate-related risks in traditional banking industry risk categories (supplementary guidance for banks) – We provide further details of how we have embedded the management of climate risk across key risk types , including wholesale credit risk, retail credit risk, treasury risk, traded risk, reputational risk, regulatory compliance risk, resilience risk, model risk, and financial reporting risk. Page 251 b) Describe the organisation’s processes for managing climate-related risks  (Companies Act 2006 - Sections 414CA and 414CB 2A (b)) Process and how we make decisions – The Group Risk Management Meeting and the Group Risk Committee receive regular updates on our climate risk profile and the progress of our climate risk programme. Page 250 – The Environmental Risk Steering Meeting (formerly the Environmental Risk Oversight Forum) provides oversight of environmental risk and the risk of greenwashing. Equivalent forums have been established at a regional level. Page 250 c) Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management framework  (Companies Act 2006 - Sections 414CA and 414CB 2A (c)) How we have aligned and integrated our approach – Our climate risk approach is aligned to our Group-wide risk management framework and three lines of defence model, which sets out how we identify, assess and manage our risks. Page 249 – We continue to develop our approach and climate risk capabilities across our businesses, by prioritising sectors, portfolios and counterparties with the highest impacts, and recognise that this is a long-term iterative process. Page 249 – Our annual climate risk materiality assessment helps us to understand how climate risk may impact HSBC’s risk taxonomy. Page 249 – In addition to this assessment, we also consider climate risk in our emerging risk reporting and scenario analysis . Page 249 How we take into account interconnections between entities and functions – Our climate risk approach is aligned to our Group-wide risk management framework and three lines of defence model, which sets out how we identify, assess and manage our risks. Page 249 – Through our climate risk programme, we have made progress on embedding climate considerations throughout our organisation. We also developed risk metrics to monitor and manage exposures, and further enhanced our internal climate scenario analysis. We continue to implement our climate risk programme to complete our annual materiality assessment and make changes to our policies, processes and capabilities to better embed climate considerations throughout our organisation. Page 147 – This includes increasing coverage and incorporating more mature data, climate analytics, frameworks and tools, and responding to emerging industry best practice and climate-related regulations. This also necessitates reflecting on how climate risk continues to evolve in the real world, and improving how we embed climate risk factors into strategic planning, transactions and decision making across our businesses. Page 249 HSBC Holdings plc Annual Report on Form 20-F 471 Task Force on Climate-related Financial Disclosures (‘TCFD’) continued Recommendation Response Disclosure location Metrics and targets a) Disclose the metrics used by the organisation to assess climate-related risk and opportunities in line with its strategy and risk management process (Companies Act 2006 - Sections 414CA and 414CB 2A (h)) Metrics used to assess the impact of climate- related risks on our loan portfolio – We have metrics in place to monitor the exposure of our wholesale corporate lending portfolio to six high transition risk sectors. As at 31 December 2024, the overall exposure to the six high transition risk sectors was 18 % of total gross carrying amount of wholesale loans and advances. Page 251 – The UK is our largest mortgage market, and as of November 2024, made up 46.7% of our global mortgage portfolio. Our ESG Data Pack includes our climate risk exposures for this portfolio across regions. The maturity profile of the UK mortgage book shows that the average remaining contractual term in the UK is 21.8 years. However, with some customers undertaking refinancing options during this term, the average term of the mortgage can be reduced to between five and eight years. For the UK mortgage book, flood data is available for 93.7% of the mortgage book of which 0.9 % is at a very high risk of flooding, with 2.7 % of the book at a high risk of flooding. We monitor the energy performance certificate (‘EPC’) ratings of individual properties from A (highest efficiency) through to G (least efficient) as EPCs are commonly used as an indicator of transition risk in the UK mortgage book. Page 251 – We have started to enhance our approach to managing net zero alignment risk in our wholesale portfolio, through developing portfolio steering capabilities and revenue assessments. While we have made progress, further work remains, including the need to develop additional metrics and tools to measure our exposure to climate-related risks. Page 250 Metrics used to assess progress against opportunities – Since 1 January 2020, we have provided and facilitated a cumulative $ 352.5 b n of sustainable finance and $ 41.1 bn of ESG and sustainable investing, as defined in our Sustainable Finance and Investment Data Dictionary 2024. This included 39% where the use of proceeds was dedicated to green financing, 12% to social financing, and 15% to other sustainable financing. It also included 24% of sustainability-linked financing and 10% of net new investment flows managed and distributed on behalf of investors. Page 43 – We do not currently fully disclose the proportion of revenue or proportion of assets, capital deployment or other business activities aligned with climate-related opportunities, including revenue from products and services designed for a low-carbon economy, forward-looking metrics consistent with our business or strategic planning time horizons. In relation to sustainable finance revenue and assets, we are disclosing certain elements. We expect the data and system limitations related to financial planning and performance, and climate-related opportunities metrics to be addressed in the medium term as more reliable data becomes available and technology solutions are implemented. We expect to further enhance this disclosure in the medium term. Board or senior management incentives – To help us achieve our ESG ambitions, a number of measures are included in the annual incentive and long-term incentive scorecards of the Group CEO, Group CFO and Group Executives that underpin the ESG metrics in the table on page 20 . Page 20 Internal carbon price – We do not currently disclose internal carbon prices due to transitional challenges, such as data challenges. However, we considered carbon prices as an input for our climate scenario analysis exercise. We expect to further enhance this disclosure in the medium term. Metrics used to assess the impact of climate risk on lending and financial intermediary business (supplemental guidance for banks) – As part of our 2024 climate scenario analysis exercise, we completed a detailed retail mortgage risk assessment for the UK, US, Singapore and Malaysia. In our 2023 exercise we also assessed Hong Kong, Australia and mainland China. Our coverage represented 91% of the balances in our global retail mortgage portfolio, across the two exercises. For our Hong Kong portfolio, we completed a short- and long-term scenario analysis exercise during late 2023 and early 2024 at the request of the HKMA. Our analysis shows that over the longer term, we expect minimal losses to materialise when considering the Current Commitments scenario. Page 255 – The impact on our wholesale portfolios is demonstrated by the table on page 255 which shows the size of exposures by sector in 2024 and the cumulative change in ECL compared with a counterfactual scenario (expressed as a multiple). The size of our exposure in each sector is represented by our exposure at default (‘EAD’) relative to one another. Page 255 – We do not fully disclose metrics used to assess the impact of climate-related physical (chronic) and transition (policy and legal, technology and market) risks on retail lending, parts of wholesale lending and other financial intermediary business activities (specifically credit exposure, equity and debt holdings, or trading positions, broken down by industry, geography, credit quality and average tenor). We are aiming to develop the appropriate systems, data and processes to provide these disclosures in future years. We disclose the exposure to six, high-transition risk wholesale sectors as a proportion of total wholesale loans and advances and the flood risk exposure and Energy Performance Certificate (‘EPC’) breakdown for the UK retail mortgage portfolio. 472 HSBC Holdings plc Annual Report on Form 20-F Additional information Task Force on Climate-related Financial Disclosures (‘TCFD’) continued Recommendation Response Disclosure location b) Disclose scope 1, scope 2 and, if appropriate, scope 3 greenhouse gas emissions and the related risks (Companies Act 2006 - Sections 414CA and 414CB 2A (h)) Our own operations – Our supply chain contributes c.81% of our operational emissions and is the area in which we face the most significant decarbonisation challenge. Many suppliers are still in the early phase of their decarbonisation journey . We have stepped up targeted efforts to support decarbonisation across our supply chain. Page 56 – We report GHG emissions associated with the energy used in our premises and employees’ business travel and our supply chain in tonnes of CO2 equivalent. As more of our suppliers report their emissions, we should be able to include more accurate data and fewer industry averages in the calculation. We have applied a data quality score to the sources of data we used to determine counterparty emissions. Page 57 Greenhouse gas emissions for lending and financial intermediary business (supplemental guidance for banks) – Our analysis of financed emissions comprises ‘on-balance sheet financed emissions’ and ‘facilitated emissions’, which we distinguish where necessary in our reporting. Our on-balance sheet financed emissions include emissions related to on-balance sheet lending, such as project finance and direct lending. Our facilitated emissions include emissions related to financing we help clients to raise through capital markets activities. Our analysis covers financing from Global Banking and Markets, and Commercial Banking. Page 46 – HSBC Asset Management recognises that climate-related risks may impact the operational and financial performance of investee companies. The impact of these risks will vary depending on characteristics such as asset class, sector, business model and geography. HSBC Asset Management continues to integrate climate analysis into its actively managed product offerings and seeks to assess climate-related risks that could impact investment performance, where applicable and relevant. Page 58 – We currently disclose partial scope 3 greenhouse gas emissions. We currently focus on disclosing only four out of fifteen categories of scope 3 greenhouse gas emissions, including business travel, supply chain and financed emissions, following our internal materiality assessment. In relation to financed emissions, we publish on-balance sheet financed emissions for a number of sectors, covering 2.7% of our loans and advances to customers at 31 December 2023, as detailed on page 54 . We also publish facilitated emissions for the oil and gas, and power and utilities sectors. Data quality of future disclosures on financed emissions and related risks are reliant on our customers publicly disclosing their greenhouse gas emissions, targets and plans, and related risks. We recognise the need to provide early transparency on climate disclosures but balance this with the recognition that existing data and reporting processes continue to require significant enhancements. c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets (Companies Act 2006 - Sections 414CA and 414CB 2A (g)) Details of targets set and whether they are absolute or intensity based – We aim to help our customers transition to net zero and a sustainable future by providing and facilitating between $750bn and $1tn of sustainable finance and investment by 2030. Page 43 – We set interim 2030 financed emissions targets. However, we use different time horizons for climate risk management. For climate risk, we define short term as time periods up to 2026; medium term is between 2027 and 2035; and long term is between 2036 and 2050. For financed emissions we do not plan to set 2026 targets. In 2024, we disclose interim 2030 financed emissions targets for seven sectors comprising five on-balance sheet and two combined financed emissions targets, as we outline on page 50 . We have set combined on-balance sheet financed emissions and facilitated emissions targets for two emissions-intensive sectors: oil and gas; and power and utilities; and report the combined progress for both sectors. In 2025, we plan to review our targets to consider the latest net zero-aligned scenarios available. For further details on the restatements and targets and progress of financed emissions, see ’Our approach to emissions re-baselines and restatements’ and ‘Targets and progress’ on pages 49 and 50 respectively . – We do not currently disclose a target for capital deployment. In relation to capital deployment, since 2015, we have issued more than $2bn of our own green bonds and structured green bonds with the capital invested into a variety of green projects, including: green buildings; and renewable energy and clean transportation projects. Following extensive internal and external review of HSBC’s green issuance framework, we published the updated HSBC Green Financing Framework in October 2024. This Green Financing Framework forms part of our sustainability strategy and sets out our approach to allocating amounts equivalent to the net proceeds raised through certain instruments and transactions against financing for businesses and projects that meet certain eligibility criteria. See the HSBC Green Financing Framework at www.hsbc.com/investors/fixed-income-investors/green-financing-framework for further information. – We do not currently disclose an internal carbon pricing target due to transitional challenges, such as developing the appropriate systems and processes, but we considered carbon prices as an input for our climate scenario analysis exercise. We expect to further enhance the disclosure in the medium term as more data becomes available. – We do not currently disclose targets used to measure and manage physical risk. This is due to transitional challenges, including the data limitations of physical risk metrics. For retail, we do not use targets to measure and manage physical risk. In 2024, we continued to use an internally developed global ‘soft trigger’ monitoring and review process for physical risk exposure where a market reaches or exceeds a set threshold, as this ensures markets are actively considering their balance sheet risk exposure to peril events. We also consider physical and transition risk as an input for our climate scenario analysis exercise. We expect to further enhance our disclosures as our data, quantitative scenario analysis, risk metrics and physical risk targets evolve, and technology solutions are implemented in the medium term. – We have described the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. However, taking into account the nature of our business, we do not consider water usage to be a material target for our business and, therefore, we have not included a target in this year’s disclosure. Other key performance indicators used – In 2024 we achieved a 30.5% reduction in our energy consumption compared with 2019 (2023: 26.3% ). Page 56 – In 2024 we increased our purchase of electricity from renewable sources to 75.4% from 58.4% in 2023. This included increasing our coverage of green tariffs in India and mainland China. Renewable electricity can help unlock our emissions reduction potential, and we aim to achieve 100% renewable electricity across our own operations by 2030. Page 56 HSBC Holdings plc Annual Report on Form 20-F 473 Information about the enforceability of judgments made in the US HSBC Holdings is a public limited company incorporated in England and Wales. Most of the Directors and executive officers live outside the US. As a result, it may not be possible to serve process on such persons or HSBC Holdings in the US or to enforce judgments obtained in US courts against them or HSBC Holdings based on civil liability provisions of the securities laws of the US. There is doubt as to whether English courts would enforce: – civil liabilities under US securities laws in original actions; or – judgments of US courts based upon these civil liability provisions. In addition, awards of punitive damages in actions brought in the US or elsewhere may be unenforceable in the UK. The enforceability of any judgment in the UK will depend on the particular facts of the case as well as the laws and treaties in effect at the time. Exchange controls and other limitations affecting equity security holders Other than certain economic sanctions that may be in force from time to time, there are currently no UK laws, decrees or regulations that would prevent the import or export of capital or remittance of distributable profits by way of dividends and other payments to holders of HSBC Holdings’ equity securities who are not residents of the UK. There are also no restrictions under the laws of the UK or the terms of the Memorandum and Articles of Association concerning the right of non-resident or foreign owners to hold HSBC Holdings’ equity securities or, when entitled to vote, to do so. Insider trading policies and procedures The Company has adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of its securities by directors, senior management and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to the Company. Dividends on the ordinary shares of HSBC Holdings The HSBC Holdings dividends approved, per ordinary share, in respect of each of the last five years were: First interim Second interim Third interim Fourth interim 1 Total 2 2024 3 $ 0.310 0.100 0.100 0.360 0.870 £ 0.243 0.076 0.078 0.287 0.684 HK$ 2.420 0.779 0.777 2.796 6.772 2023 $ 0.100 0.100 0.100 0.310 0.610 £ 0.079 0.080 0.080 0.248 0.487 HK$ 0.783 0.783 0.780 2.426 4.773 2022 $ 0.090 0.230 0.320 £ 0.079 0.185 0.264 HK$ 0.706 1.804 2.510 2021 $ 0.070 0.180 – – 0.250 £ 0.051 0.138 – – 0.189 HK$ 0.545 1.412 – – 1.957 2020 $ – – – 0.150 0.150 £ – – – 0.108 0.108 HK$ – – – 1.165 1.165 1 The fourth interim dividend for 2024 of $0.36 per ordinary share will be paid on 25 April 2025. The fourth interim dividend for 2024 has been translated into pounds sterling and Hong Kong dollars at the closing rate on 31 December 2024. 2 The above dividends approved are accounted for as disclosed in Note 8 on the Financial Statements. 3 The first interim dividend for 2024 includes a special dividend of $0.21. 4 The above dividend amounts for pounds sterling and Hong Kong dollars have been rounded. 474 HSBC Holdings plc Annual Report on Form 20-F Additional information American Depositary Shares A holder of HSBC Holdings’ American Depositary Shares (‘ADSs’) may have to pay, either directly or indirectly (via the intermediary through whom their ADSs are held) fees to the Bank of New York Mellon as depositary. Fees may be paid or recovered in several ways: by deduction from amounts distributed; by selling a portion of distributable property; by deduction from dividend distributions; by directly invoicing the holder; or by charging the intermediaries who act for them. Fees for the holders of the HSBC ADSs include: For: HSBC ADS holders must pay: Each issuance of HSBC ADSs, including as a result of a distribution of shares (including through a stock dividend, stock split or distribution of rights or other property) $5.00 (or less) per 100 HSBC ADSs or portion thereof Each cancellation of HSBC ADSs, including if the deposit agreement terminates $5.00 (or less) per 100 HSBC ADSs or portion thereof Transfer and registration of shares on our share register to/from the holder’s name to/from the name of The Bank of New York Mellon or its agent when the holder deposits or withdraws shares Registration or transfer fees (of which there currently are none) Conversion of non-US currency to US dollars Charges and expenses incurred by The Bank of New York Mellon with respect to the conversion Each cash distribution to HSBC ADS holders $0.02 or less per ADS Transfers of HSBC ordinary shares to the depositary in exchange for HSBC ADSs Any applicable taxes and/or other governmental charges Distribution of securities by the depository to HSBC ADS holders A fee equivalent to the fee that would be payable if securities distributed to you had been shares and those shares had been deposited for issuance of ADSs Any other charges incurred by the depositary or its agents for servicing shares or other securities deposited As applicable The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid. The depositary has agreed to reimburse us for expenses we incur, and to pay certain out-of-pocket expenses and waive certain fees, in connection with the administration, servicing and maintenance of our ADS programme. There are limits on the amount of expenses for which the depositary will reimburse us. During the year ended 31 December 2024, the depositary reimbursed, paid and/or waived fees and expenses totalling $1.769,264.44 in connection with the administration, servicing and maintenance of the programme. Nature of trading market HSBC Holdings ordinary shares are listed or admitted to trading on the London Stock Exchange (‘LSE’), the Hong Kong Stock Exchange (‘HKSE’), the Bermuda Stock Exchange and on the New York Stock Exchange (‘NYSE’) in the form of ADSs. HSBC Holdings maintains its principal share register in England and overseas branch share registers in Hong Kong and Bermuda (collectively, the ‘share register’). As at 31 December 2024, there were a total of 165,963 holders of record of HSBC Holdings ordinary shares on the share register. As at 31 December 2024, approximately 16.2m HSBC Holdings ordinary shares were registered in the HSBC Holdings’ share register in the name of 13,733  holders of record with addresses in the US. These shares represented approximately 0.09% of the total HSBC Holdings ordinary shares in issue. As at 31 December 2024, there were 4,475 holders of record of ADSs holding approximately 83.77m ADSs, representing approximately 418.85m HSBC Holdings ordinary shares, 4.402 of these holders had addresses in the US, holding approximately 83.75m ADSs, representing approximately 418.73m HSBC Holdings ordinary shares. As at 31 December 2024, approximately 2.33% of the HSBC Holdings ordinary shares were represented by ADSs held by holders of record with addresses in the US. Memorandum and Articles of Association The disclosure under the caption ‘Memorandum and Articles of Association’ contained in Form 20-F for the years ended 31 December 2000, 2001, 2014, 2018 and 2022 is incorporated by reference herein. HSBC Holdings plc Annual Report on Form 20-F 475 Differences in HSBC Holdings/New York Stock Exchange corporate governance practices Under the NYSE’s corporate governance rules for listed companies and the applicable rules of the SEC, as a NYSE-listed foreign private issuer, HSBC Holdings must disclose any significant ways in which its corporate governance practices differ from those followed by US companies subject to NYSE listing standards. HSBC Holdings believes the following to be the significant differences between its corporate governance practices and NYSE corporate governance rules applicable to US companies. US companies listed on the NYSE are required to adopt and disclose corporate governance guidelines. The UK Listing Rules of the FCA require each listed company incorporated in the UK to include in its annual report and accounts a statement of how it has applied the principles of the UK Corporate Governance Code issued by the Financial Reporting Council and a statement as to whether or not it has complied with the code provisions of The UK Corporate Governance Code throughout the accounting period covered by the annual report and accounts. A company that has not complied with the code provisions, or complied with only some of the code provisions or (in the case of provisions whose requirements are of a continuing nature) complied for only part of an accounting period covered by the report, must specify the code provisions with which it has not complied, and (where relevant) for which part of the reporting period such non-compliance continued, and give reasons for any non- compliance. During 2024, HSBC complied with the applicable code provisions of the UK Corporate Governance Code. The UK Corporate Governance Code does not require HSBC Holdings to disclose the full range of corporate governance guidelines with which it complies. Under NYSE standards, companies are required to have a nominating/ corporate governance committee composed entirely of directors determined to be independent in accordance with the NYSE’s corporate governance rules. All of the members of the Nomination & Corporate Governance Committee (excluding the Group Chairman) during 2024 were independent non-executive Directors, as determined in accordance with the UK Corporate Governance Code. The terms of reference of our Nomination & Corporate Governance Committee, which comply with the UK Corporate Governance Code, require that the Committee shall be comprised of the independent non-executive Directors of the Company and the Group Chairman. In addition to identifying individuals qualified to become Board members, a nominating/corporate governance committee must develop and recommend to the Board a set of corporate governance principles. The Nomination & Corporate Governance Committee’s terms of reference do not require it to develop and recommend corporate governance principles for HSBC Holdings, as HSBC Holdings is subject to the corporate governance principles of the UK Corporate Governance Code. The Board of Directors is responsible under its terms of reference for the development and review of Group policies and practices on corporate governance. Under the NYSE standards, companies are required to have a compensation committee composed entirely of directors determined to be independent in accordance with the NYSE’s corporate governance rules. All of the members of the Group Remuneration Committee during 2024 were independent non-executive Directors, as determined in accordance with the UK Corporate Governance Code. The terms of reference of our Group Remuneration Committee, which comply with the UK Corporate Governance Code, require the Committee (including the Chair) to comprise at least three members, all of whom shall be independent non-executive Directors. A compensation committee must review and approve corporate goals and objectives relevant to Chief Executive Officer ('CEO') compensation and evaluate a CEO’s performance in light of these goals and objectives. The Group Remuneration Committee’s terms of reference require it to review and approve performance-based remuneration of the executive Directors by reference to corporate goals and objectives that are set by the Board of Directors. Pursuant to NYSE listing standards, non-management directors must meet on a regular basis without management present and independent directors must meet separately at least once per year. The Group Chairman meets with the independent non-executive Directors without the executive Directors in attendance after each scheduled Board meeting and otherwise, as necessary. HSBC Holdings’ practice, in this regard, complies with the UK Corporate Governance Code. In accordance with the requirements of the UK Corporate Governance Code, HSBC Holdings discloses in its Annual Report and Accounts how the Board, its committees and the Directors are evaluated (on page 287 ) and provides extensive information regarding Directors’ compensation in the Directors’ remuneration report (on page 309 ). The terms of reference of HSBC Holdings’ Group Audit, Nomination & Corporate Governance and Group Remuneration Committees, as well as the Group Risk and Group Technology and Operations Committees, are available at www.hsbc.com/who-we-are/our-people/ board-of-directors/board-committees. NYSE listing standards require US companies to adopt a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. In 2021, the Board endorsed the Statement of Business Principles and Code of Conduct, which, pursuant to the requirements of the Sarbanes-Oxley Act, incorporates the Sarbanes-Oxley code of ethics (the 'Sarbanes-Oxley Principles') applicable to the Group CEO, as the principal executive officer, and to the Group Chief Financial Officer and Global Financial Controller. The Statement of Business Principles and Code of Conduct remains in force and applies to the executive directors and employees of the HSBC Group. The Statement of Business Principles and Code of Conduct is available at www.hsbc.com/who-we-are/purpose-values-and-strategy/our-conduct or from the Group Chief People & Governance Officer at 8 Canada Square, London E14 5HQ. During 2024, HSBC Holdings granted no waivers from its code of ethics. Under NYSE listing rules applicable to US companies, independent directors must comprise a majority of the board of directors. Currently, more than three-quarters of HSBC Holdings’ Directors are independent. Under the UK Corporate Governance Code, the HSBC Holdings Board determines whether a Director is independent in character and judgement and whether there are relationships or circumstances that are likely to affect, or could appear to affect, the Director’s judgement. Under the NYSE rules, a director cannot qualify as independent unless the board affirmatively determines that the director has no material relationship with the listed company; in addition, the NYSE rules prescribe a list of circumstances in which a director cannot be independent. The UK Corporate Governance Code requires a company’s board to assess director independence by affirmatively concluding that the director is independent of management and free from any business or other relationship that could materially interfere with the exercise of independent judgement. Lastly, a CEO of a US company listed on the NYSE must annually certify that he or she is not aware of any violation by the company of NYSE corporate governance standards. In accordance with NYSE listing rules applicable to foreign private issuers, HSBC Holdings’ Group CEO is not required to provide the NYSE with this annual compliance certification. However, in accordance with rules applicable to both US companies and foreign private issuers, the Group CEO is required promptly to notify the NYSE in writing after any executive officer becomes aware of any material non-compliance with the NYSE corporate governance standards applicable to HSBC Holdings. HSBC Holdings is required to submit annual and interim written affirmations of compliance with applicable NYSE corporate governance standards, similar to the affirmations required of NYSE-listed US companies. 476 HSBC Holdings plc Annual Report on Form 20-F Additional information Glossary of accounting terms and US equivalents Accounting term US equivalent or brief description Accounts Financial Statements Articles of Association Articles of incorporation Called up share capital Shares issued and fully paid Creditors Payables Debtors Receivables Deferred tax Deferred income tax Finance lease Capital lease Freehold Ownership with absolute rights in perpetuity Interests in associates and joint ventures Interests in entities over which we have significant influence or joint control, which are accounted for using the equity method Loans and advances Loans Loan capital Long-term debt Nominal value Par value One-off Non-recurring Ordinary shares Common stock Overdraft A line of credit, contractually repayable on demand unless a fixed-term has been agreed, established through a customer’s current account Preference shares Preferred stock Premises Property Provisions Liabilities of uncertain timing or amount Share premium account Additional paid-in capital Shares in issue Shares outstanding Write-offs Charge-offs HSBC Holdings plc Annual Report on Form 20-F 477 Reconciliations Form 20-F Item Number and Caption Location Page PART1 1. Identity of Directors, Senior Management and Advisers Not required for Annual Report — 2. Offer statistics and Expected Timetable Not required for Annual Report — 3. Key information A. [Reserved] B. Capitalisation and Indebtedness Not required for Annual Report — C. Reasons for the Offer and use of Proceeds Not required for Annual Report — D. Risk Factors Risk Review - Risk factors 154-166 4. Information on the Company A. History and Development of the Company Shareholder information 462,463,482 Strategic Report 1-38 ESG Review 39-82 Financial Review 83-142 Risk Review 143-265 Report of the Directors: Corporate Governance Report 266-359 B. Business review Strategic Report 1-38 Financial Review 99-157 Note 10 on the Financial Statements - Segmental analysis 405-408 C. Organisational Structure Strategic Report 1-38 Report of the Directors: Corporate Governance Report - Subsidiary governance 277-278 Note 19 on the Financial Statements - Investments in subsidiaries 427-429 Note 38 on the Financial Statements - HSBC Holdings’ subsidiaries, joint ventures and associates 452-460 D. Property, Plants and Equipment Note 22 on the Financial Statements - Prepayments, accrued income and other assets 433 4 A..Unresolved Staff Comments Not Applicable — 5. Operating and Financial Review and Prospects A. Operating Results Strategic Report 1-38 Financial Review 83-142 Risk Review 143-265 Note 15 on the Financial Statements - Derivatives 417-421 B. Liquidity and Capital Resources Financial Review - Loan maturity and interest sensitivity analysis 103 Risk Review - Capital and Liquidity Risk 234-240 Risk Review - Insurance Manufacturing Operations Risk 261-265 Note 30 on the Financial Statements - Maturity analysis of assets, liabilities and off- balance sheet commitments 439-444 Note 33 on the Financial Statements - Contingent liabilities, contractual commitments and guarantees 447 C. Research and Development, Patents and Licences, etc. Not Applicable — D. Trend Information Strategic Report 1-38 Financial Review 83-142 Risk Review 143-265 E. Critical Accounting Estimates Not Applicable — 6. Directors, Senior Management and Employees A. Directors and Senior Management Report of the Directors: Corporate Governance Report 266-359 B. Compensation Report of the Directors: Corporate Governance Report - Directors’ Remuneration Report 309-348 Note 5 on the Financial Statements - Employee compensation and benefits 396-401 Note 36 on the Financial Statements - Related party transactions 451-452 C. Board Practices Report of the Directors: Corporate Governance Report 266-359 Report of the Directors: Corporate Governance Report - Directors’ Remuneration Report 309-348 D. Employees Report of the Directors: Corporate Governance Report 266-359 Strategic Report 1-38 ESG Review - Social 61-70 Note 5 on the Financial Statements - Employee compensation and benefits 396-401 Note 36 on the Financial Statements - Related party transactions 451-452 E. Share Ownership Report of the Directors: Corporate Governance Report 266-359 Report of the Directors: Corporate Governance Report - Directors’ Remuneration Report 309-348 Note 5 on the Financial Statements - Employee compensation and benefits 396-401 Note 32 on the Financial Statements - Called up share capital and other equity instruments 445-447 F. Disclosure of a registrant’s action to recover erroneously awarded compensation Not Applicable — 478 HSBC Holdings plc Annual Report on Form 20-F Additional information Form 20-F Item Number and Caption Location Page 7. Major Shareholders and Related Party Transactions A. Major Shareholders Report of the Directors: Corporate Governance Report 266-359 B. Related Party Transactions Note 36 on the Financial Statements - Related party transactions 451-452 C. Interests of Experts and Counsel Not required for Annual Report — 8. Financial Information A. Consolidated Statements and Other Financial Information Financial Statements 363-460 Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of HSBC Holdings plc 361-362 Shareholder Information 461-482 B. Significant Changes Note 37 on the Financial Statements - Events after the Balance Sheet date 452 9. The Offer and Listing A. Offer and Listing Details Not required for Annual Report — B. Plan of Distribution Not required for Annual Report — C. Markets Shareholder Information 461-482 D. Exchange Controls Not required for Annual Report — E. Taxation Not required for Annual Report — F. Dividends and Paying Agents Not required for Annual Report — 10. Additional Information A. Share Capital Not required for Annual Report — B. Memorandum and Articles of Association Shareholder Information 461-482 C. Material Contracts Report of the Directors: Corporate Governance Report - Directors’ Remuneration Report 309-348 Corporate Governance Report - Contracts of significance 353 Note 35 on the Financial Statements - Legal proceedings and regulatory matters 448-450 D. Exchange Controls Shareholder Information 473 E. Taxation Shareholder Information 463-464 F. Dividends and Paying Agents Not required for Annual Report — G. Statements by Experts Not required for Annual Report — H. Documents on Display Shareholder Information 462-463 I. Subsidiary Information Not applicable — J. Annual Report to Security Holders Not applicable — 11. Quantitative and Qualitative Disclosures About Market Risk Risk Review 242-243, and 246-49 Risk Review - Market risk 246-249 Note 15 on the Financial Statements - Derivatives 417-421 Note 16 on the Financial Statements - Financial investments 421-422 12. Description of Securities Other than Equity Securities A. Debt Securities Not required for Annual Report — B. Warrants and Rights Not required for Annual Report — C. Other Securities Not required for Annual Report — D. American Depository Shares Taxation of shares and dividends 474 Shareholder information 461-482 PART II 13. Defaults, Dividends Arrearages and Delinquencies Not applicable — 14. Material Modifications to the Rights of Securities Holders and Use of Proceeds Not applicable — 15. Controls and Procedures Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of HSBC Holdings plc 361-362 Financial Review: Other Information 135-142 Financial Review: Other information - Management's review of internal controls over financial reporting 135 16A. Audit Committee Financial Expert Report of the Directors: Corporate Governance 266-359 16B. Code of Ethics Shareholder Information 474-475 16C. Principal Accountant Fees and Services Report of the Directors: Corporate Governance 266-359 Note 6 on the Financial Statements - Auditors’ remuneration 401 16D. Exemptions from the Listing Standards for Audit Committees Not applicable — 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers Report of the Directors: Corporate Governance 266-359 16F. Change in Registrant’s Certifying Accountant Not applicable — 16G. Corporate Governance Shareholder Information 461-482 16H. Mine Safety Disclosure Not applicable — 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable — 16J. Insider Trading Policies Shareholder information - Insider trading policies and prcedures 473 16K. Cybersecurity ESG Review - Cybersecurity 82 Risk Review - Top and Emerging risks 148-153 Risk review - Risk factors 154-166 Report of the Directors: Corporate Governance Report - Group Risk Committee 301-305 HSBC Holdings plc Annual Report on Form 20-F 479 PART III 17. Financial Statements Not applicable — 18. Financial Statements Financial Statements 363-460 19. Exhibits (including Certifications) * 480 HSBC Holdings plc Annual Report on Form 20-F Additional information Abbreviations Currencies £ British pound sterling CA$ Canadian dollar € Euro HK$ Hong Kong dollar MXN Mexican peso RMB Chinese renminbi SGD Singapore dollar $ United States dollar Abbreviations 1H24 First half of 2024 1Q24 First quarter of 2024 2Q24 Second quarter of 2024 3Q24 Third quarter of 2024 4Q24 Fourth quarter of 2024 9M24 Nine months of 2024 A ABS¹ Asset-backed security ADR American Depositary Receipt ADS American Depositary Share AGM Annual General Meeting AI Artificial intelligence AIBL Average interest-bearing liabilities AIEA Average interest-earning assets ALCO Asset and Liability Management Committee AML Anti-money laundering AML DPA Five-year deferred prosecution agreement with the US Department of Justice, entered into in December 2012 ANP Annualised new business premium ASEAN Association of Southeast Asian Nations AT1 Additional tier 1 B Banking NII Banking net interest income Basel Committee Basel Committee on Banking Supervision Basel II¹ 2006 Basel Capital Accord Basel III¹ Basel Committee’s reforms to strengthen global capital and liquidity rules Basel 3.1 Outstanding measures to be implemented from the Basel III reforms BEPS Base Erosion and Profit Shifting BGF Business Growth Fund, an investment firm that provides growth capital for small and mid-sized businesses in the UK and Ireland BoCom Bank of Communications Co., Limited, one of China’s largest banks BoE Bank of England Bps¹ Basis points. One basis point is equal to one-hundredth of a percentage point BVI British Virgin Islands C CAPM Capital asset pricing model CDS¹ Credit default swap CEA Commodity Exchange Act (US) CET1¹ Common equity tier 1 CGUs Cash-generating units CIB Corporate and Institutional Banking CMB Commercial Banking, a global business CMC Capital maintenance charge CODM Chief Operating Decision Maker COSO 2013 Committee of Sponsoring Organizations of the Treadway Commission (US) Corporate Centre Corporate Centre comprises Central Treasury, our legacy businesses, interests in our associates and joint ventures, central stewardship costs and consolidation adjustments CP¹ Commercial paper CRD IV¹ Capital Requirements Regulation and Directive CRR¹ Customer risk rating CRR II¹ The regulatory requirements of the Capital Requirements Regulation and Directive, the CRR II regulation and the PRA Rulebook CSA Credit support annex CSM Contractual service margin CVA¹ Credit valuation adjustment D DECL Disclosures about Expected Credit Losses Deferred shares Awards of deferred shares define the number of HSBC Holdings ordinary shares to which the employee will become entitled, generally between one and seven years from the date of the award, and normally subject to the individual remaining in employment DPD Days past due DPF Discretionary participation feature of insurance and investment contracts DVA¹ Debit valuation adjustment E EAD¹ Exposure at default EBA European Banking Authority EC European Commission ECB European Central Bank ECL Expected credit losses. In the income statement, ECL is recorded as a change in expected credit losses and other credit impairment charges. In the balance sheet, ECL is recorded as an allowance for financial instruments to which only the impairment requirements in IFRS 9 are applied EEA European Economic Area Eonia Euro Overnight Index Average EPC Energy performance certificate EPS Earnings per ordinary share ESG Environmental, social and governance EU European Union Euribor Euro interbank offered rate EVE Economic value of equity F FAST-Infra Finance to Accelerate the Sustainable Transition- Infrastructure FCA Financial Conduct Authority (UK) FDIC Federal Deposit Insurance Corporation FFVA Funding fair value adjustment estimation methodology on derivative contracts FPA Fixed pay allowance FRB Federal Reserve Board (US) FRC Financial Reporting Council FSCS Financial Services Compensation Scheme FTE Full-time equivalent staff FTSE Financial Times Stock Exchange index FVOCI¹ Fair value through other comprehensive income FX Foreign exchange G GAAP Generally accepted accounting principles GAC Group Audit Committee GBM Global Banking and Markets, a global business GDP Gross domestic product GEC Group Executive Committee GHG Greenhouse Gas GMP Guaranteed minimum pension GPS Global Payments Solutions, the business formerly known as Global Liquidity and Cash Management GPSP Group Performance Share Plan GRC Group Risk Committee HSBC Holdings plc Annual Report on Form 20-F 481 Group HSBC Holdings together with its subsidiary undertakings GTS Global Trade Solutions, the business formerly known as Global Trade and Receivables Finance H Hang Seng Bank Hang Seng Bank Limited, one of Hong Kong’s largest banks HKEx The Stock Exchange of Hong Kong Limited HKMA Hong Kong Monetary Authority HMRC HM Revenue and Customs Holdings ALCO HSBC Holdings Asset and Liability Management Committee Hong Kong Hong Kong Special Administrative Region of the People’s Republic of China HQLA High-quality liquid assets HSBC HSBC Holdings together with its subsidiary undertakings HSBC Bank plc HSBC Bank plc, also known as the non-ring-fenced bank HSBC Bank Middle East HSBC Bank Middle East Limited HSBC Bank USA HSBC Bank USA, N.A., HSBC’s retail bank in the US HSBC Canada The sub-group, HSBC Bank Canada, HSBC Trust Company Canada, HSBC Mortgage Corporation Canada and HSBC Securities Canada, consolidated for liquidity purposes HSBC Continental Europe HSBC Continental Europe HSBC Finance HSBC Finance Corporation, the US consumer finance company (formerly Household International, Inc.) HSBC Holdings HSBC Holdings plc, the parent company of HSBC HSBC Private Bank (Suisse) HSBC Private Bank (Suisse) SA, HSBC’s private bank in Switzerland HSBC UK HSBC UK Bank plc, also known as the ring-fenced bank HSBC USA The sub-group, HSBC USA Inc (the holding company of HSBC Bank USA) and HSBC Bank USA, consolidated for liquidity purposes HSI HSBC Securities (USA) Inc. HSSL HSBC Securities Services (Luxembourg) I IAS International Accounting Standards IASB International Accounting Standards Board IBE Independent Board Evaluation Ibor Interbank offered rate ICAAP Internal capital adequacy assessment process ICMA International Capital Market Association IEA International Energy Agency IFRS Accounting Standards International Financial Reporting Standards as issued by the International Accounting Standards Board ILAAP Internal liquidity adequacy assessment process IMA Internal model approach IMM Internal model method IRB¹ Internal ratings-based ISDA International Swaps and Derivatives Association ISSB International Sustainability Standard Board IVB HSBC Innovation Banking IWPB International Wealth and Premier Banking J JV Joint venture K KMP Key Management Personnel L LCR Liquidity coverage ratio LGBTQ+ Lesbian, gay, bisexual, transgender and queer. The plus sign denotes other non-mainstream groups on the spectrums of sexual orientation and gender identity LGD¹ Loss given default Libor London interbank offered rate Long term For our financial targets, we define long term as five to six years, commencing 1 January 2025 LTI Long-term incentive LTV¹ Loan to value M Mainland China People’s Republic of China excluding Hong Kong and Macau Medium term For our financial targets, we define medium term as three to four years, commencing 1 January 2025 MENAT Middle East, North Africa and Türkiye MREL Minimum requirement for own funds and eligible liabilities MRT¹ Material Risk Taker MSS Markets and Securities Services, HSBC’s capital markets and securities services businesses in Global Banking and Markets N Net operating income Net operating income before change in expected credit losses and other credit impairment charges NGO Non-governmental organisation NII Net interest income NIM Net interest margin NPS Net promoter score NSFR Net stable funding ratio NYSE New York Stock Exchange O OCI Other comprehensive income OECD Organisation of Economic Co-operation and Development OTC¹ Over-the-counter P PBT Profit before tax PCAF Partnership for Carbon Accounting Financials PD¹ Probability of default Performance shares¹ Awards of HSBC Holdings ordinary shares under employee share plans that are subject to corporate performance conditions Ping An Ping An Insurance (Group) Company of China, Ltd, the second-largest life insurer in the PRC POCI Purchased or originated credit-impaired financial assets PRA Prudential Regulation Authority (UK) PRC People’s Republic of China Principal plan HSBC Bank (UK) Pension Scheme PVIF Present value of in-force long-term insurance business and long-term investment contracts with DPF PwC The member firms of the PwC network, including PricewaterhouseCoopers LLP R RAS Risk appetite statement Repo¹ Sale and repurchase transaction Revenue Net operating income before ECL Reverse repo Security purchased under commitments to sell RNIV Risk not in VaR RoE Return on average ordinary shareholders’ equity RoTE Return on average tangible equity RWA¹ Risk-weighted asset S SAB Saudi Awwal Bank SAPS Self-administered pension scheme SASB Sustainability Accounting Standards Board SBTi Science Based Targets initiative SDG United Nation’s Sustainable Development Goals SEC Securities and Exchange Commission (US) ServCo group Separately incorporated group of service companies established in response to UK ring-fencing requirements Sibor Singapore interbank offered rate SIC Securities investment conduit SME Small and medium-sized enterprise Solitaire Solitaire Funding Limited, a special purpose entity managed by HSBC SPE¹ Special purpose entity SVB UK Silicon Valley Bank UK Limited, now HSBC Innovation Bank Limited T TCFD¹ Task Force on Climate-related Financial Disclosures THBFIX Thai Baht Interest Rate Fixing TNFD Taskforce on Nature-related Financial Disclosures TSR¹ Total shareholder return U UAE United Arab Emirates UK United Kingdom 482 HSBC Holdings plc Annual Report on Form 20-F Additional information UN United Nations US United States of America V VaR¹ Value at risk VIU Value in use W WEF World Economic Forum WPB Wealth and Personal Banking, a global business 1 A full definition is included in the glossary to the Annual Report and Accounts 2024 which is available at www.hsbc.com/investors. HSBC Holdings plc Incorporated in England and Wales on 1 January 1959 with limited liability under the UK Companies Act Registration number 617987 Registered Office and Group Head Office 8 Canada Square London E14 5HQ United Kingdom Telephone: 44 020 7991 8888 Facsimile: 44 020 7992 4880 Web: www.hsbc.com Corporate Brokers Morgan Stanley & Co. International plc 25 Cabot Square London E14 4QA United Kingdom Bank of America Securities 2 King Edward Street London EC1A 1HQ United Kingdom HSBC Bank plc 8 Canada Square London E14 5HQ United Kingdom © Copyright HSBC Holdings plc 2025 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Holdings plc Published by Global Finance, HSBC Holdings plc, London Designed by Global Finance, HSBC Holdings plc with Design Bridge and Partners, London Printed by Park Communications Limited, London, on Nautilus SuperWhite board and paper using vegetable oil-based inks. Made in Austria, the stocks comprise 100% de-inked post-consumer waste. Pulps used are totally chlorine-free. The FSC® recycled logo identifies a paper that contains 100% post- consumer recycled fibre certified in accordance with the rules of the Forest Stewardship Council® . Item 19. Exhibits Documents filed as exhibits to this annual report on Form 20-F: Exhibit Number Description 1.1 Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 1.1 to HSBC Holding plc’s Form 20-F filed with the SEC on February 22, 2023). 2.1 Description of rights of each class of securities registered under Section 12 of the Securities Exchange Act of 1934. 4.1 Undertaking by HSBC Holdings plc to the Financial Services Authority (incorporated by reference to Exhibit 99.3 to HSBC Holdings plc’s Form 6-K filed with the Securities and Exchange Commission on December 12, 2012), as replaced by the Direction by the Financial Conduct Authority to HSBC Holdings plc (incorporated by reference to HSBC Holdings plc’s Form 6-K filed with the Securities and Exchange Commission on April 12, 2013), as further replaced by the Direction by the Financial Conduct Authority to HSBC Holdings plc dated July 7, 2020. 4.2 Amendment dated January 16, 2024 to Paragraph 5 of the Annex to the Direction by the Financial Conduct Authority to HSBC Holdings plc dated July 7, 2020 (incorporated by reference to Exhibit 4.2 to HSBC Holdings plc’s Form 20-F filed with the SEC on February 22, 2024). 4.3 Service Agreement dated July 16, 2024 between HSBC Group Management Services Limited and Georges Elhedery. 4.4 Service Agreement dated October 21, 2024 between HSBC Group Management Services Limited and Manveen (Pam) Kaur. 4.5 Engagement Letter dated March 12, 2017, between HSBC Holdings plc and Mark Tucker (incorporated by reference to Exhibit 4.11 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on February 20, 2018). 8.1        Subsidiaries of HSBC Holdings plc (set forth in Note 38 to the consolidated financial statements included in this annual report on Form 20-F). 11.1 HSBC Holdings plc Insider Trading Policies and Procedures. 12.1 Certificate of HSBC Holdings plc’s Group Chief Executive pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 12.2 Certificate of HSBC Holdings plc’s Group Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 13.1 Annual Certification of HSBC Holdings plc’s Group Chief Executive and Group Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 15.1 Consent of PricewaterhouseCoopers LLP. 15.2 Pages of HSBC Holdings plc’s 2000 Form 20-F/A dated February 26, 2001 relating to the Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 14.2 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on March 20, 2006). 15.3 Page of HSBC Holdings plc’s 2001 Form 20-F dated March 13, 2002 relating to the Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 14.3 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on March 20, 2006). 15.4 Page of HSBC Holdings plc’s 2018 Form 20-F dated February 20, 2019 relating to the Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 15.4 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on February 19, 2020). 15.5 Page of HSBC Holdings plc’s 2022 Form 20-F dated February 22, 2023 relating to the Memorandum and Articles of Association of HSBC Holdings plc (incorporated by reference to Exhibit 15.5 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on February 22, 2024). 15.6 Consent of Willis Towers Watson Limited. 97 HSBC Holdings plc Policy for the Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97 to HSBC Holdings plc’s Form 20-F filed with the Securities and Exchange Commission on February 22, 2024). SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf. HSBC Holdings plc By: /s/ Manveen (Pam) Kaur Name: Manveen (Pam) Kaur Title: Group Chief Financial Officer Date: February 20, 2025", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000108911325000040/hsbc-20241231.htm"}
{"doc_id": "78b5190210429f6e34d08132c088c9de", "text": "6-K 1 a7568r.htm CANCELLATION OF TREASURY SHARES a7568r FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of October HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X Form 40-F HSBC HOLDINGS PLC 30 October 2023 Cancellation of Treasury Shares HSBC Holdings plc (the Company ) announces today that it has cancelled the\n325,273,407 ordinary shares of US$0.50 ( Ordinary\nShares ) that it held in\ntreasury. Following the cancellation, the Company does not hold any treasury\nshares. The Company's issued share capital with voting rights is\n19,473,203,852 Ordinary Shares. The Company also has in issue one\nnon-cumulative series A sterling preference share with a nominal\nvalue of GB£0.01 which does not, in the ordinary course,\ncontain voting rights at general meetings of the\nCompany. Therefore, the total number of voting rights in the Company is\n19,473,203,852 and this is the figure which may be used by\nshareholders as the denominator for the calculation by which they\nwill determine whether they are required to notify their interest\nin, or a change in their interest in, the Company under the\nFinancial Conduct Authority's Disclosure Guidance and Transparency\nRules and/or under Part XV of the Hong Kong Securities and Futures\nOrdinance. Any such notification should be\nsent to investorrelations@hsbc.com and\nshareholderquestions@hsbc.com. Lee Davis Corporate Governance & Secretariat + 44 (0) 207 991 3048 SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n30 October 2023", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495423013540/a7568r.htm"}
{"doc_id": "1b04e33f25cc63835c862d820c675ea9", "text": "6-K 1 a4603w.htm DIRECTOR/PDMR SHAREHOLDING a4603w FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of March HSBC Holdings plc 8\nCanada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or\nForm 40-F). Form\n20-F X Form 40-F HSBC HOLDINGS\nPLC 12 March 2026 Notification of Transactions by Persons Discharging Managerial\nResponsibilities (\"PDMRs\") Deferred awards (the \"Awards\"), Long Term Incentive awards (the\n\"LTI Awards\") and Buyout awards in\nordinary shares of US$0.50 each (the \"Shares\") in HSBC Holdings plc\n(the \"Company\") vested on 10 March 2026. Shares were sold to cover withholding tax over 10 and 11 March 2026\nat a volume weighted average price of £12.796142. 1.   Annual Incentive awards (Performance Year\n2018) Awards of Shares in the Company were granted in 2019 as a part of\nvariable pay for the performance year ended 31 December\n2018. On 10 March 2026, tranches of the Awards granted in 2019 vested and\nthe following transactions took place in London: Name Total number of Shares vested Number of Shares sold Pam Kaur 18,655 8,768 Pam Kaur is required to retain a number of Shares equivalent in\nvalue to those that vested under the Awards (net of tax\nliabilities) for twelve months from the original vesting\ndate. 2.   Annual Incentive awards (Performance Year\n2019) Awards of Shares in the Company were granted in 2020 as a part of\nvariable pay for the performance year ended 31 December\n2019. On 10 March 2026, tranches of the Awards granted in 2020 vested and\nthe following transactions took place in London: Name Total number of Shares vested Number of Shares sold Georges Elhedery 29,532 13,881 Pam Kaur 19,635 9,229 Barry O'Byrne 15,152 1,698 Georges Elhedery and Pam Kaur are required to retain a number of\nShares equivalent in value to those that vested under the Awards\n(net of tax liabilities) for twelve months from the original\nvesting date. 3.   Annual Incentive awards (Performance Year\n2020) Awards of Shares in the Company were granted in 2021 as a part of\nvariable pay for the performance year ended 31 December\n2020. On 10 March 2026, tranches of the Awards granted in 2021 vested and\nthe following transactions took place in London: Name Total number of Shares vested Number of Shares sold Georges Elhedery 61,104 28,718 Pam Kaur 42,388 19,922 Richard Blackburn 11,800 5,546 David Liao 18,753 - Barry O'Byrne 27,714 1,099 Michael Roberts 46,879 23,932 Suzanna White 8,792 3,944 Georges Elhedery and Pam Kaur  are required to retain a number\nof Shares equivalent in value to those that vested under the Awards\n(net of tax liabilities) for twelve months from the original\nvesting date. 4.   Annual Incentive awards (Performance Year\n2021) Awards of Shares in the Company were granted in 2022 as a part of\nvariable pay for the performance year ended 31 December\n2021. On 10 March 2026, tranches of the Awards granted in 2022 vested and\nthe following transactions took place in London: Name Total number of Shares vested Number of Shares sold Georges Elhedery 54,632 25,677 Pam Kaur 42,108 19,791 Richard Blackburn 11,711 5,505 David Liao 27,591 - Barry O'Byrne 25,908 - Michael Roberts 43,415 22,164 Surendra Rosha 27,591 4,415 Suzanna White 12,542 5,643 Georges Elhedery, Pam Kaur and Surendra Rosha are required to\nretain a number of Shares equivalent in value to those that vested\nunder the Awards (net of tax liabilities) for twelve months from\nthe original vesting date. 5.   Annual Incentive awards (Performance Year\n2022) Awards of Shares in the Company were granted in 2023 as a part of\nvariable pay for the performance year ended 31 December\n2022. On 10 March 2026, tranches of the Awards granted in 2023 vested and\nthe following transactions took place in London: Name Total number of Shares vested Number of Shares sold Pam Kaur 13,168 6,189 Richard Blackburn 10,245 4,815 David Liao 9,763 - Barry O'Byrne 11,015 - Michael Roberts 19,640 10,026 Surendra Rosha 9,763 1,562 Suzanna White 12,743 5,761 Pam Kaur and Surendra Rosha are required to retain a number of\nShares equivalent in value to those that vested under the Awards\n(net of tax liabilities) for twelve months from the original\nvesting date. 6.   Long Term Incentive awards (2022 to 2024 performance\nperiod) LTI Awards were granted in 2022, with a three-year forward-looking\nperformance period commencing on 1 January 2022 and ending on 31\nDecember 2024. The performance outcome of 75% was determined based\non an assessment by the Group Remuneration Committee of performance\nagainst financial and non-financial measures, as detailed in the\nDirectors' Remuneration Report in the Annual Report and Accounts\n2024. Shares vest in five equal annual instalments which commenced\nfrom March 2025. Georges\nElhedery, Pam Kaur and Surendra Rosha are required to retain a\nnumber of Shares equivalent in value to those that vested under the\nLTI Awards (net of tax liabilities) for twelve months from the\noriginal vesting date. Tranches\nof the LTI Awards granted in 2022 vested and the following\ntransactions took place in London: Name LTI Award lapsed Total number of Shares vested Number of Shares sold Georges Elhedery 44,798 33,597 15,791 Pam Kaur 33,616 25,211 11,850 David Liao 26,170 19,627 - Barry O'Byrne 23,861 17,895 - Michael Roberts 39,030 29,271 14,943 Surendra Rosha 26,170 19,627 3,141 7.   Long Term Incentive awards (2023 to 2025 performance\nperiod) LTI Awards were granted in 2023, with a three-year forward-looking\nperformance period commencing on 1 January 2023 and ending on 31\nDecember 2025. The performance outcome of 45.19% was determined\nbased on an assessment by the Group Remuneration Committee of\nperformance against financial and non-financial measures, as\ndetailed in the Directors' Remuneration Report in the Annual Report\nand Accounts 2025. Shares will vest in five equal annual\ninstalments from March 2026. Georges\nElhedery, Pam Kaur and Surendra Rosha are required to retain a\nnumber of Shares equivalent in value to those that vested under the\nLTI Awards (net of tax liabilities) for twelve months from the\noriginal vesting. Tranches\nof the LTI Awards granted in 2023 vested and the following\ntransactions took place in London: Name LTI Award lapsed Total number of Shares vested Number of Shares sold Georges Elhedery 137,833 22,728 10,682 Pam Kaur 80,239 13,230 6,218 David Liao 65,992 10,881 - Barry O'Byrne 66,396 10,948 - Michael Roberts 111,951 18,460 9,424 Surendra Rosha 65,992 10,881 1,741 8. Buyout\nAwards Buyout awards of Shares that were granted to Stuart Riley on 8 May\n2024, as a result of his HSBC appointment, vested. The following\ntransactions took place in London: Name Total number of Shares vested Number of Shares sold Stuart Riley 1 254,677 119,699 1 The\nthird tranche of the 8 May 2024 Buyout Award. A six-month retention\nperiod will apply. For the purpose of the below disclosures, the value of the awards\nwhich vested on 10 March 2026 has been calculated using the closing\nShare price of the Company on the London Stock Exchange on 9 March\n2026 of £12.51. The following disclosures are made in accordance with the UK\nversion of the EU Market Abuse Regulation 596/2014. 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Georges Elhedery 2 - Reason for the notification Position/status Group Chief Executive Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 201,593 £2,521,928.43 Aggregated £12.51 201,593 £2,521,928.43 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Lapse of Long Term Incentive awards Price Volume Total £0 182,631 £0 Aggregated £0 182,631 £0 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-11 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £12.80 94,749 £1,212,421.66 Aggregated £12.796 94,749 £1,212,421.66 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Pam Kaur 2 - Reason for the notification Position/status Group Chief Financial Officer Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 174,395 £2,181,681.45 Aggregated £12.51 174,395 £2,181,681.45 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Lapse of Long Term Incentive awards Price Volume Total £0 113,855 £0 Aggregated £0 113,855 £0 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-11 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £12.80 81,967 £1,048,861.37 Aggregated £12.796 81,967 £1,048,861.37 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Richard Blackburn 2 - Reason for the notification Position/status Group Chief Risk and Compliance Officer Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 33,756 £422,287.56 Aggregated £12.51 33,756 £422,287.56 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-11 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £12.80 15,866 £203,023.59 Aggregated £12.796 15,866 £203,023.59 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person David Liao 2 - Reason for the notification Position/status Co-Chief Executive, Asia and Middle East Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 86,615 £1,083,553.65 Aggregated £12.51 86,615 £1,083,553.65 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Lapse of Long Term Incentive awards Price Volume Total £0 92,162 £0 Aggregated £0 92,162 £0 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Barry O'Byrne 2 - Reason for the notification Position/status Chief Executive, International Wealth and Premier\nBanking Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 108,632 £1,358,986.32 Aggregated £12.51 108,632 £1,358,986.32 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Lapse of Long Term Incentive awards Price Volume Total £0 90,257 £0 Aggregated £0 90,257 £0 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-11 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £12.80 2,797 £35,790.81 Aggregated £12.796 2,797 £35,790.81 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Stuart Riley 2 - Reason for the notification Position/status Group Chief Information Officer Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 254,677 £3,186,009.27 Aggregated £12.51 254,677 £3,186,009.27 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-11 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £12.80 119,699 £1,531,685.40 Aggregated £12.796 119,699 £1,531,685.40 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Michael Roberts 2 - Reason for the notification Position/status Chief Executive, HSBC Bank plc and Corporate and Institutional\nBanking Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 157,665 £1,972,389.15 Aggregated £12.51 157,665 £1,972,389.15 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Lapse of Long Term Incentive awards Price Volume Total £0 150,981 £0 Aggregated £0 150,981 £0 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-11 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £12.80 80,489 £1,029,948.67 Aggregated £12.796 80,489 £1,029,948.67 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Surendra Rosha 2 - Reason for the notification Position/status Co-Chief Executive, Asia and Middle East Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 67,862 £848,953.62 Aggregated £12.51 67,862 £848,953.62 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Lapse of Long Term Incentive awards Price Volume Total £0 92,162 £0 Aggregated £0 92,162 £0 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-11 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £12.80 10,859 £138,953.31 Aggregated £12.796 10,859 £138,953.31 1 - Details of the person discharging managerial responsibilities /\nperson closely associated Name of natural person Suzanna White 2 - Reason for the notification Position/status Group Chief Operating Officer Initial notification/amendment Initial Notification 3 - Details of the issuer, emission allowance market participant,\nauction platform, auctioneer or auction monitor Full name of the entity HSBC Holdings plc Legal Entity Identifier code MLU0ZO3ML4LN2LL2TL39 4 - Details of the transaction(s) Transaction(s) summary table Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-10 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Vestings under the HSBC Share Plan 2011 Price Volume Total £12.51 34,077 £426,303.27 Aggregated £12.51 34,077 £426,303.27 Date of Transaction Financial Instrument Identification Code Place of Transaction Currency 2026-03-11 Ordinary shares of US$0.50 each GB0005405286 London Stock Exchange, Main Market (XLON) GBP - British Pound Nature of Transaction: Disposal Price Volume Total £12.80 15,348 £196,395.19 Aggregated £12.796 15,348 £196,395.19 For any\nqueries related to this notification, please\ncontact: Lee Davis Corporate Governance & Secretariat shareholderquestions@hsbc.com SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAngela McEntee Title:\nGroup Company Secretary Date:\n12 March 2026", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495426002188/a4603w.htm"}
{"doc_id": "0006c4a62fb1b82c3b2ab4f18310ae16", "text": "6-K 1 a2544t.htm DOCUMENTS AVAILABLE AT NSM a2544t FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of July HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or Form 40-F). Form\n20-F X      Form 40-F 30 July 2025 HSBC Holdings plc 2025 Interim Report The HSBC Holdings plc (the\n\"Company\") Interim\nReport for the half-year ended 30 June 2025 (the\n\"Interim Report\") has\nbeen submitted to the National Storage Mechanism today and will\nshortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism The Interim Report may be accessed via the Company's website\nat: www.hsbc.com/investors/results-and-announcements/all-reporting Printed copies of the Interim Report are expected to\nbe mailed on 22 August 2025 to\nshareholders who have opted to receive a hard\ncopy. Additional information The regulated information required to be communicated in unedited\nfull text is included in the Company's Interim Report which will\nshortly be available for inspection on the National Storage\nMechanism. This announcement is made in accordance with DTR\n6.3.5R(1A). SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n30 July 2025", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495425008646/a2544t.htm"}
{"doc_id": "4a916595e9a32e629f63c26906439ac3", "text": "6-K 1 a1914o.htm PRIVATISATION OF HANGSENGBANK - RESULTS OF MEETING a1914o FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the\nmonth of January HSBC Holdings plc 42nd\nFloor, 8 Canada Square, London E14 5HQ, England (Indicate\nby check mark whether the registrant files or will file annual\nreports under cover of Form 20-F or\nForm 40-F). Form\n20-F X Form 40-F Hong Kong Exchanges and Clearing Limited and The Stock Exchange of\nHong Kong Limited take no responsibility for the contents of this\nannouncement, make no representation as to its accuracy or\ncompleteness and expressly disclaim any liability whatsoever for\nany loss howsoever arising from or in reliance upon the whole or\nany part of the contents of this announcement. This announcement is for information purposes only and does not\nconstitute, or form part of, any invitation or offer to acquire,\npurchase or subscribe for any securities of HSBC Holdings, HSBC\nAsia Pacific or Hang Seng Bank, nor is it an invitation or offer to\nor a solicitation of any offer to acquire, purchase or subscribe\nfor securities of HSBC Holdings, HSBC Asia Pacific or Hang Seng\nBank, or the solicitation of any vote or approval in any\njurisdiction, nor shall there be any sale, issuance or transfer of\nsecurities of HSBC Holdings, HSBC Asia Pacific or Hang Seng Bank in\nany jurisdiction in contravention of applicable law. This\nannouncement is not for release, publication or distribution, in\nwhole or in part, in or into or from any other jurisdiction where\nto do so would constitute a violation of the relevant laws or\nregulations of such jurisdiction. HSBC Holdings plc (Hong\nKong Stock Code: 5) The Hongkong and Shanghai Banking Corporation Limited Hang Seng Bank Limited (Stock\nCodes: 11 (HKD Counter) and 80011\n(RMB Counter)) JOINT ANNOUNCEMENT (1) PROPOSAL FOR THE PRIVATISATION OF HANG SENG BANK\nLIMITED BY THE HONGKONG AND SHANGHAI BANKING CORPORATION\nLIMITED BY WAY OF A SCHEME OF ARRANGEMENT UNDER SECTION 673 OF THE COMPANIES ORDINANCE (2) PROPOSED WITHDRAWAL OF LISTING OF HANG SENG BANK\nSHARES (3) RESULTS OF THE HANG SENG BANK COURT MEETING AND THE HANG SENG BANK GENERAL MEETING AND (4) CLOSURE OF REGISTER OF MEMBERS OF HANG SENG BANK\nLIMITED Joint Financial Advisers to HSBC Holdings and HSBC Asia\nPacific (in alphabetical order) BofA\nSecurities          \nGoldman Sachs Financial Adviser to Hang Seng Bank Morgan Stanley Financial Adviser to HSBC Asia Pacific The Hongkong and Shanghai Banking Corporation Limited Independent Financial Adviser to the Hang Seng Bank\nIBC Somerley Capital Limited RESULTS OF THE HANG SENG BANK COURT MEETING AND THE HANG SENG BANK\nGENERAL MEETING On\nThursday, 8 January 2026, (i)   the\nresolution to approve the Scheme was approved at the Hang Seng Bank\nCourt Meeting; and (ii)  the\nspecial resolution to approve and give effect to the Proposal and\nthe Scheme, including the reduction and restoration of the issued\nshare capital of Hang Seng Bank under the Proposal and the Scheme,\nwas approved at the Hang Seng Bank General Meeting. CLOSURE OF REGISTER OF MEMBERS For the\npurpose of determining the Scheme Shareholders who are qualified\nfor the entitlements to the Scheme Consideration under the Scheme,\nthe register of members of Hang Seng Bank will be closed from\nTuesday, 20 January 2026 onwards and during such period, no\ntransfer of Hang Seng Bank Shares will be effected. PROPOSED WITHDRAWAL OF LISTING OF HANG SENG BANK\nSHARES Subject\nto the Scheme becoming binding and effective, it is expected that\nthe listing of the Hang Seng Bank Shares on the Hong Kong Stock\nExchange will be withdrawn with effect from 4:00 p.m. on Tuesday,\n27 January 2026. INTRODUCTION Reference is made to the composite scheme document dated 15\nDecember 2025 jointly issued by HSBC Holdings plc\n(\" HSBC\nHoldings \"), The Hongkong and\nShanghai Banking Corporation Limited (\" HSBC Asia\nPacific \") and Hang Seng Bank\nLimited (\" Hang Seng\nBank \") in relation to the\nProposal and the Scheme (the \" Scheme\nDocument \"). Unless otherwise defined herein, terms defined in the Scheme\nDocument shall have the same meanings when used in this joint\nannouncement. RESULTS OF THE HANG SENG BANK COURT MEETING The Hang Seng Bank Court Meeting was held on Thursday, 8 January\n2026 in the form of a hybrid meeting at Grand Ballroom, 16/F,\nHopewell Hotel, 15 Kennedy Road, Wan Chai, Hong Kong and via the\nCourt Meeting Online Platform ( https://meetings.computershare.com/HangSengCourtMeeting ). Under section 670 of the Companies Ordinance, where an arrangement\nis proposed to be entered into by a company with the members, or\nany class of the members, of the company, the High Court may, on an\napplication made by the company, any of the members or any member\nof that class, order a meeting of those members or of that class of\nmembers, as the case may be, to be summoned in any manner that the\nHigh Court directs. Under section 673 of the Companies Ordinance, if the members or the\nclass of members with whom the arrangement is proposed to be\nentered into agree or agrees to the arrangement, the High Court\nmay, on application by the company, any of the members or any\nmember of that class, as the case may be, sanction the arrangement.\nAn arrangement sanctioned by the High Court as aforesaid is binding\non the company and the members or the class of members with whom\nthe arrangement is proposed to be entered into. The Scheme is a takeover offer under section 674 of the Companies\nOrdinance. Under section 674 of the Companies Ordinance, where the\narrangement involves a takeover offer, the members or the class of\nmembers agree or agrees to the arrangement if, at a meeting\nsummoned as directed by the High Court, members representing at\nleast 75% of the voting rights of the members or the class of\nmembers, as the case may be, present and voting, in person, via the\nCourt Meeting Online Platform or by proxy, agree to the arrangement\nand the votes cast against the arrangement at the meeting do not\nexceed 10% of the total voting rights attached to all the Ordinance\nDisinterested Shares in the company or of the class in the company,\nas the case may be. In addition to satisfying the requirements imposed by law as\nsummarised above, Rule 2.10 of the Takeovers Code requires, except\nwith the consent of the Executive, that the Scheme may only be\nimplemented if: (a)\nthe Scheme is approved by at least 75% of the votes attaching to\nthe Code Disinterested Shares that are cast either in person, via\nthe Court Meeting Online Platform or by proxy at the Hang Seng Bank\nCourt Meeting; and (b)\nthe number of votes cast against the resolution to approve the\nScheme at the Hang Seng Bank Court Meeting is not more than 10% of\nthe votes attaching to all the Code Disinterested\nShares. At the Hang Seng Bank Court Meeting: (i)  \nholders of 236,604,569 Scheme Shares (representing approximately\n85.75% of the voting rights of the Scheme Shareholders present and\nvoting in person, via the Court Meeting Online Platform or by proxy\nat the Hang Seng Bank Court Meeting) voted in favour of the\nresolution to approve the Scheme and holders of 39,304,688\nOrdinance Disinterested Shares (representing (i) approximately\n14.25% of the voting rights of the Scheme Shareholders present and\nvoting in person, via the Court Meeting Online Platform or by proxy\nat the Hang Seng Bank Court Meeting and (ii) approximately 5.89% of\nthe total voting rights attaching to all the Ordinance\nDisinterested Shares) voted against the resolution to approve the\nScheme; and (ii) \nCode Disinterested Shareholders holding 236,604,569 Code\nDisinterested Shares (representing approximately 85.75% of the\nvotes attaching to the Code Disinterested Shares that were cast in\nperson, via the Court Meeting Online Platform or by proxy at the\nHang Seng Bank Court Meeting) voted in favour of the resolution to\napprove the Scheme and Code Disinterested Shareholders holding\n39,304,688 Code Disinterested Shares (representing (i)\napproximately 14.25% of the voting rights attaching to the Code\nDisinterested Shares that were cast in person, via the Court\nMeeting Online Platform or by proxy at the Hang Seng Bank Court\nMeeting and (ii) approximately 5.94% of the total voting rights\nattaching to all the Code Disinterested Shares) voted against the\nresolution to approve the Scheme. Accordingly, the resolution proposed at the Hang Seng Bank Court\nMeeting to approve the Scheme was duly passed in accordance with\nthe requirements of sections 673 and 674 of the Companies Ordinance\nand Rule 2.10 of the Takeovers Code. As at the Meeting Record Time: (1)\nthe issued share capital of Hang Seng Bank comprised 1,872,937,536\nHang Seng Bank Shares; (2) there were (a) no treasury shares held by Hang\nSeng Bank (including any treasury shares held or deposited with\nCCASS) and (b) no Hang Seng Bank Shares\nrepurchased by Hang Seng Bank which were pending\ncancellation; (3)\nHSBC Asia Pacific (through its wholly-owned subsidiary Wayfoong\nNominees Limited) held 1,188,057,371 Hang Seng Bank Shares as a\nstrategic shareholding, representing approximately 63.43% of the\ntotal issued share capital of Hang Seng Bank. Such Hang Seng Bank\nShares did not form part of the Scheme Shares. HSBC Asia Pacific\nconfirms that such Hang Seng Bank Shares were not voted at the Hang\nSeng Bank Court Meeting; (4)\nthe Scheme Shares comprised a total of 684,880,165 Hang Seng Bank\nShares held or beneficially owned by the Scheme Shareholders\n(including the HSBC Asia Pacific Concert Parties), representing\napproximately 36.57% of the total issued Hang Seng Bank\nShares; (5)\nsave for the Hang Seng Bank Shares which were held by (i) members\nof the HSBC Group and the Hang Seng Bank Group for and on behalf of\nnon-discretionary clients (including, for example, as a custodian\nor a non-discretionary trustee) and (ii) any member of the BofA\nSecurities group or the Goldman Sachs group for and on behalf of\ntheir respective non-discretionary clients or in the capacity as\nexempt principal traders or exempt fund managers (in each case\nrecognised by the Executive as such for the purpose of the\nTakeovers Code),  HSBC Asia Pacific and HSBC Asia Pacific\nConcert Parties held an aggregate of 22,813,471 Hang Seng Bank\nShares which formed part of the Scheme Shares, representing\napproximately 1.22% of the total issued share capital of Hang Seng\nBank.  HSBC Asia Pacific confirms that such Hang Seng Bank\nShares were not voted at the Hang Seng Bank Court\nMeeting; (6)\nLuanne Lim Hui Hung held 2,000 Hang Seng Bank Shares, representing\napproximately 0.0001% of the total issued share capital of Hang\nSeng Bank. Ms. Lim is an executive director and chief executive of\nHang Seng Bank. Her positions with the Hang Seng Bank Group do not\nrender her an HSBC Asia Pacific Concert Party. Both Ms. Lim and\nHSBC Asia Pacific confirm that Ms. Lim is not acting in concert\nwith HSBC Asia Pacific. However, in the light of her position held\nwithin the HSBC Group entities, Ms. Lim has undertaken to abstain\nfrom voting at the Hang Seng Bank Court Meeting in respect of her\nown beneficial holdings in the Hang Seng Bank Shares. Ms. Lim has\nconfirmed that such Hang Seng Bank Shares were not voted at the\nHang Seng Bank Court Meeting; (7)\nthe HSBC Group (including but not limited to HSBC Asia Pacific and\nthe Hang Seng Bank Group) held approximately 390,684,259 Hang Seng\nBank Shares on a non-discretionary basis and on behalf of its\nclients. Such Hang Seng Bank Shares formed part of the Scheme\nShares and were permitted to be voted at the Hang Seng Bank Court\nMeeting; (8)\nHang Seng Bank Shares held by members of Morgan Stanley group, the\nBofA Securities group or the Goldman Sachs group respectively\nacting in the capacity of exempt principal trader were not\npermitted to be voted at the Hang Seng Bank Court Meeting unless\nthe Executive allowed such Hang Seng Bank Shares to be so voted.\nHang Seng Bank Shares held by such exempt principal traders in the\nMorgan Stanley group, the BofA Securities group or the Goldman\nSachs group respectively were allowed to be voted at the Hang Seng\nBank Court Meeting if (i) the relevant connected exempt principal\ntrader held the Hang Seng Bank Shares as a simple custodian for and\non behalf of non-discretionary clients, and (ii) there were\ncontractual arrangements in place between the relevant connected\nexempt principal trader and its clients that strictly prohibited\nthe relevant connected exempt principal trader from exercising any\nvoting discretion over the relevant Hang Seng Bank Shares, and all\nvoting instructions originated from the client only (if no\ninstructions were given, then no votes were permitted to be cast\nfor the relevant Hang Seng Bank Shares held by the relevant\nconnected exempt principal trader). Morgan Stanley has confirmed\nexempt principal traders in the Morgan Stanley group, BofA\nSecurities has confirmed exempt principal traders in the BofA\nSecurities group, and Goldman Sachs has confirmed exempt principal\ntraders in the Goldman Sachs group, respectively, did not exercise\nvoting rights attached to the Hang Seng Bank Shares held by them\n(other than those Hang Seng Bank Shares held by such exempt\nprincipal trader as a simple custodian for and on behalf of\nnon-discretionary clients who were entitled to vote in the context\nof the Proposal and over which the relevant exempt principal trader\nhad no voting discretion) at the Hang Seng Bank Court\nMeeting; (9)\nthe total number of Ordinance Disinterested Shares for the purpose\nof sections 673 and 674 of the Companies Ordinance was 667,232,880,\nrepresenting approximately 35.62% of the total issued share capital\nof Hang Seng Bank. Accordingly, 10% of the Ordinance Disinterested\nShares amounted to 66,723,288 Hang Seng Bank Shares;\nand (10) the total number of Code Disinterested Shares for the\npurpose of Rule 2.10 of the Takeovers Code was 662,066,694,\nrepresenting approximately 35.35% of the total issued share capital\nof Hang Seng Bank. Accordingly, 10% of the Code Disinterested\nShares amounted to 66,206,669 Hang Seng Bank Shares. Save as disclosed in paragraph (8) above, no Scheme Shareholder was\nrequired to abstain from voting, or abstain from voting in favour\nof the Scheme, at the Hang Seng Bank Court Meeting in accordance\nwith the Takeovers Code or the Hong Kong Listing Rules (including\nRule 13.40 of the Hong Kong Listing Rules).  Save as disclosed\nin paragraphs (5), (6) and (8) above, the Scheme Document did not\nindicate any Scheme Shareholder's intention to vote against or to\nabstain from voting in respect of the Scheme at the Hang Seng Bank\nCourt Meeting. Ms. Cordelia Chung, an independent non-executive director of Hang\nSeng Bank, was the chairman of the Hang Seng Bank Court Meeting.\nMr. Edward Cheng Wai Sun, being an independent non-executive\ndirector of Hang Seng Bank and the Chairman of the Hang Seng Bank\nBoard,  Ms. Luanne Lim Hui Hung and Ms. Saw Say Pin, both\nbeing executive directors of Hang Seng Bank, and Mr. Clement Kwok\nKing Man, Ms. Patricia Lam Sze Wan, Ms. Lin Huey Ru and Ms. Wang\nXiao Bin, all being independent non-executive directors of Hang\nSeng Bank, attended the Hang Seng Bank Court Meeting. Computershare Hong Kong Investor Services Limited, being the Share\nRegistrar, was the scrutineer for the vote-taking at the Hang Seng\nBank Court Meeting. RESULTS OF THE HANG SENG BANK GENERAL MEETING The Hang Seng Bank General Meeting was held on Thursday, 8 January\n2026 in the form of a hybrid meeting at Grand Ballroom, 16/F,\nHopewell Hotel, 15 Kennedy Road, Wan Chai, Hong Kong and via the\nGeneral Meeting Online Platform ( https://meetings.computershare.com/HangSengGeneralMeeting ). The poll results in respect of the special resolution proposed at\nthe Hang Seng Bank General Meeting were as follows: Special Resolution Votes cast (including by proxy) (approximate %) Total For Against To\napprove the Scheme between Hang Seng Bank and the Scheme\nShareholders; for the purpose of giving effect to the Scheme, to\napprove (i) the reduction of the share capital of Hang Seng Bank,\n(ii) the increase in the share capital of Hang Seng Bank and (iii)\nthe allotment and issue of new shares in the capital of Hang Seng\nBank to HSBC Asia Pacific (or its nominee); to approve the\nwithdrawal of listing of shares of Hang Seng Bank on the Hong Kong\nStock Exchange, subject to the Scheme taking effect; and to\nauthorise the directors of Hang Seng Bank to do all acts and things\nconsidered by them to be necessary or desirable in connection with\nthe implementation of the Scheme, as more particularly set out in\nthe Notice of Hang Seng Bank General Meeting dated 15 December\n2025. 1,463,860,421 (100%) 1,424,322,294 (97.30%) 39,538,127 (2.70%) Accordingly, the special resolution to approve and give effect to\nthe Proposal and the Scheme, including the reduction and\nrestoration of the issued share capital of Hang Seng Bank under the\nProposal and the Scheme, was\nduly approved (by way of a poll) by a majority of at least 75% of\nthe votes cast by the Hang Seng Bank Shareholders present and\nvoting in person, via the General Meeting Online Platform and by\nproxy at the Hang Seng Bank General Meeting. As at the date of the Hang Seng Bank General Meeting, a total of\n1,872,937,536 Hang Seng Bank Shares were in issue and there were\n(a) no treasury shares held by Hang Seng Bank (including any\ntreasury shares held or deposited with CCASS) and (b) no Hang Seng\nBank Shares repurchased by Hang Seng Bank which were pending\ncancellation. There were no Hang Seng Bank Shares entitling the holders thereof\nto attend where such holders were required to abstain from voting\nin favour of the\nspecial resolution at the Hang Seng Bank General\nMeeting pursuant\nto Rule 13.40 of the Hong Kong Listing Rules. No Hang Seng Bank\nShareholder was required under the Hong Kong Listing Rules to\nabstain from voting on the special resolution at the Hang Seng Bank\nGeneral Meeting. The\nScheme Document did not indicate any person's\nintention to vote against or to abstain from voting on the special\nresolution at the Hang Seng Bank General\nMeeting. All\nHang Seng Bank Shareholders whose names appeared in the register of\nmembers of Hang Seng Bank as at the Meeting Record Time were\nentitled to attend and vote on the special resolution at the Hang\nSeng Bank General Meeting. Ms. Cordelia Chung was the chairman of the Hang Seng Bank General\nMeeting. Mr. Edward Cheng Wai Sun, being an independent\nnon-executive director of Hang Seng Bank and the Chairman of the\nHang Seng Bank Board,  Ms. Luanne Lim Hui Hung and Ms. Saw Say\nPin, both being executive directors of Hang Seng Bank, and Mr.\nClement Kwok King Man, Ms. Patricia Lam Sze Wan, Ms. Lin Huey Ru\nand Ms. Wang Xiao Bin, all being independent non-executive\ndirectors of Hang Seng Bank,  attended the Hang Seng Bank\nGeneral Meeting. Computershare Hong Kong Investor Services Limited, being the Share\nRegistrar, was the scrutineer for the vote-taking at the Hang Seng\nBank General Meeting. CURRENT STATUS OF THE CONDITIONS OF THE PROPOSAL As at the date of this joint announcement, (i) Conditions (a) and\n(b) have been satisfied; and (ii) Conditions (e) to (i) have been\nsatisfied (but subject to their ongoing satisfaction or (if\napplicable) waiver). In this regard, the Proposal remains, and the\nScheme will become binding and effective on Hang Seng Bank and all\nthe Scheme Shareholders, subject to the satisfaction or (if\napplicable) waiver of the Conditions as stated in the section\nheaded \" 5.\nConditions of the Proposal \" in\nthe Explanatory Statement set out on pages 96 to 100 of the Scheme\nDocument. Subject to such Conditions being satisfied or (if applicable)\nwaived on or before the Conditions Long Stop Date, the Scheme is\nexpected to become binding and effective on Monday, 26 January\n2026. As at the date of this joint announcement, none of HSBC Asia\nPacific, HSBC Holdings and Hang Seng Bank is aware of any facts or\ncircumstances which would lead to such Conditions not being\nfulfilled. CLOSURE OF REGISTER OF MEMBERS FOR SCHEME ENTITLEMENT For the purpose of determining the Scheme Shareholders who are\nqualified for the entitlements to the Scheme Consideration under\nthe Scheme, the register of members of Hang Seng Bank will be\nclosed from Tuesday, 20 January 2026 onwards and during such period\nno transfer of Hang Seng Bank Shares will be effected. In order to qualify for entitlements to the Scheme Consideration\nunder the Scheme, Scheme Shareholders should ensure that the\ntransfers of Hang Seng Bank shares to them are lodged with the\nShare Registrar at Shops 1712-1716, 17th Floor, Hopewell Centre,\n183 Queen's Road East, Wan Chai, Hong Kong for registration in\ntheir names or in the names of their nominees no later than 4:30\np.m. (Hong Kong time) on Monday, 19 January 2026. EXPECTED LATEST TIME FOR TRADING OF HANG SENG BANK SHARES ON THE\nHONG KONG STOCK EXCHANGE Subject to the Scheme becoming binding and effective, the expected\nlatest time for trading of Hang Seng Bank Shares on the Hong Kong\nStock Exchange is 4:10 p.m. on Wednesday, 14 January\n2026. PROPOSED WITHDRAWAL OF LISTING OF THE HANG SENG BANK\nSHARES Subject to the Scheme becoming binding and effective, it is\nexpected that the listing of the Hang Seng Bank Shares on the Hong\nKong Stock Exchange will be withdrawn with effect from 4:00 p.m. on\nTuesday, 27 January 2026. Hang Seng Bank has applied to the Hong\nKong Stock Exchange for, and the Hong Kong Stock Exchange has\napproved, the withdrawal of the Hang Seng Bank Shares from the Hong\nKong Stock Exchange in accordance with Rule 6.15(2) of the Hong\nKong Listing Rules subject to the Scheme becoming\neffective. EXPECTED TIMETABLE The timetable set out below is indicative only and is subject to\nchange. Any changes to the timetable will be jointly announced by\nHSBC Holdings, HSBC Asia Pacific and Hang Seng Bank. Unless\notherwise specified, all times and dates refer to Hong Kong local\ntimes and dates. Hong Kong time and date Expected\nlatest time for trading of Hang Seng Bank Shares on the Hong Kong\nStock Exchange 4:10\np.m. on Wednesday, 14 January 2026 Latest\ntime for lodging transfers of Hang Seng Bank Shares in order to\nqualify for entitlements to the Scheme Consideration under the\nScheme 4:30\np.m. on Monday, 19 January 2026 Register\nof members of Hang Seng Bank closed for determining entitlements to\nthe Scheme Consideration under the Scheme (Note 1) From\nTuesday, 20 January 2026 onwards High\nCourt hearing of the petition for the sanction of the\nScheme (Note\n2) 10:00\na.m. on Friday, 23 January 2026 Announcement\nof (1) the results of the High Court hearing for the petition for\nthe sanction of the Scheme, (2) the expected Scheme Effective Date\nand (3) the expected date of the withdrawal of the listing of Hang\nSeng Bank Shares on the Hong Kong Stock Exchange posted on the\nwebsite of the Hong Kong Stock Exchange no\nlater than 7:00 p.m. on Friday, 23 January 2026 Scheme\nRecord Date Friday,\n23 January 2026 Scheme\nEffective Date (Notes 2 and\n5) Monday,\n26 January 2026 Announcement\nof (1) the Scheme Effective Date and (2) the withdrawal of the\nlisting of Hang Seng Bank Shares on the Hong Kong Stock Exchange\nposted on the website of the Hong Kong Stock Exchange Monday,\n26 January 2026 The\nwithdrawal of the listing of Hang Seng Bank Shares on the Hong Kong\nStock Exchange becomes effective (Note 2) 4:00\np.m. on Tuesday, 27 January 2026 Latest\ntime for (1) despatch of cheques for the payment of the Scheme\nConsideration to Scheme Shareholders (other than HKSCC Nominees)\nand (2) payment of the Scheme Consideration to HKSCC Nominees by\nelectronic bank transfer (Notes 3, 4 and 5) On or\nbefore Wednesday, 4 February 2026 Notes: 1.   The register of members of Hang Seng Bank will be\nclosed during such period for the purpose of determining the Scheme\nShareholders who are qualified for the entitlements to the Scheme\nConsideration under the Scheme. 2.   The High Court hearing will be held at the High\nCourt at the High Court Building, 38 Queensway, Hong Kong. Subject\nto the Conditions having been satisfied or (if applicable) waived\non or before the Conditions Long Stop Date, the Scheme shall become\nbinding and effective as soon as an office copy of the order of the\nHigh Court sanctioning the Scheme (with or without modification)\nand confirming the reduction of the share capital of Hang Seng Bank\nprovided for by the Scheme together with a minute and a return that\ncomply with subsections (2) and (3) of section 230 of the Companies\nOrdinance shall have been delivered and registered by the Registrar\nof Companies in Hong Kong. If the Proposal becomes unconditional\nand the Scheme becomes binding and effective, it is expected that\nthe listing of the Hang Seng Bank Shares on the Hong Kong Stock\nExchange will be withdrawn at 4:00 p.m. on Tuesday, 27 January\n2026. 3.   Cheques for the payment of the Scheme Consideration\nto the Scheme Shareholders (other than HKSCC Nominees), and payment\nof the Scheme Consideration to HKSCC Nominees by electronic bank\ntransfer, will be despatched or made as soon as possible but in any\nevent no later than the seventh (7th) business day (as defined in\nthe Takeovers Code) after the Scheme Effective Date, and (if\npayment is made by way of cheques) such cheques will be despatched\nby ordinary post in postage pre-paid envelopes addressed to the\nScheme Shareholders (other than HKSCC Nominees) at their respective\naddresses as appearing in the register of members of Hang Seng Bank\nas at the Scheme Record Date or, in the case of joint holders, at\nthe address appearing in the register of members of Hang Seng Bank\nas at the Scheme Record Date of the joint holder whose name then\nstands first in the register of members of Hang Seng Bank in\nrespect of the relevant joint holding. All such cheques shall be\nposted at the risk of the addressees and none of HSBC Holdings,\nHSBC Asia Pacific, Hang Seng Bank, BofA Securities, Goldman Sachs,\nHSBC Asia Pacific FA, Morgan Stanley, the Depositary (or any of its\ndesignees), the Hang Seng Bank IFA and the Share Registrar and\ntheir respective directors, employees, officers, agents, advisers,\nassociates and affiliates and any other persons involved in the\nProposal shall be responsible for any loss or delay in the despatch\nof the same. Your attention is also drawn to the section headed\n\"15. Registration and payment\" in the Explanatory Statement set out\non pages 110 to 112 of the Scheme Document. 4.   In the case of Hang Seng Bank ADSs, the Depositary\nwill receive an amount in Hong Kong dollars equal to the amount\npayable in respect of all the Scheme Shares represented by the Hang\nSeng Bank ADSs no later than the seventh (7th) business day (as\ndefined in the Takeovers Code) after the Scheme Effective Date.\nUpon receipt, the Depositary will convert such funds into US\ndollars and thereafter pay to the Hang Seng Bank ADS Holders as a\npayment in US dollars in proportion to the number of Hang Seng Bank\nADSs held by such Hang Seng Bank ADS Holders, in accordance with\nthe Hang Seng Bank ADS Deposit Agreement. 5.   If any severe weather condition is in force in Hong\nKong: (a) at any time before 12:00 p.m. but no longer in force at\nor after 12:00 p.m. on the Scheme Effective Date or the latest date\nto despatch cheques for the payment of the Scheme Consideration\nunder the Scheme, the Scheme Effective Date or the latest date to\ndespatch cheques (as the case may be) will remain on the same day;\nor (b) at any time at or after 12:00 p.m. on the Scheme Effective\nDate or the latest date to despatch cheques for the payment of the\nScheme Consideration under the Scheme, the Scheme Effective Date or\nthe latest date to despatch cheques (as the case may be) will be\nrescheduled to the following business day which does not have any\nof those warnings in force at 12:00 p.m. and/or thereafter (or\nanother business day thereafter that does not have any severe\nweather condition at 12:00 p.m. or thereafter). For the purpose of\nthis note, \"severe weather\" refers to the scenario where a tropical\ncyclone warning signal number 8 or above is hoisted, a black\nrainstorm warning and/or the \"Extreme Conditions\" warning as\nannounced by the Hong Kong Government is/are in force in Hong Kong.\nFurther announcement(s) will be made if there is any change to the\nexpected timetable as a result of any severe weather. GENERAL Immediately before 9 October 2025 (being the commencement date of\nthe offer period, within the meaning ascribed to such term under\nthe Takeovers Code), save for the relevant securities of Hang Seng\nBank which were held by (i) members of the HSBC Group and the Hang\nSeng Bank Group for and on behalf of non-discretionary clients\n(including, for example, as a custodian or a non-discretionary\ntrustee) and (ii) any member of the BofA Securities group or the\nGoldman Sachs group for and on behalf of their respective\nnon-discretionary clients or in the capacity as exempt principal\ntraders or exempt fund managers (in each case recognised by the\nExecutive as such for the purpose of the Takeovers Code), HSBC Asia\nPacific and HSBC Asia Pacific Concert Parties held, controlled or\ndirected (x) a total of 1,209,367,223  Hang Seng Bank Shares\n(representing approximately 64.57% of the total issued share\ncapital of Hang Seng Bank on\n9 October 2025 (calculated on the basis that the 2,800,000 Hang\nSeng Bank Shares that had been repurchased by Hang Seng Bank as of\n9 October 2025 had been cancelled)) and (y)\nwarrants and derivatives in respect of a\ntotal of 3,040,596\nunderlying reference Hang Seng Bank Shares (representing\napproximately 0.16% of the total issued share capital of Hang Seng\nBank on\n9 October 2025 (calculated on the basis that the 2,800,000 Hang\nSeng Bank Shares that had been repurchased by Hang Seng Bank as of\n9 October 2025 had been cancelled)). Save as disclosed in the\nforegoing sentence, HSBC Asia Pacific and HSBC Asia Pacific Concert\nParties did not hold, control or have direction over any other Hang\nSeng Bank Shares or rights over Hang Seng Bank Shares immediately\nbefore 9 October 2025. Save as disclosed below, and save\nfor the relevant securities of Hang Seng Bank which\nwere acquired or\nagreed to be acquired by (i) members of the HSBC\nGroup (including\nbut not limited to HSBC Asia Pacific and the Hang Seng Bank\nGroup) for\nand on behalf of non-discretionary clients (including, for example,\nas a custodian or a non-discretionary trustee) and (ii) any member\nof the BofA Securities group or the Goldman Sachs group for and on\nbehalf of their respective non-discretionary clients or in the\ncapacity as exempt principal traders or exempt fund managers (in\neach case recognised by the Executive as such for the purpose of\nthe Takeovers Code), neither HSBC Asia Pacific nor\nany HSBC\nAsia Pacific Concert Party acquired\nor agreed to acquire any Hang Sang Bank Shares or any convertible\nsecurities, warrants, options or derivatives in respect of any Hang\nSeng Bank Shares since 9 October 2025 (being the commencement date\nof the offer period, within the meaning ascribed to such term under\nthe Takeovers Code) and up to the Meeting\nRecord Time: (a)\nHSBC Asia Pacific and HSBC Asia Pacific Concert Parties (excluding\nany member of the Hang Seng Bank Group) acquired a total of\n1,635,397  Hang Seng Bank Shares (representing approximately\n0.09% of the total issued share capital of Hang Seng Bank as at the\nMeeting Record Time); and (b)\nthe Hang Seng Bank Group acquired a total of 4,193,864 Hang Seng\nBank Shares (representing approximately 0.22% of the total issued\nshare capital of Hang Seng Bank as at the Meeting Record\nTime). For the avoidance of doubt, dealings in the relevant securities of\nHang Seng Bank which were conducted by entities within the HSBC\nGroup on and subsequent to 9 October 2025 up to and including the\nMeeting Record Time were conducted pursuant to waivers and consents\ngranted by the Executive as set out in the announcement of HSBC\nAsia Pacific dated 27 November 2025 and the announcement of Hang\nSeng Bank dated 27 November 2025 respectively (except for the\ndealings in the Hang Seng Bank Shares by funds for which\nInternationale Kapitalanlagegesellschaft mbH acts as the fund\nadministrator who has delegated and outsourced its trading\ndiscretion to third party asset managers while retaining voting\ndiscretion over such Hang Seng Bank Shares). As at the Meeting Record Time, save as disclosed below, and save in\nrespect of the relevant securities of Hang Seng Bank which were\nheld by (i) any member of the HSBC Group or the Hang Seng Bank\nGroup for and on behalf of its non-discretionary clients\n(including, for example, as a custodian or a non-discretionary\ntrustee) and (ii) any member of the BofA Securities group or the\nGoldman Sachs group for and on behalf of their respective\nnon-discretionary clients, none of HSBC Asia Pacific or the HSBC\nAsia Pacific Concert Parties had borrowed or lent any relevant\nsecurities of Hang Seng Bank, save for any borrowed Hang Seng Bank\nShares or any convertible securities, warrants, options or\nderivatives in respect of Hang Seng Bank Shares which have been\neither on-lent or sold: Name of holder Nature of transaction Number of Hang Seng Bank Shares to which it relates Approximate percentage of Hang Seng Bank's issued share\ncapital (%) HSBC\nBank plc Borrowing 301,687 0.02 WARNING: Shareholders of and/or potential investors in HSBC\nHoldings and Hang Seng Bank should be aware that the Proposal will\nonly be implemented if all the Conditions are satisfied or (if\napplicable) waived on or before the Conditions Long Stop Date.\nShareholders of and/or potential investors in HSBC Holdings and\nHang Seng Bank should therefore exercise caution when dealing in\nthe securities of HSBC Holdings and Hang Seng Bank respectively.\nPersons who are in doubt as to the action they should take should\nconsult their licensed securities dealer or registered institution\nin securities, bank manager, solicitor, professional accountant or\nother professional adviser. For and\non behalf of HSBC Holdings plc Brendan Nelson Group\nChairman For and\non behalf of Hang Seng Bank Limited Edward Cheng Wai Sun Chairman For and\non behalf of The Hongkong and Shanghai Banking Corporation Limited Dr. Peter Wong Tung Shun Non-executive\nChairman The board of directors of HSBC Holdings plc as at the date of this\nannouncement comprises: Brendan\nRobert Nelson*, Georges Bahjat Elhedery, Geraldine Joyce\nBuckingham † ,\nWei Sun Christianson † ,\nRachel Duan † ,\nDame Carolyn Julie Fairbairn † ,\nJames Anthony Forese † ,\nAnn Frances Godbehere † ,\nSteven Craig Guggenheimer † ,\nManveen (Pam) Kaur, Dr José Antonio Meade\nKuribreña † ,\nKalpana Jaisingh Morparia † ,\nEileen K Murray † and\nSwee Lian Teo † . * Independent non-executive Chair † Independent\nnon-executive Director The board of directors of HSBC Asia Pacific as at the date of this\nannouncement comprises: Dr.\nPeter Wong Tung Shun # ,\nDavid Gordon Eldon*, David Liao Yi Chien, Surendranath Ravi Rosha,\nPaul Jeremy Brough*, Judy Chau Lai Kun*, Edward Cheng Wai Sun*,\nSonia Cheng Chi Man*, Choi Yiu Kwan*, Andrea Lisa Della Mattea*,\nManveen (Pam) Kaur # ,\nRajnish Kumar*, Beau Kuok Khoon Chen*, Fred Lam Tin Fuk* and\nAnnabelle Long Yu*. # Non-executive\nDirectors * Independent Non-executive Directors. The Hang Seng Bank Board as at the date of this announcement\ncomprises: Edward Cheng Wai Sun* (Chairman), Luanne\nLim Hui Hung (Chief\nExecutive), Cordelia Chung*, Kathleen Gan Chieh\nHuey # ,\nClement Kwok King Man*, Patricia Lam Sze Wan*, David Liao Yi\nChien # ,\nLin Huey Ru*, Saw Say Pin (Chief Financial Officer), Wang Xiao Bin*\nand Catherine Zhou Rong # . # Non-executive\nDirectors * Independent Non-executive Directors Hong Kong, 8 January 2026 HSBC Holdings plc Registered Office and Group Head Office: 8 Canada Square, London E14 5HQ, United Kingdom Web:\nwww.hsbc.com Incorporated in England and Wales with limited liability.\nRegistration number 617987 Hang Seng Bank Limited 恒生銀行有限公司 Registered Office and Head Office: 83 Des Voeux Road Central, Hong Kong Incorporated in Hong Kong with limited liability The Hongkong and Shanghai Banking Corporation Limited 香港上海滙豐銀行有限公司 Registered Office and Group Head Office: 1 Queen's Road Central, Hong Kong Incorporated in Hong Kong with limited liability SIGNATURE Pursuant\nto the requirements of the Securities Exchange Act of 1934, the\nregistrant has duly caused this report to be signed on its behalf\nby the undersigned, thereunto duly authorized. HSBC\nHoldings plc By: Name:\nAileen Taylor Title:\nGroup Company Secretary and Chief Governance Officer Date:\n08 January 2026", "source": "edgar", "stratum": "edgar", "fetch_date": "", "url": "https://www.sec.gov/Archives/edgar/data/1089113/000165495426000172/a1914o.htm"}
{"doc_id": "c5b7ca844e9c7a1dc0fdba70b95d31f1", "text": "INTERNATIONAL MONETARY FUND\nREGIONAL\nECONOMIC\nOUTLOOK\nSUB-SAHARAN AFRICA\nThe Big Funding Squeeze\n2023\nAPR\nWorld Economic and Financial Surveys\nREGIONAL\nECONOMIC\nOUTLOOK\nSUB-SAHARAN AFRICA\nThe Big Funding Squeeze\n2023\nAPRIL\nCopyright ©2023 International Monetary Fund\nCataloging-in-Publication Data\nIMF Library\nNames: International Monetary Fund, publisher.\nTitle: Regional economic outlook. Sub-Saharan Africa: the big funding squeeze.\nOther titles: Sub-Saharan Africa : the big funding squeeze. | World economic and financial surveys.\nDescription: Washington, DC : International Monetary Fund, 2023. | World economic and financial surveys. |\nApr. 2023. | Includes bibliographical references.\nIdentifiers: ISBN 9798400235641 (English Paper)\n9798400235771 (ePub)\n9798400236044 (Web PDF)\nSubjects: LCSH: Africa, Sub-Saharan—Economic conditions. | Economic forecasting—Africa, Sub-Saharan. |\nEconomic development—Africa, Sub-Saharan. | Africa, Sub-Saharan—Economic policy.\nClassification: LCC HC800.R4456 2023\nThe Regional Economic Outlook: Sub-Saharan Africa is published twice a year, in the spring and fall, to\nreview developments in sub-Saharan Africa. Both projections and policy considerations are those of the\nIMF staff and do not necessarily represent the views of the IMF, its Executive Board, or IMF Management.\nPublication orders may be placed online or through the mail:\nInternational Monetary Fund, Publication Services\nP.O. Box 92780, Washington, DC 20090, U.S.A.\nT. +(1) 202.623.7430\nF. +(1) 202.623.7201\npublications@IMF.org\nIMFbookstore.org\nelibrary.IMF.org\nFind all published Regional Economic Outlook: Sub-Saharan Africa\nhttps://www.imf.org/en/Publications/REO/SSA\nTHE BIG FUNDING SQUEEZE iii\nContents\nAcknowledgments. ...................................................................................................... v\nCountry Groupings ..................................................................................................... vi\nAssumptions and Conventions ........................................................................................ vii\nExecutive Summary ..................................................................................................... 1\nThe Big Funding Squeeze. .............................................................................................. 2\nRecent Developments: The Makings of a Funding Crisis .......................................................... 3\nThe Outlook for a Two-speed Recovery in 2024. ................................................................... 6\nFour Main Policy Priorities. ........................................................................................... 7\nConclusion . ......................................................................................................... 13\nReferences. ............................................................................................................. 14\nStatistical Appendix ................................................................................................... 15\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\niv REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nFIGURES\nFigure 1. Sub-Saharan Africa: Sovereign Spreads, 2021–23 .......................................................... 3\nFigure 2. Sub-Saharan Africa: Interest Payments to Revenue, Excluding Grants .................................... 4\nFigure 3. Sub-Saharan Africa: Sources of Financing. .................................................................. 4\nFigure 4. Sub-Saharan Africa: Real GDP Growth, 2023. ............................................................... 5\nFigure 5. Real GDP Per Capita, 2019–24 ................................................................................ 5\nFigure 6. Sub-Saharan Africa: Real GDP Growth, 2022–24 ........................................................... 6\nFigure 7. Sub-Saharan Africa: Eurobonds Repayments, 2023–25. .................................................... 8\nFigure 8. Sub-Saharan Africa: Debt Ratio at End-2022 and Fiscal Adjustment Needs .............................. 8\nFigure 9. Sub-Saharan Africa: Drivers of Changes in Public Debt Ratio between End-2012 and End-2022 ....... 9\nFigure 10. Sub-Saharan Africa: Median Inflation, December 2021–February 2023 ............................... 10\nFigure 11. Sub-Saharan Africa: Changes in Policy Rate and Inflation .............................................. 10\nFigure 12. Sub-Saharan Africa: Exchange Rate versus US Dollar ....................................................11\nFigure 13. Climate Finance Flows to Sub-Saharan Africa, 2020. .................................................... 12\nTABLES\nSub-Saharan Africa: Member Countries of Groupings ............................................................... vi\nSub-Saharan Africa: Member Countries of Regional Groupings ..................................................... vi\nSub-Saharan Africa: Country Abbreviations .......................................................................... vii\nSTATISTICAL TABLES\nSA1. Real GDP Growth and Consumer Prices, Average ............................................................. 17\nSA2. Overall Fiscal Balance, Including Grants and Government Debt ............................................. 18\nSA3. Broad Money and External Current Account, Including Grants .............................................. 19\nSA4. External Debt, Official Debt, Debtor Based and Reserves .................................................... 20\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE v\nAcknowledgments\nThe April 2023 issue of the Regional Economic Outlook: Sub-Saharan Africa was prepared by a\nteam led by Wenjie Chen and under the supervision of Luc Eyraud and Catherine Pattillo.\nThe team included Hany Abdel-Latif, Anna Belianska, Marijn Bolhuis, Balazs Csonto, Cleary Haines,\nSaanya Jain, Laurent Kemoe, Hamza Mighri, Saad Quayyum, Moustapha Mbohou Mama, Pritha Mitra,\nHenry Rawlings, Ivanova Reyes, Andrew Tiffin, and Qianqian Zhang.\nCharlotte Vazquez was responsible for document production, with assistance from Yao Nourdine Ouattara.\nThe editing and production were overseen by Cheryl Toksoz of the Communications Department.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\nvi REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nCountry Groupings\nSub-Saharan Africa: Member Countries of Groupings\nOil Exporters Other Resource- Non-Resource- Middle-Income Low-Income Countries in Fragile\nIntensive Intensive Countries Countries and Conflict-Affected\nCountries Countries Situations1\nAngola Botswana Benin Angola Burkina Faso Burkina Faso\nCameroon Burkina Faso Burundi Benin Burundi Burundi\nChad Central African Cabo Verde Botswana Central Cameroon\nCongo, Republic of Republic Comoros Cabo Verde African Republic Central African\nEquatorial Guinea Congo, Côte d’Ivoire Cameroon Chad Republic\nGabon Democratic Eswatini Comoros Congo, Chad\nNigeria Republic of the Ethiopia Congo, Republic of Democratic Comoros\nSouth Sudan Eritrea Gambia, The Côte d’Ivoire Republic of the Congo, Democratic\nGhana Guinea-Bissau Equatorial Guinea Eritrea Republic of the\nGuinea Kenya Eswatini Ethiopia Congo, Republic of\nLiberia Lesotho Gabon Gambia, The Eritrea\nMali Madagascar Ghana Guinea Ethiopia\nNamibia Malawi Kenya Guinea-Bissau Guinea-Bissau\nNiger Mauritius Lesotho Liberia Mali\nSierra Leone Mozambique Mauritius Madagascar Mozambique\nSouth Africa Rwanda Namibia Malawi Niger\nTanzania São Tomé Nigeria Mali Nigeria\nZambia and Príncipe São Tomé Mozambique South Sudan\nZimbabwe Senegal and Príncipe Niger Zimbabwe\nSeychelles Senegal Rwanda\nTogo Seychelles Sierra Leone\nUganda South Africa South Sudan\nZambia Tanzania\nTogo\nUganda\nZimbabwe\n1 Fragile and conflict-affected situations as classified by the World Bank, Classification of Fragile and Conflict-Affected Situations, FY2023.\nSub-Saharan Africa: Member Countries of Regional Groupings\nThe West Economic and Common East African Southern Southern Economic\nAfrican Monetary Market for Community African African Community of\nEconomic and Community of Eastern and Development Customs West African\nMonetary Central African Southern Africa Community Union States\nUnion States\n(WAEMU) (CEMAC) (COMESA) (* = EAC-5) (SADC) (SACU) (ECOWAS)\nBenin Cameroon Burundi *Burundi Angola Botswana Benin\nBurkina Faso Central African Comoros *Kenya Botswana Eswatini Burkina Faso\nCôte d’Ivoire Republic Congo, *Rwanda Comoros Lesotho Cabo Verde\nGuinea-Bissau Chad Democratic South Sudan Congo, Namibia Côte d’Ivoire\nMali Congo, Republic of Republic of the *Tanzania Democratic South Africa Gambia, The\nNiger Equatorial Guinea Eritrea *Uganda Republic of the Ghana\nSenegal Gabon Eswatini Eswatini Guinea\nTogo Ethiopia Lesotho Guinea-Bissau\nKenya Madagascar Liberia\nMadagascar Malawi Mali\nMalawi Mauritius Niger\nMauritius Mozambique Nigeria\nRwanda Namibia Senegal\nSeychelles Seychelles Sierra Leone\nUganda South Africa Togo\nZambia Tanzania\nZimbabwe Zambia\nZimbabwe\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE vii\nAssumptions and Conventions\nThe following conventions are used in this publication:\nIn tables, ellipsis points (. . .) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible.” Minor\ndiscrepancies between sums of constituent figures and totals are due to rounding.\nAn en dash (–) between years or months (for example, 2011–12 or January–June) indicates the years or months\ncovered, including the beginning and ending years or months; a slash or virgule (/) between years or\nmonths (for example, 2011/12) indicates a fiscal or financial year, as does the abbreviation FY (for example,\nFY 2012).\n“Billion” means a thousand million; “trillion” means a thousand billion.\n“Basis points (bps)” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent\nto ¼ of 1 percentage point).\nAs used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as\nunderstood by international law and practice. As used here, the term also covers some territorial entities that are\nnot states but for which statistical data are maintained on a separate and independent basis.\nThe boundaries, colors, denominations, and any other information shown on the maps do not imply, on the part\nof the International Monetary Fund, any judgment on the legal status of any territory or any endorsement or\nacceptance of such boundaries.\nSub-Saharan Africa: Country Abbreviations\nAGO Angola CPV Cabo Verde LSO Lesotho SLE Sierra Leone\nBDI Burundi ERI Eritrea MDG Madagascar SSD South Sudan\nBEN Benin ETH Ethiopia MLI Mali STP São Tomé and Príncipe\nBFA Burkina Faso GAB Gabon MOZ Mozambique SWZ Eswatini\nBWA Botswana GHA Ghana MUS Mauritius SYC Seychelles\nCAF Central African Republic GIN Guinea MWI Malawi TCD Chad\nCIV Côte d’Ivoire GMB Gambia, The NAM Namibia TGO Togo\nCMR Cameroon GNB Guinea-Bissau NER Niger TZA Tanzania\nCOD Congo, Democratic Republic of the GNQ Equatorial Guinea NGA Nigeria UGA Uganda\nCOG Congo, Republic of KEN Kenya RWA Rwanda ZAF South Africa\nCOM Comoros LBR Liberia SEN Senegal ZMB Zambia\nZWE Zimbabwe\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\nTHE BIG FUNDING SQUEEZE 1\nExecutive Summary\nA funding squeeze has hit the region hard. Persistent global inflation and tighter monetary policies have led\nto higher borrowing costs for sub-Saharan African countries and have placed greater pressure on exchange\nrates. Indeed, no country has been able to issue a Eurobond since spring 2022.\nThe funding squeeze aggravates a protracted trend that has been years in the making. The interest burden\non public debt is rising, because of a greater reliance on expensive market-based funding combined with a\nlong-term decline in aid budgets.\nThe lack of financing affects a region that is already struggling with elevated macroeconomic imbalances.\nPublic debt and inflation are at levels not seen in decades, with double-digit inflation present in half of\ncountries—eroding household purchasing power, striking at the most vulnerable, and adding to social\npressures. Estimates suggest that 132 million people were acutely food-insecure in 2022.\nIn this context, the economic recovery has been interrupted. Growth in sub-Saharan Africa will decline to\n3.6 percent in 2023. Amid a global slowdown, activity is expected to decelerate for a second year in a row.\nStill, this headline figure masks significant variation across the region. Many countries will register a small\npickup in growth this year, especially non-resource-intensive economies, but the regional average will be\nweighed down by sluggish growth in some key economies, such as South Africa.\nThe funding squeeze will also impact the region’s longer-term outlook. A shortage of funding may force\ncountries to reduce resources for critical development sectors like health, education, and infrastructure,\nweakening the region’s growth potential.\nFour policy priorities can help address the macroeconomic imbalances in the context of current financing\nconstraints:\nƒ Consolidating public finances and strengthening public financial management amid difficult funding\nconditions. This will rely on continued revenue mobilization, better management of fiscal risks, and more\nproactive debt management. International assistance remains also critical to alleviating governments’\nfinancing constraints. For countries that require debt reprofiling or restructuring, a well-functioning\ndebt-resolution framework is vital to creating fiscal space.\nƒ Containing inflation. Monetary policy should be steered cautiously until inflation is firmly on a downward\ntrajectory and projected to return to the central bank’s target range.\nƒ Allowing the exchange rate to adjust, while mitigating the adverse effects on the economy, including the\nrise in inflation and debt due to the currency depreciations.\nƒ Ensuring that important efforts to fund and address climate change do not crowd out basic needs, like\nhealth and education. Climate finance provided by the international community must come on top of\ncurrent aid flows.\nRegional Economic Outlook Notes. A separate series of analytical notes are provided on topics of current\ninterest. “Geo-Economic Fragmentation: Sub-Saharan Africa Caught Between the Fault Lines” demon-\nstrates that sub-Saharan Africa stands to lose the most in a severely fragmented world, and stresses the\nneed for building resilience. “Managing Exchange Rate Pressures in Sub-Saharan Africa: Adapting to New\nRealities” outlines the drivers and consequences of recent exchange-rate pressures and discusses policies\nto help soften the impact on the region’s economies. “Closing the Gap: Concessional Climate Finance\nand Sub-Saharan Africa” considers the critical need for concessional finance in helping the region address\nclimate change and explores ways in which additional flows might be unlocked.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n2 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nThe Big Funding Squeeze\nThe confluence of higher global interest rates, elevated sovereign debt spreads, and exchange rate\ndepreciations, among other factors, has created a funding squeeze for many countries in sub-Saharan\nAfrica. This challenge comes on top of policy struggles from the ramifications of the COVID-19\npandemic and the cost-of-living crisis. Reflecting these considerations, economic activity in the\nregion will remain subdued in 2023, with growth at 3.6 percent before rebounding to 4.2 percent in\n2024 predicated on a global recovery, subsiding inflation, and the winding down of monetary policy\ntightening.\nSub-Saharan Africa facing funding squeeze\nDonor flows\nare drying up\n%\nBorrowing costs Legacy of recent\nare rising crises remain\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE 3\nRecent Developments: The Makings of a Funding Crisis1\nConjunctural factors have aggravated sub-Saharan Africa’s already difficult\nfinancing situation…\nThe region’s financing options have deteriorated significantly over the past year. The acceleration in the tight-\nening of global monetary policy, prompted by the rapid pickup in global inflation after the onset of Russia’s\nwar in Ukraine, has led to higher interest rates worldwide and raised borrowing costs for sub-Saharan African\ncountries, both on domestic and international markets.\nSovereign spreads for sub-Saharan Africa have soared Figure 1. Sub-Saharan Africa: Sovereign Spreads,\n(Figure 1)—to three times the emerging market average 2021–23\nsince the start of the global tightening cycle. Higher (Basis points, simple average)\ninterest rates on US treasury bonds and the search\nFailure\nfor safe assets amid global uncertainty pushed the 1,250 of SVB\nUS dollar effective exchange rate to a 20-year high in Russian\ninvassion Sub-\n2022, increasing the value of dollar-denominated debt 1,000 of Ukraine Saharan\nand dollar-denominated interest payments. Together, Start of US Africa\ntightening\nthese factors have added to the region’s external 750 768\nbps\nborrowing costs.\n500 225\nHigher uncertainty amid the pandemic and the war in bps\nEMBIG\nUkraine has also led to risk repricing, disproportion-\n250\nately affecting sub-Saharan African countries because Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22\nof lower credit ratings, and cutting off virtually all\nSource: Bloomberg Finance, L.P.\nfrontier markets from international market access since Note: Sub-Saharan Africa includes Angola, Côte d’Ivoire,\nEthiopia, Gabon, Ghana, Kenya, Mozambique, Namibia,\nspring 2022.2 More specifically, Eurobond issuances\nNigeria, Senegal, South Africa. EMBIG = Emerging Market\nfor the region declined from $14 billion in 2021 to Bond Index Global.\n$6 billion in the first quarter of 2022.\nThe effect has been a drastic and pro-cyclical tightening of financing conditions, which has aggravated under-\nlying vulnerabilities. Borrowing costs have increased significantly over the past decade, with interest payments\nas a share of revenue doubling over the same period. At 11 percent of revenues (excluding grants) for the median\nsub-Saharan African country in 2022, interest payments are about triple those of the median advanced economy\n(Figure 2). Structural shifts behind this increase in borrowing costs include a decline in aid budgets to the region\nthat led some countries to turn to market-based finance, which is more expensive (Figure 3). Increased integra-\ntion in international debt markets and deepening of domestic financial markets also made it easier to contract\nmore private domestic and external debt on non-concessional terms. Finally, inflows from China, for a while a\nsignificant source of financing, have declined markedly more recently.\n…on top of the fallout from multi-year shocks…\nThe financing squeeze comes at a most unfortunate time, as the region is facing elevated economic imbalances.\nIn the wake of the COVID-19 pandemic and the war in Ukraine, macroeconomic imbalances have returned as a\nfirst order challenge for most African countries, and they are pushing countries close to the edge (Selassie 2022).\nInflation remains elevated and volatile. The median inflation rate in the region was about 10 percent in February\n2023—more than double since the beginning of the pandemic. Besides registering double-digit headline\ninflation in roughly half of the countries in the region, about 80 percent are also experiencing double-digit food\n1 For more discussion on the origin of the financing crisis in sub-Saharan Africa, see also Selassie 2023.\n2 Although frontier markets represent only one-third of the countries, they account for 60 percent of the region’s GDP and 60 percent\nof the total population.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n4 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nFigure 2. Sub-Saharan Africa: Interest Payments Figure 3. Sub-Saharan Africa: Sources of Financing\nto Revenue, Excluding Grants (Percent of regional GDP)\n(Percent, median)\nEurobond\n50 GHA 4 issuances\n40 3 ODA\nMWI\nZMB\n30 2 Loan disbursements\nfrom China\n20 Frontier market\neconomies 1\nSSA\n10 Oil exporters 0\n2000 03 06 09 12 15 18 21\n0\nSources: Bloomberg Finance, L.P. ; Organisation for Economic\n2012 2022 Co-operation and Development, OECD.stat; and World Bank,\nSource: IMF, World Economic Outlook database. International Debt Statistics.\nNote: See pages vi-vii for country acronyms and groupings. Note: ODA = Official Development Aid.\ninflation in February. However, fuel price pressures have decelerated recently because international prices fell\nfrom their peak in mid-2022 by up to 30 percent as of the end of 2022, providing some reprieve for the region.\nAbout half of the countries have now reported a deceleration in inflation in recent months, but there were also\nresurgences; and because subsidies on fuel and food prices are being phased out this year (Cameroon, Central\nAfrican Republic, Ethiopia, Senegal), inflation will likely remain volatile throughout 2023. A few countries also\nfaced pressures to raise public wages in the second half of 2022 because of increases in the cost of living,\ntriggered by higher food and fuel prices (Cameroon, Mali, Rwanda, The Gambia).\nPublic debt as a share of GDP is relatively high. Sub-Saharan Africa’s public debt ratio—at 56 percent of GDP in\n2022—has reached levels last seen in the early 2000s. Since the pandemic, the debt increase has been driven\nby widening fiscal deficits because of overlapping crises, slower growth, and exchange rate depreciations.\nElevated public debt levels have raised concerns about debt sustainability, with 19 of the region’s 35 low-income\ncountries already in debt distress or facing high risk of debt distress in 2022—the same situation reported in the\nOctober 2022 Regional Economic Outlook: Sub-Saharan Africa.\nMost currencies in the region depreciated against the US dollar in 2022. For those already grappling with high\ninflation, the weakening of the currency relative to the dollar made matters even worse because the region\nis highly dependent on imports with a significant share of them invoiced in dollars. Currency depreciations\nalso contributed to higher general government debt because about 40 percent of sub-Saharan Africa’s debt is\nexternal as of 2021. Although exchange rate pressures have eased since November 2022—in some cases because\nsignificant depreciations have already taken place—they remain elevated and volatile.\n…resulting in another year of disrupted recovery...\nGiven this challenging environment, the region’s growth will decline to 3.6 percent in 2023 from 3.9 percent\nin 2022 following the strong rebound of 2021. This subdued outlook in sub-Saharan Africa marks a growth\nslowdown, the second year in a row. Some common factors explain the growth underperformance, including\nthe rise in central bank rates to fight inflation and the war in Ukraine dampening global economic activity and\nthus, export demand for the region. Nonetheless there are large variations across the region (Figure 4). Niger,\nthe Democratic Republic of the Congo, and Senegal are on the higher end of the region’s growth distribution,\nwith this year’s coming online of oil and gas in those countries expected to contribute significantly to higher GDP\ngrowth. On the opposite end, the significant economic contraction in Equatorial Guinea is a result of a decline\nin oil production. Meanwhile, South Africa’s growth is projected to decelerate sharply to 0.1 percent in 2023,\nweighed down by an intensification of power outages, a weaker external environment, and a negative carry-over\neffect from the growth slowdown at the end of 2022.\nINTERNATIONAL MONETARY FUND • APRIL 2023\nNon-resource-intensive\nOil exporters\nOther resource-intensive\nTHE BIG FUNDING SQUEEZE 5\nFigure 4. Sub-Saharan Africa: Real GDP Growth, 2023\n(Percent, fragile countries in red)\nAverage:\nNGA\n3.6\nSLE UGA\nNon-resource-intensive countries COM MUS SSD CIV\nOil exporters\nGAB BWA MDG GNB TZA GMB RWA\nOther resource-intensive countries\nCAF ERI TCD COG CPV MOZ GIN NER\nLSO ZWE SWZ AGO ZMB LBR MLI TGO ETH\nGNQ ZAF GHA STP MWI NAM BDI SYC CMR BFA KEN BEN COD SEN\n0 3 6 9\nSource: IMF, World Economic Outlook database.\nNote: See pages vi-vii for country acronyms and groupings.\nThe region’s financial sector has held up relatively well. The share of non-performing loans has improved\nslightly—down to about 7½ percent in 2022 from nearly 9 percent of total loans for the median country in 2021.\nAfter a temporary decline during the pandemic, bank profitability has bounced back to the pre-COVID-19 trend\nas of mid-2022. However, the capital adequacy of banks in the region has dipped slightly in the last two years\nrelative to its pre-pandemic peak in 2019.\n…and undermining economic and development prospects.\nUnlike many major advanced economies, countries in Figure 5. Real GDP per Capita, 2019–24\nsub-Saharan Africa had limited fiscal space entering (2019 = 100, dashed line indicates pre-crisis trend)\nthe pandemic recession, hampering policymakers’ 110\nability to mount an effective response. This has Advancedeconomies\n105\nresulted in larger scarring effects on the economy,\nincluding from disruptions to education. The current 100\nfunding squeeze is constraining many countries’ ability\n95\nto address these scars, contributing to the muted 2019 2021 2023\nrecovery. Moreover, authorities are forced to reduce 110\nresources for critical development sectors such as Sub-Saharan Africa\n105\nhealth, education, and infrastructure, weakening the\nregion’s medium-term growth prospects. Partly for 100\nthese reasons, the catch-up in growth has remained\n95\nelusive, with GDP per capita remaining stubbornly 2019 2021 2023\nbelow pre-pandemic trend (Figure 5). Source: IMF, World Economic Outlook database.\nThe lack of fiscal space has also made it challenging for countries to address the vast social needs, espe-\ncially those in the most vulnerable segments of the population. Insufficient funding meant that the authorities\nstruggled to scale up targeted support when the region faced record-high food, fuel, and fertilizer prices in\n2022. In fact, the cost-of-living crisis remains a major concern for sub-Saharan Africa given the high incidence of\npoverty—35 percent of the population in sub-Saharan Africa was estimated to live under $2.15 a day as of 2019\n(latest available data from the World Bank Low-Income Dataset). About 132 million people were estimated to be\nacutely food-insecure in 2022, an upward revision from the estimate of 123 million in the October 2022 Regional\nEconomic Outlook: Sub-Saharan Africa.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n6 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nThe Outlook for a Two-speed Recovery in 2024\nConsistent with the global rebound, regional growth will pick up from 3.6 percent\nto 4.2 percent in 2024…\nSub-Saharan Africa is poised to grow at 4.2 percent in 2024 from 3.6 percent in 2023. Almost four-fifths of\nthe countries are projected to register a growth pickup in 2024, driven by higher private consumption and\ninvestment. Importantly, the recovery for sub-Saharan Africa is linked intricately to global developments that are\nconditional on the realization of three key global factors:\nƒ Global economic activity is assumed to continue to recover from the effects of the war in Ukraine. This would\ntranslate into tailwinds for exporters in the region, while the dissipation of supply chain bottlenecks will ease\nimport prices.\nƒ Global inflation is projected to recede further in 2024. Thus, it is assumed that major central banks may slow\nthe pace of monetary policy tightening in the second half of 2023 as inflation (excluding volatile food and\nenergy prices) has been declining at a three-month rate—although at a slower pace than headline inflation—in\nmost (though not all) major economies since mid-2022. Subsequently, a slower pace of tightening implies less\npressure on exchange rates and spreads for the region. However, global interest rates are expected to remain\nelevated and well above pre-pandemic levels.\nƒ Crude oil prices are expected to continue to fall by about 6 percent in 2024 relative to the previous year as\ndemand pressures subside. Because net fuel importers represent two-thirds of the region’s GDP, lower prices\nshould affect sub-Saharan Africa’s growth positively. Nonfuel commodity prices are projected to remain\nbroadly unchanged.\nOf course, there is large heterogeneity in growth across subgroups. The growth rebound is expected to be\nprimarily driven by the non-resource-intensive and other resource-intensive countries (Figure 6). The former are\nChapter 1 - Figure 6\nprojected to grow by 6.2 percent in 2024, following 5.7 percent in 2023, reflecting more dynamic and resilient\neconomies—including those in the Eastern African\nFigure 6. Sub-Saharan Africa: Real GDP Growth,\nCommunity—and aided by the recovery in non-mining\n2022–24\nactivities including agriculture. Other (non-oil)\n(Percent)\nresource-intensive countries are also projected to\nSub-Saharan 2022–23\npost strong rebounds, in some cases boosted by new\nAfrica |\nmining projects (iron ore in Liberia and Sierra Leone; 2023–24\nrenewable energy commodities in the Democratic Oil exporters |\nOther resource-intensive\nRepublic of the Congo and Mali). In South Africa,\ncountries excluding\nactivity is expected to recover in 2024 as the energy South Africa |\ncrisis abates and the external environment improves.\nSouth Africa |\nHowever, growth among oil exporters is projected\nNon-resource-\nto decelerate in 2024 to 3.1 percent from 3.3 percent intensive countries |\nin 2023, mostly because of the continued decline in\n0 2 4 6\ncrude oil prices and production slowdowns. Nigeria’s\nSource: IMF, World Economic Outlook database.\ngrowth is forecast to decline to 3.0 percent next year. Note: See pages vi for country groupings.\nConsistent with the expected receding of global inflation, the median inflation for the region is projected to\nbe down at 5 percent by the end of 2024 (year-over-year), still above pre-pandemic levels but half that at the\nend of 2022. Sub-Saharan Africa is a large importer of food and energy items, which average 50 percent of\nthe region’s consumption basket. Thus, the recent onset in the decline in global food and fuel prices that is\nprojected to continue throughout this year and next, is expected to contribute much to the slowdown in regional\nheadline inflation.\nL\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE 7\n…but faces significant downside risks.\nThe outlook for the global economy is clouded by sizable uncertainty because of the multiple shocks in recent\nyears and ongoing financial sector turmoil. Compared to the January 2023 World Economic Outlook Update,\nglobal recession risks have increased, while concerns about stubbornly high inflation persist. Thus, global risks\nare squarely to the downside (April 2023 World Economic Outlook).\nThe ongoing banking sector turbulence in major economies could impact the region through several channels.\nA deterioration of business and consumer confidence could depress activity in the key advanced economies\nand spill over to African countries through lower demand for imports and lower commodity prices. In addition,\nwhile financial conditions in sub-Saharan African countries are not closely correlated with those in the United\nStates or Europe, banking sector stress in the latter economies could nonetheless increase global risk aversion,\nwhich would aggravate the funding squeeze even further for the region. As in past episodes of global financial\nstress, a broad-based outflow of capital from emerging market and developing economies could occur, causing\nfurther dollar appreciation, which would worsen vulnerabilities in countries with large dollar-denominated\nexternal debt. The dollar appreciation would further depress global trade due to many products being invoiced\nin dollars.\nApart from risks in the banking sector, three additional types of global downside risks are worth highlighting.\nFirst, stickier-than-expected inflation could prompt further monetary policy tightening. This could lower net\nfinancial inflows to sub-Saharan Africa and aggravate balance of payment pressures, which would lead to\ndomestic currency depreciations and squeeze already tight financing conditions even further. Another global risk\nis an escalation of the war in Ukraine, which could perpetuate already elevated global uncertainty and raise food\nand energy prices, making the financing environment even more difficult. Finally, a worsening in geoeconomic\nfragmentation could have negative spillovers into sub-Saharan Africa, including rising trade barriers and higher\nfood prices, because the region relies highly on commodity exports and is sensitive to global demand and price\nshocks (Analytical Note “Geoeconomic Fragmentation: Sub-Saharan Africa Caught Between the Fault Lines”).\nUnder a global downside scenario that considers severe financial sector stress, global real GDP growth in 2023\ncould be 1.8 percentage points below baseline and 2024 growth could be lower by 1.4 percentage points\n(April 2023 World Economic Outlook). The overall effect on global output is about one fourth the size of the\nimpact of the 2008–09 global financial crisis. The slowdown would be accompanied by a disinflationary impulse,\nincluding lower oil and gas prices. Global trade would decrease because of depressed global demand, increased\nuncertainty, and the rising value of the dollar. The cumulative cost to sub-Saharan Africa would amount to a loss\nof −1.9 percent of GDP over 2023–24, with oil exporters experiencing more losses (−2.5 percent) relative to other\nresource-intensive countries (−1.8 percent) and non-resource-intensive countries (−1.4 percent).\nFour Main Policy Priorities\nThe global slowdown, higher interest rates, and a dramatic pickup in global inflation have pushed many countries\ncloser to the edge. The following four priorities are centered around policy strategies that aim to help policy-\nmakers address macroeconomic imbalances in the context of severe financing constraints.\nFiscal policy amid tighter financial conditions\nPolicymakers in sub-Saharan Africa have to adapt to an environment with tighter financing conditions, which has\ntwo important implications for the conduct of fiscal policy. First, debt vulnerabilities (already elevated) are likely\nto worsen. With rising borrowing costs, countries may find it challenging to refinance their existing liabilities and\nrollover longer maturities. This could create liquidity problems, which may, over time, raise solvency questions\nin some cases. Second, policymakers will struggle to cover even the most essential expenses for basic services\nlet alone securing financing for further progress toward the Sustainable Development Goals.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\nFigure 7. Sub-Saharan Africa: Eurobonds Repayments, 2023–25\n(Billions of US dollars)\nFigure 7. Sub-Saharan Africa: Eurobonds Figure 8. Sub-Saharan Africa: Debt Ratio at\nRepayments, 2023–25 End-2022 and Fiscal Adjustment Needs\n(Billions of US dollars) (Percent of GDP)\n8 9\n6 5\nOthers\n4 1\nKenya Nigeria -3\n2\nSouth\nAfrica -7\n0 0 40 80 120 160\n2023 2024 2025\nSource: Bloomberg Finance, L.P.\nSources: IMF, World Economic Outlook; and IMF staff calculations.\nNote: Fiscal adjustment needs are computed as of 2023 in order\nto reduce debt ratio to 70 percent of GDP for countries above\nthreshold within 6 years or stabilize at latest level for countries\nbelow threshold. Negative fiscal adjustment needs imply available\nfiscal space.\nSLoouorckein: Bgl oaohmebaedrg, Fthinea ndceiffi Lc.Pu.lt funding environment for the region is likely to remain and become a key feature\nof the new normal. Over the next few years, the region’s countries are projected to have some of the world’s\nhighest interest bills relative to revenues, exceeding 50 percent in a few cases. In the next two years alone, a\nsizable share of outstanding Eurobond debt will come due—about $6 billion in 2024 and another $7 billion in\n2025 (Figure 7). If countries struggle to make repayments or rollover debt, it could have potential repercussions\non the region’s economic growth and social development.\nIn this context, consolidating public finances in the context of a credible and transparent medium-term fiscal\npolicy framework remains a priority for the region. As highlighted in the October 2022 Regional Economic\nOutlook: Sub-Saharan Africa, there is nonetheless heterogeneity among countries. Those that still have some\nfiscal space can use it to continue making much needed investments in human and physical capital to address\ndevelopment needs. But most countries with elevated debt vulnerabilities need to consolidate their public\nfinances to preserve fiscal sustainability. For some, adjustment needs are moderate, but for others, adjustment\nneeds are very large, and it is unlikely that fiscal consolidation alone will be enough to ensure fiscal sustainability\n(Figure 8). In this case, the necessary adjustment could be accompanied by debt reprofiling or restructuring.\nCountries have already started fiscal adjustment. After a significant deterioration in 2020, the median fiscal deficit\nratio in sub-Saharan Africa started to decline in 2021, with a consolidation of almost 1 percentage point of GDP\nprojected for 2023. Fiscal consolidation, which is expected to continue into the medium term, can be pursued\nin a way that minimizes possible negative impacts on growth and poverty. This will require increased efforts\nto boost revenue mobilization, but also prioritizing and increasing the efficiency of spending where possible\nincluding the phasing out of untargeted fuel subsidies. Crucially, fiscal adjustment should make allowances for\ncontinuing social spending and protecting the most vulnerable populations amid the ongoing cost-of-living\ncrisis. This can be done through targeted transfers to those particularly exposed to higher energy and food\nprices or an expansion of existing social safety nets. Saving part of the windfalls from higher commodity prices\nwill be especially helpful for commodity exporters with elevated fiscal vulnerabilities.\nBeyond fiscal consolidation, authorities can take additional steps to adapt to a world of tighter financing\nconstraints:\nƒ Managing fiscal risks resulting from the funding squeeze will be critical to improve fiscal sustainability. Given\ntighter budgets, the risk of fiscal slippage rises along with the temptation for governments to accumulate\narrears, increase off-budget spending, extend guarantees and contingent liabilities. All these operations can\nsdeen\ntnemtsujdA\n8 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nDebt stock\nINTERNATIONAL MONETARY FUND • APRIL 2023\nFigure 9. Sub-Saharan Africa: Drivers of Changes in Public Debt Ratio\nBetween End-2012 and end-2022THE BIG FUNDING SQUEEZE 9\n(Cumulative change, percentage points of GDP)\ntranslate into so-called “stock-flow adjustments”3, Figure 9. Sub-Saharan Africa: Drivers of Changes in\nwhich have contributed significantly to the debt Public Debt Ratio between End-2012 and End-2022\nincrease in the past decade (Figure 9). Containing (Cumulative change, percentage points of GDP)\nthese flows through better public financial manage-\n70\nment practices and better risk management is\n50\nessential to improve debt dynamics, including by\nstrengthening fiscal transparency and oversight of 30\nstate-owned enterprises. 10\nƒ By reinvigorating efforts to boost domestic -10\nrevenue mobilization, countries can generate -30\nmore resources for development spending, and -50\nattract more financing because a country’s revenue Exchange ratedepreciation Nominal interest rate\nstream is a main metric for its debt repayment GDP deflator Real GDP growth\nCumulative primary deficits Stock flows adjustments\ncapacity. Sub-Saharan African countries lag signifi- Change in debt to GDP\ncantly in revenue collections, with a median tax\nSources: IMF, World Economic Outlook database; and IMF staff\nratio of only 13 percent of GDP in 2022, compared calculations.\nwith 18 percent in other emerging economies\nand developing countries and 27 percent in advanced economies. Successful revenue mobilization efforts\noften require pursuing revenue administration reforSmosu racnesd: IiMmFp, rWovorinldg E tchoeno dmeics iOgunt looof kt adxa tpaboalsicei;e asn,d i nIMclFu sdtainffg c ablcyu lations.\nexpanding the base for value added tax and leveraging digitalization in tax collection (Togo, Guinea-Bissau).\nƒ Effective and proactive debt management is critical to lowering debt risks. Debt management can help strike\nthe balance between funding the government’s needs and ensuring that debt levels remain sustainable. This\nincludes enhancing debt reporting, lengthening maturities, and avoiding bunching of repayments to mitigate\nrefinancing risks.\nƒ For some countries that are likely to experience aggravated debt vulnerabilities and require debt reprofiling\nor restructuring, a well-functioning debt-resolution framework is vital to creating fiscal space. As the variety\nof debt instruments has widened, the creditor base has also become more diversified and negotiations more\ncomplex. Four countries in sub-Saharan Africa are currently seeking or are in the process of restructuring their\ndebt under the Common Framework—Ghana is the latest in the group (others are Chad, Ethiopia, and Zambia).\nThe Common Framework constitutes a step toward finding an effective and consistent way for the Group of\nTwenty and Paris Club official creditors to provide debt treatment for low-income countries, in case of need.\nThus far, coordination among creditors has been challenging and the process has been slower than antici-\npated. Potential reforms include defining processes that are more predictable and timelier, earlier sharing of\ninformation between creditors and the international financial institutions, and introducing a standstill on debt\nservice during the debt treatment process after staff-level agreement on an IMF program has been reached.\nFinally, international assistance remains critical to alleviating governments’ financing constraints. Donor nations\nshould ensure that official development assistance continues to go to those countries in greatest need. Many\nfragile and conflict-affected states, for instance, still rely primarily on official development assistance for\nfinancing their development needs. Donors can work with recipient countries towards setting a more modest\nand well-defined set of objectives, such as public health initiatives or targeted capacity building, where smaller,\nmore focused interventions can make a difference. In addition, higher volumes of countercyclical financing,\nparticularly from International Financial Institutions (IFIs), are necessary to offset the highly procyclical nature\nof private capital flows. Countercyclical financing helps countries that have lost market access or are subject to\ncapital outflows to smooth the adjustment, and, for instance, avoid abrupt and disruptive spending cuts.\n3 Stock-flow adjustments refer to discrepancies between the annual change in public debt and the budget deficit, a prominent feature of\ndebt dynamics in many sub-Saharan African countries. In such a case, the fiscal deficit may not be a good depiction of financing needs\nas debt may increase more (or less) than the fiscal deficit. A positive stock-flow adjustment means that the increase in government debt\nexceeds the annual deficit (or decreases less than implied by the surplus).\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n10 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nMonetary policy amid high inflation\nBy the beginning of 2023, inflation had started to fall in about half of countries in sub-Saharan Africa, while\ninflation is still rising or very volatile for the rest. Regardless of the trajectory, inflation remains high, with at\nleast 20 out of 45 countries still facing double-digit inflation, and a median inflation of about 10 percent as of\nFebruary 2023, more than twice the level at the end of 2019 (Figure 10). Median core inflation, which excludes\nenergy and basic food prices, was more than 6 percent as of the end of February (where data were available) but\nremains volatile, showing no clear signs of decline. Projections point to inflation staying above pre-pandemic\nlevels throughout 2027. Thus, policymakers have to continue this delicate dance between keeping inflation in\ncheck while being mindful of the still-fragile recovery. The good news is that external factors (such as imported\nfood and energy or swings in the exchange rate) rather than domestic demand pressures have driven much of\nthe inflation in the region. Many of these external factors have subsided in recent months, and thus inflation is\nlikely to follow suit, but because the transmission of lower international prices into domestic markets will take\ntime, inflation is expected to remain above pre-pandemic levels in the near term.\nAlmost all central banks in the region have hiked policy rates since December 2021,4 with cumulative rate hikes\nlarger in countries with higher inflation. However, the median interest rate hike was only about 270 basis points\nin sub-Saharan Africa between end-2021 and February 2023—lower by almost 130 basis points compared with\nthe median in emerging market and developing economies outside the region (Figure 11). For most countries,\ncurrent policy rates remain well below average policy rates over the past decade, while short-term real rates in\nthe region are also still broadly in negative territory. In some countries, growth in reserve money continues to\nexceed nominal GDP growth (Nigeria, Malawi). Angola is the only country to have cut the policy rate in early\n2023, given the sharp decline in headline inflation.\nFigure 10. Sub-Saharan Africa: Median Inflation, Figure 11. Sub-Saharan Africa: Changes in Policy\nDecember 2021–February 2023 Rate and Inflation\nChapter 1 - Figure 11\n(Percent, year-over-year) (Percentage points, between December 2021 and\nFebruary 2023)\n15 Lorem ipsum\nBotswana Policy rate Inflation (0.4)\nCountries where inflation is\n13 still increasing or volatile WAEMU (0.0)\nCEMAC (3.1)\nMauritius (4.2)\n11\nEswatini (2.4)\nAll sub-Saharan Rwanda (18.8)\n9\nAfrican countries Namibia (2.6)\nLesotho (4.5)\n7\nSouth Africa (1.1)\nCountries where inflation is declining Congo, Dem. Rep. (11.5)\n5 Kenya (3.5)\nDec-21 Mar-22 Jun-22 Sep-22 Dec-22 Zambia (–6.8)\nUganda (6.3)\nSources: Haver Analytics; country authorities; and IMF staff\nThe Gambia (6.0)\ncalculations.\nMozambique (3.1)\nNote: Country groupings are based on recent evolution of\ninflation for the last 3 months. The sample includes 37 countries Nigeria (6.3)\nwith available data. Malawi (13.9)\nAngola (–15.2)\nSierra Leone (27.2)\nGhana (40.2)\n0 10 20 30\nSources: Haver Analytics; and IMF, International Financial Statistics.\nNote: Numbers indicate change in inflation.\n4 Rates have stayed flat in a few countries like the Democratic Republic of the Congo and the Seychelles as of the end of\nFebruary 2023.\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE 11\nWhat is needed to move ahead? Policymakers need to adjust the pace of monetary policy tightening to both\nthe level and trajectory of inflation, in close coordination with fiscal policy, which can also tame domestic demand\npressures where they exist and contain money growth:\nƒ In cases where countries are still experiencing very high inflation, continued acceleration, or significant\nvolatility, authorities need to continue to tighten policy rates decisively because these countries are\nsusceptible to second-round effects and de-anchoring of inflation expectations. Tackling both after they\nbecome entrenched will be very difficult.\nƒ In countries that have signs of inflation peaking, but where inflation is still relatively elevated, authorities need\nto steer monetary policy cautiously until inflation is firmly on a downward trajectory, and inflation projections\nreturn within the target band of the central bank in the medium term.\nMore generally, given the uncertainty in predicting turning points in the inflation trajectories, monetary policy\nneeds to be data-dependent based on country-specific economic developments, including paying particular\nattention to wage growth in the coming months, but also international food and energy price developments\nbecause food and energy make up 50 percent of the region’s consumption basket on average.\nCountries with pegs or heavily managed floats have generally experienced lower inflation than those without\npegs, but their currency arrangement constrains their ability to control the pace of monetary policy tightening.\nAnchor currencies in the region include the euro (West African Economic and Monetary Union and Central\nAfrican Economic and Monetary Community), the South African rand, and the US dollar—all subject to a different\npace of monetary policy tightening by their respective central banks. Thus, currency peggers will not only have\nto keep a close watch on elevated inflation and its trajectory but also keep policy rates in lock with the anchor\npolicy rate to preserve external stability and foreign exchange reserves.\nExchange rate management amid large depreciation pressures\nSub-Saharan African countries experienced significant Figure 12. Sub-Saharan Africa: Exchange Rate\nexchange rate depreciations in 2022 (Figure 12), exac- versus US Dollar\nerbating the financing crisis by increasing the external (Percent change from September 2021 to February\ndebt service burden. These pressures were predom- 2023. Asterisk = Peg)\ninantly brought on by shifts in global fundamentals,\nincluding increases in interest rates in advanced * * * * * *\n* *\neconomies and adverse terms of trade. Currency\n*\n**\n* *\ndepreciations contributed to a rise in inflation and\n*\npublic debt while deteriorating the trade balance in the * * *\nUp >20\nnear-term. Exchange rate pressures also manifested\nUp 10-20\nin the depletion of reserve assets—about a quarter of Up 0-10 *\ncountries had reserves below three months of imports Down 0-10\nat the end of 2022—because foreign exchange inflows Down 10-20 *\nDown 20-30 *\nslowed down and central banks used their reserves to *\nDown 30-50\nfinance imports (Analytical Note “Managing Exchange Down > 50\nRate Pressures—Adapting to New Realities”). Source: Bloomberg Finance, L.P.\nMany countries acted to contain these pressures in 2022. The tightening of monetary policy helped to support\ntheir currencies, and some countries also intervened in foreign exchange markets to resist exchange rate\npressures. As reserves dwindled over the course of 2022, the degree of intervention also slowed down. Many\ncountries also applied administrative measures to control foreign exchange flows in 2022, including multiple\ncurrency practices (Nigeria), price control through moral suasion, and banning foreign currency transactions\nfor local businesses. Some countries also resorted to unconventional measures such as buying oil with gold\n(Ghana), and foreign exchange rationing became even more acute in 2022 (Ethiopia, Nigeria).\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n12 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nNonetheless, some adjustment of currencies seems unavoidable in many cases. There are certainly some\nreasons for sub-Saharan African countries to resist exchange rate pressures, including an elevated share of\nforeign-currency debt and weakly anchored inflation. But countries have to adjust to new fundamentals of\nhigher global interest rates and tighter financing conditions that are expected to last into the foreseeable future.\nFor most countries, the low levels of reserves limit the scope for interventions.\nPolicymakers can take several steps to mitigate possible adverse impacts on the economy as a result of the\nnecessary currency adjustments. In countries where inflation is aggravated by the exchange rate passthrough,\ntighter monetary policy will help alleviate the pressure by keeping inflation expectations in check and stem\ncapital outflows while attracting inflows. Where fiscal imbalances are key drivers of exchange rate pressures,\nfiscal consolidation can help to rein in external imbalances and contain the increase in debt related to\ncurrency depreciation.\nIn some cases, for countries that have sufficient reserve buffers, the use of foreign exchange intervention can\nreduce the volatility of exchange rate. For instance, for those with shallow foreign exchange markets, weak\nmonetary policy credibility, and large foreign exchange mismatches, foreign exchange intervention can tempo-\nrarily reduce some of the costs associated with excessive exchange rate movements. However, countries can\neasily run out of reserves if exchange rate pressures persist because of fundamental forces.\nResponding to climate change without sacrificing basic needs\nCritical development needs, like schooling, health, and infrastructure services, are in danger of not being\nadequately filled under the funding squeeze. Most governments have limited fiscal space, hampering their\nability to protect the most vulnerable and allocate sufficient funds to essential development sectors. Limited\nfinancing makes it particularly challenging to address the ongoing food security crisis that is affecting the region.\nIf the difficulties in addressing basic needs were not enough already, climate change is presenting additional\nspending pressures on shrinking fiscal budgets. For instance, cyclone Freddy—one of the latest in a series of\nclimate shocks to the region—has battered vulnerable families and communities in southern Africa, but countries\nhave limited means for climate adaptation. For the\nFigure 13. Climate Finance Flows to Sub-Saharan\nAfrican continent alone, adaptation costs could\nAfrica, 2020\nreach $50 billion per year by 2050, in a 2-degree\nOther flows: $0.6 bn\nCelsius scenario (GCA 2021), and mitigation costs\nfor a clean energy transition in Africa have been\nestimated at around $190 billion per year until 2030 Public grants: Private flows:\n$7.5 bn $3.1 bn\n(IEA 2022). However, climate funding to the region\nremains well below these needs, with private and\npublic sources estimated at about $22 billion in 2020,\nas shown in Figure 13 (Analytical Note “Closing the\nPublic non-\nPublic concessional\nGap: Concessional Climate Finance and Sub-Saharan concessional\ndebt: $7.7 bn\nAfrica”). Advanced economies have also fallen far debt: $3.5 bn\nshort of a 2009 pledge to mobilize $100 billion a year\nfor climate actions in developing countries. Source: Climate Policy Initiative.\nIt is important that resources allocated towards climate change do not crowd out those devoted to basic needs\nand other development goals. Official development assistance, for instance, has been declining over the last two\ndecades, and despite a temporary surge during the COVID-19 pandemic, aid flows are likely to shrink further\nover the near term. More support from advanced economies is needed to ensure that the essential development\nneeds of African countries are adequately financed, with the objective of fostering strong, resilient, and inclusive\ngrowth. Furthermore, climate finance must come on top of current aid flows rather than replacing them.\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE 13\nTherefore, what can be done to mobilize the additional climate financing to the region?\nƒ Unlock more concessional finance. Sub-Saharan African countries encounter challenges in accessing conces-\nsional climate finance, in part because requirements vary greatly across financing providers. For example,\nclimate funds—a key channel for concessional financing—have the potential to be scaled up significantly to\nhelp meet the region’s climate adaptation and mitigation needs. However, the numerous access require-\nments and project selection criteria for these funds present serious hurdles for countries in the region seeking\nto access this financing. To help unlock concessional financing, development partners—including the IMF—\ncan support countries in building and strengthening capacity. Priority areas include governance and public\nfinancial management, development of adequate data and climate strategies, formulation of legal and regu-\nlatory frameworks, and financial system reforms.\nƒ Increase private climate finance. The private sector has the potential to mobilize significant climate finance\nin the region as it does in the rest of the world. This can be done by developing the use of financing instru-\nments like green bonds or sustainability-linked bonds and attracting private institutional investors. Increasing\nthe attractiveness of private climate finance will require better data to support financial risk monitoring and\nanalysis on performance indicators, but also more transparency and disclosure.\nƒ Join forces: leverage concessional finance to catalyze private finance. In many cases, the risk-adjusted returns\nof climate projects in the region are insufficiently attractive to international or domestic investors. Concessional\nfinance in the form of guarantees, loan tenure extension, below market pricing and subordinated loans can\nhelp reduce the risks associated with climate projects and raise their attractiveness to private investors. This\n“crowding in” of private sector finance could increase the scale of climate infrastructure projects, although\nprivate funding is a difficult and complex issue, where options and best practices are still being developed.\nThe IMF’s new Resilience and Sustainability Facility is an important new financing instrument that will help\nsub-Saharan Africa address longer-term structural challenges, including those posed by climate change. It was\nlaunched in 2022, and five countries are already benefiting from the facility, including one from sub-Saharan\nAfrica (Rwanda). The Resilience and Sustainability Facility provides financing to support both adaptation and\nmitigation efforts, while also providing a framework of transparency, credibility, and stability that are essential in\nincentivizing private sector investments in climate resilient infrastructure and renewable energy projects.\nConclusion\nPolicymakers in sub-Saharan Africa are looking at yet at another difficult year, facing tighter financing conditions\non top of the ongoing repercussions from a recent cascading series of shocks. Despite serious financing\nconstraints, there are still a few policy levers available to alleviate the situation. For instance, domestic revenue\nmobilization offers a potential source of financing. Moreover, improving domestic legal and regulatory\nframeworks and undertaking financial systems reforms would not only attract much needed climate finance but\nalso other types of private finance to the region that can help address basic needs and development goals in\naddition to those arising from climate change. Above all, sub-Saharan Africa will require international assistance\nin addressing the funding squeeze. The IMF also stands ready to support the region. As of March 2023, the\nIMF has lending arrangements with 21 countries in the region and has received many program requests. The\ndisbursements associated with IMF programs, emergency financing facilities, and the special drawing rights\nallocation represented $50 billion between 2020 and 2022.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n14 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nReferences\nGlobal Center on Adaptation (GCA). 2021. State and Trends in Adaptation Report 2021. How Adaptation Can\nMake Africa Safer, Greener and More Prosperous in a Warming World.\nhttps://gca.org/wp-content/uploads/2022/08/GCA_STA_2021_Complete_website.pdf\nInternational Energy Agency (IEA). 2022. “Africa Energy Outlook 2022.” World Energy Outlook Report.\nInternational Energy Agency, Paris.\nSelassie, Abebe Aemro. 2022. “The Return of Macroeconomic Imbalances: Adapting to Life on\nthe Edge.” Remarks at the 13th Andrew Crockett Lecture Governors’ Roundtable for African\nCentral Bankers, All Souls College, Oxford. https://www.imf.org/en/News/Articles/2022/06/27/\nsp062722-13th-andrew-crockett-lecture-governors-roundtable-for-african-central-bankers.\nSelassie, Abebe Aemro. 2023. Remarks at the 2023 Oxford Center for the Study of African Economies\nConference, St Catherine’s College, Oxford. https://www.imf.org/en/News/Articles/2023/03/20/\nsp032023-abebe-selassie-2023-oxford-csae-conference.\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE 15\nStatistical Appendix\nUnless otherwise noted, data and projections presented in this Regional Economic Outlook are IMF staff estimates\nas of March 30, 2023, consistent with the projections underlying the April 2023 World Economic Outlook.\nThe data and projections cover 45 sub-Saharan African countries in the IMF’s African Department. Data defini-\ntions follow established international statistical methodologies to the extent possible. However, in some cases,\ndata limitations limit comparability across countries.\nCountry Groupings\nƒ Countries are aggregated into three (nonoverlapping) groups: oil exporters, other resource-intensive\ncountries, and non-resource-intensive countries (see table on page vi for the country groupings).\nƒ The oil exporters are countries where net oil exports make up 30 percent or more of total exports.\nƒ The other resource-intensive countries are those where nonrenewable natural resources represent\n25 percent or more of total exports.\nƒ The non-resource-intensive countries refer to those that are not classified as either oil exporters or other\nresource-intensive countries.\nƒ Countries are also aggregated into four (overlapping) groups: oil exporters, middle-income, low-income,\nand countries in fragile and conflict-affected situations. (see table on page vi for the country groupings).\nƒ The membership of these groups reflects the most recent data on per capita gross national income (averaged\nover three years) and the World Bank, Classification of Fragile and Conflict-Affected Situations.\nƒ The middle-income countries had per capita gross national income in the years 2019–21 of more than $1,085.00\n(World Bank, using the Atlas method).\nƒ The low-income countries had average per capita gross national income in the years 2019–21 equal to or lower\nthan $1,085.00 (World Bank, Atlas method).\nƒ The countries in fragile and conflict-affected situations are classified based on the World Bank, Classification\nof Fragile and Conflict-Affected Situations, FY2023.\nƒ The membership of sub-Saharan African countries in the major regional cooperation bodies is shown on\npage vi: CFA franc zone, comprising the West African Economic and Monetary Union (WAEMU) and CEMAC;\nthe Common Market for Eastern and Southern Africa (COMESA); the East Africa Community (EAC-5); the\nEconomic Community of West African States (ECOWAS); the Southern African Development Community\n(SADC); and the Southern African Customs Union (SACU). EAC-5 aggregates include data for Rwanda and\nBurundi, which joined the group only in 2007.\nMethods of Aggregation\nƒ In Tables SA1 and SA3, country group composites for real GDP growth and broad money are calculated as\nthe arithmetic average of data for individual countries, weighted by GDP valued at purchasing power parity\nas a share of total group GDP. The source of purchasing power parity weights is the World Economic Outlook\n(WEO) database.\nƒ In Table SA1, country group composites for consumer prices are calculated as the geometric average of data\nfor individual countries, weighted by GDP valued at purchasing power parity as a share of total group GDP.\nThe source of purchasing power parity weights is the WEO database.\nƒ In Tables SA2–SA4, country group composites, except for broad money, are calculated as the arithmetic\naverage of data for individual countries, weighted by GDP in US dollars at market exchange rates as a share\nof total group GDP.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n16 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nList of Sources and Footnotes for Statistical Appendix Tables SA1-SA4\nTables SA1.,SA3.\nSources: IMF, Common Surveillance database; and IMF, April 2023, World Economic Outlook database.\n1 In 2019 Zimbabwe authorities introduced the real-time gross settlement (RTGS) dollar, later renamed the\nZimbabwe dollar, and are in the process of redenominating their national accounts statistics. Current data\nare subject to revision. The Zimbabwe dollar previously ceased circulating in 2009, and between 2009–19,\nZimbabwe operated under a multicurrency regime with the US dollar as the unit of account.\nNote: “...” denotes data not available.\nTable SA2.\nSources: IMF, Common Surveillance database; and IMF, April 2023, World Economic Outlook database.\n1 For Zambia, government debt projections for 2022–24 are omitted due to ongoing debt restructuring.\n2 In 2019 Zimbabwe authorities introduced the real-time gross settlement (RTGS) dollar, later renamed the\nZimbabwe dollar, and are in the process of redenominating their national accounts statistics. Current data\nare subject to revision. The Zimbabwe dollar previously ceased circulating in 2009, and between 2009–19,\nZimbabwe operated under a multicurrency regime with the US dollar as the unit of account.\nNote: “...” denotes data not available.\nTable SA4.\nSources: IMF, Common Surveillance database; and IMF, April 2023, World Economic Outlook database.\n1 As a member of the West African Economic and Monetary Union (WAEMU), see WAEMU aggregate for\nreserves data.\n2 As a member of the Central African Economic and Monetary Community (CEMAC), see CEMAC aggregate\nfor reserves data.\n3 For Zambia, external debt projections for 2022–24 are omitted due to ongoing debt restructuring.\n4 In 2019 Zimbabwe authorities introduced the real-time gross settlement (RTGS) dollar, later renamed the\nZimbabwe dollar, and are in the process of redenominating their national accounts statistics. Current data\nare subject to revision. The Zimbabwe dollar previously ceased circulating in 2009, and between 2009–19,\nZimbabwe operated under a multicurrency regime with the US dollar as the unit of account.\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE 17\nTable SA1. Real GDP Growth and Consumer Prices\nReal GDP Consumer Prices, Annual Average\n(Annual percent change) (Annual percent change)\n2011–19 2020 2021 2022 2023 2024 2011–19 2020 2021 2022 2023 2024\nAngola 2.0 –5.6 1.1 2.8 3.5 3.7 16.3 22.3 25.8 21.4 11.7 10.8\nBenin 5.1 3.8 7.2 6.0 6.0 5.9 1.2 3.0 1.7 1.5 3.0 2.0\nBotswana 4.1 –8.7 11.8 6.4 3.7 4.3 4.6 1.9 6.7 12.2 6.5 5.2\nBurkina Faso 5.7 1.9 6.9 2.5 4.9 5.9 1.0 1.9 3.9 14.1 1.5 2.3\nBurundi 1.9 0.3 3.1 1.8 3.3 6.0 7.1 7.3 8.3 18.9 16.0 13.0\nCabo Verde 4.0 –14.8 7.0 10.5 4.4 5.4 1.1 0.6 1.9 7.9 4.5 2.0\nCameroon 4.4 0.5 3.6 3.4 4.3 4.4 1.9 2.5 2.3 5.3 5.9 4.7\nCentral African Republic –0.7 1.0 1.0 0.4 2.5 3.8 4.9 0.9 4.3 5.8 6.3 2.7\nChad 2.4 –2.1 –1.1 2.5 3.5 3.7 1.9 4.5 –0.8 5.3 3.4 3.0\nComoros 3.1 –0.2 2.1 2.4 3.0 3.6 1.8 0.8 –0.0 12.0 8.1 1.4\nCongo, Democratic Republic of the 5.9 1.7 6.2 6.6 6.3 6.5 10.2 11.4 9.0 9.0 10.8 7.2\nCongo, Republic of –0.5 –6.2 1.5 2.8 4.1 4.6 2.3 1.4 2.0 3.5 3.3 3.2\nCôte d'Ivoire 6.5 1.7 7.0 6.7 6.2 6.6 1.5 2.4 4.2 5.2 3.7 1.8\nEquatorial Guinea –2.7 –4.2 –3.2 1.6 –1.8 –8.2 2.5 4.8 –0.1 5.0 5.7 5.2\nEritrea 4.6 –0.5 2.9 2.6 2.8 2.9 2.6 5.6 6.6 7.4 6.4 4.1\nEswatini 2.5 –1.6 7.9 0.5 2.8 2.5 5.9 3.9 3.7 4.8 5.4 4.8\nEthiopia 9.5 6.1 6.3 6.4 6.1 6.4 14.4 20.4 26.8 33.9 31.4 23.5\nGabon 3.7 –1.9 1.5 2.8 3.0 3.1 2.3 1.7 1.1 4.3 3.4 2.6\nThe Gambia 2.5 0.6 4.3 4.4 5.6 6.3 6.3 5.9 7.4 11.5 11.3 8.7\nGhana 6.5 0.5 5.4 3.2 1.6 2.9 11.8 9.9 10.0 31.9 45.4 22.2\nGuinea 6.2 4.9 4.3 4.3 5.6 5.7 11.4 10.6 12.6 10.5 8.1 7.5\nGuinea-Bissau 3.9 1.5 6.4 3.5 4.5 5.0 1.3 1.5 3.3 7.9 5.0 3.0\nKenya 4.7 –0.3 7.5 5.4 5.3 5.4 7.4 5.3 6.1 7.6 7.8 5.6\nLesotho 1.5 –3.9 2.1 2.1 2.2 2.3 5.1 5.0 6.0 8.2 6.8 5.5\nLiberia 2.8 –3.0 5.0 4.8 4.3 5.5 12.5 17.0 7.8 7.6 6.9 5.9\nMadagascar 3.2 –7.1 5.7 4.2 4.2 4.8 7.0 4.2 5.8 8.2 9.5 8.8\nMalawi 4.1 0.9 4.6 0.8 2.4 3.2 17.2 8.6 9.3 20.8 24.7 18.3\nMali 4.3 –1.2 3.1 3.7 5.0 5.1 1.1 0.5 3.8 10.1 5.0 2.8\nMauritius 3.7 –14.6 3.5 8.3 4.6 4.1 3.0 2.5 4.0 10.8 9.5 6.9\nMozambique 5.5 –1.2 2.3 4.1 5.0 8.2 7.0 3.1 5.7 9.8 7.4 6.5\nNamibia 2.8 –8.0 2.7 3.8 2.8 2.6 5.2 2.2 3.6 6.1 5.0 4.6\nNiger 5.9 3.5 1.4 11.1 6.1 13.0 0.7 2.9 3.8 4.2 2.8 2.5\nNigeria 3.0 –1.8 3.6 3.3 3.2 3.0 11.6 13.2 17.0 18.8 20.1 15.8\nRwanda 7.1 –3.4 10.9 6.8 6.2 7.5 3.9 7.7 0.8 13.9 8.2 5.0\nSão Tomé & Príncipe 4.0 3.0 1.9 0.9 2.0 2.5 8.1 9.8 8.1 18.0 17.9 7.3\nSenegal 5.0 1.3 6.1 4.7 8.3 10.6 1.0 2.5 2.2 9.7 5.0 2.0\nSeychelles 4.7 –7.7 7.9 8.8 3.9 3.9 3.0 1.2 9.8 2.7 3.1 3.7\nSierra Leone 5.0 –2.0 4.1 2.8 3.1 4.8 10.0 13.4 11.9 27.2 37.8 25.9\nSouth Africa 1.6 –6.3 4.9 2.0 0.1 1.8 5.3 3.3 4.6 6.9 5.8 4.8\nSouth Sudan –5.3 –6.5 5.3 6.6 5.6 4.6 98.6 24.0 30.2 17.6 27.8 10.0\nTanzania 6.7 4.8 4.9 4.7 5.2 6.2 7.3 3.3 3.7 4.4 4.9 4.3\nTogo 5.7 1.8 5.3 5.4 5.5 5.5 1.4 1.8 4.5 7.6 5.3 2.9\nUganda 5.3 –1.3 6.0 4.9 5.7 5.7 6.8 2.8 2.2 6.8 7.6 6.4\nZambia 4.3 –2.8 4.6 3.4 4.0 4.1 9.0 15.7 22.0 11.0 8.9 7.7\nZimbabwe1 4.6 –7.8 8.5 3.0 2.5 2.6 30.2 557.2 98.5 193.4 172.2 134.6\nSub-Saharan Africa 3.7 –1.7 4.8 3.9 3.6 4.2 8.3 10.1 11.0 14.5 14.0 10.5\nMedian 4.4 –1.2 4.6 3.7 4.2 4.6 4.5 3.9 4.6 8.2 6.8 5.2\nExcluding Nigeria and South Africa 5.0 0.0 5.2 4.8 4.8 5.4 8.0 11.1 10.7 15.2 14.1 10.1\nOil-exporting countries 2.7 –2.3 3.0 3.2 3.3 3.1 11.2 13.0 15.9 17.2 16.8 13.4\nExcluding Nigeria 2.0 –3.6 1.5 2.9 3.4 3.3 10.2 12.3 13.2 13.0 8.5 7.4\nOil-importing countries 4.4 –1.3 5.7 4.3 3.7 4.7 6.7 8.6 8.5 13.1 12.5 9.0\nExcluding South Africa 5.8 0.8 6.0 5.1 5.1 5.8 7.5 10.9 10.2 15.6 15.2 10.6\nMiddle-income countries 3.1 –2.9 4.5 3.4 2.9 3.4 8.2 8.5 10.5 13.1 13.0 9.6\nExcluding Nigeria and South Africa 4.2 –1.7 5.0 4.4 4.3 4.7 7.4 7.9 9.1 12.5 11.7 7.6\nLow-income countries 6.0 1.9 5.4 5.1 5.4 6.1 8.8 14.8 12.5 18.2 16.7 12.9\nExcluding low-income countries in fragile\nand conflict-affected situations 5.6 1.0 5.6 4.5 5.1 5.7 7.8 4.9 4.8 8.2 8.5 6.9\nCountries in fragile and conflict-affected\nsituations 4.1 –0.2 4.2 4.1 4.1 4.4 10.3 15.6 16.4 20.3 20.0 15.5\nCFA franc zone 4.4 0.6 4.5 4.8 5.2 5.9 1.6 2.4 2.8 6.4 4.1 2.7\nCEMAC 2.4 –1.4 1.7 2.9 3.3 2.9 2.2 2.7 1.5 4.9 4.9 4.0\nWAEMU 5.7 1.7 5.9 5.7 6.1 7.4 1.2 2.2 3.5 7.1 3.7 2.1\nCOMESA (SSA members) 5.8 0.5 6.5 5.4 5.3 5.6 9.4 17.1 14.6 19.4 18.5 14.1\nEAC-5 5.5 0.9 6.6 5.1 5.4 5.8 7.1 4.4 4.4 7.0 7.0 5.4\nECOWAS 4.0 –0.6 4.4 3.9 3.8 4.2 9.3 10.2 12.7 17.0 17.9 12.6\nSACU 1.8 –6.4 5.2 2.3 0.4 2.0 5.2 3.2 4.6 7.1 5.8 4.8\nSADC 2.8 –4.4 4.6 3.2 2.3 3.4 7.7 10.7 9.6 11.5 9.6 8.0\nSee sources on page 16.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n18 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nTable SA2. Overall Fiscal Balance, Including Grants and Government Debt\nOverall Fiscal Balance, Including Grants Government Debt\n(Percent of GDP) (Percent of GDP)\n2011–19 2020 2021 2022 2023 2024 2011–19 2020 2021 2022 2023 2024\nAngola –0.5 –1.9 3.8 1.6 -0.2 -1.9 59.8 138.9 86.9 67.0 63.3 59.2\nBenin –2.4 –4.7 –5.7 –5.6 -4.3 -2.9 30.1 46.1 50.3 52.4 52.8 51.6\nBotswana –0.9 –10.9 –2.4 –2.0 -2.7 -1.5 17.6 18.7 19.0 19.9 20.6 19.3\nBurkina Faso –3.3 –5.1 –7.4 –10.4 -7.8 -6.7 30.3 44.9 48.2 54.3 58.0 60.2\nBurundi –5.1 –6.3 –5.2 –12.1 -4.6 -2.7 45.1 66.0 66.6 68.3 69.5 61.0\nCabo Verde –5.5 –9.1 –7.3 –4.5 -5.0 -3.6 111.0 145.1 142.9 127.4 120.2 117.9\nCameroon –3.5 –3.2 –3.0 –1.8 -0.8 -0.6 27.6 44.9 46.8 46.4 42.8 40.4\nCentral African Republic –1.3 –3.4 –6.0 –5.6 -3.0 -2.1 47.4 43.4 47.6 50.7 49.1 48.5\nChad –0.9 2.1 –1.6 5.1 7.0 4.5 41.1 54.1 55.9 50.4 43.7 40.1\nComoros 0.5 –0.5 –2.8 –3.7 -6.4 -5.6 18.1 24.0 25.4 29.1 32.5 35.7\nCongo, Democratic Republic of the 0.1 –1.4 –0.9 –1.6 -1.5 -2.5 18.0 16.7 16.3 14.6 11.0 9.0\nCongo, Republic of –2.1 –1.2 1.8 6.6 4.8 5.1 62.3 112.1 107.9 99.6 96.5 89.2\nCôte d'Ivoire –2.4 –5.4 –4.8 –6.7 -5.1 -4.0 32.4 46.3 50.9 56.8 63.3 60.6\nEquatorial Guinea –5.0 –1.7 2.6 4.7 3.3 1.7 25.2 48.4 42.6 27.1 26.4 29.5\nEritrea –2.9 –4.4 –4.1 –1.3 -0.1 0.6 173.6 179.7 175.4 163.8 146.3 135.3\nEswatini –4.5 –4.5 –4.6 –5.7 0.7 -0.8 22.5 41.2 41.5 45.4 39.3 37.2\nEthiopia –2.3 –2.8 –2.8 –4.2 -3.5 -3.0 49.5 53.9 53.8 46.4 37.6 33.3\nGabon 0.5 –2.2 –1.9 1.8 0.9 0.3 44.5 78.3 65.8 55.1 60.3 58.2\nThe Gambia –4.3 –2.2 –4.6 –4.8 -2.7 -2.1 70.2 85.9 83.5 84.0 73.0 68.6\nGhana –6.6 –17.4 –12.1 –9.9 -7.3 -8.4 49.6 72.3 79.6 88.8 98.7 92.8\nGuinea 0.6 –3.1 –1.7 –0.7 -2.3 -2.4 40.2 47.5 40.6 33.4 30.0 30.1\nGuinea-Bissau –2.9 –9.6 –5.6 –5.5 -3.8 -3.2 55.6 78.2 78.9 79.5 76.5 74.7\nKenya –6.2 –8.1 –7.1 –6.0 -5.2 -4.4 46.7 67.8 67.0 67.9 66.6 65.4\nLesotho –2.9 0.3 –4.4 –3.4 2.5 8.4 41.8 60.0 56.4 57.9 58.5 57.3\nLiberia –3.9 –3.8 –2.4 –6.9 -4.9 -3.9 28.7 58.7 53.3 55.4 57.1 56.1\nMadagascar –2.1 –4.0 –2.8 –6.8 -3.0 -3.3 38.1 51.2 52.3 57.0 53.1 52.0\nMalawi –3.8 –8.2 –8.6 –10.4 -7.8 -8.0 35.5 54.8 61.6 70.1 72.2 69.4\nMali –2.7 –5.4 –4.8 –4.8 -4.8 -4.3 31.5 46.9 50.7 53.2 54.1 54.9\nMauritius –3.3 –10.4 –4.0 –3.2 -4.2 -3.6 62.2 94.6 88.4 80.9 78.1 77.1\nMozambique –4.4 –5.4 –3.6 –5.2 -4.8 -3.1 78.9 120.0 107.2 104.5 102.8 103.1\nNamibia –6.1 –8.1 –8.8 –7.3 -4.1 -2.7 38.6 66.6 72.0 71.3 68.5 66.8\nNiger –3.7 –4.8 –5.9 –6.9 -5.3 -4.1 28.2 45.0 51.3 51.1 52.5 49.4\nNigeria –3.1 –5.6 –6.0 –5.5 -5.3 -5.4 21.9 34.5 36.5 38.0 38.8 39.0\nRwanda –2.6 –9.5 –7.0 –6.5 -5.4 -6.1 33.0 65.6 66.6 64.4 67.1 71.1\nSão Tomé & Príncipe –4.7 5.9 1.5 8.1 2.7 2.3 81.3 81.4 70.6 58.1 54.8 54.2\nSenegal –3.9 –6.4 –6.3 –6.1 -4.9 -4.0 47.2 69.2 73.2 75.0 73.1 69.9\nSeychelles 1.5 –16.3 –5.5 –1.0 -2.0 -1.8 67.0 84.8 72.9 63.4 62.5 60.0\nSierra Leone –5.1 –5.8 –7.3 –10.9 -6.2 -2.9 51.5 76.3 79.3 98.8 92.2 84.9\nSouth Africa –4.0 –9.6 –5.6 –4.5 -5.9 -6.1 45.0 69.0 69.0 71.0 72.3 74.0\nSouth Sudan –5.7 –5.6 –9.4 0.9 5.8 7.0 53.0 49.9 58.5 39.6 48.4 46.1\nTanzania –2.7 –2.5 –3.4 –3.3 -2.9 -2.6 36.3 39.8 42.1 41.6 40.1 38.5\nTogo –3.9 –6.9 –4.6 –7.3 -6.1 -5.3 48.8 60.3 63.7 68.0 68.5 69.0\nUganda –3.0 –7.5 –7.5 –5.8 -4.1 -3.3 27.8 46.3 50.6 50.8 50.2 49.2\nZambia1 –6.3 –13.8 –8.1 –7.9 -6.3 -6.7 50.9 140.2 110.8 … … …\nZimbabwe2 –3.4 0.8 –2.2 –2.1 -3.0 -2.2 51.8 84.4 59.8 92.8 102.3 100.0\nSub-Saharan Africa –3.3 –6.4 –5.0 –4.4 -4.3 -4.2 37.6 57.1 56.6 56.5 55.5 53.9\nMedian –3.1 –5.1 –4.6 –4.8 -4.1 -2.9 41.4 60.0 59.8 57.9 60.3 59.2\nExcluding Nigeria and South Africa –3.1 –5.7 –4.4 –4.0 -3.3 -3.1 42.6 63.3 60.1 59.2 57.0 53.9\nOil-exporting countries –2.6 –4.7 –4.1 –3.1 -3.4 -3.8 30.4 48.8 46.3 45.1 44.5 43.6\nExcluding Nigeria –1.7 –2.1 0.5 1.6 0.8 -0.3 48.7 89.9 70.1 59.3 56.8 53.8\nOil-importing countries –3.8 –7.4 –5.5 –5.1 -4.8 -4.5 42.7 61.4 61.6 62.9 61.5 59.6\nExcluding South Africa –3.6 –6.4 –5.4 –5.4 -4.3 -3.8 41.2 58.0 58.0 59.1 57.1 53.9\nMiddle-income countries –3.5 –7.4 –5.4 –4.5 -4.6 -4.8 37.2 59.1 58.6 58.7 58.8 57.9\nExcluding Nigeria and South Africa –3.5 –7.6 –4.8 –3.8 -3.3 -3.3 45.1 74.3 68.4 66.7 66.6 63.7\nLow-income countries –2.6 –3.6 –3.8 –4.2 -3.3 -3.0 39.4 51.2 50.5 50.5 46.9 43.8\nExcluding low-income countries in fragile\nand conflict-affected situations –2.7 –4.9 –4.9 –4.9 -3.7 -3.4 35.5 48.0 50.0 50.1 48.3 47.0\nCountries in fragile and conflict-affected\nsituations –2.8 –4.4 –4.7 –4.4 -4.1 -4.0 28.8 42.7 43.4 44.1 42.6 41.0\nCFA franc zone –2.7 –4.3 –4.0 –3.6 -2.8 -2.4 35.3 53.9 56.0 56.1 57.6 56.0\nCEMAC –2.5 –2.0 –1.5 1.5 1.5 1.0 36.8 59.9 58.1 51.9 50.3 48.3\nWAEMU –3.0 –5.5 –5.5 –6.7 -5.3 -4.3 34.7 50.5 54.8 58.7 61.7 60.1\nCOMESA (SSA members) –3.5 –5.4 –4.7 –4.9 -3.9 -3.6 42.1 60.4 57.4 57.6 52.7 48.9\nEAC-5 –4.3 –6.3 –6.1 –5.3 -4.3 -3.7 39.2 55.5 56.7 56.7 55.3 53.8\nECOWAS –3.3 –6.7 –6.5 –6.1 -5.4 -5.2 27.7 43.2 46.6 48.4 49.8 48.7\nSACU –4.0 –9.5 –5.5 –4.5 -5.6 -5.7 43.5 66.5 66.7 68.5 69.4 70.8\nSADC –3.2 –7.0 –3.9 –3.4 -4.1 -4.3 45.1 70.4 64.4 64.5 63.4 62.4\nSee sources on page 16.\nINTERNATIONAL MONETARY FUND • APRIL 2023\nTHE BIG FUNDING SQUEEZE 19\nTable SA3. Broad Money and External Current Account, Including Grants\nBroad Money External Current Account, Including Grants\n(Percent of GDP) (Percent of GDP)\n2011–19 2020 2021 2022 2023 2024 2011–19 2020 2021 2022 2023 2024\nAngola 34.6 38.4 24.4 19.5 19.3 19.2 3.0 1.5 11.2 11.0 6.2 3.1\nBenin 28.1 30.5 32.6 32.6 32.6 32.6 –4.9 –1.7 –4.2 –5.7 –5.8 –5.0\nBotswana 44.7 52.5 45.3 44.1 46.2 45.9 2.0 –8.7 –0.5 3.1 3.3 5.4\nBurkina Faso 32.3 43.6 49.0 41.9 43.1 43.6 –5.1 4.1 –0.4 –5.2 –3.6 –2.7\nBurundi 27.0 46.3 50.6 56.3 57.8 59.7 –14.1 –10.3 –12.4 –15.7 –15.6 –13.2\nCabo Verde 92.9 114.3 107.1 99.3 98.4 98.8 –6.9 –15.0 –11.3 –7.5 –5.0 –4.0\nCameroon 21.7 26.6 29.1 30.7 30.2 30.5 –3.3 –3.7 –4.0 –1.6 –2.8 –3.0\nCentral African Republic 24.0 30.3 33.3 31.9 29.6 28.9 –7.1 –8.2 –11.0 –13.3 –8.8 –7.4\nChad 14.6 20.8 23.3 21.3 21.2 20.4 –7.6 –7.3 –4.5 2.8 –1.4 –4.9\nComoros 25.1 31.2 36.7 36.7 35.0 33.5 –3.1 –1.7 0.8 –4.6 –7.3 –6.4\nCongo, Democratic Republic of the 11.5 20.2 22.2 21.1 22.1 23.3 –4.4 –2.2 –0.9 –2.2 –3.9 –3.0\nCongo, Republic of 27.4 35.8 34.0 31.8 36.8 38.3 –3.2 13.5 14.6 21.2 4.8 0.1\nCôte d'Ivoire 10.9 13.5 15.2 14.5 13.6 13.3 –0.3 –3.1 –4.0 –6.5 –5.7 –5.3\nEquatorial Guinea 13.2 17.1 14.7 10.4 10.4 10.4 –7.6 –4.2 –3.6 0.0 –2.1 –5.8\nEritrea 207.6 232.1 232.1 232.1 232.1 232.1 14.9 14.2 14.1 12.9 14.1 12.4\nEswatini 26.8 32.3 30.3 29.8 28.9 28.5 6.0 7.1 2.7 –1.7 3.4 3.5\nEthiopia 29.2 30.8 31.1 27.9 26.7 26.3 –7.1 –4.6 –3.2 –4.3 –3.4 –2.6\nGabon 23.7 27.9 23.1 21.9 24.6 26.6 2.4 –6.9 –4.5 1.2 –0.1 –1.1\nThe Gambia 38.6 56.0 59.5 55.3 52.6 51.2 –7.6 –3.0 –3.8 –15.0 –13.8 –10.5\nGhana 24.1 30.8 29.5 29.3 27.2 26.6 –5.5 –3.8 –3.7 –2.3 –2.9 –2.0\nGuinea 24.2 27.6 25.7 27.9 24.4 24.9 –16.3 –16.1 –2.1 –6.2 –5.2 –4.6\nGuinea-Bissau 38.5 45.6 50.6 48.4 47.1 46.7 –2.4 –2.6 –0.8 –5.9 –4.9 –4.7\nKenya 36.8 37.2 35.0 33.2 32.0 31.8 –6.9 –4.8 –5.2 –4.7 –5.3 –5.3\nLesotho 34.2 40.3 37.2 34.8 34.2 34.2 –6.1 –1.0 –4.4 –4.4 0.6 1.0\nLiberia 20.2 25.5 24.6 25.0 25.1 25.2 –20.1 –16.4 –17.9 –15.7 –17.0 –18.3\nMadagascar 23.4 28.7 28.6 34.3 35.0 36.0 –2.7 –5.4 –5.0 –5.6 –5.7 –5.1\nMalawi 17.2 17.5 20.1 23.6 24.7 24.9 –10.2 –13.8 –12.6 –3.6 –12.2 –13.3\nMali 27.1 36.1 39.4 40.4 40.4 40.4 –5.2 –2.2 –8.2 –6.9 –6.2 –5.5\nMauritius 104.3 156.8 160.0 142.8 130.8 131.0 –5.8 –8.8 –13.3 –13.5 –8.2 –6.8\nMozambique 33.5 43.3 43.6 43.7 43.5 42.2 –31.1 –27.3 –22.8 –36.0 –13.3 –34.6\nNamibia 58.3 71.6 71.4 70.4 69.7 69.6 –8.1 2.6 –9.8 –13.5 –5.3 –3.7\nNiger 17.5 19.2 20.1 19.7 20.8 20.8 –12.6 –13.2 –14.1 –15.5 –12.8 –8.1\nNigeria 24.3 25.2 25.2 25.8 27.3 28.7 1.2 –3.7 –0.4 –0.7 –0.6 –0.5\nRwanda 22.4 29.4 30.4 30.4 29.9 30.5 –10.5 –12.1 –10.9 –11.6 –13.2 –12.0\nSão Tomé & Príncipe 36.6 32.5 29.4 27.9 26.3 26.3 –15.6 –11.0 –11.2 –13.8 –11.8 –11.3\nSenegal 34.6 45.3 47.8 49.0 49.7 50.0 –7.2 –10.9 –13.6 –16.0 –10.4 –4.6\nSeychelles 66.9 113.3 108.2 101.6 101.8 100.9 –15.7 –13.5 –10.4 –7.3 –9.2 –10.0\nSierra Leone 22.2 29.5 32.4 33.9 30.0 28.0 –21.9 –7.1 –8.7 –10.3 –6.1 –5.1\nSouth Africa 66.4 74.1 70.3 71.8 71.9 72.7 –3.5 2.0 3.7 –0.5 –2.3 –2.6\nSouth Sudan 20.7 18.4 14.9 9.6 10.2 10.3 4.5 –19.2 –9.5 6.7 6.3 5.7\nTanzania 22.1 20.9 21.3 21.0 20.9 20.8 –7.0 –1.9 –3.4 –4.6 –4.0 –3.3\nTogo 37.6 45.4 47.5 49.1 50.4 51.0 –5.1 –0.3 –0.9 –2.8 –4.0 –3.7\nUganda 17.4 22.4 21.8 20.7 20.6 20.7 –5.7 –9.5 –8.3 –8.1 –10.9 –11.9\nZambia 21.0 31.3 24.3 24.3 24.2 23.9 0.3 10.6 9.2 2.4 3.8 4.5\nZimbabwe1 24.1 14.8 14.9 16.0 13.5 13.9 –7.9 2.5 1.0 0.8 0.4 0.8\nSub-Saharan Africa 35.3 38.6 37.2 36.7 36.6 36.9 –2.7 –2.8 –1.1 –2.0 –2.6 –2.7\nMedian 26.4 31.2 31.1 31.8 30.0 30.5 –5.5 –4.2 –4.2 –4.7 –5.0 –4.6\nExcluding Nigeria and South Africa 28.1 32.6 31.4 30.0 29.4 29.4 –4.5 –4.1 –3.3 –3.1 –3.5 –3.7\nOil-exporting countries 25.3 27.2 25.2 24.9 26.1 27.1 0.9 –3.2 0.7 1.8 0.5 –0.2\nExcluding Nigeria 27.5 32.0 25.2 22.5 22.8 23.1 0.2 –1.7 3.2 7.0 2.8 0.4\nOil-importing countries 41.6 44.9 43.6 43.0 42.1 41.9 –5.2 –2.6 –1.9 –4.1 –4.2 –4.1\nExcluding South Africa 28.2 32.7 32.7 31.6 30.8 30.7 –6.4 –4.6 –4.7 –5.7 –5.0 –4.7\nMiddle-income countries 38.4 42.1 39.9 39.7 39.7 40.2 –1.5 –1.8 0.2 –0.6 –1.5 –1.6\nExcluding Nigeria and South Africa 30.8 36.1 32.9 31.3 30.6 30.6 –2.1 –2.8 –1.9 –0.7 –1.8 –2.0\nLow-income countries 24.6 28.7 29.6 28.5 28.2 28.2 –8.0 –5.5 –4.9 –5.8 –5.3 –5.5\nExcluding low-income countries in fragile\nand conflict-affected situations 21.6 24.6 24.8 25.5 25.1 25.3 –8.0 –6.8 –5.9 –6.4 –7.2 –6.9\nCountries in fragile and conflict-affected\nsituations 25.1 27.7 28.3 27.9 28.7 29.5 –1.7 –3.8 –1.8 –2.2 –2.0 –2.2\nCFA franc zone 22.0 27.7 29.5 28.8 29.1 29.4 –3.7 –3.6 –4.7 –4.4 –4.8 –4.3\nCEMAC 20.5 25.9 26.4 26.0 26.8 27.5 –3.3 –2.8 –2.1 2.1 –1.4 –2.9\nWAEMU 23.0 28.7 31.1 30.1 30.2 30.2 –4.3 –4.0 –6.2 –8.4 –6.8 –5.1\nCOMESA (SSA members) 30.1 34.5 33.8 32.2 31.2 31.2 –5.7 –4.1 –3.7 –4.2 –4.6 –4.2\nEAC-5 27.4 29.2 28.4 27.4 26.8 26.8 –7.0 –5.1 –5.6 –5.8 –6.4 –6.3\nECOWAS 24.2 27.0 27.4 27.6 28.2 29.0 –1.0 –4.2 –2.4 –3.0 –2.6 –2.0\nSACU 64.6 72.4 68.5 69.7 69.9 70.5 –3.4 1.6 3.1 –0.7 –2.1 –2.2\nSADC 49.6 54.7 50.8 50.6 50.0 50.1 –3.4 –0.1 1.9 –0.4 –1.6 –2.4\nSee sources on page 16.\nAPRIL 2023 • INTERNATIONAL MONETARY FUND\n20 REGIONAL ECONOMIC OUTLOOK—Sub-Saharan Africa\nTable SA4. External Debt, Official Debt, Debtor Based and Reserves\nExternal Debt, Official Debt, Debtor Based Reserves\n(Percent of GDP) (Months of imports of goods and services)\n2011–19 2020 2021 2022 2023 2024 2011–19 2020 2021 2022 2023 2024\nAngola 33.6 90.9 68.9 44.2 46.2 45.9 9.3 9.5 7.1 6.8 6.5 6.8\nBenin1 15.6 30.3 35.2 38.3 38.7 38.1 … ... ... ... ... ...\nBotswana 15.4 12.5 10.1 10.4 10.9 9.5 11.4 6.5 6.3 6.6 6.8 7.2\nBurkina Faso1 20.2 24.4 24.0 25.4 24.7 23.9 ... ... ... ... ... ...\nBurundi 19.5 17.5 19.9 19.3 27.6 28.8 2.5 1.0 2.3 1.5 2.2 3.4\nCabo Verde 85.5 130.3 114.9 108.1 101.1 98.2 5.7 6.9 6.8 6.2 6.2 6.5\nCameroon2 18.4 32.5 30.3 32.9 30.5 29.3 ... ... ... ... ... ...\nCentral African Republic2 29.2 36.3 32.8 34.4 31.8 30.7 ... ... ... ... ... ...\nChad2 24.2 28.2 24.4 23.0 21.8 21.7 ... ... ... ... ... ...\nComoros 17.2 23.1 24.5 28.4 31.6 34.8 7.1 7.9 9.4 7.4 7.5 7.7\nCongo, Democratic Republic of the 14.1 13.8 14.8 13.4 10.1 8.3 1.0 0.6 0.8 1.1 1.5 1.9\nCongo, Republic of 2 25.4 31.9 26.6 27.0 27.1 24.9 ... ... ... ... ... ...\nCôte d'Ivoire1 19.6 33.6 30.8 36.1 36.7 35.9 ... ... ... ... ... ...\nEquatorial Guinea2 8.8 16.3 12.2 8.4 9.0 9.0 ... ... ... ... ... ...\nEritrea 62.2 57.3 55.2 51.2 45.8 42.8 4.7 4.0 4.1 4.5 5.0 5.3\nEswatini 8.8 15.2 15.2 18.6 19.3 19.8 3.7 3.1 3.1 2.4 2.4 2.4\nEthiopia 25.4 28.8 29.1 23.0 18.2 15.8 2.0 2.0 1.5 0.7 0.6 0.5\nGabon2 29.8 49.0 36.1 31.1 33.1 32.4 ... ... ... ... ... ...\nThe Gambia 37.5 49.4 47.5 48.3 44.7 42.0 3.6 5.8 7.0 5.1 4.5 4.2\nGhana 26.3 39.2 38.2 42.7 51.8 54.1 2.8 2.5 2.4 0.6 0.8 1.7\nGuinea 23.2 27.0 24.8 21.9 19.5 20.4 2.2 1.9 2.5 2.5 2.5 2.5\nGuinea-Bissau1 30.0 43.9 38.2 40.0 36.7 34.9 ... ... ... ... ... ...\nKenya 23.6 32.2 32.3 31.9 33.5 33.9 4.6 4.5 4.7 3.7 3.0 3.3\nLesotho 35.3 46.6 41.0 42.5 44.6 44.5 4.8 4.1 5.1 4.0 4.5 5.6\nLiberia 18.4 41.1 37.2 37.2 38.1 38.1 2.1 2.2 4.1 3.5 3.5 3.5\nMadagascar 23.4 36.4 37.2 38.9 39.9 39.9 3.4 4.8 4.5 3.8 3.7 3.6\nMalawi 19.4 31.8 30.9 29.9 33.2 34.4 2.5 0.9 0.4 1.1 1.3 2.8\nMali1 22.8 31.5 27.2 26.7 25.1 23.9 ... ... ... ... ... ...\nMauritius 13.3 20.2 23.3 23.5 24.5 23.8 8.4 14.4 12.5 12.1 10.0 9.8\nMozambique 63.8 90.7 85.1 76.1 72.7 73.6 3.5 4.7 2.6 2.9 2.1 2.1\nNamibia 12.6 21.3 15.7 17.2 16.9 15.5 3.4 4.1 4.5 4.6 4.7 4.8\nNiger1 18.4 33.0 31.5 33.0 32.7 30.9 ... ... ... ... ... ...\nNigeria 3.7 8.0 9.1 9.4 9.4 9.8 6.1 6.6 6.0 5.7 6.0 6.3\nRwanda 28.0 54.7 53.4 51.5 55.7 61.7 3.9 5.4 4.4 3.7 3.7 4.1\nSão Tomé & Príncipe 75.1 64.9 58.5 58.1 54.8 54.2 3.8 4.5 4.3 3.8 3.7 3.8\nSenegal1 32.9 48.9 45.8 47.5 43.5 39.9 ... ... ... ... ... ...\nSeychelles 35.4 38.8 39.5 31.1 33.7 34.1 3.6 3.7 3.7 3.6 3.5 3.6\nSierra Leone 31.6 48.3 48.3 51.0 56.8 53.0 3.2 4.6 6.1 4.6 3.7 3.3\nSouth Africa 15.0 23.4 18.6 20.7 22.0 22.1 5.8 6.4 5.5 5.2 4.8 4.4\nSouth Sudan ... ... ... ... ... ... 1.7 0.1 0.9 0.4 0.5 0.9\nTanzania 25.9 28.4 28.8 27.4 26.3 25.0 4.8 5.3 4.3 3.9 3.8 4.0\nTogo1 13.4 28.3 25.4 27.5 26.2 26.3 ... ... ... ... ... ...\nUganda 16.9 29.8 27.7 26.8 28.9 29.1 4.6 4.3 4.6 3.4 3.4 3.8\nZambia3 26.4 66.6 53.9 … … … 2.7 1.3 2.9 3.1 3.3 4.2\nZimbabwe4 31.7 26.6 19.8 21.5 23.6 26.3 0.5 0.1 1.3 0.4 0.2 0.2\nSub-Saharan Africa 16.6 26.5 24.6 24.2 24.3 23.8 5.2 5.0 4.6 4.1 4.0 4.1\nMedian 22.8 32.1 30.8 31.1 32.3 31.0 3.8 4.3 4.3 3.7 3.7 3.8\nExcluding Nigeria and South Africa 24.4 36.6 33.9 31.8 31.4 30.4 4.3 3.7 3.6 3.1 2.9 3.1\nOil-exporting countries 11.2 20.1 19.5 18.0 17.9 17.8 6.3 6.4 5.6 5.5 5.8 6.1\nExcluding Nigeria 27.6 55.8 45.4 36.1 36.8 36.5 6.7 5.6 4.8 5.1 5.2 5.5\nOil-importing countries 20.3 29.9 27.2 27.6 27.7 27.1 4.4 4.3 4.0 3.4 3.1 3.1\nExcluding South Africa 23.7 32.9 31.4 30.7 30.1 29.0 3.5 3.3 3.3 2.5 2.4 2.6\nMiddle-income countries 14.7 25.2 23.2 23.2 23.9 23.7 5.8 5.8 5.2 4.9 4.8 5.0\nExcluding Nigeria and South Africa 24.6 42.0 37.9 35.7 37.1 36.5 5.4 4.6 4.3 4.0 3.8 4.2\nLow-income countries 24.5 30.5 29.1 27.1 25.2 24.1 2.8 2.8 2.7 2.0 1.9 2.0\nExcluding low-income countries in fragile\nand conflict-affected situations 22.5 32.0 31.1 30.1 30.2 30.0 3.9 4.2 3.9 3.4 3.3 3.6\nCountries in fragile and conflict-affected\nsituations 11.1 17.2 17.4 16.7 15.7 15.3 4.8 4.8 4.4 4.0 4.0 4.2\nCFA franc zone 21.0 33.7 30.8 32.2 31.8 30.9 4.6 4.6 4.4 4.1 3.9 3.9\nCEMAC 20.9 33.0 28.2 27.1 26.8 26.2 4.2 3.2 3.0 4.2 4.3 4.5\nWAEMU 21.3 34.1 32.3 35.3 34.6 33.4 4.9 5.4 5.2 4.1 3.6 3.7\nCOMESA (SSA members) 22.2 30.2 29.1 26.7 25.4 24.0 3.2 3.1 3.1 2.5 2.2 2.4\nEAC-5 23.1 31.5 31.3 30.4 31.4 31.3 4.6 4.7 4.5 3.7 3.4 3.7\nECOWAS 9.9 18.6 19.2 19.7 20.1 20.0 5.1 5.2 4.9 4.3 4.4 4.8\nSACU 14.9 23.0 18.3 20.3 21.4 21.4 5.9 6.3 5.4 5.3 4.9 4.6\nSADC 20.4 32.2 27.0 26.4 26.9 26.5 5.7 5.6 4.8 4.7 4.4 4.4\nSee sources on page 16.\nINTERNATIONAL MONETARY FUND • APRIL 2023", "source": "imf", "stratum": "imf", "fetch_date": "", "url": "https://www.imf.org/-/media/Files/Publications/REO/AFR/2023/April/English/text.ashx"}